Business

Electric Vehicles manufacturer Workhorse has officially challenged the decision of the United States Postal Service to grant the contract of next-generation mail vehicle to Oshkosh. The American startup has now filed a formal complaint with the United States Federal Court. The Cincinnati-based company has been working on developing drone-integrated cost-effective electric vehicles with the aim of serving the last mile delivery sector. Workhorse was among the competitors of the contract but the USPS awarded it to defense contractor Oshkosh. The complaint against the bid is currently sealed. However, the judge can order to make some part of the sealed document public. This is because a redacted version of the complaint has also been filed by the Workhorse. The version can be ultimately made public. The bid protest kicks off a court fight as the USPS announced back in February that it had selected Wisconsin-based Oshkosh Defense to manufacture its next generation mail truck. The new generation of US-built postal delivery vehicles is slated to hit roads in 2023. The contract is best remembered because of the design mockups that accompanied the announcement. The design released featured a mail vehicle that is cartoonishly rounded-out and looked more like a goofy clown car.

Under the contract, which is around worth USD 6 billion, the Wisconsin-based company will manufacture 50,000 to 165,000 of the vehicles over 10 years. The trucks can be retrofitted in order to keep pace with the latest development in the field of electric vehicle technology. These vehicles will either be equipped with fuel-efficient internal combustion engines or battery-electric powertrains. This is because the Biden administration wants all such vehicles to run on electric power. Before this contract was granted, Workhorse had proposed manufacturing an all-electric vehicle fleet for the United States Postal Service. The idea had garnered the support of several key lawmakers of the United States within no time. But funding seems to be a major sticking point behind the electrification of the USPS fleet. However, Postmaster General Louis DeJoy has promised to have at least 10 percent of the USPS fleet as electric vehicles. In a letter to lawmakers, he had also written about government assistance could be of great help in launching the majority of electric feet in the next decade. The USPS was planning to replace mail trucks with new vehicles by 2018. Six companies were initially selected by the UPSP and the bidding process dragged on for years.

USPS has refused to comment on the complaint filed by Workhorse. But it said that everything is on schedule and the first estimated delivery is expected to be on schedule. “We never comment on any ongoing litigation. The USPS is looking forward to the production of electric vehicles for our Next Generation Delivery Vehicle (NGDV),” a USPS representative said. Commenting on the complaint, Oshkosh Defense said that bid protests are normal in any government contracting process. “This is very common and we don’t comment on it,” said Alexandra C. Hittle of Oshkosh Defense. “We are extremely proud one being shortlisted to fulfill the needs of the NGDV program. We look forward to providing these vehicles to mail carriers.” Workhorse was among the final three companies that submitted final bids. Moreover, it was the only one that proposed building an electric mail fleet. The design revealed by Oshkosh in February was capable of running both on gas and electric drivetrains. Oshkosh said that it is still working on the final design of the vehicle. The company also said that the vehicle will not hit roads before 2023. The company is not ready to talk about whether Ford is involved in the final pitch. The question is being asked because Ford was part of it during the bidding process.

New York is limping back to normalcy as the administration and Governor Andrew Cuomo has lifted all the remaining COVID-19 related restrictions implemented during the pandemic in the city. This is apparently why chief executive officers of top banks on Wall Street want their employees back to the office. Some are sending tough messages to employees who are not so keen on returning to the office. Most of these banks have made it clear that they want employees at the desk at the end of the summer. Morgan Stanley top boss Gorman went on to say that if employees fail to join the office by Labor Day, they may have to face a pay cut. “If you can go outside to eat in a restaurant, you can definitely come into the office and this is what we want. We want you in the office. Make no mistake about it,” Gorman said during the annual US Financials, Payments & CRE conference.

Gorman said unlike Goldman Sachs, the firm has yet not started dictating staff to turn up for work. It must be noted that employees of Goldman Sachs in New York are back to the office. But Gorman has sent a ‘very strong’ message to employees that they need to be at their desks in the 1585 Broadway building. “I will be extremely disappointed if employees have not found their way into the office. Then we will be having a different kind of conversation,” he said. The banking giant had allowed its 70,000 employees to work from remote locations during the pandemic. But with around 70 per cent of Big Apple adults getting vaccinated, the firm feels that it is the time when employees need to get off their couches and return to desks. Gorman, who was tested positive for COVID-19 last year, has been coming to the office at least four days a week. Gorman has clearly hinted that he would have a negative opinion for employees who were not present in the office regularly or worked from an out-of-station location. “If employees want to get paid New York rates, they need to work in offices in New York,” he added.

