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    The Treasury Department is projecting government borrowing of $947 billion in the current July-September period, which would be a record for the quarter but down from the all-time high of $2.75 trillion in this year's second quarter. Treasury officials also announced Monday that the government plans to borrow $1.22 trillion in the October-December period. Those amounts include $1 trillion in expected borrowing to finance another economic stimulus package, which is tied up in negotiations between Democrats and Republicans. Treasury officials said the $1 trillion amount, spread over this quarter and the October-December period is essentially a place holder since both sides remain far apart on the issue of how much support is needed for the economy, on top of the more than $3 trillion Congress has already provided. The House in May approved a $3.5 trillion measure which the Republican-controlled Senate has refused to take up. Instead, GOP senators have indicated they favor a smaller $1 trillion package. The $947 billion in projected borrowing for the current quarter surpasses the old mark for the period of $530 billion set in 2008 when the government was having to spend large sums to deal with the 2008 financial crisis. The Congressional Budget Office is projecting that the deficit for this year will soar to $3.7 trillion, far surpassing the previous record deficit of $1.4 trillion in 2009, the first time the shortfall for a single year topped $1 trillion. The government's new borrowing for this budget year, which ends Sept. 30, is expected to total $4.51 trillion under Treasury’s current projections. Much of that borrowing is for rolling over existing debt. Treasury expects to begin the 2021 budget year with record first-quarter borrowing of $1.22 trillion. The borrowing estimates released Monday will be followed Wednesday by an announcement of the types and sizes of Treasury securities the government expects to sell this quarter to cover its borrowing needs. On Friday, ratings agency Fitch cut the outlook for its U.S. credit rating to “negative,” from “stable,” although it kept its highest rating of AAA for the government’s soaring public debt, which now stands at $26.7 trillion. “There is a growing risk that U.S. policymakers will not consolidate pubic finances sufficiently to stabilize public debt after the pandemic shock has passed,” Fitch said in giving its reason for lowering its U.S. outlook.
  • General Motors is asking a federal judge to reconsider his dismissal of a lawsuit against Fiat Chrysler based on new allegations that FCA bribed union and GM officials with millions stashed in secret foreign bank accounts. GM alleges that bribes were paid to former United Auto Workers Presidents Dennis Williams and Ron Gettelfinger, as well as Vice President Joe Ashton. It also alleges that bribes were paid to GM employees including Al Iacobelli, a former FCA labor negotiator who was hired and later released by GM. The allegations were made in a court motion filed Monday by GM, which wants to revive the lawsuit that was dismissed in July. GM alleges that payments were made so the officials would saddle GM with more than $1 billion in additional labor costs. GM's motion contends that payments were made to accounts in places like Switzerland, Luxembourg, Italy, Singapore and the Cayman Islands. The accounts were set up to avoid detection in a federal criminal probe of the union, according to the lawsuit. Ashton, a former GM board member, is scheduled to be sentenced Aug. 18 in the federal corruption probe. Iacobelli is serving prison time. Williams' California home was raided by federal agents but he has not been charged. Gettelfinger has not been named in federal documents. He could not immediately be reached for comment Monday. UAW spokesman Brian Rothenberg and Fiat Chrysler said they could not immediately comment. The accusation is the first against Gettelfinger in the wide-ranging UAW bribery and embezzlement scandal that so far has snared 10 union officials. Some spent thousands in union money for golf, lodging and fancy meals. GM alleges in the court records that FCA bribed Gettelfinger, Williams, Ashton and former Vice President General Holiefield “by granting those individuals control over foreign financial accounts with substantial funds.” Gettelfinger, who was union president after Fiat took over Chrysler in 2009, helped to make sure Holiefield and Williams kept their union leadership posts “in order to