tv Bloomberg Business Week Bloomberg June 16, 2019 4:00pm-5:00pm EDT
♪ taylor: welcome to "bloomberg businessweek." i am taylor riggs inside the magazine's headquarters in new york. in this week's issue, a surprising fallout from the trade war. the u.s. is purging chinese scientists in a new red scare. plus, bringing ge back from the brink. but first, here is "businessweek" editor joel weber for a look inside this week's
issue. i wanted to start with comcast. it is another story in the features section. what i loved about it is that it is kind of an old, stodgy media company transforming to the next generation. joel: this is a fun one. the son of the ceo, tucker roberts, is the guy leading the company's foray into e-sports. they are doing it in philadelphia, where the company has its roots, and they have actually even built a single use stadium for e-sports, which is a crazy way you can really double down and make a big bet. but the question is, will it really work? taylor: another question has to of will this work has to be ge betting on a new ceo. market cap has been falling, what is the update on ge? joel: this is the most iconic american company and it has hit every rung on the way down when last year it even fell out of the dow. the ceo came out of retirement to try to save the company and this is really a question of,
can he do it? it is the ultimate ceo test. the jury is still out if you can pull it off, and that is what they dug into. taylor: another story that is this week's cover was interesting because when we talk about the trade fight, it is usually it is about technology or ip theft, but this one is about the medical sector. joel: one thing that has happened is md anderson, the in america for cutting edge cancer research. one of the things that has happened is chinese researchers there, some of whom are u.s. citizens, have actually been purged out of the country. in 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? taylor: we got more on this that story and this week's cover story from peter walton in san francisco on how not to cure cancer. >> the cancer center md anderson in houston, where they have had a bit of a crackdown on people they 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 people who were very close to it and people started actually people started using words like "mccarthyism." taylor: one of the characters is woo. walk me through that story. peter: dr. woo is an epidemiologist and quite a prominent one. she joined md anderson 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 the fbi, which had received her
computer accounts and done a thorough investigation of her past, accused the doctor of having undisclosed relationships, professional relationships, where she was paid in china to advise and work in her field of epidemiology. this created a kind of parallel structure they said was against - that they said was against their rules. one thing led to another and the md anderson 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 md anderson. taylor: this seems to be a change now where we want to
protect the research, even if it maybe slows down some of the cures for cancer, some of the research getting there because we do not want to involve china. peter: taylor, that is exactly what is going on and it is quite surprising in the sense that 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 basic 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? are we talking about something in the last few weeks, the last few years? peter: the trump administration has ratcheted up the rhetoric and the actions. and through questioning and driving of policy through the
nih, since early 2018. last summer, the director sent out a letter to 10,000 recipient institutions getting nih funding and said this is very serious to the nih. you cannot have researchers with undisclosed ties to foreign countries. taylor: the thing about this escalating trade war is it is extremely difficult for the u.s. and china to do without each one another, and there is not enough incentive yet for the rest of the world to choose sides. here is senior reporter mark champion in london on why this so-called next cold war will not look much like the old one. of iron curtain people are talking about now is a technological iron curtain. you would have two technological zones. either you live in the chinese zone and the 5g networks are rolled out by huawei and your
driverless cars are provided by baidu. the social media is we chat. and on the other side, you will have google, facebook, tesla. all these kinds of things. that is the idea. we will have something similar because as you can see in the dynamics of what is happening in particular with huawei, people can see that kind of cold war separation beginning, but it is with tech. there is no barbed wire, no total separation. you can still drive a ford in over in china. it will look quite different. we are not even clear, this is a 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.
