SE agreed to revive orders for close to 75 aircraft from Qatar Airways after reaching a settlement with the Middle East airline over a long-running dispute about chipping paint on its A350 wide-body models.
A spokesman for Airbus said it would now go ahead with delivering 50 A321 narrow-bodies and 23 remaining A350 twin-aisles previously ordered by Qatar.
The orders had been scrapped as part of an escalating, multibillion-dollar legal battle over the paint issue, which the airline had claimed could pose a safety concern. Airbus repeatedly denied the claims.
Airbus and Qatar Airways earlier Wednesday said in a joint statement that they had reached an “amicable and mutually agreeable settlement” in relation to the legal dispute. The companies didn’t disclose the details of the settlement other than to say the agreement didn’t amount to an admission of liability from either party. A program to repair the degradation on Qatar’s current fleet is under way, the companies added.
Qatar Airways had previously grounded 29 of its A350 jets and refused new deliveries over the issue, reducing its capacity amid a surge in travel to Doha for the 2022 FIFA World Cup. The airline has said the peeling paint was exposing the meshed copper foil that is designed to protect the aircraft from lightning strikes.
That led Qatar Airways to initiate legal proceedings against Airbus in London, in which the carrier had sought damages partly based on the impact on its operations from not being able to use the aircraft. A possible trial had been scheduled for later this year.
While the paint issue has also affected other A350s in service at other Airbus customers, only Qatar Airways had taken the step to unilaterally ground the aircraft. Airbus and the European Union Aviation Safety Agency, which oversees the Toulouse, France-based plane maker, have insisted that the issue is only cosmetic.
The situation had led to a broad fallout between Airbus and one of its biggest customers. In August, Airbus ended all new business with Qatar Airways, canceling contracts valued at more than $13 billion according to the latest available list prices and before the hefty discounts plane makers typically give to customers.
After Airbus canceled a deal to sell Qatar Airways 50 of its A321 jets, the Gulf carrier ordered up to 50 of rival
Boeing Co.
’s 737 MAX 10 single-aisle jets within two weeks. Qatar Airways had previously canceled most of an existing MAX order in 2020 after receiving five of the planes.
Airbus lawyers alleged that Qatar Airways had exaggerated concerns about the issue in an attempt to claim compensation and refuse delivery of aircraft that it didn’t need as the pandemic hit demand for air travel. The plane maker complained in court that the airline and its regulator, the Qatar Civil Aviation Authority, had failed to provide documentation that showed the technical justifications behind grounding the aircraft.
Qatar Airways has said it provided images of the damage, which it purported showed the scale of the issue and the potential safety risk.
Qatar Airways Chief Executive
Akbar Al Baker
has long had a reputation as a tough customer, publicly lashing out at both Airbus and Boeing when he perceives delivery or quality issues.
Russian forces pressed an offensive in eastern Ukraine on Friday, seeking to seize an advantage in the months before tanks pledged by Kyiv’s Western allies begin to arrive on the battlefield.
Ukrainian forces said on Friday they had repelled Russian attacks on Vuhledar and several other villages in the eastern Donetsk region over the preceding 24 hours. Russia also launched 148 attacks along the front line with Ukrainian forces in the southern Zaporizhzhia region over the past day using tanks, rockets and artillery, the regional military administration said.
Russia’s Defense Ministry said it had undertaken more offensive maneuvers over the past 24 hours both in Zaporizhzhia and Vuhledar, where it said it had launched strikes on Ukraine’s 72nd Brigade and had downed a Ukrainian Su-25 warplane.
The European Union on Friday, meanwhile, extended its economic sanctions on Russia for the next six months. The decision affects a swath of sanctions imposed last year, from financial sanctions on Russian banks and its central bank to export and import bans.
There had been concerns that Hungarian Prime Minister
Viktor Orban
could push to weaken the sanctions package. In recent months, he has attacked the EU’s sanctions, especially the EU oil import embargo on Moscow, saying they are more costly for Europe than for Russia. Decisions on sanctions are taken by consensus among the EU’s 27 member states.
While Hungary stepped back from objecting to renewing the economic sanctions, it is pushing for the EU to drop sanctions on several Russian executives who have been blacklisted by the EU, according to several EU diplomats. A decision is due in March on rolling over these sanctions.
Ukraine’s President
Volodymyr Zelensky
discussed the situation in Vuhledar and the city of Bakhmut at a meeting with military chiefs on Thursday, he said in his nightly address.
Russian servicemen in Ukraine launch rockets in an image released Friday by the Russian Defense Ministry.
Photo:
Russian Defense Ministry Press O/Zuma Press
After months of setbacks, Russian forces earlier this month broke through Ukrainian defenses in the east to seize the town of Soledar. That has made it harder for Ukraine to keep hold of neighboring Bakhmut, which has been at the epicenter of the war for several months. The city is central to Russia’s main goal: to take over the remainder of Donetsk, and the wider industrial area known as Donbas. But the fighting there has come at huge cost for both sides.
“The more Russia loses in this battle for Donbas, the less its overall potential will be,” the Ukrainian president said. “We know what the occupiers are planning. We are countering it.”
Ukrainian officials warn that Russia is gearing up for a renewed onslaught this spring after mobilizing some 300,000 men to shore up its faltering campaign last fall. For Moscow, there is a window before tanks pledged this week by Kyiv’s Western allies arrive in Ukraine, potentially tilting the battlefield again.
Russia’s Defense Ministry said Friday its forces had launched a series of strikes over the past day on Ukrainian military and infrastructure targets that had disrupted the transfer of weapons, including those from countries in the North Atlantic Treaty Organization, being delivered to the front.
Kyiv’s allies are rushing to assemble two battalions’ worth of Leopard 2 tanks from a range of European countries after Germany and the U.S. committed to provide their own tanks. The initial battalion is expected to arrive in Ukraine within three months.
