Hertz Misses Estimates on EV Fleet Rethink, Plans Cost Cuts

David Welch
Tue, February 6, 2024 

(Bloomberg) -- Hertz Global Holdings Inc. is looking to cut costs after it missed analysts’ fourth-quarter estimates as it sold down its fleet of Tesla Inc. electric vehicles.

The rental car giant reported Tuesday that it lost an adjusted $1.36 per share, worse than the 76-cent loss analysts’ projected for the quarter, swinging from a 70-cent profit in the previous quarter and a 50-cent profit a year ago.

The drop into the red follows the company’s decision to offload 20,000 Tesla EVs, about one-third of its electric fleet, saying it lost money renting them out. Chief Executive Officer Stephen Scherr said in an interview that Hertz also plans to cut $250 million in other costs, which may include layoffs, with a total restructuring that should show better results starting in the second half.

“The company clearly took on more EV exposure than where the market otherwise took us,” Scherr said. “The decision we made in the fourth quarter to make a pivot on EV sets us up for a transitional year that’s achievable. We’ll spring into 2025 a better company.”

The company’s shares fell 5% at 9:35 a.m. New York Tuesday. Hertz fell 21% this year as of the close on Monday.

Hertz’s course correction on EVs is a blow to Scherr and the company’s strategy of becoming an early adopter of EVs. That move was undermined by high repair costs, a series of price cuts by Tesla and an industry-wide slowdown in sales growth of battery-electric models.

The company is one month into a 12-month plan to sell off the 20,000 Teslas, which resulted in a $245 million charge last year. Longer term, Scherr said, EVs will be the direction of travel, he said, but for now, not all consumers are ready to make the switch.

Whether Hertz sells more Tesla vehicles next year and buys new EVs will depend on demand both at the rental counter and in the vehicles market, he said.

“Hertz bought more EVs than near-term demand would justify,” he said. “We’re in the consumer business. We’re in the business of providing ease of use. To the extent that some people find EVs more difficult to use, not as convenient a car as others, we’re giving people a choice.”

Scherr said Hertz’s cost cuts will be across the board, looking at head count and examining the company locations and possibly closing some that don’t meet profit expectations.

The company saw pressure in other areas. Used-vehicle prices fell 10% in the quarter, Scherr said, which resulted in depreciation per unit in its gasoline-powered fleet rising to $350 a vehicle per month, up from $282 in the third quarter of last year.

Interest rates hit profits as well. Hertz’s fleet interest expense soared to $91 a vehicle in the fourth quarter, up from $55 a vehicle in the fourth quarter of 2022.

Hertz reported quarterly revenue of $2.18 billion, largely in line with analysts’ expectations for $2.16 billion.

France backs Renault's current plan, source says, amid merger talk

Reuters
Tue, February 6, 2024

French car maker Renault holds an investor day for its EV unit Ampere in Paris

PARIS (Reuters) - France continues to support Renault's strategy of remaining a standalone carmaker with several industrial and technological partnerships, a finance ministry source said on Tuesday, after a newspaper reported the government was studying a Renault merger.

Italian daily Il Messaggero reported on Sunday that the French government, which is Renault's largest shareholder and also has a stake in Stellantis, was examining plans for a merger between the two groups.

Asked about the government's position towards Renault's strategy, the source said there was "no change".

The government has from the start supported Renault Chief Executive Luca de Meo's strategy to build up a new France-based electric and software unit called Ampere alongside Renault's legacy internal combustion engine and hybrid businesses.

While recognising that Renault lacks the scale and resources of its rivals, the government has also supported the company's efforts to build ties beyond its traditional allies Nissan and Mitsubishi by striking up partnerships with Geely, Saudi Aramco, Google and Qualcomm.

With its stock market value stagnating around 10 billion euros ($10.7 billion) despite improved finances, Renault is often cited in financial markets as a potential takeover target.

The group's decision last week to scrap Ampere's initial public offering rekindled such rumours, which had previously surfaced after the group's 2022 exit from Russia, its second biggest market after France at the time.

Stellantis Chairman John Elkann denied on Monday that the carmaker had merger plans, responding to press speculation about a tie-up with Renault, which declined to comment.

($1 = 0.9318 euros)

(Reporting by Gilles Guillaume and Leigh Thomas; Editing by Richard Lough and Mark Potter)

New York Fed sees signs of trouble in auto borrowing as overall debt level rises

Michael S. Derby
Tue, February 6, 2024 

FILE PHOTO: Clouds over the Federal Reserve in Washington


By Michael S. Derby

(Reuters) - Overall borrowing levels in the U.S. rose modestly during the final three months of last year as more types of borrowing ran into trouble, especially on the auto front, even as overall difficulties remain below levels seen before the onset of the COVID-19 pandemic.

