Tag: business

Are small nations welcome at the EU’s industrial policy table?

Post By World , , , , ,

It is not just about the money, it is about what each country — no matter its size — can bring to the table, Marius Stasiukaitis writes.

The Green Industrial Plan, comprehensive as it might be, falls short of an industrial policy that would work equally well across the entire European Union. 

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Instead, new policies set broad rules, leaving the actual industrial development strategy in the purview of individual member states. 

While bolstering industry in manufacturing hotspots, this approach might significantly distort the market in ways that do a disservice not just to businesses but to the “green” part of the plan itself.

The EU’s industrial policy should not turn into a subsidy race

A new era of competition is unfolding for investments in strategically vital sectors across the world. 

Last year, the United States enacted the Inflation Reduction Act and Chips Act, introducing generous subsidies to incentivize investments in green technologies and semiconductors. 

In February 2023, the EU followed with the Green Industrial Plan, which relaxed state aid rules for member states, granting them the ability to match subsidies offered in other regions around the globe.

While the intention is likely to prove to be a net positive for the EU, reducing the EU’s industrial policy’s role to a rule set for a subsidy race between member states could prove to be costly. 

For smaller economies, it might be a particularly difficult challenge. This has the potential to undermine Europe’s green transition and weaken its competitiveness, losing prospective investment opportunities in the long run.

This could also imperil the bloc’s cohesion policy

We have already seen the EU’s leading economies roll out the red carpet for major investors, backing their invitation with impressive sums. 

For example, recent media reports have revealed that the German government provided Intel with €10 billion in subsidies to establish a €30bn chip plant within its territory.

Whereas France announced that it has received EU authorisation to grant €1.5bn in subsidies to a €5.2bn electric vehicle battery factory.

These announcements come at a time when many EU countries are facing rising borrowing costs, which could further complicate their efforts to secure significant additional funding for their industrial development. 

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The government deficit-to-GDP ratio in the eurozone stood at 3.6% in 2022 and might increase even further in 2023. 

It is also a matter of relative cost. For smaller countries such as the Baltic States or Slovenia, the size of the subsidy that Germany granted to Intel alone would exceed 10% of their GDP. 

No matter what they choose to do regarding upgrading their infrastructure, a subsidy in the billions would most likely trump that. 

In this scenario, the EU’s cohesion policy might also be jeopardised, as large countries will stronghold their position in tomorrow’s industries.

A paradigm shift could make the EU more competitive

Most importantly, this approach will likely undermine Europe’s green transition, making the process more costly. 

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A policy that favours larger countries with greater financial resources raises the risk of significant market distortions, diverting investments from locations in the EU where their lasting competitive advantages would be most viable.

The EU’s industrial policy is more likely to succeed if it utilises the distinct strengths held by its member states. 

This would require a paradigm shift in the EU’s approach, moving beyond merely relaxing state aid rules and towards implementing a shared industrial development strategy and financing at the EU level. 

However, it is a worthwhile step as this shift would make the EU more competitive on the global stage, capitalising on the strengths of its member-states that already have a long track record in attracting foreign direct investment.

Small advanced economies, such as the Baltic States or Nordic countries, hold the potential to propel the growth of green industries in the EU. 

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In contrast to the larger economies within the EU, they offer a more enticing business environment, showcase remarkable openness to foreign direct investment, boast ambitious renewable energy targets, and demonstrate a greater ability to adapt to the demands of future industries.

Smaller countries can also have ambitious plans

For instance, since the 1990s, Ireland has emerged as the premier EU destination for foreign direct investment, alluring multinational corporations across various sectors such as semiconductors, life sciences and digital technologies, despite its small size. 

This is attributed to its favourable business environment, skilled workforce, and strategic location.

Furthermore, in recent times, several other nations have joined the league. According to the 2023 Greenfield FDI Performance Index, Portugal and Lithuania have remarkably attracted about six times more investment projects than the size of their economy would predict, positioning them as leading overachievers within the EU.

Notably, small advanced economies that have been focusing on attracting foreign direct investment to fuel their growth also have successfully put all the essential building blocks in place. 

For example, the Baltic States, along with Denmark and Ireland, are ranked highest in the EU for their business environment in the Economic Freedom Ranking. 

Renewable energy could provide another compelling reason why smaller countries in Southern or Northern Europe are strategically positioned to drive the growth of green industries. Nordic countries are already global leaders in renewable energy production, and the surplus of clean energy was crucial to the success of Northvolt’s first battery factory in Sweden. 

The Baltic States also have ambitious plans; for instance, Lithuania aims to meet 90% of its energy demand through local production of renewable energy by the end of this decade. 

As the issue of energy independence is vital for countries on the eastern border of the EU, we are likely to see an acceleration of their green transition.

It’s not about the size — it’s about what you can bring to the table

The success of the EU’s industrial policy and green transformation could hinge on the smaller countries within the EU. Some of these countries have already mastered the fundamentals of future economy — adaptability and flexibility. 

This makes them ideal hubs for sandboxes or emerging industries with rapidly evolving technology. 

And while financial incentives will retain strong appeal, they will not be able to replace the agility of the smaller European states, crucial for securing Europe’s competitiveness. 

In other words, it is not just about the money, it is about what each country — no matter its size — can bring to the table.

Marius Stasiukaitis is the Head of Strategy at Invest Lithuania, a non-profit investment promotion agency founded in 2010 by the Ministry of Economy of the Republic of Lithuania.

At Euronews, we believe all views matter. Contact us at [email protected] to send pitches or submissions and be part of the conversation.

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#small #nations #EUs #industrial #policy #table

Despite the EU deforestation law, companies are backing palm oil. Why?

Post By World , , , , ,

There are several possible explanations for the apparent contradiction between regulatory pressure to narrow on the lowest compliance risks and companies’ willingness to invest in some higher-risk landscapes, Matthew Spencer writes.

Something strange is happening in the palm oil sector. 

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Despite the impending enforcement of the EU Deforestation Regulation (EUDR), numerous companies are intensifying their investment in landscape initiatives. 

This phenomenon is surprising as many of us feared that the EUDR would push companies away from sourcing from higher forest-risk jurisdictions.

Some companies are segregating mills and refineries for Europe and focussing on sourcing from plantations distant from remaining forest, and away from smallholder supply. 

But others are making new investments in landscape initiatives in Indonesia and Malaysia which include many thousands of small farmers. 

A report released recently by the Tropical Forest Alliance (TFA), CDP and Proforest identified a total of 37 landscape and jurisdictional approaches supported by companies and focused on palm production, surpassing any other commodity sector. 

It reflects IDH’s experience in Aceh, where stalwart partners like Unilever, Pepsico and Musim Mas are now being joined by a growing roster of buyers and traders including Mars, Apical, GAR and Mondelēz.

What explains this apparent contradiction between regulatory pressure to narrow on the lowest compliance risks and companies’ willingness to invest in some higher-risk landscapes?

There are several possible explanations.

Deforestation risk can fall quickly in the best landscape initiatives

The evidence for how landscape approaches can reduce deforestation is growing. 

In Mato Grosso in Brazil, which has had a state-wide jurisdictional approach for eight years, Amazon deforestation barely increased under the Bolsonaro government, in contrast to many other states in the Legal Amazon which saw a big jump.

In Aceh Tamiang, Indonesia, deforestation fell to just 30 hectares in 2021 from over 400 hectares in previous years as a coordinated deforestation alert and action plan took effect.

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The success of the landscape coalition in Aceh Tamiang is now inspiring new partnerships in other forest-risk districts in the Aceh buffer zone around the Leuser Ecosystem.

Also, smallholders are the best hope for growing palm oil supply. Palm is currently described by traders as a “sellers’ market” with surging demand in Asia and many mills operating under capacity. 

There is limited room to grow supply from plantations in Malaysia or Indonesia, given their forest protection policies. 

This creates a business case for companies to invest in the growth of independent small farmer productivity, and landscape initiatives allow them to do this in coordination with other business and farmer groups.

Jurisdictional approaches to EUDR traceability are likely to be more cost-effective in smallholder-dominated sourcing areas

The costs of tracing forest risk commodity supply can be very high and can repeat every year as smallholders switch buyers. 

