NEW YORK, Jan 30 (Reuters) – Bed Bath & Beyond Inc (BBBY.O) is preparing to seek bankruptcy protection as soon as this week, and has lined up liquidators to close additional stores unless a last-minute buyer emerges, four people familiar with the matter said on Monday.
The timing of any bankruptcy filing was in flux Monday evening, with the U.S. home goods retailer’s advisers locked in meetings exploring any remaining options to avoid it, another person familiar with the matter said.
Bed Bath & Beyond is negotiating a loan to help it navigate bankruptcy proceedings, with investment firm Sixth Street in talks to provide some funding, two of the people said. The firm loaned Bed Bath & Beyond $375 million last year.
The chain, once considered a category killer in home goods like dinnerware and small appliances, has lined up liquidators who are readying store closing sales that could be launched as soon as this weekend, two of the people said.
The people spoke on condition of anonymity because the talks are not public.
The chain has said it is closing 87 Bed Bath & Beyond stores and five buybuy BABY stores, in addition to 150 closures announced last year. It is also shutting its health and beauty discount chain Harmon.
The people cautioned that a last-minute buyer for the chain could emerge, or it could still ink a deal for its brands such as buybuy BABY. Prospective buyers sometimes wait until a company files for bankruptcy before agreeing to purchase assets, hoping to negotiate more favorable terms.
Bed Bath & Beyond said in a statement to Reuters that it continued to work with its advisers to consider “multiple paths” but declined to comment on any bankruptcy planning.
The company has previously said it was exploring a range of options to address plunging sales, including selling assets, raising financing and declaring bankruptcy.
Sixth Street declined to comment.
Bed Bath & Beyond said last week it defaulted on a loan, bringing it closer to bankruptcy. Sources have also told Reuters that Bed Bath & Beyond is considering skipping debt payments due on Feb. 1, a typical move that distressed companies take to conserve cash.
Retailers in distress often decide to file for bankruptcy protection after the holiday season to take advantage of the cash cushion provided by recent sales.
Toys R Us liquidated in March 2018 in one of the largest failures to date of a specialty retailer.
As of February 2022, Bed Bath & Beyond had 953 locations, including buybuy BABY.
Bed Bath & Beyond for years had been considered a go-to shopping destination for couples making wedding registries and planning for new babies, but it lost its footing when it tried to expand into store brands.
The retailer’s management has since reversed course and aimed to bring in national brands shoppers knew the chain for. But the strategy has not gained traction with shoppers.
Earlier this month, the company raised doubts about its ability to continue as a going concern and said it would cut jobs.
Bed Bath & Beyond reported a loss of about $393 million after sales plunged 33% for the quarter ending Nov. 26.
Reporting by Jessica DiNapoli and Mike Spector; Editing by Cynthia Osterman and Jamie Freed
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Jessica DiNapoli
Thomson Reuters
New York-based reporter covering U.S. consumer products spanning from paper towels to packaged food, the companies that make them and how they’re responding to the economy. Previously reported on corporate boards and distressed companies.
WASHINGTON, Jan 20 (Reuters) – Amazon.com Inc’s (AMZN.O) cloud services division said Friday it plans to invest another $35 billion by 2040 to expand data centers in Virginia.
Amazon Web Services (AWS) said the new investment will create 1,000 jobs. Virginia Republican Governor Glenn Youngkin said AWS will establish multiple data center campuses across Virginia.
In 2021, AWS said from 2011 to 2020 it had invested $35 billion in data centers located in northern Virginia and had 3,500 full time employees at its data centers in the state.
Pending approval by state lawmakers, Virginia is developing a new “Mega Data Center Incentive Program,” which would allow the company to receive up to a 15-year extension of Data Center Sales and Use tax exemptions on equipment and software.
AWS also will be eligible to receive a state grant of up to $140 million “for site and infrastructure improvements, workforce development, and other project-related costs.”
Amazon shares closed up 3.8% Friday.
Amazon in 2018 after a long contest announced northern Virginia would be home to its second headquarters known as “HQ2” and eventually employ more than 25,000 employees. As of April, Amazon said its headcount assigned to the site was around 5,000.
Youngkin has faced some criticism for withdrawing from a competition to attract a new Ford Motor (F.N) battery plant expected to be built with China’s Contemporary Amperex Technology Co Ltd (CATL) (300750.SZ), the world’s largest battery producer.
