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BlackBerry Reports Fiscal 2020 Third Quarter Results – Yahoo Finance

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<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="- Total company non-GAAP revenue of $280 million , or 23% growth year-over-year; total company GAAP revenue of $267 million , or 18% growth year-over-year” data-reactid=”11″>- Total company non-GAAP revenue of $280 million , or 23% growth year-over-year; total company GAAP revenue of $267 million , or 18% growth year-over-year

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="- Total non-GAAP Software and Services revenue of $275 million , or 26% growth year-over-year; total GAAP Software and Services revenue of $262 million , or 21% growth year-over-year; both are record quarterly highs” data-reactid=”12″>- Total non-GAAP Software and Services revenue of $275 million , or 26% growth year-over-year; total GAAP Software and Services revenue of $262 million , or 21% growth year-over-year; both are record quarterly highs

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="- Total company non-GAAP earnings per basic and diluted share of $0.03 ; GAAP loss per basic share of $0.06 and GAAP loss per diluted share of $0.07 ” data-reactid=”13″>- Total company non-GAAP earnings per basic and diluted share of $0.03 ; GAAP loss per basic share of $0.06 and GAAP loss per diluted share of $0.07

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="- Total company free cash flow generated of $37 million , as reported” data-reactid=”14″>- Total company free cash flow generated of $37 million , as reported

300x250x1

WATERLOO, Ontario , Dec. 20, 2019 /CNW/ — BlackBerry Limited (NYSE: BB; TSX: BB) today reported financial results for the three months ended November 30, 2019 (all figures in U.S. dollars and U.S. GAAP, except where otherwise indicated).

BlackBerry Logo Black (PRNewsfoto/Blackberry Limited)
BlackBerry Logo Black (PRNewsfoto/Blackberry Limited)

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Third Quarter Fiscal 2020 Results” data-reactid=”36″>Third Quarter Fiscal 2020 Results

  • Total company non-GAAP revenue for the third quarter of fiscal 2020 was $280 million , up 23% year-over-year. Total company GAAP revenue for the third quarter of fiscal 2020 was $267 million , up 18% year-over-year. Total non-GAAP software and services revenue was $275 million , up 26% year-over-year. Total GAAP software and services revenue was $262 million , up 21% year-over-year. Third quarter recurring non-GAAP software and services revenue (excluding IP licensing and professional services) was over 90%. Non-GAAP gross margin was 77% and GAAP gross margin was 74%.
  • Total company non-GAAP operating earnings was $20 million . Total company GAAP operating loss was $29 million . Non-GAAP earnings per share was $0.03 (basic and diluted). GAAP net loss was $0.06 per basic share and $0.07 per diluted share. GAAP net loss includes $35 million for acquired intangibles amortization expense, $15 million in stock compensation expense, $10 million in restructuring charges, a benefit of $20 million related to the fair value adjustment on the debentures, and other amounts as summarized in a table below.
  • Total cash, cash equivalents, short-term and long-term investments was $970 million as of November 30, 2019 . Free cash flow generated, before considering the impact of acquisition and integration expenses, restructuring costs and legal proceedings, was $41 million . Cash generated from operations was $40 million and capital expenditures were $3 million .

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content=""BlackBerry achieved sequential growth in revenue across all of our software businesses while generating healthy non-GAAP profitability and free cash flow as we continue to invest in our future," said John Chen , Executive Chairman and CEO, BlackBerry.&nbsp; "I am pleased with our progress.&nbsp; Our pipeline is growing as we deliver against our product roadmap and execute on our go-to-market expansion." ” data-reactid=”43″>“BlackBerry achieved sequential growth in revenue across all of our software businesses while generating healthy non-GAAP profitability and free cash flow as we continue to invest in our future,” said John Chen , Executive Chairman and CEO, BlackBerry.  “I am pleased with our progress.  Our pipeline is growing as we deliver against our product roadmap and execute on our go-to-market expansion.”

