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Friday, October 30, 2009

Oakland University to offer nursing program at former St. John Riverview Hospital

from Crain's Detroit

Oakland University’s School of Nursing will offer accelerated nursing degree programs through a new program with the St. John Health System.

The Riverview Institute of Oakland University officially opens Nov. 18 at the renovated former St. John Riverview Hospital on East Jefferson Avenue in Detroit.

The institute will now offer bachelor’s degree in nursing in 12 months to students who already have a bachelor’s degree, OU said today in a statement. Graduating nurses will also have opportunities to be hired by a St. Johns area hospital.

The Riverview Institute will also offer training programs for patient care technicians and licensed practical nurses, OU said.

Business Opportunities In Franchising

from Franchise Magazine

The economic turmoil of the last year has meant that most employees have been concentrating on retaining their job rather than considering job satisfaction. However, a combination of the New Year and reports that the economy is set to improve during 2010 will mean that an increasing number of people will be looking to make a fresh start by starting a new career.

Often the idea of making a new start and embarking on a retraining course can seem expensive and daunting, especially if there are commitments such as a family to support to consider. Many people have found the answer in a franchise opportunity, which not only provides the opportunity for entering a new profession but also provides the independence of owning a business such as an auto franchise, a lawn franchise, or restaurant franchise.

One of the main reasons that so many people wanting a change opt for franchising is that most franchisors provide training and support as part of the franchise package. The reason for this is that many franchisors are supportive of people with little or no previous experience wanting to enter a new industry. Nick Bicknell of Smart ABC, a car paint repair franchise, explains: "No experience is necessary to become a Smart ABC franchise owner. Our systems and technology have been created to offer ease of use for the novice. To qualify, all trainee franchise owners successfully complete repairs during their first week of the three week training course."

Performing arts franchise LIPA 4:19 also ensures that new franchise owners are provided with thorough training. Kerry Watkins of LIPA 4:19 says: "The franchise owner will have an intensive five day training course and receive an operations manual on how to run the business. Also teachers will undergo LIPA 4:19 training."

Many franchisors not only provide an initial training programme but also ongoing training and support to ensure that franchise owners are able to develop within the industry. Nick adds: "Part of our training programme is six weeks after a business is launched - the franchise owner returns to our training academy for further assessment and skill refinement. We additionally run weekend refresher and advanced skill courses which are provided at no further expense to the franchise owner."

Tax and accountancy franchise TaxAssist Accountants also ensures that its franchise owners are provided with ongoing training. David Paulson of TaxAssist Accountants reveals: "Structured training at the support centre plus regular visits from the technical support team provide ad-hoc training both for franchise owners and their staff. We also have regular focus group meetings to trial new services as well as twice yearly regional meetings for updates and training, along with an annual conference."

Many franchisors also acknowledge the fact that franchise owners with no previous experience of their sector can also benefit their own business. Nick states: "The advantage of franchising is bringing together a group of individuals with varying skills, experiences and ideas. As an innovative franchisor we encourage interaction and idea exchange between our franchise owners and when appropriate we will evaluate at head office and integrate in to the business model."

Although owning and operating a franchise -like running any business - requires a great deal of hard work it can be the perfect option for those looking to make a new start. David comments: "Individuals that join TaxAssist Accountants from outside the industry are able to be up and running building a successful business far quicker than trying to go it alone.

"As a franchisor we invest heavily in training including tutors from external companies such as BPP. We haven't bought an off the shelf training package but have tailored it specifically to the needs of our franchise owners, which an individual looking to go it alone simply couldn't do. With the multitude of regulations that our industry has to adhere to it would be extremely challenging for a non-accountant to set up in practice without the training and support that our franchise offers."

Chrysler Franchise Reborn As Hyundai

from My Desert

Robert Hulett, general manager of the 25-year-old Chrysler dealership that was one of 789 franchises to be shuttered in the Chrysler LLC meltdown across the United States, has reopened with a new fleet of Hyundai cars.

There'll be some familiar faces, too.

“We had about 75 employees at one point, and had to let just about everyone go'' over the summer as used cars were sold and a new franchise opportunity explored, Hulett said.

The city of La Quinta approved a temporary zoning permit for the dealer to operate Dodge City Pre-Owned Auto Sales in the interim. On Oct. 19, the service department reopened and the first fleet of new cars rolled in.

Four people in service and two employees in parts were rehired, Hulett said, along with three sales people and two business associates.

Mayor Don Adolph said it's great that the business was able to launch a new franchise.

“The city and our staff has been working with the dealers that are up there,” he said. “We don't want to end up with one car dealership. You need several of them in there to make this work.

“We're happy this is moving forward,'' he said. “It benefits the city and the dealers that are in the auto center.”

As of Wednesday, some 45 new cars have been prepped and are on the ground.

“The signs are going up now,'' Hulett said, and floor traffic has returned to the franchise.

Within a week, the dealership, owned by Kent B. Sowell, should have 80 new Hyundai vehicles plus 60 used cars on the lot.

“It feels great,” Hulett said as paperwork was being prepared for the dealership's first probable new car sale — a 2009 Elantra Touring vehicle.

“Last year, the auto industry was very challenging. Every day it got worse and worse — hitting rock bottom when Chrysler told us we lost the franchising rights,'' Hulett said. “Now, the economy is starting to show signs of recovery. Hyundai is gaining market share. It's a great product with a great warranty, and it's a company that's growing.

“We feel good about them, and they feel good about us.”

Thursday, October 29, 2009

Foodstamps To Be Accepted At Costco Nationwide

USA Today

PORTLAND, Ore. (AP) — Costco Wholesale said Wednesday that it will start accepting food stamps at its warehouse clubs nationwide after testing them at stores in New York.

It's a big about-face for a retailer that has catered to bargain-hunting but affluent shoppers, and it's a sign of the grim reality facing retailers and their customers. The number of Americans relying on government food subsidies to eat recently hit a record 36 million.

