Some interesting news items from last week were drowned out in the political clamor:

  • Ford Motor Company is taking a $500 million stake in Rivian Automotive.  Rivian is an electric truck maker start-up.  With this action, Ford is placing its bets on the emergence of electric (battery-powered) vehicles.  Ford is planning on co-developing the new plug-in electric model.  Rivian has plans to start selling an all-electric pickup truck in the U.S. late next year.  The arrangement with Rivian will be separate from Ford’s own multi-year $11 billion investment in its electric vehicles, where plans are to produce an electric version of Ford’s best-selling F-150 pickup.
  • Auto dealerships have shown noticeable increases in recent months and their stock prices have risen.  Dealerships have begun turning to ways other than new car sales for the production of revenue, including used car operations and service departments.  As well, the Fed’s decision to keep interest rates steady has also helped increase the dealerships’ stock performance – these companies rely on low interest rates to make it less expensive to build up inventory as well as for customers to take out loans for auto purchases.  Dealerships are also realizing strong profits from their parts and service business – an analyst reported, “People have underestimated the power of the parts business . . . and dealers have neglected used vehicles but now they all have stand-alone used vehicle stores.”  And, all is adding to the better profit margins.
  • Walt Disney Company has begun the process of new production in anticipation of its switch to its streaming business in seven months.  We’ve talked a good bit about Disney and its streaming competitors in recent posts.  The company is shuffling the executive ranks of its film operation so that studio President Alan Bergman can help oversee a division that has produced Hollywood’s biggest hits.  Bergman who has been president of the Walt Disney Sturios since 2005 will become co-chairman of the division, along with current chairman Alan Horn.  Bergman and Horn will oversee a film slate that is “the envy of Hollywood” (ref WSJ).  The power sharing arrangement is also indicative of the challenges created by the ambitious bets the studio is making for the coming years.  The launch of the new streaming service requires that the studio produce even more movies under a separate distribution structure where the movies are not launched in theaters, but in their on-line streaming.  Additionally, the company is now deeply involved in integrating the assets it acquired from the 21st Century Fox deal.  Bergman has recently led the integration of Pixar, Marvel, and Lucasfilm.  When Horn was appointed in 2012, he was charged with the responsibility of stabilizing the studio, which was seen as an erratic performer at the time.  Clearly, he has done the job – during Horn’s tenure, Dsney Studios has dominated the box office.  So, all in all, these new moves of very talented people herald big things afoot at Disney.


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