Explaining Southern California's economy

Chinese carmaker BYD opens shop in Downtown LA

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Matthew DeBord

BYD — it stands for "Build Your Dreams" — is building a future in Downtown LA, new home to its North American HQ. Unfortunately, it's enduring something of a nightmare with its business at home in China, even with billionaire Warren Buffett invested.

In business, timing is everything. So what to make of a dignitary heavy ribbon cutting this morning at the new North American headquarters of Chinese carmaker BYD ("Build Your Dreams"), at a time when the company is facing business challenges at home — and challenges to deliver on ecomomic promises in LA?

This is from Bloomberg:

BYD America opened today about a year behind schedule with fewer workers than first targeted. The company, partly owned by Warren Buffett's Berkshire Hathaway Inc., has delayed plans to sell electric cars to retail buyers, citing limited availability of public chargers. Instead, it's focusing on solar panels, batteries, LED lighting and rechargeable buses.

[...]

Initial goals for the Shenzhen, China-based company's California arrival haven't been met either in BYD jobs or indirect business created. The delays reflect a combination of construction obstacles and an electric-car market that hasn't developed as rapidly as first expected.

In April 2010 when the deal was announced, BYD said it would open the office by the end of 2010, and have 150 employees by the end of this year. It now has 20 employees in Los Angeles, with plans to reach 30 by year-end and 100 by the end of 2012, according to Micheal Austin, the company's U.S. vice president.

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Tweet of the Day: Billy Bragg gives us a 140-character piece of his mind

Remember Billy Bragg? The English musician has always been on the side of the working folk. He's also on Twitter, @billybragg, and he has 75,000 followers. He links to this chart-laden post from Business Insider about why things have gotten completely out of whack in the USA, economically, and how levels of inequality are reminiscent of the 1920s. We're recalibrating now. Occupy Wall Street, in his view, knows what it's talking about.

Or as Bragg might put it, "Waiting for the great leap forwards." Billy nicely updates the late-1980s lyrics of what many consider the world's most romantic protest song in that version I've linked to, from a 2007 appearance on Henry Rollins' show. I've embedded a performance of the original, from "Late Night with David Letterman," circa 1988, below. I still like it best.

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Microsoft is back in the driver's seat on Yahoo deal

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Justin Sullivan/Getty Images

A Yahoo! billboard is visible through trees in San Francisco, California.

I used to think that Microsoft should buy Yahoo. It didn't in 2008 — although that was less about Microsoft than it was about Yahoo's unwillingness to sell. Now that Yahoo has entered something of a tailspin, canning its CEO and exploring some sale options, Microsoft is back. And oh boy! What a deal it's looking to make.

But I now don't think Microsoft should buy Yahoo.

This is from the Wall Street Journal:

Potential suitors said they believe Yahoo’s inherent value is lower than its current share price of about $16.12, which they say includes a “deal premium” reflecting investors’ anticipation of the sale of Yahoo, people familiar with the matter said. The stock has run up since Carol Bartz was ousted as chief executive last month and Yahoo launched a strategic review.

In 2008, Microsoft was offering $31/share. It's traded as low as about $11. I'd say it's worth way more than $16, but in any case, Microsoft is now positioning itself to take a sweet stake, in preferred shares. I think this lessens the chance that I'll get my wish, which is to have Yahoo shed its identify as a tech company and remake itself as a Southern California-based online entertainment juggernaut. Microsoft doesn't need to be buying it. Disney does.

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Fisker electric-car scandal: Is this the new Solyndra?

Biden Announces Conversion Of Idled GM Plant To Electric Car Manufacturing

Jeff Fusco/Getty Images

WILMINGTON, DE - OCTOBER 27: U.S. Vice President Joe Biden speaks at the former GM Boxwood Plant on October 27, 2009 in Wilmington, Delaware. Fisker Automotive announced that the company is buying the plant to produce affordable plug-in hybrid automobiles. (Photo by Jeff Fusco/Getty Images) *** Local Caption *** Joe Biden

The Department of Energy's $535 loan gurantee to bankrupt solar startup Solyndra has become the Obama Administration's first quasi-scandal, with critics insisting that the government shouldn't be funding risky green-energy companies and supporters (myself included) arguing that the government is the only investor that can handle the risk. But now the bickering has spread beyond solar to the go-go world of electric vehicles — just as "Revenge of the Electric Car," the sequel to "Who Killed the Electric Car," is hitting theaters.

ABCNews and the Center for Public Integrity have teamed up to investigate DOE loans guarantees, focusing on two marquee EV companies, Tesla Motors and Fisker Automotive, which together have received about a billion in government-backed financing. The takeaway isn't pretty:

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Reportings: Fed hatred; Groupon IPO; end the 30-year mortgage!

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Scott Olson/Getty Images

A sign marks the location of the Groupon headquarters on November 30, 2010 in Chicago, Illinois.

Bruce Krasting goes after the Federal Reseve. He doesn't hold back: "I want the Fed to fail so miserably that they are marginalized for the next twenty years. I want Bernanke fired. I want the Fed disgraced." (Bruce Krasting)

 

How to do an IPO, the Groupon-Goldman Sachs way: "The hardest step is the first: getting aboard this money train in the first place. You go in with a huge pitchbook that tells the company how awesome they are, how awesomely you’d tell the world how awesome they are, and how awesome you are at IPOs, etc." (Dealbreaker)

 

Abolish the 30-year fixed-rate mortgage! "At heart, it comes down to this: the 30-year fixed-rate product is always going to shift a huge amount of interest-rate risk onto the government in one form or another." (Felix Salmon)

 

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