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    How EVs and gasoline cars compare on total cost — where you live can make a huge difference

    Electric vehicles generally cost more upfront than gasoline-powered cars.
    But EVs may cost less over their lifetimes relative to traditional cars due largely to lower prices for refueling and maintenance.
    Which is cheaper over the long term depends on geography and other factors.

    David Paul Morris/Bloomberg via Getty Images

    Electric vehicles may save consumers money over the long term relative to traditional gasoline-powered cars.
    While EVs still tend to cost more upfront to purchase, recurring charges for fuel and maintenance are generally cheaper — adding up to a total lifetime cost that can be lower than that of a gas vehicle, experts said.

    However, whether or not EVs beat gasoline cars on total cost depends on factors such as EV model, where the buyer lives and how they charge the battery, research shows.
    EVs are expected to more easily reach cost parity with gasoline cars as battery prices continue to fall, experts said.

    Some EV prices ‘starting to break even’ with gas models

    The average consumer paid about $56,000 to buy a new EV in June 2024, relative to $49,000 for a gas-powered vehicle, according to Kelley Blue Book.
    That financial gap is narrowing, however.
    Carmakers have been cutting EV prices, and the federal government also offers a tax credit up to $7,500 to qualifying buyers of new EVs. Consumers can opt to receive that tax break as an upfront discount on the car.

    States and utilities may also offer tax breaks to defray the cost of the vehicle purchase or charging infrastructure.

    “The expectation is EVs will continue to get cheaper, largely driven by [lower] battery costs,” said Maxwell Woody, a researcher at the University of Michigan’s Center for Sustainable Systems who co-authored a recent study on EV and gasoline car costs.
    Relative to gas car prices, some smaller EVs “are already starting to break even, even without the incentives,” Woody said.
    But most people still pay an EV premium, said Chris Harto, senior transportation and energy policy analyst at Consumer Reports.
    For buyers, “it’s really a question of, what’s the [long-term] payback on that extra cost?” Harto said.

    Why EVs may win out in the long run

    Owning an EV saves the typical driver $6,000 to $12,000 over the life of the vehicle, relative to a comparable gas-powered model, according to a Consumer Reports study published in 2023.
    “If anything, the [total] savings might be a little bit better today,” Harto said.
    EVs are less likely to need repair and maintenance, partly because they have fewer moving parts than cars with conventional fuel engines, according to the U.S. Department of Energy.
    It’s also “significantly cheaper” to refuel an EV due to its higher energy efficiency and generally lower electricity prices relative to gasoline, Woody said.
    More from Personal Finance:Some may go into debt back-to-school shoppingFree school lunches for all may become a campaign issueMost households can weather a $400 financial shock
    The Consumer Reports study examined six popular EVs that qualified for a federal tax credit, Harto said. Tax breaks from states, municipalities or utilities weren’t included.
    Similarly, a 2024 J.D. Power study found EVs beat their gas-powered counterparts on total cost over a five-year ownership period in all states except Maine and West Virginia.
    EV buyers in Colorado, Illinois, Nevada and New Jersey would save more than $8,000 over that period, according to the analysis, published in Automotive News last month.

    Why geography matters

    The J.D. Power analysis highlights a key caveat: The relative financial benefits derived from an EV depend heavily on case-by-case factors like a driver’s geographical location.
    For example, the total lifetime cost of a midsize electric SUV with a 300-mile range can vary by $52,000 — or nearly 40% — depending on location, according to the University of Michigan study.
    Such disparities are largely due to regional differences in prices for electricity and gasoline, Woody said.
    “In places like Texas with particularly low gas prices, it’s harder for an EV to break even,” Woody said.

    Additionally, EVs generally make more financial sense for those who recharge their batteries at home, Woody said. Public charging generally costs more, he said.
    This is especially true in areas where EV owners can take advantage of lower residential electricity prices during off-peak hours, like overnight charging, Woody said.
    “If you don’t have access to home charging, it’s going to be really hard to save money with an EV,” he said.
    Home charging access reduces the lifetime cost of a 300-mile midsize SUV by roughly $10,000, on average, and up to $26,000, according to the University of Michigan study.

