Layoffs

Talks between Boeing, striking union stall without a deal

 Contract talks between Boeing and its largest union stalled on Wednesday after both sides failed to reach an agreement on key issues in the presence of federal mediators.

"While we remain open to further discussions, whether directly or through mediation, currently, there are no additional dates scheduled," the International Association of Machinists and Aerospace Workers (IAM) said in a post on X.

Anne Wojcicki, CEO and co-founder of 23andMe said she was “surprised and disappointed” following the abrupt resignation of all seven independent directors from the genetic testing company on Tuesday. The exodus marks a significant setback for Wojcicki’s plan to take the Bay Area company private.

Despite the directors’ departures, Wojcicki remains committed to her strategy. 23andMe, which she co-founded in 2006, went public in 2021 through a special purpose acquisition company at $10 per share but has since seen its stock plummet to below $1 per share since December.

In March, the board formed a special committee to explore alternatives for the company. Wojcicki’s proposal in July to take 23andMe private was rejected by the committee.

The headquarters of the biotechnology company 23andMe is seen in Sunnyvale.

Laura Morton/Special to The Chronicle

The directors, in their resignation letter, stated, “After months of work, we have yet to receive from you a fully financed, fully diligence, actionable proposal that is in the best interests of the non-affiliated shareholders. We believe the Special Committee and the Board have provided ample time for you to submit such a proposal.”

Included among the resigning directors were notable venture capitalists Sequoia Capital’s Roelof Botha and xFund’s Patrick Chung. They cited a lack of progress over the past five months, adding “it is also clear that we differ on the strategic direction for the Company going forward” as reasons for their immediate resignation.

The company, based in South San Francisco, experienced a financial loss of $69.4 million while generating a revenue of $40.4 million in the quarter ending June 30.

This mass resignation leaves Wojcicki as the sole remaining board member. However, in an employee memo obtained by CNBC, Wojcicki asserted that privatization represents “the best opportunity for long-term success.” She also announced that a search for new independent directors would begin this week.

Last week, 23andMe agreed to a $30 million settlement, plus three years of security monitoring, to resolve a lawsuit over a data breach affecting 6.9 million customers. The breach targeted primarily customers of Chinese and Ashkenazi Jewish ancestry and led to the sale of their data on the dark web, according to the claim.

23andMe described the settlement as fair, adequate, and reasonable in a court filing. The company, citing “extremely uncertain financial conditions,” also requested the judge to pause arbitrations for tens of thousands of class members until the settlement is approved or they opt out.

In its statement, 23andMe said it anticipates that approximately $25 million of the total cost will be covered by cyber insurance.

Wojcicki’s resolve comes after her sister, former YouTube CEO Susan Wojcicki, died last month after a two-year battle with cancer.

This loss came less than six months after Susan Wojcicki’s 19-year-old son, Marco Troper, died of an accidental overdose in a UC Berkeley dormitory.

Anne Wojcicki, CEO and co-founder of 23andMe said she was “surprised and disappointed” following the abrupt resignation of all seven independent directors from the genetic testing company on Tuesday. 

Michael Macor/The Chronicle

Here is the full text of Wojciciki’s memo:

Team 23,

We wanted to let you know that the 23andMe Board issued a press release this afternoon stating that all of the independent directors have resigned from the Board, effective immediately.

I am surprised and disappointed by the decision of the directors to resign.    

I have been committed to the mission of 23andMe for the last 18 years and believe strongly in the potential for genetic information to transform healthcare and the therapeutic discovery process. I remain committed to our customers, my employees, and our stockholders to achieve our goals.  I continue to believe that we will be better positioned to achieve our mission and goals outside of the short-term pressures of the public markets and that taking 23andMe private will be the best opportunity for long-term success. 

 Chinese technology company Alibaba (9988.HK), opens a new tab released on Thursday for new open-source artificial intelligence models and text-to-video AI technology, intensifying its efforts to compete in the booming area of generative AI.

The open-source models, numbering more than 100, come from Alibaba's Qwen 2.5 family, its latest foundational large language model released in May.

Chinese technology companies, like their U.S. counterparts, have been investing heavily in generative AI, with firms racing to develop robust product portfolios and diversified offerings.

While competitors such as Baidu (9888.HK), opens new tab and OpenAI have primarily adopted closed-source approaches, Alibaba has embraced a hybrid model, investing in both proprietary and open-source development to broaden its AI product range.

Its new models range from 0.5 to 72 billion parameters - the variables that determine an AI model's capability and performance - in size, offering proficiency in mathematics, coding, and support for over 29 languages, Alibaba said in a statement.

The models aim to cater to a wide array of AI applications across various sectors including automotive, gaming, and scientific research.

