A Boomer Power Play?

Balking at the boss's orders, young employees say they'd rather quit than commute.

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Today’s highlights: The cupcake craze lives on. The mask wars aren’t over yet either. And is your business prepared for a ransomware attack?

FINANCE

A chocolate startup built its business on Instagram and turned down an acquisition from Hershey: “Lezlie Karls, Jake Karls, and Nick Saltarelli are no strangers to getting attention. As the founders of the chocolate snack brand Mid-Day Squares, they decided to promote their brand by creating their own programming: On their podcast, they talk about the dilemmas they've faced starting a business. They even film a reality series that they post on Instagram documenting every aspect of their lives running the fledgling brand. But when the Hershey Co., one of the largest candy and snack companies in the world, came calling for an acquisition in March, Mid-Day Squares was not interested.”

  • “The brand's flagship product is a peanut-butter bar topped with chocolate, or ‘a Hu chocolate bar slapped on top of a Perfect Bar,’ as Saltarelli describes it. It's meant to be a substantial snack in between meals.”

  • “Like most early brands, getting noticed was a challenge for Mid-Day Squares. So in mid-2018, Jake Karls pitched an idea: Turn growing the business into a story for customers to follow.”

  • “The result is a series of videos, reels, and other posts on Instagram chronicling the highs and lows of running a startup food brand, from securing distribution deals with new retailers to hunting down obscure ingredients when a supplier ran out.” READ MORE

Magnolia Bakery—the company that helped ignite the cupcake craze—has been sold: “The venture-capital firm co-founded by developer Stephen Ross, a key figure behind the Hudson Yards development, and entrepreneur Matt Higgins has acquired the bakery chain from owner Steve Abrams and his fellow investors in a deal that closed earlier this year. The two parties declined to reveal the purchase price.”

  • “Magnolia Bakery rose to prominence in the 2000s when it appeared on the Sex and the City HBO series and on Saturday Night Live. Since then, the chain has grown to encompass more than 25 locations across the U.S. and overseas.”

  • “The chain’s e-commerce business thrived during the pandemic, with online sales nearly tripling in 2020, according to the company. Officials declined to provide annual revenue figures for the bakery.”

  • “Mr. Abrams said the decision to sell Magnolia was driven partly by the challenges of trying to expand the company without significant additional capital.” READ MORE

MANUFACTURING

Chinese manufacturers are delaying orders, raising prices, and even shutting down: “Surging raw-material prices and a shortage of workers have pinched smaller Chinese manufacturers, including many that sell their products to the U.S. and other Western markets. While many have passed their higher costs on to overseas buyers, the pain is so severe at some manufacturers that they are finding it hard to raise prices enough to make up the difference. Others don’t want to risk losing business to competitors. Many are now looking for other solutions to avoid losing money.”

  • “Zhongshan Xiliwang Electrical Appliances Co., a kitchen ventilator producer based in southern China, told clients in mid-May that it would stop accepting new orders temporarily and urged customers to wait for two weeks before negotiating prices, given their volatility.”

  • “The company has been operating at a loss since April, in part because of a substantial increase in prices for metals, glasses and switches, it said in its notice to buyers.”

  • “The end result could be more inflationary pressure in China’s main export markets, including the U.S., where the consumer-price index in April jumped by the most since 2008.” READ MORE

The Southwest is America’s new factory hub, adding more than 30 percent of the manufacturing job growth in recent years: “Companies producing everything from steel to electric cars are planning and building new plants in Southwest states, far from historical hubs of American industry in the Midwest and Southeast. The lure is open land, local tax breaks and a growing supply of tech-savvy workers. The Southwest, comprising Arizona, New Mexico, Texas and Oklahoma, increased its manufacturing output more than any other region in the U.S. in the four years through 2020, according to an analysis by The Wall Street Journal of data from the Bureau of Economic Analysis.”

  • “Executives say the region’s growing population makes for plenty of available labor, and its lower cost of living is a draw for new talent.”

  • “‘I was surprised how straightforward a choice it was,’ said Peter Rawlinson, chief executive for Lucid Motors Inc., an electric-vehicle startup that plans to open a $700 million vehicle factory this year in Arizona ... ‘There was only one logical conclusion.’”

  • “The factory will build the Lucid Air, a luxury electric sedan starting around $70,000. It will employ around 750 people when it opens and expand to more than 2,000 workers, the company said.” READ MORE

THE ECONOMY

Manufacturers blame the tariffs for inflation: “The Trump administration implemented tariffs on products including lumber, steel and semiconductors to shield American companies from a glut of cheap imported products from China and other countries. The tariffs have long been opposed by U.S. companies that import the goods and pay the levies. They are making a new push for the Biden administration to lift them, on grounds that tariffs contribute to rising prices and product shortages that are accompanying the post-pandemic recovery.”

  • “‘I have had 15 price increases from my primary steel supplier since September,’ said Scott Buehrer, president of B. Walter & Co., a Wabash, Ind., maker of fabricated metal products. ‘What’s the justification for these tariffs when you have sky-high steel prices?’”

  • “Mr. Buehrer said he has cut his payroll by 10 percent to reduce costs as the prices of rolled steel nearly tripled since last fall.”

  • “The Biden administration has said it is reviewing the tariff policy but has no immediate plans to lift the tariffs.” READ MORE

HUMAN RESOURCES

Employees are choosing to quit rather than give up working remotely: “With the coronavirus pandemic receding for every vaccine that reaches an arm, the push by some employers to get people back into offices is clashing with workers who’ve embraced remote work as the new normal. While companies from Google to Ford Motor and Citigroup have promised greater flexibility, many chief executives have publicly extolled the importance of being in offices. … But legions of employees aren’t so sure. If anything, the past year has proved that lots of work can be done from anywhere, sans lengthy commutes on crowded trains or highways. Some people have moved. Others have lingering worries about the virus and vaccine-hesitant colleagues.”

