>> from bloomberg world headquarters in new york come i am mark crumpton. this is "bottoml line." today change in the driver seat. alan mulally announces his exit from ford. then, janet yellen says we are not done resolving too big to fail. today bloomberg tv takes you inside pepsico. to our viewers in the united states and those of you joining us from around the world, welcome. full coverage of the stocks and stories making headlines today.

eddie lou is at the pepsico innovation center in new york. peter cook in the washington area with the latest on the crisis in ukraine. matt miller has the latest on the c street -- see suite crisis. alan mulally will step down in august, trying to make way for the ceo mark crane to take the reins. >> we looked at executives inside the industry and outside the industry, but alan and i cap coming back to the fact that without mark was the best -- kept coming back to the fact that we thought our quiz the best candidate. we really did the due diligence, but the more we did, the better we felt about mark. >> i am so confident in for going forward. i will be their best cheerleader. i cannot wait to see profitable growth going forward. i am very passionate about

product. on leadingls vision the industry through innovation, because it is exciting and great for our customers, but it is the products in the innovation that first brought me to or 25 years ago. >> my colleague matt miller joins me in studio. >> mark fields is really afford man through and through. he has been at the company for quarter of a century. it was really his second major job. started out at ibm but did want to harvard and then went to ford. at 28 he was starting there. 38 he was running mazda. they then put him in charge of the premier group, which at the time was range rover, outlier -- jack choir. -- jaguar. then they brought him back to the u.s.. in a time with the company was

making record losses, he was able with the help of alan mulally and bill ford to turn it around. thaty the change now? >> is a good question. r years he-- fopr said he would serve through the end of 2014. there was so much talk about whether he would become ceo of microsoft. there was big speculation. he never came out and denied it. finally he did say he would not take the position of ceo of microsoft. i think because of that, because he was in talks with the company and its skewed focus from the product to the people at ford, who is a good reason to move it forward. the company said they were ready and did not want to wait.

>> auto numbers came out and gm came out on top. them and chrysler with games. gm beating estimates. for doing worse than expected, a little bit of a drop. the problem there is the cars. a nine percent drop in car sales. the trucks were up eight percent. they really need to do something about this. i think this is mark fields first order of business. you heard him say product, product, product. you probably know all in better -- alan mulally than any journalist in the country. what is his legacy? >> he will be remembered as the greatest turnaround ceo, greatest turnaround master of corporate history in my lifetime. we have not seen anything like this. the company was on the brink of

bankruptcy. competitors actually failed. what's not really an option for ford because it was a family run company. bill ford brought in alan all of the right skills and talent in connection to make it work, not to mention the personality. a great guy and everyone loves him right off the bat and was very successful. will be interesting to see where he goes next. >> thank you very much. lex vladimir putin calling on ukraine to remove its military from southeastern parts of the country in order to the escalate the ongoing crisis. he made the suggestion in a phone call with on july merkel. chancellor merkel is on her way to washington were meeting with president obama. on theook has the latest crisis. including the view from one of russia's baltic neighbors. is right. vladimir putin's call for

ukraine to remove military from its own territory took us got from the white house. calling a preposterous and the white house press secretary. the country's acting president can seize. the government is losing control of the eastern part of the country to progress in nationalist. storming the regional prosecutor's office today, the .atest sign of the unrest the latest confrontation in eastern ukraine. 50 people being held hostage in those facilities. including eight observers from the organization for security operation in europe. terkel asked him to help when the release of the monitors. a scene from the past in moscow.

vladimir putin being praised. meeting with vice president biden. i asked her if she thinks vice president putin is trying to bash the vice president trying to reconstitute the ussr. to.e would like nonetheless i think it is a reversible, the collapse of the ussr. the -- on the anniversary of the membership in the eu and the anniversary of nato and was reassured by vice president biden that nato, article five is enforced. we are extremely grateful for the u.s. government and other

nato countries for their presence and a half -- for their presence. >> the prime minister welcoming them. she said she raised the possibility of a permanent u.s. military presence with vice president biden during their meeting. things the vice president sanctions in place are enough? >> she says she does the leaves they're having the intended effect of turning pressure up on russia. she also conceived it and escalate that the eu and united states will have to turn up the pressure further and they are prepared to withstand the economic pain that might come from that. this country towns on russia for 100% of its natural gas. again, worried about that. a country that would face potential percussions. , thank you so much. >> coming up, the chairman of the federal reserve says policymakers are taking a fresh

look at how to supervise community banks. we will get reaction from the tank of california based in irvine. ♪

