SUMMARY: It was another day of revelations in the saga of President Trump’s dealings with Ukraine, which prompted the impeachment inquiry. What was Trump’s personal attorney, Rudy Giuliani, doing in that Eastern European country? What did the President know about the whistleblower complaint -- and when? Yamiche Alcindor joins Judy Woodruff to discuss the latest and put it into context.
SUMMARY: Confirmation hearings for Supreme Court nominee Brett Kavanaugh will begin a week from today. Set against the backdrop of the ongoing Mueller investigation, new attention is being focused on Kavanaugh’s record on executive power. John Yang turns to Jonathan Turley a law professor at George Washington University, and Robert Barnes a Supreme Court reporter for the Washington Post, for analysis.
SUMMARY: Business and labor are two areas of the law that have been front and center at the Supreme Court in recent years. What does nominee Brett Kavanaugh’s record suggest about how he might rule on cases at the high court? Judy Woodruff gets analysis from Karen Harned of the National Federation of Independent Business Small Business Legal Center, and Daniel Goldberg of Alliance for Justice.
SUMMARY: Ford announced Tuesday it's scrapping plans to build a $1.6 billion plant in Mexico and will instead invest $700 million into an existing Michigan plant, and hire 700 workers in the U.S. Though it's a drop in the bucket in terms of the American economy, it's symbolically significant. William Brangham speaks with Josh Boak of the Associate Press about whether President-elect Donald Trump can take any credit.
JUDY WOODRUFF (NewsHour): Today's announcement by the Ford Motor Company that it would add 700 more jobs at a Michigan plant came after it became one of a number of companies squarely in the eye of President-elect Trump.
William Brangham follows up on what's behind this move and others like it.
WILLIAM BRANGHAM (NewsHour): The Ford announcement follows moves from several other companies saying they too might keep some jobs in the U.S. that were planned for Mexico or elsewhere.
The president-elect has repeatedly tweeted about some of these companies, including Ford, and pressing them to keep jobs in the U.S.
Ford said today that it didn't consult with Mr. Trump on their Michigan decision.
Josh Boak has been covering the story for the Associated Press. And he joins me now.
So, Josh, bring us up to speed. What did Ford agree to do today?
JOSH BOAK, Associated Press: Ford announced that it wasn't going to build a $1.6 billion plant in Mexico.
There were a few reasons for that, one of which was that the plant was going to build Ford Focuses. And sales of that car have dipped as oil prices have fallen.
WILLIAM BRANGHAM: This is a little, small, fuel-efficient vehicle.
JOSH BOAK: Exactly.
But the other major impact has been Donald Trump on Twitter talking about companies and what he wants to see them do, and those two seem to have combined together. Ford's own CEO said he hoped that Trump's policies on deregulation and taxes would be good for the company and good for the country.
WILLIAM BRANGHAM: As we mentioned before, this follows moves where Trump has targeted other companies, Carrier, Boeing, Lockheed Martin. And companies have shifted their positions based according to what Mr. Trump seems to be saying.
Overall, how many jobs are we talking about here that are going to be staying in the U.S.?
JOSH BOAK: Well, as far as Ford's announcement today, they're looking to hire 700 workers starting in 2018.
When we look at Carrier, that's 800 jobs. When we look last week at Sprint, that's 5,000 jobs. OneWeb, that's 3,000 jobs. Now, that sounds like a lot in an individual announcement, but the U.S. economy is massive. It added 2.25 million jobs last year alone. That's so great, that this is really a drop in the bucket in the big picture.
But it's massive symbolically. We can't forget that part of economics is psychology and the animal spirits, and Trump is really stirring them right now.
SUMMARY: The Trump Organization's assets and arrangements span the globe. As president, Donald Trump will have the authority to appoint people to make decisions that could affect his organization. To discuss the potential conflicts the president-elect could face, John Yang speaks with Robert Weissman of Public Citizen and Susanne Craig of The New York Times.
JOHN YANG (NewsHour): The Trump Organization has a variety of assets and arrangements that span the globe. And, as President, Mr. Trump will have the authority to appoint people who will make decisions that affect those businesses.
