Southwest Airlines’ operations are steady after three days of disruptions.
Southwest Airlines’ operations are steady after three days of disruptions.
Southwest Airlines’ operations appeared to return to normal on Thursday after three days of widespread flight delays and cancellations caused by technological problems.
As of midmorning, the airline had canceled only about 1 percent of its scheduled flights for the day, though 10 percent of its flights were delayed, according to FlightAware, a flight tracking service. About half of Southwest’s scheduled flights on Tuesday and Wednesday were delayed. On Monday, more than 1,500 Southwest flights ran late, accounting for about a quarter of all flight delays within the United States. The disruptions infuriated thousands of passengers, many of whom complained on social media.
The turmoil began on Monday night when a problem with a weather data provider prevented Southwest from safely flying its planes temporarily. The issue was resolved, but the airline faced a technological issue of its own on Tuesday. That was fixed within hours, but nevertheless had a cascading effect on flights that day and the next. The airline said it was investigating the outages, but had no reason to believe they were caused by a breach.
The flight delays and cancellations took place during a generally slow part of the week, but they come as overall travel is picking up. Summer is typically the busiest season for air travel in the United States and this year’s is expected to be supercharged as newly vaccinated Americans take vacations or visit relatives and friends, in some cases for the first in more than a year. The Transportation Security Administration screened more than two million people at airports on Sunday, more than at any point since the pandemic began.
Southwest’s troubles seemed to be subsiding, but Thursday wasn’t without problems. Southwest and Delta Air Lines were among many companies whose websites were briefly inaccessible early in the day because of problems at an internet firm that provides services to many businesses.
Lordstown Motors, the struggling electric vehicle start-up, told securities regulators on Thursday that it did not have “binding” orders for a pickup truck it is developing, correcting statements made by its president on Tuesday.
The company, which announced the resignation of its chief executive and its chief financial officer on Monday, has made several confusing and contradictory statements in recent weeks. On Tuesday, its president, Rich Schmidt, said the company had binding orders but refused to say name any customers or say whether they had put down deposits. But in a filing to the Securities and Exchange Commission, the company said Thursday that it had “no binding purchase orders or commitments from customers.”
Mr. Schmidt had also claimed, at an event of the Detroit-based Automotive Press Association, that Lordstown had enough money to begin production in late September. But last week, the company said in an S.E.C. fining that it did not have enough cash to begin production and might not survive.
Lordstown gained attention by purchasing a shuttered General Motors factory in Lordstown, Ohio, in 2019. At the time, G.M. was under pressure from President Donald J. Trump to find a buyer for the plant. Mr. Trump invited its founder and chief executive, Steve Burns, to the White House last September. Mr. Burns resigned on Monday.
Last October, Lordstown merged with DiamondPeak Holdings, a special purpose acquisition company, that allowed it to join the Nasdaq stock exchange and raise hundreds of millions of dollars from investors.
But the company has struggled to turn its electric pickup truck concept into reality. One of its prototypes burned down during testing in February and another dropped out of a 280-mile off-road race in Baja California after just 40 miles.
The company has invited investors, analysts and journalists to its factory next week to discuss work on its truck. But Lordstown said in its S.E.C. filing on Thursday that it would delay its annual shareholders meeting to Aug. 19.
The company’s shares have swung wildly, climbing to more than $30 in February before sliding down to about $7. Lordstown was down about 2 percent on Thursday morning after its latest S.E.C. filing.
This week, the European Central Bank proposed using gender diversity as criteria for approving board members at the banks it supervises. Such mandates are one lever for increasing representation of women in an industry still dominated by men.
When women were asked by Women in Banking & Finance, a nonprofit group based in London, to reflect on their careers, common complaints included that they were heard differently simply because they were women and that they were required to find an innovative niche to succeed in the finance industry. Men, on the other hand, were more often welcome on traditional paths. It was even worse for Black women, for whom “the headwinds were more intense and the tailwinds were fewer,” according to the report.
