Monday, March 4, 2019



Stories you may have missed from the world of business - The Boston Globe

Posted: 03 Mar 2019 05:43 PM PST


Cheap prices will be the latest casualty of the trucker shortage

America's trucker shortage is about to hit consumers where it hurts: in the kitty litter. McDonald's longtime distributor, Martin-Brower Co., is raising delivery fees, imperiling low menu prices. And Procter & Gamble, Church & Dwight, and Hasbro are sounding the alarm that higher freight fees could be passed on to consumers of everything from Crest toothpaste to Arm & Hammer cat litter. ''Millennials, they don't want to drive trucks,'' said Darren Tristano, CEO of the consultancy Foodservice Results. The nation simply doesn't have enough truck drivers to deliver everything its people buy. That's not new, but many retailers are just now feeling the pain as annual shipping contracts are renewed. And it has Michael Norwich counting every dime as he contemplates the $4.99 combo meal whose price is dictated at Jack in the Box headquarters. ''Distribution costs are huge,'' said Norwich, who owns 14 of the fast-food restaurants in Texas and New Mexico. ''I'm scratching my head trying to figure out how $4.99 is going to work.'' The driver shortage is going to get worse, said Lee Klaskow, a Bloomberg Intelligence analyst. Pay bumps for drivers haven't moved the needle much. Self-driving trucks are still far off. And even if the minimum age for long-haul drivers is lowered to 18 from 21, it wouldn't help much. Insurance for young drivers would be sky-high. The industry is also trying to recruit more women, currently a small fraction of the workforce. — BLOOMBERG NEWS


Trump says dollar too strong in renewed criticism of Powell

President Trump says the US dollar is too strong and took a swipe at Federal Reserve chairman Jerome Powell — someone who "likes raising interest rates." The dollar was quoted lower against the euro and the yen in early Asia-Pacific trading on Monday after Trump's comments. The US economy is doing well despite the central bank, Trump said Saturday during a wide-ranging speech at the Conservative Political Action Conference in National Harbor, Md. "I want a strong dollar but I want a dollar that does great for our country, not a dollar that's so strong that it makes it prohibitive for us to do business with other nations and take their business," Trump said. He didn't mention Powell by name, but referenced "a gentleman that likes raising interest rates in the Fed, we have a gentleman that loves quantitative tightening in the Fed, we have a gentleman that likes a very strong dollar in the Fed." Trump said the United States "is booming like never before," while other countries are "doing very poorly, and that makes it even harder for us to be successful." Fed officials kept their target range for the federal funds rate on hold, at 2.25 percent to 2.5 percent, when they met in late January. They meet again March 19-20. — BLOOMBERG NEWS


Huawei CFO suing Canada, its border agency, and the RCMP

An executive of the Chinese tech giant Huawei is suing the Canadian government, its border agency, and the national police force, saying they detained, searched, and interrogated her before telling her she was under arrest. Lawyers for Meng Wanzhou said Sunday that they filed a notice of civil claim in the British Columbia Supreme Court. Canada arrested the daughter of Huawei's founder at the request of the United States on Dec. 1 at Vancouver's airport. Meng is wanted on fraud charges that allege she misled banks about the company's business dealings in Iran. The suit says that instead of immediately arresting Meng, the authorities interrogated her ''under the guise of a routine customs'' examination and used the opportunity to ''compel her to provide evidence and information.'' The suit alleges agents seized her electronic devices, obtained passwords, and unlawfully viewed the contents and intentionally failed to advise her of the true reasons for her detention. The suit said only after three hours was she told she was under arrest and had the right to counsel. Meng is out on bail in Vancouver, awaiting extradition proceedings. Her arrest set off a diplomatic furor. Beijing has accused Washington of a politically motivated attempt to hurt a potential competitor to US technology vendors. China detained former Canadian diplomat Michael Kovrig and Canadian entrepreneur Michael Spavor on Dec. 10 in an apparent attempt to pressure Canada to release Meng. — ASSOCIATED PRESS


