Coca-Cola CEO James Quincey said that the acquisition is more about gaining access to Costa’s many products — like its coffee vending machines, on-the-go outlets, ready-to-drink iced coffee and beans from its roastery — than it is about owning restaurants.
“This is a coffee strategy, not a retail strategy,” he told investors on a call on Friday.
Other big food brands are investing in coffee too.
But Coke’s previous attempts to add coffee to its portfolio have fizzled out. Quincey said that’s because Coke doesn’t have the resources or the right platform to sell coffee on its own.
Costa could change that.
The coffee brand will help Coca-Cola achieve its goal of being a total beverage company that sells everything from water to sports drinks, he said.
That total beverage strategy isn’t just about individual consumers, said Duane Stanford, executive editor of the trade publication Beverage Digest. It’s particularly important for Coke’s food service customers, including movie theaters and restaurants.
If Coke can’t offer them a good coffee option, it’s “a setback” for the company, Stanford said.
Quincey noted that Coca-Cola(KO) isn’t planning on opening many new Costa locations in the United States, where it would have to compete with Starbucks. In America, Coke will market Costa’s other products instead.
Costa has nearly 4,000 stores across 32 countries, and the beverage company is planning on expanding the number of Costa stores in Europe, the Middle East, Asia and Africa.
More retail stores could help people develop a taste for coffee in those regions, Quincey said. And once coffee becomes part of people’s routine, they may be more inclined to buy Costa’s beans and iced coffees, Stanford noted.
Developing a retail presence could be advantageous for Coke.
George Lawrie, principal analyst at Forrester Research, said that Coke can use Costa stores to help sell its other products, including juice and water, directly to consumers, rather than through a grocery store or gas station.
“Brands are interested in securing the means of distribution,” he said. “I’m sure it would be nice for them to say, ‘You can try all of our new Coke products there.'”
Coke plans on using Costa’s Coffee Club membership, a loyalty program, to market digitally to individual consumers, Quincey said.
Coke could also potentially use the stores as a pick-up location for customers who may want to order products directly from the company’s website, Lawrie said.
The Costa deal still needs to get approval from shareholders and regulators, and is expected to be completed in the first half of 2019.
Only a few people really know what happened inside NBC News when Ronan Farrow’s reporting about Harvey Weinstein was shelved by the network.
Those people have conflicting accounts about what went wrong. Right now it’s the word of Farrow and his producing partner, Rich McHugh, versus NBC executives.
Farrow took his work to The New Yorker, helped spark a national movement against sexual harassment and won a Pulitzer Prize for his reporting. But the NBC part of what happened has remained a mystery. And now the story behind the story threatens to upend a major news network.
Below, a who’s-who of some of the individuals at the center of this drama.
Farrow’s time at NBC began with a short-lived daytime program on the network’s cable news channel, MSNBC. After debuting in 2014, “Ronan Farrow Daily” lasted only a year, as Farrow transitioned into more of a roving reporting role. He soon focused on investigative work, and last year he began digging into the claims against Weinstein. For eight months, Farrow reported the story out, eventually obtaining a recording of an NYPD sting in which Weinstein admitted to groping model Ambra Battilana Gutierrez.
In August, Farrow was set to fly out to California for an interview with a woman who was going to claim Weinstein raped her. But according to a former NBC producer who worked with Farrow on the Weinstein reporting, that didn’t happen because the network didn’t want it to.
Farrow eventually took the stories to the New Yorker, with the first piece publishing in October of last year. And the public may not learn Farrow’s interpretation of events until he’s finished with his upcoming book, “Catch and Kill,” which will detail his reporting on Weinstein.
He has, however, dropped hints about the network’s reluctance, telling Rachel Maddow on MSNBC, “I walked into the door at The New Yorker with an explosive reportable piece that should have been public earlier. And immediately New Yorker recognized that, and it is not accurate to say that it was not reportable. In fact, there were multiple determinations that it was reportable at NBC.”
McHugh’s claims about NBC were detailed in two explosive stories published on Thursday night by The New York Times and The Daily Beast. McHugh resigned from the network earlier this month and is the first person linked to NBC to accuse the network of hampering his and Farrow’s work.
He began working with Farrow in 2015 for an investigative series that aired on the “Today” show. The two pursued the Weinstein allegations last year, but McHugh says now that the network was “resistant” during the reporting process.
