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CEO Daily: Thursday, 18th May

Good morning.

Do you need to be an a**hole to change the world?

That’s the question raised by Adam Lashinsky’s new Fortune piece on Uber’s Travis Kalanick. Unlike previous tech pioneers, who were competing in largely virgin territory, Kalanick took on a century-old business hardened by regulation, unions, local politics and tradition. To succeed, he used an approach that many would say was, well, aggressive. In the process, Kalanick became, in Lashinsky’s words, something of a “corporate villain for the ages”—“seen by many as a brash, win-at-all-costs entrepreneur who’ll flout any rule to succeed, as well as a bro-in-chief enabler presiding over a sexist corporate culture.”

Lashinsky takes a three-hour walk with Kalanick through the streets of San Francisco, and along the way learns the Uber founder has something of an introspective side. He refers to his now-famous confrontations—such as the video showing him arguing with an Uber driver—as “little moments of arrogance when I say something provocative.” And he shows an engineer’s interest in reconstructing how he is perceived by others: “Understanding whether it’s real or not, like do I trigger something in certain people that’s related to something I didn’t do? Or am I an a**hole? I’d love to know… I don’t think I’m an a**hole. I’m pretty sure I’m not.”

Of course, Kalanick isn’t the first tech founder with unpleasant edges to his personality—think Steve Jobs, Elon Musk, Jeff Bezos. Or for that matter, think McDonald’s CEO Ray Kroc, whose story was compellingly told by the recent movie The Founder. In it, Kroc is quoted saying: “If any of my competitors were drowning, I’d stick a hose in their mouth and turn on the water.”

Is that really necessary for success? I’ll leave it for others to answer. But Lashinsky’s story is worth the read. It’s excerpted from his new book Wild Ride, Inside Uber’s Quest for World Domination, and it is the cover story of the June issue of Fortune. You can find it this morning here.

More news below.

Alan Murray

Top News

Mueller to Investigate Russia-Trump Links

Deputy Attorney-General Rod Rosenstein appointed FBI Director Robert Mueller special counsel with a brief to investigate possible links between the Trump campaign in 2016 and Russia, “as well as any matters that arose or may arise” subsequently, a remit that appears to include the possibility that the President obstructed justice in his firing of James Comey. Reuters reported Thursday morning that there were at least 18 undisclosed voice or electronic contacts between Trump campaign officials and Russians (or Ukrainians close to Russia) between April and November last year. Fortune

Google Thinks Big About AI, VR and IoT

Google unveiled a new microchip on Wednesday tailored for certain types of artificial intelligence projects that require crunching enormous amounts of data. It’s central to the search giant’s efforts to improve artificial intelligence in new hardware technology. Google doesn’t intend to make and sell the chip like Intel or Qualcomm, but rather will let companies rent access to it via Google’s cloud computing service. CEO Sundar Pichai announced the new chip during an annual conference for developers, which also featured plans to develop a standalone virtual reality headset that won’t require a PC or mobile phone to use. It also provided a broad update of its strategy in exploiting the Internet of Things. Fortune

GM Withdraws From Two More Big Markets

General Motors is to withdraw from India and South Africa by the end of the year, in its latest attempt to focus on fewer, more profitable markets or, in the words of President Dan Ammann, “pursuing opportunities” rather than “fixing problems.” It will take a $500 million charge in the process. The move comes after the sale of its European operations to France’s Peugeot earlier this year, and underlines the change in philosophy at a company that, like many in the sector, believed for decades that scale was everything. Elsewhere, Ford confirmed 1,400 job cuts in its North American and Asian operations. Its shares tumbled in disappointment, after earlier reports suggesting up to 20,000 would be cut.  Reuters

Life Gets a Lidl Harder for Wal-Mart

Wal-Mart is facing a new and, if past experience is any guide, deadly serious threat to its position in the U.S. grocery market. German discounter Lidl will join its Teutonic rival Aldi next month in launching in the country, starting in the Carolinas and Virginia. Both stores focus on own-brand products that allow higher margins once they gain consumer acceptance. Starting from nothing, the two companies have carved out a 12% share of the U.K. market, one of the most competitive in Europe, since the financial crisis. Part of that growth has come at the expense of Wal-Mart’s Asda, which has lost share consistently for the last three years. Elsewhere, Target shares rose 0.9% after a milder-than-expected decline in first-quarter sales, as CEO Brian Cornell played up the opportunities presented by the decline of the department store. Fortune

Around the Water Cooler

Stocks, Dollar Extend Losses on Political Concerns

The stock market had its worst day in months as the escalating crisis in Washington triggered a wave of risk aversion. The Nasdaq composite fell 2.6%, the S&P 500 and Dow Jones Industrial Average both fell 1.8%, while the yield on the 10-year Treasury note, which had touched 2.63% at the height of the euphoria after Donald Trump’s election, has now slumped to 2.20%. The dollar fell to a six-month low against the euro and a one-month low against the yen. Politics aren’t the only thing weighing on sentiment, however: A run of relatively weak data, notably from the auto sector, is undermining the case for two more interest rate rises this year by the Federal Reserve. Fortune

EU Gives Facebook a Slap on the Wrist

The EU fined Facebook $122 million for misleading antitrust regulators as they vetted its 2014 acquisition of messaging service WhatsApp. Facebook had said it could not automatically match user accounts on its namesake platform and WhatsApp, but two years later it launched a service that did exactly that. The EU called its action, which comes within a week of more minor fines in France and Italy on related issues, “proportionate and deterrent.” Elsewhere, the social media giant fessed up to yet another mistake in measuring the impact of advertising on its site, its 10th such admission in a year. Its repeated failings have angered advertisers, but its latest results suggest that hasn’t stopped it from tightening its chokehold on the digital ads market, together with Google. Fortune

Ralph Lauren Seeks Salvation in Experience

Ralph Lauren plucked Patrice Louvet from Procter & Gamble to revive his fashion company. Louvet replaces Stefan Larsson, who was ousted less than 18 months into his tenure after failing out with the 77 year-old patriarch. Louvet has no direct apparel experience, but Lauren is betting that his P&G roles, which included overseeing the branded beauty products for such names as Gucci and Hugo Boss, will allow him to rescue the Ralph Lauren brand from the fast-fashion maelstrom that it is sucking it down. Fortune

Temer Can’t Drain the Swamp From Where He’s Standing

Brazilian President Michel Temer, who came to power following Dilma Rousseff’s impeachment after allegations of corruption, is himself now embroiled in a bribery scandal. The O Globo newspaper reported that he had been taped approving a plan to buy the silence of a potential witness in the country’s biggest ever graft probe. Temer’s administration has been dogged from the start by the fact that his own political allies have been caught up in the same sprawling corruption investigation that did in Rousseff, an investigation that has exposed systematic bribery in return for political favors. Temer was reportedly taped in conversation with Joesley Batista, the chairman of meatpacking giant JBS, who had agreed to carry a wire as part of his plea bargain.


Summaries by Geoffrey Smith; @geoffreytsmith