● Billionaires flock to Trump 10

● MLB’s Ohtani pitch 50

● Trolls invade economics 54

March 25, 2024

Dismantling
An Icon

General
Electric’s
leaders
explain
why three
companies
are better
than one 42
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 March 25, 2024

◀ Ohtani and the

Dodgers in a March 17
exhibition game in
Seoul. MLB opened
its season there three
days later

FEATURES 42 GE Becomes Three

How the quintessential American conglomerate broke apart
SEONGJOON CHO/BLOOMBERG

50 Batter Up
Shohei Ohtani is the best player on the planet. Can he help MLB go global?

54 Economics’ Toxic Forum

Academics crunch the data on a popular but sexist professional website
 ◼ CONTENTS Bloomberg Businessweek March 25, 2024

◼ IN BRIEF 7 Hunger in Gaza ● Record heat in Rio ● Reddit’s IPO ◼ COVER TRAIL
◼ OPINION 8 New SEC climate disclosure rules will serve investors How the cover
◼ AGENDA 8 College basketball tournaments ● World Autism Day gets made

①
“This week’s story is
◼ REMARKS 10 Why more of the megarich are drifting Trumpward about the company
Thomas Edison built!”

BUSINESS 12 US automakers feel the heat from cheap Chinese EVs “You could have
1 16 Weight-loss drugs are costly. So is quitting them just said GE. What’s
the latest?”

“To save it, it’s being

TECHNOLOGY 18 Data privacy concerns don’t stop with TikTok broken up.”
2 21 Competition is fierce for startups building AI video tools “I’ve heard breaking up
is hard to do.”
FINANCE 24 Swiss authorities eye another potential banking problem “Well, not if you’re GE. It
3 26 AI divides the Magnificent Seven stocks seems like it’s working,
thanks in part to its
CEO, Larry Culp.”
ECONOMICS 28 The US dollar is a superpower facing fresh threats
4 31 Has the Fed already waited too long to cut rates?
“Oh, nice! I assume
he’d love to sit for
a portrait?”

B-SCHOOLS 35 B-schools aim to increase diversity, but it’s an uphill battle “Sadly, no.”
+ 37 How demographics compare at the Top 25 programs “Well, he talks a lot
about monuments.
38 ▼ Tips for advancement from three women deans What if we build a tiny
monument to American
ingenuity and then just
Miley Cyrus it!”

“I don’t get the

reference.”
4 “Wrecking Ball?”

“So two elections

ago. Also, not precise
enough.”

“Got it! Luckily, I’ve got

just the thing in my
toy chest.”

◼ PURSUITS 63 It takes more than money to make perfect home espresso

66 Rolex’s little sibling grows into its own thriving brand
B-SCHOOLS: PHOTOGRAPH BY LILA BARTH FOR BLOOMBERG BUSINESSWEEK

68 Have an ideal Japanese melon shipped to your door

70 Two towering Dubai hotels pile on luxurious amenities
71 The Izzi Plus steamer removes more than just wrinkles

◼ LAST THING 72 How’s the economy? Your answer likely reflects your party

How to Contact Bloomberg Businessweek

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◼ IN BRIEF
● The Fed voted
unanimously on
March 20 to keep
US rates in the
range of 5.25%
to 5.5%.
Chair Jerome Powell said the Fed was
maintaining its outlook for three cuts
this year. Across the Pacific, the Bank
of Japan scrapped the world’s last
negative interest rate on March 18.
Ending the most aggressive monetary
stimulus program in modern history, the
bank’s board voted 7-2 to set a policy
rate range of 0% to 0.1%, shifting from a
-0.1% short-term interest rate.
● War in the
Middle East
▶ Prime Minister Benjamin Netanyahu
agreed to send advisers to the US
to discuss Israel’s planned invasion
of Rafah, where more than 1 million
Gazans have sought shelter.
▶ With tensions between Israel and
the US over the humanitarian crisis in
Gaza rising, Secretary of State Antony
Blinken was set to make his sixth visit
to the region since October.
▶ Aid agencies have described the
situation in the Palestinian enclave as
worse than in Sudan or Afghanistan,
saying it’s the first time in history an
entire population has suffered from
acute food insecurity.
● “This is a disgusting, toxic,
antisemitic thing to say
by anyone, let alone a
former president of the
United States, and it
must be condemned.”
The husband of Vice President Kamala Harris, Doug Emhoff,
who is Jewish, condemned Donald Trump on March 19 for
saying in an interview published the day before that “any Jewish
person that votes for Democrats hates their religion.”
Bloomberg Businessweek
● People in Rio de Janeiro sought relief on March 17. The heat index in the city
topped 144F over the weekend. In its annual State of the Global Climate report,
published March 19, the World Meteorological Organization confirmed that 2023
was the hottest year on record by a wide margin.
● Unilever CEO Hein
Schumacher plans to
offload Ben & Jerry’s
and the rest of the
conglomerate’s ice cream
arm, which is worth up to
$18b
according to Barclays
analysts. Schumacher, who
also plans to cut 7,500 out
of 128,000 jobs, says he
hopes to undo Unilever’s
legacy of overexpansion,
missed opportunities and
failed mergers.
● Hong Kong
draws closer to
the mainland.
On March 19 the global financial hub’s
legislature unanimously passed a
domestic security bill that critics say
will muzzle economic discussion and
tighten control over foreign entities
operating in the territory. Chief
Executive John Lee says he will sign
Article 23, known as the “patriots-only”
measure, into law on March 23.
● In another sign of
enthusiasm for AI-related
stocks, Astera Labs
shares jumped as much
as 76% in their trading
debut on March 20
after the semiconductor
connectivity company’s
IPO topped expectations,
raising
$713m
By Mark Leydorf, with Bloomberg News
● Federal police
in Brazil indicted
Jair Bolsonaro
for altering his
family’s Covid-19
vaccination
records.
Brazil’s federal police allege that
the former president had false data
entered into the health ministry
database to forge proof of vaccination
for him and his family. Bolsonaro
is also being investigated for an
alleged coup attempt following his
defeat in the 2022 elections. He’s
denied wrongdoing.
● Nvidia CEO Jensen
Huang, appearing at the
annual GPU Technology
Conference, showed off the
company’s most powerful
chip yet, the Blackwell
B200, which has
208b
7
transistors. The chip
promises to extend
Nvidia’s lead on its rivals
in the development of
AI architecture.
BRAZIL: TERCIO TEIXEIRA/GETTY IMAGES. CONE: GETTY IMAGES. EMHOFF: BEATA ZAWRZEL/GETTY IMAGES.
● Leo Varadkar,
prime minister
of Ireland,
unexpectedly
stepped down
on March 20.
VARADKAR: NICK BRADSHAW/GETTY IMAGES
The first out gay man and person
of color to lead Ireland, Varadkar
embodied the social and economic
progress the country has made in
recent decades. His resignation won’t
necessarily lead to an immediate
general election, but the government
is facing rising tensions over the
largest influx of migrants the country
has ever seen.
 ◼ BLOOMBERG OPINION March 25, 2024

and standard format—analogous to rules for executive

The SEC’s Compromise compensation—without judging the content. And many
companies already spend heavily to produce climate-related
On Climate Disclosure information that’s often far less valuable to investors.
It’s been nine years since the Financial Stability Board,
Deserves Support the international body responsible for monitoring the global
financial system, created the Task Force on Climate-Related
Financial Disclosures (chaired by Michael Bloomberg, founder
Investors want to understand the risks and costs that and majority owner of Bloomberg LP, which owns Bloomberg
companies face as they adapt to climate change. A new Businessweek) because it recognized that markets need
Securities and Exchange Commission rule would help them high-quality information. The task force’s recommendations
do precisely that. Unfortunately, it’s under attack. are the basis of rules adopted around the world, including by
The idea is simple. Many large public companies produce the European Union, the state of California and now the SEC.
glossy sustainability reports showcasing their efforts to com- Whatever the courts decide, the SEC deserves credit
bat pollution and global warming. Yet finding reliable data for persevering—and putting forward a reasonable rule
in this sea of marketing is a struggle. The SEC, which first that will serve investors. <BW> For more commentary, go to
provided guidance on climate disclosure in 2010, has now bloomberg.com/opinion
required standard disclosures on material risks and costs.
This requirement raises the bar significantly, creating legal
risks if companies supply false or misleading information. ◼ AGENDA
The battle has already been intense, and it isn’t over. Two
years after proposing a much more aggressive set of man-
dates, attracting about 24,000 comments, the SEC watered
down the final rule. It dropped the most onerous and
controversial requirement, which would’ve required some
8 companies to report emissions that their customers and sup-
pliers produce. Businesses welcomed this decision, but envi-
ronmental activists criticized it, saying such emissions are
often the largest part of a company’s pollution.
Under the rule, only the biggest companies will need to
report the pollution they produce directly and the emissions
from the energy they consume. And self-reporting is required
only if they determine that such information presents a “mate-
rial” risk to their ability to comply with laws or to meet strategic
goals. Smaller firms will be exempt from emissions reporting
(though all will have to provide some other climate-related
data). Reporting timelines have been extended for years.
▶ March Moola
The compromise did little to quell tempers. The commis- The American Gaming Association estimates that legal
sion’s two Republicans objected to giving climate-related bets of $2.72 billion will be placed on the NCAA men’s and
risks special disclosure. Commissioner Caroline Crenshaw, a women’s basketball tournaments this year. You can’t bet on
Democrat, voiced dissatisfaction with how much the rule was Dartmouth, the first union team—Yale won the Ivy League.
weakened. Republican state attorneys and business groups
say the rule goes too far. Environmental activists say it doesn’t ▶ The US Bureau of ▶ On March 29, ▶ France and Italy
Economic Analysis puts the BEA publishes report their year-over-
go far enough. All are suing. out its final gauge of its figures for US year inflation rates for
A court has put the rules on hold as the litigation pro- Q4 2024 GDP growth personal income and March on March 29.
on March 28. Analysts spending for February. Economists say it
ceeds, and there’s a good chance the lawsuits will find a sym- expect the preliminary Forecasters expect should continue edging
pathetic audience. Opponents will argue the rule elevates quarter-over-quarter to see healthy gains downward in France and
figure of 3.2% to hold. for both. remain flat in Italy.
emissions risks over others and amounts to backdoor cli-
mate regulation, outside the SEC’s remit. They’re also likely
to question the commission’s determination that the rule’s ▶ The NBS and Caixin ▶ Godzilla x Kong: ▶ April 2 is World Autism
purchasing managers The New Empire Awareness Day. In this
ILLUSTRATION BY ZOEY KIM

benefits outweigh an estimated 21% increase in the external indexes, two widely stomps into theaters year’s virtual event at
costs for public companies. watched measures of on March 29. This will the UN, neurodivergent
Chinese manufacturing, be the 13th film for the panelists will give their
But the commission is nonetheless right on the merits. will be released on great, misunderstood thoughts on the state
Its decision is simply recognizing that there’s strong inves- March 30 and 31, ape. For his reptilian pal, of affairs for autistic
respectively. this is movie No. 38. people worldwide.
tor demand for this information to be provided in a clear
 A DV E R T I S E M E N T

Investing for
the Next
Generation
Jose Minaya’s parents immigrated to the United
States from the Dominican Republic, and saving
for retirement was an unknown concept. Now as
CEO of asset manager Nuveen, Jose is committed
to investing in the next generation. “With Nuveen’s
size, scale, and legacy, we can help all workers
benefit from generational success and retire
with dignity, thanks to its stable and long-term
investment strategies,” he says.

“Wells Fargo supports Nuveen as they create

products and services to help future generations
thrive,” says Danielle Squires, Head of Diverse
Segments at Wells Fargo Corporate & Investment
Banking. “Our goal is to innovate financial solutions
for Nuveen that help meet their clients’ needs,”
says Max Catalano, Managing Director, Wells
Fargo Corporate & Investment Banking.

Jose Minaya
CEO
Nuveen

bloomberg.com/forgingwhatsnext Corporate &

©2024 Wells Fargo & Company. Investment Banking
 ◼ REMARKS
● Griffin
of
10
● Paulson
● Business elites are warming to
Trump as Biden threatens to make life
less comfortable for the megarich
● By Brad Stone
The 2024 presidential election, pitting Joe Biden against
Donald Trump, may feel like a tiresome rematch of should-be
retirees facing off once again with the future of the free world
at stake. But something feels different and hard to explain
this time. Trump’s most visible supporters are no longer
angry blue-collar workers from red states wearing MAGA
hats and waving “drain the swamp” signs at rallies. They’re
● Musk
the
GRIFFIN: ASHLEE REZIN/SUN-TIMES/AP PHOTO. MUSK: AL DRAGO/BLOOMBERG. TRUMP: ALEX BRANDON/AP PHOTO.
PAULSON: RUPERT RAMSAY/BFA/SHUTTERSTOCK. ELLISON: JAYNE KAMIN-ONCEA/USA TODAY NETWORK
● Ellison
some of the most successful businessmen in the country,
expressing their grievances online, fretting about immi-
gration and the war in Ukraine and slinging around doubts
about Biden’s performance and age.
Elon Musk, Citadel founder Ken Griffin and Oracle Corp.
co-founder and Chairman Larry Ellison, among others, are
either overtly or quietly embracing the GOP nominee for pres-
ident and the prospect of returning to the political turbulence
of the Trump era. In other words, some of the same people
who’ve seen their wealth grow propitiously in the past few
years and benefited from the stability of the status quo are
now among the loudest voices trying to upend it. “A num-
ber of them come from the tech world, and part of their suc-
cess is based on disruption,” says Charles Myers, chairman of
Signum Global Advisors and a Democratic political adviser.
◼ REMARKS Bloomberg Businessweek
“They think our country and politics needs radical disruption,
and the chaos around that is intoxicating to them.”
Evidence of this revolt of the winners is getting hard to
ignore. Cantor Fitzgerald LP Chief Executive Officer Howard
Lutnick and hedge fund manager John Paulson are hosting
a fundraiser for Trump in April, Bloomberg News reports.
Activist investor and Walt Disney Co. foil Nelson Peltz
endorsed Trump in an interview with the Financial Times.
Even plutocrats like hotel developer Robert Bigelow, who
initially spurned Trump to become Florida Governor Ron
DeSantis’ biggest donor during the primary, have reversed
course to back his candidacy. And Griffin, a supporter of
DeSantis and former South Carolina Governor Nikki Haley
in the GOP primary, said on CNBC on March 12 that “for
investors, overall, a Trump administration is good for our
capital markets. It encourages the sense that government is
aligned with you and not opposed to you.” Griffin stopped
short of endorsing Trump, as did Jamie Dimon, the CEO of
JPMorgan Chase & Co., who in January called Trump “an
amazing political figure.”
Eight years ago venture capitalist Peter Thiel stood prac-
tically alone among tech leaders with his contrarian bet on
Trump. Today some of the most surprising Trump-friendly
voices emanate from Silicon Valley, once the bastion of
socially permissive libertarianism and a reliable source of sup-
port for politicians such as Hillary Clinton and Barack Obama.
Oracle’s Ellison dined recently with Trump on multiple occa-
sions, Puck reports, though he hasn’t yet donated to Trump’s
campaign. Other tech leaders, including venture capitalists
David Sacks and Marc Andreessen, who have not formally
endorsed a candidate, regularly excoriate Biden and his pol-
icies on X, the social network formerly known as Twitter.
Then there’s Musk, whose political transformation from
green Democratic Californian to vituperative anti-woke
Texan has been on vivid display. “Just to be super clear, I am
not donating money to either candidate for US President,” he
posted on X on March 6. But he posts daily screeds against
what he calls the “woke mind virus” and espouses the con-
spiracy theory that Biden is allowing illegal immigration into
the US to create a permanent Democratic voting bloc. In an
interview in mid-March, Musk told Don Lemon he was “lean-
ing away from Biden.”
The simplest and easiest explanation for this blowback is
materialistic: They’re acting on a barely concealed fear that a
majority might be coming for their wealth. Biden has, in fact,
explicitly threatened this. In his State of the Union address,
he called for a 25% billionaire tax on the assets of any indi-
vidual worth more than $100 million—not just their annual
income or capital gains. He also described plans to raise the
corporate income tax rate, from 21% to 28%, and to roll back
the Trump-era tax cuts for the rich, which he blamed for bal-
looning the federal debt.
Biden’s agenda goes far beyond tax cuts. He’s working to
undo the shift to pro-capital, anti-union policies that began
with Ronald Reagan in the 1980s, which many economists
March 25, 2024
blame for widening inequality. Biden visited the picket lines
of the United Auto Workers during its bitter 46-day strike last
fall, then recognized UAW President Shawn Fain during his
speech before Congress. The union recently announced an
effort to organize electric-vehicle maker Tesla Inc.
The Biden administration has also aggressively reviewed
and blocked mergers and acquisitions, another posture that
likely doesn’t endear it to business leaders. “You do hear
them complaining about [Federal Trade Commission Chair]
Lina Khan and the antitrust enforcers,” says Nidhi Hegde,
managing director of the American Economic Liberties
Project. She notes the irony that “while this pro-competition
agenda has really taken off, many of the antitrust cases
against Big Tech were instigated under Trump.”
Those are some of the rational reasons that some Wall
Street and tech leaders may be warming to the previous
incumbent. But there are probably a few emotional factors,
too. Being contrarian and outrageous on social media may be
genuinely thrilling for people who have the resources to buy
and experience anything they want. “They love annoying and
angering people who are annoyed and angered by Trump,”
says Jeff Hauser, executive director of the Revolving Door
Project, a group that tracks executive branch appointees.
There’s also an element of revenge for a group of people
who—regardless of their affluence—have come to see them-
selves as victims. Trump’s victory in 2016 increased scrutiny 11
of tech companies inside and outside Washington and led to
an unforgiving reappraisal of Musk and other tech leaders.
“The tech titans’ fall from grace in the eyes of the broader
culture has helped drive their angry backlash against Biden
and the Dems,” Hauser says. “They think they have been
tongue-tied and disrespected.”
Much of this swell of support for Trump feels tinged with
real anger and a palpable tension between the über-wealthy
and other elites in politics, academia and the media, who
view each other with increasing disdain. Musk, Andreessen
and hedge fund magnate Bill Ackman, another vociferous
tweeter who’s predicted an easy Trump victory, aren’t just
critical of Biden. They also fulminate against the mainstream
media, which tends to point out Trump’s lies and threats
to democracy, and against the top universities, which they
claim have adopted dangerous stances on issues ranging
from antisemitism to diversity, equity and inclusion.
In that way, the billionaires aren’t all that different from
Trump’s main constituency of less-educated working-class
White households. Both groups tend to see a conspiracy
by far-off elites who are out to deprive them of influence,
expropriate their money and squander America’s advan-
tage abroad. Supporting Trump, and even defending and
extolling his unpredictable governance and involvement in
the Jan. 6, 2021, attack on the Capitol, is their way of flip-
ping the proverbial bird to this real or imagined establish-
ment. On the other hand, cozying up to the potential next
president and protecting their economic interests is proba-
bly also just a really smart hedge. <BW>
 Bloomberg Businessweek March 25, 2024

B China’s Cheap EVs

U Will Help US Buyers
S
I
N
12
E
S
S
BYD’s sub-$10,000 Seagull electric car sets a new global
automotive bar, forcing Detroit to pivot toward lower-priced rides
ILLUSTRATION BY YUKI MURAYAMA. MUSTANG: FORD. SEAGULL: BYD

