Good morning.
I'm Nathan Hager and I'm Karen Moscow. Here are the stories we're following today.
A strike is on in the auto industry. At midnight last night, members of the United Autoworkers Union walked out of Select plants run by Ford, General Motors and Stillantis after their contract deadline passed. Union president Sean Fain says it's the first time they're striking all three Detroit automakers at the same time.
This strategy will keep the companies guessing. It will give our national negotiators maximum leverage and flexibility and bargaining, and if we need to go all out.
We will UAW. Sean Fain says they'll add more strike locations depending on how bargaining goes. General Motors CEO Mary Bara posted an online video to the workers saying she is still willing to negotiate in good faith.
Nobody wins in a strike. We all know that from heart experience, strike negatively impacts lives and communities. We have presented a historic offer that rewards you for being key to our success and a competitive advantage for GM.
And GM's Mary Barra says the automaker's non union competition will waste little time taking advantage of the workstoppage.
Well, Nathan, the walkout at all three automakers at the same time as a new strategy by the UAW. We get more from Bloomberg Auto reporter Craig Trudell.
It's really big and it's unprecedented. What we usually see from the union is that they sort of pick out one automaker to negotiate with and then use an agreement reach with that automaker as a sort of pattern, a form of pattern bargaining bargaining with the other two. In this case, they've decided to strike all three companies at at once, which they have not done.
Before, and Bloomberg's Craig Trudell says the strategy is designed to cut production of popular vehicles while at the same time limiting the impact on the uaw's strike fund.
Well, Karen, we have developments this morning involving a different labor dispute. Hollywood's striking writers have agreed to resume negotiations with the movie and TV producers. Bloomberg Zed Baxter has that story.
The AMPTP, representing the studio streaming Services and Productions, say that guild reached out asking for a meeting and that they had agreed. The strike has gone on for four and a half months over issues including pay, job security, and the big issue, the use of artificial intelligence. Previous attempts to restart talks fell flat. A handful of meetings last month but nothing. The writer said they got a
lecture on how good the studio's offer was. So no date set yet, but a glimmer of hope for next week in California. I'm at Baxter Bloomberg Radio.
All right, and thanks well.
Sticking with the entertainment industry, there's new developments in the pursuit of ABC. Bloomberg News has learned a former comic turned media mogul is interested in buying the TV network from Disney, and we get more from Bloomberg media reporter Chris Paulmery.
We also have heard that fire and Allen, who owns a weather channel and a bunch of other local stations, has expressed interests as well. So we're far from a deal. It seems Disney seems to have trouble making up his mind whether he really wants to go forward with this, but there are people.
Interested, and Bloomberg's Chris Paul Mary says Alan submitted a ten billion dollar offer to Disney to acquire ABC, as well as local stations and the FX and National geographic cable channels. Bloomberg's David Weston, used to be the president of ABC News, says he has not surprised Disney CEO Bob Iger is exploring his options.
When Bob gave that interview and said everything's on the table, and he was, oh, my goodness, how coun you say that, Well, he wouldn't be doing his job if he weren't wanting to consider everything. Because I think the turmoil and upset in the media business is just that profound, and if you're a CEO, you should be looking at all the options. So it doesn't surprise me.
Look at and that's David Weston, the host of Bloomberg's Wall Street Week. Disney said that while it's considering strategic options for its traditional TV networks, no decisions about a sale have been made.
All right, turn our attention now, Karen to the biggest IPO of the year. Shares of chip designer ARM surged almost twenty five percent in their first day of trading. The company now has a market value of more than sixty five billion dollars. Arm CEO Renee has tells us he's confident the company's growth will be sustained.
We also have a very unique business model that gives us the ability to have a very very good vision in the future in terms of when people use our products. So relative to our confidence in the outlook, we have a very very high competence that the growth rate that we have talked about will be sustained.
Renee Hass added Arms open to the idea of a secondary listing in the UK.
Well Nathan, the success of the arm IPO maybe having ripple effects. The Wall Street Journal is reporting Instacart is preparing to raise the target price for its initial public offering next week to twenty eight to thirty dollars a share.
In Asia this morning, Karen China's economy is showing signs of picking up steam. Industrial production and retail sales growth jumped in August from a year earlier. The improvement comes as the government's beefed up pro growth measures.
And speaking of and Nathan famed, a short seller, Jim Chaino says President Shi Jinping has put ideology over the nation's economy, and he tells Bloomberg that raises the risk to the rest of the world if China's growth model falters.
