Good morning. It's Friday, the fifteenth of September here in London. This is the BlueBag Day Recurate podcast. I'm Caroline Hepka.
And I'm Stephen Carroll. Coming up today, a union representing one hundred and fifty thousand US auto workers goes on strike, hitting three of the country's biggest car makers.
Arms shehes jumped by twenty five percent as this year's biggest IPO takes off.
And we take a closer look at However, wilder weather swings have forced a complete redesign of some of the world's busiest airports.
Let's start with a round up of our top stories.
Workers at America's biggest auto union have gone on strike after a deadline to agree a deal with three major car makers. Past, GM, Ford and Stillantis are currently offering pay rises of up to twenty percent over four and a half years, but the United Auto Workers once thirty six percent union represents one hundred and fifty thousand workers. Speaking before the deadline passed, its president Sean Fain, made clear they would not be backing down.
If we need to go all out, we will.
Everything is on the table. One study suggests that even a ten day strike by Sean Fain's UAW Union could cast the US economy five point six billion dollars in last output and push the state of Michigan into recession.
Shares in the UK based chip designer ARM have climbed twenty five percent after the year's biggest stock listing. Though ARM isn't well known amongst consumers, its technology is almost in every smartphone. The UK government failed in its bid to convince the firm, though to list in London, but the company's CEO Rene Haas has told Bloomberger that he is open to the idea of a secondary listing in Britain.
Yeah, so today obviously we're in New York, but we're incredibly proud of our UK heritage and we are opening to considering that down the road.
Has added that he's confident that the company's growth will be sustained. The IPO raised close to five billion dollars for investment firm soft Bank, which still owns ninety percent of ARM.
China's economy is picking up steam as a summer travel boom and Beijing stimulus measures have helped to boost consumer spending and factory output. Industrial and realist retail sales growth jumped in August from a year earlier, far exceeding expectations. PBOC left its key policy rate on changed while injecting cash into the market for the tenth consecutive month. Still, weakness in the property market remains as prices continue to decline.
The European Central Bank has raised interest rates for the tenth time in a row, announcing the move to four percent. ECB President Christine the God signaled a shift in gear that could mean the peak has been reached.
The focus is probably going to move a bit more to the duration, but it is not to say, because we can't say that now that we are at peak.
Many economists and investors has thought that a four percent base rate would be the high water mark. The central bank new outlook for economic growth shows markedly softer expansion and inflation staying above two percent until the end of twenty twenty five. For Europe. Markets have also brought forward pricing now the first twenty five basis point ECB rate cut to dune next year. In the wake of Legard's comments.
The US President's son has been charged with unlawfully purchasing of firearm as a legal issues muddy his father's bid for re election. After Hunter Biden's plea deal imploded earlier this year, prosecutors have begun to file a case against him. Democratic Congressman Jamie Raskin says backing the courts should be a bipartisan issue.
We can all applaud the fact when the system in the courts is working and the justice system is working. And you know, I don't think people should applaud the system when it works for Hunter Biden, but then try to tear the system down when it works for Donald Trump.
Maryland Representative and law professor Jamie Raskin reacting there to Republicans who are calling for more charges to be brought against Hunter Biden. The team investigating his Biden's son have signaled that they are considering bringing more serious charges for alleged failures to report millions of dollars in income, including from China and Ukraine.
And lastly, Apple is facing a controversy in France over the iPhone twelve's radiation levels. Bluemoker has learned that it has advised its tech support staff not to volunteer any information to customers if they raise the issue. It comes as the French government asks Apple earlier this week to see sales of the iPhone twelve because tests showed that the device emits electromagnetic waves that are too strong. Apple rebutted the claims and said that it would engage with
France to show that the iPhone twelve is compliant. Seems that we have a theme this week of the most weird and wonderful jobs that there might be out there for you. NASA has named a new person who's going to be in charge of UFOs, basically trying to find a sign scientific evidence based approach to understanding unexplained events
in the sky. We all know that it's a US obsession, it seems to perhaps a global one, but now there's going to be one person sort of solely in charge of looking at it at NASA.
Interestingly, they won't name the person, which is perhaps other email inbox isn't filled with their reports from people around the world. But it is someoney who has worked in the position for a while, according to NASA, and then they went on to name him after that, after saying they wouldn't originally. And Mark McInerney is the man. So I mean, this is going to be a very interesting position to watch to see what I wonder.
