G.M. will increase production of cars and trucks as the chip shortage eases.
Daily Business Briefing
Updated
June 3, 2021, 2:26 p.m. ET
General Motors said Thursday it expected to increase shipments of pickup trucks and other vehicles to dealers over the next several weeks, a sign that the global shortage of computer chips is beginning to ease.
G.M.’s financial results in the first half of the year would be “significantly better” than it had previously forecast, the automaker said in a statement. The company had previously indicated that its profit would fall to about $500 million in the second quarter, from more than $3 billion in the first quarter. The company had blamed the chip shortage for forcing it to idle several plants for weeks at a time.
“The global semiconductor shortage remains complex and very fluid,” Phil Kienle, G.M.’s vice president for North America manufacturing and labor relations, said in the statement. “Customer demand continues to be very strong, and G.M.’s engineering, supply chain and manufacturing teams have done a remarkable job maximizing production of high-demand and capacity-constrained vehicles.”
G.M. said it planned to increase production of its heavy-duty pickups at a plant in Flint, Mich., next month. It said output would rise by about 1,000 trucks per month. Other factories will forego usual vacation closures this summer to make up for some of the production lost earlier this year.
The company also expects to ship to dealers a batch of about 30,000 midsize pickups from a plant in Wentzville, Mo. These trucks that had been assembled without certain electronic components and had been kept at the plant until the missing parts arrived.
G.M.’s stock price was up about 6 percent on Thursday afternoon after it updated its profit forecast.
Other automakers have also been slowed by the chip shortage. Ford Motor has said it expects to make half as many cars in the second quarter as it originally planned. Tesla has increased prices of some of its cars, and stopped using radar sensors as part of its Autopilot driver-assistance system.
“Our biggest challenge is supply chain, especially microcontroller chips,” Tesla’ chief executive, Elon Musk, said Wednesday on Twitter. “Never seen anything like it.”
AMC Entertainment’s gravity-defying run in the stock market stalled — for a few hours at least — on Thursday after the movie-theater chain said it planned to sell an additional 11.55 million shares. At the stock’s closing price on Wednesday, that sale would raise more than $720 million.
The stock slid more than 30 percent earlier in the day, before recovering from the steepest losses. By Thursday afternoon, the shares were slightly higher for the day.
AMC’s price nearly doubled on Wednesday after the company said it would offer free popcorn and other perks to the more than three million retail investors that own shares in the company.
AMC has been embraced by small investors seeking to raise the price of certain companies that have come to be known as meme stocks because the traders promote their ideas on social media platforms. These small shareholders now own 80 percent of AMC, the company said. Their interest in companies has resulted in eye-popping surges in share prices. AMC, which was trading at just above $2 a share at the start of the year, is now selling for about $61.
Elsewhere in the markets.
U.S. stocks fell as traders cautiously approached two reports on the labor market. Weekly data on initial claims for state jobless benefits showed that claims rose slightly from last week to about 425,000.
On Friday, the Labor Department will publish its monthly jobs report. Last month, that report showed an unexpectedly small increase in hiring in April.
The S&P 500 was down about 0.3 percent.
Investors are also watching the Federal Reserve closely for signs that it will pull back its monetary stimulus, which has helped keep asset prices high. Patrick Harker, the president of the Federal Reserve Bank of Philadelphia, said on Wednesday that it “may be time to at least think about thinking about tapering” the Fed’s government bond-buying program.
On Wednesday, the Federal Reserve announced that it would sell its relatively small holdings of corporate bonds, which were bought last year to stabilize the bond market in the early months of the pandemic.
Most European stock indexes were down on Thursday. The FTSE 100 in Britain dropped 0.6 percent, falling more than other major European indexes. There is speculation that the final lifting of social-distancing restrictions in Britain, scheduled for June 21, might be delayed because of the spread of the coronavirus variant first discovered in India.
Twitter announced its first paid subscription offering on Thursday, giving users in Australia and Canada extra features such as the ability to undo a tweet in exchange for a monthly fee.
The service, called Twitter Blue, will give users up to a 30-second window after publishing to change their minds in case they notice a typo or reconsider a message, edging closer to the edit button that has been widely requested by users. It will also give users the option to bookmark tweets and organize them into folders so they can easily be found again. And Twitter Blue will condense long threads into easier-to-read paragraphs.
Twitter, which has been expanding into paid content with its acquisitions of the subscription ad-blocking service Scroll and the newsletter company Revue, said that the features included in Twitter Blue were based on feedback from users.