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Outlook
BlackBerry will provide fiscal year 2020 outlook in connection with the quarterly earnings announcement on its earnings conference call.&nbsp; The earnings call transcript will be made available on our website and on SEDAR.” data-reactid=”44″>Outlook
BlackBerry will provide fiscal year 2020 outlook in connection with the quarterly earnings announcement on its earnings conference call.  The earnings call transcript will be made available on our website and on SEDAR.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Reconciliation of GAAP revenue, gross margin, gross margin percentage, income (loss) before income taxes, net income (loss) and basic earnings (loss) per share to Non-GAAP revenue, gross margin, gross margin percentage, income before income taxes, net income and basic earnings per share for the three months ended November 30, 2019 :” data-reactid=”45″>Reconciliation of GAAP revenue, gross margin, gross margin percentage, income (loss) before income taxes, net income (loss) and basic earnings (loss) per share to Non-GAAP revenue, gross margin, gross margin percentage, income before income taxes, net income and basic earnings per share for the three months ended November 30, 2019 :

Q3 Fiscal 2020 Non-GAAP Adjustments

For the Three Months Ended November 30, 2019

(in millions, except for per share amounts)

Income statement
location

Revenue

Gross
margin
(before taxes)

Gross margin %
(before
taxes)

Income (loss)
before
income taxes

Net income
(loss)

Basic earnings
(loss) per
share

As reported

$

267

$

198

74.2

%

$

(30)

$

(32)

$

(0.06)

Debentures fair value adjustment (2)

Debentures fair value adjustment

—

—

—

%

(20)

(20)

Restructuring charges (3)

Cost of sales

—

3

1.1

%

3

3

Restructuring charges (3)

Selling, marketing and administration

—

—

—

%

7

7

Software deferred revenue acquired (4)

Revenue

13

13

1.1

%

13

13

Software deferred commission expense acquired (5)

Selling, marketing and administration

—

—

—

%

(4)

(4)

Stock compensation expense (6)

Cost of sales

—

1

0.4

%

1

1

Stock compensation expense (6)

Research and development

—

—

—

%

4

4

Stock compensation expense (6)

Selling, marketing and administration

—

—

—

%

10

10

Acquired intangibles amortization (7)

Amortization

—

—

—

%

35

35

Adjusted

$

280

$

215

76.8

%

$

19

$

17

$

0.03

Note: Non-GAAP revenue, non-GAAP gross margin, non-GAAP gross margin percentage, non-GAAP income before income taxes, non-GAAP net income and non-GAAP basic earnings per share do not have a standardized meaning prescribed by GAAP and thus are not comparable to similarly titled measures presented by other issuers. The Company believes that the presentation of these non-GAAP measures enables the Company and its shareholders to better assess the Company’s operating results relative to its operating results in prior periods and improves the comparability of the information presented. Investors should consider these non-GAAP measures in the context of the Company’s GAAP results.

(1)

During the third quarter of fiscal 2020, the Company reported GAAP gross margin of $198 million or 74.2% of revenue. Excluding the impact of stock compensation expense and restructuring charges included in cost of sales and software deferred revenue acquired included in revenue, non-GAAP gross margin was $215 million, or 76.8% of revenue.

(2)

During the third quarter of fiscal 2020, the Company recorded the Q3 Fiscal 2020 Debentures Fair Value Adjustment of $20 million. This adjustment was presented on a separate line in the Consolidated Statements of Operations.

(3)

During the third quarter of fiscal 2020, the Company incurred restructuring charges of approximately $10 million, of which $3 million was included in cost of sales and $7 million was included selling, marketing and administration expense.

(4)

During the third quarter of fiscal 2020, the Company recorded software deferred revenue acquired but not recognized due to business combination accounting rules of $13 million, which was included in BlackBerry Cylance revenue.

(5)

During the third quarter of fiscal 2020, the Company recorded deferred commission expense acquired but not recognized due to business combination accounting rules of approximately of $4 million.

(6)

During the third quarter of fiscal 2020, the Company recorded stock compensation expense of $15 million, of which $1 million was included in cost of sales, $4 million was included in research and development, and $10 million was included in selling, marketing and administration expense.

