October 20, 2021

The World Live Breaking News Coverage & Updates IN ENGLISH

The World Live Breaking News Coverage & Updates IN ENGLISH

Facebook says its outage was caused by a cascade of errors.

23 min read
, Facebook says its outage was caused by a cascade of errors., The World Live Breaking News Coverage & Updates IN ENGLISH
Share This :
, Facebook says its outage was caused by a cascade of errors., The World Live Breaking News Coverage & Updates IN ENGLISH

Daily Business Briefing

Oct. 5, 2021Updated 

Oct. 6, 2021, 5:30 a.m. ET

Oct. 6, 2021, 5:30 a.m. ET

Image, Facebook says its outage was caused by a cascade of errors., The World Live Breaking News Coverage & Updates IN ENGLISH
Credit…Jason Henry for The New York Times

A cascade of mistakes made during maintenance on Facebook’s network caused the outage that took its services offline Monday, the company said in a blog post published on Tuesday.

Facebook’s family of apps, which includes Instagram, WhatsApp and Messenger, were offline for more than five hours as employees scrambled to repair the damage. More than 3.5 billion people around the world use Facebook’s services to communicate with friends and family, distribute political messaging, and expand their businesses through advertising and outreach.

The initial problem occurred in a network Facebook calls its “backbone,” which connects its data centers around the world, Santosh Janardhan, a vice president of infrastructure at Facebook, wrote in the blog post.

During maintenance of the network, a command was issued to assess how much capacity was available. But the command backfired, disconnecting the network and blocking Facebook’s data centers from communicating, Mr. Janardhan said. An audit tool designed to catch mistaken commands failed to detect the error, he added.

But it was just the beginning of the problems. “This change caused a complete disconnection of our server connections between our data centers and the internet,” Mr. Janardhan wrote. “And that total loss of connection caused a second issue that made things worse.”

With Facebook’s data centers offline, the company’s servers that manage its internet addresses were also unavailable. “This made it impossible for the rest of the internet to find our servers,” Mr. Janardhan said.

As the scope of the outage became clear, Facebook’s engineers struggled to restore access because its data centers are heavily protected and the employees could not gain immediate entry, the company said.

“We’ve done extensive work hardening our systems to prevent unauthorized access, and it was interesting to see how that hardening slowed us down as we tried to recover from an outage caused not by malicious activity but an error of our own making,” Mr. Janardhan wrote.

Once the engineers were inside Facebook’s data centers and began to work, they were able to restore the network. But they needed to be gradual when bringing servers online so as not to overwhelm the system, Mr. Janardhan said.

The company planned to study how the outage occurred and to create drills that would allow employees to practice fixing Facebook’s systems more quickly, he added.

Credit…Kelsey McClellan for The New York Times

For more than five hours on Monday, while Facebook and Instagram were dark, David Herrmann fretted about ads.

Mr. Herrmann, a freelance media buyer, said that everyone he worked with relied heavily on the platforms, which soak up the bulk of the $80 million to $100 million in ad spending he manages each year.

One company that advertises exclusively on Facebook watched its revenue plunge 70 percent during the outage from the same period a week earlier, Mr. Herrmann said. Sales slipped 30 percent at another company, which spends $40,000 a day on ads.

“I was more or less checking Facebook consistently throughout the day, hoping it would come back,” he said. “But without clear direction from Facebook, we just had to wait.”

The outage was an unpleasant reminder to many advertisers of Facebook’s powerful influence on their ability to do business.

Ads fuel Facebook, with more than 10 million advertisers contributing more than 98 percent of its revenue. In the three months ending in June 30, it pulled in an average of $78 million in ad sales every six hours, much of it from small companies, organizations and individuals.

But a deluge of criticism has caused many of Facebook’s customers to sour on the company. Frances Haugen, a former project manager for Facebook turned whistle-blower, testified before senators on Tuesday that the company was aware of the harms caused by its services, such as Instagram’s negative effects on teenage girls. Facebook has also faced advertiser outcry over its handling of hate speech, misinformation, privacy and more.

