Amazon Loses French Appeal to Sell Nonessential Items: Live Updates


Amazon lost an appeal on Friday of a French court decision that ordered the e-commerce giant to stop delivering nonessential items in France during the coronavirus crisis, in order to protect workers.

The Versailles Court of Appeals upheld a lower court’s ruling, made last week, that prompted Amazon to shutter its six mammoth warehouses around France temporarily and put its 10,000 workers on paid furlough.

Under the ruling, Amazon can deliver only health items, food, tech products and pet food until it carries out a risk evaluation of its sites within a month in consultation with French unions. Labor organizations in France have clashed with Amazon for refusing to engage with them on health protocols to protect employees from the threat of the virus at Amazon’s warehouses.

The court said Amazon would be fined 100,000 euros, or around $108,000, for every delivery not meeting the requirement.

In a statement, Amazon said it had “taken note of the outcome” and would assess the consequences of the decision for its business, employees, customers and the small and medium-sized businesses that sell on its platform.

Last week, Amazon blasted the unions that brought the court case, saying there was “concrete evidence” that it had worked to strengthen safety measures at warehouses around France.

Workers at a Smithfield pork plant say their conditions present a health hazard.

Coronavirus infections are a significant problem at meatpacking plants in the United States. Several workers have died, and many plants have closed or reduced output. Now a complaint on behalf of workers at a Smithfield Foods pork plant in Milan, Mo., has brought a renewed focus to working conditions in the industry.

It also seeks to test a novel legal question: whether health hazards at the plant present a public nuisance.

The complaint says workers are typically required to stand almost shoulder to shoulder, must often go hours without being able to clean or sanitize their hands, and have difficulty taking sick leave. Workers say they are reluctant to cover their mouths while coughing or to clean their faces after sneezing because they might miss a piece of meat as it goes by, creating a risk of disciplinary action.

The claims appear in a complaint filed Thursday in federal court by an anonymous Smithfield worker and the Rural Community Workers Alliance, a local advocacy group whose leadership council includes several other Smithfield workers.

Smithfield said the complaint was without merit. “The health and safety of our employees is our top priority,” said Keira Lombardo, executive vice president for corporate affairs and compliance.

An early rally on Wall Street faded and global markets slipped, as a week of dramatic turns in the financial markets came to a close.

The S&P 500 rose about half a percent at the start of trading Friday but was essentially flat soon after. Shares in Europe were slightly lower, and Asian markets had also had a down day.

But the focus among traders in the U.S. this week has been oil prices after the American benchmark for crude crashed into negative territory on Monday — an unprecedented move that broke through the relative calm that had settled over financial markets. On Tuesday, stocks suffered their sharpest drop in three weeks after the dive in oil prices, and even after rebounding slightly the S&P 500 is still on track to end the week with a drop.

Oil prices continued to find a footing on Friday, climbing slightly after a sharp rebound earlier in the week. Still, they remain near historical lows amid concerns about oversupply.

Still, stocks are subject to sudden changes in sentiment or reversals in efforts to reopen economies. Economic and corporate data continues to outline the toll the coronavirus has taken on the global economy, and American officials emphasized that recovery would be difficult. On Friday, new data showed that the near-shutdown of the economy has pushed U.S. manufacturing into free-fall.

And even as some companies begin to consider reopening factories, they face opposition in some quarters. For example, the United Automobile Workers union said on Thursday that it was opposed to companies restarting auto production next month, saying it was not yet safe for its members to return to work.

An ad hoc network of companies, wealthy individuals, academics and former diplomats has emerged to help the United States get the Chinese-made goods it needs to save coronavirus patients and protect front-line workers — and, perhaps, to help polish China’s dented image along the way.

The United States faces a desperate shortage of medical gear, including masks and ventilators, and Chinese factories are able to produce them. But a snarled supply chain and complicated politics stand between production and delivery, and those with stakes in keeping the U.S.-China relationship alive are stepping in to help.

The group includes people like Jack Ma and Joseph Tsai, the founders of Alibaba, the Chinese e-commerce giant; Marc Benioff, a co-founder of Salesforce, who struck a pact with Alibaba last year to sell its services in China; and Yichen Zhang, the chairman of Citic Capital, a major Chinese investment firm affiliated with a state-run conglomerate.

Responding to calls for help from doctors, Mr. Zhang saw a chance to help one of Citic Capital’s portfolio companies, which got into the business of making protective gear for China during its own outbreak, and Yale University, which his daughter attends. He sent 10,000 masks and 40 protective gowns to Yale’s health clinic.

