(NEW YORK) — Federal prosecutors in New York on Wednesday announced criminal charges against the founder of a private investment firm and its chief financial officer for alleged “manipulative trading” and “deceptive conduct” that led to a multibillion-dollar fraud.
Bill Hwang, the founder of Archegos Capital Management, and Patrick Halligan, the CFO, were charged with racketeering conspiracy, securities fraud and wire fraud.
According to the indictment, Hwang and Halligan “corrupted the operations and activities of the family office known as Archegos” and used it “as an instrument of market manipulation and fraud.” Family offices serve high-net-worth individuals and families.
Lawrence Lustberg, an attorney who represents Hwang, said he was “extremely disappointed” with the charges.
“We are extremely disappointed that the U.S. Attorney’s Office has seen fit to indict a case that has absolutely no factual or legal basis; a prosecution of this type, for open-market transactions, is unprecedented and threatens all investors,” Lustberg said in a statement. “As you will see when the facts unfold, Bill Hwang is entirely innocent of any wrongdoing; there is no evidence whatsoever that he committed any kind of crime, let alone the overblown allegations that pervade this indictment.”
Mary Mulligan, a lawyer for Halligan, said in a statement that her client is “innocent and will be exonerated.”
The consequences were far-reaching, prosecutors said. The stock prices of a number of companies were manipulated, employees’ savings were gambled and different banks were left with billions of dollars in losses. UBS alone lost $861 million, according to the indictment.
The criminal charges followed the spectacular implosion, in March 2021, of Archegos, which lost billions in mere days. Prosecutors said Hwang traded in a way that hid the true size of his positions from the rest of the investing public.
The alleged criminal conduct pumped Archegos’ portfolio – Hwang’s personal fortune – from $1.5 billion to $35 billion in one year, according to prosecutors.
(NEW YORK) — The road toward an all-electric vehicle future is long and filled with roadblocks concerning high costs and supply chain issues, according to automakers and motor vehicle experts.
However, the head of one of the world’s leading automakers said that motorists are hungry to shift into that new era.
Bill Ford, the chairman of the Ford Motor Company, spoke to ABC’s GMA 3 Tuesday about his company’s push into an all EV fleet. Ford touted that its electric offerings, such as the Mustang Mach-E and F-150 Lightning pickup truck, have been sold out.
“We are really betting the company,” he told GMA 3. “I’m so excited by the response that we’ve had to it.”
Ford Motor plans to have half of its fleet be EVs by 2030 and invested $5 billion in EVs this year, of 2021, Ford said.
Still, experts contend that the roadmap to a complete EV adoption has its roadblocks. Supply chain issues have made it harder for vehicle companies to produce the components for the vehicles as fast as other cars, motor vehicle experts said.
The nation’s budding charging infrastructure has left many communities, including those in rural areas, without any option to power an EV.
Ford said the company has been working its way through it, and insisted that the market for EVs would be stronger.
He noted that EVs have fewer moving parts than their gas-powered counterparts and that helps to lower the maintenance costs for customers.
Ford noted the F-150 Lightning’s starting price tag of $39,000.
“This is not a luxury vehicle at the high end of the market, where only a few people can do it. We’re bringing EVs into the range of the average person. We’re bringing EVs into the range of the average person,” he said.
Ford also talked about the concerns that some motorists have about the cost of powering EVs. While the vehicles can plug into a standard outlet, they can charge faster using an in home EV charging kit which can cost thousands of dollars to purchase and install.
President Joe Biden has touted EV infrastructure investments, including an expansion of the nation’s public charging grid, as part of his agenda and has pushed automakers to increase their EV output.
Last year he took a test drive in a F150 Lightning, flooring the truck in front of reporters.
(NEW YORK) — The funds to help states make transportation more sustainable have been promised, but will they be enough to propel the U.S. toward its emissions goals?
While it’s a step in the right direction, the $6.4 billion pledged by the Federal Highway Administration to help states fund projects to reduce greenhouse gas emissions will barely make a dent in the funds needed to help the U.S. meet its goal to be carbon neutral by 2050, experts said.
Transportation Secretary Pete Buttigieg announced last week that states would receive the money — part of a $1 trillion infrastructure package passed by Congress in November — over five years to create projects that support widespread use of electric vehicles and trail facilities for pedestrians and bicyclists.
“It’s a good start,” Tom Moerenhout, a research scholar at Columbia University’s Center on Global Energy Policy, told ABC News. “But, it’s not a lot of money.”
