Cyclists photographed in Lisbon, Portugal, in October 2018.
Kamisoka | Istock Unreleased | Getty Images
Speed limits on highways should be cut by at least 10 kilometers per hour (6.2 mph) to help lower oil demand, the International Energy Agency said Friday.
The recommendation is part of a wider 10-point plan published by the Paris-based organization.
“We estimate that the full implementation of these measures in advanced economies alone can cut oil demand by 2.7 million barrels a day within the next four months, relative to current levels,” the IEA’s report said.
The 2.7 million figure equated to the oil demand of all cars in China, it added in a news release. Part or full adoption of the measures in emerging economies would amplify their effect, it also said.
The plan comes at a time when oil markets are facing significant uncertainty and volatility following Russia’s invasion of Ukraine in February.
Russia is a major supplier of oil and gas, but its actions in Ukraine have caused several economies to try and find ways to reduce their reliance on Russian hydrocarbons.
In a news conference broadcast via Zoom on Friday morning, the IEA’s executive director, Fatih Birol, described oil markets as being in an “emergency situation.” Birol added that things “may get worse” over the next few months.
Against this backdrop, the IEA’s other suggestions to reduce oil demand include:
- Working from home for as much as three days per week, when possible.
- Car-free Sundays for cities.
- Reducing the cost of public transport and encouraging people to walk and cycle.
- Avoiding air travel for business when other options are available.
- Traveling on high speed or night trains instead of flying when it’s practicable to do so.
- And reinforcing the uptake of electric and “more efficient” vehicles. The full list can be read here.
“Reducing oil use must not remain a temporary measure,” the IEA’s report said. “Sustained reductions are desirable in order not only to improve energy security but also to tackle climate change and reduce air pollution.”
It added that governments had “all the necessary tools at their disposal to put oil demand into decline in the coming years, which would support efforts to both strengthen energy security and achieve vital climate goals.”
A number of organizations are calling for a cut in fossil fuel use, but actually achieving such an aim is a gargantuan task. The vast majority of cars on our roads, for instance, still use gasoline or diesel, while energy companies continue to discover new oil and gas fields in a variety of locations around the world.
In a statement issued Friday, the IEA acknowledged that the majority of its proposals “would require changes in the behaviour of consumers, supported by government measures.”
“How and if these actions are implemented is subject to each country’s own circumstances – in terms of their energy markets, transport infrastructure, social and political dynamics and other aspects,” the IEA said.
Also commenting on the IEA’s plans was Barbara Pompili, the French minister for the ecological transition.
“France and all European countries must get out of their dependence on fossil fuels, in particular on Russian fossil fuels as soon as possible,” she said.
“It is an absolute necessity, for the climate but also for our energy sovereignty. The plan proposed today by the IEA offers some interesting ideas, some of which are in line with our own ideas to reduce our dependence on oil.”
The IEA’s report follows on from the publication of another 10-point plan centered around reducing Europe’s dependence on Russian natural gas.
Ford’s supply chain problems include blue oval badges for F-Series pickups
A Ford F-150 pickup truck is offered for sale at a dealership on September 6, 2018 in Chicago, Illinois.
Scott Olson | Getty Images
DETROIT – Recent supply chain problems for Ford Motor have included a small, yet important, part for the company and its vehicles – the blue oval badges that don nearly every vehicle for its namesake brand.
The Detroit automaker has experienced shortages with the Ford badges as well as the nameplates that specify the model, a Ford spokesman confirmed to CNBC. The Wall Street Journal first reported the problem, including badges for its F-Series pickups, on Friday, citing anonymous sources.
The issue is the latest is a yearslong supply chain crisis that has ranged from critical parts such as semiconductor chips and wire harnesses to raw materials and now, vehicle badges.
The Journal reported a Michigan-based supplier called Tribar Technologies that has made badges for Ford in the past had to limit operations in August, after disclosing to Michigan regulators it had discharged industrial chemicals into a local sewer system.
A message seeking comment from Tribar was not immediately answered. Ford declined to comment on whether Tribar’s limited operations were connected to the automaker’s name-badge shortage.
A spokesman also declined to comment on how many vehicles have been impacted by the problem.
The report comes after Ford on Monday said said parts shortages have affected roughly 40,000 to 45,000 vehicles, primarily high-margin trucks and SUVs, that haven’t been able to reach dealers. Ford also said at the time that it expects to book an extra $1 billion in unexpected supplier costs during the third quarter.
The announcement earlier this week, including a pre-release of some earnings expectations, caused Ford’s stock to have its worst day in more than 11 years.
Separately, Ford on Thursday announced plans to restructure its global supply chain to “support efficient and reliable sourcing of components, internal development of key technologies and capabilities, and world-class cost and quality execution.”
Bed Bath & Beyond’s merchandise problems will make it hard to pull off a turnaround this holiday season
A person exits a Bed Bath & Beyond store in New York City, June 29, 2022.