Graham Mudd, Facebook’s vice president for ads and business product marketing, wrote on Twitter on Monday that the outage affected Facebook’s ad platform and apologized “for the disruption this creates for our customers.” Facebook said later in the day that “advertisers were not and will not be billed for ads during the outage.”

Media buyers noted that Facebook went dark at the beginning of the most important period for many advertisers, as they begin holiday campaigns during a season that is expected to be complicated this year by supply chain struggles and pandemic restrictions.

“There may be heads on pikes by the end of this,” Cory Dobbin, the founder of the Aaron Advertising digital agency, wrote on Twitter.

Many businesses rely exclusively on Facebook to reach customers, Mr. Dobbin, who manages roughly $50,000 a day in advertising spending, said in an interview. The majority of his clients’ spending goes to Facebook, with the rest to Google, Snap and other platforms.

“The name of the game for many advertisers, if it wasn’t already, is diversification,” he said. “This is a perfect example of why you can’t rely on a single channel to bring in all of your revenue.”

He continued: “It’s just far too risky to rely on Facebook to be there for your business long term.”

Mr. Dobbin said he would be surprised if Facebook refunded advertisers.

“This is how Facebook works,” he said. “Always has been, likely always will be.”

The outage added to growing concerns about Facebook. Omnicom Media Group, which manages more than $30 billion in global marketing spending a year, sent an update to clients on Monday noting that Facebook had been in touch to defend itself after Ms. Haugen appeared on the CBS program “60 Minutes” on Sunday.

Omnicom had sent a message to clients addressing a series of articles from The Wall Street Journal about Facebook. The ad company pointed to a report that Facebook misled its oversight board by claiming that its XCheck program, which exempted at least 5.8 million high-profile users from normal enforcement rules, was used only sparingly and that data from the system could not be tracked.

“These discrepancies raise a more significant question about the level of accuracy and sincerity of Facebook’s responses to inquiries — both internal and external — on these types of matters,” Omnicom wrote in the note, which was obtained by The New York Times. “The problem with what has come to light in this report is that there is essentially a parallel justice system within Facebook that operates with no public accountability or transparency.”

Omnicom, which along with clients created a lobbying group last year to push tech companies to take more responsibility on their platforms, also used its note to pressure Facebook to improve content moderation abroad and strengthen its management of misinformation.

“Taken as a whole, when it comes to user controls, Facebook is in many respects still years behind competitors,” Omnicom wrote, though it added that it “will continue to partner closely with Facebook” and “will keep our clients informed.”

Mr. Herrmann, the media buyer, said advertisers would continue to be shackled to Facebook because of its enormous size and reach.

“It can and does still have massive implications across the media buying space, so it’s not going anywhere,” he said. “TikTok is coming up quickly, but nobody at scale does it as well as Facebook.”

Credit…Alyssa Keown/Battle Creek Enquirer, via Associated Press

Workers who make Kellogg cereals including Corn Flakes, Frosted Flakes and Froot Loops went on strike on Tuesday at factories in Michigan, Nebraska, Pennsylvania and Tennessee.

“For more than a year throughout the Covid-19 pandemic, Kellogg workers around the country have been working long, hard hours, day in and day out, to produce Kellogg ready-to-eat cereals for American families,” said Anthony Shelton, president of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union, which represents the striking workers.

His statement added, “We are proud of our Kellogg members for taking a strong stand against this company’s greed and we will support them for as long as it takes to force Kellogg to negotiate a fair contract that rewards them for their hard work and dedication and protects the future of all Kellogg workers.”

The issues being negotiated include job protections, vacation and holiday pay, and health care. The plants are in Battle Creek, Mich., the headquarters of Kellogg and its home since the company’s founding in 1906; Omaha; Lancaster, Pa.; and Memphis. About 1,400 workers are on strike.

“We are disappointed by the union’s decision to strike,” said Kris Bahner, a press officer for the company. The workers’ pay and benefits “are among the industry’s best,” Ms. Bahner said in a statement, adding that “our offer includes increases to pay and benefits for our employees, while helping us meet the challenges of the changing cereal business.”

