fortune--2020-04-26--“Every mayor will tell you they’re being overwhelmed by good intentions”—A Q&A with Steve Davis on c

“Every mayor will tell you they’re being overwhelmed by good intentions”—A Q&A with Steve Davis on coronavirus efforts

Steve Davis stepped down from his role as the CEO of PATH, the Seattle-based global health nonprofit with operations in more than 70 countries, at the end of 2019. But Davis, who is a lecturer on social innovation at Stanford University and just finished writing a book, quickly found himself fighting on multiple fronts in the world’s battle against COVID-19.
A co-chair of the World Health Organization’s digital health technical advisory group, Davis has been active in supporting the global body’s pandemic response efforts. A member of the Center for Strategic and International Studies Commission on Strengthening America’s Health Security, Davis was also involved in briefing US political leadership on the novel coronavirus in early February. In Seattle, he’s deeply involved, too, in part through the work of Challenge Seattle which has brought together the public and private sectors to support the city’s efforts. (Read Fortune’s feature on Seattle’s pandemic response here.)
Davis spoke to Fortune earlier this month about the pandemic, the problem of too many well-intentioned tech companies, and the urgent need to share—rather than reinvent—local outbreak response strategies.
This interview has been edited for clarity and length.
How have you been involved in responding to this pandemic?
I’ve been pulled in, actually more than full time, between the regional response and the global response to the pandemic. Regionally, as a Challenge Seattle member and engaging with the former governor and the mayor and political leaders on a wide range of things to help organize. And then globally, I’ve spent most of my time because I’m the co-chair of WHO’s digital health technical advisory group. Dr. Tedros [Adhanom, Director-General of the WHO] asked me to come to Geneva a couple months ago when this started breaking out but I chose happily to stay and do Zoom calls in Seattle and not in a hotel in Geneva. So I’m mainly working with the WHO and a variety of others on private sector engagement and tech company engagement. There are a lot of offers to help, which is wonderful, but there needs to be some coherence there.
Tell us about the WHO work. What are you seeing in terms of technology and its role in supporting this pandemic response?
This has truly been a phenomenal digital pandemic. Everyone is on Zoom and online education and all that, but also the ways that we’re able to bring the full arsenal of digital tools against it—everything from the modeling and predictive tools, everybody knows how to visualize the flattening curve, to a lot of interesting telemedicine tools and contract tracing tools.
I’ve been the co-chair of this commission for six months or so. Through the chief scientific officer, Dr. Soumya Swaminathan, we’re engaged in calls working with a great group of people from around the world. As COVID started becoming more apparent around the first of the year—the people from China on the commission were fully on COVID then—we were very aware that there was a lot to be done. And by January or early February, we were pivoting our conversations—What do we need to be doing? How do we set ourselves up? It became apparent that this was getting to be a bigger and bigger problem globally, and the next thing I knew I was pretty much doing this full time.
Our goal has really been, one, to provide advice to really help support the strategic response by WHO and member states around the world in terms of what kind of digital and data capabilities they need and what tools are out there. We’re creating a clearinghouse to make it more accessible, particularly as we go into more vulnerable states and resource-poor settings where this is certainly going to emerge even worse. So, how do we keep from reinventing the wheel and everybody creating their own tool?
The other is bringing together private sector leaders in technology. We held a roundtable I helped chair a couple weeks ago to have a serious conversation. A lot of people are offering to do all sorts of things. There’s no lack of enthusiasm and willingness. But we need to create a stronger agenda on what’s really needed because it’s somewhat of—you’d almost call it a luxury problem. We have so many ideas and big companies, small companies, hackers, social entrepreneurs saying, ‘Here’s this tool’, ‘Here’s this tool,’ ‘I’ve developed this app.’ It has the risk of being a liability. African ministers of health are saying, ‘We don’t even know where to start, and we’re going to Twitter to figure out what works.’ And that’s across not just patient-facing things like contact tracing or testing, but it’s supply chain management, it’s communication to your citizens, the broad range of things that digital tools can help with.
How is the world managing that?
How they’re managing is pretty crazily to be honest. Every public health department or mayor will tell you that they’re being overwhelmed by good intentions. There are efforts, and we’re trying to do it at the global level, to create and/or support a network of clearinghouses. The state of California has launched something similar to say if you have ideas, bring them here, and then [we’ll] try to vet them. The problem, of course, is who and what is the qualification for vetting. This is where WHO gets involved because a lot of people want to be endorsed by WHO, and WHO simply doesn’t have the capacity at this moment to do a lot of that. We’re trying to figure out, how do we support this network of clearinghouses? A lot if it is fairly random. Here in Seattle, we’re lucky that the Department of Health is throwing those ideas over toward the Gates Foundation to say ‘Can you help us select here?’
What we don’t want to do and what we learned in the Ebola crisis really profoundly is that introducing a new tool or a new application, even if it’s really effective and cool, is not easy to do in the best circumstances. Anytime you do that, particularly at the systemic level, it requires a lot of change management and reeducation. Doing that in Africa in the middle of a pandemic is not easy to do at all. So one of the things we’re particularly keen on, while we appreciate all the new innovations, we’re trying to really support African ministers of health to say: What are the things that are already being used? And how can you leverage those where you’re not trying to introduce so much change management?’ That’s a critical area.
But then there’s been some really nice stories of success. Tencent in China developed a great app that is citizen-facing and quite comprehensive about the disease—what to do, what’s going on in the region, etc. Of course, they were able to do some things with their rules [in China] that we can’t do, but we’ve actually seen that app, based on our efforts, being deployed in Hindi and modified for the Indian context. And then we’ve actually connected it into what WHO has created so we’re seeing some aggregation or synthesis. But you can imagine the variety of things—I’m being pitched 10 or 15 times a day by people. Some pretty amazing ideas with some really good thinkers behind it. Some of it as fundamental as what is the simplest way to help contact tracers keep track of their material and make sure that data is interoperable with the health system.
How are you thinking about where we are in the course of this pandemic? And how do you expect the situation will play out, particularly in more vulnerable countries?
It’s the billion-dollar question. I’m not an epidemiologist. I thought that we would be facing this longer out. The rapid speed at which this really turned from, ‘Okay, there’s a problem over in China,’ into ‘Wow, look at what’s going on in the world,’ it’s just really extraordinary. Now, in hindsight, you think of epidemiology, we were probably naive about that. It wasn’t unpredictable at all. People have been saying this. I’ve been on studies and commissions, I’ve been on stages at Davos saying this stuff is going to happen. But, just suddenly it came and the bizarreness of it—you know it’s easy to sit as a privileged white guy here in Seattle on stages of Davos saying, ‘This is what we ought to do,’ but then suddenly I’m sitting and telling my own son he needs to wear a face mask to go to work today. That kind of pivot is really jarring and humbling and actually quite good for us in the long run to understand how this turned the world upside down.
But, along with most public health leaders, I’m very concerned about what this next wave looks like. We’re not going to have a vaccine for probably 18 months or so. Maybe there will be some breakthroughs, but I’ve been involved with PATH—we have the biggest portfolio of vaccines for the developing world—and it takes a long time to get them deployed. So, we’ve really got to double down on not just getting the vaccine but figuring out manufacturing ability and how billions of people get it quickly. It’ll take a while. What’s going on Africa and India and parts of South Asia—the good news is they’re jumping on it faster than we did by far. The U.S. will be seen as the outlier on almost every level at the end of this. We’re seeing our numbers of both deaths and cases are the highest in the world because we didn’t do what we needed to do as a country fast enough.
So the good news is, they’re on it. The problem is, as you can imagine, the context is just so different. Social distancing in a township in South Africa is pretty hard to do. The amount of testing capability is minimal. I think Bill Gates and others and I are very worried about this potential humanitarian crisis we face in the next six to 12 months. I was on a call of the [CSIS] commission with people who are very close to this piece of that puzzle, and they’re very worried that this could be a humanitarian crisis beyond what we’ve ever seen.
Are there lessons from recent Ebola outbreaks that are instructive for this moment?
I talk with colleagues from Africa about this every day. They say with Ebola we learned things like no matter what tool you’re using you need community engagement. It all starts there. We learned that the hard way over and over with Ebola where the SWAT team coming in is required, but unless you have a community supporting you and translating and interpreting what this means, the community can really reject it. The idea to be smart about how aggressive you are with new tools was really critical. You have to plug into existing infrastructure. With Ebola, we learned more than anything—I’m looking at it through a digital lens— the tool is great, but unless you’ve got human capacity and, and almost a culture of data that is authorized to actually make decisions based on data, it doesn’t matter how good your data tool is.
I don’t think Ebola is terribly instructive on a lot of the other pieces. We actually learned a little bit better about contact tracing there but this is such a different disease, the way it spreads and also frankly and happily it’s not as fatal. With Ebola, the fatality rate is so high once you get it, whereas here—I don’t mean to diminish the death at all—but it’s so much more about overwhelming the health system. That’s where the risk is in Africa.
How would you assess Seattle’s response?
There will be a million different reports and commissions and studies about who did what when and who is responsible, but certainly we waited too long. Everybody did. We didn’t realize, once the first case was exported here, just how sort of impossible it was going to be to contain it, which I think was the larger story.
I’m on a national health security commission—the [Center for Strategic & International Studies] has a bipartisan congressional commission on national security, and, on the day of the acquittal of Trump’s impeachment, we were having this odd hearing in the Senate hearing room with a variety of congressmen and senators. What was interesting is we were still talking to congressmen and senators of both parties and people from the administration that this idea that we’re going to contain this— we needed to move from containment strategy to mitigation. I think that idea that we could keep containing this somehow just permeated for too long almost everywhere in this country.
It happened here in Seattle, but then, I think, quickly once the Life Center cases started, there was a quick call like ‘Whoa, this is not going to go away.’ I think Seattle and Washington State will end up getting pretty good scores on pulling people together very quickly, getting some of the business community and the political community and the public health community aligned as much as that’s possible to do. Getting big businesses to get people to start staying home reasonably early. By early March or late February, I was on calls about PPE. So once it started and we got our act together, we flattened [the curve] pretty well. But it’s still out there, and it’s still a problem. I’m also part of the task force on the recovery plan. And it’s much harder, even in a state like Washington, to figure out how to open this up than to shut it down.
How are you thinking about the timing and process of recovery?
The governor is coordinating with governors of other states, but he’s really looking hard at balancing the economic issues and the public health issues. We’re fortunate in this state to have some really great leadership across the board. I give a lot of credit to the former governor [Challenge Seattle CEO Chris Gregoire]. But we also happen to be a place where you’ve got some great universities and great foundations and public health organizations. Our approach isn’t business versus public health—in fact, if you don’t do the public health right, it will hurt business. On the other hand, the business community has a voice. So we’re working with the governor’s office to try to recommend what is the right criteria and the right pace and the right approach for turning on the dials. It’s not a switch—it’s a bunch of dials.
We’re working also on how we set up a really rigorous testing and contact tracing capability that has more surge capacity. And we’re very concerned, just to be really clear, about the equity issues in all of this. This is already an epidemic that has super exposed the flaws in our own health systems— which show how a lot of vulnerable people don’t get services, aren’t getting insured. The numbers are beginning to show the demographics of this.
It’s much easier to say Microsoft go back on because you can all work from home, and that’s great. They’ll probably be working from home for quite a while, but it’s much harder to say mom-and-pop grocery or janitor, you can go back to work. So those things we really have to work on.
How will the contract tracing work?
It’s probably a little premature. That will be driven by the Department of Health, but there is a conversation to create some surge capacity, and we’re putting together a proposal that will rely on both professionals and volunteers. It’s going to require a committed workforce for a certain period of time. When you look around the country and what’s happening, there’s sort of a fortuitous thing about these kind of programs where you are kind of—I hate to say it—but are hitting two birds with one stone. We need to have a surge capacity for contact tracing, and it needs to be trained and managed by the Department of Health and overseen. But we also have a lot of people from community health centers and others that are laid off or unemployed right now, so trying to pivot that kind of workforce into this kind of work will be important.
Globally or locally, what issues are top of mind for you right now?
I do worry that this is a global pandemic—and thankfully global leadership is on it—but it’s playing out very, very much locally. One of the things we’re seeing is that the lack of connectivity between local solutions is slowing us down. I’m sitting here on the Washington State recovery plan, and we’re like, ‘Can we just like sit down with California or Massachusetts and Oregon and do it together?’ Obviously you can’t really do it that way, but we do need to do a better job right now—whether you’re talking about the recovery plan or sharing information about technology tools—because I think we’re just reinventing the wheel over and over and over and it’s painful. In a way it’s unavoidable in the middle of a crisis, but if I think as we go into this post-peak recovery, or whatever they want to call it, we need to bulk up our sharing and knowledge. Certainly we’re trying to encourage open sourcing of tools and things like that so everybody doesn’t have to reinvent.
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fortune--2020-04-26--A.I. will be crucial to companies outside of Silicon Valley—and they need a new playbook for it

