fortune--2020-04-02--The Coronavirus Economy: When you’re a farmer who supplies now-closed restaurants

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On his father Glenn’s side, Ian Brendle’s family goes back six generations in agriculture. The Brendles’ sustainability-focused farm, Green Meadow, spreads out across 22 acres of Lancaster County, the south-central Pennsylvania district boasting the most productive nonirrigated farmland in the U.S. “One in every five jobs in Lancaster County is ag-based,” Brendle says.
The county has been a literal lifeline for Philadelphia from the days Hamilton hung around Independence Hall; Lancaster Avenue, stretching 60 miles between town and country, was established so farmers could deliver their goods. Brendle continues in that tradition, running delivery trucks (two in the winter, up to four in the high growing seasons) every Thursday from Green Meadow to 120 chef clients—nearly all of whose restaurants have been temporarily closed by the coronavirus pandemic.
Fortune spoke with Brendle for a new series, The Coronavirus Economy, to ask about how COVID-19 has affected his employment status and his plans for the future, and to get a sense of how he is handling this news both emotionally and financially. The following interview has been condensed and lightly edited.
Ian Brendle’s family goes back six generations in agriculture. Ian Brendle
Fortune: How did Green Meadow get started?
Brendle: My dad was born into farming, then went to college and worked in engineering, but he always kept a half-acre garden. One day he decided farming was what he wanted to do. He started by taking Amish guys down to Reading Terminal Market back in the late ’70s, early ’80s, then he asked if he could bring a few items from his garden to sell. It just sort of grew from there. Chefs would come in and buy stuff from him to use at the restaurants, and eventually he took an old pickup truck, threw a box on it, and started taking stuff into the city.
Was there much interest in local, sustainably grown produce back then?
When my dad first started, it was really a tough sales pitch to try to charge twice the amount of money for the same type of thing [chefs] would buy down at the produce junction. It took explaining, “Well, hey, I just picked this yesterday. So it’s only been out of the ground since yesterday. If you take care of it, you’ve got two weeks until you have to use it as opposed to something that’s shipped in that could have been picked 10 or 14 days before the time that you receive it.” So that was really the selling point that he drove home early on, then just kind of built on that.
When did things really take off for the farm?
The wholesale business was already in place before I decided to make [farming] my livelihood around the early 2000s. That’s when you could say it really exploded, and I saw more and more people really, really being into where the food came from. Our weekly order list goes out to about 650 individual email addresses, and about 120 order consistently through the year. At slow times, like right after the holidays, we might only have 35 or 40 deliveries. Then at the height, late summer into early fall, we’re looking at up to 75 deliveries to make in one day.
The mid-Atlantic is on the precipice of spring—fruit trees are flowering, ramps are popping. What’s the mood like on the farm?
Dealing with the uncertainty, not being able to just go 100% full bore into spring season has definitely been a real kick in the ass. The week before everything went down, we made 53 deliveries. The restaurants that are doing takeout and delivery are still ordering. I would say that represents 10% of our typical business. We also use recycled fryer oil from restaurants to power our greenhouses, and that’s not available now. We have enough for the rest of this season, but if we don’t have a stockpile built up for winter, we’re missing out huge.
What’s the economic impact of that for a small family farm like Green Meadow?
In good times, it’s incredibly hard to make money farming. I think one of the reasons why farmers and chefs get along so well—and I think, as a whole throughout the country, farmers and chefs get along really well—you pour everything you have into [a farm or a restaurant] both financially and psychologically, and you get very little financial return. I really feel like the U.S. government was caught with its pants down. If there was ever a more glaring notification to everyone that things truly need to change in this country, this is it.
Is that a common sentiment among the farmers in your area?
Besides the people who grow stuff for us, I don’t really talk to other farmers in my area. Since Trump has been in office, I’ve let my feelings be known. My dad and I and our crew here, we are not the norm in agriculture in Lancaster County.
Green Meadow supplies 120 chef clients—nearly all of whose restaurants have been temporarily closed by the coronavirus pandemic. Ian Brendle
With chefs as Green Meadow’s primary customers, how are you adapting the farm’s business?
So basically, as everything was going down, my right-hand man, Dave Carr, he was like, “Dude, let’s just do a produce box for the public.” I know doing a farm share or farm box or CSA is nothing new, but it’s totally new to us—fish out of the water for real. We’re doing a $30 single farm box and a $55 double farm box, as well as meat and dairy boxes, and have four pickup locations in and around Philly.
What’s in a typical farm box?
Right now, more than ever, everyone’s immune system needs to be as boosted as possible, so we’re going to be putting in things we grow that are naturally antiviral or really good for your immune system. This week, for example, we’ll have holy basil and shungiku, which is a Japanese chrysanthemum and used in parts of Asia as a cold tonic. Honey. Mushrooms. All the rabes, which are incredibly nutritious and taste good, too.
Do you think the boxes will help carry the farm during this time?
We have about 60 sign-ups so far and are hoping to get to about 100, but honestly I’m not even thinking about ourselves right now. I’m thinking about our butcher, who’s got a mortgage and bills to pay, and our network of 15 to 20 farmers who also grow for us. I’ve got an egg guy, John B. King, who increased his flock for me last year. This is when chickens start to go into cruise control, and he’s got to move those eggs. We need to stay afloat so that we don’t lose our ass, but we also have to help as many other people along the way as we can.
Does working so closely with nature on the day to day give you a different perspective on the situation?
I think anyone that works in the elements or works outside would say it does. I think this is a time where we’re able to reflect and realize we all take things for granted. This is that time in our history where we’re going to look back and be like, “Man, up until that point we took so much for granted.” And hopefully we change.
What does the planting plan look like moving forward?
We’re still going to do all the same shit that we were going to do. We might dip a little bit more into the acreage for corn and grain, but we’re still putting tomatoes out, still putting peppers out. I just need to deal with the unknown of whether I am going to be able to sell 18 boxes of peppers in July. But we’ll keep farming our ground. We’ll keep going till the wheels fall off, man.
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fortune--2020-04-02--Don’t expect an easy flight refund for your canceled trip during the coronavirus pandemic

Millions of Americans won ’ t be able to pay all their bills this month .
What financial experts advise

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Airlines grappling with their biggest peacetime crisis face a European Union legal headache after offering customers vouchers instead of immediate refunds for flights canceled amid the COVID-19 pandemic.
Consumer groups say the offers—intended to preserve dwindling cash balances—flout the bloc’s rules, which insist passengers should get to choose a voucher or a full repayment. It isn’t clear if airlines breach those rules by offering a voucher today with a promise of a refund in a year’s time if unused.
“Airlines must refund canceled flight tickets,” EU Transport Commissioner Adina Valean said in an emailed statement on Wednesday in Brussels. “They can of course also offer a voucher but—and this is very important—only if the customer agrees to accept this. If the customer does not want a voucher or other proposed solution, the company must reimburse.” She didn’t address the issue of delayed refunds.
EU law requires reimbursements to be made within seven days. The legislation, which dates to 2004, sets no time limit for the validity of travel vouchers.
The Dutch arm of Air France-KLM is among several carriers handing out credits for flights it canceled, in line with Dutch rules that insist passengers can get their money back if the vouchers aren’t used within 12 months, said KLM spokeswoman Marjan Rozemeijer. The company wouldn’t give the value of vouchers it’s issued.
Under the EU legislation, a money-back option arises only when a flight is grounded by an airline. Passengers who cancel their own flights might be offered vouchers by the carriers but aren’t legally entitled to a refund even if the vouchers go unused.
Thousands of flights have been canceled in Europe since governments imposed travel bans to halt the spread of the virus, hitting business travel, spring ski trips and Easter school holidays. While many airlines are paying customers back, some aren’t, bolstered by consumer rules in the Netherlands and Belgium that allow them to hand over a voucher for a future flight. Airlines will burn through as much as $61 billion worldwide in the second quarter, the International Air Transport Association says, with revenue set to plummet by 68%.
European air passengers already benefit from some of the world’s toughest compensation rights, receiving meal vouchers for short flight delays and able to claim compensation even for onboard coffee spills. Airlines have fought dozens of legal battles at the EU’s top court to clarify when exactly they need to pay out for flight delays, cancellations or boarding issues.
Air France-KLM and its Transavia arm along with others including Portugal’s TAP “aren’t giving their customers a choice” and “the passenger risks accepting a voucher from a company that could go bankrupt,” Belgian consumer association Test-Achats said in a statement on Wednesday. It said it’s sent these companies a warning to make changes within eight days.
Special guarantee
EasyJet Plc, Deutsche Lufthansa AG, and its Brussels Airlines unit don’t mention the possibility of a refund on their website, Test-Achats said, asking them to clarify their position. It’s also asking the Belgian government to create a special guarantee for vouchers that would encourage passengers to accept them.
EU Consumer Affairs Commissioner Didier Reynders last week said regulators are working with EU nations “for guarantees to encourage consumers to accept the vouchers.” Passengers should have the right to “choose between a full refund or a voucher to reschedule” their trip if they have a package holiday canceled, he said in a March 24 tweet.
#COVID-19: If your package holiday is cancelled, you can choose between a full refund or a voucher to reschedule your trip later. @EU_Commission is working with member states for guarantees to encourage consumers to accept the vouchers (1/2) — didier reynders (@dreynders) March 24, 2020
Even March 18 EU guidelines on passenger rights don’t make clear whether a delayed refund would flout the European rules. The EU cited vouchers as an option when urging travelers to “consider accepting that their package tour is postponed to a later point in time.”
Complaint forms are hidden on airline websites, phone numbers are unavailable or very difficult to reach, said European consumer organization BEUC in a letter to the EU’s Valean.
Passengers are also complaining that airlines are offering new re-bookings with “unrealistic” deadlines that would push them to travel this summer, which may not be wise if the virus hasn’t abated by then, BEUC said.
The EU should ensure vouchers are valid for at least two years, it said. People are also being told to pay the difference for new flights or not given a refund for flights at a later date that cost less.
$4.4 billion
Lufthansa is allowing passengers to rebook and issuing vouchers that can be used once air transport is moving again. The company wouldn’t disclose its current potential liability from tickets, but the firm’s annual report put the number at more than 4 billion euros ($4.4 billion) at the end of last year.
“Basically, we are trying to push as many vouchers as possible and not allow for cancellations just to be refunded immediately,” Lufthansa Chief Financial Officer Ulrik Svensson said on the company’s earnings call on March 19.
A spokesman for TAP said the Portuguese airline is reimbursing the cost of the canceled flights through vouchers. It also offers the possibility of rescheduling the flight. Passengers with a voucher have one year to make the reservation, and then another year to use the trip.
EasyJet said customers can claim a refund through its call center, acknowledging that there are currently “higher than average wait times.”
The company said “these entitlements will be available long after their canceled flight has flown.” Customers can change flights to a later date—even if the flight wasn’t canceled—and the airline is taking bookings until Feb. 28 next year.
Transavia said it was issuing vouchers to passengers. A direct refund “isn’t possible” because it’s an extraordinary situation that has hugely affected the travel industry, spokeswoman Claudia Metz said.
The Dutch government supports the use of vouchers “because the passenger retains the right to a refund of the ticket, and it avoids airlines come into even greater financial distress,” Dutch Infrastructure Minister Cora van Nieuwenhuizen said in a note on Monday.
The German government said on Thursday that airlines and tour operators should be allowed to offer vouchers valid until Dec. 31, 2021 and that, if they aren’t redeemed by this date, tickets should be refunded in full.
The EU’s Valean said the European Commission, which has loosened state-aid rules for companies amid the virus crisis, is now “assessing the liquidity needs” of airlines to see if it’s necessary to take other action to help them.
France won’t leave Air France-KLM “alone in the face of the violent crisis airplane companies are facing now,” French Finance Minister Bruno Le Maire said at a Thursday press conference. He didn’t specify what potential support the nation would give the airline.
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fortune--2020-04-02--College athletic directors brace for financial crisis due to the coronavirus

