Category World News

General Motors will take a $1.6bn hit in the third quarter as it reshapes its electric vehicle strategy following the scrapping of a key federal incentive that is likely to dampen demand.

The carmaker, based in Detroit, Michigan in the US, announced the news on Tuesday.

The company’s disclosure is one of the clearest indications yet that United States automakers are scrambling to adapt their production plans in response to slowing demand for electric vehicles (EVs).

The EV market also faces fresh strain after the administration of US President Donald Trump scrapped a $7,500 federal tax credit for electric vehicles, a key industry support, with auto executives warning of a sharp near-term drop in battery-car sales before an eventual rebound.

In a filing, GM said it expects “the adoption rate of EVs to slow” following recent policy changes, including the termination of certain consumer tax incentives and reduced emissions-rule stringency.

“The charge is a special item driven by our expectation that EV volumes will be lower than planned because of market conditions and the changed regulatory and policy environment,” GM told the  Reuters news agency in a statement.

Carmakers are also working to cushion the impact of Trump’s tariffs, which forced GM to take a $1.1bn hit in the previous quarter.

The company has estimated a bottom-line impact of $4bn to $5bn this year from trade headwinds and said it could take steps to offset at least 30 percent of the blow.

“The charge doesn’t come as a surprise given recent market developments and the fact GM had made probably the most aggressive EV push of any traditional automaker,” said Garrett Nelson, a senior equity analyst at CFRA Research.

“We think the automakers who chose to invest more heavily in hybrid vehicle development, such as Toyota and Honda, are poised to benefit in the US auto market.”

More charges

Both GM and crosstown rival Ford had launched a programme that would have allowed dealers to offer a $7,500 tax credit on EV leases after the federal subsidy expired, before walking back on those plans.

The carmaker warned of possible further charges as it reassesses capacity and manufacturing footprint.

The changes will, however, not affect GM’s current portfolio of its Chevrolet, GMC and Cadillac EVs that are in production.

Charges include a $1.2bn non-cash impairment tied to EV capacity adjustments and $400m for contract cancellation fees and commercial settlements.

GM said the charges will be recorded as adjustments to non-GAAP results for the third quarter, scheduled for early next week.

A federal judge in the United States has ruled that the administration of President Donald Trump has violated a previous court order by implementing a nearly identical policy that again made state cooperation with federal immigration enforcement a condition for receiving grants from the Federal Emergency Management Agency (FEMA).

On Tuesday, District Judge William Smith in Providence, Rhode Island, wrote that the Department of Homeland Security had done precisely what his September 24 ruling forbade when it imposed new immigration-related conditions that states must accept before they may obtain emergency preparedness grants from FEMA.

In his earlier ruling, the judge had struck down conditions the department originally had imposed on grant awards.

At the time, 20 Democratic-led states and the District of Columbia had argued the restrictions were designed to coerce them into adhering to the Republican president’s hardline immigration crackdown.

After Smith’s initial ruling, the administration issued new grant award documents to the states with nearly identical immigration enforcement conditions but with a clause saying they would only become effective if Smith’s ruling was stayed or overturned.

Smith said the “fig leaf conditional nature of the requirement makes little difference” as the administration was again unlawfully forcing the states to agree to assist in federal immigration enforcement or else forgo millions of dollars in funding.

“Defendants’ new condition is not a good faith effort to comply with the order; it is a ham-handed attempt to bully the states into making promises they have no obligation to make at the risk of losing critical disaster and other funding already appropriated by Congress,” Smith wrote.

The judge, an appointee of former Republican President George W Bush, blocked the new conditions from being enforced and required the administration to amend the grant award documents by next week.

The Department of Homeland Security did not immediately respond to requests for comment.

The administration had argued it had complied with Smith’s earlier decision and had merely been seeking to preserve its ability to enforce the immigration-related conditions in the event his ruling was later overturned.

France’s embattled prime minister says he backs suspending a pension reform until after the 2027 presidential election in a bid to end the political turmoil that has gripped the country for months.

Prime Minister Sebastien Lecornu, 39, announced on Tuesday that he supports pausing an unpopular reform that raised the age of retirement from 62 to 64 in the hopes of securing enough votes to survive two no-confidence votes.

“I will propose to parliament this autumn that we suspend the 2023 pension reform until the presidential election. There will be no increase in the retirement age from now until January 2028,” he promised lawmakers during his policy speech, responding to a key request from the Socialists, a swing group in parliament crucial to his cabinet’s survival.

President Emmanuel Macron signed into law the bill to raise the retirement age, a signature economic reform that became the biggest domestic challenge of Macron’s second mandate as he faced widespread popular opposition to the changes and also sliding personal popularity.

Hundreds of thousands protested against the change in 2023 in towns and cities across the country.

Lecornu has faced an uphill battle since being appointed prime minister in early September. At the time of his appointment, he was the fifth prime minister in less than two years and faced deep political divides and a high debt load.

He ultimately stepped down from the post in early October, further deepening the country’s long-running political crisis. Macron then reappointed Lecornu as prime minister last week.

Lecornu faces two no-confidence motions by the hard-left France Unbowed and far-right National Rally parties. The two parties do not hold enough seats to topple Lecornu’s government on their own, but the prime minister could be ousted if the Socialist Party were to join forces with them.

