By Bhanvi Satija

(Reuters) -Thermo Fisher Scientific on Wednesday signaled that a slump in demand from biotechs for its services used in making therapies and vaccines could extend into the next year, sending its shares tumbling more than 7% and weighing on the sector.

Biotechs, hit by a funding crunch due to higher interest rates, have reined in spending on drug development since the start of the year while slowing growth in China has also crimped demand for contract research services and lab equipment.

“Short term, if you’re visiting a smaller biotech customer, what you’re seeing is concerns about when the funding environment is going to improve. So, there’s a level of caution,” CEO Marc Casper said on an earnings call.

On the call, finance chief Stephen Williamson said core revenue growth and adjusted profit in 2024 will be similar to that in 2023.

The company cut its revenue expectations for this year to $42.7 billion, from $43.4 billion to $44 billion. It also forecast 2023 adjusted profit of $21.50 per share, below analysts’ estimates of $22.28.

Thermo Fisher’s 2024 comments on potential rebound from current challenges were “little bit more bearish” than expected, said Raymond James analyst Andrew Cooper.

The medical equipment maker forecast adjusted earnings of $21.75 per share in 2024, short of analysts’ estimates by $2.23.

Shares of rivals Agilent Technologies and Danaher declined between 2% and 3%.

Thermo Fisher, which has bet on deals to become a one-stop shop for its biotech and large pharmaceutical clients, said sales in its life sciences solution unit plunged about 18% to $2.43 billion, declining for all the three quarters this year.

Third-quarter revenue of $10.57 billion missed analysts’ expectations of $10.60 billion while adjusted profit of $5.69 per share topped estimates of $5.61, according to LSEG data.

(Reporting by Bhanvi Satija in Bengaluru; Editing by Shinjini Ganguli, Shounak Dasgupta and Sriraj Kalluvila)

By Ben Klayman

(Reuters) – High interest rates are derailing the ambitions of climate regulators and automakers to accelerate the shift to electric vehicles, underscored Wednesday by the scrapping of a GM-Honda partnership and a warning from a battery maker.

Electric vehicle sales are still growing strongly, but that demand is not keeping up with the expectations of carmakers and other companies that have invested billions of dollars in the EV space. Expectations for persistently higher interest rates has led companies to alter plans as they eye 2024 warily.

“EV demand next year could be lower than expectations,” Lee Chang-sil, chief financial officer at South Korean battery maker LG Energy Solution said on Wednesday, due to global economic uncertainty.

Also on Wednesday, Honda and General Motors announced they were ending a $5 billion plan to develop lower-cost EVs together just a year after announcing the effort. GM on Tuesday said it would focus near-term EV efforts on meeting demand rather than hitting specific volume targets.

“We’re taking immediate steps to enhance the profitability of our EV portfolio and adjust to slowing near-term growth,” GM CEO Mary Barra told analysts.

Investors have responded to the changed outlook. Over the last three months, the iShares Self-Driving EV and Tech exchange-traded fund has plunged more than 24%, far more than the 8.3% fall for the MSCI All-World Index, a proxy for global equities.

EV sales are growing, however. They topped 300,000 units in the United States for the first time in the third quarter, according to a Cox Automotive report. They rose 14.3% in September in the European Union and 22% in China, the world’s largest EV market.

FALLING RAW MATERIAL PRICES

Tesla CEO Elon Musk raised the alarm last week in explaining why he was slowing plans for a Mexico factory.

“I am worried about the high interest rate environment that we’re in,” he said on Tesla’s earnings conference call. “As I just can’t emphasize this enough that the vast majority of people buying a car is about the monthly payment. If interest rates remain high or if they go even higher, it’s that much harder for people to buy the car.”

Other automakers have sounded similar notes of caution.

Germany’s Volkswagen last week cut its profit margin outlook for the year, blaming negative effects for raw material hedges at the end of the third quarter. Some of those materials are used in EV batteries.