“We’ve heard from the people that use Twitter a lot, and we mean a lot, that we don’t always build power features that meet their needs,” two Twitter product managers, Sara Beykpour and Smita Mittal Gupta, wrote in a blog post announcing the service. The new features are part of the company’s response to those complaints, they wrote.
Twitter Blue will debut in Australia for a monthly fee of $4.49 in Australian dollars and in Canada for $3.49 in Canadian dollars. The service will add more features and perks in the coming months, Twitter said.
President Biden issued a new executive order on Thursday barring Americans from investing in Chinese firms linked to the country’s military or engaged in selling surveillance technology — both inside and outside of China — used to repress dissent or religious minorities.
The new order, which initially lists 59 Chinese firms, substantially expands an order issued in November by President Donald J. Trump. By rewriting that earlier order to include firms engaged in making and deploying the surveillance technology — used against Muslim minorities like the Uigurs and dissidents in Hong Kong and in the Chinese diaspora around the globe — it intensifies a commercial and ideological battle between Beijing and Washington, one that Mr. Biden has termed the struggle between “autocracy and democracy.”
The move comes at a moment when China is both ramping up its ability to spy on its nearly 1.4 billion people, using a mix of facial-recognition cameras and software, phone-scanners and a range of other tools, and exporting that technology to nations around the world. It is often sold abroad as part of a package of communications equipment provided by companies like Huawei, or as part of China’s Belt-and-Road initiative, which aims to expand the country’s trade ties.
Mr. Biden’s aides said the move was justified by a new American commitment not to facilitate Chinese repression and human rights abuses.
But China regularly decries such moves as interference in its domestic affairs, and in the past has sought to retaliate with bans on American companies, leading to fears of broad economic decoupling between the world’s two largest economies. And the Chinese will likely argue that the United States and other countries use some of the same technologies and techniques to track terrorists and drug lords.
It is unclear how effective Mr. Biden’s order will be at stopping the spread of Chinese espionage technology. To make the investment ban truly effective, he would have to convince the European allies, Japan and South Korea, among others, to join in the effort.
That effort may begin next week. How to handle China is expected to be a major subject when Mr. Biden goes to the Group of 7 summit in Britain next week, followed by a meeting of NATO allies. It will be his first foreign trip as president. But in the preparations for the meeting, he is already running into resistance from nations that, like Germany and South Korea, rely on China as one of their biggest export markets for luxury cars, software and electronics.
As described by senior administration officials on Thursday, the new order will prohibit American companies and companies based in the United States from investing in the stock of publicly listed Chinese companies on the list or in debt issued by those firms. The ban will extend to investing in funds that, in turn, invest in those companies. Those funds will have a year to unwind their investments.
The new executive order is another example of a case in which the Biden administration is building on a Trump-era China initiative. Mr. Biden has also kept tariffs on Chinese goods in place, as leverage in negotiations. In this case, Biden administration officials say they were acting in part to fix the executive order issued last November, which they say was badly written and has been challenged, successfully, in American courts because it did not clearly lay out the factual basis for banning investments in Chinese firms linked to the defense industry.
Under the new executive order, the list of Chinese firms affected by the ban will be put together by the Treasury Department, which has long experience in issuing sanctions, rather than by the Pentagon.
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Initial claims for state jobless benefits were little changed last week, the Labor Department reported Thursday.
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The weekly figure was about 425,000, an increase of 6,000 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 76,000, a decline of 17,000 from the prior week. The figures are not seasonally adjusted. (On a seasonally adjusted basis, state claims totaled 385,000, a decline of 20,000.)
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New state claims remain high by historical levels but are less than half the level recorded as recently as early February. 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.
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The government will provide a more complete look at the employment market on Friday, when the monthly jobs report for May is released. Economists surveyed by Bloomberg estimate that employers added about 655,000 positions in the month, the median forecast shows.
Production resumed at nine JBS beef plants in the United States on Wednesday after a ransomware attack shut them down. The F.B.I. said the perpetrator was a Russian-based criminal group known for its cyberattacks on prominent American companies.
Thousands of workers at JBS’s beef, pork and poultry plants in Australia, Canada and the United States were affected as shifts were altered or canceled on Monday and Tuesday.
Here’s the latest news:
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JBS, a Brazilian company that accounts for roughly a fifth of cattle and hog slaughter in the United States, expects operations at its JBS USA and Pilgrim’s subsidiaries to be near full capacity by Thursday, according to a statement posted on the company’s website.
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“JBS USA and Pilgrim’s continue to make significant progress in restoring our IT systems and returning to business as usual,” Andre Nogueira, the chief executive of JBS USA, said in the statement.
