Morning Brew Daily - Lordstown Motors Goes Bankrupt & Why is 'Barbie' Everywhere Right Now?!

Episode Date: June 28, 2023

Episode 91: Neal and Toby explain why Lordstown Motors has filed for bankruptcy and is suing Foxconn for $170 million. Plus, how the 'Barbie' marketing team has taken over the world with a sea of pink and product collabs. Also, Ryan Seacrest is your new host of 'Wheel of Fortune' after Pat Sajack steps down following more than four decades on the show, and which company is offering interns $120 an hour. Finally, there is only one state left where you legally can't pump your own gas and... The lawsuit involving a fridge, a cleaning crew and the loss of 25 years of research worth over a million dollars. Listen to Morning Brew Daily Here: https://link.chtbl.com/MBD Watch Morning Brew Daily Here: https://www.youtube.com/@MorningBrewDailyShow Learn more about your ad choices. Visit megaphone.fm/adchoices

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Terms and conditions apply. Good morning, Brew, Daily. Show. I am Neil Fryman. And I am Toby Howell. On today's show, an EV startup that was supposed to save a Rust Belt town goes bankrupt. And speaking of landing on bankrupt, Wheel of Fortune has a new host. Then, Neil, run from it, hide from it.

The Barbie movie will find you. We'll tell you all about why we're all living in a Barbie world this summer before finishing up with a story about an annoying beeping sound, a cleaning mishap in 25 years of destroyed scientific research. It's Wednesday, June 28th. Let's ride. All right, Neil, real quick off the top of the show, we have another wildfire situation brewing. Chicago actually had the worst air quality in the world yesterday, but you honestly wouldn't even really know it from scrolling through social media.

So I have two theories as to why this wasn't as big a deal as the NYC wildfire situation of a few weeks ago, but I'm curious to hear your thoughts on it. Well, go ahead. You just had two theories. All right, my theory is one, it just wasn't orange enough, which is the big thing that leads to a bunch of social media pictures. This was more of a gray haze, so we weren't getting like those classic social media shots. And then obviously, like New York is way too obsessed with itself. That's true. Chicago's a little more self-aware.

This smoke has drifted all the way to Europe now, Portugal and France. And it's coming back to New York today, I think, and tomorrow. So you will definitely hear about it. Chicago does have something going for it, though. and that's the bear season two. Everyone is talking about the second. Have you seen this? The cooking show, the cooking show.

The cooking show. I went immediately to the Chicago Bears. No, no, no. The Bear Season 2, the show about the chef. I'm just seeing amazing things about season two. It's on Hulu, so you should check it out. It's very stressful too, right? I think the second season is less about the kitchen

and more about their emotional lives, which is really striking a chord with people. So personally, I didn't finish season one, so I will have to do that. It's becoming a theme for you, by the way, with the Titanic movie. I can't finish stuff. I can't finish a podcast, though, but let's start. An EV startup that was supposed to save a struggling Ohio town is now in need of saving itself.

Lordstown Motors filed for bankruptcy protection yesterday after it failed in its quest to become the Tesla of pickup trucks. It's starting a process to sell its remaining assets and pursue litigation against its largest shareholder, Foxcon, which it accuses of breaching. their investment contract by not plugging the company with enough money. Why is this story important? Well, just a few years ago, Lordstown was seen as the savior for an Ohio town that was down on its luck. The town, which is also named Lordstown, found itself without its largest employer when a GM factory that had been operating there for decades closed down. Lordstown said, have no fear. We are here and occupied the plant. The deal was big politically and hyped by President Trump as bringing Carmen. making jobs back to the Rust Belt, but Lordstown ran into manufacturing issues and it only delivered two of its endurance pickups to customers in the first three months of this year.

Yeah, we've been talking about Lordstown for a while because, one, it was emblematic of the SPAC boom of 2020, where you could just take a company public through a reverse merger with an existing company. So that was a big thing. And then, yeah, as you mentioned, this was a symbol of Rust Belt revival for President Trump. There's a video of him with the CEO of Lordstown. motors out in front of the White House with an endurance pickup truck. So this was really, he was really hanging his hat on this. And it's been a long saga ever since. They just couldn't get these things made. And I think part of it was they were pioneering this new type of EV, which had an electric motor in each wheel. So it was like ultimate four wheel drive. And it just never really

worked out for them. And you see now it's been a long slow decline into bankruptcy. There was a lot. Do you remember in 2020 and 2021 when there were so many EV startups going public via SPAC? I mean, I haven't heard of these companies. There was a rival canoe, which I do remember actually. Lordstown, Lucid and Nicola, which are more familiar names. They all went public via SPAC and they're getting crushed right now. I mean, Lordstown shares obviously are down to $2.29. But at their peak in 2021, they were at $400 a share.