Previous leaders since Thankshaping really put economic growth first and foremost, and with Shishingping, I think it is more about party ideology and things like national defense. It's a much more muscular China than we've seen previous.
Decades, and Jim Chino says the Chinese market has been a terrible place for investors over the past decade. Time. Now for a look at some of the other stories making news around the world. From that, we're joined by Bloomberg's John Tucker.
John, good morning, and good morning to you, Karen. Hurricane Lee about to head up on a track along the coast in the northeast. Huge waves of twelve feet already being seen from Florida all the way up to the coast of Maine, and Mayor Michelle wou As a word of warning.
Conditions are still anticipated to be similar to that of a nor'easter because the spread.
Of this storm and the wind and the rain will.
Extend far beyond the center of it over into the coast.
Its closest approach is a hurricane to the US should be tomorrow morning. That's when Tropica storm force winds would be scraping Cape cod At up through parts of Maine. President Biden's son Hunter has been indicted on three felony gun charges. The news coming as President Biden was delivering his speech on the economy in Maryland. The President wouldn't comment.
There's a lot more I know we could talk about it.
I wish I had chance to take all your questions, and I'm going to get in real trouble if I do that.
He's accused of buying a firearm without disclosing that he was using drugs at the time. A mystery surrounding the status of China's defense minister that story in this report from Bloomberg staff Benlinger.
The US government believes China's Defence minister has been stripped of his duties and placed under investigation. According to a report in The Financial Times. It is raising questions about turbulence within President Shi Jinping's new lineup of loyalist leaders. The defense minister's dropped from public view comes after she purged several other top leaders in recent months without explanation.
Those moves of fanned investor fears that she's policy swings are making China more volatile Jeff Bullinger, Bloomberg Radio.
David McCormick, the former Bridgewater Associate's chief executive officer, will likely seek the Republican nomination for US Senate in Pennsylvania if you're looking to take the seat now held by Bob Casey, a three term Democrat and son of the former governor. It's not exactly an anniversary worth celebrating, but fifteen years ago today, Linden Brothers went bankrupt with no
willing buyer and no rescue for the government. The resulting financial crisis of two thousand and eight still shapes the investment landscape. Global news twenty four hours a day, were powered by more than twenty seven hundred journalist and analysts in more than one hundred twenty countries. I'm John Tucker, and this is Bloomberg Karen.
All right, John, thank you, and now get the latest news whenever you wanted with Bloomberg News Now. It's a top story from our global team of reporters at the click of a button. Get Bloomberg News Now on the Bloomberg Business app, Bloomberg dot com, and anywhere you get your podcasts. Time now for the Bloomberg Sports Update. And here's John stash Hour John.
Karen Thursday Night Football the kickoff Week two battle of teams who won their division in the NFC last year. The Eagles, of course, went all the way to the Super Bowl. They've been sloppy first two games, but they are two to zero. They built up a twenty seven to seven lead third and four and held on to beat Minnesota thirty four to twenty eight. Eagles doing their damage on the ground two hundred and fifty nine yards rushing. DeAndre Swift had one hundred and seventy five of those
scored a key late touchdown. Kylin Hurts did throw a sixty three yard touchdown pass to Devonte Smith. Minnesota did damage through the air, with Kirk Cousins throwing for three hundred and sixty four yards and four touchdowns, but the Vikings a zero and two because of turnovers they had three and last Sundays lost to Tampa Bay on four more turnovers. Last night, the Red Sox have fired their general manager, Kaim Bloom. He had the job for four years.
During that time, Red Sox were only the playoff team once. Team owner John Henry said in a statement, today signals a new direction for our club. Red Sox and Yankees played a doubleheader at Fenway split two of those teams looking to avoid finishing in last place, Tampa Bay and Baltimore looking to finish in first in the AL East and get the first round by and The Rays started a series of camp and yards, winning four to three. They're only one game behind the Orioles. Nationals had only
two hits lost in Pittsburgh, two nothing. The Giants rained out at Colorado. The teams they're fighting with to make the playoffs all lost, the Diamondbacks, the Reds, and the Marlins. John Stasheward Bloomberg Sports.
From coast to coast, from New York to San Francisco, Boston to Washington, DC, nationwide on Syrias Xam, Bloomberg Business Appen, Bloomberg dot Com. This is Bloomberg Daybreak.
Good morning.
