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Member Briefing September 24, 2024

September 24, 2024

Posted By: Harold King in Daily Briefing,

Top Story

Eurozone Business Activity Slumps After Olympics Boost. Manufacturing Activity Tumbles

S&P Global's purchasing managers' index (PMI) -- a key gauge of the overall health of the economy -- dropped to 48.9 in September, down from 51 in August. Any reading below 50 indicated contraction. The survey showed that Germany and France, the eurozone's top two economies, were largely responsible for driving the slump in the 20-country single currency area. French private sector output returned to contraction after the shot in the arm from the Olympics, while German business activity dropped the fastest since February.

The eurozone PMI data showed the manufacturing sector was down across the board, falling for the eighteenth month in a row. "Manufacturing is getting messier by the month," Cyrus de la Rubia, chief economist at Hamburg Commercial Bank said. "Looking ahead, the sharp drop in new orders and companies' increasingly bleak outlook for future output suggest that this dry spell is far from over." The decline in business activity could add impetus to calls for the European Central Bank (ECB) to cut its key interest rate again in October.

Read more at France 24

Cutting-Tool Spending Falling in 2024

U.S. manufacturers’ demand for cutting tools fell -7.8% from June to July, or $191.8 million, while still managing to remain slightly above (1.7%) the demand total recorded for July 2023. The new figure brings the 2024 year-to-date cutting-tool consumption total to $1.46 billion, which is 2.5% higher than the January-July total for 2023. The Assn. for Manufacturing Technology, along with the U.S. Cutting Tool Institute reported the totals in their latest Cutting Tool Market Report, a monthly summary of shipments made by companies who comprise the majority of the U.S. market for cutting tools – whose customers are contract machine shops (job shops) and OEMs for whom cutting tools are significant consumable.

Because of the wide range of activities represented by cutting-tool buyers, the CTMR is considered a relevant indicator of overall manufacturing activity. "Commercial aerospace and automotive production have leveled off, and this has a direct impact on cutting tool consumption and new orders. As we near the end of the third quarter, I expect shipments of cutting tools to continue to trend as they have so far this year,” AMT Cutting Tool Product Group chairman Jack Burley said. CTMR totals have declined for three consecutive months, including the July result.

Read more at American Machinist

OECD Still Sees '100% Commitment' To Finalize Global Tax Pact

The Organization for Economic Cooperation and Development (OECD) still sees total commitment from countries seeking to wrap up a global tax pact on highly profitable multinationals, its head of tax said, after months of delays and hesitation by some big countries. Officials from nearly 130 countries and jurisdictions missed a mid-year deadline to finalize the terms of an international treaty that reallocates taxing rights across borders mainly on U.S. big digital companies, leaving its future in limbo.

The pact, the first of a two-pillar cross-border corporate tax overhaul agreed in 2021, aims to replace unilateral digital services taxes with new rules for sharing taxing rights on companies such as Alphabet's Google and Amazon.com and Apple. Washington has said that India, China and Australia remain hold-outs on U.S. demands over alternative ways to calculate transfer pricing.

Read more at Reuters

Global Headlines

Middle East

Ukraine

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Policy and Politics

Congress Races To Avert Shutdown Ahead Of Looming Deadline

The House and Senate are racing to complete the government funding process with the Sept. 30 shutdown deadline looming and lawmakers eager to head back to their districts to campaign ahead of the November elections. Congressional leaders unveiled a largely “clean” three-month stopgap over the weekend to keep the government funded at current levels through Dec. 20 and provide the Secret Service with $231 million in additional dollars after the pair of assassination attempts against former President Trump. House Republican aides said the chamber hopes to vote on the legislation by Wednesday.

The stopgap — despite its bipartisan and bicameral backing — is sure to anger hard-line House conservatives, who were pushing for a shorter continuing resolution, and Trump, who advocated for including a bill that would require proof of citizenship to vote. That opposition could spell trouble for Speaker Mike Johnson (R-La.) as he tries to advance the legislation through regular order. House Republican aides said they aim to consider the stopgap by Wednesday, after which it would head to the Senate for a vote. T

Read more at The Hill

Biden Administration Proposes Ban on Chinese, Russian Components in Connected Vehicles

The Commerce Department on Monday proposed banning Chinese and Russian components inside of connected vehicles on U.S. roads, significantly escalating the Biden administration’s effort to prevent Washington’s top adversaries from spying on Americans. As most vehicles made today connect to the internet, senior administration officials expect that all Chinese-made vehicles would fall under the prohibition. The Biden administration fears Beijing and Moscow could collect data on American infrastructure and drivers—as well as hack communications needed to keep connected vehicles operational.

The Bureau of Industry and Security, namely its Office of Information and Communications Technology and Services, will hear from more stakeholders about implementing the new restrictions. If the policy gets the green light, the bans on software would go into effect for 2027 vehicle models, with hardware prohibitions beginning during the 2030 model season. The White House sees Monday’s announcement as a national-security action, launching the latest salvo in the superpower contest with China and the continuing economic strangling of Russia’s economy following its invasion of Ukraine.

