Newsletter: California Inc.: At the box office, another fine mess
Welcome to California Inc., the weekly newsletter of the L.A. Times Business Section.
I’m Business columnist David Lazarus, and here’s a rundown of upcoming stories this week and the highlights of last week.
Maybe this will help clear up the smog. Fiat Chrysler will pay about $800 million to settle allegations that it cheated on emissions tests involving nearly 104,000 Jeep sport utility vehicles and Ram pickup trucks, including about 13,000 in California. It will fork over $400 million in civil penalties to the federal government, California and other states, and more than $100 million to make environmental mitigation efforts and provide customers with software updates.
LOOKING AHEAD
Profits look: This week will be a big one for gauging the legitimacy of concerns over corporate profits, a key underpinning of stocks. Wall Street’s biggest banks post fourth-quarter results, with Citibank up first on Monday, followed by Chase and Wells Fargo on Tuesday and others later in the week.
Sears bids: An auction to determine if Sears can stay in business will be held Monday with the results disclosed by Wednesday. Edward Lampert, chairman of the bankrupt retailer, is bidding more than $5 billion to keep 425 stores open, but some creditors want to liquidate the company after losses totaling more than $11 billion since 2011.
Hi there: Los Angeles city and county tourism officials will disclose estimates Wednesday for 2018 visitation numbers. A record is likely despite the various trade disputes. In 2017, the county hosted 41.2 million domestic visitors and 7.3 million international visitors, a 2.6% increase over the year before.
Santa sales: How did stores do during the holiday season? December retail sales will be released by the Commerce Department on Wednesday. Early indications are that total sales were up despite disappointing results released by Macy’s last week indicating mall-based stores probably didn’t do as well.
New movies: Can M. Night Shyamalan do it again? We’ll find out Friday when the writer-director revisits his superhero world with “Glass.” I’m much more excited about seeing “Stan and Ollie,” a depiction of the last hurrah of Stan Laurel and Oliver Hardy, who remain the greatest one-two punch in comedy history.
MONDAY’S AGENDA
With the partial federal government shutdown now the longest on record, its effects are being felt across a broad spectrum of industries. In the financial sector, initial public offerings have come to a grinding halt due to the closure of the Securities and Exchange Commission. And the protracted political struggle over funding of a border wall even has the potential to threaten America’s top credit rating.
STORY LINES
Here are some of the other stories that ran in The Times’ Business section in recent days that we’re continuing to follow:
Leaner SpaceX : Elon Musk’s rocket company announced a surprising round of layoffs, about 10% of its workforce, even as it launches satellites into space, works on sending astronauts to the International Space Station and builds a rocket capable of reaching Mars. The Hawthorne company last year announced it was seeking to raise $500 million in capital.
No crystal ball: The results of the 76th Golden Globes further clouded the Oscar race when the critical and popular hit “A Star is Born” was only recognized for its original song, “Shallow.” Best drama was won by the Freddie Mercury biopic “Bohemian Rhapsody,” reviled by most critics despite Rami Malek’s lauded performance as the dentally challenged rock icon.
Fire fallout: Geisha Williams stepped down as chief executive of PG&E Corp., which may face tens of billions of dollars in damages due to wildfires possibly caused by the utilities power equipment. The San Francisco-based company said Monday it will file for bankruptcy.
Mall reboot: Google will lease nearly all of the Westside Pavilion, a prominent but down-on-its-luck shopping mall that is being transformed into nearly 600,000 square feet of creative offices. The Mountain View, Calif., search giant is in a race with Netflix, Apple and other tech firms to lease up space in Los Angeles to produce original content for internet streaming.
Lights on: A nine-day blackout of nearly three dozen Tribune Media stations — including L.A.’s KTLA Channel 5 — on Charter Communications’ cable system ended when the two sides agreed to a new distribution deal. Charter had refused to pay a proposed fee increase for carrying the stations as it struggles to control costs amid a migration of viewers to lower-cost streaming services.
Executive shuffle: Herbalife’s CEO resigned over unspecified comments he made before taking leadership of the Los Angeles supplement maker. Richard Goudis will be replaced on an interim basis by former chief executive and current executive chairman Michael Johnson. Herbalife said the comments were “contrary” to “expense-related policies and business practices” but unrelated to financial reporting.
WHAT WE’RE READING
And some recent stories from other publications that caught our eye:
Them too: The New York Times says change finally may be coming to the dismal science. “The economics profession is facing a mounting crisis of sexual harassment, discrimination and bullying that women in the field say has pushed many of them to the sidelines — or out of the field entirely.”
New equilibrium: Bloomberg says drugmakers are on a collision course with President Trump as pharmaceutical prices keep rising. “Drug pricing is going to continue to be an issue going forward,” said an Amgen executive. “You’re going to see a new equilibrium.” Whatever that means.
Hip to be square: From the Wall Street Journal, a look at how health-conscious, environmentally friendly hipsters are becoming hunters. “Want organic, sustainable meat? Kill it yourself, say veteran hunters trying to appeal to the next generation of recruits to keep the sport alive.”
Coming on strong: The New Yorker profiles Sen. Elizabeth Warren, an early candidate for the Democratic presidential nomination, and examines her populist war on Wall Street. As she says: “Our government systematically favors the rich over the poor, the donor class over the working class, the well-connected over the disconnected. This is deliberate, and we need to call this what it is — corruption, plain and simple.”
Big story: A fascinating essay in the Atlantic about what it’s like to be too fat in America. “The government definition of obesity is a body mass index of 30 or more. My BMI is 60.7. My shirts are size XXXXXXL, which the big-and-tall stores shorten to 6X. I’m 6 foot 1, or 73 inches tall. My waist is 60 inches around. I’m nearly a sphere.”
SPARE CHANGE
Because who better to do it, filmmaker and pop culture maven Kevin Smith lays out the history of Spider-Man in film and television in this too-cool Wired video. I’ll bet you didn’t know that there’s actually a connection to “The Sound of Music.”
For the latest money news, go to www.latimes.com/business. Mad props to Laurence Darmiento for helping put this thing together.
Until next time, I’ll see you in the Business section.