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Athletic directors at the nation’s biggest schools are bracing for a potential financial crisis related to the coronavirus pandemic.
According to a survey conducted by LEAD1, an association of athletic directors from 130 major college football schools, 63% expect a worst-case scenario in which their revenues decrease by at least 20% during the 2020-21 school year. Even an abbreviated football season could cause schools to lose that much, according to the data released Thursday.
LEAD1 and TeamWorks, a company that created an app designed to help keep teams and athletic departments connected, released the survey of more than 100 ADs from schools in Division I’s Football Bowl Subdivision. “The State of Athletics in the Face of the Coronavirus” provides a sobering glimpse of the top concerns for the biggest athletic departments in the country.
The NCAA canceled winter and spring sports on March 12, separating thousands of college athletes from teammates and coaches and leaving them unable to practice and compete.
Athletic directors surveyed said their greatest concerns about their athletes over the next three months were academic progress, mental health and a lack of resources for them while off campus.
And then there are the financial concerns.
Canceling the men’s Division I basketball tournament cost the NCAA about $375 million it was scheduled to distribute to its member schools.
Asked for their worst-case scenario analysis, 65% of the athletic directors said revenue for the 2019-20 fiscal year would drop from 0-20%, including 35% expecting a decrease ranging from 0-10%.
Some schools are already taking steps to deal with this year’s shortfalls.
Iowa State has announced a one-year, temporary pay reduction for coaches and certain staff to save more than $3 million. The school will also suspend bonuses for coaches for a year to save another $1 million.
“So much has changed in the world in a very short time,” athletic director Jamie Pollard said in an open letter to Cyclones fans. “It is even more daunting to realize our world will keep changing at a rapid pace for the foreseeable future.”
Wyoming athletic director Tom Burman announced on Twitter that he would be reducing his salary by 10% through Dec. 31.
In the LEAD1 survey, 40% of the 95 ADs who responded said they approve when asked if they believe high-earners should voluntarily offer to make a personal financial sacrifice during the crisis; about 15% disapproved.
Football season is six months away and for most FBS schools it is by far the biggest revenue driver. Any disruption to the football season could be devastating to college sports because that revenue funds just about every other athletic program.
“We often hear from ADs and MMR (multi-media rights) sellers that around 85% of revenue comes from football,” said Matt Balvanz, senior vice president for analytics for Navigate, a sports marketing consulting firm.
He said the average Power Five school makes around $120 million in revenue per year, “which means roughly $100 million per year from football.”
For the average Power Five team, a home game is worth $14 million, including its value from a television rights deals, which is over 10% of average total revenue, Balvanz said.
“Larger departments can likely absorb a 10% loss, but if that increases to 20% and 30% with more games lost then that could be a major issue,” he said.
Playing games without fan in the stands? Balvanz said the average Power Five school gets some $30 million in ticket sales. If 85% of that is from football, that’s a loss of $25 million.
Athletic directors surveyed by LEAD1 were asked what revenue streams were they most concerned about. Donations and ticket sales received the most votes. Balvanz said a typical Power Five school brings in around $20 million to $30 million per year in donations, which could take a hit in a struggling economy.
Schools in Group of Five conferences, that don’t rake in hundreds of millions yearly from their television deals, would be more vulnerable.
Fifty percent of G5 athletic directors in the LEAD1 survey said lost revenue from student fees was among their biggest concerns. Student fees and campus subsidies make up, on average 30% to 50% of revenue from Group of Five schools.
Kansas athletic director Jeff Long told reporters last month his staff was already starting to project how to operate with less.
“What would a 10%, what would a 20% cut in our operations look like?” Long said. “We’ve just started those as part of strategic planning for the future, haven’t made any decisions. Most of that is determined on how far and how long this crisis lasts.”
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—VIDEO: World leaders and health experts on how to stop the spread of COVID-19
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fortune--2020-04-02--Coronavirus ripple effects are changing the Earth’s movement

Life on Earth has slowed so much as a result of the coronavirus pandemic that the Earth might be moving less than it usually does, say scientists in Belgium.
The Royal Observatory of Belgium has taken note of seismic activity across the globe as people stay home and the world’s transportation systems slow and shut down. And they’re saying the lack of vibrations from that movement are giving them clearer insight into other natural disasters.
Specifically, the lack of background noise from cars, trucks, and industrial machinery is letting seismologists better detect smaller earthquakes and more closely monitor volcanic activity. Vibrations caused by human activity in Belgium have fallen by about one-third since lockdown orders were implemented. That’s being replicated in other parts of the world, though not all areas will see such a precipitous decline.
Ultimately, say scientists, that could make it easier to detect the location of earthquake aftershocks and determine levels of volcanic activity.
The drop is also being experienced in both London and Los Angeles. One geophysics graduate student referred to it as “seriously wild.”
Here's daily mode noise power from a station in Los Angeles over the past month; the drop is seriously wild.
Graph made on IRIS MUSTANG: https://t.co/aTfnmL6kBB pic.twitter.com/rdgzZxMcAU — Celeste Labedz (@celestelabedz) March 26, 2020
Micro earthquakes occur frequently throughout the planet, but are sometimes harder to track because of the background noise from human activity. The U.S. Geological Survey’s Volcano Hazards Program, a division of the Department of the Interior, notes that in Yellowstone alone there are approximately 2,000 quakes per year.
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fortune--2020-04-02--Starbucks rival Luckin Coffee plunges 81% as it reveals probe into cooked-up sales

Luckin Coffee Inc. plunged as much as 81% on Thursday after the company said its board is investigating reports that senior executives and employees fabricated transactions.
The company’s announcement that Chief Operating Officer Jian Liu and several employees reporting to him engaged in misconduct casts doubt on the foundations of the Chinese coffee chain’s meteoric rise and its emergence as a key competitor to Starbucks Corp.
Liu and others have been suspended and investors shouldn’t rely on previous financial statements for the nine months ended Sept. 30, the company said. The transactions in question occurred last year and totaled about 2.2 billion yuan ($310 million), according to the filing.
“Certain costs and expenses were also substantially inflated by fabricated transactions during this period,” Luckin said, while noting the special board committee investigating the matter hasn’t independently verified the figure.
The coffee chain, founded in 2017, operated about 4,500 stores by the end of 2019 in China, and has aimed to upset Starbucks’ dominance of the Chinese market. Its goal had been to open 10,000 stores by the end of 2021.
The shares plunged after Muddy Waters tweeted on Jan. 31 that the company had a short on the stock after it received what it called a “credible” unattributed 89-page report that alleged accounting issues with the chain and a broken business model. Luckin Coffee denied the allegations.
That followed the company raising $778 million from a share sale and a convertible bond offering in early January, according to people familiar with the deal. The company raised $645 million in a U.S. listing in May 2019.
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fortune--2020-04-02--Joe Biden correctly predicts August delay for Democratic convention