Total household debt rose by $212 billion in the fourth quarter of 2023 to $17.5 trillion, the New York Federal Reserve said on Tuesday in its latest quarterly Household Debt and Credit Report.

Amid the rise in debt, delinquency rates and the transition into troubled status were both higher. The New York Fed said 3.1% of outstanding debt was in some type of delinquency, up one-tenth of a percentage point from the third quarter. But overall delinquency rates were 1.6 percentage points lower than in the last quarter of 2019 before the pandemic struck.

The New York Fed report describes credit conditions in an economy that has been growing strongly amid historically low levels of unemployment and rising incomes. But at the same time, inflation has been high and the U.S. central bank has raised interest rates aggressively and kept short-term borrowing costs high, which in turn has made credit more expensive and challenging to manage for borrowers.

Some of those issues manifested in delinquency transition rates for all types of debt except student loans, which increased at the close of 2023, with 8.5% of credit card loans and 7.7% of auto loans running into trouble. Student loan payments are currently in an unusual situation given what had been a period of forbearance and forgiveness for many borrowers, amid a return to payments for many borrowers.

CREDIT CARD DELINQUENCIES

The New York Fed said in a blog posting accompanying the report that delinquency rates have been rising from very low levels in 2021 amid a retreat in government support efforts. In the case of auto loans, delinquency rates are now above pre-pandemic levels "and the worsening appears to be broad-based," New York Fed researchers wrote.

"Loans opened during 2022 and 2023 are, so far, performing worse than loans opened in earlier years, perhaps because buyers during these years faced higher car prices and may have been pressed to borrow more, and at higher rates," they wrote. Increased delinquency rates "merit monitoring in the months ahead, particularly with the amplified distress shown by borrowers in lower-income areas."

The report said auto loan balances overall were up by $12 billion to $1.61 trillion in the fourth quarter.

The report said that when it comes to housing, total new mortgage borrowing rose by $112 billion to $12.25 trillion in the fourth quarter. Meanwhile, credit card balances were up $50 billion to $1.13 trillion, while student loan balances rose $2 billion to $1.6 trillion in the last three months of 2023.

The New York Fed noted "serious credit card delinquencies increased across all age groups, notably with younger borrowers surpassing pre-pandemic levels." It added that the number of mortgage loans transitioning into trouble remained historically low, while noting a rise in borrowing through home equity lines for the seventh straight quarter.

(Reporting by Michael S. Derby; Editing by Paul Simao)

Freeland announces $199 million in support for low-income renters, shelters

The Canadian Press
Tue, February 6, 2024 



OTTAWA — Finance Minister Chrystia Freeland says the federal government is putting nearly $200 million in new money toward supporting low-income renters and shelters.

Ottawa is pouring an additional $99 million into the Canada Housing Benefit, which offers financial support for low-income renters in partnership with provinces and territories.

Freeland says another $100 million will go toward emergency winter funding to help shelters to create more spaces for people without housing.

The measures come as the government faces increasing pressure to address skyrocketing rent prices and help communities struggling with homelessness.

Freeland made the announcement alongside other cabinet members at a weekly news conference in Ottawa.

Ministers with portfolios that touch on the economy have been holding almost-weekly news conferences since the fall as part of the Liberal government's effort to sell policies that address cost-of-living issues.

"We all know that housing is the central challenge in Canada right now," Freeland said Tuesday.

"It's a central challenge in people's lives, and this is especially true for Canadians who are struggling with the high cost of rent."

Data from Rentals.ca and market research firm Urbanation showed the average asking rent for December in Canada jumped 8.6 per cent year-over-year to a record high of $2,178 per month.

This report by The Canadian Press was first published Feb. 6, 2024.

The Canadian Press

FAA tells Congress not to raise the mandatory retirement for pilots until it can study the issue

The Canadian Press
Tue, February 6, 2024 



WASHINGTON (AP) — The Federal Aviation Administration is warning Congress not to raise the mandatory retirement age for airline pilots until the agency can study whether older pilots would raise safety risks.

FAA Administrator Michael Whitaker said in a letter to two key senators that pilot fitness is critical to safety, and the agency should be able to create safeguards before raising the age limit to a proposed 67 from the current 65.

Whitaker was asked about the issue during a House committee hearing Tuesday, and didn't close the door on raising the age ceiling.

“We don't have a position on the retirement age, but if it changes we would like to have data to support the change,” he told lawmakers.

Sen. Maria Cantwell, D-Wash., chair of the Senate committee that oversees aviation, endorsed the FAA’s position.

