Here is a roundup of the latest news concerning the COVID-19 pandemic in addition to announcements from local, state, and federal governments, as well as international channels. To share a business or nonprofit story, please send us a message.
Ford and Mahindra End Joint Venture Discussions
Ford Motor Co. in Dearborn and India’s Mahindra & Mahindra, which has its North American headquarters in Auburn Hills, have decided they will not complete a previously announced automotive joint venture.
The decision follows the passing of the Dec. 31 “longstop,” or expiration date of a definitive agreement the organizations entered into in October 2019.
According to the companies, the outcome was driven by changes in global economic and business conditions – caused, in part, by the global pandemic – over the past 15 months. Those changes influenced separate decisions by Ford and Mahindra to reassess their respective capital allocation priorities.
Ford said its independent operations in India will continue as is. The company is actively evaluating its businesses around the world, including in India, making choices and allocating capital in ways that advance Ford’s plan to achieve an 8 percent company adjusted EBIT margin and generate consistently strong adjusted free cash flow.
Ford’s plan calls for developing and delivering high-quality, high-value, connected vehicles – increasingly electric vehicles – and services that are affordable to an even broader range of customers and profitable for Ford. The company says it is moving quickly to:
- Turn around its automotive business – competing like a challenger while simplifying and modernizing all aspects of the company.
- Grow by capitalizing on existing strengths, disrupting the conventional automotive business, and partnering with others to gain expertise and efficiency.
Quality Roots Opens its Second Michigan Dispensary
Michigan-based Quality Roots has opened its first cannabis dispensary in southeast Michigan and its second in the state overall.
The new dispensary is located in Hamtramck. The company’s first outlet is in Battle Creek. Stores in Berkley, Royal Oak, Westland, and Pontiac, as well as growing facilities are planned.
Quality Roots is run by CEO Aric Klar. He is joined on the leadership team by his brothers Jonathan and Michael, and their father, Mark. The Schostak family is an operational partner in Quality Roots.
Klar’s parents owned one of the largest, independent pharmacy operations in Michigan. Aric Klar says he learned about patient management, team management, and supply chain while helping to grow the business in a regulated industry. In 2014, he helped his parents exit the pharmacy portfolio through a deal with Walgreens.
In addition to his work with that family business, Klar started an independent toy store, Toyology Toys, that has retail locations in Michigan and a distribution platform that serves thousands of other stores across the country. The company focuses on trends-based products, which Klar says translates well to the rapidly changing cannabis industry.
“(Quality Roots) is focused on building a branded experience for consumers, this allows us to be a cannabis education platform that happens to sell both medicinal and recreational cannabis products,” Klar says. “Quality Roots is providing quality assurance in growing and selling cannabis that meets only the same high standards of safety, efficacy, and potency that the customers have come to expect on the dispensary shelves.”
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U-M Survey: Consumers See Economic Gains on Distant Horizon
Despite the ongoing surge in COVID-19 infections and deaths, consumer sentiment improved according to the results of a December survey conducted by the University of Michigan in Ann Arbor.
The Consumer Sentiment Index was 80.7 in December, up from 76.9 in November, but well below last December’s 99.3. The gains reflect improvements in the Expectations Index (74.6, up from last month’s 70.5 but below last year’s 88.9). The Current Conditions Index rose to 90.0 in December, between last month’s 87.0 and last year’s 115.5.
The improvement, according to analysts, was due to Democrats becoming much more positive and Republicans much more negative about long-term prospects for the national economy.
Twice as many Democrats as three months ago expected a continuous expansion over the next five years (54 percent up from 27 percent), while that same favorable expectation was nearly cut in half among Republicans (32 percent down from 60 percent). The near-term outlook for the national economy remained unfavorable due to an expected rise in stay-at-home orders and business shutdowns due to the surging COVID-19 virus.
“Although the rollout of the COVID vaccine has been greeted as the beginning of the end, the end of the pandemic is still on the distant horizon in terms of a return of normalcy for consumer behavior,” says Richard Curtin, a U-M economist who directs the surveys. “Precautionary motives will continue to shape most economic and personal behavior.
“While the recent passage of more relief payments and boosted jobless benefits are welcome, they will hardly offset the economic impact of renewed regulations due to the resurgence in COVID inflections and deaths. It would compound past mistakes to think that future actions could wait until the short duration of the current financial aid package runs its course.”
The typical pattern over the past half century, according to Curtin, has been that consumers’ assessments of their personal finances and the national economy followed similar trends. Current assessments of the economy have fallen more than twice as much as consumers’ overall judgments about their current finances.
The much smaller falloff in personal finances reflects a growing offset: Some households that have been devastated by job and income losses due to the pandemic were largely offset in the overall figures by other households who have benefited from continued employment by working at home throughout the pandemic. Along with rising home and stock prices, this has caused a significant increase in income and wealth inequality since the start of the pandemic, Curtin says.
Six-in-10 consumers participating in the survey made spontaneous references to the pandemic’s negative impact on jobs. When directly asked about how they expected the national unemployment rate to change in the year ahead, there was a good deal of uncertainty as increases, decreases or an unchanged unemployment rate were nearly equally common. Six months ago, consumers more frequently expected declines in joblessness, but those positive views have been reduced as they have reluctantly concluded that the virus will persist longer than they had initially anticipated, Curtin says.
To review the full survey report, visit here.