Strictly Business

New era for New Era

   News that one of the Buffalo area's signature companies is cutting back -- way back -- is serious and disappointing for many. Thus my hat is off (sorry) to the Buffalo News writers and editors who resisted what must have been a strong impulse to make all kinds of puns out of the company's name and/or its main product.

- Uncertain future for New Era’s local plant - Matt Glynn/The Buffalo News
   New Era Cap Co. is cutting back its U.S. manufacturing and will soon choose which one of two manufacturing plants to keep open — in Derby or Demopolis, Ala.
   The Buffalo-based hat and apparel manufacturer says it needs only one plant, not the three it currently operates, to meet reduced consumer demand. New Era has already determined it will close a plant in Jackson, Ala., in the first quarter of next year.
   The company will also shut a distribution center in Mobile, Ala., probably in the second quarter of 2010. New Era’s Delaware Avenue headquarters and a distribution center in Harrisburg, Pa., are unaffected.

   This is, of course, big news in Alabama, too. And a couple of headline writers there were not so self-controlled.

- End of a New Era - Mobile, Ala., Press Register
   New Era Cap Co. will close its Jackson, Ala., factory and Mobile distribution center by early next year, laying off 322 workers in Jackson and 70 in Mobile, the company said this morning.
   Paul Gallagher, a spokesman for New Era of Buffalo, N.Y., said the firm has been hit by falling demand in the recession, and that its small-batch custom business has been decimated by the closure of more than 500 former retail customers.
- The End Of New Era - WKRG TV, Mobile
   Almost four hundred people will be looking for a job next year after a big announcement at the New Era Cap Company.
- New Era closing Jackson plant, Demopolis plant future uncertain - Dermopolis Times
   New Era Cap Co., Major League Baseball's official cap supplier, is consolidating its U.S. manufacturing operations from three plants into one, putting the future of one of Demopolis' largest employers in limbo.

   And then there's this headline, which contains no puns because they were crowded out by all the optimism:
- New Era Cap Co. may consolidate 3 plants into Demopolis facility - The Tuscaloosa News
   New Era Cap Co., which supplies Major League baseball players and celebrities, said Thursday that low  consumer demand is forcing the consolidation of its U.S. manufacturing operations from three plants into one. ...
   A decision on which of the other two plants will go — either Demopolis, Ala., or Derby, N.Y. — will be made after discussions with the Communications Workers of America, which represents employees at both facilities, Gallagher said. That decision is expected in the spring.

But, then, if I worked in a town called Tuscaloosa, I might be tired of puns, too.

 

-- George Pyle/The Buffalo News

Same ol' same ol'

   I remember a day when I was in the process of moving from one town to another, standing in a Wal-Mart, and not remembering whether I was in the old town, there to buy cleaning supplies for the house I was moving out of, or in the new town, there to buy window blinds for the house I was moving into.
   I had the same feeling this morning sweeping through the business sections of various newspapers:

- Termini bid disrupts Buffalo Place board - Jonathan D. Epstein/The Buffalo News
   Tensions erupted over the downtown Buffalo commercial real estate market Wednesday, as several developers complained bitterly about some projects seeking government assistance while others struggle to fill excess office space.

- Starwood Hotels To Move Global Headquarters To Stamford - The Hartford Courant
   The state will provide a $9.5 million loan and up to $80 million in tax credits and exemptions, according to Gov. M. Jodi Rell, who called the move "a triumph for Connecticut."

- County approves Boeing incentives, but financial details remain secret - Charleston (S.C.) Regional Business Journal
   Charleston County Council members voted Tuesday in favor of a tax incentive package for the Boeing Co., but most of the details remain under wraps.
   County officials said that’s because they are still negotiating the financial deal with Boeing. Some details could be made public before the third and final vote on the package, scheduled for Dec. 22. Other details could remain secret, even for a year after they are approved, said Councilman Elliott Summey, who made the motion for the council to approve the incentive package.

- Tax break is approved to keep McKesson jobs here - The Commercial Appeal of Memphis
  For the first time, the Memphis and Shelby County Industrial Development Board on Wednesday approved tax breaks to encourage a company just to keep some or all of its 813 jobs in Memphis, not necessarily create new ones.

  And now for something a little different:
- Meet the innovator behind Duluth's building boom - The Duluth (Minn.) News Tribune [registration required]
   He’s a multimillionaire who took a shine to Duluth in the 1980s, and he’s had a giant impact on his adopted Northland home. ...
   “We came to Duluth and saw it as an opportunity because everybody was so negative about being there,” he said. “There wasn’t anyone taking advantage of good sound opportunities.” 
   This article has a huge reportorial hole in it, not saying whether developer Lee Anderson did or did not get a lot of tax breaks, government-backed loans, etc, for his projects. Still, somebody otta send this guy an e-mail.