“ Every mayor will tell you they ’ re being overwhelmed by good intentions ” —A Q & A with @ @ @ @ @

While artificial intelligence has become a ubiquitous topic in the business world, there is still important work to do to translate the promising experiments we see in the news to valuable and practical implementation. Large consumer Internet companies pioneered practical A.I. deployments, but their processes do not necessarily apply in other industries where A.I. projects face unique challenges.
As a result, we frequently see non-digital companies struggle with A.I. deployment. Manufacturing, for instance, is primed for A.I. transformation, but only 5% of more than 200 manufacturers surveyed by the MAPI Foundation say they have a clearly defined strategy for A.I. In a separate Accenture report that surveyed 1,500 C-suite executives in 16 industries, 76% of respondents said they struggle with how to scale the technology. This stands in contrast to the consumer Internet industry, where large A.I. systems already power everything from producing search results to language translation to targeted advertising.
For A.I. to reach its full potential, those implementing the technology must develop new techniques to enable its deployment across all industries. (My company, Landing AI, helps companies with A.I. adoption.) In particular, companies outside Silicon Valley need to overcome three challenges to increase their odds of success.
First, they must learn to harness small data. The tech giants use vast volumes of data collected from billions of users to train A.I. models. Techniques developed for these big data settings need to be adapted to the much smaller datasets that most other industries have.
Take the challenge of building an A.I.-powered system for a factory to detect scratches on smartphones. No smartphone manufacturer has a million scratched phones lying around from which it can capture pictures of scratches. Thus, many manufacturers do not have enough data to power conventional A.I. models. Manufacturing A.I. application builders often need to get by with 100 or fewer images.
Fortunately, new small data technologies are starting to make this possible. For example, a new data generation technique may be able to take 10 images of a rare defect and synthesize an additional 1,000 images that an A.I. system can then learn from. Using another method, an A.I. model might first learn to find dents from a large dataset of 10,000 pictures of dents collected from different products and data sources. Having learned about dents in general, it can then transfer this knowledge to detect dents in a specific novel product with only a few pictures of dents.
Such advanced small data techniques may enable A.I. to finally break into traditional industries like manufacturing, agriculture, and health care.
Second, A.I. models serving non-digital firms must bridge the gap between research settings and the real world. Many A.I. systems that achieve high accuracy in a research paper or proof of concept do not perform as well when deployed.
For example, many research groups have published articles that report A.I.’s ability to diagnose from x-rays or other medical images at a level of accuracy comparable or superior to that of radiologists. So why is it still so rarely used?
One reason is that many of these studies are carried out in well-controlled settings where the A.I. learns from and is tested on consistently high-quality data. Doing well in such a setting leads to a successful proof of concept or publication. However, if the same A.I. system is deployed in a hospital where x-ray images are slightly blurrier or the protocol for collecting images is slightly different, it fails to adapt.
One solution is to start by only using A.I. to analyze images on which it has high confidence, while relying on a human radiologist for all other cases. The A.I. then learns from the radiologist and is gradually able to take on more responsibility.
Third, non-tech companies deploying A.I. must be aware of its potential to disrupt employees, customers, and other stakeholders in the business, and appropriately manage the change the technology brings.
For instance, an A.I. system that helps doctors triage patients in an emergency room affects many—from doctors and intake nurses to insurance underwriters. To keep projects on track, people must be brought on board with A.I. implementation, and their workflow must be adjusted to take advantage of the technology.
I have seen many A.I. teams underestimate the human side of organizational change management. Overcoming this challenge is not easy, but there are steps businesses can take to mitigate disruption.
For one, organizations have to identify all the stakeholders that will be involved with the change process. Managers should either communicate with them directly or find ways to have their colleagues talk to them about what is coming. Many teams make decisions by consensus, so it is important to minimize the odds of any stakeholder blocking or slowing down implementation.
Next, companies need to budget enough time to properly implement A.I. They must spend enough time to understand stakeholders’ roles and beliefs, assess how many roles will change, and explain to people what the A.I. will actually do and how the system may benefit them.
It’s crucial that the company reassure stakeholders during A.I. implementation. Many people still harbor significant fear, uncertainty, and doubt about A.I. Providing a basic education about the technology eases these conversations. Organizations can also reassure people by rigorously testing and auditing the technology, and showing the results to stakeholders so they’re convinced it works safely.
Organizations should consider beginning A.I. deployment with a pilot that affects a relatively small number of stakeholders. A quick success can then be used as a showcase to get buy-in from a larger group.
PwC estimates that A.I. will generate $15.7 trillion globally by 2030. Much of this value will come from outside Silicon Valley. A.I. is on its way to transforming every industry; the process will be a lot easier if businesses take the right actions along the way.
Andrew Ng is founder and CEO of Landing AI.
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fortune--2020-04-26--How retailers retooled podcasts to connect with customers and staff during the coronavirus pandemic

A.I .
will be crucial to companies outside of Silicon Valley—and they need a new playbook for it

