(DETROIT) — United Auto Workers President Shawn Fain said the union’s strike will expand if “serious progress” isn’t made in the contract negotiations with automakers by Friday.
Fain said in a Monday evening update posted on social media that the deadline for greater progress in the union’s talks with Ford, GM and Stellantis is Friday, Sept. 22, at noon.
“That will mark more than a week since our first members walked out. And that will mark more than a week of the ‘big three’ failing to make progress in negotiations toward reaching a deal that does right by our members,” he said in his video message.
“Autoworkers have waited long enough to make things right at the ‘big three.’ We’re not waiting around, and we’re not messing around,” he added.
On Monday, the labor strike against the three largest motor vehicle manufacturers in the United States carried into a fourth day amid ongoing negotiations to reach a deal.
The UAW, which represents nearly 150,000 American autoworkers, launched a strike early Friday against General Motors, Ford and Stellantis — often called the “big three.” Almost 13,000 workers walked out of three auto plants in Michigan, Missouri and Ohio. The union is utilizing a “stand-up” strike method to target specific plants and add to the list if a deal isn’t reached.
The UAW held talks with Ford on Saturday, GM on Sunday and planned to meet with Stellantis on Monday, a union source told ABC News. The conversations with Ford were “reasonably productive,” the source said.
Sticking points in negotiations were wage increases and the length of the workweek. The union is demanding a 46% pay increase combined over the four-year duration of a new contract, as well as a 32-hour workweek at 40-hour pay. So far, all three of the Detroit-based companies have each put forward proposals that offered workers a 20% pay increase over the life of the agreement but preserved a 40-hour workweek.
After the unprecedented strike began on Friday, Ford laid off 600 workers who assemble cars at a plant in Michigan. Workers in the paint department at a nearby plant are out on strike, leaving the assembly workers without adequate parts since the parts require paint before they can be put together into cars, a company spokesperson told ABC News.
President Joe Biden said Friday he is deploying acting Labor Secretary Julie Su and White House senior adviser Gene Sperling to Detroit to offer their support for the parties in reaching an agreement.
Economists previously told ABC News that a strike could result in billions of dollars in losses, disruption to the supply chain and other financial consequences.
(NEW YORK) — An August cyberattack on Clorox caused “wide-scale disruptions” in its operations, which could mean product delays and shortages, according to a securities filing Monday.
The Clorox Company, known for its sanitizing wipes and brands such as PineSol, FreshStep cat litter, and Hidden Valley Ranch, said they detected “unauthorized activity on some of its Information Technology” on Aug. 14. The company took steps to “remediate the activity, including taking certain systems offline,” according to the filing.
The activity — deemed a cyberattack — damaged portions of the company’s IT infrastructure, “which caused wide-scale disruptions of Clorox’s operations,” according to the filing. That may mean an impact on Clorox products hitting shelves.
Clorox said it’s repairing the infrastructure damaged in the cyberattack and reintegrating the systems it proactively took offline. Clorox said it will begin transitioning back to normal automated order processing the week of Sept. 25.
“Clorox has already resumed production at the vast majority of its manufacturing sites and expects the ramp up to full production to occur over time. At this time, the Company cannot estimate how long it will take to resume fully normalized operations,” the company said in its filing.
Clorox anticipates its profits will take a hit as a result of the cyberattack, too.
“Due to the order processing delays and elevated level of product outages, the Company now believes the impact will be material on Q1 financial results,” the filing says. “It is premature for the Company to determine longer-term impact, including fiscal year outlook, given the ongoing recovery.”
The company said Monday they are “still evaluating the extent of the financial and business impact.”
It is not yet clear who carried out the cyberattack.
Clorox has not yet said which brands were impacted in the cyberattack.
The Cybersecurity and Infrastructure Security Agency, which serves as the Department of Homeland Security’s cyber arm, did not comment on the breach, and instead referred ABC News to Clorox.
(DETROIT) — A labor strike against the three largest motor vehicle manufacturers in the United States carried into a fourth day on Monday amid ongoing negotiations to reach a deal.
The United Auto Workers, which represents nearly 150,000 American autoworkers, launched a strike early Friday against General Motors, Ford and Stellantis — the so-called Big Three. Almost 13,000 workers walked out of three auto plants in Michigan, Missouri and Ohio. The union is utilizing a “stand-up” strike method to target specific plants and add to the list if a deal isn’t reached.
