In August, hundreds of actors excoriated the health plan of the American union for professional television and film actors for changes that would result in some members no longer qualifying for health insurance, because they were unable to work during the pandemic.
Now, 10 participants in the plan are suing, in a class-action filing.
Ed Asner, a 91-year-old seven-time Emmy winner, and nine other participants in the SAG-AFTRA Health Plan filed a lawsuit in federal court in Los Angeles on Tuesday objecting to benefit cuts and changes in eligibility requirements in the plan that are to take effect on Jan. 1. The SAG-AFTRA Health Plan and its trustees are named as defendants.
Mr. Asner, who is the lead plaintiff, is a former SAG president and a current member of the SAG-AFTRA national board. He will lose his coverage when the changes take effect because he will not reach the new qualifying earnings threshold, according to the lawsuit, which claims the cuts “wrongfully and illegally” discriminate based on age. (Members who are 65 or older will no longer be allowed to use their residuals income to qualify for the new threshold if they are taking a union pension.)
The lawsuit claims two counts of breach of fiduciary duty, and one count each of engaging in a prohibited transaction and failing to disclose information material to plan participants.
“Far less draconian and equitable adjustments were available for a one-time event like Covid-19,” according to the lawsuit.
Many performers are facing a loss of health care coverage at a time when film jobs are scarce and live theater is almost completely shut down. The health insurance fund that covers stage actors announced changes in October that raised the number of weeks they would need to work to qualify for coverage, and Local 802, the musicians’ union, has started a #SaveNYCMusicians campaign aimed at shoring up the union’s health fund, which is financed by employer contributions.
The lawsuit seeks financial damages, and to wrest control of the health plan from the trustees and appoint an “independent fiduciary” to manage it and potentially reverse the changes.
On Tuesday, more than a dozen high-profile actors, including Mark Hamill, Whoopi Goldberg and Morgan Freeman, criticized the upcoming benefit cuts for seniors in a video released by the SOS Health Plan, a group of SAG-AFTRA members opposed to the Health Plan changes.
“Why isn’t the union fighting for me?” Ms. Goldberg asks in the video. “I paid into the health plan for my whole career,” she says, adding that she was very angry.
A spokeswoman for the SAG-AFTRA Health Plan did not respond to a request for comment on Wednesday.
In August, the health plan had said in an email to members that it would raise the floor for eligibility to those earning $25,950 a year, from $18,040, effective Jan. 1, and that premiums would also increase. According to the email, the changes were in response to projected deficits of $141 million this year and $83 million in 2021.
Nearly 20,000 people have signed a petition asking the health plan to reverse the changes.
“Every actor in America is stuck right now,” John E. Brady, a film, television, and commercials actor who has been a union member for more than 30 years, told The Times in August.
HONG KONG — First, meat came from farms and forests. Then, it came from factories. More recently, entrepreneurs have been making it from plants.
Some have wondered whether there’s a more advanced approach: Could meat be grown in a laboratory, from existing cells? That effort has faced multiple challenges, from skepticism over something that comes from a lab to questions about what governments might think.
The nascent laboratory meat industry won a small victory Wednesday on that last point, as an American start-up became the first to win government approval — in this case, an announcement by the city state of Singapore — to sell the fruit of its labs to the public in the form of “cultured chicken.”
The company, Eat Just, is based in San Francisco and describes its product as “real, high-quality meat created directly from animal cells for safe human consumption.” Singapore’s Food Agency said on Wednesday that it had approved the product for sale as an ingredient in chicken nuggets.
“This is a historic moment in the food system,” Eat Just’s chief executive, Josh Tetrick, said by telephone on Wednesday. “We’ve been eating meat for thousands of years, and every time we’ve eaten meat we’ve had to kill an animal — until now.”
Singapore’s move is “the world’s first regulatory approval for a cultivated meat product,” said Elaine Siu, the managing director of the Good Food Institute Asia Pacific, a nonprofit organization that promotes cultivated meat and plant-based substitutes for animal products.
“Anyone in this field would know that this is the world’s first because everyone has been waiting — and trying to lobby and fight for it — for the past few years,” added Ms. Siu, whose nonprofit is affiliated with a group with the same name in Washington.
ImageCredit…Ore Huiying for The New York Times
Singapore’s Food Agency said on Wednesday that it approved the nuggets after Eat Just submitted a safety assessment to the agency’s “novel food” working group, whose seven members are outside experts on food science, toxicology, nutrition, epidemiology and other fields. The agency includes “cultured or cell-based meat grown under controlled conditions” under its definition of novel foods, along with some species of algae, fungi and insects.
“We’re not aware of other countries that have given approval for cultured meat products so far,” Ginny Tan, a spokeswoman for the agency, said in an email.
Mr. Tetrick said that an unnamed Singapore restaurant would begin selling the product “soon enough to begin making a reservation,” but he declined to provide any further details. The company has previously said that it would cost $50 to make a single nugget. It now says on its website that the nuggets will be available at “price parity for premium chicken you’d enjoy at a restaurant.”
Eat Just already sells an egg-like product that it makes from mung beans, Mr. Tetrick said. The product is sold in the United States and China, he said, and the company plans to expand to South Korea early next year.
Mr. Tetrick said he hoped that Singapore’s decision to approve his company’s “GOOD Meat” chicken nuggets would spur regulators in the United States and countries in Western Europe to move faster to regulate lab-grown meat.
“It’s not good for what we’re trying to do to make the food system better if Singapore’s the only one that has this approval,” he said.
ImageCredit…Eat Just Inc, via Reuters
In the United States, the Food and Drug Administration’s approval is not required for most new ingredients, including imitation meat developed by vegan food brands. Companies can hire consultants to run tests, and they have no obligation to inform the agency of their findings, a process known as self-affirmation.
Ms. Siu of the Good Food Institute said that to her knowledge, no regulator in the world had said that a cultured-meat product could go straight to market. “I think from a business perspective you would want to have the regulator’s blessing,” she added.
The meat business has long faced criticism from animal-rights activists who argue that eating meat is inhumane. The industry has been attracting more scrutiny in recent years for its impact on climate change.
Livestock accounts for around 14.5 percent of the world’s greenhouse gas emissions each year — roughly equivalent to the emissions from all the cars, trucks, airplanes and ships combined. Per gram of protein, cattle have more of an impact than pork, chicken or egg production, largely because they belch up methane, a potent planet-warming gas.
In late October, Megan Sim, 28, who owns an online greeting card shop called Saucy Avocado, noticed her average order size was bigger than usual.
