The Washington Post - USA (2022-05-27)

FRIDAY, MAY 27 , 2022. THE WASHINGTON POST EZ RE A21

Economy & Business

ENERGY

U.S. to auction wind

turbine sites off Calif.

The Biden administration on
Thursday proposed auctioning
five areas off the coast of
California for offshore wind
development, a critical
milestone in expanding the
nascent U.S. industry to Pacific
waters.
It is the latest in a government
effort to put wind turbines along
every U.S. coastline, with a goal
of generating 30 gigawatts of
power by 2030. President Biden
has said the new industry will
create jobs and combat climate
change.
The announcement comes on
the heels of two successful
auctions this year in Atlantic

waters that, combined, generated more than $4.6 billion in high bids. Thus far, U.S. offshore wind development has mainly been in the Northeast and has been dominated by European energy companies. The sale notice includes three lease areas off central California near Morro Bay and two areas off the northern coast near Humboldt County. The areas were first identified by the Department of the Interior a year ago. The areas total about 373,000 acres that could one day generate more than 4.5 gigawatts of energy and power 1.5 million homes, the Interior Department said in a statement. The projects will help California, which has among the most aggressive climate change

policies in the nation, achieve its goal of removing fossil fuels from its power grid by 2045. — Reuters

S.C. tries to slow Duke coal plant closures

Duke Energy is set for a showdown with regulators on Tuesday on its case for accelerating closures of its last six coal-fired power plants in the Carolinas — a plan already rejected by South Carolina’s utilities regulator. The regulator’s May 31 meeting will also weigh appeals from a coalition of environmental groups that urge the Public Service Commission of South Carolina to reconsider its December decision

ordering Duke Energy to keep the coal plants open until 2039 — almost a decade longer than a preferred plan from the utility. The conflict threatens Duke Energy’s favored path to speed up closures of the coal-fired plants by 2030 and boost its carbon-cutting goals. South Carolina regulators haven’t explained why they want the plants to operate longer. Commissioners can’t answer questions about matters before them, a representative said. A possible explanation for the decision is cost: Duke’s preferred plan is projected to cost about $83 billion while an alternate plan chosen by South Carolina’s commission would cost about $79 billion. Duke’s favored path also includes building onshore wind and adding about 50

percent more solar energy by 2035. — Bloomberg News

ALSO IN BUSINESS Authorities announced the indictment of 41 people in an alleged luxury goods theft ring in New York City that disguised the stealing as isolated “smash and grab” incidents. New York Attorney General Letitia James (D) and New York Mayor Eric Adams (D) revealed the scheme at a news conference on Thursday. They described a “massive retail theft operation” in which a team of “boosters” fanned out to lift merchandise from Macy’s, Bloomingdale’s and other stores that was then resold on eBay by the ringleader. The indictment includes charges of

criminal possession of stolen property and money laundering.

British Prime Minister Boris Johnson’s government will impose a windfall tax on the profits of oil and gas companies to help fund support for Britons facing a cost-of-living crisis. The 25 percent levy on energy firms will raise about $6.3 billion which will finance one-off grants to more than 8 million of the poorest households in the U.K., Chancellor of the Exchequer Rishi Sunak said in the House of Commons on Thursday.

COMING TODAY 8:30 a.m.: Commerce Department releases personal income and spending for April.

— From news services

DIGEST

BY IAN DUNCAN AND SPENCER S. HSU

One of the nation’s largest bus
manufacturers has agreed to hire
and promote more women and
racial minorities, a deal that
worker advocates say is a model
for ensuring that federal funds to
replace diesel buses with battery-
powered buses boosts workers in
struggling communities.
The deal, announced Thursday
at events in California and Ala-
bama, is in response to a lawsuit
over a $500 million contract New
Flyer won in 2013 to supply buses
to the LA Metro transit agency.
But its effects will ripple through
the country to communities
where the company has plants
and potentially to other cities and
states, where it could serve as a
template for public-sector infra-
structure contracting, labor offi-
cials say.
That includes Anniston, Ala., a
majority-Black city with a history
of racism, where a White mob
once bombed a bus carrying civil
rights activists and where New
Flyer manufactures buses.
New Flyer struck the deal with
worker advocacy organization
Jobs to Move America. It comes as
transit agencies are set to receive
billions from last year’s $1.2 tril-
lion infrastructure package to
transition fleets to battery power
and as the Biden administration
is seeking to ensure that racial
equity is a priority as money is
spent.
“This is a hands-on, full-blown
partnership between a company
and a set of community groups
and the workers themselves to
achieve this kind of opportunity
and equity that everybody’s talk-
ing about,” said Madeline Janis,
Jobs to Move America’s executive
director. “This gets in there and
creates a holistic plan to achieve
racial justice and gender justice in
green manufacturing.”
Janice Harper, New Flyer’s ex-
ecutive vice president of people
and culture, said the company
shares advocates’ goals of “want-
ing to provide equal opportunity
for people and communities to
thrive — and more so — to contin-
ue investing in workforce devel-
opment that fosters scalable
adoption of clean transportation
across America, in an industry
where every person can partici-
pate meaningfully.”
The roots of Thursday’s deal
stretch almost a decade. In 2013,
LA Metro awarded $500 million

