Business

The idea that wealthy dynasties can go to pot in the space of three generations pops up throughout history and around the world. John Dryden, an English poet who died in 1700, mused that “seldom three descents continue good.” In 19th-century America, successful families were said to go from “shirtsleeves to shirtsleeves” in that span of time. A Chinese proverb, fu bu guo san dai (wealth does not pass three generations) captures an identical sentiment.As a rising share of the world’s ultra-rich comes from emerging markets, the three-generation hypothesis is being tested once again—nowhere more so than in developing Asia. Asians are helping to swell the ranks of individuals with fortunes of more than $500m, which rose from 2,700 to nearly 7,100 globally between 2011 and 2021, according to Credit Suisse, a bank. The continent’s tycoons did more than their African or Latin American counterparts to push the developing world’s share of that total from 37% to 52% over the decade. The combined revenue of the continent’s family firms that rank within the world’s 500 biggest such concerns surpassed $1trn last year, according to researchers at the University of St Gallen in Switzerland (see chart 1).Overall, the results of the three-generation test so far look encouraging for Asia’s ageing patriarchs (most are men) as they seek a safe pair of hands to which to entrust their legacy. The grandchildren of the region’s founder tycoons may well be in shirtsleeves, but out of sartorial choice rather than necessity. They are worldlier than their elders, who built their fortunes on local businesses that thrive in periods of rapid economic development, such as construction or natural resources. They often blend the needs of the family business with personal preferences. At the same time, they are keenly aware of their responsibility to avoid the prodigal trap. As they take the reins of their business houses, it is up to them to show whether, in the words of one Asian heir, “you can institutionalise” and, like “a sort of Rothschild”, keep generating wealth over centuries. (Members of the Rothschild family are shareholders in The Economist’s parent company.)To understand what makes these Rothschild wannabes tick, start with education. Most have attended university abroad, particularly in America. Adrian Cheng, grandson of Cheng Yu-tung, a Hong Kong property tycoon, went to Harvard University. John Riady, the New York-born scion of an Indonesian business dynasty, attended Georgetown University, before earning an MBA at the Wharton School of the University of Pennsylvania and a law degree from Columbia University. Isha Ambani, daughter of Mukesh Ambani, graduated from Yale and then Stanford University’s Graduate School of Business in 2018. Foreign education distinguishes the new crop of tycoons from their grandparents, many of whom never completed university. What sets them apart from their parents is their career path into the family business. Like their fathers, Mr Cheng, Mr Riady and Ms Ambani all now work for these. Mr Cheng runs New World Development, the family’s property arm; Mr Riady is chief executive of Lippo Karawaci, the family empire’s property developer; Ms Ambani heads Reliance’s retail operation. But, like plenty of their peers, they took more or less circuitous routes to get there. For many, that means a stint in finance or professional services. Mr Cheng started his career in investment banking, including at UBS, a giant Swiss lender. Ms Ambani was a consultant at McKinsey. Mr Riady worked in private equity. For some others, the bridge is the world of venture capital and tech startups. Korawad Chearavanont, great-grandson of the founder of CP Group, Thailand’s largest private company, launched a tech startup that provides social-media features for apps. Kuok Meng Xiong, grandson of Robert Kuok, a commodity, property and logistics billionaire from Malaysia, runs K3 Ventures, a Singapore-based VC firm. Both in the case of foreign VC investments in Asia and of Asian investments in foreign VC firms, the heirs’ fluent English, foreign education and Western social circles makes them the ideal conduit. And these flows are growing: in the past two years VC investments in Asia averaged $150bn annually, more than half of America’s $280bn or so, and up from $11bn in 2012, when it was a quarter of America’s. The share of investments in VC deals in America coming from Asia has climbed, too, from less than 10% by value a decade ago to around a quarter in 2022, according to Dealroom, a data firm (see chart 2). Permitting the heirs to have a professional life outside the family is often about letting them spread their wings. “The first and second generation were quite traditional,” says Kevin Au, director of the Centre for Family Business at the Chinese University of Hong Kong. But, he adds, they were happy to send their children abroad, “where values are different and business is done differently”, perhaps understanding that not everyone wants to work with their parents. Impact investing and sustainability-related roles are popular among the millennial plutocrats. Rather than join Hyundai Group, Chung Kyungsun, grandson of its founder, Chung Ju-yung, has set up an impact-investment firm called Sylvan Group, which focuses on companies aligned with UN Sustainable Development Goals. The shift to more vocally progressive views in some areas, like inequality, may be driven by pragmatism too. “In societies where economic growth isn’t being shared they want to break you up, tax you, regulate you, they presume the worst,” says one business heir.Ensuring heirs’ experience beyond the family concern reflects a more open-minded parenting style. But it is also becoming a business priority for the older generation, especially as the family businesses diversify into new sectors and geographies. Reliance, which made its name in petrochemicals, is now India’s biggest telecoms firm and digital platform. Lippo has gained greater exposure to young technology firms in South-East Asia through Venturra Capital, its VC subsidiary. That young business scions have a wider circle of contacts than do their parents is useful for their families’ firms: rubbing shoulders with would-be startup founders, venture capitalists, consultants and bankers offers opportunity for early dibs on interesting investment opportunities. Last year Campden Wealth, a consultancy, surveyed 382 global family offices, the investment vehicles that manage dynastic wealth. It found that the majority would prefer the next generation of owners to gain external work experience before taking on the reins. More

