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BUSINESS & TECH.
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TECHNOLOGY | B6
THE WALL STREET JOURNAL.
Friday, April 10, 2015 | B1
BY CHRISTINA ROGERS
State and local officials in
Ohio are proposing to fund a
new factory for Fiat Chrysler
Automobiles NV in Toledo, an
unusual incentive that would require hundreds of millions in financing, according to people familiar with the plans.
The proposed plan is the latest attempt by public officials in
the state to secure production of
the iconic Jeep Wrangler, which
has been built in Toledo for decades.
Negotiations on the plan are
continuing between officials and
the auto maker, and other financing proposals are on the table, the people said.
Fiat Chrysler Chief Executive
Sergio Marchionne has said the
next generation Wrangler, due in
2017, likely would require either
a new or significantly updated
factory because the capacity of
the current one is constrained.
The costly overhaul is necessary
to convert the Wrangler to an
aluminum body, which Fiat
Chrysler needs to lighten the vehicle and improve its fuel economy.
Building a new auto factory
can cost between $200 million
and $400 million, say industry
experts, excluding tooling and
other equipment required for
production.
The proposed new building’s
cost could potentially be financed by government-backed
programs, the people familiar
with the plans said, allowing
Fiat Chrysler to repay the money
through a lease-to-own arrangement.
A spokeswoman for the Toledo mayor’s office and a
spokesman for Ohio Gov. John
Kasich declined to comment.
Toledo officials delivered
their pitch to the U.S.-Italian
BILL PUGLIANO/GETTY IMAGES
Ohio Offering to Fund Jeep Factory
The Jeep Wrangler has been built for decades in Toledo. A coming
model with an aluminum body will require a new or updated factory.
auto maker in March, hoping to
persuade Mr. Marchionne and
other Fiat Chrysler officials not
to move Wrangler production to
another state. City officials also
have assembled nearly 100 acres
of land to offer Fiat Chrysler, but
have worried that the land alone
wasn’t enough.
The factory offer, which has
been made in other U.S. industries, is viewed as a way to at-
tract or retain manufacturing
jobs amid new assembly work
moving to Mexico and rising imported auto-parts squeezing out
U.S. production jobs.
Tax and other incentives have
been used to lure new auto factories or new investment in
older plants in Michigan, Tennessee and other states.
Auto companies traditionally
finance and own the factories
where they build cars and
trucks, leaving states or municipalities to provide funding for
worker training, reduced sales or
property taxes, or provide land.
It is unclear how development
would be financed, what taxes
would be levied, and how ownership would be structured, people
involved in the negotiations said.
One way Fiat Chrysler could
pay back the initial public investment would be to allocate a
portion of its earnings from each
Please see JEEP page B2
The Web’s Most Maniacal Bargain Hunters
Hardcore Amazon sellers scour stores for ‘Frozen’ dolls and cans of pumpkin—aided by apps to calculate costs
BY GREG BENSINGER
Price Check
A few times each month,
Anne Zarraonandia drives from
her Mill Valley, Calif., office to
a nearby retailer such as Walgreens or Toys ’R’ Us to scout
for bargains. Armed with a
price-checking app on her
iPhone, she trawls the aisles,
filling her cart with toys, electronics, sporting goods and
packaged food.
Ms. Zarraonandia, 58 years
old, isn’t looking to save a few
bucks for her family. Rather,
she is looking for items she can
resell on Amazon.com Inc.—at
a profit.
A price breakdown of recent items
Anne Zarraonandia purchased in
stores and resold on Amazon:
Product: Ever After High
Dexter Charming doll
Retailer: Ross
Resale price: $32.63
$14.12
$9.99 $8.52
Profit
Original
cost
Amazon’s
take
Cross Aventura Collection fire
engine red pen
Retailer: Tuesday Morning
Disney Brave Merida insulated
lunch tote
Retailer: Toys ‘R’ Us
Resale price: $17.00
$9.80fit$1.98 $5.22
RAMIN RAHIMIAN FOR THE WALL STREET JOURNAL
Traditional retailers fret
about the practice they call
“showrooming,” where smartphone-toting shoppers scan bar
codes in their stores, then seek
better deals online. Ms. Zarraonandia, and thousands of others like her, engage in what
might be called “reverse showrooming,” looking for goods
that are cheaper in stores than
online.