It will likely require more than $100 billion “to really make a dent into road-based or transportation-based carbon emissions,” which are the largest source of carbon emissions in the U.S., Moerenhout said.
While roads, bridges and train lines have “really long lifespans,” the decisions states make on where to allocate the funding will need to be strategic, as they will “stick with us through 2050,” Elizabeth Irvin, a senior transportation analyst at the Union of Concerned Scientists, told ABC News.
“That’s funding for states to work on transportation projects, where they’re explicitly taking into account both emission reductions and sustainability and also environmental justice,” Irvin said. “Those are all really important things.”
In the coming years, there will be a significant shift in the number of electric vehicles on the road, despite the war in Russia threatening to further disrupt the supply chain, Randy Bell, director of the Global Energy Center at the Atlantic Council, a nonpartisan think tank, told ABC News.
The changing market has been evident in the release of more electric crossover and SUVs, which is “what Americans want to drive,” Rawn said.
On Tuesday, Bill Ford, executive chairman of the Ford Motor Company, announced the first shipment of the F-150 Lightning, the first electric version of the top-selling truck in the U.S. for 45 years. Ford had to stop taking orders due to the “tremendous interest” in the Lightning, Ford said, adding that it sold out soon after the plans were announced last year.
The need for charging infrastructure to power these EVs will be “huge,” Bell said, echoing the need to spend money wisely.
“EV adoption is not uniform around the country,” Bell said.
The infrastructure for charging stations will also take the burden off families from having to install charging capabilities at home, Carol Lee Rawn, senior director of transportation at Ceres, a sustainability nonprofit, told ABC News.
“So you don’t have to worry about having a plug at your house,” she said. “You can plug when you go shopping, or when you go to work, and it’s also extremely helpful for businesses that are interested in transitioning to electrification.”
In addition, policymakers will need to consider infrastructure that allows people to walk and ride bikes and scooters safely, Rawn said, adding that E-bikes are becoming a viable alternative for many people.
Countries are now sprinting to meet the ambitious pledges made at COP26, the United Nations Climate Change Conference, in October 2021.
The Biden administration has continued to roll out a steady stream of initiatives to ease emissions from the transportation sector.
In December 2021, the Environmental Protection Agency announced its strictest vehicle emissions standards ever for cars and light trucks from model years 2023-2026. In February, the Transportation Department gave states the go-ahead to build electric car charging stations. And earlier this month, the National Highway Traffic Safety Administration issued new standards for vehicles sold in the U.S., requiring the average fuel efficiency to be at least 40 miles per gallon starting in 2026 — up from the 28 mpg standard enacted under former President Donald Trump.
Currently, the U.S. is not on track to meet its 2030 or even 2050 goals, Moerenhout said, adding that it will be especially important for governments to incentivize the reduction of emissions.
“I think Europe has shown that with tightening fuel emission standards, you can move people into more sustainable practices and incentivize electrification,” Moerenhout said. “But in the U.S., it has just been far too sporadic.”
With the Russian-backed conflict in Ukraine now detracting from the sense of urgency toward climate change, it will be imperative that governments find a way to address energy security and climate action together, Bell said.
“So you may end up with a more pragmatic pathway towards climate action, which ultimately becomes more economic, becomes more politically palatable and becomes much more realizable in the short to medium term,” he said.
(NEW YORK) — A new report diving into the data on vital measures of health and social determinants of health finds that women, and particularly women of color, continue to experience steep pay gaps, that many Americans cannot afford child care and many school districts may be underfunded.
The 2022 County Health Rankings report, shared in advance with ABC News, offers a unique snapshot of whether and how Americans are thriving — or as it may be, surviving.
Metrics like these are meaningful as the nation emerges from the COVID-19 pandemic and contends with the “intertwined crises of structural racism and economic exclusion” to examine how living wages or lack thereof “can impact a just recovery,” the report said.
“The data reinforces what we’ve known for some time. People in both rural and urban communities face long-standing barriers, systemic barriers — avoidable barriers — that get in the way of groups of people and places in our country from being able to live long and well,” Sheri Johnson, co-director of County Health Rankings & Roadmaps and director of the University of Wisconsin Population Health Institute, told ABC News.
The rankings find “troubling issues” affecting women and families with children regarding economic security and family support, underscoring what the pandemic has repeatedly laid bare: “glaring failures” within the infrastructures of wage equity, child care costs and school funding.
