Although Shanghai began in mid-April to prioritize several hundred companies for resuming work, foreign business organizations have said that doesn’t mean the factories can operate at full capacity.
Tian Yuhao | China News Service | Getty Images
BEIJING — Auto production plunged in April as Covid lockdowns halted nearly all non-essential business in the metropolis of Shanghai, according to a report from the China Passenger Car Association.
Five major car companies in Shanghai saw production plunge by 75% in April compared to March, the association said in a report Tuesday. Production at major foreign automakers’ joint ventures in the northern city of Changchun — which also temporarily locked down to control Covid — dropped by 54% during that time, the report said.
Nationwide, China’s passenger car production also plunged in April, dropping by 41.1% year-on-year and by 46.8% compared to the previous month, the report said.
The auto sector in China accounts for about one-sixth of jobs and roughly 10% of retail sales, according to official figures for 2018 compiled by the Ministry of Commerce.
Shanghai began locking down in earnest in late March.
Although the city began to prioritize several hundred companies for resuming work in mid-April, foreign business organizations have said that doesn’t mean the factories can operate at full capacity. Suppliers may also remain closed or unable to transport parts.
Tesla‘s Shanghai Gigafactory, which reopened with much fanfare about three weeks ago, remains subject to ongoing Covid uncertainty.
This week, the company had to reduce production in Shanghai due to Covid-related issues, according to JL Warren Capital CEO and Director of Research Junheng Li. A supplier had to close temporarily due to Covid, limiting the availability of parts for Tesla’s Model Y.
Tesla did not respond to a request for comment.
— CNBC’s Lora Kolodny contributed to this report.
SpaceX president defends Elon Musk over sexual misconduct allegations
SpaceX CEO Elon Musk participates in a postlaunch news conference inside the Press Site auditorium at NASA’s Kennedy Space Center in Florida on May 30, 2020, following the launch of the agency’s SpaceX Demo-2 mission to the International Space Station.
SpaceX President and COO Gwynne Shotwell defended Elon Musk in an email to employees last week, responding to sexual misconduct allegations directed at the CEO, CNBC has learned.
“Personally, I believe the allegations to be false; not because I work for Elon, but because I have worked closely with him for 20 years and never seen nor heard anything resembling these allegations,” Shotwell wrote in a companywide email sent on Friday and seen by CNBC.
Musk has denied the allegations, which claim he propositioned a flight attendant on one of SpaceX’s private jets in 2016, calling them “wild accusations.”
In a response to Business Insider, which reported the allegations and that the flight attendant was paid $250,000 severance after confronting the company, Musk said there is “a lot more to this story,” describing it as a “politically motivated hit piece.” Neither Musk nor SpaceX’s vice president of the legal department, Christopher Cardaci, denied the payment in statements to Business Insider.
Shotwell emphasized in her email that she “will never comment on any legal matters involving employment issues” before noting Musk publicly denied the allegations as “utterly untrue” in a tweet.
Shotwell, who is No. 2 at SpaceX and the company’s top female executive, also noted in the email that SpaceX has a “ZERO tolerance” policy for harassment, adding that every accusation is taken seriously and investigated, “regardless of who is involved.”
SpaceX did not immediately respond to CNBC’s request for comment on Shotwell’s email.
SpaceX President and COO Gwynne Shotwell
Jay Westcott / NASA
Judge blocks auction of ‘Wizard of Oz’ dress by Catholic University
A blue and white checked gingham dress, worn by Judy Garland in the “Wizard of Oz,” hangs on display, Monday, April 25, 2022, at Bonhams in New York.
Katie Vasquez | AP
A federal judge in New York blocked Tuesday’s scheduled auction of a dress worn by Judy Garland in “The Wizard of Oz” that had been expected to fetch up to $1 million or more for The Catholic University of America.
Monday’s injunction barring a sale of the dress by Bonhams auction house in Los Angeles came more than two weeks after a Wisconsin woman sued to stop the sale, claiming it belonged to the estate of her late uncle, the Rev. Gilbert Hartke.
Barbara Hartke’s lawsuit now will proceed in Manhattan federal court.
Judge Paul Gardephe ordered Catholic U., which is located in Washington, D.C., and Bonhams not to sell the dress until the lawsuit is resolved.
Anthony Scordo, the attorney for Barbara Hartke, in an email to CNBC said, “I am pleased with the ruling preventing the sale.”
” I feel the judge carefully reviewed the submissions of all parties and came to a fair result,” Scordo said.
