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Trump’s 25% tariff could be an existential threat to Canada’s recovering auto industry

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There’s growing concern that a 25% potential tariff on Canadian imports to the U.S. could be an existential threat to the country’s recovering automotive industry.
President-elect Donald Trump has said he will impose an additional 10% tariff on goods from China and a 25% levy for Canada and Mexico.
Ontario Premier Doug Ford told CNBC any tariffs would be harmful to both sides of the border.

Canadian and American flags fly near the base of the Ambassador Bridge connecting Canada to the U.S. in Windsor, Ontario, Canada, on Wednesday, May 26, 2021.
Cole Burston | Bloomberg | Getty Images

DETROIT — There’s growing concern that President-elect Donald Trump’s plan to impose 25% tariffs on Canadian imports would be an existential threat to the country’s recovering automotive industry.
Potential tariffs on vehicles and automotive parts are particularly alarming for the province of Ontario, the epicenter of Canada’s auto industry. Five automakers — Ford Motor, General Motors, Stellantis, Toyota Motor and Honda Motor — produced 1.54 million light-duty vehicles last year in the province, largely for U.S. consumers.

“It’d be terrible. It’d not only devastate Canadian jobs, it’d devastate American jobs,” Ontario Premier Doug Ford told CNBC during a phone interview.
A tariff is a tax on imports, or foreign goods, brought into the U.S. They are paid for by companies, which some fear would simply pass any additional costs on to consumers.
Ford, who said he has not spoken with Trump directly, argued that any tariffs would be harmful to both sides of the border.
He said raw materials and parts routinely pass across the border multiple times before being used in the final assembly of a vehicle. Tariffs, he warned, would increase prices, which could then slow production and eliminate jobs.
“We have a trade agreement right now. Things have been working,” Ford said. “I’ve said it publicly: I’d love to do a bilateral trade deal with the U.S. And Mexico wants a trade deal, we’ll do a bilateral trade deal with Mexico. But Mexico, if they want a seat at the table, they have to follow the rules.”

Ontario premier Doug Ford answers questions from reporters as he hosts the Fall meeting of Canada’s premiers in Mississauga, Ontario, Canada December 16, 2024.
Carlos Osorio | Reuters

Trump has said he will impose an additional 10% tariff on goods from China and a 25% levy for Canada and Mexico, though he has offered few details, such as if there would be exceptions. He has he said plans to invoke “national security” concerns to enact such hikes, rather than seeking congressional approval, saying illegal immigration and the illicit drug trade are causing concerns on the border, justifying the tariffs.
Putting tariffs on components could add $600 to $2,500 per vehicle on parts from Mexico, Canada and China, according to estimates in a Wells Fargo analyst note. Prices on vehicles assembled in Mexico and Canada — which account for about 23% of vehicles sold in the U.S. — could rise $1,750 to $10,000.
Such tariffs and increased costs would add to problems for embattled Canadian Prime Minister Justin Trudeau, as he fends off calls for his resignation.

Ontario: Canada’s auto capitol

Ontario recently launched a multimillion-dollar ad campaign in the U.S. to promote its role as a key trading partner and “ally to the North.”
Ontario, as a province, is the third-largest trading partner for the U.S., including the top foreign trade partner for 17 states, according to Ford, the premier. He points out that trade between Ontario — as well as broader Canada with the U.S. — is much more evenly split than it is with Mexico, especially when removing the oil Canada sends to the U.S.

Canada’s Prime Minister Justin Trudeau addresses the Liberal party caucus meeting in Ottawa, Ontario, Canada December 16, 2024. 
Blair Gable | Reuters

Canadian exports of auto parts came in at $23.5 billion in 2023, while exports of light vehicles totaled $53.5 billion. Imports totaled $47.5 billion and $70.4 billion, respectively, according to Canada-based DesRosiers Automotive Consultants. Of those, the U.S. accounts for 95.3% of Canada’s total auto exports and 57.7% of its overall auto imports.
“Anything that kind of disrupts that balance is going to affect both sides of the border,” said Flavio Volpe, head of the Canadian Automotive Parts Manufacturers’ Association. “The best tariff level for Canadian and American auto parts suppliers is zero.”
Volpe argues a double-digit tariff would be “existential,” with ripple effects into the U.S. automotive industry. As an example, he pointed to 2022, when Canadian truck drivers blocked the Ambassador Bridge between Detroit and Windsor, Ontario, in Canada — the busiest border bridge between the countries — disrupting manufacturing for several automakers in the U.S.
Toyota is the top-producing automaker in Canada, at roughly 526,000 units in 2023, followed by Honda at nearly 378,500 vehicles. GM, once the largest producer in Canada at more than 1 million vehicles, is now one of the smallest manufacturers of light-duty vehicles in the region.

