Posted on

U.S. Trade Representative’s Top China Adviser Resigns

WASHINGTON—Mark Wu, the U.S. Trade Representative’s top China adviser, said he resigned his position, citing family reasons.

In an interview, Mr. Wu said he left USTR in mid-July and is returning in August to Harvard Law School where he focuses on intellectual property issues and Chinese trade policy.

“The plan had always been to help (Trade Representative) Katherine Tai settle into her role,” Mr. Wu said. “The team has settled into place, and a rhythm has been established.”

Mr. Wu cited family issues as another reason for his departure, which he said had nothing to do with the continuing USTR review of China policy.

USTR is in the midst of a broad review of its China policy, which is expected to be completed in the fall. Few details of the policy have been made public, leading to mounting frustration by big investors and exporters to China. Mr. Wu declined to comment on the policy effort.

Posted on

Household Spending Rose in June, Before Delta Variant Upswing

U.S. household spending rose 1% in June, and income increased slightly, but a jump in Covid-19 cases is clouding the economic outlook.

Americans have been doling out money to resume activities outside the home since state and local governments eliminated Covid-19 restrictions earlier this year, a trend that has particularly benefited service-sector industries, such as restaurants and travel. They had been battered earlier in the pandemic as Americans stayed indoors and shifted spending toward household items and other goods.

The Delta variant has prompted some local governments to reimpose mask mandates, and the Centers for Disease Control and Prevention this week recommended that vaccinated Americans in certain areas wear masks indoors. Some businesses have announced new restrictions or delayed office-reopening plans. Many economists so far don’t think the developments will significantly hamper growth, with businesses and consumers adapting to each phase of the pandemic.

“Consumers have a lot of pent-up demand and a lot of pent-up wealth that they’re very willing to get rid of in the marketplace by consuming goods and services,” said Lindsey Piegza, chief economist at Stifel Financial. “So at least for the near term, I would expect a continued positive trend.” The rise in cases, however, could cloud the longer-term outlook, she added.

U.S. gross domestic product in the second quarter grew at a 6.5% annualized rate, with consumer spending climbing sharply at an 11.8% annual rate. Spending on services contributed the most to the change in GDP, followed by purchases of goods.

Posted on

The Ever Given, Fresh From Suez, Becomes a Tourist Attraction

ROTTERDAM, Netherlands—The Ever Given, the 1,300-foot container ship that became an internet meme after getting stuck in the Suez Canal, is now facing a new type of celebrity: tourist destination.

The ship tied up at a Rotterdam container terminal early Thursday, pulling into a remote, windswept pier lined with rows of rusty containers and near smoking refineries. The ship, one of the world’s biggest seagoing vessels, is also one of its best known, after it got stuck lengthwise across the Suez Canal, blocking traffic both ways on the critical choke point.

It took a week to dig and pull it out, then months to negotiate compensation with Egyptian authorities, before it was allowed to leave the canal.

On Thursday, the Port of Rotterdam jumped at the chance of being part of that global story. “Do you want to see the Ever Given with your own eyes?” the port asked on its Twitter account.

The port is offering tickets for a 90-minute ferry ride past the hulking container ship as it unloads some of its roughly 18,000 containers, before the vessel sets sail for the U.K. Tickets, at 10.95 euros, or about $13, were sold out through Sunday.

Posted on

Eli Lilly’s New Compliance Chief on His Priorities

Technological innovation, the coronavirus pandemic and a shifting regulatory landscape are among the topics that are top of mind for pharmaceutical company

Eli Lilly

& Co.’s new compliance chief,

Alonzo Weems.

Mr. Weems succeeded

Melissa Stapleton Barnes,

who retired from the Indianapolis-based company in June after about nine years as its chief ethics and compliance officer.

As an Eli Lilly employee since 1997, Mr. Weems is deeply familiar with the company’s core businesses. Among his prior roles, he served as a lawyer supporting clinical research in oncology and as a director of global workforce diversity. Most recently, he was a deputy general counsel.

The pharmaceuticals industry is heavily regulated, and Mr. Weems begins his new role as the Covid-19 pandemic intensifies the spotlight on the sector. The company produces several Covid-19 medicines, including two monoclonal antibody treatments. U.S. regulators paused distribution of the drugs last month because of data showing they aren’t effective against virus variants.

