Democrats Probe Tyson, Smithfield, OSHA Over Covid Outbreaks

Laura Davison 
Bloomberg
Updated Mon., February 1, 2021



(Bloomberg) -- A Democratic-led House panel is launching a probe into coronavirus outbreaks at meatpacking plants and whether the Occupational Safety and Health Administration adequately enforced worker safety rules.

Representative James Clyburn, who chairs the House Select Subcommittee on the Coronavirus Crisis, sent letters Monday to Tyson Foods Inc., Smithfield Foods Inc., and JBS USA requesting information on the number of sick employees, facility closures, safety measures and leave policies for when workers tested positive. Almost 54,000 workers at 569 meatpacking plants in the U.S. have tested positive for Covid-19, and at least 270 have died, Clyburn said in the letters.

Meatpacking companies “have refused to take basic precautions to protect their workers, many of whom earn extremely low wages and lack adequate paid leave, and have shown a callous disregard for workers’ health,” the letters to the companies said.

Tyson shares slipped 0.2% in New York trading after earlier falling by as much as 2.7%. Brazil-based JBS rose 0.2% in Sao Paulo trading after dropping as much as 1.7% following the announcement of the probe.

Clyburn also asked OSHA to explain the relative lack of citations and penalties issued against meatpacking plants under the Trump administration as the facilities became an epicenter of spread for the virus.

“OSHA issued penalties related to the coronavirus totaling over $3.9 million, but the agency issued only eight citations and less than $80,000 in penalties for coronavirus-related violations at meatpacking companies,” the letter said.

A spokeswoman for the Department of Labor said the letter and its request are focused on the Trump administration’s actions and that the current administration is committed to working with Clyburn to protect workers. On Friday, OSHA issued new guidance calling for stronger workplace protections for the virus.

OSHA’s response to the pandemic under Trump was an “utter failure” that “cost workers their lives,” and the probe is “welcome news,” said Mark Lauritsen, director of food processing and meatpacking for the United Food and Commercial Workers International Union.

“We need to answer questions on why it was such a complete failure and what were the factors that influenced the Trump administration and OSHA to basically do nothing while workers were suffering, so it will never happen again,” Lauritsen said.

Gary Mickelson, a spokesman for Tyson, said in a statement that the health and safety of workers is the company’s top priority and that they’ve implemented virus testing and added a chief medical officer to help respond to health guidelines in the wake of the pandemic.

Keira Lombardo, Smithfield’s chief administrative officer, said in a statement that the company has taken “extraordinary measures” to protect employees that exceeded governmental guidelines and that it looks forward to correcting “inaccuracies” about the virus spread at meat plants.

JBS has invested in safety measures and facility modifications and welcomes the opportunity to share “our response to the global pandemic and our efforts to protect our workforce,” according to a statement from the company.

Hot Spots

The spreading virus made meat plants among the early hot spots in the U.S. pandemic, forcing facilities to shut temporarily.

Meat companies spent hundreds of millions to install work-station dividers, sanitizer stations, temperature scanners and to add medical personnel. “Comprehensive protections instituted since the spring” cost more than $1.5 billion, according to Sarah Little, a spokesperson for the North American Meat Institute.

Public health reviews have suggested the outbreaks in meatpacking plants seeded the subsequent spread in the surrounding communities, with one study by researchers at University of Chicago and Columbia University tying as many as 1 in 12 cases of Covid in the early stage of the pandemic to meat-processing facilities

The low OSHA penalties have drawn criticism from Democrats, including Senators Elizabeth Warren of Massachusetts and Cory Booker of New Jersey. Lawmakers have pointed to the meatpacking industry as an example of how companies have failed to protect poorly paid front-line employees.

OSHA has defended the size of the fines. In reference to a $13,494 fine against Smithfield Foods -- after 1,300 workers at the meat-packer’s Sioux Falls, South Dakota, plant tested positive for the virus, 43 were hospitalized and four died between March 22 and June 16 -- OSHA said it was the maximum penalty allowed by law.

Clyburn set a Feb. 15 deadline for OSHA staff to brief lawmakers and for the companies respond with the requested data.

(Updates with union comment beginning in eighth paragraph.)

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©2021 Bloomberg L.P.

Originally published Mon., February 1, 2021

CRIMINAL CAPITALI$M

LuLaRoe to pay $4.75M to settle pyramid scheme lawsuit

Updated Mon, February 1, 2021

SEATTLE (AP) — The California-based multi-level marketing business LuLaRoe is paying $4.75 million to settle allegations from the Washington state Attorney General’s Office that it operated as a pyramid scheme.

LuLaRoe sells leggings and other clothing to a network of independent retailers, who can recruit other retailers to sell the company’s products.

Attorney General Bob Ferguson sued the company and its executives two years ago, saying they deceived people about how profitable it was to be a LuLaRoe retailer. While two people at the top made millions from 2016 to 2019, thousands of others were left with debt and unsold product, which they couldn't return due to the company's complex and misleading refund policy, he said.


Ferguson said that $4 million of the settlement will be distributed to about 3,000 Washington residents who were recruited to the company. “Every Washington retailer who lost money under LuLaRoe’s pyramid structure will receive restitution,” his office said in a news release.

The company denied wrongdoing in a consent decree filed late Monday in King County Superior Court in Seattle, but the agreement prohibits LuLaRoe from operating a pyramid scheme and requires it to be more transparent with retailers. Among other things, it must publish an income disclosure statement that accurately details how much retailers might earn.

Ferguson said LuLaRoe's structure violated the state's anti-pyramid scheme law, which defines enterprises as pyramid schemes if they offer the opportunity to earn compensation primarily from recruitment, rather than retail sales.

