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tv   Bloomberg Business Week  Bloomberg  June 15, 2019 3:00am-4:00am EDT

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carol: welcome to bloomberg businessweek, i am taylor riggs inside the magazine headquarters in new york. a surprising fallout from the trade war. a new red scare. ge back from the brink. first, here is joel weber for a look inside the issue.
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i wanted to start with comcast. what i loved is that it is kind media companydgy transforming. isthe ceo, tucker roberts the guy leading the company's .oray into e-sports they are doing it in philadelphia and they have built a single use stadium for e-sports which is a crazy way you can really double down and make a big that. the question is, will it really work? ge betting onbout a new ceo. market cap has been falling. this is the most iconic american company and it has hit every wrong on the way down when last year it even fell out of the dow. the ceo came out of retirement to save the company and the question is, can he do it?
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the ultimate ceo test. islor: another story that this week's cover was interesting because when we talk about the trade fight, it is usually about technology or ip but this one is about the medical sector. anderson, the place for cutting edge cancer research. chinese researchers there, some , inhom are u.s. citizens this ongoing trade conversation, it raises all kinds of civil liberty questions and at the heart of it though is is this in our best interest? thisr: we got more on story from peter walton in san francisco on how not to cure cancer. : in houston, they have had a crackdown on people they
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suspect are working there as cancer researchers who have professional ties back in china. there were very serious investigations into five of them. four of them have since left. it smacked a little bit of overkill to peter who were very close to it and people started using words like mark kirk the is him. taylor: one of the characters is woo. woo is an epidemiologist and quite a prominent one. she joined the company having been educated in china in the mid-1990's and worked there some 27 years before being challenged very directly by the national institutes of health. the big funder of biomedical research in the united states. the nih, using information from herfbi, which had received
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computer accounts and done a thorough investigation of her doctor ofsed the having undisclosed relationships, professional relationships, where she was and workhina to advise in her field of epidemiology. this created a kind of parallel structure they said was against their rules. thething led to another and company came down very hard on her and she left in january. it is a peculiar situation in that epidemiology is not an area that leads to a lot of intellectual property. there were no direct accusations of ip theft or trade secret theft or espionage but it shows the sensitivity within the biomedical community and certainly at andy anderson. taylor: this seems to be a
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change where we want to protect the research even if it slows down some of the cure is for cancer because we do not want to involve china. taylor, that is exactly what is going on and it is surprising because it is being driven by the nih. i interviewed the number two there who described the situation where he considers this pre-patented material as he called it or what we would describe as berry a sick scientific research without any proprietary information or technology associated with it as being highly valuable and something that the united states needs to protect from china. taylor: how recently has this all occurred? the last few weeks or years? peter: the trump administration has ratcheted up the rhetoric and accusations. and the questioning and driving of policy through the nih, since
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early 2018, five last summer, the director sent out a letter institutionsipient getting nih funding saying this is very serious and you cannot have researchers with undisclosed ties to foreign countries. taylor: the thing about this isalating trade war is it extremely difficult for the u.s. and china to do without each other and there is not enough incentive yet for the rest of the world to choose sides. here is mark champion in london on why this next cold war will not look much like the old one. two: you would have technological zones. either you live in the chinese zone and the five g networks are and yourt by huawei
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driverless cars are provided by baidu. side, you willr have google, facebook, tesla. all these kinds of things. that is the idea. we will have something similar and as you can see in the dynamics of what is happening in awei, peopleith hu can see that cold war separation beginning that it is a tech -- totalis no barb dwyer, no separation. you can still drive a ford in china. it will look quite different. is ae not even clear, this prediction, we are not even clear it will happen this way. taylor: either a physical or , a tech cold war as you described, this is not easy. take us to the u.k.
