With only days left for Ford, General Motors and Stellantis to reach new contract agreements with the United Auto Workers or face a potential strike, auto dealerships are bracing themselves for the impacts of what will happen if the productions lines stop rolling.

Kunes Auto Group, which operates more than 40 dealerships in the Midwest, including Ford, GM and Stellantis stores, has been preparing for a strike “for a little while now,” according to COO Scott Kunes.

Negotiations are ongoing, and UAW President Shawn Fain has vowed to keep them open around the clock, but Kunes said “we do have to prepare for all three to be striking at the end of this week.”

Kunes told FOX Business dealerships learned a lot from the supply shortages that occurred during the pandemic. His group has been working to shore up both vehicle and parts inventories in case manufacturers shut down, which the UAW says will happen to any automaker that does not have a contract in place by the deadline of 11:59 p.m. Thursday.

UAW STRIKE THREAT: EXPERTS WEIGH IN ON LIKELIHOOD OF STRIKES AT FORD, GM, STELLANTIS

Estimates show a strike against all the Big Three would result in 100,000 fewer vehicles each week, which Kunes called “a substantial amount.” He said used car prices, which soared during the pandemic, had begun to normalize, but prices have risen significantly in recent weeks.

“Typically as we start to enter this season, these winter months, we would see a softer used car market,” Kunes said. “But we are seeing a pretty strong used car market as dealers prepare for another shortage of inventory because that was really a big thing during the supply chain crisis, is the dealers that were typically heavy new car dealers did have to turn to the used car market in order to keep their shelves full.”

New car prices are rising, too. Kunes said his group is already seeing locator services and other dealers asking over MSRP for certain models again.

Although the supply chain issues that plagued the U.S. auto industry due to COVID-19 have eased in the past few years, Kunes said production still is not close to what the industry saw pre-pandemic. If inventory dries up, it can be devastating to dealerships’ operations, their communities and the consumer.

“We talk about that a lot — that nothing happens until we sell a car,” Kunes said, noting that dealerships “rely heavily on the sales departments.”

GM MAKES ‘INSULTING PROPOSAL’ AHEAD OF AUTOWORKER DEADLINE, UAW PRESIDENT SAYS

He explained that dealerships have fixed operations in terms of their service and parts departments, but those are sustained by customers returning after a purchase. “So really, the cornerstone of the whole business is selling that new vehicle, and so losing that is a scary proposition,” he said.

Kunes recalls the 2019 strike against GM well, and says the manufacturer has never really been able to catch up and recover when it comes to inventory. He largely attributes that strike to Toyota overtaking GM as the leading auto manufacturer in the U.S. a few years ago.

“A lot of brand loyalty can really get eroded when something like this happens,” Kunes said. “Not only that, GM estimates that their last strike cost them almost $3 billion. Estimates are showing that this one could be $5 billion every 10 days if all three automakers’ [workers] strike. So it’s a massive thing not just for car dealers and automakers, but for the U.S. economy in general.”

GET FOX BUSINESS ON THE GO BY CLICKING HERE

Kunes says at this point, it appears a strike is likely to happen, because both sides are negotiating from positions of power right now. The automakers have seen record profits and are stronger than they have ever been, while the UAW is likely looking at the Teamster’s success in negotiations with UPS as setting a pretty substantial precedent.

“What’s interesting and what’s a little scary is that with both parties being in a position of power,” he said, the question is, “which one has the bigger chip stack?”

Read More 

Instacart is going public more than 10 years after launching in California and is hoping Wall Street will appreciate its goal to bring “the grocery industry online and help make grocery shopping effortless.”

The San Francisco-based company filed paperwork Monday with the U.S. Securities and Exchange Commission (SEC), estimating that its stock price will be between $26 and $28 per share, valuing the company between $8.6 billion to $9.3 billion.

That’s well below the $30+ billion valuation it gave itself in 2021. The company intended to go public last year but pulled plans to do so, citing tumultuous market conditions, according to the Wall Street Journal.

INSTACART CUTS INTERNAL VALUATION ANOTHER 20%: REPORT

The company was founded in San Francisco in 2012. It started delivering groceries to users in the Bay Area but within two years it expanded to 10 major cities around the nation, including New York City and Portland, Oregon. By 2017, it expanded across North America.

Today, it competes alongside companies like Shipt and FreshDirect, which also partner with various retailers to deliver food to customers’ doorsteps. Amazon and Walmart are larger rivals.

