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Credit…Ruth Fremson/The New York Times
Just months after returning to the skies, Boeing’s troubled 737 Max jet is facing another setback.
Boeing said Friday that it had notified 16 airlines and other customers of a potential electrical problem with the Max and recommended that they temporarily stop flying some planes. The company refused to say how many planes were affected, but four U.S. airlines said they would stop using nearly 70 Max jets. Boeing would not say how long the planes would be sidelined.
Airlines and Boeing have tried hard in the last several months to convince passengers that the Max is safe. This latest problem is sure to spur further doubt among some travelers about the plane.
The affected airlines should verify that a component of the electrical power system on certain Max planes is sufficiently fastened, the plane maker said. The statement comes just months after companies resumed flying the jet, which had been grounded for nearly two years because of a pair of accidents that killed nearly 350 people.
“We are working closely with the U.S. Federal Aviation Administration on this production issue,” Boeing said in a statement. “We are also informing our customers of specific tail numbers affected and we will provide direction on appropriate corrective actions.”
The F.A.A. said that Boeing notified it late Thursday of the problem, which could affect the operation of a backup power control unit. The agency said it was working with the company and its customers. “It is premature to estimate the amount of time required as it could take a matter of hours or a few days,” Boeing said.
Boeing’s share price was down more than 1 percent around 12:30 p.m. and analysts said the problem did not appear significant.
“The fix seems to be well understood and timing would depend on availability of technicians and equipment access,” analysts at Jeffries, an investment bank, said in a note.
The Max was banned from flying globally in March 2019 because of the crashes, in Indonesia and Ethiopia. After a lengthy review, the F.A.A. allowed the Max to fly again in November, provided that Boeing and airlines made changes to the jet, including updating its flight control software and rerouting some electrical wiring. Boeing and the F.A.A. said the potential electrical issue flagged this week was unrelated to that earlier directive.
Since the F.A.A. review, aviation regulators around the world have also approved the plane. As of late March, 17 Boeing customers had returned the plane to service, using it for nearly 14,000 flights.
American Airlines, Southwest Airlines and United Airlines, the top three operators of the Max, said they had removed 63 planes from service. And Alaska Airlines said it had removed all four of its Max jets.
Southwest Airlines, which operates an all-Boeing fleet and is one of the biggest users of the Max, said that 30 of its 58 Max jets were affected by the notification. The airline said it had only 15 or fewer Max jets scheduled to fly each day, and it was swapping those planes for others in its 737 fleet.
United said that 16 of its 30 Max planes were affected by Boeing’s announcement and that they would not be used to carry passengers. American Airlines said that the issue affected 17 of its most recently delivered planes, all of which have been temporarily sidelined. American said that 24 Max planes delivered before the plane’s use was suspended were unaffected.
Credit…Gretchen Ertl/Associated Press
Lee Delaney, the president and chief executive of BJ’s Wholesale Club, died unexpectedly on Thursday of “presumed natural causes,” according to a statement released Friday by the company. He was 49.
“We are shocked and profoundly saddened by the passing of Lee Delaney,” said Christopher J. Baldwin, the company’s executive chairman, said in a statement. “Lee was a brilliant and humble leader who cared deeply for his colleagues, his family and his community.”
Mr. Delaney joined BJ’s in 2016 as executive vice president and chief growth officer. He was promoted to president in 2019 and became chief executive last year. Before joining BJ’s, he was a partner in the Boston office of Bain & Company from 1996 to 2016. Mr. Delaney earned a master’s in business administration from Carnegie Mellon University, and attended the University of Massachusetts, where he pursued a double major in computer science and mathematics.
Mr. Delaney led the company through the unexpected changes in consumer demand spurred by the pandemic, with many customers stockpiling wholesale goods as they hunkered down at home. “2020 was a remarkable, transformative and challenging year that structurally changed our business for the better,” Mr. Delaney said in the company’s last quarterly earnings report.
The BJ’s board appointed Bob Eddy, the chief administrative and financial officer, to serve as the company’s interim chief executive. Mr. Eddy joined the company in 2007 and became the chief financial officer in 2011, adding the job of chief administrative officer in 2018.
