Boeing: We are ready to get back to the table and agree a dealBoeing has declared that it is ready to return to negotiations with its worker to agree a pay deal.
In a statement issued after staff voted to strike, the company says:
The message was clear that the tentative agreement we reached with IAM leadership was not acceptable to the members.
We remain committed to resetting our relationship with our employees and the union and we are ready to get back to the table to reach a new agreement.
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Julia Kollewe
PwC has said it was “disappointed by PwC Zhong Tian’s audit work of Hengda Real Estate, Evergrande’s mainland division, following this morning’s fine and ban in China (see earlier post).
This work “fell unacceptably below the standards we expect of member firms of the PwC network,” the company says.
It added that it sacked six partners; a further five staff who were directly involved in the Hengda audit work either left or were fired.
Mohamed Kande, global chair of PwC, said:
“The work performed by PwC Zhong Tian’s Hengda audit team fell well below our high expectations and was completely unacceptable. It is not representative of what we stand for as a network and there is no room for this at PwC.”
Here’s the full story:
Russia raises interest rates from 18% to 19%Ovee in Moscow, Russia’s central bank has raised interest rates to 19%.
The Bank of Russia voted to increase its bench mark rate by one percentage point, due to concerns over high inflationary pressures.
The Bank says:
By the end of 2024, annual inflation is likely to exceed the July forecast range of 6.5–7.0%. Growth in domestic demand is still significantly outstripping the capabilities to expand the supply of goods and services.
It hopes that tightening monetary policy will reduce inflation expectations and help bring inflation down to its 4% target in 2024.
It also hints that further tightening may be needed, saying:
The Bank of Russia holds open the prospect of increasing the key rate at its upcoming meeting. According to the Bank of Russia’s forecast, given the monetary policy stance, annual inflation will decline to 4.0–4.5% in 2025 and stay close to 4% further on.
Boeing employee Ritz Amador, 40, who works as a customer coordinator, wearing a “Make Boeing Great Again” cap while picketing outside the company’s factory in Renton, Washington, today. Photograph: Lindsey Wasson/APMarcus Amador, 44, who works as a quality inspector for Boeing, tending to a covered burn barrel to help keep striking union members warm. Photograph: Lindsey Wasson/APJefferies analyst Chloe Lemarie has warned that production levels of Boeing’s 737 MAX jet could be hit if the strike runs for a long time.
In a research note, Lemarie says:
“The key question now is on the duration of the strike given the gap between the proposed wage increase and union members request.”
The deal rejected by Boeing employees yesterday was worth 25% over four years, and included a $3,000 signing on bonus – and a pledge to build the company’s next commercial jet in Seattle.
The company union had initially demand for pay raises of 40% over three years.
UK public’s inflation expectations fall to 3-year lowAlmost half the UK public believe interest rates are too high, a new survey shows.
The Bank of England’s latest quarterly survey of public attitudes to inflation, released this morning, shows that 42% of respondents thought that interest rates should ‘go down’. That matches the reading back in May.
Just 9% of respondents think rates should ‘go up’, down from 10% in May, while 28% thought interest rates should ‘stay where they are’ (up from 24%).
The Bank’s next interest rate meeting is next week; the financial markets indicate there’s a 77% chance that rate are left on hold.
Today’s survey also found that people expect inflation to average 2.7% over the next year, down from the 2.8% expected in May [inflation was 2.2% in July]. That’s the lowest since August 2021.
Boeing workers wave at a car honking in support while they picket after union members voted overwhelmingly to reject a contract offer and go on strike in Renton, Washington, today. Photograph: Lindsey Wasson/APBoeing workers have begun picketing outside the company’s factory in Washington, as the strike begins.
Associated Press reports:
Outside the Renton factory, people stood with signs reading, “Historic contract my ass” and “Have you seen the damn housing prices?” Car horns honked and a boom box played songs such as Twisted Sister’s “We’re Not Gonna Take It” and Taylor Swift’s “Look What You Made Me Do.”
A Boeing worker wears a mask with a digital “strike” sign in Renton. Photograph: Lindsey Wasson/APLiam Byrne re-elected as Business & Trade Committee chairBack in the UK, Liam Byrne MP has been re-elected as chair of parliament’s Business and Trade Committee.
Byrne also let the committee, which scrutinises the policy, spending and administration of the Department for Business and Trade and its public bodies, in the last parliament.
