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Warner Bros. Discovery CEO David Zaslav is standing behind CNN’s decision to air a town hall with former president and Republican frontrunner Donald Trump last week.
“We need to show both sides of every issue,” Zaslav said at an investor conference Thursday.
Veteran CNN journalist Christiane Amanpour said Wednesday she told CNN CEO Chris Licht she disagreed with his decision to have Trump speak in a town hall format with screaming fans.

David Zaslav
Bloomberg | Bloomberg | Getty Images

Warner Bros. Discovery CEO David Zaslav supported CNN CEO Chris Licht during an investor conference Thursday as tension at the network rises over the decision to air a live Donald Trump town hall packed with his supporters.
Zaslav said Licht “is working really hard” to improve CNN’s brand and image, citing a recent YouGov poll that said trust in CNN has improved by 11 percentage points in the past year. For context, trust in Republican-leaning Fox News improved 17 points and trust in Democratic-leaning MSNBC improved 16 points in the same period. Trust in CBS, ABC and NBC all improved by more than CNN, as well.

Zaslav emphasized CNN’s desire for more balance on the network, citing a common refrain that he wants to ensure CNN isn’t an “advocacy network.”
“We need to show both sides of every issue,” Zaslav said.
Zaslav continues to be supportive of CNN’s decision to host the Trump town hall, according to a person familiar with his thinking. Trump is leading early polls to win the 2024 Republican nomination for president. Zaslav told CNBC earlier this month Trump, who continues to falsely claim he was the victim of election fraud in the 2020, should absolutely appear on CNN.
“He’s the frontrunner — he has to be on our network,” Zaslav said on CNBC’s “Squawk Box.” “We’re happy he’s coming on our network.”

Amanpour slams ‘bothsidesism’

His comments came a day after veteran CNN journalist Christiane Amanpour publicly challenged the notion of covering “both sides” of the political spectrum if both sides weren’t factual. Amanpour spoke Wednesday at Columbia Journalism School’s commencement.

“Be truthful, but not neutral,” Amanpour told the graduates. She said the phrase was “her mantra.”
“Bothsidesism is not always objectivity. It does not get you to the truth. Drawing false moral or factual equivalence is neither objective or truthful. Objectivity is our golden rule, and it is in weighing all the sides and hearing all the evidence, hearing everyone and reporting everything, but not rushing to equate them when there is no equating.”
Amanpour said she met with Licht this week to convey her disappointment with airing a Trump town hall in the format in which it happened. She said Licht told her that “the execution was lacking a little,” as CNBC reported earlier this week. Amanpour noted the live audience should not have been allowed to cheer Trump’s every sentence, calling the behavior “appalling.”
At one point, Trump called town hall host Kaitlan Collins a “nasty person.” Amanpour said she would have dropped the microphone and walked out if he’d done that to her.
Amanpour said airing a taped Trump interview would have been a better solution, as it would have allowed CNN to better fight off Trump’s “disinformation and propaganda machine.” Trump is facing multiple criminal investigations and was found liable earlier this month for sexually abusing and defaming writer E. Jean Carroll. Trump has denied Carroll’s accusations. He was also indicted in New York for allegedly falsifying business records.
Amanpour is the first significant CNN journalist to publicly criticize Licht and Zaslav’s decision to air the town hall. Several of her colleagues jumped to support her comments on Twitter, showcasing an undercurrent of dissent within the CNN ranks.
“Speaking truth to power is a fundamental part of our job but to speak truth to the power that signs your checks? ⁦@amanpour⁩ showing everyone how it’s done,” tweeted Nima Elbagir, CNN’s chief international investigative correspondent.
CNN anchor Sara Sidner tweeted “she’s a real one” about Amanpour, which CNN correspondent Erica Hill echoed.
CNN Hong Kong anchor Kristie Lu Stout said Amanpour delivered “a masterclass in journalism.”