“When it comes to raising the pilot retirement age, the FAA has made clear that a scientific and safety analysis must come first. That has not happened,” Cantwell said in a statement. “Aviation safety is paramount, and now is not the time to take a shortcut.”

The House voted last year to raise the retirement age as part of a larger bill covering FAA operations. Cantwell's Senate committee is scheduled to take up its version of the bill Thursday.

The Biden administration has previously opposed raising the age limit. Raising the retirement age would put the United States out of step with other countries, and U.S. pilots over 64 would not be allowed to work on international flights.

The Air Line Pilots Association has opposed raising the age limit, saying it would not increase the pool of pilots.

The Regional Airline Association supports the change. The association is a trade group for smaller airlines, which have faced shortages of crews and have been forced to raise pay to attract pilots.

The age limit is one of several contentious issues in a bill to reauthorize FAA programs for five years, including pilot training requirements and consumer-protection provisions.

The Associated Press

No evidence of grocery profiteering, researcher tells House of Commons food committee

The Canadian Press
Tue, February 6, 2024 


OTTAWA — Dalhousie University food researcher Sylvain Charlebois says there is no substantiated evidence of profiteering within the food retail industry in Canada.

He says the government should be more concerned with price co-ordination within the industry, noting a recent example where Loblaw changed a discount program, citing alignment with its competitors.

Charlebois, who is the director of Dalhousie’s Agri-Food Analytics Lab, made the comments before a House of Commons committee studying food prices.

Canada's largest grocers have been under intense scrutiny from the committee and from the federal ministers of industry and food as grocery prices continue to rise at a faster pace than overall inflation.

Headline inflation accelerated to 3.4 per cent in December, while grocery prices rose 4.7 per cent that month.

Charlebois says the committee should also prioritize the grocery code of conduct, which is nearly complete but at a standstill with Loblaw and Walmart saying they're not ready to sign on.

This report by The Canadian Press was first published Feb. 6, 2024.

Companies in this story: (TSX:L)

The Canadian Press

B.C. appoints panel to consult with industries ahead of Labour Relations Code review


CBC
Sun, February 4, 2024 

B.C. Labour Minister Harry Bains has appointed a 3-member panel to review the province's Labour Relations Code as part of a commitment to keep the code up to date. 

(Michael McArthur/CBC - image credit)

The provincial government has appointed a panel to consult with industries and labour groups on changes to the B.C. Labour Relations Code this spring, and one union executive hopes the independent review will lead to better gains for workers across the province.

A three-member panel was appointed Thursday by Labour Minister Harry Bains as part of a commitment to review the code every five years. The last independent review of the code was conducted in 2018.

The code governs how provincially regulated employers interact with workers and trade unions, as well as collective bargaining issues such as dispute resolution.

Sandra Banister, an experienced labour lawyer and one of the panel members, told CBC News the panel is also expected to consult with Indigenous groups as part of its mandate to ensure labour laws in B.C. are up to date.

Banister said the panel would likely hear about various issues that have changed work since 2018 — including artificial intelligence, gig work, and remote work — and that she's hopeful the panel's recommendations are accepted by the government.

"It's very important the labour code is balanced and creates a level playing field," she said. "If the code is balanced, it works better for everybody, and no one feels their interests are being run over or ignored."

The last comprehensive review of the code led to legislative amendments in 2019, which were passed unanimously in the legislature, and more amendments in 2022.

Bains announced the changes to the province's Labour Relations Code on April 30, 2019, after the panel released their recommendations in 2018. (Mike McArthur/CBC)

Banister said the extensive consultation that happened in 2018 meant all the panel's recommendations made it to the resulting legislation.

"That's why it was so gratifying that the recommendations from the last code review received such widespread support."

The three-member panel, which also consists of another labour lawyer and a former labour mediator, has already sent a letter to labour interest groups asking for submissions by March 1. It will also hold in-person and virtual hearings throughout the province.

The panel will provide its report to the labour minister by May 31.

Union executive hopes code recognizes virtual picket lines

Brynn Bourke, executive director of the B.C. Building Trades Council, said one thing she was looking forward to bringing up in consultations was making unionization easier.

"If you made changes to improve the access to collective bargaining, through things like creating a sector where people could participate and [creating] minimum conditions in a sector — that would open up a whole bunch of opportunities for people to have a say in their working conditions," she told CBC News.

Bourke said establishing more minimum standards across work sectors would not only make unionization for construction workers easier, but also extend the possibility of unionization to gig workers.

The last raft of legislative changes, related to the labour code review, extended successorship protection to janitorial workers, security guards and food service workers, among other roles.

