fortune--2020-10-26--Pelosi is already working on 2022

Pelosi is already working on 2022

Speaker Nancy Pelosi once predicted she’d have the 2020 House Democratic majority secured by November — of 2019.
Now, days before the Nov. 3 election, she seems to have done it, and she’s expanding her reach.
With control of the House hardly contested, Pelosi is working to fortify Democratic presidential nominee Joe Biden and win extra House seats in case Congress is called on to resolve any Electoral College dispute with President Donald Trump.
Pelosi said she feels so confident Democrats will keep the House this election, she’s already preparing to win the next one in 2022.
“This year, I’m trying to win it two years in advance — by being so substantial in this election that as soon as we start into the next year, people will see our strength,” Pelosi told The Associated Press in an interview.
“We intend to hold the House and grow our numbers,” she said about the election Nov. 3, and “contribute to winning the Senate and the presidency.”
It’s a stunning turnaround for the speaker, who just two years ago was being challenged for her job leading House Democrats. Pelosi rose as the face of party, the House impeached the president and emboldened Democrats are on the march to pick up House seats deep into Trump country.
Democrats are working to reelect some 40 House freshmen elected in the 2018 midterm to win the majority, most of them from districts Trump won in 2016. They’re digging deeper for additional seats in historically out-of-reach Republican strongholds including Nebraska, Indiana and even Alaska and Montana, where winners could tip the balance in an Electoral College dispute.
To wrest control, Republicans need to gain some 20 seats, but even the House GOP leadership has downplayed their chances. Strategists say Trump is a drag at the top of the GOP ticket. Even though Republicans recruited more female and minority candidates to compete with Democrats in suburban swing districts, the battle for the House is something of an afterthought in the marquee contests for control of the White House and the Senate.
“A rising tide lifts all boats, and right now it seems a Democratic tide is rising,” said Michael Steel, a Republican strategist and former top aide to House GOP leadership.
Steel said it has less to to with Pelosi’s planning than the national political environment. “I attribute the presumed success of her efforts to keep the majority more to Trump’s failures than to her stated leadership,” he said.
Those close to Pelosi’s political operation did not always join her prediction that Democrats would handily keep control.
Trump wasn’t on the ballot when they picked up the majority two years ago, and freshmen are often the most vulnerable to defeat as they seek reelection, especially this class of lawmakers now having to run alongside the president in districts often off-limits to Democrats.
Pelosi pushed ahead with the risky House vote to impeach the president in late 2019 over his dealings with Ukraine only to see the Senate, controlled by Republicans, vote to acquit him of the charges in a highly charged political environment early this year.
When the coronavirus pandemic hit, the Capitol abruptly shuttered. Pelosi engineered a rules change to allow the House to vote by proxy and work online, but it left lawmakers largely away from Washington. Now Pelosi is holding out for a robust COVID-19 aid package with the Trump administration, another risky move, seeking a $2 trillion-plus deal Republicans don’t want to give.
Rep. Cheri Bustos, D-Ill, who is the chairwoman of the party’s campaign arm in the House, said she counseled the new lawmakers not to get swept up in the national political debate but “run your race like you’re running for mayor” — meeting with constituents and responding to issues close to home.
“When we set out to do this work in 2019 we had no idea what this cycle would hold,” said Lucina Guinn, the Democratic Congressional Campaign Committee’s executive director.
The goal, she said, was to make the incumbents “as strong as possible” while also recruiting new candidates “to set up a big battlefield.”
Money helps. Pelosi is on track to be a $1 billion fundraiser for her party — an eye-popping sum during nearly two decades in leadership.
This election cycle she raised $227.9 million for Democrats — most of it for the House campaign arm — but she also shoveled $4 million for Biden from an August event and sent nearly $5 million to the state parties.
“We are ready,” Pelosi said.
She said she believes Democrats would sweep if the election were today, but it’s still a week out. “It doesn’t keep me up from the standpoint of worrying about it,” she said, “but it does get me up early to do something about it.”
It’s another surprising turn that the Affordable Care Act, which helped cost Pelosi her House majority in the 2010 election after Democrats passed “Obamacare,” is now a political calling card being used to win over Trump voters during the COVID-19 crisis.
Voters have come to rely on the health care law’s guarantees that those with preexisting health conditions can access insurance and parents can keep their adult children on family policies. A decade after President Barack Obama signed the ACA into law, Republicans are still trying to undo it, including in a court case heading to the Supreme Court a week after the election.
“Progressive ideas are actually popular, not just with progressives but also with moderate voters, with independent voters and maybe even with some Republican voters,” said Rep. Pramila Jayapal, D-Wash., a co-chair of the progressive caucus.
As Pelosi, of California, becomes an even more public presence for the party, Republicans run countless campaign ads against her. But she also has a following from those celebrating her high-profile standoffs with Trump. Since the spring COVID-19 crisis, she has appeared 20 times on the Sunday morning news shows and done more than 150 national television and radio interviews, her office said.
“I would not miss any opportunity, on behalf of my colleagues, to make sure that there’s clarity on where we’re coming from on some of these issues,” she said.
She plans to run again for speaker, if Democrats keep control of the House: “Definitely.”
But that’s for later. Pelosi notes experts have suggested Democrats will pick up between five and 15 House seats.
“Our goal originally was to hold the House,” she said. “Everything we get after that will just be a further enhancement.”


fortune--2020-10-26--Failing isn’t a career killer in Silicon Valley

For years J.P. Morgan was skeptical of Bitcoin .
Now the bank ’ s analysts say its value could triple @ @ @

This is the web version of Data Sheet, Fortune’s daily newsletter on the top tech news. To get it delivered daily to your in-box, sign up here.
The ever-quotable investment manager Eric Jackson may have had the best quip about Quibi, as post-mortems about the failed startup led by Jeffrey Katzenberg and Meg Whitman poured in this weekend. “Maybe there is nothing to be learned from Quibi,” he tweeted on Saturday morning. “I can’t remember a time when the conventional wisdom has been so dead on.”
It’s a fair point. So instead of rehashing the $1.8 billion Quibpocalypse one more time, let’s revisit some other failed startup leaders and see how they’re doing.
Travis Kalanick got dumped by Uber amid myriad legal probes. Now he’s on a real estate acquisition spree for his delivery food startup CloudKitchens with $400 million from Saudi Arabia. Parker Conrad was booted from HR startup Zenefits amid a scandal over insurance sales. Now he’s back at the helm of Rippling, a similarly focused startup with at least $100 million of backing from top VCs. They say Jawbone founder Hosain Rahman ran through $1 billion before shutting down the smart speaker maker. He’s raised $65 million for his health-oriented next act, now called all.Health. And Kevin Gibbon, whose failed startup Shyp helped people deliver stuff they sold on eBay, is back with Airhouse helping e-commerce companies deliver stuff they sell online. Gibbon is warier of VC backing this time around and said he’s raised under $5 million.
Some former founders are making it back without quite being CEOs again. Juicero founder Doug Evans squeezed through $120 million; his new venture is a book on healthy eating. Former Anki CEO Boris Sofman shut down his toy robotics company that burned through $200 million; he was snapped up by Waymo to head its self-driving truck effort.
And then there are the failed leaders who have yet to turn up, like Essential’s Andy Rubin, Chariot’s Dan Grossman, or UBiome’s Jessica Richman.
What fate awaits KBerg and the Whit? Time will tell.
Aaron Pressman
@ampressman
aaron.pressman@fortune.com
NEWSWORTHY
Transformed in his bed into an enormous insect. The CEO of spooky data analytics startup Palantir, Alex Karp, has no background in data analysis, computer science, or much of anything that seems relevant to the job. The Stanford law grad and philosophy PhD tells the New York Times he's not much help in sales pitches: “You think it is helpful having a fluorescent praying mantis coming into their office, telling them about German philosophy? Do you think that’s helpful? I can tell you, it’s not helpful."
Too old to be chillin' at the playground. The cloud gaming market is getting a bit overcast. Facebook on Monday debuted its new service within its desktop and Android apps with titles including Asphalt 9: Legends, PGA TOUR Golf Shootout, Solitaire: Arthur’s Tale, and WWE SuperCard. But, sorry, no iPhone versions due to Apple's current policy against allowing such services.
Bill comes due. South Korea's richest man, Samsung Electronics chairman Lee Kun-hee, died on Sunday. The country's significant estate taxes could force Lee's heirs to sell their controlling stake in the company. But the family could also opt to spread out the tax payments over multiple years and avoid a fire sale.
Not enough bills. On Wall Street, shares of European software giant SAP are tumbling. The company said revenue declined 4% to $7.7 billion and that it no longer expects a recovery in its travel expense unit this year. SAP's shares, which had previously gained 12% this year, dropped 21% in pre-market trading on Monday. Also, Jack Ma's Chinese payments startup Ant Group will raise a staggering $34.5 billion in its initial public offering this week on stock exchanges in Shanghai and Hong Kong. That will make it the biggest global IPO in history.
Folding bills. As you know, I am a fan of the two-screen Microsoft phone, the Surface Duo, but with some software bugs and a crummy camera, it's tough to recommend at $1,400. Now, after less than two months on the market, it's down to $1,100. Does that mean it's selling well?
FOOD FOR THOUGHT
Friday's "Food for thought" about Steve Jobs' imprint on Apple brought an email of a rebuttal from iPod designer and Nest co-founder Tony Fadell. Fadell disagrees with Apple University dean Joel Podolny and professor Morten Hansen:
Quite ironic that this article is published on the 19th anniversary of the original iPod launch.
Joel maybe you should talk to my wife, who hired you for your position, to remind you of the Apple organizational facts that you conveniently left out?
The ol’ trick: Represent various facts to build the narrative instead of actually telling the truth of the situation - the current org was built based on personalities…
IN CASE YOU MISSED IT
This startup wants to help you prepare for America’s next disaster By Katherine Dunn
With offices closed, WeWork and other coworking spaces jump on market opportunity By Alyssa Newcomb
Former Facebook employee’s new book exposes Big Tech’s dirty secrets By Danielle Abril
The electric car frenzy is helping even troubled companies raise big money By David Z. Morris
Is it time for a new agency to oversee Big Tech? Many say yes By Jeff John Roberts
Stop doomscrolling on social media and read a book By Padmasree Warrior
(Some of these stories require a subscription to access. Thank you for supporting our journalism.)
BEFORE YOU GO
Remember the murder hornets? The flying demons made it across the Pacific to the U.S. Northwest somehow, endangering the lives of millions of honey bees. Well, the honey bees and all hornet-fearing people can rest easy. Scientists tracked one of the beasts and wiped out their nest. So that's one less dystopian nightmare to worry about.