Hartke received the “Oz” dress in 1973 as a gift from Academy Award-winning actress Mercedes McCambridge while serving as head of Catholic U.’s drama school, which he founded. It is not known how MacCambridge obtained the costume from the classic 1939 film.
As an heir to the priest, Barbara Hartke stands to inherit a fraction of the ownership dress if she prevails in her lawsuit.
The dress had been missing for decades before it was found in a trash bag in a room at the drama school last year. Catholic U. then moved to put it up for auction, generating widespread media coverage last month.
Catholic U. argues that it is the legal owner of the dress, because Hartke, as a Roman Catholic priest, had taken a vow of poverty and that the dress was intended to benefit the school.
The school also submitted affidavits from a grand-nephew of Hartke who remembered that “my grand-uncle Father Gilbert Hartke said to me that I could not have it as the dress belonged to Catholic University.”
That man, Thomas Kuipers, with a cousin said that they and other descendants of the priest supported the auction of the dress with the understanding that it was given as a gift for the school.
The dress is one of only two dresses known to still exist of the several created for Garland to wear in “The Wizard of Oz.”
The other dress was auctioned in 2015 by Bonhams for more than $1.5 million.
As number of billionaires climbs, new calls for wealth taxes emerge
A mobile billboard calling for higher taxes on the ultra-wealthy depicts an image of billionaire businessman Jeff Bezos, near the U.S. Capitol on May 17, 2021 in Washington, DC.
Drew Angerer | Getty Images
A new billionaire was created on average about every 30 hours during the Covid-19 pandemic, according to a new report by Oxfam, a global charity focused on eliminating poverty.
Now, 573 more people around the world can claim billionaire status compared to 2020 when the pandemic began, for a current total of 2,668 billionaires.
At the same time, their wealth has soared 42% or $3.78 trillion during the Covid-19 pandemic, for a current total of $12.7 trillion.
Yet 263 million people are at risk of falling into extreme poverty this year, signaling deepening wealth inequality exacerbated by the pandemic.
The widening divide between the haves and have-nots highlights the need for more taxes on the wealthiest, according to Oxfam.
“We really need for Congress to step in and for the administration to step in and tax the most wealthy in our society so that we can really start to invest in public services and in working people,” said Irit Tamir, director of the private sector department at Oxfam America.
The report comes as business leaders, politicians and billionaires meet face-to-face this week in Davos, Switzerland, for the first time in two years.
Political leaders on Capitol Hill, including President Joe Biden, have put forward their own proposals to make the wealthy pay more.
“Right now, the average billionaire — there are about 790 of them or so in America — has a federal tax rate of 8%,” Biden tweeted on Sunday.
“No billionaire should be paying a lower tax rate than a teacher, a firefighter, an electrician or a police officer,” he said.
There are two main ways policy makers can “tax the rich,” according to Howard Gleckman, senior fellow at the Urban-Brookings Tax Policy Center.
That includes either taxing the income or taxing the wealth of rich people.
“Generally, what we do in the U.S. is we tax income,” Gleckman said. “We don’t really tax wealth.”
That could change, based on some proposals that have been put forward. One key idea that has received attention is taxing unrealized capital gains, or the value of assets that have not yet been sold.
This may be tricky with privately held businesses, particularly when it comes to determining a value both the IRS and owners can agree on. Consequently, one idea from Sen. Ron Wyden, D-Ore., calls for applying this tax annually to just publicly-traded assets. Other non-traded assets would instead be taxed when they are sold.
This approach could become complicated for taxpayers if the value of their assets declines, and they have to reconcile the taxes they have already paid.
Another approach would be to get rid of a mechanism that allows people to avoid paying taxes on the increases in the value of assets over their lifetimes, formally known as a step-up in basis at death.
For example, suppose you buy a stock for $10, and then it is worth $100 when you die. When your heirs receive the stock, their basis will be $100, based on current rules. Consequently, they will not be taxed on the $90 increase in value that happened during your lifetime.
That could be changed so that heirs will owe taxes on any gains since the original cost basis, or the $10 at which you originally purchased the stock.
However, one key disadvantage to this change is it would take a long time for the government to raise revenue, since it requires the stock owner to die and for their heir to sell it. “That can take decades,” Gleckman said.
With any of the proposals, the government will have to strike a balance between generating money and trying to limit the administrative challenges any implemented changes require.
Most Americans will never have to worry about paying these taxes, even if they have $5 million or $10 million in assets.
“This is really for people with extreme wealth,” Gleckman said.
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