Exclusive: Labor unions end Starbucks boardroom fight after progress on bargaining


Updated Tue, March 5, 2024 
By Svea Herbst-Bayliss

(Reuters) - A coalition of labor unions is ending its boardroom fight at Starbucks after the coffee chain last week agreed to work toward reaching labor agreements, two sources familiar with the matter told Reuters.

The Strategic Organizing Center (SOC), a coalition of North American labor unions, is withdrawing its three director candidates to the coffee chain's 11-member board one week before Starbucks investors were slated to elect directors to oversee corporate strategy at the company's March 13 annual meeting, the sources said, asking not to be named because the discussions are private.

Many large investors told the coalition, which includes the parent of Workers United which represents Starbucks workers, they are optimistic Starbucks is committed to changes and plans to repair its relationship with employees, the sources said.

"Investor concern with the board and management response to ongoing unionization efforts at Starbucks has been loud and clear, but last week's joint announcement from the company and Workers United of a settlement framework was welcome news that we hope means a fundamental change in direction," New York City Comptroller Brad Lander told Reuters.

The fight was closely watched on Wall Street because it marked the first time a labor union used tools traditionally employed by hedge funds to push for board seats at a corporation.

The union coalition argued Starbucks' resistance to unionizing that began in 2021 tarnished the brand and hurt shareholders by weighing on the share price.

This year's other big board room fight is between Disney and two activist investors, Trian Fund Management and Blackwells Capital.

A Starbucks logo on a store in Los Angeles

The coalition hired lawyers, a proxy solicitor and a communications firm who usually work with large activist hedge funds on big campaigns. It nominated three candidates with White House, National Labor Relations Board and economic policy expertise and was pushing ahead in trying to convince shareholders, including big index funds, that Starbucks needs better oversight as it works to repair labor relations.

"SOC Investment Group led an effective campaign with qualified candidates committed to preserving fundamental workers' rights and increasing long-term value, and the announced suspension of a contentious proxy fight is a win for workers and shareholders," Lander added.

He said Starbucks' investors now expect the company "to continue investing in their workforce, and we will continue to be engaged." The city owned $157 million worth, or 1.64 million shares, of Starbucks at the end of December.

While only about 370 U.S. Starbucks stores are unionized, the movement, as well as the proxy fight launched in November, tapped into growing support for organized labor after unions last year won concessions for Hollywood writers and auto workers.

Now the coalition, which did not reach any concessions with the company, is pinning its hopes on last week's news that Starbucks and the union that represents its workers will work to create a "foundational framework" that could lead to collective bargaining agreements and the resolution of lawsuits.

Its decision follows last week's recommendations by the two main proxy advisory firms Institutional Shareholder Services (ISS) and Glass Lewis that urged Starbucks shareholders to back all 11 company directors, arguing the coalition had not sufficiently made its case to win seats.

But ISS wrote that the coalition, "has achieved at least a portion of what it ostensibly set out to accomplish."

(Reporting by Svea Herbst-Bayliss; Editing by Chris Reese)

Starbucks Activists Withdraw Candidates for Board Seats

Crystal Tse
Tue, March 5, 2024 




(Bloomberg) -- An activist group seeking changes at Starbucks Corp. has withdrawn a slate of candidates for the coffee giant’s board, citing progress in improving labor relations at the company.

The Strategic Organizing Center, which advises union pension funds, said Tuesday it withdrew the three candidates it had proposed in a high-profile campaign to add employee representation to the board.

The board challenge by SOC followed a two-year standoff between Starbucks and the union representing about 400 US stores. Tensions eased last week after the two parties agreed to start talks about how to achieve collective-bargaining agreements and provide a fair process for organizing.

SOC said Tuesday that after discussions with other Starbucks investors, “we believe that by and large shareholders are optimistic the company has committed to these changes in good faith and intends to begin to repair its relationship with its workers, which will ultimately enhance performance and shareholder value.”

Starbucks said in an emailed statement that it appreciates SOC’s decision. “Our board’s focus remains on driving long-term value for all stakeholders, including partners, shareholders, customers and farmers,” the company said.

Advisory firms Institutional Shareholder Services and Glass Lewis & Co. last week both counseled Starbucks investors to support the company’s board slate, with Glass Lewis saying Starbucks had “made positive strides to improve its partner relations.”

ISS said that while the company’s initial response to unionization efforts “translated into reputational damage,” SOC hadn’t established a “material link” between that and company underperformance.

ISS added, “It also has to be recognized that the dissident, despite owning only 162 shares, had every right to run this proxy contest, and has achieved at least a portion of what it ostensibly set out to accomplish.”

SOC in November put forward three proposed members of the Starbucks board, saying the company had gone to “historic lengths” to counter employees’ organizing efforts.

--With assistance from Daniela Sirtori-Cortina.

 Bloomberg Businessweek

Mark Zuckerberg Called Out For 'Illegal Practices' and 'Surveillance-Based Ads' As Social Media Sees Continued Hot Water Over Privacy Practices

Caleb Naysmith
Mon, March 4, 2024 

Meta Platforms Inc. (NASDAQ:META) CEO Mark Zuckerberg is again under scrutiny as European consumer organizations take aim at Meta’s alleged illegal practices.

Eight groups from The European Consumer Organisation (BEUC) have raised concerns about Meta’s data collection methods. They allege that the social media giant is facilitating a surveillance-based advertising system, disregarding user privacy and flouting data protection laws.

"With its illegal practices, Meta fuels the surveillance-based ads system, which tracks consumers online and gathers vast amounts of personal data for the purpose of showing them adverts. It is also the main way Meta makes its profits," according to the BEUC.

In November 2023, Meta gave users the choice to pay for an ostensibly ad-free service or consent to the company's full commercial surveillance with ads.

