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  • Burgers and tacos don’t look like they do in ads. Lawsuits are trying to change that | CNN Business

    Burgers and tacos don’t look like they do in ads. Lawsuits are trying to change that | CNN Business


    New York
    CNN
     — 

    When it comes to food advertising, what you see is rarely what you get. A flurry of recent lawsuits wants to change that.

    Over the past few years, lawyers have been bringing class action suits against fast food companies, alleging that they’re misrepresenting food in their marketing.

    Lawyers James Kelly and Anthony Russo, in particular, have been leading the charge, bringing cases against Taco Bell, Wendy’s, McDonald’s, Burger King and Arby’s. These companies use ads that don’t match up with their actual food, the suits allege.

    As evidence, the complaints feature images of food marketing alongside shots of their real-life counterparts. In the ads, burgers look tall, heaped with meat and cheese, topped with golden, rounded buns. But in the photos of burgers bought from a real fast food location, they’re flat, with meat and cheese barely peeking out of limp, white buns. Tacos are no different: In Taco Bell’s ads, Crunchwraps look hearty and plump. In photos in the lawsuit, they look flat and nearly empty. The suits are ongoing.

    “We saw a record number of food litigation lawsuits filed from 2020 to 2023, with hundreds of new suits every year,” said Tommy Tobin, a lawyer at Perkins Coie and Lecturer at UCLA Law, adding that “food litigation is a fast-growing area of law.”

    The explosion has been largely driven by the efforts of a handful of lawyers, including Russo and Kelly, said Bonnie Patten, executive director of Truth in Advertising, a nonprofit organization that focuses on protecting consumers from false advertising.

    Their cases focus on quantity, she said, essentially arguing that food in ads appears more bountiful than what customers actually get. Other lawyers, like Spencer Sheehan, focus on how food is described. Sheehan, a New York lawyer, has filed hundreds of class action suits focusing on misleading words on packaged foods — like use of the word “vanilla” on foods made with little or no actual vanilla.

    Major chains have also been targeted for how they describe food. Last year a class action suit was brought against Starbucks claiming that the chain is misleading buyers of its “Refreshers” beverages by naming them for ingredients they don’t have. The complaint states that, for example, “the Mango Dragonfruit and Mango Dragonfruit Lemonade Refreshers contain no mango,” and that in fact “all of the products are predominantly made with water, grape juice concentrate, and sugar.” Starbucks argued, among other things, that the fruits mentioned indicate a flavor rather than an ingredient.

    “The allegations in the complaint are inaccurate and without merit,” a Starbucks spokesperson said in a statement, adding, “we look forward to defending ourselves against these claims.”

    For a judge or jury to side with the plaintiffs in false advertising claims, lawyers have to successfully make the case that the ads would trick a “reasonable consumer,” Tobin, explained.

    “Under this standard, a court asks whether a reasonable consumer would be misled by the product’s marketing or labeling,” he said.

    The courts will have to draw the line between false advertising and just, well, advertising — which might be trickier than it sounds.

    Burger King, in a bid to dismiss the lawsuit against it, argued that its ads are fair.

    “Reasonable consumers viewing food advertising know” that food in ads “has been styled to make it look as appetizing as possible,” Burger King argued in a recent filing. That “innate” knowledge, plus the fact that a Whopper patty is always made with a quarter pound of beef, as promised, means that the ads are fine, according to Burger King.

    “The plaintiffs’ claims are false,” a Burger King spokesperson said in a statement about the lawsuit. “The flame-grilled beef patties portrayed in our advertising are the same patties used in the millions of Whopper sandwiches we serve to guests nationwide.” Arby’s, McDonald’s, and Taco Bell did not respond to requests for comment. Wendy’s declined to comment, citing the ongoing litigation.

    Lawsuits claim that burgers from McDonald's, Burger King and Wendy's don't look as they appear in ads.

    For Russo, that argument doesn’t cut it. He’s more concerned with what he calls the “common-sense eyeball test.” The fast food chains targeted in his suit, he said, are failing.

    “If you look at what their advertisements are showing, and you look at what on a regular basis, every consumer is getting … [there’s] a glaring disparity,” he said. “You could talk about weight … you could talk about volume, those are all the things the experts get into,” he said. But if the image is drastically different from the product, he argues, those details don’t matter.

    In the Burger King case, a judge recently agreed to punt the question of what is “reasonable” to a jury, refusing to dismiss the case in full as Burger King requested.

    Starbucks will also have to face many of the claims brought against it in the class action. “Plaintiffs have adequately alleged that a significant portion of the general consuming public could be misled by the names of the at-issue beverages,” a recent order states.

    For Patten, a reasonable consumer is an “average consumer.” The legal system, she said, often expect more from a reasonable consumer than she would from an average one.

    “Trial courts tend to have a very high opinion of who the reasonable consumer is,” she said. “And I think as a result of that, will dismiss a lot of these types of class actions, taking the position that the reasonable consumer of course knows that this type of advertising exaggerates the quality and quantity of food.”

    But Patten has heard from many complaining about this specific discrepancy, between how much food they expect due to advertising, and how much food they actually get.

    “We get it for burgers, we’ve gotten it for buckets of chicken, all sorts of different kinds of fast food,” she said.

    When it comes to allegations of false advertising, there are more egregious questions than whether a taco on the screen matches a taco in the hand. And Patten’s not convinced that class actions are the way to go — if they’re not dismissed, they often get settled, offering the defendant certain protections and giving consumers a small sum of cash, while their lawyers walk away with a larger bundle.

    But with people watching their budgets, it’s worth examining whether customers are getting as much food as they expect from major fast food chains.

    When people are “using their limited resources to purchase this, and then they’re not being provided with the quantity of food they’re expecting — that is an issue, no doubt.”

    The suits, and the attention they’ve received, can help inform the public of what to really expect, Patten said.

    They “can help educate consumers and make more savvy purchasers of their dinners,” she said. “The best defense against deceptive marketing is an educated consumer.”

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  • Want to live in London or New York? Good luck if you’re renting | CNN Business

    Want to live in London or New York? Good luck if you’re renting | CNN Business


    London
    CNN
     — 

    In May, Viveca Chow hurriedly transferred $3,700 over her phone while standing in the lobby of a building in Queens, New York. She made the upfront payment to secure an apartment minutes after seeing it.

    It was a moment the 28-year-old lifestyle influencer — forced to leave her previous accommodation after the landlord increased her monthly rent by $1,000 — described to CNN as “dystopian.”

    Yet it is something that Chow, along with millions of renters in big cities, has come to expect as part of the fight for affordable housing. Her realtor urged her to pay the holding deposit on the spot to secure the one-bedroom unit.

    In many urban centers, an influx of workers and students after the pandemic has collided with a lack of accommodation for rent, high levels of inflation, and rising interest rates that are trapping some people in the rental market when they would otherwise be buying a home.

    Average rents in New York and Sydney grew by an inflation-busting 4.7% and 6.9% respectively in the year to August, according to real estate firm Knight Frank. While growth in rental costs in both cities has slowed compared with its pandemic peaks, average rents are still at all-time highs.

    In other places, rents are rising even faster. In London, the average annual rise in the cost of a rental property exceeded 17% in April and again last month, the biggest jumps since real estate agency Hamptons started collecting the data in 2014.

    That runaway growth far exceeds both inflation and pay raises in the United Kingdom.

    Many are struggling to meet the costs.

    According to property website Realtor.com, affordability in the New York metropolitan area deteriorated the most out of the 50 largest US metro areas in the year to July. The share of median household income in the New York area eaten up by the median rent rose from 35% to 37% in that time.

    Based on one approach, housing costs are judged affordable if they account for no more than 30% of the typical household income, Realtor.com said. This is also the benchmark used by the UK Office for National Statistics when assessing private rents.

    In London, the destination for many UK college students looking for work after graduating, renting has become “entirely unaffordable” for that cohort, said SpareRoom, the UK’s biggest room search site, in a recent analysis.

    The platform used the ONS’s measure of affordability in its study and the average graduate starting salary of £29,000 ($36,000) a year. According to SpareRoom’s latest Quarterly Rental Index, average monthly room rent reached £971 ($1,190) in the second quarter, up by almost a fifth compared with the same period in 2022.

    Barnaby Scudds is feeling the pain. The public relations executive moved to London in March after graduating last year and now pays £975 ($1,195) a month to rent a room, which gobbles up more than half of his monthly paycheck.

    “I’m paid well for the work that I do, and yet it’s still difficult,” he told CNN.

    Even at those prices, rooms get snapped up fast.

    “It is very difficult because properties come on at about six o’clock in the morning generally, and they are normally gone by six o’clock in the evening,” he said.

    A property for rent in London, seen in August.

    Matt Hutchinson, communications director at SpareRoom, told CNN that the UK’s chronic lack of supply of rental properties was to blame.

    Beyond problems afflicting most global cities, such as a proliferation of short-term rentals offered through platforms like Airbnb, the shortage of places for long-term rent in London is exacerbated by local factors.

    Since 2016, the UK government has increased taxes on purchases of second homes and cut the amount of tax landlords can claim back. Put simply, being a landlord in the UK isn’t as lucrative as it used to be.

    “[It] is a much more tight-margin experience than it was six, seven years ago. And a lot of people are just selling up and leaving the market,” Hutchinson said, adding that rising interest rates, as well as higher costs for labor and materials, had discouraged many from investing in rental properties.

    In a recent note about rental markets in 10 cities worldwide, Liam Bailey, global head of research at Knight Frank, concluded: “Affordability of housing is set to become the leading political issue within the next 12 months.”

    London’s mayor, Sadiq Khan, last month reiterated his call for rent control, urging the UK government to impose a two-year rent freeze for the capital’s 2.7 million private tenants. It is a version of a policy proposed by politicians and campaigners over the years as a way out of the affordability crisis.

    But rental caps, while instinctively appealing, are generally “a bad idea,” Nikodem Szumilo, director of the Bartlett Real Estate Institute at University College London, told CNN.