Her statement added: “We remain committed to achieving a fair and competitive contract that recognizes the important work of our employees and helps ensure the long-term success of our plants and the company. We remain ready, willing and able to continue negotiations and hope we can reach an agreement soon.”

Mr. Shelton said in his statement that his union “stands in unwavering solidarity with our courageous brothers and sisters who are on strike.”

The same union recently ended a weekslong strike at Nabisco, after clashing with its owner, Mondelez International, over proposed changes to shift lengths and overtime rules. The strike, by roughly a thousand workers, affected three bakeries and three small sales distribution facilities, according to Mondelez, which is based in Chicago.

Credit…The Examiner

Examiner Media, a publisher of free weekly newspapers in New York’s Lower Hudson Valley, has started a digital magazine, Examiner+, on the digital platform Substack.

Subscriptions to Examiner+, whose first issue appeared on Tuesday, will cost $5.99 a month or $49.99 a year. In creating a subscription publication for Substack, Examiner Media is testing whether a company known mainly for its ad-supported community newspapers — a sector of the media business that has struggled greatly in recent decades — can find success by asking readers to pay for news content online.

Examiner+ will include articles not available in Examiner Media’s papers, which include The Northern Westchester Examiner and The Putnam Examiner. “It can’t just be a rehash of what we’re already serving up in print,” said Robert Schork, the company’s digital editorial director.

He cited a coming feature on the April closing of the Indian Point nuclear power plant. Examiner+ also has a profile of the actor Chazz Palminteri, who recently opened Chazz Palminteri Italian Restaurant in White Plains.

Adam Stone founded Examiner Media in 2007, the same year Gannett, the large newspaper chain, shuttered The Patent Trader, a 50-year-old paper in northern Westchester County. Last year, after pandemic-related lockdowns froze advertising and in-person events, Mr. Stone cut Examiner Media’s full-time editorial staff to two people from six. He also solicited funds for the first time and received more than $30,000, mainly in small donations.

“It felt like there was opportunity in reader revenue that we weren’t tapping,” he said.

Credit…Donna Mueller

Enter Substack. The venture capital-backed start-up is best known for persuading nationally popular writers to leave established publications and go into business for themselves with subscription newsletters. This spring, it announced Substack Local, a $1 million initiative to support local journalism with grants. In June, Examiner Media was selected as one of 12 winners, a group that included local news publishers in Australia, Britain, Nigeria, Romania and Taiwan.

“We wouldn’t consider ourselves a success if we just took famous people and made them famous in a new context,” said Hamish McKenzie, a Substack co-founder.

Another locally oriented news publication, The Charlotte Ledger, founded two years ago by the former Charlotte Observer reporter Tony Mecia, has found success on Substack, with 10,000 subscribers, around 2,200 of whom are paying, he said.

“You hear a lot of doom and gloom on local news,” Mr. Mecia said, “but that’s mainly newspapers. There are people trying a lot of exciting things, and some of it is very encouraging.”

Examiner Media will receive $75,000 from Substack in four installments, as well as 15 percent of the first-year revenue for Examiner+, Mr. Stone said. The money helped Mr. Stone build the staff back to five full-time editorial employees. After a year, the company’s share of subscription revenue will go to 90 percent, the Substack standard.

“If we can crack the code,” he said, “we can announce the blueprint to the wider world. All community newspapers could follow this model.”

Credit…Susan Walsh/Associated Press

Two Democratic lawmakers are seeking information from the country’s biggest accounting firms about the revolving door between the firm’s tax departments and top positions at the Treasury Department.

Senator Elizabeth Warren of Massachusetts and Representative Pramila Jayapal of Washington made the request after The New York Times detailed how multinational accounting firms effectively draft tax rules from inside the government that benefit their clients.

The Times found at least 35 examples in which employees of big accounting firms left to join the Treasury’s tax policy office or other government positions and then returned to the same firm. In nearly half of those cases, the officials were promoted to partner when they rejoined their old employer, which often means a doubling of their pay.