Here to discuss the potential for conflict is Robert Weissman, president of nonprofit public interest group Public Citizen, and in New York, Susanne Craig, a New York Times reporter who has writing about this story.
Welcome to you both.
Susanne, let me start with you.
This is a very complicated story. There are a lot of parts to president-elect Trump's business holdings. But I think the easiest example is the Trump International Hotel here in Washington, D.C. Walk us through the potential for conflicts with that hotel.
SUSANNE CRAIG, The New York Times: It's really interesting.
This is a hotel that just opened, and it's been — it's been in progress for a few years, and it's on the site of the old post office, which is a government property. And Donald Trump has a ground lease for 60 years, the Trump Organization, for 60 years, to run the hotel out of that.
So there's an arrangement between the federal government, an agency called the GSA, and the Trump Organization. And the President has the power to appoint the head of the GSA. So it's just this incredible situation where you have got a private company that will now be — that is owned by soon to be the President that will be negotiating with a government agency where the head of that agency is appointed by the President.
So just the potential there for conflict, you can just see it coming 100 miles away. And the GSA is already saying they are preparing for it and they're looking at it. Imagine that situation and multiply it by so many when you look at all the different things that could happen with the various companies that Donald Trump owns and the business interests that he has.
JOHN YANG: And, also, Susanne, in that hotel are workers who might want to unionize.
SUSANNE CRAIG: Who might want to unionize.
And this situation's actually been playing out in Las Vegas, where he co-owns a hotel in Las Vegas, and that hotel has — the workers there have tried to unionize, and the National Labor Relations Board, which has got presidential appointees on it, has actually — the board has ruled against Donald Trump even in the days before the election, so yet another example playing out in real time already where you have got conflict between the private — the private holdings and now government agencies that will have presidential appointees on them.
SUMMARY: Recently, insurance company Aetna voluntarily upped its minimum wage to $16 per hour, giving roughly 6,000 of its lowest-paid employees an average raise of 11 percent. Next year, the company also plans to offer lower-cost benefits to some workers. What’s behind the wage hike? Economics correspondent Paul Solman talks to Aetna's CEO about the investment.
KENDRICK BROWN, Aetna Customer Service Representative: There are necessities and then there are wants. You know what I mean?
PAUL SOLMAN (NewsHour): Forget his wants. Health insurance claims servicer Kendrick Brown has barely been able to afford life’s necessities, like a car, after his was totaled.
KENDRICK BROWN: I actually got in an accident. My insurance paid off what the car was worth, but, as far as what I had borrowed to actually purchase the car, I still owed. Once you get in such a hole, you’re like, OK, would it make more sense for me to actually, you know, file bankruptcy?
PAUL SOLMAN: So, when his employer, Aetna insurance, recently, voluntarily and suddenly raised its minimum wage to $16 an hour.
KENDRICK BROWN: It was a happy day. After taxes, it was like somewhere between $100 and $150 dollars every check. And that goes a long way. That goes a long way.
SUMMARY: In Colorado, a baker’s decision to turn a gay couple away rather than make them a wedding cake has sparked a civil rights legal battle. In fact, as the number of states allowing same-sex marriages increases, so too has the number of business owners refusing to provide wedding services for religious reasons. Hari Sreenivasan reports.
HARI SREENIVASAN (NewsHour): Colorado baker Jack Phillips estimates he’s made 5,000 wedding cakes since he opened his shop, Masterpiece Cakes, 20 years ago.
JACK PHILLIPS, Owner, Masterpiece Cakeshop: I just like everything about the baking business. With a wedding, I get to know the bride, I get to know the groom, if I can, you know, as much of the personalities and things that I can.
HARI SREENIVASAN: And while his portfolio of wedding cakes is vast, there’s one cake the baker refuses to bake. Phillips will not make a cake for a same-sex marriage.
JACK PHILLIPS: It’s a cake that I just don’t do because of my Christian faith.
HARI SREENIVASAN: A deeply religious man, Jack Phillips says he will bake birthday cakes, cupcakes, and a variety of other sweets for same-sex couples, not just a wedding cake.
JACK PHILLIPS: I actually feel like I’m taking part in the wedding. Part of me goes to the reception. And in this case, that part of me doesn’t want to be represented in a ceremony that I believe is unbiblical.
