Bloomberg

(Bloomberg) — President Joe Biden criticized Elon Musk’s acquisition of Twitter Inc., saying the social media platform was responsible for spewing lies. 

Biden made the remarks as an aside during a fundraiser in Chicago on Friday evening as he warned donors about the effect the Nov. 8 midterms would have on the coming years. 

“Now what are we all worried about? Elon Musk goes out and buys an outfit that sends and spews lies all across the world,” Biden said.

“There’s no editors anymore,” Biden added. “There’s no editors. How do we expect kids to be able to understand what is at stake?”

Musk, who styles himself as a champion of free-speech, acquired Twitter for $44 billion. He has removed most top executives and the board, and quickly embarked on a plan to lay off roughly half the company’s 7,500 employees.

His plans to revamp its content moderation though have rattled advertisers, including Pfizer Inc. and General Mills Inc., who say they will temporarily pause ad spending on the platform to see how Musk intends to change Twitter.

Civil rights groups are also stepping up pressure on advertisers to ensure Musk takes steps to keep the platform from being a host to hate speech or disinformation.

Musk acknowledged Friday that fears over content moderation on Twitter had caused a “massive drop in revenue” but said “nothing has changed with content moderation.”

White House Press Secretary Karine Jean-Pierre was asked Friday about the layoffs of content moderators.

“Look, the president has been outspoken about the importance of social media platforms continuing to take steps to reduce hate speech and misinformation,” Jean-Pierre told reporters abourd Air Force One. “That belief extends to Twitter. It extends to Facebook and any other social media platforms where users can spread misinformation.”

–With assistance from Jordan Fabian.

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(Bloomberg) — The lawyer who sued Twitter Inc. “pre-emptively” on the eve of mass layoffs by Elon Musk said she’s “pleased” to learn at least some employees will continue being paid until Jan. 4.

Attorney Shannon Liss-Riordan said Friday that the billionaire “is making an effort to comply” with the law, less than half a day after she accused the company in a class-action federal lawsuit of violating federal and California statutes restricting companies from mounting mass layoffs on short notice.

Liss-Riordan, who filed a similar lawsuit over June layoffs at Musk’s automaker Tesla Inc., said she “will be monitoring the situation” at Twitter to ensure employees receive appropriate notice and compensation. 

“I am pleased that Elon Musk learned something from the lawsuit we brought against him at Tesla,” she said in an email. “We filed this case preemptively to make sure a repeat of that violation did not happen.”

Twitter sent out letters on Friday to regulators in California outlining the layoffs. The Worker Adjustment and Retraining Notification Act, known as WARN, generally requires at least 60 days of advance notice for mass layoffs at large companies.

The company said it was cutting 93 jobs in Los Angeles, 784 in San Francisco and 106 in San Jose. The affected employees will be paid all wages and benefits they are entitled to through Jan. 4, the official termination date, the company said in the letters.

Liss-Riordan said she’d be looking into concerns about how the social media company chose which workers to terminate, and that the worker named as the lead plaintiff in Thursday night’s complaint appeared to have been targeted for retaliation when he was laid off Nov. 1. 

Employees have been told they will receive a severance agreement next week in which Twitter will ask them to waive any potential claims against it, she said.

The cost for failing to give notice under the WARN Act is limited to 60 days of pay and benefits, plus possible civil fines of as much as $500 per day for violations, said University of California at Berkeley law professor Catherine Fisk. 

“All this can be avoided if the employer gives notice before laying off,” Fisk said. But employers may make the calculation that they’re better off firing workers and paying the severance tab if they’re concerned about possible slacking, sabotage or theft of trade secrets by soon-to-be-former employees, Fisk said.

Tesla hasn’t responded to inquiries about the suit, which is still pending.

Twitter on Friday began notifying many employees affected by a far-reaching round of job cuts. Musk plans to get rid of half the workforce, making good on his pledge to slash costs at the platform he acquired for $44 billion last month, people with knowledge of the matter have said.

Liss-Riordan’s lawsuit asks the court to issue an order requiring Twitter to obey the WARN Act, and restricting the company from soliciting employees to sign documents that could give up their right to participate in litigation.