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four countries to take sides, it is not easy. mark: the u.k. is a perfect example for how difficult and complicated this will be. -- you just had the d-day celebrations reminding us of the alliances between the u.k. in the u.s. all were vast allies through the cold war. and here you have the u.k. saying to the u.s. over huawei, we do not think we need to separate in the way you are talking. wei to buildw hua quite a bit of our 5g network. not all of it. not the most sensitive core. but quite a lot of it. the u.s. is not happy because they want a complete separation. his closean ally in
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as the u.k. says they do not want to choose, that tells you there will be an uncertain process at the very least. jason: what is interesting is extricating or decoupling or detangling or disentangling all of the big global tech companies from each other. that could take years to undo and then years to reform a lot of these alliances on either side of this digital curtain, right? mark: absolutely right. there is some of this beginning to happen. a number of companies have moved some of their manufacturing operations out of china in anticipation that this could get worse and they could get hit. there has been some movement that you are talking about the disentangling of a global network, a supply chain network that has grown up over a period of several decades and that will be very difficult to undo. when you think about companies
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like foxconn, a taiwanese company that has huge operations in china producing parts and whole products are companies like apple. how do you untangle all of that without doing enormous damage? taylor: turnaround times to curate a mission to clean up mexico's most important company us, a new ceo tries to save the once great ge. this is "bloomberg businessweek. "
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taylor: welcome back to "bloomberg businessweek," taylor riggs. from 2:00 until 5:00 wall street time you can catch up on bloomberg and you can listen to our podcast on at can also find us online
3:13 am and our mobile app. bringing ge act from the brink. the new ceo may not be able to restore it to its past glory that he may be the best hope to fix it. gt go. my terminal at we turned to the ge market cap. it once outpaced all of its rivals like united technologies, 3m and honeywell but it has recently fallen low its major competitors. they are saying the key to turning ge around will be to sell off some of its unprofitable businesses and focus on a laser type strategy. we got more on ge from our reporter in chicago. job?y would he take the gm he was loaded up at the boston red sox. the greatest comeback, 108 years, no world championship. now, he is offered ge and he
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spoke about this in an article. my friends are telling me what are you doing? you have a great legacy. you made all of this money and have a great life. why will you step into this mess? and he said, that is exactly why i should do it. carol: wall street is not convinced that his set of skills is a great match for general electric. he acquired a lot of companies. ge is going to sell off businesses. general electric is a company you cite analysts in your story that say we do not deem these are the right skills for what ge needs right now. anyan: what he did at dinner iher is different in the short term than what he has to do at ge and he certainly never faced
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the financial challenges, the magnitude of the financial at ge.ges that he does he also faces an inbred culture. hard tos really working change that. to get everyone on line with his vision of what he calls "true lean." and he throws around a lot of japanese words to bring home the point. in fact -- carroll: and he is doing it under the spotlight. daniher is not a company we talked about a lot or ever that ge is a company that we talk about all the time. yan: and every time he opens his mouth, the market is listening and reacting. he is having to learn a little bit of that skill. i have read a bunch of his stuff and he seems to be getting better at it but he has
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emphasized that he will be transparent. and for the most part, the analysts of wall street are giving him credit for being more transparent than his predecessors. clear one thing that is and seems a piece with his previous style is he is very hands-on. you open with a great anecdote of a plant manager getting in the mail directly from him essentially saying, i am coming to visit. that is not his only one. he emailed his plant manager in pensacola on a sunday saying, is it ok if i come down there? like he would say, that is not a great day for me. [laughter] he did it in muskegon. if he told a guy there that we are going there, we may as for go to indiana where there is another plant.
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he was visiting factories when he was just on the board, and before he was the ceo. the economic section come on another company with a new ceo in the middle of a turnaround. can the new chief reverse its decline? here is economics editor christina lipp glad. about half of what it was in 2004. the company is carrying $100 billion in debt. downgradedit was which in short order also downgraded mexico's sovereign debt which gives you an idea of how integrated their fe utures are? taylor: you talked about the new ceo and how closely it is the country.
