Raphael Stevens

The forecasts were part of a filing by the automaker disclosing that it has about 95,000 vehicles in its inventory that were manufactured without certain components as of June 30.
GM said it expects that “substantially all of these vehicles” will be completed and sold to dealers before the end of 2022.

Mary Barra, Chair and CEO of the General Motors Company (GM), speaks during the Milken Institute Global Conference in Beverly Hills, California, on May 2, 2022.
Patrick T. Fallon | AFP | Getty Images

DETROIT – General Motors on Friday said it expects net income during the second quarter to be between $1.6 billion and $1.9 billion and pre-tax adjusted earnings to be in the range of $2.3 billion and $2.6 billion.
Shares of the automaker were down by 2% after briefly being halted during pre-market trading, pending news.

GM did not previously provide a forecast for its second quarter.
The forecasts were part of a filing by the automaker disclosing that it has about 95,000 vehicles in its inventory that were manufactured without certain components as of June 30, a majority of which were built in June. GM said it expects that “substantially all of these vehicles” will be completed and sold to dealers before the end of 2022.
Despite the issues, GM stood by its previously announced guidance for 2022 that includes net income of between $9.6 billion and $11.2 billion, pre-tax adjusted earnings of between $13 billion and $15 billion, or $6.50 and $7.50 a share, and adjusted automotive free cash flow guidance range of between $7 billion and $9 billion.

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According to Tevva, which says it has raised $140 million in funding, its vehicle will have a range of as much as 310 miles.
The company says its first hydrogen electric truck will weigh 7.5 metric tons, with later versions planned to weigh 12 and 19 metric tons.
While there is excitement in some quarters about the potential of hydrogen-powered vehicles, there are hurdles when it comes to expanding the sector.

U.K.-based startup Tevva on Thursday launched a hydrogen-electric heavy goods vehicle, becoming the latest company to make a play in a sector attracting interest from multinationals like Daimler Truck and Volvo.
According to Tevva, which says it has raised $140 million in funding, its vehicle will have a range of as much as 310 miles, or slightly under 500 kilometers.

Refilling the hydrogen tanks will take 10 minutes while charging the battery “from fully depleted to 100%” will take five to six hours.
The company’s first hydrogen-electric truck will weigh 7.5 metric tons, with later versions planned to weigh 12 and 19 metric tons.
In a statement, Tevva sought to explain the rationale behind combining a fuel cell and battery. “The fuel cell system tops up the battery, extending the vehicle’s range and allowing the truck to carry heavier loads over longer distances.”
Alongside its hydrogen-electric truck, the business has also developed an electric truck that it says has a range of up to 160 miles. Details of both the electric and hydrogen-electric trucks had been previously announced by Tevva.

Read more about electric vehicles from CNBC Pro

In an interview with CNBC’s “Street Signs Europe” on Thursday, Tevva CEO Asher Bennett was asked whether his company was looking to diversify into smaller vehicles.

“We’re not interested in developing the smaller vans or the pickup trucks,” Bennett said. “Those are, in many instances, very similar technology to the larger EV sedans, which work very well,” he added.
“We’re very focused on the heavy goods trucks and we’re slowly going heavier and heavier because those are the segments that are much harder to electrify.”
With governments around the world looking to reduce the environmental footprint of transportation, a number of companies in the trucking sector are exploring ways to develop low and zero-emission vehicles, including ones that use hydrogen.
Last month, Volvo Trucks said it began to test vehicles that use “fuel cells powered by hydrogen,” with the Swedish firm claiming their range could extend to as much as 1,000 kilometers, or a little over 621 miles.
Gothenburg-headquartered Volvo Trucks said refueling of the vehicles would take under 15 minutes. Customer pilots are set to begin in the next few years, with commercialization “planned for the latter part of this decade.”
Alongside hydrogen fuel cell vehicles, Volvo Trucks — which is part of the Volvo Group — has also developed battery-electric trucks.

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Like Volvo Trucks and Tevva, Daimler Truck is focusing on both battery-electric vehicles and ones that use hydrogen.
In an interview with CNBC last year, Martin Daum, chairman of the board of management at Daimler Truck, was asked about the debate between battery-electric and hydrogen fuel cells.
“We go for both because both … make sense,” he replied, before explaining how different technologies would be appropriate in different scenarios.
While there is excitement in some quarters about the potential of hydrogen-powered vehicles, there are hurdles when it comes to expanding the sector, not least when it comes to the development of adequate refueling infrastructure. The way hydrogen is produced is also an issue.
Both of these points were acknowledged by Volvo Trucks in June when it pointed to challenges including the “large-scale supply of green hydrogen” as well as “the fact that refueling infrastructure for heavy vehicles is yet to be developed.”
Hydrogen can be produced in a number of ways. One method includes using electrolysis, with an electric current splitting water into oxygen and hydrogen.
If the electricity used in this process comes from a renewable source such as wind or solar then some call it “green” or “renewable” hydrogen. Today, the vast majority of hydrogen generation is based on fossil fuels.
For its part, Tevva said it would help its customers “access sustainable and affordable hydrogen supplies safely and conveniently, alongside their purchase or lease of Tevva Hydrogen Trucks.” More

Kohl’s announced Friday that it is terminating talks to sell its business, saying that retail environment has significantly deteriorated since the beginning of its bidding process.
The company also cut its outlook for the fiscal second quarter, citing softer consumer spending.
CNBC reported late Thursday that Kohl’s no longer planned to sell its business to The Vitamin Shoppe owner Franchise Group.

