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Drone Hits Headquarters of Russia’s Black Sea Fleet in Crimea

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A drone hit the headquarters of Russia’s Black Sea Fleet in Crimea on Saturday, reaching the heart of a heavily fortified naval base that has long allowed Moscow to project power in the region.

The incident follows a series of explosions and possible acts of sabotage that have exposed the peninsula’s vulnerability, piling pressure on Russia to shore up its defenses there. Until recently Moscow could count on Crimea as a reliably safe rear base to oversee Russia’s occupation of the territory along Ukraine’s southern coast.

The drone’s ability to penetrate Russian-controlled airspace, arriving at the nerve center of Moscow’s naval operations, delivers a symbolic blow to the Black Sea Fleet, which was recently placed under a new commander.

Videos posted on social media showed a column of smoke rising over the Crimean city of Sevastopol, where the fleet is based.

Mikhail Razvozhaev,

the Russian-installed governor of the strategic port city, said on the Telegram messaging app that the drone “flew onto the roof” of the building. He later issued what he called a clarification, saying the drone fell on the roof and caught fire after being shot down by Russian air defenses.

The incident strengthened Nikita’s resolve to sell his barber shop and leave Crimea as soon as possible. The 34-year-old, who lives in Sevastopol, said Russian tourists had packed up following an explosion at an air base on the peninsula less than two weeks ago, and many of his own friends have also left since then.

Some were concerned they could be mobilized to fight against Ukraine, he said. Others were worried about getting trapped if the bridge connecting Crimea with the Russian mainland is disabled. Officials in Kyiv have recently said the Kerch bridge is a legitimate target.

Mr. Razvozhaev blamed the incident on Ukraine’s government in Kyiv, saying there was no serious damage to the headquarters and no one was harmed. He said all approaches and entrances to the site had been blocked by police and urged citizens to “remain calm and stay at home.”

A Ukrainian soldier launched a reconnaissance drone in northern Ukraine’s Kyiv region earlier this month.



Photo:

Efrem Lukatsky/Associated Press

Ukrainian officials did not immediately comment on the incident, but they have hinted at involvement in a string of blasts that have tested  Moscow’s grip on Crimea in recent weeks. Russian authorities have downplayed the recent incursions in the peninsula, which became a Russian stronghold after Russia annexed it in 2014.

Officials in western Crimea said Russian air defense worked to repel small drones that flew over the city of Yevpatoria on Saturday morning.

Russian air defenses had “successfully hit all targets over Crimea,” said the peninsula’s Russian-backed governor,

Sergei Aksyonov,

adding there were no casualties or damage.

A spate of explosions at Russian ammunition depots, airfields and bridges have appeared to intensify the strategy Ukrainian forces have adopted in recent weeks—hitting Moscow’s supply lines in hopes of starving Russian troops west of the Dnipro River in the occupied Kherson region of resources and ultimately forcing them to retreat.

An explosion Tuesday at an ammunition depot in Crimea was the result of sabotage, according to Russia.



Photo:

stringer/Agence France-Presse/Getty Images

Ukraine’s immediate goal isn’t to retake Crimea, but to degrade Russia’s ability to wage war in the south and east, where Kyiv is seeking to regain territory captured by Moscow’s armies elsewhere.

A blast at an air base in Crimea earlier this month put more than half of the Black Sea Fleet’s naval aviation combat jets out of use, according to a Western official. It is not clear what caused the explosion.

Moscow blamed sabotage for an explosion earlier this week at an ammunition depot on the peninsula. An official in Kyiv said it was the work of Ukraine’s supporters.

“The issue on the agenda is the step-by-step demilitarization of the peninsula with its subsequent de-occupation,”

Oleksiy Danilov,

secretary of Ukraine’s National Security and Defense Council, said on Friday. Residents of Crimea who previously collaborated with Russia will receive a lighter sentence if they share information about Russian troops and equipment in the area, Mr. Danilov said.

Acts of sabotage and strikes deep in Russian-held territory have increased as the frontlines between Russian and Ukrainian troops become static following almost six months of combat that have worn both sides down.