Despite its rivals, the company says it is the leading grocery technology partner to more than 1,400 retail banners. Those retailers, according to Instacart, account for more than 85% of the U.S. grocery market.

CEO Fidji Simo said the company powers “tens of billions of dollars in annual sales for retailers, which makes Instacart the leading grocery technology company in North America.”

“We have demonstrated our ability to help our retail partners drive strong growth and stay competitive in a complex and increasingly digital industry,” Simo said in a letter, which was made public in an SEC filing.

Instacart is a mobile app that lets users grocery shop directly from their phone app. It crowdsources personal shoppers who then deliver the food from stores in less than an hour, according to the company. 

INSTACART FILES CONFIDENTIALLY FOR IPO

In 2022, the company launched a revamped version of its subscription service, Instacart+, which costs $9.99 per month or $99 per year. With this service, previously known as Instacart Express, the company boasted that users can get free delivery on orders over $35, 5% credit back on all eligible pickup orders and reduced service fees. They can also share their subscription with their household.

In the fiscal year ending June 30, Instacart completed 263 million orders with a gross transaction value of $29.4 billion, according to an SEC filing.

The chief executive also noted that it has confidence in the company moving forward, given that a “massive digital transformation is underway in the grocery industry.”

GET FOX BUSINESS ON THE GO BY CLICKING HERE

“Grocery is the largest retail category and represents a $1.1 trillion industry in the United States alone. But only 12% of grocery sales are made online today,” Simo wrote. Over time, though, online penetration could even double or more.

Simo doesn’t see this replacing in-store grocery shopping but rather aiding a shopper’s experience. 

“We believe the future of grocery won’t be about choosing between shopping online and in-store. Most of us are going to do both. So we want to create a truly omni-channel experience that brings the best of the online shopping experience to physical stores, and vice versa,” she added.

When it goes public, the company will list on the Nasdaq Global Select Market under the symbol “CART.”

Read More 

The recent Republican presidential debate did little to allay the growing concerns of many GOP voters about the lack of serious conversation among party leaders regarding climate change. When asked about it, the candidates largely bickered among themselves and trotted out rehearsed talking points. Developing a coherent policy framework for addressing climate change will strengthen our economy, bolster our national security, and help the GOP at the ballot box. 

While the left often engages in climate hysteria, climate denial is equally unproductive. We believe the extremes present a false choice for America. Although we do not believe the rise of CO2 emissions is an immediate worldwide crisis, it is a potential future crisis. Sea level rise stands out as one notable example. Estimates of potential sea level rise caused by global warming range from a few feet to over 200 feet, a level that adaptation measures alone cannot handle. A recent study estimated the global economic harm caused by sea level rise in a “business as usual” scenario could exceed $14.2 trillion by the end of the century, a devastating burden in both human and economic terms.

We propose a climate policy that seeks to mitigate these risks while promoting American energy security, national security, and economic competitiveness. We argue that putting America first actually puts climate first. For example, the United States economy is three times more carbon efficient than China’s and four times as efficient as Russia’s. It is past time to name China as the world’s leading polluter and demand change from the Chinese Communist Party (CCP). Concurrently, the U.S. can boost its economic and national interests while continuing to slash its global emissions. 

OIL PRICES HIT NINE-MONTH HIGH AS SUPPLY CONCERNS MOUNT

Our climate policy agenda rests on three pillars: promoting advanced low-carbon energy, domestic mining and manufacturing, and clean U.S. fossil fuel extraction.

We must further develop cheap low-carbon wind, solar and nuclear power aided by federal support, including permitting reform. Wind and solar power costs have dropped precipitously over the past decade to the point where they are less expensive than fossil fuel-based power, depending on location. A more sophisticated high-voltage direct current (HVDC) grid system would facilitate higher concentrations of renewable energy into our power mix — and lower consumer costs even more. Increasing our energy storage capability will enable further scaling of these resources.

Nuclear energy, especially small modular reactors, offers highly reliable clean energy production at scale and is indispensable to a low-carbon energy portfolio. Permitting reform is essential to removing the roadblocks to expanding and modernizing our nuclear fleet, as well as adding more solar and wind power to the grid.

