Evelyn Reynolds

More stories

  • 125 Shares199 Views

    in Economy

    Ford’s U.A.W. Deal Will Raise Costs While Easing Labor Strife

    A tentative agreement gives union members at the carmaker their best terms in decades but could complicate Ford’s electric vehicle plans.When autoworkers went on strike in September, executives of the large U.S. automakers warned that union demands could significantly undermine their ability to compete in a fast-changing industry. The chief executive of Ford Motor said that the company might have to scrap its investment in electric vehicles.The future doesn’t look quite that bleak now that Ford and the United Automobile Workers union have reached a tentative agreement that is likely to serve as a template for deals the union eventually reaches with General Motors and Stellantis, the maker of Ram, Jeep and Chrysler.Ford’s costs will rise under the terms of the new contract, which includes a 25 percent raise over four and a half years, improved retirement benefits and other provisions. The extra expense will weigh on profit and could hamper Ford’s ability to invest in new technology, John Lawler, the company’s chief financial officer, said Thursday.But some analysts said the increases should be manageable. What will matter more for the company’s prospects, they said, is how innovative and efficient the company is in designing and producing cars and technology that can compete with offerings from Tesla, which dominates electric vehicles, the auto industry’s fastest growing segment.“They haven’t agreed to anything that will kill their competitiveness,” said Joshua Murray, an associate professor at Vanderbilt University who is an author of a book that examined how U.S. automakers lost ground to Japanese and European rivals. He said the deal could even help Ford, in part because the four-year contract ensures there would be no labor strife during an intense phase of the transition to electric vehicles.“They won’t be engaged in labor conflict while they’re dealing with” the technology shift, Mr. Murray said.Ford said on Thursday that it earned $1.2 billion from July through September on revenue of $44 billion; the company lost $827 million in the third quarter of 2022. But the division that makes electric vehicles lost $1.3 billion because of investments in new technology and increasing competition that has pushed down prices.The roughly 17,000 Ford workers who had been on strike, out of a total of 57,000 U.A.W. employees at the company, are expected to begin returning to factories soon. At U.A.W. Local 900 in Wayne, Mich., across the street from a Ford plant that was one of the first three factories to be struck by the U.A.W., workers were disposing of signs, firewood and bottled water that had been stockpiled for picket lines.“This is the best contract I have seen in my 30 years with Ford,” said Robert Carter, who works with engineers to lay out work stations on the assembly line.Cydni Elledge for The New York Times“This is the best contract I have seen in my 30 years with Ford,” said Robert Carter, 49, who works with engineers to lay out work stations on the assembly line. He said younger workers who had been earning well below the top wage of $32 an hour would see the biggest impact with the new contract; their pay would rise to more than $40 an hour over the next four and a half years.“For some people, their pay is going to almost double,” he said. “How can you say that’s not huge?”The reaction on Wall Street suggested that investors did not regard the agreement as a catastrophe. The carmaker’s shares fell 1.7 percent during regular trading on Thursday.But Ford stock slumped almost 5 percent in after-hours trading after the company said that, because of the cost of the strike, it could no longer stand by an earlier estimate that profit before interest expenses and taxes would be $11 billion to $12 billion in 2023. Mr. Lawler also said that strike would cost the company $1.3 billion this year.Analysts at Barclays estimated the annual cost of pay raises, improved retirement benefits and other measures in the new union contract to be $1 billion to $2 billion annually by the end of the four-year contract period, or equivalent to about 1 percent of sales.Mr. Lawler said on a conference call that the contract would raise the company’s labor costs by an average of $850 to $900 per vehicle. He said Ford would try to “identify efficiencies and improve productivity to help us deliver on our targets” in light of those higher labor costs.Some analysts were critical of the deal with the U.A.W., saying the cost to Ford could put it at a significant disadvantage, perhaps prompting the company to move more production to Mexico.“It adds a constraint in a very competitive market,” said Jonathan Smoke, chief economist at Cox Automotive. “It’s definitely a compromise that, I think, down the road will either limit Ford’s performance or force them to consider alternatives.”During the contentious negotiations, Ford complained that a big raise for workers would put it even further behind Tesla in the electric vehicle market. Sales of Ford’s two main battery-powered models, the F-150 Lightning truck and the Mustang Mach-E sport-utility vehicle, have been disappointing this year, and the company recently scaled back plans to increase production of the Lightning.“There is tremendous downward pressure on E.V. pricing,” Mr. Lawler said.But Tesla and other automakers like Toyota, Hyundai, Nissan and Honda, whose factories in the United States do not have unions, may now face pressure to raise wages, eroding any cost advantage they might have had.Crystal Nush and Daniel Morales work for Ford in Chicago. Of contract negotiators, Mr. Morales said he was “trying to understand what they agreed upon.”Jamie Kelter Davis for The New York TimesThe U.A.W. has declared its intention to try to organize those factories. The pay agreement with Ford, by far the biggest boost in compensation that the union has won in decades, is likely to serve as a powerful advertisement for collective bargaining.“Elon Musk better be looking at this,” said Madeline Janis, executive director of Jobs to Move America, an advocacy group that has close ties to organized labor. “Hyundai and Toyota better be looking at this. This is a new era where workers are standing up.”Tesla, the company Mr. Musk runs, and other carmakers that don’t have union workers in the United States, like BMW, Mercedes-Benz and Volkswagen, may decide to pre-emptively hand out raises to keep labor organizers at bay.“One strategy to deter union organizing is to raise wages,” said Rebecca Kolins Givan, an associate professor of labor studies and employment relations at Rutgers University.The decisive factor in the electric vehicle market will be the ability of Ford, G.M. and Stellantis to produce innovative products, Ms. Givan and others said. That is the responsibility of management, not assembly line workers.“It’s clear that these companies have work to do in the electric vehicle market,” Ms. Givan said. “There is nothing in this contract that creates any constraints.”In addition to the 25 percent pay increase, the contract gives Ford’s hourly workers cost-of-living wage adjustments, major gains on pensions and job security, and the right to strike over plant closings. The union had initially asked for a 40 percent wage increase.Ford has not yet set dates for restarting plants idled by the strike. The company previously said it could take up to four weeks to reach full production. Ford also needs some 600 suppliers to resume production and to deliver parts.“Bringing a plant back up is much more difficult than taking it down,” Bryce Currie, vice president of Americas manufacturing at Ford, said this month.Workers at the Wayne plant, which makes the Ranger pickup and the Bronco sport-utility vehicle, had not received return-to-work orders on Thursday, but they expected to be back on the assembly line next week.Walter Robinson has worked at the Wayne plant for 34 years. Three of his children work for Ford and will see big benefits from the new terms.Cydni Elledge for The New York TimesWalter Robinson, 57, has worked at the Wayne plant for 34 years and expects to retire by the end of the new contract. But he said three of his children work for Ford and would see a big benefit from the new terms.“My daughter has only been here two years, and it was going to take years for her to get the top wage,” he said. “This is going to help her immensely. This is going to make all of their lives better.” More