Like many other industrial firms, carmakers hedge against commodity price swings, and with EV demand slowing, raw material prices have softened, including those used heavily in batteries.

Lithium prices have tumbled 67% so far this year based on spot lithium carbonate prices assessed by Fastmarkets. Prices of cobalt metal on the CME have slid 20% this year and more than halved since May last year.

U.S. automaker Ford earlier this month said it would temporarily cut one of three shifts at the plant that builds its electric F-150 Lightning pickup truck, and in July slowed its EV ramp-up, shifting investment to commercial vehicles and hybrids.

Shares of Japan’s Nidec logged their biggest decline in a decade and a half on Tuesday, tumbling more than 10% on investor concerns over the motor manufacturer’s prospects in an increasingly tough Chinese market for EVs.

The Japanese motor manufacturer now expects a 15 billion yen ($100 million) full-year loss at its key e-axle business, rather than the profit it had previously seen. E-axle manufacture combines motors, gears and power-control electronics.

China’s CATL, the world’s largest battery maker for EVs, said last week that third-quarter profit rose 10.7%, its weakest quarter since the start of last year due to slowing demand and stiff competition.

The company’s market share in China tumbled in September to the lowest in more than a year, data showed, underscoring the challenges it faces from smaller rivals and weakening demand.

(Reporting by Ben Klayman in Detroit and David Gaffen in New York; additional reporting by Eric Onstad in London and Victoria Waldersee in Berlin; editing by Jonathan Oatis)

By Gram Slattery

WASHINGTON (Reuters) -Republican presidential contenders are scheduled to face off in a third primary debate on Nov. 8.

Here are some facts about the forum:

WHERE IS IT?

The third debate will take place in Miami. NBC News announced it will host the event at the Adrienne Arsht Center for the Performing Arts of Miami-Dade County and air it from 8 p.m. to 10 p.m. ET (0100 to 0300 GMT). Florida is the home of former President Donald Trump and Florida Governor Ron DeSantis, who are running first and second in national opinion polls, respectively.

Florida was until recently a battleground between Republicans and Democrats, but the state now leans conservative. The state hosts a Republican primary contest in March, which has played a crucial role in previous primary elections, though it is considerably less important than contests in Iowa, New Hampshire and South Carolina, which are slated for January and February.

WHO IS ELIGIBLE?

To qualify for the debate, a candidate will need to receive at least 4% in two national polls or 4% in one national poll as well as 4% in a poll in at least two “early states.” Those early states are Iowa, New Hampshire, Nevada and South Carolina, all of which are among the first to hold nominating contests. The Republican National Committee has laid out several requirements for surveys to count toward this requirement, including that they must take place after Sept. 1.

Candidates will also be required to have at least 70,000 unique donors, including at least 200 donors from 20 or more states or territories. They also must sign a pledge which requires participants to support the eventual Republican nominee.

WILL TRUMP BE THERE?

Trump holds a 37-percentage-point lead over DeSantis, his closest challenger, according to the latest Reuters/Ipsos poll, limiting the debate’s significance if he is not there.

Trump opted out of the first two Republican debates, saying it would be “stupid” to expose himself to attacks from opponents after he previously implied he would not participate in any of the debates. While the possibility that Trump changes his mind cannot be ruled out, his campaign advisers on Oct. 2 called for the RNC to cancel the upcoming Miami debate.

WHICH OTHER CANDIDATES WILL BE THERE?

DeSantis, former U.S. Ambassador to the United Nations Nikki Haley and tech entrepreneur Vivek Ramaswamy appear to have the support needed to make the debate stage. Former Vice President Mike Pence, former New Jersey Governor Chris Christie and U.S. Senator Tim Scott of South Carolina also appear to have a solid shot of being there, according to recent polls.

North Dakota Governor Doug Burgum faces longer odds. Former Arkansas Governor Asa Hutchinson, who did not qualify for the second debate in California, is unlikely to be there, unless his fortunes change.

