Mexican economy shrinks record 17.3% in April

Mexican economy shrinks record 17.3% in April

Mexico’s economy posted a record contraction in April, official data showed on Friday, as the effects of the coronavirus lockdown devastated economic activity, particularly in manufacturing.

Adjusted for seasonal swings, Latin America’s second-biggest economy contracted 17.3 per cent from March, the biggest fall since modern data began being published in early 1993, according to figures put out by national statistics agency INEGI.

The decline, however, was not as sharp as the 19.4 per cent drop forecast by a Reuters poll of economists.

In unadjusted terms, the economy shrank 19.9 per cent in April compared with a year earlier, the figures showed.

People walk on the street in Mexico City as the outbreak of COVID-19 continues. The country’s health officials say more than 25,000 coronavirus deaths and 200,000 cases have been recorded since the pandemic started. (Carlos Jasso/Reuters)

A breakdown of the data showed that primary activities such as farming, fishing and mining shrank 6.4 per cent from March. Secondary activities, which include manufacturing, plummeted 25.1 per cent and tertiary activities, which cover the service sector, fell 14.4 per cent.

Auto production almost ground to a halt in April, falling by 98.8 per cent on the year, and the country’s main industry group has forecast output in the sector could drop by nearly a third in 2020.

The government hopes the economy fared slightly better in May, when authorities gradually began to permit sectors such as carmaking, mining and construction to start up again. 

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Facebook to change advertising policy as European giant pulls ads

Facebook to change advertising policy as European giant pulls ads

Shares of Facebook and Twitter dropped sharply Friday after European giant Unilever, behind brands such as Ben & Jerry’s ice cream and Dove soap, said it will halt U.S. advertising on Facebook, Twitter and Instagram through at least the end of the year.

In response, Facebook CEO Mark Zuckerberg said the company will change its policies to prohibit hate speech in its advertisements.

Under the new policies, Facebook will ban ads that claim people from a specific race, ethnicity, nationality, caste, gender, sexual orientation or immigration origin are a threat to the physical safety or health of anyone else. 

“Facebook will take extra precautions to help everyone stay safe, stay informed, and ultimately use their voice where it matters most — voting,” Zuckerberg said in a statement, referring to the upcoming U.S. presidential election. 

Unilever said it took the move to protest the amount of hate speech online. It said the polarized atmosphere ahead of November’s election placed responsibility on brands to act.

Shares of both Facebook and Twitter fell roughly seven per cent following Unilever’s announcement.

The company, which is based in the Netherlands and Britain, joins a raft of other advertisers pulling back from online platforms. Facebook in particular has been the target of an escalating movement to withhold advertising dollars to pressure it to do more to prevent racist and violent content from being shared on its platform.

“We have decided that starting now through at least the end of the year, we will not run brand advertising in social media newsfeed platforms Facebook, Instagram and Twitter in the U.S.,” Unilever said. “Continuing to advertise on these platforms at this time would not add value to people and society.”

On Thursday, Verizon joined others in the Facebook boycott.

Sarah Personette, vice-president of global client solutions at Twitter, said the company’s “mission is to serve the public conversation and ensure Twitter is a place where people can make human connections, seek and receive authentic and credible information, and express themselves freely and safely.”

She added that Twitter is “respectful of our partners’ decisions and will continue to work and communicate closely with them during this time.”


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Microsoft to permanently close all 83 physical stores worldwide

Microsoft to permanently close all 83 physical stores worldwide

Microsoft said Friday it is permanently closing its physical stores around the world.

In Canada, seven locations in British Columbia, Alberta and Ontario will be closed. 

Like other retailers, the software and computing giant had to temporarily close all of its stores in late March because of the COVID-19 pandemic.

According to its website, Microsoft has 83 stores worldwide, including 72 stores in the U.S., and several others abroad where it showcases and sells laptops and other hardware.

A ‘strategic change’

Friday’s announcement reflects what the company calls a “strategic change” for its retail business as sales increasingly shift online.

Microsoft said it would reimagine the physical spaces at its four high-profile Microsoft Experience Centres in New York City, London, Sydney, Australia, and at the company’s headquarters in Redmond, Wash..

Microsoft Corp. said the closures would result in a pretax charge of about $450 million US, or five cents per share, taken in the current quarter ending June 30.