fortune--2020-10-27--AMD to buy Xilinx in $35 billion all-stock deal

Advanced Micro Devices agreed to buy Xilinx for $35 billion in stock, taking the chipmaker into more diverse and profitable markets and adding to its data center offerings.
Xilinx investors will get 1.7234 AMD shares for each Xilinx stock they own. That values Xilinx at about $143 a share, 25% more than the closing price on Monday and 35% above the price before news of a possible deal was reported earlier in October.
The deal is a coup for AMD Chief Executive Officer Lisa Su, creating a company with a larger research-and-development budget and a broader array of products to take on Intel Corp.
Since taking over in 2014 when AMD was in crisis, she has slashed debt and overseen the development of more powerful processors. Revenue and profit have surged and the stock has soared. Now Su is using that currency to snap up a company with complementary products that generate steady cash flow.
Some investors and analysts were concerned that AMD might borrow heavily to pay for a Xilinx acquisition, repeating costly mistakes from more than a decade ago. The all-stock deal unveiled on Tuesday should calm those fears.
Q3 beat
AMD also reported third-quarter results that beat Wall Street estimates and gave a strong revenue forecast for the current period, buoying confidence in Su’s ability to absorb Xilinx and continue growing the combined company. Sales in the fourth quarter will be about $3 billion, a jump of 41% from a year earlier. On average analysts had projected $2.62 billion. That follows an increase of 56% in the third quarter due to demand for PC, gaming and data center processors. That’s a contrast to Intel, which recently reported a surprise drop in data center chip sales.
The acquisition still needs to be approved by shareholders and regulators, including authorities in China. AMD estimated that will take about 18 months. When it closes, the deal will immediately improve AMD’s profitability, cash flow and revenue growth, AMD said in a statement. AMD shareholders will own 74% of the new company. AMD will pay Xilinx $1.5 billion if it terminates the deal, while Xilinx has agreed to pay $1 billion if it calls off the transaction, according to a regulatory filing.
“This is truly a compelling combination that will create significant value for all stakeholders, including AMD and Xilinx shareholders who will benefit from the future growth and upside potential of the combined company,” Su said in the statement. She will be CEO and Xilinx’s Victor Peng will be president overseeing the Xilinx business and strategic growth initiatives.
Taking on Intel
The deal will give Su more of the pieces she needs to break Intel’s stranglehold on the profitable market for data center computer components. Xilinx, based in San Jose, California, makes field programmable gate arrays, or FPGAs. That kind of chip is unique because its function can be altered by software, even after it’s been installed in a piece of machinery.
FPGAs are used in wireless networks, so the purchase will give AMD new telecommunications customers just as that industry spends billions of dollars to build fifth-generation, or 5G, services. Xilinx is also rapidly expanding in data centers, where its chips accelerate computing and help connect servers. The other major FPGA supplier is Intel, which gained its market position through the purchase of Altera Corp. in 2015.
Xilinx last week reported quarterly data center sales were up 30% and now account for 14% of total revenue. While it generates less revenue than AMD, Xilinx is more profitable.
The transaction is partly driven by the growth of big cloud-computing providers such as Amazon.com Inc. and Alphabet Inc.’s Google. Those companies are spending heavily on new data centers to meet a surge in demand for computing power delivered via the internet. They’ve become major purchasers of server chips, which run thousands of computers that are packed into these data centers.
The cloud providers are also racing to enhance services, such as search, with artificial intelligence software, and many companies are experimenting with building their own hardware to do so. That’s putting greater pressure on chipmakers to improve their offerings.
At the same time, devices in some of Xilinx’s traditional markets, such as automotive and networking, are increasingly taking on more of the attributes of computers. AMD currently doesn’t have access to those customers, while Intel does.
Credit Suisse and DBO Partners advised AMD. Morgan Stanley advised Xilinx.