Youngkin defended his decision Friday, telling Bloomberg News that he looks “forward to bringing a great company there. It won’t be one that uses kind of a Trojan-horse relationship with the Chinese Communist Party in order to gain.”
A spokesperson for Youngkin has said that “while Ford is an iconic American company, it became clear that this proposal would serve as a front for the Chinese Communist party.”
Ford declined to comment on Youngkin’s decision to withdraw.
In July, Ford said it plans to localize 40 GWh of battery capacity in North America starting in 2026. It also announced CATL would provide battery packs for Mustang Mach-E models for North America starting in 2023 and would discuss cooperation for batteries in Ford vehicles around the world.
“Our talks with CATL continue – and we have nothing new to announce on either front,” Ford said.
Michigan is also a candidate for the Ford battery plant, sources said, and a decision could be made in the coming weeks.
Reporting by David Shepardson and Akash Sriram in Bengaluru; Editing by Aurora Ellis and Himani Sarkar
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SAO PAULO, Jan 19 (Reuters) – A Rio de Janeiro court on Thursday accepted Brazilian retailer Americanas SA’s (AMER3.SA) bankruptcy protection request, days after the company disclosed nearly $4 billion in accounting inconsistencies that have sparked a legal feud with creditors and investors.
Americanas, a 93-year-old company with stores all over Brazil and a major e-commerce unit, said in a securities filing that it would restructure debts of about 43 billion reais ($8.2 billion).
Shares in the company plunged about 42.5% to 1.00 real following news of the filing, extending its year-to-date drop to around 90%.
The firm, backed by the billionaire trio that founded 3G Capital, said the move had come “despite the efforts and measures that the management has been taking in the past few days alongside its financial and legal advisers to protect the company from the effects” of the accounting scandal.
Investors had expected the decision, with some deeming it unavoidable, especially after lender BTG Pactual (BPAC3.SA) obtained on Wednesday a court decision overturning part of the firm’s protection from creditors.
Americanas is also facing seven different investigations launched by securities regulator CVM, as well as an arbitration process requesting compensation of 500 million reais to the firm and the trio that founded 3G Capital.
In a document filed with the court, law firms Basilio Advogados and Salomao Kaiuca Abrahao attributed the urgency in filing for bankruptcy to the creditors’ decision to seize the companies’ assets.
The retailer also mentioned a debt downgrade by ratings agencies, which prevented any new loans from being extended. S&P, Moody’s and Fitch all downgraded Americanas’ credit ratings following the accounting scandal.
Earlier, Americanas had said that its current cash position stood at only 800 million reais, down from a previously reported 7.8 billion.
Lucas Pogetti, a partner at M&A advisers RGS Partners, said a large part of Americanas’ previously disclosed cash position was linked to the prepayment of receivables or deposited with creditors.
“Naturally, when the banks became aware of the company’s real situation they began to adopt a more aggressive posture to protect themselves, consequently restricting access to resources,” Pogetti said.
In the filing, Americanas asks to exclude its fintech, Ame, from the bankruptcy protection, as it is regulated by the central bank, and for authorization to increase its capital.
Americanas’ stores are ubiquitous at Brazilian shopping malls. It e-commerce unit, which traded as a separate company before a recent restructuring, is one of the country’s top online retailers.
Chief executive Sergio Rial resigned last week, less than two weeks after taking the job, citing the discovery of “accounting inconsistencies” totaling 20 billion reais.
Rial, the former head of Banco Santander’s Brazilian arm (SANB3.SA), attributed the inconsistencies to differences in accounting for the financial cost of bank loans and debt with suppliers.
Chief financial officer Andre Covre, who had just joined Americanas as well, also left the firm, which has Brazilian billionaires Jorge Paulo Lemann, Carlos Alberto Sicupira and Marcel Telles as reference shareholders.
Americanas said the reference shareholders intended to maintain the company’s liquidity at levels that allowed for a “good operation” of its stores, digital channel and other entities.
($1 = 5.2226 reais)
Reporting by Gabriel Araujo, Tatiana Bautzer and Peter Frontini in Sao Paulo and Carolina Pulice in Mexico City; Editing by Rosalba O’Brien and Bradley Perrett
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Jan 18 (Reuters) – Amazon.com Inc (AMZN.O) will cut some jobs in the United States, Canada and Costa Rica by the end of Wednesday as part of its plan to lay off 18,000 employees, the e-commerce giant said in a memo to staff seen by Reuters.
