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Treasury issues rule to block U.S. investors from helping China military
WASHINGTON | The U.S. Treasury Department, seeking to keep the Chinese military from gaining an edge in advanced technologies, issued a rule Monday to restrict and monitor American investments in China in artificial intelligence, computer chips and quantum computing.
The finalized rule arises from an executive order issued in August 2023 by President Joe Biden. The order sought to limit the access that “countries of concern’’ — specifically, China, Hong Kong and Macau — have to American dollars to fund technologies that could be used, for example, to break codes or develop next-generation fighter jets. It will take effect Jan. 2.
“U.S. investments … must not be used to help countries of concern develop their military, intelligence and cyber capabilities’’’ said Paul Rosen, assistant Treasury secretary for investment security. He noted the investments can mean more than just money; they can deliver “intangible benefits,’’ including managerial help and assistance finding top talent and tapping other sources of financing.
Blocking China’s high-tech ambitions is one of the few issues that enjoys broad support in Washington from both Republicans and Democrats.
Biden in May slapped a stiff tariff on electric vehicles from China. He also has imposed export controls to keep the Chinese from acquiring advanced computer chips and the equipment to produce them. Former President Donald Trump has vowed to dramatically increase taxes on all imports from China if voters send him back to the White House.
The Biden administration sought comment from businesses and from U.S. allies before putting out the final version.
In addition to blocking investments, the rule requires Americans and companies in the United States to notify the U.S. government of transactions that involve “technologies and products that may contribute to a threat to the national security of the United States.’’
Violators can be hit with fines of up to $368,136 or twice the value of the prohibited transaction, whichever is greater. Treasury is setting up an Office of Global Transactions to oversee the new rule.
Ford quarterly profit drops almost 26% due to $1B write-offs
DETROIT | Ford’s third-quarter net profit fell nearly 26% as the company took $1 billion in accounting charges to write down assets for a canceled three-row electric SUV.
The Dearborn, Michigan, company said after financial markets closed on Monday that it made $892 million from July through September, compared with $1.2 billion it made a year earlier.
Excluding the one-time items, Ford made an adjusted pretax profit of $2.6 billion, or 49 cents per share. That beat analyst estimates of 46 cents, according to FactSet.
Revenue rose 5.5% to $46.2 billion, also beating Wall Street predictions.
CEO Jim Farley said in a statement Ford has taken tough actions to give it advantages over competitors. The accounting charge and cancellation of the electric SUV were announced in August with a change in strategy toward lower-cost EVs.
Sales in the U.S., Ford’s most profitable market, rose just under 1% during the quarter to about 500,000 vehicles.
Ford reduced its full-year pretax income guidance to $10 billion at the low end of the $ 10 billion to $12 billion it expected at the end of the second quarter.
Chief Financial Officer John Lawler told reporters Monday that the company has removed $2 billion in material, freight and labor costs this year, but that was offset by inflation at its Turkish operations and only a slight reduction in high warranty costs to fix quality problems.
“That’s why we’re at the lower end of our overall guidance,” he said.
He said Ford is focused on reducing warranty and other costs, which will show up in later quarters.
The company’s plans are working, as evidenced by 10 straight quarters of revenue growth.
Shares of Ford fell 5% in trading after Monday’s closing bell.
PepsiCo to close Chicago bottling plant, impacting 150 workers
PepsiCo said Monday it’s closing a Chicago bottling plant, a move the Teamsters union says will impact 150 workers.
PepsiCo said the decision was difficult but it described the 60-year-old building as a facility with “physical limitations.” The company said it would pay workers for the next 60 days even though they won’t be required to work.
Teamsters Local 727, which represents the plant’s workers, said it was informed of the closure early Monday in an email sent by PepsiCo attorneys. The union said PepsiCo violated federal law, which requires employers to give 60 days’ notice of pending plant closures or mass layoffs at locations with 50 or more employees.
“To lay off over a hundred Teamsters workers with no notice to them or the union, in violation of both our collective bargaining agreement and the law, is about as low as you can get,” John Coli Jr., the secretary-treasurer of Local 727, said in a statement.
Coli said the union negotiated a new contract with PepsiCo this summer but wasn’t told about a potential closure. He said the union may take legal action against the company.
PepsiCo said its plans meet “applicable legal requirements” and it will work with the union
“Our top priority is to support our employees during this transition, and our commitment to serve Chicagoland remains strong,” PepsiCo said in a statement.
—From AP reports