General Motors said Monday that its first-quarter U.S. sales rose 18% from a year ago, to just over 600,000 vehicles delivered.
Sales of the Chevrolet Silverado and GMC Sierra full-size pickups were up a combined 9% from a year ago, helped by a 38% jump in sales to commercial fleets.
GM confirmed Monday that it expects to build 50,000 EVs in the first half of 2023 and “double that” in the second half of the year.

A GMC pickup truck is displayed for sale on a lot at a General Motors dealership on January 05, 2023 in Austin, Texas.
Brandon Bell | Getty Images

General Motors said Monday that its first-quarter U.S. sales rose 18% from a year ago, to just over 600,000 vehicles delivered, as it continued its rebound from the supply chain problems that limited global auto production in 2021 and early 2022.
“We gained significant market share in the first quarter, pricing was strong, inventories are in very good shape, and we sold more than 20,000 EVs in a quarter for the first time,” GM North America chief Steve Carlisle said in a statement.  

Most of those electric vehicles were Chevrolet Bolts, but GM did sell 968 of its brand-new Cadillac Lyriq EVs, built on the company’s next-generation Ultium EV architecture. GM has been working to ramp up its production of its Ultium-based electric vehicles, with new high-volume Ultium-based models including an electric Chevrolet Equinox crossover due later in 2023.
GM confirmed Monday that it expects to build 50,000 EVs in the first half of 2023 and “double that” in the second half of the year, as Lyriq production ramps up and shipments of the electric version of the Chevrolet Silverado pickup begin later this spring.
GM is also increasing production of its BrightDrop Zevo 600, an electric delivery van, and said truck rental giant Ryder System has agreed to buy 4,000 of the vans between now and 2025.
The company’s EV sales volumes are expected to ramp up sharply from there in 2024 and 2025.
Meanwhile, the internal combustion products that are paying the bills – GM’s pickups and big SUVs – continue to sell well. Sales of the internal combustion Silverado and GMC Sierra full-size pickups were up a combined 9% from a year ago, helped by a 38% jump in sales to commercial fleets – a market long dominated by GM’s Detroit archrival, Ford Motor.

Ford is expected to report its first-quarter U.S. sales on Tuesday.
With analysts increasingly concerned about high vehicle prices, GM noted that new versions of its affordable Chevrolet Trax and Trailblazer and Buick Encore crossovers will be arriving at dealers over the next several months. All three will have starting prices below $30,000, GM said.
Correction: General Motors expects to build 50,000 EVs in the first half of 2023. An earlier version of this story misstated the target. More

McDonald’s is closing its U.S. corporate offices as it lays off hundreds of workers.
The company announced in January it would be cutting jobs as part of a broader corporate restructuring.
McDonald’s employs roughly 45,000 people in the U.S. across its corporate offices and company-owned restaurants.

Signage is displayed outside the new McDonald’s Corp. headquarters in Chicago, Illinois, U.S., on Monday, June 4, 2018.
Bloomberg | Bloomberg | Getty Images

McDonald’s is closing its U.S. corporate offices Monday through Wednesday as the company lays off hundreds of workers, a person familiar with the matter told CNBC.
The Wall Street Journal first reported the company’s office closures.

