CEO Daily: Wednesday, January 6
U.S. car sales, we learned yesterday, hit an all-time record in 2015. But in spite of that, Ford CEO Mark Fields sounded last night like a man on a burning platform.
Fields was FORTUNE’s guest at our Brainstorm Tech dinner at the Consumer Electronics Show in Las Vegas. In an interview with Adam Lashinsky, he said his company is “transitioning” from an automobile company “to a mobility company.” He said Ford is “tripling the size of its autonomous vehicle research fleet,” and touted a range of futuristic projects that would allow you to turn on your house lights from your car or run a drone from the bed of your pickup. “Any business has to have one foot planted in today,” Fields said, “and one foot in tomorrow.”
The car industry is an extreme case, having barely survived the downturn only to discover its competitive set now includes Google, Tesla, Uber, Lyft and probably Apple. But Fields’ talk of the need to remake his business is increasingly common among today’s big company CEOs. They are a generation of leaders who, in language at least, have taken to heart former Intel CEO Andy Grove’s warning that “only the paranoid survive.” They speak the language of continuous change.
Like many, Fields traces this back to Clayton Christensen’s The Innovator’s Dilemma – a defining book for this generation of business leaders, and one Fields said he read 20 years ago. “I never forgot it,” he said. Never mind that Professor Christensen has recently protested his theory of “disruptive innovation” has been applied too broadly. Disruption has become the language of business.
Fields insists his company’s 113-year history is not a liability in this race for the future, but “a huge advantage.” In truth, of course, it is both. Right now, the markets seem to favor the new entrants, unburdened by the baggage of the past. But the future likely belongs to those who can somehow figure out how to embrace the new while preserving the best of the old.
• Valeant will appoint interim CEO with Pearson hospitalized
Valeant Pharmaceuticals is close to a decision on naming an interim chief executive to run the company in the place of Michael Pearson, with the CEO still hospitalized with severe pneumonia. One potential candidate for the interim role is former chief financial officer Howard Schiller, a former Goldman Sachs executive who stepped down from the CFO position last year. In the meantime, Valeant's board has given control of the company to a team that includes the general counsel, Robert Chai-Onn, as well as current CFO Robert Rosiello and executive VP Ari Kellen. The drugmaker's shares have fallen roughly 12% since Pearson took a medical leave of absence over Christmas. Financial Times (subscription required)
• Apple shares dip on iPhone report
Shares of the tech giant closed Tuesday trading down 2.5% following a report saying that Apple is slashing production of its newest iPhone models by 30% due to weak demand. The slowdown in output will reportedly come in the quarter ending in March. Apple's stock is down 18.8% over the past six months due to concerns over disappointing iPhone demand as well as economic struggles in China, a major market for the company. Fortune
• Verizon looks to sell data centers
Verizon has reportedly begun the process of unloading data center assets that could bring in more than $2.5 billion. The sale of Verizon's portfolio of nearly 50 data centers would mark the telecommunications giant's latest attempt at whittling down non-core assets after selling off its landline business as well as some wireless tower assets last year. Reuters
• Cars sales hit a record in 2015
U.S. automotive sales hit record heights this past year, when gasoline prices hovered around $2 per gallon—their lowest levels in six years. Cheap credit and steady economic growth also helped spur American consumers to buy 17.5 million cars and trucks (with a total price tag of roughly $570 billion) in 2015, which was the highest total in 15 years. Also, while auto sales seemed to slow in the final month of 2015, overall sales are expected to rise again in the current year before dipping in 2017. Wall Street Journal (subscription required)
Around the Water Cooler
• Why Twitter could tinker with character limit
Twitter is reportedly considering increasing the maximum length of its users' posts from 140 characters to 10,000—an idea that has inspired a wide range of reactions, from intrigued to horrified. But, Fortune's Mathew Ingram writes that, with this idea, the company is not trying to please its current users. Instead, Twitter is angling to increase its user base by offering enough real estate for their content to compete with blogging sites, like Medium. The feature could also give content publishers like news organizations the space to post entire articles on Twitter, similar to what they can do with rival Facebook's new "Instant Articles" feature. Fortune
• Bernie Sanders' unrealistic plan for Wall Street
Democratic presidential candidate Bernie Sanders has made it no secret that he wants to reform Wall Street. But, Fortune's Chris Matthews argues that the Senator from Vermont's latest plan—in which he promises to impose a federal breakup of the nation's biggest banks within his first year in the White House—is "radical and unrealistic." Matthews is unconvinced that Sanders' breakup plan would make it easier for the government to fix issues in the banking industry and he also points out that the presidential candidate would likely face far too much Republican opposition within his own federal government to ever implement the proposal. Fortune
• More automakers highlight self-driving tech at CES
At CES in Las Vegas, Toyota announced a string of new hires that should help the Japanese automaker move forward with an ambitious plan to develop artificial intelligence technology it can use in autonomous vehicles. Toyota is bringing in a team of AI and robotics experts—including Google's former robotics head, James Kuffner—to work on developing self-driving cars. Meanwhile, South Korea's Kia Motors made an announcement at CES, unveiling new plans to develop self-driving cars by 2030. Fortune
5 things to know today
Market bombs and Fed releases minutes—5 things to know today. Today's story can be found here.