(7)

During the third quarter of fiscal 2020, the Company recorded amortization of intangible assets acquired through business combinations of $35 million, which was included in amortization expense.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Supplementary Geographic Revenue Breakdown” data-reactid=”51″>Supplementary Geographic Revenue Breakdown

BlackBerry Limited

(United States dollars, in millions)

Revenue by Region

For the Quarters Ended

November 30, 2019

August 31, 2019

May 31, 2019

February 28, 2019

November 30, 2018

North America

$

188

70.4

%

$

179

73.4

%

$

160

64.8

%

$

176

69.0

%

$

151

66.8

%

Europe, Middle East and Africa

60

22.5

%

47

19.3

%

61

24.7

%

61

23.9

%

56

24.8

%

Other regions

19

7.1

%

18

7.3

%

26

10.5

%

18

7.1

%

19

8.4

%

Total

$

267

100.0

%

$

244

100.0

%

$

247

100.0

%

$

255

100.0

%

$

226

100.0

%

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Supplementary Revenue by Product and Service Type Breakdown” data-reactid=”54″>Supplementary Revenue by Product and Service Type Breakdown

BlackBerry Limited

(United States dollars, in millions)

Revenue by Product and Service Type

U.S. GAAP

Adjustments

Non-GAAP

For the Three Months Ended

For the Three Months Ended

For the Three Months Ended

November 30,
2019

November 30,
2018

November 30,
2019

November 30,
2018

November 30,
2019

November 30,
2018

IoT

$

145

$

148

$

—

$

2

$

145

$

150

BlackBerry Cylance

40

1

13

—

53

1

Licensing

77

68

—

—

77

68

Other

5

9

—

—

5

9

Total

$

267

$

226

$

13

$

2

$

280

$

228

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Conference Call and Webcast
A conference call and live webcast will be held today beginning at 8 a.m. ET , which can be accessed by dialing 1- 877-682-6267 or by logging on at BlackBerry.com/Investors. A replay of the conference call will also be available at approximately 11 a.m. ET by dialing 1-800-585-8367 and entering Conference ID #9608207 and at the link above.” data-reactid=”57″>Conference Call and Webcast
A conference call and live webcast will be held today beginning at 8 a.m. ET , which can be accessed by dialing 1- 877-682-6267 or by logging on at BlackBerry.com/Investors. A replay of the conference call will also be available at approximately 11 a.m. ET by dialing 1-800-585-8367 and entering Conference ID #9608207 and at the link above.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="About BlackBerry
BlackBerry (NYSE: BB; TSX: BB) is a trusted security software and services company that provides enterprises and governments with the technology they need to secure the Internet of Things. Based in Waterloo, Ontario , the company is unwavering in its commitment to safety, cybersecurity and data privacy, and leads in key areas such as artificial intelligence, endpoint security and management, encryption and embedded systems. For more information, visit BlackBerry.com and follow @BlackBerry.” data-reactid=”58″>About BlackBerry
BlackBerry (NYSE: BB; TSX: BB) is a trusted security software and services company that provides enterprises and governments with the technology they need to secure the Internet of Things. Based in Waterloo, Ontario , the company is unwavering in its commitment to safety, cybersecurity and data privacy, and leads in key areas such as artificial intelligence, endpoint security and management, encryption and embedded systems. For more information, visit BlackBerry.com and follow @BlackBerry.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Investor Contact:
BlackBerry Investor Relations
+1-519-888-7465
investor_relations@blackberry.com ” data-reactid=”63″>Investor Contact:
BlackBerry Investor Relations
+1-519-888-7465
investor_relations@blackberry.com

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Media Contact:
BlackBerry Media Relations
(519) 597-7273
mediarelations@blackberry.com ” data-reactid=”64″>Media Contact:
BlackBerry Media Relations
(519) 597-7273
mediarelations@blackberry.com

This news release contains forward-looking statements within the meaning of certain securities laws, including under the U.S. Private Securities Litigation Reform Act of 1995 and applicable Canadian securities laws, including statements regarding: BlackBerry’s plans, strategies and objectives including the anticipated benefits of its strategic initiatives and its intentions to expand and enhance its product and service offerings.

