Detroit
Strike rumbles on: Shawn Fain (pictured), president of the United Auto Workers (UAW) union, has warned that the current strike action by 13,000 workers at the Ford, General Motors and Stellantis factories in Detroit will be expanded unless there is “serious progress” over pay. The strike, which started last Friday, is the first time in UAW’s 88-year history that workers from the carmakers have walked out all at once, says Claire Bushey in the Financial Times. The UAW is demanding higher wages for nearly 150,000 members as part of a “broader battle to protect workers” during the clean energy transition, which it estimates could cost 35,000 jobs.
The strike comes at a time of wider labour unrest and casts a cloud of uncertainty over an industry that accounts for 3% of the US economy. President Joe Biden has been “forced to weigh in on the dispute” and his would-be challenger Donald Trump is due to make a speech to union workers in Detroit next week, say Ryan Felton and Nora Eckert in The Wall Street Journal. Although the firms have made offers of around 20% wage increases over four years, the UAW is seeking a “bump in the mid-30% range” and “cost-of-living adjustments added into base pay”.
San Francisco
Instacart priced to deliver: Groceries delivery start-up Instacart made its stockmarket debut on Monday, listing on the Nasdaq exchange at $30 a share. A day later, those shares had jumped 40% to $42, despite having been priced at the top of their range. “That may seem wacky in a market that has had a dearth of [initial] public offerings (IPOs) for months. But Instacart is still conservatively valued compared [with] peers,” says Jennifer Saba on Breakingviews. The higher price is also broadly in line with what the California-based company is worth, based on a multiple of 17 times earnings before interest, taxes, depreciation and amortisation (Ebitda) – “less than Uber and DoorDash”. If it were able to raise gross transaction values (GTVs – the aggregate value of orders before the cost of drivers and other expenses) by 10% by the end of next year, that would translate into an extra $672m in adjusted Ebitda. Of course, Instacart’s $14bn current value is a far cry from the $39bn it had been worth two years ago. Since then, the company “has not enjoyed the same frenzied spurt in shopping that it had during the height of the pandemic”. In 2020, GTV had “ballooned” by more than 300% year on year. Tech companies, more generally, have also fallen out of favour as the cost of capital has risen, while consumers’ finances have continued to come under pressur
