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U.S. lawmakers are seeking to review a licensing deal between Ford and China-based CATL involving a planned $3.5 billion battery cell plant in Michigan.
They are demanding Ford provide a copy of the agreement and any communication about the deal between the two companies as well as the Biden administration.
A Ford spokesman said the company is reviewing the letter but declined to directly comment on the message.

Ford CEO Jim Farley announces at a press conference that Ford Motor Company will be partnering with the worlds largest battery company, a China-based company called Contemporary Amperex Technology, to create an electric-vehicle battery plant in Marshall, Michigan, on February 13, 2023 in Romulus, Michigan.
Bill Pugliano | Getty Images News | Getty Images

DETROIT – U.S. lawmakers are seeking to review a licensing deal between Ford Motor and China-based CATL that would allow the automaker to produce battery cells developed by the global supplier at a planned $3.5 billion plant in Michigan.
In a letter Thursday addressed to Ford CEO Jim Farley, chairs of the House Select Committee on the Chinese Communist Party (CCP) and the House Ways and Means Committee demanded the automaker provide a copy of the licensing agreement and any communication about the deal between the two companies as well as between Ford and the Biden administration regarding any potential tax credits.

The letter also questions the number of Americans that the plant will employ compared with Chinese workers; whether the deal should qualify for federal tax funding; CATL’s potential connections to forced labor practices; and if the deal indeed assists in lowering the country’s dependency on China for parts and materials for electric vehicles.
The Michigan plant is expected to open in 2026 and employ about 2,500 people, according to the Detroit automaker. It will produce new lithium iron phosphate batteries, or LFP, as opposed to pricier nickel cobalt manganese batteries, which the company is currently using. The new batteries are expected to offer different benefits at a lower cost, assisting Ford in increasing EV production and profit margins.
Ford follows EV leader Tesla in using LFP batteries in a portion of its vehicles, in part to reduce the amount of cobalt needed to make battery cells and high-voltage battery packs.
Several hundred of the proposed 2,500 jobs managed by Ford will be staffed by CATL employees from China until the licensing agreement expires in 2038, according to the letter.
“Indeed, although the executives of the proposed project will be US-based Ford employees, it appears that the project will rely on CATL employees from the PRC to maintain operations in the long term,” the lawmakers wrote.

Ford CEO Jim Farley at a battery lab for the automaker in suburban Detroit, announcing a new $3.5 billion electric vehicle battery plant in the state to produce lithium iron phosphate batteries, Feb. 13, 2023.
Michael Wayland/CNBC

Ford has adamantly defended the deal since it was announced in February, saying it is simply licensing the company’s processes for its facility in rural Michigan, which will be a wholly owned subsidiary that creates thousands of U.S. jobs.
Ford spokesman T.R. Reid said Friday the company is reviewing the letter but declined to directly comment on the message.
“Broadly, a lot of what’s been said and implied about this project is wrong. Instead of buying these batteries from suppliers in Asia – like other automakers do today – we’re investing $3.5 billion to make them in a plant built and run by a wholly owned Ford subsidiary, creating 2,500 new American jobs in the process. This is good for customers, good for the country and good for our company,” he said in an emailed statement.
Company officials have said they expect the battery cells produced at the plant to qualify for federal incentives under the Biden administration’s Inflation Reduction Act.
IRA incentives for domestically produced battery cells include credits of $35 per kilowatt hour produced and $10 per module. Ford said in May that it expects the plant to have an annual output of about 42 gigawatt hours once it’s fully up and running.

China ties

The tie-up between Ford and CATL has previously been criticized by some Republican lawmakers such as Sen. Marco Rubio and Rep. Jason Smith, chairman of the House Ways and Means Committee. Smith cosigned the Thursday letter with Rep. Mike Gallagher.  
Gallagher, who chairs the House Select Committee on the CCP, has spearheaded several probes into U.S.-China business interests. The Wisconsin Republican recently questioned American firms’ eagerness to work with Chinese companies in light of the Chinese Communist Party’s alleged human rights abuses and military campaigns.
“You’re taking on the CCP as your business partner when you’re doing business in China,” Gallagher told reporters earlier this week. “To me, the far more fundamental question is why do so many American businesses and asset managers want the CCP as a business partner?”