In Liss-Riordan’s Tesla case, the company won a ruling from a federal judge in Austin forcing the workers to pursue their claims in closed-door arbitration instead of in open court. Musk described the Tesla lawsuit as “trivial” during a discussion with Bloomberg Editor-In-Chief John Micklethwait at the Qatar Economic Forum in June.

Liss-Riordan, a veteran Boston-based labor law attorney, gained national prominence suing Uber Technologies Inc. and other gig-economy companies for allegedly exploiting their drivers. She ran unsuccessfully in September’s Democratic primary for Massachusetts attorney general.

At Twitter, “We’ll be watching the situation to make sure the employees are treated fairly and as the law requires,” Liss-Riordan said Friday. “Billionaires are not above the law.”

The case is Cornet v. Twitter Inc., 22-cv-06857, US District Court, Northern District of California (San Francisco).

–With assistance from Bob Van Voris.

(Updates with WARN notices sent)

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(Bloomberg) — Elon Musk’s broad-based cuts at Twitter Inc. are leading current and former employees to question whether the social network will have the resources to keep crucial systems like content moderation running effectively, including during the US midterm elections on Tuesday.

Musk on Thursday and Friday slashed over half the staff, affecting almost every team at the company. Product and engineering teams were gutted by well over 50%, according to two people with knowledge of the matter, and other groups — like communications, marketing, human rights and diversity — were almost completely eliminated. Those who were suddenly restricted from email and Slack were left frantically messaging in outside Signal and chat groups to understand who was still employed, said the people, who requested anonymity discussing non-public information.  “It’s like a fire,” said one former worker. “People are looking for survivors.” This person asked not to be identified for fear of retribution.

The dramatic scaling down of the company’s staff immediately drew scrutiny from Twitter insiders, outside groups and disinformation watchers, who say it’s unclear how Twitter will manage its sprawling network, which has an outsized impact on global political and cultural conversation, with far fewer people at the helm.

Twitter has historically been a major tool for following news during elections, as the first place information gets reported before it ends up on television or other social networks. Now, the site “has been massively disrupted,” becoming vulnerable to problems during high-traffic moments, or coordinated disinformation campaigns, said Dr. Kate Starbird, an associate professor at the University of Washington and co-founder of the Center for an Informed Public. “Some of the ways that that platform worked yesterday are not going to be the ways that they work today, tomorrow and going into the election on Tuesday.”

Twitter’s curation team, which wrote context for trending topics and worked with media groups to publish content that fact-checked major news events, has been dissolved, two people say. The legal policy team, which removes content based on government and legal requests and reviews law enforcement inquiries for user data, faced “massive cuts,” according to a person familiar with the matter.

The communications team at Twitter, responsible for engaging with journalists and putting out press releases, was cut from nearly 100 people to two, other people said. The partners team, which builds and maintains relationships with celebrity users, like athletes, actors and musicians, was almost completely eliminated.

Also fueling the tension over the lack of content controls is Musk’s plan to allow anyone to pay for a verification check mark on Twitter as soon as Monday, as part of a new initiative to drive revenue through subscriptions to Twitter Blue, its premium product.  If enacted as planned, it would mean anyone would be able to pay $8 to have their account look more legitimate, adding a risk they would impersonate candidates or government entities.

“The combination of massive layoffs, along with the end of verified users less than a week before the US election takes place, creates a combustible situation that could burst into flames at any point,“ said Melissa Ryan, chief executive officer of Card Strategies, a consulting firm that researches disinformation. “Bad actors have a new tool to spread disinformation, harm, and cause chaos, and Twitter now lacks the capacity and institutional memory to deal with the inevitable problems.”

Read more: How social media is helping midterm candidates spread the Big Lie

Beyond the election, if Twitter becomes more vulnerable to bad actors, the company’s bottom line could be affected. Already, some advertisers have paused spending or expressed concern about the period of uncertainty. Musk tweeted Friday morning that “Twitter has had a massive drop in revenue, due to activist groups pressuring advertisers, even though nothing has changed with content moderation and we did everything we could to appease the activists.”

