From unearthing crypto-billionaires to exposing financial shenanigans, in chronological order, Forbes’ 18 greatest hits of 2018.
Forbes’ First List Of Cryptocurrency’s Richest: Meet The Secretive Freaks, Geeks And Visionaries Minting Billions From Bitcoin Mania
The craziest bubble ever has created billion-dollar fortunes. Meet the freaks, geeks and messianic visionaries who scored cryptocurrency riches.
When Forbes set out to find the richest people in crypto, we knew the technology’s decentralized nature—and the wild valuation swings—would make it a tall task. But with blockchain technology here to stay, it’s safe to say some of these names will be around for a long time to come. “We had to draw on a wide range of experience and skills, from our decades-long work valuing private companies to new tricks for analyzing digital wallets,” says Staff Writer Jeff Kauflin. “It was the most challenging reporting I’ve ever done.”
The American Dream is alive and well on Wall Street thanks to Robert Smith, the richest black person in America, who has figured out a way to reengineer both private equity and enterprise software—and used this secret playbook to build a $4.4 billion fortune.
“I spent two years trying to get Robert Smith to speak with me about his business,” Senior Editor Nathan Vardi says. “He was clearly the most interesting story in private equity, but he was reluctant to speak. He finally agreed to meet me in Miami on a Saturday in January with his partner, Brian Sheth. Once we finally got to talking, Robert just went on and on. It was one of my favorite interviews in 20 years as a reporter.”
Angered and frustrated by tech’s suffocating old boys’ club, a group of elite venture capitalists are channeling emotion into action. Their weapons—investing and entrepreneurship—provide a blueprint for how to transform any crusty industry from the inside out.
“When I first got a cryptic email from one of the founders of All Raise in December 2017, the group didn’t have a name, and no one knew who was involved outside the group, but I still got that tingling any reporter knows when they sense they’re on the track of a special story,” says Associate Editor Alex Konrad. Adds staff writer Biz Carson: “It wasn’t until we sat down with group and shadowed them that I realized both the depth and scale of their ambitions.”
Matthew Mellon’s death in Mexico raises many unanswered questions, including what will happen to the estimated $500 million of XRP digital currency he owned. “I am trying to live a responsible life,” he told Forbes earlier this year.
“When I spoke to banking heir Matthew Mellon in January 2018, it was clear that his large holding of the cryptocurrency XRP made him feel vindicated. He told me he was fighting his substance-abuse demons and was proud to have personally earned a fortune,” Vardi recalls. “Three months later, Mellon was dead. He died in Mexico, where he was experimenting with hallucinatory therapies that are illegal in the U.S. It was sad reporting on the days leading up to his death.”
Quietly, without fanfare, an under-the-radar foundation in Silicon Valley has grown to become larger than household names like the Ford Foundation and the Rockefeller Foundation. But despite the outward appearance of success at the charity, which has focused on growth in assets above all else, inner turmoil abounds.
“The sad irony of this story is that the Silicon Valley Community Foundation was set up to support groups helping those in need in the Valley, and it ended up being an awful place to work for so many people,” says Assistant Managing Editor Kerry Dolan. In June, after substantiating claims of sexual and workplace harassment by the charity’s number two executive that helped lead to an “unhealthy workplace environment,” the foundation’s board announced that CEO Emmett Carson was out.
From humble beginnings traipsing through California’s vast forests with his dad to salvaging wood from forest fires, Red Emmerson has built a logging empire by being cheaper and more aggressive than his rivals.
“I spent days driving through public land that Sierra Pacific Industries had logged after a forest fire and couldn’t possibly have prepared for how apocalyptic these areas looked,” Staff Writer Chloe Sorvino says. “It was simply shocking.”
Bill Austin built a fortune from medical devices, then set out on a crusade to help the poor hear. But while he was off hanging with movie stars and rock gods, his company descended into a cesspool of fraud, embezzlement and betrayal. A cautionary tale of a second act to do good—gone woefully bad.