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they know each other going way back to tabasco, and oil state. he is an agronomist by training with no oil experience per se but, the ceo appointment at pemex is typically political. that said, the corruption problem also predates his current tenure. he has an idea though that as he likes to say, if you cut off the head from the body, if you replace the top management of the company, the corruption problem will mostly be solved. taylor: talk to me about that corruption problem. it seems you do not get into
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this position overnight. years or decades of mismanagement, production declines and corruption. how did pemex get here? >> it is a bit like what we saw in brazil with petrogas. a hugely sprawling company with upstream operations and downstream with refineries and gas stations. andyone is taking a little one of the biggest manifestations of corruption was the gasoline theft problem that mexico had that the whole world learned about when there was a massive explosion. these guys were trying to tap gasoline from a pipeline. that was the most obvious thing to fix. that kind of problem was being facilitated by insiders in the company communicating with the gangs and allowing them access
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to the infrastructure. one of the first moves of the new government was to dispatch the military to guide the pipelines. the company also turned off certain condiments which -- conduits which meant there were huge lines at the gas stations. they were also rounding up these gang members who were also parts of drug cartels. hasrding to romero, there been a 95% reduction in gas theft which will add up to 35 billion pesos in revenue for the company. that should not be discounted however on the other hand, those numbers cannot be verified. the company is opaque. to freezeming up, how your salary plus, comcast's youth movement has a push into e-sports. ♪
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taylor: welcome back to "bloomberg businessweek," find taylor riggs. you can also listen to us on the radio on sirius xm and also on a.m. 1130. and in theon, d.c. bay area and in london. and on the bloomberg business app. we have been hearing a lot about paid parental leave but not as much about pregnancy at work. here is reporter claire suitors. >> they are facing two discrimination lawsuits and one of them is about pregnancy. casen complainant in the
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worked five years, got really good reviews and promotions. and then come and when she went on maternity leave she came back for her annual review and they froze her salary. she says the only other time they have heard of a salary being frozen was when someone got into trouble for doing something really bad at work and there was an hr investigation. instead of firing the employee, ity froze the salary which was a punitive measure. they did not give her a reason. she got pregnant again and when a maternity leave again and they froze her salary again and then told her to look for a new job. carol: what does the company say? me but would not talk to they have a public statement that says -- this is not true. figures some facts and that we have at jones day and we
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will litigate this in court. carroll: there are women but they are not in a senior associate position. of the about a quarter partners are women. and many have been brought in from other firms. necessarily how accurate that is because she does not know the whole firm. carol: it goes to a bigger story and you put this out. eloquently about sidelining women and that means they do not have as much economic power ultimately versus men. gap,en you look at the pay when you look at people just out of college, women and men in their early 20's and early careers, they make about the same. it really starts to dip when women get into their 30's and start having kids. the economist say if you only focus on women that have
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children versus women that do not, it is much more severe for women that have kids. have athe other hand salary bump when they have kids. jason: where will the pressure come from, the private sector or the legal sector? >> i think it will depend on each company. for jones day, the pressure is from the legal system. but i think what will happen is that they will have to give men leave also. women are not going to be able to break free from this stereotype in the gender roles unless the men can take on some of the home care and childcare burden and men cannot do that unless companies give them the freedom to do that. about the also talked settlement from jp morgan that a man made of that very issue. he was essentially denied the role of caregiver because his wife was not incapacitated. 16 leavesan has about
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of paid leave that is gender-neutral. he applied for the primary caregiver, 16 weeks, and they said no, his wife was the primary caregiver and so he sued. they settled. that still assumes that in a two primaryousehold, one is and i think it will be difficult for people to work through that and not assume that the woman is the primary caregiver. taylor: comcast invests in the future of gaming and delivery on sunday, what the future may hold for ups. this is bloomberg. -- this is "bloomberg businessweek." ♪
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♪ welcome back to "bloomberg businessweek." still ahead, uber drones may soon make a fast food even faster. and speaking of summer, holly peterson on her new novel. comcast's youth movement. we talked to the prince of the wood hundred $60 billion comcast
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empire -- of the $160 billion comcast empire. the cable giant into the jens the world of e-sports -- gen-z world of e-sports. >> he is the president of comcast's e-sports business. he is not as any executive, but the son of the company's ceo and grandson of the founder of comcast. we told the story to look not alsoat this dynasty, but about this new emerging business, one of the hottest ones in entertainment, e-sports. are not familiar, this is people watching other people play video games. tucker roberts grew up in this in this environment and grew up with video games and had a different view than older executives. he was tapped to invest in the
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business on behalf of comcast. what we are seeing is a lot of traditional media and sports companies diving into the e-sports business. everyone is realizing that viewing habits of traditional media is changing. people want to be able to watch things anytime they want. and in sports, demographics are changing. a lot of parents have trouble with football. at the same time, they have less trouble with the violence of video games. taylor: you use it tucker roberts as a lens to which you are showing an old media company getting into this new venture. i wonder if this is sort of an insight into how these companies are targeting a younger demographic and trying to capture some of that streaming audience the e-sports.