HARI SREENIVASAN (NewsHour): Now back to the United States’ plans to restore diplomatic relations with Cuba.
For more on what it means in practical terms and efforts to lift the economic embargo, which is still in place, I’m joined by our foreign — chief foreign affairs correspondent, Margaret Warner, and NewsHour political director Domenico Montanaro.
So, Margaret, let me start with you.
What can the President do on his own, without needing Congress?
MARGARET WARNER (NewsHour): Well, first of all, as you said, he can normalize relations with Cuba, just as, for example, Nixon normalized relations with China, with whom we were still at odds. So that’s the first thing he can do.
Secondly, I learned just this afternoon that the — establishing a U.S. Embassy, which members of Congress have vowed to not fund, it turns out the U.S. Interests Section in the old U.S. Embassy. It has 360 people working there, including 67 Americans.
And so one senior official said to me, right now, we’re not even sure we need additional personnel. The building is a little shabby, but they can go right ahead. Two, he can take Cuba off the state-sponsor of terrorism list after a six-month review by the secretary of state, and notifying Congress, but they do not have to approve it.
And, three, he can use his licensing authority to ease all these travel and investment restrictions, so people will be able to use American credit cards there, more people will be able to travel, transfer more money there.
What an official said to me today, though, is, it is not open for business, that it is not open, that the economic embargo still holds, if you’re talking about big American hotel chains going down there. That is not the case. And so there will be a limit on that.
SUMMARY: As President Obama closes a door on Cold War hostilities between the U.S. and Cuba, American businesses wait in the wings for new opportunities to expand to the nation that has long been off-limits. Hari Sreenivasan talks to Marcelo Prince of The Wall Street Journal about which industries would be most affected if the embargo was lifted.
JUDY WOODRUFF (NewsHour): One year ago this month, a Chinese company bought America’s largest pork producer, Smithfield Foods. The $4.7 billion deal is the biggest Chinese acquisition of a U.S. company to date.
Nathan Halverson from the Center for Investigative Reporting looks into the Chinese government’s role in the takeover. This story was produced as part of the Food for 9 Billion series, a collaboration between the Center for Investigative Reporting and Homelands Productions, with broadcast partners the “PBS NewsHour,” American Public Media’s “Marketplace” and PRI’s “The World.”
NATHAN HALVERSON: Pork pride is everywhere in Smithfield, Virginia.
This small town of 8,000 dubs itself the ham capital of the world. Painted pigs line Main Street. And at the taste of Smithfield Cafe, bacon graces nearly every plate. The town’s museum even features the world’s oldest edible ham. And some in town still produce ham as it was done generations ago.
MAN: We are curing hams the same way it was done during colonial times, Jamestown, Williamsburg, right on up to now.
NATHAN HALVERSON: The town is also home to the world’s largest pork producer, Smithfield Foods. This factory processes more than 10,000 pigs a day.
MAN: We have got boneless loins, bone-in loins, butts, back ribs, spareribs, neck bone, cushions. We have got an assortment of everything.
NATHAN HALVERSON: And this is going all over the country?
MAN: All over the world.
SUMMARY: China consumes half of the world's pork. And the country's growing middle class — bigger than the population of the United States — wants more meat. Nathan Halverson of The Center for Investigative Reporting looks at how China plans to meet that demand.
LESTER BROWN, Author "Who Will Feed China": China is roughly the same size as the United States. The cropland area is similar. The grain harvest is similar. The difference is, in the U.S. we have 300 million people and there, they have 1.4 billion people.
JUDY WOODRUFF (NewsHour): You almost never see employees hit the streets to save the job of their company’s president. But that scene is playing out in a most unusual battle in New England this summer, one involving a supermarket chain, a deep family feud, and set against the backdrop of big debates over wages, benefits, corporate profits and inequality.
Our economics correspondent, Paul Solman, has the story, part of his ongoing reporting Making Sense of financial news.
PAUL SOLMAN (NewsHour): In Tewksbury, Massachusetts, it was hellishly hot the other day, but that didn’t deter a holy ruckus.
MAN: Heavenly Father, thank you for giving us today as a new day, even though we find ourselves in the same situation as yesterday, without our true leader, Arthur Demoulas.
