Unfortunately, I was traveling yesterday and was caught up in the FAA’s ground stop, which caused over 1,200 US flights to be canceled and thousands more to be delayed. Luckily, mine was in the second category, and I’m writing this as I finally return to New York. It’s hard to know what to do about the mess of air travel, but here are a few takeaways:
— The failure of a key software system used by the FAA underscores that it’s not just Southwest that has outdated systems in desperate need of updating. Traveling Americans deserve better.
— Informed sources said that a cyber attack was not the cause of the problem. But if the software is so outdated, it’s probably also vulnerable to cyberattacks.
— Delta and United managed the shutdown better than American and Southwest. If you have a choice, it should now be clear to you which airlines you should fly.
— The FAA’s role is a reminder that the US needs a functioning federal government to keep airplanes running on time, among many other things. Stagnation and party gridlock are not good for business or the economy.
On the latter point, there are growing concerns that last week’s prolonged showdown over the election of the Speaker of the House of Representatives could lead the US to a debt-limit crisis later this year. The rule changes passed by the House after the showdown made it easier for a small group of House extremists to hold the country’s economy hostage by refusing to raise the debt limit. Interestingly, the rule changes also allow a small group of moderate members of the ROP House of Representatives to resolve such a crisis by siding with the Democrats. But the problem is that both parties are increasingly mesmerized by the small number of people who vote in primaries and have no incentive to act in the interests of the general public.
Readers of this newsletter keep advising me to stay out of politics, and most CEOs I talk to would like to do the same, but it’s hard for business to thrive in a society where politics is broken.
More news below.
Disney rejected a bid by activist investor Nelson Peltz to join its board and named Nike executive Mark Parker as its next chairman in what will look like a messy battle for middlemen and a huge headache for CEO Bob Iger. Peltz claims that Disney “went astray resulting in a rapid deterioration in its financial results.” CNBC
Microsoft is introducing a “discretionary time off” system, abandoning the previous model that gave employees four weeks off a year. The new policy allows workers to take time off as needed. With 122,000 employees in the US, Microsoft is one of the largest companies offering unlimited vacation. Wealth
Plastic is everywhere. Take it from journalist AJ Jacobs, who tried to live without it for 24 hours. His experiment required a bamboo toothbrush with boar hair bristles, DIY deodorant, and foraging for raw food. The New York Times
AROUND THE WATER COOLER
The ax has fallen on Goldman Sachs as layoffs ripple through Luisa Beltran’s company
Netflix Takes Senior Managers’ Ability to See Their Co-Workers’ Salaries by Jane Thier
From Brighter to Far Away: The Meteoric Rise of Women-Founded FMCG May Be Over as Investor Preferences Shift By Paige McGlauflin
Maybe it’s time to start ‘chaotic work’: Trey Williams, the rebellious, anti-corporate younger brother of the quiet quitter
California startup turns greenhouse gas into biodegradable plastic alternative used by Shake Shack, Nike and H&M Ian Mount
The world’s richest man, LVMH’s ‘wolf in cashmere’, has put his daughter in charge of Dior amid a furious battle to succeed Christian Hetzner
This edition of CEO Dnevnik edited by Claire Zillman.
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