Why, because for decades NASA has tried to ignore some perhaps sometimes unexplained, at least pubjects publicly unexplained objects in the sky. But then they started asking, you know, sourcing the public for information about it, and they want to have apparently a conversation that is less sensational and more about science. So yeah, there you go, strange and interesting jobs in the world.
Yeah, in our basket of strange interesting jobs of this week. Let's turn next to get the latest on that move, the thousands of members of the United Auto Workers who've gone on strike at selected General Motors, Ford and Stillantis plants in the United States. This comes after the union and automakers fail to reach a deal on a new labor contract. We've got Bloomberg, Crity Goop too with us in studio for more on this story. CREATI great to
have you with us. What exactly has happened? The deadline has passed.
The deadline has passed. Look, there's picketing happening right now in Detroit, Michigan and Missouri, and a lot of these carmaker plants across the United States. But mind you, it is the middle of the night and basically plants. Workers have quite literally walked off of the property and started picketing, including the president of the United Auto Workers Union, Sean Fain himself. Now he's the one who declared the strike, he's the one who's been in the bargaining table with
gm Ford Stalantis. But he's representing about one hundred and fifty thousand people, mostly concentrated in Detroit, Michigan. But let me just kind of emphasize the scale of how big of a deal this is if the strike goes on long enough, because we're in the what early hours of it, It's been about two hours since that declaration has been made.
If the strike goes on long enough, economists has said, not only will Detroit perhaps face the recession, the city of Detroit, but the entire state of Michigan that is in the top ten GDP contributors to the entire American economy. That's how big of a deal this is. But look, it affects people right here at home as well, in Europe and in London as well, and arguably in China. And the CEO of Mercedes Benz made a really great point.
This changes the cost of labor because when you take one hundred and fifty thousand people out of the supply of labor. You are suddenly not only paying higher wages, you're looking for more people. And that's going to ultimately show up in how much a consumer pays for a vehicle.
How the company is then reacting and responding to this, it's obviously after a series of negotiations.
Yeah, well, Stalantis was the first to respond. And look, Stalantis is a really interesting component here because it's the one, only one company of the three that is not actually American in Detroit, right, this is a European company. And we've had CEO Carlos Tavaz on the network multiple times and one of the criticisms of that was that he wasn't as involved in the negotiations with the union. So his very first commentary was that he was disappointed that
the UAW wasn't willing to engage. But again, the UAW has made the point that Carlos Tavaraz wasn't willing to engage by making the trip to Detroit. So there are two sides to the story here. The commentary Stalanta's made as they are in contingency mode, they are preparing for the worst. They're expecting this to go much much longer, and and it very well could.
What what could be the impact of this down the line obviously say we're in the early hours of this as well, but disruption to these lie these lines of production could be huge.
Massive, absolutely massive. And FOURD and GM are really going to take the brunt of it here simply because of the presence that they have in the United States as well. I think the timeline really matters here because look at what the negotiating terms actually were. The union came out and said came out was swinging really and said over the next four and a half year contract, a forty six percent pay raise.
That is a staggering that's a lot.
Yeah, that is a.
Lot for even the highest of achievers. But that has still been negotiated down to about thirty six percent. And GM ford have come out and said, look, we'll give you twenty percent over four and a half years, which again is not a number of scoff app but is still significantly lower than what they're asking for at thirty six percent. So seeing a lot of pain there.
Yeah, absolutely, But I suppose you know, low unemployment, high inflation means really quiet eyewatering numbers. I mean, I suppose the other thing is the impact on electric vehicle makers. This is the great change that the US is making the rest of the world is meant to be making. I mean, I remember back in the day when I was living in the US and we had the Great Financial Crisis, and you know, Obama bailing out Detroit effectively having to help out those those huge names because there
was so many difficulties for them. Massively important industry for the US.