A Ukrainian serviceman in Bakhmut rests next to an armored medical vehicle.
Poland, which has been at the forefront of pushing for increased military support for Ukraine, on Friday said it would send 60 upgraded T-72 tanks—half of them Polish-made PT-91 Twardy tanks—in addition to its contribution of 14 Leopards.
The U.S. has also pledged 31 M1 Abrams tanks, but those will take much longer to arrive in Ukraine because they are being procured through the defense industry instead of being pulled from existing American defense stocks.
Mr. Zelensky has urged Western countries to speed up the delivery of tanks and the training of Ukrainian forces to use them as Russia regains initiative.
Russian officials have said the tanks won’t alter dynamics on the battlefield and will only lead to escalation in the war.
Stefano Sannino,
secretary-general of the European Union’s European External Action Service, said during a visit to Japan that German and U.S. tank provisions weren’t escalatory and were meant to help Ukrainians defend themselves, rather than making them attackers. The decision to supply them is in response to Russian escalation, Mr. Sannino said, accusing Moscow of carrying out indiscriminate attacks on civilians and cities.
Shelling has caused damage in central Bakhmut as Ukrainian and Russian forces fight over the city.
Photo:
Emanuele Satolli for The Wall Street Journal
The tanks will enable Ukraine to destroy enemy tanks, offer greater protection and support combined operations, the U.K.’s Ministry of Defense said.
Assessing recent Russian claims of advances, the U.K.’s Defense Ministry said Russian forces had likely conducted local, probing attacks near Vuhledar in the east and Orikhiv in the Zaporizhzhia region but that Russia hadn’t achieved substantial gains.
Russian military sources are deliberately spreading misinformation in an effort to imply that the Russian operation is sustaining momentum, the ministry said.
Write to Isabel Coles at isabel.coles@wsj.com
As the U.S. and its allies start sending Abrams, Leopards and other tanks to help Ukraine, those vehicles are set to change the dynamics of the war along the front lines. WSJ examines how the tanks that Ukraine will receive from the West compare with Russia’s vehicles. Illustration: Adam Adada
The Justice Department is seeking the breakup of Google’s business brokering digital advertising across much of the internet, a major expansion of the legal challenges the company faces to its business in the U.S. and abroad.
A lawsuit filed Tuesday, the Justice Department’s second against the
Alphabet Inc.
GOOG -1.98%
unit following one filed in 2020, alleges that Google abuses its role as one of the largest brokers, suppliers and online auctioneers of ads placed on websites and mobile applications. The filing promises a protracted court battle with wide-ranging implications for the digital-advertising industry.
Filed in federal court in Virginia, the case alleges that Google abuses monopoly power in the ad-tech industry, hurting web publishers and advertisers that try to use competing products. Eight states, including California and New York, joined the Justice Department’s lawsuit.
The lawsuit asks the court to unwind Google’s “anticompetitive acquisitions,” such as its 2008 purchase of ad-serving company DoubleClick, and calls for the divestiture of its ad exchange.
“For 15 years Google has pursued a course of anticompetitive conduct that has allowed it to halt the rise of rival technologies, manipulate auction mechanics, insulate itself from competition, and forced advertisers and publishers to use its tools,” Attorney General
Merrick Garland
said at a press conference Tuesday. “Google has engaged in exclusionary conduct that has severely weakened if not destroyed competition in the ad-tech industry.”
Attorney General Merrick Garland said Tuesday that the digital-advertising industry was harmed by Google’s allegedly monopolistic conduct.
Photo:
Al Drago/Bloomberg News
A Google spokesman said the lawsuit “attempts to pick winners and losers in the highly competitive advertising technology sector.”
“DOJ is doubling down on a flawed argument that would slow innovation, raise advertising fees, and make it harder for thousands of small businesses and publishers to grow,” the spokesman said.
By calling for specific divestitures from Google’s ad-tech business, the Justice Department lawsuit went further in seeking a breakup than some antitrust experts had expected. Shares of Alphabet fell by about 2% in trading on Tuesday.
Though largely invisible to internet users, the ad-tech tools controlled by Google facilitate much of the buying and selling of digital ads that helps fund online publishers. Google’s business includes a tool publishers can use to offer ad space, a product for advertisers to buy those slots and an exchange that automatically links bidders with webpages as they are being loaded for individual users.
Big tech companies such as Google are under a barrage from lawmakers and regulators across multiple continents who have targeted the companies’ dominance in online markets. Justice Department officials also are investigating
Apple Inc.
The Federal Trade Commission has sued
Meta Platforms Inc.’s
Facebook unit over antitrust allegations and
Microsoft Corp.
to block its planned $75 billion acquisition of
Activision Blizzard Inc.
President Biden recently urged lawmakers from both parties to unite behind legislation seeking to rein in tech giants. The European Union also has opened cases looking at alleged anticompetitive conduct by Google, Meta and other companies.
The Justice Department’s 2020 lawsuit against Google targeted its position in online search markets, including an agreement to make Google search the default in Apple’s Safari web browser. Google is fighting the case, which is expected to go to trial this year.
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Alphabet gets about 80% of its business from advertising. The Justice Department’s new suit targets the subset of that ad business that brokers the buying and selling of ads on other websites and apps. Google reported $31.7 billion in revenue in 2021 from that ad-brokering activity, or about 12% of Alphabet’s total revenue. Google distributes about 70% of that revenue to web publishers and developers.
Last year, Google offered to split off parts of its ad-tech business into a separate company under the Alphabet umbrella to fend off the most recent Justice Department investigation. DOJ officials rejected the offer and decided to pursue the lawsuit instead.
For years, Google has faced allegations from advertising- and media-industry executives, lawmakers and regulators that its presence at multiple points of the online ad-buying process harms publishers and gives it an unfair advantage over rivals. Google also operates the most popular search engine and the largest online video-streaming site, YouTube, giving rise to allegations it has tilted the market in its own favor.
