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Mustang Mach-E: Ford drops the price of its Tesla competitor



CNN
 — 

Ford is boosting production of its popular Mustang Mach-E electric SUV and dropping its sticker price weeks after Tesla dropped prices of its vehicles. The move represents a substantial roll-back of price hikes Ford announced last summer on the 2023 models – but buyers may still be paying somewhat more than before the increases.

The Mustang Mach-E, a midsize electric family SUV, was the first serious electric effort for the Dearborn, Michigan-based automaker. Priced and aimed squarely at the Tesla Model Y, which has its own starting price of $53,490, the Mach-E is Ford’s bet to get new car buyers to dip their toes into the battery-powered future. it has since been joined in the electric Ford lineup by the workhorse Ford F-150 Lightning. But the company still considers the Mach-E a crucial step for the company’s electric-powered growth.

Late last year, Darren Palmer, Ford’s vice president of electric vehicle programs, told CNN Business that the Mach-E was completely sold out and the automaker was holding off on launching it in more global markets in order to catch up with US demand.

“We could sell it out at least two or three times over,” he said a the time.

The price cuts Ford announced Monday were biggest on the most expensive versions of the SUV, just as the increases had been biggest on those models. The base sticker of the Mustang Mach-E GT Extended Range, a high-performance version of the SUV, dropped to about $64,000 from $69,900 before, a decrease of $5,900. But that model had been about $62,000 before price increases last August.

When it announced those price bumps, Ford also said it was putting more standard features into the vehicles, including advanced driver assistance features.

The price of the least expensive Mach-E, the rear-wheel-drive standard range model, was cut $900, going from about $46,900 down to $46,000. The price of the extended range battery pack option, by itself, dropped from $8,600 down $7,000.

Tesla announced price cuts of as much as 20% on its electric vehicles earlier this month, after raising prices in 2022.

When Ford announced the price increases last summer, citing supply chain issues, the automakers indicated it would continue monitoring market conditions throughout the upcoming model year.

Ford announced last summer that it was increasing production of the Mach-E as it added capacity for more battery production. The automaker also announced in late August that it was reopening order banks for the Mach-E which had been closed as the company worked to meet existing orders.

Customers who complete the transaction for their Mach-E after today’s announcement will pay the new lower price, Ford said. Ford will reach out directly to Mach-E customers with a sale date after January 1, 2023 who already have their vehicles, the automaker said.

At least some versions of both models are currently eligible for federal electric vehicle tax credits, according to the Internal Revenue Service, but both are treated as cars, not SUVs, under the tax rules, unless equipped with a third row of seats.

That means that tax credits are available for the two-row only Mach-E and two-row Model Y only if the sticker price is below $55,000. For versions of the Model Y with a third row of seats, a $4,000 option, buyers may get tax credits with a sticker price up to $80,000. For the Mustang Mach-E, a third row of seats isn’t offered.

The final amount of the tax credit may depend on when the vehicle is actually delivered to the customer and, also, whether the customers themselves meet annual income requirements.

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Boeing’s role in building NASA’s new rocket

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New York
CNN Business
 — 

In the fervor-filled days leading up to the November 16 launch of the long-awaited Artemis I mission, an uncrewed trip around the moon, some industry insiders admitted to having conflicting emotions about the event.

On one hand, there was the thrill of watching NASA take its first steps toward eventually getting humans back to the lunar surface; on the other, a shadow cast by the long and costly process it took to get there.

“I have mixed feelings, though I hope that we have a successful mission,” former NASA astronaut Leroy Chiao said in an opinion roundtable interview with The New York Times. “It is always exciting to see a new vehicle fly. For perspective, we went from creating NASA to landing humans on the moon in just under 11 years. This program has, in one version or another, been ongoing since 2004.”

There have been numerous delays with the development of the rocket at the center of the Artemis I mission: NASA’s Space Launch System (SLS), the most powerful rocket ever flown — and one of the most controversial. The towering launch vehicle was originally expected to take flight in 2016. And the decade-plus that the rocket was in development sparked years of blistering criticism targeted toward the space agency and Boeing, which holds the primary contract for the SLS rocket’s core.

NASA’s Office of Inspector General (OIG) repeatedly called out what it referred to as Boeing’s “poor performance,” as a contributing factor in the billions of dollars in cost overruns and schedule delays that plagued SLS.

