Kellogg Workers Ratify Revised Contract After Monthslong Strike
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About 1,400 striking Kellogg workers have ratified a new contract, their union said Tuesday, ending a strike that began in early October and affected four of the company’s U.S. cereal plants.
“Our striking members at Kellogg’s ready-to-eat cereal production facilities courageously stood their ground and sacrificed so much in order to achieve a fair contract,” Anthony Shelton, the president of the workers’ union, the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union, said in a statement. “This agreement makes gains and does not include any concessions.”
Steve Cahillane, the company’s chairman and chief executive, said in a statement that he was pleased that the workers approved the deal. “We look forward to their return and continuing to produce our beloved cereal brands for our customers and consumers,” he added.
The strike had become especially contentious after workers rejected an agreement on a five-year contract between their union and the company in early December, and the company announced that it would move ahead with hiring permanent replacement workers.
President Biden waded into the dispute a few days later, saying in a statement that the plan to replace workers was “deeply troubling” and calling it “an existential attack on the union and its members’ jobs and livelihoods.”
The company and the union announced the second tentative agreement the following week, just before Senator Bernie Sanders, an independent from Vermont, was scheduled to hold a rally on behalf of workers in Battle Creek, Mich., home of the company’s headquarters and one of the cereal plants where workers had walked off the job.
The contract dispute revolved partly around the company’s two-tier compensation system, in which workers hired after 2015 typically received lower wages and less generous benefits than veteran workers. The company has said that the longer-tenured workers make more than $35 an hour on average, while the more recent workers average just under $22 per hour.
Veteran workers had complained that the two-tier system put downward pressure on their wages and benefits because they could effectively be outvoted or replaced with newer, cheaper workers.
Under the agreement that workers rejected in early December, the company would have immediately granted veteran pay and benefit status to all workers with four or more years’ experience at Kellogg. It would have also granted veteran status to a number equal to 3 percent of a plant’s head count in each year of the contract.
The initial agreement would have given veteran workers a 3 percent wage increase in the first year and cost-of-living adjustments.
In the agreement that workers just approved, the proposal for converting newer workers to veteran status remained unchanged, but the company expanded cost-of-living wage adjustments to cover all employees in each year of the contract, according to a Kellogg spokeswoman.
Newer workers will see their wages immediately rise to just over $24 an hour and veteran workers will immediately receive a wage increase of $1.10 per hour.
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The British government has responded to pleas for help from bars, restaurants and leisure businesses amid a surge in Omicron cases that has led to a wave of cancellations, staff shortages and closures.
The Treasury said on Tuesday it would provide a package of grants and other relief amounting to 1 billion pounds ($1.3 billion).
“We recognize that the spread of the Omicron variant means businesses in the hospitality and leisure sectors are facing huge uncertainty at a crucial time,” Rishi Sunak, the chancellor of the Exchequer, said in a statement. The festive period is critical for the hospitality industry and often described as the “golden quarter,” when a substantial portion of profits are made between Halloween and New Year’s Eve.
About 200,000 hospitality and leisure businesses will be eligible for a grant of up to £6,000 per site. The government will also cover the cost of legally required sick pay for small and midsize businesses and is topping up a culture fund for organizations including theaters, orchestras and museums with an additional £30 million.
The Treasury had been pulling back on pandemic-related support measures, with some of the largest programs, including the furlough program, ending in September. The announcement on Tuesday was the first major provision of pandemic-specific support since March. The government’s most recent fiscal plans attempted to divert the country toward a post-pandemic economy, with spending focused on education, the National Health Service and job skills.
But late last week London declared a “major incident” because of the spread of Omicron. Across the capital, bookshops, gyms, pubs and restaurants have voluntarily closed their doors, either as a precaution against the virus or because too many staff members are sick to operate. Last weekend, half of London’s West End theaters had to cancel performances.
The government said it was providing “generous grants” that are equivalent to the monthly amount made available earlier in the year when the businesses were legally forced to close.
On Monday, there were more than 45,000 confirmed Omicron cases in Britain, but the true number is believed to be much higher. In the past week, there has been a 60 percent increase in the overall number of Covid cases. People are required to isolate for 10 days, which has left businesses and hospitals short of staff.
The government hasn’t required hospitality businesses to shut, but new measures in England, such as asking people to work from home and requiring Covid passes for large events, have led to Christmas party cancellations and fewer people socializing outside their homes. Last week, England’s chief medical officer encouraged people to go only to events that “really matter” to them.
