Meet the pilots of Virgin Galactic’s first flight to space

After months of testing Richard Branson’s rocket-powered plane at lower altitudes, two of Virgin Galactic’s test pilots made it to the edge of space on Thursday — 51.4 miles above Earth. For pilots Mark “Forger” Stucky and Frederick “CJ” Sturckow, looming over the flight was the memory of a tragic test flight in 2014. Virgin … Continue reading “Meet the pilots of Virgin Galactic’s first flight to space”

After months of testing Richard Branson’s rocket-powered plane at lower altitudes, two of Virgin Galactic’s test pilots made it to the edge of space on Thursday — 51.4 miles above Earth.

For pilots Mark “Forger” Stucky and Frederick “CJ” Sturckow, looming over the flight was the memory of a tragic test flight in 2014. Virgin Galactic’s first vehicle, SpaceShipTwo, ripped apart in mid-air, killing a co-pilot. Stucky spoke to CNN Business after Thursday’s successful firing of the rebuilt SpaceShipTwo, called VSS Unity, to record heights at nearly three times the speed of sound. He said it was like taking a thoroughbred racehorse into a full gallop for the first time.”Before you can race her you have to train and walk her down uneven terrain, but eventually you have to say, maybe I should race her,” he said. “That’s what Unity reminded me of.”The test flight was the first time Brason’s space tourism startup has gone more than 50 miles above Earth. It earned both pilots commercial astronaut wings from the US government and put Virgin Galactic on track to become the first private company in the world to take paying customers to space.Read MoreVirgin Galactic had worked toward the goal since it was founded in 2004. It also marked the first crewed flight to space from US soil since the Space Shuttle retired in 2011, with Virgin Galactic beating out other well-funded competitors.

    The company is squared up to compete directly with Jeff Bezos’s Blue Origin to conduct suborbital tourism flights. SpaceX and Boeing, meanwhile, are due to begin flying NASA astronauts to the International Space Station — a trip that requires speeds over Mach 30 — next year.

    Making history

    Virgin Galactic and its corps of test pilots have worked for years rebuilding its spacecraft and its public image.Branson watched alongside a crowd of employees, their family members and friends in Mojave, California with nervous energy as Stucky and Sturckow took to the skies.It wasn’t clear ahead of time whether they would reach the 50-mile mark. The pilots had the option to cut the engine burn short, which they would have been forced to do if any of the safety checks were abnormal or weather turned bad.Mark “Forger” Stucky and Rick “CJ” Sturckow arrived at the flight line before Thursday’s test.The pair tried to do everything possible to boost their chances of success. The morning before flight, Stucky and Sturckow met at Virgin Galactic’s Mojave hangar at 4:30 am to run through flight simulations meant to mimic any possible curve ball the day could throw their way.”We did it again, and again, and again, and got it perfectly,” Stucky said.It paid off.Despite a rough windshear, VSS Unity’s engine roared for 60 seconds and reached Mach 2.9. The blaze ended, and the cockpit window looked out into the blackness of the cosmos with an expansive view of Earth’s curved horizon. Mission control dispatched: “Welcome to space.” Branson wept.

    Reflections on @virgingalactic’s first space flight & the momentous achievement of a crewed spaceship, built to carry private paying passengers, reaching space for the first time ever https://t.co/hHk8ZsF8Kn pic.twitter.com/qtN8cy7kdb

    — Richard Branson (@richardbranson) December 14, 2018

    A balanced act

    Stucky, 60, and Sturckow, 57, have more than 15,000 hours of flying experience between them. They’re both former marines and have known each other since the 1980s, but they’ve never worked together before joining Virgin Galactic. Their personalities are polar opposites.

      Stucky is verbose and charismatic, while Sturckow is known for his stoicism and intensity.When the men emerged from VSS Unity after their historic flight Thursday, they walked toward the crowd. Stucky broke into a sprint, bolting directly for the area where the pilots’ family members were watching. He gave his wife a kiss and handed Branson a small globe that he carried with him during the flight. On an outdoor stage near the runway, he addressed the crowd of employees, family members and friends with visible excitement.”It was really amazing, I hope you guys could maybe capture a sense of that,” he said. Stucky joked at one point that reaching space meant he’d left the United States, and he handed Branson a set of customs declaration forms.When Stucky gave Sturckow the microphone, he offered just two phrases: “It was a great flight, and I can’t wait to do it again. Thank you, Forger.””That’s more words than he usually gives,” one audience member remarked. Richard Branson celebrates with pilots Rick “CJ” Sturckow, left, and Mark “Forger” Stucky, right, after Virgin Galactic’s tourism spaceship climbed more than 50 miles high.Stucky said going into the flight, he was glad for Sturckow’s levelheadedness.”The thing I knew about CJ was that nothing would frustrate him, and I knew that he wouldn’t cave under pressure no matter how bad it got,” he said.

