Elon Musk agrees to resign as Tesla chairman in settlement with SEC

Tesla CEO Elon Musk will step down as chairman of the electric automaker and pay a $20 million fine under a settlement reached with the U.S Securities and Exchange commission. Musk will remain CEO.

Musk will resign from his role as chairman of the Tesla board within 45 days of the agreement, which was filed Saturday. He has agreed to not seek reelection or accept an appointment as chairman for three years. An independent chairman will be appointed, under the settlement agreement.

Tesla will pay a separate $20 million penalty, according to the SEC. Musk doesn’t admit or deny wrong-doing as part of the agreement.

Tesla has also agreed to appoint two new independent directors to its board and establish a new committee of independent directors and put in place additional controls and procedures to oversee Musk’s communications, according to the SEC.

“The resolution is intended to prevent further market disruption and harm to Tesla’s shareholders,” Steven Peikin, co-director of the SEC’s Enforcement Division said in a statement.

The agreement marks the beginning of a new era of corporate governance for Tesla, which some shareholders have argued is too tightly controlled by Musk and others closely aligned to him.

The SEC filed a complaint Thursday in federal district court alleged that Musk lied when he tweeted on August 7 that he had “funding secured” for a private takeover of the company at $420 per share. Federal securities regulators reportedly served Tesla with a subpoena just a week after the tweet. Investigations can take years before any action is taken, if at all.

The SEC said in the complaint that Musk violated anti-fraud provisions of the federal securities laws. The commission has asked the court to fine Musk and bar the billionaire entrepreneur from serving as an officer or director of a public company.

Musk described fraud charges an “unjustified action” that has left him “deeply saddened and disappointed.”

Tesla and the board later issued a joint statement supporting Musk.

The complaint contained a number of eye-browing raising details, including he had talked to the board about an offer to take Tesla private as early as August 2 when he sent to Tesla’s board of directors, chief financial officer and general counsel an email with the subject, “Offer to Take Tesla Private at $420.”

NAFTA talks in crucial phase amid threat of devastating tariffs on Canadian auto sector

Talks to revamp the North American Free Trade Agreement are playing out under new urgency and a familiar, if heightened threat: that U.S. President Donald Trump will cut Canada off the deal and level devastating tariffs on its auto imports.

On the other side of the table, the U.S. is under its own pressure to bring the Canadians on board amid serious doubts that a two party pact will win the support of American lawmakers – or even satisfy key terms of the agreement.

Indeed, while US Trade Representative Robert Lighthizer’s notification to Congress in August left open the possibility that Canada would join later, it did not explain how the US and Mexico would satisfy the auto elements considered central to the deal without Canada– an omission that’s left analysts and industry stakeholders puzzled.

“The thinking was when this original deal was signed between the U.S. and Mexico at the end of August was that this was going to be a three party deal,” said Chad Bown, a senior fellow at the Peterson Institute for International Economics in Washington. “The amount of auto content was to be shared, coming from Canada, Mexico and the U.S. If you’re only going to have a two country deal, it would seem to me that all of that stuff would need to be written differently.”

The centrepiece of the bilateral agreement Trump touted as “an incredible deal for both parties” is an overhaul of the auto chapter. The hard-won terms would raise thresholds on regional automotive content — the amount of parts and raw materials in a vehicle that must come from American or Mexican sources — to 75 per cent from the current 62.5 per cent in NAFTA. The deal also requires 40 to 45 per cent of production to be done by workers earning at least US$16 an hour.

In North America’s highly integrated automotive supply chain, Canada is a key source of raw materials and parts and a crucial location for assembly, supplying about US$17 billion worth of auto parts to the U.S. and $2.5 billion to Mexico, said Flavio Volpe, president of Canada’s Automotive Parts Manufacturers’ Association (APMA). Were Canada to be cut out of the deal, those parts would become non-compliant – meaning they wouldn’t count toward the rules of origin requirement in the bilateral deal.

