Morning Brew Daily - Boeing's CEO is Out & Vending Machines Make a Comeback

Episode Date: March 26, 2024

Episode 287: Neal and Toby cover the latest tumble from Boeing…and no, it’s not another plane, thankfully. Its CEO has decided to step down after taking much heat after continued safety concerns of its planes. Then, Trump is given a lifeline on his bond payment and how his social media site is poised to take off. Next, the U.S. Supreme Court hears a case that could profoundly impact the access of one of the most popular abortion drugs in America. Meanwhile, vending machines are making a comeback fueled by side-hustlers. Also, Chick-fil-a takes back a promise in order to keep its chicken business alive. Lastly, Saudi Arabia gets a super-saiyan upgrade with the first ever Dragon Ball Z theme park. Use code MORNINGBREW50 to get 50% OFF your first Factor box at https://bit.ly/3UUZGG0 00:00 - Intro 02:00 - Boeing CEO Steps Down 06:20 - Trump Truth Social 09:55 - Mifepristone in Supreme Court 13:30 - Toby’s Trends: Vending Machines 17:30 - Chick-Fil-A Antibiotics 20:00 - Dragon Ball Z Park Get your Morning Brew Daily Merch HERE: https://shop.morningbrew.com/products/morning-brew-daily-sweatshirt?utm_medium=multimedia&utm_source=podcast&utm_campaign=mbd&utm_content=shownotes Listen to Morning Brew Daily Here: https://link.chtbl.com/MBD Watch Morning Brew Daily Here: https://www.youtube.com/@MorningBrewDailyShow Learn more about your ad choices. Visit megaphone.fm/adchoices

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pwc.com slash U.S. slash brew AI. That's pwc.com slash us slash brew AI. Good morning, Brew Daily show. I'm Neil Fryman. And I'm Toby Howell. Today, Dave Calhoun is

Boeing, Boeing gone as the plane maker CEO. Then the DJT ticker is returning to Wall Street today as Donald Trump's True Social makes its public market debut. It's Tuesday, March 26th. Let's ride. If you are just

waking up, there's currently an emergency situation in Baltimore where a major bridge has collapsed into the water. Right around 1.30 a.m. Eastern, one of the supports of the Francis Scott Key Bridge was struck by a container ship leaving the port of Baltimore, causing the span to fall into the water. Video appeared to show cars also falling in, and there's currently a rescue operation underway to save the people who plunged into the water, which is currently at about 48 degrees Fahrenheit. A lot of attention will be paid to this bridge over the next few days and weeks. The 1.6 mile long span is part of I-695 and was opened in 1977 as an outer crossing of

Baltimore Harbor. And it's named after the guy who wrote the Star Spangled Banner. Yeah, what made this particularly harrowing is that a YouTube live streamer caught it on film. So you can literally see the moment where the bridge just totally buckles. And as you said, you can start to see cars falling in. In the short term, the priority is obviously saving anyone in the immediate area. but in the long term, it will shine a light on the country's infrastructure again, as this once again is going to put some strain on a major East Coast transit artery.

Now let's hear a quick word from our friends over at Factor. Neil, talking about Factor every morning is hard sometimes because it honestly makes me very hungry. Talking about the food itself is torture. So that means I shouldn't let you know that mushroom chicken thighs and wild rice with garlic roasted green beans is currently on their weekly menu? Neil, what the heck? I'm dying over here. Listen, I'm just trying to tell you about factors. Chef made fresh, never frozen meals like it's garlic, filet, mignon, and shrimp with

roasted broccoli, garlic chripe potatoes, and scaly and sour cream. You know what? Fine. Two can play at this game. Wouldn't you like to have a steaming helping of factors, Chimmy Cherry Ground Beef Bowl, and cauliflower rice and zucchini pepper meddley right now? Okay, point taken. You can listen to Toby and me list off delicious factor meals all morning, or you can head

to factor meals. dot com slash morning brew 50, then use code morning brew 50 to get 50% off. That's factor meals.com slash morning brew 50 with code morning brew 50 to snag a 50% discount. It's time to refresh your yard during spring backyard days at the Home Depot. Get low prices guaranteed on propane grills starting at $179, like the next grill three burner gas grill. Or get $50 off a select Weber Spirit grill and bring big flavor to your backyard. then set the scene with Hampton Bay string lights that bring it all together. Shop spring backyard days for seven days at the Home Depot.

Now through May 6th. Exclusion supplies to you home depot.com slash price match for details. Boeing CEO Dave Calhoun will soon just be Dave Calhoun after the struggling plane maker popped open the door panel and booted him from his job running the company. No one could be surprised by this. Boeing has been corporate America's punching bag ever since a panel blew out on an Alaska Airlines flight in January. and more safety issues came to late as regulators looked into its manufacturing process. And it's not just the CEO Calhoun leaving.