In his new role, Mr. Weems will work to ensure, for example, that interactions between the company’s sales and marketing representatives and healthcare professionals comply with regulatory standards.

He will also help the company respond to potential regulatory changes. Amid growing public dismay over high drug prices, U.S. lawmakers have discussed proposals that could limit pharmaceutical companies in how they price their products. President Biden this month issued an executive order aimed at lowering prices for prescription drugs, including by allowing states to import drugs from Canada.

In an interview with Risk & Compliance Journal, Mr. Weems spoke about how compliance is changing for Eli Lilly in light of the coronavirus pandemic and the changing regulatory environment. Edited excerpts follow.

WSJ: Coming into this position, what are your priorities? Are there any changes you’re looking to make?

Mr. Weems: We need to be doing [compliance] in ways that are easier for our colleagues to understand. We need to be thinking about how it can be easier to get the information—as we enable, partner, and assist our colleagues in doing their work. That’s not sexy. But it’s really, really important in delivering a program that meets the needs of the business.

We have to be making sure that we have the right capabilities, that our monitoring and assessing of risks are right. And that we’re doing that in the best ways. That we’re running our enterprise risk-management program in the best ways. That we are optimizing our training and communications resources.

WSJ: Has how you monitor and track compliance with your different regulatory obligations at Eli Lilly evolved in recent years?

Mr. Weems: Yes, it is evolving. It’s about trying to move from a far more manual, individual and observation-predominant [approach]…to [one] where there’s a lot of data feeds.

The challenge is: How do we connect all of this data to get a more holistic picture, and get insights? How do we use machine learning to show the outliers, because it can do it far more efficiently than we can?

I’ve now had two conversations and one deeper dive with the new leader of our information and digital solutions group [Diogo Rau], as we think about the partnership between that group and our global ethics and compliance, and enterprise risk-management function.

He was about as excited as I was during the conversation. So I see it as a really strong partnership. But you know, you’re moving data from different systems, from different platforms. The details are not insignificant, and the journey is not an easy one. But that is the future of doing monitoring work even better.

WSJ: What do you see as the biggest risks or compliance challenges that the pharmaceutical industry is facing right now?

Mr. Weems: One big issue across the industry is cyber threats. I think we will continue to see cyber and information security as a significant risk that companies are working hard to mitigate.

In his role as compliance chief, Alonzo Weems will also help the company respond to potential regulatory changes.



Photo:

Darron Cummings/Associated Press

Not surprisingly, as a pharmaceutical company, we continue to pay close attention to the pricing and access environment. What Covid reminded all of us is the important role that the pharmaceutical and biotech industry plays in providing answers to challenging health and medical issues. But we know that there are important access challenges that we still face, domestically and internationally. That’s a risk during the pandemic, particularly as we are ramping up vaccines and antibodies.

There is an increased regulatory focus on questions of quality. That’s a conversation that’s important to us as well, that we pay lots of attention to.

The last one that I would mention [are the risks posed by] corruption, bribery and transfers of value. We’re always thinking about and working hard to avoid any kind of material compliance failures. We want to be super diligent in running our programs and making the right decisions.

WSJ: Are there any ways that the company has adapted to doing compliance during the pandemic, that you think ended up being positive and will kind of stick around?

Mr. Weems: In short, we never stopped doing compliance. Yes, you didn’t have to travel. But we were still having communications and conversations with healthcare professionals. Making sure that we were getting that right and being accurate and monitoring those communications did not stop.

Probably like many [other companies], some of the audits became more virtual. We had to figure out, “How do we do world-class auditing and even some monitoring in a virtual world?” Really knowing the essence of what you needed to find, what you were looking for, became even more important.

I think what we learned is that we can do it effectively and well. And we also learned that there’s value in being present, being on site.

WSJ: Going forward, will there be some sort of hybrid situation where, in some cases, you’ll continue doing things virtually, but in other instances where it’s of higher value, you’ll do things in person?

Mr. Weems: I think we will continue to do that.

