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Red Lobster Seeks Bankruptcy Protection Days After Closing Dozens Of Restaurants

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Red Lobster seeks bankruptcy
Red Lobster seeks bankruptcy | AP

With innovations like popcorn shrimp and “endless” seafood offers, Red Lobster, the casual dining restaurant that popularized seafood, has filed for Chapter 11 bankruptcy protection.

The 56-year-old chain filed late on Sunday following the closure of numerous locations.

“Red Lobster’s best course of action in the future is this restructure. CEO Jonathan Tibus stated, “It enables us to overcome multiple operational and financial obstacles and come out stronger and refocused on our growth.” Expert in corporate reorganization, Tibus assumed the company’s senior position in March.

Red Lobster seeks bankruptcy

Red Lobster seeks bankruptcy | Pixa Bay Image

Red Lobster Seeks Bankruptcy Protection Days After Closing Dozens Of Restaurants

Red Lobster announced that its restaurants will stay open during the bankruptcy process, which aims to streamline operations, close locations, and explore a sale. As part of the filing, Red Lobster entered into a “stalking horse” arrangement, which means it intends to sell the company to a company created and managed by its lenders.

According to Aaron Allen, the founder of the restaurant consulting business Aaron Allen & Associates,s bankruptcy was the result of two decades of problems for the company. The company has faced rising competition from quicker-moving, less expensive restaurants like Panera and Chipotle.

Red Lobster occasionally drops its prices to compete, a frequently catastrophic strategy. When crab prices increased in 2003, the company lost millions of dollars on an all-you-can-eat “Endless Crab” campaign, according to Allen. Twenty years later, the chain repeated the same strategy with an “Ultimate Endless Shrimp” campaign.

“It’s an interesting case study in corporate food service that they would have this kind of corporate amnesia,” Allen remarked.

He claimed it saw greater success after Red Lobster rebranded itself as an upscale eatery in the middle of the 2000s. It remodeled stores and increased pricing. However, it continued to face challenges from shifting consumer preferences and growing labor and leasing expenses.

Allen stated, “This slow-moving train wreck has been in motion for the past 20 years.”

Based in Orlando, Florida, Bill Darden started the resturant to lower costs and increase the accessibility of seafood restaurants for families.

Red Lobster seeks bankruptcy

Red Lobster seeks bankruptcy | AP Image

Red Lobster Seeks Bankruptcy Protection Days After Closing Dozens Of Restaurants

In 1938, Darden launched The Green Frog in Waycross, Georgia, marking his entry into the restaurant industry. Even though it was against the law then, he dared not separate the restaurant’s guests based on race. Again, he let patrons seat wherever they pleased when he launched the first location in Orlando in 1968.

In 1970, Darden sold it to General Mills, where he remained an executive and continued to operate restaurants. Afterward, General Mills founded Darden Restaurants, which owns Olive Garden and several other brands. In 1995, Darden Restaurants separated from General Mills.

Red Lobster attracted hordes of devotees for meals like lobster linguini and its buttery Cheddar Bay biscuits

Nobody who was born in the world could not enjoy Red Lobster cheddar biscuits. In her memoir “Bossypants,” comedian and actress Tina Fey stated, “Anyone who claims otherwise is a liar and a socialist.”

However, the restaurant needed help to attract younger patrons and stay competitive with other eateries. In 2014, Darden Restaurants sold to a private equity firm. One of the biggest seafood suppliers in the world, Thai Union Group, made its initial investment in Red Lobster in 2016 and increased it again in 2020.

Then, during its “Ultimate Endless Shrimp” promotion last fall, they lost millions of dollars by charging $20 for an all-you-can-eat shrimp feast.

In an earnings call with investors, Thai Union Group’s chief financial officer, Ludovic Garnier, stated, “We knew the price was cheap, but the idea was to bring more traffic in the restaurants.

Garnier reported that restaurant traffic increased as a result of the transaction. However, more customers than Red Lobster had anticipated chose the $20 offer, and “we don’t earn a lot of money at $20,” he said. Thai Union Group reported a $19 million loss from Red Lobster for the first nine months of 2023.

Thai Union Group declared in January that it would sell its minority stake in Red Lobster. According to CEO Thiraphong Chansiri, the COVID-19 epidemic, business challenges, and growing operating expenses have severely impacted the restaurant chain and resulted in “prolonged negative financial contributions to Thai Union and its shareholders.”

Red Lobster seeks bankruptcy

Red Lobster seeks bankruptcy | AP – VOR News Image

Red Lobster Seeks Bankruptcy Protection Days After Closing Dozens Of Restaurants

According to a statement made last week by restaurant liquidator TAGeX Brands, the equipment from more than 50 recently closed Red Lobster locations will be up for sale. As a result of the restaurant closures, which are occurring in over 20 states, Red Lobster’s footprint is being diminished in places such as Denver, San Antonio, Indianapolis, and Sacramento, California.

