Robots Pick Up More Work at Busy Factories
Workplace robot orders jumped by 40% during this year’s first quarter; ‘Before, you could throw people at a problem’
At Athena Manufacturing in Austin, Texas, the company has spent more than $800,000 on robots, including this robotic welder.
Robots are turning up on more factory floors and assembly lines as companies struggle to hire enough workers to fill rising orders.
Orders for workplace robots in the U.S. increased by a record 40% during the first quarter compared with the same period in 2021, according to the Association for Advancing Automation, the robotics industry’s trade group. Robot orders, worth $1.6 billion, climbed 22% in 2021, following years of stagnant or declining order volumes, the group said.
Rising wages and worker shortages, compounded by increases in Covid-19-related absenteeism, are changing some manufacturers’ attitudes about robotics, executives said. “Before, you could throw people at a problem instead of finding a more elegant solution,” said Joe Montano, chief executive officer of Delphon Industries LLC, a maker of packaging for semiconductors, medical devices and aerospace components.
Delphon, based in Hayward, Calif., lost 40% of its production days during January when the coronavirus spread through its workforce. The disruption accelerated the company’s purchase of three additional robots earlier this year, Mr. Montano said.
Manufacturers in the U.S., where workers typically have been abundant and wages stable, have been slower to embrace robotics than those in some other industrialized countries. The number of robots deployed in the U.S. per 10,000 workers has traditionally trailed countries such as South Korea, Japan and Germany, according to the International Federation of Robotics.
The use of industrial robots in North America for years had been concentrated in the automotive industry, where robots took on repetitive tasks such as welding on assembly lines. While auto makers and manufacturers of auto components accounted for 71% of robot orders in 2016, their share declined to 42% in 2021, the automation association said. Meanwhile, robots made inroads into other sectors including food production, consumer products and pharmaceuticals. Executives said improved capabilities are allowing robots to be programmed for more-complex tasks requiring a mixture of strength and nimbleness.
At Athena Manufacturing LP, a fabricating and machining company for metal equipment used in the semiconductor, energy and aerospace industries, Chief Financial Officer John Newman said customers have been ramping up orders, but Athena has struggled to find enough workers to staff a second weekday shift and a weekend shift.
The Austin, Texas, company purchased seven robots in the past 18 months, including one that grinds down the welds on steel frames for holding semiconductor equipment. Mr. Newman said Athena has spent more than $800,000 on robots, including about $225,000 for the grinding robot alone. The investments aimed to increase Athena’s capacity to handle orders, he said, more than lowering costs.
Grinding the welds on a rack typically took an employee about three hours to complete, but the robot is now able to do it in 30 minutes, he said.
Mr. Newman said the robot can apply more force with a grinding tool than a human can, reducing the amount of time needed to create a smooth welded joint. “The robot doesn’t stop to rest, and that’s understandable for a human because it’s a hard job,” he said.
Acquiring the grinding robot took Athena about four years of research and engineering, Mr. Newman said, including help from 3M Co., which supplies the abrasive materials used in the grinding tool wielded by the robot. Athena has deployed six other robots, four of which weld the racks and two that load metal into machines. Most of these off-the-shelf robots were delivered in a few weeks and can be programmed remotely from a phone app, he said.
“The robots are becoming easier to use,” said Michael Cicco, chief executive officer of Fanuc America, a unit of Japan’s Fanuc Corp. , a major supplier of industrial robots. “Companies used to think that automation was too hard or too expensive to implement.”
Daron Acemoglu, an economics professor at Massachusetts Institute of Technology, said factories’ increasing reliance on automation will lead to an oversupply of human labor that will drive down wages in the years ahead, unless other U.S. industries can absorb displaced manufacturing workers.
“Automation, if it goes very fast, can destroy a lot of jobs,” Mr. Acemoglu said. “The labor shortage is not going to last. This is temporary.”
At Delphon, Mr. Montano said the company started leasing robots about four years ago to reduce the initial expense. The company now has 10 robots, including four so-called cobots that operate side-by-side with employees.
Delphon’s TouchMark subsidiary applies printing to the surfaces of medical devices, such as catheters. Cobots now are turning and holding the devices while a worker operates a printer that applies the ink to the device. Mr. Montano said two cobots reduced a three-person printing crew to one, saving the company $16,000 a month in expenses.
Two other Delphon cobots assemble packaging for shipping semiconductors and other fragile cargo, which are shipped in plastic boxes. Robots are now being used to clean the 2-inch-by-2-inch boxes with jets of air, dispense a bead of glue inside them and then install layers of mesh and the company’s silicone film padding.
Mr. Montano said Delphon is scaling up robots to work on larger-size boxes. The robots have improved the company’s productivity, he said, resulting in shipments increasing about 15% in 2021 and 2020, respectively, without increasing the company’s workforce of 200 people.
“We haven’t reduced any head count, but we reassigned them to where we needed people,” he said.
Brewing Up a Couture-like Coffee Brand in Paris
Momus is the brainchild of fashion and luxury executive Lionel Giraud.
Boxes of Momus coffee fill a bookcase at the brand's launch event in Paris.
People prize Parisian cafés for their history, charm and ambience — not necessarily their caffeinated beverages, which are typically unremarkable and frequently bitter and burnt-tasting.
Which might explain why hipsters endure lines at places like Noir, % Arabica and Ten Belles, among the indie coffee roasters that have sprung up in the French capital in recent years, staffed with groovy-looking young baristas pouring smoother brews.
Now Momus, an upstart French coffee brand, seems poised to further disrupt the scene with its couture-like concept. Inside chic white and color-coded boxes the size of paperbacks are blends created by one of France’s most decorated roasting specialists, by a rotating cast of creative personalities — or one crafted to your individual taste.
