Boeing to Retain ICBM Guidance Contract

By Grant McCormick, The Chicago Times

February 6, 2023

ARLINGTON, VA – Boeing has been chosen by the United States Air Force as the prime contractor for the nation’s intercontinental ballistic missile guidance subsystems support.

Boeing announced the contract is worth up to $1.6 billion over 16 years and will be primarily performed in Ogden, Utah, and Heath, Ohio.  Boeing will be in charge of maintaining “around-the-clock” readiness and accuracy of Minuteman ICBM guidance systems, which has been in continuous operation for more than 40 million hours.

An Air Force Global Strike Command unarmed Minuteman III intercontinental ballistic missile launches during an operational test at 12:53 Pacific Time Wednesday, Aug. 11, 2021, at Vandenberg Space Force Base, Calif. ICBM test launches demonstrate that the U.S. ICBM fleet is relevant, essential and key to leveraging dominance in an era of Strategic Competition. (U.S. Space Force photo by Michael Peterson)

“We built the Minuteman’s guidance system, so no one knows it like Boeing. Our highly-specialized facilities and top-flight engineers enable us to sustain it with unmatched quality and precision.  We look forward to continuing our partnership with the Air Force on this all-important mission.”  said Ted Kerzie, program director of Strategic Deterrence Systems.

Boeing’s ICBM weapon system has served as the backbone of the U.S. nuclear triad since the inception of strategic deterrence.  In addition, Boeing has been the only company that has continuously supported every ICBM subsystem over the lifetime of the system.

Newmont Seeks to Acquire Newcrest

By John McPhaul, The Chicago Times

February 6, 2023

DENVER – Newmont Corporation announced Sunday that has submitted a non-binding proposal to acquire 100% of the issued share capital of Newcrest Mining Limited by way of a scheme of arrangement.  Newmont proposes to combine two of the sector’s top senior gold producers.

According to a press release, Newmont’s proposal to combine with Newcrest is on the basis of 0.380 Newmont shares per Newcrest share, which would result in the combined company being 30 percent owned by Newcrest and 70 percent owned by Newmont.

However, Newmont’s proposal will be subject to certain customary conditions, including due diligence to the satisfaction of both parties, entry into a scheme implementation agreement, and a recommendation from the Newcrest Board of Directors that Newcrest shareholders vote in favor of the proposal.

“We believe a combination of Newmont and Newcrest presents a powerful value proposition to our respective shareholders, workforce and the communities in which we operate,” said Tom Palmer, President and CEO of Newmont. “The proposed transaction would join industry-leading portfolios of assets and projects to create long-term value across the combined global business, and we welcome the consideration of Newcrest’s Board of Directors.”

Newmont and its Board of Directors advises shareholders need not take any action at this time as there can be no certainty that a transaction will be completed.  Newmont has engaged Banl of America Securities, Centerview Partners LLC, and Lazard as its financial advisers, and King & Wood Mallesons and White & Case LLP as its legal advisers.

Ford 4 Quarter Profit Plummets 90%

By Jeff L. Tucker, The Chicago Times

February 3, 2023

DEARBORN, MI – Ford Motor Company announced Thursday that fourth-quarter net income plummeted 90% from a year earlier.  Ford executives admitted that costs are too high in this inflationary period and vowed to slash spending this year.

In a press release, Ford CEO, Jim Farley, said “We should have done much better last year.  We left about $2 billion in profits on the table that were within our control, and we’re going to correct that with improved execution and performance.”

To help reduce costs, Farley also said Ford is transforming its product development, manufacturing, and supply-chain management as it goes down the electric vehicle production route.

Chief Financial Officer, John Lawler, blamed the global shortage of computer chips and other component parts prevented Ford from producing and selling almost 100,000 units.  Lawler declined to comment as to why those parts should not be manufactured in the United States.

Farley and Lawler said outright that there will be more white-collar layoffs and cuts to manufacturing and warranty costs.  They also declined to comment on how much UAW demands affect final product prices and overall production costs.

