Boeing board strips CEO of chairman title amid 737 MAX crisis
(Reuters) - Boeing Co’s (BA.N) board has stripped chief executive Dennis Muilenburg of his chairmanship title, in an unexpected strategy shift announced by the U.S. planemaker on Friday only hours after a global aviation panel criticized development of the troubled 737 MAX.
Separating the roles, which will enable Muilenburg to have “maximum focus” on steering daily operations, was the latest step the board has taken in recent weeks to improve executive oversight of its engineering ranks and industrial operations.
Lead Director David Calhoun, a senior managing director at Blackstone Group, will takeover as non-executive chairman, Boeing said in its announcement, which came late on Friday afternoon without warning. It added that the board had “full confidence” in Muilenburg, who will retain the top job and remain on the board.
The decision came as Boeing struggles to get its best-selling 737 MAX back into service following a worldwide safety ban in March triggered by two crashes that killed a total of 346 people in Ethiopia and Indonesia.
It also comes some six months after Muilenburg survived a shareholder motion to split his chairman and CEO roles, part of the intense pressure he has faced during the worst crisis of his four years at the helm of the world’s largest planemaker.
“This decision is the latest of several actions by the board of directors and Boeing senior leadership to strengthen the company’s governance and safety management processes,” the company said.
INTENSE SCRUTINY
Earlier on Friday, an international aviation panel criticized U.S. regulators and Boeing over the certification of the plane.
An internal review in August revealed that the company was working to reorganize its engineering reporting lines company-wide and ensure higher ranking officials, including its CEO, get faster feedback about potential safety concerns from lower levels of the company.
As part of the move, Muilenburg received granular weekly reports of potential safety issues discussed at meetings of rank-and-file engineers.
It also plans to name a new director with deep safety experience and expertise to serve on the board and its newly created Aerospace Safety Committee in the near term, Boeing said.
Muilenburg is set to testify before a U.S. House panel on Oct. 30 and lawmakers have raised questions about Boeing’s actions prior to the 737 MAX certification. Federal prosecutors aided by the FBI, the Transportation Department Inspector General and several blue-ribbon panels are investigating the plane’s approval.
The company is also facing more than 100 lawsuits over the crashes alleging design flaws allowed erroneous sensor data to set off an automated anti-stall system and overwhelm pilots.
MORE DELAYS
Earlier this week, Reuters reported that a key certification test flight would likely not take place until at least Nov. 1, a move that will push its approval to resume flights until at least December.
On Friday, United Airlines Holdings Inc (UAL.O) became the latest U.S. airline to say it would not resume 737 MAX flights until January.
Shareholder advisory firms Institutional Shareholder Services Inc and Glass Lewis had urged Boeing to split the role of chairman and CEO in April, saying shareholders would benefit from a robust form of independent oversight.
Muilenburg is set to testify before a U.S. House panel on Oct. 30. Lawmakers have raised questions about Boeing’s actions prior to the 737 MAX certification.
FAA failed to properly review 737 MAX jet's anti-stall system: JATR findings
WASHINGTON/SINGAPORE (Reuters) - A panel of international air safety regulators on Friday harshly criticized the U.S. Federal Aviation Administration’s (FAA) review of a safety system on Boeing’s (BA.N) 737 MAX airliner later tied to two crashes that killed all 346 people aboard.
The Joint Authorities Technical Review (JATR) was commissioned by the FAA in April to look into the agency’s oversight and approval of the so-called MCAS anti-stall system.
The report also faulted Boeing for assumptions it made in designing the airplane and found areas where Boeing could improve processes.
“The JATR team found that the MCAS was not evaluated as a complete and integrated function in the certification documents that were submitted to the FAA,” the 69-page series of findings and recommendations said.
“The lack of a unified top-down development and evaluation of the system function and its safety analyses, combined with the extensive and fragmented documentation, made it difficult to assess whether compliance was fully demonstrated.”
Boeing did not directly address the report’s findings but said it “is committed to working with the FAA in reviewing the recommendations and helping to continuously improve the process and approach used to validate and certify airplanes.”
Regulators around the world continue to scrutinize proposed software changes and training revisions from Boeing aimed at returning the Boeing 737 MAX to service.
Boeing’s top-selling airplane has been grounded worldwide since a March 10 crash in Ethiopia killed 157 people, five months after a Lion Air 737 MAX crashed in Indonesia, killing 189 people on board.
Major U.S. airlines including Southwest Airlines Inc (LUV.N) and American Airlines Inc (AAL.O) currently do not expect 737 MAX flights to resume before January.
The JATR draft recommendations, obtained by Reuters ahead of their release on Friday, also said the FAA’s longstanding practice of delegating “a high level” of certification tasks to manufacturers such as Boeing needs significant reform to ensure adequate safety oversight.
“With adequate FAA engagement and oversight, the extent of delegation does not in itself compromise safety,” the report said.
“However, in the B737 MAX program, the FAA had inadequate awareness of the MCAS function which, coupled with limited involvement, resulted in an inability of the FAA to provide an independent assessment of the adequacy of the Boeing-proposed certification activities associated with MCAS.”
The report also questioned FAA’s limited staffing to oversee certification tasks it designated to Boeing and said there were an “inadequate number of FAA specialists” involved in the certification of the 737 MAX.
There were signs that Boeing employees conducting FAA work faced “undue pressure. ..which may be attributed to conflicting priorities and an environment that does not support FAA requirements,” it said.
FAA Administrator Steve Dickson said in a statement he would look at the panel’s recommendations and take appropriate action following the “unvarnished and independent review of the certification of the Boeing 737 MAX.”
MCAS UNDER SCRUTINY
The U.S. planemaker has stopped short of admitting any fault in how it developed the 737 MAX, or MCAS, which repeatedly pushed the plane’s nose down in the Indonesian and Ethiopian crashes while the pilots struggled to intervene.
However, it has said erroneous Angle of Attack (AOA) data fed to MCAS - the Maneuvering Characteristics Augmentation System - was a common link in two wider chains of events leading to the crashes.
Slideshow (2 Images)
The JATR report recommended the FAA review the stalling characteristics of the 737 MAX without MCAS and associated systems to determine if unsafe characteristics exist and if so, if a broader review of the system design was needed.
JATR said MCAS and those systems could be considered a stall identification or stall protection system, depending on how the aircraft handled without them.
Boeing has said MCAS was not meant to prevent stalls and was instead designed so that the 737 MAX would have similar handling characteristics to its predecessor, the 737 NG.
The European Union Aviation Safety Agency (EASA) last month said it planned to undertake flight tests of the 737 MAX including a test without MCAS to check its performance during high-speed turns and stall.
Boeing is revising the 737 MAX software to require the MCAS system to receive input from both AOA sensors, and has added additional safeguards. If the AOA sensors differ by 5.5 degrees or more then MCAS cannot operate, FAA Deputy Administrator Dan Elwell said last month.
If MCAS does operate it can only operate once unless the problem had been “completely resolved,” he added.
The JATR is headed by Christopher Hart, former chairman of the National Transportation Safety Board (NTSB), and includes air safety regulators from the United States, Canada, China, Indonesia, European Union, Brazil, Australia, Singapore, United Arab Emirates and Japan.
Last month, Hart said it was important to note “the U.S. aviation system each day transports millions of people safely, so it’s not like we have to completely overhaul the entire system, it’s not broken. But these incidents have shown us that there are ways to improve the existing system.”
Sunday, October 13, 2019
Scientists endorse mass civil disobedience to force climate action
Matthew Green
LONDON (Reuters) - Almost 400 scientists have endorsed a civil disobedience campaign aimed at forcing governments to take rapid action to tackle climate change, warning that failure could inflict “incalculable human suffering.”
Julia Steinberger, an ecological economist at Britain's University of Leeds, endorses mass civil disobedience to pressure governments to tackle climate change at a protest at London's Science Museum, Britain October 12, 2019. Louise Jasper/Handout via REUTERS
In a joint declaration, climate scientists, physicists, biologists, engineers and others from at least 20 countries broke with the caution traditionally associated with academia to side with peaceful protesters courting arrest from Amsterdam to Melbourne.