Staff Writer Michela Tindera went to Minneapolis to hear billionaire Bill Austin’s witness testimony against former executives he accused of stealing more than $20 million from his company. “There was hardly a dull moment during his days-long testimony,” Tindera says. “Austin knows how to captivate an audience.” And the story has kept evolving in the months since. Just a few days ago the former president of the company was sentenced to seven years in prison.
Papa John’s founder John Schnatter’s alleged behavior ranges from spying on his workers to sexually inappropriate conduct, which has resulted in at least two confidential settlements.
“The entire story started when I received a tip on Twitter—from someone unaffiliated with Papa John’s—who sent me a link to a 1999 lawsuit against John Schnatter. I figured it was worth a few calls to former employees. I heard enough during those conversations to keep reporting and ultimately reached out to more than 150 people,” Reporter Noah Kirsch says. “After we published, Schnatter resigned as chairman, and two other executives mentioned in the piece have since been pushed out. If nothing else, this story reveals the power of individuals who speak up.”
If even half of the accusations are legitimate, the current United States secretary of commerce could rank among the biggest grifters in American history.
“I’ve been writing about Wilbur Ross for about a year now, covering all sorts of financial shenanigans involving millions of dollars. But a lot of that stuff is hard to understand. I’m convinced this story caught people’s attention because of one simple detail: Former colleagues said the commerce secretary used to steal Sweet’N Low packets. Everyone knows a guy like that,” says Associate Editor Dan Alexander.
Not even 21, Kylie Jenner has built a $900 million cosmetics fortune, with virtually no employees, capital or expertise. This new model of extreme fame leverage is radically reshaping business, culture and politics.
“The Kylie Jenner story involved a lot of driving,” recalls Associate Editor Natalie Robehdemed. “Sixty miles to Oxnard, California, to peek around the laboratories where Kylie Cosmetics are produced. And 30 miles to Kris Jenner’s home for an interview with Kylie and Kris at her palatial white home.”
“Fittingly, I was driving and listening to the radio when I first heard Travis Scott’s (now multi-platinum) single “Sicko Mode,” in which he references the controversy caused by Jenner’s Forbes cover. I did not expect the story to create as much of a stir as it did—I thought folks would be interested by the structure of her barebones business, but the backlash it received from critics who disputed Jenner’s self-made status was fascinating. I think the story sparked a necessary conversation about wealth and status in America and shined a spotlight on the way social media is shaping our economy and society.”
Eren Ozmen and her husband spent the last quarter a century carefully building Sierra Nevada from a tiny, 20-person defense firm into a multibillion-dollar aerospace concern. Now she’s betting their fortunes on the billionaire space race.
“Ozmen and her husband had never done an in-person interview before, but the minute we sat down for drinks the storytelling began. Ozmen worked as a night janitor and sold baklava to put herself through grad school and went on to build a multibillion dollar aerospace and defense company with husband Fatih,” says Staff Writer Lauren Debter. “Their sense of patriotism was what perhaps struck me the most and was the lone reason given for why they have spent three decades equipping the U.S. military and now are helping America reestablish its leadership in space.”
The never-told story of how an unlikely group of billionaires and politicians quietly passed a law that revolutionizes investment in struggling regions—and offers one of the greatest tax-avoidance opportunities in American history.
“I ping-ponged from the heart of Silicon Valley, to the inner chambers of Republican and Democratic Senators, to long neglected neighbors in Charleston, South Carolina, and Newark, New Jersey,” says Senior Editor Steven Bertoni. “The response was as varied and far-flung as the research, drawing questions and curiosity from a diverse range of readers across regions and industries: wealth managers and lawyers, builders and fledging founders—all looking for ways to get into the Opportunity Zone action.”
America’s most innovative—and feared—business leader is coming off a three-year run that has him the richest person of all time. Now he tells Forbes he’s only begun to grow. Corporate America, you’ve been warned.