Costco (COST), which is based in Issaquah, Wash., began accepting food stamps at two New York stores in Brooklyn and Queens in May under political pressure from officials who worked with the company on opening a club in a redevelopment area in Manhattan.

The company quickly expanded to all six of its stores in New York state.

Company officials said they had doubted many customers would use food stamps but it turned out new members said they were joining precisely because the company accepted the assistance program.

"We recognize these are tough times and more people are food-stamp-eligible," Costco Chief Financial Officer Richard Galanti said Wednesday.

Costco said it hopes to accept food stamps at half of its 407 stores in the U.S. and Puerto Rico by Thanksgiving and at the remainder as soon as it wins regulatory approval in each state.

While most major grocery chains have accepted the food subsidy for years, more retailers have been accepting food stamps as the process has eased and the number of people using them has soared.

Most users no longer receive stamps, but instead carry the value on a card that can be swiped at checkout much like a bank debit card.

That makes it easier and more discrete for shoppers and speeds the checkout and reimbursement processes for retailers.

Because about half of Costco's customers are small businesses and the rest tend to be more affluent than shoppers at traditional grocery chains, Galanti said, executives had assumed there wouldn't be much response to it accepting food stamps but realized that assumption may have been wrong.

"Certainly this economy was a wake-up call," Galanti recently told investors. "It is not just very low-end economic strata that are using these (who) typically don't have purchasing power."

Food retailing consultant Bill Bishop, of Willard Bishop Consulting, said Costco's decision shows how pervasive the pressure on consumers has become. He said more and more grocers are seeing their sales peak and fall based on when assistance benefits are distributed.

Mexico's War On Drugs Bolstered By U.S. Training

USA Today

SAN LUIS POTOSI, Mexico — U.S. Marshal Israel Barajas was going "rabbit" hunting.

U.S. Marshal Israel Barajas, right, instructs a Mexican police cadet 
Tuesday during a training exercise in San Luis Potosi, Mexico.
Standing in a park in central Mexico, he and other trainers were teaching Mexican police cadets to tail a suspect — a "rabbit" in police slang — as part of an unprecedented effort to help Mexico in its crackdown on drug cartels. "Remember, I don't want you going out all in a big group," said Barajas, who is from Houston. He reminded the cadets they needed to watch out for their partners — and would be pulled from the exercise if they failed.

Since July, a total of 81 U.S. law enforcement officers have come here on three-week shifts to teach such basic police skills to their Mexican counterparts. The program, part of a $1.4 billion U.S. aid package for Mexico, marks a major escalation in American involvement in the drug war here.

It's also a first for Mexico, where the government has historically been reluctant to allow U.S. agents or troops on its soil because of animosity that dates to the 1846-48 Mexican-American War.

"This is really historic," said Noe Sánchez, academic director at the academy. "We've never had this kind of international cooperation before."

The program focuses on teaching investigative skills such as interviewing witnesses, collecting evidence and performing surveillance to Mexico's newly created Federal Police. The federal force and the Mexican military have played a greater role in anti-drug efforts than local police forces, which are often plagued by corruption , drug addiction, and insufficient training.

All of the U.S. instructors speak Spanish, and they come from an array of agencies including the FBI, Immigrations and Customs Enforcement and the Drug Enforcement Administration, as well as city police departments across the USA.

The Mexican police "are excited; they want to learn," said Barajas, the U.S. marshal. "You can tell they really want to be here. They want to be part of the change."

On a recent morning, Dante Servin, a detective from the Chicago Police Department, was quizzing cadets on a tricky case study in Methodology Class. A routine investigation into a shoe store robbery, a state crime, had turned up a counterfeiting operation, a federal offense.

"First of all, let's decide: Can we legally enter the store?" Servin asked. The students decided they needed a search warrant.

In another class, Paul Lewenthal, an Immigration and Customs Enforcement agent from San Diego, was teaching cadets how to plan an investigation. Down the hall, students in Surveillance Class were learning to operate digital cameras donated by the U.S. government.

Every two weeks, the program flies in U.S. federal prosecutors who run a mock trial exercise. The cadets are put on the witness stand and cross-examined about a case they have studied, a jewelry store robbery.

The trainers are trying to get Mexican police ready for U.S.-style oral trials, which the Mexican government plans to phase in over the next eight years. Mexico's current legal system relies mostly on the exchange of written documents.

So far, 2,052 Federal Police have graduated from the training program, and an additional 1,051 are taking classes now, program administrator Rafael López said.

The $4.5 million program is funded by the U.S. State Department's Narcotics Affairs Section and run by Kaseman LLC, a Virginia-based contractor. It also brings in police from Colombia, El Salvador, Spain, Canada, the Czech Republic and the Netherlands. The U.S. government is also providing aid in the form of helicopters, X-ray trucks and computer systems.

More than 10,000 people have died in drug-related violence in Mexico since President Felipe Calderón launched the anti-drug crackdown in 2006.

Colombians make up the bulk of the other foreign instructors. Many are graduates of similar U.S. training efforts in Colombia, where Plan Colombia — a U.S.-backed program — has helped the government beat back leftist rebels and drug traffickers.

Ariel Lozano of the Colombian National Police says he went through basic training with a U.S. instructor four years ago. Now he's a teacher here.

"We're hoping these students can learn from what we've gone through," he said.

Conspicuous Consumption Dead? Maybe For Now

USA Today

When I spoke with Rosewood Hotels CEO John Scott, I first asked him about the state of the luxury hotel business. It's widely know that luxury hotels - Rosewood's specialty - have been suffering more than any other type of hotel.

The most-expensive hotels and resorts are hurting more than, say, the Holiday Inns of the world because they're facing a double whammy - the recession coupled with the so-called AIG effect. The term was coined last fall after it was revealed that bailed-out insurance giant AIG hosted a lavish, spa-filled $400,000 corporate retreat at a St. Regis resort just days after receiving billions in federal aid. News about the trip sparked a national debate about corporate entertaining habits and, ultimately, drove an untold number of companies to cancel their five-star hotel gatherings, and luxury cruises.