“Bob partnered closely with Lee and has played an integral role in transforming and growing BJ’s Wholesale Club,” Mr. Baldwin said. He said that the company would announce decisions about its permanent executive leadership in a “reasonably short timeframe.”
BJ’s, based in Westborough, Mass., operates 221 clubs and 151 BJ’s Gas locations in 17 states.
Tally of Amazon Warehouse Unionization Votes
Either side needed 1,521 votes to win.
A total of 505 ballots were challenged; 76 were void.·Source: National Labor Relations Board
Amazon beat back the unionization drive at its warehouse in Bessemer, Ala., the counting of ballots in the closely watched effort showed on Friday.
A total of 738 workers voted “Yes” to unionize and 1,798 voted “No.” There were 76 ballots marked as void and 505 votes were challenged, according to the National Labor Relations Board. The union leading the drive to organize, the Retail, Wholesale and Department Store Union, said most of the challenges were from Amazon.
About 50 percent of the 5,805 eligible voters at the warehouse cast ballots in the election. Either side needed to receive more than 50 percent of all cast ballots to prevail.
The ballots were counted in random order in the National Labor Relations Board’s office in Birmingham, Ala., and the process was broadcast via Zoom to more than 200 journalists, lawyers and other observers.
The voting was conducted by mail from early February until the end of last month. A handful of workers from the labor board called out the results of each vote — “Yes” for a union or “No” — for nearly four hours on Thursday.
Sophia June and Miles McKinley contributed to this report.
After weeks of wading into the debate over how to regulate SPACS, the popular blank-check deals that provide companies a back door to public markets, the Securities and Exchange Commission is sending its first shot across the bow.
John Coates, the acting director of the corporate finance division at the S.E.C., issued a lengthy statement on Thursday about how securities laws apply to blank-check firms, the DealBook newsletter reports.
“With the unprecedented surge has come unprecedented scrutiny,” Mr. Coates wrote of the recent boom in blank-check deals.
In particular, he is interested in a crucial (and controversial) difference between SPACs and traditional initial public offerings: blank-check firms are allowed to publish often-rosy financial forecasts when merging with an acquisition target, while companies going public in an I.P.O. are not. Regulators consider such forecasts too risky for firms as yet untested by the public markets.
Investors raise money for SPACs via an I.P.O. of a shell company, and those funds are used within two years to merge with an unspecified company, which then also becomes a publicly traded company. Because the deal is technically a merger, it’s given the same “safe harbor” legal protections for its financial forecasts as a typical M.& A. deal. And that’s why there are flying-taxi companies with little revenue going public via a SPAC while promising billions in sales far in the future.
The S.E.C. thinks allowing financial forecasts for these deals might be a problem. They can be “untested, speculative, misleading or even fraudulent,” Mr. Coates wrote. And he concludes his statement by suggesting a major rethink of how the “full panoply” of securities laws applies to SPACs, which could upend the blank-check business model.
If the S.E.C. does not treat SPAC deals as the I.P.Os they effectively are, he writes, “potentially problematic forward-looking information may be disseminated without appropriate safeguards.”
The letter serves as a warning, but perhaps not much else — yet. Unless the S.E.C. issues new rules (as it did for penny stocks) or Congress passes legislation, SPAC projections will continue. But this strongly worded statement could moderate or even mute them.
“The S.E.C. has now put them on notice,” Lynn Turner, a former chief accountant of the agency, said.
Online stores offering counterfeit or stolen vaccine cards have mushroomed in recent weeks, according to Saoud Khalifah, the founder of FakeSpot, which offers tools to detect fake listings and reviews online.
The efforts are far from hidden, with Facebook pages named “vax-cards” and eBay listings with “blank vaccine cards” openly hawking the items, Sheera Frenkel reports for The New York Times.
Last week, 45 state attorneys general banded together to call on Twitter, Shopify and eBay to stop the sale of false and stolen vaccine cards.
Facebook, Twitter, eBay, Shopify and Etsy said that the sale of fake vaccine cards violated their rules and that they were removing posts that advertised the items.
The Centers for Disease Control and Prevention introduced the vaccination cards in December, describing them as the “simplest” way to keep track of Covid-19 shots. By January, sales of false vaccine cards started picking up, Mr. Khalifah said. Many people found the cards were easy to forge from samples available online. Authentic cards were also stolen by pharmacists from their workplaces and put up for sale, he said.