The grants have been broadly welcomed by the hospitality industry. Kate Nicholls, chief executive of UKHospitality, a trade group, said it was a “generous package.” It provides “an immediate emergency cash injection for those businesses who, through no fault of their own, have seen their most valuable trading period annihilated,” she added in a statement.
But with government ministers in tense talks about whether more restrictions will be needed over Christmas, there are already concerns that the grants might not be enough.
“Whilst these measures are a positive starting point, if restrictions persist or are tightened further, then we would need to see a wider support package,” Shevaun Haviland, the director general of the British Chambers of Commerce, said in a statement.
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“You could feel Christmas was coming,” Amanda Whiteside, a manager at Gordon’s Wine Bar in London, said of the crowds and buzz. “And then it was gone.”
Throughout Britain, new government restrictions combined with heightened anxiety over the highly contagious Omicron variant have drastically reduced business at restaurants, pubs, event venues and retail stores, prompting urgent calls for additional government assistance.
On Tuesday, the government responded, announcing £1 billion, about $1.3 billion, in aid for the hospitality industry, with one-time grants of £6,000 and rebates for employees’ sick pay.
The grants, said Rishi Sunak, the chancellor of the Exchequer, are comparable to what was “provided to hospitality businesses when they were completely closed.” He said this latest initiative was in addition to assistance already in place.
The promise of more aid comes as a fresh wave of anxiety over the coronavirus and the economy washes over the region. Britain recorded the highest number of Covid-19 cases in Europe over the last seven days, according to the World Health Organization.
On Monday, organizations representing more than 100,000 businesses around the country sent an open letter to Prime Minister Boris Johnson, demanding more tax relief and grants to tide them over.
Although the surge of coronavirus cases brought on by the fast-moving Omicron variant has not yet resulted in the kind of strict lockdown imposed by the Dutch government over the weekend, British businesses argued that the combination of mask mandates, vaccination requirements and uncertainty during the peak holiday season imperils their survival.
The retail, hospitality and leisure sectors “are teetering on the brink,” said Matthew Sims, who helped orchestrate the campaign and leads a business improvement group in Croydon, south of London.
Restaurants, pubs and bars have said that since the government added a new series of restrictions, known as Plan B, on Dec. 8 as a response to the highly transmissible Omicron variant, dinner and party cancellations have been rolling in and foot traffic has disappeared in some areas. Hospitality U.K. has reported that many businesses have lost 40 to 60 percent of their business this month.
At Gordon’s Wine Bar in central London, it was common to find every table in its cavelike cellar and on its outdoor patio full and a long line of customers waiting to get in before Plan B was put in place.
The drop-off, Ms. Whiteside, the administrative manager, said, “was very dramatic.”
Customers thinned out and several staff members got Covid, she said. Gordon’s, which calls itself the oldest wine bar in London, is now offering only outside service, and Ms. Whiteside estimates that sales are down about 25 percent.
Half a mile away in Soho, the Coach and Horses pub was similarly contending with fewer customers and sick staff. Last week, business was off by a third, while on Monday, it fell “off the edge of a cliff,” said Alison Ross, the manager.
Three of the four full-time staff members and two of the four part-timers had contracted Covid. Ms. Ross has hired temporary help and plans to close several hours early on a few days.
The hospitality industry, which lost out on the holiday bump in sales last year, was reviving but had still not bounced back to prepandemic levels. Many had been counting on a busy season.
Simon Emeny, the chief executive of Fuller, Smith & Turner, which owns roughly 400 pubs, had called on the Johnson government for more aid.
“We are right back to where we were in March 2020 with the government keeping hospitality open, while effectively telling the public not to socialize,” Mr. Emeny said in statement. “December should be our busiest trading period — and the revenue generated during this time is crucial for the sector.”
The company has temporarily closed 20 pubs, a spokeswoman said. Mr. Sunak, the chancellor, said that in addition to the grants supporting 200,000 businesses, local governments would also be given £100 million to distribute, while a fund for cultural organizations and venues would be allocated £30 million.
The announcement was met with applause from those receiving the aid and complaints from other sectors that were not included.
“Travel agents, tour operators and travel management companies will rightly be asking why they haven’t been given the same treatment as other businesses that are suffering at this time,” said ABTA, a trade association of travel agencies and tour operators.