Half of women interviewed specifically mentioned “mediocre” men, who they said could survive more easily than women with comparable abilities. When prompted to explain, women cited factors that included men belonging to a social group where other members are gatekeepers; always being around, while women are more likely to take parental leave; and a greater reluctance for companies to “manage out” men because they are viewed as breadwinners.
Competent, empathetic managers and bonuses for collaboration could be one fix. Women said empathetic managers gave them the access and freedom to pursue career-enriching opportunities, but they said their firms did not reward inclusive managers. Instead, the report’s authors suggested solutions like restructuring bonuses to be based at least partly on team performance, regular assessments of the allocation of stretch assignments and promotions by gender and formal programs for easing in employees returning from parental leave.
The banking industry has relatively few women leaders. Only 8 percent of chief executives at European credit and investment institutions, and a fifth of positions in management bodies at Europe’s largest banks, are women, according to the European Banking Authority. At U.S. financial services firms, women accounted for just under 22 percent of leadership roles in 2019, according to the most recent analysis from Deloitte. If current trends continue, the analysis found, gender equality in leadership roles at financial services firms may not come until 2085.
Initial claims for state jobless benefits rose last week, the Labor Department reported Thursday.
The weekly figure was about 402,000, up 37,000 from the previous week. New claims for Pandemic Unemployment Assistance, a federally funded program for jobless freelancers, gig workers and others who do not ordinarily qualify for state benefits, totaled 118,000, up 47,000 from the prior week. The figures are not seasonally adjusted. (On a seasonally adjusted basis, state claims totaled 412,000, an increase of 37,000.)
In four states — Alaska, Iowa, Mississippi and Missouri — it was the final week in which some or all federal pandemic unemployment benefits were paid, including a $300 supplement to other benefits. A total of 26 states have announced plans to discontinue federal benefits this month or next, even though they are funded through September.
New state claims remain high by historical standards but are one-half the level recorded in early February. The benefit filings, something of a proxy for layoffs, have receded as businesses return to fuller operations, particularly in hard-hit industries like leisure and hospitality.
Move over, Nyan Cat. Mattel is the latest creator to jump on the hottest craze in cryptocurrency as it puts its first digital art featuring its Hot Wheels vehicles up for sale.
On Tuesday, the toymaker will offer three pieces of digital art in the form of nonfungible tokens, or NFTs, for auction on its Mattel Creations website as part of its Hot Wheels NFT Garage Series. The one-of-a-kind works will feature classic cars from its archive: Twin Mill, Bone Shaker and Deora II.
The auction will run for a week, and in another first for Mattel, the winner will be allowed to pay in the Ethereum, a cryptocurrency.
The company said it was planning NFT auctions for its other toy brands. “Mattel is creating a new way for innovation and artistry to converge in the toy space and will continue to express its brands in the NFT format,” it said in a statement.
The move is part of an evolution of physical toys as collectible art, Richard Dickson, the company’s president and chief operating officer, said in an interview.
“Part of our effort to make Mattel relevant is to make sure that our brands are timeless and timely,” he said. “We need to be on top of current conversations.”
NFTs rely on blockchain technology, similar to the computer code that makes many cryptocurrencies possible. They have become popular in the art world because they allow artists to have more control over their works by selling limited-edition digital goods directly to consumers. But critics say the market could crash if cryptocurrencies tumble.
JPMorgan Chase said on Thursday that it would buy Nutmeg, a prominent British digital wealth management company, as it looks to expand its business in Britain.
Terms of the deal were not disclosed.
It is another effort by the banking giant, the biggest in the United States by assets, to broaden its footprint in a country where it has operated for more than 160 years. To date, though, Citigroup and Goldman Sachs are the only American lenders to offer consumer accounts in Britain.
Nutmeg is meant to complement the digital-focused retail bank that JPMorgan plans to open in Britain later this year.
Nutmeg, which opened for business in 2012, is among the most prominent of Britain’s so-called roboadvisers, a new class of financial companies that use software to manage customers’ investment portfolios. It now also offers a service in which human advisers oversee investment decisions.
The company says it oversees 3.5 billion pounds, or $4.9 billion, in assets for more than 140,000 customers. But it has yet to turn a profit, as it focuses on growing its business.