santo plant for decades that was secretly poisoning the ground, water and air as it manufactured chemicals known as PCBs. Erica Iheme, Jobs to Move America’s Birmingham, Ala.-based deputy director, said Anniston residents feel they were never properly compensated for the contamination and have continued to feel the “sting of economic lack.” She said the deal with New Flyer is a chance to build a partnership between the community and a relatively new employ- er to the area. “New Flyer coming in with the higher wages is really important,” Iheme said. “That’s why the community really wanted to focus in on New Flyer because we saw New Flyer as a partner.” Labor strategists called the lawsuit one of the first to enforce pro-worker incentives that state and local governments have in- creasingly incorporated into public contracts. Deputy U.S. Labor Secretary Julie Su joined the announcement Thursday, saying her department is encouraging those approaches as the federal government imple- ments the infrastructure law. “For too long we’ve accepted that an economy where some people get good jobs and others don’t is just the natural way of things,” she said. “We can do better than that.” In the Anniston area, the un- employment rate and number of unemployed residents are hover- ing at decade lows. In the Ontario metropolitan area in California’s sprawling Inland Empire, manufacturing employment has re- couped about 96 percent of pre- pandemic jobs but is still 20 percent off its turn-of-the-century peak. Racial and gender disparities among workers have persisted during the pandemic-era re- bound, with job gains among women and minorities trailing those of men and White employ- ees, economic data shows. Timothy J. Bartik, an econo- mist who has studied labor de- mand and development policy at the Upjohn Institute in Michigan, said raising the minimum wage and expanding unionization could achieve greater and more inclusive wage growth on a na- tional scale, but using tax dollars and individual public-sector contracts to advance such goals as a “retail strategy” could be achiev- able more quickly.

Labor leaders hail bus maker’s pact on diversity in hiring

New Flyer to bring in more women, minority workers in what backers say is a green-jobs model

to the U.S. subsidiary of New Flyer Industries of Canada for an order of up to 900 buses fueled by compressed natural gas. To win the contract — one of several the bus maker holds with major U.S. transit systems, including those in Washington, New York, Atlanta and San Fran- cisco — New Flyer said it would create more than 50 full-time po- sitions that paid $11 to nearly $50 an hour. A four-year legal battle ensued over whether the company lived up to its promises. When the man- ufacturer sued to prevent the release of public records, a court fight was waged by Jobs to Move America, whose board includes the leaders of major U.S. unions, including the AFL-CIO and those representing auto, steel, electri- cal, transit and transportation workers. In October 2017, Los Angeles County Superior Court Judge Mary Strobel ordered the release of New Flyer job creation and

salary data, saying the public interest in determining compliance with government contracting terms outweighed the company’s privacy interest. Based on pay stubs and corporate reports it uncovered, Jobs to Move America then filed a whistleblower lawsuit under California’s False Claims Act, alleging New Flyer did not pay wages it said it would and misstated the value of benefits it was providing. The company disputed the alle- gations. The case was set to go to trial before a Los Angeles judge this week. In the settlement signed Tuesday, New Flyer — without admitting wrongdoing — entered what both sides called a win-win, multistate agreement spanning the company’s factories in Anniston and Ontario, Calif. Los Angeles County Supervisor Hilda Solis, the chair of Metro’s board, said the settlement was a reflection of the agency’s “com- mitment to creating good jobs for people who need them the most.”

Advocates said the agreement made the case that when taxpay- ers foot the bill for buses, trains and light rail, they can also de- mand the creation of good jobs. “This case is an important marker for labor and manufacturing companies across the country. It shows it isn’t a zero-sum game,” said Rachel Jensen, co-lead trial counsel for the plaintiffs and a partner with Robbins Geller Rud- man & Dowd. “When we invest in quality jobs, fairness and dignity, everyone wins big.” In a community benefits agreement also signed Tuesday, New Flyer committed to creating new workforce programs and to boost- ing its hiring and promotion of people from disadvantaged groups, saying that at least 45 percent of new hires and 20 percent of promotions would be given to women, minorities and U.S. mili- tary veterans. The deal includes enhanced company reporting to LA Metro about employment programs associated with its con-

tracts for five years. The company agreed to allow a designated community organization to assist workers with any claims of harassment or discrimi- nation and to pay $7 million to a settlement fund to cover Jobs To Move America’s legal costs, with the rest to be divided among the plaintiffs and government. Proterra and BYD, two other electric-bus manufacturers, have similar community agreements tied to their operations in Califor- nia. The New Flyer deal stretches beyond the state to Anniston, where the company acquired a plant in 2013. Janis said the workforce is about a third Black, with few women, and that disparities grow along with the level of skill and supervisory responsibility workers hold. Hiring goals are backed by apprenticeship programs designed to guarantee workers from disadvantaged groups have access to better jobs. Anniston was home to a Mon-

DAMIAN DOVARGANES/ASSOCIATED PRESS A bus driver in Los Angeles last year. Advocates say a new deal shows how federal funds for battery-powered buses can boost workers.