The UAW held talks with Ford on Saturday, GM on Sunday and plans to meet with Stellantis on Monday, a union source told ABC News. The conversations with Ford were “reasonably productive,” the source said.
Sticking points in negotiations were wage increases and the length of the workweek. The UAW demanded a 46% pay increase combined over the four-year duration of a new contract, as well as a 32-hour workweek at 40-hour pay. GM and Ford put forward proposals last Thursday that offered workers a 20% pay over the life of the agreement, while Stellantis’ proposal included a total 17.5% pay increase. The offers from all three of the Detroit-based companies preserved a 40-hour workweek.
After the unprecedented strike began on Friday, Ford laid off 600 workers who assemble cars at a plant in Michigan. Workers in the paint department at a nearby plant are out on strike, leaving the assembly workers without adequate parts, since the parts require paint before they can be put together into cars, a company spokesperson told ABC News.
President Joe Biden said Friday he is deploying acting Labor Secretary Julie Su and White House senior adviser Gene Sperling to Detroit to offer their support for the parties in reaching an agreement.
Economists previously told ABC News that a strike could result in billions of dollars in losses, disruption to the supply chain and other financial consequences.
ABC News’ Meredith Deliso and Max Zahn contributed to this report.
(DETROIT) — The head of the United Auto Workers said plans by two automakers to temporarily lay off non-striking employees “won’t work,” as the unprecedented strike enters the second day.
The UAW, which represents nearly 150,000 autoworkers, started a strike early Friday morning against the Big Three automakers — General Motors, Ford and Stellantis. Nearly 13,000 workers walked out of three auto plants in Michigan, Missouri and Ohio. The union is utilizing a “stand-up” strike method to target specific plants and add to the list if a deal isn’t reached.
Hours after the strike started, Ford announced it told 600 workers who assemble cars at a plant in Michigan not to report to work that day, citing the “knock-on effects” of the strike. Workers in the paint department at a nearby plant are out on strike, leaving the assembly workers without adequate parts, since the parts require paint before they can be put together into cars, the company said in a statement to ABC News.
“Our production system is highly interconnected, which means the UAW’s targeted strike strategy will have knock-on effects for facilities that are not directly targeted for a work stoppage,” Ford said.
GM also said on Friday it plans to idle 2,000 workers at its Fairfax assembly plant in Kansas as soon as early next week due to a “ripple effect” of the strike at its Wentzville assembly plant in Missouri. The strike will mean a shortage of “critical stampings” supplied by Wentzville to Fairfax, GM said.
“We have said repeatedly that nobody wins in a strike, and that effects go well beyond our employees on the plant floor and negatively impact our customers, suppliers and the communities where we do business,” GM said in a statement. “What happened to our Fairfax team members is a clear and immediate demonstration of that fact.”
Stellantis has not announced any plans to lay off workers amid the strikes.
UAW president Shawn Fain responded to the announcements on Saturday.
“Let’s be clear: if the Big Three decide to lay people off who aren’t on strike, that’s them trying to put the squeeze on our members to settle for less,” Fain said in a statement. “With their record profits, they don’t have to lay off a single employee. In fact, they could double every autoworker’s pay, not raise car prices, and still rake in billions of dollars.”
“Their plan won’t work,” the statement continued. “The UAW will make sure any worker laid off in the Big Three’s latest attack will not go without an income. We’ll organize one day longer than they can and go the distance to win economic and social justice at the Big Three.”
A UAW source told ABC News on Saturday afternoon the union had “reasonably productive conversations with Ford today.”
Economists previously told ABC News a strike could result in billions of dollars in losses, disruption to the supply chain and other financial consequences.
Sticking points in negotiations were wage increases and the length of the workweek.
President Joe Biden said Friday he is deploying acting Labor Secretary Julie Su and White House senior adviser Gene Sperling to Detroit to offer their support for the parties in reaching an agreement.
ABC News’ Alexandra Hutzler contributed to this report.
(DETROIT) — A strike launched by thousands of autoworkers against the Big 3 U.S. automakers early Friday morning has spotlighted an issue raised by employees across the economy: The gap between CEO and worker pay.
The United Auto Workers, or UAW, has demanded a 46% raise for workers over the next four years. The proposed pay increase slightly exceeds the combined 40% increase in CEO compensation over the past four years at the Big 3 — General Motors, Ford and Stellantis, which owns Jeep and Chrysler, the union said.