Rivals say that Google’s power in digital advertising stems from a series of acquisitions Google used to build its ad-tech business, beginning with the company’s $3.1 billion purchase of DoubleClick. The FTC approved the merger in a controversial decision. Google went on to purchase a host of other startups including the mobile-advertising company AdMob.
“Having inserted itself into all aspects of the digital advertising marketplace, Google has used anticompetitive, exclusionary, and unlawful means to eliminate or severely diminish any threat to its dominance over digital advertising technologies,” the complaint read.
Google has said it has no plans to sell or exit the ad-tech business. It has also strongly contested claims in a lawsuit filed by state attorneys general, led by Texas, containing allegations similar to the Justice Department complaint. A federal judge denied the bulk of Google’s motion to dismiss the case last year, allowing it to proceed to the discovery stage and ultimately toward trial.
Google’s Android operating system is the most popular in the world—you can find Android code on everything from Peloton bikes to kitchen appliances and even NASA satellites. WSJ’s Dalvin Brown explains why it is the world’s most-used OS. Illustration: Rami Abukalam
Any divestiture of parts of Google’s ad-tech business would cause big ripple effects across the online advertising industry, which has recently shown signs of weakness as consumers dial back purchases in response to worsening economic conditions.
Breaking off parts of Google’s ad-tech business from the rest of the company could take years of litigation to resolve. Depending on the outcome of the case, ad-tech executives have said the results could range from a higher share of ad dollars flowing to publishers to lower overall spending because digital ads would be less efficient without Google brokering them.
The 149-page complaint makes detailed allegations about the internal workings of Google’s ad-tech operations. The suit alleges, for instance, that Google used anticompetitive tactics to build up the market share of its own ad server, which issues requests for advertisements on behalf of websites, and then used that market power to effectively push publishers into sending their ad inventory only to Google’s in-house ad exchange, AdX.
The Justice Department argues, in part, that this conduct locked out rival ad-tech providers, increasing prices for advertisers and costs of publishers.
“Google keeps at least thirty cents—and sometimes far more—of each advertising dollar flowing from advertisers to website publishers through Google’s ad tech tools,” the lawsuit alleges. “Google’s own internal documents concede that Google would earn far less in a competitive market.”
The lawsuit also alleges that Google executives worked to kill a rival online-bidding technology called “header bidding,” which the lawsuit says the company referred to internally as an “existential threat.” As part of a plan dubbed Project Poirot, the company allegedly changed its own ad-buying tools to underbid on behalf of advertisers when they turned to outside ad exchanges that used header bidding, so those rivals would lose more auctions and “dry out,” the complaint says.
At one point, Google also approached
Amazon.com Inc.,
to ask “what it would take for Amazon to stop investing in its header bidding product,” the complaint alleges, adding that Amazon rebuffed those requests.
“Google uses its dominion over digital advertising technology to funnel more transactions to its own ad tech products where it extracts inflated fees to line its own pockets at the expense of the advertisers and publishers it purportedly serves,” the complaint read.
The Justice Department case overlaps in some ways with the late 2020 lawsuit from the group of U.S. states led by Texas.
In Tuesday’s complaint, the Justice Department quotes some of the same internal communications as the Texas-led lawsuit, including how one Google executive compared the company’s control over ad-tech to the financial sector: “The analogy would be if Goldman or Citibank owned the NYSE,” referring to the New York Stock Exchange.
The case also shares similarities with an investigation that the EU’s top antitrust enforcer, the European Commission, opened in 2021, as well as one by the U.K.’s Competition and Markets Authority. Those probes are exploring allegations that Google favors its own ad-buying tools in the advertising auctions it runs, but also look at other elements of Google’s ad-tech business. The EU, for instance, is also looking at Google’s alleged exclusion of competitors from brokering ad-buys on its video site YouTube.
Mr. Garland said Tuesday that the Justice Department filed its own lawsuit because the federal government was harmed by Google’s allegedly monopolistic conduct. Federal agencies have since 2019 spent over $100 million on display ads, the complaint says. The government paid inflated fees and was harmed by manipulated advertising prices because of Google’s anticompetitive conduct, the lawsuit alleges.
Microsoft is deepening its partnership with OpenAI, the company behind ChatGPT and Dall-E. That has investors and analysts speculating whether Microsoft could challenge Google’s dominance in search. WSJ Heard on the Street columnist Dan Gallagher joins host Zoe Thomas to discuss how AI could affect search and at what cost.
Jonathan Kanter,
the assistant attorney general for antitrust, said while there are similarities with other lawsuits against Google, the Justice Department’s complaint is based on its own investigation that yielded “meticulous detail” about Google’s ad-tech business.
“We detail many facts, many episodes that in the individual and in the aggregate have maintained numerous monopolies,” Mr. Kanter said.
Google has attempted to settle the claims against its ad-tech business. In addition to offering to split off parts of its ad-tech business to avoid the Justice Department suit, the company last year discussed with the EU an offer to allow competitors to broker the sale of ads directly on the video service.
In 2021, the company agreed to give U.K. antitrust regulators effective veto power over elements of its plans to remove a technology called third-party cookies from its Chrome browser to settle an investigation there into the plan.
In France, Google agreed to pay a fine of 220 million euros, equivalent to about $239 million, and to improve data access to competing ad-tech companies, to not use its data in ways rivals couldn’t reproduce to settle a similar antitrust investigation in the country.
—Keach Hagey contributed to this article.
Write to Miles Kruppa at miles.kruppa@wsj.com and Sam Schechner at Sam.Schechner@wsj.com
Businesses and lawyers are beginning to assess what the Federal Trade Commission’s proposed ban of noncompete clauses in employment contracts could mean for worker mobility, wages and the way future compensation agreements are structured.