The two already share a business relationship: Nutmeg relies on exchange-traded funds overseen by JPMorgan’s asset management business for one of its investment strategies.
“I am truly impressed with the digital experience that Chase is building for the U.K.,” Neil Alexander, Nutmeg’s chief executive, said in a statement. “This new chapter in our story will see Nutmeg’s customers benefit from a wider range of products and services in the future, and allow us to expand into new markets.”
JPMorgan’s chief executive, Jamie Dimon, has signaled that he is keen to strike acquisitions to expand his bank’s business, particularly on the digital side. In his most recent letter to shareholders, Mr. Dimon wrote, “Acquisitions are in our future, and fintech is an area where some of that cash could be put to work.”
In its announcement of the acquisition, JPMorgan said it had not yet decided whether to keep the Nutmeg name.
The deal is expected to close by year end, subject to regulatory approval.
Stocks on Wall Street drifted higher in early trading on Thursday, after a turbulent day on Wednesday in which indexes fell nearly 1 percent before recovering most of that loss as investors assessed the latest economic projections from the Federal Reserve.
The U.S. Dollar rose 0.7 percent after the Labor Department reported Thursday the initial claims for state jobless benefits rose last week. The weekly figure was about 402,000, up 37,000 from the previous week. Lawmakers from more than 25 states have opted for some or all emergency unemployment benefits, hoping to incentivize workers to rejoin the labor force amid the reports of labor shortages across the country.
The yield on 10-year U.S. Treasury notes slipped to 1.56 percent. On Wednesday, the yield had jumped eight basis points, or 0.08 percentage point, to 1.58 percent after Fed policymakers published projections indicating they would make two interest rate increases by the end of 2023.
Most European stocks fell on Thursday, and the Stoxx Europe 600 declined 0.3 percent, the first drop in 10 days.
Oil prices slipped. Futures on West Texas Intermediate, the U.S. benchmark, declined 0.3 percent to $71.95 a barrel.
Lordstown Motors, an electric truck start-up on the brink of collapse, dropped more than 1 percent after it said its vehicle purchase agreements weren’t binding orders, contradicting a claim by the company’s president a few days earlier. The start-up recently said it didn’t have enough cash for its production and its top two executives resigned.
Shares in the German company CureVac plunged 44 percent in early trading. The company reported disappointing preliminary results on Wednesday from a clinical trial of its coronavirus vaccine. The company started trading on the Nasdaq in August.
Apple, more than any other company, has been vulnerable to the harder line that China’s leader, Xi Jinping, has taken.
As a result, over the past several years, Apple has made compromises in China that undercut the values its executives have put at the center of its brand. To placate authorities and keep its global business running, Apple has put its Chinese customers’ data at risk and aided the Chinese government’s vast censorship operation, The New York Times reported last month.
In 2014, Apple hired Doug Guthrie to teach its managers and advise executives about China. He also conducted research, and his first project was the company’s supply chain, Jack Nicas reports for The New York Times.
When he started at Apple, Mr. Guthrie said, China’s new leader was looking for ways to use his influence over American companies in the country. In 2014, China’s so-called dispatch labor law went into effect, limiting the share of temporary workers in a company’s work force to 10 percent. From Day 1, Apple and its suppliers were in violation.
Apple executives were concerned and confused, Mr. Guthrie said. They knew the company couldn’t comply because it needed the extra workers to meet periods of intense demand, such as the holidays.
“‘This is the point. You are supposed to be out of compliance,’” he said he told them. “‘Not so they can shut you down, but so you’ll figure out what they want you to do and figure out how to do it.’”
Mr. Guthrie began giving his lecture on Apple’s risk in China around that time. Its extreme reliance on the country left it with little leverage to resist.
The United States and Britain have agreed to end a long-running trade spat over aircraft subsidies, and not impose certain retaliatory tariffs for five years, the nations announced on Thursday.
The tariffs related to a 17-year dispute between the United States and the European Union over subsidies for Boeing and Airbus, and over much of that time, Britain was a member of the bloc. The agreement mirrors one reached between the United States and European Union on Tuesday.
