July 13 (Reuters) – A threatened U.S. strike at United Parcel Service (UPS.N) could be “one of the costliest in at least a century,” topping $7 billion for a 10-day work stoppage, a think tank specializing in the economic impact of labor actions said on Thursday.
That estimate from Michigan-based Anderson Economic Group (AEG) includes UPS customer losses of $4 billion and lost direct wages of more than $1 billion. A 15-day UPS strike in 1997 disrupted the supply of goods, cost the world’s biggest parcel delivery firm $850 million and sent some customers to rivals like FedEx (FDX.N).
Roughly 340,000 union-represented UPS workers handle about a quarter of U.S. parcel deliveries and serve virtually every city and town in the nation. A strike could delay millions of daily deliveries, including Amazon.com (AMZN.O) orders, electronic components and lifesaving prescription drugs, shipping experts warned. They added this also could reignite supply-chain snarls that stoke inflation.
A strike by roughly 340,000 U.S. workers at the world’s biggest package delivery firm threatens to delay millions of shipments, snarl supply chains and send shipping costs higher.
Talks are deadlocked between UPS and the International Brotherhood of Teamsters union.
The Teamsters have vowed to strike if a deal is not ratified before the current contract expires at midnight on July 31.
“Consumers are going to feel this within days,” AEG CEO Patrick Anderson said of a potential strike, adding his analysis does not include the human cost of disruption to shipments of critical and perishable medicines to treat cancer and other life-threatening illnesses.
A sticking point in negotiations is pay increases for part-time workers who account for roughly half the UPS workforce. Tenured part-timers are particularly frustrated because they make just slightly more than new hires whose wages have jumped in a tight labor market.
Anderson said a UPS employee walkout would be a bigger risk to the U.S. economy than a work stoppage by UAW workers at the “Detroit Three” automakers, who started contract talks on Thursday.
He noted that the automaker talks cover fewer workers and have a limited geographic impact. In fiscal 2019, GM’s (GM.N) fourth-quarter profit took a $3.6 billion hit from a 40-day UAW strike that shut down its profitable U.S. operations.
UPS is urging Teamster negotiators to return to the bargaining table, but union officials say UPS needs to sweeten its offer for workers who risked their lives during the pandemic to help the company generate outsized profits.
UPS faces two unappealing choices, Stifel analyst Bruce Chan said in a recent note: Risk a strike and resulting customer losses or acquiesce to Teamster demands that could worsen the company’s labor cost disadvantage versus nonunion rivals in an inflationary environment.
“Both situations would create pain for UPS, so it could just be a question of when and how the company wants to take its medicine,” Chan said.
Reporting by Lisa Baertlein in Los Angeles, additional reporting by Priyamvada C in Bengaluru; Editing by Pooja Desai, Jonathan Oatis and David Gregorio
Lisa Baertlein covers the movement of goods around the world, with emphasis on ocean transport and last-mile delivery. In her free time, you’ll find her sailing, painting or exploring state and national parks.
WASHINGTON, June 23 (Reuters) – Indian Prime Minister Narendra Modi met with U.S. and Indian technology executives in Washington on Friday, the final day of a state visit where he agreed new defense and technology cooperation and addressed challenges posed by China.
U.S. President Joe Biden rolled out the red carpet for Modi on Thursday, declaring after about 2-1/2 hours of talks that their countries’ economic relationship was “booming.” Trade has more than doubled over the past decade.
Biden and Modi gathered with CEOs including Apple’s (AAPL.O) Tim Cook, Google’s (GOOGL.O) Sundar Pichai and Microsoft’s (MSFT.O) Satya Nadella.
Also present were Sam Altman of OpenAI, NASA astronaut Sunita Williams, and Indian tech leaders including Anand Mahindra, chairman of Mahindra Group, and Mukesh Ambani, chairman of Reliance Industries, the White House said.
“Our partnership between India and the United States will go a long way, in my view, to define what the 21st century looks like,” Biden told the group, adding that technological cooperation would be a big part of that partnership.
Observing that there were a variety of tech companies represented at the meeting from startups to well established firms, Modi said: “Both of them are working together to create a new world.”
Modi, who has appealed to global companies to “Make in India,” will also address business leaders at the Kennedy Center for Performing Arts.
The CEOs of top American companies, including FedEx (FDX.N), MasterCard (MA.N) and Adobe (ADBE.O), are expected to be among the 1,200 participants.
NOT ‘ABOUT CHINA’
The backdrop to Modi’s visit is the Biden administration’s attempts to draw India, the world’s most populous country at 1.4 billion and its fifth-largest economy, closer amid its growing geopolitical rivalry with Beijing.
Modi did not address China directly during the visit, and Biden only mentioned China in response to a reporter’s question, but a joint statement included a pointed reference to the East and South China Seas, where China has territorial disputes with its neighbors.