Andrew Kelly | Reuters
Bed Bath & Beyond is betting on a drastic change in strategy and well-recognized brands to revive its struggling business.
But the retailer’s strained relationships with suppliers of products such as air fryers and stand-mixers – some of which were missing from shelves two holiday seasons ago – could leave stores without hot items once again. Out-of-stock products could cripple Bed Bath’s already-declining sales and push the company toward bankruptcy.
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Bed Bath is fighting to win back customers as it contends with a leadership shakeup, a mountain of debt and the aftermath of a meme-stock frenzy fueled by activist investor Ryan Cohen. On top of that, tensions with merchandise suppliers grew as the company’s problems worsened, according to former executives who recently left the company. They declined to be named because they were not authorized to speak about internal discussions.
Chief Executive Mark Tritton, hired in 2019 to oversee the company’s previous turnaround effort, got ousted by the board this year. Bed Bath’s merchandising chief was also pushed out. Chief Financial Officer Gustavo Arnal, who was integral in lining up a new loan for Bed Bath, died by suicide earlier this month. The company is now led by an interim CEO and interim CFO.
On a call with investors in late August, two days before Arnal’s death, company leaders announced the fresh financing and revealed a new merchandising strategy that heavily relies on national brands to get more people into stores. Under Tritton, Bed Bath launched and tried to grow nine exclusive brands. Bed Bath now intends to sharply scale back those private labels – including discontinuing several.
Bed Bath has merchandise from its remaining store brands to fill shelves. It has deals with direct-to-consumer brands, such as mattress maker Casper, and is trying to court more of them. Yet to deliver on its new plan, Bed Bath must secure steady shipments from brands many shoppers recognize.
Bed Bath leaders say that the strategy shift has been well received. Interim CEO Sue Gove said in August that she’s even received thank you notes from vendors.
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“As previously shared, we are committed to delivering what our customers want, driving growth and profitability, and strengthening our financial position. We recognize the vital importance of our supplier partners and our team is working continuously with them, where support has been enthusiastic and high, particularly with our largest partners,” a company spokeswoman said in a statement.
“They want us to win, by supporting the assortment changes previously announced to create the best experience for our shared customers.” Bed Bath plans to give an update on its vendor relationships and strategies when it reports fiscal second quarter earnings next week, she added.
Over the past two years, however, Bed Bath has tested vendor relationships by making late payments, pushing aggressively into private labels and losing shoppers. Those tensions have intensified as financial troubles mounted, according to the former Bed Bath executives.
Make or break
A customer carries a shopping bag outside a Bed Bath & Beyond Inc. store in Charlotte, North Carolina.
Logan Cyrus | Bloomberg | Getty Images
Vendor relationships can make or break a retailer. Typically, suppliers ship goods and get reimbursed weeks or months later. The terms can change, however, if a retailer shows signs of financial distress – sometimes pushing a vendor to shorten the payment window, require cash on delivery or halt shipments.
Bed Bath has already agreed to tougher payment terms and advance payments for some suppliers, the company said in public filings. Company leaders acknowledged in a call with investors that it was managing vendor relationships on a week to week basis.
Tension with vendors is often a major reason retailers are pushed toward restructuring. Debt-burdened Toys “R” Us filed for bankruptcy in September 2017, and later liquidated, shortly after its suppliers demanded cash on delivery ahead of the holiday season. Other retailers, such as appliance chain H.H. Gregg and electronics store RadioShack, suffered a similar fate as they struggled to keep shelves stocked and burned through cash due to vendors’ tightened payment terms.
One factor working in Bed Bath’s favor is that it works with a vast number of vendors, and if needed, could replace one that wouldn’t ship to the retailer. Retailers like Toys “R” Us, as well as sporting goods chain Sports Authority – which liquidated as part of a bankruptcy filing in 2016 – were heavily reliant on very few suppliers to stock their shelves.
Bed Bath already had a significant debt load prior to the new financing. The retailer has a total of nearly $1.2 billion in unsecured notes – with maturity dates spread across 2024, 2034 and 2044 – which are all trading below par, a sign of its financial distress. In recent quarters, the company said it burned through significant amounts of cash. Despite this, it pressed ahead with an aggressive stock buyback plan that added up to more than $1 billion in repurchases.
The funding announced in August is expected to provide Bed Bath some breathing room and buy it some grace from vendors. But even before the company needed a loan, it lost standing with some of its suppliers, according to the former executives. Bed Bath has tussled with big-name vendors over terms of payment, and executives grew frustrated with smaller shipments of popular products, while seeing other retailers with more of that merchandise – and sometimes exclusive versions.
