Warner CEO, China Talks, SEC vs Musk: CEO Daily for March 19, 2019
Good morning. David Meyer here, filling in for Alan from Berlin.
Theresa May has been counting on her ability to steamroll her Brexit deal through the British Parliament, but that option has most likely been taken away from her.
It now seems the British prime minister will not be able to bring back her twice-rejected deal for a third vote. This is thanks to John Bercow, the Speaker of the House of Commons, who has invoked a four-century-old parliamentary rule, not used since 1920, that stops the government from repeatedly presenting the same motion to lawmakers.
The second vote on the deal was acceptable, Bercow said, because the EU was providing the U.K. with fresh assurances (a debatable point) about the implications of the deal. But to go for a third vote, May would have to present something fundamentally different than before—and it’s up to her to figure out how to do that. That’s a tricky task, given that the deal negotiations have been over for some time. However, the prime minister is reportedly going to try ramming her deal through anyway. She has never shown much flexibility in her leadership, so why start now?
This presents the other 27 EU countries with a dilemma. The British government has said it would ask for a short Brexit extension if the deal gets approved, and a long one if it does not. A long extension would be the sensible option at this point, but it would be politically toxic for May as it would mean the U.K. suddenly having to field candidates for the upcoming European Parliament elections. May is meeting with her EU counterparts on Thursday, so what will she ask for, and how flexible are the other European leaders prepared to be? It’s not just May’s leadership legacy that’s on the line here.
The suspense is painful and the stakes couldn’t be higher. Reminder: a no-deal Brexit will by default hammer businesses and the markets at the end of next week, unless everyone urgently figures out a way through this mess.
On a much-needed lighter note, France’s Europe minister has named her cat Brexit. “He wakes me up meowing like mad because he wants to be let out,” Nathalie Loiseau reportedly wrote on her Facebook page. “As soon as I open the door he stays put, undecided. When I put him out, he gives me an evil look.”
More news below, and do check out Tiernan Ray’s fascinating piece for Fortune about how A.I. is helping drug companies repurpose old products for new treatments.
Warner Brothers Entertainment CEO Kevin Tsujihara has resigned after leaked text messages showed he promised to push for auditions for an actress with whom he was having a sexual relationship. WarnerMedia CEO John Stankey: "Kevin acknowledges that his mistakes are inconsistent with the Company’s leadership expectations and could impact the Company’s ability to execute going forward." Fortune
U.S. chipmakers don't want to be involved in any trade deal with China that would see the latter country buy more American goods and services. Why? Mandatory-purchase quotas would effectively force them to open new Chinese factories to meet demand, so they would end up more dependent on China. Wall Street Journal
SEC vs Musk
The Securities and Exchange Commission has reiterated its view that Elon Musk should be held in contempt of court, for not heeding a judge's demand that he get legal pre-approval for his tweets. The watchdog said it was stunned to have learned that the Tesla CEO "had not sought pre-approval for a single one of the numerous tweets about Tesla he published in the months since the court-ordered pre-approval policy went into effect." Apparently all he has is a lawyer reading his tweets when they come out. Bloomberg
French investigators who looked at data from the doomed Ethiopian Airlines 737 Max flight say there were "clear similarities" between that disaster and the Lion Air crash last year involving the same type of plane. The jets are currently grounded around the world. Boeing CEO Dennis Muilenburg says the firm will maintain its "relentless commitment to make safe airplanes even safer." CNBC
Around the Water Cooler
Norwegian Air chairman Bjorn Kise has resigned, not long after the airline revealed it would have to cancel dozens of flights because of the 737 Max groundings. That's far from the carrier's only problem, though—it's already on dodgy financial ground. Kise: "It has not been an easy decision, but after 25 years on the board, many of which as chairman, I am confident that this is the right decision. I have now reached an age where it is time to make room for new forces." Financial Times
The New York Times reports Deutsche Bank lent Donald Trump over $2 billion despite many red flags around his bankruptcies and general riskiness. The paper claims the president overstated his wealth to get some loans, and promised bankers a Mar-a-Lago break. Deutsche Bank, wondering how it got in so deep, apparently warned its Wall Street bankers after Trump's 2016 victory: "Do not publicly utter the word 'Trump.'" NYT
President Vladimir Putin has signed new laws that would jail and fine people for spreading "fake news" or insulting state authorities online. The president's human rights advisors had warned him against signing the measures in their current form due to vague language and potential loopholes. NPR
Facebook really wants to show users more local news in the U.S., but it has a problem: there's not enough original reporting out there anymore. In fact, 40% of Facebook's American users apparently live in news deserts that can't support the "Today In" feature, the company is complaining. That's terrible for democracy—and fodder for conversations about how companies such as Facebook have distracted people from what's going on around them and the roles they've played in killing the newspaper ad business. AP