Briefs for Wednesday
NEW YORK – FedEx is getting hurt by the tight job market.
The package delivery company said Tuesday that its costs are up $450 million in the most recent quarter, as it paid higher wages as it got harder to find new workers and demand for shipping increased.
FedEx also cut its outlook for the year, saying earnings will be lower than it previously expected, partly due to the increased costs related to the tight labor market.
Shares of FedEx Corp. fell 4% in after-hours trading.
Competition for hourly workers has become fierce, and many companies are offering higher pay, sign-on bonuses and other incentives.
It may get worse during the holidays as companies seek help getting gifts and online orders to shoppers.
Online shopping giant Amazon is looking to hire 125,000 people; delivery company UPS is seeking 100,000; and FedEx wans to hire 90,000.
Overall, FedEx said its fiscal first-quarter expenses rose 16% to $20.6 billion. Its profit fell 11% to $1.11 billion in the three months ended Aug. 31.
SEC chief urges caution on cryptocurrency stablecoins
Securities and Exchange Commission Chairman Gary Gensler is making clear he is no fan of stablecoins, describing the increasingly popular cryptocurrency whose value is frequently pegged to the U.S. dollar as a danger to investors with questionable long-term viability.
“These stablecoins are acting almost like poker chips at the casino right now,” Gensler said Tuesday during a “Washington Post Live” interview.
Without stronger oversight, the top Wall Street regulator said, “people get hurt.”
The digital assets have taken center stage in an intensifying debate over Washington’s role in regulating the crypto industry.
Proponents say stablecoins offer a more reliable store of value than other tokens subject to wild price swings, facilitate trading on crypto exchanges, and could transform payment processing for everyday consumers.
Skeptics worry that issuers will fail to maintain sufficient collateral for the assets, posing a risk to the financial system’s stability in the absence of regulation.
Gensler, who has been moving aggressively to impose tougher restrictions on crypto players, questioned whether digital assets will prove an enduring alternative to public currency.
“History tells us that private forms of money don’t last long,” he said, noting the U.S. experimented with private money in the “wildcat banking era” from the 1830s to the 1860s. “This all had a lot of cost, a lot of problems,” he said.
Stellantis loses Fiat Chrysler CEO Manley
MILAN – PSA Peugeot’s takeover of Fiat Chrysler to form the world’s fourth-largest carmaker has had its first executive casualty, with former Fiat Chrysler CEO Mike Manley stepping down from his role of head of the Americas.
Stellantis announced Tuesday that Manley, 57, was leaving to become CEO of AutoNation, the largest dealership network in the U.S., starting Nov. 1.
Manley will not be replaced. North America Chief Operating Officer Mark Stewart and Antonio Filosa, COO of Lat America, will report directly to Stellantis CEO Carlos Tavares.
Manley was named CEO of Fiat Chrysler in July 2018, coinciding with the illness and sudden death of longtime CEO Sergio Marchionne.
When Stellantis was formed, Tavares, who was Peugeot’s chief executive, took over as CEO of the combined carmaker.
Manley was credited with the turnaround of the Jeep subsidiary, which was a mainstay of FCA profits, and also was the longtime head of Fiat Chrysler’s Asia operations.
From wire reports