Regulator will require serious crashes involving systems like Tesla’s Autopilot to be reported.
At least three Tesla drivers have died since 2016 while driving with Autopilot engaged. The agency is requiring automakers to provide more information on crashes where such systems are involved.
There has been growing concern about the safety of such driver-assistance systems, in particular Tesla’s Autopilot.Credit…KCBS-TV, via Associated Press
A federal safety agency told automakers on Tuesday to begin reporting and tracking crashes involving cars and trucks that use advanced driver-assistance technology such as Tesla’s Autopilot and General Motors’ Super Cruise, a sign that regulators are taking the safety implications of such systems more seriously.
Automakers must report any serious crashes within one day of learning about them, the agency, the National Highway Traffic Safety Administration, said in an order. Serious accidents include those in which a person is killed or taken to a hospital, a vehicle has to be towed away, or a vehicle’s airbags are deployed.
“By mandating crash reporting, the agency will have access to critical data that will help quickly identify safety issues that could emerge in these automated systems,” said Steven Cliff, the agency’s acting administrator. “Gathering data will help instill public confidence that the federal government is closely overseeing the safety of automated vehicles.”
The order comes amid growing concern about the safety of such systems, in particular Autopilot, which uses radar and cameras to detect lane markings, other vehicles and objects in the road. It can steer, brake and accelerate automatically with little input from the driver, but can sometimes become confused.
At least three Tesla drivers have died since 2016 while driving with Autopilot engaged. In two to those crashes, the system and the drivers failed to stop for tractor-trailers crossing roadways, and in a third the system and the driver failed to avoid a concrete barrier on a highway. Tesla has acknowledged that Autopilot can have trouble recognizing stopped emergency vehicles, although the company and its chief executive, Elon Musk, maintain the system makes its cars safer than those of other manufacturers.
Critics of Autopilot say Mr. Musk has hyped the technology and the Autopilot name has caused some drivers to believe that they can turn their attention away from the road while the system is turned on. A few people have recorded videos of themselves leaving the driver’s seat while the car was in motion. Mr. Musk also frequently touts a more advanced technology still in development called Full Self-Driving, which Tesla has allowed some customers to use even though the company has acknowledged to regulators that the system cannot drive on its own in all circumstances.
Under the agency’s Tuesday order, automakers must provide more-complete information on serious crashes involving advanced driver-assistance system within 10 days. And companies must submit a report on all crashes involving driver-assist systems every month.
The agency has also asked drivers to contact it if they own a vehicle with a driver-assistance system and believe it has a safety defect.
Declan Kelly, the chief executive of Teneo, is stepping down from the company.Credit…Kevin Winter/Getty Images for Global Citizen Vax Live
Declan Kelly, the chief executive of Teneo, the go-to advisory and communications firm for many of the world’s largest companies, said on Tuesday that he would step down. The firm, which specializes in crisis communications, has been dealing with its own turmoil after reports of Mr. Kelly’s drunken misconduct at a charity event last month.
The firm’s chief operating officer, Paul Keary, was appointed as Mr. Kelly’s replacement, effective immediately, Teneo’s board said in a statement on Tuesday.
The news comes after reports surfaced that Mr. Kelly was asked to leave the board of the nonprofit organization Global Citizen after his misconduct at an event hosted by the charity on May 2. The event, an after party for the Vax Live concert, was hosted by Selena Gomez, with Prince Harry and Meghan Markle serving as chairs. It featured a video appearance from President Biden and in-person musical performances from celebrities including Jennifer Lopez.
Mr. Kelly was “inebriated and behaved inappropriately towards some women and men,” according to a statement from Mr. Kelly’s representative, provided to The New York Times before his resignation. The exact details of what occurred at the event remain unclear, even to top executives at the firm.
Shortly after that May event, Mr. Kelly told the firm’s roughly 40-member senior leadership team that he would cut back on some of his duties to deal with an unspecified health issue.
But most of the rest of Teneo’s employees, as well as the firm’s clients, found out about the incident last week from an article in The Financial Times. Afterward, the firm began to reach out to clients. And Mr. Kelly called for a staff meeting to discuss the article.
Mr. Kelly had planned to resume his normal duties after Labor Day.
“I’ve seen a number of crisis communications challenges over the course of my career — this one is especially challenging because the firm and Mr. Kelly are in the business,” said Tony D’Angelo, a professor of Public Relations at Syracuse University. “This is like a celebrity chef who burns dinner on a global broadcast.”
The fallout has been swift. Last week, General Motors, which became a client of Teneo this year, severed ties with the firm. Many others have questioned the firm about what happened at the event.