  • 188 Shares189 Views

    in Economy

    Tech stocks suffer two-day selloff as investors find ‘wrinkle or two’ in Alphabet, Meta earnings

    Alphabet and Meta both reported better-than-expected results, but investors found concerning stories in each.
    The Nasdaq has lost close to 3.5% over the past two days.
    At Meta, “management’s conservative tone tempered enthusiasm for a strong result and guide,” wrote analysts from Guggenheim, in a report late Wednesday.

    Sundar Pichai, CEO of Google
    Anindito Mukherjee | Bloomberg | Getty Images

    Alphabet’s earnings sailed past Wall Street estimates after the markets closed on Tuesday. Meta followed suit on Wednesday, solidly topping expectations.
    It didn’t matter.

    Following better-than-expected results on the top and bottom lines from two of the most valuable tech companies in the world, the Nasdaq responded by dropping roughly 3% over two days.
    With Amazon’s third-quarter report on deck after Thursday’s close and Apple set to announce next week, tech investors are showing less interest in what’s happened over the past three months and are more concerned about what may be coming as the year wraps up.
    In Alphabet’s earnings report, Wall Street fretted over the numbers out of the Google Cloud division, which is investing heavily to try and catch Amazon and Microsoft, particularly when it comes to managing hefty artificial intelligence workloads. The cloud group reported $8.41 billion in quarterly revenue, missing analysts’ estimates of $8.64 billion, according to LSEG, formerly known as Refinitiv.
    Ruth Porat, Alphabet’s finance chief, told analysts that the numbers reflect “the impact of customer optimization efforts,” a phrase that generally refers to clients reeling in their spending.
    The concern from Facebook parent Meta was sparked by comments that CFO Susan Li provided on the earnings call regarding the advertising market in the fourth quarter. Due to the escalating conflict in the Middle East and uncertainty about how it will affect ad spending, Meta provided a wider revenue guidance range than normal, Li said.