UPDATE: The Democratic National Convention has been postponed until August as the coronavirus continues to spread. The DNC Convention Committee announced the change Thursday.
Prospective Democratic presidential nominee Joe Biden said he thinks his party’s nominating convention will have to be pushed back from July into August because of the coronavirus threat. “It’s going to depend on what kind of action is taken between now and the middle of the summer to change this curve,” Biden said in a Wednesday interview with ABC late-night comedian Jimmy Kimmel.
“I doubt whether the Democratic convention is going to be able to be held in early July, mid-July. I think it’s going to have move into August. … You just have to be prepared for the alternative, and the alternative—we don’t know what it’s going to be.” Those comments are the furthest Biden has gone in predicting a delay for the convention, which would mark the start of the general election campaign. The coronavirus pandemic is forcing Democrats and Republicans to take a close look at whether they’ll be able to move forward as planned with their summer conventions. Democrats are scheduled to convene July 13-16 in Milwaukee. Republicans plan to gather Aug. 24-27 in Charlotte, North Carolina.
In an interview earlier this week with MSNBC, Biden said it’s “hard to envision” a normal convention on that schedule. But the former vice president also noted on “The 11th Hour with Brian Williams” that Democrats “have more time” to figure things out as party officials consider contingencies that could range from an outright delay to making parts of the proceedings virtual so that not as many people attend.
“We were able to do it in the middle of a Civil War all the way through to World War II, have Democratic and Republican conventions and primaries and elections and still have public safety,” Biden said on MSNBC. “We’re able to do both.”
Republicans, meanwhile, are expressing confidence they can pull off their convention as scheduled, but party Chairwoman Ronna McDaniel still allows for the possibility that the pandemic could upend GOP plans.
Neither Democratic nor Republican leaders want to sacrifice the boost that can result from an enthusiastic convention gathering. President Donald Trump thrives on big rallies and has obviously missed that part of his routine amid the coronavirus outbreak, reluctantly turning the Rose Garden and the White House briefing room into substitutes. A traditional convention, with a nationally televised nomination acceptance speech, could be even more critical for Biden, who has been relegated recently to remote television interviews from his Delaware home, unable to draw the kind of spotlight that a sitting president commands.
Democratic National Committee authorities based in Milwaukee are exploring various options should social distancing recommendations still be in effect in the summer months. Convention CEO Joe Solmonese hasn’t publicly detailed any specifics, promising only that “we will balance protecting the health and well-being of convention attendees and our host city with our responsibility to deliver this historic and critical occasion.”
Democrats originally scheduled their convention ahead of the Summer Olympics. But the international games have been postponed until 2021, opening several weeks on the summer television calendar if they could logistically manage a delay. Tradition dictates that Democrats, as the party out of power, hold their convention first.
Solmonese and his aides are expected in the coming weeks to present party Chairman Tom Perez with options. But Democrats’ lingering nominating contest could complicate what happens next. Biden holds a prohibitive delegate lead that makes him the prospective nominee, but Vermont Sen. Bernie Sanders remains in the race and insists he has a “narrow” path to the nomination.
With many states pushing back their primaries, Sanders potentially could block Biden from accruing the required delegate majority until late June, just weeks before the current convention dates.
In a typical election, a convention effectively belongs to the nominee, so Perez would be reluctant to make substantial changes to the model without the candidate’s approval. But he’s also cognizant of Sanders supporters who still distrust DNC leadership after the bitter 2016 nominating fight that Sanders lost to Hillary Clinton.
The bottom line, Biden said, is that “we should listen to the scientists” and that the 2020 election, from conventions to voting methods, “may have to be different.”
Republicans don’t face the internal party uncertainty, though they still must weigh the same public health scenarios.
McDaniel, the RNC chairwoman, said she thinks “we should be out of this” by the end of August. In an interview, she said Republicans already have raised the money necessary for the convention and have the staff hired and in place.
“We’re ready to go,” she said. “This isn’t something that’s going to stop us.”
Still, she added a caveat: “Obviously, science will dictate that.”
Other aspects of the presidential campaign, meanwhile, continue unabated by the pandemic.
America First Action PAC, a Republican super political action committee backing Trump’s reelection, announced a $10 million ad buy that will start in mid-April and continue throughout May in Michigan, Wisconsin and Pennsylvania. The digital, television and direct mail investment is the PAC’s first spending against Biden, and it comes in key markets in the three states that provided Trump with his Electoral College margin in 2016.
Priorities USA, the largest Democratic super PAC, responded by adding $1 million to existing ad buys in that crucial trio of states.
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fortune--2020-04-02--The drama at WeWork as SoftBank scraps their $3 billion deal

