Business

OMAHA, Neb. (AP) — The special board appointed by President Joe Biden to intervene in stalled railroad contract talks submitted its recommendations to the White House Tuesday on a potential deal covering 115,000 rail workers and avert a strike, but details of their recommendations weren’t immediately available.

Railroads and unions will use those recommendations as the basis for a new round of negotiations over the next month. If they still can’t agree on a new deal by mid September, federal law would allow a strike or lockout, but Congress is likely to intervene before then to keep the supply chain moving.

A railroad strike could devastate businesses that rely on Union Pacific, BNSF, Norfolk Southern, CSX and other major freight railroads to deliver raw materials and ship their products. That’s why Congress isn’t likely to allow a strike to happen. In past national rail labor disputes, lawmakers have voted to impose terms on the railroads before workers could strike.

A White House official said Biden is optimistic the report will provide a good framework for successful negotiations because avoiding a rail shutdown is in the nation’s interests.

The report was distributed to the parties Tuesday, but the railroads and the unions didn’t immediately comment on any details. It wasn’t immediately clear how quickly the National Mediation Board would post the report online.

The railroads entered the Presidential Emergency Board process a month ago far apart from the 12 unions taking part. The unions have been seeking a 31% raise over the five years of the deal while the railroads were offering only 17% in compounded raises. The unions also don’t want to see the cost of their health care coverage go up much in a new contract.

Railroad workers have gone without a raise since 2019 while the contract talks drug on. The workers expect to be compensated after staying on the job throughout the pandemic and enduring extensive job cuts in recent years. And strikes have become more common over the last two years in a variety of industries because unions generally feel empowered to ask for more.

The major freight railroads have eliminated nearly one-third of their jobs over the past six years as they overhauled their operations to run fewer, longer trains that need fewer locomotives and employees. Unions say the railroads expect more from the workers who remain, and that some railroads’ tightened attendance policies make it harder to take time off because of all the job cuts.

In addition to disagreements over wages and benefits, unions have staunchly opposed a proposal from the railroads to cut the number of workers in a locomotive from two to one. A new proposed federal rule that would require two-man crews in most instances should make it harder for railroads to reduce crew sizes, but the railroads have been pressing for the change for several years. The unions argue that keeping two people on the crews isn’t just about preserving jobs, but also safety.

Reaching a new agreement would likely make it easier for railroads to hire new employees, which they acknowledge they need to do to improve service and cut down on the delays that have plagued freight shipments this year. The major freight railroads have all said they want to hire hundreds more workers, but worker shortages are making that difficult.

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BEIJING (AP) — Unusually high temperatures and a prolonged drought are affecting large swaths of China, reducing crop yields and drinking water supplies.

The lack of rain has been especially marked in the southwestern megacity of Chongqing, which encompasses a large area of mountains and rivers.

State media on Tuesday reported fire trucks were delivering water to outlying villages for drinking and irrigating crops.

Rainfall in Chongqing has been half of what is usually expected for the year and some smaller waterways have dried up entirely.

Authorities have issued warnings of temperatures exceeding 40 Celsius (104 Fahrenheit). Many parts of China have broken records for high temperatures this year.

Amid the drought, other areas of China have been hit by flash floods, underscoring the effects of climate change on the vast nation of 1.4 billion people stretching from the mountains and deserts of Central Asia to the South China Sea.

The Chongqing drought has affected more than 600,000 people and 36,700 hectares (90,690 acres) of crops, the Xinhua News Agency reported.

Neighboring Hubei province has also been badly hit, with some areas reporting the growing season a complete failure, Xinhua said.

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Home Depot is seeing sustained demand for goods related to home improvement projects despite soaring prices and mortgage rates for homes.

Revenue for the three months ended July 31 rose 6.5% to $43.79 billion, which topped projections of $43.35 billion on Wall Street, according to a survey by Zacks Investment Research.

Sales at stores open at least a year, a key indicator of a retailer’s health, climbed 5.8%, and 5.4% in the U.S.

While the number of customer transactions fell 3%, the amount shoppers spent per transaction rose 9.1%.

The Atlanta company earned $5.17 billion, or $5.05 per share, which also topped per-share projections for $4.95. It was also better than last year’s strong second quarter, when the company posted earnings of $4.81 billion.