Twitter’s marketing organization was among the groups hit hardest, with at most a couple dozen employees remaining from a team that had close to 400 people, according to two people. The ad sales organization was less impacted by the job cuts, people familiar with the matter said.

Still, one point of concern is that the senior level employees who would typically be called to help soothe advertiser concerns — people like head of sales Jean-Philippe Maheu or chief marketing officer Leslie Berland — were fired from the company earlier this week.Musk addressed the job cuts in a tweet late Friday. “Regarding Twitter’s reduction in force, unfortunately there is no choice when the company is losing” more than $4 million a day, he said in the post. “Everyone exited was offered 3 months of severance.”

Twitter’s US trust and safety team, which handles content moderation, was also impacted by layoffs, affecting 15% of staff, according to Yoel Roth, the head of safety and integrity at the company, who remains.

“With early voting underway in the US, our efforts on election integrity — including harmful misinformation that can suppress the vote and combatting state-backed information operations — remain a top priority,” he said on Twitter. “While we said goodbye to incredibly talented friends and colleagues yesterday, our core moderation capabilities remain in place.”

Earlier this week Bloomberg reported that many of the tools that team uses to enforce its content moderation policies had been frozen, and those tools were still unavailable for most people as of Friday. Musk previously told civil rights leaders that internal moderators would have access back by the end of the week. Roth said access will be restored “in the coming days.”

Globally, the trust and safety team was decimated, including in Ireland, the company’s main outpost for monitoring the rest of the world, according to another person. “The entire Human Rights team has been cut from the company,” Shannon Raj Singh, the counsel for that team, said on Twitter, adding that she was proud of her team for helping protect users during conflicts in Ukraine, Ethiopia and elsewhere.

–With assistance from Margi Murphy.

(Updates with Musk tweet in 12th paragraph)

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(Bloomberg) — Several big-name Twitter advertisers are monitoring Elon Musk’s changes to the service, watching and weighing whether to stay on the platform even as United Airlines Holdings Inc. joined a spate of high-profile marketer defections.

Microsoft Corp., Verizon Communications Inc. and Charter Communications Inc. are among the companies taking a wait-and-see approach, and have not made a decision about their Twitter advertising, according to people familiar with the matter, who asked not to be identified discussing private information. The companies declined to comment.

United Airlines suspended its advertising on Twitter earlier this week, spokeswoman Leslie Scott said Friday without commenting further. Southwest Airlines Co. isn’t making any immediate changes to its Twitter advertising but will continue to closely monitor the situation, a spokeswoman said, while American Airlines Group Inc. and Delta Air Lines Inc. didn’t immediately respond to a request for comment.

HBO, one of Twitter’s largest advertisers according to research firm Pathmatics, is also evaluating its spending. An HBO spokesperson said the network “will be assessing the platform under its new leadership” and has yet to “determine appropriate next steps.”

Illumina Inc., which makes DNA-sequencing machines, said it’s “constantly evaluating how and where we advertise – and that includes watching what happens with Twitter very closely.” Omnicom Group Inc., one of the world’s largest advertising firms, said it’s “in close contact with Twitter as we assess the impact of new ownership and potential changes in their strategy.”

Companies are under increasing pressure to make a decision on whether to keep spending on Twitter after Musk took over the company last week and ushered in sweeping changes, including laying off about half of its workforce. While Musk has pledged not to let Twitter become a cesspool of toxic content, he himself posted and deleted a tweet linking to an unfounded conspiracy theory shortly after the deal closed.

United joins Pfizer Inc., General Mills Inc. and Volkswagen AG among the brands that have already paused their advertising on the social media site. Musk tweeted on Friday that the company had experienced a “massive drop” in revenue as advertisers withdrew.

Advertising agencies, which direct large amounts of spending, are currently divided over whether to advise their clients to pause their spending on Twitter, according to a person familiar with the matter.

In a call this week, Musk assured ad executives that he would not reduce brand safety measures and even planned to enhance them, the person said. But some ad buyers are wondering how Musk can fulfill his promises of brand safety while also loosening controls around content – a move that could potentially allow more hate speech to spread on the platform.