“On May 2nd I made an inadvertent, public and embarrassing mistake for which I took full responsibility and apologized to those directly affected, as well as my colleagues and clients,” Mr. Kelly said in a statement. “A campaign against the reputation of our firm has followed and may even continue in the coming days. However, regardless of the veracity of any such matters I do not want them to be an ongoing distraction to the running of our company.”
Teneo was founded by Mr. Kelly, Mr. Keary and Doug Band in 2011 and has 1,250 employees. It gives advice to some of the country’s largest companies, like Coca-Cola, Dow Chemical and I.B.M. Its prominent advisers include former Speaker Paul Ryan and the former Xerox chief executive Ursula Burns.
“This is a friend of mine who definitely had a bad occurrence — and he has to deal with that, and he’s dealing with that as we go forward,” Ms. Burns said Tuesday. She called Teneo a “good firm.”
Mr. Kelly’s resignation is the second prominent departure from the firm in the last two years. Mr. Band, a former close adviser to President Bill Clinton, stepped down as president of the firm last year. Both had positioned themselves as well-connected faces of the firm.
Teneo’s board said in its statement that it “believes strongly in Teneo’s unique C.E.O. advisory model, global reach and ability to deliver differentiated value to our clients.”
“We are confident that under Paul, and the leadership team, Teneo will continue on its successful path of growth, delivering unique value to clients across its diverse business segments,” the board said.
CVC Capital Partners, a private equity firm, acquired a majority stake in Teneo two years ago, valuing it at about $700 million. A managing partner of CVC, Chris Stadler, is on the board of Global Citizen, which hosted the event at which Mr. Kelly acted inappropriately. CVC declined to comment.
United Airlines planes at Newark Liberty International Airport. United expects to add more than 500 aircraft to its fleet in the coming years.Credit…Chris Helgren/Reuters
United Airlines announced Tuesday that it was ordering 270 single-aisle planes from Boeing and Airbus, the biggest aircraft purchase in the airline’s history and the largest in the United States in a decade. The deal will drive an expansion of United’s fleet, in both the number and the size of its planes.
“It’s about building an airline that can compete with anyone,” Andrew Nocella, the airline’s chief commercial officer, said in a call with reporters.
Boeing will supply 200 of the planes, all versions of the 737 Max, its leading commercial aircraft. Of those, 150 will be 737 Max 10s, and 50 will be smaller Max 8s. Airbus will provide the remaining 70 planes, all from the A321neo line.
United took its first delivery of a Max 8 on Monday and expects to receive the first of the other two planes in 2023. The airline currently has just over 800 planes in its fleet.
United declined to say how much it was paying for the planes, but such large orders are typically deeply discounted. The order is good news for Boeing, which is trying to recover from the nearly two-year global ban on the Max after two fatal crashes. Since global regulators began lifting their bans on the plane late last year, Boeing has rushed to deliver the planes and book new orders.
Combined with existing orders, United expects to add more than 500 planes to its fleet in the coming years, including 40 in 2022 and 138 in 2023. The airline also plans a huge retrofit project in which it will upgrade its existing single-aisle planes to match the interiors of the new planes. About 300 of the new planes will replace smaller jets, while 200 will be used to expand United’s fleet.
Airlines in the United States are experiencing a strong summer rebound in travel. On Sunday, the Transportation Security Administration screened nearly 2.2 million people at airport security checkpoints, the most since the pandemic began 16 months ago. United on Monday also said it expected to earn a pretax profit in July, its first since January 2020.
The airline played up the purchase as a transformational investment, which it calls “United Next.” By 2026, the expansion will increase the number of seats per United flight in North America by nearly 30 percent and increase the number of premium seats available per flight by 75 percent, the airline said. It will also allow United to replace older, more-polluting planes, improving overall fuel efficiency by 11 percent, the airline said.
To support the new planes and the service they will provide, United expects to add 25,000 jobs nationwide, including up to 5,000 in Newark and 4,000 in San Francisco.
Federal moratoriums on evictions and foreclosures have kept most delinquent homeowners in place since last March, but those protections will end on July 31.Credit…Michael Dwyer/Associated Press
Federal officials on Monday finalized a rule intended to slow down what they fear will be a looming wave of pandemic-related foreclosures by making it easier for lenders to modify borrowers’ loan terms and by adding additional hurdles before lenders can seize homes.
The Consumer Financial Protection Bureau said that around 3 percent of residential mortgage borrowers are now at least four months in arrears — the point at which most foreclosure processes are allowed to begin.
“We have never before seen this many borrowers so far behind on their mortgages,” Dave Uejio, the bureau’s acting director, said.