virtual one a tech cold war as you described, this is not easy. take us to the u.k. for countries to take sides, it is not easy. especially when you're are talking about technology. mark: absolutely. 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 long, deep alliances between the , military alliance, intelligence alliance, between the u.k. and the u.s. they were vast allies all through the cold war. and here you have the u.k. saying to the u.s. over huawei, actually we do not think we need , to separate in the way you are talking. there was a per limit every madeion made that w preliminarn that we will allow huawei to build 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. close as an ally as
the u.k. saying they do not want to choose, that tells you there will be an uncertain process at the very least. jason: what is also 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. you see stories. there is some of this beginning to happen. a number of companies have moved actually 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 but 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. , and that is going to be
really difficult to undo. when you think about companies like foxconn, a taiwanese company that has huge operations in china producing parts and whole products for companies like apple. how do you untangle all of that without doing enormous damage? taylor: still ahead, turnaround times two, a mission to clean up mexico's most important company. plus, a new ceo tries to save the once great ge. this is "bloomberg businessweek." ♪
and you can listen to our podcast on bloomberg.com. you can also find us online at businessweek.com and our mobile app. in this week's feature section, bringing ge back from the brink. the new ceo may not be able to restore it to its past glory but he might be the best hope to fix it. come into my terminal at gtv . we charted ge's market cap. as you can see, it once outpaced all of its rivals like united boeing, and, honeywell, but it has recently fallen below its major competitors. they are saying the key to turning around ge will be to sell off some of its unprofitable businesses and tightus on a laser strategy. we got more on ge from our reporter in chicago. >> why would theo epstein take the gm job at the chicago cubs? he was loaded up at the boston red sox. why? the greatest comeback, 108 years, no world championship.
so now larry culp is offered ge and he spoke about this in an article with the harvard business school publication, where he said, my friends are telling me "what are you doing?" have a great legacy. you made all of this money and youyou made all of this money and have a great life. why would you step into this mess? and he said, that is exactly why i should do it. carol: this is what is interesting. wall street is not so convinced that his set of skills is a great match for general electric. he acquired a lot of companies. ge, he actually has to sell off businesses. you are also talking about general electric being a company where the revenues are five or six times more. it is a very different beast. you cite analysts in your story that say we do not deem these are the right skills for what ge needs right now. bryan: yes, what he did at daniher is different in the term thanor the short what he has to do at ge, and he certainly never faced the
financial challenges, the magnitude of the financial daniher that he does at ge. he also faces, you know, an inbred culture. and he is really working hard to change that. to get everybody 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 -- , he iscan i just say doing it under the spotlight. daniher is not a company we talked about a lot or ever, but ge is a company that we talk about all the time. bryan: and every time he opens his mouth, the market is listening and reacting. he is having to learn a little
>> half of the associates are women, but only a quarter of them are partners. a lot of those people are brought in from other firms. like they have already been promoted to that level and then they enter. i do not know necessarily how accurate that is because she clearly does not know the whole firm. but that is what she saw. carol: it goes to a bigger story and you put this out very eloquently in your writing, that we are sidelining women and that means they do not have as much economic power ultimately versus men. >> when you look at the pay gap, how much women make relative to men, and 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. and it really starts to dip when women get into their 30's and start having kids. even the economists who study this, they say if you only focus on women who actually have
children versus women that do not, it is much more severe for women that have kids. men on the other hand have a ee a salary bump when they have kids. jason: where will the pressure come from, the private sector or the legal sector? what is your sense? >> i think it will depend on his company's situation. 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, too. because women are not going to be able to really 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. jason: you also talked about the settlement from jp morgan that a man made of that very issue. over that very issue of essentially being denied the role of caregiver because his wife was not incapacitated. >> right. jp morgan has about 16 weeks of paid leave that is
gender-neutral. they give it to the primary caregiver. and the secondary caregiver gets much less. so he applied for the primary caregiver, 16 weeks, and they is the, your wife primary caregiver and so he sued. they settled. that still assumes that in a two parent household, one is primary. and it is going to be difficult i think for people to work through that and not assume that the woman is the primary caregiver. taylor: coming up comcast , invests in the future of gaming and delivery on sunday, . plus, delivery on sunday, what the future may hold for ups. this is "bloomberg businessweek." ♪
taylor: welcome back to "bloomberg businessweek." i am taylor riggs. still ahead, uber drones may soon make fast food even faster this summer. and speaking of summer, holly peterson on her new novel. is alsothe hamptons" coming up. first up, comcast's youth movement. in the featured section we talked to the prince of the $160 billion comcast empire.
he is the son of ceo brian roberts and is leading the cable giant into the gen-z world of e-sports. palmerireporter chris in l.a. chris: he is the 29 year old the 29-year-old 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 just at this dynasty that is run as the world's largest cable company but also about , this new emerging business, one of the hottest ones in entertainment, e-sports. if you are not familiar with that, this is people watching other people play video games. tucker roberts grew up in this milieu and grew up with video games and had a different view i think than a lot of older media executives. he was tapped to invest in the business on behalf of comcast.
