Business News at a Glance
Posted May 3, 2018 9:41 p.m. EDT
Ex-Volkswagen Chief Charged With Fraud Over Diesel Scandal
The Volkswagen emissions scandal reached the highest echelons of the company Thursday after its former chief executive was charged with conspiracy in the company’s rigging of diesel vehicles to feign compliance with federal pollution standards. The indictment of the former executive, Martin Winterkorn, who resigned shortly after the emissions scandal erupted in September 2015, significantly raises the stakes for Volkswagen. The charges contradict the German carmaker’s steadfast insistence that no members of its management board were involved in the emissions fraud. They also weaken the company’s defense in a related suit by shareholders.
A Fast-Food Problem: Where Have All the Teenagers Gone?
A quarter-century ago, there were 56 teenagers in the labor force for every “limited service” restaurant — the kind where you order at the counter. Today, there are less than half as many, which is a reflection both of teenagers’ decreasing workforce participation and of the growth in restaurants. But in an industry where cheap labor is an essential component, a shortage of workers is changing the equation upon which fast-food places have long relied. This can be seen in rising wages and growth of incentives. Restaurant owners also worry about increased immigration enforcement: Nearly 1 in 5 workers are foreign-born.
Xiaomi, Chinese Gadget Maker, Opens Floodgates for Hong Kong IPOs
Xiaomi, the gadget maker, announced Thursday that it would list its upcoming IPO in Hong Kong, the first company to do so after several rule changes designed to attract companies to list in that market. These are among a spate of Chinese companies expected to open their doors to ordinary investors in Hong Kong over the next year through public listings, after a loosening of rules by the city’s stock exchange. If many of them end up listing in Hong Kong, then China will have accomplished a major goal: keeping its hugely successful tech boom at home.
Remington, the Gun Maker, Is Set to Exit Bankruptcy
Remington Outdoor, one of the country’s oldest and largest gun makers, said this week that a bankruptcy judge had approved its reorganization plan, which will transfer ownership of the company to creditors including JPMorgan. After a court hearing in Delaware on Wednesday, Remington said it expected to emerge from Chapter 11 bankruptcy proceedings by the end of the month with more than $775 million in debt wiped from its balance sheet. Remington, which sought bankruptcy protection in March after sales fell and its debt piled up, will no longer be owned by the private equity firm Cerberus Capital Management.
Elon Musk Rejects ‘Boring, Bonehead Questions,’ and Tesla’s Stock Slides
Investors seemed to take another big quarterly loss from Tesla in stride. At least, until the company’s chief executive, Elon Musk, started talking. Musk’s contentious conference call with analysts after Tesla’s earnings announcement on Wednesday sent shares of the electric-car maker sharply lower. And the losses extended into Thursday’s trading session. Tesla’s stock price fell 5.6 percent on Thursday, after Musk butted heads with analysts on the call who wanted updates on the company’s continuing production issues and high cash-burn rate. Volume surged as the stock fell after the opening of trading Thursday.
New York Times Co. Reports Revenue Growth as Digital Subscriptions Rise
The New York Times Co. added 139,000 digital-only subscribers in the first quarter of 2018, a 25.5 percent increase from the same period a year ago, helping to fuel total revenue growth and offset a decline in digital advertising. The company said Thursday that about 40,000 of the new subscribers came from digital products like the cooking and crossword apps. The gains helped push the company’s total digital-only subscribers to roughly 2.8 million. The company said total revenue was about $414 million, a 3.8 percent increase from the first quarter of 2017.