Federal moratoriums on evictions and foreclosures have kept most delinquent homeowners in place since last March, but those protections will end on July 31. Under the consumer bureau’s new rule, which takes effect on Aug. 31 and extends until the end of the year, mortgage servicers will generally be barred from initiating a foreclosure unless they have complied with heightened rules.
In most cases, lenders will only be allowed to foreclose on a home if it is abandoned, if the borrower has not responded to messages for at least 90 days, or if the borrower has been formally evaluated for all available “loss mitigation” options (such as a loan modification) and none are viable.
Servicers will also be allowed to proceed with foreclosures for borrowers who were already 120 or more days delinquent before March 1, 2020.
The new rule also allows mortgage servicers to more easily offer some loan modifications so long as the changes do not increase a borrower’s monthly payments or extend the loan’s term more than 40 years beyond the modification date.
The rule is significantly softer than a proposal the consumer bureau floated in April, which would have banned most foreclosure filings for the rest of the year. Mr. Uejio described the agency’s revised approach as one that would encourage “a measured return” to foreclosures.
Pete Mills, the senior vice president of residential policy for the Mortgage Bankers Association, said the agency’s rule was generally reasonable and incorporated changes the industry had sought, such as the exception allowing foreclosures on abandoned properties to proceed.
“In many cases, servicers are already going well beyond the minimum requirements in the rules to reach borrowers,” Mr. Mills said.
There will be a one-month gap between the end of the federal moratorium and the date when the consumer bureau’s new rule takes effect, but lenders will still be required to make a good-faith effort to contract borrowers and explore alternatives before proceeding with a foreclosure, bureau officials said on a call with reporters.
Diane Thompson, a senior adviser at the bureau, said the agency’s goal was to head off “preventable” foreclosures and to give people time to consider their choices, including resuming payments, modifying their loan or selling their home.
For those who haven’t been making payments since the pandemic took hold, it’s “important to understand that you’re going to need to figure out a plan for how to address that in the not-too-distant future,” Ms. Thompson said. “People need to be assessing their options.”
Gas prices are on the rise in the United States. One of the biggest challenges facing policymakers is how they might respond to a persistent rise in inflation.Credit…David Zalubowski/Associated Press
The global economy is entering a new stage of the recovery from the pandemic, in which policymakers must prepare for “different but no less formidable challenges,” the Bank of International Settlements said on Tuesday.
In its annual economic report, the organization, whose 63 members include the world’s largest central banks, warned that the recovery had so far been “incomplete and uneven” as emerging market economies (aside from China) have lagged behind, the euro area is trailing its peers, and the services sector is recovering more slowly.
“While the recovery has been faster and stronger than anyone would have imagined a year ago, we are not out of the woods yet,” Agustin Carstens, the group’s general manager, said.
Monetary policy by central banks and fiscal policy by governments needs to remain supportive but also be flexible, the report said. One of the biggest challenges facing policymakers is how they might respond to a persistent rise in inflation. Though many, including officials at the Federal Reserve, say they strongly believe that the current increase in prices is only temporary, traders and investors are wary of being caught out by a sudden change in this stance that leads to higher interest rates or the end of bond-buying programs.
The bank’s report contemplates three scenarios for the recovery, including one in which inflation exceeds expectations because of fiscal stimulus, particularly in the United States, and consumers spending more of their savings than anticipated. Higher-than-expected inflation would “severely” test central banks, which would find it difficult to avoid market volatility, the report said.
But even if the rise in inflation is temporary, “financial market participants could overreact,” the report said. This could lead to disruption in markets because there has been a long period of “aggressive risk taking.”
The collapse of the New York hedge fund Archegos Capital Management, which was forced to sell off billions of dollars in equities in March after it could not meet the demands of several banks, costing the banks several billions in losses, “could turn out to be the proverbial canary in the coal mine,” the report said. The fund’s failure raises a question about resilience of nonbank financial firms and how much hidden exposure they have.
When the pandemic ends, it will leave “issues that may well be more daunting and enduring,” the report said. One of those will be the need to normalize policy so that central banks and governments have “safety margins” to fight the next crises.
“An economy that operates with thin safety margins is vulnerable to both unexpected events and future recessions, which will inevitably come,” the report said.
“If you stepped into Facebook’s turf or resisted pressure to sell, Zuckerberg would go into ‘destroy mode,'” the states said of Facebook’s chief executive, Mark Zuckerberg.Credit…Tom Brenner/The New York Times
A federal judge on Monday eviscerated arguments in two antitrust suits against Facebook — one filed by the Federal Trade Commission, and the other by attorneys general from 46 states and the District of Columbia and Guam.
