Daily Business Briefing
July 1, 2021Updated
July 1, 2021, 11:35 p.m. ET
July 1, 2021, 11:35 p.m. ETCredit…Pool photo by Graeme Jennings
Lina Khan’s first meeting of the Federal Trade Commission on Thursday revealed political friction and previewed the likely partisan battles to come. Ms. Khan took over as chair last month and made the agency’s monthly meetings open to the public, a major change.
Ms. Khan opened the meeting with a brief statement about the importance of transparency to both inform the public of the agency’s work and create a “robust participatory process.” The meeting included public comments for the first time.
Not all of the commissioners were pleased. Christine Wilson, a Republican, said she supported transparency but added that the new format excluded knowledgeable staff and limited discussion between the commissioners. She also complained that she learned of the change only last week. Ms. Wilson called the meeting “chaos” before voting no on a motion to pass a new “Made in the U.S.A.” rule for labels.
The labeling rule, introduced by Rohit Chopra, a Democratic commissioner, fortifies enforcement principles for those who “lie on labels,” he said. Mr. Chopra noted that the change would not create new obligations for manufacturers and did not apply to advertising. Mr. Chopra said the new rule would broaden the definition of a label to go beyond something that was physically affixed to a good and could apply online. The two Republican commissioners, Noah Phillips and Ms. Wilson, objected, saying that they supported strong enforcement for Made in U.S.A. labels, but that the proposed change would exceed the F.T.C.’s statutory authority.
The rule was approved by a three-to-two vote along party lines.
Democratic commissioners, led by Ms. Khan, also voted to rescind a 2015 policy statement on enforcement principles for certain “edge” competition cases. It was approved during the Obama administration by a bipartisan group of commissioners, and its presence on the meeting agenda was a signal that Ms. Khan intended to break with the past, said Bruce Hoffman, a partner at the law firm Cleary Gottlieb and a former director of the F.T.C.’s competition bureau.
Mr. Phillips objected to Ms. Khan’s proposition, arguing that it was unclear what guideline would replace the policy statement and there was no public comment period. He called the move to rescind without more public input “inconsistent with the rhetoric” about transparency.
The measure passed on party lines.
Mr. Chopra commended Ms. Khan and repeated a phrase he used earlier in the hearing, saying he welcomed the end of “perceived powerlessness” at the F.T.C.
Correction: July 1, 2021
An earlier version of this article misquoted a comment from Rohit Chopra, a member of the Federal Trade Commission. He said he welcomed the end of “perceived powerlessness” at the F.T.C., not “prissy powerlessness.”
Read moreCredit…Vincent Tullo for The New York Times
Even as many companies bring workers back to their offices this summer, the amount of office space available for lease in Manhattan has soared to the highest rate on record.
Across Manhattan, home to the two largest business districts in the country, 18.7 percent of all office space is available for lease, a jump from more than 15 percent at the end of 2020 and more than double the rate from before the coronavirus pandemic, according to a report released on Thursday by Newmark, a real estate services company.
Some neighborhoods are faring worse, such as Downtown Manhattan, where 21 percent of offices have no tenants, the company said.
The overall availability rate is the highest since it started being tracked in the mid-1970s, when the city was facing a financial crisis and the Manhattan skyline was being transformed by the rise of towering office buildings like the Twin Towers at the World Trade Center.
Despite some positive economic indicators, companies in New York City continue to end their leases or offload them to other tenants at a steady pace, underscoring that the tremendous shifts in the way people work have already become a lasting legacy of the pandemic.
The real estate firm Savills said the Manhattan office market was not likely to rebound to prepandemic levels until “late 2022 or beyond.”
No city in the United States must confront the changing workplace more than New York, where offices before the pandemic attracted 1.6 million commuters every day and helped sustain a swath of the economy including shops, restaurants and Broadway theaters. The pandemic has also placed monumental pressure on the real estate sector, a pillar of the New York economy, as landlords have rushed to redesign offices and dangle incentives like lower rent to retain and attract companies.