>> welcome back. china could pass the u.s. is the world's largest economy this year. that it's an attention grabbing headline that comes from a bank study. michael mckee says that is just ridiculous. >> one of the sillier things you will read this year. total market value of total goods and services produced in the year. purchasing power parity where you adjust the cost of the old -- things people buy to take into account various exchange rates. the world beside you could buy to gdp. because that this cheaper in china they might pass the united

date by 2013. not evenand foremost, china believes their own economic data. not so bad, were they do not use it to calculate gdp t to calculate it. you have to use exchange rates. in the case of china, it is not fully comfortable so you have to pay an dollars primarily. michael, china's economy is growing faster than the u.s.? >> it is true. eventually you would act them to pass us. china has 20% of the world's population. a question of when and not if they pass us. we have wealth, what

accumulated given the size of the population. even further behind by that measure. you do not care about national gdp about how much you are doing. you are doing a lot better than your counterparts in china. once a problem, you have to divide that by all those people. the u.s. is still way ahead of the chinese. believe chinese do not that report. michael mckee with the real deal. thank you. turning our focus now to community banks. janet yellen address the independent community bankers today in washington. although there is still considerable revenue pressure from low margins, earnings for most community banks have

rebounded since the financial crisis. ratiosuality and capital continue to improve. the number of problem banks continues to decline. is presidentgarman and chief executive officer of bank of california, a community bank based in irvine. welcome. thank you for your time today. thank you for have earned. >> you just heard the fight from janet yellen. did she express concerns about the regulatory guidelines you chairwomang for? >> yellen gave a great speech this morning, really honing in on the topics that community banks and regional banks have been hoping the fed would address and talk about. was the yellen president for six years out here at the federal reserve bank of

san francisco. during that time she developed a strong relationship with the community bankers and had good back and forth to understand the role of the community bank with private business lending and home lending. a lot of the things he talked about today are important to those conditions. likes the chairman did acknowledge a one size fits all approach puts pressure on smaller banks. this congress, in your opinion, need to go back to the drawing board to level the playing field? what would you like to see? importantly she discussed how the fed is taking up and looking at concrete steps to make sure the too big to fail guidelines do not result in the banks turned to big to fail having a competitive and cost advantage over the community banks and regional banks that serve up the engines of the economy out here. so it was nice to hear her talk

about the proactive stance to make sure there are regulatory capital surtax is on things that could disadvantage the community and regional banks. possiblyng of disadvantaging, how is quantitative easing impact and small and midsized banks? have they received the lion share of the benefits? us, we tend toke finance private businesses, are indirectly impacted by the quantitative easing and the impact on rates. not as direct for the two big to fail banks. how it impacts us most is compressions in the mark -- margin. that has incentivized a number of things to diversify cash flow like bank of california and move to a margin business and have the ability to diversify cash flow. lex let me talk to you about you

guys. last week announced bank of california entered into an andement for select assets liabilities that make up a popular community bank. talk to me about the timing of the bank -- of the deal. >> we were very excited last week to announce the acquisition of the popular branch network. inmeans about 1.1 billion deposits and performing loans, mostly to small businesses and against multi-commercial lending. it continues diversification of inverse strain. over 5 billion in assets, which is about sixfold over the past three years. lending to businesses and homeowners in southern california. >> it also allows you to tap into california's rapidly growing latino market.

how important is that? especially with small business critical and is wildly underserved. you cannot serve california and finance the businesses and homeowners without serving the latino community. this community represents the fastest community creation segment in california. ofo the fastest area homeownership growth and something we're very excited about. as we broaden our footprint to build out california's bank, we want to make sure we are serving all of california and the latino community is on the forefront of growth. >> steve shelburne and, community bank based in irvine. the sugarman. great to have you on the broadcast. thank you for your time. lex up next, the white house releases a report on big data. a look at how governments

collects data on your web habits. -- >> up next.