Profit and sales levels were unprecedented for Home Depot, according to CEO Ted Decker,

Home improvement stores have remained busy during the pandemic as people working from home took on new projects. The spring and summer is also a traditional busy season as home owners head out for flowers, vegetables and other gardening and landscaping goods.

Home Depot has continued to lure customers despite what may be a cooling of the housing market. Sales of previously occupied U.S. homes slowed for the fifth consecutive month in June as higher mortgage rates and rising prices kept many home hunters on the sidelines. Existing home sales fell 5.4% in June from May to a seasonally adjusted annual rate of 5.12 million, the National Association of Realtors said last month.

Average long-term U.S. mortgage rates soared last week in a continued volatile market as the key 30-year loan rate jumped back over 5%. Mortgage buyer Freddie Mac reported that the 30-year rate rose to 5.22% from 4.99% a week earlier. By contrast, the rate stood at 2.87% a year ago. The average rate on 15-year, fixed-rate mortgages, popular among those looking to refinance their homes, increased to 4.59% from 4.26%.

Home Depot Inc. maintained its fiscal 2022 forecast for mid-single digits earnings per share growth and total sales growth and comparable sales growth of about 3%.

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BERLIN (AP) — Germany’s main industry lobby group warned Tuesday that factories may have to throttle production or halt it completely because plunging water levels on the Rhine River are making it harder to transport cargo.

Water levels on the Rhine at Emmerich, near the Dutch border, dropped by a further four centimeters (1.6 inches) in 24 hours, hitting zero on the depth gauge.

Authorities say the shipping lane itself still has a depth of almost 200 centimeters (six feet, six inches), but the record low measurement Tuesday morning highlights the extreme lack of water caused by months of drought affecting much of Europe.

“The ongoing drought and the low water levels threaten the supply security of industry,” said Holger Loesch, deputy head of the business lobby group BDI.

Loesch said shifting cargo from river to train or transport was difficult because of limited rail capacity and a lack of drivers.

“It’s only a question of time before facilities in the chemical and steel industry have to be switched off, petroleum and construction materials won’t reach their destination, and high-capacity and heavy-goods transports can’t be carried out anymore,” he said, adding that this could lead to supply bottlenecks and short-time work might result.

Loesch warned that energy supplies could also be further strained as ships carrying coal and gasoline along the Rhine are affected.

He echoed concerns that climate change could make droughts more frequent in the future, and urged the government to help closely monitor water levels and react early to potential transportation problems on Germany’s waterways.

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Follow AP’s climate coverage at https://apnews.com/hub/climate-and-environment

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By Jonathan Stempel

(Reuters) -Berkshire Hathaway Inc, run by billionaire Warren Buffett, has tripled its stake in online banking company Ally Financial Inc and increased its bet that “Call of Duty” video game maker Activision Blizzard Inc will be acquired by Microsoft Corp.

In a Monday regulatory filing describing its U.S.-listed equity investments as of June 30, Berkshire also said it exited what was once an $8.3 billion investment in Verizon Communications Inc and no longer owns Royalty Pharma Plc, which buys drug royalties.

The filing does not specify whether Buffett or his portfolio managers Todd Combs and Ted Weschler made specific purchases and sales, but investors often try to mimic what Berkshire does. Larger investments are normally Buffett’s.

Berkshire slowed its stock buying spree in the second quarter as U.S. stock markets fell, purchasing $6.2 billion of stocks and selling $2.3 billion. It had bought $51.1 billion and sold $9.7 billion in the first quarter.

Nevertheless, Buffett’s conglomerate, which also owns dozens of businesses such as the BNSF railroad and Geico auto insurer, ended June with a $327.7 billion equity portfolio, led by $125.1 billion in Apple Inc.

It also invested more than $33 billion in two oil companies, Chevron Corp and Occidental Petroleum Corp, as oil prices surged following Russia’s invasion of Ukraine.

Berkshire has since purchased another $1.7 billion of Occidental stock, boosting its stake to 20.2%. It also owns $10 billion of Occidental preferred stock.