House Majority Leader Kevin McCarthy (R-CA) talks to reporters following his election to House minority leader for the next Congress with Rep. Jason Smith (R-MO) (L) and House Majority Whip Steve Scalise (R-LA) in the Longworth House Office Building on Capitol Hill November 14, 2018 in Washington, DC. 
Chip Somodevilla | Getty Images

Smith previously sent a letter to Farley in April seeking information about the deal with CATL, formally named Contemporary Amperex Technology Co. The new letter states Farley’s previous responses “did not provide the level of detail sought by the Committee.”
CATL also has ties to Xinjiang Lithium through its former senior manager Guan Chaoyu, who purchased the brand through a limited partnership after CATL quietly divested 23.6% of its ownership stake shortly after the licensing agreement was announced.
“Xinjiang Lithium—which aims to become the largest lithium carbonate producer in the world—is tied through wholly-owned subsidiaries and other relationships to companies that engage in state-sponsored labor transfer programs in the Xinjiang region,” the lawmakers wrote. “The laborers in these programs are in many cases ‘transferred directly from camps to factories’ and ‘subjected to constant surveillance.'” More

“Barbenheimer” weekend begins with a bang, as “Barbie” snares $22.3 million in Thursday night preview tickets.
Warner Bros.’ “Barbie” is expected to capture at least $140 million over its first three days in theaters.
Universal’s “Oppenheimer” looks to open between $40 million and $60 million. The movie nabbed $10.5 million Thursday night.
The two films could together generate $200 million over their opening frame.

Cillian Murphy in Oppenheimer and Margot Robbie as Barbie
Julien De Rosa | AFP | Getty Images; Stuart C. Wilson | Getty Images

“Barbenheimer” is off to a red-hot start at the domestic box office.
One-half of the viral internet meme, “Barbie,” snared $22.3 million in Thursday night preview tickets, the most of any film released so far in 2023 – topping the $17.5 million first-night haul of Marvel’s “Guardians of the Galaxy Vol. 3” and the $17.4 million bow of Sony’s “Spider-Man: Across the Spider-Verse.”

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The R-rated, three-hour “Oppenheimer,” meanwhile, tallied $10.5 million from Thursday showings. That’s in line with big releases such as 2017’s “Wonder Woman” and this year’s live action “The Little Mermaid.”
Heading into the weekend, Warner Bros.’ “Barbie” is expected to capture upwards of $140 million, if not more, over its first three days in theaters. Meanwhile, Universal’s “Oppenheimer” appears destined to snare at least $50 million, with some box office analysts expecting it could top $60 million.
The two films could together generate $200 million over their opening frame. With additional ticket sales from “Mission: Impossible — Dead Reckoning Part One,” “Spider-Man: Across the Spider-Verse” and “Sound of Freedom,” it could be the highest-grossing weekend of the year so far.
This excitement is much needed for the domestic box office after a string of recently released big-budget movies, such as “The Flash” and “Indiana Jones and the Dial of Destiny,” fell short of expectations.
Major movie chains have indicated that ticket sales are strong for both films this weekend and additional shows have been added to accommodate demand.

Some 40,000 AMC Theatre loyalty program members have purchased tickets to see Barbie and Oppenheimer on the same day and the National Association of Theatre owners project that more than 200,000 moviegoers will attend same-day viewings of the two films.
Disclosure: Comcast is the parent company of NBCUniversal and CNBC. More

Multibillion-dollar EV battery plants are crucial to the automotive industry’s future and uniquely positioned to have wide-ranging implications.
UAW leadership has made it clear they plan to consider the plants in the national negotiations with General Motors, Ford Motor and Stellantis.
But the automakers contend the joint venture plants are not legally part of the discussions.

General Motors revealed its all-new modular platform and battery system, Ultium, on March 4, 2020 at its Tech Center campus in Warren, Michigan.
Photo by Steve Fecht for General Motors

DETROIT – In already-contentious labor talks between the United Auto Workers union and major automakers, there’s a wild-card issue hanging over the discussions.
Multibillion-dollar EV battery plants — and their thousands of expected workers — are crucial to the automotive industry’s future and uniquely positioned to have wide-ranging implications for the UAW, automakers and President Joe Biden’s push toward domestic manufacturing.

