Union leaders crack down on U.S. commerce
The strike that shut down Eastern Port and Mexico's Gulf Coast ports is entering its third day, but those behind the work stoppage are showing no signs of relenting.
Introducing Harold Daggett (78), president of the International Longshoremen's Association. He is leveraging the resurgent power of organized labor to pose a major challenge to the American economy in the name of raising wages for union members.
“Let's show these greedy bastards that they can't live without us.” Daggett spoke Tuesday as the ILA's roughly 45,000 members walked off work at more than a dozen ports. The union is demanding significant increases in wages and benefits from major shipping companies, including a 61.5% wage increase over six years.
But Daggett doesn't stop there, calling for limits on the deployment of automated technology at ports, even though the U.S. lags behind other global terminals in efficiency.
The financial risks are significant. These ports account for about 60% of U.S. container-based trade, handling nearly $600 billion worth of imports, according to S&P Global Market Intelligence.
“People are going to stand up and realize how important the work of shoreworkers is,” Daggett told The Wall Street Journal. “They won't be able to sell cars. They won't be able to stock the malls. They won't be able to do anything in this country.”
Daggett has led the union since 2011. After rising through the ranks. Because of his great stature, the ILA recently installed a statue of him outside its headquarters.
That's despite criticism of his pay (he earned $728,694 as ILA director, according to federal filings) and long-standing accusations that he has mob ties. (He denies the claim.)
Although Daggett seems well aware of his power to control even the White House, It has avoided antagonizing powerful union leaders who need political support. President Biden has pressed shippers to improve their proposals to restart talks.
That said, Daggett appears to have a soft spot for Democrats and Republicans alike, meeting with Donald Trump at Mar-a-Lago ahead of the walkout.
Some believe that challenging Daggett may be the best way to end the fight. Analysts at JPMorgan Chase & Co. and Moody's don't expect the conflict to end unless the government intervenes.
That could hurt: Last month, Mr. Daggett warned Biden against invoking federal law to break up the strike, threatening to delay resumed operations. “In today's world, we'll cripple you,” Daggett said.
what's happening here
Tesla's sales are increasing, suggesting that consumer interest in electric vehicles may be on the rise again. The automaker said Wednesday that global sales rose 6.4% in the third quarter, the first increase of the year. However, the numbers were lower than analysts expected, and Tesla shares fell more than 3% on the news.
President Biden opposes an Israeli attack on Iran's nuclear facilities. Biden said Tuesday that he does not support attacks on Iranian facilities in retaliation for missile attacks by the Iranian government, amid concerns about escalating wars in the Middle East. But he said the G7 countries had agreed to impose new sanctions on Iran.
The owner of the Miami Dolphins is said to be close to selling a minority stake. According to Bloomberg, NFL team owner Stephen Ross is in advanced talks with Ares Management and Brooklyn Nets billionaire owner Joe Tsai. The agreement is one of the first deals since the league allowed private equity firms to buy teams.
Clouds hanging over OpenAI's big round
OpenAI has finally closed on a major funding round, valuing the ChatGPT creator at a staggering $157 billion, nearly double its valuation just nine months ago.
This could give unprofitable startups billions of dollars more in funding to catch up with rivals in the artificial intelligence race. But this round shows how competitive it is.
Who is participating: OpenAI has raised $6.6 billion from investors led by Josh Kushner's venture capital firm Thrive Capital. The round includes Microsoft, Nvidia, SoftBank's Vision Fund, Fidelity, UAE investment firm MGX, Tiger Global Management, Kochu Management, Khosla Ventures, Altimeter Capital, and Cathie Wood's ARK. Venture funds also participated.
This round highlighted the widespread belief in OpenAI's superiority. Potential investors were reportedly asked to pledge at least $250 million just to see the company's financial documents. Some have exceeded that, with SoftBank investing about $500 million and Tiger investing about $350 million.
Thrive has committed $750 million of its own funds and $550 million from other investors through a special purpose vehicle, making OpenAI one of its largest single investments. . DealBook says OpenAI is leading the field in many aspects, including products, training data, and engineering talent, and that its value will continue to grow as AI continues its path to becoming a $1 trillion industry. I hear the argument.
But OpenAI also faces tough challenges. The startup is expected to lose $5 billion this year and will need to keep raising new funding to continue competing with larger rivals like Google and Amazon.
This has led OpenAI to abandon some long-standing principles. Under the terms of the new round, the startup has two years to convert from a nonprofit to a for-profit business, or the new funding will become debt.
OpenAI is said to have received great demand from investors. They had to pledge not to invest in certain major competitors, according to the Financial Times and the Wall Street Journal. These companies include Anthropic, founded by OpenAI alumni; Safe Superintelligence was recently co-founded by a former lead scientist at OpenAI. xAI is run by Elon Musk, co-founder of OpenAI.