No American car buyer today can purchase a
Chinese brand’s electric vehicle. And no one is
really sure when these EVs will arrive on US shores.
But the prospect of cheap Chinese-made EVs is
already causing sleepless nights in Detroit.
The primary threat comes from cars such as
BYD Co.’s Seagull hatchback, which features
angular styling, a two-tone dashboard shaped
like a seagull’s wing and six air bags. There’s even
Edited by
a 10-inch rotating touchscreen for its infotain-
James E. Ellis ment system. BYD’s company slogan, “Build Your
Dreams,” is embossed on the rear of the vehicle.
The car’s most extraordinary feature, though,
is its $9,698 price tag. That undercuts the average
price of EVs sold in the US by more than $50,000
(and is only a little more than a high-end Vespa
scooter). Such aggressive pricing by BYD, which
surpassed Tesla Inc. in late 2023 to become the
world’s largest producer of electric vehicles, is
indicative of how Chinese auto manufacturers
will likely force US makers to pivot away from
mainly producing expensive second cars for the
◼ BUSINESS
affluent and toward more reasonably priced EVs
for the Everyman.
Just as the long-feared prospect of a revolution-
ary EV from US tech giant Apple Inc. has receded,
American carmakers now face a possibly greater
challenge from Asia. China, long a manufactur-
ing hub for Western companies’ products, is hell-
bent on expanding its own companies’ reach
around the globe. It’s already the biggest market
for EVs, and it’s using that scale and manufactur-
ing know-how to help boost sales of competitively
priced Chinese models to an increasingly climate-
conscious world.
For now, the Chinese onslaught is being kept at
bay in America by stiff tariffs and moves to erect
even tougher trade barriers against the US’s geo-
political adversary. But the Chinese market accounts
for about 70% of all EVs sold globally, so China’s
push to lower prices is causing a ripple effect that
can’t be ignored in the long term—even if political
maneuvering by American lawmakers manages to
slow the Asian giant’s automotive advance toward
the US, the world’s most profitable car market.
“This threat has put everybody on alert,” says
Jeff Schuster, global vice president for automotive
research at consultant GlobalData. “It forces inno-
vation in a way that might not have happened
as quickly.”
Auto executives and politicians in Washington
are sounding the alarm about a potential existen-
tial threat to American car brands—and the millions
of workers employed building them. The Alliance
for American Manufacturing, a trade group backed
by major manufacturers and labor unions, is calling
for new protectionist trade measures against China
to prevent an “extinction-level event.”
“Chinese companies are ultra-competitive today,”
says Michael Dunne, an auto industry consultant
who previously worked for General Motors Co. in
Asia. “The question in every boardroom right now
is, how do we compete with them?”
Ford Motor Co., Tesla and other carmakers are
quickly tearing up their EV playbooks to compete
against these cheap new vehicles sold outside the
US. Ford Chief Executive Officer Jim Farley calls
the Seagull “pretty damn good” and cautions
that any automaker that can’t compete with the
Chinese globally in the near future risks losing
as much as 30% of its revenue. One of Farley’s
top EV executives calls Chinese EVs “a colossal
strategic threat.”
BYD’s Atto 3, a curvaceous five-passenger
SUV designed by a team led by former Audi and
Lamborghini design chief Wolfgang Egger, could
be even more imposing. It boasts a Tesla-like
Bloomberg Businessweek March 25, 2024
dashboard with a large center touchscreen that
swivels to vertical or horizontal; quirks such as
pseudo-guitar strings over the door pockets that
passengers can play to make music; and a gear
shifter in the center console that looks like the
throttle lever in a jet cockpit. There’s also a com-
plete suite of safety features, including front and
rear collision warning sensors, blind spot monitor-
ing, cross-traffic alerts and automatic emergency
braking. And all that starts at $31,000, about half ● Number of vehicles
exported from China
the average price of an American EV. globally last year, up
US carmakers express fear that China is set- from 1 million in 2020
ting a new global standard—one they can’t ignore.
Chinese brands already have established foot- 5.2m
holds in key regional markets including Europe,
Mexico and the Middle East, and they’re keen to
keep growing.
Exporting is crucial to the profitability of
Chinese automakers because they’re burdened
with too much factory capacity in their own coun-
try. In the past three years, China has quickly grown
to become the world’s largest automotive exporter,
shipping out 5.2 million vehicles last year, up from
1 million in 2020. “Most Chinese automakers are not
making a profit at home, so they’re running as fast
as they can to export,” Dunne says. 13
BYD and Zhejiang Geely Holding Group Co. are
winning over car buyers worldwide with distinc-
tive vehicles that have plenty of creature comforts.
Some are packed with advanced technology, such
as the ability to park themselves. And many are
priced well below the stickers on cars long sold in
those export markets.
Continental Divide
Comparing two EVs, both considered lower-priced in their respective home markets
▼ Ford Mustang Mach–E ▼ BYD Seagull
Starting price: $39,895 Starting price: $9,698
Seats: 5 Seats: 4
Range: 250 miles Range: 190 miles
Length: 185.6 inches Length: 148.8 inches
Zero-to-60 time: 6.3 seconds Zero-to-60 time: 11 seconds
Features: Wireless phone integration with Features: Rotating center touchscreen; single
Apple CarPlay and Android Auto; optional front windshield wiper; no frunk
BlueCruise hands-free driving; frunk
Where sold: China, Mexico, Brazil
Where sold: 37 countries, including the US,
Canada, Mexico, Brazil, Argentina, China and
New Zealand
 ◼ BUSINESS
“The Chinese offensive is possibly the biggest
risk that companies like Tesla and ourselves are
facing right now,” Carlos Tavares, CEO of Chrysler
parent Stellantis NV, told reporters in February.
“We have to work very, very hard to make sure
that we bring our consumers better offerings than
the Chinese.”
Western carmakers are struggling to boost
demand for their own battery-powered models.
Ford and GM have recently slashed EV production
because of slowing demand brought on in part
by high prices, hardware and software glitches
marring rollouts, and consumer concerns about
America’s spotty charging infrastructure.
“The competitive threat is here, even if we don’t
see the vehicles” yet, says GlobalData’s Schuster.
“It’s not a matter of if, but when” they arrive.
Ford is responding by shifting its attention from
big EVs to smaller, low-cost ones. As a result, plans
for an electric three-row SUV have been delayed,
say people familiar with the change, who asked
not to be identified disclosing internal plans.
Instead, Ford is focusing on developing
small EVs through a specialized team in Irvine,
California. The company has said little about it
14 publicly except that the skunk works effort is
led by Alan Clarke, who came to Ford two years
ago after leading the engineering of the Model Y,
Tesla’s top seller.
Bloomberg Businessweek has learned that this
team consists of fewer than 100 people working
on a new electric platform to underpin a compact
SUV, a small pickup and, potentially, a vehicle that
could be used for ride-hailing, according to one of
the people. The first model will arrive in late 2026,
starting around $25,000—matching the expected
base price of a low-cost EV that Tesla is working
on, the person says.
Initially, Ford’s compact EV will be powered by a
lithium-iron-phosphate battery, which is about 30%
cheaper than traditional lithium-ion batteries, but
it’s exploring other battery technology to cut costs
further, the person says.
Farley has made it clear that, unlike Ford’s
money-losing compacts of the past, the small
EV must turn a profit within a year of hitting the
market. That’s a big goal for a company projecting
EV losses of as much as $5.5 billion this year.
Meanwhile, officials in Washington are looking
for ways to keep out Chinese EVs. There’s talk on a
bipartisan basis of hiking the already stiff 27.5% tar-
iff on Chinese-made vehicles sold in the US. The
current levy is high enough to have effectively
banned almost all EV models made in China, other
than a few sold in America by Swedish-brand Volvo
Bloomberg Businessweek March 25, 2024
Cars and sister brand Polestar—both automakers
that Zhejiang Geely owns.
President Joe Biden is considering a ban on
internet-connected Chinese cars on national secu-
▼ Average price of
rity grounds, suggesting the Chinese government EVs sold
could be using them as rolling spy balloons. Such US
a move could prohibit import of all Chinese-made China
vehicles because most modern automobiles are
equipped with a modem and are therefore capable $60k
of gathering data.
The Alliance for American Manufacturing and
the United Auto Workers are both lobbying for
these policies. In comments submitted to the Office 40
of the US Trade Representative in January, the UAW
called for increased “tariffs rates on automobiles and
automotive parts, particularly electric vehicles and
related components” from China. 20
Although those measures are designed to block 2018 2023
China’s exports to the US, experts caution that
they may simply lead to creative workarounds.
In the 1980s, tough US trade measures—including
voluntary export restraints foisted on Japanese
carmakers—only led Honda Motor, Nissan Motor
and Toyota Motor to set up nonunion factories
in the US.
No Chinese brand has announced plans for
a US factory, but BYD is scouting a plant site in
Mexico, where it could back-door cars into the
US tariff-free, thanks to the US-Mexico-Canada
Agreement, or USMCA.
Some auto industry officials are resigned to that
inevitability. “If I was sitting in China right now run-
ning a Chinese OEM [original equipment manufac-
turer], I’d be looking for land in Mexico, because
you’ve got a supplier base, low cost of construc-
tion, low cost of labor and the USMCA that gives you
access to the US,” Marin Gjaja, chief operating offi-
cer for Ford’s EV unit, Model e, said in an interview
last month. “They’re going to come here, just as the
Japanese ended up here.”
Mark Wakefield, managing director and DATA: EDMUNDS, BLOOMBERG CALCULATIONS. CHINA EXCLUDES THE MINI-CAR SEGMENT
co-head of the global auto practice at consultant
AlixPartners, says Western companies must learn
to use the latest low-cost technologies that China
already has mastered. But they also have to remem-
ber that the Chinese have gotten better at designing
for global car buyers.
“Their vehicles are generally attractive to look at,
and if you stack them up against a lot of Western
designs, they’re distinctive, competitive and often-
times better,” Wakefield says. “There’s not a lot of
really ugly ones.” �Keith Naughton
THE BOTTOM LINE American automakers are rethinking their
EV strategies as Chinese brands push down prices. That’s bad for
carmakers in the US, where average prices are twice those in China.
 ◼ BUSINESS
Weight-Loss-
Drug Users Pay Up
To Quit the Meds
● Cost and concerns about long-term use
send patients to services to wean them off
Americans are flocking to drugs such as Ozempic,
Wegovy and Zepbound, drawn by the prospect of
rapid weight loss. But $1,000-plus monthly costs and
scant insurance coverage mean users drop off the
treatments almost as quickly as they get on.
A group of companies sees this as an opportunity.
Targeting current and former users of the medica-
tions, they’re offering telehealth checkups, lifestyle
coaching, access to community support groups,
exercise advice and other features—all with the aim
of keeping the pounds off once the treatment has
ended. Monthly fees can be as high as $300.
The services are part of a broader ecosystem
that’s springing up around the blockbuster drugs,
16 known as GLP-1s, from Eli Lilly & Co. and Novo
Nordisk A/S that are reshaping weight-loss treat-
ment. Online health companies such as Calibrate
Health Inc. and Omada Health Inc. are aiming to pro-
vide support that primary-care physicians may not.
It’s a “huge addressable potential market,” says
Ryan Daniels, an equity research analyst at William
Blair & Co. And support programs could be worth
as much as $2.5 billion annually, according to his
firm’s research. William Blair identified more than
20 digital health companies that are supporting
people who are taking one of the treatments.
Obesity affects about 42% of Americans, fed-
eral officials estimate. Medications such as Wegovy
mimic a gut hormone called GLP-1 that interferes
with the reward system that makes food pleasurable.
But when people stop taking the drugs, the crav-
ings return. A study from 2022 showed that patients
regained two-thirds of the weight they’d lost a year
after quitting—even after embracing healthier life-
styles while on the medications. And there’s a lot of
churn among users: A study by pharmacy benefit
manager Prime Therapeutics LLC found that 68% of
patients who started taking GLP-1 drugs for weight
loss were no longer on them after a year.
Makers of the drugs say users will likely need to
stay on them for life. New York-based Calibrate, a
digital health provider, has a weight-management
platform that doles out the medicines, as well as a
program that helps users who want to quit. “People
Bloomberg Businessweek March 25, 2024
want sustained weight loss, and they don’t want
to be on medication for life,” says Kristin Baier,
Calibrate’s vice president for clinical development.
Calibrate’s program costs $1,749 a year and
includes one-on-one video coaching every two
weeks, as well as tools to help users improve their
eating, sleep, exercise and emotional health. Baier
says some customers are able to shorten the length
they take a GLP-1 drug to only seven or eight months.
Emily Epperson, a 48-year-old Dallas attorney,
began taking a GLP-1 medication in July 2023 after
feeling unable to quiet her nagging thoughts about
food. By mid-January she was confident enough to
stop—in part thanks to the coaching she was getting
from Medifast Inc., a health and wellness company
that’s teamed with telehealth provider LifeMD Inc.
to provide support programs and products.
Epperson says that the medication’s cost was one
factor in halting but that mainly she didn’t want the
drug to be a “crutch.” “I don’t have to go run and
get that hamburger at lunch,” she says. “I can make
healthier choices that support my health goals.”
◀ Epperson
Omada has a program called GLP-1 Care Track.
Insurer Cigna Group recently tapped Omada as a
PHOTOGRAPH BY MATTHEW COUGHLIN FOR BLOOMBERG BUSINESSWEEK
“behavior-change companion” for people obtaining
the drugs through employer-provided health plans.
Carolyn Bramante, an obesity doctor at the
University of Minnesota Medical School, says spe-
cialized care is critical after taking GLP-1 drugs,
and lifestyle programs can help—but most import-
ant, people need to change the way they view
weight loss. “Obesity is a chronic disease,” she says.
“Thinking about it in that frame is important. If it is
untreated, it will relapse.” �Jemima Denham
THE BOTTOM LINE Two-thirds of patients who take new
GLP-1 weight-loss drugs quit them within a year of starting. New
companies are offering support plans to help keep the pounds off.
At Morgan Stanley, we may seem like a
contradiction — and we are.

At 88 years old, we see the world with

the wonder of new eyes, helping you see
untapped possibilities and relentlessly
working with you to make them real.

We partner with you to unlock new ideas,

to create new legacies, to research,
innovate, and collaborate to transform
a company, an industry, a generation.

Because grit and vision working in

lockstep puts you on the path to your
full potential.

morganstanley.com/whyus

© 2024 Morgan Stanley Smith Barney LLC. Member SIPC.

Investing involves risk including the potential loss of principal invested.
 Bloomberg Businessweek March 25, 2024

T Is Congress
E Thinking
Too Small
C On TikTok?
H Critics of a proposed ban say
social media’s problems require

N broader action

O By passing a bill that could ban video-sharing app

TikTok in the US, the House of Representatives on
March 13 took one of the most aggressive legisla-
18 tive moves the country has seen during the social

L media era. Many lawmakers who opposed the bill

want to think bigger. “We need to address data pri-
vacy across all social networks, including American
companies like Meta and X, through meaningful

O
regulation that protects freedom of expression,”
said Wisconsin Democrat Mark Pocan in a post on
X after he voted against the bill. “Not just single out
one platform.”

G The bill, which would force China’s

ByteDance Ltd. to give up its stake in TikTok as a
condition of continuing to operate in the US, now
heads to the Senate. All signs are the legislation will

Y have a harder time there than it did in the House.

Some senators have already said the best way to
design TikTok legislation that will stand up to legal
challenges is to set rules about data privacy for the
entire tech industry, an idea that’s been kicking
around Washington for years without ever getting
particularly close to becoming law.
TikTok, which declined to comment, has
argued that industrywide rules are the best solu-
tion, and that it has invested significantly to pro-
tect personal data and audit its operations for
doing so. It also pushed the idea of such rules in
US intelligence officials for years have been
telling Congress that Chinese control of TikTok is
such a dire threat that a ban is justified. Former
President Donald Trump tried to ban it. President
Joe Biden rescinded Trump’s executive orders
proposing a blanket ban, but he also signed a law
in late 2022 prohibiting the app on government
devices. More than 30 states have passed their own
ILLUSTRATION BY ERIK CARTER

recent meetings with officials, according to a per-
son familiar with those discussions who wasn’t
authorized to speak publicly. ByteDance has spent
Edited by
$21 million on federal lobbying since its first dis-
Joshua Brustein closure in late 2019.
laws to do the same. Montana lawmakers passed a
complete ban on TikTok in the state, but the law is
tied up in court.
TikTok’s critics point to several problems with
the app. They’re concerned that it could allow the
◼ TECHNOLOGY
Chinese government to access users’ personal data
and also that Beijing could secretly spread harmful
content to the US’s 170 million users by tinkering
with the algorithm that decides which videos to dis-
play. Despite years of scrutiny, US officials haven’t
publicly shared evidence that such things have hap-
pened. TikTok has repeatedly contested claims that
it’s doing anything wrong and says it’s not beholden
to the Chinese government.
In congressional testimony on March 12, FBI
Director Christopher Wray warned of China’s “abil-
ity to conduct influence operations” by altering
TikTok’s content recommendation algorithm. “That
Bloomberg Businessweek March 25, 2024
19
is extraordinarily difficult to detect,” Wray said. “And
that is what makes it such a pernicious risk.”
There are few rules governing how social media
algorithms can serve up particular content. Any
that do so would have to contend with courts’ con-
sistent rulings that the First Amendment precludes
restrictions on what Americans can say and what
information they can access. Putting restrictions
on speech in the name of national security would
require proof of “significant or imminent harm,”
according to Patrick Toomey, deputy director
of the American Civil Liberties Union’s National
Security Project. “That evidence has never been
 ◼ TECHNOLOGY Bloomberg Businessweek March 25, 2024

presented either to the public or in a court of they think plugging one of those tiny holes is going ▼ US government
versus TikTok
law” in the case of TikTok, he says. to fix these problems,” Schroeder says.
▷ October 2019
Even showing that TikTok is used to spread Large tech companies have said they’d prefer Several senators ask
state-sponsored influence campaigns may not be national standards to a patchwork of state laws US intelligence officials
to investigate national
sufficient, given a 1965 US Supreme Court case on issues like privacy, but the specific provisions security concerns
that unanimously struck down rules for the US of any tech accountability bill are likely to be related to TikTok.
Post Office to restrict the spread of communist hotly contested. ▷ December 2019
The Army and Navy ban
propaganda from the Chinese Communist Party. Senators have raised several issues with the TikTok on government
The sponsors of the House’s TikTok bill say they House’s TikTok bill. Washington state Democrat devices.

worked with the Department of Justice, and argue Maria Cantwell, who heads the Commerce ▷ August 2020
President Trump signs
that their bill will stand up to legal scrutiny because Committee, where the bill would need to be con- an executive order to
it regulates corporate conduct, by giving ByteDance sidered next, has been working on her own TikTok ban TikTok if it’s not
sold within 45 days,
the option to divest TikTok, rather than prohibiting bill. She has said she’s concerned about security then extends the
specific kinds of content. threats related to tech companies’ access to users’ deadline to 90 days.

personal data, but has also questioned the con- ▷ September 2020
A federal judge grants
stitutionality of the House’s approach. After the a preliminary injunction
House vote, she said she would work with lawmak- allowing TikTok
downloads to continue
ers in both chambers “to try to find a path forward in the US, the first
that is constitutional and protects civil liberties.” in a series of rulings
blocking enforcement
Any changes in the Senate would require the of Trump’s order.
House to vote again on the new version. ▷ June 2021
Earlier data privacy proposals haven’t made it President Biden revokes
Trump’s ban but
past Cantwell’s committee. After a House commit- instructs the commerce
tee last year advanced a privacy bill further than secretary to review
tech services with ties
any previous proposal, Cantwell panned the mea- to foreign adversaries
20 sure and its approach to enforcement. The com- for potential privacy
● Cantwell and national security
mittee did advance two bills last year to increase threats.
Advocates of stronger internet regulation protections for children online, but they haven’t ▷ December 2022
believe there are legally sustainable ways to regu- gotten a full Senate vote. Biden signs a bill to
ban TikTok on most
late software such as TikTok’s content recommen- The House on March 20 also voted on a second federally managed
dation engine. Calli Schroeder, senior counsel and bill that would prohibit data brokers from trans- devices.

global privacy counsel at the Electronic Privacy ferring sensitive US user data to foreign adversar- ▷ March 2023
A House committee
Information Center (EPIC), says federal rules ies. This measure, which the House Energy and passes a TikTok
should require tech companies to be transpar- Commerce Committee advanced along with its ban, but the Biden
administration backs
ent about how their algorithms prioritize content. TikTok-focused bill, follows an executive order from a separate Senate bill
This would apply not only to TikTok but also to the Biden administration aiming to prevent “coun- that would allow the
commerce secretary to
Facebook, Instagram, YouTube, X and other ser- tries of concern” from buying personal information ban any foreign-owned
vices that have been accused of inciting violence, related to the health, genetics, location and finances technology. Neither
ends up advancing.
distorting elections and showing dangerous con- of US citizens. Both moves fall short of a federal data
▷ May 2023
tent to children. privacy standard, but they are a recognition that an
FROM LEFT: DREW ANGERER/GETTY IMAGES, JUSTIN J WEE/THE NEW YORK TIMES/REDUX
Montana passes a bill to
At least 15 states have passed their own privacy unchecked market for personal data creates oppor- ban TikTok, prohibiting
app stores from offering
laws, some modeled on Europe’s General Data tunities for foreign governments to access poten- it there by 2024. More
Protection Regulation (GDPR). EPIC and other tially dangerous troves of information. than half of states had
already restricted the
groups have called for a federal data privacy stan- Even though many lawmakers are energized app on government
dard that would allow users to know who has their by the threat from Beijing, that may be more of a devices.

personal information and give them the ability to distraction from the bigger problem than a solu- ▷ November 2023
A federal judge blocks
protest, remove consent for sharing and correct or tion, says Ivan Tsarynny, chief executive officer of Montana’s ban from
delete their data. Such a rule, in Schroeder’s view, cybersecurity company Feroot Security, who’s tes- taking effect.

should also define sensitive categories such as race,
gender, sexuality or political affiliation that neces-
sitate extra protections.
Even if TikTok had a new owner, the broader dan-
gers of online information and data sharing would
remain. “If you think of the internet ecosystem as a
colander with a million holes in it, I don’t know why
tified to lawmakers about TikTok and data issues. ▷ March 2024
The House passes a
“TikTok is a sexy, shiny object right now because bill that would either
it’s related to China,” he says. �Anna Edgerton and force a sale of TikTok
or ban it.
Alex Barinka
THE BOTTOM LINE Lawmakers have lots of technology policy
ideas that don’t center on TikTok’s Chinese ownership, but the
most significant ones have been languishing for years.
◼ TECHNOLOGY
ChatGPT But for Cinema
● AI-powered video creation tools are improving faster than even their proponents imagined
The video circulating online of a trio of giant
tusked beasts bounding through glistening white
snow on a crisp day looked like something from
a National Geographic documentary—except that
woolly mammoths went extinct thousands of years
before the invention of the video camera.
OpenAI released the 10-second clip in February
to introduce Sora, its artificial intelligence soft-
ware that can turn written prompts into strik-
ingly realistic-looking videos of up to a minute
in length. The new feature, and the instant buzz
around it, felt like a flashback to late 2022 when
OpenAI introduced ChatGPT, upending the tech
landscape overnight and pushing AI into the
public consciousness.
This time, though, OpenAI wasn’t breaking new
ground as much as trying to catch up to other start-
ups already offering similar tools. The demo wasn’t
accompanied by a product rollout or a clear indica-
tion of when one might happen. The company told
Bloomberg News that it hasn’t yet set a timeline for
Bloomberg Businessweek March 25, 2024
Sora, despite a recent comment from an executive
saying the service would be released later this year.
A year and a half ago, Meta Platforms Inc. and
Google showed off text-to-video research projects
that featured simple, seconds-long, low-resolution
clips of a melting ice cream cone, a flying super-
hero dog and other subjects. Runway AI Inc.,
which has raised $237 million to date, kicked off the
frenzy around AI video generators last March with
the release of Gen-2. The service could produce
slightly choppy-looking three-second clips based on
prompts such as “drone footage of a desert land-
scape.” Now it can make significantly higher-quality
videos of about 20 seconds, says co-founder and
Chief Executive Officer Cristóbal Valenzuela.
Other AI startups, including Haiper, Pika and
Stability AI, are also building tools that can pro-
duce more complex short clips with moving 21
images and sound effects (think bacon audibly
sizzling as it cooks in a pan). The startups have
pushed out video-generation software that
◀ Valenzuela (center),
with fellow Runway
founders Alejandro
Matamala Ortiz and
Anastasis Germanidis
 ◼ TECHNOLOGY
anyone can use, cheaply or for free. These tools
have advanced faster than even some who’ve
been working on the technology had expected—
fast enough to cause concern among those wor-
ried about the economics of video creation or the
spread of sophisticated disinformation.
The Sora demo, even if it wasn’t a product
release, shows the promise of the technology,
says Demi Guo, co-founder and CEO of Pika,
which has raised $55 million and rolled out its AI
video-making software late last year. “It show-
cases what is right now the upper bound for how
close we are to really good-quality videos and
how close we are to more aggressive commercial-
ization,” Guo says, adding that the hype around
Sora is already helping her company attract more
potential employees.
Valenzuela says Gen-2 is already being used
by millions of people, including professionals at
production and animation studios who rely on it
for previsualization and storyboarding. Film edi-
tors are creating videos with Runway and com-
bining them with other footage to make B-roll
or visual effects, he says, adding that Madonna
also used it for some visuals projected onstage
22 during her concerts. With the introduction of
Sora, Valenzuela says, AI video generators, though
still nascent, have now “crossed the chasm” to
mainstream awareness.
Paul Trillo, a director whose work includes
Ford F-150 commercials, music videos and exper-
imental films, says he’s been integrating AI image
and video generators into his creative process for
a while. As an early user of Runway’s software,
he’s found that it lets him explore many more con-
cepts and special effects. He says he doesn’t think
AI will replace filmmakers, because it can’t rep-
licate the nuance or spontaneity of human cre-
ation. Still, “there’s something that AI offers that
in some ways is more fascinating than just picking
up a camera,” he says. “You’re kind of swimming
through this murky ocean to discover these bizarre
gems that are at the bottom.”
Giada Pistilli, principal ethicist at AI startup
Hugging Face, says the technology has the poten-
tial to make it easier and cheaper to add special
effects to films, which might help low-budget
filmmakers in particular. But in her view the
downsides, such as making it easier to spread
AI-generated disinformation and pornography,
outweigh the positives. “One could say, ‘It was the
same thing with Photoshop, it was the same with
any kind of tools that already existed before,’ ” she
says. “I don’t agree. I would say that the first char-
acteristic of AI is it’s easy to scale.”
Bloomberg Businessweek March 25, 2024
For now, the technology has clear limitations.
Tests conducted by Bloomberg Businessweek of text- “There’s
to-video software from Pika and Haiper, as well something
as Runway’s Gen-2 and Stability AI’s Stable Video, that AI offers
showed that these systems may frequently fail to that in some
produce videos that follow simple typed prompts. ways is more
Sora isn’t publicly available to test, but even some fascinating
of OpenAI’s hand-picked clips show how creating than just
objects that faithfully follow the laws of physics picking up
remains tricky for video-generating software. a camera”
Generating video with AI is more computation-
ally intensive than running chatbots or still-image
generators, making it both more expensive and
slower. These technical challenges could affect the
business model of video generation, with the prices
being passed on to customers. Runway users pay
for credits that they expend on its software, and
Valenzuela says it costs users about $1 to gener-
ate 20 seconds of video. Prices are likely to come
down; typically the technologies become less expen-
sive over time as hardware and software improve.
Valenzuela says professional animation and visual
effects studios may charge $8,000 to $25,000—or
more—for a minute of animated or created film. He
predicts that someone will make a film by the end
of the year that’s at least 60 minutes long in which
every scene uses an AI video generator.
Guo says that within a year Pika may have soft-
ware that can create high-quality clips of a minute or
so in length, and within two years it could be used to
make a feature film. But there could be large impacts
even before that happens: Many of the clips that peo-
ILLUSTRATION BY NICK LITTLE
ple watch in films, in commercials or on social media
are less than 10 seconds long. �Rachel Metz
THE BOTTOM LINE OpenAI’s demo of a text-to-video tool
increased excitement around AI video, even though it’s lagging
behind other startups in getting a product to market.
Sustainable performance
to electrify the future
 Bloomberg Businessweek March 25, 2024

F
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N
A
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24
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PHOTO ILLUSTRATION BY 731; PHOTOS: COURTESY JULIUS BAER (1), GETTY IMAGES (3). DATA: COMPILED BY BLOOMBERG

Averting Another
Swiss Banking Storm
Julius Baer’s woes echo those of Credit Suisse.
Management says it can avoid that fate