Over that same period, the average pay for autoworkers at those companies rose 6%, the union said.
“While the Big 3 executives and shareholders got rich, UAW members, the workers, got left behind,” UAW President Shawn Fain said on Facebook Live last month, signaling a message that has pervaded his public statements in recent weeks.
The two sides remain far apart on the issue of pay increases. General Motors and Ford put forward proposals on Thursday that offer workers a 20% pay increase over the 4-year duration of the agreement; the latest offer from Stellantis includes a pay increase of 17.5% over the duration of the contract.
In a statement to ABC News, a General Motors spokesperson criticized the strike and touted the pay hike offered by the company.
“We are disappointed by the UAW leadership’s actions, despite the unprecedented economic package GM put on the table, including historic wage increases and manufacturing commitments,” the spokesperson said. “We will continue to bargain in good faith with the union to reach an agreement as quickly as possible for the benefit of our team members, customers, suppliers and communities across the U.S.”
Ford did not immediately respond to ABC News’ request for comment on the CEO-to-worker pay gap.
On Friday, Ford laid off 600 workers who assemble cars at a plant in Michigan, the company told ABC News in a statement. Workers in the paint department at a nearby plant are out on strike, leaving the assembly workers without adequate parts, since the parts require paint before they can be put together into cars, the company said.
“Our production system is highly interconnected, which means the UAW’s targeted strike strategy will have knock-on effects for facilities that are not directly targeted for a work stoppage,” Ford said.
Ford President and CEO Jim Farley said last week in a statement, “Overall, this offer is significantly better than what we estimate workers earn at Tesla and foreign automakers operating in the U.S.”
Stellantis declined ABC News’ request for comment.
While the CEOs at the Big 3 U.S. automakers enjoyed a significant increase in combined compensation over the past four years, the pay hikes among the chief executives differed substantially, according to a data analysis from research firm Equilar reviewed by ABC News.
Ford paid Farley 21% more last year than the company’s previous CEO received in 2018; while General Motors paid CEO Mary Barra 34% more over that period, the data showed.
However, Stellantis CEO Carlos Tavares received about 24% less last year than his predecessor did in 2018, the data found.
Equilar identified a different total compensation for Tavares than the UAW because Equilar adjusted the reporting methodology for the Amsterdam-based company to match the one undertaken by Ford and General Motors, Equilar director of research Courtney Yu told ABC News in a statement.
“These workers are physically making the cars every day, watching the cars get built and seeing their actual contribution to the productivity of the firm,” Lisa LaViers, a professor at Tulane University’s Freeman School of Business who studies executive pay and its effect on workers, told ABC News.
“When it’s the case that they’re seeing their CEO — who obviously doesn’t make the cars — benefit from their physical manual labor at a higher rate than they’re benefitting from it, you can understand how that hurts,” LaViers added.
The disparity between the rate of pay increases in recent years between workers and CEOs at the Big 3 U.S. automakers in recent years has helped contribute to a widening of the gap in pay between the companies’ top executives and their typical workers.
Last year, Barra, of General Motors, received compensation totaling $29 million while a median worker at the company received about $80,000, amounting to a ratio of 362-to-1, Securities and Exchange Commission filings show.
Farley, of Ford, received compensation last year totaling $21 million while a median employee at the company received about $75,000, resulting in a ratio of 281-to-1, the filings show.
The surge in CEO pay across the U.S. economy owes in part to the overall growth in size of major U.S. corporations, which increases the scale of compensation on offer for a chief executive, LaViers of Tulane University said.
In addition, strong CEOs command high compensation because they have an outsized impact on the success of a given company and, in turn, are in high demand, LaViers added.
“You can think about it like an NFL quarterback,” LaViers said. “Tom Brady is worth a lot of money and Tom Brady has shown it. These superstar CEOs are similar.”
When a company provides a large compensation package for its CEO, however, the firm can still offer pay raises for its workers, LaViers added.
“What’s interesting is that the United Auto Workers is not negotiating for lower CEO pay,” LaViers said. “They don’t care what the CEO gets paid, necessarily, as long as they are also getting paid commensurate with them.”
(DALLAS) — When Republican Texas Gov. Greg Abbott declared a war on “woke” earlier this year with a proposal that would require booksellers to rate texts before selling them to school districts, he caught the attention of a small wholesaler in St. Louis who feared that his industry would be decimated.