"We introduced this choice, called ‘Subscription for no ads', as our consent solution to comply with a unique combination of connected and sometimes overlapping EU regulatory obligations with differing compliance deadlines," Meta said.

While Meta presented this as a solution to comply with EU regulatory obligations, BEUC deemed it unfair and misleading to users, adding to the mounting criticisms against the tech giant.

These recent filings add to the ongoing scrutiny Meta faces, with previous complaints already lodged against the company for misleading and aggressive practices. Leveraging the General Data Protection Regulation (GDPR) and data protection laws, consumer advocates are intensifying their efforts to hold Meta accountable for its actions.

Meta, the parent company of Facebook, Instagram, WhatsApp and Threads, has incurred many fines from European regulators.

Last year, Meta was fined $1.3 billion for transferring data of users in Europe to the United States as regulators said the company failed to comply with a 2020 decision by the European Union's highest court.

"The unprecedented fine is a strong signal to organizations that serious infringements have far-reaching consequences," said Andrea Jelinek, the chairwoman of the European Data Protection Board.

In addition to that, Meta was also previously fined €390 million ($423.3 million) for forcing users to accept personalized ads as a condition of using Facebook and another €265 million for a data leak.

With 408 million active users in the European Union, regulators are sending a clear message to Meta that serious infringements will have far-reaching consequences.


© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

Spotify calls Apple's €1.84B antitrust fine a 'powerful message,' but cautions that the next steps matter


Sarah Perez
Updated Mon, March 4, 2024 



Spotify is cheering the European Commission's decision to hold Apple accountable for anticompetitive practices in the streaming music market to the tune of a massive €1.84 billion fine, announced today. The streamer called the fine a "powerful message" that sends a signal that even "a monopoly like Apple" is not able to "wield power abusively" to control how other companies interact with their customers.

"Today’s decision marks an important moment in the fight for a more open internet for consumers. The European Commission (EC) has made its conclusion clear: Apple’s behaviour limiting communications to consumers is unlawful," Spotify shared in a statement on its corporate blog.

Despite the EC ruling favoring Spotify and other streamers over Apple, the company was still cautious about how Apple would proceed. The Cupertino tech giant has already promised to appeal the ruling, and Spotify adds that in cases like this, "the details matter."

"Apple has routinely defied laws and court decisions in other markets. So we’re looking forward to the next steps that will hopefully clearly and conclusively address Apple’s long-standing unfair practices," Spotify wrote.

Apple, notably, cleverly worked around the EC's Digital Market Act requirements, meant to foster new competition in the app store market by allowing developers to launch independent app stores and manage their own payments. But Apple's solution was to charge iOS developers accepting its new DMA rules a new, additional fee, the Core Technology Fee, as a means of recouping its lost revenue.

Spotify is likely concerned that Apple will again find a way to sidestep any new requirements, as well, if not carefully spelled out.

The Financial Times had earlier reported that the fine would be around €500 million (about $539 million USD). As it turns out, they had the decision right, but not the price tag.

The ruling follows years of complaints led by Spotify and other smaller streamers, like Deezer, over the App Store's business model and associated rules. In 2019, Spotify first filed its antitrust complaint against the tech giant, which later led to the EU's formal investigation of Apple's App Store announced in 2020. In April of the following year, the EU issued a statement of objections, accusing Apple of distorting competition in the market for streaming services.

Spotify says that Apple's rules "muzzled" it and other streaming music services from communicating with their own customers in their apps about how to upgrade subscriptions, access promotions, discounts and other perks. Apple countered that Spotify doesn't pay Apple anything, but still wants "limitless access to all of Apple's tools."

A part of the issue here is the nature of Apple's App Store commission structure, which charges developers a 15% to 30% commission on subscriptions for digital services, like streaming music, that iOS developers offer to their customers. (In year two, subscriptions drop from 30% to 15%). Spotify argued that Apple's "30% tax" was unfair and that Apple's rules hurt consumers as they prevented developers from informing their app's users about alternative -- and sometimes cheaper -- ways to pay. In other words, Spotify wanted the opportunity to drive customers to its website where they could arguably pay for the subscription directly, which wouldn't involve a commission.

"Spotify pays Apple nothing for the services that have helped them build, update, and share their app with Apple users in 160 countries spanning the globe," Apple stated last month. It also stressed that despite offering subscriptions via its website, Spotify had never lowered its prices. And it noted that Spotify had a 56% share of the music streaming market in Europe, compared with Apple Music's 11% share.

Of course, that's not a fair comparison, given that Spotify offers a free, ad-supported service as well as a paid plan, like Apple's, allowing it to funnel a number of free users into the paid product over time. And, as Apple has repeatedly pointed out, 85% of App Store developers don't pay Apple a fee because they don't offer "digital goods and services" -- a distinction that loses its impact when you think about how services like Uber, Airbnb and others rely on Apple's platform to acquire and sell their offerings to customers.

Following the announcement of the EC's fine, Spotify said the fight was not over.

"Our work will not be done until we succeed in securing a truly fair digital marketplace everywhere and our commitment to helping to make this a reality remains unwavering," it wrote. Spotify CEO Daniel Ek also explored this sentiment in a video post on X, where he added that "Apple has a history of skirting these rules," referring to other cases, like the antitrust order in the Netherlands, where Apple ignored the penalty and allowed the fine to increase for half a year before resolving its concerns.



The Coalition for App Fairness, a lobby group that counts Spotify, Deezer, Epic Games and other app developers as members, also issued a statement in response to the fines.

"Today the European Commission sent a clear message that Apple’s anti-steering policies, which prevent developers from communicating directly with consumers, are anticompetitive and illegal," stated CAF Executive Director Rick VanMeter. "Apple's restrictions on app developers have stifled innovation, driven up prices, and limited consumer choice for far too long. We applaud the Commission for taking this meaningful first step towards bringing competition to iOS devices. However, more needs to be done to truly create a fair and open mobile app ecosystem that benefits consumers and developers. In less than 48 hours the Digital Markets Act will be enforced, and consumers and developers across Europe are relying on the Commission to demand real compliance from Apple and Google to ensure the entire app store ecosystem benefits from the promises of the law," he said.