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SoftBank officially scrapped a deal to buy up to $3 billion in stock from existing WeWork shareholders.
Late last year, the Japanese telecom giant agreed to acquire shares as part of a wider bailout package for office-sharing startup, after the company’s attempt at a debut on the public markets fell flat.
But now, citing its fiduciary duty to its own shareholders, SoftBank says such a deal would be “irresponsible.” In a press release, SoftBank noted WeWork’s ongoing criminal and civil investigations, WeWork’s failure to close a China joint venture, and the impact of coronavirus on a largely physical business.
The deal would have given former CEO and co-founder Adam Neumann nearly $1 billion for his shares alone, even as the company itself laid off thousands of workers. In its most recent release, SoftBank leaned hard into that oft-criticized narrative. The telecom giant pointed to its $14.25 billion investment in WeWork, emphasizing that Neumann “stood to benefit the most from the tender offer.”
“Together, Mr. Neumann’s and Benchmark’s equity constitute more than half of the stock tendered in the offering. In contrast, current WeWork employees tendered less than 10% of the total,” SoftBank’s release read. Benchmark was another investor.
In a statement, Benchmark’s Bruce Dunlevie and former Coach CEO Lew Frankfort, as part of WeWork’s Special Committee of the Board of Directors, said they were “surprised and disappointed” and will “evaluate all of its legal options, including litigation.”
Meanwhile, SoftBank investment partner Kirthiga Reddy sits on WeWork’s board alongside the duo, as does WeWork CEO Marcelo Claure, a SoftBank executive himself.
It’s certainly a blow to Neumann and Benchmark. But does that mean SoftBank will tender a new deal—one that is kinder to employees?
At any rate: Talk about awkward.
The new man at the helm of T-Mobile: SoftBank-backed T-Mobile merged with Sprint on Thursday, putting a new CEO at the helm: Mike Sievert. While his predecessors may be reminiscent of startup land founders (goodbye suits and ties, hello big personalities), Sievert gives off a little more of a “suburban dad vibe,” as my colleague Aaron Pressman put it in an interview with him.
VENTURE DEALS
- iTeos Therapeutics, a Cambridge, Mass. and Belgium-based biotech focused on cancer immunotherapies, raised $125 million in Series B2 funding. RA Capital Management and Boxer Capital led the round, and were joined by investors including Janus Henderson Investors, RTW Investments, and Invus.
- Collibra, a New York and Brussels-based data compliance company, raised $112.5 million in funding for a post-money valuation of $2.3 billion. ICONIQ Capital and Index Ventures and Durable Capital Partners led the round, and was joined by investors including Henry Ellenbogen. Existing investors Battery Ventures, CapitalG and Dawn Capital also participated in the round.
- Pandion Therapeutics, a Cambridge, Mass-based biotech focused on modular protein therapeutics for autoimmune disease, raised $80 million inSeries B funding. Access Biotechnology and Boxer Capital led the round, and were joined by investors including RA Capital and OrbiMed.
- Aspen Neuroscience, a San Diego biotech firm focused on autologous neuron replacement therapy to treat Parkinson disease, raised $70 million in Series A funding. OrbiMed led the round, and was joined by investors including ARCH Venture Partners, Frazier Healthcare Partners, Domain Associates, Section 32, and Sam Altman.
- MedGenome, a U.S. and India-based genetic diagnostics firm, raised $55 million in Series D funding. LeapFrog Investments led the round, and was joined by investors including Sofina and Sequoia Capital. Read more.
- Notion, a San Francisco-based workplace productivity platform, raised $50 million in funding from Index Ventures and others, valuing it at $2 billion valuation. Read more.
- AM-Pharma B.V., a Netherlands-based clinical stage biopharmaceutical company focused on acute kidney injury, raised €47 million ($52 million). Cowen Healthcare Investments led the round.
- Enovix Corporation, a Fremont, Calif.-based 3D Silicon Lithium-ion Battery company, raised $45 million in funding.
- Orion Labs, a San Francisco-based communication and automation platform for mobile workforces, raised 29 million in Series B funding. Dell Technologies Capital led the round, and was joined by investors including WRVI Capital and existing investors including Avalon Ventures, Argentum Capital Partners, Allen and Company, and Mathers Associates.
- Phantom AI, a Burlingame, Calif.-based autonomous driving platform developer, raised $22 million in Series A funding. Celeres Investments led the round, and was joined by investors including Ford Motor Company and KT. Existing investors Millennium Technology Value Partners and DSC Investment also participated.
- Zucara Therapeutics Inc., a Toronto-based diabetes life sciences company, raised $21 million in Series A funding. Perceptive Xontogeny Venture Fund led the round.
- BigRentz, an Irvine, Calif.-based construction equipment rental marketplace, raised $15 million in funding. ITOCHU Corporation led the round.
- Pulse, a San Francisco-based social research platform for CIOs and tech executives, raised $6.5 million in Series A funding. AV8 Ventures led the round.
- ModelOp, a Chicago, Ill.-based provider operations modelling software, raised $6 million in Series A funding. Valley Capital Partners led the round, and was joined by investors including Silicon Valley Data Capital.
- Plum Lending, a San Francisco, Calif.-based commercial real estate lending company, raised $2 million in funding. Resolute Capital Partners was the investor, joining Elliott Management and SoftBank.
- Mutable, a New York-based public cloud provider, raised $1.5 million in seed funding. Lunar Ventures and Fly Ventures invested, and were joined by Momenta Ventures, Acequia Capital, and Charlie Songhurst.
PRIVATE EQUITY
- L Catterton made a “significant investment” in ETVOS Co., an Osaka, Japan-based natural cosmetics brand. Financial terms weren't disclosed.
- HGGC acquired PCF Insurance, a Woodland Hills, Calif.-based insurance brokerage, Financial terms weren't disclosed.
- Pine Island Capital Partners and Bain Capital Credit acquired Precinmac Precision Machining, a manufacturer of machined components for companies in the aerospace and defense, semiconductor, and general industrials sectors in the U.S. and Canada. Compass Partners Capital helped arrange the transaction and is also investing. Financial terms weren't disclosed.
- KKSP Precision Machining, backed by Mill Point Capital, acquired Prime Engineered Components, a Watertown, Conn.-based maker of aluminum, brass and stainless steel custom metal components. Financial terms weren't disclosed.
- Francisco Partners completed its acquisition of Smith Technologies, a pharmacy technology and public sector software maker, from Asheville, N.C.-based J M Smith Corporation.
OTHERS
- Koch Engineered Solutions, a unit of Koch Industries, acquired Sentient Energy, a Burlingame, Calif.-based provider of line sensors and grid analytics software for the energy industry. Financial terms weren't disclosed.
- Rubicon Project (NYSE:RUBI), an advertising platform, completed its merger with Telaria (NYSE: TLRA), a video management platform. Financial terms weren't disclosed. The company will remain on the New York Stock Exchange as “RUBI.”
- Valsoft Corp acquired MacPractice, a Lincoln, Ne.-based macOS and iOS-based management software for medical practices. Financial terms weren't disclosed.
EXITS
- Nestle Purina acquired Lily’s Kitchen, a London-based natural pet food brand, from L Catterton. Financial terms weren't disclosed.
- Stone Canyon Industries Holdings acquired Kissner Group Holdings , an Overland Park, Ka.-based salt producer, from Metalmark Capital Holdings and Silvertree‐KMC II LP (a venture between Silverhawk Capital Partners and Demetree Salt). The price was $2 billion.
- KKR paused plans to sell Goodpack, a Singapore-based provider of shipping containers and logistics services, due to the coronavirus, Reuters reports citing sources. Read more.
F + FS
- BIP Capital raised $101 million for its Venture Fund IV.
PEOPLE
- KKR named Hidekazu Harada a Managing Director on KKR’s Private Equity team in Tokyo.
- Sofinnova Investments promoted Maha Katabi to General Partner and Sarah Bhagat to Partner.
- HGGC promoted Dan Stanko from Principal to Partner.
- BIP Capital promosted Dan Drechsel to General Partner.


fortune--2020-04-02--A record 6.6 million people apply for unemployment benefits

More than 6.6 million Americans applied for unemployment benefits last week—doubling a record high set just one week earlier—a sign that layoffs are accelerating in the midst of the coronavirus.
The stunning report Thursday from the Labor Department showed that job cuts are mounting against the backdrop of economies in the United States and abroad that have almost certainly sunk into a severe recession as businesses close across the world.
The figure for last week is much higher than the previous record of 3.3 million reported for the previous week. The surging layoffs have led many economists to envision as many as 20 million lost jobs by the end of April. The unemployment rate could spike to as high as 15% this month, above the previous record of 10.8% set during a deep recession in 1982.
Many employers are slashing their payrolls to try to stay afloat because their revenue has collapsed, especially at restaurants, hotels, gyms, movie theaters and other venues that depend on face-to-face interaction. Auto sales have sunk, and factories have closed.
Stay-at-home orders, imposed by most U.S. states, have intensified pressure on businesses, most of which face rent, loans and other bills that must be paid.
Congress significantly expanded the unemployment benefits system in last week’s $2.2 trillion economic rescue package. That legislation added $600 a week in jobless aid, on top of what recipients receive from their states. This will enable many lower-income workers to manage their expenses and even increase their purchasing power and support the economy.
It also makes many more people eligible for jobless aid, including the self-employed, contractors, and so-called “gig economy” workers such as Uber and Lyft drivers.
Kathryn Lickteig, a cook in Kansas City, signed up for unemployment compensation last week after the city shut down dine-in restaurants. She is hopeful that the extra $600 will help her ride out the shutdown instead of having to look for an interim job.
“It has eased my mind so much,” she said. “I do not have to actively go out and expose myself to the public and possibly get sick. I can stay home now and do my part in social distancing.”
The legislation will also help fund unemployment benefits for workers whose hours have been cut. That would enable these people to replace some of their lost income with unemployment aid even as they keep their jobs.
About 26 states allow workers with reduced hours to claim benefits. Most economists support doing so because it encourages companies to cut back on hours rather than lay off workers. Any program that encourages companies to maintain connections with their workers can help the economy rebound faster after the virus outbreak is contained.
Typically, people who receive jobless aid are required to actively look for a new job and to document their searches. But Congress has passed other legislation that encourages states to drop that requirement, given that so many businesses are closed, and most Americans have been ordered to stay mostly at home.
Mark Zandi, chief economist at Moody’s Analytics, said this week that just 6% of companies surveyed by Moody’s say they’re hiring—down dramatically from 40% in the weeks preceding the coronavirus outbreak. The plunge in hiring underscores the difficulty that anyone out of work would have finding a new job.
On Friday, the government will issue the March jobs report, which economists forecast will show a loss of 145,000 jobs. That report is based on data gathered mostly before the spike in layoffs began two weeks ago. Though relatively small, that loss would still end a record-long 113-month streak of job growth.
Numerous state unemployment agencies have struggled to keep up with the flood of applications for jobless benefits. New York’s Labor Department asks people to file on different days depending on their last names. Monday, for example, is reserved for those last names that start with A through F.
More must-read personal finance coverage from Fortune:
—Millions of Americans won’t be able to pay their bills this month. What financial experts advise
—Everything you need to know about the coronavirus stimulus checks
—5 things to know about unemployment benefits in the COVID-19 stimulus package
—Everything you need to know about furloughs—and what they mean for workers
—How to defer your student loan payment due to coronavirus
—What to do if you’re worried about getting laid off
—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEO
—WATCH: U.S. tax deadline moved from April 15 to July 15
Subscribe to Fortune’s Bull Sheet for no-nonsense finance news and analysis daily.


fortune--2020-04-02--Startups could suffer even more than they did in 2008 or 2000