PAUL SOLMAN: That’s Arthur T. Demoulas, former president of Market Basket supermarkets, one of New England’s most successful retailers, with 71 stores, sales of $4.6 billion last year, 25,000 employees with above-average compensation and profit-sharing, and two million customers who enjoy below-industry prices.
But Arthur T. was fired in June by a board of directors controlled by Arthur S. Demoulas, who seems to think his cousin, Arthur T., was spending stockholder money too liberally. Neither cousin is giving interviews, but the basic fact is clear enough. The family-owned business has ground to a halt.
In mid-July, truck drivers and warehouse workers walked off their jobs, a non-union strike in support of their employee-friendly leader.
GWEN IFILL (NewsHour): We turn now to the U.S.-Africa Leaders Summit happening this week in Washington.
The main event today was a business forum, where leaders focused on what they see as a wealth of untapped opportunities in one of the world’s fastest growing markets.
President Obama’s appearance highlighted day two of the summit, as he announced billions of dollars in new public and private investment.
PRESIDENT BARACK OBAMA: We want to build genuine partnerships that create jobs and opportunity for all our peoples and that unleash the next era of African growth.
That’s the kind of partnership America offers. I want Africans buying more American products. I want Americans buying more African products. I know you do, too, and that’s what you’re doing here today.
(APPLAUSE)
GWEN IFILL: U.S. companies plan to spend about $14 billion on everything from construction to banking to clean energy initiatives like wind and solar power.
Former President Bill Clinton, also appearing at the conference, played up business prospects in Africa. In 2000, he signed the African Growth and Opportunity Act. The measure aimed to expand U.S. trade with African countries while encouraging free markets. It is up for renewal next year.
Today, he said investment in the continent remains — quote — “a massive opportunity.”
JUDY WOODRUFF (NewsHour): We turn now to the continuing debate about how to fix this country’s economic problems. Some say we need to reduce income inequality, while others emphasize a need to create more growth and opportunity to climb up the ladder.
Our economics correspondent, Paul Solman, has been running into variations on those themes throughout his recent reporting on the battle over raising the minimum wage.
Tonight, he gets a different take on that debate, what you might call top-down economics vs. middle-out. It’s part of his ongoing reporting on Making Sense of financial news.
PAUL SOLMAN (NewsHour): In Seattle this spring, a win for advocates of a $15-an-hour-minimum wage, nearly double the federal minimum, as the city council voted unanimously in June to phase in $15 over several years.
Leading the charge were socialist activists, labor unions, and one most unusual suspect, billionaire venture capitalist Nick Hanauer.
But as Hanauer has argued in a popular 2012 TED Talk, and most recently in a Politico Magazine essay, addressing income inequality, through measures like a higher minimum wage, is not simply a moral issue; it’s an economic issue because prosperity originates from having a strong middle class.
SUMMARY: Under the Affordable Care Act, employers who have at least 50 full-time employees are mandated to provide affordable insurance or pay a penalty. Most employers already comply, but some business-owners, especially in the restaurant industry, argue it will be a major burden. Economics correspondent Paul Solman reports.
Is Microsoft going the way of the Soviet Union? Vivek Wadhwa, vice president for academics and innovation at Singularity University, director of research at Pratt School of Engineering, Duke University, and a fellow at Stanford Law School, thinks so. A good friend of the Making Sen$e Business Desk, Wadhwa takes another look at Microsoft's future -- an issue he explored earlier this week in his column on the Washington Post's Innovations blog.
Vivek Wadhwa: When companies become too big, they usually lose their ability to innovate. There are a few notable exceptions, such as Apple, GE and Google, but most become complacent and focus increasingly on defending their existing turf rather than on creating new markets. Thus they begin their march into oblivion.
That is the present state of Microsoft. It has become an old giant, obsessed with defending its aging products. If Microsoft doesn't change course, it is likely to suffer the same fate as that old superpower, the former Soviet Union, whose obsession with preserving its bloated bureaucracy led to its destruction.
Microsoft has lost ground in practically every emerging field, including mobile computing, music players, smartphones, search and social networking. Yes, it has had an odd success or two, such as the Xbox, but these are just flukes.
