WeWork on the brink of collapse | Ram trucks under investigation for steering issues | Boeing hit by supply chain disruptions

Welcome to Portfolio Intelligence Daily, where we highlight under the radar investment themes and idiosyncratic company risks.?

Today:?

• WeWork on the brink of collapse
• Ram trucks under investigation for steering issues
• Boeing hit by supply chain disruptions

Auquan’s analyst team curates these summaries using our Risk Intelligence Engine using NLP and generative AI to uncover unique insights at scale. We focus on incidents involving emerging markets, supply chain issues, financially-material ESG risks, and the impact of regulatory changes.

WeWork on the brink of collapse

WeWork (WE) is warning that it is unlikely to stay in business over the next year due to its financial losses, need for cash, and other factors.

• WeWork, which leases buildings and divides them into office spaces to sublet to its members, is facing financial challenges due to high operating expenses, member turnover rates, and reliance on private investors. The company plans to negotiate more favorable lease terms, control spending, and seek additional capital.
• WeWork's stock price has fallen below $1 since mid-March and tumbled another 26% in extended trading on Tuesday to 15 cents, giving the company a market capitalization of less than $500 million.
• WeWork employs over 12,000 people worldwide.?
• If WeWork ceased operations it could lead to higher prices for workspace-sharing services and could make it more difficult for small businesses and startups to access workspace.

“Our losses and negative cash flows from operating activities raise substantial doubt about our ability to continue as a going concern. If we are not successful in improving our liquidity position and the profitability of our operations, we may need to consider all strategic alternatives, including restructuring or refinancing our debt, seeking additional debt or equity capital, reducing or delaying our business activities and strategic initiatives, or selling assets, other strategic transactions and/or other measures, including obtaining relief under the U.S. Bankruptcy Code.” — WeWork company statement

Select coverage

• August 9, 2023 | WeWork, once valued at $40 billion, warns of possible bankruptcy as it submits 'going concern' notice (NBC News)
• August 8, 2023 | WeWork Tumbles After Raising ‘Substantial Doubt’ About Future (Bloomberg)
• August 8, 2023? | WeWork Cites 'Substantial Doubt' That It Can Stay in Business (NYT)

Tags: #wework #bankruptcy #startups #coworking #cre?

Ram trucks under investigation for steering issues

The National Highway Traffic Safety Administration (NHTSA) is investigating whether to recall 1.1 million Ram 1500 pickup trucks due to power steering loss issues, which have been reported in 380 cases, including three crashes.

• The investigation covers pickups from model years 2013 through 2016.
• Fiat Chrysler Automotive (now known as Stellantis) recalled 440 vehicles in March 2016 for possible contamination of the electrical power steering unit, and the NHTSA is investigating whether similar failures may be occurring in vehicles outside of the recall scope, based on complaints received.
• Many complaints about power steering loss in Ram 1500 pickup trucks cited expensive repairs or long waits for parts. One driver said the steering wheel "seized and became immobile" at 55 mph on a busy road.

Select coverage

• August 8, 2023 | NHTSA investigating power steering failure in 1.1 million Ram pickup trucks (AutoBlog)
• August 8, 2023 | US agency opens probe into 1.1 mln Ram 1500 pickup trucks over steering issues (Reuters)
• August 8, 2023 | NHTSA probes 2013-2016 Ram pickups for power steering (Automotive News)

Tags: #nhtsa #fiatchrysler #safety #automotive #recall

Boeing hit by supply chain disruptions

Boeing delivered 30 airplanes in July, fewer than Airbus's 56 deliveries. The U.S. planemaker is still working through logistics and supply chain disruptions affecting its bestselling 737 narrowbody jet.

• Boeing's deliveries of 737 MAX jets fell to 32 in July, from 48 in June, marking the lowest level since April. This is due to the company's discovery that brackets had been incorrectly installed on the vertical tail of around 75% of the 737s in its inventory.
• Boeing CEO Dave Calhoun previously warned that supply constraints in the aerospace industry could last for more than half a decade, hampering the industry's rebound from the COVID-19 pandemic.
• Boeing and Airbus are struggling to increase production at a time when airlines are clamouring for new jets to meet the surge in demand for travel
• Supply constraints are also a hurdle for existing fleets, forcing airlines to ground some planes

Select timeline

• August 8, 2023 | Boeing deliveries fall in July amid 737 supply chain hurdles (KFGO)
• May 23, 2023 | Boeing CEO warns supply-chain constraints could last ‘very long time’ (Bloomberg)
• March 7, 2023 | Freighter Shortage Looming, Executives Warn ISTAT (Aviation Week)

Tags: #boeing #airbus #aircraftshortage #supplychain #airbus?

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