Bad things are happening to the auto industry and related industries in the United States in recent weeks. You may not have heard, because so much else has dominated the news cycles. But ... bad things are happening. On Thursday, September 11, Tricolor Holdings entered bankruptcy. This was not the standard corporate "let's try to reorganize and shed some of this debt" bankruptcy, chapter 11. No: Tricolor went right to "let's just liquidate and be done with it" bankruptcy. Chapter 7. A rare admission by corporate leadership that there is nothing to salvage there. Who was Tricolor? It was a company that lent to car buyers and that sold used cars at auctions. It was a considerable presence in the southwestern US, specializing in lending (and/or selling used cars to) Spanish-speaking buyers. Its name is a reference to the Mexican flag. Soon thereafter attention turned to CarMax. This is a bigger player than Tricolor in both of the markets they share, sub...
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I only recently learned how to pronounce this fellow's name! The "s" is silent, and the name rhymes with "Lone." That's one of the minor revelations of a fascinating Bloomberg feature about how and why Carlos Ghosn, the grim faced fellow portrayed here, was taken down when he was. To review: In November, authorities in Japan arrested Ghosn on complicated charges of financial fraud and less complicated charges of tax cheating. This is huge in the world auto industry. Ghosn was the chairman of the board at both Nissan and of Renault, and the central figure in the historic alliance between the two. That alliance had recently (2016) added Mitsubishi to the fold. So: what does Bloomberg have to tell us, aside from the useful pronunciation reference? It is perhaps unsurprising that someone of Ghosn's prominence and wealth had rivals and, one may plainly say, enemies. Among them, apparently, was his own second-in-command at one of the three allied c...
At this time of year I ask myself what were the biggest stories of the past twelve months in business/financial news. Here are the twelve stories, by month, that especially caught my attention and that in retrospect I recommend to yours. I'll make no effort to rank their importance against one another, so I will simply order them by month. January: Multilateral Trade Agreement. The Trans-Pacific Partnership reconstituted itself despite the US withdrawal, in an agreement announced on the 23d. This is a fine example of a broader and (for the US) an unfortunate trend. The US is locking itself out of free trade areas. To the extent free trade does work to stimulate economic productivity, the US is withdrawing from that. February: Offshore natural gas. A dispute between Cyprus and Turkey over offshore drilling rights for natural gas nearly became a war as the Turkish navy obstructed a drilling vessel. This, too, I take as a token of a broader develo...