While a full or partial ban could expand the pool of potential hires, it also would weaken a tool that employers have come to rely on to retain talent and protect trade secrets and other proprietary information, lawyers say. More companies likely would turn to a patchwork of alternative mechanisms to keep people from leaving and taking valuable information with them, including nondisclosure agreements and employment contracts that reward longevity, they say.
“Employers have operated with an understanding that they can protect their interests through noncompetes,” said Matthew Durham, a Salt Lake City-based attorney with Dorsey & Whitney LLP who advises companies on employment matters. “What you’re seeing, reflected in the FTC proposal and elsewhere, is a growing hostility to the idea that there should be those kinds of restrictions, and it’s changing the environment that employers have been comfortable with in the last number of years.”
The FTC proposed a ban this month on nearly all noncompetes, saying that the clauses—which typically prohibit workers from moving to a new employer or starting new ventures of their own—hamper competition in the labor market, suppress wages and hold back innovation and entrepreneurship. The proposal came in response to an executive order from President Biden in 2021.
Businesses say they impose noncompete clauses on employees to protect trade secrets and other confidential information, including customer lists and financial data.
The FTC contends that noncompete clauses discourage innovation and entrepreneurship.
Photo:
Eric Lee for The Wall Street Journal
Mr. Durham and others say they believe the FTC may narrow its rule after hearing comments from the public, including employers and business organizations that have already signaled their opposition to the current proposal. The agency could, for example, allow noncompetes for highly compensated workers.
Noncompetes are common in employment contracts for senior employees like software engineers, sales representatives and top executives. Over time, they have been applied to many parts of the U.S. workforce, including some janitors, baristas, schoolteachers and entry-level workers. According to the FTC, one in five U.S. workers is currently subject to a noncompete clause.
Noncompetes are regulated at the state level, and many states have already taken action to limit use of the clauses by, in some cases, forbidding employers from imposing them on people earning under a particular wage threshold or for certain types of workers.
“The vast majority of people in America can’t afford a lawyer to defend a noncompete case,” said Jonathan Pollard, an attorney in Florida who represents workers whose employers are trying to enforce noncompete clauses. “Just the threat of enforcement is often enough to restrain talent in the labor market.”
The Federal Trade Commission proposed a new ban on noncompete clauses, which the agency says hurts workers and competition. Companies argue they protect trade secrets. WSJ breaks down what a federal ban could mean for workers and businesses. Photo illustration: Jacob Reynolds
Some states, such as California and Oklahoma, hold that the clauses are unenforceable in all or nearly all employment contracts.
A number of studies suggest noncompetes suppress wages and innovation. A review of Oregon’s 2008 ban on noncompetes for hourly workers found that wages rose an average of 2% to 3%. Another study, examining Hawaii’s 2015 ban on noncompete agreements for high-tech workers, found an 11% increase in job moves and a 4% increase in new-hire salaries.
The clauses restrain not just pay and entrepreneurship, but also professional development, workers and some attorneys say.
Daniel Bachhuber had worked as a software consultant for years when he decided to take an in-house job in the fall of 2018. His new employer required that he sign a one-year noncompete agreement, which he said was so broad it would have prevented him from practicing his core skills if he were to leave the company or be fired.
Mr. Bachhuber balked. Earlier in his career, he had been laid off a few weeks into a new job, just after his first child was born. If that happened at the new job, he recalled thinking, he would be unable to earn a living for a year. “I’m always thinking, worst case scenario, what kind of downstream protection do I have?” the 35-year-old said. “Even if I was employed just one day, I couldn’t go back to the same clients I had.”
Daniel Bachhuber turned down a job after an employer wouldn’t change a noncompete clause.
Photo:
Mason Trinca for The Wall Street Journal
He consulted a lawyer and tried to renegotiate the contract, hoping to salvage a role that would have expanded his skills and given him a chance to work directly with the chief technology officer on special projects. The company declined to change the noncompete clause and, reluctantly, Mr. Bachhuber turned down the position.
Employers have other tools to protect information besides noncompete agreements, including nondisclosure agreements, trade secret laws and nonsolicitation agreements, which prohibit workers from poaching customers or employees of their prior firm.
But those tools generally can only be used after an employee violates the agreement, said Julie Levinson Werner, who represents employers as a partner with law firm Lowenstein Sandler LLP. “Once someone goes to another company, you’re really on the honor system. You have no way to monitor what information is being disclosed or not,” she said.
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Observers on both sides say that limitations on the clauses will compel employers to get more creative about how they retain talent, using everything from compensation to career advancement to keep workers engaged and loyal to the company. Some companies use deferred compensation—such as retention bonuses or rolling stock options that vest after, say, three years—to give people incentives to stay.
“Do you get better results with honey or vinegar?” said Ms. Werner. “If you want to motivate people and have them happy to stay, you have to look at compensation, the overall environment, how you treat them.”
The fate of the FTC’s final rule is up in the air. After a 60-day comment period, the commissioners will consider potential changes to the initial proposal and then issue a final rule. That rule will likely be challenged by business groups or individual companies, and courts will determine its trajectory, attorneys say.
The Biden administration is preparing to seek congressional approval for a $20 billion sale of new F-16 jet fighters to Turkey along with a separate sale of next-generation F-35 warplanes to Greece, in what would be among the largest foreign weapons sales in recent years, according to U.S. officials.
Administration officials intend the prospect of the sale to prod Turkey to sign off on Finland and Sweden’s accession to the North Atlantic Treaty Organization, which Ankara has blocked over objections to their ties to Kurdish separatist groups. Congress’s approval of the sale is contingent on Turkey’s acquiescence, administration officials said. The two countries ended decades of neutrality when they decided to join NATO last year in reaction to Russia’s invasion of Ukraine.
The sale to Turkey, which the administration has been considering for more than a year, is larger than expected. It includes 40 new aircraft and kits to overhaul 79 of Turkey’s existing F-16 fleet, according to officials familiar with the proposals.