        Earning wings

        The rare designation of astronaut wings is awarded by NASA or the Air Force when a flight in their respective programs reaches more than 50 miles above Earth.The first-ever commercial astronaut wings were awarded by the Federal Aviation Administration in 2004 to Mike Melvill and Brian Binnie, who piloted SpaceShipOne, the supersonic plane that was the precursor for SpaceShipTwo.FAA Assistant Administrator Bailey Edwards took the stage with Stucky and Sturckow Thursday to announce that they, too, would receive the designation in a ceremony next year.

        Here's a rendering of the commercial astronaut wings @Stuck4ger and CJ Sturckow will receive for Thursday's spaceflight. pic.twitter.com/K5tFJTIag7

        — Jackie Wattles (@jackiewattles) December 15, 2018

        Sturckow already has a set of wings. He’s a former NASA astronaut who flew on four Space Shuttle missions between 1998 and 2009. By the time he left NASA to join Virgin Galactic in 2013, he already logged more than 1,200 hours in space.But for Stucky, earning astronaut wings was decades in the making. He dreamed of traveling deep into the skies since he was a kid. After reaching the final stages of selection for the astronaut corps — a hyper-competitive process — he didn’t make the cut.He worked as a test pilot for NASA and the Air Force, logging experience on more than 170 types of vehicles throughout his career. He teamed up with Virgin Galactic about a decade ago. It gave him another shot at reaching his lifelong goal.When he finally reached space Thursday, Stucky honored a bet he lost to longtime pal Jack Fischer over who would get there first. Fischer was selected to be a NASA astronaut in 2009 and spent 136 days in space last year. Stucky carried Fischer’s name tag with him during Thursday’s flight.But Stucky said none of that was top of mind.Mark “Forger” Stucky and Rick “CJ” Sturckow emerge from VSS Unity after landing.”The overwhelming feeling is not anything about being an astronaut, it’s about doing a good job and not letting the company down and not letting Richard down,” he said. It was about showing what all those people at Virgin Galactic had worked for was “more than just a vision.”

          Stucky told CNN Business in October that he never felt like he was gambling with his life when he boarded VSS Unity for a powered test flight. But on Thursday he admitted he tried to shield some members of his family from the inevitable risk he took on firing a rocket engine up to 260,000 feet in the air. Stucky’s daughter gave birth earlier in the week. “I did not tell them about this flight because I didn’t want to stress her out,” he said.When asked how he would celebrate they day’s achievement, Stucky laughed and said his wife “got me a really nice bottle of whiskey.”

Boeing delivers first 737 from new Chinese factory

Boeing on Saturday delivered its first 737 airliner from its new factory in China — a debut that comes amid a 90-day truce in the US-China trade war.

The 100-acre completion site in in Zhoushan, where workers install interiors to 737s built in Seattle for sale in the Chinese market, is part of the US aerospace company’s plan to strengthen ties to what will soon be the world’s largest aviation market.The Chinese plant is the first of its kind for Boeing (BA) outside the United States. It is operated as a joint venture between the company and China’s Commercial Aircraft Corporation (COMAC).

    The first 737 to roll out of the plant was delivered to Chinese carrier Air China on Saturday.”This is a significant milestone of Boeing’s efforts to deepen its footprint in China, as well as to support the growth of China’s airline industry, opening an era of the collaboration,” Zhao Yuerang, president of COMAC, said in a statement.Read MoreCritics of Boeing’s new facility say it moves work done by US-based workers abroad and gives China valuable insight into jetliner production.Expanding its presence in China is key for Boeing to stay competitive with European arch-rival Airbus.China is on track to surpass the United States as the world’s largest air travel market by 2022, sooner than expected, according to the International Air Transport Association.Boeing estimates China will need 7,680 new planes worth $1.2 trillion over the next 20 years, plus $1.5 trillion in commercial services to support the new fleets.But Boeing, the United States’ single largest exporter, found itself on the front lines of a trade war this year as President Donald Trump directed his administration to slap billions of dollars worth of tariffs on Chinese goods to punish the country for what Trump called unfair trade practices. China responded in kind, and the tit-for-tat escalated for months. Trump and Chinese leader Xi Jinping agreed to a temporary truce earlier this month as officials work to negotiate a broad deal.”Am I nervous about the situation? Yeah, of course. It’s a challenging environment,” John Bruns, president of Boeing China, told reporters on Saturday, according to Reuters.Trump has also slammed US companies for building factories abroad.

