Welcome to California Inc., the weekly newsletter of the L.A. Times Business Section.
I’m Business columnist David Lazarus. Merry Christmas. Here’s a rundown of upcoming stories this week and the highlights of last week.
The Golden State received an early present Friday when it was announced that we added 47,400 net new jobs last month and the unemployment rate dropped to 4.6%. California’s economy got off to a slow start this year, but picked up steam in the second half. We’ve now added jobs in three consecutive months.
Getty film: Monday brings the premiere of Sony Pictures’ “All the Money in the World,” a movie that almost didn’t make it to theaters this year. The Ridley Scott thriller had originally been filmed with Kevin Spacey playing oil tycoon J. Paul Getty. But after Spacey was accused of sexual misconduct in October, he was cut from the film and all his scenes were re-shot with Christopher Plummer in the Getty role. In the end, the film’s release was delayed by only three days.
Shop around: Just because Christmas is over doesn’t mean the shopping ends. Tuesday is expected to be the fourth-busiest shopping day of the year for traditional retailers — behind Nov. 24 (Black Friday), Dec. 23 and Dec. 16 — according to ShopperTrak, a retail analytics company. Consumers traditionally head to stores the day after Christmas for sales and deals. A survey by the National Retail Foundation found that 5% of consumers planned to buy their last holiday gift after Christmas.
Economic indicator: The Conference Board releases its consumer confidence index for December on Wednesday. The index reached a 17-year high last month, a good sign for business and the economy. For the holiday season, high consumer confidence typically translates into greater sales for retailers. Bearing that out, MasterCard reported in mid-December that 2017 was looking to be the strongest holiday season for retail since 2010.
Taxing issues: The end of the year is always a time to make last-minute money moves to minimize taxes, but this year brings a new urgency. The tax bill passed last week means that financial pros are hurriedly advising Americans on what they need to do before 2017 ends. Some suggest paying your mortgage and property taxes early, though that advice doesn’t apply to everyone. Since Dec. 31 falls on Sunday, most tax-related moves have to be done no later than Friday.
Changes at the top: Sunday is the last day on the job for some top executives. At Vanguard Group, Bill McNabb will depart as CEO and be replaced by Tim Buckley. GoDaddy CEO Blake Irving is retiring and will be replaced by Scott Wagner. Amtrak co-CEO Wick Moorman will exit that role after six months serving as co-chief executive alongside Richard Anderson. Gerald L. Hassell is retiring as chairman of the board at the Bank of New York Mellon and will be replaced by Charles W. Scharf.
Monday’s Business section looks ahead to the flurry of retail returns expected to follow Christmas — and how this represents an opportunity for a company that specializes in taking back things bought online. Santa Monica’s Happy Returns sits at a unique intersection of frustrations: Customers who buy things online don’t like the hassle of online returns. Online-only retailers, feeling pressure from the likes of Zappos and Amazon to offer free returns, are bleeding cash to do the same. And bricks-and-mortar stores losing foot traffic to online competitors are struggling to entice people back.
Here are some of the other stories that ran in the Times Business section in recent days that we’re continuing to follow:
Tax plan: President Trump signed a sweeping tax-cut measure — his first major legislative achievement — before heading off for Christmas vacation at his Florida resort. Congress gave final approval to the $1.5-trillion package two days earlier, after the House took an unusual do-over vote to clear up differences with the Senate-passed bill. Trump claimed the bill also repeals Obamacare, pointing to a provision in the bill to end the penalty on Americans who don’t get health insurance.
Utility dividends: Pacific Gas & Electric Co.’s stock took a dive after the utility company announced it will suspend quarterly cash dividends on its common shares, citing uncertainty over potential liabilities associated with the October wildfires in Northern California. The suspension will take effect this quarter, the company said. Power lines and electrical equipment are a leading cause of California wildfires.
Bad burritos? Public health workers are looking into a Chipotle Mexican Grill restaurant in Los Angeles after the company reported that employees there were sick. The company said employees experienced nausea, vomiting and diarrhea at the restaurant at 4550 W. Pico Blvd. Chipotle has been trying to move forward after outbreaks of illness were linked to its restaurants in 2015, an episode that scared away customers and sent the company’s stock falling.
Rules of the road: Uber was dealt another blow in Europe when the European Union’s highest court ruled that the ride-hailing company is a transportation service and should be regulated as such. Uber, headquartered in San Francisco, had argued that it was simply an intermediary technology company that should not be subject to transportation regulation, which could entail additional permit requirements for the company, licensing requirements for drivers and caps on the number of vehicles it puts on the road.
Producer accused: Hollywood producer Gary Goddard has become the latest big-name figure to get caught up in the industry’s sexual harassment scandal. Since actor Anthony Edwards wrote in an online essay last month that Goddard sexually abused him as a young actor in Santa Barbara, seven others from the theater group told the L.A. Times that their former mentor molested or attempted to molest them as boys.
WHAT WE’RE READING
And some recent stories from other publications that caught our eye:
No more free ride? Cable and video streaming companies are getting ready to crack down on password sharing, reports Bloomberg. The head of Charter Communications reported that in one case a single account was being used to access 30,000 simultaneous streams. “It’s a growing problem that could cost pay-TV companies millions of subscribers — and billions of dollars in revenue — when they can least afford it.”
Immigrant entrepreneur: The story of William Fox, the man who put the “Fox” in 21st Century Fox, is one of both great success and great tragedy, reports National Public Radio. Fox, a Hungarian immigrant who came to America as a child in 1879, rose from the slums of New York City to create one of the first large motion picture companies in the United States. Then he lost it all.
Importing addicts: Substance treatment centers pay to bring drug addicts to Southern California, then push them to the street when the insurance money runs out, reports the Orange County Register. Many of them remain in the area, adding to the homeless population. “In a growing number of neighborhoods, residents say they’re dealing with the detrimental effects of a recovery business model that can leave addicts stranded on the streets.”
Tracking UFOs: The New York Times uncloaks a secret government program to investigate unidentified flying objects. The Defense Department says the $22-million program was shut down in 2012, but some insiders say the work continues. “The program produced documents that describe sightings of aircraft that seemed to move at very high velocities with no visible signs of propulsion, or that hovered with no apparent means of lift.”
The UFO story makes me wonder: What’s the best movie about aliens visiting Earth not directed by Steven Spielberg? There are many to choose from. “Independence Day” was cheesy but pretty great. So was “Predator.” But if I had to pick just one film in the genre, it would be the original “Invasion of the Body Snatchers,” which was brilliant both as straight sci-fi and as McCarthy-era political parable.
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.