CEO Chris Kempczinski announced in January that the company would be cutting jobs as part of a broader corporate restructuring. McDonald’s told employees that they’ll be notified virtually, starting Monday and ending Wednesday, if they’re affected by the cuts.
In an internal email viewed by CNBC, McDonald’s said it was closing its U.S. offices for those three days for employees’ comfort and privacy, as well as for timing since it’s a busy travel week ahead of Passover and Easter.
The company declined to comment to CNBC.
McDonald’s reorganization will include deprioritizing and halting certain initiatives, Kempczinski said back in January. At the time, McDonald’s said the layoffs weren’t a cost-cutting measure, but instead are meant to help the company innovate faster and work more efficiently.
At the end of 2022, McDonald’s employed more than 150,000 people in its corporate offices and company-owned restaurations. Roughly 45,000 of those workers are based in the U.S. More

NASA announced the four astronauts who will fly on the agency’s upcoming mission around the moon, currently scheduled for late 2024.
Known as the Artemis II mission, the spaceflight will carry three Americans and one Canadian.
Reid Wiseman is the mission’s commander and Victor Glover is the pilot, while Jeremy Hansen and Christina Koch are mission specialists.

NASA Administrator Bill Nelson, center, stands with the crew of the Artemis II mission, from left: Jeremy Hansen, Victor Glover, Reid Wiseman, and Christina Koch.

The National Aeronautics and Space Administration on Monday announced the four astronauts who will fly on the agency’s upcoming mission around the moon, currently scheduled for late 2024.
Known as the Artemis II mission, the spaceflight will carry three Americans and one Canadian: Reid Wiseman, Victor Glover and Christina Koch from NASA, and Jeremy Hansen from the Canadian Space Agency.

Wiseman is the mission’s commander and Glover is the pilot, while Hansen and Koch are mission specialists.
Artemis II follows the uncrewed Artemis I mission, which completed a nearly month-long journey around the moon late last year. The Artemis program represents a series of missions with escalating goals. The third – tentatively scheduled for 2025 – is expected to return astronauts to the lunar surface for the first time since the Apollo era.

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The Artemis II mission will launch on NASA’s Space Launch System rocket, with the Orion capsule carrying the astronauts on a 10-day journey to the moon and back. While Artemis II won’t land on the moon, it will make a near pass above the surface and demonstrate the Orion spacecraft’s ability to transport people safely. More

Rivian confirmed Monday that it’s still on track to produce 50,000 EVs in 2023, in line with the guidance it gave investors in February.
Rivian said it built about 9,400 EVs in the first quarter and delivered just under 8,000 to customers.

The Rivian name is shown on one of their new electric SUV vehicles in San Diego, U.S., December 16, 2022.
Mike Blake | Reuters

Electric vehicle maker Rivian Automotive said Monday that its first-quarter deliveries were in line with expectations and that it remains on track to produce 50,000 EVs in 2023.
Rivian said in a statement that it produced 9,395 EVs in the first quarter and delivered 7,946 vehicles to customers by quarter-end. Both numbers were down from fourth-quarter results, but that wasn’t a surprise: Wall Street analysts polled by FactSet had been expecting Rivian to deliver about 8,000 vehicles during the first quarter.

Rivian’s shares were down slightly in premarket trading after the update.
Rivian also said that it remains on track to hit its full-year production guidance. The company said on Feb. 28 that it expects to produce 50,000 vehicles in 2023, roughly double its 2022 total.
The company didn’t break out deliveries by model. It’s currently building the R1T pickup, R1S SUV and a series of electric delivery vans for Amazon at its factory in Normal, Illinois.  
Rivian will report its first-quarter financial results after U.S. markets close May 9. More

Home prices suddenly turned higher as mortgage rates slipped.
Prices nationally rose 0.16% in February, when seasonally adjusted, according to Black Knight.
In December and January, mortgage rates began pulling back, and homebuyers surged ahead.

Unexpectedly strong home sales at the start of this year reversed a sharp, several-month decline in home prices. Mortgage rates are behind the swing.
Home prices nationally rose 0.16% in February, when seasonally adjusted, according to Black Knight. That is the strongest one-month gain since May of last year. Home prices are now 2.6% below their peak last June.

Of the 50 largest U.S. markets, 39 saw home prices rise in February. That’s a quick turnaround from November, when prices were falling in 48 of 50 markets.
Behind the quick change are wide swings in mortgage rates. The average rate on the 30-year fixed began rising off of a record low at the start of 2022. By June it had gone from around 4% to just over 6%. Sales slowed down, and prices followed. By fall, the rate shot over 7%, and home prices began cooling more quickly.
In December and January, however, mortgage rates began pulling back, and homebuyers were quick to take advantage. Closed sales of existing homes in February, which represented contracts signed in December and January, shot a remarkable 14.5% higher, according to the National Association of Realtors.
“Conscious of changing mortgage rates, home buyers are taking advantage of any rate declines,” Lawrence Yun, NAR’s chief economist, said in the February sales release.
As with all real estate, however, the price dynamics differ depending on location. Miami continues to see the largest price gains, along with more affordable markets in the Midwest, like Cincinnati, Columbus, Ohio, and Cleveland, according to Black Knight. Meanwhile, prices are still falling in some of the markets which saw the greatest price inflation over the last several years. Those include Austin, Texas, Las Vegas, Salt Lake City, Seattle and San Francisco.