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But there’s a problem. They aren’t part of the negotiations.
Nearly all of the announced plants are separate joint ventures with their own operations, negotiations and contracts — contracts that aren’t under the umbrella of labor agreements being negotiated with General Motors, Ford Motor and Stellantis ahead of a Sept. 14 deadline. The automakers contend the joint venture plants are therefore not legally part of the discussion.
But UAW leadership has made it a priority to ensure a “just transition” to EVs for auto workers, including the battery plants. Current and former union leaders told CNBC that the battery plants will have to be a priority for the labor organization, regardless of whether they’re directly discussed in the national agreement, for the long-term viability of the union.
“It’s a shell game,” UAW President Shawn Fain said last week regarding the battery facilities. “At the end of the day, they can form joint ventures and still have an obligation to their members, to their workers, and they chose not to do that for one reason, because they want to drive a race to the bottom.”

UAW President Shawn Fain (right) speaks with union member Jerome Buckley outside of General Motors’ Factory Zero plant on July 12, 2023, in Detroit.
Michael Wayland / CNBC

Either side could use the battery plants as indirect leverage in the negotiations, according to current and past negotiators from both sides of the table.

The idea would be to bake in future protections (or restrictions) for EV workers into the labor agreements covering traditional auto workers that could then serve as a model for EV worker negotiations in the future, those experts say.

GM Ultium workers

GM is the only Detroit automaker with a joint venture battery plant in operation and unionized – making it the first in the country to face this particular negotiating dynamic and a landmark plant to set standards for the industry.
GM CEO Mary Barra and other executives have said its up to workers to decide whether or not the battery plants should be unionized as these types of jobs increasingly replace traditional assembly jobs.
However they argue workers at the plants should be paid less than traditional assembly jobs because it’s different work — creating parts for the overall vehicle rather than assembling the final products — traditionally done by third-party suppliers, who typically earn less than workers employed directly by the automakers.
At GM’s Ultium battery plant in Ohio, workers make between $16 and $22 an hour with full benefits, incentives and tuition assistance.
That’s in line with suppliers and “subsystem” work currently being done by UAW members at the major automakers but below the wages of traditional auto workers who assemble vehicles and engines and earn anywhere from $18 an hour to upward of $32 an hour.

General Motors CEO Mary Barra speaks at the General Motors Factory ZERO electric vehicle assembly plant on November 17, 2021 in Detroit, Michigan.
Nic Antaya | Getty Images

Fain has particularly criticized the automakers as well as the Biden administration for utilizing billions in federal tax dollars to subsidize the facilities without committing to better wages and benefits for workers.
“The message to the Biden administration has been simply that if we’re going to do things for these companies to help this transition, labor can’t be left out of the equation,” Fain said outside a Stellantis plant last week.
Fain is withholding a reelection endorsement for President Joe Biden until the union’s concerns about the auto industry’s transition to all-electric vehicles are addressed.
The Detroit automakers have announced investments of roughly $22 billion in eight U.S. battery plants, including a $3.5 billion plant in Michigan that will be a wholly owned subsidiary of Ford, rather than a joint venture.
All of the plants are scheduled to begin operations within the next four years.

Setting a standard

The UAW last week released a white paper detailing some reported safety issues and concerns at the Ultium plant. That report was released two days ahead of the official start to national contract negotiations between the union and the Detroit automakers.
In its white paper, the union suggested the GM national agreement could offer a solution to fixing the problems at the site, calling a forthcoming UAW-GM national labor agreement a “highly successful model for protecting safety that could be applied at Ultium Cells Lordstown and other battery cell manufacturers.”

UAW Local 5960 member Kinethia Black fills the brakes of a 2022 Chevrolet Bolt EUV during vehicle production on Thursday, May 6, 2021 at the General Motors Orion Assembly Plant in Orion Township, Michigan.
Photo by Steve Fecht for Chevrolet

The union could argue for a multicompany agreement or reach a new national pact with the companies and then bargain with Ultium to pattern a deal off the finalized agreement.
While the union wants the battery jobs at the highest pay, it also could model a contract off the subsystem work as well. GM’s subsystem employees currently start at $18.50 an hour and can reach either $22 or $24 an hour, depending on the work.
However, Ultium and the UAW are still “far apart” on a deal for wages and benefits, according to two people familiar with the talks.
GM declined to comment on the white paper, referring questions to its Ultium Cells joint venture with LG Energy Solution.
An Ultium spokeswoman condemned the report and the UAW’s depiction of the plant, calling the UAW’s characterization of the safety concerns “knowingly false and misleading.” More