Epic Games' Tim Sweeney calls out Apple's 'bitter griping' after its EU fine over anticompetitive practices

Sarah Perez
Updated Mon, March 4, 2024


"Denial is a river that flows through Cupertino!," said Epic Games CEO Tim Sweeney, a notorious Apple critic who also sued the tech giant for anticompetitive practices, in a post on X, weighing in on today's news of the European Commission's historic €1.84 billion fine against the iPhone maker. The EC ruling, which favors Spotify, hinges on Apple's approach to its anti-steering clauses that prevented Spotify and other music streamers from directing users to their websites.

Referring to Apple's response to the EC fine, which the company said it would appeal, Sweeney writes, "Apple's bitter griping simply describes their historic, pre-monopoly relationship with app makers: the device provides great APIs, and apps provide great features to attract users. Everyone profits together."

In other words, Apple's App Store was originally seen as a platform that could help the tech giant sell more iPhones, as having easy access to popular apps, like Facebook -- an early App Store partner -- would be a plus for consumers. But over the years, as Apple grew its services business, it pushed app developers to use in-app purchases to monetize their apps by way of sales of virtual goods and subscriptions. As a result, Apple's interest in retaining its cut of these revenues strengthened. Though it made some concessions for small business developers and others, it sees no model for the App Store that doesn't involve a commission structure.

Although Apple did implement an exception to its rules in 2022 for "reader" apps, like music streamers, it still largely controls the process by dictating who can apply for an exception, when it's granted, how the links should appear, how they can be advertised in the app and more.

Sweeney, undoubtedly, was thrilled with the EU's decision, given his own company's fight against the tech giant over similar matters.

Epic Games has long wanted a way to distribute its popular game, Fortnite, to iOS users without having to go through the App Store or pay Apple a commission on any in-app purchases. The game maker sued both Apple and Google for antitrust issues regarding how their app stores are run. It won its battle with Google, which was tried by a jury, but largely lost its case against Apple after the Supreme Court declined to weigh in on the lower court's ruling that found Apple was not a monopoly.

However, Epic Games won on one count in its court battle with Apple, as the district court judge in Northern California ruled that app developers should be able to point their users to links or buttons that connected to their websites, where customers could learn about other ways to pay beyond Apple's in-app purchases.

As required by the court, Apple said it would permit such links, but decided it would still take a 27% commission on those sales -- a move that Epic dubbed a case of "malicious compliance" and one which Sweeney vowed to fight.

Today, he suggested that the EC's decision has relevance to his case in the U.S., as it describes "lawbreaking by Apple."

"In America, the issue is coming before the District Court in Epic v Apple as Epic challenges Apple’s malicious compliance with the court’s anti-steering injunction," Sweeney wrote.

He also retweeted a Business Insider piece by Peter Kafka which points out that the $2 billion fine is actually an $80 billion problem, as investors' reactions to the EU's decision tanked Apple's stock by as much as 3% in the first few hours of trading, equating to some $80 billion in market cap.

Spotify also reacted to the fine today calling it a "powerful message" but cautioned that Apple has a history of skirting regulations meant to hold it accountable. Sweeney also retweeted Spotify CEO Daniel Ek's video message about the fine and his concerns that Apple will find a way to avoid full compliance.

Chinese battery giant CATL looks to set up R&D centres in Hong Kong to underpin technology exports

Sarah Wu
Mon, March 4, 2024 


Sign of Chinese battery maker Contemporary Amperex Technology Ltd (CATL) is seen on its building in Ningde


By Sarah Wu

BEIJING (Reuters) - Chinese battery giant CATL is in discussions to set up research and development centres in Hong Kong to create new technologies that can be licensed abroad and within the industry, its chairman told reporters on Monday.

The potential R&D expansion in Hong Kong aligns with CATL's strategy to place greater emphasis on exporting battery technologies, not just batteries, as Chinese electric vehicles (EVs) and batteries face intensifying scrutiny from foreign governments.

Chairman Robin Zeng, who founded the world's largest battery maker, made the comments ahead of a meeting of China's parliament, the National People's Congress. He is a member of the Chinese People's Political Consultative Conference (CPPCC), a top advisory body of experts, business leaders and representatives from other political parties, which held its opening meeting of the annual gathering on Monday.Some of CATL's licensing attempts abroad have encountered roadblocks. Ford last year announced plans to invest $3.5 billion to build an EV battery plant in Michigan with help from CATL's technology, but the deal has drawn the ire of some U.S. lawmakers.

Meanwhile, concerns about China's clout in the EV battery supply chain have extended to the country's rising status as a vehicle exporter. Exports have been a driving force for growth for automakers in China as demand at home weakens.

The European Commission last year launched a probe into China's EV subsidies.

When asked about European concerns over Chinese overcapacity, Zeng said Europe does not have enough "higher-quality" products yet.

The EU probe does not worry Zeng, who said the EV industry has received "regular support from the government" as China pursues its carbon neutrality goals.

While the European market has seen a slight slowdown, with electric vehicle batteries considered too expensive, more battery plant investments there will enable further growth, Zeng said.

He believes Germany will "catch up very quickly" in electrification and could be asking China for more EVs in a few years.

Earlier this month, the United States opened an investigation into whether Chinese vehicle imports pose national security risks and said it could impose restrictions on "connected" car technology.

Zeng said such concerns were unnecessary and could be resolved through communication.