In letters sent Tuesday to five accounting firms — PwC, EY, Deloitte, RSM and KPMG — the two lawmakers asserted that the firms were “abusing the public trust and taking advantage of the revolving door between public service and private profit.”

They cited an example revealed in The Times article of a Deloitte tax lawyer who sought to water down proposed Treasury Department rules intended to end a tax shelter that was created by his firm and used by other accounting firms for their clients, including Bristol Myers Squibb. A few weeks later, he joined the Treasury and his office issued new regulations incorporating the changes he had sought at Deloitte. He soon returned to his old firm and was immediately promoted to partner.

The letters asked for detail about this unofficial embedding of accounting firm officials in the government, including how many lawyers from the firms have taken jobs in the government and then returned; names of clients before and after their time in government; details of compensation at the firms both before and after their government service; and whether firm employees are permitted to retain clients if they worked on matters affecting them while in the government.

The lawmakers cited a bill they have introduced twice that would toughen several government ethics provisions, including by requiring more extensive disclosure on lobbying and tightening restrictions on post-government employment.

“Our legislation would close the revolving door between massive accounting firms like yours and the federal government, ensuring that our government officials work for the people and not the wealthiest corporations and their clients,” they wrote.

Credit…Bryan Bedder/Getty Images For History

A fund management company that invested more than $2 million in Ozy Media filed a lawsuit on Monday claiming Ozy “engaged in fraudulent, deceptive and illegal conduct.”

The lawsuit, filed by LifeLine Legacy Holdings of Beverly Hills, Calif., represents the latest challenge for Ozy, which was backed by a bevy of high-profile investors and announced on Friday that it had shut down after its business practices and leadership had come under scrutiny.

LifeLine claims in the lawsuit that Ozy, a multimedia outlet led by the former MSNBC host Carlos Watson, failed to disclose pertinent facts about its business when the fund manager’s executives were considering an investment from late 2020 until February, when it agreed to buy a $2 million stake in the company.

A spokesman for Mr. Watson declined to comment on the lawsuit.

In the suit, which was filed in the U.S. District Court for the Northern District of California, where Ozy Media is based, LifeLine cites a conference call that took place in February between Ozy and Goldman Sachs. On that call, as The New York Times reported on Sept. 26, an Ozy executive apparently impersonated a YouTube executive, in an effort to assure the Goldman team that videos produced by Ozy were a success on YouTube.

In the complaint, LifeLine says that Ozy should have disclosed what had taken place on that call, which occurred before its investment. “Had LifeLine known the foregoing facts it would never have invested in Ozy Media,” the lawsuit says.

In an interview included in the Times report on the matter, Mr. Watson said that the impersonator was Ozy’s co-founder and chief operating office, Samir Rao. He also said that the company’s board was made aware of the incident shortly afterward. Mr. Rao has not commented on the matter.

LifeLine Legacy Holdings is part of LifeLine Financial Group, a firm started by Humble Lukanga, who escaped genocide and famine in Uganda and moved to the United States at age 11. LifeLine manages the money of athletes and celebrities, including the National Football League player Marshon Lattimore and the actress and producer Issa Rae. All told, it oversees some $500 million for about 50 clients, most of them Black, Mr. Lukanga told The Washington Post in August.

LifeLine said in the suit that it was approached by Mr. Rao late last year and that it agreed to invest $2 million in Ozy Media in February after receiving assurances that the company had a “strong business performance, investments by high profile institutional investors, high viewer metrics, and competent and honest company management.” Mr. Rao and Mr. Watson also told LifeLine executives that Goldman Sachs was planning “a substantial investment” in the company, the lawsuit says.

Around May 2021, the lawsuit claims, Mr. Rao told LifeLine that Alphabet or one of its Google affiliates would lead another fund-raising round with a $30 million investment in Ozy Media. LifeLine then made a second investment, buying about $250,000 in Ozy shares as part of that round, the suit says.

In a statement issued by its board on Friday, Ozy announced that it had shut down. But in appearances on NBC and CNBC on Monday, Mr. Watson said he was trying to bring the company back to life. In an email to Ozy subscribers, he criticized the coverage of the company but also expressed some regret, writing, “As deeply proud as I am of the work that our team has done, I also wish we had done many things differently.” He added that he looked forward “to building OZY back stronger, healthier and better.”