Many people who bought the cards were opposed to the Covid-19 vaccines, Mr. Khalifah said. In some anti-vaccine groups on Facebook, people have publicly boasted about getting the cards.
Other buyers want to use the cards to trick pharmacists into giving them a vaccine, Mr. Khalifah said. Because some of the vaccines are two-shot regimens, people can enter a false date for a first inoculation on the card, which makes it appear as if they need a second dose soon. Some pharmacies and state vaccination sites have prioritized people due for their second shots.
Credit…Tom Jamieson for The New York Times
Before the pandemic, companies used to lure top talent with lavish perks like subsidized massages, Pilates classes and free gourmet meals. Now, the hottest enticement is permission to work not just from home, but from anywhere — even, say, from the French Alps or a Caribbean island.
Revolut, a banking start-up based in London, said Thursday that it would allow its more than 2,000 employees to work abroad for up to two months a year in response to requests to visit overseas family for longer periods.
“Our employees asked for flexibility, and that’s what we’re giving them as part of our ongoing focus on employee experience and choice,” said Jim MacDougall, Revolut’s vice president of human resources.
Georgia Pacquette-Bramble, a communications manager for Revolut, said she was planning to trade the winter in London for Spain or somewhere in the Caribbean. Other colleagues have talked about spending time with family abroad.
Revolut has been valued at $5.5 billion, making it one of Europe’s most valuable financial technology firms. It joins a number of companies that will allow more flexible working arrangements to continue after the pandemic ends. JPMorgan Chase, Salesforce, Ford Motor and Target have said they are giving up office space as they expect workers to spend less time in the office, and Spotify has told employees they can work from anywhere.
Not all companies, however, are shifting away from the office. Tech companies, including Amazon, Facebook, Google and Apple, have added office space in New York over the last year. Amazon told employees it would “return to an office-centric culture as our baseline.”
Dr. Dan Wang, an associate professor at Columbia Business School, said he did not expect office-centric companies to lose top talent to companies that allow flexible working, in part because many employees prefer to work from the office.
Furthermore, when employees are not in the same space, there are fewer spontaneous interactions, and spontaneity is critical for developing ideas and collaborating, Dr. Wang said.
“There is a cost,” he said. “Yes, we can interact via email, via Slack, via Zoom — we’ve all gotten used to that. But part of it is that we’ve lowered our expectations for what social interaction actually entails.”
Revolut said it studied tax laws and regulations before introducing its policy, and that each request to work from abroad was subject to an internal review and approval process. But for some companies looking to put a similar policy in place, a hefty tax bill, or at least a complicated tax return, could be a drawback.
Credit…George Etheredge for The New York Times
In only a year, the market value of office towers in Manhattan has plummeted 25 percent, according to city projections released on Wednesday.
Across the country, the vacancy rate for office buildings in city centers has steadily climbed over the past year to reach 16.4 percent, according to Cushman & Wakefield, the highest in about a decade. That number could climb further if companies keep giving up office space because of hybrid or fully remote work, Peter Eavis and Matthew Haag report for The New York Times.
So far, landlords like Boston Properties and SL Green have not suffered huge financial losses, having survived the past year by collecting rent from tenants locked into long leases — the average contract for office space runs about seven years.
But as leases come up for renewal, property owners could be left with scores of empty floors. At the same time, many new office buildings are under construction — 124 million square feet nationwide, or enough for roughly 700,000 workers. Those changes could drive down rents, which were touching new highs before the pandemic. And rents help determine assessments that are the basis for property tax bills.
Many big employers have already given notice to the owners of some prestigious buildings that they are leaving when their leases end. JPMorgan Chase, Ford Motor, Salesforce, Target and more are giving up expensive office space and others are considering doing so.
The stock prices of the big landlords, which are often structured as real estate investment trusts that pass almost all of their profit to investors, trade well below their previous highs. Shares of Boston Properties, one of the largest office landlords, are down 29 percent from the prepandemic high. SL Green, a major New York landlord, is 26 percent lower.