In the second quarter, Berkshire’s Ally stake grew to 30 million shares from about 9 million, while its Activision stake grew to 68.4 million shares, worth $5.3 billion, from 64.3 million.

The Activision investment is a form of arbitrage, where Buffett appears to be betting that investors are pessimistic that regulators will approve Microsoft’s proposed $68.7 billion takeover of the company.

According to Monday’s filing, Berkshire also increased its holdings during the second quarter in Apple, Celanese Corp, Chevron, Markel Corp, McKesson Corp, Occidental and Paramount Global.

It reduced its holdings in General Motors Co, Kroger Co, Store Capital Corp and US Bancorp, the filing shows.

(Reporting by Jonathan Stempel in New York, Editing by Franklin Paul and Josie Kao)

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NEW YORK (AP) — Walmart Inc. said Monday it has signed a deal with Paramount Global to offer the entertainment company’s streaming service as a perk to subscribers of the discounter’s shipping subscription service.

The move is part of efforts by the nation’s largest retailer to better compete with Amazon’s Prime membership program, which offers an array of perks.

Starting in September, subscribers to Walmart+ will be have access to the Paramount+ Essential Plan, which includes ads and offers original dramas such as “1883” and “Star Trek: Strange New Worlds,” along with the preschool franchise “PAW Patrol,” recent blockbuster films such as “Sonic the Hedgehog 2,” and live sports.

The cost of Walmart+ will remain $98 a year, or $12.95 a month, the retailer said. It includes free shipping on items and discounts on gasoline. An Amazon Prime membership costs $139 a year, or $14.99 a month, and includes the Amazon Video service, original programming and free gaming, among other perks.

Walmart, which is based in Bentonville, Arkansas, has never disclosed the number of members it has signed up but said on Monday that it has had monthly growth in membership since its launch in September 2020.

Terms of the deal with New York-based Paramount Global were not disclosed.

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(Reuters) – China’s Tencent Music Entertainment Group surpassed quarterly revenue estimates on Monday as a slate of original content and pandemic-driven lockdowns helped its Spotify-like music streaming platform attract more paying users.

The company’s U.S. shares rose 3% in extended trading after it said online music paying users jumped by a quarter to 82.7 million amid a lack of social events due to strict stay-at-home orders in China. Music subscription revenue rose 18%.

The company also benefited from a push for original content, including a partnership with Tencent Holdings to produce songs from popular game titles.

However, there were signs that stiff competition and an economic slowdown sparked by Beijing’s zero-COVID policy were weighing on Tencent Music’s business.

Revenue fell 20% in the social entertainment business – the company’s biggest revenue driver and home to its karaoke app WeSing and live concert platform Kuwo Music.

Tencent Music said it plans to prop up growth in the unit by adding features such as audio live streaming.

The company has been in the crosshairs of regulators and was last year forced to end its exclusive contracts with big music labels, eroding its advantage against rivals such as Cloud Music and Bytedance-owned short-video sharing platform Douyin.

Total revenue was 6.91 billion yuan ($1.02 billion) in the second quarter ended June 30, compared with the 6.62 billion yuan expected by analysts, according to Refinitiv IBES data.

Excluding items, the company earned 0.63 yuan per American depository share (ADS), above estimates of 0.56 yuan per ADS.

($1 = 6.7715 Chinese yuan renminbi)

(Reporting by Tiyashi Datta in Bengaluru; Editing by Aditya Soni)

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By Karl Plume

St. Louis, Missouri (Reuters) – Agricultural seeds and chemicals maker Bayer AG on Monday launched a digital farming platform that it says will help U.S. growers enact environmentally friendly practices and connect them with companies seeking more sustainable food, feed and biofuel ingredients.

The effort will help the seed and chemical giant diversify its revenue stream, capitalizing on a decade-long farm data collection effort.

Bayer’s ForGround platform will tap weather, soil, seed and farming practice data to make recommendations about how growers can boost soil health, cut emissions and reduce water use and chemical applications. Environmental outcomes would then be certified by a third-party verifier so that farmers can potentially sell their grain for a premium, Bayer said.

The program would also allow companies such as food makers and biofuel producers to create incentive programs for farmers to grow crops in a way that would help companies meet their environmental goals.