Ms. Sim typically sells a card or two per customer in the run-up to the holidays. But this year, her coronavirus-themed greetings — featuring hazmat suits, Zoom references and wishful lines about vaccines — have been selling in bulk.
“A lot of my customers say they’re getting ready to ship cards out to all of their loved ones,” Ms. Sim said. “It’s sweet and heartbreaking at the same time.”
After months of curtailed travel and socializing, many people remain frustratingly distant from friends and family. Sixty-one percent of Americans changed their Thanksgiving plans this year, scaling back large gatherings or forgoing in-person dinners completely, according to a November survey by Axios-Ipsos.
An October survey by Enksy, an online crafts marketplace, found that 46 percent of respondents planned to send physical cards this season, with the number jumping to 62 percent for respondents who are avoiding in-person gatherings.
Card makers, like Hallmark and Paper Source, are reaping the benefits and reporting rising sales.
For the greeting card industry, which has slumped for decades, it’s a significant turnaround. When all we want for Christmas is to be together, sending a cheeky card can be the next best thing.
There are plenty to choose from: Hallmark debuted a pandemic-themed “Appreciation Station” of cards to express gratitude for nurses, mail carriers and doctors. Winnie Park, the C.E.O. of Paper Source, estimated that just shy of 10 percent of the company’s Christmas cards have pandemic themes. Her favorite is the “Zoom Santa,” portrayed in a video chat with his elves, sans pants.
“Humor is a big element for us,” Ms. Park said. “With Covid it’s been like the stages of grief. The humor feels appropriate because people have been in this for so long.”
Many card makers began producing pandemic-themed cards in March, and have seen sales creep up as the virus — and its attending isolation — dragged on. At Paper Source, bulk orders are on the rise. “It’s a shift in behavior,” Ms. Park said. “More people are taking the time to send cards and tell people, ‘I care about you.’”
Victoria Feargrieve, 29, an Etsy shop owner in London, started making Covid-19-themed cards during the first lockdown in Britain. She said that about three-quarters of her orders now are bulk orders for 10 or more of the same card.
“The pandemic definitely makes people want to connect,” she said. “Sending a card is more personal than sending an email or text.”
In late April and early May, Hallmark’s trend experts conducted a poll on the value of greeting cards versus text or email during the pandemic. Sixty percent of respondents said cards packed a bigger punch.
“Now put yourself in the holiday season after a long year,” said Lindsey Roy, the chief marketing officer of Hallmark. “You’re starting to get those cold dark winter days. Man, talk about needing connections.”
Some designers, watching the death toll from Covid-19 rise, were hesitant to capitalize on the pandemic in their work. “On Etsy in particular, when there are social issues going on, people tend to jump in them quickly. But this felt heavy,” said Jen Diehl, 39, who makes handcrafted cards, signs and wine labels through her company the Ritzy Rose.
By late spring, however, she realized demand for pandemic-themed cards was there, and she made Mother’s Day cards with Covid-19 messaging. Their sales were much higher than her 2019 Mother’s Day cards.
So for the holidays, she put masks on many of her standard designs, which feature baby animals, astronauts and Santa. Packs of 24 cards are her best sellers this year, she said.
“We’re all burned out from Zoom and screen time,” she said. “Putting something in the mail is more important than ever.”
Verna Starling, 42, who runs Honest AF Cards, a wry and often crass line out of Houston, began creating pandemic-themed designs to reflect her own reality.
In April she canceled a wedding trip. Then an international vacation. Soon, she was making a checklist of everything she had given up this year.
“We are all like, I can’t wait for 2021,” she said. “We won’t be able to have New Year’s celebrations. I wanted to create a card people can send because they may not be able to be with friends and family this year.”
To Ms. Park, the swell in card sales is cause for optimism after a year of division and isolation.
“It shows we value connection, and we won’t take it for granted,” she said. “If that’s a silver lining coming out of this pandemic, then that’s a good one.
A United Nations commission voted on Wednesday to remove cannabis for medical use from a category of the world’s most dangerous drugs, such as heroin, a highly anticipated and long-delayed decision that could clear the way for marijuana research and medical use.
The vote by the Commission for Narcotic Drugs, which includes 53 member states, considered a series of recommendations from the World Health Organization on reclassifying cannabis and its derivatives. But attention centered on a key recommendation to remove cannabis from Schedule IV of the 1961 Single Convention on Narcotic Drugs — where it currently sits, alongside dangerous and highly addictive opioids like heroin.
Experts say the approval of the recommendation will have no immediate implications for loosening international controls, and governments will still have jurisdiction on how to classify cannabis. But many countries look to international conventions for guidance, and U.N. recognition is a symbolic win for advocates of drug policy change who say that international law is out of date.
“The world has changed since the early 1960s,” said Alfredo Pascual, a journalist for Marijuana Business Daily, a news resource for the industry. He said the current scheduling of cannabis was a deterrent to research and that a change in the United Nations classification would most likely bolster legalization efforts around the world.
“We will have the U.N., the main drug policy body, recognizing the medical usefulness of cannabis,” he said ahead of the vote.
Still, the decision is highly contentious in many countries, which has led to unusual delays in voting on the recommendations first made by the World Health Organization in 2019. The United States, European nations and others were in favor of the proposal, while China, Egypt, Nigeria, Pakistan and Russia strongly opposed.
“It’s been a diplomatic circus,” said Kenzi Riboulet-Zemouli, an independent drug policy researcher who has closely monitored the vote and the position of member states. Some countries that were initially opposed to the downgrading, like France, have since changed their position, he added.
But a recommendation to add cannabis derivatives such as dronabinol and THC to Schedule I, the lower lever, did not garner enough support to pass.
“Continuing down this path not only denies our citizens important medicinal products that relieve suffering but also represents a betrayal of the public trust,” said Michael Krawitz, executive director for Veterans for Medical Cannabis Access, adding that the drug was an important medication that could provide unique pain relief.
The overhaul of cannabis policy, particularly around legalization for medical use, has moved at a rapid pace over the last few years, said Jessica Steinberg, managing director at the Global C, an international cannabis consulting group, who has attended U.N. meetings. Industry insiders are hoping the vote will open the field for research into the therapeutic benefits of the drug.
But the impact on the American and European markets is driving the focus, she added. In the United States, where more states legalized the use of medical and recreational marijuana in the recent election, the market is expected to expand to more than $34 billion by 2025, according to Cowen, an investment and financial services company.
Before the vote this week and other decriminalization efforts, share prices of some cannabis companies jumped.
