Daily Business Briefing
Aug. 26, 2021, 7:02 a.m. ET
Aug. 26, 2021, 7:02 a.m. ET
Unionized workers who make Oreos, Chips Ahoy!, Newtons and other Nabisco snacks are on strike in five states over what they say are unfair demands for concessions in contract negotiations.
Members of the Bakery, Confectionery, Tobacco Workers and Grain Millers union in Colorado, Georgia, Illinois, Oregon and Virginia have rejected management’s call for changes in shift lengths and overtime rules. The workers are also calling for the restoration of a pension plan, which Nabisco’s owner, Mondelez International, replaced in 2018 with a 401(k) program after a contract impasse.
“We want our pension back. We earned that,” Mike Burlingham, vice president of Local 364 in Portland, Ore., said in an interview. “This is a good job, where people plan for retirement. If the company could have their way, that would be gone and it wouldn’t be a job worth fighting for at all.” The union put the number of striking workers at more than 1,000.
The previous contract expired in May. Union workers say they have often put in 16-hour days as demand for snack foods has increased during the pandemic.
The company is seeking schedules in which some employees would have shifts of up to 12 hours without overtime pay but would work fewer days a week. Those on weekend shifts, previously eligible for extra pay, would get the premium only after working 40 hours in a week. In addition, new hires would pay more than other employees for health insurance.
“Our goal has been — and continues to be — to bargain in good faith,” Mondelez International said in a statement, “while also taking steps to modernize some contract aspects which were written several decades ago.”
The strike began in Portland on Aug. 10, and workers in Aurora, Colo.; Richmond, Va.; Chicago; and Norcross, Ga., followed suit, the most recent on Monday. The company said production was continuing with employees not under union jurisdiction.
Union members say they have been treated unfairly while Mondelez International has made strong financial gains amid the pandemic. The company reported a 12 percent gain in revenue for the three months ending in June compared with the previous year.
The workers have also called for the company to “stop exporting our jobs to Mexico.” Some Oreo production was shifted to Mexico in 2016, a move that was criticized by Donald J. Trump as a presidential candidate. This year, Nabisco plants were shut in Fair Lawn, N.J., and Atlanta, but Mondelez said no work there was sent to Mexico.
The union “will take all appropriate action necessary in order to reach a contract settlement that treats Nabisco workers fairly and equitably,” Anthony Shelton, the president of the union, said in a statement.
WASHINGTON — The World Bank said on Tuesday that it had halted disbursements of aid money to Afghanistan as it assesses how the Taliban plan to rule the country.
A World Bank spokesperson said that the international development organization is “deeply concerned” about the situation in Afghanistan, particularly the impact that the new leadership will have on women in the country. The bank plans to monitor how the leadership transition proceeds and consult with the international community.
The World Bank has committed more than $5.3 billion for development projects in Afghanistan since 2002 and has raised nearly $13 billion for the Afghanistan Reconstruction Trust Fund, which it administers. The bank had committed nearly $800 million to the country in 2021.
The decision follows a move by the International Monetary Fund last week to freeze the distribution of more than $400 million in emergency currency reserves that were allocated to Afghanistan amid a lack of clarity over the legitimacy of a Taliban-led government.
Because of economic sanctions on the Taliban, it will be difficult for aid groups to operate in Afghanistan. Replacing a flood of foreign aid with sanctions threatens to cripple what is already one of the poorest countries in the world.
The World Bank said that it was exploring ways to preserve development gains that were made over the last 20 years and to help support the people of Afghanistan.
Goldman Sachs told employees on Tuesday that it will require anyone who enters the bank’s U.S. offices, including clients, to be fully vaccinated starting on Sept. 7, making it the most prominent Wall Street bank to issue such a broad requirement.
The announcement, in a memo obtained by The New York Times, came a day after the Food and Drug Administration gave full approval for the Pfizer-BioNTech vaccine, a move that many large corporations had been seeking before making mandates.