Momus is the brainchild of Lionel Giraud, a veteran of the fashion industry perhaps best known for his decade-long stint as artistic director of Chaumet. Having also worked in Cartier’s watch division, fashion house Courrèges, shoe chain André and eyewear firm Vuarnet, he brings a wealth of luxury and brand-building expertise to bear on a long-neglected aspect of France’s renowned culinary scene.
“Even when you go to a three-star restaurant, you are likely to find a menu with 30 pages or more for wine, maybe 10 pages for tea, and then at the end you have one line: coffee,” he says. “The average level of the coffee we have to drink is really poor. It bothers me when you have to pay 20 euros for a coffee and you don’t even know where it comes from.
Lionel Giraud
COURTESY OF MOMUS
“Coffee is not treated as it should be, especially since it’s the number-two drink in the world after water,” he adds. “Also, coffee is a not only a drink, it’s a lifestyle.”
While Giraud and his friends long toyed with the idea of opening a coffee shop, he turned to the project in earnest during pandemic lockdowns, with the ultimate goal of having a beautiful box of Momus coffee supplant Diptyque candles or a bottle of Champagne as the gift of choice to bring when someone invites you over for dinner.
While he swapped diamond tiaras for basic beans, Giraud says he strives to treat the raw material for Momus the same way, asking himself: “How can we make something very special, very delicate, very high-end?”
His concept for Momus is similar to the way Frédéric Malle markets perfume, adopting the language of French publishing houses and inviting notable talents to write their own recipe for the perfect blend. “It’s a coffee collection for collectors,” Giraud says.
He launched Momus last month with “editions” by chef Stéphane Abby, perfumer Fabrice Pellegrin and fashion curator Olivier Saillard, whose “Chapelle des Bois” blend evokes childhood memories of reading the Sunday paper with his mother over a big steaming pot. Giraud plans to invite a sommelier, novelist, painter and musician for future coffee editions.
There are also nine blends credited to Daniela Capuano, who in 2019 was named Meilleur Ouvrier de France in torréfaction, the French word for coffee roasting. The unique and prestigious award for craftspeople, initiated in 1924, only recently added the coffee category.
Daniela Capuano
COURTESY OF MOMUS
For Momus, Capuano sourced beans from prestigious environmentally committed farms in Brazil, Indonesia, Yemen, Panama, Honduras and beyond, roasting them to accentuate notes of caramel, lemongrass, peach, jasmine, chocolate, cinnamon, mango and rose.
Sustainability is intrinsic to Giraud’s concept, with all coffee traceable to a specific plot of land on each farm. “From bean to cup,” he calls it, echoing the farm-to-table movement in restaurants.
To be sure, consumers seem to be turning their backs on wasteful coffee capsules, Giraud says, pointing to a spike in French sales of coffee grinders and coffee makers that use whole beans or ground coffee, the only formats Momus sells.
While his generation of coffee drinkers was weaned on espresso, often excessively roasted to mask defects in the beans, Giraud says that Gen Z and Millennials favor “slow coffee” and long brews that can better exalt the large palette of subtle flavors and aromas fine beans can offer.
For starters, Momus is sold exclusively on its web site, where users can book a free 30-minute video consultation with its in-house barrista, who is stationed in Bordeaux; watch tutorials on using the six main contraptions to brew coffee; read up on all the ready-made blends; put together a selection of 50-gram samples, just like perfume, or create a bespoke blend, with a 400-gram minimum order priced at 45 euros.
The coffee packages resemble novels.
COURTESY OF MOMUS
“We want to be high-end but customer-driven,” Giraud explains. “It’s a question of education, we’re here to educate new generations.…It is really exciting to try to change something which is deeply ingrained in our culture.”
Momus is named after the mythic 19th-century café near the Louvre where the likes of Charles Baudelaire and Gustave Courbet hobnobbed with other writers and artists. It’s one of the key venues in Giacomo Puccini’s opera “La Bohème.”
Giraud hopes to open a flagship Momus store and café in Paris by early next year, and he’s developing a pop-up concept he hopes to install in bookshops and art galleries, in addition to department store gourmet departments.
Gucci Town Arrives on Roblox
Gucci Town is home to a broad range of activities and Vault, which will showcase some of Gucci's latest product drops and collaborations.
Gucci Town on Roblox
Gucci Town is a permanent destination that interacts with the codes of the house and expresses creative director Alessando Michele’s vision. This follows on the heels of several other immersive experiences from the brand, including Gucci Garden in May 2021.
“We’ve been experimenting with Roblox for years now and in May, 2021, we unveiled the first Gucci-themed immersive experience: Gucci Garden. For two weeks only, visitors had the chance to wander in a virtual counterpart of the Archetypes exhibition in Florence. Part of the success of that experience — which gained 20 million visitors and was recently awarded with a Webby Award — was its ability to build a sense of community around the brand on Roblox, thanks to our partnership with up-and-coming content creators and Gucci’s virtual goods instantly becoming signifiers of belonging to a group of users with shared values,” said Nicolas Oudinot, executive vice president, new businesses at Gucci and Gucci Vault chief executive officer.
“It is a place to reunite with like-minded individuals sharing a passion for self-expression, and to set up open dialogues between them and Gucci,” he said.
Inside Gucci Town.
COURTESY SHOT.
Gucci Town features a slew of activities that will evolve through time. Visitors walking from the central piazza to Mini Game Heights will find a portal transporting them to an arena of Gucci-inspired competitions, such as Tile Takeover or Flashlight Tag. Heading into Creative Corner, they can discover the works of a visiting artist and be inspired to create compositions of their own.
A view inside Gucci Town.
COURTESY SHOT.
