US conspiracy website Gateway Pundit declares bankruptcy

By AFP
April 24, 2024

The Gateway Pundit is declaring bankruptcy as it faces a string of misinformation lawsuits. - Copyright AFP ROBERTO SCHMIDT

Anuj CHOPRA

US far-right conspiracy website Gateway Pundit is filing for bankruptcy, its founder said Wednesday, as it battles a string of lawsuits alleging it promoted misinformation related to the 2020 election.

Parent company TGP Communications is seeking Chapter 11 bankruptcy protection in Florida, founder Jim Hoft said in a note to readers, blaming “progressive liberal” lawsuits.

The Gateway Pundit, launched as a blog in 2004, rose to prominence as it trumpeted conspiracy theories about a range of subjects, from mass shootings to Donald Trump’s false claim that the 2020 election was stolen from him.

Two poll workers in the southern state of Georgia — which Trump lost to Joe Biden in 2020 — sued the website over false claims they had been involved in ballot fraud.

In December, the same two poll workers won a separate $148 million defamation case against Trump’s former lawyer Rudy Giuliani for spreading similar falsehoods.

The Gateway Pundit also faces a lawsuit in Colorado from a former employee of the election technology firm Dominion Voting Systems, over false vote rigging claims.

Last year, Dominion Voting Systems secured a $787.5 million settlement from Fox News after suing over false claims that its machines altered votes.

Defamation lawsuits are increasingly becoming a tool used by citizens and pro-democracy groups in the United States to hold misinformation spreaders accountable.

Radio host Alex Jones, founder of far-right website InfoWars, filed for bankruptcy in 2022 after he was ordered to pay nearly $1.5 billion in damages for calling a 2012 mass shooting in an elementary school –- which left 20 first graders and six adults dead — a “hoax.”

But striking a defiant note, Hoft vowed to continue publishing even as Gateway Pundit comes under financial pressure from “radical left” campaigns that had driven away advertisers.

“We do not expect that to change,” Hoft wrote in his note to readers.

He added the bankruptcy protection was “not an admission of fault or culpability,” but instead a way to reorganize and consolidate litigation “when attacks are coming from all sides.”

Chapter 11 is a US mechanism allowing a company to restructure its debts under court supervision while continuing to operate.

According to the US misinformation watchdog NewsGuard, Gateway Pundit “regularly distorts information” and spreads unfounded conspiracies.

It has consistently ranked among the 20 most popular right-wing websites, according to the Righting, a newsletter that compiles data from the analytics company Comscore.

The site’s account on X, formerly Twitter, has nearly 740,000 followers.

But traffic to a host of pro-Trump conservative websites has plummeted in recent months in part because social media platforms such as Facebook are deprioritizing media articles.

Unique visitors to the Gateway Pundit plunged about 62 percent in February compared to the same month last year, according to the Righting, apparently compounding its financial woes.

As ‘news deserts’ spread, US journalism fights on

By AFP
April 24, 2024

Matti Gellman, seen here inside the Baltimore Banner's newsroom, is launching her career as American journalism is in what experts have called a "perilous" state

 - Copyright AFP ROBERTO SCHMIDT

Sarah TITTERTON

Baltimore Banner reporter Matti Gellman is first to leap in with questions during a recent press appearance by Maryland’s state governor and celebrity chef Jose Andres at an urban farm.

With her notebook wedged under her arm and a Banner-branded baseball cap on her head, Gellman is launching her career as the long decimation of the news industry in the United States reaches what some have called an “extinction-level event.”

She and her colleagues are at the vanguard of a fightback, seeking new and innovative ways to sustain local journalism in the world’s most powerful democracy.

“We’re a start-up, essentially,” says the 26-year-old.

“I felt really inspired by the fact that the Banner was built by people who were sort of disillusioned by the industry and were looking to create something maybe different.”

It’s an optimism rarely found in America’s bleak media landscape, more often characterized by abrupt mass layoffs, a grinding lack of resources — and, finally, an information vacuum.

A study by Northwestern University last year identified 204 counties out of some 3,000 in the US as “news deserts,” having “no newspapers, local digital sites, public radio newsrooms or ethnic publications.”

But Gellman’s zeal permeates the upstart Banner, an online non-profit which launched in 2022 to challenge the city’s only remaining newspaper, the Baltimore Sun.

“People need to be informed,” managing editor Andrea McDaniels tells AFP, speaking over the buzz of the newsroom, overlooking Baltimore’s harbor.

If not, “they can’t make good decisions in their lives, the schools fall apart, political corruption happens. So we need good journalism.”

– ‘Perilous’ –

For more than two decades, since the internet upended the advertising and print model on which newspapers had been based, the industry has been in crisis.

Even behemoths of American journalism have been affected.

National outlets including The Washington Post and Los Angeles Times have laid off hundreds since 2023 alone, while digital organizations including BuzzFeed News and Vice.com shuttered altogether.

But it is at the local level that news has been most shockingly hollowed out, with newspapers vanishing at a rate of more than two a week, according to Northwestern’s 2023 State of Local News report.

The state of the industry is “perilous,” says professor and former journalist Penny Abernathy, who headed the report.

“We lost more than a third of our newspapers over the last 18 years, almost two thirds of our newspaper journalists” since 2005, she adds.

Nearly half of US counties have just one news source, the report said, often a weekly newspaper. And 228 are on a so-called “watch list” at high risk of losing even that.

The impact, experts say, has been significant.

“We all live our lives locally,” says Ellen Clegg, who co-founded another non-profit local news outlet, BrooklineNews in Massachusetts.

“This is where we vote. It’s where we raise our kids, educate our kids,” she continues.

When local issues are not reported on, “you have a nationalization of news that rushes in to fill the vacuum.”

– Energy, innovation –

That means more Fox News, more CNN, more Trump, more Biden. In areas without strong broadband access, it also means people are reliant on their phones — that is, on social media as their primary source of information.

The effect is local and national polarization, Clegg says.

Take school board meetings: instead of asking why a proposed new high school is over budget, or why math test scores are low, parents are “yelling about critical race theory or… transgender issues.”

Repercussions can also be seen at the ballot box, Abernathy says.

When all news is national, all politics become national, too. “It feeds into this political divide,” she explains.

But non-profits like the Banner are not the only green shoots.

This month New York state passed tax credits for local news organizations — a first in a country where public funding of journalism has historically been viewed with suspicion.

Meanwhile studies have shown that rural readers are still willing to pay for products like events, memberships or newsletters — even in an era of free news.

As for the Banner, the importance of its mission was underscored recently when a container ship crashed into a major Baltimore bridge, collapsing it within seconds.

The Banner newsroom leapt into action, and has been lauded for its coverage of the disaster.

Whether it can keep it up all depends on funding — currently a combination of subscriptions and donations.

CEO Bob Cohn is hopeful.

“It does seem like there’s a degree of energy and innovation in this space that’s acknowledging the depth of the problem,” he says.

AfD, the Alternative for Dictators


BY JAKOB HANKE VELA

APRIL 24, 2024


FAR-RIGHT SPYING SCANDAL


NI HAO KRAH: MEP Maximilian Krah, the AfD’s top candidate for the June European Parliament election, is under massive pressure from his party leadership to end his campaign today. It comes after the bombshell arrest of his aide, who stands accused of spying for China’s totalitarian security apparatus.

