Here’s what you need to know:
For two weeks, Delta Air Lines and Coca-Cola had been under pressure from activists and Black executives who wanted the companies to publicly oppose a new law in Georgia that makes it harder for people to vote. On Wednesday, six days after the law was passed, both companies stated their “crystal clear” opposition to it.
Now Republicans are mad at the companies for speaking out. Hours after the companies made their statements, Gov. Brian Kemp, a Republican, took aim at Ed Bastian, the chief executive of Delta, accusing him of spreading “the same false attacks being repeated by partisan activists.” And Republicans in the Georgia state legislature floated the idea of increasing taxes on Delta as retribution.
On Thursday, Senator Marco Rubio of Florida posted a video in which he called Delta and Coca-Cola “woke corporate hypocrites.” Senator Roger Wicker of Mississippi said Coca-Cola was “caving to the ‘woke’ left.” And Stephen Miller, an adviser to former President Donald J. Trump, said on Twitter, “Unelected, multinational corporations are now openly attacking sovereign U.S. states & the right of their citizens to secure their own elections. This is a corporate ambush on Democracy.”
It was another illustration of just how fraught it is for big companies to wade in to partisan politics, where any support for the left draws the ire of the right, and vice versa.
Other big Georgia companies have managed to stay on the sidelines. UPS, which is based in Atlanta, also refrained from criticizing the new law before it was passed. On Thursday, the company said it “believes that voting laws and legislation should make it easier, not harder, for Americans to exercise their right to vote.” It made no mention of the law.
Credit…Brittany Greeson for The New York Times
General Motors reported a modest rise in car sales in North America for the first quarter, but its operations continue to be hampered by a shortage of computer chips.
G.M. said on Thursday that it sold 642,250 cars and light trucks in the first three months of the year, up just 4 percent even though sales a year ago slowed sharply as the coronavirus pandemic took hold.
By contrast, Toyota Motor showed a strong rebound in sales compared with a year ago. The Japanese company reported that sales in North America jumped 22 percent in the first three months of 2021, to 603,066 cars and light trucks. Its March sales were a record high for that month.
Toyota’s big jump helped it outsell Ford Motor, which has also been hit by the semiconductor shortage. Ford’s sales in the first quarter were up just 1 percent, to 521,334. Sales of Stellantis — the company formed by the merger of Fiat Chrysler and France’s Peugeot SA — reported its U.S. sales increased 5 percent in the first quarter.
Ford and G.M. both enjoyed substantial increases in sales to individual customers at dealerships while reporting declines in sales to fleet operators like rental car companies and governments.
G.M. and Ford have had to halt or slow production at a handful of plants. G.M. has resorted to making some vehicles without parts containing computer chips with the intention of installing those components before sale when supply improves.
In a statement, G.M. said it hoped its strategy for building cars without some components would help it “quickly meet strong expected customer demand during the year.”
That approach to building cars “underscores the dire nature” of the semiconductor shortage, an analyst at CFRA Research, Garrett Nelson, said in a report. “One of the key questions is how much better the U.S. auto sales recovery can get from here.”
The chip shortage is reflected in G.M.’s unusually low inventory of 334,628 vehicles. That is about 76,000 less than at the end of the fourth quarter and is half the number of vehicles its dealers held in stock a year ago. Ford’s inventory was 56,100 lower than at the end of 2020.
G.M.’s sluggish sales were confined to its Chevrolet brand, whose sales fell 2 percent in the first quarter. That included a 13 percent decline in sales of its full-size Silverado pickup truck, a critical profit maker for the company. The Buick, Cadillac and G.M.C. brands reported strong sales in the quarter.
Toyota also reported a drop in sales of its full-size pickup, the Tundra. But the decline was more than offset by big increases in sales of its RAV4, Highlander and 4Runner sport-utility vehicles and cars from its Lexus luxury brand.
Also on Thursday, Honda Motor reported its first-quarter sales in North America had increased 16 percent, to 347,091 vehicles.