Given the wide range of venture companies investing in AI, this provision likely excluded many potential investors. The fact that OpenAI was still able to attract prominent investors into the round shows that OpenAI has power in the industry. But it also suggests the company is concerned about increased competition.
Harris and Trump split on manufacturing and trade
One of the few things Vice President Kamala Harris and Donald Trump agree on is the need to strengthen domestic manufacturing.
But presidential candidates are proposing different approaches to doing so, forcing companies to prepare for one or the other in November.
Harris appears likely to continue the Biden administration's approach. President Biden is using industrial policy to restore growth and jobs, with the Control of Inflation Act and the CHIPS and Science Act encouraging private companies to invest billions of dollars in clean energy and semiconductor manufacturing.
Harris has promised tax credits to support manufacturing in the steel industry as well as biotechnology and aerospace.
President Trump is talking about tariffs and trade wars. He promised to take a more aggressive approach than in his first term, proposing a 60% tariff on imports from China and 10% or more on products from other countries. did. President Trump also threatened to impose 100% tariffs on cars imported from Mexico.
And he went after individual companies, warning John Deere of penalties if the farm equipment maker moved production to Mexico.
(It's worth noting: Trump has a track record of making policy claims and threats that don't materialize, and the U.S. trade deficit with China has skyrocketed during his presidency.)
Blue-collar political support and the strengthening of American industry are the driving forces. Both candidates have spent considerable time and political capital courting working-class Americans, especially in battleground states.
But in a difficult geopolitical environment, both Harris and Trump want to strengthen domestic manufacturing to maintain access to critical supplies for industries such as defense and technology.
Companies are bracing for disruption either way. Harris has said she would continue with “targeted” tariffs, which could reflect Biden imposing levies on specific industries rather than blanket restrictions. She also said she would work with allies, as well as Biden, to specifically counter China.
But President Trump's approach could lead to more battles. Trading partners such as the European Union retaliated against the U.S. tariffs by imposing import restrictions on prominent American products such as Harley-Davidson motorcycles. And in March, unless a deal is reached, tariffs on American whiskey from Europe will go into effect.
Jordan takes on NASCAR
Michael Jordan was famous for playing defense on the basketball court. Now, his NASCAR team follows the family that dominates motorsports.
Jordan's 23XI Racing and another team, Front Row Motorsports, have sued NASCAR and its CEO, Jim France, alleging anti-competitive conduct that unfairly harms their profits.
The lawsuit is the latest move in a long-running dispute. Jordan and longtime business partner Curtis Polk bought the NASCAR team in 2020, investing millions of dollars.
Their bet is that NASCAR's broadcast rights will become more valuable and the competition could evolve into a spectator sport with much wider appeal. That hunch was correct last year when NASCAR signed deals with Amazon, Fox, NBC and Warner Bros. Discovery worth $7.7 billion.
But many teams say they can't make money because of the way NASCAR operates.. 23XI has accused NASCAR of not distributing its vast broadcast revenue equitably, saying teams collectively expect to lose more than $200 million over the next five years if nothing changes.
Bob Jenkins, owner of Front Row Motorsports, told CNBC that the company hasn't made a profit in 20 years.
NASCAR's ownership is different from other sports leagues. Unlike the NBA and NFL, which are co-owned by team owners, NASCAR has been controlled by the French family since 1948. The team is not a permanent franchise, but instead relies on a charter, which it can lose if it performs poorly or underperforms. Their cars aren't racing consistently.
NASCAR controls the sport, including purchasing racetracks and forcing teams to buy from designated suppliers. 23XI Racing and Front Row Motorsports say in their lawsuit that “the French family runs NASCAR like a closed shop, wielding exclusive power and dealing in smoke-filled back rooms.” claims.
Jordan wants more funding and permanent change. Jeffrey Kessler, a prominent sports lawyer representing the plaintiffs, said the plaintiffs are seeking an injunction to “end NASCAR's exclusionary practices and restore competition.” 23XI Racing and Front Row Motorsports are also seeking financial damages over the “below market” terms of the team charter.
NASCAR did not respond to a request for comment.
speed reading
Great deals
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Levi Strauss is considering selling its Dockers brand, which weighed on strong quarterly results. (CNBC)
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Toyota will invest $500 million in flying taxi company Joby Aviation, with the aim of launching commercial service next year. (FT)
elections, politics, policy
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Jack Smith, the special counsel pursuing the federal election case against Donald Trump, says in newly released court filings why the former president faces federal charges of plotting to overturn the 2020 election. He argued that he should not be exempted from prosecution. (New York Times)
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“Elon Musk donated tens of millions of dollars to Republican causes far earlier than previously known” (WSJ)
the best of the rest
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The ex-girlfriend of Pavel Durov, the founder of the messaging app Telegram, has accused him of abuse. (New York Times)
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Four months after Adam Neumann's failed bid to buy WeWork, he introduced a competitor to his former company. (Bloomberg)
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“LVMH took over the Paris Olympics. Now they're stuck with F1.” (WSJ)
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