Edited by
David Rocks and
Jeff Black
◼ FINANCE
A year ago, as UBS Group AG was dissecting the
remains of Credit Suisse after its emergency take-
over of the troubled lender, the executive team at
another top Swiss private bank jumped to reassure
clients of its stability. Philipp Rickenbacher, then
the chief executive officer of Julius Baer Group
Ltd., told his wealthy customers that the 133-year-
old institution had “a laser focus” on getting
through an historic upheaval for Swiss finance.
The bank’s balance sheet was “rock solid” and
adhered “to the highest risk-management stan-
dards,” he wrote in a letter to clients.
Rickenbacher’s comforting words soon rang
hollow. As he penned his missive, Baer was sit-
ting on some $700 million in exposure to a single,
soon-to-be-bankrupt client: Austrian real estate
tycoon Rene Benko. When Benko’s empire of lux-
ury department stores and posh hotels crumbled
last year, so did Rickenbacher’s credibility. The
bank announced his departure on Feb. 1.
A year after Credit Suisse’s demise—
precipitated by a reckless approach to risk that
spurred clients to pull out tens of billions of dol-
lars over just a few months—Swiss financial author-
ities are confronting another problem bank. The
litany of concerns uncovered by the Benko deba-
cle is long, but the gist is that Baer simply allowed
the pursuit of profit to outweigh prudence. And
while no one is predicting the bank will follow
Credit Suisse into the financial graveyard, there
are echoes of the missteps that toppled that giant.
The question for Baer and the Swiss financial
system is how to repair the damage as regulators
work on multiple probes at the lender. For the
bank, which declined to comment on the probes,
much remains unclear—from its future strategy to
reforming its risk culture to the prospect of a land-
mark acquisition—as either buyer or even as seller.
“I can assure you, we have extensively reviewed
the quality of our credit risks,” Evie Kostakis,
Baer’s chief financial officer, said on a Feb. 1 call
with stock analysts. “We are vigorously ramping
up even further our recovery efforts.”
Baer’s headquarters sits just a stone’s throw
from UBS’s along Bahnhofstrasse, a stretch of
high-end boutiques, cafes and financial firms
that runs from Zurich’s neo-Renaissance central
station to its sparkling lakefront. The bank was
founded in 1890 as a money-changing house serv-
ing the newly mobile businesspeople brought in
by the railway. A decade later, co-founder Julius
Baer renamed the bank after himself.
In its early years, Baer had fortunes that fol-
lowed those of Switzerland as rapid industrial-
ization made the nation one of Europe’s richest.
Bloomberg Businessweek March 25, 2024
When World War II broke out, Baer set up a
branch in New York to help customers fleeing the
turmoil in Europe protect their wealth—its first
step toward international expansion.
In 1980, Baer went public with a listing in Zurich.
It soon began a series of acquisitions, and in 2013 it
bought Merrill Lynch’s wealth-management oper-
ations outside the US and Japan, assuring a solid
presence in Asia and the Middle East. Today, the
bank oversees 430 billion Swiss francs ($483 billion)
in client assets, but the business of managing rich
people’s fortunes is deeply fragmented. UBS, the
global leader in wealth management outside the
US, looks after almost $4 trillion in client funds,
but that accounts for less than 1% of total global
private wealth. The ultrarich value a discreet, per-
sonal touch, so growth usually requires buying
another outfit or luring bankers and their contact
books away from a rival.
That can propel managers into risky deals to
expand. After a push into Latin America in the
aughts under a previous CEO, Boris Collardi, Baer
ran into trouble over insufficient money laun-
dering controls related to alleged corruption in
Venezuela. Financial watchdog Finma imposed
a temporary ban on large-scale acquisitions and 25
slapped Collardi with a personal reprimand for his
lax oversight—a tough punishment in Switzerland.
Baer, along with several other banks including
remnants of Credit Suisse, is also under investi-
▼ Julius Baer’s
gation in Singapore over the handling of funds net income
linked to suspected criminals, though it’s unclear
whether that will lead to charges. $1.0b
Then there’s Benko. The business with the
free-wheeling Austrian arrived with a banker
named Gilles Stuck, who brought the account when
he quit Credit Suisse and in 2018 crossed the street 0.5
to work for Baer. Other banks had been unenthusi-
astic about requests for more loans, but Benko got
a warm welcome at Baer. Rickenbacher wanted to
add new sources of income, and one area of focus 0
was “private debt,” effectively lending to entrepre- 2004 2023
neurs who are rich on paper but lack liquid funds.
As Baer shoveled out credit, Benko grew to be the
biggest customer of that unit.
Even as Baer piled up massive exposure to
this single client, the handling of the Benko
account was waved through by the lender’s risk-
assessment staff. The implosion revealed a con-
flict of interest at Baer’s core: Teams that managed
credit risk reported to the same person as bank-
ers responsible for loans to private clients such as
Benko—in this case, the chief financial officer. At
most banks, the risk staff would typically report
to a chief risk officer. In short, Baer’s structure
 ◼ FINANCE
blinded managers to the possibility of the Benko
loans going sour, leaving them to focus on the
potential profits from the account. In the end, the
Benko affair cost Baer half its 2023 profit.
Baer’s travails have only intensified the nagging
suspicion in Zurich that something is awry in Swiss
finance, leaving regulators wondering what else they
might be missing. As Finma undergoes something of
a revamp after the Credit Suisse meltdown, it’s sta-
tioned staff at Baer’s Bahnhofstrasse offices, accord-
ing to people familiar with the matter. Multiple
investigations are underway: into risk processes,
client monitoring and the bank’s activities in Russia.
To bolster its credibility, Finma has hired
Stefan Walter, a veteran of the European Central
Bank with a decade of experience overseeing the
likes of Deutsche Bank AG, as its next CEO. And
the government is working through proposals that
will finally give Finma the power to fine banks that
step out of line.
Senior executives, speaking on condition of ano-
nymity to discuss private matters, say that since
clients didn’t lose any money there’s little risk
of the kind of nosedive in confidence that sank
Credit Suisse. Inflows of client funds to Baer have
26 improved since the Benko affair was revealed, man-
agers say. Yet investors appear less than fully con-
vinced. Baer’s share price dropped more than 20%
after the Benko news in November, and it’s only
partially recovered even as the benchmark Swiss
market index has climbed about 8%.
Finding a new leader will be key to regain-
ing the market’s confidence. Nic Dreckmann, a
two-decade Baer veteran, has been serving as
interim CEO since February. Although the board
initially didn’t see him as a long-term choice, he’s
indicated he’d like to stay on in the job, according
to people familiar with the matter. But the board
is still looking for an external candidate and is con-
sidering top bankers from across Europe.
The bank’s leaders are getting strategy advice
from Goldman Sachs Group Inc. as executives
look at possible acquisition targets to boost assets
under management. But given the flagging con-
fidence in Baer, it could also be acquired by a
rival—though the bank’s high valuation makes
that unlikely. “Julius Baer is in a psychologically
vulnerable position,” says Ray Soudah, a private-
banking veteran and founder of mergers and
acquisitions boutique Millenium Associates. “They
may become a target, and I wouldn’t be surprised
if some institutions may consider a bid.”
An immediate route to more solid growth is to
recruit staff from elsewhere—even though that’s
how Benko’s business was brought on board. Last
Bloomberg Businessweek March 25, 2024
year, Baer expanded its staff of wealth bankers
by more than 8%, to about 1,300. Although hiring
comes with headaches, such as compliance worries
and higher costs, incoming bankers usually bring
business with them. “Once the new people settle “I can assure
down, the hope is that they are going to start pro- you, we have
ducing more meaningfully this year,” says Andreas extensively
Venditti, an analyst at Bank Vontobel AG. reviewed the
In public and in private, Baer’s senior execu- quality of our
tives stress that they’ve learned important lessons credit risks”
from what went wrong. Top leaders are forgoing
bonuses, the bank is reworking its risk-control
structures, and the private debt business at the
heart of the Benko losses is being shut down. With
Rickenbacher out, attention is focused on expand-
ing Baer’s traditional business of wealth man-
agement. “We had the private debt issue, which
was an isolated case, but the underlying strategy
and the measures that we have put in place will
help us to meet our targets,” says Baer Chairman
Romeo Lacher. “The decisive measures that we’ve
taken give a clear message to our clients and to
the market that we take their concerns seriously.”
�Myriam Balezou and Jan-Henrik Foerster
THE BOTTOM LINE A year after Credit Suisse’s demise,
Switzerland is confronting similar missteps at Baer, which must fix
its problems while plotting a new course and reining in risk.
Magnificent Two, Middling
Two, Meh Three
● The AI revolution is reshaping the way investors
see even the highest-flying tech stars
For more than a decade, the stock market has been
supercharged by a handful of technology behe-
moths that have offered the promise of hyper-
growth. You know them: household names such
as Google parent Alphabet, Amazon.com, Apple,
Facebook parent Meta, Microsoft and Tesla.
Grouped under various acronyms that played off
their corporate monikers—FANG, FAANG, MAMAA—
these companies became a staple of just about
everyone’s portfolio.
Then last year, a newcomer joined the crowd:
Nvidia Corp., the leading chipmaker for artificial
intelligence technology. With its stock up more
than sixfold since the start of 2023, portfolio
advisers soon began talking about an investment
◼ FINANCE
strategy built around a new grouping, the
“Magnificent Seven.”
But this year, the Magnificent Seven has looked
more like the Magnificent Two, the Middling Two
and the Meh Three. As investors have come to
focus on the importance of AI, Nvidia and Meta
have surged ahead, Microsoft and Amazon have
done reasonably well, and the other three have
trailed the S&P 500 index. “No matter how good
it is, if it doesn’t have that AI component, you’re
not going to drive investors’ attention right now,”
says Kim Forrest, chief investment officer at Bokeh
Capital Partners.
Tesla Inc., which has struggled to make any
realistic claim as an AI player even as it grapples
with questions about the EV market and concerns
regarding Elon Musk’s leadership, is the worst-
performing stock in the S&P 500 this year, sinking
almost 30% as of March 20. Apple Inc. is also down,
and Alphabet Inc. has underperformed the broader
market. But on March 18 they both took a big jump,
with the latter posting its best day since December.
The reason? AI again. Bloomberg News reported
that Apple was in talks to license Google’s Gemini
AI engine for the iPhone.
Despite Apple’s strong showing on the Google
news, some investors suggest that if Apple
can’t boost its AI credibility, it will start looking
uncomfortably like Coca-Cola Co.—a solid per-
former with reliable revenue, but lacking the
hypergrowth investors demand from tech stars.
Apple has “become more of a value stock,” says
Phil Blancato, chief market strategist at Osaic
Holdings Inc.
Similarly, Alphabet’s surge doesn’t solve its
recent AI difficulties. In February, users discov-
ered that Gemini struggled to provide accurate
images of various races in historical contexts, such
as requests regarding America’s Founding Fathers.
That sparked conspiracy theories on social media,
with some claiming Google harbors a hidden bias
against White people. Sundar Pichai, Alphabet’s
chief executive officer, called Gemini’s perfor-
mance “completely unacceptable” and paused
its generation of images of people.
Expect AI to continue to reshape the corpo-
rate landscape. Microsoft Corp.’s partnership
with industry pioneer OpenAI has helped it edge
out Apple as the world’s most valuable company.
Microsoft now has a market value of almost $3.2 tril-
lion, while Apple’s is $2.8 trillion—but Nvidia sud-
denly isn’t far behind, at $2.3 trillion.
This explains why Apple CEO Tim Cook has
promised that his company will “break new
ground” in AI this year. The plan is crucial to
Bloomberg Businessweek March 25, 2024
AI Disconnect
Change in Magnificent Seven stock prices since Dec. 29, 2023
80%
Nvidia
40
Meta
Amazon
Microsoft
S&P 500
0
Alphabet
Apple
Tesla
-40
12/29/23 3/19/24
DATA: COMPILED BY BLOOMBERG
investors desperate for new growth sources.
Bloomberg News has reported that Apple is
planning a big announcement at its annual soft-
ware developer’s conference in June, though
many shareholders are losing patience and turn-
ing to stocks with a clearer path in AI, including
Microsoft and Nvidia. “If you took AI out of the 27
picture right now, and the sensationalism, would
people look at Apple differently?” says Kevin
Walkush, portfolio manager at Jensen Investment
Management. “I think they would.”
A deal between Apple and Alphabet would
build on an existing partnership that has for
years seen Google pay billions of dollars annu-
ally to be the default search option in the Safari
web browser. Talks between the two companies
on AI collaboration remain active, but no formal
announcements are expected until this summer.
And Apple could still choose to work with other
players—it has also held talks with OpenAI—or tap
multiple partners. Apple and Google declined
to comment.
Both companies could do worse than to look
at Microsoft for guidance. It’s currently trading
near a record high, but when Satya Nadella took
over in 2014, it was considered an outdated soft-
ware maker with a 20th century mindset and a
languishing share price. Now the company that
gave Windows to the world is everywhere, from
the cloud to AI. “Microsoft finally got going,” says
Mark Lehmann, CEO at Citizens JMP Securities LLC.
“But it took them 15 years to figure it out.” �Eric J.
Weiner, Jeran Wittenstein and Mark Gurman
THE BOTTOM LINE With increased focus on AI, Meta and Nvidia
have jumped ahead of other erstwhile tech juggernauts—though a
possible Alphabet-Apple deal has given those companies a lift.
 Bloomberg Businessweek
E Charting a Course
C For the Dollar
O ● Ensuring the greenback
retains its superpower status
N will be anything but smooth
sailing, according to an exclusive
excerpt from Paper Soldiers
O danger, but there’s no question that America’s priv-
One cloudy autumn evening in Washington, a black
Chevy suburban pulled up to an old stone man-
M sion on Sixteenth Street. The columns of the White
House were visible just one block south. A man
wearing a dark suit and an earpiece emerged from
28 the front seat and opened the passenger door, plac-
I ing a small stepping stool on the ground in front
of it. A 5-foot-3-inch woman with short white hair,
the collar of her plum-colored blazer popped up,
exited the SUV and swiftly entered the Hay-Adams
C
Hotel, the Secret Service officer in her wake.
Once inhabited by a descendant of one of the
nation’s Founding Fathers, the 136-year-old Beaux
Arts building has received members of the lite-
S rati like Mark Twain and political giants like Henry
Kissinger. On the night of Oct. 20, 2021, it was the
scene of a private gathering to welcome a new US
Treasury secretary: Janet Yellen.
Guests included former Treasury secretaries,
along with the sitting and former chairs of the
Federal Reserve. The welcome dinner, a tradition
that took root in the 1950s, is meant to be a celebra-
tion of Treasury’s nonpartisan prestige. With politi-
cal and ideological division seeping deep into every
alley and corridor in Washington, there’s no guar-
antee that will be the rule at the next gathering.
From US sanctions on Russia to tariffs on
Chinese imports to America’s ballooning debt load,
policies that touch the Treasury Department are
becoming fraught with politics. All of these pose
risks to the national asset the agency is supposed
to protect at all costs: the dollar. “The unchecked
rise in government debt, the dysfunctionality of
Edited by
policymaking in Washington and the weapon-
Cristina LIndblad ization of the dollar through the aggressive use
March 25, 2024
of financial sanctions have all contributed to the
perception that the US dollar’s dominance should
be under threat,” says Eswar Prasad, a Cornell
University professor and senior fellow at the
Brookings Institution.
It’s too early to tell whether the dollar’s status
as the world’s dominant currency is in imminent
ileged position at the center of the global financial
system is increasingly being challenged by friends
and foes alike. Strategic rivals like China and Russia
have made no secret of their desire to see their cur-
rencies supplant the greenback in some interna-
tional transactions. The de-dollarization trend is
also getting help from a few nations Washington
counts as allies that want to take out insurance
against the possibility that they too will one day
find themselves the target of US sanctions.
Since 2001, which marked the start of an era in
which US governments sharply expanded the use
of economic sanctions, the greenback’s share of
global foreign exchange reserves held by central
banks has dropped from 73% to 59%. Gulf nations
are starting to settle oil trades in the Chinese
yuan, and other commodity producers are con-
sidering similar shifts.
“The thing about the US over the next decade
or so is how skillfully we navigate this big change in
relative power,” says Timothy Geithner, who was
Treasury chief during the Obama years. Treasury’s
“authority comes from the quality of the people, the
decisions they make, its reputation for integrity and
the perception that it takes a longer-term view of US
interests, slightly beyond politics,” he said.
Mark Sobel, a retired 40-year veteran of the
Treasury Department, is more pessimistic. Citing
increasingly populist policies of both Republicans
and Democrats and how they’ve eroded America’s
standing as a leader on international economic
ILLUSTRATION BY BEN DENZER
issues, Sobel says the “odds seem stacked against
the US exercising robust international economic
leadership” at all.
The presidential election is kicking off with eco-
nomic policy untethered from the assumptions of
29
 ◼ ECONOMICS
the last generation. For decades the US preferred
its currency superpower-strong. Treasury Secretary
Robert Rubin, who served in the Clinton adminis-
tration, sought calm in currency markets, which
had faced more than a decade of gyrations from
government interventions, by declaring a strong
greenback was good for America. His argument, in
a nutshell, was that the benefits—including an influx
of foreign investment that lowered domestic bor-
rowing costs and a boost to the purchasing power
of households and businesses—outweighed the hit
to exports. Over subsequent decades, Treasury
secretaries from both Republican and Democratic
administrations stuck with Rubin’s mantra.
The strong dollar helped the US economy
prosper in the 1990s. Growth averaged 3.8% in
inflation-adjusted terms under Bill Clinton, com-
pared with 2.8% under his predecessors Ronald
Reagan and George Bush. But the strong green-
back also had insidious side effects. Coupled with
the rise of China, it contributed to the hollowing
out of the US manufacturing sector. The Rust Belt
states saw factories shutter and company towns col-
lapse as employers decamped to lower-cost locales.
Donald Trump tapped into the economic pain of
30 this overlooked part of the nation. Under his Make
America Great Again banner, he turned economic
policy inward, unleashing volley after volley of tar-
iffs, renegotiating trade pacts and lashing out via
Twitter at American businesses that defied his call
to bring jobs back to the US.
The country suddenly had a president and
Treasury secretary, Steven Mnuchin, willing to
talk down the dollar. Trump repeatedly badgered
Federal Reserve Chair Jerome Powell to cut interest
rates to spur growth but also to weaken the green-
back. And at one point he floated the idea of hav-
ing the Treasury intervene in currency markets to
force its value down.
President Joe Biden kept Trump’s tariffs in
place, while swapping phrases like “America
First” for words like “friendshoring” and “Buy
America.” Still, Biden stayed out of the way of the
Federal Reserve when it hiked interest rates almost
a dozen times to tame inflation, helping the green-
back appreciate some 15% against other major cur-
rencies over his presidency so far.
Whether it’s Trump or Biden who wins a sec-
ond term, the next set of US Treasury officials will
be stewards of the dollar at a time when pressure
to move away from the greenback is building from
Beijing to Brasilia. Trump would “accelerate the
erosion of the institutional framework that under-
pins foreign investors’ trust in US financial markets
that bolsters the dollar’s dominance,” according to
Bloomberg Businessweek March 25, 2024
Prasad, by bringing back instability in economic
policymaking, while Biden’s “supercharged weap-
onization”—namely through sanctions on Russia—
is pushing even allies away from the dollar, he says.
Then again, prophecies of the dollar’s demise
have been made for decades. In the 1990s it was the “The role of the
Japanese yen that posed a threat, then came a new United States
currency, the euro. Investors and allies wondered if in the world
dollar-dependence was worth the trouble in 2008, economy
after an American-made housing crisis shook global is changing”
markets, and again when Trump started a trade
war with China in 2018.
One of the most shocking episodes came in the
summer of 2019, when then-President Trump, frus-
trated by a strong dollar exchange rate and China’s
manipulation of its own currency, started talking
about actively weakening the dollar. To do that, he
would have needed the Treasury Department and
the Federal Reserve to work together to sell dollars
in open markets.
To say such a move would be devastating to
America’s global superpower status would be an
understatement. The greenback is on one side of
90% of currency transactions worldwide, and two-
thirds of international debt is denominated in dol-
lars. Global commodity markets, such as that for
oil, are ruled by the dollar. All of that rendered
pretty much the whole world beholden to swings
in the currency’s price and management—and now
Trump wanted to interfere.
Mnuchin delicately talked Trump out of
tampering with the dollar, and talk of intervention
went no further than the Oval Office that summer.
Nevertheless, the episode was another fracture in
an armor that is starting to look more fragile.
Questions around the dollar’s continuing
reign emerged once again in the wake of Russia’s
February 2022 invasion of Ukraine. As punishment,
Yellen triggered what was considered “the nuclear
option” by working together with European coun-
terparts to freeze some $640 billion in Russia’s cen-
tral bank assets abroad. The move marked an
historic point in America’s weaponization of the
dollar. Government officials the world over started
openly making plans to curb their country’s depen-
dence on the buck.
Regardless of who becomes the next signatory ▲ Adapted from Paper
Soldiers: How the
of the almighty buck, the role of the US and the Weaponization of the
dollar is shifting. That was a point that Federal Dollar Changed the
World Order, published
Reserve Governor Christopher Waller drove home by Penguin Random
in a speech in February focused on the “dollar’s House. Copyright © by
Saleha Mohsin
primacy.” While it’s rare for a senior Fed official
to publicly discuss the dollar, Waller said, “The
role of the United States in the world economy is
changing, finance is always changing, and I think it
 ◼ ECONOMICS Bloomberg Businessweek March 25, 2024

is important for policymakers to regularly consider
if and why the dollar’s role might change as well.”
The answer to how to navigate a new era of both
friends and foes rethinking dollar dependence, and
the US’s fiscal position requiring an ever stron-
ger position in the world for the dollar, may just
come from the next guest-of-honor at the Treasury-
secretary alumni welcome dinner.
reports were released—that March would probably
be too soon for the central bank’s rate-setting
Federal Open Market Committee to begin easing.
“One thing that has surprised me is that there
has been a large group on the FOMC that appeared
to just be a little bit more nervous about inflation
coming down that last mile than I am,” says David
Mericle, the chief US economist at Goldman Sachs

Saleha Mohsin is the senior Washington correspon-

dent at Bloomberg News and host of The Big Take
DC podcast. She covered the US Treasury from 2016
to 2022 and continues to report on policy, politics
and power.

The Fed Is Making

The Last Mile Harder
● By holding off on rate cuts, it risks causing
unnecessary harm to the economy
31

Most people who keep tabs on the Federal Reserve

would say it waited too long to raise interest rates
when inflation took off in 2021. Now the US central
bank is arguably falling behind the curve again as
inflation moderates and policymakers stall on bring-
ing rates back down. The risk in waiting is that high
rates may finally start to inflict harm on an economy
that’s so far managed to defy widespread expecta-
tions for a significant slowdown.
The Fed is in the long-awaited last mile of its cam-
paign against the bout of pandemic-induced inflation
that saw policymakers’ preferred gauge accelerate
from 1.8% in February 2021 to a four-decade high
of 5.6% in February 2022. Bloomberg Economics Group Inc. (In December, Mericle was among those
estimates data out later this month will show it had who anticipated rate cuts commencing in March, but
returned to 2.8% as of February 2024. That would he’s since pushed out his projection to June.)
put it more than three-quarters of the way back to Perhaps the easiest way to illustrate the Fed’s
the central bank’s 2% target from the peak two years foot-dragging on rate cuts—and its delayed rate
ago. Yet at their meeting on March 19-20, Fed officials hikes, for that matter—is with the Taylor rule, a stan-
unanimously elected to hold the benchmark federal dard textbook equation that calculates an appropri-
funds rate in a range of 5.25 to 5.5%, where it’s been ate interest rate based on where the inflation and
since last summer. unemployment rates are.
Why the delay? One reason is that monthly infla- The rule prescribed rate hikes in early 2021, when
ILLUSTRATION BY PAUL WORLD

tion reports for January and February showed a
slower pace of moderation than in the previous six
months. But the latest data don’t entirely explain the
reluctance to cut. After all, Fed Chair Jerome Powell
made it clear at the end of January—before those
inflation began accelerating, but the Fed waited a
full year to begin tightening. It finally caught up to
the rule’s suggested rate level with its last hike, in
July 2023. Since then the rule has indicated the rate
should move down to 4%—because price pressures
 ◼ ECONOMICS
have eased and the job market has softened—but
the central bank has yet to budge.
In 2021, Fed officials had undertaken an historic
shift in the way they defined their employment goal:
It would be conceptualized as “broad-based and
inclusive.” The announcement happened to come
three months after the police killing of George Floyd.
In practice this meant that policymakers would be
putting a bit more weight on employment and a bit
less on inflation when making interest-rate deci-
sions in a bid to draw more people who’ve histori-
cally been near the bottom of the job ladder into the
labor market. The shift made sense at the time, espe-
cially as the burst of inflation was likely to be “tran-
sitory,” as they deemed it then.
Three years later, the backdrop is different. The
central bank’s obvious emphasis has been on con-
trolling inflation, even at the expense of employ-
ment. Although the jobless rate is still relatively low
despite all the rate hikes—that’s been, if anything, a
pleasant surprise—Fed officials for a while in 2022
and 2023 were projecting a significant rise in unem-
ployment as a result of their actions.
“We know that the Fed’s weight is heavily tilted
toward its inflation mandate versus full employ-
32 ment,” Ryan Sweet, the chief US economist at Oxford
Economics, wrote in a March 15 report examining
the Taylor rule’s prescriptions. But he found even
tweaking the equation to ignore employment and
instead emphasize only inflation still puts policy-
makers behind the curve now when it comes to rate
cuts. “Taylor rules have their limitations, and the
Fed uses discretion in setting monetary policy, but
the Fed is risking waiting too long to cut to ensure
that it has limited inflation,” Sweet wrote.
There is another possibility, which is that the cen-
tral bank could revise up its estimate of the “neutral
rate.” That would cause the rule to prescribe higher
interest rates for the same level of inflation and
unemployment. Some analysts including Mericle
expect that to happen at some point given the econ-
omy’s resilience to higher rates over the past year,
though so far Fed officials have taken an agnostic
approach to the question: They’ve left their estimate
of neutral more or less unchanged since 2019.
Powell and the FOMC are aware of the fine line
they’re walking. They’ve said they want to get
going with rate cuts well before inflation returns
to 2%, because if they don’t, they’ll probably have
waited too long. The economy is looking robust at
the moment, but questions remain about whether
the pain from higher rates has merely been delayed
rather than avoided. There are worrying signs
in places such as the commercial real estate and
consumer debt markets that may or may not be
Bloomberg Businessweek March 25, 2024
Waiting for the Rate Pivot
US core personal consumption expenditures US interest rate
index, year-over-year change
Taylor rule
Effective federal funds rate
5% 8%
3 4
1 0
7/2019 2/2024 7/2019 3/2024
ESTIMATE AS OF 3/18
DATA: BUREAU OF ECONOMIC ANALYSIS DATA COMPILED BY BLOOMBERG, BLOOMBERG ECONOMICS ESTIMATE, FEDERAL RESERVE
DATA COMPILED BY BLOOMBERG, BLOOMBERG. FEDERAL FUNDS RATE IS A MIDPOINT OF THE TARGET RANGE
harbingers of problems that could eventually spill
into the wider economy. “The risks are really two-
sided here,” Powell said on March 20. “If we ease
too much or too soon, we could see inflation come
back. And if we ease too late, we could see unneces-
sary harm to employment.”
Before the February inflation reports, it was look-
ing as if policymakers might be running out of time:
Some forecasters had thought inflation could return
to 2% as soon as May or June. But the latest data
have given them some more breathing room. At
this point, inflation should “fall to 2.5% or below by
June,” meeting Powell’s “well before” criterion for
rate cuts, says Anna Wong, the chief US economist
at Bloomberg Economics.
February’s uptick in the unemployment rate, to
3.9%, also helps undercut the rationale for keeping
interest rates elevated, given that Fed officials view
4.1% as an appropriate level for it in the long run.
Mericle at Goldman Sachs is optimistic about
the economic outlook, predicting another year of
above-average growth in 2024. Even so, he says, the
odds of more easing than currently envisioned are
a bit higher than the odds of less easing given “a
variety of circumstances that could potentially lead
them to cut faster,” such as a financial shock or a
growth scare.
“We think that inflation will step back down to
something like the softer trend we were running at
before January, and if that’s right, then I think there
will still be a sense of ‘Why is the funds rate at a level
that we only went to because inflation was a few per-
centage points higher, now that it’s come down?’ ”
Mericle says. �Matthew Boesler
THE BOTTOM LINE According to a textbook model for setting
interest rates known as the Taylor rule, the Fed should have started
easing monetary policy several months ago.
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Igniting Innovation
and Impact
For 50 years, the MBA program at Loyola Marymount University has developed
business leaders who are a force for good in one of the world’s most vibrant
economies, Los Angeles. With a growing portfolio of top-ranked graduate
business programs, including a new Doctor of Business Administration, LMU is
preparing a new generation of ethical leaders for a rapidly changing world.

