Newsletter: California Inc.: A new era is ready for takeoff at LAX

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.

Trading resumes Monday with dark clouds over the retail sector. J.C. Penney said Friday it will close up to 140 stores over the next few months and seek the “early retirement” of about 6,000 workers. Macy’s, Sears and other big-store operators are similarly trying to find their footing in an Amazon-dominated world. Nordstrom Rack is one of the few exceptions, reporting robust online growth.

LOOKING AHEAD

Airport expansion: On Monday, Los Angeles International Airport officials and Mayor Eric Garcetti will hold a groundbreaking ceremony for the $1.6-billion Midfield Satellite Concourse, a new facility that will add 12 boarding gates between the north and south runways. Construction for the new concourse is expected to begin in the next few months, with completion scheduled by 2019.

Free college: State lawmakers will hold a hearing Monday in Sacramento to consider a plan to help California students get through college without debt. Rising debt loads have burdened students, and some economists fear they could crimp economic growth. Assemblyman Kevin McCarty (D-Sacramento) is proposing the state spend $3.3 billion annually to cover both tuition and students’ living costs.

Power issues: Sempra Energy, parent of Southern California Gas and San Diego Gas & Electric, will report its earnings Tuesday. The company’s financial outlook may be influenced by a debate over the reopening of SoCal Gas’ Aliso Canyon natural gas storage field. Aliso Canyon has been shut down since a disastrous methane leak in fall 2015. Residents are demanding that the field be permanently shut.

Food for Fed: The Commerce Department releases numbers Wednesday for consumer spending and personal income in January. The data will be closely scrutinized by Federal Reserve policymakers in determining whether to raise the benchmark interest rate at their March meeting. The Fed raised the rate for only the second time in a decade in December.

Snap for sale: The much-awaited initial public offering of Snap — the company behind the messaging app Snapchat — is set to take place Thursday. It will likely be the biggest IPO ever for a Los Angeles company. This offering is also unique in that Snap will offer new shareholders exclusively nonvoting shares, something no company has tried before in a public debut.

THE AGENDA

Monday’s Business section notes that the stock market hates uncertainty, so one might assume Wall Street would be skittish about President Trump. Far from it, at least for now. Stock prices have continued setting record highs as investors brushed aside both Trump’s controversial policy actions in his first month in office and the uncertainty about how his planned agenda of tax, regulation and trade reforms will play out. But warning lights are flashing about the market’s ability to sustain the trend.

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:

Tax changes: Treasury Secretary Steven Mnuchin is making tax reform his top goal. Mnuchin said the administration wants to cut income taxes for middle-class workers, as well as simplify and reduce business taxes to make them more competitive with those of other nations And the Trump administration wants it done by August.

Adios, workers: Some California businesses are worried that President Trump’s aggressive crackdown on illegal immigration could create a labor shortage in the state. About 45% of agriculture workers and 21% of construction employees in California are in the country illegally. Even if workers are not deported, many of them will leave the country voluntarily, predicts one agricultural contractor.

Adios, bank execs: Wells Fargo fired four senior managers in connection with the scandal over unauthorized bank accounts opened without customers’ knowledge or consent. The four executives worked or oversaw parts of the bank’s business believed to be the most deeply involved in the unethical practices. The executives will not get 2016 bonuses and will forfeit all of their unvested equity awards and vested outstanding options.

Nasty business: By 2012, Los Angeles’ Nasty Gal was a fashion world success story, growing from an Ebay store to nearly $100 million in sales in just six years. But now CEO Sophia Amoruso is gone and Nasty Gal is being sold to British online retailer Boohoo.com for $20 million. So what went wrong? It’s a tale of excess and operational miscues in the ultra competitive fast-fashion industry.

Certified pre-owned: The former North American headquarters of Japanese car manufacturer Toyota is for sale. The Torrance property features 18 buildings on multiple city blocks, a data center, five diesel power generators, two helipads, two dining centers, one cafeteria, a tennis court and a fitness center. It also has 8,000 parking places. Toyota announced its plans to leave Torrance for Plano, a suburb of Dallas, in 2014.

WHAT WE’RE READING

And some recent stories from other publications that caught our eye:

Corporate overdrive: The New York Times looks under the hood of Uber’s aggressive workplace culture. “The ride-hailing service particularly emphasizes ‘meritocracy,’ the idea that the best and brightest will rise to the top based on their efforts, even if it means stepping on toes to get there.”

Pharmacy ripoffs: A stunning story from Bloomberg about restrictions on pharmacists telling patients they’re being overcharged for meds. Contracts “prohibit pharmacists from ... suggesting customers obtain the medication cheaper by paying out of pocket.”

Child poverty: The Orange County Register notes that a quarter of California’s children 5 and younger were living in poverty as the state emerged from the Great Recession. It also serves up a telling interactive map from the Public Policy Institute of California showing where child poverty is heaviest.

Tracking Trump: Buzzfeed has logged more than 1,500 people and organizations connected to the Trump administration in an attempt to illustrate his massive network of business and personal interests. “His family and advisers have touched a staggering number of ventures, from a hotel in Azerbaijan to a poker company in Las Vegas.”

Trumping tracks: Wired says people should more mindful of the Trump administration delaying a $637-million grant to electrify Caltrain, Northern California’s commuter rail system. The administration “didn’t just deal a temporary blow to the health and economy of the Bay Area. It may have launched the opening salvo in what could be a war against public transit, with national consequences.”

SPARE CHANGE

A no-brainer: That story about Caltrain makes me wonder what’s the best train song ever (and there are plenty). Glenn Miller’s “Chattanooga Choo Choo” casts a long shadow. As do various versions of “Midnight Special” (I’m partial to Creedence). Of course, there’s Arlo Guthrie’s classic version of “City of New Orleans,” and Johnny Cash has so many train tunes he practically owns the genre. But for me, the mother of all rail raves is this fine ditty from the King.

For the latest money news, go to www.latimes.com/business. Mad props to Scott J. Wilson for helping put this thing together.

Until next time, I’ll see you in the Business section.