“We’re not book raters — we’re booksellers,” said Benjamin Conn, the owner of Classroom Library Company and the president of the Educational Book and Media Association, a group of 150 distributors nationwide that sell books to schools. “It would be like if Paramount came out with a movie and every theater had to rate it themselves.”
The trade association hired a lobbyist, who negotiated with Texas officials on behalf of an alternative version of the measure, Conn told ABC News, but to no avail. In response to a lawsuit brought by booksellers, a federal judge last month temporarily blocked Texas from enforcing the law, leaving the ultimate regulation uncertain.
“It has never been as bad as it is now,” Conn said, noting that Texas schools account for as much as $40 million in revenue for some wholesalers and the move could prompt adoption in other states. “It’s a mess. This has ground business to a halt.”
In a statement, a spokesperson for Abbott told ABC News that he has led Texas to a period of strong economic growth, in part through his support for small businesses.
“Small businesses are a key part of the Texas economic juggernaut, with 99.8% of Texas businesses being small and employing nearly half of all working Texans,” Spokesperson Andrew Mahaleris said.
While Fortune 500 corporations like Disney, Target and Anheuser-Busch draw attention as high-profile targets of anti-LGBTQ+ backlash, a lesser known but wide-ranging set of small businesses has been thrust into the nation’s culture wars.
MORE: Sales slumps at Target and Bud Light may fuel more boycotts, experts say
A slew of restrictive local and state laws, as well as a far-right consumer movement, have damaged employee morale or threatened the bottom line at small businesses from abortion clinics to beer distributors to apparel makers to nightclubs, according to ABC News’ interviews with business owners.
The dire threat faced by some small business people gained prominence earlier this month when California clothing store owner and designer Laura Ann Carleton was killed allegedly by a gunman who police say tore down a Pride flag outside her business and shot her after making homophobic remarks toward her.
“It has sent shockwaves,” Justin Nelson, the co-founder and president of the National LGBT Chamber of Commerce, told ABC News. “These companies pay their employees who are community members; they pay taxes. They’re a part of the small-business engine that makes the local, state and national economy run.”
The U.S. plays host to 1.4 million LGBTQ-owned small businesses, according to a report released by the National LGBT Chamber of Commerce last year.
Overall, the U.S. economy features more than 33 million small businesses, which make up 99.9% of all companies based in the country, the Small Business Administration found in May.
More than 520 anti-LGBTQ+ bills have been introduced in statehouses this year, including a record 70 laws that have taken effect, the advocacy group Human Rights Campaign said in May. Those laws include four measures censoring school curricula and two measures targeting drag performances, HRC said.
While the laws primarily address social issues, the measures often place a burden on businesses in related industries that must comply with the new regulations, Michael Morris, a professor at the McKenna Center for Human Development and Global Business at the University of Notre Dame, told ABC News.
Small businesses, which typically lack the financial buffer enjoyed by their larger counterparts, face an ongoing challenge as they recover from a pandemic-induced economic downturn amid the twin pressures of high borrowing costs and elevated inflation, Morris added.
“Businesses are in trouble and small businesses are especially in trouble in terms of navigating all of that,” Morris told ABC News, adding that regulatory laws, whether put forward by Democrats or Republicans, can create added costs for small businesses. “Getting pulled into social issues is not a luxury that they have.”
Pearl Bar, the only lesbian bar in Houston, Texas, according to owner Julie Mabry, was denied an insurance policy in March in part due to risks over the legal liability associated with a proposed state law prohibiting the performance of sexually explicit performances, such as drag shows.
“They looked at us as high-risk,” Mabry told ABC News. “It’s a risk because of this narrative that has been caused by politicians.”
“If we have far-right people pull up in front of Pearl and call the police because of a drag king, will they get away with it?” she added, using a term for women drag performers who take on masculine characteristics. Mabry fears that accusers could claim that a child walking past the bar witnessed a drag performer, she said.
The bar, which employs 12 people and brought in $1.6 million in revenue last year, has also faced $50,000 in annual added security costs amid the recent anti-LGBTQ+ backlash, such as extra security guards and new metal detectors, Mabry said.
Pearl Bar paid $280,000 in state taxes over a recent one-year period, Mabry added, saying the restrictive laws could end up hurting the state government’s finances.
