WSJ What’s News - Dockworkers Bring Ports From Maine to Texas to a Standstill

Episode Date: October 1, 2024

A.M. Edition for Oct. 1. Thousands of workers at East Coast and Gulf Coast ports launch a strike overnight. The WSJ’s Paul Berger reports on the ground. Plus, Israel sends troops into Lebanon in the first big incursion in two decades. And, WSJ Heard on the Street columnist Jon Sindreu says engine problems are causing headaches in the aviation industry–especially for Airbus, whose airplane of the future is struggling to take off. Kate Bullivant hosts. Sign up for the WSJ’s free What’s News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

How do airplanes fly? What's in this box? What does this thing do? Kids are curious about everything, including guns. Learn how to store your guns securely and make your home safer at nfamilyfire.org. Brought to you by N Family Fire, Brady and the Ad Council. Dock workers walk off the job shutting down ports from Maine to Texas. Plus Israel sends troops into Lebanon and why Airbus is struggling to get its most promising plane off the ground. There's a lot of money that was based on this is a new plane that does things other planes

cannot do and it will even be able to do more things in the future. But of course if it doesn't fly, then you're in trouble. It's Tuesday, October 1st. I'm Kate Bulevant for the Wall Street Journal filling in for Luke Vargas. And here is the AM edition of What's News, the top headlines and business stories moving your world today. Dock workers across dozens of US ports have walked off the job, shutting down some of the country's main gateways for imports.

It's after midnight and we are officially on strike. That's Harold Daggett, head of the International Longshoremen's Association, speaking to striking workers last night. I'm so impressed seeing this out in front of them all right here at night. I'm so impressed seeing this out in front of them all right here at night. I pulled up in the car, I can't believe how many people are here. It's a good show and we're gonna keep this thing going every day in and out. We're gonna be on the news. They can't survive too long. According to a person familiar with the negotiations, the ILA is seeking a 77% wage increase over six

years as a condition to sit down to talks with maritime employers. Journal reporter Paul Berger was out reporting at the Port of New York in New Jersey last night. He told us the walkout throws up a big unknown just five weeks before the presidential election. No one knows what's going to happen next. There hasn't been a strike like this one at East Coast and Gulf Coast ports in almost 50 years. Retailers and manufacturers are going to be watching and hoping that the employers and the union

can come to a number that they can agree on so that they can sit down at their negotiating table and talk about other important issues such as the use of automation on the docks. In the meantime, dock workers here tell me they're going to stay out of work and continue picketing and the ports will remain closed. According to estimates by JP Morgan, the shutdown could cost the US economy up to $4.5 billion a day, though some of that would be recovered once normal operations resume. Israel has sent troops into Lebanon.

Its military launched what it called a limited operation in villages in southern Lebanon aimed at Hezbollah targets and infrastructure. Israel says the campaign's focus is to end nearly a year of attacks by the Iran-allied group, which have displaced around 60,000 residents of northern Israel. Today's move steps up fighting that Washington fears could turn into a broader war that could draw Iran further into the conflict. It also threatens to throw Lebanon deeper into crisis. Hundreds of thousands of people there have

already fled their homes following Israeli bombing and more than a thousand have been killed by the attacks that started in mid-September, according to Lebanese authorities. The Biden administration has been advising Israel to avoid a major ground invasion of Lebanon. However, according to US officials, the US and Israel reached an understanding before the offensive, which would see Israeli troops target Hezbollah military sites and then pull back. Here's State Department spokesperson Matthew Miller in Washington. We support Israel's right to defend itself against terrorism. That includes by bringing

brutal terrorists such as Hassan Nasrallah to justice. At the same time, we ultimately The Biden administration also warned Iran yesterday against retaliating for the killing of Hezbollah leader Hassan Nasrallah. It said it's sending more warplanes to the region to deter an attack by Tehran. CVS Health is conducting a strategic review of options for the company, including a possible break-up. According to our reporting, the review has been underway for weeks, though no decision is imminent and it's possible there won't be major changes in the business. In recent years, CVS has grown into a healthcare juggernaut, combining pharmacies, a benefits

manager, health insurer and health care clinics under its roof. However, it has cut its forecast several times in the past year and its shares have struggled. Yesterday we reported that hedge fund Glenview Capital Management met with the company to discuss how it can improve operations. A CVS spokesman said the company continuously explores ways to create shareholder value. Reuters earlier reported that CVS spokesman said the company continuously explores ways to create shareholder value. Reuters earlier reported that CVS had tapped bankers to explore options. A major oil producer from the United Arab Emirates has clinched a more than $13 billion deal for German chemical company Covestro.

After more than a year of talks, Abu Dhabi National Oil Company or Adnok agreed to the tie-up today. It's making a bet on chemicals to help it transform into a fully integrated energy company like ExxonMobil and other US majors. Its challenge in buying Covestro will be to revive slumping sales and profit amid underwhelming demand. Vestro will be to revive slumping sales and profit amid underwhelming demand. And in other news that could move markets, Stellantis is recalling over 150,000 of its US market plug-in hybrid Jeeps over a potential fire risk. The news comes a day after Stellantis warned of an increasingly tough car market, sending its shares sharply lower.