-- George Pyle/The Buffalo News
  

  

Your tax dollars at work

    In New York, it seems, nobody wants to build anything, or rebuild anything, unless they get grants, loans or tax forgiveness from the government.
   From today's Buffalo News Business Today section:
- Developers in a snit over AM&A's plan - Jonathan D. Epstein/The Buffalo News
   Downtown real estate developers are objecting to an effort by Rocco R. Termini to get a low-interest state loan to redevelop the dormant AM&A's building on Main Street in Buffalo into a hotel, residences and offices.
   The developers say the loan would amount to a government subsidy or "taxpayer handout" for Termini and the AM&A's project, which would then compete with their own projects for new tenants in a market that already has excess vacant space.
   Termini's plan has even created a rare spat among the directors of Buffalo Place, who have been asked to consider a resolution endorsing the loan request. Many of the directors are Termini's rivals.
   The Buffalo Place board met this morning. A story on the fireworks will be filed this morning on BuffaloNews.com.

- IDAs seek revised incentive policy - Matt Glynn/The Buffalo News
   Business projects that make an exceptional impact on the region’s economy would receive a higher level of financial incentives from any one of Erie County’s six industrial development agencies, under policy changes proposed by those agencies.

   Wait. Did I say "In New York." Strike that.
- Lawmakers hear debate on value of state's tax incentives - The Denver Post 
- Biotech Handouts Are A Risky Strategy - Hartford Courant
- Pfizer could lose $7 million in tax breaks - St. Louis Business Journal
- State OKs new tax incentives to keep GM in RenCen - The Detroit News
- Association wants tax incentives to remain - Fiji Village
- State, county entice Talecris - The Herald of Johnston County, N.C.
   And, from a newspaper whose name seems particularly appropriate for today's topic:
- Memphis City Council OKs tax incentives to keep companies here, retain jobs - The Commercial Appeal

-- George Pyle/The Buffalo News 

This qualifies as good news...

   In today's Buffalo News Business Today section, a couple of national stories that, under today's standards, just about qualify as good news.

- GM 3rd-quarter loss drops to $1.2 billion
    GM lost $1.2 billion in the third quarter — far less than the $6 billion it lost in the first three months of the year, before it was transformed by a stay in Chapter 11. The company credited a sharp reduction in debt and sales of new models.
   In what it called a sign of progress, GM also pledged to start paying back $6.7 billion in U.S. loans. But the money will come from a contingency account full of government cash, leading critics to question just how healthy the automaker really is.
   Progress: Losing only $1.2 billion. And paying back debt with borrowed money.
   Meanwhile, reports The Detroit Free Press, GM needs a ton of state tax breaks to keep its iconic downtown Detroit HQ, The RenCen, up and running.

- Fed to watch falling dollar
    Federal Reserve Chairman Ben Bernanke said Monday that the central bank will monitor the sliding U.S. dollar but pledged anew to keep interest rates at record lows to nurture the economic recovery.
   Translation: The Fed boss knows the dollar is dropping, and that he may have to do something about it. Something that might hurt somewhere. He also knows that the really low interest rates, kept that way to stimulate growth and maybe even reduce unemployment, are encouraging the kind of investment bubble that would up killing the housing market. He may have to do something about that, too.
   Folo from WSJ/Dow Jones: Bernanke's remarks help shore up dollar. But that rise is also a sign that investors are worried and see the dollar as a safe haven.

Meanwhile, great truth hides in humor:

-- George Pyle/The Buffalo News

Off to see the wizard...

   Some of us who Aren't In Kansas Anymore were happy to watch The Wizard of Oz on TBS over the weekend. Twice.
   Sunday's Buffalo News Business Today section front accidentally picked up the theme with stories about  

   Brains:
- Region has the brains to build upon - David Robinson/Buffalo's Business
   The Buffalo Niagara region, for instance, does a good job of producing college graduates. The nearly 14,000 people who graduated in 2006 from local colleges and universities with bachelor's degrees or above was more than double the graduates produced by the typical U.S. metro area. It was good enough that Buffalo ranked 26th among U.S. metro areas.
   But our work force isn't loaded with a heaping portion of people with degrees in high-value fields, like computers, mathematics and engineering. And because it's easy for people to move, the percentage of workers in the Buffalo Niagara region with bachelor's degrees is actually a tick below the 25 percent national average.

 Heart:
- City landlords profit by doing right - Samantha Maziarz Christmann/The Buffalo News
   But there is money to be made in an ethical way in such a market, experts said, for those willing to do things the right way. And doing things right involves a lot more work than just buying low and selling high.