(Reporting by Sarah Wu; Additional reporting by Brenda Goh and Zhang Yan; Editing by Jacqueline Wong and Susan Fenton)

Hedge Fund Startups On the Rise With Giant Firms Under Scrutiny

Liza Tetley and Nishant Kumar
Mon, March 4, 2024 





(Bloomberg) -- At a Morgan Stanley conference in January at the Breakers luxury resort in Palm Beach, Joshua White was treated like a mini celebrity as his startup hedge fund piqued the interest of attendees.

The founder of London-based Regents Gate Capital, who’s striking out on his own after spending 15 years as portfolio manager at Balyasny Asset Management and Ken Griffin’s Citadel, said he got more than twice the number of requests for meetings at the event than he had time to accommodate all.

The 43-year-old trader’s boutique is among several sprouting across the fiercely competitive $3.5 trillion industry just as some of the multistrategy hedge funds come under scrutiny from clients for their high fees and lackluster gains. Evidence is now emerging that some investors are open to looking at alternatives to these long-dominant jumbo pod shops.

A survey of investors by Barclays Plc released last month found that interest in emerging managers is rising in 2024 after a two-year decline. Another by BNP Paribas SA showed over two-thirds of investors planning to allocate to hedge funds are expected to pursue new relationships rather than adding to existing ones. Almost a third of investors polled by Goldman Sachs Group Inc. deployed their money in at least one new launch last year.

Some of the startups that have successfully raised billions of dollars belong to high-profile traders who previously worked at some of the biggest hedge fund firms. They have mopped up capital from external investors, their former employers, other pod shops or a combination. Some are even spinning out funds they already ran at big money managers.

Millennium Management trader Diego Megia is soon expected to kick off his own operation with a $5 billion pool, with Millennium chipping in with $3 billion. Another alum Priya Kodeeswaran started trading on March 1 at his Katamaran Capital with money from Brummer & Partners AB. Citadel money managers Jonas Diedrich and Dave Sutton also raised close to $2 billion last year for their Ilex Capital Partners.

That is inspiring others like White, who started trading for his fundamental market neutral strategy at Regents Gate with internal money last October. He expects to launch with clients’ money in the second half of 2024.

“Seeing others succeed in raising significant capital gave me the confidence to launch a new fund,” he said in an interview.

There are more examples. Kamil Szynkarczuk, a top portfolio manager at LMR Partners, is being backed by the firm with $200 million. Others like Nat Dean, a partner and senior portfolio manager at London-based Capula Investment Management, are spinning out with the fund they are already running.

Fierce War

Multistrategy, multimanager hedge funds such as Citadel, Izzy Englander’s Millennium, Steve Cohen’s Point72 Asset Management and Balyasny typically deploy numerous teams of traders across strategies, attracting investors looking for steady gains.

To stay on top, they engage in a fierce war for talent, paying top dollar to poach star traders from each other. They even go after those who plan to start or run their own successful strategies, often trying to convince them to join the firms instead.

Read More: Hedge Funds at War for Top Traders Dangle $120 Million Payouts

The strategy has worked for some hedge funds but it has also meant high fees for clients. At a time returns are diminishing and 10-year US treasuries are yielding more than 4%, investors are starting to question the merit of staying with underperformers and locking their capital for years.

Clients received only 41 cents of every $1 made last year by multistrategy funds that passed on all their costs to investors via fees and other charges. There are also strict lock-ups — it could take as long as five years for investors to redeem fully from Millennium. When performance is good, few ask questions. But with the average multimanager only achieving a return marginally above the risk-free rate last year, scrutiny is building.

That’s making some investors take a closer look at their allocations.

Some respondents in the BNP Paribas survey questioned whether liquidity and fees justify the returns. Goldman’s report showed investor interest in the big pod shops peaked in 2023 and may now be waning. About 16% of those surveyed said they plan to allocate to multistrategy managers in 2024, down from 31% the year before. Meanwhile, more allocators said they plan to pull cash from the strategy this year than in 2023.

“Fees have gone higher and lock-ups have gone longer,” said James Medeiros, president at Investcorp-Tages, an alternative investment manager that oversees roughly $4 billion including seeding capital. “There is a higher level of scrutiny.”

Yet demand for a select few of the largest players remains strong, with many even closed to fresh cash. Startups like White’s still face a challenging capital raising environment. But the data shows green shoots are emerging even though new launches in 2023 lingered near record lows for the second straight year.

New launches rose last year in the Americas, the world’s biggest market, according to Goldman’s data. While volumes were lower, 2023 saw a record in average launch size. Startups worldwide raised an average of more than $300 million, 65% above the long-term trend and 14% more than the prior year. Goldman also pointed to higher survival rates among funds launched post-2018.

Some of the recent startups have also shown they can raise cash and generate the kind of returns investors desire.

Distressed and special situations fund Shiprock Capital Management, launched in January last year with $80 million, has seen its assets swell to over $300 million, spurred by 32% gains last year. Former Credit Suisse star trader Hamza Lemssouguer’s Arini Credit Master Fund made 32% last year, with firm-wide assets growing to $3.7 billion.

“We are at the tip of the spear in terms of a reverse migration,” Medeiros at Investcorp-Tages said, adding traders now have a choice.

One sign of that trend is Sean Gambino, who once produced an average annual return of 18.6% at his fund Heron Bay before moving to Eisler Capital in 2022 as fundraising got tough. In January, he reversed that decision and announced setting up Baypointe Partners, saying his approach doesn’t fit the tight risk limits of a multistrategy platform and he’s better off alone.

“Two years ago, our sole option was to migrate to a platform, but times have changed,” he said.

Most Read from Bloomberg Businessweek

INDIA OCCUPIED KASHMIR
India sees $4.95 billion investment for natural gas network in Kashmir, northeast

KASHMIR IS INDIA'S GAZA

Mon, March 4, 2024 
By Nidhi Verma

NEW DELHI (Reuters) - India expects investment of about 410 billion rupees ($4.95 billion) from companies to build natural gas pipeline infrastructure in its northeastern states and northern federal territories of Kashmir and Ladakh, a minister said on Monday.