Falling ratings, rising discontent

Licht has inherited a CNN employee base largely put in place by former chief Jeff Zucker and his predecessors. Zucker was popular as a leader with many current staff members and led the network in a hands-on style that Licht has purposefully eschewed.
Zaslav’s mission with CNN has been to shed its “left-leaning” image to a more neutral brand, he reiterated Thursday. He touted the amount of Republicans CNN has interviewed recently in his comments Thursday.
Still, the changes aren’t helping CNN’s ratings. The network’s overall audience trailed not only Fox and MSNBC but also the much smaller conservative channel Newsmax on Tuesday in the 7 p.m. ET and 8 p.m. ET hours.
CNN’s profit fell below $1 billion last year, The New York Times reported, marking a six-year low. Slumping ratings won’t help its advertising revenue this year. Warner Bros. Discovery held its upfront presentation for ad buyers this week. Licht spoke at the event.
While the business struggles, Zaslav’s comments about CNN being more politically down the middle, especially when it comes to Trump, have irritated journalists who don’t equate fighting lies with partisanship.
It’s unclear whether CNN staff members’ show of discontent with Licht and Zaslav’s recent decision making will amount to anything other than public grousing.
But as the network struggles with falling ratings and millions of Americans cancelling traditional TV each year, which eat away at CNN’s revenue and profit, Zaslav may have an unwanted distraction on his hands that may only get worse as the U.S. edges closer to the 2024 presidential election.
Disclosure: NBCUniversal is the parent company of NBC, MSNBC and CNBC.
WATCH: CNBC’s full interview with Warner Bros. Discovery CEO David Zaslav More

The $18-million listing known as the Invisible House is the most expensive home for sale in Joshua Tree, California.
The modern residence is named for its mirror-clad exterior that creates the illusion of the home disappearing into the landscape.
It was one of Airbnb’s most wish-listed properties in 2023 and generated $1.4 million in revenue between guest rentals and production shoots.

One of Airbnb’s most wish-listed properties in 2023 is on the market.
The Joshua Tree, California-home is for sale at an asking price of $18 million, making it the most expensive home to ever hit the market in the town located about two hours southeast of Los Angeles in San Bernardino County. 

The record-breaking listing is called the Invisible House named for its mirror-clad facade which reflects the desert surroundings and can effectively disappear into the rocky landscape.

The Invisible House’s mirror-clad facade creates the illusion of the home disappearing into the desert landscape.
Brian Ashby

The modern glass architecture is situated on 67.5 acres just steps away from the Joshua Tree National Park. The living space spans almost 5,500 square feet with three bedrooms, four baths and a 100-foot indoor pool, according to the sale listing.
“This is one of the coolest houses in the world,” said co-listing agent Aaron Kirman, CEO of AKG Christie’s International Real Estate.
Kirman told CNBC the $18 million listing is all about show-stopping modern architecture and the illusion created by the 10,500 square feet of wrap-around mirrored glass on the home’s exterior.

Brian Ashby

The home was designed by film producer and current owner, Chris Hanley, and Frank Gehry-collaborator, architect Tomas Osinski. The glass-and-steel structure is 225 feet long, 25 feet wide and 21 feet tall.

Inside, there are smooth concrete floors and steel beams that criss-cross 12-foot ceilings. Those walls of mirrored-glass on the home’s exterior are transparent from the inside and they deliver panoramic views of a rock-filled landscape. The home’s west-facing wall of glass can slide open to reveal a symphony of boulders, tangled brush and stoic trees.
The minimalist design surrounding the 100-foot indoor pool makes a swim across the living room to one of the bedrooms even more lavish. 

A view of the indoor pool and the panoramic views framed by floor-to-ceiling panels of glass.
Brian Ashby

Finding real-estate comps for such unique architecture located in a remote desert town with a population of just thousands, is impossible, according to Kirman.
“So let’s just be clear, there are no comps. We are not comping this house based on Joshua Tree,” he said.
According to co-listing agent Matt Adamo, the highest price ever achieved for a home in Joshua Tree was $3.5 million. So a sale anywhere near the Invisible House’s asking price would shatter the local record.
The closest comps, Kirman said, are homes by built Richard Neutra, John Lautner and Rudolph Schindler — “some of the great architects from the past.”

The Invisible House’s mirrored facade reflecting the desert sunrise.
Brian Ashby

The Invisible House’s $18 million price tag amounts to almost $3,300 per square foot, which puts the Joshua Tree residence above some of the priciest listings in Los Angeles — on a per-square-foot basis — where the top 10% of all single family homes that sold during the first quarter averaged just under $2,400 a square foot, according to the Elliman Report.
And even before a potential sale, the modern desert home, which has its own Instagram account and boasts about 35,000 followers, is already a money-maker.
The home is frequently rented out to guests on Airbnb and for production shoots.
“In 2021, this house generated over $1.4 million in total revenue,” Adamo told CNBC, adding about 15% of that came from production.