○

DOW 32,637.19 516.91, 1.6% ○

NASDAQ 11,740.65 305.91, 2.7% ○

S&P 500 4,057.84 79.11, 2.0% ○

GOLD $1,853.90 $1.40, 0.1% ○

CRUDE OIL $114.09 $3.76, 3.4% ○

10-YEAR TREASURY YIELD 2.73% UP/DOWN 0.4%

CURRENCIES $1 = 127.05 Y EN, 0.93 EUROS

BY AARON GREGG AND HAMZA SHABAN

Wall Street posted healthy
gains Thursday as technology and
retail stocks bounced b ack, power-
ing the beaten-down Nasdaq in-
dex up 2.7 percent and putting
more distance between the S&P
500 and a bear market.
The Dow Jones industrial aver-
age surged 516.91 points, or about
1.6 percent, to close at 32,637.19
and chalk up its fifth consecutive
day of gains. The broader S&P 500
index climbed 79.11 points, or
2 percent, to settle at 4,057.84. The
tech-heavy Nasdaq surged 305.91
points to end at 11,740.65.
Investors have been struggling
to shake off the gloomy economic
markers — soaring inflation, ris-
ing interest rates, the war in
Ukraine, the pandemic — that
have largely defined 2022. The

S&P 500 briefly tipped into bear market territory, defined as a 20 percent fall from the most re- cent high, in intraday trading last week. As of Wednesday, its 100th trading day of the year, it can now claim the worst start to any year since 1970, according to an analysis by LPL Financial. But with Thursday’s perform- ance, the broad index has cut its year-to-day losses to 16.5 percent. The rally could signal the start of a more meaningful recovery, said Ryan Detrick, LPL Financial chief market strategist. “The good news is previous bad

starts have seen some nice rubber- band snap backs, and 2022 could be in line to do it once again,” he said. The stock market gains w ere led by tech stocks and a handful of retailers. Amazon jumped 4 percent while Facebook’s parent, Meta Platforms, added 4.2 percent. Macy’s soared 19.4 percent after the department store chain released better-than-expected rev- enue and earnings in the fiscal first quarter and raised its profit outlook for 2022. Williams-Sonoma and Dollar Tree also posted double-digit gains. Last week, market volatility that had been closely aligned with the tech giants shifted to retailers after major players like Walmart and Target warned that rising fuel and compensation costs were eating into profit.

While investors have cause for celebration this week, the economic environment still stands in sharp contrast with the heady weeks and months of last year, when stock prices shattered record after record, even as the dis- ruptions of the pandemic continued to weigh on l ife. Economic data released Thurs- day by the Bureau of Economic Analysis showed that the U.S. economy contracted by 1.5 percent in the first quarter, a slightly larger drop than previously estimated. Energy prices also climbed, re- flecting the continued global im- pact of the war in Ukraine. West Texas Intermediate crude, the U.S. benchmark, rose 3.4 percent to more than $114 per barrel. Brent crude, the global benchmark, jumped 3.6 percent to well over $117. Meanwhile, fuel prices con- tinue to break records: The U.S.

average hit $4.60 a gallon on Thursday, according to AAA. Meanwhile, investors are wor- ried about rising interest rates. The Federal Reserve has raised its benchmark interest rate twice this year and is expected to do so five more times to ease inflationary pressures. Fed officials have been attempting to pace increases so as not to smother economic growth, a difficult balance to strike. If the economy cools too quickly, it could fall into a recession, generally defined as two consecutive quarters of negative economic growth. Meanwhile, central bankers have also cautioned that geopoliti- cal events and lingering supply chain constraints are beyond the control of its monetary toolbox. Thursday’s comeback on Wall Street arrives as investors have watched their portfolios slide all year, eating into their 401(k) re-

tirement accounts. After enjoying the bounty of record profits, fueled by unprecedented government stimulus to save the economy from the worst shocks of the coronavirus pandemic, many shareholders have since fled the market or are bracing for even steeper losses. European indexes climbed after new fiscal stimulus measures were unveiled in the United King- dom. The benchmark Stoxx 600 index closed up 0.8 percent, the FTSE 100 added 0.6 percent in Britain. The German DAX popped 1.6 percent, and France’s CAC jumped 1.8 percent. Asian markets closed mixed Thursday, with the Hang Seng In- dex dipping 0.3 percent in Hong Kong, the Shanghai Composite index adding 0.5 percent and the Nikkei dipping 0.3 percent in Ja- pan.

Dow surges 516 points as markets attempt to climb back from a l ong rout

Tech, retail stocks lift Wall Street in worst start to any year since 1970

The Washington Post - USA (2022-05-27)

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