On Tuesday, Mr. Watson continued his media tour, saying in an interview on the radio show “The Breakfast Club” that he was a majority owner of Ozy Media’s common stock. Charlamagne Tha God, a host of “The Breakfast Club,” disclosed on the show that he was an investor in Ozy.

Mr. Watson also said in the interview that Google had given Ozy a written offer this year to invest $25 million. (Google declined to comment.)

LifeLine is seeking a jury trial and has asked that it be reimbursed for all the money it invested in Ozy. It has also asked the court to award punitive damages.

Credit…T.J. Kirkpatrick for The New York Times

Frances Haugen, a former product manager at Facebook who leaked internal documents to The Wall Street Journal that have generated numerous revelations about the company, told senators on Tuesday that Facebook needed “to admit they did something wrong, and they need help to solve these problems.”

In her answers, Ms. Haugen consistently provided lawmakers with a road map for the next steps. She has cited research they can demand from Facebook, and has suggested paths forward on regulation. Our reporter Sheera Frenkel writes that, if the senators follow her guidance, this has the potential to be one of the most impactful congressional hearings on Big Tech.

The hearing was part of Ms. Haugen’s tour aimed at bringing more government oversight to the social media giant. She appeared on “60 Minutes” on Sunday night and is expected to meet with European regulators this month. Ms. Haugen has warned that Facebook does not have the incentive to change its core goal of increasing engagement — even with harmful content — without intervention from regulators.

“I am here today because I believe that Facebook’s products harm children, stoke division, weaken our democracy and much more,” Ms. Haugen said.

Speaking to Facebook in the abstract, she said, “You can declare moral bankruptcy, you can admit you did something wrong. And we can more forward.”

Updates from our technology reporters as Ms. Haugen testifies SEE FULL COVERAGE →

Credit…Ng Han Guan/Associated Press

A Chinese real estate developer missed a key payment to foreign bondholders this week, heightening the persistent fears of a coming crisis in China’s real estate sector.

The developer, Fantasia Holdings Group, a company specializing in luxury properties that was founded by the niece of Zeng Qinghong, a former vice president, said on Monday night that it had failed to make a final payment of $206 million. The disclosure surprised investors already on edge after two missed payments from China Evergrande Group, the world’s most indebted developer.

Jittery investors sold shares of other developers on Tuesday, sending some stocks down as much as 10 percent. The yields on developers’ bonds were trading at nearly a decade high, meaning the cost of borrowing for the companies had shot up.

In the disclosure made on Monday night, Fantasia said its board would “assess the potential impact on the financial condition and the cash position of the group under the circumstances.”

Fantasia, like Evergrande, is based in the southern Chinese city of Shenzhen, but unlike its peer, Fantasia had not shown difficulties in paying its bills until now. By failing to make its final payment on Monday, Fantasia prompted a default. The company also failed this week to make a $108 million repayment on a loan from Country Garden Services Holdings, another real estate company, according to a filing on Monday.

Evergrande roiled global markets last month after it failed to make a payment to foreign bondholders. Investors began to reconsider the long-held assumption that Evergrande was too big to fail and could therefore rely on a government bailout. Now, many investors are questioning whether other developers will face similar challenges.

Chinese developers are under pressure from regulators to pay off their debts and tighten their belts after years of borrowing freely from bondholders and banks.

Beijing is now trying to limit the exposure of banks to the real estate sector, leaving companies like Evergrande and Fantasia struggling to find the cash they need to continue their operations and pay outstanding bills and bonds.

Evergrande has more than $300 billion in debts alone. Other real estate giants, such as Vanke and Country Garden, are facing debt piles worth more than $200 billion, though they are not under as much strain as Evergrande.

Investors are worried that the financial troubles will scare off home buyers and make it more difficult for other developers to continue their operations.

Chinese developers will have to make more than $28 billion in U.S. dollar bond payments in 2022, according to the agency Fitch Ratings, another signal that China’s real estate market is facing headwinds even after the country’s remarkable rebound from the pandemic.

