2019年11月13日 星期三

DealBook: Trump Says Business Leaders ‘Have No Choice’ but to Vote for Him

In a speech at the Economic Club of New York, the president defended his tariffs and argued that his policies could allow America's prosperity to continue growing.
November 13, 2019
Good morning. (Was this email forwarded to you? Sign up here.)
  Brendan Smialowski/Agence France-Presse — Getty Images
‘The people we are running against are crazy'
In a speech at the Economic Club of New York yesterday, President Trump claimed credit for an economic “boom,” played down any negative effect on the American economy from his tariffs, and said the U.S. was “close” to an interim trade deal with China — but did not rule out imposing additional tariffs on the country.
Mr. Trump defended his tariffs to New York business leaders, a group that has been particularly skeptical about that policy, Ana Swanson, Maggie Haberman and Jeanna Smialek of the NYT write.
• He accused China of having cheated the U.S. for years, and denied that his trade policy had created uncertainty for the economy.
• “We will only accept a deal if it’s good for the United States,” he said. If Beijing does not accede to America’s trade terms, he said, “we’re going to substantially raise those tariffs.”
“Mr. Trump credited a program of tax cuts, deregulation and tough trade policy for creating seven million new jobs so far in his term and encouraging companies to set up shop in the United States,” Ms. Swanson, Ms. Haberman and Ms. Smialek write. “If Republicans took back the House and retained control of the Senate and the White House in 2020, America’s prosperity would continue, the president said.”
Instead, he blamed the Fed for any economic woes, “berating central bank officials for keeping interest rates too high and putting the United States at a competitive disadvantage to other countries,” they add.
And he predicted business leaders would vote for him. “The truth is look, you have no choice, because the people we are running against are crazy,” he said. “O.K.? They are crazy.”
Today’s DealBook Briefing was written by Andrew Ross Sorkin, Jamie Condliffe and Gregory Schmidt.
How SoftBank’s billions left workers in a hole
The Japanese conglomerate poured money from its almost $100 billion Vision Fund into start-ups, which dangled cash incentives to attract workers. But when those companies failed to make a profit, many contractors were left holding the bag, Nathaniel Popper, Vindu Goel and Arjun Harindranath report in the NYT.
The New York Times reviewed contracts and internal company documents, and interviewed more than 50 workers from SoftBank-funded start-ups. What emerged was a modern “bait-and-switch” pattern that was repeated across the world. Here’s what the writers found:
• Rappi, a Colombian food delivery company, has grown quickly with $1 billion of SoftBank cash, but widening losses have forced it to cut wages, and at the same time it has been criticized as neglecting the safety of its workers.
• The hotel start-up Oyo, which received $1.55 billion of SoftBank funding, promised local hoteliers in India big fees from high-paying corporate travelers if they signed up with the company and upgraded their properties, but later heavily discounted the room prices online.
“This is the result of a broader phenomenon known as overcapitalization,” in which venture funds give start-ups too much money, Mr. Popper, Mr. Goel and Mr. Harindranath write.
• “Flush with cash, entrepreneurs operated with scant oversight and little regard for profit.”
• “SoftBank and other investors have valued these start-ups at inflated levels, leading to an overheated system filled with unsound businesses.”
Now, unrest is growing among people who are most dependent on these companies. Protests against start-ups backed by SoftBank have erupted in New York, Bogotá, Mumbai and elsewhere, Mr. Popper, Mr. Goel and Mr. Harindranath report.
  Mike Cohen for The New York Times
Ken Chenault’s bet on an education unicorn
Ken Chenault, the former C.E.O. of American Express, is making a gamble on a training start-up called Guild Education, DealBook can exclusively report.
Mr. Chenault is leading a $157 million funding round, through the venture capital firm General Catalyst that he leads, that gives Guild a $1 billion valuation. It will be officially announced this morning. Mr. Chenault is also joining Guild’s board.
• Other investors in this round include Emerson Collective, Iconiq Capital and Lead Edge.
• Existing investors include Workday Ventures and Salesforce Ventures.
