1) An FAA (Federal Aviation Administration) official states that Southwest Airlines should ground 49 of its airliners that had repairs failing to meet legal standards. The official claims there is a high likelihood of a violation of a regulation, order or standard, so the FAA must take immediate action to revoke the certification of the planes. Aircraft in questions is the Boeing 737 NG which were previously owned by foreign carriers, saying inspections should be speeded up, but fall short of grounding the aircraft.
2) Dean Foods, America’s largest milk producer, is filing for bankruptcy. The 94 year old company has struggled in recent years because Americans are drinking less cows milk. In 2019, sales are down 7%, while for the first half of the year, profits are down 14%, with Dean’s stock dropping 80% in a year. The company is straddled with debt and is unable to fully fund its pensions.
3) The retail giant Walmart is experiencing internal strife over its e-commerce operation with the corporate culture of traditional marketing. Apparently, Walmart’s management doesn’t have a real understanding of the complex technology of e-commerce. The impact of Walmart’s plunge into online retailing has reduced Walmart’s already thin profit margins, which are at historic lows. Some high profile acquisitions and other strategic moves have cratered and talented executives on both sides have departed.
4) Stock market closings for – 12 NOV 19:
Dow 27,691.49 unchanged Nasdaq 8,486.09 up 21.81 S&P 500 3,091.84 up 4.83
1) GE (General Electric) announced they will freeze pensions for about 20,000 salaried U.S. employees in order to help the ailing conglomerate cut debt and reduce its retirement fund by $8 billion dollars. Presently, the company has $105.8 billion dollar debt. Their pension plans are among it biggest liabilities and is underfunded by about $27 billion dollars. This move will not effect present retirees who are collecting their pensions.
2) Twenty-one days into the strike, the UAW (United Auto Workers) and GM (General Motors) contract talks have taken a turn for the worse. The snag is product commitments for U.S. factories for new vehicles, engines, transmissions and other items represented by the union. GM is losing $80 million dollars a day, while striking workers are earning about one fifth their regular pay as $260 a month strike benefits.
3) The U.S. railroads slump is getting worse from the slowdown as manufacturing threatens U.S. economy. Trucking is also feeling a slowdown with less than truckload cargos decreasing, although long haul trucking seems to be holding up. Truck rates have dropped, which is pulling some freight business away from trains.
4) Stock market closings for – 7 OCT 19:
Dow 26,478.02 down 95.70 Nasdaq 7,956.29 down 26.18 S&P 500 2,938.79 down 13.22
Canada Pension Plan Investment Board along with Ontario Teachers Pension Plan have teamed up in investing capital in IDEAL, a Latin American infrastructure/building conglomerate. The partnership combined exceeds 1.35 billion. It said to be one of the biggest projects in Mexico as far as infrastructure and road development. Billionaire investor Carlos Slim own a major stake in the company.
The partnership seems to be beneficial for both parties as IDEAL was seeking funding and the pension funds were seeking to invest their funds in projects that would have logistical impact in Latin America and in Canada. IDEAL trades on the Mexican stock market, and has offices all over Latin America as expands its business and structural model in Mexico and the rest of Latin America. -SB