DealBook: A Failure of Policy and Planning

Good morning. The goal of “opening up” the U.S. economy by April 12 didn’t last long — social-distancing guidelines have been extended to April 30. (Was this email forwarded to you? Sign up here.)

The crisis in manufacturing

President Trump took office promising a renaissance in manufacturing. But when the coronavirus crisis required ramping factories to make ventilators, “the White House’s ability to gather the power of American industry crumpled,” the NYT’s David Sanger and Maggie Haberman write.

Automakers have retooled plants to build ventilators, but received mixed messages from the administration, which last week invoked emergency powers to compel the production of the lifesaving machines. Mr. Trump criticized G.M. and Ford for perceived delays on Friday, before praising them on Sunday.

• G.M. partnered with Ventec, a ventilator specialist, to accelerate production by using the carmaker’s plant in Indiana. The two were deep in round-the-clock preparations when Mr. Trump accused the carmaker’s C.E.O., Mary Barra, of “wasting time.”

• Worry over getting on the president’s bad side, the NYT’s Neal Boudette and Andrew Jacobs report, has made other executives think twice about volunteering their resources “for fear of ending up becoming targets for Mr. Trump as Ms. Barra had.”

This isn’t a uniquely American problem. The British government’s ventilator-purchase plans are also in disarray. The C.E.O. of Germany’s Drägerwerk, one of the world’s largest ventilator manufacturers, told the FT that he was “skeptical” of non-specialists’ ability to ramp up production of the machines. He also worries about a shortage of supplies as demand soars around the world.

• When the crisis subsides, the scramble to build ventilators will provide plenty of material for studies about how to better align public policy with corporate planning.

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Today’s DealBook Briefing was written by Andrew Ross Sorkin in Connecticut and Michael J. de la Merced and Jason Karaian in London.

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Corporate America lobbies for favors in coronavirus rescue

Washington is prepared to spend trillions on helping the country recover from the pandemic. That has lobbyists and influence peddlers pressing for some of the money, the NYT’s Ken Vogel writes.

• We’ve noted before how tech companies like Apple and Facebook are helping, in terms of money and supplies.

Meanwhile, big-name philanthropists shared their advice with the NYT’s Paul Sullivan. Among the
tips from donors like Mike Bloomberg and Connie Ballmer: Give to community foundations that have the expertise and resources to vet charities; act as bridges for government funding; and be flexible with your rules — this is a crisis, after all.

Wall Street loses a senior executive to the coronavirus

The investment bank Jefferies announced yesterday that its C.F.O., Peg Broadbent, died over the weekend from complications of Covid-19. He was the first senior Wall Street casualty of the coronavirus.

Mr. Broadbent, 56, had been at Jefferies since 2007, making him one of Wall Street’s longest-serving C.F.O.s. The bank’s C.E.O., Rich Handler, and president, Brian Friedman, praised him for helping to “build Jefferies from less than half its current size, and navigate through hard times and good times.”

His death highlights the importance of succession plans, Bloomberg’s Jeff Green notes. And it isn’t just C-suite positions that need consideration, Mr. Green notes: “Increasingly important are roles such as supply-chain managers, who might not have been as front-and-center in earlier plans.”

In other coronavirus news:

• Dr. Anthony Fauci, one of the top government officials leading the coronavirus response, is now a target online for the far right after he corrected some of Mr. Trump’s claims. (NYT)

• Shoppers for the delivery service Instacart plan to strike over what they say are the company’s inadequate protections for them against coronavirus infection. (NYT)

• Airlines around the world raised over $17 billion in bank financing this past week to stay alive. (Bloomberg)

The week ahead

🛍 Tuesday: Consumer confidence data for March is expected to show a big drop — but the surveys conducted by the Conference Board covered the early part of the month, before many lockdowns.

📅 Wednesday: The first of the month is when many rent payments and other bills are due. Without leeway from lenders and landlords, the squeeze on people and businesses may be too much to bear.

📄 Thursday: Initial U.S. unemployment claims set a record last week, at 3.3 million, and this week’s data is expected to be just as bad — or worse.

💊 Thursday: Walgreens reports its latest quarterly earnings, which could get a boost from shoppers stocking up on medicines and other health-related products.

📉 Friday: Monthly payrolls data for March are likely to show the first fall in jobs in nearly 10 years. But because the bulk of job losses came later in the month, it won’t reflect the full extent of the decline.

🍻 Friday: Constellation Brands, which sells Corona beer in the U.S., is expected to report a hit to earnings.

The speed read

Deals

• Activist shareholders like Elliott Management are easing up on campaigns to pressure corporate boards during the coronavirus crisis. (WSJ)

• Some big hedge funds, like D.E. Shaw and Baupost Group, are raising money again to take advantage of the market drop. (FT)

• Bankers, lawyers and consultants who specialize in financial restructuring are preparing for a surge in work. (NYT)

• Jeff Bezos’s rocket company, Blue Origin, won designation as an “essential” business from the federal government. (FT)

• Microsoft says it has seen a 775 percent increase in the use of its Azure cloud-computing service in regions that have enforced social distancing, and plans to give health care workers priority. (Microsoft)

Best of the rest

• Facebook is spending $100 million to support local journalism, via direct grants and increased advertising spending. (FB)

• Counterpoint: An argument against bailing out ad-funded media companies — and why it’s more sustainable to support a network of non-profit news outlets instead (NYT)

• A fascinating rundown of the schools of philosophical thought behind the responses to the coronavirus. (Bloomberg Opinion)

Thanks for reading. We’ll see you tomorrow.

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