Good morning, MBA readers,
The automotive industry will be hit when the United States’ record-long economic expansion ends, analysts say. But what toll would that take on Missouri, where General Motors and Ford plants employ thousands of people and produce one of the state’s most valuable exports?
Sectors like automobile manufacturing are often among the most adversely affected during a recession, because demand for their products is more elastic than demand for services like health care.
And with an increasing number of people taking out car loans, some analysts think 2020’s auto loans are beginning to resemble 2008’s subprime mortgages.
But there’s more to the story than that, other analysts say. In fact, some suggest an economic slowdown could actually end up helping the car industry’s technological innovation in the long run.
Read on for more about how Missouri’s auto industry might fare in a recession — and the rest of the day’s top business stories.
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Essence Healthcare to acquire two companies
Essence Healthcare, a Maryland Heights-based company that offers health insurance to over 60,000 Missourians, has agreed to acquire Mutual of Omaha Medicare Advantage Company and Medicare Advantage Company of Omaha. Terms of the deal were not announced. (St. Louis Post-Dispatch)
Ascension reaches agreement on sale of Wisconsin facilities
The St. Louis-area health system will sell a hospital it owns in Wisconsin, along with its interest in two others facilities in the state, to Marshfield Clinic Health System. The systems hope to finish the deal this spring. (St. Louis Business Journal)
T-Mobile names new chief technology officer
After amending terms of its planned merger with Sprint, T-Mobile has named a new chief technology officer. Abdul Saad will replace Neville Ray, who was promoted to president of technology. (Kansas City Business Journal)
Port authority paid too much for management services, officials’ texts indicate
Texts between John Maupin, chair of the St. Louis County Port Authority, and St. Louis County Executive Sam Page indicate that the port authority overpaid the St. Louis Economic Development Partnership, which provides staff for the port authority, “in excess of $1 million.” (St. Louis Business Journal)
Home Depot to hire nearly 1,000 seasonal workers in St. Louis area
The hiring surge is part of a company-wide effort to bring in 80,000 employees for the spring season. Hiring events will take place Saturday at stores across the area. (St. Louis Post-Dispatch)
St. Louis County to hand out opioid overdose spray for free
The St. Louis County Health Department is handing out free bottles of Narcan, or naloxone, a spray used to treat opioid overdoses. A pack of two bottles is $100 over the counter, which the health department said is a prohibitive cost for many who need it. (St. Louis Public Radio)
KC’s PayIt adds the state of Oklahoma as client
Oklahoma residents will be able to renew vehicle registrations and order birth certificates online through the digital government and payment platform. Founded in 2013, the company recently hired a chief revenue officer and moved into a larger headquarters. (Kansas City Business Journal)
During the 2010s, Missouri trailed all but two of its neighboring states in population growth, according to U.S. Census Bureau estimates. That slow growth is a cause for some economic concern, researchers say.
Say that again
“It’s a cyclical, bellwether industry. We had, in 2016, been in the longest sales upturn since World War II. Eventually, the market can’t absorb so many vehicles because you’ve been selling for so long. A type of saturation takes place.”
That’s Bernard Swiecki, an analyst for the Center for Automotive Research. He and other auto industry experts offer mixed views on how industry will be affected when the United States’ record-long economic expansion ends and the economy enters recession. It’s a key question in Missouri, where the auto industry accounts for tens of thousands of jobs and is responsible for the state’s most valuable export product.
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This St. Louis native will be taking his experience in scientific research and early-stage investing to the Missouri Technology Corporation, where he will serve as the new executive director, the MTC announced Tuesday. After getting a Ph.D. in molecular microbiology and immunology from Saint Louis University’s School of Medicine, Scatizzi worked as a researcher at the University of California-San Diego and the Scripps Research Institute. After that, he spent several years working with the Tech Coast Angels, a California-based investment group, before returning to Missouri to work with local startups. The MTC, a public-private partnership established to promote entrepreneurship in Missouri, has seen steep cuts to its state funding in recent years.
That’s how much pharmaceutical company Mallinckrodt agreed to pay in a new settlement proposal announced Tuesday, resolving thousands of lawsuits claiming it fueled the national opioid epidemic, Reuters reports. As part of the deal, Mallinckrodt will seek bankruptcy protections, making it the third opioid maker to consider the option. The company, which bases its U.S. operations in the St. Louis area, will retain ownership of the specialty generic business, which it has been working to separate since last year, after completion of the bankruptcy process. Mallinckrodt also said it had entered into an agreement with existing lenders under which it could borrow $800 million on a four-year term.
It’s been a pleasure doing business with you this morning.