HOW MUCH WILL THE DEBATE MATTER?

The November debate could make a difference for some candidates, but is unlikely to change the fundamental dynamics of the race. After the first presidential debate in Wisconsin, for instance, Haley received a measurable polling boost and renewed interest from donors thanks to a well-received performance. Still, that debate did not dent Trump’s massive lead.

With the third debate just over two months before the first primary contest in Iowa in January, the candidates will be under intense pressure to begin chipping away at Trump’s lead.

(Reporting by Gram Slattery and Nathan Layne; additiona reporting by Susan Heavey; editing by Ross Colvin, Deepa Babington and Jonathan Oatis)

By Jonathan Stempel, Diane Bartz and Nate Raymond

(Reuters) – Dozens of U.S. states are suing Meta Platforms and its Instagram unit, accusing them of fueling a youth mental health crisis by making their social media platforms addictive.

In a complaint filed on Tuesday, the attorneys general of 33 states including California and New York said Meta, which also operates Facebook, repeatedly misled the public about the dangers of its platforms, and knowingly induced young children and teenagers into addictive and compulsive social media use.

“Meta has harnessed powerful and unprecedented technologies to entice, engage, and ultimately ensnare youth and teens,” according to the complaint filed in the Oakland, California federal court. “Its motive is profit.”

Children have long been an appealing demographic for businesses, which hope to attract them as consumers at ages when they may be more impressionable, and solidify brand loyalty.

For Meta, younger consumers may help secure more advertisers who hope children will keep buying their products as they grow up.

But the states said research has associated children’s use of Meta’s social media platforms with “depression, anxiety, insomnia, interference with education and daily life, and many other negative outcomes.”

Meta said it was “disappointed” in the lawsuit.

“Instead of working productively with companies across the industry to create clear, age-appropriate standards for the many apps teens use, the attorneys general have chosen this path,” the company said.

Eight other U.S. states and Washington, D.C. are filing similar lawsuits against Meta on Tuesday, bringing the total number of authorities taking action against the Menlo Park, California-based company to 42.

Meta shares fell 0.6% on the Nasdaq.

TIKTOK, YOUTUBE ALREADY FACE LAWSUITS

The cases are the latest in a string of legal actions against social media companies on behalf of children and teens.

Meta, ByteDance’s TikTok and Google’s YouTube already face hundreds of lawsuits filed on behalf of children and school districts about the addictiveness of social media.

Mark Zuckerberg, Meta’s chief executive, has defended in the past his company’s handling of content that some critics find harmful.

“At the heart of these accusations is this idea that we prioritize profit over safety and well-being. That’s just not true,” he posted in October 2021 on his Facebook page.

In Tuesday’s cases, Meta could face civil penalties of $1,000 to $50,000 for each violation of various state laws — an amount that could add up quickly given the millions of young children and teenagers who use Instagram.

Much of the focus on Meta stemmed from a whistleblower’s release of documents in 2021 that showed the company knew Instagram, which began as a photo-sharing app, was addictive and worsened body image issues for some teen girls.

The lawsuit by the 33 states alleged that Meta has strived to ensure that young people spend as much time as possible on social media despite knowing that they are susceptible to the need for approval in the form of “likes” from other users about their content.

“Meta has been harming our children and teens, cultivating addiction to boost corporate profits,” said California Attorney General Rob Bonta, whose state includes Meta’s headquarters.

‘THREATS THAT WE CAN’T IGNORE’

States also accused Meta of violating a law banning the collection of data of children under age 13, and deceptively denying that its social media was harmful.

“Meta did not disclose that its algorithms were designed to capitalize on young users’ dopamine responses and create an addictive cycle of engagement,” the complaint said.

Dopamine is a type of neurotransmitter that plays a role in feelings of pleasure.

According to the complaint, Meta’s refusal to accept responsibility extended last year to its distancing itself from a 14-year-old girl’s suicide in the UK, after she was exposed on Instagram to content about suicide and self-injury.