fortune--2020-10-27--Inside American dentistry’s identity crisis

Dental offices shut their doors to all but emergency patients when COVID-19 began spreading in March. Many dentists donated personal protective equipment (PPE) to local health care facilities desperate for the hard-to-find but crucial gear. But as dental offices around the country began to reopen for cleanings and fillings, dentists found themselves hunting scarce marketplaces for the protective gear they needed to keep their clients and staff safe and shore up their image of safety in a time when aerosols—tiny airborne droplets produced in countless numbers during a dental procedure—can be deadly.
The American Dental Association (ADA), the largest industry body, worked directly with the Federal Emergency Management Agency (FEMA) to have dentists declared essential health workers and included in FEMA’s PPE distribution plan. As early as June, dentists in need were receiving KN95 masks from the national stockpile. “Three months ago, we were in a much more dire position,” says Marko Vujicic, ADA chief economist and vice president.
The fact that they weren’t included at the outset rankled many. “‘Dentistry is essential health care’ is our latest motto,” says Kirk Norbo, a practicing dentist who is cochair of the ADA’s back to work committee. “For us to be looked at as nonessential and be at the whim of the next possible closure doesn’t help anybody.”
In a recent meeting, the ADA also threw its weight behind efforts to have dentists qualified to administer COVID-19 vaccines when such a thing exists—a role they have never held before.
Experts describe ongoing conflict, financial stress, and profound anxiety in the dental industry. While the industry has made an impressive recovery in recent months from a staggering 93% business downturn during the shutdown, these circumstances, they say, have only just begun to destabilize the industry.
Today, almost all of America’s dentists are back in the office, along with approximately 96% of their dental staff, who include hygienists, assistants, and office managers. Patients will likely notice some differences that have become all too familiar in the COVID-era world: enhanced PPE, prescreenings, and extra sanitation.
For the next few months, Vujicic anticipates a lull with about 80% of pre-COVID patient volume. The PPE situation has also stabilized, for now at least, with most dentists reporting a two-week supply. As most of the country heads into our first pandemic winter, he says, the short-term situation for dentists is fairly stable, both on the supply and the demand ends. After all, teeth are a notoriously troublesome aspect of human anatomy, and dental troubles don’t wait for a pandemic to end before they strike.
But change is coming. “I don’t see an imminent solution to the COVID problem,” Vujicic says. ADA projections show a 38% reduction in the dental industry overall for 2020 and up to a 20% reduction for 2021—assuming no major changes to the status quo over the winter. Given these figures, he says, the current volume of dental practices isn’t sustainable.
“Our latest analysis doesn’t paint such a rosy picture,” he says.
The backstory
This is the second time in the past 50 years that American dentistry has found itself dealing with public worry about safety caused by a virus. The last time, it was HIV. “That’s when dentistry made its first major transition in infection control,” says Michelle Lee, executive director of the Organization for Safety, Asepsis, and Prevention (OSAP), an organization that does research and education on dental industry hygiene.
“Since the ’80s, we’ve been following universal precautions,” Lee says. These precautions—masks and gloves during procedures, advanced air filtration, and sanitation—are credited with preventing the spread of human immunodeficiency virus, a blood-borne pathogen, through dental procedures. The dental industry made these changes in the context of several high-profile HIV infections related to dental care, which shook public confidence. Staff started treating every patient as if they might be infectious, preventing further infections and helping to resolve the crisis in public trust.
“Dealing with HIV was a real issue. Dentists took a lot of precautionary measures,” says Fred Leviton, president and CEO of the nonprofit Dental Lifeline Network.
Lee and others credit this ethos for being a major reason that dentists have been able to reopen with no COVID-19 infections to date being traced back to their offices. Although some of the precautions are new—no dentist ever wore a respirator in pre-COVID days, for instance—the mindset was already established, she says.
Even so, America’s dentists are facing a fresh crisis of trust, this time from their staff as well as their patients. Dental staff, asked to return to work in the midst of a pandemic after being furloughed or laid off, worried about whether they would be safe and whether they would bring the virus home to their families.
San Antonio dentist Joshua Austin authored a controversial editorial for a dentistry publication on this issue. In it, he called for dentists to keep in communication with their staff, and for hygienists, specifically, to raise concerns with their employer before blowing the whistle.
At his office, he says, “we had to have a sit-down meeting where we talked about what their concerns were, and I had to show them all the different things I was trying to do to mitigate them.”
Many of his friends who are dentists were having the same kinds of conversations, he says—especially with the dental hygienists they employ. “As a profession, they wanted to stay home and didn’t want to be out in what they perceived as a dangerous environment,” says Austin.
JoAnn Gurenlian, a professor of dental hygiene at Idaho State University and chair of the American Dental Hygienists’ Association (ADHA) back-to-work committee, tells it differently. Dentists and hygienists largely want the same thing, she says: safety for them and their patients. There was tension about coming back to work, but, she says, “it wasn’t really about conflict. It was about, How do we put all these pieces into play?”
The ADHA is still receiving hundreds of emails from hygienists concerned that their dentists are not observing the national recommendations leveled by the ADA, the ADHA, and the Centers for Disease Control (CDC), Gurenlian says.
“There was this really hard and quick reaction, and I think it really broke some major trust bridges,” says Tracy Anderson Butler, a former hygienist and dental industry consultant who spent a large part of her career advising dental practices on how to keep operations running smoothly and deal with interpersonal issues. She’s heard about bullying by both dentists and hygienists, she says, and workplace conflict over safety measures.
Most dentists are small-business owners as well as medical practitioners. They hire and retain their own staff, and they’re responsible for resolving these conflicts as well as overseeing the practice of hygienists and others. But hygienists, who are themselves trained medical professionals, can strike out on their own in some states, thanks to legislation that allows them to practice independently.
Both Anderson Butler and Gurenlian expect to see more hygienists taking this option, as well as some leaving the profession entirely. “I think it’s an awakening for dental hygiene,” says Gurenlian.
A short-term symptom of all this unrest is the fact that dentists are having trouble finding new staff and maintaining their existing staff right now. According to ADA numbers, roughly a quarter of dental practices were recently or currently looking to recruit hygienists or dental assistants but having a challenging time doing so.
Mitch Olan, executive chairman of Dental Care Alliance (DCA), says the pool of staff looking for positions has decreased during COVID. In the longer term, he’s hopeful that new graduates of dental care programs will fill those gaps.
Supply and demand
Then there’s the fact that one-fifth of demand for dental services has evaporated at a time when costs are going up.
“The short-term response I see coming is higher fees, layoffs, and potential exits among retirement-age dentists,” says Vujicic.
ADA numbers peg the additional costs of added PPE and sanitation at between $10 and $15 per patient visit. Sometimes that money is being recouped from insurers that are keen to see dentists stay in business, says Vujicic. Other times, although the ADA doesn’t know how often, dentists are eating that cost—for now. But in the medium term, he says, most dentists whom the ADA has asked say they’ll have to raise prices to account for their added costs, which means consumers would bear this additional cost.
Dental offices are keen to be seen as safe. During the pandemic, many people are just doing less of everything, concerned about the potential risks. Dentists rightly point out that no COVID-19 infection has been traced back to a dental office, but patients should be careful, just like with any other medical procedure at this strange time.
There’s a divide between how dentists talk and the recommendations of public health organizations. In August, the World Health Organization (WHO) released guidelines saying that routine dental care should be avoided in areas with community spread of COVID-19, and cases are rising in nearly every state across the country right now.
Then–ADA president Chad Gehani “respectfully yet strongly” disagreed in a release, saying, “With appropriate PPE, dental care should continue to be delivered during global pandemics or other disaster situations.”
This story is a microcosm of the public health back-and-forth that’s been characteristic of the conversation around dental care during the whole pandemic. What we know about SARS-CoV-2 has changed rapidly, along with public health recommendations of all kinds. And how the virus could spread in a dental setting is only beginning to be known.
An email survey of U.S. dentists conducted by the ADA earlier in the year reported an extremely low rate of COVID-19 infection among dentists themselves—under 1%—and universally enhanced protective measures were widely publicized by the organization. The research is ongoing and recently added hygienists.
But because there are so many asymptomatic COVID-19 infections out there and contact tracing has been difficult owing to such rampant public spread of the disease, it’s impossible to say how accurate the survey results are. That less than 1% stat from the ADA study might be an underestimate, the study author acknowledged—and that study only looked at dentists: It didn’t look at patients. But as for the more important question, whether dental offices are high-risk settings, the answer seems to be “no,” provided precautions are being taken.
More important, though, is that “not every practice is following guidance,” Gurenlian says. “Not every practice has enough PPE.”
Dentists are also eager to be seen as essential. The ADA adopted their new motto in a late-July meeting. The terms of their related policy broadly define essential dental care as “any care that prevents and eliminates infection, preserves the structure and function of teeth as well as the orofacial hard and soft tissues.” They recommended the term be used in advocacy instead of some previous terms: emergency dental care and elective dental care.
But the pandemic is demonstrating that if dental health is an essential part of health, and should remain open in emergency situations, it needs oversight mechanisms for the dental profession that mimic those for the medical profession. Gurenlian questions why those mechanisms, like an ability to report employers who aren’t observing proper hygiene procedures and industry-specific contact tracing, don’t exist for dental professionals. As it is, she says, “I think we need awareness of reporting to health departments and reporting to our national organizations.”
What comes next
The dental industry was already in the grips of change before the pandemic started. The old model of retailing dental supplies was slowly being abandoned in favor of shopping online, while the teledentistry sector was slowly growing, and a relatively new form of dental practice shaped by what are known as dental service organizations (DSOs) was also gaining ground. Industry watchers think all three are likely to become more prominent as a result of the pandemic shock to the industry.
When PPE shortages began, says Scott Drucker, a dentist turned online dental supplies retailer, dentists turned to traditional suppliers and found costs to be multiple times what they had previously anticipated or products to be simply unavailable. That got them looking farther afield, he says: “Many more dentists have found us now that they were pushed to shop elsewhere.”
Drucker’s company, Supply Clinic, is a marketplace with multiple retailers, but, he says, traditional distributors have also enhanced online stores in response to pandemic demand. “There’s been a large shift in the industry to online shopping,” he says. Beyond supply issues, there was also the fact that the traditional model, which involved a sales representative entering dental practices with samples and taking orders on the spot, isn’t really possible right now because of COVID-19 social distancing and space restrictions.
“There have been waves of spottiness in supply, and we’ve gone through waves of different items being difficult to procure,” Drucker says. First it was masks, then gowns, then disinfectant wipes. Now gloves are the hardest things to get hold of, he says. But with multiple opportunities to find supplies online and compare prices, dentists are more likely to get a good deal on the right product.
This process is the mirror image of a consumer transition that has destabilized traditional dental revenues. The Internet allows patients to shop around for well-reviewed dentists and compare dental prices, and it’s also made new forms of teledentistry—like SmileDirectClub, which produces clear aligners—possible. Drucker says teledentistry saw a short-term bump when dental offices were closed, but he doesn’t know if it that accelerated growth rate. However, both he and Olan think teledentistry’s market share will continue to grow.
Another trend that several people who spoke to Fortune believe will continue is the slow consolidation of the dental industry into larger practices and practices operated by dental service organizations (DSOs) like DCA, Olan’s group. These organizations are also known as dental support organizations.
Currently, 18% to 20% of dental practices are affiliated with DSOs. Technically, the dentists still own their practice, as is legally required, but they are part of a larger organization that oversees practice administration and marketing. Proponents of the DSO model, including Olan, say that partnership with a DSO allows dentists to focus on patient care rather than the business side of the practice. Detractors say that DSOs promote consolidation at the cost of patient care.
In the next five to 10 years, Olan expects DSO marketing penetration to increase by 30% to 35%. “The pandemic just added another layer of responsibility and stress on top of running a dental practice,” he says.
Dental students are graduating into a very different milieu than that of even a few years ago. “There’s no doubt that dental education in the future will be different from what it has been, because it is right now,” says Karen West, president and CEO of the American Dental Education Association.
Her organization has been closely tracking enrollment, and she says it’s currently on par with pre-COVID times. Dental students will graduate today with an average of about $300,000 in educational debt, Olan notes. He says many are unlikely to want to go the route of the sole practitioner. Their entry into the field will make its own mark on this changing industry.
For now, though, the dental business is in the eye of the storm, but you still might want to think about getting your teeth cleaned. As winter looms, Gurenlian says, “it’s more important than ever that we take extra care of ourselves.”


