Outages galore

MARKETS

• Trade: India has placed higher tariffs on 28 U.S. products, including chickpeas and walnuts. The move comes in response to the Trump administration’s decision to withdraw India’s preferential trade status.
• Hong Kong: Leader Carrie Lam suspended the extradition bill, but the people weren’t satisfied. Per organizers, nearly 2 million demonstrators showed up over the weekend to demand her resignation.
• U.S. markets: Start and end with the Fed’s interest rate decision on Wednesday.

LABOR

UAW Takes the L

Last Friday night, workers at a Volkswagen factory in Chattanooga, TN, narrowly defeated a unionization effort spearheaded by the UAW—the United Automobile Workers. Of about 1,600 workers who voted, 833 opposed the union.

Why it’s important: While some U.S. car manufacturers, including GM and Ford, have recognized unions, no foreign automakers have unionized plants in the South. The UAW was trying to change that with its efforts at the factory.

• Volkswagen is based in Germany, and almost all of its plants outside the U.S. are unionized.

Why the UAW zeroed in on Chattanooga

With its abundance of right-to-work states, the South is a focal point for labor leaders simply because there are so few unions there. That means businesses in other parts of the U.S. can threaten to move their production to the region if workers start to organize. Without “fine, we’ll move south, the shrimp is better there anyway” as a bargaining chip, negotiations around the country would look different.

• The UAW also lost a campaign at the same Volkswagen plant in 2014. Organizers have been trying to revive the movement ever since.

On one side of the issue: Workers in support of unionization say production teams are understaffed, which leads to added stress and injuries, and medical staffers have been reluctant to allow them access to health care. They think a union will give them more leverage when seeking benefits.

On the other: State politicians, including Gov. Bill Lee, told workers they’d benefit more from a “direct relationship ”with the company. Opponents also argued unions would keep Tennessee from attracting businesses, citing examples of VW plants shutting down after unionization efforts.

Bottom line: The vote means no changes to the status quo, both for workers in the South and the balance of power in negotiations around the country.

ENERGY

Outages Galore

This weekend was one of Pride, dad time, and for some, frustrating and potentially dangerous power outages.

A major Argentine electricity company said Sunday an electrical failure had left almost the entire country and neighboring Uruguay without power. Parts of Paraguay, Brazil, and Chile were affected as well.

• The timing was not good. Some parts of Argentina had local elections yesterday.
• The subway in Buenos Aires was not running Sunday, and an Argentine water company instructed people to limit water use.
• The exact cause hasn't been identified yet.

On the other side of the Canal, Target locations across the U.S. suffered register outages on Saturday that lasted about two hours, frustrating both last-minute Father’s Day shoppers and those who went in for some dish soap and left with dish soap, a new wardrobe, and a mountain bike.

• On Sunday, technical problems continued when some stores couldn’t process credit card payments, though Target said the issues were unrelated.

In a statement, Target said the Saturday outage was “not a data breach or security-related issue,” and that “no guest information was compromised at any time.”

AVIATION

A Deflated Paris Air Show

Jokes you can expect to hear at this week’s Paris Air Show:

Why was the plane sent to its room? Bad attitude.

Here are some other more downbeat developments we’re following at the aviation extravaganza:

1. Boeing 737 Max: The plane has been grounded worldwide since March after its involvement in two fatal crashes. No one knows exactly when Boeing’s cash cow will fly again.
2. Low orders: Boeing didn't book a single new order for commercial planes in April or May. But if there’s any time to reveal a splashy new deal, it’s the Paris Air Show.
3. Backlogs: This could be part of why orders have been down. Boeing has a backlog of more than 5,500 planes. Airbus? Over 7,200.
4. Industry downturn: Not only is passenger traffic growing at a slower pace, but air cargo shipments are falling, down 4.7%
   in April.
5. Airbus’s new plane: It’s expected to up the ante with Boeing by revealing the A321XLR, a long-range, single-aisle jet.

Bottom line, courtesy of Boeing CEO Dennis Muilenburg: “We come to this air show focused on safety. We come to this air show with a tone of humility and learning.”

MEDIA

Sequels Need a Reboot

Sony’s Men in Black: International, the fourth MIB film, earned only $28.5 million at the North American box office this weekend. While taking the top spot, that marks 1) a franchise low and 2) a new low for franchises.

Big picture: The past few weeks have shown Hollywood can’t just slap a “2” or a “3” or a “reloaded” on the end of a familiar movie title and expect to drown in ticket stubs.

• Godzilla: King of the Monsters, The Secret Life of Pets 2, and the latest X-Men movie, Dark Phoenix, have all underperformed at the box office this season.
• Domestic ticket sales are down
  more than 7% annually, per Comscore.

What’s going on? Viewers might be suffering from collective “franchise fatigue,” or...those movies might just be really bad.

Looking ahead: We’ll get more of an answer when the undisputed franchise king, Disney, unleashes Toy Story 4 later this week.

CALENDAR

The Week Ahead

This week will feature the longest day of the year.

No, not the summer solstice—Wednesday, when we’ll be waiting for Fed Chair Jerome Powell to announce a decision on interest rates.

Monday: Empire State Mfg. Survey; Paris Air Show begins; Cannes Lions Festival begins

Tuesday: Facebook will reveal its cryptocurrency; housing starts; FOMC meeting begins

Wednesday: Fed announces interest rate decision; earnings (Oracle); Juneteenth

Thursday: Slack is expected to go public; NBA Draft; World Refugee Day; U.S. women play Sweden in the World Cup; earnings (Canopy Growth, Kroger, Darden Restaurants)

Friday: Summer solstice (the longest day of the year & start of summer); Take Your Dog to Work Day; quadruple witching; Toy Story 4 is released

WHAT ELSE IS BREWING

• The DOJ
  could make a decision on the T-Mobile/Sprint merger as soon as this week, per Reuters.
• U.S. drugmakers sued to block a new government regulation that would force them to disclose the price of drugs in TV ads.
• Farmers
  in the Midwest are throwing parties to cope with record flooding that’s caused delays in planting.
• The Los Angeles Lakers are now the favorite to win the 2020 NBA title after trading for Anthony Davis.

BREAKROOM

Greater Than, Less Than, or Equal to

1. O.J. Simpson Twitter followers // Theresa May Twitter followers
2. Beyond Meat Q1 revenue // Blue Apron Q1 revenue
3. VC cannabis investments so far in 2019 // VC cannabis investments in the entirety of 2018
4. Philadelphia 76ers odds to win the 2020 NBA title // Golden State Warriors odds to win the 2020 NBA title

Breakroom Answers

Greater Than, Less Than, or Equal to

O.J. has fewer Twitter followers than Theresa May
Beyond Meat had less Q1 revenue than Blue Apron, $40 million VC investments in cannabis have already surpassed
last year’s total
Equal to. The 76ers and Warriors are both 12-1