“The risk of a sharper slowdown in real estate activity can’t be ruled out,” Tommy Wu, an economist at Oxford Economics, wrote in a recent note to clients. “Especially at a time when China’s economic momentum is slowing after last year’s strong recovery.”

The S&P 500 rose 1.1 percent on Tuesday, rebounding from a drop the day before. The Nasdaq composite rose 1.3 percent.

Shares of Big Tech firms, which had tumbled on Monday, were higher. Facebook rose 2.1 percent, a day after it fell nearly 5 percent. The social network’s apps, which include WhatsApp and Instagram, were down for several hours on Monday.

Facebook has been under scrutiny for weeks after a whistle-blower, Frances Haugen, shared internal documents indicating, among other things, that the company knew Instagram was worsening teenagers’ body-image issues and that it had a two-tier justice system. Ms. Haugen testified in front of Congress on Tuesday about Facebook’s impact on young users. In her testimony, she encouraged lawmakers to demand more documents and internal research from Facebook, stating that it was only through complete transparency that Congress could eventually regulate social media.

Stocks have dropped sharply over the past month amid lingering concerns about the coronavirus and the lack of a policy consensus in Washington over a huge spending package. On Monday, the S&P 500 fell 1.3 percent amid those concerns, bringing the index more than 5 percent below its Sept. 2 record.

Oil prices rose, with West Texas Intermediate, the U.S. crude benchmark, up 1.7 percent to $78.93 a barrel. The Organization of the Petroleum Exporting Countries and its allies said in a meeting on Monday that they would stick to a previous decision to increase supply by 400,000 barrels per day in November. Shares of energy companies, including Marathon Oil and Occidental Petroleum, were among the best performers in the S&P 500.

European stock indexes were higher, with the Stoxx Europe 600 up 1.2 percent. Asian markets were mixed.

Credit…Ryan Christopher Jones for The New York Times

A federal jury in San Francisco has ordered Tesla to pay nearly $137 million to a Black elevator operator who accused the carmaker of ignoring racial abuse he faced while working at the automaker’s factory.

The plaintiff, Owen Diaz, said he worked at the factory in Fremont, Calif., for about a year in 2015 and 2016. There, he said, a supervisor and other colleagues repeatedly referred to him using racial slurs. He gave an account of his experience in a 2018 article in The New York Times.

In an interview on Monday evening, Mr. Diaz said he was relieved by the jury’s verdict, delivered earlier in the day. “It took four long years to get to this point,” he said. “It’s like a big weight has been pulled off my shoulders.”

He said employees had drawn swastikas and scratched a racial epithet in a bathroom stall and left drawings of derogatory caricatures of Black children around the factory. Despite repeated complaints, the company did little to address the behavior, he said.

“It’s not like they were removing the offensive behavior; they would just let people keep adding and adding,” he said.

The jury agreed with Mr. Diaz’s assertion that Tesla had created a hostile work environment by failing to address the racism he faced. A vast majority of the award — $130 million — was punitive damages against the company. The rest, $6.9 million, was for past and future noneconomic damages to Mr. Diaz.

“It’s a great thing when one of the richest corporations in America has to have a reckoning of the abhorrent conditions at its factory for Black people,” Mr. Diaz’s lawyer, Lawrence Organ of the California Civil Rights Law Group, said in an interview.

Mr. Diaz said he had reached a breaking point when he witnessed similar racist epithets directed at his son, Demetric, who secured a job — his first — at the company with Mr. Diaz’s help.

“My son watched his father being broken in front of him,” Mr. Diaz said.

In a message to Tesla staff members that was posted on the company’s website, Valerie Capers Workman, a human resources executive, noted that Mr. Diaz was a contractor, not a Tesla employee, and played down the allegations in the lawsuit.

“In addition to Mr. Diaz, three other witnesses (all non-Tesla contract employees) testified at trial that they regularly heard racial slurs (including the N-word) on the Fremont factory floor,” she wrote. “While they all agreed that the use of the N-word was not appropriate in the workplace, they also agreed that most of the time they thought the language was used in a ‘friendly’ manner and usually by African-American colleagues.”