He says it’s a huge honour to be re-elected, adding:
MPs welcomed the hard-hitting style we pioneered in the last parliament, but, above all, the whole House wants to rebuild an opportunity economy in Britain.
“People know that the Business and Trade Committee is the key space in parliament where we can hold ministers to account and, crucially, find that overlapping consensus about the big steps our great nation needs to take to deliver the fastest growth in the G7, rebuild trade alliances with our allies and ensure that wealth is fairly shared. I can’t wait to get started.”
Byrne was pushed quite close in the voting by his fellow Labour MP, Matt Western, who also ran for the job.
Three hundred and two MPs voted for Byrne, while Western, the Labour MP for Warwick and Leamington, received 251 votes.
PwC fined and banned for six months in China over Evergrande auditBeijing’s finance ministry has imposed a six-month business suspension on PwC’s auditing unit in mainland China over the auditing of Evergrande.
PwC has also been hit with financial penalties totalling around £47m.
Reuters has the details:
The ministry also imposed a fine of 116 million yuan (£12m) on PwC Zhong Tian LLP, the registered accounting entity and the main onshore arm of PwC in China, according to a statement on the MOF website.
China’s securities regulator said in a separate statement that it confiscated the unit’s revenue involved in the Evergrande case totalling 27.7 million yuan (£3m) and fined the unit 297 million yuan (£32m).
Such a ban had been expected:
PwC has been in hot water in China since Beijing’s securities regulator said that Evergrande had inflated its revenues by almost $80bn (£61.6bn) in 2019 and 2020, before its collapse in January.
Boeing shares fall 4% in premarketShares in Boeing are on track to fall when Wall Street opens later today.
Premarket trading has just begun, and Boeing’s shares have fallen by over 4% as investors react to the strike which has hit its operations today.
Photograph: MarketwatchVodafone and Three’s CEOs disagree with CMA’s findingsThe bosses of Vodafone and Three have just declared that they disagree with the Competition and Markets Authority’s provisional findings against their merger (see earlier post).
Margherita Della Valle has told reporters that the merger would be a “catalyst for change”, that would lead to more competition and unlock £11bn of investment.
Della Valle also points out that CMA’s decision isn’t final; Vodafone is looking forward to working with the regulator to get final approval, she says.
Della Valle argues that combining Vodafone and Three would “take the handbrake off” the UK’s connectivity, and build “the world-class infrastructure” the country deserves.
She disagrees with the CMA’s argument that the deal could lead to higher prices, insisting that there are no plans to change pricing strategies.
Della Valle pledges:
We not see the possibiltiy of pricing increasing going forward.
Robert Finnegan, the CEO of Three UK, tells the media that the deal would bring “best in class 5G” to the UK.
Both CEOs also reject the CMA’s argument that the deal could hurt wholesale telecoms customers (who buy network capacity from operators). They argue that a combined Vodafone-Three would be a stronger competitor with other wholesale providers.
The Boeing strike began just after midnight on the west cost of the US, Dow Jones Newswires reports, saying:
Boeing’s biggest labor union went on strike, halting production of its best-selling jets and dealing the latest blow to the struggling aerospace giant.
Thousands of machinists that build Boeing’s 737, 777 and 767 jets walked off the job shortly after midnight Pacific time Friday, after rejecting a labor deal struck between the union’s leaders and Boeing’s executives. The contract offered 25% wage increases over four years.
It’s not immediately clear how long the Boeing strike will last for, or how soon talks might resume.
Jon Holden, who headed the negotiations for Boeing’s largest union, told reporters in the US:
“We’re going to get back to the table as quickly as we can.
“This is something that we take one day at a time, one week at a time.”
Photos Boeing’s strike voteHere are some photos of Boeing workers voting on their pay deal yesterday:
Boeing factory workers waiting in line to vote on their first full contract in 16 years, at an International Association of Machinists and Aerospace Workers District 751 union hall, in Renton, Washington, US. Photograph: David Ryder/ReutersA Boeing factory worker arriving to vote Photograph: David Ryder/ReutersA worker holding a sign opposing the proposed contract. Photograph: David Ryder/ReutersBoeing factory workers waiting to vote Photograph: David Ryder/ReutersInternational Aerospace Machinists members counting votes. Photograph: Stephen Brashear/APBoeing: We are ready to get back to the table and agree a dealBoeing has declared that it is ready to return to negotiations with its worker to agree a pay deal.
In a statement issued after staff voted to strike, the company says:
The message was clear that the tentative agreement we reached with IAM leadership was not acceptable to the members.