It isn't that Microsoft doesn't have talented people working for it. Quite to the contrary, it has an abundance of talent. For two decades, it was the tech industry's strongest talent magnet. It hired the best of the best. And most of these geniuses haven't left -- yet.
My former students and friends who work at Microsoft tell me that they love the company, but are stifled by its bureaucracy, turf wars and central planning. Big ideas get quashed because they don't fit into the corporate vision; products with great potential are killed because they could threaten the company's core products. These employees believe that their talent is being wasted. They long for the days when Microsoft was a lean mean fighting machine.
That's why I believe that the best path forward for Microsoft is to break itself up into a number of fighting machines -- smaller companies that compete with upstarts in Silicon Valley and with each other. These micro-Microsofts need to have the freedom to take risks and cannibalize the company's core products. That won't happen under its present structure.
The Windows 8 fiasco illustrates the problems that Microsoft faces. Windows RT, the version of Windows 8 that was designed for tablet computers with touch screens, has a beautiful user interface and functionality. In many ways, it is better than Apple's iOS and Google's Android. But Microsoft was obsessed with protecting its Windows operating system and Office tools franchise. So it bundled a version of Microsoft Office into RT. To make the desktop version of Windows 8 consistent with RT, it added to it the same tiled user interface and removed the Start button.
Most desktop computers and laptops, however, don't have touch screens. And Windows users aren't used to computers without Start buttons. So they hated Windows 8 desktop, and it was a commercial disaster.
The inclusion of Microsoft Office on RT and Microsoft's desire to protect its operating system's pricing structure led it to charge re-sellers a price rumored to be about $85 (the re-seller price is a well-guarded secret). This is more than what lower-end tablets will soon cost, and competes directly with Android, which Google gives away. That's why RT, too, was a commercial disaster.
The sensible thing for Microsoft to do would have been to provide a lighter version of RT -- for free. It would have competed head to head with Android and would likely have won because it has a superior user interface. Microsoft could have made money by charging for special features and apps such as Office. If Microsoft's RT division had had the freedom, it might also have done the unimaginable by bundling Google's Office apps and other competitive products into it.
Tablet prices are dropping rapidly. I expect that next year, there will be several players selling devices that cost less than $100. Full-featured tablets that cost around $50 -- and less -- are also on the horizon. When these become available, the market for tablets will explode. There will be hundreds of millions, perhaps billions, of such devices. Instead of running Microsoft's RT, they will likely run Android. Microsoft has lost its opportunity to sell additional products on these devices through its obsession with protecting its legacy software. Windows and Office will likely slip into oblivion like the five year plans and Politburo the Soviet Union clung to.
But there is still hope for Microsoft. It has a wealth of great people and great technologies in its labs. They need to be untethered from the central bureaucracy and set free to compete and take big risks. I am not too optimistic, though, that this will happen. I worry that Microsoft will go the way of Kodak, RIM and Nokia -- or even the former Soviet Union -- all of which tanked because they were busy protecting old turf.
SUMMARY: The Bangladeshi garment factory collapse is the worst disaster ever for the country's booming clothing industry. Ray Suarez discusses the role of Western retailers in keeping foreign workers safe with Avedis Seferian of Worldwide Responsible Accredited Production and Scott Nova of Worker Rights Consortium.
RAY SUAREZ (Newshour): Wailing relatives tried to console one another as the death toll from Wednesday's collapse of an eight-story building kept climbing. This father was left weeping with his son's coffin at his feet. Others held up photos of loved ones still missing.
WOMAN: For the last three days, I have been looking for my sister, but no trace. I want get my sister back, alive or dead.
RAY SUAREZ: So far, rescue crews have pulled more than 80 survivors from the rubble. One government official said 41 of those were found alive in a single room overnight. At a nearby hospital, an 18-year-old worker described her ordeal.
WOMAN: First, a machine fell over my hand and I was crushed under the debris. Then the roof collapsed over me. I was rescued last night, but my hand had to be amputated.
RAY SUAREZ: And with high humidity and daytime temperatures reaching 95 degrees, there are fears that time is running out for those still trapped.
Meanwhile, a local television station released video showing police inspecting the site on Tuesday, a day before the deadly collapse. Large cracks were visible, but garment factories at the site continued running anyway.