Q. What is the state of luxury lodging right now?

A. Certainly luxury has come under a lot of pressure, both economic pressure or perception related. (Before the downturn) it was almost a badge of honor to have stayed in the biggest suite and to have paid the most for it.

In the current environment, people are redefining themselves by discretion. Conspicuous consumption is dead, at least in the near term. People are trying to find value. They're still traveling to luxury hotels, but they're looking for really unique experiences. In many instances, they really do want to seek out value and they may not be traveling quite as often.

Industry data shows that the luxury segment has been disproportionately hit vs. the other segments, (with revenue per available room) down 25% and even higher in some markets for 2009. We have 18 hotels that are geographically dispersed.

Q. What does the environment mean for Rosewood since you only operate top-rated hotels?

A. How I compare myself in a difficult environment is how we're doing vs. our competitive set. So, (our revenue per available room is) down overall 20%. If I look at the industry average, it's usually down 22% to 25%. And then, really what I focus on is not that big economic indicator. I look at each one of my hotels and ask: How are you performing in a down market? Are you continuing to hold your share?

We look at (revenue per available room) on individual hotels compared to their market competitors (for instance, The Carlyle vs. New York City hotels, Rosewood Mayakoba vs. other luxury resorts in Playa del Carmen, Mexico). In each market, we are holding or growing our revpar. I'm quite pleased to say that we are holding or growing against the competitors.

Q. Rosewood isn't exactly a household name, so does that in some way help you in today's world?

A. My team and I talk about that. It's good news, bad news for us. One, we are an emerging brand. We are reasonably well  known to a select group, but we're certainly not Ritz Carlton or Four Seasons. We're trying to get there, but we're not  there yet.

(Last year) we began to see companies red-line top brands as an easy way to save money. They said, "I don't want to see on your expense account Ritz Carlton or Four Seasons or maybe Mandarin Oriental." From that perspective, it's not entirely rational because the prices may be the same (as a Rosewood hotel), but it's certainly political. A lot of these (companies) are under external pressure, be it from the government or their employees. If you just laid off people and now you're staying at the Four Seasons, how does that look?

We've been broadly painted by the same brush. But that's part of the story.

Q. What's the other part of the story?

A. The other side is that there were a lot of aspirational travelers - people from lower levels within organizations who were trading up because of the exuberance of the times. The expectation of readily available credit, of a big year-end bonus. The expectation that the US economy was always going to be strong.

This aspirational group of travelers now has less ability to travel and stay in luxury hotels. We had some of them, and that piece of business has been hurt. But our core traveler tends to be a little bit older, tends to be the most senior and tends to be more affluent and more worldly. 

You Can Get Almost Anything At Wal Mart

USA Today

The world's largest retailer wants to keep its customers even after they die.

Wal-Mart has started selling caskets on its website at prices that undercut many funeral homes, long the major seller of caskets.

The move follows a similar one by discount rival Costco, which also sells caskets on its site.

Wal-Mart (WMT), based in Bentonville, Ark., quietly put up about 15 caskets and dozens of urns on its website last week.

Prices range from $999 for models like "Dad Remembered" and "Mom Remembered" steel caskets to the mid-level $1,699 "Executive Privilege." All are less than $2,000, except for the Sienna Bronze Casket, which sells for $3,199.

Caskets ship within 48 hours. Federal law requires funeral homes to accept third-party caskets.

The caskets come from Star Legacy Funeral Network, a company based in McHenry, Ill., that sells the same caskets for about the same price — some less — on its site, along with many others.

Star Legacy CEO Rick Obadiah said the response in the first week has been better than the company or Wal-Mart expected, though he declined to give specifics. A spokesman for Walmart.com also declined to release sales figures and downplayed the venture.

"Several online retailers offer this category on their sites," spokesman Ravi Jariwala wrote in an e-mail. "We are simply conducting a limited beta test to understand customer response."

But Obadiah said it is not simply a test. He said more than 200 Star Legacy products, including pet urns and memorial jewelry, and eventually about two dozen caskets, will be sold at walmart.com. The company also supplies similar types of products to online retailer Overstock.com and urns to CostCo's website.

Other parts of the Wal-Mart empire also sell funeral wares. The company's samsclub.com site sells casket floral arrangements for about $300.

Part of the business model is to get people to plan ahead: Walmart.com is allowing people to pay for the caskets over a period of 12 months for no interest.

The move gives more power to consumers and helps them avoid high mark-ups on caskets, which can often be several hundred percent, said R. Brian Burkhardt, a funeral director who blogs as "Your Funeral Guy."

"You can get a quality casket for $1,000 rather than pay $2,000, $3,000 or $5,000 in a funeral home. That's where it helps the consumer," he said.

The industry is not too concerned about Wal-Mart entering the market, said Pat Lynch, president-elect of the National Funeral Home Directors Association. Consumers have been able to buy caskets online and from other sources for years, with minimal effect on the business, he said.

Wal-Mart's prices for caskets don't differ greatly from those offered at funeral homes, most of which range from $500 to $5,000, Lynch said. He declined to give an average price, saying a casket selection is a personal one.

He said Wal-Mart can't offer one thing funeral directors do have: the ability to comfort someone during a trying time.

"There's no question in my mind as a funeral director for nearly 40 years that the most critical element is the human contact," he said.

Wednesday, October 28, 2009

Tiffany's Turning Diamonds Into 'Pipeline' Industry

from the Wall Street Journal

MOGODITSHANE, Botswana -- Tiffany and Co.'s iconic blue boxes have long cradled some of the world's most expensive diamonds. Now, an increasing number contain stones cut by some of the industry's least-experienced hands.