I'm Nathan Hager, and as of midnight, auto workers are on strike at selected plants at Ford General Motors and jeep maker Stilantis. It may be just the beginning of a long and drawn out labor dispute for the auto industry. United Autoworkers President Sean Fain announced the targeted walkouts late last night.
We are committed to winning an agreement with the Big three that reflects the incredible sacrifice and contributions UAW members have made to these companies.
And for more.
We're joined by Bloomberg's Critty Gutuo has been tracking the negotiations and is now tracking the walkout. Pretty these talks clearly have broken down. So what comes next?
Yeah, we are on our sakes of a really historic event, the first of its kind to see all three major carmakers in the US four GMN stallants deal with a walkout like this and a strike all at the same time. I mean again, it is a truly historic moment amid a broader labor movement we're seeing across the country. Nathan, there are three numbers you need to know here. Forty six, twenty and one hundred and fifty thousand. Let's start with the bottom. One hundred and fifty thousand. That's how many
people are involved in this now. So many people are represented by the United Auto Workers Union. Forty six percent is the initial offer that they came with, the idea here they wanted for their next contract that's going to be about four and a half years. A forty six percent increase in pay over the next four and a half years. And my last number here is twenty percent. That's what GM and Ford and Salanta said about eighteen
percent countered with. So you can see there's clearly a very big discrepancy between what the unions actually asked for and what the carmakers are willing to offer now. But even as negotiations have progressed, we've gotten that request number down to about thirty six percent on the union side. But look, thirty six percent versus twenty percent, you can see still a massive gap.
Yeah, it's still a big gap. And it's not just the pay increase. Is that these union workers are looking for. They're looking to clawbacks and benefits that they gave up more than a decade ago, including cost of living adjustments. That's something that they gave up after the bailout of the auto industry.
Yeah, I'm having a.
Little bit of deja vous here, because I mean this is something that you've seen time and time again with a lot of the workers that are in industries that are a little bit more labor intensive. I mean, car making is just one of them. Railroads, for example, is another. Shipping logistics is another one. Remember when we were talking about the Team Stars negotiations and working conditions simply as a function of do you get air conditioning in delivery
trucks was a sticking point in those negotiations. Similarly, you are seeing those working conditions for the United Auto Workers as well. Sick pay is also part of the agenda. I remember for the railroad strikes, sick pay was not included at all. They didn't get any sick pay. You essentially got docked actually for taking a sick day in
the railroad industry due to laws from ages ago. Car making is very very interesting because, again, similar to some of these other industries, it's dealing with a massive structural shift, and in the absence of really a bigger pay raise, they're saying, look, we need to have better lives, and those are demands that have really come I think with more force post COVID.
Let's talk about the strategy that the United Auto Workers is mounting here with these targeted strikes of one Ford plant that makes Ford broncos, another for General Motors that makes Chevy Colorado pickups, and a Jeep Wrangler plant owned by Stilantis. Interesting strategy here to go after just a few plants. So work isn't completely stopping.
Work isn't completely stopping because they are still at the bargaining table. Remember, negotiations are ongoing. And even though you did see President Shaan Faine of the Night Auto Workers, you need to step away at midnight to really join some of the picket lines in some of these plants where workers literally walked off of the property to protest, you are going to expect him to come right back
to the negotiating table. So that's going to be something you're going to be hearing in the coming days the new offers coming from the carmakers. But in the meantime, yeah, you are going to see some disruption in some of the plants. The strategy is really interesting though, because they've pinpointed the plants that are essentially the most efficient, that are the most needed in this kind of output operation from the big car makers. That's going to be significant.
But Nathan, you mentioned strategy, and I think strategy in terms of negotiations is important as well, because something that I think has really set the tone for a lot of the labor movement from Hollywood to Silicon Valley to even Wall Street has been just how much force you
use carrot and the stick method. And it seems like the stick method is really what's winning here, given that even the Teamsters negotiat negotiators came down to the eleventh hour, they were willing to go hard and they basically walked out as well or threatened to. And it became a very aggressive situation for lack of a better term, as opposed to negotiating kind of in good faith. It became quite literally a threat, we are leaving unless you can
help us out. And there is a force to that and a momentum to that that we haven't seen in decades.
Well, what kind of damage could strike like this do targeting these particular plants, because there are other plants for all three of these automakers that are still presumably going to be putting out some really popular models.