what we are seeing is a lot of traditional media and sports companies diving into the e-sports business. because everyone is realizing that viewing habits of traditional media is changing. people want to be able to watch things anytime they want. when they want to watch online. and in sports, demographics are changing. for example, football. a lot of parents have trouble with football. at the same time, they have less trouble with the violence of video games if you look at the rise of games like "fortnite." taylor: you use tucker roberts as a lens to which you are showing an old media company, comcast, really 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 andgher growth niche trying to capture some of that
streaming audience via e-sports. chris: absolutely. it is kind of funny because the videogame industry, which has a history of not being welcoming not always being as welcoming to women, you look at these ads pitches for the advertising they are trying to get on these new streaming platforms and they are even in traditional media as they so the e-sports competitions, they are saying look, we have this great male demographic that loves young people that are not watching traditional tv and playing video games and this is the way to , reach them. so yes, this is all about reaching the consumer who may not be watching monday night football. taylor: can e-sports sustain the hype going forward? chris: that is always the question. a lot of money flowing in. they just did the first $100 million deal in the sports. - e-sports. will "overwatch" last as long as the nfl? part of tucker's strategy is to try to acquire as many games as
- different games as he can. sort of spread the risk around. taylor: another company thinking about the future is ups as online retailers and competition grows. the company is going through continuous transformation . that's according to ceo david abney. david: we constantly review the needs of our customers. what we were hearing recently just recently was not only that our saturday ground our competitors provide as we do, but that we deliver to - the fact that we deliver to businesses on saturday where they don't, and we pick up packages on saturday that can be actually be delivered on monday in over 170 countries in the world. by picking up on saturday, we can deliver on monday. that has been our key. we are starting to hear more about the need for sunday delivery. taylor: but you are not ready to do it?
david: we are looking at it now. in our most recent contract, we have language that covers us for saturday and sunday. so we are pretty far down the path and we will talk about it. we have more to review. jason: strategically, how much do you worry about amazon? are they a frienenemy, a enemy, an competitor? all of the above? david: this world has gotten way more complicated than having somebody labeled as a competitor or customer. it is often times a combination of both. you have to accept that we have the key is that we have mutually beneficial relationships. as long as we do, that is the path we are following. so i would not say that we worry about amazon. we respect them just like we respect others that may be our competitors in certain parts of our business. but if we do our job and implement our transformation in
and carry out our strategies, then we feel very comfortable in our position. carol: talk to us about that transformation plan. i have been at the port in louisville and it's fascinating , just logistically would you been doing. it's about getting packages from point a to point b, but you are working with the health care sector and other sectors. give us an idea of as you transform the company, how much becomes transformations versus more of those transformations versus what you are doing today? david: i will. we are 112 years old, so we have probably been through five major transformations in the history of our company. this is one of those. the message we are giving to our people is that this is continuous transformation. there is not a beginning. there is not an end. the way the business world is changing, this is a way of life. and we really believe our people have accepted that we have focused in three particular areas. first of which is high-quality revenue growth. the second is increasing our efficiency using a lot of 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 drone maker comes down to earth. plus, book talk is hot in the hamptons. this is "bloomberg businessweek." ♪
taylor: welcome back to "bloomberg businessweek." i am taylor riggs. join us for "bloomberg businessweek" every day on the radio from 2:00 p.m. to 5:00 p.m. wall street time. you can also catch up by listening to our podcast on itunes, soundcloud, and bloomberg.com. find us online at bloombergbusinessweek.com and on
our mobile app. turning to technology, businessweek got the first look look at a drone maker dji's new down-to-earth new creation. jeff: dji, which people 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, from what i understand part , battle bot. jeff: that's right. with the quad copter drone, the phantom, generally you are buying it ready to roll out of the box. this thing is significantly assembly required. jason: what are they going after? it is not just of the diy market necessarily, but i feel like this is the postmodern version of like building a little model airplane or something like that, but it is bigger than that. jeff: very much so. build your own remote control car kind of element to this. but the main objective they
i think i would say, aside from attracting attention to other products, is to circle up with the robo masters competition they hold every year in shenzhen. it is a three-week tournament where they are trying to identify up and coming robotics talent. carol: i think you need a drum roll there. this is a big deal! jeff: certainly in china, japan, and increasingly the u.s. it draws college students from all over. carol: tell us about it. who is there? how many people? the whole idea is they are just battling off against each other? jeff: generally drying up teams typically of college aged students spending the time to put things together and tweaking them as needed to try to face-off and come out on top. carol: you also say there are robots that are medics. in the competition, there are robots that are supply mules, right? there is a whole hierarchy. jeff: that's right. as will be familiar to your therehat play "fornite,"
are pretty discrete roles they fall into on any given team to make sure the tactical assault are met carol: and there. met. carol: and there. is a reality show being filmed. there are so many moving parts to this. literally. jeff: naturally, they are also trying to identify the most talented roboticists and why not make a show out of that? jason: this is a real talent pool, in some ways. at a time when we talk about drones that will be employed by by uber eats. elsewhere in the magazine about drones that will be employed by by uber eats. uber elevate is the business. the scientists and science behind this needs people underneath it who can run these things. jeff: absolutely. the company would say that education is one of their biggest priorities as far as making sure the pipeline stays strong. as far as that goes they have , knocked out most other competitors of any significance as far as recreational and civilian drone making goes.