  • “‘They feel like we’re not working if they can’t see us,’ she said. ‘It’s a boomer power-play.’”

  •  “A May survey of 1,000 U.S. adults showed that 39 percent would consider quitting if their employers weren’t flexible about remote work.”

  • “The generational difference is clear: Among millennials and Gen Z, that figure was 49 percent, according to the poll by Morning Consult on behalf of Bloomberg News.” READ MORE

Some workers consider recent changes in mask policy a nightmare: “The Kroger supermarket in Yorktown, Va., is in a county where mask wearing can be casual at best. Yet for months, the store urged patrons to cover their noses and mouths, and almost everyone complied. ‘People don’t like to wear masks here,’ said Janet Wainwright, a meat cutter at the store, ‘but very few people would go without it.’ That changed in mid-May after the Centers for Disease Control and Prevention advised vaccinated Americans that they could go maskless in most indoor settings. The next week, the store told employees that they could no longer ask customers to cover their faces. So mask use plummeted, and the anxiety of Ms. Wainwright and other workers shot up.”

  • “‘We just feel like we’re sitting ducks,’ said Ms. Wainwright, who estimated that far fewer than half of patrons wore masks on a recent Sunday. ‘Now it’s just a free-for-all.’”

  • “More than a dozen retail, hospitality and fast-food workers across the country interviewed by The New York Times expressed alarm that their employers had used the C.D.C. guidance to make masks optional for vaccinated customers.”

  • “Some, like Ms. Wainwright, said they had been vaccinated but worried they could still get sick or infect family members who were not or could not get vaccinated. Others said they had yet to be vaccinated.” READ MORE

REOPENING

A concert promoter in Florida decided to price tickets at $18 for those who are vaccinated and $1,000 for those who are not: “This spring, Florida Gov. Ron DeSantis issued an executive order forbidding businesses from making their patrons prove that they have been vaccinated against the coronavirus. He also signed into law a bill to give the ban more teeth, threatening violators with fines in the thousands of dollars. ... I’m not denying entry to anyone,’ said Paul Williams. ‘I’m just offering a discount.’ The governor’s office says the unorthodox pricing violates Florida’s rules.”

  • “Williams said he figured his tactics were safe— the executive order carries limited penalties, and the new law does not go into effect until shortly after his small punk rock event planned for June 26 in St. Petersburg.”

  • “But he said he was unprepared for the vitriol that followed: The anti-vaccinationFacebook messages, the sudden spam calls, the misspelled email that warned the band their next show could be their ‘last’ ...”

  • “‘I didn’t know that caring about my community would make me Hitler,’ he said in an interview Saturday.” READ MORE

The EEOC says employers can mandate vaccinations, but few companies are doing so: “The agency that enforces workplace discrimination laws has said — twice — that companies can make their employees who are returning to the job get vaccinated against Covid-19. But so far, few companies have decided to move forward, as many are still engaging in internal debates about how to safely restore their offices to operations that resemble what they were before the pandemic.”

  • “Some companies say they are wary of setting mandates until the vaccines have received full approval by the Food and Drug Administration, which so far has granted emergency use authorization.”

  • “Another reason many companies remain hesitant, according to executives, lawyers and consultants who advise companies, is the long list of legal considerations the E.E.O.C. says they must follow before mandating vaccines.” READ MORE

CYBERSECURITY

Small businesses are far more vulnerable to ransomware attacks than many realized. Is your business prepared? “With the migration to remote work over the last year, cyberattacks have increased exponentially. We saw more attacks of every kind, but the headline for 2020 was ransom attacks, which were up 150 percent over the previous year. The amount paid by victims of these attacks increased more than 300 percent in 2020. Already 2021 has seen a dramatic increase in this activity, with high-profile ransom attacks against critical infrastructure, private companies, and municipalities grabbing headlines on a daily basis.” Here are some ways to reduce the risk:

  • “Review your company’s cyber insurance policy and be sure that ransom is covered and that the level of coverage reflects the current reality.”

  • “Train your employees to identify phishing emails and educate them on the modus operandi of threat actors seeking to dupe them into clicking on links.”

  • “Test back-up systems regularly and make sure they’re segregated from other company systems.” READ MORE

ENERGY

A ski company built a power plant fueled by methane: “The power plant churns out 24 million kilowatt hours a year, about as much electricity for the grid as the ski company uses to run its four resorts and hotels.So far, it has also prevented 250 billion cubic feet of methane a year from entering the atmosphere, according to a recent progress report from the company. That’s the equivalent of taking half a million cars off the road a year.”

  • “Methane — about 10 percent of U.S. emissions — is the second most-prevalent greenhouse gas after carbon dioxide, but it is 25 times as powerful in trapping heat in the atmosphere.”

  • “Yet Elk Creek Mine’s success comes with an asterisk. It has yet to make a profit for its investors, and complicated regulatory issues and the low prices of other energy sources in the current market may make it difficult to replicate — without new legislation or government incentives.”

  • “The project passes two tests of ‘meaningful climate action’ because it works on a large scale and could be a model for others, the progress report argues. ‘While it is not a comprehensive market or policy solution,’ the report adds, ‘it illuminates a path in that direction.’” READ MORE

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THE 21 HATS CONVERSATION

Rob Dyrdek—a high school dropout, professional skateboarder, reality TV star, entrepreneur, and founder of the Dyrdek Machine says his goal is to build 50 to 100 businesses and sell each of them for $75 million to $200 million. In this 21 Hats Conversation, Dyrdek explains his plan.

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