ICYMI: German police on Tuesday arrested Krah’s long-time collaborator and parliamentary assistant, Jian Guo.“Jian G. is an employee of a Chinese secret service,” the German public prosecutor alleged in a statement.

Implications: Germany’s far-right AfD — which was expected to make big gains in the EU election — already stood accused of being backed by agents of the Russian and Chinese dictatorships seeking to undermine Western democracies. It will be much harder for the party to dismiss that criticism now.

AfD, the Alternative for Dictators: The AfD’s two top candidates for the EU election, Krah and Petr Bystron, are both at the center of investigations over foreign interference. The FBI has questioned Krah over alleged payments from sources close to the Kremlin. Bystron, the No. 2 on the AfD’s list for the EU election, stands accused of having received €20,000 from people with links to Russian leader Vladimir Putin. While he denies the accusations, Spiegel on Tuesday reported on a recording in which Bystron talks about the cash.

PRESSURE MOUNTING: Last night, Krah was summoned to Berlin. Journalists spotted the MEP having dinner at Brasserie Le Paris on Kurfürstendamm — but AfD leaders Alice Weidel and Tino Chrupalla didn’t want to be seen at a table with him. Instead, as Chrupalla entertained a delegation in the next room, Krah dined with the party leaders’ aides, who, BILD reports, attempted to convince him that his position is untenable.

Crunch meeting this morning: Krah has been called to Chrupalla’s office in the Bundestag at 9 a.m., my Berlin Playbook colleagues report.

Campaign’s over — but Krah to remain AfD’s No. 1: The AfD leadership now has a massive problem. It’s not just that posters with Krah’s face on them are already on the streets. The party can no longer boot Krah or Bystron from running in the EU election, since the electoral list has already been submitted and signed off on. Changes are only allowed for extreme cases — such as death.

Now read this: A far-right takeover is the biggest threat to the future of Europe, according to a POLITICO survey of EU lawmakers. Check out what keeps MEPs up at night here, by Giovanna Coi.

MEANWHILE, IN PARLIAMENT    

MEPS TO CONDEMN AfD OVER RUSSIA, CHINA SCANDALS: In Strasbourg, MEPs are drafting a resolution condemning the AfD and warning that Russia and China have penetrated deep into its ranks.

The opposite of patriots: “The AfD is once again showing its true, unpatriotic face. Anyone who votes AfD in the European elections is voting for more influence from Russia and China,” said MEP Daniel Caspary, from the EPP.

Own up: The Parliament “calls upon the AfD to publicly declare their financial relations especially with the Kremlin without delay and to publicly disclose the purpose and exact amount of all payments originating from Kremlin-linked sources,” reads the draft resolution, seen by my colleague Eddy Wax.

The problem: The resolution is non-legislative and will hardly do anything to help shine light on any illicit financial ties.

Darkness of their own making: Parliament, in large part led by the EPP, has opposed post-Qatargate initiatives for stricter legislation that would have forced MEPs to reveal their finances to an oversight body. The current rules allow MEPs to have extra incomes with no oversight. But why wouldn’t MEPs want more transparency on their side jobs and extra earnings? Read on …

PARLIAMENT QUIETLY REJECTS CALLS TO INVESTIGATE FERBER: The European Parliament has quietly rejected calls to investigate German conservative MEP Markus Ferber following my colleague Bjarke Smith-Meyer’s revelations about his relationship with Dutch businessman Michael Heijmeijer.

MEPs covering for MEPs: Parliament’s group leaders decided not to investigate Ferber — despite huge question marks around his activities and whether he took money from banks to advise them on an EU law he helped write.

So much for transparency: The decision was taken during Parliament’s Conference of Presidents last week — the closed-door meeting of political group chairs and Parliament President Roberta Metsola. The Parliament doesn’t comment on COP discussions and there’s no written record of the decision. However, two people who attended the meeting told POLITICO that the Parliament’s lawyers said an investigation into Ferber wasn’t necessary.

EPP THROWS SHADE AT GREENS OVER HARASSMENT: Meanwhile, the center-right group has put up an amendment to a report on harassment in the workplace — calling out the Greens for “double standards.” The amendment makes reference to the alleged harassment case of “former Green MEP, Malte Gallée” arguing “his group failed to report this case to the relevant internal EP committees and structures.”


Chinese spying claims deepen German far right’s woes


By AFP
April 24, 2024

AfD leaders Alice Weidel and Tino Chrupalla face damaging allegations about an EU parliamentarian's aide accused of spying for China - Copyright AFP Odd ANDERSEN
Femke COLBORNE

Germany’s far-right AfD fought Wednesday to draw a line under Chinese spying allegations, the latest in a slew of scandals to hit the anti-immigration party in a key election year.

An aide to Maximilian Krah, a member of the European Parliament for the AfD and the party’s top candidate for June’s EU elections, was arrested on Monday on suspicion of spying for China.

The AfD’s leaders Alice Weidel and Tino Chrupalla summoned Krah to an emergency meeting in Berlin on Wednesday morning.

The controversial politician will not attend a key event this weekend to officially launch the party’s EU vote race “so as not to damage the election campaign and the standing of the party”, they said after the talks.

But Krah himself said he would “remain the leading candidate” in the vote.

German media reported that the party will remove Krah from campaign posters and videos, while keeping him on its list of candidates.

An AfD spokesman declined to comment on the reports when contacted by AFP.

Chancellor Olaf Scholz called the allegations “very worrying”, without commenting on the case in detail.

After riding high in opinion polls at the end of last year, the AfD has since seen its support hammered by a series of scandals.

– ‘Descending into chaos’ –

The spying claims come on top of other recent allegations that Krah has links to Russia, piling pressure on the party seven weeks before the EU elections and ahead of key regional polls in Germany in September.

Towards the end of 2023, the AfD was polling at around 22 percent — ahead of Scholz’s Social Democrats (SPD) and second only to the main opposition conservatives.

But one survey this week put it on 16 percent.

In January, an investigation by media group Correctiv indicated members of the AfD had discussed the idea of mass deportations at a meeting with extremists, leading to a wave of protests across the country.

More recently, Krah and another AfD candidate for the EU elections, Petr Bystron, have been forced to deny allegations they accepted money to spread pro-Russian positions on a Moscow-financed news website.

And Bjoern Hoecke, one of the AfD’s most controversial politicians and the head of the party in Thuringia state, is currently on trial in Germany for publicly using a banned Nazi slogan.

Dirk Wiese, a senior politician for the SPD, told the Rheinische Post newspaper the AfD was “descending into chaos”.

“First the allegations of sleazy money payments from the Kremlin, now suspected espionage for China… What’s next, North Korea?” he said.

The AfD’s parliamentary group chief Bernd Baumann slammed the China spying claims as “politically motivated” and put them down to “dirty” electioneering.

“We have become pretty hardened when it comes to accusations, especially in pre-election and election campaign times,” he said, blaming “suspicious reporting” for many of the claims.

– End of an era? –

Asked about the alleged links to Russia, AfD co-leader Chrupalla said that “as long as no evidence and proof is put on the table, we cannot react”.