Boeing's cleaning house of its top ranks with the head of its commercial aircraft division, also stepping aside and its chairman not returning to his role. This is the kind of shake-up airlines. We're desperate to see from Boeing because they are madder than someone whose screen isn't working on a 12-hour flight. Boeing's problems have become their problems since they can't get enough planes from Boeing to fly all the routes they want to this year. Calhoun will stay on the job through 2024 to help train his successor, and the search is on to fix this broken company.

The search is on. It's interesting, too, because Boeing brought in Calhoun four years ago to kind of steady the ship through turbulent times after those two fatal 737 max crashes led to the oucing of his predecessor. And the company even lifted the mandatory retirement age to allow him to lead the company into 2028 from 65 to 70 years. So this was Dave Calhoun's ship to run, and he clearly did not run into any direction that shareholders or airline partners liked. So it's interesting to see the rise and then the fall of Dave Calhoun. Yeah, the fix appeared to be in thanks to the airlines who are Boeing's customers being extremely angry that they couldn't produce enough Boeing 737s because they've been handicapped by the FAA after all of these mishaps over the course of this year to produce. enough airlines for them. And Southwest, you know, said our profits are going to be down this year. A bunch of other airlines said, like, we don't have enough planes to file the routes we want to. They scheduled a meeting with the Boeing board and went around Dave Calhoun. They did not want

him to be there. Southwest American, United, and a bunch of other airlines were like, we need to meet with the board. And Dave Calhoun cannot be there. And then the board was like, all right, I think this is a huge problem. Dave probably needs to go. Right. And then Ryan Air, Boeing's largest European airline customers said in a statement that it welcomes management change. So you kind of do get a sense of where these customers are at in this Dave Calhoun experiment. Analysts have also said that they might look to bring in an executive from outside. But again, that is very tough because Boeing is not an easy company to lead by any stretch of the imagination. It's an airplane manufacturer company. There's 170,000 employees. So an internal search is being conducted, but also an external

search. I don't know who steps in. Maybe you poach someone from Airbus, but there is some names float around internally as well. One of those names from outside is Larry Culp of GE. What you need here is a turnaround artist because Boeing's culture has been broken for decades. Larry Culp went into GE in 2019. GE is another American corporate giant that had fallen on a lot of hard times, huge industrial company. So he went in and has done an actually amazing job. He broke the company up into three different divisions. He paid down more than $100 billion of debt. And the All these little GE divisions are now going public and doing really well. So he is a name that has been floated as possible.

Someone who could come in who learned the aerospace industry at GE and could come in and fix Boeing. But it is not an easy job. Not an easy job. Just to put a bow tie on Dave Calhoun's tenure here. When he entered the role, shares were trading above $330. And when he's exiting or right now, they're trading out $190.00. So that alone tells you how the Dave Calhoun time at Boeing went.

move on, like a mountaineer, but laying a climber down, an appeals court has agreed to give Trump a little bit of slack in his New York fraud case. The court agreed to reduce the bond amount he owed the New York Attorney General to $175 million down from $454 million. Had the court not approved his request for a smaller bond in the fraud case, Trump could have faced a serious financial faceband because, like most people, Trump didn't really have a spare $454 million laying around. Now, has 10 days to secure the smaller bound amount, which gives them time to appeal the larger bond, a process that could take months to resolve. While all that was happening, Trump's social media company, True Social, was gearing up to hit the public markets via a SPAC merger with a blank

check acquisition company. I can't believe it's 2024, and we're still talking about SPACs, but when True Social begins trading today under the DJT ticker, it will probably go down as one of the most important SPACs yet. Let's take them one at a time, bond then SPAC, or take them both at the same time. Where do you want to start? Well, I think you can take them both at the same time because this could have been one of the worst days in former President Trump's financial histories. The process for beginning to seize his assets could have started, but it turned out to be the single greatest stay on record for his wealth because this thing happened with true social. That increased his net worth by more than $4 billion.

He's now worth $6.5 billion. And for the first time, he is among the world's wealthiest 500 people, Digital World Acquisition Corp, which is the shell company that was created to take true social public. The shares are up 185% since the start of the year, and Trump owns 60% of the stock. And so his net worth was transferred into paper holdings yesterday, and now he's super rich. Yeah, the DWAC's share price was. up around 30% yesterday.