LuLaRoe did not immediately respond to an email seeking comment Monday.
Originally published Mon, February 1, 2021, 7:14 PM

CRIMINAL CAPITALI$M
Exclusive-Mexican tax authorities to seek over 

$500 million from Canada's First Majestic

Daina Beth Solomon
Updated Mon, February 1, 2021

FILE PHOTO: Silver bars and coins are stacked in safe deposit boxes room of the ProAurum gold house in Munich

By Daina Beth Solomon

MEXICO CITY (Reuters) - Mexico's government plans to seek more than $500 million from Canadian miner First Majestic Silver Corp in what it says are owed taxes for artificially keeping its silver prices low over the past decade, two sources told Reuters.

Audits dating back to 2010 show that the company owes about 11 billion pesos ($534.36 million), the sources said.

So far, Mexico's Tax Administration Service, or SAT, has sought 5.5 billion pesos ($267.18 million) in tax debt, with the remaining half of the total yet to enter into formal disputes, according to the sources.

Officials are also doubling down on an effort to criminally prosecute First Majestic's local unit, Primero Empresa Minera, for tax fraud related to the scheme, even after a judge held off on filing charges on Thursday, the sources and another person with direct knowledge of the case said.

Under President Andres Manuel Lopez Obrador, authorities have taken a hardball approach to squeezing taxes out of companies, warning that tax dodgers could face criminal charges and jail time.

The Mexican leader has threatened to personally expose companies with major tax debts, and has called out Canadian mining firms in particular, without naming them.

First Majestic, a Vancouver-based company that owns three working mines in Mexico with another eight in various stages of development, did not respond to a request for comment.

The company has previously said it has made several proposals to resolve taxation disputes with Mexico, and its latest filings show that Mexico's tax authority has called for $219 million in reassessments.

According to the government's analysis, Primero Empresa Minera, which First Majestic bought in 2018, set its silver prices below market value in a system similar to transfer pricing used by multinationals to shift profits to low tax havens.

Mexico's government won one battle against First Majestic in September with a court ruling that nullified Primero Empresa Minera's pricing arrangement. First Majestic has said it would appeal the decision.

Officials last year also drew up criminal charges, in line with a recent reform that classifies tax fraud over 7.8 million pesos as a serious crime. According to an official document dated April 2020, reviewed by Reuters, prosecutors sought to recover from Primero Empresa Minera 426.3 million pesos ($20.71 million) in taxes owed in 2015 alone.

A judge in the northeastern state of Durango however declined to file charges last week, saying the tax authorities' audit of the company was incomplete. Prosecutors have appealed the ruling, arguing the full audit was not necessary, said one of the people familiar with the case.

SAT said it would not comment on ongoing investigations.

The finance ministry's tax prosecutor Carlos Romero declined to comment on First Majestic or Primero Empresa Minera. However, in circumstances when a full audit is requested, he said the prosecutor's office could file a fresh complaint once the audit is complete.

"We fight to the very end," he said.

Still, a decision on the appeal could be months away.

First Majestic's shares surged more than 30% after Bloomberg reported on the court's decision, the same day as a surge in silver stocks.

Mexican tax authorities reaped payments from nearly 900 large companies last year in their bid to boost state coffers in the country with the lowest tax take in the Organisation for Economic Co-operation and Development. In two of the biggest deals that were made public, Walmart Inc's Mexico unit and Coca-Cola bottler Femsa forked over nearly 17 billion pesos.

($1 = 20.5855 Mexican pesos)

(Reporting by Daina Beth Solomon; Additional reporting by David Alire Garcia; Editing by Frank Jack Daniel and Raju Gopalakrishnan)
Originally published Mon, February 1, 2021, 6:51 AM

Aviva Investors threaten to ditch top carbon emitters over climate inaction

By Simon Jessop

LONDON (Reuters) - Aviva Investors said on Monday it could ditch its stock and bond holdings in 30 of the world's biggest corporate emitters of carbon if their boards failed to take sufficient action over climate change.

The move comes as asset managers including BlackRock and Legal & General Investment Management look to ratchet up the pressure on companies to form a plan to transition to a lower-carbon economy, ahead of the next round of global climate talks.

The British asset manager, part of insurer Aviva and which manages 355 billion pounds in assets, said its Climate Engagement Escalation Programme would target companies in sectors including oil and gas, mining and utilities.

The programme would last between one and three years, depending on the specifics of the company concerned. Aviva declined to name the companies concerned, but is a big shareholder in leading oil majors including Royal Dutch Shell and BP.

Among the actions Aviva said it expects of the companies are that they commit to net zero carbon emissions by 2050 and ensure their plan to do so is in line with the Science-Based Targets Initiative, an NGO-led group that signs off on corporate climate plans.

The companies would need to integrate the climate goals into their business strategy, including capital expenditure plans; set short- and medium-term targets; align management pay with the goals; and ensure lobbying efforts supported the goals.

"For our engagement approach to have impact, it must be accompanied by a robust escalation process, including the ultimate sanction of divestment," Mirza Baig, Global Head of ESG Research and Stewardship, said in a statement.

Progress would be monitored on a six-month basis, with escalation measures open to Aviva including voting against directors at the companies' annual general meetings, filing shareholder resolutions and working with stakeholder groups to apply pressure, it said.

"This approach has the complete backing of our investment teams," said David Cumming, Chief Investment Officer for Equities at Aviva Investors.

"By fully integrating our approach across stewardship and the investment teams, we will be able to maximise our ability to influence the companies we have targeted towards positive climate strategies."

(Reporting by Simon Jessop; editing by David Evans)

Originally published Mon, February 1, 2021

Aviva to Divest From Companies That Don’t Act on Climate: FT

Max Zimmerman
Updated Sun, January 31, 2021


(Bloomberg) -- Aviva Investors, one of Britain’s top asset managers, will divest from oil, gas, mining, and utilities companies that do not meet its expectations on tackling climate change.