    “We have observed softer ads in the beginning of the fourth quarter, correlating with the start of the conflict, which is captured in our Q4 revenue outlook,” Li said on the call. “It’s hard for us to attribute demand softness directly to any specific geopolitical event.”
    Alphabet shares are down by about 12% over the past two days, while Meta has dropped roughly 7%. Amazon’s stock has dropped more than 6% over that stretch, heading into its report after the close.
    Up to this point, 2023 has been a bounce-back year for mega-cap tech after a brutal 2022. Meta is the second-best performing stock in the S&P 500, behind only AI chipmaker Nvidia, up roughly 140% for the year, compared to the Nasdaq’s 21% gain. Alphabet has jumped 39% and Amazon has gained 42%.
    All three internet companies instituted significant cost-cutting measures, starting late last year or early in 2023, slashing a record number of jobs and eliminating some experimental projects. Meta CEO Mark Zuckerberg said in February that this would be his company’s “year of efficiency,” and Alphabet CEO Sundar Pichai acknowledged in January that Google “hired for a different economic reality than the one we face today.”
    While investors cheered the newfound focus on expenses, concern is mounting alongside broader economic uncertainty and the challenges presented by high interest rates.
    The U.S. economy has been resilient so far. The Commerce Department said on Thursday that gross domestic product, rose at a seasonally adjusted 4.9% annualized pace in the quarter that ended September, up from an unrevised 2.1% pace in the second quarter.
    But with war still raging in Ukraine and President Joe Biden promising that the U.S. will support Israel in its battle against Hamas, the global economy is on a shaky foundation.
    In emphasizing the potential business impact of war in the Middle East on its business, Meta spelled out those concerns to shareholders.
    “Management’s conservative tone tempered enthusiasm for a strong result and guide,” wrote analysts from Guggenheim, in a report late Wednesday, though they still recommend buying the stock.
    Mark Avallone, president of Potomac Wealth Advisors, told CNBC’s “The Exchange” on Thursday that these latest earnings reports show the level of investor skittishness. Alphabet’s earnings were fine when looking at advertising and YouTube, its core businesses, he said, and the selloff tied to the cloud numbers indicates that “people are looking for problems where they may or may not exist.”
    “You’ve got earnings reports that really aren’t that bad,” Avallone said. “We’re finding a wrinkle or two in what we don’t like about them and then we’re trashing America’s best companies and there really seems to be a bit of an overreaction.”
    WATCH: There may be an overreaction to Amazon’s earnings if any doubt More

  • 188 Shares199 Views

    in Economy

    U.S. GDP grew at a 4.9% annual pace in the third quarter, better than expected

    Gross domestic product, a measure of all goods and services produced in the U.S., rose at a 4.9% annualized pace in the third quarter, ahead of the 4.7% estimate.
    The sharp increase came due to contributions from consumer spending, increased inventories, exports, residential investment and government spending.
    While the report could give the Fed some impetus to keep policy tight, traders were still pricing in no chance of an interest rate hike when the central bank meets next week.

    The U.S. economy grew even faster than expected in the third quarter, buoyed by a strong consumer in spite of higher interest rates, ongoing inflation pressures, and a variety of other domestic and global headwinds.
    Gross domestic product, a measure of all goods and services produced in the U.S., rose at a 4.9% annualized pace in the July-through-September period, up from an unrevised 2.1% pace in the second quarter, the Commerce Department reported Thursday.. Economists surveyed by Dow Jones had been looking for a 4.7% acceleration.

    The sharp increase came due to contributions from consumer spending, increased inventories, exports, residential investment and government spending.
    Consumer spending, as measured by personal consumption expenditures, increased 4% for the quarter after rising just 0.8% in Q2. Gross private domestic investment surged 8.4% and government spending and investment jumped 4.6%.
    Spending at the consumer level split fairly evenly between goods and services, with the two measures up 4.8% and 3.6%, respectively.
    The GDP increase marked the biggest gain since the fourth quarter of 2021.
    Markets reacted little to the news, with stock market futures negative heading into the open and Treasury yields mostly lower.