Forbes’ chief content officer sat down with the richest man in the world to talk Amazon’s unprecedented ascent. Bezos’ innovative growth plan should give every CEO in every field pause: “The market size is unconstrained.”
Millions of tweens play video games on Roblox’s website. That’s not unusual for a social gaming unicorn. What is unusual: teaching kids the rudiments of coding and paying them like entrepreneurs.
“My favorite part of reporting this story was tagging along with a group of kids and their parents on a tour of Roblox HQ. To me, things didn’t look much different than the office of any other software development company—but for the kids, it was like touring Willy Wonka’s factory,” says Associate Editor Alex Knapp.
Exclusive: WhatsApp Cofounder Brian Acton Gives The Inside Story On #DeleteFacebook And Why He Left $850 Million Behind
Facebook’s blockbuster $22 billion WhatsApp purchase instantly made Brian Acton one of the richest people in America. But as with his Instagram peers, his idealism clashed with Mark Zuckerberg’s financial juggernaut, leading to perhaps the most expensive moral stand in history. For the first time, Acton explains why he walked away from $850 million.
“Putting the story together was a stressful process,” says Staff Writer Parmy Olson. “We knew it was going to shine a negative light on the inner workings of Facebook and reveal some new information—for instance, that Facebook misled European regulators about its intentions to link user accounts. But the public reaction was incredible, from dozens of news articles to praise on social media for Brian Acton’s brutal honesty to a public rant from one of Facebook’s top executives. Since then, there have been more revelations about Facebook’s data practices that underscore why our interviewee quit when he did.”
Donald Trump’s White House tenure—and his polarizing politics—has actually dented his net worth. But it’s not for a lack of trying to cash in.
“Ever since Donald Trump entered the Oval Office, the whole country has been wondering whether he was making money on the presidency or not, and this was the first story to really answer that question,” says Alexander. “We dug deep,” adds Associate Editor Chase Peterson-Withorn. “We interviewed nearly 200 of Trump’s colleagues, partners and industry observers since the election. Ultimately we came away with a fascinating—and counterintuitive—result.”
Exclusive: In-N-Out Billionaire Lynsi Snyder Opens Up About Her Troubled Past And The Burger Chain’s Future
At 36, billionaire heiress Lynsi Snyder has already struggled through her father’s tragic death, three failed marriages and a battle with alcohol and marijuana. The devout Christian eventually found stability running In-N-Out, her family’s quintessential West Coast burger chain, and now she’s determined to protect it at all costs.
“Lynsi Snyder rarely lets journalists into her world. I expected her to be a bit guarded. But she opened up almost immediately about what she’s gone through,” says Sorvino. “I was surprised when she started tearing up while speaking about her father’s legacy, but soon realized that’s where her strength lies as a leader—in sharing her vulnerability with others. It’s only made her a stronger president. In-N-Out’s cult following is all the better for it.”
Two decades ago, Joe Liemandt became the youngest member of The Forbes 400 by building a software juggernaut. He’s quietly bigger than ever, with a far darker model.
“Joe Liemandt is the J.D. Salinger of software,” Senior Editor Nathan Vardi says. “He disappeared from public view after being a tech celebrity in the 1990s. But I discovered he had spent the last decade building a massive software empire, buying U.S. software companies and turning them into cash machines by replacing employees with closely monitored foreign contract workers paid by the hour,” says Vardi. “In reporting on Liemandt, I felt I was getting a glimpse into the future of skilled labor.”
- Michael Noer Forbes Staff
Refugees: The Nowhere People
The displaced and their search for identity and belonging; the migrant mother and the forgotten daughters who take the brunt of it all.
There are 65.3 million displaced people worldwide. Of those people, 21.3 million are refugees, the people who belong to – Nowhere. No one knows where they come from, no one knows where they’re going. Ban Ki-moon, secretary-general of the United Nations, has highlighted that: “We are facing the biggest refugee and displacement crisis of our time.” He has called it a crisis of solidarity.
