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Member Briefing July 22, 2024

July 22, 2024

Posted By: Harold King in Daily Briefing,

Top Story

Biden Drops Out of Presidential Race, Endorses Harris – What Happens Next?

President Joe Biden announced Sunday he will end his 2024 presidential campaign and endorse Vice President Kamala Harris as his replacement, saying he believes “it is in the best interest of my party and the country to stand down.” The president made the announcement in a letter, saying he intends “to focus solely on fulfilling my duties as President for the remainder of my term.” He endorsed Vice President Kamala Harris shortly after releasing the letter, saying he gives Harris his "full support" and calling his choice to pick her as his 2020 running mate the "best decision I’ve made." Democrats plan to hold a virtual roll call to formally select their nominee as soon as Aug. 1 and before Aug. 7, ahead of the party’s Aug. 19 convention.

The approximately 4,700 Democratic delegates will choose a new candidate by majority vote. About 4,000 delegates are “pledged” to Biden, but by stepping down, he effectively releases them from their obligation to vote for him. The 700 “unpledged” delegates—also known as superdelegates and can vote for whoever they please—are allowed to vote in a second round if a candidate does not secure the majority votes needed to win in the first round. Harris is the top contender, but other names commonly floated include California Gov. Gavin Newsom, Illinois Gov. J.B. Pritzker, Michigan Gov. Gretchen Whitmer, Colorado Gov. Jared Polis, and Pennsylvania Gov. Josh Shapiro. No Democrats who have been seriously floated as potential replacements have said they’re interested in the 2024 nomination.

Read more at Forbes

‘Highlights’ From The Global Tech Outage: Airlines, Businesses And Border Crossings Hit By Global Tech Disruption

Businesses worldwide grappled with an ongoing major IT outage Friday, as financial services and doctors’ offices were disrupted, while some TV broadcasters went offline. Air travel has been hit particularly hard, with planes grounded, services delayed and airports issuing advice to passengers. The outage came as cybersecurity giant CrowdStrike experienced a major disruption early Friday following an issue with a recent tech update.

CrowdStrike CEO George Kurtz has since said that the company is “actively working with customers impacted by a defect found in a single content update for Windows hosts,” stressing that Mac and Linux hosts are not affected. “This is not a security incident or cyberattack. The issue has been identified, isolated and a fix has been deployed,” he said on social media. One expert suggested it may be the “largest IT outage in history.” Separately, Microsoft cloud services were restored after an outage, the company said on Friday, even as many users continued to report issues. Here are some of the many areas that have been affected.

Read more at the AP

‘Highlights’ From The Global Tech Outage: Airlines, Businesses And Border Crossings Hit By Global Tech Disruption

Businesses worldwide grappled with an ongoing major IT outage Friday, as financial services and doctors’ offices were disrupted, while some TV broadcasters went offline. Air travel has been hit particularly hard, with planes grounded, services delayed and airports issuing advice to passengers. The outage came as cybersecurity giant CrowdStrike experienced a major disruption early Friday following an issue with a recent tech update.

CrowdStrike CEO George Kurtz has since said that the company is “actively working with customers impacted by a defect found in a single content update for Windows hosts,” stressing that Mac and Linux hosts are not affected. “This is not a security incident or cyberattack. The issue has been identified, isolated and a fix has been deployed,” he said on social media. One expert suggested it may be the “largest IT outage in history.” Separately, Microsoft cloud services were restored after an outage, the company said on Friday, even as many users continued to report issues. Here are some of the many areas that have been affected.

Read more at the AP

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Policy and Politics

PSC Approves Central Hudson Rate Increases

The State Public Service Commission Thursday approved a new electric and gas rate plan for Central Hudson for the period of July 1, 2024 through June 30, 2025. The utility’s initial filing sought a $139.5 million electric revenue increase and a $41.5 million gas revenue increase. Instead, the commission approved an electric delivery revenue increase of $58 million – a 5.5 percent increase in total revenues, and a gas delivery revenue increase of $21.2 million – a 7.3 percent increase in total revenues.

The average bill impact for residents is estimated to be $12 for electric and $12 for gas, as of August 1. The PSC said had the company’s original proposal been approved, revenues would have increased 13.3 percent for electric and 14.2 percent for gas.

Read more at the Mid- Hudson News

Bad Data And Miscalculations Behind NY's Lagging Green Energy Goals

New York State Comptroller Thomas P. DiNapoli says better planning is needed for the state to meet its clean energy targets. An audit found the Public Service Commission (PSC) and NYSERDA need to improve planning, monitoring, and risk assessment to reach goals set by the Climate Act. “New York is leading in reducing greenhouse gas emissions, but better planning is crucial,” DiNapoli said. The Climate Act aims for 70% renewable electricity by 2030 and net-zero emissions by 2040. Among the auditors’ findings:

The PSC, tasked under the Climate Act with establishing and reviewing the state's renewable energy program, sometimes used outdated data and wrong calculations to determine if the state could reach 70% renewably sourced electricity by 2030. The PSC did not update their calculations based on new laws and directives, which may drive clean energy demand and supply up, like electric vehicles, new green buildings, or electric cooling and heating.