The company didn’t say if the move would result in layoffs.

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Amazon looks to self-driving future by acquiring tech company Zoox

Amazon looks to self-driving future by acquiring tech company Zoox

Amazon said Friday that it is buying U.S. self-driving technology company Zoox, which is developing an autonomous vehicle for a ride-hailing service that people would request on their phones.

Seattle-based Amazon did not disclose how much it is paying for Zoox, which was founded six years ago in Foster City, California. Analysts pegged the purchase price at over $1 billion US.

The online retailing giant said Zoox will keep running as a separate business and continue to develop its own autonomous vehicle.

“We’re excited to help the talented Zoox team to bring their vision to reality in the years ahead,” said Amazon’s Jeff Wilke, who runs the company’s retail business.

Amazon entering a new industry?

The deal could drive Amazon into an entirely new business: transporting people from one place to another. But some industry analysts think Amazon’s ultimate goal is to repurpose the Zoox vehicle for its core business, delivering packages to shoppers.

“My guess would be in the near term that Amazon is probably more interested in taking that platform and adapting it as an alternative or complement to its existing fleet of delivery vans,” said Sam Abuelsamid, principal analyst for Guidehouse Insights, who follows autonomous vehicle developments.

Abuelsamid said Zoox has a good autonomous system and was planning to deploy a ride-hailing service next year. It’s also building its own vehicle that can travel in two directions — both ends can be the front and the back — making it ideal for urban deliveries. He sees Amazon converting the small vehicles into mobile lockers that would stop at delivery sites for people to pick up packages.

Amazon didn’t directly answer a question about whether autonomous package delivery is its goal, but said Zoox would “continue working toward their mission to transform mobility as a service by developing a fully autonomous, purpose built vehicle.”

Self-driving vehicles far down the road

The company cautioned that widespread use of autonomous vehicles is still years away and will require a substantial capital investment in a crowded field. The deal puts Amazon, which has grown rapidly from its start as an online bookseller 25 years ago, in competition with Google’s self-driving technology spinoff called Waymo, and General Motors’ Cruise autonomous vehicle unit.

Autonomous delivery would fit with Amazon’s plans to deliver more of its packages on its own and rely less on UPS and the U.S. Postal Service. In recent years it has expanded its fleet of planes, built package sorting hubs at airports and launched a program that lets people start businesses that deliver packages in vans stamped with the Amazon logo.

The investment could complement the $700 million US that Amazon put into electric vehicle startup Rivian in 2019. Rivian, with operations in suburban Detroit and California, has a contract to make 100,000 electric delivery vans for Amazon. The company also has a factory in Normal, Illinois, with extra capacity that could be used to build the Zoox vehicles for Amazon, Abuelsamid said.

Amazon’s acquisition changes the landscape in the autonomous vehicle business by bringing in a deep-pocketed competitor, Abuelsamid said. It increases pressure on smaller companies that are building delivery vehicles, he said.

Amazon’s past autonomous tech ventures

The Zoox acquisition isn’t Amazon’s first foray into autonomous vehicles. Early in 2019, it joined other investors in a $530 million US stake in Aurora Innovation. Aurora recently has focused on a self-driving system for heavy trucks.

Amazon has used autonomous technology to get orders to shoppers: self-driving robots shuffle products around its warehouses and a cooler-sized robot with six wheels has delivered orders in a Seattle suburb. It’s also working on self-piloted drones that fly small goods to customers’ homes.

The deal comes at a time when the power of Amazon and other technology stalwarts such as Google, Facebook and Apple have drawn increasing scrutiny from U.S. lawmakers and antitrust regulators. The pandemic-stricken economy is making it more difficult for startups to raise money to continue work, creating opportunities for the industry’s still-thriving giants to make acquisitions at bargain prices.

Privately held Zoox received $990 million US in funding from investors, according to Crunchbase, which tracks investments in startups.

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Supreme Court of Canada could open door to class-action lawsuit against Uber

Supreme Court of Canada could open door to class-action lawsuit against Uber

Canada’s highest court will issue a ruling this morning in a case involving the ride-sharing service Uber that could have broad implications for the gig economy and labour rights in Canada.

The Supreme Court of Canada’s decision will determine whether a proposed $400 million class-action lawsuit launched by Ontario Uber drivers can move ahead.

