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Volkswagen on Monday unveiled a new large electric sedan that it says will have well over 300 miles of range in its top-level trim.
Volkswagen’s new ID.7 will serve as a flagship for the automaker’s growing line of mainstream EVs.
Inside, the ID.7 is a roomy high-tech wonderland – as one would expect of a car designed to challenge Tesla’s Model 3 in markets around the world.

Volkswagen’s new ID.7 electric sedan will go on sale in the U.S. next year.
Courtesy: Volkswagen

Volkswagen on Monday unveiled a new large electric sedan that it says will have well over 300 miles of range in its top-level trim when it arrives in the U.S. market next year.
Volkswagen’s new ID.7, as it’s called, will serve as a flagship for the automaker’s growing line of mainstream EVs. The German auto giant said last month that it expects to invest 180 billion euros (nearly $200 billion) in future products and technologies between now and 2027, with more than two-thirds earmarked for “electrification and digitalization.” The company expects about 80% of the VW brand’s sales in Europe, and about 50% of its sales in the U.S., to consist of electric vehicles by 2030.

VW hopes that the new ID.7 will play a key part in that transition. It’s a large sedan with a distinctive hatchback design that allows for more headroom in the rear seats and improves the car’s aerodynamic efficiency.
That aerodynamic emphasis and a brand-new high-efficiency electric drivetrain help the ID.7 achieve what VW says will be strong range ratings: up to 435 miles with the optional 86 kilowatt-hour battery on the European WLTP (Worldwide Harmonized Light Vehicle Test Procedure) test cycle. (The U.S. Environmental Protection Agency’s EV range ratings are often 10% to 20% lower than WLTP ratings.) Base models will come with a 77 kWh battery that will provide an estimated 382 miles of range on the WLTP cycle, the company said.
Both batteries will accept DC fast charging: The standard 77 kWh battery can recharge at up to 170 kilowatts; the optional 86 kWh battery at up to 200 kWs.
All ID.7s will feature a single 282-horsepower motor driving the rear wheels.

All Volkswagen ID.7s will come standard with a large touchscreen and a heads-up display, the company said.
Courtesy: Volkswagen

Inside, the ID.7 is a roomy high-tech wonderland – as one would expect of a car designed to challenge Tesla’s Model 3 in markets around the world.

Beyond the now-ubiquitous large touchscreen, all ID.7s will come standard with a heads-up display that replaces most traditional dashboard instruments with images projected in the driver’s field of vision.
Above the passengers is a large auto-dimming sunroof – standard on U.S.-bound ID.7s – that, like many other features in the car, can be controlled with voice commands.
Production of ID.7s for Europe will begin in the second half of 2023 at VW’s plant in Emden, Germany; production of ID.7s for Chinese customers will begin in China before year-end. ID.7s for North America will also be built in Germany and will begin arriving at dealers in 2024. More

Since June, federal officials have seized $961 million worth of goods over suspected ties to forced labor, Customs and Border Protection officials said.
Companies are receiving detention notices and stand to lose millions of dollars while their goods remain in custody at ports.
Topping the list of detained items in terms of dollar value: electronics, apparel, footwear, textiles and agricultural products.

Inside these boxes: Approximately $20 million worth of detained solar panels by U.S. Customs & Border Protection over suspected ties to forced labor.

Since late June, federal authorities have seized $961 million worth of goods over suspected ties to forced labor, officials told CNBC.
In many instances, companies have no idea their supply chain is tainted, officials said.

CNBC received exclusive access in February to the Port of New York and New Jersey, the largest port on the East Coast, located a few miles southwest of Manhattan. There, millions of dollars’ worth of cargo – from solar panels to bedding to floor tiles – was being held while major companies scrambled to prove their supply chains are clean.
“Our goal for the forced labor laws [is] to prevent merchandise from being made with forced labor in the first place, and we will not rest until we achieve that goal,” said Customs and Border Protection Executive Assistant Commissioner AnnMarie Highsmith, who oversees the Office of Trade.
The enforcement falls under the Uyghur Forced Labor Prevention Act, or UFLPA, signed into law by President Joe Biden in late 2021. The law prohibits imports of goods produced or sourced in the Xinjiang region of China from entering the U.S. economy.
China has come under intense criticism recently for its treatment of the Uyghur minority. Last year, a report by the Office of the United Nations High Commissioner for Human Rights into the Xinjiang Uyghur Autonomous Region of China concluded that “serious human rights violations” against the Uyghur and “other predominantly Muslim communities” have been committed by the country. Beijing denied the claims, calling it “disinformation” and “lies fabricated by anti-China forces.”
According to Highsmith, enforcing ULFPA is a top priority for CBP and the department. 

“This is not just a supply chain security issue for us,” Highsmith said. “It is an economic security issue for the country.”

This is not just a supply chain security issue … it is an economic security issue for the country.