McHugh said that the network “ordered” he and Farrow to not interview the Weinstein accuser in California last August and “to stand down on the story altogether.” McHugh said the order came from “the very high levels of NBC,” but he did not specify which executives he meant. NBC has pushed back hard against McHugh’s claims, while Farrow has offered only praise for the producer.
“He’s a person of integrity, and he cared deeply about the investigative stories we worked on together and the importance of seeing them through,” Farrow said of McHugh in a statement.
Other journalists have come out publicly to support McHugh since the new stories broke Thursday. Chris Francescani, a reporter at ABC News who worked on NBC’s investigative unit, said on Twitter that McHugh and Farrow “are telling the truth,” while NBC executives “are not.”
Losing Farrow and the Weinstein story is just one of many reasons that Lack, who returned as head of NBC News in 2015 after running the news division in the ’90s, has been under scrutiny of late. Lack’s recent tenure has been dogged by controversy.
The network infamously lost the “Access Hollywood” scoop in the run-up to the 2016 election, and one of NBC’s biggest stars, Matt Lauer, was fired last year over allegations of sexual misconduct against him.
Sources told CNN last year that Lack and another NBC News executive were involved in the decision not to run Farrow’s story. The other executive said to be involved in the decision, Noah Oppenheim, has insisted that the reasons for not running the story were completely on the level.
Oppenheim, the president of NBC News, has denied McHugh’s account, telling theTimes that Farrow and McHugh were told repeatedly that “the standard for publication is we needed at least one credible on-the-record victim or witness of misconduct” andthat “we never met that threshold while Ronan was reporting for us.” Oppenheim said he even encouraged Farrow to pursue the story, and offered tips.
As for the claim that Farrow’s interview in California was killed, Oppenheim said that decision was made after Farrow had already indicated that he would take the story to a magazine.
“We said: ‘You’ve asked for permission to go elsewhere. You can’t use an NBC camera crew for another outlet. You can do whatever you want to do,” Oppenheim told the Times. “And you don’t work for us.'”
But Oppenheim’s name invariably is mentioned in stories about what happened with Farrow’s reporting. HuffPost reported last year that Oppenheim told Farrow that Weinstein’s lawyers claimed Farrow had a conflict of interest because Weinstein had worked with Farrow’s estranged father, Woody Allen. NBC and Oppenheim have denied that Weinstein influenced the process in any way.
Sources told The Daily Beast that Farrow suspected that Oppenheim, who is also a screewriter and TV producer, was communicating with Weinstein about Farrow’s investigation. An NBC News spokesperson told the Daily Beast that Oppenheim “never had a conversation with Harvey Weinstein about the content of NBC News’ investigation.”
Auletta, a mediawriter for the New Yorker, helped Farrow find a home for the reporting after he parted with NBC. Farrow reached out to Auletta after encountering road blocks at NBC, which led to the stories landing in the New Yorker.
It’s a move that Auletta likened to the Boston Red Sox trading Babe Ruth to the New York Yankees, one of the most infamous deals in the history of professional sports. “I still can’t believe Ronan is only 30 and hitting home run after home run,” Auletta told CNN’s Brian Stelter.
McGowan triggered a wave of speculation in 2016 when she tweeted that she had been raped by a Hollywood executive. Oppenheim told the Times those posts prompted him to encourage Farrow to interview the actress and activist. Farrow eventually secured an interview with McGowan last year. “From that point on, I think it’s fair to say Ronan and I felt resistance,” McHugh told the Times. “We were told to put the story on the back burner.”
Rich Greenberg, executive editor of the NBC News investigative unit, told the Times the problem was the interview iteself: McGowan, he said never mentioned Weinstein’s “name on camera with us.” HuffPost reported last year that McGowan “withdrew her permission for NBC News to use the footage after she’d received legal threats from Weinstein.” Weinstein, through a spokesperson, has consistently denied all allegations of non-consensual sex.
The Atlantic’s Sophie Gilbert wrote a column recently that was widely praised by female journalists, many of whom took to Twitter to say they’ve been waiting for someone to tackle a negative stereotype that’s long been perpetuated by Hollywood.
In her column titled “The Lazy Trope of the Unethical Female Journalist,” Gilbert gave readers a history lesson about the storytelling trope that female reporters “are having sexual relationships with their bosses, their sources, or both.” She credited New York magazine’s Marin Cogan for analyzing this trend back in 2015 for an article in which Cogan cited “House of Cards” and the film “Thank You For Smoking” as examples of disappointing portrayals of female reporters.