But aside from the financial boon it could provide for American and European marijuana markets, downgrading the dangers of cannabis may have the biggest impact on countries that have more conservative policies, such as many Caribbean and Asian nations.
“Something like this does not mean that legalization is just going to happen around the world,” Ms. Steinberg said. But “it could be a watershed moment.”
ImageImageCredit…Alex Wong/Getty Images
Team Biden’s statement of intent
When the president-elect introduced his proposed economic team, he summarized their vision: “Given a fair shot and equal chance, there’s nothing beyond the capacity of the American people.” As word has leaked of his nominees, their backgrounds suggested that the incoming administration’s focus would be on workers and income inequality. Yesterday, they backed this up in their own words.
“We were raised to respect the dignity of work,” Vice President-elect Kamala Harris said. Then, Mr. Biden’s economic brain trust emphasized their personal experiences with the plight of workers, sure to be a major theme in the administration’s early days:
Growing up in “working-class Brooklyn” forever marked the Treasury secretary nominee Janet Yellen, who pledged to run “an institution that wakes up every morning thinking about” people’s jobs, paychecks, struggles, hopes and dignity.
The deputy Treasury secretary pick, Wally Adeyemo, said his immigrant parents instilled in him a sense of responsibility to “the country that gave us so many opportunities.” He promised to work “to ensure that everyone has the fair chance they deserve.”
“Budgets are not abstractions,” proclaimed Neera Tanden, prospective director of the Office of Management and Budget. “I’m here today because of social programs. Because of budgetary choices.”
Cecilia Rouse, the nominee for chair of the Council of Economic Advisers, said that a spike in unemployment while she was in college made it “impossible to separate what we were learning in the classroom from what I knew was going on in towns across the country,” leaving her “drawn to study the labor market in all of its dimensions.”
The other appointees for the C.E.A. highlighted memories of parental unemployment and the importance of unions. “Security, union benefits, a place in the neighborhood, a place in the middle class” is what a job at Boeing meant to Heather Boushey’s father. Jared Bernstein said his mother’s proudest moment wasn’t when he got a Ph.D. but when he got a union card.
Behind the rhetoric, securing aid for workers will be difficult, if the long partisan standoff over economic stimulus package is any indication. When he takes office, Mr. Biden will try to balance Republican accusations of a socialist takeover with criticism from progressive Democrats that he is embracing capitalism too closely. That debate is neatly captured by the nomination of Ms. Tanden, who faces a tough confirmation battle with critics on both the right and the left.
A variation on “America First.” Mr. Biden told The Times’s Tom Friedman, “I want to make sure we’re going to fight like hell by investing in America first.” Although this echoes President Trump’s policy branding, in Mr. Biden’s case it means huge government investment in research into energy, biotech and A.I., as well as infrastructure. At the same time, his foreign policy instincts have traces of his predecessor’s anti-globalization stance: There’s a recognition that Americans increasingly feel “the gains from globalization and our economic system needed to be shared more widely,” Nathan Sheets, an Obama-era Treasury Department official, told The Wall Street Journal.
This might lead to tensions within his team. Mr. Biden told Tom that he wouldn’t immediately lift the 25 percent tariffs that Mr. Trump imposed on Chinese goods. Ms. Yellen has been openly skeptical of tariffs.
HERE’S WHAT’S HAPPENING
Britain approves Pfizer’s Covid-19 vaccine. The country became the first in the West to authorize a coronavirus vaccine. (Russia and China didn’t wait for large-scale trials.) Britain will begin vaccinations next week, starting in nursing homes.
Centrist senators present a compromise stimulus plan. A bipartisan group unveiled a $908 billion package to break the political logjam. But Senate Republicans are working on a far smaller proposal that is unlikely to win Democratic support, while Democratic leaders are pushing for more spending.
SoftBank reportedly winds down its stock options trade. The Japanese tech investor is letting options expire — mostly by the end of the month — after investors complained about its risky multibillion-dollar strategy, Bloomberg reports. SoftBank will retain stock investments in Big Tech companies like Amazon and Facebook.
Salesforce clinches a $27.7 billion deal for Slack. The acquisition, Salesforce’s biggest, is the latest in a wave of workplace software takeovers. But Salesforce investors may be unhappy with the hefty deal premium: Its shares are down in premarket trading. (Slack’s are up nearly 50 percent since reports of the deal emerged.)
President Trump threatens defense cash to attack a tech legal shield. In two tweets, Mr. Trump said he would veto a $1 trillion funding bill unless Congress eliminated Section 230 of the Communications Decency Act, which protects online platforms from legal liability for content posted by users.
Fresh from selling itself, Kind buys another
Just weeks after agreeing to be acquired by Mars, the snack maker Kind will announce today a $400 million deal to buy a like-minded food company, Nature’s Bakery. Kind’s strategy is to turn itself into a “health and wellness platform,” amassing a range of products it makes or acquires. That plan was in place when Mars was only a minority investor, and “our partners at Mars wants us to continue,” the Kind founder and C.E.O. Daniel Lubetzky told DealBook.
A family affair. Nature’s Bakery was founded in 2011 by the father-and-son team of Dave and Sam Marson. The company, which sold a minority stake to private equity firm VMG Partners in 2016, now offers “plant-based, nut-free and dairy-free” products in retailers like Costco and Target. Nature’s Bakery will keep its supply chain separate from Kind’s, to ensure its products stay nut-free.
Preserving the culture. The Nature’s Bakery deal, and Kind’s takeover before it, are the latest in a string of acquisitions by big food brands of smaller, upstart rivals with cultures that are hard to replicate at large corporations. These large acquirers have sought to avoid past stumbles in similar deals, when they swallowed brands whole or confused consumers by pumping out new iterations of niche products too quickly. That has meant creating stand-alone units to manage younger, hipper brands: Hershey, for example, runs several through Amplify Snack Brands, the parent of SkinnyPop, which it acquired in 2018.
Kind, which will operate independently within Mars, plans a hands-off management approach with Nature’s Bakery, while still offering the benefits of the global distribution might of the maker of M&M’s and Snickers. “We want to create a culture where we really empower our partners for them to decide what’s best for their brands,” Mr. Lubetzky said.
“We are definitely not going to launch a hostile takeover. If somebody said it would be a good idea to merge with Tesla, we would have this conversation.”
— Tesla and SpaceX C.E.O. Elon Musk, in an interview after accepting a lifetime achievement award from Axel Springer.
Cocoa cases raise bitter questions
Could an American corporation abet child slavery by doing business with suspect suppliers abroad, and should it be held liable if it does? Those were among the thorny questions raised yesterday at a Supreme Court hearing on cases against Cargill and Nestlé U.S.A. brought by Malians who were forced into child slavery on cocoa farms in Ivory Coast.