The United Nations High Commissioner for Refugees’ (UNHCR) Global Trends report shows that since 2003, the number of newly-displaced people per minute has increased from just fewer than 10 to 24 persons in 2015. In 2014, the number was at its highest – 30.
The reasons for displacement differ. Increasingly, the main reason is fleeing the source of political or economic conflict. It then becomes difficult to imagine the uncertain reality the many have run to or are left to live through. In theory, international law defines and protects refugees, encouraging the initiation of asylum procedures once they enter a new environment. In reality, the many who have migrated become nomads, often pursuing what becomes a hollow quest for a better life.
Women and girls form around 50% of refugees or displaced people around the world. In Africa, the number of women uprooted by war and unrest is significantly higher. A study published by Hivos International recorded 80% of refugees in Lebanon were women and children.
Along the inner streets of Johannesburg, are ‘foreigners’, women selling fruit, vegetables and sundry items to feed their hungry children and themselves. Whilst walking up to the Department of Social Development, two young female hawkers ran past me, clutching towels in one hand and tacky sunglasses and cellphone pouches on the other, feeling cops. As is the case with hundreds of immigrants, they have no papers.
Another, a lady, sits rubbing her pregnant belly beside a small stall on Eloff Street. She sells hats, wallets, purses and scarves. She is reluctant to talk and asks not to be named. She came to South Africa following her husband escaping the political turmoil in the Democratic Republic of Congo (DRC).
“I came after he had made his way to what we were calling the land of milk and honey… [but] when I arrived in South Africa, it was made known to me that he had left for Canada. I’d come for nothing.”
Abandoned, she was forced to join the informal trading business.
“Life is hard here. We as foreigners are just not free. People don’t respect us and just steal our stock,” she says with little emotion.
After matriculation, she had gone on to acquire a degree in management in the DRC. But today, she is battered and broke.
Often, along their treacherous journey, the women are abused and mishandled by gangs, truck drivers and cops. This is only the beginning of their travails. The constitutional guarantees cannot protect them from the injustices they face. The UNHCR has highlighted that life for a woman beyond her country of origin, becomes a constant battle and one of constant fear and uncertainty.
One of the many dangers is the xenophobic attacks, as has happened in recent times, with South Africans accusing foreign nationals of taking their jobs and over-populating their areas.
The informal trading sector is the main space in which the hateful disputes unfold. But for foreign nationals who have no other hope, informal trading becomes the only option.
Vanya Gastrow, a PhD candidate currently doing research for the African Centre for Migration and Society (ACMS), says one of the biggest challenges faced by foreign traders who come to South Africa is the crime targeted at them.
Other challenges include lack of access to reliable documentation. Says Gastrow: “Asylum seekers and refugee permits often don’t meet documentation requirements for banks, visa offices, and landlords.” She says such foreigners cannot open bank accounts or access loans.
“These permits also require frequent renewals and so many make the decision to just live without them.”
For women though, it is even worse.
“It’s the sexual violence … and extortion, specific dangers that authorities fail to understand,” according to Penny Foley, a volunteer from Australia currently living in South Africa. She highlights that the objectification of female refugees is one of the many symptoms of what has become the de-humanizing process of forced migration.
“The global community needs to change the 20th century understanding of a nation-state and move away from the notion of isolated nationalities”, she says.
“Interestingly though, the problem is not just about changing the perception of what nationals think of foreign nationals, relations amongst refugees need to be established. The fight becomes harder if unity lacks amongst them.”
Women and girls form around 50% of refugees or displaced people around the world.
In the pages that follow, FORBES WOMAN AFRICA speaks to three women from Zimbabwe; what displacement has done to them.
“I just stood at the border in my pink shirt and panties after I had crossed over. I had nothing and I was scared.”
*Tafadzwa Shumba is 42 and came to South Africa in 2008. She was forced to leave her country, Zimbabwe, because of the political instability that made life for her and her family unbearable.