The words “expect”, “anticipate”, “estimate”, “may”, “will”, “should”, “could”, “intend”, “believe”, “target”, “plan” and similar expressions are intended to identify these forward-looking statements. Forward-looking statements are based on estimates and assumptions made by BlackBerry in light of its experience, historical trends, current conditions and expected future developments, as well as other factors that BlackBerry believes are appropriate in the circumstances. Many factors could cause BlackBerry’s actual results, performance or achievements to differ materially from those expressed or implied by the forward-looking statements, including the following risks: BlackBerry’s ability to enhance, develop, introduce or monetize products and services for the enterprise market in a timely manner with competitive pricing, features and performance; BlackBerry’s ability to maintain or expand its customer base for its software and services offerings to grow revenue or achieve sustained profitability; the intense competition faced by BlackBerry; the occurrence or perception of a breach of BlackBerry’s network or product security measures or an inappropriate disclosure of confidential or personal information could significantly harm its business; risks related to BlackBerry’s continuing ability to attract new personnel, retain existing key personnel and manage its staffing effectively; BlackBerry’s dependence on its relationships with resellers and channel partners; risks related to acquisitions, divestitures, investments and other business initiatives, which may negatively affect BlackBerry’s results of operations; risks related to BlackBerry’s products and services being dependent upon interoperability with rapidly changing systems provided by third parties; the risk that failure to protect BlackBerry’s intellectual property could harm its ability to compete effectively and BlackBerry may not earn the revenues it expects from intellectual property rights; the risk that BlackBerry could be found to have infringed on the intellectual property rights of others; the risk that litigation against BlackBerry may result in adverse outcomes; risks related to the use and management of user data and personal information, which could give rise to liabilities as a result of legal, customer and other third-party requirements; BlackBerry’s ability to obtain rights to use third-party software; the risk that network disruptions or other business interruptions could have a material adverse effect on BlackBerry’s business and harm its reputation; BlackBerry’s ability to generate revenue and profitability through the licensing of security software and services or the BlackBerry brand to device manufacturers; the substantial asset risk faced by BlackBerry, including the potential for charges related to its long-lived assets and goodwill; risks related to BlackBerry’s indebtedness, which could adversely affect its operating flexibility and financial condition; risks related to government regulations applicable to BlackBerry’s products and services, including products containing encryption capabilities, which could negatively impact BlackBerry’s business; risks related to foreign operations, including fluctuations in foreign currencies; risks associated with any errors in BlackBerry’s products and services, which can be difficult to remedy and could have a material adverse effect on BlackBerry’s business; risks related to the failure of BlackBerry’s suppliers, subcontractors, channel partners and representatives to use acceptable ethical business practices or to comply with applicable laws, which could negatively impact BlackBerry’s business; BlackBerry’s reliance on third parties to manufacture and repair its hardware products; risks related to the Company’s success in fostering an ecosystem of third-party application developers; risks related to regulations regarding health and safety, hazardous materials usage and conflict minerals, and to product certification risks; risks related to tax provision changes, the adoption of new tax legislation or exposure to additional tax liabilities, which could materially impact BlackBerry’s financial condition; risks related to the fluctuation of BlackBerry’s quarterly revenue and operating results; the volatility of the market price of BlackBerry’s common shares; and risks related to adverse economic and geopolitical conditions, which may negatively affect BlackBerry.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="These risk factors and others relating to BlackBerry are discussed in greater detail in BlackBerry's Annual Information Form, which is included in its Annual Report on Form 40-F and the "Cautionary Note Regarding Forward-Looking Statements" section of BlackBerry's MD&amp;A (copies of which filings may be obtained at www.sedar.com or www.sec.gov). All of these factors should be considered carefully, and readers should not place undue reliance on BlackBerry’s forward-looking statements. Any statements that are forward-looking statements are intended to enable BlackBerry’s shareholders to view the anticipated performance and prospects of BlackBerry from management’s perspective at the time such statements are made, and they are subject to the risks that are inherent in all forward-looking statements, as described above, as well as difficulties in forecasting BlackBerry’s financial results and performance for future periods, particularly over longer periods, given changes in technology and BlackBerry’s business strategy, evolving industry standards, intense competition and short product life cycles that characterize the industries in which BlackBerry operates. BlackBerry has no intention and undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.” data-reactid=”67″>These risk factors and others relating to BlackBerry are discussed in greater detail in BlackBerry’s Annual Information Form, which is included in its Annual Report on Form 40-F and the “Cautionary Note Regarding Forward-Looking Statements” section of BlackBerry’s MD&A (copies of which filings may be obtained at www.sedar.com or www.sec.gov). All of these factors should be considered carefully, and readers should not place undue reliance on BlackBerry’s forward-looking statements. Any statements that are forward-looking statements are intended to enable BlackBerry’s shareholders to view the anticipated performance and prospects of BlackBerry from management’s perspective at the time such statements are made, and they are subject to the risks that are inherent in all forward-looking statements, as described above, as well as difficulties in forecasting BlackBerry’s financial results and performance for future periods, particularly over longer periods, given changes in technology and BlackBerry’s business strategy, evolving industry standards, intense competition and short product life cycles that characterize the industries in which BlackBerry operates. BlackBerry has no intention and undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.