Wearing white laboratory coats to symbolize their research credentials, a group of about 20 of the signatories gathered on Saturday to read out the text outside London’s century-old Science Museum in the city’s upmarket Kensington district.
“We believe that the continued governmental inaction over the climate and ecological crisis now justifies peaceful and non-violent protest and direct action, even if this goes beyond the bounds of the current law,” said Emily Grossman, a science broadcaster with a PhD in molecular biology. She read the declaration on behalf of the group.
“We therefore support those who are rising up peacefully against governments around the world that are failing to act proportionately to the scale of the crisis,” she said.
The declaration was coordinated by a group of scientists who support Extinction Rebellion, a civil disobedience campaign that formed in Britain a year ago and has since sparked offshoots in dozens of countries.
The group launched a fresh wave of international actions on Monday, aiming to get governments to address an ecological crisis caused by climate change and accelerating extinctions of plant and animal species.
A total of 1,307 volunteers had since been arrested at various protests in London by 2030 GMT on Saturday, Extinction Rebellion said. A further 1,463 volunteers have been arrested in the past week in another 20 cities, including Brussels, Amsterdam, New York, Sydney and Toronto, according to the group’s tally. More protests in this latest wave are due in the coming days.
While many scientists have shunned overt political debate, fearing that being perceived as activists might undermine their claims to objectivity, the 395 academics who had signed the declaration by 1100 GMT on Sunday chose to defy convention.
“The urgency of the crisis is now so great that many scientists feel, as humans, that we now have a moral duty to take radical action,” Grossman told Reuters.
Other signatories included several scientists who contributed to the U.N.-backed Intergovernmental Panel on Climate Change (IPCC), which has produced a series of reports underscoring the urgency of dramatic cuts in carbon emissions.
“We can’t allow the role of scientists to be to just write papers and publish them in obscure journals and hope somehow that somebody out there will pay attention,” Julia Steinberger, an ecological economist at the University of Leeds and a lead IPCC author, told Reuters.
“We need to be rethinking the role of the scientist and engage with how social change happens at a massive and urgent scale,” she said. “We can’t allow science as usual.”
Extinction Rebellion’s flag is a stylized symbol of an hourglass in a circle, and its disruptive tactics include peacefully occupying bridges and roads.
The group has electrified supporters who said they had despaired at the failure of conventional campaigning to spur action. But its success in paralyzing parts of London has also angered critics who complained the movement has inconvenienced thousands of people and diverted police resources.
Extinction Rebellion is aligned with a school strike movement inspired by Swedish teenage activist Greta Thunberg, which mobilized millions of young people on Sept. 20. It hopes the scientists’ support for the urgency of its message and its embrace of civil disobedience will bolster its legitimacy and draw more volunteers.
The group said more than half the signatories of the declaration are experts in the fields of climate science and the loss of wildlife. Although British universities and institutes were well represented, signatories also worked in countries including the United States, Australia, Spain and France.
Reporting by Matthew Green; Editing by Frances Kerry
HOBBS, N.M. (Reuters) - New Mexico oil man Johnny Vega laid out his predicament as his crew hoisted pipes from a well during the biggest oil boom in U.S. history.
FILE PHOTO: Oil field worker, Miguel Holguin, operates a swabbing rig
The son of a Mexican guestworker, Vega cannot find enough legal workers to meet demand for his oil well service rigs.
There is no shortage of Hispanic and Latino immigrant workers without work permits he could hire in Lea County, New Mexico - the No.2 oil-producing county in the United States.
But Vega says he wants to play by the rules, not least because of a heightened risk of company audits by U.S. Immigration and Customs Enforcement (ICE) under President Donald Trump. As a result, he has equipment that could be generating $700,000 a month standing idle in his yard.
“They’re demanding more rigs, more swabbing units, but you don’t have enough employees,” said Vega, who runs Mico Services with around $17 million in annual revenues. “It’s a lack of a system to get legal workers, to have more of a workforce to pull from.”
Employers like Vega in the Permian Basin oilfields of New Mexico and Texas say they feel caught between Trump’s support for their industry and his policies focused on tougher immigration enforcement.
It’s a dilemma faced in other sectors of the U.S. economy that depend on foreign workers after ICE reported surges of between 300% to 750% in worksite investigations, audits and arrests in fiscal year 2018.
Visas for temporary jobs in sectors like agriculture and hospitality have increased during the Trump administration. Oil companies complain of difficulties gaining work permits for immigrant oil workers, who do not qualify for these temporary visas.
The Permian Basin, by far the most productive oil field in the United States, has helped make the country a net exporter of oil. Its output growth has recently slowed, but production is still at all time highs.
The number of rigs drilling for oil in New Mexico hit a record 115 in early October and labor shortages are felt most keenly in service companies like Vega’s that help keep the oil flowing.
The Permian Basin is short 15,000 workers, with demand met by paying overtime and shipping workers in and out, according to data from the Permian Strategic Partnership alliance of 19 energy companies.
DANGEROUS JOBS
Thousands of immigrants, mainly from neighboring Mexico, have thronged to the decade-long boom. They often fill the hardest and most dangerous jobs few Americans want, such as using heavy equipment to lift oil well tubing or lay pipeline.
For Bob Reid, immigrants provide a solution to labor shortages and a chance for boom-bust oil towns like Hobbs, New Mexico to build a more stable future.
“The problem is a broken system that’s preventing them from coming in legally in a way that allows them to pursue a path to citizenship,” said Reid, head of the JF Maddox Foundation, a Hobbs charity.
In Lea County, Hispanics and Latinos now account for as much as 70 percent of the population, compared with 40 percent 20 years ago, based on county school enrollment and other data.
About two years ago, ICE stepped up operations in the Permian area, according to Lea County employers.
“I know people, my peers, that have been hit by immigration audits, and they were told, specifically, that the Permian Basin was targeted because of the vast amount of workers that were coming here,” said Finn Smith, president of Hobbs-based Watson Hopper Inc.
ICE did not respond to requests for comment on its Permian operations.
Two companies in Hobbs, the largest city in Lea County, were recently audited: Mesa Well Services and paving contractor Ramirez & Sons, according to a person with knowledge of the situation and a Ramirez & Sons official.
Mesa Well officials were not available for comment. Ramirez & Sons Senior Superintendent David Gallegos said the company was paying around $40,000 in legal fees to apply for work permits or U.S. citizenship on behalf of five of the employees laid off after the audit.
“They’re worth fighting for,” said Gallegos, a Republican New Mexico state representative, of the “long term” employees who had bought homes in the area.
ICE operations, and Trump’s threats of raids, have left many immigrants in Lea County fearful. Some bolt from job sites at rumors of ICE activity, said Maria Romano of New Mexico-based immigrant rights group Somos Un Pueblo Unido.
More companies are using the government’s E-Verify immigration background checks to vet new hires, said Romano, whose organization helps immigrants get on a pathway to citizenship.
‘VERY DIFFICULT HERE’
“It’s now getting very difficult here for anyone who isn’t documented,” said Juan, an unemployed pipeline worker who immigrated to the United States illegally 11 years ago. He asked that his last name not be used to protect his identity.
About a third of all immigrants in New Mexico and Texas lack valid working papers, according to a Pew Research Center study based on 2016 U.S. census data.
Hobbs Mayor Sam Cobb says he is frustrated by the failure of political leaders at the national level to create a pathway to citizenship for immigrants he generally finds hardworking and law abiding.
“The very people who have suffered from that are the people who are here growing our community, adding to the economic welfare of the community,” said Cobb, a Democrat, sitting in his office surrounded by paintings of oil wells and cowboys.
Yet plenty of employers in Lea County still hire undocumented workers.
“What we do is we don’t ask,” said Lorena, a Mexican immigrant whose family has built up a small oil field services business. She estimated that more than 90% of her employees were Mexican immigrants and that only 5% to 10% had genuine working papers. Her last name was not used to protect her identity.
Vega’s labor woes are pushing him to reorient his oil well service business toward hiring out his equipment.
“We have to rely on some of these immigrants, in this neck of the woods, to produce the workforce that we’re needing,” said Vega, who said he supports Trump “100%” but wishes he would “tone down” his rhetoric against immigrants. “Why not allow them to be documented?”