And that is kind of a big reversal from on Friday when this merger was officially announced, the share price kind of tanked a little bit. It didn't go anywhere too down, but it more than made up for those erasers. Part of it is because that civil business fraud judgment against Trump was paused for 10 days and this smaller bond amount was. So it kind of goes hand in hand the fortunes of both of them. Because remember, Trump is maybe looking towards his stake in true social to help pay off some of those mounting legal fees, these bonds that he has to pay. Remember, I've said this multiple

times. Technically, there is a share lockup. He cannot sell any of his shares for 60 days after this goes public. But again, if you have influence over the board, which Trump obviously does, his son is on the board, as well as some of his former campaign officers. So he could change the rules a little bit. But again, you don't want to get too loose and fast with true social shares, even though it probably is held by a lot of Trump supporters, because if you start using it as your personal piggybank, then the shares will end up taking because it is now on the public markets and is subject to the whims of the shareholders. And now we've had no social media IPOs since Pinterest in 2019. And then in the past week, we've had Reddit and Truth Social go public.

Truth Social probably has a lot of convincing to do for actual public investors because it just brought in $5 million over the past. three years in revenue and it's worth $5.5 billion. Okay, next story, abortion issues are back at the Supreme Court today in a major case that could have an even bigger impact on reproductive rights than the Dobbs ruling in 2022, which overturned Roe v. Wade. I know that sounds crazy, but here's why legal experts say this is such a huge deal. This case will decide the fate of Miffa Pristone, the abortion pill that's become the most popular form of terminating a pregnancy in the U.S.

after the Supreme Court ended the federal right to an abortion. Medication abortion, which is the official term for using the pill, accounted for 63% of abortions last year, a 10 percentage point increase from the 53% in 2020. But Miffa-Pristone's availability is in doubt after a Christian conservative advocacy group challenged the process that led to its FDA approval 23 years ago, and an appeals court placed some limitations on access to the pill.

So here we are nearly two years later with a nine Supreme Court. Court justices once again hearing a case that could transform abortion access in the U.S. Yeah, just to reiterate how popular this option is, nearly two-thirds of all abortion in the U.S. health system providers are medication abortions, and also a study released this week, found that the number of women who obtained abortion pills from sources outside the U.S. health system like Miff and Pristone, more than quadrupled in the six months after the Supreme Court overturned row. So the challenge to this pill is actually a much

bigger than the pill itself. It really challenges the authority of the FDA. The FDA approved this pill back 23 years ago, and the challenges are saying that the FDA did not do a, basically skirted the rules when it approved this pill. So you have the entire pharmaceutical industry lining up behind the FDA in defense of the pill because they think that the FDA as a regulatory body is really the gold standard across the world for approving drugs. And if the regulatory power of the FDA is curtailed. It could lead to challenges against a lot of other drugs that maybe are more culturally charged that a lot of pharmaceutical companies have produced, and they're very concerned about that. Yeah, it opens up the FDA to limitless litigation is the

term I saw being thrown around because virtually anybody could bring a suit to challenge any drug approval, which is, again, not how the system is intended to work at all. And so even though, yes, this does have a lot of repercussions for reproductive rights. It does have just implications for the healthcare industry as a whole and the pharma industry as a whole, which is you're right. That's why so many kind of pharma companies are lining up saying, if we establish this president now and allow you to litigate against FDA drug approval, how are we ever going to convince investors to invest in us to work on developing new drugs if the approval process can get handicapped by the legal system? So you're right. It does have very far-reaching, wide-ranging effects.

And the FDA, of course, says this pill is safer than even Tylenol. Terminates pregnancies with a 99.6% success rate. So they put forth evidence that shows that Mitha Pristone is safe. The Supreme Court is going to rule on this end of June, early July, right in the thick of election season. So it could land like an earthquake, just like Roe did in 2022. Up next, you'll hear why vending machines are so hot right now. also learned the location of a new Dragon Ball Z theme park. Today we helped a...

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Ebbglis. Before starting Ebbglis, tell your doctor if you have a parasitic infection. Ask your doctor about Ebbglis. and visit ebglis.lid.com or call 1,800 LilyRX or 1,800 545-9709. What does a March Madness superstar in a packet of Lays potato chips have in common? They're both into vending machines. And that's what we're going to talk about today on this edition of Toby's friends, where I, a Gen Zier with my finger on the pulse of the internet. Educate Neil, my millennial co-hosts on our recent trend I've had my eye on.

