Conglomerates Break Up, Big Tech Empires Grow

Strategic Insights -

The era of global conglomerates is ending as iconic companies like General Electric and Johnson & Johnson announce breakups. Meanwhile, Big Tech giants like Amazon and Alphabet are embracing a new strategy of multiple business lines under one umbrella. Simultaneously, inflation persists, raising concerns for policymakers and President Biden. In other news, Rivian's electric truck company debuts on public markets with a blockbuster raise, while challenges to the vaccine mandate continue to unfold.

Key Takeaways:

  • General Electric will spin off its health care division in early 2023 and its energy business a year later, marking the end of its 129-year-old conglomerate era.
  • Big Tech companies like Amazon and Alphabet are embracing a new strategy of multiple business lines under one umbrella, putting odd bedfellows like books and grocery delivery, or maps and phones, together.
  • Inflation rose faster in October than at any other point in the last three decades, complicating plans for the Federal Reserve and President Biden.
  • Rivian, the electric truck company, raised nearly $12 billion in its public debut and its shares jumped 29 percent on its first day of trading.
  • President Biden's infrastructure bill and broader economic package are expected to slow inflation in the long term, but may add to inflation next year.
  • The Occupational Safety and Health Administration's vaccine mandate has been temporarily blocked by a federal appeals panel and is expected to end up at the Supreme Court.
  • Retail sales are expected to be reported by the Commerce Department on Tuesday, with some retailers facing challenges with hiring and supply chain disruptions.
  • Labor disputes continue to rise, with a record number of workers quitting their jobs in September and organized labor action spurring unionization votes.

Statistics:

  • Consumer prices rose 6.2% in October, the fastest pace in the last three decades, according to the Labor Department (1 Nov 2021).
  • Rivian raised nearly $12 billion in its public debut and its shares jumped 29% on its first day of trading (7 Nov 2021).
  • The Biden administration's infrastructure bill and broader economic package are expected to increase the economy's capacity for supplying goods and services, potentially slowing inflation in the long term (Nov 2021).
  • The Occupational Safety and Health Administration's vaccine mandate has been temporarily blocked by a federal appeals panel (11 Nov 2021).
  • A record number of workers quit their jobs in September, with 4.4 million employees voluntarily leaving their positions, according to the Labor Department (5 Nov 2021).

Sources:

  • "General Electric Is Breaking Up." November 7, 2021.
  • "Johnson & Johnson Plans to Spin Off Consumer Business." November 10, 2021.
  • "Amazon's new approach to innovation: Embracing a culture of failure." November 2021.
  • "Inflation rose 6.2% in October, the fastest pace in the last three decades." November 10, 2021.
  • "Rivian's public debut: $12 billion raised, shares jump 29%." November 7, 2021.
  • "The Biden administration's infrastructure bill and broader economic package." November 2021.
  • "Occupational Safety and Health Administration's vaccine mandate blocked by federal appeals panel." November 11, 2021.
  • "Record number of workers quit jobs in September, Labor Department says." November 5, 2021.