The Invisible House in Joshua Tree, California is a mirrored 22-story horizontal skyscraper. Recently the unique property was listed for sale for $18 million.

The home’s Airbnb listing starts rentals at $2,500 a night and includes a small guest house on the property. Adamo said the rate for production is even higher, with past rentals earning $1,000 an hour or as much as $12,000 for a full day.
Between those two rental avenues, the brokers told CNBC the home has hosted quite a few notable guests including musicians and actors like Ariana Grande, Demi Lovato, Lizzo, Diplo and The Weeknd, as well as a long list of social media influencers.
“When you do the math, you’re buying significant architecture, uniqueness, grounds, plus the ability to make money on all of that,” Kirman said.
In the four months since the home has hit the market, it hasn’t seen any takers, but both agents are confident the record-breaking asking price will deliver the highest priced sale Joshua Tree has ever seen.
“I feel like $18 million is 100% the right price,” said Kirman.
“Don’t look at this as a house. It’s a piece of art, and look at what art sells for.”

Here’s a look around the Invisible House:

Giant wind-worn boulders rest at the home’s entrance. Once inside visitors are greeted by a dramatic 100-foot indoor pool.

The home’s west-facing glass wall slides open to the desert landscape.
Brian Ashby

Off the pool area and at the center of the kitchen is an oversized island with high-end cabinetry crafted in Italy by Boffi.

The sleek kitchen includes a marble-clad island with Italian-designed lower cabinets, but no overhead cabinetry that would obstruct the panoramic views. 
Brian Ashby

The home’s two guest rooms feature king-sized beds raised on  platforms of black and white striped marble that are built into the wall.

A guest bedroom with a built-in marble platform and king-sized bed.
Brian Ashby

Two caissons lift the home’s primary bedroom high above the desert floor and deliver dramatic panoramic views from a king-sized bed that sits on a platform constructed completely of glass.

Listing agent Aaron Kirman (L) and CNBC’s Ray Parisi discuss the caissons that lift the Invisible House’s primary bedroom above the desert floor.

The primary bedroom’s open floor plan includes a stainless steel rain shower and king-sized bed that sits on an all glass platform.
Brian Ashby

The room’s open layout includes an oversized soaking tub, floating double sinks and a stainless steel rain shower with a glass wall that frames a picturesque view.

The primary bedroom’s soaking tub and floating sinks.
Brian Ashby

The glass-encased shower in one of the home’s guest bedrooms.
Brian Ashby

The minimalist bathrooms feature showers clad in stainless steel. 

The guest bedroom’s minimalist ensuite bath includes cement floors and a stainless steel shower.
Brian Ashby

The roof of the off-the-grid estate is lined with 92 solar panels that store energy in 3 Tesla batteries.

The rooftop of the Invisible House is equipped with an array of solar panels that supply the home with electricity, heat and hot water.

Steps away from the main residence is a one-bedroom, pre-fab guest house with its own kitchen and bath, bringing the estate’s total room count to four bedrooms and five baths.

The Invisible House in the distance and its one-bedroom guest house in the foreground. More

Bath and Body Works’ stock jumped more than 10% in premarket trading after it raised its guidance for the full fiscal year.
The longtime mall retailer, known for its soaps and hand sanitizers, saw year-over-year declines in sales and profit.
The company attributed the raised guidance to “better-than-expected” earnings per share results and the impact of an early debt pay off in the first quarter.

Bath & and Body Works entrance.
Jeff Greenberg | Getty Images

Bath and Body Works’ stock jumped more than 10% in premarket trading Thursday after it beat fiscal first quarter earnings expectations and raised its guidance. 
While sales and net income fell year over year, the retailer is now expecting full year 2023 earnings per share to be between $2.70 and $3.10, compared to the range of $2.50 to $3.00 given during the previous quarter. It expects adjusted earnings per share to be between $2.68 and $3.08 for the year.

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The longtime mall shop, known for its lotions, hand sanitizers and soaps, attributed the rosier guidance to “better-than-expected” earnings and the impact of an early debt pay off in the first quarter.
“We delivered first quarter sales in line with our expectations while our EPS was better than anticipated as we saw benefits from our work to improve merchandise margin as well as early benefits from our cost optimization initiatives,” CEO Gina Boswell said in a statement. 
The company’s fiscal 2023 will include a 53rd week and the its outlook includes that additional week, which it estimates will impact earnings by 7 cents per share, the company added.
Here’s how Bath and Body Works did in its first fiscal quarter compared with what Wall Street was anticipating, based on a survey of analysts by Refinitiv:

Earnings per share: 33 cents adjusted vs. 26 cents expected
Revenue: $1.40 billion vs. $1.40 billion expected

The company’s net income for the three-month period that ended April 29 was $81 million, or 35 cents a share, roughly half of the $155 million, or 64 cents a share, it reported in the year-ago quarter.

