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Will climate change doom US truck habit? Detroit says no



Like other electric vehicles being developed by Detroit, Ford Motor Co.'s F-150 Lightning has been praised as an improvement in addressing climate change, although it requires more energy to recharge than does a smaller vehicle
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The US consumer’s love for enormous vehicles has been seen by outsiders as a curiosity and sometimes a sign of profligacy.

Either way, rising concerns about climate change seemed to create a reckoning for the behemoth-sized pickup trucks and sport utility vehicles that recently have sustained US automaker profits.

Not so, according to Detroit auto giants, who have responded to the climate crisis by launching all-electric versions of the Ford F-150 pickup, the Chevrolet Blazer SUV and other best-selling giants that seemingly promise the possibility that consumers can have it all: address global warming without sacrificing the appeal of larger autos.

Leading US environmentalists, along with the Biden administration, have praised announcements of the electric vehicle (EV) rollouts as a way to reduce greenhouse gas emissions.

Absent has been any discussion of the environmental toll of large EV trucks, which require more energy to recharge and more critical materials than do smaller EVs.

In showcasing trucks, Detroit automakers are setting the groundwork for an EV era that mirrors the current profile of US roadways and distinct from Europe, where sedans dominate.

Industry insiders like Alan Amici, president of the Center for Automotive Research, see little appetite among American consumers to go small.

“People are still clamoring for big pickups and SUVs,” Amici said. “I don’t expect a return to sedans.”

The trucks, often marketed in advertisements navigating rugged landscapes, provide lucrative profit margins to automakers and have become so ubiquitous on US roads that some consumers avoid smaller vehicles out of fear of how it would handle a crash with a much bigger auto.

Ford and General Motors, both of which report earnings this week, are positioning the vehicles as environmentally friendly based on how they contrast with gas-guzzling equivalents.

Luke Tonachel, who heads the clean vehicles program at environmental group NRDC, said electric pickups and SUVs represent a critical step in addressing climate change.

“It’s incredibly important that we eliminate tailpipe pollution from all cars as soon as possible,” Tonachel told AFP. 

“We need broad acceptance and adoption of EVs across the market. And that’s why it’s encouraging to see automakers starting to make EVs on all types of car segments, including the most popular ones.”

– Customer ‘has spoken’ –

The focus on large vehicles was apparent at last month’s Detroit Auto Show, where Biden test drove the EV Cadillac Lyriq, an SUV made by the GM brand. In previous trips to Detroit, Biden cheered on production of GM’s EV Hummer and the launch of Ford’s F-150 EV.

While GM’s display at the Detroit show included the Bolt, an EV sedan, greater prominence went to electric versions of three larger Chevies: the Silverado pickup, and the Blazer and Equinox SUVs. 

“The customer has spoken. SUVs and trucks are what the customer wants,” Chevrolet Vice President Steve Majoros told AFP at the show. 

NRDC’s Tonachel notes that some sedans still sell at substantial levels in the United States, but that they are made by companies like Japan’s Toyota and South Korea’s Hyundai.

“The different manufacturers are sort of carving out what they see as their specialty,” he said. “The Detroit three automakers, they left the compact car and most of the sedan market years ago.”

Bertrand Rakoto, global automotive practice leader at Ducker in Detroit, a consultancy, said it makes more sense to focus on trucks to fight climate change.

“You’re removing the emissions for the large vehicles that are the most emitting,” he said.

Rakoto, who is originally from France, said the contrast between the United States and Europe reflect different geographic qualities and transportation systems, with space in Europe more precious and public transit more integrated into regular life.

– Energy drain –

A December 2021 International Energy Agency report bemoaned the rise of SUVs, not only in the United States, but in India and Europe.  

Most of the vehicles still run on gasoline, meaning that “if SUVs were an individual country, they would rank sixth in the world for absolute emissions in 2021, emitting over 900 million tons of CO2,” the IEA said.

The analysis said SUV electrification helps, but noted larger vehicles require more critical materials for bigger batteries and consume around 20 percent more energy than a medium-sized car.

For Benjamin Stephan, of Greenpeace in Germany, limiting global warming remains critical, meaning “you sort of have to pull every lever available.”

“Obviously an all-electric pickup truck will have a much better carbon footprint,” he said. “But you could reduce that footprint even more by having no car at all, or a much smaller car.”

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IBM to cut 3,900 jobs as it reorganizes business




IBM becomes the latest tech firm to announce it is trimming staff, joining titans such as Amazon and Google
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IBM will slash some 3,900 jobs, slightly more than one percent of its workforce, related to businesses it has divested, a source close to the matter told AFP on Wednesday.

The computing company based in New York state did not talk of job cuts in its quarterly earnings report published Wednesday, however, nor in a call with analysts to discuss the financial results.

IBM said it would take a one-time $300 million charge in its first quarter this year, which the source said was related to the layoffs.

This cost is “entirely related” to the spin-off of Kyndryl and the disposal of health data and analysis businesses, an IBM spokesperson told AFP.

“It is not an action based on 2022 performance or 2023 expectations,” the spokesperson added.

The more than century old technology firm reported profit of $2.9 billion in the final three months of last year, some 17 percent higher than the same period in 2021 despite revenue remaining flat at $16.7 billion.

“Clients in all geographies increasingly embraced our hybrid cloud and AI solutions as technology remains a differentiating force in today’s business environment,” IBM chief executive officer Arvind Krishna said in an earnings release.

The company founded in 1911 announced late last year that it will invest $20 billion in semiconductors, quantum computing and other cutting-edge technology in New York state.

Krishna unveiled the spending, which will take place over a decade, in a speech alongside US President Joe Biden in the tech giant’s Poughkeepsie facility.

