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| Hello Insiders!! Today's Business newsletter covers: - 🚗 U.S. car workers strike Detroit automakers
- 🌱 Deep Dive: U.S. soybean market heats up
- 🌏 Mercedes CEO: Open markets amid China tensions
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Shriram
p/Shriram | |
| 1 | | The United Auto Workers (UAW) union has begun picketing at crucial factories that build cars, including Ford's Bronco SUV, GM's trucks, and Stellantis' Jeep, in its first strike against major Detroit automakers, including Ford, GM, and Stellantis, in 88 years. This "stand-up strike" is now taking place in a few places, including GM plants in Missouri, Ohio, and Michigan, as well as Stellantis and Ford plants, with the possibility of expanding to further locations. More: - The UAW has advocated for higher pay and job stability in negotiations with the automakers, particularly as the industry transitions to electric cars (EVs).
- The UAW works to maintain unionized, well-paying jobs in the industry while the auto industry electrifies.
- Nearly 150,000 unionized workers could theoretically shut down one-third of U.S. auto manufacturing during a strike, which would only have a tiny effect on GDP.
- Oxford Economics predicts that once the issue is resolved, the strike's effect on the full-quarter GDP will be insignificant.
Q: Are there any historical precedents or lessons to be learned from previous strikes in any other industry that could shed light on the potential outcomes of this strike? Join the conversation here. |     | |
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What the numbers say: Corteva's seed revenue has been consistently growing and reached $9B in 2022. Bayer and Corteva control nearly 70% of the corn and soybean seeds sold in the U.S. This year, Corteva expects its Enlist technology to capture over 55% of the U.S. soybean market. In comparison, Bayer claims 45%-50% of its Xtend and XtendFlex products. Relevance: The rivalry between Bayer and Corteva for market dominance among agricultural firms is evident in their struggle in the U.S. soybean industry. The significance of biotech breakthroughs in crop seeds and the effects of regulatory limitations on herbicides like dicamba are emphasized. More data: Monsanto's Roundup Ready soybeans ruled for decades, Corteva introduced Enlist E3 soybeans in 2019 with 2,4-D choline herbicide, and Bayer's Xtend soybeans have faced drift and regulation issues since 2017. Bayer and Corteva have clashed in patent disputes over soybean tech, with Bayer launching biotech soybean HT4 in 2027, which resists five weed-killing chemicals. | | | |
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| 3 | | Ola Källenius, CEO of Mercedes-Benz, emphasizes the importance of free markets and international supply chains in the automobile industry and warns that attempts to cut ties with China could jeopardize competition and supply chain stability. The European Union's investigation into Chinese electric vehicle subsidies indicates increasing industrial and geopolitical competitiveness and could lead to import taxes and heightened trade tensions. More: - Mercedes depends on parts from all five manufacturing continents, which Källenius uses to demonstrate the vulnerability of supply networks.
- Along with Volkswagen and BMW, China is a significant market for Mercedes-Benz, accounting for about one-third of its sales.
- By the end of the decade, Mercedes wants to sell electric vehicles exclusively and has plans to work with partners to build eight battery plants.
- The United Auto Workers' strike, according to Källenius, won't substantially influence Mercedes' supply chain, and he emphasizes productivity and competition in the face of cost challenges.
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| 4 | | The marketing and data automation company Klaviyo is raising $557M for its IPO by expanding the price range of its shares from $25-$27 to $27-$29. The corporation plans to sell 19.2 million shares with current shareholders, which may result in a $8.7B valuation at the top of the new price range. More: - This action follows that of online grocery delivery firm Instacart, which recently increased the price range for its initial public offering and is now looking to raise it to $660M at a valuation of over $9B.
- Recent IPOs by semiconductor designer Arm Holdings made a record-breaking debut.
- Cornerstone investors with up to $100M in available capital have expressed interest in buying IPO shares, including BlackRock Inc. and AllianceBernstein LP.
- For the first half of the year, Klaviyo recorded a net profitability of about $15M on $321M in revenue, a significant improvement from the previous year's loss of $25M on $208M in revenue for the same time.
- Goldman Sachs, Morgan Stanley, and Citigroup are leading Klaviyo's NYSE IPO, which will trade under the symbol KVYO.
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| 5 | | Following a cyberattack revealed on Aug. 14, cleaning product firm Clorox has warned about probable product shortages and a detrimental effect on quarterly earnings. The attack impacted Clorox's IT infrastructure, forcing the temporary shutdown of several systems and the requirement for more extended manual order processing, which affected the supply of the company's products. More: - Despite acknowledging extensive interruptions and damage to its IT infrastructure, Clorox considers the incident to have been stopped.
- It's still being determined when business will return to normal in full.
- When demand for cleaning goods outstripped supply during the early months of the epidemic, Clorox had previously experienced shortages.
- Despite pricing increases, the business has continued to boost sales over the past year.
- Shares saw a 32% surge in 2020, a 14% loss the following year, and a further 20% decline in 2022, but had increased by more than 4% this year as of Monday's trade.
- Clorox anticipates flat to 2% growth in sales for the current fiscal year, which began in July.
Zoom Out: - Last week, a cyberattack at MGM Resorts caused significant disruption in Las Vegas, forcing manual hotel check-ins and physical keycards to access rooms.
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| 6 | | Carrefour, a French grocery operator, has implemented "shrinkflation" warning signs in shops and online to inform customers of products whose sizes have shrunk while their costs have increased. Products like Lipton Iced Tea, Pepsi, Lindt chocolates, and baby milk powder now have these labels as a result of this action, which aims to exert pressure on suppliers who have raised prices despite experiencing decreasing costs for raw materials. More: - Carrefour hopes to persuade manufacturers to reevaluate their pricing strategies by promoting labeling.
- About 26 goods had notes on the labels stating that they had lost weight or volume and had seen price rises due to suppliers.
- The action is being taken as companies prepare to discuss their stances with certain retailers.
- According to Edgar Dworsky, the creator of Mouse Print, a website tracking shrinkflation in supermarkets, shrinkflation, in which product sizes are lowered, is frequently seen in high-inflation contexts, making it difficult for customers to notice these changes.
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- Independent McDonald's franchisees are opposing California's historic fast food law, which passed on Thursday, claiming that it will be a "devastating financial blow" with its $20 minimum wage requirement starting on April 1 if signed into law as anticipated.
- After almost 10 years as CEO of Naspers, Bob van Dijk is leaving the position after the company struggled with issues resulting from its large interest in Tencent, a Chinese company.
- Tensions surrounding the US carmaker strike increased when Ford cut 600 jobs despite failing discussions, forcing President Biden to send top officials to mediate after GM's CEO criticized the union's rejection of a "historic" offer.
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INSIDE BUSINESS LEADERBOARD (7 DAYS) |
 | Freelance Writer | | Shriram is pursuing Master’s in Business with Marketing at Warwick Business School. He worked as a Senior Consultant in Tech and Political Consultancies before his Masters. He is passionate about Tech, Marketing, Strategy, Anthropology and Politics. He is also the Postgraduate Ambassador for Warwick Business School. | | This newsletter was edited by Aaron Crutchfield | |
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