Crazy. And then Rivian is down. the stock is down 90%. These companies got crushed by the supply chain issues of a pandemic. I mean, making a car is hard enough. And then when you can't get your components and you're burning through cash and can't sell them and make any money, they just kind of ran into a buzzsaw. Yeah.

And then let's talk a little bit about Foxcon, which is this iPhone manufacturer. They assemble iPhones in China. But I'm kind of not on Foxcon side on this because they withholds, they withheld some investment from LOR. Lordstown because of an agreement that said that it's a breach of contract if Lordstown's stock falls beneath $1 per share. But then Lordstown did this reverse stock split, which bumped their share price up to $15. So it always felt that Foxcon was trying to wiggle out of this deal on a technicality. And Lordstown's like, all right, if you care so much about this arbitrary number, we'll just

reduce the amount of shares outstanding. And now our stock's higher. Right. It was like the whole thing is slimy. They were trying to wriggle out of a deal that doesn't look like it's going to pan out. So Foxcon, I don't think, comes out of this looking too great. They also did the same thing in Wisconsin, kind of, where they were going to build this huge LED plant. And they never created the jobs that were necessary and did not make any friends in Wisconsin.

Yeah, Foxconn versus the Rust Belt is the battle of the century. Lordstown is going to be okay, though, because Lordstown Motors, I know this gets a little confusing, sold the plant to, Foxcon in 2021. And so Foxcon has this plan and they're still making stuff. They're going to make cars for Fisker, which is another EV startup. I haven't even mentioned yet. You know who comes out of this looking real good? Who?

Elon Musk. He does. He does. He literally started an EV company and took all of the production in-house and, you know, went through production hell, which is what these companies went through. And he created a giant company. But we're seeing right now just how start, just how hard it is to start a, start a car company in this day and age. Do you see any of these,

you know, competing with Tesla or making it any of this crop? Eventually, like, if you can make a good product still, which that's the big if, but there's always room for different competitors as long as you can, yeah, make something that works. So you need patient investors. That's the thing. And a lot of money. And a lot of money. Yeah. I mean, investors, they look at Elon Musk and they're just like, okay, we trust you. You've built other companies before. And then these other people, Fisker and Rivian and Lucid are kind of more question marks than Elon. Yeah. All right, Neil, let's move on to our next story.

You know how they say that the devil works hard, but Chris Jenner works harder. Well, Barbie's marketing team works harder than both of them. Everywhere you look this summer is Hot Pink here, Margot Robbie there, Barbie Corp here, Ryan Gosling there. It's been an inescapable and impressive marketing rollout. So I'm just going to quickly run down some of the stunts that has led to Barbie taking over this summer. So on Monday, Airbnb listed a real-life Barbie Malibu Dreamhouse that is 100% Hot Pink, comes with a slide, and is hosted by just Ken. Xbox is making a Barbie-themed console.

Aldo drops some pink shoes that come in packaging that looks just like the toy. Forza Motors, which is this realistic driving game, added Barbie car to their lineup. Hom sick candles made a Barbie-scented candle. And Pinkberry rolled out a bright pink flavor. dedicated to the famous doll. That sounds good. Looks delicious. So like I said, Barbie is freaking everywhere, and it's leaking into the real world.

More people are decorating their homes in the Barbie core style, which consists of a palette that is primarily made up of hot pink. And according to the New York Times, searches for Barbie aesthetic bedrooms on Pinterest, jumped 1,135% from May 22 to May 2023. It's the summer of Barbie, Neil. So I was going to ask you a question. You dyed your hair. you know, blonde a few weeks after the trailer came out.

It wasn't predicated. Are you participating in the Barbie summer? The only way I would feel like I am truly participating is if I went hot pink, which no, you never know. Like, I could be struck by after seeing the movie and go hot pink. But I will say that Google searches for blonde hair dye more than tripled after this trailer came out. And when the trailer came out, they also released this selfie generator that took over social media.

And I still see it to this day. People are using this Barbie selfie generator. Honestly, this is the cultural event of the summer. We haven't even talked about the songs that are on the soundtrack, right? Didn't Cardi B release a, like a new version of Barbie and then Duolipa's song? And then Nikki Minaj and Ice Spice. Oh, that's it. I confused Cardi B and Nicky.