Congressional notification of the deal will roughly coincide with a visit to Washington next week by Turkey’s Foreign Minister
Mevlut Cavusoglu.
The sale to Turkey also includes more than 900 air-to-air missiles and 800 bombs, one of the officials said.
Turkish President Recep Tayyip Erdogan has faced U.S. pressure to approve NATO expansion.
Photo:
adem altan/Agence France-Presse/Getty Images
The separate sale to Greece, which was requested by the Greek government in June 2022, includes at least 30 new F-35s. The F-35 Joint Strike Fighter is the U.S.’s most advanced jet fighter. While officials described the timing of the notifications for both Turkey and Greece as coincidental, it could quell protests from Athens over the F-16 sale if its request is also granted. Greece and Turkey are historic regional rivals and a sale to Turkey alone would likely draw swift condemnation from Athens.
The potential sale of the aircraft could have far-reaching implications for Washington’s efforts to shore up ties with a pair of NATO allies amid the Western response to Russia’s assault on Ukraine.
A State Department spokesman declined to comment on potential arms transfers as a matter of policy until and unless they are formally notified to Congress. Congress has never successfully blocked a foreign arms sale requested by the White House.
The proposed deal with Turkey comes at a moment of tension in U.S.-Turkish relations, with Washington also attempting to convince President Recep
Tayyip Erdogan
to do more to enforce sanctions on Russia and to approve the entry of Finland and Sweden into NATO.
The proposal also sets up a possible showdown with some congressional leaders who have vowed to oppose weapons sales to Turkey. Sen.
Bob Menendez,
a Democrat from New Jersey who is the chairman of the Senate Foreign Relations Committee, has said he wouldn’t approve any F-16 sale to Turkey, citing human-rights concerns.
In recent months, Mr. Erdogan has also threatened to launch a new military incursion against Kurdish militants in Syria. Last month a Turkish court also convicted the mayor of Istanbul, a popular opponent of Mr. Erdogan, of insulting public officials in what human rights groups said was part of a crackdown on the Turkish opposition. The Turkish government says its courts are independent.
Under U.S. arms-export laws, Congress will have 30 days to review the deal. If Congress wants to block the deal it must pass a joint resolution of disapproval. Congress can also pass legislation to block or modify a sale at any time until the delivery.
The Biden administration is looking to sell at least 30 new F-35 jet fighters to Greece.
Photo:
robert atanasovski/Agence France-Presse/Getty Images
U.S. officials say they are encouraging Mr. Erdogan to drop his opposition to Finland and Sweden joining NATO. One official characterized the F-16s as the “carrot on a stick” to get Turkey to agree.
This, officials said, could ease opposition to the sale among some members of Congress. Officials within the State Department have argued for months that the expansion was imperative to NATO’s collective security. However, officials expect that while the Greece package could sail through Congress, the F-16s may be delayed over some members’ reluctance to embolden Ankara with the additional firepower.
Mr. Erdogan first threatened to veto the two countries’ entrance over their ties to Kurdish militant groups in Iraq and Syria. Turkey has fought a slow-burning war with Kurdish armed groups for decades in a conflict that has left tens of thousands dead.
NATO leaders say that Finland and Sweden have addressed Turkey’s concerns, upholding an agreement signed last year that called for both countries to evaluate Turkish extradition requests and drop restrictions on arms sales to Ankara.
Turkish officials say that Sweden hasn’t done enough to uphold its obligations to Turkey, citing what they say is continuing activity by the militant Kurdistan Workers’ Party in Sweden. The Turkish government this week summoned Sweden’s ambassador over a demonstration in Stockholm in which protesters hung a puppet of Mr. Erdogan by its feet. The Turkish president’s hard line against Sweden has broad support within Turkey, including among opposition parties, who have long opposed what they see as a permissive approach to Kurdish militant groups in Europe.
The timing of a vote on NATO expansion in the Turkish parliament will also depend on Turkey’s national election this year, in which Mr. Erdogan faces a close race amid public discontent over the country’s struggling economy.
The Turkish Ministry of Foreign Affairs didn’t respond to a request for comment.
The Biden administration remains cautiously optimistic that Turkey will eventually come around on Finland and Sweden. U.S. officials said last year that there would be no quid pro quo for Turkey’s approval of the NATO expansion, and said that the timing of the F-16 sale was dependent on the administration’s own internal process to complete the deal.
The proposed sales also come amid heightened tensions between Turkey and Greece, two longtime adversaries who have traded threats over the past year in the eastern Mediterranean.
Turkey was originally a participant in the U.S.’s cutting-edge F-35 program but was expelled after Mr. Erdogan approved the purchase of Russia’s S-400 air defense system. The U.S. government said the Russian weapons system could potentially hack the F-35.
Biden administration officials have argued that selling F-16s to Turkey could help restore ties with the country, which maintains the second-largest army in NATO.
Under Mr. Erdogan, Turkey has played an important role in the Ukraine crisis, facilitating negotiations over prisoner exchanges and helping to broker an agreement that allowed Ukraine to resume its exports of grain through Black Sea ports. Mr. Erdogan’s close relationship with Russia’s President
Vladimir Putin
has also raised concerns in Washington, with scrutiny of inflows of Russian money to Turkey, including oligarch assets.
Finland and Sweden have formally applied to join NATO, but Turkey has threatened to block them from joining. WSJ’s Shelby Holliday explains why Turkish President Recep Tayyip Erdogan sees the expansion as a threat to Turkey’s national security. (Video first published in May 2022). Photo composite: Sebastian Vega
—William Mauldin contributed to this article.
Write to Jared Malsin at jared.malsin@wsj.com and Vivian Salama at vivian.salama@wsj.com
Canceled or delayed flights can cost travelers money. Getting an airline to pay you back for expenses like hotel stays and rental cars isn’t impossible, but it can involve lots of legwork.