AnnMarie Highsmith
Executive Assistant Commissioner, Office of Trade, U.S. Customs & Border Protection

Highsmith told CNBC that Chinese authorities make doing business in the country even more challenging.
“The Chinese government has taken steps to obfuscate those supply chains and prevent businesses from learning [about] the conditions under which the products are manufactured,” Highsmith said. “So if you’re going into China you have an extra layer of risk to work against.”
Highsmith’s message to American businesses: “know your supply chain.”
But it isn’t that easy.
Surprisingly, the most recent CBP data shows that in terms of value, the majority of shipments detained since last summer were not sent from China. Shipments coming directly from China represented about $80 million worth of goods, while Malaysia accounted for $461 million and Vietnam accounted for $370 million. CBP officials told CNBC those shipments were stopped because the goods were believed to have been made with raw materials from the Uyghur region. 
To date, only about a third of those detained shipments, amounting to 1,090, have been released.

Shipping containers lie stacked on a ship docked at the Port Newark Container Terminal, Newark, New Jersey.
Getty Images

Both the Biden and Trump administrations have amped up economic and trade pressure on China. The White House under President Joe Biden is currently reviewing the penalties imposed under former President Donald Trump, who levied a raft of tariffs on Chinese goods in an effort to bolster U.S.-made goods
During CNBC’s recent visit to the port, 916 40-foot-long shipping containers filled with merchandise worth about $60 million were under investigation, said CBP Assistant Port Director Ed Fox.
“UFLPA allows us to presume [goods] were produced with forced labor, and therefore they’d be excluded from the United States,” said Fox. “So now, [after receiving a detention notice], the importer has to go back through their entire supply chain, and they have to prove that it was not produced with forced labor.”
In addition to $20 million worth of solar panels in lockdown, there was also a 40-foot container filled with bags of xanthan gum – a common food additive used in toothpaste and ice cream – and $15 million worth of vinyl floor tiles. 
Textiles are a big category, too. “The cotton commodity coming out of the Xinjiang region has typically been tied to forced labor,” Fox told CNBC.

Top categories detained, since June 2022

Electronics ($841.2 million)
Apparel, footwear, textiles ($29.6 million)
Industrial and manufacturing materials ($39.1 million)
Agricultural products ($12.4 million)

Source: CBP data

How Customs tracks merchandise

“It’s a combination of intelligence, information that’s gathered from a variety of sources, all feeding into our expert cargo targeting systems,” said Fox.
In some cases, he said goods are sent to a lab for more tests. 
CNBC followed T-shirts from a well-known designer fashion label that were sent to a lab in Newark, New Jersey, to undergo analysis.

A scientist at a U.S. Customs & Border Protection lab in Newark, New Jersey, cuts a T-shirt from a well-known designer fashion label with scissors for testing.

First, a scientist cut samples of the shirts. Then, she examined the fibers under a microscope to see if they were made from cotton. Next, the shirts were sent out to a private lab overseas for isotope analysis that can determine whether the cotton was grown in the Xinjiang region.
“We really have to drill down into the chemical makeup of cotton,” said Stephen Cassata, senior science officer at CBP. “It creates kind of a fingerprint for that particular region.”
The isotope analysis is so precise that scientists can pinpoint the exact geographic location of where the cotton originated from – from one side of a river to the other side of a river, according to Cassata.

During CNBC’s port visit, a 40-foot shipping container full of floor tiles (white boxes) was detained by U.S. Customs & Border Protection over suspected ties to forced labor.

CBP asked CNBC not to reveal the names of any corporation that had items detained because the information was protected by the Trade Secrets Act, which says disclosing it could impact CBP’s ability to enforce the law as well as the company’s reputation.
Officials sent detention notices to the manufacturers, explaining that merchandise was being held. The companies then had 30 days to come back to CBP and prove that the items were produced without forced labor.
While a company works to prove it’s not in violation of the new law, it’s faced with another cost: storage fees. If the company cannot prove within a 30-day period that its products have no ties to forced labor, then the products are either destroyed or reexported and will incur extra fees.

Uncertainty for companies

Public and private companies are now caught in the crosshairs – left struggling with limited information to navigate new laws, and stand to lose millions, according to one attorney.
“I’ve spoken to executives, CFOs, CEOs, and also their investors in their boards because they’re concerned about this,” said Angela Santos, a New York attorney for the ArentFox Schiff firm. “These forced labor laws could cost companies millions of dollars between preparing and conducting the due diligence hiring new staff to handle this.”
Santos says she deals with forced labor issues every day. Her clients include public and private companies in the solar, fashion, energy and automotive industries who have received detentions.
“They just don’t know if their supply chain includes goods produced with forced labor,” she told CNBC. “With regards to addressing the detentions, it can be extremely expensive and time consuming to get goods released.”
According to Santos, companies receive very limited information from customs officials when their goods are detained.
“Often the company does not know how problematic the material or level is,” Santos said. “A company needs to provide chain-of-custody documents for every single tier of the supply chain.”
She says that’s difficult to obtain, because historically, companies only really had a relationship with their first-tier suppliers. But that’s changing – there’s now a push for companies to know their entire supply chain.
“It is a huge burdensome task for companies and can be really problematic for small- and medium-sized companies that don’t have those kinds of resources,” Santos said.
So is pulling out of China the answer?
“Many companies are still reliant on China for their supply chain. And I would know that China is not the only place where forced labor is allegedly occurring,” Santos said. “So, shifting out of China may not be the solution for everybody.” More