Over the past week there have been minimal changes in territorial control, the U.K.’s Ministry of Defense said. In the east, Russian forces have advanced on Bakhmut but have yet to break into built-up areas of the city, the ministry said in its daily intelligence briefing. Increasingly frequent explosions behind Russian lines are, the ministry said, “probably stressing Russian logistics and air basing in the south.”

Ukrainian servicemen load munitions at the front line in the eastern Donetsk region.



Photo:

anatolii stepanov/Agence France-Presse/Getty Images

Ukrainian air defenses intercepted four Russian missiles over the central city of Dnipro on Saturday, according to

Valentyn Reznichenko,

head of the region’s military administration.

Also on Saturday, seven people—including several children—were wounded when Russian missiles struck a multistory residential building in the southern Ukrainian city of Voznesenk, said

Vitaliy Kim,

the head of the Mykolaiv regional military administration.

United Nations Secretary-General

António Guterres

said Saturday that a U.N.-brokered grain-export agreement was bringing hope to countries stricken by a global food crisis amid the Russian invasion of Ukraine.

Mr. Guterres was speaking in Istanbul at the end of a three-day visit to the region, which included a trip to Odessa where on Friday he witnessed the loading of wheat onto a ship preparing to leave Ukraine under the agreement.

“I was so moved watching the wheat fill up the hold of the ship,” he said. “It was the loading of hope for so many around the world.”

He also said he hoped that the “extraordinary spirit and commitment” demonstrated by the participants in the agreement could eventually be harnessed to lead to peace.

While in Istanbul, Mr. Guterres also joined an inspection team on board one of the grain ships, the Invincible II.

Officials from Ukraine, Russia, Turkey, and the U.N. signed an agreement in July to resume Ukraine’s exports of grain and other foodstuffs through three of its Black Sea ports. The deal was the result of months of negotiations brokered by the U.N. and Turkey.

The grain agreement is a key achievement for the U.N. during the Ukraine war. The U.N.’s top decision-making body, the Security Council, has been powerless to push back on the Russian invasion or de-escalate the conflict, largely due to Russia’s veto power on the council.

Russia’s assault on Ukraine in February trapped millions of tons of grain in the country, paralyzing exports. Ukraine supplied about 10% of the world’s wheat exports prior to the war.

Dozens of ships have left Ukraine’s ports since the signing of the agreement, exporting more than 650,000 tons of corn, wheat and other products since shipments resumed on Aug. 1, according to the U.N.

—Jared Malsin in Istanbul contributed to this article.

Write to Ann M. Simmons at ann.simmons@wsj.com and Isabel Coles at isabel.coles@wsj.com

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Business

Boeing Profit Falls as Executives Point to Turnaround

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The company said its second-quarter results showed it was making progress in stabilizing its operations after a series of production and regulatory problems have prevented it from delivering commercial aircraft on time and without quality issues.

“We do believe we’re in the middle of a momentum shift,” Chief Executive

David Calhoun

said in a call with analysts Wednesday.

Boeing shares were recently trading around even, having climbed more than 3% at one point.

Production of the 737 MAX has reached 31 planes a month, up from 16 a year ago, as it deals with supply-chain challenges such as engine shortages that are also affecting rival Airbus SE, which reports quarterly earnings later Wednesday. Boeing has said it stepped up 737 deliveries in June.

Executives said Wednesday Boeing appeared on the verge of receiving regulatory approval to resume deliveries of its wide-body 787 Dreamliner. A series of production issues has kept the plane maker from handing over that jet to customers for much of the last two years, leaving it with more than $25 billion of the aircraft in inventory.

A rebound in air travel has fueled airlines’ continued demand for new aircraft, which Mr. Calhoun said hasn’t slowed. “While we understand the sort of recession fears that are growing out there, so far it has not impacted the aviation industry or our customers,” Mr. Calhoun said.

Boeing is typically nearly tied for orders with rival Airbus entering the annual Farnborough Air Show, but this year it’s well behind. WSJ’s George Downs reports from the show on how Boeing is trying to catch up and what it will take to restore balance to the aviation duopoly. Illustration: Rami Abukalam

The company on Wednesday reported a profit of $160 million, or 32 cents a share, for the three months to June 30, down from $567 million, or $1, during the same period a year earlier.

