Jun 27, 2019

The days of the conglomerate are dead

Photo: Hulton-Deutsch/Corbis/Getty

Hundreds of thousands or even millions of jobs will vanish as conglomerates are forced to kill their traditional business model for the new technological age and chaotic geopolitics, says the CEO of Europe's largest industrial company.

What's happening: Joe Kaeser, CEO of Siemens, the German industrial giant, tells Axios that a revolution in manufacturing ups the challenge to the world's biggest companies, forcing them to focus only on products or services in which they truly excel.

  • "Traditional conglomerates have no future. On average, they are average. And today, average means mediocracy, and that's the target of the 4th industrial revolution," Kaeser said.
  • Technologies such as 3D printing "mean you can deliver any item at the cost of mass production."

The big picture: The new geopolitics of nationalism and protectionism — the "I'm first" movement most loudly voiced by President Trump — are part of what's making conglomerates obsolete. Multi-nationals can no longer casually operate across dozens of countries under the assumption that everyone will accept such cosmopolitanism.

Instead, Siemens, for instance, has divided itself into three distinct divisions based on its perception of its strengths — industrial, health care and power and energy arms. And now it must localize production everywhere it sells, and establish political connections as well, Kaeser said.

  • It won't be possible to build complete facilities everywhere. Instead, today's multinationals will have to persuade as many countries as possible that it's okay to establish a digital "brain" in the U.S., for instance, that will digitally instruct advanced plants in individual countries what to manufacture and how.
  • "Yes you are everywhere. You are part of the local society regardless," Kaeser said. "It's the opposite to what we are used to — a global value chain, where different countries get specialized with different parts."

Go deeper

Trump accuses Twitter of interfering in 2020 election

President Trump speaks to the press as he departs the White House in Washington, D.C., on Thursday. Photo: Mandel Ngan/Getty Images

President Trump responded via tweets Tuesday evening to Twitter fact-checking him for the first time on his earlier unsubstantiated posts claiming mail-in ballots in November's election would be fraudulent.

What he's saying: "Twitter is now interfering in the 2020 Presidential Election.They are saying my statement on Mail-In Ballots, which will lead to massive corruption and fraud, is incorrect, based on fact-checking by Fake News CNN and the Amazon Washington Post," the president tweeted. "Twitter is completely stifling FREE SPEECH, and I, as President, will not allow it to happen!"

Coronavirus dashboard

Illustration: Aïda Amer/Axios

  1. Global: Total confirmed cases as of 8:30 p.m. ET: 5,584,091 — Total deaths: 349,894 — Total recoveries — 2,284,242Map.
  2. U.S.: Total confirmed cases as of 8:30 p.m. ET: 1,680,301 — Total deaths: 98,875 — Total recoveries: 384,902 — Total tested: 14,907,041Map.
  3. Federal response: DOJ investigates meatpacking industry over soaring beef pricesMike Pence's press secretary returns to work.
  4. Congress: House Republicans to sue Nancy Pelosi in effort to block proxy voting.
  5. Business: How the new workplace could leave parents behind.
  6. Tech: Twitter fact-checks Trump's tweets about mail-in voting for first timeGoogle to open offices July 6 for 10% of workers.
  7. Public health: CDC releases guidance on when you can be around others after contracting the coronavirus.
  8. What should I do? When you can be around others after contracting the coronavirus — Traveling, asthma, dishes, disinfectants and being contagiousMasks, lending books and self-isolatingExercise, laundry, what counts as soap — Pets, moving and personal healthAnswers about the virus from Axios expertsWhat to know about social distancingHow to minimize your risk.
  9. Other resources: CDC on how to avoid the virus, what to do if you get it, the right mask to wear.

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Updated 42 mins ago - Politics & Policy

Twitter fact-checks Trump's tweets for first time

President Trump briefs reporters in the Rose Garden on May 26. Photo: Brendan Smialowski/AFP via Getty Images

Twitter fact-checked two of President Trump's unsubstantiated tweets that mail-in ballots in the 2020 election would be fraudulent for the first time on Tuesday, directing users to "get the facts" through news stories that cover the topic.

Why it matters: Twitter and other social media platforms have faced criticism for not doing enough to combat misinformation, especially when its propagated by the president.