While mortgage rates were the driving factor for the price turnaround nationally, tight supply is adding to the upward pressure, especially with new spring demand from buyers.
“The unfortunate reality is that the scarce supply of inventory that’s the source of so much market gridlock isn’t getting any better,” said Andy Walden, Black Knight’s vice president of enterprise research strategy, in the release.
The number of homes available for sale fell in February for the fifth straight month to the lowest level since May of last year, according to Black Knight. New listings were 27% lower than their pre-Covid pandemic levels.
“While some price increases – most notably in Miami, which saw the largest of the month – can be chalked up to people moving to the area, we’re seeing stronger price gains more generally in those areas with better affordability and larger inventory deficits,” Walden added.
Mortgage rates began rising again in February and then fell back slightly in March due to market fears over the U.S. banking system, amid several bank collapses.
Demand for homes, however, appears not to have been swayed by the crisis, with real estate agents anecdotally still reporting busy open houses. Black Knight is still predicting prices to move lower again throughout the rest of this year, but if supply continues to drop, keeping the competition strong, prices may not have far to fall. More

WWE agreed to merge with UFC as part of a deal with Endeavor Group.
Ari Emanuel’s Endeavor owns UFC and would control a majority stake in the new company.
Vince McMahon’s WWE has sought a buyer for months.

World Wrestling Entertainment Inc. Chairman Vince McMahon (L) and wrestler Triple H appear in the ring during the WWE Monday Night Raw show at the Thomas & Mack Center August 24, 2009
Ethan Miller | Getty Images Entertainment | Getty Images

Vince McMahon’s World Wrestling Entertainment has agreed to merge with UFC to form a new publicly traded company controlled by Endeavor Group, the companies announced Monday morning.
Endeavor will own a 51% stake in the new combat sports and entertainment company, while WWE shareholders will have the remaining 49%, according to the terms of the agreement. The deal values WWE at $9.3 billion and UFC, which is owned by Endeavor, at $12.1 billion, the companies said in a press release.

Shares of WWE fell in premarket trading, while Endeavor shares rose.
Ari Emanuel will act as chief executive of both Endeavor and the new company, the companies said. McMahon, likewise, will be executive chairman, while Endeavor President and COO Mark Shapiro will also work in the same roles at the new company. Dana White will remain as president of UFC, and WWE CEO Nick Khan will stay on as president of the wrestling business.
The board will consist of 11 people, six appointed by Endeavor and five by WWE. The merged company’s name will be announced at a later time.

Ari Emanuel speaks onstage during the 2017 LACMA Art + Film Gala Honoring Mark Bradford and George Lucas presented by Gucci at LACMA on November 4, 2017 in Los Angeles, California. 
Stefanie Keenan | Getty Images Entertainment | Getty Images

The announcement confirmed an earlier CNBC report. It also came a day after WWE wrapped up its flagship live event, WrestleMania, in California. The company has spent the past several months looking for a buyer. McMahon returned to the company as chairman in January to oversee the process. Shares of WWE are up more than 33% this year as of Friday’s closing bell, giving it a market value of more than $6.79 billion.
The agreement would pair two of the biggest sports entertainment brands in the world. Despite notable differences – WWE features scripted matches and soap opera-like storylines, while UFC showcases authentically brutal mixed martial arts fighting – the organizations look like a good fit in terms of content and culture. Several UFC fighters, including Ronda Rousey and Brock Lesnar, have already wrestled for WWE.

UFC champion and superstar Conor McGregor lauded news of the pending deal Sunday evening. “Incredible. What a powerhouse!” he said in one tweet, following up with another tweet displaying an image of him brandishing UFC and WWE championship belts.
A merger will also conclude WWE’s decades-long run as a family business. McMahon’s father founded WWE in its original incarnation during the middle of the 20th century. McMahon, who bought the company from his father in 1982, is the controlling shareholder. Over the past four decades, WWE has grown into a global phenomenon, spawning breakout stars such as Hulk Hogan, Dwayne “The Rock” Johnson, Dave Bautista and John Cena.
McMahon, 77, retired from the company in July following a string of revelations that he paid several women millions of dollars over the years to keep them quiet about alleged affairs and misconduct. His daughter, Stephanie McMahon, became co-CEO alongside Khan. Paul Levesque, who’s both Stephanie McMahon’s husband and the wrestler known as Triple H, took over creative duties from Vince McMahon.