Industry insiders call the
practice retail arbitrage. It is
more art than science, because
prices are often lower online.
Tricks of the trade include
scoping bargain racks, shopping on senior-discount day,
buying unusual sizes and anticipating high demand. Software
developers offer price-checking
applications that help calculate
potential profit, after shipping
costs and online commissions.
Ms. Zarraonandia once sold
$2 canned pumpkin from Safeway for $13 each ahead of
Thanksgiving, when a supplier
fell behind on production. She
estimates that she sells about
$30,000 worth of goods annually on Amazon, generating a
Please see RESALE page B5
Resale price: $22.98
$6.87fit$9.99 $6.12
Anne Zarraonandia says she resells about $30,000 worth of goods annually on Amazon.com.
Dubbed a ‘Mother of
the Internet,’ Lynda
Weinman sold her
firm for $1.5 billion.
in the mid-1990s, calls her “a
mother of the Internet” who
was the first to categorize the
16 colors used in Web design—
a critical advance when many
websites were painstakingly
hand-coded in HTML.
Thanks in part to her books,
Ms. Weinman “was popular
Source: Anne Zarraonandia
with the online dork community” of developers and designers in the late 1990s and early
2000s, said Mr. Pirouz.
She and Mr. Heavin founded
a continuing education school
in the resort town of Ojai, Calif., where they taught courses
on Web development and
filmed instructional videos on
VHS tapes.
When the online courses
first launched in 2002, they
had only 30 subscribers the
first month, Ms. Weinman said
in a 2012 speech at the Art
Center College of Design.
Now, the company says its
courses reach over four million
people, though it wouldn’t disclose the number of subscribers.
“Lynda just wanted to share,
which was the coolest thing,”
said Mr. Descher, who helped
equip the Ojai classroom with
computers during his time
working at Apple Inc., and later
consulted for the company.
When rainstorms would
wash out the road to Ojai, she
would put up stranded vendors, teachers and employees
Please see LYNDA page B2
BY REBECCA SMITH
AND CASSANDRA SWEET
A California regulator fined
PG&E Corp. $1.6 billion for a
deadly natural-gas explosion in a
San Francisco suburb in 2010,
marking the largest penalty ever
levied against a utility in the
state.
Despite the hefty judgment,
California’s Public Utilities
Commission isn’t finished with
PG&E. The commission’s members now want to open a new investigation into the safety culture at the San Francisco utility
after finding that it neglected its
vast network of gas pipelines for
decades.
The blast, which killed eight
people and leveled houses in San
Bruno, Calif., was caused by a
poorly maintained pipeline with
faulty welding work that dated
back to the 1950s.
Members of the Public Utilities Commission voted unanimously Thursday to fine PG&E
for 2,425 violations of federal
and state safety rules. The commission is also forcing the company to return $635 million it
collected from its customers for
pipeline improvements that were
never made or were mismanaged. The combined fines and required credits to consumers
come to more than $2.2 billion.
The commission cited PG&E’s
shoddy pipeline construction,
substandard safety testing and
poor management of its operations in densely populated cities
as reasons for the fatal incident.
“We are deeply sorry for this
tragic event,” said PG&E Chairman and Chief Executive Tony
Earley, adding that the company
is working to complete important safety work. “We do not expect to appeal today’s rulings.”
The state commission levied
the biggest fine it could without
jeopardizing the utility’s credit
rating, said Michael Picker, chief
of the California PUC.
San Bruno Mayor Jim Ruane
said city officials support the
fine, but are disappointed the
commission didn’t create a new
pipeline-safety watchdog group.
“This explosion was a preventable disaster,” he said.