PSC also did not fully account for other potential risks, and did not consider certain challenges that could delay meeting the state’s clean energy targets. For example, according to the Independent System Operator, the state would need new technology not yet developed to account for the weather-related intermittency of renewables, as well as expanded transmission capability to get clean energy to consumers, to achieve the 2040 goal of 100% renewable statewide electric generation.

The audit found that the PSC did not develop a back-up plan if the Climate Act’s goals were not met within prescribed timeframes, except for the continued reliance on fossil fuels, including “peaker plants,” which generally operate at a higher monetary and environmental cost.

Read more at the Comptroller’s website

Could SpaceX Change the Labor Board’s Future? Here’s What Employers Need to Know

In 2022, eight former employees of Space Exploration Technologies Corp. (SpaceX) filed unfair labor practice charges with the NLRB, alleging that the company had fired them for engaging in activities protected under the National Labor Relations Act (NLRA). Earlier this year, the NLRB issued a formal complaint against SpaceX based on those charges, and that case was set to be heard before an NLRB administrative law judge (ALJ). The next day, SpaceX sued the NLRB in a Texas federal court, claiming that the structure of the agency’s administrative proceedings is unconstitutional. SpaceX is arguing that the NLRB’s structure violates the U.S. Constitution because:

The agency’s ALJs are “removable only for cause, by officials who themselves are removable only for cause,” and these two layers of removal protection are at odds with the President’s removal power under Article II.

The agency has recently authorized itself to award expanded remedies that “go far beyond” the equitable backpay remedy permitted by the NLRA, allowing its ALJs to adjudicate private rights in violation of the right to a jury trial.

NLRB members exercise prosecutorial, legislative, and adjudicatory authority within the same proceedings, in violation of the separation of powers and right to due process.

SpaceX asked the court to declare that the NLRB’s structure is unconstitutional and halt the agency from subjecting the company to its proceedings.

Read more at JD Supra

Health and Wellness

Why Covid Is Surging This Summer — And What Health Experts Say Has Changed

President Biden’s positive test for Covid-19 on Wednesday is a sign of a broader trend: Covid cases are on the rise this summer, gauged by rising wastewater measures and an increase in hospitalizations. Many Americans have likely experienced the uptick firsthand over the past few weeks. They’ve either tested positive themselves or know someone else chagrined to see those two lines bloom on a home test. Even as SARS-CoV-2 has joined the ranks of the respiratory viruses that will continue circulating and causing infections, a spike in cases like this summer’s still causes disruptions in people’s lives — as well as some confusion over issues like tracking down tests, the best time to get vaccine boosters, and the latest advice on managing the infection.

STAT spoke with experts in infectious disease, virology, and public health to find out what people need to know about this summer’s Covid surge. One key message: Despite the increase in cases, the protection people have built up thanks to rounds of vaccination and prior infections is still sparing the vast majority of people from severe illness. “Once you really get a decent immunity, you may get the virus again, but you’re probably not going to get very sick from it,” said Aaron Glatt, chair and professor of medicine at Mount Sinai South Nassau.

Read more at STAT News

NYS COVID Update

The Governor updated COVID data for the week ending July 12^th.

Deaths:

Weekly: 14
Total Reported to CDC: 83,536

Hospitalizations:

Average Daily Patients in Hospital statewide: 1,056
Patients in ICU Beds: 98

7 Day Average Cases per 100K population

9.5 positive cases per 100,00 population, Statewide
9.7 positive cases per 100,00 population, Mid-Hudson

Useful Websites:

The Latest on the Assassination Attempt of Former President Trump

Election 2024

Industry News

Get Ready to Pay More for Less-Reliable Electricity

Utility customers across the country are increasingly paying more for less-reliable service—a trend driven home by a massive heat wave that has triggered outages around the country in recent weeks. Utilities from Michigan to New York and beyond are planning their largest capital investments since World War II as the grid becomes more unstable as a result of age and extreme weather. Meanwhile, demand is poised to soar, with millions of electric vehicles and massive data centers powering artificial intelligence needing to draw power.

Utilities say significant spending is needed in part to address serious reliability issues. Between 2013 and 2022, the nation’s utility companies recorded a roughly 20% increase in outage frequency, according to the most recent federal data. Outage duration increased by more than 46% over the same period, largely as a result of weather-related disasters. Utilities are expected to invest more than $165 billion a year in 2024 and 2025 to make significant upgrades and replacements, according to trade group Edison Electric Institute, more than any year since the group began collecting data. Many utilities are also ramping up spending on routine activities such as maintenance and tree-trimming to reduce outages, and, throughout the West, wildfires caused by fallen power lines.