“Cost increases and schedule delays of Core Stage development can be traced largely to management, technical, and infrastructure issues driven by Boeing’s poor performance,” one 2018 report from NASA’s OIG, the first in a series of audits the OIG completed surrounding NASA’s management of the SLS program, read. And a report in 2020 laid out similar grievances.

For its part, Boeing has pushed back on the criticism, pointing to rigorous testing requirements and the overall success of the program. The OIG report also included correspondence from NASA, which noted in 2018 that it “had already recognized the opportunity to improve contract performance management” and agreed with the report’s recommendations.

In various op-eds, the rocket has also been deemed “the result of unfortunate compromises and unholy politics,” a “colossal waste of money” and an “irredeemable mistake.”

Despite all the heated debate that has followed SLS, by all accounts, the rocket is here to stay. And officials at NASA and Boeing said its first launch two months ago was practically flawless.

“I worked over 50 Space Shuttle launches,” Boeing SLS program manager John Shannon told CNN by phone. “And I don’t ever remember a launch that was as clean as that one was, which for a first-time rocket — especially one that had been through as much as this one through all the testing — really put an exclamation point on how reliable and robust this vehicle really is.”

The Artemis program manager at NASA, Mike Sarafin, also said during a post-launch news conference that the rocket “performed spot-on.”

But with its complicated history and its hefty price tag, SLS could still face detractors in the years to come.

Many have questioned why SLS needs to exist at all. With the estimated cost per launch standing at more than $4 billion for the first four Artemis missions, it’s possible commercial rockets, like the massive Mars rocket SpaceX is building, could get the job done more efficiently, as the chief of space policy at the nonprofit exploration advocacy group Planetary Society, Casey Dreier, recently observed in an article laying out both sides of the SLS argument.

(NASA Administrator Bill Nelson noted that the $4 billion per-launch cost estimate includes development costs that the space agency hopes will be amortized over the course of 10 or more missions.)

Boeing was selected in 2012 to build SLS’s “core stage,” which is the hulking orange fuselage that houses most of the massive engines that give the rocket its first burst of power at liftoff.

Though more than 1,000 companies were involved with designing and building SLS, Boeing’s work involved the largest and most expensive portion of the rocket.

That process began over a decade ago, and when the Artemis program was established in 2019, it gave the rocket its purpose: return humans to the moon, establish a permanent lunar outpost, and, eventually, pave the path toward getting humans to Mars.

But the SLS is no longer the only rocket involved in the program. NASA gave SpaceX a significant role in 2021, giving the company a fixed-price contract for use of its Mars rocket as the vehicle that will ferry astronauts to the lunar surface after they leave Earth and travel to the moon’s orbit on SLS. SpaceX’s forthcoming rocket, called Starship, is also intended to be capable of completing a crewed mission to the moon or Mars on its own. (Starship, it should be noted, is still in the development phases and has not yet been tested in orbit.)

Boeing has repeatedly argued that SLS is essential and capable of performing tasks that other rockets cannot.

“The bottom line is there’s nothing else like the SLS because it was built from the ground up to be human rated,” Shannon said. “It is the only vehicle that can take the Orion spacecraft and the service module to the moon. And that’s the purpose-built design — to take large hardware and humans to cislunar space, and nothing else exists that can do that.”

Starship, meanwhile, is not tailored solely to NASA’s specific lunar goals. SpaceX CEO Elon Musk has talked for more than a decade about his desire to get humans to Mars. More recently, he has said Starship could also be used to house giant space telescopes.

Yet, another reason critics remain skeptical of SLS is because of its origins. The rocket’s conception can be traced back to NASA’s Constellation program, which was a plan to return to the moon mapped out under former President George W. Bush that was later canceled.

But the SLS has survived. Many observers have suggested a big reason was the desire to maintain space industry jobs in certain Congressional districts and to beef up aerospace supply chains.

Much of the criticism levied against SLS, however, has focused on the actual process of getting the rocket built.

At one point in 2019, former NASA administrator Jim Bridenstine considered sidelining the SLS rocket entirely, citing frustrations with the delays.

“At the end of the day, the contractors had an obligation to deliver what NASA had contracted for them to deliver,” Bridenstine told CNN by phone last month. “And I was frustrated like most of America.”

Still, Bridenstine said, when his office reviewed the matter, it found “there were no options that were going to cost less money or take less time than just finishing the SLS” — and the rocket was never ultimately sidelined. (Bridenstine noted he was also publicly critical of delayed projects led by SpaceX and others.)