The final penalty was $200
million more than a $1.4 billion
penalty proposed last year by
PUC hearing judges. The commission also redirected where
PG&E’s fines will be spent. Instead of $950 million going into
California’s general fund, the
state will get $300 million. PG&E
will refund $400 million to its
customers in the form of a credit
on their monthly gas bill, with
the rest of the money going toward pipeline safety upgrades at
the company.
In separate legal actions,
PG&E has already paid out millions of dollars to San Bruno and
accident victims. It also faces potentially huge penalties in connection with federal criminal
charges.
FAA Calls Out United’s
‘Systemic’ Hazards
BY ANDY PASZTOR
AND SUSAN CAREY
Federal aviation inspectors
stepped up oversight of United
Continental Holdings Inc. two
months ago, citing risks from repeated violations of mandatory
pilot qualification and scheduling requirements.
The Federal Aviation Administration’s decision was spelled out
in a Feb. 6 letter from a highranking agency official to
United’s top safety officer.
The letter, which called for a
thorough overhaul of parts of
United’s process for qualifying
crew members, represents the
most detailed indication yet of
FAA worries about United’s internal safety oversight.
The FAA letter, viewed by The
Wall Street Journal, followed a
safety warning sent in January
to United pilots by the airline’s
top safety officials.
That warning in January was
prompted by four recent and
separate “safety events and near
misses.”
P2JW100000-4-B00100-1--------XA
Composite
At a time when some of the
biggest deals in technology
make overnight billionaires out
of 20-something startup founders, the story of Lynda Weinman’s success may come as a
welcome counterweight.
A “mother of the Internet”
and author of some of the earliest books on Web design, Ms.
Weinman has spent two decades teaching scores of
would-be Web experts through
lynda.com, the e-learning site
she co-founded with her husband, Bruce Heavin, in 1995.
The popular training website
now offers courses in design,
technology and business and
was acquired by LinkedIn for
$1.5 billion on Thursday, a deal
that cements the 60-year-old
Ms. Weinman as one of the
most successful entrepreneurs
in e-learning.
“It’s one of those overnight
success stories that wasn’t
overnight at all,” said Raymond
Pirouz, who got to know Ms.
Weinman shortly after graduat-
ing from Art Center College of
Design in Pasadena, Calif.
Before starting lynda.com in
1995, Ms. Weinman worked as a
special-effects animator with
credits for RoboCop 2 and Bill
& Ted’s Excellent Adventure,
and as a professor of the nascent field of digital design at
Art Center.
There, she discovered a
knack for teaching, and wrote
one of the first books on the
emerging field of web graphics
that became immensely popular among do-it-yourself designers.
“She is a born teacher,” said
Lorne Buchman, the president
of Art Center, where Mr.
Heavin is on the board of trustees. “I think that drives everything she does, whether it is
the publication of a book, or
setting up an international
business.”
Ms. Weinman’s situation is
also rare in that few, if any, of
her associates have negative
things to say about her success.
Mike Descher, a friend of the
couple who met Ms. Weinman
Resale price: $7.98
$2.50fit$1.39 $4.09
THE WALL STREET JOURNAL.
A 60-Year-Old Earns Internet Glory
BY RACHEL EMMA SILVERMAN
AND NIKKI WALLER
Taylor Swift’s CD named ‘Red’
Retailer: Walgreens
Utility’s
Fine for
Explosion:
$1.6 Billion
The alleged infractions in the
FAA letter don’t involve those incidents, but rather cover areas
such as pilot records and crewmember qualifications.
The letter doesn’t specify the
violations, but those terms could
mean issues like aviators not undergoing requisite, periodic
check rides overseen by examiners within the required time, or
the airline lacking records to
document completion of such
proficiency checks.
The letter also cites problems
with scheduling, which could include flying longer than the FAA
allows. The FAA approves airlines’ systems governing such
matters, and carriers are required to comply with those
rules.
The No. 2 U.S. airline by traffic said it provided the FAA “a
full outline of our corrective actions” on March 25, and considers the situation “resolved.”
An FAA spokeswoman said the
agency is evaluating the airline’s
response. She declined to elaboPlease see UNITED page B2
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