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’s earnings season, so all eyes are on corporate balance sheets. Last week, big banks reported solid numbers, with JPMorgan Chase, Citigroup and Wells Fargo each posting profit and sales numbers that exceeded analyst expectations. However, Wells said its third-quarter profit slipped 3% from a year earlier as the company tries to recover from that bogus-accounts scandal.
Checking out China: Wang Jianlin, chairman of China’s Dalian Wanda Group, will speak Monday night at LACMA on “Navigating Business in China.” Wanda is based in Beijing and owns AMC Entertainment, Legendary Entertainment and is trying to buy Dick Clark Productions. Some lawmakers have raised concerns about Wanda’s investments in Hollywood.
VW deal: The proposed $15-billion settlement of Volkwagen’s emissions-cheating scandal will go before U.S. District Judge Charles Breyer for final approval on Tuesday. The settlement calls for Volkswagen to spend up to $10 billion buying back or repairing about 475,000 vehicles that were rigged to cheat on air pollution tests, and paying their owners an additional $5,100 to $10,000. It also includes more than $2.5 billion for unspecified environmental mitigation and an additional $2 billion to promote zero-emissions vehicles. Breyer gave the deal preliminary OK in July.
Robot cars: How will driverless vehicles be regulated in California? On Wednesday, the Department of Motor Vehicles is hosting a public workshop in Sacramento to discuss rules for autonomous vehicles. The DMV is reviewing federal guidelines on driverless cars that were released last month and is planning to release draft California regulations in the coming weeks. Currently 15 companies — including Google, Honda, Tesla and Nissan — hold permits to test driverless vehicles in California.
Airport expansion: On Thursday, the city of Long Beach will hold a public hearing to discuss allowing international flights in and out of Long Beach Airport. The hearing will focus on a just-released study by Jacobs Engineering that concluded new international flights could replace existing domestic flights at Long Beach Airport without exceeding current noise limits. Some Long Beach residents have opposed the plan for fear of increased noise. The hearing begins at 6:30 p.m. at the Long Beach Gas & Oil Auditorium, 2400 E. Spring St.
Jobs data: The California employment report for September will be released Friday by the state Employment Development Department. The closely followed economic indicator brought good news last month, showing that the state added a net 63,100 jobs in August and the unemployment rate held steady at 5.5%. Economists say California is nearing full employment, which is when nearly everyone who wants a job has one. That means there are fewer people in the state to recruit into the labor market.
Monday’s Business section looks at the cost of living. When it comes to inflation, the price might not always be right, and that has consequences for the pocketbooks of individual Americans and the nation’s economic health. But calculating the inflation rate is complicated and doesn’t always reflect what many Americans experience when they open their wallets to make a variety of everyday purchases. “It’s inherently an imprecise thing,” says Laurence Ball, an inflation expert and head of the economics department at Johns Hopkins University. “Different people consume different baskets of goods, so my personal inflation rate and your personal inflation rate could be different.”
Here are some of the other stories that ran in the Times Business section in recent days that we’re continuing to follow:
Bank CEO resigns: John Stumpf resigned as chairman and chief executive of Wells Fargo & Co., bowing to mounting criticism from lawmakers and others who said he should lose his job over revelations that bank employees created as many as 2 million accounts without customers’ authorization. Stumpf, 63, had been chief executive since 2007 and chairman of Wells Fargo’s board since 2010. Timothy J. Sloan, 56, a longtime Wells Fargo executive who was named president of the company last year, will replace Stumpf as chief executive.
Affordable housing: The city of Los Angeles has won nearly $65 million in state funding to develop six affordable housing projects amid a homelessness crisis. The money allows for 553 below-market units to be built, the office of L.A. Mayor Eric Garcetti announced. Nearly 350 of those residences are for formerly homeless individuals and planned for projects with supportive services. The remaining are for low-income households, who are increasingly struggling to afford a home in one of the nation’s most expensive cities.
Yahoo sale: Verizon’s deal to buy Yahoo for $4.83 billion could be on shaky ground after the Internet company disclosed last month a 2014 data breach that affected at least 500 million Yahoo accounts. The breach — one of the largest in the history of cyberattacks — included user data such as email addresses, dates of birth, encrypted passwords and security answers. Yahoo said in September that it was not aware of the cyberattack when it signed the deal with Verizon in July of this year.
Republic of Samsung: South Koreans sometimes call their country the Republic of Samsung, and they’re only half-joking. Samsung accounts for 20% of the country’s gross domestic product, and its footprint is everywhere. So it is with some jitters that people in Samsung’s home country have watched the crisis surrounding the company’s Galaxy Note 7 smartphone.
Beastly decision: One of the nation’s most popular travel booking sites is taking a stand on animal welfare by halting the sale of tickets to attractions that let tourists ride or touch wild or endangered animals. TripAdvisor announced plans to adopt the changes by early 2017, partly in response to pressure from animal rights groups to stop selling tickets to attractions that they feel exploit animals without offering any educational value.
WHAT WE’RE READING
And some recent stories from other publications that caught our eye:
Hard feelings: Bloomberg tells the tale of L.A. residents who traded their front lawns for gravel landscaping. A company called Turf Terminators that specialized in such transitions is accused by some of creating eyesores. “My yard just looks worse than ever,” one says.
Chat bots: The New York Times explores so-called conversation computing (think Siri) and the challenge of finding just the right voice. “Choosing a voice has implications for design, branding or interacting with machines. A voice can change or harden how we see each other.”
A fitter Twitter? NPR asks if Twitter, now reportedly up for sale, would do best as a nonprofit. “In the second quarter it lost more than $100 million — so perhaps it already is a nonprofit.”
Not so sweet: In yet another illustration of the insane U.S. drug market, the Wall Street Journal observes that insulin prices are soaring, not just because manufacturers are boosting list prices, but also because industry middle men “demand higher rebates in exchange for including the drug on their preferred-drug lists.”
Tough gig: The New Yorker profiles Kellyanne Conway, Donald Trump’s campaign manager and spokeswoman. “Running Donald Trump’s campaign is like being the drummer in Spinal Tap: Those who take the position tend to disappear in mysterious circumstances.”
To what was the New Yorker referring with that Spinal Tap reference? Why, to this, of course. As the band’s David St. Hubbins points out: “Dozens of people spontaneously combust each year. It’s just not widely reported.”
For the latest money news, go to www.latimes.com/business. Until next time, I’ll see you in the Business section.