“It’s a business opportunity and a social responsibility,” said Henry Yin, Mr. Zhang’s assistant.

Last month, big restaurant chains like KFC, Wendy’s and Papa John’s asked the federal government for $145 billion in coronavirus relief funds.

These companies had been highly profitable in recent years. So where had all their money gone? Like much of corporate America, the restaurant chains had spent a large chunk on buying back their own stock, a practice aimed at bolstering its price, Emily Flitter and Peter Eavis report.

Few, if any, corporations could have been adequately prepared for this pandemic, and efforts to stem the spread of the coronavirus have hit certain industries particularly hard — especially restaurant companies that have been forced to close most of their locations.

Still, the crisis has exposed the potential failings of the shareholder-focused strategy embraced by many big companies. Shareholders, wanting stock prices to go higher, pushed management to use cash on buybacks and dividends. And senior executives, paid largely in stock and on the basis of how the stock performed, were happy to oblige.

The result was that companies often didn’t have much spare cash, leaving them more exposed to economic downturns.

Although the restaurant chains did not get an industrywide bailout, many individual outlets do qualify for relief funds. And other big companies that received bailouts — like American Airlines and Boeing — spent tens of billions of dollars on stock buybacks in recent years.

The United Automobile Workers union said on Thursday that it was opposed to companies restarting auto production next month, saying it was not yet safe for its members to return to work.

“At this point in time, the U.A.W. does not believe the scientific data is conclusive that it is safe to have our members back in the workplace,” the union’s president, Rory Gamble, said in a statement. “We have not done enough testing to really understand the threat our members face.”

The union, which represents more than 400,000 workers, is an influential voice in the labor movement and manufacturing industry.

Mr. Gamble said the union supported an extension of the stay-at-home order in effect in Michigan. That order, by Gov. Gretchen Whitmer, expires on April 30, but she has said that she expects an extension to be warranted.

General Motors, Ford Motor and Fiat Chrysler have been discussing with the union when and how to reopen plants.

The union’s statement comes as some nonunion automakers announced plans to resume production in Southern states that have not been hit as hard by the virus. In Michigan, about 3,000 people have died from the coronavirus, including more than two dozen U.A.W. members.

Earlier on Thursday, Toyota Motor said it was preparing to restart operations at its U.S. plants on May 4. Volkswagen has said it will begin phasing in production at its U.S. plant on May 3.

Amazon’s market share may be slipping as e-commerce surges.

Last week, 34 cents of every dollar Americans spent online went to Amazon, according to the market research firm Rakuten Intelligence. That’s impressive, but Amazon’s market share was even higher before the pandemic.

What gives? As discussed in today’s DealBook newsletter, it could be that online shoppers are buying more groceries, which isn’t Amazon’s strong suit despite its recent acquisition of Whole Foods, or are using other sites to avoid certain shortages and shipping delays. Ultimately, however, the numbers probably reflect that as the homebound turn to e-commerce, Amazon is capturing a slightly smaller piece of a much larger pie.

Prime Minister Shinzo Abe of Japan promised this month that every household in Japan would receive two masks. Now many masks are being recalled, according to two of the companies who produced them, in response to complaints about their quality and cleanliness.

The Japanese manufacturers Itochu and Kowa said on Thursday that they would collect all undistributed masks and examine them for problems after requests from the Ministry of Health, Labor and Welfare.

Days earlier, Japan’s health department said it had received nearly 2,000 complaints about the masks after workers began delivering 500,000 of them meant for use by pregnant women.

Mr. Abe’s mask-giveaway plan was in trouble from the moment he announced it on April 1. Some on social media called it “Abenomasks,” a play on the leader’s economic plan, known as “Abenomics.” Others posted illustrations of the country’s most beloved cartoon families fighting over the masks — or trying to wear them simultaneously.

When distribution began, the parody turned to anger as people posted photos of newly opened masks covered in filth, or freshly washed ones that had shrunk to the point of being unusable.

Both companies said in statements on Thursday that heavy demand had forced them to produce the masks outside Japan — a not-so-subtle hint that the problems were related to unreliable foreign manufacturers.

While Itochu referred vaguely to problems “overseas,” Kowa singled out China.

Demand for surgical masks has been especially high in Japan, where it has long been customary to wear them during flu season, and even companies that would not normally produce them have gotten into the business.

On Tuesday, after a flood of eager consumers crashed the website of the electronics manufacturer Sharp, the company said it would hold a lottery for its latest line of masks.

