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Tesla puts spotlight on its self-driving tech
Elon Musk is scheduled to show off Tesla’s latest advances in autonomous vehicles today. (Watch it here at 2 p.m. Eastern.) But it’s unclear whether the event will persuade skeptics that the company is on the right track.
Expect to hear a lot about robo-taxis. Mr. Musk has contended that Tesla’s cars would be able to drive without human intervention by next year. Today’s event is expected to promote hardware advances that let the company’s vehicles act as a self-driving fleet. (A Twitter user posted pictures of what was apparently a photo shoot for the event.)
Tesla’s exuberance isn’t shared by others in the industry. Ford’s C.E.O., Jim Hackett, said two weeks ago that his company had “overestimated” how quickly the technology had advanced. And Waymo, considered the leader in autonomous vehicles, has rolled out a test robo-taxi program in Phoenix very slowly.
The announcement comes before the release of Tesla’s latest quarterly results. The company has already said that it plans to report a loss and disclosed that vehicle sales fell 31 percent from three months ago.
Some skeptics think today’s event is a distraction from Wednesday’s earnings report. “I’ve seen this movie before,” David Kudla, a short-seller, told the WSJ.
More: Tesla will shrink its board to seven directors from 11 by next year. A federal judge gave the company and the S.E.C. more time to settle their legal dispute. And the carmaker is investigating a report that a Model S exploded in Shanghai.
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Today’s DealBook Briefing was written by Andrew Ross Sorkin in New York and Michael J. de la Merced in London.
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Sri Lanka blacks out social media after bombings
The country blocked social networks like Facebook and WhatsApp yesterday after terrorist attacks that killed nearly 300 people.
The Sri Lankan government said it had “taken steps to temporarily block all social media avenues until the investigations are concluded.” Residents of Colombo, the capital, told The Guardian that they had received inflammatory unverified information about the attacks before the shutdown.
Yet the move also cut off a critical way of communicating, making it harder for Sri Lankans and foreigners to understand what was happening. And the International Federation of Journalists has said that there’s no “substantial” evidence to show such bans can scale down violence, according to the WaPo.
The action reflects governments’ wariness of social media. Max Fisher of the NYT writes, “The move suggested not just officials’ worries about social media’s risk to public safety at moments of national tension, but also their distrust in the companies’ ability to manage the platforms responsible.”
More: Washington’s reluctance to put limits on social media stands out from the rest of the world.
Huawei’s sales jump despite U.S. pressure
The Chinese telecom giant said that its first-quarter revenue rose 39 percent over the same time a year ago, even as the Trump administration works to block its global growth.
Huawei said that its revenue grew to 179.7 billion renminbi, or $26.8 billion, in the first three months of the year. It was the first time that the privately held company has published quarterly results. (The report didn’t include the company’s profit.)
It’s all because of 5G. The company said it had signed 40 commercial contracts to supply carriers with the superfast wireless technology, and shipped more than 70,000 5G base stations, the WSJ reports.
That’s despite U.S. efforts to persuade allies from using Huawei equipment, calling the company a risk to national security. Australia and Japan have banned Huawei from their wireless infrastructure, but other countries have dismissed the concerns.
Huawei is gloating about its success. The company’s founder, Ren Zhengfei, told CNBC, “For such a powerful country to be scared of a small company like us, some other countries are saying, ‘Your products are so good that the U.S. government is scared.’ ”
More: The C.I.A. reportedly accused Huawei of being financed by Chinese state security agencies. Critics say the Trump administration is focused too much on bashing Huawei.
Carlos Ghosn is indicted again
Japanese prosecutors charged the former Nissan chairman again today, accusing him of breach of trust, a new count of financial impropriety while running the carmaker, Ben Dooley of the NYT reports.
It was the fourth indictment for Mr. Ghosn, who was rearrested this month. He had already been accused of falsifying his pay and abusing his office to transfer unrealized trading losses to Nissan. Mr. Ghosn was supposed to be released today — unless he faced new charges.
After a raid on his apartment this month, “prosecutors said they were investigating Mr. Ghosn over allegations that he used a Nissan subsidiary to redirect $5 million to himself,” Mr. Dooley reports.
Nissan said it had filed a criminal complaint against Mr. Ghosn “after determining that payments made by Nissan to an overseas vehicle sales company via a subsidiary were in fact directed by Ghosn for his personal enrichment.”
How consumers paid for Trump’s trade war
Americans paid much more for washing machines because of tariffs, showing how President Trump’s trade fight has had unintended consequences, Jim Tankersley of the NYT reports.
A new report by three economists found:
• Consumers bore between 125 percent and 225 percent of the costs of the tariffs.
• The price of dryers also went up.
• Overall consumer prices rose $1.5 billion.
Mr. Trump imposed the tariffs after Whirlpool complained about foreign competitors. The levies started at 20 percent per imported washer and later rose to 50 percent. The president said that the tariffs would create U.S. jobs and falsely claimed that America’s trading partners would foot the bill.
American manufacturers ended up increasing their prices after foreign rivals were forced to raise theirs. “The price increases are likely due to domestic firms exploiting their market power,” Felix Tintelnot, one of the report’s authors, told the NYT.
And it was an expensive job-creation program: The U.S. gained around 1,800 new jobs because of the tariffs — at a cost of $817,000 each, the report estimates.