mba.lmu.edu
 Bloomberg Businessweek
Low Marks in Diversity
Over the past four years, dedicated efforts to enroll more
underrepresented students have yet to pay off
In the months after Minneapolis police officers
killed George Floyd in May 2020, prompting mil-
lions of protesters to march in US cities for racial
justice, the nation’s best-regarded business schools
quickly responded. Most of them publicly commit-
ted to racial equity and inclusion, and many began
formulating changes meant to bring more under-
represented minorities to campus.
Three years later, most of those schools enrolled
a lower, or at best the same, share of underrep-
resented minority students in their full-time
MBA programs, according to data from 21 of the
top 26 schools (the Top 25, plus a tie) in Bloomberg
Businessweek’s 2023 ranking. Only six reported
slightly higher shares of these students matriculat-
ing in 2023 than in 2020, and a somewhat different
group of just six schools enrolled greater numbers
of these students.
Business schools at the Universities of
Michigan, Virginia and California at Berkeley
saw some of the sharpest declines in the share of
minority enrollment, posting the lowest percent-
ages of underrepresented students in the class
of 2025. At Virginia and Berkeley the figure was
6%; at Michigan it was 7%.
ILLUSTRATION BY ARD SU
The Supreme Court’s ruling last summer ban-
ning affirmative action in university admissions
decisions is undoubtedly making it harder to
enroll underrepresented students, who comprise
March 25, 2024
B
S
C
H
O
US citizens and permanent residents who identify
O 35
L
as Black, Hispanic, Native American or Pacific
Islander, including Hawaiian. Asian Americans,
while in the minority, aren’t considered under-
represented, according to standards set by the
S
Graduate Management Admission Council. Among
the 21 schools that have provided or published
enrollment figures for underrepresented minority
groups by race and Hispanic origin since 2020,
Black enrollment fell at 16, Hispanic enrollment at
14. Few schools enrolled any American Indigenous
or Pacific Indigenous students.
Program and admissions officers at five schools
say this enrollment decline at top-ranked universi-
ties should be no surprise—most of these schools
have lately enrolled far smaller shares and numbers
of US students. Even though underrepresented
groups by definition have room to grow relative to
the broader population, the officials say minority
students’ interest in their MBA programs tends to
rise and fall with the whole.
Individual students “are going to look at some
things that are idiosyncratic to them” when con-
sidering an MBA, says Russ Morgan, who leads full-
time programs at Duke University’s Fuqua School
of Business, “but there are some correlations with
the larger market”—mainly, a strong job market that
promises higher salaries and advancement without Edited by
having to earn a degree. Dimitra Kessenides
 ◼ B-SCHOOLS
The shares of Black and Hispanic students of
all US citizens taking the Graduate Management
Admission Test basically held steady from 2019
to 2023 (shifting from just below to just above
17%), even as the total number of US test-takers
fell, according to the GMAC, which administers the
exam. The share of Asian Americans taking the test
grew from 15% to 21% over that period, while the
White share declined.
Following GMAC’s standards, most schools pub-
licly measure minority enrollment against US citi-
zens and permanent residents, which presents a
mixed picture. At 13 of the 21 schools, the share of
underrepresented minorities among US students
grew—and by more than 20% at seven of them. At
Fuqua, the share of entering US students identify-
ing as Black or Hispanic jumped from 15% in 2019 to
21% in 2020 and reached 26% last fall. Morgan cred-
its this to “our DNA” and an effort at inclusivity for
at least 40 years. Despite the school’s efforts and
recent progress, in 2020, Duke felt compelled to
establish a racial equity working group that, among
other actions, recommended changes to student
and faculty recruiting policies.
Almost every Top 25 US B-school in Businessweek’s
36 ranking has made some commitment to diversity
and inclusion, articulated on dedicated sections on
their websites. Many have developed plans broadly
similar to Fuqua’s. (At Duke, says Morgan, the goal of
the working group was to “codify and create aware-
ness of what we were already doing and try to iden-
tify areas where we could invest more deeply.”)
So far, though, this work isn’t showing up in
enrollment. And two of the schools with the low-
est representation in the fall of 2023, Berkeley and
Michigan, began down this path several years before
most of their peers. Élida Bautista, chief diversity,
equity and inclusion officer at Berkeley Haas, says
the school’s Black and Hispanic enrollment nose-
dived because the George Floyd moment pushed
many companies to promote and retain underrep-
resented employees. According to Michigan Ross’
DEI director, Thomn Bell, 43% of last fall’s enter-
ing class were women, and 43% of the Americans
were minorities—mostly Asian. “While we achieved
a record number of representation in certain areas,
we are always striving for improvements across
many dimensions, including representation of Black
and Hispanic/Latinx students,” he wrote in an email.
“Investing in and being committed to diversity
is not just a year-by-year play,” says Shari Hubert,
Duke’s head of admissions, adding that the com-
petition for underrepresented students is fierce.
“Because this population is small, it is going to
be much more difficult because they’re a highly
Bloomberg Businessweek March 25, 2024
sought-after group of talented individuals,” Hubert
says. “We need to grow the pie.” Indeed, if the
theory of the case for investing in DEI holds true, it
seems plausible that as more schools roll out inclu-
sion programs, individual schools will find it even
harder to recruit underrepresented minorities,
at least while the pie remains small. None of the
school administrators contacted by Businessweek,
including Hubert, would acknowledge this.
At the University of Rochester’s Simon School
of Business—where underrepresented students
dropped from 37 of 126 total students in 2020 to
13 of 96 in 2023—Rebekah Lewin, senior assistant
dean of admissions and programs, said by email
that the growth in diversity initiatives “doesn’t
seem to be the primary driver for demand to pur-
sue a full-time MBA program relative to economic
and employment trends.” Lewin added that when
students who identify as multiracial are counted, a
category the school didn’t use until 2023, the num-
ber of underrepresented students rises to 18.
Among the first changes many schools made Diversity
as part of their equity initiatives, beginning in the initiatives
fall of 2020, enrollment figures were published aren’t “the
broken down by race and Hispanic ethnicity in primary driver
class profiles or annual reports. “That was some- for demand
where where we saw an opportunity for improve- to pursue a
ment, just being more transparent,” says Duke’s full-time MBA
Morgan. All of the top 15 schools in our ranking— program
except for Cornell University’s SC Johnson College relative to
of Business—now publish class figures, as do the economic and
B-schools at Rice University, Rochester and UCLA. employment
Several declined to provide Businessweek with fig- trends”
ures predating the new transparency policies.
While school-published enrollment figures
track changes over time at any given institution,
they’re often not useful for closely comparing
schools. For one thing, schools often publish the
figures as a share of US citizens and permanent
residents—though sometimes they’re presented
ambiguously—but don’t disclose the denominator,
making a conversion to shares of the total class
impossible. (This reporting includes only schools
where Businessweek can determine shares of the
total class.)
Moreover, schools use different methods to
calculate the minority numbers, and they don’t
always explain them. Some schools publish the
figures they report to the federal government, in
which each student is counted once, and labeled
multiracial when they choose more than one
racial background. This can appear to under-
count specific racial groups (some schools count
multiracial students as underrepresented). Others
use a multidimensional approach developed by
◼ B-SCHOOLS Bloomberg Businessweek March 25, 2024

B-schools report student demographics to the federal government,

Diversity Means labeling non-Hispanics who choose more than one background as
multiracial—which can undercount racial groups. Increasingly, they’re
Different Things also using a different method to publicize class demographics,
sorting students into all groups with which they identify, potentially
To Different Schools overcounting them. Businessweek relied on the federal standards to
try to avoid overcounting minorities.

Share of student population entering MBA programs among the 2023 Bloomberg Businessweek Best US Business Schools Top 25
◼ Black only, not Hispanic ◼ Hispanic, any race ◼ Native American/Hawaiian/Pacific Islander, not Hispanic
◼ US students, not underrepresented minority ◼ International students

B-schools
#1

#2

#3

#3

#5

#6

#7

#8
ranking

50%

Pennsylvania (Wharton)
Northwestern (Kellogg)
Dartmouth (Tuck)

Virginia (Darden)
Chicago (Booth)

25%
Columbia
Stanford

Harvard
2020

2023

37
#10

#10

#12

#13

#14

#15

#16

#17
#9

UC at Berkeley (Haas)

Cornell (Johnson)

Emory (Goizueta)
Michigan (Ross)

USC (Marshall)
Duke (Fuqua)
NYU (Stern)
MIT (Sloan)

Yale

These schools declined to provide or confirm

figures calculated under the federal guidelines
#18

#19

#20

#21

#22

#23

#24

#25

#25
Texas at Austin (McCombs)

Georgetown (McDonough)
Georgia Tech (Scheller)

Washington (Foster)

Rochester (Simon)

Vanderbilt (Owen)
UCLA (Anderson)
Carnegie Mellon

Rice (Jones)
 ◼ B-SCHOOLS
GMAC that counts students in all racial groups
with which they identify, potentially overcount-
ing them. Some schools present both. For this
reporting, Businessweek relied on figures calcu-
lated using the federal standards and excluding,
when possible, multiracial students.
For all these efforts, the key to increasing rep-
resentation of Black, Hispanic and Indigenous peo-
ple may lie beyond the reach of academia. At Duke,
Hubert and Morgan say one persistent structural
barrier between minority groups—and women—
and business school is the pay gap separating White
men from everyone else, which makes the cost of
enrolling harder to justify. “Creating more equity
in the professional world for both women and
underrepresented individuals is a start,” Hubert
says. “People need to see that the MBA is a path for
future success for them,” adds Morgan. “They have
to see they would be valued in the employment
market similar to people in current positions.”
The calculation surely takes on even greater
weight at schools such as Duke, where the total
cost of attendance exceeds $200,000. Many
schools are trying to address this over the long
term by training future managers with revamped
38 curricula that include offerings like Berkeley’s
required course on “Business Communication in
Diverse Work Environments.”
A bigger challenge remains a persistent edu-
cation gap. “When you come to graduate school,
an undergraduate degree is a requirement,”
says Shelly Heinrich, an associate dean manag-
ing MBA admissions at Georgetown University’s
McDonough School of Business. According to
a recent GMAC study, only about a quarter of
Hispanic and Black people age 20 to 34 hold a
bachelor’s degree, compared with 34% for non-
Hispanic White and 52% for Asian Americans. “So
we have to start early at building the pipeline,”
Heinrich says.
At selective schools, DEI initiatives may be the
best inoculation against the Supreme Court’s affir-
mative action decision, since it at least signals a
commitment to enroll diverse candidates even if
admissions officers can’t consider race explicitly.
That is, it might keep the applicant pool from shrink-
ing. Georgetown’s Heinrich, for one, holds out hope.
“We are in the industry, all of us, because we see
the value in educating the next generation of lead-
ers and we see the value of a diverse workforce,” she
says. “If I felt it was insurmountable, I don’t think I
would be motivated.” �Robb Mandelbaum
THE BOTTOM LINE B-schools have committed to raising student
diversity in recent years, but tuition cost, a Supreme Court ruling and
an education gap are among the factors frustrating their efforts.
Bloomberg Businessweek March 25, 2024
Women Are ● These women in top
Closing leadership positions talk
about their career paths
The Dean Gap and offer lessons for others
The gap between women and men in leadership
roles at US business schools has been shrink-
ing, especially as more women are promoted to
positions that are steppingstones to deanships.
In 2023-24 women deans at 368 US business
schools represented 30% of the total, according to
research by the Association to Advance Collegiate
Schools of Business. That’s an increase from 17% in
2007-08. What’s more, the AACSB found, women
now account for 43% of associate business school
deans, a position that often leads to a deanship;
34% currently in that role were once associate
B-school deans.
Women still lag men considerably when it comes
to deanships. The vast majority of women who are
deans now have spent most of their careers under-
represented as faculty members and in leader-
ship positions, says Sharon Matusik, dean of the
University of Michigan’s Ross School of Business.
One reason for the scarcity is that women have ● Share of US B-school
associate deans—a key
had more difficulty gaining tenure and full profes- step for deanship—held
sorships at B-schools, which are often prerequisites by women
for the top job, Matusik says. Women make up 40.3%
of tenure-track faculty at business schools globally, 43%
“but that’s where the progression stalls,” according
to a 2022-23 AACSB survey. Only 25.7% are full pro-
fessors, the survey found.
We asked three women deans to describe their
paths and share what experiences they think can
help others advance to the top. They’ve run pro-
grams at large and smaller schools and in locations
throughout the US. Their remarks have been edited
for clarity and length.
● WEN MAO
Villanova School of Business
Before being named dean in 2023, I was vice dean
overseeing all our internal programs. And prior to
that, I served as associate dean of faculty, so I have
an in-depth knowledge of how the school runs.
Now my focus has shifted more to telling our story
to alumni, business partners and others.
The best way to encourage women to be leaders
is to give them examples of success. Four of the five
associate and assistant deans here are women, and
I’m not the first female dean—I’m the second. Our
students see women leadership in all forms.
The smartest
investment is the
one you make in
yourself.
Our top-rated, AACSB-accredited graduate
programs go beyond business as usual. With
on-ground and online options, pursue an MBA
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 ◼ B-SCHOOLS
My mentors convinced me that you don’t need
a certain personality to lead. You can be shy or
assertive. When I first stepped on this campus,
as an assistant economics professor after coming
to the US from China and then getting a Ph.D. at
Virginia Polytechnic Institute and State University, I
● Mao
felt at home. There was a sense of community and
belonging to something that’s greater than me. Being
a dean wasn’t my original plan, but having a com-
munity that has been and is excited for me to do
well pulls you in.
● SHARON MATUSIK
40
University of Michigan’s Ross School of Business
It’s important that women faculty make it to full
professor, because that opens up other leader-
ship opportunities. Getting tenure is superhard;
you have to stay very focused. It’s not uncommon
for women to take their foot off the gas, especially
because they’re often having and raising children
at the same time as they’re trying to advance their
careers. Women need support at home as well as
in the office. I have two daughters, and I have a
superengaged husband. His involvement raising our
children helped me to become a full professor and
dean at Leeds School of Business [at the University
of Colorado].
Another thing that’s been helpful: My field is
strategy and entrepreneurship, which involves
understanding how all the pieces in an organiza-
tion operate and work together. I was in leader-
ship roles at Leeds [as academic director at the
Deming Center for Entrepreneurship and senior
● Matusik
Bloomberg Businessweek March 25, 2024
associate dean for faculty and research] before To read interviews with
two more women deans,
becoming dean there. At the center we were try- visit bloomberg.com/
ing to build a bridge between internal and exter- businessweek
nal constituents, between what students want and
what industry wants. Now, as a dean, so much of
my role is acting as a bridge between the school
and external stakeholders.
My daughters are close in age to our students,
and that’s helped me see things from the lens of
students when attracting and onboarding them at
Ross. It makes for a more nuanced understanding.
● LISA ORDÓÑEZ
University of California at San Diego’s Rady
School of Management
Women not only need to do everything well to
get tenure and promotions, they need to be able
to speak up for themselves and take credit when
they’ve earned it and say they’re thinking of lead-
ership positions. It’s also helpful to have a group of
people or someone who champions you to others,
● Ordóñez
WEN: PHOTOGRAPH BY LILA BART FOR BLOOMBERG BUSINESSWEEK. MATUSIK: PHOTOGRAPH BY VALAURIAN WALLER FOR BLOOMBERG
who will say, “Put her on that committee.” In my
own case [at Eller College of Management at the
University of Arizona for 25 years], I had my view
on all aspects of the school. I didn’t know anything
BUSINESSWEEK. ORDONEZ: PHOTOGRAPH BY ARLENE MEJORADO FOR BLOOMBERG BUSINESSWEEK
about executive education until I started teaching
it. And I didn’t know about budgets, but that was
part of being the vice dean there. By doing differ-
ent things, I got to see what was going on in a lot of
different areas.
At Rady, which is a young and small school, I’m
trying to create an environment where everyone
can be heard and be themselves. I think we need
leaders who are OK knowing they aren’t always the
smartest person in the room. I’m surrounded by
brilliant researchers and staff, and I have to be will-
ing and able to listen. I’ve had feedback that isn’t
so pleasant sometimes, and I have to be able to
examine myself. �Carol Hymowitz
THE BOTTOM LINE US B-schools have seen a major rise in the
representation of women deans over the past 15 years. They now
constitute 30% of the top leadership roles at these institutions.
 Unlock Your Potential

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 Bloomberg Businessweek

A N E M P I

42

General Electric was in dire straits. The only way to save America’s quintessential conglome
 March 25, 2024

R E D I VI D ED

43

rate was to break it up. By Brooke Sutherland & Ryan Beene Illustration by Antoine Maillard
 Bloomberg Businessweek March 25, 2024

manufacturing, an influential operations

BI G philosophy developed by Toyota Motor

Corp. that Culp has championed at GE.
Factory floor visits aren’t a radical

S HEE T S idea for an industrial company, but GE

didn’t always do them this way. The
company used to place more emphasis

OF on polishing a PowerPoint presentation

than on drilling into the details of manu-
facturing workflows, says Russell Stokes,
the head of commercial jet engines and
services, who’s been at GE for more
than 25 years. Somewhere between the
wrong-way financial bets that blew up
white paper line the perimeter of a meeting room at the General Electric in the 2008 economic crisis and a huge,
Co. factory in Beavercreek, Ohio. Each sheet is scribbled on with markers and cov- disastrous acquisition of energy assets
ered with neon Post-it notes outlining the steps needed to produce the tubes and from Alstom SA in 2015, GE, with its per-
ducts that will eventually be assembled into a jet engine. sistent mindset that anyone with an MBA
The vibe is more elementary school science fair than American industrial icon. could run any business, forgot that it’s a
But the simplicity is the point. Determining the layout for the Beavercreek facil- manufacturer at heart.
ity was tricky: The revamped plant opened last year, combining components of When Culp became CEO in 2018,
production that had previously been spread out across eight different sites. To fig- GE was far too big and complicated
ure out the best setup, plant leaders built a replica of furnaces, tube benders and for its own good, and the company’s
welding booths out of cardboard boxes. That visual, along with the Post-it notes businesses weren’t bringing in enough
describing production steps such as “brazing,” “bending” and “trimming,” makes money to support its sky-high debts.
44 it easier to identify and root out manufacturing inefficiencies. The exercise also “We were at risk of not making pay-
helps show visiting GE executives how the whole thing works. roll, in a manner of speaking,” he
About 250 managers from around the world have gathered here in the Cincinnati says. He managed to pay down more
area, which will be the headquarters of GE Aerospace once the conglomerate com- than $100 billion of the debt through
pletes its slow-moving breakup in early April. One stated goal of the executive a series of well-timed divestitures.
retreat is to set a culture for the soon-to-be-standalone company. “Culture can’t He dismantled GE Capital, its invest-
be declared,” says Farah Borges, who oversees GE Aerospace’s assembly, test and ment arm, largely untangling the com-
maintenance operations. “You have to build it.” Some declaring is still apparently pany from a financial albatross. And
necessary, because the team spent the previous day at an event space a few miles then, in 2021, he announced that GE—
away doing just that. the quintessential American conglom-
But under Chief Executive Officer Larry Culp, no leadership confab is com- erate, which at one point or another
plete without a gemba walk. Gemba in Japanese means “actual place,” as in the sold washing machines, credit cards,
actual place where a product is made. It’s essentially a tour of operations with plastic resins and TV advertising slots
a heavy emphasis on Q&A with the factory staff. The practice is central to lean for NBC’s Super Bowl broadcasts—was

GENERAL 1879 1882 1892 1919 1925

ELECTRIC
THROUGH
THE YEARS

The historic American

company amassed a
sprawling portfolio that
at one time or another
included locomotives,
washing machines, General Electric Co. The GE turbo-
insurance, lightbulbs, is founded through supercharger, a
MRI machines, credit Edison’s company the merger of Edison precursor technology GE introduces the first
cards, real estate Thomas Edison invents constructs the first General Electric Co. to the modern jet hermetically sealed
and the television the first practical central power station and Thomson-Houston engine, makes its electric refrigerator for
network NBC. incandescent lightbulb in New York City Electric Co. first flight the home
 Bloomberg Businessweek March 25, 2024

breaking up. None of those efforts its own standalone company called GE for a time it even owned a large chunk
would’ve been as successful, and per- Vernova on April 2. of Dreyer’s Grand Ice Cream. Most of
CULP: COURTESY GE. FROM LEFT: DIVISION OF WORK & INDUSTRY/NATIONAL MUSEUM OF AMERICAN HISTORY/SMITHSONIAN INSTITUTION (2); WORTHPOINT; THOMAS EDISON NATIONAL HISTORICAL PARK; MUSEUM OF

haps wouldn’t have even been possi-
ble, if Culp hadn’t tightened up GE’s
operations and turned key businesses
into stable, cash-generating entities
that could stand on their own.
Today, GE’s stock is near a seven-year
high. GE HealthCare Technologies Inc.,
which split off in 2023, is up about
50% from its debut. The final piece is
the electric-grid, gas-power and wind-
turbine business, which will become
INNOVATION AND SCIENCE (4); SAFRAN HERITAGE CENTER; MUSEUM OF INNOVATION AND SCIENCE; NEAL BOENZI /THE NEW YORK TIMES/REDUX
In one sense, Culp is restoring GE
to its original identity as a maker of
stuff. But he’s also the guy disman-
tling a monument to American capi-
talism. From its inception as an outlet
for Thomas Edison to commercialize
the lightbulb through the era of rapid
globalization embodied by Jack Welch,
GE practically swallowed entire indus-
tries. It loaned planes to companies
and money to real estate developers;
that is gone now. Culp divested the air-
craft leasing arm, biopharmaceutical
assets and the remnants of GE’s oil and
gas operations and saw through sales of
its locomotive and lightbulb units. Even
the GE name is on loan. GE appliances
are made and sold by China’s Haier
Smart Home Co. The new GE will just
be a manufacturer of jet engines, essen-
tially, with a few random money pits
left over from the old conglomerate,
like insurance for elder

care and a Polish mort-

gage business. “We con-
stantly debated what the
right structure was,” says
Ed Garden, a GE board
member since 2017. “But
the first order of business
was fixing the underlying
businesses.”
On the gemba walk,
Culp and his aerospace
deputies stop to meet 45
with the plant’s lean man-
ufacturing leader, Cem
Salahifar, who launches
into an overview of the
factory’s operations. He
describes the facility’s
transition from a single,
giant furnace—known in
manufacturing parlance
as a monument—to a