“Many of your arguments lead to results that are pretty hard to take,” Justice Samuel Alito said after the companies’ lawyer argued that, under the Alien Tort Statute, they can’t be held liable for human rights violations based on business relationships with farmers abroad. The justice wondered how far that argument went, asking if it extended to a business that “surreptitiously hires agents” to kidnap and enslave children, ensuring “bargain prices” on cocoa or coffee. But allowing such suits isn’t straightforward, either.
“They know that’s where the cheap beans come from,” the Malians’ counsel argued. He said that the corporations set up a supply chain known to be tainted by human rights violations, while other companies sourced responsibly and paid more. Justice Stephen Breyer responded to the allegation philosophically, saying that it described businesses that operate “blinking” or with “open eyes.” Speaking over the lawyer’s protestations, the justice wondered who should be responsible for stopping this sort of thing.
It is one of the big questions of the era. Governments, companies, investors and shoppers increasingly agonize about the responsibilities and relationships created by consumption. Notably, The Cocoa Barometer, a report by N.G.O.s and trade unions released yesterday, supplied one possible answer, calling on governments of major consuming nations to pass laws that hold companies accountable for human rights abuses in their supply chains.
THE SPEED READ
Airbnb is seeking a valuation of nearly $35 billion in its I.P.O. (NYT)
The online health care arm of JD.com raised $3.5 billion in its Hong Kong I.P.O. (Bloomberg)
A bipartisan commission said that Congress should give the Federal Trade Commission more power over mergers involving foreign buyers. (WSJ)
Politics and policy
Geoffrey Berman, the former U.S. attorney for Manhattan fired by President Trump in June, will join the law firm Fried Frank as the head of its white-collar defense practice. (NYT)
President Trump has considered pre-emptive pardons for three of his children, his son-in-law Jared Kushner, and Rudy Giuliani. Separately, the Justice Department is investigating a potential bribery scheme involving pardon seekers. (NYT)
The European Central Bank’s top economist reportedly called banks and investors after policy meetings to offer clarifications, breaking with tradition. (WSJ)
Amazon is joining a broad shift away from Intel’s computer chips. (NYT)
Hewlett Packard Enterprise is moving its headquarters to Houston, the latest Silicon Valley company to decenter from California. (CNBC)
Best of the rest
More than 40 American corporate giants — including Amazon, Citigroup and Ford — are urging Congress to support President-elect Joe Biden’s plan for the U.S. rejoin the Paris climate accord. (WSJ)
“Reinventing Workers for the Post-Covid Economy” (NYT)
The arc of women’s work attire during the pandemic: from blazers to “coatigans.” (NYT)
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ImageImageCredit…Mary Altaffer/Associated Press
Exclusive: Diversify, or delist
Nasdaq will ask the S.E.C. this morning for permission to adopt a new requirement for the 3,249 companies listed on its main U.S. stock exchange: have at least one woman and one “diverse” director and report data on board diversity — or face consequences.
Nasdaq will require boards to have at least one woman and one director who self-identifies as an underrepresented minority or L.G.B.T.Q. (Those categories are not, of course, mutually exclusive.) To give companies time to comply, they will need to publicly disclose their board diversity data within a year of S.E.C. approval, and have at least one woman or diverse director within two years. Bigger companies will be expected to have one of each type of director within four years.
Companies that don’t disclose diversity information face potential delisting, while those that report their data but don’t meet the standards will have to publicly explain why. Over the past six months, Nasdaq found that more than 75 percent of its listed companies did not meet its proposed diversity requirements.
Nasdaq lobbied the S.E.C. to make diversity disclosure a rule for all companies. “The ideal outcome would be for the S.E.C. to take a role here,” Adena Friedman, Nasdaq’s C.E.O., told DealBook. “They could actually apply it to public and private companies because they oversee the private equity industry as well.”
It would be the first time a major stock exchange demanded more disclosure than the law requires, which Ms. Friedman described as “an unusual step.” It raises questions about whether exchanges could use their listing rules to force action on other hot-button issues, like climate change.
The move isn’t taking place in a vacuum. Goldman Sachs announced that it would require companies it helps take public to have at least one diverse board member. A new California law imposes a minimum number of minority directors on companies headquartered in the state. And institutional investors are pushing for more diversity under the E.S.G. banner.
Nasdaq cites research showing the benefits of board diversity, from higher-quality financial disclosures to the lower likelihood of audit problems. “Diversity of the board is an important element of giving investors confidence in the future sustainability of the company,” Ms. Friedman said. “It’s not like we’re saying this is an optimal composition of a board, but it’s a minimum level of diversity that we think every board should have.”
What happens next: After Nasdaq files its request, the S.E.C. will solicit public comments. That typically lasts several weeks, and then the commission will decide how to proceed.
HERE’S WHAT’S HAPPENING
A November to remember for stocks. The S&P 500 gained nearly 11 percent in November, its fourth-best month in 30 years, amid progress on coronavirus vaccines and clarity on the U.S. presidential election. (U.S. stock futures are also up today.) Speaking of gains, shares in Moderna more than doubled yesterday after the company sought emergency F.D.A. authorization for its Covid-19 vaccine.
U.S. officials are split on the risks facing the American economy. In testimony before the Senate today, Treasury Secretary Steven Mnuchin is expected to call state and local lockdowns threats to economic growth, while the Fed chairman, Jay Powell, will cite rising coronavirus infection rates as the biggest challenge to the U.S. economy.
G.M. scales back its partnership with the electric vehicle maker Nikola. G.M. said that it wouldn’t make an electric pickup for the start-up or take an equity stake, though it planned to supply hydrogen fuel cells. Shares in Nikola, which has been accused of exaggerating its capabilities, fell 27 percent.
Exxon Mobil takes a huge write down. The oil giant said it would write off up to $20 billion in investments in natural gas and drastically cut spending on exploration and production.
Credit Suisse names a new chairman and discloses a big fine. The Swiss bank has hired António Horta-Osório, the outgoing C.E.O. of the British lender Lloyds, as its chairman — and said it faced a $680 million penalty in the U.S. over residential mortgage-backed securities. Separately, UniCredit’s C.E.O., Jean Pierre Mustier, plans to step down in April after the Italian lender’s board rejected his strategic plan.
ImageCredit…Lucy Hewett for The New York TimesFor the first time since the pandemic shuttered the economy eight months ago, the end is in sight.