India, one of the world's biggest emitters of greenhouse gases, is seeking to boost the use of cleaner fuel to cut its carbon emissions and has set a 2070 goal for net zero carbon emissions.

Prime Minister Narendra Modi is targeting raising the share of natural gas in India's energy mix to 15% by 2030 from the current 6.2%. Natural gas, while still a fossil fuel, emits less CO2 than coal.

"The envisaged natural gas infrastructure development in north-east states would also lead to better utilisation of domestic gas being produced locally in the region," Oil Minister Hardeep Singh Puri told reporters.

India invited bids in October for licences to supply natural gas to small industries, automobiles and households in five northeastern states - Nagaland, Manipur, Meghalya, Sikkim, and Arunachal Pradesh - and the northern union territories of Kashmir and Ladakh. Oil Minister Puri on Monday awarded licences to winners.

City gas distribution (CGD) network will cover the entire northeastern region by end of 2025, said Anil K Jain, chairman of the Petroleum and Natural Gas Regulatory Board(PNGRB) told a news conference.

State-run Bharat Petroleum Corp and Hindustan Petroleum Corp have a licence to set up a CGD network in one northeastern state each. Northeast-focused explorer Oil India also won a licence for setting up a CGD in two areas in separate tie ups with Bharat Petroleum and Hindustan Petroleum.

Jain said building of pipeline network will also help in monetising surplus gas from the blocks operated by Oil India and Oil and Natural Gas Corp in the northeastern states.

($1 = 82.8690 Indian rupees)

(Reporting by Nidhi Verma; Writing by Shivam Patel; editing by David Evans)

Two arms are better than one for robot dressers, says researcher

Aine Fox, PA Social Affairs Correspondent
Mon, 4 March 2024



A two-armed robot to help someone get dressed could make the process more comfortable for the person receiving care and free up time for stretched staff, a researcher has said.

Dr Jihong Zhu, a robotics researcher at the University of York’s Institute for Safe Autonomy, has been testing a two-armed assistive dressing scheme, which he said has not been attempted in previous research.

It is suggested the approach could be more effective and comfortable than the current one-armed machines designed to help an elderly person or a person with a disability get dressed.

Dr Zhu said: “We know that practical tasks, such as getting dressed, can be done by a robot, freeing up a care worker to concentrate more on providing companionship and observing the general wellbeing of the individual in their care.

“It has been tested in the laboratory, but for this to work outside of the lab we really needed to understand how care workers did this task in real-time.”

His team used a method called learning from demonstration, meaning a human could demonstrate the movement and the robot would learn that action, as opposed to an expert being needed to programme it.

He said: “It was clear that for care workers two arms were needed to properly attend to the needs of individuals with different abilities.

“One hand holds the individual’s hand to guide them comfortably through the arm of a shirt, for example, whilst at the same time the other hand moves the garment up and around or over.

“With the current one-armed machine scheme a patient is required to do too much work in order for a robot to assist them, moving their arm up in the air or bending it in ways that they might not be able to do.”

Care England, representing social care providers across the country, said robotics can have a role in the sector but cannot replace “relationship-based care”.

Chief executive Professor Martin Green said: “With significant staff shortages in the care sector there will be increasing emphasis on finding new and innovative ways of supporting people.

“Robotics will have their place, but it must be the choice of the individual as to whether or not they want some of their care to be undertaken by robots.

“We must also acknowledge that robots can never replace relationship-based care which relies on people-to-people contact and connection.”

Caroline Abrahams, charity director at Age UK, welcomed scientific research into robotics and other technologies to support people who need help, but said that while future innovations might work alongside or even replace some of the work of human beings “we are clearly a long way from that right now”.

She said: “It’s not just that the technology needs to develop further, it’s also that it has to be manufactured in a way that keeps down the cost.

“Given that social care is, however unfairly, a low wage occupation, it’s hard to see the economics working out to allow the wholesale expansion of technology within the next few years, even if it proves possible to develop it to the degree of sophistication required.

“Some policymakers have opined that robotics are set to solve the social care workforce crisis but if so, it’s unlikely to happen any time soon.

“Today’s care workers therefore don’t need to worry about robots replacing them and, in any event, the kindness and human touch they offer is really precious and highly valued by many people who benefit from good personal care.”

Dr Zhu said the next step in their research will be to test the robot’s safety limitations such as ensuring it can be stopped or changed mid-action “and whether it will be accepted by those who need it most”.

He added: “Trust is a significant part of this process.”

Researchers said their work was in collaboration with researchers from Delft University of Technology in the Netherlands and was funded by the Honda Research Institute Europe.

 Humanoids at Amazon Provide Glimpse of Automated Workplace

 Mar 4, 2024

Employees at an Amazon.com Inc. warehouse near Seattle recently witnessed a glimpse of the future of work—a 5-foot-9-inch robot named Digit.

Developed by Agility Robotics Inc., Digit is designed for a specific task: picking up empty yellow bins from a shelf and transporting them to a conveyor.

Although still in the testing phase, Digit represents a significant technological advancement and places Agility Robotics at the forefront of efforts to create robots that can collaborate with human workers.

Agility Robotics, based in Tangent, Oregon, has practical goals, aiming to produce 10,000 robots annually for deployment in warehouses and storerooms worldwide, Bloomberg reported.

 

Amazon Unveils Humanoid Robot 'Digit' At Warehouse: A Glimpse Into Automated Workspaces

Benzinga News


Amazon.com Inc (NASDAQ:AMZN) has introduced a humanoid robot, ‘Digit,’ at a warehouse near Seattle, offering a glimpse into the potential future of work.