A coroner rejected a Meta executive’s claim that such content was “safe” for children, finding that the girl likely binged on harmful content that normalized the depression she had felt before killing herself.

States also alleged Meta is seeking to expand its harmful practices into virtual reality, including its Horizon Worlds platform and the WhatsApp and Messenger apps.

By suing, authorities are seeking to patch holes left by the U.S. Congress’ inability to pass new online protections for children despite years of discussions.

Colorado Attorney General Philip Weiser said the whistleblower’s revelations showed that Meta knew how Facebook and Instagram were harming children.

“It is very clear that decisions made by social media platforms, like Meta, are part of what is driving mental health harms, physical health harms, and threats that we can’t ignore,” he said.

(Reporting by Jonathan Stempel in New York, Diane Bartz and David Shepardson in Washington, D.C., and Nate Raymond in Boston; Editing by Chris Sanders, Rod Nickel and Lisa Shumaker)

By David Shepardson and Steve Gorman

(Reuters) – An off-duty pilot charged with trying to disable the engines of an Alaska Airlines jet in flight told police afterward he was suffering a nervous breakdown, had taken psychedelic mushrooms two days earlier and had not slept in 40 hours, court documents showed on Tuesday.

Joseph David Emerson, 44, an Alaska Airlines pilot, was riding as a standby employee passenger in the cockpit “jump seat” of Sunday’s flight, en route from Everett, Washington, to San Francisco, when the airborne altercation occurred, authorities said.

After a brief scuffle inside the flight deck with the captain and first officer, Emerson ended up being restrained by members of the cabin crew and was arrested in Portland, Oregon, where the flight was diverted and landed safely.

He was charged in Oregon state court on Tuesday with 83 counts of attempted murder – one for every crew member and passenger on the plane besides himself – and a single count of endangering an aircraft. He pleaded not guilty to those charges through his attorney at a brief arraignment hearing on Tuesday in Multnomah County Circuit Court in Portland.

Emerson was charged in a separate federal criminal complaint with one count of interfering with flight crew members and attendants.

The charging documents in both cases were filed with sworn affidavits from investigators outlining a harrowing sequence of events that came close to shutting down hydraulic operation and fuel to both engines of the twin-jet aircraft, an Embraer 175.

MENTAL CRISIS SUGGESTED

According to the affidavits, Emerson told police after his arrest that he was suffering a mental crisis during the incident and had struggled with depression for the past six months.

The court documents said he also told police that he had taken “magic mushrooms” for the first time, ingesting them about 48 hours before boarding the plane.

Alaska Air Group, the airline’s parent company, said in a statement on Tuesday that at no time during the check-in or boarding process did employees observe any signs of impairment that would have led them to prevent Emerson from flying.

Alaska Airlines Flight 2059 was operated by the group’s regional subsidiary Horizon Air, the company said.

Court documents gave no indication of whether investigators had confirmed any drug or alcohol use by the suspect, though one of the arresting officers told investigators that Emerson did not appear “outwardly under the influence of intoxicants.”

Medical research has shown that psilocybin, a naturally occurring hallucinogen found in certain mushroom varieties known as “magic mushrooms,” to be beneficial as a treatment for anxiety, depression and other mental disorders.

A ballot measure approved by voters in 2020 made Oregon the first U.S. state to decriminalize psilocybin and to legalize its supervised therapeutic use for adults at least 21 years old. But psilocybin remains strictly prohibited under federal law.

COCKPIT AND CABIN STRUGGLES

The two pilots who were at the controls of Flight 2059 told investigators, according to affidavits, that Emerson had started out chatting with them casually, before suddenly hurling his radio headset across the cockpit and saying, “I’m not OK.”

At that point, he reached up and grabbed two red-colored fire-suppression handles, pulling them downward, an affidavit said.