We’ve learned there’s a lot that we can accomplish virtually. Communications in some ways, across the globe, probably improved. At least the frequency of communications improved.

Working virtually may enable us to stretch our resources even further. But at the end of the day, we have to make sure that we are getting the high level of quality that we want.

WSJ: You have a background working on diversity issues at the company. Is diversity, equity and inclusion something you see compliance playing a role in?

Mr. Weems: Here’s where I think there are commonalities: The leaders who are driving diversity, equity and inclusion, and the leaders who are driving ethics and compliance, we’re all in the culture business.

Diversity, equity and inclusion isn’t rooted in a legal standard. Rather, it’s about saying, “Do we have the processes that are consistently making sure that we are identifying, rewarding, recognizing and promoting the talent across the organization and doing that broadly?” And looking at processes that are giving us some assurance that we’re doing that right.

We all have an interest in making sure that we’re doing that right, regardless of what function you sit in as a leader, or as an employee.

More From Risk & Compliance Journal

Write to Dylan Tokar at dylan.tokar@wsj.com

Copyright ©2021 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

Posted on

Procter & Gamble CEO David Taylor to Step Aside

Procter & Gamble Co.


PG 0.52%

said

David Taylor

would step down as chief executive after a six-year run atop the consumer- products company, where he battled with an activist investor, revived sales and navigated through a pandemic.

Mr. Taylor, 63 years old, will be succeeded on Nov. 1 by his top deputy

Jon Moeller,

who is 57 and a company veteran. Mr. Moeller has been P&G’s chief operating officer for the past two years and was previously its finance chief.

Mr. Taylor will serve as executive chairman.

The leadership change comes at a delicate moment for the maker of Pampers diapers, Crest toothpaste and Gillette razors. While the Covid-19 pandemic spurred demand for household products last year, it has strained supply chains and pushed up costs in a sector that operates on thin profit margins.


‘Today the company is delivering some of the strongest results that it ever has.’


— P&G CEO David Taylor

In an interview, Mr. Taylor said P&G’s decision to put Mr. Moeller in charge, which the board had deliberated over for years, reflects the company’s recent success. The board considered external candidates as well, he said.

“The strategy we have was working before the pandemic, is working in the pandemic and will continue to work well after the pandemic,” Mr. Taylor said. “Ultimately, when you go outside, it’s because the company is not delivering. Today the company is delivering some of the strongest results that it ever has.”

P&G is set to report its latest quarterly results on Friday. Many of its peers have warned of inflationary pressures and slowing demand in recent days.

Mr. Moeller, a low-key executive who joined P&G in 1988 as a cost analyst in the company’s food division, gave blunt assessments of P&G’s organizational woes while also defending the company’s strategy of focusing on big, mass-market brands.

He played a key role in the downsizing of P&G in the years before Mr. Taylor became CEO and was the chief architect of two separate plans to cut $10 billion in annual costs. Mr. Moeller also helped engineer the latest management restructuring, unwinding the corporate structure he called a “thicket.”

P&G’s Jon Moeller at a ribbon cutting ceremony in Cincinnati in October.



Photo:

Jeff Dean/The Cincinnati Enquirer/Reuters

Both men joined P&G decades ago and worked their way up at the Cincinnati company. Mr. Taylor, a Charlotte, N.C., native, was a manufacturing-plant manager who switched to brand management. He took over in 2015, as P&G was struggling to regain steam in postrecession years.

“When I came into this role, we were not delivering what we knew we were capable of,” Mr. Taylor said on Thursday.

Sales slowed even more in Mr. Taylor’s first years, drawing ire from Wall Street and landing the company in a proxy fight with activist investor

Nelson Peltz.

P&G narrowly won a shareholder vote in 2017 but gave a seat on the board to Mr. Peltz, CEO of Trian Fund Management LP.

Critics said P&G needed to invest in trendy, e-commerce startups and lessen its reliance on bricks-and-mortar retailers and mass-market brands like Tide and Gillette. Instead, Mr. Taylor doubled down on P&G’s big names while eschewing deal making as rivals snapped up new brands.