But there are signs things could get worse for landlords. A third of leases at large Manhattan buildings will expire over the next three years, according to the real estate firm CBRE, and companies have made clear they will need significantly less space.
At the end of May, just 12 percent of Manhattan’s office workers had returned to their desks, according to a survey of companies by the Partnership for New York City, an influential business group. More than 60 percent of workers are estimated to return in September, the group said, but many companies will allow their employees to work remotely at least several days a week.
Read moreCredit…Dave Zajac/Record-Journal, via Associated Press
Although the White House recently acknowledged that President Biden did not expect to meet his self-imposed deadline of 70 percent of U.S. adults at least partly vaccinated by July 4, Anheuser-Busch still plans to offer to buy much of the United States a beer.
As the pool of the Americans most eager to get vaccinated has shrunk in recent months, the Biden administration has shifted its focus from prioritizing the benefits of mass vaccination sites to a persuasion campaign that highlights incentives to encourage hesitant or disinterested people to get vaccinated.
In early June, the brewing giant announced that it would offer free beer, contingent on the country reaching the president’s goal by the holiday. On Wednesday, the company said that it is still offering adults a $5 virtual credit card for beverages this weekend, whether or not they had been vaccinated.
Beginning at noon on Friday, and ending on Monday night, U.S. adults of legal drinking age can log on to a company website, provide personal information like their email address and ZIP code, and receive a gift card redeemable for an Anheuser-Busch beverage at bars, restaurants and other retailers.
“As people get back together with friends and family for Independence Day, we are celebrating the progress we’ve made together the best way we know how — over a beer — and are delivering on our promise of beer for America,” Michel Doukeris, the chief executive of Anheuser-Busch, said in a statement.
There are a variety of measures being tried across the United States in hopes that people will get vaccinated, like free rides from Uber or Lyft or free child care, and prizes like state-sponsored lotteries, free tickets for airplanes and sporting events, gift cards, joints, guns and, of course, beer.
“That’s right, get a shot and have a beer,” Mr. Biden said recently, noting the brewer’s move. “Free beer for everyone 21 years and over to celebrate the independence from the virus.”
Still, if the rate of adult vaccinations continues on the seven-day average, as of Wednesday, the country will come in just shy of his target, with about 67 percent of adults having at least one shot by July 4, according to a New York Times analysis.
Lazaro Gamio and Daniel E. Slotnik contributed reporting.
Read moreCredit…Regis Duvignau/Reuters
The top executive of Air France-KLM, one of the world’s largest airline companies, was thrilled when Europe eased restrictions on American visitors last month. Now, he wants the United States to return the favor.
While Europe has largely lifted restrictions on vaccinated American tourists, most Europeans are still barred from visiting the United States even if they have been inoculated against the coronavirus, to the frustration of businesses on both sides of the Atlantic Ocean.
“What we’re anxiously waiting for is reciprocity on the part of the U.S. government,” the Air France-KLM chief executive, Benjamin Smith, said in an interview this week. “The trans-Atlantic is the most important long-haul market that we have.”
The U.S. Chamber of Commerce last week called for the easing of travel restrictions put in place under the Trump administration, saying that the return of European business travelers and tourists would “help drive economic growth and job creation for Americans across the country.” Europe has typically been one of the biggest sources of tourists to the United States, especially to New York and other East Coast destinations.
At a news conference on Wednesday, Jen Psaki, the White House press secretary, said the administration was considering lifting the ban.
“We know people want to come here and people want to travel to other places; we understand that,” Ms. Psaki said. She added: “We have these working groups with Canadians, with Europeans, with others to determine the timeline and pace when we can reopen and do it safely.”
U.S. airlines have been enjoying a summer rebound thanks to widespread vaccinations and strong demand for tickets after a year in which many people were confined to their homes. But the industry in Europe is struggling. The number of flights in Western Europe last week was down 49 percent compared with 2019, according to OAG, an aviation data provider. In North America, flights were only down about 24 percent.