US-built capsule with a dummy aboard docks at space station


A sleek new American-built capsule with just a test dummy aboard docked smoothly with the International Space Station on Sunday, bringing the United States a big step closer to getting back in the business of launching astronauts. The bullet-shaped Dragon capsule, developed by Elon Musk's SpaceX company under contract to NASA, closed in on the orbiting station nearly 260 miles above the Pacific Ocean and, flying autonomously, linked up on its own, without the help of the robotic arm that's normally used. The three US, Canadian, and Russian crew members aboard the space station watched the rendezvous via TV cameras. It was the first time in eight years a US-made spacecraft capable of carrying humans had flown to the space station. If the six-day test flight goes well, a Dragon capsule could take two NASA astronauts to the outpost this summer. Since NASA retired the space shuttle in 2011, the United States has been hitching rides to and from the space station aboard Russian Soyuz spacecraft. In the meantime, NASA is paying SpaceX and Boeing to build and operate America's next generation of rocket ships. SpaceX already has made 16 trips to the space station using cargo Dragons. The version designed for humans is slightly bigger and safer. — ASSOCIATED PRESS

This black church hosted a cannabis summit to address business opportunities in legal marijuana industry -

Posted: 03 Mar 2019 02:34 AM PST

By Natelegé Whaley

There is an urgent need for black Americans to inform themselves of the business opportunities surrounding cannabis, senior pastor Anthony Trufant of the Emmanuel Baptist Church told the attendees at the Business of Cannabis summit held in Brooklyn, New York, last week.

The summit attracted almost 1,000 attendees, who heard from industry leaders in the medical, business and social justice sectors working on cannabis.

Black communities in New York have been convening on how the business and politics of the cannabis industry will impact them, as Gov. Andrew Cuomo pushes to legalize recreational marijuana for adults over the age of 21 by the end of 2019. Last year, Cannaclusive, an organization advocating for diversity and inclusion in the marijuana industry, held events in New York City to educate others about cannabis use and investment opportunities.

"It is a matter of economic justice," Trufant said at the Emmanuel Baptist Church summit Feb. 23. "There are opportunities for investment, for employment and for microbusiness. Last but not least, it is a matter of political justice."

In New York City, a 2018 New York Times report found that black people were arrested eight times more than white non-Hispanic people for low-level possession in the past three years. Trufant and other speakers stressed the need for the records of those with nonviolent marijuana offenses to be expunged. Panelists encouraged attendees to call their local politicians to express their concern.

"This war on drugs has far too long been a war on people of color and a war on poor Americans and that's mostly impacted my brothers, sons, fathers, and my friends," N.Y. Attorney General Letitia James said.

The event consisted of panel discussions about how to acquire a cultivation or dispensary license, the medical benefits of cannabis, and social justice and policy reform. On the medical benefits panel, black doctors and medical practitioners dispelled the myth that marijuana is a "gateway drug" and explained how it can directly benefit black patients.

"We recognize that in a time when there are soaring health care prices, that cannabis is really a matter of protection for people who are suffering from cancer and other ailments," Trufant said.

Kebra Smith-Bolden, a registered nurse and founder of CannaHealth, a medical marijuana clinic in New Haven, Connecticut, said the No. 1 issue people of color raise when visiting the center is post-traumatic stress disorder. It's an issue usually associated with veterans, but African-Americans living in urban areas are also at high risk for PTSD.

"People who grew up in the 'hood, people who saw violence in their lives, they are literally checking off every box [for PTSD symptoms]," Smith-Bolden said. "People who assume that people are just getting high; they are actually trying to medicate themselves. But they need to learn how to do it properly."

The event was held in partnership with Women Grow, an organization cultivating women's leadership in the marijuana industry. Gia Morón, executive vice president of Women's Grow, said the day was monumental as it brought together many black torchbearers in the cannabis space, such as Jesce Horton, who runs Panacea Valley Gardens, one of the first black-owned cultivation businesses, and Dr. Chanda Macias, the first woman of color to open a cannabis dispensary on the East Coast. Morón hopes the summit inspired more people of color to come on board.

"I hope that today some minds were shifted," she said. "I hope today, some questions were answered and I also hope that we have invited more people to join us in this industry, because I would love to be less the minority and I'd love to become the majority."

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Manafort family business defends name as infamous cousin sits in jail -

Posted: 03 Mar 2019 07:16 AM PST

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By Associated Press

PROVIDENCE, R.I. — What do you do if you share a name with one of the most infamous figures to emerge from the special counsel's investigation into Russia?

Paul Manafort's daughter decided to change her name . Leaders of New Britain, Connecticut, considered renaming Paul Manafort Drive, a street named after his father.

At Manafort Brothers Inc., a family-owned New England construction firm, they are defending the Manafort name and legacy while distancing themselves from their cousin, Trump's former campaign chairman who was recently blasted by prosecutors for years of lies and lawbreaking.