Allen anticipates that due to the bankruptcy proceedings, 700-restaurant network will decrease by one-third to half. All that many prospective purchasers seek is the chain’s real estate.

He predicted the buyer would likely want to keep Red Lobster the same.

In the court statement, Red Lobster stated that its assets are believed to be between $1 billion and $10 billion, with over 100,000 creditors. The corporation’s liabilities are between $1 billion and $10 billion.

SOURCE – (AP)

Kiara Grace is a staff writer at VORNews, a reputable online publication. Her writing focuses on technology trends, particularly in the realm of consumer electronics and software. With a keen eye for detail and a knack for breaking down complex topics, Kiara delivers insightful analyses that resonate with tech enthusiasts and casual readers alike. Her articles strike a balance between in-depth coverage and accessibility, making them a go-to resource for anyone seeking to stay informed about the latest innovations shaping our digital world.

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Former Boeing Inspector Alleges ‘Scrap’ Parts Ended Up On Assembly Lines

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Boeing | CNN Image

A former Boeing quality-control manager claims that for years, workers at the company’s 787 Dreamliner facility in Everett, Washington, routinely retrieved parts deemed unsuitable for flight from an internal scrap yard and reassembled them on factory assembly lines.

Merle Meyers, a 30-year Boeing veteran, described to CNN an elaborate off-the-books practice used by Boeing managers at the Everett factory to meet production deadlines, including the removal of damaged and improper parts from the company’s scrapyard, storehouses, and loading docks.

boeing

Boeing | CNN Image

Former Boeing Inspector Alleges ‘Scrap’ Parts Ended Up On Assembly Lines

This year, several whistleblowers have raised concerns about Boeing factory lapses, including an official federal complaint from a current employee alleging that Boeing concealed potentially defective parts from Federal Aviation Administration inspectors and that some of those parts may have ended up in aircraft.

This comes on the heels of a string of public safety issues that have shaken the firm.

Meyers argues that the errors he witnessed were intentional, organized attempts to defy quality control mechanisms and meet rigorous production timetables.

Meyers claims that for more than a decade, starting in the early 2000s, about 50,000 parts “escaped” quality control and were utilized to manufacture airplanes. These parts range from minor components like screws to more complicated assemblies like wing flaps. For example, a single Boeing 787 Dreamliner contains almost 2.3 million pieces.

According to Meyers, most rejected parts were often painted red to indicate they were unfit for assembly lines. However, in certain circumstances, this did not prevent them from being loaded onto planes being constructed, he claimed.

“It’s a huge problem,” Meyers told CNN. “A core requirement of a quality system is to keep bad parts and good parts apart.”

Airplanes are highly engineered equipment with far greater safety standards than trains or automobiles. Their components, materials, and production procedures are heavily regulated.

Meyers, whose job was to uncover quality problems at Boeing, claims he was forced out last year and was given a severance settlement he cannot discuss due to a confidentiality agreement he signed with Boeing.

Since leaving the business, Meyers has interacted with current Boeing employees. He believes that while employees no longer remove parts from the scrapyard, the practice of putting other unauthorized parts in assembly lines remains.

“Now they’re back to taking parts of body sections – everything – right when it arrives at the Everett site, bypassing quality, going right to the airplane,” Meyers told me.

According to company correspondence dating back years, Meyers frequently raised the matter to Boeing’s corporate investigations team, citing what he calls flagrant violations of Boeing’s safety guidelines. However, Meyers claims that investigators consistently failed to enforce those restrictions, including dismissing “eye witness observations and the hard work done to ensure the safety of future passengers and crew,” he said in an internal 2022 email shared with CNN.

Meyers has also expressed concerns about Boeing’s quality difficulties to federal investigators, a Senate committee, and the New York Times.

Boeing did not deny Meyers’ claims in a CNN response. The corporation stated that it investigates “all allegations of improper behavior, such as the unauthorized movement of parts or the mishandling of documents,” and makes corrections as needed.

A swirl of controversy.
Meyers’ charges come as Boeing is embroiled in a scandal over its safety culture, including a criminal inquiry into whether it misled the FAA during the 737 Max’s 2017 approval. Two 737 Max crashes killed 346 people in 2018 and 2019. As CNN reported over the weekend, the Justice Department is negotiating an agreement with Boeing to address potential criminal culpability.