    “It benefits people who live in the rent control unit and maybe the politicians who impose the policy, but nobody else,” Szumilo said, noting that rental caps discouraged home builders from investing in new units, which in turn limited supply growth in places where demand might be rising.

    A better way, Szumilo argues, is to simply make it easier to build more homes. Tokyo, the world’s most populous city, housing more than 37 million people, has a “very deregulated market” where rents are “relatively stable,” he said.

    Lifestyle influencer Viveca Chow feels lucky to have found a rent-stabilized apartment in New York City.

    Policies that help people become homeowners — for example, offering subsidies on down payments or on mortgages for first-time buyers, as the UK government has done — are also effective, Szumilo said, because they help ease demand in the rental market.

    Still, Chow in New York is grateful for rent control.

    She and her partner live in one of the city’s coveted rent-stabilized units, which means the $3,700 they pay each month can’t increase by more than 3.75% if they renew the lease for another year. That’s below the 4.7% annual increase in rental costs in the city recorded by Knight Frank at the start of August.

    That “doesn’t necessarily mean it’s cheap,” Chow said, but the cap provides a welcome safety net after the instabilities — and indignities — of her last place.

    “We didn’t even have a kitchen, a proper kitchen. It was like a kitchen nailed to the wall. So I was like, you’re not raising $1,000 on me!”

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  • China relaxes capital controls to entice badly needed foreign investment | CNN Business

    China relaxes capital controls to entice badly needed foreign investment | CNN Business

    Editor’s Note: Sign up for CNN’s Meanwhile in China newsletter which explores what you need to know about the country’s rise and how it impacts the world.


    Hong Kong
    CNN
     — 

    China is allowing foreigners in Shanghai and Beijing to move their money freely into and out of the country, in a significant move toward relaxing its strict capital controls as it tries to woo overseas investors.

    The news was announced just weeks after official data showed foreign direct investment (FDI) in the country had hit a record quarterly low amid a slump in business confidence.

    Foreign investors — either individuals or companies — at the Shanghai pilot free trade zone, where tens of thousands of firms are located, can remit their funds without any restriction or delay, according to a statement from the city government posted Thursday.

    The funds need be “real and [legally] compliant” and related to their investments in China, it said. The rules, which do not apply to mainland Chinese nationals, took effect on September 1.

    Shanghai’s free trade zone is one of China’s largest and is slightly bigger than the city of Seattle.

    It’s home to Tesla’s Gigafactory as well as the country headquarters of hundreds of multinationals, including HP, AstraZeneca and BlackRock.

    On the same day, the Beijing city government proposed similar regulations, pledging to facilitate cross-border fund flows for foreign businesses. It’s seeking public feedback on the proposal.

    The policies are aimed at attracting foreign investment to build an open economy, the government said.

    China maintains a “closed” capital account, which means companies and individuals can’t move money in or out of the country except in accordance with strict rules.

    The Chinese currency has weakened more than 6% against the US dollar since the start of April, as economic growth lost momentum and its central bank eased monetary policy more aggressively than its Western peers. A weak currency could further reduce a country’s investment appeal and accelerate the outflow of capital.

    Thursday’s measures are the latest effort by Chinese leader Xi Jinping’s government to woo foreign capital and stabilize ties with the West.

    A gauge of FDI in China plunged in the second quarter, hitting its lowest level since 1998, when records began, according to data published by the State Administration of Foreign Exchange last month.

    Separate statistics published by the commerce ministry Sunday showed that its measure of FDI dropped more than 5% during the first eight months of 2023, compared with a year earlier.

    Business confidence among American firms in China appears to have plummeted.

    On Tuesday, a survey by the American Chamber of Commerce in Shanghai showed that only 52% of respondents were optimistic about their five-year business outlook, the lowest level since the survey began in 1999. That compares with 55% in 2022 and 78% in 2021.

    Foreign companies and investors have grown wary of rising risks in the world’s second largest economy, including a slowdown marked by weak domestic demand and a housing crisis, Beijing’s desire to prioritize national security over economic growth and deteriorating relations between China and many Western countries.

    China has made a series of moves recently to stabilize foreign trade and investment, including cutting a tax on stock trading for the first time since 2008.

    On Monday, the People’s Bank of China met with a number of top Western companies, including JP Morgan, Tesla and HSBC, pledging to further open up the financial industry and “optimize” the operating environment for overseas companies.

    The latest relaxation in capital controls is part of a policy package announced by Beijing and Shanghai, the country’s two biggest cities, to facilitate foreign trade and investment.

    Expatriates working at foreign enterprises in the Shanghai free trade zone — including employees from Hong Kong, Macao and Taiwan — can transfer their income abroad without restriction, according to the rules.

    Beijing’s policy contains similar measures. It also promised to make it easier for foreign companies to transfer data overseas with “fast-track” channels and encouraged them to invest in the city’s high-end manufacturing, services and green industries.

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  • Entertainment strikes pushing toward $6 billion in losses: ‘It just gets worse each day’ | CNN

    Entertainment strikes pushing toward $6 billion in losses: ‘It just gets worse each day’ | CNN



    CNN
     — 

    As studios and writers return to the bargaining table Wednesday, the economic impact of the months-long writers’ and actors’ strikes has surpassed a staggering $5 billion, and the pain is increasingly being felt across multiple industries, according to economists.

    In New York alone, the disruption of 11 major productions, which applied for the state’s tax credit program, has resulted in a loss of $1.3 billion and 17,000 hires in the state, according to Empire State Development.

    Across the U.S., “we are definitely moving towards $6 billion in costs, but I cannot say for certain we are there yet,” says Kevin Klowden, the Milken Institute’s chief global strategist. Klowden says major impacts are coming from a rise in evictions, which is also tied to the end of eviction moratoriums in California. Klowden said he’s also observing a lot of staffing cuts in restaurants and service firms, as well as expenditure cutbacks at studios.

    Todd Holmes, an associate professor of entertainment media management at Cal State Northridge, points to the U.S. Bureau of Labor and Statistics (BLS), which recorded a drop of 34,800 employees in the motion picture and sound recording industries between May and August.

    “There’s no doubt that a lot of that is due to the strikes,” Holmes says, adding that there could be more strike-related losses recorded in other BLS categories, including those in makeup, catering, custodial work, and other businesses that support productions. “It’s been a real mess, and it just gets worse each day as the strikes continue,” he added.

    Many job losses are from entertainment industry adjacent businesses like History for Hire, a prop shop whose owner, Pam Elyea, feels the ripple effect on those that rely on the entertainment industry.

    Elyea’s company works to dress the sets of movies, TV shows, commercials and music videos, renting out everything from sports equipment to battle gear for period pieces.

    Before the strike, she says her 33-thousand square foot warehouse was “extremely hectic” with phones ringing and a staff of 15 to 20 moving orders of props in and out.

    Now, she’s had to cut half her staff because demand is drying up. The remaining staff members switched to a California workshare program this week, where they work reduced hours, receive partial unemployment benefits, while maintaining health insurance.

    “I would have people in and out here, I would have swing guys come and pull orders,” Elyea tells CNN, looking at just a few items on carts in her warehouse awaiting pick-up. “We’d be boxing stuff, we’d be on the phones, the phone would be ringing, I would have twice the staff that I have right now. It would be extremely hectic.”

    The ongoing strike is taking an emotional toll on Elyea, who says History for Hire has been in business for forty years.

    “I’m the one who worries at night,” a choked-up Elyea tells CNN. “You don’t lay somebody off without thinking, I’m not just taking their job, they’re gonna lose their home, they’re gonna lose their apartment because nobody makes enough to, to live in Los Angeles. This is an extremely expensive city to live in. So, so you’re really impacting someone’s life.”

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  • McCarthy privately outlines new GOP plan to avert shutdown, setting up clash with Senate | CNN Politics

    McCarthy privately outlines new GOP plan to avert shutdown, setting up clash with Senate | CNN Politics



    CNN
     — 

    House Speaker Kevin McCarthy privately outlined to members a new GOP plan to keep the government open on Wednesday after a marathon two-and-a-half-hour GOP conference meeting.

    The California Republican later told reporters that Republican negotiators made “tremendous progress as an entire conference,” following days of GOP infighting and less than two weeks before a government funding deadline.

    “We are very close,” McCarthy said Wednesday evening when asked specifically what progress had been made on the GOP short-term bill. “I feel like just got a little more movement to go there,” he added of the new GOP plan. When asked specifically about the topline numbers, he wouldn’t get into details but said: “We’re in a good place.”

    The plan, as outlined by the speaker, would keep the government open for 30 days at $1.471 trillion spending levels, a commission to address the debt and a border security package. Separately, they also agreed to move year-long funding bills at a $1.526 trillion level. That level is below the bipartisan agreement that the speaker reached with the White House to raise the national debt limit.

    The levels are also far lower than what senators from both parties and the White House are willing to accept, meaning it’s unclear how such a deal would avert a government shutdown. With just 10 days left to fund the government, the new plan sets up a standoff with the Senate over how to keep the government open.

    As part of the deal, Republicans now believe they have the votes to move forward on the yearlong spending bill that five conservative hardliners scuttled just Tuesday.

    GOP Rep. Mike Garcia of California said after Wednesday evening’s conference meeting there is now “a little more clarity” on the path forward.

    “We have a little more clarity as to a potential plan moving forward,” Garcia said, adding, “We are still negotiating that final number and trying to figure out exactly what we can do.”

    Some of the people that were previously opposed now signaled they are supportive. Reps. Ralph Norman of South Carolina and Ken Buck of Colorado indicated they will flip to a yes on the rule and will vote to advance the Department of Defense bill Thursday after the speaker came down to the spending levels that Norman had been demanding.

    “Sounds like we’ve got the votes for the rule,” Garcia said, pointing to Buck and Norman as having committed to changing to a “Yes.”

    With McCarthy’s extremely thin margin in the chamber – and Democrats so far united against the GOP proposal – Republican leadership has been negotiating for days to try to win over enough GOP support to pass their legislation.