Successorship protection refers to the idea that a unionized workforce have their union rights carry over in case their employer changes.

Bourke said she wants to see successorship protection extended to even more sectors after the latest labour code review.

"I'm very much watching how we modernize the code in terms of recognizing virtual picket lines," she said.

"When work is happening remotely and we're trying to maintain those picket lines in a virtual context, we need stronger language that will account for that."

Bourke added that the union called for an increase in funding to the Labour Relations Board — which adjudicates disputes between employers and workers — in 2018.

"We need to improve timely access to board services and board decisions," she said. "We will be making that recommendation strongly again."

B.C. oil and gas producers warned of potential water shortages in drought-stricken areas

CBC
Sun, February 4, 2024 

A gas plant near Rolla, B.C., in the province's northeast. The B.C. Energy Regulator is warning oil and gas producers of potential water shortages in 2024.

 (Submitted by Wayne Sawchuk - image credit)

The agency overseeing oil and gas producers in British Columbia is warning of potential water shortages in 2024.

The B.C. Energy Regulator (BCER), formerly the B.C. Oil and Gas Commission, says persistent drought last summer and fall in the northern part of the province continue to negatively affect streamflows and groundwater, with snowpack levels at last reading only 72 per cent of the historical average.

"The combined impact of these events has created an increased potential for drought conditions in 2024 and another summer of possibly limited water supply in the north," reads the notice posted Jan 26.

The northeast of the province, where much of B.C.'s oil and gas production is concentrated, has been hit hardest by the drought.

Thefour water basins in the region — Fort Nelson, East Peace, North Peace and South Peace — remain at drought level 5, the most severe classification on the provincial scale. Level 5 is declared when "adverse impacts to socio-economic or ecosystem values are almost certain."

A significant portion of gas extraction in the region involves water-intensive hydraulic fracturing, or fracking.

The fracking process blasts water, sand and chemicals at high pressure more than two kilometres underground to release the natural gas trapped in rock formations.

BCER hydrologist Ryan Rolick said the warning about potential water shortages was issued out of an abundance of caution, recognizing that snowpacks might still improve, and that spring and summer could still deliver the precipitation desperately needed.

But the opposite is also possible, he said.

"If snowpacks do not improve, or if we have a similar spring and summer to 2023, it could mean another season of potentially critical water shortages, primarily in the northeast," said Rolick.

The fracking process extracts natural gas by blasting water, sand and chemicals at high pressure into underground rock formations. (Brennan Linsley/The Associated Press)

Fracking is 'not creating new faults in the earth,' said geophysicist and lead researcher Amy Fox. 'These faults exist ... and we're sort of speeding up a natural earthquake that would have occurred anyway at some point.'

In a statement, the Canadian Association of Petroleum Producers (CAPP) said its members in B.C. are monitoring the drought situation.

"In northeastern B.C., operators rely on recycling water from their own operations to maintain activities and minimize the use of freshwater resources," said CAPP vice-president Richard Wong.

"According to the energy regulator, each year the amount of water withdrawn by industry averages 0.004 per cent of the total volume of annual runoff in northeast B.C."

CBC science specialist Darius Mahdavi says the drought in the northeast has been at or near Level 5 since the fall of 2022.

"The only exception was a couple weeks at the beginning of the 2023 drought season, when snowpack and cool temperatures helped briefly, but there was an incredibly fast return to extreme drought," he said.

"In the last couple years, B.C. has seen a lot of weather that's been described as 'unprecedented', 'record-breaking' and 'historic.' The drought in the northeast is all three, yet it's been largely overlooked."

Water permits remain indefinitely suspended on 10 rivers located in the Peace, Liard and Fraser River watersheds, according to the BCER.

Rolick said the message to the oil and gas sector is to be prepared for further water-use restrictions or suspensions.

"[Industry] should make sure they're updating their water management plans and that they're looking at having appropriate storage solutions so that they can withdraw when it is available and store it for use in the dry season," he said.

Kathleen Ganley first to declare bid for Alberta NDP leadership as contest kicks off


CBC
Mon, February 5, 2024 

Three-term MLA and former Alberta justice minister Kathleen Ganley, middle, announced Monday she would seek the leadership of Alberta's New Democrats. The race to replace Rachel Notley kicked off Monday. (Helen Pike/CBC - image credit)

Former Alberta justice minister and three-term Calgary MLA Kathleen Ganley officially launched a bid to become the next leader of Alberta's New Democrats on Monday, becoming first in the race to replace departing leader Rachel Notley.

