Railroad Strike would take huge toll on the Supply Chain

Revelations 18:23 ‘For the merchants were the great men of the earth; for by thy sorceries were all nations deceived.’

Important Takeaways:

  • Brace for Economic Shockwaves and Empty Shelves as Railroad Strike and New Energy Spike Could Hit Hard
  • More than 100,000 railroad workers are threatening to walk off their jobs this week over worker pay, health care, and other issues.
  • Unions are now negotiating with the nation’s biggest freight railroads, including Union Pacific, CSX, Norfolk Southern, BNSF, and Kansas City Southern, and have announced eight of the 13 tentative agreements needed to avert a strike.
  • The deals that have been announced so far have closely followed the Presidential Emergency Board’s recommendations that called for 24% raises over five years, $5,000 in bonuses and one additional paid leave day a year. But the two biggest unions representing conductors and engineers have been holding out because they want the railroads to go beyond those recommendations and address some of their concerns about strict attendance policies and working conditions.
  • If a deal is not made, then passenger service, supply chains, and jobs could be affected, costing the economy an estimated $2 billion per day.
  • Bloomberg explains the impact on the supply chain would be huge because trains transport 28% of all U.S. freight.

Read the original article by clicking here.

What you need to know about the coronavirus right now

Summer cancelled?

Across the continent, from Portugal’s Algarve to the islands of Greece, beaches are deserted. There are no visitors at the Eiffel Tower or the Louvre, Edinburgh’s August festivals have been cancelled and the Netherlands’ flower fields are closed.

The big question facing Europe’s tourism industry, however, is whether it can still salvage summer.

“We have to endure the situation and get some revenue this summer,” said Goncalo Rebelo de Almeida, board member of Portuguese hotel chain Vila Gale. “I hope … that will at least allow us to pay fixed costs. And then we will bet on it returning to normal in 2021.”

In the meantime, calls are growing for economic support to haul hotels, restaurants, tour operators, travel agencies and cruise companies back from collapse.

Workplace wearables

Workers in the port of Antwerp will next month begin testing wristbands developed by a local technology company to reinforce social distancing as the world tries to emerge from the COVID-19 pandemic.

Tech firm Rombit already supplies wearables resembling a sports watch that can warn workers of workplace dangers – newly installed software will now also give warning signals if workers come for example within 1.5 metres (five feet) of each other.

The developers believe it also could offer contact-tracing if someone becomes infected with the coronavirus. Such tools could be useful in helping companies restart work safely.

The vaccine race

An Oxford University team is launching this week trials in humans of a potential COVID-19 vaccine and say a million doses of it are being manufactured for availability by September – even before trials prove whether the shot is effective.

The experimental product – called “ChAdOx1 nCoV-19” – is one of at least 70 potential COVID-19 candidate shots under development by biotech and research teams around the world. At least five of those are in preliminary testing in people.

Job killer

Thursday’s weekly U.S. jobless claims report will likely show that a record 26 million Americans sought unemployment benefits over the last five weeks.

Put another way, that would mean that all the jobs created during the longest employment boom in U.S. history have been wiped out in about a month by the impact of coronavirus.

Ramadan congregational prayers

As the Muslim holy month of Ramadan starts this week, Pakistani doctors warned the government and clerics that it was ill-advised to allow prayer congregations at mosques.

Pakistan lifted precautionary restrictions on congregational prayers on Saturday, after several clashes between police and worshippers and with clerics rejecting such limitations.

The question now is whether other Muslim nations will also relent and relax bans on congregations in the light of pressure from local religious figures.

Sports calendar thins

Another day, another major sporting event bites the dust. The 2020 St. Andrews Trophy, scheduled to take place in Wales from July 23-24, has been cancelled due to the outbreak, the R&A and the European Golf Association has confirmed.

The tournament, contested between amateur golfers representing Britain & Ireland and Europe, was first staged in 1956 and has been held every two years since.

(Compiled by Mark John and Karishma Singh; Editing by Emelia Sithole-Matarise)

Hundreds of U.S. flights canceled after air traffic coronavirus cases

By David Shepardson

WASHINGTON (Reuters) – U.S. airlines have canceled hundreds of flights at three major U.S. airports this week after a series of coronavirus cases involving air traffic control personnel.