fortune--2020-10-27--Wisdom from Day One of the Fortune Global Forum

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Good morning.
Day one of our virtual Fortune Global Forum got underway yesterday, focusing on how COVID has changed the nature of business. Some takeaways:
Why business must respond: “The coming together of the pandemic and social justice really put a bullseye on us. All of us in business now can’t just step aside and think these problems are going to solve themselves. All of us who are employers have to step up.”
—Margaret Keane, CEO, Synchrony
On putting employees first: “I’ve been reminded of some important timeless principles, but first and foremost is that it’s about the team.”
—Larry Culp, CEO, GE
On increasing the pay of frontline workers: “We saw these ordinary people, factory workers, frontline workers, truck drivers, that we didn’t pay attention to all this time, that they were the ones moving us forward.”
—Hamdi Ulukaya, CEO, Chobani
On the wisdom of labor markets: “I (used to) believe that if you rely on the market, your employees will be okay…Then I put out a survey, and found that 2/3rds of our employees struggled to make ends meet at the end of the month.”
—Dan Schulman, CEO, PayPal
On the crisis’ effect on inequality: “This has been a very unequal crisis for many. The most vulnerable informal workers and small businesses have been hit the hardest. What we do today to help or not will have multigenerational effects.”
—Anthony Tan, CEO, Grab
On managing in tough times: “Never waste a crisis. If you don’t see a silver lining, you better go and create one.”
—Karen Chan, CEO, AirAsia.com
On keeping an eye on the long term: “Our business functionally disappeared in March. It takes your breath away how profound that impact was to the business…What we do know is the virus will get behind us. We know that with virtual certainty.”
—Arne Sorenson, CEO, Marriott
Why leaders must take responsibility: “The first thing you can’t do is you can’t feel sorry for yourself.”
—Darius Adamczyk, CEO, Honeywell
Why CVS is hiring 15,000 people: “We have now had more than 5 million people come to a CVS clinic for a COVID test…We were selected by the government to become an important part of solution by making sure the vaccine is administered to long term care facilities, nursing homes, assisted living facilities…”
—Larry Merlo, CEO, CVS
On moving to permanent, distributed work: We do it “not for cost savings, but because, if we believe in (our) tools, can’t we be a little more accommodating of people?”
—Stewart Butterfield, CEO, Slack
On reduction of global trade: “The first thing that you need to remember is that food is distributed with humidity…There is an inherent movement of product, regardless.”
—Juan Luciano, CEO, ADM
Why a farmer’s co-op is pushing for universal broadband: “I remind myself every time I speak about this: These are families. 95% of farms are still family owned.”
—Beth Ford, CEO, Land O’Lakes
And why others agree: “Those who don’t have access to the internet and digital content will be left behind. It’s a big issue we all have the obligation of trying to mitigate as leaders of large companies.”
—Enrique Lores, CEO, HP
On moving to virtual commerce: “For a couple of months, we were essentially an ecommerce business. That created a lot of clarity for us.”
—Sonia Syngal, CEO, Gap
Why brick and mortar isn’t dead: “As we sit here today, even during the pandemic, our store comps grew 11 percent. I think the investments we’ve made and the trust we’ve built creating an easy, safe environment has certainly paid off. Stores still represent over 80% of where the dollars are being spent.”
—Brian Cornell, CEO, Target
On China: “Since China is recovering relatively quickly, sectors like consumption and manufacturing are also recovering quickly…China is currently one of the safest places in the world.”
—Guo Guangchang, Chairman, Fosun International
On A.I. in China: “I think in the last two and a half years we’ve seen my hypothesis play out…China has largely caught up with the U.S. on A.I.”
—Kai-Fu Lee, CEO Sinovation Ventures
The need for new infrastructure: “Clearly, the infrastructure we have in the world needs to be rethought to be more digital and green…This is a great time to rethink all of this in a different matter.”
—Jean-Pascal Tricoire, CEO, Schneider Electric
Why climate change is rising on the business agenda: “There is clearly, because of this pandemic, there is more awareness, more sense of urgency, that something needs to be done.”
—Roberto Marques, CEO, Natura
More news below. And catch this week’s episode of our podcast Leadership Next, on Apple or Spotify, featuring Paul Hudson, CEO of Sanofi, on the purpose-driven race to develop a vaccine.
Alan Murray
@alansmurray
alan.murray@fortune.com
TOP NEWS
Stocks slip
Yesterday's bad times on Wall Street appear to be continuing in Europe today, with the Stoxx 600 down 0.5% at the time of writing mid-morning. Miners and automakers led the drop. U.S. futures today look mildly positive. CNBC
Carbon neutrality
Japanese Prime Minister Yoshihide Suga has committed the country to going carbon-neutral by 2050. "Responding to climate change is no longer a constraint on economic growth," Suga said in his first policy speech since assuming the premiership last month. "We need to change our thinking to the view that taking assertive measures against climate change will lead to changes in industrial structure and the economy that will bring about great growth." Washington Post
Vaccine hope
Fosun Group chair Guo Guangchang reckons the Chinese firm's COVID-19 vaccine collaboration with Pfizer and BioNTech will bear fruit as early as December. "Once the vaccine is proved to be safe and effective [after trial results are posted in November], the vaccine will be made available in the market by December [2020] or January next year," Guo said at the Fortune Global Forum. Fortune
Italian approval
Italy has green-lit trials of a generic osteoporosis drug for the potential treatment of COVID-19. Researchers hope raloxifene could reduce COVID-19 symptoms and infectiousness, based on simulations they have conducted on a European Commission-backed supercomputer platform. Reuters
AROUND THE WATER COOLER
Debut record
Jack Ma's Ant Group will sell shares worth around $34.4 billion on the Shanghai and Jong Kong stock markets, making for the world's largest stock market debut. The online payments firm will sell around 11% of its shares, valuing the whole business at around $313 billion. BBC
Enough stimulus
Volkswagen CEO Herbert Diess does not think the auto industry will need more stimulus (in the form of purchasing incentives) if there's a second lockdown or further economic slump. Diess said the EV-and-hybrid-focused incentives provided earlier this year worked—VW expects to turn a profit this year—but a second round will not be necessary. Daimler CEO Ola Kallenius shares that opinion, largely due to booming sales in China. Financial Times
Lyft progress
Lyft co-founder John Zimmer sees the halving of the company's business as a "strong position"—such are the realities of this pandemic. "The storms that we have weathered previously were much more difficult," he claimed in this week's episode of Fortune's Reinvent podcast. "I do genuinely think we will be stronger on the other side of this." Fortune
Bitcoin boost
J.P. Morgan analysts reckon Bitcoin's value will double or triple at its current rate of growth (the cryptocurrency is trading at $13,000-ish this morning) due to its popularity among millennials as an alternative to gold. This is particularly notable because of J.P. Morgan's historical antipathy towards Bitcoin. Fortune
This edition of CEO Daily was edited by David Meyer.


fortune--2020-10-27--Stocks, futures slip as even a surge of ‘beats’ fail to lift the COVID gloom

This is the web version of the Bull Sheet, Fortune’s no-BS daily newsletter on the markets. Sign up to receive it in your inbox here.
Good morning. Global stocks and U.S. futures have been sliding all morning as COVID concerns spook investors. Everything else seems to be secondary, including a batch of earnings beats that investors are largely ignoring, and, in some cases, are punishing.
Let’s see what’s moving the markets.
Markets update
Asia
The major Asia indexes are mostly lower in afternoon trading with the Hang Seng down nearly 0.6% .
are mostly lower in afternoon trading with the down nearly . Jack Ma’s Ant Group hopes to raise roughly $34.5 billion in its pending record-breaking IPO . The fintech giant expects to begin trading next week in Shanghai and Hong Kong, and that fund-raising bonanza will make Ma the 11th wealthiest person on the planet.
hopes to raise roughly in its pending record-breaking . The fintech giant expects to begin trading next week in Shanghai and Hong Kong, and that fund-raising bonanza will make Ma the 11th wealthiest person on the planet. Some promising news on the COVID vaccine front… CanSino Biologics co-founder Yu Xuefeng reiterated the Chinese vaccine company is on schedule to conclude its single-dose Phase III COVID vaccine trials in January, 2022. He made the remarks Tuesday at the Fortune Global Forum.
Europe
The European bourses are in the red with the Europe Stoxx 600 down nearly 0.30% as investors fret over the impact of tighter COVID restrictions across the continent. As we’ve been seeing all earnings season, decent corporate results are getting drowned out by the virus news.
are in the red with the down nearly as investors fret over the impact of tighter COVID restrictions across the continent. As we’ve been seeing all earnings season, decent are getting drowned out by the virus news. There are a few notable exceptions. Shares in HSBC climbed as much as 5.3% in Hong Kong this morning after the bank reported a bottom-line beat and, more importantly, suggested it’s ready to resume dividend payments.
in Hong Kong this morning after the bank reported a bottom-line beat and, more importantly, suggested it’s ready to resume dividend payments. BP eked out a slim Q3 operating profit this morning, which amounts to a mammoth beat for Big Oil these days. But its bottom line result comes in a whopping 96% below the year earlier quarter. Shares were up 1.7% at the open, before climbing.
U.S.
U.S. futures are trading sideways this morning. That’s after all three exchanges bombed out on Monday, the worst drop in a month . The Dow’s Monday losses were enough to put the benchmark index in the red for October.
are trading sideways this morning. That’s after all three exchanges bombed out on Monday, the . The Dow’s Monday losses were enough to put the benchmark index in the red for October. BlackRock is short the dollar going into the election. The world’s biggest money manager believes the greenback has further to fall regardless of which party is in the White House next year.
regardless of which party is in the White House next year. Which companies are on the reporting calendar today? Microsoft, Pfizer, Eli Lilly, 3M and AMD to name a few.
Elsewhere
Gold is down, trading around $1,900/ounce .
is down, trading around . The dollar is flat.
is flat. Crude is up, with Brent trading at tick above $41/barrel.
***
Eat your beats
As I noted in this space last week, the sacred “beat” is no longer moving investors.
There are exceptions, notably with BP and HSBC today. (The latter is helped by its dividend announcement, however.) But it’s no longer a given that shares will jump when companies outperform the consensus estimate on either the top- or bottom line.
As my colleague Anne Sraders reported yesterday, this trend has now gone to an extreme. She quotes BofA Securities who write in a Monday investor note, “So far this quarter, companies that beat on both top and bottom line have underperformed the S&P 500 by 5bps the day after (worst in history), and misses outperformed by 60bps, highest in history.”
There is some precedent for this bizzarro phenomenon—the tech bubble days of 2000, which was “the only earnings season in history when surprises saw perverse rather than intuitive reactions—beats were not rewarded and misses were not penalized.”
This up-is-down reaction comes as companies are having an impressive quarter, beats-wise. Sraders breaks down just how impressive.
Now, the real test for this trend comes this week as the companies reporting over these five days represent nearly 40% of the S&P 500’s combined earnings.
In other words, if the trend still holds true this time next week this will be something to watch over the coming quarters as well.
***
Have a nice day, everyone. I’ll see you here tomorrow.
Bernhard Warner
@BernhardWarner
Bernhard.Warner@Fortune.com
As always, you can write to bullsheet@fortune.com or reply to this email with suggestions and feedback.
Today's reads
GDP... nbd. Thursday's GDP reading will almost certainly go down in the record books, with a variety of forecasts penciling in historic 30% growth. That's just what an incumbent wants to hear a few days before Election Day. But this election cycle that whopping figure is likely to amount to NBD—no big deal—writes Fortune's Geoff Colvin. Here's why.
More precious than gold? Bitcoin is trading above $13,000 this morning as its incredible run surges on. Analysts at J.P. Morgan's Global Markets Strategy group see real value in the cryptocurrency, fueled by Millennials as an alternative to gold. "Even a modest crowding out of gold as an 'alternative' currency over the longer term would imply doubling or tripling of the bitcoin price from here," the analysts wrote in a note to investors on Friday.
Some of these stories require a subscription to access. There is a discount offer for our loyal readers if you use this link to sign up. Thank you for supporting our journalism.
Market candy
+12
President Trump may be trailing in most polls, but he has a commanding lead over challenger Joe Biden in our latest Fortune/SurveyMonkey poll of investors. "By a +12 percentage point margin, investors think Trump (54%) would do a better job growing the stock market than Biden (42%)," reports Fortune's Lance Lambert.


fortune--2020-10-27--COVID gave China an edge in A.I. battle against the U.S.