This is the web version of Data Sheet, Fortune’s daily newsletter on the top tech news. To get it delivered daily to your in-box, sign up here.
Nearly a month ago, at least one cherished reader wondered by email if Sequoia Capital might have been overreacting, and if I might have been adding fuel to the fire, when I wrote about the venture-capital firm’s March 5 blog post, “Coronavirus: The Black Swan of 2020.”
Sadly, Sequoia was alarmed but hardly alarmist.
The startup scene in Silicon Valley is being ravaged. Erin Griffith, writing in The New York Times, tallies more than 50 companies that have fired or furloughed about 6,000 employees in mere weeks. I hadn’t heard of many of the companies Griffith mentions. That’s normal. In boom times, most startups have little reason for being and are destined to die a natural death before too long. Many of Silicon Valley’s proponents find this charmingly Schumpeterian. But a few are legitimate companies whose businesses are now evaporating. Fitness class repackager ClassPass, for example, has seen 95% of its business dry up.
In a manner of weeks, the tech scene has begun to feel not so much like 2008 but like 2000, when out-of-work youngsters attended “Recession Camp” and a website devoted its coverage to companies that had gone under. (Readers of a certain vintage will enjoy this brief trip down memory lane.) Now, writes Griffith, sites and newsletters are catering to laid-off techies.
The attacks of 9/11 deepened an ongoing recession after the dot-com bust, and a housing-price collapse triggered the financial crisis that in retrospect barely dented Silicon Valley. A month after the economic warning signs first appeared, it feels like the calamity of 2020 could be worse than either of these shocks.
***
Are there things you left in your office that you wish you’d grabbed before that last day? I failed to bring home a review copy of the new book by Netflix CEO Reed Hastings and co-author Erin Meyer No Rules Rules: Netflix and the Culture of Reinvention. It was set to be published May 12th, but as for many spring publications, that date is now off. Netflix says Hastings now hopes to publish the book in the fall.
Adam Lashinsky
@adamlashinsky
adam.lashinsky@fortune.com
This edition of Data Sheet was curated by Aaron Pressman.
NEWSWORTHY
I see skies of blue and clouds of white. Home networks are about to get a big boost. The Federal Communications Commission said Wednesday that it's moving to open the 6 GHz band for unlicensed use. The whole band. "By doing this, we would effectively increase the amount of spectrum available for Wi-Fi almost by a factor of five," the agency said. Consumers will need to upgrade to new compatible Wi-Fi gear once the agency opens the band, however.
Shoot first, shoot fast, shoot well. In other speed-up news, Intel announced new high-performance processors for laptops dubbed Comet Lake with a record-breaking top speed of 5.3 GHz and Nvidia debuted its fastest-ever mobile graphics chips as "Super" versions of its RTX 2000 line.
#finally. It took about as long as an elephant pregnancy lasts, but T-Mobile and Sprint finally closed their merger to create a third mega-carrier in the U.S. wireless market. The closing also marked a leadership transition, as CEO John Legere handed the top job to Mike Sievert. The combined company, which had $78 billion of revenue last year, will trail AT&T and Verizon by most metrics, but for how long? “We have the potential to become No. 1," Sievert tells Fortune.
Don't do as I say. Recall way back on Monday when Amazon said it fired warehouse worker and labor organizer Chris Smalls for not following social distancing rules? Seems Amazon itself hasn't been enforcing social distancing at recent hiring and employee orientation events, Bloomberg reports. Amazon said it has since changed its policy and holds all new hire events virtually.
One less pitchfork needed. We were all outraged last fall when SoftBank Group's bailout for WeWork included $1 billion for former CEO Adam Neumann, so should we celebrate now that the deal is now off?
Another pitchfork to put down. Bit by bit, perhaps to ease regulatory scrutiny, Apple is relaxing some of its most egregious policies around mobile apps. This week, Amazon's video app got permission to let users rent movies right in the app without Apple collecting a 30% transaction fee. Imagine that. Hopefully, Kindle app users will be able to buy ebooks in that app soon, as well.
FOOD FOR THOUGHT
As we've covered a few times at Fortune, the pandemic has forced schools to close across the country, prompting a massive shift to remote and online learning. Wall Street Journal reporters Leslie Brody and Lee Hawkins explore how the changes have impacted 1.1 million New York City public school students and their teachers. Some tough days now may lead to benefits in the future.
Some teachers say the pressure to innovate will improve their skills in the long run. That includes Debra Fisher, an occupational therapist who helps children with disabilities on Manhattan’s Upper West Side. She said she faced a tremendous learning curve handling online tools but has come up with projects using materials on hand. One math game has students color Q-Tips, arrange them in geometric shapes and sort them into piles reflecting fractions.
“This has been an absolutely grueling experience but at the same time an amazingly fantastic one,” Ms. Fisher said. “The students are benefiting because the parents are there in deeper ways.”
IN CASE YOU MISSED IT
Should Apple be allowed to kill one of Android’s best weather apps? By Aaron Pressman
Coronavirus has killed the audacious Xerox-HP deal By Lucinda Shen
Google’s coronavirus relief program for businesses also helps Google By Danielle Abril
Safari browser users report trouble filling out 2020 Census By Chris Morris
The future of shared workspaces and social clubs after COVID-19 By Gabby Shacknai
Everything you need to know about the new 401(k) no-penalty withdrawals in the CARES Act By Lee Clifford
(Some of these stories require a subscription to access. There is a 50% discount for our loyal readers if you use this link to sign up. Thank you for supporting our journalism.)
BEFORE YOU GO
Last night marked the series finale of Syfy's uneven but occasionally brilliant fantasy series The Magicians. Season five has been a bit of a struggle, deeply missing former cast member Jason Ralph, whose character Quentin Coldwater departed last season. Still, the first two seasons and parts of the rest are worth a binge (it's on Netflix). Or for a quieter diversion, Lev Grossman's trilogy of novels that inspired the TV series are worth a read. Stay safe.
Aaron Pressman
@ampressman
aaron.pressman@fortune.com


fortune--2020-04-02--Why we need a government supply-chain office now, more than ever

Panic buying of some consumer goods amid the coronavirus crisis is leading Americans to ask whether the products they need will be available. The answer is an unequivocal yes—as long as manufacturers, retailers, governments, and consumers all work together.
America’s consumer packaged goods (CPG) industry and the 20 million employees who support it are dramatically increasing production to meet unprecedented demand. Our supply chains are performing well and working overtime to deliver critical household staples to help Americans face the coronavirus pandemic. To keep product deliveries flowing and store shelves stocked, we are focusing on several key areas.
First and foremost, we are working with federal and state officials to make sure our critical manufacturing facilities are kept open. We support White House and Centers for Disease Control and Prevention recommendations that limit gatherings. Yet, to protect the reliability of the supply chain, we must keep manufacturing running. Some states and localities have exempted CPG manufacturing facilities, while others have not. This lack of uniformity and consistency places at risk our industry’s ability to respond to consumer needs during a vital time.
To ensure essential products are available, we ask all state and local governments to embrace the Department of Homeland Security’s standards for critical infrastructure. These important standards encourage the exemption of CPG manufacturers from gathering bans and curfews, provided such facilities follow worker safety guidelines established by the CDC and the Occupational Safety and Health Administration. Making these ongoing exemptions uniform across the country will ensure we can continue manufacturing products that are critical to public health and to mitigating the spread of the virus.
Second, we must keep our freight system—trucking and rail—operational and efficient. We commend the Trump administration for temporarily lifting restrictions on hours of service for truck drivers. Drivers are currently spending more time than usual waiting at distribution centers, which counts against their allowable service hours. This measure isn’t to keep truck drivers working around the clock, but instead to provide them the flexibility they need to efficiently transport essential goods across the country. This move, along with clearer and more consistent federal and state policies that allow healthy manufacturing and retail workers to get to their jobs, allows vital links in the supply chain to continue delivering high-demand products to stores and customers, where they are needed most.
Third, we need global supply chains to remain operational. We encourage the administration to swiftly oppose foreign countries imposing bans on exports of critical materials and supplies that are important to protecting health and safety in the U.S. We also encourage a delay on any new regulations that could hinder the delivery of goods or curtail widespread access to critical products. These well-intentioned regulations, like updating the nutrition facts label on food and beverage products, are important, but implementation at this time would require resources that industry should be directing to the crisis.
Now more than ever, we need a central clearinghouse that oversees all elements of a high-functioning supply chain. We ask the administration to create an Office of Supply Chain to coordinate the work of federal agencies and state and local governments that are making decisions about the movement of goods as this crisis evolves. As more and more Americans are asked to self-quarantine, work from home, avoid mass gatherings, and observe bans or curfews, easing constraints on the supply chain will help ensure that necessary products get to consumers as quickly as possible.
These are some of the important steps that must be taken for the U.S. to effectively manage the challenge before us, but the responsibility does not end with the government. All Americans can help. Here are two simple ways:
Buy only what you need for the week ahead. Stockpiling goods keeps products out of our neighbors’ hands, makes it harder for retailers to keep up with restocking, and causes unnecessary anxiety about the availability of goods.
Thank workers on the front lines of America’s food supply chain. Their dedication—supported by responsible actions from government, industry, and everyday Americans—will help our country manage this crisis. We’ll get through this together.
Geoff Freeman is president and CEO of the Consumer Brands Association.
Jeff Harmening is chairman and CEO of General Mills.
More opinion in Fortune:
—The coronavirus has shattered the drug development status quo
—2 things every business must consider before laying off employees in a recession
—There will be another pandemic after the coronavirus. It’s time to start preparing
—Why the coronavirus won’t cause widespread chaos in the U.S.
—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEO
—WATCH: CEO of Canada’s biggest bank on the keys to leading through the coronavirus
Listen to our audio briefing, Fortune 500 Daily