    When asked about struggling to make progress earlier Wednesday, McCarthy repeated his favorite line, insisting he will never back down from a challenge no matter how messy.

    “I wouldn’t quit the first time I went for the vote for speaker,” McCarthy said, a reference to how he was voted speaker only after 15 rounds and days of voting in January. “The one thing if you haven’t learned anything about me yet, I will never quit.”

    However, an additional potential complicating factor emerged Wednesday night with former President Donald Trump, the front-runner for the 2024 Republican nomination, coming out in opposition to a short-term funding bill as he called on lawmakers to defund the DOJ and the investigations into him.

    McCarthy and his GOP leadership team have been trying to sell the House Republican Conference on unifying behind a plan to fund the government, brokered between the House Freedom Caucus and the more moderate Main Street Caucus over the weekend. But that proposed legislation encountered immediate opposition from more than a dozen far-right Republican lawmakers who wanted deeper spending cuts attached.

    Amid that impasse with conservatives, moderates in the bipartisan House Problem Solver’s Caucus are close to finalizing their own framework on a short-term spending bill that would fund the government for several months at current levels and include Ukraine aid and disaster assistance, according to two sources. Even with Democratic support, that plan would still likely face major challenges – not the least of which is how it would get to the floor before the government runs out of money.

    There are already signs that this alternative plan could face its own strong headwinds – not just with Republicans but with Democrats. Rep. Pramila Jayapal, a progressive Democrat from Washington state, told CNN on “Inside Politics” that she wants a “clean” continuing resolution of funds, a sign that progressives may not back some of the border security provisions that the Problem Solvers Caucus members are eyeing.

    House Democratic leader Hakeem Jeffries met with the House Problem Solvers Caucus earlier Wednesday, and said afterward that they need a bipartisan agreement in line with what was already negotiated in the debt ceiling package.

    “We need to find a bipartisan agreement consistent with what was previously reached,” he said.

    House GOP leadership announced Wednesday night that the House will be in and voting on Friday and Saturday, making official what was expected as the majority struggled to reach an agreement all week.

    The House is expected to pass a rule for the defense appropriations bill Thursday. Assuming the rule passes, the House will then start consideration of the defense bill with final passage expected Friday.

    The thinking would then be to pass the new GOP stopgap plan on Saturday, which is expected to be a full day.

    Members were advised on Tuesday to keep their schedules flexible as weekend votes were possible. Members filtering in and out of Whip Emmer’s office the past two days are insistent that they are making progress, but Rep. Kelly Armstrong of North Dakota told CNN earlier Wednesday that while they are getting closer, they are not close yet.

    Rep. Garrett Graves from Louisiana, who has been in the room for negotiations, had echoed that schedule change and projected Friday and Saturday work.

    “I think we’re going to be here this weekend,” he said.

    When pressed on what exactly they’d be up to and if they’d be able to vote by Saturday, Graves said, “Well, we won’t be having Mardi Gras parties,” indicating they’d be voting.

    Rep. Steve Womack, a Republican from Arkansas who sits on the House Appropriations Committee, lambasted the hardliners, calling it a “breach of duty.”

    “We’ve got a handful of people that are holding the rest of the conference, the majority of our conference kind of held hostage right now and in turn, holding up America,” he told CNN.

    Womack also said this will likely extend into the weekend and that “either it’s gonna be good or it’s gonna be bad.”

    This story and headline have been updated with additional developments.

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  • WhatsApp adds rival in-app payment options in India commerce push | CNN Business

    WhatsApp adds rival in-app payment options in India commerce push | CNN Business


    New Delhi/New York
    Reuters
     — 

    WhatsApp said on Wednesday that it will offer credit card payments and services from rival digital payment providers within its app in India, the latest bet by the Meta-owned service to boost commerce offerings in its biggest market.

    WhatsApp has more than 500 million users in India, though regulators there have capped its in-app WhatsApp Pay service to only 100 million people.

    People shopping on WhatsApp could also pay using popular services like Alphabet Inc’s Google Pay, Paytm and Walmart’s PhonePe but only after being redirected outside WhatsApp.

    Payments via those rival services -— and any others that run on India’s instant money transfer system UPI — will now be possible directly within WhatsApp, Meta said in a blog post. New in-app options for credit and debit cards will also be offered.

    The additions bolster Meta CEO Mark Zuckerberg’s plan for business messaging to become the “next major pillar” of the company’s sales growth, an agenda that has assumed greater urgency as Meta’s core ads business and metaverse project have come under pressure.

    While WhatsApp Pay users will remain capped in India, there is no such limit on the number of users permitted to transact with businesses on WhatsApp using the other methods, a Meta spokesperson said.

    With some 300 million people spending about $180 billion via India’s UPI each month, the new transaction options could serve as a powerful lure to attract businesses to pay Meta for access to WhatsApp users.

    To date, WhatsApp has limited its end-to-end shopping experiences in India to pilot programs like that with online grocery service JioMart, run by India’s richest person, billionaire Mukesh Ambani, and the metro systems in the cities of Chennai and Bengaluru.

    Moving forward, the new payment tools will be available to any company in India that uses WhatsApp’s business platform, which mainly serves large companies, according to the blog post.

    Meta is also expanding its Meta Verified subscription program to businesses globally, giving companies a mechanism to validate authenticity and elevate their content in users’ feeds, a separate blog post said.

    Monthly subscriptions will be available on Instagram and Facebook in a handful of countries to start and will expand to WhatsApp at a later date, costing $21.99 per Facebook page or Instagram account or $34.99 for both, according to the post.

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  • Starbucks bets on China with $220 million roasting and distribution center | CNN Business

    Starbucks bets on China with $220 million roasting and distribution center | CNN Business

    Editor’s Note: Sign up for CNN’s Meanwhile in China newsletter which explores what you need to know about the country’s rise and how it impacts the world.


    Hong Kong
    CNN
     — 

    Starbucks says it has poured more than $200 million into a new campus in China, in a sign of how the Chinese consumer remains crucial to the global coffee chain despite a major economic slowdown.

    The beverage giant opened the massive facility in eastern China on Tuesday that will serve as its main production and distribution center nationwide, supplying fresh coffee to thousands of Chinese stores, it said in a statement. The site is home to a large coffee roasting facility and an area that lets visitors see how drinks are made.

    Starbucks (SBUX) says it has committed a whopping 1.5 billion yuan or about $220 million to the project, the largest investment it has ever made for a coffee manufacturing and distribution center outside the United States.

    That’s nearly 50% more than the $150 million it had previously allocated in 2020, which was already higher than the $130 million announced earlier that year.

    Asked why the amount was raised twice, a company spokesperson told CNN that “additional capital investments were made to further elevate the advanced technologies and equipment used.”

    The opening of the 80,000 square-foot (7,400 square-meter) “innovation park,” located in the city of Kunshan, about an hour from Shanghai, comes after a year-long delay.

    Starbucks had previously said the facility would be “operational in summer 2022,” though the timeline was given in November 2020, as China grappled with disruptive pandemic-related restrictions. The company did not immediately respond to a request for comment Tuesday on reasons for the delay.

    China has long been one of the most important growth drivers for Starbucks, serving as its second-biggest market worldwide and top overseas market.

    But CEO Laxman Narasimhan says the company is “still in our early days in China,” noting that coffee consumption in the historically tea-drinking nation remains relatively low.

    On an earnings call last month, he pointed to how revenue in China had rebounded earlier this year after the company’s sales in the country were dented by Covid-19 restrictions, which were lifted late last year.

    China’s economic growth is set to slow this year as it continues to reel from the effects of a crisis-hit property sector and choppy consumer confidence. But new data on Friday suggested the downturn was stabilizing.

    “As one of the largest consumer markets in the world, China presents tremendous opportunities for Starbucks,” Narasimhan said in the statement.

    He said the new space would improve its supply chain and sustainability goals, particularly as the facility is set to become the company’s most energy-efficient coffee manufacturing plant in the world.

    “I couldn’t be prouder of the China team’s visionary thinking,” Narasimhan added. “As Starbucks’ largest and fastest-growing international market, we will continue to deepen our investment and reinforce our unwavering long-term commitment to the China market.”

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  • That jet the Marines lost? Taxpayers will pay $1.7 trillion for the F-35 program | CNN Politics

    That jet the Marines lost? Taxpayers will pay $1.7 trillion for the F-35 program | CNN Politics

    A version of this story appears in CNN’s What Matters newsletter. To get it in your inbox, sign up for free here.



    CNN
     — 

    The military losing a fighter jet near Charleston, South Carolina, and asking the public to help find it is a plotline in which “Top Gun” (fighter jets) meets “The Hunt for Red October” (country can’t find its weapons system).

    But the larger story of the F-35 Lightning II stealth fighter is like tax dollars meet “The Blob” (unstoppable force consumes everything in its path).

    “How in the hell do you lose an F-35?” wondered Rep. Nancy Mace, the South Carolina Republican, in a post on social media that speaks for everyone who read the headline about the state-of-the-art military plane that went missing Sunday after its pilot ejected and parachuted to safety.

    “How is there not a tracking device and we’re asking the public to what, find a jet and turn it in?” she continued.

    A more general and important question could be asked of the F-35 program writ large: How in the heck can you spend so much money on a plane that doesn’t work the way it’s supposed to?

    The exact amount of money for a single aircraft like the one that went missing is somewhere around $100 million.

    The entire F-35 program is on track to cost $1.7 trillion over the lifetime of the plane. Trillion. With a “t.”

    CNN’s Oren Liebermann reported the facts of what we know about the missing aircraft on CNN on Monday:

    • The pilot ejected safely and was taken to a hospital.
    • Joint Base Charleston posted a social media plea for information from anyone who might have seen the jet or its remains.
    • The search is focused northwest of Charleston near Lakes Marion and Moultrie.

    But we’re left with so many questions, he told CNN’s Jim Sciutto.

    “Was the transponder working? If not, why wasn’t it working? Why, maybe, had it been switched off? What was the mission it was on? All of this is either under investigation or a question we haven’t gotten an answer to yet.”