What’s more, Canada’s smelters supply almost half of the aluminum consumed in the United States, a large proportion of which ends up in cars and trucks. Indeed, out of 2,520,000 tonnes of aluminum exported from Canada to the US in 2017, roughly 1,060,000 tonnes went into the transportation industry, including passenger cars, trucks, trailers, buses, recreational vehicles, according to data from the Aluminum Association of Canada. After decades of steep declines in smelting capacity, the U.S. produces just 700,000 tonnes of the metal – making that a tough gap to close.

“So you have a current supply of $20 billion in parts that won’t apply and the number one source of aluminum in North America that won’t apply because we are NAFTA non-compliant,” said Volpe. “So it’s actually impossible to meet the current NAFTA standard without all three countries.”

Also non-compliant under the new agreement would be the large volume of cars assembled in Canada – including models produced by Fiat Chrysler, General Motors, the Ford Motor Company and Honda, said Mary Lovely, a professor of economics at Syracuse University. Of the 2.2 million autos manufactured each year in Canada, about 1.8 million are shipped to the U.S. – all of them assembled in Ontario, according to a report from economists at Scotiabank.

And then there is the requirement that 40 to 45 per cent of production occur in high wage jurisdictions where workers are paid above $16 and hour.

“I really don’t think they can get there, especially on a labour value and core parts content without Canada being part of the deal,” said Kristin Dziczek, vice president of industry, labor and economics at the Center for Automotive Research in Michigan. “That labour content rule is the harder one to hit without Canada.”

It all suggests that if the U.S. really is going to forge ahead on its deal with Mexico alone, it may need to fundamentally re-imagine its terms.

U.S. Trade Representative Robert Lighthizer held off on plans to submit final text of the US-Mexico deal on Friday, but is still pushing to get it done by Oct.1, the latest date to start a procedure that would ensure the deal is signed by the outgoing Mexican administration. Current Mexican President Enrique Pena Nieto leaves office on Dec. 1. Mexico has reportedly agreed to a side letter in its agreement with the U.S., one that guarantee an exemption from the auto tariffs but would cap the amount of autos it can export annually. The US is widely expected to demand the same sort of letter from Canada.

Meantime, Trump has publicly upped the stakes with those tariff threats of 10 per cent on auto parts and 25 per cent on finished vehicles.

“But that’s part of the tactic, right?” said Lovely. “They are trying to threaten the Canadians into signing a deal that at this point the Canadians don’t want to sign and there is a gigantic bogeyman in the room which is the 25 per cent tariff on Canadian auto imports.”

U.S. President Donald Trump speaks on the telephone via speakerphone with Mexican President Enrique Pena Nieto to announce that the two countries had reached a preliminary trade agreement on Aug. 27.

U.S. President Donald Trump speaks on the telephone via speakerphone with Mexican President Enrique Pena Nieto to announce that the two countries had reached a preliminary trade agreement on Aug. 27.

A tariff of the size Trump has floated would have a severe impact on Canada and especially Ontario, costing the province 160,000 jobs, causing GDP to stagnate and reducing long-run economic capacity, according to a report from TD Economics. It would hurt the United States too, boosting the price of cars by US $455 to $6,875 depending on the level of tariff or quota, where the vehicle was assembled, and whether the policy provides exemptions for automotive trade with Canada and Mexico, according to an analysis by the Center for Automotive Research.

But that doesn’t mean Trump won’t do it, says Bown.

“I think the big concern is he’s shown no inhibitions in imposing tariffs, even when they are harmful to the North American region’s competitiveness writ large,” he said. “He’s shown that he is willing to make decisions that are bad for American businesses, and I think people have reason to be worried he might do the same thing on automobiles coming in from Canada. To be clear though, that would be equally problematic for all the American parts companies in the upper Midwest, in Michigan and those kinds of states that supply the plants in Ontario with parts.”

Roughly 60 per cent of parts that go into Canadian cars are American made and Canada has said it will retaliate if the auto tariffs are applied, suggesting U.S. jobs could be in danger too.

At that point, some observers, including Volpe, believe U.S. lawmakers will step in to curb Trump’s power. Bown is less convinced, pointing out that Congress has yet to push back effectively against Trump’s tariffs on steel and aluminum.