Neil, one of the stars of March Madness, North Carolina State's DJ Burns, went on a podcast yesterday and told the world that he owns a couple of vending machines. And it felt like the perfect segue to talk about this growing trend of people getting into the vending machine business as a side hustle. I totally get it. The formula appears simple. Buy a vending machine for around $1,500. Stock it with product you buy in bulk from Costco, mark up the prices and watch as your

kids college funds starts to roll in. But it's not always the case because foot traffic is king and competition is fierce. So sometimes you're left with a bunch of honey buns and not much honey. According to the National Automatic Merchandising Association, America has 3 million vending machines bringing in $18.2 billion good for an average of 525 in monthly revenue per machine. Neil, what do you think of the vending machine game? Well, I certainly see the appeal. I mean, if the industry group is called the automatic merchandising association, it gets it a little bit in your mind that this is automatic money. You don't have to put in a lot of work and you just kind of refill the vending machines

every so often, and then you take out the money and cash in your bank. But I am a little skeptical because of how much chatter this has gotten online. And when you see YouTube video explainers and huge Reddit threads with this get rich, it has this very get rich quick scheme vibe to it. and so I'm a little skeptical that it is as easy to get a passive income from owning a bunch of vending machines as these people make it seem. Yeah, it is definitely a game for small individual operators. More than half of operators bring in less than a million bucks a year according to that same publication. And then many individuals also have other jobs.

You're right. This is a side hustle. It is huge on social media, like you said, between 2019 and 2023, the number of posts or comments mentioning passive income and vending machines more than tripled on X, 6xed on Instagram and increased 75% on Google search. Everyone wants that get out of the 9 to 5 life hack. You start to see that this is a saturated space when you realize that there are vending machine operators selling courses on how to start up your vending machine business. So you're definitely right that it has hit kind of that point of saturation where if you got people selling courses about the side hustle as a side hustle, you're inside

hustle exception right there. I just don't know how you, where do you find location? I mean, do you have to pay locations to put your vending machine in? I just don't quite understand how that works. Yeah, a lot of it is you just go to a gym operator, for instance, say, hey, I'm looking, I would like to negotiate a deal to put my vending machine in your place. Something that the, the courses kind of say is that if you're just starting out. Oh, so you've taken one. No, I was just doing my research here, but they say lie about your pedigree, essentially,

because if you go to a gym offering and say, hey, this is my first vending machine. No one's going to say yes to that. So say, oh, yeah, I've been operating a couple for a while now. Then they might be more on board to it. So you're right. It's got all those tingees of maybe a shady side hustle. But some people really enjoy it and make a good profit off of it. And also seeing DJ Burns, the way he was speaking about it, was like, hey, I know my basketball

career is not going to end forever. A guy sat me down and said, hey, this is a good side hustle you can do. And credit to him for actually taking the action, buying the machines. He owns two of them. So hopefully he's getting that nice. Passive income stream. In the course, what did they say was the most lucrative place to place a betting machine? I mean, anywhere with high foot track it.

So a lot of like laundromats are a good one. Jims are a good one. But it is. Yeah, foot traffic is king. All right. At Chick-fil-A, there are few surprises. You know you're going to get a top-tier sandwich. You know you can't show up on Sunday.

And you know the chicken won't have any antibiotics. But about that last one, not so much anymore. The fast food chain is backtracking from its years-long pledge to include no antibiotics ever in its chicken because of what it says are supply shortages of chicken without antibiotics. Instead, Chick-Chic-Fillay will move to a common standard known as no antibiotics important to human medicine, abbreviated as N-A-I-H-M, which limits the use of animal antibiotics to cases where the chickens are actually sick, so there could potentially be some antibiotics in your sandwich alongside the pickle. The poultry industry has had a love-hate relationship with animal antibiotics,

As new information has come out about their impact on human health, antibiotics were used widely in animals until the 2010s when chicken producers moved away from them. Now, though, Chick-fil-A and others are playing a reverse card on their reverse card because there's just not enough high-quality antibiotic-free chicken available. Yeah, it's a supply and demand issue, but I just want to dig into why antibiotics in animals is an issue for humans at all because technically it can help create antibiotic-resistant bacteria in humans. According to the CDC, more than 2.8 million people develop an antibiotic-resistant infection

each year. In more than 600,000 of those cases, that infection came from something in individual eight. So again, that's why you don't want to pump animals full of these antibiotics, because if you are consuming them, it leads to bacteria saying, like, okay, I can resist these antibiotics that I'm eating, and you want to save your antibiotic usage for times when you really need it. So that's kind of where the whole movement stemmed from. And in the particular industry, it seems like Tyson food seems to be the pioneer here of moving away from antibiotics because they supplied 20% of all chicken in the U.S.

