gwmt

Airlines may not get the Boeing (NYSE: BA) Dreamliner on its new revised schedule after all. The plane has been delayed three times because of manufacturing and supplier glitches. If Boeing has problems with one of its unions it might have to push back the launch date again. Some airlines are already asking Boeing for compensation for the late deliveries.

According to The Wall Street Journal, "With its aircraft order books so full that some customers must wait as long as five years for deliveries, Boeing can ill afford a strike -- especially one that could further delay the rollout of its new 787 Dreamliner jet."

At the center of the negotiations are pay and pensions, making them little different from most such talks. But the solution for both sides could involve an incentive.

Boeing does not want to be faced with a strike that could hurt its revenue. The unions want a bigger piece of Boeing's sales pie. Boeing should return to the bargaining table with a simple proposal. If its new jets are delivered on time, wages will go up at a rate close to the union's requests. If not, the increases will be lower.

Boeing could set up a partnership with its labor force driven by the common goal of product launches. That is better than a strike that does neither the union nor Boeing any good.

Douglas A. McIntyre is an editor at 247wallst.com.

It was a publicity nightmare for the Walt Disney Co. (NYSE: DIS): Tinkerbell, Snow White, Pinocchio, and Minnie Mouse being handcuffed and hauled away from Disneyland in a police van.

32 costumed protesters were arrested for failing to obey a police order and traffic violations on Thursday. The protest was part of a labor dispute involving 2,300 workers at Disney's hotels: the Paradise Pier, the Grand Californian and the Disneyland Hotel.

The union's contract expired in February, and workers complain that the new offer from Disney management would make health care unaffordable and, according to the president of Unite Here Local 681, workers are comparable local hotels make $2-3 an hour more. You can read the details of the dispute here.

I can't imagine that stuff like this is good for traffic at Disneyland: imagine showing up for a day of fun rides with your family, only to have your 4-year old ask why Mickey and Goofy are being hauled off in handcuffs!

A Disney spokesman told the USA Today that "Publicity stunts are not productive and are extremely disruptive to the resort district."

But won't disrupting the resort district "encourage" Disney to meet its workers' demands? If so, that sounds productive to me!

Bloomberg reports on the career struggles of former structured finance professionals who have now found themselves unceremoniously dumped on the street as the products they built wreak havoc on the global economy. According to Bloomberg, the investment world has shed 76,670 in the past year.

One former vice president in credit strategy at Bear Stearns is setting up her own company to provide birthday parties and cupcake cooking lessons for children. A Bank of New York asset backed securities trader has left the world of high finance to open a discount hair salon with his wife. Others are becoming teachers.

I'm not sure how I feel about this. Can't these washed up masters of the universe just collect unemployment and live off their investments, and leave the world alone? They've already crashed the housing market and led to hundreds of billions in write downs. Now they're going to go mess with cupcakes? Is nothing sacred?

We can take some comfort in the fact that they're taking a pay cut. Wall Street salaries averaged $399,360 in 2007. That's a lot of cupcakes and $12 haircuts.

The New York Times reports that the Federal Deposit Insurance Corporation (FDIC) is hiring back experienced people as the number of failed banks rises. Its report gives a good idea of what the FDIC does to rescue a failed bank. In a nutshell, when a bank fails the FDIC tries to find a stronger partner who can take over the foundering operations. Starting on Friday evening, the FDIC does triage so that it knows which assets and deposits the partner will get and which will go on the FDIC's books.

Here are six key steps:

• Find a merger partner. For example, the Times reports that on Friday May 9, the FDIC seized Arkansas National Bank (ANB) -- a $2.1 billion construction lender -- and arranged for it to be acquired by Pulaski Bank and Trust Company. As it usually does, the FDIC planned to use the weekend to minimize the disruption to depositors of ANB.
• Enter town quietly. FDIC personnel try not to alert the locals to their presence. The Times reports that they "used personal credit cards, rather than cards provided by the FDIC, to avoid detection." And they were told to give a false reason for their presence in town. The Times quotes Gary Holloway, a hired back retiree, who said: "If anybody asked why they were in town, they were told to say that they were with the Toy Shop on business."