The Manafort name has been a familiar one in New England politics and business for decades, creating a predicament for the family as the 69-year-old former attorney is scheduled to be sentenced Thursday.

Manafort Brothers is one of New England's best known construction companies. Its name pops up alongside highways, at hotel construction sites and on heavy equipment used to dig holes or tear down buildings. After 9/11, Manafort Brothers helped remove what was left of the World Trade Center buildings.

A recent press release touting Manafort Brothers' 100th anniversary boasts that the company "is still led by the strong moral and business ethics of the Manafort family," a line that raises eyebrows among some who have followed the family history.

The company says Paul Manafort's criminal issues have nothing to do with the firm and that business has not been affected by the prosecution. Paul Manafort has never worked at the company and has no ownership in it, according to President Jim Manafort Jr.

"I could almost count on one hand how many times somebody has asked me what the relationship is," he said.

Manafort was convicted of tax and bank fraud charges in Virginia, where he'll be sentenced Thursday. He's set to be sentenced again March 13 in Washington after pleading guilty to illegally lobbying on behalf of Ukrainian political interests.

In a sentencing memo in the Washington case, prosecutors accused Manafort of brazen violations of the law, including witness tampering and perjury even after being indicted. Manafort, 69, asked for leniency but faces decades in prison.

Paul's grandfather, James, founded the construction business as a demolition firm — New Britain House Wrecking Company — after coming to the U.S. from Italy in the early 1900s. The family says its original name in Italy was Manaforte, which translates to strong hand.

Paul Manafort's father, Paul Sr., later took over the company with three of his brothers.

Paul Sr. was a Republican mayor of the old mill town of New Britain in the 1960s and 1970s, then appointed to jobs in state and federal government. Articles from the New Britain Herald and The Hartford Courant between the 1960s and 1980s detail a complicated legacy for Paul Sr., who was linked to numerous scandals, some involving the family business. After his name emerged in the investigation of a job-fixing scheme, he acknowledged to the Courant that he had a colorful political career.

"I'm good copy," Paul Sr. told the paper in 1980, the same year his son founded the Washington lobbying firm Black, Manafort and Stone.

Paul Sr. was eventually charged with two counts of perjury, which he denied and which were ultimately dropped. He died in 2013.

These days, Manafort Brothers employs 700 people, Jim Manafort said. It is based in Plainville, Connecticut, with offices in Massachusetts and Rhode Island.

When a fight emerged last year in New Britain over an effort to rename Paul Manafort Drive, eight Manaforts wrote a letter on Manafort Brothers letterhead opposing the change.

They called Paul Sr. a family patriarch and said he had helped build the company and its "sterling reputation." They distanced Paul Jr.'s actions from the legacy of his father, calling them "wholly unrelated."

The Republican mayor, Erin Stewart, ultimately vetoed a resolution by the Common Council to change the street name to Ebenezer D.C. Bassett Way, after the first African-American to graduate from what is now Central Connecticut State University.

The company has had some more recent trouble with the law. In 2014, it agreed to pay a $2.4 million fine and implement internal reforms to settle federal criminal and civil investigations into allegations that it lied about using a minority subcontractor on a $40 million highway project in Connecticut. Jim Manafort said the company doesn't believe it intentionally did anything wrong.

"There were some policies that were questionable. In the end, we had to settle it because it didn't make sense to keep arguing over it," he said.

He highlighted the family's good works through a foundation that distributes more than $100,000 annually to the community, and said they are proud of the name and their accomplishments.

Pat Karwoski, 77, a New Britain native and retired nurse who fought to change the street name, said when she sees the Manafort Brothers name, it embarrasses her. She said it seems to her that some family members have done good philanthropic work, but its assertion that it's known for morals and ethics is not true.

"They may all be good people, but they cannot deny what their history is," she said.

Customers appeared unfazed by the connection. The developers of a hotel in downtown Providence where Manafort Brothers recently worked as a subcontractor said they were happy with their work.

"As long as their price came in good and they give you quality," said developer Joe Paolino, a former Democratic mayor of Providence and ambassador to Malta under President Bill Clinton. "That's what I care about in business."

Manafort's daughter, Jessica, wants nothing to do with the family name. A Hollywood director, she changed her name to Jess Bond last year, telling the New York Post she sought the change "to separate myself and my work from a public perception that has nothing to do with the person that I am."

