Tag: Business

IMAGINE wanting to sue your employer, because you have been harassed or discriminated against, only to find that your access to the courts is blocked. It turns out you signed away your right to use the judicial system when you started the job: somewhere, hidden in the documents that came with your employment contract, was a clause obliging you to resolve future disputes through private arbitration, rather than in court.

An increasing number of American employees find themselves in this situation. Over half of non-unionised employees are covered by arbitration requirements, estimates Alexander Colvin of Cornell University, based on a survey in 2017 of 627 private-sector workplaces. Such agreements have come under greater scrutiny after the wave of workplace sexual-harassment revelations last year. Gretchen Carlson, a former news anchor for Fox, a broadcaster, has called arbitration “the harasser’s best friend”. Prevented by an arbitration clause from suing the network, Ms Carlson sued her boss…Continue reading

GENERAL MOTORS reveals barn-sized truck at Detroit motor show. What else is new, you might now ask. But the launch on January 20th of the Chevrolet Silverado, a pickup that will go on sale at the end of the year, highlights a surprising turnaround for America’s largest carmaker.

The good news is not just the Silverado’s outsized margins, which are important for a firm that relies heavily on trucks—after Mary Barra, GM’s boss, gave an ebullient performance at an investors’ conference that coincided with the motor show, the release of GM’s quarterly results on February 6th are likely to include record profits. It is also that the money thrown off by vehicles such as the Silverado will help the firm navigate the tricky terrain that lies ahead of all the world’s big carmakers.

One task is to ensure that their current business of selling vehicles with internal-combustion engines stays healthy. At the same time, they must prepare for a future of electric and autonomous cars (EVs…Continue reading

THE tech industry hardly needs another reminder that trustbusters are on its case. But the European Commission is always happy to oblige. On January 24th Europe’s executive body slapped a penalty of €1bn ($1.2bn) on Qualcomm, one of the world’s largest chip-designers, for abusing its dominance in baseband processors, a critical component in mobile phones.

Large fines are becoming something of a habit for Qualcomm, which will have paid out nearly $1bn a year, on average, to trustbusters the world over since 2015. This week’s penalty, which amounts to nearly 5% of the company’s global annual revenue, is a reflection of what Margrethe Vestager, the European competition commissioner, described as its “very illegal behaviour” between 2011 and 2016. During that time, according to Ms Vestager, the company attempted to shore up its dominant position—it is estimated to supply up to four-fifths of essential types of baseband chips—by paying Apple, its biggest customer, billions of dollars in…Continue reading

IN THEIR documentary “The Vietnam War”, Ken Burns and Lynn Novick, the directors, dwell on the flawed information that American politicians got from Indo-China. The generals on the ground focused on the “kill ratio”, or the number of enemies killed per American or South Vietnamese soldiers killed. That bore no relationship to victory—North Vietnam quickly replaced its dead soldiers. And it corrupted behaviour, leading American troops to embellish numbers and count dead civilians as “wins”.

The curse of rotten information can strike companies, too. That seems to be the case with General Electric (GE), which has had a vertiginous fall. Its shares, cashflow and forecast profits have dropped by about 50% since 2015. On January 16th it disclosed a huge, $15bn capital shortfall at its financial arm due to a revision in insurance reserves. And on January 24th it revealed a $10bn loss for the fourth quarter. In its core industrial arm, returns on capital have sunk from 20% in 2007 to a puny 5%…Continue reading

Might Paul’s wages fall?

FOR years the cost of rights to broadcast major sports in America and Europe has trended in one direction—up. This gravity-defying law shapes the economics of modern sport: as television operators bid ever more substantial sums, teams take in more revenue and star-player salaries (and transfer fees) climb higher. In 2017 that trajectory continued as broadcasters splurged on rights for Champions League football matches for 2018-21.

This year gravity is reasserting itself. Top-flight football rights are out for tender in two major European leagues—England and Italy—and are expected to be put up for sale this year in France and Spain, too. Analysts expect relatively small increases in pay-outs (though Spain’s La Liga boss predicts a 30% rise)—and possibly a decline in Italy. “The happy days are over,” says Claire Enders of Enders Analysis, a research firm.

The chief problem is fundamental weakness at the bidding…Continue reading

AT AN investor briefing in 2015, Masayoshi Son, chief executive of SoftBank, flashed up a picture of a goose. The company is like the bird of legend that produces golden eggs, he explained. In his quest to encourage more laying, Mr Son has taken SoftBank well beyond its telecoms business. The firm also manages the world’s largest tech-investment fund, the $100bn Vision Fund, which has a slew of wealthy backers, including Saudi Arabia’s Public Investment Fund and Apple.

Using both the firm and the fund, Mr Son has acquired stakes in tech companies at a frenetic pace, by one count opening his chequebook once every four days on average in 2017. Such shopping sprees do not come cheap. SoftBank is one of Japan’s most highly leveraged companies, with debt exceeding ¥15trn ($139bn), not least because of its purchase in 2013 of a controlling stake in Sprint, an American mobilenetwork operator.

News reports this week suggest SoftBank is now hatching a plan to raise ¥2trn by…Continue reading