Read more at The WSJ

Boeing Workers Vote to Authorize Strike

The Seattle district of the International Association of Machinists and Aeorspace Workers voted 99.9% in favor of sanctioning a strike if their contract negotiations with Boeing Co. break down. “The bad decisions made at the executive level of the Boeing Company are short-term decisions with long-term consequences,” declared Jon Holden, president of IAM District 751, at a rally after the vote. “This lack of vision by company executives puts our members’ livelihoods at risk. Our jobs, our legacy and our reputation are on the line right now. We are fighting to change this company and to save it from itself.”

Boeing did not immediately comment on the vote. According to a statement, the union is looking for wage increases after "10 years of stagnant wages," improvements in healthcare and retirement plans and more say for workers in overtime. Boeing workers cannot strike before their contract expires on Sept. 12. They would only strike if negotiations break down. The vote makes strike funds readily available if they decide to strike.

Read more at IndustryWeek

Dockworkers, Ports in a Standoff as Strike Threats Grow Louder

The U.S. is facing potential disruptions at major seaports for the second time in as many years. Harold Daggett, the head of the union that represents dockworkers at East Coast and Gulf Coast ports, is warning that time is running out to secure a new longshore labor deal before the current multiyear contract expires Sept. 30. and that a strike “is becoming more likely.” The International Longshoremen’s Association, which represents about 45,000 workers at ports from Maine to Texas, abruptly withdrew from the talks in June just as they were set to begin, citing a dispute over the use of automation. No new negotiations have been set.

Shipping industry executives, who have grown used to Daggett’s bellicose rhetoric, until recently believed the strike warnings he started making last year were a negotiating tactic. But some executives are beginning to speak of how long a strike could last rather than if it will happen. An October walkout would hit some of the country’s biggest ports, including New York and New Jersey, Virginia and Savannah, Ga., at the busiest time of year for shipping, when retailers are bringing in holiday-season goods. To get a deal, the union and shipping executives still have to resolve several issues specific to local ports. They also remain far apart on a coastwide increase in wages.

Read more at The WSJ

Ford To Build Super Duty Pickups At Canada Plant Instead Of EVs

Ford Motor will expand production of its large Super Duty trucks to a Canadian plant that was previously set to be converted into an all-electric vehicle hub. The new plans include investing about $3 billion to expand Super Duty production, including $2.3 billion at Ford’s Oakville Assembly Complex in Ontario, Canada, Ford said Thursday. The remaining investment will be used to increase production at supporting facilities in the U.S. and Canada, the company said.

Ford currently produces Super Duty trucks – the larger siblings of the F-150 full-size pickup used largely by commercial and business customers – at plants in Ohio and Kentucky.Ford said the Canadian plant, which is expected to come online in 2026, will add capacity of roughly 100,000 units annually. “Super Duty is a vital tool for businesses and people around the world and, even with our Kentucky Truck Plant and Ohio Assembly Plant running flat out, we can’t meet the demand,” Ford CEO Jim Farley said in a release. “This move benefits our customers and supercharges our Ford Pro commercial business.”

Read more at CNBC

The Tesla Cybertruck Has Dethroned Ford's F-150 Lightning As The Best-Selling Electric Truck

Tesla’s new flagship electric truck, which finally began hitting the highway at the end of 2023, sold more units than Ford’s F-150 last month, making it America’s best-selling electric truck, reports Automotive New. The Cybertruck, starting at just over $100,000 with shipping, had 3,907 registrations in May, S&P Global Mobility said. The pickup launched Nov. 30 with the current limited-run Foundation Series versions.

It’s surprising because the Cybertruck is such a unique, one-of-a-kind, unusual vehicle, really as far out of the mainstream as you can get,” said Tom Libby, associate director of industry analysis at S&P Global Mobility. “On the other hand, it doesn’t surprise me because Elon Musk thrives on doing things like this.” Ford’s electric pickup, which launched in the spring of 2022, had 2,353 registrations in May, S&P Global Mobility said. The Rivian R1T pickup, which launched in late 2021, was in third place, with 1,237 registrations, the data showed.

Read more at Quartz

Despite Tesla Slide, EV Sales in Q2 Mark New Record

Electric vehicle sales in the U.S. grew by 11.3% year over year in the second quarter, reaching a record-high volume of 330,4631 units, according to new estimates from Kelley Blue Book. This growth was driven partly by improved availability, higher discounts and elevated levels of leasing. Total EV sales last quarter were higher than Q1 sales by 23% percent. In Q2, market leader Tesla sales volume declined by 6.3% year over year but new products, notably from General Motors, helped lift overall volume higher. In the second quarter, Tesla’s share of EV sales fell below 50% for the first time in the U.S. to 49.7%.