      Last year, Boeing CEO Dennis Muilenburg pitched the Chinese completion site, which has been in the works since 2015, as a boon for US manufacturing.”We’re able to add volume and increase sales in China, because as we increase sales to China we increase building airplanes here in the U.S., and that’s U.S. manufacturing jobs,” he said.

Doors are slamming shut for Huawei around the world

Huawei is coming under pressure in two more key European markets — the latest in a series of problems the Chinese company faces around the world.

Telecommunications firm Orange has ruled out using Huawei products in its core 5G network in France, and Germany’s Deutsche Telekom says it’s reviewing purchases of Huawei equipment.The Chinese company, which sells smartphones and telecommunications gear, faces increased scrutiny in the United States and other countries, where officials have warned of potential national security risks from using Huawei products.

    The recent arrest of its chief financial officer, Meng Wanzhou, has raised additional questions about Huawei. Meng has been released on bail in Canada, but she now faces a lengthy legal battle over whether she should be extradited to the United States, where prosecutors accuse her of helping Huawei get around sanctions on Iran.Huawei's CFO is out on bail, but the crisis sparked by her arrest is snowballingOrange (ORAN), the largest telecoms operator in France, on Friday ruled out using Huawei equipment in its core 5G network in the country.Read More”We don’t foresee calling on Huawei for 5G,” Orange CEO Stephane Richard said Friday. “We are working with our traditional partners — they are Ericsson and Nokia.”Meanwhile, Deutsche Telekom (DTEGY) said it was taking the discussion about the security of network elements from Chinese manufacturers “very seriously.””We are pursuing a multi-vendor strategy for the network elements used (manufacturers primarily Ericsson, Nokia, Cisco, Huawei),” it said in a statement. “Nevertheless we currently reevaluate our procurement strategy.”Huawei did not immediately respond to a request for comment sent outside business hours in China.The announcement from Deutsche Telekom — coupled with news from SoftBank this week that it might also drop Huawei equipment — could also factor into the pending merger between T-Mobile (TMUS) and Sprint (S). Deutsche Telekom is majority owner of T-Mobile while Softbank owns Sprint.Reuters reported Friday that the deal between the two US phone companies could now get approval from federal regulators who vet deals for national security risks. According to Reuters, the use of Huawei equipment has been part of the review.Law enforcement officials rebuff Trump over prosecution of Chinese executiveHuawei is largely shut out of the US market, where it has repeatedly come under fire from lawmakers and government officials who accuse it of working under the influence of the Chinese government.It has repeatedly denied the allegations, saying it’s a private company owned by its employees. Huawei told CNN Business last month that its equipment is trusted by 46 of the world’s 50 largest telecommunications companies.But security agencies are particularly worried about Huawei’s involvement in future 5G networks, because of the rise of connected devices, smart homes and the internet of things.

      New Zealand and Australia have prevented telecoms companies from using Huawei equipment for their 5G mobile networks. Issues for Huawei have cropped up in the UK, too. British telecoms group BT (BT) said last week that it would not buy Huawei equipment for the core of its 5G wireless network.

The electric cars of the future could be recharged in 15 minutes

The next generation of electric cars could charge their batteries in the time it takes to fill up at a gas station.

A group of companies including Germany’s BMW (BMWYY), Porsche and Siemens (SIEGY) say they have developed technology that could help make super-fast charging a reality.They unveiled on Thursday a 450 kW charging station that needs only three minutes to provide enough juice for a 100 kilometer (62 miles) drive. A full charge takes 15 minutes.

