A labour stoppage in Canada was the centre of attention for many US corporations Thursday.

Canadian National Railway and Canadian Pacific Kansas City, the two largest railroad operators in America’s northern neighbour, came to a screeching halt after they locked out 9,300 employees over a contract dispute. Industry bodies warned of a potentially “devastating” catalogue of economic horrors.

The Polar Express Distress

Almost half of Canada’s land surface is underlain by permafrost, according to the federal government, and now almost 80% of its freight railways are (temporarily) frozen. Moody’s analysts estimate it will cost the Canadian economy up to $250 million a day. The US is potentially in for some lumps, too.

The US and Canadian Chambers of Commerce sounded the alarm, jointly stating a lockout will be “devastating to Canadian businesses and families and impose significant impacts on the US economy.” The Canadian Chamber noted an overlapping labor stoppage to both railways — a first — would impact $730 million worth of goods each day. Some $114 billion in freight was moved between the US and Canada by train last year, or roughly 16% of the total exchanged between the two countries according to the US Bureau of Transportation Statistics. Car plants could shut down, retailers could be short of goods, and few areas of the economy would go untouched:

• The US imported $40 billion in Canadian agricultural products last year, according to the US Department of Agriculture. But a consortium of North American agricultural associations warned that, because things like grains and fertilizer are moved in such mass quantities, alternative modes of shipping are simply “not a viable option.”
• The American Chemistry Council raised the alarm too, noting the US imports nearly $25 billion in chemicals from its northern neighbor every year, and that 60% of the chlorine used by Western US water-treatment plants originates in Canada. 

The Canadian government has the power to force the two parties into arbitration, but has so far declined despite industry urgings. 

(Don’t Just) Blame Canada: Previous Canadian rail disputes in 2015 and 2019 ended in a matter of days, but the world may have more in store. Port-worker unions in India have planned a national strike beginning Aug. 28, and the 85,000 dockworkers represented by the International Longshoremen’s Association at 36 US East and Gulf Coast ports are threatening to strike when their contract expires in October.

German efficiency is about to catch up with American corporate ruthlessness.

Germany’s Handelsblatt financial newspaper reported on Thursday that the government is planning to make it easier for companies in the financial sector to fire high-earning employees. It’s a move aimed at enticing big American banks to set up European HQs in Germany’s finance hub, Frankfurt — but Germany isn’t the only EU country trying to win over Wall Street.

The Americans Are Coming

Ever since Britain left the European Union, making London no longer a conduit to the continent’s financial systems, big American banks have been shopping around the best EU countries to call home. The problem for some US mega banks has been a severe culture shock when it comes to EU labor laws. Some US banks headed for Paris, but were shocked at France’s laws prohibiting when you can fire someone, or else mandating hefty severance packages. For banks like Goldman Sachs — which is used to cutting 3-5% of its employees in any given year just to keep things fresh — that’s an issue.

France, like Germany, tried to introduce new laws to make bankers easier targets for dismissal, but it hit a barricade:

• That legislation was proposed by Emmanuel Macron, who lost the presidency after calling a chaotic snap election, so it’s now stuck in limbo (although it had already run into some regulatory roadblocks before Macron blew up his majority). Germany is striking while the iron’s chaud.
• A German government document seen by Bloomberg included incentives for banks, such as raising the threshold on tax-free employee share ownership and tax cuts for investments in venture capital.

Two-Way Street: While Germany tries to tempt US banks onto the banks of the Main, it’s also trying to make inroads with America’s wealthy on its home turf. Fortune reported last month that Deutsche Bank is targeting a big expansion in the US wealth management market, setting itself up as a European rival to Wall Street.

It’s a marathon comeback that only hours and hours of sweaty stationary bike training could’ve prepared you for.

In its earnings call Thursday, Peloton reported sales growth of 0.2% in the latest quarter. It may not sound like much, but it’s the first three-month period of year-over-year revenue growth the workout-from-home company has seen since… late 2021. The win was enough to send its share price soaring 35%.

Let’s Grow, Peloton!

Just mere months ago, Peloton was huffing and puffing through dire straits. After over a dozen consecutive quarters of losses and one massive product recall, CEO Barry McCarthy stepped down in May. (The company remains CEO-less, with board members Karen Boone and Chris Bruzzo holding co-interim positions amid a job search.) Just days later, reports surfaced that at least one private equity firm was eyeing a takeover. 

As the vultures circled, Peloton worked to prioritize profits over growth, slashing costs in the process. And now the turnaround plan, like its virtual exercise regimes, is starting to show tangible results:

• In May, the company laid off 15% of its employees. It said Thursday that it cut sales and marketing spending by 19% year-over-year in the previous quarter. That allowed it to narrow losses to $30.5 million, well down from $241 million a year ago, and increase free cash flow from negative $74 million a year ago to positive $26 million this quarter.
• Meanwhile, revenue hit $643.6 million, up 0.2% year-over-year, easily besting Wall Street’s expectations as well as the typical summer slowdown for exercise companies. 

Uphill Climb: It’s not all good news, however. The company also announced that it is anticipating sales between $560 million and $580 million in the current quarter, short of most analyst estimates of $609 million. It also warned of a coming 3% dip in subscribers using its hardware, and as much as a 26% dip in paid app users — likely casualties of macroeconomic headwinds and slashed marketing. In other words: Peloton’s comeback is still just building momentum. Adjust your pedal resistance settings accordingly.