But in 2018, amid a national reckoning over how men treat women in a professional setting, the cliché hasn’t gone away. The most recent example is in “Sharp Objects,” an HBO show starring Amy Adams, who plays a journalist whose behavior can best be described as questionable.
Female journalists in the real world are sick of it.
“I have been annoying everyone in my life with tedious rants on this exact topic,” tweeted New York Times reporter Erin Griffith. “I feel very vindicated.”
TechCrunch’s Kate Clark shared Gilbert’s column on Twitter and said, “We need accurate portrayals of women in many, many fields, including journalism.”
Sex with sources, substance abuse, incompetence and crossing ethical boundaries are among the typical behaviors that make up the trope, which goes back “about four decades,” Gilbert said.
“It’s certainly interesting to think about in this moment a year after Harvey Weinstein and all the allegations that followed,” Gilbert told CNN’s Brian Stelter for this week’s edition of the Reliable Sources podcast. “It sort of makes you think slightly differently about how innocent this portrayal of young ambitious female reporters sleeping their way to the top actually is, or whether it does in fact have ramifications.”
Listen to the whole podcast here:
Gilbert said she heard from hundreds of female journalists since her column was published on August 20. Many thanked her for tackling the topic and some shared their own stories about sources getting the wrong idea.
“They shed their own anecdotes about, you know, how when they occasionally make outreach to potential sources on a professional level that it’s often mistaken for a sort of personal outreach,” she said.
These flawed representations of journalists are also harmful when taking into account the public’s perception of the media.
“It sort of colors the way that people think about how female reporters do their job,” Gilbert said. “And that matters certainly at a time like now when how much people trust the media and particularly people out doing reporting…that counts.”
The earliest example of this trope that Gilbert found in her research was in a 1981 film called “Absence of Malice,” which stars Sally Field. She plays a reporter in Miami who develops a romantic relationship with the man she’s writing a story on.
“I think Roger Ebert when he was reviewing that movie noticed that it was fairly preposterous in its portrayal of journalism,” she said. “But he also admitted that he didn’t mind because it was entertaining and I think that’s how it got started.”
There are some notable examples of competent female journalists in entertainment, but they’re typically in documentaries like “The Fourth Estate,” or films that are based on true stories, Gilbert said.
Gilbert says this type of representation is popular because it plays up the mystique between a source and a reporter.
“I mean there is so much that’s interesting about this job and particularly with the source-reporter relationship,” she said. “It is so intimate and so fraught and there’s all this kind of tension that can be explored in ways that I think would make for terrific television, even if it’s not overtly sexual.”
The median American household currently holds just $11,700 in savings, according to a new analysis of Federal Reserve and Federal Deposit Insurance Corp. data by personal-finance site Magnify Money. Median balances (the midpoint value) are lower than the average savings rates. The top 1% of households in the U.S. by income have a median savings of $1.1 million across a variety of saving accounts. The bottom 20% by income have no savings accounts and the second lowest 20% income earners have just $26,450 saved.
The average savings in retirement, money market deposit, checking and savings and certificate of deposit accounts are skewed by higher earners with more money. The top 1% of households have an average of $2.5 million in accounts, while the bottom 20% of households have an average of $8,870 saved. To put that in context: The average household has $277,670 in retirement accounts and $4,830 in savings accounts, while the median household only has $72,840 in retirement accounts and $32,130 in savings accounts.
Stagnant wages, student debt, soaring house prices and rising credit-card debt have not helped people save. “Lots of families are living paycheck to paycheck and struggling to save even a little,” said Caroline Ratcliffe, a senior fellow at the Urban Institute, a nonprofit policy group based in Washington, D.C. “Limited savings isn’t only an issue for low-income families. Quite a few middle- and high-income families have no savings cushion to fall back on. One in five middle-income families and one in 10 high-income families have no retirement savings.”
So what households save the most? “Wealthier households comprise most of them, but less-well heeled households can have healthy levels of savings as well,” the report concluded. Of those households that have managed to save more than the national savings average, 59% are among the top 20% of income earners. But many less well-off families have also manage to save money in these kinds of accounts: Approximately 41% of above average savers are in the bottom 80% of income, the report said.
