WSJ What’s News - Boeing Worker Strike Halts Production of Best-Selling Jets

Episode Date: September 13, 2024

A.M. Edition for Sept. 13. Thousands of Boeing machinists have walked off the job after voting to reject a new labor deal, dealing a financial blow to the struggling aerospace giant. Plus, Donald Trump’s allies draw up plans to privatize mortgage giants Fannie Mae and Freddie Mac. And, as Russia makes more slow gains on the battlefields of Ukraine, the WSJ’s James Marson reports that Kyiv’s Western partners are pressing it to think about a plan B for the war. Luke Vargas hosts. Sign up for the WSJ’s free What’s News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

When you're working out at Planet Fitness, it's a judgment-free zone, so you can really step up your workout. That's why we've got treadmills. And our team members are here to help, so you can be carefree with the free weights. They're also balance balls, bikes, cables, kettlebells, and T-Rex equipment, but like, no pressure. Get started at Planet Fitness by September 13th for $1 down and then only $15 a month. Hurry, you don't want to miss this one dollar down sale that ends September 13. Forty-nine dollar annual fee applies. See Home Club for details. More turbulence for Boeing as a strike halts production of its most popular planes.

Plus, Donald Trump's allies draw up plans to privatize mortgage giants Fannie and Freddie. And as Russia makes more slow gains on the battlefields of Ukraine, Kiev's Western partners press it to think about a Plan B for the war. So what we're seeing now is what would be more realistic goals? How can we give Ukraine the best possibility on the battlefield, but also to put Ukraine in the strongest possible negotiating position if we ever get to the stage of some kind of talks on a ceasefire, some kind of peace deal. It's Friday, September 13th.

I'm Luke Vargas for The Wall Street Journal and here is the AM edition of What's News, the top headlines and business stories moving your world today. Workers at Boeing's biggest labor union have overwhelmingly voted to strike, rejecting a contract that offered 25% wage increases over four years. Thousands of machinists walked off the job shortly after midnight Pacific time, halting production of the struggling plane maker's makers best selling jets. Journal aerospace reporter Sharon Turlip is in Seattle. 94% voted against the deal and 96% of union members voted to

strike. Workers said that the deal didn't come anywhere near making up for concessions that they'd made over the years. And for work shifted over the years to non-union plans. Union leaders say they hope to get back to the bargaining table as soon as possible. Fallout from a prolonged strike could stretch throughout not only Boeing, but to its suppliers and to airlines that are already short on jets that they need to meet resurgent travel demands. Boeing Chief Executive Kelly Ortberg, who took over last month, had pleaded with workers

before the vote not to strike, while the chief of Boeing's commercial unit, Stephanie Pope, told workers that the company offered all it could given its mounting debt pile, which topped $60 billion at the end of June. Boeing shares are down in off-hours trading. We are exclusively reporting that allies of Donald Trump are discussing plans to end U.S. government control of mortgage finance giants Fannie Mae and Freddie Mac should he win the presidential election, seeing the privatization of the firms as a way to reduce the deficit and return money to taxpayers.

Fannie and Freddie operated with implicit government support since their inception, but have been under full government control for 16 years after a 2008 rescue. A top focus of talks by Trump confidants, including Larry Kudlow and John McEntee, is ensuring the companies will be well-capitalized so as not to pose a risk to the U.S. housing market in which they purchase and securitize a huge portion of residential and commercial loans. Bankers estimate the government's stakes in the firms could be valued at hundreds of billions of dollars.

Opponents of privatization have said it would decrease access to credit for homebuyers and increase taxpayer risk. A Trump campaign spokeswoman said the former president has, quote, never said anything about this throughout the campaign. Meanwhile, in a fresh move to court working-class voters, Trump is pitching the elimination of federal taxes on overtime pay, saying the policy would encourage people to work more and help employers to attract talent. It is the latest tax proposal from the former president, who's called to extend his expiring tax cuts, end taxes on tips,

eliminate taxes on social security benefits, create a deduction for newborn expenses, and offer a special tax rate for domestic manufacturers. Cuts that exceed $6 trillion over the next decade. And in market's news, Adobe shares have slumped in off-hours trading after the software maker guided for lower-than-expected earnings for the fourth quarter, and a preliminary reading of September consumer sentiment is due this morning, with the 10 a.m. Eastern Time report expected to show an uptick since the end of August. Coming up, Ukraine faces some tough choices in its war with Russia, and the U.S. military

tries to counter Islamist militants in West Africa with Russia, and the U.S. military tries to counter Islamist militants in West Africa with a smaller footprint. We've got those stories after the break. I'm not going back to university to be your friend. I'm going so I can get Uber One for students. It saves you on Uber and Uber Eats. I'm there for $0 delivery fee on cheeseburgers, up to 5% off smoothies and 5% Uber cash back on rides. Just to be clear, I'm there for savings, not whatever you think university is for. Get Uber One for students, a membership to save on Uber and Uber Eats. With deals this good, everyone wants to be a student. Join for just $4.99 a month. Savings may vary. Eligibility and member terms apply.

Let's get an update now from Ukraine to Kappa week in which the country launched a major drone attack on Moscow, had its future discussed on the U.S. presidential debate stage, and finds itself being pressed by Western officials now to spell out realistic war goals as opinion polls show growing Ukrainian support for negotiating with Russia to achieve peace. Well here to help us make sense of those many dynamics, I'm joined by Wall Street Journal Ukraine Bureau Chief James Marson in Kiev. James, let's start with a quick update first on the latest goings on in the war proper. Who's kind of got momentum at the moment, if we can say?