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One service provider estimates that costs are in the range of €6-14 per farm to compile and map geolocation and land title data. 

This data is often already held by the government, so with backing from local authorities who are part of landscape agreements, these costs can be shared.

There is also the tantalising prospect of jurisdictional traceability being recognised by the EU if a verified deforestation-free area can compile geolocation data at the district level rather than physically trace commodities from the farm level through many layers of the local supply chain. 

The Vietnamese government is backing an IDH pilot with ten coffee companies in the central highlands which will compare the costs of different approaches to traceability.

Social risks are impossible to manage without engaging in sourcing areas

Despite its name, the EUDR creates duties beyond deforestation. Imports must also “have been produced in accordance with the relevant legislation of the country of production”. 

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 What is more, it is only the first act of a blockbuster package of new European regulation which means risks will begin to converge in corporate reporting and legal requirements on business. 

Forced labour is notoriously difficult to spot but is a real possibility in palm plantations reliant on migrant labour. 

Child labour is common and impossible to manage without community consent. 

Given that the burden of proof is on the importing business, there is increasing interest from big brands to see if landscape initiatives can address human rights and social risks.

Different responses to business risk?

It’s possible that we are seeing two distinct responses to corporate risk. The “let’s get this risk off the table” approach tries to remove deforestation risk in the quickest and cheapest way but doesn’t join the dots to other social or environmental risks that exist in “forest safe” sourcing areas. 

The second “let’s tackle risks at the source” response manages down interlinked risk by engaging key stakeholders in sourcing areas, often via landscape initiatives.

Landscape initiatives don’t pretend to get rid of all social and environmental risks, but they do reduce them at source. 

That’s why they form part of the risk management strategy of an increasing number of palm buyers and traders. It’s a good bet that existing landscape collaborations are where the best models of forest and farmer-positive palm sourcing and traceability will emerge.

Matthew Spencer is the Global Director of Landscapes at IDH — Sustainable Trade Initiative, established by the Dutch government in 2009 to help improve the sustainability of international supply chains.

At Euronews, we believe all views matter. Contact us at [email protected] to send pitches or submissions and be part of the conversation.

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#deforestation #law #companies #backing #palm #oil

Urinary tract infections in men: Here are 10 things to know | CNN

Post By Health , , , , , , , , , , , , , , , , , , , , , , , , ,

Editor’s Note: Dr. Jamin Brahmbhatt is a urologist and robotic surgeon with Orlando Health and president of the Florida Urological Society.



CNN
 — 

While urinary tract infections are more common in women, men can still get what’s commonly known as a UTI. Here are 10 things I’d like you to know about urinary tract infections, including who’s more at risk and how to get treatment.

UTI is short for urinary tract infection. It’s an infection of the organs in your body – I call them pipes – that are meant to funnel your urine out of your system and into the urinal. Most UTIs are caused by bacteria that work their way into the urethra, prostate, bladder or kidneys.

Way more women than men are diagnosed with UTIs. Anatomically, we feel this happens because women have a shorter urethra – the tube that connects the bladder to the outside world. The shorter length makes it easier for bacteria to travel to the urinary system. Men have longer urethras and therefore can be protected against urinary infections.

But the length of the urethra alone cannot protect men against UTIs – over their lifetimes, 12% of men will get urinary symptoms linked to a UTI. This by no means implies a urethra or penis are short or small. In men, there is usually a more clear pathologic cause to the infection beyond just the length of the urethra.

There are many reasons why a guy may get a UTI – all of them we take seriously and should not be ignored.

Men older than 50 tend to get more infections than younger men. As a urologist, I see men get recurrent infections when they do not properly empty their bladder because of an enlarged prostate. Beyond the prostate, men may not empty their bladder if they have nerve damage from stroke, uncontrolled diabetes or injury to the spine.

Men can also get infections that start from the prostate or testicles that seed up into the bladder, or the opposite can happen where the infection goes from the bladder to the other organs. Kidney stones can also be a cause of infection. (I know this from personal experience – I’ve had a kidney stone myself!)

Younger men may also present with urinary infections because of sexually transmitted diseases. Men can also get an infection if they have a recent procedure done in the urinary system.

4. What are the signs and symptoms of a UTI?

Burning with urination (dysuria), increased urinary frequency, urgency, incontinence, foul smell, blood in the urine, fevers, chills, pain in the abdomen near the bladder. Believe it or not, some men may have zero symptoms and still get diagnosed with a UTI based on urine cultures done for other purposes.

UTI is diagnosed by sending your urine off for a culture. This is when a sample of your urine is processed and evaluated for various strains of bacteria. The most common bacteria identified in urinary tract infections is E.coli. Once the culture is done, the results can guide treatment, which is usually oral antibiotics. There is a test called a urine analysis which can be done quickly in our office which can suggest an infection. However, the best test is an actual culture.

Doctors do not wait for the culture results – which can take one to three days – to start treatment. If an infection is suspected, an antibiotic will be started immediately and then adjusted based on the culture results.

UTIs generally are treated with oral or IV antibiotics. Most infections can be treated with oral antibiotics. However there are superbugs that may be resistant to what we can give you by mouth that may require the use of stronger antibiotics through an IV. Most treatments last seven to 10 days, but can be longer.

In severe cases of infection that has spread to the bloodstream, strong IV antibiotics are started immediately to control the infection. Patients are placed in the hospital to start these strong treatments. You do not have to stay in the hospital for weeks if you have infection in your bloodstream. As long as you are doing well – no fever, normal labs, heart and pulse OK – then you may continue these IV treatments from home. Each treatment is tailored to your condition.

As a doctor, my answer is: No. Men should not try to treat infections on their own. If you have symptoms, get yourself to a doctor or emergency room.

The best prevention is making sure first there is nothing anatomical that needs to be corrected, such as an enlarged prostate, kidney stone or blockage.

Proper hygiene can help prevent infections. Men with uncircumcised penises should make sure they can retract the foreskin and clean under the foreskin and the glans properly. Cranberry supplements have been shown to help prevent infections. Staying hydrated by drinking enough fluids/water during the day can also help. Making sure you don’t hold your urine can help, too. Staying in good health to avoid chronic medical conditions such as diabetes and heart disease will also protect against infections.

9. My infection is gone. Are there any long-term effects on my body?

Recurrent, untreated infections could cause strictures, or tight scars, in your urethra that would slow your stream and make it difficult to empty your bladder. Infections could also cause the bladder to lose its ability to fill and empty properly. In the long run, if you are getting constantly treated with antibiotics, we may run out of antibiotics to give you due to resistance.

The first priority is to clear the infection with antibiotics.

From there, we do a full workup with a detailed history, evaluation of chronic medical problems and exam of the genitals to look for anatomic issues such as a foreskin that won’t retract back. Imaging may include a CT scan of the abdomen and pelvis to look for kidney stones, blocked tubes and other abnormalities.

If you see a urologist, you will likely get a cystoscopy, where we place a camera inside of a small tube into the urethra to look at the inside of your urine channel. The cystoscopy helps look for strictures, large obstructing prostates and changes to the bladder walls. Once a cause is found, it’s aggressively treated with either medication or surgery.

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#Urinary #tract #infections #men #CNN

Meta, Alphabet and 10 under-the-radar media stocks expected to soar

Post By Stock , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

The media landscape is going through a difficult transition, and it isn’t only because streaming is such a tricky business.

Companies such as Walt Disney Co.
DIS,
Warner Bros. Discovery Inc.
WBD
and Paramount Global
PARA
have made heavy investments in streaming services as their traditional media businesses wither, only to find that it is harder than it looks to emulate Netflix Inc.’s
NFLX
ability to make money from streaming.

Some of the companies are also saddled by debt, in part resulting from mergers that don’t hold the same shine in the current media landscape.

Needless to say, this is the age of cost-cutting for Netflix’s streaming competitors and many others in the broader media landscape.

Below is a screen of U.S. media stocks, showing the ones that analysts favor the most over the next 12 months. But before that, we list the ones with the highest and lowest debt levels.

All the above-mentioned media companies are in the communications sector of the S&P 500
,
which also includes Alphabet Inc.
GOOGL

GOOG
and Meta Platforms Inc.
META,
as well as broadcasters, videogame developers and news providers.