“Low-income people can and do to save, particularly when provided with incentives,” Ratcliffe said. Peer pressure helps: People who realize they’re spending more than their families, friends and colleagues—those who are of similar ages, incomes, locations and credit scores—will actually cut back on their spending, research shows. The most common advice is to start saving early and often to benefit from compound interest, which adds interest to both the capital and the interest already earned. (Here are 101 simple ways to save more.)
Very few of the 126 million U.S. households covered in the latest data are average. “As of 2016, about 78% of households had at least one of the following: a savings account, a retirement savings account, a money market deposit account or certificates of deposit,” it said. The bad news: Just over half of Americans own stocks, a Gallup report recently concluded. That includes 401(k) plans, shares in an equity mutual fund and/or an IRA account. Two-thirds of Americans do not even participate in or have access to a 401(k) plan, according to the U.S. Census Bureau.
There is also wide disparity in saving, based on age and income, and whether you look at the average or median (midpoint), MagnifyMoney added. Millennial households have an average $24,190 in savings, but half of millennials has less than $2,430 saved. Generation X households have an average $125,560 saved, but half has less than $15,780 in savings, checking or retirement accounts. Baby boomers and older have an average $274,910 saved, but again half that cohort has less than $24,280 saved.
The poorest Americans fare the worst. Some 50.8 million households or 43% of households can’t afford a basic monthly budget for housing, food, transportation, child care, health care and a monthly smartphone bill, according to an analysis of U.S. government data released earlier this year by the United Way Alice Project, a nonprofit based in Cedar Knolls, N.J. “For too long, the magnitude of financial instability in this country has been understated,” said John Franklin, chief executive of the United Way Alice Project.
The United Way Alice Project uses standardized measurements to calculate the “bare bones” household budget in each county in each state. It maintains that the federal poverty level — currently $25,100 for a family of four — doesn’t accurately illustrate the number of people living in poverty because it doesn’t take into account the dramatically different costs of living across the U.S. “It is morally unacceptable and economically unsustainable for our country to have so many hard-working families living paycheck to paycheck,” he said.
The project says Alice (“asset limited, income constrained, employed”) workers are the forgotten people: Child care workers, home health aides and retail workers in low-paying jobs and have difficulty saving money and are one paycheck away from the street. In 2017, 44% of people in the U.S. said they could not cover an unexpected $400 emergency expense or would rely on borrowing or selling something to do so, down from 46% the year before, according to a separate report released last year by the U.S. Federal Reserve.
Some Americans are, indeed, spending less, but hoarding that money in their checking accounts. People had the least amount of money in their checking accounts in 2007, when times were good just before the Great Recession. In fact, they had on average less than $1,000 in their account. Today, the average checking account customer has more than $3,700 stashed away, significantly more than the median amount in checking accounts since 1991 is $2,263, according to Moebs Services, an economic-research firm in Lake Bluff, Ill.
When times are good, Americans feel confident by keeping little in checking, but when times are difficult they store money in checking accounts, pulling back on spending on retail and restaurants. Michael Moebs, economist and Chief Executive of Moebs Services, said this may be a cause for concern at a time when the Federal Reserve is raising interest rates, making it more difficult to buy a home, but creating more of an incentive to put money into savings accounts. The one obvious upside: Many investors have enjoyed gains in a 113-month bull market, the longest in history.
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When Americans aren’t busy firing up the grill for a backyard barbecue or hitting the road this Labor Day weekend, there’s a good chance they’ll be looking to shop the holiday sales. But if consumers aren’t careful, they could actually be missing out on savings.
While not as big as Black Friday, Independence Day or Memorial Day, retailers still use Labor Day weekend as an opportunity to move merchandise off the shelves in the lead-up to the holiday shopping season. The weekend is also a last-ditch opportunity for many shoppers looking to score back-to-school bargains.
As a result, there are some good deals to be had, but most sales don’t offer the best possible savings. “Labor Day is one of the weaker sales weekends of the year,” said Kristin Cook, managing editor for BensBargains.com. “Most retailers will save their really good stuff for Black Friday, which has turned into basically Black November.”
Here’s what to skip this year or, at least, approach with caution.
Avoid: Fall apparel and footwear
Labor Day is perhaps one of the worst times to buy fall clothing. For shoppers in desperate need of warmer clothing as the fall weather rolls in, the first two or three weeks of September are a better time to shop when retailers start heavily marking down “back to school” apparel, Cook said. Better yet, they can wait for clearance sales during Black Friday.