    Ian Ellerington, head of technology transfer at the Faraday Institution, said the technology is significantly better than what’s currently available, even if there are major issues to resolve before it’s put into widespread use.”450kW is substantially quicker than the Tesla superchargers (120kW), and would in principle be 10 times quicker than the rapid chargers that are currently widely available,” he said. Read More

    The slow charging problem

    Long charging times are a major drawback of electric cars currently on the market. They slow down road trips, and they’re a major inconvenience for owners who can’t charge their cars at home. Ellerington said the next generation of chargers could help solve the problem.”At 350-450kW, electric charging will take a time comparable to refueling with gasoline, which will make long journeys in [electric vehicles] as practical as in cars using liquid fuels,” he said.

    Power trouble

    More development work is needed to make 450 kW chargers a practical option, however. According to Ellerington, one major piece of the puzzle is building cars that can handle the increased power. “I believe that there are no vehicles currently on the market that could accept this amount of power, and it will need the next generation of batteries to take advantage of the full capability,” he said. For the 450 kW charging project, BMW and Porsche designed cars specifically for the tests.The maker of Mercedes cars is spending $23 billion on batteriesKeith Pullen, a professor of energy systems at City, University of London, said that super-fast charging comes with other drawbacks. “If you charge a battery very quickly, it’s less efficient [and] it actually damages the battery,” he said. The technology could be useful in an emergency, but frequent use would cause a battery to wear out quickly.

    Draining the grid

    Engineers would need to solve another problem: super-fast chargers use a huge amount of power.

      Pullen said that a service station with 20 charging stations would use about six megawatts of power — the same amount as a typical small town. “This power has to come from somewhere and it has to come from the grid,” he said. “You wouldn’t be able to roll this out, there have to be major changes first.”

Trump says GM ‘is not going to be treated well’ after layoffs

President Donald Trump said Thursday that General Motors CEO Mary Barra made a “big mistake” by laying off thousands of workers and pledged to retaliate against the company.

In a Fox News interview with Harris Faulkner, he said he was upset with GM’s plan to restructure its global business, including halting production at five facilities in North America and eliminating about 14,000 jobs.He lashed out against Barra, calling her actions “nasty.”

    “To tell me a couple weeks before Christmas that she’s going to close in Ohio and Michigan — not acceptable to me,” Trump said. “And she’s either going to open fast or somebody else is going in. But General Motors is not going to be treated well.”GM said in a statement Thursday that the company is focused on “our employees currently working at our impacted plants in Maryland, Michigan and Ohio.”Read MoreTrump’s comments were only his latest in a string of highly unusual public attacks on the CEO of a major American corporation by a president. GM has said it closed plants and laid off workers to better prepare for the future. The company wants to shift production from sedans, which have fallen out of favor with Americans, to SUVs and trucks. It also wants to save money for the expensive task of inventing self-driving car technology.In a statement Thursday, GM said its “focus remains” on the employees at the plants that are closing, adding that hourly workers may be able to find jobs at other locations.”We continue to produce great vehicles today for our customers while taking steps toward our vision of a world with zero crashes, zero emissions and zero congestion,” the company said. Trump predicted Barra’s actions to remake GM’s business will fail.”I think she’s making a big mistake,” Trump said. “They’ve changed the whole model of General Motors. … I don’t run a car company but all-electric is not going to work. It’s wonderful to have it as a percentage of your cars but going into this model is not going to work.”Trump’s claim that GM has plans to stop making gasoline-powered engines isn’t quite true. GM does not currently plan to go “all-electric,” as Trump suggested, but Trump may not be far off. Auto industry experts believe battery technology will soon be cheap enough to make electric cars more affordable, vastly increasing consumer demand for them. He also claimed the new trade agreement between Canada, Mexico and the United States would make business difficult for GM. He criticized the company for making some of its vehicles and parts in Mexico, and he said the new USMCA agreement will remedy that.”Now the new deal, the USMCA, that I made, really makes it very uncomfortable for people to go out of the country,” Trump said. “And it will be very uncomfortable for them.”The USMCA will require companies to pay about the same minimum wage to their employees in each of the USMCA countries, effectively requiring GM to give its Mexican workers a raise. That could reduce some of the advantages of building vehicles in Mexico, although GM has no plans to bring back production to the United States.

      Ultimately, Trump said, GM’s job cuts won’t hurt the US economy.”It doesn’t really matter because Ohio is under my leadership from a national standpoint,” he said. “Ohio is going to replace those jobs in like two minutes.”

China is temporarily slashing tariffs on US auto imports

China said Friday it will temporarily reduce tariffs on imports of American-made cars as it tries to negotiate a trade deal with the United States.

