For hours and thats the first time ive looked at him. Your hair looks good. Erik lets look at the headlines and manufacturing. Scarlett an increase of 2. 1 , and the consensus was 2 , so slightly better than economists were looking for. I believe this was the first increase since last july as well. This was the month of march. What is interesting here is that the previous rate of a gain of 0. 2 has been revised to a drop of 0. 1 . February was weaker than anticipated and march numbers were slightly higher than economists are looking for. If you back out transportation orders, factory orders were unchanged, 0 . Whereas for the february numbers, it was revised down from 0. 8 to 0. 1 . The Financial Markets are coming off of their highs, still a by 0. 1 . It is hard to say if that came out right after factory numbers of coming out. If i look at the dollar right now, the u. S. Dollar index slightly higher here, 9537. We have seen manufacturing numbers softening for the past few months now, so the fact that we have an increase for march is encouraging will stop stephanie is encouraging. Stephanie thank you, scarlet fu. Erik some of the top stories we are following right now, a changing of the guard at cisco. John chambers after 20 years is stepping down as eeo of cisco. He will continue to be chairman of the companys war. The news eeo will be Senior Vice President chuck robbins. Yet been with the companies in 1997 and is currently in charge of worldwide operations. Chambers decision to set step down is knows the rise. Chambers decision to step down is no surprise. And Steve Easterbrook says he is stripping away layers of bureaucracy at mcdonalds so they fast food coveney can keep up with changing tastes. Steve we will work on running great restaurants. Simply speaking, a recommitment to hot, fresh food, fast and Friendly Service and contemporary items at mcdonalds. Erik there were no big announcement about a new menu for example, or a marketing change to help with mcdonalds worst sales slump in more than a decade. Investors are not too impressed. Shares are slightly down. Call it a consolation prize for comcast. 10 days after dropping his bid for time warner cable, they posted firstquarter earnings that beat estimates. Comcast also signed up more internet customers than expected. For the first time, comcast now has more internet subscribers than cable tv number cable tv customers. Tmobile is poised to become the nations third biggest wireless carrier. They leapfrogged sprint. They have increased their Subscriber Base by 36 in the past seven quarters. Ceo john ledger john legere has done away with twoyear contracts and has added benefits, such as rollover data. In the meantime, sprint has been losing subscribers. Dow chemical plans to limit eight 1700 jobs around the world, representing a 3 cutback. The company had planned to do cost savings measures after a split off of its marine business. It estimates saving 700 million a year once it is done cutting jobs will stop and two more republicans join the race for the white house. Carly fiorini said she is running on abcs good morning america. She said her business experience would give her an advantage. Carly yes, i running for president. I think of the best person for the job because i understand how the economy actually works and i understand the world and who is in it and how it works, and i understand bureaucracies. And that is what our government has become, a giant unaccountable, bloated bureaucracy. Erik and ben carson announced in detroit today. He has become a favorite of grassroots conservatives and is a fierce opponent of president obama and obamacare. Stephanie more now on corporate reorganization over at mcdonalds. The chief Information Officer from 200405 joins us now from boynton beach, florida. Larry, we went from loving it to not liking it at all. What do you think about what is happening at mcdonalds right now . Larry i think its sad. The announcement that was just made, the theme should be to quote george harrison, if you dont know where you are going, any road will take you there. Stephanie i like that line. Larry the one thing that is missing thank you. The big thing that is missing is the focus seems to be the reorganization is the solution. We organization for what customer defined purpose is the solution reorganization for what customer defined purpose is the solution. Mcdonalds is confused. They have not defined the brand focus, the relevant differentiation, and if you dont know where you are going, as i said, any road will take you there. Erik larry, what would you have done differently . What should Steve Easterbrook be doing instead of just corporate reorganization . Larry he should be first focusing on the brand destination. What does he want mcdonalds to stand for . And only then, how do we organize to achieve that . Saying that mcdonalds brand stands for a modern, aggressive burger company, it may be nice in an annual result annual report as a mission statement. It provides zero direction for product development, for marketing. In the press release that came after the announcement, there was absolutely nothing, nothing at all about the brand definition and about marketing. If you dont change the mind of the customer, you will not have sustainable profitable growth. Stephanie in mcdonalds defense, are they in a tough spot . Because specifically what they market is no longer what people are as interested in as they were just a few years ago. During your im loving it time, there was no shake shack orchard will let or chipotle. Larry mcdonalds had different challenges there. Going back to 2002, the stock had reached an alltime low and were losing market share. Franchise around was terrible. Franchise morale was terrible. The fundamentals of a good turnaround strategy begin with the customer. Stephanie how did you turn it around during that time . Larry we focused first on the customer. We focused on restoring