The adjusted per-share loss of 37 cents, which excludes pension charges, fell short of the 13-cent loss consensus among analysts polled by FactSet. Sales in the quarter fell 2% to $16.7 billion, with analysts expecting $17.6 billion.

Results of Arlington, Va.-based Boeing’s defense business continued to be weighed down by around $400 million in charges during the quarter. This included $93 million on its Starliner space capsule in the quarter. Boeing successfully launched the Starliner in May, but it has incurred higher costs after earlier failed attempts to launch and dock with the International Space Station. It also took a $147 million charge on its MQ-25 refueling drone as costs rose to meet requirements set by the U.S. Navy.

Boeing faces a possible strike at three of its defense plants from Aug. 1 after workers rejected a new contract, which Mr. Calhoun said on CNBC could disrupt deliveries.

The company said it had positive operating cash flow in the second quarter. It reiterated the target of generating surplus cash for the full year.

Over the last couple of years, Boeing has dealt with production and regulatory problems that have impeded a recovery from two crises: a nearly two-year grounding of its 737 MAX after two fatal crashes in 2018 and 2019, and the pandemic’s hit to demand for new aircraft.

A year ago, Mr. Calhoun expressed optimism, telling analysts in July 2021: “We are turning a corner, and the recovery is gaining momentum.”

More recently, Mr. Calhoun has said this year would mark a turning point. “I can’t measure it week by week or month by month or even quarter by quarter, but I know the year is going to be substantially better,” he said at a June analyst event.

Airbus has been producing its A320 narrow-body family at a monthly rate of about 50, with a goal of reaching 75 by 2025. But Mr. Calhoun said Wednesday he couldn’t predict when Boeing would be in a position to increase its 737 MAX production rates, citing supply constraints as a barrier to ramping up.

“If I thought I had an engine supply, I’d do it today,” he said.

Boeing has had to slow production of its narrow-body aircraft this year due to supply bottlenecks, and getting stored MAX jets out of inventory has taken longer than the company anticipated. Scores of the planes have been in storage since the MAX grounding. Many of the MAX jets are bound for customers in China, which hasn’t allowed the aircraft to return to service in the country.

After previously saying it expected to deliver about 500 of 737 MAX jets by the end of the year, Boeing finance chief

Brian West

on Wednesday said the company now estimates it will deliver closer to 400 of the aircraft by the end of 2022. As of June 30, the company had handed over 181 of the aircraft to customers.

Write to Andrew Tangel at Andrew.Tangel@wsj.com and Doug Cameron at doug.cameron@wsj.com

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Business

Twitter Lawsuit Adds to Musk’s Tesla and SpaceX Challenges

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Tesla and SpaceX didn’t respond to requests for comment.

Tesla, still the world’s most valuable auto maker by far, earlier this month reported its first sequential decline in quarterly deliveries in more than two years, largely reflecting supply-chain disruptions and an extended factory shutdown in China because of Covid-19-related lockdowns there.

Elon Musk leaving court after testifying at the SolarCity trial in Wilmington, Del., last year.



Photo:

Samuel Corum/Bloomberg News

Mr. Musk also recently described the company’s new plants in Germany and Texas as “gigantic money furnaces.” The factories opened earlier this year, but the company has struggled to increase production at both, Mr. Musk said.

“Berlin and Austin are losing billions of dollars right now because there’s a ton of expense and hardly any output,” he said in a late May interview with a Tesla owners’ club. Mr. Musk, who has been expressing concerns about the global economy, initiated a round of job cuts at the car maker last month.

Tesla’s production challenges, some of which have been largely out of the company’s control, threaten to waste a “golden opportunity” to get electric vehicles to market ahead of rivals, said Gene Munster, a managing partner at research and investment firm Loup Ventures.

“You just can’t give oxygen to your competitors,” said Mr. Munster, a longtime Tesla watcher whose firm doesn’t hold the company’s stock.

On Wednesday,

Andrej Karpathy,

a longtime executive who played a key role in developing Tesla’s advanced driver-assistance system known as Autopilot, said he was leaving the company. Mr. Musk, on Twitter, thanked Mr. Karpathy for his contributions.

