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TALKING POINTS

Volkswagen apologies for racially-tinged ad

Associated Press

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Volkswagen apologizes for racially-tinged ad

In the brief video, a dark-skinned man is pushed off a city street and onto a sidewalk by a giant white hand. Then another giant hand takes him by the head and pushes him toward a doorway, before he is summarily flicked inside. The 10-second ad by Volkswagen, to promote its new Golf on Facebook and Instagram, set off a controversy this week as observers pointed to its racist symbolism. The carmaker pulled the ad on Tuesday. “We posted a racist advertising video on Volkswagen’s Instagram channel. We understand the public outrage at this. Because we’re horrified, too,” said Jurgen Stackmann, a member of the Volkswagen brand’s board of management, in a statement posted on LinkedIn on Twitter. “We’re ashamed of it and cannot explain how it came about.” Stackmann referred to the “guilt of our company” because of its close ties to the Nazis in the 1930s and ‘40s. “That is precisely why we resolutely oppose all forms of hatred, slander/propaganda and discrimination.” An animated slogan that appears at the end — “Der Neue Golf” or “The New Golf” — briefly appears to spell out a racist slur in German, the magazine Der Spiegel said. German television said the giant hand could be interpreted as a “white power” gesture. Volkswagen said it would investigate how the ad was made, “with full transparency and consequences.”
— NEW YORK TIMES

TECHNOLOGY

Dell to trim some employee benefits during global softening

Dell Technologies Inc. has suspended some employee benefits, signaling that the computer hardware giant is cutting costs to contend with the weakening global economy. The company will discontinue contributions to employees’ 401(k) retirement plans under a matching program, beginning June 1 and continuing at least until the end of the fiscal year, Dell chief operating officer Jeff Clarke wrote to employees in a recent memo. Dell has also frozen external hiring, internal promotions and raises for the rest of the fiscal year, a person familiar with the matter said. Dell hasn’t yet conducted mass layoffs or cut the salaries of rank-and-file employees. Dell entered the COVID-19 pandemic with some challenges, including falling demand for data-center hardware, computer component shortages, and a massive pile of debt stemming from its acquisition of EMC Corp. Chief executive Michael Dell has agreed to take a pay cut during the coronavirus crisis. — BLOOMBERG NEWS

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TECHNOLOGY

China’s new plan to overtake the US in tech

Beijing is accelerating its bid for global leadership in key technologies, planning to pump more than a trillion dollars into the economy through the rollout of everything from wireless networks to artificial intelligence. In the master plan backed by President Xi Jinping, China will invest an estimated $1.4 trillion over six years, calling on urban governments and private tech giants such as Huawei Technologies Co. to lay 5G wireless networks, install cameras and sensors, and develop AI software. The new infrastructure initiative is expected to drive mainly local giants from Alibaba and Huawei to SenseTime Group Ltd. at the expense of US companies. As tech nationalism mounts, the investment drive will reduce China’s dependence on foreign technology, echoing objectives set forth previously in the Made in China 2025 program. Such initiatives have already drawn fierce criticism from the Trump administration, resulting in moves to block the rise of Chinese tech companies such as Huawei. — BLOOMBERG NEWS

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FINANCE

Morgan Stanley sees only half of employees back by year end

Morgan Stanley chief executive James Gorman joined other finance-industry leaders in warning that operations won’t be fully back to normal this year. “Under no circumstance will the employees be forced to come back in 2020 to their desk when they have any concern or fear over their health and safety,” Gorman said at the firm’s virtual shareholder meeting. He said he expects closer to 50 percent of employees back in offices by the end of the year. — BLOOMBERG NEWS

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HOUSING

Home loan delinquencies rise sharply

Delinquencies on US home loans surged by 1.6 million in April, the biggest one-month gain ever, as soaring job losses fueled a 90 percent jump in missed payments and government programs offered penalty-free delays. Mortgages at least 30 days in arrears almost doubled to 6.45 percent, the highest rate since January 2015, according to data compiled by Black Knight Inc. About 3.4 million loans were more than 30 days late and an additional 211,000 properties were in foreclosure or on track for repossession by lenders. A federal relief program allows borrowers impacted by the virus an initial six-month payment deferral without penalty. About 4.7 million borrowers were in forbearance as of May 12, according to Black Knight. The pace of delinquency increases is unprecedented but it’s still uncertain whether the volume of problem loans will return to the levels they reached after the last decade’s foreclosure crisis. About 7.9 million mortgages were noncurrent in January 2010, according to Black Knight. In another sign of housing weakness, US sales of previously-owned homes sank 17.8 percent in April from a month earlier, the biggest drop since 2010, the National Association of Realtors reported Thursday. — BLOOMBERG NEWS

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MANUFACTURING

Tesla offers plant workers unpaid leave until May 31

Tesla Inc. will give workers at its US plants the ability to take unpaid leave through the end of the month if they’re wary of returning to work, according to an internal memo. The electric-vehicle maker announced the provision along with plans to reinstate its attendance policy starting Friday. Employees who are concerned they might expose an at-risk member of their household can sign and submit a document to take leave until May 31. The memo applied to workers at the company’s auto plant in Fremont, Calif., and its battery factory near Reno, Nev. — BLOOMBERG NEWS

INTERNATIONAL

Congress eyes rules for publicly-traded companies from China

Speaker Nancy Pelosi said the House will review legislation that would impose restrictions on Chinese companies listed on US stock exchanges. The California Democrat said the legislation approved by the Senate that could lead to some Chinese companies being barred from US stock exchanges passed with no debate so the House would have to give it careful consideration. The Senate bill, introduced by John Kennedy, a Republican from Louisiana, and Chris Van Hollen, a Democrat from Maryland, was approved Wednesday by unanimous consent and would require companies such as Alibaba Group to certify that they are not under the control of a foreign government. Democratic Representative Brad Sherman of California introduced companion legislation in the House the same day, an indication that there’s likely to be bipartisan support there. Amid increasingly tense relations between the world’s two largest economies, lawmakers are focusing on ways to put pressure on China from multiple angles, including its treatment of ethnic and religious minorities, censorship, and its handling of the initial coronavirus outbreak in Wuhan. Under the Senate legislation, if a company can’t show that it is not under control of a foreign government, or the US Public Company Accounting Oversight Board isn’t able to audit the company for three consecutive years to determine that is the case, the company’s securities would be banned from the exchanges. — BLOOMBERG NEWS

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ENERGY

Disputed pipeline completes first section

A Canadian company has built the first piece of the disputed Keystone XL oil sands pipeline across the US border and started work on labor camps in Montana and South Dakota. But it has not resolved a courtroom setback that would make it hard to finish the $8 billion project. Environmentalists and Native American tribes are bitterly opposed to the line because of worries over oil spills and that burning the fuel would make climate change worse. The company’s three-year construction timeline was put into doubt following a May 15 ruling from a federal judge that cancelled a key permit needed to build the line across hundreds of streams, wetlands, and other water bodies. The work in South Dakota began amid high tensions between South Dakota Governor Kristi Noem and two Native American tribes that have been outspoken opponents of the pipeline. The governor is trying to force two tribes — the Cheyenne River Sioux Tribes and the Oglala Sioux Tribe — to remove checkpoints they have set up on highways leading to several potential construction sites in an attempt to keep infections away from their reservations. — ASSOCIATED PRESS