Power Sheet – January 26, 2015
Four fearless forecasts for leaders in this morning’s news:
-Volkswagen CEO Matthias Müller will muddle through the historic emissions-cheating scandal. He has done a terrible job since being hurriedly named to succeed Martin Winterkorn when the scandal broke last September. But he must accommodate many constituencies in Germany’s unique system, including government owners, labor leaders, and two of Germany’s most powerful business people, Wolfgang Porsche and Hans Dieter Pötsch, both of whom sit on VW’s supervisory board. Yesterday Stephan Weil, also on the supervisory board and prime minister of Lower Saxony, which is VW’s second-largest shareholder, gave the company three months to produce a full account of the scandal. But Weil also reiterated his support for Müller. My guess is that Müller keeps averting disaster until the world gets tired of this story, and gradually, over years, it gets resolved.
-Former Turing Pharmaceuticals CEO Martin Shkreli eventually won’t be able to control himself and will testify in his inimitable way to one of the Congressional committees that is after him, digging himself into an even deeper hole. A House committee had him scheduled to testify today but postponed the hearing until Feb. 4 because of the blizzard. Shkreli has so far insisted he won’t go beyond pleading the Fifth Amendment unless he’s granted some kind of immunity from his testimony being used in the securities-fraud case the feds have brought against him. I’m guessing he’ll work out some kind of deal and then will behave the way he behaves, with cameras rolling.
-McDonald’s CEO Steve Easterbrook will restore the company’s health by focusing on the basics. He got the job last March with the company’s performance in free fall. Yesterday he reported that U.S. same-store sales were up 5.7% last quarter, twice as much as analysts had forecast. The main reason, he acknowledged, was simple: all-day breakfast, introduced last October. He won’t get another one-time opportunity like that, but he seems intent on giving people more of what they love about McDonald’s, including a 44-year-old product like the Egg McMuffin. Don’t look for fireworks. I’m guessing he’ll succeed, as founder Ray Kroc famously said, by grinding it out.
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What We're Reading Today
Disney sued over use of immigrant workers
Two former tech employees sued Walt Disney World and two outsourcing firms, claiming the companies conspired to replace them with foreign workers using H-1B visas. The complaint says the firms misled immigrant workers by stating that "similarly situated employees would not be adversely affected" by their hire. Disney denies any wrongdoing. Separately, laid off workers of Bob Iger's company have filed complaints with the Equal Employment Opportunity Commission contending among other things that workers had to train their H-1B visa replacements in order to receive severance. Orlando Sentinel
Netflix, Amazon buy up Sundance films
The two companies have outpaced large studios in buying movies featured at the Sundance Film Festival. Jeff Bezos's Amazon outbid Fox and Universal for a drama, paying $10 million, while Reed Hastings's Netflix bought "Tallulah" for $5 million. Producers of so-called art-house movies see the streaming services as a route to wider viewership, highlighting the companies' growing importance in distribution. NYT
McDonald's all-day breakfast proves a hit
CEO Steve Easterbrook reported that McDonald's fourth quarter U.S. same-store sales jumped 5.7%, far surpassing analysts' expectations and sending the stock to an all-time high. The results confirm Easterbrook's bet on all-day breakfast. McD's outperformed most competitors. CNNMoney
Chris Christie faces criticism over storm response
Store owners in southern New Jersey's shore areas have criticized Gov. Christie for downplaying the damage they sustained from the blizzard that hit the East Coast last weekend. Tides reached levels higher than during Hurricane Sandy in 2012, flooding stores. Christie has faced backlash for spending much of his time outside New Jersey while he campaigns for president. Reuters
Building a Better Leader
Job applicants in technology are highlighting their "nanodegrees"
But employers aren't sure how to judge them. US. News & World Report
In order to make the workplace more fun...
...you must first build trust. Fortune
A group of high ranking execs in a room...
…are terrible at making good decisions. In a study, the more a group was filled with high ranking executives, the less the group got done and the more everyone fought for status. Quartz
At the Democratic Town Hall
Democratic candidates state their case
In a town hall setting, Hillary Clinton, Bernie Sanders, and Martin O'Malley made their cases to Iowa Democrats six days before the caucuses. Sanders hit Clinton over Social Security, gun control,and her closeness with Wall Street. Clinton highlighted her experience, calling herself "a proven fighter," and said Sanders's views are nice but can't get past Congress. CNN
Clinton and Sanders try to rectify mistakes
Clinton said she used personal email while Secretary of State because she was looking for a "convenient way of communicating," but she did not apologize. Sanders has suffered for calling Planned Parenthood part of the "establishment" after the organization supported Clinton for the presidency. He reiterated that he has a 100% pro-choice voting record and wants to increase funding for the organization. Politico
Clinton responds to Johnson Controls-Tyco merger
In a statement following the announced merger between Johnson Controls and Ireland-based Tyco International, Clinton said she wants to "block deals like Johnson Controls and Tyco and place an ‘exit tax’ on corporations that leave the country to lower their tax bill." Johnson Controls yesterday agreed to merge with Tyco and use Tyco's Irish domicile, avoiding U.S. taxes. Fortune
Up or Out
Nagraj Kashyap will leave Qualcomm Ventures to join Microsoft's venture capital arm. Fortune
Fortune Reads and Videos
Staples laid off hundreds of corporate employees...
...after two years of store closures. Fortune
China tells George Soros not to bet against its currency
But is he doing so? In Davos last week, Soros predicted a "hard landing" for the Chinese economy but never said he was betting against the renminbi. The Chinese state press says he'll fail if he tries. Fortune
Elon Musk says the biggest threat to electric vehicles...
...is low oil prices. Fortune
Autonomous car efforts gets a new player
China's online search company Baidu wants to launch driverless cars in ten cities within three years. Fortune
On this day...
...in 1998, President Bill Clinton said the infamous words "I did not have sexual relations with that woman," referring to White House intern Monica Lewinsky. The Nation
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|Produced by Ryan Derousseau|