In a windowless factory in this African village, Tiffany is teaching more than 80 workers to transform raw diamonds into gems for Tiffany engagement rings. As novices recently pressed pea-size stones against whirling blades, a visiting Tiffany executive spied a problem.

"You can see the polishing lines!" said Mark Hanna, an Antwerp, Belgium-based vice president of Tiffany's diamond unit. "Tiffany diamonds can't have polishing lines."

Such are the risks for the New York-based retailer as it strives to transform its diamond business amid a decade of industry boom and bust. Tiffany has decided that to preserve and expand its $2.9 billion-a-year enterprise, it needs this factory -- with its high labor costs, low productivity and workers who staged a two-day sit-in this month.

Tiffany's is an extreme example of an industry shift that started during the recent luxury boom. Like most other diamond retailers, Tiffany long bought the vast majority of its diamonds pre-cut and pre-polished from industry middlemen. But with global diamond-jewelry sales soaring earlier this decade, Tiffany and others worried they would soon be fighting over dwindling supplies.

So Tiffany began venturing into an end of the diamond business it spent much of its 172-year history avoiding -- sourcing, cutting and polishing its own diamonds. "We decided to move backward" in the supply chain, says Chief Executive Michael Kowalski.

The retailer invested in mine operators, and in 2002 it began opening cutting-and-polishing plants in Canada, Belgium, South Africa and Vietnam. In the past two years it added similar operations in China and Mauritius. The in-house unit Tiffany founded in 2002 to run these plants, Laurelton Diamonds, now employs 1,100 workers, or 14% of the company's work force. It will supply more than 50% of Tiffany's diamonds this year -- up from 40% last year and none in 2003.

Others have made similar bets. Privately held retailer Graff Diamonds International owns a majority stake in a South African diamond wholesaler and polisher with facilities from Antwerp and New York to Botswana. Suppliers have made incursions on retailers' turf. Mining giant De Beers Group operates retail stores in a joint venture with LVMH Moët Hennessy Louis Vuitton SA. Canadian miner Aber Diamond bought a controlling interest in retailer Harry Winston in 2004. Indian jewelry manufacturer Gitanjali Gems Ltd. transformed itself into a global retailer starting in 2006, buying U.S.-based Samuels and Rogers jewelry chains.

Some industry analysts see risk in running operations that span from mining and manufacturing to high-end retailing and marketing. "[They're] all totally different types of activity -- and one needs tremendous expertise, skills, infrastructure to be truly competitive" in each, says Chaim Even-Zohar, principal of Tacy Ltd., a Tel Aviv-based industry consultant.

Such companies may miss out on savings that result from competition in these specialized areas, Mr. Even-Zohar adds, and may risk using some parts of their supply chain to subsidize others. "Vertical integration sounds great from a promotion and marketing perspective. But more often than not it doesn't make economic sense."

The stakes are especially high now that tight diamond supply has given way to slack demand. The global retail market for diamond jewelry is expected to fall 16% this year, to $65 billion. The U.S. will lose an estimated 900 specialty jewelry stores this year alone, following 1,500 closures last year. Industry players have retrenched: EB Alexander, and Signet Jewelers Ltd., the parent company of retailers Kay Jewelers and Sterling Jewelers, recently stopped buying rough diamonds and polishing them on contract in India, an initiative it started in 2005. A spokesman said the program broke even.

Tiffany is also feeling the pressure. Its inventory has swelled to $1.54 billion this year, up from $1 billion in early 2005. For the first time in recent memory, Tiffany says, it has lowered its prices for diamonds. The engagement rings it sells in the U.S. are priced 10% lower than last year. In all, the company expects a "high teens" decline in sales this year at U.S. stores open at least a year.

Tiffany acknowledges its lack of mining expertise. Although it reaped a large financial gain from its 2004 sale of a minority stake in the 40%-owner of a Canadian mine, it recently disclosed that it wrote off a $12.4 million investment in a small mining project in Sierra Leone. It also has written off loans of about $44 million to a former supplier whose mine has ceased operations. "I think we want to let the miners do the mining," said Chief Financial Officer James Fernandez.

But Tiffany says its cutting-and-polishing strategy is solid. In slow markets, the company says, it can rein in purchases from outside suppliers. When demand returns, it says, it will have guaranteed, lower-cost stocks. "There were many in the industry who thought we were foolhardy," Mr. Kowalski says, but the diamond-cutting operations "have exceeded our expectations."

If there's a weak link in Tiffany's global diamond chain, it's the polishing plant in Botswana. A glimpse into this secretive end of the diamond business shows the high costs, tricky logistics and labor unrest Tiffany is willing to shoulder to maintain its diamond pipeline.

Fancy Goods

Founded in 1837 as a New York stationery and "fancy goods" emporium, Tiffany bought large jewelry collections from French aristocrats fleeing revolution, and in 1878 paid $18,000 -- the equivalent today of $400,000 or more -- to buy the Tiffany Yellow Diamond in Paris. Co-founder Charles Lewis Tiffany gained the nickname "the King of Diamonds."

Even so, by 1991, diamonds accounted for only 17% of Tiffany's sales. To boost profits, the company began pushing diamond jewelry and opening new stores in Europe, Asia and the U.S.

In early 1999, Tiffany's new CEO, Mr. Kowalski, feared surging global diamond demand could hinder the company's efforts to stock its expanding retail network. That July, Tiffany purchased a minority stake in the 40%-owner of a mine in Canada's Northwest Territories.

Tiffany soon saw other openings. De Beers, which long controlled the world's rough-diamond supply, was paring back after years of sparring with European and U.S. antitrust regulators. When De Beers closed its high-tech diamond-sawing and -polishing operation in Belgium, Tiffany bought some of its machinery and hired former workers including Mr. Hanna, now Laurelton's vice president.

The new Laurelton unit built a cutting-and-polishing factory in Canada, bought a majority stake in a Johannesburg plant and acquired what would become its largest plant, a 570-person polishing operation in Vietnam.