Sales dropped to $1.40 billion, down 4% from $1.45 billion a year earlier.
The retailer expects earnings per share of 27 to 32 cents in the next quarter, compared to an estimate of 32 cents a share. It expects sales to decline in the low to mid single digits, compared to an estimate of down 3%.
It reaffirmed its full year sales forecast of flat net sales to a mid-single digit decline.
As consumers become more cautious and retail discounts and promotions tick up against a tough macroeconomic backdrop, Bath and Body Works margins dropped. They fell by about three and half percentage points to 42.7%, compared to 46.1% in the year ago quarter.
It’s not clear why margins dropped, but they were better than the 41.2% analysts had expected, according to a research note from Simeon Siegel, a retail analyst for BMO Capital Markets. Margins also topped above pre-Covid levels, Siegel noted. More

Walmart beat quarterly earnings and revenue expectations.
The big-box retailer also raised its full-year guidance.
Its grocery business helped to offset weaker sales of clothing and electronics.

A Walmart in Atlanta, Georgia, on Sunday, Feb. 19, 2023.
Dustin Chambers | Bloomberg | Getty Images

Walmart raised its full-year forecast Thursday, as fiscal first-quarter sales rose nearly 8% and its large grocery business helped offset weaker sales of clothing and electronics. 
The company’s shares rose in premarket trading as the discounter beat Wall Street’s earnings and revenue expectations.

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Walmart lifted its guidance to reflect the earnings beat. It said it now anticipates consolidated net sales will rise about 3.5% in the fiscal year. It expects adjusted earnings per share for the full year will be between $6.10 and $6.20, roughly in line with analysts’ expectations, according to Refinitiv.
Chief Financial Officer John David Rainey said consumers are trading down to smaller pack sizes, buying fewer discretionary items and waiting for promotions before making pricey purchases like TVs.
Yet shoppers are still spending, he added. 
“We’re seeing in these economic indicators that there is some strain on the consumer, but the resilience has surprised us,” he told CNBC. “And I think that’s in part probably because balance sheets are much stronger than they were pre-pandemic, even at this point.”
Here’s what Walmart reported for the three-month period that ended April 30, according to Refinitiv consensus estimates:

Earnings per share: $1.47 adjusted vs. $1.32 expected
Revenue: $152.30 billion vs. $148.76 billion expected

Walmart’s quarterly results provided the latest snapshot of the health of the American consumer. Earlier this week, Home Depot and Target said that shoppers were buying fewer big-ticket and discretionary items as they paid more for necessities.
Walmart’s sales reflected that shift toward groceries and essentials, too, Rainey said. The big-box retailer is well suited for that change as the nation’s largest grocer.
Nearly 60% of its annual U.S. sales come from groceries. The mix, however, weighed on the company’s first-quarter gross margin rate, which declined year over year, since food has slimmer margins than other merchandise.
Net income for the big-box retailer fell to $1.67 billion, or 62 cents per share, compared with $2.05 billion, or 74 cents per share, a year earlier. 
Total revenue rose to $152.30 billion from $141.57 billion in the year-ago period, beating Wall Street’s expectations.
Same-store sales for Walmart U.S. climbed 7.4%, excluding fuel. The key industry metric includes sales from stores and clubs open for at least a year. E-commerce sales jumped 27% year over year for Walmart U.S.
At Sam’s Club, same-store sales rose 7% year over year excluding fuel, driven by grocery sales. Its e-commerce sales grew 19%, led by curbside pickup.
Despite the sales growth, Rainey said spending trends weakened as the quarter went on, with the sharpest drop after February. He attributed that, in part, to the end of pandemic-related emergency funding from the Supplemental Nutrition Assistance Program and a decline in tax refund amounts. 
On a call with investors, CEO Doug McMillon said persistently higher prices on everyday items like food and paper goods continue to squeeze families’ budgets, leaving less money to spend in other ways.
He said that stubborn inflation “is one of the key factors creating uncertainty for us in the back half of the year.”
Walmart said for the fiscal second quarter, it expects consolidated net sales to increase about 4% and adjusted earnings per share to range between $1.63 and $1.68. That is lower than the $1.71 per share that Wall Street expected, according to Refinitiv consensus estimates.
Shares of Walmart closed Wednesday at $149.53, bringing its market value to $403.33 billion. Its stock has climbed nearly 6% year to date. The shares have trailed the S&P 500′s roughly 8% gain but are ahead of the retail-focused XRT’s nearly 2% rise during the same period.
Correction: Walmart’s shares have trailed the S&P 500′s roughly 8% gain but are ahead of the retail-focused XRT’s nearly 2% rise during the same period. An earlier version misstated their status. More