The layoffs are the latest in the U.S. technology sector, with companies cutting their bloated workforce and slashing costs to reverse pandemic-era excesses and prepare for a worsening global economy.
The company is terminating 2,300 employees in Seattle and Bellevue, according to an update on the Worker Adjustment and Retraining Notification (WARN) site. The U.S. labor law requires companies planning a mass layoff to inform employees 60 days before the closure.
Amazon.com Chief Executive Andy Jassy said earlier this month the cuts, about 6% of the company’s roughly 300,000 corporate employees, would mostly impact the e-commerce and human resources divisions. read more
Microsoft (MSFT.O) said earlier on Wednesday it would cut about 10,000 jobs and take a $1.2-billion charge. read more
Reporting by Tiyashi Datta, Eva Mathews and Maria Ponnezhath in Bengaluru; Editing by Krishna Chandra Eluri, Shinjini Ganguli, and Uttaresh.V
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Jan 17 (Reuters) – Apple Inc (AAPL.O) has postponed the launch of its lightweight augmented-reality glasses indefinitely due to technical challenges, but is still planning to unveil its first mixed-reality headset this year, Bloomberg News reported on Tuesday.
The iPhone maker’s mixed-reality headset – which combines both augmented and virtual reality – is set to launch in this year’s spring event, Bloomberg said, adding that the device will cost around $3,000.
Apple’s mixed-reality device would compete with the likes of Meta Platforms’ (META.O) Quest Pro virtual and mixed-reality headset, which it launched late last year for $1,500, half of the Apple device’s reported price.
The Cupertino, California-based company now plans to focus on lowering the price of the follow-up version of its mixed-reality device, expected as soon as 2024 or early 2025, instead of working on the AR glasses, according to the report.
Apple will aim to do so by using chips on par with those in the iPhone rather than components found in higher-end Mac computers.
Apple did not immediately respond to a Reuters request for comment.
The Information website first reported Apple’s plans to unveil a cheaper mixed-reality headset on Tuesday.
earlier in the day, the iPhone maker unveiled MacBooks powered by its new and faster M2 Pro and M2 Max chips in a surprise launch weeks ahead of its usual schedule.
Reporting by Kanjyik Ghosh and Shubham Kalia in Bengaluru; Editing by Janane Venkatraman
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Jan 17 (Reuters) – Microsoft Corp (MSFT.O) plans to cut thousands of jobs with some roles expected to be eliminated in human resources and engineering divisions, according to media reports on Tuesday.
The expected layoffs would be the latest in the U.S. technology sector, where companies including Amazon.com Inc (AMZN.O) and Meta Platforms Inc (META.O) have announced retrenchment exercises in response to slowing demand and a worsening global economic outlook.
Microsoft’s move could indicate that the tech sector may continue to shed jobs.
“From a big picture perspective, another pending round of layoffs at Microsoft suggests the environment is not improving, and likely continues to worsen,” Morningstar analyst Dan Romanoff said.
U.K broadcaster Sky News reported, citing sources, that Microsoft plans to cut about 5% of its workforce, or about 11,000 roles.
The company plans to cut jobs in a number of engineering divisions on Wednesday, Bloomberg News reported, according to a person familiar with the matter, while Insider reported that Microsoft could cut recruiting staff by as much as one-third.
The cuts will be significantly larger than other rounds in the past year, the Bloomberg report said.
Microsoft declined to comment on the reports.
The company had 221,000 full-time employees, including 122,000 in the United States and 99,000 internationally, as of June 30, according to filings.
Microsoft is under pressure to maintain growth rates at its cloud unit Azure, after several quarters of downturn in the personal computer market hurt Windows and devices sales.
It had said in July last year that a small number of roles had been eliminated. In October, news site Axios reported that Microsoft had laid off under 1,000 employees across several divisions.
Shares of Microsoft, which is set to report quarterly results on Jan. 24, were marginally higher in late afternoon trading.
