Happy Monday.
Three recommended readings for you this morning:
First, Vivienne Walt’s look at the HNA Group, which has been on an acquisitions tear recently in its effort to become China’s largest global company. Among other things, it bought a majority stake in new White House communications director Anthony Scaramucci’s hedge fund company, SkyBridge. HNA was No. 170 on the Fortune Global 500 this year, and is on track to crack the top 100 next year. But it has run into questions over its ownership structure, and concern about its skyrocketing debt. You can read Viv’s coverage here and here.
Second, the piece by Susan Chira in Sunday’s New York Times on why so few women are CEOs. Only 14 of the companies on this year’s Fortune Global 500 list—less than 3%—are led by women. And while many used to think the scarcity of female CEOs was a “pipeline” problem that would correct itself over time, that doesn’t seem to be happening. “I’ve been watching the pipeline for 25 years,” says Julie Daum of Spencer Stuart. “There is a real bias, and without the ability to shine a light on it and really measure it, I don’t think anything’s going to change.”
Finally, I’d call your attention to the excellent speech given last week by Stanley Bergman, CEO of Henry Schein, upon acceptance of the “CEO of the Year” award from Chief Executive magazine. Bergman has turned a boring dental wholesale business into a high-tech powerhouse. (See the piece I wrote last year on Bergman here.) But he worries that the tech-driven “Fourth Industrial Revolution” that is powering his growth is also threatening to undermine America’s unique DNA as the land of opportunity.
“We cannot leave people behind,” Bergman said. “Too many in business have been too focused on going fast and not focused enough on going together. The result is a minority of huge beneficiaries and increasingly vocal majority of those left behind. If we focus too much on the speed of change rather than ensuring that all benefit from change, then we risk disenfranchisement and civil dissent, which jeopardizes global stability and all democratic societies.”
Bergman is one of the roughly 100 CEOs who will gather on September 25 in New York for the Fortune/Time CEO Initiative, to explore how the private sector can, in Bergman’s words, “impart the benefits of the Fourth Industrial Revolution more broadly” and “bring more people into the digital economy.” You can—and should—read his full speech here. And if you are a concerned CEO, please join us in September; we still have a few openings left.
News below.
Alan Murray
@alansmurray
alan.murray@timeinc.com
Top News
• White House Drops Opposition to Russia Sanctions Bill
The U.S. moved a step closer to expanding sanctions against Russia in retaliation for meddling in last year’s elections, as the White House signaled President Trump would accept efforts to limit his authority to relax them on his own. The draft bill has alarmed the EU, which fears that it could hit European companies partnering with Gazprom in building new pipelines. Over the weekend, it was reported Donald Trump Jr., Jared Kushner and Paul Manafort will all talk in closed session (not under oath) to Congressional investigators this week. The new White House director of communications Anthony Scaramucci confirmed that Trump had discussed with him the scope of his power to pardon over the weekend. Fortune
• Germany’s Carmakers Hit by Cartel Allegations
Shares in the big three German carmakers slid sharply in early trading in response to allegations of cartelling that broke late Friday. The magazine Der Spiegel accused BMW, Daimler and Volkswagen of colluding for years on a range of issues. The allegations open up some troubling lines of legal jeopardy: first from suppliers, who allegedly suffered from collusion on outsourcing issues, and secondly from consumers. A third line of attack could come from air quality campaigners, who will zero in on allegations that the three agreed to use sub-optimal after-treatment for diesel exhausts. BMW has rejected the last of those claims. EU investigators confirmed this weekend that they are investigating the allegations. Fortune
• Didi’s Power Grab
Didi Chuxing, the ride-hailing company that bested Uber in China, is doing its best to squeeze its rival out of Southeast Asia. Didi and Softbank are to invest $2 billion in Singapore-based Grab. Grab said it hopes to attract another $500 million from other investors, new and existing, that would push its valuation towards $6 billion. The pushback from competitors in some of the world’s fastest-growing economies seems likely to crimp Uber’s valuation: T. Rowe Price, an early backer, recently wrote down its stake by 5%. Fortune
• OPEC Wrestles With Over-Production
Crude oil futures slipped to a one-week low ahead of a meeting of ministers from key exporters in Russia. The Russia-Saudi led deal on output restraint is fraying as U.S. producers eat into the cartel’s market share. OPEC’s latest data showed that its members pumped above the agreed ceiling last month, mainly because of recoveries in Nigeria and Libya, which were exempted from the deal at the time because of civil strife. Saudi Minister Khalid al-Falih said ministers will talk about ending that exemption but said deeper cuts weren’t on the agenda. On Friday, Baker Hughes’s rig count suggested that the rise in shale drilling (up 40% since the start of the year) is flattening out in response to recent price weakness. All other things being equal, that suggests U.S. output could also plateau within six months. Reuters
Around the Water Cooler
• A-Rod’s Next Big Swing
Over the weekend, Fortune published Pattie Sellers’ interview with baseball legend Alex Rodriguez about how he got his life—and his business ideas—back on track after his suspension for the use of performance-enhancing drugs. He’s up on multi-family apartment rentals, down on Silicon Valley (despite holding Amazon, Facebook and Google). As for one day investing in a sports team, well, he’s not ruling it out… Fortune
• Stocks Shaky As Dollar Hits 14-Month Low
Stocks have started the week on a shaky note after business activity surveys showed the Eurozone’s hot streak coming to an end. The IMF trimmed its growth outlook for the U.S. and cut its outlook for the U.K. in its latest update, but upheld its global growth forecast due to a better-than-expected performance in China in the first half of the year. The dollar lost further ground on the back of the report. It had hit a new 14-month low against major western currencies overnight and a nine-month low against the Chinese yuan on growing concerns about legal jeopardy for President Trump and his staff. Reuters
• Bewkes Plays It Cool as He Prepares His Exit
Time Warner CEO Jeffrey Bewkes played down threats that the White House could use the planned merger with AT&T to exert pressure on CNN, one of President Trump’s most constant antagonists and a subject of some of his most bitter Twitter attacks. In an interview with the New York Times, Bewkes said “I know people say things like that…I don’t think it’s true.” CNN fired three staff members last month over a misleading article about Anthony Scaramucci (before he joined the White House staff), which had to be retracted. Bewkes is set to leave Time Warner with up to $95 million as part of the merger. His understudies at Turner, Warner Bros., and HBO are all expected to stay on. NYT
• Patenting the N-Word and the Swastika
A small group of companies and individuals are looking to register racially-charged words and symbols for their products based on a U.S. Supreme Court decision on trademarks last month. At least nine such applications have been filed with the U.S. Patent and Trademark Office since a unanimous June 19 ruling throwing out a federal law prohibiting disparaging trademarks on free speech grounds. All are pending. Steven Maynard, a Virginia consultant whose Snowflake Enterprises has submitted applications to trademark a version of the N-word to appear on clothing, liquor and beer, says saturating the market with such epithets (the Nazi swastika is among those featured in the filings over the last month) can rob them of their racist connotations. Fortune
Summaries by Geoffrey Smith Geoffrey.smith@fortune.com;
@geoffreytsmith
