Explaining Southern California's economy

In SoCal business news: L.A. Register launches next week, Boeing jobs coming to SoCal, Long Beach rejects 2020 Commission proposal

Orange County Register

Grant Slater/KPCC

Orange County Register Publisher Aaron Kushner (left) and company President Eric Spitz.

Good morning! Welcome to KPCC's business blog, The Breakdown. Every weekday morning, we compile a list of interesting business stories in the region.

  • Comedian Stephen Colbert is the next host of the "Late Show," after David Letterman retires in 2015 (KPCC). The Colbert Show is filmed in New York City. Will this hurt L.A. chances of landing the "Late Show"? 
  • Boeing is moving about 1,000 of its customer support jobs out of Washington and into Southern California (KPCC/AP).
  • The 2020 Commission recommends the ports of L.A. and Long Beach merge, but some Long Beach officials oppose the idea. Rich Dines, vice president of the Board of Harbor Commissioners at the Port of Long Beach, says it's "one of the worst ideas I have ever heard of." (KPCC).
  • Sriracha factory was declared a public nuisance by Irwindale's City Council, which will allow city officials to later inspect the property if the odor problem isn't fixed in 90 days (Associated Press). Meanwhile, KPCC's Kevin Ferguson has some suggestions on five Sriracha alternatives.
  • The L.A. Register launches next week and has new bureaus in San Fernando Valley, Hermosa Beach, Pasadena and downtown L.A.  (USA Today). Media columnist Rem Rieder says Publisher Aaron Kushner has "a 10-year-plus business plan with no initial circulation targets" for the L.A. paper.
  • Waldorf Astoria will build $200 million luxury hotel in Beverly Hills (Los Angeles Times). Reporter Roger Vincent says the hotel is Waldorf Astoria's "first new U.S. outpost west of Chicago" and will open in 2017.
  • Fox may want to re-think its television programs. Ratings are down for previous hit shows like American Idol and Glee compared to last year (Variety). Earlier this year, 21st Century Fox lowered its earnings outlook in part due to declining audiences for Idol (KPCC)
  • How much does it cost for retailers to tweet a pic of actress Katherine Heigl? Apparently $6 million. Heigl sued drug store chain Duane Reade for tweeting a picture of her shopping without her permission (The Hollywood Reporter).  The Hollywood Reporter's Eriq Gardner says the case could impact the way businesses use Twitter to promote themselves.


State wants new rules on insurance for ride-sharing companies


Lucy Nicholson/Reuters /Landov

The transportation app Uber matches ride-seekers with drivers. Drivers must keep checking their phones to catch customers, and critics say that may have dangerous consequences on the road.

The California Department of Insurance wants tougher rules for ride-sharing companies like Uber and Lyft that would require their commercial insurance to begin once drivers start searching for customers.

The ride-sharing companies pay drivers who use their own personal cars to pick up passengers. In general, it works like this: drivers turn on a smart phone app that lets customers contact them for a ride. Then, the driver accepts the ride request, picks the customer up and drops them off at the desired location. Here's the catch: a driver's personal auto insurance will not provide coverage during any portion of the process. 

RELATED: Uber wrongful death lawsuit highlights insurance grey area for rideshares

Ride-sharing companies like Uber and Sidecar tout on their websites they have $1 million in commercial liability insurance, but that only covers drivers starting from the time they accept a ride request, said Insurance Commissioner Dave Jones. The companies' $1 million in liability coverage doesn't cover the time when the driver turns on the app and cruises around searching for customers, Jones said.


In SoCal business news: American Apparel gets investment boost, Sony enters $200 million financing deal, Santa Monica pony ride showdown

Ric Francis/AP

A worker moves several boxes of American Apparel garments on the sewing floor in Los Angeles in this 2004 file photo.

Good morning! Welcome to KPCC's business blog, The Breakdown! Every weekday morning, we compile a list of interesting business stories in the region.

  • Troubled American Apparel receives boost in investment from Switzerland-based asset management firm FiveT Capital AG (Bloomberg). Reporter Matt Townsend says before FiveT's investment, American Apparel had more debt than cash on hand and was in danger of default. Townsend says FiveT now has a 13 percent stake in American Apparel and is the company's "largest outside investor."
  • 2020 Commission suggests combining Port of L.A. and Long Beach into one entity (KPCC). 
  • Sony enters $200 million financing deal with LStar Capital and Citibank (The Wrap). The Wrap's Sharon Waxman says: "The deal was pursued by studio chairman Michael Lynton, looking to lay off some of the risk of the studio's movie slate after a weak performance in 2013 that has led to hundreds of lay-offs and an executive shake-up at the studio." This summer, Sony Pictures Entertainment will lay off 216 employees (KPCC).
  • Universal Studios Hollywood plans to "remake" 70 percent of the park by 2016 and compete with Disney (New York Times). Times reporter Brooks Barnes says the plans are part of a $1.6 billion effort and aims to bring families with young children. 
  • CBS Corp. CEO Leslie Moonves is getting calls from L.A. and New York City mayors, urging CBS to bring the next "Late Show" to those cities (Deadline). State Assemblyman Mike Gatto told me he is considering whether to add language that would allow late night talk shows to apply for the state's film and TV tax credit program.
  • Google is beefing up information it displays on hotel listings, with more photos and reviews (Wall Street Journal). WSJ reporters Rolfe Winkler and Craig Karmin say the move could cause "travel agencies and hotel operators to pay more for clicks on Google ads over time." 
  • The Weather Channel will be back on DirecTV after not airing on the network since Jan. 14 (Los Angeles Business Journal). 
  • San Diego area hospitals are working to put healthier options on the menu (U-T San Diego). Reporter Paul Sisson says some hospitals are reducing the amount of meat on their menus and are using the cost savings to buy healthier ingredients.
  • A pony ride showdown is happening in Santa Monica (Santa Monica Daily Press). Reporter David Mark Simpson says Santa Monica resident Marcy Winograd has an online petition, urging the city ban pony rides because they are "cruel and inhumane." Meanwhile, pony ride operator Tawni Angel started a rival online petition, saying she treats her ponies well and touts the rides as educational.