The leader of the Socialists in the National Assembly said the decision to suspend the pension reform was a victory for the left.

Boris Vallaud did not explicitly say if his party would vote against the two motions of no confidence this week, but he said he believed in parliamentary debate and he would be ensuring the prime minister’s pledges be turned into actions.

Cyrielle Chatelain confirmed on Tuesday that France’s Greens party will support a no-confidence motion.

Earlier on Tuesday, Macron had warned that any vote to topple Lecornu’s cabinet would force him to dissolve parliament and call elections.

France, the eurozone’s second largest economy, is facing deep economic turmoil as Lecornu fights to keep his cabinet alive long enough to pass an austerity budget by the end of the year. During a speech on Thursday, he warned suspending the pension reform would cost about 400 million euros ($464m) in 2026 and 1.8 billion euros ($2.1bn) the year after and it should be offset by savings.

France’s ratio of debt to its gross domestic product is the European Union’s third highest after Greece and Italy and is close to twice the 60-percent limit fixed by EU rules.

France has been rocked by protests in recent months. In September, the Block Everything campaign spurred a nationwide wave of antigovernment protests that filled streets with burning barricades and tear gas as demonstrators rallied against budget cuts and political instability.

The Court of Arbitration for Sport has rejected appeals by the Israel Gymnastics Federation to be allowed to compete at a world championships in Indonesia this weekend.

The CAS also turned down Israel’s request to force the International Gymnastics Federation (FIG) to guarantee Israel’s participation, or alternatively cancel or move the artistic worlds, set to start on Sunday in Jakarta.

The Indonesian government last week said it will not grant visas to Israeli gymnasts, and the Swiss-based CAS said on Tuesday that FIG stated it has no control over Indonesia’s visa policies.

In its reaction to Indonesia’s move, the FIG did not threaten to take the event away from Indonesia as stipulated in its statutes for cases where the host refuses to issue visas. Israel wanted the FIG “taking note” of the government statement to be annulled, but CAS also rejected that on Tuesday.

Indonesia’s decision to deny visas came after Israel’s planned participation sparked intense opposition in the world’s most populous Muslim-majority nation, which has long been a staunch supporter of Palestinians.

Israel is among 86 countries registered to compete at the worlds, with a team featuring 2021 Olympic gold medallist and defending world champion Artem Dolgopyat in the men’s floor exercise.

Now its participation is in doubt, even though the Israeli federation said in July that it had been assured by Indonesian officials that it would be welcome at the worlds. That would have gone against Indonesia’s longstanding policy of refusing to host Israeli sport delegations for major events.

A United States man who scaled an iron security fence in the middle of the night, eluded police and used beer bottles filled with petrol to ignite the Pennsylvania governor’s mansion has pleaded guilty to attempted murder and other charges.

On Tuesday, Cody Balmer, 38, also entered pleas for “terrorism”, 22 counts of arson, aggravated arson, burglary, aggravated assault of Governor Josh Shapiro, 21 counts of reckless endangerment, and loitering.

He is accused of the April 13 arson attack that did millions of dollars in damage to the state-owned brick building. Under a plea deal, Balmer was sentenced to 25 to 50 years in prison.

Shapiro and members of his family had to be awakened and evacuated, but no one was injured. The multiple arson and endangerment charges reflected the number of people in the residence at the time, including the governor’s family, guests and state troopers.

The fire was set hours after they celebrated the Jewish holiday of Passover with a Seder meal in the governor’s residence. Prosecutors played video clips that showed Molotov cocktails going off and a figure inside and outside the residence around the time of the attack.

Judge Deborah Curcillo called the video “horrific” and “very frightening”.

Balmer told police he planned to beat Shapiro with a small sledgehammer if he had encountered him after breaking into the building, according to court documents. Balmer turned himself in the next afternoon to face charges of attempted homicide, “terrorism”, aggravated arson and aggravated assault.

Police say Balmer broke in through the southern wing of the residence, into a room often used to entertain crowds and display art. Investigators recovered two broken glass beer bottles containing petrol. The fire charred walls, tables, buffet serving dishes, plates and a piano. Window panes and brick around doors and windows were also damaged.

Shapiro’s Jewish faith and the attack during the Passover weekend raised questions about Balmer’s motivation, but Balmer told The Associated Press in a May letter from jail that religion had not been a factor in his decision.

“He can be Jewish, Muslim, or a purple people eater for all I care and as long as he leaves me and mine alone,” Balmer wrote.

He said in a brief June 9 video interview from Camp Hill State Prison that he did think beforehand about whether children might be injured.

“Does anyone ever consider children?” Balmer said in June. “It doesn’t seem that way. I sure as hell did. I’m glad no one got hurt.”

Asked why he felt Shapiro had somehow done him wrong, Balmer replied: “I’m not going to answer that.”

Balmer’s mother said days after his arrest that she had tried to get him assistance for mental health issues, but “nobody would help”. Court proceedings had been delayed while he received mental health treatment, his lawyer has said.

At a court hearing a few days after the fire, Balmer told a judge he was an unemployed welder with no income or savings and “a lot of children”.