Reporting By Andrew Hay in Hobbs, New Mexico; Additional reporting by Gary McWilliams in Houston; Editing by Bill Tarrant and Daniel Wallis
Rising old used car prices help push poor Americans over the edge
FREEPORT, Ill. (Reuters) - For America’s working poor, an often essential ingredient for getting and keeping a job – having a car – has rarely been more costly, and millions of people are finding it impossible to keep up with payments despite prolonged economic growth and low unemployment.
More than 7 million Americans are already 90 or more days behind on their car loans, according to the New York Federal Reserve, and serious delinquency rates among borrowers with the lowest credit scores have by far seen the fastest acceleration.
The seeds of the problem are buried deep in the financial crisis, when in the midst of the worst economic downturn since the Great Depression, automakers slashed production. A decade later, that has made a relative rarity of used 10-year-old vehicles that are typically more affordable for low-wage earners.
According to data provided to Reuters by industry consultant and car shopping website Edmunds, the average price of that vintage of vehicle is $8,657, still nearly 75% higher than in 2010 despite some softening in prices over the last year. The average new car, in contrast, has seen a price rise of 25% in that same time period.
“This is pinching people at the worst point possible,” said Ivan Drury, Edmunds’ senior manager of industry analysis. “If you need basic A to B transportation, you have to get an older car that needs more repairs and has more wear-and-tear issues.”
Monthly auto payments for Americans making under $40,000 have remained flat since 2017, while those in higher wage brackets have seen their payments rise, according to a Cox Automotive Inc analysis for Reuters.
On the face of it, this might seem like good news. But to Cox chief economist Jonathan Smoke, it indicates poorer Americans are stretched so thin they cannot afford to pay more.
“They just don’t have any flexibility to increase their payment,” Smoke said.
Weak lending standards in recent years are partly to blame for the rising delinquency rates, which Warren Kornfeld, a senior vice president on Moody’s financial institutions team, said are approaching record highs despite a solid economy.
Auto lenders are belatedly tightening lending standards, but it may already be too late, he said.
“The economy is masking the true performance of auto loans,” Kornfeld said. “If we hit a downturn today, the performance of auto loans would not look very good.”
Research from the New York Fed earlier this year showed that while delinquency rates among borrowers with high credit scores have remained steady and low, for subprime borrowers they have been rising, pushing up the overall delinquency rate. Around 8% of loans originated by lower-score buyers with a credit score below 620 were categorized as seriously late, “a development that is surprising during a strong economy and labor market,” Fed researchers wrote.
‘HARD TO MAKE ENDS MEET’
Like many Americans, for Hollis Heyward no car means no job. The 30-year-old father of two makes $10 an hour working at a warehouse in Freeport, a rural town of 25,000 about 115 miles (185.07 km) northwest of Chicago.
Heyward can only get to work by car.
In the midst of a divorce, all he could afford was a gray 2005 Pontiac Grand Prix with close to 200,000 miles on it, which he bought for $1,300 cash - a fraction of the average new car price.
Suddenly also stuck paying off the loan on his future ex-wife’s car, Heyward had to rework the loan with local used-car dealer Gordy Tormohlen of Good People Automotive. Under his “workout” deal, Heyward is paying the loan’s principal only and Tormohlen has waived the interest payments. Heyward’s monthly payment is now around $120 per month, down from around $350 before the workout.
“Right now, it’s hard to make ends meet,” said Heyward. “But I am not the kind of guy to walk away from my commitments.”
Tormohlen, 59, a second-generation dealer, said his business is up 10% this year as auto finance companies tighten lending standards. He said the market feels like it did before the financial crisis hit in 2008, when consumers were over-extended with debt.
“Americans have grown too comfortable with debt and the time has come to pay the piper,” he said.
Tormohlen is a “Buy Here, Pay Here” dealer, offering subprime loans that he finances himself at 19%, which is higher than a bank but lower than many finance companies.
He said he can work directly with struggling customers like Heyward, whom he has known for a decade, but worries that large finance companies with tens or hundreds of thousands of borrowers will be in deep trouble when a downturn hits.
Indeed, according to the New York Fed, more than 1 million more Americans are behind on their car loans now than at the peak of delinquencies in 2010 after the financial crisis.
“The big lenders who do not know their customers are going to have a problem when the economy turns,” Tormohlen says.
“LIVE BEYOND YOUR MEANS”
Expensive older used cars are exacerbating the problem and it may take years for them to return to more affordable levels.
George Augustaitis, director of automotive industry analytics at CarGurus Inc (CARG.O), an online marketplace for new and used cars, said late this spring his team started to notice an “accelerating decline” in the number of available vehicles under $10,000, which typically would include vehicles between eight and 12 years old.
In an analysis for Reuters, CarGuru’s data shows a falling share of inventory of Great Recession-era cars, while the number of online “leads” from consumers seeking those vehicles has remained steady.
In fact, the average American car is the oldest on record, according to IHS Markit, and CarGurus’ Augustaitis said the available inventory of vehicles costing under $10,000 will not return to more normal levels until 2022, reflecting rising car production after the Great Recession.
Ken Shilson, president of the National Alliance of Buy Here, Pay Here Dealers (NABD), said American consumers have become too comfortable with debt and subprime customers have been “poisoned” by easy access to capital for much of the long economic expansion. But he added those customers will be forced by tighter underwriting to seek even older vehicles.
“The American way is to always live beyond your means and Americans aren’t good at making life adjustments,’ Shilson said. “But there’s a reality check coming and many subprime buyers will be forced to find more affordable transportation.”
Reporting By Nick Carey; Editing by Dan Burns and Andrea Ricci
\
FREEPORT, Ill. (Reuters) - For America’s working poor, an often essential ingredient for getting and keeping a job – having a car – has rarely been more costly, and millions of people are finding it impossible to keep up with payments despite prolonged economic growth and low unemployment.
More than 7 million Americans are already 90 or more days behind on their car loans, according to the New York Federal Reserve, and serious delinquency rates among borrowers with the lowest credit scores have by far seen the fastest acceleration.
The seeds of the problem are buried deep in the financial crisis, when in the midst of the worst economic downturn since the Great Depression, automakers slashed production. A decade later, that has made a relative rarity of used 10-year-old vehicles that are typically more affordable for low-wage earners.
According to data provided to Reuters by industry consultant and car shopping website Edmunds, the average price of that vintage of vehicle is $8,657, still nearly 75% higher than in 2010 despite some softening in prices over the last year. The average new car, in contrast, has seen a price rise of 25% in that same time period.
“This is pinching people at the worst point possible,” said Ivan Drury, Edmunds’ senior manager of industry analysis. “If you need basic A to B transportation, you have to get an older car that needs more repairs and has more wear-and-tear issues.”
Monthly auto payments for Americans making under $40,000 have remained flat since 2017, while those in higher wage brackets have seen their payments rise, according to a Cox Automotive Inc analysis for Reuters.
On the face of it, this might seem like good news. But to Cox chief economist Jonathan Smoke, it indicates poorer Americans are stretched so thin they cannot afford to pay more.
“They just don’t have any flexibility to increase their payment,” Smoke said.
Weak lending standards in recent years are partly to blame for the rising delinquency rates, which Warren Kornfeld, a senior vice president on Moody’s financial institutions team, said are approaching record highs despite a solid economy.
Auto lenders are belatedly tightening lending standards, but it may already be too late, he said.
“The economy is masking the true performance of auto loans,” Kornfeld said. “If we hit a downturn today, the performance of auto loans would not look very good.”
Research from the New York Fed earlier this year showed that while delinquency rates among borrowers with high credit scores have remained steady and low, for subprime borrowers they have been rising, pushing up the overall delinquency rate. Around 8% of loans originated by lower-score buyers with a credit score below 620 were categorized as seriously late, “a development that is surprising during a strong economy and labor market,” Fed researchers wrote.
‘HARD TO MAKE ENDS MEET’
Like many Americans, for Hollis Heyward no car means no job. The 30-year-old father of two makes $10 an hour working at a warehouse in Freeport, a rural town of 25,000 about 115 miles (185.07 km) northwest of Chicago.
Heyward can only get to work by car.