Uber is challenging an Ontario Court of Appeal decision that found the company’s contract clause, which relies on a costly arbitration process in the Netherlands to settle disputes, was “unconscionable” and “unenforceable.”

The lower court ruling came after David Heller, a driver for UberEATS, attempted to launch a class-action lawsuit in 2017 to force the company to recognize its drivers as employees rather than independent contractors.

UberEATS driver David Heller triggered legal action against the ride-hailing company after he was asked to accept compensation changes on his phone in order to continue working for the company. (CBC)

Heller, who no longer works for Uber, started legal action after he received a message on his cell phone asking him to accept changes to the way he is compensated.

His lawyer, Lior Samfiru, said Heller agreed because he was out on a delivery in Toronto at the time — and wouldn’t have been paid if he had declined. 

“If the court agrees with Uber, then every company can have its workers sign a document that says the same thing,” Samfiru said.

“That would mean that companies can do whatever they want with impunity.”

Are individuals in the gig economy employees?

Uber won a stay of the proposed class action before Ontario Superior Court because of a clause in the contract that requires all disputes between drivers and the company to go through a mediation process in the Netherlands — at a personal cost of $14,500 US for drivers.

“Practically no one will do that,” Samfiru said.

Toronto-based employment lawyer Lior Samfiru said the case involving Uber comes down to the company’s accountability. (Andy Hincenberg/CBC)

Heller, who had been licensed to use the Uber Driver App since February 2016 in Toronto, earned between $20,800 and $31,200 per year before taxes and expenses.

In November 2018, Ontario’s highest court ruled Uber’s clause amounts to illegally outsourcing an employment standard.

Uber’s maintains that arbitration, not the courts, is the right forum for deciding the validity of an arbitration agreement.

The proposed class-action lawsuit, which has not yet been certified, aims to provide a minimum wage, vacation pay and other protections under Ontario’s Employment Standards Act to anyone who works for Uber or has worked for the company in Ontario since 2012.

If the highest court rules in his favour, Samfiru said it would open up a discussion about whether people in the gig economy are employees.

“We cannot have a system where companies can do whatever they want, whenever they want, without any repercussions,” Samfiru said.

“The only way that we can even balance that inequality somehow is by giving individuals access to tribunals, like the labour relations board, or to our courts across the country.”

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Boeing renews its public pitch to replace Canada’s CF-18 fleet

Boeing renews its public pitch to replace Canada's CF-18 fleet

One of the companies bidding to sell Canada a new fleet of fighter jets made a public pitch today highlighting its long-standing, cross-country economic relationships and history of delivering high-paying aerospace jobs.

The presentation by Boeing executives and an independent research firm arrives against a background of a pandemic-ravaged economy and a looming federal deadline to submit bids to replace the air force’s aging CF-18 fleet.

The aerospace giant, headquartered in Chicago, Ill., is one of three companies that will hand in their final submissions at the end of July with the aim of delivering new jets by 2025.

The other two are Lockheed Martin — with its F-35 stealth jet — and Saab, which will offer up the latest version of its Gripen fighter.

A U.S. F-35A fighter jet prepares to land at Chungju Air Base in Chungju, South Korea, March 29, 2019. (Kang Jong-min/The Associated Press)

Boeing plans to pitch its Super Hornet fighter. The most up-to-date version the jet, known as the Block 3, was delivered recently to the U.S. Navy for use on aircraft carriers.

In its presentation, the company estimates the value of its direct economic activity in Canada — both commercial and defence — at $2.3 billion, resulting in 11,000 jobs across the country. The independent report estimates that when indirect spending is taken into account, the U.S. multinational contributes $5.3 billion and 20,700 jobs to Canada’s economy.

Boeing’s decision to make its case publicly is significant in part because federal finances are reeling under the weight of an anticipated $252 billion deficit and staggering levels of unemployment brought on by the COVID-19 pandemic.

Defence spending tends to suffer whenever federal governments — regardless of their political stripes — grapple with high deficits.

There has been bad blood between the Liberal government and Boeing ever since the U.S. company led the charge against Quebec aerospace manufacturer Bombardier in a trade complaint over passenger jets. The disagreement led to the federal government cancelling a planned sole-source order for a handful of Super Hornets as an interim arrangement while the replacement competition continued.

