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Good morning.
I had an interesting conversation yesterday with Adam Schechter, CEO of LabCorp, who had been informed by a CEO Daily reader of my abysmal 10-day wait for COVID-19 test results. Schechter apologized, and said the company is now getting results out much faster.
My test was July 3, I noted. He had stood on the White House lawn in mid-March and said his company was spending “every second of every day” and was “committed to doing everything possible” to increase testing. What happened?
“Let me explain it to you,” he responded. “The first thing is, irrespective of what I thought we would need, my philosophy has been to build as much capacity as we possibly can to get fastest turnaround, irrespective of cost. We have bought every piece of equipment we could buy. I have even bought used equipment. We are buying every reagent we can buy.”
But the problem, he says, is that his suppliers serve a global market, and face surging demand everywhere. “If I could have gotten more machines and reagents, I would have done it. We could not have built capacity any faster and gotten testing done any faster than we did.”
Schechter says LabCorp was doing two or three thousand tests a week in March, and is now doing 165,000 tests a day. The company’s 14 labs are operating seven days a week–including the July 4 holiday–and three shifts a day. And if one lab gets behind, the tests are rerouted to another lab.
One thing that would help, he says, is if the public had clear guidelines on who needs–and who doesn’t need–to be tested. He thinks it should be 1) people who have symptoms, or 2) people who have been exposed to someone who has symptoms or tested positive. But recently, people have been getting tests because they want to travel, or because they are required to get it for work (sometimes multiple times a week), or myriad other reasons.
In addition to building up capacity as quickly as possible, Schechter says he established two other principles for the company’s efforts from the beginning:
–Everybody would pay the Medicare price, and there would be no up-front, out-of-pocket costs for anybody.
–Nobody would be prioritized over anybody else–regardless of rank, position, money, etc.
The only exception to the third rule is one requested by the CDC, which asked that tests from hospital inpatients be prioritized.
More news below.
Alan Murray
@alansmurray
alan.murray@fortune.com
TOP NEWS
Net-zero coalition
Microsoft, Nike, Starbucks, Mercedes, Maersk and Unilever are among the companies that have formed a new coalition to push for a net zero carbon economy. The aim is to create playbooks for achieving this goal, collaborate on greenifying supply chains, and lobbying policymakers. Microsoft has also made the first investment from its new $1 billion Climate Innovation Fund; $50 million goes to Energy Impact Partners "global platform for innovation of new technologies to transform the world’s energy and transportation systems, the two sectors that account for the majority of greenhouse gas emissions." Marketwatch
Chinese consulate
China claims the U.S. government suddenly ordered it to close its consulate in Houston. The Chinese foreign ministry called the move an "unprecedented escalation" of tensions between the countries that merited "firm countermeasures" if not rolled back. Houston police and firefighters responded to reports of papers being burned in open containers outside the consulate. The consulate will reportedly be evicted Friday afternoon. Fortune
Chinese hackers
The U.S. has indicted two hackers in China who it says targeted American companies involved in coronavirus research, and stole sensitive information from other companies around the world. The indictment says the hackers, Li Xiaoyu and Dong Jiazhi, worked both for personal profit and to further the goals of China's Ministry of State Security. Fortune
Made in Japan
The Japanese government is paying $535 million to get 57 Japanese companies–in areas ranging from auto-parts to mask and medicine production–to open factories in Japan. It is also paying another 30 companies to expand production in Southeast Asia. The subsidy splurge is designed to stop over-reliance on Chinese manufacturing, particularly in sectors that make the sorts of goods that are needed in an emergency. Washington Post
AROUND THE WATER COOLER
TikTok efforts
Fortune's Naomi Xu Elegant looks at six ways TikTok is trying to ward off the potential ban that the Trump administration has floated. The measures range from job-creation promises and straightforward lobbying to the creation of transparency centers and rebukes aimed at Beijing. Fortune
737 Max
Boeing's 737 Max probably won't be back in widespread deployment until early next year, the Wall Street Journal reports, citing U.S. government and industry officials. That's around two months later than was previously expected, thanks to FAA approval procedures, pilot training and maintenance checks. WSJ
Tapestry CEO
Tapestry CEO Jide Zeitlin has abruptly resigned due to unspecified "personal reasons," though reports suggest Tapestry's board was investigating allegations that he posed as a photographer some 13 years ago to lure a woman into a relationship. The fashion chief's departure means there are now just four Black CEOs of Fortune 500 companies. Fortune
Twitter vs. QAnon
Following problems with harassment and misinformation, Twitter is banning thousands of accounts associated with the ludicrous, millenarian QAnon conspiracy theory, which claims senior Democrats are engaged in a Satanic pedophile ring that President Trump was elected to destroy. Twitter has already banned 7,000 accounts and will limit the ability of around 150,000 accounts to circulate QAnon content. Fortune
This edition of CEO Daily was edited by David Meyer.