Citing the meeting earlier this month between US President Donald Trump and Chinese leader Xi Jinping, the Chinese Finance Ministry said in a statement that it will remove the additional 25% tariffs on car imports from the United States for three months starting January 1. That will bring China’s tariffs on American-made cars to 15%, in line with those for cars made in other countries.China also said it would suspend its 5% tariff on 67 other auto parts.

    China imposed the additional tariffs on US cars in July and on some auto parts in September as part of its retaliation in the trade war between the two countries.At their meeting in Argentina, Trump and Xi agreed to a temporary truce while they try to negotiate a broad trade deal over the next 90 days. New soybean orders from China aren't showing up in trade data — yetRead MoreIn its statement Friday, the Finance Ministry described the decision to remove the tariffs as a “concrete action” aimed at helping to bring about a “mutually beneficial new Sino-US trade order.”Xi pledged in April that China would cut tariffs on imported cars this year. His government delivered on that promise in July, reducing import taxes from 25% to 15%.But just days later, China imposed new additional tariffs of 25% on American-made passenger vehicles as the trade war with the United States escalated. The tariffs hurt profits of major automakers that ship cars to China from the United States. Germany’s BMW and Daimler, the owner of Mercedes-Benz, have been hit particularly hard. Shares of BMW (BMWYY) and Daimler (DDAIF) both trimmed early Friday losses on the news. The stocks had spiked last week after Trump tweeted that China was going to cut auto tariffs.

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      BMW’s robot army makes 1,000 cars a day 02:14General Motors (GM) and some other automakers already have a large presence in China through partnerships with local manufacturers. It has become the largest and most important market for the American auto industry. Because their plants are in the country, they weren’t subject to big import taxes.

        Yet China’s tariffs have hurt exports from US auto plants. The value of US passenger car exports to China has fallen by $2.4 billion, or 30%, over the course of the first nine months of the year.Part of that could be because of slowing Chinese auto sales. Yet overall sales of American cars in China -— including those made in China — are down only about 1% so far this year.

New soybean orders from China aren’t showing up in trade data — yet

China did not immediately restart buying American soybeans after President Donald Trump and President Xi Jinping agreed to a temporary trade truce.

Data released by the US Department of Agriculture on Thursday show that China didn’t buy soybeans from the United States during the week ending on December 6, five days after the two leaders met in Argentina.Farmers, who have waited for details on how much would be bought or when, have been encouraged by reports that two Chinese state-owned companies have placed orders this week.

    President Donald Trump told Reuters in an interview Tuesday that China is “back in the market” to buy a “tremendous” amount of American soybeans. Reuters reported that Chinese state-owned companies bought at least 1.5 million metric tons of soybeans on Wednesday.”You have to start someplace. I think it’s a good sign,” said John Heisdorffer, an Iowa soybean grower and chairman of the American Soybean Association.Read MoreTrump sets 'terrible precedent' by crossing red line on Huawei caseThe new orders alone won’t make up for this year’s losses. Soybean farmers have been hit hard by the the US-China trade dispute. China, which was the biggest export market for American soybean farmers last year, stopped placing new orders in July in retaliation against new American tariffs. Many US farmers have had to put their soybeans in storage after harvesting them this fall. The Farm Bureau has estimated that soybean exports to China are down 97% this year. Prices for a bushel of soybeans fell by $2 after the tariffs went into place.The Trump administration has offered an emergency aid package to farmers hurt by tariffs. In September, about $3.6 billion was allocated for soybean farmers specifically. But the American Soybean Association said it would only “partially offset” the losses farmers will see this year.At the time, the USDA said it could release a second round of aid before the end of the year, but farmers are still waiting to hear if it will come through.Any new orders placed this week would not have showed up in the government data released Thursday. The US Department of Agriculture did not immediately respond to a request for comment on the reports of new orders.

      The US Soybean Export Council, which represents growers, shippers and merchandisers, could not confirm the report late on Wednesday, but was encouraged by the news. “We’re hopeful that our farmers can continue delivering high-quality soy to China and other customers throughout the world,” said Jim Sutter, CEO of the council.

‘I begged them for help’: Wells Fargo foreclosure nightmare

Foreclosures can be extremely painful events. Imagine finding out years later that it was all a big mistake.

That’s exactly what happened to Jeff and Eva Reiner. The couple turned to Wells Fargo (WFC), their mortgage servicer, for help making their payments after Eva, the family’s breadwinner, was laid off by Verizon (VZ) in 2010. “We were desperate. I begged them for help,” Eva Reiner told CNN Business.