President Biden seized on the F.D.A.’s approval, urging private businesses to protect their workers through vaccinations.
“If you’re a business leader, a nonprofit leader, a state or local leader, who has been waiting for full F.D.A. approval to require vaccinations, I call on you now to do that,” the president said on Monday. “Require it.”
Companies have been consulting with advisers for months about whether to mandate vaccines, but have been wary of employee pushback and potential litigation. The quick spread of the highly contagious Delta variant and prominent first moves by large corporations like Walmart and the Walt Disney Company helped to expedite those talks. Now, the F.D.A. approval on Monday has finally given them some assurances they need to move forward.
Goldman Sachs told employees on Tuesday that anyone in the United States who is not fully vaccinated by Sept. 7 must work from home. It will also require fully vaccinated employees to undergo weekly coronavirus testing.
The bank, which employs roughly 20,000 in the United States, is reinstating mask requirements throughout office common areas as of Wednesday. At offices in San Francisco and Washington, masks will be required at all times, except while someone is eating or drinking.
Other Wall Street banks have similar requirements. Citigroup said this month that it would require vaccinations for employees returning to its corporate offices in the New York area this fall, and Morgan Stanley said in June that it would require all employees and visitors to its New York offices to be vaccinated. JPMorgan Chase has so far strongly encouraged, but not required, vaccinations for its work force.
The Goldman Sachs announcement followed several others this week. On Monday, Chevron said it was mandating vaccines for expats and employees who travel internationally, as well as for the offshore work force in the Gulf of Mexico and for some onshore support personnel. CVS Health said its pharmacists have until Nov. 30 to be fully vaccinated, while others who interact with patients, and all corporate staff, have until Oct. 31. Disney Cruise Line said Tuesday that it was requiring passengers over 12 years old to be fully vaccinated for sailings to the Bahamas.
The F.D.A. approval also gives industry groups grounds to encourage vaccinations from their members — and lobby against legislation that may hinder those efforts. The U.S. Chamber of Commerce announced this month that it would mandate vaccines for its work force once the F.D.A. fully approved them. The Business Roundtable, an influential lobbying group, said Monday that it supported mandates.
“Many companies have made the decision to mandate vaccines for some or all of their employees, and we applaud their decision,” the group, led by the Walmart chief executive Doug McMillon, said in a statement. “We also encourage policymakers, including at the state and local levels, to support — not impede — companies’ ability to make such a decision.”
At least three states — Montana, Texas and Utah — that had banned vaccine requirements by law or executive order did so specifically because the three vaccines used in the United States were being administered under emergency-use authorizations, not full approval. Some companies, like Norwegian Cruise Line in Florida, have resisted such prohibitions, but most have largely stayed out of the fray so far.
Over the past month, there have been signs that companies are showing an increased appetite for vaccine mandates. Earlier this month, United Parcel Service said that any employee returning to an office that serves a support function must be fully vaccinated, or have received one shot with a second scheduled, by Oct. 1. The policy does not apply to workers in operational roles, though they are being encouraged to get vaccinated.
As of Aug. 7, the share of job postings requiring vaccinations was up 90 percent from a month earlier, according to the job search company Indeed. Those that require vaccinations, though, are still a small fraction of the overall listings.
F.D.A. authorization could also simplify negotiations with unions, whose mixed stance toward mandates has contributed to a class divide among workers. On Monday, Disney World said unions representing more than 30,000 employees had agreed to a mandate, citing the F.D.A.’s full approval, that would require workers to be vaccinated by Oct. 22.
But the United Food and Commercial Workers International, a union that represents around 1.3 million workers in grocery stores, pharmacies and meatpacking plants, warned on Monday against mandates that did not take employees’ concerns into consideration.