Some of them make clothing for several major retailers in North America. Today, thousands of garment workers protested poor conditions and called for the building's owners to be punished. Some demonstrators clashed with police, but the rallies were mostly peaceful. This new disaster came just five months after a garment factory fire in Bangladesh killed 112 workers.
For more on all of this, we get two views. Avedis Seferian is the president and CEO of Worldwide Responsible Accredited Production, or WRAP, an organization created by the American Apparel and Footwear Association, along with buyers and brands around the world. And Scott Nova is executive director of the Worker Rights Consortium, a labor rights monitoring organization.
As rescuers struggled on Thursday to reach survivors in one of the worst manufacturing disasters in history, pointed questions were being raised about why a Bangladesh factory building was not padlocked after terrified workers notified the police, government officials and a powerful garment industry group about cracks in the walls.
As the death toll neared 300, the owner of the collapsed building, the eight-story Rana Plaza, was in hiding, and the police and industry leaders were blaming him for offering false assurances to factory bosses that the structure was sound, leading to the decision to allow 3,000 workers return to work.
Pressure continued to build on Western companies that had promised after a deadly fire in November to take steps to ensure the safety of Bangladeshi factories that make the goods the companies sell. Activists combing through the rubble here have already discovered labels and documents linking the factories to major European and American brands, like the Children’s Place, Benetton, Cato Fashions, Mango and others.
PVH, the parent company of Calvin Klein and Tommy Hilfiger, and Tchibo, a German retailer, have endorsed a plan in which Western retailers would finance fire safety efforts and structural upgrades in Bangladeshi factories — although they first want other companies to sign on.
Walmart has refused to join that effort. But, in January, it announced that it would demand that factories quickly correct any safety violations and would dismiss any contractor that uses unapproved or unsafe factories. Two weeks ago, Walmart pledged $1.8 million to establish a health and safety institute in Bangladesh to train 2,000 factory managers about fire safety.
On Thursday, the Bangladeshi authorities opened an investigation into the collapse, while the police brought negligence charges against the building’s owner, Sohel Rana, his father and the owners of four factories in the building. Bangladesh’s High Court also issued a summons for Mr. Rana, who is involved in local politics for the country’s ruling party, the Awami League. He has been ordered to appear in court next Tuesday.
The immediate question was why the garment factories on the upper floors of the Rana Plaza building in Savar, outside Dhaka, the capital, were operating when the structure collapsed Wednesday morning. Industry leaders continued to point to Mr. Rana and what they said were his false assertions that the structure was safe. “Based on that, they ran the factories yesterday,” said Mohammad Atiqul Islam, the president of the Bangladesh Garment Manufacturers and Exporters Association, in a telephone interview. He said his staff had told factory owners on Tuesday to stay closed until the building was inspected. “We had very clearly told the owners not to open.”
But analysts said that, based on past experience, there was likely to be plenty of blame to go around, with harried factory owners scrambling to fill orders under tight deadlines imposed by their Western customers.
“Even in a situation of grave threat, when they saw cracks in the walls, factory managers thought it was too risky not to work because of the pressure on them from U.S. and European retailers to deliver their goods on time,” said Dara O’Rourke, an expert on workplace monitoring at the University of California, Berkeley. He added that the prices Western companies pay “are so low that they are at the root of why these factories are cutting corners on fire safety and building safety.”
China's push into solar energy was supposed to be a proud example of how the country was advancing into hi-tech manufacturing. But now the whole sector is on the brink of bankruptcy.
Two years ago, LDK Solar, one of China's largest solar panel makers, built a new, state-of-the-art factory in the central city of Hefei.
It sits in one of the city's industrial parks, a big LDK Solar logo on its wall, with the New York-listed company's slogan underneath: "Lighting the Future".
"It cost 2.5 billion yuan (£250m) to build, the majority of the equipment was imported from Germany, and it hired 5,000 staff," said Jie Xiaoming, a 30-year-old who works at the plant's quality control and packaging department.
Last month, however, 4,500 of the staff were put on gardening leave. They receive 700 yuan a month to stay at home. The factory has shut down 24 of its 32 production lines.