preserve and progress the conspiracy to harm GM,' the documents said. GM alleged that accounts “apparently exist” in Gettelfinger's name, and the name of a relative in Panama and Switzerland. “The existence and use of these foreign accounts have never come to light publicly and by their very design were intended to remain secretive from criminal investigation,” GM's documents said. “This previously hidden network of accounts, utilized by defendants and controlled in part by individuals purportedly acting on GM’s behalf, reveals a magnitude of bribery and illegal activity specifically targeting GM that was not previously known or reasonably knowable.' In July, U.S. District Judge Paul Borman in Detroit tossed out GM’s lawsuit that alleged that Fiat Chrysler paid off union leaders to get better contract terms than GM. He wrote that GM’s alleged injuries were not caused by FCA violating federal racketeering laws, that GM had not stated a claim that could be granted, and that the people harmed by the bribery scheme were Fiat Chrysler workers. In a 2019 lawsuit, GM alleged that Fiat Chrysler bribed officials of the United Auto Workers union to get lower labor costs, giving FCA an advantage over its Detroit-area rival. GM alleged that FCA CEO Sergio Marchionne wanted to pressure GM into merging by weakening GM with higher costs. Marchionne died in 2018. Borman wrote in his ruling that GM’s “pay to harm” theory initially had appeal “but fails on a closer look.” GM alleged that FCA used bribes to get the UAW to deny GM concessions that were given to Fiat Chrysler. But Borman wrote that the UAW wouldn’t give the concessions to any company that didn’t pay bribes. Therefore, GM’s labor costs weren’t any higher than they would have been without the bribes. GM says in its new motion that Borman should alter or amend his order allowing GM to amend its complaint to present the new allegations. Among the officials to plead guilty to federal charges in the scandal is former President Gary Jones, who was accused of conspiring with UAW associates to embezzle more than $1 million.
  • The $21 billion sale of Speedway gas stations has bought Marathon Petroleum some breathing room as the global pandemic continues to quash travel and smother demand for gasoline and jet fuel. Wall Street focused on the sale to 7-Eleven over the weekend, rather than the huge losses the company posted Monday, with a lack of demand for fuel leading to refinery shutdowns. The deal comes just two days after Marathon announced the idling of refineries in New Mexico and California. The sale bolsters Marathon's cash reserves after it posted an $868 million second-quarter loss. Marathon will use the proceeds to reduce debt and pay dividends to shareholders. A lot of cash-starved companies have slashed dividends to ride out the pandemic, a more difficult proposition in the energy sector, where investors take a regular dividend as a given. “We think the dividend is safe,” said Citi analyst Prashant Rao, who believes the cash infusion will provide some debt cushion to the Findlay, Ohio, company. The all-cash sale is expected to close in the first quarter of 2021 and comes with a 15-year fuel supply agreement for 7.7 billion gallons per year for its stations. Marathon could also negotiate supply for 7-Eleven’s other retail gas stations. The companies did not say how many Speedway stations were included in the agreement. Marathon lists more than 10,000 U.S. locations under Marathon, Speedway and Arco signs. U.S. crude prices have plummeted 33% this year in the outbreak. While that would lower input costs for refiners like Marathon, gasoline demand has fallen in tandem as businesses and households cut travel. “Despite seeing some recovery during the quarter, demand for our products and services continues to be significantly depressed, particularly across the West Coast and Midwest,' said CEO Michael Hennigan. Gasoline prices surged over the past three months as states lifted COVID-19 restrictions, but now infections in those re-opened states have begun to surge as well, from California to Florida. On a per-share basis, Marathon lost $1.33 compared to earnings of $1.73 per share for the same period last year, when it had $1.1 billion in adjusted net income. Analysts surveyed by FactSet were expecting a loss of $1.73 per share. Revenue was $15.2 billion, about half of what it earned in the same quarter last year, and well short of what Wall Street projections. Shares in Marathon Petroleum Corp. are essentially flat Monday.
