ZTE, Italy, Tesla, Soho House, Facebook, Avengers: Infinity War
Marc Ross Daily
May 14, 2018
Curation and commentary from Marc A. Ross
Reporting from Alexandria, Virginia
Marc Ross Daily = Global Business News at the Intersection of Politics + Policy + Profits
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TOP FIVE
✔️ The New world order: Donald Trump goes it alone
✔️ Time for Europe to join the resistance
✔️ US business fears a rapid Trump trade deal with China
✔️ Italy’s populist parties set to pick prime minister
✔️ Tesla moves toward opening factory in Shanghai
ROSS RANT
What CEOs need to learn from Michael Cohen and AT&T
One of my all-time favorite political campaign books is The Selling of the President.
Written by Joe McGinnis, the book covers the story of how Richard Nixon was repackaged and reshaped for the American public as a candidate for president in 1968. Eight years after Nixon’s losing presidential campaign and his lackluster television performance at the Nixon-Kennedy debate, he faced all the old image problems.
Nixon hired then 28-year old Roger Ailes to remake his image. An image that would win at the ballot box, and more importantly, on television. Ailes created television moments that made Nixon, not smart, not knowledgeable, but well-liked. Ailes created television moments that engaged numerous constituents on their terms.
1968 was no time for policy, it was a time for charismatic personality and shared values.
McGinnis’ book makes clear, presidential candidates can be rebranded and remarketed. Television does not expose and demystify the powerful. Instead, it makes personality stronger. Television ensures style is substance.
David Miller, of the legendary political consultancy Sawyer Miller, saw how television and mass communications would change not only candidates but commerce. He wrote in an article for the Yale School of Organization and Management that just like candidates, if done correctly, corporations could use the tools of television and campaign management to ensure market size and good paying consumers.
Miller wrote: “Corporations must recognize that it is now in their long-term self-interest to develop much more democratic relationships with all of their shareholders, community members, and the public at large.”
Miller foresaw how the corporate world was quickly resembling a politician’s world and how a politician relates to constituents.
As information channels increase, multiply, focus on niches and distinct tastes and thoughts, corporations need to forge an emotional bond with their various constituents - just like a politician.
The only sensible and meaningful way to do is - establish a relationship and commercial transaction based on shared values.
Today’s masters of the universe CEO is poor decision away from disrupting a relationship based on shared values. Corporations can no longer control the flow of information and can lose control of the narrative within hours.
Corporations are under assault from government regulators, reporters, shareholders, and employees all demanding style that supersedes substance.
CEOs today need to woo their customers, engage regulators, listen to shareholders, reinforce employees, and make their case daily. CEOs need to communicate more often, on more platforms, and more broadly. Sawyer believed CEOs needed to define themselves before someone else set them - just like a candidate who works like they are up for reelection daily.
As all significant institutions continue to lose sway and influence, the pressure on corporations and CEOs to fill this void increases daily.
For AT&T it wasn’t the paying for access, advice, and public affairs expertise which was a bad idea, it was that they paid an individual (Michael Cohen) who was out of step and not in line with the shared values of AT&T’s numerous constituents.
AT&T CEO Randall Stephenson said as much in a memo distributed to employees last week.
“Our reputation has been damaged,” Stephenson wrote. “There is no other way to say it—AT&T hiring Michael Cohen as a political consultant was a big mistake.”
Companies need to sell worthwhile goods and services - this for sure will continue to matter. But the transaction now has an emotional connection as well.
As pointed out in Edelman's 2018 Trust Barometer: "A good reputation may get me to try a product—but unless I come to trust the company behind the product, I will soon stop buying it, regardless of its reputation.
63% of those surveyed agreed with this statement.
The Edelman Trust Barometer provided a clear directive for today’s CEOs - building trust is job one.
Winning commerce of the future will happen when a company is trusted, provides high-quality services and products, and where business decisions reflect shared values.
AT&T hiring Michael Cohen is losing commerce.
It is not essential to much to be smart and knowledgeable, but it is necessary to be well-liked.