The cold war between Wal-Mart Stores Inc. (NYSE: WMT) and the unions is heating up again.

Earlier this month, the Wall Street Journal reported that the world's largest retailer had warned employees that a Democratic president would back the Employee Free Choice Act, a law that would make it easier for unions to organize workers, which the company opposes. The paper now is saying that the union groups have asked the Federal Election Commission to investigate the matter, which they claim violates federal law.

Of course, this is a brilliant public relations move by the unions. First of all, the FEC is as toothless as some Wal-Mart greeters. Even if the FEC finds that Wal-Mart broke the law, the worst that the company will get is a slap -- make that a tickle -- on the wrist. That may not even happen until well into an Obama administration, which brings up my next point.

Why is Wal-Mart set to pick a fight with the Democrats? Don't the folks in Bentonville read the political tea leaves? Odds are pretty good that the country will go Blue in a big way. Maybe the company is worried that the good times reflected in today's results won't last.

Back in the good 'ol days of say 2004, Gannett Co. (NYSE: GCI) was one of the few newspaper publishers Wall Street liked. Part of the reason was that many of the papers were in smaller cities such as Wilmington, Delaware, and Poughkeepsie, NY, where competition was not as great for advertisers. These days the publisher of USA Today is up the creek with the rest of the industry.

With its shares down more than 50% this year, it should come as no surprise that Gannett is joining the ranks of publishers that are laying off staff. According to a memo leaked to the unofficial Gannett blog, about 1,000 positions will be eliminated across Gannett's Community Publishing Division. Six hundred of those employees will lose their jobs, the memo says.

"Several GCI papers have already made recent job cuts, but at a higher rate: 5%," the blog says. "The division's dailies do not include USA Today, suggesting that any further reductions at Gannett's flagship could be on top of the 1,000 jobs eliminated."

Gannett investors -- who must be the few, the proud like The Marines -- must have been expecting the move. Shares of the publisher have soared 10% in the past month. About the only relief they are going to get is through a takeover by private equity companies. The publicly traded media companies have no interest in buying into an industry whose best days are behind it.

Ever wonder what the geniuses who work at fast food restaurants do when they want to amuse themselves? How about take a bubble bath in the nude in the kitchen sink, video tape it and post it on YouTube? Welcome to Burger King's (NYSE: BKC) public relations nightmare.

It seems that this caper was the bright idea of a Burger King employee who goes by the name "Mr. Unstable." With his tattoos and punk rock hairdo circa 1985, the moniker suits him well. From what I could gather from the low-quality sound on the video, Mr. Unstable wanted to get clean for his birthday. Amazingly, none of the employees at the restaurant thought this was unusual enough to tell the manager.

In fact, they told the manager that everything was cleaned up while the video camera was rolling. I guess she was too dumb to realize something was up. The employees involved were fired. Let's hope the remainder got IQ tests.

The video made the rounds of the internet and came to the attention of the county health commissioner, who was, of course, horrified.

When a local TV station contacted Burger King about this incident, a company flack emailed the following statement:

"Burger King Corp. was just notified of this incident and is cooperating fully with the health department. We have sanitized the sink and have disposed of all other kitchen tools and utensils that were used during the incident. . . . We have also taken appropriate corrective action on the employees that were involved in this video. Additionally, the remaining staff at this restaurant is being retrained in health and sanitation procedures."

They also might add training to avoid hiring employees who call themselves "Mr. Unstable."

More bad news for Ford Motor Co. (NYSE: F). After announcing a mammoth $8.6 billion loss just three weeks ago, the company is laying off 300 workers in the Detroit area. The workers at the Romeo Engine Plant are being let go due to a steep drop in demand for vehicles which use a V8 engine that goes into a majority of Ford's trucks and SUVs. As gas prices have climbed, large truck and SUV sales have plummeted.

The layoffs start Monday, according to a Ford spokesperson. The 300 being let go are a good chunk of the 1,075 people employed at the Romeo plant. Perhaps Michael Moore should show up and film another movie.