“I was seen to be too neutral so they threatened my parents and tried to kill me for not engaging in their dirty politics.”
The choice to leave was not an easy one to make but as she recalls, “I literally had to take that leap of faith”.
On July 27, 2008, as the world slumped to a financial crisis, Shumba packed a portable bag. She had R300 ($21) that would pay the ‘Guma-Gumas’, a group of men said to assist escapees across the woods to the border.
“I had a passport but those days we were using visas and they were expensive so my only choice was to cross over illegally.” She was the only woman amongst seven guys.
The group began the three-day walk through the forests, the Limpopo River, eventually reaching the border.
Few survive the trek but Shumba’s determination carried her.
“I don’t forget, as we walked through the forest we saw dead bodies. There was a human head lying on the ground with dreadlocks like mine,” says Shumba, running her fingers through her own.
“The Guma-Gumas picked it up and pointed it at us and said if you don’t give us your money you will end up like this head.”
“They took everything, even my pants and left me with there in my pink shirt, panties and shoes.” There was no time to process the betrayal. The trek had to continue.
“Look at me,” she says, as she gestures to her body. “I am nothing. I was a nurse, we would wear crisp white uniform and after work, I had a home to go to.”
Last year, she was involved in a road accident in South Africa that left her crippled.
“I could not even get compensation from the Road Accident Fund because I am a foreigner.”
Now, because of her disability, she cannot work so she takes care of children and sells fruits and vegetables when she is desperate for money. The future is uncertain but she takes “each day as it comes”.
There was a human head lying on the ground with dreadlocks like mine.”
“Coming to South Africa was supposed to be like going to heaven,” says *Tapiwa Moyo who is 22 years old and from Zimbabwe. When her mother, her only caregiver, left her and her younger sister to find work in Johannesburg, she did not anticipate the hardship.
“At one stage we went without food for almost a week and we had to start selling my mother’s belongings to get some money to buy some maize meal.”
Moyo’s mother saw South Africa as the place where she could try and build a better life for her children.
“The deal was that she would work for a few months, save the money and get us passports and visas to move to South Africa.”
The months passed and then they turned into years. When their supply of cash and food ran dry, Moyo, as the older sister, still in her early teens, was forced to work menial jobs washing clothes, selling nuts and chips and eventually having to part with all their worldly possessions to survive.
“I would see other children playing with teddy bears and Barbie dolls or walking in the streets with their mothers and I would just cry because that’s all I wanted to do,” she weeps.
She was 15 when she received word that her mother had finally made enough money to bring her and her sister to South Africa. They had waited seven years.
“When I finally got my passport, it was like my prayers were finally answered.”
The bus ride was one filled with excitement.
“It was a 12-hour ride but I couldn’t even sleep. My life was about to change.”
She recalls the moment she arrived.
“Everything I thought was a lie, South Africa was supposed to be my heaven but it was not.”
She wipes her tears with anger, not allowing herself to be weak.
“I’ve cried about it all for so long you know and nobody cares … the tears don’t mean anything.
My name meant nothing to the border police and some of the citizens. I was just another ‘kwere-kwere’.”
Since then, that’s all she’s known apart from poverty. Just as she did in Zimbabwe, Moyo finds and sells what she can to ensure she and her daughter do not go to bed hungry each day.
“I left one hell for another. Would I like to be back home with my family? Sure, but that’s no longer an option for me. I’m here now.”
At some point, I fell to the ground and started to scream ‘I am tired’.”
*Emily Shamu came to South Africa when her daughter, Lisa, was a toddler.
“She was too heavy for me to carry along with our luggage and a gentleman offered to carry her when we crossed the Limpopo River,” she says.
She would normally not have trusted a stranger, but for Shamu, the focus was survival.
Shamu and the others walked 12 hours to Messina, the northernmost town in South Africa’s Limpopo province.
“I did not know we were going to walk for so long. At some point, I fell to the ground and started to scream ‘I am tired’.”
