Good morning. David Meyer in Berlin here, filling in for Alan.
Ferdinand Piëch, the Austrian executive and engineer who made Volkswagen a global behemoth, passed away Sunday. And what a legacy he leaves.
The scion of the Porsche family, he began his career at the eponymous company before family tensions saw him leave and (via a consultancy stint) join Volkswagen-owned Audi, where he eventually became CEO. Between 1993 and 2002, he was CEO at the Volkswagen Group itself, and he took the operation seriously upmarket—Lamborghini, Bentley and Bugatti all became part of the group during that tenure.
Piëch’s downfall came just before the Dieselgate scandal broke. Having been VW’s board chairman since stepping down as CEO, in early 2015 he tried to push out then-current CEO Martin Winterkorn, whom he had installed eight years previously. The attempt failed, and Piëch jumped before he himself could be pushed. Winterkorn was out half a year later, after the company’s emissions-test cheating was revealed, and went on to face charges in the U.S. and Germany.
Some have argued that Piëch’s authoritarian management style—”My need for harmony is limited,” he famously said—was in part responsible for that scandal. As VW’s worker’s council later complained, failures were hidden from superiors because the consequences of confession were plain and severe. (Piëch said in 2017 that management found out about the cheating months before the scandal broke.)
Then again, Piëch’s ruthless and exacting style also pulled the Volkswagen Group back from the brink when he took over, and turned the operation into one of the world’s largest automakers. Now forced to leave the diesel era behind, the group is able to make such a massive (if belated) electrification push by virtue of the fact that it can simultaneously roll out the same modular technology across so many brands.
Piëch’s legacy is mixed but unmistakable, and it’s no hyperbole to say a titan of the industry has now passed.
More news below.
Johnson & Johnson has been ordered to pay $572 million for its part in Oklahoma’s opioid crisis. Cleveland County judge Thad Balkman’s decision yesterday was the first of its kind. He said: “As a matter of law, I find that defendants’ actions caused harm, and those harms are the kinds recognized by [state law] because those actions annoyed, injured or endangered the comfort, repose, health or safety of Oklahomans.” Washington Post
Bristol-Myers Squibb’s $74 billion takeover of Celgene is closer to fruition after Amgen agreed to buy Celgene’s Otezla psoriasis medicine for $13.4 billion. The move could allay the worries of antitrust regulators regarding the combined operation’s anti-inflammatory drug lineup. Wall Street Journal
President Trump’s market-soothing assertion yesterday—that China was itching for a trade deal—may not be entirely in sync with reality, analysts say. When Vice Premier Liu He said China was “willing to solve the problem through consultation and cooperation with a calm attitude,” that apparently wasn’t a sign of giving ground, but rather boilerplate language that signifies no change in China’s stance. Bloomberg
Brazil’s government will reject the $22 million that G7 nations pledged to aid the fight against the Amazon fires. The refusal follows claims by Brazilian President Jair Bolsonaro that European countries were trying to be colonialist and gain access to the country’s natural resources. Independent
AROUND THE WATER COOLER
Fortune‘s Michal Lev-Ram has a fascinating piece out this morning about Slack, the enterprise chat darling that recently floated. She writes: “If becoming the one-stop shop for corporate software sounds a lot like Microsoft’s pitch, it is and it isn’t. Ironically, for Slack to succeed, at least in the eyes of Wall Street, it will need to become an enterprise giant much like its rival. But [CEO Stewart] Butterfield is convinced he can continue to push the company into adulthood without forgetting its roots—the simplicity that helped Slack catch on in the first place.” Fortune
French President Emmanuel Macron has offered to broker talks between Presidents Trump and Rouhani, in order to secure a new Iranian nuclear deal. Rouhani apparently told Macron he was open to the idea, and Trump said he would agree “if the circumstances were correct.” Financial Times
If there is to be a recession in the U.S., what would be good stocks to buy? According to a CNBC piece, options include Planet Fitness (cheap for customers and not exposed to China) and “off-price” bargain shops such as Ross Stores and T.J. Maxx. CNBC
In what could be a positive sign for the nascent cannabis industry, the Drug Enforcement Administration has signaled its support for more research into the plant. Acting administrator Uttam Dhillon: “We support additional research into marijuana and its components, and we believe registering more growers will result in researchers having access to a wider variety for study.” Fortune