The U.S. and China are battling for global supremacy in artificial intelligence. Amid the pandemic, China may have taken the lead.
“Data is what drives A.I., and China has more data than anyone else,” Kai-Fu Lee, CEO of Chinese venture capital firm Sinovation Ventures and author of AI Superpowers: China, Silicon Valley, and the New World Order, said at the Fortune Global Forum on Tuesday.
The world’s rapid shift to online platforms during the pandemic is a windfall for artificial intelligence, he said. The surge in online activity is building a mountain of data that companies and researchers can use to improve A.I. algorithms. “Data is everything to A.I. More digitization and more online [users] mean more data. And that’s more A.I. that could be trained,” Lee said.
During the COVID-19 pandemic, the U.S. has made digital gains in areas like food delivery and mobile payments, Lee said, but China has surged ahead in deploying new A.I. technologies like universal contact-tracing apps and robots that conduct automated temperature checks, deliver packages, and spray disinfectant. “China has a tenacious entrepreneurial ecosystem that has built companies that can harness the data,” he said.
A few years ago, Lee believed that China and the U.S. could cooperate—instead of compete—in artificial intelligence. But now, amid worsening U.S.-China relations and talk of “decoupling” the two economies, collaboration seems to be off the table.
“I had hoped there would be two superpowers with different strengths—the U.S. more on research, and China more on implementation—with ways to work together,” Lee said. “[Today] it looks like that dream is more difficult.”
Another trouble spot in the digitization trend is the mounting human cost.
As the pandemic accelerates the development of A.I., society has less time to figure out how to offset the cost to workers, Lee said. Software is increasingly able to replicate or exceed the performance of human laborers, just as companies are looking to cut costs amid a global economic downturn, which puts existing jobs at risk, Lee said.
Recent developments in A.I. and robotics make jobs involving customer service or factory labor especially vulnerable to automation, Lee said. “On the offline blue-collar work side, we find it’s just easier to put [artificial intelligence] in the middle of workers.”
As a result, employers and governments need to consider how A.I. may upend the lives of workers around the world, he said.
“We should really think [about] society and the world—what happens with growing wealth inequality and job displacements,” Lee said.


fortune--2020-10-27--CEO of Chinese drugmaker defends his COVID vaccine’s January 2022 timeline

Chinese vaccine company CanSino Biologics, one of the frontrunners for a COVID-19 vaccine, is slated to conclude phase III trials of its vaccine candidate Ad5-nCoV in January 2022.
That deadline lands right in the middle of the estimated completion dates of other COVID-19 vaccine frontrunners, wrapping up months before Moderna’s estimated October 2022 completion date, Pfizer’s December 2022 date, and Johnson & Johnson’s estimated March 2023 end date, and after the estimated October 2021 phase III trial end dates for the Sinovac and the AstraZeneca-Oxford University vaccines.
There are currently over 100 COVID-19 vaccine candidates in development across the world. Some vaccines have received emergency authorization or are seeking it, which could see vaccines administered before trials officially end. The U.S. could distribute Moderna and Pfizer vaccines, for instance, as soon as late 2020 or early 2021.
For Yu Xuefeng, cofounder, chairman, and CEO of CanSino Biologics, the longer timeline is worth it. CanSino’s vaccine is the only frontrunner that comes in a single dose, instead of the two-dose regimen that other COVID-19 vaccines will require for a strong immune response.
Given the urgent need for mass distribution of a COVID-19 vaccine, there are huge benefits to a safe and effective dose that can be delivered in one sitting instead of two, Yu said at the Fortune Global Forum on Tuesday.
“In the pandemic environment, what you need is a vaccine that can quickly provide protection…If we can make a single dose work, it will stop the spread of the virus, and it will certainly have a good control of the pandemic situation,” Yu said.
CanSino’s Ad5-nCoV vaccine is backed by the Chinese military and is currently undergoing late-stage trials in Pakistan, Russia, and other countries, including Mexico, which said earlier this month it would purchase 35 million CanSino vaccine doses for its citizens.
The vaccine, which received Chinese government clearance for military use in June, uses a human adenovirus vector, which Yu said is “one of the safest” vaccine vectors. CanSino used the same vector to create its Ebola virus vaccine, which is split into two doses.
Data from the Ebola vaccine shows that a second dose can boost the effectiveness of the Ad5 vaccine, Yu says, so CanSino eventually may offer a second dose of the COVID-19 vaccine for people with weaker immune systems.
CanSino hasn’t decided on a price for its COVID-19 vaccine yet.
“The price is less a concern for now,” Yu said. “We have to make it first.”
This article has been updated to clarify the estimated timelines for vaccine developers’ phase III clinical trials.


fortune--2020-10-27--Chinese partner says Pfizer COVID vaccine may reach market by December

The experimental COVID-19 vaccine codeveloped by the U.S.’s Pfizer, Germany’s BioNTech, and China’s Fosun Pharmaceuticals may reach market as early as this December, according to the chairman of Fosun Group.
“Once the vaccine is proved to be safe and effective [after trial results are posted in November], the vaccine will be made available in the market by December [2020] or January next year,” Guo Guangchang, chair of the parent company of Fosun Pharmaceuticals, said Tuesday at the Fortune Global Forum.
There is, of course, no guarantee that the vaccine is safe and effective enough for mass distribution. Pfizer, BioNTech, and Fosun are currently testing the candidate on tens of thousands of volunteers in Phase III trials in several countries, including the U.S., Brazil, Germany, and Argentina. In the U.S., Pfizer is expected to submit trial data on the candidate to regulators ahead of competitors like Johnson & Johnson and AstraZeneca, which both have experienced trial delays in recent weeks.
If the Phase III trials determine that the Pfizer-BioNTech-Fosun vaccine is ready for public use, Fosun will manage the supply chain and distribution of the vaccine in Greater China, which includes mainland China, Taiwan, Hong Kong, and Macau, Guo said.
The chairman characterized the vaccine candidate as a product of “global collaboration” among companies in three different countries. That trait means it will be distributed broadly to “fulfill global demand,” Guo said.
The Fosun Group is a Chinese conglomerate that operates in more than 20 countries in sectors like pharmaceuticals, fashion, and tourism. The company’s global reach—it draws roughly half of its revenue from outside China—means it is especially susceptible to the enormous slowdown in cross-border travel due to the pandemic. In that regard, Fosun’s tourism and fashion businesses have been hit especially hard, Guo said. Some of Fosun’s international holdings include the Wolverhampton Wanderers English Premier League soccer team, the French high-end fashion brand Lanvin, and the Club Med hotel chain that has properties across Europe and Asia.
But even as Fosun sustains heavy losses in regions like Europe, China has emerged as a bright spot on the company’s balance sheet.
“Life in China has returned to normal, and businesses are booming,” Guo says. “Because China’s economy is already recovering, China has become the cornerstone of the global economy.”
China is expected to be the only major economy to grow in 2020, and it recently reported 4.9% growth in its gross domestic product in the third quarter of 2020 compared with the same period of 2019.
Guo said that Fosun has seen a significant rebound in Chinese tourism revenue, because of a boom in domestic travel.
China’s recent weeklong October holiday, Chinese travelers made roughly 637 million trips in China, slightly down from 782 million trips in 2019.
Guo said that 2020 revenue at a few Fosun hotels in China has already surpassed 2019 levels. For instance, Fosun’s Atlantis Sanya hotel, located on China’s beach island destination of Hainan, has seen revenue jump 30% this year compared with last.
A full recovery for Fosun will not be possible until the pandemic is brought to an end and cross-border travel routes reopen, Guo said.
“We hope we can end the pandemic soon,” he said, referring to Fosun’s promising vaccine candidate.


fortune--2020-10-27--An all-you-can-fly pass? One airline says the model meets the demands of COVID-era travel

The travel industry has been decimated by the pandemic, as governments worldwide implement strict lockdown measures to prevent contagion. But AirAsia.com CEO Karen Chan remains remarkably optimistic.
“If you don’t see a silver lining, you have to go and create one,” Chan told the Fortune Global Forum on Tuesday. Airline operator AirAsia is seeking its silver lining by expanding into hotel booking and mobility services in an effort to rebrand itself as an online travel agent “supported by an airline.”
Those new areas of focus will better serve domestic travelers, who currently occupy a larger segment of the travel market than international tourists. International travel is unlikely to return to its pre-pandemic levels for at least six months, Chan said.
Already, a number of countries around Asia have opened up so-called green channels, which typically waive quarantine requirements for business travelers under certain circumstances. Chan said Malaysia-based AirAsia worked with the government in Kuala Lumpur to negotiate such a channel between Malaysia and Singapore.
Now governments are moving to introduce “travel bubbles”—or an agreement between two destinations that allows all residents to travel without quarantine. Hong Kong and Singapore are currently discussing how to implement such a scheme. With a combined population of some 12 million, the Hong Kong–Singapore travel bubble could become the most significant quarantine-free travel arrangement to date.
But many countries that appeared to have the pandemic under control at one point this year later experienced sudden surges in case numbers. So even a travel bubble will be subject to change. Chan said AirAsia has prepared for this uncertainty by launching a new subscription-like model for air tickets called an “unlimited flight pass.”
“We understand that with the COVID situation consumers want flexibility. They want date changes without being penalized and having to pay processing fees,” Chan said. The new service lets customers pay once to fly as many times as they please over the following 12 months.
According to Chan, AirAsia has already sold close to 200,000 of the passes in both Thailand and Malaysia, and the company is looking to expand the service to other markets. “It has really taken off,” Chan said.


fortune--2020-10-27--CEO Anthony Tan says Grab is partnering with Microsoft to re-skill drivers

Singapore-based Grab—one of Southeast Asia’s largest services-on-demand apps—is partnering with Microsoft to run several tech training programs in Singapore to reskill its ride-hailing drivers so they can find new jobs in the digital economy.
“We’re offering a train-and-place program to help interested drivers train and switch to entry-level software development roles,” Grab CEO Anthony Tan said at the Fortune Global Forum on Tuesday.
The initiative also aims to “boost digital literacy” for up to 5,000 of Grab’s drivers and train 250 university students in A.I. skills for job positions that Grab expects to make available. Microsoft has helped create the syllabus for the students and has also made its e-learning digital literacy modules available to Grab’s drivers.
According to Grab Singapore’s own survey, 70% of its drivers intend to stop driving after just two years. Tan says the purpose of the initiative is to spread the benefits of the growing digital economy to more people as Singapore “upskills.”
Singapore has been on a “digitalization” drive for six years, ever since Prime Minister Lee Hsien Loong launched a “smart nation” initiative. The government-led scheme is similar to Germany’s Industry 4.0 campaign in that it seeks to upgrade the city’s manufacturing industry.
But Singapore wants to weave technology into every corner of its economy and, to that end, Grab has been pivotal. The multipurpose app, which started as an Uber-like ride-hailing platform, now provides payment, sales, and financing options to millions across Southeast Asia, where roughly 75% of people are unbanked.
Tan says that Grab has brought “income opportunities” to over 9 million owners of micro businesses—companies with fewer than five employees—by providing either financing or a platform on which to facilitate transactions. Tan says he hopes the app can help bridge Southeast Asia’s “income divide,” which has been exacerbated and exposed by the pandemic.
In Singapore, for example, observers initially hailed the city’s containment of COVID-19 as exemplary, with case numbers kept in the hundreds. But in April, news reports revealed that the government’s coronavirus response had largely ignored the thousands of migrant workers who drive Singapore’s manufacturing industry.
COVID-19 spread unchecked among the migrant community, which lives in cramped dormitories. The outbreaks ignited a citywide epidemic that prompted the government to enforce even stricter lockdown provisions. As of Tuesday, Singapore’s accumulated case numbers totaled nearly 58,000, with 28 deaths.
“This has been a very unequal crisis, and we, collectively, need to respond,” Tan says. “What we choose today—to help or not—will have a multigenerational ripple effect.”
This story was updated to show that Tan’s remarks about an “income divide” referred to Southeast Asia.