The credits for her most recent project, a romantic thriller called "Rosy," make no mention of the name Manafort.

Trump complains ‘my generals don’t understand business’: report | TheHill - The Hill

Posted: 03 Mar 2019 01:15 PM PST

President TrumpDonald John TrumpLawmakers discussed possible pardon talks with Cohen: report 5 takeaways as Republicans close ranks at CPAC Donald Trump puts past presidents to shame with North Korea policies MORE is concerned that his generals and intelligence agencies don't consider business and economics in their intelligence analyses, The New York Times reported Sunday.

"My generals don't understand business," Trump reportedly complained after national security briefings, a former administration official told the Times.


Trump has reportedly requested that trade and economics be the focus of presentations from security officials, forcing some officials to think about the economic angles of international conflicts.

"President Trump's economic focus has been evident, including his emphasis on increasing NATO allies' burden sharing and pressing allies and partners to do more in support of our common interests," Garrett Marquis, a spokesman for the National Security Council, told the Times.

Trump has also reportedly spoken to intelligence and military briefers about costs of American bases overseas and the defense expenditures for allies, according to White House officials.

Although experts have not criticized the president's economic focus, some expressed concern to the Times that it might lead to other important international security issues being crowded out of discussions.

"If Trump tailors it to his needs, that is fine and his prerogative," Douglas Wise, a career CIA official and a former top deputy at the Defense Intelligence Agency, told the Times about daily briefings.

"However, if he suppresses intelligence through that tailoring, that is not helpful. He is no longer making informed decisions because he is making decisions based on information he could have had but didn't have."

Trump has publicly criticized top intelligence officials in the past, leading Sen. Angus KingAngus Stanley KingTrump applauded for walking away from 'bad' North Korea deal Feinstein: 'Anybody with a cell phone in their hand can get you on international news' Senate Dems seek to turn tables on GOP in climate change fight MORE (I-Maine) to warn that such criticism from the president could have consequences for intelligence briefings.

"The problem is the message sent to agencies: 'Don't tell me information I don't want to hear,' " King told the Times.

Amazon And Tesla Change Business Models - Forbes

Posted: 03 Mar 2019 05:28 AM PST

Amazon opens stores, as Tesla closes them—One of the two must be doing the wrong thing.

Amazon and Tesla had major announcements at the end of the week. Amazon announced that it is planning to open dozens of brick and mortar grocery stores. Tesla announced that it is planning to close its brick and mortar stores, and rely on online sales only.

Apparently, Amazon thinks that stores are an asset, while Tesla thinks that they are a liability.

One of the two must be wrong. Which one?

Tesla, according to Wall Street. Amazon's shares rallied 2%, while Tesla lost close to 8%, following the two separate announcements.

Amazon and Tesla are in totally different businesses. But they have a couple of things in common. They are popular on Main Street among tech savvy consumers. And they both have a strong following on Wall Street among the "momentum crowd," investors enchanted with the growth potential of young innovative companies.

Amazon's SalesKoyfin

Tesla's salesKoyfin

Amazon and Tesla Shares on Wall StreetKoyfin

That's why their shares on Wall Street are very sensitive to any news that will confirm or derail that momentum.

And the recent news about store openings and closings isn't an exception to this rule. Amazon's move to open brick and mortar stores, once shunned, reflects a new trend: the merging of on-line and off line retailing, as has been evidenced by recent reports by Walmart and Best Buy. The two companies have successfully managed to weather competition from Walmart by using physical stores as warehouses for expedient shipping or pick places for local shoppers.

Apparently, Amazon's strategy of store openings is a way of riding this trend, and continue its growth momentum. Thus, the cheer for its stock on Wall Street.

Tesla's strategy on closing stores goes against this trend taking, perhaps, a page or two from technology companies like Apple. Back in 2010, the company switched to all on-line sales in hot emerging markets like China.

The trouble is that automobiles are far more complicated and more expensive products than iPhones. Consumers usually want to test drive them before they buy them. Besides, car sales are subject to all kinds of rules and regulations in different states that may require the presence of physical stores.

In either case, the absence of physical stores may slow-down Tesla's momentum; and diminish the chances of its sales crossing the "Tipping Point," the threshold, when sales reach a cascade.

That could explain the dumping of the company's shares on Wall Street.

Still, only time will tell which company did the right thing.

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