Chrupalla also remained reticent on the China issue, stressing that no charges had been brought and the party leadership would “wait and see” how the case develops before coming to any conclusions.

But despite the attempts at damage limitation, experts say the scandals could have a profound effect on the AfD’s chances in this year’s elections.

“The party is not managing to go on the offensive at the moment,” said Wolfgang Schroeder, a political analyst from the University of Kassel.

“The AfD is allowing itself to be cornered rather than setting the issues itself,” he said.

The AfD is currently still polling neck-and-neck with the SPD at the national level and in first place in Brandenburg, Saxony and Thuringia, all holding regional polls in September.

But Hajo Funke, a political analyst who specialises in the far right, said support for the party has “fallen considerably in some cases” because of the scandals.

“Overall, I believe that the great era of ‘we are doing better and better’ has come to an end,” he told AFP.


Germany: AfD's Krah faces probe on Russia, China 'payments'

Prosecutors are looking at whether German far-right MEP Maximilian Krah received payments from Russian and Chinese sources. This comes just a day after Krah's aide was arrested on suspicion of spying for China.

German public prosecutors have launched two preliminary investigations into the far-right Alternative for Germany (AfD)'s top European parliamentary candidate after media reports suggested that he had received payments from foreign powers.

A spokesperson for the state prosecutor in the eastern German city of Dresden confirmed to the AFP news agency on Wednesday that initial probes have been opened against lawmaker Maximilian Krah over "alleged payments" from Russian and Chinese sources.
What payments is Krah alleged to have received?

The purpose of the preliminary proceedings, according to the spokesperson, is to establish "whether or not an initial suspicion of illegal parliamentary bribery" exists.

Krah himself told the regional public broadcaster MDR, which first reported the probe, that he was unaware of the steps being taken and denied any wrongdoing.

The public prosecutor said the probe has been launched "as a result of current public reporting," referring to reports by Spiegel magazine and public broadcaster ZDF last week that Krah had been questioned by the FBI in December 2023 over possible payments from sources close to the Kremlin.

During the interrogation, the US investigators had reportedly confronted Krah with chat messages in which the sanctioned pro-Russian former Ukrainian politician and activist Oleg Voloshyn assured him that the problem with "compensation" for Krah's "technical expenses" had been solved and that, from May, "it would be as it was before February."

The words used suggested that such payment arrangements had been long established, suggestions thqat Krah rejected.

According to the public prosecutor, the second initial probe is investigating "alleged Chinese payments for his role as parliamentarian."

Should the prosecutors in Dresden establish a suspicion of wrongdoing, the preliminary investigations could give way to a formal one. For that to happen, however, Krah's parliamentary immunity would have to be lifted.

Maximilian Krah's pro-Russia connections

Krah's name has cropped up regularly in recent weeks in connection with the pro-Russia online portal Voice of Europe, which was sanctioned by the Czech government at the end of March after Prague said it was a Kremlin-led propaganda tool.

The main figure behind the portal is said to be Viktor Medvedchuk, another pro-Russia former Ukrainian lawmaker and personal friend of Russian President Vladimir Putin's, as well as Voloshyn.

Medvedchuk, who attempted to flee Ukraine in the days following Russia's full-scale invasion of the country in February 2022, was arrested by the Ukrainian security service in April and exchanged along with 55 other Russian prisoners of war for 215 Ukrainian soldiers captured following the fall of Mariupol.

Krah has had contact with Medvedchuk and Voloshyn for years, according to the reports.

The fresh investigations in Dresden come just one day after one of Krah's aides was charged by the German government with committing espionage for Chinese intelligence agencies.

Krah said he would immediately sack the aide and insisted that he would still lead the AfD ticket in June's European elections.

The prosecutors in Dresden stated that their probe "is not connected" to the Chinese spying case.

TikTok may be banned in the US. Here’s what happened when India did it

The Senate passed legislation Tuesday that would force TikTok’s China-based parent company to sell the social media platform under the threat of a ban.

BY KRUTIKA PATHI

 April 24, 2024


NEW DELHI (AP) — The hugely popular Chinese app TikTok may be forced out of the U.S., where a measure to outlaw the video-sharing app has won congressional approval and is on its way to President Biden for his signature.

In India, the app was banned nearly four years ago. Here’s what happened:

WHY DID INDIA BAN TIKTOK?

In June 2020, TikTok users in India bid goodbye to the app, which is operated by Chinese internet firm ByteDance. New Delhi had suddenly banned the popular app, alongside dozens other Chinese apps, following a military clash along the India-China border. Twenty Indian and four Chinese soldiers were killed, and ties between the two Asian giants plunged to a new low.

The government cited privacy concerns and said that Chinese apps pose a threat to India’s sovereignty and security.

The move mostly drew widespread support in India, where protesters had been calling for a boycott of Chinese goods since the deadly confrontation in the remote Karakoram mountain border region.


MORE ON TIKTOK


What a TikTok ban in the US could mean for you


Senate passes bill forcing TikTok’s parent company to sell or face ban, sends to Biden for signature


The EU ratchets up pressure on TikTok’s new rewards app over risks to kids, warns of suspension

“There was a clamour leading up to this, and the popular narrative was how can we allow Chinese companies to do business in India when we’re in the middle of a military standoff,” said Nikhil Pahwa, a digital policy expert and founder of tech website MediaNama.

Just months before the ban, India had also restricted investment from Chinese companies, Pahwa added. “TikTok wasn’t a one-off case. Today, India has banned over 500 Chinese apps to date.”

HOW DID USERS AND CREATORS REACT?

At the time, India had about 200 million TikTok users. And the company also employed thousands of Indians.

TikTok users and content creators, however, needed a place to go — and the ban provided a multi-billion dollar opportunity to snatch up a big market. Within months, Google rolled out YouTube Shorts and Instagram pushed out its Reels feature. Both mimicked the short-form video creation that TikTok had excelled at.

“And they ended up capturing most of the market that TikTok had vacated,” said Pahwa.

In India, TikTok content was hyperlocal, which made it quite unique. It opened a window into the lives of small-town India, with videos coming from tier 2 and 3 cities that showed people doing tricks while laying down bricks, for example.

But for the most part, content creators and users in the four years since the ban have moved on to other platforms.

Winnie Sangma misses posting videos on TikTok and earning a bit of money. But after the ban, he migrated to Instagram and now has 15,000 followers. The process, for the most part, has been relatively painless.

“I have built up followers on Instagram too, and I am making money from it, but the experience isn’t like how it used to be on TikTok,” he said.

Rajib Dutta, a frequent scroller on TikTok, also switched to Instagram after the ban. “It wasn’t really a big deal,” he said.

HOW IS INDIA’S BAN DIFFERENT FROM THE U.S.

The legislation to outlaw the app has won congressional approval and now awaits a signature from Biden.

The measure gives ByteDance, the app’s parent company, nine months to sell it, and three more if a sale is underway. If this doesn’t happen, TikTok will be banned. It would take at least a year before a ban goes into effect, but with likely court challenges, it could stretch longer.

In India, the ban in 2020 was swift. TikTok and other companies were given time to respond to questions on privacy and security, and by January 2021, it became a permanent ban.