Alibaba on Thursday also unveiled a new text-to-video model as part of its Tongyi Wanxiang image generation family, joining a growing number of Chinese tech firms entering this emerging market.

The move puts Alibaba in direct competition with global players such as OpenAI, which has also shown interest in text-to-video technology.

In August, ByteDance, owner of TikTok, launched its text-to-video app Jimeng AI on Apple's (AAPL.O), opens new tab App Store for Chinese users.

The United Auto Workers union is eying multiple U.S. strikes against French-Italian carmaker Stellantis (STLAM.MI), opens new tab about a year after a national walkout cost the Detroit Three automakers billions of dollars and idled 50,000 workers.

Accusing Stellantis of breaking its contract promises, UAW President Shawn Fain on Tuesday night warned that several union local chapters were laying the groundwork for strikes that could collectively shut down the automaker.

The latest UAW threats follow last year's six-week strike that cost Stellantis about 750 million euros ($834.08 million) in profit. The union also hit General Motors (GM.N), opens new tab and Ford (F.N), opens new tab during the historic 2023 walkout, and drew U.S. President Joe Biden to the picket line to show his support for the striking workers.

Stellantis' North American operations have been struggling, and the strike threat looms as the race for the White House between Democrat Kamala Harris and Republican Donald Trump heats up. Harris, who is currently the U.S. vice president, has been endorsed by the UAW.

Union strikes outside the four-year contract negotiations are unusual, and a large walkout at Stellantis just one year after its labor deal was penned, in an election year, would be unprecedented.

"The union has picked the perfect time to target Stellantis because the North American group is likely at its weakest point," said Sam Fiorani, vice president at research firm AutoForecast Solutions.

Fain said on Tuesday that 28 locals, covering tens of thousands of workers, had filed grievances against Jeep parent Stellantis and that 18 were at or near the point where they could call for strike authorization votes - with at least one expected in the next few days. Fain, who rose through the union's ranks after working as an electrician for Chrysler, brought a more combative approach and a fresh leadership team to the union after his election in 2023.

The location and timing of the first strike authorization vote is still uncertain, but locals that filed grievances last month included plants in Toledo, Ohio; Kokomo, Indiana, and several in Michigan. The UAW has said roughly 98% of Stellantis' membership is covered through those grievances, making the potential strikes as powerful as a nationwide walkout.

Late on Tuesday, Stellantis said that the union leader had not offered any data or information to support his claims.

"(Fain) continues to willfully damage the reputation of the company with his public attacks which is helpful to no one including his members," Stellantis said in a statement. "We would all be better served if these issues were addressed across the table with productive, respectful, and forward-looking dialogue. A strike does not benefit anyone."

Fain fired back on Wednesday in a letter to Stellantis that was seen by Reuters.

"Under CEO Carlos Tavares, Stellantis is quickly turning into a global case study in corporate mismanagement," he said, offering several dates to discuss the issues.

Asked for comment on Wednesday, Stellantis said it stood by its earlier statement.

The UAW's grievances center around product and investment commitments made during the contract negotiations last autumn. Delays of a planned multibillion-dollar investment into a new battery plant and factory in Belvidere, Illinois, and possible plans by Stellantis to move production of the Dodge Durango SUV out of the U.S. have emerged as main sticking points for the UAW.

Stellantis said it has not confirmed plans to move the Durango. The union said the company has never denied it plans to move production of the SUV, according to the letter sent on Wednesday.

The contract signed between the UAW and the automaker allows the company to delay financial commitments if market conditions worsen.

TROUBLES IN U.S. MARKET

Stellantis' U.S. business has faltered over the past year, and dealers and shareholders have publicly called out its lagging sales, bloated inventories, and tumbling share price.

Tavares has said he is focused on improving Stellantis' performance in the U.S. and stated a willingness to shut down brands globally if they do not make money. Last month, he visited the U.S. to develop a plan to improve U.S. operations.

Still, the automaker's U.S. vehicle inventories are larger than those of a year ago before the strike, which could protect Stellantis from feeling any immediate pain if workers hit picket lines, analysts said. Its 77-day supply of vehicles at the end of August was up 18 days from the same time last year, according to industry firm Cox Automotive.

However, the UAW could target plants that make higher-demand vehicles, like Jeep SUVs, Fiorani said. A more targeted approach would allow the UAW to spend less money supporting striking workers.

A new collective strike now would capture the attention of the White House in the run-up to the Nov. 5 U.S. election. Michigan is a battleground state, which both Harris and Trump have visited several times.

Officials with the Harris and Trump campaigns could not immediately be reached for comment.

Fain said the UAW in last year's deal won the right to strike over product and financial commitments. However, that could be tested in court, said Art Wheaton, a labor professor at Cornell University.

A strike authorization does not necessarily mean a strike will occur.