Column: California Inc.: Will Team Mickey be rolling in cheddar?
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.
Trading resumes Monday on an up note after the Labor Department reported Friday that the U.S. economy added a surprisingly robust 255,000 net jobs in July and wages showed strong gains. This helps ease fears that the labor market was stumbling seven years into the recovery from the Great Recession. The unemployment rate held steady at 4.9%, near an eight-year low, as the labor force expanded by about 407,000 people in a sign that Americans see improved job prospects. Fingers crossed.
LOOKING AHEAD
No grocery strike: Southern California grocery workers will vote Monday on whether to ratify a tentative labor agreement with the Ralphs and Albertsons chains. The pending deal averted the immediate threat of a strike that could have roiled some of the region’s largest supermarket chains. Details of the accord are expected to be released after the vote. A Ralphs spokeswoman said the company had proposed pay increases and changes to its pension and healthcare plans.
More cheddar? Walt Disney reports its latest quarterly results on Tuesday. In May, the Mouse House posted lower-than-expected second-quarter profit and announced that it was discontinuing a line of video games. That amounted to a rare rocky three months for Burbank-based Disney, which has seen its shares tumble about 8% since the last earnings call despite finally opening its Shanghai park in June.
One to watch: Valeant Pharmaceuticals International opens the books on its latest earnings on Tuesday. The beleaguered Canadian drug company has lost about 90% of its value since last August amid questions about its premium pricing of medicine and business strategy. The company has lowered its earnings guidance twice this year, scaring off investors.
Hot stock: Investors will be looking to see how brightly SolarCity shines when the company reports its latest results on Tuesday. The maker of solar-power gear is being acquired by Tesla Motors for $2.6 billion. Tesla’s chief exec, Elon Musk, also serves as chairman of SolarCity, raising questions of conflict of interest. Musk says that “the point of the merger is to get rid of the conflicts of interest.”
Retail sales: The Commerce Department posts July retail sales on Friday, with most analysts expecting a fourth straight month of gains. In June, sales climbed 0.6% from the month before to $457 billion. Economists said the uptick was a reassuring sign of consumer confidence after a lackluster start to the year. Consumer spending represents more than two-thirds of economic activity, making retail sales a strong gauge of the nation’s economic health.
THE AGENDA
Monday’s Business section reopens the can of worms that is the possibility of health risks from radiation emitted by cellphones and wireless transmitters. Industry and federal officials have largely dismissed such fears, saying the radiation exposure is minimal. But the launch over the next several years of super-fast 5G technology, which allows users to download a full movie in seconds, could change that.
STORY LINES
Here are some of the other stories that ran in the Times Business section in recent days that we’re continuing to follow:
Pump prices: A consumer advocacy group accused oil refiners of intentionally keeping California’s gasoline prices higher than in the rest of the nation to bolster profits, despite growing inventories and falling wholesale prices. Consumer Watchdog argued that per-gallon pump prices should be lower than the current $2.69 statewide average. The oil industry blames high state taxes and California’s special blend of environmentally friendly fuel.
Plenty of apartments: A glut of new apartments in downtown Los Angeles has some landlords offering prospective tenants a month’s free rent or up to a year’s worth of free parking. In the last year and a half, more than 3,700 apartments have opened downtown and an additional 6,260 are currently under construction. Some worry there won’t be enough tenants to go around.
Plenty of hotels: California, like the rest of the country, is in the midst of a hotel building boom, with more than 17,000 rooms under construction and an additional 84,000 in the pipeline. The surge in development follows a years-long drought in new hotels. Los Angeles County dominates in the number of rooms under construction, with 6,772 in 37 hotels.
Summer Games: From fecal matter in the water to Zika-virus-carrying mosquitoes in the air, it’s been one negative headline after another coming out of Rio de Janeiro in the months leading up to the Summer Olympic Games. But NBC has no reason to believe any unpleasantness in Brazil will discourage viewers in the U.S. from watching the action in the comfort of their homes or on their mobile devices.
Same old Fox: Fox News may have lost longtime leader Roger Ailes, but the channel’s brand identity won’t be changing under his replacement. That was the message from Lachlan and James Murdoch, the top executives at Fox News parent 21st Century Fox, who addressed Ailes’ departure during the company’s call with Wall Street analysts.
WHAT WE’RE READING
And some recent stories from other publications that caught our eye:
Just cheating: Bloomberg discovers something rotten at food start-up Hampton Creek, maker of Just Mayo. Apparently company workers were instructed to goose sales by buying “mass quantities” of the vegan product. Also, “contractors were told to call store managers pretending they were customers and ask about Just Mayo.”
Calling Major Tom: The Wall Street Journal says the Federal Aviation Administration is looking to expand its jurisdiction. It’s aiming for “real-time tracking of rocket launches, suborbital flights and, further in the future, possible supersonic transcontinental passenger trips.”
Hard time: A growing number of states are preventing employers from asking job applicants about their criminal history. But as the Atlantic observes, “when employers can’t see applicants’ criminal histories, they start discriminating in different, broader ways.”
Chasing Amazon: Online retailer Jet.com, reportedly a takeover target of Walmart, boasts a $1-billion valuation. Says Quartz, though, “Jet has spent the past year trying to beat Amazon at the game of low pricing, which is a game Amazon no longer even bothers to play.”
Natural foods: Fast Company lays out the epic fight over labeling “natural” foods. “Different industry players have very different definitions of what natural and healthy actually mean; many consumers aren’t too sure either and it will take quite some time for the FDA to come up with its own answers.”
SPARE CHANGE
Speaking of food, it’s no surprise that the items you order at fast-food restaurants seldom resemble the tasty-looking pictures on menus. But, as the people at Mediocre Films discovered, if you ask them to make the effort, fast-food chains are totally capable of stepping up their game.
For the latest money news, go to www.latimes.com/business. Until next time, I’ll see you in the Business section.
David Lazarus’ column runs Tuesdays and Fridays. He also can be seen daily on KTLA-TV Channel 5 and followed on Twitter @Davidlaz. Send your tips or feedback to david.lazarus@latimes.com.