Southwest pledged to provide refunds to passengers on canceled or significantly delayed flights between Dec. 24 and Jan. 2, but the airline is also providing reimbursement for additional expenses including the cost of staying at a hotel or renting a car. Passengers were also given 25,000 frequent-flier points in a move by Southwest executives to win them back.
Airline passengers “have very few rights,” said
Paul Hudson,
president of FlyersRights, a consumer advocacy organization. Getting the remuneration that passengers believe they are entitled to can come down to perseverance and communicating extensively with the airline over an extended period.
Here’s what travelers need to know about their rights on domestic flights in the U.S. and how to get reimbursed.
My flight was canceled. Can I get a refund?
Airline customers are entitled to a refund if a flight is canceled for any reason or “significantly delayed” and they opt not to travel, according to rules from the Transportation Department. This policy extends to nonrefundable tickets. The DOT determines on a case-by-case basis whether passengers are entitled to a refund for a delayed flight.
While airlines are required to provide refunds in these circumstances if requested, they aren’t barred from offering other forms of redress first. Carriers will often offer a passenger the opportunity to rebook on another flight or a voucher or credit that could be used for future travel.
In these situations, customers will need to speak with an airline representative and request an “involuntary refund,” Mr. Hudson said. Not all customer-service staff will be familiar with this phrase, he warned, but he described it as “the magic words” to use to get a refund quickly.
I had to stay in a hotel because of a flight delay. Am I entitled to reimbursement?
Additional compensation beyond a refund of airfare and other fees isn’t required by the DOT. Still, most airlines have policies on what they will cover.
If a plane has a technical issue or the flight isn’t properly staffed, an airline’s compensation policy typically will kick in. If the delay or cancellation is due to weather, passengers may be out of luck getting assistance.
The DOT maintains a dashboard spelling out what is covered under the customer-service policies at the 10 largest domestic airlines in the U.S. in cases where cancellations or delays were under the carrier’s control. Each of these major airlines has put these policies in writing, making the commitments enforceable, a DOT spokeswoman said in an email.
My checked luggage went missing. What does the airline owe me?
If a checked bag is delayed, missing or damaged, the airline is liable and must reimburse the traveler. For domestic flights, airlines are only required to cover up to $3,800.
Apart from being required to reimburse passengers for the value of items that were lost or damaged, carriers must also compensate people for incidental expenses such as purchasing replacement clothing or medications. Airlines cannot set an arbitrary daily limit for those expenses, though they can require receipts or other proof for valuable items that were lost, according to the DOT.
I can’t rebook with my airline. Are they required to book me on another airline?
Before the airline industry was deregulated in the U.S. in the 1970s, carriers were required to rebook passengers with other airlines in instances where flights were canceled or delayed. “Now, it’s strictly voluntary,” said Mr. Hudson.
Some carriers have formal relationships with other airlines that allow them to rebook reservations at no additional cost, whereas others may buy tickets from competitors for stranded passengers. Southwest said it bought tickets on other airlines during its meltdown, and
Spirit
did the same during its 2021 meltdown.
I was bumped from my flight by my airline. Is that allowed?
Airlines have come under fire in recent years for the practice of overselling flights and then bumping passengers. The practice is allowed, as long as you haven’t boarded the plane. If you’ve already boarded, the airline can remove you from the flight for safety, security or health reasons.
If a passenger is involuntarily bumped, the carrier must provide a written statement of the flier’s rights and how the company decides who is bumped. They may be provided a refund, but they aren’t guaranteed additional compensation.
To be eligible for compensation, the traveler must have a confirmed reservation, have checked in on time and have arrived at the departure gate on time, the DOT states on its website.
If all those conditions apply—and the airline cannot rebook the passenger on a flight that gets them to their destination within one hour of their original scheduled arrival—compensation is calculated based on the price of the original ticket, the length of the delay and whether the flight is domestic or international. Compensation ranges from up to $775 for short delays to no more than $1,550 for longer delays.
The U.S.’s largest auto makers confronted another challenging year in 2022 with supply-chain snarls and poorly stocked dealership lots denting sales results and concerns mounting about an economic downturn.
The Detroit auto maker also retook its U.S. sales crown from
Toyota Motor Corp.
TM -0.65%
, outselling its Japanese rival by about 165,630 vehicles last year.
Toyota had overtaken GM in 2021 as the U.S.’s top-selling auto maker, an upending of the traditional pecking order that was largely due to parts shortages that both car companies viewed as temporary.
Toyota said its U.S. sales were down 9.6% in 2022, and
Hyundai Motor Corp.
closed last year with a 2% decline.
Most other car companies report throughout the day Wednesday.
Ford
plans to report 2022 sales results Thursday.
Industrywide, U.S. auto sales are projected to total 13.7 million vehicles in 2022, the lowest figure in more than a decade and an 8% decrease from the prior year, according to a joint forecast by J.D. Power and LMC Automotive. Sales are expected to remain well below prepandemic levels of roughly 17 million.
WSJ toured Rivian’s and Ford’s electric-vehicle factories to see how they are pushing to meet demand. Illustration: Adam Falk/The Wall Street Journal
The drop-off marks a reversal for a sector that started the year hoping historically low interest rates and an end to parts shortages would fuel a rebound in sales. Instead, vehicles continued to be in short supply as car makers mostly waited for scarce computer chips. Russia’s invasion of Ukraine, a key supplier of auto parts, added to the supply-chain troubles.
A prolonged shortage of semiconductors created pent-up demand for new vehicles, which meant that cars and trucks went to waiting buyers almost as soon as they hit the dealer lot. The lack of availability left buyers paying top dollar for the rides they could secure, pushing the average price paid for a vehicle in December to a near record high of $46,382, according to J.D. Power.
The record high prices buoyed auto maker profits last year despite shrinking sales volume and insulated the industry from a broader decline in consumer spending.