The development of vaccines that appear to be safe, effective and ready for wide distribution in the months ahead means it’s now possible to envision a post-Covid economy by summer.
There is a distinct possibility that the economy could roar back to full health quickly as soon as public health conditions allow. But for that to happen, the United States will need to make it through what might be a cold, dark winter in which damage could be done to the tissue of the economy that prevents that rapid healing.
With many service businesses having already depleted cash reserves and the government aid they received earlier in the year, another wave of failures looms. And that imperils not only individual shops and restaurants, but also the commercial landlords they pay rent to, and the state and local governments relying on their tax dollars.
The challenge is to keep everything going long enough to prevent irreparable damage to the ecosystem on which a huge share of American economic activity is built — office buildings filled with workers, hotels and airplanes that are full, vibrant street retail, and the public services that maintain it all — when so many individual elements of the ecosystem are under severe strain.
Boka Restaurant Group in Chicago had 2,000 employees working at 20 restaurants before the pandemic, and in the immediate aftermath of shutdowns in March furloughed more than 1,800 of them, said Kevin Boehm, a co-founder of the group.
But as the weather warmed and Chicago allowed extensive outdoor dining, the company’s restaurants were able to claw back. By midsummer, sales were down only 35 percent to 40 percent compared with normal. A refundable loan through the federal government’s Paycheck Protection Program helped meet rent and payroll obligations.
Now, the federal loan is long gone, the weather has turned cold again, and a new wave of Covid-19 infections has put a pall on indoor dining. Sales are down 90 percent from normal levels.
“I’ve spent the last two days sitting in a room with employees who are being furloughed or having a salary reduction,” Mr. Boehm said in mid-November. “This is happening right now. One of our restaurants is one of the highest grossing in America, and last night we did $900 of sales. On a normal night, that restaurant would have done $50,000.”
ImageCredit…Lucy Hewett for The New York Times
For restaurants, many expenses move pretty much in line with sales, like ingredient costs and labor. But others, especially rent, do not; in a healthy restaurant, rent would amount to 6 percent to 10 percent of revenue. When revenue collapses but fixed costs do not, as is the case now, a restaurant cannot survive for long. At some of his restaurants, rent is now an untenable 50 percent of sales.
“If there’s no federal assistance, it will wipe out a very large portion of the independent restaurants in America,” said Mr. Boehm, who with dozens of other restaurateurs formed the Independent Restaurant Coalition to seek help from Congress. “We can’t make it to April or May.”
If there are widespread restaurant failures, as the coalition argues is inevitable without a major new federal rescue, it will create an ugly situation next summer. You would simultaneously see hungry diners eager to return to restaurants; vacant former restaurant spaces; unemployed restaurant workers; and restaurant entrepreneurs bankrupted and in no position to start over.
ImageCredit…Lucy Hewett for The New York Times
A related challenge could hold the national economy back even after a vaccine is widely available. There has been a slow-moving crisis in some commercial real estate sectors, as missed rent payments start to pile up.
When retailers and restaurants miss rent payments, or hotel rooms sit empty, property owners can typically endure for a while, but defaults are inevitable if those conditions persist. According to Trepp, a commercial real estate research firm, that is now starting to happen.
The delinquency rate for mortgage securities backed by retail real estate was 14.3 percent in October, up from 4.6 percent a year earlier. Delinquencies for lodging properties were 19.4 percent, up from 1.5 percent.
And that reflects missed loan payments before the latest surge in virus cases and renewed lockdowns. Moreover, the new wave of trouble comes after commercial property owners have already taken dire steps to keep making debt payments, such as hotel owners making loan payments out of reserves meant for upkeep.
In other words, brace for a wave of commercial foreclosures, which could create closings and other disruptions as new owners seize control of shopping malls, hotels and other properties.
ImageCredit…Lucy Hewett for The New York Times
“It’s already started,” said Manus Clancy, a senior managing director at Trepp, referring to foreclosures in retail real estate. “Borrowers are now cash-flow negative because of bankruptcies, so they’re throwing in the towel or looking to restructure. That part of the problem remains after we have a vaccine.”
That could mean more malls and shopping centers that are converted to other uses — shifts that would have happened eventually anyway, but are being accelerated. It’s hard to get back to shopping at your local mall — or maintain a job there as a store clerk — if the mall is closed while a new owner tries to figure out how to build a retirement community on the land.
“There are these little land mines across the economic landscape,” said Joe Brusuelas, chief economist at RSM, an accounting firm that services midsize businesses. “Even if they don’t matter at the macro level, at the local level they can matter a lot.”
State and municipal governments face similar lagged effects, as the economic activity that has not occurred since March results in less money coming into tax collection offices — with the exact timing depending on how a given state funds itself.
Businesses must pay sales taxes relatively promptly, for example, so the contraction in activity has already showed up in those collections. But income tax payments arrive with a longer lag, which pushes some shortfalls into spring 2021. And while a fall in commercial real estate prices could affect property tax collections, that would play out over years.
“States and local governments are thinking of this as a multiyear problem,” said Tracy Gordon, a senior fellow at the Urban Institute. “It’s mainly because of the way tax systems work. Most are inherently backward-looking.”
Projections vary widely depending on the severity of the virus in a state; the composition of its economy; and its tax system. But most states are expecting revenue to fall in the fiscal year ending in 2021, with several projecting 10 percent to 20 percent declines, according to data compiled by the Urban Institute.
The federal government, which unlike states is free to run a fiscal deficit, could close some or all of that gap. Democrats widely support such an action. In the absence of that, weak revenue collection would mean states and localities would probably need to cut deeper, adding to the 1.3 million jobs they have already slashed since February. Those job losses would arrive just as public health restrictions are loosening and the economy is otherwise surging ahead.
At the same time, the industries that have benefited most from the pandemic could see a reversal of fortune. As Americans have halted spending on services like travel and sports attendance, they have redirected much of that spending toward physical goods, with particularly strong numbers evident for food meant to be consumed at home, home improvement goods and exercise equipment.
In the third quarter, Americans’ spending on goods was up 6.9 percent from a year earlier, while services spending was down 7.2 percent. If those patterns were to fully reverse to pre-pandemic levels, goods-producing industries would experience a pullback in 2021 equivalent to what the services industry experienced in 2020.
The good news is that even as those goods sectors have increased production, they knew that the surge in demand might be temporary and have avoided long-term investments.
In a conference call, Jeffrey L. Harmening, the chief executive of the packaged food giant General Mills, told investors that the company was expanding its internal production capacity only for products for which there had been rising demand before the pandemic, like cereal and fruit snacks.