Read more at The WSJ

How The Republican Party Learned To Love Cannabis Legalization

Thanks to a $30 billion state-licensed cannabis economy spanning 38 states— 15 of which are Republican states—marijuana legalization is becoming a proxy for classic conservative issues: pro-business, states’ rights and freedom from Big Government. (Even Richard Nixon, the Republican president who started America’s war on drugs in 1971 and classified marijuana as one of the world’s most addictive substances, said that cannabis “is not particularly dangerous” in audio tapes from 1973, a recent report in the New York Times revealed.)

Jeremiah Mosteller, the cofounder of the Cannabis Freedom Alliance and the policy director at Americans for Prosperity, billionaire Charles Koch’s political advocacy group, has been lobbying Republican lawmakers on cannabis reform since 2018. He says that, after years of perpetuating the war on drugs, the GOP has finally realized that legalization is happening with or without them. Now many lawmakers have decided to get on the bandwagon in hopes of incorporating conservative policies into the new laws, such as low taxes and fewer regulations to foster competitive free markets.

Read more at Forbes

Health and Wellnes

Back to Basics: Focusing on Suicide Prevention in the Workplace

September is Suicide Prevention Month, which aims to raise awareness about mental health and encourage people affected by suicidal thoughts to get the help they need. Employers can provide workers with support and resources to lower the risk of suicide, but conversely, workplace factors can also increase suicide risk in some workers. Factors that can adversely affect mental health and directly or indirectly impact suicidal thoughts, behaviors, and death include: Low job security, low pay, and job stress, Access to lethal means of committing suicide such as medications and firearms, Long work hours or shift work, Workplace bullying.

Employers or managers can:

Provide information sessions for your staff on mental health and suicide prevention.
Ensure all staff know what resources are available for support.
Foster a work environment in which colleagues feel comfortable talking about problems that have an impact on their ability to do their job effectively.
Become familiar with relevant legislation.
Identify and reduce work-related stressors that can negatively impact mental health.
Design and implement a plan for how to sensitively manage and communicate the suicide or suicide attempt of an employee in a way that minimizes further distress.

Read more at EHS Daily Advisor

Election 2024

Industry News

HV Venture Hub To Host ‘Entrepreneurship Through Acquisition’ Event October 1st

The Hudson Valley Venture Hub is the ESD designated Innovation Hot Spot that represents Ulster, Sullivan, Orange, Putnam, Westchester, Rockland, and Dutchess counties. The Hudson Valley Venture Hub both connects businesses to existing regional organizations and services - as well as provides direct, and highly individualized incubation services to select startups and existing companies with the potential to reach larger scale commercialization of their products and services. Thier mission is to work with regional support organizations and startups to create the next generation of companies and high quality jobs.

On Tuesday October 1^st 5:30 PM at the College Terrace Restaurant The Hub will host a session on ‘Entrepreneurship Through Acquisition.’ (ETA) The session will feature Andrew Breen on ETA basics and the opportunity, a panel of local business buyers (Including SIG owner and Council member Chris Shaw) and what the learned from purchasing their businesses, and finally lenders will discuss how to make the financing possible.

Learn more and register here

Looming Port Strike Threatens to Cripple East Coast Supply Chains

With just over a week to go until D-Day, authorities are gearing up as a threatened strike by dockworkers at ports along the East Coast and Gulf Coast draws closer. The Port Authority of New York and New Jersey is "coordinating with partners across the supply chain to prepare for any impacts" from a possible work stoppage by workers represented by the International Longshoremen's Association as they negotiate with the United States Maritime Alliance (USMX), a Port Authority spokesperson told CBS MoneyWatch on Friday.

According to the union, a strike would affect ports from Maine to Texas, and cripple supply-chains worse than the immediate aftermath of the covid shutdown. A stoppage - the first since 1977 - could involve up to 45,000 workers at ports that account for roughly 60% of U.S. shipping traffic, leading to a major disruption of shipments, Oxford Economics said in a report. "Even a two-week strike could disrupt supply chains until 2025," Grace Zwemmer, associate U.S. economist with Oxford, said in the report. If goods are then forced to shift to the US West Coast ports, Rabobank speculates that Asia-US freight rates could leap to $20,000, far above the peak seen in the last supply-chain crisis. That would mean firms with low margins might opt not to import at all, creating empty shelves.

Read more at Oilprice.com

Electronic Warfare Spooks Airlines, Pilots and Air-Safety Officials

American Airlines Capt. Dan Carey knew his cockpit equipment was lying to him when an alert began blaring “pull up!” as his Boeing 777 passed over Pakistan in March—at an altitude of 32,000 feet, far above any terrain. The warning stemmed from a kind of electronic warfare that hundreds of civilian pilots encounter each day: GPS spoofing. The alert turned out to be false but illustrated how fake signals that militaries use to ward off drones and missiles are also permeating growing numbers of commercial aircraft, including U.S. airlines’ international flights.

Pilots, aviation-industry officials and regulators said spoofed Global Positioning System signals are spreading beyond active conflict zones near Ukraine and the Middle East, confusing cockpit navigation and safety systems and taxing pilots’ attention in commercial jets carrying passengers and cargo. The attacks started affecting a large number of commercial flights about a year ago, pilots and aviation experts said. The number of flights affected daily has surged from a few dozen in February to more than 1,100 in August, according to analyses from SkAI Data Services and the Zurich University of Applied Sciences.