We remain committed to resetting our relationship with our employees and the union and we are ready to get back to the table to reach a new agreement.
CMA concerned about Vodafone-Three dealNewsflash: Britain’s competition regulator has raised concerns over the proposed merger of two mobile phone companies.
The Competition and Markets Authority (CMA) has warned this morning that Vodafone’s $19bn merger with Three UK could hurt customers.
The deal could lead to “tens of millions of mobile customers having to pay more” for their services, the CMA says, as it sets out its provisional view on the merger.
On the other hand, it also flags that the merger could improve the quality of mobile networks.
The competition watchdog says:
The CMA has particular concerns that higher bills or reduced services would negatively affect those customers least able to afford mobile services as well as those who might have to pay more for improvements in network quality they do not value.
As a result, the CMA has provisionally concluded that the merger would lead to a substantial lessening of competition in the UK – in both retail and wholesale mobile markets.
That’s potentially a blow to Vodafone and Three’s hopes. But, this isn’t a final decision – the CMA is going to consult, and see what commitments could be made to adress its concerns.
But, it retains the option to prohibit the merger if it’s not satisfied.
Stuart McIntosh, chair of the inquiry group leading the investigation, says
We’ve taken a thorough, considered approach to investigating this merger, weighing up the investment the companies say they will make in enhancing network quality and boosting 5G connectivity against the significant costs to customers and rival virtual networks.
We will now consider how Vodafone and Three might address our concerns about the likely impact of the merger on retail and wholesale customers while securing the potential longer-term benefits of the merger, including by guaranteeing future network investments.
The Unite union has urged the CMA to block the deal, fearing it would lead to job losses and higher prices.
Boeing factory workers vote to strike, threatening aircraft deliveriesBoeing is facing possible delays to the production of some planes after machinists at the troubled aircraft manufacturer voted to go on strike.
Tens of thousands of workers at Boeing have voted to reject a new contract, which would have raised their pay by 25% over four years, and to go on strike instead – the first walkout in 16 years.
The move puts pressure on the aircraft manufacturer to offer more generous terms, and is a fresh blow to Boeing as it tries to raise quality following problems with its manufacturing processes.
The International Association of Machinists and Aerospace Workers said 94.6% of voting workers rejected a new contract and 96% approved the strike — easily surpassing a two-thirds requirement. IAM District 751 represents over 30,000 Boeing workers in Washington state
The strike was set to begin today in the US.
Boeing CEO Kelly Ortberg had pleaded with workers not to go on strike, warning it would put the company’s “recovery in jeopardy”.
S&P Global Ratings has flagged that an extended worker strike could delay the planemaker’s recovery and hurt its overall credit rating.
Ben Tsocanos, aerospace director at S&P Global Ratings, believes the strike could undermine Boeing’s ability to reach its target of increasing MAX jet production to 38 planes a month by the end of the year.
Tsocanos added:
“A shorter strike (along the lines of the situation at Spirit Aero last summer where union leadership accepted the company’s offer and membership rejected it) would probably be manageable for the company and the rating.”
Introduction: Gold price rises to new record highGood morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
Optimism that the US central bank will finally start cutting interest rates next week has helped to push the gold price to a new alltime high.
Spot gold has hit a record high of $2,570.03 per ounce this morning, adding to strong gains on Thursday. Bullion has gained about 3% so far this week, and 25% so far this year.
The gold price was pushed up by a weakening US dollar, which is close to its lowest level of 2024.
The dollar slipped as investors ponder how aggressively the US Federal Reserve will cut borrowing costs. A cut – the first in the current cycle – next week is widely expected, but traders are split between anticipating a small, quarter-point cut or a larger half-point reduction to the Federal funds rate.
Kyle Rodda, senior financial market analyst at capital.com, explains:
The weaker Dollar provided room for gold to finally break-out to new record highs. Although yields have lifted as the markets price-out a 50 point move from the US Federal Reserve, the drop in the Greenback was enough to spark a break-out for the yellow metal from its recent range.
The outlook and price-action remains bullish for gold, even if sentiment might be erring on the excessively bullish side.
The agenda 8.30am: Eurozone finance ministers hold a Eurogroup meeting in Budapest
9.30am BST: Bank of England/Ipsos Inflation Attitudes Survey
10am BST: Eurozone industrial production data for July
3pm BST: University of Michigan’s US consumer confidence report