Key components from Western countries have been found in the military equipment used by Russian forces in Ukraine.
Research demonstrates the illicit procurement and misuse of semiconductors by overseas entities.
Although the semiconductor companies and government officials CNBC spoke to acknowledge the unauthorized use of American chips is a serious issue, experts can’t agree on who is to blame.

Western companies were quick to shutter operations in Russia after the country’s military invasion of Ukraine last February. But U.S. and European microelectronic tech continues to power the Kremlin’s war.
Key components from more than a dozen Western countries have been found in the military equipment used by Russian forces in Ukraine, according to research from the British academic journal Royal United Services Institute. A separate report from the nonprofit research group Conflict Armament Research analyzed the components of four Iranian-made drones, also known as unmanned aerial vehicles, used by Russia in Ukraine and found the vast majority of the technological devices originated from U.S. companies.

The two reports help demonstrate how multibillion-dollar, decadeslong military-modernization programs in Iran and Russia have depended on semiconductors made by U.S. companies. The research calls into question the two countries’ domestic capabilities when it comes to microelectronics manufacturing and demonstrates the illicit procurement and misuse of semiconductors by overseas entities.
“For Russian systems, I think we have a little bit more than 50% of components that bear the brands of U.S.-based entities,” said Damien Spleeters, deputy director of operations for CAR. “For Iranian systems, it is more than 80%.”

Qaem-5 precision-guided munition, documented by Conflict Armament Research in Ukraine.
Source: Conflict Armament Research

Spleeters said he’s personally traveled to Ukraine on seven separate occasions to investigate and trace the supply sources of the microelectronics used in advanced weapons like Iranian-made drones.
“With just screwdrivers and wrenches and whatnot, we’ll just open these systems and take them apart to access every single component,” Spleeters said.
He and his colleagues take thousands of photos of the parts before rebuilding the weapon in a process he compared to “an IKEA system.”

Russia’s sourcing of equipment, like the UAV drones from Iran, “underscores the challenges” the country is having “replacing equipment lost or expended since the beginning of Russia’s full-scale invasion of Ukraine,” according to RUSI researchers.

Shahed-131 UAV documented by Conflict Armament Research in Ukraine.
Source: Conflict Armament Research

About 70% of the 450 components that RUSI examined from more than 27 different weapons systems, platforms, radios and equipment were manufactured by U.S. companies.
Nearly half of the components came from Analog Devices, Texas Instruments, Microchip Technology, Onsemi, Intel, Xilinx (recently acquired by AMD) and Cypress Semiconductor (now owned by Germany’s Infineon Tech). According to RUSI’s report, products from Analog Devices and Texas Instruments were the most prevalent in weapon systems.
All of these U.S.-listed companies told CNBC they have halted shipments of goods to Russia, Belarus and Russian-occupied areas of Ukraine, in accordance with U.S. restrictions.

Trade restrictions

The U.S. and Iran have a history of trade restrictions that date back decades.
The current economic sanctions restricting imports and exports between the two countries were first imposed in 2012. They’ve been updated several times over the years, banning nearly every type of exchange of goods and services except those meant for humanitarian aid and informational services. Even those exempted categories still require a specialized license from the Commerce Department’s Bureau of Industry and Security.
While many of the harshest sanctions imposed on Russia didn’t start until after the invasion of Ukraine in February 2022, many exports to the country had been restricted since at least 2014 when Russia first violated Ukrainian sovereignty by annexing the country’s eastern peninsula, Crimea.
In the near-decade since, American semiconductor components have still found their way into Russian weapons.

A date marking on a Qaem-5 munition, documented by Conflict Armament Research investigators in Ukraine.
Source: Conflict Armament Research

“For the Russian systems, we see that a lot of these components were manufactured between 2014 and 2021. And for Iranian systems, we found a lot of components made in 2021, 2020 and then we’ve got some components from 2022, as well,” said CAR’s Spleeters.
The more recently dated parts demonstrate how Iran and Russia may have circumvented U.S. restrictions, according to the analyses done by CAR and RUSI.
Even more troublesome, according to that research: Some of the discovered components are classified as dual-use goods, with what are called Export Control Classification Numbers on the Commerce Control List. This means that a chip could be sold legally to a country for consumer or commercial use, only to then be resold to a company in a different country on the secondary market for military use. This type of re-routing of goods is known as transshipment and causes three problems, according to industry experts.
First, it’s more difficult for manufacturers and governments to trace end users, and second, it raises questions about the effectiveness of existing export controls given that many of these products were made recently and would have fallen under stricter regulations. What’s more, it underscores that an outright ban is likely unachievable, given the dual use of certain chips that are needed for commercial products.