As Walmart employees handle a tsunami of coronavirus-related demands for food, cleaning products, and medical supplies, their employer is using an unlikely source to rally them: the Walmart Radio Podcast. The folksy company podcast has been recast as both a morale booster and information clearinghouse for employees. In recent episodes, CEO Doug McMillon and the company’s chief medical officer, Dr. Tom Van Gilder, took guest turns on the show to review COVID-19 safety basics and thank workers.
“What are you seeing out in our stores?” the show’s co-host, Bo Woloszyn, asked Van Gilder.
“Absolutely heroic efforts on the parts of the associates to keep the stores open, to keep those essential goods coming to our communities,” Van Gilder replied.
Walmart is not alone in turning to podcasts to connect with employees and customers during the coronavirus pandemic. With retailers’ budgets strained, many have started to realize that podcasts are a cost-effective way for brands to connect with people and dispel misinformation. Unlike a TV spot, podcasts can be produced quickly and cheaply without a lot of equipment or large creative team. And with social distancing a must, podcasts can even be recorded at employees’ homes, a blanket or closet standing in as a recording studio.
Trader Joe’s is also using its popular podcast, Inside Trader Joe’s, for straight talk about the COVID-19 crisis.
“Nobody signed up for this when they applied for their job at a neighborhood grocery store,” said Trader Joe’s president of stores Jon Basalone on the April 9th episode. Basalone talked about sanitizing procedures and, when discussing employee efforts during the crisis, was clearly emotional.
Tara Miller, Trader Joe’s marketing director and the podcast’s co-host, got right to it in discussing employee needs during the pandemic. “In times of crisis, information gets weird and misconstrued. There’s been talk in public about how Trader Joe’s employees are not being compensated fairly for what they’re doing right now. I want to talk about that,” she asked of Basalone.
His answer: each crew member is receiving $2 more per hour, a wage increase he said has no end date. Basalone said sales rose significantly in late February, but have dipped below normal recently as more people are staying home.
Miller and Basalone weren’t just throwing their voices into the wind. The show has a significant audience, boasting a five-star rating on more than three thousand reviews. In comparison, most other company podcasts have fewer than 50 reviews on Apple Podcasts.
Keeping customers connected at home
But one company podcast runs circles around most others: Nike’s Trained, and they’re putting it to work to connect with customers and keep them moving forward with fitness goals old and new. In January alone, more than 600,000 people downloaded Trained and a Nike spokesperson said they’ve surpassed 3 million downloads total. The show, which sounds like TED Talks for athletes, has featured motivational speaker Simon Sinek, Julie Ertz of the U.S. women’s national soccer team, and the Los Angeles Lakers’ LeBron James.
Ryan Flaherty, Nike’s senior director of performance and the host of Trained, hinted he’s recording new episodes from his closet. “For the next few weeks I’ll be talking with a range of experts about how we can live our best lives even when we’re hunkered down,” Flaherty said in a trailer preview, promising new episodes that will feature tips on working out with little or no equipment, healthy eating and sleep habits, and how to “stay mentally strong during a difficult situation.”
Things are a bit more relaxed over on the Callaway Golf Podcast. When the employees of the Carlsbad, Calif. company came under mandatory “shelter in place” orders, podcast host Jeff Neubarth grabbed his recording equipment before leaving the office. A recent episode of the podcast featured a remote interview with pro golfer Xander Schauffele, who discussed Netflix binges and golf tips to try at home. Neubarth has been producing two episodes each week, creating community at a time when tournaments are cancelled. “Friendly banter about the game and [pro golfers’] lives off the course can be a fun distraction for golf fans, the player and certainly [for me],” Neubarth said. Reviewers have praised it as a refuge from news.
Company podcasts aren’t a new thing, of course. Long before COVID-19 upended daily life, retailers and consumer brands had already been experimenting with podcasts. Audio content has exploded in recent years, buoyed by smart home devices, media-syncing cars, ear pods, and long commutes. About half of all Americans have listened to a podcast; more than a third— roughly 104 million people— listen regularly, according to Sommerville, N.J. consumer research firm Edison Research.
Target, Sephora, Gucci, Coach, Hermes, and Avon, to name a few, have produced podcasts. Even though most of these efforts have attracted only a niche audience, they’re still meaningful.
“We are slicing the media market thinner and thinner—any way you can connect with consumers and be more relevant without interrupting them is key,” said Allen Adamson, marketing professor at NYU’s Stern School of Business in an interview with Fortune before COVID-19 took hold of the world. “Given that the barriers to entry are relatively low, if 10 people are listening, that’s valuable. That’s 10 people completely absorbed.”
Trader Joe’s has used its podcast for the last two years to “be more in control of the narrative,” said Matt Sloan, the podcast’s co-host and the retailer’s vice president of product marketing. Earlier episodes addressed sustainability, the product development pipeline, fan favorites, and employee culture in a witty, smart, and unabashedly nerdy way.
Historically, Sloan noted, the retailer has “played its card close to its chest,” focusing more on customers than speaking to the media. But in its podcast, the notoriously frugal retailer found an efficient and cost-effective way to deliver a lot more information—and deeper engagement—than they could with a 30-second television spot or banner ad. “Words matter to us and being clear is important,” Sloan said. That’s become even more vital when in the face of addressing sanitation procedures or what happens at a store after an employee tests positive for COVID-19.
“Simple things like going to the grocery store aren’t so very simple anymore and we appreciate your kindness and patience so very much,” Sloan said, concluding the April 9th podcast.
“I’ve had a ton of people reach out through social media and email to say they’re so surprised we’re doing this—sharing information and giving access to these people,” said Nike’s Flaherty. “They like that it’s not a marketing campaign and that we’re not asking for anything in return.”
Sounds like a perfect fit for a customer base that’s sheltering in place.
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fortune--2020-04-26--U.S. adds cameras at Mexico border despite drop in crossings

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The Trump administration has been quietly adding military surveillance cameras at the U.S.-Mexico border in response to the coronavirus pandemic, though fewer people appear to be crossing illegally. It’s the latest move as operations at the U.S.-Mexico border have become increasingly militarized and secretive.
Documents obtained by The Associated Press show the Department of Defense, at the request of the Department of Homeland Security, sent 60 mobile surveillance cameras and 540 additional troops to the southwest border this month. The documents are unclassified but for official use only and were part of PowerPoint slides created last week to brief Lt. Gen. Laura J. Richardson, commander of U.S. Army North, the primary unit overseeing military operations at the border.
The cameras are manned by the military and will be removed after the pandemic has ended, said Matthew Dyman, a spokesman for Customs and Border Protection, which is under the Department of Homeland Security.
The request for cameras was not “based on border flow numbers” but on rising coronavirus cases in Mexico, he said.
“Each person that avoids arrest and makes further entry into the United States has the potential to be carrying the COVID-19 virus and puts American lives at risk,” Dyman said in a email.
Apprehensions of people crossing illegally have declined by 77% since a peak in May, according to Customs and Border Protection. April figures have not been released yet but are expected to be even lower.
The cameras were set up days before President Donald Trump signed an executive order Wednesday placing a 60-day pause on issuing green cards in an effort to limit competition for jobs in a U.S. economy wrecked by the coronavirus.
Trump has used emergency powers during the pandemic to implement an aggressive border crackdown that has included turning away or immediately deporting asylum-seekers, including minors.
The military help means more Border Patrol agents can focus on apprehending people who cross illegally or expelling foreigners under a rarely used public health law that the Trump administration tapped amid the pandemic, Dyman said.
The addition of the mobile cameras, which are are mounted in the back of trucks, bring the total to 192, according to the documents.
Southern border expert David Shirk sees no justification for adding cameras and troops. He pointed out that Mexico so far has a fraction of the number of COVID-19 cases that have been confirmed in the United States, while deportees flown back from the U.S. have introduced cases in their home countries.
“There is no evidence that suggests there are hordes of COVID-19 patients lined up along the border,” said Shirk, an associate political science professor at University of San Diego. “And there is no evidence that COVID-19 is even contributing to a surge in people trying to cross the border.”
The government’s own numbers show the opposite. Apprehensions at the U.S.-Mexico border have been declining for nine straight months.
As of Sunday, the 60 added mobile surveillance cameras planned to be manned and operational, according to the documents. That day, the six Mexican states bordering the U.S. reported a total of about 125 confirmed COVID-19 cases, according to Mexico’s health secretary. By comparison, the four U.S. states that border Mexico—California, Arizona, New Mexico and Texas—recorded about 55,000 infections Sunday.
Pentagon officials as recently as August were considering a request from the Department of Homeland Security to send reconnaissance planes and military drones designed for battlegrounds in Afghanistan and Iraq to the border.
Administration officials have declined to say whether that plan, first reported by Newsweek on Aug. 9, is still in the works. In December, Richardson, the U.S. Army North commander, ordered historically unclassified documents and daily briefings on the U.S.-Mexico border to be moved to a classified system to prevent further leaks.
With the additional troops, about 3,000 active-duty service members are on the border along with 2,500 National Guard troops. Barred from law enforcement duties, they have kept a low profile and are largely doing on-the-ground surveillance.
The border mission—marking one of the longest deployments of active-duty troops to the border in U.S. history—has cost more than $500 million since October 2017. The Defense Department also has reallocated nearly $10 billion to building Trump’s border wall.
“The U.S. border is the most militarized peacetime border in the world, and the border is more militarized today than it ever was in the entire history of our two countries,” said Shirk, the professor. “I think the administration is clearly exploiting a crisis to try to advance its ulterior domestic policy objective of restricting immigration.”
Trump uses the monthly border tallies on apprehensions as a benchmark to determine how his policies are working, and that’s become particularly important in an election year. The number of people crossing the border traditionally declines when it’s hot outside, and the winter months often see increases.
However, as COVID-19 cases in the United States jumped dramatically in March, apprehensions at the border dipped further, to 29,953 from 30,074 in February and a peak of 132,856 in May.
That coincided with the U.S. expelling more than 10,000 Mexican and Central American asylum-seekers under public health rules that the administration quietly began using March 20 — the same day Trump announced the southern border was closed to nonessential travel.
The head of the Centers for Disease Control and Prevention, Dr. Robert Redfield, on Monday extended the rules largely shutting down the asylum system until May 20. His order described a “serious danger” of COVID-19 being introduced at Border Patrol stations and ports of entry as well as further into the country.
At least 272 Customs and Border Protection employees have tested positive for the virus, including 62 in states bordering Mexico.
Redfield also noted that many places on the U.S. side of the border have not yet experienced widespread community transmission of the virus and therefore the pandemic in Canada and Mexico remain “a serious danger to such locations.” That’s despite the U.S. having the most cases in the world by far.
The Department of Homeland Security requested the cameras under the Economy Act, which allows federal agencies to order goods and services from other federal agencies.
Congress passed the law in 1932 to eliminate overlapping activities of the federal government. It has been abused, so conditions have been added, including a requirement that the requesting agency demonstrate that its request meets a bona fide need that either exists or is arising within the fiscal year.
More politics coverage from Fortune:
—How Fortune 500 companies are utilizing their resources and expertise during the pandemic
—Why charging members of Congress with insider trading is so fraught
—To fight tomorrow’s pandemic, we need to think like the military today
—If you’ve been a little busy lately, here’s what’s going on with the 2020 election
—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEO
—WATCH: As unemployment skyrockets, the labor market’s future looks grim
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fortune--2020-04-26--Work from home tips from the executive team that brought you Zoom

