Business Report: Will There Be A Brexit Deal?
Q: Let's talk about Brexit. There is a possibility of a deal. That's big for England. But what does it mean for us on this side of the pond?
A: Well for us it could mean if the deal passes that the UK can do a trade agreement with the United States, which is great for the UK and potentially for for the United States. It goes to parliament on Saturday. It's essentially the exact same agreement that Parliament has defeated three times already. There is one little provision about Northern Ireland that allows the border between Northern Ireland and the Republic of Ireland to be part of the EU. If the vote is yes, what happens first and foremost the UK comes out of the EU. Secondly, it's going to be a high degree of disruption for British business and American companies that do business with British companies if they vote no. It also continues the turmoil of British politics with an election for a new Prime Minister. They're going to need an extension to the Brexit agreement and the EU may decide not to, which means they crash out on October 31 and the disruption will be very difficult.
Q: A long strike with General Motors may be coming to an end. What's going on there?
A: It's positive news for the middle class. Wage increases have been kind of muted. This contract that the UAW struck with General Motors is a big win for their workers. 50,000 workers went on strike for 31 days. It was the longest strike in 20 years. And it's the largest strike in terms of number of workers since the 2007 GM strike. But that only lasted three days. GM workers really took large page pay cuts during the bankruptcy of General Motors in 2009. They made a lot of concessions. And so this is their opportunity to get some of that back. The one concession the UAW gave is that GM is going to close three plants. The impact for both workers and GM in this 30 days has been very difficult. This month manufacturing output declined half of a point. It has declined nine-tenths of a point in the last twelve months so all the decline has been in the last 30 days. Almost all of it is due to General Motors.
Q: Filling up those cars has become more expensive. The price of gas really up there. Is it coming back down?
A: The price of gas has gone up almost 60 cents in the last two and a half weeks. It peaked last week it came down five cents this past week. Experts say they'll be down to four dollars by Halloween. The question is will they go down further. And one of the big overhanging factors is consumer groups and regulatory groups say that the refiners charge higher prices than they should. The California Energy Commission has a report coming out at the end of the year that they previewed. It said branded gas stations charge much higher per gallon than non-branded gas stations. And so consumers just need to be thoughtful where they buy their gas.