The U.S. Federal Aviation Administration (FAA) temporarily closed the air traffic control tower at John F. Kennedy Airport in New York early Friday before reopening it around 11:30 a.m. ET (1530 GMT). The FAA also shuttered part of the Indianapolis Air Route Traffic Control Center for cleaning after workers tested positive for the coronavirus.

The FAA said a technician at JFK had tested positive and air traffic controllers had been operating earlier from an alternate location on airport property.

American Airlines Group Inc <AAL.O> said it canceled 20 of its 68 scheduled departures from JFK on Friday due to a reduced incoming arrival rate after traffic control was shifted to the other location.

In Indiana, after an air traffic control supervisor tested positive, the FAA vacated work areas at the Indianapolis Air Route Traffic Control and flights through the airspace handled by those sectors were rerouted.

Air traffic control towers remain closed at Chicago Midway and Las Vegas airports after other coronavirus cases were reported earlier this week.

Airlines have canceled more than 700 flights on Thursday and Friday at Las Vegas and more than 800 over the last two days at Midway, according to flightaware.com.

Southwest Airlines <LUV.N> has resumed operations in Chicago after canceling more than 200 flights on Thursday. The airline said it had also canceled another 150 flights at Chicago and more than 165 flights at Las Vegas airport on Friday.

On Thursday, the FAA placed a temporary flight restriction over Midway to allow only commercial flights and other authorized flights after a number of local private pilots began using the airport for touch-and-go landing practice.

(Reporting by David Shepardson; Additional reporting by Tracy Rucinski; Editing by Bill Berkrot, Chris Reese and Richard Chang)

U.S. weekly jobless claims point to strong labor market

FILE PHOTO: People wait in line to attend TechFair LA, a technology job fair, in Los Angeles, California, U.S., January 26, 2017. REUTERS/Lucy Nicholson/File Photo

By Lucia Mutikani

WASHINGTON (Reuters) – The number of Americans filing applications for jobless benefits fell more than expected last week, pointing to sustained labor market strength that could further ease concerns about the economy’s health.

The report from the Labor Department on Thursday followed data last week showing employers hired the most workers in 10 months in December and increased wages for their workers.

Surveys showing steep declines in consumer and manufacturing activity in December had stoked fears that the economy was rapidly losing momentum.

“There are increasing risks and caution over the economic outlook in 2019, but jobless claims say the seas are calm and it looks to be smooth sailing for the economy for now,” said Chris Rupkey, chief economist at MUFG in New York.

Initial claims for state unemployment benefits fell 17,000 to a seasonally adjusted 216,000 for the week ended Jan. 5. Data for the prior week was revised up to show 2,000 more applications received than previously reported.

Economists polled by Reuters had forecast claims declining to 225,000 in the latest week. The Labor Department said only claims for Puerto Rico were estimated last week.

U.S. financial markets were little moved by the claims report.

Claims were boosted in the week ending Dec. 29 as workers furloughed because of a partial shutdown of the U.S. government applied for benefits. The federal government partially closed on Dec. 22 as President Donald Trump demanded that the U.S. Congress give him $5.7 billion this year to help build a wall on the U.S. border with Mexico.

The shutdown, which has affected a quarter of the government, including the Commerce Department, has left 800,000 employees furloughed or working without pay. Private contractors working for many government agencies are also without pay.


Claims by federal workers are reported separately and with a one-week lag. The number of federal employees filing for jobless benefits increased by 3,831 to 4,760 in the week ending Dec. 29. Furloughed federal government workers can submit claims for unemployment benefits, but payment would depend on whether Congress decides to pay their salaries retroactively.

The four-week moving average of initial claims, considered a better measure of labor market trends as it irons out week-to-week volatility, rose 2,500 to 221,750 last week.

The economy created 312,000 jobs in December. The unemployment rate rose two-tenths of a percentage point to 3.9 percent as some unemployed Americans piled into the labor market, confident of their job prospects.

While labor market strength has helped to calm fears that the economy, tighter financial market conditions and slowing global growth could make the Federal Reserve cautious about raising interest rates this year.

Minutes of the U.S. central bank’s Dec. 18-19 policy meeting published on Wednesday showed “many” officials were of the view that the Fed “could afford to be patient about further policy firming.”