The London-based investor has written to the companies, calling on them to set net zero emissions goals and integrate climate risks into their strategy, including their plans for capital expenditure, the Financial Times reported, citing chief investment officer for equities David Cumming.

Cumming told the paper that climate change poses a huge risk to capital markets and that it is a massive disruptor. He said divestment was the last thing Aviva wanted to do but that “we will do it.”

Aviva will divest across both its equity and credit portfolio if companies fail to meet expectations over the next one to three years, he said. Aviva declined to name the companies it is targeting.

Aviva Investors manages 355 billion pounds ($486 billion) and has stakes in 30 of the world’s largest oil, gas, mining and utilities companies, according to the Financial Times. Cumming said he expected other asset managers to increasingly consider divestment as a response to companies’ efforts on climate change.


©2021 Bloomberg L.P.

CANADIAN EV'S TOO

Biden’s Green Energy Boom Could Send The Electric Car Sector Into Overdrive

Editor Oilprice.com
Updated Sun, January 31, 2021

Who will become the world’s first trillionaire?

New York Times journalist Kara Swisher thinks it might just be someone in green technology…

And she could be right.

Just look at the two richest men at the moment, Jeff Bezos and Elon Musk…

The Silicon Valley behemoths have a lot more in common than many might think.

Most importantly, they’re both heavily invested in green tech.

The two giants of industry have been at the forefront of the clean energy boom, driving innovation in the industry…

And now, with governments across the planet pumping billions of dollars into renewables, the tech superstars are ready to grab this trend by the horns and start collecting their next hundreds of billions of dollars in revenues.

And obviously, it’s not just about minting the first trillionaire. It’s a financial trend that’s transforming Wall Street from the button up.

Hedge funds are betting big on sustainability...but even that is driven by retail demand and growing pressure from a new generation of investors.

In fact, the biggest movers in the market over the past year have been green stocks, driven by new investors using platforms like Robinhood or WeBull. And the old school is struggling to keep up.

Tesla (NASDAQ:TSLA) cost short-sellers over $40 billion in 2020 alone …

NextEra (NYSE:NEE) has challenged Big Oil to become the darling of energy …

And growing support for alternative fuels has helped companies FuelCell (NASDAQ:FCEL) see over 600% returns...

And one Canadian company, Facedrive (TSX.V:FD, OTCMKTS:FDVRF), a pioneer of green ride-hailing in North America--is well-positioned to take full advantage of the looming energy transformation thanks to its forward-looking perspective and key acquisitions in the space.

Biden’s $2 Trillion Promise.

One of President Biden’s most important promises is his plan to spend $2 trillion on reimagining the country’s infrastructure.

This plan, which has seen support from both sides of the aisle, will focus on new technology and new sources of energy.

Importantly, this will include expanded EV purchase incentives to get more people driving them, and a 500,000-strong EV charging network by 2030.

It’s no wonder then that electric vehicle stocks are soaring, as this is a huge opportunity for companies like Tesla, and companies that use electric vehicles in their business like Facedrive.

For Facedrive, the timing could not have been better following the company’s September 2020 acquisition of Steer - the electric vehicle subscription business aiming to transform car ownership.

The acquisition of Steer also meant that the energy giant Exelon (NASDAQ:EXC) joined the Facedrive story, with a $2-million strategic investment by its wholly-owned subsidiary, Exelorate Enterprises, LLC.

So, just as Biden prepares a $2 trillion green infrastructure investment, Facedrive is building out its association with a major American utility and an up and coming EV subscription service that could become a disruptor.

The founder of Steer, Erica Tyspin, one of Forbes’ “Under 30 List” of top young entrepreneurs, is aiming to transform the auto industry by offering customers their own virtual EV showroom, in the form of a subscription service for on-demand car use. It’s an all-inclusive, user risk-free service that is 100% electric, plug-in, and hybrid.

For Facedrive, an ESG-focused tech ecosystem with multiple verticals, it’s the perfect match.

And if anyone is skeptical about conventional car drivers switching to Steer… the numbers might surprise you: 70% of Steer’s members have never driven an EV before. So the future of many electric vehicle drivers may well be subscription rather than ownership.

The ‘Biden Boom’ Is Bigger Than Steer ….

While Steer may be the new and exciting future of electric vehicle use, it is only the tip of Facedrive’s access to the ‘Biden Boom’.

The second exciting opportunity is its ride-hailing vertical.

As an industry, ride-hailing is worth $60 billion today and is set to top $85 billion by 2023. And while Uber and Lyft may have started this transportation revolution, they are no longer leading the way to the future.

The industry is responsible for huge amounts of pollution, and the new ‘clean’ ride-hailing movement is getting ready to transform the industry.

Uber is aiming to get to the point where 100% of its rides in American, Canadian, and European cities will be in electric vehicles by 2030, and Lyft has vowed to have 100% of rides across the board do the same.

But it was Facedrive (TSX.V:FD, OTCMKTS:FDVRF) that initiated this move. It offered customers a choice of EV, hybrid or gas way back in 2019 and offset emissions by planting trees.

Now, Facedrive is looking to push aggressively into the U.S. in order to take advantage of the energy transition.

From rising subscriptions for Steer’s EV service to a ride-hailing push, carbon offset food delivery, and even countering the spread of COVID, Facedrive is getting attention for all the right reasons.

Facedrive has aggressively acquired businesses for its ‘energy transition’ ecosystem, and these are where we might find the biggest beneficiaries of the coming ‘Biden Boom’.

As the Biden administration makes history with its ambitious climate plans, Facedrive will be a company to watch.

