<![CDATA[NBC 7 San Diego - Business News]]>Copyright 2018 https://www.nbcsandiego.com/news/business http://media.nbcnewyork.com/designimages/KNSD+RSS+Feed+logo+blue.png NBC 7 San Diego https://www.nbcsandiego.com en-usTue, 14 Aug 2018 16:10:37 -0700Tue, 14 Aug 2018 16:10:37 -0700NBC Owned Television Stations <![CDATA[What Happens When China Doesn’t Want Our Recyclables]]> Mon, 13 Aug 2018 13:20:29 -0700 https://media.nbcsandiego.com/images/213*120/recycle-messy.jpg

Feeling pleased that your conscientious recycling is helping to save the environment? Not so fast. Your yogurt container or takeout clamshell might end up in a dump thanks to a ban on discarded items that the United States had been sending to China for processing.

This year, China followed through with its threat to prohibit the import of U.S. plastics, mixed paper and other materials that it says were turning the country into the world’s garbage dump. The repercussions from the new policy have been quick and nowhere close to sorted out in communities across the U.S. 

Sacramento, California, cut back on which plastics it will pick up curbside, and will send items like egg cartoons, medicine bottles and some yogurt containers to landfills instead.

San Diego’s recycling program brought in $4 million in revenue last year. Recycling could now cost the city $1.1 million.

In New Jersey, Sunil Bagaria is retooling his company, moving from one that exported to China to one that will do the work of recycling in the U.S.

“What we are trying to achieve is recycling at source,” said Bagaria, president and co-founder with his brother of GDB International, a recycling and sustainability company based in New Brunswick. “That means the community that produces the plastic waste will be responsible for the recycling.”

But until that happens, recycling markets are in turmoil. China had been taking half of the world’s paper and plastic when it called a halt to the imports, tightening the contamination limit to 0.5 percent for most imports. The material it used to accept was too dirty, it said.

Now no one knows where that material will go instead. While the developed world looks for new markets for its scrap, environmentalists warn that we must curb our addiction to disposable items, from plastic cups to food containers and other items that we use once and throw away.

“The human footprint on the planet and here in the United States is still too large,” said Benjamin Orlove, a director at Columbia University’s Center for Research on Environmental Decisions and a faculty member of its Earth Institute.

Here's how we got to this point: For decades, the U.S., rather than recycling its own material, had been sorting it, baling it and shipping it to China, where it became raw materials for new goods. But then China began warning that as part of its efforts to tackle its environmental pollution, it would impose stricter demands on scrap imports. China launched Green Fences in 2013 to enforce regulations on the quality of the imports, and announced its latest policy, National Sword, last year. It told the World Trade Organization that it needed to protect China’s environment and the health of its people.

Dirty or hazardous waste mixed in with raw materials had "polluted China's environment seriously," the WTO filing said.

China’s 40 years of economic growth has pushed the country’s carbon dioxide emissions to the highest in the world, and left China dealing with terrible smog and water and other pollution. Its economy now is the second largest of all nations, about two-thirds of the U.S. output last year. China has less need for imported scrap material, though some economists question whether fewer recyclables could result in a slowdown. At the same time China banned imported trash, it announced plans to step up enforcement of recycling within the country.

“They have a mountain of plastic scrap of their own so they want to first solve their own problem before importing plastic scrap from overseas,” Bagaria said. The takeaway for him was that China’s shutoff means other countries have to take responsibility for recycling at source.

The U.S. has a long way to go. Of the 258 million tons of waste that Americans generated in 2014 more than 89 million tons were recycled and composted for a recycling rate of 34.6 percent, according to the Environmental Protection Agency.

China had been taking about 40 percent of U.S. paper, plastics and other recyclables but after the new restrictions began going into effect, the numbers plummeted. Recycled plastics from the U.S. to China dropped by 92 percent over the first five months of the year. All types of exported scrap, from plastics and paper to aluminum, cooper and stainless steel, fell 36 percent.

The Chinese market was greater than the next 15 markets combined, leaving the U.S. with little in the way of backup. Thousands of tons of material that would have been recycled are now going into landfills instead. Some municipalities have stopped collecting items that used to be recycled and others have been stockpiling them.  