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via e-sports.-- >> absolutely. theit is funny because videogame industry, which has a history of not being welcoming to women, you look at these ads theyes for the advertising are trying to get on these new and they aretforms saying look, we have this great demographic that loves young people and this is the way to reach them. so yes, this is all about reaching the consumer who may not be watching monday night for all -- football. taylor: cap e-sports sustain the hype -- can e-sports sustain the hype? >> that is always the question. overwatchtach --
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last as long as the nfl? tucker's strategy is to try to acquire as many games as he can. taylor: another company thinking about the future is ups as online retailers and competition grows. the company is going through continuous transformation according to the ceo. >> we constantly review the needs of our customers. what we were hearing recently that ournly do as we do, but that we deliver on saturday pick up packages on saturday that can be delivered on monday in over 170 countries. by picking up on saturday, we can deliver on monday. we are starting to hear more about the need for sunday delivery. taylor: are you not ready to do it? >> we are looking at it now.
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most recent contract, we have language that covers us percent a.m. sunday -- four saturday and sunday. strategically, how much do you worry about amazon? are they and enemy, a competitor? all of the above? >> this world has gotten way more complicated than having somebody labeled as a competitor or customer. it is often times a combination of both. that we haveccept mutually beneficial relationships. as long as we do, that is the path we are following. i would not say that we worry about amazon. we respect them just like we respect others that may be competitors. we do our job and carry out our strategies, then we feel
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very comfortable. carol: talk to us about that transformation plan. i have been to louisville and it is fascinating what you guys are doing. is not just about getting packages from point a to point b, but you are working with the health care sectors and other sectors. as you transform the company, how much becomes transformations versus what you are doing today? >> we are 112 years old, so we have probably been through five major transformations. this is one of those. the message we are getting is that this is continuous transformation. there is not a beginning or an end. the way it is changing, this is a way of life. peoplereally believe our have accepted that we have focused in three particular areas. the first of which is high-quality revenue growth. the second is increasing efficiency and using a lot of
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technology. third is broadening our management team and our culture. cultures are like anything else, they have to change with the times. the sense of urgency is much more making decisions. it is much more important now. that is where we are focusing our leadership team. taylor: still ahead, the world's largest bookmaker comes down to earth. "hot in the hamptons." this is "bloomberg businessweek." ♪
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taylor: welcome back to "bloomberg businessweek." join us for bloomberg businessweek every day on the 5 p.m. wall p.m. to street time. also catch up by listening to our podcast on itunes, soundcloud him and and find us online and on our mobile app. businessweek got the first look
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--a drugmaker's new creation drone makers new creation. , which peopley will recognize as the maker of this quad copter drone, is now trying to expand into ground warfare with these diy $500 tanks. carol: it is part teaching tool part battle bot. generally, you are buying it ready to roll out of the box. this thing is significantly assembly required. jason: what are they going after? not just of the diy market necessarily, but i feel like this is the postmodern version of building a little model airplane. but it is even bigger. >> very much so. build your own remote control car kind of element to this.
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objective they would say, aside from attracting attention to other products, is to circle up with the robo masters competition they hold every year in shenzhen. is a three-week tournament with a are trying to identify up and coming robotics talent. carol: this is a big deal! >> certainly, in china, japan, and increasingly the u.s.. carol: tell us about it. who is their, how do people -- there, how many people? >> typically teams of college aged students spending the time to put things together and facing off. carol: you also say there are robots that are medics. robots that are supplied mules, mules, right/y -- right?