Credit…Gary He/EPA, via Shutterstock
United Airlines said it will start hiring pilots again, the latest sign that the travel industry is recovering from the pandemic.
In a memo to pilots on Thursday, Bryan Quigley, an executive in charge of flight operations, said United would start by hiring the roughly 300 pilots who either had a conditional job offer last year or whose start dates had been canceled because of the pandemic.
“With vaccination rates increasing and travel demand trending upward, I’m excited to share that United will resume the pilot hiring process,” Mr. Quigley said.
Since September, nearly 1,000 United pilots have retired or taken voluntary leave, he said, adding that the number of pilots the airline needs will depend on how quickly demand recovers.
The news comes amid growing signs that air travel is recovering in a meaningful and durable way. For several weeks, well over one million people have been screened each day at airport checkpoints, according to Transportation Security Administration data.
“We can see that light at the end of the tunnel,” Scott Kirby, United’s chief executive, said at a virtual aviation summit on Wednesday. “Domestic leisure demand has almost entirely recovered. It tells you something about the pent-up desire for travel, the pent-up desire to remake those connections with people.”
On Wednesday, Delta Air Lines said it would start selling middle seats for the first time in a year, citing widespread vaccinations. On Thursday, Denver-based Frontier Airlines started trading on the Nasdaq, becoming the last of the nation’s 10 largest airlines to go public.
“The time is now,” Barry Biffle, Frontier’s president and chief executive, said in an interview. “The vaccine is unlocking the demand, and you’re seeing it everywhere. You’re seeing it in restaurants, you’re seeing it in hotels.”
Credit…Brad Barket/Getty Images
The real estate brokerage firm Compass raised $450 million in a scaled-down initial public offering Wednesday night, indicating a waning appetite among investors for quickly growing technology companies that remained unprofitable.
Compass’s offering valued the firm at $7 billion, far less than the $10 billion it had originally sought. The company, which bills itself as a technology platform transforming the real estate industry, is not the only firm that has changed its I.P.O. plans after a tech stock sell-off last month. Intermedia Cloud Communications postponed its offering Wednesday, citing market conditions, and the discount airline Frontier priced its I.P.O. on the low end of its range.
“I think it’s been a challenging market for I.P.O.s over the last few weeks, which you can see in the market conditions,” Robert Reffkin, Compass’s chief executive, said in an interview.
Shares of the company ended their first day of trading on the New York Stock Exchange up 12 percent.
Compass, founded in 2012, has raised money from investors including SoftBank Vision Fund, Dragoneer Investment Group and Qatar Investment Authority. It says its goal is to remake the traditional brokerage model by focusing on its two million real estate agents, whom the company calls in its prospectus “remarkably underserved” in both capital and technology.
“There is no company that gives agents everything they need to succeed,” Mr. Reffkin said. He compared Compass to the e-commerce technology company Shopify. If you’re a merchant, he said, “Shopify will give you everything that you need to succeed in one place. We are building the Shopify for real estate agents.”
Mr. Reffkin said that investors should, in turn, value Compass as a technology company. But like many high-flying tech companies, Compass is losing money: In 2019, it lost $388 million on $2.4 billion in sales. Last year, it lost $270 million on $3.7 billion in sales.
“We have a clear path to profitability,” Mr. Reffkin said, adding that he believes it will take years to meet demand for new homes created by people who feel a new freedom to relocate after working remotely during the pandemic. With scale, Compass expects to operate more efficiently, though it does not plan on altering its real estate agent compensation structure as it focuses on narrowing its losses, he said.
With the offering, Mr. Reffkin will also become one of only a handful of Black chief executives in the United States.
“I feel very fortunate to be able to have benefited from so many mentors that have helped me get to where I am today,” Mr. Reffkin said. “I feel like it’s my responsibility to work hard and to create success; that will help pave the way for others.”
Credit…U.S. House of Representatives Energy and Commerce Committee, via Reuters
An activist investor who pushed for the ouster of Jack Dorsey as Twitter’s chief executive last year will step down from Twitter’s board of directors, signaling an end to the pressure campaign on the social media company.