Industry on the mend

The Canadian automotive industry is on an upswing following a decades-long decline that escalated during the coronavirus pandemic.
Light-duty vehicle production in Canada hit 1.54 million vehicles last year, up from a recent low of 1.1 million in 2021, but still a 47% decline from the country’s peak of 2.9 million in 2000, according to industry data provided by the Global Automakers of Canada trade association.
“The industry, like the American industry, has been challenged recovering from the pandemic. We’re still not there from a sales and production point of view, but we have been recovering,” said David Adams, president of the Global Automakers of Canada, which represents the interest of 16 non-U.S. based automakers.
The uptick comes despite two large assembly plants in Ontario, owned by Ford and Stellantis, existing in limbo, as the factories don’t currently have vehicles to produce. Thousands of workers have been laid off as a result of the lack of production.
Much of the uncertainty was caused by the automotive industry’s transition to all-electric vehicles, as adoption of EVs has not occurred as quickly as expected. Trump also has vowed to remove subsidies for purchasing EVs, which have assisted in spurring sales while federal benefits still exist.
“There is profound concern about the Canadian automobile industry as much because it’s not clear what direction to go,” said Charlotte Yates, president of the Automotive Policy Research Centre and professor emeritus at McMaster University. “There’s a series of public policy changes as well as political attitudinal changes, and, of course, the threat of tariffs really rattling the industry in Canada.”
Ford, Ontario’s premier, said the U.S. and Canada should be working together, as they have been for decades.
“We should be focusing on China and Mexico, not on its closest ally in the entire world,” Ford said. “Let’s build a fortress, an American–Canadian fortress against the rest of the world. We can’t be stopped if we if we stick together.”

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    U.S. sues Walmart, Branch Messenger over payment accounts for delivery drivers

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    The Consumer Financial Protection Bureau on Monday sued Walmart and work-scheduling platform Branch Messenger for allegedly forcing delivery drivers to use poorly managed and costly deposit accounts in order to get paid.
    The lawsuit alleges that, since 2021, Walmart and Branch opened Branch accounts for drivers and then deposited drivers’ pay into these accounts without the drivers’ consent.
    The lawsuit is the latest in a slew of actions by the CFPB against companies for mishandling consumer and worker financial accounts.

    A Walmart truck pulls out of a Walmart Distribution Center in Hurricane, Utah, on May 30, 2024.
    George Frey | Afp | Getty Images

    The Consumer Financial Protection Bureau filed a complaint Monday against Walmart and work-scheduling platform Branch Messenger for allegedly forcing delivery drivers to use poorly managed and costly deposit accounts in order to get paid.
    “Walmart made false promises, illegally opened accounts, and took advantage of more than a million delivery drivers,” CFPB Director Rohit Chopra said in a press release. “Companies cannot force workers into getting paid through accounts that drain their earnings with junk fees.”

    The lawsuit alleges that, since 2021, Walmart and Branch opened Branch accounts for more than one million drivers part of the Spark Driver Program, Walmart’s platform for gig economy workers to accept and schedule “last mile” deliveries, and then deposited drivers’ pay into these accounts without their consent.
    The company allegedly told drivers that they would be fired if they did not want to use the Branch accounts and misled drivers about when they could access their earnings. When drivers did use the platform, they allegedly faced numerous delays or fees if they needed to transfer the money into a different account, which resulted in more than $10 million in “junk fees.”
    Walmart disputed the agency’s allegations.
    “The CFPB’s rushed lawsuit is riddled with factual errors and contains exaggerations and blatant misstatements of settled principles of law,” a Walmart spokesperson wrote in a statement to CNBC. “The CFPB never allowed Walmart a fair opportunity to present its case during their rushed investigation.”
    The CFPB also accused Branch of failing to investigate alleged errors, failing to provide certain disclosures, failing to maintain records, failing to follow through on stop payment requests and illegally requiring consumers to waive their rights under the law.

    “Branch strongly disagrees with the lawsuit filed today by the CFPB, which misstates the law and facts, and includes intentional omissions to mask the Bureau’s clear overreach,” a representative from Branch wrote in a statement to CNBC.
    The lawsuit is the latest in a slew of actions the CFPB has taken against companies for mishandling consumer and worker financial accounts. The bureau previously sued Comerica Bank over allegations that it failed to administer a federal benefits program and charged illegal fees on prepaid debit cards.
    Most recently, the CFPB filed a complaint against the operator of the Zelle payments network, as well as JPMorgan Chase, Bank of America and Wells Fargo, alleging that the firms failed to properly investigate fraud complaints or give victims reimbursement. The lawsuit claims customers have lost more than $870 million since the launch of Zelle in 2017.