He argued that P&G’s best prospects remain rooted in fundamentals: selling to the masses by way of big retailers on the strength of meticulously collected consumer research, a large research-and-development operation and the world’s biggest advertising budget. P&G, he said, needed to learn to do these things faster and more effectively.

The strategy proved to be especially prescient amid the pandemic, when shoppers flocked to known names and, largely unable to travel or dine out, were willing to pay top dollar for diapers, soap and detergent.

P&G’s organic sales growth, a closely watched measure that strips out currency moves and deals, mostly hovered between 1% and 3% in the years following the economic downturn of 2008. In 2019, P&G’s growth returned to prerecession levels of between 5% and 6%.

During Mr. Taylor’s tenure, P&G has recorded a total shareholder return, a measure of share price gains and dividends paid, of 46%, compared with a 138% total return for the S&P 500 index. P&G’s share price is hovering near record levels though it is essentially flat year to date, compared with a 17% advance in the S&P 500.

Corrections & Amplifications
David Taylor is 63 years old. An earlier version of this article incorrectly said he was 57. Also, Procter & Gamble CEO David Taylor assumed the role in 2015. An earlier version of this article incorrectly said 2016.(Corrected on July 29)

Write to Sharon Terlep at sharon.terlep@wsj.com

Copyright ©2021 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

Posted on

Boeing Space Flight Postponed After Mishap at Space Station

The National Aeronautics and Space Administration and Boeing Co. postponed the launch of the company’s Starliner space capsule after a Russian vehicle forced the International Space Station into an unexpected slant.

The Starliner’s launch had been scheduled for Friday afternoon from the Cape Canaveral Space Force Station in Florida. Boeing had spent months preparing for the flight after a December 2019 attempt to send the capsule to dock with the space station failed when a software error sent it to the wrong orbit, among other issues.

“We want to ensure that the space station is in a stable configuration, and ready for Starliner to arrive,” said Steve Stich, program manager for NASA’s commercial crew program, which is overseeing the Starliner effort. The Boeing capsule could be launched on Aug. 3, he said.

Boeing said the company is ready for the Starliner launch “when the time is right.”

Officials decided to put off launching the Boeing vehicle after a flight-control team noticed at 12:45 p.m. ET on Thursday that the Russian spacecraft, called the Nauka, had inadvertently fired its thrusters while it was docked to the space station, causing the space station to veer out of its expected orientation in space.

Posted on

Top EV Battery Maker Adds Sodium to Its Recipe Book

TOKYO— Contemporary Amperex Technology Co. , the world’s biggest maker of electric-vehicle batteries and a Tesla Inc. supplier, said it was looking to make batteries using sodium ions, a technology that could reduce costs and lift performance.

CATL is the first battery maker in the top global tier to adopt sodium-based battery technology, which offers promise because sodium is relatively plentiful and cheap. Other major players in the automotive business such as Panasonic Corp. and LG Chem Ltd. have focused on improving battery recipes that rely on less easily mined elements such as lithium, cobalt and nickel.

Commercializing sodium-based batteries still faces challenges. CATL said the energy density of its new battery—the amount of energy it stores per unit of volume—is lower than that of an EV battery widely used in China known as lithium ferrophosphate.

Companies are racing to bring down the cost of making an electric vehicle so that it matches traditional gasoline-powered vehicles. UBS Group AG has calculated that electric-vehicle battery packs and motors cost $4,000 more to manufacture than a comparable gasoline-burning midsize sedan engine, a difference it believes will disappear by mid-decade.

CATL’s market capitalization has climbed sharply this year and stands at about $200 billion, according to FactSet, making it one of China’s most valuable companies. Investors have bought the battery maker on optimism over the EV wave. It supplies EV makers such as Tesla, Daimler AG’s Mercedes-Benz unit and Chinese car makers.

Posted on

‘Industrial Policy’ Is Back: The West Dusts Off Old Idea to Counter China

The U.S. and its allies have long pressed China to stop helping favored industries with subsidies, government preferences and other interventions.

Now they are beginning to copy it. Last month, the U.S. Senate voted for direct industry subsidies with little precedent: $52 billion for new semiconductor fabrication plants, called “fabs.”