Biden hailed the pledge from the “iconic American company” as another sign that his strategy of rebuilding the US innovative edge is working.

The Democratic president has made a priority of encouraging growth in high-tech manufacturing, hoping to rebuild domestic supply chains in crucial components such as microchips that for years have been left to foreign companies based as far away as Taiwan.

Meanwhile, tech giants have been tightening belts and laying off workers to endure tough global economic conditions and a return to pre-pandemic lifestyles less dependent on internet services.

Amazon, Meta, Microsoft and Google’s parent company Alphabet have all recently laid out plans to reduce workforces, after hiring heavily during the pandemic to meet increased demand for digital services.

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Amsterdam unveils its largest bike garage. It’s underwater




Finding proper bicycle parking has long been a headache in Amsterdam
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Plagued by ever-shrinking space to park its hundreds of thousands of bicycles, Amsterdam opened Wednesday the first of its largest-ever bicycle parking complexes, built underwater in a pioneering engineering project.

The shelter is constructed beneath the Open Haven Front, an access tributary to the city’s IJ river, and will be followed by another next to the IJ itself that will open in February.

They will have a combined capacity for 11,000 bikes in the cycling-mad Dutch capital.

“Together the shelters will be the largest in the city,” the Amsterdam municipality said, with the Open Haven Front storage able to take 7,000 bicycles and the IJ-side site around 4,000.

Construction started in 2019 and involved draining part of the Open Haven Front next to Amsterdam Central Station.

A time-lapse video posted by the Amsterdam municipality showed how the water was pumped out, the structure built and the area eventually reflooded.

“We have a lot of knowledge and expertise when it comes to water,” Dutch deputy infrastructure minister Vivianne Heijnen told AFP at the opening ceremony.

This storage “makes optimal use of the space you have in a small country”, she said. 

Conveyor belts take cyclists nine metres (30 feet) below ground level, according to wUrck, the architectural firm that designed the ultramodern parking spaces that aim to evoke their oceanic surroundings.

“The cyclist steps into an imaginary oyster with a rough exterior of basalt and natural stone and a smooth, light interior,” the firm said in a statement.

“Now you will be assured that you can immediately park your bicycle when you come to Amsterdam station,” the city’s transport alderwoman Melanie van der Horst said.

There are an estimated 900,000 bicycles in Amsterdam with some 625,000 trips made daily, according to the city’s 2021 Bicycle Monitor plan — and finding proper parking has long been a headache.

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Boeing reports Q4 loss but reaffirms 2023 targets




Boeing reported a 2022 fourth quarter loss as elevated supply chain costs dragged down results despite a late-quarter uptick in plane deliveries
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Persistent supply chain woes and staffing issues led to another quarterly loss at Boeing, but the company on Wednesday confirmed its 2023 outlook amid strong aviation demand.

Boeing said its commercial plane business was dented by “abnormal costs,” while “labor instability and supply chain disruption” weighed on its defense, space and security unit.

The company’s $634 million loss for the quarter ending December 31 was smaller than the $4.1 billion loss in the same period last year. Revenues rose 35 percent to $20 billion, but came in below analyst forecasts.

The aviation giant, which has been beset in recent years with production problems and certification delays following the 737 MAX crashes, nevertheless finished 2022 with positive free cashflow for the first time since 2018 as it reaffirmed 2023 targets.

“We had a solid fourth quarter, and 2022 proved to be an important year in our recovery,” said Boeing Chief Executive Dave Calhoun.  

“Demand across our portfolio is strong, and we remain focused on driving stability in our operations and within the supply chain to meet our commitments in 2023 and beyond.”

Boeing has said it expects to return to a level of financial strength comparable to its pre-pandemic state around the 2025-26 timeframe. 

The company’s turnaround has been aided by robust demand for commercial planes as airlines struggle to meet pent-up demand for flying and replace older planes with newer jets that burn less energy and release fewer carbon emissions.

But efforts to ramp up output have been hindered by snags in garnering key parts and materials, including delays in receiving engines from key suppliers.

Calhoun, in an interview with CNBC, said suppliers have made progress in hiring more staff, but are still working through the process to be able to increase output.

“You have to train,” Calhoun told the network. “Every one of these products are pretty sophisticated.”

He predicted that 2023 would remain “bumpy” as far as the supply chain, but said the ramp-up was aided by shared knowledge that demand for aviation remains strong.

Boeing has resumed deliveries of the 787 Dreamliner after a lengthy halt, and confirmed it would increase production in 2023 from the current “low” level.

The company expects to deliver 70-80 Dreamliners in 2023, up from 31 last year. Boeing is eyeing 400-450 deliveries of 737s, compared with 387 in 2022.

– Breakthrough in China? –

A key unknown facing the company is the degree to which it can expect bankable revenues from China after a lengthy pause in deliveries of 737 MAX planes while the country maintained strict Covid-19 policies.

Boeing executives have previously suggested the suspension was a reflection at least in part of the tense state of US-China relations. 

China was the last major market to clear the MAX to return to service after a global grounding following two fatal crashes. 

On January 13, a 737 MAX operated by China Southern Airlines undertook the first flight by a MAX plane in the country since March 2019.

Calhoun told CNBC that he expects progress over the next six months in moving the 100 MAX planes already in China back into the air, but that he wouldn’t engage in a “guessing game” about when deliveries of new planes could resume.

The Boeing CEO said he was “optimistic and constructive” around the market given the reopening Chinese economy, but that he didn’t have “rose colored glasses on.”

Shares of Boeing fell 2.2 percent to $207.24 in early trading.

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