The U.S. should pass a “Future Energy Act” modeled on the “Chips Act” — spurring domestic mining and processing of critical minerals and rare earth elements (REE). These materials are essential to scaling manufacturing of solar, battery and wind technologies. At the same time, America can work with allies, such as Australia and Denmark, that have significant REE deposits. 

Failure to mine and manufacture at home will leave us needlessly dependent on the CCP, since China produces most REE and refines 90 percent of them. China also emits more than the entire developed world; the U.S. has reduced more emissions than the entire developed world. The U.S. must push China to decrease CO2 pollution to low U.S. levels immediately, preferably on a GDP parity basis. Appropriate trade sanctions, tariffs and other tools should be used to bring China into compliance.

Fossil fuels are indispensable for the foreseeable future. As the energy transition proceeds, we must remember that America extracts, refines and employs fossil fuels more cleanly than anyone. Inhibiting domestic production does not lower international fossil demand — it only increases our reliance on OPEC at a higher emissions cost to fill the gap while our security and prosperity suffer. 

There are two viable pathways for the U.S. to offset CO2 emissions from fossil fuels: carbon sequestration and storage (CCS) and direct air capture and storage (DACS).

CCS, which can be deployed on a wide variety of fossil fuel emitting sources, is commercially available and will become cheaper with scale. DACS is even more intriguing because it enables CO2 to be extracted directly from the atmosphere without connecting to a fossil fuel source. Both technologies should enjoy strong federal support, including tax incentives and federal research grants.

GET FOX BUSINESS ON THE GO BY CLICKING HERE

This three-pronged policy agenda addresses the risk of rising CO2 emissions while advancing our short- and long-term national interests. At the next Republican debate on September 27th, we hope the candidates give better answers about how conservatives can protect both America and our planet’s future.

Robert O’Brien served as the 27th US National Security Advisor from 2019-2021. Neil Auerbach is founder and CEO of Hudson Sustainable Group, an investor in sustainable energy, and is a former partner of Goldman Sachs. Neil is a senior advisor for the American Conservation Coalition.

Read More 

U.S. home prices across the country are surging even with the astronomical rise in mortgage rates, putting ownership out of reach for millions of Americans. 

The spike in interest rates – which topped 7% last year for the first time in two decades – has created a “golden handcuff” effect in the housing market: Sellers who locked in a record-low mortgage rate of 3% or less during the pandemic began have been reluctant to sell and take on a more expensive option, leaving few options for eager would-be buyers.

The number of available homes on the market at the end of August was down by more than 9% from the same time last year and down a stunning 45% from the typical amount before the pandemic began in early 2020, according to a recent report from Realtor.com.

THE 4 US CITIES FACING BIGGEST HOUSING SHORTAGE

But there’s another factor driving home prices higher, according to Barclays economists; baby boomers. In a recent analyst note, titled “Blame the Boomers,” the strategists argued the aging of America is spurring more household formation.

“The US housing sector is on the upswing again, even with mortgage rates at multi-decade highs,” the strategists, led by Jonathan Millar, wrote. “Although much has been attributed to shortages of existing properties and mortgage lock-in effects, we think strong demand is a symptom of the aging population.” 

It may seem “paradoxical,” because an aging population tends to require fewer homes. But that’s not the case with the baby boomers, who are currently between the ages of 57 and 75. Boomers are reaching retirement age and forming new households, either due to divorce or death, but they aren’t freeing up existing supply.

The formation of households drives demand for both homeownership and rentals. Formation refers to the change in the number of households – of persons living under one roof – from one year to the next. It often happens when young people move out of their parents’ homes, or when a couple divorces.

HOUSING AFFORDABILITY PLUMMETS TO LOWEST LEVEL SINCE 2007 AS PRICES JUMP

“While it is likely true that older people tend to prefer smaller housing units, it is not true that an older population requires fewer housing units,” Millar said. 

Although there have been “notable” increases in demand from the younger population, nearly all additional demand is explained by the aging population and significant increases in households, according to the analysis. 

Barclays anticipates the imbalance between excessive demand among boomers and limited supply to last for several years. 

GET FOX BUSINESS ON THE GO BY CLICKING HERE

“Data suggest that demographics are likely to support demand for the foreseeable future, consistent with annual household formation of around 1.3mn units through the end of the decade,” the Barclays analysts said. “Meanwhile, the accumulated shortage of new housing units remains considerable, putting upward pressure on house prices and rents, thereby encouraging additional construction.” 

Read More