But the situation in the U.S. is different, said Pahwa. “In India, TikTok decided not to go to court, but the U.S. is a bigger revenue market for them. Also, the First Amendment in America is fairly strong, so it’s not going to be as easy for the U.S. to do this as it was for India,” he said, in reference to free speech rights in the U.S. Constitution.

As Chinese apps proliferate across the world, Pahwa says countries need to assess their dependency on China and develop a way to reduce it as the apps can pose a national security risk.

The app is also banned in Pakistan, Nepal and Afghanistan and restricted in many countries in Europe.

“Chinese intelligence law and its cybersecurity law can allow Chinese apps to work in the interest of their own security. That creates a situation of distrust and it becomes a national security risk for others,” said Pahwa.

TikTok to fight US ban law in courts

By AFP
April 24, 2024

US and other Western officials have voiced alarm over the popularity of TikTok with young people, alleging it allows Beijing to collect data and spy on users - Copyright AFP Antonin UTZ

TikTok’s CEO vowed Wednesday to fight in the courts to overturn a newly signed US law that could see the popular app banned due to allegations it is controlled by the China government.

The legislation gives TikTok nine months to divest from its Chinese parent company ByteDance or be shut out of the American market.

US and other Western officials have alleged the social media platform allows Beijing to collect data and spy on users. It has 170 million users in the United States alone, many of them young.

Critics say TikTok is also a conduit to spread propaganda. China and the company strongly deny the claims.

“Make no mistake, this is a ban. A ban on TikTok and a ban on you and your voice,” TikTok boss Shou Zi Chew said in a video posted on TikTok moments after President Joe Biden signed the bill into law.

“Politicians may say otherwise, but don’t get confused. Many who sponsored the bill admit a Tiktok ban is the ultimate goal.”

Chew called the move “ironic” given that the “freedom of expression on TikTok reflects the same American values that make the United States a beacon of freedom.”

“Rest assured, we aren’t going anywhere,” Chew told the platform’s users.

“We will keep fighting for your rights in the courts. The facts and the Constitution are on our side.”

The ban measure was included in a $95 billion foreign aid package, including military assistance to Ukraine, Israel and Taiwan.

The bill, which could trigger the rare step of barring a company from operating in the US market, passed the Senate by a 79-18 vote three days after it cleared the House of Representatives with strong bipartisan support.

Under the bill, ByteDance would have to sell the app or be excluded from Apple and Google’s app stores in the United States.

TikTok for years has been in the crosshairs of American authorities, who say the platform allows Beijing to snoop on users in the United States.

The bill passed by Congress also gives the US president the authority to designate other applications as a threat to national security if they are controlled by a country deemed hostile.

Elon Musk, the billionaire owner of X, formerly Twitter, came out last week against banning TikTok, saying “doing so would be contrary to freedom of speech and expression.”


TikTok suspends rewards programme after EU probe


By AFP
April 24, 2024

TikTok Lite arrived in France and Spain in March allowing users aged 18 and over to earn points that can be exchanged for goods - Copyright AFP Jade GAO

Raziye AKKOC

TikTok on Wednesday announced the suspension of a feature in its spinoff TikTok Lite app in France and Spain that rewards users for watching and liking videos, after the European Union launched a probe.

The popular video-sharing social media platform, owned by Chinese company ByteDance, said the suspension would remain “while we address the concerns that they have raised”.

The European Commission’s top tech enforcer, Thierry Breton, said the EU investigation would continue, stating: “Our children are not guinea pigs for social media.”

TikTok Lite arrived in France and Spain — the only EU countries where it is available — in March. Users aged 18 and over can earn points to exchange for goods like vouchers or gift cards through the app’s rewards programme.

TikTok Lite is a smaller version of the popular TikTok app, taking up less memory in a smartphone and made to perform over slower internet connections.

The European Commission on Monday announced an investigation into TikTok Lite, and threatened to have the rewards programme suspended, raising concerns about the risk to users’ mental health.

The commission demanded TikTok provide more information by a Wednesday deadline, along with any defence against the threatened suspension.

Breton said in a statement that “our cases against TikTok on the risk of addictiveness of the platform continue”.

“We suspect that this (rewards) feature could generate addiction and that TikTok did not do a diligent risk assessment and take effective mitigation measures prior to its launch,” he said.

The probe is the EU’s second against TikTok under a sweeping new law, the Digital Services Act (DSA), that requires digital firms operating in the 27 nations to effectively police online content.

In February, the commission opened a formal probe into TikTok over alleged violations of its obligations to protect minors online.

– TikTok squeezed –

TikTok is also under pressure across the Atlantic.

A bill to ban TikTok cleared the US Congress after the Senate on Tuesday approved legislation requiring TikTok to be divested from ByteDance.

TikTok’s CEO, Shou Zi Chew, said the company would fight the law — which he said amounted to a ban — in US courts.

The European Commission has refused to comment on the United States’ move. Instead it has focused on the EU’s legal arsenal to bring big tech into line with its rules.

The move against the TikTok Lite rewards scheme was the latest instance of the EU flexing that legal muscle against online platforms.

It is also investigating tech billionaire Elon Musk’s X, the former Twitter, over alleged illegal content.

TikTok Lite users can win rewards if they log in daily for 10 days, if they spend time watching videos (with an upper limit of 60 to 85 minutes per day), and if they undertake certain actions, such as liking videos and following content creators.

TikTok is among 22 “very large” digital platforms, including Amazon, Facebook, Instagram and YouTube, that must comply with stricter rules under the DSA since August last year.

The law gives the EU the power to hit companies with heavy fines as high as six percent of a digital firm’s global annual revenues. Repeat offenders can see their platforms blocked in the EU.

Chinese sellers go to TikTok school to reach buyers abroad


By AFP
April 24, 2024

Chinese students at an e-commerce school rehearse selling hijabs and abayas into a smartphone - Copyright AFP Jade GAO

Jing Xuan TENG

Donning hijabs and floor-length abaya gowns over shorts and tank tops, Chinese students at an e-commerce school perform into a smartphone camera as they learn how to sell the clothes to overseas TikTok users.

It is the final day of a two-week course on selling products abroad via the short video app — which despite being blocked in China is a platform more and more Chinese vendors are turning to.

Succeeding on TikTok requires tools for bypassing internet restrictions as well as foreign-language skills, challenges that have prompted a boom in courses and consulting services.

At the school in Guangzhou in southern Guangdong province, an instructor holds up the Middle Eastern-inspired garments to the camera and rattles off prices and sizing information for Muslim buyers in the UK.

“This is chiffon, it’s really breathable!” she gushes in English as her proteges model the goods and sort through racks of satin robes under stark studio lights.

“We teach people which products are selling better, and which markets are more suitable for their current stages,” 27-year-old Wang Yaxuan, another instructor at the school, tells AFP.

Guangdong is home to thousands of factories making a mindboggling variety of products, from the abayas to espresso machine parts to wigs made of human hair.

After decades of producing goods for export, Chinese companies are increasingly seeking to cut out the middleman and market themselves at lower prices, directly to overseas consumers.

Shein, the China-founded fast fashion giant, has effectively taken over the lower-end Western market using this strategy, with TikTok a key facet of its selling network.

TikTok Shop launched in the United States late last year, and e-commerce features have previously been rolled out in places like Britain and Southeast Asia.