    “Cities that are particularly friendly for [EVs] have several things in common, including a low cost of electricity (or at least time-of-use pricing that includes an option with low prices), high gasoline prices, moderate climates, and direct purchase incentives,” according to the study, which analyzed costs in 14 different U.S. cities.
    Overall, small and low-range EVs (with about 200 miles) had a less expensive total cost of ownership than similarly sized gas vehicles across all cities, even without tax incentives, the study found.
    Likewise, longer-range EVs with a roughly 300-mile range, especially for smaller vehicles like compact cars and midsize sedans, “can be comparable” without incentives. However, the longest-range models — about 400 miles — generally aren’t yet cost-competitive with gasoline vehicles, even with subsidies, it found.

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    Harley-Davidson drops diversity efforts after online pressure

    The motorcycle company is no longer consulting the Human Rights Campaign’s metric for treatment of LGBTQ+ employees.
    Harley-Davidson also affirmed its rejection of hiring quotas, supplier diversity spend goals and “socially motivated content” included in training.
    The announcement follows internal stakeholder review from earlier this year, as well as significant online pressure.

    Harley-Davidson is dropping some of its diversity, equity and inclusion efforts, according to a statement released Monday on social media site X.
    The motorcycle company said it has stopped consulting the Human Rights Campaign’s metric for treatment of LGBTQ+ employees, and that its sponsorship decisions will now be determined by the company and foundation, which will focus on “retaining our loyal riding community.”

    “We do not have a DEI function today,” and Harley-Davidson has not since April, according to the statement.
    Harley-Davidson also affirmed its rejection of hiring quotas and “socially motivated content” included in training. In the statement, the brand maintained support for first responders, active military members and veterans.
    The moves come after an online campaign by conservative activist Robby Starbuck, who has taken on similar fights against DEI initiatives at other companies. He posted a list of grievances against Harley-Davidson in July, claiming “they’ve gone totally woke.” The company also conducted an internal stakeholder review from earlier this year, according to the statement.
    “We are saddened by the negativity on social media over the last few weeks, designed to divide the Harley-Davidson community,” the statement said.
    Eric Bloem, HRC’s vice president of programs and corporate advocacy, called Harley-Davidson’s decision to cut DEI initiatives “impulsive,” saying it put politics ahead of the interests of workers and consumers.

    Starbuck praised the move Monday, saying it was “another win for our movement.”
    Harley-Davidson’s anti-DEI sentiment follows retail chain Tractor Supply’s decision in June to eliminate DEI roles, as well as walk back its support for the LGBTQ+ community and commitment to carbon emission goals.
    Both changes follow a U.S. Supreme Court decision in 2023 to strike down affirmative action in colleges, which experts predicted could have implications for corporate hiring and recruiting. Since then, Starbucks, Disney and Target have faced legal challenges over DEI initiatives for LGBTQ+ customers and employees.

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    Lowe’s cuts full-year outlook as it expects weaker home improvement sales

    Lowe’s beat fiscal second-quarter earnings expectations, but missed on sales and cut its full-year outlook.
    Lowe’s cited “lower-than-expected DIY sales and a pressured macroeconomic environment.”
    Its results come a week after rival Home Depot said it expected a weaker second half of the year.

    Lowe’s on Tuesday cut its full-year forecast, as the retailer’s quarterly sales declined and it projected weak home improvement spending in the second half of the year.
    The company said it now projects total sales of between $82.7 billion and $83.2 billion for the full year, compared with the $84 billion to $85 billion that it previously expected. It said it expects comparable sales to fall by 3.5% to 4%, compared with its prior forecast of a decline of 2% to 3%. It anticipates adjusted earnings per share will be about $11.70 to $11.90, compared with the prior outlook of between $12 and $12.30.

    In an interview with CNBC, CEO Marvin Ellison said consumers are waiting for the Federal Reserve to cut interest rates. He added shoppers also under pressure from the economic backdrop.
    “Inflation remains high,” he said. “And big-ticket purchases are being delayed as customers sit back and wait for interest rates to fall.”
    Fed Chair Jerome Powell has signaled a rate cut could come as soon as September, but Ellison said it’s difficult to predict how soon home improvement activity would gain momentum again after that.
    About 90% of Lowe’s customers are homeowners and most have a fixed 30-year mortgage rate of less than 4%, he said. That explains customers’ hesitance to get a new mortgage or take out a loan for a major home project with higher interest rate, he added.
    He said Lowe’s has not seen “a dramatic shift one way or another in overall consumer sentiment,” but is waiting for housing turnover to go up.