Culp at the Beavercreek

factory in February

1930 1942 1974 1981 1986 1998

GE is the
first US
company
to surpass
The company produces GE finalizes a joint
a market
the GE I-A, America’s venture with France’s value of
GE develops first jet engine, to power Safran SA to build
moldable plastic the Bell XP-59 jet engines Jack Welch named CEO GE buys NBC $300 billion
 Bloomberg Businessweek
bunch of smaller ones spread out
around the factory floor. This elimi-
nates the need for employees to shut-
tle components back and forth and
stand around waiting for the heating
process to complete. Turnaround times
for this part of the production process
dropped to 30 minutes from four hours.
Culp interjects: The team should appre-
ciate how meaningful this change was,
he says, for improving efficiency. He
then asks them to find ways to rethink
the monuments in their own factories.
“We like to tear down monuments,”
Culp says.
To be CEO of GE is to be compared
with the late Jack Welch. For most of
his two-decade reign, Welch made the
company bigger, more valuable and
more profitable. But the sun began to
set on the age of the conglomerate by
the time he retired in 2001, and soon
other industrial giants were breaking
up. Post-Welch CEOs at GE found them-
46 selves trying to explain why it made
sense to be big for the sake of being big.
Jeff Immelt, Welch’s handpicked succes-
sor, talked up the benefits of the “GE
Store,” a shared repository of technolog-
ical tools that the whole company could
pull off the shelf. In reality, there was no
good reason why one company needed
to sell MRI machines, jet engines and
wind turbines. Even worse, GE’s volu-
minous sprawl left too many places for
problems to hide.
One of the biggest problems was GE
Capital, which helped fuel stock growth
2000 2001
GE’s market
value
reaches an GE and Honeywell
all-time high abandon a planned
merger after antitrust
of about authorities in the
European Union block
$600 billion the deal
CULP’S
MESSAGE:
“EVERYBODY
AROUND THE
BOARDROOM,
DON’T PANIC”
during the Welch years but proved to
be a time bomb. GE had loaded up on
debt to support its ventures in corpo-
rate lending, real estate, credit cards,
mortgages and insurance. When the
economic crisis arrived in 2008, GE
Capital had more than $500 billion in
assets and almost as much debt, which
made it the largest financial company in
the US that wasn’t technically a bank.
As customers worldwide defaulted on
loan payments and investors lost their
appetite for risk, GE turned to Warren
Buffett and the federal government for
financial support. Immelt cut GE’s div-
idend for the first time since the Great
Depression. He later sold off huge
chunks of GE Capital, but it continued
to haunt his successor, John Flannery,
2001 2002
Jack Welch retires;
Jeffrey Immelt
GE buys Enron’s wind-
turbine manufacturing
named CEO business
March 25, 2024
who in 2018 disclosed a $15 billion hole
in a long-term-care insurance business
Immelt had been unable to fully get rid
of. The timing couldn’t have been worse:
Flannery had cut the dividend two
months earlier, to some shareholders’
dismay, and with the gas-power business
in a slump and fewer GE Capital assets,
there just wasn’t enough money from
its operations to keep handing out such
generous payments to investors.
GE’s stock was in free fall in 2018,
and Flannery overhauled the board.
One of the new directors was Culp. A
graduate of and former senior lecturer
at Harvard Business School, he’d previ-
ously been the CEO of Danaher Corp., a
onetime industrial conglomerate in its
own right that’s idolized by investors
2007 2013
GE Capital deemed
“too big
to fail”
by US government;
GE sells its plastics
GE sells remaining
NBCUniversal stake
division for $11.6 billion to Comcast
 Bloomberg Businessweek
for its operational rigor. (Danaher
PHOTO; WANG JUN/ROPI/ZUMA PRESS; STEPHANE DE SAKUTIN/AFP/GETTY IMAGES; ILYA S. SAVENOK/GETTY IMAGES; MUSEUM OF INNOVATION AND SCIENCE; CHRISTOPHER PIKE/BLOOMBERG; NELSON CHING/BLOOMBERG
FROM LEFT: FRED VICTORIN/TAMPA BAY TIMES/ZUMA PRESS; NICOLE BENGIVENO/THE NEW YORK TIMES/REDUX; GREG DEVEREAUX/MARSHALL INDEPENDENT/AP PHOTO; PIERRE GLEIZES/REA/REDUX; ADAM LERNER/AP
eventually broke up, starting in 2016
with the spinoff of the industrial prod-
ucts company Fortive Corp., shortly
after Culp left.)
Flannery announced a plan to
spin off GE’s health-care business in
June 2018, but such a wholesale breakup
quickly became untenable. The com-
pany couldn’t afford it: The remaining
operations wouldn’t have generated
enough cash to allow GE to pay off its
mountain of debt. “We could not spin
health care without putting everything
fundamentally at risk,” Culp says.
GE’s directors asked Culp if he
wanted to run the company. He turned
them down—twice, he says—but an
August 2018 visit to GE’s gas-power
operations in Atlanta began to change
his mind. The place was a mess, he
tells Bloomberg Businessweek. “We were
managing the business in a way that was
probably 180 degrees from the way we
ran things at Danaher,” he says. But
Culp saw a path to fix GE’s operations.
His message: “Everybody around the
boardroom, don’t panic.”
GE directors offer a bingo card’s
worth of MBA-speak to describe how
rough the situation was. Tom Horton,
former CEO of American Airlines, says
he and Culp were both “eyes wide
open” when they joined the board
together in 2018: “Once we got under
the hood, the challenges were more
substantial than maybe we anticipated.”
Two months after his visit to Atlanta,
Culp was named CEO. In short order,
2016 2017
The US removes
GE’s “too big to
fail” designation;
GE sells its home Immelt retires as
appliances business CEO; John Flannery
to China’s Haier takes over
he slashed the dividend to $0.01 a share
and killed the plan to spin off health
care. Instead, Culp brokered a deal to
sell GE’s biopharmaceutical unit to his
former employer Danaher. GE received
$21 billion in cash for the business, which
makes equipment and materials used
to manufacture drugs, and offloaded
$400 million in pension obligations to
Danaher. The transaction was com-
pleted in March 2020, about three weeks
after the onset of the Covid-19 pandemic
brought air travel to a halt, creating an
existential challenge for the compa-
ny’s jet engine business. “I don’t know
what would have happened if we hadn’t
closed that deal,” Culp says.
GE directors thought the pandemic
had made Culp’s job harder, and they
wanted to give their CEO another rea-
son to stick with it. In August 2020,
the board altered the terms of Culp’s
compensation package to give him
more time to reach performance tar-
gets for a one-time stock bonus and
make it meaningfully easier for him
to have access to the top payout of
about $230 million. Shareholders rep-
resenting a majority of voting stock
opposed the pay deal, but their vote
was nonbinding, and the board had
already approved the changes any-
way. Culp accessed the top tier of
the equity grant in July 2023, and the
shares will vest next year unless he
retires before then. (GE later curbed
other aspects of Culp’s compensa-
tion.) “We were securing Larry’s lead-
ership for a longer period of time,
2018 2020
GE
announces
a $15 billion
shortfall in
reserves at
its insurance
business,
gets dropped
from the Dow
Jones Industrial
Average and
discloses a GE sells the lightbulb
$22 billion business and
writedown largely completes the sale of
over the Alstom deal. its biopharmaceutical
Flannery is ousted; business to Danaher
Larry Culp named CEO for $21 billion
March 25, 2024
and that’s proven to be certainly in
shareholders’ interest,” Horton says.
There are parallels between Culp
and Welch, a company legend who was
also legendarily well-compensated. The
underlying principles of the lean man-
ufacturing philosophy Culp preaches
aren’t all that different from Welch’s cult
of Six Sigma, another corporate dogma
focused on measuring the rate of oper-
ational defects and eliminating inef-
ficiencies. But the two are otherwise
very different. Welch’s habit of ranking
employees by performance and sum-
marily firing the bottom 10% created a
culture of mistrust. Employees who sur-
vived layoffs started to think they were
the smartest people in the industry, a
mentality that persisted after Welch
retired and GE began to fade.
Culp has been programming a new
mantra into his subordinates, adapted
from his time at Danaher: We’re not
perfect. “You’ll have some home runs,
but you don’t need them every day,”
says Jim Lico, who worked for Culp at 47
Danaher and is now president and CEO
of Fortive. “No one is perfect.” That
kind of talk might’ve gotten a Welch-
era executive fired, but it’s part of Culp’s
belief in continuous improvement that
his team routinely parrots.
This often manifests with seem-
ingly small changes that can make a big
impact on productivity over time. In
one instance, GE reduced the distance
a part must travel around its plant in
Greenville, South Carolina, by about
3 miles, says Scott Strazik, the CEO
2021 2023
GE sells its aircraft
leasing unit to AerCap
at a valuation of more
than $30 billion and GE spins off
announces it will split GE HealthCare
into three companies Technologies Inc.
 Bloomberg Businessweek March 25, 2024

of the soon-to-be-spun-out energy

business GE Vernova. Even something
as small as reorganizing the toolboxes
used by turbine repair technicians can
make a big difference. “There’s a long
way to go,” Strazik says. GE Aerospace is
trying to get its many factories to coor-
dinate more with one another and with
the teams that handle contract reviews
and other back-office tasks. That process
isn’t “perfect,” even if it has improved,
says Kayla Ciotti, materials and planning
leader at GE Aerospace. “Ten years ago,
we had brick walls. Five years ago, we
had screen doors,” she says. “The door
is open now. There’s no door.”
In contrast with the cutthroat culture
at Welch’s GE, Culp’s employees will get
some leeway if they do walk into walls.
“That doesn’t mean that if you screw
something up and you do it repeatedly,
there isn’t responsibility to bear,” Culp
says. “But a problem-solving culture is
far more effective operationally than a
finger-pointing culture.”
48
Brian Carlson remembers his first
gemba walk with Culp. Carlson, who
runs the 1.2-million-square-foot GE fac-
tory in Schenectady, New York, that
makes power plant generators, watched
Culp stop at one production line in 2019
to inspect a reel of copper wire, which
workers fashion into long, braided slabs
bent like hockey sticks at both ends.
Known as stator bars, these parts are
installed inside the guts of enormous
generators, which can weigh more than
400 tons. Culp was checking the manu-
A Leap engine at the Lafayette Engine Facility in Indiana
facturing date on a reel of wire. Dozens
of reels were stacked on shelves and
pallets at the station, burning cash as carefully laid out on rows of folding of lean manufacturing. It’s a method for
long as they sat unused. “Others had vis- tables. Placards hang overhead mark- problem-solving that Culp has pushed
ited Schenectady before, but it wasn’t ing each section of the factory, the larg- throughout the company, in which
into that level of detail,” Carlson says. est of which declares the purpose of executives and hourly workers dedi-
“When Larry Culp shows up and wants this enormous diorama: “Take it to the cate a week to improve a production
to see how long your material’s been sit- model before you take it to the floor.” process, such as the stator bars that
ting on the factory floor, that simple ges- The foam factory is now a hub of caught his attention during his visit in
ture really sets a tone.” Schenectady’s operations. Factory 2019. The goal is to come up with a solu-
After that visit, workers cleared out staff simulate projects first in the room tion by Friday and have the new process
a large room that once housed office before testing them on the factory floor. in motion on Monday.
space near the factory’s entrance and This is part of what’s known inside GE The old way of making stator bars
spent months building a scale model of as a kaizen event. Culp loves a good kai- involved moving parts by crane through
the entire factory from hand-cut pieces zen. The Japanese term means continu- a 26-step process that took about three
of white and green foam, which they ous improvement and is another tenet months to complete. Each bar now
 Bloomberg Businessweek
moves on rollers through an eight-
step process in as little as three weeks.
And now there’s only enough copper
wire on hand to sustain a single shift.
On an unusually warm day in late
February, Carlson motions to an area on
the stator bar line where more improve-
ment is needed. They still use a crane to
hoist bars over an active walkway that
crosses through the assembly line. A fix
is in the works. “See,” he says, “we’re
not perfect yet.”
By early 2021, Culp’s turnaround of
GE was starting to take hold, but the
company was still sitting on too much
debt. A solution arrived that March,
when AerCap Holdings NV agreed to
acquire GE’s aircraft leasing unit. The
deal would allow GE to pay off $30 bil-
lion it had borrowed, reducing its debt
to the point where the company could
realistically think about establishing
three separate businesses—in aerospace,
health care and energy—that investors
would actually want to own.
Culp started mapping out a breakup
plan and gave it a code name: Project
Revere, inspired by a monument to
American patriot Paul Revere near
Culp’s home in Boston. He liked the
history motif. As GE’s board deliber-
ated a split-up, a defining moment came
in a PowerPoint presentation. A slide
illustrated the degree to which investors
“WE DO
NOT INTEND,
LET ME BE CLEAR,
TO BE ALL
CHRISTOPHER PAYNE/ESTO/REDUX
THINGS TO
ALL PEOPLE”
were avoiding the stock simply because
it was a conglomerate. “When you just
looked at the companies that folks who
really wanted to bet on the energy
transition or on commercial aerospace
were invested in, it was not with us,”
Culp says.
In November, a week after the
AerCap deal closed, GE announced
the spinoff plan. “Everyone felt the
weight of that decision,” Culp says at
GE Aerospace’s Learning Center in
Evendale, Ohio, where visitors can tour
a museum of the company’s aerospace
achievements, starting with the first
American jet engine.
A breakup was never the only option,
but it was the best one. Although mod-
ern conglomerates do exist (Alphabet,
Amazon, Microsoft), GE’s ye olde
smokestack model wasn’t working any-
more. Investors were getting burned by
its bigness more often than they were
getting rewarded. The conglomerate
structure is especially limiting when it
comes to spending money, says David
Giroux, a portfolio manager and chief
investment officer of T. Rowe Price
Investment Management. Massive com-
panies tend to make the wrong acquisi-
tions and overpay for them.
One deal Culp didn’t do was to pay
an acquirer to make GE’s insurance
problem go away. “There were checks
back in the dark days that we could have
March 25, 2024
written that would have been akin to
having people tear our eyeballs out,”
Culp says. “But you never want to be
on the other side of that sort of trade.”
Although GE hasn’t done any new busi-
ness in long-term-care insurance in
almost two decades, it’s still paying off
claims it agreed to back for other pro-
viders. It’s now closed the $15 billion
insurance funding shortfall, and inves-
tors treat the appendage as more of a
quirk than the crisis it was in 2018. Culp
says he might get rid of the business
some day. But he’s not in any rush.
After the breakup, GE Aerospace
will have $25 billion of cash to spend
on dividends, share buybacks and
acquisitions—with the first two taking
priority. Culp won’t say what kinds
of deals GE Aerospace might do, only
that he’ll look for complementary and
easily digestible assets. “We do not
intend, let me be clear, to be all things
to all people,” he told investors in
early March.
All of GE’s gemba walks and kai- 49
zens and the intense scrutiny of its
manufacturing operations look espe-
cially prudent after a series of high-
profile quality-control failures among
its peers. RTX Corp. is recalling thou-
sands of jet engines because of a man-
ufacturing glitch; Siemens Energy AG
sought help from the German govern-
ment after defects in its wind turbines
resulted in massive losses; and Boeing
Co. can’t even deliver its 737 Max with
all the bolts properly installed.
When there are three GEs, Culp hopes
the old name still means something to
investors. He says that’s one reason he
took the job in the first place: “It’s GE.”
At the company’s off-site in Ohio,
executives gathered at Carillon Historical
Park in Dayton. It’s home to the Wright
Brothers’ Wright Flyer III, the first prac-
tical airplane. This piece of aviation his-
tory sits next to Culp’s Cafe, which serves
an All-American egg sandwich and cof-
fee for $13. The cafe has nothing to do
with GE’s CEO. It’s named after Charlotte
Gilbert Culp, who founded a baked-
goods business in 1902 as a young widow
in Dayton. At that time, GE was still just
an electrical company. <BW>
 Baseball’s $700 million man might be MLB’s best shot
at expanding the sport abroad. If he’s game

Ageof
50
Ohtani By Lucas Shaw
 Bloomberg Businessweek
On a warm February morning in the Phoenix suburbs,
hundreds of people gathered at the Los Angeles Dodgers’
spring training facility hours before the start of practice. They
flanked the path between the locker room and the field, hop-
ing to score an autograph. Kids flooded the team store to shop
for jerseys and hats. The site, known as Camelback Ranch, has
long been a destination in late winter, when baseball teams get
ready for the season ahead. The Dodgers are one of the sport’s
most popular clubs—seven-time World Series champions that
annually lead the league in attendance—but the crowds this
year have been three or four times normal size. “I’m not sure
I’ve ever seen anything like it,” says Tim Kurkjian, a baseball
writer and ESPN analyst who’s been attending spring training
for 44 years. “It was a circus. It was amazing how many peo-
ple were there, and it was all because of him.”
Him is Shohei Ohtani. The Dodgers signed him in the off-
season after his contract expired with the Los Angeles Angels,
who’d won the Ohtani sweepstakes when he left Japan in 2018
to come play in the US. The 6-foot-4-inch 23-year-old was the
most hyped baseball import in history. Now 29, he’s consid-
ered the best player on the planet and one of the greatest
to ever step on a field. Ohtani was the American League’s
Most Valuable Player last year, the second time he’s won the
award in the last three seasons. He could’ve earned the hon-
ors based solely on his hitting—he led the league in home runs
and several other categories—but he also won 10 games as a
pitcher. Professional baseball players simply don’t do both;
in fact, no other slugger has had this kind of talent since a
guy named Babe Ruth.
Ohtani is already the most famous athlete in Japan, the pride
of a baseball-crazed nation. His games are broadcast live there,
and his name is a headline fixture in the daily sports press. Yet
for the first six years of his career in the US, Ohtani toiled in rel-
ative obscurity in his adopted country. It didn’t help that he’s
a quiet guy who grants few interviews, posts infrequently on
social media and was on a team with eight straight losing sea-
sons (that technically plays in Anaheim, not LA). Yet his legend
grew in December when he signed a 10-year, $700 million deal
with the Dodgers. That contract, the biggest in the history of
team sports, has turned Ohtani’s every move into a spectacle.
PHOTO ILLUSTRATION BY 731; PHOTOS: AP PHOTO (4); SHUTTERSTOCK (2); ZUMA PRESS
Tens of millions of people worldwide watched the press con-
ference at which the Dodgers welcomed No. 17 to the team. The
league says his new jersey sold faster at online sports retailer
Fanatics than any other ever had, doubling the sales of Lionel
Messi’s Inter Miami jumper.
Major League Baseball hasn’t had a player who commands
this kind of attention in years, and it’s never had one with such
a rabid global following. Dodgers manager Dave Roberts, who’s
been around the game for more than 30 years as a player and
coach, compared interest in Ohtani to Beatlemania and Ohtani
himself to baseball players such as … well, no one. The only par-
allels he could make were Tiger Woods and Michael Jordan—
whom he was presumably referencing for his legendary career
with the Chicago Bulls, not his .202 average for a Chicago White
Sox minor league team.
March 25, 2024
The challenge for MLB will be to not whiff in harnessing
this enthusiasm, converting Ohtani fans into baseball fans.
Once America’s pastime, the sport has hemorrhaged popu-
larity to the National Football League and National Basketball
Association—to say nothing of soccer. TV ratings for the World
Series in the US have declined about 80% from their peak; the
sport’s biggest telecasts of the year are less popular than the
average regular season NFL game, though baseball is hardly
alone in that regard. Attendance is down from its highs.
The league and the Dodgers expect that Ohtani’s move to his
new team will amplify his success, and thus the sport’s. Already,
average resale ticket prices for Dodgers home games have risen
more than 10% (to $200 from $180 on StubHub, compared with
this time last year), while total sales have more than tripled—
thanks in part to fans in Japan. To help reward interest overseas,
the Dodgers were set to open the season with games against the
San Diego Padres in Seoul, on March 20 and 21, the first MLB
games in South Korea. The Dodgers are also engaged with new
sponsors, many from Asia. At the team’s urging, Ohtani has made
himself more available to the press, though not for this article.
“This is the best opportunity baseball has to regain market
share on other sports,” Roberts says, citing not just Ohtani but
fellow Dodgers star Mookie Betts and Ohtani’s former Angels
teammate Mike Trout. “Clearly football has it right now, but
our goal should be to be the most popular sport in the world.”
51
Just months after Ohtani was born in 1994, pitching phenom
Hideo Nomo left Japan’s Pacific League to play in the US.
Japanese teams exercised strict control over their players, and
none had jumped to MLB since the 1960s. But with help from
agent Don Nomura, Nomo found a loophole: He retired from
Japanese baseball, then signed with the Dodgers.
Nomo led the National League in strikeouts, setting off
“Nomomania,” and was named Rookie of the Year. His games
were telecast live on jumbotrons, including at Japanese train sta-
tions, so commuters could watch on their way to work. His suc-
cess inspired others to follow, and in 1998 Nippon Professional
Baseball and MLB modernized the system to facilitate move-
ment between the organizations. Over the next few years more
than a dozen Japanese players left for the US, including Ichiro
Suzuki and Hideki Matsui. The defection of Matsui, who turned
down a $64 million contract from Tokyo’s Yomiuri Giants to join
the New York Yankees, was the ultimate sign that Japan could
no longer hold on to its top stars.
“They went for the challenges of testing themselves at a
higher level and to break free from the stifling structures and
wearying excesses of the Japanese game,” Robert Whiting writes
in The Samurai Way of Baseball. Though the game is the same in
the US and Japan, the Japanese often work players to exhaus-
tion, Whiting says. If a pitcher isn’t performing well in Japan,
he practices more; in the US, he gets a few days off. Money is a
factor, too, of course.
Suzuki and Matsui arrived at the tail end of baseball’s last
Golden Age. Mark McGwire and Sammy Sosa spent the summer
of 1998 hitting many, many home runs, and both broke the
 Bloomberg Businessweek
season record of 61 set by the Yankees’ Roger Maris in 1961.
Their chase delivered the highest regular season TV ratings in 16
years. Yet baseball’s grip on the American consciousness weak-
ened. Attendance peaked in 2007 at 79.5 million tickets sold, an
average of almost 33,000 fans a game. World Series ratings had
topped out years before that, in the late 1970s and early ’80s;
the sport still had lucrative TV deals, but the national audience
declined as the sport became increasingly regional.
The decline started with revelations about the use of
performance-enhancing drugs, which tarnished the reputations
of many beloved players. But steroids weren’t the only issue.
Baseball’s slow pace of play doesn’t appeal to younger genera-
tions, who don’t have the patience to watch a full TikTok. The
average game lasted more than three hours in 2012 and stayed
above that mark for a decade. Plus, it’s hard to convince all but
the most diehard fans that a game between the Cincinnati Reds
and Pittsburgh Pirates in April is meaningful.
But beyond boredom and the odd player taking human
growth hormone, baseball’s biggest issue was—and still is—
marketing its stars. Other sports have turned theirs into global
celebrities. Cristiano Ronaldo, the Portuguese soccer great,
is the most-followed person on Instagram, edging out Messi.
LeBron James, the most famous basketball player on Earth, sits
atop a media empire worth more than $700 million. Meanwhile,
Ronald Acuña Jr., the reigning National League MVP, has fewer
52 Instagram followers than Kylie Jenner’s former assistant. And
how many people have heard of Corey Seager? Yordan Álvarez?
Corbin Carroll? (All are top-10 players this season, according to
ESPN.) “Baseball needs to continue to do a better job of partner-
ing with the players and vice versa to create household names
with our superstars,” Roberts says.
Agents and managers blame the league, which they say puts
the sport before the players. (The league disagrees with this
assessment.) But this instinct is rooted in tradition. Baseball
is the oldest major US sport, and its fans and players the most
resistant to change. There’s also long-standing tension between
MLB and the players union. The sport has averaged a labor stop-
page at least once a decade since the ’70s. Baseball is the only
major US sport with no salary cap.
League officials have established a Player Engagement
department with more than a dozen employees to work directly
with players on social media, setting Ohtani up on Instagram
in 2020. He’s been featured on the side of the league’s New
York headquarters and was also on the cover of the 2022 edi-
tion of MLB: The Show, a popular video game. “It’s easy to find
out what [Yankees star] Aaron Judge did last night, but people
want more,” says Noah Garden, MLB’s deputy commissioner
for business and media. “They wanna know what Aaron does
on weekends. We’re helping provide them the tools necessary
to build their brands.”
Yet baseball players are at a disadvantage relative to other
sports, Garden says. Position players are on the field every day,
over the course of 162 games, which robs them of time—and
maybe the energy—for promotion. (To be fair, some of them just
aren’t that exciting off the field. Mike Trout, one of the greatest
March 25, 2024
players of all time, has been outspoken about his passion for
meteorology.) And even the best ones often have limited impact
on any particular game. In football, Patrick Mahomes touches
the ball every offensive down. In basketball, Nikola Jokić is
involved in every possession on both ends of the court. In base-
ball, Judge might get four at-bats a game, and if he’s lucky, he’ll
get a few pitches to swing at. In the field, it’s possible no one
will hit a ball his way for hours.
The situation reached a breaking point in the last few years,
with attendance plunging to a modern low in 2022. League
officials discussed how to remedy things. They started with
rule changes, including a pitch clock and larger bases, to make
them easier to steal—and thus inject more baseball into baseball
games. The initial results are promising: The average length of
a game fell by 24 minutes last year, while the number of stolen
bases increased. Attendance surpassed 70 million for the first
time in years, and overall TV ratings climbed, too. Just not for
the World Series, between the Texas Rangers and the Arizona
Diamondbacks, a matchup between two smaller-market teams.
Baseball wants to expand overseas. Already, more than one-
third of MLB players aren’t from America, according to the
league. “One of the biggest opportunities to grow baseball is
to grow it outside of the United States,” says Chris Marinak,
chief operations and strategy officer. The league has set up
offices around the world, including in China, and increased
the number of games it plays outside the US, with regular
stops in Mexico City and London. In addition to Japan and
now South Korea, games have been played in Australia, and
soon they’ll be coming to other parts of Europe. After the Blue
Jays drafted Indian American shortstop Arjun Nimmala last
year, MLB began working on a documentary about the his-
tory of the player and his family to broaden baseball’s appeal
in the world’s most populous country.
While Latin America produces the largest share of foreign-
born major leaguers, the biggest business opportunity is in
Japan and South Korea. Japan is already the second-largest mar-
ket by revenue, with South Korea third. Both countries have
strong local leagues, high per-capita incomes and more than
a handful of players in the majors. When the Dodgers face the
Padres in Seoul, the two teams will feature six players combined
from the two markets. Just last season, the Padres’ Ha-Seong
Kim became the first Korean player to win a Gold Glove, while
his teammate Yu Darvish surpassed Nomo for the most career
MLB strikeouts by a Japan-born pitcher.
Increasing the international audience won’t be easy given
the time differences. Live games in the US air either in the mid-
dle of the night or in the morning in East Asia, and most fans
will never attend a game. But the league is optimistic. Fans
in Korea and Japan are hardcore and spend a lot of money
on obsessions such as K-pop and anime. Even fans who can’t
attend a game can buy a jersey. The league also says its Asian
American fan base grew 8% from 2021 to 2023.
Ohtani is central to baseball’s plans. The number of peo-
ple who pay for the MLB.TV streaming service has doubled in
Bloomberg Businessweek
“Baseball has always been mostly a domestic sport.
This offers the opportunity for us to grow beyond that”
Japan since he entered the league, and the average audience
for Ohtani games is nearly triple that of the average game.
Last year’s World Baseball Classic—the sport’s World Cup
equivalent—was the most-watched TV event of 2023 in Japan,
with the final rounds seen by more than half the people in the
country. Japan won when Ohtani, who would be named MVP
of the tournament, struck out Trout, his then-teammate. “This
Ohtani moment is an inflection point for baseball,” says Dave
Kaval, president of the Oakland Athletics. “Baseball has always
been mostly a domestic sport. This offers the opportunity for
us to grow beyond that.”
The youngest son of an amateur baseball player and a bad-
minton phenom, Ohtani stood out at an early age thanks to his
size and ability. Yet he didn’t try to break into the US when he
graduated from high school, because he wanted to continue
as both a hitter and pitcher. Hideki Kuriyama, manager of the
Nippon-Ham Fighters, convinced him that the professional
teams in the US wouldn’t allow that; it puts too much strain
on a high-priced investment. The Fighters, based in Hokkaido,
developed a program to let Ohtani do both. It was only after
several years of stellar play in Japan that he made the jump.
Ohtani has been one of the most popular players in America
since he arrived—his presence on the Angels attracted tens of
millions of dollars in additional sponsorship money—but he’s
not a household name in the US. Nor has his celebrity lifted the
entire sport. Attendance fell in his first couple of years in the
league and remained low during and after the worst of the pan-
demic. People in Japan followed the Angels because he was on
the team. Now that he’s gone? “Nobody cares about the Angels,”
Whiting says. “It’s all the Dodgers.”
The Dodgers have a history of pushing baseball to embrace
new constituencies; Jackie Robinson was a Dodger, as was
Mexican-born hurler Fernando Valenzuela. (“Fernandomania”
predates Nomomania by about a decade.) The club, home to not
just Nomo but also Chan Ho Park, MLB’s first Korean player, has
the longest track record in East Asia of any team in baseball. The
team has had someone Japanese or Korean on its roster almost
every year since the mid-’90s. To cater to the large population
of Koreans, Chinese and Japanese in LA, Dodger Stadium has a
bar for soju, an alcoholic beverage popular in South Korea. The
team was even flashing players’ names in manga-style Japanese
characters during at-bats last year, says Kim Cooper, co-host of
the Asians in Baseball podcast. Cooper predicts Japanese sup-
port for Ohtani will explode thanks to his new team.
This offseason the Dodgers also signed Yoshinobu
Yamamoto, one of the best pitchers in Japan, as well as starter
Tyler Glasnow. The Dodgers could add them only because
Ohtani deferred most of his compensation, giving the team
the financial flexibility to further improve the roster. Ohtani
will be paid $2 million a year now and $68 million a year start-
ing in 2034. Adding more than $1 billion in talent to a team that
won 100 games last year has made the Dodgers the favorites
to win the World Series, according to Las Vegas oddsmakers.
March 25, 2024
Adding two Japanese stars is also paying financial dividends
for the club. New sponsor Guggenheim Partners, the financial
firm whose chief executive officer, Mark Walter, is also chair-
man and controlling owner of the Dodgers, has bought a patch
on the team’s uniform to promote its business. Advertiser inter-
est in the Dodgers is so great that some companies are spon-
soring other teams—specifically for games against the Dodgers,
says Stan Kasten, the team’s president. Some of Ohtani’s team-
mates have also been approached by companies from Japan.
The team predicts it will generate tens of millions of dollars
in additional revenue every year thanks to Ohtani. It’s been
hard to keep up with demand for jerseys, and the Dodgers have
talked about selling 4 million tickets in a season for the first
time. “It’s rare an individual player can move the needle in
terms of ticket sales or sponsorships,” Kasten says. “Shohei is
one of those very rare players.” (Unfortunately for the team and
its fans, Ohtani won’t pitch this season because of an injury to
his throwing arm.)
Selling the sport still requires help from the star, and Ohtani
has evinced little interest in self-promotion. Though he speaks
English well, he travels with an interpreter. In ads for New
Balance, which signed him to a lucrative sponsorship deal, he
swings a bat but says little. Those around him, including Kasten
and Roberts, say he’s just focused on the game. “All he thinks 53
about is baseball,” Whiting says. “He’s boring.” Kasten says the
Dodgers are in regular contact with Ohtani and his representa-
tives about opportunities for sponsorships and in the press. But
they’re cautious about pushing. When reporters arrived at the
Dodgers’ spring training facility this year, those with credentials
could approach any player in the locker room—except Ohtani.
Much of this is cultural. Japan draws a clear distinction
between a person’s personal and professional lives; celebri-
ties there aren’t expected to share as many intimate details
about what they do away from the spotlight. Many of Ohtani’s
fans in Asia celebrate him because of his humility, which is in
contrast to the behavior of so many US stars. Ohtani is valu-
able to MLB because of his deep ties to Japan and East Asia, but
those ties come with values that don’t always mesh with mod-
ern American star-making machinery.
Roberts and Kasten say Ohtani’s priority is winning, which is
also the simplest path to global acclaim. But baseball is a funny
sport. The best team doesn’t typically win the World Series. The
Dodgers finished 2022 with the top record and got bounced in
the first round of the playoffs. Last year, they won 100 games—
and again lost in the first round.
To sell more of the world on baseball, Ohtani may need
to open up a bit. Recently he announced his marriage on
Instagram, writing of a new chapter in his career and life. He
initially declined to name his wife, only telling reporters she’s
a “normal Japanese woman.” Days later, Ohtani posted a photo
of the two of them standing on a tarmac alongside his inter-
preter and Yamamoto. <BW> —With Max Adler, Janet Paskin and
Jenny Seung Min Lee
 Bloomberg Businessweek