but they are sort of battling themselves because the margins are low. taylor: staying with drones, the first drone food delivery is on track for the summer. - this summer. kate: i got a chance to preview uber elevate, which is the part of uber that will take everybody up in the sky, as well as food delivery. i got to see a preliminary test. they had a drone, and they were working with mcdonald's. i watched big macs and chicken up in the air and , it was supposed to fly half a mile out of sight line, but the winds were not cooperating, so instead it did a little demo. it went up and down. a little like womp-womp. jason: from a foodies perspective food delivery has , taken on a totally different dimension in a lot of ways and now we are talking about taking it even further. what is it that has made it such? just convenience?
kate: it is convenience. let's say millennials. why get up from your sofa if you don't have to? exactly. unlike both of us. why get up from your sofa when you can command something to come right to you? you can customize it, it's amazing. one thing that uber elevate envisions which i think is awesome is that at some point -- they are working with mcdonald's, but they have signed on a high-end restaurant in san diego called juniper and ivy. day, carol and i can order pink peppercorn and there in brooklyn -- i live in manhattan -- i could have pink peppercorn delivered to my house without fighting the crowds or taking an hour to get there. jason: right or relying on a , driver or even a bicyclist to navigate his way through traffic . carol: how does this work? would you literally open up your front door? or is it drop spots? kate: it is not coming to your apartment building anytime soon.
but what they are going to do is have designated drop-off spots and then have couriers who will pick it up, be standing by ready to pick it up. the other thing they are working on, which i think is amazing, is they will put qr codes on roofs. then the drone will be programed to land on the roof. carol: but doesn't uber still have to get faa approval? kate: they feel pretty good about it. from what i understand, this guy who heads it up is very careful , a very careful person. and he is -- 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, restaurants, so on, and so forth what do you , think drone delivery food is going to do? how is it going to change the way we live and how we view takeout? kate: it is going to speed things up.
there is definitely going to be the thing where you want the fantastic visual of it. but when it comes down to it , what most people want from delivery is money and convenience. i think uber is going to absorb the cost, which is clearly a high cost, of drone delivery for a while as convenience becomes really key to it. they see that because they have built up a huge network of customers wanting convenience. taylor: coming up, art strikes a patriotic pose on the global stage. plus, holly peterson shares what it is like growing up in the 1%. this is "bloomberg businessweek." ♪
taylor: welcome back to "bloomberg businessweek." i am taylor riggs. you can also listen to us on the the radio on sirius xm channel in new york,on am in boston, in washington, d.c. , in the bay area, and in london on dab digital and on the bloomberg business app. turning to "pursuits," art at ," in the wake of nationalist pursuits around the world art at , this year's venice expo has seen a rise in patriotism. here is chris rouser. chris: right now, it is the venice biennale art show which happens every year. carol: what is that? i have no idea what this thing is. chris: it is a huge expo for international contemporary art. it has these pavilions, which are in this part, and a bunch of
different countries have a pavilion. they have artists come and represent the country. it is a lot of new art and new a showcase for 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. in the past few years, the past couple of years really, as nationalism has sort of risen around the world politically, we have seen the art in these national pavilions has also become sort of nationalist and patriotic. it has been interesting because that sort of patriotism has been divorced from that stage for a long time. jason: i was interested to know which i did not before that the u.s. pavilion, for instance, is owned by the guggenheim but also the state department? that was a twist. carol: that was a "wait, what"
moment. chris: curators run these are alsos, but they supported by the national government. it is a nation's statement about art at a given moment. 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 sort of defiant and gender fluid. the art is really progressive , and brazil is not in a progressive moment right now it . it is certainly not a hospitable place for lgbtq people. so to have this kind of artistic statement, it is kind of talking about what the artists wishes brazil stood for, and things brazil really does stand 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. right? chris: yeah. it got to be this thing where it used to be kind of patriotic and america would be like here is
our abstract expressionism. this is like the freedom and the release from boundaries you can express when you are in america. and then the russian for filling pavilion would be more about socialist realism. kind of like this is what the proletariat looks like. this is sort of that ideal. after world war ii, it did have this national stance. jason: jackson pollock, these were names that helped propel it some big names even further. onto the global scene. carol: thinking about how many cultures and citizens are suppressed for repressed in terms of being a former they can where they can be put in view. chris: and be in dialogue with other countries together in this one place. carol: so they really represent the political turmoil we are seeing. chris: 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 the world, it is kind of evolving as world politics evolve. and reflecting it in an interesting way.