“With more employers considering vaccine mandates after this new F.D.A. approval, U.F.C.W. continues to urge all businesses to negotiate any vaccine requirements with their frontline workers,” the union’s president, Marc Perrone, said. The union had previously cited concerns about lack of regulatory approval in its negotiations with Tyson Foods over the meatpacker’s decision to require its entire work force to get vaccinated.
Unions and other industry groups are grappling with continued hesitancy about the shot. In a recent poll, three out of 10 unvaccinated people said they would be more likely to get a fully approved F.D.A. shot, but some experts believe that this figure could be exaggerated.
Some companies that previously cited approval status for the vaccines had no updates to share as of Tuesday. “It’s very difficult for us to come in and mandate a vaccine that isn’t even federally approved yet,” the chief executive of Delta Air Lines, Ed Bastian, told CNBC this month. “So stay tuned.”
A spokesman for the airline told The Times that the airline’s plans were “status quo”: mandating vaccines for new hires and strongly encouraging them for existing employees.
More regulatory action that could make vaccines easier to mandate is coming. Moderna’s application for full approval of its vaccine was filed in June, a month after Pfizer’s. Johnson & Johnson is expected to apply for full approval soon. The F.D.A. is also weighing whether to authorize booster shots for the fully vaccinated, another twist for corporate vaccine mandates.
Niraj Chokshi and Daniel E. Slotnik contributed reporting
The Federal Aviation Administration is looking into Boeing’s corporate culture, which an agency official said “appears to hamper” Boeing employees responsible for providing oversight, raising safety concerns and otherwise representing the agency’s interests.
In a letter to the company last week, the official, Ian Won, said that the F.A.A.’s review was based on a recent survey of a few dozen of the 1,400 Boeing employees who work on the agency’s behalf through a program called Organization Designation Authorization. Boeing’s structure appears “to provide a strong influence” over how those employees are appointed, managed and allowed to work, he said, providing “ample opportunity for interference rather than independence.”
“These concerns require an objective review and further fact finding,” Mr. Won wrote in the letter, which was obtained by The New York Times.
The F.A.A. review was reported earlier by The Wall Street Journal.
The agency’s reliance on company employees to review regulatory compliance has been criticized as allowing the aviation industry to police itself. But defenders say the arrangement is necessary because the F.A.A. lacks the resources for thorough oversight of the sprawling industry.
Last week’s letter was based on a survey of 32 employees in May and June. Nearly a dozen workers complained or shared stories that suggested Boeing had made it difficult for them to act with independence, the agency said.
According to excerpts from the survey responses, the concerns included finding that management would stall when design issues were raised so that the company could continue delivering planes and feeling that a manager would shop around for approval if an employee didn’t provide it.
In a statement, Boeing said it took the concerns seriously.
“We have consistently reinforced with our team that delegated authority is a privilege and that we must work every day to be trusted with the responsibility,” the company said. “We have taken steps to educate our team and make improvements.”
In the letter, the F.A.A. said it would conduct a broader survey of the employees designated to represent its interests. The company said it was working with the agency.
TikTok and Shopify, the e-commerce platform, said on Tuesday that they were working together to add the ability for consumers to shop directly in the TikTok app for the first time.
TikTok has largely been known as a video app that provides entertainment and memes. Users have not been able to buy products directly in the app, even though TikTok features many influencers who often talk up clothing, makeup and household products. Instead, users have been able to buy goods on TikTok only through ads on the app.
But under the new partnership, Shopify merchants that participate in a pilot program will be able to add a shopping tab to their profiles and link to products within TikTok posts. Shopify said it expected to expand the feature to all of its merchants this fall.
TikTok joins Instagram and Facebook in offering in-app shopping, part of a larger shift toward what is known as social commerce — buying products directly within a social media platform — as creators seek out new ways to make money from their audience.
“Social commerce is important because it’s the new town square” where consumers go to find and buy new products, Harley Finkelstein, Shopify’s president, said in an interview.