Credit…Amr Alfiky/The New York Times
The Biden administration is proposing a 16 percent increase in federal spending on domestic priorities including education, fighting climate change and reducing poverty as part of a $1.52 trillion funding request the White House is sending to Congress on Friday.
The request, which comes on top of President Biden’s plans to seek trillions of dollars in new infrastructure spending, is for the fiscal 2022 year, beginning in October. It does not include tax proposals, economic projections or spending on so-called mandatory programs like Social Security, all of which will be included in a formal budget request the White House will release later this spring.
But it lays out Mr. Biden’s priorities and shows his willingness to use the power — and purse-strings — of the federal government to reverse what officials called a decade of underinvestment by the government in the nation’s most pressing domestic problems.
The expansion includes a significant bump up in spending on education, including a $20 billion increase in funding to high-poverty schools, which the administration describes as the largest year-over-year increase to the Title I program since its inception under President Lyndon B. Johnson.
The budget would also dramatically increase government spending to fight and adapt to climate change, calling for an additional $14 billion above what the federal government spent in fiscal 2021. That spending would be infused across nearly every federal agency, from environment and science offices to the Pentagon, Treasury and transportation departments.
The Environmental Protection Agency, which came under sustained attack during the Trump administration, would also get a significant boost, with the White House requesting $11.2 billion — a $2 billion increase from the previous year’s enacted level — including about $110 million just to restore the hundreds of employees who left the agency in recent years.
The budget also reflected the increasing sense of urgency within the Biden administration to deter migration to the southern border, including $1.2 billion toward investing in border security technology, such as sensors to detect illegal crossings and tools to improve entry ports. It is also notable for what it does not include: No new funding for border wall construction — a commitment Mr. Biden had made.
Congress, which is responsible for approving government spending, is under no requirement to adhere to the White House budget, which is generally viewed as a political messaging document. In recent years, lawmakers rejected many of the Trump administration’s efforts to gut domestic programs.
Officials have promised that Mr. Biden’s full budget will be released later this spring. They have blamed delays on a lack of cooperation from outgoing members of the Trump administration.
“Well there’s no question, as we talked about during the transition, that we dealt with some impactful intransigence from the outgoing political appointees,” Jen Psaki, the White House press secretary, told reporters this week.
“We had some cooperation from the career staff, but we didn’t have all of the information that we needed,” she added. “As you all know, we also don’t have a budget director. We have not had a budget director confirmed. We have now an acting budget director, which is an important step forward.”
Mr. Biden’s first pick to lead the budget office, Neera Tanden, withdrew from consideration amid Republican opposition centered on her past statements on Twitter that were critical of conservatives.
Shalanda D. Young, who was confirmed by the Senate last month to be deputy director of the Office of Management and Budget, is serving as Mr. Biden’s acting budget director.
Credit…Rebecca Noble for The New York Times
U.S. stock futures rose on Friday along with government bond yields after the Federal Reserve chair, Jerome Powell, reiterated his intention to keep supporting the economic recovery until it is complete.
The rollout of vaccinations meant the United States economy could probably reopen soon, but the recovery was still “uneven and incomplete,” Mr. Powell said at the International Monetary Fund annual conference on Thursday.
He pointed out that the economic burden of the pandemic was falling most heavily on low-income service workers who were least able to bear it. “I really want to finish the job and get back to a great economy,” Mr. Powell said.
The yield on 10-year Treasury notes jumped 5 basis points, or 0.05 percentage point, to 1.67 percent. The yield on 10-year government bonds rose across Europe, too.
Stocks, low volatility and oil prices
The S&P 500 index was set to open 0.1 percent higher and has risen 0.4 percent so far this week.
The relatively quiet week in the stock market has sent the VIX index, a measure of volatility, to its lowest level since February 2020. The index was at 17 points on Friday. In mid-March, as the pandemic shut down huge parts of the global economy, it spiked above 80.
European stock indexes were mixed on Friday, though the Stoxx Europe 600 was heading for its sixth straight week of gains. The DAX index in Germany rose 0.1 percent after data showed an unexpected drop in industrial production.
Oil prices rose slightly with futures of West Texas Intermediate, the U.S. crude benchmark, 0.2 percent higher to $59.70 a barrel.