And we'll get the latest reading on the car market today, as most major automakers are scheduled to report results for the July to September quarter throughout the day. Industry forecasters expect U.S. sales to come in roughly flat, as high prices and borrowing costs are putting off some buyers. Also on deck today, Nike is set to report earnings after the closing bell. Coming up, Airbus' Airplane of the Future has the potential to revolutionise regional and short-haul travel. Instead, it's still grounded. That's after the break. consultant. You can get customized coverage for your business. Contact a licensed TD insurance advisor to learn more. Well, dock workers may have just walked off the job but at Boeing about 33,000 machinists are now in their third week of striking. That's halted production of

Boeing's best-selling jets and added to the company's list of problems. But as heard on the street columnist Johnson Dreho writes, it's not exactly clear skies for its rival Airbus either. Engine durability problems have hit its A220 plane hard, forcing airlines to service them much more often than anticipated. It's led to 15% of the jets worldwide being grounded, according to estimates from analytics firm IBA for August. Our Daniel Bach spoke to John about how

Airbus' big bet on the A220 has struggled to take off. What's going on here is that if you were theoretically able to fly this engine, say 20,000 times, what actually happens is that it's closer to like a quarter of that in some cases, which means you have to bring the aircraft to the shop. We are at a time where there's a shortage of engines, there's a shortage of airplanes,

there's a shortage of parts, and you might be waiting for months for your plane to be serviced. So when we're talking about engine issues here, is this actually a safety issue? No, no, it's about how often you take it to the shop, right? So it's about money and the inconvenience and not having the plane available. And what have you found about the actual issues with these engines?

In recent weeks, obviously, we've had A350s grounded for engine issues as well. This is not just about the A220, like the problems that affect this particular type of engine, which is built by Pratt & Whitney, which is owned by RTX, they affect the bigger plane that we, almost all of us, have flown on, which is the A320neo. And even the engines built by GE Aviation, they also are having some smaller durability problems. So everybody has problems. We knew that the new engine generations, because they are more based on trying to be fuel efficient rather than being resilient, they would have

more issues. So it's a question as well on, well, if we try to squeeze more and more fuel efficiency out of these engines and these planes, if the engines get more complex and they break more, what's the limit to this? Maybe prolonging the life of an old plane makes more sense is what we've seen recently, but it also means they will pollute more. So what do we do with that? There's many questions surrounding this. You mentioned this isn't only affecting the A220, but the plane was meant to be the future for a lot of airlines. It's a plane that was updating older single aisle planes for many airlines, and they bet big money lot of airlines. It's a plane that was updating older single-aisle planes for many airlines, and they bet big money on them too. Yeah, this plane was supposed to be

the coolest thing, right, that the aviation industry has produced. The people who fly on them love them because they're more comfortable, the pilots love them, they're more fuel efficient, they're quieter, and Airbus has put a lot of hopes into this plane, right? It's a big part of their future strategy. One of the ways they could go against Boeing in the future is that instead of updating the A320, which is their best-selling plane, they could just use this. They could make it a bit longer and then they could just pour all their money into building a new plane slightly above that and completely crush Boeing because Boeing is really weak in that market. The plane comes in two variants at the moment. The bigger variant is even opening up new markets. There's this startup airline in

the US called Breeze, which basically flies between regional airports that had been abandoned by other airlines. So there's a lot of money that was based on this is a new plane that does things other planes cannot do and it will even be able to do more things in the future. But of course, if it doesn't fly, then you're in trouble. For example, Cypress Airways, they only had two planes when they relaunched in 2017, and they said, well, we're going to get two A220s. Both of them have problems.

What do you do, right? When you're such a small airline, you've got crew on the ground, you're paying them, you have to pay insurance, you have to pay lease rates. It's a big issue. You talk about the small airlines. If you look at the reporting in your story, there's a chart that references bigger airlines as well. Air Canada, Delta, Korean Air.

If you have 15% of the planes grounded globally, that's a massive impact. Yeah, a lot of airlines are in a very tough position. So what then is the relationship with the engine manufacturer from Airbus? What are they trying to do to fix these issues? As I say, these engines are new whenever a new technology comes out. It's normal to have issues. So Pratt & Whitney are ready to deal with this and appease their customers and offer them solutions.

But ultimately, I think the issue is when you add the supply shortages we've had with all of these engines have issues with the aerospace industry already has a shortage of pilots right now. All of these compounds, there's just not enough parts, engines, aircraft, people to deal with this at the same time. John Cendreau is a journal herd on the street columnist. John, thanks for your time. Thank you. And that's it for What's News for Tuesday morning. Today's show was produced by Daniel Bach with supervising producer Christina Roca. And I'm Kate Bullivant for the Wall Street Journal filling in for Luke Vargas.

We'll be back tonight with a new show. Until then, thanks for listening.