The Fed has forecast two rate hikes this year. Fed Chairman Jerome Powell and several policymakers have said they would be patient and flexible in policy decisions this year.

Thursday’s claims report also showed the number of people receiving benefits after an initial week of aid fell 28,000 to 1.72 million for the week ended Dec. 29. The four-week moving average of the so-called continuing claims increased 15,250 to 1.72 million.

November’s wholesale inventories report from the Commerce Department’s Census Bureau, which was scheduled for release on Thursday, will not be published because of the government shutdown.

(Reporting by Lucia Mutikani; Editing by Paul Simao)

Why Caterpillar can’t keep up with a boom in demand

A worker pours molten iron into molds to form parts for Caterpillar Inc. and other industrial customers at Kirsh Foundry Inc. in Beaver Dam, Wisconsin, U.S., April 12, 2018. REUTERS/Timothy Aeppel

By Timothy Aeppel and Rajesh Kumar Singh

EAST PEORIA, Ill. (Reuters) – Orders for the mining machines and construction bulldozers made at this sprawling Caterpillar Inc. factory in central Illinois have jumped, in general, three-fold over the past year.

But meeting that boom in demand at the world’s largest heavy equipment manufacturer is a challenge, in part because of Caterpillar suppliers like Steve Kirsh.

Years of watching Caterpillar and other big manufacturers cut inventories, close plants and axe workers in the last downturn has embedded caution in Kirsh’s ambition to expand after the surge in orders, reflecting a more fundamental shift in how many industrial businesses view expansions, according to interviews with Caterpillar executives, more than a half-dozen Caterpillar suppliers and U.S. economic data.

“I just wasn’t sure it was real,” said Kirsh, speaking from a windowless office at the front of Kirsh Foundry Inc., in Beaver Dam, Wisconsin, which makes metal parts for Caterpillar and other customers.

Even with a surplus in demand for its product, Caterpillar CEO Jim Umpleby told investors last month the company will not invest in factory capacity. Instead, it plans to spend more on new technologies, expanding its parts business and selling more rental and used equipment.

The company’s big East Peoria assembly plant runs just one shift and operates only four days a week, while its own parts-making facilities are running three shifts, five days a week to provide it enough components to assemble, according to the company officials. Outside suppliers are similarly scrambling to catch up to the surge in orders.

This has extended the lead-time to deliver final products to dealers. For instance, it takes more than eight months to get one model of its large engines into a customer’s hands.

The Trump administration’s efforts to rewrite trade relations with key partners, especially China, only add to the uncertainty. The latest move to step back from a confrontation with China is good news for many domestic producers, who worry that a trade war could quickly puncture the global expansion, going on nine years, which is feeding the U.S. factory boom, manufacturing executives told Reuters.

The result is a drag on the economic expansion that President Trump and Republicans hoped for coming off U.S. corporate tax reform last year. The idea behind Trump’s tax reform was that companies could pour more money into expansions, hire more workers and lift wages.

There has been an upswing in plans for capital spending, but much of it is concentrated in the technology and energy sectors. Spending plans by industrial companies are up only slightly.

For those companies that do want to expand, from car companies to railroads and engine makers, they often can’t find the workers to expand fast enough.

The contraction of their supply chain in the last downturn thrust many players big and small into a “just in time delivery” business model, creating order backlogs, which has led to soaring prices for raw materials in the recent upswing. For a graphic, click https://tmsnrt.rs/2rY3iZp

A worker checks parts he has cut into final shapes at Wolfe and Swickard Machine Company Inc. in Indianapolis, Indiana, U.S., April 10, 2018. REUTERS/Timothy Aeppel

A worker checks parts he has cut into final shapes at Wolfe and Swickard Machine Company Inc. in Indianapolis, Indiana, U.S., April 10, 2018. REUTERS/Timothy Aeppel


The hesitation to expand Caterpillar’s supply chain is rooted in the last bust, notable as the longest downturn in its history – worse than the Great Depression – from 2012 to 2016, when sales dropped more than 40 percent.

Chastised by that slump, the Deerfield, Ill.-based company embarked on a restructuring strategy that aims to squeeze more production from its factories and buy more of what it needs from outside suppliers on a just-in-time basis.

Caterpillar has closed or restructured more than 25 factories and its full-time workforce is smaller now than it was at the end of 2012. And cuts continue. Caterpillar plans to close two more facilities this year and is considering shuttering an engine plant, which would eliminate 880 jobs.