Labor Day is however a good time to buy summer clothing, including swimwear and shorts. Expect retailers also to stock the shelves with this year’s popular Halloween costumes to catch the eyes of trick-or-treaters, but avoid whipping out the wallet to buy one. The best time to buy costumes is right after Halloween.
Jewelers tend to restock in October, said Sara Skirboll, shopping and trends expert at deals website RetailMeNot. Consequently, these stores will be disinclined to offer any significant deals in September with such low inventory.
Black Friday and Cyber Monday will be somewhat better, but the best time to shop for that diamond ring or necklace will be in the weeks following Valentine’s Day.
Deals on items like laptops, televisions and smartphones actually aren’t bad in early September. But those who can wait should. “Black Friday and Cyber Monday discounts prove to be much deeper so purchasing any electronics Labor Day weekend will make a larger dent in your wallet than needed,” Skirboll said.
Avoid: Toys and video games
Some stores will offer deals on video games and toys during Labor Day, but consumers are almost certainly better off waiting for Black Friday or even later, said Phil Dengler, co-founder of BestBlackFriday.com.
This is especially true for video game consoles. Not only will the discounts be better at the height of holiday shopping season for these items, but many retailers will offer them as bundles with games and gift cards, Dengler said.
Avoid: Purchases through credit card shopping portals
As Black Friday creeps closer, credit-card companies will begin to ramp up the deals they offer through their deal portals, said Ashley Dull, credit strategist and editor in chief of CardRates.com. As a result, discounts offered now by credit cards won’t be as competitive.
Consumers should also approach Labor Day deals with caution if their credit card features rotating bonus categories. “Cards with rotating bonus categories will typically switch to popular holiday retailers during the fourth quarter, unlocking extra rewards,” Dull said.
What to approach with caution
Though Labor Day discounts will pale in comparison to the holiday shopping season, sales on certain items can be competitive.
Appliances: Sales on major appliances are typically better during other times of the year. For instance, in May retailers often put refrigerators on sale, because new models become available in June. But some retailers, including Macy’s
are offering up to 40% off some goods this weekend, which is in line with Black Friday pricing.
Gas grills: Labor Day is most famous for its sales on grills — and good deals are often available this weekend as prime grilling season comes to a close. Sales can range between 25% and 75% off, Dengler said. Consumers could save even more by waiting until October or November, although selection will be more limited then.
Summer items: With autumn only weeks away, stores are going to be deeply discounting inventory that’s geared toward summer, such as lawn mowers, air conditioners, patio furniture and swimming pools. These discounts will be available across many retailers including The Gap
will be offering discounts of up to 75% off on their mattress inventory this weekend, according to Dengler.
Cars: With new models rolling onto lots this time of year, car dealerships will be looking to sell their remaining inventory of 2018 models. In addition to lower prices, car buyers will find attractive financing offers this weekend and rebates, though they should still plan to negotiate a better price.
Millions of people are expected to travel for the last weekend of summer.
The last time AAA measured the number of cars on the road was 2015, when 35 million people traveled over the Labor Day weekend. This weekend could see even more traffic, as 2018 has been a record year for road travel.
Memorial Day and Independence Day both saw 5% increases in traffic over last year and a record-breaking 46.9 million Americans traveled around Independence Day. Some 41.5 million Americans traveled Memorial Day weekend, the most since 2005.
Last year, Labor Day travelers drove more than 75 million miles and burned through 3.5 million gallons of gas, according to a report from Hum by Verizon
, a vehicle tracking system. The report examined data from more than 550,000 drivers to determine the best and worst time to hit the roads on the three-day weekend.
Best and worst times to travel
The worst time to be on the road is Friday afternoon, according to Julie Hall, spokeswoman at AAA, as many people will leave work early to hit the road.
Rush hour — around 5 p.m. on Friday — is particularly bad, but waiting until after that time can be even worse, the Verizon report said. “The most trips per hour were made from 7 p.m. to 9 p.m. on the Friday before Labor Day, so waiting until rush hour is over does not mean fewer cars on the roads,” it said.
Experts suggest leaving at the crack of dawn, or just after. The best time to get on the road for Labor Day is between 5 a.m. and 7 a.m. on Friday or Saturday to avoid “bumper-to-bumper traffic,” according to the analysis. Some travelers should take that advice to heart: California, Ohio, and Pennsylvania had the highest volume of traffic in 2017.