In the midst of a divorce, all he could afford was a gray 2005 Pontiac Grand Prix with close to 200,000 miles on it, which he bought for $1,300 cash - a fraction of the average new car price.
Suddenly also stuck paying off the loan on his future ex-wife’s car, Heyward had to rework the loan with local used-car dealer Gordy Tormohlen of Good People Automotive. Under his “workout” deal, Heyward is paying the loan’s principal only and Tormohlen has waived the interest payments. Heyward’s monthly payment is now around $120 per month, down from around $350 before the workout.
“Right now, it’s hard to make ends meet,” said Heyward. “But I am not the kind of guy to walk away from my commitments.”
Tormohlen, 59, a second-generation dealer, said his business is up 10% this year as auto finance companies tighten lending standards. He said the market feels like it did before the financial crisis hit in 2008, when consumers were over-extended with debt.
“Americans have grown too comfortable with debt and the time has come to pay the piper,” he said.
Tormohlen is a “Buy Here, Pay Here” dealer, offering subprime loans that he finances himself at 19%, which is higher than a bank but lower than many finance companies.
He said he can work directly with struggling customers like Heyward, whom he has known for a decade, but worries that large finance companies with tens or hundreds of thousands of borrowers will be in deep trouble when a downturn hits.
Indeed, according to the New York Fed, more than 1 million more Americans are behind on their car loans now than at the peak of delinquencies in 2010 after the financial crisis.
“The big lenders who do not know their customers are going to have a problem when the economy turns,” Tormohlen says.
“LIVE BEYOND YOUR MEANS”
Expensive older used cars are exacerbating the problem and it may take years for them to return to more affordable levels.
George Augustaitis, director of automotive industry analytics at CarGurus Inc (CARG.O), an online marketplace for new and used cars, said late this spring his team started to notice an “accelerating decline” in the number of available vehicles under $10,000, which typically would include vehicles between eight and 12 years old.
In an analysis for Reuters, CarGuru’s data shows a falling share of inventory of Great Recession-era cars, while the number of online “leads” from consumers seeking those vehicles has remained steady.
In fact, the average American car is the oldest on record, according to IHS Markit, and CarGurus’ Augustaitis said the available inventory of vehicles costing under $10,000 will not return to more normal levels until 2022, reflecting rising car production after the Great Recession.
Ken Shilson, president of the National Alliance of Buy Here, Pay Here Dealers (NABD), said American consumers have become too comfortable with debt and subprime customers have been “poisoned” by easy access to capital for much of the long economic expansion. But he added those customers will be forced by tighter underwriting to seek even older vehicles.
“The American way is to always live beyond your means and Americans aren’t good at making life adjustments,’ Shilson said. “But there’s a reality check coming and many subprime buyers will be forced to find more affordable transportation.”
Reporting By Nick Carey; Editing by Dan Burns and Andrea Ricci
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REACTIONARY WHITE SNOWFLAKE STUDENTS DECRY BEING TOLD THEY HAVE PRIVILEGE BY BOOK BURNING
A Cuban-American author canceled her speaking event on diversity at a Georgia university after students were filmed burning her book
Frank Olito
A Cuban-American author canceled her speaking event on diversity at a Georgia university after students were filmed burning her book
Frank Olito
Jennine Capo Crucet cancelled her second speaking engagement. Cindy Ord/ Getty
At Georgia Southern University in Statesboro, Cuban-American author Jennine Capo Crucet gave a speech about diversity and white privilege.
One student asked if she had "the authority to address issues of race and white privilege on campus," which prompted an angry exchange amongst students in the auditorium.
Crucet later learned that students were filming themselves burning her book on campus.
The author decided to cancel her second speaking engagement at the university.
Visit Insider's homepage for more stories.
Jennine Capo Crucet, a Cuban-American author, canceled her second speaking event at Georgia Southern University in Statesboro after her first talk was interrupted by an angry exchange among students. The author later learned that students were burning her book on campus.
Crucet was on campus Wednesday to talk about diversity and to read from her book "Make Your Home Among Strangers," which was assigned as mandatory reading for all freshmen students. The book follows a Cuban-American student as she acclimates to an elite college environment.
At her talk on Wednesday, a white student stood up and asked if Crucet had "the authority to address issues of race and white privilege on campus," according to a statement the author released.
"I noticed that you made a lot of generalizations about the majority of white people being privileged," the student asked, according to the school newspaper, The George-Anne. "What makes you believe that it's okay to come to a college campus, like this, when we are supposed to be promoting diversity on this campus, which is what we're taught. I don't understand what the purpose of this was."
The questions prompted students to yell at each other from across the auditorium.
"I came here because I was invited and I talked about white privilege because it's a real thing that you are actually benefiting from right now in even asking this question," Crucet responded over students' shouts.
After the event, Crucet learned that students were burning her book on campus. Another student tweeted at the author, writing, "Are you usually that racist or are you putting on a front to promote your pointless and shitty book at my college? Work on your ignorance and racism toward white people."
—elaina⭐️ (@elainaaan) October 10, 2019
Georgia Southern spokeswoman Jennifer Wise told the Daily Mail that the students will not be disciplined, as they were exercising their first amendment rights.
In response, Crucet canceled the second speech she was expected to give.
"This book began as an act of love and an attempt at a deeper understanding," Crucet said in her statement. "I hope that GSU can act from the same place and work to affirm the humanity of those students who might understandably feel unsafe in the aftermath of the event and the book burning and that the campus continues the difficult and necessary conversation that began in that auditorium."
At Georgia Southern University in Statesboro, Cuban-American author Jennine Capo Crucet gave a speech about diversity and white privilege.
One student asked if she had "the authority to address issues of race and white privilege on campus," which prompted an angry exchange amongst students in the auditorium.
Crucet later learned that students were filming themselves burning her book on campus.
The author decided to cancel her second speaking engagement at the university.
Visit Insider's homepage for more stories.
Jennine Capo Crucet, a Cuban-American author, canceled her second speaking event at Georgia Southern University in Statesboro after her first talk was interrupted by an angry exchange among students. The author later learned that students were burning her book on campus.
Crucet was on campus Wednesday to talk about diversity and to read from her book "Make Your Home Among Strangers," which was assigned as mandatory reading for all freshmen students. The book follows a Cuban-American student as she acclimates to an elite college environment.
At her talk on Wednesday, a white student stood up and asked if Crucet had "the authority to address issues of race and white privilege on campus," according to a statement the author released.
"I noticed that you made a lot of generalizations about the majority of white people being privileged," the student asked, according to the school newspaper, The George-Anne. "What makes you believe that it's okay to come to a college campus, like this, when we are supposed to be promoting diversity on this campus, which is what we're taught. I don't understand what the purpose of this was."
The questions prompted students to yell at each other from across the auditorium.
"I came here because I was invited and I talked about white privilege because it's a real thing that you are actually benefiting from right now in even asking this question," Crucet responded over students' shouts.
After the event, Crucet learned that students were burning her book on campus. Another student tweeted at the author, writing, "Are you usually that racist or are you putting on a front to promote your pointless and shitty book at my college? Work on your ignorance and racism toward white people."
—elaina⭐️ (@elainaaan) October 10, 2019
Georgia Southern spokeswoman Jennifer Wise told the Daily Mail that the students will not be disciplined, as they were exercising their first amendment rights.
In response, Crucet canceled the second speech she was expected to give.
"This book began as an act of love and an attempt at a deeper understanding," Crucet said in her statement. "I hope that GSU can act from the same place and work to affirm the humanity of those students who might understandably feel unsafe in the aftermath of the event and the book burning and that the campus continues the difficult and necessary conversation that began in that auditorium."
The NBA faces a billion-dollar crisis over one executive's tweet about Hong Kong. Here's why China is so hard for Western brands to break into.
Alexandra Ma
A composite image of NBA Commissioner Adam Silver, a now-withdrawn Tiffany & Co. ad campaign, and Versace chief creative officer Donatella Versace. All of these brands have courted Chinese consumers' anger in recent months. Jonathan Bachman/Getty Images; Dolce & Gabbana/Instagram; Evan Agostini/Invision via APThe NBA this week became the latest in a slew of foreign brands who have landed in hot water in China.