But there are only 20 companies in the S&P 500 communications sector, which is tracked by the Communications Services Select Sector SPDR ETF
.

High debt

Before looking at the stock screen, you might be interested to see which of the 53 media companies are saddled with the highest levels of total debt relative to consensus estimates for earnings before interest and taxes (EBIT) for the next 12 months, among analysts polled by FactSet. This may be especially important at a time when long-term interest rates have been rising quickly. Dollar amounts are in millions.

Company

 Ticker

 Debt/ est. EBIT

 Total debt

 Est. EBIT

 Debt service ratio

 Total return – 2023

 Market cap. ($mil)
Dish Network Corp. Class A

 DISH 1,245%

 $24,556

 $1,973

 15%

 -57%

 $1,773
Madison Square Garden Sports Corp. Class A

 MSGS 1,125%

 $1,121

 $100

 -14%

 -4%

 $3,400
Paramount Global Class B

 PARA 656%

 $17,401

 $2,654

 -29%

 -13%

 $9,529
Consolidated Communications Holdings Inc.

 CNSL 651%

 $2,152

 $331

 -26%

 6%

 $441
TechTarget Inc.

 TTGT 629%

 $479

 $76

 16%

 -36%

 $788
Cinemark Holdings Inc.

 CNK 616%

 $3,630

 $589

 61%

 81%

 $1,908
Cogent Communications Holdings Inc.

 CCOI 548%

 $1,858

 $339

 -19%

 27%

 $3,388
E.W. Scripps Co. Class A

 SSP 529%

 $3,084

 $583

 80%

 -42%

 $552
AMC Networks Inc. Class A

 AMCX 492%

 $2,945

 $599

 26%

 -29%

 $357
Live Nation Entertainment Inc.

 LYV 466%

 $8,413

 $1,805

 135%

 22%

 $19,515
Source: FactSet

Click on the tickers for more about each company, including business profiles, financials and estimates.

Click here for Tomi Kilgore’s detailed guide to the wealth of information available for free on the MarketWatch quote page.

The debt figures are as of the end of the companies’ most recently reported fiscal quarters. The debt service ratios are EBIT divided by total interest paid (excluding capitalized interest) for the most recently reported quarters, as calculated by FactSet. It is best to see this number above 100%. Then again, these service ratios cover only one quarter.

Looking at the most indebted company by quarter-end debt to its 12-month EBIT estimate, it would take more than 10 years of Dish Network Corp.’s
DISH
operating income to pay off its total debt, excluding interest.

Shares of Dish have lost more than half their value during 2023, and the stock got booted from the S&P 500 earlier this year. The company has seen its satellite-TV business erode while it pursues a costly wireless build-out that won’t necessarily drive success in that competitive market. Dish plans to merge with satellite-communications company EchoStar Corp.
SATS
in a move seen as an attempt to improve balance sheet flexibility.

It is fascinating to see that for six of these companies, including Paramount, debt even exceeds the market capitalizations for their stocks. Paramount lowered its dividend by nearly 80% earlier this year as it continued its push toward streaming profitability, and Chief Executive Bob Bakish recently called the company’s planned sale of Simon & Schuster “an important step in our delevering plan.”

You are probably curious about debt levels for the largest U.S. media companies. Here they are for the biggest 10 by market cap:

Company

 Ticker

 Debt/ est. EBIT

 Total debt

 Est. EBIT

 Debt service ratio

 Total return – 2023

 Market cap. ($mil)
Alphabet Inc. Class A

 GOOGL 22%

 $29,432

 $133,096

 711%

 47%

 $1,528,711
Meta Platforms Inc. Class A

 META 47%

 $36,965

 $78,129

 717%

 137%

 $634,547
Comcast Corp. Class A

 CMCSA 266%

 $102,669

 $38,539

 77%

 33%

 $187,140
Netflix Inc.

 NFLX 197%

 $16,994

 $8,641

 192%

 41%

 $184,362
T-Mobile US Inc.

 TMUS 378%

 $116,548

 $30,838

 32%

 -5%

 $156,881
Walt Disney Co.

 DIS 263%

 $47,189

 $17,975

 88%

 -4%

 $152,324
Verizon Communications Inc.

 VZ 370%

 $177,654

 $48,031

 36%

 -11%

 $140,205
AT&T Inc.

 T 378%

 $165,106

 $43,681

 31%

 -20%

 $100,872
Activision Blizzard Inc.

 ATVI 93%

 $3,612

 $3,891

 2159%

 21%

 $72,118
Charter Communications Inc. Class A

 CHTR 434%

 $98,263

 $22,651

 89%

 23%

 $62,380
Source: FactSet

Among the largest 10 companies in the S&P Composite 1500 communications sector by market cap, Charter Communications Inc.
CHTR
has the highest ratio of debt to estimated EBIT, while its debt service ratio of 89% shows it was close to covering its interest payments with operating income during its most recent reported quarter. Disney also came close, with a debt service ratio of 88%.

Charter Chief Financial Officer Jessica Fischer said at an investor day late last year that “delevering would only make sense if the market valuation of our shares fully reflected the intrinsic value of the cash-flow opportunity, if debt capacity in the market were limited or if our expectations of cash-flow growth, excluding the impact of our expansion were significantly impaired.”

Meanwhile, Kevin Lansberry, Disney’s interim CFO, said during the company’s latest earnings call that it had “made significant progress deleveraging coming out of the pandemic” and that it would “approach capital allocation in a disciplined and balanced manner.”

Disney’s debt increased when it bought 21st Century Fox assets in 2019, and the company suspended its dividend in 2020 in a bid to preserve cash during the pandemic.

When Disney announced its quarterly results on Aug. 9, it unveiled a plan to raise streaming prices in October. Several analysts reacted positively to the price increase and other operational moves.

Read: The long-simmering rumor of Apple buying Disney is resurfacing as Bob Iger looks to sell assets

The largest companies in the sector, Alphabet and Meta, have relatively low debt-to-estimated EBIT and very high debt-service ratios. Netflix has debt of nearly twice the estimated EBIT, but a high debt-service ratio. For all three companies, debt levels are low relative to market cap.

Low debt

Among the 52 companies in the S&P Composite 1500 communications sector, these 10 companies had the lowest total debt, relative to estimated EBIT, as of their most recent reported fiscal quarter-ends:

Company

 Ticker

 Debt/ est. EBIT

 Total debt

 Est. EBIT

 Debt service ratio

 Total return – 2023

 Market cap. ($mil)
New York Times Co. Class A

 NYT 0%

 $0

 $414

 N/A

 32%

 $6,968
QuinStreet Inc.

 QNST 18%

 $5

 $26

 -153%

 -35%

 $513
Alphabet Inc. Class A

 GOOGL 22%

 $29,432

 $133,096

 711%

 47%

 $1,528,711
Shutterstock Inc.

 SSTK 26%

 $63

 $241

 39%

 -20%

 $1,502
Yelp Inc.

 YELP 31%

 $106

 $344

 78%

 55%

 $2,909
Meta Platforms Inc. Class A

 META 47%

 $36,965

 $78,129

 717%

 137%

 $634,547
Scholastic Corp.

 SCHL 54%

 $108

 $201

 319%

 12%

 $1,314
Electronic Arts Inc.

 EA 73%

 $1,951

 $2,678

 605%

 -2%

 $32,425
World Wrestling Entertainment Inc. Class A

 WWE 93%

 $415

 $448

 479%

 66%

 $9,455
Activision Blizzard Inc.

 ATVI 93%

 $3,612

 $3,891

 2159%

 21%

 $72,118
Source: FactSet

New York Times Co.
NYT
takes the prize, with no debt.

Wall Street’s favorite media companies

Starting again with the 52 companies in the sector, 46 are covered by at least five analysts polled by FactSet. Among these companies, 12 are rated “buy” or the equivalent by at least 70% of the analysts:

Company

 Ticker

 Share “buy” ratings

 Aug. 25 price

 Consensus price target

 Implied 12-month upside potential
Thryv Holdings Inc.

 THRY 100%

 $21.11

 $35.50

 68%
T-Mobile US Inc.