On Friday evening, Musk tweeted apparent reassurances for skittish advertisers: “Twitter’s strong commitment to content moderation remains absolutely unchanged,” he wrote. He also threatened to publicly call out companies that abandoned the service, vowing “a thermonuclear name & shame is exactly what will happen if this continues.” 

–With assistance from Dina Bass, Scott Moritz, Angelica Peebles and Mary Schlangenstein.

(Updates with United Airlines in first and third paragraphs)

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(Bloomberg) — Wells Fargo & Co. has hired Brian Gudofsky from Credit Suisse Group AG to run technology, media and telecommunications investment banking, according to people familiar with the matter. 

Gudofsky, a financial technology dealmaker, spent more than 23 years at Credit Suisse, where he was most recently head of global technology, according to his LinkedIn profile.

David Wah, Credit Suisse’s global head of banking, will pick up Gudofsky’s coverage area, said some of the people, who asked not to be identified because the information isn’t public.

A spokesperson for Wells Fargo confirmed that Gudofsky had been hired, declining to comment further. A representative for Credit Suisse declined to comment.

The move comes as Credit Suisse — reeling from scandals and losses — announced a major restructuring last week. The Zurich-based lender, which has been losing senior talent for months, plans to spin out its capital markets, advisory, and leveraged finance teams into a revived US-focused First Boston entity, while cutting back some riskier businesses.

Wells Fargo has been seeking to build a bigger presence on Wall Street under Chief Executive Officer Charlie Scharf. The San Francisco-based bank announced in April that it hired Tim O’Hara as head of banking. O’Hara spent almost three decades at Credit Suisse before a stint at BlackRock Inc.

Gudofsky will be based in New York and report to Scott Warrender, head of coverage for Wells Fargo. 

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(Bloomberg) — Elon Musk’s ownership of Twitter Inc. and mass layoffs at the company stand to bring major setbacks for diversity and inclusion at the social-media platform. 

In his first week as owner, the billionaire fired Chief Executive Officer Parag Agrawal, who had been a supporter of Twitter’s employee resource groups, and rolled back a “work from anywhere” policy that opened the company up to more diverse areas of the country. Chief People and Diversity Officer Dalana Brand tweeted this week that she resigned the day Musk took over.

The firings of about half of the staff on Friday also may hit hard: The leaders of several of Twitter’s diversity-focused groups were part of the job cuts, according to people familiar with the matter.

While the full effects of the layoffs are unclear — Twitter didn’t respond to a request for comment on its diversity and inclusion efforts as the situation was unfolding — employees took to the platform on Friday to share that they lost jobs. Shannon Raj Singh, who had worked as human rights counsel, said the entire human rights team had been cut. One manager said his engineering team for accessibility experience, which works on features to improve the platform’s use for people with disabilities, was also eliminated.  Read about how Twitter’s cuts are sparking concern about the US midterms and human rights

Twitter posted significant gains in the number of Black and Latinx workers in 2021, in part because of its remote-work flexibility. The company’s employee resource groups, such as Twitter Women and Blackbirds, which represents Black workers, were so important to diversity efforts that Agrawal remained a sponsor of the parent-focused group even after he succeeded Jack Dorsey as CEO.

A diverse workforce is particularly critical for a social-media platform that’s been criticized for fostering hate speech and failing to do enough to combat bullying of key user groups, including women and the LGBTQ+ community. Diversity advocates have quickly called foul on Twitter’s new direction, with racist slurs and memes swelling after Musk’s purchase, and companies such as Volkswagen AG’s Audi, Pfizer Inc. and General Mills Inc. have said they are temporarily pausing advertising on the network. Musk said Friday that Twitter has seen a large drop in revenue as advertisers pull back.

The #StopToxicTwitter coalition — made up of more than 60 civil rights groups including the Anti-Defamation League and Accountable Tech — held a call with media on Friday in which they discussed their escalation of calls to Twitter advertisers that they stop ad buys on the platform in the wake of the sweeping layoffs.

