The daily business briefing: March 1, 2023
Biden announces conditions for chip subsidy recipients, Tesla to build plant in Mexico, and more
Biden announces conditions for chip subsidy recipients
The Biden administration on Tuesday started the process of distributing nearly $40 billion in subsidies for semiconductor manufacturers. The Commerce Department released its plans to start taking applications for the program in June, saying it would require companies receiving money, including a 25 percent investment tax credit for construction of chip plants, to provide child care for employees, use low-emission energy sources, pay union wages for construction workers, and share excess profits with the government. Commerce Secretary Gina Raimondo said the program was a "national security initiative," because the United States has become "much too reliant upon Taiwan for leading edge chips," putting the nation at a disadvantage in "very heated global competition with China."
Tesla to build Mexico plant, Mexican president says
Tesla plans to build a plant in northern Mexico's Monterrey area, Mexican President Andrés Manuel López Obrador said Tuesday. One official said the deal was worth $5 billion. The "whole Tesla company" is coming to the country, with a "very big" electric-vehicle plant and potential investment in batteries, too, López Obrador said. Tesla might build Semi trucks and Roadster sportscars at the factory, one official said. Another said Tesla would produce a sport utility vehicle there, although no specifics on what the plant will manufacture were immediately available. "This will represent a considerable investment and many, many jobs," López Obrador told reporters.
Goldman Sachs 'significantly' trimming consumer banking ambitions
Goldman Sachs Group CEO David Solomon said Tuesday that the investment bank had "significantly narrowed" its ambitions to offer broad consumer banking services. Speaking at Goldman's second-ever investment day, Solomon said the company was "considering strategic alternatives" to the high-profile push into Main Street banking, which includes specialty lender GreenSky and credit-card partnerships with Apple and General Motors, The Wall Street Journal reported. Goldman started testing consumer finance offerings "as a way to smooth out the up-and-down returns" of its Wall Street business after the 2007-2009 recession damaged its reputation. Some investment bankers and traders feared from the start that the push would hurt Goldman's brand, the Journal said.
Biden picks Julie Su as next labor secretary
President Biden announced Tuesday that he would nominate Julie Su, the deputy labor secretary, to become the next labor secretary when Martin Walsh leaves the post in March. Su, who will be the first Asian American to serve in Biden's Cabinet, would take over at a crucial time, as the administration seeks to stabilize the economy amid recession fears, and bolster labor rights. Su, a fluent Mandarin speaker and former California labor commissioner, has overseen the release of numerous rules to benefit workers and protect them from COVID-19. Walsh will be the first official to leave Biden's Cabinet. He will head the National Hockey League Players Association.
Stock futures rise after February losses
U.S. stock futures edged higher early Wednesday at the start of a new month, after sliding on Tuesday to end February with losses. Futures tied to the Dow Jones Industrial Average and the S&P 500 were up 0.2 percent and 0.3 percent, respectively, at 6:30 a.m. ET. Nasdaq futures were up 0.5 percent. The Dow and the S&P 500 fell 0.7 percent and 0.3 percent, respectively, on Tuesday. The tech-heavy Nasdaq dropped 0.1 percent. All three of the major U.S. averages ended February with monthly losses. The Dow fell 4.2 percent last month. The S&P 500 and the Nasdaq fell 2.6 percent and 1.1 percent, respectively, as investors continued to show concerns about future Federal Reserve interest rate hikes to fight inflation.