NASA continued to stand by Boeing and the SLS rocket even as it became a political hot potato, with some in Congress both criticizing its costs and refusing to abandon the program.

The SLS rocket ended up flying its first launch more than six years later than originally intended. NASA had allocated $6.2 billion to the SLS program as of 2018, but that price tag more than tripled to $23 billion as of 2022, according to an analysis by the Planetary Society.

Those escalating costs can be traced back to the type of contracts that NASA signed with Boeing and its other major suppliers for SLS. It’s called cost-plus, which puts the financial burden on NASA when projects face cost overruns while still offering contractors extra payments, or award fees.

In testimony before the Senate Appropriations Subcommittee on Science last year, current NASA Administrator Bill Nelson criticized the cost-plus contracting method, calling it a “plague.”

More in vogue are “fixed-price” contracts, which have a firm price cap, like the kind NASA gave to Boeing and SpaceX for its Commercial Crew Program.

In an interview with CNN in December, however, Nelson stood by cost-plus contracting for SLS and Orion, the vehicle that is designed to carry astronauts and rides atop the rocket to space. He said that without that type of contract, in his view, NASA’s private-sector contractors simply wouldn’t be willing to take on a rocket designed for such a specific purpose and exploring deep space. Building a rocket as specific and technically complex as SLS isn’t a risk many private-sector companies are anxious to take on, he noted.

“You really have difficulty in the development of a new and very exquisite spacecraft … on a fixed-price contract,” he said.

“That industry is just not willing to accept that kind of thing, with the exception of the landers,” he added, referring to two other branches of the Artemis program: robotic landers that will deliver cargo to the moon’s surface and SpaceX’s $2.9 billion lunar lander contract. Both of those will use fixed-price — often referred to as “commercial” — contracts.

“And even there, they’re getting a considerable investment by the federal government,” Nelson said.

Still, government watchdogs have not pulled punches when assessing these cost-plus contracts and Boeing’s role.

“We did notice very poor contractor performance on Boeing’s part. There’s poor planning and poor execution,” NASA Inspector General Paul Martin said during testimony before the House’s Subcommittee on Space and Aeronautics last year. “We saw that the cost-plus contracts that NASA had been using…worked to the contractor’s — rather than NASA’s — advantage.”

Shannon, the Boeing executive, acknowledged in an interview that Boeing and SLS have faced loud detractors, but he said that the value of the drawn out development and testing program would become evident as SLS flies.

“I am extremely proud that NASA — even though there were significant schedule pressures — they could set up a test program that was incredibly comprehensive,” he said. “The Boeing team worked through that test process and hit every mark on it. And you see the results. You see a vehicle that is not just visually spectacular, but its performance was spectacular. And it really put us on the road to be able to do lunar exploration again, which is something that’s very important in this country.”

But the rocket is still facing criticism. During a Congressional hearing with the House’s Science, Space, and Technology Committee in March 2022, NASA’s Inspector General said that current cost estimates for SLS were “unsustainable,” gauging that the space agency will have spent $93 billion on the Artemis program from 2012 through September 2025.

Martin, the NASA inspector general, specifically pointed to Boeing as one of the contractors that would need to find “efficiencies” to bring down those costs as the Artemis program moves forward.

In a December 7 statement to CNN, Boeing once again defended SLS and its price point.

“Boeing is and has been committed to improving our processes — both while the program was in its developmental stage and now as it transitions to an operational phase,” the statement read, noting the company already implemented “lessons learned” from building the first rocket to “drive efficiencies from a cost and schedule perspective” for future SLS rockets.

“When adjusted for inflation, NASA has developed SLS for a quarter of the cost of the Saturn V and half the cost of the Space Shuttle,” the statement noted. “These programs have also been essential to investing in the NASA centers, workforce and test facilities that are used by a broad range of civil and commercial partners across NASA and industry.”

The successful launch of SLS was a welcome winning moment for Boeing. Over the past few years, the company has been mired in controversy, including ongoing delays and myriad issues with Starliner, a spacecraft built for NASA’s Commercial Crew Program, and scandal after scandal plaguing its airplane division.

Now that the Artemis I mission has returned safely home, NASA and Boeing can turn to preparing more of the gargantuan SLS rockets to launch even loftier missions.

SLS is slated to launch the Artemis II mission, which will take four astronauts on a journey around the moon, in 2024. From there, SLS will be the backbone of the Artemis III mission that will return humans to the lunar surface for the first time in five decades and a series of increasingly complex missions as NASA works to create its permanent lunar outpost.