U.S. stocks are rebounding this morning, after falling for three trading days in a row. The broad S&P 500 index remains up nearly 23 percent for the year, but the market’s recent volatility concerns many investors.
Plenty of uncertainty remains, including from the highly transmissible Omicron variant of the coronavirus, the still-cloudy outlook for President Biden’s social spending plan and, from the Federal Reserve’s indication, the possibility of multiple interest increases next year. The big question is whether these factors could finally take down the pandemic bull market.
Let’s explore the different arguments:
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Yes. Investors’ expectations for high growth next year look increasingly misguided in light of Omicron and lower government spending. Analysts expect the S&P 500’s profits to jump nearly 9 percent, or more than twice as fast as the broader economy. That can happen, but only if costs are falling, which, given the current rate of inflation, is not likely next year. When companies start to lower earnings targets, or miss them, the markets will surely follow.
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No. Stock market collapses are extremely rare without recessions, and there’s no sign that one is in store for 2022. Some recent job growth data has been disappointing, but an increasing number of Americans are still finding new positions. And consumer spending continues to beat expectations.
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Maybe? Stocks may not fall drastically, but they may not continue to surge either. This viewpoint has supporters: Savita Subramanian, Bank of America’s head of U.S. equity strategy, predicts that the S&P 500 will rise less than 1 percent next year, and said the market’s biggest problem was “lofty expectations.”
By The New York Times
Markets rose on Tuesday, rebounding somewhat after three days of losses and continuing a volatile stretch of trading that started after the news of the Omicron variant of the coronavirus was announced over the Thanksgiving break.
The S&P 500 was up 1.1 percent in midday trading, after having fallen 3 percent since Friday.
The quick-spreading Omicron variant has injected new uncertainty into markets that were already wary of high inflation and whether central banks might quickly pull back on support for the economy to stem those price gains. Since the news of the variant, the S&P 500 has fallen 3 percent, recovered those losses to notch a record high, and fallen 3 percent again.
The rally on Tuesday began in Asia, with the Nikkei 225 index in Japan gaining 2.1 percent and the Hang Seng Index in Hong Kong gaining 1 percent. In Europe, the benchmark Stoxx Europe 600 was up 1.4 percent.
“Nothing has changed in the world, but the pull of buy-the-dip is stronger,” Jeffrey Halley, a senior market analyst for Asia at Oanda, an online currency trading site, wrote in a note.
Energy companies led the S&P 500’s gains, rising more than 2 percent in midday trading. Oil prices rose, with West Texas Intermediate, the U.S. benchmark crude, climbing more than 3 percent after two days of drops.
Travel and entertainment companies, which have been highly volatile amid uncertainty of whether there will be renewed pandemic restrictions, were some of the best performers in the S&P 500 in early trading on Tuesday. Carnival Corporation, the cruise line, was up about 9 percent, and Norwegian Cruise Line was up more than 7 percent. United Airlines and Delta Air Lines were up more than 6 percent. And the casino companies Las Vegas Sands and Caesars Entertainment were up about 7 percent.
Yields on longer-term bonds rose, with the yield on the 10-year Treasury note up about 7 basis points, or 0.07 percentage points.
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The fledgling electric truck manufacturer Nikola agreed to pay $125 million to settle an investigation into allegations that the company and its founder had defrauded investors by making misleading claims about its products and technology, securities regulators said on Tuesday.
Nikola is settling the case, with the Securities and Exchange Commission, nearly five months after federal prosecutors filed criminal charges against Trevor Milton, the company’s founder and former chief executive, who has pleaded not guilty. The S.E.C. also filed civil fraud charges against Mr. Milton.
“Nikola Corporation is responsible both for Milton’s allegedly misleading statements and for other alleged deceptions, all of which falsely portrayed the true state of the company’s business and technology,” Gurbir Grewal, director of the S.E.C.’s enforcement division, said in a statement.
The S.E.C., in a civil order resolving the investigation, found that Mr. Milton embarked on a campaign on Twitter and in news releases to pump up the price of Nikola’s shares with a series of misleading statements. The regulator said Nikola compounded that by making its own misleading statements about the refueling times for its planned products.
The company, which neither admitted nor denied the allegations in the civil order, said in a statement: “We are pleased to bring this chapter to a close as the company has now resolved all government investigations.”
The S.E.C. said Nikola was continuing to cooperate with its open investigation, a reference to the case against Mr. Milton.