A scuffle ensued as one of the two pilots quickly clutched Emerson’s wrist to keep him from fully engaging the handles, while the other declared an in-flight emergency, before Emerson abruptly quieted down again and left the cockpit.

The flight crew later told investigators that had Emerson managed to fully deploy the shut-off handles, the plane was “seconds away” from being turned into a glider.

In his interview with police, the affidavits said, Emerson acknowledged pulling the handles, saying he did so because he felt like he was trying to awaken from a dream.

After leaving the cockpit, he was escorted to the back of the plane, placed in a flight attendant’s seat and was fitted with handcuffs, having warned the cabin crew: “You need to cuff me right now or it’s going to be bad,” according to affidavits.

Even as he was under restraint, the court documents said, Emerson tried to grab an emergency exit handle, but a flight attendant stopped him by placing her hands over his and making conversation to distract him.

Another flight attendant cited in the affidavits was quoted as telling authorities she overheard Emerson say: “I messed everything up,” and that he had stated that he had “tried to kill everybody.”

Emerson joined Alaska Air Group as a Horizon first officer in August 2001 and later a pilot, Alaska Airlines said, adding that “at no point were his certifications denied, suspended or revoked.” Aviators are expected to self-report any mental health conditions, the company said.

(Reporting by David Shepardson and Allison Lampert; Additional reporting by Steve Gorman; Editing by Chizu Nomiyama, Jonathan Oatis, Mark Porter and Jamie Freed)

By Dan Levine and Hyunjoo Jin

(Reuters) – An attorney suing Tesla over a fatal accident cited an internal safety analysis conducted by the company that showed it knew about a steering malfunction in its Autopilot driver assistant feature about two years earlier.

The disclosure came during closing arguments on Tuesday in a California state court in the first U.S. trial over allegations that Autopilot led to a death. The plaintiffs are seeking a combined $400 million jury award, excluding punitive damages. The trial’s outcome could help shape similar cases across the country.

The civil lawsuit alleges the Autopilot system caused owner Micah Lee’s Model 3 to suddenly veer off a highway east of Los Angeles at 65 miles per hour (105 km per hour), strike a palm tree and burst into flames, all in the span of seconds.

The 2019 crash killed Lee and seriously injured his two passengers, including a then-8-year-old boy who was disemboweled, court documents show. The lawsuit, filed against Tesla by the passengers, claims that Autopilot was defective.

Tesla has denied liability, saying Lee consumed alcohol before getting behind the wheel. The electric-vehicle maker also claims it was unclear whether Autopilot was engaged at the time of the crash.

Tesla has been testing and rolling out its Autopilot and more advanced Full Self-Driving (FSD) system, which Chief Executive Elon Musk has touted as crucial to his company’s future but which has drawn regulatory and legal scrutiny.

Jonathan Michaels, who represents the passengers, showed jurors a 2017 internal Tesla safety analysis identifying “incorrect steering command” as a defect, involving an “excessive” steering wheel angle.

“They predicted this was going to happen. They knew about it. They named it,” Michaels said. Tesla developed a protocol to deal with customers who experienced it, he said, and instructed employees to accept no liability or responsibility for the problem.

Tesla attorney Michael Carey said the safety analysis did not identify a defect, but rather was intended to help the company address any issue that could theoretically arise with the vehicle. The automaker subsequently engineered a system that prevents Autopilot from executing the turn which caused the crash.

That safety system, Carey said, “is a brick wall standing in the way of plaintiffs’ claim,” noting that no other Tesla car had behaved as the vehicle did in this crash.

Michaels argued Tesla released Autopilot in an experimental stage because the company desperately needed to increase market share.

“They had no regard for the loss of life,” he said.

Carey countered that the simplest explanation for the crash was human error, and asked jurors to resist awarding damages solely because of the victims’ severe injuries.

“Empathy is a real thing, we’re not saying its not,” Carey said. “But it does not make cars defective.”