Despite the $2 billion loss, Ford shareholders will enjoy an $.80 first-quarter dividend attributed to strong cash flow and the monetization of its stake in Rivian.

According to the earnings report, for 2023, Ford expects to earn $9 billion to $11 billion in adjusted EBIT, presuming “. . . seasonally adjusted annual rates of about 15 million vehicles in the U.S. and about 13 million in Europe. The company anticipates generating about $6 billion in adjusted free cash flow, which assumes no distributions from Ford Credit.”

GM Declares Quarterly Dividend

Press Release General Motors Company

January 30, 2023

DETROIT – General Motors Co. (NYSE: GM) announced today that its Board of Directors has declared a first quarter 2023 cash dividend on the company’s outstanding common stock of $0.09 per share payable Thursday, March 16, 2023, to all common shareholders of record as of the close of trading on Friday, March 3, 2023.

Amazon to End Free Grocery Delivery on Prime Orders Under $150

By Brooks McCormick, The Chicago Times

January 28, 2023

SEATTLE – Bad news for Prime grocery members as Amazon announces that it will end free grocery delivery for orders under $150.

In an email, Amazon said Prime members who use Amazon Fresh will be charged $3.95 to $9.95 for orders under $150 starting February 28.

Prime members currently pay $139 a year for faster shipping and other Prime perks which currently include free shipping on grocery deliveries for orders above $35.  According to Amazon, the new Amazon Fresh delivery charge will be $3.95 for orders between $100-$150, $6.95 for orders of $50 to $100, and $9.95 for orders under $50.

“We’re introducing a service fee on some Amazon Fresh delivery orders to help keep prices low in our online and physical grocery stores as we better cover grocery delivery costs and continue to enable offering a consistent, fast, and high-quality delivery experience,” Amazon spokesperson Lara Hendrickson said in a statement.

Amazon recently announced that it will lay off 18,000 workers in an effort to cut costs during this inflationary period.

McDonald’s: California Putting Bad Politics Over Good Policy

An open letter from Joe Erlinger, President of McDonald’s USA:

January 25, 2023

Whether you’re a lawmaker, a business owner or leader, or an everyday voter, one thing is clear: California has become a dramatic case study of putting bad politics over good policy.

Last fall, the legislature passed a bill – AB257, or the FAST Act – almost entirely at the behest of organized labor’s firm grip on many of the state’s lawmakers. It makes it all but impossible to run small business restaurants, but the impacts are far beyond that. Under the FAST Act, an unelected council of political insiders, not local business owners and their teams, would make big decisions about crucial elements of running a business, fracturing the economy in the process.

As the head of McDonald’s U.S. business and a native Californian, I’ve had reason to pay particularly close attention to the bill and how it passed. But the fallout from the legislation – and lessons to be learned here – matter to all of us, particularly as the Golden State tries to emerge as a model for the rest of the country.

Proponents argued that this bill was about helping everyone — especially hardworking people employed by restaurants. But the facts simply don’t support it.

No evidence exists to conclude that the FAST Act will better serve workers’ needs. That’s not just my opinion but also the conclusion from the state’s own experts. California’s Department of Finance said, “it is not clear that this bill will accomplish its goal.1” The Department of Industrial Relations (DIR) debunked a core argument of the FAST Act that claimed wage theft was disproportionately high in quick service restaurants. In fact, DIR said wage theft is up to five times lower at quick service restaurants than in other industries.2

Three of the foremost and most credible media outlets in the country – The Wall Street Journal, Washington Post and Bloomberg – unanimously said the bill was predicated on false promises, with one simply stating that it’s a “recipe for higher restaurant prices and lower business and job growth.3

Economists estimated AB257 would drive up the price of eating at a quick service restaurant in California by 20% at a time when people can least afford it.4

Even more perplexing are final-hour exemptions that reek of backroom, special-interest negotiations in Sacramento (or maybe Napa Valley). One carveout says that the law doesn’t apply to certain restaurants that bake bread on-site. Another exempts restaurant brands with fewer than 100 locations nationwide. Carveouts like these pit local businesses against each other and undermine the goal of helping all restaurant workers.

