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Thursday Jan.23, 2020
✈️ Delta employees get a big frequent flyer bonus
_Basking in that fresh Delta bonus_
Hey Snackers,
Beware the falling iguanas. Their bodies go dormant and fall out of trees when it's too cold out (we feel you). Cloudy with a chance of iguana.
Markets stalled Wednesday while continued worries over China's coronavirus outbreak hurt travel-related stocks.
Reward
Delta dishes out $1.6B in profit-sharing bonuses for its employees
Sweet Valentine's Day... On February 14th, Delta's 90K employees will get a check for an extra 2 months of salary as a bonus. The generous $1.6B payout represents 33% of Delta's 2019 profits, which were extra strong (largely thanks to Delta's serendipitous lack of Boeing 737 Max planes).
Not just in-flight peanuts... Since 2012, Delta has paid out $1B+ a year in profit-sharing bonuses to employees, but this year is a record. Delta's not the only one sharing wealth — it's a thing in unionized industries like airlines and automakers. Since 2015, GM, Ford and Fiat Chrysler have shared a combined $5B with employees. But Delta's bonus (16% of salary) is big compared to average payouts (5% of salary). Here's what companies usually do with profits:
- Reinvest: Use profits to grow the biz — purchase new equipment and buildings, conduct R&D, marketing, kombucha on tap, etc.
- Dividends & Stock Buybacks: Reward shareholders with dividend payments and/or buy back your own stock to raise the share price for everyone.
- Save & Repay: Save $$$ for future expenses and pay back IOUs.
Investing in your people... can sometimes be the best investment. Delta's CEO Ed Bastian said he used to get a lot of heat from Wall Street for using profits for big employee bonuses. But these payouts help make Delta a top-awarded airline. Keeping employees happy (with fat bonus checks) can mean lower employee turnover and higher morale — and that can translate to a better experience for customers (and stronger sales).
Cruise
GM unveils a self-driving robo-shuttle (and it's actually going to produce it)
It's a bird, it's a plane... it's a toaster-shaped robot taxi. General Motors unveiled its highly-anticipated autonomous robotaxi: "Origin." It was developed by GM's self-driving car unit, Cruise, which GM acquired in 2016. But unlike futuristic concept cars, Origin is a fully engineered vehicle that's actually on its way to production. Here's the deal:
- Automated: No drivers seat, no steering wheel, and (wait for it)... no driver
- Gondola: It looks kinda like a long ski gondola on wheels, with 6 seats facing each other and glass doors that open elevator-door style
- Pennywise: GM says a trip on Origin will be cheaper than a human-driven Uber/Lyft/taxi trip, and even less costly than driving your own car.
Hands off the (non-existent) wheel... Cars without steering wheels aren't street legal on public roads today (still working on safety concerns). So we don't actually know when Origin will hit the roads, but Cruise's CEO says production plans will be released in a few days.
Ride-sharing gains a whole new dimension... Companies like GM and Alphabet are spending billions developing self-driving cars. The goal isn't to sell you a robo-vehicle — it's to offer a robo ride-hail fleet:
Create
Memphis Meats gets $161M investment to grow animal meat (minus the animal)
Disrupt plant-based meat... Venture Capital already wants to do that. Memphis Meats just raised $161M to develop "cell-based meat." It takes cells from animal tissue (like chicken breast), then "feeds" the cells nutrients in a lab, producing this "clean meat." Kinda Brave New World-ish, but it's trying to optimize the flesh-growing process. The idea is to grow meat without the rest of the animal's body, slaughter-free.
The real problem = land and water scarcity... Winston Churchill predicted it back in 1931 (seriously): "We shall escape the absurdity of growing a whole chicken in order to eat the breast or wing." Here's the problem with our current animal-raising for the meat industry:
- We need more meat: Global demand for meat is expected to double by 2050 as more people enter the middle class and upgrade the heartiness of their meals worldwide.
- But we don't have enough resources: Animals require lots of food, water, land (for grazing), and time to hit maturity.
- Back to Memphis: Memphis Meats isn't in stores yet, but it's using the biggest ever fundraise for a lab-grown meat startup to build a pilot production plant.
Which is better, plant or cell-based meat?... Both try to give us the sustenance and juiciness of a shank, loin, or flank, but with less enviro-guilt. Once cell-based meat gets USDA and FDA approval (a critical next step), you'll have to decide your alt-meat preference based on these criteria:
- Moral: Both win because no animals get slaughtered.
- Environmental: Impossible and Beyond say their burgers burgers create ~90% less greenhouse gases and use ~93% less water than beef. It's unclear by how much better cell-based may be, though it does release less emissions than beef.
- Healthiness: Cell-based meat can be bred to be a healthier supermeat (kinda scary), while plant-based meat is actually high in saturated fat.
What else we’re Snackin’
- Artificial: Google won't renew its AI contract with the Pentagon after employees complained the tech could be used for lethal purposes
- Wack: Saudi Crown Prince Mohammed bin Salman sent Jeff Bezos a WhatsApp — instead of a dancing cat video, Bezos got his personal phone hacked
- Hefty IPO: Reynolds Consumer (yes, Reynolds Wrap Reynolds) filed to go public — it says its Hefty trash bags are in a shocking 95% of American homes
- Nutella Bucks: The Ferrero family is the chocolatey dynasty behind Nutella (and richest family in Italy) — they're getting a $714M dividend payout from Ferrero
- E-Vote: Seattle will be the 1st city ever to allow voting by smartphone (congrats ~1.2M eligible voters in Seattle and 30 nearby cities)
Thursday
Earnings from AbbVie, JetBlue, Southwest Airlines, American Airlines, Colgate, Comcast, Intel, E-Trade, and Procter & Gamble
Disclosure: Authors of this Snacks own shares of Alphabet, Beyond Meat, and Uber
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