Autos: Tesla to build factory in China
Tesla is set to become the first foreign car company to have its own factory in China, said Tim Higgins in The Wall Street Journal. The electric-car maker has struck a deal with the Shanghai government to build a “wholly owned factory in the city’s free-trade zone.” The arrangement will require Tesla to pay the 25 percent tariff that China imposes on foreign vehicles, even though the cars are made there. In exchange, the company will not be forced to divulge its trade secrets—something other f oreign automakers are required to do when they set up joint ventures with Chinese car companies in the country. The move also gives Tesla “traction in China’s fast-growing electric-vehicle market.”
Back in the U.S., manufacturing glitches have plagued Tesla’s Fremont, Calif., factory, said Russ Mitchell in the Los Angeles Times. Production of the Model 3—the company’s first mass-market, all-electric compact sedan—is moving at a glacial pace. After the car was unveiled in July, Tesla projected it would be producing 20,000 Model 3s a month by the end of the year. Instead, the company has produced just 260—“about three cars a day.” That’s well behind the “normal auto-industry production pace of about one car per minute.” The company has blamed manufacturing “bottlenecks,” without specifying what the problems are.
Retail: Lord & Taylor sells flagship to WeWork
Office-sharing startup WeWork is purchasing “an icon of old-school retail,” said Michael de la Merced and Michael Corkery in The New York Times. The company that owns Lord & Taylor announced this week it would sell the department store’s flagship on New York City’s Fifth Avenue, where it has operated for a century, to WeWork for $850 million. WeWork, which leases collaborative work spaces, will use about three-quarters of the 676,000-square-foot location for its global headquarters. Lord & Taylor will rent the other quarter, “where it will operate a pared-down department store.”
Work culture: Fallout at Fidelity over harassment
Mutual fund giant Fidelity is grappling with a sexual harassment scandal, said Heather Long in The Washington Post. Two male managers were fired in recent weeks for allegedly “making sexually inappropriate comments” to junior female employees, and reports have surfaced about “a broader culture of sexism and bullying.” The developments are particularly “embarrassing” for the company, which manages $2.3 trillion and has 40,000 employees, because it has a reputation as a “womanfriendly Wall Street firm.” Women occupy a number of top leadership positions, including CEO and the president of personal investing.
Regulation: Republicans make it harder to sue banks
Congress this week handed the financial industry its “most significant legislative victory since President Trump took office,” said Andrew Ackerman and Yuka Hayashi in The Wall Street Journal. The Senate voted 51-50, with Vice President Mike Pence casting the tie-breaking vote, to overturn a rule put in place by the Consumer Financial Protec tion Bureau that barred banks from requiring consumers to settle disputes via arbitration. The House of Representatives passed a repeal of the rule in July, so the measure now moves to President Trump’s desk.
Law: Baby powder payouts tossed
Johnson & Johnson scored back-to-back legal victories this month, with courts tossing out two judgments against the company totaling nearly $500 million, said Robert Jablon in the Associated Press. A judge in Los Angeles last week vacated a $417 million jury award granted to a woman who claimed she developed ovarian cancer after using Johnson & Johnson baby powder, ruling “there were errors and jury misconduct” in the trial. A week earlier, a Missouri appeals court threw out a $72 million award to the family of an Alabama woman who died of ovarian cancer, “ruling that the state wasn’t the proper jurisdiction.”