Well, the irony here is that on the surface, it sounds like these car makers are the ones that are going to get hurt, but actually it's not God to the end consumer that's going to get hurt. And I think the Mercedes ben ceo put it beautifully where he said, look what this does by taking about one hundred and fifty thousand people off of the labor market for car
making is increased, the cost of labor. Suddenly, all the other workers that are not a part of this union are going to be charging more for their time and for their expertise, and all of a sudden, you now have a higher margin that the carmakers have to deal with. So that's where the car makers get hit, and that's where the damage is done there. But then those costs
are passed on to the consumer. So if you're walking into a store, any car store around the world, might I add, your end price is going to be pretty significant. Not to mention the people of Detroit and the people of Michigan. There was one study that said, if this strike goes out long enough, because carmaking is so concentrated in that part of the country, the entire state of Michigan could dip into recession.
What kind of contingency plans do the automakers have if the strike does go on for an extended period of time.
Well, not very many, is the answer. I mean, essentially, the go to here would be to slow down some of the ev production that they have. Fom GM have already done that when they've dealt with supply chain issues
as well. But again this is kind of at the heart of the issue between a lot of these workers are saying, Look, EV manufacturing doesn't require the same skill level that a lot of these workers have, and on top of that, it involves a lot of automation as well, which kind of makes their jobs pointless to some extent. So again that's really part of the negotiations. But I imagine the EV production is what gets hit first.
Gritty Gupta part of our team of Bloomberg News reporters covering the autoworkers' strike just getting underway for Ford General Motors and Stilantis KRITTI thank you. We'll be checking back with you throughout the days and potentially weeks to come on this. But now we want to turn to the biggest initial public offering of twenty twenty three, Armholdings, which rose as much as twenty two percent in its trading
debut on the Nasdaq. Moments after those shares began trade, the CEO of the chip designer, ren A Haas, joined Bloomberg's Caroline Hyde on Bloomberg Television and expressed confidence in the company's growth rate and the potential for artificial intelligence AI is everywhere, and.
If it's your edge device like the Assistant or the Alexa, or your autonomous vehicle, that's all AI. And now we're seeing it in the cloud in the data center with all the growth of Nvidia in Vida announcing one of their newest products, grace Hopper, that is based on ARM, so ARM is everywhere relative to AI, we also have a very unique business model that gives us the ability to have a very very good vision in the future
in terms of when people use our products. So relative to our confidence in the outlook, we have a very very high confidence that the growth rate that we have talked about will be sustained.
How lord were invested about China and your exposure.
I think there were a lot of questions, as you can imagine about China in general, given all the geopolitics, Our business there looks a lot like the rest of the world. We have great growth in the data center, we have great growth in automotive. China's huge on electric vehicles, so it's been terrific there for us. I have the same kind of headaches that every other tech CEO has regarding how to navigate through this, but no different.
Do you think there will be more pressure now that you're public again.
Ultimately, I mean you came to ARM.
In twenty thirteen, you were listed at that point, but it's not meanin it's twenty sixteen that you have been How does the game change as a leader of that business now?
Yeah, I think there's some things that we were able to do as a private company that will just be different. Right, quarterly earnings, making sure that we hit all our commitments. But ARM is not a business you measure from quarter to quarter. You measure us over years and decades, and the long term vision is something that I am very, very passionate about, and we'll continue to drive the company the same way a private or public.
You have a lot of key vested interests, whether they be your client's Apple, TSMC and TAIL taking big stakes in the company.
How important are those voices? Visa v Masses, the head of soft Bank. I'm sure you're on the phone too daily.
Yeah.
So one of the challenges of our industry and FAILI with ARM is that the fact that we're everywhere, none of this works unless we play nice with others. So we have to have a lot of engagement for strategic partners and making sure that we're managing that balance, including Masa, our chief shareholder.
Do you think you go public in the UK?
I'm sure it's been bitter sweet for the London Stock Exchange today.
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.
How convinced are you that it is going to be in the bottom line evident in the next coming quarters.
As far as AI, oh, I think it's un questionable that AI, which has already been here right for a number of years, the cheap D moment taught us that, oh my gosh, the capability of what this can do going forward has gone up a level. And I think we've seen that over and over in our industry. There tends to be lightning bolt moments that greatly accelerate the adoption of technology. Ultimately down the road, how people make money off that. It'll get figured out. But AI is
here to stay. That's an unquestionable.
This is Bloomberg day Break Today, your morning brief on the stories making news from Wall Street to Washington and beyond.
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I'm Karen Moscow.
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