fortune--2020-04-02--The women leading through the coronavirus crisis

This is the web version of the Broadsheet, Fortune’s daily newsletter for and about the world’s most powerful women. To get it delivered daily to your in-box, sign up here.
Good morning, Broadsheet readers! Ivanka Trump talks about the stimulus package, Malaysia’s government urges women not to nag their husbands during a lockdown, and we salute the women leading through the pandemic. Have a peaceful Thursday.
– Leading ladies. Yesterday, Claire wrote about Danish Prime Minister Mette Frederiksen, whose approach to mitigating the coronavirus has shown the world some glimmers of hope.
While finding good news—or even silver linings—is a bit of a struggle these days, I’ve been buoyed by the number of female world, state, and city leaders, who, like Frederiksen, have stepped up during the crisis to support and protect people they represent. Below, just a few of the women who have pinged our radar in the past few days:
Gretchen Whitmer, Governor of Michigan: We’ve all been reading a lot about Whitmer lately as she’s tangled with President Trump over the federal government’s handling of the pandemic. But now it seems she could be stepping into the national spotlight full-time: her name is being floated as a potential Joe Biden VP pick.
Sanna Marin, Prime Minister of Finland: Vogue profiles the 34-year-old Marin, a “millennial feminist environmentalist” who was elected in December and has sprung into action, invoking the country’s Emergency Powers Act to allow for an infusion of public funds for health care and social welfare.
London Breed, Mayor of San Francisco: Breed acted early to issue a shelter-in-place order, a move that’s been credited with keeping coronavirus cases lower than in other U.S. cities. She doubled down on her aggressive stance this week, extending the order to May 3—and suggesting that it may need to continue even longer.
Jacinda Ardern, Prime Minister of New Zealand: Ardern, who imposed a nationwide lockdown, has been getting on Facebook daily to update and “check in” on citizens. In an utterly relatable turn, she sometimes appears in these videos “livestreaming in a sweater from bed.”
Whether clashing with a President, telling their constituents the unvarnished truth, or just checking in with the world in their pjs, the world’s female leaders are not backing down in the face of this crisis—and neither should we.
Kristen Bellstrom
kristen.bellstrom@fortune.com
@kayelbee
Today’s Broadsheet was produced by Emma Hinchliffe.
ALSO IN THE HEADLINES
- Trading up. Sen. Kelly Loeffler made more stock trades than previously reported as the coronavirus pandemic ramped up in the United States. According to financial disclosures covering mid-February through mid-March, Loeffler sold shares in retail stores and bought shares in a company that makes COVID-19 protective garments. Atlanta Journal-Constitution
- Small business stimulus. Ivanka Trump did an interview with Yahoo Finance about the coronavirus stimulus package. Ivanka's signature issue within the package is relief for small businesses, which you can watch her discuss here: Yahoo Finance
- PSA: stop with the PSAs. What helpful tips! Malaysia's Ministry for Women, Family, and Community Development put out a series of online posters advising Malaysian women on how to get through the country's lockdown—specifically, not to nag their husbands and to dress up and wear makeup at home. NPR
MOVERS AND SHAKERS: Kelly Ann Shaw, President Trump’s former trade and economic adviser, is joining Hogan Lovells as a partner.
IN CASE YOU MISSED IT
- Room for two. Some hotels are being used to house domestic violence victims who can't stay in their own homes or people infected with the coronavirus who need to isolate from their families. In the U.K., advocates are proposing pop-up maternity wards in empty hotels to keep pregnant women separate from COVID-19 patients. Guardian
- Hollywood from home. How is Hollywood adapting to conditions during the pandemic? Succession actor J. Smith Cameron, Showtime EVP for scripted programming Amy Israel, filmmaker Liz Garbus, and more told Fortune their new daily schedules and the most challenging part of being at home. Fortune
- Stay safe, RBG! Until Wednesday morning, Supreme Court Justice Ruth Bader Ginsburg was still going to the Supreme Court gym twice a week to work out, her trainer Bryant Johnson revealed. Once D.C. issued a stay-at-home order, Ginsburg finally started doing her workouts at home. The Cut
ON MY RADAR
This boss accidentally turned herself into a potato for a video meeting and couldn't figure out how to fix it BuzzFeed
For victims of domestic violence, stay-at-home orders are a worst-case scenario Cosmopolitan
'A friend to all': Veteran CBS News journalist Maria Mercader died of the coronavirus BuzzFeed
PARTING WORDS
"I thought to myself, I have the support in place to be able to come back. There’s no reason for me to stop just to start a family.”
-U.S. Women's National Team star Alex Morgan on her now-canceled plan to compete at the Olympics three months after giving birth


fortune--2020-04-02--Garmin’s CEO on fending off Apple and Google

Garmin CEO Cliff Pemble is a relatively unassuming leader. The former software engineer enters a room with a quiet presence and humble demeanor. But make no mistake, he leads a tech company worth more than $14 billion.
Like Pemble, Garmin is the antithesis of the flashy Silicon Valley tech darlings. The Kansas City company, which specializes in GPS-enabled products, quickly became a well-known brand after it debuted personal navigational devices for automobiles in 1998.
“That gave us rocket fuel,” Pemble says. “It was a highly consumer, rapid growth market.”
He recently told Fortune how Garmin survived the challenge from tech behemoths like Apple and Google, which introduced the iPhone and Google Maps, respectively, as well as how the now-30-year-old Garmin still managed to spur new growth. Thanks in part to the popularity of its fitness watches, Garmin has restored and surpassed the annual revenue it generated when it dominated the personal automotive GPS device category more than 10 years ago. Last year, it saw $3.8 billion in annual sales, beating its record year in 2008.
And Pemble was there for all of the company’s ups and downs. At 24, he joined Garmin in 1989, its founding year, as the company’s sixth employee. Pemble says at the time, he was itching for a bigger opportunity and was considering a job out of state. That’s when he got a late-night call from Gary Burrell, who cofounded Garmin along with Min Kao.
“He said, ‘I hear you’re leaving. Please don’t go. Please come join Garmin,’” Pemble recalls. “And by the next day, I was in his car essentially doing a mobile interview.”
Thirty years later, Pemble, using the hard-earned lessons of the past, maps out the company’s future.
Here’s what Pemble told us about his journey at Garmin.
Fortune: What attracted you to Garmin?
Pemble: I had never been part of a startup before. When somebody shows you an empty building, and they say, “We’re probably going to set up some manufacturing here,” I was just overwhelmed. The vision was compelling. We had to invent everything from scratch, so that urge I had to do more things was instantly gratified within the first 10 minutes of coming in the door.
People don’t typically think of Kansas City as a startup town. What’s the culture like for a startup in the area?
I know we’re not the size of some of these big names—the Googles, the Facebooks—but we’re a very successful consumer electronics company. Coming out of Kansas, nobody would’ve thought that would’ve been possible, but it turns out that’s kind of an ideal environment for us. The kind of lifestyles that our products are suited for are all things Midwestern people are interested in. We have a lot of passionate [employees] at Garmin, and that help set the direction of the company, because they actually want to buy the products that we make.
When would you say was the moment Garmin was viewed as a success?
We didn’t get a ton of attention until we went public in 2000. We started talking about taking GPS from the niche-focused markets of outdoor and boats to more mass markets. We created the category of portable automotive devices. When people saw that and the skyrocketing growth we had, I think they realized Garmin was for real.
When the iPhone, equipped with Google Maps, debuted in 2007, your business took a major hit. How did you survive that?
We were a company that had a lot of diversity early on. So if one segment or one market was down, others were maybe more stable. We started to realize the diversity aspect was a strength, so we continued to try to branch out into new areas. We tried some things. Some worked, some didn’t. The most effective thing to try is to double down on growth and opportunity. Saving money and cutting expenses never really works.
Was the comeback you’re experiencing today expected?
We probably couldn’t have guessed we could grow everything else to come back to the level that we were at. That’s a really tall task when you’re talking a couple of billion dollars. What we probably underestimated was the importance of the wearables. We were dabbling with it way back when, but nobody could foresee that it would become the category that it is today.
Was there ever a moment that the company thought this might be the end?
Even when we were on the decline in the [automotive] market, Garmin has always been solidly profitable. It was never a question of, “Gee, we’re getting weak as a company, and we need financing,” or anything like that. Garmin has always been debt-free. We have cash in the bank for rainy days. So there was no sense of panic.
What kept the company from panicking?
I think confidence is one attribute we had. Min [Kao, Garmin’s CEO when decline in automotive revenue began in 2008] is a very quietly confident person, and his sense of confidence in our business was very strong. He’s the kind of person that said: “Let’s not obsess about this. Let’s do what we know works. Let’s invest in ourselves, let’s invest in the markets, let’s create new things, and see where it leads us.” It was confidence and patience.
You mentioned that Garmin has a lot of outdoor and fitness enthusiasts. Are you one of them?
Early in our fitness-watch development I realized, “Wow, this is an interesting category. I’d like to learn why our team is saying we should be doing this versus that.” So I started running with our products. Ever since I was a kid, I was a watch person anyway. One of my favorite gifts that my mom gave me was a wristwatch. One thing led to another, and now I can’t stop [running].
Given everything you’ve learned, how do you prepare Garmin for future disruption?
If I’ve learned anything over the course of the years at Garmin, it’s that surprises can happen at any moment. You never know what you’re going to wake up to. I think, though, it’s really about how you react to those things and how prepared you are to think your way through it. If you get distracted by the chaos and activity that goes into crisis situations, then you don’t always do your best thinking. We only focus on the [things] we can control. We structure our business in a way it’s best suited for the next crisis.
More must-read stories from Fortune:
—The coronavirus pandemic reveals how prepared the U.S. is for cyber conflict
—Countries are sending texts to warn about COVID-19. Should Trump?
—TikTok’s newest viral influencers? Personal finance stars
—With 5G, wearable devices are expected to become even more sci-fi
—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEOs
—WATCH: Best earbuds in 2020: Apple AirPods Pro vs. the Sony WF-1000XM3
Catch up with Data Sheet, Fortune’s daily digest on the business of tech.