“No other market can possibly take in that much volume and they gave us so little time for transition that the industry is still having to react,” said Adina Renee Adler, a senior director at the Institute of Scrap Recycling Industries. “So unfortunately we have seen some materials go to landfill, which is no good.”

California is especially dependent on China. It had been exporting about a third of all recyclable material that it generated, 62 percent of that to China.

The new ban is playing out by the numbers. Sacramento continues to take plastics marked with codes one through three — PET or polyethylene terephthalate which is used for soft drink bottles and peanut butter jars; HDPE or high density polyethylene, which is used for milk jugs, butter tubs and detergent bottles; and V or polyvinyl chloride, which is used in shampoo bottles. But it is no longer accepting plastics four through seven, which typically are found in grocery bags, many yogurt containers, bottle caps, meat trays and other items.

Sacramento asked its Houston-based waste and recycling hauler, Waste Management, to indicate which items should no longer be included in its recycling collection before changing its recycling criteria.

Waste Management spokesperson Janette Micelli said there is no "system-wide restrictions on materials" and it makes sure customers understand what the markets will pay for recyclables being collected. The company has shifted material to alternative markets, some domestically, some elsewhere.

“While we've been shipping into China for years, we also have opened up market in other parts of Southeast Asia, India, South America and Europe,” said Brent Bell, a Waste Management vice president for recycling. “And so when the Chinese starting restricting the imports we quickly shifted that material to some of these alternative markets.” 

San Diego historically had exported 80 percent of its curbside material, 60 percent to China, according to the city’s Environmental Services Department. The percentage dropped to 24 percent in the first quarter of 2018.

Its recycling processing contractors in May proposed suspending all revenue payments to the city — which stood at $4 million in the last fiscal year. Instead it would assess the city a $1.1 million annual cost. The loss of the China market and low oil prices together have tanked the value of plastic.

The department is working to amend the contract to adjust for the effects of China’s National Sword Policy. 

Back in New Jersey, Bagaria’s company had been baling recyclables for shipment to China, where the material was sorted by hand. It now is investing in machinery to do the recycling in the U.S. Two facilities in New Jersey are up and running; the others are to be outfitted by the end of August. They will be able to clean the recyclables, grind them up and convert them into small pellets that can serve as raw material for new products.

“There is a lot to be still done, but the China ban was almost like a catalyst in that direction,” he said. “It helped the industry. Now we don’t have a choice.”

As disruptive as the ban is, experts hope the upheaval will spur even more innovation. Marilyn Chertow, an associate professor at the Yale School of Forestry & Environmental Studies and director of the program on solid waste policy, noted that in 2008 China passed a law promoting a circular economy. The idea is you make a product with material you know can be recycled rather than make a product and then figure out how to recycle it.

China’s move to ban recyclables now is an enormous opportunity for the U.S. to see value in its own scrap, Chertow said. That said, change will not be easy, nor will it be quick, she and others said. Many municipalities invested heavily in single stream recycling, in which everything is put into one recycling box and separated later, a decision that may have contributed to poorly separated items.

“When single-stream became popular some years ago, I was dismayed, even aghast,” Richard Holden Bole, the owner of Recycle Midwest in Cleveland, wrote in Recycling Today last year. “Treating recyclables the same way you treat the trash – in a trash truck – seemed terrible to me. I knew it would result in contamination and sorting difficulty of all the materials. Sure enough, for years many of the materials coming out of single-stream plants have been poorly sorted.”

Bole says the best solution going forward would be to return to separating recyclables before they are picked up, as some communities still do: a pile of flattened cardboard preferably tied with string, mingled bottles and cans and finally mixed paper.

“It’s a true crisis,” he said. “It was poorly thought out to begin with.”

The industry is facing a massive retooling, that in the end will be for the better, said National Recycling Coalition executive director Marjorie Griek. Recycling will survive the setback, though individuals have few choices at the moment, she said.

“It’s too entrenched in society and too many people understand the importance of recycling both for the environment and for the economy,” she said.

