How Honda Is Trying to Recover From an EV Bust

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0:33After a big bet on electric vehicles went wrong, Honda is facing its toughest challenge in decades. Things haven't been this bad for Honda in basically forever. Plus, British investors are spooked after news of a looming contest between Prime Minister Keir Starmer and left-wing politician Andy Burnham. He said last year we need to get beyond this thing of being in hock to the bond market, and that freaked out a lot of bond market investors. And the Wall Street Journal has learned that SpaceX is planning to go public in a month in what stands to be the biggest IPO ever. It's Friday, May 15th. I'm Alex Osola for The Wall Street Journal.

1:09This is the PM edition of What's News, the top headlines and business stories that move the world today.

1:19Disgraced Hollywood producer Harvey Weinstein's third New York trial has ended in a mistrial. An aspiring actress had alleged that Weinstein raped her in a Manhattan hotel room in 2013. Now, a jury has deadlocked for the second time over whether Weinstein raped the woman after a 2020 conviction was overturned by a higher court. Prosecutors have 30 days to decide whether to retry the case. Weinstein is still expected to be sentenced in the coming months on a previous criminal sexual act conviction. He faces up to 25 years. And he was also sentenced in California to 16 years in prison for sex crimes.

1:54He's appealing that conviction.

1:59Across the pond, a political drama has been brewing and hitting the markets in the UK. Last night, the left-wing mayor of Greater Manchester, Andy Burnham, said he planned to stand for election to Parliament. That opened a path for him to take on current Prime Minister Keir Starmer. It would be the first time a sitting Labour Party prime minister has been challenged while in office. Journal reporter Chelsea Delaney joins me now from London. Chelsea, I want to talk about what these markets are doing. U.K. bonds have slid and U.K. government borrowing costs have climbed today to their highest level since the 2008 financial crisis.

2:32What is investors' concern here? Investors are worried that Keir Starmer is going to lose his position as prime minister. And whoever replaces him, that person is going to have to increase spending to sort of galvanize the public. So the worry is that this is going to lead to more borrowing for the U.K., more spending. And the U.K. comes into this with extremely fragile government finances. So this political drama is really the last thing that the U.K. needs right now. And that's why we're seeing this have such a big impact on the U.K. markets. How much of investors' reaction has to do with their concern about having Burnham in particular in the PMC?

3:12Or is it losing Starmer? We've seen this big sell-off over the past day after it became clear that Andy Burnham was making a bid at the prime minister role. So it's clear that what we're seeing over the past 24 hours is related to Burnham. And Burnham, he said last year, we need to get beyond this thing of being in hock to the bond market. And that freaked out a lot of bond market investors because the UK has a lot of debt and needs to borrow a lot of money. And it wants its politicians to really be keeping the government finances in line. And so I think a lot of investors are worried that he is not going to be as disciplined about government spending as Starmer and his cabinet have been.

3:57By our count, the U.K. has had five prime ministers in seven years. What has been driving this instability? The instability is not totally unique to the U.K. across Europe and across the world. You've seen political systems become much more polarized and the UK has a lot of constraints on it just because the economy has been basically stagnating for a long time. Debt levels are high and they have a very large welfare state that it's getting very expensive to continue funding. So these politicians have little room to make big changes and people feel very unhappy about that. That was WSJ reporter Chelsea Delaney.

4:36Thanks, Chelsea. Thanks for having me. And back to the politics on this side of the Atlantic, Louisiana voters go to the polls tomorrow. On the ballot for the Senate Republican primary is Representative Julia Letlow, who's trying to unseat three-term Senator Bill Cassidy. Trump has endorsed Letlow, who appears to be leading in the polls. It's a test of President Trump's continued sway over the GOP and a sign of where the party might be headed. In Washington, Homeland Security Secretary Mark Wayne Mullen has been cleaning house in his department. He's fired officials closely associated with his predecessor, Kristi Noem, and reviewed her spending decisions.

5:12For more on how those efforts are going, I'm joined now by WSJ reporter Michelle Hackman. Michelle, Mullen has been in this job at DHS for almost two months now. He took over a department that was in turmoil. Noem was pushed out, and there were regular protests against ICE after some high-profile deaths of Americans. Has Mullen carried out his agenda of making DHS more low-key? I think the most noticeable difference is we've been told that he has directed ICE not to launch any major operations. It's hard to talk about sort of what's not happening, but we haven't seen any really major arrest operations in big cities like Minneapolis since January.

5:49So I think he has actually succeeded in making DHS a slightly quieter and less noticeable agency. But hundreds of immigrants are getting arrested and deported every day. People are being arrested at their homes, outside their homes, at their workplaces. It's just not something that is happening as publicly to be caught by television cameras. On the campaign trail, Trump said he could deport as many as 20 million people. The administration hasn't come anywhere close to that so far. And now you're reporting that the number of daily ICE arrests, which, as you say, is still happening, but the number has fallen by several hundred since last winter.