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    Nordstrom to go private in $6.25 billion deal with founding family, Mexican retailer

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    Nordstrom will become a private company after it agreed to a buyout deal valued at $6.25 billion from Nordstrom’s founding family and Mexican retailer El Puerto de Liverpool.
    Common shareholders will receive $24.25 in cash for each share of Nordstrom common stock they hold, according to a press release.
    In September, the Nordstrom family offered $23 a share for the chain, which valued the company at roughly $3.76 billion.

    A sign marks the location of a Nordstrom store on March 20, 2024 in Chicago, Illinois. 
    Scott Olson | Getty Images

    Nordstrom on Monday announced it will become a private company after it agreed to a buyout deal valued at roughly $6.25 billion from Nordstrom’s founding family and Mexican department store El Puerto de Liverpool.
    The company’s board of directors unanimously approved of the transaction, which is expected to close in the first half of 2025.

    As part of the deal, the Nordstrom family will have majority ownership in the company, with 50.1%, and Liverpool will own 49.9%. Common shareholders will receive $24.25 in cash for each share of Nordstrom common stock they hold, according to a press release.
    “For over a century, Nordstrom has operated with a foundational principle of helping customers feel good and look their best,” Nordstrom CEO Erik Nordstrom said in a press release. “Today marks an exciting new chapter for the business. On behalf of my family, we look forward to working with our teams to ensure Nordstrom thrives long into the future.”
    It’s not the first time the retailer has tried to go private. A previous effort fizzled out in 2018. In September, the Nordstrom family offered $23 a share for the chain, which valued the company at roughly $3.76 billion.
    Nordstrom stock fell roughly 1% in early trading. Shares of the company have shot up since a Reuters report in March that the family wanted to take the company private. 
    Nordstrom beat Wall Street’s sales expectations in November for the fiscal third quarter, as revenue grew about 4% year over year. But the company gave only a slightly rosier full-year sales forecast as it said it expected a soft holiday season.

    Luxury clothing stores have been under pressure as retailers including Walmart, Best Buy and Target have reported that customers remain choosy when it comes to buying items that are wants, not needs, and have paid more attention to price.
    Nordstrom was founded as a shoe store in 1901 before transitioning into a department store that sells a wide variety of clothing and accessories across more than 350 Nordstrom, Nordstrom Local and Nordstrom Rack locations.
    El Puerto de Liverpool operates two other department store chains, Liverpool and Suburbia, and owns 29 shopping centers across Mexico.

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    Lego is reinventing its iconic brick sets and keeping the toy industry afloat

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    The toy industry is headed for its second consecutive annual sales decline, but it’s got one thing propping it up — Lego.
    The Danish company saw revenue jump 13% in the first six months of the year and continues to snap up market share.
    Lego has reshaped its business and diversified its customer base, helping it to elevate sales even in inflationary market conditions.

    A customer reaches for a box from the Lego Dots range at the Lego A/S store in London, U.K., on March 7, 2022.
    Bloomberg | Getty Images

    The toy industry is headed for its second consecutive annual sales decline, but it’s got one thing propping it up: colorful, interlocking plastic bricks.
    At a time when toy companies are struggling to match the massive gains of pandemic-era sales, Lego is growing rapidly. The Danish company saw revenue jump 13% in the first six months of the year and continues to snap up market share.

    “When you look at toy sales, Lego has just been driving all the growth in the industry this year,” said Eric Handler, managing director at Roth MKM.
    After coming to the brink of bankruptcy in the early 2000s, Lego has reshaped its business and diversified its customer base, helping it to elevate sales even in inflationary market conditions.
    Lego has posted positive annual revenue growth in each of the past six years.
    Its strategy has involved delving into the world of licensing, catering to adults as well as kids, tapping into the digital gaming world, partnering with studios and streamers to bring Lego content to consumers and building manufacturing sites close to distribution hubs to smooth the supply chain.
    Recent standouts among its tried-and-true portfolio are newly emphasized “passion points,” kits that appeal to a wide variety of consumers, from those obsessed with franchises such as Star Wars and Harry Potter to car enthusiasts and animal lovers.

    “Lego has consistently bucked the trend the past few years,” said James Zahn, editor in chief of The Toy Book. “When other companies go down, Lego tends to go up.”
    Zahn noted that Lego’s ability to be “ahead of the curve” has allowed it to be more nimble during times of inflation, as consumers tighten their purse strings, and to navigate upheaval in the theatrical entertainment industry and even looming tariff increases.
    “I think, perhaps, the overarching story here is that they really are, it seems, like they’re two to three steps ahead of everybody else,” Zahn said.

    License for fun

    From miniature models of Emerald City from “Wicked” to a version of Wednesday and Enid’s dorm room in the Jenna Ortega-led “Wednesday,” Lego has tapped into pop culture to bring fan-favorite stories to life in brick form.
    Licensing has long been an important strategy for toy companies. Pulling from existing and upcoming intellectual property from movies and television shows allows brands such as Lego to cater to an already robust and engaged consumer.