    While the report could give the Federal Reserve some impetus to keep policy tight, traders were still pricing in no chance of an interest rate hike when the central bank meets next week, according to CME Group data. Futures pricing pointed to just a 27% chance of an increase at the December meeting following the GDP release.
    “Investors should not be surprised that the consumer was spending in the final months of the summer,” said Jeffrey Roach, chief economist at LPL Financial. “The real question is if the trend can continue in the coming quarters, and we think not.”
    In other economic news Thursday, the Labor Department reported that jobless claims totaled 210,000 for the week ended Oct. 21, up 10,000 from the previous period and slightly ahead of the Dow Jones estimate for 207,000. Also, durable goods orders increased 4.7% in September, well ahead of the 0.1% gain in August and the 2% forecast, according to the Commerce Department.
    At a time when many economists had thought the U.S. would be in the midst of at least a shallow recession, growth has kept pace due to consumer spending that has exceeded all expectations. The consumer was responsible for about 68% of GDP in Q3.
    Even with Covid-era government transfer payments running out, spending has been strong as households draw down savings and ramp up credit card balances.
    The gains also come despite the Federal Reserve not only raising rates at the fastest clip since the early 1980s but also vowing to keep rates high until inflation comes back to acceptable levels. Price increases have been running well ahead of the central bank’s 2% annual target, though the rate of inflation at least has ebbed in recent months.
    The chain-weighted price index, which takes into accounts changes in consumer shopping patterns to gauge inflation, rose 3.5% for the quarter, up from 1.7% in Q2 and higher than the Dow Jones estimate for 2.5%.
    Along with rates and inflation, consumers have been dealing with a variety of other issues.
    The resumption of student loan payments is expected to take a bite out of household budgets, while elevated gas prices and a wobbly stock market are hitting confidence levels. Geopolitical tensions also pose potential headaches, with fighting between Israel and Hamas and the war in Ukraine posing substantial uncertainties about the future.
    While the U.S. has proven resilient to the various challenges, most economists expect growth to slow considerably in the coming months. However, they generally think the U.S. can skirt a recession absent any other unforeseen shocks.
    Don’t miss these CNBC PRO stories: More

  • 138 Shares169 Views

    in Economy

    European Central Bank holds interest rates steady after 10 consecutive hikes

    The European Central Bank’s key interest rate will remain at 4% as it opted to pause in October after 10 consecutive hikes.
    The ECB repeated its message that rates at current levels would help bring inflation to target if “maintained for a sufficiently long duration.”
    The Bank of England, Swiss National Bank and U.S. Federal Reserve all held rates steady in September.

    The European Central Bank headquarters.
    Daniel Roland | Afp | Getty Images

    The European Central Bank ended its run of interest rate hikes on Thursday, despite new upside risks to inflation from oil markets amid the Israel-Hamas war.
    The key rate is set to remain at a record high of 4%, where it was brought through 10 consecutive hikes that began in July 2022 and brought rates back into positive territory for the first time since 2011.

    The Governing Council said recent information confirmed its medium-term outlook for inflation to reach 2.1%.
    “Inflation is still expected to stay too high for too long, and domestic price pressures remain strong. At the same time, inflation dropped markedly in September, including due to strong base effects, and most measures of underlying inflation have continued to ease,” it said in a statement.
    Markets had priced in a more than 98% chance of a hold, after the ECB gave a strong indication at its previous meeting that rates had peaked.
    The euro was 0.15% lower against the British pound at 1:40 p.m. London time, declining slightly after the announcement. The European currency was 0.2% down against the U.S. dollar.
    The move in September was described as a dovish rise, as the ECB said rates had reached levels that would substantially contribute to the fight against inflation, if “maintained for a sufficiently long duration.”

    It repeated this message on Thursday, and said its decision making remains data-dependent.
    The ECB’s decision is in line with major central banks around the world, which are widely considered to have already reached or to be on the brink of peak interest rates. The Bank of England, Swiss National Bank and U.S. Federal Reserve all opted to hold in September.