(Reporting by Dan Levine; Editing by Richard Chang and Jonathan Oatis)

By Rajesh Kumar Singh

CHICAGO (Reuters) -General Electric trimmed its growth forecast for LEAP jet engine deliveries for this year and said their growth would slow further next year as well, with the global aerospace supply chain continuing to struggle to keep pace with booming demand.

In an interview, CEO Larry Culp said GE is aiming for a 20% to 25% year-on-year increase in deliveries for 2024 – lower than a revised 40% to 45% annual growth for this year. The company had previously predicted 50% growth in 2023 deliveries for the engines widely used on Airbus and Boeing medium-haul jets.

The company said the 2024 goal is based on expectations that the demand will come off a higher base. Still, hitting the target next year will not be easy as it requires quarter-on-quarter improvements in the supply chain, Culp said.

“Our suppliers have work to do to continue to drive the sequential improvements,” he told Reuters. “There’s no silver bullet here.”

GE co-produces the LEAP engine – recently used on all Boeing and some Airbus narrow-body jets – with France’s Safran through their joint venture CFM International.

However, persistent shortages of labor and parts have left the company’s suppliers hamstrung.

GE said “supplier delinquencies” or glitches shot up 25% in the third quarter from a quarter ago. That forced GE to trim the delivery growth target for LEAP engines this year by at least 5 percentage points and push some deliveries into 2024 and 2025.

A slowdown in deliveries puts a question mark over plans at Boeing and Airbus to ramp up output. It is also a setback for airlines’ efforts to modernize their fleets. Carriers are already dealing with the fallout of a rare manufacturing flaw in Pratt and Whitney’s popular Geared Turbofan (GTF) engines that could ground hundreds of Airbus jets in coming years.

GE has said it is aligned with Boeing and Airbus on demand for LEAP engines through the end of 2024. Culp reiterated that commitment, saying the company was working hard to deliver to the expectations of its customers.

Asked if plane makers needed to review their output goals in view of the persistent supply constraints, Culp said the manufacturers would be “paced by their slowest, their weakest supplier.”

To help ease bottlenecks, GE has deployed machinists and engineers to the facilities of suppliers. The company says those measures have helped improve output and the problem is no longer broad-based.

But the demand for both aftermarket services and new engine deliveries is so strong that GE and its suppliers need to do more, Culp said.

“If we needed six of something per week from a certain supplier in the second quarter, that number probably went to seven in the third, goes to eight in the fourth,” he said.

“There’s no simple solution here.”

CFM meanwhile issued an update on a hunt for unapproved parts affecting a small fraction of the fleet of the previous generation of engines known as CFM56.

It said 145 engines were affected by the suspected sale of falsely documented parts from a UK distributor, up from 126, and that more than half of these had been removed from service.

(Reporting by Rajesh Kumar Singh; Editing by Jonathan Oatis and Tom Hogue)

By Andrea Shalal, Stephen Nellis and David Shepardson

WASHINGTON (Reuters) -Apple, the world’s largest tech company, said on Tuesday that it will back a U.S. right-to-repair bill, following years of complaints from consumer advocates that its sleek devices are difficult and expensive to fix.

The announcement is part of a broader push by President Joe Biden to promote competition and crack down on so-called junk fees and other actions that increase prices for consumers.

Apple also on Tuesday said it would make parts, tools and documentation needed to fix its iPhones and computers available to independent repair shops and consumers nationwide, a move that could help push other companies to follow suit.

Restrictive practices used across industry raised costs for consumers, stifled innovation, closed off business opportunities for independent repair shops and created unnecessary electronic waste, Federal Trade Commission Chair Lina Khan said.

“We’ve heard from health care workers and hospitals worried that they would be unable to fix a ventilator because the manufacturer was seeking to deny access to repair it,” Khan said.

Apple’s decision to back federal legislation and allow independent repair shops to fix its products is part of a years-long shift toward touting the longevity and resale value of its devices while making it easier to fix them and to access spare parts.