Grab a coffee and a light breakfast, don’t stop to fraternize with the other guests at your hotel, and just hit the road as soon as you can. As with the day of departure, the best time to come back home on Labor Day weekend is early, especially if you want to avoid metro area bottlenecks, the Verizon report concluded. It found the easiest time to head back home is before noon on Monday, as traffic peaks after 3 p.m.
As always, motorists should avoid distraction while driving, according to AAA, and get plenty of rest. The safety organization recommends taking breaks from driving every two hours or 100 miles to remain alert.
“Hands-free and in-vehicle technologies can mentally distract drivers, even if their eyes are on the road and their hands are on the wheel,” Hall said. “Drivers should designate a passenger to serve as their official text messenger and navigator.”
Airline travel will be packed as well: according to industry trade group Airlines for America. Some 16.5 million people are expected to fly on U.S. airlines between Wednesday, Aug. 29, and Tues., Sept. 3. More people may be tempted to fly rather than drive because gas prices were at their highest this summer since 2014.
What’s more, 2018 has been an “exceptionally busy” year for air travel, Airlines for America vice president John Heimlich said in a statement, with 20 out of the 25 busiest days ever recorded by the Transportation Security Administration occurring so far this year.
Friday, Aug. 31 is set to be the busiest air travel day of the week, with 2.76 million passengers flying. This Labor Day airlines will accommodate an average of 2.36 million passengers each day, a 79,000 person increase from 2017.
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About 10 percent of U.S. children have diagnosed attention-deficit/hyperactivity disorder, a new study found.
Researchers from the University of Iowafound 10.2 percent of children between the ages of 4 and 17 had diagnosed ADHD in the 2015-2016 survey, up from 6.1 percent in 1997 and 1998.
ADHD was already considered one of the most common conditions among children, and the spike shows just how many young people are being diagnosed with it. Teachers and parents are more aware of the disorder, which can stifle kids’ ability to concentrate and sit still in school.
“With the continuous increase of this condition, it is very common now. This is really, really common compared to other conditions,” said Dr. Wei Bao, an assistant professor of epidemiology at the University of Iowa and one of the authors of the paper published Friday in JAMA Network Open.
To determine the prevalence of ADHD, researchers reviewed data on 186,457 children collected in the National Health Interview Survey, an in-person interview that the Centers for Disease Control and Prevention conducts annually.
However, the high number might not be entirely reflective of how many kids actually have ADHD, said Dr. Scott Benson, a psychiatrist at the Creekside Psychiatric Center in Pensacola, Florida.
Many children, especially those living in poverty or dealing with challenges at home, may struggle to focus. That’s natural given the stressors they’re dealing with, but it may cause some doctors to question whether the child has ADHD.
Inattention, hyperactivity and impulsivity are symptoms of ADHD, according to the American Psychiatric Association.
“We know one of the common errors is misdiagnosis,” said Benson, who was not involved with the study. “So at first blush, it just looks like the kid’s not paying attention. The second time, you realize the child is struggling with deep anxiety so he’s not going to respond to ADHD treatment.”
When kids are correctly diagnosed with ADHD, though, he said treatment works. Doctors can prescribe medications, such as Adderall and Vyvanse. So it is important for parents to take their children to the doctor when they suspect something and for doctors to carefully and accurately examine them.
With inventories in a more healthy place and nationwide interest rates ticking up, a report from Edmunds shows that zero-percent finance deals accounted for the smallest portion of July auto sales in over 10 years.
The report shows these deals accounted for just 6.92 percent of new car deals in July. That’s a significant drop off from last year’s 11.34 percent, or 11.18 percent 5 years ago, representing the lowest proportion of deals since 2005.
“It’s definitely much less pervasive than it’s been in the past,” Jeremy Acevedo, Edmunds’ manager of industry analysis, told CNBC. “We’re seeing levels that are a little more than half of what they were last July.”
Automakers have a good inventory mix of in-demand vehicles that don’t require heavy incentives to sell, Acevedo said. You can still get zero-percent deals on less desirable vehicles — sedans in particular — but the automakers aren’t as weighed down with previous-model-year vehicles this year.