    A Lego set based on Netflix’s “Wednesday.”

    Lego’s first licensed partnership was in 1999 when it linked up with Lucasfilm to bring Star Wars sets to the public. Some of these kits were tied to the release of “Star Wars: Episode I – The Phantom Menace,” while others celebrated vehicles and characters from the original trilogy of films.
    “Lego embraced adults, long before we started saying ‘kidults,’ and they’ve managed to continue that in new ways,” said Zahn.
    Over the past two decades, Lego has worked with hundreds of other partners to translate the likes of Harry Potter, Lord of the Rings, Ghostbusters, Marvel, DC, Jurassic Park and Pixar into building blocks.
    More recently, the company has launched kits such as the Sanderson sisters’ house from “Hocus Pocus” and even a “Jaws” set featuring the iconic shark taking down Quint’s boat.
    “For the Lego brand, [we’ve seen] tremendous years of growth,” said Julia Goldin, chief product and marketing officer at Lego. “We made a very deliberate decision to unlock our potential with many new audiences, double down on the audiences that we already had and really ensure that we are very connected.”

    Finding new brick builders

    Lego isn’t stopping at franchise-based sets.
    The company has worked to design different types of sets that cater to new audiences, ones that might not have otherwise bought or built a Lego set, Zahn said. This includes cityscape sets featuring skylines from London to New York, brick versions of famous paintings such as Vincent van Gogh’s “Starry Night” and Leonardo da Vinci’s “Mona Lisa” as well as a line of botanicals.
    Goldin noted that Lego is “investing in bringing in new audiences to the portfolio” and creating more products for them.

    Icons Tiny Plants by Lego.
    James Manning – Pa Images | Pa Images | Getty Images

    That’s why Lego has partnered with Formula 1 to create a line of F1-inspired sets that range from Duplo kits for preschool children all the way to collectible sets for adults. The partnership will also span Lego’s digital platforms, and the toy company will have a presence at future F1 auto racing events.
    Goldin said previous car products, including a McLaren Lego set, performed well at retail, giving Lego confidence to delve deeper into the auto racing space.
    “We always start with the audience,” she explained. “We’re always looking at, what are kids into? And we saw that F1 was one of the No. 1 most growing passions among younger kids, and also growing globally and attracting a lot of new audiences, especially women and families.”
    Attracting new consumers has allowed Lego to drive revenue and helped to counterbalance softness in the theatrical realm.
    Much of the toy industry’s current sales woes can be attributed to the disrupted pipeline in Hollywood production. A global pandemic followed by labor strikes left Tinsel town with fewer new releases that could have served as the basis for breakout toys.
    The lack of kids movies, in particular, meant toy companies were not producing as many new action figures, roleplay items and other movie tie-ins.
    But in 2023, Lego offered 780 products, around 50% of which were new items, on par with recent years.

    Delving into digital

    At the same time, Lego has expanded beyond its retail shelf space.
    The company has launched several theatrical features of its own, partnered with streamers such as Disney+ to bring Marvel and Star Wars content to the small screen and even launched its own vertical within Epic Games’ popular Fortnite game.
    The expanding portfolio has kept Lego at the forefront of consumers’ minds, given them alternative ways to engage with the brand and driven incremental retail purchases.
    “We have to remember that kids, they grow up,” said Goldin. “So there’s a new generation coming all the time. I think the next five years we’ll see even more digitalization and interactivity coming into the different experiences that we can create.”
    Goldin said with Fortnite, the company aimed to go beyond sets and create an experience. Within the larger game of Fortnite, players can participate in a Lego-based world where they construct digital Lego buildings, battle against creatures, customize their online mini figure and socialize with other Lego fans.
    Lego CEO Niels Christiansen has repeatedly touted the importance of meeting kids where they are, noting during previous earnings reports that the company is competing for children’s time and attention. Being relevant to them and in spaces that they already occupy has translated back to sales of physical Lego kits.
    It is a similar strategy to the one Lego has employed in partnering with Disney+ for several Star Wars and Marvel animated shows and in its recent theatrical release of a feature-length animated documentary about Pharrell Williams called “Piece by Piece.”

    Lego Star Wars: The Skywalker Saga game allows players to relive the epic narrative of the Skywalker Saga told through the lens of hilarious Lego humor.
    Lego | Warner Bros. Games | Lucasfilm

    “We felt [‘Piece by Piece’] really was something that was super original,” said Jill Wilfert, head of global entertainment partners and content at Lego.
    “We want to attract a broader audience that’s going to be engaged with the brand,” Wilfert added. “So, this was something we thought would help us get there. And when we do entertainment for us, it’s really about doing those things that help us really convey the values of the brand in a super entertaining and relevant way, but it’s also something that families, people, friends, can experience together.”
    Wilfert said Lego has several theatrical projects in development that could arrive on the big screen in the coming years.
    In the meantime, the company plans to continue releasing episodes and shorts tied to existing shows that air on Netflix, Nickelodeon and YouTube.