The judge, James E. Boasberg of U.S. District Court for the District of Columbia, said the federal government had not made its case that Facebook held a monopoly over social networking. And he said the states had waited too long to bring their case.
Here are the arguments the prosecutors made and the judge’s response:
The Federal Trade Commission said that “Facebook has maintained its monopoly position by buying up companies that present competitive threats and by imposing restrictive policies that unjustifiably hinder actual or potential rivals that Facebook does not or cannot acquire.” Facebook achieved monopoly power after “toppling early rival Myspace,” the agency said, and has become “the largest and most profitable social network in the world.”
Judge Boasberg said that the commission had not sufficiently proved that Facebook was a monopoly and that the agency’s definition for social media was too vague.
“The F.T.C.’s complaint says almost nothing concrete on the key question of how much power Facebook actually had, and still has,” Judge Boasberg wrote. “It is almost as if the agency expects the court to simply nod to the conventional wisdom that Facebook is a monopolist. After all, no one who hears the title of the 2010 film ‘The Social Network’ wonders which company it is about.
“Yet, whatever it may mean to the public, ‘monopoly power’ is a term of art under federal law with a precise economic meaning: the power to profitably raise prices or exclude competition in a properly defined market. To merely allege that a defendant firm has somewhere over 60 percent share of an unusual, nonintuitive product market — the confines of which are only somewhat fleshed out and the players within which remain almost entirely unspecified — is not enough.”
The commission also claimed that Facebook maintained its dominance by threatening to cut off software developers from plugging into the social network if they made competing products. It also argued that, although Facebook had reversed a policy that allowed it to cut off stand-alone apps that replicated its features, “Facebook is likely to reinstitute such policies if such scrutiny passes.”
“A monopolist has no duty to deal with its competitors, and a refusal to do so is generally lawful,” Judge Boasberg wrote. “To be actionable, such a scheme must involve specific instances in which that policy was enforced (i) against a rival with which the monopolist had a previous course of dealing; (ii) while the monopolist kept dealing with others in the market; (iii) at a short-term profit loss, with no conceivable rationale other than driving a competitor out of business in the long run.”
“There are no facts alleged, moreover, suggesting that the antitrust ‘scrutiny’ the company is facing is ‘about to’ pass or indeed will pass at any time in the foreseeable future. Indeed, a quick glance at any newspaper yields the contrary conclusion.”
“Facebook has coupled its acquisition strategy with exclusionary tactics that snuffed out competitive threats,” the states said in their suit, “and sent the message to technology firms that, in the words of one participant, if you stepped into Facebook’s turf or resisted pressure to sell, Zuckerberg would go into ‘destroy mode,’ subjecting your business to the ‘wrath of Mark.'” In addition to Facebook’s chief executive, Mark Zuckerberg, the states specifically referred to the company’s purchases of Instagram in 2012 and WhatsApp in 2014.
Judge Boasberg noted that the states’ suit, “which seeks, in the main, to have Facebook divest one or both companies — was not filed until December 2020.” He added, “The court is aware of no case, and plaintiffs provide none, where such a long delay in seeking such a consequential remedy has been countenanced in a case brought by a plaintiff other than the federal government.” (A doctrine, known as laches, that “precludes relief for those who sleep on their rights,” does not apply to the federal government, “to which the federal antitrust laws grant unique authority as sovereign law enforcer.”)
Walmart said Tuesday that it would offer a low-cost, private-brand insulin that could save customers up to 75 percent compared with other insulin products. The company’s prescription insulin is part of its ReliOn brand, and will include analog insulin vials for $72.88 and FlexPens for $85.88. The products will be available in Walmart this week and Sam’s Club pharmacies in mid-July, according to the retail giant. Walmart’s insulin brand is manufactured by Novo Nordisk, a pharmaceutical company based in Denmark.
Randal K. Quarles, the Federal Reserve’s vice chair for supervision, suggested on Monday that the global rush to research and develop central bank digital currencies is driven by fear of missing out, or, as it is better known, FOMO. Mr. Quarles warned that the nation has a habit of falling victim to a “mass suspension of our critical thinking and to occasionally impetuous, deluded crazes or fads.” He invoked the parachute pants of the 1980s as a parallel to the current currency craze, noting that sometimes fads are just silly.
