America’s two most important newspapers – The Wall Street Journal and The New York Times – consumed a forest of newsprint and a small ocean of ink this weekend taking down two of the world’s most iconic global businesses – GE and McKinsey. If you have a spare hour, you can read the full stories here and here. If you don’t, I’ll give you a handy shortcut: the most damning part of the Times story on McKinsey is in the first five paragraphs; the killer quote from the Journal epic is in the last five paragraphs.
The Journal story takes the prize for length and depth, filling most of the Saturday paper’s second section. That’s a rarity in the age of Murdoch, who despises long stories, but a testament to editor Matt Murray’s career-long interest in the industrial conglomerate. The story chronicles the demise of GE over the last two decades, and ends with this quote from ex-CEO Jack Welch about his hand-picked successor, Jeff Immelt: “I’m terribly disappointed. I expected so much more… I made the best choice I thought I could make, and it didn’t turn out right.” Welch gives himself an A for his own running of the company, and an F for his choice of a successor.
The Times put its piece smack in the center of the front page, and begins with a stunning anecdote: Earlier this year, McKinsey held its lush China retreat, complete with desert tents and camel rides, in the Silk Road city of Kashgar, just four miles away from an internment camp holding thousands of ethnic Uighurs for reeducation. What were they thinking? The remainder of the story recounts McKinsey’s work in various authoritarian countries – Russia, China, Saudi Arabia – but acknowledges “there is no indication that McKinsey has violated American sanctions” … or other laws.
CEO Daily invites readers to give their thoughts on either or both stories; I’ll print selected responses later this week. More news below.
J&J Knew of Asbestos
Personal care product makers Johnson & Johnson’s reputation for caring may suffer as people learn that it has known since 1958 that its talc baby powder sometimes tested positive for asbestos. Court rulings on cancer cases earlier this year have revealed new documents that shape the more than 12,000 pending cases around the U.S. Its stock dropped 10% on the news. Reuters.
Malfeasance in Malaysia
Malaysia filed criminal charges Monday against Goldman Sachs and two former employees for corruption and money laundering related to $6.5 billion worth of bond offerings for 1Malaysia Development Bhd (1MDB). The U.S. Department of Justice charged one of the same former employees last month. Fortune.
Amazon employees who also hold stock have filed shareholder petitions to reduce the retail giant’s dependence on fossil fuels. Google employees filed a similar petition on executive pay. Business leaders better be ready: “Workers are looking at who holds power and where changes can be made,” says one campaigning expert. New York Times.
Davos Opens Doors
U.S. sanctions on Russian businessmen will not affect the door policy at this year’s World Economic Forum in Davos, Switzerland, organizers say. Russia had threatened a boycott in solidarity with its sanctioned citizens. Wall Street Journal.
Around the Water Cooler
Renault asked Nissan to set a shareholder meeting to discuss the risks set off by former Nissan president Carlos Ghosn’s indictments. Financial Times.
President Donald Trump tweeted that he would review the case of a U.S. soldier charged with the summary execution of a suspected Taliban bombmaker in Afghanistan. Influencing open cases hearkens back to former President Richard Nixon’s interference in the My Lai massacre investigation. New York Times.
So That’s What LinkedIn Is For
Billion-dollar travel app Klook co-founders Gnock Fah and Ethan Lin found their fellow co-founder Bernie Xiong by sifting through hundreds of LinkedIn profiles for someone with the right tech background and then meeting more than one hundred of them in person. CBNC.
Tech Founder Overdoses
HQ Trivia CEO Colin Kroll died Sunday surrounded by drug paraphernalia. He had also co-founded Vine, a six-second video service that sold to Twitter in 2012 for $30 million. Fox Business.