    Here’s what the company reported for the fiscal second quarter compared with what Wall Street was expecting, based on a survey of analysts by LSEG:

    Earnings per share: $4.10 adjusted vs. $3.97 expected
    Revenue: $23.59 billion vs. $23.91 billion expected

    In the three-month period that ended Aug. 2, Lowe’s net income fell to $2.38 billion, or $4.17 per share, compared with $2.67 billion, or $4.56 per share, in the year-ago period.
    Lowe’s got a $43 million pretax gain from the sale of its Canadian retail business in 2022, which lifted its earnings in the second quarter. That boosted the company’s earnings per share in the period by 7 cents. Excluding the gain, the company earned $4.10 per share.
    Net sales dropped from $24.96 billion in the prior year. Lowe’s posted a year-over-year sales decline for the sixth straight quarter.
    Comparable sales, an industry metric that takes out one-time factors like store openings and closures, dropped 5.1%, as the company said customers took on fewer discretionary home projects and unfavorable weather hurt sales of outdoor and seasonal items. It said those declines were partially offset by growth in its online business and sales to home professionals, such as contractors and electricians.
    Lowe’s shared its quarterly results and outlook at a time when investors and economists are watching consumer spending particularly closely. Recent economic data and corporate earnings have given mixed indications about American households’ financial health, as the Federal Reserve weighs a much-awaited rate cut.
    Jobs growth in July came in much lower than expected. Yet on the other hand, Walmart’s CFO, John David Rainey, told CNBC that the largest U.S. retailer does not “see any additional fraying of consumer health.” Goldman Sachs also cut the odds of a recession to 20%.
    For home improvement retailers, the strain may be greater because of higher mortgage rates and elevated costs for borrowing. Lowe’s rival, Home Depot, last week beat Wall Street’s quarterly expectations for earnings and revenue. Yet the company said it expects the back half of the year to be weaker than anticipated as consumers continue to have a “deferral mindset.”
    In an interview with CNBC, Home Depot CFO Richard McPhail said customers are not only putting off projects because of higher interest rates. He said they also have “a sense of greater uncertainty in the economy,” even though most of Home Depot’s customers own homes and have seen sharp property value gains.
    Ellison told CNBC that the medium- and long-term outlook for the home improvement industry is bright. He said U.S. housing stock is aging, more millennials are forming households and Baby Boomers are choosing to adapt their current homes rather than move as they get older — all factors that will boost the segment.
    “We’re just waiting for that inflection to happen, and when it happens, we believe that we’re in a great position to take [market] share,” he said.
    Shares of Lowe’s closed Monday at $243.21. As of Monday’s close, the company’s stock is up about 9% year to date, trailing behind the nearly 18% gains of the S&P 500. More

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    Alaska Airlines and Hawaiian Airlines merger clears Justice Department hurdle, now faces DOT

    Alaska Airlines and Hawaiian Airlines will still need approval from the Transportation Department to complete the deal
    The Justice Department’s period to compete its investigation into the deal expired Tuesday without a lawsuit seeking to block the deal.

    Alaska and Hawaiian Airlines planes takeoff at the same time from San Francisco International Airport (SFO) in San Francisco, California, United States on June 21, 2023.
    Tayfun Coskun | Anadolu Agency | Getty Images

    Alaska Airlines said that its plan to acquire Hawaiian Airlines has cleared the U.S. Justice Department after the period for antitrust regulators to finish an investigation of the deal ended without a lawsuit to block the deal, eight months after the two carriers announced a $1.9 billion agreement to combine.
    The two airlines now have to win approval from the U.S. Transportation Department before the deal closes. It wasn’t immediately clear how long that process will take.

