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| Hello Insiders! Today's business newsletter covers: - 🤝 President Joe Biden calls for agreement between United Auto Workers and Ford, Stellantis, and GM.
- 🚀 Ford CEO Jim Farley says software revenue is set to 10x.
- 💵 UBS set to pay $1.5B in penalty fees over fraud.
Also, tell us how you think businesses can adapt to changing consumer behaviors and preferences here! If you find this newsletter useful, please share it with your friends and colleagues. Thank you. Arbër
p/Arber | |
| 1 | | President Joe Biden has called for an agreement between the United Auto Workers and the three major Detroit car manufacturers. Previous deals reached between the two sides will expire on Sept. 14, 2023. More: - Biden stated that a deal between the UAW, which represents 150,000 workers, and Ford, Stellantis, and General Motors is a chance to reach a win-win deal for both sides. Biden added that a possible closure of plants should be avoided "at all costs."
- Workers in the auto industry have expressed concerns over pay and their future job stability, as EVs can be built with less manual labor than ICE vehicles.
- The union has demanded changes in holiday and vacation days, 401(k) contributions, profit-sharing payments, etc.
- GM, Ford, and Stellantis stated that they would continue to negotiate with the union with the goal of reaching a deal that benefits workers and helps companies remain competitive.
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| 2 | | 
What happened: Ford CEO Jim Farley has stated that the company will see its revenue from software services rise tenfold in the next few years, adding that software will be Ford's largest growing revenue stream. The company already has strong financial momentum, reaching $158B in revenue in 2022, a significant increase compared to 2021 and 2020. More details: Ford's software business has over 500,000 subscribers, bringing the company hundreds of millions of dollars in revenue with a profit margin that exceeds 50%. For comparison, Ford's overall profit margin before interest and taxes in H1 2023 was 8.3%. Why it matters: Ford, along with other car manufacturers, is racing to catch up to Tesla's large market share. The Elon Musk-led company reported a 62% share of the EV market in the U.S., managing to sell 1.3 million vehicles in 2022. Ford is lagging, managing to sell a little over 60,000 in the same period. | | | |
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| 3 | | UBS is set to pay $1.5B in fraud penalties from its residential mortgage-backed securities program in 2006 and 2007. The case, brought by the U.S. Department of Justice, adds to a total of $36B in recoveries from damages caused by fraud before the global financial crisis. More: - In the years before the 2007-08 global financial crisis, investment banks sold bundles of mortgages to institutional buyers.
- Investment banks led institutional buyers to believe that these investments were default-proof.
- While they presented them as such, these mortgages were not default-proof, leading to a chain of negative financial consequences for the buyers once the financial crisis hit.
- According to the lawsuit, UBS was aware of the flaws that these securities had and the potential risk they could prevent for their clients but chose to sell them anyway.
- The Justice Department has reached settlements with 18 other financial institutions over the same issue, including Bank of America, Citigroup, General Electric, Goldman Sachs, JPMorgan, and Wells Fargo.
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| 5 | | Mastercard will acquire a minority stake in the fintech division of Africa's largest telecom company, MTN Group, at a $5.2B valuation. The deal is expected to be finalized soon, according to Mastercard. More: - According to MTN Group, the deal will be structured as a commercial partnership on payments and remittances.
- MTN Group CEO stated that MTN's strong H1 performance helped cement the company's position in the fintech market in Africa.
- In this period, MTN's mobile money business increased by 37%, processing $8.3B for over 290 million subscribers.
- According to Bloomberg, Mastercard's investment in MTN at a $5.2B valuation is 16x trailing EBITDA.
Zoom Out: - In 2021, Mastercard invested $100M in India-based Airtel Africa at a $2.65B valuation.
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| 6 | | Maryland-based Access Holdings has raised $805M to invest in middle-market essential service businesses. The company has $2.7B worth of assets under management. More: - Access Holdings invests in companies that have between $5M and $100M in EBITDA.
- Its portfolio includes companies such as:
- Zeus Security,
- Oasis Marinas,
- Playfly Sports, and
- Spotless Brands.
- Access Holdings' typical equity investment reaches up to $200M.
- The company, founded in 2013, also has an office in New York.
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| 7 | | Quick Hits: - The AWS Cookbook — packed with practical insights and hands-on examples — is a must-have for your cloud toolkit.*
- Former Goldman Sachs Lloyd Blankfein has dismissed rumors that he will return to the company in an executive capacity.
- Amazon's head of consumer devices division, David Limp, is set to resign from his position in the company by the end of 2023.
- Kenya-based Fintech company d.light has closed a $125M funding round.
- Cybersecurity company SecureWorks has announced that it will lay off over 300 employees, its second layoff round in 2023.
- This AI company, backed by top VCs, is eliminating a $1T problem in hospitality. Join the revolution and learn how to invest in Jurny today!*
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Term of the Day Metaverse commerce: Metaverse commerce involves individuals using AR or VR headsets to shop for a product within a platform. Question of the Week Do you share details about your salary with your coworkers? Join the conversation |
INSIDE BUSINESS LEADERBOARD (30 DAYS) |
 | Writer | | Arbër is an Inside writer who also has experience in entrepreneurship. He has experience covering Consumer Tech, Venture Capital, NFTs, Crypto, etc. Arbër holds a Bachelor's degree in Business from XAMK University in Finland. When he is not reading(and writing) business news, he chooses to watch sports or anime...and then read news about sports or anime. | | This newsletter was edited by Aaron Crutchfield | |
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