The company started distributing parts and manuals to some independent repair shops in 2019. In August, Apple backed right-to-repair legislation in its home state of California, which requires firms to give repair shops and consumers access to parts, tools and manuals needed for repairs – at fair and reasonable prices.

“We intend to honor California’s new repair provisions across the United States,” Brian Naumann, Apple’s vice president for service and operations, told the White House event. “Apple also believes that consumers and businesses would benefit from a national law that balances repairability with product integrity, usability, and physical safety.”

National Economic Council Director Lael Brainard hailed Apple’s decision and called on Congress to pass national legislation. California, Colorado, New York and Minnesota have already passed their own right to repair laws. Thirty other states have introduced similar legislation.

Brainard said commitments from private companies like Apple could lower costs for consumers and keep unnecessary waste out of landfills.

Repairing consumer electronics devices could save American consumers $49.6 billion annually, Brainard said, and reduce the U.S.’s nearly 7 million tons of annual electronic waste, while boosting small independent repair shops.

While Apple has provided spare parts to repair shops since 2019, the California bill also requires it to supply diagnostic tools. Apple said it plans to follow the same model nationally as it does in California.

But some consumer advocates reacted to Tuesday’s news with reservations because Apple’s embrace of repairs in the past has often come with caveats.

Nathan Proctor, who leads right-to-repair campaign efforts for advocacy group called U.S. PIRG, said his group will follow the details of any federal legislation that emerges.

“It’s really going to depend on people’s experience in the real world – that’s what we care about,” Proctor said. “We’re going to keep watch-dogging Apple and the other companies.”

(Reporting by Andrea Shalal in Washington and Stephen Nellis in San Francisco; additional reporting by David Shepardson; Editing by Lisa Shumaker)

By Hyunjoo Jin and David Shepardson

SAN FRANCISCO/WASHINGTON (Reuters) -California on Tuesday ordered General Motors’ Cruise unit to remove its driverless cars from state roads, calling the vehicles a risk to the public and saying the company had “misrepresented” the safety of the technology.

California’s Department of Motor Vehicles (DMV) said it suspended Cruise’s autonomous vehicle deployment and driverless testing permit, ending efforts by the company for the time being to test the cars without safety drivers.

“Based upon the performance of the vehicles, the department determines the manufacturer’s vehicles are not safe for the public’s operation,” the DMV said in a statement, citing “an unreasonable risk to public safety.”

The DMV added that Cruise had “misrepresented any information related to safety of the autonomous technology of its vehicles.” The state agency said Cruise is allowed to challenge the suspension within five days.

The suspension, following a series of accidents involving Cruise vehicles, is a major setback to the self-driving business that GM has called a major growth opportunity and to the autonomous vehicle (AV) industry. But unionized transit workers and other critics of robotaxis hailed the suspension, which was effective immediately.

“We will be pausing operations of our driverless AVs in San Francisco,” Cruise said in a statement. “Ultimately, we develop and deploy autonomous vehicles in an effort to save lives.”

Cruise said the DMV was reviewing an Oct. 2 incident, where one of its self-driving vehicles was braking but did not avoid striking a pedestrian previously struck by a hit-and-run driver.

“When the AV tried to pull over, it continued before coming to a final stop, pulling the pedestrian forward,” Cruise said.

“Our teams are currently doing an analysis to identify potential enhancements to the AV’s response to this kind of extremely rare event,” it added.

The DMV order said Cruise had not initially disclosed all video footage of the accident and said “Cruise’s vehicles may lack the ability to respond in a safe and appropriate manner during incidents involving a pedestrian.”

GM executives have repeatedly called Cruise a giant growth opportunity, repeating that view during an earnings conference call on Tuesday before California’s DMV announced its decision.

‘TREMENDOUS UPSIDE’

“We do believe that Cruise has tremendous opportunity to grow and expand,” GM CEO Mary Barra told analysts. “We … see tremendous upside opportunity and growth.”