Equal pay is not just a ‘women’s issue’
Women earn little more than 80 cents for every dollar men earn, on average, for the same work, the rankings find. But that’s not all.
To earn the $61,807 average salary of a white man, an Asian woman must work an extra 34 days, the report said.
A white woman must work 103 more days to earn that same $62,000 salary.
The report said a Black woman must work 223 days to make up that difference, while an American Indian/Alaska Native woman would have to work 266 days.
A Hispanic woman would have to work 299 days to make up that salary difference.
COVID’s prolonged toll “exposed the labor force barriers that prevent full participation of women and caregivers” and “places an additional burden on women with low incomes and women of color, who are the least likely to have employer-provided benefits,” the study said.
An economic security infrastructure that is inequitable for some weakens the entire system, Johnson said.
“There are consequences when we haven’t constructed community conditions for everyone to thrive,” Johnson said.
Child care costs exceed what many Americans can afford
Across counties, a family with two children spends, on average, a quarter of its household income on child care, the report said.
For those making the hourly $7.25 federal minimum wage, child care costs would take up nearly 90% of their annual income.
By that math, the average child care provider likely cannot afford their own services, which would consume more than half their average $25,460 annual income if they had two children.
“That’s pretty striking,” Johnson said — especially when contrasted with the government’s suggestion that families not spend more than 7% of their income on child care.
The rankings find that during the pandemic, the lack of affordable child care forced parents — especially mothers — out of the workforce and also hit child care providers, who were disproportionately women, which harmed families’ and communities’ well-being.
Stark differences in school funding across rural, urban and suburban communities
Half of all counties included in this analysis had school districts operating at a deficit, the rankings find. Among those districts, per-pupil spending, on average, was $3,000 below the annual estimated amount needed to support average test scores.
While schools in large urban metro counties, on average, operated under large deficits, schools in rural counties — the majority of all U.S. counties — were overrepresented among counties with inadequate school funding.
There are “patterns of disinvestment” reflected by the disproportionate geographic spread of school funding deficits, Johnson said.
Many counties in the western and southern U.S. operate with funding deficits. School districts in these counties, on average, spend less than what is estimated to be necessary to achieve national average test scores.
Counties with higher proportions of Black, Hispanic and American Indian & Alaska Native populations experience funding deficits notably greater than most U.S. counties, the report found. Funding deficits are especially high in the Southern Black Belt region.
A solution: relieving the “stress pathways” that exacerbate poor health among those who were already hurting, Johnson said, such as “ensuring equal pay for equal work through policies such as paid family leave, paid sick leave, universal basic income, living wage laws, Child Tax Credit expansion, and the Earned Income Tax Credit,” the report says.
“We can expect more of the same if we do nothing,” Johnson said. “And the same is not fair. It’s not just, and it’s not necessary.”
(NEW YORK) — While Democrats raise alarms and Republicans celebrate Twitter’s announcement Monday that Elon Musk was buying the platform for $44 billion, experts weigh what political impact the world’s richest man will have on the social media giant and whether his private ownership once the sale completes later this year could include clearing the way for Donald Trump’s return.
Some Democrats are already painting a dire picture of the platform’s future, with Sen. Elizabeth Warren, D-Mass., calling the sale “dangerous for our democracy,” while Republicans have declared it a victory for “free speech” — with Musk having described himself as a “free speech absolutist.”
The Tesla and SpaceX entrepreneur has long been critical of how Twitter manages its content, pushing for looser moderation, and Republicans have blasted the platform for booting former President Donald Trump in the wake of the Jan. 6 attack on the Capitol, arguing it’s become too heavy-handed against conservatives voices.
“This is a great day to be conservative on Twitter,” Sen. Marsha Blackburn, R-Tenn., tweeted Monday. “Elon Musk buying Twitter terrifies the left because they don’t want their power to censor conservatives threatened,” she added.
Rep. Lauren Boebert, R-Colo., also touted the news, tweeting, “Elon Musk now literally owns the libs,” and Rep. Jim Jordan, R-Ohio, tweeted, “Free speech is making a comeback.”
Since Musk announced his proposal to buy Twitter via a tweet just 11 days ago, Republicans have largely rallied behind him. He told a TED conference one day after submitting his bid that his takeover plan is about free speech.
“If in doubt, let the speech exist,” he said. “If it’s a gray area, I would say, let the tweet exist. But obviously, in the case where there’s perhaps a lot of controversy, you would not necessarily want to promote that tweet.”