54

Economics Has a Problem:

A Surplus of Trolls
 March 25, 2024

55

A jobs website for economists holds a mirror up to the profession, revealing

the sexism and racism that many say are hallmarks of the field

By Christopher Beam and Catarina Saraiva

 Bloomberg Businessweek
Maya Rossin-Slater first learned the internet was mad at
her one day in May 2016, when she received a text message
from a grad school friend. It included a link to a website called
Economics Job Market Rumors, or EJMR, an anonymous forum
notorious among economists for its freewheeling, combative
and often bigoted discussion threads.
Rossin-Slater, then a third-year assistant professor of eco-
nomics at the University of California at Santa Barbara, had
recently co-authored a paper about the effect of prenatal
exposure to maternal stress on children’s health. The study,
“Family Ruptures, Stress, and the Mental Health of the Next
Generation,” used Swedish administrative data to compare
the health of people who had a relative die while they were
still in the womb with those who had a relative die during
the year after their birth. Their research found that members
of the former cohort had an increased likelihood of suffer-
ing from ADHD, anxiety or depression later on. The paper
was, the co-authors wrote, “the first to document a causal link
between fetal stress exposure and mental health in later life.”
It had been accepted for publication in 2015 by the American
Economic Review (AER), one of the most prestigious journals in
the field—a huge deal for anyone, let alone a young professor.
Now, it appeared, someone on EJMR was accusing Rossin-
Slater and her co-author of plagiarism. The post was brief,
linking to their paper and another study published in 2011 in a
56 journal called Psychosomatic Medicine. According to the anon-
ymous poster, the two “have an almost identical dataset” and
a “substantial portion of the AER paper is not even novel.” The
writer accused Rossin-Slater of ripping off the earlier paper and
assuming no one would notice. Another comment pointed to
a 1978 study from Finland that looked at the impact of losing
a father while in utero on the likelihood of later developing
schizophrenia and other negative outcomes.
Rossin-Slater’s paper was substantially different from these
earlier studies, but she hadn’t cited either one, and comment-
ers pounced: “Is this the new AER standard? Find s**tty papers
from the past and simply copy them?” one person wrote.
Another wrote bitterly: “They know editors and you don’t.”
At best, some argued, it was an innocent, albeit sloppy, mis-
take; at worst, deliberate theft. Some posts took a sexist bent—
hardly unusual at EJMR. “It is unthinkable that corruption of
such magnitude would be covered up if [the] parties involved
were male,” one person wrote.
The co-authors updated the paper a few days later, adding
citations and explaining the oversights. They acknowledged
the earlier studies but pointed out the differences: Their paper
showed causation rather than correlation, used a more sophis-
ticated methodology and had a much larger sample size than
the 1978 study.
But the damage was done. On Vox’s The Weeds podcast,
commentator Matthew Yglesias opined that the study was
perhaps not as novel as initially billed, and his colleague
Sarah Kliff speculated that it might not have gotten published
by the AER in light of the revelations. (Yglesias has been a
Bloomberg Opinion contributor since 2021.) The academic
March 25, 2024
watchdog site Retraction Watch posted an item about the
controversy, quoting Rossin-Slater’s thesis adviser dismiss-
ing EJMR as “not a legitimate source of information” and a
manifestation of gender bias in economics—which only riled
EJMR commenters further. Some now accused the women of
playing “the gender card.”
The fallout took a toll on Rossin-Slater. “Being the target
of EJMR criticism is awful,” she wrote on Twitter (now X) a
year later. “It affects your entire well-being, your mood, your
self-esteem.” (In an interview with Bloomberg Businessweek,
she declined to comment about the incident.)
The “Family Ruptures” flap indicated just how powerful
EJMR had become. Started in 2008 as a website to help Ph.D.
students and professors navigate academia’s opaque job mar-
ket, it soon became a forum for everything from ivory tower
gossip to chatter about food or personal technology. (Recent,
less inflammatory topics: “Canadian school flyouts,” “Headline
CPI increases to 3.2%” and “Pokemon is morally evil.”)
Over the years, the site has also developed a reputation as a
swamp of misogyny and racism, with a strict moderation pol-
icy but lax enforcement that’s earned it comparisons to 4Chan,
the ugly online forum. (Recent, more inflammatory topics on
EJMR: “Would you ever hire a hot grad student as a postdoc?”;
“Why do feminists, critical theorists, postcolonial writers, etc
know so little”; and “Does tenure allow me to refuse teaching
black people?” Those are just the printable ones.)
By the mid-2010s, the site had hundreds of thousands of
visitors a month. Now it was getting professors to revise their
papers and affecting careers. The controversy over Rossin-
Slater’s research also served as a referendum on EJMR itself.
For some, it revealed the dark side of the predominantly White,
male profession, all its sexism and resentment distilled into one
hyped-up pseudo-scandal. Others saw it as a welcome correc-
tive to the field’s frustrating elitism and opacity.
The culture war over EJMR has had implications for the
profession, too. For decades, advocates for equality in eco-
nomics have argued that the lack of women and minorities
results in blinkered, narrow-minded policy (for example, not
prioritizing research on child care or on the effects of incar-
ceration). Economics as a field can’t address real-world prob-
lems, they say, unless it first looks like the real world. Over the
years, EJMR had become a symbol of that imbalance as well
as a bastion of resistance to change. Its targets have included
Melissa Kearney, a University of Maryland economics profes-
sor who’s won recognition for her research on families and
inequality, and Claudia Sahm, a former senior economist at the
Federal Reserve who in a 2020 blogpost titled “Economics Is a
Disgrace” denounced the profession as sexist, racist and elitist.
EJMR’s influence has grown despite attempts to shut it
down or create sanitized alternatives. In some cases, anony-
mous attacks that started on the site eventually broke through
into mainstream discourse. In December 2023, conservative
activists published what they said was evidence that Harvard
University’s president, Claudine Gay, had plagiarized her dis-
sertation, which added to an already-raging firestorm over the
 Bloomberg Businessweek March 25, 2024

school’s response to the war in Gaza and led to her resignation.

An anonymous post on EJMR had made a similar claim months
before. (Gay has said she’s never misrepresented her findings
or took credit for others’ research.)
For years, many observers dismissed EJMR, which recently
changed its name to XJMR, as a fringe phenomenon. These
were anonymous internet trolls, they argued, not actual econ-
omists. And even if some economists did post on the site, it
was probably just a few disgruntled grad students at far-flung
universities—hardly the core of the profession.

In November 2021, Florian Ederer was denied tenure at the

Yale School of Management. The associate professor of eco-
nomics had been working at Yale for 10 years, during which
time he’d published 12 papers—including three in the so-called
top five journals—and won the school’s teaching award a
record three times. The rejection came as a surprise, espe-
cially because he never found out why. “It was not a particu-
larly happy experience,” he says.
One day in April 2022, Ederer took a walk in New Haven
with his friend Kyle Jensen, an entrepreneur and scientist
who also teaches at the Yale SOM, and they discussed Ederer’s
plans to go back on the job market. Ederer and Jensen were
close, often taking their families on ski trips together and
chatting about life and work at the swim and tennis club
where both were members. 57
▲ Ederer (left) and Goldsmith-Pinkham at Yale
The two scholars made a bit of an odd couple. Ederer, who’s
tall and wears his golden hair in a bun, speaks passionately be joined to form 227259131.111.5.175. That string would then
about European soccer, men’s fashion, skiing, piano and ten- be run through a scrambling algorithm called a hash, which
nis, all in a sonorous Austrian accent. On X, he posts cheesy would spit out a new string in encoded form that reads
econ jokes (his bio reads: “Austrian … Economist … But defi- e8b5eae32c2b197a0ac4cb889a9bbb8f417f3bff. Your username
nitely not an Austrian economist!”) and the occasional shirt- would be the characters in positions 10-13 in the hash, or in
PREVIOUS SPREAD: PHOTO ILLUSTRATION: 731; PHOTO: GETTY IMAGES. THIS SPREAD: NATALIE IVIS FOR BLOOMBERG BUSINESSWEEK

less photo. Jensen, shiny-pated and diminutive by comparison,
comes off as more gentle and less eager for the limelight,
though he betrays a scientist’s capacity for obsession.
On their walk, Ederer described the weirdness of the econ
job hunt—highly competitive and secretive—as well as the odd
role played by EJMR. When he was denied tenure, comment-
ers on the site had speculated about the reasons.
When Jensen looked into EJMR, he was aghast. “It’s disturb-
ing how toxic it is,” he says. “I haven’t seen anything like that
in other disciplines.” (Political Science Rumors, a site run by
the same administrator as EJMR, has similarly provocative con-
tent. But one PSR poster observed a difference between the
two: Economists “have entire threads dedicated to their inse-
curities about women.”)
An experienced software developer, Jensen dove into
EJMR’s inner workings. “He got a bit hooked,” Ederer says.
It didn’t take Jensen long to figure out the forum’s scheme
for assigning usernames: Each four-character-long code was
generated based on the thread’s topic ID and the user’s IP
address. (An IP address is a unique label assigned to a device
on the internet.) First, those strings of digits were combined.
Say your IP address was 131.111.5.175 and you were posting
in a thread with the topic ID 227259. Those numbers would
this case “c2b1.”
But, as Jensen discovered, the forum’s creator had made an
elementary mistake. Usually the administrator will “salt” the
hash, or introduce an element of randomness into the algo-
rithm that spits out the new string of digits. In this case, the
developer had forgotten to do that.
When Jensen explained all this, Ederer was dubious. So
Jensen told him to post a message on the forum, and Jensen
predicted the username that would appear next to Ederer’s
post. Jensen nailed it. “So you can figure out who’s who?”
Ederer asked. Jensen said no, the encryption only goes one
way: If you know the topic ID and IP address, you can figure
out the username, but not vice versa. For any given username,
there were roughly 65,000 possible IP addresses.
What if they cross-referenced the lists of possible IP
addresses across different posts, Ederer asked a few weeks
later. Then they could figure out which IP addresses show up
repeatedly, and those would likely be the real ones.
This turned out to be the key that unlocked the EJMR vault.
The sleuths enlisted Ederer’s friend, Paul Goldsmith-Pinkham,
an assistant professor of finance at Yale SOM who studies
econometrics, to help analyze the data. Goldsmith-Pinkham
was already familiar with EJMR, having been accused of
 Bloomberg Businessweek March 25, 2024

plagiarism in an anonymous post in 2021. Posts on Economics Job for more than half of Ph.D.s across all areas
“I don’t think anyone ever took it seriously,” Market Rumors of study. The gap starts early, with fewer
he says. When Ederer approached him with Share of all posts from US universities or women entering economics as undergrad-
research institutions on the site
the idea of running a statistical analysis to uates. They’re less likely to choose it as a
◼ Top 25 graduate school for economics
find IP addresses, Goldsmith-Pinkham says, major because of women’s “greater grade
“it was like catnip.” sensitivity” and a perception that most of
Together they were able to determine Notre Dame 3.4% the jobs are in the male-dominated field of
with near certainty that a given post was Stanford 3.0 finance, according to research by econo-
sent from a given IP address. This was no Columbia 2.7 mists Tatyana Avilova and Claudia Goldin,
small undertaking: Using an array of Nvidia Chicago 2.3 who won the 2023 Nobel Prize in econom-
A100 GPUs, it took four days of total com- Penn State 1.8 ics for her work on gender disparities in the
puting time to run almost nine quadrillion Washington 1.7 labor market.
calculations. Ultimately they were able to Rochester 1.7 From there, the number of women
trace the IP addresses of about two-thirds James Madison 1.6 declines in each stage of the profession:
of EJMR posts. California (Berkeley) 1.6 Fewer choose to pursue a Ph.D., and even
That ability gave them a window into Maryland 1.3 once fully accredited, women tend to leave
EJMR and its users. They found that while Federal Reserve Board 1.1 their careers in economics at a faster pace
the majority were posting from residential Georgia 1.1 than men. A large 2023 study that surveyed
addresses, about 10% were posting from the Purdue 1.1 professors across disciplines found that
networks of universities and research insti- Vanderbilt 1.0 women are more likely than men to leave
tutions. Of those, four universities—Notre Northwestern 1.0 academia and that it’s mostly attributable to
Dame, Stanford, Columbia and Chicago— Wisconsin (Madison) 1.0 the professional climate, not work-life bal-
had the largest number of posts among US N. Carolina (Chapel Hill) 0.9 ance issues. This phenomenon, dubbed the
institutions. They also found that about 13% Southern California 0.9 “leaky pipeline,” is especially evident in eco-
of the posts from universities were “toxic,” Cornell 0.8 nomics, where the share of female assistant
58 as measured by a popular machine-gener- professors is double that of full professors,
ated dataset called ToxiGen. Spokespeople DATA: EDERER, GOLDSMITH-PINKHAM, JENSEN; U.S. NEWS
compared to a ratio of 1.3 for men.
for the universities didn’t respond to & WORLD REPORT 2023-24 RANKINGS. SHARE IS THE
PERCENTAGE OF POSTS COMING FROM THE SOURCE AMONG Some market purists argue that wom-
ALL POSTS ORIGINATING FROM IP ADDRESSES ASSOCIATED
requests for comment. WITH US UNIVERSITIES OR RESEARCH INSTITUTIONS en’s underrepresentation in the profession
Their findings, released in July 2023, simply shows that they’re less interested
confirmed what many had suspected but hadn’t been able in the field. Others point to a self-reinforcing mismatch
to prove: The profession was rotten, and the rot went all the between the profession and women who might enter it, as
way to the top. It also vindicated the female economists who’d many female economists sense it doesn’t take seriously the
been talking for years about bias in economics. It wasn’t just issues that interest them. Gender-focused research was long
in their heads. regarded as “fringe,” says Julie Nelson, a professor emeritus
of economics at the University of Massachusetts in Boston and
The idea that women are unsuited to studying economics a founder of the subfield known as feminist economics. “You
has long permeated the profession. Even as universities make it in economics by doing mainstream neoclassical eco-
opened up to them in the 20th century, and more of them nomics or some not-too-far-away variation on that,” she says.
chose majors such as chemistry or math, economics lagged in
terms of representation. In the 1970s women received about
24% of all Ph.D.s but only 8% of doctoral degrees in economics.
That’s when attempts at reform started in earnest. In 1971
a group of women led by Wellesley College professor Carolyn
Shaw Bell formed the Committee on the Status of Women in
the Economics Profession at the top organization in the field,
the American Economic Association. They aimed to increase
women’s access to career opportunities, including tenure, and
to document diversity numbers in the profession. The com-
CATARINA SARAIVA/BLOOMBERG