In January, a 737 Max’s door stopper blew off in mid-flight, provoking a wave of intensive scrutiny of the aircraft manufacturer, including federal and congressional inquiries. Boeing CEO Dave Calhoun has stated that he will step down before the end of the year. To address its safety concerns, Boeing has agreed to buy supplier Spirit AeroSystems.

Since January, other whistleblowers have come forward with new charges against Boeing.

Sam Mohawk, a current Boeing quality investigator, filed an official complaint last month, citing “a number of non-compliant parts making their way back to the airplanes for installation.” A Senate subcommittee probing Boeing made his complaint to the Occupational Safety and Health Administration publicly available.

According to Mohawk’s complaint, the disappearance of nonconforming parts continues. “Boeing is still losing parts to this day,” his legal complaint states.

This week, a different whistleblower, Richard Cuevas, expressed concerns that Boeing and its key supplier, Spirit Aerosystems, utilized compromised parts and made alterations to “reduce bottlenecks in production and speed up production and delivery.”

Pulled from the scrapyard.
Boeing management’s pressure to keep production lines flowing is no secret. The 245-page House investigation report into the 737 Max deadly crashes includes a full chapter titled “Production Pressure.” Following the January 5 door plug blowout on a 737 Max, the FAA limited Boeing’s production line speeds.

Meyers recalls a high-pressure situation at the Everett factory, where assembly teams competed to find the necessary parts.

Meyers claims that after hours, employees would ask security guards to unlock doors and slip parts out of supply rooms or take newly delivered components that awaited quality tests by Meyers’ team. Similar parts meant for a different airplane model were available for the taking.

According to paperwork Meyers shared with CNN, in the early 2000s, Boeing personnel began collecting parts from the company’s scrapyard in Auburn, Washington, roughly an hour south of the nearly 100-acre industrial complex where Dreamliners were manufactured. According to Meyers, nonconforming items are only sent to the reclamation yard once rejected.

Meyers states that by 2002, staff at the reclamation yard were anxious that they would be held liable if scrap pieces were later discovered on an aircraft. So they requested staff to sign off on the removals, but their form was not an official Boeing document, so the removal was never recorded in the company’s quality management database.

boeing

Boeing | CNN Image

Former Boeing Inspector Alleges ‘Scrap’ Parts Ended Up On Assembly Lines

“These are bootleg forms that are not Boeing authorized,” Meyers confirmed. “The procurement organization would go down to our scrap reclamation yard and intimidate the employees there and say we need these parts bad.”

Lack of enforcement
Meyers claims he routinely flagged infractions for investigation but deemed the company’s attempts to investigate them inadequate.

“Their investigations are about analyzing excuses by process violators, and not taking action against those committing compliance violations,” Meyers stated in a 2002 email to Boeing’s corporate HR.

According to Boeing, Meyers worked on a quality team that “plays an important role in identifying issues, improving processes, and strengthening compliance in our factories.”

“We appreciate employees who raise their voice and we have systems in place to encourage them to speak up confidentially or anonymously,” according to a statement.

Meyers claims his Boeing superiors did not know how to deal with employees who had problems and that after decades with the company, he was eventually given a list of management complaints about his performance and offered a vague option to improve – or take a monetary compensation and quit.

“I was given a list of things to correct – my behaviors and my practices as a manager,” he told me. “It seemed like a personal development program…” But there was a financial incentive – or you could take the money and quit.”

Meyers stated that he never planned to become a whistleblower, but is now working with anyone who ask, including a Senate subcommittee investigating Boeing, to build momentum for reform.

SOURCE – CNN

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Google’s Greenhouse Gas Emissions Are Soaring Thanks To AI

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Google's Latest Spam Update Met with Widespread Criticism Amidst a Year of Turbulent Changes

As Google has pushed to incorporate artificial intelligence into its main businesses, with sometimes disappointing results, a problem has emerged behind the scenes: the systems required to run its AI tools have significantly increased the company’s greenhouse gas emissions.

Artificial intelligence systems require a large number of computers to function properly. Data centers, essentially warehouses full of powerful computing equipment, need massive amounts of energy to process data and handle the heat generated by all of those machines.

google

Google | CNN Image

Google’s Greenhouse Gas Emissions Are Soaring Thanks To AI

According to Google’s annual environmental report, its greenhouse gas emissions have increased by 48% since 2019. The IT giant attributed the spike primarily to “increased data center energy consumption and supply chain emissions.”

Google now describes its aim of reaching net-zero emissions by 2030 as “extremely ambitious,” and says the vow will likely be influenced by “the uncertainty around the future environmental impact of AI, which is complex and difficult to predict.” In other words, the company’s sustainability push, which formerly contained the tagline “don’t be evil” in its code of conduct, has become more challenging due to artificial intelligence.