Reporting by Yuvraj Malik in Bengaluru; Editing by Maju Samuel and Sriraj Kalluvila
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Alireza Akbari was a former Iranian deputy defence minister
Arrested in 2019, he was accused of spying for Britain
Execution piles more strain on fraught ties with West
UK’s Sunak calls it ‘a callous and cowardly act’
U.S. joins UK in condemning ‘barbaric act’
DUBAI/LONDON, Jan 14 (Reuters) – Iran has executed a British-Iranian national who once served as its deputy defence minister, its judiciary said, defying calls from London and Washington for his release after he was handed the death sentence on charges of spying for Britain.
Britain, which had declared the case against Alireza Akbari politically motivated, condemned the execution, with Prime Minister Rishi Sunak calling it “a callous and cowardly act carried out by a barbaric regime”.
Akbari, 61, was arrested in 2019.
The Iranian judiciary’s Mizan news agency reported the execution without saying when it had taken place. Late on Friday, British Foreign Secretary James Cleverly had urged Iran not to follow through with the sentence.
Also condemned by the United States and France, the execution looks set to further worsen Iran’s long-strained relations with the West, which have deteriorated since talks to revive its 2015 nuclear deal hit deadlock and after Tehran unleashed a deadly crackdown on protesters last year.
In an audio recording purportedly from Akbari and broadcast by BBC Persian on Wednesday, he said he had confessed to crimes he had not committed after extensive torture.
“Alireza Akbari, who was sentenced to death on charges of corruption on earth and extensive action against the country’s internal and external security through espionage for the British government’s intelligence service … was executed,” Mizan said.
The Mizan report accused Akbari of receiving payments of 1,805,000 euros ($1.95 million), 265,000 pounds ($323,989.00), and $50,000 for spying.
Cleverly said in a statement the execution would “not stand unchallenged”. He later announced Britain had summoned the Iranian Charge d’Affaires, imposed sanctions on Iran’s prosecutor general, and temporarily withdrawn its ambassador from Tehran for further consultations.
It marks a rare case of the Islamic Republic executing a serving or former senior official. One of the last occasions was in 1984, when Iranian navy commander Bahram Afzali was executed after being accused of spying for the Soviet Union.
British statements on the case have not addressed the Iranian charge that Akbari spied for Britain.
Iran’s foreign ministry summoned the British ambassador over what it called London’s “meddling in Iran’s national security realm”, the state news agency IRNA reported.
Iranian state media, which have portrayed Akbari as a super spy, broadcast a video on Thursday which they said showed he played a role in the 2020 assassination of Iran’s top nuclear scientist, Mohsen Fakhrizadeh, killed in an attack outside Tehran which authorities blamed at the time on Israel.
In the video, Akbari did not confess to involvement in the assassination but said a British agent had asked for information about Fakhrizadeh.
Iran’s state media often airs purported confessions by suspects in politically-charged cases.
Reuters could not establish the authenticity of the state media video and audio, or when or where they were recorded.
Akbari was a close ally of Ali Shamkhani, now the secretary of Iran’s Supreme National Security Council, who was defence minister from 1997 to 2005. Akbari fought during the Iran-Iraq war in the 1980s as a member of the Revolutionary Guards.
Alireza Akbari, Iran’s former deputy defence minister, speaks during an interview with Khabaronline in Tehran, Iran, in this undated picture obtained on January 12, 2023. Khabaronline/WANA (West Asia News Agency)/Handout via REUTERS
Ramin Forghani, a nephew of Akbari, told Reuters the execution had come as a shock.
“I don’t think a person who spent all his life, from an early age, to serve the country – since the Iran-Iraq war – would spy for any country,” he said, noting Akbari had the rank of colonel in the Revolutionary Guards.
Speaking by phone from Luxembourg, he said Akbari’s wife, who lives in London, had tried but failed to persuade Iranian officials to spare his life. Reuters was unable to reach her.
‘DESPICABLE AND BARBARIC’
The U.S. State Department described the execution as politically motivated and unjust. The U.S. ambassador to London called it “appalling and sickening”. French President Emmanuel Macron called it a “despicable and barbaric act”.
Iran’s ties with the West have also been strained by its support for Russia in Ukraine, where Western states say Moscow has used Iranian drones.
Along with other Western states, Britain, which has a long history of fraught ties with Iran, has been fiercely critical of Tehran’s crackdown on anti-government protests, sparked by the death in custody of a young Iranian-Kurdish woman in September.
