Equity analyst fingers unions

After the blows many investment banks’ reputations took in 2002, equity researchers might have been expected to keep their heads down. Not Steve Galbraith, who put his foot deftly in his mouth with a note advising clients to avoid investing in companies with highly unionized workforces.

“Look for the union label – and run the other way,” Morgan Stanley’s chief US market strategist argued, explaining: “Rigidity in labour costs, processes and pension requirements, while perhaps beneficial to employees, may prove toxic to shareholders.”