Musk has argued that Twitter’s content moderators intervene too much on the platform, calling it the internet’s “de facto town square.”
“Free speech is the bedrock of a functioning democracy, and Twitter is the digital town square where matters vital to the future of humanity are debated,” Musk said in a release announcing the deal Monday. “I also want to make Twitter better than ever by enhancing the product with new features, making the algorithms open source to increase trust, defeating the spam bots, and authenticating all humans.”
“Twitter has tremendous potential — I look forward to working with the company and the community of users to unlock it,” he added.
But experts warn against what the social media giant’s landscape would look like without current misinformation policies in place and if all users who have been kicked off were allowed back on — while voices to fact check them might leave the site in defiance.
Angelo Carusone, president of watchdog media nonprofit Media Matters, said to expect to see Trump’s account to be restored along with a host of other accounts that had previously violated Twitter’s rules.
“Elon Musk will unwind a whole range of very basic protections against harassment, abuse, and disinformation that Twitter has spent years putting into practice — effectively opening the floodgates of hate and lies and using Twitter’s position as a market leader to pressure other social media companies to backslide,” Carusone said in a statement Monday.
“The race to the bottom begins,” he added.
The American Civil Liberties Union raised concerns similar to Warren — with one person, Musk, in this case, also the world’s richest man, obtaining “so much control over the boundaries of our political speech online.”
Musk hasn’t said whether he will allow banned users back on, and Tump has claimed that even if he’s reinstated, he intends to stay off the platform in favor of his own platform.
“I am not going on Twitter, I am going to stay on TRUTH,” Trump told Fox News Monday. “I hope Elon buys Twitter because he’ll make improvements to it and he is a good man, but I am going to be staying on TRUTH.”
Georgia Rep. Marjorie Taylor Greene, whose personal Twitter account was permanently suspended in January for “repeated violations” of Twitter’s COVID misinformation policy, reactedto the sale from her government account, saying Twitter violated her freedom of speech “along with an unknown number of Americans.”
“I want everyone else to have theirs back too, if they choose it,” she said.
(SAN FRANCISCO) — Twitter announced on Monday that Elon Musk, the CEO of SpaceX and Tesla, is acquiring the social media giant for approximately $44 billion.
Per the terms of the agreement, Twitter stockholders will receive $54.20 for every share they own.
“The Twitter Board conducted a thoughtful and comprehensive process to assess Elon’s proposal with a deliberate focus on value, certainty, and financing,” said Bret Taylor, Twitter’s independent board chair, in a statement. “The proposed transaction will deliver a substantial cash premium, and we believe it is the best path forward for Twitter’s stockholders.”
The transaction, which was unanimously approved by Twitter’s board of directors, is expected to be finalized later this year pending the approval of stockholders, regulatory approvals and other closing conditions. Once completed, the social media giant will become a privately held company.
“Free speech is the bedrock of a functioning democracy, and Twitter is the digital town square where matters vital to the future of humanity are debated,” Musk said in a statement. “I also want to make Twitter better than ever by enhancing the product with new features, making the algorithms open source to increase trust, defeating the spam bots, and authenticating all humans.”
“Twitter has tremendous potential – I look forward to working with the company and the community of users to unlock it,” Musk continued.
(NEW YORK) — Wedding season is in full swing and a record number of couples are tying the knot.
An estimated 2.5 million weddings are set to be held this year, according to Shane McMurray, CEO of the Wedding Report — the most the U.S. has seen since 1984. The record total is due in part to many couples having postponed them due to the COVID-19 pandemic.
But with the large number of weddings this year, coupled with current supply chain issues and limited labor, the costs of weddings have also increased this year.
‘A perfect storm’
As of March 2022, the annual inflation rate in the U.S. accelerated to 8.5%, according to a report from the U.S. Department of Labor. The largest contributors to the increase were from gasoline, shelter and food. However, the inflation rate has also impacted the cost of weddings in 2022.
“What it boils down to is supply and demand,” McMurray said. “As people put off their wedding, because of the pandemic and weren’t able to get married, all of a sudden you’ve got this flux of people getting married.”
McMurray explained that there’s a huge demand for services, but there’s little capability to supply couples’ needs. Photographers and DJs are always in demand, but prices have been driven up because of the increased weddings in 2022. Top-rated venues and caterers are also upping their prices.
Flowers have also become one of the costlier parts of weddings this year. In 2021, couples spent an average of $2,245 on florals for their weddings, according to a wedding market update from Wedding Report. That number has only increased in 2022.