“How can you be a good politician and think about the revenue in your state, when you’re suffocating these businesses?” Mabry said.
A public letter issued by HRC condemning the anti-LGBTQ laws has been signed by more than 330 businesses.
“For years, business leaders have shared the detrimental business impacts of policies and debates that exclude LGBTQ people from full participation in daily life, including negative impacts on workforce, recruitment, productivity, and bottom line,” the letter says.
In addition to the rise of state-level anti-LGBTQ laws, a growing consumer backlash against large corporations like Target and Anheuser-Busch has caused financial challenges for some small businesses.
A monthslong consumer boycott against Bud Light over a promotion from a trans influencer on Instagram has hammered hundreds of independent, often family-owned distributors that sell and deliver Bud Light to stores, bars and restaurants.
Anheuser-Busch InBev did not respond to ABC News’ previous request for comment about the losses at independent distributors.
Meanwhile, a similar boycott against Target, as well as anti-LGBTQ harassment, prompted the company to remove some Pride products from stores in May.
The move angered some artists and design companies that considered it a retreat from the company’s longstanding support of the LGBTQ community that could further embolden extremists and imperil vulnerable people.
Rob Smith, the founder and CEO of The Phluid Project, an LGBTQ-owned clothing company that has placed products in Target stores for three years, said he has “never seen anything in my lifetime” like the current backlash.
Target did not remove any products made by The Phluid Project, Smith noted. “We had no issues with Target,” he told ABC News.
However, the rise of anti-LGBTQ sentiment has hurt employee morale at his company, he added. “I’d lie if I didn’t say we’re deeply discouraged to see so much hatred,” he said. “But we’re bright people and we talk through it and we support each other.”
Large corporations that attempt to strike a conciliatory tone with anti-LGBTQ protesters risk harming small businesses and everyday people alike, Smith said.
“In general, I think any reaction to hate or violence and giving any room for a victory to those people is damaging in so many ways,” Smith said. “Damaging to a brand, damaging to a community, damaging to a society.”
Target did not immediately respond to a request for comment. In a statement, in May, Target said it removed some products from this year’s Pride collection because the company “experienced threats impacting our team members’ sense of safety and well-being while at work.”
“Our focus now is on moving forward with our continuing commitment to the LGBTQIA+ community and standing with them as we celebrate Pride Month and throughout the year,” the company said in the statement.
To be sure, many of the tens of millions of small businesses in the U.S. remain largely unaffected by disputes over social issues, Morris said.
“For most businesses, if you’re running a transport business or running a hardware store or whatever it is, those issues don’t interfere with how you run the business,” he said.
Still, a broad set of businesses and community groups has stood in support of small businesses harmed by the nation’s ongoing fight over social issues, said Nelson, of the National LGBT Chamber of Commerce.
“The opposition is trying to lean in and divide and polarize,” Nelson said. “And what we’re seeing is an outpouring of support.”
(NEW YORK) — Lordstown, Ohio, has been a crucial and valued site in the automotive industry, and now it is at the crossroads of what could be a major labor movement.
The 25-square-mile town was formally the site of a General Motors plant that employed thousands of unionized workers.
Last fall, a new plant focused on making electric vehicle batteries opened and hired many of the former GM workers, but those employees said their new positions, which were not unionized over a technicality, are a far cry from their previous positions.
Low pay, safety concerns, and other issues prompted many of the Lordstown Ultium Cells plant workers to fight for their benefits, and many say they are gearing up for an uphill battle.
“There’s a real push right now towards electric vehicles. We want to set the standard right here in Lordstown, Ohio,” David Green, one of the plant’s workers and union members, told ABC News Live.
Ultium Cells, a joint venture between GM and LG Electronics, will be producing the lithium-ion battery cells that will be used in electric vehicles as car manufacturers and the federal government push for more green offerings in the automotive industry.
Many long-time Lordstown factory workers who spent years at the GM plant applied and were given jobs at the Ultium plant, but they were not allowed to carry over their previous United Auto Workers union membership since the company was considered a parts supplier.
Mike Derose, an Ultium worker, told ABC News that a material worker at the plant was paid at the lowest rate of $15 an hour at first but that was bumped up to $20 an hour.
“That same type of person could be making closer to $30 if they were in a big three plant,” he said.
Dave Dellick, an Ultium worker and father of three, told ABC News that he had to take a second job because the plant’s $16.50 an-hour salary was not enough to provide for his family.