Caterpillar executives said the new strategy is boosting profitability by allowing it to get the best use out of its existing factories. They blame the backlogs on its suppliers’ inability to keep up with the surge in orders.

Timing is part of the problem. Caterpillar and a host of other industrial companies all ramped up orders at the same time. “That switch got turned on after being turned off for several years – all at the same time,” said Amy Campbell, director of investor relations.

Campbell, however, said the supply situation is improving. The central Illinois plant will go back to the normal five-day shift beginning in June.

Caterpillar’s investors love this approach, since it helps deliver strong margins in the good times and minimizes pain in bad times.

The company recently boosted profit projections for 2018 by about 25 percent, and in the latest quarter, every segment posted better results compared to a year ago. But its stock price took a hit when the company’s CFO warned higher prices for raw materials like steel are going to start squeezing margins even as growth continues.

Supply chain bottlenecks, meanwhile, are hitting companies across the industrial heartland.

The Institute for Supply Management’s index for order backlogs, one of the best U.S. metrics for how quickly manufacturers are meeting demand, now stands at its highest level in 14 years. And many companies remain tight fisted. The Commerce Department recently reported that orders for capital goods, a key measure of business investment, fell in March, the third decline in four months. These numbers show that companies are holding back on spending, even as their order books swell.

“We’re in a period of significant disruption where everyone is scrambling — but it’s the way supply chains work today,” said John Layden, a consultant in Indianapolis who helps companies design and manage supply networks.

Finished castings coming off the production line at Kirsh Foundry Inc. in Beaver Dam, Wisconsin, U.S., April 12, 2018. REUTERS/Timothy Aeppel

Finished castings coming off the production line at Kirsh Foundry Inc. in Beaver Dam, Wisconsin, U.S., April 12, 2018. REUTERS/Timothy Aeppel


Finding employees is another drag on the U.S. manufacturing supply chain.

When Kirsh decided to add people early last year at his foundry – which melts iron and forms it into the rough shapes that will be refined for Caterpillar and others – he could not find them. Wisconsin’s jobless rate has hit an all-time low of 2.8 percent.

So Kirsh tried something new, hiring a Minnesota staffing company that specializes in parachuting industrial workers into factories that can’t find them locally.

He eventually got about 10 of these workers, who he calls “mercenaries,” who helped get his backlog under control. One came from as far as away as Detroit. But it was a costly fix. Between paying the staffing company, hotels and a per diem for the workers, he estimates they cost about three times more than local labor.

Industrial companies have always struggled with big swings in demand, but the problem of shortages emerges much quicker in today’s super-lean economy.

In the past, manufacturers from Kirsh to Caterpillar often kept more goods on warehouse shelves, creating a built-in buffer that could be absorbed as signals went out to suppliers that the latest upturn is going to continue. That gave more time for everyone to gear up.

It is a luxury that does not exist anymore, said Joe Williams, president of privately-held Wolfe and Swickard Machine Company Inc. in Indianapolis, which buys forged parts from Kirsh and over 20 other foundries that his 85-worker shop shapes and polishes into final machine parts.

Early last year, Williams saw orders from Caterpillar surge 80 percent, a stunning increase that left him scrambling.

“When we get an order, we have to order from a foundry, which has to communicate with the people supplying them metal, so there’s always a lag,” he said.

This time, however, it was particularly difficult. Some foundries simply refused his business because they were swamped with orders from other customers.

Like Kirsh, Williams has had trouble hiring workers and said he still needs at least 15 more machinists. Caterpillar has told him to expect orders to go up another 20 percent this year.

Stephen Volkmann, a machinery industry analyst at Jefferies, said Caterpillar was slow to ramp up production – which frustrated dealers clamoring for machines they could sell.

But he said Caterpillar and its suppliers are smart to be cautious.

“They all know that (business) could be down again next year,” he said, and so over expanding now “would be an expensive mistake.”