“The Goal” is a notable business book for two reasons. The first is its unusual genre. First published in 1984, it is a management tome dressed up in the clothes of a thriller. The book, written by Eliyahu Goldratt and Jeff Cox, tells the story of Alex Rogo, a plant manager who has to overhaul his factory within three months or face closure. To the objection that this is not thrilling at all, consider that it could have been a lot worse (“Alan Key must format a slide deck by midnight or he won’t get enough sleep to function properly the next day”). And Rogo’s efforts to reduce excess inventory and win over Bill Peach, his hard-driving boss, are weirdly entertaining. In any case readers lapped it up. “The Goal” sold millions. It has been reprinted several times. It even got turned into a graphic novel.Its second contribution was to popularise thinking about bottlenecks. The novel was written to get across Goldratt’s “theory of constraints”, a method for identifying those resources whose capacity does not match the demands placed on them. (This definition comes from one of the book’s protagonists—Jonah, a brilliant, globe-trotting business adviser whose resemblance to a real person seems unlikely to be coincidental.) Bottlenecks are often thought of as physical constraints. In Rogo’s factory, for example, the bottlenecks are two particular machines whose through-put must be increased in order to ship orders faster. In recent years the pandemic has increased awareness of such bottlenecks in the wider supply chain, whether because of the impact of semiconductor shortages or the effect of backlogs at congested ports. Policies can be bottlenecks, too. The pandemic also forced vaccine manufacturers to ditch normal patterns of working. In “Vaxxers”, a book about their work to develop the Oxford-AstraZeneca covid-19 jab, Sarah Gilbert and Catherine Green describe how they did more “at risk” work, doing things in parallel that would usually have been done sequentially. That would have meant wasted work if they had hit a problem, but also that scientists got stuff done much faster than usual. Bill Peach would have approved. People are also bottlenecks. Within organisations, managers themselves are frequently the points at which things get bunged up. That might be because executives simply have too much to do. Estimates vary on how many direct reports a manager should ideally have. But if they don’t all fit in a lift, you almost certainly have too many. It might be their own fault—if they are micromanagers, say, offering up helpful opinions on everything from font sizes to office furniture. It might be because no one is comfortable making a decision for fear of being hauled over the coals later by their own boss. It might be because there is jockeying and confusion over who has the right to make a call (an “upward status disagreement”, if you like jargon; a “pissing contest”, if you don’t). Bottlenecks can stem from good behaviour as well as bad. Collaboration is normally celebrated, but it can easily result in more delays if people’s time is being soaked up on non-essential tasks. Similarly, the person who responds to every message quickly and clears their inbox every night looks like the very opposite of a bottleneck, but that depends on two things: on what work they are not doing while they manically check their email, and on whether those messages are about trivial things. If people are responding at great speed on matters of zero importance—especially if they are high up the ladder and colleagues are therefore likely to respond to them in turn—they are probably creating trouble of some sort. Whatever the causes of congestion, the costs can be material. Daniel Ek, the boss of Spotify, attributed a recent restructuring at the music-streaming company to the need to make faster decisions. Consultants at McKinsey have estimated that about 530,000 days of managers’ time each year may be wasted on broken decision-making processes at a typical Fortune 500 company. “The Goal” is not the greatest thriller ever. No one dies. The only real violence done is to the English language (“It’s not until I’m busy with my delicious veal parmesan that my thoughts start to crystallise”). But it is a lot more readable than most business books, and it makes you think about a subject that is relevant not only to supply-chain managers and operations managers but to bosses everywhere. Bottlenecks abound. They just need to be found. ■Read more from Bartleby, our columnist on management and work:How to recruit with softer skills in mind (May 11th)A short guide to corporate rituals (May 4th)If enough people think you’re a bad boss, then you are (Apr 23rd)Also: How the Bartleby column got its name More