Farwa Aamer, director for South Asia at the Asia Society Policy Institute, in an analysis note described that as “a clear signal of unity and determination to preserve stability and peace in the region.”
Alongside agreements to sell weapons to India and share with it sensitive military technology, announcements this week included several investments from U.S.-firms aimed at spurring semiconductor manufacturing in India and lowering its dependence on China for electronics.
White House national security spokesperson John Kirby said the challenges presented by China to both Washington and New Delhi were on the agenda, but insisted the visit “wasn’t about China.”
“This wasn’t about leveraging India to be some sort of counterweight. India is a sovereign, independent state,” Kirby said at a news briefing, adding that Washington welcomes India becoming “an increasing exporter of security” in the Indo-Pacific.
“There’s a lot we can do in the security front together. And that’s really what we’re focused on,” Kirby said.
Some political analysts question India’s willingness to stand up to Beijing over Taiwan and other issues, however. Washington has also been frustrated by India’s close ties with Russia while Moscow wages war in Ukraine.
DIASPORA TIES
Modi attended a lunch on Friday at the State Department with Vice President Kamala Harris, the first Asian American to hold the No. 2 position in the White House, and Secretary of State Antony Blinken.
In a toast, Harris spoke of her Indian-born late mother, Shyamala Gopalan, who came to the United States at age 19 and became a leading breast cancer researcher.
“I think about it in the context of the millions of Indian students who have come to the United States since, to collaborate with American researchers to solve the challenges of our time and to reach new frontiers,” Harris said.
Modi praised Gopalan for keeping India “close to her heart” despite the distance to her new home, and called Harris “really inspiring.”
On Friday evening, Modi will address members of the Indian diaspora, many of whom have turned out at events during the visit to enthusiastically fete him, at times chanting “Modi! Modi! Modi!” despite protests from others.
Activists said Biden had failed to strongly call out what they describe as India’s deteriorating human rights record under Modi, citing allegations of abuse of Indian dissidents and minorities, especially Muslims. Modi leads the Hindu nationalist Bharatiya Janata Party (BJP) and has held power since 2014.
Biden said he had a “straightforward” discussion with Modi about issues including human rights, but U.S. officials emphasize that it is vital for Washington’s national security and economic prosperity to engage with a rising India.
Asked on Thursday what he would do to improve the rights of minorities including Muslims, Modi insisted “there is no space for any discrimination” in his government.
“There is no end to data that shows Modi is lying about minority abuse in India, and much of it can be found in the State Department’s own India country reports, which are scathing on human rights,” said Sunita Viswanath, co-founder Hindus for Human Rights, an advocacy group.
Reporting by Steve Holland, Simon Lewis and Jeff Mason; additional reporting by Trevor Hunnicutt, Doina Chiacu, David Brunnstrom and Kanishka Singh; Editing by Don Durfee and Grant McCool
Jeff Mason is a White House Correspondent for Reuters. He has covered the presidencies of Barack Obama, Donald Trump and Joe Biden and the presidential campaigns of Biden, Trump, Obama, Hillary Clinton and John McCain. He served as president of the White House Correspondents’ Association in 2016-2017, leading the press corps in advocating for press freedom in the early days of the Trump administration. His and the WHCA’s work was recognized with Deutsche Welle’s “Freedom of Speech Award.” Jeff has asked pointed questions of domestic and foreign leaders, including Russian President Vladimir Putin and North Korea’s Kim Jong Un. He is a winner of the WHCA’s “Excellence in Presidential News Coverage Under Deadline Pressure” award and co-winner of the Association for Business Journalists’ “Breaking News” award. Jeff began his career in Frankfurt, Germany as a business reporter before being posted to Brussels, Belgium, where he covered the European Union. Jeff appears regularly on television and radio and teaches political journalism at Georgetown University. He is a graduate of Northwestern University’s Medill School of Journalism and a former Fulbright scholar.
Market rout deepens in Indian tycoon Adani’s shares
Adani Enterprises loses $26 bln in value since report
Falls after Adani pulled share sale, investors spooked
Analysts say signals confidence crisis in Indian market
NEW DELHI/MUMBAI, Feb 2 (Reuters) – Adani’s market losses swelled above $100 billion on Thursday, sparking worries about a potential systemic impact a day after the Indian group’s flagship firm abandoned its $2.5 billion stock offering.
Another challenge for Adani on Thursday came when S&P Dow Jones Indices said it would remove Adani Enterprises from widely used sustainability indices, effective Feb. 7, which would make the shares less appealing to sustainability-minded funds.
In addition, India’s National Stock Exchange said it has placed on additional surveillance shares of Adani Enterprises <ADEL.NS>, Adani Ports <APSE.NS> and Ambuja Cements <ABUJ.NS>. read more
However, Adani Group Chairman Gautam Adani is in talks with lenders to prepay and release pledged shares as he seeks to restore confidence in the financial health of his conglomerate, Bloomberg News reported on Thursday. read more
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The shock withdrawal of Adani Enterprises’ share sale marks a dramatic setback for founder Adani, the school dropout-turned-billionaire whose fortunes rose rapidly in recent years but have plunged in just a week after a critical research report by U.S.-based short-seller Hindenburg Research.