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>> there are pretty discrete roles they fall into on any given team. carol: and there is a reality show. >> naturally, they are also trying to identify the most talented robot assists -- robo ticists and why not make a show out of that? jason: this is a talent pool, in some ways. at a time when we talk about drones that will be employed by uber. the scientists and science behind this needs people underneath it. >> absolutely. say thatny would education is one of their biggest priorities as far as making sure the pipeline stays strong. they have knocked out most other competitors of any significance
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as far as recreational and civilian drone making goes. but they are battling themselves because the margins are low. taylor: staying with drones, the first drone food delivery is on track for the summer. >> they intend to preview uber , the part of uber that will take everybody up in the sky as well as food delivery. i got to see a luminary test. -- preliminary test. go up in theig mac air and it was supposed to fly half a mile. were notinds cooperating, so instead it did a little demo. it went up and down. p-womp.e like wom food delivery has taken on a totally different dimension and that we are taking it even further. what is it that has made it such? >> it is just convenience.
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let's say millennials. why get up from your sofa if you don't have to? why get up from your sofa when you can command something to come right to you. one thing that uber elevate in the visions which i think -- in visions -- envisions which i think is awesome is they have restaurant.high-end they are in remote brooklyn. i could have pink peppercorn dishes delivered to my house without fighting the crowds were taking an hour to get there -- or taking an hour to get there. jason: or relying on a driver or bicyclist to navigate his way. carol: how does this work? would you literally open up your front door? >> it is not coming to your
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apartment building anytime soon. but they will have designated drop-off spots and couriers who will pick it up. the other thing they are working on is they want to put qr codes oof -- the roof. carol: but don't they still need to get faa approval? >> they feel pretty good about it. , this guyi understand who heads it up is very careful , they are definitely waiting on approval but they think it is close and they are getting ready to launch in july. carol: for somebody who knows the food space, what do you think a delivery food is going to do -- think drone delivery food is going to do? >> it is going to speed things
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up. there will be the thing where you want the fantastic visual of it. but what most people want from delivery is money and convenience. will think over -- uber absorb the cost of drone delivery for a while as convenience becomes key. they see that because they have built up a huge network of customers. art strikes a up, patriotic tone on the global stage. plus, holly peterson shares what it is like growing up in the 1%. this is "bloomberg businessweek."
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taylor: welcome back to "bloomberg businessweek." i am taylor riggs. you can also listen to us on the radio on sirius xm and in new york, in boston, in washington dc. in the bay area, and in london on dab digital and on the bloomberg business app. "pursuits" art at a venice expo has seen a rise in patriotism. now, it is a venice art show which happens every year. carol: what is that? >> it is a huge expo for international, contemporary art. has a pavilion and a bunch of
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different countries have a pavilion. they have artists, and represent the country. it is a lot of new art and new artists. sometimes, the art can be quite strange and it is not always great. for the past decade or so, it has really been about the artists exploring new things to say. , ashe past couple of years nationalism has sort of risen around the world politically, we have seen the art in these national pavilions has also become nationalist and patriotic. it has been interesting because because that patriotism has been divorced from that stage for a long time. jason: i was interested to know that the u.s. pavilion, for is owned by the guggenheim but also the state department? that was a twist. what" that was a "wait,
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moment. -- the art institutions run these pavilions but are also supported by the government. but what is interesting about this year, we have got, for example, brazil has this great video art about this dance format in brazil. it is defined and gender fluid. the art is really progressive and brazil is not in a progressive moment. and it is certainly not a hospitable place for lgbtq people. so to have this kind of statement, it is kind of talk about what the artists wishes brazil stood for, which is in contrast with what the government is saying. carol: the story talks about what happened after world war ii and how these pavilions were used. >> yeah. it's got to be this thing where