customer satisfaction. We focused on loving the customer we had before we focused on the customer we didnt have. We defined the competitive set and asked ourselves, if our share is to grow, where will that come from . All of that started with a clear marketing definition. And then we focused on financial discipline and restructuring the organization. We are staff on a sinking ship reorganizing the staff on a sinking ship will not prevent the ship from going under. Erik larry, the way you just phrased it you are accusing Steve Easterbrook of rearranging the deck chairs on the titanic. Do you think that mcdonalds is headed for the bottom . Larry that is the trajectory. Do i feel it will end up there . No and i did not feel that in 2002. Mcdonalds has certain competitive advantages. They have scale and they should leverage that scale more effectively. Erik how do you do that . They have a huge franchise system. They now want to engage in refranchising, move some of the companyowned restaurants over to the franchisees. That is one of todays announcement in addition to reorganization. Is that how you leverage scale in your words . Or would you do Something Different . Larry i think the refranchising is right. Because the quantitative evidence right now is that the franchisees run better more efficient, more effective restaurants than the companyowned restaurants. Its hard to be credible as a leader when the restaurant you own the restaurants you own dont perform as well as the franchisee managed ones. If the franchisees can do a better job, let them do so. I endorse that step. But from a scale point of view, it means that all can take risks and be more innovative than a smaller chain. If a smaller chain is bold and risktaking, takes a serious innovation, it might put them out of business. Mcdonalds should be an innovation leader. Instead it has been a follower. And without clear brand direction, how to you decide what those innovations should be . But they have a huge advantage in being able to take bigger risks, because they have bigger resources and bigger scale. They have an opportunity, because of their scale to be a learning organization, and there i endorse what steve is doing with the new reorganization, sharing the learning will be an asset that legault will have compared to some of the smaller that mcdonalds will have compared to some of the smaller competitors. Stephanie larry, think is a much. Clearly, you are the secret sauce when you were there. Erik coming up, bill icon carl icahn goes after blackrock. He says guys like larry fink make it harder to turn Bad Companies into good ones. Stephanie and then carson then carson joined the race for the Republican National erik nomination. Stephanie you can watch it speak watch his speech right here at 10 30 a. M. On Bloomberg Television. Stephanie welcome back. Im Stephanie Ruhle with my partner, Erik Schatzker. It is time to give you the top stories of the morning. In china, the Manufacturing Sector is growing weaker. The hsbc gauge of factory activity came in less than expected. At the same time, new orders overall the client, and this is declined and this is speculating fueling speculation that china will do something to bolster its economy. Janice the janice capital fund said gross said im merely have a sense of the ending ending with a whimper not a bang. He admitted he got it wrong called for an end of the bond rally them february, 2013 in february, 2013, and begin searching months later. Prince william and their and his wife kate will name their new daughter, Charlotte Elizabeth diana. Her middle names to honor her late grandmother and greatgrandmother. She is fourth in line to the from phone fourth in line to the throne. That is also the name Chelsea Clinton picked for her baby last year. Erik carl icahn versus larry fink. Last month, fink wrote to chief companies in the s p 500, urging them to resist the pressure to buy back stock or raise cash dividends. This past weekend, carl icahn fireback fired back at larry fink. Carl the most important thing in the company is the ceo, by far. There is nothing close. I dont believe they should get 750 times what the average worker gets, but i dont begrudge them that money of the stock goes way up also because of a gets the stock up, let them have some good money. But look what you have. You have this club system and a lot of them feel they can do what they want because of guys like larry fink. Erik who will win this battle the man running the Worlds Largest asset manager, or the grizzled critic . We are joined by foggy own. Stephanie thank you. I was not sure we were going to do today. Erik is it carl icahn or larry fink . Guest on larrys 4. 6 trillion about 1 trillion or so is in passive etfs. Well await you can perform, you cannot sell the dogs in any gf. You are stuck with them as much as you cant rely on for management to do a better job. And that matters, but in reality as much as you can rely on for management to do a better job. Theres a tremendous amount of all capital that should be available to build things and pay workers. If the ceo is paid based on options, he wants to see the share price up. They dont move my strike. Keep it where it is and shares go up. Stephanie lets break that down in english. Fabio you are a ceo and there are 100,000 shares outstanding. Stephanie im fat, american, and im white, and im a man. Fabio youre halfway there. You do the Share Buyback price owing to the fact that shares will go up and in many cases you do not see the management option changes instruct price. The 100 that had been your strike, maybe the stock is up 10 because you bought back 10 , not because you actually did anything. Then you have the socalled activists that you could use an excuse to summer some degree. Something is motivating that carl icahn. Erik a way to ask plane that carl icahn kendrys, released the ceos interests or at least the ceo interests are more aligned with