mittee, known as CSWEP, now conducts mentorship work-

shops for students as well as career economists, and it also
coaches department heads on ways to create a more inclu-
sive environment.
But the gender gap persists. Today about a third of eco- ▲ Economists call for more action on harassment at a 2023 meeting of the
nomics doctoral degrees go to women, though they account American Economic Association
Bloomberg Businessweek
Nelson’s own work has shown that as more women entered
economics, more research was done on such topics as the
economics of child care, women’s labor market experiences
and women’s health.
Likewise, George Floyd’s murder in 2020 and the ensuing
conversations about race and representation focused atten-
tion on the lack of diversity in the field, including at some of
the highest government institutions. For example, until two
years ago, the Federal Reserve had never had a Black woman
on its Board of Governors.
In early 2022, President Joe Biden nominated economist
Lisa Cook to an open seat on the Fed’s board. What happened
next became one of the more high-profile examples of EJMR’s
reach. On Feb. 3 she and two other Fed nominees appeared
before the Senate Banking Committee, the first step in secur-
ing confirmation. There, Republican Senator Bill Hagerty of
Tennessee accused Cook of “omissions” in her paperwork and
“mischaracterizations” of her background.
At issue was a paper Cook wrote that had appeared in the
“There’s still a contingent of people
that will say, ‘well, you should just
ignore it,’ and I feel like you don’t
really have the privilege of ignoring
it, because it spills over into real life”
May 2009 edition of the AER. Even before her nomination,
EJMR posters had fixated on a detail that some might con-
sider a technicality. Prior to 2017, the May issue of the journal
was dedicated to publishing work presented at the American
Economic Association’s annual conference, and the papers in
that issue didn’t undergo peer review. Yet in a bio on her per-
sonal website, Cook had included the AER when referencing
“peer-reviewed journals” in which she’d published papers. She
later changed the wording, deleting “peer-reviewed.” Posters
on EJMR flagged the change. At the Senate hearing, Hagerty
accused Cook of saying that some of her published articles
were peer-reviewed “when they were not.”
Philip Jefferson, nominated to another vacant position on
the Fed board, was at the same hearing as Cook. His résumé
cited two AER papers, both also published in the special
May issues, without mentioning anything about peer review.
Jefferson wasn’t accused of misrepresenting his résumé.
Cook and Jefferson are both Black, were both in academia
before joining the Fed and had both served in professional
organizations that aim to increase diversity in economics. But
Cook was more vocal about the profession’s racial and gender
deficits, including on social media. Republicans characterized
some of her commentary as too left-leaning and said her views
would risk politicizing the central bank. Cook’s confirmation
March 25, 2024
ended in a 50-50 Senate vote along party lines, with Vice
President Kamala Harris breaking the tie, giving the Fed board
its first Black female governor. Jefferson was confirmed with
91 votes, becoming the fourth Black man on the board.
Concerns about EJMR’s culture had been building for
years. In 2017, Alice Wu, then an undergrad at the University
of California at Berkeley, released a paper analyzing the site’s
archives and found it was biased against women. She used sta-
tistical methods to show that certain words (“hotter,” “shop-
ping”) were strongly associated with gender-indicating terms
like “she” and “women,” while others (“hero,” “adviser”) were
associated with “he” and “man.”
Wu’s paper went off like a bomb. Women started openly
sharing stories of harassment and unfair treatment, both
online and off, and publicized the names of some of the pro-
fession’s worst offenders, leading to investigations and suspen-
sions at major research institutions, including Harvard and
Washington University in St. Louis.
The anger came to a head at the
American Economic Association’s annual
meeting in January 2018. Attendees urged
the organization to do more to combat
bad behavior in the profession, as well
as EJMR itself.
Later that year the AEA conducted 59
its first “climate survey.” The exercise
revealed that just 20% of women said
they were satisfied in the profession,
compared with 40% of men. The associ-
ation also put in place a code of conduct
and hired an ombudsperson to field complaints. However, the
new role had no investigative authority, and the worst punish-
ment the AEA could inflict was revoking an economist’s mem-
bership in the organization—hardly a meaningful deterrent.
The AEA even tried to put EJMR out of business by introduc-
ing its own online discussion board. Unlike EJMR, EconSpark
was carefully moderated and required users to register. But
it’s failed to gain traction.
At the AEA’s January 2023 meeting, a group of mostly
women demanded further action. In May, Anya Samek, an
associate professor of economics and strategy at the University
of California at San Diego’s Rady School of Management,
started a petition urging the organization to help fund legal
action against defamatory speech on EJMR. It got more than
1,900 signatures.
“There’s all sorts of sexual harassment things that happen
against women at conferences, in person, and it’s really hard
to tackle those,” Samek says. Victims don’t always want to step
forward, especially if they don’t have tenure, for fear of retali-
ation or reputational damage. “I thought maybe we should be
trying to hold people accountable for actions that are actually
documented,” she says. Samek, who has herself been the sub-
ject of EJMR threads, was fed up with being told she should
shrug off the criticism. “There’s still a contingent of people
 Bloomberg Businessweek
that will say, ‘Well, you should just ignore it,’ and I feel like
you don’t really have the privilege of ignoring it, because it
spills over into real life,” she says.
But how could anyone go after EJMR without knowing
who was behind it? A year earlier, a web developer named
Jesse Nickles had decided to investigate the site. Nickles runs
a website called Hucksters.net, where he seeks to expose “bad
actors” online—spammers, scammers or anyone else causing or
enabling harm via a computer. “I wanted to bring more trans-
parency to some of the shady corners of the internet,” he says.
It wasn’t EJMR’s “misogyny” and “racism” that motivated
him to look into it, Nickles says. (Scare quotes his.) He leans
toward free speech absolutism. Rather, it was the hypocrisy
of the site’s administrator that galled him.
First, he noticed that mentions of a certain Fox News
employee were being deleted—a potential cover-up, he
believed, of a conspiracy between figures at that media out-
let, a conservative blogger and EJMR to coordinate messaging.
Nickles says there were several clues that helped him uncover
the administrator’s identity. The IP address of the web server
hosting EJMR’s sister site also hosted the personal homepage
of well-known economist Stephany Griffith-Jones. This led to
further discoveries, including a social media post by a “David
Griffith-Jones” from 2011 promoting EJMR. Nickles then saw
that EJMR auto-deleted any post that mentioned that name—
60 which struck him as selective censorship he couldn’t overlook.
“I was truly disappointed with how much EJMR fluctuated
between almost radical free speech policies and incredibly hyp-
ocritical censorship behavior,” Nickles says. “It just didn’t seem
very fair.” Nickles reached out to the administrator, he says,
threatening to expose him unless he changed his moderation
policy. Nothing changed, so on May 12, 2023, he posted the
admin’s name on his website.
David Griffith-Jones has economics in his blood. His father,
Robert, worked at a business school in Brighton, England,
and his mother, Stephany, is deputy governor of the Central
Bank of Chile. Griffith-Jones holds a master’s of science from
the London School of Economics, and his curriculum vitae
includes stints at the UK’s treasury and its Department for
International Development. In 2010, Griffith-Jones took over
EJMR from its anonymous founder and, it appears, began post-
ing on the site under the pseudonym Kirk.
In an email, Griffith-Jones said that he’d been part of a small
team running the site but that his involvement “fizzled out a
long time ago.” He declined to say whether he posted as Kirk.
There’s substantial evidence that he did, however, such as ref-
erences to the same birthday and the same work history—as
outlined by an anonymous website, EJMR Exposed, which
appeared after Nickles’ investigation and the release of the
paper by Ederer and his colleagues. There’s also evidence
that Griffith-Jones ran or helped run EJMR as recently as 2021,
including a consistency in topics discussed by Kirk.
After Nickles revealed Griffith-Jones’ identity, EJMR went
into lockdown. The hash-salting problem was fixed. Many
March 25, 2024
references to Griffith-Jones on the internet were scrubbed.
In his posts, which remain online, Kirk showed little inter-
est in economics itself, though he opined regularly on mat-
ters of personal technology, veganism and the HBO series The
Wire. (Griffith-Jones once had a picture of Stringer Bell, a lead
character on the show played by Idris Elba, as his avatar on a
social media profile.)
He also wrote about the pros and cons of moderation. He
tried to strike a balance, saying that a 50-50 split between com-
plaints about too much moderation and complaints about too
little was “where it should be.” He described his moderation
philosophy as “light touch, you won’t notice it unless you are
looking to cause trouble.”
In 2011 he posted an extensive moderation policy, forbid-
ding content that’s “too critical of someone’s personal life,”
“violent,” “contains harassing content or hate speech,” “vio-
lates a person’s privacy,” contains “racism, homophobia and
sexism” or is simply “boring trolling.” (Clever trolling was pre-
sumably OK.) He provided an email for users to submit take-
down requests.
Kirk wrote that he was committed to preserving anonym-
ity, but at least once he suggested he might trace IP addresses
himself. In 2011 he threatened to report a user to his univer-
sity, Iowa State, for a “spam attack”—a move that made many
posters angry. As the site grew to as many as 300,000 visi-
tors a month, it became more difficult to moderate, Griffith-
Jones said in the email: “EJMR would face criticism from both
sides, from those who felt it was over-moderated and was vio-
lating free speech, and from those who wanted tougher mod-
eration.” It was “near-impossible” to “please all of the people
all of the time.”
Griffith-Jones declined a request for a phone interview, but
he made an impassioned case for EJMR via email. He argued
that the site provides an outlet for people who might feel
uncomfortable sharing their views on campus, whether for
political or personal reasons.
John Cochrane, an economist at Stanford University’s
Hoover Institution, says EJMR provides a “valuable function”
as a forum for ideas—particularly conservative ones—that might
not be popular in academic departments. “There’s a lot of
junk” on EJMR, Cochrane says. “But there’s a little bit of baby-
in-the-bathwater there.”
Kevin Bryan, an associate professor of strategic manage-
ment at the University of Toronto, says he found the site use-
ful during his job search. The field is full of “unspoken rules”
that can be confusing to outsiders, he says. And unlike, say,
Larry Summers, who’s related to two Nobel laureates, “I have
no academics in my family,” Bryan says. He says the unsavory
aspects of EJMR are not the main draw. “I don’t think 99% of
people who look for information on that site want to see big-
otry,” he says. “They put up with the bigotry because of the
useful information.”
Griffith-Jones endorsed the argument previously made by
Sahm that the site is more of a symptom than a cause of the
problems in economics. Academia is stressful across the board,
 Bloomberg Businessweek
▲ Samek
but economics stands out. Grad students compete for a small
number of slots at top schools. Many economists argue that the
profession is more hierarchical than others—dominated by the
top five journals and top dozen or so university departments,
leaving those who don’t make the cut feeling embittered.
Aggressive criticism bordering on hostility is the norm—a
source of pride, even. “I do have an inkling that economists
are singularly nasty toward each other,” says Vincent Geloso, a
professor at George Mason University. (Insert “dismal science”
joke here.) Professors without tenure feel immense pressure to
publish in top journals. “People eat their nails to the point of
bleeding out of stress from this,” Geloso says. The peer-review
process is opaque: People are frequently rejected but never
know why. It’s easy to get paranoid.
Still, even if EJMR is just a symptom, many want to elimi-
nate it. But it’s not clear whether that’s possible, as platforms
can’t be held liable for the content posted on them. Some econ-
omists have tried to shame Citibank, the Financial Times and
other advertisers after their logos appeared on EJMR, but it
ALAN NAKKASH FOR BLOOMBERG BUSINESSWEEK
doesn’t seem to have had an impact.
The only way to sue for defamation would be to track down
the individual who posted an offending item. “If we can sub-
poena the IP address and figure out who it is, we can hold them
accountable,” Samek says. After reading Ederer’s paper, Ian
Ayres, a professor at Yale Law School, reached out to him offer-
ing to help the targets of defamatory speech on EJMR seek legal
remedies. “If you personally threaten or call for violent acts
against an individual, it’s not protected speech,” Ayres says.
March 25, 2024
But that would require access to the trove of IP addresses,
and Ederer, who started a new job at Boston University in the
fall, says the database is no longer in his hands: “It’s in a vault
very securely stored at Yale.” Ederer says he does know of
researchers who’ve scraped data off the EJMR archives. Others
could potentially sue Yale for its release. In either case, they’d
simply have to retrace the steps of Ederer and his co-authors
to come up with the list of IP addresses.
“I don’t think this is the end of the story,” he says.
On Nov. 17, more than 30 female and nonbinary economists
gathered in a ballroom at the New Orleans Marriott. It was the
day before the start of the annual meeting of the Southern
Economic Association. The purpose of the gathering was to
help third- and fourth-year Ph.D. students find mentors, learn
about the job market and navigate the tricky process of con-
ducting their own independent research.
Unlike other sessions at the conference, journalists weren’t
permitted to attend. Few of the people involved wanted to talk
about it, as if anyone associated with it publicly might become
the next main character on EJMR. “We were trying to make
sure the students were feeling comfortable,” says Orgul Ozturk,
a professor of economics at the University of South Carolina,
who co-organized the workshop. “It’s a safe zone.”
In conversations about the workshop, a familiar name
came up: Maya Rossin-Slater. It turned out the New Orleans 61
session was based on her design. In grad school at Columbia
University, Rossin-Slater had been one of six female students in
a cohort of two dozen; by the third year, the number of women
had dwindled to four. In the late ’90s, the AEA’s Committee on
the Status of Women had introduced a mentorship program for
female assistant professors in economics, which had proven
effective in boosting retention. But no such program existed
for Ph.D. students.
So, in 2019, Rossin-Slater organized one at Stanford. Panels
covered gender issues, time management, mental health and
other topics. Students broke off into groups based on areas
of academic interest, such as health or labor or macroeco-
nomics. They were also matched with mentors who could pro-
vide feedback on their research proposals. The second year,
demand for the program was so high, it could accept only
half the applicants. The workshops provide an opportunity
for women economists to share their personal experiences in a
safe environment, Rossin-Slater says: “People being really vul-
nerable and honest—sharing that it’s not all the perfect path to
success—has been well-received.”
She says EJMR hasn’t come up during the sessions, but she
acknowledges that her own experience with the website partly
contributed to her decision to create the workshop. “I’m sure
it played a role,” she says.
At one point, Rossin-Slater solicited feedback on the work-
shop and found that students considered the gender panel the
least useful. They were more interested in practical matters like
how to structure their time or improve their research. Rossin-
Slater decided to cut it. <BW>
TUNE IN EVERY WEEK, WHEREVER YOU LISTEN OR WATCH.
LISTEN
NOW
STREAMING
WATCH
 THE PULL OF P
PERFECTION U
R
S
U
I
T
S 63

66
A Swiss watch success
story 98 years in the
making

68
The startup selling you
$120 melons

70
A Dubai hotel faceoff

71
The bug zapper
batting 1.000

For people with enough money

and time, there are no limits in the quest March 25, 2024
for a “God shot” of espresso Edited by

The Lelit Bianca

By Robb Mandelbaum Chris Rovzar

espresso machine Photograph by David Chow Businessweek.com

 DRINKS Bloomberg Pursuits
O
n a chilly February afternoon, I stood at my kitchen
counter packing precisely measured ground coffee
into a $3,000 Lelit Bianca, hoping to master the art—and
science—of making impeccable little cups of espresso.
I had started with an Italian roast, because extracting coffee’s
tastiest elements is said to be easier with dark-roasted beans,
but if you don’t do it right, the brew can be pretty harsh.
Now, six weeks after my first brand-new home espresso-
making machine arrived, and frustrated by the slow learn-
ing curve from making just a cup or two a day, I was pouring
shot after shot down the drain.
I don’t have the palate to adequately describe the awfulness
of what I was brewing. Did I detect a note of barbershop ash-
tray? Or was that singed carpet?
I blame my friend Peter. A couple of years ago, he invited
me to take his old espresso machine off his hands. He could
see that I was fascinated by his hobby, and that I loved good
cappuccino: It takes me back to Italy, a place I don’t get to visit
often. But cappuccinos are expensive, so I don’t visit cafes
often, either. If I could fix up his old machine cheaply, I could
bring a little cup of Italy into my home every morning. And if
not, I could hawk the thing on eBay and go back to Nespresso.
I didn’t realize it when I picked up Peter’s machine, but I
was joining a fast-growing club. Enthusiasm for home-brewed
espresso has exploded in recent years, spurred initially by pan-
64 demic boredom and isolation. In 2019, Americans collectively
spent just under $200 million on espresso makers, according
to market research firm Circana Inc. Last year, the figure rose
to more than $420 million.
Sales of high-end machines are fueling this surge. In 2023,
Americans spent $61 million on “prosumer” models—the word
is a portmanteau to describe cafe-grade equipment sized for
a kitchen counter—triple the amount spent in 2019, with an
average layout of more than $1,500. Mark Bagnoli, a sales rep
for retailer Chris’ Coffee, says he saw a massive jump driven
by those who’d already bought mass-market Brevilles and
De’Longhis, “and they decided they wanted something better.”
Alex Lloyd, a distinguished software engineer at Google,
bought his $3,700 Cremina in the summer of 2020 and took it
with him on an 18-month road trip across the US, stored in a
Pelican hard case. He still uses it to make cortados first thing
every morning. “It’s a deep, simple, tactile experience, nurs-
ing the best flavors of your life out of it with your hands,” he
says. “It’ll be at least great and sometimes incredible.”
But the machine itself is just the beginning. A cup of home-
made espresso, I learned, is its own black hole, a swirling vor-
tex that swallows money, time and attention.
Staring at the accumulating mound of thick
chocolate-colored disks in my compost, I remembered what
Peter had told me when I began: “It’s going to take you a year
to learn how to make a good cup.”
The machine he gave me, it turns out, has brought a lot of
people to this place. Released in 2003 by Spanish company
Expobar and called the Brewtus, it was one of the first pro-
sumer machines built with two boilers instead of one, solving
March 25, 2024
a persistent problem with making lattes and cappuccinos:
Espresso is brewed at about 202F, while steam for milk reaches
about 257F.
The Brewtus also regulates the brew boiler with an elec-
tronic controller that not only ensures a consistent tempera-
ture but also can be adjusted. This innovation especially
complemented the emergence of so-called third-wave coffee,
which emphasizes terroir and lighter roasts. With single-origin
and less-roasted beans, extraction gets harder and requires,
many think, hotter water than with dark roasts.
Modern espresso is built increasingly around these lighter
and more obscure roasts. It rests on a foundation of precise
yet fungible rules, developed through decades of experimenta-
tion, starting with a basic recipe that converts a specific weight
of ground coffee into a liquid pour twice as heavy in just 25 to
30 seconds.
But recipes are made to be revised. Good espresso aligns
a whole matrix of variables, starting with the beans and end-
ing with the flow, pressure and temperature of the water. Each
one can be endlessly tweaked. Tinkerers and inventors, includ-
ing more than a few tech-sector escapees, have seized on the
opportunities to draw out incremental improvements from
nearly every step in the process. Such optimization rarely
comes cheaply: Top grinders such as Weber Workshops’ EG-1
or the Monolith Flat MAX resemble giant electron microscopes
and cost more than $4,000, though most of the appeal seems
to be about the prestige of owning something built by hand.
This level of espresso enthusiasm draws a disproportion-
ate share of business executives: problem-solving competitive
types who, as Bagnoli puts it, say to themselves, “Everyone
says this is a good drink, but I can try and do better.”
Mark Cuneo, a sales executive at Fiserv, is one. Not long
after he “started the journey” 10 years ago, he began roast-
ing his own beans. Now he sends them out to his best clients.
“I love the process,” he says. “I love smelling the grounds just
out of my grinder before I tamp it. I love the click of the level
as the water starts to flow, the color of the espresso. I love my
beautiful espresso machine in all its shiny glory.”
A very specific type of jargon pervades the hobby. People
describe making a cup as their “workflow,” which begins with
measuring the “dose” and “dialing in the grind” before mov- PREVIOUS PAGE: PROP STYLIST: KOUNTHEAR KUCH. THIS SPREAD: COURTESY COMPANIES
ing on to “puck preparation” and finally “pulling the shot,”
even though many modern machines have replaced that iconic
lever with a button.
Ask a hardcore enthusiast about their “God shot” and
they’re likely to regale you with a story. Cuneo found his at
Espresso Vivace in Seattle. Lloyd says his was at a cafe in New
York that, for three days, had beans from Burundi that hit like
a concentrated shot of raspberry ice cream. “I’m always trawl-
ing the internet for those specific beans,” he says.
The apotheosis of precision-guided espresso arrived in 2018
with the first machines built by Decent Espresso. They can
cost up to $4,600 and are outfitted with a tablet that’s remi-
niscent of a Tesla screen, on which home baristas can see real-
time graphs of what’s happening, then use those parameters
 A STARTING POINT FOR HOME BARISTAS
• The Grinder
Common advice for newbies is
to spend more on your grinder
than your espresso machine, but
these days you can buy a great
grinder for under $600. The Turin
DF64 Gen 2 (from $399; at left),
is a single-dose grinder initially
commissioned as a knockoff
of the acclaimed Niche Zero
($570), but the DF64 has become
beloved in its own right.
• The Scale
You don’t have to spend $250
on an Acaia Lunar, a Bluetooth-
enabled, data-recording scale
with a real-time flow-rate
indicator, but do make sure you
buy one that measures to a tenth
of a gram and is thin enough
to fit under the head of your
machine. It should also be water-
resistant or include a water-
resistant mat on it.
• The Tamper
A good espresso machine usually
comes with a good tamper,
but it’s not mistake-proof. The
self-leveling Normcore V4 ($50)
took one pernicious variable
out of the equation by helping
me to tamp evenly and with
the same pressure each time.
It’s controlled by pre-calibrated
springs inside; there are three to
choose from.

THE MACHINES type of bean, but you’ll have use a steam boiler for the milk the water flow. Mastering the
• The Gaggia to work at it. The small single that simultaneously heats paddle takes time, but it’s
boiler offers only rudimentary water for the coffee as it passes otherwise easy to use. It adapts
Classic Evo
temperature control, and through in a pipe. Its electronic nicely to your kitchen: You can
Pro (from
steaming milk is a struggle. temperature control is much move the water tank to suit the
$449) is the
There’s little room for precision more precise and easier to space or plumb the machine
latest version
here; only the slimmest of work with than the mechanical directly to your home’s water
of what scales will fit beneath your cup. switches commonly deployed line. Its electronic control center
Bagnoli from in these machines. Ultimately, lets you program changes in
Chris’ Coffee the Appartamento will probably temperature and make limited
calls “almost satisfy most home baristas. adjustments to the flow while
everyone’s The machine, however, will brewing the coffee.
entry-level machine if they shut down midshot when the
are truly getting into home water tank runs low, and the
espresso.” Unlike many better- steam wand was a little too
known rivals, the Gaggia Classic long for me.
carries commercial-grade 65
internal parts made of metal, not • The twin-boiler Lelit Bianca
plastic, and has been refined to ($3,000, opening page) was one
better control pressure. But it • Heat exchanger espresso of the first models for home
seems almost designed to be machines such as the Rocket kitchens to mount a paddle
a way station. It will brew any Appartamento TCA ($2,200) at the top to help you control

to improve their brew. And when you do finally achieve your
own God shot, you can program the machine to endlessly
reproduce it. The irony, as Cuneo points out, is that it’s called
the God shot precisely because it can’t be replicated.
Ultimately, Peter’s Brewtus was too far gone to repair
cheaply. He and others steered me to the Bianca, a dual-boiler
machine with a paddle at the top to help control water flow.
Espresso is traditionally thought to taste best when water
pushes through the coffee at 9 bars of pressure (131 psi), which
most machines are built to deliver. As brewers have experi-
mented with new types of coffee, though, they’re rethinking
that standard: Playing with flow changes the speed at which
the chamber fills up with water and reaches full pressure, buy-
ing you time to complete your shot.
But in many cases, the machine doesn’t matter nearly
as much as what you do to the coffee before the water even
touches it. First, you must grind the coffee precisely: Too
coarse, and the water will rush through without pulling out
enough coffee, and your drink will taste thin and possibly sour.
Too fine, and the coffee will be over-extracted and bitter.
Then you have to tamp, or compress, the coffee into a
tight puck. If the puck is unlevel or insufficiently compacted,
the water will channel its way through weak spots, resulting
in a cup that can be both under- and over-extracted at the
same time. Like Decent’s more sophisticated controls, the
Bianca’s paddle allows you to alter the dynamics of your
shot and perhaps correct mistakes you made while prepar-
ing your puck.
Not for me, though. I simply could not tamp the coffee level.
As I adjusted the variables, I got wildly inconsistent results. I
watched videos; I consulted forums; I asked pros. I got a little
better, but it seems I’m simply not yet good enough nor my
palate sharp enough to get the most from a great machine.
At least that’s what I thought. But then one week later, I
ground 17.5 grams of beans roasted exactly one month before.
The tamp was slightly off, and I readied to throttle the water
flow if it came out too fast. But it didn’t: 35g of coffee streamed
into my cup in just under a half-minute. The result was, to me,
perfectly balanced—not sour or bitter, neither thin nor sludgy,
not too sweet but not needing sugar. Then I added a thick
crown of foamy milk that made my coffee beautiful and rich.
I still don’t know how I did it, but I did know what I had
to do next: I upgraded. I ordered an expensive self-leveling
tamper, then stopped at a coffee shop and bought 12 ounces
of the lightest-roasted beans they had, at about $2 an ounce.
But I’m not hooked. I can quit anytime. <BW>
 WATCHES Bloomberg Pursuits March 25, 2024