Another Boeing crown jewel is also plagued by problems
Even as investigators are examining what went wrong with Boeing’s 737 Max jets, company employees have raised concerns about another crucial model for the plane maker, the Dreamliner, Natalie Kitroeff and David Gelles of the NYT report.
• With airlines placing hundreds of orders for the Dreamliner, the company set up a factory in South Carolina to help produce the jet along with a plant in Everett, Wash.
• But Boeing had no pool of aerospace workers to draw from in South Carolina, and struggled to recruit locally.
• Workers have since “filed nearly a dozen whistle-blower claims and safety complaints with federal regulators, describing issues like defective manufacturing, debris left on planes and pressure to not report violations.”
• “All factories deal with manufacturing errors, and there is no evidence that the problems in South Carolina have led to any major safety incidents. The Dreamliner has never crashed, although the fleet was briefly grounded after a battery fire. Airlines, too, have confidence in the Dreamliner.”
• “I’ve told my wife that I never plan to fly on it,” Joseph Clayton, a technician at the South Carolina factory, told the NYT. “It’s just a safety issue.”
Joe Stiglitz wants to rebrand progressive economics
The Nobel laureate thinks that the battle over economic priorities has become a war of words — and that it’s time for liberal policies to take on a new image to win over the electorate, Andrew writes.
• Mr. Stiglitz, who won the Nobel Prize in economics for identifying the inequities of market economies, now finds that many of his policy proposals have been embraced by the likes of Senator Bernie Sanders and Representative Alexandria Ocasio-Cortez.
• But as young leftists have embraced the term “socialism,” Republicans have used the term as a political cudgel.
• “Some people are trying to attach more emotions to the historical legacy of socialism, which was never the same as communism, but in the United States those distinctions have gotten blurred,” Mr. Stiglitz told Andrew.
• Mr. Stiglitz’s preferred term is “progressive capitalism,” because “I believe in a market economy, but I also believe in government regulation.”
Revolving door
China reportedly named Chen Siqing as the head of Industrial & Commerce Bank of China, the world’s biggest bank.
Robert Zoellick has stepped down as chairman of AllianceBernstein.
Hershey hired Steve Voskuil from the medical device maker Avanos Medical as its C.F.O.
Rich Friedman has reportedly given up day-to-day management of Goldman Sachs’s private-investing arm. His responsibilities will be picked up by Sumit Rajpal and Andrew Wolff.
Wes Uhlmeyer stepped down as Archer Daniels Midland’s top grain-trading executive. Chris Boerm, ADM’s transportation chief, will take over his responsibilities.
The speed read
Deals
• Deutsche Bank and Commerzbank are expected to decide soon whether to merge, but political opposition to a deal is growing. (NYT)
• Big investment firms like D.E. Shaw and the Carlyle Group are taking a bigger cut out of investor profits. Skeptics worry that financiers are getting too greedy. (Bloomberg, FT)
• Shares in Zoom jumped in the company’s market debut last Thursday. But so did shares in Zoom Technologies — which has nothing to do with that I.P.O. (DealBook)
• I.P.O.s for consumer tech companies get all the attention. Those for enterprise-focused businesses perform much better. (WSJ)
• Institutional Shareholder Services backed Barclays in its fight against the activist investor Edward Bramson. (FT)
Politics and policy
• Hospitals stand to lose billions under “Medicare for all” proposals, since private insurance pays much more for procedures than government programs do. (NYT)
• Senator Elizabeth Warren is collecting plenty of money from employees of Facebook, Google and Amazon, despite calling for breaking up tech giants. (Mercury News)
• Joe Biden reportedly plans to announce that he’s running for president on Wednesday. (Atlantic)
• Confidential emails and text messages chronicle the falling out between President Trump and his longtime lawyer, Michael Cohen. (NYT)
• Facebook may loosen restrictions on political advertising ahead of European Parliament elections next month. (FT)
Tech
• Federal regulators are said to be discussing how to hold Mark Zuckerberg accountable for Facebook’s data lapses. (WaPo)
• Kansas students and teachers are rebelling against an online curriculum developed by Facebook engineers and backed by Mr. Zuckerberg and his wife, Priscilla Chan. (NYT)
• Publicly, Apple disparaged Qualcomm’s technology. Privately, the tech giant said it was “the best,” according to documents shown in court last week. (WaPo)
• Kroger, America’s biggest supermarket chain, is struggling with the online grocery revolution. (WSJ)
• Spotify is riding high, but music-licensing costs and growing competition should worry investors. (Barron’s)
Best of the rest
• Larry Fink of BlackRock sees no sign of a recession within the next 12 months. (CNBC)
• Banks want to overturn a federal law prohibiting them from hiring people convicted of minor crimes. (WSJ)
• Michael Avenatti is accused of embezzling nearly $2 million from a client, an ex-girlfriend of the N.B.A. player Hassan Whiteside. (LAT)
• Sovereign wealth funds built on oil money are under pressure to cut ties to the sector. (FT)
• Corporate donations to rebuild the Notre-Dame cathedral in Paris show how corporate governance is hazy at best at some French companies. (WSJ)
• China censored the camera maker Leica from the Sina Weibo social network over a video commemorating the “Tank Man” photograph taken during the Tiananmen Square protests in 1989. (FT)
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