Good Friday morning.
At CEO Daily, we write a lot about how the next generation of technology is going to transform virtually every function at every company in every industry. Yesterday, I spent a couple of hours with IBM CEO Ginni Rometty and her top team in Armonk, and came away convinced even more of just how profound that transformation is going to be.
Diane Gherson, IBM’s senior vice president for HR, told me about how the company is using Watson technology to transform the HR function–often the most backward, and least automated, corporate division. The technology is being used to help process and screen future employees, scan current employees for flight risk, make pay recommendations, answer complicated HR questions via chat bots, and provide personalized, online training recommendations for employees. The company says HR is one of the fast-growing areas for applying Watson technology.
And Bridget van Kralingen, senior vice president for industry platforms, told me about how blockchain technology is being used by Walmart and others in the food industry to keep track of the source of food for safety reasons, and by Maersk in the shipping industry to greatly reduce paperwork and port time. She sees vast applications in supply chains, payment systems, and personal identity.
It’s because of these kinds of changes that Fortune has teamed up with McKinsey & Co. to launch Brainstorm Reinvent, a two-day conference to help non-tech business leaders understand the rapid tech changes coming their way. We’ll be holding our first meeting in Chicago on September 24-25. It’s by invitation only for C-level executives, but if you’re interested in attending, you can email me or apply for an invitation here. I’ll be in Chicago next week, hosting a dinner with business leaders to gather ideas for our inaugural event.
Enjoy the weekend. News below.
The story so far: President Trump threatens China with big tariffs; President Xi makes conciliatory noises this week about opening up the economy; but the Chinese authorities say this doesn’t mean they won’t retaliate if Trump throws more fuel on the fire. Now the Wall Street Journal reports that, believing his hardline approach is succeeding, Trump is planning to lob more tariffs at China and to block Chinese tech investment in the U.S. WSJ
With President Trump signaling that he might be open to the U.S. returning to the Trans-Pacific Partnership (TPP) trade agreement, how do the other countries involved in the pact—who have since forged ahead without the U.S.—feel about the idea? Good, say Japan, Australia and New Zealand. But there’s a catch. Trump only wants back in if the U.S. can win better terms, and those countries’ trade officials say they are not open to renegotiation. Financial Times
Postal Service Review
President Trump has ratcheted up the pressure on Amazon by ordering a review of the U.S. Postal Service’s business practices. “The USPS is on an unsustainable financial path and must be restructured to prevent a taxpayer-funded bailout,” he said in an executive order. Trump is convinced that Amazon takes advantage of the Postal Service, and has previously said the firm costs the service “massive amounts of money for being their Delivery Boy.” Fortune
Scandal-hit Matthias Mueller is finally out as CEO at Volkswagen Group, which has installed in his place Herbert Diess, a noted cost-cutting advocate. Diess, who now controls VW as well as many other carmakers within the group, will retain his role as Volkswagen brand chief. The group is being restructured, with three new core divisions including “volume” (VW, Skoda, Seat), “premium” (Audi), and “super premium” (Porsche, Bugatti, Lamborghini and Bentley). Autocar
Around the Water Cooler
News organizations have for the first time got their hands on James Comey’s book, A Higher Loyalty, which is due out next week. Comey apparently likens President Trump, who fired him, to a mob boss demanding loyalty oaths. He also says Chief of Staff John Kelly, who was at the time heading up Homeland Security, offered to quit in protest at Comey’s dismissal, but Comey urged him to stay. Bloomberg
When Tesla paid DeWitt Lambert to settle a racial discrimination case, it reportedly told him it would only do so if there was no publicity before the settlement, according to the Guardian. “If there is media attention first, there will be no deal,” a letter to Lambert’s lawyers reportedly read. The piece claims such tactics are “particularly intense at Tesla.” Guardian
The debate over encrypted messaging apps just heated up again in Russia, where a Moscow court has ordered the Telegram app blocked. Telegram refused to give the authorities encryption keys to users’ conversations—indeed, as with rivals such as WhatsApp, the design of Telegram should make it impossible for the service provider to hand over the keys, as it doesn’t have them; they’re stored on users’ devices. Fortune
Europe’s strict new privacy laws don’t just relate to Facebook, the whipping boy of the day, EU Justice Commissioner Vera Jourova has warned. “I don’t have doubts that are some bad practices among other IT providers and networks,” she said. “We want Europeans to be the masters of their privacy and it must be guaranteed by anyone who is collecting the data, who is monetizing and selling the data.” CNBC