But the elusive prize was Botswana, the world's largest producer of gem-quality diamonds since the 1980s. Its Jwaneng Diamond Mine is the world's richest by value of recovered diamonds. Botswana is also among Africa's least-corrupt countries, according to an index by nonprofit Transparency International. Securing a supply of stones here would help Tiffany allay mounting consumer concerns over "conflict diamonds," sold to fund wars or produced under unethical labor conditions.

Tiffany executives made their first reconnaissance trip to Botswana's capital, Gaborone, in 2004. "Do we need to be in Botswana?" Mr. Hanna recalls asking at the time. "We said, 'Yes, but we aren't quite sure how to do it.'"

Sparsely populated and AIDS-ravaged, Botswana has minimal manufacturing infrastructure and few direct flights beyond the continent. Tiffany faced further roadblocks. It couldn't get into mining, which was controlled by a 50-50 partnership between De Beers and the Botswana government. It couldn't buy rough diamonds locally, because the state mining venture sold its production only through De Beers' sales offices in the U.K. and South Africa.

Botswana's cutting operations were also unattractive: A parcel of diamonds polished here costs about $100 per carat, compared with $30 in India, according to industry estimates.

The calculation changed in 2006. Renegotiating its mining deal with De Beers that year, Botswana announced it would license 16 international cutting firms willing to build factories here. In return for training locals to polish diamonds, the government said, these firms would eventually gain the right to buy rough diamonds in Botswana.

Tiffany jumped. It took a majority stake in one of these firms, Rand Diamonds. Rand set up shop in an unmarked factory amid the used-car dealerships and military barracks of Mogoditshane, a former cattle post at the edge of the capital's urban sprawl.

With few Batswana versed in diamond polishing, the company put an ad in the Botswana Guardian newspaper for English-speaking applicants with a high-school-level education. To help winnow its 300 hopefuls, Tiffany/Rand screened for math aptitude. It gave candidates tweezers and timed how fast they could place 40 tiny metal sticks into holes set in a board.

When the factory opened in early 2007, its new hires worked on small and low-cost brown diamonds, overseen by experienced cutters imported on short contracts from India and Mauritius. "We are literally parachuting people in from one operation to the other," Mr. Hanna said.

Bruters and Polishers

Sitting at workstations arranged by task, bruters round the diamond pieces. Polishers add top and bottom facets, looking at magnified images of their diamonds captured by a lens near the whirring polishing wheel.

On the factory floor on a recent afternoon, a worker learning to make facets walked over to a Laurelton-designed training machine to double-check an angle. When he set the diamond in the protractor, a display flashed 35.2 degrees. Over the whir of grinding wheels, Mr. Hanna nodded in approval.

Trainees who learn such basics of bruting and faceting become "qualified" workers in four to six months, Tiffany says. About 30% fail. The rest start handling gem-quality stones, working at a pace of up to one polished diamond a day. Tiffany expects their pace to increase considerably.

For now, the plant's expatriate and local workers produce about 250 finished gems each week, primarily "round brilliant" stones, with 57 light-reflecting facets, for Tiffany engagement rings. About 85% of the stones are deemed "Tiffany qualified," and are forwarded to a Tiffany office in Pelham, N.Y., for grading.

Tiffany doesn't tell its customers where individual diamonds are mined or polished, and declined to say how much of its overall inventory is now sourced and polished in Botswana. "We really want the focus...to be on the quality of the diamond ring, not how it came to be," said Mr. Kowalski, the CEO.

Tiffany's payout came in April 2008, when approved cutting firms gained access to about 15% of the country's raw diamonds, in local sales valued at an estimated $550 million annually by the end of 2010. De Beers began to sell natural diamonds from various mines 10 times a year at bulk sales in Gaborone, where Tiffany's Mr. Hanna is a frequent buyer. Diamond merchandise now represents 47% of Tiffany's sales.

But tensions at the Mogoditshane plant are high. Local workers and managers, whose names were provided by a factory partner, said in interviews that the plant's expat supervisors do too much of the work themselves, slowing Batswanas' advancement.

Complaint Letter

"We are eager to learn about diamonds -- about cutting and polishing and the valuation and stuff like that...[But] it seems certain people are scared [about] sharing information with the locals," said one local who works in a management position. "It's a bit of a clash of cultures."

Workers aired many complaints in an Oct. 7 letter to the plant's managers, reviewed by The Wall Street Journal. Identifying themselves as "local staff," they wrote they hadn't qualified for performance-based raises, but that managers wouldn't show them the data on which those pay decisions were based. They called their work environment "prisonlike," writing that they had been threatened by a Belgian production manager they characterized as "corrupt, racist, vulgar, abusive, bully[ing]" and "not professional."

The next day, all but about five local laborers gathered in the facility's reception hall, refusing to work until the plant's director addressed their concerns, according to the plant's human-resources manager, Meshack Lejuta. The director sent Mr. Lejuta to address the workers. The sit-in stopped in the middle of the next day, Mr. Lejuta says, when he warned his fellow Batswana they could be fired because their strike was unlawful.

Responding to the letter and strike, Tiffany said workers expressed concerns as part of a union organizing effort. It said it intends to address grievances with a union representative, including "any tensions, wrongly characterized as racist, that may have arisen because skilled workers from other African nations and from Asia have been engaged for training purposes."

Mr. Hanna said Tiffany wants local workers to take over diamond cutting, key decisions and training of other locals. Foreign supervisors, whose numbers once nearly equaled those of the factory's local workers, now account for about one in five positions.

The Botswana government is pleased with Tiffany's commitment to train residents, says Akolang Tombale, a government adviser and recently retired secretary of Botswana's minerals department. Other polishing plants are experiencing strikes and slow training initiatives, Dr. Tombale says.