A casual scroll on the hugely popular app’s “Live” tab can land users on multiple shopping livestreams within minutes.

But with TikTok unavailable in China — parent company Bytedance operates the more strictly censored sister app Douyin domestically — smaller businesses there are at a disadvantage.

Courses like the one at Mede Education Technology’s e-commerce school help by covering everything from the basics of creating a TikTok account to handling shipping and analysing sales data.

Fees start at around 9,000 yuan ($1,244) for a six-day course.

Students, who range from factory owners to fresh graduates, often take classes for multiple foreign shopping platforms including Amazon and Southeast Asia’s Shopee.



– Information gap –



Qiu Zhouwen, a course participant in his 30s, works for a Guangzhou cosmetics company.

He says his company enrolled him because they are hoping to eventually sell their skincare range through TikTok.

“Information is part of the cost (of doing business) now, and if you don’t have the information that’s appropriate to the market, your cost will be way too high,” Qiu says.

Wang, the Mede instructor, attended university in the United States and says it can be challenging for Chinese sellers to adapt to different consumer tastes abroad.

Chemical manufacturer Donghua Jinlong spawned viral memes on TikTok this month after overseas social media users found absurdist humour in the company’s matter-of-fact videos about industrial-grade glycine featuring AI-generated voiceovers.

There are also significant technical hurdles.

Accessing TikTok from China requires VPN software to bypass the country’s virtual “Great Firewall”, while dodging the app’s own curbs on users manipulating their IP addresses.

VPNs are a legal grey area in China, with authorities occasionally cracking down while generally tolerating their use for business purposes.

TikTok is also caught up in global geopolitical tensions — the US Congress is threatening to ban the app entirely over concerns it could share personal data with the Chinese government.

Wang is unfazed by the prospect of a US TikTok ban.

“Our students are not just selling to the US market… the current trend for TikTok for Southeast Asia is also very good,” she tells AFP.

Wang says it’s not the first time this situation has happened, adding that she feels the United States was trying to “take this huge cake and split up the market”.



– Catchphrases and clicks –



Mede is one of many organisations running TikTok classes, including others based in Guangdong, where authorities have hung up propaganda banners promoting international e-commerce.

Those not willing to shell out steep course fees can also seek advice from e-commerce veterans who have built a following on Chinese social apps by sharing TikTok tips.

Molly Zhao, a 23-year-old TikTok livestreamer, has been selling products including clothing and electronics online since 2022.

Zhao, who studied in Italy and speaks Italian and English, told AFP her foreign-language skills have earned her livestreaming jobs paying as much as 20,000 yuan ($2,760) each month.

She regularly posts videos for domestic viewers on Douyin, covering topics including common English phrases and how to explain shipping rates clearly.

“You must build up the atmosphere,” she explains in one video, adding that using a catchphrase can “make a deeper impression on customers”.

In another video, a smiling, dancing Zhao shares her warmup routine before a livestream session selling gemstones and crystals to US viewers.

“Time to earn Americans’ money,” she says in a deadpan caption. “I’ll put on some music to hype myself up.”

The state of work: Employees need feedback in order to be productive


ByDr. Tim Sandle
April 23, 2024

A business professional going to work. Image © Tim Sandle

There is often widespread disconnect between management and employees and seeking to contain it as best as possible should perhaps be near the top of the list for companies. A survey from the firm Betterworks looked at employees at every level to find where these gaps exist and how business leaders can close them.

The company has issued a State of Performance Enablement Report. This research exposes a common disconnect between organizational leaders, employees, and their managers. The results have been passed to Digital Journal for review.

The survey findings were gleaned from over 2,000 employees and organizational leaders in the U.S. and U.K.

The disconnect that is central to the survey findings, can be broken down into different segments:

The perception gap

While 90 percent of leaders (including Human Resources) consider their performance management processes successful, only 55 percent of employees share this sentiment. This indicates there is a perception difference between different levels of the organisational strata.

This disparity can detrimentally impact employee empowerment, productivity levels, and perceived support for skills development.

1:1’s are critical

Another finding is that 20 percent of employees lack access to one-on-one conversations with their managers, while 40 percent say they do not receive peer feedback.

Seven out of 10 employees report feeling highly productive when performance management is deemed successful, in contrast to five out of 10 when it is perceived as a failure.

Employees who receive feedback consistently are at least three times more likely to feel supported in their work, skills, and career development.

Middle managers need support

Managers, as well as other employees, also need help. The survey finds that two-thirds of managers express a need for greater clarity regarding their roles, increased support in delivering performance management, and assistance in guiding employees’ skills and career development.

Both employees and managers appear to lack adequate guidance to perform at their best, report feeling less enabled than leadership, and often do not have access to the right tools.

The skills squeeze

While the vast majority of employees (86 percent) expressed the desire for career and skills development, along with coaching to support both, just over half (54 percent) see these processes as successful.

Survey reveals huge gaps in knowledge about what we eat


ByDr. Tim Sandle
April 23, 2024

UK consumer prices rose by an annual rate of 7.9 percent, down from 8.7 percent in May as food price inflation eased - Copyright AFP ATTA KENARE

A new assessment reveals scientific knowledge gaps in relation to food and nutrition. The findings appear in the science journal Nature Food, based on data from the Periodic Table of Food Initiative. The initiative identifies a list of 1,650 foods for biomolecular analysis to advance nutrition and planetary health.

Of the foods listed: 30 percent are fruits; 25 percent are vegetables, 8 percent are nuts and seeds, 8 percent are land animal products and 7 percent are aquatic animal products.

The Periodic Table of Food Initiative (PTFI) Initiative is supported by The Rockefeller Foundation and its public charity, RF Catalytic Capital, Inc. and the Foundation for Food & Agriculture Research and facilitated by the American Heart Association and the Alliance of Bioversity and CIAT (International Center for Tropical Agriculture).

Of the ‘missing’ foods for biochemical analysis more than 1,000 are not included in any globally recognized food composition databases. Such databases are typically used to issue dietary guidelines and to guide agricultural policies.

This means the information presented on dietary labels is often limited or inaccurate.

According to Selena Ahmed, Global Director of PTFI at the American Heart Association: “We may think we know what we’re eating, but most of the time, we have limited understanding.”

The list was compiled through a global participatory process involving 40 experts from regions around the world. It represents a cornucopia of foods chosen for their contribution to the human diet, cultural relevance, diversity and innovation potential as the climate changes.

Furthermore, the nutritional assessment of food is too often simplified to calories and essential nutrients.

To redress the gap, analysis is underway on hundreds of the listed foods, using sophisticated new technologies (like high resolution mass spectrometry and artificial intelligence) to discover the so-called “dark matter” of food.

Some 476 foods are considered global in nature (broadly cultivated and consumed), while the others are regionally important, originating from either the Americas, Asia, Africa, the Pacific or Europe

As an example, one of these foods — wattle seeds — come from Acacia trees native to Australia and have been used by Aboriginal communities for thousands of years. The list also includes 98 African crops, 56 of which are undocumented in food databases.

The research paper, in Nature Food, is titled “Periodic Table of Food Initiative for generating biomolecular knowledge of edible biodiversity.”