Circuit boards of four different items of Russian military equipment found in Ukraine by Conflict Armament Research investigators.
Source: Conflict Armament Research

All seven of the U.S. chipmakers CNBC contacted for comment condemned the unauthorized diversion of their products to countries like Russia and Iran.
A spokesperson for AMD said the company would take “immediate measures per our contract terms” if any of its products were found to be sold to these countries or regions.
Onsemi called export-control violations a “material breach” and said they “may lead to the termination of our contractual relationship with business partners.”
Texas Instruments said it does not “support or condone” the use of its products “in applications for which they weren’t designed.”
A spokesperson for Intel said, “We do not always know nor can we control what products our customers create or the applications end-users may develop,” but stressed the chipmaker “does not support or tolerate our products being used to violate human rights.”
Analog Devices said it takes the unintended misuse of its products “very seriously” and is strengthening efforts to counter these issues by “implementing enhanced monitoring and audit processes and taking enforcement action where appropriate.”
Microchip Technology said it uses “various methods including screening customers against restricted party lists” to help prevent the illegal use of its products.
And Infineon said it has directed global distribution partners to “prevent deliveries and to implement measures that will prevent any diversion of Infineon products or services contrary to the sanctions,” adding that it has reiterated this position “several times.”

Accountability

Although the semiconductor companies and government officials CNBC spoke to acknowledge the unauthorized use of American chips is a serious issue, experts can’t agree on who is to blame.
“I don’t think the bulk of the bad behavior is with the manufacturer … It’s the ultimate buyers where I think you’ve got the real problem,” said Rep. Jim Himes, D-Conn., the ranking member of the House Permanent Select Committee on Intelligence.
“I think our supply chains are really so fundamentally weak,” said Nazak Nikakhtar, a partner at the law firm Wiley Rein and the former assistant secretary for industry and analysis at the International Trade Administration. “What I see all too often is for companies just to say, ‘This is not my problem. I have a good compliance mechanism. This is somebody else’s fault.'”
Others, however, blame what they say is a lack of government oversight.
“The Department of Commerce has been lax about export controls for too long, sending critical supplies like chips to third parties which it knows will turn around and sell those materials to adversary militaries. This must end,” said Sen. Tom Cotton, R-Ark, who serves on the Senate Select Committee on Intelligence. “We should deny export licenses to companies if we even suspect that they are helping our enemies evade U.S. sanctions.”

Electronic components documented by Conflict Armament Research investigators in Ukraine.
Source: Conflict Armament Research

A spokesperson for the Commerce Department said its officials are aware of the transshipment issue with microelectronics and other goods. In response to the war in Ukraine, the department formed what it’s calling a “Global Export Control Coalition,” consisting of 38 international partners, many of which were key trading partners of Russia prior to the invasion of Ukraine.
The group’s purpose is to siphon off Russia’s access to many goods by implementing the same level of trade restrictions across the entire group.
“We’re constantly in communication with our allies and our interagency partners. We’re constantly tracking as much as we can, using every source of information that we have access to, to try and stay one step ahead and close off as many illicit networks as we can,” the department spokesperson said.
Stronger cooperation from U.S. allies could help lessen the degree to which these components end up in the hands of bad actors, according to Nikakhtar.
“Ally engagement in doing press releases and stating intent to do something is one thing, but really, the rubber has to meet the road. Allies need to revamp their system to ensure that the technologies aren’t being exported,” she said. “And the United States needs to lead.” More

Dominion Voting Systems’ $1.6 billion defamation lawsuit against Fox News has been delayed on the eve of its scheduled start date.
The conclusion of the jury selection process and the start of opening statements, which were set for Monday morning, have been pushed to Tuesday morning at 9 a.m. ET.
As recently as Saturday, the possibility of Dominion and Fox avoiding trial seemed as unlikely as ever.

A political display is posted on the outside of the Fox News headquarters on 6th Avenue in New York July 21, 2020.
Timothy A. Clary | AFP | Getty Images

WILMINGTON, Del. — Dominion Voting Systems’ $1.6 billion defamation lawsuit against Fox News has been delayed on the eve of its scheduled start date, an official for the court said Sunday.
The conclusion of the jury selection process and the start of opening statements, which were set for Monday morning, have been pushed to Tuesday morning at 9 a.m. ET, according to a statement from Delaware Superior Court.