  • Slow, grinding negotiations on a huge COVID-19 relief bill are set to resume Monday afternoon, but the path forward promises to be challenging and time is already growing short. Republicans are griping that House Speaker Nancy Pelosi won't drop her expansive wish list even as concerns are mounting that the White House needs to be more sure-footed in the negotiations. Both the Trump administration negotiating team and top Capitol Hill Democrats remain far apart, and talks since Saturday — when the combatants announced modest progress — have yet to lend momentum. Both sides used television appearances over the weekend to showcase their differences. Ahead of Monday's talks, all sides predict a long slog ahead despite the lapse of a $600-per-week supplemental COVID-19 jobless benefit, the beginning of school season and the call of lawmakers' cherished August recess. Several more days of talks are expected, if not more. The White House is seeking opportunities to boost President Donald Trump, like another round of $1,200 stimulus payments and extending the supplemental jobless benefit and partial eviction ban. Pelosi, the top Democratic negotiator, appears intent on an agreement as well, but she's made it clear she needs big money for state and local governments, unemployment benefits, and food aid. Appearances by the principal negotiators on Sunday's news shows featured continued political shots by White House chief of staff Mark Meadows at Pelosi for turning down a one-week extension of the $600 benefit in talks last week. Meadows, however, is understaffed during the talks and seems to struggle with his read on Pelosi. He spent much of his time on CBS' “Face The Nation” attacking her for opposing a piecemeal approach that would revive jobless benefits immediately but leave other items like food stamps and aid to states for later legislation. She is insisting on a complete package. Senate Majority Leader Mitch McConnell, R-Ky., is so far playing a low-profile role. But he has been a constant in negotiations in four prior COVID-19 response bills, and he is facing time pressure as an antsy Senate yearns to exit Washington. The Democratic-controlled House has left for recess and won't return until there is an agreement to vote on, but the GOP-held Senate is trapped in the capital. Areas of agreement already include the $1,200 direct payment and changes to the Paycheck Protection Program to permit especially hard-hit businesses to obtain another loan under generous forgiveness terms. But the terms and structure of the unemployment benefit remains a huge sticking point, negotiators said Sunday, and Meadows hasn't made any concessions on the almost $1 trillion Pelosi wants for state and local governments grappling with pandemic-related revenue losses. “We still have a long ways to go,” Meadows said, adding, “I’m not optimistic that there will be a solution in the very near term.' Pelosi said she'd consider reducing the $600 benefit for states with lower unemployment rates. Republicans want to cut the benefit to encourage beneficiaries to return to work and say it is bad policy since it pays many jobless people more money than they made at their previous jobs. “Right now, today, we have an emergency,' Pelosi said Monday on CNN. 'A building is on fire and they are deciding how much water they want to have in the bucket. This is very important to stop — millions of people could have fallen into poverty without this $600.” Another sticking point is that Republicans want to give more school aid to systems that are restarting with in-school learning, even as Dr. Deborah Birx, Trump's top coronavirus adviser, cautioned that schools in areas with spikes in cases should delay reopening “In the areas where we have this widespread case increase, we need to stop the cases, and then we can talk about safely reopening,' Birx said on “This Week.” The House passed a $3.5 trillion measure in May, but Republicans controlling the Senate have demanded a slower approach, saying it was necessary to take a “pause” before passing additional legislation. Since they announced that strategy, however, coronavirus caseloads have spiked and the economy has absorbed an enormous blow.