Additionally, zero-percent finance deals are becoming a less cost-effective way for automakers to drive deals. General Motors, which popularized the concept with their post-9/11 “Keep America Rolling” zero-percent financing, has been less aggressive with the practice this year.
“That’s partly a function of rising interest rates, which makes it a little more expensive,” GM spokesman Jim Cain said.
It’s still pretty widely used in the industry, but GM likes to keep a mix of different incentives in the industry, he said.
“The way we try to approach things is to make sure we have competitive lease deals, especially in markets like the Northeast and California where leasing is really possible,” Cain said. “And we have a simple and compelling message that’s easy for our dealers to advertise and cuts through the clutter.”
For people looking to buy rather than lease, Cain says the company is focusing on direct discounts that make sense to the customer. Rather than differing interest rates for different terms and buyers, it’s easier to effectively market a 10 percent discount.
“It’s clear and compelling,” Cain said. “It’s familiar, because that’s how other retailers typically have their sales promotions.”
And while it’s been a major part of the summer sell down for all three major American automakers since 2005, Acevedo isn’t optimistic that zero-percent financing offers will be commonplace in the future.
“It doesn’t look like APRs are going down any time soon,” he said. According to the report, the average annual percentage rate, or APR, in July was 5.74 percent, compared with 4.77 percent a year ago. Overall, interest rates are near their nine-year high.
Some automakers —Subaru, Mazda, Cadillac, and Lincoln were the ones Acevedo specifically noted — are making more interest-free deals than others. But if automakers can offload their 2018 inventories without having to offer zero-interest loans, Acevedo expects that to signal the end of widespread availability of these loans.
That, combined with ever-increasing APRs and epic term lengths, means Americans will likely continue to spend a rising proportion of their car budgets on financing alone. To Acevedo, that may spell long-term trouble for the automotive market.
“It definitely, to us, signals some caution lights to be aware of what’s happening ahead,” he said.
It’s the sort of rescue mission that, on film, might have required the likes of a James Bond to pull off, something that would seem apropos considering Aston Martin has long been the brand of choice for super-spy 007.
Not that many years ago, the British automaker seemed teetering on the edge of what could have become its ninth bankruptcy in a century. Now, with its balance sheet solidly in the black and a plan to double sales over the next few years on the back of new products, Aston has announced it is ready for a long-rumored IPO. It’s a move CEO Andy Palmer hopes will echo what happened when arch-rival Ferrari went public in 2015.
“Today’s announcement represents a key milestone in the history of the company, which is reporting strong financial results and increased global demand for its award-winning sports cars,” Palmer said in a statement on Wednesday.
A long-time senior strategist at Nissan, Palmer, now 55, joined Aston four years ago. Many wondered why he did considering the British carmaker’s sorry shape. Aston had been sold off by former parent Ford Motor in 2007 and barely seemed to survive the Great Recession under its new owners, a consortium that included Kuwaiti firms Investment Dar and Adeem Investment, and Italy’s Investindustrial.
With an aging product line and little market momentum, some wondered when, rather than if, the company would go under again. It had already gone broke at least six times, and possibly eight, marketing chief Simon Sproule recalled in an interview ahead of the IPO announcement, adding that, “The records get hazy when you go back over the last 105 years.”
Palmer moved fast to put the company on a different track. He quickly drew up a plan to launch seven completely new product lines in seven years, starting with the DB11 sports car that debuted two years ago. It and the DBS Superleggera, which followed it to market, are classic Astons — sleek looking and blindingly fast. Aston’s investors bought into what was to become, at a projected cost of $845 million, the largest project in the Gaydon, England-based company’s history.
But Palmer wasn’t planning to just repeat, albeit on a larger scale, Aston’s traditional formula. Within days of coming onboard in autumn 2014, he set the company’s product team to work developing the DBX. A prototype of the luxury SUV debuted just months later, at the 2015 Geneva Motor Show, to strong reviews. A production version will follow in a little more than a year.
“I knew the mass of the market had clearly moved over to SUVs. I also knew 72 percent of Aston owners had an SUV, so why wouldn’t we transition those brand advocates out of something like a Range Rover and into an Aston SUV?” Palmer asked during an interview.
He would soon push even further out from Aston’s comfort zone by announcing a second SUV to debut in 2020, this one to wear the badge of the Lagonda brand, a subsidiary that hadn’t produced a vehicle in decades. Even more radically, the utility vehicle – which will target the likes of the new Rolls-Royce Cullinan – is going to be all-electric, as will all future Lagonda models, including a sedan coming in 2021.