Kohl’s announced Friday that it is terminating talks to sell its business, saying that retail environment has significantly deteriorated since the beginning of its bidding process.
The Kohl’s announcement confirmed CNBC’s report late Thursday that Kohl’s no longer planned to sell its business to The Vitamin Shoppe owner Franchise Group.

Kohl’s also cut its outlook for the fiscal second quarter, citing softer consumer spending amid decades-high inflation. It now sees sales down high-single digits, compared with a prior forecast of down low-single digits relative to last year.
Kohl’s shares fell around 19% in premarket trading after being briefly halted on the news.
The retailer’s decision to end deal talks comes as its stock price slumps and its sales decline. Kohl’s has faced months of pressure from activist investors to pursue a sale and shake up the business with a new slate of board directors. Earlier this year, it rejected a different firm’s buyout offer of $64 a share, which it considered too low. The stock was set to trade at about $30 Friday morning.
Kohl’s on Friday said rocky conditions in the retail industry and the overall economy effectively doomed the deal with Franchise Group, after it engaged with more than 25 different parties with help from bankers at Goldman Sachs.
In a separate 8-K filing with the Securities and Exchange Commission, Kohl’s cited recent disappointing financial reports from major retail companies including Walmart that “raised concerns about retail and consumer industry trends, which were followed by significant declines in retailer stock prices.”

“Despite a concerted effort on both sides, the current financing and retail environment created significant obstacles to reaching an acceptable and fully executable agreement,” said Peter Boneparth, chair of Kohl’s board, in a news release.
“Given the environment and market volatility, the board determined that it simply was not prudent to continue pursuing a deal,” Boneparth added.
While Kohl’s board decided that it is in the best interest of shareholders for management to continue to operate on a standalone basis, the retailer also said Friday that its board “nonetheless remains open to any opportunities to maximize shareholder value.”
Franchise Group also confirmed Friday morning that its negotiations to acquire Kohl’s were terminated. The company, run by CEO Brian Kahn, said that it will continue to evaluate other internal and external deal opportunities.
Financing headaches
Financing such a massive deal has become more difficult due to volatility in the stock market and broader economy, as the Federal Reserve jacks up interest rates to counter surging inflation. Walgreens Boots Alliance earlier this week scrapped its plan to sell its U.K. pharmacy chain, Boots, saying no third party was able to make an adequate offer due to turmoil in the global financial markets.
Potential suitors for Kohl’s, which ultimately ended up not providing bids, expressed interest in the retailer’s real estate, according to the SEC filing. But one party said that an investment in traditional retail would be “difficult.” Another said that a take-private deal would require insights that the public market didn’t have.
Franchise Group had been weighing lowering its bid for Kohl’s to closer to $50 per share from about $60, CNBC reported last week, citing a person familiar with the matter. The shift in thinking came as the outlook for the retail industry grew increasingly grim, the person said, as fears of a recession mounted.
Franchise Group in early June proposed a bid of $60 per share to acquire Kohl’s at a roughly $8 billion valuation. The two companies then entered an exclusive three-week window during which they could firm up any due diligence and final financing arrangements. That ran its course this past weekend.
Kohl’s confirmed Friday that Franchise Group did submit a revised proposal at $53 per share, albeit “without definitive financing arrangements to consummate a transaction.” Kohl’s said the parties then faced “significant obstacles” in reaching a fully executable agreement.
Kohl’s said, however, that it will still evaluate opportunities to monetize portions of its real estate portfolio. CNBC previously reported that Franchise Group was planning to finance its acquisition of Kohl’s, in part, by selling a portion of the retailer’s real estate to another party and then leasing it back.
Kohl’s shares closed Thursday at $35.69. At one point during the day the stock touched a 52-week low of $34.33. Kohl’s ended the day with a market valuation of roughly $4.6 billion, its shares down about 28% so far this year.

Activist pressure

Activist firm Macellum Advisors has been pushing for Kohl’s to consider a sale or consider other strategic alternatives since January. Macellum was also arguing for Kohl’s to revamp its slate of directors, arguing the retailer, under Chief Executive Officer Michelle Gass, has underperformed in recent years compared with its peers.
Macellum didn’t immediately respond to a request for comment.
In mid-May, however, Kohl’s shareholders voted to reelect the company’s current slate of 13 board directors, thereby defeating Macellum’s proposal.
In recent weeks, the outlook for the retail industry has grown bleaker as consumers pull back their spending on certain discretionary categories, such as home goods and apparel, amid inflation and the threat of an economic slowdown.
High-end furniture chain RH on Wednesday cut its forecast for revenue in fiscal 2022, anticipating softer consumed demand for its products in the back half of the year. Bed Bath & Beyond saw its sales plummet in its most recent quarter and ousted its CEO.
Companies are also seeing inventories pile up as shipments of goods arrive later than planned, due to supply chain snags. Big-box retailer Target in early June warned investors that its profits will take a short-term hit, as it marks down unwanted items, cancels orders and takes aggressive steps to get rid of extra inventory.
Kohl’s sales for the three-month period ended April 30 fell to $3.72 billion from $3.89 billion in 2021. When it reported these figures in mid-May, the retailer also slashed its profit and revenue forecasts for the full fiscal year, further muddying the picture for a potential deal.