    The combination would become the largest merger of U.S. carriers since Alaska merged with Virgin America eight years ago.
    “The time period for the U.S. Department of Justice to complete its regulatory investigation of the proposed combination of Alaska Airlines and Hawaiian Airlines under the [Hart-Scott-Rodino Antitrust Improvements] Act has expired,” Alaska Airlines said in a statement. “This is a significant milestone in the process to join our airlines.”
    The development comes after the DOJ won a court ruling in January that blocked JetBlue Airways’ acquisition of Spirit Airlines. Last year, the DOJ won another suit that undid a partnership in the Northeast between JetBlue and American Airlines.
    Hawaiian had faced a host of challenges in the months leading up to the deal — which the two carriers announced last December — including the Maui wildfires, increased competition from Southwest Airlines, and the slower recovery of travel to and from Asia after the Covid-19 pandemic.
    Hawaiian has posted net losses in all but one quarter since the start of 2020, but executives have recently said booking trends are improving. Hawaiian’s shares were up almost 12% this quarter, as of Monday, while most other airlines’ shares have dropped.

    The two airlines said in December when they announced the deal that they would keep each carrier’s brand but operate under a single platform, combining into a more than 360-airplane fleet covering over 130 destinations.
    The Transportation Department said Tuesday that it “is reviewing the application and can only approve a transfer if it is in the public interest.”
    The Justice Department didn’t immediately comment.

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    ‘Britain’s Bill Gates’: Who is Mike Lynch, the UK tech entrepreneur missing after superyacht sinks?

    British tech entrepreneur Mike Lynch was acquitted in June of fraud charges in a landmark trial.
    He was accused by Hewlett Packard of working to artificially inflate the value of his company Autonomy when he sold it to the U.S. tech giant for $11.7 billion in 2011.
    Lynch — once lauded by the U.K. press as “Britain’s Bill Gates” — is now missing after the sinking of a superyacht off the coast of Sicily.

    Mike Lynch, 59, is the founder of enterprise software firm Autonomy. He was acquitted of fraud charges in June after defending himself in a trial over allegations that he artificially inflated Autonomy’s value in an $11.7 billion sale to tech giant Hewlett Packard.
    Chris Ratcliffe | Bloomberg | Getty Images

    LONDON — British technology entrepreneur Mike Lynch was acquitted of fraud charges in June in a landmark trial over allegations made by Hewlett Packard that he had artificially inflated the value of his company when he sold it to the U.S. enterprise tech giant for $11.7 billion in 2011.
    Just two months after his acquittal, Lynch — who was once lauded by the U.K. national press as “Britain’s Bill Gates” — was reported missing Monday after the sinking of a superyacht off the coast of Sicily.

    The yacht, called the Bayesian, capsized at around 4 a.m. local time while anchored off the coast of Porticello, a small fishing village located in the province of Palermo in Italy. It was struck by an unexpectedly violent storm, according to local media reports.
    Lynch’s wife, Angela Bacares, is among the 15 people who were rescued after the yacht’s collapse. At least one man has died, while six people — including Lynch’s daughter Hannah — remain unaccounted for, officials have said.
    Sicily’s civil protection agency told reporters late Monday that Morgan Stanley International chairman, Jonathan Bloomer, his wife Judy, and Clifford Chance lawyer Chris Morvillo are also missing.
    In a separate incident Saturday, Stephen Chamberlain, the former vice president of finance at Autonomy and a co-defendant in Lynch’s trial, died after being “fatally struck” by a car while out running in Cambridgeshire, Chamberlain’s lawyer told Reuters news agency.

    Who is Mike Lynch?

    Lynch, 59, is the founder of enterprise software firm Autonomy. He also runs Invoke Capital, a venture capital firm focused on backing European tech startups, which he founded in 2012.

    He became the target of a protracted legal battle with Hewlett Packard after the technology firm accused Lynch of inflating Autonomy’s value in an $11.7 billion sale. HP took an $8.8 billion write-down on the value of Autonomy within a year of buying it.