“We are witnessing the real time destruction of one of the world’s most powerful communication systems,” said Jessica J. González, co-CEO of Free Press, one of the advocacy groups in the coalition. She said the groups were escalating their campaign in response to Musk’s failure to uphold his commitment to take the measures that would prevent Twitter from becoming a superspreader of racism and misinformation. 

Rashad Robinson, president of Color of Change, an influential racial-justice group, criticized Musk for the layoffs involving ERGs. Such groups were “critical,” Robinson said on the call, “not just for the employees, but for the communities they are connected to.” Musk has been dogged by a spotty track record for diversity at his electric-vehicle company Tesla Inc., which has only three named executive officers, all of them White men. The company has faced numerous lawsuits on behalf of Black workers at its Fremont, California, auto plant. 

In February, the state of California itself sued the company for race discrimination and harassment, saying that Black workers were “subjected to racial slurs and discriminated against in job assignments, discipline, pay, and promotion, among other violations” and noted that Black employees remain severely underrepresented in the ranks of executives, senior officials, and managers at Tesla. Valerie Workman, once Tesla’s most prominent Black executive, left in January. 

At Twitter, Musk has assembled a transition team of close confidants to help identify deep cost cuts and quick ways to jump-start revenue. The global workforce reductions are expected to affect 3,700 jobs. Some outgoing staff said they will be paid at least two months of severance. 

“As a general rule, layoffs typically disenfranchise people in protected categories: age, race, gender, disability, pregnancy and people who have complained about discrimination in the past,” said Bernard Alexander, an employment lawyer in Los Angeles who represented a worker in a case against Tesla.

Beyond layoffs, Musk’s policy of requiring Twitter employees to be in the office also may hurt underrepresented groups. An analysis by LinkedIn this week showed that Black, Hispanic and female job applicants make up a greater share of jobseekers for roles that can be done remotely compared with their White and male counterparts. And surveys have shown Black employees who work remotely are more likely to say they are valued and treated fairly. 

Angelo Carusone, the president of advocacy group Media Matters, said on the #StopToxicTwitter call that he was particularly concerned about Musk’s interest in unraveling Twitter’s policy against deadnaming trans individuals. He said Musk’s laughing emoji response to a news article warning how Twitter was going to become a more hateful platform for LGBTQ people was an “illustration and a reinforcement” of Musk’s inability to execute on “even the modest content policies that are currently in place.”

Leaders of the advocacy groups said Musk’s recent actions betrayed his seeming attentiveness during their call with the new Twitter owner on Tuesday. During that call, said Free Press co-CEO González, Musk promised that employees who were frozen out of Twitter’s content moderation dashboard would have access to those tools by Friday. Instead, she said, a noteworthy number of those workers — about 15%, according to a recent tweet by Yoel Roth, Twitter’s head of safety and integrity — had been fired from their jobs.

–With assistance from Dana Hull, Kurt Wagner and Mark Milian.

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(Bloomberg) — The Group of Seven said it would hold Russia accountable for “war crimes” after recent attacks on Ukrainian energy and water facilities. Foreign ministers of the leading industrial nations slammed the Kremlin’s “irresponsible nuclear rhetoric” in a statement released after a two-day foreign ministers meeting in Muenster, Germany. 

The White House announced $400 million in security assistance for Ukraine, including refurbished Soviet-era tanks and air defense missiles. The Netherlands will supply €120 million ($118 million) in aid including €45 million for tanks. 

Chinese President Xi Jinping told German Chancellor Olaf Scholz he opposed the use of nuclear weapons in Europe, in his most direct remarks yet on the need to keep Russia’s war in Ukraine from escalating. 

(See RSAN on the Bloomberg Terminal for the Russian Sanctions Dashboard.)

Key Developments

• Xi Tells Scholz China Opposes Nuclear Force in Message to Putin
• Superyacht Seized in Spain as Sanctioned Owner Stops Fees
• US Announces $400 Million in Tanks and Missiles for Ukraine 
• Ukraine Seeks IT Investment at Web Summit as War Rages Back Home
• The Latest Russia Oil Mystery: Vostok Sale Announced Then Denied
• US National Security Advisor Visits Kyiv in Show of Support

On the Ground

Ukrainian forces shot down eight Shahed drones and two Kalibr missiles during past 24 hours, Zelenskiy said Friday. The heaviest fighting occurred in Donbas, near Bakhmut and Soledar.