Iran has issued dozens of death sentences as part of the crackdown, executing at least four people.
A British minister said on Thursday Britain was actively considering proscribing the Revolutionary Guards as a terrorist organisation but had not reached a final decision.
In the recording broadcast by BBC Persian, Akbari said he had made false confessions due to torture.
“With more than 3,500 hours of torture, psychedelic drugs, and physiological and psychological pressure methods, they took away my will. They drove me to the brink of madness… and forced me to make false confessions by force of arms and death threats,” he said.
Amnesty International said the execution displayed again Tehran’s “abhorrent assault on the right to life”. In Akbari’s case, “it is particularly horrific given the violations he revealed he was subjected to in prison”.
The Iranian authorities have not responded to accusations Akbari was tortured.
An Iranian state TV report – details of which Reuters could not independently verify – said he was arrested on espionage charges in 2008 before he was freed on bail and left Iran.
In an interview with BBC Persian broadcast on Friday, Akbari’s brother Mehdi said he had returned to Iran in 2019 based on an invitation from Shamkhani.
($1 = 0.9235 euros)
($1 = 0.8179 pounds)
Reporting by Dubai newsroom, Michael Holden in London, Tassilo Hummel in Paris and Kanishka Singh in Washington; Writing by Tom Perry; Editing by William Mallard, Angus MacSwan, Tomasz Janowski and Christina Fincher
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Peak of COVID wave seen lasting 2-3 months – epidemiologist
Elderly in rural areas particularly at risk
People mobility indicators tick up, but yet to fully recover
BEIJING, Jan 13 (Reuters) – The peak of China’s COVID-19 wave is expected to last two to three months, and will soon swell over the vast countryside where medical resources are relatively scarce, a top Chinese epidemiologist has said.
Infections are expected to surge in rural areas as hundreds of millions travel to their home towns for the Lunar New Year holidays, which officially start from Jan. 21, known before the pandemic as the world’s largest annual migration of people.
China last month abruptly abandoned the strict anti-virus regime of mass lockdowns that fuelled historic protests across the country in late November, and finally reopened its borders this past Sunday.
The abrupt dismantling of restrictions has unleashed the virus onto China’s 1.4 billion people, more than a third of whom live in regions where infections are already past their peak, according to state media.
But the worst of the outbreak was not yet over, warned Zeng Guang, the former chief epidemiologist at the Chinese Center for Disease Control and Prevention, according to a report published in local media outlet Caixin on Thursday.
“Our priority focus has been on the large cities. It is time to focus on rural areas,” Zeng was quoted as saying.
He said a large number of people in the countryside, where medical facilities are relatively poor, are being left behind, including the elderly, the sick and the disabled.
Authorities have said they were making efforts to improve supplies of antivirals across the country. Merck & Co’s (MRK.N) molnupiravir was made available in China from Friday.
The World Health Organization this week also warned of the risks stemming from holiday travelling.
The UN agency said China was heavily under-reporting deaths from COVID, although it is now providing more information on its outbreak.
“Since the outbreak of the epidemic, China has shared relevant information and data with the international community in an open, transparent and responsible manner,” foreign ministry official Wu Xi told reporters.
Health authorities have been reporting five or fewer deaths a day over the past month, numbers which are inconsistent with the long queues seen at funeral homes and the body bags seen coming out of crowded hospitals.
China has not reported COVID fatalities data since Monday. Officials said in December they planned to issue monthly, rather than daily updates, going forward.
Although international health experts have predicted at least 1 million COVID-related deaths this year, China has reported just over 5,000 since the pandemic began, one of the lowest death rates in the world.
DIPLOMATIC TENSIONS
Concerns over data transparency were among the factors that prompted more than a dozen countries to demand pre-departure COVID tests from travellers arriving from China.
Beijing, which had shut its borders from the rest of the world for three years and still demands all visitors get tested before their trip, objects to the curbs.
Wu said accusations by individual countries were “completely unreasonable, unscientific and unfounded.”
Tensions escalated this week with South Korea and Japan, with China retaliating by suspending short-term visas for their nationals. The two countries also limit flights, test travellers from China on arrival, and quarantine the positive ones.
Japan’s Chief Cabinet Secretary Hirokazu Matsuno said on Friday Tokyo will continue to demand transparency, labelling Beijing’s retaliation as extremely “regrettable.”