fortune--2020-10-27--Top Indian drugmaker wants to increase production of COVID vaccine by 70%

Cadila Healthcare Ltd., one of two Indian drugmakers racing to develop an indigenous COVID-19 vaccine, is in talks with potential partners to ramp up production capacity if its candidate passes human clinical trials.
The Ahmedabad-based firm is looking to hire contract manufacturers for an additional 50 million to 70 million doses of its plasmid DNA vaccine, on top of the 100 million that will come from its own capacity, according to Managing Director Sharvil Patel. He declined to name the companies and the amount Cadila has invested in developing the vaccine.
“We’re just waiting for phase II to push that part of the process,” Patel, the 42-year-old, third-generation head of family-owned Cadila, said in a phone interview. “We have a lot of interest from people who want to use it for other countries and we will license it out for other markets and countries so we can have more manufacturing beyond India.”
Obtaining and delivering a safe vaccine is a major priority for Prime Minister Narendra Modi in a nation with the world’s largest number of infections after the U.S. While a government-backed scientific panel last week predicted that the South Asian country is past the peak of infections and may contain the spread by February, many are concerned of further spikes as a festival season commences ahead of densely populated north India’s cold and polluted winter.
Cadila, which also produces coronavirus treatments such as remdesivir, is among a number of Indian companies holding vaccine trials.
While Cadila’s plasmid DNA candidate doesn’t use an infectious agent, like other vaccines, and instead introduces the DNA sequence encoding the antigen, the other tests being done are for traditional delivery methods.
The Serum Institute of India Pvt., the world’s largest vaccine manufacturer, is conducting tests for the candidate developed by Oxford University. Dr Reddy’s Laboratories Ltd. plans to distribute the Russian vaccine in India after conducting final-stage human trials and receiving regulatory approval.
Trial Recruitment
Both Cadila and Bharat Biotech International Ltd., the other Indian drugmaker developing its own indigenous vaccine, are currently conducting second-phase human trial stages. By the end of November, Patel expects to see data from the tests that have enrolled more than 1,000 people.
If the results are promising, Cadila will begin recruitment in December of more than 30,000 people for final-stage trials. Patel said that process will likely take two to three months and that he doesn’t expect many delays from Indian regulators.
“The regulators themselves are working faster, which is a good thing,” Patel said.
Vaccine Distribution
The government has also set aside about 500 billion rupees ($7 billion) to vaccinate the world’s second-most populous country, according to people with knowledge of the matter.
Adar Poonawalla, the head of the Serum Institute, has predicted India would need about 800 billion rupees to procure and inoculate people across the South Asian nation. Apart from buying the treatment, industry executives and experts have also voiced concern over India’s ability to store and transport vaccines across the vast country of about 1.3 billion people.
Patel declined to comment on whether he thought 500 billion rupees would suffice, but said he wasn’t worried about potential delivery and cold-chain storage bottlenecks given that vaccine supply will initially be restricted to priority areas and those at high risk.
“It should be manageable,” he said, noting that Cadila’s shots will have low cold-chain storage requirements making them easier to transport. “It’s going to be a couple of years process,” Patel said. “Once it becomes open markets, then we have to see whether it can reach every nook and cranny of every part of the country.”


fortune--2020-10-27--The moment CVS transformed into a different kind of health care company

Larry Merlo knows the moment that CVS became CVS Health.
The CEO of a company that now combines a massive pharmacy chain with in-store retail options and a health insurance juggernaut to boot, Merlo pinpointed a critical moment of transformation during a conversation with Fortune editor-in-chief Clifton Leaf at the virtual Fortune Global Forum conference on Monday.
No, it wasn’t the mammoth $69 billion merger with insurer Aetna. The pivot began six years ago, and long before that megadeal, when CVS made the decision to discontinue sales of cigarettes and tobacco products.
“It’s a great story in the evolution of our company. We looked at our strategy at that time in terms of becoming more of a health services company,” said Merlo. “We had our CVS pharmacies; we had CVS Caremark as a leading pharmacy benefit management company; we were opening our retail clinics branded as MinuteClinic.”
With that cascade of changes, meant to provide broader medical services than simply being a place to refill your prescriptions, came a moment of reckoning wrought by discussions with potential health care partners.
“I could remember many of those discussions would be around halfway or two-thirds of the way through the discussion,” Merlo recalled, “and someone would say, ‘But don’t you guys sell tobacco at your CVS pharmacies?’ And that’s where you want to to crawl under the table, because there was really not a good response to that other than the economics associated with selling tobacco, which was a direct contradiction of our strategy.”
That commendable public health decision cost CVS some $2 billion in revenues. But it paved the way for the company to walk the talk and brought it closer to its long-term goal of becoming a front porch for community health services, including wide-scale coronavirus testing and, eventually, distribution of COVID-19 vaccines once one or more reach the market.
Merlo said that more than 5 million people have come to CVS Health facilities for COVID diagnostics. And the company is going to be a major link in the supply chain when a vaccine comes through.
“We were selected by the government to become an important part of the solution in making sure that the vaccine, once it’s available, is administered to long-term-care facilities, nursing homes, [and] assisted living facilities, where we have our country’s most vulnerable patients,” he said.


fortune--2020-10-27--How energy companies can combat climate change

Energy companies today face a central dilemma: providing consumers with a reliable energy source without exacerbating climate change.
“Energy is your access to a decent life,” Jean-Pascal Tricoire, chairman and chief executive of multinational energy company Schneider Electric, said at the Fortune Global Forum on Monday.
Tricoire laid out Schneider’s challenge—how to increase global access to energy while resolving “the deadlock” of climate change.
“On the one side, more people must have access to energy, which means energy consumption will increase in the next 20 years,” Tricoire said.
At the same time, he added, we need to cut emissions in half to combat climate change, “and climate change is about carbon emissions, and carbon emissions is about energy.”
For Tricoire, shifting from fossil fuels to electric power is a large part of the solution. “The future of energy is electricity,” he said.
One of the biggest drivers of energy migration from fossil fuels to electricity, Tricoire said, will be electric vehicles.
“Electricity is the only vector of energy consumption that allows decarbonization,” Tricoire said. “From a solar panel to a motor you’ve got no losses, and it’s carbon-free.”
Another sector that will drive the switch from fossil fuels to electric, which Tricoire says is discussed much less, will be the heating and cooling used for buildings. And rather than constructing new projects, a lot of the work will consist of retrofitting existing infrastructure to make it more sustainable.
“The problem is not the new construction. The problem is to retrofit 99% of what creates issues, which are existing buildings, existing manufacturing,” Tricoire said. He gave the example of the destructive wildfires in California, which in previous years have been sparked by power lines in electrical networks that Tricoire said needed retrofitting.
Globally, Tricoire expects that “we’re going to invest as much in electricity in the next 20 years as we’ve done since the beginning of electricity.”


fortune--2020-10-27--ADM’s Luciano talks COVID’s impact on global food supply chain

The coronavirus pandemic has forced companies worldwide to recalibrate on the fly—with those in supply-chain-sensitive sectors especially feeling the virus’s disruptive impact.
As one of the largest food and agricultural processing corporations, Archer Daniels Midland—also known as ADM—has experienced these dynamics firsthand, chairman and CEO Juan R. Luciano said during this year’s virtual edition of the Fortune Global Forum on Monday.
But as Luciano noted, the Chicago-based company can rely on more than a century’s worth of experience to know that such issues are part and parcel of doing business in an unpredictable, evolving world—and that it must be prepared to manage such hurdles accordingly.
“Most people take for granted that food will show up,” Luciano told Fortune senior editor Beth Kowitt. “We can’t, and we have that responsibility. We have been doing that for 118 years.”
As Luciano put it, ADM regularly has to account for developments as varied as weather-related events and political regime changes—and a global pandemic, while far less common, is no exception. “That’s what our company does: It adjusts constantly,” he said. “That’s why we can be around for 118 years.”
Of course, the pandemic has offered a unique set of challenges for ADM to navigate. “There were a lot of realignments,” Luciano recalled of COVID-19’s initial impact this past spring, when huge swaths of the global economy were forced into lockdown. He noted how food supply demand “shifted so dramatically,” from food services operators, like restaurants and caterers, to retail outlets, like grocery stores.
But ADM was able to benefit from its position as a multinational operator—parlaying what it saw and learned from the virus’s earliest hot zones in Asia to inform its response once it spread to Europe and the Americas. “Because we’re a global company, we saw the [spread] of the virus from east to west,” Luciano said. “We already knew a lot of the things we had to do in Europe, given the experience in Asia.”
Looking to the future, Luciano talked of the potential that scientific developments in food and agriculture—partially spurred by heightened consumer demand for products that promote health and wellness—will have on ADM’s industry.
“It’s brought about an era of transformation in food and beverage,” he said, citing the emergence of plant-based proteins as a substitute for meat. He also talked up the “potential of microbial fermentation” as a transformative alternative to traditional means of agriculture that are more time- and cost-intensive.
“It takes about four hours for a microbe to double in size,” Luciano noted. “The potential of those technologies to increase the carrying capacity of our planet is immense, and I think it deserves much more research dollars.”