They just released a song. Yeah, called Barbie kind of over the original Barbie soundtrack. Yeah, Nikki Minaj is like most closely associated artists with Barbie in the world. So it makes a lot sense. I forgot this was a movie. I know. I wonder if anyone's going to actually see this movie. That's the funniest part is no one knows what the movie's really about.

Like, the trailer gave away no hints. So it's, we're literally just being, we're in on the vibes of the movie more so than like the plot. And it does have a stacked cast. You got Will Ferrell, Michael Sarah, Doolipa, Helen Mirren's in there, Kate McKinnon. Yeah, I know. So I'm going to go see it for sure. The other funny part is that the Barbie movie is just completely tied to this other movie Oppenheimer because they come out on the same day. So you're seeing these hilarious memes of like what's the Oppenheimer like marketing budget going to do to like the Barbie Dreamhouse?

So which one are you seeing in first, Neil? I am seeing Oppenheimer. I have no plans to see Barbie. I don't think it's going to be like an actual movie. Do it for the content. But Mattel, to bring it back to business, Mattel is really hoping that all of these licensing deals. pay off because it is kind of in a hard spot right now. Revenue dropped 22% in the first quarter, and it lost $15 million. Things are not going great, and Barbie is its biggest line.

Yeah. So it's really hoping that all of these will drive actual sales for toys. It may happen. It has to happen. Like, it is everywhere. So I'm very bullish on Mattel and these Barbie figures. I can't wait for next year to figure out, like, what the year-over-year growth is. Plus, the biggest trend in toys right now is kiddolting. Right. Adults love the toy. We're all going back to our youth and buying toys and coloring books and Barbie. I mean, Barbie came out in 1959.

And it still has incredible cultural cachet. But it's true that kiddolting, which is, I can't believe I'm saying this word, it's very cringy. But kiddults, which are people 12 and over, the biggest driver of growth in the toy industry, and they account for one-fourth of all toy sales annually. I'm getting myself a ripstick after this. I miss that thing. All right. We're moving on from Barbie, which is very difficult.

But the search for the new Wheel of Fortune host is over, and it had none of the drama of Jeopardy. Maybe that's because it's a worst show. But that's neither here nor there. Anyway, America's golden child, Ryan Sechrest, was named the new host yesterday. Just two weeks after Pat Sejack, the show's host of more than 40 years, announced his retirement. Seacrest is joining a show that's declined from its heights, but, still is a cultural tour to force at its peak in the 1980s, Wheel of Fortune commanded a nightly audience of more than 40 million viewers, including my grandma.

Now that's down to about 8.6 million, which is not too shabby and just behind Jeopardy's 9.1 million. Plus, it goes viral every once in a while when someone messes up a solve so badly. It is hilarious. Is this a good move? I think it's a great move mostly because Ryan C. Chris, you're like, oh my gosh, how can he do so much? But this is the goat of all hosting jobs.

You only have to, there's reports that Pat Sejack was only working four days a month. And obviously those are probably action-packed days. But he was bringing in reportedly $15 million a year. So if I'm Ryan Sechrist, I sign up for that in a heartbeat. Like you, again, you take over this cultural institution. You're not working a whole lot more. And you're getting paid a pretty penny. So I think this just is another check on Seacris's list of greatest hosts of all time.

Whoa, greatest host of all the time. Am I writing that down for you? Jehoast, yeah. But the tea here, the best tea is about Vanna White. Right. Crazy. Crazy. So Vanna White apparently has not gotten a raise in 18 years.

She's being paid $3 million a year compared to Pat Sejax, $15 million. Yeah. But they joined the show at the same time. So Van Nu White is lawyering up. She hired a very super high-powered lawyer, and she's trying to grab her bag. Yeah. So all power to Van Nukeh. It's crazy.

People freaked out. I know. Well, deservedly so. She's more iconic, I would argue, than Pat Sejack in terms of cultural cachet if we're talking about that. Because, yeah, she is the person that you most associate with Wheel Fortune in my mind. Yeah, and she was honestly in the running to be the host and a lot of people kind of wanted her to be the host. That would have been fun, honestly. Okay, here's my question for you on Wheel of Fortune I just thought of. When you, say you're on the show. Okay. Would you be very conscious about how much force you were applying to the wheel to land on a particular number? I've always wondered that. I'm sure they get coaching that if we see you trying to finesse it, then really? Yeah, they'll get mad because, yeah, it doesn't spin that fast and I'm sure you could

figure it out. So I'm pretty sure, and my friend's dad actually went on Wheel of Fortune and you get like a little bit of coaching that says if we see you trying to finesse the wheel, we get that at a fun. I thought you could like, I thought there was a minimum rotation. Right, right. Stuff like that. Number of revolvers that you need, or revolutions that you need to happen. The old gate on wheel of fortune, to immediately get kicked off for trying to do I mean, you've got to game the system. That's how you win on game shows. All right, Neil, before we jump into the next story,