6:28What has the reaction been in the White House to that information? There are still many arrests happening, but it's not nearly as many as Trump promised. President Trump himself have expressed, you know, we went too far. We need to pull back a little bit. And that's what we're seeing right now. But certainly members of Trump's base are really upset about this because they think, you know, this is a core promise he made. Our voters are not going to come support us if we don't fulfill this promise. That was WSJ reporter Michelle Hackman. Thanks, Michelle. Thank you. And we should note that a DHS spokeswoman told WSJ that ICE wasn't slowing down.

7:03Coming up, the latest AI investments from Bill Ackman's bet on Microsoft to Anthropik's multibillion-dollar round of fundraising. And the date that SpaceX has in mind for its massive IPO. Those stories and more after the break.

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7:56Japanese carmaker Honda has managed to stay profitable through a global financial meltdown, natural disasters, and the pandemic. Now, though, it's facing some of its steepest challenges in the nearly 70 years it's been a public company. This week, it reported a$2.7 billion annual loss, its first as a public company. Sean McLean covers autos for The Journal and joins me now. Sean, it seems like one big challenge for Honda is with its electric vehicles in the U.S. That annual loss that I mentioned came in part from a$10 billion loss for scrapping its EV plans. What happened there? It's very bad timing for Honda.

8:31So what they said was that they had locked in on a plan to basically switch their entire lineup over to EVs by the time 2040 rolled around. And what that entailed was building new factories, building new assembly lines, lining up new models, and they'd bought expensive pieces of equipment. And all of those things were rolling in to Honda around 2024 and early 2025. And what happened then? Well, we had a change in leadership in the U.S. And all of those policies that were designed to encourage people to buy EVs went away. And as a result, EV sales plummeted. And Honda says that they realized that they had two choices.

9:09They could try to sell these EVs at a loss, or they could cancel the entire program and eat a massive write-down. So how is the company confronting these challenges? Honda is bringing to market next year two new hybrid models. And they're trying to employ some of the technology that they developed for their EVs and roll them out in new hybrids. Now, hybrids are one of the segments of the car market in the U.S. that are growing rapidly. These vehicles, even if they're SUVs, get anywhere between 35 to 50 miles per gallon. And with gas being where it is, certainly people are going to want to buy them.

9:43So Honda's trying to inject a little bit of pep into their financial engine by launching some new hybrid models quickly. That was WSJ reporter Sean McLean.

9:55In tech, Bill Ackman's Pershing Square has taken a new stake in Microsoft. Ackman said today that investors were undervaluing Microsoft, especially its partnership with OpenAI. AI giant Anthropic is also winning new investments. The journal has learned that Anthropic is raising more than$30 billion at a$900 billion valuation. The deal hasn't closed, and the company could end up raising significantly more. Anthropic raised another$30 billion just three months ago and has raised more than$90 billion since the beginning of 2025. It's been fundraising ahead of an expected IPO. WSJ has learned that SpaceX has a date in mind for its own IPO, June 12th.

10:34It's expected to be the biggest initial public offering of all time, with Elon Musk's rocket company aiming to raise as much as$80 billion or more. That's only a month away, but the timing could still change. Markets today were all about bonds. You already heard about how a messy political situation in the UK is driving up bond yields there. Well, in the U.S., the 10-year Treasury yield had its biggest one-day jump in more than a year. The 30-year yield closed at its highest level in nearly two decades. Investors are worried that a prolonged impasse in the Middle East war will keep oil prices high and make inflation even worse.

11:11The bond market action hurt investors' desire for stocks. Chip stocks in particular sold off, coming after a rally that's been going strong for the past month. In overall trading today, all the indexes fell more than 1%. The Nasdaq led the losses, dropping 1.5 percent.

11:31In New York, the country's busiest commuter railroad may grind to a halt tonight. Rail workers at the Long Island Railroad are expected to strike at midnight over their pay. And if there's no breakthrough in the bargaining, there could be some painful commutes for hundreds of thousands of New Yorkers next week. The railroad's operator, the MTA, says it has planned contingency shuttle buses, but it's already warning that they will be insufficient. The MTA is asking people to work from home if there's a strike. And that's What's News for this week. Tomorrow you can look out for our weekly markets wrap-up, What's News in Markets.

12:04Then on Sunday we'll be headed to Pennsylvania to see what high prices for groceries and gasoline could mean for a competitive house race there. That's in What's News Sunday. And we'll be back with our regular show on Monday morning. Today's show is produced by Danny Lewis and Anthony Bansy with supervising producer Tali Arbel. Michael LaValle wrote our theme music. Aisha El-Muslim is our development producer. Chris Zinsley is our deputy editor. And I'm Alex Osola. Have a great weekend and thanks for listening.

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