The move into in-app shopping reflects how people already use the app to find products, said Blake Chandlee, TikTok’s president of global business solutions. The app has inspired two-thirds of users to shop even when they weren’t planning to do so, according to a survey that TikTok conducted in the fall with the London market researcher Walnut Unlimited. The hashtag #tiktokmademebuyit has 4.6 billion views.
One of the merchants that are part of the new pilot program is Kylie Cosmetics, Kylie Jenner’s makeup and skin-care brand, which has two million followers on TikTok. Ms. Jenner’s personal TikTok account has 34.9 million followers.
Social media is “where I grew my audience and community,” Ms. Jenner wrote in an email. “The ability to shop my products directly on these platforms is so important because that’s where our audience is going first.”
Shopify said sales on its social commerce channels — including TikTok, Facebook, Instagram, Snapchat and Pinterest — grew 76 percent from February 2020 to February 2021. In total, Shopify works with 1.7 million merchants.
Airbnb and its charitable arm, Airbnb.org, said on Tuesday that the company intended to provide free temporary housing globally for 20,000 refugees fleeing the Taliban’s takeover of Afghanistan.
As American and European governments race to evacuate tens of thousands of people, the property rental company called the displacement and resettlement of refugees a “significant humanitarian crisis.”
The cost of the accommodations will be covered with money from Airbnb and its chief executive, Brian Chesky, as well as contributions from the Airbnb.org Refugee Fund, which was begun in June with the goal of raising $25 million. The organization is working with resettlement agencies and offered to support federal and state governments.
“The displacement and resettlement of Afghan refugees in the U.S. and elsewhere is one of the biggest humanitarian crises of our time. We feel a responsibility to step up,” Mr. Chesky said on Twitter.
“I hope this inspires other business leaders to do the same. There’s no time to waste,” he added.
Airbnb did not specify how long refugees could stay in the apartments or houses, but said its hosts were offering short- and long-term stays. The company said it had begun supporting Afghans fleeing the country last week when it gave funding to the International Rescue Committee and other organizations to provide temporary stays using the Airbnb platform for up to 1,000 refugees.
Over the weekend, Airbnb said, it placed 165 refugees in housing across the United States, including in California, New Jersey, Ohio, Texas, Virginia and Washington State.
Hedge funds have trailed the market for many months. Part of the reason, the DealBook newsletter reports, is that their favorite stocks, as measured by a Goldman Sachs index of the most heavily owned shares by hedge funds, have risen just 4 percent in the past six months, versus 16 percent for the S&P 500.
Hedge funds were caught off guard by Beijing’s corporate crackdown. Asian stocks, especially ones exposed to China’s rapidly growing economy, have long been favorites of hedge funds, which search for higher-than-average returns to justify their higher-than-average fees. But China’s recent crackdown on its largest tech companies, particularly those with U.S. listings, has hit those bets hard.
Goldman said that about a third of the funds it surveyed had an investment in foreign-listed shares of Chinese companies at the end of June, the highest percentage it has ever measured. Alibaba, a top holding of many hedge funds, has slumped nearly 30 percent since the end of June.
Hedge funds also doubled-down on pandemic plays, loading up on investments in companies that benefited from pandemic lockdowns but underperformed recently as the economy reopened. For instance, hedge funds collectively own more shares in Amazon than they did a year ago, according to Bank of America. Peloton also recently became one of the stocks most widely held by hedge funds.
With coronavirus cases on the rise, however, betting on another pandemic-related slowdown or on a return to more strict social distancing looks smarter by the day. And Chinese shares have fallen so far that bargain hunters are jumping in, lifting stocks from historic lows in recent trading. What’s more, the biggest hedge funds don’t appear to have any trouble raising money as investors keep the faith that their strategies will pay off whatever the prevailing market conditions.
U.S. stocks had their fourth consecutive day of gains on Tuesday. The S&P 500 ticked up 0.2 percent, reaching a record, while the Nasdaq composite gained 0.5 percent.