“The demand has increased so much for flowers that the prices have just gone up and we have to adjust our prices accordingly,” said Ashley Mueller of Ash and Oak Floral in California.
Mueller, who works with business partner Katie Reisman, said in an Instagram post that prices have increased because of inclement weather impacting supply, labor cost increases and supply chain issues.
When the COVID-19 pandemic began in 2020, Mueller and Reisman said that flowers weren’t planted. In California, where a lot of flowers are grown, a severe drought and wildfires also impacted the supply.
Mueller and Reisman explained that production on items such as vases and glue to make corsages were put on pause during the pandemic.
“It’s kind of a perfect storm of all these factors increasing our prices,” Reisman said.
Keeping up with traditions on a budget
The soaring costs have put a strain on couples. Sravya Vishnubhatla, a Desi bride having a Hindu wedding, which is typically a multiday celebration with hundreds of guests, told GMA that she’s had to drop some of the things on her wedding wishlist to cut down the costs.
“I’m definitely forgoing maybe like a certain type of vision,” said Vishnubhatla, who is getting married in May in Nevada. “I very carefully lifted up the hours [of our photographer and videographer] that they need to be there. Another thing that I am actually compromising on is on the decor for my reception. I’m probably not going to go with like heavy floral decor.”
Over the years, the South Asian wedding industry has grown into a $50 billion business, according to Vogue Business. In the U.S., South Asian couples can easily spend between $225,000 and $285,000 on their wedding if it’s being held in major metro areas including Los Angeles, Chicago and New Jersey, according to wedding planner and event coordinator Marisa Jenkins, author of the blog, Wedding Frontier.
To help curb costs, Vishnubhatla had her dad do some of the wedding shopping for her outfits while on a recent trip to India. Vishnubhatla said it’s typical for South Asian brides to travel to India for wedding elements, but because of COVID-19 she was unsure if she would be able to make the trip.
“I got really lucky because my dad went to India, so he was able to shop. If he hadn’t gone to India, it seemed like we would have had to either buy online from India and ship it or shop somewhere online in the states where it’s overpriced,” she said.
In January, Vishnubhatla took to TikTok to share the reality of the expense of South Asian wedding traditions after other brides weighed in on the cost of their weddings. Vishnubhatla pointed out that certain costs for a Western wedding aren’t the same for Hindu weddings. Since then, she’s brought people along with her wedding journey to shed light on what goes into planning a Hindu wedding and what brides have to include in their budgets.
“I realized that there’s just not many resources in the states, from what we could find, for brides,” Vishnubhatla said. “I felt like it would be useful and helpful for other Indian girls who are getting married.”
Play the patience game and ‘invest in what feels personal to you’
With the cost of weddings on the rise in 2022, McMurray said those planning weddings may see a relief in 2024.
“The influx of weddings you’re seeing this year is all pent-up demand, and there’s not more people getting married [in general]. In fact, there’s less people getting married than there have been in many years,” McMurray said. “So you’ll see this spread out over 2023, maybe it will trickle into 2024, likely not. But after that, it’s probably just going to continue to get back to normal with a continuous decline.”
For now, McMurray advises that couples stay patient as they find vendors for their weddings within their budget. And if their wedding is in 2024, the best thing they could probably do is wait to book things for their wedding until later.
“I know that’s hard to do sometimes, and that’s actually what’s driving up spending right now are costs because people don’t want to be patient,” McMurray said.
Mueller and Reisman also advised couples to beware of repurposing certain items from your ceremony to wedding reception spaces. While many think repurposing flowers or decorations may be a way to cut costs, it can also mean that it will take more labor to move those items and can cost more money in the end.
In addition, be aware of what you see on social media and try not to be influenced by what is trending as certain designs may only feel trendy in the moment and may be beyond your budget. Instead, opt for flowers that are in season and designs that have a classic or timeless feel.
“Invest in what feels personal to you,” Reisman said. “If it doesn’t, don’t spend money on it. If it does, spend money on it.”
(NEW YORK) — Auto shows were once a marquee event for automakers — a way to let interested buyers see, sit in, touch and get acquainted with the latest models. With many companies pulling out of shows over exorbitant fees and the COVID pandemic canceling shows all over the world, automakers are taking a new approach to win over customers: Haute cuisine and experience centers.