For other products that have had a temporary demand surge, they sought outside suppliers. “We’re going external, not due to lack of confidence, but primarily because it provides greater agility,” such that if demand doesn’t stay high, “it’s easier to get out and we don’t spend the capital doing it.”
Still, plenty of workers who have enjoyed lots of overtime because of the pandemic could see a reversal, with bicycle manufacturers and grocery store cashiers experiencing a loss of income just as flight attendants and bartenders regain theirs.
Combine all these forces, and the story is one of both hope and despair.
“We’re still in sight of both the good place and the bad place,” said Adam Ozimek, chief economist for Upwork, a platform for temporary labor. “If we pass another round of business relief and help for households, there is a really strong possibility we’re going to make it through to the vaccine with an economy that doesn’t have massive long-term damage. If we don’t do that, we could still end up in a situation as bad or worse than the Great Recession.
“It’s totally up for grabs.”
There is now a light at the end of the tunnel, in other words, but it is still an open question exactly how far the tunnel goes and how bright the light will shine when we arrive.
ImageCredit…Lucy Hewett for The New York Times
After months of deliberation and debate, a panel of independent experts advising the Centers for Disease Control and Prevention is set to decide on Tuesday which Americans it will recommend to get the coronavirus vaccine first, while supply is still short.
The panel, the Advisory Committee on Immunization Practices, will vote in a public meeting on Tuesday afternoon, and it is expected to advise that health care workers be first in line, along with residents of nursing homes and other long-term care facilities. If the C.D.C. director, Dr. Robert R. Redfield, approves the recommendations, they will be shared with states, which are preparing to receive their first vaccine shipments as soon as mid-December, if the Food and Drug Administration approves an application for emergency use of a vaccine developed by Pfizer.
States don’t have to follow the C.D.C.’s recommendations, but most probably will, said Dr. Marcus Plescia, the chief medical officer for the Association of State and Territorial Health Officials, which represents state health agencies. The committee will meet again soon to vote on which groups should be next to receive priority.
Here are answers to some common questions about the vaccine and its distribution.
Who will get the vaccine first?
Based on its recent discussions, the C.D.C. committee will almost certainly recommend that the nation’s 21 million health care workers be eligible before anyone else, along with three million mostly elderly people living in nursing homes and other long-term care facilities.
A staggering 39 percent of deaths from the coronavirus have occurred in long-term care facilities, according to the committee. But there won’t be enough doses at first to vaccinate everyone in these groups; Pfizer and Moderna, the two companies closest to gaining approval for their vaccines, have estimated that they will have enough to vaccinate no more than 22.5 million Americans by January. So each state will have to decide which health care workers go first.
They may choose to prioritize critical care doctors and nurses, respiratory therapists and other hospital employees, including cleaning staff, who are most likely to be exposed to the coronavirus. Or they may offer the vaccine to older health care workers first, or those working in nursing homes, who are at higher risk of contracting the virus. Gov. Andy Beshear of Kentucky said on Monday that most of his state’s initial allocation would go to residents and employees of long-term care facilities, with a smaller amount going to hospital workers.
It’s important to remember that everyone who gets a vaccine made by Pfizer or Moderna will need a second shot — three weeks later for Pfizer’s, four weeks for Moderna’s.
Who gets it next?
The C.D.C. committee hinted last week that it would recommend essential workers be next in line. About 87 million Americans work in food and agriculture, manufacturing, law enforcement, education, transportation, corrections, emergency response and other sectors. They are at increased risk of exposure to the virus because their jobs preclude them from working from home. And these workers are disproportionately Black and Hispanic, populations that have been hit especially hard by the virus.
Individual states may decide to include in this group employees of industries that have been particularly affected by the virus. Arkansas, for example, has proposed including workers in its large poultry industry, while Colorado wants to include ski industry workers who live in congregate housing.
After essential workers, the priority groups likely to be recommended by the C.D.C. committee are adults with medical conditions that put them at high risk of coronavirus infection, and people over 65. But again, some states might diverge to an extent, choosing, for example, to vaccinate residents over 75 before some types of essential workers. All other adults would follow. The vaccine has not yet been thoroughly studied in children, so they would not be eligible yet.
ImageCredit…Stefani Reynolds for The New York Times
Who will make state-level decisions about priority groups?
Each state has a working group, composed largely of public health officials, that has been planning for months and making decisions about vaccination campaigns. Each state’s top health official and governor will probably sign off on final plans.
How long will states focus on one priority group before moving to the next in line?
States don’t need to reach everyone in one priority group before moving on to the next, according to the C.D.C. advisory committee. But more federal guidance is expected on the subject.
When will the first doses of a vaccine be shipped, and where will they go?
Federal officials have said they plan to ship the first 6.4 million doses within 24 hours after the F.D.A. authorizes a vaccine, and the number each state receives will be based on a formula that considers its adult population. Pfizer will ship special coolers, each containing at least 1,000 doses, directly to locations determined by each state’s governor. At first, almost all of those sites will probably be hospitals that have confirmed they can store shipments at minus 94 degrees Fahrenheit, as the Pfizer vaccine requires, or use them quickly.
The Road to a Coronavirus Vaccine
Words to Know About Vaccines
Confused by the all technical terms used to describe how vaccines work and are investigated? Let us help:
Adverse event: A health problem that crops up in volunteers in a clinical trial of a vaccine or a drug. An adverse event isn’t always caused by the treatment tested in the trial.Antibody: A protein produced by the immune system that can attach to a pathogen such as the coronavirus and stop it from infecting cells.Approval, licensure and emergency use authorization: Drugs, vaccines and medical devices cannot be sold in the United States without gaining approval from the Food and Drug Administration, also known as licensure. After a company submits the results of clinical trials to the F.D.A. for consideration, the agency decides whether the product is safe and effective, a process that generally takes many months. If the country is facing an emergency — like a pandemic — a company may apply instead for an emergency use authorization, which can be granted considerably faster.Background rate: How often a health problem, known as an adverse event, arises in the general population. To determine if a vaccine or a drug is safe, researchers compare the rate of adverse events in a trial to the background rate.Efficacy: A measurement of how effective a treatment was in a clinical trial. To test a coronavirus vaccine, for instance, researchers compare how many people in the vaccinated and placebo groups get Covid-19. The real-world effectiveness of a vaccine may turn out to be different from its efficacy in a trial.Phase 1, 2, and 3 trials: Clinical trials typically take place in three stages. Phase 1 trials usually involve a few dozen people and are designed to observe whether a vaccine or drug is safe. Phase 2 trials, involving hundreds of people, allow researchers to try out different doses and gather more measurements about the vaccine’s effects on the immune system. Phase 3 trials, involving thousands or tens of thousands of volunteers, determine the safety and efficacy of the vaccine or drug by waiting to see how many people are protected from the disease it’s designed to fight.Placebo: A substance that has no therapeutic effect, often used in a clinical trial. To see if a vaccine can prevent Covid-19, for example, researchers may inject the vaccine into half of their volunteers, while the other half get a placebo of salt water. They can then compare how many people in each group get infected.Post-market surveillance: The monitoring that takes place after a vaccine or drug has been approved and is regularly prescribed by doctors. This surveillance typically confirms that the treatment is safe. On rare occasions, it detects side effects in certain groups of people that were missed during clinical trials.Preclinical research: Studies that take place before the start of a clinical trial, typically involving experiments where a treatment is tested on cells or in animals.Viral vector vaccines: A type of vaccine that uses a harmless virus to chauffeur immune-system-stimulating ingredients into the human body. Viral vectors are used in several experimental Covid-19 vaccines, including those developed by AstraZeneca and Johnson & Johnson. Both of these companies are using a common cold virus called an adenovirus as their vector. The adenovirus carries coronavirus genes.Trial protocol: A series of procedures to be carried out during a clinical trial.
