business news in context, analysis with attitude

With brief, occasional, italicized and sometimes gratuitous commentary…

•  The New York Times this morning reports that "the Abbott Nutrition plant in Michigan that was shut down in February, sparking a widespread baby formula shortage crisis, had a leaking roof, water pooled on the floor and cracks in key production equipment that allowed bacteria to get in and persist, Dr. Robert Califf, the head of the Food and Drug Administration, told a House panel on Wednesday.

"He detailed 'egregiously unsanitary' conditions in the Sturgis, Mich., plant to lawmakers during a hearing, but he also acknowledged that his agency’s response was too slow in addressing problems at the plant."

The company is working to turn the facility around, with expectations that this could happen by June 6, "with some formula expected to begin rolling out June 20. Officials hope new shipments will reach store shelves within six to eight weeks, although resumption of full production at the plant will take longer."

The story goes on:  "Dr. Califf also acknowledged several ways that the F.D.A. had erred in addressing this problem: Its follow-up inspection in January should have started sooner, he said, adding that the agency took too long to circulate a whistleblower report that arrived in October but did not reach top officials until February … He told lawmakers that the agency did not receive an immediate notice when a formula plant found the deadly Cronobacter bacteria. Nor does the agency have access to the supply chain information that each of the three main U.S. baby formula manufacturers have in-house."

There will be more than enough questions to go around, but my first concern would be about a company culture that would let this facility degrade to this point.  Not to make assumptions, but the first thing I tend to think is that the emphasis was on margins and profits .. not on the investments that would've kept the business up to standards.  But I'm sure there will be assorted probes, by legislators and regulators and journalists, that will let us know who is to blame and why.

•  Bloomberg reports that Elon Musk is planning to get into the restaurant business.

The story says that "Tesla Inc and its CEO … submitted documents to the City of Los Angeles for a Tesla diner that would be open 24 hours a day on 7001 W. Santa Monica Blvd. in Hollywood … the 9,300-square-foot space includes plans for a drive-in movie theater and a 28 stall supercharging station. Architectural plans show a two-story diner with over 200 seats, both indoors and outside. The outdoor seats will have a direct view to two tall LED movie screens. Food will also reportedly be delivered to cars."

Bloomberg notes that "almost a year ago, Tesla filed applications with the U.S. Patent and Trademark Office to trademark a ‘T’ logo for an array of restaurant concepts, from self service to take out … There are no further details on opening date or menus, and Tesla did not immediately respond to a request for comment."