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it used to be kind of patriotic and america would be like here is our abstract expressionism. the freedom and release from boundaries you can express in america. and the russian pavilion would be more about socialist realism. like this is what the proletariat looks like. that ideal. after world war ii, he did have this national stance. -- it did have this national stance. carol: jackson pollock, these were names that helped propel it names even further -- big names even further. carol: thinking about how many cultures and citizens are repressed about this is a form where they can put out a view. >> and be in dialogue. carol: so they really represent the political turmoil we are seeing. >> yeah, it is kind of a response to what is going on in the world. these things are planned out a couple years in advance. it is not responding to immediate politics of it is kind of evolving as world politics evolve. with some are in full
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swing, it is time to head to the beach, party it up, and live the good life. in thenew book "it's hot hamptons" holly peterson writes about growing up in the 1% and how it changed her life. >> i believe we are in a world of unbelievable inequality between the 99% and the 1%. and at 1% is even being parsed out. and not enough people understand what goes on inside that world. i grew up inside that world. i also happen to be a hard-working journalist. i feel it is my duty to expose these people and to tell people how it really does. because people need to know how completely insane it is. carol: take us to the hamptons over the summer. in the book. and we don't want to give it all away because we want people to read it. but tell us how you show those inequalities through your writing. >> i dated a local guy in the
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hamptons for eight years. "itote my last book called happens in the hamptons" about the 99% and 1% in a testosterone-fueled summer community. you see the differences in income so much more so in the summer. there are more jets and helicopters. people have more staff, they have more parties, they entertain more. and in cities like new york, it is harder to show how much money you have. in the summer, you can drive around in a porsche. you arrive in a jet on the weekend. there is so much more ways to show in the summer that i felt the hamptons is prime material to expose the ways of the , andhy, satirize them hopefully, have some commentary on what that says about our world today. people think it is a light beach
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read, but i hate when they say that. athink it is actually substantive look at our society. hown: you do get a sense of this is, in some ways, a tale as old as time. it is the seasonals versus the townies. it is about money, it is about sex, it is about money -- about power and all of that mixed together in new york. how do you create these archetypal characters? >> i see them around me all the time. i grew up with a man who was an important wall street guy, a self-made man named pete peterson. he really taught me that a life well lived is a life where you are working incredibly hard. hand, it is aer deep awareness of your privilege, of giving back, and
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an awareness of other people. that is who he was. whoy to be a journalist really tells stories as i see the. -- them. and i try to expose the things that i think are important to be exposed. one is inequality and the differences between us. and another is the psychology of these incredibly privileged people. jason: what is it that has allowed us to get to this point where you read a book like this and we say, yeah, that makes sense. even though it is outrageous. >> you mean they are bad values? jason: yeah. >> i find -- one andrown up with having been around them, i find that the currently successful people are incredibly insecure. they are very anxious. how may times have you ever met
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a really cool, relaxed, normal ceo who is running a huge multinational conglomerate. you just don't see it. they are anxious by trade. and that anxiety and need to succeed is what makes them head of everything. in order to have that drive where you are going to work 18 ,ours a day until you are 92 there has to be something in you from your childhood that is fueling a need to achieve and succeed. and sometimes, with certain people, it goes a little haywire. you turn into a total jerk because you are so anxious. and never, never is enough. that is when people behave badly. taylor: you can hear that full conversation on our bloomberg is this extra podcast. -- business extra podcast. find it wherever you download your podcasts.
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at comcast, we didn't build the nation's largest gig-speed network just to make businesses run faster. we built it to help them go beyond. because beyond risk... welcome to the neighborhood, guys. there is reward. ♪ ♪ beyond work and life... who else could he be? there is the moment. beyond technology... there is human ingenuity. ♪ ♪ every day, comcast business is helping businesses go beyond the expected, to do the extraordinary. take your business beyond. ♪
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emily: i'm emily chang and this is "best of bloomberg: technology." we bring you all of our top interviews from this week. apple's top supplier is coming up with a contingency plan to move out of china if the trade war continues. will other tech firms follow? sort -- h-shares sore on the first day of trading, we hear from this cybersecurity firm's ceo.


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