Gorman feels that returning to the office is extremely important for junior staff as they are under training and need to learn. “Our interns learn in office, we teach them in office. This is how we develop people.” Similarly, American Express has made it clear that employees need to return to the office as things are getting normal. American Express CEO Stephen Squeri in a memo said that employees will be required to present in the office at least three days per week. Squeri said the employees can work remotely for the remaining days. The bank has plans to start implementing the so-called ‘hybrid model’ in the United States on September 13. The firm is hopeful of implementing if fully by the end of October.

A consortium of private equity groups has entered into an agreement to buy a majority state in medical supply group Medline. According to people familiar with the development, the deal is roughly valued at around 34 billion. This will be including debt and is being considered as one of the largest buyouts of the year. The consortium includes names like Blackstone, Carlyle, and Hellman & Friedman. The transaction was announced by Medline, the largest privately held manufacturer and distributor of healthcare supplies in the United States. The deal is expected to be finalized by the end of this year and is subject to regulatory approvals. Even after the deal, Medline will continue to be a privately held, family-led company. The Mills family will remain the largest single shareholder of the company and will continue to led the American healthcare company.

This is also going to be one of the largest buyout deals that involve a club of private equity investors since the financial crisis of 2007. It is also the second largest-ever private equity deal with the first being buyout of US energy group TXU Corporation for USD 44 billion in 2007. Blackstone has beaten other consortiums of buyout groups including the one led by Brookfield and other involving CVC and Bain Capital. So-called club deals were in trend in the years after the financial crisis. This is because of the reason that it gave private equity groups an opportunity to get open for larger transactions. They almost disappeared all of sudden after the financial crisis as credit dried up. But these transactions have once again gained traction. In 2018, Blackstone joined hands with Canada Pension Plan Investment Board and Singapore state fund GIC to pull together USD 17.3 billion for its largest deal since the crisis and agreed to buy a controlling stake in the data business and financial terminals of Thomson Reuters.

Founded in the year 1966 by Jim and John Mills, the healthcare company remains one of the largest manufacturers of medical supplies. The company is currently being run under the leadership of Charles Mills. His cousin Andy is the president of the company. They took reins of Medline in 1997 from their respective fathers. Medline said that the entire senior management team of the company will remain intact. The company plans to use new resources to expand its offerings. It will also focus on new infrastructure investments to strengthen its position in the international market.

Things are not all good at electric vehicle startup Lordstown Motors for quite some time. And now, chief executive officer Steve Burns has stepped down from the post. This is not it. Chief financial officer Julio Rodriguez too has resigned. The development comes just a few weeks after the Burn assured investors that the General Motors-backed startup has a bright future. Lead Independent Director Angela Strand has now been appointed executive chairwoman. She will oversee the day-to-day affairs of the company and transition till the company appoints permanent CEO. Strand previously worked at Burns’ previous startup. Becky Roof has been given charge of interim CFO. Roof has worked in the same position in a number of companies. The list includes Eastman Kodak and Saks Fifth Avenue. This is all happening in the backdrop of an investigation preorders investigation. It has been alleged that Burns and several other top executives lied about preorders of the electric pickup trucks.

The investigation found that there were multiple occasions when the company’s representatives lied about preorders. It was found that Lordstown Motors executives maintained that the majority of the 100,000 non-binding preorders for pickup trucks were from commercial fleets. However, the investigation found it was not the case. Moreover, it was found that the entity which had given a majority of preorders doesn’t appear to have the resources to complete the deal. “Commitments given by other companies in the list appeared not very clear to count it as pre-orders. It was also found during the investigation that the startup paid a company to drum up around 1,000 preorders. Law firm Sullivan and Cromwell had conducted the probe into the allegations. The investigation was launched in March this year after a report published by short-selling firm Hindenburg Research made a series of allegations at Lordstown Motors. The main allegation was about preorders that the company presented to misled its investors.

Lordstown Motors was founded as an offshoot of Burn’s other company Workhorse Group. The company has been facing financial problems as well. Recently announced quarter results were also not impressive enough. Then came the news that the company would have to reduce the production target of vehicles to half if it fails to get more funding. The initial production target was 2,200. The EV startup went public through a SPAC last year. Following this, the company was valued at USD 1.6 billion. Commenting on the development, the company said that it thanks to Steve Burns ‘for his passion and commitment to the company.’

United Airlines wants to give its passenger a new flying experience by adding a fleet of supersonic jets. The airline has said that it planning to buy 15 supersonic airplanes from Boom Supersonic. According to the airline, it is kept open the option of purchasing 35 more supersonic jets at a later stage when the start-up starts designing these planes. The startup is working on making supersonic commercial flights back in the air. However, these planes are just an artist’s drawing at the moment and even the prototype is far from to be flown. The Overture is the first commercial supersonic jet of the company and it has neither been built nor certified yet. But the company has set the target of starting passenger service by the end of this decade, 2029 to be precise. However, getting clearance from regulators is going to be the biggest hurdle for the company.