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Nio delivered almost 13,000 vehicles in June, its best-ever total and its first result over 10,000 since December.
Both XPeng and Li Auto delivered even more vehicles, as China’s auto industry looks to have rebounded from the latest Covid wave.
All three automakers in their monthly deliveries reports confirmed that their new models remain on track to launch later this year.

Nio’s ES7 sports utility vehicle adds another competitor to Tesla’s Model X and Model Y in China.

Chinese electric-vehicle maker Nio reported Friday that it delivered nearly 13,000 vehicles in June, up 60% from a year ago, as China’s auto industry continued to rebound after months of pandemic-related disruptions.
Its total deliveries of 12,961 was Nio’s best monthly result since it began sales to the public in June 2018. But it wasn’t enough to outpace the company’s two key rivals. XPeng Motors reported Friday that it delivered 15,295 vehicles to customers in June, up 133% from a year ago. Also Friday, Li Auto reported delivering 13,024 of its SUVs last month, up 69% from a year ago.

All three automakers have had intermittent production disruptions since the onset of the Covid pandemic. But Nio, based in Shanghai with factories in Hefei, was hit hardest by the most recent outbreaks. June was its first month with more than 10,000 deliveries since December.
Nio didn’t share details Friday of its production recovery efforts. But it said it will begin deliveries of its upcoming new ES7 SUV and revised versions of ES8, ES6 and EC6 SUVs in August.
XPeng, based in southern China near the city of Guangzhou, said it was able to resume two-shift production in mid-May at its factory in Zhaoqing. The company on Friday confirmed plans to launch a new flagship SUV, the G9, in September. It said preorders for the G9 will open in August.
Li Auto, based in Changzhou, unveiled its own new flagship, a large SUV called the L9, in June. The company, which earlier this week announced plans to raise $2 billion via an at-the-market stock offering, said Friday that it expects to begin delivering the L9 by the end of August.

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American Airlines offered pilots raises totaling nearly 17% under a new contract, according to an internal video seen by CNBC.
The Allied Pilots Association and management have clashed over the slow pace of negotiations.
American’s latest offer comes as airlines are grappling with pilot shortages.

Pilots talk as they look at the tail of an American Airlines aircraft.
Mike Stone | Reuters

American Airlines CEO Robert Isom on Thursday said the carrier has offered its pilots pay raises totaling nearly 17% under a new contract, according to an internal video seen by CNBC.
The latest proposal to the pilots’ union, the Allied Pilots Association, comes less than a week after rival United Airlines and its pilots’ union reached a tentative agreement that includes more than 14% in total raises within 18 months, the first major U.S. airline in the industry to get to that point in the pandemic.

That agreement faces a vote by United’s pilots that ends in mid-July, however, and it is still not clear whether it has enough support to pass.
Earlier this month, Isom said American would make a new offer to the carrier’s roughly 15,000 pilots once the details of United’s deal were released.

Its proposal includes a 6% raise at signing and then 5% raises at the start of 2023 and 2024.
“United put forth industry leading pay, and we matched that for our team,” Isom said in the video message Thursday, referring to pilot pay rates. The difference in percentages is due to higher pay for United pilots.
American’s latest proposal comes as the industry is struggling with a shortage of pilots, particularly at smaller regional airlines. At the same time, travel demand has soared, catching many airlines flat-footed, especially during peak travel periods.

Isom said American is proposing other pay increases for training and 50% premium on reassignment, including for reserve crews. There are other incentives such as retroactive pay if the agreement is ratified by Sept. 30, he said.
“Getting a deal done quickly will help strengthen our training program and ensure we can continue to grow,” he said.
Dennis Tajer, an American Airlines captain and spokesman for the union, said the APA is reviewing the proposal.
The APA’s relationship with American has been one of the most fraught in the industry. The union has repeatedly complained about fatigue from grueling schedules and other quality of life issues, such as schedule changes, issues it wanted addressed in the next contract.
American pilots have picketed to protest working conditions and a lack of progress in negotiations.
Pilots for Southwest Airlines, Alaska Airlines and Delta Air Lines have also picketed for similar reasons. Delta’s pilots most recently picketed at airports around the U.S. on Thursday, all three are in contract negotiations.
Earlier this week, American Airlines’ regional carrier Envoy Air said pilots could receive triple pay for picking up open trips in July, CNBC reported earlier this week.

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