The Wall Street Journal - USA (2020-12-01)

** TUESDAY, DECEMBER 1, 2020 ~ VOL. CCLXXVI NO. 129 WSJ.com HHHH$4.

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BYPETERLOFTUS

Moderna

Requests

Covid-

Vaccine

Approval

Timing could make

shot the second for

U.S. use by year-end

after positive trial data

but at the same time, it’s not a dictatorship,”

said Keith Miller, who was among Subway

franchisees resisting when the company

asked operators during the summer to offer

two foot-long sandwiches for $10, a price

they said was unprofitable.

Subway, incorporated as Doctor’s Associ-

ates Inc., said it communicates with franchi-

sees daily and has allowed them to defer or

skip royalty payments during the pandemic.

It ultimately reduced the foot-long-sub pro-

motion to online only.

There has always been push and pull be-

tween franchisers—the corporations that

own a brand, handle its strategy and set its

standards—and the franchisees—those who

own and operate the stores, hire the employ-

ees and deal with customers. An older ap-

proach that assumed both sides would pull

in the same direction is giving way to a

Please turn to page A

Franchisees and executives at burger

chains, hotels and fruit-basket shops used to

count on chummy relations to bolster their

businesses. Those days are over.

Stressed by the hit to business from the

coronavirus pandemic, store owners and cor-

porate bosses at Subway, Econo Lodge and

other companies are bickering publicly as

never before.

Companies are asking franchisees to buy

equipment and adopt new safety protocols,

moves they say are necessary to reassure

customers during the pandemic and to grow

thereafter. Franchisees are pushing back on

store upgrades, promotional discounts and

fees they say are excessive and undermine

their profits. Some are agitating to replace

executives or suing to change practices.

“I get that franchising isn’t a democracy,

BYMICAHMAIDENBERG ANDHEATHERHADDON

Iran Says Scientist Was Killed in Remotely Controlled Strike

MEMORIAL: A funeral ceremony was held in Tehran on Monday for Iranian nuclear scientist Mohsen Fakhrizadeh. The country’s

top security official said Mr. Fakhrizadeh was killed in a remotelycontrolled ambush, an attack Iran has blamed on Israel. A

IRANIAN DEFENSE MINISTRY/ASSOCIATED PRESS

Global debt outstanding

Note: 4Q 2020 figure is an estimate

Source: Institute of International Finance

$

0

50

100

150

200

250

trillion

2013 ’15 ’

Seeking a Tranquil Retreat?

Try a Japanese Laundromat

iii

Upscale laundries offer music

for the dry cycle, organic ginger beer

TOKYO—The gift shop sells

$138 tote bags, the cafe offers

organic ginger beer and staff

members have passed a na-

tional exam certifying their ex-

pertise.

In Japan, at least, those are

some features of the neighbor-

hood laundromat.

You won’t find grime under

the machines or harshly lighted

urban boredom at this coun-

try’s luxe laundries. Instead, in

an aging economy that tends to

shrink every cycle or two, the

wash-and-dry business is grow-

ing thanks to high-end services.

Chika Takayama, 52, a

homemaker, visits her Tokyo

laundromat almost every day,

mostly for the dryers. At the

laundromat’s cafe, people sip

drinks and read magazines or

work on their laptops. The

cafe closed for about two

months earlier this year when

the government declared a

state of emergency because of

the pandemic, but the laun-

dromat remained open.

The services also include

curated background music,

some of which is available on

the laundromat’s “Laundry Mu-

sic” CD. It features 12 songs in-

cluding a number called

“Moody Dryer.”

Ms. Takayama tried listening

to one of the songs at home. “It

just wasn’t the same,” she said.

“The music here felt soothing,

beautiful...maybe because the

atmosphere is good and the

lighting different.”

The number of laundromats

in Japan has doubled over the

past two decades to 21,500 as

they have evolved into a more

stylish and convenient choice

for working women and the el-

Please turn to page A

BYSURYATAPABHATTACHARYA

ANDMIHOINADA

General Motors Co. will no

longer take an equity stake in

electric-truck maker Nikola

Corp. under a stripped-down

agreement, a significant re-

trenchment from an earlier

pact that fueled investor en-

thusiasm for both companies.

Under the revised deal re-

vealed on Monday, GM still in-

tends to provide Nikola with

fuel-cell technology but it has

nixed plans to take an 11%

stake in the Phoenix-based

startup in exchange for sup-

plying engineering work and

other services.

The Detroit auto maker has

also scrapped plans to build an

electric pickup truck called the

Badger for Nikola, a key part of

an earlier agreement outlined

in September. That deal got

delayed after a negative short

seller’s report raised questions

about the readiness of some

aspects of Nikola’s business, al-

legations the company said

were false and misleading.

The original agreement bol-

stered Nikola’s status as one of

several highflying green-vehicle

startups drawing attention from

Wall Street. GM’s lending of its

engineering and manufacturing

expertise, and being granted a

spot on Nikola’s board as part

of the now-scrapped tie-up, had

been seen as a validation of

Nikola’s business model and

growth prospects.

For GM, the Badger piece of

the deal had been seen as a

boost for its broader plans to

license its electric-vehicle

technology, the potential of

which has helped lift its share

price in recent weeks. GM was

to engineer and build the light-

duty pickup truck for Nikola,

using its proprietary battery

system that will be used in

Please turn to page A

 Tesla to enter S&P 500 at

full weight this month.......... B

Moderna Inc. said it asked

U.S. and European health regu-

lators Monday to authorize use

of its Covid-19 vaccine, after it

was shown to be 94.1% effec-

tive in a full analysis of a piv-

otal study.