Your morning coffee may be more than a half million years old

THAT'S WHY IT'S BITTER


Arabica coffee beans harvested the previous year are stored at a coffee plantation in Ciudad Vieja, Guatemala. In a study published in the journal Nature Genetics on Monday, April 15, 2024, researchers estimate that Coffea arabica came to be from natural crossbreeding of two other coffee species over 600,000 years ago. 

(AP Photo/Moises Castillo, File)

 Mohammed Fita picks coffee beans on his farm Choche, near Jimma, 375 kilometers (234 miles) southwest of Addis Ababa, Ethiopia, on Saturday, Sept. 21 2002. Wild coffee plants originated in Ethiopia but are thought to have been primarily roasted and brewed in Yemen starting in the 1400s. (AP Photo/Sayyid Azim, File)


BY ADITHI RAMAKRISHNAN

April 15, 2024

That coffee you slurped this morning? It’s 600,000 years old.

Using genes from coffee plants around the world, researchers built a family tree for the world’s most popular type of coffee, known to scientists as Coffea arabica and to coffee lovers simply as “arabica.”

The researchers, hoping to learn more about the plants to better protect them from pests and climate change, found that the species emerged around 600,000 years ago through natural crossbreeding of two other coffee species.

“In other words, prior to any intervention from man,” said Victor Albert, a biologist at the University at Buffalo who co-led the study..

These wild coffee plants originated in Ethiopia but are thought to have been first roasted and brewed primarily in Yemen starting in the 1400s. In the 1600s, Indian monk Baba Budan is fabled to have smuggled seven raw coffee beans back to his homeland from Yemen, laying the foundation for coffee’s global takeover.

Arabica coffee, prized for its smooth and relatively sweet flavor, now makes up 60% - 70% of the global coffee market and is brewed by brands such as Starbucks, Tim Horton’s and Dunkin’. The rest is robusta, a stronger and more bitter coffee made from one of arabica’s parents, Coffea canephora.

To piece together arabica coffee’s past, researchers studied genomes of C. canephora, another parent called Coffea eugenioides, and more than 30 different arabica plants, including a sample from the 1700s — courtesy of the Natural History Museum in London — that Swedish naturalist Carl Linnaeus used to name the plant.

The study was published Monday in the journal Nature Genetics. Researchers from Nestlé, which owns several coffee brands, contributed to the study.

The arabica plant’s population fluctuated over thousands of years before humans began cultivating it, flourishing during warm, wet periods and suffering through dry ones. These lean times created so-called population bottlenecks, when only a small number of genetically similar plants survived.

Today, that renders arabica coffee plants more vulnerable to diseases like coffee leaf rust, which cause billions of dollars in losses every year. The researchers explored the makeup of one arabica variety that is resistant to coffee leaf rust, highlighting sections of its genetic code that could help protect the plant.

The study clarifies how arabica came to be and spotlights clues that could help safeguard the crop, said Fabian Echeverria, an adviser for the Center for Coffee Research and Education at Texas A&M University who was not involved with the research.

Exploring arabica’s past and present could yield insight into keeping coffee plants healthy – and coffee cups full – for future early mornings.
___

The Associated Press Health and Science Department receives support from the Howard Hughes Medical Institute’s Science and Educational Media Group. The AP is solely responsible for all content.

US advances review of Nevada lithium mine amid concerns over endangered wildflower

NOT JUST THE FLOWER BUT ITS ECOLOGY


This photo provided by the Center for Biological Diversity shows a Tiehm’s buckwheat plant near the site of a proposed lithium mine in Nevada, May 22, 2020. The Biden administration has taken a significant step in its expedited environmental review of what’s next in line to become only the third U.S. lithium mine, as conservationists fear it will lead to the extinction of the endangered Nevada wildflower near the California line. 

(Patrick Donnelly/Center for Biological Diversity via AP, File

BY SCOTT SONNER
April 22, 2024


RENO, Nev. (AP) — The Biden administration has taken a significant step in its expedited environmental review of what could become the third lithium mine in the U.S., amid anticipated legal challenges from conservationists over the threat they say it poses to an endangered Nevada wildflower.

The Bureau of Land Management released more than 2,000 pages of documents in a draft environmental impact statement last week for the Rhyolite Ridge mine. Lithium is a metal key to the manufacture of batteries for electric vehicles — a centerpiece of President Joe Biden’s “green energy” agenda.

Officials for the bureau and its parent Interior Department trumpeted the news, saying the progress in the review of the lithium-boron mine project “represents another step by the Biden-Harris administration to support the responsible, domestic development of critical minerals to power the clean energy economy.”

“Federal agencies cooperating to solve issues efficiently while protecting vulnerable species and other irreplaceable resources is exactly how we will need to move forward if we’re going to produce these critical minerals in the United States,” said Steve Feldgus, deputy assistant Interior secretary for land and minerals management.

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Environmentalists vowing to fight the mine say it’s the latest example of the administration running roughshod over U.S. protections for native wildlife and rare species in the name of slowing climate change by reducing reliance on fossil fuels and cutting greenhouse gas emissions.

In this photo provided by the Center for Biological Diversity, Mining impacts to Tiehm’s buckwheat habitat in the high desert in the Silver Peak Range of western Nevada about halfway between Reno and Las Vegas, June 1, 2019. (Patrick Donnelly/Center for Biological Diversity via AP, File)

Patrick Donnelly, Great Basin director at the Center for Biological Diversity, described it as “greenwashing extinction.” The nonprofit conservation group first petitioned in 2019 for federal protection of the rare flower, Tiehm’s buckwheat, which grows near the California line.

“We believe the current protection plan would violate the Endangered Species Act, so if BLM approves it as proposed, we almost certainly would challenge it,” he told The Associated Press last week.

Nevada is home to the only existing lithium mine in the U.S. and another is currently under construction near the Oregon line 220 miles (354 kilometers) north of Reno. By 2030, worldwide demand for lithium is projected to have grown six times compared to 2020.

In this photo provided by the Center for Biological Diversity, Tiehm’s buckwheat grows in the high desert in the Silver Peak Range of western Nevada about halfway between Reno and Las Vegas, June 1, 2019, where a lithium mine is planned. (Patrick Donnelly/Center for Biological Diversity via AP, File)

The bureau said it published the draft review and opened public comment through June 3 for the new mine after Ioneer Ltd., the Australian mining company that’s been planning for years to dig for lithium at this site, adjusted its latest blueprint to reduce destruction of critical habitat for the plant, which exists nowhere else in the world.

Bernard Rowe, Ioneer’s managing director, said lithium production could begin as early as 2027. He said the company has spent six years adjusting their plans so the mine can co-exist with the plant, invested $2.5 million in conservation efforts and committed an additional $1 million annually to ensure the plant and its surrounding habitat are protected.

“Rhyolite Ridge will help accelerate the electric vehicle transition and secure a cleaner future for our children and grandchildren,” Ioneer Executive Chairman James Calaway said.

In addition to scaling back encroachment on the 6-inch-tall (15-centimeter-tall) wildflower with yellow and cream-colored blooms, the strategy includes a controversial propagation plan to grow and transplant flowers nearby — something conservationists say won’t work.

