Newsletter: California Inc: Where’s the line when a president also happens to run a business?
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.
It will be interesting to see how CEO Elon Musk puts a positive spin on things after Tesla announced Friday it will lay off about 7% of its full-time employees as it faces a “very difficult” road ahead to increase Model 3 production while getting the price down enough to reach a broader customer base. Musk called last year “the most challenging in Tesla’s history.”
MLK Day: Monday is Martin Luther King Jr. Day. Financial markets are closed. Also, some scheduled economic stats might not be issued because of the partial government shutdown.
Jobless claims: Weekly jobless claims come out Thursday. For the week ended Jan. 12, initial claims for state unemployment benefits decreased 3,000 to a seasonally adjusted 213,000. Data for the prior week were unrevised.
Shutdown cost: The House Ways and Means Committee will hold a hearing Thursday on the partial government shutdown’s effect on taxpayers.
Home sales: New home sales for December come out Friday. John Burns Real Estate Consulting, a California housing research firm, estimates that sales of newly built homes fell 18% in the month compared with a year earlier.
New flicks: If “Interstellar” left you wanting more Matthew McConaughey and Anne Hathaway, here comes “Serenity,” a thriller with apparently more going on than meets the eye. Also opening Friday is “The Image Book” from Jean-Luc Godard, which “examines civilization on the verge of collapse through a provocative mix of cinema clips and news footage.” Fun!
Monday’s Business section shakes its head at the unprecedented circumstance of a president who also happens to own a hotel down the street from the White House. Countries, interest groups and companies like T-Mobile — whose future will be shaped by the administration’s choices — are free to stop at both and pay the president’s company while also meeting with officials in his government. Such visits raise questions about whether patronizing Trump’s private business is viewed as a way to influence public policy.
Here are some of the other stories that ran in the Times Business section in recent days that we’re continuing to follow:
Low energy: PG&E Corp. said it plans to seek bankruptcy protection because it faces potential liabilities of $30 billion or more from the deadly California wildfires, a move that halved its already battered stock price and prompted its chief executive to quit. The filing also might set the stage for PG&E’s sale, though it’s also possible that California lawmakers could eventually attempt to help the company.
Salvaging Sears: Eddie Lampert, the billionaire who has hitched his career and reputation to a fading American retail icon, will get another chance at reviving Sears Holdings Corp. He won a bankruptcy auction with a plan that will keep the bankrupt company in business and save thousands of jobs. The agreement still needs to be approved by the U.S. judge overseeing the bankruptcy.
On the waterfront: A U.S. Supreme Court ruling clearing the way for drivers to sue trucking companies could have a major impact on the labor battle that has raged for years at Southern California’s ports, according to worker advocates. Trucking firms may not block workers from filing class-action lawsuits, even if they consider the workers to be independent contractors rather than employees, the court ruled.
Shane, come back! The Trump administration said it would call about 36,100 additional IRS employees back to work — without pay — to process tax refunds. But even if the shutdown ends soon and the agency gets back to full staff, the damage to this tax season might already have taken place because of less training time for IRS employees, difficulty hiring seasonal workers to help process returns and a slowdown in getting crucial IRS guidance to tax preparers.
Spaced out: In a reversal of a deal local officials had touted as a win for Los Angeles tech, SpaceX will no longer build its Mars spaceship and rocket booster system at the Port of Los Angeles. Instead, work to build and test the prototype will be done in south Texas. SpaceX said in a statement that the decision was made to “streamline operations.”
WHAT WE’RE READING
Some recent stories from other publications that caught our eye:
To the mattresses: The New York Times remarks on the rise and fall of Paramount, once one of Hollywood’s most respected movie studios. “After decades of nearly slapstick mismanagement — spinning off TV and missing the internet — the studio behind ‘The Godfather’ is fighting for its life.”
Lessons learned: The New Yorker examines the “social-justice imperative” behind the L.A. teachers strike. “It forces the question: What would it mean for our democracy and our American self-image if the public schools in our second-largest city were only for the least privileged?”
Ch-ch-changes: Wired raises some interesting questions about Facebook’s “10-Year Challenge,” in which users are encouraged to post pictures from a decade ago and now. “Imagine that you wanted to train a facial recognition algorithm on age-related characteristics and, more specifically, on age progression ... Ideally, you’d want a broad and rigorous dataset with lots of people’s pictures.”
To be or not to be: An intriguing rumination from the Atlantic on so-called existential therapy, which some people use to bring meaning to their lives. “Unlike other animals, humans are conscious and aware of their own mortality — but that means they have the possibility, and responsibility, of deciding in each moment what to do and how to be.”
John Bogle: Vanguard founder John Bogle passed away last week. The Wall Street Journal observed that “through the sheer force of his will, Mr. Bogle, known as Jack, almost singlehandedly made index funds — which hold virtually every security in a given market — a practical and popular option for institutional and individual investors alike. He created the first mutual fund tied to an index in 1975.”
Where will the coming robot uprising begin? Check out this video from Bloomberg, which showcases China’s ambitious goal of dominating the cyborg landscape. “For two weeks each year, college students take over a massive stadium and fill it with fighting drones, plastic ammo and rapt spectators. This is Robomasters, held in Shenzhen by DJI, the world’s leading drone maker.”
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.
Totally Worth It
Be your money's boss! Learn how to make a budget and take control of your finances with this eight-week newsletter course.
You may occasionally receive promotional content from the Los Angeles Times.