US media: Inflation continues to sweep across various industries across the United States. US companies face pressure on profitability. Car dealers | US | companies
According to the Wall Street Journal on September 13th, rising energy and labor costs are further eroding the profits of American companies, becoming the latest sign of sustained inflationary pressures sweeping across various industries in the United States.
On the 13th, American Airlines lowered its profit forecast for the current quarter, estimating a decrease in earnings per share to 20 to 30 cents, far less than the previous forecast of 85 to 95 cents, due to soaring aircraft fuel costs and rising costs of newly approved pilot salary contracts. Other airlines have also issued warnings about rising fuel prices. US budget airline Frontier Airlines also said on the same day that fuel prices were 23 cents higher than previously predicted on average per gallon, and its performance in recent weeks has also been lower than usual. Fuel and labor are the biggest expenses for airlines, but both costs increase at the same time, and there are concerns that the US aviation industry will pass on additional costs to consumers.
In Detroit, the United Automobile Workers Union rejected the proposal from the three major American car dealers for a 20% salary increase of four and a half years. The union hopes for a salary increase of around 35%, adjusted based on cost of living, and reduced weekly working hours. The union chairman stated that there are still significant differences between the union and the automakers regarding the new labor contract. If an agreement is not reached on the 14th, the union will launch strikes at different factories of the three major automakers. This will be the first time that three major automakers, including General Motors, Ford, and Stellantis, are simultaneously facing strikes.
Various industries in the United States are currently suffering from job shortages, giving unions more bargaining chips to negotiate increased wages and benefits. California healthcare facility and restaurant operators reached an agreement with workers this week to increase the local minimum hourly wage. The West Coast dock workers also won a promise of a 32% salary increase by 2028 this summer. Meanwhile, fuel prices have continued to rise, with gasoline prices reaching a new high this year in recent weeks. More than half of the increase in the US Consumer Price Index in August was due to the rise in oil prices. This has led to profitability difficulties for some American companies, forcing them to delay upgrading facilities, streamline personnel, and raise prices for goods and services.
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