Living in California, as Schumpeter does, you would think licence plates called it the Red Tape State, not the golden one. Last August it led the world in announcing a ban on new gasoline-fuelled cars by 2035. In December its petrol prices soared higher than anywhere else in America, leading to an onerous cap on refiners’ profit margins. Early this year you could barely find an egg to fry, partly because of an animal-welfare measure from 2018 that keeps eggs off its shop shelves if they are laid in cages.California has the privilege of being a colossal market irresistible to manufacturers, so some of its rules become standards well beyond its borders. But it is not unique in wanting to go its own way. Across America, a mishmash of regulations from state to state differ on everything from how to manufacture lifts and how to produce liquor to how to run a bank. In theory that is all well and good. Regulatory experimentation can be healthy. In practice it creates a minefield. Every American state border is festooned with so much red tape that it costs businesses an arm and a leg. For a columnist from Britain, this is strange. Having grown so accustomed to hearing about the shortcomings of the European Union’s single market, it is a shock to realise that America’s interstate equivalent is no paradise, despite being bigger, constitutionally protected and far more rooted in history than the EU’s. And if anything, it is in danger of fraying further. A combination of local one-party supermajorities, populism and the culture wars are making states—led by chest-thumping attorneys-general—only too eager to get into the ring with business. Companies have long feared the Democratic sucker punch. Now Republicans are threatening business, too, their free-market instincts overtaken by their desire to assert state interests over federal regulatory authority. This political polarisation raises two big questions. Does it affect the ability of American firms to do business at home? And what are they doing about it? Companies face several challenges. The first is legal, exemplified by moves to ban abortions. Take Walgreens, America’s second-biggest pharmacy chain, which this year found itself in a Catch-22. In February it received a letter from 20 Republican attorneys-general warning it that it might be breaking federal and state laws if it mailed mifepristone, an abortion pill, to their states. It then made the seemingly unobjectionable point that it would only supply the medication to states where it was legally permissible. In response, California’s Democratic governor, Gavin Newsom, scuttled a state contract with Walgreens and threatened a boycott. Walgreens’ rivals, such as CVS, wisely kept quiet. Yet they, too, may find themselves in a similar legal quagmire if the issue becomes politicised even further. The second headache is cultural. Among blue states, California has passed laws (later struck down in court) encouraging racial diversity on company boards. Among Republican-leaning states, Florida, via the “Stop WOKE Act”, has sought to outlaw discrimination by race, even in pursuit of diversity, equity and inclusion. Such inconsistencies make it hard for firms to apply a one-size-fits-all policy. Different state governments have different views as to what kinds of diversity ought to be promoted. This month 19 Republican attorneys-general attacked JPMorgan Chase, America’s biggest bank, for a “double standard” on inclusiveness. They noted that the lender had affirmed its “unwavering commitment” to LGBT+ Americans. The same commitment had not been extended to religious or conservative groups, they said.The third pitfall has to do with greenery. According to Ropes & Gray, a law firm that tracks environmental, social and governance (ESG) legislation, states are introducing contradictory regulations about oil, gas and coal investments. In 2021 Maine, a blue state, got the ball rolling with legislation prohibiting its public pension fund from investing in big fossil-fuel producers, and set out a timetable for divestment. The same year Texas banned state funds from having relationships with financial firms that boycott energy companies. More than a dozen blue and red states have followed their respective leads. These initiatives are linked to Democratic support for ESG and Republican hostility to anything that smacks of “non-pecuniary” investment considerations. Compounding the problem, says Joshua Lichtenstein of Ropes & Gray, is that doing business in the EU may require sustainability reporting, which is anathema in parts of America.Firms may be accused of sleepwalking into their predicament. During Donald Trump’s presidency they stuck their necks out on hot-button issues, for instance opposing North Carolina’s “bathroom bill” that would bar transgender women from ladies’ toilets. They embraced ESG-infused stakeholder capitalism, hoping to attract consumers and workers. Then came the “wokelash”. Florida’s war on Disney, after the firm opposed a bill barring talk of sexual and gender identity in some primary-school year groups, marked “a fork in the road”, says Maggie Mick of MultiState, a consultancy. Since then, companies have had a rethink. One way they have done so is by making political donations more bipartisan. Another is to go quiet on their climate commitments, a tactic known as “green-hushing”. Equally quietly, some asset managers are lobbying state governments to reverse their ESG prohibitions. As yet, no one is throwing in the towel on the United States. From Brexit to Texit Craig Parsons of the University of Oregon notes that, for all its frailties, America’s single market has some resounding strengths, such as use of a common language and a shared culture. That heritage is delicate, though, especially in the context of the culture wars and political schisms. If the trend of state supermajorities persists after the 2024 elections, things could get worse. America should be careful. Its coast-to-coast marketplace is far too important to take for granted. Take that on trust from a Brit. ■Read more from Schumpeter, our columnist on global business:Writers on strike beware: Hollywood has changed for ever (May 10th)America needs a jab in its corporate backside (May 3rd)Is mining set for a new wave of mega-mergers? (Apr 27th)Also: If you want to write directly to Schumpeter, email him at [email protected]. And here is an explanation of how the Schumpeter column got its name. More