Last year, Mr. Musk warned that if a severe global recession dried up capital availability and liquidity while SpaceX was losing billions on its Starship rocket program and its satellite-broadband service, bankruptcy wasn’t impossible. The space company was the busiest U.S. rocket-launch provider last year, handling both human flights and satellite missions.

Tesla has struggled to increase production at its Texas manufacturing facility that opened earlier this year, Elon Musk has said.



Photo:

Suzanne Cordeiro/Agence France-Presse/Getty Images

The entrepreneur said he visited a company launch site in Texas after a fiery explosion on Monday under one of the company’s Super Heavy boosters. Those towering vehicles underpin the Starship rocket system, which Mr. Musk has said Space Exploration Technologies Corp., as the company is formally known, plans to use for its most ambitious missions, including a prospective human voyage to Mars.

The National Aeronautics and Space Administration is also counting on a version of Starship to ferry astronauts to the surface of the moon as soon as 2025.

“Yeah, actually not good,” Mr. Musk wrote on Twitter in response to the explosion, saying a SpaceX team was assessing the damage. He added that the booster’s base appeared sound, though SpaceX shut down the launchpad for safety reasons. Later, he tweeted: “Damage appears to be minor, but we need to inspect all the engines.”

Jeffrey Hoffman, an aerospace engineering professor at Massachusetts Institute of Technology and former astronaut, said SpaceX faces significant hurdles developing Starship, including showing that the engines clustered under its Super Heavy boosters are able to function as designed. “The parallel operation of 33 rocket engines at the same time is a big deal,” he said, referring to the design.

SpaceX, alongside other satellite companies, is also embroiled in a regulatory battle against

Dish Network Corp.

and others as the Federal Communications Commission mulls new rules for the radio frequencies used to carry its signals.

SpaceX rebounded after a Falcon 9 rocket exploded in Cape Canaveral, Fla., in 2016, destroying a Facebook satellite.



Photo:

U.S. Launch Report//Reuters

Soaring inflation is weighing on both Tesla and SpaceX, Mr. Musk has said. Some Tesla suppliers are requesting 20% to 30% more for parts than they did last year, Mr. Musk said in April, when the company reported record quarterly profit.

Meanwhile, some SpaceX employees signed a letter raising concerns and frustration over the CEO’s recent public statements and behavior, describing them as a source of embarrassment and distraction. The company fired at least some of the staffers involved in the effort.

Gwynne Shotwell,

SpaceX’s president, said the letter distracted employees and upset many of them.

Mr. Musk is also a founder of Boring Co., a tunneling enterprise, and Neuralink Corp., a neuroscience startup working on brain-implant technologies. He has at times bemoaned the workload he has heaped on himself. “It would be nice to have a bit more free time on my hands, as opposed to just working day and night from when I wake up till when I go to sleep seven days a week. It’s pretty intense,” he said last year during a Tesla analyst briefing.

Deep business challenges at Tesla and SpaceX are nothing new for Mr. Musk. The auto maker nearly went bust in 2018, Mr. Musk has said, as it struggled to increase production of its Model 3 sedan, the car that helped turn Tesla from a niche player to a mass market auto producer. Mr. Musk at one point slept on the factory floor of what was then the company’s lone U.S. car plant, in Fremont, Calif., to work through what he called “production hell.”

Once those problems were overcome, Tesla’s stock began its meteoric rise that helped turn Mr. Musk into the world’s richest man and padded the company’s coffers. Tesla was sitting on around $17.5 billion in cash as of the first quarter.

Closely held SpaceX has dealt with setbacks in its business before. For instance, one of the company’s Falcon 9 rockets exploded during a test in 2016, destroying a Facebook satellite. At the time, it was the second catastrophic failure of such a launcher in 15 months. The company made adjustments and recovered. Four years later, it launched two NASA astronauts to the International Space Station, or ISS, the first launch of humans into orbit from U.S. soil since the agency’s last shuttle mission in 2011.

Mr. Musk’s businesses have notched notable successes in recent months. In addition to its record profits earlier in the year, Tesla reported its highest-ever vehicle production in June, with output at the Shanghai plant recovering. That month, NASA said it intended to hire SpaceX to handle five additional crewed flights to the ISS, a plan that would add to the nine flights the agency had already acquired under a contract valued at about $3.5 billion.