Within the virtual Vault Plaza, community members will find an exhibition space inspired by the conversations started within Vault, the house’s experimental concept store. Conceived as its virtual counterpart on Roblox, it will showcase some of Gucci’s latest product drops and collaborations. Around the bend is the Gucci Shop, a boutique where visitors can purchase digital Gucci items to collect or to outfit Roblox avatars, including the new archive-inspired Gucci Blondie bags designed by Michele and limited-edition collectibles. The digital fashion items make the most of the recently launched Roblox “Layered Clothing” technology for hyper-realistic 3D garments that fit any avatar body type.
The Vault in Gucci Town.
COURTESY SHOT.
According to Christina Wootton, vice president of global partnerships at Roblox, the “Layered Clothing” technology closely mimics the way apparel fits and drapes in the real world. Shirts, dresses, sweaters, jackets, pants and shoes created with Layered Clothing can now also be worn in layers that affect and interact with each other in lifelike ways and are crafted with the precision of Hollywood CGI (computer-generated imagery). “The clothing instantaneously responds to infinite combination of body parts, movements and virtual worlds on Roblox. This technology was created to empower digital fashion designers to take their creative expression to the next level and enable limitless self-expression for people within the metaverse,” said Wootton.
The last piece is Power-up Place, a café where community members can take a break and come together with friends to meet and interact with others. As visitors immerse themselves in the various activities within Gucci Town, they are rewarded with the GG Gems, the in-experience currency they can use to purchase power-ups (an object in a video game that instantly adds to the life, armor, strength or score of a player), as well as virtual Gucci items. Each space within Gucci Town will be updated regularly with new content in conversation with the house’s trajectory into the future.
A view of Gucci Town.
COURTESY SHOT.
Products and content were developed with independent content creators from the Roblox community such as Rook Vanguard, Bunnexh and Lirn.
Vault serves as a meeting place and its constantly changing offering includes a curation of vintage Gucci pieces alongside exclusive capsule collections, limited-edition styles and other items from a selection of brands. Web3-based initiatives including NFTs are also on the platform’s virtual shelves as objects from different eras with diverse origins.
Asked what excites Gucci about the metaverse, Oudinot told WWD, “As the metaverse continues to be defined and despite the different meanings that the concept has, we all agree it is a medium making our online interactions more varied, customized and immersive. Inclusivity is a key value to make this possible. In that sense, it is built on an adjacent community to fashion. The function of fashion has always been first and foremost symbolic, empowering individuals to express themselves and project their identities. In a digital environment based on users’ co-presence, there’s a wellspring of opportunities for those sharing our mind-set, as aesthetic is crucial for individuals to create their digital persona, reflecting their taste, their ambitions and their visual horizons far beyond the limitation of the physical world.”
In discussing whom they are aiming Gucci Town toward, Oudinot said, “Gucci Town is first and foremost a virtual piazza, opening its doors to the entire Roblox community. It’s a place inviting its visitors to have a shared virtual experience which can be explored to find inspirations and entertainment in different forms, suitable for a varied audience. Our focus is primarily on building something meaningful, amplifying the voices of talents within the community. This allows us to translate Alessandro Michele’s universe in unexpected ways, adding elements to the multidisciplinary and inclusive approach the brand is now renowned for.”
Wootton said Gucci is the first luxury fashion brand to create a persistent experience on Roblox and utilize the platform as its immersive 3D social channel, building and creating a community it can engage all year long.
Gucci Town is the brand’s fifth collaboration with Roblox. The first step on the platform was commissioning virtual items to its community designers Rook Vanguard and cSapphire, she said. Then there was the Gucci Garden experience open for two weeks in May 2021, and the first-of-its-kind “Achille Lauro Superstar” experience earlier this year, as well as a collaboration with the British Fashion Council on The Fashion Awards.
According to Wootton, more than 50 million people gather daily on Roblox to socialize, create, play, learn, share adventures and expand friendships. She noted that one in five of Roblox’s daily active users updated their avatar on any given day in 2021, expressing themselves through body shapes, sizes, a variety of skin tones, accessories and clothing. “This avatar then becomes a digital extension of the user and empowers them to be whoever they want to be in the metaverse, on Roblox,” said Wootton.
Wootton said they are seeing more and more brands setting up a permanent presence on Roblox to engage new and existing audiences. She said that’s because they are learning that people in the Roblox community want to engage with their favorite brands, artists and celebrities all the time, not just when they have something to offer — similar to other social channels.
Last December, Tommy Hilfiger partnered with eight user-generated content designers from the Roblox community to create and promote a Tommy x Roblox Creators collection, and Ralph Lauren created a Winter Escape holiday-themed experience on Roblox that featured Virtual Polo Shops where users could style their avatars and make purchases. Nike has also worked with Roblox to create Nikeland, patterned after its world headquarters. Companies like Alo Yoga and Forever 21 have entered the metaverse with Roblox, as well.
Gucci Town Arrives on Roblox
Gucci Town is home to a broad range of activities and Vault, which will showcase some of Gucci's latest product drops and collaborations.
Gucci Town on Roblox
Gucci Town is a permanent destination that interacts with the codes of the house and expresses creative director Alessando Michele’s vision. This follows on the heels of several other immersive experiences from the brand, including Gucci Garden in May 2021.
“We’ve been experimenting with Roblox for years now and in May, 2021, we unveiled the first Gucci-themed immersive experience: Gucci Garden. For two weeks only, visitors had the chance to wander in a virtual counterpart of the Archetypes exhibition in Florence. Part of the success of that experience — which gained 20 million visitors and was recently awarded with a Webby Award — was its ability to build a sense of community around the brand on Roblox, thanks to our partnership with up-and-coming content creators and Gucci’s virtual goods instantly becoming signifiers of belonging to a group of users with shared values,” said Nicolas Oudinot, executive vice president, new businesses at Gucci and Gucci Vault chief executive officer.
“It is a place to reunite with like-minded individuals sharing a passion for self-expression, and to set up open dialogues between them and Gucci,” he said.
Inside Gucci Town.
COURTESY SHOT.