The EV Revolution Is Only Accelerating

Fisker (NYSE:FSR) is a newcomer in the electric vehicle scene. And it’s a speculative one, at that considering that It won’t start producing its EV SUVs until 2023. But again, it’s a story stock that looks a lot like Tesla did in the early days.

Citigroup analyst Italy Michaeli just picked up coverage of Fisker, with a “Buy” rating and a price target of $26. Michaeli gets the narrative here, reminding investors that “as a pre-revenue company, Fisker is clearly a higher-risk investment proposition”, but there’s a big reason to be bullish. Fisker has four long-term advantages here: It’s making an SUV, which Michaeli says is a good segment to target. It’s got a strong brand. It’s got a legacy behind the wheel: Henrik Fisker is Fisker’s founder and he’s a legend in automotive design. And it’s a massive saver of capital because it has an innovative “asset-light” approach, getting Magna International to assemble its first vehicle. It’s already got 9,000 advance orders … prepaid.

Though Fisker has underperformed on the market compared to NIO, Tesla, Xpeng or Li, it’s still trading on massive volume and in just one month, has already climbed by more than 64% since hitting a low in November. Clearly, investors are still waiting to see how the company will hold up, especially following the Nikola disaster.

Alternative Energy Stocks Are Booming

Billionaires couldn’t keep their hands off of Plug Power (NASDAQ:PLUG) this year, with giant BlackRock’s Larry Fink piling in heavily, among other heavy hitters. Why? Partly because Plug Power is already providing its hydrogen-powered tech solutions to big-name retailers, but overall, because the green revolution is clearly happening and unfolding as we speak. It helps that Plug's full-year guidance implies year-on-year sales growth of around 35%, even if profit won’t come for a while.

Morgan Stanley's Stephen Byrd believes green hydrogen will become economically viable quicker than investors appreciate saying Plug Power's deal with Apex Clean Energy to develop a green hydrogen network using wind power offers a chance to tap into "very low cost" renewable power and helps accelerate the shift to clean energy. Plug has a goal for over 50% of its hydrogen supplies to be generated from renewable resources by 2024.

The company has also just announced a partnership with Universal Hydrogen to build a commercially-viable hydrogen fuel cell-based propulsion system designed to power commercial regional aircraft. The initiative will help bring Plug's proven hydrogen ProGen fuel cell technology to new markets.

California-based Bloom Energy Corp. (NYSE:BE) builds and sells solid-oxide fuel cell systems. And, though, there has been a significant amount of cash burn, it’s an incredibly innovative company--and that’s what tech startups are all about. Growth, not necessarily immediate profit.

Bloom has recently announced a series of high-profile partnerships, including a JV with Samsung Heavy Industries and a second with a major South Korean engineering and construction company. Those partnerships could lead to a massive uptick in fuel cell deployments and analysts are looking at a potential for Bloom to increase its sales by seven times.

And this could all be about to get even bigger. Why? Because this relatively small company is thinking in huge terms: We’re not just talking about fuel cells for construction vehicles or to power remote electricity generation … Bloom is thinking far bigger than that. It’s targeting utility-scale applications of fuel cells and industrial-scale applications and drawing in some very big names in the process.

Thanks to Bloom’s innovative approach to this exploding market, it has seen its share price soar from $7.88 at the start of 2020 to $35.00 at the time of writing. In the stock world, a 300% plus return is never bad. And as this sector grows, so to could Bloom’s market cap.

FuelCell Energy (NASDAQ:FCEL) is another explosively volatile alternative fuel stock that has turned heads on Wall Street. Up over 100% year to date, FuelCell has been one of the most exciting companies to follow throughout the election season, with President-elect Joe Biden campaigning for a carbon-free America. In fact, analysts even estimate the U.S. could spend as much as $1.7 trillion on clean energy initiatives over the next 10 years. And that’s great news for companies like Blink, Plug and FuelCell.

Though many expect FuelCell to return to earth in the short-term, its long-term trajectory is solid. It has spent years building a patent moat and developing solutions that will tie into the energy transition perfectly.

FuelCell weathered it’s less-than-positive earnings report, but the company has managed to take advantage of the green energy boom and growing speculation about how the industry will flourish in the coming yearts.

Canada Is Also Jumping On Board

NFI Group (TSX:NFI) is one of Canada’s leaders in the electric vehicle space. It produces transit busses and motorcycles. NFI had a difficult start to the year, but it since cut its debt and begun to address its cash flow struggles in a meaningful way. Though it remains down from January highs, NFI still offers investors a promising opportunity to capitalize on the electric vehicle boom.

Recently, NFI has seen an uptick in insider stock purchases which is often a sign that the board and management strongly believe in the future of the company. In addition to its increasingly positive financial reports, it is also one of the few in the business that actually pay dividends out to its investors.

Not to be outdone, GreenPower Motor (TSX.V:GPV) a thriving electric bus manufacturer based out of Vancouver, is making mvoes on the market, as well. Although for the moment, its focus is primarily on the North American market, but its ambitions are much larger. Founded over a decade ago, GreenPower has been on the frontlines of the electric transportation movement, with a focus on building affordable battery-electric busses and trucks.

Year-to-date, GreenPower has seen its share price soar from $2.03 to $36.88. That means investors have seen 1700% gains this year alone. And with this red-hot sector only going up, GreenPower will likely continue to impress.

Magna International (TSX:MG) is a great way to gain exposure to the EV market without betting big on one of the new hot automaker stocks tearing up Robinhood right now. The 63 year old Canadian manufacturing giant provides mobility technology for automakers of all types. From GM and Ford to luxury brands like BMW and Tesla, Magna is a master at striking deals. And it’s clear to see why. The company has the experience and reputation that automakers are looking for.