During the 2020 holidays, air fryers ran low across Bed Bath’s stores. KitchenAid stand mixers, a top item on Christmas lists and wedding registries, were out of stock. The few vacuums and hair styling tools from Dyson that arrived at stores quickly got shipped to online shoppers, leaving store displays bare. Yet at Amazon, Target and Best Buy, those same products were available – and in some cases, even at buzzy promotional prices.
KitchenAid parent company Whirlpool and Dyson didn’t respond to multiple requests for comment.
Customers carry bags from Bed Bath & Beyond store on April 10, 2013 in Los Angeles, California.
Kevork Djansezian | Getty Images News | Getty Images
Vendors and licensees, likewise, grew concerned by the pace of Bed Bath’s changes – particularly as the retailer launched its own brands of bedding, kitchen utensils and more. As some brands and manufacturers saw Bed Bath pare down orders quarter after quarter, they looked to other stores and websites.
The uneasy relationships exacerbated Bed Bath’s supply chain woes during the first two years of the pandemic, when all retailers coped with temporarily shuttered factories, congested ports and a shortage of truck drivers. The company lost $175 million in sales during the three months ended Feb. 26 as several items that were advertised in circulars were out of stock.
Vendors, which had limited supply, had to pick and choose where to send their hot products. As sales declined sharply at Bed Bath’s namesake stores, it had a harder time getting those items – such as Dyson’s hair styling tools or Keurig’s coffee makers– that were available at retail rivals, according to the former executives.
At company meetings, Bed Bath’s small shipments became a frequent theme – with merchandising leaders urging buyers to go to vendors and ask for more. There were also internal concerns that Bed Bath & Beyond was losing its clout and its relevance, the former executives said.
Bed Bath’s troubles have grown in recent months. Its stock has fallen about 50% this year, its market cap now at about $565 million.
About 60% of total net sales come from Bed Bath’s stores, but its footprint is shrinking. Last week, the company announced the first wave of approximately 150 store closures of its namesake brand. Including Harmon and BuyBuy Baby stores, the company went from nearly 1,500 stores at the end of the first quarter in 2020 to fewer than 1,000 stores at the end of the same period this year. As of February, Bed Bath had roughly 32,000 associates, including approximately 26,000 store associates and about 3,500 supply chain associates.
Meanwhile, the first wave of holiday merchandise has arrived at stores, including autumn wreaths, pumpkin-print kitchen towels and other fall-themed decor. Much of the merchandise at stores is from Bed Bath & Beyond’s private brands, such as budget-friendly home line Simply Essential.
During a CNBC visit in recent days, Bed Bath’s flagship store in New York City was full of clues that the retailer may not have enough of the hottest items. A Dyson display had six vacuum models – but only one type available for purchase. A display for French cookware company Le Creuset showed off Dutch ovens in many colors, but only had bright orange ones in stock.
Only one stainless-steel, step-on SimpleHuman garbage can, which retails for $149.99, was boxed and ready to be carried away. However, there were small plastic garbage cans from Bed Bath’s owned brand, spread across multiple rows – selling for $3 each.
If you are having suicidal thoughts, contact the Suicide & Crisis Lifeline at 988 for support and assistance from a trained counselor.
GM to close reservations for electric Hummer pickup, SUV after topping 90,000
Production is now set to begin at the former Detroit-Hamtramck assembly plant, less than two years after GM announced the massive $2.2 billion investment to fully renovate the facility to build a variety of all-electric trucks and SUVs.
Photo by Jeffrey Sauger for General Motors
DETROIT — General Motors will close reservations for its electric GMC Hummer pickup and the forthcoming GMC Hummer SUV after more than 90,000 of the vehicles were reserved, the company said Wednesday.
Closing the reservations is a way for the automaker to attempt to fulfill the current list of reserved vehicles, which extends out to at least 2024. The number of reservations is notable because of the starting prices of the vehicles, which range between roughly $85,000 and $111,000.
GM said it plans to close reservations for both vehicles starting Thursday. Anyone wanting to reserve one of the electric trucks must do so by the end of Wednesday.
GM has been slowly ramping up production of the Hummer EV pickup since earlier this year. As of the end of June, the company had sold less than 400 of the vehicles. The SUV version is expected to begin arriving to dealers and customers starting in early 2023.
The 2024 GMC Hummer EV SUV and 2022 GMC Hummer EV sport utility truck, or SUT.
Duncan Aldred, global head of GMC, said production of the SUV should happen more quickly than the pickup, which was the first consumer vehicle to feature GM’s next-generation Ultium batteries and vehicle platform.
“We knew it would be a slow ramp. But next year, when you look at the calendar year, I think you’ll see a normalized year,” he told CNBC last week at the Detroit auto show. “When we produce SUV, that should get into stride right away … Next year is a big year for Hummer EV, both truck and SUV.”
GM’s decision follows Ford Motor shutting down reservations for its electric F-150 Lightning pickup after hitting roughly 200,000 units. It also had shut down reservations for the electric Mustang Mach-E crossover, but they have since reopened.
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