The plant grows in eight sub-populations that combined cover approximately 10 acres (4 hectares) — an area equal to the size of about eight football fields. They’re located halfway between Reno and Las Vegas in a high-desert oasis of sorts for the plants and the insects that pollinate them.

The Fish and Wildlife Service added the flower to the list of U.S. endangered species on Dec. 14, 2022, citing mining as the biggest threat to its survival.

Less than a week later, the government published a formal notice of intent to begin work on the draft environmental impact statement. Three weeks after that, the Energy Department announced a $700 million conditional loan to Ioneer for the mining project it said could produce enough lithium to support production of about 370,000 electric vehicles annually for four decades.

In this photo provided by the Center for Biological Diversity, Tiehm’s buckwheat grows in the high desert in the Silver Peak Range of western Nevada about halfway between Reno and Las Vegas, June 1, 2019, where a lithium mine is planned. (Patrick Donnelly/Center for Biological Diversity via AP, File)

The Center for Biological Diversity said a series of internal documents it obtained from the Bureau of Land Management through a request under the Freedom of Information Act show the administration has rushed its review of the mine.

Scott Distell, BLM’s project manager in charge of the review, raised concerns about the expedited schedule in an email to his district boss when it suddenly was accelerated in December 2023.

“This is a very aggressive schedule that deviates from other project schedules on similar projects completed recently,” Distell wrote in the Dec. 22 email.

The draft environmental impact statement lays out three different options for the project, including a “no-action alternative” that would mean no mine would be built. The one the bureau said it prefers anticipates Ioneer’s protection plan would allow for direct destruction of about 22% of the plant’s habitat in the 910 acres (368 hectares) the Fish and Wildlife Service designated as critical habitat when it listed it as endangered. That’s down from an estimated 38% in an earlier version of the plan.

“For an extremely rare species confined to such a small area, no amount of destruction of its critical habitat is acceptable,” said Naomi Fraga, director of conservation at the California Botanic Garden.

Donnelly points to the Endangered Species Act’s requirement that federal agencies consult with the Fish and Wildlife Service whenever a project could affect a threatened or endangered species to ensure it won’t “result in the destruction or adverse modification of designated critical habitat.”

“Reducing the destruction of this rare plant’s habitat from 38% to 22% is like cutting off one leg instead of both,” Donnelly said. “They’re still dealing a fatal blow to this precious, rare wildflower.”

Boeing’s financial woes continue, while families of crash victims urge US to prosecute the company


BY DAVID KOENIG
 April 24, 2024

Boeing said Wednesday that it lost $355 million on falling revenue in the first quarter, another sign of the crisis gripping the aircraft manufacturer as it faces increasing scrutiny over the safety of its planes and accusations of shoddy work from a growing number of whistleblowers.

CEO David Calhoun said the company is in “a tough moment,” and its focus is on fixing its manufacturing issues, not the financial results.

Company executives have been forced to talk more about safety and less about finances since a door plug blew out of a Boeing 737 Max during an Alaska Airlines flight in January, leaving a gaping hole in the plane.

The accident halted progress that Boeing seemed to be making while recovering from two deadly crashes of Max jets in 2018 and 2019. Those crashes in Indonesia and Ethiopia, which killed 346 people, are now back in the spotlight, too.

About a dozen relatives of passengers who died in the second crash met with government officials for several hours Wednesday in Washington. They asked the officials to revive a criminal fraud charge against the company by determining that Boeing violated terms of a 2021 settlement, but left disappointed.


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Boeing officials made no mention of the meeting, but talked repeatedly while discussing the quarterly earnings of a renewed focus on safety.

“Although we report first-quarter financial results today, our focus remains on the sweeping actions we are taking following the Alaska Airlines Flight 1282 accident,” Calhoun told employees in a memo Wednesday.

Calhoun ticked off a series of actions the company is taking and reported “significant progress” in improving manufacturing quality, much of it by slowing down production, which means fewer planes for its airline customers. Calhoun told CNBC that closer inspections were resulting in 80% fewer flaws in the fuselages coming from key supplier Spirit AeroSystems.

“Near term, yes, we are in a tough moment,” he wrote to employees. “Lower deliveries can be difficult for our customers and for our financials. But safety and quality must and will come above all else.”

Calhoun, who will step down at the end of the year, said again he is fully confident the company will recover.

Calhoun became CEO in early 2020 as Boeing struggled to recover from the Max crashes, which led regulators to ground the planes worldwide for nearly two years. The company thought it had sidestepped any risk of criminal prosecution when the Justice Department agreed not to try the company for fraud if it complied with U.S. anti-fraud laws for three years — a period that ended in January.

Boeing has been reaching confidential settlements with the families of passengers who died, but the relatives of those killed in the Ethiopia crash are continuing to press the Justice Department to prosecute the company in federal district court in Texas, where the settlement was filed. On Wednesday, department officials told relatives that the agency is still considering the matter.

Leaving the meeting, Paul Cassell, a lawyer for the families, called it “all for show.” He said the Justice Department appears determined to defend the agreement it brokered in secret with Boeing.

“We simply want that case to move forward and let the jury decide if Boeing is a criminal or not,” he said.

It was an emotional meeting, according to Nadia Milleron, whose daughter Samya Stumo died in the 2019 crash.

“People are angry. People are shouting. People are starting to talk over other people,” said Milleron, who watched online from her home in Massachusetts while her husband attended in person. Relatives believe the Justice Department is “overlooking a mountain of evidence against Boeing. It’s mystifying,” she said.

According to Milleron, the head of the fraud section of the Justice Department’s criminal division, Glenn Leon, said his agency could extend its review beyond this summer, seek a trial against Boeing on the charge of defrauding regulators who approved the Max, or ask a judge to dismiss the charge. She said Leon made no commitments.

The Justice Department declined to comment.

A federal judge and an appeals court ruled last year that they had no power to overturn the Boeing settlement. Families of the crash victims hoped the government would reconsider prosecuting Boeing after the Jan. 5 door-plug blowout on the Alaska Airlines jetliner as the plane flew above Oregon.

Investigators looking into the Alaska flight say bolts that help keep the door plug in place were missing after repair work at a Boeing factory. The FBI told passengers that they might be crime victims.

Boeing stock has plunged by about one-third since the blowout. The Federal Aviation Administration has stepped up its oversight and given Boeing until late May to produce a plan to fix problems in manufacturing 737 Max jets. Airline customers are unhappy about not getting all the new planes that they had ordered because of delivery disruptions.

The company said it paid $443 million in compensation to airlines for the grounding of Max 9 jets after the Alaska accident.

Several former and one current manager have reported various problems in manufacturing of Boeing 737 and 787 jetliners. The most recent, a quality engineer, told Congress last week that Boeing is taking manufacturing shortcuts that could eventually cause 787 Dreamliners to break apart. Boeing pushed back aggressively against his claims.

Boeing, however, has a couple things in its favor.

Along with Airbus, Boeing forms one-half of a duopoly that dominates the manufacturing of large passenger planes. Both companies have yearslong backlogs of orders from airlines eager for new, more fuel-efficient planes. And Boeing is a major defense contractor for the Pentagon and governments around the world.

Richard Aboulafia, a longtime industry analyst and consultant at AeroDynamic Advisory, said despite all the setbacks Boeing still has a powerful mix of products in high demand, technology and people.

