Dewayne Johnson (pictured) cost the German pharma giant Bayer some €10 billion yesterday. That’s how much Bayer’s market capitalization dropped. Mr Johnson is a Californian man who was groundskeeper at a school where he twice accidentally got soaked with Roundup, a brand of weedkiller that contains glyphosate. Two years later he got cancer. He says that glyphosate was the cause, and last week a jury agreed with him, slapping damages of $289m (€250m) on Monsanto, the firm that makes Roundup and is now owned by Bayer, after the biggest takeover in German history.
There are about 5,000 other cases like Mr. Johnson’s in the US. Bayer is of course appealing the verdict, as it continues to argue that there is no clear link between glyphosate and cancer. The science, I’m told, is indeed quite complicated. But even if subsequent juries and judges decide differently than Mr. Johnson’s did, Bayer cannot be happy. Glyphosate products account for about 6 percent of the combined group’s sales and 3 percent of its earnings.
This was not part of the plan when Bayer, formerly a staid firm for German chemists in sleepy Leverkusen and known mainly for Aspirin, made its $63 billion bid for Monsanto. Even then, people were already warning Bayer about the reputation risk that would come with Monsanto. The American firm makes the sort of cutting-edge genetically modified organisms (GMOs) that Bayer views as the future. But for that same reason Monsanto has always got a bad rap in GMO-phobic Germany. And now this. They’ll be needing a lot of their Aspirin in Leverkusen.
Another famous German brand that’s not so happy about an Anglophone subsidiary is VW. Why would Volkswagen be happy about anything at all?, you might be asking. After all, the carmaker is still struggling with its Dieselgate scandal. But at least it has its glorious luxury brands: Audi, Porsche and — with the most cachet of all — Bentley. Alas, Bentley, too, is turning out to be nothing but trouble.
One ruthless narrative is that Bentley has a long history of missing out on the big developments in cars. In the original James Bond books by Ian Fleming, written in the 1950s, 007 was driving a Bentley. By the time the films came out, the producers had already given him an Aston Martin. So it went, until — the horror! — the Krauts bought the brand in 1998 (as though BMW taking Rolls Royce weren’t bad enough).
Well, Bentley is now giving its Krauts losses. By contrast, Porsche has a profit margin of 18 percent. VW’s honchos, when they’re not worrying about which former or current manager knew what and when about diesel emissions, are now racking their brains about what to do with Bentley. The favored option is apparently to let the guys at Porsche take control.
The Turkish crisis I commented on yesterday has worsened and spread to other emerging markets, spooking traders of currencies, bonds and stocks. We are now in the bizarre situation that a country such as Argentina is already having to raise interest rates even as Turkey is still refusing to do so.
This has a lot of people in Germany concerned. Many German companies are exposed to the Turkish market. But of course Germany also has about 4m residents of Turkish descent who are affected. And Germany depends on Turkey’s good faith in the refugee deal it struck with the EU. That’s why, even though German-Turkish relations have been bad in recent years, there is no gloating in Berlin. “Nobody has an interest in Turkey’s economic destabilization,” Chancellor Angela Merkel said yesterday. Maybe she’ll have some ideas for stabilizing Turkey when Recep Tayyip Erdogan visits Berlin next month.
Even sooner, this coming Saturday, Merkel will be meeting Vladimir Putin again, at Schloss Meseberg, a castle outside Berlin that serves as Germany’s analog to Camp David in the US. As usual, they’ll have a lot to discuss: Russia’s meddling in the Syrian conflict and in eastern Ukraine, and of course Nord Stream 2, the gas pipeline under the Baltic that will bring gas from Russia to Germany — which everyone from Warsaw to Washington opposes, and which Donald Trump recently honored with his Twitter scorn.
I always wonder how the two do it, Merkel and Putin. They’ve known each other for well over a decade. She was East German when he was a KGB officer in East Germany. She speaks Russian and he speaks German. She is onto him in a way that few leaders are. And he grudgingly respects her as he respects few other leaders. I’ve been told that started in 2007, when he tried an old KGB trick (pictured) during a visit by Merkel to Sochi. Merkel had made clear that she is afraid of dogs. Putin promptly brought out his black Labrador Koni and let him sniff up the chancellor. The results were not as Putin had planned, however, as I described last year in this profile of Merkel. These days, they’re well past sniffing.
Andreas Kluth is Handelsblatt Global Editor-in-Chief. To subscribe to this newsletter or our other two, sign up here.