Now, while some supply constraints are easing, auto executives are confronting other obstacles, such as rising interest rates and soaring materials costs. Inventory levels are bouncing back, putting pressure on car companies to resist the kinds of profit-damaging discounts that have been historically used to counter slowing demand.
Photos: The EV Rivals Aiming for Tesla’s Crown in China
Some analysts caution that it is still too early to tell if rising prices are pushing buyers away. Heavy snowfall in large parts of the northern U.S. weighed on December sales, making it hard to see the impact of higher prices, JPMorgan analysts wrote in a note to clients.
Still, there are early signs that demand might be slowing, even for the hottest car makers.
Tesla Inc.
reported Monday that it fell short of its growth projections last year, in part because of Covid-related shutdowns at its Shanghai factory and changes in the way it manufactures and distributes vehicles.
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Analysts have pointed to decreased wait times for Tesla vehicles as a sign of softening demand. Tesla offered a rare discount on some of its vehicles if buyers agreed to take delivery before the end of 2022.
Electric-vehicle sales accounted for 3% of the U.S. retail market in 2021 and nearly 6% in 2022, according to J.D. Power.
Executives have been investing billions of dollars on new models and factories, in the belief that sales will continue to expand rapidly over the next decade.
But rising prices for raw materials used in lithium-ion batteries pushed up EV prices throughout 2022, and some executives warned of a looming battery shortage.
General Motors cut its EV sales target for 2023 because of a slower-than-expected increase of battery production.
The semiconductor shortage, while easing for some other sectors, such as smartphones and personal computers, remains a challenge for autos, in part because car companies typically use inexpensive, commodity silicon for vehicles. Toyota, citing a lack of chips, cut its production outlook for the current fiscal year through March.
Falling used-car values are also discouraging to potential buyers, who have trade-ins and are looking to use them to offset the higher cost of a new vehicle.
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That bodes poorly for sales this year, as retailers worry that buyers who were unable to buy a car as a result of shortages will now be priced out of the market, according to a survey of dealers conducted by Cox Automotive.
The research site Edmunds expects new-car sales to hit 14.8 million in 2023, a marginal increase from last year but well below prepandemic levels. A combination of rising rates, inflation and economic turmoil could push vehicles out of reach for many buyers, Edmunds said.
Bahamas securities regulators said they seized digital assets valued at $3.5 billion from FTX’s local operation in mid-November as the cryptocurrency exchange spiraled toward collapse, a figure that FTX’s U.S. managers cast doubt on Friday.
Christina Rolle, executive director of the Securities Commission of the Bahamas, said in an affidavit made public Thursday that the commission sought control of the crypto assets held by FTX Digital Markets Ltd. last month after FTX co-founder Sam Bankman-Fried told local authorities under oath about a hacking attempt. Her affidavit, filed with the Supreme Court of the Bahamas, also confirmed that the Securities Commission relied on Mr. Bankman-Fried and another FTX co-founder, Gary Wang, to make the transfers happen.
WASHINGTON—The Senate Finance Committee has opened an inquiry into whether auto makers including
Tesla Inc.
and
General Motors Co.
are using parts and materials made with forced labor in China’s Xinjiang region.
In a letter sent Thursday, the committee asked the chief executives of eight car manufacturers to provide detailed information on their supply chains to help determine any links to Xinjiang, where the U.S. government has alleged the use of forced labor involving the Uyghur ethnic minority and others.
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The U.S. bans most imports from the region under the Uyghur Forced Labor Prevention Act. The letter to car companies cited a recent report from the U.K.’s Sheffield Hallam University that found evidence that global auto makers were using metals, batteries, wiring and wheels made in Xinjiang, or sourcing from companies that used Uyghur workers elsewhere in China.
According to that report, some car manufacturers “are unwittingly sourcing metals from the Uyghur region.” It said some of the greatest exposure comes from steel and aluminum parts as metals producers shift work to Xinjiang to take advantage of Chinese government subsidies and other incentives.
The U.S. ban on products linked to Xinjiang has already caused disruptions in the import of solar panels made there.
China has called Washington’s claim baseless. It disputes claims by human-rights groups that it mistreats Uyghurs by confining them in internment camps, with Beijing saying its efforts are aimed at fighting terrorism and providing vocational education.
Besides
Tesla
and GM, the letter signed by Finance Committee Chairman
Ron Wyden
(D., Ore.), was sent to
Ford Motor Co.
,
Mercedes-Benz Group AG
,
Honda Motor Co.
,
Toyota Motor Corp.
,
Volkswagen AG
and
Stellantis
NV, whose brands include Chrysler and Jeep.
GM said its policy prohibits any form of forced or involuntary labor, abusive treatment of employees or corrupt business practices in its supply chain.
“We actively monitor our global supply chain and conduct extensive due diligence, particularly where we identify or are made aware of potential violations of the law, our agreements, or our policies,“ the company said.
A Volkswagen spokesman said the company investigates any alleged violation of its policy, saying “serious violations such as forced labor could result in termination of the contract with the supplier.” A Stellantis spokesperson said the company is reviewing the letter and the claims made in the Sheffield Hallam study.
Other companies didn’t immediately provide comments.
“I recognize automobiles contain numerous parts sourced across the world and are subject to complex supply chains. However, this recognition cannot cause the United States to compromise its fundamental commitment to upholding human rights and U.S. law,” Mr. Wyden wrote.
The information requested includes supply-chain mapping and analysis of raw materials, mining, processing and parts manufacturing to determine links to Xinjiang, including manufacturing conducted in third countries such as Mexico and Canada.
General Motors says its policy prohibits forced or involuntary labor, abusive treatment of employees or corrupt business practices in its supply chain.
Photo:
mandel ngan/Agence France-Presse/Getty Images
The lawmakers are also asking the auto makers if they had ever terminated, or threatened to terminate, relations with suppliers over possible links to Xinjiang, and if so, provide details of the cases.
