Newsletter: California Inc.: Moment of truth for Tesla-SolarCity merger
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 if Wall Street retains the post-election euphoria that drove stocks to record highs last week. The general sense is that investors are pleased with what may be coming down the pike from the Trump administration. This includes cutting taxes, increasing infrastructure spending and slashing government regulation of businesses. But already investors were starting to pull back as the week drew to an end.
Change at Viacom: A new CEO will take the helm of media company Viacom on Tuesday. Robert Bakish, who previously ran Viacom’s international business, will become the company’s third chief exec in less than three months. He will replace Thomas Dooley, the longtime chief operating officer who became interim CEO in late August after former Viacom CEO Philippe Dauman was forced out. Along with the CEO job, Bakish will simultaneously serve as the chief executive of the TV networks group.
Campus strike: On Wednesday, nearly 600 skilled-trades workers will hold a one-day strike at UCLA. Teamsters Local 2010, which represents electricians, plumbers, carpenters, service engineers, elevator mechanics and others at UCLA and UC San Diego, are advising the public to avoid the Westwood campus and reschedule nonessential medical appointments that day. About 200 skilled-trades workers at UC San Diego plan to strike the next day. The union claims the workers are paid less than prevailing wages for their jobs.
Merger vote: Shareholders in Tesla Motors and SolarCity will vote Thursday on whether to merge the two companies. The merger, announced in June, would combine the Palo Alto-based electric car company with the nation’s biggest solar-roof installer. Elon Musk, CEO of Tesla, chairman of SolarCity and a major investor in both, has said the merger will create an integrated and profitable company. Critics call the deal a misguided effort to rescue two companies that depend on investors and the government for operating cash.
Home sharing: Airbnb, the world’s biggest home-sharing service, will hold a three-day conference Thursday through Saturday in downtown Los Angeles for its leaders and hosts. The company expects attendees from over 100 countries to come to Airbnb Open LA, which will be held at the Orpheum Theatre, the Los Angeles Theatre, the Downtown Palace Theatre, and the Theatre at Ace Hotel. Featured speakers will include actor Ashton Kutcher and former U.S. Atty. Gen. Eric Holder.
New cars: The Los Angeles Auto Show opens to the public on Friday at the Los Angeles Convention Center and will run through Nov. 27. Tickets are $5 to $15. This year’s show will feature the debut of models from at least 17 different automakers, as well as a 3.7-acre area devoted to accessories and technologies for customizing cars. The four days before the show, Monday through Thursday, will be a separately titled event called AutoMobility LA, which is open only to industry representative and the press.
Monday’s Business section notes that many people consider the pluses of electric cars: zero tailpipe emissions. No more oil changes, no more tune-ups. Cheap fuel. Then they set the idea aside. That disconnect is apparent in the U.S., where all-electric vehicles account for less than 1% of new car sales. With gasoline prices low and stable, pickup trucks, sport utility vehicles and crossovers are what Americans want to buy. So electric cars have minuscule market share. Meanwhile, big automakers are aggressively pushing their electric cars. What gives?
Here are some of the other stories that ran in the Times Business section in recent days that we’re continuing to follow:
Obamacare future: Republicans, who for six years have promised to repeal and replace the Affordable Care Act, will finally get their chance to do it. But even with control of the White House and Congress, it’s unclear whether the GOP can pull it off. While rolling back much of Obamacare, as President-elect Donald Trump has promised to do, could be accomplished, enacting the complex legislation necessary to replace the law may prove particularly daunting.
Financial reform: Donald Trump’s stunning victory is seen as a boon for financial firms and by consumer advocates as a threat to regulations passed following the financial crisis. Investors piled into financial stocks, expecting that Trump will make good on his pledge to dismantle much of 2010’s landmark Dodd-Frank Wall Street Reform Act — or at least have a lighter regulatory hand.
Affordable housing: Organized labor and tenant groups won a victory when Angelenos overwhelmingly approved Measure JJJ, a ballot initiative that imposed hiring and affordable housing requirements on developments that get exemptions from key city planning rules. The measure, which passed with nearly 64% of the vote, was pitched by its backers as a way to add more affordable housing in an expensive city undergoing a development boom. Developers warn it could crimp construction.
Legal weed: Cannabis will be taxed more than tobacco, marketed like wine, funded like the riskiest of start-ups and grown under bank-like security. That’s the emerging vision of what California’s consumer market for marijuana, expected to be worth $6 billion by 2020, is going to look like after voters on Tuesday approved recreational use of pot. Big money won’t be made overnight — it will take at least a year to roll out a state licensing system that will boost investor confidence in California cannabis.
Facebook’s clout: Hillary Clinton was the choice of nearly every American newspaper editorial board. It didn’t matter. When it comes to influencing public opinion, the 2016 presidential election demonstrated with sobering effect the weakening role of traditional media and the ascendant power of social networks like Facebook.
WHAT WE’RE READING
And some recent stories from other publications that caught our eye:
Building boom: Wired looks at how virtual reality is changing how architects work. “You can’t help but say wow,” says one software exec. “It happens every time a client or an architect jumps into a project for the first time. You can literally bring them into the project, and that makes design a more human experience.”
Rough road: The Atlantic reflects on Route 66. Not the tune. Rather, it’s complicated history for black Americans. “In 1930, 44 out of the 89 counties that lined Route 66 were all-white communities ... that banned blacks from entering city limits after dark.”
Paying with polymer: Bloomberg asks if plastic cash is on our future. Not credit cards. Cash, made of plastic. “Polymer bills cost twice as much as paper, but last five times as long (and can survive the washing machine.)”
Hi there: Fast Company offers some helpful tips for approaching a VIP at a networking event. “VIPs will always be surrounded by others, but that doesn’t mean it’s hopeless trying to get a word in edgewise — you just have to be ready to.”
Devilish calling: Here’s a job not likely to be replaced by automation. Vanity Fair spends some quality time with the Vatican’s chief exorcist, 91-year-old Father Gabriele Amorth. “Out of a hundred people who seek my help,” he says, “one or two at the most may be possessed.”
Last week was, shall we say, a bit tumultuous. Here’s a hopeful sentiment from the Five Stairsteps that made it better for me.
For the latest money news, go to www.latimes.com/business. Until next time, I’ll see you in the Business section.