Air France-KLM lost $8.4 billion dollars last year. Lufthansa Group, which is based in Germany, and I.A.G., which owns British Airways, Iberia and other airlines, also lost billions.
European airlines rely heavily on trans-Atlantic travel. For KLM, which has its main hub in Amsterdam, and Air France, flights to North America accounted for about 12 percent of overall capacity in 2019, according to Cirium, an aviation data provider. And, despite the ban on most Europeans visiting the U.S., Air France still plans to launch flights to its 12th American city this Friday by starting nonstop service between Denver and Paris.
Even as it awaits the U.S. reopening to European visitors, Mr. Smith said he was hopeful that travel would slowly recover within Europe.
“The leisure component of our Europe business is really strong,” Mr. Smith said. “It’s a bit too early to talk about the business component because it’s never been strong in the summer, but we’ll see how that goes in September.”
Read moreCredit…Susan Walsh/Associated Press
Millions of tax returns are still awaiting processing by the Internal Revenue Service, which has faced a far bigger backlog than in years past.
That means any refunds due for those Americans have also been delayed. About 70 percent of the individual returns processed so far have been due refunds, with an average size of $2,827.
More than 35 million 2020 federal returns were waiting to be processed at the close of the filing season in mid-May — more than three times as many backlogged returns than at the end of last year’s filing season, according to a report released Wednesday from an independent advocacy group within the Internal Revenue Service.
“For taxpayers who can afford to wait, the best advice is to be patient and give the I.R.S. time to work through its processing backlog,” Erin M. Collins, the national taxpayer advocate, said in her midyear report to Congress. “But particularly for low-income taxpayers and small businesses operating on the margin, refund delays can impose significant financial hardships.”
The I.R.S. said in a statement that it had been processing returns continually for current and prior years, including amended returns filed by taxpayers. As of June 18, it had fully processed almost seven million individual tax returns since the end of tax season, and more than 15 million of the backlogged returns are in some stage of processing, the agency said.
The report — which also included recommendations for the I.R.S. and a series of objectives that the advocate plans to pursue in the coming year — said the backlog had resulted largely from a pandemic-related evacuation order that restricted employee access to I.R.S. facilities. In 2019, before the pandemic started, the agency had a backlog of 7.4 million returns at the close of the filing season. Last year, that number swelled to 10.7 million.
The I.R.S. has not only had to perform its traditional duties, it has also had to digest tax legislation that was enacted in the 2021 filing season, the report said. Then there was the third round of stimulus payments, which the agency started sending in mid-March. Over the past 15 months, the agency has processed 475 million stimulus payments worth $807 billion.
The I.R.S. processed 136 million individual income tax returns by the end of the filing season, and issued 96 million refunds totaling about $270 billion. The 35.3 million returns that were still outstanding at the end of the filing season included individuals and businesses. The taxpayer advocate said those returns required some sort of manual assistance, meaning an employee needed to get involved before they could be pushed to the next stage of the processing pipeline.
Read moreCredit…Jeff Roberson/Associated Press
Automakers saw substantial increases in sales in the second quarter, rebounding from a year ago when auto sales fell sharply as the coronavirus pandemic took hold.
G.M. delivered 688,236 cars and light trucks, a 40 percent increase from a year ago, as all four of its brands reported strong sales of trucks and sport-utility vehicles. Toyota also reported a 40 percent rise in sales. The Japanese automaker’s growth was led by car sales, including a near doubling of sales of its popular Camry sedan.
Korean automakers Hyundai and Kia each said sales rose more than 70 percent in the quarter.
Despite those big jumps, automakers are struggling to increase production to meet strong demand because of a global shortage of computer chips, which has forced manufacturers to idle plants and has left dealers with a dwindling inventory of cars and trucks. Some dealers are selling new cars for more than manufacturer’s suggested retail price because of the limited supply.
While up from a year ago, G.M.’s sales in the second quarter were still well short of the 746,659 vehicles it sold in the second quarter of 2019.