Like other internet companies, Google has invested heavily in artificial intelligence (AI), which is widely regarded as the next major technological revolution ready to revolutionize how we live, work, and consume information. The business has integrated its Gemini generative AI technology into some of its core products, including Search and Google Assistant, and CEO Sundar Pichai has described Google as an “AI-first company.”

However, AI has a significant drawback: the power-hungry data centers that Google and other Big Tech companies are investing tens of billions of dollars each quarter to develop to feed their AI goals.

To demonstrate how much more demanding AI models are than traditional computing systems, the International Energy Agency estimates that a Google search query requires 0.3 watt-hours of electricity on average, whereas a ChatGPT request typically consumes approximately 2.9 watt-hours. According to a study published in October by Dutch researcher Alex de Vries, the “worst-case scenario” implies that Google’s AI systems might someday consume as much electricity as Ireland per year, assuming full-scale AI adoption in their existing hardware and software.

“As we further integrate AI into our products, reducing emissions may be challenging due to increasing energy demands from the greater intensity of AI compute, and the emissions associated with the expected increases in our technical infrastructure investment,” said Google in its report, released Monday. It also stated that data center electricity use is currently outpacing the ability to bring carbon-free electricity sources online.

Google’s Greenhouse Gas Emissions Are Soaring Thanks To AI

Google expects greenhouse gas emissions to climb before declining as it invests in clean energy sources like wind and geothermal to power its data centers.

The vast amounts of water required to cool data centers to prevent overheating also pose a sustainability concern. Google plans to refill 120% of the freshwater consumed in its offices and data centers by 2030; last year, it recovered only 18% of that water, a significant increase from 6% the previous year.

Google is among the companies using AI to combat climate change. A 2019 Google DeepMind research study, for example, trained an AI model on weather forecasts and historical wind turbine data to estimate wind power availability, thereby increasing the value of renewable energy to wind farmers. The corporation has also utilized AI to recommend more fuel-efficient routes to vehicles using Google Maps.

“We know that scaling AI and using it to accelerate climate action is just as crucial as addressing the environmental impact associated with it,” according to Google’s report.

SOURCE – CNN

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Tesla Is Now An Official Chinese Government Car

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According to the state-owned media site Paper.cn, Tesla automobiles have been added to the Chinese government’s procurement list for the first time.

Tesla is the only foreign-owned electric vehicle brand listed in the Jiangsu provincial government’s buying catalog in eastern China. Other brands suggested include Volvo, which China’s Geely controls, and the state-owned SAIC.

tesla

Tesla | PixaBay Image

Tesla Is Now An Official Chinese Government Car

This means that the province’s government agencies and public organizations can purchase them as service vehicles, demonstrating China’s close partnership with Elon Musk’s company.

The development has gone viral on Chinese social media, with some questioning whether the government should consider using foreign cars.

According to an article by the state-owned National Business Daily on Thursday, the Jiangsu government attempted to alleviate such concerns by stating that the Tesla model is “a domestic car, not imported.”

Tesla, which has a large gigafactory in Shanghai, produced over 947,000 cars in China in 2023, most of which were used domestically.

The Jiangsu administration still needs to return CNN’s phone calls. Tesla’s Shanghai-made Model Y was featured in the government’s purchase catalog for 249,900 yuan ($34,377).

China has become an increasingly crucial market for Tesla, accounting for more than half of global EV sales and approximately one-quarter of its overall revenue last year.

However, the US automaker is now experiencing increased competition from Chinese rivals. In the fourth quarter of 2023, BYD overtook Tesla as the world’s largest EV seller. Tesla reclaimed its position in the first half of the year, although it is still neck and neck.

Due to surveillance and data security concerns, Tesla cars had previously been forbidden from accessing some Chinese government and military installations.

Those limitations were eased in April when a major auto organization announced that Tesla’s vehicles met China’s data security standards. Musk made the news the same day he visited Beijing and met with Premier Li Qiang, who praised Tesla as a “successful model” for the US-China partnership.

The European Commission stated on Thursday that it would impose additional duties of up to 37.6% on imports of Chinese-made electric vehicles starting Friday.

tesla

Tesla | PixaBay Image

Tesla Is Now An Official Chinese Government Car

The tariffs first announced in early June, are considered a necessary step by the EU to stop a flood of low-cost Chinese vehicles constructed with “unfair” government subsidies.

According to the Commission, Tesla, a significant exporter of Chinese-made electric vehicles to Europe, has requested a separate tariff rate calculation. The company is currently subject to an average 20.8% extra tariff as part of a group of enterprises participating in the EU’s probe.

SOURCE – (CNN)

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