 TMUS 90%

 $133.35

 $174.96

 31%
Nexstar Media Group Inc.

 NXST 90%

 $157.08

 $212.56

 35%
Meta Platforms Inc. Class A

 META 88%

 $285.50

 $375.27

 31%
Cars.com Inc.

 CARS 86%

 $18.85

 $23.79

 26%
Alphabet Inc. Class A

 GOOGL 82%

 $129.88

 $150.04

 16%
Iridium Communications Inc.

 IRDM 80%

 $47.80

 $66.00

 38%
News Corp. Class A

 NWSA 78%

 $20.74

 $26.42

 27%
Take-Two Interactive Software Inc.

 TTWO 74%

 $141.42

 $155.96

 10%
Live Nation Entertainment Inc.

 LYV 74%

 $84.79

 $109.94

 30%
Frontier Communications Parent Inc.

 FYBR 73%

 $15.24

 $31.36

 106%
Match Group Inc.

 MTCH 70%

 $43.79

 $56.90

 30%
Source: FactSet

News Corp.
NWSA
is the parent company of MarketWatch.

Finally, here are the debt figures for these 12 media companies favored by the analysts:

Company

 Ticker

 Debt/ est. EBIT

 Total debt

 Est. EBIT

 Debt service ratio

 Total return – 2023

 Market cap. ($mil)
Thryv Holdings Inc.

 THRY 227%

 $433

 $191

 53%

 11%

 $730
T-Mobile US Inc.

 TMUS 378%

 $116,548

 $30,838

 32%

 -5%

 $156,881
Nexstar Media Group Inc.

 NXST 358%

 $7,183

 $2,009

 63%

 -8%

 $5,511
Meta Platforms Inc. Class A

 META 47%

 $36,965

 $78,129

 717%

 137%

 $634,547
Cars.com Inc.

 CARS 223%

 $451

 $202

 41%

 37%

 $1,253
Alphabet Inc. Class A

 GOOGL 22%

 $29,432

 $133,096

 711%

 47%

 $1,528,711
Iridium Communications Inc.

 IRDM 306%

 $1,481

 $483

 54%

 -7%

 $5,977
News Corp. Class A

 NWSA 261%

 $4,207

 $1,611

 109%

 15%

 $11,940
Take-Two Interactive Software Inc.

 TTWO 272%

 $3,492

 $1,283

 -40%

 36%

 $24,017
Live Nation Entertainment Inc.

 LYV 466%

 $8,413

 $1,805

 135%

 22%

 $19,515
Frontier Communications Parent Inc.

 FYBR 453%

 $9,844

 $2,173

 85%

 -40%

 $3,745
Match Group Inc.

 MTCH 287%

 $3,839

 $1,337

 540%

 6%

 $12,177
Source: FactSet

In case you are wondering about how the analysts feel about debt-free New York Times, it appears the analysts believe the shares are fairly priced at $42.60. Among eight analysts polled by FactSet, three rated NYT a buy, while the rest had neutral ratings. The consensus price target was $43.93. The stock trades at a forward price-to-earnings ratio of 27.7, which is high when compared with the forward P/E of 21.7 for the S&P 500
.

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#Meta #Alphabet #undertheradar #media #stocks #expected #soar

Why auto worker strikes against GM, Ford and Stellantis seem inevitable

Post By Business , , , , , , , , , ,

Members of the United Auto Workers union hold a rally and practice picket near a Stellantis plant in Detroit, Aug. 23, 2023.

Michael Wayland / CNBC

DETROIT – United Auto Workers President Shawn Fain appears ready to fire up the picket lines.

The union’s bulldog new leader has repeatedly vowed to drive a hard bargain with Detroit automakers General Motors, Ford Motor and Stellantis in contract negotiations ahead of an expiration at 11:59 p.m. on Sept 14.

He’s maintained it’s a hard deadline that his leadership team does not plan to extend, like the union has in the past, and that he’s not afraid to take roughly 150,000 auto workers out of factories if necessary.

That — plus the revelation late Thursday that Fain and the union filed unfair labor practice charges against GM and Stellantis with the National Labor Relations Board, claiming the companies weren’t bargaining in good faith — makes a strike against one, if not all three of the automakers, increasingly inevitable.

Unlike prior union leaders, Fain is attempting to negotiate with all three automakers at once, refusing to select a “target” company to focus on while extending deals at the others. He’s also been far more confrontational with the automakers compared to previous union leaders, at times launching personal attacks on executives.

There’s a belief among some industry analysts and experts that a strike, or several, may be necessary to convince UAW members that the union leaders fought as hard as they could to reach the demands.

“I expect there to be a strike,” said Art Wheaton, a labor professor at the Worker Institute at Cornell University. “I think there’s a reasonable chance they strike Stellantis first and then give a couple more days for Ford and GM to give a better offer.”

Wheaton believes that a strike at Stellantis is nearly guaranteed with the sides as far apart as they are now. The union could use that work stoppage as a warning to GM and Ford to finalize their deals, he said.

“I think a strike is almost essential at Stellantis or they will never get a deal ratified,” Wheaton said. “Stellantis is picking a fight, saying, ‘Try me if you dare.'”

Strikes could take various forms, including a national strike, where all workers under the contract cease working, or targeted work stoppages at certain plants over local contract issues.

During a Facebook Live on Aug. 8, 2023, UAW President Shawn Fain

Screenshot

Prolonged strikes against all three of the automakers would be unprecedented and quickly impact the automotive supply chain, U.S. economy and domestic production.

The Biden administration has taken particular interest in the talks, including the appointment of longtime Democratic adviser Gene Sperling to monitor the situation for the White House.

Wall Street watching

Wall Street has warned of a potential work stoppage for several months, and investors have taken heed.

A brief survey of 99 investors by Morgan Stanley found 58% believe a strike is “extremely likely.” That’s followed by 24% who said it’s “somewhat likely.” Just 16% said a strike was unlikely, while 2% said it was “neither likely not unlikely.”

Industry and labor experts agree, and for good reason.

The impending contract deadline follows combative rhetoric by Fain and other union leaders; a years-long labor movement involving work stoppages, including the UAW; and ambitious demands by the union for 40% or more pay increases, retention of platinum healthcare and a 32-hour workweek.

Such demands aren’t typically made public or even fully reported until close to the end of the negotiations, in part as an effort to bargain in good faith but also to avoid setting expectations — either too high or too low — for UAW members, who need to ratify the contracts after the sides announce a tentative agreement.

“I’ve always said that the best way to reach agreements is to be negotiating with each other and not in the newspapers, TV or anywhere else,” said Dennis Devaney, senior counsel at Clark Hill who formerly served as a NLRB board member and attorney for GM and Ford. “I don’t think the public negotiation … is really going to move things along.”

United Auto Workers members on strike picket outside General Motors’ Detroit-Hamtramck Assembly plant on Sept. 25, 2019 in Detroit.

Michael Wayland / CNBC

o be clear, it’s not exclusively up to Fain to call for strikes. It’s up to the UAW’s 14-member International Executive Board (IEB), which Fain leads as president. The leaders, based on weighted votes, must approve such a work stoppage by a two-thirds majority vote.

Then there’s the question of how long a strike would last.

Of its surveyed investors, Morgan Stanley found the vast majority of respondents (96%) expected a potential strike to last longer than a week. Over a third (34%) expect the strike to last longer than a month.

A strike against GM in 2019 during the last round of contract negotiations lasted 40 days and cost the automaker $3.6 billion in earnings that year, GM reported at the time.

The UAW has more than $825 million in its strike fund, which it uses to pay eligible members who are on strike. The strike pay is $500 per week for each member.

Assuming 150,000 or so UAW members covered by the contracts, strike pay would cost the union about $75 million per week. A fund of $825 million, then, would cover about 11 weeks. One caveat: that doesn’t include health-care costs that the union would cover, such as temporary COBRA plans, that would likely drain the fund far more quickly.

Ratification

For much of the union’s history, it was largely expected that members would ultimately approve whatever deal was bargained and endorsed by UAW leaders.

However, in recent negotiations, that hasn’t been the case and the sides have needed to return to the negotiating table.