She describes her knees colliding with the gravel road. Her daughter watched as she cried uncontrollably. “My child remembers. We rested for some time and I used this time to remind myself (sic) why I was going through this.”
Now, living in South Africa for eight years as a refugee, her life is defined by a cycle of begging – not for food or spare change – but, each quarter of the school year, to plead with the headmaster to allow her daughter to sit her exams with her peers.
“Every term, my heart sinks… I don’t know if he will say yes. We are just controlled by circumstances.”
In South Africa, students are required to produce a form of identification before they are allowed to partake in written assessments. Because Shamu has no asylum papers, she is unable to apply for an ID document for her daughter.
“If I’m honest, I have not tried to get my papers,” she says. “I tried in 2010 and the back and forth is just so demoralizing. “ Shamu and her daughter live stateless with nothing to ensure stability.
“I want to go home, if the situation can just change…”
Interestingly though, the problem is not just about changing the perception of what nationals think of foreign nationals, relations amongst refugees need to be established. The fight becomes harder if unity lacks amongst them.”
Refugees Seen As ‘The Other’
The story of a Vietnamese immigrant
Lisa Phung, her mother and older sister hid in a mosquito and disease-infested swamp during the day and in the night were led onto a small boat that took them to a main fishing boat which would eventually transport them to their new lives.
Earlier, Phung’s mother had received instruction from her father to leave Vietnam as their freedom was under threat. He was a pilot who had just been captured by communist soldiers in the Vietnam War. Her mother who was not educated enough for a stable job heeded her husband’s call and managed to secure the money to get her and her girls out of war-torn South Vietnam.
“People smugglers” were paid to get them out.
“The first two times, we got caught and jailed,” says Phung. The third time they got lucky.
“Enroute to the fishing boat, we got robbed by the people smugglers and everything was taken except for a few pieces of food.”
But at least they got onto the big boat.
“We were crammed up like anything and I was one of the youngest at age four.”
Shortly after they started, the boat’s engine died.
“They thought it was a petrol problem but the people smugglers had taken the petrol and replaced the tank with water.”
The group of people floated for 10 days with nothing more than the packet of rice.
“My mother remembers that I was starting to die … everyone was getting ready for death.”
Shortly before a storm, a British cargo ship sailed past and for a few moments there was hope of survival.
“It didn’t stop to save us and that was heart-breaking because we lost hope.”
It was as though their fate was sealed but then, in a surprise move, the ship turned around and carried the refugees, Phung and her family amongst them, to Singapore.
“After the ordeal, my mum told me she lost hope in a lot of human beings because everyone just looked out for themselves.”
Because Phung’s mother had children, she was the last to be rescued.
“She was the last person off that boat; it must have been horrifying for her.”
The ship docked in Singapore. From there, the refugees were taken to a detention center in Hong Kong where they stayed for three years.
“My mum wanted to go to the USA but they were no longer taking refugees.”
Sometime later, Australia was accepting refugees. Phung was seven years old and finally a life of some stability awaited her.
Years have passed. She now lives in Australia with a family of her own and uses her experience to give hope to others who have walked her path.
“I’ve seen how refugees are seen as ‘the other’ in different parts of the world, coming to take their jobs or their land and they really just want a safe place to live and everyone should have that right.”
Misplaced In Their Own Space
How a community in Western Algeria live like refugees, in their own land.
isolated from the world and within their own state, this has been the plight of the Saharawi people living in refugee camps in Western Algeria for the last 41 years. They face human rights injustice, but unlike other global refugees, it is on their own land.
The Polisario movement, the voice of the Saharawi ethnic group, says the territory reported to be illegally occupied by Morocco belongs to the Saharawi people.
For years following a guerrilla war, they have tried and failed to claim ownership of the land from the Moroccan government with no success. Now, according to the United Nations, they live in mud brick houses and tents in the harsh desert conditions of Tindouf Province, Western Algeria.