To leverage what is still, on the automotive scale, a relatively small bank account, Aston has been pushing to develop a series of strategic partners. Red Bull Racing, for example, is helping develop its upcoming “hypercar,” the Valkyrie. Daimler, meanwhile, has taken a 5 percent stake in its erstwhile rival, a trade-out for providing Aston much-needed V-8 engines from its high-performance Mercedes-AMG unit, as well as the infotainment systems going into new models like the DB11 and Superleggera.
When describing his strategic vision, Palmer envisions Aston as more than a carmaker, preferring to compare it to the likes of LVMH Moët Hennessy Louis Vuitton. But don’t expect to see it selling caps and scarves. However, it is venturing out of its comfort zone with things like the personal sub being developed in partnership with Triton Submarines. Then there’s the 66-story condo complex, the Aston Martin Residences, going up in Miami.
And, at this year’s Farnborough Air Show it revealed something James Bond would likely appreciate, a three-seat personal aircraft capable of jaunting from London to Paris in just 30 minutes that Palmer sees as part of a rapidly changing world of transportation. It would be. Developed in cooperation with Cranfield University and Rolls-Royce Aerospace, a functioning prototype is due in 2020 and he seriously predicts a production model could follow before 2030.
“It’s remarkable what Andy Palmer has been able to do at Aston Martin on just a shoestring budget (and) in a very short time without diluting the brand,” said David Sullivan, a senior analyst with AutoPacific.
What investors may be more closely focused on, however, is what the CEO has been able to accomplish on Aston’s bottom line, which is now in the black for the first time in about a decade, according to Simon Sproule, its global marketing chief. In a regulatory filing ahead of the planned IPO on the London Exchange, Aston noted that adjusted pretax earnings for the first half of the year increased 14 percent year-over-year, to 5 billion pounds ($137 million). Sales during the period jumped 8 percent, to 445 million pounds.
That would be just a starting point under Palmer’s plans, if it can hold course. Aston sold a record 5,117 vehicles last year, its best numbers since 2008. It is looking to quickly reach 7,000 to 8,000 annually, then 14,000 by the time all seven of its new models are in production. Looking further out, Palmer sees still more opportunity for growth, though he quickly added his preference to err on the “conservative side.”
Asked what makes him wake up in a sweat at night, the native Brit said he doesn’t think either Brexit or a Trump import tariff will be more than minor setbacks. He’s more worried about a global, Lehman Brothers-level financial shock.
Whether investors will buy that optimism could be demonstrated in the coming year, the timing and pricing of the planned IPO yet to be revealed.
Clearly, Palmer hopes to replicate the success of Ferrari, which went public in 2015. It’s now valued at around $24 billion, or 35 times earnings. Anything close to Ferrari-level multiples would be impressive, said Sullivan, not only considering Aston Martin’s troubled history but what has been happening with its former parent, Ford, which just suffered a downgrade in its debt to one notch above junk grade.
“It makes you wonder what would have happened,” said Sullivan, “had Ford been able to make things work with the Premier Automotive Group,” the one-time collection of European luxury brands that included Jaguar, Land Rover and Volvo, as well as Aston Martin.
It’s back in business now after paying a $1 billion fine and agreeing to heavy oversight from the US government.
The months-long ban delivered a heavy blow to ZTE’s revenue, which dropped to 39.4 billion yuan ($5.8 billion) for the first half of the year from 54 billion yuan ($7.9 billion) a year earlier. Combined with the hefty fine, the ban helped drag the company to a net loss of 7.8 billion yuan ($1.1 billion).
But ZTE predicts it will post a net profit of as much as 1 billion yuan ($146 million) for the quarter ending in September, according to its earnings report released late Thursday.
“ZTE is rapidly moving back on track,” Edison Lee, an analyst with investment bank Jefferies, said in a research note.
The company’s shares rose more than 1% in Hong Kong on Friday, but they are still down about 40% from where they were before the ban.
The US government said it imposed the ban because ZTE violated an earlier deal punishing it for evading sanctions on Iran and North Korea.
The Trump administration’s decision to lift the ban after an intervention by Chinese President Xi Jinping was controversial in Washington. Some members of Congress sought unsuccessfully to keep the restrictions in place, citing national security concerns.