“It’s election season and especially on the Republican side there isn’t a huge appetite to get into a giant fight with President Trump, especially given that he’s a very skilled politician and the people who have come out against him he goes after in not nice ways,” Bown said. “So it’s challenging. It doesn’t excuse it but it does explain it.”

“The feedback ripple effect would be really, really harmful but President Trump has done that kind of thing before so you can’t necessarily rely on economic logic to prevent that kind of policy decision,” he said.

Toll seen rising after Indonesian quake, tsunami kills hundreds

More than 400 people were confirmed killed, many swept away as tsunami waves triggered by a massive earthquake crashed into the Indonesian island of Sulawesi, and authorities expected the toll to rise sharply on Sunday as news arrives from remote areas.

Best Buy stocked an unannounced Chromecast ahead of Google’s hardware event

Google’s big hardware event, scheduled for October 9, is expected to feature the new Pixel 3 and Pixel 3 XL phones. But now we know that Google will probably reveal a third-generation model of Chromecast, thanks to one recent Best Buy customer who discovered the device on store shelves.


“GroveStreetHomie” detailed his experience on a Reddit post entitled “I think I bought the 3rd gen Chromecast too early.”

According to the Reddit post, the customer went to Best Buy earlier to pick up a Chromecast for a new TV. That’s when “GroveStreetHomie” noticed the packaging and design was different from an earlier version.

The cashier wasn’t able to scan the item because it wasn’t in the system yet. The release date was labeled October 9 — the same day as the 2018 Google hardware event.

“But since I already had it in my hand and was the same price as the 2nd generation Chromecast, they let me have it under the old SKU,” the post read.

This new unannounced Chromecast is apparently thicker than the second-generation model. The Chrome logo has been replaced with Google one. The new device still has a micro-USB. The HDMI connector on the tip and base has been removed, according to the user.

Some iPhone XS and iPhone XS Max Devices Won’t Start to Charge While Screen is Turned Off

A number of iPhone XS and iPhone XS Max owners in the Apple Support Communities and MacRumors Forums report that the devices fail to start charging when a Lightning cable is plugged in while the screen is turned off.

As with many crowdsourced issues, experiences vary. In most cases, the iPhone XS or iPhone XS Max begins charging once the user wakes the device by tapping or raising the screen. However, some users report having to both wake the iPhone and disconnect and reconnect the Lightning cable to get a charge.

In rarer cases, the iPhone stops responding entirely at some point after a Lightning cable is plugged in while the screen is turned off.

Lewis Hilsenteger demonstrated the issue on his popular YouTube channel Unbox Therapy today by plugging a Lightning cable into one iPhone X, four iPhone XS, and four iPhone XS Max units. While the iPhone X began to charge, it appears two of the iPhone XS units and three of the iPhone XS Max units did not.

Unbox Therapy’s video uses the hashtag #ChargeGate

Affected customers have documented the issue in at least a dozen discussion threads across the web, including the Apple Support Communities, MacRumors Forums, Reddit, Twitter, YouTube, and other forums and platforms. It’s unclear how widespread the issue is at this time, but not everyone is affected.

Some users have speculated the issue could be related to USB Restricted Mode, introduced in iOS 11.4.1, which prevents an iPhone, iPad, or iPod touch from communicating with USB accessories via the Lightning connector if one hour or longer has passed since the device was last unlocked.

However, while USB Restricted Mode is enabled by default in iOS 12, Hilsenteger and others say disabling the feature does not help. Apple also has a support document that ensures “your iPhone, iPad, or iPod touch charges as usual when it’s connected to a USB power adapter” with the feature toggled on.

In the YouTube comments on the Unbox Therapy video, some users claim to be experiencing the same issue on older iPhones and iPads, so there is a decent chance this is a software issue that could be addressed in a future iOS 12 update. In the meantime, there does not appear to be a workaround.

If you are affected by this issue, we recommend contacting Apple Support. Apple frequently passes on device information and diagnostics to its engineering teams to address potential bugs like these, so all feedback helps.

Apple did not respond to multiple requests for comment, but we’ll update this article if we receive any information.

Related Roundup: iPhone XS
Buyer’s Guide: iPhone XS (Buy Now)

Discuss this article in our forums