American auto giants rewrite their strategies for a future that wants a new kind of car
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The song is about the legacy of Rebekah Harkness, whose second husband was the heir to the Standard Oil fortune. Dating back to the late 19th century, Standard Oil was a monopoly run by John D. Rockefeller that controlled nearly all oil production and refining in the US.The government later forced the empire to split apart through an antitrust suit. But its pieces live on today as the largest oil companies in the US - including
On that note ...
Exxon plans to write down up to $20 billion in assets, admitting their value has cavedThe oil company said on Monday that it would write down the value of its natural-gas assets by $17 billion to $20 billion. That's the company's largest impairment, ever. Writedowns, explained: When a company writes down its assets, it formally recognizes that those properties are worth less.
- It's typical to see writedowns among energy companies when oil and gas prices drop, as they did in the coronavirus pandemic. (If the product you're selling loses value, so does the machine that makes it.)
- Both BP and Shell wrote down assets earlier this year.
What it means for Exxon: It's not just another pandemic bruise.
- "The write-down lays bare the size of the miscalculation that the company made in 2010 when it paid $30 billion for US shale producer XTO Energy as natural gas prices went into a decade-long decline," Reuters reported.
- These are among several cost-cutting measures Exxon is deploying, largely to save its dividend, which is among the largest in the S&P 500 and treasured by investors.
- As we previously reported, the company is trimming its global workforce by 15%. Here are all the cuts we've logged so far.
It's not all bad news for the oil industry, as crude prices soar
The price of oil hit a nine-month high this week. On Friday morning, a barrel of Brent, the international benchmark, was trading at over $49 - up almost a quarter from last month!
There are two forces behind the surge:
- Demand: Hopeful vaccine news, which means people could soon consume more oil and gas.
- Supply: A compromise among top-producing nations, known as OPEC Plus, to increase oil production by only a modest amount in January. As Goldman Sachs put it in a note this morning, OPEC avoided a "taper tantrum."
- Companies that once supported weaker fuel-economy standards are now reversing course.
- For the first time, automakers are also getting into the business of refueling infrastructure, which used to be controlled by oil companies.
- You can read the whole story here.
In other news: Tesla's CEO Elon Musk said he would be open to discussing a potential merger with a rival automaker. BI's Mark Matousek lays out the four most likely candidates.
- Also, check out this feature by Kristen Lee, which shows which countries are phasing out gas-powered cars. "We appear to be on the brink of a massive global overhaul of how we think about cars and their impact on the environment," she writes.
- One other bit: QuantumScape, the secretive battery startup backed by Volkswagen, started trading on the NYSE.
Popular energy company Powerhome Solar faces more complaints - this time, about installations and customer serviceAfter we published our investigation into Powerhome Solar, which centered around misleading sales practices, more than 20 people reached out with additional complaints. Many of them were unhappy customers.
- Some said the company's installers behaved unprofessionally, swimming in their pool, drinking on site, and leaving the yard a mess.
- One claimed that a shoddy installation job was likely linked to a fire that burned down his home.
ICYMI: Two of our best industry explainers
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- Plastic empire: Inside Big Oil's massive bet on chemicals that could help save the industry in a future with fewer gas-powered cars
- OPPO A74 smartphone with 5G support and 90Hz display to launch in India soon, to be priced under ₹20,000
- VCs say 10 unicorns in 4 months may seem too small by the end of this year
- Timelapse in Google Earth shows you the slow and scary demise of our only home in 3D
- Bhima Jewellery’s ‘Pure as love’ campaign is trending, and for all the right reasons
- Samsung Galaxy M42 5G to launch in India on April 28 – Specs, expected price and everything we know so far