On March 4, Zoom Video Communications CEO Eric Yuan ordered his 2,500-person company to work from home, preceding California’s statewide lockdown by about two weeks. “Employee safety is our no. 1 concern,” the founder of the San Jose-based video conferencing company told Fortune in a recent interview.
But in an ironic twist, even Zoom’s own workforce—yes, the same one that brought you the video chat service you now likely use to do pretty much everything from home—was not accustomed to working remotely.
“I was in the office five days a week before this,” Zoom’s chief marketing officer Janine Pelosi said. “Whatever you do in the beginning ends up being part of your culture.”
To be sure, Zoom’s employees had the advantage of being very familiar with their own product. But over a series of recent interviews, conducted for a Fortune profile of the fast-growing (and highly-scrutinized) tech company, the company’s executives repeatedly emphasized that adopting collaboration tools is just one aspect of the shift to working from home. They also shared a few of their takeaways, tried-and-tested tips for making the transition as seamless as possible. Here they are, straight from the people who brought you Zoom:
Make sure your employees have the tools they need. Yuan, Zoom’s CEO, says it’s not just about collaboration software—products like Zoom and Slack. You also need to make sure that employees have a printer, a secure wi-fi network, and other basic tech needs that we all take for granted in an office setting. “Now, everyone is their own I.T.,” says Yuan.
Check in with your employees more frequently. Kelly Steckelberg, Zoom’s chief financial officer, has prioritized frequent check-ins, not just for conducting business but also for socializing. “I check in with my team much more often than I used to, including twice a week virtual happy hours.” Pelosi, Zoom’s CMO, also says she has become diligent about daily check-ins.
Replace lengthy one-on-one’s with shorter, bite-sized team meetings. “We’ve always operated with a level of urgency,” says Pelosi. Now, the need to communicate more often is more pressing than ever. But longer one-on-one meetings not only take up time but are also inefficient because they don’t involve the broader team.
Show gratitude—and do it often. “Working from home is not that easy,” says Yuan. “It’s pretty stressful.” Acknowledge this reality, and that the challenges may be different for each one of your employees. “Ask people how they’re doing,” says Pelosi, Zoom’s CMO. And express your gratitude—often. According to Pelosi: “Right now I’m saying thank you more than I ever have.”
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More stories from Fortune’s print edition:
—How the American economy can recover from the coronavirus pandemic
—World’s 25 Greatest Leaders: Heroes of the pandemic
—Why the coronavirus crisis could make Big Oil greener
—For airlines in freefall, the return route will be long and bumpy
—Buying time: How vintage watches are finding new homes online
—How every sector of the S&P 500 has been impacted by the coronavirus selloff
—WATCH: How Seattle’s corporate giants banded together to combat coronavirus
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fortune--2020-04-26--5 lessons for the coronavirus recovery, from an expert on success and failure in crisis

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Economist and writer Richard Davies has been here before—quite literally, and many times.
As an economist at the Bank of England from 2006 to 2011, Davies advised U.K. negotiators at the G20 and IMF meetings that organized the EU’s response to the 2008 financial crisis. He was later a senior advisor to the U.K.’s finance minister during the runup to the 2016 Brexit vote.
Apparently that wasn’t enough economic chaos for him. After leaving government, Davies started the global tour that became the book Extreme Economies, a collection of nine case studies published in the U.S. in January. Davies wanted to learn how economies succeeded in adapting—or failed to adapt—to hard times, a mission that took him from post-tsunami Indonesia to post-industrial Glasgow.
“I looked for places that should have failed,” says Davies, “but ended up with a working economy; and places that should have thriving economies, but failed.”
Not surprisingly, Davies has been thinking a lot about the coronavirus pandemic, its economic consequences—and the outlook for recovery. He recently took time out from caring for his newborn twins to share some of his most important insights.
Markets need governments, and vice versa
“You have to use markets, but you can’t let markets run amok,” says Davies. His time in Panama’s Darien Gap region, where an unregulated scramble for wood has led to catastrophic deforestation, helped convince him of the importance of that balance.
“The prime example right now is the market for PPE [medical protective equipment],” he continues. “Some governments are just directing it, and not letting price signals work, which is causing huge mess-ups. And if you go to the other extreme and just let markets run, you wind up with the price gouging we have here in the U.K.”
“An aggressively Friedmanite, fully libertarian model is clearly wrong,” Davies argues, invoking economist Milton Friedman. “But the Bernie Sanders extreme isn’t going to work either. Economics is about [asking], ‘Where can we let markets run untrammeled, and where should we control them?’”
Inequality threatens everyone
For Extreme Economies, Davies visited places that illustrate where global trends could take the rest of us. To study where growing inequality could lead, he went to Santiago, Chile, where the gap between the ultra-rich and working people is profound and deep, stalling not only social mobility, but innovation and economic growth.
Davies sees coronavirus as a global wake-up call on inequality and its consequences. “We’ve realized that the nurse is as important as the doctor, and that the Amazon worker providing stuff to the nurse is also massively important,” he says. “I think that’s a good thing. The inequality debate…is going to be huge after this, because we recognize that interdependence.”
Trust is our greatest asset—and it’s at risk
Davies argues that “social capital” is perhaps the most overlooked ingredient in successful economies, especially those recovering from a shock. Darien’s lawlessness and Santiago’s inequity have hampered their local economies by fueling distrust and alienation among residents, while the strong community in Banda Aceh, Indonesia, helped that city bounce back quickly from near-total destruction by a 2004 tsunami.
“Social capital works by making other types of capital – financial, physical – go further,” he says. “It’s about sharing things. If you’ve got high social capital, one bit of physical capital goes further. You can have localized credit systems, so financial credit can go further. Communities where social capital is higher are going to be much better off in their ability both to manage this pandemic, and to recover from it.”
In an earthquake or a war, Davies says, communities can gain social capital because they’re drawn together by a common enemy. But he worries that the specific contours of the coronavirus crisis are a threat to the very thing we most need to recover from it.
“We’re not seeing the wartime mentality,” he says. “Actually we’re seeing masses of criticism,” such as scattered anti-lockdown protests in the U.S. “One of my fears for this crisis is that it’s actively eroding social capital, or national sentiment more broadly.”
The informal economy is vital
Davies’ book also examines the surprisingly vibrant Zaatari refugee camp in Jordan. There, Syrian refugees run clothing shops, pet stores, and pool halls that do bustling business—outside of the restrictive aid systems set up by the NGOs that oversee the camp.
“I used to think the informal economy was a niche thing,” Davies says. “I now think most [economists] are literally measuring about half of what’s going on.” That means that official numbers like GDP, and the models used by economists and central banks, won’t capture the full consequences of coronavirus, especially in the developing world.
But Davies has also found that informal systems are key to post-crisis recovery. After a crisis, he says, “opportunistic locals will react lightning- quick, much faster than [agencies like] the IMF. If you can just get buying power into people’s hands, they will go out and buy what they need, and if it’s not there, they’ll organize an entrepreneur from a neighboring town to get it in.”
Money will change
Many governments worldwide have acted swiftly to try and get that buying power into people’s hands. But the U.S., with its small-business bridge loans and expanded unemployment benefits in shocking disarray, is emblematic of the need to upgrade the formal financial systems of many countries.
“A modern crisis response tool,” says Davies, “would be a bank account that the government knew we had, and at any moment it could be topped up with a certain amount of money. Because getting the markets to work for you by injecting a load of spending power is where aid works really well.”
Less formal financial innovations also tend to thrive under extraordinary circumstances. “In times of crisis,” Davies says, “People are able to very quickly build new currencies, and new financial arrangements.” One chapter of Extreme Economies, for instance, explores the economy of Louisiana’s Angola penitentiary, where dollars are barred and canned mackerel serves as currency.
Davies speculates that a serious global financial shock could also encourage the adoption of homegrown local currencies like the Bristol Pound, or of cryptocurrencies. He also sees promise in local credit unions, and in “really unorthodox things” such as lending circles.
“What’s going to be the five year legacy of this?” asks Davies. “Testing, of course. But a more subtle legacy might be some real new ideas about how we as communities can target our funds in the most effective way.”
More must-read stories from Fortune:
—Why the IRS stimulus check portal may be saying “payment status not available”
—Bill Gates explains how to beat the coronavirus pandemic
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—PODCAST: COVID-19 might have upended the concept of the best companies of the year
—WATCH: The U.S. Postal Service is in deep financial trouble. Here’s why
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fortune--2020-04-27--Boris Johnson won his personal battle against COVID-19. Now comes the hard part