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In Australia, operations were slower to restart. Workers at a slaughterhouse in Tasmania have been told they are going back to work Friday, said Andrew Foden, the Tasmanian secretary of the Australasian Meat Industry Employees Union. “At the moment in Tasmania, they’re all stood down without pay, but I do believe they’re all attending from work from tomorrow,” he said.
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In the past week, dozens of organizations have been hit by ransomware attacks, including the City University of New York; the Massachusetts Steamship Authority, which runs ferries to Martha’s Vineyard and Nantucket; and the Birmingham Barons, a minor-league baseball team.
Yan Zhuang contributed reporting.
At the beginning of the year, AMC Entertainment, the movie theater chain, was worth some $450 million in market capitalization, about a tenth of its prepandemic high. It has since been swept up in the meme-stock mania, with groups of retail traders banding together to buy and hold its stock, sending it to new heights.
As it reopens theaters and tries to lure people back, AMC has suddenly become worth more than eight times its
best days before the outbreak, driven by an investor frenzy untethered to the company’s fundamental financial prospects, reports the DealBook newsletter.
AMC Entertainment market capitalization
To put the stock’s recent run into perspective, in early 2021, it was worth about as much as Franklin Covey, the maker of Franklin day planners. At its peak during January’s meme-stock surge (which centered on the video game retailer GameStop), AMC rose to around $4.5 billion in market cap, or roughly the same as H&R Block, the tax provider. That was a big move at the time, but it pales in comparison to the past week.
After a torrid few trading days, AMC is now worth more than $30 billion, or roughly the same as Delta Air Lines.
Retail, hospitality and fast-food workers across the country interviewed by The New York Times expressed alarm that their employers had used new guidance from the Centers for Disease Control and Prevention to make masks optional for vaccinated customers.
Some said they had been vaccinated but worried they could still get sick or infect family members who were not or could not get vaccinated. Others said they had yet to be vaccinated, Noam Scheiber reports for The Times.
Matt Kennon, a room-service server at the Beau Rivage Resort and Casino in Biloxi, Miss., said that before the C.D.C. relaxed its recommendations, the resort’s policy was that all guests must wear masks in common areas unless they were eating, drinking or smoking, and that it was strictly enforced.
“There were several security checkpoints around the place where we’d have someone from security let them know, ‘Please put on a mask,’” said Mr. Kennon, a shop steward with his union, UNITE HERE. “There were stations with disposable masks for guests to wear in case they didn’t have one.”
Mr. Kennon said the policy remained in place even after the governor lifted a statewide mask mandate in early March, but changed after the C.D.C. announcement. Vaccinated guests are allowed to walk around without masks, but there is no way to verify vaccination status and fewer than half of guests are wearing them, according to Mr. Kennon.
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Activist investors secured a third seat on Exxon’s board on Wednesday when the oil giant announced updated results of a shareholder vote. The newest member, Alexander A. Karsner, has strong environmental credentials and is expected to pose a challenge to senior management. Investor discontent with Exxon had been building because the company has invested in a number of projects, acquisitions and strategies that have not paid off, including Canadian oil sands and natural gas fields. Critics also believe that the company has been slow to adapt to a changing energy industry and done too little to reduce carbon emissions.
Discontent at Facebook has surged over its recent handling of international affairs, according to interviews with more than half a dozen current and former employees.
For weeks, they said, employees have complained about the company’s decisions to take down posts from prominent Palestinian activists and messages critical of the Indian government’s handling of the pandemic, Sheera Frenkel and Mike Isaac report for The New York Times.
The workers have grilled top executives at meetings about the situations and, in one case, formed a group to internally report Palestinian content that they believe Facebook had wrongly removed. This week, more than 200 employees also signed an open letter calling for a third-party audit of Facebook’s treatment of Arab and Muslim posts, according to a person who saw the letter.
The actions are another sign of internal unrest at Facebook as employee criticism broadens beyond domestic issues. For the past few years, workers largely challenged Mark Zuckerberg, Facebook’s chief executive, on his handling of inflammatory posts from former President Donald J. Trump. But since Mr. Trump left office in January, attention has shifted to Facebook’s global policies and what employees said was the company’s acquiescence to governments so that it could continue profiting in those countries.
“There’s a feeling among people at Facebook that this is a systematic approach, one which favors strong government leaders over the principles of doing what is right and correct,” said Ashraf Zeitoon, Facebook’s former head of policy for the Middle East and North Africa region, who left in 2017.