Eric Goldstein, a senior attorney at the Natural Resources Defense Council and its environmental director for New York City, said that recyclables are likely to be stockpiled in the short term until new markets are found. The key is to focus on the long term. Recyclables are like all commodities — whether corn or oil or bitcoin — and their markets fluctuate. New uses are being found for typically hard to recycle items, recycled glass in concrete, for example. Manufacturers must be brought into the loop so that the producers of products or packaging share the responsibility of recycling them, he said.

Studies show that recycling and composting trash produce more jobs per ton handled than does bringing it to landfills or incinerators. A study by the Institute for Local Self-Reliance found that the removal of 10,000 tons of solid waster creates six jobs versus as many as 36 if that waste were recycled instead.

“It’s very unlikely that America’s cities and towns are going to abandon recycling, which makes so much sense both from an environmental standpoint and a climate change standpoint and a jobs production standpoint,” Goldstein said.

Orlove, of Columbia University’s Earth Institute, notes that recycling is not an end to itself but a way to address an excess use of resources and to curb climate change.

With a recycling rate of only about 34 percent, the U.S. has not progressed fast enough, he said. 

New practices and technologies are emerging. Ikea will start using biodegradable mushroom-based packaging that can decompose in a couple of weeks and which Dell is already cushioning its computers with. Clothing designer Eileen Fisher and Fabscrap, a non-profit in New York City, are reusing fabric, Terracycle's Zero Waste Box provides 120 different boxes to segregate waste better, and Enerkem uses municipal waste to manufacture biofuel. Apple has a robot that dismantles cell phones, while DSM-Niaga, a technology and chemical company based in the Netherlands, recycles carpets.

At the Burbank Recycling Center in Burbank, California, the coordinator, Kreigh Hampel, said the U.S. had lost control of its consumption. Looking forward, the situation is very unstable, he said.

“It’s a big ask to change things very quickly in the United States about our consumption habits,” he said. “It’s a big ask to find other countries and other mills and processors to take the amount of waste that we generate in the U.S. every year and try to get it into re-use programs or recycling programs. So I wish I had a crystal ball to predict the future. And I just don’t.”

Jeremy Berg contributed to this article.

This story uses functionality that may not work in our app. Click here to open the story in your web browser.]]>
<![CDATA[Musk Says He's Talking With Saudi Fund to Take Tesla Private]]> Mon, 13 Aug 2018 08:23:29 -0700 https://media.nbcsandiego.com/images/213*120/elon-muskGettyImages-855377504.jpg

Saudi Arabia's sovereign wealth fund would be the main source of money for Tesla CEO Elon Musk's grand plan to take the company private, but the deal isn't done yet, Musk disclosed in a blog on Monday.

The fund approached Musk about going private multiple times during the past two years, and Musk says he left a July 31 meeting with no question that the deal would be closed. That's why he tweeted on Aug. 7 that the funding had been secured, Musk wrote. The fund itself has not publicly commented on the possibility of a deal.

Under the proposal, only investors who don't want to remain with a private company would be paid and funding for the deal would come from Tesla stock, not debt. Musk wrote that he expects about one-third of shareholders to take an offer of $420 per share, making the buyouts worth roughly $23.6 billion.

Musk's blog was posted before the markets opened Monday, and there was little reaction from investors. Shares were up 2 cents to $355.51 in morning trading.

Musk wrote that at the July 31 meeting, the fund's managing director "strongly expressed his support'' for taking the electric car and solar panel maker private. "I understood from him that no other decision makers were needed and that they were eager to proceed,'' Musk wrote in the blog.

But the deal appeared to be far from finished. Since the meeting, the men have continued discussions and the managing director has expressed support "subject to financial and other due diligence and their internal review process for obtaining approvals,'' Musk wrote.

The wealth fund recently bought nearly 5 percent of Tesla's shares.

Musk wrote that he made the Aug. 7 announcement because he had talked to large investors about his desire to take the company private. "It wouldn't be right to share information about going private with just our largest investors without sharing the same information with all investors at the same time,'' he wrote.

He wrote that in the blog and the Aug. 7 tweet that he was speaking for himself as a potential bidder for the company.

Musk also wrote that the Saudis are interested in the company because they want to diversify away from oil.

He also is in talks with other investors because he wants Tesla to continue to have a "broad investor base,'' he wrote.