BlackBerry Limited

Incorporated under the Laws of Ontario

(United States dollars, in millions except share and per share amounts) (unaudited)

Consolidated Statements of Operations

For the Three Months Ended

For the Nine Months Ended

November 30,
2019

August 31,
2019

November 30,
2018

November 30,
2019

November 30,
2018

Revenue

$

267

$

244

$

226

$

758

$

649

Cost of sales

69

68

56

207

157

Gross margin

198

176

170

551

492

Gross margin %

74.2

%

72.1

%

75.2

%

72.7

%

75.8

%

Operating expenses

Research and development

66

62

55

199

167

Selling, marketing and administration

132

132

93

385

299

Amortization

49

48

33

146

105

Debentures fair value adjustment

(20)

(23)

(69)

(71)

(111)

227

219

112

659

460

Operating income (loss)

(29)

(43)

58

(108)

32

Investment income (loss), net

(1)

—

2

2

13

Income (loss) before income taxes

(30)

(43)

60

(106)

45

Provision for income taxes

2

1

1

5

3

Net income (loss)

$

(32)

$

(44)

$

59

$

(111)

$

42

Earnings (loss) per share

Basic

$

(0.06)

$

(0.08)

$

0.11

$

(0.20)

$

0.08

Diluted

$

(0.07)

$

(0.10)

$

(0.01)

$

(0.27)

$

(0.09)

Weighted-average number of common shares outstanding (000s)

Basic

554,585

552,343

540,406

552,931

538,251

Diluted

615,085

612,843

600,906

613,431

598,751

Total common shares outstanding (000s)

552,132

548,336

547,084

552,132

547,084

 

BlackBerry Limited

Incorporated under the Laws of Ontario

(United States dollars, in millions) (unaudited)

Consolidated Balance Sheets

As at

November 30, 2019

February 28, 2019

Assets

Current

Cash and cash equivalents

$

515

$

548

Short-term investments

367

368

Accounts receivable, net

216

233

Other receivables

13

19

Income taxes receivable

10

9

Other current assets

58

56

1,179

1,233

Restricted cash and cash equivalents

32

34

Long-term investments

56

55

Other long-term assets

23

28

Deferred income tax assets

—

2

Operating lease right-of-use assets

133

—

Property, plant and equipment, net

76

85

Goodwill

1,459

1,463

Intangible assets, net

955

1,068

$

3,913

$

3,968

Liabilities

Current

Accounts payable

$

27

$

48

Accrued liabilities

193

192

Income taxes payable

19

17

Debentures

609

—

Deferred revenue, current

264

253

1,112

510

Deferred revenue, non-current

117

136

Operating lease liabilities

127

—

Other long-term liabilities

8

19

Long-term debentures

—

665

Deferred income tax liabilities

1

2

1,365

1,332

Shareholders’ equity

Capital stock and additional paid-in capital

2,742

2,688

Deficit

(157)

(32)

Accumulated other comprehensive loss

(37)

(20)

2,548

2,636

$

3,913

$

3,968

 

BlackBerry Limited

Incorporated under the Laws of Ontario

(United States dollars, in millions) (unaudited)

