A18 EZ RE THE WASHINGTON POST.TUESDAY, MAY 17 , 2022
Economy & BusinessINTERNATIONAL TRADE
U.S. presses solar
firms i n tariff case
The U. S. Commerce
Department is deepening its
probe into whether solar power
companies are circumventing
import tariffs, singling out some
of the industry’s giants for
increased scrutiny.
The agency identified eight
manufacturers, including
industry leaders Longi Green
Energy Technology, Trina Solar
and Jinko Solar, for mandatory
questionnaires to plumb for
more information on whether
they are skirting U. S. tariffs on
China-made solar products by
assembling them in Southeast
Asia.
The probe has already roiled
the U. S. solar industry and
thrown a wrench into
decarbonization plans, with
companies halting projects and
canceling shipments in the face
of potentially hefty extra tariffs.
The world’s largest solar
manufacturers, mostly based in
China, are diverting their focus
and products to the rising
European market amid the U. S.
disruptions.
The eight companies, located
in Cambodia, Malaysia, Thailand
and Vietnam, were asked to
submit information by May 27,
including their ownership
structure and source of materials
for production processes,
according to letters that
Commerce posted on its website.
The department has until Aug.
29 to issue preliminary findings
in the circumvention case, with
the extended deadline for a final
determination in April 2023.
The Commerce probe also
includes units of Canadian Solar,
Hanwha Q CELLS and BYD, as
well as New East Solar Energy
and Boviet Solar Technology.
Longi, the world’s largest solar
company by market
capitalization, is being targeted
through its Vietnamese unit Vina
Solar Technology.
— Bloomberg NewsTELECOMMUNICATIONSVerizon to raise
wireless pricesVerizon Communications will
raise prices on its wireless bills
for the first time in two years as
the largest U. S. wireless carrier
grapples with higher costs.Millions of consumers will see
a $1. 35 increase in
administrative charges for each
voice line starting in their June
phone bill. And business
customers will see a new
“economic adjustment charge”
beginning June 16, with mobile
phone data plans increasing by
$2.20 a month and basic service
plans going up by 98 cents,
according to Verizon
representatives.
New York City-based Verizon
started notifying customers
Monday and has been contacting
some of its larger corporate
clients in recent days to tell them
of the coming increases.
Like many businesses, Verizon
has been weighing options on
how to adjust to inflation
pressure. Rival AT&T earlier this
month raised its rates on older
consumer plans by $6 on single
lines and $12 for families in
order to catch up with rising
costs and higher wages.
Labor Department data last
week signaled that elevated
consumer inflation could persist
for longer than expected.
“We’re all feeling the pressure
and we’ve been in the process of
deciding how much of that
pressure we can share with ourclients,” Tami Erwin, head of
Verizon Business, said.
— Bloomberg NewsALSO IN BUSINESS
Ford Motor , General Motors and
Jeep maker Stellantis arereimplementing a mask mandate
starting Monday at their
facilities in Michigan counties
that the Centers for Disease
Control and Prevention has
labeled as “high” risk for
coronavirus infection. The
Detroit Three automakers withthe United Auto Workers
announced in early March that
they were lifting the requirement
for the face coverings regardless
of vaccination status so long as
the facilities were in areas that
didn’t have a high risk of
transmission.Microsoft plans to “nearly
double” its budget for employee
salaries and boost the range of
stock compensation it gives
some workers by at least 25
percent, an effort to retain staff
and help people cope with
inflation. The move will mainly
affect “early to mid-career
employees,” the software giant
said Monday. In addition to
contending with cost-of-living
increases and a tight Seattle
housing market, Microsoft is
locked in a fierce battle for talent
with companies like Google and
Facebook owner Meta.COMING TODAY
8:30 a.m.: Commerce
Department releases retail sales
data for April.Earnings: Home Depot,
Walmart.— From news servicesDIGESTWANG ZHAO/AGENCE FRANCE-PRESSE/GETTY IMAGES
A delivery person walks past a mall in a business district in Beijing.
China’s retail and factory activity fell sharply in April as the nation’s
“zero-covid” policy kept workers and consumers confined to their
homes a nd disrupted supply chains, according to Reuters.BY LORI ARATANI
AND IAN DUNCANJetBlue Airways on Monday
launched an aggressive campaign
to woo Spirit Airlines sharehold-
ers as part of a second attempt to
merge with the ultra-low-cost
carrier, coming weeks after Spir-
it’s board of directors rejected an
offer it said was unlikely to win
approval from regulators.
The effort includes a website
and 37-slide PowerPoint presen-
tation in which New York-based
JetBlue tries to make a case that
merging with it — and not a deal
in the works with Frontier Air-
lines — is Spirit’s best path for-
ward. JetBlue also accused Spir-
it’s board of directors of refusing
“to meaningfully engage” in
merger talks.
