Business News Roundup, July 7

President Trump, shown walking with President Xi Jinping of China in April in Florida, has vowed to reduce America’s trade deficits. President Trump, shown walking with President Xi Jinping of China in April in Florida, has vowed to reduce America’s trade deficits. Photo: DOUG MILLS, NYT Photo: DOUG MILLS, NYT Image 1 of / 1 Caption Close Business News Roundup, July 7 1 / 1 Back to Gallery

LeEco tycoon

steps down

The embattled Internet tycoon behind struggling Chinese tech company LeEco has resigned from all his positions at the company’s publicly traded arm, the latest action in a stunning fall for one of the country’s most flamboyant tech leaders.

Jia Yueting has stepped down as chairman of Leshi Internet and has also given up several other positions at the company, the company said in a filing. Jia will become global chairman of LeEco’s electric car business, a separate announcement said.

Jia’s departure from Leshi Internet ended his tenure at the helm of one of China’s most ambitious tech companies. Last week, a court in Shanghai froze $182 million of assets tied to Jia, and Tuesday, shares connected to Jia totaling 40 percent of Leshi Internet’s outstanding stock were frozen by courts, according to a company filing.

Jia led his company into an array of businesses that have not panned out. He invested hundreds of millions of dollars in developing LeEco’s smartphone business Le Mobile, in what the new LeEco chief executive, Liang Jun, last week conceded was mistimed: Fierce competition has eroded profit for most handset makers.

Jia’s guarantees bind together much of LeEco’s debt, setting up a potentially messy situation that could embroil all of the LeEco companies as creditors battle for assets. No LeEco company has filed for bankruptcy, a company spokesman said, and LeEco could still receive a bailout from investors or a state-owned company.

LeEco’s electric car ambitions are centered on Los Angeles, where the financially troubled startup Faraday Future, with more than 1,400 employees, is developing high-end electric cars in a bid to challenge Tesla Motors.

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Faraday had been negotiating with Vallejo officials to build a factory on Mare Island, but backed out. LeEco bought property in Santa Clara from Yahoo and had planned to build a campus there, but its plans appear to have fizzled out.

Jia remains Faraday Future’s largest shareholder and emphasized in his letter Thursday that he would dedicate his energy to getting the company’s first production-ready model, called the FF 91, into mass production.

Faraday Future is in the process of raising more than $1 billion, a spokesman for the company said in an email, noting that LeEco and Faraday Future are separate companies.

Energy

Renewables

top nuclear

For the first time in decades, the U.S. got more electricity from renewable sources than nuclear power in March and April.

The U.S. Energy Information Administration said Thursday that electricity production from utility-scale renewable sources exceeded nuclear generation in the most recent months for which data is available. That’s the first time renewable sources have outpaced nuclear since 1984.

The growth in renewables was fueled by scores of new wind turbines and solar farms, as well as recent increases in hydroelectric power as a result of heavy snow and rain in Western states last winter. More than 60 percent of all utility-scale electricity generating capacity that came online last year was from wind and solar.

Streaming

SoundCloud

cutting staff

SoundCloud is cutting about 40 percent of its staff in a move the digital music service says will give it a better financial footing to compete with Spotify and Apple.

The Berlin company, which in January said it was at risk of running out of money, informed staff on Thursday that 173 jobs would be eliminated. It had 420 employees. Offices in San Francisco and London will be shut.

Economy

Trade deficit

shrinks in May

The U.S. trade deficit narrowed in May, and the politically sensitive trade gap with China also slid.

The Commerce Department said Thursday that the deficit in the trade of goods and services fell 2.2 percent in May to a seasonally adjusted $46.5 billion. Exports rose modestly to $192 billion — the highest level since April 2015 — on rising shipments of cars and consumer goods, including cell phones. Imports fell slightly.

President Trump has vowed to reduce America’s trade deficits, blaming them on bad trade deals and abusive practices by trading partners, particularly China. His administration also is preparing to renegotiate the North American Free Trade Agreement with Canada and Mexico to overhaul a trade pact he’s called a “disaster” for American workers.

Chronicle News Services