Jan 24, 2019

Axios AM

☕ Good Thursday morning. It's Day 34 of the government shutdown.

Renault Chairman and CEO Carlos Ghosn resigned last night as he fights financial misconduct charges in Japan: A celebrated career atop the French carmaker ends in a Tokyo jail. (Bloomberg)

1 big thing: Monetizing climate change

Illustration: Aïda Amer/Axios

The storylines dominating climate change news are usually doom and gloom, but corporate America sees some new ways to integrate a warmer world into its business models, Axios' Amy Harder writes.

  • That conclusion was gleaned from disclosures from more than 7,000 companies worldwide (1,800 in the U.S.) that were collected by CDP, a London-based nonprofit that asks companies to report their environmental impact.

"Many of those that filed reports with CDP said they believe climate change can bolster demand for their products," Bloomberg's Christopher Flavelle reports:

  • "[M]ore people will get sick. 'As the climate changes, there will be expanded markets for products for tropical and weather related diseases including waterborne illness,' wrote Merck & Co."
  • "More disasters will make iPhones even more vital to people’s lives, Apple predicted."

Axios health care editor Sam Baker rummaged through the reports and found that climate change could be big business for pharma:

  • AbbVie: "Climate change may create a greater need for existing or even new products … higher temperatures and drought conditions are becoming extreme … Our immunology product line could see an increase in sales as a result."
  • Eli Lilly: "These risks may drive an increased demand for ... our diabetes products."
  • Pfizer: "There could be an increased demand for products related to diseases impacted by climate change."

These financial benefits are, of course, anomalies — most impact will be dire. Axios' Ben Geman points out that companies like Coca-Cola, which worries about water shortages, have long realized the risks to their operations.

  • And a number of companies — including tech giants Apple, Google and Facebook — for years have been increasing clean energy procurement and making emissions-cutting plans and goals.

Why it matters, from Axios science editor Andrew Freedman: Polling indicates Americans are already recognizing the impacts of global warming in their own backyards, and the CDP disclosures make me think about what might happen once we start to factor climate change into our spending decisions.

  • Intel is worried about water availability for chip production, while reinsurance giants have long worried that extreme weather events from climate change could threaten their bottom line. 

What Amy is watching ... The companies' reports show expected climate-change expenses that could become so big and detrimental that they provoke a real sea change in corporate America: More companies turning to governments, and lobbying for policies reducing greenhouse gas emissions.

Share this story.

2. "I prefer to knife people from the front"

Vanity Fair's Hive last night posted one of the juiciest dishes in the sumptuous buffet that is "Team of Vipers" — the memoir by former White House aide Cliff Sims, which is out Tuesday but is already the subject of much West Wing gossip.

  • Sims writes about a day in May 2017, when "Morning Joe" accused White House counselor Kellyanne Conway of being disloyal to President Trump.

Sims was called to her upstairs West Wing office to discuss a response:

I assumed this was because she feared Trump would believe the charges ... I had not brought my work laptop upstairs with me when she called, so Kellyanne pointed over to her personal MacBook sitting on the conference table on the other side of the room. “Just use that and type something up for me,” she said.
I sat down and started slowly pecking out a statement. ... I was also getting distracted by the nonstop stream of iMessages popping up on the screen. At that point, personal phones had not yet been banned in the West Wing, so Kellyanne was sitting at her desk texting away. And since her iMes­sage account was tied to both her phone and her laptop, ... I could inadvertently see every conversation she was having.
Over the course of 20 minutes or so, she was having simultaneous conversations with no fewer than a half­-dozen reporters, most of them from outlets the White House frequently trashed for publishing “fake news.”
Jour­nalists from The New York Times, The Washington Post, CNN, Politico, and Bloomberg were all popping up on the screen. ... As I sat there trying to type, she bashed Jared Kushner, Reince Priebus, Steve Bannon, and Sean Spicer, all by name.
("The real leakers, past and present, get much more positive press than I do. While it’s rare, I prefer to knife people from the front, so they see it coming," Conway said in a statement shortly after publication.) ...
She also recounted private conversations she’d had with the president, during which, at least in her telling, she’d convinced him to see things her way, which she said was a challenge when you’re deal­ing with someone so unpredictable and unrestrained. She wasn’t totally trashing the president, ... but she definitely wasn’t painting him in the most favorable light. She was talking about him like a child she had to set straight. ...
I was supposed to be writing a statement, defending her against accusations that she had done almost exactly what I was watch­ing her do that very moment.

Update ... Vanity Fair reported that Conway's statement was drafted in consultation with her husband, George Conway. But he tweeted: "I never saw this statement, let alone helped draft it."

3. Never mind
Yesterday's icy letters between Speaker Pelosi and President Trump

At 11:12 p.m., President Trump conceded to Speaker Pelosi's refusal to host the State of the Union in the House chamber as scheduled on Tuesday, tweeting:

  • "This is her prerogative - I will do the Address when the Shutdown is over."
  • "I am not looking for an.... alternative venue for the SOTU Address because there is no venue that can compete with the history, tradition and importance of the House Chamber."
  • "I look forward to giving a 'great' State of the Union Address in the near future!"