The committee’s action comes as the Biden administration and bipartisan lawmakers increase their focus on alleged forced-labor practices in China as a key component of their confrontation with Beijing over its economic policy. The United Auto Workers has called on the auto industry to “shift its entire supply chain out of the region.”
The State Department has said more than one million Uyghurs and other minorities are held in as many as 1,200 state-run internment camps in Xinjiang. Chinese authorities “use threats of physical violence” and other methods to force detainees to work in adjacent or off-site factories, according to the department.
The U.S. Customs and Border Protection investigated 2,398 entries with a total value of $466 million during the fiscal year ended September, up from 1,469 entries in the previous year and 314 cases in fiscal 2000.
Analysts expect the CBP’s enforcement activity to further increase this year, with a strong bipartisan push for a tougher stance on the forced-labor issue.
The researchers at Sheffield Hallam University found that more than 96 mining, processing, or manufacturing companies relevant to the auto sector are operating in Xinjiang. The researchers used publicly available sources, including corporate annual reports, websites, government directives, state media and customs records.
said it would stop making so-called forever chemicals and cease using them by the end of 2025, as criticism and litigation grow over the chemicals’ alleged health and environmental impact.
3M Chief Executive
Mike Roman
said that the decision was influenced by increasing regulation of the chemicals known as PFAS, and a growing market for substitute options.
“Customers are taking note of PFAS regulations. They’re looking for alternatives,” Mr. Roman said in an interview. “We’re finding other solutions that have the same properties,” he said.
The company’s move involves chemicals used to make nonstick cookware, food packaging and other consumer and industrial products. 3M estimated its current annual sales of the chemicals total about $1.3 billion.
Perfluoroalkyl and polyfluoroalkyl substances, or PFAS, are commonly called “forever chemicals” because they take a long time to break down in the environment. Such chemicals include highly durable compounds long prized by manufacturers for their resistance to heat, and their ability to repel water, grease and stains.
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In recent decades, research has linked exposure to some forms of the chemicals with health problems including kidney and testicular cancers, thyroid disease and high cholesterol, according to the Environmental Protection Agency. The synthetic compounds have also been found in drinking water, including some municipal systems and private wells, as well as in rainwater around the world.
Regulators and environmental groups have taken aim at the chemicals, and thousands of lawsuits alleging contamination and illness have been filed in recent years targeting 3M and other manufacturers.
3M stopped producing some types of PFAS chemicals in the early 2000s but has continued to make other types, which the company has said can be safely produced and used. 3M said Tuesday it would stop making all fluoropolymers, fluorinated fluids and PFAS-based additive products by the end of 2025.
The company also said it would stop using PFAS across its products by the end of 2025, saying that it has already reduced its use of the substances over the past three years.
3M’s shares declined about 0.5% in midday trading, while major U.S. stock indexes slightly increased. The company’s stock has fallen about 29% so far this year, compared with a 19% decline in the S&P 500 stock index.
The EPA has said there are roughly 600 PFAS chemicals in commercial use today. The American Chemistry Council, which represents chemical makers, said Tuesday that PFAS are integral to thousands of products in technologies including semiconductors, batteries for electric vehicles and 5G technology.
The group said its members are dedicated to the responsible production, use, management and disposal of PFAS chemistries, and that it would continue to work with the EPA toward policies that protect human health and allow the chemicals to continue to be used.
3M’s exit from PFAS was seen as a victory by environmental groups that for years have raised alarms over the chemicals.
Scott Faber, senior vice president of government affairs at the Environmental Working Group, said he didn’t think 3M will ever be held fully accountable for producing the chemicals. “But by exiting the market they have sent a powerful signal to the other polluters that it’s simply unaffordable to poison all of us,” Mr. Faber said.
3M’s net sales of PFAS chemicals represent about 4% of the company’s total annual sales, according to research by RBC Capital Markets. “This is a step in the right direction for 3M given all the regulatory scrutiny of PFAS chemicals,” RBC analysts wrote in a note to investors Tuesday.
Over the course of exiting the business of manufacturing the chemicals, 3M said it expects to incur pretax charges of about $1.3 billion to $2.3 billion, including a $700 million to $1 billion charge in the current quarter. The St. Paul, Minn.-based manufacturer said it intends to fulfill current contractual obligations during the transition period.
The EPA in August proposed designating two forms of PFAS chemicals as hazardous substances under the federal superfund law. The American Chemistry Council and companies such as 3M opposed the move, saying that it wasn’t based on the best available science and that it wouldn’t speed up remediation of contaminated sites.
Industry analysts said plant cleanup costs are likely to increase as the EPA uses broad discretion to impose cleanup terms under the Superfund designation. They said the hazardous substance designation also likely would hinder sales growth for the PFAS chemicals that 3M continues to produce, as customers look for alternatives.
3M pioneered the development of PFAS chemicals in the late 1940s, building on atomic research that used fluorine gas. By bonding fluorine with carbon, 3M found it could create durable compounds that could be adapted for use in consumer and industrial products.
3M’s plants where PFAS chemicals are produced have come under increasing regulatory focus for soil and water contamination. 3M has committed billions of dollars to clean up plant sites in recent years, including an $850 million settlement with the state of Minnesota related to a plant in Cottage Grove, Minn. The company also agreed earlier this year to provide about $600 million to remediate contamination connected to a plant in Belgium where PFAS chemicals have been produced.
3M also produces PFAS chemicals at plants in Alabama, Illinois and Germany.
3M phased out production of two PFAS chemicals, known as PFOA and PFOS, in the early 2000s. Those two forms of PFAS chemicals have been at the center of thousands of lawsuits targeting 3M and other manufacturers.
—Will Feuer contributed to this article.
Write to Kris Maher at Kris.Maher@wsj.com and Bob Tita at robert.tita@wsj.com
