Good morning.
One of the biggest policy errors of the Trump administration has been its handling of immigration policy. The U.S. has always been a magnet for the world’s talent, particularly in tech, and that in turn has powered the nation’s growth. But it has lost that sheen since the election.
One beneficiary of the change has been Canada. In the August issue of Fortune, we look at the boom Vancouver is enjoying as a result. “While other countries are looking in,” British Columbia Premier Christy Clark told a tech summit in March, “let’s be a country and a province that is looking out…that is welcoming people in—the best and the brightest from every corner of the globe.”
Facebook, Microsoft and Amazon all have offices in Vancouver, as well as a host of smaller companies. Over the past decade, tech employment has grown 27%. Clark has floated the idea of a “doctorate for citizenship” program, granting Canadian citizenship to people on the day they receive their Ph.D.
And it’s not just Vancouver. Google has established an AI research office in Montreal, while Uber has chosen Toronto as an outpost for self-driving car research. The Canadian government in June announced a package of immigration changes called the Global Skills Strategy aimed at fast-tracking visas for skilled workers, and providing a concierge service that will walk companies through the process of opening an office on Canadian soil.
You can read the Fortune stories here and here. More news below.
Alan Murray
@alansmurray
alan.murray@timeinc.com
Top News
• I Did Not Have Political Relations With That Country
Jared Kushner, son-in-law and senior advisor to President Trump, said he didn’t collude with Russians in last year’s election campaign or know anyone in the Trump campaign who did. Talking to senators investigating the allegations of collusion, Kushner detailed four separate meetings with Russian officials last year. As regards the meeting with lawyer Natalia Veselnitskaya, organized on the explicit pretext of acquiring negative information on Hillary Clinton, Kushner said he arrived late and left early. Elsewhere Monday, the Kremlin confirmed that ambassador Sergey Kislyak had been recalled, after denying speculation over his departure for a month. Time
• Softbank Eyes Uber Stake
Softbank is looking at taking a “commanding” stake in Uber, according to The Wall Street Journal’s sources. The move could offer some of the company’s earliest backers an emergency exit from their investment now that boardroom upheaval appears to have pushed back plans for an initial public offering. Investing would raise Softbank’s exposure to the ride-hailing business, but would spread its risk around. It is already an investor in Didi Chuxing and India-based Ola, and said Monday it would lead a $2.5 billion investment round with Didi in Grab, the dominant player in Southeast Asia. Elsewhere, Reuters reported that Softbank is also among the bidders (along with Royal Dutch Shell) for Asia’s largest renewable energy producer Equis Energy, valued at $5 billion. WSJ, subscription required
• Google Finds Out More Profit Is Not Always Better Profit
Shares in Google parent Alphabet fell some 3% in after-hours trading on concern that its ad business is losing pricing power. Revenue per click fell 23% in the quarter due to the growing share of mobile ads, which sell for much less, in its revenue mix. Overall revenue still rose 21% on the year to $26 billion, but that wasn’t enough to mollify concerns that a greater dependence on mobile, and on YouTube in particular, is not actually a welcome development. The loss on its ‘other bets’ narrowed to $772 million, while group net profit fell 28% to $3.5 billion due to a provision for its $2.7 billion EU antitrust fine. Separately, the company also said CEO Sundar Pichai had joined its board. Fortune
• HNA: Under Somewhat New Ownership
HNA Group announced changes to its ownership structure that raised as many questions as it answered. A newly-founded, New York-based charity called Hainan Cihang Charity Foundation has become the group’s largest shareholder with 29.5%, having apparently absorbed the stakes of the mysterious businessmen Bharat Bhise and Guan Jun. Together with its domestic arm, the charitable foundation now owns over 50% of the group, while founders Chen Feng and Wang Jian own over 14% each and CEO Adam Tan holds just under 3%. For regulators, it’s now a bit clearer where the buck stops, but given that there was no information on how Bhise and Jun were compensated for their stakes, the truth about its ultimate beneficiaries is still not entirely clear. Fortune
Around the Water Cooler
• Europe’s Growth Engine Opens the Throttle
Germany’s businesses have never been as confident. The widely-watched Ifo business survey hit a new record high, underlining how, for all the noise about Brexit, Donald Trump and, lately, a breakdown in relations with Turkey, what really matters is the health of its other key trading partners in Europe, with France at the fore. The institute spoke of a "euphoric" mood across the country, notably in construction. One of the most remarkable features of the German economy in recent years has been the failure of zero interest rates to ignite a speculative construction boom, either by homebuilders or property developers. Rising property values may, however, be starting to test famed German risk aversion. Reuters
• Jimmy Choo’s Latest Owner Is…Michael Kors
Michael Kors has agreed to buy shoemaker Jimmy Choo for just over $1.2 billion, as it expands its efforts to recover its lost cachet. It’s the fifth time the celebrity cobbler has changed hands in 20 years, but the management team of CEO Pierre Denis and creative director Sandra Choi (niece of the eponymous founder) will continue to run the company. Those who bought into Jimmy Choo’s IPO three years ago will make around 60% on their investment. Kors gets another high-powered brand for its portfolio, while strategic shareholder JAB Luxury takes another step towards exiting fashion as it concentrates on premium food and drink opportunities such as Panera. Fortune
• Hasbro Spooks Investors With Weak Q2
Toymaker Hasbro suffered its largest share drop in nearly two years on Monday after it said sales of its Easy-Bake, Playskool and Super Soaker brands plummeted in the second quarter. Hasbro’s "emerging brands" revenue fell 14% to $62.9 million, dampening what was otherwise a stellar quarter, with revenue in franchise brands like Transformers, Nerf and Monopoly rising 21% to $545.7 million. The relative lack of new movie releases (Spiderman notwithstanding) also led to a relatively sluggish 1% growth in Star Wars and Marvel products. The former of those will presumably recover when The Last Jedi hits the screens later this year. Fortune
• Akzo Rekindles the Hopes of Elliott and PPG
Is that a window of opportunity reopening for PPG? Akzo Nobel, the European coatings and paint maker that just wants to be left in peace, said its chairman Antony Burgmans will leave next April when his contract expires. With CEO Ton Buechner having stepped down last week on health grounds, the winds of change may be blowing around the Dutch-based company’s HQ. Its second- quarter earnings, which were well below expectations, were grist to the mill of PPG and Elliott Advisors, Akzo's largest shareholder that had pushed for a merger with PPG. Akzo also said Tuesday it will create a new board committee for shareholder relations to “strengthen and maintain a constructive dialogue.” Bloomberg
Summaries by Geoffrey Smith Geoffrey.smith@fortune.com;
@geoffreytsmith