“When I applied to Ultium they said it’s going to be the next wave, the …, future going forward of batteries, electric vehicles,” he said. “So I’m thinking this could be a job I can retire from.”
In addition to the lower pay, workers also had safety concerns.
David Green, a plant worker, claimed to ABC News that there are currently no Occupational Safety and Health Administration regulations concerning certain chemicals that are used in EV battery production.
“The science hasn’t even caught up to the chemicals,” he said.
OSHA told ABC News that the plant currently has five open inspections.
Ultium Cells told ABC News in a statement, “The safety and well-being of our team members is our top priority. Ultium Cells follows all federal, state and local requirements for workplace and environmental safety, including those related to the handling of chemical materials.”
The frustrations among the workers ended with the majority of them voting to unionize with the United Autoworkers Union last December. They are the first EV battery plant in the country to successfully unionize.
The workers are currently in negotiations with the UAW and the plant’s management for the exact details of their contract, but those months of back and forth have been tough for some workers.
Dellick said several of his co-workers have quit their jobs at the plant in the last few months because of the low pay.
“Eventually they came to an agreement,” he said. “I think I almost got [a] $5 [an hour raise], so I’m up to $23 [an hour] now, but yeah, it’s been a kind of a long up-road climb like a mountain climb.”
GM said in a statement that it “is confident that Ultium Cells, and the UAW, will work in good faith to reach a reasonable agreement that is appropriate for battery supply operations.”
The Ultium workers’ efforts gained national attention last month when the Biden Administration and Dept. of Energy announced a $15.5 billion funding package focused on “retooling existing factories for the transition to electric vehicles – supporting good jobs and a just transition to EVs.”
The Ultium workers have support from Sen. Sherrod Brown.
“We have a tradition of these contracts creating middle-class wages and giving families a middle-class lifestyle, and they have taken that away because of bad trade agreements and other things,” Brown told ABC News. “We continue to fight for that disagreement in Lordstown.”
The plant workers said they hope their united stance can be a model for other factories that are transitioning to new products and technologies.
“The company is going to fight back…and we’ve got to just we’ve got to stand together and keep fighting,” George Goranitis, an Ultium plant worker, told ABC News.
(NEW YORK) — A boycott against Bud Light has hammered sales for months, dethroning the brand as the nation’s most popular beer and demonstrating the longevity of an anti-trans consumer movement that erupted in April.
Even more, a reset of shelf space that takes hold every fall at major retailers could solidify the sales declines and make it much more difficult for Bud Light to return to its performance before the boycott, according to ABC News’ interviews with a former Anheuser-Busch executive, a local Bud Light wholesaler and beer industry analysts.
Bud Light is set to lose refrigerator space at a vast network of stores belonging to key beer sellers like Walmart and 7-Eleven, since the retailers typically reapportion shelf space based on recent sales performance, taking space away from struggling brands and giving it to hot-selling ones, the industry sources told ABC News.
“During a busy shopping period on a Friday or Saturday night, if you don’t have the beer available cold on the shelf, consumers pick something else,” former Anheuser-Busch InBev executive Anson Frericks told ABC News, calling shelf space “the single largest determinant of sales in a store.”
“There will be a dramatic shift,” Frericks added.
Sales of Bud Light have recorded declines for five consecutive months after a product endorsement from Dylan Mulvaney, a transgender influencer, sparked backlash among many conservatives.
The boycott gained momentum, meanwhile, after the initial response from the company was perceived as conciliatory to conservatives by some LGBTQ advocates, prompting frustration on the left.
Anheuser-Busch did not immediately respond to ABC News’ request for comment, nor did Walmart or 7-Eleven.
Over a four-week period ending in early September, sales of Bud Light slid 27% compared to the same period a year prior, according to data from Bump Williams Consulting and Nielsen NIQ reviewed by ABC News.
Meanwhile, sales of rival brands have surged. During that same four-week period, Coors Light sales climbed 20% compared to a year ago; while sales of Yuengling’s light lager jumped a staggering 80%, the data showed.
The disparate performance of Bud Light and its competitors will be reflected in the display changes made by retailers, leaving Bud Light at a disadvantage as it tries to recover lost sales, Dave Williams, vice president of analytics and insights at Bump Williams Consulting, told ABC News.