Take Korean luxury brand Genesis. Consumers attending the New York International Auto Show at the Javits Center in Manhattan will not find the stylish and sporty GV70, Genesis’ highly acclaimed sport-utility vehicle that went on sale last year, anywhere in the cavernous space. But a short drive away is the Genesis House, an immersive “sanctuary” in the Meatpacking District that gives consumers a taste of what to expect from the brand. On the first floor are the company’s latest vehicles as well as concept designs and samples of colors and materials.
The 46,000-square-foot space, which officially opened in November, acts as part showroom and part art gallery. The vibe? “Distinctly Korean,” according to the automaker.
On the second level is Onjium, a Michelin-starred restaurant and cultural institute from Seoul, that serves authentic, upscale Korean dishes to gastronomes while the Tea Pavilion, a “veranda-like living room,” offers tea and Korean cookies with panoramic views of the Hudson River and High Line.
“The way to anybody’s heart is through their stomachs, so it makes sense,” Tony Quiroga, editor-in-chief of Car and Driver, told ABC News of Genesis House. A memorable meal can “heighten the prestige” of a brand, he said, and automakers are desperate to stand out and build loyalty.
Japanese automaker Lexus won over car — and food — aficionados with its Intersect by Lexus restaurant, a culinary “experience” that featured world recognized chefs and rotating menus. The Lexus connection was subtle; a wall collage of whitewashed vehicle parts or the Lexus-spindle grille in the bamboo-laminated lattice seamlessly blended into the architecture. Lexus decided to close the Meatpacking restaurant in January.
“From the outset our goal was to build a space designed for people to experience the ethos of the Lexus lifestyle without getting behind the steering wheel,” according to a press release announcing the news. “INTERSECT was intended to enhance the Lexus brand in an impactful and meaningful way, and it did just that. We are proud of what we have accomplished, and we consider INTERSECT BY LEXUS- NYC a great success. The Lexus brand will continue to develop creative and innovative lifestyle experiences to experience amazing, and we look forward to sharing this with customers for years to come.”
Ed Kim, president and chief analyst of AutoPacific, said visitors to Genesis House can learn about the cultural influences on the vehicle’s designs.
“Many brands are looking at creative ways to get the brand message across to consumers,” he told ABC News.
BMW, Lotus, Ford and Porsche have experience centers dotted across the U.S., allowing enthusiasts to pay money to test-drive the hottest models on a track — and possibly leave with one, too.
“It happens all the time — people buy a BMW after the program,” Dan Gubitosa, director of BMW Performance Centers, told ABC News. “We point them to a dealer closest to where they live.”
BMW operates two performance driving schools: the Spartanburg, South Carolina, location opened in 1999 followed by the Thermal, California, track in 2015. In August BMW will open a satellite program — the BMW M Track Series — at Indianapolis Motor Speedway.
“We certainly expose people to the brand. That’s the objective of these schools,” Gubitosa said.
About 23,000 people attend BMW’s driving schools each year and the programs range from half or full-day instruction with professional race car drivers. Prices start at $299 for two hours and top out at $3,995 for two days at the M School.
“The high-performance cars are here. BMW’s most popular models — the X3 and X5 — are here too. We also have an off-road course. You can test-drive just about anything,” Gubitosa said.
Porsche has nine experience centers globally, with locations in Atlanta, Los Angeles, Shanghai, Germany, Italy and Tokyo. The tenth Porsche Experience Center [PEC] will welcome visitors in 2024 in Toronto.
“You don’t have to be an owner to come and drive or tour through the gallery,” Michelle Rainey, manager of the Atlanta Porsche Experience Center, told ABC News. “We want to be approachable to all people and we’re always making sure we have the latest and greatest vehicles so it’s representative of what’s at our Porsche dealers.”
More than 550,000 people have signed up for driving programs at the Atlanta and LA Experience Centers since 2015, according to a Porsche spokesperson. A major expansion to the Atlanta track, debuting in early 2023, includes a 1.3-mile handling circuit that was inspired by the Corkscrew at Laguna Seca, the Carousel from Germany’s Nurburgring-Nordschleife track and the Tail of the Dragon in the Smoky Mountains. There will also be a low-friction, wetted 197-feet asphalt circle and an ice-hill, with a wet and slick surface along with an incline and decline to demonstrate traction control, according to Porsche. Current programs start at $365 for 90 minutes and Porsche’s coveted sports cars like the 911 GT3, Taycan Turbo S and Cayman GT4 are available to drive.
“We’re teaching you all about the cars,” said Rainey. “We are always developing new programs that appeal to new audiences.”