In SoCal business news: Comcast weighs in on deal, Questcor bought by Mallinckrodt, Broad still interested in LA Times

Cable Giant Comcast To Acquire Time Warner Cable

Jessica Kourkounis/Getty Images

Comcast headquarters in downtown on February 13, 2014 in Philadelphia, Pennsylvania. Comcast recently announced its intent to acquire Time Warner Cable in a $45 billion deal.

Good morning! Welcome to KPCC's business blog, The Breakdown. Every weekday, our staff compiles a list of interesting business stories in the region.

  • Anaheim-based biotech firm Questcor Pharmaceuticals will be bought by Mallinckrodt in $5.6 billion deal (New York Times). Times reporters Andrew Pollack and Chad Bray say Questor has come under controversy for raising its price on an immune system drug from $40 to more than $28,000 a vial in 10 years.
  • Comcast says plans to buy Time Warner Cable benefits consumers (Wall Street Journal). Reporter Gautham Nagesh says Comcast believes the deal would allow it "to offer more video choices and faster home Internet to Time Warner Cable customers" as well as allow it to better compete for ads and business services.
  • YouTube teen network AwesomenessTV is going to have licensed merchandise (Deadline). Deadline's financial editor David Lieberman says James Fielding will become AwesomenessTV's global head of consumer products and retail.  Fielding was a past Claire's Stores Inc. CEO and president at Disney Stores Worldwide. Last year, I reported DreamWorks Animation bought AwesomenessTV in a deal that could reach up to $117 million.
  • What will Frank Underwood do next? Legislation to increase the amount of film tax credits in the Maryland legislature failed (Washington Post). That means Maryland will offer $15 million in tax credits, instead of $18.5 million. People behind House of Cards had tried to lobby for more tax credits (KPCC).
  • The Maryland discussion comes as California decides whether to change its film and TV tax credit program. State Assemblyman Mike Gatto (D-Los Angeles) told me he would consider adding language to a bill that would allow late night talk shows to apply for credits.
  • Most of this summer's major releases are directed by white males (The Wrap). Reporter Lucas Shaw said of the 39 "major releases," 37 have white male directors or co-directors. KPCC's Josie Huang reported earlier this year that Hollywood is trying to improve diversity among its groups.
  • Dennis Arriola became CEO of Southern California Gas Co. last month and he discusses his job with the San Gabriel Valley Tribune. Arriola leads 8,200 employees and a territory more than 20,000 square miles.
  • Eli Broad says he and Austin Beutner are still interested in buying the Los Angeles Times, but the paper's corporate parent Tribune Co. is making it "difficult." (Los Angeles Magazine).   "They are creating a new structure that will make it more difficult for the newspapers to break even financially," Broad tells the magazine. "That's a concern for us and for a lot of people." He might be referring to Rep. Henry Waxman (D-CA) who raised concerns about Tribune spinning off its newspapers into its own separate publishing business.
  • Roughly 40% of food trucks and carts in L.A. County haven't had field inspections in 3 years (Los Angeles Times). 
  • Expect pricier guacamole during Cinco de Mayo this year. That's because there are fewer limes, an ingredient in guacamole (The Packer via OC Weekly). Take Two's A Martinez interviewed Mario Marovic, who owns bars and restaurants in Orange County, who came up with a good idea to deal with high lime prices. His business had a viral campaign asking customers to bring limes from their backyard in exchange for a craft cocktail or margarita for a quarter.


Boeing will shut down C-17 plant in Long Beach earlier than expected

Kevork Djansezian/Getty Images

C-17 cargo jet production in Long Beach was scheduled to end in late 2015. Now, Boeing says it's likely to come three months sooner.

Boeing announced Monday that it will end production of the C-17 Globemaster and close its final assembly facility in Long Beach three months earlier than originally anticipated. 

The 2200 Californians who work in support of building the cargo jet have known since last September that production will end next year.  Boeing initially estimated that end late in 2015, but now says a summer shutdown is more likely.

"Based on current market trends and the timing of expected orders, Boeing anticipates completing C-17 production in mid-2015, an adjustment of approximately three months from an initial estimate of late 2015," the company said in a statement. 

RELATED: Boeing's 777X in California: Is Long Beach a long shot?

“This was disappointing news for more than 2,000 employees in California, who have built the C-17, the worlds premier air-lifter, for more than two decades,"  Boeing  spokeswoman Cindy Anderson told KPCC.