So as Tyson goes, so goes the rest of the industry because they're supplying so much of the chicken. They had no antibiotics rule since 2015. But last year, they rolled it back and moved to this new standard, which I'm going to forget all those letters. But no. No antibiotics for human that are important in human medicine. They went to that standard. Burger King now is at that standard. McDonald's also and now Chick-fil-A, so it appears that they've reached this little middle ground across the industry.

I think part of the reason why these producers in Chick-Flea feel like they can get away with justifying the switches, because remember, avian flu just kind of wiped out the industry last year. That was when egg prices went parabolic. So I think their farmers were using this as a chance to say, like, hey, we need to have these disease-resistant chickens, which is very ironic, though, because avian flu is not treatable by antibiotics at all. So it might have been this moment where they were, they're using maybe the court of public

opinion to say, remember when egg prices went that high, we need to have more just bacteria-resistant chickens. So that's why they're kind of reversing on that standard for a while. It's a little bit of speculation, but I do think that's one of the reasons because last year was not a good year for the poultry industry at all. Let's move on. If you grew up dreaming of going Super Saiyan, better look into flights to Kadia because the first Dragon Ball Z theme park is coming to Saudi Arabia. The park will be 5.3 million square feet, features seven different areas inspired by the original anime series,

more than 30 different rise in a bunch of hotels and restaurants. Why Saudi Arabia? It's part of the seemingly never-ending quest for the oil dependent nation to diversify its economy. away from relying on fossil fuels, and the Japanese producer of Dragon Ball signed off on the strategic partnership. This is an especially bittersweet announcement because it comes just weeks after the death of Dragon Ball's creator, Akira Toriyama, which caused an outpouring of love that was massive and global in scale. Neal, it's not often you get a new theme park these days, especially one based on such storied IP as this. Right, but it does make sense. I mean, Dragon Ball is one of the most popular fictional properties in the world. If you go

back to 2020, 2002 to our budding search industry, search engine industry, Dragonball was the third most popular search term on Yahoo that year. So this is an absolute massively popular franchise started in 1984 as a manga comic and then turned into an animated series that I grew up watching with all of its amazing characters and the incredible animation and obviously the fight scenes. So there's a lot of nostalgia attached to Dragon Ball. I think it's still persisted into this day. Yeah, it's become a very popular kind of target of investment for Saudi Arabia in particular. The producer of Dragon Balls is actually teaming up with the Crown Prince to create more anime series and movies. So it's not just this park.

It is expanding into a broader partnership as well. Also, let's talk about Kadiah a little bit. It is this planned multi-billion dollar city in this massive plot of land in the desert, 40-minute drive outside the capital of Radea. It's kind of Saudi Arabia's Or Rehad, sorry, it's kind of Saudi Arabia's take on these billionaire cities I've been seeing pop up every once in a while because they are trying to plan it from the ground up.

And who wouldn't want a Dragon Ball see theme park in their planned city? It's also set to have a six flags and a water park as well. So they're definitely doubling down on the amusement side of things. Right. I mean, this is Orlando on steroids, but it needs to be that because Saudi Arabia wants to have tourism account for 10% of its GDP by 2030, and I'm looking at the clock here. It's 2024. That is not a lot of time. Tourism was up 56% last year. I don't know whether the average American is going to go to

Saudi Arabia for a Dragon Ball Z theme park, but it could draw a large global audience. Yeah, that's why I don't, you said average American, but there are other countries out there, so maybe the average Japanese citizen or the average Dragon Ball Z is very large in Mexico as well. We have to say, too, that there's definitely been some pushback on the location of the theme park because, of course, of Saudi Arabia's human rights record, their attitude towards the LGBTQ community. So even though that fans of Dragon Ball Z, I was looking through some Reddit forums again, a lot of them were excited about this. The first comment that usually came up was like, why is it in Saudi Arabia itself? So Saudi Arabia clearly wants to kind of turn over this new leaf and show that we're open for tourism, but there's still going to be that fan pushback.

whenever you have a park opens there. Absolutely. All right. That is all the time we have for today's show. Have a wonderful Tuesday. We'll obviously keep very close tabs on what's going in Baltimore this morning. For any feedback, you know what to do. Right into Morning Brew Daily at Morningbrew.com.

Let's roll the credits. Emily Milliron is our executive producer. Raymond Liu is our producer. Olivia Graham is our associate producer. Yuchinawa Ogu is our technical director. Billy Minino is on audio. Hair and makeup knows that you try to guess what they're up to each. and they are flattered.

Devin Emery is our chief content officer and our show is a production of Morning Brew. Great show today, Neil. Let's run it back tomorrow. Yamava Resort and Casino at San Manuel is California's number one entertainment destination for today's superstars. Catch the Jonas Brothers return to the Yamava Theater stage

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