They have been locked in an armed struggle for liberation. At the forefront of the movement are the Saharawi women who have increased their traditional role in the fight not only to reclaim their territory but to also salvage their self-determination as a people.
According to Catherine Constantinides, a human rights activist and executive director of Miss Earth South Africa, the power structure is unlike any other on the globe, particularly in Muslim culture. “Women have a strong hold in the camps; they double as caregivers as well as liberation fighters. They also invest heavily in themselves educating one another and learning various skills. They exert the power there and the men respect this because they hold the camps together.”
Constantinides who has dedicated her efforts to bringing to the fore their plight emphasizes the world cannot fathom the dire conditions faced by the Saharawi people “until you see it”.
“The Saharawi people have less than nothing,” she says. On one her many visits to the region, Constantinides witnessed the dehumanizing process of the people getting food dropped from the skies as by aeroplanes and water delivered in huge trucks. The men cannot provide for their families and their children just watch each time as they reach out to the skies to catch what they can.
This is just one illustration of the wide socio-economic gap and the gap between humanity and policy regulations that leave the Saharawi people living in a constant state of statelessness and discomfort.
Moreover, there are no adequate health facilities for them.
“Child mortality is at its highest in Tindouf as women are forced to give birth in their mud houses or tents,” explains Constantinides.
“It’s devastating because children bring that spark of hope within that unfortunate situation.”
United Nations Secretary-General, Ban Ki-moon, has since visited the refugee camps as an effort to reinitiate negotiations in the region to end the dispute and to bring liberation to the Saharawi people. During his visit, he said he “would spare no effort towards a just and meaningful solution” for the people in Western Algeria.
These are the kind of efforts activists like Constantinides want to see in the fight against the global neglect of refugees. “We have to find better ways of dealing with the crisis.”
One example which Constantinides makes reference to is the naturalization process that she witnessed earlier this year in Virginia, America, on the 4th of July.
“This was an example of how in time systems can work if applied to crises to give people dignity.”
“We have to bring the concept back of supporting each other instead of building walls,” she sighs.
Until such time, the Saharawi people will continue the taxing fight for their statehood, led by the women who Constantinides says will never give up
Mysterious Object Under Moon’s Largest Crater Found By Scientists
An unknown, mysterious mass has been found beneath a crater on the moon, according to researchers at Baylor University—and it may give scientists clues into how the moon was shaped.
- Researchers discovered an unknown anomaly roughly five times the size of Hawaii’s largest island.
- The mass is sitting beneath one of the largest preserved craters in the solar system, the South Pole-Aitken basin.
- A plausible guess by scientists: The mass is a piece of metal left behind nearly 4 million years ago by the asteroid that formed the crater.
The mysterious mass sits more than 300 km (186 miles) underneath the solar system’s largest crater. The crater isn’t visible to the naked eye because it’s on the far side of the moon, which always faces away from Earth.
While the researchers who discovered the mass don’t know what it is or where it came from, computer simulations suggest that, under the right conditions, a large asteroid’s iron-nickel core could have been embedded inside the moon upon impact almost 4 million years ago.
Another possibility, according to researchers, is that the mass consists of oxides left over from when the moon was changing from a large ocean of molten magma to what it is today.
-Rachel Sandler; Forbes Staff
Why Mitsubishi Heavy May Want Bombardier’s Money-Losing CRJ Regional Jet Line
Bombardier may be close to completing its exit from the airliner business, confirming Wednesday morning that it’s holding talks with Mitsubishi Heavy Industries to sell its once-mighty CRJ regional jet line. For Mitsubishi Heavy, which has struggled to make the climb from an aircraft component supplier to a jet maker, the deal may be less about the money-losing CRJ than acquiring its extensive service network.
Tokyo-based Mitsubishi Heavy is years behind schedule on the MRJ, a twin-engine regional jet that was initially expected to be launched in 2013 with Japanese airline ANA. With certification of the 90-seat version believed to be on track for 2020, acquiring the competing CRJ program would solve the knottiest remaining problem for Mitsubishi: product support and maintenance, says Richard Aboulafia, an aerospace analyst with Teal Group. “They have no experience at that, and no infrastructure,” he says.