Twitter announced the change in a regulatory filing on Thursday, adding that the boardroom shift would occur once it had identified a new candidate to fill the role. Elliott Management, the hedge fund that led the campaign, will participate in the search for the candidate.
Early last year, Elliott Management, which has successfully shaken up many companies, quietly amassed a significant stake in Twitter. That culminated in an effort to push Mr. Dorsey out of the company he helped start. Among Elliott’s complaints were that Twitter’s stock price was too sluggish and that Mr. Dorsey was distracted by his leadership of a second company, the financial services firm Square.
Last March, Elliott Management reached a truce with Twitter that allowed Mr. Dorsey to remain. Silver Lake, a big investor in tech companies, invested in Twitter and helped negotiate for Mr. Dorsey. As part of the deal, Jesse Cohn, the Elliott executive who oversaw the Twitter campaign, took a seat on Twitter’s board.
Mr. Cohn will step down once a new independent director is appointed, Twitter said in its filing. Since Mr. Cohn joined the board last year, the company has launched a slew of new products and its stock price has nearly doubled.
Elliott Management and Twitter declined to comment beyond the filing.
The Treasury Department is working with global partners toward a new allocation of $650 billion worth of the International Monetary Fund special drawing rights, a reserve boost that is intended to help poor countries combat the pandemic, it said Thursday.
The support for the plan is a reversal of the Trump administration’s stance. Steven Mnuchin, the former Treasury secretary under President Trump, had opposed such allocations as an inefficient way to boost liquidity for poorer nations, because a big chunk of the reserves wind up going to advanced economies.
But Janet L. Yellen, the Treasury secretary, had earlier this year signaled support for the expansion as a way to bolster poorer nations.
“Containing the pandemic across the globe is paramount to a robust economic recovery,” the Treasury said in a release on Thursday. “To this end, Treasury is working with I.M.F. management and other members toward a $650 billion general allocation” of the reserve assets.
Special drawing rights, known as S.D.R.s, are reserve assets whose value is based on a basket of currencies — the U.S. dollar, the euro, the Chinese renminbi, the Japanese yen and the British pound sterling. They can supplement shortfalls in reserves, easy-to-access assets that countries can use to meet their balance of payments, foreign borrowing and foreign exchange needs.
“The global recession has strained central bank foreign exchange reserves in many countries,” the Treasury said in its fact sheet Thursday. The allocation “will help buffer reserves, supporting governments’ efforts to address the health and economic crises.”
The Treasury said expanding the allocation would provide about $21 billion worth of liquidity support to low-income countries and about $212 billion worth of support to other emerging and developing countries, excluding China.
“We are working with our international partners to pursue ways for advanced economies to lend a portion” of their allocations “to support low-income countries,” it said.
The Treasury also stressed the importance of improved transparency as a necessary part of the package, saying it was “working with the I.M.F. and other member countries to maximize the benefits and limit the possible downsides of an allocation by enhancing transparency, accountability and equitable burden sharing.”
The new administration’s approach has raised concerns among some Republicans that the United States would be effectively spending money to help adversaries such as China and Russia — a claim Treasury officials have pushed back on.
Credit…Lena Mucha for The New York Times
The European Central Bank’s chief economist argued on Thursday that fears of a big rise in inflation are overblown, a sign that the people who control interest rates in the eurozone are likely to keep them very low for some time to come.
The comments — by Philip Lane, an influential member of the central bank’s Governing Council whose job includes briefing other members on the economic outlook — are an attempt to calm bond investors who are nervous that the end of the pandemic will lead to high inflation.
Fueling their fears, inflation in the eurozone rose to an annual rate of 1.3 percent in March from 0.9 percent in February, according to official data released on Wednesday, the fastest increase in prices in more than a year.
Market-based interest rates have been rising because investors worry that President Biden’s $2 trillion stimulus program will provoke a broad increase in prices for years to come. The interest rates that prevail on bond markets ripple through the financial system and can make mortgages and other types of borrowing more expensive, creating a drag on economic growth.