    When I asked Liebermann by email how to generally explain the F-35 program, he noted it is the most expensive weapons program in US history.

    For a country that spends a good portion of its income on its military and is known to have the most advanced fighting force on Earth, that’s saying something.

    The F-35 is what’s known as a “stealth” fighter, which means it is supposed to be able to avoid detection by enemies. Maybe a little too stealth.

    But if you watch the glossy Lockheed Martin video at F35.com, the jet is also supposed to be able to communicate with rest of the military, “sharing its operational picture with the ground, sea and air assets.” The video shows the jet beaming information to the ground and satellites.

    The New York Times’ editorial board used the word “boondoggle” to describe the F-35 program in 2021. But it added that the US is essentially stuck with the program.

    Or as CNN’s Zachary Cohen wrote back in 2015, “Is the world’s most expensive weapons program worth it?” Eight years later, the question still applies.

    Many US allies – Canada, Germany, Japan and others – also buy F-35s from Lockheed.

    The F-35, as developed by Lockheed at the request of the US military, was supposed to be the jack-of-all-jets, with versions to do different jobs for the Air Force, the Navy and the Marines.

    The version that went missing over South Carolina – the F-35B – is used by the US Marine Corps and meant to be able to “land vertically like a helicopter and take-off in very short distances,” according to a fact sheet from Lockheed. Another F-35B crashed in 2018, also in South Carolina.

    The Project on Government Oversight, a nonpartisan watchdog group, has written extensively on the F-35 and its cost overruns. I asked Dan Grazier, an F-35 expert for POGO, what has gone wrong.

    It all boils down to “failure at the conceptual level,” he told me in an email.

    “The architects of the program attempted to build a single aircraft to meet multiple mission requirements for not just three separate services but also those of multiple countries,” Grazier said, noting the difference between a small and nimble fighter jet and a long-range jet.

    “When someone attempts to design a single aircraft to perform all of these roles, they have to make numerous design tradeoffs that generally results in an aircraft that can sort of do it all, but doesn’t do anything particularly well.”

    The jet has never reached its full operational capability and already needs updates and tweaks, including a new engine. “Every F-35 built until now is nothing more than a very expensive prototype,” Grazier told me.

    “All of them will have to go through an expensive retrograde process in the future when the design is complete to bring them up to something approaching full combat standards.”

    I asked a spokesperson for Lockheed Martin if the company is confident the jets perform as they should considering the taxpayer investment.

    They provided this statement:

    The global F-35 fleet has surpassed more than 721,000 cumulative flight hours and spans 17 nations and three U.S. military services. Since F-35s began flying 17 years ago, there has been one pilot fatality and less than 10 confirmed destroyed aircraft. More than 965 F-35s have been delivered and more than 430,000 sorties completed.

    Diana Maurer is director of defense capabilities and management at the Government Accountability Office, the government’s own watchdog that earlier this year described the F-35 program as “more than a decade behind schedule and $183 billion over original cost estimates.”

    She said pilots frequently report being impressed by the plane’s capabilities. But they also report not being able to fly it often enough.

    Problems getting spare parts, issues with repairs and a reliance on contractors all contribute to the F-35 having a substandard readiness and frequent groundings of the fleet.

    “There’s a variety of reasons why they can’t get these aircraft up in the air as often as they would like,” Maurer said. “And that’s really frustrating from a taxpayer perspective for something that already costs hundreds of millions of dollars a year; cost many, many multiple billions already; and will cost nearly $2 trillion over the life cycle of the program.”

    Grazier said officials at the Pentagon have acknowledged problems with the F-35 that can be applied to the design process in the future. But this is a program that evolved over successive presidencies and with a rotating cast of characters in charge both in Congress and at the Pentagon.

    The system is supposed to have safeguards against extreme cost overruns, but when those warnings were triggered in previous decades, the F-35 program was allowed to barrel forward. And here we are.

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  • Two pilots were killed in a collision at a Reno air show | CNN

    Two pilots were killed in a collision at a Reno air show | CNN



    CNN
     — 

    Two pilots were killed when their planes collided Sunday during the National Championship Air Races and Air Show in Reno, Nevada, organizers of the event said.

    “Around 2:15 p.m. this afternoon, at the conclusion of the T-6 Gold race, upon landing, two planes collided and it has been confirmed that both pilots are deceased,” the Reno Air Racing Association said in a statement posted on Facebook.

    In a later statement, organizers identified the two pilots as Nick Macy and Chris Rushing.

    “Both expertly skilled pilots and Gold winners in the T-6 Class, Macy piloted Six-Cat and Rushing flew Baron’s Revenge,” the updated statement said. “Families of both pilots have been notified and support services are onsite as they deal with this tragedy.”

    No other injuries were reported, it added.

    The remainder of the races were canceled, organizers said.

    The National Transportation Safety Board said in a statement sent to CNN it is investigating the cause of the crash. The agency, which is leading the probe, identified the two aircraft as a North American T-6G and North American AT-6B, and said they had just completed the race.

    “The wreckage of each plane came to rest one-half mile from each other,” NTSB said, adding the wreckage will be taken to an off-site facility for analysis.

    Event organizers said they are cooperating with the NTSB, the Federal Aviation Administration and “all local authorities to identify the cause of the accident and ensure that all of our pilots, spectators and volunteers have the necessary support during this time.”

    The event, which has been running for more than five decades, prides itself in being an “institution for northern Nevada and aviation enthusiasts from around the world,” according to its website. Over the past decade, the event has brought more than a million spectators and “generated more than $750 million” for the regional economy, according to the site.

    This is not the event’s first fatal crash. A pilot was killed last year in a plane crash during a race and In 2011, 11 people were killed and more than 60 others injured when a plane veered out of control and slammed into spectators.

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  • Contract negotiations: UAW strike puts the four-day workweek back in focus | CNN Business

    Contract negotiations: UAW strike puts the four-day workweek back in focus | CNN Business



    CNN
     — 

    When the United Auto Workers called a strike last week against General Motors, Ford and Stellantis, one of their demands focused on an idea circulating on the periphery of labor reform circles.

    In addition to calling for a 36% pay raise and increased job security, union members want a 32-hour, four-day workweek with no pay cuts.

    Proposals to shorten the workweek have gained traction in recent years, with the flexibility of pandemic-era remote work fueling many of these calls. The accelerating use of artificial intelligence in the workplace has also pushed some workers to question the necessity of a 40-hour week.

    Sen. Bernie Sanders has long been a vocal proponent of a shortened workweek.

    “We are looking at an explosion in this country of artificial intelligence and robotics. And that means that the average worker is going to be much more productive,” the Vermont Independent told CNN’s Jake Tapper on Sunday. “The question as a nation that we have to ask ourselves is: Who is going to benefit from this productivity? We should begin a serious discussion — and the UAW is doing that — about substantially lowering the workweek.”

    Several countries have conducted trials of four-day workweeks, with the largest held in the United Kingdom last year. The trial lasted six months and encompassed about 2,900 workers across 61 companies. Participants reported better sleep, more time spent with their children and lower levels of burnout.

    “It would be an extraordinary thing to see people have more time to spend with their kids, with their families, to be able to do more cultural activities, get a better education,” said Sanders. “People in America are stressed out for a dozen different reasons, and that’s one of the reasons why life expectancy in our country is actually in decline.”

    A separate study conducted in Iceland between 2015 and 2019 found reducing the number of work days a week did not lower productivity. A similar program in the United States and Canada, composed of dozens of businesses, found none of the companies planned to return to the five-day standard after the trial ended.

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  • Why some of Biden’s problems may be overblown at this time | CNN Politics

    Why some of Biden’s problems may be overblown at this time | CNN Politics



    CNN
     — 

    President Joe Biden had a terrible, horrible, no good, very bad week. He’s under an impeachment inquiry, his son was indicted in Delaware, inflation seems to be tilting back up, the United Auto Workers went on strike after Biden said they wouldn’t, and the chattering class is talking about him not running for reelection.

    Some of these factors explain why my colleague Zach Wolf wrote that “Biden’s two worst weaknesses were exposed” this past week, and it’s also why I’ve written about the president’s difficulties heading into next year.

    But while Biden clearly has problems – no president with an approval rating hovering around 40% is in good shape – some of his issues appear to be overblown at this time. Here are three reasons why:

    A Washington Post op-ed by columnist David Ignatius that called on Biden not to run for reelection got a lot of play this past week.

    Putting aside whether Biden should or shouldn’t run, the fact is that he is running. A lot of people will point to polls (like those from CNN) showing that a majority of Democrats don’t think the party should renominate him.

    But these surveys only tell you so much. They’re matching Biden against himself and not anyone else. When asked in the CNN poll to name a preferred alternative to Biden, only a little more than 10% wanted someone else and could name a specific person.

    When matched up against the announced Democratic opposition (Robert F. Kennedy Jr. and Marianne Williamson), Biden is crushing it. He’s over 70%, on average, in recent polling.

    Moreover, Biden’s job approval rating with Democrats hovers around 80%. That is well above the level at which past incumbents have faced strong primary challenges. Those challenges (such as when Ted Kennedy challenged incumbent Jimmy Carter in 1980) came at a time when the president had an approval rating in the 50s or 60s among his own party members.

    It is worth analyzing whether the fact that a lot of Democrats don’t think Biden should be renominated masks a larger problem he could face in a general election.

    But Biden’s pulling in more than 90% of Democrats in Fox News and Quinnipiac University general election polling released this past week. In both polls, his share slightly exceeded former President Donald Trump’s among Republicans (though within the margin of error).

    The fact is Biden’s got problems, but worrying about renomination is not one of them.

    From a political point of view, Biden’s connections to his son Hunter have caused the president nothing but heartache. Most voters think Biden did something inappropriate related to his son’s business dealings.

    So, it might naturally follow that House Republicans’ impeachment inquiry into the president’s ties to his son’s foreign business deals would be harmful to his political future.

    About 40% of voters, on average, think Joe Biden did something illegal. Most voters don’t.