Oil prices rose. West Texas Intermediate, the U.S. crude benchmark, gained 2.9 percent to $67.54 a barrel.
Travel and leisure stocks rose a day after the Food and Drug Administration granted full approval of the Pfizer-BioNTech coronavirus vaccine for people 16 and older. American Airlines, Delta Air Lines and United Airlines all rose more than 3 percent. Marriott International rose 2 percent, while Hyatt Hotels rose 4.6 percent.
Best Buy shares rose 8.4 percent after the electronics retailer reported that sales rose nearly 20 percent in the three months ending in July, as more customers upgraded their tech equipment.
Over two weeks in late July and early August, 27 coronavirus infections were identified aboard the Carnival Vista cruise ship sailing out of Galveston, Texas. One of those infected, a passenger, later died.
It was the highest number of cases aboard a ship reported since June, when cruises restarted in the Caribbean and United States, and the first death.
Last week, the Centers for Disease Control and Prevention issued a new advisory, warning people with increased risk for severe illness from Covid-19 to avoid travel on cruise ships, irrespective of their vaccination status.
Carnival is not the only cruise line to have seen an uptick in cases. Earlier this month, Royal Caribbean had six guests test positive onboard its Adventure of the Seas ship.
The companies have responded to the recent increase in cases by introducing pre-departure testing requirements for all passengers. Carnival also added a mask mandate on Aug. 7 for all vaccinated and unvaccinated guests in indoor areas and banned smoking in the casino.
Michael Bayley, the chief executive officer of Royal Caribbean, said the cruise line was typically seeing one or two positive cases out of more than 1,000 guests a week per ship. Mr. Bayley said in a candid Facebook post addressing the current coronavirus situation, “Testing captures status at a point of time and if the guest is incubating infection, then the test will miss it.” The vaccinated guests who test positive typically are asymptomatic, he said in the post.
Some cruise passengers have canceled amid concerns of the Delta variant, but many sailings are fully booked through the rest of year because of pent-up demand. READ THE ARTICLE →
Workers who want to stay at home forever have been especially vocal about their demands, but a silent majority of Americans do want to get back to the office, at least for a few days a week. But as the latest coronavirus surge has led employers to delay return-to-office plans, that larger group is growing increasingly glum, Kellen Browning reports for The New York Times.
In a national survey of more than 950 workers, conducted in mid-August by Morning Consult on behalf of The New York Times, 31 percent said they would prefer to work from home full time. By comparison, 45 percent said they wanted to be in a workplace or an office full time. The remaining 24 percent said they wanted to split time between work and home. (Morning Consult surveyed workers from a variety of industries, so white-collar office workers were represented alongside those working in other fields, like retail.)
Certainly, some people have thrived in their new remote work lives. They saved time and money, and sometimes increased productivity. The degree to which employees have embraced permanent remote or hybrid work models has been “stunning” to company executives, said Tsedal Neeley, a Harvard Business School professor who has studied remote work for decades.
But for others, Professor Neeley said, it has removed needed barriers between work and home life, increased a sense of isolation and led to burnout. “Some people just dislike the screen — their physicality and their proximity to others is a big part of what work looks like,” she said.
Among those craving the routines of office life: social butterflies, managers, new hires eager to meet colleagues, and people with noisy or crowded homes. READ THE ARTICLE →
Cargo Transit Times
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Cargo Transit Times
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“We’re sitting on $2 million in inventory for one $30 part,” said the general manager of Catrike, which makes three-wheeled recumbent bikes.
Container shipping rates from China and East Asia to the United States’ East Coast climbed above $20,000 earlier this month, compared with about $4,000 a year ago. The time it takes for parts from one of Catrike’s suppliers to arrive by sea in North America from a factory in Indonesia has jumped to three months, and sometimes it takes four.
“This is here for the rest of the year, and it’s only going to get worse because of the Christmas season,” said the chief executive of an ocean logistics firm. READ THE ARTICLE →