Gucci Town features a slew of activities that will evolve through time. Visitors walking from the central piazza to Mini Game Heights will find a portal transporting them to an arena of Gucci-inspired competitions, such as Tile Takeover or Flashlight Tag. Heading into Creative Corner, they can discover the works of a visiting artist and be inspired to create compositions of their own.
A view inside Gucci Town.
COURTESY SHOT.
Within the virtual Vault Plaza, community members will find an exhibition space inspired by the conversations started within Vault, the house’s experimental concept store. Conceived as its virtual counterpart on Roblox, it will showcase some of Gucci’s latest product drops and collaborations. Around the bend is the Gucci Shop, a boutique where visitors can purchase digital Gucci items to collect or to outfit Roblox avatars, including the new archive-inspired Gucci Blondie bags designed by Michele and limited-edition collectibles. The digital fashion items make the most of the recently launched Roblox “Layered Clothing” technology for hyper-realistic 3D garments that fit any avatar body type.
The Vault in Gucci Town.
COURTESY SHOT.
According to Christina Wootton, vice president of global partnerships at Roblox, the “Layered Clothing” technology closely mimics the way apparel fits and drapes in the real world. Shirts, dresses, sweaters, jackets, pants and shoes created with Layered Clothing can now also be worn in layers that affect and interact with each other in lifelike ways and are crafted with the precision of Hollywood CGI (computer-generated imagery). “The clothing instantaneously responds to infinite combination of body parts, movements and virtual worlds on Roblox. This technology was created to empower digital fashion designers to take their creative expression to the next level and enable limitless self-expression for people within the metaverse,” said Wootton.
The last piece is Power-up Place, a café where community members can take a break and come together with friends to meet and interact with others. As visitors immerse themselves in the various activities within Gucci Town, they are rewarded with the GG Gems, the in-experience currency they can use to purchase power-ups (an object in a video game that instantly adds to the life, armor, strength or score of a player), as well as virtual Gucci items. Each space within Gucci Town will be updated regularly with new content in conversation with the house’s trajectory into the future.
A view of Gucci Town.
COURTESY SHOT.
Products and content were developed with independent content creators from the Roblox community such as Rook Vanguard, Bunnexh and Lirn.
Vault serves as a meeting place and its constantly changing offering includes a curation of vintage Gucci pieces alongside exclusive capsule collections, limited-edition styles and other items from a selection of brands. Web3-based initiatives including NFTs are also on the platform’s virtual shelves as objects from different eras with diverse origins.
Asked what excites Gucci about the metaverse, Oudinot told WWD, “As the metaverse continues to be defined and despite the different meanings that the concept has, we all agree it is a medium making our online interactions more varied, customized and immersive. Inclusivity is a key value to make this possible. In that sense, it is built on an adjacent community to fashion. The function of fashion has always been first and foremost symbolic, empowering individuals to express themselves and project their identities. In a digital environment based on users’ co-presence, there’s a wellspring of opportunities for those sharing our mind-set, as aesthetic is crucial for individuals to create their digital persona, reflecting their taste, their ambitions and their visual horizons far beyond the limitation of the physical world.”
In discussing whom they are aiming Gucci Town toward, Oudinot said, “Gucci Town is first and foremost a virtual piazza, opening its doors to the entire Roblox community. It’s a place inviting its visitors to have a shared virtual experience which can be explored to find inspirations and entertainment in different forms, suitable for a varied audience. Our focus is primarily on building something meaningful, amplifying the voices of talents within the community. This allows us to translate Alessandro Michele’s universe in unexpected ways, adding elements to the multidisciplinary and inclusive approach the brand is now renowned for.”
Wootton said Gucci is the first luxury fashion brand to create a persistent experience on Roblox and utilize the platform as its immersive 3D social channel, building and creating a community it can engage all year long.
Gucci Town is the brand’s fifth collaboration with Roblox. The first step on the platform was commissioning virtual items to its community designers Rook Vanguard and cSapphire, she said. Then there was the Gucci Garden experience open for two weeks in May 2021, and the first-of-its-kind “Achille Lauro Superstar” experience earlier this year, as well as a collaboration with the British Fashion Council on The Fashion Awards.
According to Wootton, more than 50 million people gather daily on Roblox to socialize, create, play, learn, share adventures and expand friendships. She noted that one in five of Roblox’s daily active users updated their avatar on any given day in 2021, expressing themselves through body shapes, sizes, a variety of skin tones, accessories and clothing. “This avatar then becomes a digital extension of the user and empowers them to be whoever they want to be in the metaverse, on Roblox,” said Wootton.
Wootton said they are seeing more and more brands setting up a permanent presence on Roblox to engage new and existing audiences. She said that’s because they are learning that people in the Roblox community want to engage with their favorite brands, artists and celebrities all the time, not just when they have something to offer — similar to other social channels.
Last December, Tommy Hilfiger partnered with eight user-generated content designers from the Roblox community to create and promote a Tommy x Roblox Creators collection, and Ralph Lauren created a Winter Escape holiday-themed experience on Roblox that featured Virtual Polo Shops where users could style their avatars and make purchases. Nike has also worked with Roblox to create Nikeland, patterned after its world headquarters. Companies like Alo Yoga and Forever 21 have entered the metaverse with Roblox, as well.
Putin Says Russia Open to More Talks With Ukraine
Ukraine’s troops might have to abandon key eastern stronghold to avoid encirclement, regional governor says
KYIV, Ukraine—Russian President Vladimir Putin told his German and French counterparts that Moscow was open to resuming negotiations with Ukraine, but that the West’s supply of weapons to the Kyiv government could exacerbate the crisis, the Kremlin said Saturday.
The comments came a day after U.S. officials signaled that the Biden administration is likely to approve the transfer of advanced, long-range rocket systems to Ukraine that the Kyiv government says are necessary to stop Russian advances in the Donbas region in the country’s east, where fighting has been intense.