    Some Republicans are no doubt hoping that Biden’s own troubles will make their likely nominee (Trump), who is under four indictments, look less bad by comparison. A majority of voters, however, think that Trump committed a crime.

    The public doesn’t see the Biden and Trump cases the same way.

    A Wall Street Journal poll from the end of August found that a majority of Americans (52%) did not want Biden to be impeached.

    Republicans will have to prove their case in the court of public opinion.

    It’s conceivable that Republicans will overshoot the mark like they have in the past. The impeachment inquiry into Bill Clinton in 1998 preceded one of the best performances by a president’s party in a midterm election. Clinton’s Democratic Party picked up seats in the House, which has happened three times for the president’s party in midterms over the last century.

    To see how impeachment could turn things upside down for the GOP this cycle, consider independent voters. While the vast majority of independents disapprove of the job Biden is doing as president (64%) in our latest CNN poll, only 39% think he did something illegal.

    An election about a potentially unpopular impeachment would be better for Biden than one about an issue that really hurts him (such as voters seeing him as too old).

    Stop me if you heard this one before: Biden is the president heading into an election, voters are unhappy with the state of the economy, and his party does much better in the elections than a lot of people thought.

    That’s what happened in the 2022 midterms.

    The inflation rate is lower now than it was then, but it’s on the uptick. Voters, both now and then, overwhelmingly disapprove of Biden’s handling of the economy. They even say the economy matters more than any other issue, like they did in 2022.

    What none of this data takes into account is that Americans almost always call the economy the top issue, according to Gallup.

    Believe it or not, fewer Americans say the economy is the top problem facing the country now (31%) than they have in either the median (40%) or average (45%) presidential election since 1988.

    If you think about recent presidential elections in which the economy was the big issue (1992, 2008 and 2012), the state of the economy dominated the headlines.

    But as mentioned above, right now, there are a lot of other things going on in the country, as was also the case during the 2022 midterms.

    It’s not as if the economy is helping Biden. I’m just not sure it’s hurting him.

    After all, there’s a reason why Democrats have consistently outperformed the 2020 presidential baseline in special elections this year.

    If things were really that bad for Biden and the Democrats, they’d most likely be losing elections all over the country. That simply isn’t happening at this point.

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  • Lee knocks out power to tens of thousands as it brings fierce winds and coastal flooding to Maine and Canada | CNN

    Lee knocks out power to tens of thousands as it brings fierce winds and coastal flooding to Maine and Canada | CNN



    CNN
     — 

    Post-tropical cyclone Lee is bringing heavy rain, destructive winds and coastal flooding to Canada and Maine, knocking out power to tens of thousands, lashing the coasts with big waves and spurring calls to stay indoors.

    Lee, once a powerful hurricane, is churning maximum sustained winds of 60 mph as it spreads north after making landfall Saturday on Long Island in Nova Scotia, one of Canada’s Atlantic provinces, according to the National Hurricane Center.

    It’s expected to steadily weaken over Sunday and Monday, with conditions improving across rain and wind-battered areas of the northeast US and Canada.

    The cyclone is forecast to turn eastward and move quickly to the northeast, across the Canadian Maritimes on Sunday, and into the North Atlantic by early Monday, National Hurricane Center Director Michael Brennan said in a video update Saturday.

    For now, tropical storm force winds are extending out about 290 miles from what’s left of Lee’s core on Saturday, downing trees and power lines and leaving many in the dark.

    In Nova Scotia, 130,250 customers are without power Saturday while 38,000 in New Brunswick were in the dark, according to an outage map by Nova Scotia Power.

    In Maine, nearly 60,000 homes and businesses were without power, according to poweroutage.us. Photos from across the state showed toppled trees near homes and on roadways as powerful winds battered the area.

    Winds of 83 mph were recorded in Perry, Maine, and 63 mph in Roque Bluffs, Maine.

    Utility power crews were out assessing damages and actively responding to downed utility lines and other damage caused by the storm Saturday.

    On top of the fierce winds, Lee is also stirring up dangerous surf and life-threatening rip currents along the US East Coast, Atlantic Canada and other areas.

    “We’ll see very high waves and coastal erosion and minor coastal flooding,” Brennan said.

    Another inch of rain was expected over parts of eastern Maine and New Brunswick, and Lee continues to threaten flooding in urban areas of eastern Maine in the United States and New Brunswick in Canada, according to the hurricane center.

    People watch rough surf and waves, remnants of Tropical Storm Lee, crash along the shore of Bailey Island, Maine, on Saturday.

    In Canada’s New Brunswick province, north of Maine, officials cautioned residents to prepare for power outages and stock up on food and medication for at least 72 hours as they encouraged people to stay indoors during what they forecast would likely turn into a storm surge for coastal communities.

    “Once the storm starts, remember please stay at home if at all possible,” said Kyle Leavitt, director of New Brunswick Emergency Measures Organization. “Nothing good can come from checking out the big waves and how strong the wind truly is.”

    A downed tree is shown in a yard in Fredericton on Saturday.

    In the US, states of emergency have been declared in Maine and Massachusetts. President Joe Biden has authorized the Department of Homeland Security and the Federal Emergency Management Agency to step in to coordinate disaster relief and assistance for required emergency measures.

    Boston’s Logan International Airport saw a spike in flight cancellations Saturday with 23% of all flights into Boston and 24% of flights originating out of the city canceled, according to the flight tracking website FlightAware.

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  • Boarding a plane is a nightmare. Here’s how we got here | CNN Business

    Boarding a plane is a nightmare. Here’s how we got here | CNN Business


    New York
    CNN
     — 

    “We would like to begin boarding our flight at this time.”

    You are familiar with that friendly boarding announcement from the gate agent. Unfortunately, it means the next 45 minutes of your life will be messy. And airlines have made it chaotic by design — so people will pay to get an easier boarding process.

    First, passengers begin to crowd the gate queue, causing a bottleneck. Although you told yourself you would sit behind calmly in the waiting area at the airport until your zone was called, you can’t resist. You head over to the scrum.

    Next comes confusion about which zone passengers are assigned.

    Zone 1 or Group A don’t actually mean we get to board first. People line up out of turn, waiting for their group to be called. Some passengers cut the line to secure space for their carry-on bag in the overhead bin. Finally, your zone is called and you can scan your ticket and get on the plane.

    Don’t get too excited though — the line on the jet bridge is backed up. More waiting.

    Once you make it through the crawl on the jet bridge and step onto the plane, it’s also backed up.

    Your seat is in the last section of the plane. You move in fits and starts, jostling your way through the narrow aisle until you’ve reached the row.

    If you’re lucky enough to find space for your carry-on bag in the overhead, you awkwardly toss it in, hoping not to hit another passenger in the process. It’s still not over.

    You go to sit down in our window seat, but someone is in the middle. They have to get out and move into the aisle, holding up the line behind you.

    “Boarding a plane is the 21st century version of Lord of the Flies,” said Henry Harteveldt, who covers the travel industry for Atmosphere Research Group. “The airlines created this complexity and this insanity.”

    Here’s how it became so disorderly, and why it isn’t more efficient.

    That panic over faster boarding and the guarantee of an overhead compartment isn’t a bug for the airlines. It’s a feature.

    Sure, airlines could make boarding better for everyone. But what’s better for the airlines is to make boarding better only for some people. The people who want to give them even more money.

    Carriers have recognized that they could make even more money to people willing to pay a fee for priority boarding.

    There’s internal tension between airline marketing teams that are focused on maximizing revenue from boarding and operations teams that want the process to run more efficiently, said Robert Mann, an airline consultant and former executive.

    Crowded airports, crowded boarding.

    “Because there’s so much money on the credit card and frequent flier side, the marketing people win and the operations people have to deal with it,” he said.

    Additionally, planes have gotten larger and are more frequently booked up thanks to improvements in airline analytics. And some carriers have reduced the number of agents at the gate, because more agents means more people the airlines have to pay.

    Despite various boarding strategies and techniques over the years from airlines, the process is still a nightmare.

    Bag fees and loyalty programs

    Getting on a plane wasn’t always this complicated.

    Decades ago, airlines used to board first class and use an open boarding process for the main cabin. Passengers could check bags for free.

    But in 2008, amid soaring fuel prices, airlines began charging passengers for checked bags.

    “That’s when things began to go off the rails,” Harteveldt said.

    Passengers started to carry on more bags to avoid paying a fee or wait to pick up bags at their arrival.

    “Airlines figured out they could make money off of bags. That killed any efficiency to do faster boarding,” said Massoud Bazargan, a professor at Embry-Riddle Aeronautical University in Daytona Beach, Florida, who studies airline scheduling and operations.

    Precious overhead space.

    Last year, airlines collected nearly $7 billion on bag fees, according to the Transportation Department.

    In response, airlines started selling valuable overhead bin space to travelers willing to pay for earlier boarding. Airlines also began dangling credit cards, frequent flier programs and loyalty programs they could all sell to people who wanted boarding priority — something that wasn’t really necessary before with a system that mostly worked before the industry broke it.

    By 2012, carriers began introducing basic economy fares and offered priority boarding for a fee.

    All these newly-created segments of passengers meant airlines needed to separate them during boarding. Companies introduced a new lingo of different boarding zones and groups, slowing down the process.

    “The more zones and groups of boarding, the longer it takes,” Bazargan said.

    Changes in the airline industry to improve airlines’ profitability have also impacted boarding.

    Aircrafts have gotten larger and with denser, cramped seating to accommodate more travelers. Flights are also more frequently packed, clogging up boarding.

    Last April, passenger load factor — the ratio of passengers to seats available — was 84%, a jump from 74% in 2000, according to the Transportation Department.

    Airlines have been experimenting with different boarding schemes to try to speed up the process. But none have found an optimal boarding method.

    Some airlines have tried to board passengers with window seats first, followed by middle seats and then aisles — known as Wilma. But companies abandoned this method because it split up families and was chaotic for people boarding late.

    Boarding from the back to the front also hasn’t gone smoothly.