    Higher for longer

    ECB officials have in interviews stressed a ‘higher for longer’ message on rates, while insisting that an inflationary shock could spur them to hike again, as they seek to dampen market expectations of rate cuts starting in the middle of next year.
    The central bank needs monetary policy to remain sufficiently tight to meet its current inflation forecasts of 5.6% this year, 3.2% next year and 2.1% in the “medium term.”
    However, the ECB must also reckon with persistently weak business activity and tepid euro zone growth forecasts of 0.7% in 2023 and 1% in 2024, as former EU powerhouse Germany stagnates.
    The bank is also assessing volatility in the bond market, where yields have risen sharply, reflecting a global sell-off.
    Marcus Brookes, chief investment officer at Quilter Investors, said risks to inflation remained in wage growth and in energy prices going up as a result of uncertainty in the Middle East.
    “Going forward, like other central banks, it will say the market needs to expect higher interest rates for longer, with the door being left open should we see inflation spike again,” Brookes said in an emailed note.
    “However, given the stagnating economy and the fact other central banks have moved into a holding pattern, something very unexpected would need to happen for rates to be raised again. The pressure will quickly shift to cutting rates given the lack of economic growth.” More

  • 100 Shares149 Views

    in Economy

    U.S. Economic Growth Accelerated in the Third Quarter

    Gross domestic product expanded at a 4.9 percent annual rate over the summer, powered by prodigious consumer spending. But the pace is not expected to be sustained.The United States economy surged in the third quarter as a strong job market and falling inflation gave consumers the confidence to spend freely on goods and services.Gross domestic product, the primary measure of economic output, grew at a 4.9 percent annualized rate from July through September, the Commerce Department reported Thursday. It was the strongest showing since late 2021, defying predictions of a slowdown prompted by the Federal Reserve’s interest rate increases.The acceleration was made possible in part by slowing inflation, which lifted purchasing power even as wage growth weakened, and a job market that has shown renewed vigor over the past three months.It’s a far cry from the recession that many had forecast at this time last year, before economists realized that Americans had piled up enough savings to power spending as the Fed moved to make borrowing more expensive.“There’s been an enormous increase in wealth since Covid,” said Yelena Shulyatyeva, senior economist for the bank BNP Paribas, referring to recent Fed data that showed median net worth climbed 37 percent from 2019 to 2022. “People still take not just one vacation, not just two, but three and four.”That level of spending in turn fueled robust job growth in service industries like hotels and restaurants even as sectors that benefited from pandemic shopping trends, like transportation and warehousing, returned to more normal levels. And with layoffs still near record lows, workers have little reason to hold off on making purchases, even if it means using a credit card — an increasingly pricey option as interest rates drift higher.One beneficiary of those open pocketbooks is Amanda McClements, who owns a home goods store in Washington, D.C., called Salt & Sundry. Sales are up about 15 percent from last year and have finally eclipsed 2019 levels.“People can’t get enough candles; that continues to be our top seller,” Ms. McClements said. They are also “entertaining more post-pandemic, so we do really well in glassware, tableware, beautiful linens.”Ms. McClements said business hadn’t been uniformly strong, though: Her plant store, Little Leaf, never snapped back from the depths of the pandemic, and it closed this year. “We’ve been experiencing a really uneven recovery,” she said.Although consumers propelled the bulk of the economy’s growth in the third quarter, other factors contributed as well. Residential investment, for example, provided a boost even in the face of higher interest rates: Those who already own homes have little incentive to sell, so newly constructed homes are the only ones on the market.“The third quarter would be that sweet spot where higher mortgage rates kept people in place, builders capitalized on the lack of existing supply, and that showed up as an improvement from prior quarters,” said Bernard Yaros, lead U.S. economist at Oxford Economics.The rebound in growth will probably be brief. Pitfalls loom in the fourth quarter, including the depletion of savings, the resumption of mandatory student loan payments and the need to refinance maturing corporate debt at higher rates.But for now, the United States is outperforming other large economies, in part because of its aggressive fiscal response to the pandemic and in part because it has been more insulated from impact of the Ukraine war on energy prices.“We’re talking about the eurozone and U.K. certainly looking like being on the cusp of recession, if not already in recession,” said Andrew Hunter, deputy U.S. economist for Capital Economics, an analysis firm. “The U.S. is still the global outlier.”Jeanna Smialek More