That was the situation two rounds of negotiations ago, in 2015, with then-Fiat Chrysler, now Stellantis, workers, who voted down a tentative agreement. That same year, GM skilled trade workers also voted against a tentative deal with the Detroit automaker, stalling ratification.

Typically, once a tentative deal is reached between the union and an automaker, the members of that automaker will then vote by local organization on whether to accept the tentative agreement and make it a contract. The whole ratification process can take about two weeks for each company.

“The UAW’s tentative agreement with an automaker is really a set of agreements—the main text, as well as appendixes for different aspects, such as pensions and retirement plans, health care benefits, supplemental unemployment benefits, profit sharing, personal savings plans, life and disability benefits, dependent care benefits, and salaried workers (for those who are also UAW-represented),” said Kristin Dziczek, automotive policy advisor for the Federal Reserve Bank of Chicago’s Detroit branch, in a blog post.

In 2019, it took eight additional weeks to negotiate and ratify all three agreements once the first tentative agreement was reached following GM’s strike. The negotiations and ratification voting ended in early December.

Spokespeople for the automakers declined to comment directly for this article, but reiterated that their teams continue to bargain in good faith with the union in hopes of deals that benefit both sides.

– CNBC’s Michael Bloom contributed to this report.

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Small business confidence is tanking again, especially when it comes to banks and Biden

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As President Biden begins to more forcefully build a reelection case citing Bidenomics, Wall Street forecasts and actual GDP data are supportive, as are recent improving sentiment scores from consumers and CEOs. But on Main Street, small business owners remain a difficult group for Biden to win over.

Small business confidence is back at an all-time low, according to the just-released CNBC|SurveyMonkey Small Business Survey for the third quarter. That’s nothing new for Biden, as small business confidence has hung around a low throughout his presidency. In fact, the latest decline in the confidence index to a score of 42 out of 100 matches the all-time low from exactly one year ago.

With a business owner demographic that skews conservative, the twin economic issues of inflation and rising interest rates have compounded the general concerns about a Democratic administration. But at a time when signs are pointing to progress in the fight against inflation and a potential though by no means certain end to Federal Reserve interest rate hikes, the Q3 data presents more specific — and potentially more troubling — concerns for the president.

Even with a resilient economy, with interest rates at a multi-decade high, the number of small business owners who say they can easily access the capital needed to operate their firms continues to decline, now at under half (48%) versus 53% last quarter. This should not come as a surprise, as higher interest rates make banks stricter when it comes to lending requirements, a dynamic that tends to disproportionately punish small businesses, and linger or even intensify the longer a higher rate environment persists. Even for businesses that can secure loans, double-digit percentage rates are a cash flow challenge.

Data released on Monday from small business trade group NFIB reported similar difficulty among business owners attempting to access capital, with over half (58%) who borrowed or tried to borrow reporting high interest rates as their biggest complaint, and 40% of owners saying interest rates were a significant issue in the ability to access capital.

Wall Street banks and Main Street lending

The latest monthly report from alternative lending firm Biz2Credit from earlier this month shows small business loan approval percentages at banks with over $10 billion in assets at 13.3% in July, an approval rate that has been falling steadily and, pre-pandemic, had been as high as 28.3% in February 2020.

Rohit Arora, CEO of Biz2Credit, noted in a release on his firm’s data that as regulators raise capital requirements at some large banks in the years ahead, steps being taken today to prepare include more hesitancy to lend to smaller companies, since these loans can often range from five to seven years in term length.

Beyond recent concerns about the stability of regional banks, rating agencies say that even the largest Wall Street banks are on downgrade watch, not a situation in which banks are likely to be more accommodating to the capital needs of small firms, and in fact, the CNBC|SurveyMonkey data recorded a sharp drop in financial system confidence among business owners who work with large banks.

When it comes to accessing capital, small firms that hold accounts with large banks recorded the largest drop quarter-over-quarter, a 10% decline, from 59% saying it was easy for them to access business capital down to just 49% now. That was a much larger decline than among business owners who bank with a regional bank (down 2% quarter over quarter) and those who work with a community bank (down 4%). The largest group of small businesses (41%) conduct their business with large banks.

SurveyMonkey’s analysis of the data pointed to a gap between business owners who express confidence and a lack of confidence in banks that has widened from just 1 percentage point in Q2 (49% confident, 50% not confident) to 9 points now (45% confident, 54% not confident) this quarter.

“These data are a good reminder that the general economy for small business owners can often be very different from the economy that consumers on one side or large corporations on the other are experiencing,” said Laura Wronski, research science manager at SurveyMonkey.

The CNBC|SurveyMonkey Small Business Survey was conducted among over 2,000 small business owners across the U.S. between August 7-August 14.

While concerns across the economy about the banking crisis have lessened since the last quarter, that is not reflected in the conditions that small businesses are facing.

“Banking concerns have become even more top-of-mind for small business owners now, with their confidence in the U.S. banking system weakening and their ability to access needed capital hampered,” Wronski said.

Biden’s business supporters are increasingly negative

The CNBC|SurveyMonkey quarterly confidence index includes a series of core sentiment indicators related to policy that contributed to the decline back to the all-time low, with more small business owners saying they expect immigration policy and tax policy to be a negative. 

That’s notable, according to SurveyMonkey analysis of the results, with these index components that had the largest drag on the overall scores not those tied to hiring or economic conditions, but “two factors that fall squarely within the remit of the president and Congress.”

Business owner expectations for revenue and hiring were largely unchanged, and the percentage that describe economic conditions as “good” changed only slightly, from 40% to 38%. More describe conditions as “middling,” up from 43% to 46% this quarter. But only 15% describe business conditions as “bad.”

“Small business owners seem to be more heavily factoring the political environment into their confidence estimations than the economic environment. The economy has shown promising growth over the last quarter, with fewer concerns about a recession economy-wide now and less immediate threat from a banking crisis,” Wronski said.

In the confidence index scoring, rather than broader survey questions, there was a notable drop for Biden. According to SurveyMonkey, overall approval of the president now matches the same level as Q3 2022 survey, with 31% saying they approve and 68% saying they disapprove of the way Joe Biden is handling his job as president. The small business survey data matches the overall trend in the recent FiveThirtyEight polling average.

But Wronski said, “What’s really surprising is that general confidence among small business owners is falling now for the first time among Biden’s supporters.”

With the overall confidence index back at the all-time low of 42, the gap in confidence index scoring specifically between Biden’s supporters and his detractors is now a record-low 18 points, according to SurveyMonkey (55 versus 37). Among survey respondents who identify as Democrats, the quarterly confidence score declined from 58 to 52, the lowest it has been since Biden became president. Among independents, the decline was from 49 to 42, the lowest it has been among these respondents since the first quarter of 2021. Republican confidence moved the least, declining from a score of 39 to 37.

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Weight loss drugs boost sales at retail pharmacies, but they may not help profits much

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A pharmacist displays boxes of Ozempic, a semaglutide injection drug used for treating type 2 diabetes made by Novo Nordisk, at Rock Canyon Pharmacy in Provo, Utah, U.S. March 29, 2023. 

George Frey | Reuters

Drugmakers aren’t the only ones feeling the impact of the weight loss industry gold rush. 

Retailers with pharmacy businesses, such as Walmart, Kroger and Rite Aid, said increased demand for prescription weight loss drugs helped boost sales for the second quarter. 

But analysts note that those blockbuster treatments are minimally profitable for retail pharmacies – and may even come with margin headwinds.

“More recently, you’re starting to hear retailers talk about these drugs. But I wouldn’t say they’re necessarily beneficiaries of the increased popularity,” Arun Sundaram, an analyst at CFRA Research, told CNBC. “They’re really not making much of a profit on the drugs. So it’s really just a traffic driver and not really a profit pool for retailers.” 

Buzzy drugs like Novo Nordisk‘s obesity injection Wegovy and diabetes treatment Ozempic have skyrocketed in popularity over the last year, with high-profile names like billionaire tech mogul Elon Musk among recent users.

Those treatments are known as GLP-1s, a class of drugs that mimic a hormone produced in the gut to suppress a person’s appetite. 

Other drugmakers, such as Eli Lilly and Pfizer, are developing their own GLP-1s in a bid to capitalize on a weight loss drug market that some analysts project could be worth $200 billion by 2030. An estimated 40% of U.S. adults are obese, making successful treatments a massive opportunity for drugmakers. 