Oh massively. And you know, these blue collar workers really take it as a point of pride. So it's not just about the money here or or the working conditions. It really is about this kind of industry that they've built with their hands. And I would argue, I mean,
let's take a quick case study here, Tesla. For example, when you think of electric vehicles, a lot of that process is automated, a lot of that process has to do with engineering with batteries, not necessarily physical manual labor or design, for example, And that's really where you start to see the structural shift in the auto industry really take hold. And that's of course one of the concerns
on top of pay as well. But look, you're seeing that happen across the country in Hollywood, you're seeing that in shipping, You're seeing that in Wall Street, You're even seeing that in Silicon Valley.
So this is a.
True labor movement that really couldn't have this large of an effect if you weren't seeing it in every industry in every part of the country.
What about the political ramifications of this as well, because for obviously this is something that's going to be brought up both in election campaigns but also democratic prisments in the white How important is that in this background.
It's really interesting actually because the UAW, when you think of Democrats versus Republicans, Democrats traditionally favor unions. Republicans traditionally favorite kind of corporations and fewer regulations and things like that. A lot of union workers had actually voted for President Biden. That's not surprising. The UAW specifically has not endorsed President Biden in the reelection for twenty twenty four, which is
really interesting because most unions do they lean Democrat. So you've actually seen President Traumas some of the other Republican candidates go after the UAW and say, hey, will you endorse us instead? In one hundred and fifty thousand votes in Detroit in Michigan. That's not something to scoff at and could really change the entire game of how the election works out in a year.
Yeah, absolutely so interesting, CHRITTI, thank you so much for being with us on Bloomberg BAJ this morning. Bloeberg's Pretty so to a story about airports across the world. They are making changes to their runways and other infrastructure in order to adapt to increasingly extreme weather conditions as climate change takes its toll. Bloomberg's Aerospace with Paul To Kate Duffy joins us for more on this story. Now, good morning, Kate,
thanks for your time. How is climate change then having an impact on airports?
So, what we're seeing is that climate change is having a profound impact on airports, so much so that it can sometimes disrupt air travel by causing delays and cancelations. And the extreme weather conditions derived from climate change include higher precipitation levels, storm surges, higher temperatures, and this could
all destroy airport infrastructure over time. So, for example, the London looton Airport's runway last year during the heat wave suffered a surface defect, and more recently, sudden rainfall in Frankfurt's airport caused the airfield to flood, making it almost making it look like planes were parked in a lake. And meanwhile, over in Alaska, underlying permafrost is thawing due to higher temperatures, drawing runways and roads as well. So this isn't just specified to airports in one corner of
the world. This is all over.
How urgent is this issue? And I suppose how widespread are we talking? You mentioned some of the diverse locations there, but I suppose how many airports are really looking at this?
Yeah, so those are some of the airports that I spoke to. But there's no doubt that the aviation industry is taking the matter extremely seriously. So eurice Control, for example, that's the European Airspace Coordinator, has called on airports as well as airlines to adapt to the more frequent weather
conditions that we are seeing. While the Portable Authority of New York and New Jersey they said that they're on very high alert because of the threats of climate change, and from the airports I've spoken to, it's clear that that the issue affects different latitudes, which is why it's so prevalent, and it's obviously important to keep global air
traffic flowing, keep it smooth. And if airports don't adapt to the weather extremes in their climate, this could leave them exposed to damage and disruption and obviously forcing delays and cancelations.
What are airports doing about it then, and also obviously the costs must be significant.
Yeah, So different airports are making different adaptations according to the climatic changes that they're experiencing. So in Alaska, one of the measures that they've been implemented is slotting insulation into the ground to thermally protect the permafrost because when it thaws, as I said, this can destroy runways and roads. And in New York, the port is looking to elevate or relocate buildings to other areas of the airport which
are less flood like prone. And that's because a lot of New York airports are low lying and near bodies of water, so whenever there's increased precipitation or storm surges, this can increase the risk of flooding. And in fact, JFK is undergoing a nineteen billion dollar transformation and part of that includes adaptations to climate change, such as flood doors,
whereas closer to home we're having different issues. So in France, Nice Airport has cut back on the amount of industrial water that it uses for cleaning because of a lack of water and higher temperatures, and ship Or Airport in Amsterdam is tackling the blazing heat by creating shadowed areas and also tackling the high precipitation by redesigning runways so they're elevated slightly in the center and then slope down towards the sides. So there's different adaptations for different airports.
But in terms of costs, I mean it's not cheap.
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