In June, Barra reiterated a forecast that Cruise could generate $50 billion a year in annual revenue by 2030. The company reported on Tuesday that it lost $723 million on Cruise during the third quarter.

In her call before the ruling, Barra said Cruise robotaxis have better safety records than human drivers.

In August, the DMV said it was investigating “concerning incidents” involving autonomous vehicles operated by Cruise in San Francisco and asked the company to take half its robotaxis off the roads. That month, a Cruise robotaxi was involved in a crash with an emergency vehicle in San Francisco.

This month, U.S. auto safety regulators opened a probe into whether Cruise was taking sufficient precautions with autonomous robotaxis to safeguard pedestrians.

The National Highway Traffic Safety Administration (NHTSA) said it has received two reports from Cruise of incidents in which pedestrians were injured, and identified two further incidents via videos posted on websites.

NHTSA said its investigation into Cruise remains open, but declined to comment on the California DMV action.

Two months ago, California allowed Alphabet Inc’s Waymo and Cruise to take paying passengers day or night throughout San Francisco, a significant step.

Waymo declined to comment on the DMV action.

Critics of the self-driving technology pounced on the DMV decision.

The Transport Workers union of America (TWU), which represents airline, railroad, and transit workers and has harshly criticized self-driving vehicles, said in a statement that companies like Cruise must meet measurable safety standards.

“Despite the propaganda pushed by tech executives, Cruise has shown the world that robots are incapable of even coming close to achieving the high standards human operators meet each and every day,” TWU President John Samuelsen said.

(Reporting by Hyunjoo Jin and David Shepardson, additional reporting by Greg Bensinger; Editing by David Gregorio)

By Rajesh Kumar Singh

CHICAGO (Reuters) -General Electric on Tuesday warned the growth in LEAP engine deliveries next year would nearly halve as its suppliers struggle to keep pace with a booming demand.

In an interview, CEO Larry Culp said the company is aiming for a 20% to 25% year-on-year increase in the engine deliveries in 2024 – lower than a revised 40% to 45% annual growth this year.

Still, hitting the target will not be easy as it requires quarter-on-quarter improvements in the supply chain, he said.

“Our suppliers have work to do to continue to drive the sequential improvements,” he told Reuters. “There’s no silver bullet here.”

LEAP engines, which GE produces in a joint venture with France’s Safran, power the narrowbody aircraft of Boeing Co and Airbus. However, persistent shortages of labor and parts have left the company’s suppliers hamstrung.

The company said supplier delinquencies shot up 25% in the third quarter from a quarter ago. It forced GE to trim the delivery growth target for LEAP engines this year by at least 5 percentage points and push out some of the deliveries into 2024 and 2025.

A slowdown in deliveries puts a question mark over plans at Boeing and Airbus to ramp up output. It is also a setback for airlines’ efforts to modernize their fleets. Carriers are already dealing with the fallout of a rare manufacturing flaw in Pratt and Whitney’s popular Geared Turbofan (GTF) engines that could ground hundreds of Airbus jets in coming years.

GE has said it is aligned with Boeing and Airbus on demand for LEAP jet engines through the end of 2024. Culp said the company is working hard to deliver to the expectations of its customers.

When asked if planemakers need to review their output goals in view of the persistent supply constraints, Culp said airframers would be “paced by their slowest, their weakest supplier.”

To help ease the bottlenecks, GE has deployed its machinists and engineers at the facilities of its suppliers. Those measures have helped improve output and the problem is no longer broad-based.

But the demand for both aftermarket services and new engine deliveries is so strong that GE and its suppliers need to do more, Culp said.

“If we needed six of something per week from a certain supplier in the second quarter, that number probably went to seven in the third, goes to eight in the fourth,” Culp said. “There’s no simple solution here.”

(Reporting by Rajesh Kumar Singh; editing by Jonathan Oatis)