Tiffany, meanwhile, is pushing ahead. While buying raw diamonds in Gaborone's diamond district recently, Mr. Hanna looked out a window and pointed to an area of bush. Tiffany plans to begin clearing land there this year to build a 20,000-square-foot factory. Set to open in 2011, it will employ as many as 275 workers.

Mexicans Fleeing Violence Spur A Boom In El Paso

from the Wall Street Journal

Domingo Morales, at right, pours a round of tequila shots 
for patrons at the bar 33 on a recent Saturday night
This buttoned-down city on the Mexican border feels like a boomtown these days, as entrepreneurs fleeing drug violence in Ciudad Juárez head across the Rio Grande to open hip clubs and hot restaurants here.
While the violence has put a damper on tourism and Mexico cruises, it has provided an unexpected economic boost to El Paso, a city of more than 600,000 residents at the westernmost tip of Texas. The unemployment rate here was 9.8% in September, equal to the national average but far lower than in other border towns such as Brownsville and McAllen.

Cindy Ramos-Davidson, chief executive of the El Paso Hispanic Chamber of Commerce, said her staff was swamped with requests from Juárez businesspeople wanting to settle in El Paso. They started more than 200 companies in the 12 months ended July 31, a 40% jump from the same period last year.

"It's the largest migration of wealthy Mexican nationals [to El Paso] since the Mexican Revolution," said Beto O'Rourke, an El Paso city councilman, referring to the decadelong rebellion that began in 1910.

Not all newcomers to El Paso are refugees from violence. Other factors helping to boost the city's economy include a multibillion-dollar expansion of Fort Bliss, a military base that is attracting thousands of soldiers and aiding the local building industry, said Bill Gilmer, a senior economist at the El Paso branch of the Federal Reserve Bank of Dallas.

But El Paso is drawing hundreds, perhaps thousands, of Juárez residents looking for a safe place to live.

There is no official estimate of the influx, but real-estate agents report a bump in home sales to Juárez residents. The apartment occupancy rate is about 92%, higher than in Houston apartments and Dallas apartments where occupancy rates have slipped below 90%, according to MPF Research, which compiles apartment market information.

It isn't hard to understand why: The number of murders in Juárez exploded in the spring of 2008 and grew to more than 300 a month by August and September 2009, the highest monthly levels in a particularly violent year.

One migrant is Aril Anzures, who recently opened a branch of his family's burrito business on busy North Mesa Street in El Paso. After several kidnapping attempts, the Anzures family moved north earlier this year, though they still own seven restaurants in Mexico.

"It was getting pretty awful," Mr. Anzures said. "We're not rich people, but we had to travel with bodyguards."

He said he didn't worry about his safety in El Paso, where Burritos Crisostomo offers the same freshly made flour tortillas and fillings as in Mexico. Many of his clients are fellow Juárez expatriates. Business is so good, said Mr. Anzures, that he expects to open another location in El Paso next month.

Rafael García used to manufacture plastic parts for vacuum cleaners but fled Juárez after being kidnapped. He is now a restaurateur in El Paso, serving dishes such as ravioli stuffed with cuitlacoche, a black corn fungus considered a delicacy in Mexico.

New arrivals like Mr. García are importing a nightlife that didn't exist in El Paso. In the past, many people who wanted a good time would cross the river into Mexico.

Lariza Varela, a 28-year-old who works for a financial firm, has cut her weekend visits to Juárez in recent months, turning instead to a new El Paso nightclub called 33.

"El Paso is really boring, but here they play music in Spanish and it's almost like you are over there," she said. A gaggle of waiters make sure clients don't have to get up to get more beer, just like in Juárez, and every weekend a jovial musician named Walterio Magdaleno sings mariachi songs.

Carlos Chávez said he and his brother opened the bar to replace the one they closed in Juárez after patrons became too worried about drug violence to go out for drinks.

Despite fears of violence spilling across the border to El Paso, the city remains one of the safest in the nation for its size, according to federal statistics, with 10 homicides in 2009.

In Mexico, some are lamenting the flight of citizens. "You can definitely feel their absence," said Lucinda Vargas, director of a nonprofit that promotes development in Juárez, noting that the departures further complicate the task of reclaiming the city from the drug lords.

But for certain El Paso residents, the recent arrivals are a clear boon. Jorge Villegas, a contractor, said that more than half of his construction projects are for people from Juárez. And Pedro Gómez, who owns a landscaping business, said he has redone the yards for many recent Juárez transplants.

Amercans Still Wary Of Economy


The housing market and stocks may be looking up, but Americans just can't shake their job worries.

In a sign that talk of an economic recovery has yet to soothe a recession-battered nation, consumer confidence fell in October and came in well below what analysts were expecting.

For stores, the reading is reason to worry that holiday sales might be even worse than they feared.

In a separate reading, the Conference Board reported shoppers' sentiments about the state of the economy are the gloomiest in nearly three decades. Americans reported they plan to cut back on spending, in large part because they don't trust the job market.

The unemployment rate is just under 10 percent, and economists say it could hit 10.5 percent next year.

"It's hard to get a job, and the ones that are out there don't pay enough," said Mitch Hicks, a 33-year-old from Hillsboro, Ore., who lost his job at a cabinet company a year ago and is still struggling to find work.

The board's index of consumer confidence fell to 47.7 in October from 53.4 in September. Economists were expecting only a small decline, to 53.1. It takes a reading of 90 to indicate an economy on solid footing, 100 or more to indicate growth.

Nearly half the 5,000 households surveyed by the board said jobs were hard to come by, and about one in four said they expected fewer available jobs in the coming months.

"We've gone down so far that it's kind of like when you fall into a deep hole and you're down 20 feet and you climb up by three feet," said Brian Bethune, an economist at IHS Global Insight. "You're better off than you were before, but you've still got a long way to go to get out."

There have been signs of recovery elsewhere: Corporate earnings are getting stronger, the stock market has regained much of its lost ground and figures due out Thursday are expected to show the recession officially ended in June or July.