Joe Biden is the USPS ’ s only hope—but it has to hang on until November

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It’s Boris Johnson’s first day back at work. He may wish he had stayed in bed.
On Monday, the British Prime Minister appeared outside 10 Downing Street, his official residence, after nearly three weeks out of public sight as he recovered from COVID-19. He’d been hospitalized, including two nights in intensive care, and then spent more than two weeks recovering at his official country retreat.
He returns to a government that is facing intense criticism over its handling of the pandemic. Before he went into the hospital, Johnson had faced heavy criticism over the government’s lack of tests and protective equipment for health care workers. Those questions have now been joined by pressure over whether ministers took the threat seriously enough in the earliest days of the crisis, and the lack of transparency about the makeup of the government’s scientific advisory group.
Johnson’s government is also facing questions about when and how the U.K. will emerge from lockdown; Germany and other European countries have begun to ease measures and chart a way forward. Even Italy, which was hit the earliest and hardest in Europe, has said it would begin to ease restrictions from next Monday.
On Monday, Johnson addressed those questions directly, saying there would be more news in the coming days, but warning that he would not risk the country seeing another spike in infections. The U.K. is at a period of “maximum risk,” he said.
“I refuse to throw away the sacrifices of the British people,” Johnson said. The U.K. will enter its sixth week of lockdown on Tuesday.
Johnson’s statement will be a blow to some members of his own cabinet. Treasury officials, according to reports in the Financial Times, have been pushing the government to at least announce a plan for starting to ease some of the restrictions businesses currently face under lockdown. They are concerned about the severe economic costs of the shutdown and that they’ll soon exhaust the emergency funding they’ve made available to businesses.
Meanwhile, some of Johnson’s scientific advisers are disappointed and perplexed that the strict social distancing measures put in place haven’t had a more dramatic impact on the overall rate of hospitalizations and deaths, according to a report in the Guardian. While hospitalizations in London, the U.K.’s largest coronavirus hotspot, have come down from almost 5,000 to fewer than 3,500, they remain higher across the country than officials had hoped would be the case after five weeks of social distancing measures.
The death rate has also plateaued at a high level, with between 650 and 850 new deaths in hospitals being reported each weekday and more thought to have died in care homes and other settings. The current tally is 20,732 deaths in hospitals. Chief Medical Officer Chris Whitty had previously said he had hoped social distancing measures would enable the U.K. to keep its death toll below 20,000.
John Edmunds, a member of the government’s scientific advisory panel, told the Guardian that the rate of new infections being reported each day—close to 5,000—is far too high for government officials to consider lifting strict social distancing restrictions, as even the current rate of infections would be too much for the contact-tracing systems the government is trying to put in place to handle.
Over the weekend, the government also faced mounting questions about a lack of transparency over the makeup of its Scientific Advisory Group for Emergencies (SAGE) council, which it has relied on for scientific advice from the earliest days of the crisis.
While the list of members has not been officially published, a Guardian report over the weekend listed Dominic Cummings, the Prime Minister’s chief political adviser, and a data scientist involved in the “Leave” campaign ahead of the British vote on Brexit as attendees, alongside well-known experts in virology and epidemiology.
Scientists said that the attendance of political advisers at SAGE meetings was common and even useful in order to keep the government well informed. The risk would be whether Cummings in particular was a contributing member of the group, or simply observing, and the degree of political interference as a result.
“Politicians and their direct political advisers have no place on scientific advisory committees,” Trish Greenhalgh, professor of primary care health sciences at the University of Oxford, said in a comment. “Clearly the deliberations of scientific committees must interface with the process of political decision-making, but that is very different from a politically motivated individual using the scientific committee as a mouthpiece.”
More hard questions are looming. This week, the government will also face its self-imposed deadline of 100,000 tests per day, after concerns earlier this month that testing levels were still below that of most other Western countries, and that the government had moved too slowly in acquiring further tests. Antibody tests, which had frequently been touted in government press conferences, also turned out to be a dud—the batch was not reliable enough to be widely used.
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—Bill Gates explains how to beat the coronavirus pandemic
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fortune--2020-04-27--Joe Biden is the USPS’s only hope—but it has to hang on until November

Boris Johnson won his personal battle against COVID-19 .
Now comes the hard part

The U.S. Postal Service has made it explicitly clear: Without a Hail Mary pass from Congress, it will likely run out of money before September of this year.
In order to stay afloat, advocates for the Postal Service are asking Congress for $25 billion in immediate assistance, a $25 billion modernization grant to overhaul infrastructure, and $14 billion in debt forgiveness. The Postal Service Board of Governors, which consists of three Republicans (all of whom were appointed by President Donald Trump) and two Democrats, unanimously approved of the ask earlier this month.
Ideally, that would be enough to sustain the Postal Service until the election of presidential candidate Joe Biden, who has said he plans to back legislation to support the post office and keep it public.
“The U.S. Postal Service is an important part of American life. But, with Donald Trump in the Oval Office, our post offices are under attack,” Biden wrote in a letter to his supporters last week. “Trump has called for rolling back protections for postal workers and privatizing the USPS…Trump’s plot to privatize the USPS couldn’t come at a worse time,” he continued. “So we need to take action now to protect the Postal Service.”
While the post office has not been included in any stimulus packages so far, Congressman Emanuel Cleaver of Missouri still remains hopeful that the Postal Service will get something in the next round of funding. He sent a letter—along with 122 of his congressional colleagues last week—to House leadership, demanding a bailout.
“If the Postal Service is privatized, rural America will be traumatized,” he tells Fortune. “It means that rural America, which already thinks it’s being ignored, will be given a clear and unambiguous sign that they’re right. That they’re not only ignored by the Congress of the United States but that they’re being placed in harm’s way. So not only do they not get mail, they don’t get medications, they don’t get the opportunity to communicate.”
In a briefing with members of Congress earlier this month, Postmaster General Megan Brennan outlined the full extent of the problem. While the Postal Service was losing money at an unsustainable pace before the COVID-19 crisis, it has seen an insuperable and precipitous drop in mail volume since.
There was a 5.3% decline in mail volume, said Brennan, during the first month of the pandemic in the United States. By April, it had grown to 30%. It will only get worse, she predicted: At the end of the third quarter, it will be a 50% drop, and at the end of quarter four, 57%. For this fiscal year, which ends Oct. 1, the Postal Service is predicting a revenue loss of $13 billion, the result exclusively of COVID-19. That’s on top of the nearly $9 billion the USPS had been losing annually before the pandemic.
Post office workers are considered essential during COVID-19 shutdowns. Over 1,800 postal workers have either tested positive or are presumed to be positive with the virus, and there have been over 30 deaths related to COVID-19, according to union officials.
Vermont senator and former presidential candidate Bernie Sanders held a virtual town hall last week with postal union leaders. “At this moment,” he said, the USPS “is facing very difficult challenges.”
But the latest congressional relief package, signed into law by the President on Friday, when he went out of his way to call the USPS “a joke,” provides no support for the Postal Service.
“As far as I’m concerned the Postal Service got screwed three and a half times now,” said Paul Hogrogian, president of the National Postal Mail Handlers Union.
If additional funding is not provided, the USPS would have no way forward without significantly reducing staff and cutting some services. The post office currently employs 640,000 staffers, many of whom are veterans and people of color.
The Postal Service is required by the constitution to serve everyone in the country equally and with uniform rates. They are the only universal provider of mail service and have been a low-cost anchor for the mailing industry, helping to keep private mail service rates down. A recent analysis by the Institute for Policy Studies found that, without the USPS, 70 million more Americans would have to pay hefty surcharges for deliveries.
If the Postal Service were to halt some or all of its deliveries, “rural America would be left out of the equation or be forced to pay exorbitant prices,” explained Hogrogian. Prescription drugs, Social Security, and pension checks would no longer be directly delivered to them, he said, noting that 40% of Americans still pay and receive bills through the U.S. mail.
“So FedEx and UPS get to cherry-pick what markets they want to play in, and if it’s unprofitable or too remote or too expensive, they get to not do it,” said Rep. Gerry Connolly, chairman of the Subcommittee on Government Operations.
“This isn’t just a nice thing to do for the Postal Service. This is essential to every household and every business in America that counts on daily delivery of their prescription drugs, foodstuffs, medical equipment, supplies,” said Connolly. “As we speak, people are ordering masks through the mail, medical supplies, and prescriptions, and we’re even adding to the burden by voting through mail.”
The only way to save the Postal Service, said Fredric Rolando, the president of the National Association of Letter Carriers, is to participate in the upcoming presidential election and vote for Biden. Rolando said he’s focused fully on short-term measures to keep the Postal Service alive, but even potential bailout money won’t provide long-term relief.
The USPS is currently the most trusted government agency in the country with a 90% approval rating divided almost equally among both Democrats and Republicans. While the agency is federally run, it has not received taxpayer funding for more than 30 years and is considered financially independent.
But the agency has been rapidly losing money since a 2006 law, passed with the support of the George W. Bush administration, required the agency to pre-fund employee retiree health benefits for 75 years in the future. That means the Postal Service must pay for the future health care of employees who have not even been born yet. The burden accounts for an estimated 80% to 90% of the agency’s losses.
Postal advocates believe that the pre-funding initiative, which they call “onerous” and “draconian,” was intended to force the Postal Service to privatize. They also say that without the stimulus money, taxpayers will be forced to pay for retiree benefits anyway.
“The line in 2006 was that the Postal Service has to pay upfront now because ‘we’re not sure if they’re going to be around in 20 years, and then the taxpayer will be stuck with the bill,’” said Hogrogian. “But that’s exactly what’s going to happen now if we’re not given this infusion.”
And while $50 billion plus debt forgiveness to the tune of another $14 billion may seem excessive, Connolly said perspective matters, especially in light of the $2.2 trillion stimulus bill recently passed by Congress. “It’s a big ask, but you have to put it into context,” he said.
“Think about the airline industry: Here’s an industry that gouged customers over the last five years to maximize profits, and they’ve had record profits over the last five years. And what did they do with those profits? They used $42 billion collectively to buy back stock. Not a productive activity,” said Connolly. “And then when the pandemic hit, they came hat-in-hand asking for $50 billion for a bailout. So if we can do that for the airline industry, and we did, then we can certainly do something comparable for the Postal Service.”
There was initial bipartisan interest in a bailout of the USPS by Congress, but according to reports by the Washington Post, Trump and Treasury Secretary Steven Mnuchin stepped in and threatened to veto the entire bill if it included the final agreed upon $13 billion direct grant to the USPS. Instead, they allowed only an additional $10 billion loan from the Treasury, but that comes with strings attached.
Connolly said that the loans taken from the Treasury usually work to take autonomy away from the USPS and bring it closer to privatization. “We are very worried that Treasury will pull our arm, and we’re going to resist it,” he said. “Mnuchin [and the President have] an agenda. You’ve got to remember that they don’t like the Postal Service as conservative Republicans because it’s big, it’s quasi-governmental, and it’s unionized.”
The Trump administration is supportive of privatizing the post office, and Hogrogian said that he was upset by “the shamefulness of them trying to use this crisis to carry out their political agenda, rather than set good policy on behalf of the people of this country.” A 2018 report written by a Treasury Department task force recommended selling off parts of the USPS to the private sector.
The Trump administration’s attempts to use the Postal Service as a “fiefdom” for “long-term political ambitions,” said Cleaver, “gives off a bad odor.”
The President has long advocated against the Postal Service. He does not support vote-by-mail initiatives as a response to the COVID-19 crisis, which he falsely claims would lead to an increase in voter fraud, and he also believes that the USPS should charge Jeff Bezos and Amazon more money for mail services than they do. The President reportedly personally pushed the Postmaster General to double rates for Amazon deliveries.
Still, Cleaver thinks there is a way to negotiate a bailout into the fourth stimulus bill. “It depends on how desperate we are to get the stimulus through, and it also depends on what else is on the table,” he said. “We’ve been meeting almost daily discussing it. Now it’s reached a point where people who are interested in getting that rural vote are going to have to think deeply about how they’re going to vote on this.”
Connolly also thinks negotiation is possible. “We had great success in the CARES Act in injecting things that the White House and Secretary Mnuchin and Senate Majority Leader Mitch McConnell did not want to accept,” he said. Democrats, for example, were able to negotiate $150 billion for state and local governments and $400 million to help electoral boards and support voting by mail.
Negotiations for stimulus bill four are currently in committee.
“You know, we have a divided Congress and a divided government, and to get things done there’s going to have to be give and take,” Connolly said. “Republicans and the White House are going to have to give postal relief, and they’re going to have to put their agenda aside for the sake of the country.”
More politics coverage from Fortune:
—How Fortune 500 companies are utilizing their resources and expertise during the pandemic
—Why charging members of Congress with insider trading is so fraught
—To fight tomorrow’s pandemic, we need to think like the military today
—If you’ve been a little busy lately, here’s what’s going on with the 2020 election
—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEOs
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fortune--2020-04-27--Roundup weedkiller cancer claims soar as coronavirus outbreak complicates settlement talks