It had all the hallmarks of a coming-out party—or, more accurately, a coming-out-again one. After being uncharacteristically absent from public view for a few years, Mukesh Ambani re-emerged at the end of March for the opening of the Nita Mukesh Ambani Cultural Centre in Mumbai’s new business district. It houses three theatres, a conference hall for trade shows, as well as a small museum. Plans are afoot to build an adjoining apartment complex and shopping mall. The precise cost of the project is veiled in secrecy, though the figure of $1bn has been rumoured. A single lift, said to be the world’s largest, with a capacity of 100 people, is thought to have set the tycoon back $45m. The sprawling and opaque endeavour is an apt metaphor for Reliance Group, the business empire that has made Mr Ambani Asia’s richest man. The conglomerate reported record profits in the fiscal year to March, stealing the limelight from a rival tycoon, Gautam Adani, whose businesses are on the defensive after an attack in January by a short-seller. Last year its listed flagship, Reliance Industries, accounted for 21% of the collective revenue of the 30 Indian blue-chip firms in Mumbai’s Sensex index, and 13% of their net profits. With the beleaguered Mr Adani reining in investments, Mr Ambani remains a rare Indian industrialist who is keen to build. Reliance Industries’ capital spending grew from $10bn in fiscal 2021 to $14bn a year later. Last year it spent $18bn, equivalent to 45% of the Sensex total.In the sectors where Reliance operates, it is dominant. Its Jio telephony unit went from nothing to 439m mobile customers, or 37% of India’s total, in seven years. It gained 1m users in February even as Vodafone, the erstwhile market leader, lost double that number. Reliance’s retailing arm has 18,000 stores, up from 12,000 two years ago, a digital marketplace and a logistics network. It sells everything from gadgets and groceries to garments (many coming straight from numerous fashion brands that Reliance has been acquiring). Its renewable-energy arm has grand ambitions in solar power, green hydrogen and other climate-friendly businesses. On May 2nd the group spun out Jio Financial Services, which could fast become a force in payments and consumer lending thanks to troves of data on Jio’s mobile customers. Then there is Reliance’s core business: petrochemicals. It is less sexy than the much-trumpeted new-economy ventures, but more lucrative. Last year the group’s refining operations produced 56% of its total revenues and 59% of earnings before interest and taxes. Reliance is believed to be the single biggest beneficiary from India’s abrupt transformation into a huge importer of sanction-hit Russian oil and a leading exporter of refined products. Mr Ambani’s business benefits from both ends of this equation, buying cut-price Russian crude and selling the refined stuff into global markets, where prices remain elevated. According to Jefferies, an investment bank, this adds up to $5 of gross margin to every barrel of Reliance’s refined oil. The company says that “As part of overall crude sourcing strategy, Reliance is always in the market to source arbitrage barrels.” Yet Reliance’s ambitions have a flipside. It makes relatively little money from its operations. Though its return on capital is higher than for the Sensex as a whole, it has not exceeded 10% since 2007 (see chart 1). Last year it was 5%. Year-on-year revenue growth slowed in each of the past three quarters. Debts are up (see chart 2), having dropped in 2021 after capital injections from foreign tech giants such as Alphabet and Meta, and sovereign-wealth funds, which all saw teaming up with a local titan as a way to partake in India’s rise. Net debt trebled in the last financial year, relative to the one before.In the 12 months to March Reliance Industries’ market value fell by 18% in dollar terms, or $43bn. Among big Indian firms, only Mr Adani’s battered businesses and two IT giants caught up in the global tech crunch, Infosys and TCS, did worse. Reliance has since clawed back some of that. But it will take more than a snazzy cultural centre to impress investors. ■To stay on top of the biggest stories in business and technology, sign up to the Bottom Line, our weekly subscriber-only newsletter. More