   Courage [maybe too much]
- Stocks are hot again, but are they too hot? - Rachel Beck/The Associated Press
    Consider the very thing that has boosted the market. The U.S. government has spent nearly $1 trillion to stimulate the economy and the Federal Reserve has maintained a policy of keeping interest rates near zero.
   Those will disappear as the economy's health improves, potentially halting the bull market by taking away what has been its crutch — sources of cheap and plentiful money.

   And, [in a backwards sort of way] Home:
- Continental's long good-bye in Elma - Matt Glynn/The Buffalo News
   Now the end has arrived, on the schedule that Continental had forcast. Production stopped at the Jamison Road plant early this month, said Sue Frederick, a Michigan-based spokeswoman for Continental, whilch is headquartered in Germany.

-- George Pyle/The Buffalo News

 

CarShare revs up

   Continuing my run as The Buffalo News Financial Desk's Crunchy News* Reporter (You know, crunchy granola, hippie, eco-friendly, hazards-of-industrial-food, be-kind-to-animals stuff.):

- CarShare expands; demand revs up
   CarShare has hit the ground running in Buffalo.
   Less than six months after its rollout, the nonprofit car-sharing service has signed 130 paying members and expanded its fleet of blue, high-efficiency Toyotas from four to seven.
   With the word spreading, and financial self-sufficiency on the horizon, the University at Buffalo urban planning students and graduates who founded the car-sharing service are setting their sights beyond the urban environmentalists out to save the world — and a few bucks.
   [National car sharing Web site.]

   * In honor of Sesame Street's 40th anniversary:

-- George Pyle/The Buffalo News

Hotel boom?

A weekend News story outlined plans by a number of developers to open new hotel rooms in downtown Buffalo. The projects are in different stages, with some just concepts at the moment (such as a hotel envisioned for the Statler Towers) while others, such as developments led by Mark Croce and James Pitts, are farther along. If all the projects are built, they would add hundreds of hotel rooms to the city's portfolio.

Some say Buffalo is overdue for brand new hotel rooms; others say there isn't enough to demand, especially if they are using government subsidies to get off the ground.

-- Matt Glynn

Got jobs?

   The breaking news on the economic front this morning is the latest, and still frightening, unemployment situation:
- Jobless rate tops 10 pct. for first time since '83 - AP/The Buffalo News
   The unemployment rate has hit double digits for the first time since 1983 - and is likely to go higher.    
   The 10.2 percent jobless rate for October shows how weak the economy remains even though it is growing. Rising unemployment also could threaten the recovery if it saps consumers' confidence and makes them more cautious about spending as the holiday season approaches.
- U.S. Unemployment Rate Hits 10.2%, Highest in 26 Years - The New York Times
   For Americans who wake up each morning thinking about their job hunt, Friday’s unemployment report offered little reassurance that their search would soon pay off, even as the broader economy showed signs of strengthening.
    Or, as the ever droll Economist.com puts it:
   The American labour market has opted not to keep us all in suspense, wondering whether and when the unemployment rate might crest the 10% level. As of the month of October, the unemployment stood at 10.2%—only the second time in America's postwar history that has happened.
   [DOL press release. Statement of sympathy from Secretary of Labor - who has a job, as does the White House economics guru, who says this.]

   This was not really a surprise. High joblessness is usually the dark side of the numbers that came out yesterday on productivity:
- Gains dim hopes for hiring of jobless - AP/Buffalo News
   Companies across the economy are finding ways to do more with fewer workers, dimming hopes that hiring will take off anytime soon. ...
   Still, some economists were encouraged by the productivity report. They say that eventually, employers won’t be able to squeeze more from their staffs. They then will have to ramp up hiring — which could happen next year, even though the jobless rate is expected to hit double digits.
   [DOL report. Slightly easier-to-read press release.]

   One local bright spot in all the gloom, especially if you want to make an omlet:
- Robinson increases jobs, sales after Oneida licensing deal - Matt Glynn/The Buffalo News
   Robinson Home Products is going through a growth spurt in Cheektowaga, thanks to its licensing agreement with Oneida Ltd.
   Robinson, a kitchen tool and gadget distributor, has a 30-year deal to make and sell Oneida-brand flatware and dinnerware for all consumer markets in the United States. It plans to add 88 jobs and has already filled 28 of those positions.