fortune--2020-04-02--The coronavirus pandemic forces UN to postpone the COP26 climate conference

This is the web version of The Loop, Fortune’s weekly newsletter on the revolutions in sustainability. To get it delivered daily to your inbox, sign up here.
Morning all,
Yesterday, climate advocates suffered a major blow as the U.K. announced the COP26 conference on climate change, due to be held in Glasgow this November, has been postponed until 2021.
“The world is currently facing an unprecedented global challenge, and countries are rightly focusing their efforts on saving lives and fighting COVID-19. That is why we have decided to reschedule COP26,” said conference president Alok Sharma. No date has been set for the rescheduled meeting.
COP26 was supposed to loom large in the climate change calendar. Signatories of the Paris Agreement are required to set new action plans for how to achieve net zero carbon emissions by 2050 this year, and the specter of COP26 was intended to put pressure on them. Campaigners worry delaying the event will encourage governments to reduce climate action.
Even before the meeting was postponed, there was evidence some signatories aren’t taking climate commitments seriously. Japan—the world’s fifth largest producer of greenhouse gas—faced criticism over its “shameful” action plan, which it released Monday. Japan’s new plan is the first released by a G7 country.
Unfortunately, the new plan is essentially the old plan. Patricia Espinosa, who heads the UN Framework Convention on Climate Change, said she trusts “more ambitious targets will be set soon.”
However, more optimistic campaigners argue that delaying COP26 will allow countries time to regroup once the pandemic has passed and to refocus their energies on combating climate change. The postponement will also create more space between COP26 and the U.S. election—when Washington’s approach to the climate crisis could change completely.
Likewise—but far less significantly—The Loop is rescheduling, too, temporarily reducing its frequency to once every two weeks while the coronavirus pandemic rages.
The lower frequency will give me more time to focus on writing articles that answer questions readers have about this challenging and fast-evolving crisis. The Loop will improve too, as shifting to a biweekly schedule will mean more time to prepare for each edition and respond more thoughtfully to your feedback.
So heads up: Two weeks from now I plan to tackle the topic of degrowth. If you have any ideas you would like to share on the issue, as always, send an email and let me know.
See you in two weeks,
Eamon Barrett
Eamon.barrett@fortune.com
CARBON COPY
Foot on the gas
The Trump Administration rolled back Obama-era regulations on vehicle emissions, slashing fuel efficiency requirements for auto manufacturers. Under the old fuel economy rule, models manufactured from the year 2026 onwards needed to average 40 miles per gallon. Trump has now bumped that to 54 mpg. EPA administrator Adam Wheeler says the new rule will reduce pollution. The Verge
Mountains of medical waste
The pandemic has prompted a surge in medical waste as usage of single-use surgical masks and other disposable personal protective equipment (PPE) skyrockets. Officials in Wuhan, where the outbreak began, had to build a brand-new medical waste plant just to deal with the tide of soiled supplies. Facilities in the U.S. are apparently not at risk of being overwhelmed, yet, but the situation does prompt the question of how we can recycle and reuse PPE. Wall Street Journal
Plastic palette
A group of German researchers have discovered a bacterium that feasts on plastic, or specifically polyurethane, which is commonly used in mattresses, building materials and car parts. The plastic normally ends up pin landfills or the sea, where it breaks down into toxic microplastics. The bacterium discovery is an important step towards resolving that issue, but the scientists warn it is only a first step. A lot more research is needed before the discovery yields usable results. CNN
IN CASE YOU MISSED IT
Coronavirus fight could prove fatal for another global challenge: Addressing climate change by Katherine Dunn
After coronavirus, we need to rethink densely populated cities by Joel Kotkin
2 things every business must consider before laying off employees in a coronavirus recession by Gad Levanon
The oil sector is quickly running out of storage for its unprecedented surplus by Katherine Dunn
CLOSING NUMBER
1 million gallons
Data centers are thirsty facilities. According to Bloomberg, Arizona—a desert state— has promised Google 1 million gallons of water a day in order to cool a proposed data center. The web giant will get up to 4 million gallons a day if it hits certain project milestones. Meanwhile, Arizona residents have been chided for each using a 120 gallons of water per day.


fortune--2020-04-02--Boeing offers voluntary buyouts in message to all 161,000 employees

Boeing Co. offered voluntary buyouts to eligible employees, in a bid to quickly shed costs and adjust its work force of 161,000 to a coronavirus crisis that’s quickly undermined the outlook for aircraft sales.
“When the world emerges from the pandemic, the size of the commercial market and the types of products and services our customers want and need will likely be different,” Chief Executive Officer David Calhoun said in a message to employees Thursday. “It’s important we start adjusting to our new reality now.”
The move will preserve much-needed cash at Boeing, which is facing a sharp contraction in demand along with its European archrival Airbus SE. Airline customers around the world have slashed schedules, with some parking their entire fleets as the coronavirus pandemic guts travel. About 44% of aircraft across the globe are in storage, according to an estimate by Cirium, and with virus cases approaching 1 million worldwide, there’s no telling when carriers will return to normal schedules, no less buying planes.
“With no cash coming in, you have to cut your fixed costs quickly,” said Nick Cunningham, an analyst at Agency Partners based in London, adding that salaries make up the biggest portion of the company’s fixed costs. “As painful as it is going to be, Boeing needs to reduce workers. If you don’t, you’ll destroy the company.”
Twin Crises
Boeing was already reeling from a prolonged grounding of its 737 Max when the coronavirus pandemic hit, with revenue and cash flow depleted. The disease has slowed work on recertifying the single-aisle workhorse, while clouding the outlook for sales once it returns.
The company is also facing a falloff in demand for twin-aisle aircraft like its 787 Dreamliner and the coming 777X, as long-distance travel has been hit harder than shorter hops. Wide-body jetliner production could tumble by 60% over the next three years, Jefferies analyst Sheila Kahyaoglu predicted in a March 31 report.
The need to downsize has created a dilemma for CEO Calhoun. Forced layoffs would give the company more control over where and how it cuts costs. But they would surely stir up a backlash that could complicate any effort by the manufacturer to access government aid.
While the company has told Congress that the industry needs some $60 billion, Calhoun has blanched at the strings that would potentially be attached, telling Fox News that the company has “other options.”
Voluntary buyouts keep the bailout option viable, should he ultimately choose to pursue it. Boeing is analyzing the funding options available, people familiar with its review said last week.
As it pares back its staff, another challenge for Boeing will be maintaining essential skills that will be needed when the market bounces back, Cunningham said. “But you have to actually survive as a company in order to come back again.”
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—Everything you need to know about the coronavirus stimulus checks
—How small-business owners and the self-employed can take advantage of the coronavirus stimulus package
—USPS warns might have to shutter because stimulus package provides no funding
—Whiskey makers bend the rules for barrel-aging, signaling a new wave for bourbon
—5 things to know about unemployment benefits in the COVID-19 stimulus package
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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--2020-04-02--Coronavirus crisis may bring out old tool in disease fights: suspension of drug patents

