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Pickets up in Winnipeg Postal workers are off the job in Winnipeg today while labour talks continue with Canada Post amid a series of rotating strikes. The Canadian Union of Postal Workers launched the first of its 24-hour walkouts having failed to strike a new deal with the post office after seven months of negotiations.
I'm not advocating a full-scale walkout, or taking sides in the dispute, but I do question the union's bargaining tactics: Rotating strikes against a postal service are a pointless exercise.
Union president Denis Lemelin said last night that the negotiating team will "evaluate the situation on a daily basis and determine our strike strategy based on developments at the bargaining table," so presumably tactics could change. He told reporters in Ottawa today that the next target will be Hamilton, Ont., beginning tonight and running through the weekend.
The purpose of a work stoppage is to halt production and pressure an employer to come to terms at the bargaining table.
Rotating strikes would be a strong tactic against a manufacturer - General Motors, just as an example, where actual vehicle production would be affected - but against Canada Post they're a minor inconvenience at best.
Yes, people will be affected somewhat, small businesses in particular. But in this age of the Internet, how many people really care about letters from home? This will probably to serve to push more businesses further online.
So already the union was in a weak position. Rotating work stoppages only drive home that point.
The union may have chosen that route to try to win public sympathy, but it puts little pressure on Canada Post.
As Winnipeg postal worker Michelle Fidler put it in an interview with The Canadian Press, rotating strikes "might make them go back to the table, but I think that they need to take us seriously. And I think the only way to do that is for the entire country to walk out."
U.S. jobless rate inches up What will it take to get Americans back to work?
The U.S. economy created just 54,000 jobs last month as the unemployment rate rose to 9.1 per cent from 9 per cent, the Labor Department said today.
That's a very weak showing for a country struggling to get millions of people back to work in the wake of the financial crisis and recession, and raises even more fears over the slowing U.S. economy.
"Signs of a cooling economy officially reached the job market today," said economist Alistair Bentley of Toronto-Dominion Bank.
"A paltry 54,000 increase in non-farm payrolls in May represents a marked slowdown from the 200,000 plus trend pace seen during the past three months. The question now is whether slowing job growth in May is temporary or a lasting setback. Recent initial jobless claims remain stuck above the 400,000 mark, which points to fairly lackluster job growth. However, as long as the recent declines in gas prices are sustained and manufacturing disruptions created by Japan's earthquake fade, we remain cautiously optimistic that job growth will move back above the 200K mark during the second half of 2011."
Almost 14 million Americans are now without jobs, and long-term unemployment remains ugly. More than 45 per cent of jobless Americans have been out of work for more than six months. That's more than 6 million people.
"The sole bright spot in the report is that the index of aggregate weekly hours managed to inch higher, which, coupled with a sizeable gain the prior month, has put it on track for a strong (and frankly hard-to-believe) 3.7 per cent annualized rate in Q2," said senior economist Sal Guatieri of BMO Nesbitt Burns. "Look's like productivity will take a good haircut."
Companies accounted for 83,000 new jobs in May - the slowest pace in about a year - while employment in the public sector slipped by 29,000. That's the lastest in a string of monthly results showing governments cutting back.
The government cuts are a sign of more to come at the federal level in the years ahead, Mr. Guatieri said.
U.S. Labor Secretary Hilda Solis called on states and municipalities to take heed as they try to bring their budgets into line.
"We have lost 73,000 government jobs in the last three months," she said.
"As states and localities make budget decisions, they should cut judiciously because their decisions have an impact on jobs and the direction of our economy ... While I would have liked to have seen stronger growth in May, we are still on the right trajectory. With smart investments and the determination of the American people, we will continue on our path toward a full recovery."
The key question now, he added, is whether it's a temporary pause by the private sector related to uncertainty over the recovery, or whether companies are "hunkering down" for a longer stay. While he believes it's the former, the next couple of months will be the telling factor.
"Sluggish job numbers in May highlight that the U.S. economic recovery is fragile, and only has a limited capacity to absorb shocks," added TD's Mr. Bentley. "This is distressing given the evolving challenges in Europe, and its potential ramifications for global financial markets. Also, if oil prices rebound strongly it would materially slow the recovery."
Competition watchdog clears exchange deal Canada's Competition Commissioner has cleared the proposed merger of TMX Group Inc. and London Stock Exchange Group PLC.
The operators of the Toronto Stock Exchange and the London bourse said in a statement today that the watchdog, Melanie Aitken, issued a "no action letter," which confirms that the deal won't be challenged.
The deal still has to clear the Industry Minister and shareholders, amid a competingt, hostile bid by several Canadian banks and pension funds.
- Boyd Erman: TMX and LSE face a high bar for vote win
- Read our complete coverage of the battle for TMX
Chrysler payment calculated The final payment to the Ontario and federal governments for the bailout of Chrysler LLC will be about $129-million (U.S.), based on a deal Chrysler's parent company made to buy out the remaining interest the U.S. government held in the no. 3 Detroit auto maker, The Globe and Mail's Greg Keenan reports today.
Fiat SpA will pay $500-million for the 6.6 per cent stake the U.S. government in a deal announced late yesterday, an amount that puts a value of $129-million on the 1.7 per cent holding in Chrysler owned jointly by Ottawa and Ontario.
RIM shares sink Research In Motion Ltd. shares sank today, falling below $40 (U.S.) in New York for the first time since March 2009, amid analysts reports that take a dim view of the BlackBerry maker's stock price.
UBS analysts Amitabh Passi and Phillip Huang, for example, cut their 12-month price target by $15.
"The stock appears cheap ... but risks abound," analysts Amitabh Passi and Phillip Huang said as they cut their target to $45 (U.S.) from $60 and held their rating unchanged at "neutral." They also trimmed their revenue estimates, referring to the BlackBerry maker by its U.S. stock symbol, RIMM.