    But Wells Fargo did not accept their requests for a mortgage modification for their beloved 6-acre property in rural South Carolina. Wells Fargo eventually foreclosed on the home, forcing the couple to move their teenage son, give up three dogs and forfeit the equity they had built up in the house. This fall, the Reiners learned from media reports they were among the approximately 545 homeowners who lost their homes because of an apparent software glitch with Wells Fargo’s loan modification process.Read MoreThe Reiner family, whose home was foreclosed on by Wells Fargo after a glitch.The foreclosure problem is just the latest in a long series of issues confronting Wells Fargo, one of America’s biggest banks. Over the past two years, Wells Fargo has admitted to creating millions of fake accounts, forcing thousands of borrowers into auto insurance they didn’t want and imposing mortgage fees on homeowners they didn’t deserve. Wells Fargo has apologized for its conduct, revamped the C-Suite and pledged to do better. But the bank still faces multiple government investigations and lawsuits. The latest was last week. A lawsuit was filed against Wells Fargo seeking justice for borrowers like the Reiners who say they were victimized by the bank’s wrongful foreclosures.

    ‘I had a breakdown’

    In September 2018, Wells Fargo sent the Reiners a letter explaining that the bank had “difficult news” to share: The family’s plea for a mortgage modification would have been accepted if not for a “faulty calculation. Wells Fargo said the couple should have been approved for a trial modification — a reduction in monthly payments that would have saved their house from foreclosure.”I had a breakdown. I could not believe we’d get a letter of that nature so many years later,” said Eva, who is on her fifth round of chemotherapy for ovarian cancer. The couple now lives in an apartment in Virginia. Wells Fargo knew for years that auto insurance was hurting customers, lawsuit saysJeff Reiner, a stay-at-home dad who took care of their special needs son, said the mortgage modification would have allowed the family to remain in their home. “Without assistance, we just didn’t have a chance,” he said.In the letter, Wells Fargo apologized for the mistake, enclosed a check for $15,000 to help “make things right” and offered free mediation for further compensation. The letter did not explain how Wells Fargo decided on the $15,000 sum, but it did say the couple could cash it and still pursue mediation.”We realize our decision impacted you at a time you were facing a hardship,” a Wells Fargo mortgage executive wrote. 20181211 wells fargo foreclosure letter (PDF)
    20181211 wells fargo foreclosure letter (Text)A Wells Fargo spokesman told CNN Business that the bank should have sent the Reiner family a proactive modification offer in 2012, but it didn’t because of the calculation error. He said that loans like this one that are backed by Fannie Mae or Freddie Mac were eligible for modification even before the borrower requests one. “If they had accepted the offer [that Wells Fargo never made] and kept up with the payments, then the foreclosure would have been avoidable potentially,” the Wells Fargo spokesman said. He added that the October 2012 foreclosure occurred after the family filed for bankruptcy and the loan was nearly 17 months past due.

    ‘Don’t just blame it on the software’

    Jeff Reiner said he appreciates that Wells Fargo has admitted its error, but that $15,000 is woefully insufficient given the financial and emotional loss the family suffered. “It doesn’t even begin to compare to the chain of events that were started by their denial of assistance,” he said. He compared it to someone saying: “Sorry about cutting off your arm. Here’s a Band-Aid.”Jeff said he wants Wells Fargo to at least show that it understands the consequences of its mistake. “And don’t just blame it on the software,” he said. “Where was the human oversight?” The Reiner family was forced to say goodbye to their six-acre property in South Carolina and move their special needs son after the foreclosure.Jeff and Eva Reiner are now represented by Gibbs Law Group, the Oakland law firm that filed a lawsuit against Wells Fargo. The complaint, filed on December 5 in US District Court for the Northern District of California, is seeking class action status. “We think Wells Fargo’s errors are having devastating and long-lasting effects on people’s lives,” Michael Schrag, a partner at Gibbs Law Group, told CNN Business. The Wells Fargo spokesman said the bank was served the lawsuit “only recently” and “can’t comment specifically on many of its claims at this time.”He added that while Wells Fargo “would prefer to work directly with each customer to resolve the matter,” if they aren’t satisfied with the offer or mediation then borrowers are able to pursue other legal options.