Parts of China were returning to normal life.
In the bigger cities in particular, residents are increasingly on the move, pointing to a gradual, though so far slow, rebound in consumption and economic activity.
An immigration official said on Friday 490,000 daily trips on average were made in and out of China since it reopened on Jan. 8, only 26% of the pre-pandemic levels.
Singapore-based Chu Wenhong was among those who finally got reunited with their parents for the first time in three years.
“They both got COVID, and are quite old. I feel quite lucky actually, as it wasn’t too serious for them, but their health is not very good,” she said.
CAUTION
While China’s reopening has given a boost to financial assets globally, policymakers around the world worry it may revive inflationary pressures.
However, December’s trade data released on Friday provided reasons to be cautious about China’s recovery pace.
Jin Chaofeng, whose company exports outdoor rattan furniture, said he has no expansion or hiring plans for 2023.
“With the lifting of COVID curbs, domestic demand is expected to improve but not exports,” he said.
Data next week is expected to show China’s economy grew just 2.8% in 2022, its second-slowest since 1976, the final year of Mao Zedong’s decade-long Cultural Revolution, according to a Reuters poll.
Some analysts say last year’s lockdowns will leave permanent scars on China, including by worsening its already bleak demographic outlook.
Growth is then seen rebounding to 4.9% this year, still well below the pre-pandemic trend.
Additional reporting by the Beijing and Shanghai newsrooms; Writing by Marius Zaharia; Editing by Raju Gopalakrishnan
Our Standards: The Thomson Reuters Trust Principles.
Virus spreading from cities to vulnerable villages
WHO says China response challenged by lack of data
China’s grand reopening marred by Japan, Korea spat
BEIJING, Jan 12 (Reuters) – People in China worried on Thursday about spreading COVID-19 to aged relatives as they planned returns to their home towns for holidays that the World Health Organization warns could inflame a raging outbreak.
The Lunar New Year holiday, which officially starts on Jan. 21, comes after China last month abandoned a strict anti-virus regime of mass lockdowns that prompted widespread frustration and boiled over into historic protests.
That abrupt U-turn unleashed COVID on a population of 1.4 billion which lacks natural immunity, having been shielded from the virus since it first erupted in late 2019, and includes many elderly who are not fully vaccinated.
The outbreak spreading from China’s mega-cities to rural areas with weaker medical resources is overwhelming some hospitals and crematoriums.
With scant official data from China, the WHO on Wednesday said it would be challenging to manage the virus over a holiday period considered the world’s largest annual migration of people.
Other warnings from top Chinese health experts for people to avoid aged relatives during the holidays shot to the most-read item on China’s Twitter-like Weibo on Thursday.
“This is a very pertinent suggestion, return to the home town … or put the health of the elderly first,” wrote one user. Another user said they did not dare visit their grandmother and would leave gifts for her on the doorstep.
“This is almost the New Year and I’m afraid that she will be lonely,” the user wrote.
More than two billion trips are expected across China over the broader Lunar New Year period, which started on Jan. 7 and runs for 40 days, according to the transport ministry. That is double last year’s trips and 70% of those seen in 2019 before the pandemic emerged in the central Chinese city of Wuhan.
“I will stay at home and avoid going to very crowded places,” said Chen, a 27-year-old documentary filmmaker in Beijing who plans to visit her home town in the eastern province of Zhejiang.
Chen said she would disinfect her hands before meeting elderly relatives, such as her grandmother, who has managed to avoid infection.
LACK OF DATA CRITICISED
The WHO and foreign governments have criticised China for not being forthright about the scale and severity of its outbreak, which has led several countries to impose restrictions on Chinese travellers.
China has been reporting five or fewer deaths a day over the past month, numbers that are inconsistent with the long queues seen at funeral homes. The country did not report COVID deaths data on Tuesday and Wednesday.
Liang Wannian, the head of a COVID expert panel under the national health authority, told reporters that deaths could only be accurately counted after the pandemic was over.
Although international health experts have predicted at least a million COVID-related deaths this year, China has reported just over 5,000 since the pandemic began, a fraction of what other countries have reported as they removed restrictions.
Looking beyond the death toll, investors are betting that China’s reopening will reinvigorate a $17 trillion economy suffering its lowest growth in nearly half a century.
