Life

Morning Brew: Volkswagen Dumped Their CEO And An Interview With The VP of Dom Perignon Champagne

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“That female must be attractive, otherwise it is not much use.” — The Dalai Lama. Your eyes aren’t deceiving you, the Dalai Lama, a self-described feminist, actually said that when asked in a BBC interview whether his successor could be female. If you’re still doubting us, check out the video interview here, starting at the five minute mark (we promise we’re not rickrolling you).
MARKET SNAPSHOT 

Things Get Real

  • In a repeat of Tuesday’s nervy tempo, U.S. stocks dipped in the red, amidst lagging oil prices and poor Chinese manufacturing data.
  • The massive oil drop came late in the day after teasing investors with a morning rally, and was due to a gasoline supply jump, reigniting concerns that with the fall season upon us, fuel supplies will grow and demand will wane.
  • In currency markets, the Brazilian real hit an all-time low against the U.S. dollar. Commodity markets have crushed the developing nation’s currency—showing just how vulnerable emerging markets are to commodities prices. P.S. Check out yesterday’s Brew for more on this developing story.
  • The good news (yes, there’s actually good news): European stocks finished slightly higher after suffering their worst decline in over a month on Tuesday. The rally may have been due to a report showing Europe is still on par to maintain its 0.4 percent growth this quarter.
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WORLD MACRO 

China: Year of the Bear

Yet again, China’s tumbling economy churned out more negative data this week. The culprit this time: softer manufacturing output. The Chinese Purchasing Managers’ Index (PMI), a measure of manufacturing productivity, shrank well into “contraction” territory, and missed expectations to boot. The lower factory output stems from lagging global demand and continues to build upon the negative sentiment surrounding the fragile Chinese economy. To make matters worse, PMI results from the U.S. also indicated slow growth within manufacturing. Might as well get comfortable—this looks like it might last a while.

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CORPORATE PRIMER

Volkswagen Gets a Fresh Start—And a New CEO

Volkswagen has been at the center of the media spotlight recently (and not the good kind of spotlight) after the Environmental Protection Agency caught them evading emissions standards on a massive scale—we’re talking 11 million vehicles. The scandal is expected to cost the company billions of dollars, both in market value and expected lawsuits. In an effort to wipe its brand and reputation slate clean, CEO Martin Winterkorn resigned yesterday morning. Winterkorn believes that his resignation will win back the public’s trust, and hopefully their wallets. A new CEO is expected to be chosen by Friday.

The One Growing Industry in China

Yesterday, Boeing announced plans to fly against the wind. The airline will be setting up shop in China to produce and sell 300 planes (sticker price: $38 billion), right as herds of investors flock away from China. It’s is a step in the right direction for China’s growing air travel market, and for Boeing, too: analysts forecast Chinese plane demand to grow to $950 billion over the next 20 years. It’s a win-win—although some officials on Capitol Hill are none too pleased about Boeing shifting jobs overseas.

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TODAY IN TECH

Cisco Struggles in China

Make no mistake: today’s Brew has a very Chinese smell to it. We know times are rough in China—especially for foreign tech companies like Cisco. New government regulations and an unstable market have favored Chinese companies, causing Cisco’s China revenues to drop by 25 percent the past three years. In an effort to hold on to Chinese business, the comms giant is expected to announce a partnership with state-controlled Chinese server maker Inspur—and you can bet it will involve plenty of controversial transfers of intellectual property. This marks a huge shift from the company widely considered to have “built” the Chinese internet.

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OTHER STORIES
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ECONOMIC CALENDAR

  • Monday: Existing Home Sales
  • Tuesday: AutoZone/Carnival/General Mills Earnings
  • Wednesday: Manufacturing Index
  • Thursday: Durable Goods, New Home Sales, Weekly Jobless Claims, Janet Yellen Speech, Nike/Bed Bath Earnings
  • Friday: Consumer Confidence, 2Q GDP Revision #3

EXCLUSIVE INTERVIEW WITH TRENT FRASER

Mr. Trent Fraser is the Vice President of Don Perignon Champagne at LVMH Wine & Spirits. LVMH is one of the top wine and spirits companies in the world, owning 20 brands, including Moet & Chandon, Krug, Veuve Clicquot, Hennessy and Château d’Yquem. Fraser has 14 years of international wine industry experience, and he graduated from the University of South Australia (before you ask, yes, he’s Australian).

Why the champagne business?

It was somewhat serendipitous as I have been a wine and champagne geek, collector and advocate for the longest time. I’m incredibly lucky and humbled to work in the field that I love and am so passionate about.

How does Dom Perignon continue to stay on top?

Firstly, the product itself is the most critical component, as our Chef De Cave ensures only the greatest wines from the greatest vintages are declared and released. From a brand perspective, we try to balance the right mix of edge and positioning. We are always true to our DNA and codes but continue to push boundaries and take risks.

Favorite part of your job?

Of course the exposure to so many different vintages, but equally the amazing people I get to meet along the way.

How do you continue to innovate as a champagne company?

I think a good example is how we utilize our communication platform, as it’s built around the power of creation. As Dom Perignon was the original creator of champagne, we celebrate that and bring it to life through collaborations such as Andy Warhol, David Lynch and Jeff Koons.

How do you like your coffee?

Being Aussie, I take my coffee very seriously, and love my French press at home and iced coffee from Blue Bottle in New York.

What are some key traits that a person in your position must possess?

You definitely need a deep understanding of luxury. With that comes a need for strategic thinking, a great deal of planning and meticulous precision.

Best piece of advice for any young business professional starting their journey in the workforce?

Network hard, hustle always and be kind and honest.

INTERVIEW QUESTION OF THE DAY

A snail is at the bottom of a drainpipe that runs up the side of a house. The pipe is 10 feet long. Every day the snail climbs three feet but then falls one foot at night. How long does it take the snail to reach the top of the pipe? (Answer)

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BUSINESS TERM OF THE DAY

Maintenance Margin — The minimum amount of equity that must be maintained in a margin account.

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FOOD FOR THOUGHT

Five: the number of goals Robert Lewandowski, a striker for Bayern Munich, scored in Tuesday’s soccer match against Wolfsburg, breaking various records. He scored all five goals in the span of just nine minutes. Even Carli Lloyd is impressed.

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