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.
Looking for a place to stay? Los Angeles has no shortage of luxury hotels to choose from. A recent survey by Forbes Travel Guide found that with the addition of the Waldorf Astoria last year, L.A. County is now home to seven five-star hotels, second in the nation only to New York.
Movie mavens: Starting Monday, Hollywood studios and theater owners will gather at Las Vegas’ Caesars Palace for CinemaCon, the annual entertainment industry confab where film companies show off footage for their summer movie schedule and more. Subscription service MoviePass and industry consolidation will be the hot topics this year.
Outrage du jour: Fresh off a $1-billion penalty from federal regulators, Wells Fargo will hold its annual shareholder meeting Tuesday in Des Moines, home to the bank’s home mortgage division. If it’s anything like last year’s investor get-together, the meeting will feature plenty of outrage from shareholders and customers over the bank’s ever-lengthening list of transgressions.
Hot topic: Starbucks reports its first-quarter earnings Thursday, and its executives are likely to get questions from analysts about the recent arrest of two black men at a Starbucks in Philadelphia and the coffee chain’s plan to close one day next month to conduct racial bias training for its 175,000 employees.
Tax cut impact: On Friday, we’ll get a first look at how the tax cuts affected the economy. The Commerce Department is expected to report that total economic output increased at a 2.2% annual rate in the first quarter, down from 2.9% in the previous quarter.
Avengers assemble: The Avengers are going to infinity and beyond at the box office. Disney’s latest superhero mashup “Avengers: Infinity War,” the 19th film in the Marvel Cinematic Universe, is expected to open with $225 million in the U.S. and Canada, making it one of the biggest debuts of all time.
Monday’s Business section recalls that before he ran for office, Donald Trump made millions of dollars by selling his name to adorn other people’s products. There was Trump deodorant. Trump ties. Trump steaks. Trump underwear. Trump furniture. At one time, there was even a Trump-branded urine test. Now, almost all of them are gone. The decline of the Trump merchandise empire is another sign of how politics has changed the president’s business.
Here are some of the other stories that ran in the Times Business section in recent days that we’re continuing to follow:
Take this job ...: Elon Musk has tweeted that the car business is hell. He experienced another dose of it last week when the Fremont, Calif., electric-car maker closed down the assembly line of its key Model 3 sedan. Experts speculated cutting-edge robotics were being removed and replaced by workers, who will now work round the clock to meet the company’s production goals.
Mega fine: The $1-billion fine that federal regulators levied against Wells Fargo & Co. for consumer abuses in its mortgage and auto-loan businesses was one of the biggest penalties levied against a bank not related to last decade’s subprime lending fiasco. The Trump administration cited the penalty as proof it’s willing to get tough on Wall Street but Democrats and consumer advocates were not convinced.
Southwest tragedy: Federal aviation officials ordered emergency inspections of 352 high-millege CFM56-7B engines, which power most single-aisle commercial jets, for signs of metal fatigue. The fan blade of one such engine broke off in flight, killing a passenger on a Southwest Airlines flight from New York to Dallas. Industry experts doubt the tragedy will dent the business of Southwest, even though it experienced a similar engine failure two years ago.
Legal showdown: The CEOs of AT&T and Time Warner testified in a Washington courtroom, defending the companies’ proposed $85-billion merger against government anti-trust accusations. AT&T chief Randall Stephenson said the telecommunications company, which provides mobile, internet and satellite TV services, needs Time Warner’s HBO and other “premium content” to compete with the likes of Netflix and Amazon.
Expanding universe: Netflix added 7.4 million subscribers in the first quarter, giving the streaming giant 125 million subscribers globally, up more than 25% from this time last year. There also were reports the Los Gatos, Calif., company explored buying Landmark movie theaters in Los Angeles and New York to screen a growing pipeline of content but didn’t pursue a deal because the price was too high.
WHAT WE’RE READING
And some recent stories from other publications that caught our eye:
Thrills, chills: The New York Times serves up a profile of CNN’s Jake Tapper, who is publishing his first novel, a historical thriller with plenty of Dan Brown-esque twists: “A shootout at the Capitol, blackmail, murder, corruption, a stolen dossier, a terrorist attack at the House of Representatives and a top-secret society made up of senior lawmakers, lawyers, chief executives and lobbyists, whose elite members engage in absinthe-fueled debauchery and other unsavory acts.” Fun!
Unfriendly skies: The Wall Street Journal says the fatal Southwest accident highlights the challenge of getting air travelers to follow safety procedures. “Carriers and aviation safety bodies have said emergency landings and evacuations can be complicated by passengers who don’t follow steps laid out in boarding announcements and safety pamphlets.”
Next stop, Jupiter: It’s the 50th anniversary of Stanley Kubrick’s masterful “2001: A Space Odyssey” and the New Yorker looks back at how the film was made and what it means today. “‘2001’ is, in part, a fastidious period piece about a period that had yet to happen.”
A hack too far: From Wired, the fascinating story of teen hackers who snatched the keys to Microsoft’s video-game empire, and then went too far. “One would become an informant, one would become a fugitive, and one would end up dead.”
Soft touch: Bloomberg tees off on the question of why one cashmere sweater costs $2,000 and another might cost less than $30. Nearly $1.4 billion of cashmere garments were exported globally in 2016. “Ubiquity can spell trouble for a product as it becomes more of a commodity, especially one that’s been historically marketed as a luxury item.”
The Atlantic shares a documentary video from ITVS Independent Lens looking at why Kansas’ experiment with tax cuts was such a miserable failure. The state’s Republican leaders said the tax cuts would pay for themselves. “It didn’t happen. The cuts threatened the viability of Kansas’ schools and infrastructure; in the first year they were implemented, they resulted in a $700 million revenue loss for the state.”
For the latest money news, go to www.latimes.com/business. Mad props to Laurence Darmiento and Scott J. Wilson for helping put this thing together.
Until next time, I’ll see you in the Business section.