Bayer AG raised the specter of “considerable liquidity challenges” as it engages in high-stakes negotiations over Roundup litigation in the U.S. and grapples with the pandemic.
The number of plaintiffs claiming that the weedkiller caused their cancers rose to 52,500 from 48,600 in February, Bayer said in its first-quarter earnings statement. It’s still too early to know how Covid-19 will impact this year’s results, but the outbreak has already slowed talks with plaintiff attorneys. Bayer said it’s pushing for a “financially reasonable” settlement that also resolves the potential for future claims.
“Against the background of a looming recession and looking at, in part, considerable liquidity challenges, this applies now more than ever,” the company said.
The Roundup talks remain the biggest question hanging over Chief Executive Officer Werner Baumann, who faces a confidence vote at Tuesday’s annual meeting. He lost the vote last year after Bayer suffered multiple U.S. trial defeats, cratering the company’s stock price and raising questions about the wisdom of the $63 billion takeover of Monsanto Co.
Crop Science Demand
Bayer rose as much as 3.8% Monday in Frankfurt, paring this year’s losses to 15%. The Euro Stoxx 50 Index rose 1.9% — in step with equities in Asia and U.S. equity futures — as more countries edged toward reopening businesses and public places.
Bayer’s first-quarter sales and earning beat estimates, led by a crop-science division that saw robust demand for insecticides and fungicides, Sanford C. Bernstein analysts led by Gunther Zechmann said in a note. The pharmaceuticals and consumer-health units also did better than expected. “We’re not overly worried about the Covid-19 impact on Bayer,” the analysts wrote.
Bayer said Monday that it’s still targeting 2020 core earnings per share between 7 euros and 7.20 euros, although the effect of Covid-19 is impossible to assess. A reliable forecast won’t be possible until later this year, the company said.
Customers stocking up on supplies early on in the outbreak also boosted Bayer, and that will probably fade in coming months, according to Michael Shah, an analyst at Bloomberg Intelligence. The drawn-out Roundup talks only add to the cloud of uncertainty over the company, he said.
Gross financial debt was 39.6 billion euros ($42.9 billion) as of March 31 compared to 4.2 billion euros of cash and other financial assets, Bayer said in slides accompanying the results.
The company began mediation talks with plaintiff attorneys in May. After the coronavirus outbreak took hold, Bayer backed out of tentative agreements to resolve the claims, Bloomberg News reported earlier this month, citing people who asked not to be identified because the talks are private. That gave more time to assess the impact of the pandemic and may help Bayer keep the total amount of Roundup settlements under $10 billion, the people said.
Growing Costs
In February, Bayer acknowledged for the first time that lawsuits related to the controversial weed killer Roundup could force it to sell assets, issue new equity or borrow money at unfavorable terms. Still, the company had “quite a solid balance sheet” to cover the growing costs of its legal troubles, Baumann said at the time.
One prominent plaintiff attorney, Brent Wisner, said in February that Bayer had dangled the prospect of bankruptcy for Monsanto, which could result in plaintiffs receiving pennies on the dollar for their claims. Bayer declined to comment on this at the time.
After losing three cancer trials in California that resulted in combined damages of $191 million, Bayer agreed to postpone the next round of Roundup trials to provide more time for negotiations. At least a half-dozen scheduled to start in the first quarter of this year have been put on hold. Bayer is appealing the verdicts.
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—VIDEO: 401(k) withdrawal penalties waived for anyone hurt by COVID-19
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fortune--2020-04-27--Business leaders want nothing of the reopening debate