Bayer will charge companies a flat or per-acre fee for the services, and make money from farmers through seed and chemical sales and data-platform subscriptions. The launch initially targets U.S. agriculture but the company envisions broadening it to other countries, though no timetable is set yet, Bayer said.

The offering builds on Bayer’s Carbon Program which pays farms for pulling climate-warming carbon from the atmosphere and locking it in the soil.

It is among the latest initiatives by agriculture companies aiming to meet rising demand for sustainably produced food, and to profit off data collection through subscriptions for new technology.

“This is a challenge and a key benefit for agriculture. But it’s also a challenge and a benefit for companies that have made sustainability commitments around the world,” said Leo Bastos, head of global commercial ecosystems at Bayer CropScience.

The program taps Bayer’s strategy to use deep pools of agricultural and climate data to make farming more efficient and to verify and monetize environmental benefits.

ForGround requires that farmers enroll in Bayer’s Climate FieldView platform, where growers log data about agricultural practices such as no-till farming or planting cover crops.

(Reporting by Karl Plume in St. Louis; Editing by Marguerita Choy)

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By Svea Herbst-Bayliss and Krystal Hu

(Reuters) – Gaming equipment provider Inspired Entertainment has made a $370 million offer to acquire slot machine maker PlayAGS Inc, people familiar with the matter said on Friday. Inspired has offered $10 per share in cash to acquire PlayAGS, the sources said. PlayAGS shares had ended trading on Thursday at $6. They jumped on the news on Friday and closed up 25% at $7.52.

PlayAGS confirmed in a statement that it had received a proposal. It added that it did not accept it but remained in preliminary discussions about a potential deal. It cautioned that no transaction was certain.

Inspired Entertainment declined to comment. Las Vegas-based PlayAGS makes gaming tables and interactive solutions for gaming houses. Backed by private equity firm Apollo Global Management Inc, it went public in 2018. The casino gaming industry and its vendors have been hard hit by the COVID-19 pandemic, with PlayAGS now worth a fifth of what the market valued it at in 2019. However the company is on the mend as gaming activities and travel rebound, reporting $76.6 million in quarterly revenue this week, beating analyst estimates. Inspired Entertainment supplies gaming solutions, including virtual sports and mobile gaming, in casinos and bars in more than 35 jurisdictions, according to its website. It has a market value of close to $400 million. The New York-based firm reported a 72% jump in quarterly revenue to $71.3 million this week, as its business rebounds from pandemic lockdowns. On an analyst call on Wednesday, Inspired Entertainment Chief Financial Officer Stewart Baker said the firm was actively looking at a number of M&A activities. “We are certainly willing to use capital for M&A if it’s something that strategically fits with what we are trying to do. And there seem to be a lot of things around right now presenting themselves as possibilities,” said Baker.

(Reporting by Svea Herbst-Bayliss in Boston and Krystal Hu in New York; Additional reporting by Greg Roumeliotis in New York; Editing by David Holmes and Josie Kao)

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SHANGHAI (Reuters) – China’s top internet watchdog said on Friday tech giants such as Tencent Holdings and Alibaba Group have submitted details of algorithms used in some of their products, complying with a drive by authorities to tighten oversight of platform algorithms.

The rules are part of a broad regulatory crackdown by Beijing against its once free-wheeling technology sector. State media had accused internet platforms of using algorithms to invade user privacy and influencing their choices.

The Cyberspace Administration of China (CAC) published a list of 30 algorithms used in some of the country’s most popular apps, including Alibaba’s Taobao，Tencent’s Wechat，Meituan and ByteDance’s Douyin, with brief descriptions of their use and gave them classification numbers.

It was the first list it published since China in March passed new regulations for algorithm recommendation services and launched a filing system requiring firms to companies to disclose they used in their apps.

The CAC’s list, for instance, said the Taobao app had logged with it a recommendation algorithm that crunched each user’s visit and search history to recommend them products and services, while Meituan had provided details of the algorithm it used to estimate delivery times and match riders.

Other companies on the list included Chinese online search giant Baidu, short video platform Kuaishou and microblogging site Sina’s Weibo.

(Reporting by Josh Ye and Brenda Goh; editing by David Evans)

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