Aborting the share sale sent shockwaves across markets, politics and business. Adani stocks plunged, opposition lawmakers called for a wider probe and India’s central bank sprang into action to check on the exposure of banks to the group. Meanwhile, Citigroup’s (C.N) wealth unit stopped making margin loans to clients against Adani Group securities.
The crisis marks an dramatic turn of fortune for Adani, who has in recent years forged partnerships with foreign giants such as France’s TotalEnergies (TTEF.PA) and attracted investors such as Abu Dhabi’s International Holding Company as he pursues a global expansion stretching from ports to the power sector.
In a shock move late on Wednesday, Adani called off the share sale as a stocks rout sparked by Hindenburg’s criticisms intensified, despite it being fully subscribed a day earlier.
“Adani may have started a confidence crisis in Indian shares and that could have broader market implications,” said Ipek Ozkardeskaya, senior market analyst at Swissquote Bank.
Adani Enterprises shares tumbled 27% on Thursday, closing at their lowest level since March 2022.
Other group companies also lost further ground, with 10% losses at Adani Total Gas (ADAG.NS), Adani Green Energy (ADNA.NS) and Adani Transmission (ADAI.NS), while Adani Ports and Special Economic Zone shed nearly 7%.
Since Hindenburg’s report on Jan. 24, group companies have lost nearly half their combined market value. Adani Enterprises – described as an incubator of Adani’s businesses – has lost $26 billion in market capitalisation.
Adani is also no longer Asia’s richest person, having slid to 16th in the Forbes rankings of the world’s wealthiest people, with his net worth almost halved to $64.6 billion in a week.
The 60-year-old had been third on the list, behind billionaires Elon Musk and Bernard Arnault.
His rival Mukesh Ambani of Reliance Industries (RELI.NS) is now Asia’s richest person.
[1/4] Indian billionaire Gautam Adani addresses delegates during the Bengal Global Business Summit in Kolkata, India April 20, 2022. REUTERS/Rupak De Chowdhuri
Reuters Graphics
BROADER CONCERNS
Adani’s plummeting stock and bond prices have raised concerns about the likelihood of a wider impact on India’s financial system.
India’s central bank has asked local banks for details of their exposure to the Adani Group, government and banking sources told Reuters on Thursday.
CLSA estimates that Indian banks were exposed to about 40% of the $24.5 billion of Adani Group debt in the fiscal year to March 2022.
Dollar bonds issued by entities of Adani Group extended losses on Thursday, with notes of Adani Green Energy crashing to a record low. Adani Group entities made scheduled coupon payments on outstanding U.S. dollar-denominated bonds on Thursday, Reuters reported citing sources.
“We see the market is losing confidence on how to gauge where the bottom can be and although there will be short-covering rebounds, we expect more fundamental downside risks given more private banks (are) likely to cut or reduce margin,” said Monica Hsiao, chief investment officer of Hong Kong-based credit fund Triada Capital.
In New Delhi, opposition lawmakers submitted notices in parliament demanding discussion of the short-seller’s report.
The Congress Party called for a Joint Parliamentary Committee be set up or a Supreme Court monitored investigation, while some lawmakers shouted anti-Adani slogans inside parliament, which was adjourned for the day.
ADANI VS HINDENBURG
Adani made acquisitions worth $13.8 billion in 2022, Dealogic data showed, its highest ever and more than double the previous year.
The cancelled fundraising was critical for Adani, which had said it would use $1.33 billion to fund green hydrogen projects, airports facilities and greenfield expressways, and $508 million to repay debt at some units.
Hindenburg’s report alleged an improper use of offshore tax havens and stock manipulation by the Adani Group. It also raised concerns about high debt and the valuations of seven listed Adani companies.
The Adani Group has denied the accusations, saying the allegation of stock manipulation had “no basis” and stemmed from an ignorance of Indian law. It said it has always made the necessary regulatory disclosures.
Adani had managed to secure share sale subscriptions on Tuesday even though the stock’s market price was below the issue’s offer price. Maybank Securities and Abu Dhabi Investment Authority had bid for the anchor portion of the issue, investments which will now be reimbursed by Adani.
Late on Wednesday, the group’s founder said he was withdrawing the sale given the share price fall, adding his board felt going ahead with it “will not be morally correct”.
Reporting by Chris Thomas, Nallur Sethuraman, Tanvi Mehta, Ira Dugal, Aftab Ahmed, Sumeet Chatterjee, Anshuman Daga, Summer Zhen, Ross Kerber and Bansari Mayur Kamdar; Editing by Muralikumar Anantharaman, Jason Neely and Alexander Smith
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