German Chancellor Angela Merkel described the coronavirus as the greatest challenge facing her country since the end of World War II. Germany’s parliament took that message to heart as part of a package to fight the virus, extending powers to suspend patent rights, a tool last used in the country in 1949.
Governments around the world are reviving rarely used legislation or pledging new measures to ensure that they have the drugs they need to battle the pandemic. Israel last month invoked an emergency patent-suspension clause in its 1967 code for the first time, allowing it to import a generic version of AbbVie Inc.’s Kaletra, which has shown signs of combating coronavirus.
In the U.K., so-called Crown Use rules allow the government to suspend protections it would normally grant a patent holder. Those have been used just a handful of times since 1945, but that could change.
“If there is a drug supply shortage, governments aren’t going to be squeamish about ordering companies to do what they think is necessary,” said James Tumbridge, a lawyer with Venner Shipley in London. In wartime Britain, companies were provided a measure of fair compensation for their rights.
“I can see there being pushback and legal challenges elsewhere from pharma manufacturers if they’re ordered to produce products at uneconomical prices,” said Tumbridge.
Postwar Germany
Germany’s law stipulates that patent holders must be indemnified, part of long-standing legislation allowing the government to use a patent for the “public good.” It was last invoked in 1949 when the newly established Federal Republic of Germany needed to supply military equipment to the Allied Powers.
The association representing Germany’s biggest research-focused drugmakers argues patent protection limits are unnecessary as market forces are already a positive dynamic.
“The numerous projects looking for vaccines and medication in the corona crisis show that two things are working well: competition among pharma companies and the output of their research pipelines,” said VFA President Han Steutel.
Germany has yet to invoke its refurbished tool but may do so if shortages emerge, says Julia Schoenbohm, a patent lawyer at Linklaters in Frankfurt.
“The rule will come out primarily in case of shortages for existing products that already have patent protection,” Schoenbohm said. “If a company cannot produce sufficient amounts, others should be able to help and not be blocked by patents.”
Drugmakers are feeling the pressure. Chicago-based AbbVie on March 20 said it wouldn’t enforce its patents on Kaletra, a day after Israel authorized imports of the generic version. Gilead Sciences Inc. has faced backlash over the years for its pricing of infectious disease treatments.
‘Pandemic Profiteering’
The California drugmaker asked the U.S. Food & Drug Administration to drop extended monopoly rights on remdesivir, a potential Covid-19 treatment. Eliminating that special status means Gilead waives an extra seven years of exclusivity for the medication. Still, the company has come under criticism from health relief group Medecins Sans Frontieres.
“Gilead has no business profiteering from this pandemic and must commit to not enforce or claim its patents and other exclusive rights,” MSF said in a March 27 statement. “Otherwise, Gilead is setting itself up to charge whatever it wants for remdesivir.”
Gilead CEO Daniel O’Day said the following day that the company will work to “ensure affordability and access” of the drug. Test results on whether the drug can treat the virus are expected later this month.
The risk of negative publicity hasn’t prevented some investors from suing over alleged virus patent violations. Fortress Investment Group LLC last month sued Biomerieux SA, the developer of new coronavirus tests, saying the French company used some of its patented technology.
The U.S. is the wild card. Washington lawmakers have never invoked compulsory licensing or broken drug patent laws, but states could pressure the federal government to take action.
“I’d be very surprised if the U.S. government would ever go against the principles of the free market,” said Tahir Amin, co-executive director of the Initiative for Medicines, Access & Knowledge. “Getting a lower price is one thing, but overriding intellectual property rights is a different thing.”
President Donald Trump, however, hasn’t been afraid to use a bully pulpit to get to companies to fall into line with his policies, especially in an election year. He castigated General Motors Co. for being too slow in shifting to making badly-needed medical ventilators, even though it was the automaker’s idea.
The government holds all the cards in negotiations with manufacturers because federal statutes give them a right to the best price and the potential windfall for a company with a vital product is huge, said Joe Allen, executive director and founder of Bayh-Dole 40, which educates the public about government-funded research.
“I can’t even imagine how much vaccine you’re going to have to produce, because you’re going to really want to inoculate the whole world,” said Allen. “I don’t think price is going to be a problem, but if it was, the government has the right under its emergency powers to take anything that they want to meet a crisis.”
More coronavirus coverage from Fortune:
—China releases data on asymptomatic coronavirus cases—but doubts remain
—”It’ll never be fast enough”: 5 questions for a ventilator manufacturer
—Everything you need to know about furloughs—and what they mean for workers
—SBA small-business loans: 8 things to know about the Paycheck Protection Program
—The stock market had its worst quarter since 1987—and its worst Q1 ever
—How to job hunt during the coronavirus pandemic
—PODCAST: Two health care CEOs on why coronavirus tests and vaccines are the ammunition needed to fight COVID-19
—VIDEO: World leaders and health experts on how to stop the spread of 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--2020-04-03--Coronavirus will pummel already weak retailers long after it’s been contained

Why the U.S. is changing its mind on coronavirus face masks

This article is part of a Fortune Special Report: Business in the Coronavirus Economy—a look at the impact of the pandemic on more than 50 industries.
The true retail apocalypse is upon us now, courtesy of the coronavirus outbreak.
Big shifts in shopping habits in the past decade have wounded retailers in a disruption often likened to an Armageddon. But that upheaval unfolded in slow motion compared with the nuclear bomb that has fallen on American retail since many chains started closing en masse indefinitely in mid-March.
Weeks on end without revenue—Macy’s said this week it had lost the majority of its sales—and the losses stemming from the merchandise that will ultimately be sold at clearance prices will not only set weak retailers further back financially, but also hurt their relationships with vendors by canceling orders and impede the investments in tech and store updates they need to keep up with rivals.
“This is just going to accelerate what we would have seen play out anyway,” says David Berliner, head of consulting firm BDO’s restructuring and turnaround practice. “It’s going to deepen the difference between the haves and the have-nots.”
Last week, one retailer after the next—ailing ones like Macy’s, Kohl’s, J.C. Penney, and Gap Inc., along with successful ones such as Target and Best Buy—announced measures to conserve cash. On Monday alone, Macy’s, Kohl’s, and Gap Inc. furloughed nearly 300,000 retail workers.
Most major retailers are also cutting back on capital expenditures, including longer-term initiatives designed to better compete with Amazon and one another. Those cash-saving steps are essential now, analysts say, given the uncertainty around how long stores will be closed as well as customer mood once they do reopen.
“Their first responsibility is to have the liquidity to endure a situation that is completely unknown. That’s priority No. 1,” says Christina Boni, a Moody’s Investors Service analyst.
But further out, cutting back on capital spending is likely to hurt many chains’ efforts to modernize their businesses.
Macy’s, for one, had been hoping to expand a new smaller concept store from a prototype location in Dallas, continue to beautify its flagship stores, and overhaul its store brands. But everything is up in the air now. J.C. Penney, in even graver danger, has been trying to modernize its inadequate e-commerce, but its massive debt, and the interest payments that come with it, could crimp its efforts.
Adding to the danger for the many weakened retailers is the timing of this outbreak. This is the time of year retailers are placing orders with suppliers for the holiday season, when many—notably, department stores, clothing chains, and electronics retailers—get 30% of annual sales.
Stores that are short on cash, without any idea of what consumer confidence could look like in eight months, might have a tough time placing orders with suppliers, many of which are reeling from canceled orders. As they restart manufacturing, they are likely to limit whatever production they undertake to retailers that can pay their bills.
“The market share shifts will stem from who has the cash to stay closed the longest and still be able to buy for the Christmas period,” says Nikki Baird, vice president of retail innovation at Aptos, a retail tech company.
What’s more, even if those anxious retailers are able to place orders, they will likely be cautious and choose merchandise too conservatively, erring on the side of being boring to avoid a flop, says Baird. “Retailers are going to reduce their risk of missing the mark.”
Playing it safe is exactly what got plenty of retailers in trouble in the past decade in the first place—by creating a “sea of sameness.” That made consumers view a lot of merchandise as an interchangeable commodity, only worth buying on sale or from Amazon with its better e-commerce infrastructure.
Another risk for struggling department stores, particularly those with precarious finances, from the lower-tier J.C. Penney to luxe chain Neiman Marcus, as their finances worsen: Vendors are now likely to speed up existing efforts to sell more on their own websites and at their own stores to reduce their reliance on department stores, which will now have a harder time updating themselves, says Baird.
This week Ralph Lauren, which last year sold $500 million worth of merchandise at Macy’s alone, reopened its e-commerce fulfillment centers. Neiman has had to contend with brands like Dior and Louis Vuitton opening more and more of their own stores.
A sliver of breathing room
Paradoxically, the spate of retail bankruptcies in the past two years and staggering number of store closings—9,300 locations in 2019, according to marketing research firm Coresight Research—could give struggling retailers some wiggle room to weather the storm, says BDO’s Berliner.
“It’s not like a landlord who kicks out a tenant can find anybody else right now,” says Berliner. “Liquidation values are awful—it’s the worst fire sale you can imagine.”
That can buy the retailers some extra time. The next few months and then the holiday season will be decisive for those on the edge to show they can make a go of it.
But even when retailers do reopen stores, it could take a while for shoppers to get in the mood to spend again, analysts warn. Putting the state of the economy aside, shoppers are likely to be wary of public spaces like stores and indoor malls for a while.
Stores are likely to look very different in the near future, keeping many of the pandemic measures in place, such as minimizing the number of shoppers in a store at one time and stocking less on the store floor to facilitate social distancing—steps that will pinch sales.
“There will be fewer things in stores,” says Aptos’s Baird. In China, she points out, in-store shopping has rebounded relatively quickly, with measures such as taking shoppers’ temperature before they come in or requiring them to wear masks. But such measures might be a tougher sell for Americans and could lead them to shop more online, a punishing development for any retailer with less than state-of-the-art e-commerce.
For now, though, it’s all about survival, with bigger goals set aside for 2021. The next few months promise to be brutal, as many retailers will be scrambling to sell clearance merchandise, putting severe pressure on prices. Nicer stores, fancier apps, and more sophisticated merchandise inventory systems will have to wait, analysts say.
“It’s definitely going to be about cash this year and whether you can get through the storm and have enough left over to invest in 2021,” says Baird.
More must-read retail coverage from Fortune:
—Which stores are open—and closed—during the coronavirus pandemic in the U.S.?
—How re-commerce players like Poshmark and eBay are adapting to the coronavirus
—How Nike is overcoming the coronavirus’s impact on its China business
—It may be a while before many of America’s stores open again
—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEOs
—WATCH: The greatest designs of modern times
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