Other regions have done the same. The European Union has committed to nearly doubling its share of global semiconductor manufacturing capacity, to 20%. South Korea approved up to $65 billion in support for semiconductors, and Japan promised to match other countries’ semiconductor aid while planning to turn Japan into an Asian data center hub.

Chip-manufacturing subsidies are the most prominent of a range of interventions Western governments are rushing out to promote industries they deem strategic, from electric-car batteries to pharmaceuticals. Such interventions have increased sharply in both the U.S. and Europe in the past decade, according to Global Trade Alert, a trade-monitoring group.

Collectively, this represents an embrace of “industrial policy,” the idea that governments should direct resources to industries critical to the national interest rather than leaving things to the market.

Posted on

Jobless Claims Resumed Decline Last Week

Workers’ filings for new unemployment benefits resumed their decline last week and remain near a pandemic low as the labor market continues to recover from the pandemic, economists say.

New jobless claims dropped slightly to 400,000 for the week ended July 24 from a revised 424,000 the week before, the Labor Department reported Thursday. The four-week moving average, which smooths out volatility in the weekly figures, edged higher to 394,500.

The labor market and overall economy are expected to continue recovering from a sharp downturn earlier in the pandemic. But economists cite uncertainty from the Delta variant of Covid-19, continuing supply-chain constraints and a shortage of available workers as risks to the outlook.

“I do expect to see job growth pick up, but I’m not sure how and when these issues are going to be resolved and how households are going to respond,” said Rubeela Farooqi, chief U.S. economist at High Frequency Economics.

Employers added 850,000 jobs in June, the most in 10 months, and workers’ wages also increased.

Posted on

What’s the Hot Endorsement Deal for 3½ Tons of College Football Players? Barbecue

Jordan Wright loves all kinds of hogs. As owner of Wright’s Barbecue outside of Fayetteville, Ark., he smokes them daily for pulled pork, ribs and bacon burnt ends. And as an alum and lifelong fan of the University of Arkansas, he cheers for the Razorbacks on fall Saturdays by yelling “Woo Pig Sooie!”

Thanks to a new era that is dawning in college sports, in which student-athletes can for the first time make money off their name, image and likeness, Mr. Wright can finally combine his love of barbecued hogs and football hogs.

When it became legal on July 1 to make endorsement deals with college athletes, Mr. Wright swooped in to make Arkansas’s gigantic offensive linemen, plus two of its quarterbacks, spokesmen for his restaurant. So far, the players are mostly paid in merchandise and modest gift cards for food. Mr. Wright gets the benefit of their promotion on social media.

“You may have been first to cook a brisket, but we were the first barbecue restaurant in the world to sponsor an offensive line,” Mr. Wright said.

Jordan Wright, left in the foreground, and the Arkansas offensive linemen at Wright’s Barbecue.



Photo:

Jordan Wright

He may claim to be the first, but he’s not the only entrepreneur who sees barbecue and big men as a delicious combo. The new rulebook of college-sports compensation created visions of starting quarterbacks and NBA-bound point guards cashing big checks because of their stardom. So far, it’s barbecue endorsements for hungry linemen that are sweeping the nation.

“The food deals are probably where it’s at right now for us fat guys,” said Dalton Wagner, a 325-pound redshirt senior offensive tackle at Arkansas.

Mission BBQ, a chain with locations in 16 states, threw its support behind all 15 of Notre Dame’s offensive linemen (combined weight 4,211 pounds). They also recently added the University of Wisconsin’s 16 big men to their roster of pit defenders.

Co-founder Bill Kraus, a Milwaukee native, explained that partnering with Wisconsin was a natural fit for a restaurant best known for its cheesy specials: jalapeño cheddar sausages and “Maggie’s Mac & Cheese,” named for his daughter and made with five varieties of cheese.

“[The linemen] love being part of something much bigger than they are, they love doing it as a unit and one of the things we’ve come to find out that they love doing as a unit is eating,” said Mr. Kraus. He’s got the grocery store receipts to back that up: his eldest son was an offensive lineman in high school.

Dalton Wagner, an Arkansas offensive lineman, in 2019.