Dana White appears at the UFC 282 post-fight press conference on December 10, 2022, at the T-Mobile Arena in Las Vegas, NV.
Amy Kaplan | Icon Sportswire | Getty Images

After Vince McMahon came back in January, Stephanie McMahon stepped down and Khan fully assumed the CEO role. The elder McMahon recently locked in a two-year employment contract, according to a securities filing.
Khan in recent weeks has been making the media rounds to discuss the potential sale. He told CNBC’s Morgan Brennan on Thursday that it’s been a robust process and it’s drawn many interested buyers.
WWE offers Endeavor’s shareholders a muscular media and live events business, as well as decades worth of intellectual property. The company generated $1.29 billion in revenue last year, driven mainly by its $1 billion media unit.
UFC, meanwhile, has paid off for Endeavor. Last year, the MMA league helped its parent company’s sports business make $1.3 billion in revenue. Endeavor’s market cap stood at about $10.53 billion as of Friday’s close.
WWE also fits well with the cultures of Endeavor and UFC, which also reflect their leaders’ hard-edged styles. McMahon, Emanuel and White are known for their outsized personalities, and each has their share of devoted allies and and harsh critics.
White is no stranger to scandal, either. Earlier this year, video emerged showing the UFC boss slapping his wife during a public argument at a New Year’s Eve party in Mexico. He later apologized.
Disclosure: Peacock, the streaming service owned by CNBC parent NBCUniversal, carries WWE events such as WrestleMania. More

Walmart’s website and mobile app have a new look.
The redesign comes as shoppers spend less on discretionary purchases, such as clothes and TVs.
Online sales now drive more of Walmart’s business after a Covid pandemic-fueled push.

Walmart has redesigned its website and app to try to encourage shoppers to browse and buy more.

Walmart’s digital store has a new look.
Starting this week, all customers who browse the company’s website and app will see bigger and glossier photos, videos and social media-inspired content that Walmart hopes will nudge more purchases.

Tom Ward, Walmart’s chief e-commerce officer, said the goal is to make shopping online easier and more engaging.
“When you walk into a store, you get inspired and excited by what you see,” he said. “And so we thought, ‘How do you drive that same inspiration and excitement in our closest store — in our app?'”
The big-box retailer’s online makeover comes as consumers become more reluctant to buy discretionary merchandise, such as clothing and consumer electronics, while paying higher prices for necessities like food and housing. Sales of discretionary general merchandise in the U.S. have fallen 4% in dollars and 5% in units year over year as of February, according to Circana, the merged market research firms formerly known as The NPD Group and IRI.
Walmart has felt that, too. Its sales have increasingly come from groceries, rather than general merchandise, in recent quarters. Walmart CFO John David Rainey told CNBC in February that consumers’ more budget-conscious mentality factored into the company’s outlook for this year.
Walmart expects weaker sales in the months ahead. It anticipates same-store sales for Walmart U.S. will increase between 2% and 2.5% excluding fuel, in the fiscal year ahead. The company projects that adjusted earnings per share for the fiscal year will range from $5.90 to $6.05, excluding fuel.

That would represent a drop from the past fiscal year, when same-store sales grew 6.6% for Walmart U.S. and adjusted earnings per share were $6.29, excluding fuel.
Ward acknowledged that “there’s lots of wants and needs conversations going around right now.” He said along with offering low prices, Walmart wants to catch customers’ attention by putting fresh, trendy and seasonal items in front of them, such as spring dresses, patio furniture and toys for Easter baskets.
He said the website and app’s new look could also lift sales for third-party sellers that have joined or could join Walmart’s marketplace. Along with selling its own merchandise, Walmart has riffed off the playbook of Amazon by using a third-party marketplace to expand its assortment of items online and to make money by selling fulfillment services.

E-commerce has become a more significant part of Walmart’s business, especially after a Covid pandemic-fueled push. Online sales accounted for about $53.4 billion — or nearly 13% — of Walmart U.S.’ total net sales in the past fiscal year, which ended in late January, according to company filings. That’s a jump from $15.7 billion or roughly 5% of Walmart U.S.’ total net sales in 2019.
Online sales for Walmart U.S. rose by 17% year over year in the most recent holiday quarter and 12% year over year for the past full fiscal year.
The retailer is expected to share its latest forecast and strategy at an investor day this week in Tampa, Florida. More