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One size absolutely does not fit all. Get a quote or find an agent today at thehartford.com slash small business. Neil Wall Street has had a bit of a weird year with a couple of banks collapsing in the market doing kickflips every time Jerome Powell speaks. But one integral part of the financial sector is having a banner year. Interns. Median intern pay for those working in finance rolls jumped 19% of the top 16 firms according to this site Levels. FYI. That pay bump got even higher at hedge funds where hourly pay pay is up 20.5%. 29% year over year. So how much would a median hedge fund internship pay a fresh-faced college intern? $111 an hour, which comes out to $4,400 in pre-tax earnings per week. The creme de la crem of internships that align your pockets and your resume is actually

at Ken Griffin's Citadel, where interns are getting paid $120 an hour. That led to Citadel receiving 69,000 applications for, where it's 2023 internship. I was one of them. Back, yeah, as you should be, that's my next line, Neil, is that we're in the wrong career. Let's go be interns for freaking Ken Griffin. Oh, my God.

This is crazy. It's huge. It's $230,000 a year. I think I calculated it out. Disgusting. To me, that's not an internship. Yeah. That's literally, you're basically, that's a full-time job.

And that's what the whole point of this is, is that hedge funds and investment banks want to lure top talent. And even though they've had a rough year and we know that. Goldman and a bunch of other banks have laid off staff, there still, still have plenty of money to hire top talent. And even in a downturn, you still need superstars. Right. So they've got a piggy bank stashed away to find superstar interns that could eventually become

their superstar bankers and make huge deals in the next few years. Yeah. And there's definitely this kind of exodus away from tech and back into finance because, I mean, if we go over the past year, over 200,000 tech workers have been laid off. and they have to kind of go somewhere. So there's this renewed interest in finance as one of those prestige careers again. Like for a while, tech was the new finance, honestly, where like you want an internship at meta, at Google, at these big tech companies.

And now that's Luster has kind of rubbed off a little bit. And so you're seeing a return to the norms of finance being like that prestige culture that you want at the college intern. It's like a value stock. Right. Right? Like McDonald's or Johnson and Johnson. It's like, it's always going to be there. It's probably going to grow. It's very stable. So when things get a little uncertain, I'm going to maybe go back to finance. But also most finance jobs now, not most, but a lot of them are tech. Right. So it's not even your problem, you may not even be doing anything different. I mean, at some banks, 40% of all open rules are AI roles. J.P. Morgan has like 3,500 AI adjacent roles open. So if you work at meta, you can be like, okay, they just do the same thing at JP. Morgan, so it's not that big of a deal. I'm applying, Neil, like, just just to see if I could get it.

So much money. All right, we're moving on from finance to gas. It's the end of an era in Oregon, and no Damien Lillard is not leaving the trailblazers. Last week, the state's lawmakers ended a ban on self-serve gas

that's been in place for 72 years. Now, Oregonians will be allowed to pump their own gas. Oregon was just one of two states that still required attendance to fill up your tank for you. New Jersey, of course, is the final holdout for full service. And for the rest of this story, I'm going to say gas in solidarity with New Jersey. This was a long time coming. Fuel companies had been pushing for self-serve in Oregon for a while because of staffing shortages at gas stations.

They said that half of the pumps at gas stations were closed anyway because there wasn't anyone to man them. drivers too are probably ready for a change because they will no longer have to wait in lines for a pump that had no attendant. So this to me seems like the National League finally adopting the DH. There was just total inertia and status quo bias because it had been going on so long. So my question is, what is going on in New Jersey? I know. I see the argument. It's very hard to say, like, we want to get rid of all these.

I mean, it's not a ton of jobs. But whenever you're on the side of like, let's get rid of jobs, it's always a tough sell. which is funny, though, because 49 other states obviously got it done. But honestly, you don't want to get rid of jobs, but you also don't want to pay these gas station workers more. And so you're kind of in a rock and a hard place. Like, yes, keep the jobs, but then if you want them to still have jobs, pay them more, then you'll have more people doing them.