Consolidated Statements of Cash Flows

For the Nine Months Ended

November 30, 2019

November 30, 2018

Cash flows from operating activities

Net income (loss)

$

(111)

$

42

Adjustments to reconcile net income (loss) to net cash used in operating activities:

Amortization

160

116

Stock-based compensation

46

53

Non-cash consideration received from contract with a customer

(8)

—

Debentures fair value adjustment

(71)

(111)

Other long-term assets

—

2

Operating leases

(12)

—

Other

9

4

Net changes in working capital items:

Accounts receivable, net

17

13

Other receivables

6

46

Income taxes receivable

(1)

13

Other assets

3

(1)

Accounts payable

(21)

(14)

Income taxes payable

2

(1)

Accrued liabilities

(24)

(57)

Deferred revenue

(10)

(23)

Other long-term liabilities

7

—

Net cash provided by (used in) operating activities

(8)

82

Cash flows from investing activities

Acquisition of long-term investments

(1)

(2)

Proceeds on sale or maturity of long-term investments

—

2

Acquisition of property, plant and equipment

(9)

(14)

Proceeds on sale of property, plant and equipment

—

1

Acquisition of intangible assets

(24)

(24)

Business acquisitions, net of cash acquired

1

—

Acquisition of short-term investments

(829)

(2,754)

Proceeds on sale or maturity of short-term investments

830

2,962

Net cash provided by (used in) investing activities

(32)

171

Cash flows from financing activities

Issuance of common shares

8

5

Finance lease liability

(2)

—

Net cash provided by financing activities

6

5

Effect of foreign exchange loss on cash, cash equivalents, restricted cash, and restricted cash equivalents

(1)

(3)

Net increase (decrease) in cash, cash equivalents, restricted cash, and restricted cash equivalents during the period

(35)

255

Cash, cash equivalents, restricted cash, and restricted cash equivalents, beginning of period

582

855

Cash, cash equivalents, restricted cash, and restricted cash equivalents, end of period

$

547

$

1,110

As at

November 30, 2019

February 28, 2019

Cash and cash equivalents

$

515

$

548

Restricted cash and cash equivalents

$

32

$

34

Short-term investments

$

367

$

368

Long-term investments

$

56

$

55

 

Cision

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SOURCE BlackBerry Limited

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US auto workers expand strike as Biden prepares to join picket line – Al Jazeera English

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3 hours ago

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September 22, 2023

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Manufacturers say American autoworker strike could idle Canadian supplier plants

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4 hours ago

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September 22, 2023

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American autoworkers will strike at 38 more supplier plants as of noon Friday, the union representing workers announced, citing little progress in negotiations with two of the three Detroit automakers.

Shawn Fain, president of the United Auto Workers (UAW), said Ford had made progress on their offer, but that Stellantis and GM hadn’t — prompting him to call strikes at those companies’ supplier plants across 20 states.

Earlier this week, 13,000 workers at three facilities were striking General Motors, Ford and Stellantis. They are now on their eighth day of  job action. Those strikes will continue, Fain said.

Progress by Ford included reinstating the cost of living allowance formula the union lost in 2009, an enhanced profit sharing formula and the immediate conversion of temporary employees with 90 days’ service upon ratification

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The ongoing strike by autoworkers at automotive plants in the United States will idle manufacturing plants in Canada in a matter of days, according to industry experts.

Flavio Volpe is head of the Automotive Parts Manufacturers’ Association, which represents companies that build components for vehicles being built in North America.

He said companies let out a “sigh of relief” when the tentative deal between Unifor and Ford was announced.

But he said those companies are worried about the United Auto Workers threats to expand job action if General Motors, Ford and Stellantis do not make “serious progress” on the union’s contract demands.

Volpe said that if strike action at a Jeep production plant continues, parts makers in Canada will adjust their production schedules next week.

“Auto part companies, employers that I represent, will idle those plants,” said Volpe.

Timing tough for rebounding manufacturing sector

The North American auto industry operates on a just-in-time production schedule where the Detroit Three automakers buy parts from large tier-one supplier plants that source components for those parts from smaller, tier-two supplier plants.