Shannon, the Boeing SLS program manager, told CNN that construction of the next two SLS rocket cores is well underway, with the booster for Artemis II on track to be finished in April — more than a year before the mission is scheduled to take off. All of the “major components” for a third SLS rocket are also completed, Shannon added.

For the third SLS core and beyond, Boeing is also moving final assembly to new facilities Florida, freeing up space at its manufacturing facilities to increase production, which may help drive down costs.

Shannon declined to share a specific price point for the new rockets or share any internal pricing goals, though NASA is expected to sign new contracts for the rockets that will launch the Artemis V mission and beyond, which could significantly change the price per launch.

Nelson also told CNN in December that NASA “will be making improvements, and we will find cost savings where we can,” such as with the decision to use commercial contracts for other vehicles under the Artemis program umbrella.

How and whether those contracts bear out remain to be seen: SpaceX needs to get its Starship rocket flying, a massive space station called Gateway needs to come to fruition, and at least some of the robotic lunar landers designed to carry cargo to the moon will need to prove their effectiveness. It’s also not yet clear whether those contracts will result in enough cost savings for the critics of SLS, including NASA’s OIG, to consider the Artemis program sustainable.

As for SLS, Nelson also told reporters December 11, just after the conclusion of the Artemis I mission, that he had every reason to expect that lawmakers would continue to fund the rocket and NASA’s broader moon program.

“I’m not worried about the support from the Congress,” Nelson said.

And Bridenstine, Nelson’s predecessor who has been publicly critical SLS, said that he ultimately stands by SLS and points out that, controversies aside, it does have rare bipartisan support from its bankrollers.

“We are in a spot now where this is going to be successful,” Bridenstine said last month, recalling when he first realized the Artemis program had support from the right and left. “All of America is going to be proud of this program. And yes, there are going to be differences. People are gonna say well, you should go all commercial and drop SLS…but at the end of the day, what we have to do is we have to bring together all of the things that are the best programs that we can get for America and use them to go to the moon.”



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SEC closes insider trading probe into former Republican senator



CNN
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The US Securities and Exchange Commission has closed its insider trading investigation into stock trades made by then-Sen. Richard Burr and his brother-in-law at the outset of the pandemic, the former senator announced Friday.

“This week, the SEC informed me that they have concluded their investigation with no action. I am glad to have this matter in the rearview mirror as I begin my retirement from the Senate following nearly three decades of public service,” Burr, a North Carolina Republican, said in a statement.

The announcement comes nearly two years after the Justice Department closed its own review of the matter, which was launched in March 2020, soon after questionably timed trades by Burr and other lawmakers became publicly known.

Burr sold $1.65 million in stock on February 13, 2020, previous court filings by the SEC revealed. The sales included tens of thousands of dollars in stock in the hospitality industry, which was particularly hard hit in coronavirus outbreak.

The SEC declined CNN’s request for comment.

The trades made by Burr and his brother-in-law first attracted scrutiny because of Burr’s position on Senate committees overseeing health policy and US intelligence. The Intelligence Committee, which Burr chaired at the time, had received periodic briefings on the coronavirus as the outbreak began to spread but it did not receive such a briefing the week of the trades.

The SEC previously said Burr possessed “material nonpublic information concerning Covid-19 and its potential impact on the U.S. and global economies.”

In the DOJ’s probe of the stock trade, Burr turned over his official Senate phone to the FBI after a warrant was served, an official confirmed to CNN at the time. Use of the warrant had been signed off at the highest levels of the Justice Department, as is protocol, according to the source.

The Senate-issued cellphone was Burr’s primary device and investigators had asked Apple for information from Burr’s iCloud backup, a person familiar with the investigation previously said.

Burr had consistently denied any wrongdoing, saying he made the trades based solely on public information, not information he received from the committee.

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Unanswered questions about Trump’s tax returns


New York
CNN
 — 

After years of legal battles, pontificating and theorizing, former President Donald Trump’s tax returns from 2015 to 2020 are now part of the public record. Many critics and political opponents have theorized that Trump fought the public disclosure of his tax returns because they potentially provided evidence of illegal or politically damaging behavior.

It’s not immediately clear that they do either.

However, Trump’s tax returns raise numerous questions about the former president’s finances, his business activities, foreign ties and his charitable donations, among other issues.