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    13 anonymous media executives make predictions for the new year

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    Several media executives expect big transactions from Comcast and Warner Bros. Discovery.
    Other executives focused on Donald Trump’s regulatory administration loosening rules for TV broadcast affiliates to consolidate.
    Two executives predicted who will — and won’t — be considered to take over for Bob Iger as Disney CEO.

    Bob Iger, CEO of Disney (L), and Brian Roberts, CEO of Comcast (R).
    Getty Images

    Ho, ho, ho! It’s a holiday tradition: Anonymous media executives make their 2025 industry predictions.
    In honor of the 12 days of Christmas, we give you 12 predictions from some of the most powerful media and entertainment executives in the world, weighing in on the condition of anonymity so they can speak candidly about their visions of the year ahead. And then, because we have holiday cheer, we give you a bonus one. A baker’s dozen!

    Looking back at 2024’s predictions, they were not as good as previous years. But there were some hits, or partial hits.
    While Warner Bros. Discovery’s Max, Netflix and Disney didn’t all team up for the first significant streaming bundle, as one participant predicted last year, Max and Disney did join forces. TV broadcast station groups continued to pick off regional sports rights, as another executive anticipated. RedBird Capital didn’t quite acquire Paramount Global, but the private equity firm was part of the consortium with Skydance that announced a merger with the company in July.
    As for other 2024 predictions, Nelson Peltz and Jay Rasulo did not win their activist campaign to join the Disney board; Disney CEO Bob Iger did not renew his contract beyond 2026, buy Candle Media or name Dana Walden his successor; and NBA media rights did not go to Disney, Warner Bros. Discovery and Apple — they went to Disney, NBCUniversal and Amazon.
    Oh, and one more miss: While Comcast did announce a spinoff of most of its cable networks, it did not spin off NBCUniversal and merge it with Warner Bros. Discovery.
    That’s a nice segue to this year’s predictions:

    Executive 1: Comcast will acquire the studio and streaming assets of Warner Bros. Discovery and merge them with NBCUniversal
    Second time’s the charm! Warner Bros. Discovery is separating its linear assets from the rest of the company. Comcast is spinning out most of its cable networks. It has to mean something, right?
    Executive 2: Comcast will acquire Charter and spin off the rest of NBCUniversal
    That’s right, Comcast may have SpinCo 1 and SpinCo 2! This executive predicts Comcast will test the Donald Trump regulatory administration and try to combine the two largest U.S. cable companies, 10 years after dropping its bid to buy Time Warner Cable — which used to be the second-largest U.S. cable provider before it was acquired by Charter — after concluding the government would block the deal.
    Executive 3: Fox will acquire most of Warner Bros. Discovery’s assets
    After selling the majority of its entertainment assets to Disney in 2019, Fox will shock the media world by again gaining scale, acquiring HBO, the movie studio, the Turner networks and the streaming assets of Warner Bros. Discovery, according to this executive.
    For what it’s worth, another executive predicted Fox would sell, given the unknown future of the Murdoch family trust.
    Executive 4: Dana Walden will leave Disney at year-end when she doesn’t get the CEO job
    Disney has already said it plans to delay naming a new CEO until early 2026, so this prediction assumes the company will slightly move up the announcement. Walden, Disney’s co-chairman of Disney Entertainment, is the ultimate Hollywood insider who many view as the front-runner for the job. The board is taking its time vetting candidates after the handoff from Iger to Bob Chapek in 2020 did not go very well.

    Dana Walden, Ryan Murphy, Bob Iger, and FX Networks Chairman John Landgraf, from left, attend the premiere of Murphy’s limited series “Feud: Capote vs. The Swans,” on Jan. 23, 2024.
    Credit: Disney

    Executive 5: Jeff Bezos will be bullied into selling The Washington Post after President Trump makes it clear his space company, Blue Origin, will suffer for his paper’s coverage
    Bezos has said he is dedicated to The Post’s future, but the paper has been engulfed in drama this year. Perhaps 2025 is the year Bezos decides he has had enough extra headaches.
    Executive 6: Several TV station groups will sell out of financial hardship
    Companies such as EW Scripps, Tegna and Sinclair Broadcast have watched their shares slump in recent years as traditional pay-TV valuations have declined with cord cutting. Executives at those companies are hopeful a new Trump administration will clear the way for more consolidation. Several will sell out of desperation, either to avoid bankruptcy or to gain needed scale, guesses this executive.
    Executive 7: The Trump administration relaxes TV station ownership rules, leading to CBS, ABC, NBC and Fox buying up their own affiliate stations
    A similar thought as the last one, but this executive took the bolder step of saying the acquirers of the stations will be the broadcast networks themselves.