And there was another indication Tuesday that the housing market is stabilizing. The Standard & Poor's/Case-Shiller price index showed home prices in August climbed for the third consecutive month, helped by a popular tax credit for first-time homebuyers.

But all the improvements haven't translated to economic security.

Sharon Jerndt, 47, is trimming her holiday gift list because she's scared of racking up credit card debt. She's also eating at home and skipping other indulgences.

"I'm trying to only pay with cash," said Jerndt, who works as a court reporter in Chicago.

Economists pay close attention to consumer confidence because it's a good barometer of the attitude of shoppers, whose spending on goods and services ultimately fuels 70 percent of the U.S. economy.

At best, economists expect holiday sales to be flat from a year ago, when businesses recorded their biggest declines in at least four decades.

Americans are "quite pessimistic about their future earnings, a sentiment that will likely constrain spending during the holidays," said Lynn Franco, director of The Conference Board's Consumer Research Center.

The confidence index sank to a historic low of 25.3 in February. It's still well below the reading of 61.4 last fall just before Lehman Brothers collapsed, the beginning of the financial crisis.

Monday, October 26, 2009

Shopping Through Social Media

From eMarketer

Online shopping is more than just transactional

People have long shared product opinions with friends and family through word-of-mouth. Today, social media tools enable consumers to extend their connections and conduct commerce in powerful new ways.

As people spend more time on social networks, retailers feel pressure to be there as well. Twitter is a hotbed of experimentation for retailers that see it as a channel for customer service, promoting the deal of the day and more. Facebook and its third-party developers are creating e-commerce applications on the site for everything from reel mowers, to chess sets and estate jewelry. Meanwhile, retail Websites are bolstering their social commerce features.

“While user ratings and reviews are a mature form of social commerce with proven benefits, e-commerce on social media platforms, such as Facebook and Twitter, is in an early stage,” said Jeffrey Grau, eMarketer senior analyst and author of the new report, “Social Commerce on Facebook, Twitter and Retail Sites.” “People are spending more time on social networks and are able to conduct more of their regular activities on these platforms. E-commerce on social networks has barely tapped that potential.”

But forward-thinking retailers want to bring their Web stores to the environments where their customers like to spend time. As a result, almost three-quarters of the merchants in the Internet Retailer Top 500 Guide have a presence on at least one of the major social networks or social shopping sites.

Social network users are a highly coveted group of consumers. Across all age brackets, they were more likely than average to make an online purchase, of shower enclosures according to a May 2009 survey by Anderson Analytics.

What’s more, social network users are sharing recommendations with greater frequency than generally expected. A Q1 2009 Razorfish survey of social network users found that some 29% reported sharing their views online at least every few weeks, while 10% said they made such contributions at least every few days.

Social networking is expected to play a large role in online Christmas shopping this year, and customers can be expected to share reviews for storage products:

“Leading companies know they cannot afford to wait for customers to visit their sites,” added Mr. Grau. “They need to place their virtual storefronts where their customers congregate. This implies the nature of e-commerce is shifting from a transactional experience to a social one.”

Sunday, October 25, 2009

Diapers.com Has A New Idea: Keep The Customer Satisfied

From the Wall Street Journal

What Zappos.com did for shoes, Diapers.com is seeking to do for all manner of baby products.

Red Bank, N.J.-based Diapers.com, which just raised $30 million in funding from several venture firms, is known for its over-the-top focus on customer service.

Owned by Quidsi Inc., Diapers.com provides free shipping and delivers overnight to two-thirds of the country if an order is received before 6pm; the rest of the country gets orders within two days. The company also has a no-questions-asked return policy with free shipping on returns.

“We empower our reps to take care of the customer at really any cost,” said Marc Lore, co-founder and chief executive of the company. “If we don’t have something in stock we’ll point to a competitor that does. We do just about anything to insure customers have a good experience with the Web site.”

Sound familiar? Zappos, which recently agreed to be acquired by Amazon.com Inc. for $847 million in cash and stock, is known for its attention to customer service in the kids shoes and clothing business.

Diapers.com and its investors hope the company can turn doting parents into its own fanatical customers. Underneath a snazzy Web site with cute pictures of babies are three warehouses that efficiently churn out thousands of products like diapers, car seats and strollers. The 130-employee company has invested heavily in its infrastructure, building its own customized system for supply chain and inventory management and fulfillment, complete with robots moving products around.

“We live and die by the ability to get our products shipped out as fast and at low cost as possible,” Lore said. “It’s as much a logistics play as a front-end play.”

That’s different from Lore’s previous venture. Lore and his partner Vinit Bharara previously founded ThePit.com, an online marketplace for trading baseball and sports cards that was acquired by Topps Co. Inc. in 2001 for $5.7 million in cash.

Lore wouldn’t disclose Diapers.com’s revenue but says the company is on track for 100% growth this year compared to last year. The company was recently named the fastest growing retailer by Inc. magazine.

Diapers.com’s latest Series E funding was led by New Enterprise Associates, with participation existing investors Accel Partners, Bessemer Venture Partners and MentorTech Ventures. Diapers.com will use the new funds to build out its selection of products offered and build out its site. The company already has a feature that customizes the homepage for people based on their children’s age and other factors. Next month Diapers.com will add a baby registry service that will make it easy for friends and family to buy baby products for others.

Toys Я Us Faces U.S. Antitrust Inquiry

from the Wall Street Journal

Federal antitrust enforcers are investigating whether Toys "R" Us Inc. used its market clout to stifle discounting by retail competitors and force consumers to pay higher prices for baby products.

The Federal Trade Commission is investigating whether the retail giant may have violated an 11-year-old FTC order to abstain from anticompetitive tactics, according to people familiar with the matter. It is unclear whether the probe will result in any enforcement action.