(All times CET)

Ukrainian Lines Holding in Donetsk, Zelenskiy Says (10:30 p.m.) 

Fierce fighting took place this week in the Donetsk region towns of Bakhmut and Soledar and remain the most tense area of the front line, Ukrainian President Volodymyr Zelenskiy said in his nightly address on Friday. “We hold our positions.” 

Zelenskiy said that Russia has concealed its war losses from its people, and also lies to some foreign leaders “about its alleged readiness for negotiations.” 

“When someone thinks about negotiations, he is not trying to deceive everyone around while sending thousands to death,” the president added said. 

One Crop Vessel Left Ukraine Friday, Several Inbound Ships Cleared (8:22 p.m.)

One vessel carrying sunflower oil left the Ukrainian port of Chornomorsk on Friday for Romania under the Black Sea Grain Initiative, the Joint Coordination Centre said in a notice. 

Currently, there are only two vessels under the Initiative at the Ukrainian ports. On board inspections were concluded on seven inbound vessels, all of which were cleared to sail to Ukrainian ports.

Putin Allows Russian Co. to Buy Baker Hughes Assets (5:27 p.m.)

Russia’s President Vladimir Putin signed a decree allowing Russian company Oilfield Services Technologies LLC to buy Baker Hughes assets in the country, according to a decree published on Russia’s legal database on Friday.

Read more: Putin Allows Russian Co. to Buy Baker Hughes Assets 

US Announces $400 Million in New Security Assistance (5:06 p.m.)

The Biden administration announced $400 million in new security assistance for Ukraine, including refurbished Soviet-era T-72 tanks and the HAWK air-defense missiles that Ukraine has been seeking. The package also includes more of the “Phoenix Ghost” drones that have been effective against Russian forces in the east.

The US and the Netherlands will split the cost of refurbishing 90 tanks in the Czech Republic, a Defense Department spokeswoman said. Some tanks will arrive before the end of the year.

The Netherlands said the total value of its package would be €120m, of which €45m will be used for the T-72 tanks.

Read more: US Announces $400 Million in New Security Assistance for Ukraine

Russia Seeks Sanctions Relief for Agriculture Bank: Reuters (3:44 p.m.)

Russia wants Western countries to ease curbs on state-owned agriculture lender Rosselkhozbank and clear the way for Russian grain exports, according to a Reuters report citing people it didn’t identify. 

Moscow hasn’t publicly detailed its demands beyond calling on European nations to release Russian fertilizer stuck in ports and warehouses, and allowing it to resume exports of ammonia. 

Slovak Premier Seeks Export Analysis on Russia Component Report (3:08 p.m.)

Slovakia’s premier said he’d ordered the government to analyze reports that his country had exported components to Russia that could be used for military purposes after the invasion of Ukraine started. 

Read more: Slovak Premier Seeks Export Analysis on Russia Component Report 

G-7 Creates ‘Mechanism’ to Defend Ukraine’s Key Infrastructure (2:30 p.m.)

The Group of Seven nations has agreed to coordinate assistance in repairing, restoring and protecting Ukraine’s energy and water facilities, which have been under a month of attacks from Kremlin troops. 

In the statement following their meeting in Germany, the G-7 foreign ministers said they have established a “coordination mechanism to help Ukraine repair, restore and defend its critical energy and water infrastructure.” 

Strengthening Ukraine’s “civilian resilience” will be a focus of an international conference in Paris planned for Dec. 13, they said, adding that the group “will stand firmly with Ukraine for as long as it takes.” 

G-7 Vows to Hold Russia Accountable for ‘War Crimes’ (2 p.m.)

The Group of Seven condemned Russia’s recent move to “terrorize” Ukraine’s civilian population with ongoing, “indiscriminate” attacks against energy and water facilities that have left much of the nation in the dark. 