This is the web version of CEO Daily. To get it delivered to your inbox, sign up here.
Good morning.
One habit I’ve reacquired during lockdown–after abandoning it a decade ago–is reading print newspapers every morning. And lately, their front pages have been a window into the heated debate over when to reopen the economy.
But once I leave the papers and begin the work day, I find myself talking to business leaders who want nothing of that polarized debate. (As IBM’s Ginni Rometty told me recently: “I don’t get to live in a black and white world, okay? I have to live in a world with shades of gray.”) These CEOs are taking a much more measured, less ideological, practical approach to reopening, focusing on how to balance the business imperative against the health and wellness of employees.
On Friday, I spoke with the CEO of one U.S. financial firm with 14,000 employees across the U.S.–more than 90% of whom are currently working from home. Like others I’ve spoken with, he has no plans to push them back to work precipitously, regardless of decisions made by respective government leaders. His best guess is that 60-70% of his workforce will continue to work off-premises for the remainder of this year. And after that? “Who knows? My guess is for 50%, this will become the new norm.”
That sort of speculation, of course, is the luxury of companies employing professional “knowledge workers,” who have discovered in the last six weeks that they can do their jobs pretty well from home. According to one estimate, only 37% of jobs in the U.S. plausibly fit that category. But if a substantial portion of that group continue to work from home, the “new normal” will be substantially different from the old.
The other big trend to watch is business travel. In pre-COVID days, CEOs and senior executives of large companies spent inordinate amounts of time on the road, doing in-person visits with employees, customers, and other stakeholders. Why? Because showing up in person signaled seriousness. But a CEO I spoke with yesterday said he believes the lockdown will change that, convincing business leaders they can be just as effective–and conserve time, money and the environment–by doing much of that business on video.
Time will tell. But a couple of things are clear. Opening up the economy is proving a lot more difficult than shutting it down. And the new normal, whenever it arrives, will be different than the old one.
More news below. And for perspectives on last week’s big CEO news, read Geoff Colvin’s analysis of the legacy of AT&T CEO Randall Stephenson, here, and Aaron Pressman’s take on his successor, John Stankey, here.
Alan Murray
@alansmurray
alan.murray@fortune.com
TOP NEWS
Markets up
Stock markets around the world are up as some countries start to tentatively reopen their economies, and as investors anticipate fresh rounds of stimulus. The Nikkei 225 was up 2.7%, the Hang Seng 2% and—at the time of writing—the Stoxx 600 had risen by 1.7%. U.S. futures point to a mildly positive open. Wall Street Journal
Airbus trouble
Airbus is in deep trouble, CEO Guillaume Faury warned staff in an email. He said the European plane-building consortium is "bleeding cash" and may need to soon increase cuts in order to protect "the very existence of our company." Of course, the whole aviation industry is currently facing an existential crisis, and Airbus's customers are themselves fighting for survival. Airbus's share price nonetheless dove more than 3% on the report of Faury's email. Bloomberg
Boris is back
British Prime Minister Boris Johnson is back in the driving seat, with Foreign Secretary Dominic Raab having stood in for him over the past few weeks. Johnson, who had such a severe bout of COVID-19 that he was in intensive care, stands accused of having dragged his feet in responding to the crisis. Now he's taking the route of caution: he said in his first speech this morning that "there will be time to refine the restrictions and to fire up the engines of the economy [but] we cannot say when those changes will be made." CNBC
Contact tracing
Remember the huge debate, on which we reported a week ago, around the different approaches being proposed for contact-tracing apps? Well, Germany has flipped from the increasingly distrusted PEPP-PT approach to the much less risky DP-3T approach that leading technologists (and, effectively, Apple and Google) are backing. PEPP-PT involves a centralized database that critics said could be used to spy on people beyond what is necessary to fight the pandemic. Also taking the DP-3T route: Spain, Austria, Switzerland and Estonia. Reuters
AROUND THE WATER COOLER
Lifting lockdowns
A new analysis shows there are probably undiscovered coronavirus hotspots in the eight U.S. states that are planning to ease their lockdowns soon. The analysis was performed by A.I. firm Dataminr, based on social media posts on platforms including Twitter and Reddit, as well as on thousands of other public data sources. Fortune
Death toll
The Financial Times estimates that the true global death toll from the coronavirus pandemic may be as high as 318,000, rather than the current official count of just over 200,000. The paper has adapted its methods to look at mortality statistics in excess of normal levels, rather than relying on official statistics that reflect a huge variance in reporting methods. Financial Times
Marcel Ospel
Marcel Ospel has died from a longstanding illness. Ospel architected the fusion of Swiss Bank Corp and Union Bank of Switzerland into United Bank of Switzerland. It was also under his leadership that UBS pursued an aggressive risk-taking strategy in the U.S. that almost destroyed the bank in the Great Financial Crisis, before the Swiss government stepped in with a bailout—he subsequently quit as chairman, and gave back millions of what many saw as an overly lavish salary. Reuters
A.I. road
Landing AI CEO Andrew Ng has some advice for companies looking to deploy "artificial intelligence", which he outlines in this Fortune piece: "It’s crucial that the company reassure stakeholders during A.I. implementation. Many people still harbor significant fear, uncertainty, and doubt about A.I.…Organizations should consider beginning A.I. deployment with a pilot that affects a relatively small number of stakeholders. A quick success can then be used as a showcase to get buy-in from a larger group." Fortune
This edition of CEO Daily was edited by David Meyer.


fortune--2020-04-27--Global stocks rise as investors cheer the easing of lockdown measures

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. Stocks are rallying on the eve of a big earnings week. Oil, however, is a different story.
Let’s take a look at what’s moving markets.
Markets update
Asia
The major indices are trading higher, led by Japan’s Nikkei .
. The Bank of Japan is pulling a page from the Fed and ECB in buying up all manners of corporate and sovereign debt. The yen jumped on the news.
is pulling a page from the Fed and ECB in buying up all manners of corporate and sovereign debt. The on the news. Saudi Arabia said it’s begun to cut oil production a few days ahead of schedule. OPEC+ nations agreed earlier this month to a May 1 pull-back date, but Saudi Aramco got an early jump, reducing production to 8.5 million barrels per day from 12 million bpd, according to Bloomberg. Crude prices are still getting hammered.
said it’s begun to a few days ahead of schedule. OPEC+ nations agreed earlier this month to a May 1 pull-back date, but got an early jump, reducing production to 8.5 million barrels per day from 12 million bpd, according to Bloomberg. are still getting hammered. Meanwhile, the mystery shrouding the health (and whereabouts) of North Korea’s Kim Jong Un deepens. Rattled last week, Seoul’s KOSPI is climbing on Monday.
Europe
European bourses are trading higher. The benchmark STOXX Europe 600 Index was up nearly 2% at the open.
bourses are trading higher. The benchmark was up nearly at the open. To earnings now… Deutsche Bank and Bayer both announced quarterly profits. Adidas , however, said Q2 would be a rough one as 70% of its stores are still closed worldwide. Shares of all three were trading higher Monday morning.
and both announced quarterly profits. , however, said Q2 would be a rough one as of its stores are still closed worldwide. Shares of all three were trading higher Monday morning. It’s a big week for Lufthansa and Air France-KLM . The airlines are taxiing for government bailouts as air travel is down 90% across the Continent. Airbus , meanwhile, warned this morning it’s “bleeding cash at an unprecedented speed.”
and . The airlines are taxiing for government bailouts as air travel is down across the Continent. , meanwhile, warned this morning it’s “bleeding cash at an unprecedented speed.” Even with all that gloomy company news, investors are fairly content as lockdown measures continue to show signs of easing with coronavirus infection numbers improving.
continue to show signs of easing with coronavirus infection numbers improving. Italy on Sunday announced a back-to-work schedule. First up : factories and building sites a week from today.
on Sunday announced a back-to-work schedule. : factories and building sites a week from today. France is expected to open for business on May 11.
U.S.
The Dow , S&P 500 and Nasdaq futures point to a positive open after Friday’s gains.
, and futures point to a positive open after Friday’s gains. As in Europe, the optimism reflects the progress made in keeping the coronavirus infections at bay. According to an investor note from the German bank, Berenberg, the increase in confirmed U.S. infections rose 3.6% in the past 72 hours, down from 4.2% .
rose 3.6% in the past 72 hours, . Goldman Sachs is eyeing the recent performance of the S&P 500, and doesn’t like what it sees. The recent rally is driven by a handful of large caps with particularly strong balance sheets; meanwhile, the median listed S&P firm is still down 28% from the February peak.
Elsewhere
Gold and the dollar are down, a classic risk-off start to the week.
and the are down, a classic risk-off start to the week. Crude is sinking again today. WTI futures fell below $15/barrel, and Brent, the global benchmark, is down 4% to $23.75.
The week ahead
Every week is a big week as we try to climb our way out of this economic crisis. But this week is particularly significant. This current three-week rally in equities has been driven primarily by a string of government stimulus measures, which has served as a pleasant distraction—some might call it a smoke screen—from the parade of corporate quarterly duds reported so far.
Attention could shift this week, however, back to Corporate America as we enter the busiest stretch of earnings season. More than one in three (34%) of the S&P 500 lineup is scheduled to report results this week, according to the Wall Street Journal. (Europe has a big week too with banks and automakers reporting.)
As we’ve noted here before, five firms—Microsoft, Apple, Amazon, Alphabet and Facebook—make up 20% of the S&P 500, by market cap. Each of those five report this week.
Most of the big banks have already reported, which gave us a telling look at the pandemic’s impact on the financial system, and, in turn Main Street. Next up are Big Tech, Berkshire Hathaway and credit card issuers. Combined, they’ll tell us how deep the damage will be to vital sectors of our economy in the quarters ahead.
As we’ve said before, the performance of these bellwethers will go a long way to determining just how far this equities rally can run.
Postscript
We gathered around the TV last night to watch prime minister Giuseppe Conte address the nation. A few hours earlier, health officials had reported a steep drop-off in coronavirus deaths over the previous 24 hours, and so we were half-hoping the government would announce a bold plan for reopening the economy in the regions, like here in Rome, that have been largely spared the worst.
Silly us. Italian politicians don’t do bold. The back-to-work (forget back-to-school) measures will be phased in at a very gradual pace starting next Monday.
The level of micro-managing involved in the reopening is Italian bureaucracy at its worst. It’s so specific that Italians are bound to push the rules or ignore them outright. One that’s already being debated is funerals. They are permitted, but gatherings cannot exceed 15 people. How the Ministry of Mourning will manage that is anybody’s guess.
And, you can already see in Rome that businesses are jumping the gun. Bars are offering take-out cornetti and cappuccino before the permitted May 4 lifting of the ban. Meanwhile, policing the parks has been a hit-or-miss affair.
The lockdown fatigue is getting to everyone.
Here’s a rundown of the month ahead here.
***
Have a nice day, everyone. I’ll see you here tomorrow.
Bernhard Warner
@BernhardWarner
Bernhard.Warner@Fortune.com
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Today's reads
A higher calling
The Church of England is trying to save more than just souls. It’s become a force in the responsible investing movement—and it has major oil and gas companies in its sights, Fortune’s Katherine Dunn reports. The church’s holdings may be smaller than that of most activist investors, but, as Dunn notes, it “does have something that gets the attention of energy CEOs: influence.” And it’s used that standing to score some giant wins against Big Oil.
Pandemic Profiteering
The Federal Trade Commission has begun sending the equivalent of cease and desist letters to companies who push coronavirus products that purport to treat and/or prevent coronavirus infections. The FTC is concerned that a massive army of newly out-of-work Americans looking for an extra source of income will join the ranks of multi-level marketers pushing dubious products. As many as ten such firms have been hit with the warnings, the New York Times reports.
The cost of negative prices
Oil wasn’t the only thing that went negative last week. Belgian and German utilities saw electricity prices plunge to as much as negative €90 (-$97) per megawatt/hour. Cheaper-than-free is nothing new for the electricity sector, but these price falls are truly historic, the Wall Street Journal reports. It’s not some market quirk. Demand has crashed in recent weeks with factories and businesses shut down.
Market candy
Rock, paper, law suit
Justice can be cruel. Unless you’re Edmund Mark Hooper. Back in 2011, Hooper lost a best-of-three rock-paper-scissors duel, and was on the hook to pay the victor $500,000, Canada’s CBC reports. The Canadian man promptly appealed, and the matter landed in Quebec’s highest court. Late last week, the court ruled Hooper was not liable to pay the debt, essentially invalidating the wager. The reason: the classic hand game doesn’t require any skill whatsoever; it’s all chance, the court ruled. Such activities therefore aren’t a form of gambling, and the loser is not bound to honor the wager.
Btw, there is a supposedly fullproof way to win EVERY time—and not just against your 10-year-old child.