    Hundreds of customers lost their homes

    During the mortgage crisis, Congress created the Home Affordable Modification Program, which aimed to keep struggling homeowners out of foreclosure. Wells Fargo, one of America’s biggest mortgage lenders, was among the many banks that chose to participate in HAMP.Under Treasury Department guidelines, mortgage servicers were required to issue modifications to borrowers who had documented financial hardships and an ability to make their monthly mortgage payments after a modification. Lenders were directed to reduce monthly mortgage payments to as close as possible to 31% of the borrower’s monthly income by slashing interest rates, extending the length of mortgages or taking other steps.In August, Wells Fargo made a shocking admission in an SEC filing: about 400 homeowners were foreclosed upon between April 2010 and October 2015 because of a “calculation error” in the bank’s mortgage modification underwriting software. That glitch caused customers who were otherwise qualified to get denied for a loan modification. Last month, Wells Fargo said in a new SEC filing that it identified another 145 customers whose homes were wrongly foreclosed on. The bank said an expanded review found additional “errors” that inflated the estimate of attorneys’ fees for homeowners in the foreclosure process. Legal fees are taken into account when banks determine if customers qualify for mortgage modification. All told, Wells Fargo said in the filing that about 870 customers were incorrectly denied a loan modification or were not offered a loan modification plan in cases where they would have otherwise qualified.

    Why didn’t Wells Fargo act earlier?

    The lawsuit accuses Wells Fargo of “concealing” the glitch. It says that Wells Fargo failed to disclose the problem years ago even though the bank said in SEC filings the calculation error was corrected in October 2015. The Wells Fargo spokesman told CNN Business that while the bank initially identified and fixed the calculation error in October 2015, it was only later determined that accounts should be reviewed to determine if the problem led to any “unintended issues” for customers. He said those later reviews identified customer impact and “shortly thereafter” the bank publicly disclosed the matter.Victims of Wells Fargo’s wrongful foreclosure suffered “significant stress causing physical injuries and emotional distress,” the lawsuit alleges. The complaint accuses Wells Fargo of engaging in business practices that are “immoral, unethical, oppressive, unscrupulous,” and harmful to consumers. The lead plaintiff in the lawsuit is Alicia Hernandez, who sought a mortgage modification from Wells Fargo after getting laid off during the Great Recession. Wells Fargo told Hernandez that she didn’t qualify for help and eventually foreclosed on her North Bergen, New Jersey, condo in late 2015, according to the lawsuit.

      Wells Fargo informed Hernandez in a September 2018 letter that it discovered the rejection was because of a “faulty calculation,” according to the lawsuit. The bank sent Hernandez a check for $15,000. “The check does not make up for the severe financial and other consequences that Wells Fargo’s calculation inflicted on Ms. Hernandez,” the lawsuit said.

Nissan shares evidence against Carlos Ghosn with Renault

Renault is facing a crunch decision over CEO Carlos Ghosn after Nissan shared details of an investigation that led to his arrest and indictment in Japan.

Members of Nissan’s legal team briefed lawyers for the French carmaker in Paris on Monday, the first exchange of information about the case between the partner companies since Ghosn was arrested in Tokyo on November 19, according to a source familiar with the matter. Ghosn’s legal troubles have plunged the future of the alliance he forged between Renault (RNSDF) Nissan (NSANY) and Mitsubishi Motors (MMTOF) into doubt, and cost him the chairmanship of both Japanese carmakers.

    Renault has so far taken a different approach, appointing interim management but keeping Ghosn in his positions as CEO and chairman. The company stated as recently as Monday that it had not seen details of the allegations against him. Carlos Ghosn is out at Nissan and Mitsubishi. What will Renault do?Renault declined to comment Wednesday when asked about Monday’s legal briefing. Read MoreTokyo prosecutors on Monday indicted Ghosn, 64, on accusations he under-reported his income in Nissan corporate filings by about 5 billion yen ($44 million) between 2010 and 2015.They also rearrested him on additional allegations that he also under-reported his income by more than 4.2 billion yen ($38 million) between 2015 and 2017. He will remain in police custody until at least December 20.Japanese public broadcaster NHK reported Monday, citing unidentified sources, that Ghosn is denying the allegations against him.Nissan said last month that an internal investigation discovered “significant” financial misconduct by Ghosn and Kelly following a whistleblower report. After Carlos Ghosn, Japan may never hire another foreign CEO”The evidence presented to Nissan’s board last month was substantial and compelling enough to result in a unanimous vote. We believe any objective review of this evidence would find this evidence equally convincing,” a Nissan spokesman said on Wednesday.Renault has launched an internal audit following Ghosn’s arrest, but the results have not yet been disclosed.It’s not clear whether the sharing of evidence against Ghosn, which was authorized by prosecutors in Tokyo, will cause Renault to change its approach to the crisis. Tokyo court rejects Carlos Ghosn's complaint about his month-long detentionThe indictment of Ghosn raises the prospect of a challenging court battle for the Brazilian-born business leader. He filed a complaint against his detention earlier this week but it was rejected by a Tokyo court.