When will a vaccine be available to the general public, and where will people receive it?
Federal officials have repeatedly suggested that people who are not in the priority groups — healthy adults under 65 who don’t work in health care or otherwise qualify as essential workers — should have access to the vaccine by May or June, because there will be enough supply by then. But a lot will have to go right for that to happen. One factor is whether, or when, other vaccines besides Pfizer’s and Moderna’s are approved.
Can employers like hospitals or grocery stores require their employees to be vaccinated?
Employers do have the right to compel their workers to be vaccinated. Many hospital systems, for example, require annual flu shots. But employees can seek exemptions based on medical reasons or religious beliefs. In such cases, employers are supposed to provide a “reasonable accommodation”; with a coronavirus vaccine, a worker might be allowed to wear a mask in the office instead, or to work from home.
Three companies have announced preliminary data indicating their vaccines are effective, and there are dozens of additional candidates in clinical trials. Can I choose which vaccine I get?
This depends on a number of factors, including the supply in your area at the time you’re vaccinated and whether certain vaccines are found to be more effective in certain populations, such as older adults. At first, the only choice is likely to be Pfizer’s vaccine, assuming it is approved. Moderna asked the F.D.A. for emergency authorization on Monday; if approved, it would most likely become available within weeks after Pfizer’s.
Are there any side effects from the shot?
Some participants in both Pfizer’s and Moderna’s trials have said they experienced symptoms including fever, muscle aches, bad headaches and fatigue after receiving the shots, but the side effects generally did not last more than a day. Still, preliminary data suggests that, compared with most flu vaccines, the coronavirus shots have a somewhat higher rate of such reactions, which are almost always normal signs that the body’s immune response is kicking in. At the meeting of the C.D.C. advisory committee last week, some members said it would be important for doctors to warn their patients about possible side effects and assure them of the vaccines’ safety.
How do I know it’s safe?
Each company’s application to the F.D.A. includes two months of follow-up safety data from Phase 3 of clinical trials conducted by universities and other independent bodies. In that phase, tens of thousands of volunteers get a vaccine and wait to see if they become infected, compared with others who receive a placebo. By September, Pfizer’s trial had 44,000 participants; no serious safety concerns have been reported.
The F.D.A. will also review the data for each vaccine seeking authorization and share it with its advisory committee, which will meet publicly — in the case of the Pfizer vaccine, on Dec. 10 — to ask questions and make a recommendation to the agency. The F.D.A. will then decide whether to approve the vaccine for emergency use.
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In the Before Times, said Rebecca Rittenberg, a 28-year-old who works in advertising sales for Google in New York, one of her favorite parts about going to the office was “showing up in a funky, cool professional outfit.”
A smart pair of pants, colorful or patterned blouses, blazers, skirts, dresses, heeled boots and designer sneakers were all part of her wardrobe, which she used to express her personality and keep up with her stylish ad world colleagues.
Now, after eight months of working from home, and with Google saying workers won’t have to return in person until next summer at the earliest, a big swath of that apparel has been donated and replaced. Ms. Rittenberg’s new definition of “work clothes” includes cashmere cardigans and joggers, headbands, and other cozy garments that fall somewhere in the “healthy in-between” of pajamas and blazers.
“I looked at my stuff I used to wear to the office all the time and thought, ‘When am I ever going to touch this again?’” she said. “Our mind-sets have shifted a bit with this pandemic and the fact that we’ve all been working from home for so long. Once we are back in the office, which I do think will happen, it just seems like a pretty extreme jump to go back to wearing a blazer and pencil skirt and heels again.”
As many professional women have found themselves in an extended period of remote work, their notions of work wear have transformed, shaking up businesses that have sought to outfit them for the office. American office attire was already facing the effects of “casualization” — even Goldman Sachs loosened its dress code last year — but as the pandemic drags on, the shift is accelerating and may stick around for good.
ImageCredit…Haruka Sakaguchi for The New York Times
Bloomingdale’s has watched customers increasingly seek out cashmere, flat shoes, pants with elastic waistbands and other comfy apparel, while brands like Theory have rushed to add more casual clothing to their lines, said Denise Magid, an executive vice president at Bloomingdale’s who oversees ready-to-wear apparel.
“Regardless of when people go back to the office, I think people have grown comfortable with what they’re wearing,” Ms. Magid said. “I just can’t see people giving away the feeling of comfort.”
The retail landscape is changing with the new needs of the remote worker. Bankruptcies this year included Brooks Brothers and the owner of Ann Taylor and Loft. Rent the Runway closed all of its stores and removed its unlimited subscription option. In Gap Inc.’s latest quarter, net sales soared 15 percent at Old Navy and 35 percent at Athleta while plummeting 34 percent at Banana Republic.
Gap named a new head of Banana Republic last week and said on an earnings call that the brand had been “working hard to update its product assortment” for an era of remote work, favoring more casual clothes over tailored garments and suiting.
ImageCredit…Haruka Sakaguchi for The New York TimesImageCredit…Haruka Sakaguchi for The New York Times
Professional women have long been a lucrative market. Retailers see them as customers who tend to have money to spend and are willing to pay for apparel that will help them feel confident in the workplace, fit into busy lifestyles or offer up the right look for a “desk to dinner” sort of day. The attire is often dry-clean only, stiffer and more structured than weekend clothes, and modest in neckline and hemline. Many of those products — and how they are marketed — have now changed.