The U.S. Navy, one of Boeing’s biggest customers for fighter jets, recently said it wanted to begin focusing on a replacement for the Super Hornet, which was designed and entered service in the early 2000s.

Jim Barnes, a senior Boeing executive, told a conference call of reporters on Thursday that there is no planned retirement date for the Super Hornet. He claimed the warplane offers the most economical solution for Canada in terms of the cost of flying and operating fighter aircraft.

He said he foresaw the fighter being in service with the U.S. Navy for “decades to come.”

The company’s argument was recently given a boost when Germany decided to buy 45 Super Hornets as a replacement for its Tornado fighters.

The deadline for final submissions in Canada’s competition is now July 31, after it was pushed back on at least two occasions.

Barnes said Boeing is ready to submit and will meet the deadline. He acknowledged the company asked for the latest extension because of the pandemic.

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The end of the Acadian Peninsula’s crab-fishing boom in the 1980s

The end of the Acadian Peninsula's crab-fishing boom in the 1980s

The crab catch was down, and so were hopes for what it could provide for New Brunswickers.

“In the early ’80s, crab became to the Acadian Peninsula what gold was once to the Klondike,” the CBC’s Kevin Evans told viewers who were watching Sunday Report on June 26, 1988.

“The Gulf of St. Lawrence was one of the world’s few remaining areas where the high-priced delicacy had not been fished out of existence.”

A lot of crab fishing followed, along with some good times. And the jobs that flowed from that catch employed thousands of people at processing plants, keeping them eligible for unemployment benefits during the off-season.

‘It will never return’

The Acadian Peninsula had seen its crab catch drop substantially over the course of the 1980s. (Sunday Report/CBC Archives)

But as the 1980s drew nearer, fewer crabs were being found and people knew what kind of future was on the horizon.

“Fisheries biologists say the resource has been crippled by the intense fishing effort, that it will never return to the levels of a few years ago,” said Evans, noting the catch had “dropped dramatically” in the most recent two years to that point.

One crab fisherman who spoke to CBC News compared finding crab at that time to looking for water in a desert.

‘The boom is over’

By 1988, the crab catch in the Acadian Peninsula of northern New Brunswick was down well below where it was at the start of the 1980s. (Sunday Report/CBC Archives)

As of 1988, Evans said crab plants in the region employed less than half the number of workers they did the year before.

The provincial government planned to spend $4 million to help some of the crab industry workers retrain for other kinds of employment.

“The boom is over and a painful period of readjustment has just begun,” said Evans.

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US regulators order new fix for grounded Boeing 737 Max planes

US regulators order new fix for grounded Boeing 737 Max planes

U.S. safety officials will require all Boeing 737 Max airliners to be inspected for a manufacturing defect on engine coverings that they say could lead to loss of power during flights.

Inspections and repairs, if needed, will be required before the grounded planes are allowed to fly again, according to a notice posted Wednesday by the Federal Aviation Administration.

The problem is not related to the flight-control system that pushed planes into nosedives before two deadly Max crashes. The crashes in Indonesia and Ethiopia killed 346 people.

However, it is another blow to Boeing’s safety reputation.

A spokesman for Chicago-based Boeing said the company recommended the inspections in December and has been working with airline customers to make sure the engine coverings are protected from electrical energy.

All Max planes have been grounded since March 2019, and it is not clear whether the engine-covering defect will further push back Boeing’s goal of getting the planes back in the sky this year. The company needs clearance from the FAA before the planes can fly again.

Shielding around wiring could be inadequate

In ordering the inspections, the FAA is finalizing a proposed order issued in February. At that time, FAA said the engine coverings, called nacelles, could be vulnerable to lightning strikes. The FAA agreed with Boeing’s request to delete lightning as a threat, but it said strong electromagnetic fields could cause loss of power or faulty readings in the cockpit because of inadequate shielding around wiring.

The FAA will require inspection of parts called fairing panels. According to published reports, workers polishing the carbon composite engine pods ground off some layers of metal foil that are needed to shield wiring.

The FAA said any “excessively reworked panels” must be replaced.

The FAA estimated the work could take five to 12 hours per plane. It said Boeing will cover all costs because the planes are still under warranty.

The FAA order affects 128 Max jets registered to U.S. airlines American, Southwest and United.