(Reporting by Timothy Aeppel and Rajesh Kumar Singh; editing by Joe White and Edward Tobin)

Putin, amid emotional scenes at fatal shopping mall fire scene, pledges action as anger mounts

Russian President Vladimir Putin visits the site of fire, that killed at least 64 people at a busy shopping mall, in Kemerovo, Russia March 27, 2018. Sputnik/Alexei Druzhinin/Kremlin via REUTERS

By Polina Ivanova and Andrew Osborn

KEMEROVO/MOSCOW (Reuters) – President Vladimir Putin flew to the scene of a deadly shopping mall fire in Siberia that killed 64 people and promised angry residents on Tuesday that those responsible for what he called criminal negligence would be harshly punished.

The fire, at the Winter Cherry mall in the city of Kemerovo, killed 41 children, according to the Interfax news agency, and the calamitous way it was handled has stirred anger and focused attention on corruption and lax fire safety standards.

Putin, re-elected only this month, laid flowers at a memorial to the victims in the coal-producing region about 3,600 km (2,200 miles) east of Moscow, before chairing a meeting and declaring a national day of mourning be held on Wednesday.

People attend a rally after the shopping mall fire, near the regional administration's building in the Siberian city of Kemerovo, Russia March 27, 2018. REUTERS/Marina Lisova

People attend a rally after the shopping mall fire, near the regional administration’s building in the Siberian city of Kemerovo, Russia March 27, 2018. REUTERS/Marina Lisova

“What’s happening here? This isn’t war, it’s not an unexpected methane explosion at a coal mine. People came to relax, children. We’re talking about demography and losing so many people,” Putin angrily told officials.

“Why? Because of some criminal negligence, because of slovenliness. How could this ever happen?,” he added. “The first emotion when hearing about the number of dead and dead children is not to cry but to wail. And when you listen to what has been said here, speaking honestly, other emotions arise.”

Investigators said fire exits had been illegally blocked, the public address system had not been switched on, the fire alarm system was broken, and children had been locked inside cinemas.

The fire swept through the upper floors of the shopping center, where a cinema complex and children’s play area were located, on Sunday afternoon.

Hundreds of angry protesters, many of them crying, gathered in central Kemerovo. The mayor, Ilya Seredyuk, tried to speak, but his words were often drowned out by chants calling on him to resign.

“Why don’t they tell us the truth?,” shouted one protester.

Many locals do not believe the official death toll of 64 and suspect that hundreds of people were killed in the blaze and that a cover-up is underway, something Putin has flatly denied.

Relatives of the victims say they have compiled a list of 85 people, most of them children, who are still missing.

Opposition leader Alexei Navalny called on people to attend a protest event later on Tuesday in Moscow.


Public anger in Kemerovo was reflected in protesters’ placards.

“How many victims are there really,?” read one, while another suggested corrupt officials had taken a bribe to sign off on the mall’s fire safety.

“Vova and Aman to prison!” read another banner, referring to Putin and the local governor.

One senior regional official, Sergei Tsivilev, got down on his knees to apologize to the crowd.

Natalia and Sergei Agarkov, whose two children were killed in the tragedy along with their grandmother stood on the square holding photographs of their dead loved ones.

“Masha was 10, Kostya was eight,” Sergei told Reuters. “Masha … was really good at sport. She should have ran out, but everything was locked. I identified them yesterday. I didn’t see Kostya, but recognized him by his little boots.”

Alexander Bastrykin, head of Russia’s Investigative Committee, which handles major crimes, told Putin the fire alarm system in the mall had been out of order since March 19 and that a security guard had not turned on the public address system to warn people to evacuate the building.

He said five people had already been detained.

Replying to Putin, Bastrykin said: “Most of the staff ran away and left children and parents and their children to their fate.”

“Those workers who should have been responsible for people’s safety, for organizing an evacuation, they were the first to run away,” he said.

(Additional reporting by Alexander Reshetnikov and Maria Kiselyova; Writing by Christian Lowe and Andrew Osborn; Editing by Richard Balmforth)

Kuwait condemns Philippine president’s call to evacuate workers

Kuwait's Minister of Foreign Affairs Sheikh Sabah al Khalid Al Sabah attends the Kuwait International Conference for Reconstruction of Iraq, in Bayan, Kuwait February 13, 2018. REUTERS/Stephanie McGehee

KUWAIT (Reuters) – A top Kuwaiti official condemned on Tuesday a call by Philippine President Rodrigo Duterte to evacuate his country’s workers from Kuwait, suggesting Duterte could damage ties between the two countries.