Cox Automotive Industry Insights Director Stephanie Valdez Streaty commented: “EV sales exceeded expectations during a record-breaking quarter. Despite Tesla’s declining sales, with its EV sales share now below 50% for the first time, the overall competitive landscape for electric vehicles is intensifying. This increased competition is leading to continued price pressure, gradually boosting EV adoption. Automakers that deliver the right product at the right price and offer an excellent consumer experience will lead the way in EV adoption.”

Read more at Cox Automotive

Intel Launches First U.S. Apprenticeship Program For Manufacturing Facility Technicians

Last week Intel announced the company is launching its first U.S. registered apprenticeship program for manufacturing facility technicians in collaboration with the Arizona Commerce Authority (ACA), SEMI Foundation, Fresh Start Women’s Foundation, Maricopa Community Colleges, and the Phoenix Business and Workforce Development Board. Intel plans to train dozens of facility technician apprentices over the next five years. Selected apprentices will be full-time Intel employees on day one and will earn a certificate and college credit upon successful completion of the one-year program.

The one-year registered apprenticeship program will involve a mix of classroom instruction and on-the-job training in partnership with the Maricopa County Community College District (MCCCD). Participants will be hired as Intel employees as they learn the core competencies needed for facility technician roles, including hand-tool basics with mechanical, pneumatic, hydraulic and vacuum systems; electrical basics and electronics; handling of chemicals and gases. Intel’s apprenticeship program provides more technical skills than other opportunities within the industry, focusing on hands-on skills in gas and chemical facility training.

Read more at Arizona Commerce Authority

TSMC Rides AI Demand To Raise Revenue Forecast, Says No To US Joint Venture

Taiwan's TSMC, the world's largest contract chipmaker, raised its full-year revenue forecast on Thursday given surging demand for chips used in artificial intelligence, and rejected the idea of a joint venture factory in the United States. TSMC, a major Apple Inc and Nvidia supplier, has benefited from the global AI boom that has helped it weather the tapering off of pandemic-led electronics demand. The bellwether for the chip industry earlier on Thursday posted net profit that beat market expectations. It raised its 2024 revenue forecast to growth of slight to above the mid-20% range in U.S. dollar terms, versus a previous prediction of an increase in the low to mid-20% range.

TSMC is spending $65 billion on three plants in the U.S. state of Arizona and has other new factories in operation or planning stages in Japan and Germany, which have partner investors. Asked if TSMC would consider a joint venture in the United States following Trump's comments, Wei said no. "So far we did not change any of our original plans of expansion of our overseas fabs. We continue to expand in Arizona, in Kumamoto, and maybe in future in Europe. No change in our strategy. We continue in our current practice," he added.

Read more at Reuters

Inflation Analysis - What is Up With Grocery Prices?

The consumer price index for groceries has risen more than the overall price index since the start of the pandemic, with a particularly large jump in 2022. In looking for explanations, a starting place is the behavior of raw commodity prices, which surged from early 2021 to mid-2022. In addition, wages for low-paid grocery workers have gone up faster than wages for the workforce as a whole. Finally, even though profit margins for grocery stores have gone up, the increase appears to be only a small contributor to the rise in food prices relative to the increase in their operating costs.

The unusually high food inflation experienced in the first three years of the pandemic appears to have been due, in part, to much higher food commodity prices and large increases in wages for grocery store workers. The subsequent drop in commodity prices then helped bring food inflation down below the core inflation rate even though heightened wage pressure for grocery workers continued. In the end, the moderation of food price inflation has caused the gap that developed between the food index and the core index since the start of the pandemic to shrink from 10 percentage points at the end of 2022 to 5 percentage points in June 2024.

Read more at The NY Fed

Embraer Deliveries Rise 88% In Second Quarter, Order Backlog At 7-Year High

Brazilian planemaker Embraer said on Thursday it had delivered 47 aircraft in the second quarter of 2024, an 88% increase from the prior year, and reaffirmed its full-year outlook despite ongoing aerospace industry supply chain issues. The world's third-largest planemaker behind Airbus and Boeing delivered 19 commercial and 27 executive jets in the April-June period, as well as one defense C-390 Millennium jet.

The delivery report comes days ahead of the Farnborough Airshow, when planemakers often announce major orders. Investors have been positive about Embraer's demand prospects, with shares in the planemaker up more than 80% so far this year. Embraer has been experiencing strong demand for its next generation E2 jets as carriers face a shortage of larger single-aisle planes from Airbus and Boeing, and has also managed to convert business jet purchase options into firm orders.

Read more at Reuters

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