Good morning, MBA readers,
Work stoppages can take a toll on both sides of labor disputes. Many striking General Motors workers encountered financial hardship after six weeks picketing on $250 per week of strike pay. The automaker, meanwhile, reported Tuesday that it will lose around $3 billion in profit this year as a result of the strike. The outlook isn’t any sunnier in the coal sector. Murray Energy, which owns a controlling stake in St. Louis-based Foresight Energy, said it will file for bankruptcy protection as it faces mounting debt and declining global demand for coal. But it isn’t all dark clouds for businesses in Missouri: A new ranking named St. Louis as one of the top places in the U.S. for women to start businesses. And you can get your day started with Missouri’s top business headlines below.
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GM third quarter profit falls 7%
General Motors reported net quarterly profits down $1 billion, or 52 cents per share, although union strikes only took up two weeks of the period. Most impact of the work stoppage will be felt in the fourth quarter: GM announced Tuesday it will lose almost $3 billion in annual profit. (Associated Press)
Boeing CEO grilled by Senate committee
Executive Dennis Muilenburg faced hard questions at a Senate hearing on Tuesday about whether the company hid information from pilot and training manuals about a key flight-control system implicated in both 737 Max crashes. (Bloomberg)
Cannabis lobbying group calls on state to regulate vaping
The Missouri Medical Cannabis Trade Association sent a letter to Dr. Randall Williams, director of the Department of Health and Senior Services, asking him to issue rules aimed at “diminishing the black market” of medical marijuana sales. (St. Louis Post-Dispatch)
St. Louis ranked among top cities for female-run businesses
St. Louis rates sixth out of 50 cities nationally as a place for women to start a business, according to a ranking released by Business.org. Kansas City ranked 20th on the list, which considers factors like percentage of female-owned businesses, unemployment rate for women, and gender pay gap. (St. Louis Business Journal)
Workplace tech startup Envoy opens office in KC area
San Francisco-based company Envoy has opened an office in Overland Park, Kansas. Envoy aims to double its total employee base to 150 by the end of next year. (Kansas City Business Journal)
SEC said to be probing retirement plan provider Valic
The reported investigation into Valic is focused on whether agents are incentivized to sell higher-cost products and whether the company is disclosing all sales made. Valic provides retirement plan services to a group of 59 school districts in the St. Louis area. (St. Louis Post-Dispatch)
Say that again
“It’s that continued decline of the industry. Finally the storm has arrived on our doorsteps, or our shores. The wave continues and it doesn’t look like there’s an end in sight.”
That’s Rob Godby, a University of Wyoming energy economics professor, on the financial decline of U.S. coal companies after Murray Energy announced Tuesday that it will file for Chapter 11 bankruptcy protection, the St. Louis Post-Dispatch reports. Godby said coal giants like Murray, which owns a controlling stake in St. Louis’ Foresight Energy, are facing grave financial challenges as demand for coal dwindles around the world. In light of these conditions, Godby posits that a joint venture between St. Louis coal miners Peabody Energy and Arch Coal could indicate a long-term strategy to silo thermal coal used in power generation from the stronger business for metallurgical coal. Godby adds that such maneuvers could help buffer the companies from reclamation costs when the time comes to close mines. Peabody, the largest coal firm in the U.S., announced earlier this month that it will close two mines in southern Illinois as the firm struggles to emerge from its own Chapter 11 bankruptcy just over two years ago.
That’s how much Kansas City and its port authority may offer two U.S. Department of Agriculture agencies to help them relocate to the city, The Kansas City Star reports. On Monday, the Port Authority of Kansas City approved an incentive for the potential site of the agencies’ new headquarters, which could result in a $19.7 million benefit over 15 years. Funds would come from capturing half of state employee withholding taxes and redirecting them back to the Port Authority. That amount is estimated to be up to $26 million. Furthermore, the city could offer up to $6 million by redirecting 75% of city taxes, which would include earnings, sales and utility taxes over 15 years.
Hello, my name is
This St. Louis startup is one of 15 firms competing this week in a $5 million startup contest in Buffalo, New York, the St. Louis Business Journal reports. Strayos, which developed a visual artificial intelligence platform for mining and construction projects, is one of three Midwestern startups participating in the 43North competition, which will award $1 million to the winner and $500,000 to seven others. If Strayos wins the competition, it will be required to operate out of Buffalo for one year, which the firm sees as an opportunity to grow its Northeast client base and to potentially expand in Canada. CEO Ravi Sahu said the relocation could be permanent, if Strayos wins the contest.
It’s been a pleasure doing business with you this morning.