After Ford saw an 18% drop in truck and SUV sales during the first seven months of 2008, its Way Forward plan needs to be pushed into high gear. Ford needs to make the product mix as flexible as possible to meet the changing demand arising from changing tastes and gas prices fluctuations.

This situation reminds me of Clayton Christensen's Innovator's Dilemma a bit. Instead of innovating in the supply chain and manufacturing flexibility arenas, automakers that aren't adept at near-instantaneous changes in consumer buying habits are finding out just how painful the status quo can really be.

U.S. stock futures were a little higher this morning following Friday's rally. Oil futures have been rising again due to the Russian-Georgian conflict and the dollar retracted from the five-month high set Friday. Global markets were mostly higher although China's hit a 19-month low.

Waste Management (NYSE: WMI) is expected to raise its unsolicited cash offer for rival Republic Services (NYSE: RSG) by nearly 10% to $6.73 billion, the Wall Street Journal reported.

Verizon Communications (NYSE: VZ) and two unions agreed on a new three-year contract Sunday, averting a possible strike of 65,000 workers. The new contract provides 10.5% wage increases and changes in retirement benefits.

Berkshire Hathaway (NYSE: BRK.A) reported an 8% decline in second-quarter profit after the market close Friday. The investment group attributed the decline to fewer insurance premiums and $1 billion in unrealized derivative losses.

U.S. worker productivity increased a revised 2.2% in Q2, below the consensus estimate, as companies eliminated jobs without hurting output, the U.S. Labor Department announced Friday.

Economists surveyed by Bloomberg News had expected productivity to increase 2.7% in Q2. Productivity increased 2.6% in Q1. In the past 12 months, productivity is up 2.8%.

Productivity measures output per hour worked. Economists say rising productivity usually leads to increases in income, as businesses can increase salaries/wages paid without increasing their per unit costs.

Meanwhile, unit Q2 unit labor costs, a statistic adjusted for increases in efficiency, increased 1.3%. However, in the last 12 months labor costs have increased just 1.5%. Labor costs increased 2.2% and 4.7% in Q1 and in Q4 2007, respectively.

Economists surveyed by Bloomberg News had expected unit labor costs to increase 1.3% in Q2.

Q2 productivity takes some pressure off Fed

Economist Peter Dawson said the adequate Q2 2.2% productivity statistic, although below consensus, will provide argument support for doves on the U.S. Federal Reserve who want to keep interest rates as low as possible to encourage a U.S. economic recovery.

"Productivity is still rising at a healthy pace. That fact, combined will the relatively modest unit labor costs for the second quarter and year, present a picture that inflation is not getting out of control, which is good news for those seeking lower interest rates, and for business executives," Dawson said. "If these productivity and cost trends continue, hawks on the Fed are going to have a hard time making a case for an interest rate increase at the Fed's next meeting."

Over the past year, automakers have struggled to deal with the tough economic conditions in North America, especially the United States. One of the companies that has been able to handle the slowdown better than its peers has been Toyota (NYSE: TM). But the effects are being felt even by the Japanese automaker, as made clear today in the news that the company is laying off 800 workers in one of its Japanese plants.

The 800 workers that are being laid off represent about 10% of the workforce at the company's plant in southwestern Japan. So far, the company has been able to sidestep the steep losses that its American rivals have been forced to deal with, but this year is proving to be a bit tougher, as the company is now predicting a first annual drop in profit, which would be the first time in the past seven years that the company has seen profit fall.

Toyota has been more fortunate than many automakers, mostly due the fact that the company has a long history of building smaller, more fuel efficient cars. This fact alone has helped it weather the slowdown that record high gasoline prices in the U.S. have helped create. Last Friday, however, the company stated that sales dropped 18.7% in July from the same period last year.

Verizon's (NYSE: VZ) talks with labor have gone past their deadline. It is clearly good news that there has been no strike. The bad news is that one could still happen. At least 65,000 telecommunications employees are covered under the agreement being negotiated.

According to Reuters, "Verizon, which has not commented on issues under negotiation, has about 103,000 workers in its telecom unit, which covers residential and small business telephone, broadband and video services."

If the workers walk, Verizon's non-cellular businesses go to hell. Installations of broadband and TV service could come close to being suspended. That means the company's ability to compete with cable TV operations practically goes away. Verizon's customer service would also suffer.