    Lynch was extradited from Britain to the U.S. last year to stand trial over the HP allegations. He faced criminal charges, including wire fraud and conspiracy for allegedly scheming to inflate Autonomy’s revenue starting in 2009 in a bid to entice a buyer.
    But two months ago, Lynch, who has long denied the accusations, was acquitted of fraud charges in a surprise victory following the trial, which lasted for three months.
    During the trial, Lynch took the stand in his own defense, denying wrongdoing and telling jurors that HP botched Autonomy’s integration.
    Prosecutors had alleged Lynch, along with Autonomy’s now-deceased finance executive Chamberlain, padded Autonomy’s finances in a number of ways.
    These included back-dated agreements and so-called “round-tripping” deals that sought to artificially inflate Autonomy’s sales by fronting cash cash to customers through fake contracts.
    Lynch told jurors that he was focused on technology-related matters at Autonomy and left accounting and money decisions to the company’s then-chief financial officer, Sushovan Hussain.

    Hussain was separately convicted in the U.S. in 2018 on charges of conspiracy, wire fraud and securities fraud related to the HP deal. He was released from prison in January after serving a five-year sentence.

    ‘Britain’s Bill Gates’

    Lynch was born in Ilford, a large town in East London, in 1965 and grew up near Chelmsford in the English county of Essex.
    He attended the University of Cambridge, where he studied natural sciences, focusing on areas including electronics, mathematics and biology. After completing his undergraduate studies, Lynch completed a Ph.D. in signals processing and communications.
    Toward the end of the 1980s, Lynch founded Lynett Systems Ltd., a firm which produced designs and audio products for the music industry.
    A few years later, in the early 1990s, he founded a fingerprint recognition business called Cambridge Neurodynamics, which counted the South Yorkshire Police among its customers.
    But his big break came in 1996 with Autonomy, which he co-founded with David Tabizel and Richard Gaunt as a spinoff from Cambridge Neurodynamics. The company scaled into one of Britain’s biggest tech firms.
    Lynch held a lot of influence in the U.K. technology sphere at the height of his success, having once been dubbed Britain’s Bill Gates by the media.

    He was previously on the board of U.K. broadcaster BBC. He also once served as an advisor to the British government on the Council for Science and Technology.
    In his role as head of venture firm Invoke, Lynch was closely involved in helping British cybersecurity firm Darktrace and legal software startup Luminance get off the ground, backing both firms with sizable sums of cash.
    Publicly-listed Darktrace, which had fended off similar allegations of inflating its revenues by U.S. short seller Quintessential Capital Management (QCM), earlier this year agreed a deal to bought out and taken private by U.S. private equity firm Thoma Bravo for $5.32 billion in cash.
    Lynch previously made the Forbes’ billionaires list in 2014 and 2015, with an estimate net worth of $1 billion, according to the business news outlet. However, while facing legal costs in the dispute with HP, he dropped off the list in 2016.

    Legal struggles aside, Lynch has several hobbies to keep him busy, including keeping and caring for cattle and pigs at his home in Suffolk.
    “I keep rare breeds,” Lynch told LeadersIn during an interview. “I have cows that became defunct in the 1940s and pigs that no one has kept since the medieval times and none of them have any Apple products whatsoever.”
    Lynch reportedly returned to his farm in Suffolk, a county in the East of England, to recover from his U.S. legal battle, the local East Anglian Times newspaper reported.
    Weeks before he was reported missing, Lynch told The Times newspaper of how he feared dying in prison if found guilty over the HP allegations.
    “‘If this had gone the wrong way, it would have been the end of my life as I have known it in any sense,” Lynch said in the interview with The Times.
    “It’s bizarre, but now you have a second life – the question is, what do you want to do with it?” he added. More

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    Eli Lilly’s weight loss drug slashes the risk of developing diabetes in long-term trial

    Eli Lilly’s weight loss drug reduced the risk of developing Type 2 diabetes by 94% in obese or overweight adults with pre-diabetes compared to a placebo, according to initial results from a long-term study.
    The late-stage trial on tirzepatide also found that patients experienced sustained weight loss over the roughly three-year treatment period.
    Tirzepatide is the active ingredient in the company’s highly popular weight loss injection Zepbound and diabetes drug Mounjaro.