>> breaking news at this hour. health and human services secretary kathleen civilian is holding a conference call to discuss the latest enrollment numbers for the affordable care act. the latest figure, 8 million people have signed up for obama care. account for almost a third of those enrolled. 85% do receive some sort of subsidy. the president's big eta review is out. president obama requested the report on privacy risks surrounding big data back in january after the government's own spying programs were

revealed. megan hughes joins me with more. >> this is looking at the private sector in the wake companies using collect data. a lot of positives. a lot of ways it is used for innovation but can also be used for discrimination. this was let at the white house penny pritzker and gene sperling. federal laws have not kept up with technology. whats where people are, they are buying into their contacting. this group was to look at all of it and the policy issues it raises. it says an important finding that while big data can be used for great social goods, it can be used in ways that perpetrate social harm or render outlook that have an equitable impacts.

small biases have the potential to become cumulative. the the point for big data to help companies get around rules are ready on the books. civil rights protection in the area of housing, employment, credit. also says the group raised questions about what has and said is the notice and consent framework. using information about themselves. the question is, does that still allow people to control privacy as that data is used more and .ore and reused a lot of issues. $156 billion industry. >> what is the report proposing? >> surprisingly, it did have concrete policy recommendations to get to the president.

it laid out six of them. advancing the consumer privacy bill of rights. standards on how personal information is being used. data breachonal legislation that provides for a single standard. extending privacy protection to non-us citizens. making sure data is collected in schools that is collected for educational purposes is not being misused. developing better technical expertise within the government, specifically to look at the discriminatory impacts i was talking about earlier. >> enqueue. 26 past. cristina alesci has the details. >> getting you caught up on where the markets are trading. swinging between gains and losses. the s&p closed last month with a

gain over the time for the third consecutive monthly increase. a couple of individual stocks we're watching. ford.is the ceo will be resigning on the first of july, which is when the current chief operating officer, mark field come a will take over his role. ♪

>> welcome back to the second half hour of "btoottom line." i am mark crumpton. all day today we're taking you inside pepsico with a series of reports and interviews with betty liu. joining me now from pepsico innovation center in new york. today yum! brands said greg fact will replace david no january first. pepsico used to own yum! brands and still have contracts with many of the restaurants, including talk about. >> that is right, long-term

contracts. it used to be a part of the pepsico fold until they spun out the restaurant business back in the 1990's. he still collaborate together very well. dorito locos last summer? i said how does the power of one, leveraging beverages and snacks enter into the food service business? here is how she replied -- i think the food service industry is just at the very beginning. food service equipment innovation. what we have done with all of and testingvations of consumers is already so much excitement that i think in the next five years, food service will be one of the most interesting progrowth

opportunities for pepsi. here instanding right one of pepsico kitchens where they cook up recipes. they cook up chips and chicken and waffles. a chance to see exactly how they put the food on the chip. the definition is literally the blending of culinary arts with food science and technology. thechefs crafting executions are briefed to mimic what is out there and restaurants and then create alternate executions based on their own culinary creativity. value weighted, it is a cross functional team of marketing, food sciences, executives and will furlough --

bring the consumers in and have them taste what we have identified as the gold standard. of what you want the final execution to be. the final mass-produced target should match the gold banded flavor. transition to the cheesy garlic bread. parmesan. this is all about labor -- layering flavors. mozzarella, chatter in smoke the guida -- smoked gouda. that is the culinary gold standard execution that came to final flavor it.'s. >> what happens after? >> once we have identified the experience, they re-create the experience. inevitably they come back to us and evaluating it as a group. know when you have

got it? >> you will find that the flavors are identical and the experience and emotions they evoke are also identical. we do not one to just sell you a potato chip with seasoning on it. >> three different types of garlic. four different types of cheese. >> this has the right elements to give you a dynamic multi-flavored experience, but at the same time make you feel you are eating cheesy garlic bread. very similar. >> i hope so. >> so i promise you, it is not voodoo magic for how they get the cheesy garlic red onto a potato chip. using science to do that. i know you love this stuff. is proprietary technology

pepsico uses. these are glass domes on top of different kinds of food. the flavor molecules to take the chip and get on the chip. the fibers capture the molecules and take them to the lab. toy eventually filter out get the. he of the flavor. then they take that flavor and put it onto the potato chip or beverage of choice. is one way sizzling that pepsico is using to sulk the snacks without putting as much sodium in there. we're all trying to get healthy. i know you are trying to get healthy as well. i will trade -- try to bring you back snacks that fits with your diet. >> betty liu, who gets all the assignment with foods. thank you so much.

