Companies Strike Back, Moonves Fired, China: CEO Daily for December 18, 2018
What do you do when you are under attack by the press? In the age of Trump, apparently, you fight back hard.
That’s what Johnson & Johnson CEO Alex Gorsky did yesterday. The company’s stock has fallen more than 12% since Reuters published a story on Friday claiming the company knew for decades it had traces of asbestos in its baby powder. Gorsky posted a video on the company website insisting the product “never contained asbestos,” and that the talc is the “purest, safest” on the market.
J&J has a reputation for putting the health of its customers first and makes much of its seven-decades-old credo which lists customers, employees, and communities before stockholders among its priorities. It reinforced that reputation back in 1982 when it pulled all its Tylenol off of store shelves after someone injected cyanide into a few pills, killing three people in Chicago. Gorsky hailed back to that incident, now a case study in crisis management, in his statement yesterday. “If we believed our products were unsafe, they would be off the shelf and out of the market immediately.”
McKinsey took a similar tack yesterday, fighting back against a New York Times story about its work in authoritarian countries: “As a global firm, we fundamentally disagreed with the assertion that our colleagues in Southeast Asia, China, Eastern Europe and the Middle East should not be serving clients where we have a demonstrated record of making a positive difference in the countries where they live, and on behalf of their fellow citizens.” The company did acknowledge, however, a problem with holding a retreat four miles from an Uighur internment camp in Western China and said “we will be more thoughtful about such choices in the future.”
More news below, including the CBS decision to deny Leslie Moonves his $120 million in severance.
The CBS board decided it can fire former chief executive Leslie Moonves for cause, meaning he will not receive the $120 million in severance pay stipulated in his contract. CBS concluded that he interfered with an investigation of sexual harassment claims against him. New York Times.
Economists in China are beginning to be more open in their criticism of Chinese premier Xi Jingping's state-led economic policies. Xi gave a speech Tuesday marking the 40th anniversary of Deng Xiaoping's opening of the country's economy. Financial Times.
One Small Tunnel
Multifarious founder and entrepreneur Elon Musk faced questions from investors including Peter Thiel over his use of SpaceX resources to jump-start the Boring Company, of which Musk is the principal shareholder, along with founding employees. He has since granted SpaceX some shares in Boring, which Tuesday opens its first tunnel, in Hawthorne, California, designed to test Loop and Hyperloop technologies. Wall Street Journal.
Affordable But Not Understandable
U.S. states asked a federal judge to clarify his ruling in a Texas case that declared unconstitutional the insurance mandate of the Affordable Care Act. The law has survived two challenges at the Supreme Court level and continues to face legal challenges around the country. Wall Street Journal.
Around the Water Cooler
Hungarian opposition lawmakers ended up injured after a protest at the state media outlet asking for more balanced coverage ended in a melee. New York Times.
No More 9 to 5
Richard Branson foretells the end of the 9-to-5 job and says companies should get ready to pay people more for fewer hours' work: "That’s going to be a difficult balancing act to get right, but it can be done.” Fox Business.
Labour Party leader Jeremy Corbyn called for a no confidence vote in British prime minister Theresa May. However, he doesn't have the votes to put her out of office, as her own party tried and failed to do last week. Reuters.
Money Laundering Wrist Slap
Federal regulators fined UBS $15 million for 13 years' worth of money laundering violations. Wall Street Journal.