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SpaceX also regularly blasts satellites to orbit for commercial customers and U.S. spy agencies, while Starlink, its satellite-internet business, recently won regulatory approval to provide service to planes, boats and recreational vehicles.

Tesla’s share price has fallen more than 40% from its November high, but the company’s roughly $737 billion valuation as of Wednesday was still higher than the next eight auto makers combined. SpaceX’s valuation this year reached around $125 billion after it raised more than $1.7 billion, topping that of more established aerospace powerhouses Boeing Co. and

Lockheed Martin Corp.

Write to Rebecca Elliott at rebecca.elliott@wsj.com and Micah Maidenberg at micah.maidenberg@wsj.com

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Business

SpaceX Fires Employees Involved in Letter Critical of Elon Musk, Company

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SpaceX fired some employees involved in a letter that criticized Chief Executive

Elon Musk

and the way the company applies internal rules, according to an email to staff from SpaceX’s president and people familiar with it.

Gwynne Shotwell,

SpaceX’s president, said the company conducted an investigation and decided to terminate a number of employees who participated in the effort, according to the email, a copy of which was viewed by The Wall Street Journal. She said the letter diverted employees’ attention from company operations, and she took issue with how the note was circulated, the email showed.

Her email didn’t say how many people the company let go. At least two people who helped lead the effort were fired, according to a person familiar with the situation.

Some employees at the company recently wrote a letter that called Mr. Musk’s public statements and behavior, particularly during the past several weeks, embarrassing and distracting. The letter asked SpaceX management to publicly separate the company from Mr. Musk’s personal brand, and to take steps to address what it said was a gap between SpaceX’s stated values and its current systems and company culture.

Privately held SpaceX, with headquarters in Hawthorne, Calif., has around 12,000 employees, CEO Elon Musk said recently.



Photo:

Alisha Jucevic/Bloomberg News

Ms. Shotwell said the letter-writing effort distracted from SpaceX’s work, including coming satellite launches and the expected first attempt to fly its massive Starship rocket system into orbit. The letter upset many staffers, Ms. Shotwell said, saying they felt pressure to “sign onto something that did not reflect their views.”

“We have too much critical work to accomplish and no need for this kind of overreaching activism,” she said in the email.

Space Exploration Technologies Corp., the formal name for SpaceX, didn’t respond to requests for comment. The New York Times earlier reported on Ms. Shotwell’s email.

The company, based in Hawthorne, Calif., on Friday launched another batch of its Starlink broadband satellites to orbit, according to a SpaceX livestream.

It couldn’t be determined how many people signed the employee letter criticizing Mr. Musk. Privately held SpaceX has around 12,000 employees, Mr. Musk recently said. In addition to leading SpaceX, Mr. Musk is chief executive at

Tesla Inc.

TSLA 3.09%

and is pursuing an acquisition of

Twitter Inc.

In her email, Ms. Shotwell said SpaceX’s current leadership team is dedicated to ensuring the company has a great work environment; she criticized how those who participated in the letter used SpaceX resources.

“Blanketing thousands of people across the company with repeated unsolicited emails and asking them to sign letters and fill out unsponsored surveys during the work day is not acceptable,” she said.

After months of delays, the FAA released its long-awaited environmental assessment of SpaceX’s South Texas Starbase launch site. WSJ’s Micah Maidenberg explains what the decision means for SpaceX and the company’s Starship program going forward. Photo Illustration: Alexander Hotz/WSJ

The fired SpaceX employees have few avenues to challenge their terminations, legal experts said. Every U.S. state except Montana has “at will” employment laws, which means an employer can hire and fire workers for just about any reason except discriminatory ones.

The employees also can’t rely on the First Amendment since it doesn’t apply in a private employment context, said Stacy Hawkins, a professor at Rutgers Law School. The amendment only guarantees that the government can’t restrict speech, she said.

The workers may have some recourse with the National Labor Relations Act, which protects concerted activity when workers share information or views about the terms and conditions of employment, Ms. Hawkins said, but it is unclear whether the SpaceX employees’ statements would qualify under that statute.

