Labor pains
After a “summer of strikes” last year that stretched from Detroit to Hollywood, unions are on a roll, flexing their growing might. Friday will bring a new test of that power as workers at a Volkswagen factory in Tennessee vote on whether to join the United Automobile Workers.
Victory there would mark perhaps the first time a foreign carmaker’s U.S. plant became unionized and form a beachhead for organized labor in the anti-union South. But it could also resonate well beyond the car industry as President Biden cultivates labor in battleground states like Michigan and Pennsylvania.
A yes vote would be a big win for the U.A.W. After securing big pay raises at the Big Three Detroit carmakers last year, the union is taking aim at the more than two dozen nonunion car factories in the U.S. (Those companies, including Toyota and Tesla, responded by raising wages for factory workers.)
The U.A.W. president, Shawn Fain, has pledged to spend $40 million over the next two years to help workers organize nonunionized manufacturers — whose factories are largely in nonlabor-friendly states. “Conditions are as favorable as they’ve been in my lifetime,” he told Automotive News recently.
Unions are having a moment after years of falling membership. From 1983 to 2023, the share of total U.S. workers in unions fell by 10 percent. But public support for unions is growing.
Efforts to organize workers at a broad range of companies, from Amazon to Starbucks, have taken on more prominence as well. Among the announcements just this week:
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Workers at a Mercedes-Benz factory in Alabama will vote next month on whether to unionize;
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Disney workers who perform as theme park characters have filed to vote on joining the Actors’ Equity Association;
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And pharmacists at CVS stores are moving to unionize.
Biden is pitching hard to organized labor. He has opposed Nippon Steel’s $14 billion bid for U.S. Steel, after the Pennsylvania-based company’s workers opposed the deal — later winning the endorsement of the United Steelworkers.
And last year, Biden became the first sitting president to join a picket line when he met striking auto workers in Michigan. The U.A.W. has since backed him.
Biden has crafted industrial policies with an eye toward workers. This week, he called for raising tariffs on Chinese steel and aluminum as he tried to shore up support among voters that helped him beat Donald Trump in 2020. (Such labor-friendly policies could bolster his standing with progressives, many of whom have criticized his handling of the Israel-Hamas war.)
What’s next: Expect the U.A.W. to keep up its campaign to organize more factories. That could ultimately help unionized American carmakers, which have had to deal with higher labor costs than rivals without organized work forces.
HERE’S WHAT’S HAPPENING
Oil prices waver after Israel strikes Iran. Brent crude, the global benchmark, briefly jumped after the Israeli armed forces hit a military air base in central Iran, before sliding back down. Global leaders and investors had waited to see how Israel would respond after last weekend’s Iranian strike; analysts have regarded Friday’s attack — and the lack of strident calls for retribution by Iranian leaders — as a sign that both sides were seeking to ease tensions.
Apple removes WhatsApp and Threads from its Chinese App Store at Beijing’s behest. The move also included non-Meta messaging apps, Signal and Telegram and was made after the Chinese government found content about President Xi Jinping that it said violated cybersecurity laws. The decision will probably heighten tensions in the battle between the U.S. and China over technology as Congress weighs a bill that would force the divestment of TikTok by its Chinese parent company.
Netflix adds more subscribers and increases revenue. The streaming service reported first-quarter results that exceeded analyst expectations, expanding its base to 270 million users. The report reflects Netflix’s solidifying dominance of the streaming industry as rivals like Disney and Paramount cut costs in an effort to compete.
Meta fires its biggest A.I. shot yet
As tech companies race to introduce their latest innovations in artificial intelligence, Meta is making its widest push to date. Meta, the parent of Instagram, WhatsApp and Facebook, is incorporating the newest version of its A.I.-powered assistant across its family of apps.
The announcement comes as the big tech giants try to cement themselves as A.I. leaders — even as their expensive efforts will be called into focus when they start reporting quarterly earnings next week.
Meta’s A.I. assistant will be infused throughout the company’s apps. Starting in more than a dozen countries, the software will be everywhere: in news feeds, chats, search bars and more. The technology will instantly become among the most widely available A.I. services, given that nearly four billion people use the company’s apps every month.
The company is also adding faster image-generation technology and making the model less likely to refuse to answer some questions.
Meta is touting its technical prowess. The assistant is based on LLaMA 3, the company’s newest A.I. model, which executives say outperforms rivals in several benchmarks.
With every release of a new A.I. model, companies like Microsoft and Google have been quick to broadcast how much more sophisticated their offerings are. Expect that to continue when OpenAI introduces its GPT-5 model as soon as this summer.
Other tech giants aren’t standing still. Google is consolidating all its A.I. model work, including its Gemini chatbot, under its DeepMind division headed by Demis Hassabis.
The reorganization is intended to further consolidate its A.I. work, which critics have said has been stymied by bureaucratic hurdles.