-- George Pyle/The Buffalo News

He's been buying up the railroad

   In many cities where it wasn't the day after Election Day -- and even in some cities where it was -- the big news was the move by Warren Buffett to have his Berkshire Hathaway investment company buy whatever pieces of the Burlington Northern Santa Fe Railroad it didn't already own. [BNSF news release & webcast] 

   In The Buffalo News, is was the centerpiece of the Business Today section:
- Buffett buys railroad for $34 billion - The Associated Press/Buffalo News
    The biggest name in investing is making what he calls an “all-in wager” on the U.S. economy — $34 billion to own a railroad that hauls freight ranging from corn to automobiles across the country. ...
   “They do it in a cost-effective way and extraordinarily environmentally friendly way,” Buffett told CNBC on Tuesday. “I basically believe this country will prosper and you’ll have more people moving more goods 10 and 20 and 30 years from now, and the rails should benefit. It’s a bet on the country, basically.”

   The fact that Mr. Buffett also owns the computer I'm banging on right now -- the building it sits in and the newspaper it feeds into -- has absolutely nothing to do with the fact that I hope this means a very bright guy is betting correctly. If he is, that means the economy might move away from unfathomable derivitives and default swaps, which he never trusted anyway, and back toward making, moving and buying real things. Things like cars. Things that people will want to advertise in, oh, I don't know, newspapers, maybe.
   [More on Buffett's view of the news biz is across the blog table here.]
   My optimism also has nothing to do with the fact that, when I was a kid, I lived in a town where the big thing to do was watch the Silver Streamliner passenger train, then operated by the Burlington Northern, come through town.

   Other takes on the move include The Business Insider's Joe Weisenthal concluding that Buffett knows that his new best friend Barak Obama will be putting a lot more money into the nation's infrastructure, including railroads, and that the president's push toward reducing the nation's carbon output will favor trains over trucks.

   News takes from Buffett's hometown paper, The Omaha World-Herald: Warren Buffett believes he can make money owning a railroad, and that bodes well not only for BNSF Railway Co., Buffett's target, but the entire industry and BNSF's chief rival, Omaha-based Union Pacific, analysts and industry experts said.
- The Fort Worth Star-Telegram: Legendary investor Warren Buffett came to Fort Worth just 13 days ago, on Oct. 22, ostensibly just for a meeting of the board of directors of his Berkshire Hathaway holding company. Forty-eight hours later, Buffett left town with fond memories of a good chicken-fried steak and an agreement to spend $26.3 billion to buy Burlington Northern Santa Fe Corp.
   "I think every little boy in America grows up fantasizing about running a railroad. Now I’m going to own one," Buffett said in an interview Tuesday after the deal to buy the Fort Worth-based company was announced.
- The Kansas City Star Warren Buffett leads a simple life. But when the revered business legend buys a train set, it’s a $34 billion mega-deal.
- The Dallas Morning News Warren Buffett bought an expensive train set Tuesday, betting $26 billion for Fort Worth's Burlington Northern Santa Fe railroad on the hunch that a recovering economy will stoke the nation's appetite for coal and Chinese imports.
- The New York Times: "This is all happening because my father didn’t buy me a train set as a kid."

   Anyone noticing a pattern here?

-- George Pyle/The Buffalo News

No bump in the grinding

   The story about Ashville's Fairbank Farms and its recall of a half-million pounds of suspect ground beef continues to grind on.

- Beef plant operating after E. coli alert- The Buffalo News
   The Western New York beef processing plant at the center of a regional alert for potentially fatal E. coli contamination continues to operate pending a visit from federal inspectors.
   The Fairbank Farms operation in the Chautauqua County community of Ashville has recalled nearly 550,000 pounds of ground beef packaged in mid-September. The beef is linked to the deaths of two people and illnesses affecting 26 others.
   Adrian Gianforti, a spokeswoman for the U.S. Department of Agriculture, said Tuesday that the department, working with the federal Centers for Disease Control and Prevention, has the task of making sure the voluntary recall has been properly publicized and finding points along the supply chain where the suspect beef may have been processed, shipped, repackaged and sold.
   Only after that, Gianforti said, will inspectors from the department’s Food Safety and Inspection Service visit the plant. That inspection, she said, will determine whether equipment or procedures require any changes and whether any penalties should be assessed.

   In addition to recalls [which, under current federal law, remain voluntary on the part of processors], the USDA has this idea, called Know Your Farmer, Know Your Food. [Does this sound somehow familiar?] 

   Else-Web:
- Recall of beef third for firm - Albany Times-Union
   Price Chopper on Tuesday strongly defended Fairbank, saying the supplier goes "above and beyond" to insure the safety of its ground beef. Spokeswoman Mona Golub said Price Chopper will continue to sell Fairbank ground beef and remains confident the company is a top-notch distributor. 
- Two lawsuits filed over tainted meat - GateHouse News/Brockton (Mass.) Enterprise
- DeLauro blasts latest ground beef recall - Feedstuffs [I never heard of it either.]

-- George Pyle/The Buffalo News