In addition, the NLRA is restricted to nonsupervisory employees, said Kate Bischoff, a Minnesota employment lawyer and human resources consultant.

—Lauren Weber contributed to this article.

Write to Micah Maidenberg at micah.maidenberg@wsj.com

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Business

Stock Futures Fall in Wake of Turbulence on Wall Street

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U.S. stock futures dropped, putting markets on course for another day of bumpy trading, as investors awaited the Federal Reserve’s policy meeting and parsed a docket of earnings.

S&P 500 futures fell 1.1%, while futures tied to the technology-heavy Nasdaq-100 slumped over 1.7%. Futures linked to the blue-chip Dow Jones Industrial Average dropped 0.6%.

General Electric

fell 2.6% in premarket trading after reporting a fourth-quarter loss of $3.8 billion, while

Raytheon Technologies

declined 2.7% after posting quarterly revenue that missed analysts’ expectations. Meanwhile,

3M

shares rose 1.4% after the company reported a better-than-expected performance.

Market volatility has spiked in recent sessions, as investors have grown anxious about how rapidly the Federal Reserve will act to combat inflation by raising interest rates and shrinking its balance sheet. Meantime, earnings have failed to deliver the bumper beats investors became accustomed to last year, while geopolitical tensions surrounding Ukraine and Russia have weighed on sentiment. 

While earnings in 2021 were a source of strength for equity markets, recent results suggest companies are beginning to struggle with inflation and slowing economic growth, said

David Donabedian,

chief investment officer at CIBC Private Wealth.

“We have gotten so used to this cycle of companies blowing the roof off of earnings expectations, but so far that is not happening,” he said.

Markets whipsawed Monday, with the Nasdaq Composite declining as much as 4.9% before rallying to close 0.6% higher. The S&P 500 and Dow Jones Industrial Average staged similar comebacks. 

Meme stocks continued to suffer Tuesday.

Gamestop

and AMC declined 4% and 5%, respectively, in premarket trading, after falling sharply on Monday.

The U.S. dollar last year saw its largest increase in value since 2015. That is good for many American consumers, but it could also put a dent in stocks and the U.S. economy. WSJ’s Dion Rabouin explains. Photo illustration: Sebastian Vega/WSJ

Federal Reserve officials are set to debate the path of monetary policy, including the speed at which they could shrink the nearly $9 trillion bond portfolio, at their two-day meeting that starts Tuesday. Chairman

Jerome Powell

is expected to use his postmeeting comments to lay the groundwork for a cycle of interest-rate rises.

The yield on the benchmark 10-year U.S. Treasury note rose Tuesday to 1.785%, from 1.735% Monday. Bond yields move inversely to prices.

Overseas, Japan’s Nikkei 225 closed down 1.7%, with major decliners including technology and telecom giant SoftBank Group, which fell more than 5%. Australia’s S&P/ASX 200 and South Korea’s Kospi Composite both retreated more than 2%. Hong Kong’s Hang Seng Index shed 1.7%. 

European stocks rebounded, having closed Monday before U.S. indexes rallied. The pan-continental Stoxx Europe 600 index was up 0.6% Tuesday.

Asia markets fell following a volatile day on Wall Street.



Photo:

Ahn Young-joon/Associated Press

Write to Will Horner at william.horner@wsj.com, Rebecca Feng at rebecca.feng@wsj.com and Quentin Webb at quentin.webb@wsj.com

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Science

NASA Planetary Defense Mission Aims to Push Distant Asteroid Off Its Path

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The first planetary defense mission got under way early Wednesday, when the National Aeronautics and Space Administration launched a space probe designed to deflect a distant asteroid in a test of technology that might one day save the world.

The $324 million Double Asteroid Redirection Test, or DART, mission—a practice run for future efforts to protect Earth from collisions with asteroids and comets—launched aboard a SpaceX Falcon 9 rocket at 1:21 a.m. EST from Vandenberg Space Force Base in California. Next fall, after a journey of more than 6 million miles, the probe will crash at 15,000 miles an hour into Dimorphos, a tiny moonlet that orbits a larger asteroid called Didymos.