Photo:

Richey Miller/CSM/ZUMA PRESS

University of Pittsburgh quarterback Kenny Pickett, a redshirt senior, had his offensive line teammates in mind when he struck a deal with the Oaklander Hotel, a Marriott-affiliated property near campus, to become the face of “Spirits and Tales,” the hotel’s “brasserie social” restaurant. The menu is full of burgers, seafood and steaks and Mr. Pickett plans to treat his offensive linemen there every Monday night for what he calls “Hog Dinners,” he wrote in a text message.

“For my first NIL deal,” (with NIL referring to name, image and likeness) Mr. Pickett said on

Twitter

this month, “I want to make sure I can take care of the big guys who take care of me.”

Linemen may be the most voracious eaters on the college gridiron, but restaurateurs have found that backing them under the new NCAA rules is a comparative bargain.

Mr. Wright estimated that he spent about $5,000 to sponsor the Razorbacks’ offensive linemen, starting and backup quarterback plus one particularly hungry defensive tackle. He gave athletes T-shirts and $200 gift cards in exchange for promoting his smoked meats and soul food sides on their social media channels with a blitz of “#BodyByBBQ” posts.

Members of the University of Wisconsin football team pose for a photo at Mission BBQ.



Photo:

Graham Mertz

That was a lot more affordable than becoming the “Official Barbecue of the University of Arkansas,” which Mr. Wright says carried a $180,000 price tag the last time he inquired with the university about a potential partnership. That was a prohibitive amount for a small joint like Wright’s Barbecue, which serves up seven varieties of chicken, turkey, pork and beef at its two locations. It also sells its signature and spicy sauces and meat rub at 165

Walmart

s in the state.

“I told the guy I could fly all across the world to five-star restaurants…and do a YouTube video of me pouring my barbecue sauce on the best three-star Michelin, nicest dinners for less than $180,000 and I think I’d get more publicity.”

The University of Arkansas declined to comment on its corporate sponsorships.

Mr. Kraus declined to disclose the terms of Mission BBQ’s partnerships with the Wisconsin and Notre Dame linemen, but indicated that his restaurant is effectively compensating them in free food, by giving them gift cards. He prepared enough grub for each athlete to eat about 2 pounds of meat before hosting each team for celebratory dinners this month. He’ll find out which team is beefier on Sept. 25, when the teams play each other at Soldier Field in Chicago.

“We’re calling it the Mission Bowl,” he said.

Notre Dame’s offensive line at the Blue-Gold NCAA spring football game on May 1 in South Bend, Ind.



Photo:

Robert Franklin/Associated Press

Mission BBQ, a chain with locations in 16 states, threw its support behind all 15 of Notre Dame’s offensive linemen (combined weight 4,211 pounds).



Photo:

Josh Lugg

Mr. Wright believes opposing Southeastern Conference teams should fear Arkansas’s big men after serving them a meaty feast this month, at his Johnson, Ark., location, just outside of campus in Fayetteville.

“We went through 12 pounds of brisket, 8 pounds of pulled pork, five whole racks of ribs, 3 pounds of chicken, and then another 2 pounds of bacon burnt ends,” said Mr. Wright. “We also went through 40 portions of mac and cheese.”

The tab came to just over $1,000 for the more than 3½ tons of football players present. Yet the restaurant’s revenue increased far more than that in the week since its partnership with the offensive line was announced.

According to Mr. Wright, weekly sales jumped 20% at the Johnson outpost and 40% at the Bentonville location since June 29, just before the NCAA rules changed. Revenue from the sauces and rubs at Walmart also went up 12% the week after players posted on July 6.

The uptick was all the more impressive considering it followed the July Fourth weekend, one of smokehouse’s best sales weeks of the year.

Left tackle Myron Cunningham, a redshirt senior, doubted whether the name, image and likeness legislation would take effect before his NCAA eligibility expires in December. He was thrilled to partner with Wright’s Barbecue this month—he said it was the clear winner of the self-directed barbecue tour of northwest Arkansas he did after transferring in 2018 from Iowa Central Community College.

For his next deal, he wants to balance his diet. Mr. Cunningham said, “I’m trying to find a cheeseburger joint.”

Write to Laine Higgins at laine.higgins@wsj.com

Copyright ©2021 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8