The Fed just lifted restrictions on monthly bank transfers.

Bank customers who want to easily make more than six monthly transfers from their savings account will now be able to do that, after the Federal Reserve announced that it will lift a regulatory limit.

“Financial disruptions arising in connection with the novel coronavirus situation have caused many depositors to have a more urgent need for access to their funds by remote means,” the central bank said.

The tweak alters a rule called “Regulation D,” which limited certain savings account transfers and withdrawals per statement cycle. The goal of the regulation was partly to help banks meet their reserve requirements, because they previously needed to hold central bank deposits against checking accounts but not against savings accounts. But the Fed ditched reserve requirements in March, rendering that rationale obsolete.

L Brands, the owner of Victoria’s Secret, has shot back at the private equity firm that has been trying to terminate its acquisition of the retail chain.

The effort on the part of the firm, Sycamore Partners, to end the deal because of the coronavirus outbreak is “invalid” and “pure gamesmanship” after it failed to renegotiate the price, L Brands said in a Delaware court filing on Thursday.

Sycamore said on Wednesday that L Brands had violated terms of its February transaction agreement and that a “material adverse effect” had occurred because of the pandemic, allowing it to terminate the deal to buy 55 percent of Victoria’s Secret for about $525 million.

L Brands said on Thursday that when the deal was negotiated, “the world was already well aware of the existence of Covid-19, and the parties agreed that Sycamore would bear the risk of any adverse impacts stemming from such a pandemic.” The definition of a “material adverse effect” explicitly excluded effects from pandemics, the company said.

Sycamore sent L Brands a letter on April 13 saying that it wanted to renegotiate the purchase price and other terms of the deal because of the coronavirus outbreak, according to L Brands. When the company declined to renegotiate — because the agreement “expressly allocates the risk of pandemics to Sycamore” — the private equity firm sent a termination notice and filed the subsequent lawsuit, according to the filing.

Catch up: Here’s what else is happening.

  • AT&T named John Stankey, a longtime telecommunications executive, as its new chief executive starting July 1. Randall Stephenson will step down from the role but will remain executive chairman of the board, the company said in a statement Friday.

  • The manufacturing sector was struggling even before the pandemic; now the near-shutdown of the economy has pushed it into free-fall. New orders for durable goods like cars and washing machines fell 14.4 percent in March, one of the biggest declines on record, the Census Bureau reported Friday. Orders for nondefense capital goods, a measure of business investment, fell 33.4 percent, mostly because of a huge drop in orders for aircraft including Boeing’s troubled 737 MAX jet.

  • Reckitt Benckiser, the maker of the disinfectants Lysol and Dettol issued a statement on Friday warning against the improper use of their products after President Trump theorized about the possible medical benefits of disinfectants in the fight against the virus.

    “As a global leader in health and hygiene products, we must be clear that under no circumstance should our disinfectant products be administered into the human body (through injection, ingestion or any other route),” the company said. The words “under no circumstance” were highlighted in bold.

  • The mood among German business managers is more pessimistic than ever. The Ifo Institute’s monthly survey of business sentiment, a reliable indicator of the direction of Europe’s largest economy, plunged to its lowest level ever, the research organization in Munich said on Friday.

  • The ratings agency Standard & Poor’s issued a more pessimistic view of about two dozen major European banks, meaning that the lenders face a higher risk of downgrades that would make it more expensive for them to raise money on capital markets. Among the banks now regarded by S&P as having a negative outlook are Deutsche Bank and Commerzbank in Germany; ING Group in the Netherlands; Barclays, Royal Bank of Scotland and Lloyds Bank in Britain; and BNP Paribas and Crédit Agricole in France.

  • Starting Friday, all 25,000 United Airlines flight attendants will be required to wear masks while on duty, the airline said. United is the first major U.S. airline to mandate masks. The union that represents flight attendants there and at more than a dozen other airlines separately asked the Transportation Department and Health and Human Services Department to mandate the same industrywide.

Reporting was contributed by Noam Scheiber, Liz Alderman, Alexandra Stevenson, Nicholas Kulish, David Gelles, Sapna Maheshwari, Neal E. Boudette, Mohammed Hadi, Livia Albeck-Ripka, Niraj Chokshi, Ben Dooley, Jack Ewing, Ben Casselman, Jeanna Smialek, Peter Eavis, Emily Flitter, Carlos Tejada, Kevin Granville and Daniel Victor.



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