Spokespeople for Fox and Dominion did not immediately provide statements when asked for comment after the delay was announced Sunday night.
Dominion, which sells voting machines and election software, claimed it was defamed by Fox Corp. and its cable TV networks after Fox aired false claims that the company had rigged the 2020 election against former President Donald Trump.
Fox has argued that Dominion has not met the legal standard for defamation, and that the statements made about Dominion on its air were protected by the First Amendment.
The Wall Street Journal reported earlier Sunday that Fox has made a last-minute push to settle the lawsuit out of court.
Most defamation cases settle out of court. But as recently as Saturday, the possibility of Dominion and Fox avoiding trial seemed as unlikely as ever. “In the coming weeks, we will prove Fox spread lies causing enormous damage to Dominion. We look forward to trial,” a Dominion spokesman told CNBC on Saturday morning.
Judge Eric Davis, who is presiding over the case, said in a statement from the court that he will formally announce the delay from his courtroom on Monday at 9 a.m. ET. More

“WHOEVER SAID don’t question things? We say question everything.” So began the television commercial that EY aired in 2021 during the Super Bowl, a sports extravaganza known as much for its pricey ads as for the American football they interrupt. On April 11th, under a little too much questioning from its American branch, the professional-services giant decided to pause indefinitely plans for a separation of its audit and advisory businesses. A big sticking point was the division of the tax practice, coveted by both the auditors and the advisers. Plans to publicly list the advisory business and load it with debt to pay off audit partners also looked cleverer when the deal was conceived in 2021 amid low interest rates and frothy share prices.This suspension is a huge blow to EY’s global bosses, who underestimated just what an uphill climb “Project Everest”, the unfortunately codenamed break-up project, would prove. To EY’s split-averse professional-services rivals in the so-called “big four”, Deloitte, KPMG and PwC, it looks like vindication. Joe Ucuzoglu, Deloitte’s global chief, insists the “multidisciplinary model” is the “foundation” of his firm’s success. Bill Thomas, his opposite number at KPMG, says his firm’s decision in the early 2000s to list its advisory arm (since regrown) was “not the right thing”. Bob Moritz, who leads PwC, insists keeping the businesses together is central to his firm’s ability to recruit and retain talent. Yet the case against turning the big four into a biggish eight is far from open and shut. That is because the commercial logic of the split is in many ways getting more compelling—for EY itself, which is still leaving open the possibility of such an outcome one day, and for its three peers. At stake is the future of one of the business world’s most critical oligopolies.The big four are the heavyweight champions of professional services. They dominate the market for audits—checking the books for 493 of the companies in America’s S&P 500 index and a big proportion of European blue chips. They also offer clients a one-stop shop for advice on issues from dealmaking to digitisation. As of last year they together employed 1.4m people and generated $190bn in fees, up from $134bn in 2017 (see chart 1). KPMG, the smallest of the big four, generates three times the revenue of McKinsey, the high priest of strategy consulting.The driving force behind the big four’s growth in recent years has been the rapid expansion of their advisory businesses, which now account for half their combined revenues (see chart 2). In the early 2000s EY, KPMG and PwC all spun off or sold their consulting arms in response to new conflict-of-interest regulations, which barred them from selling advice to audit clients. (Deloitte planned but then abandoned a spin-off.) With little room to expand in audits, however, the giants were soon lured back into the fast-growing business of advice.The rebundling has in many ways paid off. The opportunity to dabble in different service lines has helped the big four entice the bright-eyed young things their businesses rely on. A career in bean-counting looks more appealing when it comes with the opportunity to work on big acquisitions or advise governments on important matters, observes Laura Empson of Bayes Business School in London and formerly of the board of KPMG’s British branch.The big four’s breadth has helped them win over clients, too. Expertise in areas like tax and valuations have helped KPMG and the others solidify their position as the auditors-of-choice for large companies, says Mr Thomas. Widely recognised audit brands, meanwhile, have given a reputational leg-up to the firms’ advisory arms.Mr Moritz argues that the multidisciplinary model has also helped PwC and the other professional-services giants adapt to the digital era. Software and data now underpin nearly all the services the firms offer. The auditors benefit from the technological know-how of the advisors, while the advisors benefit from the counter-cyclical nature of audit work, which can fund investments even during downturns.All that helps explain why some have balked at the idea of a separation. That the firms operate franchise-like structures, with independent partnerships in each country, also makes big shifts in direction like a break up tough to pull off—as EY discovered in America.Yet the case for staying conjoined is steadily weakening as the big four’s businesses shift ever more towards consulting. Auditor-independence rules have turned from an inconvenience into a drag; a particular bugbear of EY’s is its inability to team up with software firms it audits, like Salesforce, to help them roll out their technology to clients. Newish requirements in Europe and elsewhere for companies to rotate their auditors, typically every ten years, have increased clashes between audit and advisory partners over who will serve big customers. Meanwhile, audit has been steadily losing its internal clout, says Ms Empson. Sarah Rapson, deputy head of the FRC, Britain’s audit overseer, worries that the firms are no longer fostering the “culture of scepticism and challenge” that auditing relies on.The problems are on display in a string of much publicised audit snafus. On March 31st APAS, Germany’s accounting watchdog, barred EY’s German branch from taking on new publicly listed audit clients for two years over its failure to spot mischief at Wirecard, a fintech darling turned German fraud of the century. Last year KPMG was fined £14m ($18m) by the FRC for feeding misleading information into a review of two of the firm’s audits. In 2020 Deloitte was fined £15m ($19m) by the FRC for audit failings, too.Those audit flubs have tarnished the consultants by association. They could also led to greater pressure from regulators to invest more in auditing, particularly around fraud detection. At the same time, the advisers are getting increasingly capital-hungry—they are looking to expand into managed services, running functions like compliance, payroll and cybersecurity on behalf of clients, and need new technology to do it. An advisory spin-off would leave the auditors flush with cash while freeing the consultants to pump themselves up with fresh equity from outside their partnerships. Staying together may no longer be good for the clients, either. The increasingly specialist skills offered by the big four to their customers leaves fewer opportunities for junior staff to dabble in different tasks. Few chief executives are eager to receive cybersecurity advice from a fresh-faced chartered accountant.You can go your own wayMr Ucuzoglu of Deloitte warns that auditor-advisor break-ups have “never once played out as intended”. True, the consulting business KPMG listed two decades ago, under the name BearingPoint, went bankrupt in 2009. And the sale of EY’s and PwC’s old advisory businesses to, respectively, Capgemini and IBM, two IT-focused consultancies, resulted in their own messy culture clashes.As EY reels from its graceless tumble down its Everest, it and its three rivals will certainly think twice before embarking on a similar expedition. Still, in the long run the break-up logic is unlikely to go away. Out in the distance they see Accenture, the publicly listed consulting giant that emerged from the rubble of Arthur Andersen, the collapse of which in the early 2000s turned what was the “big five” into the big four. The firm has thrived as a standalone enterprise, now raking in $62bn a year in sales, more than any of the big four. Since listing in 2001 its market value has climbed 20-fold, to $185bn. Such a prize may prove too tantalising to resist. ■ More

