TUESDAY, AUGUST 20, 2019 The Boston Globe Business C
TALKING POINTS
FINANCE Agenda
GE STILL RAILING
AGAINST
MARKOPOLOS REPORT
General Electric doubled down on its fi-
nancial performance and reputation
Monday, less than a week after a hefty
report accused it of fraud and suggested
the conglomerate was headed toward
bankruptcy. The Boston company’s
stock plunged more than 11 percent
Thursday after Harry Markopolos, the
whistleblower who raised flags about
Bernie Madoff’s Ponzi scheme in 2008,
published a report alleging the compa-
ny misled investors in financial state-
ments to the tune of $38 billion. He called GE ‘‘a bigger fraud than Enron.’’ The company
has aggressively disputed the report as ‘‘meritless.’’ CEO Lawrence Culp noted that Marko-
polos stands to gain from a drop in GE’s share price. Markopolos has said that he examined
GE at the request of an unidentified US-based hedge fund and that he would receive a ‘‘de-
cent percentage’’ of any proceeds the hedge fund earns from shorting its stock. On Monday,
SteveWinoker,vicepresidentofGE’sinvestorcommunications,wroteonGE’swebsite:‘‘We
operate with absolute integrity and stand behind our financial reporting. Our team remains
confident in our company’s long-term strengths.’’ — WASHINGTON POSTECONOMY
BOSTON FED’S
ROSENGREN STILL
OPPOSES CUTTING
INTEREST RATES
Federal Reserve Bank of Boston presidentEric Rosengren continued to push back against
further interest-rate cuts by the central bank, arguing he’s not convinced that slowing trade
and global growth will significantly dent the US economy. “We’re likely to have a second
half of the year that’s much closer to 2 percent growth,” Rosengren said Monday. “I’m not
saying there are not circumstances in which I’d be willing to ease. I just want to see
evidence we are going into something that is more a slowdown.’’ Rosengren, a voter this
year on the Federal Open Market Committee, was one of two officials who dissented when
the panel cut rates on July 31. Two days later he released a statement saying he did not see a
“compelling case” for adding additional monetary accommodation, while also raising
concerns that a cut would add to financial stability risks. Kansas City Fed president Esther
George also opposed the decrease, the first time chairman Jerome Powell had faced a
double dissent since he took the Fed’s helm in February 2018. Minutes of last month’s
meeting will be released at 2 p.m. in Washington on Wednesday. The Boston Fed chief said
policy makers have “plenty of things to be worried about,” ranging from slowing global
growth and volatility in financial markets to geopolitical risks in the United Kingdom and
Hong Kong. Still, he expects a resilientAmerican consumer will continue to drive economic
output in the United States, and the Fed shouldn’t try to boost economic activity in other
countries by cutting rates. — BLOOMBERG NEWSPHARMACEUTICALINDUSTRY
ANALYSIS SHOWS
FEWER, MORE
MODERATE,
INCREASES
IN DRUG PRICES
Drug companies are still raising prices for brand-name prescription
medicines, just not as often or by as much as they used to, according to
an Associated Press analysis. After years of frequent list price hikes,
many drug makers are showing some restraint, according to the analy-
sis of drug prices provided by health information firm Elsevier. In the
first seven months of 2019, drug makers raised list prices for brand-
name prescription medicines by a median of 5 percent. That’s down
from about 9 or 10 percent over those months the prior four years, the
AP found. From January through July this year, there were 4,483 price
hikes, down 36 percent from that stretch in 2015. The industry’s re-
straint comes as lawmakers of both parties in Congress and the Trump
administration are advancing measures to try to curb costs, a concerted
effort not seen in Washington for years. Meanwhile, many states are try-
ing to limit drug price increases or to allow residents to buy drugs at
lower prices from pharmacies in Canada. — ASSOCIATED PRESSENERGY
TESLA PANEL RENTAL
PACKAGES ECHO
SOLARCITY
OFFERINGS
Tesla Inc.’s latest bid to revive its foundering solar division may sound familiar: rentals. The
Palo Alto, Calif.-based company is now offering panel packages with “no long-term
contract” as part of a relaunch announced Sunday by chief executive Elon Musk. But there
would be a $1,500 charge if the customer opts out and requests the system’s removal. The
rental option harkens back to a leasing product popularized by SolarCity Corp., the debt-
burdened former rooftop king that Tesla bought for $2.6 billion in November 2016. While
the lease had propelled SolarCity’s growth, the company borrowed heavily to support the
strategy. After the acquisition, Tesla prioritized outright sales in an effort to boost
profitability. It ceased door-to-door marketing, ended a partnership with Home Depot, and
cut jobs. The company recently shifted to offering standardized panel systems online,
rather than the bespoke arrays that’s driven the rooftop-solar industry’s growth in the
United States. All that has eroded its market share. Tesla’s latest solar relaunch comes less
than a month after it reported its third consecutive quarterly decline in solar installations.