"There do not seem to be any orders. People are still turning up for work, but mostly just sleeping. The management has not said much, just that the United States has a new policy that is stopping our exports," said Mr Jie.
Since it was set up in 2005, LDK Solar, along with several other Chinese solar panel makers, has enjoyed heady growth. Solar power, along with biotechnology and aerospace, was declared a "strategic emerging industry" and was given grants and low-cost loans.
It funneled the cheap credit into an aggressive expansion, hoping to provide an entire industry chain of products and services.
Meanwhile, in Europe and the US, governments provided subsidies to buy Chinese-made panels as part of commitments to boost renewable energy.
But the incentives created a glut of suppliers, and since 2010, the price of polysilicon wafers has fallen by nearly three-quarters. The price is now below the production cost - in the latest quarter, LDK Solar's gross margin was -65.5pc.
Meanwhile, the debt crisis in Europe has cut government subsidies to the sector and the US imposed a 31pc tariff in May on Chinese wafers, complaining that manufacturers were being underwritten by the government.
In July a group of 25 European solar companies followed suit, filing an anti-dumping complaint with the European Union.
At the same time, the quality of the solar equipment being made by Chinese companies, even by the biggest companies, is often not export-grade.
While the Chinese government has promised to hugely increase its purchases of solar panels, there is a significant excess capacity in the domestic market that has kept prices low.
China's big five firms are all reporting disastrous trading and heavily indebted balance sheets. At the end of the first quarter, JA Solar listed debt and liabilities of $1.5 billion, Trina Solar had debts of $1.08 billion, and Yingli had debts of $3.44 billion.
Suntech, once held up as a model company, could have to pay $690m in collateral related to a possible fraud, and it also has a $541m convertible bond payment in early 2013. Its total debts are $3.58 billion.
In the first quarter, LDK lost $185.2m as sales dropped by nearly 75pc. "When they came to remove staff, they simply chose a percentage who would remain," said another worker outside the Hefei plant, who declined to be named. "The whole industry is doing badly, and LDK also had a strategy problem. There is no point in worrying now. It is simply a matter of time before the factory closes. I give it a maximum of six months," he said.
For the time being, the Chinese government is determined to keep LDK alive. The authorities in Xinyu, where it is headquartered, have announced they will roll 500 million yuan of the company's debts into their annual budget.
A bank official told Caixin, a Chinese magazine, that Xinyu government had set aside a total of 2 billion yuan to bail out the firm. Government officials, who boasted that they wanted to turn Xinyu into a "silicon town", are desperate not to lose face. But so far LDK is rumored to have laid off 10,000 workers and defaulted on payments of around 600 million yuan to 20 suppliers, according to Caixin.
"I don’t think we will close though. I think the worst situation we will be sold," said Mr Jie. "Apparently Sharp is interested."
Sharp's interest is unclear, and so far there has been no queue of buyers. Jiangxi Copper Corporation was rumored to be a possible bidder, on the orders of the local government, but Pan Qifang, secretary of its board of directors, summed up the general wariness of the market: "Our company is not familiar with the solar industry, so we cannot rush into it," he said.
LDK Solar declined to comment.
SUMMARY: Paul Solman reports on one African-American family's year-long mission to shop only at black-owned businesses. Part of his Making Sen$e of financial news series, Solman speaks with the family about their "Empowerment Experiment," and looks at some of the challenges African American entrepreneurs face.
Long before the Occupy movement sparked renewed protest of growing inequality, another global movement was quietly engaged in building a more democratic economy. From coffee growers in Kenya seeking a fair market price to worker-owned green businesses reviving the American Rust Belt, cooperatives are helping to spur a reinvention of work in a period of worldwide recession.
In the current economic crisis, cooperatives have often proven more resilient than traditional businesses, and many believe that the scope of worker- and member-owned enterprises across the world represents a revolution in the making. Globally, an estimated 1 billion people are members of cooperatives. With combined earnings rivaling Canada’s GDP, co-ops could be the fastest-growing business model by the end of the decade. To promote awareness of their potential, the United Nations has declared 2012 the “International Year of Cooperatives.” In response, cooperative organizers are calling for protest movements to support building “an economy worth occupying.”