Mr. Putin, in a phone call with French President Emmanuel Macron and German Chancellor Olaf Scholz, “confirmed the openness of the Russian side to the resumption of dialogue,” the Kremlin said.
But it said Mr. Putin cited the “dangerous nature of the ongoing pumping of Western weapons to Ukraine” and warned of “the risks of further destabilization of the situation and aggravation of the humanitarian crisis.”
Mr. Scholz and Mr. Macron initiated the conference call, which took place on Saturday and lasted around 80 minutes, the German chancellery said. The two European Union leaders asked Mr. Putin to start direct talks with Ukrainian President Volodymyr Zelensky and urged him to immediately end hostilities and withdraw Russian troops from Ukraine, the chancellery said.
The U.S. and allies have already supplied Ukraine with artillery, but it is insufficient on its own to counter Russian firepower, Ukrainian commanders say. The U.S. is now expected to provide multiple-launch rocket systems, or MLRS batteries, and a second type of mobile artillery launcher that can fire miles farther than any system now in Ukraine’s control.
News of the potential weapons transfer, and of Mr. Putin’s warning, came as Russia made fresh advances in the Donbas region.
Russian gains in the strategically important city of Severodonetsk might force Ukrainian troops to withdraw, a Ukrainian official said. The city is among the last major Ukrainian strongholds in Luhansk, which together with Donetsk makes up Ukraine’s eastern Donbas region. Moscow has focused its military campaign on the region after pulling its forces out of central Ukraine earlier in the war.
Ukrainian officials denied that Russians had encircled the Severodonetsk but said the Ukrainian forces might soon be forced to retreat while there was still a path out.
“The Russian army is destroying the city by shelling it with tanks, artillery, mortars,” Serhiy Haidai, the governor of Luhansk, said on Ukrainian television Saturday morning.
The previous night, he said Russian forces had taken the Myr resort complex on the northern edge of Severodonetsk, but he expected Ukrainians could defend the city for at least a few more days. “In order not to be surrounded, our troops may be ordered to retreat,” he said.
Also on Saturday, Russia shelled the southern port city of Mykolayiv, according to posts from Mayor Oleksandr Senkevych on social media. He said an unknown number of civilians had been killed in the attack.
Mr. Haidai described a dire situation for civilians in Severodonetsk. The road out of the city toward Ukrainian-held territory was no longer passable for trucks, he said, and cars were being shot at as they drove. Almost all residents were in basements or bomb shelters, he said, with no electricity, gas or running water. Most of the city’s 100,000 prewar residents have already fled.
Oleksandr Stryuk, the mayor of Severodonetsk, told Radio Liberty on Friday night that 90% of the residential buildings in the city had been damaged or destroyed, but many residents were afraid to leave because the only path out was so dangerous. Two-thirds of the city’s perimeter was controlled by Russian forces, he said.
“There is continuous shelling of residential neighborhoods,” he said. “There are casualties among the civilian population.”
Russia is taking steps to bolster troop levels for its military campaign, which Western military officials say has left its armed forces with heavy casualties.
Mr. Putin on Saturday signed a law annulling the upper age limit for military enlistment. Only Russians ages 18 to 40 and foreigners ages 18 to 30 previously were allowed to enlist. The new law would make it easier to recruit specialists, including those with medical and engineering expertise, Russian legislators have said.
The Kremlin said that Mr. Putin, in his call with the French and German leaders, also addressed the food shortages and price increases resulting from Russia’s blockade of Black Sea ports. Mr. Putin said that Russia was ready to find options to ensure the unimpeded export of Ukrainian grain from the ports, the Kremlin said.
The Russian leader faulted the “erroneous economic and financial policies of Western countries, as well as the anti-Russian sanctions they imposed” as the main reason for disruptions to food supplies, the Kremlin readout said.
An increase in the supply of Russian fertilizers and agricultural products would also help reduce strains on the global food market, but this would require “the lifting of the relevant sanctions restrictions,” the Kremlin said.
The Biden administration is expected to announce as early as next week that it will supply Ukraine with MLRS batteries, U.S. officials said Friday. Ukrainian officials say they urgently need the longer-range multiple-launch rocket systems to hold the ground in Donbas.
The administration approved $6 billion in direct military assistance to Ukraine as part of a $40 billion package earlier this month, but it has been reluctant to include the rocket systems in the next tranche of weapons supplies over concerns of provoking Russia.
It couldn’t be determined how many of the new systems the U.S. would provide, but one U.S. official said they could arrive in Ukraine within weeks. The U.S. also has said Ukrainian forces would need at least a week of training to use them.
Speaking to Naval Academy graduates on Friday in Annapolis, Md., President Biden said Mr. Putin wasn’t only trying to take over Ukraine, “he’s literally trying to wipe out the culture and identity of the Ukrainian people, attacking schools, nurseries, hospitals, museums with no other purpose than to eliminate a culture.’’
Utility shut-offs loom after pandemic freezes expire for US households
Electric and gas accounts in arrears build up as higher energy prices strain budgets
The coronavirus pandemic and rising energy prices have left millions of US households in arrears on their electric and gas bills, and some are now about to lose service as moratoria on utility shut-offs expire.
More than 20mn households were behind on utility payments worth $23bn at the end of February, nearly double the number behind in 2019, according to the National Energy Assistance Directors Association, a group representing state agencies that disburse government payments to low-income energy consumers.
The number of accounts in arrears built up during the pandemic when some state regulators and utilities froze disconnections for non-payment. Customers received additional protection in the winter, when states regularly ban shut-offs.
The moratoria largely expired by May 1, however. NEADA predicts more than 2mn households will be disconnected over the next few months.
“We see a wave of shut-offs coming because we weren’t prepared for this much debt,” said NEADA executive director Mark Wolfe.
