Explaining Southern California's economy

Chevys and Twinkies both survive the apocalypse...and bankruptcy?

I think my favorite Super Bowl commercial was from Chevy. In it, a guy driving his Silverado pickup with his dog discovers that he's survived the Mayan 2012 apocalypse. As grateful man and beast drive through a ruined landscape, the rubble of cities, flaming Big Boys, with spacecraft crashed along roadsides, volcanoes erupting, and asteroids still hurtling toward the Earth from space, they realize their good forture as Barry Manilow serendes them with "Looks Like We Made It." They then discover that they aren't alone. Other Chevy owners have also survived. And the Ford owner? Well, he didn't make it.

But the Twinkies did! Interestingly, Chevy had to survive General Motors' bankruptcy in 2009 to be able to survive the 2012 end of the world. The company that makes Twinkies, Hostess Brands, also came through bankruptcy, back in 2009 after declaring Chapter 11 in 2004. It just declared bankruptcy again, however. In TV land, the apocalypse probably put an end to all that. Luckily, as it turns out — we all knew Twinkies would survive, even if we weren't sure about Chevys.

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Steve Rattner talks about General Motors' $10 billion 'stretch goal' for profits

Steven Rattner, the Obama Administration's "car czar" who oversaw the bankruptcies and bailouts of both General Motors and Chrysler, went on CNBC this morning talking about what he described as General Motors' "stretch goal" of $10 billion in profits and a 10 percent profit margin in 2012 (and beyond). Rattner also took the opportunity to ding Mitt Romnney for his "flip-flops" on whether the bailouts were a good thing (read all about them here on the op-ed page of the New York Times). GM is expected to report an $8 billion profit for 2011, so it's getting much tougher to argue that this is a company that shouldn't have been allowed to survive.

Rattner is obviously proud of his work and has good reason modestly boast while supporting GM's "energy and ambition." But I think he might be wrong to side with a Wall Street Journal piece (sorry, can't find the link) that insists GM should never again focus on market share over profitability. The idea here is that making money is more important than pursuing an abstract number that doesn't necessarily contribute to the bottom line. After all, you could have 10 percent share of the U.S. market (GM currently has about 18 percent, down from 21 percent for 2011) and still make a lot of money.

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Who wins in Saab bankruptcy? General Motors

Mercer 2095

Joe Raedle/Getty Images

It looks like it's finally game over for Saab, the struggling Swedish company that owner General Motors sold to an obscure Dutch carmaker in 2009. What now looms is a liquidation bankruptcy, with Saab effectively sold for parts.

I've written many, many, many times about Saab and its seemingly unending quest to revive itself, make good on the legacy of its "quirky" brand, and possibly even get bought by the Chinese or a Russian money man.

Fail on all those fronts. And now it looks as if they only company that will really get anything out of Saab is it former corporate parent, GM, which blocked an 11th-hour sale to a pair of Chinese companies but will be able to salvage some Saab tech for use in future GM cars, according to some reporting by the LA Times' Jerry Hirsch.

Saab was a somewhat popular brand in Southern California, along with Volvo, its Swedish cousin. This was a bit strange, as Saab was optimized for good performance in bad weather. However, as a result of all the love that Angelenos gave Saab — not to mention the very un-Swedish climate — there are plenty of well-preserved versions still tooling around. 

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Live-blogging the LA Auto Show

BMW Offers Previews Two New Electric Concept Vehicles

Spencer Platt/Getty Images

Update: I spent a some time talking about the show with Larry Mantle on Airtalk this morning, with Eddie Alterman of Car and Driver and Ed Hellwig of Edmunds Inside Line. Check it out.

I'll be roaming the floor of the Los Angeles Auto Show for the next two days, checking out new cars, green cars, concept cars, and the business of cars in Southern California. I'll also be tweeting, so if you want to follow me, check out my Twitter feeds, below.

Look for photos, insights, and even some video. The LA Auto Show is the first big car show for the global industry, kicking off a season that runs for months and travels around the world.

The industry has taken its share of lumps over the past few years. The financial crisis nearly killed both Chrysler and General Motors — and seriously threatned Ford — but the Big Three are back, racking up profits quarter after quarter. 

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Is this what Occupy Wall Street is all about?

Wall Street Protest Spreads To Other Cities

Kevork Djansezian/Getty Images

LOS ANGELES, CA - OCTOBER 01: Protesters hold signs after a march to Los Angeles City Hall during the "Occupy Los Angeles" demonstration in solidarity with the ongoing "Occupy Wall Street" protest in New York City on October 1, 2011 in Los Angeles, California. The protesters slogan, "We are the 99 percent," calls attention to the fact that marchers are not part of the one percent of Americans who hold a vast portion of the nation's wealth. (Photo by Kevork Djansezian/Getty Images)

I've been meaning to link to this post from a wonky econoblog, The Slack Wire, for a while, but I haven't gotten around to it. Given that I haven't posted about the Occupy Movement for a week or so, it seems like a good time:

The key thing is that at one point, large businesses really were run by people who, while autocratic within the firm and often vicious in defense of their privileges, really did identify with the particular businesses they managed and focused their energy on their survival and growth, and even on the sheer disinterested desire to do their kind of business well. You can find a few businesses that are still run like this -- I've been meaning to write a post on Steve Jobs -- but by far the dominant ethos among managers today is that a business exists only to enrich its shareholders, including, of course, senior managers themselves. Which they have done very successfully....

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