    This method causes congestion in the aisle as people look for their seats and store their luggage in the overhead.

    Jason Steffen, a University of Nevada, Las Vegas physics professor developed a boarding method that boards passengers in rows of two.

    Will boarding ever get easier? Probably not —unless you pay.

    The Steffen Method allows several rows of passengers to store their luggage simultaneously and minimizes the time it takes to load luggage. This method can cut the boarding time by nearly half.

    But airlines have not implemented it. This method requires strict quality controls over where people stand in line and interferes with boarding strategies based on travelers’ status.

    If airlines wanted to speed up the boarding process they could make it free to check bags, reduce the number of zones, and switch to open seating.

    Southwest Airlines has the fastest boarding process of any major airline by simply allowing people to claim the first available seat. It works because passengers spend less time waiting in the aisle, and have more freedom to sit where it’s least crowded.

    But airlines are unlikely to switch to Southwest’s model.

    “They don’t want to do random seating,” Bazargan said. “They would deprive themselves money from seat assignments.”

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  • Russia gives Kim Jong Un an inside look at its warplanes and frigates | CNN

    Russia gives Kim Jong Un an inside look at its warplanes and frigates | CNN



    CNN
     — 

    North Korean leader Kim Jong Un inspected warplanes, toured an airfield and visited a Pacific Fleet frigate on Saturday as the latest stop on his tour of Russia took him to Vladivostok.

    Russian state media reported that Kim had met the Russian Defense Minister Sergei Shoigu at the Knevichi airfield in Vladivostok before both men were accompanied by the commander-in-chief of the Russian Navy, Admiral Nikolai Evmenov, on a visit to the Pacific Fleet frigate Marshal Shaposhnikov.

    The North Korean leader was shown the ship’s central command center and its modern missile weapon control systems, the Russian Ministry of Defence said via Telegram.

    The Russian defence ministry added that Admiral Evmenov had talked to Kim about the “expanded capabilities of the new control systems, which allow Kalibr sea-based cruise missiles to be effectively used against sea and coastal targets at a distance of more than 1,500 kilometers from the ship.”

    Afterwards Kim was gifted a replica of the ship and left a comment in the frigate’s guest book, though the ministry did not reveal what he wrote.

    The stop in Vladivostok is Kim’s latest in a tour of Russia and its Far East region that follows his meeting with President Vladimir Putin earlier this week, at which the North Korean leader appeared to endorse Moscow’s war on Ukraine.

    The meeting has led to speculation around the potential for some kind of military cooperation between Moscow and Pyongyang.

    The ministry said on Saturday that the frigate had been selected to showcase the modernization within the Far East region “which clearly demonstrates the capabilities of the shipbuilding industry.”

    Earlier in the morning, Kim and Shoigu had toured the Knevichi airfield in Vladivostok, according to Russian state news agency RIA Novosti, where Kim was shown Russian aircraft including the Tu-160, Tu-95MS and Tu-22M3.

    Kim also saw the Su-34, Su-30SM, Su-35S fighter jets along with the Su-25SM3 attack aircraft, RIA added.

    The Kinzhal hypersonic missile system and Russia’s Tu-214 long-haul passenger airplane were also on display, it said.

    On Friday, North Korean state media reported Kim had been “deeply impressed” by a visit to a Russian aircraft manufacturing plant.

    Kim toured facilities for aircraft design and assembly at the Komsomolsk-on-Amur Yuri Gagarin Aviation Plant, where he was struck by “the rich independent potential and modernity of the Russian aircraft manufacturing industry,” the Korean Central News Agency (KCNA) reported.

    He met test pilots, climbed aboard a Su-57 fifth-generation fighter jet, and watched a test flight of the airplane, KCNA said.

    The facility Kim toured on Friday is Russia’s largest aviation manufacturing plant and builds and develops warplanes for the ministry of defense, including Su-35S and Su-57 fighter jets, according to the Russian state media agency TASS. Kim’s late father, Kim Jong Il, visited it in 2002.

    On Friday’s visit Kim “expressed sincere regard for Russia’s aviation technology” and how it had undergone “rapid development, outpacing the outside potential threats, and wished the plant success in its future development,” KCNA reported.

    After the tour and a luncheon, Kim left a message in the visitor’s book saying, “Witnessing the rapid development of Russia’s aviation technology and its gigantic potential” before signing it with the date and his name.

    According to a Russian government press release on Friday, Deputy Prime Minister Denis Manturov said Moscow saw “the potential for cooperation both in aircraft manufacturing and in other industries” with North Korea.

    “This is especially relevant for achieving the tasks our countries face to achieve technological sovereignty,” he said in a statement circulated on Telegram.

    North Korean leader Kim Jong Un visits an aircraft manufacturing plant in the city of Komsomolsk-on-Amur in Russia on September 15, 2023.

    While exact details remain scant on what sorts of talks have taken place behind closed doors, observers say it’s clear what each is looking for from the other.

    Moscow is desperate for fresh supplies of ammunition and shells as its war with Ukraine drags on – and Pyongyang is believed to be sitting on a stockpile.

    Meanwhile, after years of sanctions over its nuclear weapon and missiles program, North Korea is equally in need of everything from energy to food to military technology, all of which Russia has.

    When the two leaders met at the Vostochny Cosmodrome in Russia’s Amur Region, a reporter asked Putin whether Russia would help North Korea “launch its own satellites and rockets” – to which Putin responded, “That’s exactly why we came here.”

    The Russian president also said Kim “shows great interest in space, in rocketry, and they are trying to develop space.”

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  • Americans are feeling gloomier about the economy | CNN Business

    Americans are feeling gloomier about the economy | CNN Business


    Washington, DC
    CNN
     — 

    Americans aren’t feeling gloomy about higher gas prices just yet, but they’re still on edge about inflation and the economy’s direction — and concerns are starting to surface about the possibility of a government shutdown.

    Consumer sentiment tracked by the University of Michigan edged down in September from the prior month by 1.8 points, according to a preliminary reading released Friday.

    “Both short-run and long-run expectations for economic conditions improved modestly this month, though on net consumers remain relatively tentative about the trajectory of the economy,” said the University of Michigan’s Surveys of Consumers Director Joanne Hsu in a release. “So far, few consumers mentioned the potential federal government shutdown, but if the shutdown comes to bear, consumer views on the economy will likely slide, as was the case just a few months ago when the debt ceiling neared a breach.”

    Sentiment could start to sour soon, since gas prices are highly visible indicators of inflation. Sentiment fell to its lowest level on record last summer when gas prices topped $5 a gallon and inflation reached a four-decade high. The national average for regular gasoline stood at $3.87 a gallon on Friday, according to AAA, seven cents higher than a week ago and 17 cents higher than the same day last year.

    Consumers’ expectation of inflation rates in the year ahead fell to a 3.1% rate in September, down from 3.5% in the prior month.

    This story is developing and will be updated.

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  • Autoworkers strike deadline nears as negotiators rush to avoid historic walkout | CNN Business

    Autoworkers strike deadline nears as negotiators rush to avoid historic walkout | CNN Business


    Detroit
    CNN
     — 

    With just hours to go before labor contracts expire at America’s three unionized automakers, thousands of autoworkers could walk off the job.

    Those limited, targeted strikes could be enough to grind production to a halt at General Motors, Ford and Stellantis, which builds vehicles under the Jeep, Ram, Dodge and Chrysler brands for North America.

    But the uncertainty and confusion underscore the high stakes, with a possible historic strike at all three major automakers, disruptions to the local and national economies, and, perhaps more than anything, a hint at the future of manufacturing jobs in America.

    The union and the automakers continued to negotiate down to the wire on Thursday. GM made a new offer on Thursday afternoon, including a 20% raise, matching Ford’s offer.

    “We don’t want there to be a strike. We’re ready to work until the deadline,” Ford CEO Jim Farley told CNN. “We’d like to make history by making a historic deal, not having a historic strike,” he said.

    And President Joe Biden himself spoke to leaders of the union and the automakers, as a strike could be politically costly for him, as well.

    UAW President Shawn Fain on Wednesday evening announced plans for those targeted strikes at any company that fails to reach a labor deal with the union before contracts expire at 11:59 pm Thursday. Fain suggested the strategy, including the possibility of ramping up strikes as negotiating continues, would give the UAW more leverage. “We have the power to keep escalating and keep taking plants out,” he said.

    But Farley said on CNN Thursday that striking plants that make critical parts could affect workers at downstream assembly plants.

    “We can’t make a vehicle without an engine or transmission or stamping. So those people will, you know, basically be furloughed,” Farley said.

    Slowing or stopping the production of a few engine or transmission plants at each company could be as effective at stopping operations as a full strike at all plants, according to industry experts.

    One engine or transmission location per company might be enough to shut down nearly three-quarters of the US assembly plants, said Jeff Schuster, global head of automotive for GlobalData, an industry consultant.

    “Two plants per company, you can pretty much idle North America,” he said.

    Halting the companies’ assembly lines would likely happen in less than a week that way, Schuster said.

    One advantage for the union of a targeted strike is the potential to save resources and extend a possible walkout. Striking union members are eligible for $500 a week from the union’s strike fund.

    If all 145,000 UAW members among the three automakers were to strike at the same time, it could cost the fund more than $70 million a week, draining the $825 million fund.

    If the companies shut down operations and lay off members who are not technically on strike, those workers could be eligible to receive state unemployment benefits rather than strike benefits, which could preserve the union’s resources.

    Strikers are not eligible for unemployment benefits, but workers on temporary layoff can receive the benefits, which differ by state but would be less than the union’s $500 strike pay. There also are legal questions in different states about qualifying for unemployment.

    An official with Ford told reporters Thursday that under state law, workers in Michigan and Ohio were not eligible to receive unemployment benefits if they were laid off due to lack of parts at their plant caused by a strike. There are some other states, such as Kentucky and Tennessee, where they would be able to receive unemployment benefits, according to the officials.