Despite big monthly swings in inflation during the last year, the average had been remarkably stable at an annual rate of about 1 percent, Mr. Lane wrote in a blog post on the central bank’s website on Thursday. That is well below the European Central Bank’s target of 2 percent.
“The volatility in inflation over 2020 and 2021 can be attributed to a host of temporary factors that should not affect medium-term inflation dynamics,” Mr. Lane wrote.
That is another way of saying that the European Central Bank is not going to panic about short-lived fluctuations in inflation and put the brakes on the eurozone economy anytime soon.
On the contrary, Mr. Lane’s analysis suggests that the European Central Bank will continue trying to push inflation toward the 2 percent target. In March, the central bank said it would increase its purchases of government and corporate bonds to try to keep a lid on market-based interest rates.
Mr. Lane said it was no surprise to see “considerable volatility in inflation during the pandemic period.” He attributed the ups and downs to quirky factors that are not likely to recur.
Germany and some other countries cut their value-added taxes to encourage consumer spending, then raised them again later. The price of fuel fluctuated wildly. People spent almost nothing on travel, but increased spending on home exercise equipment or products that they needed to work from home. That affected the way inflation is calculated and made the annual rate look higher, Mr. Lane said.
“The medium-term outlook for inflation remains subdued,” he wrote, “and closing the gap to our inflation aim will set the agenda for the Governing Council in the coming years.”
Credit…Jared Soares for The New York Times
A year after the pandemic turned the nation’s digital divide into an education emergency, President Biden is making affordable broadband a top priority, comparing it to the effort to spread electricity across the country. His $2 trillion infrastructure plan, announced on Wednesday, includes $100 billion to extend fast internet access to every home.
The money is meant to improve the economy by enabling all Americans to work, get medical care and take classes from wherever they live. Although the government has spent billions on the digital divide in the past, the efforts have failed to close it partly because people in different areas have different problems. Affordability is the main culprit in urban and suburban areas. In many rural areas, internet service isn’t available at all because of the high costs of installation.
“We’ll make sure every single American has access to high-quality, affordable, high speed internet,” Mr. Biden said in a speech on Wednesday. “And when I say affordable, I mean it. Americans pay too much for internet. We will drive down the price for families who have service now.”
Longtime advocates of universal broadband say the plan, which requires congressional approval, may finally come close to fixing the digital divide, a stubborn problem first identified and named by regulators during the Clinton administration. The plight of unconnected students during the pandemic added urgency.
“This is a vision document that says every American needs access and should have access to affordable broadband,” said Blair Levin, who directed the 2010 National Broadband Plan at the Federal Communications Commission. “And I haven’t heard that before from a White House to date.”
Some advocates for expanded broadband access cautioned that Mr. Biden’s plan might not entirely solve the divide between the digital haves and have-nots.
The plan promises to give priority to municipal and nonprofit broadband providers but would still rely on private companies to install cables and erect cell towers to far reaches of the country. One concern is that the companies won’t consider the effort worth their time, even with all the money earmarked for those projects. During the electrification boom of the 1920s, private providers were reluctant to install poles and string lines hundreds of miles into sparsely populated areas.
The delivery company UPS on Thursday joined other corporations like Delta Air Lines and Coca-Cola in making a statement on voting rights. “UPS believes that voting laws and legislation should make it easier, not harder, for Americans to exercise their right to vote,” the company said in a statement. But UPS, which is based in Atlanta, held back from criticizing a sweeping law in Georgia restricting voter access. A group of prominent Black executives on Wednesday called on companies to publicly oppose a wave of similarly restrictive voting bills that Republicans are advancing in almost every state.
Microsoft said that it would begin producing more than 120,000 augmented reality headsets for Army soldiers under a contract that could be worth up to $21.9 billion. The HoloLens headsets use a technology called the Integrated Visual Augmentation System, which will equip soldiers wearing them with night vision, thermal vision and audio communication. The devices also have sensors that help soldiers target opponents in battle. The deal is likely to create waves inside Microsoft, where some employees have objected to working with the Pentagon.