Those strikes “constitute war crimes, and we reiterate our determination to ensure full accountability for these and crimes against humanity,” G-7 foreign ministers said in a statement following their meeting in Muenster, Germany. 

The statement also condemned “irresponsible nuclear rhetoric” by the Kremlin. “Any use of chemical, biological, or nuclear weapons by Russia would be met with severe consequences,” the G-7 said, without laying out specific steps. The group reiterated a call to Belarus “to stop enabling Russia’s war” and said the Belarusian regime risks “overwhelming additional costs.” 

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(Bloomberg) — Renault SA is aiming for a roughly €10 billion ($10 billion) valuation for the electric-vehicle business the French carmaker is carving out as a standalone entity, according to a person familiar with the matter.

The company is preparing the EV and software entity for a potential initial public offering on the Euronext Paris exchange sometime next year, said the person, who asked not to be identified because the information is private and plans could still change. 

The carveout of the entity, dubbed Ampere, is part of an overhaul that Chief Executive Officer Luca de Meo will present to investors next week. The split of the EV business from Renault’s traditional combustion-engine operations comes as the maker of Zoe and Clio cars seeks to navigate a difficult transition to electric vehicles as a possible recession looms in Europe.

Renault will brief investors about its revamp plans, which are still being finalized, during a capital markets day on Nov. 8. A spokesperson declined to comment.

Ampere’s carveout has been at the heart of talks between Renault and Japanese partner Nissan Motor Co. as the two companies seek to reshape a two-decade-old alliance. Nissan may invest $500 million to $750 million for a stake of about 15% in Ampere but the agreement hinges on a wider deal that would see Renault lower its own 43% stake in Nissan to about 15% over time to rebalance the alliance, people familiar with the situation have said. 

Higher Value?

The talks are ongoing and valuation of Ampere has been among sticking points in the Nissan discussions, which have also hit snags over intellectual property concerns. Renault is currently worth 9 billion euros and it may be tricky for the carmaker to obtain a valuation for Ampere that’s higher than its own market capitalization.

The IPO would be subject to market conditions, the person familiar with the situation said. Recent turbulence in share prices has put a damper on new offerings.

De Meo also will be giving details next week on Renault’s legacy combustion-engine business, dubbed Horse, which also is being carved out. Renault may announce a deal with China’s Zheijiang Geely Holding Group for 50%-50% ownership of Horse until other investors make further investments, two people familiar with the talks said.

Ampere will be based in France and employ about 10,000 people. The Horse entity with Geely would be based outside of France and also have a staff of about 10,000. 

The French government, which owns 15% of Renault, has been briefed in detail about the plans, one person said.

The separation of the two businesses is likely to lead to “a better capital allocation and eventually to improved shareholder returns,” Stifel analyst Pierre-Yves Quemener wrote in a note this month. 

–With assistance from Reed Stevenson.

(Updates with background on Ampere)

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(Bloomberg) — As automakers call on the US government to rethink a plan to limit tax credits for electric vehicles, they’re facing opposition from an unexpected source: their own suppliers.

Car giants such as Ford Motor Co. and Toyota Motor Corp. say the government should loosen the terms of the $430 billion Inflation Reduction Act to allow manufacturers to source EV components from more places. Under the recently passed legislation, consumer tax credits the auto industry says are critical to widespread adoption wouldn’t be allowed for EVs whose batteries contain material from a so-called “foreign entity of concern” beginning in 2024.

The automakers’ stance clashes with that of US mining companies supplying raw materials to the industry, who say the act is right to push manufacturers toward domestic producers.

The rift, which spilled out into the open as the US Internal Revenue Service solicited public input on the EV tax credit provisions in the new law, underscores the divergent agendas of companies across the supply chain on a hotly debated topic. EV adoption has surged in recent years in part because of consumer incentives that bring down sticker prices still running well above those of gas-fueled models.

Related: Carmakers Blitz Congress to Fix EV Tax Credit They Can’t Use

In comments to the IRS released late Thursday, Ford urged the US to exempt domestic suppliers from the foreign entity restrictions, regardless of ownership, and to also allow most non-US companies as long as 50% or less of their ownership doesn’t meet the foreign entity of concern definition.