The pact announced on Thursday also said the two nations would work together to “address the challenge posed by nonmarket economies, such as China” in the civil aircraft sector. China has built a state-sponsored aerospace manufacturer, Commercial Aircraft Corporation of China, to compete with Boeing and Airbus.
Britain and the United States agreed to explore a coordinated approach to screen investments in the aircraft industry financed by China and other nonmarket economies. These investments could lead to “appropriation of critical technologies,” and potential national security risks, a joint statement published by the British government on Thursday said. The two countries also plan to cooperate on an approach to screen investments by British or U.S. companies in China, like joint ventures and the development of production facilities.
Last week, President Biden and Prime Minister Boris Johnson of Britain revived the 80-year-old Atlantic Charter to signal their eagerness to work together on major issues including climate change, cybersecurity and autocratic governments such as China.
The agreement to end of the aircraft dispute “strengthens our special relationship and builds on the revitalized Atlantic Charter, which affirms our ongoing commitment to sustaining and defending our enduring values against new and old challenges,” the joint statement said.
In March, the United States suspended retaliatory tariffs against Britain for four months to work out a longer-term solution to the aircraft dispute. This would support British producers in several industries, but especially Scotch whisky, which faced a 25 percent tariff in the United States.
Britain had already suspended its own retaliatory tariffs in January, after it left the European Union’s single market and customs union. This decision essentially separated Britain from the dispute between the European Union and the United States, as the British government was trying to smooth over its relationship with the new Biden administration, with the eventual goal of securing a free-trade agreement.
Wise, a British financial technology company focused on cross-border payments, said it would go public via a direct listing on the London Stock Exchange. The company, which said it had been profitable since 2017, added that it would use a dual-class share structure giving the founders greater voting rights. It’s a win from the British government which has been trying to attract more large tech companies to list in London instead of New York, especially since Brexit has eroded some of the activity of this financial center.
Hundreds of Southwest Airlines flights were delayed or canceled again on Wednesday as the company sought to resolve disruptions from earlier in the week amid a pickup in summer travel. The headaches began on Monday night, when a problem with a weather data supplier prevented the airline from safely flying planes. On Tuesday, the airline suffered its own technological problems, resulting in half of its flights that day being delayed and many being canceled, according to FlightAware, a flight tracking service. Spillover from that episode caused Wednesday’s problems, the airline said. About 10 percent of Southwest’s flights were canceled and another 19 percent were delayed by midafternoon, according to FlightAware.
A group of union employees at The New Yorker and two other publications, Ars Technica and Pitchfork, has reached a deal with their parent company, Condé Nast. The deal includes base pay of $55,000 for employees at all three unions, rising to $60,000 by April 2023. Under the agreement, many employees at the three publications will receive wage increases of at least 10 percent, the unions said in a statement. The agreement includes a cap on increases for health care costs and defined working hours. Last week, The New Yorker Union unveiled a website including the statement that it was “on the verge of a strike.”
The websites for several major corporations in Australia and beyond briefly stopped working for many users on Thursday, in what analysts said was a glitch caused by service disruptions at a hosting platform based in the United States.
The outage was the second failure in the past two weeks that appeared to demonstrate widespread dependence on a handful of companies that maintain the plumbing underpinning the global internet.
The disruptions on Thursday affected several Australian banks, the airline Virgin Australia and the Hong Kong Stock Exchange, among other companies. There were also reports of service outages at the websites of companies in Germany, India and elsewhere.
Just as those websites failed, the website Downdetector.com, which tracks internet disruptions, said that user reports showed a spike in “possible problems” at Akamai, a service provider based in Massachusetts. Downdetector.com said the reports began to spike around 12:10 a.m. Eastern time on Thursday and began to taper off about an hour later.
Cybersecurity experts in Australia wrote on social media that the disruptions at Akamai appeared to be the cause of the website failures. The company said in a brief statement that it was “aware of the issue” and working to restore services.
