A summer of strikes is set to stretch on
The U.A.W.’s strike against the big three Detroit carmakers appears unlikely to end soon, with the two sides giving little sign that either will bend significantly.
It’s the latest signal of organized labor’s resurgent combativeness across the nation from Detroit to Hollywood, including a willingness to head to the picket line. Fueling that confidence is strong support from Americans, the White House and even some Republicans.
The U.A.W. is prepared to play hardball for a while, as it pursues demands like a 40 percent pay increase over four years, shorter workweeks and an end to a tiered wage system. Its president, Shawn Fain, on Sunday rejected a proposal by Stellantis, the owner of Jeep and Chrysler, to raise pay 21 percent over four years.
A big help is the union’s novel strategy of targeting all three Detroit automakers — Ford, General Motors and Stellantis — at once, instead of taking them on indivudually, as well as striking just a few key factories at a time. The plan isn’t without risk, since it requires more coordination among U.A.W. workers, but experts say it gives the union more leverage and preserves its strike fund for longer.
Other unions are digging in as well. The Writers Guild of America is in the fourth month of its strike against major Hollywood studios, while the actors’ union, known as SAG-AFTRA, is in its second. The W.G.A. is scheduled to resume talks with studios this week, but in the meantime it is continuing to put pressure on productions that are seeking to return to work: Drew Barrymore reversed her decision to bring back her daytime talk show after criticism from the union and allies.
Organized labor is enjoying high levels of support. More strikes are taking place in the U.S. now than at any time in more than two decades: 4.1 million workdays were lost to stoppages last month, according to the Labor Department, the most since 2000. A Gallup poll published in August found that 67 percent of Americans approve of unions, the fifth straight year such support has exceeded the long-term polling average of 62 percent.
The U.A.W. also has an ally in President Biden, who has pitched himself and his economic policies as pro-labor. Still, some Republicans are trying to make hay from the strike — but unlike in years past, they’re seeking to curry favor with union workers. That’s a change in strategy that started with Donald Trump in 2016, which he has taken up again in his 2024 presidential run.
HERE’S WHAT’S HAPPENING
A new Republican effort to avoid a government shutdown appears doomed. Shortly after Speaker Kevin McCarthy of California presented a plan on Sunday that would slash federal spending — an effort to bridge the moderate and hard-right wings of his caucus — some lawmakers in his party rejected the proposal. Time is running out for Congress to reach a compromise to keep the government running past Oct. 1.
U.S. and Chinese officials meet in Malta ahead of a potential Biden-Xi summit. Jake Sullivan, the U.S. national security adviser, held two days of talks with Wang Yi, Beijing’s foreign minister, on issues including the war in Ukraine and tensions over Taiwan. The confab is part of an effort to lay groundwork for a meeting between President Biden and President Xi Jinping in San Francisco in November.
Instacart reportedly plans to price its I.P.O. today. The grocery delivery company appears to be eager to capitalize on renewed demand for initial public offerings following the success of Arm’s market debut last week, according to Bloomberg. It will start trading Tuesday after raising its price range following Arm’s I.P.O. Meanwhile, another company set to go public this week, the ad software maker Klaviyo, is said to be raising the fund-raising target for its stock sale.
The U.S. and Iran agree to a prisoner swap. The deal will see five American-Iranians released and flown to Qatar, while the U.S. will free three Iranians. The agreement follows two years of negotiations and comes after $6 billion in Iranian oil revenue that had been frozen in South Korea was transferred to bank accounts in Qatar.
Home buyers are feeling the squeeze
A new batch of real estate data will be released this week, starting with a closely watched gauge on housing affordability out today that is expected to show little relief for home buyers.
A lack of housing supply and soaring borrowing costs are pricing many aspiring buyers out of the market. Mortgages rates have hit a two-decade high recently, and many economists expect the Fed will raise the benchmark lending rate again in the coming months.