So it is crazy that we're, that I think a lot of people, if they haven't gone on like a cross-country road trip, never would have known that this existed in New Jersey and Oregon. So it's kind of good that Oregon's sunset. it in my opinion. Full service has kind of an interesting history because gas stations originally pushed for full service in the early days because it was a profit center because you would come in, they would pump your gas and they would also change your tires, change your oil, wipe your

windshield. It was kind of this big operation. Yeah. Well, and it was seen as dangerous too. That's why there was a law against pumping your own gas because gas stations in the early days, like that's a flammable thing that you're putting in your car. So that was like one of the reason it was regulated in the first. Right. And that's why there's this 1949 act from New Jersey called the Retail Gasoline Dispensing Safety Act, which is still in effect, obviously. And it cited fire hazards and exposure to toxic fumes, particularly in the case of pregnant women, as justifying full service.

I'm just getting, I'm getting confused with them. I'm saying full service and self-service all the time. No, full service. So, but what changed was that the cars had to be serviced at dealerships. So that kind of sucked away all of the profits from gas stations. And then they were like, let's just go volume, right? Like we're not going to make money on doing all of the bells and whistles. Let's just get as many people as possible into our gas stations. So that's kind of what happened.

New Jersey is the final holdout. I don't think it's going to change soon because there was a recent poll said that 73% of New Jerseyans prefer to have having their gas pumped for them. And the governor is like, I'm not touching that. That is the third rail of politics in New Jersey. It's just a part of our culture. We're just not going to touch it. But before the show, Toby and I decided to rank our top three gas station experiences for all the people in Oregon who are about to experience this for the first time. Absolutely.

Well, hit me with yours first. All right. I will go, number one, the smell. Beautiful. Oh, my God. It smells so good. Don't sniff gas beams, by the way. We do not endorse that.

It does smell good. And a lot of people can corroborate that. The second one is taking your finger. off the nozzle at a round number. Never done it before. Really? I can't do it. It's like spinning the wheel and wheel of fortunes.

Oh, I'm really good at it. Hit me at the 20. But the problem is if you go a little over, then you're just another 10 bucks is gone. Exactly. And then the final one is the sound of the nozzle clicking when it's full. Very, it's a good feeling. Like, it's right out there with taking your ski boots off at the end of the long ski day as one of the more satisfying things. All right, Neil, that is a great gas station roundup.

Let's head to our final story. it takes us to the halls of Rennesler Polytechnic Institute, where there's a lawsuit brewing between a research lab and a cleaner who thought he was just doing his job. So this research lab had 25 years of specimens stored in a freezer set to minus 80 degrees Celsius. So something went a little bit amiss in that freezer, so an alarm started beeping, signaling that the temperature had risen just a little bit. But this was in 2020 during the middle of COVID.

So there is no way for a repair to go through in time. And so they put a note on the freezer saying, this freezer is beeping as it is under repair. Please do not move or unplug it. No cleaning required in this area. That was in all caps, by the way. But along came a cleaner who heard that annoying beeping sound and shut off a breaker that led to the freezer.

By the time the scientists noticed the temperature had risen 50 degrees and the samples were destroyed. Now the school is suing the crime. cleaning company for failing to adequately train their employee. Whose side are you on here, Neil? I'm on the researcher side. Can you imagine working on something for 25 years? Brutal. And you hadn't seen it to completion. And then someone flicks a switch and something you'd been working on for, you know, probably about half of your life. Life is gone. I know. I don't know what that's like. You just retire. There's real money on the line here, too, because the researchers

estimate that it'll take at least a million dollars to start to recreate the experiment. And then honestly, the cleaning company had a one and a half or $1.4 million contract with the school. And so this lawsuit has a couple million dollars on the line on either side. But yeah, just so. You said you're on the cleaner side. I know. Well, because I'm on the cleaner side because he thought he was helping. He heard a beeping noise.

And he also said he thought he was turning the breaker switch on. And so he was like, oh, maybe the breaker switch. spin off. Let me flip this on. So, I mean, it's a cleaner. Like, they, at the end of the day, I do think they're just doing their job. And I, and I sympathize with someone who hears an annoying beeping noise. Sometimes all you want to do is fix it. There's nothing worse than that. As good as gas station smells, beeping noises are annoying. That is our show. Thanks for listening and watching everyone. Hope you have a great Wednesday. If you want to get in contact with us, our email is morningbrewd daily at morningbrew.com. Let us know what your favorite gas station experience is. Huge shout out

to our crew who put the show together. Emily Miliron is our editor and producer. Samantha Velas and Raymond Lue are the associate producers. Yucenoa Ogu is our technical director. Billy Minino is on audio. Hair and makeup is upset about how their long-time client, Vanna White, has been treated. And frankly, I agree.

Devin Emery is our chief content officer and our show is a production of Morning Brew. Great show today, Neil. Let's run it back tomorrow. All. Pay off your home. Travel for life. Drive a Ferrari.

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