    An Eli Lilly & Co. Zepbound injection pen arranged in the Brooklyn borough of New York, US, on Thursday, March 28, 2024. 
    Shelby Knowles | Bloomberg | Getty Images

    Eli Lilly’s highly popular weight loss drug reduced the risk of developing Type 2 diabetes by 94% in obese or overweight adults with prediabetes compared with a placebo, according to initial results from a long-term study released Tuesday. 
    The late-stage trial on tirzepatide, the active ingredient in the company’s weight loss injection Zepbound and diabetes drug Mounjaro, also found that patients experienced sustained weight loss over the roughly three-year treatment period. Adults on the highest weekly dose of the drug saw a 22.9% decrease in body weight on average after 176 weeks, compared with 2.1% for those who received a placebo. 

    The results suggest that Eli Lilly’s treatment could meaningfully delay a potential diagnosis for people with prediabetes, or those with blood sugar levels that are higher than normal but not high enough to be classified as Type 2 diabetes. 
    More than 1 in 3 Americans have prediabetes, according to the latest government data, which health experts say can be reversed with lifestyle changes such as diet and exercise. People who are overweight or have obesity are at a higher risk for prediabetes. 
    The new data also shows the potential long-term health benefits of taking a buzzy class of obesity and diabetes medications called GLP-1s, which mimic hormones produced in the gut to tamp down appetite and regulate blood sugar. As Eli Lilly’s Zepbound and Mounjaro and injections from rival Novo Nordisk have skyrocketed in popularity over the last two years, the companies have raced to study other clinical uses for their drugs.
    “Obesity is a chronic disease that puts nearly 900 million adults worldwide at an increased risk of other complications such as Type 2 diabetes,” Dr. Jeff Emmick, senior vice president of product development at Eli Lilly, said in a statement. “These data reinforce the potential clinical benefits of long-term therapy for people living with obesity and pre-diabetes.”
    Eli Lilly tested tirzepatide in more than 1,000 adults over 176 weeks in the phase three trial, followed by a 17-week period where patients stopped treatment. It is the longest completed study on the drug to date, according to the company. 

    More CNBC health coverage

    The drugmaker will submit the latest results to a peer-reviewed journal and present them at an upcoming medical conference in November. Eli Lilly published 72-week weight loss results on a larger group of patients from the same trial, called SUMOUNT-1, back in 2022. 
    Patients in the trial who stopped taking tirzepatide during the 17 weeks began to regain weight and saw an increase in progression to diabetes. But those participants still had an 88% lower risk of developing diabetes compared with a placebo, according to the latest phase three results.
    The safety data on tirzepatide during the trial was consistent with previous studies on the drug, according to Eli Lilly. The most common side effects were gastrointestinal, such as diarrhea, nausea, constipation and vomiting, and were generally mild to moderate in severity.
    Eli Lilly’s Zepbound works by imitating two naturally produced gut hormones called GLP-1 and GIP. 
    GLP helps reduce food intake and appetite. GIP, which also suppresses appetite, may also improve how the body breaks down sugar and fat.

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    Boeing pauses tests of 777X aircraft after finding damage to one of the jets’ structures

    Boeing said it grounded its fleet of four 777X test fleet after finding damage in one of the jetliner’s structures.
    It wasn’t immediately clear whether the problem will delay deliveries of the new wide-body jets, scheduled to start in 2025.
    The planes are already years behind schedule and were originally expected to start deliveries in 2020.

    A Boeing 777x aircraft during an aerial display on the opening day of the Farnborough International Airshow in Farnborough, UK, on Monday, July 18, 2022.
    Jason Alden | Bloomberg | Getty Images

    Boeing said Monday that it has paused flight tests of its 777X after it found damage in a structure of one of the wide-body aircraft.
    The company said it discovered the damage to the custom part, which it said is between the engine and the airplane structure, during scheduled maintenance. It has since grounded the three other 777-9 airplanes in its test fleet. No other flight testing was scheduled for the other aircraft, Boeing said.

    “Our team is replacing the part and capturing any learnings from the component and will resume flight testing when ready,” Boeing said in a statement. It said it has informed the Federal Aviation Administration and its customers, which have ordered 481 of the 777X, according to Boeing’s website.
    It wasn’t immediately clear whether the grounding and issue would impact certification and delivery of the new wide-body jetliners, which are slated for 2025, about five years behind schedule. Boeing began flight tests of the aircraft with the Federal Aviation Administration in July, a major milestone.
    The news, reported earlier by The Air Current, comes as Boeing’s leaders, including new CEO Kelly Ortberg, are trying to move the company past a safety crisis that started with a doorplug blowout at the start of the year.