Wall Street is having an impact, too. The Times’s Ronda Kaysen and Ella Koeze report from Bradfield Farms, a subdivision in Charlotte, N.C., where large investors have swooped in over the past two years to buy up hundreds of single-family homes and convert them into rentals. Paying in cash, the investors were able to outbid prospective buyers looking for a starter home, quickly transforming the neighborhood.
A similar trend was found in middle-income neighborhoods, often home to large Black and Latino populations, in other Sun Belt cities. Wall Street investors tend to bundle their properties into a portfolio that attracts other investors looking for stable returns, such as mutual funds and pension funds.
Affordable housing advocates and lawmakers are warning about the rise of the practice. “They’re shutting people out of the home-buying process,” Madeline Bankson, a housing research coordinator at the nonprofit Private Equity Stakeholder Project, told The Times.
In the past year, Senate and House Democrats have introduced bills, including the Stop Predatory Investing Act, to limit the practice of Wall Street landlords buying up homes, but their efforts have gained little traction.
M.&A. success is a coin toss
The hit rate on mergers and acquisitions has long been questioned. Business school professors often teach that such deals are a long shot, and investors worry that advisers more often come out in better shape than the companies.
But new research suggests the success rate is closer to a coin toss, and there are things buyers can do to improve the chances of winning, The Wall Street Journal reports.
Serial acquirers do better than average. Shares in companies doing deals worth $100 million or more on average have beaten their peers’ 53 percent of the time since the global financial crisis, according to Naaguesh Appadu, a senior research fellow at the Bayes Business School of City, University of London.
That may be because they have developed a playbook for how to do deals well. Retaining employees from the acquired company, and appointing the strongest to executive positions, is one good practice.
Monitoring investors’ initial reaction could also offer a gauge for success, says Mark Sirower, an M.&A. adviser at Deloitte Consulting:
His data shows 57% of stocks that started off with a positive performance around the deal announcement stayed ahead a year out, while almost two-thirds of the stocks that initially fell remained lower 12 months later.
Overall, Sirower said his data showed odds of a sizable deal succeeding were “slightly less than a coin flip.” His research shows that between 1995 and 2018, buyers’ stock lagged behind peers 56% of the time in the year after a deal announcement.
“Generally, my view is Twitter’s an important property. I like the concept that it’s there for discourse and there as a town square. There’s also some things about it I don’t like!”
— Tim Cook, the C.E.O. of Apple, who called antisemitic posts on the social network now known as X “abhorrent.” He added that his company is monitoring such speech on X, suggesting it could affect whether Apple decides to spend money on advertising there.
The week ahead
Central banks and I.P.O.s will be in the spotlight this week. Here’s what to watch.
Tuesday: The O.E.C.D. will release its latest global economic outlook, against a backdrop of rising energy prices and growing concerns about a slowdown. Meanwhile, the United Nations General Assembly session begins on Tuesday. On Sunday, climate activists converged on midtown Manhattan to demand that President Biden and other world leaders stop new oil and gas drilling.
Wednesday: It’s decision day for the Fed. The futures market this morning was pricing in just a 1 percent chance that the central bank would raise interest rates this time, but the odds are higher for an increase at either its November or December meetings.
On the earnings front, General Mills and FedEx report quarterly results.
Thursday: It’s the Bank of England’s turn. The central bank is expected to raise borrowing costs by 0.25 percentage points in an effort to tackle stubborn inflation. Microsoft is set to unveil new product features and its latest innovations in artificial intelligence at a showcase event in New York.
Friday: The Bank of Japan rounds out the rate-decision party. Investors will be tuning in for signs that the bank is close to ending its negative-rates policy.
THE SPEED READ
Deals
Corporate America is falling out of love with stock buybacks. (FT)
Bob van Dijk, the C.E.O. of the big European tech investor Prosus, has stepped down. He will be succeeded on an interim basis by Ervin Tu, a former executive at SoftBank’s Vision Fund. (Reuters)
Policy
Why data will play a central role in the government’s antitrust case against Google. (NYT)
“In Risky Hunt for Secrets, U.S. and China Expand Global Spy Operations” (NYT)
Best of the rest
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