Photo Credit: AFP/Getty Images]]>
<![CDATA[McDonald’s Offering McGold Card, Free Food for Life ]]> Fri, 10 Aug 2018 05:06:45 -0700 https://media.nbcsandiego.com/images/213*120/GettyImages-953183602+edited.jpg

International fast food giant McDonald’s announced it was giving away the “mythical” McGold Card to one lucky person — granting them free McDonald’s for life.

The chain officially confirmed Thursday the ever-so elusive McGold Card “exists and only a handful of people have ever gotten their hands one.”

However, burger fans now have the chance to get their hands on one — the first time McDonald’s has ever given away a McGold Card in a sweepstakes.

For a chance to win free McDonald’s for life, customers in the United States need to download the McDonald’s app and place an order via Mobile Order & Pay from Aug. 10 through Aug. 24. According to the fast food chain, only one entry per day per customer is permitted.

“The winner of the McGold card will also be awarded with a customized 24-carat golden phone case to mark their membership into the history and mystery of McGold Card lore,” according to McDonald’s.

The fast food chain is giving away the McGold Card to celebrate the launch of Mobile Order & Pay within the McDonald's App.

At a ceremony introducing The Gateway Arch in 1965, McDonald’s gave out the first McGold Card to the mayor of St. Louis, Missouri. From that moment, a small select number of McGold Cards have been given out to notable figures — from the governor of Michigan to the king of Sweden.

For more information on the sweepstakes and how to enter, click here or download the McDonald’s App.

Photo Credit: Getty Images]]>
<![CDATA[MoviePass CEO Acknowledges Initial Business Model Was a Flop]]> Thu, 09 Aug 2018 12:36:47 -0700 https://media.nbcsandiego.com/images/213*120/080918moviepass.jpg

Even the head of MoviePass is a critic.

MoviePass CEO Mitch Lowe is acknowledging in the face of criticism over the number of movies customers can see as part of a new subscription plan that his company missed the mark in creating a sustainable business model. But he now insists that they’re on the right track to securing a degree of financial security.

When Lowe invested in MoviePass in 2016, he wanted to know why some people went to see a movie in theaters so infrequently. At the time, the service charged between $35 and $40 monthly to see one movie per day. Lowe deemed it a “high-end service” that catered to frequent moviegoers, what the Motion Picture Association of America calls those who view one or more movies per month.

Lowe, who would become CEO that same year, spent about 18 months researching industry trends and concluded that millennials would go to the theater for a major blockbuster but otherwise waited for movies to be available on streaming services. They didn’t like the risk of paying for a movie they might not like and having to leave the house to do so, Lowe said.

So, the company launched a $9.95 monthly subscription plan that enabled users to see one movie per day. However, frequent moviegoers used the service so often that the company quickly lost money, Lowe said.

Now, under a new plan, MoviePass subscribers can see three movies per month for the same monthly fee, preventing frequent users from draining the company’s cash flow. Customers wanting to see more than three movies a month will receive discounts on additional tickets while millennials might not view selecting a movie to see as a risk, Lowe said.

Two business experts said MoviePass’s initial business model wasn’t sustainable. Lowe said the same.

“We were trying to do both -- please the frequent moviegoer and occasional moviegoer -- and we’re not able to do both,” Lowe, also a Netflix founding executive, said. “Now we’re focusing on what we can do better than anyone else: keep a low price, attract the occasional moviegoer and stay a sustainable business.”

MoviePass only receives discounts on 10 percent of tickets it purchases, Lowe said. As a result, the company often finds itself paying full ticket prices.

Movie tickets averaged more than $9 in the first four months of 2018, according to the National Association of Theater Owners. However, in major cities like New York and Los Angeles, movie ticket prices can surpass $15, forcing MoviePass to take a loss on the first movie a subscriber sees.

Now, in an attempt to become profitable, MoviePass is anticipating users won’t see all three possible films each month. Under the old plan, 15 percent of users saw four or more movies per month, draining the company’s resources.

“I would suggest the company was something of a disaster from the beginning,” said Daniel McCarthy, a subscription model expert and marketing professor at Emory. “The more customers they acquire, the more value they destroy.”