  • 125 Shares149 Views

    in Economy

    Why U.A.W. President Shawn Fain Has Taken a Hard Line

    Shawn Fain owes his rise within the United Automobile Workers to a group determined to make the union far more confrontational toward automakers.When Shawn Fain sought the presidency of the United Automobile Workers union last year, he ran on a platform that promised: “No corruption. No concessions. No tiers.”That pledge encapsulated many members’ frustrations with years of union scandal and concessions to the three big Detroit automakers, including the creation of a lower tier of wages for newer employees. The platform helped propel Mr. Fain to the top job — where he has led a mounting wave of walkouts in recent weeks to demand more favorable contract terms.But the platform largely predated Mr. Fain’s candidacy. It was devised by a group called Unite All Workers for Democracy, which was officially formed in 2020 as a caucus — essentially, a political party within the union.The group set out to topple the ruling party, known as the Administration Caucus, which had run the union for more than 70 years. In 2022, Unite All Workers hashed out its party line, recruited candidates and ramped up a campaign operation to elect them.When the dust settled, the slate had won half the seats on the union’s 14-member executive board, with Mr. Fain, previously a union staff member, as president. Unite All Workers’ role helps explain why the union has taken such a hard line with the automakers.“We had a platform we ran on, and we’re trying to push that platform forward,” said Scott Houldieson, a founder of the group and a longtime Ford Motor worker in Chicago. “Shawn has been really upfront about what we’re trying to accomplish.”The first fruits of that approach may have emerged Wednesday, when negotiators for the union and Ford agreed on terms for a new four-year contract, including a wage increase of roughly 25 percent over the four years, according to the union.“We hit the companies to maximum effect,” Mr. Fain said in a Facebook livestream. The deal is subject to ratification by the company’s union workers.Since at least the 1980s, U.A.W. members have formed groups to challenge the union’s top officials, or at least prod them to be more confrontational with automakers. The efforts took on added urgency in 2007, when the union accepted tiers as a way to stabilize the automakers’ financial footing. (General Motors and Chrysler later filed for bankruptcy anyway; Ford avoided it.)Scott Houldieson, a founder of United Auto Workers for Democracy, said, “We had a platform we ran on, and we’re trying to push that platform forward.”Jamie Kelter Davis for The New York TimesBut the Administration Caucus always held a trump card: The union leadership wasn’t elected directly by members. Rather, future leaders were effectively chosen by existing leaders, then approved by delegates to a convention every four years.That changed after a corruption scandal in which two recent U.A.W. presidents were charged with embezzlement in 2020. As part of a consent decree with the federal government, members voted in a referendum on whether to directly elect union leaders. Unite All Workers, which was pressing for the change, waged an all-out campaign to persuade union members to support “one member one vote.”When the initiative passed by nearly a two-to-one ratio, Unite All Workers, whose members paid an annual fee, was poised to become a kingmaker of sorts in the union’s 2022 elections. The group had a budget of over $100,000, two full-time staff members and hundreds of volunteer organizers.“It was obvious that we could use the same infrastructure” of staff and volunteers to compete in the election, said Mike Cannon, a retired U.A.W. member who serves on the Unite All Workers steering committee. “The only question at that point was, were we going to have any candidates?”Unite All Workers announced that anyone who wanted to join its campaign slate would have to fill out a detailed questionnaire and attend at least one meeting with its members.The group wanted to ensure that the candidates it backed were committed to running the union with extensive input from rank-and-file members, and to driving a much harder bargain with employers. It wanted an end to wage tiers, which it said divided and demoralized workers, and a focus on organizing new members, especially among electric vehicle and battery workers.Among those responding to the call was Mr. Fain, then a staff member in the union division responsible for Stellantis, the parent of Chrysler, Jeep and Ram. During his interview process, Mr. Fain explained how, as a local official in Indiana in 2007, he had helped lead opposition to the two-tier wage structure the union had agreed to, and how he had argued for more favorable contract terms after joining the headquarters staff.Some members of the group were skeptical that an employee of the old guard could be a reformer. But