Another way to gain exposure to the electric vehicle industry is through AutoCanada (TSX:ACQ), a company that operates auto-dealerships through Canada. The company carries a wide variety of new and used vehicles and has all types of financial options available to fit the needs of any consumer. While sales have slumped this year due to the COVID-19 pandemic, AutoCanada will likely see a rebound as both buying power and the demand for electric vehicles increases. As more new exciting EVs hit the market, AutoCanada will surely be able to ride the wave.

Like Magna, Westport Fuel Systems (TSX:WPRT) is another hardware and tech provider in the auto-industry.It builds products to help the transportation industry reduce their carbon footprint. In particular, it provides systems for less impactful fuels, such as natural gas. In North America alone, there are over 225,000 natural gas vehicles. But that shies in comparison to the global 22.5 million natural gas vehicles globally, which means the company still has a ton of room to grow!

By. Mark Beale
Originally published Sun, January 31, 2021, 3:00 PM

Tesla challenger Faraday Future wants to go from 0 to $20B in sales by selling lots of $180K electric cars

Brian Sozzi
·Editor-at-Large
Updated Mon, February 1, 2021

Faraday Future aims to put its checkered past in the rearview mirror, and park some money in the bank accounts of investors over the next five years.

The electric vehicle maker said on Jan. 28 it will do a special purpose acquisition company (aka “SPAC”) deal with blank check company Property Solutions Acquisition Corp.

A total of $1 billion in gross proceeds will be provided to the combined company in a deal expected to close in the second quarter. Faraday Future will count Chinese auto manufacturer Geely as a minority investor, and a partner in making electric vehicles (EVs) in the critical Chinese market.

The funds will be used to help Faraday Future bring its $180,000 electric car — dubbed the FF91 Futurist — to market by the first quarter of 2022, according to an investor presentation on its website. The $100,000 FF91 will follow with an expected launch date in the fourth quarter of that year.

Four other electric vehicle models from Faraday (including a mass market vehicle that starts at $45,000) are planned to launch from the second quarter of 2023 to the second quarter of 2025. If all goes according to plan, Faraday forecasts going from no revenue and a $227 EBITDA (earnings before interest, taxes and depreciation) loss in 2021 to a whopping $21.4 billion in sales, and $2.3 billion in EBITDA by 2025.

In fact, Faraday Future’s CEO Carsten Breitfeld says those estimates may be conservative.

“I personally think we can do more than that. But we start with low volumes, scale by 2025 and given how the markets are developing right now it’s absolutely realistic,” Breitfeld told Yahoo Finance Live.

Faraday Future's product roadmap.

Breitfeld joined Faraday Future in late 2019. He co-founded EV maker Byton, and is the former project manager for the development of BMW’s i8.

To be sure, Faraday’s financial outlook is lofty for at least two reasons.

First is the intense competition in the U.S. electric vehicle market. While Tesla (TSLA) is currently dominating the U.S. EV space, Ford (F) and General Motors (GM) are on the cusp of taking it to the champ with credible offerings of their own.

Meanwhile, the likes of Nio, Xpeng and Li Auto are cleaning up in the Chinese EV market at the moment, and have a clear head-start when compared to Faraday Future.

Secondarily, Faraday Future has a checkered background. The company was founded in 2014 by closely watched Chinese businessman Jia Yueting, who planned to challenge Tesla in the U.S. EV market.

Yet the company never wound up getting cars to market — and instead blew through investor cash amid various operational missteps. Yueting filed for personal bankruptcy in 2019 to deal with a reported $3.6 billion in debt, an issue that has since been resolved. He is now listed as chief product and user officer on Faraday Future’s investor presentation.

“When I came in 16 months ago, we had to do some changes in the company. We focused it more on execution,” Bretfield explained to Yahoo Finance.

“We had to rework the governance and resolve some personnel issues. But now this is all behind us and we are looking forward,” he added.

Exxon’s New Carbon Capture Plan Looks a Lot Like Its Old One
Kevin Crowley
Updated Mon, February 1, 2021


(Bloomberg) -- Exxon Mobil Corp. pledged to spend $3 billion on low-emission technologies through 2025 to address investor concerns over its environmental record, unveiling a plan that comprises several projects that have already been announced.

Exxon said Monday in a statement it will “commercialize” its low-carbon technology initiatives through a new venture called ExxonMobil Low Carbon Solutions.

The announcement, made on the eve of Exxon’s fourth-quarter earnings report, comes as the Irving, Texas-based company faces intense pressure from environmentalists and investors for not moving fast enough on climate change and also for delivering weak financial performance compared with peers. Shareholder D.E. Shaw & Co. is in talks about adding new directors to Exxon’s board, according to people familiar with the matter, and activist investor Engine No. 1 last week revealed its own slate of nomination.

Exxon has sought to fend off some of the criticism with targets to reduce methane leaks and emissions intensity. Its latest response is an increased focus on carbon capture, a technology favored by many other large oil and gas producers.

But investors looking for a meaningful strategic shift may be disappointed. The planned investments announced Tuesday represent less than 5% of the oil giant’s capital budget over the period.

Furthermore, several of the projects touted by Exxon aren’t new. The carbon capture efforts in the Netherlands, Belgium and Qatar are already being developed with partners. Exxon said it has moved ahead with permitting for the expansion of its LaBarge facility in Wyoming, which would be the company’s biggest carbon capture project, but that project is still in doubt after being put on hold.

Government support is needed to make carbon capture more commercially viable, Exxon also said in the statement. The “opportunities can become more commercially attractive through government policy, including the United States tax credit 45Q, which ExxonMobil supports, and other supportive policies in the European Union, Canada and Singapore,” it said.


