--:-- [Caitlin McCabe: Host]
Caitlin McCabe: This podcast is brought to you by Dynatrace, the leader in AI-powered observability, with analytics, automation, and next-level intelligence on one unified platform. Dynatrace delivers the visibility and real-time insights you need to deliver better, more secure software, successful AI initiatives, and innovation at the speed of business. Turn data into decisions that drive your business forward with AI-powered observability where it counts. Learn more at dynatrace.com slash WSJ. That's www.dynatrace.com slash WSJ.
--:-- [Caitlin McCabe: Host]
Caitlin McCabe: Flight delays and cancellations loom for travelers as the government shutdown forces 40 major airports to cut traffic. Plus, the fate of Elon Musk's controversial $1 trillion Tesla pay package will finally be decided today. And homebuilders warn of a major shift in the housing market. Because the supply of existing homes for sale has been so tight, builders have been building a lot more new homes than usual. But the fact that they can't sell when they're offering a 4% mortgage rate is a really bad sign that underlying demand is very weak.
--:-- [Caitlin McCabe: Host]
Caitlin McCabe: It's Thursday, November 6th. I'm Caitlin McCabe for The Wall Street Journal, and here's the AM edition of What's News, the top headlines and business stories moving your world today.
--:-- [Allison Pohle: Guest]
Allison Pohle: The Federal Aviation Administration has ordered traffic to be reduced by 10 percent at 40 major airports while air traffic controllers continue to work without pay. The FAA is set to name the 40 locations today after briefing those affected. Aviation analytics company Serium says as many as 1,800 flights could be impacted tomorrow. Travelers should expect delays and cancellations.
--:-- [Allison Pohle: Guest]
Allison Pohle: The reason this is happening is because the transportation department wants to take some of the pressure off of air traffic controllers during this time where they have not been paid for more than 35 days. We know it's a really stressful job. It's also stressful to not know when your next paycheck is coming. So reducing the capacity at 40 major airports is a way that the transportation department is trying to address this and make sure that the airspace stays safe.
--:-- [Allison Pohle: Guest]
Allison Pohle: It's not fully clear how long these restrictions will last, but if you're flying soon, she advises checking your flight status and arriving at the airport early. Airlines for America, a trade group representing commercial carriers, said that already more than 3.4 million people have been affected by delays and cancellations due to staffing shortages during the shutdown.
--:-- [Alexa Van Brunt: Guest]
Alexa Van Brunt: A federal judge has ordered the government to significantly improve the conditions at an immigration detention facility in suburban Chicago. The judge very quickly determined that the conditions at the Broadview Heights facility were unconstitutional disgusting and were unacceptable.
--:-- [Alexa Van Brunt: Guest]
Alexa Van Brunt: We know that immigrants in the facility, which is designed to be a temporary holding spot, are being held for days or weeks in unsanitary conditions without access to legal counsel. U.S. District Judge Robert Gettleman seemed to agree, saying that to sleep on the floor next to an overflowed toilet, that's obviously unconstitutional.
--:-- [Becky Peterson: Guest]
Becky Peterson: The government must provide bedding, hygiene supplies, daily showers, clean toilets, and three daily meals at the facility. He said he crafted his order to be as workable as possible.
--:-- [Becky Peterson: Guest]
Becky Peterson: And we've learned that President Trump has recently expressed reservations to top aides about launching military action to oust Venezuelan President Nicolás Maduro, fearing that strikes might not compel the autocrat to step down. Officials told the journal that Trump continues to ask aides about military options, leading some to suggest he might eventually order an attack.
--:-- [Becky Peterson: Guest]
Becky Peterson: But they said even basic questions like whether the goal is to remove Maduro or compel him into concessions remain undecided. Trump has reportedly been presented with three options to increase pressure on Maduro, which range from stepping up sanctions and increased tariffs on countries that buy Venezuela's oil to a campaign of airstrikes or covert operations aimed at government and military facilities and personnel.
--:-- [Becky Peterson: Guest]
Becky Peterson: It's a big day for Tesla as shareholders are set to decide whether to approve a record-setting pay package for its CEO, Elon Musk, that could ultimately give him new stock worth $1 trillion and a roughly 25% stake in the company. But as our Kate Bolvin explains before claiming his prize, Musk has to clear a number of complex hurdles.
--:-- [Becky Peterson: Guest]
Becky Peterson: According to the Journal's Tesla reporter Becky Peterson, the EV maker must hit both a market cap milestone starting at $2 trillion and achieve one of a dozen operational milestones. To get this award, he would have to grow the company and expand its robotics business and its AI business.
--:-- [Becky Peterson: Guest]
Becky Peterson: Some of the goals he would have to hit are selling one million robots and growing Tesla's full self-driving subscriptions. He also would need to sell more electric vehicles which is something that he has been trying to move the company away from.
--:-- [Becky Peterson: Guest]
Becky Peterson: So how likely is it that Tesla backers will greenlight this punchy new pay packet? I asked Becky if we have a sense of how shareholders are feeling ahead of today's vote. We have a little bit of information from shareholders.