other U.A.W. dissidents vouched for him. “I knew the claims were legit,” said Martha Grevatt, a longtime Chrysler employee on the steering committee of Unite All Workers.Martha Grevatt said she had found Mr. Fain’s pledges to shake up the union “legit” even though he had been a staff member under the previous leadership.Daniel Lozada for The New York TimesThe group backed Mr. Fain and six other candidates for the union’s 14-member executive board, and all seven won.As president, Mr. Fain has appointed critics of the former leadership as his top aides, including one who served on the Unite All Workers steering committee. Board members, including Mr. Fain, have attended some of the group’s monthly membership meetings and taken part in one of its WhatsApp chats.Many of the group’s priorities became demands in the union’s contract negotiations, and Mr. Fain has indicated that he hopes to use momentum from the strike to organize nonunion companies like Tesla and Honda, a key objective of Unite All Workers.But for all the connections between the group and the union leadership, they are not one and the same.Some board members who ran on the Unite All Workers slate have at times taken positions in tension with the group’s priorities. In recent weeks, Margaret Mock, the union’s second-ranking official, has expressed concern to fellow board members about the walkout’s cost to the union’s budget. At a special board meeting last week, she offered a proposal intended to scale back spending on organizing during the strike, according to two people familiar with the meeting. The board set aside the proposal; Ms. Mock did not respond to a request for comment.For its part, Unite All Workers considers itself accountable to rank-and-file members, not an extension of the leaders it helped elect. On a tentative deal with any of the three large automakers, Unite All Workers plans to appoint a task force to provide an assessment of the proposal to the union’s members. The group’s members will then decide whether to support it.“I would say it’s not automatic that the caucus endorses” an agreement, said Andrew Bergman, who serves on the Unite All Workers steering committee.Still, as a practical matter, the group is highly unlikely to oppose an agreement, since Mr. Fain has forcefully pressed for its core priorities.“For years, we’ve been playing defense at every step, and we’ve been losing,” Mr. Fain said in a video streamed online on Friday, explaining why the strike would continue. “When we vote on a tentative agreement, it will be because your leadership and your council thinks we’ve gotten absolutely every dollar we can.” This week, the union expanded the strike to the largest U.S. factories at Stellantis and General Motors.The approach has raised concerns among employers and business groups. John Drake, a vice president at the U.S. Chamber of Commerce, said that the Detroit automakers could struggle to remain competitive after the strike, and that Mr. Fain appeared to be overreaching in extracting concessions.“It feels like there’s not really a strategy here,” Mr. Drake said. “It’s like pain is the goal.”Mr. Fain has indicated that he hopes to use momentum from the strike to organize nonunion companies like Tesla and Honda, a key objective of the insurgent group that endorsed his candidacy.Jamie Kelter Davis for The New York TimesThe best analogy for Unite All Workers may be to a group called Brand New Congress, created by supporters of Senator Bernie Sanders, the progressive Vermont independent, to help elect congressional candidates beginning in 2018.Not long after the 2016 presidential election, Brand New Congress urged an obscure New York bartender and activist named Alexandria Ocasio-Cortez to challenge a longtime incumbent in a Democratic congressional primary. A sister group provided her with training and campaign infrastructure. After she won, two people involved with the groups joined her staff.Ms. Ocasio-Cortez has since become far more prominent than those early backers, and in principle she could take positions at odds with their progressive stands. But in practice, it’s unlikely. The worldview is embedded in her political identity.Mr. Fain’s story is similar: a once-obscure progressive who was catapulted to a position of power by a group of insurgents and was determined to enact their shared principles once he got there. Except that, in backing him and his colleagues, Unite All Workers helped win not just a few legislative seats, but the reins of an entire union.After Vail Kohnert-Yount, a Unite All Workers steering committee member, seconded Mr. Fain’s nomination for president at the union’s convention last year, he spoke to her about relying on government assistance as a new parent decades ago.“I remember thinking this guy has not forgotten where he came from — he’s very much stayed that person,” Ms. Kohnert-Yount said. “We did our best to endorse a candidate we believed in.” More

