WSJ What’s News - Kraft Heinz Is Planning a Breakup

Episode Date: July 11, 2025

P.M. Edition for July 11. A decade after their infamous merger, Kraft Heinz is looking to split its grocery business from its faster-growing sauces and condiments business. Plus, the Trump administration turns to deregulation as a quieter way to boost economic growth. WSJ chief economics commentator Greg Ip joins to discuss how the administration is weighing costs and benefits to clear the way for innovation. And Ford Motor has recorded the most safety recalls in the first six months of 2025 than any automaker ever has in a whole calendar year. We hear from Ryan Felton, who covers automakers for the Journal, about why, and what Ford is doing about it. Alex Ossola hosts. Sign up for the WSJ's free What's News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

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A decade after an infamous merger, Kraft-Heinz eyes a breakup. Plus, the Trump administration's quietest tool for boosting economic growth might be its most powerful. Where deregulation really has an effect is where it gets out of the way of innovators and investors doing something for which there is some demand, but that demand and that supply we're not allowed to meet because there was a rule in the way. And why Ford has recorded more safety recalls this year than any automaker ever. It's Friday, July 11th.

I'm Alex Osola for The Wall Street Journal. This is the PM edition of What's News, the top headlines and business stories that move the world today. We begin this evening with some big moves in the business world. We're exclusively reporting that Kraft Heinz is preparing to break itself up,

a decade after a merger between two of the biggest names in packaged foods was orchestrated by Warren Buffett and Brazilian private equity firm 3G Capital Partners. According to people familiar with the matter, the company is planning to spin off a large chunk of its grocery business, including many Kraft products, into a new entity that could be valued at as much as $20 billion on its own.

That would leave a company housing goods such as sauces and spreads like Heinz's namesake ketchup and Dijon mustard brand Grey Poupon. The company has given priority to its faster-growing offerings like hot sauces, dressings, and condiments. The hope would be that the two separate units would be, in total total worth more than Kraft Heinz's roughly $31 billion market value. The people said that the company is still working through the details, but that a split could be finalized in the coming weeks. A Kraft Heinz spokesperson said that the company has been evaluating potential strategic transactions, as announced in May. And shareholders of Walgreens Boots Alliance have voted in favor of Sycamore Partners'

nearly $10 billion acquisition at a special meeting. The deal, which was announced in March, would allow the New York private equity firm to take Walgreens private. The drugstore chain expects the transaction to close in the third or fourth quarter of this year. Defense Secretary Pete Hegseth has ordered the removal of any policies that slow down the development and deployment of drones. That's according to a memo sent yesterday and viewed by the Wall Street Journal.

The memo builds upon executive orders signed by President Trump last month aimed at easing restrictions on U.S.-made drones and strengthening an industry that has struggled to compete with Chinese competitors. The Department of Defense plans to boost what it called a nascent US drone manufacturing base by approving hundreds of American-made products for military purchase. Analysts note that the order is expected to deliver a lift to defense technology companies specializing in drones and unmanned aerial vehicles. Shares of defense companies like Kratos Defense and Security Solutions,

Red Cat Holdings, Unusual Machines, and Zena Tech climbed higher on the news. The defense company's performance was not enough to drag major U.S. indexes higher, as President Trump's latest tariff threats have knocked stocks off yesterday's records. The Dow fell 279 points, or about 0.6%. The S&P 500 slipped about 0.3%, while the Nasdaq was down roughly 0.2%. Ford Motor has recorded more safety recalls in the first six months of 2025 than any car company ever has in an entire calendar year. Through the end of June, Ford issued 88 safety recalls, according to Federal Data.

The next closest manufacturer this year has notched 21 recalls. Since 2020, Ford has either reported the first or second most recalls in the industry. Ryan Felton covers the automotive industry for the Journal and joins me now. Ryan, what is going on? Why is Ford issuing so many recalls? Ford a few years ago under CEO Jim Farley staked out fixing quality as a key priority, catching things more proactively, more aggressively. NHTSA, which is the top auto safety regulator in Ford, reached a consent agreement last year and it basically said that Ford needed to go back and look and see if it did recalls right, basically more or less. Did they need to expand them?

And legally, if you find a safety defect, you got to report it. What stands out is just the sheer volume of them. What is Ford doing to try to decrease the number of issues that it, by its own internal systems, as you say, has identified? Ford said they hired a lot more people with the kind of technical expertise to figure out and identify problems early on. When a company launches a model,

it's known as a time where problems may arise. And in theory, their point of view is when you start catching more stuff initially, eventually that'll correspond to a smaller number of reportable defects that require a recall later on. They say they're seeing improvements on internally at the start of launch, and there's some studies that are looking at quality seems to be backing it up, but still you're seeing the result at this point, higher defect numbers. But they say that over time, that number should begin to decline as a result of these newer processes that they've implemented.