That has lifted Asian stocks to a seven-month peak, strengthened China’s yuan currency against the U.S. dollar and bolstered global oil prices on hopes of fresh demand from the world’s top importer.
China’s growth is likely to rebound to 4.9% in 2023, according to a Reuters poll of economists released on Thursday. GDP likely grew just 2.8% in 2022 as lockdowns weighed on activity and confidence, according to the poll, braking sharply from 8.4% growth in 2021.
TRAVEL CHALLENGES
After three years of isolation from the outside world, China on Sunday dropped quarantine mandates for inbound visitors in a move expected to eventually also stimulate outbound travel.
But concerns about China’s outbreak has prompted more than a dozen countries to demand negative COVID test results from people arriving from China.
Among them, South Korea and Japan have also limited flights and require tests on arrival, with passengers showing up as positive being sent to quarantine.
In a deepening spat between the regional rivals, China has in turn stopped issuing short-term visas and suspended transit visa exemptions for South Korean and Japanese nationals.
Despite Beijing’s lifting of travel curbs, outbound flight bookings from China were at only 15% of pre-pandemic levels in the week after the country announced it would reopen its borders, travel data firm ForwardKeys said on Thursday.
Low airline capacity, high air fares, new pre-flight COVID-19 testing requirements by many countries and a backlog of passport and visa applications pose challenges as the industry looks to recovery, ForwardKeys Vice President Insights Olivier Ponti said in a statement.
Hong Kong Airlines on Thursday said it does not expect to return to capacity until mid-2024.
Reporting by Bernard Orr, Liz Lee, Eduardo Baptista and Jing Wang in Beijing; Writing by John Geddie; Editing by Lincoln Feast and Nick Macfie
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Jan 11 (Reuters) – U.S. clean energy companies are offering better wages and benefits, flying in trainers from overseas, and contemplating ideas like buying roofing and electric repair shops just to hire their workers as firms try to overcome a labor shortage that threatens to derail President Joe Biden’s climate change agenda.
The Inflation Reduction Act, signed into law last year, provides for an estimated $370 billion in solar, wind and electric vehicle subsidies, according to the White House. Starting Jan. 1, American consumers can take advantage of those tax credits to upgrade home heating systems or put solar panels on their roofs. Those investments will create nearly 537,000 jobs a year for a decade, according to an analysis by BW Research commissioned by The Nature Conservancy.
Reuters Graphics Reuters Graphics
But with the U.S. unemployment rate at an historic low of 3.5%, companies say they fear they will struggle to fill those jobs, and that plans to transition away from fossil fuels could stall out. Despite layoff announcements and signs of a slowdown elsewhere in the economy, the labor market for clean energy jobs remains tight.
“It feels like a big risk for this expansion. Where are we going to find all the people?” said Abigail Ross Hopper, president of the Solar Energy Industries Association trade group.
The shortage is anticipated to hit especially hard in electric vehicle and battery production and solar panel and home efficiency installations, forcing some of the companies into bold new approaches to find workers.
Korea’s SK Innovation Co Ltd, which makes batteries for Ford Motor Co’s (F.N) F-150 Lightning all-electric pickup truck in Commerce, Georgia, has pumped up pay and benefits as it ramps up its U.S. workforce to 20,000 people by 2025 from 4,000 today.
The battery maker is advertising pay between $20 and $34 an hour, above Georgia’s median hourly wage of $18.43, according to the U.S. Bureau of Labor Statistics. It is also covering 100% life insurance costs and matching retirement plan contributions up to 6.5%, above the national average of 5.6%, according to the Plan Sponsor Council of America. And the company is providing free food on the job.
“Georgia’s talent pool is not really massive. But we are trying to improve some of our policies to better source and retain workers,” said an SK official who declined to be named, citing the sensitivity of the matter.
Georgia state officials said SK’s hiring has been a success considering how quickly production had to ramp up to meet the company’s obligations to automakers.
While national residential solar installer SunPower Corp (SPWR.O) is recruiting aggressively, Chief Executive Peter Faricy said the company is also looking at what he called “crazy ideas” to secure labor – including buying up companies just for their workers.
“I’m not suggesting we will do this, but I want to give you an order of magnitude of what we’re considering. Like, should we acquire a roofing company and make them all solar installers? Do we go buy an electrical company and acquire 100 electricians?” he said.