The monthly payment option includes installation costs as well as support and
maintenance, according to Tesla’s website. It’s available in six states — including
Massachusetts — and will cost $50 monthly. — BLOOMBERG NEWSHOTELINDUSTRY
LAWSUIT ALLEGES
THAT MARRIOTT
PRICING MISLEADS
GUESTS
For more than a decade, Marriott International
has been misleading guests about hotel room
prices and earning millions in profits as a result,
according to a lawsuit filed Tuesday by
Washington, D.C.’s attorney general. The
complaint, filed in D.C. Superior Court by
Attorney General Karl Racine, says Marriott used
a ‘‘deceptive’’ and illegal trade practice called
‘‘drip pricing’’ to lure consumers. The filing says
the hotel chain hides the true cost of its rooms
from consumers shopping on its website or on third-party hotel reservation sites such as
Expedia. Daily room rates are posted, but as the consumer selects a room and provides a
credit card to reserve it, Marriott often adds a ‘‘resort fee,’’ an ‘‘amenity fee’’ or a ‘‘destination
fee’’ ranging from $9 to $95 per day, the complaint alleges. Because of that, the complaint
says, customers comparison shopping online are misled into thinking the Marriott room is
less expensive than it is. The lawsuit follows an investigation by the attorneys general of 50
states and the District into competitive hotel industry pricing and its effect on customers.
The investigation identified 189 properties owned or managed by Marriott where ‘‘resort
fees’’ have been charged. Marriott spokesman Jeff Flaherty declined to discuss the
complaint. ‘‘We don’t comment on pending litigation,’’ Flaherty said in an e-mail, ‘‘but we
look forward to continuing our discussions with other state AGs.’’ — WASHINGTON POSTAVIATION
BOEING MUST DEFEND
FIRING OF WORKERS
A federal official is making Boeing defend itself against charges that it illegally fired
workers for supporting a union at its South Carolina assembly plant. The regional director
of the National Labor Relations Board ruled there’s enough merit to send the cases to an
administrative law judge. The InternationalAssociation of Machinists and Aerospace
Workers claims six workers were wrongly fired and others disciplined at the plant in North
Charleston, where employees build the Boeing 787. The federal official denied a union
claim that Boeing has failed to bargain over a contract. The union won a May 2018 election
to represent about 176 inspectors and technicians. Although a small group, it was a rare
labor victory in the state with the lowest percentage of union workers. Boeing is challenging
the election. — ASSOCIATED PRESSTuesdayJOBFAIR
Break into blockchain
At this event hosted by the Microsoft
New England Research and Development
Center meet with more than 15 Boston
area blockchain employers. Tuesday, 5 to
7 p.m., Microsoft New England Research
and Development Center, M floor, 1
Memorial Drive, Cambridge. Free. Register
online or go to the business agenda at
bostonglobe.com.NETWORKING
Meet over drinks
Cut loose with other professionals at this
after-hours mixer from Network After
Work. Tuesday, 6 to 8 p.m., The Brahmin,
33 Stanhope St., Boston. $15 online or
$30 at the door. Register online or go to
the business agenda at bostonglobe.com.WednesdaySTARTUPS
Hear pitches
See if five local entrepreneurs can sell you
on their startup ideas at this event from
Founders Live. There will be opportunities
to network with Boston’s startup scene.
Free food and beverages will be provided.
Wednesday. 6 to 8 p.m., CIC-Downtown,
20th floor, 50 Milk St., Boston. $10.
Register online or go to the business
agenda at bostonglobe.com.WORKSHOP
Tell your story
Learn how to use storytelling techniques
to become a more effective manager at
this class from business education
organization Product School. Wednesday,
6:30 to 8:30 p.m., Product School
Boston, 711 Atlantic Ave., Boston. $20.
Register online or go to the business
agenda at bostonglobe.com.Eventsofnote?E-mailusat
[email protected]