Duterte said last week that his government would ask private airlines to evacuate Filipino nationals from Kuwait within 72 hours, after the discovery of the dead body of a Filipino migrant worker in a freezer.

Two planes full of workers arrived in Manila from Kuwait on Monday on flights provided for free by commercial airlines at the president’s request. On Sunday, the Philippine labor minister said more than 2,200 Filipinos were ready to take up Duterte’s offer.

“We are surprised and we condemn statements from the Philippine president, especially as we are in contact with the Philippines on a high level to explain the workers’ conditions in Kuwait,” said Kuwait’s Minister of Foreign Affairs Sheikh Sabah al-Khalid al-Sabah.

He was speaking at a joint news conference with U.S. Secretary of State Rex Tillerson during a meeting in Kuwait of the global coalition against Islamic State.

“Escalation does not serve the ties between Kuwait and the Philippines,” Sheikh Sabah said, adding that 170,000 Filipinos “live a decent life in Kuwait … but separate accidents unfortunately happen, and we are providing our Filipino counterparts with the results of the investigations.”

The Philippines suspended sending workers to Kuwait in January after reports that abuse by employers had driven several to suicide.

(Reporting by Ahmed Hagagy; Additional reporting by Martin Petty; Writing by Aziz El Yaakoubi; Editing by Andrew Torchia, William Maclean)

Americans voluntarily quitting jobs as labor market tightens

: A help wanted sign is posted on the door of a gas station in Encinitas, California, U.S., September 6, 2013.

By Lucia Mutikani

WASHINGTON (Reuters) – The number of American workers voluntarily quitting their jobs jumped in December to the highest level in nearly 17 years, in a strong show of confidence in the labor market which further bolsters expectations of faster wage growth this year.

The Labor Department’s monthly Job Openings and Labor Turnover Survey (JOLTS) report published on Tuesday came on the heels of news last week that annual wage growth in January was the strongest in more than 8-1/2 years. The labor market is almost at full employment.

The number of workers willingly leaving their jobs increased by 98,000 to 3.259 million, the highest level since January 2001. That lifted the quits rate to a 2.2 percent from 2.1 percent in November. This rate, which the Federal Reserve looks at as a measure of job market confidence, has rebounded from a low of 1.3 percent in late 2009.

“I had thought that by now, the fear of moving to another company would have faded,” said Joel Naroff, chief economist at Naroff Economic Advisors in Holland, Pennsylvania. “It really hadn’t very much, though maybe it is finally happening.”Rising job turnover boosts economists’ optimism that wage growth will accelerate this year and in turn help to push inflation toward the Fed’s 2 percent target. While economists remain confident that the U.S. central bank will increase interest rates at least three times this year, much would depend on the fortunes of the U.S. stock market.

Stocks on Wall on Monday recorded their biggest drop since August 2011 as concerns over rising U.S. interest rates and government bond yields hit record-high valuations of stocks.

“The data today are likely to keep the Fed on the path of gradual rate hikes this year as long as the stock market stabilizes from its death plunge the last two weeks,” said Chris Rupkey, chief economist at MUFG in New York.

“Labor market conditions are picture perfect today, but that can change in a hurry if worsening financial conditions and plunging markets take a toll on business confidence.”

The JOLTS report also showed that job openings, a measure of labor demand, decreased 167,000 to a seasonally adjusted 5.8 million. Still, job openings are not too far from a record high of 6.2 million touched in September.

The decline in job openings in December was led by the professional and business services sector, which saw a decrease of 119,000. Job openings in the retail trade sector fell 85,000 while vacancies in construction dropped 52,000.

But job openings in the information sector increased 33,000 and the federal government had an additional 13,000 vacancies in December. The jobs openings rate slipped one-tenth of a percentage point to 3.8 percent in December.

Hiring was little changed at 5.49 million.

“The recent moderation across much of the JOLTS data is not alarming to us given that levels still remain favorable across much of the data and that we have been expecting the pace of job growth to cool relative to the recent strong gains,” said Daniel Silver, an economist at JPMorgan in New York.

(Reporting by Lucia Mutikani; Editing by Andrea Ricci)

40,000 Verizon Workers on Strike

Verizon workers take part in a rally as they negotiate a union contract in New York

(Reuters) – Tens of thousands of Verizon Communications Inc. workers walked off the job on Wednesday in one of the largest U.S. strikes in recent years after contract talks hit an impasse.