Satellite internet service provider Astranis said Friday its first commercial satellite in orbit, which was intended to provide coverage to Alaska, has malfunctioned.
The San Francisco-based company says it’s identified the issue and knows how to fix it on future satellites.
Astranis already has plans in motion to bridge the gap in coverage for Alaska with a backup satellite, which is expected to begin providing service in spring.

The Arcturus satellite is seen en route to geosynchronous orbit.

Satellite internet service provider Astranis said Friday its first commercial satellite in orbit, which was intended to provide coverage to Alaska, has malfunctioned. A backup satellite is planned for the spring.
It’s an early setback for a unique approach to providing internet service to underserved communities in remote locations. Astranis announced in May that Arcturus was working “perfectly” and could begin servicing Alaskans as soon as mid-June.

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2 days ago

The company’s Arcturus satellite suffered an issue with both its solar arrays, the company said. The problem “first showed up a couple weeks ago,” Astranis CEO John Gedmark told CNBC. On Monday the company identified the root cause, which was solar array drive assembly made by a vendor and not by Astranis.
“Solar array drives are motors that rotate the solar arrays to make sure they’re always pointed at the sun, and they go transmit that power back into the spacecraft. So if they stop responding and stop rotating … you don’t end up getting the full power that you need,” Gedmark said.
The lack of power from the solar arrays means that its broadband communications “cannot operate at full capacity,” Gedmark said, but Astranis has identified the issue and knows how to fix it on future satellites.
Additionally, Astranis has “full control” of Arcturus, the company said.

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The company declined to name the vendor that supplied the solar array drives. Gedmark confirmed on Friday that – until the solar array issue – the Astranis-built parts were working. The company had successfully completed early demonstrations of connecting to remote locations in Alaska.

A pre-planned backup

The San Francisco-based company, which is taking an alternative approach to providing internet access with its satellites, already has plans in motion to bridge the gap in coverage for Alaska.
Astranis will launch the previously unannounced “UtilitySat” as part of its batch of four satellites that are set to fly later this year. Gedmark described it as “the Swiss Army Knife of satellites.”
Unlike Astranis’ commercial satellites, UtilitySat has more multiple-frequency bands but lower capacity – meaning it provides about three gigabits per second of coverage, rather than the close to nine gigabits per second of the commercial satellites.
“We’ve built into our model that we’re going to put up a number of these on-orbit spares and backup satellites that can be used to bridge capacity [or] for more secondary missions,” Gedmark said.
Astranis expects UtilitySat to begin providing service to Alaska by spring of next year. Gedmark said the company expects to have a “full replacement” in early 2025.
In the meantime, Astranis will continue looking at ways to potentially recover Arcturus or use it as a demo platform.
Gedmark suggested the company could use it to test connectivity “anti-jamming capabilities that we might demonstrate as part of the work that we’re doing with our partners at Space Force.” More

Amazon will invest $120 million in a satellite processing facility at NASA’s Kennedy Space Center in Florida.
Project Kuiper is Amazon’s plan to build a network of 3,236 satellites in low Earth orbit, to provide high-speed internet access anywhere in the world.
The 100,000-square-foot processing facility will serve as one of the final steps before the satellites reach orbit, preparing them for launches on the rockets of ULA and Blue Origin.

An artist’s rendering of the Project Kuiper satellite processing facility in Florida.

Amazon will invest $120 million to build a satellite processing facility at NASA’s Kennedy Space Center in Florida, as the company prepares to launch the first satellites for its Project Kuiper internet network, the tech giant announced Friday.
The facility will be built at the Launch and Landing Facility that was once where NASA landed Space Shuttle missions. The LLF is now leased and operated by Space Florida, which serves as the state’s space economy development arm.