"On several metrics, especially PE and EBITDA, RIMM stock appears cheap," the analysts said in their research report.
"However, with limited visibility on earnings power, increasing competitive threats, an un-compelling product refresh, and a management structure that, in our view, now appears sub-optimal (co-chairmen, who are co-CEOs, with one of the CEOs the CMO as well) we still foresee risks investing in RIMM stock at these levels."
Saying that "value is in the eye of the beholder," they noted the recent troubles of Nokia Corp. , the world's biggest cellphone maker, whose stock plunged this week after it cut its sales outlook, pulling down RIM shares as well.
Both Nokia and RIM are under pressure in the smart phone market from the popularity of the iPhone by Apple Inc. and devices that use the Android system from Google Inc. .
"While Nokia's challenges appear more cumbersome than RIMM's, what is evident in the mobile industry is that platform transitions can be difficult and profitability transitions (from peak to trough) quite dramatic and sudden," the UBS analysts said.
"We believe RIMM risks a similar outcome (perhaps with a longer tail given its lucrative services revenue stream) unless it makes bold moves and executes on the migration to its next generation QNX operating system flawlessly."
The analysts lay out their "bull/bear" case, and suggest the stock could surge higher "if RIMM delivers its new products on time, manages the transition to QNX flawlessly, and continues to drive growth successfully."
Sterne Agee analyst Shaw Wu cut RIM's target to $44 from $52, saying that "we believe the risk is that EPS for the next two years could end up flat-to-down, meaning Street estimates, which have already been cut significantly, may need to come down further," according to Forbes.
"We did some additional analysis on the potential impact on [Apple's] iCloud on the competitive landscape and believe RIMM could see collateral damage," he added in the note. "In addition, we see additional pressure from future offerings from [Google] and [Amazon]."
- Investors to RIM: Tell us a story
- Nokia bloodied in smart phone dogfight
- Nokia warns of weaker sales, sales plummet
Greece awaits details As the Greek masses await details of a new austerity program, they've taken to the streets again today, blocking access to the finance ministry offices in Athens.
Union protesters called for a general strike - given the number of sproradic demonstrations, they might as well have a general strike - as officials from the European Union, the International Monetary Fund and the European Central Bank completed their study of the country's reform measures.
Greece's finance ministry said in a statement that the talks ended on a strong note, but there were no details, leaving markets in the dark.
"The discussions of the Greek government with the representatives of the EC, the ECB and the IMF concluded today positively," the finance ministry said in a statement.
"The deliberations related to both the progress made so far in the Economic Policy Programme, as well as to the Medium Term Fiscal Strategy, the necessary measures to achieve the 2011 deficit target, the privatizations and asset management programme, and the structural reforms to restore growth and competitiveness.
"The Greek government has already made in the past few weeks public announcements on these issues reaffirming its commitment with specific decisions. Relevant texts will be finalized in the coming days and will be submitted to Parliament following discussion and approval by the Council of Ministers."
The measures are key to further funds for Athens, and are expected to be extremely harsh as Greece grapples with a debt crisis that has shaken Europe. Markets increasingly believe that Greece will be forced to restructure its debts.
"It is now priced into markets that Greece is failing on many fronts, but that the EU will form a deal to provide new aid; bondholders will commit to some form of voluntary rollover (potentially along the lines of the Vienna Initiative), thereby avoiding a default," said currency strategist Camilla Sutton of Scotia Capital.
"Should these plans come to fruition it would mean that by the end of June the IMF will be prepared to provide the next tranche of funding and the near-term Greek crisis will have passed (leaving still significant medium term hurdles ahead). There remains tremendous uncertainty; however for now markets appear to have gained some comfort with most of it."
- Greece to present new austerity plan
- EU kicking Greece while its down
- Greek protesters block finance ministry
Markets sink Global stock markets are sinking in the wake of the hugely disappointing U.S. jobs report.
Tokyo's benchmark Nikkei slipped 0.7 per cent, and Hong Kong's Hang Seng 1.3 per cent, though they closed before the report was released.
In Europe, London's FTSE 100, Germany's DAX and the Paris CAC 40 were down by between 0.3 per cent and 0.8 per cent by about 8:45 a.m. ET.
Dow Jones industrial average and S&P 500 also slipped.
Inflationary pressure takes on new meaning They've got their economic priorities somewhat skewed in Argentina: They're targeting economists rather than inflation.
The Reuters news agency reports that the government has fined at least nine consulting groups some $120,000 (U.S.) each over their estimates of inflation. Private economists, according to the report, are appealing to the government for what they say is the potential for penalties if they estimate increases in consumer prices at more than double the government's official rate.
They believe the government wants them to keep their mouths shut as it heads toward an election.
Reuters says the official inflation rate through April was 9.7 per cent, while private estimates put it above 20 per cent. (Memo to Argentina's price czar Guillermo Moreno: Go after Reuters, not me.)
In Economy Lab today
There's been a lot of angst in Canada about companies shipping jobs and production offshore, particularly as the loonie has climbed to par and beyond in the past decade. But a new study by the Department of Foreign Affairs and International Trade suggests that concern may be misplaced, Barrie McKenna reports.
In International Business today
As Etihad Airways blazes a new Silk Road for the global aviation industry, the Persian Gulf carrier warns that Canada is missing out, Globe and Mail transportation reporter Brent Jang writes.
In Personal Finance today
Many homeowners believe their policies will cover them for any and all damages, but the reality can be an expensive surprise.
Students will shop around for fancy dresses and limos, but what about paying for what comes after graduation?
Understand what you need to have versus what you would like to have in your portfolio.
From today's Report on Business