Dozens of Western brands have angered Chinese consumers with their marketing or public statements, and many still appear to be struggling to learn their lesson at high costs.
Though the mistakes range from apparently racist ad campaigns to a failure to represent China's perceived borders, it all boils down to one fundamental misstep, experts told Business Insider — a lack of respect.
"People underestimate what the Chinese consumer feels and thinks," said Fenella Barber, founder of Bao business-relations advisory. "We assume from the West that this authoritarian state is sitting heavy on China [...] there's just more to the debate than that."
The NBA faces a billion-dollar crisis in China as all of the league's partners in the country suspended their ties over Houston Rockets General Manager Daryl Morey's tweet in support of the Hong Kong protesters, and basketball fans threatened to boycott its games.
The league is learning what many Western brands have in recent years — that China is an immensely difficult market to cater for.
In recent months, a slew of companies from Dolce & Gabbana to Marriott International have had to apologize to Chinese consumers — for reasons from displaying maps that exclude Chinese-claimed territories, to showing seemingly racist ads — or risk losing billions of dollars in revenue.
Chinese shoppers sit in front of the designer Miu Miu store in Beijing in
August 2015. Kevin Frayer/Getty
Some of those apologies have failed to stick, however. D&G, once a popular brand among China's middle class, has suffered from weak sales in the country for months after the fashion house depicted a Chinese model struggling to eat Italian food with chopsticks in a November 2018 ad campaign.
Business Insider spoke to two experts to understand why China is such a fragile market, and why so many Western brands still appear to be struggling in the country. Both declined to directly discuss Chinese politics due to the sensitive nature of their work.
'It's about respecting your market'
Here are some examples of how brands have landed in hot water in China in the past year alone:
D&G's ad campaign last year appeared to mock Chinese culture. Amid the backlash a woman also published screenshots appearing to show co-founder Stefano Gabbana making racist comments about Asians.
Brands including Versace, Swarovski, and Calvin Klein referred to Hong Kong, Macau, and Taiwan as Chinese territories. (Hong Kong and Macau are semi-autonomous Chinese cities. Taiwan is a self-governing island which China claims as its own.)
Tiffany & Co published an ad campaign that depicted a Chinese model striking a pose similar to a symbol of the Hong Kong protests. Though the company said the photograph was shot in May — before the protests even began — the campaign was released in October, at the height of the tensions.
All of these cases show one fundamental misstep done by the brands, Chinese consumer experts say: They all appeared to show a lack of respect and knowledge of the country's culture and politics.
Some of those apologies have failed to stick, however. D&G, once a popular brand among China's middle class, has suffered from weak sales in the country for months after the fashion house depicted a Chinese model struggling to eat Italian food with chopsticks in a November 2018 ad campaign.
Business Insider spoke to two experts to understand why China is such a fragile market, and why so many Western brands still appear to be struggling in the country. Both declined to directly discuss Chinese politics due to the sensitive nature of their work.
'It's about respecting your market'
Here are some examples of how brands have landed in hot water in China in the past year alone:
D&G's ad campaign last year appeared to mock Chinese culture. Amid the backlash a woman also published screenshots appearing to show co-founder Stefano Gabbana making racist comments about Asians.
Brands including Versace, Swarovski, and Calvin Klein referred to Hong Kong, Macau, and Taiwan as Chinese territories. (Hong Kong and Macau are semi-autonomous Chinese cities. Taiwan is a self-governing island which China claims as its own.)
Tiffany & Co published an ad campaign that depicted a Chinese model striking a pose similar to a symbol of the Hong Kong protests. Though the company said the photograph was shot in May — before the protests even began — the campaign was released in October, at the height of the tensions.
All of these cases show one fundamental misstep done by the brands, Chinese consumer experts say: They all appeared to show a lack of respect and knowledge of the country's culture and politics.
A screenshot from a Tiffany & Co ad campaign, which featured a Chinese model striking a pose similar to that used in the Hong Kong protests. The company has since removed the ad campaign. Tiffany & Co.
The majority of Chinese consumers are patriotic and willing to punish people who mock them — like consumers in any other country would be, said Fenella Barber, the founder of Bao Advisory, a business-relations advisory based in London and Shanghai.
"They're [Chinese people] proud of where they've come to," Barber told Business Insider, referring to the country's economic and social development into a superpower. "If they feel put down for whatever reason by a foreign company, they're quite happy to jump on the bandwagon."
"But where they [companies] are targeting the money and they do bad advertising, and to be honest, that's just a lack of respect," she said, referring to the D&G ad. "They haven't really understood the market and they've done a pastiche of China in some way and expect that to work. That's just — really?"
A Dolce & Gabbana ad campaign in November 2018 showed a model
eating traditional Italian food with chopsticks. Dolce & Gabbana/Instagram
The Chinese government has also weighed in on some of these controversies in the past — the Chinese Consulate in Houston criticized Morey's tweet, for example — but most of these brands had been rowing back their comments to appease consumers, rather than the Communist Party.
China's leaders and citizens are particularly sensitive about issues of sovereignty — like Hong Kong, Macau, and Taiwan's perceived place in the country — and many foreign brands have had to issue apologies highlighting their respect for China's borders.
"[Sovereignty] is incredibly important to the Chinese people [...] so to have someone else be flippant about it" is particularly offensive to them, Barber said.
"Chinese soft power might not work well internationally, but it works very well at home," she added.
Read more: China is waging war against a cafe because it served coffee to Taiwan's president
—Norman Hermant (@NormanHermant) October 7, 2019
"You cannot separate politics and culture any more than you can anywhere else," Domenica di Lieto, CEO of digital marketing agency Emerging Comms, told Business Insider.
"For example, Brexit is a political, legal, business, and social story that incorporates a range of views from other sides, with many based on inherent beliefs. People have to respect that."
"It's not really political, it's about respect," she added. "It's about respecting your market and your consumers and understanding them, and understanding the motivation, and being very clear that you understand them."
Barber added: "I think people underestimate what the Chinese consumer feels and thinks. They're not all put upon. I think we assume from the West that this authoritarian state is sitting heavy on China — I think there's just more to the debate than that."
Di Lieto noted, however, that public criticism of brands who have shown apparent disrespect to consumers isn't unique to China. Last year, BECCA Cosmetics received widespread criticism on Twitter after people accused it of darkening a white model's skin tone to demonstrate the deeper shades.
The Chinese government has also weighed in on some of these controversies in the past — the Chinese Consulate in Houston criticized Morey's tweet, for example — but most of these brands had been rowing back their comments to appease consumers, rather than the Communist Party.
China's leaders and citizens are particularly sensitive about issues of sovereignty — like Hong Kong, Macau, and Taiwan's perceived place in the country — and many foreign brands have had to issue apologies highlighting their respect for China's borders.
"[Sovereignty] is incredibly important to the Chinese people [...] so to have someone else be flippant about it" is particularly offensive to them, Barber said.
"Chinese soft power might not work well internationally, but it works very well at home," she added.
Read more: China is waging war against a cafe because it served coffee to Taiwan's president
—Norman Hermant (@NormanHermant) October 7, 2019
"You cannot separate politics and culture any more than you can anywhere else," Domenica di Lieto, CEO of digital marketing agency Emerging Comms, told Business Insider.
"For example, Brexit is a political, legal, business, and social story that incorporates a range of views from other sides, with many based on inherent beliefs. People have to respect that."
"It's not really political, it's about respect," she added. "It's about respecting your market and your consumers and understanding them, and understanding the motivation, and being very clear that you understand them."
Barber added: "I think people underestimate what the Chinese consumer feels and thinks. They're not all put upon. I think we assume from the West that this authoritarian state is sitting heavy on China — I think there's just more to the debate than that."
Di Lieto noted, however, that public criticism of brands who have shown apparent disrespect to consumers isn't unique to China. Last year, BECCA Cosmetics received widespread criticism on Twitter after people accused it of darkening a white model's skin tone to demonstrate the deeper shades.
People hold up their phones to record fireworks during China's National Day celebrations in Beijing on October 1, 2019. This year also marked the 70th anniversary of the founding of the People's Republic of China. Aly Song/ReutersThe Chinese are buying on their own terms now
The Chinese market can bring huge revenues — mainland consumers spent 170 billion yuan ($23 billion) on luxury goods alone in 2018, according to consultancy giant Bain & Company — but it's also one of the trickiest to capture.