The plane that the company is working is expected to be capable of flying at double the speed of the current fleet. The plane could possibly fly at Mach 1.7 and expected to trim some trip timings to half. This means that journey from New York to London could be covered in just 3.5 hours. Typically it takes seven hours to complete the journey. United CEO Scott Kirby said that the deal would give air passengers access to a stellar flight experience. “When the most robust network of the industry in the world would combine with the vision of Boom, it would definitely give leisure as well as business travelers an amazing experience,” the United CEO said in a release while making the announcement. The airline has not revealed the terms of the sale but both the companies have expressed confidence that the move will generate immediate benefits.

Denver-based Boom Supersonic was founded in the year 2014. It has managed to raise USD 270 million in capital so far and is currently working with an employee strength of 150. The order from United Airlines validates Boom Supersonic founder and CEO Blake Scholl’s vision of bringing back supersonic flights. “This is the first purchase order for net-zero carbon supersonic airplane in the world. It is a very significant step in the direction of our mission to make the world more accessible,” Scholl said. For those who are unaware, the supersonic Concorde was in operation from 1976 until October 2003.

Cereal giant General Mills Inc. has decided to purchase Tyson Foods for USD 1.2 billion in cash. The move is aimed at making its pet food portfolio more diversified. The company is focusing on this division because more and more people are adopting cats and dogs. With the deal, there will be the addition of Nudges, Top Chews, and True Chews brands to the portfolio of the company. General Mills already has Blue Buffalo pet foods label. The company purchased it for USD 8 billion in 2018. The company has been looking to build a strong portfolio in the fast-growing pet foods segment ever since. Headquartered in Minneapolis, Minnesota, USA, General Mills says that it aims to make foods that are loved by people. Some of the famous brands of General Mills are Cheerios, Progresso, Annie’s, Häagen-Dazs, Yoplait, Nature Valley, and more.

The three-year-old bet paid off well for the company after the coronavirus pandemic struck last year. As the pandemic-induced lockdown forced more and more people to stay indoors, many adopted pets to help relieve stress. These people are opting for premium quality foods for their pets. According to data, animal shelters in the United States have seen a jump in the adoption rate of around 40 per cent in 2020 over the previous year. General Mills’ pet food segment president Bethany Quam said that pet food is among the high growth category because of the humanization of pets. “We have witnessed an increase in this trend during the COVID-19 pandemic.

Several pet foods company have witnessed a rise in the sale of their products. While General Mill’s pet food has registered a growth of 13 per cent for nine months ending February 28, Tyson Foods’ pet treats portfolio had sales of USD 24 million in the 12 months ended April 3. General Mills believes that the acquisition of Tyson Foods will modestly add to its net income within one year of the deal. The deal is expected to be finalized in the first quarter of the next fiscal year. As part of the deal, General Mill will also acquire a manufacturing facility in Independence, Iowa. The deal will be funded in cash and short-term borrowing. Commenting on the development, Tyson Foods said that even after being acquired by General Mills, it will continue to provide meat ingredients for the pet treats business.

Several industries are facing labor crunch and the restaurant industry is not untouched by it. Very few people are willing to return to the work and this is apparently because of the government expanding jobless benefits. This is why restaurants are struggling to meet the surge in consumer demand. With life coming back to normal in several parts, the demand has grown manifold. Some restaurants are honestly accepting that they didn’t expect such a surge. This is apparently why the hiring process that starts in the spring and summer months has been accompanied by news of wage hikes. In a related development, fast-food giant McDonald’s has announced that it would give an average 10 per cent hourly raise to more than 36,500 employees across the United States. These employees are working at around 660 restaurants owned by McDonald’s.

The company said that it has already started to implement these increases and the process will continue over the next several months. Once fully implemented, the entry-level pay for McDonald’s employees will start at least with USD 11 to USD 17 an hour. “Shift managers would get a minimum hourly wage of USD 15,” the fast-food giant said in a statement. However, the company has clarified that the wages will not be applicable to workers employed at restaurants owned and operated by franchisees. There are around 13,000 such workers. The announcement has been made as thousands of McDonald’s workers are planning for a strike. These workers have announced that they will go on strike on May 19 across 15 cities demanding a hike in wages.

The move indicates that McDonald’s clearly understands that changes are required in order to retain as well as hire talented workers. However, Doneshia Babbitt – St. Louis-based McDonald’s worker and union leader – said that the company has done a math trick and they will continue with the plan of going on strike on May 19. Babbitt said that they will demand a USD 15 per hour wage for every worker in every restaurant of McDonald’s. Meanwhile, McDonald’s franchise in Florida last month announced that it would offer USD 50 to anyone who would interview at the location.