with us allo be afternoon on looking inside pepsico. coming up, my land. the ceo will join us to discuss today's earnings release and how she plans to navigate the merger and acquisitions frenzy placating the industry. we will be right back. ♪

>> time now for today's latin america report. results president will cut income taxes and raise cash handouts to the poor. this comes ahead as popularity declines ahead of october. altering the income tax payable to boost take-home pay. also boosting the cash transfers in the social welfare program. the moves are designed to help keep the 36 million and a fishy areas above the world bank up point to the first latin vicecan as though

president, a mexican national who served as executive director director of the world bank in washington. aarged with overseeing portfolio project from jamaica to brazil that totals more than $30 billion. today's latin america report. medical merger and acquisition news. pfizer preparing to sweeten the bid to astrazeneca. that is according to people with knowledge of the matter. the offer may value astrazeneca at more than $84 per share and include a larger cash component. this could happen as early as next week. more news from the generic drug front, boosting profits in the fourth quarter. inting sales on strong sales india and north america. the stock headed higher at the old and only to erase their earnings on the earnings call. joining us is shannon

pettypiece. ofwe have had a lot acquisitions in the pharmaceutical space. a lot of analysts and investors say there is more to come. i know you are looking at eels. what can you tell us about where things are at with acquisition strategy. a big one coming next? >> we have said we absolutely move before years end. we are absolutely in the race. working on a lot of stuff. >> is there some sort of range you have given? >> we have given parameters that would keep us with investment grade and accretive. we have set as far as we are looking at things to be complementary to the asset but have quite a bit of financial and equity flexibility. of the companies was medic. can you update us on the

situation? >> unfortunately laws differ to train the companies. while they had disclosed some of the activity, we have said we will come forward when we think it is an appropriate time to comment. >> the deal with the swedish -- swedish drug maker rejected the offer again for the second time. if it is ever completed, they could reincorporate abroad. you would avoid paying high corporate taxes in the united states. what is the corporate tax liability now, and is this inversion maneuver, is that a wake-up call for congress and the white house to do something about corporate taxes? >> i certainly would hope so. i think it is sad the corporate tax rate is truly incentivizing corporations to leave the united states. i think if you look at the industry in particular i'm at there is almost no one left that is incorporated in the united states or you are at a huge disadvantage. we have said we will not do a deal for tax but could be a

byproduct of the deal as you mentioned. >> is this a question of not paying taxes or question of drilling hands up in the air and saying these are unreasonably high and a hindrance to us doing good business? >> it is impossible to compete. look at acquisitions. being in the single digits have a must -- much better chance of being able to offer more and being very accretive. it is an unlevel playing field that i wish our congress to do something about but barely. now you're the situation where you have lost so many companies and the ones here could be at a more disadvantage if congress would do something that did not look retroactive or holistically at it. know ceos often make the case how this is good for investors and shareholders. is there a case that this is good for patients? we have heard critics say patients could be the one to lose out with less competition

that typically comes with these types of deals. verywill say we have been vocal we're not just about synergy or tax inversion. we believe obviously investing in research and development and bringing important products to the market. the thing -- is incredibly important to keep markets affordable. the patients in need for affordable medicine. so from our perspective, it remains a high importance for us to get product to the market. >> when you see more consolidation going on in big arma, which is where a lot of generic rugs will come from, the future of generic drugs, is that good for the generics industry when there is more consolidation? >> i think anytime capacity is taken out of the market. the reality is lines are getting blurred. we are becoming a global industry.

they have more access to more products. >> you mentioned obamacare, the affordable care act just a minute ago. during this hour from kathleen sebelius, 8 million people have signed up for obama care. a adult 18-30 four account for almost a third of those enrolled. what do you think when you hear those numbers? -- 18-34. >> i think anytime someone has access to health care it is a great thing. if nothing else it has served to a catalyst for opening up the conversation. we know medicine plays an incredible important role in that in keeping people healthy. likes you use the word catalyst, implied a jumping off point for further discussions or tweaking around the edges. >> i am hopeful it is a lot we can continue to work with. to provide access to high-quality health care.

you mentioned in the intro india. where is that coming from? our operational hub and engine for anti-retro viral franchise. we are one of the largest makers of anti-hiv medication. we have been working with governments in providing access in regions around the world. very important medicine. >> chief executive officer at myran. more breaking news this afternoon. they are said to be in exclusive talks for merck's consumer unit. set to pay $14 billion for the merck division. -- bayer. if we could see a deal within days. we will continue to follow that story and bring you more development as soon as we get them.

and we return, elon musk scores a big win in his fight to break up a monopoly on national security space launches. we continue in just a moment. ♪ >> liftoff.