GEOECONOMICS
The New world order: Donald Trump goes it alone: The decision to pull out of the Iran deal is the latest example of the administration’s aggressive unilateralism. FT - Gideon Rachman
Time for Europe to join the resistance: US President Donald Trump's decision to withdraw from the Iran nuclear deal marks the temporary suspension of the trans-Atlantic alliance. What now? Spiegel - Editorial
Trump extends lifeline to sanctioned tech company ZTE: WSJ reports, Trump said he was working with Chinese President Xi Jinping to keep ZTE Corp. in business, throwing an extraordinary lifeline to the Chinese telecommunication giant that has been laid low by US moves to cut off its suppliers. The surprise intervention comes less than a month after ZTE was hit with an order banning US companies from selling components to the Chinese business. The US Commerce Department directed companies to stop exporting to ZTE in mid-April, saying the Chinese firm violated the terms of a settlement resolving evasion of US sanctions against Iran and North Korea. Mr. Trump said in a tweet that he is working with Mr. Xi to get ZTE “a way to get back into business, fast. Too many jobs in China lost.” He said the Commerce Department has been instructed to “get it done!”
“I am speechless,” said Kevin Wolf, who oversaw the launch of the ZTE case as assistant secretary of commerce in the Obama administration. “I’m highly confident that a [US] president has never intervened in a law-enforcement matter like this before.”
@joshrogin: What did you get in return? Nothing? Nice deal making. Make China Great Again.
AP: China sends trade envoy to US, welcomes Trump ZTE comments
CGTN: Xi's special envoy Liu He to visit US May 15-19 for trade talks
WP: US penalties against Chinese telecom firm become bargaining chip in trade talks
Reuters: China's ZTE paid over $2.3 billion to U.S. exporters last year, ZTE source says
US business fears a rapid Trump trade deal with China: FT reports, American business leaders are increasingly concerned that Donald Trump may strike a rapid deal with Beijing on reducing the US trade deficit and fail to address long-running complaints over China’s caps on foreign ownership and weak intellectual property protection. The fears have surfaced as Liu He, Xi Jinping’s economic tsar, is expected in Washington for trade talks this week following the visit by an American delegation to Beijing this month. “China and the United States are working well together on trade, but past negotiations have been so one sided in favour of China, for so many years, that it is hard for them to make a deal that benefits both countries,” Mr Trump tweeted on Sunday. “But be cool, it will all work out!” “Having the two sides talking this soon after everyone was in Beijing, that is in itself a positive step,” said Erin Ennis, senior vice-president at the US-China Business Council. But “what is going to be key is getting to a point where they are actually talking about the issues.”
Be cool. Don't be all uncool.
What a way to manage the global economy........
From Make America Great Again to Be Cool With It.
Data protectionism: the growing menace to global business: FT reports, China’s digital protectionism is as great a threat as barriers it puts up for physical goods.
Foreign Affairs - Kevin Rudd: How Xi Jinping views the world: Much has been written on Chinese President Xi Jinping’s remarkable consolidation of political power since he took office five years ago. But an equally important question for the international community to consider is how Xi views the world—and what that means for how China will approach it. Because of the opacity of the Chinese political system, this is hard to answer with real certainty. But clear patterns are beginning to emerge. https://fam.ag/2GeFepl
NYT: What keeps Xi Jinping awake at night: As the leader of the world’s most populous country and biggest communist party, China’s president, Xi Jinping, has plenty to worry about, and a new book sheds light on what probably keeps him up at night. The recently released 272-page book of Mr. Xi’s remarks on “national security” includes previously unreleased comments that give a starker view of the president’s motivations than found in most Communist Party propaganda. https://nyti.ms/2KhElyI
Trump, Kim summit in Singapore presents logistical challenges for North Korea: Reuters reports, North Korean leader Kim Jong Un's trip to Singapore for talks with U.S. President Donald Trump poses logistical challenges that are likely to include using Soviet-era aircraft to carry him and his limousine, as well as dozens of security and other support staff.
Italy shakes Europe establishment as political upstarts form pact to govern: WSJ reports, the 5 Star Movement, an eclectic upstart group driven by scorn toward Italy’s ruling elites, on Sunday evening said it had agreed on the outlines of a governing program with the anti-immigration League party, clearing the way for a likely coalition government. The parties said they would slash and simplify taxes while boosting spending on pensions and antipoverty benefits. They were due to present their program on Monday to President Sergio Mattarella, who formally appoints the government.