Financial problems have plagued MoviePass this summer. Its parent company, Helios and Matheson, received a loan worth more than $6 million after MoviePass temporarily ran out of cash. Lowe said the loan was the result of investors wanting the company to limit its losses at a quicker rate, causing movie vendors to be concerned about payments.

Nonetheless, frustrated customers complained about the outage on social media, claiming it prevented them from checking-in.

Then, the company announced its plans to increase its monthly fee to $14.95 and prevent subscribers from using the service to see major releases the first two weeks they’re in theaters. However, MoviePass, which has more than 3 million subscribers, walked-back the proposed price hike.

Instead, the company aims to increase its revenue by selling ad space, creating brand partnerships with services like Uber and Lyft, hotels and restaurants and partnering with studios to promote specific movies.

Under the new plan, scheduled to go into effect Aug. 15, customers with a desire to see more than three movies each month will receive a discount between $2 and $5, Lowe said. Still, MoviePass is counting on the majority of subscribers not seeing three movies each month.

“The rationale was ‘we can build up a consumer base quickly,’” said Paul Hardart, a clinical professor of marketing at NYU. “Get a large subscriber base and then figure out. The outcome you want is it’s an avid part of a consumer’s life and it’s a subscription they’re willing to pay for.”

Theaters themselves, most recently AMC, have created comparable subscription programs. But with his new plan set to debut next week, Lowe isn’t concerned and said the latest model should make MoviePass a more sustainable business.

“We changed the business model to a new plan which satisfies the need of 85 percent of our customers and significantly reduces the bulk by not having to deliver movies to the 15 percent,” Lowe said, “instead of having an unsustainable service serving 100 percent of customers.”

Photo Credit: Darron Cummings/AP]]>
<![CDATA[Automakers in Limbo Over Trump's Mileage Rollback Plan]]> Mon, 06 Aug 2018 13:42:47 -0700 https://media.nbcsandiego.com/images/213*120/goldengateGettyImages-543435346.jpg

California will no longer have the authority to set tougher fuel economy standards if the White House plan succeeds.

19 states have already announced plans to challenge the administration in court — leaving automakers like Ford, Toyota, and Volkswagen unsure whether or not to proceed with billions of dollars in investments in the technology needed to improve fuel efficiency, NBC News reported. 

Two years ago the auto industry pushed back when the target Corporate Average Fuel Economy, or CAFE standards for 2025 were set at 54.5 mpg. 

But the plan the White House has come up with has only complicated things. The proposed CAFE revisions would take away California’s ability to set its own standards — which 10 other states, as well as the District of Columbia, have adopted.

Photo Credit: Justin Sullivan/Getty Images]]>
<![CDATA[New MoviePass Plan Will Limit Customers to 3 Movies a Month]]> Mon, 06 Aug 2018 09:08:40 -0700 https://media.nbcsandiego.com/images/213*120/080618moviepass.jpg

MoviePass is again changing the terms of its movie subscription service, announcing Monday that customers will be limited to three movies per month for one fee.

Under the service’s new plan, moviegoers can see up to three movies each month for a $9.95 monthly fee, the company said in a news release. It is a significant change from its initial offer that allowed users to view one movie per day for the same price.

Customers will also receive up to a $5.00 discount on any additional movie tickets.

“We believe this new plan is a way for us to move forward with stability and continue to revitalize an entrenched industry and return moviegoing to everyone’s financial reach,” MoviePass CEO Mitch Lowe said in a statement.

The Wall Street Journal was the first to report the new subscription plan, which goes into effect Aug. 15.

MoviePass changed its service plan after company data revealed few customers used the app to see a movie every day. Fifteen percent of MoviePass subscribers used the service to see four or more movies each month, the company said in the release.

The new plan will include “many major studio first-run films,” the company said. When MoviePass announced its intention to increase the monthly fee to $14.95 last week, the service said users wouldn’t be able to watch major blockbuster films until the third week they were in theaters.

Customers were critical of the price increase, prompting the company to walk-back that decision when it introduced its new subscription plan Monday, stating that “we have heard -- and we have listened to -- our MoviePass community.”

The changes to the service also address ticket scalping and unauthorized card usage, both of which created additional expenses for MoviePass.