So how did it get this far?

After years of work, and hundreds of millions of dollars, organized labor has failed to meaningfully grow its base of dues-paying members in new industries. Take, for example, that in 2022, the unionization rate in the U.S. (10.1 percent) was the lowest on record (in 1983, the first year where data is available, the union membership rate was at 20.1 percent). Unions only gained 273,000 members in 2022 following four consecutive years of membership declines in the preceding years.5

Simply put, organized labor hasn’t been successful going through the front door – giving everyday workers the ability to choose whether they want a union. So it asked for a backdoor – pushing Sacramento lawmakers to introduce, pass and sign a bad policy that hurts small businesses, workers, and consumers.

The foremost leader of organized labor said legislation like AB257 “is how we are going to win the union part of our journey.6” By effectively creating a union bargaining table inside the government, taxpayers will foot the bill for organized labor’s membership campaign.

More than 1 million Californians took notice and said they wanted this bill’s fate to be decided at the ballot before bearing its burden, using California’s century’s old referendum process to stop it. This process was created more than 100 years ago to give the people the power to check special interests.

But California’s lawmakers didn’t want voters (or the State’s Constitution) getting in the way of their dealmaking. So politically appointed government employees quietly moved to enforce the law in the silent cloak of the holiday season.

As a 20-year member of a company that operates in many different political environments around the country and around the world, this looks much more like autocracy than democracy.

California legal experts were outraged that the state failed to “honor the People’s right to approve legislation before it becomes effective.7The Wall Street Journal said it was an embodiment of democracy’s demise in the state and surmised that it was another reason people and businesses were relocating.8

A judge in California ultimately ordered the state to stop until the people have their say at ballot boxes on November 5, 2024. And in spite of the court’s decision, politically appointed employees went ahead and submitted a request for $12 million and an army of highly paid lawyers to implement AB257.9 That’s just a drop in the bucket of what’s likely to come.

Let me be clear: we support legislation that leads to meaningful improvements in our communities, including responsible increases to the minimum wage. Our business does well when our employees and our communities do well.

We welcome and support legislation that creates an even playing field and applies to all industries and all workers. We support legislation that has clear, meaningful, positive and transparent outcomes for the broader community and our restaurant teams. We applaud legislation that supports small business owners and the franchised business model – and does not impede our ability to engage with and meet the needs of employees and aligns with our values.

There are big, important issues that need the attention of lawmakers: inflation and rising costs, a deficit10 in the California state budget, housing crises and economic uncertainty. Implementing costly and job-destroying legislation like AB257 is not the answer.

The state is teaching us a powerful lesson about what our future could look like if this one-sided style of democracy is mimicked elsewhere, or goes unchecked in the Golden State. And this threat is real – just last week, a Virginia legislator imported from California introduced a near-identical piece of legislation11 that state leaders now have an opportunity to stop in its tracks. And no doubt, they’ll keep looking for backdoors in California.

Fortunately, California voters will have their say in 2024. In the meantime, if you see special-interest legislation like this coming your way, workers, consumers and small business owners need to unite and demand better.

Joe Erlinger President, McDonald’s USA

1California Department of Finance: Department Of Finance Bill Analysis

2Employment Policies Institute: Not So FAST: Analyzing Labor Law Compliance at California Fast Food Restaurants

3WSJ: California’s Fast-Food Bill Whopper

4UC Riverside: How Increases In Worker Compensation Could Affect Limited-Service Restaurant Prices

5U.S. Bureau of Labor Statistics: Union Members Summary, Jan. 19, 2023

6The Washington Post: A Calif. Law that takes wage-setting power from fast-food bosses sparks fight

7OC Register: An unlikely threat to popular democracy in California

8The Wall Street Journal: Democracy Dies in California

9State of California Budget Change Proposal

10The Bond Buyer: Facing a deficit, California budget plan brings back bonds

11HB 2478: Fast Food Industry Workers Standards Board