The timing keeps the vaccine

on track to become possibly the

second to go into use in the

U.S. by year-end—after one al-

ready under regulatory review

from Pfizer Inc. and BioNTech

SE—with inoculation available

to the general public likely in

spring or summer. Moderna

said some doses also could be-

come available in Europe in De-

cember.

In the 30,000-person trial,

196 subjects developed

Covid-19 with symptoms after

receiving either the vaccine or

a placebo, Moderna said. Of

those, 185 had taken a placebo,

while only 11 had gotten the

vaccine, indicating it protects

against the disease.

Moderna also said the vac-

cine appeared to be generally

safe, though some subjects de-

veloped headaches and other

mild to moderate reactions.

“I think this vaccine is going

Please turn to page A

plummet this spring.

Exxon said Monday it would

now double its profits by 2027

but released no specific target

for increasing its oil-and-gas

production. Exxon executives

said in recent months that the

company is reassessing its

production targets.

Mr. Woods said in a state-

ment that the company is fo-

Please turn to page A

BYCHRISTOPHERM.MATTHEWS

Exxon Cuts Costs, Assets’ Value

America, and telegraphed a

write-down of between $

billion and $20 billion to come

in the fourth quarter.

The cuts are a course cor-

rection for Chief Executive

Darren Woods, who in 2018

laid out a plan to spend $

billion to double profits and

pump an additional one mil-

lion barrels of oil and gas a

day by the middle of the next

decade. That plan proved ill-

timed, especially after the

pandemic caused oil prices to

pandemic wreaked havoc on

fossil-fuel demand—released a

reduced spending outlook for

the next five years Monday.

Exxon now plans to spend $

billion or less next year and

$20 billion to $25 billion a

year between 2022 and 2025.

It previously planned to spend

more than $30 billion a year

in capital expenditures

through 2025.

Exxon said it would stop in-

vesting in certain natural-gas

assets, primarily in North

Exxon Mobil Corp. is re-

treating from an ambitious

plan to increase spending to

boost its oil-and-gas produc-

tion by 2025 and is preparing

to slash the book value of its

assets by up to $20 billion, as

the struggling company reas-

sesses its next decade.

The Texas oil giant—which

lost more than $2.3 billion

over the first three quarters of

this year after the coronavirus

BYBENFOLDY

ANDMIKECOLIAS

GM Won’t

Take 11%

Of Nikola

In Deal

Franchise Relationship Frays

Under Pressure of Pandemic

Brand owners and the operators of stores are increasingly at odds

LowRatesFuel

Debt Bonanza

Borrowers have issued a

record $9.7 trillion of bonds

and other debt this year.B

 As oil surges, energy firms

weather slump.......................... B

 Panel to consider who will be

first to get vaccine................. A

CONTENTS

Arts in Review... A

Business News...... B

Capital Journal...... A

Crossword.............. A

Heard on Street.. B

Markets................... B

Opinion.............. A17-

Personal Journal A13-

Sports........................ A

Technology.......... B4-

U.S. News..... A2-3,6,

Weather................... A

World News...... A9-

s2020 Dow Jones & Company, Inc.

All Rights Reserved

>

What’s

News

Moderna saidit asked

U.S. and European health

regulators to authorize use

of its Covid-19 vaccine, af-

ter it was shown to be

94.1% effective in a full

analysis of a pivotal study.A

An expert paneladvising

the U.S. is expected to rec-

ommend that front-line

health workers and nursing-

home residents be the first

to get initial limited sup-

plies of Covid-19 shots.A

Coronavirus-related

hospitalizations in the U.S.

hit another record, with

more than 93,000 people

admitted as of Sunday.A

Battleground states

Wisconsin and Arizona

certified election results,

handing narrow victories to

Biden and further cement-

ing his win over Trump.A

Several justicessuggested

the Supreme Court put off

ruling on Trump’s plan to ex-

clude immigrants who are in

the U.S. illegally from popu-

lation figures used to appor-

tion congressional seats.A

China accusedAmerican

officials of harassing Chinese

airline and shipping crews

that arrive in the U.S. in at-

tempts to single out Com-

munist Party members.A

The Iraniannuclear sci-

entist killed last week was

ambushed in a remotely con-

trolled operation, Tehran’s top

security official said. Iran has

blamed Israel for the attack.A

The U.S. and alliesare

pressing for a forensic audit

of Lebanon’s central bank to

uncover possible evidence of

money laundering, corrup-

tion and ties to Hezbollah.A

E

xxon is retreatingfrom

an ambitious plan to in-

crease spending to boost

its oil-and-gas production

by 2025 and is preparing to

slash the book value of its as-

sets by up to $20 billion.A

GM will no longertake an

equity stake in Nikola under

a stripped-down agreement,

a significant retrenchment

from an earlier pact that

fueled investor enthusiasm

for both companies.A

The nation’s systemfor

providing jobless benefits

has consistently produced

inaccurate data and lower-

than-appropriate payouts to

millions of workers amid the

pandemic, the GAOsaid.A

Facebook and Googleface

as many as four new fed-

eral and state antitrust law-

suits after the Justice De-

partment’s antitrust action

against Google in October.A

U.S. stocks slippedMon-

day but closed out November

with hefty gains, with the

Dow and Nasdaq both add-

ing 12% for the month and

the S&P 500 rising 11%.B

S&P Dow Jones Indices

said it would add Tesla’s

full weight to the S&P 500

all at once before the start

of trading on Dec. 21.B

S&P Global’s proposed

$44 billion acquisition of

IHS Markit stands to solid-

ify its position as one of

the world’s largest finan-

cial-data companies.B

Zoom postedanother

quarter of record sales and

again lifted its earnings

outlook, but the growth has

come with higher costs that

disappointed investors.B

Business&Finance

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