FT: Italy’s populist parties set to pick prime minister
On the eve of the opening of the US Embassy in Jerusalem, Israel celebrates: LAT reports, Israelis and foreign visitors anticipate the opening of the U.S. Embassy on Monday in Jerusalem.
Reuters: Israeli forces kill 16 in Gaza protests as anger mounts over U.S. Embassy
Spy talk: MI5 chief Andrew Parker will warn of the continued threat of attacks on Britain from Islamic State and Russia in a rare speech in Berlin on Monday.
Reuters: 'Trust me on Brexit', UK PM May says as ministers squabble
Brexitseen threatening UK links in EU supply chain: Reuters reports, Mandy Ridyard knew Brexit was going to be a challenge for her aviation components firm, but it was still a shock when she heard a French company bluntly ruling out British suppliers from an international bid for a contract in China.
Europe’s antitrust cop, Margrethe Vestager, has Facebook and Google in her crosshairs https://wapo.st/2KWkCGg
BRIGADOON EVENTS
Brigadoon Annapolis | Salon Dinner + Lectures = Sep. 20-21, 2018
Brigadoon Detroit | Salon Dinner = Oct. 11, 2018
Brigadoon Cincinnati | Salon Dinner = Nov. 1, 2018
Brigadoon Scotland 2018 = Nov. 11-13, 2018
More info @ http://thebrigadoon.com
AMERICAN POLITICS
In wide-open 2020 presidential field, Democrats are road-testing messages — and trying to redefine their party https://wapo.st/2KVlI4V
"At stake in the rehearsals is nothing less than the future of the Democratic Party, which has yet to congeal around a positive vision. Party leaders privately talk about the next two years as a potential pivot point for what it means to be a Democrat, like the tumultuous 1968 Democratic convention or the business-friendly realignment that followed President Bill Clinton’s nomination in 1992."
Members of House Freedom Caucus face tough fights in fall elections: WSJ reports, many of the most vulnerable are running with less money in the bank and in districts where their deeply conservative voting records might not be welcome.
Trump keeps up pressure on automakers to generate US jobs: WSJ reports, whatever automakers want to do, one item tops President Donald Trump’s agenda for the industry: more jobs for Rust Belt states that helped elect him.
LAT: Auto executives got more than they bargained for in lobbying Trump to ease fuel standard
Cities recycle their Amazon pitches to attract new business: WSJ reports, many of the 20 cities shortlisted as sites for the retail giant’s second headquarters are using the multimedia presentations they created for Amazon’s application to pitch to other companies.
ENTERPRISE
Tesla moves toward opening factory in Shanghai.
Didi Chuxing to test driverless cars in California: FT reports, Chinese group looks to catch up with Silicon Valley rivals’ earlier start.
Food makers vow to cut trans fats globally: WSJ reports, the World Health Organization is pressing producers of trans fats to accelerate work to prevent hundreds of thousands of deaths from heart disease each year.
NYT - Editorial: The world doesn’t need trans fats: The World Health Organization is correct that all nations should eliminate the use of these harmful oils in food.
Facebook is creating its own cryptocurrency.
Apple is on the verge of becoming the first $1 trillion company.
TRENDS
Better, stronger, faster: How a 'bionic' vest is augmenting human abilities at Ford: CBC reports, Ford asked itself a question: if we can't yet give machines human-like intelligence, can we give humans machine-like stamina? The result is a trial of a 'bionic' vest that takes the strain off the arms of people on the assembly line who work for hours on cars passing overhead. http://bit.ly/2wKuQWS
FT Executive Education Rankings 2018https://on.ft.com/2L1ZrTc
"In a ranking notable for its volatility, Kenan-Flagler Business School in North Carolina is remarkably consistent. The school, which is up two places to 10th, has ranked within a six-place range since 2012. Apart from ranking 57th for follow-up, the school is well rated by its corporate clients. It is in the top 10 for six criteria, including value for money, where it came first. “I value our relationship with UNC because they value each one of us,” said a corporate client in the FT survey."
CULTURE
“Avengers: Infinity War” nearly broke a Chinese box office record and has racked up $1.6 billion in ticket sales worldwide.
Exclusive Soho House wants more members—lots of them: WSJ reports, the London-based private-club company wants to expand globally—and is considering a public stock offering to fund it. https://on.wsj.com/2IDsePu