“Even if they are No. 2 and have major issues, they are still in a very strong market and an industry that has very high barriers to entry,” he said.

And despite massive losses — about $24 billion in the last five years — the company is not at risk of failing, Aboulafia said.

“This isn’t General Motors in 2008 or Lockheed in 1971,” Aboulafia said, referring to two iconic corporations that needed massive government bailouts or loan guarantees to survive.

All of those factors help explain why 20 analysts in a FactSet survey rate Boeing shares as “Buy” or “Overweight” and only two have “Sell” ratings. (Five have “Hold” ratings.)

Boeing said the first-quarter loss, excluding special items came to $1.13 per share, which was better than the loss of $1.63 per share that analysts had forecast, according to a FactSet survey.

Revenue fell 7.5%, to $16.57 billion.

Moody’s downgraded Boeing’s unsecured debt one notch to Baa3, the lowest investment-grade rating, citing the weak performance of the commercial-airplanes business.

Boeing Co. shares closed down 3%. They have dropped 34% since the Alaska blowout.

Norfolk Southern’s earnings offer railroad chance to defend its strategy ahead of control vote


A Norfolk Southern freight train runs through a crossing Homestead, Pa. 

Norfolk Southern reports earnings on Wednesday, April 24, 2024.

 (AP Photo/Gene J. Puskar, File)

BY JOSH FUNK
April 24, 2024

Norfolk Southern’s first-quarter earnings report Wednesday gave the railroad the opportunity to publicly defend CEO Alan Shaw’s strategy again before investors decide on May 9 whether to back him. Since the railroad already preannounced its disappointing results earlier this month when it disclosed a $600 million settlement over the disastrous February 2023 Ohio derailment there were few surprises in Wednesday’s numbers.

Norfolk Southern confirmed the $53 million, or 23 cents per share, that it earned in the first quarter. Without the settlement and some other one-time costs, the railroad said it would have made $2.39 per share while Wall Street was predicting earnings of $2.60 per share. The Atlanta-based railroad’s profit dropped from $466 million, or $2.04 per share, a year ago even though the railroad delivered 4% more shipments during the quarter.

“Our strategy is about balancing service, productivity and growth with safety at its core,” Shaw said, and he promised to close the profit margin gap with other major railroads over the next couple of years though several analysts have expressed doubts about whether Norfolk Southern will be able to do that as all the other railroads keep improving.

The railroad and Ancora Holdings disagree over whether Shaw ’s strategy of keeping more workers on hand during a downturn to be ready to handle the eventual rebound is the best way to run Norfolk Southern and whether he is the best man to lead the railroad.


Ancora’s CEO candidate, Jim Barber, was formerly UPS’ chief operating officer and said keeping more workers on hand during slower times is wasteful.

“This concept of Precision Scheduled Railroading is the exact same way that UPS has run its network for 60 or 70 years, which is you run it very efficiently, very effectively, and very balanced with as few assets as you can and leverage the efficiency of your employee base and the assets,” Barber said in an interview with The Associated Press.

All the railroad unions, which have been complaining about the deep job cuts since PSR became the industry’s standard operating model, came out in support of Shaw even though Norfolk Southern has also cut workers. And key regulators at the Surface Transportation Board and Federal Railroad Administration warned that Ancora’s strategy could jeopardize the advancements in safety and service Norfolk Southern has made since the East Palestine derailment.

But control of the railroad will ultimately be decided by investors — not the unions or regulators — who will vote on Ancora’s seven board nominees, and investors have reason to be disappointed in Norfolk Southern’s results given that the railroad’s profit margins have lagged behind peers. Several big investors, including EdgePoint Investment Group that ranks in the top 10 of the railroad’s shareholders, have said they will back Ancora’s slate, and a Deutsche Bank analyst said in a research note that the activists seem to have strong support among institutional investors.

Barber and Ancora’s pick to be chief operating officer argue that Norfolk Southern needs to aggressively implement the lean Precision Scheduled Railroading model to make the best use of its locomotives and crews and bring its profits in line with the other major freight railroads. That model calls for running fewer, longer trains on a tighter schedule and switching cars less often, so the railroad won’t need as many workers, locomotives and railcars.

If keeping more workers on hand was really the answer, Barber and the man Ancora wants to be Norfolk Southern’s Chief Operations Officer, Jamie Boychuk, questioned why Norfolk Southern can’t deliver more shipments on time now while business remains slower. The railroad said Wednesday that during the first quarter, it delivered 86% of the shipping containers it handled and about 76% of all the other goods on time. Norfolk Southern predicted that would improve in the second quarter, but its nearest competitor in the East, CSX railroad, was already significantly better.

Ancora wants to shrink Norfolk Southern’s workforce by about 1,500 jobs through attrition over the next three years while working to cut more than $800 million in expenses in the first year, and another $275 million by the end of three years.

Norfolk Southern says there’s no way to save that much in a year without laying off about 2,900 workers. The railroad said it believes the steps Ancora has outlined would only save about $400 million in the first year. Norfolk Southern has predicted that its own plan will generate that much cost savings within two years.

In one example of the dueling letters and presentations to investors, Ancora replied to that criticism and said most of its initial $800 million in projected savings come from things like parking hundreds of unneeded locomotives and thousands of railcars and improving fuel efficiency — not from layoffs

Boychuk has experience helping CSX implement Precision Scheduled Railroading after a different investor group pressured that railroad to hire industry legend Hunter Harrison in 2017. That led to all kinds of service problems that year when CSX overhauled its operations quickly in the last few months of Harrison’s life, but since those initial problems CSX has come to be regarded as the industry leader in most respects and routinely outperforms Norfolk Southern in the eastern U.S.

Boychuk and Barber have promised to implement the model more gradually at Norfolk Southern, but they say major changes are needed — not the incremental adjustments the railroad is making under new Chief Operating Officer John Orr that it paid CPKC railroad $25 million to get the right to hire this spring.

Orr touted his background at other railroads and the efforts he has made in the first month on the job to streamline the way Norfolk Southern’s railyards are working.

But Boychuk said improving the way individual railyards operate without reworking the entire network will just push the problems out somewhere else along the railroad.

“It’s not about a point here, a point there. Or because I massaged a yard,” Boychuk said.

Norfolk Southern shares fell more than 3.5% Wednesday to trade around $236 after the report. Ancora predicts shares will reach between $420 and $525 over the next three years if it implements its plan.

Regardless of how the vote ends up, the fight over Norfolk Southern has already put all rail CEOs on notice, and the industry already had a history of investors forcing changes. Just last year, Union Pacific hired a new CEO in response to pressure from a hedge fund, but the most famous examples were when CSX and previously Canadian Pacific both hired Harrison to implement Precision Scheduled Railroading.

Current CSX CEO Joe Hinrichs knows he has to keep costs in line while also trying to improve customer service and grow the railroad.

“I think the way to bring those two together is to continue to deliver efficiency while demonstrating the ability to serve customers. And that’s the balance we’re trying to achieve and what we’re focused on,” Hinirchs said. “I think when you can’t achieve that, like we’ve seen, people are going to push for improved cost performance, to improve margins. And so we talk very openly and actively with our team about that.”