The Week in Business: Conglomerates Break Up

First G.E. and then J&J decide to split up their businesses. Inflation is rising. And the Biden administration’s vaccine mandate faces court challenges.,

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Credit…Giacomo Bagnara

What’s Up? (Nov. 7-13)

G.E. Is Breaking Up. So Is J.&J.

On Tuesday, General Electric said it will spin off its health care division in early 2023 and its energy business a year later. Only its aviation division will remain. The 129-year-old company’s breakup marks an end to an era of global conglomerates. Other large companies, like Siemens and Honeywell International, have also pared down their businesses over the last few years, and Toshiba and Johnson & Johnson announced last week that they would split up their businesses. But as industrial conglomerates are breaking up, a new breed of conglomerate has emerged: Big Tech companies like Amazon and Alphabet have embraced the strategy of multiple business lines, putting odd bedfellows like books and grocery delivery, or maps and phones, under the same umbrella.

Inflation Is Going Up

Consumer prices rose faster in October than at any other point in the last three decades, according to data released by the Labor Department on Wednesday. Most policymakers expected that rapid inflation caused by the pandemic would slow sooner. That it has stuck around complicates plans for the Federal Reserve, which may face pressure to speed its lifting of pandemic support measures, and for President Biden, who said Wednesday that “reversing this trend is a top priority for me.” The Biden administration has argued that its infrastructure bill and broader economic package would slow inflation by increasing the economy’s capacity for supplying goods and services. Economists generally agree that the legislation would slow inflation in the long term, but many say it could add to inflation next year.

A Good Day for Rivian

Rivian, the electric truck company, had a blockbuster debut on public markets Wednesday, raising nearly $12 billion. Its shares jumped 29 percent in their first day of trading, which valued Rivian at $86 billion — on a par with General Motors. Tesla, another electric vehicle maker, founded in 2003, has a market capitalization of more than $1 trillion. Though traditional automakers have invested in electric vehicles, investors have not yet rewarded them for it. “General Motors is so undervalued as we start this wonderful period we’re in because we invested over three, four years ago in electric vehicles,” Mary Barra, G.M.’s chief executive, said about the company’s investment in electric vehicles at the DealBook Online Summit last week.

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Credit…Giacomo Bagnara

What’s Next? (Nov. 14-20)

Challenges to the Vaccine Mandate

Some businesses and politicians have formally complained and filed lawsuits against a mandate, issued this month by the Occupational Safety and Health Administration, that businesses with 100 or more employees require that their workers be vaccinated or undergo weekly testing. Last weekend, a federal appeals panel temporarily blocked the mandate after businesses, religious groups, advocacy groups and several states filed a petition arguing that the Biden administration had overstepped its authority. On Friday, the appeals court kept in place its block on the mandate, and the case is expected to end up at the Supreme Court. A flurry of separate lawsuits that seek to stop the mandate have also been filed — several by state attorneys general and another by the National Retail Federation, the National Federation of Independent Business and the American Trucking Associations. The first major deadline for the new rule is Dec. 5, when large companies will need to require their unvaccinated employees to wear masks.

The State of Retail Sales

The Commerce Department on Tuesday will report retail sales for October. Spending at businesses in the United States increased in both August and September, driven by the reopening of the economy and rising prices. Retailers continue to face challenges with hiring and supply chain disruptions that may have caused growth to slow in October. Still, the National Retail Federation said last month that it expected record growth in sales this holiday season.

Labor Disputes

A record number of workers quit their jobs in September, according to data released Friday by the Labor Department. The rising number of people willing to walk away from their jobs is one sign of workers’ rising leverage as employers struggle to fill millions of open jobs. Another is a spurt of organized labor action. On Wednesday, ballots for a unionization vote went out to employees at three Buffalo-area Starbucks stores, which, if the union bid is successful, would be the first of the company’s locations to unionize. Thousands of workers at the agriculture equipment maker Deere & Company remained on strike after rejecting two contract proposals that negotiators for the United Automobile Workers union had worked out with the company. And workers at Kellogg cereal factories have been on strike since early October.

What Else?

Elon Musk took a Twitter poll about whether to sell 10 percent of his Tesla shares — then sold $5 billion of them, partly to cover taxes on stock options. Denim is having an identity crisis. Adam Neumann has some regrets about his time at WeWork. And President Biden is expected to sign the $1 trillion infrastructure bill on Monday.

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