taylor: with summer in full swing, it is time to head to the beach, party it up, and live the good life. in her new book, "it's hot in the hamptons," holly peterson writes about growing up in the - what it is like growing up in the 1% and how it shaped her life. holly: i believe we are in a world today of unbelievable inequality between the 99% and the 1%. and at 1% is even getting parsed out into .0001%. and not enough people really understand what goes on inside that world. i grew up inside that world. i also happen to be a hard-working journalist. i was at abc and newsweek my whole life. i feel honestly like it is my duty to expose these people and to tell people how it really goes and what goes on in this world. because people need to know how completely insane it is. carol: take us to the hamptons over the summer. in the book. we don't want to give it all away because we want people to figure it out and read it. tell us how you show those inequalities to some extent through your writing.
holly: you know i dated a local , guy in the hamptons for eight years. i wrote my last book called "it happens in the hamptons" about the 99% and 1% in a testosterone-fueled summer community. because you see the differences between income so much more so in the summer. there are more jets and more uber helicopters and seaplanes. 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 during the colder months. in the summer, you can drive around in a porsche. people do not really drive in new york so there is more. you arrive in a jet on the weekend. there is so much more ways to show your wares in the summer that i felt the hamptons is absolute prime material to kind of expose the ways of the wealthy, satirize them, and then hopefully in a deeper way have some commentary on what that says about our world today. think "it is hot
hamptons" is a light beach read, but i hate when they say that. i think it is actually a substantive look at our society. jason: you do get a sense of how 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 power, and all of that mixed together in new york. in many ways. how do you create these sort of archetypal characters? holly: i see them around me all the time. i grew up with a man who was an important wall street guy, a nd he was a self-made man named pete peterson. he died last year. he was an incredible person. he really taught me that a life well lived is a life where you are working incredibly hard. until the day you die on the one hand. on the other hand, it is a deep awareness of your privilege, of giving back, and an awareness of
other people. that is really who he was. i don't know if you knew him at all. i try to be a journalist who really tells stories as i see them. and i try to expose the things expose those things that i think are important to be exposed. one is inequality and the differences between us. and also 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. and a lot of ways. holly: you mean their bad values? jason: yeah. holly: i find -- having grown up with one and having been around them, i find incredibly successful people are incredibly insecure. almost as a rule. they are very very anxious. , how may times have you ever met a really cool, relaxed,
kind of normal ceo who is running a huge multinational conglomerate? you just don't see it. they are anxious by trade. right? and that anxiety and need to succeed is what makes them head of everything. i mean in order to have that , drive where you are going to work 18 hours a day until you are 92 and 65 days as my father did 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. about how you look. you are so anxious about how you look and appear and never, never is enough. that is when people behave badly. taylor: you can hear that full conversation on our bloomberg business extra podcast. find it and our daily podcast at itunes, soundcloud,
emily: i'm emily chang and this is "the best of bloomberg technology," where we bring you all our top interviews from this week in tech. coming up, apple's top supplier is coming up with a contingency plan to move out of china if the fallout from the trade war continues. will other tech firms follow? plus, crowdstrike makes its public debut and shares soar 70% on the first day of trading. , we hear from the cybersecurity firm's ceo. d congress' probe into big tech
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