“There’s explosive growth on one side and sharp decline on the other,” Williams said. “This does have that ripple effect where if Bud Light loses space on the shelf, that could make it a longer-term endeavor to claw back to where they were if they’re ever able to do that in the first place.”
Typically, about 80% of beer sales take place at retailers or other locations where consumers take the product home; while 20% of sales occur at bars and restaurants where customers drink the product on site, according to a report from Beer Market Analysis.
In recent months, rival executives have trumpeted the potential benefits of shelf space changes at retailers.
Constellation Brands CEO Bill Newlands, whose company makes the newly top-selling Modelo brand, told investors on an earnings call in June that a change in retail displays “works to our advantage.”
“Some of that is coming because of the growth and velocities that you’re seeing on our brands,” Newlands said. “But also the decrease that you’ve seen from some of our competitors.”
Molson Coors, the maker of Coors Light, held an earnings call last month during which CEO Gavin Hattersley said the company had already heard from nearly 20 top retailers saying that the company’s brands would receive additional shelf space as part of the reset.
“We’re working hard at making sure that shelf resets reflect the current reality in the marketplace, which shows that there is a strong momentum behind all of our core brands,” Hattersley said.
The impending loss of shelf space for Bud Light imperils roughly 500 independent wholesalers that sell and deliver the beer, Carlos Laboy, a beverage industry analyst at HSBC, told ABC News, noting that many of the distributors have already seen their revenue from Anheuser-Busch beverages this year decline by a third or more.
In turn, some wholesalers are cutting back their services and frequency of visits to retailers, Laboy said, further threatening sales performance. “Expect more wholesaler cutbacks now,” he added.
A general manager at an Anheuser-Busch distributor in Wisconsin, who declined to share their name, told ABC News that the shelf resets at retailers “could be an issue” but added that they do not expect a “drastic change.”
“The boycott has lasted longer than anybody thought,” the general manager said. “Every retailer has their own opinion for what sales warrant on their shelves. Time will tell.”
To be sure, industry analysts said that Bud Light sales could still recover to the levels at which they stood before the boycott, pointing to another shelf reset in the spring that offers Anheuser-Busch an opportunity to win back lost shelf space.
“These things are fluid,” Gerald Pascarelli, a beer industry analyst at Wedbush, told ABC News. “It depends on where consumer preference is and what trends are. They will change.”
Still, the impending reallocation of shelf space carries significant risk for Bud Light in the coming months, the industry analysts said.
“You’ve got to be on the shelf first to be selling,” Williams said.
(NEW YORK) — A union representing nearly 150,000 autoworkers launched a strike early Friday morning against the Big 3 U.S. automakers — General Motors, Ford and Stellantis.
The United Auto Workers, or UAW, and the car manufacturers failed to reach a contract agreement before a deadline set by the union for Thursday at 11:59 p.m. ET. Less than two hours before the deadline, UAW president Shawn Fain announced the plants where union members would strike if a tentative agreement wasn’t reached in time. By midnight Friday, which amounted to approximately 12,700 union workers, including ones at GM in Wentzville, Missouri; Stellantis in Toledo, Ohio; and Ford’s Wayne, Michigan plant.
The union is doing what’s called a “stand-up” strike, where not all union members strike at once.
Shortly after the strike was announced, Fain sent a message to UAW’s email list.
“A few minutes ago, thousands of UAW members at Ford, GM, and Stellantis walked out, marking the beginning of the Stand Up Strike,” his note read.
“This fight is our generation’s defining moment. Not just at the Big Three, but across the entire working class,” he continued, adding, “We will stand up for ourselves. We will stand up for our families. We will stand up for our communities.”
As the strike began, a Stellantis spokesperson released a statement expressing the company’s disappointment in not reaching an agreement.
“We are extremely disappointed by the UAW leadership’s refusal to engage in a responsible manner to reach a fair agreement in the best interest of our employees, their families and our customers. We immediately put the Company in contingency mode and will take all the appropriate structural decisions to protect our North American operations and the Company.
Earlier in the day on Thursday, the UAW and the companies remained far apart on key demands, such as wage increases and the length of the workweek.
The union demanded a 46% pay increase combined over the four-year duration of a new contract, as well as a 32-hour workweek at 40-hour pay.
General Motors and Ford put forward proposals on Thursday that offer workers a 20% pay over the life of the agreement; the latest offer from Stellantis includes a total 17.5% pay increase. The offers from all three of the companies preserved a 40-hour workweek.