fortune--2020-10-28--Microsoft’s cloud could be a bit foggy for the next quarter

Microsoft reported strong sales growth during its most recent quarter, but a weaker-than-expected guidance for the current quarter muted investor enthusiasm.
The business technology giant said on Tuesday that its sales grew 12% year-over-year to $37.2 billion in the quarter ending Sep. 30. The company said its profits grew 30% to $13.9 billion during the same period.
However, Microsoft said that it would have $39.5 billion to $40.4 billion in sales in its current quarter, which was below analyst estimates of $40.43 billion.
As a result, Microsoft shares fell nearly 2% in after-hours trading to $209.10. Microsoft shares have gained nearly 48% over the past year.
In a conference call with analysts, Microsoft executives downplayed the idea that the disappointing guidance signals that companies are spending less on IT services during the coronavirus pandemic. Instead, Microsoft chief financial officer Amy Hood attributed the slower-than-expected growth to big unspecified Azure cloud computing contracts that will take take time to close and that it would therefore be difficult to factor them into a prediction of future sales.
Nevertheless, analysts on the conference call were generally unconcerned about the weaker-than-expected guidance and instead were excited about Microsoft’s strong financial performance during a time of economic instability.
Microsoft’s Azure cloud computing business grew 48% year-over-year from an unspecified base, which pleased the analysts, who consider that business core to the company’s future.
Piper Sandler analyst Brent Bracelin, for instance, mentioned twice during a question on the call that he suspected Azure’s sales have, for the first time, exceeded those of Microsoft’s once core Windows operating system software. Bracelin considered this to be an “important milestone” for the company.
But the Microsoft executives ignored that portion of the analyst’s question, and instead explained why they believed all of Microsoft’s products are useful to companies looking to upgrade their digital infrastructure.
“We are still in early innings,” Nadella said about cloud computing adoption among companies.


fortune--2020-10-28--Political cynicism has given way to love in Christian America

Cynicism has been trending in America.
In 2016 Donald Trump appealed to a jaded electorate by suggesting that his propensity to donate to both parties was not a sign of lacking principles but instead an appeal to the lowest common denominator. Everyone could be bought, Trump suggested, even though the businessman himself was still trying to work his way back to the fortune he’d inherited from his father’s vast array of low-rent housing. Unless he shuffled his money around, and maybe got some government funds, Trump couldn’t afford to buy anyone.
For years wealthy Americans had seen Trump as the gilded duck paddling along on a sea of faux-reality prestige. Scratch his gold-plated toilets and find cheap plastic. Look beneath the surface and you’d see him sweating and paddling to outrun tax bills and bankruptcies and vast foreign debt.
Like most of us, Trump’s presentation of himself differed from the man he was in actuality. Instead of Instagram filters he used tax lawyers and shady Russian billionaires and easily manipulated athletes and sports team owners to present an airbrushed profile to a naive world.
All of this was relatively harmless until Trump’s grand delusion came to Washington, a contagion of hatred and cynicism.
I spent 2018 traveling the country, interviewing the voters who’d made a cynical, Trumpian bargain in 2016, most of them conservative Christians. They were cynical for good reason. American Christians had watched their churches and their pastors become big business, just as those same church leaders fell like dominoes in sexual abuse and financial impropriety scandals, many during the years of Trump’s presidency.
These voters told me that they’d watched opioids ravage their blue-collar communities, hills, hollers, and farm fields, while pharmaceutical companies rubbed elbows with regulators and laughed on their way to the shareholders’ meeting. They’d seen local business owners grow wealthier and wealthier as local plants and American companies uprooted for cheap labor in Mexico, Asia, or Central America. They’d heard politicians pay lip service to caring for American families and American children while raiding school budgets to pay for bloated favors to lobbyists and campaign contributors.
They figured if everyone was lying, at least they could elect a liar who claimed he’d lie for them.
Since 2018, I’ve been talking about my research at churches, libraries, and universities, and more recently on Zoom across the globe, mostly in the American South and the Midwest. I also serve as solo pastor of a small-town Lutheran church in the rural Midwest, where Trump won the county by 38 points.
Don’t get me wrong, I still hear a lot of cynicism. But especially given the ravages of the global pandemic, which is currently romping through the heartland and our rural communities, I hear a lot more love. I hear about people making sacrifices to keep our church going: Elderly parishioners join Facebook to watch live-streamed services; farmers share equipment to bring in the harvest; prayers rise up each and every day for anyone in the community who’s suffering and in need of support, including a local family whose teenage son died by suicide, a young boy diagnosed with cancer, and a resident of the local nursing home who tested positive for COVID-19.
As a pastor, my gift and challenge is to dwell deeply with people in times of great joy and times of great sorrow. Early in the pandemic, I led a small, family-only graveside service for a military veteran and farmer. The virus hung in the air, but so did a family’s shared love, and that love overcame the masks and social distance to speak loudly into the void. At root, everyone wanted to be better. Most people want to love each other, not hate each other.
In moments like these—at the graveside, in the hospital room, around the dinner table, riding the combine—cynicism rings hollow. American Christians may have chosen cynicism in 2016, but cynicism is the antithesis of the Christian faith, and cynicism won’t have the final word in America, either.
In ICU wards across America, in family homes where parents facilitate online learning, on factory floors, and in high school band rooms where each player gets their own bubble to play music again, a national cynicism has given way in America to anger, bitterness, hatred, conspiracy theories, and—in a quiet whisper in the back of the room—love.
While we watched our fellow Americans die breathless on ventilators in New York City, and George Floyd struggled for breath beneath a police officer’s knee in Minneapolis, you could feel something else start to die, too, in the heart-wrenching and deadly year of 2020. Every time someone tried to be cynical about COVID-19, sanctity of life sat down quietly next to them and shamed them for their inhumanity: Trump included.
Every time an angry man shouted, “You’re going to vote for someone who kills babies!” millions of American parents, and aunts and uncles and friends and human beings, looked one another in the eyes and made a silent agreement.
We had tried cynicism, and anger, and outrage, and disgust. We decided we weren’t going to listen anymore to the shouting cynics, to the foreign bots in a warehouse overseas paid to inflame our hatred of one another.
We agreed, millions of us, including those who voted for Trump in 2016, that this time we’d tune out the cynicism so that maybe we could hear the love and keep our lives.
Angela Denker is the author of Red State Christians: Understanding the Voters Who Elected Donald Trump and pastor of Grace Lutheran Church in Brownton, Minn. Follow her on Twitter.


fortune--2020-10-27--Ray Dalio on why Chinese capitalism is on the rise—and why American capitalism is in desperate need

Ray Dalio on why Chinese capitalism is on the rise—and why American capitalism is in desperate need of a fix

As head of the world’s largest hedge fund, Bridgewater Associates, Ray Dalio has witnessed firsthand China’s rise into a global economic superpower.
“I’ve been going to China regularly since 1984; I know the people, I’m intimately involved with economic policymakers [there],” Dalio said Tuesday during this year’s virtual edition of the Fortune Global Forum.
Having developed an “intimate understanding” of the Chinese economy and witnessed how the country has gradually opened up its markets to the rest of the world, Dalio believes China is well on its way to superseding the U.S. in terms of economic growth and potential in the coming years—a topic he expounds on in his upcoming book, The Changing World Order: Why Nations Succeed and Fail.
“It’s called state capitalism, but they’ll produce more billionaires [than the U.S.],” Dalio said. “I think capitalism and the development of the capital markets could, in a few years, be more embraced in China than they are in the U.S.”
For Dalio, the proof is in the remarkable development of China’s workforce and talent pool, and how economic growth has gradually translated into a better educated, more prosperous society. “Since I started going there, per-capita incomes have increased by 30 times,” he noted. “They’re putting out eight times as many computer engineers and STEM [science, technology, engineering, and mathematics] graduates. It’s a place where there is a vibrancy, a creativity, and a development of capital markets.”
That development is set to continue as the country’s capital markets continue to mature. Dalio projected that roughly 40% of new initial public offerings will soon be “raised by Chinese companies, on Chinese exchanges”—and that, in turn, will lead to more institutional investors around the world deciding to pour more of their money into Chinese markets. “The capital flow picture is more attractive,” Dalio said, adding that right now, “the world is underweight in Chinese assets.”
The flipside to that is an American economy increasingly marked by economic inequality, and an American society that has suffered for it, according to Dalio. “I grew up in an era—I was born in 1949—where equal opportunity and broad-based outcomes were the benefit,” he said. “I could go to a public school, my parents took care of me, and I came up in a world of equal opportunity.”
Opportunity is much less equitably distributed in the U.S. these days, Dalio noted. “If that’s the goal, and we’re trying to measure ourselves against that goal, I think there’s a real problem here,” he said. Dalio cited the state of public schools in his home state of Connecticut, where his own research found that one of the largest wealth gaps in the country had resulted in a self-perpetuating “cycle” in which the top 40% of households “spent five times as much money on their children’s education than those in the bottom 60%.”
So while capitalism has proven a historically adept method for the creation of wealth and prosperity, Dalio believes there are serious fixes in order for the American variety. “We want to keep capitalism—it’s an effective resource,” he said. “But if it isn’t totally effective, it has to be dealt with.”
And if those inequalities in our society aren’t addressed, Dalio warned of potentially dire repercussions to come. “That needs to be dealt with and figured out,” he stressed. “Otherwise, we’re going to have a civil war or revolution of some form.”