“We believe this new business model will immediately reduce our burn so we can refocus our efforts where they belong: making a permanent and positive change in this industry by creating an amazing theater-going experience and building a company that continues to benefit our nationwide community, said Ted Farnsworth, Chairman and CEO of Helios and Matheson, MoviePass’s parent company.

The decision to limit the number of movies users can see comes more than a week after MoviePass temporarily ran out of cash. At that time, customers reported on social media that they were unable to check-in.

As a result, its parent company received a loan worth over $6 million following a “service interruption” that prevented MoviePass from making required payments.

In the past few months, MoviePass has also prevented users from seeing the same movie multiple times.

In June, AMC introduced its own monthly movie program after criticizing MoviePass’s business model. AMC said last week its new program features more than 175,000 subscribers, exceeding the company’s own projections.

Photo Credit: Darron Cummings/AP]]>
<![CDATA[Price of Pampers Rising Due to P&G's Shrinking Profits]]> Thu, 02 Aug 2018 12:53:16 -0700 https://media.nbcsandiego.com/images/213*120/PampersPriceRising.jpg

The cost of Pampers diapers, Bounty paper towels, Charmin toilet paper and Puffs tissues are going up as parent company Procter & Gamble's profit margins get squeezed between rising competition and increased costs, CNBC reported

U.S. families can thank higher commodity prices, shipping expenses and foreign exchange rates for the price hikes. The cost of Pampers is going up by an average of 4 percent, the company said when it reported quarterly earnings Tuesday, raising the price of a 128-count pack of swaddlers for newborns from $34.99 at Target to about $36.39.

Bounty, Charmin and Puffs will be an average of 5 percent more expensive, the company said. It's raising prices to help offset disappointing earnings results and a 15 percent slide in profits — to $1.89 billion during the three months ended June 30 from $2.22 billion during the same quarter last year.

Photo Credit: Jean-Marc Giboux/AP Images for Pampers at Walmart, File]]>
<![CDATA[Boston Man Accused of Stealing $2M in Cryptocurrency]]> Wed, 01 Aug 2018 16:47:21 -0700 https://media.nbcsandiego.com/images/213*120/GettyImages-1008963700.jpg

A college student from Boston was arrested last month after allegedly stealing at least $2 million in cryptocurrency and hacking phones owned by tech executives, according to prosecutors in California.

Joel Ortiz, 20, of Allston was ordered held on $1 million bail following his arraignment on 28 counts of grand theft, computer hacking and identity theft in the wake of his July 12 arrest.

He allegedly had $250,000 in cryptocurrency when he was arrested at Los Angeles International Airport on his way to Europe.

Prosecutors in California said Ortiz took control of his victims' cell phones using their SIM card, changed their passwords and then hacked into email, social media and cryptocurrency accounts, stealing millions in the digital currency.

Court documents show that Ortiz managed to take over the cell phones by impersonating victims for cell phone carriers such as AT&T, talking them into granting him access to his victims' phone numbers. In one case, Ortiz allegedly even walked into an AT&T reseller in Georgia to do a SIM swap.

One victim told investigators he was attending the Consensus NY cryptocurrency conference in New York City in May when he lost cell phone service and immediately knew he was being hacked because he had heard of this happening to others in cryptocurrency circles, according to court documents. Despite the victim immediately making efforts to get his cell phone back at an AT&T store across the street from the conference, investigators say Ortiz stole $1.7 million in cryptocurrency from him.

Ortiz, an information technology major at UMass Boston and a Boston high school valedictorian, also spent thousands on parties in rented mansions and on designer clothes, according to The Boston Globe.

He's due back in court on Aug. 9. The Santa Clara County public defender's office in California, which is representing Ortiz, declined to comment to the Associated Press Wednesday.

His family in Hyde Park and a woman at his apartment in Allston also declined to comment on the case.

Prosecutors say Ortiz also withdrew cryptocurrencies, holding them in a so-called "cold storage," which holds cryptocurrencies in a way not connected to the internet; the location of the withdrawn cryptocurrencies is unknown to authorities.

Photo Credit: Jessica Rinaldi/The Boston Globe via Getty Images, File]]>