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THE HEADLINES

 

ESTA BIEN

Trade talks with Mexico seem to be back on the right track after Donny Politics announced on Friday that the US would not place tariffs on goods imported from Mexico. As part of the deal, our continental brethren agreed to add approximately 6k troops to its own southern border in an attempt to curb illegal immigrants from Central America.

Mexican and US officials met early last week to work out a deal but the two reached an impasse as Mexico does not want to become the holding cell for Central American asylum seekers as they await US immigration hearings. Ultimately, the negotiating team decided to acquiesce and will roll out facilities to take immigrants that illegally crossed into the US.

But the deal works both ways. The US agreed to help Mexico by reaffirming its intention to provide economic development in Central America. Uncle Sam committed $5.8B to help develop Guatemala, Honduras, and El Salvador, as well as $4.8B to help strengthen security and fortify the economy of southern Mexico.

POTUS will check in with Mexico in 90 days to make sure it’s holding up its end of the bargain.

MURDERS & ACQUISITIONS

Mmm, I love the smell of commerce and death machines in the AM.

Raytheon and United Technologies will merge to form Raytheon Technologies Corp., the stuff of America’s enemies’ nightmares.

The all-stock deal will create a new company valued at more than $100B (after spinoffs), thus creating the second largest aerospace-and-defense company in the US, behind Boeing. Current UTC CEO Greg Hayes will serve as post-merger CEO, with Raytheon CEO Tom Kennedy acting as executive chairman for two years.

What are the terms?

Raytheon shareholders will receive 2.3348 shares of the new company for every share that they own. UTC will appoint 8 of the 15 new directors and its legacy shareholders will own 57% of the stock.

Spinoffs

The deal is not expected to raise any red flags for antitrust regulators since the two companies operate in different markets. UTC is most well known for its aviation engines and Raytheon is a maker of things that go boom. There will however be a pair of spinoffs prior to close …

Announced last year, UTC will spin off its Otis Elevator and Carrier building systems. This will allow the once mighty conglomerate to focus on the defense and aerospace industries. *Cue the eagles soaring*

he deal, which is expected to save $1B in annual costs, is expected to close in the first half of 2020.

 

AND FOR THAT REASON WE’RE OUT …

One month after a train wreck of a stock market debut, Uber CEO Dara Khosrowshahi decided to roll up his sleeves and get in the trenches, taking direct oversight of the company’s operations and eliminating the company’s COO position, held by Barney Harford.

In addition, Khosrowshahi plans to combine the firm’s marketing, comms, and policies teams into one group, sending CMO Rebecca Messina packing after just 9 months in the role.

The goal? Cut down on massive losses and jumpstart stagnant growth. After $1B in losses during Q1, Uber attempted to build on its future as a platform for transportation as a whole. Instead, investors focused on the firms $3.8B in losses, the most by any US startup in the 12 months prior to going public.

Yikes

Uber’s loss of a COO isn’t exactly surprising. The practice is more pervasive at tech firms than sexual harassment and kombucha on tap: 22.6% of tech companies in the Fortune 500 companies have a COO role, while just 32% of the 673 companies analyzed across all industries had someone in the COO position, the lowest in nearly two decades.

In fairness, one of Khosrowshahi’s first hires, was Harford, who had been accused of making “insensitive remarks,” so his departure is still in line with Khosrowshahi’s initial goal to de-Kalanick the brand.

Uber shares dropped 1% on the news.

 

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IN OTHER NEWS

• Employers are slowing their damn roll. On Friday the Labor Department reported less than stellar employment figures, adding just 75k jobs in May. The number is pretty paltry considering the economy averaged 164k jobs added per month through the first four months of 2019. Still, this marks the 104th straight month of gainz and the jobless rate remains at 3.6%.

 

• Huawei, you’re canceled. Just weeks after the US government placed Huawei on a trade blacklist, then subsequently granted the telecom/Chinese spy agency 90 days of clemency, Facebook brought down the hammer, telling the Chinese company that it could no longer preinstall FB apps on its phones. Of course, Huawei phone users can still download the FB app from the Google Play store, or, *gasp* go to the website. That is until Huawei’s 90-day reprieve runs out and Google pulls the plug on access its Android OS.

 

• Cuffing szn is officially over. FedEx has had about enough of its relationship with Amazon, telling Jeffrey Commerce and the e-comm giant to pack its sh*t and GTFO. FedEx won’t renew its air delivery contract with Amazon because the online marketplace has become too damn needy. Federal Express ain’t got time for quicker and cheaper deliveries. The number two courier in the US will bet on other growing e-commerce platforms that don’t have the same leverage at Bezos. And it’s probably safe to say that FedEx saw the writing on the wall and wanted to be the one doing the dumping. You see, Amazon has been building out its own logistics and delivery network complete with creepy ass drones.

 

• “Greed is good.” – NASA, apparently. The National Aeronautics and Space Administration is channeling its inner capitalist as the agency will begin selling B&B experiences at the International Space Station for $35k per night (rocket ride not included). It’s all part of NASA’s plan to commercialize the ISS and space travel. Not a bad side hustle. But the money won’t come close to the Space Station’s $4B in annual expenses. Your move, VRBO …

 

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