    But they said none of the Ford UAW members would be eligible for so-called “sub-pay,” which they typically receive during temporary layoffs. Sub pay is far more lucrative, covering most of the gap between unemployment benefits, typically less than $300 a week, and normal company pay, which can be close to $1,300 a week.

    GM CEO Mary Barra sent a letter to employees Thursday saying the company’s latest offer now includes a 20% raise, with an immediate 10% pay hike. The lower paid temporary employees would get $20 an hour, which represents a 20% raise from the current $16.67 an hour they receive. She called the offer “historic.”

    “We are working with urgency and have proposed yet another increasingly strong offer with the goal of reaching an agreement tonight. Remember: we had a strike in 2019 and nobody won,” she said in the letter.

    Farley told CNN the offer from Ford of a 20% raise over the life of the contract is the most lucrative offer the company has made to the union in the 80 years it has been there. But he said meeting the union’s demands of close to a 40% raise, along with a four-day work week and other benefit improvements, would have been unaffordable.

    Farley blamed the union for the lack of progress in negotiations. But the union has blamed the companies for waiting until the end of August or early September to make their first counteroffers.

    The union came up with the 40% raise request based on the increase in the pay of CEOs at the three automakers over the last four years. Ford CEO pay rose 21%, from $17 million for Farley’s predecessor Jim Hackett in 2019, to $21 million for Farley last year. (Farley is the lowest compensated of the three CEOs.)

    Asked why the union workers shouldn’t get the same increases, Farley responded, “We’re really open to huge increases.” As to the 40% increases for CEOs, Farley responded, “I wasn’t CEO four years ago, but we have put on the table huge increases, double digit increases.”

    Ford has not had a strike since 1978; it has more UAW workers than the other two automakers.

    President Joe Biden spoke with Fain and leaders of the major auto companies “to discuss the status of ongoing negotiations,” the White House said Thursday.

    The White House declined to say Wednesday that Biden would support UAW workers if they chose to strike.

    “I’m gonna leave it at, [Biden] believes the auto workers deserve a contract that sustains middle class jobs and wants the parties to stay at the table, to work round the clock to get a win-win agreement,” Council of Economic Advisors Chair Jared Bernstein told reporters during Wednesday’s White House press briefing.

    Biden became directly involved in 11th hour negotiations a year ago to stop engineers and conductors at the nation’s major freight railroad from going on strike and was credited by both sides with a deal being reached at that time. But Biden and Congress had power under a different labor law to keep workers on the job by imposing a contract, a power he used later in the year when rank-and-file rail workers rejected the deal he brokered and again threatened to strike

    The autoworkers fall under a different labor law, one that leaves Biden with no power to stop a walkout. And he has limited influence with the UAW, which has been critical of his push to have the industry convert to electric vehicles, a move that could cost members jobs in the long run.

    In a statement midday Thursday, GM said it remains in “good faith negotiations” with the UAW but cautioned that a strike would be disruptive to its business.

    “Any disruption would negatively impact our employees and customers, and would have an immediate ripple effect across our communities,” a company spokesperson said.

    One sticking point in negotiations is that wages are only part of the gap between the two sides. In some ways it might be the least difficult problem to solve, said Patrick Anderson, CEO of Anderson Economic Group, a Michigan research firm.

    “The difference between the automakers and the unions on wages is a gap that could be closed,” said Anderson. “The differences involving non-wage demands are a gulf, not a gap.”

    The union is attempting to reverse deep concessions that go back as far as 2007. At the time, years of losses had left Ford nearly out of cash, and GM and Chrysler were on their way to bankruptcy and federal bailouts.

    The number one concession the union wants to end is a lower tier of wages and benefits for workers hired since 2007. While top pay for those newer hires, who today make up a majority of membership, is the same as the $32.32 paid to more senior members, it takes many more years to reach that level.

    The union also wants to restore traditional pension plans for those hired since 2007, as the more senior workers now receive, as well as the same retiree health care coverage. And to protect members from rising prices, it wants a return of the cost-of-living adjustments to pay that all employees lost in 2007.

    Even Fain calls those demands “ambitious,” but he said they’re driven by record or near record profits at the automakers.

    Pandemic supply chain disruptions and shortages of some parts, particularly computer chips, have led to record car prices. The average purchase price of a new car in August was nearly $48,000, according to Edmunds. That’s up 30% from August of 2019.

    Automakers have used their limited supply of parts to build vehicles loaded with options to maximize profits. That’s produced a strong bottom line. General Motors reported record profits in 2022, and Ford posted near-record profits as well. Stellantis, a European-based automaker formed in 2021 by the merger of Fiat Chrysler and PSA Group, had 2022 profits up 26% compared to its first year of combined operations.

    A strike that halts production nationwide could also be costly for the automakers at a time of strong demand by car buyers and strong competition from nonunion automakers such as Tesla and foreign brands. GM said it lost $2.9 billion during its 2019 strike.

    While the automakers have done their best to build up inventory at dealerships, car buyers could have trouble finding some of the models they want and could have to wait longer for their choice of colors and options. And limited supplies could put upward pressure on some vehicle prices.

    – CNN’s DJ Judd contributed to this report

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  • US retail spending picked up in August, mostly due to sales at gas stations | CNN Business

    US retail spending picked up in August, mostly due to sales at gas stations | CNN Business


    Washington, DC
    CNN
     — 

    US retail sales picked in August, boosted by higher gas prices, as spending on other items grew modestly.

    Retail sales, which are adjusted for seasonal swings but not inflation, rose 0.6% in August, the Commerce Department reported Thursday. That’s a slightly faster pace than July’s revised 0.5% gain, and marks the fifth straight month of growth. It’s also well above economists’ expectation of a 0.2% increase.

    The increase was largely driven by spending at gas stations, which advanced 5.2% last month. Spiking oil prices due to OPEC+ production cuts, strong demand and disruption from a deadly flood in Libya have pushed up prices at the pump. The national average for regular gasoline stood at $3.86 a gallon on Thursday, according to AAA, the highest level in 10 months.

    Excluding sales at gasoline stations, retail spending advanced a more modest 0.2% in August from July.

    Retail spending increased across most categories, including at restaurants and grocery stores. Sales of furniture and at specialty stores, such as those that sell sporting goods, fell 1% and 1.6% respectively. Online retail sales in August were flat, after jumping in July due to Amazon’s Prime Day promotional event.

    Despite 11 interest rate hikes from the Federal Reserve intended to cool demand, the US economy remains on strong footing, with American shoppers still doling out cash thanks to a strong job market.

    But after a summer of robust spending, US consumers are facing a number of economic challenges for the rest of the year, including student loan payments restarting and tougher lending standards, which could curb spending.

    “Fitch continues to view the consumer as relatively healthy, supported by low unemployment and somewhat declining goods inflation,” wrote David Silverman, senior director at Fitch Ratings, in an analyst note.

    However, he noted that “headwinds are emerging,” citing lower consumer savings and the resumption of student loan payments this fall.

    The US economy is widely expected to cool in the coming months, and since consumer spending accounts for about two-thirds of economic output, a weaker economy typically means softer spending. But economists don’t expect a recession this year. While Goldman Sachs recently reduced its bet of a US recession, the Wall Street bank still thinks there’s a 15% chance of an economic downturn.

    The job market is also expected to slow, which would include softer wage growth. That could prompt US consumers to pump the brakes on their spending.

    “Slowing labor market gains and softer disposable income growth in the coming months will likely mean ongoing consumer cautiousness. And it appears that consumers are already taking note,” wrote Lydia Boussour, senior economist at EY-Parthenon, in a note.

    However, if inflation slows in the months ahead, that could actually maintain economic activity, since it means consumers have regained some spending power.

    “Encouragingly, falling inflation should continue to provide a tailwind to real wages and avoid a retrenchment in consumer activity,” Boussour added.

    The Consumer Price Index rose 3.7% in August from a year earlier, up from July’s 3.2% rise, largely due to higher gas prices. Economists still expect inflation to cool later in the year, despite volatile energy markets. But gasoline prices are highly visible indicators of inflation, so more pain at the pump could also dampen consumers’ attitudes.

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  • Autoworkers strike: What to watch for as the clock ticks down | CNN Business

    Autoworkers strike: What to watch for as the clock ticks down | CNN Business


    New York
    CNN
     — 

    Time is running out to avert a strike that could shut down America’s unionized auto assembly plants and other manufacturing facilities.

    The United Auto Workers contracts with General Motors, Ford and Stellantis expire at 11:59 pm Thursday. The contracts cover 145,000 UAW members at the three companies.

    If there’s no new deal by the contract expiration, the union has said it will start targeted strikes against a undisclosed number of facilities at each company.

    Here’s what to watch as the clock ticks down:

    It might not take much to virtually shut down the output from all the companies.

    The companies operate a complex network of plants that depend on getting parts from different facilities.

    Slowing or stopping the production of a few engine or transmission plants at each company could be as effective at stopping operations as a full strike at all plants, according to industry experts.

    One engine or transmission location per company might be enough to shut down nearly three-quarters of the US assembly plants, said Jeff Schuster, global head of automotive for GlobalData, an industry consultant.

    “Two plants per company, you can pretty much idle North America,” he said.

    Halting the companies’ assembly lines would likely happen in less than a week that way, Schuster said.

    One advantage of a targeted strike for the union is the potential to save resources and extend a possible walkout. Striking union members are eligible for $500 a week from the union’s strike fund.

    If all 145,000 UAW members among the three automakers were to strike at the same time, it could cost the fund more than $70 million a week, draining the $825 million fund.

    With targeted strikes, it’s possible that the companies will shut down operations and lay off members who are not technically on strike. That could make them eligible to receive state unemployment benefits rather than strike benefits, which could preserve the union’s resources. But there are legal questions about qualifying for unemployment.

    UAW President Shawn Fain told his members in a Facebook Live appearance Wednesday evening that if they are not in one of the plants that the union picks to go on strike, they should stay on the job. He said in that case they would be working under an expired contract, rather than on an extended contract.