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Business

Elon Musk’s Feud With Biden Administration Escalates

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Text size

Tesla CEO Elon Musk


Win McNamee/Getty Images


Tesla

‘s battle with the Biden administration escalated after CEO Elon Musk called President Joe Biden a “puppet” for the United Auto Workers in a Sunday tweet.

Musk was replying to a tweet outlining electric-vehicle purchase tax credits proposed in the president’s infrastructure bill. The bill includes an extra $4,500 for EVs assembled by unionized labor.

Purchase tax credits lower the cost of an EV by giving a buyer a tax deduction. Right now, Tesla vehicles no longer quality for federal tax credits.

Tesla’s plant in Fremont, Calif., isn’t unionized, so the proposal could give EVs from other auto makers—including


Ford Motor

(F) and


General Motors

(GM)—a pricing advantage depending on where the vehicles are assembled.

Tesla (ticker: TSLA) and the White House weren’t immediately available for comment Sunday evening.

The problems between Tesla and the Biden administration began when the president didn’t invite Tesla, the largest U.S. EV producer, to the White House when he announced his EV goals in early August. Biden wants 50% of the cars sold in the U.S. to be all-electric by 2030. GM, Ford, and the UAW attended the ceremony.

Musk called the decision odd in a tweet. He tweeted in late September that Biden was “still sleeping” after the president didn’t call to congratulate SpaceX and its civilian astronaut mission, which raised money for St. Jude’s Children’s Research Hospital.

After that, still in September, at the Code technology conference in California, Musk suggested that the Biden administration was biased against Tesla, adding the administration “seems to be controlled by unions.”

Musk also has a problem with a Biden appointment to the National Highway Transport Safety Administration. Missy Cummings, a Duke University professor who will be a safety advisor to the NHTSA, has questioned Tesla’s autonomous driving software on several occasions in the recent past. She is concerned that Tesla’s self-driving features could be misused by drivers . Musk called Cummings “extremely biased” in a tweet.

Tesla and Cummings didn’t respond to requests for comment at the time of Musk’s Twitter comment.

All of this matters to investors only if it impacts Tesla’s bottom line. The $4,500 tax credit could matter, although the bill isn’t law yet. And the NHTSA hasn’t yet made recommendations on how Tesla implements and tests its autonomous-driving features. All auto makers are offering driver-assistance features that are designed to improve safety and convenience.

The spat hasn’t hurt Tesla stock yet. Tesla shares rose more than 40% in October, while the


S&P 500
rose 7%. Strong deliveries and earnings and new fleet business helped push Tesla’s market capitalization north of $1 trillion for the first time in October.

Write to Al Root at allen.root@dowjones.com

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Business

Boeing Reports Loss, Hit by Dreamliner and Starliner Setbacks

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The plane maker said it is benefiting from a recovery in air travel in recent months, and has been delivering new planes to satisfy growing demand for flights.

Boeing has sold more jets than rival

Airbus

SE this year, and efforts to cut costs have helped reduce the drain on its finances. But it is still hampered by manufacturing problems that have frozen most 787 deliveries for much of the past year and technical issues that forced its Starliner spacecraft launch to be scrubbed.

The company took a $183 million charge in the latest quarter to cover disrupted Dreamliner production, which has been slowed to about two a month from around five after Boeing accumulated more than 100 jets awaiting delivery. Boeing estimated on Wednesday the cost of the disrupted production could be as high as $1 billion.

The $185 million charge on the Starliner space taxi follows a $410 million hit last year to pay for a new launch after the first in December 2019 failed to reach the correct orbit. Faulty valves thwarted another launch attempt during the summer, with the flight now delayed until next year.

A new type of defect on Boeing’s Dreamliner aircraft surfaced recently, the latest in a series of issues that have led to a halt in deliveries. The company now has more than $25 billion of jets in its inventory. WSJ’s Andrew Tangel explains how Boeing got here. Photo: Reuters

Boeing Chief Executive

David Calhoun

said in an internal message Wednesday the charges reinforced “the importance of our efforts to enhance our own performance and drive stability in our operations.”

Mr. Calhoun likened work on the Dreamliner to earlier fixes of the 737 MAX, noting the company’s plans to produce 31 of those jets a month early next year, up from 19 currently. Boeing made various fixes to the MAX jet’s software, hardware and related training package while regulators grounded the aircraft for nearly two years.