Utility gas prices are up 23 per cent from last year, according to April’s consumer price index. Electricity prices, driven in part by the cost of wholesale gas fuel purchased by power plants, are up 11 per cent. Higher energy costs are helping to drive inflation that has been straining household budgets.
One in five US households could not pay their energy bill at least once in the past year, according to last month’s Household Pulse Survey from the US Census Bureau. Nearly a third of households reported forgoing expenses such as food and medicine to pay their utility bills.
Korie Bosley, a single mother in Michigan, received a shut-off notice last month from DTE Energy when her bill doubled and she was unable to pay. Ineligible for state assistance, Bosley reached out to a private organisation, the Here to Help Foundation, to avoid a shut-off. According to the Michigan Public Service Commission, 1mn accounts worth $346mn were in arrears as of April 2022.
“I’m just doing what I can to make ends meet on a day-to-day basis,” Bosley said. DTE did not respond.
In financial filings, utility companies acknowledged financial impacts from customers who are behind on their bills.
The New Jersey utility owned by Public Service Enterprise Group reported it will take “several years” for its cash flow and levels of unpaid accounts to return to normal after shut-off moratoria in the state, according to a securities filing.
Duke Energy, a North Carolina-based utility operator, observed a “significant increase” in arrears and expected an increase in charge-offs.
“From the beginning of the pandemic, we took swift and unprecedented action to assist customers by voluntarily suspending disconnections for non-payment,” the company said. Disconnections were down 41 per cent in 2021 compared to 2019.
Utilities say that disconnections are a last resort and many efforts are made to assist families before a shut-off.
“Today, customers have more flexible payment options and programs than ever, and these programs are helping customers to manage the cost increases that are resulting from rising natural gas prices,” said the Edison Electric Institute, a trade group for US investor-owned utilities.
Last month, President Joe Biden announced an additional $385mn in Low Income Home Energy Assistance Program funding. Over $8.3bn was provided in LIHEAP assistance this year, the largest yearly investment in the program to date. Advocates say it’s not sufficient to cover demand, and some households face bureaucratic barriers when trying to use the program.
China fails to work out a plan to ease its economic malaise
Covid lockdowns strangle growth but there seems little officials can do to surmount the challenges
Premier Li Keqiang issued a bleak warning on Wednesday about the perilous state of China’s economy, telling more than 100,000 officials in a nationwide video conference that they urgently needed to boost growth, reduce unemployment and secure the summer grain harvest.
But the lack of any concrete new initiatives from the central government and muted state media coverage of the event suggest that there is still no easy way out of the economic crisis triggered by president Xi Jinping’s controversial zero-Covid policy. The strategy has brought commercial activity to a complete or near halt in dozens of cities over the past three months.
Just a few hours after Li spoke, Chinese state television’s main evening news broadcast buried a brief and much softened version of his remarks in the middle of its bulletin. It led instead with a long item about Chinese police officers — who pride themselves on being “the handle on the Chinese Communist party’s knife” — heaping praise on Xi.
The footage showed more than 1,400 uniformed officers applauding Xi and carried a clear message for cadres across the country that mounting concerns about the world’s second-largest economy would not supplant pandemic control as the party’s priority.
“After watching the news, it feels pretty hopeless,” said one government official in eastern Jiangsu province, who is trying to help revive the local economy. “There was much more coverage of everyone applauding [Xi].”
Li and Yi Gang, the central bank governor, deepened local officials’ malaise when they implied that there was relatively little that the government was willing or able to do to help them, even though the economic challenges, according to the premier, were “to a certain extent greater than those experienced in 2020”, when the Covid pandemic erupted out of central Hubei province.
In the first quarter of 2020, China’s economy contracted 6.9 per cent year-on-year, the first officially recognised annual decline in more than 40 years.
Li even raised the spectre of potential food shortages. While most international attention has focused on Shanghai’s strict measures, which began in late March and have only begun to ease gradually over the past week, lockdowns and regional transport restrictions have also affected large agricultural regions, such as Jilin province.
“Harvesting absolutely cannot stop,” he told the officials, according to an off-record transcript of Wednesday’s emergency meeting that was confirmed by three people briefed on the premier’s comments. “[Food security] is a fundamental responsibility of local party [cadres] and governments. If you cannot stabilise [agricultural] production, you will be held accountable.”
Li and Yi, however, offered only a modest expansion of a corporate tax relief initiative and new policy loans of Rmb800bn ($118.7bn), an amount equivalent to just 0.7 per cent of gross domestic product.
During the depths of the global financial crisis in 2008 and 2009, Beijing unleashed a stimulus effort equivalent to 13 per cent of annual economic output.
“Recently, a few provinces submitted reports to the State Council [China’s cabinet] asking to borrow money,” Li said. “[But current] transfer payments to local governments are the largest in history . . . So let me give you the bottom line, the rest depends on you local governments.”
Analysts argue that in areas where strict lockdowns have sapped demand from companies and consumers, more bank credit is about as effective as — according to the analogy attributed to John Maynard Keynes — “pushing on a piece of string”.
“Without the central government stepping up, the upside for fiscal support is capped,” said Trey McArver at Trivium, a Beijing-based consultancy. “A V-shaped recovery is extremely unlikely.”
David Zhang, who owns a small market research firm in Beijing, said that “cheap loans for SMEs won’t help — my problem is a lack of business and rising operating costs”.
Zhang, whose revenues have fallen by more than 50 per cent over recent months, added that “the situation is worse than in 2020”.
Many small business owners also complain that Li’s tax rebates often come with conditions that make them impossible for struggling small and medium-sized enterprises to claim.
In some regions, cash-strapped local tax bureaus will only give one party in any given transaction tax relief, which is usually grabbed by larger state-owned enterprises and foreign investors at the expense of their smaller, and predominantly private sector, SME suppliers.