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“I am thrilled that Amazon is the first major tenant to locate [at the LLF],” Frank DiBello, CEO of Space Florida, told CNBC. “It’s a testament to the fact, though, that we view the whole state as an ecosystem supporting space.”
Project Kuiper is Amazon’s plan to build a network of 3,236 satellites in low Earth orbit, to provide high-speed internet access anywhere in the world. The 100,000-square-foot processing facility will serve as one of the final steps before the satellites reach orbit, preparing them for launches on the rockets of the United Launch Alliance and Jeff Bezos’ separately owned Blue Origin.
“We’re going to finish construction at the end of 2024. We’ll be processing our first production satellites through this facility in early 2025,” Steve Metayer, Amazon’s vice president of Kuiper production operations, told CNBC.

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Last year, Amazon announced the biggest corporate rocket deal in the industry’s history to launch its satellites. It has booked 77 launches – deals that included options for more when needed – from a variety of companies to deploy the satellites fast enough to meet regulatory requirements.

The “ultra-compact” version of the Project Kuiper

Amazon hopes to launch its first two Kuiper prototype satellites “in the coming months,” the company said – but that depends on when the rocket that the spacecraft would ride on becomes ready.

According to Metayer, Amazon still plans to fly the prototypes on the inaugural launch of ULA’s Vulcan rocket, which was recently delayed to the fourth quarter. Although Amazon “can work with” the new Vulcan timeline, Metayer said the company is “looking at all options available to us to get the prototypes up in a timely manner.”
The Kuiper prototypes have already moved rides once before, shifting from ABL’s RS1 rocket over to Vulcan.
Project Kuiper currently employs more than 1,400 people, Amazon said. The company’s main Kuiper facilities are near Seattle – in the cities of Redmond and Kirkland. Amazon has other locations in San Diego, Austin, Texas, New York City and Washington, D.C.
“We go where the talent is,” Metayer said. More

Artificial intelligence is making a big effect on the auto industry.
Revenue from sales of autonomous vehicles is anticipated to top $70 billion by 2033, according to Future Market Insights. But self-driving cars powered by AI are not the only change — AI technology is already being infused into vehicle production. 

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13 hours ago

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As part of that industry-wide trend, the BMW Group is now shifting gears to rely more heavily on AI to create a leaner and more efficient manufacturing process. 

Inside BMW’S plant Spartanburg in South Carolina.

Over the past few years, BMW has upgraded its Spartanburg, South Carolina, plant to include new AI capabilities. The factory spans more than 8 million square feet and produces about 60% of all BMWs sold in the U.S. That works out to more than 1,500 vehicles produced daily.
In the body shop, robots weld between 300 and 400 metal studs onto the frame of every SUV. That’s about half a million studs each day applied by machines and now managed by AI. 

The assembly line inside BMW’s plant Spartanburg.

Further down the line, AI technology checks to ensure every stud is precisely placed, according to BMW Group Manager Curtis Tingle. If a stud is misplaced, the system tells the robots to correct it. No human intervention is needed.
“It’s a fully closed loop,” Tingle told CNBC. “[AI] removes the human thinking, the human manual intervention, directly out of the equation.”

Tingle said the new technology has dramatically improved efficiency. “We’re achieving five times of what we thought was even possible before, with what the AI is achieving now.”

A BMW worker at the AI Stud Correction Station.

According to Tingle, the AI stud correction laser has already saved the company more than $1 million a year. The new tech, he said, has allowed BMW to remove six workers from the line.
BMW told CNBC the AI technology is patent pending and was developed inside the Spartanburg plant.
On the factory floor, BMW Group’s IT Project Lead Camille Roberts explains new AI software is helping speed up the automaker’s existing inspection process.
As SUVs move down the line, 26 different cameras throughout the floor snap photos. That’s when, according to Roberts, “the AI kicks in, identifying issues and flagging them for a human to fix,” thus preventing an imperfect vehicle from getting shipped out.

BMW’S AIQX camera inspecting vehicles.