    The Paramount Global headquarters in New York on Aug. 27, 2024.
    Yuki Iwamura | Bloomberg | Getty Images

    Executive 8: Paramount Global will acquire Lionsgate after it spins off from Starz
    If Paramount Global gets the government’s approval to merge with Skydance Media next year, its new leadership will likely look to transform the business. One big move the company will make is to acquire Lionsgate studio after it spins off from Starz at the beginning of next year, said this executive.
    Executive 9: A big tech company will acquire video game maker Electronic Arts
    After flirting with both Comcast and Disney in past years, Electronic Arts will sell in 2025 to a big tech company such as Netflix, Alphabet, Apple or Amazon, said this executive. That would follow in the footsteps of Microsoft acquiring Activision in 2023.
    Executive 10: The M&A hype around the industry will be wildly overblown, and there will be far fewer deals than anyone thinks
    You’re all wrong! This executive said M&A predictions generally won’t come true because consolidation won’t provide any real fixes to an industry in transition.
    Executive 11: Paramount+, Peacock and Max get bundled together
    Executives at Paramount Global, NBCUniversal and Warner Bros. Discovery are all on record about needing to consider options for streaming consolidation. What if there was a bundle that featured all three services? This executive guesses the three services will be sold together, either through a hard bundle on one platform or sold together at a discount.
    Executive 12: The sports streaming service Venu will never launch, and Fox will license its sports content to ESPN’s streaming service
    Venu, a joint venture owned by Disney, Fox and Warner Bros. Discovery, was announced to great fanfare earlier this year. But an antitrust lawsuit filed by Fubo has stalled the service’s launch. Meanwhile, ESPN will debut its “flagship” streaming service by the fall of 2025. That will cause the companies to abandon Venu, predicts this executive.
    Executive 13: Kathy Kennedy will depart Lucasfilm
    Kennedy has been the president of Disney’s Lucasfilm since 2012 and is now in her 70s. It may be time for a new leader of the Star Wars franchise.
    May the force be with you. Let’s see what 2025 brings. Happy holidays!
    Disclosure: Comcast owns NBCUniversal, the parent company of CNBC. More

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    FDA approves Eli Lilly’s weight loss drug Zepbound for sleep apnea, expanding use in U.S.

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    The Food and Drug Administration approved Eli Lilly’s blockbuster weight loss drug Zepbound for treating patients with the most common sleep-related breathing disorder.
    The weekly injection is now the first drug treatment option cleared for patients with obesity and moderate-to-severe obstructive sleep apnea, which refers to breathing interrupted during sleep due to narrowed or blocked airways.
    The agency’s decision expands the use of Zepbound and could pave the way for Eli Lilly to gain broader insurance coverage for the treatment.

    An Eli Lilly & Co. Zepbound injection pen arranged in the Brooklyn borough of New York, US, on Thursday, March 28, 2024. 
    Shelby Knowles | Bloomberg | Getty Images

    The Food and Drug Administration on Friday approved Eli Lilly’s blockbuster weight loss drug Zepbound for treating patients with the most common sleep-related breathing disorder, expanding its use and possibly its insurance coverage in the U.S.
    The weekly injection is now the first drug treatment option cleared for patients with obesity and moderate-to-severe obstructive sleep apnea, or OSA, which refers to breathing interrupted during sleep due to narrowed or blocked airways. Zepbound should be used in combination with a reduced-calorie diet and increased physical activity, the FDA noted in a release.

    An estimated 80 million patients in the U.S. experience the disease, according to Eli Lilly. Roughly 20 million of those people have moderate-to-severe forms of the disease, but 85% of cases go undiagnosed, the company told CNBC earlier this year.
    “Too often, OSA is brushed off as ‘just snoring’ — but it’s far more than that,” said Julie Flygare, president and CEO of Project Sleep, a nonprofit advocating for sleep health and sleep disorders, in a release from Eli Lilly. “It’s important to understand OSA symptoms and know that treatments are available, including new options like Zepbound. We hope this will spark more meaningful conversations between patients and health care providers and ultimately lead to better health outcomes.” 
    Eli Lilly expects to launch the drug for OSA at the beginning of next year. It is the first approval beyond obesity treatment for Zepbound, which entered the market late last year and is also being tested for several other obesity-related conditions, such as fatty liver disease. Tirzepatide, the active ingredient in Zepbound, has been sold on the U.S. market for longer as the diabetes drug Mounjaro.
    The agency’s decision could pave the way for Eli Lilly to gain broader insurance coverage for Zepbound, which, like other weight loss drugs, is not covered by many insurance plans. That includes the federal Medicare program, which only covers obesity drugs if they are approved and prescribed for an added health benefit.
    The approval also backs up mounting evidence that there could be further health benefits tied to GLP-1s, a class of weight loss and diabetes treatments that have soared in popularity and slipped into shortages over the past year. Notably, Zepbound’s main rival, the weight loss drug Wegovy from Novo Nordisk, is not approved for OSA.