“Most of our clients are bigger than us and there is no way they will give up tax benefits to help us,” said Li Bin, who runs a small advertising company in Nanjing, near Shanghai. “We are too small to make our clients sacrifice for us.
“Business is very bad.”
Weekend Papers Summary
NEW YORK TIMES
-Officials described a harrowing series of 911 calls, including some from children inside Robb Elementary in Uvalde. The National Rifle Association’s annual convention opened in Houston and former President Donald J. Trump defended gun owners.
-Above all else, activists and politicians at the NRA convention gathering sought to divert pressure to support popular overhauls like expanded background checks by seizing on the issue of school safety.
-A report by legal and rights experts cited a ‘genocidal pattern’ by Russia. The U.S. plans to send long-range mobile rocket launchers to Ukraine as Russian troops seize Lyman, the second small city to fall this week, and moved closer to encircling Sievierodonetsk.
-A report warned that Ukrainians were at “imminent” risk of genocide as Russian forces captured the Ukrainian city of Lyman. Follow updates on the war.
-He Left Russia to Fight Putin. Now He Leads Ukrainian Soldiers.
The commander, an opponent of Vladimir Putin who identified himself only by his codename Kandalaksha, left his homeland in 2014 when Moscow annexed Crimea.
-Despite a resurgent virus, millions of Americans are expected to be traveling over the holiday weekend.
This is likely to be one of the busiest travel periods since the start of the pandemic.
-Former President Trump had argued that an inquiry by the attorney general violated his constitutional rights. It was his second legal loss in two days.
-Up to 50 Subpoenas Are Expected as Grand Jury Begins Trump Inquiry
The district attorney in Fulton County, Ga., is weighing racketeering charges connected to Donald Trump and his allies’ attempts to overturn the 2020 election.
-The root of Haiti’s Misery: reparations to enslavers. For generations, Haitians were forced to pay France for their freedom. How much was a mystery — until now. The Times scoured centuries-old documents to find out.
-Dan O’Dowd, a software entrepreneur in California, is running for Senate on a single-issue platform: Tesla’s self-driving software.
-A verdict is expected as early as Tuesday in the case brought by a Trump-era special counsel against a lawyer with ties to Hillary Clinton’s 2016 presidential campaign.
THE FINANCIAL TIMES
-In his provocative speech, “Why investors need not worry about climate risk”, HSBC’s Stuart Kirk joked that he was not a typical head of responsible investing as he had “never used the word ‘journey’”. He was suspended from the bank and received this BS-filled rebuke from his boss: “The transition to net zero is of upmost [sic] importance to us and we will strive for ways to help our clients on this journey.” Worryingly for the ESG complex, many people found HSBC’s response more objectionable than Kirk’s words. The controversy has exposed a real divide between those who embrace BS and those who do not.
-Police in Texas have admitted it was the “wrong decision” for officers not to enter a classroom at Robb Elementary School in the city of Uvalde sooner during a shooting on Tuesday that killed 19 children and two teachers.
-Michelle Bachelet, the UN human rights chief, has staked her reputation and that of the 193-member organization on an investigation into China’s crimes against Uyghur Muslims in Xinjiang. The former Chilean president, long considered a contender to be the first woman head of the UN, traveled to the north-western Chinese region where 1M Uyghurs and other Muslim minorities have been subjected to mass internments, forced labor, re-education camps, tech-based surveillance and police persecution.
However, despite her personal experiences of repression and a sterling reputation among UN peers, hopes are dim that Bachelet will learn anything of value about China’s security apparatus and the plight of the Uyghurs. Nor is she expected to persuade Beijing to change course.
-Elon Musk must raise significantly more cash to finance his $44B takeover of Twitter after allowing a $6.25B margin loan commitment backed by his shares of electric carmaker Tesla to lapse.
-Twitter has refused to remove Silver Lake co-chief executive Egon Durban from its board, even after the social media company’s investors voted against his re-election at this week’s shareholder meeting.
-Elon Musk, arguably this era’s most prominent capitalist, last week labelled ESG a “scam” after Tesla, his pioneering electric carmaker, was removed from S&P’s ESG index. Such indices’ scores depended on how compliant a business was with “the leftist agenda”, he claimed in a meme shared on Twitter.
-The gloomy global elite strolling the Promenade in Davos this week could cheer themselves up by stopping off for free ice cream courtesy of Saudi Arabia’s Crown Prince Mohammed bin Salman. Or they could drop into the Saudi café for coffee, pumpkin jereesh and a rose mamoul crumble. Then visit Prince Mohammed’s Misk Foundation “Youth majlis” pavilion. With Russian oligarchs banned, the Saudis stepped into the limelight.
-It would be easy to assume that Klarna chief executive Sebastian Siemiatkowski is feeling downbeat after the company’s first large-scale job cuts, reports of a big fall in its valuation and general questioning of its buy now, pay later business model.
Although he admitted to being “quite exhausted” by recent events, the 40-year-old chief executive and co-founder of Europe’s most valuable private tech business also insisted: “I’m very, very optimistic.
-China will open up the final corner of its onshore bond market to foreign financial institutions as Beijing attempts to reignite global interest in renminbi debt in the face of a severe economic slowdown.
-The shenanigans in Downing Street are symptomatic of a deep malaise at the center, a casual carelessness which pervades Whitehall. Jacob Rees-Mogg can wander around leaving snippy notes on empty desks, but there is an emptiness at the top. The British system is heavily dependent on the centre for direction: yes, officials can run rings around Number 10, but without it, everything defaults to drift.
THE NEW YORK POST
-Texas Gov. Greg Abbot will skip Friday’s National Rifle Association convention in Houston and return to Uvalde amid pressure to pull out of his scheduled appearance in the wake of Tuesday’s elementary school shooting that claimed 21 lives.