A string of global crisis level events that includes the disruptive and deadly COVID-19 pandemic, as well as an on-going global microchip shortage, has put those smaller supplier plants in difficult financial positions.

That’s made the timing of the UAW strike difficult for tier-one and tier-two suppliers — “especially given the interruptions over the last three years and how thin everybody’s balance sheets have become,” said Volpe.

‘Tremendous strain’ on automotive parts suppliers as UAW strike continues

Supply chain expert and Gravitas Detroit founder Jan Griffiths tells the CBC’s Chris Ensing some automotive suppliers are in a tough position with ongoing strike action in the United States, a tight labour market, and thin cash reserves. Griffiths, who was a global lead at a tier one supplier for decades, said open communication between suppliers could help companies survive.

Dennis Darby represents thousands of companies responsible for more than 80 per cent of the Canadian manufacturing sector as president of the Canadian Manufacturers and Exporters Association (CME).

“This could not come at worse time,” he told CBC News.

Darby is in Washington, D.C., this week meeting with his North American counterparts and said the strike is top of mind.

He believes manufacturing companies he represents in Canada are bracing for impact, which he believes will hit in a matter of days.

“All the all the big companies obviously are affected, you know the big ones like Magna. But of course so are lots of secondary and tertiary suppliers that make components in the system,” said Darby.

He welcomed the news of a tentative agreement between Unifor and Ford that, if ratified by members, will prevent strike action that would shut down engine and assembly plants in Ontario.

Labour action shows cracks in the system

Automotive and supply chain expert Jan Giffiths believes that it’s the tier-two suppliers that are in a difficult position right now because of the pandemic disruptions, a tight labour market with increasing wages and the global microchip crisis.

“All of these things coming together is putting a tremendous amount of strain on the tier two supply base and now you throw a strike in on top of that? The dominoes are going to start to fall.”

Griffiths, who has decades of experience leading global tier one supply chain organizations and is the founder of Gravitas Detroit, said suppliers in the United States are already issuing layoff notices.

“If your customer stops sending you orders because they’re not building cars, then what what do you do? You have to conserve cash to survive,” said Griffiths, adding that would traditionally mean laying people off.

What could the UAW strike mean for car buyers in Canada?

Flavio Volpe, president of the Automotive Parts Manufacturers’ Association, says if the strike is prolonged, people looking to buy a car could see an effect on both price and availability.

But there’s a high demand for skilled manufacturers in Canada and the United States, which may see companies look for creative ways to keep employees on the payroll instead of laying them off.

“That would be the last lever that you would pull because trying to bring qualified people back and go through a whole retraining and startup initiative is going to be extremely difficult,” said Griffiths.

Volpe said the companies he represents will also be looking at ways to keep people on staff.

“They will hang on tightly to employees there because of the incredibly tight labour market and the last thing anybody wants to do is lose good people and have to scour the market for new ones.”

Darby, who said the majority of manufacturers supplying the auto industry operate along the Highway 401 corridor in Ontario, believes affected suppliers will reduce hours or try to land other contracts.

“What we saw during COVID in the short run, people found ways to try to retain their folks even if it meant fewer hours because it’s a lot easier than trying to find a replacement.”

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Canada Post reviewing use of address data following criticism from privacy watchdog

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5 hours ago

 on

September 22, 2023

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OTTAWA –

Canada Post says it is reviewing how it uses data for tailored marketing campaigns after the federal privacy watchdog found the post office was breaking the law by gleaning information from the outsides of envelopes and packages.

Privacy commissioner Philippe Dufresne said in a report released this week that information collected for the post office’s Smartmail Marketing Program includes data about where individuals live and what type of online shopping they do, based on who sends them packages.

The information is then used to help build marketing lists that Canada Post rents to businesses.

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The commissioner found Canada Post had not obtained authorization from individuals to indirectly collect such personal information, a violation of Section 5 of the Privacy Act.

In a statement today, Canada Post says it is committed to the privacy law and the protections it places on personal information, and will therefore review its data services program.

The post office says it understands the public might have concerns and that it will live up to the standards that Canadians expect.

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