Sales of new and used vehicles have gained momentum as the pandemic has eased this year.
“The U.S. economy is accelerating, consumer spending is robust and jobs are plentiful,” Elaine Buckberg, G.M.’s chief economist, said in a statement.
She said G.M. expects demand for cars and trucks to remain strong into 2022, although sales will likely be limited by tight supplies.
Read moreCredit…Lou Rocco/ABC
Meghan McCain will leave “The View” at the end of July, the co-host said on Thursday at the beginning of the popular daytime show.
“This was not an easy decision,” she said of her departure, noting that the coronavirus pandemic had changed her priorities.
Ms. McCain, the show’s sole conservative voice, said she had discovered she was pregnant with her daughter as the country was going into lockdown last year and quickly left New York, where the show is taped, for Washington.
“I just have this really wonderful life here that, ultimately, I felt like I didn’t want to leave,” she said of Washington.
The daughter of John McCain, the longtime Republican senator who died in 2018, and Cindy McCain, Ms. McCain called her nearly four years on the show “one of the hands-down greatest, most exhilarating, wonderful privileges of my entire life.”
Her tenure on “The View,” a production of ABC News started by the television journalist Barbara Walters, included a number of contentious exchanges with the show’s liberal co-hosts, Whoopi Goldberg, Joy Behar and Sunny Hostin (Sara Haines, an ABC News correspondent, rounded out the hosting duties). The women acknowledged the tension on Thursday’s episode, with Ms. Behar calling Ms. McCain a “formidable opponent” and “no snowflake.”
“You and I have had our disagreements, we’ve had our fights, but we’ve also had some drinking moments, which were rather fun and interesting,” said Ms. Behar, whose tetchy relationship with Ms. McCain was spoofed on “Saturday Night Live.” “We take a lot of hits on this show and we stood by our points of view, and you have done that brilliantly for four years.”
Among the most memorable exchanges the self-described “sacrificial Republican” had on the show: a moving conversation with Joe Biden in 2017 about their families’ experiences with brain cancer, chastising Ms. Behar for shifting the conversation to President Donald J. Trump during a tribute to President George H.W. Bush after his death in 2018 and accusing Ms. Goldberg in May of cutting her off partway through her remarks stemming from a discussion of incidents of anti-Semitism and related statements made by Representatives Ilhan Omar and Marjorie Taylor Greene.
Ms. McCain rejoined “The View” on Jan. 4, after having extended her maternity leave from six weeks to three months while recovering from postpartum pre-eclampsia. On her return, she called on-air for mandatory paid family leave.
In a statement, ABC News thanked her for her “passion and unique voice” and said that she recently told the network that she wanted to depart.
Ms. McCain noted on Thursday that her father had encouraged her to become a panelist on the show, despite her initial misgivings. She signed on in 2017, following a 10-month hosting role on the Fox News daytime talk show “Outnumbered.”
“Your dad was very smart,” Ms. Goldberg, a friend of the senator, said in reply.
Ms. McCain described her co-hosts as “strong, brilliant, intelligent and credible broadcasters.”
“If five men were doing what we do every day,” she added, “I really do believe that we’d probably have a Pulitzer Prize at this point.”
Stocks rose slightly on Thursday with the S&P 500, the benchmark U.S. index, notching its sixth day of gains as economic data released over the week has provided new insight into the economic recovery.
On Thursday, the Labor Department reported initial claims for state jobless benefits fell last week to 359,000, down 38,000 from the previous week. New state claims remain high by historical standards but are one-third the level recorded in early January.
The Congressional Budget Office said Thursday that the U.S. economy was rebounding faster than expected and estimated the U.S. is on track to regain all the jobs lost in the pandemic by the middle of next year.
The Labor Department is set to release the monthly jobs report on Friday. Economists expect payroll gains to top 700,000, up from 559,000 in May.