The net loss of $132 million in the quarter compared with a $466 million loss in the year-ago period. Sales climbed 8% to $15.3 billion. The per-share loss of 19 cents compared with 79 cents a year earlier.

Boeing burned $262 million in cash during the quarter compared with $4.8 billion a year earlier. The improvement was helped by cost cuts, receipts from airplane deliveries and a tax gain. The core loss of 60 cents, which excludes pension costs, was better than the loss of 20 cents estimated by analysts polled by FactSet.

The company’s shares were slightly lower in morning trading.

Boeing’s services arm was its most profitable in the quarter. Sales of spare parts is an area of growth for aerospace right now as airlines return parked aircraft to service, and revenue at the services unit in the quarter almost matched those of the core commercial airplanes business.

Over the past year, Boeing has been dealing with a series of production defects with its 787 Dreamliner, the popular wide-body jet often used on long-haul flights. The manufacturing problems have drawn increased scrutiny from the Federal Aviation Administration.

The plane maker has built up an inventory of more than 100 Dreamliners worth more than $25 billion as it addresses defects and seeks regulatory approval for inspections before handing over the jets to customers.

Boeing expects to boost production of its Dreamliner after it resumes deliveries—though Mr. Calhoun said on CNBC he couldn’t predict when that would happen. The market for wide-body jets has been depressed during the Covid-19 pandemic as countries around the world imposed travel restrictions. That has eased pressure on Boeing while it addresses Dreamliner production issues.

Boeing has been hoping for significant aircraft deals with Chinese customers amid continued U.S. trade tensions with the country. China’s aviation regulators haven’t approved the 737 MAX to resume flying customers, but Mr. Calhoun said on CNBC the authorities have been working hard on the aircraft’s recertification.

Write to Doug Cameron at doug.cameron@wsj.com and Andrew Tangel at Andrew.Tangel@wsj.com

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Technology

Boeing’s Starliner Launch Could Face Delay of Several Months

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Boeing Co. ’s Starliner space capsule launch could be delayed several months as the company will likely need to remove it from atop a rocket for repairs, people familiar with the matter said.

Such a delay would be a setback for Boeing’s space program. The company has spent years developing the Starliner and was supposed to launch it late last month to dock with the International Space Station, without crew on board—after a failed attempt a year and a half ago. Ultimately, the capsule is supposed to ferry astronauts to the space station.

Boeing engineers have been working to repair a problem with some of the valves in a propulsion system on the Starliner that was discovered earlier this month while the vehicle sat on a launchpad. The company first said it was investigating the valve issues last week, and on Monday disclosed that 13 valves had failed to open as expected during preflight checks.

Nine of the valves are now functioning and Boeing engineers are working to address the other four, the company said Thursday.

“Over the past couple of days, our team has taken the necessary time to safely access and test the affected valves,” said John Vollmer, a Boeing executive overseeing the Starliner.

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Science

Plans for the Boeing Starliner Launch

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Boeing Co. said a second attempt to launch its Starliner space taxi has been canceled, with launch officials on Tuesday citing inclement weather. The testing of the capsule precedes its planned first flight with astronauts on board later this year.

The National Aeronautics and Space Administration previously said it has another launch window on Wednesday.

A botched effort in late 2019 dented the record of a company that has been at the forefront of U.S. space exploration, including the Apollo missions to the moon. The Starliner is the latest of an array of new rockets, capsules and other vehicles aimed at furthering U.S. ambitions in a new space race to the moon, Mars and beyond.

The Starliner would give the U.S. more options to reach low earth orbit and the space station. U.S. astronauts had to hitch rides on Russian Soyuz spacecraft to get there following the retirement of the Space Shuttle in 2011. NASA opted to outsource a replacement through its Commercial Crew Program and picked Boeing and Space Exploration Technologies Corp., the formal name for Elon Musk’s SpaceX, to provide space taxi services.

The CST-100 Starliner is slated to deliver more than 400 pounds of NASA cargo and crew supplies, and bring back material including oxygen tanks. A mannequin named Rosie the Rocketeer is expected to be on board, equipped with sensors to capture data ahead of a crewed mission.

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