SunPower also held talks within the last year with panel manufacturer First Solar Inc (FSLR.O) about developing a solar panel that would be easier to install, enabling crews to outfit two homes a day instead of just one, Faricy said.
SunPower’s competitor, Sunrun Inc (RUN.O), is deploying drones to survey roofs ahead of installation, reducing the number of workers required to scale roofs. It is also rewarding top crews with office parties.
“As best you can game-ify the experience for the employee… it just makes the industry more fun, more attractive,” Chris McClellan, Sunrun’s senior vice president of operations, said in an interview.
Offshore wind developer Orsted (ORSTED.CO), a Danish company that is planning to build projects off the East Coast, hopes to fly in employees from projects in the United Kingdom and Asia to help train staff. State reports have indicated that New York and Massachusetts face large offshore wind workforce gaps.
“We’re creating sort of an ecosystem where we don’t just have an offshore wind academy, but really train the trainers of the future,” said Mads Nipper, Orsted’s CEO, told Reuters.
The Biden Administration has repeatedly promised that new green energy jobs would be well-paying union jobs.
But many of those jobs have lagged the fossil fuel industry in pay, according to a 2021 study by BW Research, as clean energy companies have sought to contain costs to compete with entrenched industries. The IRA seeks to address that by tying prevailing wage and apprenticeship requirements to the subsidies.
Those provisions — and the hiring challenges — have put pressure on some employers to use unionized labor.
Learning from its earlier hiring challenges in Europe and Asia, Orsted signed an agreement with North America’s Building Trades Unions to secure workers.
Even Amazon.com Inc (AMZN.O), a company that has been embroiled in disputes with workers trying to organize, has used union labor to build the electric charging infrastructure for its fleet of electric delivery vehicles in Maspeth, Queens, NY.
Amazon did not respond to requests for comment.
Corrine Case, an electrician represented by the International Brotherhood of Electrical Workers, said she was paid $43 an hour to install the charging system at Amazon.
A single mother, Case said she was excited about the job security offered by the rising demand for electricians to install charging stations.
“Our field is constantly changing because of new energy sources and to be a part of that is amazing,” she said.
FREE WORKER TRAINING
In their hunt for workers, solar, wind and electric vehicle companies have expanded programs offering free and subsidized training to military veterans, women and the formerly incarcerated.
SK told Reuters that it has been recruiting at military job fairs and American Legion chapters and collaborating with programs like the Georgia National Guard’s Work for Warriors and the Manufacturing Institute’s Heroes MAKE America.
Some solar companies have tried to recruit veterans, saying the skills learned in military life translate well to the industry.
Utility scale solar developer SOLV Energy, SunPower and Nextracker last year teamed up with nonprofit Solar Energy International to fund a women-only training program for solar installers. More than 30 women attended the week-long course in Colorado.
In October, the nonprofit Solar Hands-On Instructional Network of Excellence (SHINE) teamed up with the Virginia Department of Corrections on a pilot program to train 30 prison inmates and recently incarcerated people in solar panel installation. SHINE’s director David Peterson said the group is discussing expanding the program.
In California, the nonprofit Grid Alternatives has trained 150 inmates at the Madera County jail in solar installation since 2017 and is expanding its program this year to other facilities in the state. Potential employers are more open to hiring the formerly incarcerated once they see they have received some training, Tom Esqueda, the nonprofit’s outreach manager, said.
In Los Angeles, nonprofit Homeboy Industries, which works to rehabilitate former gang members, is using the potential job opportunities for solar panel installers to help recruits for its state-funded jobs program. Homeboy trains 50-60 people a year as solar panel installers.
More than 80% of the people who have gone through the training in the last year have found jobs in solar, according to Jackie Harper, who oversees the program.
“I’m going to be sticking with this,” said Marco Reyes, 28, who went through the program after his release from prison in February and earns $23 an hour as an installer in Valencia, California.
He now plans to train in the electrical end of solar installation, which would bump up his pay.
“Everyone has a chance to move up the ladder into a better position,” he said. “This job to me is a life changer.”
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Reporting by Nichola Groom and Valerie Volcovici; Edited by Richard Valdmanis and Suzanne Goldenberg
Our Standards: The Thomson Reuters Trust Principles.