🖊️ Trump had said in a letter to Pelosi earlier in the day: "It would be so very sad for our Country if the State of the Union were not delivered on time, on schedule, and very importantly, on location!"

  • Pelosi replied: "I am writing to inform you that the House of Representatives will not consider a concurrent resolution authorizing the President's State of the Union address in the House Chamber until government has opened."
4. Air unions: Safety risk "unprecedented"
Courtesy Bloomberg Businessweek

Three aviation unions — the National Air Traffic Controllers Association, the Air Line Pilots Association and the Association of Flight Attendants-CWA — warned that "the entire system" could "break" because of the shutdown, writes Axios' Zach Basu.

  • White House Council of Economic Advisers Chairman Kevin Hassett said, when asked by CNN's Poppy Harlow if the U.S. could wind up with zero GDP growth this quarter: "We could, yes."
  • 🚨 AP-NORC poll: 6 in 10 Americans blame Trump for shutdown ... 34% job approval, down from 42% a month earlier.
5. 1,000+ media jobs lost in one day

The media industry's current round of cuts and consolidation is accelerating. Sizable layoffs at BuzzFeed, Gannett and Verizon Media were announced Wednesday, totaling over 1,000 jobs cut, writes Axios' Sara Fischer.

  • BuzzFeed will cut roughly 250 jobs, or roughly 15% of its workforce, including jobs within its news division.
  • Gannett cut over 20 jobs Wednesday, per Poynter, with more expected as the company tries to shed costs amid buyout talks.
  • Verizon Media will cut roughly 800 jobs, or 7% of its global workforce across the organization, as well as certain brands and products.

Why it matters: If the headlines signal anything, it's that the news media will continue to struggle to find a sustainable business model in an advertising and attention ecosystem dominated by tech companies like Google, Facebook and Netflix.

6. First look: CEOs warn U.S. complacency is hurting innovation
Courtesy Business Roundtable

The Business Roundtable, made up of CEOs of the nation's top companies, warns in a national innovation agenda out later today that the U.S. focus on R&D is lagging, and other countries are gaining ground.

  • "China has its 'Made in China 2025' plan, and earlier this month, became the first country to land a probe on the far side of the moon," says the report, "Innovation Nation: An American Innovation Agenda for 2020."
  • "Meanwhile, dysfunction in Washington abounds — from shutdowns to the inability to work together to solve America’s big challenges."

The report says the U.S. government "has grown complacent — resting on legacy achievements while underinvesting in the drivers and enablers needed to build on these achievements in the future."

  • "Tight budgets, policy challenges and competing priorities have caused political leaders to avoid or postpone critical investments in human capital and R&D."

The bottom line: "The United States cannot remain a global leader in innovation unless its policy and regulatory infrastructure is responsive."

7. 2020 = year of diveristy
Sen. Kamala Harris speaks to Mara Peoples and Amos Jackson III of the Howard University Student Association on Monday. Photo: Al Drago/Getty Images

"The early days of the Democratic primary campaign are highlighting the party's diversity," AP's Juana Summers, Elana Schor and Julie Pace point out:

  • "Of the more than half dozen Democrats who have either moved toward a campaign or declared their candidacy, four are women: Sens. Kirsten Gillibrand of New York, Kamala Harris of California and Elizabeth Warren of Massachusetts and Rep. Tulsi Gabbard of Hawaii."
  • "Harris is also African-American. Former Obama Cabinet member Julian Castro, who is Latino, has also joined the race."

Pete Buttigieg, 37 — the mayor of South Bend, Ind., who jumped in yesterday — would be the first openly gay presidential nominee of a major party.

  • If he won, he'd be the youngest president.
8. Boeing’s pilotless vehicle flies for first time
Photo: Boeing

Imagine a helicopter and a small prop plane had a baby: That's what Boeing's autonomous "passenger air vehicle" looks like, Axios AI reporter Kaveh Waddell writes.

  • A protoype flew for the first time Tuesday in Manassas, Va.
  • It's electric and can fly on its own for 50 miles, with vertical takeoff and landing, Boeing says.
  • Several companies, including Uber, are working on autonomous flying for short in-city hops.

Watch on YouTube.

9. Ebola spike in the DRC
Expand chart
Data: DRC Ministry of Health; Chart: Andrew Witherspoon and Harry Stevens/Axios

The Ebola outbreak simmering in the Democratic Republic of the Congo (DRC) is worsening in some ways, despite major successes in combating the illness in some parts of the country, writes Axios science editor Andrew Freedman.

Why it matters: The ongoing outbreak is the second-worst on record worldwide. A top official with the World Health Organization — which along with several nongovernmental organizations has been at the vanguard of the Ebola fight — said last week that it will likely continue for another six months.

10. 1 fun thing

Photos: Charles Sykes/Invision/AP; Jason LaVeris/FilmMagic via Getty Images

"The son of James Gandolfini has been cast as the young Tony Soprano in the planned 'Sopranos' prequel, 'The Many Saints of Newark,'" per the AP.

  • "Michael Gandolfini will play a younger version of the iconic character his late father played on the HBO series."
  • The 19-year-old "said in a statement it’s 'a profound honor to continue my dad’s legacy.' James Gandolfini died of a heart attack at the age of 51 in 2013."