Given the political weather, Western makers of wind turbines should be flying high. America’s Inflation Reduction Act is stuffed with goodies for all sorts of renewable energy. In late April European leaders pledged to increase the North Sea’s offshore-wind capacity to 300 gigawatts by 2050, from about 100 gigawatts today and double a previous commitment. That looks like an awful lot of future business for turbine manufacturers. If only shorter-term forecasts were as clement.The four biggest Western makers of wind turbines—GE Renewable Energy, Nordex, Siemens Gamesa and Vestas—supply about 90% of the market outside China. Together they made revenues of €42bn ($46bn) in 2022. But whereas wind-farm operators benefited handsomely from high electricity rates after Russia invaded Ukraine in February last year, the turbine-makers sank into the red and their suppliers barely made money (see chart). Last year the big four racked up combined net losses of nearly €5bn. In recent weeks GE Renewable Energy, Nordex and, on May 15th, Siemens Gamesa, reported more losses in the first three months of the year. Although Vestas, the biggest of the lot, eked out a slim net profit of €16m on sales of €2.8bn, its chief executive, Henrik Andersen, nevertheless conceded that conditions were still “challenging”.The struggle of wind-turbine companies to make money is the result of market forces blowing in opposite directions. On the one hand, prices that turbines can fetch have been coming down. In the past few years Vestas and its competitors rushed to outdo each other by building ever-bigger turbines that offer ever-cheaper capacity to wind-farm developers, a group that includes big utilities and private infrastructure investors. On the other hand, those buyers’ appetite for new kit has been cooled somewhat by the difficulty of securing the permits necessary to install it. The average selling price per megawatt, the industry’s preferred measure, fell from nearly €1m in the mid-2010s to about €700,000 in 2020.The time between signing a contract with wind-farm developers to actually erecting the turbines and getting paid is as much as three years on average for onshore projects and five for offshore ones, estimates Endri Lico of Wood Mackenzie, a consultancy. Because terms are mostly locked in during that time, that exposes turbine-makers to any market vagaries. Lately these have combined into a “perfect storm”, in the words of Mr Lico: supply-chain disruptions, lack of raw materials and components, inflation, higher interest rates and geopolitical tensions. The race to develop bigger turbines may come to haunt the industry for a longer period, says Thomas Cobet of AlixPartners, another consultancy. The largest machines are not yet a mature technology. They could also prove costly for turbine-makers to maintain. This, in turn, would hurt the margins of the manufacturers’ biggest moneymaker: service contracts in which operators pay them a predetermined fee for everything from spare parts to full operations programmes.The industry would also love to avoid the fate that befell Europe’s solar-panel industry, which lost an early lead to cheaper state-subsidised Chinese rivals. China’s turbine-makers are growing quickly—and profitably. The world’s biggest such firm is now Goldwind, which installed 12.5 gigawatts of capacity in 2022, for the first time edging ahead of Vestas, while generating an annual net profit of around $340m. Although the Chinese firms mostly cater to their home market, in which Western companies are not allowed to compete, they are also eyeing foreign customers, notably in countries along China’s Belt and Road Initiative of infrastructure projects. Amid rising Sino-Western tensions, and a broader protectionist mood gripping Washington and European capitals alike, Chinese manufacturers are increasingly unwelcome in America and Europe. Europeans in particular, having been burned by a dependence on cheap Russian gas as war broke out on their doorstep, do not want to rely on cheap Chinese turbines, says Harriet Fox of Ember, one more consultancy. But if Vestas and other Western turbine companies are to do their part in the continent’s decarbonisation, they must first return to profitability. In today’s adverse market conditions, this may necessitate government action. In April the EU agreed to make permissions for new wind farms and related infrastructure easier to obtain, for instance by allowing the creation of “renewable acceleration areas”, where projects may be approved in one year or less. That is a start. Still, argues Phuc-Vinh Nguyen of the Jacques Delors Institute, a think-tank in Paris, the EU needs to do more to reduce the uncertainty for turbine-makers and wind-farm developers—something that the Inflation Reduction Act does much better than Europe’s current rules do. This does not necessarily mean more public money. Europe is actually held back by a lack of concrete timelines for investments and clear regulations. Without them, the forecast for Western turbine-makers will remain choppy. ■To stay on top of the biggest stories in business and technology, sign up to the Bottom Line, our weekly subscriber-only newsletter. More