fortune--2020-10-27--Reddit will pay U.S. employees the same wherever they work

Reddit will give employees, with some exceptions, the flexibility to work outside of offices going forward, the company said Tuesday in a blog post.
U.S. employees will now be paid the same, based on high-cost locations like NY or San Francisco, whether they work from those places or not.
“Moving forward, teams and team members will have flexibility to explore where they work: in the office, remotely, or a combination of the two,” the post said.
For those who do come into the office, the spaces will be look different: Reddit said it’s “reimagining” its office space, without fixed desks and with “neighborhoods” for teams to work together. The newly flexible approach will help Reddit bring in top talent without concerns about relocations, increase workers’ engagement and make their office space more efficient.
Several tech firms, including Facebook and Slack, have said during the pandemic that their workers are free to relocate and work remotely going forward, but they will be paid based on where they live. Stripe Inc. said that it would pay employees who relocate from the Bay Area or New York a one-time bonus of $20,000 – but they’d also get a pay cut of as much as 10%. Brex, a fintech company based in San Francisco, has also outlined salary reductions for employees who move out of the Bay Area and New York to places like Austin, Texas or Utah.
“We will not be afraid to continuously adapt and evolve our workforce philosophies, programs, and processes,” Reddit’s post stated.


fortune--2020-10-27--The COVID vaccine timeline: Where the candidates are now—and what’s still to come

The mad dash to create and manufacture a COVID vaccine isn’t quite over. But the beginning of the end may be somewhere in sight.
By late September, four large-scale, late-stage clinical trials were underway for a COVID-19 shot in the United States. These include a candidate from Pfizer and German partner BioNTech (BNT162); Johnson & Johnson drug arm Janssen’s own experimental therapy (JNJ-78436725); one from biotech Moderna (mRNA-1273); and British drugmaker AstraZeneca’s AZD1222.
“Four COVID-19 vaccine candidates are in Phase III clinical testing in the United States just over eight months after SARS-CoV-2 was identified,” said NIAID director Anthony S. Fauci once the Johnson & Johnson trial began enrollment. “This is an unprecedented feat for the scientific community made possible by decades of progress in vaccine technology and a coordinated, strategic approach across government, industry, and academia.”
But the road to developing a vaccine isn’t easy and comes with the risks of the scientifically unexpected, as evidenced by a Food and Drug Administration (FDA) temporary halt on Johnson & Johnson’s and AstraZeneca’s Phase III studies. Those studies have since resumed after a safety commission determined that side effects and illnesses in some study participants were unrelated to the vaccines.
These trials are massive undertakings, and the companies are fast reaching, if they haven’t already reached, their enrollment goals. For instance, last week Moderna announced it had completed enrollment of 30,000 people in its trial. Pfizer said during an earnings call on Tuesday that it had enrolled 42,000 people, 36,000 of whom have already received the necessary second dose of the vaccine. The company aims to enroll another 2,000 participants.
AstraZeneca and Johnson & Johnson have now resumed enrollment after the temporary halt, and the companies have said they’re aiming to recruit up to 30,000 adults in the U.S. and 60,000 people in multiple countries, respectively.
The coming weeks and months will be critical for these companies jockeying to be first in the COVID race. While Pfizer CEO Albert Bourla has previously said that interim data on how effective its candidate is would come before November, he admitted on Tuesday that it’s now unlikely to come before the third week of November.
Should the data prove promising, the company could apply for an FDA emergency use authorization (EUA) as soon as the fourth week of November.
“And then it is up to the FDA to examine the file and decide if they’re going to give us authorization and how long it would take them poring through this file,” Bourla said during an interview at the Fortune Global Forum virtual conference on Tuesday.
Other companies may take longer as the FDA has a variety of requirements before accepting applications for emergency use, including following up with patients for two months to make sure the vaccines are safe before submitting a filing.
And even once a product has an emergency authorization, which could take at least two to three weeks after the FDA has received a drugmaker’s application, it wouldn’t be available for mass commercial distribution for just anyone. It would likely take until the middle of next year until that’s a possibility, while in the meantime a potential vaccine given emergency authorization would likely be routed to the highest-risk populations.


fortune--2020-10-27--International air travel might not recover before 2024, Raytheon CEO warns

The coronavirus pandemic will continue hurting the aviation industry for at least three more years, and possibly longer, Raytheon Technologies CEO Gregory Hayes warned on Tuesday.
“Domestic air travel is going to take several years to recover. The more problematic piece I think is international air travel,” he said during an interview at the virtual Fortune Global Forum. “I think that’s 2023, maybe early ’24, before we finally see a recovery.”
Hayes’ warning Tuesday is even more grim than his recent predictions regarding international air travel. He’s now echoing the International Air Transport Association (IATA), which this summer forecast that global passenger traffic would not return to 2019, pre-pandemic levels before 2024.
COVID-19’s global slowdown of the travel and aviation industries has hurt many large airlines and their suppliers, including Raytheon. The aerospace giant in September said that it was cutting 15,000 jobs as a result of the downturn in commercial air travel.
Hayes, who in April finalized United Technologies’ takeover of Raytheon Co., also said that he’s worrying about the pandemic’s impact on his company’s remote workforce and their long-term innovation. Working from home has boosted his employees’ productivity, but “while we’re getting work done, it’s not the same as being together and innovating,” he says.
Raytheon generally develops between 500 and 600 new patents a year—but this year, the company’s patent applications are down about 50%, Hayes said.
“We do some of the most complicated systems in the world. Whether it’s a radar, whether it’s a jet engine, whether it’s a cyber program—those things require close collaboration” from people who are physically in the same room together, Hayes said. “We’re not falling behind anywhere. But it’s an issue for us.”


fortune--2020-10-27--USPS says timely vote delivery isn’t a constitutional right

Delivery delays during an election can’t be unlawful, because the Constitution doesn’t guarantee states any particular level of service when it comes to mail-in ballots, the U.S. Postal Service told a federal judge.
Postmaster General Louis DeJoy and President Donald Trump are seeking dismissal of a lawsuit brought by New York and other states that claim disruptive changes at the USPS over the summer are violating the Elections Clause of the Constitution by putting election mail at risk.
The Justice Department argued in a court filing Tuesday in Washington that the clause can’t restrict government agencies from carrying out operational changes or other activity that “may have an incidental impact” on voting.
The states’ theory “assumes that because the plaintiff states crafted their election laws with the expectation that USPS will provide a certain level of service, they now have a constitutional right to expect that level of service,” the U.S. said. The clause “does not shield states from any and all external circumstances that may impact state elections.”
Court Clash
The USPS was responding to an Oct. 19 letter to the court from New York Attorney General Letitia James, who argued the delays threaten the timely delivery of about 7 million ballots out of an estimated 80 million.
The changes, including the dismantling of hundreds of high-speed mail-sorting machines and cuts to overtime and late delivery trips, triggered several lawsuits and nationwide injunctions against the USPS.
But the court orders haven’t reversed the service delays, and Republicans and Democrats have been left to clash in courts across the country over rules for accepting ballots that arrive late even if they’re postmarked by Nov. 3.
James said in her letter that it’s a violation of the Elections Clause “for the Postal Service to take actions that are intended to, and do, have the effect of hampering state election administration.”
Trump and DeJoy
The U.S. said in its filing that state lawmakers can change the rules for accepting ballots if they’re worried about delivery delays, although Republican legislatures have largely resisted such efforts.
“The states remain free to alter their policies to account for any fears over the performance of USPS,” it said.
The Postal Service also blasted the states for suggesting that Trump’s negative comments about mail-in voting — including claims, without evidence, that the practice leads to widespread fraud — had anything to do with the changes put in place by DeJoy, a longtime Republican donor with no previous USPS experience.
The states “submit no evidence connecting these statements to the alleged USPS policy changes at issue,” it said. “Indeed, they do not cite to a single piece of evidence in the record suggesting that any of these alleged policy changes took place at the behest of the President.”
A judge handling another USPS case ruled in September that it was “easy to conclude” that DeJoy’s changes were intended to disrupt and challenge the legitimacy of the coming election, and that voter disenfranchisement was “at the heart” of the policies.
The case is New York v. Trump, 20-cv-2340, U.S. District Court, District of Columbia (Washington).


fortune--2020-10-27--Delta CEO: The return of both middle seats and business travel is inevitable

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Delta’s decision to block off middle seats is paying off—for now.
Despite having 30% fewer seats available for sale than the industry average because of its commitment to keeping passengers socially distanced, Delta Air Lines earned 3% more aggregate passenger revenue than its average competitor in Q3, according to CEO Ed Bastian.
From Bastian’s perspective, who spoke at the virtual Fortune Global Forum on Tuesday, such a feat is a reflection of the consumer trust the airline has cultivated throughout the pandemic. But it’s also unsustainable.
“It’s going to take some time before customers are confident sitting next to people on a crowded flight, and at Delta we want to give them a little bit more time—certainly into the new year—to evaluate that for themselves,” Bastian said. The company has stated it will block middle seats through at least Jan. 6. “Obviously, our business model doesn’t work blocking middle seats forever,” Bastian continued, “but we have the ability to continue to manage that for the next few months.”
While Delta may be seeing continued improvement from the dismal 90% reduction in business it suffered in Q2, the company is still expecting to lose $10 million to 12 million a day in this final quarter of the year. And even with a vaccine potentially on its way, Bastian is wary that a return to pre-pandemic revenue levels and travel rates is not as imminent as airlines might hope.
“Unfortunately, there are a lot of people that haven’t been traveling by air for an extended period of time,” Bastian said. “And it’s going to take them a while before those old behaviors become the new patterns that we can anticipate.”
Still, Bastian is confident that neither business nor international travel is gone for good. Eventually, he believes, companies will realize that true human connection cannot be replicated over a computer screen.
“Every crisis, whether it’s 9/11 or the Gulf War in the ’90s or the recession in the 2010 timeframe, people have always said business travel is never going to return to where it was,” Bastian said. “It’s the first thing companies chop because it’s discretionary, but it’s also one of the fastest things to come back when people feel ready and safe to travel.”
As far as international travel goes, Bastian said he believes it will be the availability of point-of-care testing, rather than a vaccine, that brings back overseas flights.
“We could test you before you go; we know we could test you when you land and make it as convenient as possible,” Bastian said. “I’m optimistic that we’re going to find some solutions before the end of the year to get international flights open again.”
For now, Bastian is trying to focus on a silver lining.
“The world feels more distant and isolated than ever, and that’s our business,” Bastian said. “Our business is bringing the world together, and we know once we get through this next year, with medical advancements and technology being the key to it, people are going to feel comfortable traveling and are going to want our product more than ever.”