DealBook Briefing: Inside McKinsey’s Biggest Crisis

DealBook Briefing: Inside McKinsey’s Biggest Crisis

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Investors, especially the activist Nelson Peltz, appeared pleased, with G.E. shares up nearly 8 percent yesterday. (To some analysts, it all looked like a rebuke of the company’s previous C.E.O., Jeff Immelt, who championed both the businesses that are being sold.)

DealBook’s take: G.E. is doing what analysts and investors have long demanded. But its C.E.O., John Flannery, cannot expect much slack from shareholders: They have waited years for a recovery, and want to see quick results.

Photo President Trump and President Xi Jinping of China. Credit Andrew Harnik/Associated Press
China plays down its tech obsession, but it won’t fool Trump

President Trump has made it very clear that the trade fight with China is largely about technology. Beijing’s reaction might be too little, too late.

Censors there have reportedly ordered media outlets to stop mentioning Made in China 2025, the nation’s master plan to become a tech superpower. The Trump administration accuses China of stealing cutting-edge American tech for that effort, and Beijing may hope a little quiet on the subject will ease concerns.

Not likely. Signs of tech ambition are visible beyond Chinese state media. (The WSJ reports that China is poaching talent from Silicon Valley, for example.) Ana Swanson and Alan Rappeport of the NYT report that Mr. Trump may soften his plans to restrict Chinese investment in U.S. technology — but isn’t backing down.

Elsewhere in trade: America says it will impose sanctions against all importers of Iranian oil. Canada is preparing steel tariffs. How the U.S.-China trade fight hurts Europe. Senator Bob Corker is attempting another stand against the Trump tariffs. And if Harley was the first to cave in to tariffs, who’s next?

A reborn Uber got a big vote of confidence. Now comes the hard part.

Uber has successfully appealed the loss of its London license, meaning it can continue to offer ride-hailing in its largest European market. But this is more than just a commercial victory — it’s also a sign that regulators believe the scandal-struck company is changing its ways.

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As our colleague Adam Satariano explains, regulators outlined a biting critique of Uber during a two-day hearing, bringing up its use of software to avoid government oversight, sexual assault allegations against drivers, data breaches and more.

Uber’s representatives accepted a surprising amount of the criticism, then described how the company had changed its operations in the ten months since Dara Khosrowshahi took over as C.E.O. The presiding judge listened, reissuing Uber’s license.

One catch: The new license lasts 15 months; the standard length would be five years. Mr. Khosrowshahi must now show that the Uber described in court is the same one carrying people through London’s streets.

Photo Scott Stringer, New York City’s comptroller Credit Caitlin Ochs for The New York Times.
How New York City’s comptroller is improving corporate governance

Over the past four years, Scott Stringer, who oversees five New York City public pension funds, has pushed corporate America to overhaul how it governs itself. How successful has he been?

Mr. Stringer’s office told DealBook that his latest initiative — to require boards to release more information about directors’ ethnicity, gender and experience — had brought results at 35 major companies, including PepsiCo and Honeywell. The comptroller’s team talked to more than 85 companies about the idea, and it expects more to fall in line.

That’s a good start. But the jury’s still out on how successful the push will be in the long term.

Photo A sign outside a Taco Bell in Fitchburg, Mass. Credit Brian Snyder/Reuters
American businesses are struggling to recruit

With unemployment so low, U.S. employers are finding jobs difficult to fill. A survey of 2,000 companies by ManpowerGroup found that 46 percent of them were struggling to hire.

More from Manpower:

Most of the jobs where demand is growing are mid-skilled roles such as electricians, welders and mechanics that require training, yet not always a four-year college degree. More than half of the companies surveyed are investing in learning platforms and development tools to build their talent pipeline, up 7 percent from 2016. Nineteen percent of employers are also changing their existing work models, including offering flexible work arrangements.

Photo Mary Schapiro Credit Michael Reynolds/European Pressphoto Agency
Revolving door

Morgan Stanley has hired the former S.E.C. chairwoman Mary Schapiro as a director. (NYT)

Spotify has picked Dawn Ostroff, most recently president of Condé Nast Entertainment, as its chief content officer, in a sign of the streaming service’s video ambitions. (NYT)

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RBC Capital Markets has hired Larry Grafstein, most recently co-head of M. & A. at UBS, as a deputy chairman of investment banking.

The speed read


• A new regulatory filing showed that 21st Century Fox thinks a deal with Walt Disney more likely to win regulatory approval than one with Comcast. And Goldman Sachs stands to make about $105 million from advising Rupert Murdoch on the Fox-Disney deal.

• The sale of Toshiba’s memory chip unit to a group led by Bain Capital has made private equity a little more acceptable in Japan. (FT)

• Reince Priebus, President Trump’s first chief of staff, is said to have offered T-Mobile advice on its deal for Sprint. (Politico)

Politics and policy

• The consequences of Republicans’ blocking President Obama from filling a Supreme Court seat became powerfully apparent in rulings yesterday. (NYT)

• The House will vote on new tax bills, including one to extend President Trump’s tax cuts beyond 2025, in the fall. (WSJ)

• Meet B.E.A.T., the new corporate tax that American companies are trying to avoid. (WSJ)

• The E.U.’s biggest countries will reportedly block any bid by Britain to stay in the European single market while maintaining curbs on immigration. (Bloomberg)


• Facebook is changing its political ad rules and allowing back (some) cryptocurrency ads. (And it’s scrapping a plan to build internet-spreading drones.)

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• Makan Delrahim, the Justice Department’s antitrust chief, said American Express’s Supreme Court antitrust win wouldn’t hurt his team’s ability to rein in tech giants. (Axios)

• A battery that caught fire in a Tesla crash in Florida last month reignited twice after firefighters had extinguished it, the National Transportation Safety Board says. (WSJ)

• Silicon Valley read the wrong memo: Older C.E.O.s run faster-growing start-ups. (CNBC)

Best of the rest

• From The Verge: “The gospel of Elon Musk, according to his flock.”

• The S.E.C. has questions for the maker of La Croix about its impressive sales claims. (WSJ)

• Malaysia’s police seized about $273 million of items — including Hermès handbags, diamonds and Rolex watches — during raids related to the 1MDB scandal. (Bloomberg)

• A celebrity hair stylist in Manhattan has been arrested on insider trading charges. (New York Post)

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