Economy Commentator

The EpiPen controversy does not look like it’s going to die anytime soon. The most recent development is that 20 US senators have voiced their worries to the chief executive of Mylan NV about the exorbitant cost. They have called it “exorbitantly expensive.”

As the senators wrote, “Insurance companies, the government and employers still bear the burden of these excessive prices. In turn, those costs are eventually passed on to consumers in the form of higher premiums.”

Mylan has said they plan to launch the first generic version of the EpiPen for $300, which is half of the price of the branded product. This is their second step to try to counter the backlash they’ve received for their pricing.

In response to the recent letter, Mylan spokeswoman Lauren Kashtan said “We have acknowledged receipt of letters from congressional offices and intend to respond to them.”

Mylan has defended their high price, explaining that they spent hundreds of millions of dollars trying to improve the produce since they acquired it in 2007.

Signatories on the letter include Senator Patrick Leahy, Barbara Boxer, Dick Durbin, Jack Reed, Sheldon Whitehouse, Sherrod Brown and others.

Porsche is raising the number of jobs that it will be offering, as they set their sites on the electric car market. They are about to unroll their first all-electric sports car and there will be more than 1400 more jobs for these rolls. Over 1200 of the new jobs will at the Volkwagen-owned brand’s base in Zuffenhausen. Porsche is building a paint shop and also an assembly line for their battery-powered Mission E. They hope to have the new items built by the end of the decade.

Porsche will also be increasing their apprenticeships to 220 over the 150 they currently have.

 

 

 

On Friday, California Governor Jerry Brown signed a collection of gun control bills that outlaw high-capacity ammunition magazines and that expand the definition of what assault weapons are prohibited. The Democrats in the legislature sought to rush through these measures before their summer break.

California is already a state with some of the toughest gun control laws in the country. As Brown said during the signing,

“My goal in signing these bills is to enhance public safety by tightening our existing laws in a responsible and focused manner, while protecting the rights of law-abiding gun owners.”

The bills that Brown signed ban bullet buttons, which allow the user to quickly change the magazine of a military-style weapon. The bills also require background checks for those purchasing ammunition.

Brown also used this time to veto some bills including one that would have meant that co-workers, educators and mental health professionals can’t request a restraining order that would forbid people who are deemed dangerous from owning guns.

Some, of course, are furious with the steps that Brown has taken, and are calling the bills “Gunpocalypse.” As Craig DeLuz, the spokesman for the Firearms Policy Coalition said,

“The California Legislature showed their true faces today. They abused the legislative process to enact their depraved anti-civil rights agenda.”

Yesterday, Daimler Chief Executive Dieter Zetsche and Uber Chief Executive Travis Kalanick met on stage at Axel Springer NOAH. It was a two-day conference in Berlin that included venture capitalists and technology companies.

As Uber’s Kalanick said, “Cars are not going away soon and companies like Uber are not going to be making them.”

Zetsche said, “We are competitors, of course. There might be many areas where we are competitors in the future,” but then he added that they are also friends.

Uber’s private market valuation has recently soared for a number of reasons. They just announced a $3.5 billion investment by a Saudi Arabian sovereign wealth fund and they have partnered with automaker Toyota Motor Corp.

When asked if the two would like to create a partnership with Daimler considering a stake in Uber, they explained that this is not in the plans.

Uber just entered its 467^th city in Accra, Ghana. When asked about profitability and going public, Kalanick said, “We are going to IPO as late as possible.”

It’s no surprise that Silicon Valley wouldn’t necessarily be on Donald Trump’s side. And that was proven, yet again, this week when Trump, in a Reuters interview, said that start-ups in technology that haven’t yet been profitable are part of a bubble in the tech industry. As Trump said, “I’m talking about companies that have never made any money, that have a bad concept and that are valued at billions of dollars, so here we go again.”

Certainly, tech watchers have been warning about this for quite a while – so Trump’s “news” wasn’t really news to them. Many took to Twitter to make fun of the presidential hopeful. As Marc Andreessen, a general partner at the prominent venture capital firm Andreessen Horowitz, mockingly said, “FINALLY someone calls it out.”

As Trump said in the interview, “You have a stock market that is very strange. You look at some of these tech stocks that are so, so weak as a concept and a company, and they’re selling for so much money. And I would have said can that ever happen again? I think that could happen again.”

Vivek Wadhwa, an entrepreneur and Stanford University fellow, told Reuters, “So far he has been saying dumb things but they seem to be getting dumber and dumber.

Halliburton C. and Baker Hughes Inc. have thrown in the towel for their $28 billion merger deal after opposition from US and European antitrust regulators. The agreement would have brought together the number 2 a nd 3 oil services companies, but it worried many that it would have resulted in higher prices in the sector. As Dave Lesar, chief executive of Halliburton said, “Challenges in obtaining remaining regulatory approvals and general industry conditions that severely damaged deal economics led to the conclusion that termination is the best course of action.”

Halliburton will now have to pay Baker Hughes a $3.5 billion breakup fee by Wednesday as a result of the end of the deal.

As U.S. Attorney General Loretta Lynch said in a statement on Sunday, “The companies’ decision to abandon this transaction – which would have left many oilfield service markets in the hands of a duopoly – is a victory for the U.S. economy and for all Americans.”

Read more about the situation and the feelings on both sides with the full article here.

 

Solar energy giant SunEdison Inc. was growing by leaps and bounds until recently. Now, many of their projects are in danger and they are looking at bankruptcy. One of the solar plants now in jeopardy is one in central Texas. SunEdison was initially planning to self-finance the project, but will now need to make alternative funding arrangements.

While SunEdison won’t discuss its unfinished deals, company releases and news reports suggest that the company has many projects in development which range from massive power plants to smaller rooftop projects.

SunEdison was, until recently, the nation’s fastest growing renewable energy developer. They are now, however, $12 billion in debt. Their shares have fallen 98% in the last 12 months.

Learn more about the situation and what the future may bring for SunEdison.

 

With Obama’s upcoming visit to Havana, a number of companies are trying to complete deals with Cuba. This includes AT&T Inc, Starwood Hotels & Resorts Worldwide Inc., and Marriott International Inc.

This will be the first visit to Cuba by a US president in almost 90 years. AT&T is working to complete a mobile communications agreement with Cuba’s telecoms Etecas. Starwood says that it “has applied for authorization from the U.S. Treasury Department to operate hotels in Cuba. We see many opportunities for the expansion of our brands into Cuba at this inflection point, and look forward to building long-term relationships and welcoming travelers into our hotels in this dynamic market.”

The Marriott spokesman Thomas Marder said, “We are optimistic that we are going to get a green light soon from the U.S. government to have hotels under the Marriott flag in Cuba.”

Certainly, other companies are dabbling in the idea of doing business with Cuba, but many are still wary of the half-century old embargo and the Cuban government’s failure to enact economic reforms of any significance.

Obama has called for the lifting of the embargo but this can only be done through Congress, and the Republicans have said they will not be doing so.