“It was really serendipitous that the ‘Year of Cooperatives’ happened at the same time as the Occupy movement,” says Cheyenna Weber of SolidarityNYC, a group that links social movements with “solidarity economy” initiatives. “There’s so much attention to this because people are intimately aware that the economic crisis is not going away on its own … they’re starting to get serious about doing it themselves.”
But do the swelling numbers of cooperative businesses amount to a force capable of transforming the broader economy? Governmental support for co-ops, though increasing at the behest of the U.N., is based on the principle that co-ops can create employment as part of a mixed economy, most often in sectors where capital has retreated. And though most co-ops follow a set of seven principles – among them open membership, autonomy and concern for community – there are significant differences in how directly members or workers participate in decision-making and how explicitly they engage with broader economic justice movements.
Moreover, because growth-oriented cooperatives must continue to compete in a capitalist market (though the Evergreen cooperatives in Cleveland have been able to make use of a quasi-public market that draws on the purchasing power of local hospitals and universities), contradictions often emerge between the enterprise’s business practices and the values it espouses. While the Mondragon cooperatives in Spain’s Basque region – often considered the most successful example of worker-owned enterprise – have been hailed for their collaborative handling of economic downturn, protecting jobs at home has necessitated an expansion of their operations overseas. Today, the group has more subsidiaries abroad than actual cooperatives, and uses a two-tier system of membership in which nonmembers are not eligible to vote or share in other benefits enjoyed by members. In January 2011, one of Mondragon’s appliance factories in Poland became the target of a go-slow strike from workers fighting stagnant wages and the use of temporary workers.
Elsewhere in the world, worker-owned enterprises have also struggled with identity crises: Argentina’s famous occupied factory movement has suffered divisions between those factories that seek legal recognition from the state and viability within a market economy and those that have maintained an anti-capitalist stance and attempt to further the spread of occupations.
Though cooperatives represent a promising means of building new economic models, many activists are quick to point out that the old ones aren’t going to disappear without a fight. For this reason, Weber says, her group’s early efforts to engage with Occupy Wall Street (OWS) were sometimes marked by distrust. “Certain people are really attached to the idea that cooperatives aren’t radical enough,” she says. “But there’s a tension: You have to build something, and you also have to create space for it to be built. We’re looking for a way to push our vision as far as we can within existing economic models.”
Within OWS, New York activists have started two co-ops – a screen-printing guild and “OccuCopy,” which provides printing and designs for progressive groups – and are in the process of starting two more.
Gar Alperovitz, author of America Beyond Capitalism, notes that activists could also play a greater role in organizing within existing cooperatives and supporting workers’ efforts to become owners. After winning a reprieve of their plant’s closing with support from local labor groups and Occupy Chicago in February, the United Electrical workers who famously occupied the Republic Windows and Doors plant in 2008 are now considering purchasing the plant and running it as a worker co-op. And in March, the United Steelworkers and Mondragon announced details of a plan to develop manufacturing cooperatives using a “union co-op model.” Both developments represent promising models of how traditional progressive institutions can foster initiatives for democratic ownership.
“Any serious political movement has historically walked on two legs,” says Alperovitz. “It had to involve protests, elections and demonstrations … [and]building a new direction institutionally… . We’ve got to do both.”
GWEN IFILL (Newshour): ..... the continuing fallout and widening scope of investigations into the Murdoch newspaper empire in England. It's the subject of international attention today after another leadership shakeup today.
Thirty-nine-year-old James Murdoch has been under pressure since the phone-hacking scandal erupted in Britain last summer. Now the youngest son of Rupert Murdoch is stepping down as executive chairman of News International, the British newspaper division of his father's media conglomerate.
James Murdoch oversaw News of the World, the tabloid engulfed and ultimately driven out of business by revelations that journalists regularly hacked voicemails of celebrities, politicians and even crime victims.
Murdoch and his deputies all said they had no idea what was going on.
JAMES MURDOCH, News Corporation: I feel regret. Clearly, the practices of certain individuals didn't live up to the standards and quality of journalism that we believe in, and that I believe in, and that this company believes in.
GWEN IFILL: But the disclosures kept coming. Murdoch twice changed his story about what he knew and when. Some lawmakers were left incredulous at this parliamentary hearing in November.