    Zepbound could be a valuable new treatment option for patients with OSA, which can lead to loud snoring and excessive daytime sleepiness, and can contribute to serious complications including stroke and heart failure. Patients with the condition have limited treatment options outside of wearing masks hooked up to cumbersome machines that provide positive airway pressure, or PAP, to allow for normal breathing.
    Eli Lilly in April released initial results from the two clinical trials, which showed that Zepbound was more effective than a placebo at reducing the severity of OSA in patients with obesity after a year.
    In June, Eli Lilly released additional data from the studies showing that Zepbound helpedresolve OSA in almost half of patients. The first study examined the weekly injection in adults with moderate-to-severe OSA and obesity who were not on PAP therapy. The second tested Zepbound in adults with the same conditions, but those participants were on and planned on continuing PAP therapy.
    The data showed that 43% of people in the first study and 51.5% of patients in the second trial who took the highest dose of Zepbound achieved “disease resolution,” according to the company. That compares with 14.9% and 13.6% of patients who took a placebo in the two trials, respectively.
    Researchers came to those conclusions by examining an apnea-hypopnea index, or AHI, which records the number of times per hour a person’s breathing shows a restricted or completely blocked airway. The index is used to evaluate the severity of obstructive sleep apnea and the effectiveness of treatments for the condition.
    Disease resolution for OSA is defined as a patient having fewer than five AHI events per hour, the company said. It is also defined as a person having five to 14 AHI events per hour and scoring a certain number on a standard survey designed to measure excessive daytime sleepiness, according to Eli Lilly. More

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    What a government shutdown could mean for air travel

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    Lawmakers in the House voted down a short-term spending bill on Thursday, raising the chances for a government shutdown.
    If no deal is reached, the shutdown could begin 12:01 a.m. ET on Saturday.
    Air traffic controllers and TSA agents are considered essential employees, though they could end up working without a paycheck.

    A lone traveler makes his way past a nearly deserted TSA security screening area at Orlando International Airport ahead of the arrival of Hurricane Milton, on October 9, 2024 in Orlando, Florida. 
    Paul Hennessy | Anadolu | Getty Images

    A government shutdown is looming just as the peak holiday travel season gets underway.
    Lawmakers have been at an impasse and on Thursday voted down a short-term bill, which was backed by President-elect Donald Trump, to continue to fund the U.S. government. A shutdown could begin as early as 12:01 a.m. ET on Saturday if no deal is reached.

    Hundreds of thousands of government employees would be furloughed if Congress fails to pass a spending bill.
    A government shutdown could cost the U.S. travel industry $1 billion per week, estimated the U.S. Travel Association, which represents major hotel groups and others.
    “It’s hard to see how anyone in Congress wins if they force TSA workers, air traffic controllers, and other essential employees to work without pay during one of the busiest travel periods of the year,” Geoff Freeman, the group’s president, said in a statement on Friday.

    What does this mean for air travel?

    Commercial airplanes are still scheduled to fly, even given the chance of a shutdown.
    Airlines are forecasting the busiest year-end holiday season on record. The Transportation Security Administration expects its officers to screen more than 40 million people during the holidays through Jan. 2. United Airlines alone said it will fly 9.9 million people between Dec. 19 and Jan. 6, up 12% over last year.

    The government deems the more than 14,000 air traffic controllers and close to 60,000 TSA agents essential, which means they would continue working, though they wouldn’t be paid during the shutdown.

    Read more CNBC airline news

    Prepare for longer lines?

    TSA officers “would continue working without pay in the event of a shutdown,” the agency’s administrator, David Pekoske, said Thursday on social media platform X.
    “While our personnel have prepared to handle high volumes of travelers and ensure the security of our transportation systems, an extended shutdown could mean longer wait times at airports,” the TSA said in a statement Friday.

    What happened last time?

    The last time the government shut down, it stretched for more than a month from late 2018 through early 2019.
    Callouts from a few air traffic controllers in the highly congested airspace along the U.S. East Coast snarled air traffic during that shutdown. Then-President Trump and lawmakers reached a deal shortly after that to end the shutdown, the longest funding lapse in U.S. history.
    Congestion has vexed airline leaders. Meanwhile, the Federal Aviation Administration is once again without a permanent administrator after FAA chief Mike Whitaker, who was appointed by President Joe Biden last year, said he will step down Jan. 20, when Trump takes office.
    Modernization of air traffic control and hiring more controllers should be the next FAA administrator’s priority, Delta Air Lines CEO Ed Bastian told CNBC earlier this week.