What Happened: The 5-foot-9-inch robot, developed by Agility Robotics Inc., is designed to perform a repetitive task of moving empty yellow bins from a shelf to a conveyor, reported Bloomberg on Sunday.

Although Digit is still in the testing phase, it represents a significant technological advancement. Agility Robotics, based in Tangent, Oregon, aims to produce 10,000 robots annually and deploy them in warehouses and storerooms worldwide.

The technology that powers Digit, including affordable and powerful motors and batteries, computer vision, and artificial intelligence, has led to a surge in investment in humanoid robots. Startups in this emerging field have collectively raised approximately $1.6 billion in venture capital over the past five years.

See Also: Elon Musk Sues Sam Altman And OpenAI For ‘Refining AGI’ To Maximize Profits For Microsoft: ‘Stark Betrayal Of Founding Agreement’

Agility’s humanoid robots, already in testing, have attracted attention from industry giants. In 2022, Amazon invested in the startup, which has raised $180 million to date. Amazon’s interest in robotics dates back to its acquisition of Kiva Systems Inc., a pioneer in the logistics industry, in 2012.

Why It Matters: The introduction of humanoid robots in the workplace is a significant development in the ongoing debate about the impact of automation on jobs. A recent MIT study suggested that the rate of transformation due to AI might be slower than expected, as it is still not economically feasible for companies to replace employees with AI systems. However, the rise of humanoid robots in the workplace could potentially challenge this notion.

Furthermore, the introduction of humanoid robots in the workplace is not unique to Amazon. China has also unveiled plans to mass-produce humanoid robots by 2025, with the aim of reshaping the world. This trend suggests that the use of humanoid robots in the workplace is not just a technological advancement but also a potential shift in the global labor market.

As the use of AI and robotics in the workplace continues to grow, it raises questions about the future of work and the potential impact on employment. This trend is also evident in other industries, such as the fast-food industry’s adoption of AI to address staffing shortages.

NYCB Ballooned Despite Real Estate Warnings in Years Before Fall




Max Abelson
Mon, March 4, 2024 

(Bloomberg) -- The mood was practically giddy when the heads of two regional banks hosted a town hall in the spring of 2021.

The industry’s long drought in mergers was ending, and two lenders below the public’s radar, New York Community Bancorp and Flagstar, were poised to become more formidable by joining forces.

“I look at it as a blank page,” NYCB’s Thomas Cangemi said. “I call it a Picasso that we’re going to paint together.”

Three years later, the lender known for catering to New York City landlords is in serious trouble. Last week, it revealed major weaknesses in its ability to monitor risks and replaced Cangemi as CEO with the second fiddle at that town hall, Flagstar’s Sandro DiNello. Investors are worried the new boss will set aside even more money to cover souring loans, on top of a $552 million hit that shocked the market in January. Credit raters have slashed it to junk and its shares have cratered 73% this year.

How NYCB got here is a tale of percolating financial risks, changing rules and shifting regulators. New rent restrictions became law in 2019, but instead of acknowledging a hit to its loan book, the bank got bigger. Back-to-back acquisitions, first Flagstar and then parts of Signature Bank, almost doubled the firm's size and set it on a collision course with new rules for banks holding more than $100 billion of assets.

The crash came this year. Amid regulatory pressure, NYCB bolstered reserves and shareholders unloaded its stock.

It's a story with broad implications: Legions of rivals are under pressure to merge so they can afford to make the jump from street-corner branch networks to tech-driven financial services. But it's a perilous moment for the industry. High interest rates and cracks in commercial real estate are eroding the value of assets on balance sheets. Depositors are able to pull cash faster than ever. Shareholders have learned to dump stocks at the first sign of serious trouble.

Indeed, NYCB was a stock-market darling before it announced plans in late January to horde cash.

“Everything was going well, and all of a sudden — bingo — you have a day like that,” said Michael Manzulli, once the chairman of the bank’s board. “And you go: ‘Wow.’”

Some longtime fans have remained loyal. After the bank bolstered reserves, Mark Hammond, who ran Flagstar through the financial crisis and is the son of its founder, was optimistic enough to snatch up NYCB’s hobbled stock. In an interview last month, he pooh-poohed the “paranoia” about real estate. Then last week’s disclosures sent the stock down an additional 43%.

Spokespeople for the bank didn’t respond to requests for comment. The firm has said that it doesn’t expect the weaknesses in its controls to result in changes to its allowance for credit losses. And commercial real estate veterans say that when loans do sour, lenders have broad latitude to work out solutions with borrowers. In early February, the company said depositors had entrusted more money to the bank this year.

NYCB started off small, before a former teller landed on a big strategy.

Six decades ago, Joseph Ficalora, the grandson of Sicilian immigrants, joined Queens County Savings Bank. Coming back from the Vietnam War, he didn’t take his father’s advice to get a union job in sanitation, instead enrolling in a management training program at the bank. He quickly climbed the ranks. By the time the firm changed its name to New York Community Bank in 2000, he’d already been running the place for years.

Ficarola’s strategy was straightforward. He bought rivals, preserved their identities to appeal to mom-and-pop depositors and loaned their savings to Manhattan real estate investors. His sweet spot was multifamily apartment buildings with rents controlled or stabilized. While tenants could be relied on to stick around and keep cash flowing, many landlords adopted a more lucrative approach, fixing up buildings to take advantage of rules allowing them to raise rents.

By 2004, he had cobbled together seven banks into the third-biggest thrift in the US. As it hit $23 billion of assets, up from $1.9 billion in three years, he could brag about watching 35 rival branches disappear from just one spot in Flushing.

NYCB was just getting started. It bought $11 billion of assets from the failed AmTrust Bank in 2009 and $2.2 billion of deposits from Aurora Bank in 2012. Yet a proposal to get even bigger by buying Astoria Bank fell apart in 2016, with analysts suggesting that regulators may have balked. That year, NYCB rewarded its boss handsomely with unusually lucrative perks.