This is probably a fine time to a stay away from the company's stock. It trades at $34, near a 52-week low. A prolonged strike could push the shares below $30.

Douglas A. McIntyre is an editor at 247wallst.com.

The U.S. economy lost another 51,000 jobs in June, the U.S. Labor Department announced Thursday, a figure that suggests the world's largest economy continues to slow, but has not seen -- so far -- the massive job losses that have accompanied previous slowdowns/recessions.

Meanwhile, the unemployment rate rose to 5.7% in July -- the highest rate in four years.

Economists surveyed by Bloomberg News had expected the U.S. economy to shed 72,000 jobs and the unemployment to remain the same at 5.6% in July.

Further, June was the U.S. economy's sixth straight monthly job loss and brings total job losses in 2008 to 463,000, the Labor Department said.

Not good news, but not horrible, either

Economist Glen Langan took pains to underscore that the July jobs report was not good news, even as he, and perhaps other economists as well, were somewhat relieved that the July jobs report was not a debacle.

"It's by no means a strong report, as it continues to show a difficult job market, but it isn't a totally awful report either," Langan said.

The Wall Street Journal reports that Wal-Mart Stores (NYSE: WMT) is warning its store managers against an Obama victory in November. Why? because Wal-Mart executives worry that Obama will boost the power of unions and that unionized Wal-Mart stores will lead to higher worker pay -- and higher prices for Wal-Mart customers.

I can understand why Wal-Mart executives would want to keep President Bush's policies in place for another four years. After all, those low taxes on the top 1% help enrich Wal-Mart brass. I am not suggesting that all Wal-Mart customers are Republicans, not at all, but I do believe that most people who shop at Wal-Mart cannot afford to buy their shoes at Neiman Marcus. And these middle- and lower-income Wal-Mart shoppers are the natural beneficiaries of Democratic policies such as Obama's plan for a middle-class tax cut.

Wal-Mart is clearly trying to be on both sides of this election. The Journal reports that it's reduced its share of contributions to Republican candidates from 98% in 1996 to 52% in 2008 -- giving 48% of its $2.2 million in political contributions to Democrats this year. It also has directors who have been big Clinton supporters, including Hillary Clinton herself who served on its board from 1986 to 1992 and Aida Alvarez, who worked in Bill Clinton's cabinet from 1997 to 2001 and has been a Wal-Mart director since 2006.

U.S. stock futures were mixed Friday morning after General Motors reported a massive loss and sales decline and ahead of what could yet another worriesome jobs report. Unemployment rate is expected to inch higher to 5.6%, while economists expect nonfarm payroll to show a decline 75,000 jobs during July. Other economic reports as well as July car sales could impact the market throughout the session. Seem, though, that after digesting GM's results, futures turned negative, indicating a lower start on Wall Street.

General Motors (NYSE: GM) will likely see some action as the automaker swung to a second-quarter loss of $15.5 billion, or $27.33 a share, as revenue dropped 18% to $38.2 billion. If you think this number missed analyst estimates because of massive charges, you're right, but earnings excluding special items also missed them -- by a mile. Excluding items GM would have lost $6.3 billion, or $11.21 a share. Ouch! Analysts polled by FactSet Research expected a loss of $2.85 a share on revenue of $42.6 billion. GM has been the subject of rumors it is heading straight into bankruptcy, from a quick glance at the results, these will likely not alleviate any such fears. Even as Wagoner cuts costs by $9 billion this year by another 20% trim of payroll and stopping dividend payment, as he plans to boost cash by $17 billion, at this point, I wonder what GM can do to save itself, if it can do anything at all. GM shares are down 7% in premarket trading.

GM will not be alone in the spotlight as Ford (NYSE: F) and other automakers report their U.S. sales for July. Auto sales tracker Edmunds.com is forecasting a 3.3% drop in auto sales compared to a year ago. This comes a day after Standard & Poor's Ratings Services cut its ratings for all three of the U.S.-based automakers further into junk status. S&P expects further sales decline for the rest of the year, with car companies mounting cash losses.