Notley announced in mid-January she would step down as party leader as soon as the members choose her replacement. Under the rules of the leadership contest, which kicked off today, candidates who want to run must register before March 15.

Speaking to reporters at the Telus Convention Centre in downtown Calgary on Monday, Ganley said her campaign would zero in on delivering a message tied to the NDP's economic strategy, among other measures.

"What this province needs is less drama. It needs experienced, competent leadership focused on what matters," Ganley said. "That's what this team will deliver."

When asked by a reporter whether she was interested in launching talks on the future of the provincial NDP's relationship with the federal NDP, Ganley said she was open to having that conversation with members.

"I think the concerns of members, especially when you hear them repeatedly, are very valid," she said.

Ganley's leadership bid was widely expected by political observers. In early January, before Notley's resignation, Ganley posted a 55-second leadership-style video on X, formerly known as Twitter, discussing her background growing up in northwest Calgary and her recognition of the various challenges facing Albertans.

First out of the gate with a focus on Calgary

One of the things that has set Ganley apart is a strategy of being first, said Lisa Young, a professor of political science at the University of Calgary.

"I think that Ganley wants to, in a sense, corner the market on being the Calgary candidate. She is distinctive in this race, given the discussion of the potential front-runners, as the candidate who comes from Calgary," Young said.

"She has history in the party, she has ministerial experience, and she is going to probably have quite a bit of support from Calgary MLAs — a real sort of coming together as the Calgary candidate."

Though the party enjoys a strong base of support in Edmonton, expanding support in Calgary will be a key priority for the NDP in the next provincial election, Young noted.

The big question mark moving forward is in regards to speculation as to whether or not former Calgary mayor Naheed Nenshi will join the race, which would change the race's trajectory.

Former Calgary mayor Naheed Nenshi is pictured in a file photo. Nenshi has been rumoured to be considering a bid for the leadership of the Alberta NDP. 

(Christopher Katsarov/The Canadian Press)

"It takes away from Kathleen Ganley's claim that she is the Calgary candidate. It changes the terrain of the contest," Young said.

"If we think back to the UCP leadership contest, there were moments where it seemed like all of the leadership contestants were opposing Danielle Smith as this outsider. I think we might see a dynamic similar to that if Nenshi does jump into the race."

In the previous election, the Alberta NDP picked up seats in Calgary after being nearly wiped off the board in 2019.

Race will run until June

Ganley's fellow former cabinet minister Sarah Hoffman and second-term MLA Rakhi Pancholi are also expected to be contestants in the race to replace Notley, and Edmonton MLAs David Shepherd and Jodi Calahoo Stonehouse are said to be considering bids.

One of the big questions moving forward will be the issue of who can take on Alberta Premier Danielle Smith, Young said.

"We're going to see all of the front-running candidates trying to demonstrate that they are the person who can counter Danielle Smith's very powerful communication abilities," she said.

"So it'll be interesting to see the ways that that plays out in Alberta politics over the next two or three months."

To vote in the race, members must purchase or renew a membership by April 22. The race will have a spending limit of $500,000 per leadership contestant, with an entry fee of $60,000.

The final day for voting in the leadership race will be June 22 at noon.

In the 2023 Alberta election, the United Conservative Party took 52.6 per cent of the vote compared to the NDP's 44 per cent.

Quebec coroner to hold public hearings on death of homeless Innu man in Montreal

CBC
Mon, February 5, 2024 

Raphaël André was found unconscious and pronounced dead in Montreal on Jan. 17, 2021. (Submitted by John Tessier/The Open Door - image credit)

The Quebec coroner's office has announced that public hearings on the death of Raphaël Napa André will be held in May and June.

The 51-year-old Innu man was found in a portable toilet, mere steps away from the Open Door shelter in January 2021, after public health officials had ordered it closed overnight.

André was pronounced dead at the scene, at the corner of Milton Street and Parc Avenue. He was originally from the community of Matimekush-Lac John in northern Quebec.

Montreal police determined the death wasn't criminal and turned the investigation over to the coroner.

According to a news release Monday, the coroner's office says the hearings will be from May 13 to 24 and from June 3 to 14.

Coroner Stéphanie Gamache has been appointed to preside over this inquiry.

"The hearings will allow any interested party to express themselves regarding the circumstances of this death in order to analyze all contributing factors and propose solutions for better protection of human life," said the news release.

Beyond that, the coroner's office is not issuing any more statements on the matter. Those wishing to learn more about the hearings or wishing to participate, can go to the coroner's website, where the information is available in French only.

Soon after André's death, John Tessier, an intervention co-ordinator at the Open Door, said there are "a lot of people in here who are very sad. He was respected and people cared about him."