Around that time, a Queens reporter asked Ficalora about the secret of his success, eliciting a quick answer: “Always be an asset to your boss, never a threat.” But in late 2020, the bank surprised investors by announcing Ficalora would be stepping down just three days later. Cangemi, the longtime chief financial officer, would replace him.

If there was any ill will, it didn’t show in a recent photo: Ficalora, who was named the Associazione Culturale Italiana di New York’s Man of the Year in 2018, stood smiling near his successor when Cangemi got the honor last year.

Cangemi took over a bank facing hurdles. In 2019, New York renters won sweeping new protections that stopped landlords from raising rents on regulated apartments. Owners were outraged, and their banks found themselves under pressure. NYCB’s loan portfolio was almost all mortgages, mostly multifamily, and most of those subject to New York rent rules.

The pandemic triggered more stress. When offices emptied and companies pared their square footage, it spelled yet more trouble for the industry's bankers.

But the pain didn’t show up right away. Despite predictions that the new rent rules would lead to losses for landlords and their lenders, NYCB’s level of troubled loans hovered near record lows in 2020 and 2021, perhaps helped by rock-bottom interest rates and the government’s pandemic response. Cangemi chalked it up to careful lending — its “unprecedented track record of strong asset quality, which goes back over 50 years.”

One person who worked on risk around that time, asking not to be identified discussing internal operations, said regulators had long harped on the bank’s concentration in multifamily lending. But the response wasn’t always receptive. An executive was so gruff with regulators during a meeting that a colleague held a sidebar with the officials to make sure they weren’t offended, the person said.

The lender has long taken pride in its track record. NYCB has bragged that aside from some ill-fated taxi medallion loans its average losses over the past three decades amount to about 0.04% of its loan book each year, while the figure is almost 20 times higher for rivals in a key index.

Without evident loan losses, Cangemi could focus on the itch to grow. He lamented at the town hall that getting hung up on an earlier transaction had left the firm in “a very difficult spot.”

Things loosened around the end of 2020, when Huntington Bancshares Inc., M&T Bank Corp. and Webster Financial Corp. unveiled plans to swallow rivals.

Cangemi and DiNello soon announced their deal, too. Flagstar was the Midwest’s biggest publicly owned savings bank and one of the country’s largest residential mortgage servicers, but its history wasn’t pretty.

It was founded by Tom Hammond, who’d moved to Detroit from Nebraska with fond memories of hitchhiking to bird havens with his uncased shotgun. He boasted of bagging most of the game available in Alaska, the mountains of Europe and the South Pacific.

Flagstar got bagged, too. The bank was pummeled so badly during the global financial crisis that it was rescued by private equity firm MatlinPatterson Global Advisers. In the years that followed, the bank scrambled to clean up its act.

Flagstar agreed in 2012 to pay $133 million to settle a US lawsuit accusing the bank of submitting false documents to insure ineligible loans. A year later the bank reached a deal to pay $110 million to settle accusations from MBIA Inc. that it falsely represented the quality of loans. A $121.5 million settlement with Fannie Mae followed, and the Consumer Financial Protection Bureau ordered the bank to stop illegally blocking attempts by borrowers to save their homes.

“When I got there, the bank was a train wreck,” said David Wade, who joined in 2013 and left last year as a senior mortgage underwriter. “Things had just gotten so bad.”

But for 2021, DiNello could brag of “exceptionally successful” earnings. Things were so good that Wade and his colleagues didn’t understand the direction of the takeover when it was announced that April. “In fact, initially, a lot of us were thinking this was a Flagstar acquisition, not the other way around,” Wade said. “It was a while before we realized, well, those guys actually have more money than us.”

For years, community groups had pushed the banks and their regulators to support underserved tenants. Then, during the merger talks, something behind the scenes caught the groups’ attention.

In April 2022, the banks announced they’d want to operate under a national bank charter, meaning they’d no longer need to win approval from the Federal Deposit Insurance Corp. The Association for Neighborhood & Housing Development, a nonprofit founded in 1974, was suspicious.

“They were unable to secure the necessary approvals from their regulator at the FDIC, and are now going through another regulator in the hopes that they will be more favorable,” the group wrote to regulators a few months later. “How is NYCB able to do this?”

The Office of the Comptroller of the Currency eventually approved the deal, with a condition: The right to approve dividends through this November.

Once the deal closed, it was quickly followed by another — a partial takeover of rival Signature after its collapse. Both fed NYCB new customers and sticky accounts. The moves also helped ease its reliance on multifamily lending, which fell to 46% in early 2023 from 55% at the end of the year.

Even so, the old headaches in Washington and New York hadn’t disappeared. Investors were trying to measure the impact of $2.7 trillion in commercial real estate loans held by US banks as values tumbled and borrowers stared down sky-high interest rates.

And the takeovers had catapulted NYCB’s assets past $100 billion, triggering more rigorous regulation. Federal watchdogs taking a look could see that the bank’s new peers had more capital and deeper reserves for souring losses. Its top risk and audit executives exited their posts quietly.

Read More: NYCB’s Talks With Watchdog Led to Moves That Rocked Market

NYCB shocked shareholders and analysts with a one-two punch on Jan. 31. Its provision for loan losses jumped 10 times more than expected as the bank flagged trouble with a pair of loans for a co-op and office space. It slashed its quarterly dividend 70%.

“It’s like when you have a car that you love and you sell it to somebody, and you see them a year later and they’ve just torn it all up and not taken care of it,” said Wade, the former senior mortgage underwriter.

A week later, Moody’s Investors Service cited governance challenges and financial risks when it cut its credit to junk. Last week, Moody’s cut it even further.

At the 2021 town hall, DiNello and his counterpart didn’t show much anxiety about the future. “We laugh about it,” Cangemi said, according to a transcript filed with regulators. “We’re not going to go backwards. We’re going to go forward.”

