The daily business briefing: September 24, 2019

Image
Harold Maass
Boris Johnson in NYC
Spencer Platt/Getty Images

1.

U.K. high court rules pre-Brexit suspension of Parliament unlawful

Britain's Supreme Court ruled Tuesday that Prime Minister Boris Johnson's suspension of Parliament, with Brexit looming, was illegal. The unanimous decision upheld a Scottish court ruling, dealing the latest blow to Johnson's effort to lead the U.K. out of the European Union at the end of October, with or without a divorce deal. The president of the Supreme Court, Brenda Hale, said Johnson's advice to the Queen to suspend Parliament for five weeks "was unlawful because it had the effect of frustrating or preventing the ability of Parliament to carry out its constitutional functions without reasonable justification." Parliament is now considered back in session, so lawmakers can resume debate over Brexit, after passing a law seeking to block Johnson's threat of a no-deal departure from the trading bloc. [The New York Times, The Guardian]

2.

U.S.-Japan trade deal faces possible delay over car tariff threat

The U.S. and Japan might miss a deadline for a trade deal this week as Tokyo seeks assurances that President Trump won't impose new tariffs on Japanese vehicles, The New York Times reported Monday. President Trump and Japanese Prime Minister Shinzo Abe are meeting this week at the United Nations General Assembly, and had hoped to sign an agreement increasing access to Japan for U.S. agricultural products, and lowering tariffs on industrial goods. The pact was not expected to address automobiles, which account for the biggest share of the $68 billion U.S. trade deficit with Japan. The Times reported that Japan made a last-minute push for a "sunset clause" negating the deal if Trump follows through with a threat to impose new tariffs on Japanese cars. [The New York Times, Reuters]

3.

UAW workers qualify for union benefits as strike enters second week

Participants in the United Auto Workers' union strike against General Motors became eligible for strike benefits of $250 per week as the strike entered its second week on Monday. The benefits will cost the UAW $12.5 million a week. The union also is paying for its members' health benefits during the strike. At the end of last year, the UAW had nearly $800 million in its strike fund, which means that it could pay the strikers for about a year before running out of money in the fund. The union called for the strike to press GM to move assembly of some of the company's cars from Mexico to U.S. plants, and to re-evaluate GM's use of temporary hourly workers, as well as wages and benefits. [CNN]

4.

Embattled WeWork co-founder Neumann enters talks about his future

WeWork co-founder Adam Neumann has begun talking with board members about his future role in the company, although he has not yet agreed to resign as some major investors have demanded, Reuters reported Monday, citing people familiar with the matter. WeWork showed billions in losses in filings last week, fueling doubts about its business model and forcing it to postpone its initial public offering of stock. Some of the office-sharing startup's biggest investors, including SoftBank and Benchmark Capital, want the charismatic and controversial Neumann out because they have lost faith in him. SoftBank invested in WeWork parent We Company in January in a deal valuing the startup at $47 billion, but recent investor concerns have left We Company considering an IPO valuation as low as $10 billion. [Reuters, The Washington Post]

5.

U.S. stock futures inch higher with trade tensions still in focus

U.S. stock index futures gained early Tuesday after Treasury Secretary Steven Mnuchin said the U.S. and China remained on track for new high-level trade talks next month. Futures for the Dow Jones Industrial Average, the S&P 500, and the Nasdaq were up by 0.3 percent or slightly more. Mnuchin told Fox Business Network that deputy negotiators last week had made some progress toward resolving disputes between the world's two biggest economies. Signs of progress have lifted markets recently, despite signs that the tit-for-tat tariffs between the U.S. and China are taking a toll on companies and consumer sentiment. The three main U.S. indexes closed mixed with only slight movement on Monday. [CNBC]