The carrier made an offer in
April and later revised it before
Spirit’s board rejected it earlier
this month. Under the current
proposal, JetBlue is offering $
per share to merge with Spirit,
but it said in a filing it would
work to meet the original $33 per
share “if the Spirit Board decides
to constructively engage with us.”
Analysts say a merger of any of
the two carriers could create an
airline with the scale and routes
to more effectively compete with
the nation’s four largest air carri-
ers. The moves come amid pan-
demic-era shifts in the airline
industry, which saw travel plum-
met two years ago but is now
struggling to meet growing de-
mand as fuel and airfare prices
rise.
While some on Monday char-
acterized JetBlue’s move as a hos-
tile takeover, experts say the ten-
der offer will not move forward
without the approval of Spirit’s
board.
Quinn Curtis, a professor of
law at the University of Virginia,
characterized JetBlue’s latest of-
fer as a “very public negotiating
tactic,” one that it probably hopes
will prompt shareholders to put
pressure on Spirit’s board.
“This is a publicity slash nego-
tiating tactic to really amp up the
pressure on that board and make
it really clear to shareholders
what they’re giving up at a time
when there’s probably a little bit
of vulnerability and the vote is
coming up,” he said.
Spirit declined to comment on
JetBlue’s o ffer, citing prohibitions
under securities laws. The carrier
said its board would carefully
review the offers to determine the
best course of action and advise
Spirit Airlines shareholders of its
formal position within 10 days. In
the meantime, it urged share-
holders to take no action.
In a CNBC interview Monday,
Spirit chief executive Ted Christie
chafed at criticism from Robin
Hayes, JetBlue’s C EO, that Spirit’s
board did not perform its due
diligence.
“I think that’s a bit frustrating
that they’re putting misinforma-
tion in the market, because the
truth is it’s f ar from that,” Christie
said. “We engaged with JetBlue
early on in their process and
spent the better part of a month
in back-and-forth with them. Our
board invested considerable time
and effort in reviewing their pro-
posal and determined it was not
superior.”
Hayes pressed his case in a
letter to Spirit shareholders, say-
ing the airline is offering a better
deal that can win the approval ofR.W. Mann & Co., an aviation
consulting firm. “I think for Jet-
Blue, this is their last opportunity
to accelerate their growth rapidly
with a single action. They either
do this or lose the opportunity to
grow rapidly in a period of time
when they are at some risk of
being bypassed by others.”
JetBlue was the fifth-busiest
carrier before the pandemic, with
43 million passengers in 20 19,
while Spirit ranked eighth, ac-
cording to Tr ansportation De-
partment data. Frontier was the
ninth-largest airline. Frontier
and Spirit combined would
eclipse JetBlue to become the
fifth-largest carrier.
Management teams at Frontier
and Spirit have said they hope to
complete the merger in the sec-
ond half of this year. The deal
would need approval from the
Justice Department at a time
when the Biden administration
has said it would more closely
scrutinize the effects of mergers
on competition, including in the
airline industry, w here four carri-
ers dominate the market.
In the fall, the Justice Depart-
ment sued to block the Northeast
Alliance, an agreement between
JetBlue and American that allows
them to sell each other’s seats on
selected routes in the Northeast.
Spirit’s board also cited that ar-
rangement — approved in the
waning days of the Tr ump admin-
istration — in rejecting the over-
ture from JetBlue.
Industry analysts have said a
Spirit-Frontier merger it is not
likely to prompt significant regu-
latory concerns. Spirit said in a
memo to employees Monday that
the federal review was underway
and proceeding as expected.JetBlue launches another bid for Spirit Airlines mergerNew York-based company makes new pitch to convince competitors’ shareholders that it is a more attractive partner then Frontier○
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$1= 129.09 Y EN, 0.96 EUROSregulators. He said JetBlue ex-
pects a merger would receive
regulatory clearances in a time
frame similar to that of a Spirit-
Frontier merger.
“JetBlue offers more value — a
significant premium in cash —
more certainty, a nd more benefits
for all stakeholders,” Hayes
wrote. “Frontier offers less value,
more risk, no divestiture commit-
ments, and no reverse break up
fee, despite more overlap on non-
stop routes and their own regula-
tory challenges.”
As part of its earlier offer,JetBlue said it would pay Spirit
$200 million if the deal failed to
win regulatory approval.
Even so, Mac Gardner, chair-
man of Spirit’s board, wrote that
the prospect of rejection by feder-
al authorities, in part because of
ongoing concerns centered on an
alliance between JetBlue and
American Airlines, made the of-
fer too risky.
Aviation analyst Henry Harte-
veldt of Atmosphere Research
Group said JetBlue probably sees
several key benefits to a merger
with Spirit. The pairing wouldenable JetBlue to modernize and
expand its fleet while also provid-
ing a foothold in key markets
where it does not have a strong
presence, including Chicago, Dal-
las-Fort Worth and Houston.