The sale talks were first reported by The Air Current.
Montreal-based Bombardier created the regional jet market in 1989 when it launched the CRJ, which was a stretched, 50-seat version of the Challenger business jet that it had acquired a few years prior when it first got into aerospace by buying the struggling aircraft maker Canadair from the Canadian government. With jet fuel cheap in the 1990s, U.S. airlines snapped up the CRJ to replace propeller-driven planes on short-haul routes serving smaller cities. Bombardier has sold 1,950 CRJs, but sales slowed in the early 2000s as oil prices climbed and airline consolidation shrank route networks.
Bombardier had 51 outstanding orders for the aging airframe as of March 31, a backlog that should be worked through by 2020. Bombardier refreshed the CRJ in recent years with a new cabin design, but its seventies-vintage General Electric engines are inefficient by modern standards, and it’s not clear if the plane could be retrofitted with newer ones.
What’s kept sales trickling along has been the persistence of so-called “scope clauses” in U.S. airlines’ labor contracts with their pilots, which restrict the major carriers from contracting with regional airlines for flights of planes above 76 seats and a maximum takeoff weight of 86,000 pounds. With the MRJ, Mitsubishi made a losing bet that the scope clauses would be relaxed by the time it came into service: the MRJ90 is too big to be used in the U.S. now. Embraer made the same miscalculation with its new E2 regional jet line.
Mitsubishi has been working on a 70-seat version, but that project is reportedly going through a redesign that could delay it until 2023.
United and Delta pilots are negotiating new contracts, and American and Southwest’s agreements are up in 2020, but it’s unclear whether the airlines will be able to win relaxation of the scope clause restrictions.
It’s also unclear whether Mitsubishi would want to keep producing the CRJ, scope clauses or no, given its unprofitability. The company could choose to fulfill current orders and wind it down, says Aboulafia.
Beyond the CRJ maintenance network, Mitsubishi could benefit from adding experienced engineers from the Bombardier program who could aid in developing the MRJ and in the complicated regulatory certification process.
Bombardier filed a lawsuit against Mitsubishi in October, alleging that former Bombardier employees had supplied it with trade secrets that would help the MRJ gain certification.
A sale of the CRJ line would be the sunset of an era of ambition for Bombardier, a snowmobile maker that expanded into rail in the 1970s and aviation in the 1980s with a series of acquisitions, but stumbled badly earlier this decade with an attempt to challenge Airbus and Boeing by developing a 100- to 130-seat jet, the CSeries, that almost bankrupted the company.
CEO Alain Bellemare, who came aboard in 2015, has sold off assets and raised new debt and equity to pare Bombardier’s heavy debt load, aiming to slim the company down to its strongholds in business jets and trains.
In 2018, Bombardier gave away a majority share in the CSeries to Airbus, which has rebranded it the A220. Airbus has the option to buy full control in 2025. This week Bombardier closed the sale of its Q Series regional turboprop line to Longview Capital, and last month it announced that it would sell an aerostructures factory in Morocco and its Northern Ireland unit, which developed innovative composite resin technology used to make the wings for the A220.
For the CRJ program, Bombardier could fetch a similar price to its sale of the Q Series, which netted $250 million, says analyst Christopher Murray of AltaCorp Capital, and a deal could allow it to offload other contingent liabilities.
Bombardier shares rose 8.9% Wednesday morning to 2.14 Canadian dollars on the Toronto Stock Exchange. The stock tumbled 20% in late April after the company cut its 2019 sales and profit outlook due to delays and quality issues on multiple contracts at its rail unit. Bombardier said during its first-quarter earnings call last month that it would no longer commit to previously announced financial goals for 2020, including raising sales to $20 billion.
-Jeremy Bogaisky;Forbes Staff
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