But DiNello had the last word. “We’ve got to take all of this talk, all this opportunity that we envision, and we got to make it happen,” he said. “We’re all going to look back on this in the next few years and we’re going to think: ‘Wow.’”

--With assistance from Hannah Levitt, Katanga Johnson, Bre Bradham, Diana Li, Jennifer Surane and Steve Dickson.

Former Twitter CEO sues Elon Musk

Amanda Silberling
Mon, March 4, 2024 

Image Credits: Bryce Durbin / TechCrunch

Another day, another lawsuit involving Elon Musk. Four former Twitter executives, including ex-CEO Parag Agrawal, sued Musk on Monday, alleging that they're owed over $128 million in severance payments.

When Musk bought Twitter (now X), one of his very first moves as the company's owner was to fire Agrawal, CFO Ned Segal, and lawyers Sean Edgett and Vijaya Gadde. According to the lawsuit, Musk has a "special ire" toward these former executives, who worked hard to hold Musk to his $44 billion commitment when he tried to back out. The lawsuit quotes Walter Isaacson's biography of Elon Musk, which quotes Musk as saying he would "hunt every single one" of Twitter's C-suite "till the day they die."

Musk has been a vocal critic of Gadde in particular, who was involved in several high-profile content moderation decisions on Twitter. After putting in his bid to buy Twitter, he posted memes mocking the executive, which sparked a wave of racist online attacks against her.

It's not just these executives who haven't gotten their severance pay. Musk has faced several lawsuits from former Twitter employees who are also waiting for a check. Under Musk's ownership, the company has stopped paying rent on some of its offices, which has led to even more lawsuits and evictions.

According to the lawsuit, Musk claimed that these executives committed "gross negligence" and "willful misconduct" in their termination letters, but never was able to show evidence of his allegations.

"This is the Musk playbook: to keep the money he owes other people, and force them to sue him," the lawsuit reads. "Even in defeat, Musk can impose delay, hassle, and expense on others less able to afford it."


Twitter's former CEO and other execs are suing Elon Musk and X for $128 million in unpaid severance

The group says Musk “made up a fake cause” for their firing to avoid paying them.


Karissa Bell
·Senior Editor
Mon, March 4, 2024 


Anadolu via Getty Images

A group of former Twitter executives, including former CEO Parag Agrawal, are suing Elon Musk and X over millions of dollars in unpaid severance benefits. The claims date back to the chaotic circumstances surrounding Musk’s takeover of the company in October 2022.

When Musk took control of the company, his first move was to fire Agrawal, CFO Ned Segal, chief legal officer Vijaya Gadde and general counsel Sean Edgett. According to the lawsuit, Musk had “special ire” for the group because of the role they played in the months-long court battle that forced Musk to follow through with the acquisition after he attempted to back out of the deal. According to the lawsuit, Agrawal is entitled to $57.4 million in severance benefits, Segal is entitled to $44.5 million, Gadde $20 million and Edgett $6.8 million, for a total of about $128 million.

The lawsuit cites Musk biographer Walter Isaacson’s account of the events, which explains that Musk rushed to close the Twitter deal a day early so he could fire the executives “for cause” just before their final stock options were set to vest. According to Isaacson, Musk bragged that the legal maneuver saved him about $200 million.

“Musk doesn’t pay his bills, believes the rules don’t apply to him, and uses his wealth and power to run roughshod over anyone who disagrees with him,” the lawsuit states,“Because Musk decided he didn’t want to pay Plaintiffs’ severance benefits, he simply fired them without reason, then made up fake cause and appointed employees of his various companies to uphold his decision.”

X didn’t respond to a request for comment on the lawsuit. Of note, it’s not the first time former Twitter employees have sued the company for failing to pay severance benefits. A separate lawsuit claimed Twitter owed former workers more than $500 million in unpaid severance. Agrawal, Segal and Gadde also previously sued the company over unpaid legal bills as a result of shareholder lawsuits and other investigations that resulted from Musk’s takeover,

Former Twitter execs sue Elon Musk for over $128 million in severance

Reuters
Updated Mon, March 4, 2024 

FILE PHOTO: Tesla CEO and X owner Elon Musk in Paris

(Reuters) -Four former top Twitter executives, including former CEO Parag Agrawal, have sued Elon Musk for over $128 million in combined unpaid severance, according to a lawsuit filed on Monday.

The lawsuit, filed in federal court in San Francisco, is the latest in a series of legal challenges the billionaire faces after he acquired the social media company for $44 billion in October 2022 and later renamed it X.

The other plaintiffs are Ned Segal, Twitter's former chief financial officer; Vijaya Gadde, its former chief legal officer; and Sean Edgett, its former general counsel.

Mere minutes after Musk took control of Twitter, the former executives say they were fired and that Musk falsely accused them of misconduct and forced them out of Twitter after they sued the billionaire for attempting to renege on his offer to purchase the company.

Musk then denied the executives severance pay they had been promised for years before he acquired Twitter, according to the lawsuit. The plaintiffs say they each are owed one year's salary and hundreds of thousands of stock options.

"This is the Musk playbook: to keep the money he owes other people, and force them to sue him," the former executives said in the 39-page lawsuit.

X is already facing a pair of proposed class actions claiming it owes rank-and-file workers who were laid off after Musk's acquisition at least $500 million in severance, and a third lawsuit by six former senior managers making similar claims. X has denied wrongdoing.

The company has also been sued previously for failing to pay its former public relations firm, landlords, vendors and consultants.

X did not respond to a Reuters request for comment.

(Reporting by Sourasis Bose in Bengaluru, Sheila Dang in Dallas and Daniel Wiessner in Albany, New York; Editing by Shounak Dasgupta and Aurora Ellis)