Roberts told CNBC that before the new AI upgrade, human workers couldn’t check every vehicle to the extent they can now, adding, “it’s not really humanly possible to inspect every single car. … The production numbers just wouldn’t meet the global demand.” 
Oliver Bilstein, BMW Group’s vice president of logistics and production control, said there’s still room to run for BMW’s AI technology.
Workers at the plant wear what Bilstein calls factory scanner devices that take measurements and high-resolution images of every centimeter of the factory.
Those images are used to build a 3D “digital twin” of the plant, allowing BMW to instantly make adjustments and understand how it will affect production before it implements a change in the real world, Bilstein said. BMW factory planners around the world can access those detailed plans online. 
With the help of new AI software, the scanning process now takes days instead of months, Bilstein said.
Eventually, this type of AI technology will be able to learn, on its own, how to discover and recommend new ways to make the BMW Group’s automated assembly line even more efficient, he said. More

Familiar faces such as Mark Wahlberg, Kendall Jenner and Ryan Reynolds are behind some of the most popular liquor brands dominating the spirits business.
Demand for spirits, especially high-end brands, is booming.
From movie stars to athletes, models and musicians, celebrities of all types are aligning themselves with top spirits, forging lucrative partnerships within the industry, and even hitting the road to get the word out on their products.

Mark Wahlberg showcases his Flecha Azul Tequila at Palms Casino Resort in Las Vegas, June 15, 2023.
Denise Truscello | Getty Images

As more drinkers seek out luxury spirits, a growing number of celebrities are using their star power, and cash, to elevate premium liquor brands.
Volume sales of spirits brands at the top end of the distilled spirits market increased 4% last year from the year before, according to the Distilled Spirits Council of the United States. Consumers’ willingness to spend more on premium bottles has led to booming sales of liquors such as tequila, which rose 21% in 2022 from the prior year.

As shoppers shell out for pricier bottles, the high-end spirits business has become an enticing venture for those with the right capital and celebrity, said Chris Swonger, president and CEO of DISCUS.
“Celebrity-owned spirit brands have been around for a while,” Swonger said. “But certainly, the increased consumer interest in great distilled spirits has excitedly generated a lot of celebrity engagement and enthusiasm in recent years.”
DISCUS tracks celebrity-affiliated brands and said it has counted several dozen on market.
From movie stars to athletes, models and musicians, celebrities of all types are aligning themselves with top spirits, forging lucrative partnerships within the industry and even hitting the road to get the word out on their products.
The trend has appeared to take hold most in the booming tequila space.

Actor Mark Wahlberg took on the role of bartender this summer, giving patrons a taste of his Flecha Azul Tequila brand at bars and restaurants across the country. The push is part of the brand’s global expansion, which Wahlberg’s business partner Aron Marquez said wouldn’t have been possible without the actor’s involvement.
“Mark has a tremendous network that has opened up a lot of doors for us,” Marquez said in a phone interview with CNBC. “We always felt that our product was superior to anything else on the market but having somebody like Mark amplify it and our message has made people more willing to taste it.”
Marquez started the company in 2020 with Mexican American pro golfer Abraham Ancer. Wahlberg joined the team last year with an ownership stake, and since then, “sales have gone up exponentially,” Marquez said.
“He’s fully invested not only from a capital perspective, but with his time,” Marquez said. The trio plans to continue its promotional tour across the U.S. and then Canada.

Clooney’s Casamigos sets the standard

(L to R) Founders of Casamigos Tequila Mike Meldman, George Clooney and Rande Gerber attend the launch of Casamigos Tequila at Ushuaia Beach Hotel Ibiza in Ibiza, Spain, Aug. 23, 2015.
David M. Benett | Dave Benett | Getty Images

The Flecha Azul team has a lot of catching up to do, as other celebrity-owned brands such as George Clooney’s Casamigos Tequila gain significant market share on the U.S. e-commerce platform Drizly. Clooney was among the first celebrities to show others how lucrative the premium liquor business could be, especially if they look for an established buyer.
Clooney started Casamigos in 2013 and then sold it to spirits conglomerate Diageo in 2017 for $1 billion. The brand now holds a 19% share of the tequila subcategory on Drizly. The platform said it’s the top-selling tequila brand on its marketplace to date.
Other spirits run by the rich and famous have fared well in recent years.
Newer celebrity entries to the tequila space include Dwayne “The Rock” Johnson’s Teremana Tequila, which is the 8th best-selling variation on Drizly, and Kendall Jenner’s 818 Tequila, which has risen to the 15th spot. Johnson and Jenner launched their brands in 2020 and 2021, respectively.
“While consumers can be somewhat skeptical of celebrity endorsements, there seems to be true staying power for celebrity-owned brands that have been able to leverage their star power in an authentic and meaningful way, while also bringing a quality product to market,” said Liz Paquette, Drizly’s head of consumer insights. “Celebrity-owned brands have seen tremendous success on Drizly, often becoming top sellers in their respective categories.”