fortune--2020-04-27--Mystery of Kim Jong Un’s health continues to grow

Speculation about Kim Jong Un’s health intensified over the weekend after tantalizing — yet unverified — reports about a visit by a Chinese medical team and movements of the North Korean leader’s armored train.
China sent a team including doctors and senior diplomats to advise its neighbor and longtime ally, Reuters reported on Saturday, citing three people familiar with the matter. Meanwhile, a train resembling one long used by North Korean rulers was parked last week near a coastal leadership compound in Wonsan, according to an analysis of satellite imagery released Sunday by the website 38 North. A prominent South Korea adviser also rejected the notion that Kim was ailing or dead.
“Our government position is firm,” Moon Chung-in, a foreign policy adviser to South Korean President Moon Jae-in, told CNN. “He has been staying in the Wonsan area since April 13” with “no suspicious movements” detected.
The latest developments shed little immediate light about the 36-year-old ruler, who U.S. officials said they were told had been in critical condition after cardiovascular surgery. Kim — a heavy smoker who has gained considerable weight since taking power in 2011 — hasn’t appeared in state media for two weeks, and missed April 15 birthday celebrations for his late grandfather, state founder Kim Il Sung, for the first time.
The episode renews longstanding questions about the stability of a regime built on iron-fisted authority and a cult of personality for Kim, who has no known successor. Health scares have been a common occurrence over the years, and the leader’s medical condition is a closely-guarded subject in one of the world’s most secretive states.
Any leadership change in North Korea could increase the threat of instability on China’s border and raise questions about control of the country’s expanding nuclear arsenal. Kim has also been central to U.S. President Donald Trump’s so far unsuccessful efforts to get him to reduce his weapons stockpile.
The mystery sent journalists, diplomats and non-proliferation experts scouring satellite images, state news outlets and unverified social media feeds for clues about Kim. The hashtag #kimjongundead was the among the top subjects trending globally Saturday on Twitter. The name of his younger sister Kim Yo Jong — a potential successor — was also trending in the U.S.
“Information about the serious state of health of our Marshal Kim Jong Un is false and malicious,” Korean Friendship Association head Alejandro Cao de Benos said in a tweet Saturday. Cao, who was featured in the 2015 documentary “The Propaganda Game,” didn’t say where he got the information and declined further comment when contacted by Bloomberg News.
Kim similarly disappeared from state media for six weeks in 2014, prompting speculation that he had been sidelined by gout, an ankle injury or was even overthrown in a coup. He subsequently showed up walking with a cane during a visit to a new residential block.
A delegation led by a senior member of the Chinese Communist Party’s International Liaison Department — which manages relations with North Korea — departed Beijing on Thursday, Reuters said, adding it wasn’t able to immediately determine what the trip signaled about Kim’s health. Officials with the U.S. National Security Council declined to comment on Saturday.
Speculation about Kim’s condition accelerated after Seoul-based news site Daily NK, reported April 20 that the North Korean leader was recovering from surgery, citing one unidentified person inside the country. CNN reported a short time later that Kim was in “grave danger.”
Trump has since said he believed the CNN report was “incorrect,” saying he heard “they used old documents.” South Korean officials said repeatedly last week that they believed Kim was conducting “normal activities” in a rural part of the country assisted by close aides, and that they detected no unusual movements by the regime.
The presence of Kim’s train in Wonsan, about 230 kilometers (143 miles) east of Pyongyang, potentially fits with the South Korean account. The area has received intense interest from Kim in recent years, hosting an expanding leadership compound, a large tourism development project and numerous weapons tests.
The train, which Kim took to his failed summit with Trump in Hanoi, arrived at a nearby railway station on or before April 21, 38 North wrote, citing satellite imagery. The train was spotted again at the station on April 23, and appeared to be repositioned for departure.
North Korea’s eastern coast saw a burst of military activity on April 14, including cruise missile tests and fighter jet maneuvers, that at the time appeared to be timed to coincide with South Korean parliamentary elections. The next day, Kim was absent from events marking his grandfather’s birthday, known as the Day of the Sun and North Korea’s most politically significant holiday.
Although state media has continued to publish messages exchanged between Kim and dignitaries, such as a letter sent to Syrian President Bashar al-Assad on Wednesday, reports included no fresh images and made no mention of new events attended by the leader. Kim was similarly missing from events Saturday marking the anniversary of the Korean People’s Revolutionary Army, although he also didn’t attend the events last year.
More coronavirus coverage from Fortune:
—Bill Gates explains how to beat the coronavirus pandemic
—The U.S. is learning why limiting hospital beds carries a steep cost
—Instacart to hire 250,000 more workers amid soaring demand
—What to know if your small business is applying for Round 2 PPP loans from the SBA
—14% of women considered quitting their jobs because of the coronavirus pandemic
—The 3-pronged approach to defeating the coronavirus
—Why the coronavirus crisis makes moral leadership more important than ever
—PODCAST: COVID-19 might have upended the concept of the best companies of the year
—VIDEO: 401(k) withdrawal penalties waived for anyone hurt by COVID-19
Subscribe to Outbreak, a daily newsletter roundup of stories on the coronavirus pandemic and its impact on global business. It’s free to get it in your inbox.


fortune--2020-04-27--NBA’s Los Angeles Lakers return $4.6M in PPP small business loans to the SBA

IRS stimulus check portal : Try this trick if you are still getting ‘ payment status not available ’

Playing “small ball” might be en vogue in the NBA, but the Los Angeles Lakers may have taken things too far.
The Lakers have returned approximately $4.6 million in loans received through the Small Business Administration’s Paycheck Protection Program, the NBA team told ESPN on Monday. Despite being one of the most valuable teams in American sports (with an estimated worth exceeding $4 billion) and one of the most profitable in the NBA, the Lakers were still able to apply for and receive millions in aid through the PPP.
The news will raise further questions about the integrity of the federal government’s flagship program for assisting small businesses through the economic shutdown prompted by the coronavirus pandemic. A surge of initial applications saw the $350 billion program quickly depleted of funds, which prompted Congress to approve additional funding for the PPP last week.
The likes of AutoNation and Shake Shack—large companies valued at billions of dollars—were among those to initially receive PPP assistance, leading to negative scrutiny of the program’s oversight and prompting those companies to return millions of dollars in loans.
“Once we found out the funds from the program had been depleted, we repaid the loan so that financial support would be directed to those most in need,” the Lakers said in a statement to ESPN. “The Lakers remain completely committed to supporting both our employees and our community.”
The NBA franchise—which is owned by the Buss family and counts superstar LeBron James among its players—employs around 300 people, according to ESPN. That made the team eligible for a PPP loan, so long as it spent 75% of the funds on payroll and did not lay off any employees.
While the coronavirus pandemic has brought the NBA (and virtually all major profressional sports leagues) to a halt, the Lakers appear to remain on solid financial footing. In addition to carrying an enviable valuation as one of the league’s flagship franchises, the team’s lucrative local broadcast rights deal generates more than $150 million in revenue annually, per ESPN.
The identity of the financial institution through which the Lakers received their PPP loan is not clear. Representatives for the team did not immediately return a request for comment.
With the oversight of the PPP being called into question given the number of large businesses able to secure funds, the government has looked to take a more diligent approach in advance of the second round of loan disbursements set to begin this week. On Thursday, the SBA issued a new guidance discouraging large, publicly-traded, and well-capitalized companies from applying for the program.
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More must-read stories from Fortune:
—What the law says about forcing employees back to the office
—A.I. will be crucial to non-tech companies—and they need a new playbook for it
—Which companies’ stocks will thrive after the coronavirus crash?
—Everything you need to know about furloughs and what they mean for workers
—What to know if your small business is applying for Round 2 PPP loans from the SBA
—PODCAST: COVID-19 might have upended the concept of the best companies of the year
—WATCH: Why the banks were ready for the financial impact of coronavirus
Subscribe to Outbreak, a daily newsletter roundup of stories on the coronavirus pandemic and its impact on global business. It’s free to get it in your inbox.