shareholders than they are at blackrock. Fabio to some degree, but 17,000 directors went up to vote in 2012. Of those 17,000, only 60 did not get majority approval. And of those 60 only six actually quit. So icon carl icahn must be going crazy. You want to see the turnover of six guys . Come on. Stephanie larry fink runs blackrock, the large largest asset manager in the world. He can get a meeting with any ceo of any company. He will get the biggest, if not the top three, allocations out there. Is he really looking at what its like to be an investor, and activist investor . Larry can do whatever he wants. Fabio there he takes pains to not be able to be in a position where hes ever seen to vote. He has 120,000 plus corporate actions per year. Wideout why . When one of his client comes up its also going to be the same person that the activists are going after. He will get a call from a client that is the target of a pension fund. Hes never completely innocent. His Small Cap Value fun runs a turnover of 130 to 140 per year. He can also take the elevator down if you stories and a few stories and telephone managers not to be so concerned. They are looking at what carl icahn does and deciding whether to pile on and enjoy and join him or not. Erik who does affect this the relative shortterm is in a buyback and dividend increases they implement . Fabio look at the holdings of carl icahn, ebay, apple. He is not a pump and dump guy. Stephanie and there are pumped and dump activist investors that are giving a bad name to the whole posse. Fabio very few, and all of the studies indicate, do they perform after the activists sell . How much do they pop before hand . And you have found no correlation to performance before and afterward. Stephanie people argued dan loeb was out of yahoo by the time Marissa Mayer by the time she sat in her seat, he was not in the trade anymore. Fabio he may well have got not one wrong. Have gotten that one wrong. He mightve also wanted to do some other things. Stephanie i think people were criticizing him saying, you are out of the trade, but you know, it still works. Fabio it might never have happened alone. Stephanie always a pleasure to have you on. Erik coming up, we will be talking with some of the most successful activist investors. Stephanie im headed to the zone Investment Conference at 1 00 p. M. I will be speaking to Barry Rosenstein from jana partners. A very wellknown activist. And then at 1 30 p. M. , the one and only bill ackman. I better have an herbalife shake to get my Energy Levels up. Quick this is market makers, with Erik Schatzker and Stephanie Ruhle. Erik you are watching market makers. What are you laughing about . Stephanie i love the show. I love being on the show with eric. In one minute you will find out who else is here and he is almost a special. Erik we need to bring you some news right now. John chambers is not really going away. After more than 20 years he is stepping down as the ceo of the Computer NetworkGaming Company and his replacement is chuck robbins, who has been with cisco since 1997 and has been in charge most recently of the cisco worldwide operations, chambers will be the executive chairman, chairman of the board, of course and he will have to do deal with new arrivals. The new ceo of mcdonalds says that the key to ending a sales slump is improving cooperation. They are restructuring the chain. Mcdonalds is also going to shift more of his restaurants towards owners cut costs and return cash to shareholders. The company is trying to rebound from its worst sales slump in a decade. Lets take a look at how the market feels about this. Underwhelmed, i would say. Greece is playing beat the clock again three days before the next decision on emergency aid. The two sides just wrapped up four days of talks, the greek government is still opposed to cutting pensions while raising the sales tax. The socalled red line, still Officials Say the degree should have enough cash to make its 243 million payment to the imf week. Investors must believe that it cannot get any worse for gambling stocks in macau. Shares rose anywhere from 3 to 5 today after we learned their gaming revenue fell 39 last month, the second month of decline. In pro basketball the Associated Press says that Stephen Curry will be named stephanie thank gosh, think goodness im here. To show how big a basketball fan i am. Erik im breathing a big sigh of relief that stephanie is here and has her game on. Stephanie you are not on the floor yet, stop talking. Erik what on you finish this, coruy . Stephanie the Golden State Warriors beat memphis yesterday in game number one of the western conference semi finals. Cory wait, it ends with stephanie you are not on this Television Show and are not allowed to speak. Cory it has been if thrilling season 14 thats been horrible the whole time ive lived in california. Erik its not enough to get me interested, im afraid. Cory what if it was on rollerskates . Erik basketball on skates would be something else. Stephanie we did not bring you here to talk about basketball even though you live in california and are abnormally tall. Cisco, the big chain a cap John Chambers is moving upstairs to the chairmans job. Im not sure if you are aware, i would like to bring in our bloomberg west editor at large cory johnson. And from idc research we have more from singapore. Crawford, lets start with you since corey has the home team advantage. What do you think . Crawford i have been following this for a long time and i think they have gone to the stage of knowing what they want to be and they are kind of testing where they want to go with things like consumers and i think that now is about rallying the sales force and execution. They are steadily gaining shares in parts of the Server Market executing well with new acquisitions and i think that they want to get a larger slice of the pie. Chuck is the guy to keep them executed to go after that visi