Other market news
Oil prices surged higher on Thursday, with West Texas Intermediate, the U.S. crude benchmark, climbing 2 percent to about $74.95 a barrel. Shares of energy companies also rose, pulling indexes higher. Firms like Occidental Petroleum and ConocoPhillips were among the S&P 500’s best performers of the day. Oil ministers from OPEC and allied countries were unable to decide at a Thursday meeting whether to increase production from pandemic levels. They will meet again on Friday.
The S&P 500 rose 0.5 percent. The Nasdaq composite ticked up 0.1 percent.
Initial public offerings are having a blockbuster week, with the trading debuts of Krispy Kreme, Didi Chuxing and 16 other listings so far. It’s a sign of how the traditional road to the public markets has roared back after being briefly supplanted by a strategy using shell companies known as special purpose acquisition companies, or SPACs.
Most European stock indexes rose. The Stoxx Europe 600 closed with a 0.6 percent gain, led higher by financial and energy companies.
Initial claims for state jobless benefits fell last week, the Labor Department reported Thursday.
The weekly figure was about 359,000, down 38,000 from the previous week. New claims for Pandemic Unemployment Assistance, a federally funded program for jobless freelancers, gig workers and others who do not ordinarily qualify for state benefits, totaled 115,000, up 3,000 from the week before. The figures are not seasonally adjusted. (On a seasonally adjusted basis, state claims totaled 364,000, a decrease of 51,000.)
A total of 26 states have announced plans to discontinue some or all federal pandemic unemployment benefits this month or next — including a $300 supplement to other benefits — even though they are funded through September. Officials in those states said the payments were keeping people from seeking work. But the online job site Indeed found that in states that have abandoned the federal benefits, clicks on job postings were below the national average.
New state claims remain high by historical standards but are one-third the level recorded in early January. The benefit filings, something of a proxy for layoffs, have receded as businesses return to fuller operations, particularly in hard-hit industries like leisure and hospitality.
Roughly seven million fewer jobs exist now than before the pandemic. A fuller picture of the labor market will emerge on Friday, when the government will issue its report on June hiring.
Officials from OPEC, Russia and their allies failed to reach agreement on Thursday on whether to ease the output quotas that have helped drive up oil prices to their highest levels since 2018. On Thursday, the oil ministers met by videoconference but were unable to reach a decision.
A news release issued by OPEC headquarters in Vienna on Thursday said the group, known as OPEC Plus, would meet again on Friday afternoon after a preliminary meeting of top oil ministers.
The immediate sticking point appears to have been disagreements over how the output quotas of one or more countries are calculated. Oil officials of the United Arab Emirates, for instance, are known to believe that they have been bearing a disproportionate burden of production cuts. The United Arab Emirates has big ambitions to expand its oil output and has been frustrated by OPEC constraints.
“The dispute over the baseline has upended everything,” said Helima Croft, an analyst at RBC Capital Markets, an investment bank.
These tensions most likely also reflect a realization by the group that it has reached a critical moment as demand recovers from the pandemic. OPEC Plus members are keeping around six million barrels a day of potential production in the ground under an agreement reached last year. A major question for the group is how to gradually release this oil into the market without depressing prices.
The tight grip the producers have kept on oil production has helped lift prices by around 85 percent since November to about $75 a barrel for Brent crude, the international benchmark, and $74 a barrel for West Texas Intermediate, the U.S. standard.
Analysts had expected this meeting to produce a gradual easing.
“Traders expect a supply increase from OPEC Plus, but in a cautious manner that does not prematurely recall too much supply too soon,” Rystad Energy, a consulting firm, said in a note on Thursday.
Some of the group’s members, including Russia and the United Arab Emirates, lean toward increasing production while oil consumption is rising as economies recover from the pandemic.
Some oil officials also worry that keeping tight controls on production can be counterproductive because relatively high prices — some analysts are projecting they could eventually reach $100 a barrel — will encourage competitors like shale oil drillers in the United States to increase output, cutting into the market share of the OPEC Plus countries.