The company, she wrote in the email, was responsive to Mr. Diaz’s complaints, firing two contractors and suspending another. Tesla does not believe the facts justify the verdict, she wrote, but acknowledges that the company was “not perfect” in 2015 and 2016. “We’re still not perfect,” she added. “But we have come a long way.”

Mr. Diaz sued Tesla alongside his son and another Black former employee, but only the elder Mr. Diaz’s claims made it to trial. It was not clear whether Tesla planned to appeal the verdict and the damages award.

Kitty Bennett contributed research.

Credit…Felix Schmitt for The New York Times

Almost everything that German factories need to operate is in short supply, not just computer chips but also plywood, copper, aluminum, plastics and raw materials like cobalt, lithium, nickel and graphite, which are crucial ingredients of electric car batteries.

Europewide, exports would have been 7 percent higher in the first six months of the year if not for supply bottlenecks, according to the European Central Bank. Germany is particularly sensitive because of its dependence on manufacturing and trade.

Nearly half of Germany’s economic output depends on exports of cars, machine tools and other goods, compared with only 12 percent in the United States. Economists have begun to predict a “bottleneck recession.”

Already many firms are increasing their inventories of parts, ordering raw materials further in advance and finding creative — some might say desperate — ways to keep products moving out the factory gates. Traton, Volkswagen’s truck unit, said last month that it was cannibalizing hard-to-find components from trucks that had been built but not sold, and reinstalling them in trucks for which there were firm orders.

Businesses are caught in a vicious cycle. Robert Ohmayer, global head of purchasing at Voith, a company based in Heidenheim that builds and equips paper factories and hydropower plants, calls it the toilet paper effect.

Just as panicked consumers hoarded toilet paper at the beginning of the pandemic, companies fearful of running short of key materials are ordering more than they need and stashing them away in warehouses. That has created even more shortages.

Companies had little choice. “We are ordering more to protect our business,” Mr. Ohmayer said.

Longer term, companies have thought about ways to bulletproof their supply lines, for example by buying parts and raw materials closer to home rather than from subcontractors on the other side of the planet. Some political leaders have even suggested that the pandemic could have a silver lining, because it will inspire companies to bring manufacturing back to Europe and the United States, creating well-paying factory jobs.

But disentangling the networks that move products around the globe is not so easy, and maybe not even a good idea, some economists and business managers say.

The slowdown has turned the German economy into a test case of how companies can become less vulnerable to power shortages in China or ships stuck in the Suez Canal. READ THE ARTICLE →

Credit…Stefani Reynolds for The New York Times

Southwest Airlines said on Monday that it would require all of its more than 54,000 employees to be fully vaccinated against the coronavirus by the first week in December to remain employed.

Gary Kelly, the company’s chief executive, said that the budget carrier needed to follow competitors, including United Airlines, Alaska Airlines and Jet Blue, in requiring shots for its employees. The company has contracts with the federal government, which now requires all employees at federal contractors be vaccinated.

The airline industry was hard hit during the pandemic as borders closed, tourism evaporated and remote working kept business travelers at home. In recent months, it has seen an uptick in business as more people get vaccinated and travel restrictions are relaxed around the globe.

United Airlines mandated vaccines for its 67,000 U.S.-based employees in August. American Airlines, Alaska Airlines and JetBlue have since made similar announcements.

Southwest employees must be fully vaccinated by Dec. 8 or “be approved for a religious, medical or disability accommodation,” the company said.

  • Target announced that its employees would receive an extra $2 per hour for working on specific days during the holiday season. Hourly employees working in stores, Target headquarters and service centers will receive the additional pay on Saturdays and Sundays from Nov. 20 to Dec. 19, and on Dec. 24 and Dec. 26. Supply chain employees will receive the extra pay for a two-week period. The announcement comes as retailers struggle with supply chain disruptions ahead of the holiday season.

Share This :
Copyright © All rights reserved. | Newsphere by AF themes.