Warner Bros. Discovery has renamed its flagship streaming service Max, eliminating HBO from the name.
Executives explained Wednesday the decision was to protect the HBO brand and to highlight the service’s extended reach beyond prestige adult programming.
Calling the service Max sets up Warner Bros. Discovery to challenge Netflix and Disney for global streaming dominance, but that hasn’t been the company’s messaging for the past year.

JB Perrette, President and CEO of Warner Bros. Discovery Global Streaming and Games, speaks onstage during a Warner Bros. Discovery Streaming Press Event on April 12, 2023 in Burbank, California.
Jeff Kravitz | Getty Images

Humble as he may be, Warner Bros. Discovery CEO David Zaslav proved this week he’s definitely a name dropper.
Warner Bros. Discovery unveiled its new streaming service Wednesday, featuring a combination of programming from HBO Max and Discovery+. It will launch May 23 in the U.S., later this year in Latin America, and in the rest of the world in 2024. And it’ll be named “Max” — sans “HBO.”

At surface level, Warner Bros. Discovery’s decision to do away with the name HBO Max is a logical marketing choice. Look deeper, and it starts to resemble a microcosm of an existential tension that lies at the heart of the company — and the media industry more broadly.
The company is trying to compete with Netflix and Disney to be a winner in streaming, while at the same time pushing a message of financial discipline that deprioritizes streaming subscriber additions. It’s a question of quality versus quantity, and Warner Bros. Discovery is trying to play both sides.
“Max is where consumers can finally say, ‘Here’s a service that not only has something for everybody in my household, but something great for everybody in my household,” said JB Perrette, the company’s head of streaming, during a presentation introducing Max on Wednesday in Burbank, California.

HBO Max no more

Perrette explained Wednesday why Warner Bros. Discovery removed the HBO part of the name from the new service. HBO is synonymous with adult entertainment, and Max will lean into offering programming for kids and families, he said.
“We all love HBO,” said Perrette. “It’s a brand that’s been built over five decades to be the edgy, ground-breaking trend-setter for entertainment for adults. But it’s not exactly where parents would most easily drop off their kids. Not surprisingly, the category hasn’t met its true potential on HBO Max.”