The strike could affect service in Verizon’s Fios Internet, telephone and TV services businesses across several U.S. East Coast states, including New York, Massachusetts and Virginia.

The strike was called by the Communications Workers of America and the International Brotherhood of Electrical Workers that jointly represent nearly 40,000 employees, such as customer services representatives and network technicians in Verizon’s traditional wireline phone operations.

Workers protested at various Verizon locations along the East Coast. Verizon said it had trained thousands of non-union employees over the past year to ensure no disruption in services.

While the wireline unit represents Verizon’s legacy business, it generated about 29 percent of the company’s revenue in 2015 and less than 7 percent of operating income.

Verizon’s Fios TV and Internet service is no longer growing and the company has been scaling back its landline network as it has shifts to the bread-and-butter wireless business and new efforts in mobile video and advertising.

Verizon and the unions have been talking since last June over the company’s plans to cut healthcare and pension-related benefits over a three-year period.

The workers have been without a contract since its agreement expired in August. Issues include healthcare, offshoring call center jobs, work rules and pensions.

“It’s regrettable that union leaders have called a strike, a move that hurts all of our employees,” Marc Reed, Verizon’s chief administrative officer, said in a statement on Wednesday. “Since last June, we’ve worked diligently to try and reach agreements that would be good for our employees, good for our customers and make the wireline business more successful now and in the future.”

The last contract negotiations in 2011 also led to a strike. A new contract was reached after two weeks.

On Tuesday, Verizon said it has been approached by the Federal Mediation and Conciliation Service. In the last round, the FMCS mediated their contract dispute.

“The question of federal mediation is a distraction to the real problem: Verizon’s corporate greed,” the unions said in a statement, adding it has not yet contacted the FMCS.

Verizon’s shares dipped 0.1 percent at $51.88.

(Reporting by Malathi Nayak and Rishika Sadam; Editing by Saumyadeb Chakrabarty; and Jeffrey Benkoe)

Fiat Chrysler Laying Off 1,300 Workers

A new Fiat Chrysler Automobiles sign is pictured after being unveiled at Chrysler Group World

By Bernie Woodall

DETROIT (Reuters) – Fiat Chrysler Automobiles said on Wednesday it is laying off about 1,300 workers indefinitely and ending one of the two shifts at its Sterling Heights, Michigan plant that makes the slow-selling midsize Chrysler 200 sedan.

U.S. sales of the Chrysler 200 were down 63 percent in the first three months of this year from a year earlier, as FCA has de-emphasized sales of the model which had been often sold to rental agencies.

The lay offs will be effective July 5.

The company did not say how long it would continue to make the Chrysler 200. In January, Fiat Chrysler Automobiles (FCA) Chief Executive Sergio Marchionne said the company would cease making the midsize sedan as well as the compact Dodge Dart, unless a partner could be found to keep the production going.

United Auto Workers Vice President Norwood Jewell said in a statement that the move was not unexpected, and expressed optimism that FCA will find jobs for the workers by making more trucks and SUVs.

“FCA is not the only company experiencing a slow market for small cars,” Jewell said. “On a bright note, there is a strong demand for larger-sized vehicles. The company has been planning to increase its capacity to build more trucks and SUVs. I believe that in the long term this move will be a positive one for our members and the company.”

It is one of the largest layoffs at a U.S. auto plant since the 2008-2009 recession, and there is widespread speculation that it will not be the end of production changes among U.S. automakers trying to adjust to consumer tastes that continue to shift from cars such as sedans and hatchbacks to SUVs and pickup trucks.

Workers at the Sterling Heights plant in suburban Detroit will return to work this coming Monday after a 10-week shutdown called to match consumer demand with production, the company said.

In 2015, passenger cars accounted for 44 percent of sales in the U.S. automotive market, down from 48 percent in 2014. The last year cars outsold SUVs and trucks in the U.S. market was 2012, when 51 percent of new vehicles sold were cars, according to industry consultant Autodata Corp.

General Motors Co and Ford Motor Co  in the past year have adjusted to the shift in the U.S. auto market, cutting jobs and production for some models while adding to those of others.

(Reporting by Bernie Woodall; Editing by Phil Berlowitz and Alistair Bell)