Several Wall Street banks announced plans on Monday to increase dividends and buy back their stock as the economy rebounds from the coronavirus pandemic. Morgan Stanley and Wells Fargo were the most aggressive. Morgan Stanley said it would double its dividend to 70 cents per share and expand a previously announced share buyback plan to $12 billion from $10 billion. Wells Fargo also said it would double its dividend, to 20 cents per share, and buy back $18 billion of its own shares. JPMorgan Chase, the nation’s largest bank by assets, said it would increase its dividend to $1 a share starting in the third quarter, from the current 90 cents.
U.S. stocks rose on Tuesday after the release of the Conference Board’s consumer confidence levels. The index rose to 127.3, up from 120 in May and above economists’ expectations.
The S&P 500 rose 0.2 percent, while the Nasdaq composite rose 0.1 percent.
The yield on 10-year U.S. Treasury notes rose one basis point, or 0.01 percentage points, to 1.49 percent.
Shares of Facebook fell 0.6 percent after a judge dismissed antitrust lawsuits brought against the tech giant by the Federal Trade Commission and more than 40 states. The social media giant’s jumped 4 percent on Monday after the dismissal, but slumped on Tuesday. The company’s market value rose above $1 trillion for the first time on Monday.
European stock indexes rose, with the Stoxx 600 Europe gaining 0.5 percent.
Oil prices ticked up. Futures on West Texas Intermediate, the U.S. crude benchmark, were up 1 percent to $73.68 a barrel. Brent crude, the global benchmark, rose 0.9 percent to $75.40.
After a year in which demands for racial justice acquired new resonance, some experts are pushing back against a strongly held tenet of economics: that differences in wages largely reflect differences in skill. Economists should stop looking for a reason other than racism, they say, to account for why African Americans are falling further behind in the economy.
In 2020, the typical full-time Black worker earned about 20 percent less than a typical full-time white worker. And Black men and women are far less likely than whites to have jobs. So the median earnings for Black men in 2019 amounted to only 56 cents for every dollar earned by white men. The gap was wider than it was in 1970, writes Eduardo Porter for The New York Times.
Black workers also earn lower wages relative to their credentials. An analysis by the Economic Policy Institute, a liberal think tank, found that whether they have a high school diploma or an advanced degree, Black workers make about 80 percent of the earnings of a white worker with similar education.
“I’m not in denial that education matters, but I am pushing back on the extent that it matters,” said Darrick Hamilton, a professor of economics at the New School in New York. “The fact is there are a limited number of jobs and we sort them based on power. Race is a deciding factor.”
But for all the evidence of racial disparities, many economists say employers’ racial biases cannot fully explain what’s going on in the workplace. The idea that discrimination alone has determined Black workers’ lot at work — their employment and their wages — does not mesh with how American society changed over the past half-century.
Most of the gains made by African Americans in the workplace were made from the 1940s to the 1970s, when racial biases were much more prevalent across society. Then they got stuck.
“There was convergence between Blacks and whites, but then it stopped,” said Erik Hurst, a professor of economics at the University of Chicago’s Booth School of Business. “The question is why.”
Gasoline prices in the United States are close to $1 a gallon higher than they were a year ago.Credit…Alyssa Schukar for The New York Times
When oil ministers for the group called OPEC Plus meet this week to discuss the energy markets, they may be in a good mood.
After the chaos of last year — marked by a self-destructive price war, and a brief episode when some crude prices fell below zero — Saudi Arabia, Russia and their allies are in a strong position. Oil prices are up 85 percent to about $75 a barrel for Brent crude, and there is growing talk that the price could eventually hit $100 for the first time since 2014, reports Stanley Reed for The New York Times.
The main reason is that global economies that were crushed in last year’s lockdowns are now consuming more oil, while the Organization of the Petroleum Exporting Countries and their allies have kept a tight leash on output. And the prospects for the immediate future appear good: Demand for oil is expected to expand further in the coming months. Crude oil production in the United States, a rival to OPEC in recent years, has been slow to recover from 2020 as investors in oil producers lean on the management to restrain spending.
“If I was an OPEC Plus producer, I would feel pretty comfortable with the way things are,” said Neil Atkinson, an independent oil analyst.
Even the concerns about global warming may be playing into the big oil producers’ hands, for a while anyway, some analysts say. Pressured by global warming concerns, oil companies have increased their investments in clean energy like wind and solar, and put less money into pumping oil. As a result, they may be slow to increase spending to bring additional oil to market as economies expand, a move that will help prompt further price increases.
It remains unclear whether the OPEC Plus countries will agree to expand supply at Thursday’s meeting. Prince Abdulaziz bin Salman, the Saudi oil minister and chair of the OPEC Plus meetings, tends to shrug off forecasts of roaring consumption.
“I take my guidance from what I see today,” he said earlier this month. “I am not taking any guidance from a projection.”