But Saudi Arabia, the world’s largest oil exporter, is known to favor caution. If the economic recovery stumbles because of new variants of the coronavirus, for instance, an oversupply of oil could force prices to drop.
Oil officials will also be keeping in mind the potential for an output increase this year and in 2022 from Iran, an OPEC member. Tehran is engaged in indirect talks with the United States on resuming the nuclear deal that President Donald J. Trump abandoned. If successful, these negotiations could lead to a lifting of the U.S. sanctions that have crimped Tehran’s oil sales.
Read moreCredit…Amr Alfiky/The New York Times
On any normal week, the trading debuts of Krispy Kreme or Didi Chuxing, the Chinese ride-hailing giant, would be the biggest news in initial public offerings. But they were just two of 18 I.P.O.s that hit the markets this week, making it the busiest since December 2004.
The debuts are the latest example of companies racing to the public market to take advantage of sky-high valuations as investor exuberance pushes the stock market to new heights. And it’s a sign that, as regulatory scrutiny has slowed down the process of going public by selling to the shell companies known as special purpose acquisition companies, or SPACs, companies are eagerly embracing the traditional route.
Overall, 213 I.P.O.s raised $70 billion in the first half of the year, which is above the full-year average for the past 10 years, according to Renaissance Capital. June was the busiest month for listings since August 2000.
“In addition to rising returns and a massive backlog of unicorns and others, companies are getting out ahead of the July 4 holiday,” said Matt Kennedy, a senior I.P.O. market strategist at Renaissance Capital, which manages I.P.O.-focused exchange traded funds.
Those who performed best were generally those that promised the same kind of growth propelling stocks like Uber Technologies, which has seen its shares rise 66 percent over the past year and Zoom Video Communications, which has see its stock grow 48 percent.
Didi’s shares closed on Wednesday above their offer price, valuing the tech company at $69 billion. “It’s a successful I.P.O. coming out of the gates,” said Daniel Ives of Wedbush Securities, but the company still has a lot to prove to investors worried about tension between the United States and China.
The company lost $1.6 billion last year, though it reported a profit of $30 million in the first quarter of this year. Revenue declined 8 percent to $21.63 billion last year because of the pandemic.
Shares of Clear Secure, the travel security company, also ended higher on their first day of trading on Wednesday. The company used the pandemic to broaden its offerings for “touchless” screening, like allowing users to verify their identity through their eyes or face, and its Health Pass, which allows travelers to upload their vaccine information. Sales grew to $230 million from $192 million in 2020 from the year prior.
“We think we have more opportunities today than we did before the pandemic,” said its chief executive, Caryn Seidman-Becker.
On Wednesday evening, the plus-size apparel retailer Torrid topped its expectations, raising $231 million in an offering. The business, backed by the private equity firm Sycamore Partners, saw sales dip slightly during the pandemic — to $973 million from a little over $1 billion — but used the setback as a chance to accelerate its e-commerce transformation, like investing in curbside pickup. Seventy percent of Torrid’s business was online last year, up from 29 percent a year prior.
“We did use all that disruption to learn,” said the company’s chief executive, Liz Muñoz. “Our business had already been blown up into a million pieces — might as well get creative.”
Not all debuts this week fared equally well. Krispy Kreme priced its offering well below expectations, raising $500 million, down from $640 million.
“I think investors were kind of turned off because the proceeds are going to pay down debt, so it’s not a really growth deal,” said Josef Schuster, the founder of IPOX Schuster, a firm in Chicago that helps track performance of new listings.
But fortunes improved on Thursday as for Krispy Kreme shares, trading under the symbol DNUT, rose nearly 17 percent.
The company’s sales grew 17 percent to $1.1 billion its latest fiscal year, up from $959 million the year before. Losses, though, nearly doubled, to $60 million from $34 million as the company expanded its attempts to buy out its franchisees. The company has pitched to investors growth from those efforts, alongside opportunity to expand further internationally.