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WestJet lays off 3,333 workers as pandemic continues to wipe out demand for air travel

WestJet lays off 3,333 workers as pandemic continues to wipe out demand for air travel

WestJet has laid off 3,333 workers and is planning to consolidate and contract out much of its operations as the pandemic continues to sink the majority of demand for air travel.

The Calgary-based company had 14,000 staff before pandemic border closures and travel restrictions grounded two-thirds of its fleet, WestJet said in Wednesday’s announcement. 

These permanent layoffs leave just 4,500 on the payroll. 

“WestJet has remained self-sufficient throughout this extended crisis, cutting our costs by more than 60 per cent,” CEO Ed Sims said in a YouTube video about the decision.

“And yet, despite these efforts, the damage we’ve incurred from a weakened demand environment is being compounded by multiple factors … the reality in which we find ourselves requires difficult and often painful decisions to ensure our continued viability in the future.” 

The company will consolidate its call centre in Alberta, and contract out its operations in all but four of its 38 domestic airports, leaving just Calgary, Edmonton, Vancouver and Toronto.

It’s also restructuring office and management staff.

WestJet said its scheduled operations have been reduced by more than 90 per cent year-over-year due to the pandemic.

The company said it’s taken measures like instituting a hiring freeze, cutting executive, vice-president and director salaries and pausing more than 75 per cent of its capital projects. 

“To our WestJetters and to your family and friends: this situation is nobody’s fault and nothing anyone could have done would have created a different outcome,” Sims said, adding that the decision was a last resort. 

He said as the company works to find new partners with airport services, it will look for employment opportunities for the affected workers.

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Segway to end production of namesake personal transporter

Segway to end production of namesake personal transporter

Segway, which boldly claimed its two-wheeled personal transporter would revolutionize the way people get around, is ending production of its namesake vehicle.

The Segway PT, popular with tourists and police officers but perhaps better known for its high-profile crashes, will be retired on July 15, the company said in a statement.

“Within its first decade, the Segway PT became a staple in security and law enforcement, viewed as an effective and efficient personal vehicle,” said Segway president Judy Cai in a statement Tuesday.

In the past decade, Cai said, the PT had also gained popularity with tourists around the world. 

But the Segway, which carries a standing passenger on a wide platform, accounted for less than 1.5 per cent of the company’s revenue last year.

The company said 21 employees will be laid off, another 12 employees will stay on for two months to a year and five will remain at the Bedford, N.H., facility.

Segways were banned in some cities because users could easily lose control if they were not balanced properly. (Wong Maye-E/The Associated Press)

“This decision was not made lightly, and while the current global pandemic did impact sales and production, it was not a deciding factor in our decision,” Cai said.

The transportation revolution that inventor Dean Kamen envisioned when he founded the company in 1999 never took off. The Segway’s original price tag of around $5,000 was a hurdle for many customers.

Challenging to ride

It also was challenging to ride because the rider had to be balanced at a specific angle for the vehicle to move forward. If the rider’s weight shifted too much in any direction, it could easily spin out of control and throw the rider off.

They were banned in some cities because users could easily lose control if they were not balanced properly.

“What did they think the market was when they built this, when they designed it?” asked Maryann Keller, principal at Maryann Keller & Associates, an automotive consultancy firm.  

“My impression was they were talking about this as personal mobility. How could you think that something this large and expensive would be personal mobility?”

High-profile crashes

Ten months after buying the company in 2009, British self-made millionaire Jim Heselden died after the Segway he was riding careened off a 30-foot cliff not far from his country estate north of London. He was 62.

In 2003, U.S. President George W. Bush avoided injury after tumbling off a Segway at his parents’ summer home in Kennebunkport, Maine.

A cameraman riding a Segway ran over Usain Bolt in 2015 as the Jamaican sprinter did a victory lap after winning a 200-metre race in Beijing.

Bolt wasn’t injured and later joked about the incident.

WATCH | Usain Bolt taken out by Segway cameraman in Beijing:

In 2017, Segway got into the scooter business, just as the light, inexpensive and easy-to-ride two-wheelers took over urban streets.

Riders took 38.5 million trips on shared electric scooters in 2018, according to the National Association of City Transportation Officials.

Segway’s foray into lightweight scooters may have been a sign that its original PT’s days were numbered.

“It was probably over-hyped before it was launched, and when it was launched, it was like, this is not going to work on city sidewalks,” Keller said.

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