Foreign brands can no longer operate on the belief that just because their campaigns work in the West, they will in China too, both experts said.
"For a long time, people were happy to buy Western products or a Western idea," Barber said. "That's not necessarily true anymore. In China's case, things are changing, and the nuances haven't necessarily changed within the Western businesses' mindset."
"China doesn't like to be seen as a cash cow," she added.
"China wants to be welcomed into the world and its people want to be given respect. The other thing that's often misunderstood is that Chinese don't necessarily want to buy into the whole American, Westernized dream, and the West is quite slow to catch on to that."
Di Lieto also said: "For years Chinese consumers have been very patient with Western companies that have benefitted hugely from their income while not always giving appropriate consideration to their culture."
But now, Barber says, "the Chinese are patriotic, nationalistic, happy to come down strong on a Western company if they upset the national image."
Read more: The NBA has already felt 'economic impact' from Daryl Morey's pro-Hong Kong tweet — here all the moves that have been made by China
The Chinese are huge shoppers: Here, packages await delivery at an unnamed distribution center in the country ahead of Singles' Day, the country's version of Black Friday. VCG/Getty Images
Foreign brands are learning — at huge costs — that the speed and method of rowing back comments are affecting their market.
The NBA risked billions of dollars in advertising and broadcasting rights not after Morey deleted his tweet and distanced the team and league from his views, but after Commissioner Adam Silver defended Morey's right to freedom of expression.
Di Lieto said: "A lot of crises escalate because of a lack of apology by the right person with the right sentiment, and there's no point in an apology that sounds like you're just reading off a script either," she added.
"Chinese consumers will see straight through that. The same applies in all countries."
"If the market is important to a company, and where the money is really big it should be ... [that] you just need to tread a bit more carefully and not to treat it so lightly, to give the time and attention to do things properly," Barber added.
Houston Rockets GM Daryl Morey. Bob Levey/Getty Images
Some brands have foregone the Chinese markets to make a political stand, though.
After Beijing banned "South Park" from the country's internet over an episode that addressed government censorship, the comedy show's writers show issued a mock apology and wrote a new episode in which character Randy Marsh says: "F--- the Chinese government.
Some brands have foregone the Chinese markets to make a political stand, though.
After Beijing banned "South Park" from the country's internet over an episode that addressed government censorship, the comedy show's writers show issued a mock apology and wrote a new episode in which character Randy Marsh says: "F--- the Chinese government.
Read more:
Here's a timeline of Activision Blizzard's terrible week, as it faces fan protests after an esports athlete was punished for voicing support for Hong Kong
Kevin Webb
"Hearthstone" player Blitzchung launched an international controversy after
he called for the liberation of "Hong Kong" in a post-match interview. Invent Global
A vocal group of fans are boycotting Activision Blizzard after the company punished an esports competitor who spoke out in support of the protests in "Hong Kong.'
Chung Ng Wai, the esports competitor better known as Blitzchung, shouted "Liberate Hong Kong, revolution of our age" in Chinese amid a post-match interview at a Blizzard-sponsored "Hearthstone" tournament in Taiwan on October 5.
Blizzard responded by stripping Blitzchung of his prize money and barring him from "Hearthstone" competitions for one year. Blizzard said Blitzchung's comments had violated the competition rules by damaging the company's image. It later walked back the punishment, reducing it down to 6 months.
Critics have accused the California-based studio of prioritizing its relationship with China instead of protecting free speech — something it denied in a statement issued on Friday night.
The controversy has the potential to spill over into BlizzCon, Blizzard annual fan convention scheduled for November 1st. A group called Fight for the Future plans to organize a protest at the event, to be held in Anaheim, California.
Activision Blizzard is dealing with a fan revolt and intense public scrutiny after punishing Blitzchung — a Hong Kong-based esports competitor who voiced support for Hong Kong's protesters during a Blizzard-run event on October 5.
Blitzchung, whose real name is Chung Ng Wai, is a grandmaster-level player in "Hearthstone," Blizzard's very popular digital card game.
During Blizzard's official broadcast of the Asia-Pacific Grandmasters competition, Blitzchung appeared in a post-match interview wearing a gas mask. As the broadcast ended, Blitzchung shouted "Liberate Hong Kong, revolution of our age," with the apparent support of the two tournament broadcasters.
Blizzard responded to Blitzchung's comments on October 8 by stripping him of about $3,000 in prize money he had already earned for the tournament, and barred him from "Hearthstone" competitions for one year. Blizzard also said it would no longer work with the two broadcasters who were interviewing Blitzchung during his comments. The company deleted the match and interview footage from its official channels as well.
In the blog post announcing Blitzchung's ban, Blizzard said "we stand by one's right to express individual thoughts and opinions," but Blitzchung's comments were deemed to be harmful to the company.
In a follow-up statement issued on Friday night, Blizzard said that it was reducing his suspension (and that of the broadcasters) to six months, and restoring his prize money — though mostly otherwise stood by its earlier positions.
Here's a timeline of Blizzard's terrible week, as fans and politicians expressed their outrage over how the company handled the episode:
Critics accused Blizzard of prioritizing its business interests in China instead of protecting free speech.
"World of Warcraft" is one of Blizzard's most popular games
"World of Warcraft Classic"/Blizzard Entertainment
Blizzard's decision has sparked outrage from Americans, who say Blitzchung's comments should be protected as free speech — especially given that Blizzard is an American company. Supporters of the protests in Hong Kong accused Blizzard of compromising its principles to protect its business interests in China.
Hong Kong has been under a condition of civil unrest for more than four months. Millions of people have marched to demand sovereignty from mainland China and protest its socioeconomic conditions. The ongoing protests have already garnered international attention, with the territory's increasingly complex relationship with China's communist government as a core issue.
China spends more money on video games than any other country in the world, making the market a vital part of Blizzard's business. Tencent, one of China's biggest companies and the largest video-game publisher in the world, owns a 5% stake in Blizzard's parent company, Activision Blizzard.
Blizzard is the latest American company to face criticism for its relationship to China. The NBA is also embroiled in its own controversy involving Hong Kong and China after Houston Rockets General Manager Darryl Morey shared a tweet in support of the protests. Morey later apologized and deleted the tweet, but the situation has strained the league's relationship with China.
Blizzard's decision drew criticism from US Senators and fellow video game makers.
Blizzard Entertainment
Republican Sen. Marco Rubio and Democratic Sen. Ron Wyden of Oregon were among the many voices that came to Blitzchung's defense, accusing Blizzard of censorship.
"Blizzard shows it is willing to humiliate itself to please the Chinese Communist Party," Wyden tweeted. "No American company should censor calls for freedom to make a quick buck."
Epic Games, the company behind "Fortnite," issued a statement saying that no "Fortnite" players would be punished for sharing their opinion on politics and human rights. Though 40% of Epic is owned by Tencent, China's largest video game publisher, CEO (and majority shareholder) Tim Sweeney said he would "never" allow this sort of punishment for a player.
Outraged fans have vowed to boycott Blizzard games until the company changes its stance on the Hong Kong protests.
Fans filled the Barclays Center in Brooklyn, New York for the finale of
Blizzard's "Overwatch League." Overwatch League
Upset fans have flooded message boards for Blizzard's most popular games with posts calling for boycotts of Blizzard. The main Reddit board dedicated to Blizzard titles, "r/Blizzard," was temporarily set to private mode on October 8 by the moderators because of the intense backlash. A few posters who shared messages about Hong Kong on Blizzard's own forums had their accounts banned from the site until the year 3019.
"#BlizzardBoycott" became a trending hashtag on Twitter as dozens of people shared screenshots of themselves deleting their Blizzard accounts or canceling subscriptions to Blizzard's "World of Warcraft."
As the public backlash continued, Blizzard employees and esports contractors alike expressed frustration and concern with the company's stance.