In this photo illustration, the Warner Bros. Discovery logo is displayed on a smartphone screen and in the background, the HBO Max and Discovery Plus logos.
Rafael Henrique | Lightrocket | Getty Images

Warner Bros. Discovery executives felt the name HBO actually limited the audience for the streaming service because it scared away potential audiences. They also felt the HBO brand could be diluted by the flood of Discovery’s reality TV programming set to join the platform, such as “Dr. Pimple Popper,” “90 Day Fiance” and various HGTV shows that more readily serve as background TV than fare for office water-cooler conversation.
“HBO is not TV. HBO is HBO. It needs to stay that way,” Perrette said at the event. “We will not push it to the breaking point by forcing it to take on the full breadth of this new content proposition had we kept the name in the service brand. By doing so, we’ll better elevate and showcase our unparalleled array of other content and brands that will be key to broadening the appeal to this enhanced product.”
The company’s reasoning is rational. HBO appeals to a certain audience, but also doesn’t appeal to a certain audience. HBO fans won’t unsubscribe from the service in response to the name Max, but some people who were scared off by HBO may now sign up once the adult brand has been obscured by the deluge of distinctly un-HBO content coming to the service.

Evolution of streaming

When HBO Max initially launched, AT&T and WarnerMedia executives emphasized to subscribers that this new app was, first and foremost, the home of HBO. Now, about 80 million subscribers later, that point is less important. Those who want HBO already know where to find it, and HBO Max will simply morph into Max on most platforms.
Streaming is entering its “teenage” years, Perrette said, and Max as a name makes more sense to keep adding subscribers globally in a lower-growth world.
This would be the end of the story if Warner Bros. Discovery’s stated goal was to maximize (no pun intended) the number of subscribers who sign up for Max.
That was every media company’s goal when Zaslav agreed to merge Discovery with WarnerMedia in 2021. But according to Zaslav, that’s no longer the priority.
“I’d rather have 100 million subscribers or 150 million subscribers and have it be really profitable than try and stretch for some big number, and in the end, lose money,” Zaslav told CNBC’s Julia Boorstin after the presentation Wednesday. “We take a look at what people watch on Max and we can see exactly what they like and exactly what they don’t. And some of the stuff they’re not watching, we can put it on a free AVOD [advertising-supported video on demand] platform, and some of the stuff that they’re not watching, we can keep it nonexclusively on Max, but we could also sell it to others.”
“We are relentlessly focused on creating great content and monetizing in every way possible,” he said.

The media hedge

With its new streaming strategy — and Max at the center — Warner Bros. Discovery is hedging its bets.
The company is keeping Discovery+ around for customers who are happy to pay $5 or $7 for just Discovery’s programming. Perrette said the company doesn’t “want to leave any of its profitable subscribers behind.”
Zaslav also alluded to Warner Bros. Discovery’s free ad-supported service, which the company has said is coming later this year.
Warner Bros. Discovery could have kept HBO Max around, too. For those customers who wanted both Discovery+ and HBO Max, it could have offered a bundle for a discounted price. That’s been Disney’s strategy, which offers bundled ways to mix and match Hulu, ESPN+ and Disney+.
Instead, the company loaded up one service with everything it has, which may also eventually include some news from CNN and sports such as NBA or NHL games. Zaslav said Wednesday he’d have more details on that “in the coming months.” Don’t forget, Zaslav killed off CNN+ as a standalone streaming option last year just about a month into its existence.
Warner Bros. Discovery is building Max as a one-size-fits-all option so that it has the scale to stick around in a post-cable world that’s coming increasingly quickly.
But Zaslav is also telling investors he’s fine with limiting Max’s growth. It’s more important for him to make money than to compete with Disney and Netflix to become the world’s largest streamer.
It’s a delicate balance: Disney, Paramount Global, Comcast’s NBCUniversal and even Netflix are all battling the same forces. Investors turned on the narrative of pursuing streaming growth at all costs last year, cutting the valuations of many media and entertainment companies in half.
What’s happening now is, at its core, a hedge. The media industry knows streaming is the future but growth has slowed. Zaslav has championed the value of the traditional pay-TV bundle while criticizing the previous WarnerMedia regime’s profligate spending on streaming. He’s trying to give investors a new reason to get excited about Warner Bros. Discovery. That message, Zaslav hopes, is free cash flow generation.

David Zaslav, President and CEO of Warner Bros. Discovery talks to the media as he arrives at the Sun Valley Resort for the Allen & Company Sun Valley Conference on July 05, 2022 in Sun Valley, Idaho.
Kevin Dietsch | Getty Images

“Ultimately, I’m a free cash flow guy,” Zaslav said Wednesday. “We want great talent, but ultimately, if we’re not making money on subs, if we don’t have any ARPU [average revenue per user], we’re not helping ourselves and we’re not helping shareholders.”
There are some indications he could be on to something. Warner Bros. Discovery shares are up nearly 50% this year after falling about 60% last year.
But when you take a two-part name — HBO and Max — and keep just the Max, the implication is “big” over “quality.”
That was AT&T’s message. It hasn’t been Zaslav’s message until now.
WATCH: CNBC’s full interview with Warner Bros. Discovery CEO David Zaslav

Disclosure: CNBC’s parent company Comcast owns NBCUniversal and co-owns Hulu. More

The Federal Aviation Administration issued a Starship launch license to Elon Musk’s SpaceX.
SpaceX aims to launch Starship as soon as Monday from its private facility in Texas along the Gulf Coast.
Starship is designed to carry cargo and people beyond Earth and is critical to NASA’s plan to return astronauts to the moon.

