Business
May 19, 2020

Facing thousands of lawsuits over its talcum-based baby powder, Johnson & Johnson announced on Tuesday it will no longer sell the product in the United States and Canada.

The company said demand for its talc-based baby powder has been declining in North America "due in large part to changes in consumer habits." Johnson & Johnson also blamed "misinformation around the safety of the product and a constant barrage of litigation advertising" for its demise.

As of March, more than 19,000 lawsuits have been filed against Johnson & Johnson, with plaintiffs alleging that the talc-based baby powder caused ovarian cancer and mesothelioma, The Wall Street Journal reports. The company has won some of those lawsuits, but lost others, with a jury in 2018 awarding 22 plaintiffs $4.69 billion.

Johnson & Johnson said it will continue to sell its cornstarch-based baby powder in the United States and Canada, and the talc version will still be available for purchase in other countries. Catherine Garcia

April 23, 2020

Ruth's Hospitality Group, the owner of Ruth's Chris Steak House, announced on Thursday it will return the $20 million it received from the federal government's Paycheck Protection Program, which was intended for small businesses to pay their employees amid the coronavirus pandemic.

The $349 billion program ran out of money quickly, and CNBC reports that nearly $600 million was given out to roughly 150 public companies. The Treasury Department has asked those companies to return their money.

There are more than 100 Ruth's Chris restaurants in North America, and the company was able to receive $10 million in loans for both of its subsidiaries. "We intended to repay this loan in adherence with government guidelines, but as we learned more about the funding limitation of the program and the unintended impact, we have decided to accelerate that repayment," Ruth's Chris President and CEO Cheryl J. Henry said in a statement.

Earlier this week, the fast-casual burger chain Shake Shack announced it would return its $10 million loan, after becoming aware "the first phase of the PPP was underfunded and many who need it most haven't gotten any assistance." Catherine Garcia

April 20, 2020

Shake Shack on Sunday night announced it will be returning the $10 million federal loan it received that was intended for small businesses.

The fast-casual burger chain received the money from the Paycheck Protection Program, which set aside $349 billion to help small businesses pay their workers during the coronavirus pandemic. The program stipulates that if businesses bring back their furloughed and laid-off workers by June, the loans will be forgiven. The PPP started less than two weeks ago, and has already run out of money.

Last week, Shake Shack announced it had furloughed or laid off more than 1,000 employees. The chain also said it has $112 million cash on hand and is spending between $1.3 million and $1.5 million per week. Shake Shack has 189 locations in the United States, and in a statement, Danny Meyer, Shake Shack founder and CEO of Union Square Hospitality Group, and Shake Shack CEO Randy Garutti said they applied for a loan because they were open to any individual restaurant with no more than 500 employees.

"The PPP came with no user manual and it was extremely confusing," Meyer and Garutti said. Because Shake Shack and Union Square Hospitality Group had already furloughed and laid off workers, they thought "the best chance of keeping our teams working, off the unemployment line, and hiring back our furloughed and laid off employees would be to apply now and hope things would be clarified in time."


Meyer and Garutti said they will "immediately return the entire $10 million," now that they are aware "the first phase of the PPP was underfunded and many who need it most haven't gotten any assistance." They called on Congress to do something to make sure "all restaurants, no matter their size, have equal ability to get back on their feet and hire back their teams." Catherine Garcia

March 16, 2020

The coronavirus pandemic is creating such a demand for certain products that Amazon will hire 100,000 people to work in its U.S. warehouses, the company announced Monday.

Amazon said that because so many people are staying home and doing more shopping online, some household essentials are out of stock and deliveries are taking longer than usual, The Washington Post reports. To get packages out faster, Amazon is hiring additional temporary workers for its U.S. warehouses, Dave Clark, senior vice president of worldwide operations, wrote in a blog post on Monday.

Clark said Amazon is especially interested in hiring individuals who have been furloughed. "We want those people to know we welcome them on our teams until things return to normal and their employer is able to bring them back," he said. Amazon will also raise its pay rate through April by $2 an hour in the United States. Catherine Garcia

September 11, 2019

The California state Senate on Tuesday passed a major bill that would require companies like Uber and Lyft give contract workers employee status.