      More than 99% of people charged with a crime in Japan are eventually convicted, according to experts. The maximum punishment in Japan for filing a false financial statement is 10 years in prison and a fine of 10 million yen ($89,000).Both Nissan and Renault have said Ghosn’s arrest won’t affect their alliance, which produces one out of every nine vehicles worldwide. Officials from the French and Japanese governments have echoed those sentiments.

Oreo-maker Mondelez has a plan to become the biggest name in snacks

Mondelez is determined to be the biggest name in snacks.

The company rolled out an aggressive new growth strategy this fall that includes a bold plan to revamp old brands and launch trendy new businesses. The move comes after years of cost-cutting efforts that took a toll on its snack sales. “We need to become more consumer-centric than ever before,” said Mondelez CEO Dirk Van de Put during the company’s investor day in September. He stepped into the role late last year. “What they eat, how they buy, why they buy and where they buy, we need to be on top of this and follow where the consumer is leading us.”

    The company’s new innovation hub, SnackFutures, is an important part of making that happen. Its small team is tasked with developing new, trendy brands, revamping existing Mondelez brands and partnering with startups that are already capitalizing on new trends.

    From cutting costs to growing sales

    Read MoreMondelez International (MDLZ) has only existed as an independent company since 2012, when it split from Kraft Foods. It spent the first years of its new life cutting costs. In that time, the company stayed focused on the power brands it brought over from Kraft — like Oreo and Chips Ahoy! — but neglected its smaller, more regional brands, said Alexia Howard, an analyst at AllianceBernstein. She said that led to sales slips. Now, she said, “the idea is to get back on track.”The company’s snack business rose more than 2% in 2016 and in 2017. In the first half of 2018, snacks were up 3%, Van de Put said. He added that he expects about 3% growth per year in the long term. Van de Put also said that while snacks already make up 85% of Mondelez’s business, that percentage could still increase. The goal of becoming the world’s largest snack provider is within reach. Right now, Mondelez is second only to PepsiCo in the global snacks market, according to research from Euromonitor International. And the margin is slim: PepsiCo has 7.6% of the market and Mondelez 7.4%. Mars, in third place, is far behind with 4.9% of the market. SnackFutures could help Mondelez expand their portfolio.

    A comprehensive strategy

    Mondelez isn’t the only food company that is trying to stay ahead of the curve with the help of either innovation hubs or venture capital teams. Chipotle (CMG), Chobani, Land O’Lakes and Pepsico (PEP) have launched accelerator programs designed to help innovative food and beverage startups grow their businesses with cash and mentoring. Through the hubs, these companies hope to learn which new food and flavor trends resonate with customers and how young, nimble companies solve problems. General Mills (GIS) invests in new companies through 301 Inc., its venture capital arm. Coca-Cola (KO) invests through its Venturing & Emerging Brands unit. For Coca-Cola, VEB is also a place to nurture acquired brands like sparkling water company Topo Chico and Honest Tea. Mondelez makes Oreo, Chips Ahoy, and Nilla, among other snacks. Daniel Acker/Bloomberg via Getty ImagesMondelez, meanwhile, is setting itself apart by trying it all. With SnackFutures, Mondelez plans to develop “an ecosystem of partners” that will allow the company to keep tabs on “what ingredients are hot [and] what trends are popping across the world,” Tim Cofer, the company’s chief growth officer, told CNN Business. Cofer said that Mondelez can decide whether it should build products on its own, or partner with a business already working in that space. The SnackFutures team is going after three key areas: premium snacks, digital platforms and healthier foods.

      About 20 people work on the team, said Cofer, who added that it is made up of the “biggest innovators in our company.”It’s already making moves. Cofer said the team has “put a few successes on the board” that may roll out next year.