A Starship prototype is seen stacked on top of a Super Heavy booster at the company’s launch facility near Brownsville, Texas.

The Federal Aviation Administration issued a Starship launch license to Elon Musk’s SpaceX, a crucial final regulatory step that clears the company to attempt an orbital launch of its towering rocket for the first time.
“After a comprehensive license evaluation process, the FAA determined SpaceX met all safety, environmental, policy, payload, airspace integration and financial responsibility requirements. The license is valid for five years,” FAA said in a statement.

SpaceX, with the FAA license now in hand, aims to launch Starship as soon as Monday from its private facility in Texas along the Gulf Coast.
“SpaceX is targeting as soon as Monday, April 17 for the first flight test of a fully integrated Starship and Super Heavy rocket from Starbase in Texas. The 150-minute test window will open at 7:00 a.m. CT,” SpaceX said in a statement.

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The company recently stacked Starship prototype 24 on Super Heavy booster prototype 7 in preparation for the launch. Together they stand nearly 400 feet high. SpaceX in February completed a test firing of the Super Heavy booster, which has 33 Raptor engines at its base, in one of the final technical steps toward the launch.
SpaceX for several years has been building up to the first orbital flight test of its Starship rocket, with company leadership stressing the experimental nature of the launch. While SpaceX had hoped to conduct the first orbital Starship launch as early as summer 2021, delays in progress and regulatory approval have pushed back that timeline.
The rocket is set to lift off from SpaceX’s development facility near Brownsville, Texas, before heading east across the Gulf of Mexico, according to 2021 filings that revealed the flight plan. The ultimate goal of the mission is to reach orbit, with the rocket aiming to travel most of the way around the Earth and splash down in the Pacific Ocean off the coast of Kauai, Hawaii.
Starship is designed to carry cargo and people beyond Earth and is critical to NASA’s plan to return astronauts to the moon. SpaceX won a nearly $3 billion contract from the space agency in 2021 to use Starship as a crewed lunar lander. More

Best Buy is laying off hundreds of store workers as more of its shoppers buy online and sales of consumer electronics weaken.
Retailers, including Best Buy, have struck a cautious tone as shoppers pull back in some categories like consumer electronics.
Best Buy said in a statement it is “evolving our stores and the experiences we offer to better reflect the changes in customer shopping behavior.”

Best Buy logos and store in South Edmonton Common. Friday, May 20, 2022, in Edmonton, Alberta, Canada.
Artur Widak | Nurphoto | Getty Images

Best Buy said Friday that it is laying off hundreds of store workers across the country as more of its shoppers buy online and sales of consumer electronics weaken.
A spokesperson for the company confirmed the layoffs, but declined to share the specific number. The news was first reported by The Wall Street Journal.

In a statement, Best Buy said it is “evolving our stores and the experiences we offer to better reflect the changes in customer shopping behavior, as well as how we organize our teams to ensure we continue to provide our expertise, products and services in the best way possible.”
The retailer framed the job cuts as a shift in its priorities, saying Best Buy plans to add thousands of customer-facing employees and invest in growing areas, such as its Totaltech membership program and its health business.
As of the end of January, Best Buy had more than 90,000 employees in the U.S. and Canada. That’s a drop from the nearly 125,000 workers that it had in early 2020, according to company financial filings.
The jobs market in the U.S. remains strong and labor market continues to be tight. The unemployment rate was 3.5% as more people got back to work after the Covid pandemic, according to the recent jobs report from the Labor Department.
Yet retailers, including Best Buy, have struck a cautious tone as shoppers pull back in some categories like consumer electronics. Retailers have seen softer sales of discretionary merchandise as consumers pay more for necessities because of inflation and spend more on services again, such as booking flights or dining at restaurants.

Best Buy is also following a period when many of its customers sprang for new laptops, kitchen appliances and home theater systems during the early years of the pandemic. Much of what it sells are big-ticket items that people don’t replace frequently.
Digital sales have become a more meaningful part of its business, too. About a third of Best Buy’s U.S. sales came from its online business in the fiscal year that ended in late January compared to 19% in the fiscal year that ended in late January 2020, the company’s CEO Corie Barry shared on its fourth-quarter earnings call. Sales made by phone, through chat or virtually have also grown, she said.
Still, Best Buy’s roughly 900 stores in the U.S. remain an important part of shift: Barry said more than 40% of online sales are picked up in stores. More