In a statement Thursday night as the strike loomed, the Ford Motor Company said that the UAW’s counterproposal, which they received Thursday evening, “showed little movement from the union’s initial demands submitted Aug. 3.”
“The union made clear that unless we agreed to its unsustainable terms, it plans a work stoppage at 11:59 p.m. eastern,” the company said in the statement. “Ford has bargained in good faith in an effort to avoid a strike, which could have wide-ranging consequences for our business and the economy.”
The automaker said it “remains absolutely committed to reaching an agreement that rewards” employees “and protects Ford’s ability to invest in the future” during a time of transformation.
(DETROIT) — A potential strike at the Big 3 U.S. automakers — General Motors, Ford and Stellantis – would threaten the livelihood of up to 143,000 workers and the bottom line at some of the nation’s top companies.
The economic fallout, however, could extend far beyond the immediate players involved. Businesses may lose out on spending from striking autoworkers. Car component suppliers could grind to a halt. Consumers may decide to balk at higher prices.
A six-week strike would cost the U.S. two-tenths of a percentage point of economic growth over a period of three months ending in December, Mark Zandi, chief economist for Moody’s Analytics, told ABC News.
“This is a small impact, but meaningful,” Zandi added, noting that a potential strike would weaken the U.S. economy as it faces other threats, such as high oil prices, a federal government shutdown and the end of a moratorium on student loan payments.
As the weeks pass and automakers sell through inventory already diminished by a pandemic-era supply bottleneck, car prices could spike, threatening the Federal Reserve’s effort to bring down inflation, Zandi said.
A shorter strike against all three automakers, lasting 10 days, would still cost the U.S. economy $5.6 billion in losses, according to a report released last month by the Anderson Economic Group.
The losses include about $860 million in direct wages foregone by autoworkers as well as nearly $1 billion in missed production – both of which would be exacerbated by the resulting lost economic activity, the report said. Consumers and dealers, the report added, will suffer another $2 billion in losses as car owners delay repairs and sellers lose inventory.
The most significant economic impact would result from the lost wages that potentially tens of thousands of members of the United Autoworkers, or UAW, are set to endure, economists told ABC News.
“Lost wages directly and immediately affect every household of a UAW worker on strike and their spending power in the economy,” Tyler Theile, vice president and director of public policy for Anderson Economic Group, told ABC News.
“Whatever their spending power is today, it would be significantly different tomorrow,” Theile added. “That’s where the economic impact starts to hit and ripple through the economy.”
Employees participating in the work stoppage are set to receive strike pay of $500 per week, which for many workers would amount to less than half of their previous income. Such workers would be less likely to eat out at a restaurant or go to a movie theater, cutting revenue for those businesses, Gabriel Ehrlich, an economic forecaster at the University of Michigan, told ABC News.
“Those things add up,” Ehrlich said.
If the strike stretches for several weeks, workers at companies down the supply chain could suffer from the same dynamic, since lost production would lead to furloughs and diminished income, Erik Gordon, a business professor at the University of Michigan, told ABC News.
Initially, suppliers of car components like dashboards and sound systems may retain workers in the hope that a quick resolution of the strike would require a surge of activity as the automakers build up lost inventory, Gordon said. Over time, a backup in the supply of such components would trigger a slowdown in production.
“Those suppliers are going to first shut down shifts and then maybe shut down manufacturing all together,” Gordon said.
A four-week strike against all three automakers would result in 161,000 lost jobs in Michigan alone, according to a report authored by Ehrlich. A long-term strike would cause more than 300,000 job losses in the state, Ehrlich found.
In addition to workers and related businesses, consumers could suffer as dwindling inventory at the automakers leads to higher prices.
Due to the lingering effects of pandemic-era supply chain disruption, the Big 3 automakers hold one-fifth of the inventory that they did in 2019, when a 40-day strike against General Motors rendered little impact, said Theile.
Gordon said supply shortages caused by the strike could lead to a higher sticker prices.
“For consumers, it’s a terrible time to go out and buy a car,” he said. “If you have to buy a car, one thing is for sure: you’re not going to get any big bargains.”
On Thursday evening, the White House confirmed President Joe Biden had spoken with Shawn Fain, President of UAW, and leaders of the major auto companies to discuss the status of ongoing negotiations.
Biden made the calls as the clock continues to tick down to a possible strike.