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    California cracks down on organized retail crime with new package of laws

    California Gov. Gavin Newsom has signed 10 new bills into law that aim to combat retail crime in the state.
    One of the bills in the package establishes tougher penalties for middlemen in organized retail crime rings and was introduced in response to a CNBC investigation published in March.
    Retailers have called on both local and federal governments to do more to combat retail theft, citing it as a growing challenge that’s impacted profits, customers and staff.

    Governor Newsom signed into law the most significant bipartisan legislation to crack down on property crime at a Home Depot store in San Jose, California, United States on August 16, 2024. 
    Tayfun Coskun | Anadolu | Getty Images

    California Democratic Gov. Gavin Newsom has signed 10 new bills into law that aim to combat retail crime in the state.
    The package, announced Friday, includes new laws that crack down on shoplifting, theft from a vehicle, organized theft, and online marketplaces where these stolen goods are sometimes resold. The new laws come after retailers have called on both local and federal governments to do more to combat retail theft, citing it as a growing challenge that’s impacted profits, customers and staff.

    One of the bills in the package, SB 1416, establishes tougher penalties for middlemen in organized retail crime rings and was introduced in response to a CNBC investigation published in March, according to the office of state Sen. Josh Newman, a Democrat, who introduced the bill.
    “As author of the bill, I used examples of your reporting in each of the policy committee hearings at which I presented the bill, and I think it made real for my colleagues something that otherwise seemed kind of abstract. And it also, I think, encapsulated just how powerful the incentives are,” Newman told CNBC.
    The law Newman authored establishes additional prison time and fines for the sale, exchange or return of stolen property — the bread and butter of retail resale crime rings. Prior to the law’s passage, those charged with being involved in organized retail crime rings could face up to three years in prison. Critics said that sentence and penalty were not enough of a deterrence.
    Newman said the law was designed to go after middlemen like Michelle Mack — the organized retail crime “queenpin” who was exposed in CNBC’s investigation. Police say she made millions reselling stolen goods on Amazon at a fraction of their typical retail price.
    “It’s necessary to account for just how easy it is to recruit people to go steal for you, and then just how easy and profitable it is to then clean this stuff up and sell it,” Newman said.

    Mack was arrested in December and received a delayed sentence of five years and four months in state prison. Mack’s husband, Kenneth, received the same sentence and is already incarcerated. The couple was ordered to pay about $3 million in restitution to beauty retailer Ulta and another $13,000 to Sephora, a court official previously told CNBC.
    Theft and organized retail crime rings like that of Mack’s “California Girls” have been cited by retailers as a reason for lower profits, difficulty in hiring and retaining staff, and the degradation of the in-store experience. Others have countered these claims, saying that retailers are overstating the impact of theft and downplaying the operational issues behind lower profits.
    Commercial burglary and commercial robbery rates in California have been steadily rising over the past few years, according to data from the Public Policy Institute of California. Shoplifting, although still well below pre-pandemic levels, is seeing an increase as well.
    Since January, the California Highway Patrol’s Organized Retail Crime Task Force has made 884 arrests and recovered more than 250,000 stolen items valued collectively at over $7.2 million, according to the press release announcing the new legislation.
    Retailers have been urging Congress to crack down on organized retail crime nationally, with the retail lobby group National Retail Federation pushing to make it easier to prosecute theft as a federal felony.
    With the 2024 presidential election looming, Democrats are also looking to appear tough on crime to address Republican criticism of the nation’s rising crime rates. However, critics of the push to combat retail crime fear the measures may disproportionately harm marginalized groups.
    Another bill, SB 1144, also passed in the new package of laws aims to prevent the trafficking of stolen goods on online marketplaces like Amazon. The bill, introduced by state Sen. Nancy Skinner, a Democrat, builds on a previous California law by updating compliance criteria for high-volume, third-party sellers and making it easier for civil charges to be filed against online marketplaces selling stolen goods, among other measures.
    — CNBC’s Gabrielle Fonrouge, Scott Zamost and Courtney Reagan contributed to this report.

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