The vote was 29-11, and the bill now heads to the state Assembly. Gov. Gavin Newsom (D) has expressed his support for the measure, and is expected to sign it. The law would go into effect on Jan. 1, with at least one million contract workers converted into employees, The New York Times reports. "Today, the so-called gig companies present themselves as the innovative future of tomorrow, a future where companies don't pay Social Security or Medicare," state Sen. Maria Elena Durazo (D) said. "Let's be clear: There is nothing innovative about underpaying someone for their labor."

Several labor groups have been calling for such a measure nationwide, saying contract workers are missing out on benefits and minimum pay that employees receive, and similar bills may soon be introduced in other states. Uber and Lyft say they have hundreds of thousands of drivers in California, and argue that as contract workers, they have flexibility not available to employees. Both companies have said that if they are forced to turn contract workers into employees, the added costs will cause their businesses to collapse, the Times reports. Catherine Garcia

September 5, 2019

The Treasury Department released a plan Thursday aimed at overhauling the U.S. housing market. A key component of the plan has the government relinquishing control over Fannie Mae and Freddie Mac in order to privatize the mortgage buyers.

Fannie Mae and Freddie Mac, which back half of the country's mortgages, have been under government conservatorship since the 2008 financial crisis. Under the Trump administration plan, Freddie Mac and Fannie Mae would be privatized again and required to pay a fee for government protection. This approach does not require any approval from Congress, and the plan doesn't detail what will happen to the government's stakes in the firms or how they will build their capital up enough so they can go private again, The Washington Post reports.

Housing prices continue to rise across the country, and Treasury Secretary Steven Mnuchin said the proposal "will protect taxpayers and help Americans who want to buy a home." Sen. Sherrod Brown (D-Ohio) disagrees, telling the Post that the plan "will make mortgages more expensive and harder to get. I'm urging the president: Make it easier for working people to buy or rent their homes, not harder." Catherine Garcia

February 25, 2017

Billionaire Warren Buffett published his annual letter to Berkshire Hathaway shareholders on Saturday, predicting investors "will almost certainly do well" if they stick with a "collection of large, conservatively financed American businesses." The American economy "is virtually certain to be worth far more in the years ahead," he wrote, enthusing about American "economic dynamism":

One word sums up our country’s achievements: miraculous. From a standing start 240 years ago — a span of time less than triple my days on Earth — Americans have combined human ingenuity, a market system, a tide of talented and ambitious immigrants, and the rule of law to deliver abundance beyond any dreams of our forefathers. You need not be an economist to understand how well our system has worked. Just look around you. [Berkshire Hathaway]

Buffett devoted a large portion of his letter to decrying Wall Street fees that aren't worth it for investors:

The bottom line: When trillions of dollars are managed by Wall Streeters charging high fees, it will usually be the managers who reap outsized profits, not the clients. Both large and small investors should stick with low-cost index funds. ... My calculation, admittedly very rough, is that the search by the elite for superior investment advice has caused it, in aggregate, to waste more than $100 billion over the past decade. Figure it out: Even a 1 percent fee on a few trillion dollars adds up. Of course, not every investor who put money in hedge funds ten years ago lagged S&P returns. But I believe my calculation of the aggregate shortfall is conservative. [Berkshire Hathaway]

Read Buffett's full letter here, or see Forbes' selection of its seven best quotes if you just want the highlights. Bonnie Kristian

December 21, 2016

Two weeks after demanding the cancelation of Boeing's contract to build the next Air Force One, Donald Trump met with the company's CEO in Florida, who promised to get the cost of the plane down.

The Air Force has budgeted $2.7 million for the Air Force One program, but analysts believe that by the time the plane is finished in the mid-2020s, the cost will swell to $4 billion, The Washington Post reports. After Trump tweeted about the potential $4 billion price tag, Boeing CEO Dennis Muilenburg called him to smooth things over, and they met face to face Wednesday. "We're all focused on the same thing here, we're going to make sure that we give our war fighters the best capability in the world and that we do it in a way that is affordable for our taxpayers," Muilenburg told reporters. "And his business head set around that is excellent. It was a terrific conversation. Got a lot of respect for him. He's a good man. And he's doing the right thing."

Muilenburg didn't say if the cost would be $4 billion, but promised Boeing would "get it done for less than that, and we're committed to working together to make sure that happens. And I was able to give the president-elect my personal commitment on behalf of the Boeing Company." Catherine Garcia

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