Last month, the company said it expected to reach a $125 million settlement with the S.E.C. and would “seek reimbursement” from Mr. Milton for any costs associated with the investigation.
Nikola is the latest company that merged with a cash-rich special purpose acquisition company to either be charged with making false statements to investors or being investigated for potential wrongdoing.
SPACs are speculative businesses that raise money from investors in initial public offerings and then go searching for operating companies to buy. The market for these investment vehicles has been red-hot in the past two years — they have raised nearly $200 billion from hedge funds and other investors.
The S.E.C. has opened a number of investigations into claims made by some of these companies during the merger process. Regulators have argued that hedge fund investors in SPACs and the sponsors of these deals fare far better than retail investors who often buy shares in the open market after a deal is announced.
Mr. Milton resigned from Nikola in September 2020, several months after the merger with a SPAC called VectoIQ was completed. The S.E.C., in the civil complaint filed last summer against Mr. Milton, said his misleading statements about the company’s prospects helped inflate the stock, enabling him to reap “tens of millions of dollars in personal benefits.”
Last week, lawyers for Mr. Milton filed a motion in federal court in Manhattan to dismiss several of the criminal charges against him.
Nikola’s stock closed on Monday at $9.25, down from a high of more than $60 in the summer of 2020.
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Jurors are deliberating for a second day on Tuesday in the fraud trial of Elizabeth Holmes, the founder of the blood testing start-up Theranos.
Ms. Holmes, who has pleaded not guilty, faces 11 counts of wire fraud and conspiracy to commit wire fraud. Closing arguments in the case concluded last week. On Monday, jurors began deliberating at around 8:30 a.m. They left the courthouse around 4 p.m.
On Tuesday, the jury of eight men and four women again began deliberating around 8:30 a.m. If they do not reach a verdict on Tuesday, additional time is scheduled for Thursday. Further days will be scheduled if needed.
The deliberations are the final stage of the nearly four-month trial, which has drawn long lines of spectators eager to watch a high-profile Silicon Valley entrepreneur defend herself in a case viewed as a referendum on start-up culture.
Before her company faltered, Ms. Holmes, 37, exemplified the genius founder. She founded Theranos in 2003, dropped out of Stanford University the next year to focus on the company and raised $945 million from investors. At its peak, Theranos was valued at $9 billion.
Ms. Holmes also sold her entrepreneurial vision and styled herself as a Steve Jobs-like founder, down to wearing a uniform of black turtlenecks. She became a billionaire on paper, graced the covers of many magazines and was widely celebrated.
But a 2015 Wall Street Journal investigation found that Theranos had inflated many of its claims about its technology and business relationships. The company officially shut down in 2018.
A verdict in the case boils down to intent. Prosecutors argued that Ms. Holmes purposely deceived investors and patients as she sought investments and business for her start-up. The defense sought to paint her as a well-meaning entrepreneur whose failure was not a crime.
Testimony from Ms. Holmes anchored the defense’s case. She blamed senior lab employees for her company’s problems, argued that her own actions were misunderstood and said she believed the claims she had made about Theranos’s technology. She also said Ramesh Balwani, her ex-boyfriend and Theranos’s former chief operating officer, had emotionally and physically abused her, accusations he has denied.
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“Jagged Little Pill,” a rock musical fueled by the songs of Alanis Morissette, will close on Broadway, becoming the first big show felled, in part, by the resurgent pandemic. The show, which opened in late 2019, was nominated for 15 Tony Awards, and won two, for best book, by Diablo Cody, and best featured actress, Lauren Patten.
After going dark during the pandemic, it restarted in October, but sales were soft. Then came Omicron, which prompted a raft of cancellations on Broadway. “The drastic turn of events this week with the rapid spread of the Omicron variant has, once again, changed everything,” the producers said in a statement.
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At least 132 employees at SpaceX’s Southern California headquarters have tested positive for the coronavirus in recent months, according to information on outbreaks of the virus posted on a Los Angeles County website. It is the highest number of cases currently reported among private companies in the county.
The cases were reported as a wave of infections spread through the country, driven mainly by the Omicron virus variant, and as the private space company founded and led by Elon Musk is conducting a rapid series of rocket launches at sites in California and Florida. However, SpaceX clarified that it does not currently have 132 infected employees on site.
Source: https://www.nytimes.com/live/2021/12/21/business/news-business-stock-market
