The atmosphere of the Rust Belt pervades this morning’s news of power and leadership.
| Produced by Ryan Derousseau | |
| @ryanderous | |
| powersheet@newsletters.fortune.com |
In Germany for the Frankfurt auto show, General Motors CEO Mary Barra stated – again – that she has no interest in merging with Fiat Chrysler Automobiles. FCA chief Sergio Marchionne has been begging GM for a deal, knowing that FCA is just too small to compete in a world of a few mammoth automakers. He even emailed Barra last spring proposing a merger, and FCA chairman John Elkann later said that GM “wasn’t the only one” that FCA approached. Nobody’s biting. “We looked at it very, very carefully and in tremendous detail,” Barra said at a news conference yesterday. “It’s just not in the interest of GM shareholders, and I think that message is resonating with shareholders.” She’s wise to be focusing on them. GM stock has been trending downward since she became CEO and the ignition switch mess was revealed in early 2014, and the last thing she needs is a big capital outlay that won’t earn big returns. As for Marchionne…
…he’s been facing unexpected angst since United Auto Workers chief Dennis Williams announced Sunday he will focus on FCA as the first of the Detroit Three to reach a new contract agreement; the old contract expired at midnight last night, and as I write this, the negotiators are still working. Williams’s choice of the smallest and weakest of the three is an unorthodox strategy that surprised everyone. Marchionne quickly canceled his trip to the Frankfurt auto show in order to stay at headquarters in Auburn Hills. The whole industry studying the wheels within wheels shaping the fortunes of a big, old labor union in an industry now returning to prosperity. And speaking of labor unions…
…Wisconsin Governor and fading presidential candidate Scott Walker, who attracted national attention by fighting public-sector unions, yesterday proposed pretty much eviscerating what’s left of unions in the U.S. If elected president, he said, he would eliminate the National Labor Relations Board, outlaw federal employee unions, impose nationwide right-to-work laws, and repeal the 84-year-old Davis-Bacon law, which has the effect of raising pay for workers on federal construction projects. Walker has not a prayer of making any of this come to pass, even assuming he has a prayer of becoming president. But he apparently believes the proposal will help revive his weakening prospects, and it will be instructive to see if he’s right. If he is – if he energizes a latent, broad-based anti-union sentiment in the country – then the continuing Rust Belt revolution could get much more dramatic.
What We're Reading Today
BMW, Toyota may strengthen bond
The largest premium auto brand, BMW, and the biggest automaker, Toyota, already work together on fuel cell technology. That relationship could soon grow stronger, says BMW CFO Friedrich Eichiner, as the two sides invest in other technology to keep up with Google, Tesla, and Apple, plus traditional carmakers. BMW CEO Harald Krüger fainted on stage during his first major public appearance at the Frankfurt Auto Show. The company says he's okay. MarketWatch
Shoddy oversight led to Obamacare website's early struggles
An internal audit finds that the group overseeing 20 contractors hired for healthcare.gov's launch - a $600-million project - had poor instructions and leadership from the Centers for Medicare and Medicaid Services (CMS), which manages Obamacare. Some at the CMS still don't have the proper training to supervise the contractors. The findings help explain the botched launch of healthcare.gov in Oct. 2013, which sparked searing criticism of then-Department of Health and Human Services Secretary Kathleen Sebelius and President Barack Obama. Bloomberg
Men's Warehouse creator launches tux company
It's the second company started this year by George Zimmer, who was ousted by the Men's Wearhouse board in 2014. Generation Tux, a tuxedo rental site, will compete directly with Men's Wearhouse, which is the largest U.S. tuxedo rental service but doesn't rent them online. (Zimmer's other startup is zTailor, which he calls "an Uber for tailors.") Zimmer is financing the new company mostly with his own money. NYT
Apple says iPhone 6s orders look strong
At the current pace, they could surpass the record 10 million iPhone 6 phones sold in the opening weekend. Much of that sales strength probably comes from China, which CEO Tim Cook says still looks healthy despite a slowing economy. This is the first time an iPhone will be released in China at the same time as in the U.S. and other major markets. Quartz
Building a Better Leader
Robots will take these jobs in 20 years
Researchers say that 25% of all jobs will be replaced by robots or software in the next 20 years. Here are those likeliest to be taken over by non-humans. BBC
A hot trend in selling luxury real estate...
...includes the ancient art of feng shui to attract Chinese buyers. Fortune
A U.S. Department of Talent
Could the U.S. workforce be upgraded by a new government agency focused on fostering homegrown talent? Washington Monthly
Political Proposals
Bernie Sanders calls for $18-trillion government expansion
The largest part of his program - a government run healthcare system - would cost $15 trillion over 10 years on its own. But Sanders hasn't offered enough ways to pay for the expenses, as his tax increases account for only $6.5 trillion. WSJ
Scott Walker continues attack on unions
Walker's latest proposal includes repealing the 1935 National Labor Relations Act, which protects collective bargaining rights. Fortune
Donald Trump hints at tax cuts
In a proposal that he says he'll develop in three weeks, Trump promises to reduce taxes on corporations and the middle class. No specifics beyond that so far. USA Today
Bill Clinton as VP
Hillary Clinton says she considered it, but, alas, it's unconstitutional. CNN
Up or Out
Conde Nast has named Robert A. Sauerberg Jr. CEO. Current CEO Charles H. Townsend will become Conde's chairman. NYT
Fortune Reads and Videos
The Air Force's solution for cutting through red-tape
It's a supercomputer that can automate advanced bureaucratic interruptions. Fortune
YouTube viewers just won in a big way
And copyright holders didn't. A dancing baby has made it more difficult to remove videos on YouTube. Fortune
Retail stores have a $30-billion problem...
...with organized crime. Fortune
Want to know why 2.7 million people quit their jobs in July?
It's about setting realistic expectations, says HireVue CEO Mark Newman. Fortune
Today's Quote
“The Chinese have discovered they can launch cyberattacks against us and that our officials seek to downplay them or offer up limp, ineffective responses, like indicting people behind them who will never ever see the inside of a U.S. court. This has added to the perception that we are weak, which in turn is an incentive to more opportunistic bad actors.” - David Rothkopf, the author of “National Insecurity: American Leadership in an Age of Fear,” discussing our leadership problem in fighting cyberattacks from the likes of Russia, China and Iran. NYT
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