Guild works with companies to provide education benefits to employees. Led by its co-founder Rachel Carson — making it one of the few female-led unicorns — it works with companies from Walmart to Disney to offer their employees opportunities to go back to school. Guild is is connected to the University of Arizona, Purdue Global and other educational institutions.
This is another sign of the private sector finding new ways to provide new skills to workers, and could bring more attention — and competition — to employer-funded education initiatives.
Is Uber just a new utility to politicians?
Michael Moritz of Sequoia Capital has written an opinion article for the FT in which he suggests that transportation start-ups like Uber and Lyft are providing a service that means many lawmakers see them as a utility — and now they’re being treated as such.
“Many of the companies that rely on a set of wheels to be in business started because of the failure of politicians — particularly in the U.S. — to address chronic urban issues,” Mr. Moritz writes.
Now, with its competitors, at peak times Uber “is estimated to account for about 25 percent of all vehicular trips in downtown San Francisco,” he adds. “They are, in all but name, the new utility companies and are being treated as such.”
But “thanks to its presence on the streets of hundreds of cities around the world, Uber is running into the same issues that long ago beset the original privately financed gas, electricity, streetcar and underground railway companies,” Mr. Moritz writes. Politicians, “goaded by taxi companies, the public transit operators, and complaints about urban congestion,” he adds, “are rushing to intervene.”
• “In San Francisco, voters passed a special tax that slapped a 3.25 percent surcharge on most rides and a 1.5 percent tax on shared rides and zero-emissions vehicles, starting in January 2020.”
• “California’s governor, Gavin Newsom, recently signed into law a bill that could change the nature of employment arrangements for many of the same companies: it will, almost inevitably, result in expensive political campaigns during 2020 and years of legal challenges.”
  Gene J. Puskar/Associated Press
McDonald’s faces another sexual harassment lawsuit
A former employee sued the fast-food chain yesterday, claiming that a manager at a Michigan store grabbed her breasts and buttocks, writes David Yaffe-Bellany in the NYT.
“McDonald’s creates and permits a toxic work culture from the very top,” the former worker, Jenna Ries, said in the complaint. The manager is claimed to have threatened to fire Ms. Ries for rejecting his sexual advances.
The suit is the latest of dozens of sexual harassment complaints filed by McDonald’s employees in recent years.
And it comes as hundreds of McDonald’s employees are preparing to protest the company’s handling of such allegations and demand a labor union.
The chain has also come under renewed scrutiny after the McDonald’s board fired C.E.O. Steve Easterbrook this month for exercising “poor judgment” in a consensual relationship with an employee.
  Aly Song/Reuters
Facebook rolls out payment system across its apps
The social network continued its quest to bring Messenger, Instagram and WhatsApp closer together, with the unveiling of a new payment system called Facebook Pay, the FT reports.
• The new system “will provide people with a convenient, secure and consistent payment experience across Facebook, Messenger, Instagram and WhatsApp,” the company says.
• It will be introduced this week in Facebook and Messenger in the U.S. for peer-to-peer payments and purchases from some businesses.
This is part of Facebook’s bigger play to increase revenue from e-commerce on its platform in the wake of scandals that have forced the company to focus on privacy rather than the data-sharing that has enabled its huge advertising business.
It also more tightly integrates Facebook’s family of apps at a time when lawmakers and regulators are considering how best to crimp its power, which could be done by separating out apps like WhatsApp and Instagram from Facebook. Some critics have argued that Facebook is trying to get ahead of such a split by integrating its products as deeply and quickly as possible.
Google’s health care data deal piques regulators
The tech company’s data partnership with the hospital operator Ascension has already attracted the attention of lawmakers and regulators, Rob Copeland and Sarah Needleman of the WSJ write.
To recap, the two organizations are testing software that “allows medical providers to search a patient’s electronic health record by specific data categories and create graphs of the information,” the NYT has reported. The data of all Ascension patients could eventually be uploaded to Google’s cloud computing platform.