An orc statute from the center of Blizzard Entertainment's campus. Activision / Blizzard Entertainment
Hours after Blizzard announced Blitzchung's ban, a former Blizzard employee tweeted that some backlash seemed to be brewing internally: Someone had covered up two of the company's key values — "Think Globally" and "Every Voice Matters" — enshrined on a statue at the company's headquarters.
On October 9, a group of some 30 Activision Blizzard employees staged a walkout to protest the company's punishment of a Hong Kong-based esports competitor who made a political statement during a Blizzard event in Taiwan, according to a report from Blake Montgomery of The Daily Beast.
A photo shared with The Daily Beast and posted on Imgur showed several employees holding umbrellas — an object that has become symbolic of the protests in Hong Kong.
On October 10, Justin "Jayne" Conroy, an coach for a Dallas-based esports team in Activision Blizzard's Overwatch League, was reportedly ordered to delete a tweet that criticized Blizzard's punishment of Blitzchung.
A few hours before Jayne's tweet, "Hearthstone" commentator Brian Kibler announced that he would decline working with the company for the finals of its Grandmasters competition. Though Kibler agreed that Blitzchung had violated the company's policies, he said the punishment seemed too harsh for the situation. Two days later, another "Hearthstone" commentator, Nathan "Admirable" Zamora said he was withdrawing from the event as well.
Some people have started using one of Blizzard's characters as a mascot for the protest, in hopes of straining Blizzard's relationship with China.
Mei from "Overwatch," in her Lunar New Year attire. Blizzard Entertainment
A group of gamers latched onto the idea of co-opting Mei, a Chinese character from Blizzard's "Overwatch," for pro-protest messages. The idea was an attempt to sour China's relationship with Blizzard. China's government has strict regulations on what games are released in the country, and games that promote deeply political messages or rebellion against the government are specifically prohibited.
While Mei isn't normally much of a rebel in her game, fans have taken liberties with her design to make her an emblem of the protests in Hong Kong. This includes draping her in the design of Hong Kong's flag and drawing pictures of her wearing symbols of the protests, like umbrellas and gas masks.
Blizzard's annual fan convention is less than a month away, and a mass protest of the event could be on the horizon.
Blizzard
BlizzCon, Blizzard's fan annual convention, is scheduled for the weekend of November 1. The company typically holds its biggest announcements of the year for the BlizzCon stage, but this year's event could have a much different tone.
An organization called Fight for the Future is organizing a protest to coincide with BlizzCon in Anaheim, California, according to Vice, and protest signs have recently been spotted at official Blizzard esports events.
With less than a month until the company's largest event, the world will be watching to see what Blizzard does next.
On Friday night, Blizzard President J. Allen Brack issued a statement saying that its ‘relationships in China had no influence on our decision’ to punish Blitzchung.
Blizzard Entertainment
In the statement, Brack says that Blitzchung violated Blizzard's rules around keeping its official channels focused on the game, but that it was walking back his suspension to only six months — and the same again for the on-air casters involved. Brack also indicated that "we now believe he should receive his prizing," though he didn't offer specifics.
You can read the full statement here.
INSIDE BLIZZARD
REGARDING LAST WEEKEND’S HEARTHSTONE GRANDMASTERS TOURNAMENT
Blizzard Entertainment
In the statement, Brack says that Blitzchung violated Blizzard's rules around keeping its official channels focused on the game, but that it was walking back his suspension to only six months — and the same again for the on-air casters involved. Brack also indicated that "we now believe he should receive his prizing," though he didn't offer specifics.
You can read the full statement here.
INSIDE BLIZZARD
REGARDING LAST WEEKEND’S HEARTHSTONE GRANDMASTERS TOURNAMENT
Blizzard Entertainment
October 12, 2019
Hello Blizzard Community . . .
I want to take a few minutes to talk to all of you about the Hearthstone Grandmasters tournament this past weekend. On Monday, we made the decision to take action against a player named blitzchung and two shoutcasters after the player shared his views on what’s happening in Hong Kong on our official broadcast channel.
At Blizzard, our vision is “to bring the world together through epic entertainment.” And we have core values that apply here: Think Globally; Lead Responsibly; and importantly, Every Voice Matters, encouraging everybody to share their point of view. The actions that we took over the weekend are causing people to question if we are still committed to these values. We absolutely are and I will explain.
Our esports programs are an expression of our vision and our values. Esports exist to create opportunities for players from around the world, from different cultures, and from different backgrounds, to come together to compete and share their passion for gaming. It is extremely important to us to protect these channels and the purpose they serve: to bring the world together through epic entertainment, celebrate our players, and build diverse and inclusive communities.
As to how those values apply in this case:
First, our official esports tournament broadcast was used as a platform for a winner of this event to share his views with the world.
We interview competitors who are at the top of their craft to share how they feel. We want to experience that moment with them. Hearing their excitement is a powerful way to bring us together.
Over the weekend, blitzchung used his segment to make a statement about the situation in Hong Kong—in violation of rules he acknowledged and understood, and this is why we took action.
Every Voice Matters, and we strongly encourage everyone in our community to share their viewpoints in the many places available to express themselves. However, the official broadcast needs to be about the tournament and to be a place where all are welcome. In support of that, we want to keep the official channels focused on the game.
Second, what is the role of shoutcasters for these broadcasts?
We hire shoutcasters to amplify the excitement of the game. They elevate the watchability and help the esports viewing experience stay focused on the tournament and our amazing players.
Third, were our actions based on the content of the message?
Part of Thinking Globally, Leading Responsibly, and Every Voice Matters is recognizing that we have players and fans in almost every country in the world. Our goal is to help players connect in areas of commonality, like their passion for our games, and create a sense of shared community.
The specific views expressed by blitzchung were NOT a factor in the decision we made. I want to be clear: our relationships in China had no influence on our decision.
We have these rules to keep the focus on the game and on the tournament to the benefit of a global audience, and that was the only consideration in the actions we took.
If this had been the opposing viewpoint delivered in the same divisive and deliberate way, we would have felt and acted the same.
OK, what could Blizzard have done better, and where do we go from here?
Over the past few days, many players, casters, esports fans, and employees have expressed concerns about how we determined the penalties. We’ve had a chance to pause, to listen to our community, and to reflect on what we could have done better. In hindsight, our process wasn’t adequate, and we reacted too quickly.
We want to ensure that we maintain a safe and inclusive environment for all our players, and that our rules and processes are clear. All of this is in service of another important Blizzard value—Play Nice; Play Fair.
In the tournament itself blitzchung *played* fair. We now believe he should receive his prizing. We understand that for some this is not about the prize, and perhaps for others it is disrespectful to even discuss it. That is not our intention.
But playing fair also includes appropriate pre-and post-match conduct, especially when a player accepts recognition for winning in a broadcast. When we think about the suspension, six months for blitzchung is more appropriate, after which time he can compete in the Hearthstone pro circuit again if he so chooses. There is a consequence for taking the conversation away from the purpose of the event and disrupting or derailing the broadcast.
With regard to the casters, remember their purpose is to keep the event focused on the tournament. That didn’t happen here, and we are setting their suspension to six months as well.
Moving forward, we will continue to apply tournament rules to ensure our official broadcasts remain focused on the game and are not a platform for divisive social or political views.
One of our goals at Blizzard is to make sure that every player, everywhere in the world, regardless of political views, religious beliefs, race, gender, or any other consideration always feels safe and welcome both competing in and playing our games.
At Blizzard, we are always listening and finding ways to improve—it is part of our culture. Thank you for your patience with us as we continue to learn.
Sincerely,
J. Allen Brack
President of Blizzard Entertainment
SEE ALSO: Blizzard is under scrutiny from lawmakers, gamers, and maybe even its own employees after punishing a 'Hearthstone' competitor who voiced his support for protesters in Hong Kong
Hello Blizzard Community . . .
I want to take a few minutes to talk to all of you about the Hearthstone Grandmasters tournament this past weekend. On Monday, we made the decision to take action against a player named blitzchung and two shoutcasters after the player shared his views on what’s happening in Hong Kong on our official broadcast channel.
At Blizzard, our vision is “to bring the world together through epic entertainment.” And we have core values that apply here: Think Globally; Lead Responsibly; and importantly, Every Voice Matters, encouraging everybody to share their point of view. The actions that we took over the weekend are causing people to question if we are still committed to these values. We absolutely are and I will explain.