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    Party City to close all of its stores, report says

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    Party City on Friday announced it will close all of its stores and has initiated corporate layoffs effective immediately, according to a CNN report.
    CNN reported the company’s closure was due to ongoing financial challenges at the party supply retailer, which less than two years ago filed for bankruptcy protection over its inability to pay off $1.7 billion in debt.
    The New Jersey-based chain exited bankruptcy in September 2023 through a plan that included transitioning into a privately held company and canceling nearly $1 billion in debt.

    A sign in a Party City store in Miami, Florida, on Jan. 18, 2023.
    Joe Raedle | Getty Images

    Party City on Friday announced it will close all of its stores and has initiated corporate layoffs effective immediately, according to a CNN report.
    CEO Barry Litwin told corporate employees in a meeting viewed by CNN that Party City has to “commence a winddown process immediately,” and that Friday would be their last day of work for the company.

    “That is without question the most difficult message that I’ve ever had to deliver,” Litwin said at the meeting, according to the report.
    CNN reported the company’s closure was due to ongoing financial challenges at the party supply retailer, which less than two years ago filed for bankruptcy protection over its inability to pay off $1.7 billion in debt.
    The New Jersey-based chain exited bankruptcy in September 2023 through a plan that included transitioning into a privately held company and canceling nearly $1 billion in debt. A majority of its 800 U.S. stores were able to stay open as it emerged from bankruptcy.
    Litwin was named CEO in August and said at the time he saw “many opportunities to strengthen our financial performance and build a leading end-to-end celebration experience for consumers,” according to a press release. 
    Prior to his appointment, he was the CEO of Global Industrial Company, a distribution leader in industrial products.

    Competition in the party goods and costume space has grown in recent years, including Spirit Halloween’s continued rise within and outside of the spooky season. The holiday costume chain announced in October that it would open 10 new “Spirit Christmas” stores, with some of the stores being converted from existing Spirit Halloween locations.
    Online retailers have also added pressure to Party City’s operation, even as the company began to offer items on Amazon in 2018.
    Representatives for Party City did not immediately respond to CNBC’s request for comment on CNN’s report or potential story closures. Read the full CNN report here.

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    Starbucks baristas strike in three U.S. cities during pre-Christmas rush

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    Starbucks baristas are striking in Los Angeles, Chicago and Seattle.
    Starbucks Workers United is pushing for better pay for baristas as it negotiates with the company.
    The coffee giant said in a statement that the union prematurely ended its bargaining session this week.

    Starbucks Workers United members picket outside a Starbucks store in Chicago, Illinois, US, on Friday, Dec. 20, 2024. 
    Vincent Alban | Bloomberg | Getty Images

    Starbucks baristas in some locations are planning to strike through Christmas Eve, starting with cafes in Los Angeles, Chicago and Seattle on Friday.
    The strikes will escalate each day, covering new markets, as Starbucks Workers United pushes for better pay for baristas. Starbucks is “backtracking on our promised path forward,” the union said in a post on X announcing the strikes.

    The stoppage could mean longer waits for holiday drinks and popular Starbucks merchandise in the days leading up to Christmas, when many Americans will be off work and school or buying last-minute gifts.
    Relations between the company and the union have turned frosty again, after a thaw earlier this year. In late February, both sides agreed to work together on a “foundational framework” that would include a process to achieve collective bargaining agreements for individual stores. Since then, they’ve conducted more than nine bargaining sessions over 20 days, according to Starbucks.
    Earlier this week, Starbucks and the union met for the last scheduled bargaining session of the year. But ahead of the meeting, Starbucks Workers United baristas voted to authorize a strike if the coffee giant didn’t propose a comprehensive package that would address pay and other benefits.
    In the bargaining session, Starbucks proposed no immediate pay increase and only guaranteed annual pay hikes of 1.5% going forward, the union said.
    Starbucks said in a statement that Workers United prematurely ended the bargaining session this week.

    “We are ready to continue negotiations to reach agreements. We need the union to return to the table,” the company said. 
    The union asked for a 64% increase to hourly employees’ wages immediately and a 77% pay hike over the life of a three-year contract, according to Starbucks.
    “This is not sustainable,” the company said in a statement.

    Starbucks Workers United members picket outside a Starbucks store in Chicago, Illinois, US, on Friday, Dec. 20, 2024. 
    Vincent Alban | Bloomberg | Getty Images

    It’s been a tough year for Starbucks. Globally and in the U.S., its sales have declined as consumers look elsewhere for their caffeine buzz. In the wake of the sales slump, baristas will reportedly receive a smaller annual pay hike next year than they have in previous years.
    Starbucks Workers United represents more than 500 company-owned locations of Starbucks.
    Starbucks baristas aren’t the only workers striking during the last-minute holiday rush. Amazon workers across seven facilities went on strike on Thursday to put pressure on the e-commerce giant to come to the bargaining table.

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