In Australia, the outage affected online and mobile banking services at three major banks — ANZ, Commonwealth, and Westpac — as well as smaller banks, including ME and Macquarie. Residents complained on social media of being stuck in supermarket checkouts with no way to pay for groceries or being stranded at gas stations and unable to pay for fuel.
Westpac said in a statement that some its services had been affected by “an issue today with a third party provider,” while ANZ said it had been hit by “an incident related to an external provider.” Commonwealth Bank said it had been affected by a “tech outage.”
The country’s other major bank, National Australia Bank, said that its services had not been affected.
Australia’s post office said that an “external outage” had affected some of its services.
Virgin Australia said in a statement that it was “one of many organizations to experience an outage with the Akamai content delivery system today, and we are working with them to ensure that necessary measures are taken to prevent these outages from reoccurring.”
By about 2 a.m. Eastern time in the United States, or late Thursday afternoon in Australia, a few Australian banks said that their services were back online.
UPDATE: 4.15PM We are starting to see services return to normal following a tech outage that had widespread impact across businesses. Thank you for your patience – we’re sorry to cause any inconvenience to your afternoon.
— CommBank (@CommBank) June 17, 2021
Last week, several major websites, including those of the British government, The New York Times, CNN, The Financial Times and The Guardian, were briefly inaccessible. Many of the affected sites appeared to have been restored after a little less than an hour.
That outage was connected to Fastly, a provider of cloud computing services used by businesses around the world to operate their websites. Fastly, which is based in San Francisco, later said the problem had been identified and was being fixed.
An earlier version of this article and an accompanying photograph incorrectly listed one company among others affected by the outage. National Australia Bank’s operations were not affected.
The Department of Justice filed a civil suit on Wednesday to block the proposed merger of Aon and Willis Towers Watson, arguing that combining two of the Big Three insurance brokers would create an anticompetitive “behemoth.”
Many observers thought the government would allow the deal. Regulators in Europe, where both companies also operate, had indicated that they were likely to approve the merger, which would create the world’s largest insurance brokerage.
The $30 billion transaction would “eliminate substantial head-to-head competition and likely lead to higher prices and less innovation,” the Justice Department’s complaint says. It says the companies dominate markets for risk and reinsurance brokering, health and pension benefits brokering, actuarial services for employer benefit programs, and private exchanges that offer retiree benefits.
Attorney General Merrick Garland said in a statement, “Today’s action demonstrates the Justice Department’s commitment to stopping harmful consolidation and preserving competition that directly and indirectly benefits Americans across the country.”
In a joint statement, the companies said the department’s assessment “reflects a lack of understanding of our business, the clients we serve and the marketplaces in which we operate.” They said they remained committed to the deal and were working with regulators internationally to make it happen.
The companies had tried to assuage the competition concerns of American regulators by selling off some of their businesses. The efforts came too late, however, and fell “way short,” said Richard Powers, acting assistant attorney general of the Justice Department’s antitrust division. The proposed divestitures involved only a small fraction of their businesses and a “handful of employees” and didn’t leave the companies free of entanglements, he said.
The government said the companies were aware they already operated in an oligopoly, adding in a statement: “If permitted to merge, Aon and Willis Towers Watson could use their increased leverage to raise prices and reduce the quality of products relied on by thousands of American businesses — and their customers, employees and retirees.”
The Justice Department worked on the case with regulators from around the world, including in Europe. A senior department official noted that the markets in Europe were different, especially the health benefits and pensions systems, and that the outcomes of the European merger reviews could be different.
Both companies are incorporated in Ireland, with headquarters in London. Aon has around 50,000 employees and offices in about 120 countries, including over 100 offices in the United States. It reported revenue of more than $11 billion last year.
Willis Towers Watson employs about 45,000 people in more than 80 countries, including over 80 offices in the United States. It reported revenue of more than $9 billion in 2020.
The action on Wednesday was the Biden administration’s first challenge to a potential merger. Coming on the heels of President Biden’s naming Lina Khan, a vocal critic of anticompetitive consolidation, as chair of Federal Trade Commission on Tuesday, it is a sign the administration will act on trustbusting promises made on the campaign trail.