At a time when airlines are
scrambling to hire pilots, flight
attendants and other employees,
it would give access to the person-
nel needed to manage growth. A
merger also could prevent Jet-
Blue from becoming a takeover
target itself, analysts said.
“It speaks of the desperation to
a degree,” said Robert W. Mann ofJOE RAEDLE/GETTY IMAGES
JetBlue travelers at Fort Lauderdale-Hollywood International Airport on Monday. The board of Spirit
Airlines, which is working on a merger deal with Frontier Airlines, rejected an earlier JetBlue offer.ing that this tweet comes after
the President met with labor
organizers, including Amazon
employees.”
Bezos responded to that retort
on Monday by claiming the ad-
ministration was trying to
change the subject from its infla-
tionary record. “Look, a squirrel!”
Bezos said, mocking the White
House statement. “They know
inflation hurts the neediest the
most. But unions aren’t causing
inflation and neither are wealthy
people.”
He added: “Remember the Ad-
ministration tried... their best
to add another $3.5 TRILLION to
federal spending. They f ailed, but
if they had succeeded, inflation
would be even higher than it is
today.”
The debate came up at the
White House press briefing on
Monday afternoon, when a re-
porter asked the Twitter back-
and-forth between Bezos and
Biden. “Look, it’s not a huge
mystery why one of the wealthi-
est individuals on Earth opposes
an economic agenda that is for
the middle class, that cuts some
of the biggest costs families face,
fights inflation for the long haul,
right?” said press secretary Kar-
ine Jean-Pierre.Some prominent economists
criticized Bezos’s statement as
misconstruing Biden’s economic
agenda. The White House always
maintained that its $3.5 trillion
in proposed spending as part of
the Build Back Better plan would
be fully paid for by higher taxes
on the rich and corporations,
thus offsetting its impact on fuel-
ing additional inflation. The ad-
ministration’s spending plans
were also designed to be
stretched over 10 years, with only
a fraction of it taking effect im-
mediately — which should, in
theory, blunt its inflationary ef-
fects.
Larry Summers, the former
treasury secretary who has been
critical of the White House’s eco-
nomic record, said Bezos was
wrong to suggest higher taxes
would not reduce the inflation-
ary impact of Biden’s spending
plans.
“I think @JeffBezos is mostly
wrong in his recent attack on the
@JoeBiden Admin,” Summers
tweeted. “It is perfectly reason-
able to believe, as I do and
@POTUS asserts, that we should
raise taxes to reduce demand to
contain inflation and that the
increases should be as progres-
sive as possible.”BY JEFF STEINThe White House is sparring
with Jeff Bezos after the Amazon
founder took aim at President
Biden’s economic policies on
Twitter.
Bezos, one of the wealthiest
men in the world, criticized the
White House’s economic record
by pointing to high inflation on
Friday, tweaking Biden by sug-
gesting the administration’s new
social media disinformation
board should review the presi-
dent’s claim that raising corpo-
rate taxes would bring inflation
rates down. On Sunday, he kept it
up, sharing a post that criticized
Biden’s claims to have reduced
the federal deficit. Bezos alleged
that the administration tried to
approve even more economic
stimulus but was stopped by Sen.
Joe Manchin III (D-W.Va.) — an
apparent reference to the White
House’s long-stalled Build Back
Better economic agenda. Those
plans, though, were designed as
long-term structural changes to
the U. S. economy, not as eco-
nomic stimulus.
“In fact, the administration
tried hard to inject even more
stimulus into an already over-
heated, inflationary economy
and only Manchin saved them
from themselves,” said Bezos,
who is the owner of The Washing-
ton Post. “Inflation is a regressive
tax that most hurts the least
affluent. Misdirection doesn’t
help the country.”
The White House responded
by pointing out that Bezos’s at-
tacks emerged days after Biden
met in the Oval Office with the
labor leaders behind Amazon’s
unionization drive, which the
company has vehemently op-
posed. White House spokesman
Andrew Bates also emphasizedOn Twitter, Bezos spars
with White House over
economic policy record
that Bezos would pay substantial-
ly higher tax burdens under the
plans the administration has in-
troduced. Bezos would pay an
additional $35 billion under a
billionaire tax plan introduced by
the White House in March, ac-
cording to calculations by Gabri-
el Zucman, an economist at the
University of California at Berke-
ley.
“It doesn’t require a huge leapto figure out why one of the
wealthiest individuals on Earth
opposes an economic agenda for
the middle c lass t hat cuts some of
the biggest costs families face,
fights inflation for the long haul,
and adds to the historic deficit
reduction the President is achiev-
ing by asking the richest taxpay-
ers and corporations to pay their
fair share,” Bates told The Post in
a statement. “It’s also unsurpris-JONATHAN NEWTON/THE WASHINGTON POST
Over the past week, Amazon founder Jeff Bezos has criticized
President Biden’s economic policies and claims about the deficit.