But the boom in demand for GLP-1s is also being felt in other parts of the drug supply chain, including the pharmacies that dispense the prescription drugs to patients. 

Are weight loss drugs profitable? 

On an earnings call Thursday, Walmart CEO Doug McMillon said the company expects weight loss drugs to help drive sales for the rest of the year: “We still expect food, consumables, and health and wellness, primarily due to the popularity of some GLP-1 drugs, to grow as a percent total in the back half.” 

In June, likewise, Rite Aid CFO Matthew Schroeder said a jump in pharmacy revenue and the company’s decision to hike its full-year revenue guidance was “due to the increase in sales volume in Ozempic and other high-dollar GLP-1s.” Schroeder was referring to the hefty price tags of GLP-1s, which range from around $900 to $1,300 in the U.S. 

He said those drugs have high sales amounts per prescription, but emphasized that the increased volume of GLP-1s has a “minimal impact” on Rite Aid’s gross profit. 

Kroger CEO Rodney McMullen similarly said during an earnings call in June that GLP-1 drug “sales dollars are a lot bigger than the margin dollars.” 

“We would expect the GLP-1 type drugs to continue but remember, the impact on profitability is pretty narrow,” he said.

That’s because GLP-1s like Wegovy and Ozempic are branded drugs with “very, very low gross margins,” according to CFRA Research’s Sundaram. 

He said retail pharmacies generate high sales for each GLP-1 prescription they dispense but rake in low profits, which is having a slight negative impact on the overall gross margins of retailers like Walmart and Kroger. 

UBS analyst Michael Lasser similarly highlighted in a recent note that gross margins for Walmart’s U.S. business “would have looked even better had it not been for the contribution of the GLP-1 drugs since these carry very low profit rates.”

A selection of injector pens for the Saxenda weight loss drug are shown in this photo illustration in Chicago, Illinois, U.S., March 31, 2023. 

Jim Vondruska | Reuters

Gross margins for branded medications are 3.5% on average for pharmacies, according to a 2017 study from USC’s Schaeffer Center for Health Policy and Economics. That suggests it may take years before a branded drug significantly contributes to a pharmacy’s bottom line.

In contrast, gross margins for generic drugs – the cheaper equivalents of branded medications – are 42.7% on average for pharmacies. 

There are several reasons for the lower margins of branded drugs. For one, branded drugs don’t directly compete with other medications because they have patent protections. That gives drug manufacturers more power when they negotiate drug discounts with wholesalers, which purchase medications and distribute them to pharmacies. 

As a result, there is “little room for wholesalers and pharmacies to capture large margins due to their relative lack of negotiating power,” according to the Association for Accessible Medicines, a trade association representing the manufacturers and distributors of generic prescription drugs. 

What other impacts do retailers face?

But there are also other impacts of GLP-1s to consider beyond a retailer’s pharmacy business.

For companies like Walmart and Kroger, GLP-1 drugs may be indirectly impacting other business categories in a positive way.

That makes some analysts less worried about margin headwinds in pharmacy: “The gross margin headwind is less of a risk overall for Walmart because any footstep in the door often ends up with multiple items in a basket,” KeyBanc analyst Bradley Thomas told CNBC. 

“Walmart is generally not a quick store that you just pop in on the way home,” he said. “They’re going to make multiple purchases, and I think we’re seeing a lot of discretionary categories actually see a lift from some of this incremental traffic they’ve been getting lately.” 

Thomas added that GLP-1 drugs only fall under one part of Walmart’s business: “If you’re listing off the most important things that are driving Walmart’s strong sales performance right now, it’s probably not making the top 10,” he said. 

It’s a slightly different situation for Rite-Aid and similar companies like CVS Health and Walgreens.

Those companies have retail pharmacies but also other business segments that are directly affected in different ways by the boom in GLP-1 drugs.

For example, CVS also operates a health insurer and pharmacy benefit manager, or PBM, which maintains formularies and negotiates drug discounts with manufacturers on behalf of insurers and large employers.

The increased demand for GLP-1 drugs is likely more of a headwind for health insurers since they have to cover the costly drugs for beneficiaries, but CVS says “the risk is manageable” in that business division.

Meanwhile, PBMs may benefit more from the increase in GLP-1 use since they negotiate significant discounts on drugs and drive competition between manufacturers – but they often don’t pass along all of the savings to insurers.

“Each of the businesses kind of has GLP-1 in them and they are impacting them in a variety of different ways,” CVS CEO Karen Lynch said during an earnings call last month.

Correction: The Association for Accessible Medicines is a trade association representing the manufacturers and distributors of generic prescription drugs. An earlier version misstated its name.

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How gas station economics will change in the electric vehicle charging future

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As electric vehicles proliferate, some gas stations are making expensive overhauls to add EV charging stations. 

In most cases, they aren’t scrapping traditional liquid fuel pumps. But select locations, including an RS Automotive in Takoma Park, Md., and a Shell station in Fulham, England, have made a full switch.

Location, cost, power requirements and conversion time are among the multiple considerations that factor into a gas station’s decision to convert all or a portion of their existing infrastructure to allow for EV charging. 

“Figuring out how to do this on an active site can be complex and challenging,” said Neha Palmer, chief executive of TeraWatt Infrastructure, which is developing a network of electric vehicle charging centers for fleet operations across California, Arizona, and New Mexico. “How do you sequence the construction when you have vehicles that might want to fuel there?” 

Here’s what gas station owners need to know about the EV charging trend and their future.

The EV fast-charging model

Locations like office complexes, hospitals and hotels typically offer a slower charging option, since people generally stay put for hours at a time. Gas stations, however, are investing in Level 3 chargers, which are more powerful and generally charge a car in 20 to 30 minutes. 

While slower charging stations are often free to motorists, that’s not generally true for fast charging stations, given ongoing operational expenses such as electricity and extra fees charged by utilities in commercial settings, said Seth Cutler, chief operating officer of EV Connect, whose software tools help companies build charging station networks.

Big oil company franchisers and car dealers are on board

For large oil giants, adding EV chargers is both a defensive and offensive play. 

Gas station numbers have been decreasing at a sharp rate in the past three decades and the trend is expected to continue in the coming years, according to Shubhendra Anand, vice president of research and strategy at Market Research Future. In fact, at least a quarter of service stations globally are at risk of closure by 2035 without significant business model tweaks, according to consulting firm BCG.

The Biden administration has a stated goal of having 500,000 electric vehicle chargers nationally where EVs make up at least 50% of new car sales by 2030. By current administration estimates, there are more than three million EVs and more than 130,000 public chargers nationwide.

The European oil majors are among the energy sector leaders in the global EV charging push.

Shell has EV-charging-only mobility hubs in China and the Netherlands, in addition to the Fulham location. The company intends to own more than 70,000 public EV charge points worldwide by 2025, and 200,000 by 2030, according to an email statement from Barbara Stoyko, senior vice president of mobility for Shell Americas.

BP also sees the need for mixed-use hybrid refueling and EV charging stations, according to Sujay Sharma, chief executive of BP’s electric vehicle charging business in the U.S. “Today’s gas stations are well positioned to adopt EV charging due to locations in high-demand areas, in addition to their existing convenience offerings including restrooms, food and beverage,” Sharma stated in an email. 

Franchise car dealers are also increasingly getting on board, thanks to pushes from automakers like GM and Ford.

As of late last year, 65% of Ford’s dealers had opted into the EV certification program (a little under 2,000, according to data shared by Ford), as it has started to make the role of car dealers central to the EV transition process. 

The National Automobile Dealers Association said in a May release that franchise owners will spend an estimated $5.5 billion on EV infrastructure across OEM brands, with per store costs ranging from $100,000 to over $1 million. 

Upfront costs can be jaw-dropping, incentives help

Adding EV charging capabilities is not a one-two decision that owners should take lightly. Indeed, the return on investment could be seven to 10 years on average, according to an estimate provided by Yair Nechmad, co-founder and chief executive of Nayax, a global commerce enablement and payments platform, which offers its services to gas stations.