  • 188 Shares129 Views

    in Economy

    U.S. and China commercial property markets face headwinds but UOB is optimistic on Southeast Asia

    Commercial real estate markets in the U.S. and China are economic pain points to monitor in a higher-for-longer rate environment, said Singapore’s United Overseas Bank.
    But the bank remains optimistic about one key region, citing investment flows particularly in the new economy area such as sustainability.

    Commercial real estate markets in the U.S. and China are economic pain points to monitor in a higher-for-longer rate environment, said Singapore’s United Overseas Bank. But the bank remains optimistic about one key region.
    “The U.S. commercial real estate remains a hotspot, especially with the low occupancy rates that we have,” Lee Wai Fai, chief financial officer of UOB told CNBC’s “Street Signs Asia.”

    Vacancy rates for office buildings climbed to a record high of 18.2% in late 2022.
    “The other hotspots will be China, there [are] worries about the quality and whether they can manage the property uncertainty in China,” he added.
    China’s property market has struggled with faltering consumer confidence as major developers like Evergrande and Country Garden remain mired in debt problems.
    Lee added the world is heading into a more “uncertain environment” and the impact of higher-for-longer interest rates is starting to filter through the economy.

    The world’s central banks have hiked interest rates aggressively over the past 18 months or so in a bid to rein in soaring inflation, with varying degrees of success.

    “China recovery has yet to come about. And of course, the recent geopolitical tension has added to the volatility,” he added.

    ASEAN’s resilience

    That being said, in spite of a bumpy macroeconomic environment, Lee expects the ASEAN region to remain resilient, citing investment flows particularly in new economy areas such as sustainability.
    “But [for] our regional fundamentals, we are confident, because we still have low unemployment and robust consumption,” he said, adding that supply chains are also shifting into Southeast Asia.
    Foreign direct investment flows to Southeast Asia have “increased by a factor of nine over the last two decades, with over half of these going to Singapore,” philanthropic organization Hinrich Foundation noted in a February report.
    UOB on Thursday posted a core net profit of $1.5 billion for the third quarter of financial year 2023 ending Sept. 30, rising 5% from a year ago. More

  • 113 Shares189 Views

    in Economy

    U.A.W. and Ford Negotiators Reach Accord on Contract Terms

    The deal, subject to approval by union members, could ease the way for deals with General Motors and Stellantis and end a growing wave of walkouts.Negotiators for the United Automobile Workers and Ford Motor have agreed on terms of a new four-year labor contract, people briefed on the talks said Wednesday, nearly six weeks after the union began a growing wave of walkouts against the three Detroit automakers.The deal includes a roughly 25 percent pay increase over four years, those people said. Any agreement would be subject to the approval of the U.A.W. council that oversees relations with Ford, and then ratification by the company’s union workers.The union continues to negotiate with General Motors and Stellantis, whose brands include Chrysler, Jeep and Ram.Two weeks ago — when it said it had reached the limit of what it could afford without hurting its business — Ford offered to increase wages 23 percent, adjust pay in response to inflation and cut the time for new hires to rise to the top wage, to four years from eight. The other companies have made similar offers.But the U.A.W. and its president, Shawn Fain, have pressed for greater concessions, ratcheting up the walkouts and aiming them at factories producing some of the automakers’ most profitable models.Altogether, about 45,000 workers at Ford, G.M. and Stellantis are on strike across the country, including 8,700 workers at Ford’s Kentucky truck plant in Louisville, the company’s largest, and almost 10,000 others at Ford factories in Illinois and Michigan.The tentative deal with Ford could increase pressure on the other companies to reach an agreement with the union. In the past, once the union reached a deal with one automaker, tentative agreements with the others quickly followed. But that history may not be as relevant now because the U.A.W. had never struck all three companies simultaneously until this year.The companies are investing billions in a transition to battery-powered vehicles, which they say makes it harder for them to pay substantially higher wages. Last week, Ford’s executive chairman, William C. Ford Jr., said the union’s demands risked damaging the ability of Detroit automakers to compete against nonunion companies like Tesla and foreign rivals.“Toyota, Honda, Tesla and the others are loving the strike, because they know the longer it goes on, the better it is for them,” he said. “They will win, and all of us will lose.”The U.A.W. makes a different case: that success in its contract battle with the Big Three will give it momentum to organize autoworkers at other companies as well.The U.A.W. began its walkouts when the companies’ union contracts expired in mid-September. It won immediate support from President Biden, who called on the automakers to “ensure record corporate profits mean record contracts” and briefly joined workers on a picket line at a G.M. plant near Detroit late last month.The union initially demanded a 40 percent wage increase over four years — an amount that union officials have said matches the raises the top executives at the three companies have received over the last four years. Those raises are also meant to compensate for more modest increases the autoworkers received in recent years and concessions the union made to the companies beginning in 2007.In addition, the union has called for an end to a system that pays new hires just over half of the top wage of $32 an hour. It has been seeking cost-of-living adjustments that would nudge wages higher to compensate for inflation. And it wants a reinstatement of pensions for all workers, improved retiree benefits and shorter work hours.G.M. and Stellantis faced the most recent escalation of the U.A.W. walkouts when the union called out 6,800 workers at a large Ram pickup truck plant in Michigan on Monday and 5,000 workers at a G.M. plant in Arlington, Texas, that makes large sport utility vehicles including the Chevrolet Tahoe, the GMC Yukon and the Cadillac Escalade.On Tuesday, G.M. reported a third-quarter profit of $3.1 billion, a 7 percent decline from the same period last year, owing in part to the ongoing strike. Ford is scheduled to announce its third-quarter earnings on Thursday. More