Newsletter: California Inc.: A big ship celebrates a big milestone
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.
Good news for California: The Golden State added 59,600 jobs in April. Unemployment, which has been steadily declining, dipped to 5.3%, closer to the national rate of 5%. In fact, April marked California’s lowest unemployment rate since June 2007. Go team.
LOOKING AHEAD
Green Dot: This is a big day for Steve Streit, chief executive of Pasadena prepaid debit card company Green Dot. Streit, a former radio DJ, founded Green Dot in 1999 and grew it into one of the nation’s biggest debit card firms. But after a few rocky years, one of the company’s big investors wants Streit out as CEO. At the company’s annual meeting Monday, San Francisco hedge fund Harvest Capital will ask shareholders to elect three new board members to replace Streit and two other longtime Green Dot directors. It didn’t help that last week the company’s Walmart-branded debit cards experienced an outage that customers said left them unable to access their money or make purchases.
Creativity talks: Fast Company, the magazine that focuses on the business and culture of the technology industry, will hold its second Creativity Counter-Conference in Los Angeles on Tuesday and Wednesday. The event will include visits to local businesses such as Whisper, Northrop Grumman, Awesomeness and Clique Media Group. Speakers will include actress Geena Davis, wrestler John Cena, Dreamworks Animation founder Jeffrey Katzenberg and hip-hop mogul Russell Simmons.
New store: Whole Foods Market, the Austin, Texas-based grocery chain known for organic and natural foods at high prices, will try something new in Los Angeles’ Silver Lake neighborhood starting Wednesday. That’s opening day for the first 365 market by Whole Foods, a concept store that seeks to marry the high quality that Whole Foods is known for with lower prices. The goal is to attract new shoppers, including younger people with less disposable income.
G-7 meeting: President Obama will meet with the leaders of Canada, France, Germany, Italy, Japan and Britain on Thursday and Friday during a gathering of the Group of Seven industrial nations in Mie, Japan. The leaders are expected to discuss fiscal and monetary policy, the international financial system, sustainable development and issues such as money laundering and tax evasion. Japan increasingly has favored more proactive fiscal stimulus, joining France, Italy and Canada, which are increasingly at odds with Germany’s pro-austerity stance.
Free admission: The Queen Mary in Long Beach will celebrate the 80th anniversary of its maiden voyage with free admission and special activities on Friday. The storied ship — prized as a feat of engineering and luxury in its time — will open a new art gallery featuring works by Britain’s World War II prime minister, Winston Churchill. A new hourlong documentary, “Queen Mary: Greatest Ocean Liner,” a co-production of the BBC, BBC Four, the Smithsonian Channel and Scottish Television Productions, will be screened in the Queen Mary’s theater during the anniversary weekend.
THE AGENDA
Monday’s business section looks at the challenge of equipping vehicles with air bags. Driving a 2002 Honda Civic, Huma Hanif was traveling on a highway outside Houston when the high school student ran into a car in front of her. Her car was equipped with an air bag made by the Japanese supplier Takata. The bag ruptured in the collision, sending a metal shard into her neck, and the 17-year-old died at the scene. It was the 10th fatality in the United States linked to Takata’s defective air bags. “Are air bags worth it? The answer is yes,” says one consumer advocate. But the safety innovation has come at a price.
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:
Out of business: Sports Authority will close all of its 450-plus stores across the United States after it was unable to secure a buyer, according to a court filing. The retailer had 76 stores in California as of last month, according to its website. Based in suburban Denver, the company was once the nation’s largest sporting goods chain with stores in 41 states and Puerto Rico. However, it struggled to compete against mass-merchant discounters, online retailers and specialty high-end outlets and filed for Chapter 11 bankruptcy protection in March. The company had intended to restructure, but was unable to reach an agreement with creditors and lenders. Its assets were sold to a group of liquidators that will hold going-out-of-business sales starting this week.
Missed call: Frontier Communications said that by this week it should resolve the backlog of phone and Internet service problems that cropped up during the company’s tumultuous takeover of Verizon FiOS service. More than 200 customers in California still are without phone service, Frontier’s West region president, Melinda White, told members of the Assembly Committee on Utilities and Commerce in Sacramento. Lawmakers pounded White over her company’s problem-plagued rollout in Southern California, which they said was unacceptable. Lawmakers also expressed displeasure with the California Public Utilities Commission, saying regulators should have known Frontier may have been biting off more than it could chew.
Title loans: Payday loans aren’t the only type of expensive consumer credit that start out as a short-term financial solution but often turn into long-term debt traps, according the Consumer Financial Protection Bureau. Consumers who take out auto-title loans often are unable to pay by the due date and refinance repeatedly to retain possession of their vehicles, the bureau found after analyzing millions of loans. Even then, about one in five borrowers lose their wheels, according to the analysis. The report is the latest in a series of studies released by the federal agency as it pushes for a broad set of new rules governing companies that provide short-term consumer loans, typically at high interest rates.
Crowded skies: A record 231.1 million passengers are expected to travel on U.S.-based airlines this summer, a 4% increase over last summer. That was the forecast from Airlines for America, the trade group for the nation’s air carriers. The prediction is good news for the airline industry, but it could mean major headaches for summer travelers who can expect even more gridlock at airport security checkpoint lines. Based on booking demand, the travel site Orbitz predicts that Los Angeles International Airport will be the nation’s busiest airport for the Memorial Day weekend.
New look: As Taco Bell expands into new neighborhoods, the drive-thru mainstay wants people to come inside and sit down more. So it’s trying some new looks, starting with four of its restaurants in Orange County. But don’t expect table service or a wildly revamped menu. The remodeled restaurants — in Brea, Newport Beach, Santa Ana and Tustin — are to debut in the summer, each featuring one of four designs that the fast-food chain is testing for further rollout next year. The styles are a Mission Revival-esque architecture with white walls, tile and “heavy timbers;” a “rustic” modern look; an “urban edge” interior; and a design dubbed California Sol that includes an expanded outdoor dining room.
WHAT WE’RE READING
And some recent stories from other publications that caught our eye:
Drug prices: An eye-opening report from Bloomberg on how Big Pharma uses charity programs to cover drug price hikes. “Meanwhile,” says one doctor, “they’re bankrupting the healthcare system.”
Short timers: The cleaning-services startup Managed by Q requires all its new hires to join its cleaning crews, regardless of their new position. As Fast Company tells it, the company feels this gives everyone a sense of shared mission. But “it is an inescapable fact that some must clean hundreds of nights per year, while others will be free to try it roughly once.”
Print Shop: “Once upon a time,” says the Atlantic, “long before there were smartphones or emoji, computer graphics were crude, pixelated and often came screeching out of a dot matrix printer.” This is how a program called the Print Shop shaped today’s visual shorthand.
First World woes: Quartz offers a wake-up call on the subject of sleep deprivation. It’s become “the trendy new cause of the uber-wealthy” and “a particularly insidious brand of privilege.”
Time for nachos: The Wall Street Journal warns that “America has built up a glut of cheese so big that every person in the country would need to eat an extra three pounds this year to work it off.”
SPARE CHANGE
From a glut of cheese to a complete lack of cheesy comestibles. Ladies and gentlemen, without further ado, the cheese shop sketch. (For the record, I too am one who delights in all manifestations of the Terpsichorean muse.)
For the latest money news, go to www.latimes.com/business. Until next time, I’ll see you in the Business section.
David Lazarus’ column runs Tuesdays and Fridays. He also can be seen daily on KTLA-TV Channel 5 and followed on Twitter @Davidlaz. Send your tips or feedback to david.lazarus@latimes.com.