Read more at The WSJ

General Motors To Lay Off About 1700 Employees Ahead Of Chevrolet Malibu Phase-Out And Re-Tooling For EV Production

GM will lay off 1695 employees at its Fairfax Assembly and Stamping plant in Kansas City, according to a Worker Adjustment and Retraining Notification notice dated Sept. 19. The plant currently manufactures the Cadillac XT4 and the Chevrolet Malibu. In May, GM said that the production of the Chevrolet Malibu would end in November. Production of the XT4 in Kansas will also be paused after January 2025.

The plant will then be retooled and will resume production in late 2025 with the next generation of Chevrolet Bolt EVs and the XT4, the company then said. A General Motors spokesperson told Benzinga in a statement on Monday that the temporary layoff is aimed at facilitating the installation of new tooling at the plant until production resumes in mid-2025. GM will invest about $390 million for the retooling process, they added.

Read more at Benzinga

First Airbus A321XLR Delivery Due In Second-Half October, Airline Says

The first delivery of Airbus' longest-range narrowbody jet, the A321XLR, is poised to slip into October, apparently missing the planemaker's delivery target by several weeks. A spokesperson for Spain's Iberia (ICAG.L), opens new tab said in response to a Reuters query that the delivery is planned for the second half of October. Airbus referred questions on the delivery to the airline. In July, it said it expected the A321XLR to be delivered "at the end of the summer," having previously cited the third quarter.

The delivery from Hamburg represents a milestone in a fierce competition between Airbus and Boeing (to meet demand to serve longer routes with workhorse narrowbody jets. The A321XLR was launched in 2019 with an initial target for entry to service of 2023 to help airlines open new routes without the need to fill up larger wide-body aircraft. Boeing is developing a larger version of its 737 family, the MAX 10.

Read more at Reuters

GE Partners With Microsoft to Bring New AI Tools to Its Workforce

GE Aerospace and Microsoft have partnered to bring artificial intelligence tools to some 52,000 workers at the maker of aircraft engines. It’s an early example of how the latest AI technology has been transforming the workplace. GE Aerospace recently launched its “Wingmate” large language model AI system, which was built from Microsoft’s technology and partnership with OpenAI. It’s a little like a GE Aerospecific- ChatGPT.

GE Aerospace employees can use Wingmate to summarize manuals and data, search for potential solutions to quality issues, or simply save time drafting presentations or emails. Wingmate was conceptualized and developed over six weeks and deployed at the aerospace giant about three months ago. Development was fast, and so was employee adoption. So far, workers have queried the system more than half a million times while uploading over 200,000 pages of text.

Read more at Barron’s

Boeing Makes New Offer to Union in Hopes of Ending Strike

Boeing BA 1.96%increase; green up pointing triangle on Monday made a new offer to its striking machinists union in hopes of ending a walkout that is costing the cash-strapped jet maker hundreds of millions of dollars a week. The proposal comes 11 days after Boeing’s biggest union overwhelmingly voted to go on strike after rejecting a deal struck between Boeing and union leaders. Boeing, meanwhile, rolled out a series of cost-cutting moves including a hiring freeze, temporary furlough and executive pay cuts for the duration of the strike. The jet maker had been burning through roughly $1 billion a month before the strike and credit-ratings firms warned that a prolonged work stoppage would lead them to downgrade Boeing to junk status.

The latest proposal calls for a 30% pay increase over four years, up from the 25% in the previous deal. It also doubles the ratification bonus to $6,000, restores annual bonuses the company initially proposed eliminating and increases company contributions to employee 401(k) plans. Boeing said workers have until Sept. 27 to ratify the deal. The company said it would keep its commitment to build its next new airplane in the unionized Pacific Northwest. The union didn’t immediately respond to a request for comment.

Read more at The WSJ

After Several Deaths And A Massive Recall, Can Boar’s Head Save Its Brand?

Lately, food recalls have been on the rise—they are more numerous than they’ve been since before the pandemic—but the Boar’s Head recall has been a cut above, at least in terms of the attention it’s received. In August, the release of related USDA documentation served a fresh helping of unappetizing headlines about “bugs, mold, and mildew” at the Boar’s Head plant linked to the Listeria monocytogenes outbreak. A spokesperson responded at the time that the company was disinfecting that Jarratt, Virginia, plant, which had been inactive since the recall started; and retraining its workers, pledging that plant would remain closed “until it meets the highest quality and safety standards.”

But this week, Boar’s Head announced that, actually, that plant will be closed indefinitely (affecting around 500 employees, an economic blow to the town); and the company would cease selling liverwurst altogether. It was as if Boeing had responded to the grounding of the 737 Max by simply ending the product line. It’s unclear how that will actually play out—or what this will mean for the larger Boar’s Head brand. The company has been at pains to stress that its other plants and wide variety of other deli meats and various other food products are untainted by the Boar’s Head recall.

Read more at Fast Company

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