“An overly expansive interpretation of this provision risks undermining” the law’s objectives by making the vehicle credits “largely unavailable,” the company said. Ford said the industry needs flexibility so that unintended traces of critical minerals from foreign entities of concern don’t disqualify consumers from getting a tax credit.

Similarly, the Alliance for Automotive Innovation, which lobbies for carmakers including Ford, urged the IRS to “fully contemplate the complexity and structure of the battery supply chain” when finalizing rules. The group called for “flexible” guidance.

American Allies

Toyota, meanwhile, said guidelines on manufacturing and sourcing should be spelled out — and that Japan should be explicitly included among the sources eligible for tax credits.

“America’s allies, most notably Japan, are at the core of America’s strategy to address vulnerabilities in critical supply chains,” the company said in a letter Friday to the US government.

Domestic producers of the critical materials needed to power EVs, like nickel, lithium and copper, want a stricter interpretation of where automakers can buy from, since compelling companies to purchase US-produced minerals supports the domestic supply chain. President Joe Biden has argued that the US needs to bolster its domestic production and supply chains because much of the key materials needed for EVs and the energy transition is dominated by China.

See also: Biggest US Copper Mine Stalled Over Sacred Ground Dispute

“The US cannot afford to outsource extraction and processing of hardrock minerals to foreign rivals,” the National Mining Association trade group said in its comments on the law. “China is home to more than 75% of the world’s battery manufacturing capacity, and that dominance is built upon unrivaled control of mineral supply chains.”

The industry has argued that this is why the language was explicitly written into the IRA: All raw materials should be made within US borders. Doing so would help US mining companies secure critical financing to grow their projects and become viable commercial-scale companies to supply automakers.

Legal Loopholes

By expanding the definition of domestic material, US mining companies argue, it would allow loopholes for car companies to source key parts that have, say, nickel from Russia or rare earths from China.

“To allow non-US raw material to be included would create outcomes that were clearly not intended by Congress,” according to comments from MiningMinnesota, which represents companies in the state.

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(Bloomberg) — Apple Inc. is building an advertising network for live television as part of its deal to stream Major League Soccer games next year, according to people with knowledge of the matter. 

The company is holding discussions with advertising partners and MLS sponsors in advance of the launch next February about airing advertisements during soccer games and related shows, said the people, who asked not to be identified because the discussions are private.

The move is part of a more aggressive push by Apple into advertising. The company’s ad unit generates about $4 billion in revenue annually, but is seeking to increase that to double-digit billions of dollars, Bloomberg News has reported. That includes putting search advertisements in more apps, such as its maps service, as early as next year.

The tech giant recently struck a 10-year deal to air MLS games in a new subscription service, as well as Apple TV+ streaming platform. The company will also stream a portion of games for free to users of the Apple TV app. 

Apple is planning to run advertising in all three tiers of the partnership: the dedicated package, paid TV+ subscriptions and the free TV app. The move represents an expansion of the company’s early live TV advertising, which is included in Major League Baseball games that already air on TV+.

Apple declined to comment.

Read more: Apple’s advertising push and future plans

Apple sees the revenue from advertising on MLS games, in addition to subscription fees, as key to generating money from the MLS deal. The contract has been estimated to cost $250 million per season, or $2.5 billion over the next decade. 

Todd Teresi, Apple’s vice president of advertising platforms, is leading the expansion into MLS ads. He recently oversaw the addition of more advertising slots to the App Store, including one on the front page of the outlet.

It’s a contentious move for Apple, both because it once prided itself on avoiding ad overload and because its recent privacy changes have undercut the marketing efforts of social-media businesses. The company has said its own push into ads is unrelated.

The Cupertino, California-based company also is exploring bringing ads to additional apps and services. Apple has other apps with App Store-like storefronts, including its podcasts and books offerings. The company also could introduce an ad-supported version of TV+, following in the footsteps of Netflix Inc. and Walt Disney Co.

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