Wednesday, 11th October
Canadian Prime Minister Justin Trudeau was the featured guest at Fortune‘s Most Powerful Women gala dinner last night, and wowed the women with his charm, as well as his commitment to gender parity. Trudeau said he came to Washington primarily to meet with the 400 female business leaders, and added today’s meeting with President Trump afterwards.
Despite reports that the two countries are at loggerheads in their negotiations over NAFTA, Trudeau emphasized the importance of unity. “Canada and the U.S. have a connection unlike any two countries in the world.” The two “are tremendously intertwined. When one does well the other does well. And when we both do well, we are unstoppable.”
Trudeau also said his goal and the President’s goal are fundamentally the same—”reassuring people that the benefits of trade will be spread more broadly.” During the dinner, the Prime Minister was seated between his wife and Ivanka Trump.
You can read more news about the summit here.
Meanwhile, P&G CEO David Taylor said activist Nelson Peltz has lost his epic and expensive bid for a seat on the company’s board. But Peltz told Fortune‘s Shawn Tully that the count is preliminary, and he’s not conceding.
“The vote is too close to call,” Peltz said. “This morning, our proxy firm said we were up by 175 million votes. We knew P&G had 100 million shares they could vote themselves, and 100 million that were held by employees, who could vote either way. We sat on another 20 million shares. Think about those numbers! If they won or lost, it was by 1%.”
Peltz added: “If they were smart, they would be magnanimous now and say, even though we won, we’re putting Nelson Peltz on the board because the vote was so close.”
Don’t count on that.
More news below.
• Stocks Hit New High on Catalonia Relief
Global stocks hit fresh record highs after Catalonia backed off from its threat to declare independence from Spain. Regional government leader Carles Puigdemont said the region had “deserved” independence but said he would first seek dialogue with the central government. Prime Minister Mariano Rajoy responded by taking an equally symbolic step towards revoking home rule for the region, but framed it as a request for more information from Barcelona. The euro, and Eurozone stocks, leaped in response. The International Monetary Fund also lifted the mood by raising its growth forecast for the world economy by 0.1% to 3.6% this year and 3.7% next year, up from 3.2% in 2016. Reuters
• Japan Inc.’s Next Great Scandal Is in Motion
Toshiba’s accounting scandal may be reaching its denouement with the sale of its memory chip business, but the next sorry tale of Japanese corporate governance is already clear. Kobe Steel has lost over 33% of its value after it admitted at the weekend that it had falsified data about the quality of copper and aluminum parts used in vehicles, aircraft, and space rockets. The falsifications may go back as far as 10 years and raise the possibility of expensive product recalls, even though there are no indications so far that its products have been defective or dangerous. On Wednesday, the company added that it may also have fabricated data on iron powder products used in automotive gears. Bloomberg
• The Lady Not Bound by NDA Doth Protest Too Much, Methinks
The torrent of allegations against disgraced movie mogul Harvey Weinstein continued in full spate. Gwyneth Paltrow and Angelina Jolie both came forward with tales of unwanted advances, while the New Yorker reported allegations, up to and including rape, from 13 women. The New Yorker story highlights the abuse of non-disclosure agreements to inhibit victims and witnesses from coming forward. Weinstein denied the allegations through a spokeswoman. Hillary Clinton, a long-time beneficiary of Weinstein’s support, broke a three-day silence to say she was “shocked and appalled” by the revelations. Weinstein’s wife Georgina Chapman, meanwhile, told People she would leave him, taking their two children. People
• BMW Plans an EV JV in China
BMW is in talks to form a new joint venture with China’s Great Wall to make electric vehicles, according to Reuters. The news pushed Great Wall’s shares up 15% in Hong Kong. BMW has failed to build on its early success with its i-Series and, like its German peers, risks not having an affordable product in the fastest-growing segment of the world’s largest auto market. The deal comes only a couple of weeks after China formalized its mandate for electric vehicles, requiring 10% of new sales to have alternative fuel engines from 2019. Fortune
Around the Water Cooler
• Zuckerberg Apologizes for Puerto Rico VR Tour
Facebook CEO Mark Zuckerberg apologized for using footage of hurricane-ravaged Puerto Rico to show off the company’s new virtual reality platform, Facebook Spaces. He still didn’t take down from the social network a video in which he delivered such gems as “one of the things that’s really magical about VR is that you can get the feeling you’re really in a place.” Some speculated that taking Zuckerberg’s electricity and water supply away for a week or two might make that magical experience even more real. To its credit, Facebook has given $1.5 million to disaster relief on the island and also dispatched a team to provide emergency telecommunications support. Fortune
• Goodell Sounds the Alarm Over NFL’s Player Protests
Commissioner Roger Goodell wrote to every team in the NFL urging them to “move past” the controversy over player protests during the national anthem. Elsewhere, ESPN suspended host Jemele Hill for appearing to advocate, via Twitter, a boycott of the Dallas Cowboys (whose owner Jerry Jones had followed President Trump’s exhortation to bench players who protest). Hill had already been in hot water with her employer for calling the president a ‘white supremacist’. Fortune
• Too Much of a Good Thing
Subsidized competition is great for consumers but you can have too much of a good thing, it seems. Etihad and Emirates Airlines, which have raised hackles (especially in the U.S.) by using quasi-sovereign backing in the UAE to compete in the global long-haul market, may be on the verge of forming an alliance. So far, rivalry between the emirates of Abu Dhabi (Etihad) and Dubai (Emirates) has stopped the two cooperating until now, but Etihad’s strategy of expanding through European airlines such as Air Berlin and Alitalia has gone badly wrong, and Emirates is struggling to fill the A380 superjumbos it bought at immense cost form Airbus. Emirates president Tim Clark told Reuters he’s open to cooperation with Etihad. Reuters
• Red Faces at Fox After Soccer Shock
The U.S.’s men’s soccer team failed to qualify for the FIFA World Cup finals for the first time in 30 years, leaving 21st Century Fox’s $200 million bet on national TV rights looking like an expensive mistake. On the bright side, at least we won’t have to endure an argument over boycotting the tournament to punish Russia (which is hosting it) for election-hacking. And it shouldn’t impair anyone’s enjoyment when Panama or the Honduras (or Iceland) inevitably knocks England out next summer. SI
Summaries by Geoffrey Smith; email@example.com