Bloomberg Green reported in December that oil majors have been unwilling to invest heavily in carbon capture without extra government support or regulation. LaBarge is a case in point: Exxon had planned to build one of the world’s largest carbon capture operations at the natural gas facility, at a cost of $260 million, after working on it for years. Instead the project was paused as crude prices plunged due to Covid-19. A few months later, Exxon announced plans to expand crude operations off the coast of Guyana at a cost $9 billion -- a cost 35 times higher.

Exxon says LaBarge already captures 7 million tons of carbon dioxide a year, nearly 80% of the company’s total. The project captures very little carbon dioxide from the air, however. Most of the CO2 is pumped up from the ground as a byproduct of natural gas and helium, processed and then sold to nearby crude operators to enhance their oil recovery.

Exxon’s new plan also mentions its venture with Danbury, Connecticut-based FuelCell. Over the past five years, the companies have been working on carbonate fuel-cell technology that captures carbon dioxide spewed from industrial operations and uses it in a chemical process to generate electricity. In 2019, when FuelCell was nearly insolvent, the oil giant threw it a $10 million lifeline for the right to use its technology.

FuelCell hasn’t posted an annual profit since 1997, yet its stock has soared in value since mid-November as interest in hydrogen and fuel cells in general has boomed.

(Updates with projects in fifth paragraph)

©2021 Bloomberg L.P.

Originally published Mon, February 1, 2021, 7:42 PM

Shell targets power trading and hydrogen in climate drive

The company also announced plans to cut its workforce by up to 9,000 employees, or about 10%, by August this year as part of a broad cost-cutting review known as Project Reshape.

Ron Bousso
Updated Mon, February 1, 2021

FILE PHOTO: A Shell oil and gas sign is pictured near Nowshera


By Ron Bousso

LONDON (Reuters) - Royal Dutch Shell is betting on its expertise in power trading and rapid growth in hydrogen and biofuels markets as it shifts away from oil, rather than joining rivals in a scramble for renewable power assets, company sources said.

Shell and its European rivals are seeking new business models to reduce their dependency on fossil fuels and appeal to investors concerned about the long-term outlook for an industry under intense pressure to slash greenhouse gas emissions.

Shell will present its strategy on Feb. 11 and unlike Total and BP the company will focus more on becoming an intermediary between clean power producers and customers than investing billions in renewable projects, the sources said, giving previously unreported details of the plan.

Shell announced in October it would increase its spending on low-carbon energy to 25% of overall capital expenditure by 2025 and the sources said that would translate into more than $5 billion a year, up from $1.5 billion to $2 billion now.

The Anglo-Dutch company will, however, keep its overall oil and gas output largely stable for the next decade to help fund its energy transition, though gas is set to become a bigger part of the mix, the sources told Reuters.

A Shell spokeswoman declined to comment on the details of the company's new strategy ahead of its February announcements. BP, meanwhile, plans to slash its oil output by 40% by 2030 and has swept aside its core oil and gas exploration team to focus on renewables, with spending on low-carbon energy set to rise 10-fold to $5 billion over the coming decade.

While Europe's big oil firms are all rolling out strategies to survive in a low-carbon world, investors and analysts remain sceptical about their ability to transform centuries-old business models and triumph in already crowded power markets.

POWER TRADING

Central to Shell's plans are its experience in trading all types of energy from oil to natural gas to electricity and its vast retail network, which has more outlets than either of the world's two biggest food chains, Subway and McDonald's.

Shell is already the world's leading energy trader, an activity it calls "marketing". It trades about 13 million barrels of oil a day, or 13% of global demand before the pandemic, using one of the biggest fleets of tankers.

It is the top trader of liquefied natural gas (LNG), buys and sells power, biofuels, chemicals and carbon credits, and now aims to use its pole position to snare a large chunk of the fast-growing low-carbon power market.

"The future of energy is particularly bright for our marketing and our customer-facing businesses where we already have scale. So we will accelerate a growth plan which is already underway," Chief Executive Ben van Beurden said in October.

Trading has been key for oil majors for decades, allowing them to use their global operations to quickly take advantage of changes in supply and demand. Shell's trading helped it avoid its first-ever quarterly loss in the second quarter of 2020 even as consumption plummeted due to the coronavirus epidemic.

Nevertheless, analysts say Shell's trading division will face a challenge because it is heavily reliant at the moment on sales of refined fossil fuel products, which also account for a large proportion of its carbon emissions.

"Shell faces difficult choices on how to balance its trading cash flow that leverages oil products while still having carbon-intensive operations," JP Morgan analyst Christyan Malek said. "But because of their scale, customer base and distribution, they can be much more flexible."

HYDROGEN HUBS

At the same time, Shell plans to boost its consumer base by expanding its electricity supply business for homes and its network of electric vehicle charging points, as well as signing long-term corporate power purchase agreements (PPA).

Shell already has 45,000 retail outlets worldwide, far more than its European rivals, and it is planning to add another 10,000 by 2025.

As a major biofuel producer, Shell wants to ramp up its production of fuel made from plants and waste as an alternative source of energy for transportation, the sources said.

Shell's is also betting on future growth in hydrogen, the sources said. While still a niche market, hydrogen has attracted huge interest in recent months as a clean alternative to natural gas for heavy industry and transportation.

Hydrogen, and so-called green hydrogen which is made solely with renewable power, comes with high costs and infrastructure challenges though Shell is already investing.

Its push will centre initially on Europe, where it is developing a hydrogen hub in Hamburg, Germany, and it is one of several firms developing a hub in Rotterdam in the Netherlands. It is also looking to expand into the United States and Asia.

The U.S. state of California, for example, is backing the rollout of hydrogen fuel cell vehicles to help achieve its climate goals while countries such South Korea and Japan are betting heavily on hydrogen as an alternative fuel.

The sources did not give any targets for increases in Shell's production of either hydrogen or biofuels.