Last fall, Banana Republic’s site and social media featured colorful heels and models wearing “quintessential Banana Republic with a modern twist — think cozy cable knits and Italian corduroy, double-breasted plaid blazers and moleskin jackets.” This season, its site includes looks for virtual interviews and a “work leisure” section, with soft ponte leggings, turtleneck sweater dresses, cheetah-print socks and “coatigans.”
Some women appear to be clearing out office attire from their closets through donations and resales. The RealReal said consignments of work dresses more than doubled between Aug. 1 and Oct. 15 compared with the same period last year, exceeding significant jumps in consignments of cocktail dresses and evening dresses. On Poshmark, listings of women’s blazers and suit jackets from July to Sept. 30 jumped 30 percent from a year earlier, while listings of women’s pencil skirts rose 32 percent.
ImageCredit…Haruka Sakaguchi for The New York Times
Jackie Temkin, 33, had already started selling many of her more formal Washington, D.C., office clothes on Poshmark after graduating from business school in 2018 and establishing a design studio in Charlottesville, Va. But she said demand for such apparel had seemed to dry up since March.
“I feel that a lot of employers have learned you really can get a lot of stuff done at home and workplace norms from before are no longer applicable,” Ms. Temkin said. She added that her work wardrobe was already radically different from how she recalled her mother dressing for her job as a lawyer.
“She had dress suits and skirt suits and things like that, and that was their uniform every day,” Ms. Temkin said. She recalled her mother once using fake tanner on her legs in the summer to make it look as though she were wearing pantyhose. “It’s just such a huge shift,” she said.
M.M.LaFleur, a seller of stylish women’s workplace apparel that was founded in 2011, has worked to recover from the hit it has taken this year. The brand has cut back on suiting for the spring and leaned more heavily into the “power casual” category, which it introduced several years ago.
ImageCredit…Haruka Sakaguchi for The New York Times
“It was actually inspired by our San Francisco tech customers, who were saying, ‘I can’t wear dresses or a suit to work because then people think I’m interviewing, but I’m also not going to wear a hoodie and sweatpants like the engineers because that is so not me,’” said Sarah LeFleur, the brand’s founder and chief executive. “That style has become more mainstream now, so a lot of what we have been doing is really designing to that woman.”
It includes cashmere sweaters, a “jardigan” jacket and “better than jean” pants. Ms. LeFleur said that while sales of Zoom-friendly tops had initially outpaced bottoms during the pandemic, there was a sudden uptick in pants in June.
She could relate. “After 100 days of being in sweatpants, I needed to feel like I was getting out of bed,” she said, adding that customers have gravitated to pants that look tailored but feel as comfortable as sweatpants.
The company has also rebranded some of its wares. Its crisp-looking “Colby pants,” once marketed in an “Origami Suiting” collection as wrinkle resistant and easy to fold for business trips, were renamed “Colby joggers” online, with new emphasis on their casual appeal and elastic waistband. Sales soared sevenfold. The brand was helped because it already carried machine-washable work wear, a product of Ms. LeFleur’s belief that dry cleaning is “a sexist industry” based on its prices for men’s and women’s clothing.
ImageCredit…Haruka Sakaguchi for The New York Times
Kathryn Minshew, the 35-year-old founder of the Muse, a site for job seekers in their 20s and 30s, said she had become far less tolerant of portions of her wardrobe that she once wore to the office, including trousers and certain dresses.
“I didn’t have very much clothing that was incredibly uncomfortable, but I had a lot of clothing that was normal work wear uncomfortable,” she said. “It was a little bit structured, a little bit tight, it pulls a little bit when you move in certain ways. A lot of work dresses and work tops for women that are fitted, they’re fine, but they’re not the most comfortable things.”
She anticipated that “many women will keep a part of their closet for powerhouse outfits and special occasions.” But, she added, “I do believe it will get smaller over time the longer that the pandemic goes on and therefore the more that we collectively get used to this type of living and working.”
Ultimately, Ms. Minshew said, any longer-term shifts could help ease the pressure women feel to present themselves a certain way in the workplace.
ImageCredit…Haruka Sakaguchi for The New York Times
Indeed, Ms. Rittenberg from Google said she realized that she was dressing for herself more than ever rather than for clients, her team or the office at large, which has been refreshing.
“The pandemic equals so much craze in our life,” she said. It stands to reason, she said, that people are “trying to make their clothes as comfortable, fuzzy and warm as possible so we don’t have an added layer of structure and chaos that we didn’t ask for.”
Exxon Mobil announced on Monday that it would significantly cut spending on exploration and production over the next four years and would write off up to $20 billion of investments in natural gas.
The company struggled to adapt as oil and gas prices tumbled this spring when the coronavirus pandemic took hold. While oil prices have recovered somewhat in recent months, they remain much lower than they were at the start of the year.
The company said it was removing gas projects from its plans in Appalachia, the Rocky Mountains, Oklahoma, Texas, Louisiana, Arkansas, Canada and Argentina.
Darren Woods, Exxon Mobil’s chief executive, said in a statement that the moves were designed to “improve earnings power and cash generation, and rebuild balance sheet capacity to manage future commodity price cycles while working to maintain a reliable dividend.”
Exxon’s board of directors accepted a proposal by management to slash capital expenditures to between $16 billion and $19 billion next year, down from $23 billion in 2020. This year’s capital expenditures had already been reduced from a planned budget of $33 billion, as the company slowed projects in Africa and the Permian Basin in New Mexico and West Texas.
The company said capital spending would be limited to between $20 billion and $25 billion annually through 2025.
In 2010, Exxon Mobil acquired XTO Energy and its natural gas assets for more than $30 billion, just as gas prices were peaking. Over the next decade, the shale boom flooded the market with cheap gas.
Exxon Mobil had previously resisted writing down assets by large amounts. Several of the largest oil companies have recently written down assets, including Royal Dutch Shell by up to $22 billion, BP by more than $17 billion and Chevron by $10 billion.
But Exxon has fared worse than other major oil companies during the pandemic. It was removed from the Dow Jones industrial average in August and has suffered three consecutive quarterly losses. It recently said it would cut 14,000 jobs, or 15 percent of its global work force.
Exxon’s stock, which is down more than 40 percent over the past year, is back to where it was in 2003. Company executives continue to express confidence about the future because Exxon is producing more oil and gas in the Permian Basin and in the offshore waters of Guyana and Brazil. The company has also committed to maintaining its dividend, which yields more than an 8 percent return on its share price.