Celebrity reach goes beyond tequila

Beyond tequila, Drizly said actor Ryan Reynolds’ Aviation Gin is the No. 3 selling gin brand this year and holds a 9% share of the category. Reynolds sold the gin to Diageo in 2020 for a payout of up to $610 million.
Meanwhile, Jay-Z’s D’USSÉ is the second best-selling brand of cognac to date on Drizly. It holds a 14% share of the cognac space on the platform.
Jay-Z, whose given name is Shawn Carter, sold a majority stake in D’USSÉ to Bacardi in February for a payout reportedly worth as much as $750 million.
While many celebrity brands have flourished during the recent rush, others have fizzled as the competition heats up.
Last month, Diageo cut ties with rapper and music producer Sean “Diddy” Combs after he sued the spirits maker, alleging racial discrimination. Combs, who had partnered with Diageo for 15 years, claimed the company typecast his Ciroc vodka and DeLeon Tequila as “Black brands,” and instead poured resources into Clooney’s Casamigos and Reynolds’ Aviation Gin.
Diageo filed a motion to dismiss the lawsuit and ended the partnership.
“Mr. Combs’ bad-faith actions have clearly breached his contracts and left us no choice but to move to dismiss his baseless complaint and end our business relationship,” the company said in a statement to CNBC. “We have exhausted every reasonable remedy and see no other path forward.” More

Cargo revenue was a lifeline for airlines during the Covid pandemic when travel demand plunged.
Airlines ramped up flying this year, which has driven down rates to ship goods by air.
About half the world’s cargo flies in the bellies of passenger planes.

An American Airlines 777 is loaded with cargo at Philadelphia International Airport.
Leslie Josephs/CNBC

Airlines’ cargo revenue is slumping. That’s a sign of good news for travel recovery.
Delta, United and American this month each reported year-over-year declines of about 40% in their second-quarter cargo revenue.

For the first half of 2023, Delta’s cargo business generated $381 million, down from $561 million in the first half of 2022, while American’s cargo unit brought in $420 million compared with $692 million in the first six months of last year. United brought in $760 million from cargo so far this year, down from $1.2 billion a year earlier.

Arrows pointing outwards

Meanwhile, airlines are reporting record revenue, if not earnings, thanks to the rebound in travel demand. That means the business impact of cargo, which once helped prop up airlines’ revenue during the Covid pandemic travel plunge, has faded.
Cargo revenue at United, which generates the most of that business of the three largest U.S. carriers, for the first half of 2023 represented a less than 3% slice of the carrier’s $25.6 billion year-to-date revenue.
That’s a significantly smaller portion than 2020, when cargo revenue made up more than 10% of United’s sales.

Arrows pointing outwards

Through June, cargo revenue made up 1.3% and 1.6% of overall revenue at Delta and American, respectively, down from 3.5% and 12% in 2020.

But it’s not all bad news.
Flying goods around the world was a lifeline for passenger carriers during the pandemic when bookings dried up and travel restrictions forced airlines to slash service abroad.
Normally about half the world’s air cargo flies in the bellies of passenger planes. That reduced cargo capacity during the pandemic helped drive shipping rates up to records, along with strong e-commerce demand, supply chain problems and port congestion.
But travel demand has roared back, particularly for international trips, as customers rush to take vacations abroad that they put off in recent years.
The renewed demand has prompted airlines to add back service. U.S.-Europe flights alone are expected to be the highest in five years.
The added passenger capacity also boosts the world’s supply of space to fly cargo, at the same time that demand for air cargo is waning.
The Baltic Air Freight Index, which tracks worldwide air cargo rates, is down 47% from a year earlier. In May, the latest available data, the International Air Transport Association, said air cargo capacity was up nearly 15% from the same month of 2022 while demand dropped 5%.
Airlines are planning to expand flights this year, too, to capitalize on strong international travel demand, a trend that could further drive down cargo revenue.

Clarification: This story has been updated to clarify that half the world’s air cargo flies in the bellies of passenger planes. More