The name “the Tudor” was

first registered on behalf of

The Shield Rolex founder Hans Wilsdorf

in 1926, 18 years after the
Rolex name. It started appear-

Stands Alone ing on watches in the 1930s,

but it wasn’t until 1946 that
Tudor registered as a separate
company, Montres Tudor SA.
After years in sister brand Rolex’s At the time, Wilsdorf made its
long shadow, Tudor is striding task clear.
“To make a watch that
into the spotlight could sell at a more modest
By Andy Hoffman price than our Rolex watches,
Pirson in 2021
and yet one that would attain
On the far western edge of the sprawling Geneva campus the standard of dependability for which Rolex is famous,” he
that’s home to Rolex, the world’s top-selling luxury watch- said. Put simply, Tudor’s job is to make the best possible watch
maker, another company is hard at work. More than at the best possible price.
120 designers, engineers, marketers and managers in light- Beginning in the 1940s and over the next four decades,
filled, open-concept workspaces are executing the Tudors were made using off-the-shelf third-party move-
next phase in a comeback that’s shaking up the ments that often shared the same steel cases, crowns and
Swiss watch industry. bracelets as Rolex.
Tudor, long relegated to a spot deep in sis- Prized by governments for its cost, durability and ease
ter brand Rolex’s shadow, has been given of servicing, Tudor’s version of the Submariner dive watch
more autonomy in recent years to shape was supplied to both the US and French navies. Watches for
66 its fate and tell its story. This has embold- France’s Marine Nationale in 1969 were the first to fea-
ened its leadership to take risks, and as ture Tudor’s “snowflake” hour indicator and thick min-
a happy result, five-year sales growth has ute hand, which are now hallmarks. The blocky style was
been among the fastest in the industry. meant to boost the amount of luminescent material and
Many of Tudor’s accessibly priced designs improve readability at night and underwater during mili-
are so coveted they’ve been temporarily wait- tary operations.
listed by an expanding stable of deal- By the 1990s and into the early 2000s, however,
1969 Prince Oysterdate Submariner
ers. Tudor’s tough, utilitarian dive and Tudor found itself derided by critics as “the poor
sports watches have managed to hit a sweet spot by mak- man’s Rolex.” As recently as 15 years ago, even as Rolex
ing classic designs seem fresh. That’s helped it go head-to- thrived, its more affordable sister appeared starved of
head with rivals and seize market share in the competitive investment and attention as designs went stale and brand
lower-priced category. equity withered. Tudor watches weren’t available in key
“We’re a normal brand, and we have to fight,” says Eric markets including the US, UK and Japan; the bulk of its sales
Pirson, Tudor’s managing director, who’s been leading the were in Asia.
company since 2016. It’s the first time he’s publicly discussed Now look at Tudor. Led by the hit Black Bay
the brand’s strategy. line, which made its debut in 2012 and harks
A 29-year veteran of the Rolex Group, Pirson has spent back to its military history with vintage styl-
half of that time at Tudor. He says the overhaul has been ing, the brand has released a parade of pop-
in motion for almost 15 years and has accelerated in the ular, relatively affordable models that have
past five. Tudor built and now operates its own pro- resonated with casual buyers and hard-
PIRSON: COURTESY GPHG. WATCHES: COURTESY TUDOR

duction facilities, as well as its own movement manu- core enthusiasts alike.
facturer (a specialist company that creates the beating Black Bay is Tudor’s flagship and
heart of a watch), allowing it to churn out more time- includes a massive range of sizes, dial
pieces. At the same time, the watchmaker has honed its colors, bezel options, case materials and
designs and quality to bolster the brand’s identity as an complications. Meanwhile, the Tudor
innovator with novel uses of materials and complications. Pelagos, a modern tool watch housed in
It’s been more aggressive with marketing, sponsorships and titanium that also premiered in 2012, has
celebrity partnerships than modern Rolex has ever been. become its other snowflake-handed hit.
“We complement each other in many ways, but we Tudor has added fresh models to both
Black Bay with burgundy bezel
create the product separately,” Pirson says. lines in recent years, with a focus on
WATCHES Bloomberg Pursuits
smaller case sizes that buyers have been asking for. Its
watches are now sold at more than 1,700 retail locations in
100 countries, including more than 260 Tudor-only boutiques.
The jump in demand and a sharp rise in retail locations
have vaulted Tudor onto the list of the 20 biggest Swiss
watch brands. Sales have more than doubled since 2017,
to well above 500 million Swiss francs ($566 million),
accounting for about 5% of Rolex Group’s industry-leading
10.6 billion francs in sales, according to analysts at Morgan
Stanley and LuxeConsult.
Tudor “was one of the fastest-growing brands” during
the pandemic, amid an unprecedented boom in demand for
Swiss watches, says Vontobel analyst Jean-Philippe Bertschy. It
posted a 23% compound annual growth rate from 2019 to 2023,
with sales last year of about 625 million francs. Production is
estimated at about 300,000 watches a year. (Rolex is presumed
to make more than 1.2 million.) Today, Tudor watches retail
from about 1,800 francs to just over 7,000 francs—the level
where most Rolex offerings begin.
Pirson doesn’t have an office. Instead he works from the
center of a large boardroom table surrounded by colleagues.
He’s reluctant to be photographed without his team members
and follows Tudor’s policy to not discuss specific sales or pro-
duction figures for the closely held company, which is owned
by the same charitable Swiss trust foundation as Rolex.
Rolex doesn’t disclose any of its financial or production fig-
ures either, leaving analysts to estimate its performance based
on export data and industry sources. Rolex Chief
Executive Officer Jean-Frédéric Dufour, who also
heads Tudor’s board, has never given an inter-
view about the famous brand.
While discreet on particulars, Pirson is
willing to discuss Tudor’s performance and
strategy, which underscores its new confi-
dence—and autonomy. He confirms sales
enjoyed a growth spurt before flattening in
2023 amid an industry slowdown. Before that,
they’d increased by double digits for more
than half a decade, he says. The staff has like-
wise grown.
Tudor timepieces used to be assembled at Rolex
facilities in Geneva. That ended last year when the
Black Bay 54
brand opened an automated manufacturing facil-
ity in the Swiss horology hub of Le Locle, about 100 kilometers
(62 miles) north in the Jura Mountains, adding 150 workers.
Next door is the Kenissi SA watch movement factory, with
120 workers, which Tudor founded and in which it owns an
80% stake. (Fashion brand Chanel owns the remaining 20%.)
Kenissi supplies movements to companies including Breitling,
Norqain and TAG Heuer. It also supplies Tudor, of course,
which allows the brand to say some of its movements are
designed and manufactured “in-house,” a distinction tradi-
tionally made only by higher-priced marques, including Rolex.
As Tudor has fought to keep prices in check, many rivals
have gone higher. Breitling, IWC Schaffhausen, Omega and
March 25, 2024
even budget-focused TAG Heuer increased
their average prices in recent years to boost
margins and revenue as they chase Rolex up
the value chain.
With Tudor defending below, Rolex
has had the space to strive higher and
take aim at loftier watchmakers such as
Audemars Piguet and Patek Philippe, says
industry tastemaker Ben Clymer, founder of
Hodinkee Inc., the US online watch magazine
publisher and retailer. “By Tudor swinging up,”
he says, “Rolex doesn’t have to swing down.”
Pelagos FXD
Rolex’s logo, internationally known as an
identifier of success, is a crown. Tudor, regarded as Rolex’s
defender, bears the symbol of a battle-ready shield. “The shield
protects the crown,” Rolex executives used to say, according
to documents in the company archives.
In 2021, Tudor produced its first watch with the Swiss
Federal Institute of Metrology Metas certification. The
government-monitored testing process demands top levels
of water resistance, timing accuracy, power reserve and the
ability to withstand magnetic forces. Metas certification has
been most closely associated with Swatch Group Ltd.’s Omega
brand, whose dive watches sell at higher prices.
“When Tudor adopted Metas chronometer certification
for some of its models, it put the crosshairs on Omega,” says 67
Brendan Cunningham, a professor of economics and finance
at Eastern Connecticut State University and author of Selling
the Crown: The Secret History of Marketing Rolex.
Where Rolex is closed and silent, Tudor is quicker to tell its
own story. The brand participates in industry events where
the crown is absent: Tudor models have won prizes for five
years straight at the Grand Prix d’Horlogerie de Genève,
an annual celebration of the year’s top watches.
Rolex surprised with its first titanium model last year,
yet Tudor could say it had worked with the metal for
more than 10 years. And while Rolex doesn’t offer watches
in cases made of ceramic, silver or bronze, Tudor does.
The brand is “a bit more modern and rock ’n’ roll,” says
Vontobel’s Bertschy. While Rolex’s best-known testimonee is
retired Swiss tennis legend Roger Federer, Tudor ambas-
sadors have included Lady Gaga, Tiger Woods and David
Beckham, who wore Tudors throughout his hit 2023 Netflix
docuseries. With sporting sponsorships, Tudor is starting to
play in the same rarefied arenas as Rolex. Once relegated to
rough-and-tumble pursuits such as rugby, ice hockey, cycling
and surfing, it’s now sponsoring a Red Bull racing yacht and
a Formula One team.
Operationally, one of the last remaining links between
Tudor and its big sibling is in exports from Geneva: It still
benefits from sharing trucks, trains, ships and planes with
Rolex to reduce costs and environmental impact, according
to Pirson. That’s one of the reasons it’s still so close with the
crown headquarters—at least for the time being. “We really
live autonomously,” he says. <BW>
 FOOD Bloomberg Pursuits March 25, 2024

Sweet
Of the
Moment
Previously unattainable
Japanese fruit can now
be delivered to your
door. By Kat Odell
Photographs by
Joanna McClure
What does a $120 melon taste like?
To find out, you used to have to fly
to Japan. Now, Americans can stay home
and experience what many believe
is one of the best pieces of fruit in
68 the world.
For the first time, Japanese-grown
produce, such as strawberries and mel-
ons, is being shipped direct to US con-
sumers through Ikigai Fruits, a new
online retailer for a collective of small
farmers across Japan.
The effort underscores the coun-
try’s attempt to expand the consumer
A Shizuoka crown melon with Awayuki and Pearl White strawberries
base outside Japan and eventually
entice more people in the country to Prices range from $89 for about high-level omakase meal—typically train
grow produce. Its agriculture industry 1 pound of vibrant pink Kotoka straw- for about two years before they can
is declining, as younger generations berries to as much as $780 for three become independent and are known
turn away from farming and businesses miniboxes that hold approximately to massage their fruit. They also prune
close. In 2020 the industry was valued nine Kotokas, light pink Awayukis and their plants so each one produces a sin-
at 8.9 trillion yen ($60 billion); by 2050 pale-colored Pearl Whites each. gle melon, rather than the usual eight
it’s expected to be less than half that, The hefty price tag reflects the or more. The technique is known as
according to a report by the Mitsubishi obsessive ways the fruit is grown and ichiboku ikka, which translates to “one
Research Institute. “Domestic con- harvested. It’s an extension of Japan’s tree, one fruit.” The scant output concen-
sumption of luxury Japanese fruit is shokunin culture, in which artisans trates the nutrients into an explosively
shrinking, so the Japanese govern- spend their lives mastering a craft such sweet, intensely flavored confection that
ment is stimulating the exports,” says as making furniture or cooking ramen. can get very expensive: In 2019 a pair of
Takahiro Hiraishi, a food consultant (In the documentary Jiro Dreams of Sushi, Yubari King melons were auctioned off
who works with local authorities on which follows master Jiro Ono, aspir- for the equivalent of $45,000.
native products. ing chefs famously spend the first three The country even has a national
Ikigai is exporting three kinds of years of a decade-long apprenticeship grading system for fruits, based on size,
fruit: strawberries, melons and, when just learning how to cook rice.) shape, sugar content and related cri-
they’re in season, satsuma mandarins. Japanese farmers dedicated to grow- teria. And prefectures have their own
The company plans to add other fruits ing crown melons—the electric-green- unique scoring structures. In Shizuoka,
to the seasonally available options. fleshed fruit that’s often the finale of a on Japan’s southern coast, the highest
FOOD Bloomberg Pursuits March 25, 2024

score a muskmelon—the overarching to get from the farm into the hands of right temperature and humidity, and a
species of typically sweet-fleshed mel- US consumers. combination of farmers, bees and robots
ons such as cantaloupe and honeydew— Top-quality, high-priced Japanese- to monitor it all. The company sells a
can receive is designated as Fuji: Think style fruit isn’t totally foreign to New 4.2-ounce pack of its sweet, low-acid,
of it as a Michelin three-star rating Yorkers. Inspired by the premium pink Omakase strawberries for $10 to
for fruit. Only about 1 in 1,000 mel- strawberries he experienced growing $15—about $1 each.
ons earns this designation, which up in Japan, Hiroki Kogaco co-founded Japan isn’t the only country seeing
usually leads to a price of more than the vertical strawberry farm Oishii in growth in America’s luxury fruit mar-
30,000 yen. Kearny, New Jersey, in 2017. He embraces ket. South Korea’s greenhouse-grown
Strawberries can be even trickier. Japanese fruit farmers’ practices to rep- On Berries hit the US East Coast in
They’re notoriously sensitive to sun- licate a “perfect day” for a strawberry January with a plump and crisp variety
light, heat, dry air and pests, which is plant, using LED lights for the exact of strawberry called Gold Berry. Pastry
why farmers are constantly adjusting amount of light, air conditioners for the chef Eunji Lee of New York’s French-
their growing environment Korean dessert shop Lysée,
From top: Kotoka, Awayuki and Pearl White strawberries
in controlled greenhouses. who was the first to put it
The timing of the harvest is on the menu, describes it as
the key to sweetness: The lon- having a “candylike sweet-
ger strawberries remain on ness,” in addition to its bal-
their stems, the sweeter they anced acidity. At Manhattan’s
become, as photosynthesis haute Korean restaurant bōm,
produces more glucose. pastry chef Celia Lee is using
But picking a fully ripe On Berries three ways in one
strawberry makes it more dessert: fresh, blended into
vulnerable to damage during cream and frozen into sorbet.
transportation. Every piece On Berries co-founder
is inspected thoroughly, Richard Kang sells packs 69
weighed and c arefully that hold anywhere from
wrapped in custom packag- 8 to 15 strawberries for $25
ing. Even the smallest pin- in the Washington, DC, area.
prick can result in mold. To expand retail distribu-
Asayama Haruyuki, direc- tion, he’s raising the brand’s
tor of Ikigai, says it’s been a awareness by collaborating
“big challenge” logistically to with other chefs.
ship delicate, valuable fruits These costs might seem
to the US while maintaining high when local grocery stores
freshness. The produce is sell boxes of Driscoll’s straw-
packed in individual boxes berries for $6. But not if you
with ice packs on refrigerated really value the joy of eating
planes meant specifically outrageously flavorful, exqui-
to transport fruit. It typi- sitely gorgeous fruit—even
cally takes one to two weeks when it’s out of season.

Where to Get a Rare-Fruit Fix

Oishii
The New Jersey fruit farmer introduced
premium Japanese-style strawberries to
the Big Apple in 2017. Its Omakase Berry is
grown in the world’s largest indoor vertical
strawberry farm and has become a beloved
ingredient among Michelin-starred chefs.
The brand also sells tart, crisp-textured
Koyo berries and Rubī cherry tomatoes,
prized for their sweetness. Home cooks
(and strawberry enthusiasts) can score
trays of the berries through major grocery
retailers such as FreshDirect.
Mogmog
Two-year-old Mogmog—a postage-stamp-
size artisanal Japanese food market in New
York’s Long Island City—is the only shop
of its kind in the area, and one of the few
vendors in the entire country, that sells
premium Japanese fruit at retail. It doesn’t
offer mail order or delivery, but those who
visit in person can secure fruit-punch-
flavored Pearl White strawberries, as well
as less commonly imported Japanese fruit
including rainbow kiwis and pears when
in season.
On Berries
Digital grocery store Streets Market gives
residents around the DC area priority on
ordering America’s first luxury Korean
strawberries. Sustainably farmed in South
Korean greenhouses, the berries are imported
by co-founder Richard Kang in limited
amounts twice a week; they arrive carefully
packed with padding that snugly protects
each individual berry. Unlike Ikigai’s produce,
which should be eaten within 2 to 3 days,
these stay fresh for as long as a week if
stored in the refrigerator.
 TRAVEL
Palaces in the Sky
Two new spots in the heart of Dubai aim to lure travelers away from the beach
with an ultraluxurious business-meets-vacation appeal. Here’s how the
Lana from the Dorchester Collection and One&Only One Za’abeel stack up
By Sarah Rappaport
THE LANA
Guests arrive at the 30-story Foster + Partners-designed tower via
a driveway lined with burgundy Rolls-Royce Phantoms ready to ferry
guests around the city. White-gloved butlers in tails and top hats
70 open the glass doors. Decorated in soft colors, the 225 rooms exude
a no-expense-spared feel with mother-of-pearl vanities and marble
bathroom walls. My accommodations, a palatial 721 square feet with
a full bar, had views of the marina, downtown and the Burj Khalifa’s
nightly light show.
Service was seamless: I hadn’t finished my coffee at breakfast
before another cup appeared. Similarly, any pillows I didn’t use on
my royally plush bed were removed after the first night. But one
of the biggest joys was pressing a button to open the shades and
reveal the floor-to-ceiling view. All rooms have large outdoor spaces
with comfortable loungers, perfect for watching the sunset. It seems
every detail has been considered, from conveniently placed do-not-
disturb switches to watch winders in the wardrobes.
There are eight places to eat, including two culinary icons imported
from the Plaza Athénée in Paris: Chef Jean Imbert’s Riviera is based
on the cuisine of the French and Italian coasts (don’t miss the made-
at-the-table tuna tartare), and the open-air patisserie on the Dubai
canal is by Angelo Musa. Basque chef Martín Berasategui offers
a seafood-heavy, pork-free menu at Jara—most hotel restaurants in
Dubai are halal-friendly—which has a low-lit romantic ambiance.
The rooftop infinity pool is quickly becoming a place to see and
be seen. It was packed with locals in abayas taking selfies next to
Westerners in bikinis. Spacious daybeds have full-size pillows, and staff
hand out tiny bottles of sunscreen. The nearby High Society bar comes
alive at golden hour, and drinks are inspired by ancient sun-worshiping
cultures. I tried the Hercules Gift, with feta cheese, gin, olive oil
and thyme—a Greek salad in a glass. I know it doesn’t sound like it,
but it was light and delicious.
The Lana is the Dorchester Collection’s first new hotel in more
than a decade, and it’s succeeded in bringing the London flagship’s
omnipresent but nonintrusive style of service to Dubai. There’s even a
glitzy afternoon tea. The hotel is more buttoned-up than the One&Only,
giving it the feel of a calm vacation destination. Everything from the
airy, light-filled rooms to two almost-secret bars makes guests feel
relaxed and set apart from the city. Rooms from 3,400 dirham ($925)
Bloomberg Pursuits March 25, 2024
ONE&ONLY ONE ZA’ABEEL
This eye-popping skyscraper from Japanese architects Nikken
Sekkei is made up of two gleaming towers connected by the world’s
largest cantilever, called the Link, whose roof doubles as the United
Arab Emirates’ longest infinity pool. The 229 rooms are generous
FORM even by Dubai standards—mine wasn’t a suite and still measured
more than 900 square feet—and come with Dyson hair dryers and
heated Toto toilets. Jean-Michel Gathy’s interiors nod to the desert
with gold and sand tones.
As in other Kerzner properties, every staff member you pass places
their right hand on their heart and bows forward in greeting, which took
some getting used to. Guests have access to a host team on WhatsApp
who’ll make restaurant reservations or run you up a bottle opener. But
FUNCTION getting around such a massive building can be a chore: My room was on
the 47th floor, which meant I had to ride an elevator up to 53, then down
to 25 for dinner. Staff are posted at each elevator bank and will escort
you where you need to go, but I did spend a lot of time waiting.
Gastronomy is where the One Za’abeel really shines. The 11 options
are mostly in the Link, which feels like the world’s fanciest food court.
A tasting menu at La Dame de Pic features Anne-Sophie Pic’s famous
FOOD bee pollen pasta, and there’s an ornate nonalcoholic drinks pairing,
too. More casual kebabs and baklava are at Arrazuna. At DuangDy, the
perfectly spiced Thai red curry went hand in hand with a rum cocktail
made with pineapple, chile jam and a drop of fish sauce.
There are two pools: the Link’s adults-only infinity one, with a party
crowd, and a family-friendly Balinese-inspired oasis, with lush tropical
foliage and a swim-up bar. The Clinique La Prairie spa features a
longevity hub with brain function tests and IV drips, along with
AMENITIES cocoonlike massage treatment rooms. When restorative bliss isn’t
what you’re after, dress to impress and hold court with an oolong old-
fashioned on velvet banquettes in the darkly lit Sphere bar. The DJs
at the Tapasake bar blast tunes into the wee hours.
The restaurants are world-class, the pools are alternatively serene and
scene-y, and the hotel is already popular for business: Breakfast was
COURTESY COMPANIES
swarmed with people in meetings, which gave the One Za’abeel a
SCRATCHPAD jolt of local energy. But that also meant I felt slightly uncomfortable
making the long trek between the pools and my room in a swimsuit
and cover-up. Staff kept referring to it as a “vertical resort,” but it could
stand to focus on one type of suit or the other. Rooms from 2,900 dirham
THE ONE Bloomberg Pursuits March 25, 2024

It’s Curtains for Dust Mites

Sure, the Izzi Plus steamer can remove wrinkles from clothes, but its best trick
goes much deeper. By Matthew Kronsberg Photograph by Takamasa Ota

It sounds like the premise of a

THE CASE
horror movie: Even deep under
Laurastar’s irons and steam
the covers, you never truly
generators have been fashion-
sleep alone. A typical mattress
industry fixtures since the 1980s,
may contain between 100,000
and they’ve earned a reputation
and 1 million living dust mites.
for being as meticulously made—
If that’s the sort of thing that
and expensive—as the couture
keeps you up at night, the $999
clothing they’re entrusted with.
Izzi Plus hygienic steamer will
The Izzi Plus stands about 18 in
put those fears to rest. Made
tall and weighs 11 lbs, with a
by Swiss housewares company
34-oz removable water tank that’s
Laurastar and released to the US
big enough for almost any task.
market in 2023, the 1,600-watt
Controls are simple: There’s a
device blasts out a jet of steam
power button on the base and a
heated to 302F at almost
thumb-activated trigger on the 71
65 mph. The superheated dry,
steamer head at the end of its
microfine steam is sufficient
6.4-foot-long cloth-covered hose.
to kill 100% of dust mites, bed
Included are two plastic guards,
bugs and clothes moths through
one for textiles and another for
fibers and across surfaces. This
hard surfaces. But perhaps my
ability to deep-clean without
favorite feature was the single
chemicals almost overshadows
stylish silver mitten that protects
its talent for smoothing
your hand should it get in the
wrinkled clothing.
steam’s path while smoothing
a shirt or sterilizing the fur of a
THE COMPETITION stuffed animal, making it a happy
• The 1,000W, $41 Bissell Steam ending for all but the creepy-
Shot handheld steam cleaner crawlies. $999; laurastarus.com
and sanitizer is about the size
of a teakettle. It makes the most
of its 6.6-ounce capacity with a
useful collection of accessories,
including window and grout
cleaning attachments.
• Dupray’s 1,450W, $350 home
steam cleaner features adjustable
steam pressure—as much as
46 pounds per square inch or
3.2 bars. Its 1-liter tank provides
approximately 50 minutes of
cleaning power.
• With a heat-up time of
only 40 seconds, the $230
Kärcher SC 3 Easyfix is perfect
for quick cleanups. Along with
a suite of accessories, it comes
with a safety lock on the handle.
 ◼ LAST THING

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The way Americans feel about the economy is now largely
A Good Economy? determined by party affiliation. During Donald Trump’s
administration, consumer sentiment plunged among Democrats
Depends If You Lean and surged among Republicans. When Joe Biden was elected,
opinions reversed virtually overnight, despite little empirical
Red or Blue change in the economy. This partisan split far exceeds
differences by income, age and education, and it persists
despite historic lows in unemployment and easing inflation.
�Dorothy Gambrell and Laura Bliss

Democrats and Republicans largely And while consumer sentiment used to be a good
agree: The economy is America’s main predictor of who’d win the White House—incumbent
policy concern. party or not—that’s no longer true.

Share of Americans who say the Americans who say Index of consumer sentiment in November of presidential In aggregate
following should be a top priority for the the economy should election years
1952 2000
president and Congress in 2024 be a top priority
● Incumbent party wins ● Other party wins to 1996 to 2020
① Strengthening economy 73%
② Defending against terrorism 63%
100
③ Reducing money’s
influence in politics 62% 63%
91
④ Reducing health-care costs 60%
Democrat or lean
⑤ Improving education 60% Democratic
⑥ Making Social Security
financially sound 60%
Eisenhower
Eisenhower

G. W. Bush
G. W. Bush
⑦ Reducing crime 58%
Kennedy
Johnson

72
Reagan
Reagan

Obama
Obama
Clinton
Clinton

⑧ Dealing with immigration 57%

Carter

Trump
84%

Biden
Nixon
Nixon

Bush

⑨ Reducing availability 60
of illegal drugs 55% Republican or lean
Republican
⑩ Reducing the budget deficit 54%
1952 1980 2000 2020

Until the late 1990s “there were consensus opinions about the economy, and there were
data points that were trusted,” says Lincoln Mitchell, a political scientist at Columbia
University. Now “people are going to believe what they want.”

Difference between current consumer sentiment among all respondents and respondents by political party
Democrats Republicans

Printed in the U.S.A. CPPAP NUMBER 0414N68830

▲ More positive than overall +20

+10

Overall index

-10

-20
▼ Less positive than overall

9/2006 11/2008 11/2012 11/2016 11/2020 2/2024

Obama elected Trump elected Biden elected

DATA: PEW RESEARCH CENTER JANUARY 2024 SURVEY OF 5,140 ADULTS, UNIVERSITY OF MICHIGAN CONSUMER SENTIMENT INDEX
 Boring gets a bad rap. Boring may be a square, but boring
matters. Boring is the first step in any bold venture. Boring
calculus straps bold to a rocket and hurtles it into space.
Boring is the foundation for anything exciting we do. Boring
is necessary for unboring to be born. Boring is smart and
steady. Boring does the math. Boring makes the plans.
Boring reads annual reports for fun. Boring may play it safe,
but is that a bad thing? Boring is what the world needs.
Boring is exactly what you want in a bank. Boring isn’t sexy
or trying to be cool. Boring doesn’t take unnecessary risks
with customers’ money. Boring is an incredibly valuable way
of thinking. Boring makes anniversaries in Bora Bora happen.
Boring turns startups into companies people have actually
heard of. Boring builds communities that thrive. Boring put
a little aside for your son’s fifth year of college. Boring had a
feeling about him. Boring is there when you need it. Boring
may sound repetitive but only because it needs to be said.
Boring knows the simplest answer is usually the smartest one.
Boring may be a square, but that’s what makes boring brilliant.

Brilliantly Boring since 1865 is a service mark of The PNC Financial Services Group, Inc. PNC Bank, National Association. Member FDIC.
©2024 The PNC Financial Services Group, Inc. All rights reserved.