Trump broke with decades of tradition in becoming the first elected president since Nixon to refuse to disclose his tax returns to the public When Democratic lawmakers demanded them, Trump fought for years to keep them private, taking the battle to the Supreme Court – a legal fight he ultimately lost.

He frequently claimed during his 2016 presidential candidacy that he couldn’t release his taxes because they were being audited, a claim that was debunked last week when the House Ways and Means Committee disclosed that Trump’s 2015 and 2016 taxes weren’t audited until 2019.

For now, the thousands of pages of documents offer only more questions about what Trump’s finances, and may offer potential avenues for new investigations.

Trump reported having foreign bank accounts, including a bank account in China between 2015 and 2017, his tax returns show.

The tax returns do not show what the bank account was used for or how much money passed through it or to whom. The New York Times first reported about Trump’s Chinese account in 2020, and Trump Organization lawyer Alan Garten told the Times that the account was used to pay taxes on the Trump International Hotels Management’s business push in the country.

Trump did not report the Chinese bank account in personal financial disclosures when he was president, likely because it was listed under his businesses. Yet he may have still been required to report accounts to the Financial Crimes Enforcement Network (FinCEN).

Trump’s companies and business interests span the globe. On his tax return, Trump listed business income, taxes, expenses or other notable financial items from or in Azerbaijan, Panama, Canada, India, Qatar, South Korea, the United Kingdom, China, the Dominican Republic, United Arab Emirates, the Philippines, Grenada, US territory Puerto Rico, Georgia, Israel, Brazil, St. Maarten, Mexico, Indonesia, Ireland, Turkey and St. Vincent.

But the tax returns don’t explain what business ties he had in those countries and with whom he might have been working while he was president.

Unlike previous presidents, Trump declined to divest his business interests while he was in office. Critics said his many foreign holdings compromised his ability to act independently as a politician.

During his presidency, Trump pledged he would donate the entirety of his $400,000 salary to charity each year. He frequently boasted about donating parts of his quarterly paycheck to various government agencies.

If he donated his 2020 salary, he didn’t claim it on his taxes. Among the six years of tax returns the House Ways and Means Committee released, 2020 was the sole year in which Trump listed no donations to charity.

That doesn’t mean his salary wasn’t donated, but it’s unclear if he made good on his promise in 2020.

In each year of Trump’s presidency, Trump claimed that he had loaned three of his adult children – Ivanka, Donald Jr. and Eric – undisclosed sums of money on which he collected interest.

The tax returns don’t say how much he lent them or why he gave them loans in the first place.

Between 2017 and 2020, Trump claimed he received exactly $18,000 in interest on a loan he gave his daughter Ivanka Trump and $8,715 in interest from his son Donald Trump, Jr.. In 2017 to 2019, Trump said he received exactly $24,000 from his son Eric Trump, and Eric paid him $19,605 in interest in 2020.

The bipartisan Joint Committee on Taxation said the loans and the amounts of claimed interest could indicate Trump was disguising gifts to his children. If the interest Trump claims to have charged his children was not at market rate, for example, it could be considered a gift for tax purposes, requiring him to pay a higher tax rate on the money.

Trump entered the US presidency with a vast web of business holdings, including hundreds of limited liability companies, corporations and partnerships with operations both domestically and overseas.

The massiveness and intricacy of his business operations – including companies nested within each other like Matryoshka dolls – brought a level of complexity not seen before in the US presidency and spurred concern about potential conflicts of interest, especially with foreign entities.

Friday’s public release of Trump’s 2015 to 2020 personal and business tax filings may shed some additional light as to how those operations evolved during and shortly after his time in office. But they don’t spell out where money was going and to whom.

Since 1977, the Internal Revenue Service has had a policy of auditing every president’s personal tax returns while they are in office. But the IRS didn’t do any examination of Trump’s tax returns until the Ways and Means Committee requested an audit in April of 2019.

When the committee asked Treasury Department representatives about the apparent lapse, they declined to provide information about the actual operations of the mandatory audit program, according to the committee’s report.

It remains unclear whether Trump received special treatment or, as the committee noted, the IRS was hamstrung by an acute lack of resources.

The lack of an audit looks especially suspect after representatives for Trump’s predecessor and successor said they had been subjected to annual audits by the IRS. A Biden White House spokesman told the AP that the IRS audited Biden in both 2020 and 2021. Representatives for former President Barack Obama told the New York Times that the IRS audited him each year he was in office.

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