Like Shell, rivals including BP, Total, Italy's Eni and Spain's Repsol also plan to expand in hydrogen and biofuels markets, as well as add electric vehicle charging points to generate new revenue away from oil.

COMPETITIVE EDGE?

However, Shell won't chase the same ambitious targets some of its European rivals have for adding wind and solar generation capacity and will prioritise trading and selling electricity instead, the sources said.

Shell is wary about investing heavily in renewable projects where it won't have any particular competitive edge over other oil companies or utilities, such as Spain's Iberdrola and Denmark's Orsted that are already becoming significant green energy producers.

Shell will still expand its renewable capacity, especially in offshore wind farms where it believes it has an advantage after years of operating offshore oilfields, but the business will centre on profitability rather than size, the sources said.

"Shell will have some volumetric targets but that is not the focus," a senior company official told Reuters. "A single focus on the volume of renewable energy generating capacity could be dangerous and lead us to some bad deals."

BP wants to boost its renewable generation capacity 20 fold by 2030 while Total is aiming to have 100 gigawatts (GW) of gross renewable energy generation capacity by 2030.

Investors are concerned, however, that they may struggle to hit their profit projections by investing in costly renewable projects which typically have lower rates of return than oil.

Shell provided some details on its new strategy on Oct. 29, including a plan to narrow its oil and gas production to nine hubs, cut the number of refineries to six from 14 and boost its marketing business.

The company also announced plans to cut its workforce by up to 9,000 employees, or about 10%, by August this year as part of a broad cost-cutting review known as Project Reshape.

(Reporting by Ron Bousso; Editing by Simon Webb, Veronica Brown and David Clarke)
Originally published Mon, February 1, 2021, 10:22 AM

THIRD WORLD USA
Poverty levels rose after jobless benefits expired: Study

Poverty increased most in states with poorer unemployment benefit systems

Denitsa Tsekova
·Reporter
Updated Mon, February 1, 2021

Poverty rose at the fastest rate in nearly 60 years in 2020, but the increases were uneven across states.

While some states saw a huge increase, others kept poverty rates at pre-pandemic levels — largely because they provided unemployment benefits to a higher share of their populations.

Poverty grew by 1% last year, meaning 8 million more people entered poverty. In states where at least 35% of jobless workers received unemployment benefits, poverty rose by 0.8%. But in states that doled out benefits to less than 35% of unemployed residents, poverty increased by 1.3% in 2020, a study from the University of Chicago and Notre Dame found.

“It tends to be mostly southern states, and some Plains states, and a few other states that have unemployment insurance systems that are particularly stingy,” Bruce Meyer, a University of Chicago economist and author of the analysis, told Yahoo Money. “In the states where the unemployment insurance systems have not been very good at reaching those out of work, poverty has risen more.”

In the first quarter of 2020, there were 24 states that had less than 35% of their jobless workers on unemployment insurance, including Florida, Arizona, and Mississippi, which have the three lowest recipiency rates of 8.9%, 11.1%, and 12.5%, respectively.

On the other end of the spectrum, 26 states and Washington, D.C., have rates 35% or higher, including Minnesota, North Dakota, and Massachusetts, which have the highest rates of 73.1%, 77.1%, and 80%, respectively.

During the pandemic workers who didn't qualify for regular Unemployment Insurance (UI) could have applied for Pandemic Unemployment Assistance (PUA), a program available to self-employed workers, contractors, and others that is available until March 14. The analysis did not include those on PUA.

In states where the recipiency rate of unemployment benefits is above 35%, poverty rose in 2020 by 0.8% while states that are below that recipiency rate saw a 1.3% increase.( Graphic: David Foster/Yahoo Finance)

With millions of jobs lost in the pandemic and over 18 million people still relying on unemployment benefits, jobless Americans needed that support during the pandemic.

“The principal hardship wreaked by the pandemic, at least on people's incomes, has been job loss,” Meyers said. “In states where the unemployment insurance systems have not been very good about reaching those out of work, poverty has risen more.”

Poverty in the U.S. actually declined at the beginning of the coronavirus pandemic, thanks to the extra $600 in weekly unemployment benefits paid through the summer as well as the $1,200 stimulus checks that were distributed in the spring.

Poverty dropped to 9.3% in May, down from its 10.8% pre-pandemic level, but it increased to 11.8% in December as government support decreased or lapsed altogether. The December poverty numbers don't include the effects of the $900 billion stimulus package, which included $600 stimulus checks, an extra $300 in weekly jobless benefits, and the extension of key unemployment programs.

Denitsa is a writer for Yahoo Finance and Cashay, a new personal finance website. Follow her on Twitter @denitsa_tsekova.

Analysis: GameStop saga may provide early test of Biden administration ethics pledges

Trevor Hunnicutt and David Lawder
Updated Mon., February 1, 2021

FILE PHOTO: Yellen holds a news conference in Washington


By Trevor Hunnicutt and David Lawder

WASHINGTON (Reuters) - Arguably the last thing new U.S. Treasury Secretary Janet Yellen wants to take up during her first days in office is a financial market imbroglio involving one of her last private sector business relationships.

But as hedge fund Citadel LLC emerges as one of the key actors in the trading frenzy last week involving GameStop Corp - and questions arise over whether the activity exposes deeper risks for the financial system - Yellen could find herself pulled into the fray.

Citadel, together with another fund, extended a $2.75 billion financial lifeline to hedge fund Melvin Capital Management, which had suffered heavy losses by betting against GameStop. Citadel Securities, a separate trading arm, pays Robinhood to execute its users' trades, a practice that has drawn some concern from investor advocates.

The White House has said Yellen is among a handful of officials monitoring the fracas. As head of the Financial Stability Oversight Council (FSOC), Yellen is broadly responsible for the health of the entire trading and investing system.