But a big question still looms over the A.I. race. When will all this expensive work pay off? Tech executives have promised that it will … eventually.
How much more patience investors have may become clearer when tech giants start reporting financial results, beginning with Microsoft on Thursday.
Sony may enter the Paramount fray
Paramount is deep in exclusive negotiations with Skydance over a complicated merger, but that hasn’t stopped others from circling the storied media company. That group now includes Sony Pictures Entertainment, which is in talks to team up with Apollo Global Management for a bid, The Times’s Ben Mullin and DealBook’s Lauren Hirsch were the first to report.
Sony and Apollo may not make a formal offer. But the Japanese-owned studio’s potential participation could add more pressure on the special committee of Paramount’s board negotiating with Skydance.
Paramount shareholders may be heartened by the prospect: Shares in the company were up nearly 9 percent in premarket trading on the news. Several investors have been openly skeptical of the potential Skydance deal.
Sony’s angle: The studio has been a Hollywood contrarian, selling movies and TV shows to streaming platforms like Netflix instead of creating its own general-interest service. But acquiring Paramount would give it Paramount+, which has nearly 70 million subscribers and blockbuster titles like “Top Gun: Maverick.”
What a deal could look like: One version would have Sony as the majority owner and operator, with Apollo taking a minority stake that it could sell back to the Japanese company at some point.
Sony would likely operate Paramount as a studio within its own empire, while folding Paramount’s marketing and distribution arm into its own operation. It’s not clear yet how CBS, one of Paramount’s crown jewels, and Paramount’s fading cable channels like MTV would fit into the combined company.
The challenges: Skydance would most likely argue that a deal involving Sony could draw scrutiny from antitrust regulators. Both Sony and Apollo, which owns a stake in Legendary Entertainment, have interests in studios that are bigger than Skydance.
The F.C.C. could also weigh in. The agency forced Standard General to abandon its takeover of the broadcaster Tegna because Apollo, which was set to finance the bid, owns a stake in Cox Media.
Then there’s the question of whether Sony’s Japanese ownership would run afoul of rules limiting foreign control of U.S. broadcast networks.
A China hawk exits with a final warning
Representative Mike Gallagher, the Wisconsin Republican and influential China hawk, is leaving Congress with a bang.
The House committee on competition with China, which he has led since early 2023, on Thursday accused Wall Street giants like BlackRock and MSCI of letting billions flow to companies that advance China’s military capabilities or support human rights abuses.
Big financial institutions provided $6.5 billion to blacklisted or red-flagged Chinese companies without disclosing any Chinese firm’s ties to the military or to human rights abuses. The committee said that MSCI, a major stock-index company, and BlackRock, the $10 trillion money manager, accounted for the vast majority of that.
American investors are “unwittingly funding” problematic Chinese companies, Gallagher and the committee’s top Democrat, Representative Raja Krishnamoorthi of Illinois, said last year. Thursday’s report focused on index funds, which MSCI and BlackRock dominate.
The committee has previously accused BlackRock of enabling investments in 20 blacklisted Chinese entities and sending at least $429 million into groups that work against U.S. interests. MSCI included various blacklisted groups in indexes that track public companies listed in Shanghai or Shenzhen.
The committee doesn’t have legislative authority, and it called on lawmakers to restrict capital flows into problematic companies.
BlackRock and MSCI said they hadn’t violated any laws. “An index does not, and cannot, channel investments, and MSCI does not manage or recommend investments in any country or company,” an MSCI spokeswoman told DealBook.
A BlackRock spokesman said that the “report includes misleading assertions about index funds, including that they are ‘funneling billions of dollars’ to these entities,” and called on Congress and the Biden administration to “create clear rules of the road for U.S. investors.”
How TikTok changed America
Even if Congress succeeds in forcing TikTok to be sold by its Chinese owner — or be barred from the U.S. — the video app has already reshaped American culture.
Roughly six years since TikTok started operations in the country, it has become a daily fixture for more than half the population, and was the most downloaded app three years running. The Times took a look at some of the app’s biggest influences on American life.
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Political campaigns have embraced it. That includes President Biden’s re-election effort, despite the White House endorsing Congress’s TikTok bill — a reflection of the app’s importance and reach.
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So have brands. TikTok is a core part of companies’ marketing strategies, and the app last year debuted a feed that lets users buy directly from a wide array of vendors.
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It even prompted Taylor Swift to defy her label. Last week, the pop star put her songs back on TikTok, ahead of the release today of her latest album, despite Universal Music Group having pulled the rights to use music from its artists on the platform.
THE SPEED READ
Deals
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Nordstrom is assessing the founding family’s interest in taking the retailer private. (Reuters)
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Schneider Electric is in talks to take over the engineering-software company Bentley Systems in a deal that could be worth more than $15 billion. (WSJ)
Policy
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Source Agencies