The hardware and software for fast charging can run between $50,000 for one charger and $500,000 for multiple fast chargers and dispensers, said Michael Hughes, chief revenue officer of ChargePoint Holdings, a technology company that makes EV charging hardware and software to help drivers find local charging stations and amenities. The infrastructure, meanwhile, which includes the cost of breaking ground, running power, permits and contractors, generally costs about twice that, he said.

That makes it advisable to incur all the infrastructure changes upfront, even if a gas station only intends to make a few chargers available at the onset, said Rohan Puri, chief executive of Stable Auto Corporation, which helps make charging stations more profitable for companies that own and operate them. His advice: “Put in as much power as you think you’re going to need in 10 years.”

There are numerous federal, state and utility-based incentives for commercial businesses to purchase and install fast chargers. This includes the U.S. Department of Transportation’s Federal Highway Administration NEVI Formula Program, which provides generous funding to states to strategically deploy EV charging stations. 

Gas station owners can search for information on incentive programs they may qualify for.

Location is a key factor, gas station franchise concerns

Even with incentives, there can be barriers to entry, location being a major factor. According to the U.S. Department of Energy, 80 percent of EV charging happens at home, which makes adding EV charging less appealing for in-town gas stations, Hughes said. Local gas stations also don’t generally have amenities to keep people entertained while they are charging their vehicles.

Real estate can also be prohibitive. A traditional gas station may have two islands with four pumps each for liquid fuel; the same utilization rate would require about 40 charging stations, Hughes said.

By contrast, gas stations along major highways between highly traveled destinations can be ideal for electric charging hubs. These locations tend to have multiple amenities, offering people the opportunity to grab a cup of coffee, get a quick bite to eat, stretch their legs or walk the dog while they charge their vehicle, Hughes said.

Convenience stores like Sheetz, Wawa, Royal Farms and Buc-ee’s that double as gas station operators are also starting to add electric chargers at certain locations, said Albert Gore, executive director of The Zero Emission Transportation Association, a federal coalition that advocates for EVs, and who is a former Tesla and SolarCity executive. It can’t be “a place that you’re just going to run in and buy a Snickers,” Gore said.

While there can be a first-mover advantage for gas stations, some owners, like Blake Smith, founder of SQRL Holdings, a gas station and convenience store operator, are taking it slow. His company operates more than 150 convenience store gas station locations and offers electric charging in select locations in Florida. By contrast, the company hasn’t installed any EV charges in Arkansas, where it has more than 60 stations.

“I would never recoup my investment,” he said, adding that a move to all electric charging could be decades away. “We’re not flipping a switch to where gas vehicles are getting off the road and it will be EV-only.”

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What Wall Street needs to know about UAW talks, a potential strike, and what it could all cost

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United Auto Workers members on strike picket outside General Motors’ Detroit-Hamtramck Assembly plant in Detroit, Sept. 25, 2019.

Michael Wayland / CNBC

DETROIT – The Oracle of Omaha is cutting exposure to the U.S. automotive industry amid union negotiations — potentially for good reason.

Warren Buffett’s Berkshire Hathaway this week said it nearly halved its stake in General Motors in the second quarter. While the firm didn’t disclose its reasoning, the sale front runs what is expected to be a challenging end of the year for the U.S. automotive industry, plagued by contentious contract talks between the United Auto Workers union and GM, Ford Motor and Stellantis.

The talks, which cover nearly 150,000 U.S. auto workers, could cost the automakers billions of dollars in additional labor costs, work stoppages or, in a worst-case scenario, both.

New UAW leadership team has dubbed these talks the union’s “defining moment.” President Shawn Fain has already deployed harsh messaging and a few theatrics, including throwing contract proposals by Stellantis in a trash bin, and there’s been little to no talk about “give and take” or “win-win” deals.

“They’re ready to strike if a deal does not happen,” said Melissa Atkins, a labor and employment partner at Obermayer. “Going in with that mindset, I anticipate it being very contentious … and just given the history, there probably will be a strike.”

Aggressive efforts by the union are great for organized labor and the embattled UAW, which is attempting to regain its footing after a yearslong federal corruption probe landed several top leaders in prison for bribery, embezzlement and other crimes — but not for the companies or their shareholders.

Here are the numbers investors should know ahead of the expiration date for current contracts between the Detroit automakers and UAW at 11:59 p.m. ET on Sept. 14.

$80 billion

Contract proposals made by the UAW at this point would add more than $80 billion in labor costs for each of the biggest U.S. automakers over the length of the contract, Bloomberg News first reported earlier this month.

“One might think of these UAW contracts as a set of three large purchase orders to secure the labor needed to assemble future vehicles, parts, and components—contracts that are collectively worth roughly $70–$80 billion over the course of the next four years,” Kristin Dziczek, automotive policy advisor for the Federal Reserve Bank of Chicago’s Detroit branch, wrote in a Wednesday blog post.

United Auto Workers President Shawn Fain greets workers at the Stellantis Sterling Heights Assembly Plant, to mark the beginning of contract negotiations in Sterling Heights, Michigan, U.S. July 12, 2023. 

Rebecca Cook | Reuters

The demands include a 46% wage increase, restoration of traditional pensions, cost-of-living increases, reducing the work week to 32 hours from 40 and increasing retiree benefits.

If the UAW gets those demands, without any changes to other benefits, the all-in hourly labor cost for the automakers would more than double from at least $64 per hour to more than $150 per hour, according to media reports.

That would be a significant increase over wage hikes seen during the previous four-year agreements, according to estimates from the Center for Automotive Research. The 2019 deals were projected to increase average hourly labor costs over the length of the contracts by $11 per worker for then-Fiat Chrysler, now Stellantis, and $8 per worker at GM and Ford.

Under the current pay structure, UAW members start at about $18 an hour and have a “grow-in” period of four years to reach a top wage of more than $30 an hour.

$5 billion

A work stoppage by nearly 150,000 UAW workers at GM, Ford and Stellantis would result in an economic loss of more than $5 billion after 10 days, according to Anderson Economic Group, a Michigan-based consulting firm that closely tracks such events.

AEG estimates the total economic loss by calculating potential losses to UAW workers, the manufacturers and to the auto industry more broadly if the sides cannot reach tentative agreements before the current contracts expire.

In another analysis, Deutsche Bank previously estimated that a strike would hit earnings at each affected automaker by about $400 million to $500 million per week of production.

Strikes could take several forms: a national strike, where all workers under the contract cease working, or targeted work stoppages at certain plants over local contract issues. A strike against all three automakers, as Fain has alluded to, would be the most impactful but also the riskiest and most costly for the union.

$825 million

The UAW has more than $825 million in its strike fund, which it uses to pay eligible members who are on strike. The strike pay is $500 per week for each member – up from $275 in 2022.

Speaking in front of a backdrop of American-made vehicles and a UAW sign, President Joe Biden, then a presidential candidate, speaks about new proposals to protect U.S. jobs during a campaign stop in Warren, Michigan, Sept. 9, 2020.

Leah Millis | Reuters

Strike pay is available after the eighth day of a work stoppage. A bonus check is paid the week prior to the Thanksgiving and Christmas holidays. Members also must be in good standing with the union and participate in picket lines to receive the assistance.

UAW members can also seek outside employment from the union, however if their pay is $500 or more per week, then they will no longer receive strike pay. They will continue to receive medical and prescription drug assistance, according to the union’s website.

Assuming 150,000 or so eligible workers, that’s all-in weekly strike pay of about $75 million. A fund of $825 million, then, would cover about 11 weeks. One caveat: That doesn’t include health care costs that the union would cover, such as temporary COBRA plans. 

The UAW is scheduled to hold a procedural strike authorization vote next week, which would grant union leaders the ability to strike, if warranted. The measure historically passes overwhelmingly.

1.5 million

If the union decides to strike against all three Detroit automakers, production losses would quickly add up.

S&P Global Mobility estimates a 10-week strike would mean lost production of roughly 1.5 million units, according to an investor note from Mizuho Securities USA.

A 40-day strike against GM during the last round of negotiations in 2019 led to a production loss of 300,000 vehicles, the company said then. It also cost the automaker $3.6 billion in earnings, GM said.