A sticking point for her to clear, though, may be $700,000 in speaking fees she accepted from Citadel, as recently as last fall. Yellen has pledged not to involve herself in an official capacity in matters involving the firm without first seeking a written waiver from Treasury ethics officials.

Ethics experts say that pledge is not a hard wall for her to scale should the need arise. After ethics violations dogged the Trump administration, some groups are urging Yellen to pre-emptively seek a waiver, and set a precedent.

"This example is a good test of Biden's ethics executive order and the transparency that follows, but it also highlights the revolving door and why restrictions are necessary to protect the integrity of government missions, policies, and programs," said Scott Amey, general counsel at Project On Government Oversight, a nonpartisan government watchdog group.

The Treasury secretary normally does not get involved in matters involving individual stocks and concentrates instead on broad systemic risks to the financial system, which the department monitors through daily market surveillance.

"Secretary Yellen of course will abide by her ethics agreement and ethics pledge in all instances," Treasury spokesman Calvin Mitchell said. He did not indicate how she would approach the specific Citadel issue.

SPEAKING FEES

Like many former government officials, including https://www.reuters.com/article/usa-fed-bernanke/bernanke-enjoys-fruits-of-free-market-with-first-post-fed-speech-idUSL1N0M11FA20140305 her Federal Reserve chair predecessor Ben Bernanke, Yellen took speaking fees from private companies after she left government.

Yellen filed an ethics agreement https://extapps2.oge.gov/201/Presiden.nsf/PAS+Index/18A4D129DD5675888525864F0081071C/$FILE/Yellen,%20Janet%20L.%20final%20EA.pdf 

with the Office of Government Ethics in December saying she would "seek written authorization to participate personally and substantially in any particular matter" related to any companies that paid her speaking fees prior to joining President Joe Biden's administration - for a year after her last speech to each firm.

Yellen spoke several times at Citadel, most recently on an Oct. 27 webinar, according to the filing. She was paid at least $700,000 in speaking fees by the Citadel while she was in private practice at the Brookings Institution think tank, another disclosure 

https://extapps2.oge.gov/201/Presiden.nsf/PAS+Index/C22B882BBDC40AC78525864F008106AB/$FILE/Yellen,%20Janet%20L.%20AMENDEDfinal%20278.pdf shows.

These speaking engagements, which also include financial heavyweights such as Barclays, Citigroup, and Goldman Sachs, are not likely to impact her ability to give Biden broad advice on the stock trading matter, government ethics experts say.

"If this becomes a situation where regulators are considering new rulemaking with Citadel as the poster-child, that's different," said Lisa Gilbert, executive vice president of Public Citizen, a group pushing for stronger financial regulation.

SYSTEMIC RISK

A major question is whether volatility from Gamestop and similar retail investor revolts against short-squeezes boil over into a systemic event that sends markets crashing broadly.

Typically a matter involving an individual stock or equity market trading and brokerages would fall to the Securities and Exchange Commission, which has said it is examining the matter.

On Friday, SEC commissioners including acting chair Allison Herren Lee said in a statement https://www.sec.gov/news/public-statement/joint-statement-market-volatility-2021-01-29 they were closely monitoring the extreme volatility in certain stocks and warned market participants to "uphold their obligations to protect investors and to identify and pursue potential wrongdoing."

Extreme stock price volatility "has the potential to expose investors to rapid and severe losses and undermine market confidence," they added.

Biden's choice to run the SEC, Gary Gensler, awaits Senate hearings.

The FSOC that Yellen chairs is charged with identifying risks and responding to emerging threats to financial stability. It includes the heads of the Federal Reserve and other major U.S. financial regulatory agencies.

It has the authority to designate non-bank financial institutions for consolidated supervision to minimize risk to the financial system or to break up firms that pose a "grave threat."

Distress in individual companies rarely rises to such a level. Treasury maintains daily market surveillance, but it is looking for orderly market functioning and broad systemic threats.

Thus far, the situation looks contained, Barclays said in a note to clients on Friday. Short positions in stocks favored on the Reddit social media site total about $40 billion, which would limit the pain to a handful of hedge funds.

"The ongoing short squeeze in a few stocks by retail investors has raised concerns of a broader contagion. While we believe there is more pain to come, we remain optimistic that it is likely to remain localized," Barclays said.

YELLEN HAS FEW WALL STREET TIES

Unlike many previous Treasury secretaries, Yellen has only worked as an academic and for the government, not at a bank or trading firm.

Richard Painter, a former top ethics lawyer to President George W. Bush, said many Treasury secretaries had a great deal more entanglements that would raise conflict of interest concerns than Yellen.

Henry Paulson, a Republican who was U.S. Treasury secretary during the 2008 financial meltdown, sold half a billion dollars in stock from his former employer Goldman Sachs Group Inc to satisfy ethics concerns. Paulson later forced Goldman and other major banks to take billions of dollars in taxpayer capital at the depth of the financial crisis.

Steven Mnuchin, Yellen's immediate predecessor, pledged https://www.reuters.com/article/us-usa-trump-mnuchin/trumps-treasury-nominee-mnuchin-pledges-to-divest-assets-worth-millions-idUSKBN14V297 after he was nominated to divest $94 million in investments, and refrain from any decisions involving CIT Group until August 2018, when he was due a payment of $5 million from the company.

"Yellen is going to be about as clean as you can get on this stuff," Painter said.

(This story refiles to add in paragraph 3 full company name for Citadel entity that executes Robinhood trades)

(Reporting by Trevor Hunnicutt and David Lawder; Additional reporting by Nandita Bose; Editing by Heather Timmons, Dan Burns, Edward Tobin and Diane Craft)

Originally published Mon., February 1, 2021, 4:02 a.m.