--:-- [Becky Peterson: Guest]
Becky Peterson: Norway's Sovereign Wealth Fund said that they won't be supporting the package. They are the sixth largest institutional shareholder. Charles Schwab, on the other hand, which I believe is 13th largest institutional shareholder, said they will be supporting the plan.
--:-- [Becky Peterson: Guest]
Becky Peterson: Most of the other institutions keep quiet about how they vote until after the annual meeting. To find out the results, we'll have to wait until this afternoon, when Musk is expected to take the stage at Tesla's annual shareholder meeting.
--:-- [Becky Peterson: Guest]
Becky Peterson: In the past, these events have been a chance to get people excited about the future of Tesla. And as Becky explains, the EV Makers Board has framed this pay package as existential for the company.
--:-- [Becky Peterson: Guest]
Becky Peterson: Musk has said that if he doesn't get it, he would leave. He said he only wants to build a robot army at Tesla if he has a 25% stake at the company. Musk has this vision of humanoid robots working in people's homes, working in factories and taking over these core jobs in our economy.
--:-- [Becky Peterson: Guest]
Becky Peterson: They have a new philosophy called sustainable abundance and are basically saying that if Musk doesn't get this pay package, that dream of a future won't happen.
--:-- [Becky Peterson: Guest]
Becky Peterson: Whether or not Musk will actually leave, who knows. But I don't think we're going to be in a position to find out. Shareholders at Tesla enthusiastically back the board at the general meeting, and I don't expect this year to be any different.
--:-- [Becky Peterson: Guest]
Becky Peterson: That said, this is a huge pay package. One trillion dollars is at stake. And while he has to earn it, and that's over 10 years, that is a huge package that's just unheard of.
--:-- [Carol Ryan: Guest]
Carol Ryan: The UPS cargo plane that crashed in Louisville on Tuesday was 34 years old and needed a critical repair on its fuel tank in September. The cause of the crash in Kentucky which killed at least 12 people is still under investigation but the plane black boxes have now been located.
--:-- [Carol Ryan: Guest]
Carol Ryan: A video of the plane taking off showed one engine on fire before it crashed just beyond the runway. We've also learned that one of the jet's engines detached from the left wing during takeoff and was found on the ground at the airport.
--:-- [Carol Ryan: Guest]
Carol Ryan: Authorities are still searching for missing people but aren't expecting to find anyone alive. The flight's three crew members remain unaccounted for. UPS didn't immediately respond to requests for comment and said in a statement that it was working with the authorities on their investigation of the incident.
--:-- [Carol Ryan: Guest]
Carol Ryan: And while homebuyers have been contending with a lack of supply in recent years, there are now signs that the property market is loosening. The number of new but unsold homes in the U.S. is now as high as it was back in the summer of 2009.
--:-- [Carol Ryan: Guest]
Carol Ryan: Heard on the street columnist Carol Ryan says builders are struggling to find buyers in several parts of the country. In Texas and Florida, regular people have started putting their homes up for sale too. The number of listings in these markets is back to pre-pandemic levels or even higher.
--:-- [Carol Ryan: Guest]
Carol Ryan: So builders have to compete with regular homeowners for a smaller, more cautious pool of buyers. But in In places like Southern California, the job market has slowed, especially for high-paying jobs, and foreign buyers have pulled back from the market.
--:-- [Carol Ryan: Guest]
Carol Ryan: Changes to the H-1B visa rules have made workers who have come to the U.S. from overseas much worried about putting their cash into a home. Carol says that's despite homebuilders offering several incentives to potential buyers.
--:-- [Carol Ryan: Guest]
Carol Ryan: At the moment, you can get a mortgage rate of around 4% from one of the big builders, which is much lower than what you get in the open market. And homebuilders, they've also been cutting prices to try to shift homes.
--:-- [Carol Ryan: Guest]
Carol Ryan: The incentives, they aren't working as well as they'd hoped and demand is really weak. So they've actually decided to slow down construction rather than add to the pile of unsold homes that they already have.
--:-- [Carol Ryan: Guest]
Carol Ryan: Carol added that institutional investors are not yet stepping in to snap up this glut of unsold homes because they're waiting for bigger discounts akin to 20 or 30 percent off the regular buyer's price.
--:-- [Caitlin McCabe: Host]
Caitlin McCabe: And that's it for What's News for this Thursday morning. Heads up, we've got a special bonus episode coming for you later today. In the latest What's News and earnings, we'll take a look at how automakers are grappling with tariffs, supply chain disruptions, and what some are calling the EV winter. That'll be in the feed around midday, and we'll have the PM What's News after that.
--:-- [Caitlin McCabe: Host]
Caitlin McCabe: Today's show is produced by Kate Bullivant, our supervising producer with Sandra Kilhoff. And I'm Caitlin McCabe for The Wall Street Journal. We'll be back tonight with a new show. Until then, thanks for listening.