Industry experts argue that a strike against all or any of the automakers would likely impact the operations and bottom lines of the companies more quickly than four years ago since the U.S. auto industry is still recovering from supply chain problems caused during the coronavirus pandemic.

Vehicle inventory levels for the automakers also are lower than they were heading into the talks four years ago.

Heading into 2019 contract negotiations, U.S. vehicle supply was 3.73 million — essentially enough units to last 86 days of selling under normal conditions at the time, according to Cox Automotive. The industry is currently just under 2 million units, with 56 days’ supply.

“In 2019, there was quite a slack in there. There’s almost no slack now,” AEG CEO Patrick Anderson said Thursday during a webinar with the Automotive Press Association. “If we are to get a strike, within the first week, the numbers start to get serious for each of the automakers.”

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Phishing scams targeting small business on social media including Meta are a ‘gold mine’ for criminals

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With so much of daily life happening over social media, it’s not surprising that small businesses are relying more and more on Instagram, Facebook and other platforms to spread the word about their business and sell products.

But there is one big catch: small business owners are at a big disadvantage on these platforms when it comes to cybersecurity. 

Take it from Pat Bennett, an entrepreneur who sold granola in the Cleveland area and got about half of her sales through Instagram. The business was already under pressure from the rising cost and availability of sweeteners and oats when her business Instagram page, Pat’s Granola, came under attack. 

The attack looked innocuous. Bennett received a message on Instagram from a small business owner she knows personally. Using a link, her acquaintance asked Bennett to vote for her in a contest. It was a legitimate contest, and it wasn’t unusual for Bennett to communicate with people on Instagram Messenger. As it turned out, it was an attack that went to everyone in her contact’s address book. Bennett lost control of her Instagram and Facebook accounts and hasn’t regained access, despite using all the channels Meta recommends. 

With help, she was able to track the IP addresses to Europe, but that wasn’t enough to avoid a worst-case scenario. Bennett received a letter saying she could regain control of her accounts if she paid close to $10,000. She declined to pay the ransom and had to start all over again. 

Pat Bennett, a Cleveland-based entrepreneur who sells granola says about half of her sales are through Instagram, but she became victim to an Instagram Messenger hack that resulted in Bennett to losing control of her Instagram and Facebook accounts, and she hasn’t regained access, despite using all the channels Meta recommends.

Source: Pat Bennett

Bennett’s experience isn’t isolated. As it turns out, small businesses like Pat’s Granola are frequent targets of hacking rings. CNBC quarterly surveys of small business owners in recent years have indicated that many do not rate the risk of cyberattack highly, yet the FBI says that in recent years a wave of hacks has targeted small business. In 2021, the FBI’s Internet Crime Complaint Center received 847,376 complaints regarding cyberattacks and malicious cyber activity with nearly $7 billion in losses, the majority of which targeted small businesses.

Small business owners say social media giants such as Meta have done little to help them address the problem. 

A Meta spokesperson declined to offer specific comment in response to small business owner concerns, but pointed to its efforts to protect businesses targeted by malware. The company has security researchers that track and take action against “threat actors” worldwide and has detected and disrupted nearly 10 new malware strains this year. Malware can target victims through email phishing, browser extensions, ads and mobile apps and various social media platforms. The links look innocuous and rely on tricking people into clicking on or downloading something. 

Why Main Street is an easy target 

With marketing and selling over Instagram and other social platforms being an attractive way for small businesses to reach and expand their customer base, it’s not surprising that criminal organizations have followed.

According to SCORE, a nonprofit partly funded by the U.S. Small Business Administration, nearly half of small business owners cited social media as their preferred digital marketing channel. Compare that to 51% who cited their company website and 33% who prefer online advertising. Moreover, 73% of business owners said they consider social media to be their most successful digital marketing channel, with 66% citing Facebook, 42% citing Alphabet’s YouTube and 41% Instagram. 

“Criminals are in the business of stealing, so you’re going to go where you can make money and get away with it. And social media accounts of small businesses are like a gold mine,” said Joseph Steinberg, a cyber security privacy and AI expert, who sees small business social media accounts as “low hanging fruit.” 

Bryan Palma, chief executive officer at Trellix, a cybersecurity company that worked with the FBI and Europol to take down Genesis Market, an “eBay” for cybercrime criminals, earlier this year, said he has been seeing a range of cybercriminals targeting platforms such as Instagram, YouTube and Facebook. Some are independent hackers, while others are larger, organized crime groups that target social media accounts with more than 50,000 followers. 

Common online scams to watch out for

One common scam, Palma said, is criminals will create a fake Instagram page notifying the user that there’s a problem with their post, and they should “click here, and we’ll help you fix it.” The link redirects users to a fake site asking them to type in their Instagram credentials. 

That’s similar to what happened to Cai Dixon, owner of Copy-Kids, which makes video content for kids. Dixon created an active online Facebook group with 300,000 followers and was getting as much as $2,000 a month in performance bonuses. In March, she got a message purporting to be from Meta, asking if she would like a blue badge verification. Because she was already in contact with Meta employees over Messenger, she believed the message and gave her private information. 

Turns out, it was a phishing scheme. Almost immediately, Dixon lost control of the account and the Facebook group she had spent years cultivating. The hackers removed Dixon and all the other page moderators and started posting animal cruelty videos, videos of heavy machinery and fake content. When she finally talked to someone on Facebook, “they said the only thing I could do was to tell all my friends to report it hacked and then they could take it down.” 

Cai Dixon, owner of Copy-Kids, which makes video content for kids, created an active online Facebook group with 300,000 followers and was getting as much as $2,000 a month in performance bonuses. But in March, a phishing scheme led Dixon to lose control of the account and the Facebook group she had spent years cultivating.

Source: Cai Dixon

These common hacks for small businesses offer little recourse.

“It’s especially damning for a small business, which has a pretty minuscule security budget compared to a General Electric or GM, which are running the best tools,” said Greg Hatcher, founder of White Knight Labs. 

Companies with 100 or fewer employees experience 350% more social engineering attacks than larger companies, according to Barracuda, a cloud security company. More than half of social engineering attacks are phishing, and one in five organizations had an account compromised in 2021. 

Social media companies are aware of the problem, but fending off attacks on small businesses is time-consuming and expensive. It’s one matter when a large Fortune 500 company that spends millions on advertising or a high-profile individual encounters a hacker. But when it comes to small business owners, there’s less financial incentive. 

“It is often better for social media companies from a purely bottom line to ignore small businesses when they have problems,” Steinberg said, adding that small businesses are generally getting the service for free or close to free. 

Two-factor authentication and cybersecurity tools

Though the threat seems vast, cybersecurity experts said the most effective defense is fairly basic. Not enough people use the security features that social platforms already offer, like two-factor authentication. Entrepreneurs can also use business password managers, designed for multiple users who may need access to the same accounts. 

“Small businesses don’t have to be completely hung out to dry. They can have good cyber hygiene, with a good password policy,” said Hatcher, emphasizing length, ideally 30-40 characters, over complexity as well as two-factor authentication. 

Knowing what to look for and being wary of any links or requests for information can also go a long way. For the unfortunate who get hacked and lose access to accounts, the Identity Theft Resource Center is a nonprofit that can help victims figure out the next steps.   

For now, the online world is still under-regulated and monitored.

Cyberattacks conducted through tech giants have caught the attention of the federal government’s main cyber agency, the Cybersecurity and Infrastructure Security Agency. In an interview with CNBC’s “Tech Check” in January of this year, CISA director Jen Easterly said, “Technology companies who for decades have been creating products and software that are fundamentally insecure need to start creating products that are secure by design and secure by default with safety features baked in,” she said. But the U.S. government has so far taken a cautious approach with support for small business specifically – a spokeswoman for the U.S. Cybersecurity Infrastructure Agency told CNBC in January that it doesn’t regulate small business software, instead pointing to a blog post with guidance aimed at helping businesses large enough to have a security program manager and an IT lead.

“There are a lot of people spending the majority of their time in the virtual world, but the resources are not as extensive. We still have more resources protecting streets,” Palma said. Some of the big online scams get addressed, but there are many “smaller issues” that are costing people and small businesses real money, but governments and companies aren’t equipped to deal with it. “I think over time, we have to shift that balance,” he said. 

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