Leadership notes from the news:
-Yes, a CEO can defy Donald Trump (at least for now). Trump got a lot of mileage from keeping his vow to prevent United Technologies’ Carrier business from closing a factory in Indianapolis and sending the jobs to Mexico, though Carrier will eliminate many of those jobs and is getting substantial concessions from the city and state in the bargain. Far less attention focused on a highly similar Trump promise that he tweeted earlier this month: “Rexnord of Indiana is moving to Mexico and rather viciously firing all of its 300 workers. This is happening all over our country. No more!”
Well, maybe just a little more. Rexnord quietly agreed with the United Steelworks on severance pay for those 300 or so workers, and the company will close its Indianapolis ball-bearing factory in the spring, shifting production to Mexico.
Sticking with Plan A may be a shrewd bet by CEO Todd Adams. Trump is preoccupied with forming an administration and is basking in the glow of the Carrier resolution. Why should he risk a re-run? And now that Rexnord and the union have a deal, it’s a little late for Trump to fly to the workers’ rescue.
-A major company, a dramatic reversal of fortune – and tech disruption isn’t the culprit. Nike got a glimmer of good news yesterday when it reported better than expected profits and the stock rose. But the company remains the worst performing component of the Dow this year, down 17%. What happened?
The answer is simple and old-fashioned: Nike let its critically important basketball business weaken, while the competition, Under Armour and especially Adidas under North American boss Mark King, has grown markedly stronger through superior management. Nike is still massively larger than its competitors, and CEO Mark Parker has compiled an outstanding record over the past decade; no one should count him out. But fortunes often rise and fall for unglamorous reasons that are just as powerful as trendy, obvious ones like technological disruption.
-The UBI isn’t going away, and business leaders need a point of view on it. UBI is the universal basic income, and early next year Finland will become the latest country to experiment with it – handing regular checks to 2,000 randomly chosen unemployed workers without restrictions, even if they start earning money on their own. Sounds crazy? Elon Musk believes it’s on the way. “I think that there’s a pretty good chance we end up with a universal basic income, or something like that, due to automation,” he said last month. “I’m not sure what else one would do.”
The idea that millions of adults might need a free subsistence income because they won’t be able to find work is still far-fetched, but if it happens, business will be blamed for it and will ultimately have to fund it. That’s why leaders need to start thinking seriously about it.
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What We’re Reading Today
Germany hunting for new suspect
German police released the original suspect in the truck attack that left 12 dead and dozens injured, reportedly focusing now on a Tunisian man whose identity papers were found in the vehicle. ISIS claimed responsibility for the attack. NBC News
Volkswagen agrees to $1-billion settlement
Matthias Müller‘s company agreed to the deal covering 80,000 3-liter diesel vehicles that weren’t included in the original $15-billion deal. Volkswagen will buy back 20,000 vehicles that carry emissions cheating software while it awaits approval from the Environmental Protection Agency on a software fix for the other 60,000. Ars Technica
FedEx pushes back against e-retailers
In the final days of the holiday shipping season, Fred Smith‘s company says it demanded that some online retailers pay higher prices this year, dumping those that wouldn’t pay up. FedEx’s profit last quarter took a hit from investments in facilities to handle the holiday surge. WSJ
Linde and Praxair agree to merge
Talks had fallen apart in September, but Linde reinitiated discussions this month. The two sides made a $66-billion deal after agreeing on governance and jobs. Praxair CEO Steve Angel will be CEO of the new company, while Wolfgang Reitzle, head of Linde’s supervisory board, will serve as chairman. Fortune
Building Better Leaders
Holiday parties for remote workers
Employers are finding creative ways to bring remote employees into holiday parties. Key elements: festive beverages, WebEx, and computer animation. The Atlantic
To increase your productivity next year…
…imagine it’s the end of 2017. What three to five things did you do that made it an amazing year? Now break those goals down into manageable steps. Fortune
The proportion of young adults living with their parents…
…has reached a 75-year high. Nearly 40% of 18-34 year olds live with their parents or other family members, a level not seen since 1940. WSJ
Obama permanently bans offshore drilling in Arctic and Atlantic areas
He invoked a rarely used law that empowers him to impose permanent bans, part of a larger effort to impose measures that will resist President-elect Donald Trump, who favors more drilling. While Trump can reverse many of Obama‘s executive orders, Obama has tried to build in provisions that could take the new administration some time to untangle. NYT
Oracle director quits…
…over co-CEO Sandra Katz‘s decision to serve on Trump‘s transition team. George Polisner wrote on LinkedIn that he’s not for Trump, and that when his “policies border on the unconstitutional…I am here to oppose him in every possible and legal way.” Tech leaders, including Apple’s Tim Cook and Amazon’s Jeff Bezos, have shown a willingness to engage with the incoming president after a divisive campaign. Fortune
Iran, Russia, and Turkey meet to discuss Syria
The absence of the U.S. suggests that Syrian President Bashar al-Assad will likely remain in power if peace is agreed to. Secretary of State John Kerry received a phone call from Russian Foreign Minister Sergey Lavrov after the discussions to update him. ABC News
Up or Out
Twitter CTO Adam Messinger has resigned from the company. Fortune
Fortune Reads and Videos
T-Mobile CEO says he made AT&T his villain
John Legere started attacking AT&T directly in 2013, in part because it had exclusive rights to the iPhone and was thus able to charge high prices for it, which he knew customers resented. Fortune
After bashing Carlos Slim during the campaign…
…President-elect Donald Trump is now calling him a “GREAT GUY” on Twitter. All it took was a dinner. Fortune
Alec Baldwin earns $1,400…
…for every appearance mimicking Trump on Saturday Night Live. Baldwin offered the president-elect a deal earlier this month: Release your tax returns and I’ll quit the impersonations. Fortune
Apple’s AirPod wireless earbuds work almost flawlessly…
…except they’re way too expensive and look weird when you wear them. Fortune
Steven Mnuchin, President-elect Trump‘s pick for Treasury Secretary, turns 54 today. Hollywood Life
Pandora founder and CEO Tim Westergren turns 51. The Richest
DreamWorks SKG co-founder Jeffrey Katzenberg turns 66. Britannica