“The big investment phase that we really did over the past five years is mostly behind us, and we’re really now just going directly into how do we really drive this business forward,” said Michael Tatterfield, chief executive of Krispy Kreme.
JAB Holding, a European investment firm, acquired Krispy Kreme for roughly $1.35 billion in 2016, adding the company to a portfolio of consumer brands that now includes the sandwich shop Panera and the coffee chain JDE Peets. JDE Peets went public last year, while Panera is also considering a potential offering this year.
Read moreCredit…Phil Noble/Reuters
The Japanese carmaker Nissan announced plans on Thursday to build a battery factory near its plant in northeastern England, and to manufacture a new electric crossover S.U.V. there, bolstering the chances that Britain’s auto industry can survive Brexit and the transition to electric vehicles.
Envision AESC, a Chinese-owned company that already provides Nissan with batteries at the assembly plant in Sunderland, will invest 450 million pounds, or $620 million, in a new so-called gigafactory to supply electric cars made at the site. It is part of a partnership between the two companies that began when Nissan sold AESC to Envision in 2019.
Domestic battery production is crucial to the future of Britain’s auto industry. Under the terms of Britain’s exit from the European Union, cars made with imported batteries will be subject to punishing tariffs when exported to the continent.
The tariffs will take effect in 2027, only three years before Britain will begin banning the sale of new cars powered solely by gasoline or diesel. The Nissan factory in Sunderland exports 70 percent of its production to the European Union and could not survive without access to that market.
Nissan’s commitment to invest up to £423 million to build a new, as yet unnamed electric car in Sunderland also bodes well for the factory, Britain’s biggest auto plant. The factory currently produces the Qashqai subcompact crossover, the Juke compact S.U.V. and the electric Leaf.
“These new models will continue our long tradition of supplying European customers and world markets from the U.K.,” Ashwani Gupta, Nissan’s chief operating officer, said during an event at the factory.
Making the new vehicle will require 900 new jobs at the Sunderland factory, Nissan said, while the Envision AESC battery factory will create 750 jobs.
Overall, Nissan said, the projects are a combined £1 billion investment in the plant. They are also receiving government support, though it was not immediately clear how much. The local government in Sunderland will spend £80 million on a microgrid to supply the factories with wind and solar energy.
Boris Johnson, the British prime minister, called the announcements “a pivotal moment in our electric vehicle revolution and securing its future for decades to come.”
After Britain voted to leave the European Union and ended frictionless trade, the future of its auto industry became uncertain just as manufacturers were reorganizing their production around electric vehicles. Honda is scheduled to shut down its factory in Swindon next month, and the site has already been sold to a logistics company. The fate of a Vauxhall plant in northwest England depends on government support, Stellantis, Vauxhall’s parent company, said this year.
Nissan’s future in Britain has been a continuous test of Brexit supporters’ claims that leaving the European Union wouldn’t cause businesses to flee. Since the Brexit referendum in 2016, Nissan’s investment commitments to Britain have wavered but have been met by hearty guarantees from the government to support expansion at the Sunderland plant, which opened in 1986.
Nissan opposed Brexit, warning that the uncertainty it would cause could discourage investment. In 2019, the company scrapped plans to build a new conventionally powered S.U.V. in Sunderland and concentrated production of the vehicle in Japan. But government commitments to the company and the new trade agreement with the European Union have encouraged Nissan to expand operations at the plant, protecting jobs in a city that voted overwhelmingly in favor of Brexit.
The Society of Motor Manufacturers and Traders said this week that Britain needed to rapidly increase battery production and add at least 2.3 million charging points by 2030 if it wanted to prevent the industry from falling into “precipitous decline.”
Late last year, Mr. Johnson said the government would spend nearly £500 million over four years on battery production.
Read moreCredit…Sean Dong
Today in the On Tech newsletter, Shira Ovide writes that Microsoft’s ability to thrive despite doing almost everything wrong might be a heartening saga about corporate reinvention. Or it may be a distressing demonstration of how monopolies are extremely hard to kill. Or maybe it’s a little of both.