Our esports programs are an expression of our vision and our values. Esports exist to create opportunities for players from around the world, from different cultures, and from different backgrounds, to come together to compete and share their passion for gaming. It is extremely important to us to protect these channels and the purpose they serve: to bring the world together through epic entertainment, celebrate our players, and build diverse and inclusive communities.
As to how those values apply in this case:
First, our official esports tournament broadcast was used as a platform for a winner of this event to share his views with the world.
We interview competitors who are at the top of their craft to share how they feel. We want to experience that moment with them. Hearing their excitement is a powerful way to bring us together.
Over the weekend, blitzchung used his segment to make a statement about the situation in Hong Kong—in violation of rules he acknowledged and understood, and this is why we took action.
Every Voice Matters, and we strongly encourage everyone in our community to share their viewpoints in the many places available to express themselves. However, the official broadcast needs to be about the tournament and to be a place where all are welcome. In support of that, we want to keep the official channels focused on the game.
Second, what is the role of shoutcasters for these broadcasts?
We hire shoutcasters to amplify the excitement of the game. They elevate the watchability and help the esports viewing experience stay focused on the tournament and our amazing players.
Third, were our actions based on the content of the message?
Part of Thinking Globally, Leading Responsibly, and Every Voice Matters is recognizing that we have players and fans in almost every country in the world. Our goal is to help players connect in areas of commonality, like their passion for our games, and create a sense of shared community.
The specific views expressed by blitzchung were NOT a factor in the decision we made. I want to be clear: our relationships in China had no influence on our decision.
We have these rules to keep the focus on the game and on the tournament to the benefit of a global audience, and that was the only consideration in the actions we took.
If this had been the opposing viewpoint delivered in the same divisive and deliberate way, we would have felt and acted the same.
OK, what could Blizzard have done better, and where do we go from here?
Over the past few days, many players, casters, esports fans, and employees have expressed concerns about how we determined the penalties. We’ve had a chance to pause, to listen to our community, and to reflect on what we could have done better. In hindsight, our process wasn’t adequate, and we reacted too quickly.
We want to ensure that we maintain a safe and inclusive environment for all our players, and that our rules and processes are clear. All of this is in service of another important Blizzard value—Play Nice; Play Fair.
In the tournament itself blitzchung *played* fair. We now believe he should receive his prizing. We understand that for some this is not about the prize, and perhaps for others it is disrespectful to even discuss it. That is not our intention.
But playing fair also includes appropriate pre-and post-match conduct, especially when a player accepts recognition for winning in a broadcast. When we think about the suspension, six months for blitzchung is more appropriate, after which time he can compete in the Hearthstone pro circuit again if he so chooses. There is a consequence for taking the conversation away from the purpose of the event and disrupting or derailing the broadcast.
With regard to the casters, remember their purpose is to keep the event focused on the tournament. That didn’t happen here, and we are setting their suspension to six months as well.
Moving forward, we will continue to apply tournament rules to ensure our official broadcasts remain focused on the game and are not a platform for divisive social or political views.
One of our goals at Blizzard is to make sure that every player, everywhere in the world, regardless of political views, religious beliefs, race, gender, or any other consideration always feels safe and welcome both competing in and playing our games.
At Blizzard, we are always listening and finding ways to improve—it is part of our culture. Thank you for your patience with us as we continue to learn.
Sincerely,
J. Allen Brack
President of Blizzard Entertainment
SEE ALSO: Blizzard is under scrutiny from lawmakers, gamers, and maybe even its own employees after punishing a 'Hearthstone' competitor who voiced his support for protesters in Hong Kong
SEE ALSO:-based game company Blizzard bans pro esports player and confiscates his prize money after he voices support for Hong Kong protest
THE SAME IS TRUE IN CANADA
Only half of Gen Xers have a retirement account, and that's a catastrophe in the making
Tanza Loudenback
Insider teamed up with Morning Consult to survey more than 2,000 Americans and found that Generation X is in especially dismal financial shape.
Exactly half of Gen Xers said they don't have a retirement savings account, while 13% said they do have one but aren't actively contributing to it.
Millennials may bear the brunt of bad press, but Gen X is arguably in worse financial shape.
Insider recently teamed up with Morning Consult to survey 2,096 Americans about their financial health, debt, and earnings for its new series, "The State of Our Money." Of the total respondents, 566 were Gen X, defined as ages 39 to 54 this year.
According to the survey, exactly half of Gen Xers don't have a retirement savings account. That's only slightly less than the share of millennial respondents who don't have one (54%). That's particularly concerning considering the nearly two-decade span between the youngest millennials and oldest Gen Xers.
While the Silent Generation and early Baby Boomers have relied on a combination of pension benefits and Social Security to make up their retirement income, Gen X has largely had to assume the responsibility of building up their own nest egg, and they're clearly struggling.
All told, only 36% of Gen Xers are actively saving in a retirement account, while 13% have a dormant retirement account. Americans tend to earn the most money from their late 30s to early 60s, making it a crucial period for socking away extra income.
And yet, "I don't earn enough money to save for retirement" was cited as a major reason for not saving by about 62% of those who don't have a retirement plan. Regardless of salary, the financial squeeze for many Americans tends to ramp up during mid-life. They're typically the most expensive years, when buying a house, supporting children, and accumulating debt become the norm.
About 43% of Gen Xers also said unemployment is a major reason they don't have a retirement account. This could be explained, at least in part, by mothers leaving work to care for young children during their 20s and 30s.
Still, according to Pew Research Center, women exiting the workforce to care for children is becoming less common. In fact, 70% of moms with kids under 18 worked in 2015. Many families are no longer relying on a single income to cover expenses and save for financial goals like retirement.
A separate survey from Schwab Retirement Plan Services found that even those who are contributing to a 401(k) aren't saving enough. The typical Gen Xer thinks they'll need $1.8 million for a comfortable retirement, but they saved an average of just $9,500 last year — half of the maximum allowable contribution.
Tanza Loudenback
Gen X is in worse financial shape than millennials when it comes to retirement. Oleg Golovnev/EyeEm
Insider teamed up with Morning Consult to survey more than 2,000 Americans and found that Generation X is in especially dismal financial shape.
Exactly half of Gen Xers said they don't have a retirement savings account, while 13% said they do have one but aren't actively contributing to it.
Millennials may bear the brunt of bad press, but Gen X is arguably in worse financial shape.
Insider recently teamed up with Morning Consult to survey 2,096 Americans about their financial health, debt, and earnings for its new series, "The State of Our Money." Of the total respondents, 566 were Gen X, defined as ages 39 to 54 this year.
According to the survey, exactly half of Gen Xers don't have a retirement savings account. That's only slightly less than the share of millennial respondents who don't have one (54%). That's particularly concerning considering the nearly two-decade span between the youngest millennials and oldest Gen Xers.
While the Silent Generation and early Baby Boomers have relied on a combination of pension benefits and Social Security to make up their retirement income, Gen X has largely had to assume the responsibility of building up their own nest egg, and they're clearly struggling.
All told, only 36% of Gen Xers are actively saving in a retirement account, while 13% have a dormant retirement account. Americans tend to earn the most money from their late 30s to early 60s, making it a crucial period for socking away extra income.
And yet, "I don't earn enough money to save for retirement" was cited as a major reason for not saving by about 62% of those who don't have a retirement plan. Regardless of salary, the financial squeeze for many Americans tends to ramp up during mid-life. They're typically the most expensive years, when buying a house, supporting children, and accumulating debt become the norm.
About 43% of Gen Xers also said unemployment is a major reason they don't have a retirement account. This could be explained, at least in part, by mothers leaving work to care for young children during their 20s and 30s.
Still, according to Pew Research Center, women exiting the workforce to care for children is becoming less common. In fact, 70% of moms with kids under 18 worked in 2015. Many families are no longer relying on a single income to cover expenses and save for financial goals like retirement.
A separate survey from Schwab Retirement Plan Services found that even those who are contributing to a 401(k) aren't saving enough. The typical Gen Xer thinks they'll need $1.8 million for a comfortable retirement, but they saved an average of just $9,500 last year — half of the maximum allowable contribution.
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