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Good morning.
David McKay, CEO of Royal Bank of Canada, is one of a growing group of corporate leaders who recognize that workforce development is one of the defining challenges of our time. McKay is chairing a group of Canadian business leaders who are working with the government to give 150,000 young people a year the opportunity to participate in paid co-op or apprenticeship work programs, and develop the skills needed for the future workforce.
“I started as a co-op student myself,” McKay told me during a visit to Fortune’s offices yesterday. “I was from a low income family and studying at the University of Waterloo to be a coder.” The job gave him the opportunity to move from coding to management, and ultimately become CEO of one of the world’s largest banks, with a market cap of over $100 billion. Such entry level job opportunities “are the great democratizer.”
McKay is also a staunch believer in the notion that companies have to look after stakeholders as well as their shareholders. “There is no such thing as maximizing shareholder value,” he contends. “It depends on the time frame.” Over the longer term, “you fundamentally have to buy into the fact that you are only as strong as your community.”
Also in the new Fortune offices yesterday was HPE CEO Antonio Neri, talking about how he sees the future of computing evolving, and HPE’s role in it. You can see Neri’s interview with Fortune’s Susie Gharib here and here.
More news below.
Alan Murray
alan.murray@fortune.com
@alansmurray
TOP NEWS
Political Advertising
Twitter has put a lot of pressure on Facebook by banning political advertising, as its larger rival is loath to do. CEO Jack Dorsey: "It's not credible for us to say: ‘We’re working hard to stop people from gaming our systems to spread misleading info, but if someone pays us to target and force people to see their political ad…well...they can say whatever they want!'" Not difficult to see who he's referring to there. Fortune
Libra Blow
Speaking of Facebook-unfriendly measures, the governments of the EU are reportedly preparing to announce that they reserve the right to "impede" cryptocurrencies such as the Facebook-helmed Libra. A draft document reads: "Our common objective is to ensure that these initiatives do not undermine our existing financial and monetary order as well as our monetary sovereignty." Politico
Apple Revenues
iPhone sales may be down 9.2% but Apple's revenues are up 1.8%, largely thanks to services and wearables such as the Apple Watch and AirPods earbuds. On a side note, figures released today by analysts at IHS Markit showed 1.2% growth in smartphone shipments last quarter—that's the first year-on-year growth in shipments since the first quarter of 2018, and Huawei seems to be the main driver. Wall Street Journal
Fiat-Peugeot
Fiat Chrysler and Peugeot-maker PSA Group have announced their planned merger, a 50-50 share swap. If it all goes ahead, the CEO will be Peugeot's Carlos Tavares, while Fiat Chrysler's John Elkann becomes chairman. The French government seems to be along for the ride this time, unlike with the mooted Fiat Chrysler-Renault merger. Bloomberg
AROUND THE WATER COOLER
Fed Rates
The Federal Reserve cut interest rates by a quarter point yesterday, the third cut since July. Fed Chair Jerome Powell blamed lackluster business investment for the weakening economy; consumer spending is doing just fine. What's next? A pause. Maybe. CNBC
Boeing Cracks
Boeing's 737 nightmare continues: this time it's the 737NG (the predecessor to the troubled 737 Max), one of which has been grounded by Australian flag carrier Qantas due to a worrisome crack in its "pickle fork." Boeing had already warned that the part, which helps connect the wing and fuselage, might be prone to cracking. Australia's aircraft engineers association has now called on Qantas to ground all 33 of its 737NG planes. Reuters reports that Boeing has now grounded 50 of the aircraft around the world. Guardian
Housing Bubbles
UBS figures show that housing bubbles in some of the world's most expensive cities may be due to burst soon. Which cities? Well, Munich, Paris and Toronto are some examples, but there are plenty more. Fortune
Money Laundering
You may have recently noticed a string of scandals around European banks not stopping money-laundering through their channels. So have Europe's finance ministers, who are now contemplating the establishment of a new central authority to crack down on the practice. Financial Times
This edition of CEO Daily was edited by David Meyer. Find previous editions here, and sign up for other Fortune newsletters here.