>> >> elon musk opportunity is showing results. spacex is one temporary order blocking the u.s. airport from fighting russian units. it looks as though playing the russian card worked out. >> certainly does. just about 48 hours after they filed a complaint in federal claims court, judge answered wait wednesday and issued a preliminary injunction blocking the air force run by eating anymore russian-made rocket engines after considering " public interest, national

defense and security concerns." ula, a joint venture's uses rd rocket engines in it at list five rocket. controlled by none other than on theprime minister u.s. sanctions list. brought to light are the spacex ceo. the russian argument is just one of several he is using in his monopolytesting the over the pentagon $70 billion military satellite launch market. only venture the certified to operate within the program and it was awarded another 36 launch blocked by back in december. that contract that elon musk wants to stop and reopen for competition. the injunction is a big score for spacex and elon musk. in response, united launch

alliance released a statement is deeply"ula concerned and will work closely with the department of justice to resolve the injunction expeditiously." and went on to say -- fighting words. >> quickly, how big is this for ula? the ceo said they have an engine stop file that will last them a little more than two years. they do not have the capability to produce their own engines at this time. would take them 3-5 years to do that. the concern about supply is certainly legitimate. back to you. next thank you. stay with us. -- >> thank you.

♪

>> get the latest headlines on bloomberg.com, and streaming on your ipad. on the market is next. i will see you tomorrow. it is 56 past the hour,

which means bloomberg television is on the market. i am cristina alesci. adding you caught up on where stocks are trading. it looks like stocks are swinging between gains and losses today. we want to highlight a couple of those stocks for you. first, weight watchers. shares of the weight-loss shares provider surging by the most in more than three years. the company is endorsed by celebrities, including jessica simpson, reported better than anticipated first-quarter earnings. also watching yelps. upgraded the online review sites, saying it is a logical for for half a dozen large companies. the recent 40% stock dropped as well as a young, special appeal attractive for suitors. also watching sprint as the telecom giant pursues a bid for smaller rival, t-mobile. joining me with a look at what this can mean for the company and telecom industry is john butler. >> hi, christina.

>> what do you think this could mean for the industry? >> head of softbank, which owns is absolutely bent on buying t-mobile, and the reason is, he needs that scale to compete with at&t and verizon. t-mobile and sprint on their own, they are barely hanging on right now. the combination makes good sense. >> right. the question is whether or not regulators will sign off on it. the other news is at&t mame make a bid for direct tv. what is the rationale given that directv does not have spectrum? dish does. is this a ploy to get dish moving on a potential deal with at&t? think so.ot as you look at telecom and how it is playing out, it is all

about video. i think at&t oaks at directv and says the combination of their 5.7 million video with direct to ectv's 20 million gives them instant scale in the video business and great skill of leverage with content providers as they try to get video onto the wireless network. they still need to negotiate those deals tom and if you have almost 30 million you have leverage. >> what do you think verizon will do when they see at&t do something, it kind of grabs their attention as well? >> it does. verizon has been working on the content business for some time now. they have struck a deal with red box. surely in thatut direction. i think all need to. in terms of merger and acquisition chatter, i have not

heard any surrounding verizon. it does not rule it out for any of these guys. been a bigon has theme in telecom and media over the past several years. i do not think it is over yet. to paid it comes television in particular, some of the paid tv companies have their own challenges to take on. they might go deeper into content. inc. you so much. on the markets again in 30 minutes. "street smart" is up next. ♪

>> ok, we have the dow in negative territory right now after it had hit a new record of aon this third day rather flat stock market. traders waiting for the jobs number and big linkedin report. starts right now. ♪ >> welcome, everyone, to the most important hour of the session. coming up today i'm at the justice department setting its