And despite that high sort of top line number of recalls, Ford is not the only automotive company that has had a lot of recalls over the past decade, right? Yeah, a decade ago, GM had in a full year something like 75, 80 recalls. Stellantis in the past couple of years, they had a year where they had over 70 recalls. And overall, the industry in the past decade, there are more recalls overall. That's for a couple of reasons. In the mid 2010s, there was a couple of big scandals involving automotive defects, involving an airbag supplier that supplied faulty

airbags to many automakers that added more scrutiny to the industry overall. And started to see some changes that led to more and more voluntary recall reporting. changes that led to more and more voluntary recall reporting. And also, NHTSA has had beefed up staff in recent years to investigate defects and catch stuff and overall the industry has been reporting more in response to a heavier enforcement activity by the regulator. That was Wall Street Journal reporter Ryan Felton. Thanks so much, Ryan. Thank you.

Well, some regulation may be heavily enforced, but the Trump administration is turning to deregulation as a tool to boost the economy. More after the break. Introducing TurboTax Business, a brand new way to file your own T2 return, all while getting help from an expert who actually knows small businesses. Got a tattoo studio? Toy store? Tiny but mighty taco stand? We've got someone who gets small business taxes inside and out. Experts are standing by to help and review while you file, so you know your returns done right. Intuit TurboTax

Business. New from TurboTax Canada. Some regional exclusions apply. Learn more at TurboTax.ca slash business tax. ["TurboTax News Theme"] Among President Trump's efforts to boost the economy, there's an approach that has flown a bit under the radar. It's deregulation. And while it may not have gotten as much attention

as tariffs or tax cuts, it may actually be more powerful. WSJ Chief Economics commentator, Greg Ip, is here to tell us more. Greg, deregulation, is it just as simple as taking rules away? Essentially, every rule tries to constrain private activity because there's something else that it's trying to achieve.

It's trying to make the environment cleaner or it's trying to reduce global warming. It's trying to make the environment cleaner, or it's trying to reduce global warming. It's trying to make cars or aircraft safer, that sort of thing. So with every rule, there's a cost and there's a benefit. And one of the questions presidents always have to ask is are the costs worth the benefits? And President Trump has taken the view

that a lot of rules that have been imposed in the past have costs that exceed their benefits. And that's a somewhat subjective choice, but it does seem likely that if you take a hard look at a lot of the rules that sort of persist, and there's a lot of them, there are literally tens of thousands of them, some of them are unnecessary. And if you carefully look at those rules, and you get rid of them, or at least dial them back, maybe you can encourage new private sector innovation and investment that makes us richer. And as I say in the column, this has an advantage over both tariffs and tax cuts. It doesn't take from one sector to give to another, which is what tariffs do, and it doesn't cost a

lot of money and pump up the deficit in the future, which is what tax cuts do. What is the Trump administration doing in terms of trying to weigh those costs and benefits in deregulating? In many cases, what you've had is that there is something called the Congressional Review Act, and under this statute, Congress can actually look back at a rule that the last president implemented and then just roll it back. But as I say in the column, cost benefit analysis is not a very satisfying way of actually determining what a rule does. For example, one of the rules that Trump wants to water down has to do with companies finding out who their owners are, like who are your stockholders, and figuring out whether any of them are

using you to launder money. And this rule was said to cost 83 billion dollars. Now it's not that a lot of people are going out there and writing checks for 83 billion dollars to comply with the rule. No, it's that they are putting people to work to comply with the rule and the rule writers estimated that that time was worth 83 billion dollars. So rolling back the rule doesn't actually add 83 billion dollars to GDP. By the same token, the benefits that accrued to that rule, in this case presumably less crime, were extremely hard to measure. I mean, how do you measure like fewer people committing crimes? It's awfully hard.

What I like to think, though, is that where deregulation or smart rulemaking really has an effect is where it basically gets out of the way of innovators and investors doing something for which there is some demand, but that demand and that supply were not allowed to meet because there was a rule in the way. That was WSJ Chief Economics commentator, Greg Ip.

Thanks so much, Greg. Thank you very much for having me. And to feed their artificial intelligence models, tech companies have used a long-standing practice called scraping to gather data from across the web. Publishers are not happy about it and they're looking for ways to protect their data. WSJ media reporter Isabella Simonetti said that some have turned to the legal system

and have forged licensing deals. Others are using new tools that block access to their material in the hope that this will force AI companies to the negotiating table. AI isn't going anywhere. It impacts all of our lives and we're even using it in newsrooms to make our work more efficient and better. And we're still in the very early stages of this. And these news organizations recognize that they need to cut deals in order to have a sustainable relationship going forward

with the big tech companies. That being said, because of the ongoing litigation, the deal-making environment is somewhat tense. A lot of people want to wait and see how that plays out in order to come back to the bargaining table. News organizations are in touch with these companies about potential deals, but whether or not they actually get done

and the nature of them is still something that is being sorted out. To hear more from Isabella, listen to today's episode of Tech News Briefing. And that's What's News for this week. Tomorrow you can look out for our weekly Markets Wrap-Up, What's News in Markets. Then on Sunday, we're looking at online brokerage

Robinhood's tokenization of a range of assets and discussing how far a friendly regulatory environment can carry the industry. That's in What's New Sunday, and we'll be back with our regular show on Monday morning. Today's show is produced by Pierre Bienemay, with supervising producer Michael Kosmides. Michael Laval wrote our theme music. Aisha El-Muslim is our development producer, Scott Salloway and Chris Zinsley are our deputy editors. Anfalana Patterson is the Wall Street Journal's head of news audio. I'm Alex Osela. Thanks for listening.