-According to North Korea, its fight against COVID-19 has been impressive: About 3.3M people have been reported sick with fevers, but only 69 have died. If all are coronavirus cases, that’s a fatality rate of 0.002%, something no other country, including the world’s richest, has achieved against a disease that has killed more than 6 million people.
-An inflation gauge closely tracked by the Federal Reserve rose 6.klar3% in April from a year earlier, the first slowdown since November 2020 and a sign that high prices may finally be moderating, at least for now.
Barron’s Weekend Summary: Bitcoin and other cryptocurrencies have lost $1.6T of value since the market peaked last November.
Cover Story:
Bitcoin and other cryptocurrencies have lost $1.6T of value since the market peaked last November. Tighter monetary policy and fears of a recession are weighing not only on stocks but also, in the case of crypto, on an asset whose hype has long exceeded its real-world uses. The recent collapse of a major “stablecoin,” which wiped out $40B in a few weeks, isn’t instilling confidence in the crypto ecosystem, either. Still, Bitcoin is up fivefold from its pre-pandemic days, and the industry has expanded to legions of other blockchains, tokens, and apps.
Interview:
No interview feature this week
Tech Trader:
-Many tech stocks have tumbled, but a small cloud stock has become more attractive. Snowflake is a cloud-based data warehousing company. It provides software on top of the giant data piles stored in public clouds—Amazon Web Services, Microsoft Azure, and Google Cloud—to help customers manage, analyze, and act on information about customers and their own businesses. Snowflake serves companies in many markets, including financial services, healthcare, retailing, media, and technology, helping to generate insights about their businesses and to provide customers with content and experiences.
The Trader:
-The stock market ended it’s a weeks-long losing streak. But it does not mean this stock market is any good.
Still, it was quite the relief when the market finally managed to string together a few good days, enough for the DJIA to gain 6.2% for the week, ending an eight-week losing streak. After seven long weeks of declines, the S&P 500 rose 6.6%, and the NASDAQ gained 6.9%. And that was reason enough for optimism.
-Pet food retailer Chewy is set to report earnings this coming Wednesday. It’s expected to report a loss of $0.10/share on sales of $2.41B, and a profit on adjusted earnings before interest, taxes, amortization, and depreciation—or EBITDA—of $6M. That could be optimistic. Raymond James analyst Aaron Kessler estimates that total revenue could come in at $2.42B, while adjusted Ebitda could come in at a loss of $22.7M.
-Bank stocks had a great week, and they can thank JPMorgan Chase. Not every bank is JPMorgan, however, and investors should be selective in choosing which ones to buy. JPMorgan held its investor day on Monday, and it was well celebrated by investors. Perhaps it was the fact that the company maintained its target for a 17% return on tangible equity, or maybe it was because CEO Jamie Dimon talked up the strength of the US economy and the US consumer.
Features:
-Like many well-intentioned movements, the environmental, social and governance movement—ESG—has spawned unintended consequences. ESG has become a dominant force in recent years, attracting more than $40T in assets, driving profound impact on capital markets and through them the entire US economy. Emerging critiques of ESG are strongly grounded in the economic consequences of investors’ narrow focus on ESG priorities. For example, the cost of capital for activities frowned upon by ESG—like fossil fuel production—has significantly increased, contributing to inflation and undermining US energy security. Yet the concept of stakeholder capitalism is proving more durable. Sometimes conflated with ESG, stakeholder capitalism is the idea that businesses have responsibilities to more than just their shareholders. Despite the valid economic critiques of the consequences of ESG investing, no serious intellectual challenge to stakeholder capitalism has emerged.
-Some of the big tech stocks such as Alphabet, Meta (Facebook), and four more others might be bargains and investors might want to consider buying now. When the stock market gets pounded, bargains abound—or so it seems. But in a bear market, the key to investing success is separating the thoughtlessly discarded from the overpriced junk. With about 2/3 of the stocks in the S&P 500SPX +2.47% down more than 20% from their all-time highs and the index itself down 15%, many stocks are on sale. Investors have their pick of nearly every sector, from tech and communication services to consumer staples and discretionary.
European Trader:
European supermajors BP and Shell attract headlineses of three smaller companies— TotalEnergies, Repsol, and Equinor—are up sharply against a backdrop of falling stock markets. Whether they are worth holding now depends on whether investors prize them at current prices because of the solid outlook for dividends. On top of that, oil companies are under pressure as investors prioritize environmental, social, and governance-friendly firms. ESG investors are now realizing that oil companies have money to invest in, and much to gain from, the transition to a low-carbon future.
Emerging Markets:
Tether is making a push into emerging markets as competition grows with rival stablecoin issuer Circle.
The largest cryptocurrency after Bitcoin and Ether, Tether’s USDT has long been the leading stablecoin—a type of digital token pegged to a real asset, such as the dollar. But USDT’s dominance has recently come under pressure. Rival USD Coin (USDC), issued by BlackRock and Fidelity-backed Circle, is increasingly taking market share amid unanswered questions about Tether’s collateralization.
Commodities:
Relief is at hand for coffee lovers who have been blighted by soaring prices for the past year or so. For that, they can thank favorable weather in South America and lower-than-expected demand growth. “In the absence of a weather event, prices are likely to trend down,” says Carlos Mera, the head of agricultural commodities market research at Rabobank in London.
-Tariffs he imposed on some 8,000 Chinese imports cost US customers $8B last year, according to the Peterson Institute for International Economics. They show scant evidence of either spurring domestic substitution or wringing concessions out of Beijing. Yet President Joe Biden has only tightened them, cutting off ad hoc exclusions that importers could petition for under Trump.
Streetwise:
-Jack Hough examines the small-cap rebound and says that “Stocks have never divided perfectly into growth and value buckets, because most companies are meant to grow, and value is subjective. Rule of thumb: If you’re embarrassed to name the company but are proud of the price you paid, it might be a value stock. The opposite goes for growth.”