  • President Donald Trump said Monday that he had fired the chair of the Tennessee Valley Authority, criticizing the federal-owned corporation for hiring foreign workers. Trump told reporters at the White House that he was formally removing chair Skip Thompson and another member of the board, and he threatened to remove other board members if they continued to hire foreign labor. Thompson was appointed to the post by Trump. The TVA is a federally owned corporation created in 1933 to provide flood control, electricity generation, fertilizer manufacturing and economic development to the Tennessee Valley, a region that was hard hit by the Great Depression. The region covers most of Tennessee and parts of Alabama, Mississippi and Kentucky as well as small sections of Georgia, North Carolina and Virginia. He also said the TVA board must immediately hire a new chief executive officer who “puts the interests of Americans first.' According to Trump, the CEO, Jeff Lyash, earns $8 million a year. “The new CEO must be paid no more than $500,000 a year,” Trump said. “We want the TVA to take action on this immediately. ... Let this serve as a warning to any federally appointed board: If you betray American workers, you will hear two words: ‘You’re fired.’” Trump said the authority was replacing many of its in-house technology workers with contractors who rely heavily on foreign workers under the H1-B visa program for highly skilled workers. “All TVA employees are U.S. based citizens,” said authority public information officer Jim Hopson. “All jobs related to TVA’s Information Technology department must be performed in the U.S. by individuals who may legally work in this country.” “As a federal corporation, TVA’s Board members serve at the pleasure of the President,” Hopson added. As Trump was meeting with workers who would shortly be laid off by the authority, Trump was passed a note from chief of staff Mark Meadows that said Lyash had called the White House and was promising to address the labor concerns. Some of the attendees, who are set to see their last paycheck at the end of the month, teared up as Trump read the message. Trump acknowledged that he was made aware of the issue after seeing a television ad produced by U.S. Tech Workers, a nonprofit that wants to limit visas given to foreign technology workers, that aired in prime time on Fox News. The group, led by Kevin Lynn, criticized the TVA for furloughing its own workers and replacing them with contractors using foreign workers with H-1B visas. The ad, Lynn said, had an “audience of one,' aiming to persuade Trump to stop the TVA from outsourcing much of its information technology division. Trump made the announcement as he signed an executive order to require all federal agencies to complete an internal audit to prove they are not replacing qualified American workers with people from other countries. The White House said the order will help prevent federal agencies from unfairly replacing American workers with lower cost foreign labor. The order followed the TVA’s announcement that it would outsource 20% of its technology jobs to companies based in foreign countries. TVA’s action could cause more than 200 highly skilled American tech workers in Tennessee to lose their jobs to foreign workers hired on temporary work visas, according to the White House. But Republican Sen. Lamar Alexander of Tennessee said the TVA doesn't get any taxpayer money. Commenting on the issue in April, Alexander said the White House was spreading misinformation. He said that TVA chief executive officers' pay is lower than other large utilities and that TVA energy rates are among the lowest in the nation.
  • U.S. construction spending fell again in June, the fourth straight decline as the coronavirus outbreak continues to wreak havoc on the economy. Spending on U.S. construction projects fell 0.7% in June as both home building and nonresidential activity declined, the Commerce Department said on Monday. Private and government spending on construction both also declined by the same 0.7% figure. The construction industry has been hammered by shutdowns forced by the coronavirus pandemic. As cases rise again in some parts of the country, there are concerns about further building declines in coming months. Analysts had expected a turnaround in spending in June as many parts of the country reopened, but it did not happen. May's number, however, was revised upward. Home building in June fell 1.5%, dragged down by a 3.6% drop in single-family home projects. That was somewhat offset by a 3% rise in multi-family home building. Nonresidential construction rose 0.2%, led by increases in hospitals and clinics, manufacturing facilities and hotels.
  • U.S. manufacturing improved again in July with a key gauge of activity rising further into expansion territory. The Institute for Supply Management, an association of purchasing managers, said Monday that its manufacturing index rose to 54.2 last month, up from a June reading of 52.6. Any reading above 50 signas that U.S. manufacturing is expanding. The index dipped below 50 in March, indicating a recession in manufacturing as the coronavirus pandemic shut down factories. The overall economy fell into a recession in February and the government reported last week that the gross domestic product plunged at an annual rate of 32.9% in the April-June quarter, the biggest drop on records going back to 1947. While it was the second straight month that the index has been above the 50 threshold, indicating manufacturing is expanding again, economists cautioned that the outlook is clouded by spreading infections in the U.S. in the South, West and Midwest. “Manufacturing is recovering from low levels and the outlook is uncertain, given the threat of repeated disruptions from virus outbreaks,” said Rubeela Farooqi, chief U.S. economist at High Frequency Economics. Timothy Fiore, chair of the ISM manufacturing survey committee, said it was encouraging that positive comments from survey participants were running two to one ahead of more cautious comments. The index tracking new orders posted a strong gain of 5.1-percentage points from the June reading while the production index was up 4.8 percentage points. The orders backlog index was also up. Of 18 manufacturing industries, 13 reported growth in July led by wood products and furniture and related products. The three industries reporting contractions in July were transportation equipment, machinery and fabricated metal products. “The health and economic crisis are inextricably linked and the economic recovery cannot be ensured until the impact of the virus is contained,” said Oren Klachkin, lead U.S. economist for Oxford Economics. “We expect manufacturing to grow gradually ahead with botched management of the pandemic and ongoing virus-related uncertain set to constrain activity.”