    Fain said he would announce at 10 pm Thursday which plants have been selected to go on strike. Among the likely targets, Schuster said, are a Stellantis transmission plant in Kokomo, Indiana, a GM transmission plant in Toledo, Ohio, and a Ford transmission plant in Livonia, Michigan. Those three plants have just over 6,000 UAW members on staff, according to figures available from the companies’ websites.

    But there is still a chance no plants will go on strike and no operations will be disrupted. While Fain warned members that a strike appeared likely – “We’re likely going to have to take action,” he said during his remarks Wednesday – he also said there had been movement at the bargaining tables.

    Fain said that all the automakers had boosted the amount they were offering to raise wages, with Ford now offering a 20% raise during the life of the contract, GM is offering 18% and Stellantis is offering 17.5%, although Fain cautioned that still did not meet the union members’ needs, which had started with a demand for an immediate 20%, and four additional raises of 5% each over the course of a four-year deal.

    And all the automakers issued statements saying they want to reach tentative labor deals before the deadline that would avoid a strike. Despite the difference, there is a chance for an 11th hour settlement or settlements.

    There are separate union contracts at each of the traditional Big Three. That means there could be a tentative labor deal reached at Ford and GM that keeps those workers on the job, while the employees at Stellantis could go out on strike.

    Ford has not had a national strike since 1976 and has not had a strike of any kind at its US plants since 1978.

    In contrast, experts say Stellantis, which builds vehicles under the Jeep, Ram, Dodge and Chrysler brands, could see workers walk off.

    “I think there’s a 99% chance of a strike at Stellantis,” said Art Wheaton, director of labor studies at Cornell University’s Industrial and Labor Relations school in Buffalo.

    If the two sides are close to a deal at the deadline, they could agree to a temporary contract extension for hours or even days. That extension could even go on for months, as with the West Coast ports during negotiations with the International Longshore and Warehouse Union last year and earlier this year.

    Fain has repeatedly said that the 11:59 pm contract expiration is a “deadline, not a reference point.” In past negotiations, the union has sometimes chosen only one automaker to strike, while staying on the job at the other two. Once a deal was reached, the union moved to get the other automakers to accept that “pattern” as the basis for their own contract.

    But Fain insists the union will not follow that playbook this time.

    Sometimes one or both sides will walk away before the final minute before a contract expiration. Although the strike might not start until after the deadline, a breakdown of talks could kill the chance for an 11th-hour deal.

    That’s what happened in bargaining in May between the Writers Guild of America, which represents 11,000 writers, and the Alliance of Motion Picture and Television Producers, which represents major studios and streaming services in the contract negotiations. While the contract was due to end at midnight PDT, the talks ended about three hours earlier.

    Sometimes after talks break down, the parties can return to the table and reach a deal without a strike. That happened in July at UPS, as talks between the company and the Teamsters union ended after a marathon negotiating session in the early hours of July 5. Official talks did not resume for nearly three weeks. But when the two sides met again on July 25, they quickly reached a deal that averted an August 1 strike.

    But a break in talks at any of the automakers at this late date would not be a good sign.

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  • Birkenstock heads for Wall Street in another blow to Europe | CNN Business

    Birkenstock heads for Wall Street in another blow to Europe | CNN Business


    London
    CNN
     — 

    German shoemaker Birkenstock has filed for an initial public offering in New York, becoming the latest European company to choose the United States as the place to raise money on the stock market.

    The iconic footwear brand said in a filing to the US Securities and Exchange Commission Tuesday that it planned to list on the New York Stock Exchange under the symbol “BIRK.” It didn’t disclose its target share price or the proposed date of the listing.

    The Financial Times, citing unnamed sources familiar with the matter, reported Tuesday that Birkenstock was seeking a valuation of more than $8 billion.

    In its filing, the company said revenue in the six months to the end of March had risen 19% from the same period in the 2021-22 financial year but that its net profit had fallen 45%. Birkenstock said inflationary pressures had pushed up the cost of labor and materials.

    The family business traces its origins back to 1774 when church archives mention Johannes Birkenstock, who worked as a cobbler in Langen-Bergheim, Germany.

    In 2021, the Birkenstock family sold most of the company to L Catterton, a private equity firm backed by LVMH — the owner of luxury brands such as Tiffany & Co. and Dior, with brothers Christian and Alex Birkenstock retaining a minority stake.

    The planned IPO marks another milestone for the shoemaker, which joins the ranks of high-profile European companies seeking a public offering across the pond rather than at home. British chip designer Arm is gearing up for a blockbuster IPO on the Nasdaq this week.

    The listings come after an 18-month slump in the IPO market. As the world’s major central banks have jacked up interest rates to combat inflation, the appetite among investors for riskier assets has waned. US grocery delivery firm Instacart has also revealed plans to list on the Nasdaq in the near future, albeit at a significant discount to recent valuations.

    “It’s safe to say the US is leading the [IPO] revival at this stage, and other financial centers, most notably London, have a lot of work to do to compete better going forward,” Craig Erlam, senior market analyst at Oanda, told CNN.

    Susannah Streeter, head of money and markets at Hargreaves Lansdown, added in a note Wednesday: “Birkenstock’s step shows that the IPO engine is whirring back to life after an 18-month downturn. Hopes that the end of the interest rate hiking cycle is in sight [are] also driving more confidence.”

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  • China unveils ‘blueprint’ for Taiwan integration while sending warships around the self-ruled island | CNN

    China unveils ‘blueprint’ for Taiwan integration while sending warships around the self-ruled island | CNN


    Hong Kong
    CNN
     — 

    China on Tuesday unveiled a plan to deepen integration between the coastal province of Fujian and self-governing Taiwan, touting the benefits of closer cross-strait cooperation while sending warships around the island in a show of military might.

    The directive, issued jointly by the Chinese Communist Party’s Central Committee and the State Council, vows to make Fujian a “demonstration zone” for integrated development with Taiwan, and the “first home” for Taiwanese residents and businesses to settle in China.

    The document, hailed as a “blueprint” of Taiwan’s future development by Chinese experts cited in state media, comes at a delicate moment in cross-strait relations as Taiwan gears up for its presidential election in January.

    It also comes as China continues to ramp up military pressure on Taiwan, a vibrant democracy of 24 million people that Beijing’s ruling Communist Party claims as its territory — despite never having controlled it.

    Ahead of Beijing’s release of its integration plan, a Chinese aircraft carrier and around two dozen Chinese warships were spotted gathering in waters near Taiwan this week, according to Taiwanese authorities.

    China has long taken a carrot and stick approach to Taiwan, threatening it with the prospect of military invasion while offering opportunities for business and cultural exchanges to those it believes are more amenable to Beijing’s point of view.

    Given the extent to which cross-strait ties have frayed in recent years, it remains unclear how receptive those in Taiwan will be to China’s sweeping proposal.

    On Wednesday, Wang Ting-yu, a Taiwanese lawmaker from the ruling Democratic Progressive Party, said the integration plan was “ridiculous.”

    “China should think about how it can take care of its bad debts, but not how it can conduct united front work against Taiwan,” Wang said in a video message, referring to government-affiliated efforts to advance Beijing’s goals overseas.

    The concept of turning Fujian into a zone for integrated development with Taiwan first appeared in China’s official document in 2021, but it did not provide any details at the time.

    In June, when a senior Chinese leader raised the integration plan at a forum, Taiwan’s Mainland Affairs Council called the proposal “meaningless” and “futile,” saying it was not in line with Taiwan’s public expectations and “belittles” Taiwan.

    CNN has reached out to Taiwan’s Mainland Affairs Council for comment.

    In the directive, Beijing vows to improve the environment for Taiwanese firms to do businesses in Fujian, deepen industrial and capital cooperation, and encourage Taiwanese companies to list on Chinese stock exchanges.

    In a first, Taiwanese companies will be allowed to invest in and set up radio and television production companies in Fujian in a pilot program.

    The directive also seeks to attract Taiwanese workers and families to settle in Fujian. It vows to enhance social welfare programs to make it easier for Taiwanese people to live and work in the province – including buying property, and promises equal treatment for Taiwan’s students to enroll in public schools.

    Chinese observers noted “the document is equivalent to outlining the future development blueprint of Taiwan island, which is expected to gain a broader driving force and development prospect by integrating with Fujian,” the state-run Global Times said.

    Fujian, a province of 40 million people on the western side of the Taiwan Strait, is the closest to Taiwan both geographically and culturally.

    Many Taiwanese are descendants of Fujian immigrants who arrived in waves over the centuries, bringing with them the dialect, customs and religion that formed the backbone of the traditional culture among Taiwan’s majority Han population.

    China’s ruling Communist Party has long attempted to use the geographic, historic and cultural proximity between Fujian and Taiwan as an argument for closer economic and social integration – and eventual unification – with the island.

    A particular focus of Beijing’s integration efforts falls on Taiwan’s outlying islands of Kinmen and Matsu, which are located much closer to Fujian than Taiwan and have shared the strongest ties with the mainland historically.

    In Tuesday’s directive, Beijing pledges to further speed up integration between the city of Xiamen and Kinmen – which are only a few miles apart.

    It vows to explore cooperation on infrastructure projects between the two cities, which will allow electricity and gas to be transported from Xiamen to Kinmen, and to connect the two cities with a bridge. Kinmen residents will also be able to enjoy the same treatment as local residents in Xiamen, according to the plan.

    Similar integration measures are also laid out for the city of Fuzhou and Matsu.

    To some residents of Kinmen, the plans to promote greater connectivity may be appealing. This year, a cross-party alliance of eight local councilors in Kinmen proposed to build a bridge to Xiamen to boost economic ties, as part of a wider proposal to turn Kinmen into a demilitarized zone, or so-called “peace island.”

    Sitting on the front line between Taiwan and China, Kinmen had faced numerous amphibious assaults and shelling by the Chinese military in the years following the Chinese civil war.

    The councilors’ proposal envisages removing all of Taiwan’s troops and military installations from the islands and turning Kinmen into a setting for Beijing-Taipei talks aimed at “de-escalating tensions.”

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