Regulators are already weighing in. The Office for Civil Rights in the Department of Health and Human Services “will seek to learn more information about this mass collection of individuals’ medical records to ensure that HIPAA protections were fully implemented,” the office’s director, Roger Severino, told the WSJ. (HIPAA refers to the federal Health Insurance Portability and Accountability Act of 1996, which regulates how health data can be shared.)
And lawmakers have also expressed concern. “Allowing already-dominant technology platforms to leverage their hold over consumer data to gain entrenched positions in the health sector is a worrying prospect,” Senator Mark Warner, Democrat of Virginia, wrote yesterday.
But so far the consensus of privacy experts appears to be that the initiative is permissible under federal law, the WSJ writes, however bad the optics might be.
Revolving door
The FT named Roula Khalaf as its new top editor. She will succeed Lionel Barber, and will be the first woman to lead the publication.
The former Man Group president Jonathan Sorrell is joining the hedge fund Capstone as its next president.
Citi named Brian Link and Sameer Singh as co-heads of its North America M.&A. team.
Richard Plepler, who stepped down as HBO’s chief in February, is reportedly in the final stages of talks to produce television shows and documentaries for Apple.
The speed read
• The drugmaker AbbVie has sold the largest block of bonds of the year — $30 billion worth — to fund its purchase of Allergan. (Bloomberg)
• The Brazilian-American investment firm 3G Capital is among suitors that submitted bids for Thyssenkrupp’s elevator unit. (Bloomberg)
• Dean Foods, the biggest milk company in the U.S., filed for Chapter 11 bankruptcy protection. (WSJ)
• Alibaba won approval from the Hong Kong Stock Exchange for a secondary listing in the city. (FT)
Trump impeachment inquiry
• With nationally televised hearings set to begin today, Democrats will begin building a public case that President Trump tried to bribe or extort Ukraine. (NYT)
• Mr. Trump has reportedly considered firing Michael Atkinson, the intelligence community’s inspector general, who reported the whistle-blower’s complaint to Congress. (NYT)
• John Bolton, Mr. Trump’s former national security adviser, said in a private speech that some of the president’s foreign policy was guided by his personal interests. (NBC)
• Rudy Giuliani makes a case for the impeachment defense. (WSJ)
Politics and policy
• The Supreme Court signaled support for the Trump administration’s efforts to end the DACA program that protects hundreds of thousands of young immigrants. But the ruling may hurt the president’s chances in what is already gearing up to be a difficult re-election fight. (NYT)
• The Supreme Court will not stop a lawsuit brought by families of Sandy Hook Elementary School shooting victims against Remington, the maker of the weapon that was used in the massacre. (NYT)
• Tesla plans to build its first European car manufacturing plant near Berlin (NYT).
• Intel has fixed a security flaw that it first said was repaired six months ago. (NYT)
• Disney introduced its Plus streaming services yesterday, but there were a few glitches along the way. (WSJ)
• Juul plans to cut $1 billion in costs. (Reuters)
• “Why Facebook passed on buying the predecessor to TikTok.” (Bloomberg)
Best of the rest
• China is trying to become a powerhouse in the fast-growing cannabis product industry, even though marijuana is still considered a dangerous narcotic in the country. (WSJ)
• Two people in China were diagnosed with pneumonic plague, a fatal and highly infectious illness related to bubonic plague. (NYT)
• Borrowing costs are dropping, opening the floodgates into the corporate bond market. (Bloomberg)
• New York State offers a test case for higher minimum wages. (NYT)
• Fukushima, the site of nuclear disaster in 2011, seeks to move on by reinventing itself as a leader of renewable energy. (The Verge)
• WeWork’s phone booths were a source of pride — until they were found to confine customers in a small box of carcinogenic fumes. (Bloomberg Businessweek)
Thanks for reading! We’ll see you tomorrow.
We’d love your feedback. Please email thoughts and suggestions to business@nytimes.com.
Get unlimited access to NYTimes.com and our NYTimes apps. Subscribe »
Copyright 2019 The New York Times Company
620 Eighth Avenue New York, NY 10018
View in Browser