Well, the war at the moment is happening in a kind of split screen. You've got the Ukrainians trying to make advances up in the Kursk region of Russia. They went across the border in August, surprised the Russians, quickly took a whole bunch of territory, about 500 square miles. Though, after that initial much publicized invasion, not much more territorial gains since then? Peter That's right. So the Russians managed to largely stop the Ukrainian advance. And in the past couple of days, they've launched the first really successful counterattack

where they've managed to take back a little bit of territory. But the main battlefront of the war at the moment remains eastern Ukraine. The main Russian offensive at the moment is towards a town called Pokrovsk, which is a real logistics hub for the Ukrainians to supply the rest of the front in the east. The advance has been slow, but this is where Russia really has their momentum at the moment. Meanwhile, James, in the skies, we've got Ukraine making headlines this week by taking the war deep inside Russian territory, launching a massive drone assault that actually closed multiple airports in Moscow temporarily. Obviously some psychological warfare at play there too, but that too is going in both directions,

I guess. That's right. They want to make sure that Russians, Russian officials, Russian population understand that this isn't just a faraway war in another land, that this is a war that's also involving Russia. At the same time, the Russians are launching big airstrikes of their own. They have significantly more missiles and more drones, which they're able to launch on a nightly basis against Ukrainian cities. So it's taking a heavy toll on civilians as well.

A heavy toll on civilians, James, and potentially on Ukrainian energy infrastructure. We've heard leading Western officials worrying that if these attacks from Russia continue over the winter in particular, that could force a massive flight of Ukrainians from their homes in the coming months. And maybe that's a good jumping off point to talk more about sort of outside opinion about this war. We reported Wednesday the US now is weighing a loosening of restrictions on Ukraine's use of Western-made weaponry, something that Kiev has long been seeking, right?

That's right. So far, the West has allowed the Ukraine to use them inside Ukraine's borders, but not in Russia. And the Ukrainians say that's really hampered their efforts to slow down Russian attacks. These longer-range missiles will be able to target things like logistics hubs, command posts, air bases, ammunition stores, air defense systems, all these kinds of things that facilitate the Russian war in Ukraine. And being able to strike them will obviously push back the Russian logistical support.

It'll also have the effect of pushing back aircraft, attack helicopters that are used in support of troops on the front line. So there's a big impact that this can have. Though Ukraine would need enough of all those weapons to really utilize them to their full potential, something it says isn't the case at the moment. big impact that this can have. Though Ukraine would need enough of all those weapons to really utilize them to their full potential, something it says isn't the case at the moment. A reminder there are so many caveats we have to keep in mind here. Well, I think there's one thing that's been clear for a long time is that for Ukraine

to achieve its stated goal of pushing Russian forces out of all of the internationally recognized territory of Ukraine, best possibility on the battlefield to defend itself and potentially take territory back in the future, but also to put Ukraine in the strongest possible negotiating position if we ever get to the stage of some kind of talks on a ceasefire, some kind of peace deal. Right. So Western partners want that. We understand Ukraine for its part sees the occupation of Russian territory in Kursk as a tool as well ahead of potential peace talks.

And there are other factors here too. Absolutely. So what we're seeing domestically within Ukraine, there is certainly an element of people getting exhausted by the war. And we've seen an incremental growth in people who are interested in Ukraine exploring negotiations with Moscow.

At the same time, what you're seeing is that the number of people who want Ukraine to continue fighting until it gets back to its internationally recognized borders is still just above half. And then there's also the international situation that you have to bear in mind. The most important thing, of course, is the US presidential election. In November, we had the debate this week. We saw a former President Trump when he was asked if he wanted Ukraine to win the war, he said that he wanted the war to end. So he didn't quite give a direct answer to that.

Now of course that concerns Ukrainians. They worry about Trump trying to negotiate some kind of deal with the Russians that Ukraine might not be happy with. He may want to cut support to Ukraine and that kind of thing. But there's also another way of looking at it. What the Ukrainians say is the best way to get a deal with the Russians is to weaken them to show them that they can't win, and then they'll be forced to make peace. I've been speaking to Wall Street Journal Ukraine Bureau Chief James Marson in Kiev.

James, thank you so much as always. Pleasure any time. And finally, in an update from another conflict-riddled part of the world, Islamist militants have been wreaking havoc across West Africa's Sahel region for years, causing tens of thousands of deaths since 2017. And after being evicted from its counter-terrorism stronghold in Niger this summer, the United States military has been trying to regroup its forces so it can continue efforts to stop their march. The Journal's Africa correspondent Michael Phillips has the exclusive on the Pentagon's

efforts to patch together a backup counterinsurgency plan. The U.S. is unable now, in the wake of military coups, to work in the hardest hit West African countries which are Mali, Burkina Faso, and Niger. So having had to withdraw forces from those countries, they're not looking for other countries sort of around the perimeter from which they could establish a defensive wall, basically. So they're talking to Benin, and they've put some air assets there as well as a special forces team. They have a special forces team in Ivory Coast. They're in talks with Chad about possibly resuming tighter U.S. military relations and

security systems. So they want to sort of build a perimeter wall and try to contain Al-Qaeda and Islamic State inside the core of Western Africa. And that's it for What's News for Friday morning. Today's show was produced by Daniel Bach with supervising producer Christina Rocca and I'm Luke Vargas for The Wall Street Journal. We will be back tonight with a new show. Otherwise, have a great weekend and thanks for listening.