Tyson Jominy, vice president of data and analytics at J.D. Power, pointed out that these experience centers are essentially creating brand ambassadors for automakers.
“If you buy a BMW and you go to the performance driving school, you’re going to be much more enthusiastic about the brand. It’s about indoctrinating you and getting you into the brand,” he told ABC News.
Added Kim: “For a brand like BMW or Porsche, performance is at the very core and very foundation of what they’re about. It makes sense to do things like experiences.”
Quiroga, of Car and Driver, still views auto shows as the ideal way to reach the largest audience of potential buyers. The NYIAS attracts at least 628,000 U.S. households on average each year, according to one report.
“Auto shows are incredibly expensive for manufacturers to attend … but they still matter for consumers,” he argued. “It’s still a really easy place to get excited and see a lot of cars without the pressure of a salesman. Not attending is going to hurt automakers eventually.”
(NEW YORK) — As millions take to the skies each day and airlines forecast what could be the most profitable summer ever, Americans should prepare for higher prices, more cancellations, and smaller airports losing all scheduled flight service.
Never before have U.S. airlines been more desperate for pilots. The massive pilot shortage affects not only the airlines but also the millions who fly each year.
Prepare for higher fares
U.S. airlines hope to add 13,000 pilots just this year, but America produces only between 5000 and 7000 pilots annually, according to United Airlines CEO Scott Kirby. With fewer pilots, supply will be limited and ticket prices will continue to climb with demand.
“The pilot shortage for the industry is real and most airlines are simply not going to be able to realize their capacity plan because there simply aren’t enough pilots, at least not for the next five plus years,” Kirby said. “The other really large airlines will also probably be able to attract enough pilots, but for anyone else, I just don’t think it’s mathematically possible to meet the pilot demand for the capacity plans that are out there.”
The U.S. will lose about half of its pilots to retirement in the next 15 years, according to the Regional Airline Association. American Airlines expects more than 5,000 of its 15,000 pilots to retire in the next seven years.
Earlier this month, American Airlines announced it would begin busing passengers from smaller cities to its hub in Philadelphia. JetBlue will cut its spring and summer flight schedule by 10 percent. In an earnings call Thursday, United’s Kirby said its regional partners have grounded 150 planes because of the pilot shortage.
“The airlines are underwater and trying to breathe through a straw,” American 737 Captain and Union spokesperson Dennis Tajer told ABC News. “Airlines are poaching each other’s pilots. It’s stunning the level of aggression.”
Mark Stinson is in flight school in Florida and still at least a year away from being qualified to join an airline, but the 31-year-old already has two job offers with regional airlines. Stinson says despite not having earned his commercial pilots license, one airline has offered to allow him to accrue vacation time the moment he signs a contract.
“The airlines are so hungry that they are taking just about anyone into these programs, and after pilots build enough hours they are applying directly into the majors,” Stinson says referring to the nation’s largest airlines. “Two of our instructors got hired directly with Spirit Airlines and will be going to training here shortly. They only have about 2 years’ experience. It’s insane. They will be airbus pilots in no time.”
American says it’s hiring 50-70 pilots each week in 2022, more than at any time in its history. United plans to hire more than 2000 pilots this year. United, Delta, American and Southwest pay among the highest salaries in the industry with United’s most senior pilots earning roughly $450,000 annually.
“The pilot shortage is real and it is grave. Larger airlines are able to recruit, but midsize and smaller airlines are having problems. Regional airlines, the airlines that operate the 50 to 75 seat airplanes that we see many airlines operate to small towns, they are really struggling and airlines have had to scale back or drop service to a lot of smaller communities,” Henry Harteveldt, president of travel analytics firm Atmosphere Research told ABC news.
Airline recruiters under extreme pressure to find pilots
Envoy Air, a wholly owned subsidiary of American Airlines, tells applicants they can earn up to $182,000 a year if a candidate promises to stay for at least two years and is certified to fly its Embraer regional jets.
“They’re reaching out to me, sending me emails. They don’t care. They just want to see that, you know, you’re getting your flight hours. They’ll do an interview with you and ask you a few HR questions, but then they just offer you the job automatically. So that’s how much in need they are of pilots,” Stinson said.
Why a shortage?
For several reasons: The FAA mandates pilots retire at 65, fewer pilots leaving the military, high cost and lengthy training times, and thousands of early retirements at the start of the pandemic.