  • Sales at Clorox jumped 22% in its most recent quarter with millions of people growing more vigilant about cleaning routines in the pandemic. The company also announced Monday that Linda Rendle will become its CEO in September. There was a 33% jump in sales withing the company division that sells cleaning products. People have loaded pantries with disinfectant wipes and sprays, pushing overall sales up to $1.98 billion for the three months ended June 30. That's up from $1.62 billion a year earlier. Analysts surveyed by Zacks Investment Research expected $1.86 billion. Clorox Co., based in Oakland, California, posted a profit of $310 million, or $2.41 per share. That's better than the $2 per share Wall Street predicted. For the fiscal year, Clorox anticipates sales growth ranging from flat to low single digits, reflecting sustained demand through the first half of the year, and a deceleration in the back half, which would have a tough comparison to the initial months of the outbreak. Clorox's promotion of Rendle to CEO is effective on Sept. 14. The 42-year-old is currently president of the company. She replaces Benno Dorer, 56, who will hold on to his position as executive chairman. Dorer has been CEO since November 2014 and was appointed chair of the board in August 2016.
  • A Norwegian cruise ship line halted all trips and apologized Monday for procedural errors after a coronavirus outbreak on one ship infected at least 5 passengers and 36 crew. Health authorities fear the ship also could have spread the virus to dozens of towns and villages along Norway's western coast. The confirmed virus cases from the MS Roald Amundsen raise new questions about safety on all cruise ships during a pandemic even as the devastated cruise ship industry is pressing to resume sailings after chaotically shutting down in March. In response to the outbreak, Norway on Monday closed its ports to cruise ships for two weeks. The Hurtigruten cruise line was one of the first companies to resume sailing during the pandemic, starting cruises to Norway out of northern Germany in June with a single ship, then adding cruises in July to the Arctic archipelago of Svalbard. The 41 people on the MS Roald Amundsen who tested positive have been admitted to the University Hospital of North Norway in Tromsoe, north of the Arctic Circle, where the ship currently is docked. The cruise line said it suspended the ship and two others — the MS Fridtjof Nansen and the MS Spitsbergen — from operating for an indefinite period. “A preliminary evaluation shows that there has been a failure in several of our internal procedures,” Hurtigruten CEO Daniel Skjeldam said in a statement. He added the company that sails along Norway's picturesque coast between Bergen in the south and Kirkenes in the north is “now in the process of a full review of all procedures.' It has contacted passengers who had been on the MS Roald Amundsen for its July 17-24 and July 25-31 trips from Bergen to Svalbard, which is known for its polar bears. The ship had 209 guests on the first voyage and 178 on the second. All other crew members tested negative. But since the cruise line often acts like a local ferry, traveling from port to port along Norway's western coast, the virus may not have been contained onboard. Some passengers disembarked along the route and may have spread the virus to their local communities. A total of 69 municipalities in Norway could have been affected, Norwegian news agency NTB reported. Officials in the northern city of Tromsoe are urging anyone who traveled on the ship or had any contact with it to get in touch with health authorities. Police in Norway are opening an investigation to find out whether any laws had been broken. It's not yet clear how the MS Roald Amundsen outbreak began. NTB reported that 33 of the infected crew members came from the Philippines and the others were from Norway, France and Germany. The passengers were from all over the world. Skjeldam said cruise ship officials did not know they should have notified passengers after the first infection was reported Friday, adding that they followed the advice of the ship’s doctors. But Line Vold of the Norwegian Institute of Public Health said its advice was to inform passengers and crew as soon as possible so they could monitor their health and go into quarantine or isolation, if needed. “We have made mistakes. On behalf of all of us in Hurtigruten, I am sorry for what has happened. We take full responsibility,” Skjeldam said. The Norwegian government announced Monday it was tightening the rules for cruise ships by banning ships with more than 100 passengers from docking in Norwegian harbors and disembarking passengers and crew for two weeks. The ban does not apply to ferries. Health Minister Bent Hoeie said the situation on the Hurtigruten ship prompted the decision. In Italy, the Costa Crociere cruise ship line said three crew members from two ships in Civitavecchia, near Rome, have tested positive for the coronavirus. The cruise company said two assigned to the Costa Deliziosa were hospitalized and a third, assigned to the Costa Favolosa, was in isolation on the ship. The Italian cruise company, which is part of Carnival Corp. said the crews of both ships were being screened ‘’in view of the possible relaunch of our cruises, as soon as the government gives the authorization.’’ The Cabinet was to meet on the matter Sunday. Costa Crociere said that all crew members were tested for the virus before leaving their countries, then undergo a second test once they arrive in Italy, after which they are put under a two-week monitoring period. In the South Pacific, some 340 passengers and crew were confined on a cruise ship in Tahiti on Monday after one traveler tested positive for the virus. The commissariat for French Polynesia said all those aboard the Paul Gauguin cruise ship are being tested and will be kept in their cabins pending the results. The South Pacific archipelago started reopening to tourists last month, with a requirement that all visitors get tested before arriving and re-tested four days later. Cruise lines stopped sailing in mid-March after several high-profile coronavirus outbreaks at sea. More than 710 people fell ill aboard Carnival's Diamond Princess cruise ship while it was quarantined off Japan and 13 people died. The Cruise Lines International Association, which represents more than 50 companies and 95% of global cruise capacity, said the resumption of cruises has been extremely limited so far. The voyages taking place must have approval from and follow the requirements of national governments, it said. The U.S. Centers for Disease Control is not allowing cruise ships in U.S. waters at least through September. The industry association said it is still developing COVID-19-control procedures based on advice from governments and medical experts and once they are finalized, member companies will be required to adopt them. A German cruise ship last week set sail from Hamburg, testing procedures for how cruise ships can operate safely during the pandemic. The ship sailed with less than 50% capacity and only went on a four-day trip at sea with no stops at other ports. ___ Colleen Barry in Milan, Angela Charlton in Paris and Dee-Ann Durbin in Detroit contributed to this report. __ Follow AP’s pandemic coverage at http://apnews.com/VirusOutbreak and https://apnews.com/UnderstandingtheOutbreak
  • Italian luxury sportscar maker Ferrari further lowered its full year earnings guidance on Monday after reporting second-quarter profits were nearly wiped out by temporary halts in production and delivery due to the coronavirus. The automaker reported 9 million euros ($10.5 million) in net profit for the April-June period, covering much of Italy’s strict lockdown, a 95% drop from the same quarter of 2019. Shipments were down by half, to 1,389 from 2,671 a year earlier, with Ferrari resuming full production on May 8. Revenues were down 42%, to 571 million euros. Ferrari lowered its full-year guidance for revenues to above 3.4 billion euros, from a previous forecast of up to 3.6 billion euros. Adjusted earnings before interest and taxes are forecast to hit a top range of 700 million euros from a previous top range of 800 million euros. The new guidance reflects the carmaker’s ability to recover production of about 500 units out of the 2,000 total lost during the shutdown. It also is a result of a softer model mix due to delays in the ramp up of the SF90 Stradale, and lower engine deliveries to Maserati. Ferrari said the order book remained strong. Shipments in the quarter were down by 41% in Europe, 53% in the Americas and 91% in greater China. CEO Louis Camilleri told analysts that Italy’s coronavirus lockdown “engulfed us at a critical moment” as the company looked to produce models presented last year. He cited in particular the SF90 Stradale, which has more than 2,000 new components. 'While we are confident that deliveries to our clients will begin early in the fourth quarter, the ramp up in production will inevitably be delayed,’’ Camilleri said. Orders were up by double-digits, with models like the Ferrari Roma coupe attracting many first-time buyers despite the lack of ability to offer test drives. Cancellations were “actually lower than what we had feared may well have occurred given our experience during the financial crisis,'' the CEO said.