TikTok Dances for Congress

Plus: The EV price wars are revving up. ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

January 31, 2023

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TOGETHER WITH

Good morning.

This is your captain speaking. We’re expecting an exceptionally smooth flight today thanks to heavy financial tailwinds. On Monday, three-fourths of JetBlue’s pilots voted to approve a new contract that would increase wages by over 20% in the next 18 months.

The agreement comes as airlines face a shortage of professional aviators just as post-pandemic travelers surge back into airports. While the deal won’t be finalized until — or unless — regulators approve JetBlue’s acquisition of Spirit Airlines, the pilot’s union says the new contract will be worth over $463 million. Talk about your friendly skies.

Morning Brief

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January was a rough month for UK cyber security.

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TikTok finally heads to Washington.

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Ford is engaging in Tesla’s price-cutting war.

Cybersecurity

JD Sports Hack Highlights UK Cyber Security Concerns

Fancy a firewall, mate?

Manchester-based retailer JD Sports is the latest victim in a string of cyber attacks on major UK entities this month. So far, hackers have descended upon retail, postal delivery, fast food, and news outlets.

Of Many Black Hats

On Monday, JD Sports announced that the data of 10 million customers — including names, addresses, emails, phone numbers, and the last four digits of payment cards — were exposed in a recent cyberattack. The company said it doesn’t save full payment info and that there is no reason to believe customers’ online passwords have been obtained. So for now, patrons can rest easy.

The hack might have limited effects on JD’s bottom line. People still need a place to get their Air Jordans, and the company expects to surpass $1 billion in sales for the first time next fiscal year, but the pilfering speaks to growing concern over cyber attacks in the UK. Though not quite fire sale territory, it appears hackers are diversifying their victims:

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Royal Mail was hacked in mid-January, causing severe disruptions to its international shipping operations and exacerbating the fallout of ongoing staff strikes that had already cost the company more than $200 million. Small businesses and online merchants were hit the hardest with one jeweler telling the Financial Times she lost “hundreds of pounds” refunding customers who never received their orders. Though not 100% confirmed, some believe the attack was handled by LockBit, a Russia-linked hacker group that specializes in ransomware.

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Just last week, a similar ransomware attack on the fast food industry forced the shutdown of 300 KFCs, Taco Bells, and Pizza Huts across the UK. Luckily parent company Yum Brands was able to contain and thwart the hack, and the stores reopened the next day.

Gone Phishin’: In 2022, the UK was hit by the third most cyber attacks, right after Canada and the US, according to NordLocker. The UK National Cyber Security Centre has warned that more spear-phishing scams from Russian and Iranian state-sponsored groups are likely to come. Spear-phishing is a very targeted form of cyber attack, often involving emails that appear to be from people or businesses you’re familiar with. It’s slightly more clever than the old Nigerian Prince scam. A word of advice, if your “boss” sends you an odd email asking you to open a link and enter sensitive information, don’t do it. Your real boss will thank you for keeping the company out of harm’s way.

-Griffin Kelly

Tech

TikTok CEO to Testify Before Congress

It’s a dance TikTok’s American Big Tech rivals are all too familiar with.

TikTok is sending its CEO Shou Zi Chew to testify before the House Energy and Commerce Committee on March 23, marking the first time a chief executive for the company — which is owned by Chinese firm ByteDance — will publicly and directly answer questions from US lawmakers.

Trade War Wounds

Cast your mind back to 2020 and you’ll remember former President Trump was waging a fairly sparky trade war with China. Trump singled out two major Chinese business entities in expressing his ire: Huawei, and TikTok. While TikTok insisted its servers are not based in China, legitimate questions about the app’s data safety were drowned out by the geopolitical theater of Trump duking it out with Xi Jinping, culminating in an ultimately unenforceable ban.

TikTok enjoyed a brief respite after the 2020 election, but questions about its security have steadily built back up, especially after BuzzFeed reported in June last year that US user data was accessed from China:

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Chew will be asked to answer questions on TikTok’s “consumer privacy and data security practices, the platforms’ impact on kids, and their relationship with the Chinese Communist Party,” according to a statement from the committee.

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Lawmakers will be wrestling with Section 230, a law that shields platforms from paying for criminal content posted by users. TikTok’s saving grace could be a niche set of laws called the Berman Amendments, a Cold War relic that forbids the president from hindering “informational materials” from hostile nations.

Honor Unbound: TikTok arguably came out of the Trump era unscathed compared to Huawei — after all, no TikTok execs spent three years under house arrest. But at least an offshoot of Huawei had a good year. Huawei spun out its Honor smartphone brand in November 2020, and last year, while rivals saw sales shrink, Honor’s China shipments grew by 34%. Meanwhile the Biden administration is mulling tightening up sanctions on Huawei even more, sources tell The Wall Street Journal. Our commiserations to Huawei, losing the breakup is never fun.

– Isobel Asher Hamilton

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Electric Vehicles

Ford Slashes Price of Mustang Mach-E

(Photo credit: MrWalkr/Wikimedia Commons)

Ford and Tesla want to charge you less so that you’ll be charging more.

On Monday, the Detroit auto giant announced it is dropping the price of its electric Mustang Mach-E crossover by up to nearly 9%, depending on the model, just weeks after Tesla cut prices on several models in its fleet to stay competitive in the exploding EV market. Who says inflation is persistent?

Price Wars II: Electric Boogaloo

Elon Musk made the first move. Just over two weeks ago, Tesla slashed the price of its baseline Model Y by about 20% to $53k, and its high-performance Model 3 sedan by 14% to roughly $54k. The price cuts pushed Tesla’s products closer to the price range of Ford’s mid-tier Mustang Mach-E models, placing both cars below the $55k cap that gives customers access to a $7,500 federal tax credit.

Analysts instantly expected Tesla’s sudden change of pace (and no, we don’t mean this one, or this one… or any of these ones) to ripple across the industry. Ford, which just increased EV prices over the summer, was the first to buckle, though the legacy automaker still has a lot of ground to clear to catch the industry’s pace-setter:

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Ford technically has six different tiers of its Mach-E car, with the price cuts averaging around 6% across the models, accounting for a “center cut” discount of roughly $4,500. The cheapest model will now run at $46k while the one with every bell and whistle included will run $64k.

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Last year, Ford was the number two EV seller in America, according to Motor Intelligence. But it still only held for some 8% of the US market while Tesla controlled a dominant 65% (down from 72% the year before); EV sales still only accounted for roughly 6% of all US car sales in 2022.

Van Life: It’s not all roses in the land of EVs. Also on Monday, UK-based EV van startup Arrival, which scored a $15 billion valuation just two years ago, laid off half of its remaining workforce, roughly 800 employees, and appointed a new CEO. The company says it does not expect production to begin until the second half of next year, though in December it also issued a “going concern” warning that its cash reserves were unlikely to last the next 12 months. Elon Musk has a lot of things keeping him up at night, but Arrival isn’t one of them.

– Brian Boyle

Extra Upside

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Where’d I Put That? An Australian mining company apologizes after losing a tiny, but potentially harmful radioactive capsule.

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We’re Gonna Need a Bigger Wallet: A blogger who cooked and ate great white shark got hit with a $18,500 fine.

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Disclaimer

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