SONY - Wall Street Breakfast Podcast: UAW Strike Expands At Ford

2023-10-12 06:46:46 ET

Summary

• UAW calls for strike at Ford's Kentucky Truck Plant, escalating tensions between the union and the automaker.
• Microsoft receives notice from IRS for $29 billion in taxes, penalties, and interest for tax years 2004 to 2013.
• Negotiations between Hollywood studios and actors break down over SAG-AFTRA's proposal, accusing studios of "bully tactics.".

Listen below or on the go on Apple Podcasts and Spotify

UAW expands strike to major Ford ( F ) truck plant in Kentucky in shock move. (00:26) Microsoft (MS F T) receives notice from IRS for nearly $29B in back taxes , penalties. (01:38) Hollywood strike : Talks between studios, actors break down. (02:29)

This is an abridged transcript of the podcast.

The United Auto Workers union announced on Wednesday evening that 8,700 members at Ford’s (NYSE: F ) iconic and extremely profitable Kentucky Truck Plant have joined the strike against the Detroit automaker.

The UAW said it took the unexpected action after Ford ( F ) refused to make further movement with bargaining.

UAW President Shawn Fain called for the strike at the truck plant in a change of strategy that could mark a major escalation between the two sides.

The plant builds the Ford F-Series Super Duty, Ford Expedition and Lincoln Navigator. It is reported to be Ford's ( F ) largest in terms of employment and revenue.

In a statement provided to Seeking Alpha, Ford ( F ) said the decision by the UAW to call a strike at the Kentucky Truck Plant is "grossly irresponsible but unsurprising."

Ford ( F ) maintained that it made an outstanding offer that would make a meaningful positive difference in the quality of life for its 57K UAW-represented workers.

General Motors (NYSE: GM ), Ford Motor (NYSE: F ), and Stellantis N.V. (NYSE: STLA ) have laid off roughly 4,800 workers at factories that are not among the plants that have been hit by the union strikes over the last four weeks.

Microsoft (NASDAQ: MSFT ) said on Wednesday that it had received a notice from the Internal Revenue Service that it owed $28.9B in back taxes plus interest and fines for the tax years 2004 to 2013.

In an 8-K filing Microsoft ( MSFT ) said it received the notices of proposed adjustment on September 26.

"As of September 30, 2023, we believe our allowances for income tax contingencies are adequate," Microsoft said in the filing. "We disagree with the proposed adjustments and will vigorously contest the NOPAs through the IRS’s administrative appeals office and, if necessary, judicial proceedings."

Microsoft added that it does not expect a final resolution on the matter in the next 12 months. It also does not expect a "significant" increase or decrease in its tax implications over the same time frame.

Premarket Microsoft ( MSFT ) is down 0.3%.

Negotiations between Hollywood studios and actors have been suspended as the two sides failed to agree on the terms that SAG-AFTRA presented in its most recent proposal on Wednesday.

The Alliance of Motion Picture and Television Producers said in a statement that the union's offer included a viewership bonus that "would cost more than $800M per year – which would create an untenable economic burden."

SAG-AFTRA clapped back, accusing the studios of resorting to "bully tactics." "They intentionally misrepresented to the press the cost of the proposal – overstating it by 60%," it claimed .

Both sides have asserted that they are willing to return to the negotiating table.

AMPTP represents major studios including Amazon ( AMZN ), Apple ( AAPL ), Disney ( DIS ), NBCUniversal ( CMCSA ), Netflix ( NFLX ), Paramount ( PARA ), Sony ( SONY ) and Warner Bros. Discovery ( WBD ).

Other articles to look out for on Seeking Alpha:

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Tempest Therapeutics soars 4,000% on updated data (update)

China sovereign wealth fund raises stake in 'Big Four' banks

On our catalyst watch for the day,

• Dun & Bradstreet ( DNB ) will host the company’s Power of Data + Generative AI Summit. The gathering will feature some of the leading minds in data and AI, including executives from Google ( GOOG ) and IBM ( IBM ).

• iRobot ( IRBT ) will hold a shareholder vote on Amazon's ( AMZN ) planned $51.75 a share takeover.

U.S. stocks on Wednesday overcame an afternoon dip to end higher.

The Nasdaq ( COMP.IND ) gained 0.71%.

The S&P 500 ( SP500 ) settled 0.43% higher while the Dow ( DJI ) added 0.19%.

Of the 11 S&P sectors, eight ended in positive territory, led by Real Estate.

The 10-year yield ( US10Y ) was down 10 basis points to 4.56%, while the 2-year yield ( US2Y ) was flat at 4.98%.

Fed Governor Christopher Waller on Wednesday said that the central bank was in a position where it could " watch and see " what's going on with rates. Atlanta Fed President Raphael Bostic reiterated a message of 'no more rate hikes needed' at an event, following similar comments on Tuesday.

Traders also digested the minutes of the Fed's September meeting, which showed that the bulk of central bank officials favored holding rates steady.

Now let’s take a look at the markets as of 6 am. Ahead of the opening bell today, Dow, S&P and Nasdaq futures are in the green. The Dow is up 0.4%, the S&P 500 is up 0.4% and the Nasdaq is up 0.4%. Crude oil is up 1% at more than $84 a barrel.

In the world markets, the FTSE 100 is up 0.8% and the DAX is up 0.7%.

The biggest movers for the day premarket: Tupperware Brands (NYSE: TUP ) is up more than 21% after the company revealed in an SEC filing that it had entered into the fifth amendment to an existing credit agreement.

On today’s economic calendar, at 8:30am CPI. Also at 8:30am initial jobless claims.

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