During the second half of the 20th century, the military pumped out far more pilots than it does today; and now many of those pilots are rapidly approaching retirement. Obtaining a commercial pilot’s license today can easily cost between $80,000 and $170,000.
To help offset the shortage, United Airlines recently opened its own flight school, Aviate Academy. United plans to train 5000 pilots by 2030 and will subsidize training costs in return for a commitment to flying for the company.
Pilot fatigue
As travel demand rapidly increased in the months following the release of vaccinations, many airlines scheduled more flights than they could staff. Since last summer, we’ve seen multiple airline meltdowns.
“The airline management teams are trying to fly more than they have pilot staffing for,” American Capt. Dennis Tajer said. “We are seeing more fatigue reports than we’ve ever seen.”
Pilots from all major airlines have complained that their duty days are unpredictable, often running hours longer than scheduled and sometimes not knowing what day they will arrive back home. At Southwest, pilots say it’s not uncommon to arrive in a destination only to find out there is no hotel available.
“We are human beings and this is pressuring the margin of safety,” Tajer said.
Last week, pilots at Southwest wrote a letter to management about the more than 300% increase in pilot fatigue calls. If a pilot tells the airline he or she is fatigued, the pilot is automatically removed from the flight with no questions. This often results in delays and cancellations.
“Fatigue, both acute and cumulative, has become Southwest Airlines’ number-one safety threat,” the Southwest Airlines Pilots Association, told airline management in a recent letter.
Delta Air Lines pilots echo that message and have begun picketing at airports.
‘We are being pushed to our limits’
“We’ve flown record amounts of overtime during the pandemic to help Delta operate its schedule and get our passengers safely to their destinations. In many cases, pilots are flying long after their day or trip was supposed to end. Delta cannot continue to operate the schedule at redline with no room for error,” Capt. Jason Ambrosi, chairman of the Delta Master Executive Council of the Air Line Pilots Association said in a statement. “We are being pushed to our limits as Delta tries to add back flying and capture revenue.”Delta, Southwest, and American all responded, saying they constantly evaluate their schedules and that safety is their highest concern.
“We continuously evaluate our staffing models and plan ahead so that we can recover quickly when unforeseen circumstances arise, and the resilience of the Delta people is unmatched in that regard. Pilot schedules remain in line with all requirements set by the FAA as well as those outlined in our pilot contract,” a Delta spokesperson said in a statement to ABC News.
Southwest told ABC News it has revised its flight schedule to better match pilot supply.
“The increase is expected, as it’s common to experience an elevated level of fatigue calls during irregular operations and in March, the industry faced weather and airspace delays that resulted in disruptions across the network. The March increase in Pilot fatigue calls is a result of the system working as designed, allowing Crew to determine if they are too fatigued to fly,” Southwest wrote in a statement.
Solutions?
There are no quick fixes. Scott Kirby told investors that United plans to hire at least half the 5000 new pilots each year, adding it will be at least five or six years before there might be relief for the mid-size and regional airlines.
“Pilots salaries are higher than ever, and there’s never been a better time to be a commercial airline pilot,” Faye Malarkey Black, the President and CEO of the Regional Airline Association said in an interview with ABC News. “I will say we’ve made the grass on the other side of the fence very, very green. This is an attractive career with a really high ROI on the training dollar. The problem is, if you can’t get over the fence, it doesn’t matter how green the grass is on the other side, you can’t access it.”
Student loans can be difficult to obtain and expensive, making it impossible for some aspiring pilots. “You’re allowed to use a student loan to cover flight training, but it’s not enough. Student loan is capped in an undergraduate environment, and it doesn’t come close to covering the actual cost of a flight training degree,” Malarkey Black explained. Airline trade groups are lobbying for fundamental policy changes to ensure any aspiring pilot has the ability to attend flight school. For now there is no legislation on the table.
Bottom line
Consumers should expect higher fares, fewer flights, and more cancellations in the coming years.
However, If you are looking for a lucrative career and ready to put in the time and money, you likely won’t have a problem finding a job as an airline pilot.
According to the CPSC, Best Buy has received 68 reports from U.S. consumers and 36 reports from Canadian consumers of the air fryer or air fryer ovens catching fire, burning or melting.
These include seven reports of minor property damage and two reports of injuries, including an injury to a child’s leg.
Consumers are advised to immediately stop using the recalled product and return it to Best Buy for a refund in the form of a store credit, Best Buy said. The company said it is also contacting known purchasers directly to arrange returns.