Toys "R" Us consented to the decree in 1998, after an administrative law judge ruled that the retailer illegally wielded its market power to strong-arm toy makers into boycotting Costco Wholesale Corp. and other discount warehouse clubs by threatening to stop selling any toys also being sold by the clubs.

Toys "R" Us could face a new FTC complaint for allegedly trying to fix the prices of baby products, people familiar with the matter said. The products include strollers, high chairs, car seats and breast pumps sold at Babies "R" Us, a unit of Toys "R" Us.

A spokeswoman for the Wayne, N.J., company said, "The FTC began looking into the issue a year ago and we have cooperated fully since that time." An FTC spokesman declined to comment.

The probe is a signal that federal enforcers are taking a more aggressive role in one of the most contentious issues in retailing: whether manufacturers and retailers can agree to set a minimum retail prices on products.

FTC investigators are expected to review numerous emails exchanged among Babies "R" Us and various manufacturers.

One set of email exchanges filed in a class-action case appears to show Babies "R" Us urging the Britax Childcare unit of Carlyle Group LLC to get Target Corp. to raise prices. The subject field in the email exchanges said: "Target has not raised prices."

"Did Target commit to you when they will raise their prices?" Cesar Garcia, director of merchandising at Babies "R" Us, allegedly asked in an email dated Jan. 6, 2006.

According to the emails, a couple of hours later, Scott Doerstling, a Britax representative at the time, allegedly responded: "Target said they would honor the new MSRP's [Manufacturer Suggested Retail Price] ... please be assured that Britax's goal is to have uniform MSRP's in the market place."

Five days later, according to court records, Mr. Doerstling allegedly sent another email to Mr. Garcia reassuring him that "We are in communications with them [Target]. We understand your position and are doing what we 'legally' can do to ensure MSRP harmony in the marketplace."

Toys "R" Us didn't reply to an email seeking comment about its remarks regarding Target's prices.

Another court document suggests Babies "R" Us canceled orders for some products from Medela Inc. of Switzerland because the company wasn't being tough enough on Internet retailers that didn't abide by minimum-pricing agreements. An internal Medela memo filed in the case indicated that Medela, under apparent pressure, cut off supplies to 17 Internet retailers.

Medela officials couldn't be reached for comment.

The FTC has requested documents from two law firms -- New York-based Faruqi & Faruqi LLP and Hagens Berman Sobol Shapiro LLP of Seattle -- that are litigating cases alleging price-fixing against Babies "R" Us in U.S. District Court in Philadelphia, according to people familiar with the matter.

Kendall Zylstra, a Faruqi attorney representing two online retailers, Babyage Inc. and Baby Club of America Inc., said he had been contacted by the FTC "pursuant to the investigation."

Elizabeth Fegan, a Hagens Berman attorney representing a group of consumers in a class-action suit against Babies "R" Us, also confirmed being contacted by the FTC in same probe. That suit also is being heard in U.S. District Court in Philadelphia.

It isn't clear whether the FTC also is looking at the five manufacturers named as defendants in the lawsuits: Maclaren Ltd. of Britain; Italy's Peg Perego SpA; Sweden's Baby Bjorn AB; Medela; and Britax. The companies have denied any wrongdoing.

For nearly a century, price-fixing agreements generally were illegal. But in 2007, the U.S. Supreme Court ruled such pacts could be lawful if the benefits to consumers -- better service, for example -- outweighed the harm of higher prices.

The high-court ruling emboldened a growing number of manufacturers to establish minimum-pricing agreements with retailers. Under such pacts, discount retailers risk having their supplies cut off if they sell the goods below the fixed minimum price.

In a speech delivered last week to the National Association of Attorneys General in New York, Christine Varney, the new head of the U.S. Justice Department's antitrust division, called enforcement under the Supreme Court's pronouncement "one of the most important challenges facing state Attorneys General."

Ms. Varney added: "There is a greater likelihood that a [fixed price] restraint is anticompetitive if retailers coerced the manufacturer to adopt it."

How Many Shopping Days Until Christmas? Not As Many As You Think

Howell County News

It may seem early to talk about it.

In fact, I may talk about it so much between now and then that you get sick of it.

I understand that Halloween is still more than a week away, but if you haven’t really looked at your calendar – really looked at it – in the past couple of weeks, I’d encourage you to do so.

The official countdown to Christmas doesn’t begin until Thanksgiving, but in reality, retailers start much, much earlier.

Many local retailers have been stocking store shelves as full as they can get with Christmas storage bags, chess sets, and John Deere toys, over the past month or more, all hoping to boost sales this year.

As for Springfield retailers, I was surprised when, on Sept. 23, I was looking through the Halloween section of a “stuff” store. I popped around the corner of the aisle I was on, which was crammed with Halloween gear, and what was just around the corner?

You guessed it. Christmas stuff was already in place, and it was still more than a month until Halloween.

While I’m not too fond of thinking about Christmas before we’ve even had Halloween, the reality is, we have to. Especially this year.

This year, more people probably are shopping a little earlier, or at least that’s what retailers have told me. With people squeezing pennies until they hurt, it only makes sense to spread out expenses as much as possible.

Of course, with many folks out of work or working less than they have in the past, it’s also going to be more competitive for retailers who are making a run at your Christmas wallet.

And that’s why, more than ever, I want to encourage you to shop locally.

Over the next few weeks – nine newspapers before Christmas, but who’s counting? – I’m going to encourage you on more than one occasion to spend those hard-earned dollars at home. We’ll talk about sales tax and other reasons to shop locally.

But for starters, I want you to think about the gripes and grumbles you may have had about a local business.

Right after that, ask yourself if you talked to a manager or clerk – in a friendly, positive and constructive manner – about your concerns. Did you really give the business a chance to meet your expectations?

Then, ask yourself another important question.

So if you don’t like the selection at a local store – a grocery, ALCO or whatever – how would you like it if you didn’t have the choice at all?

As a person who spends a good chunk of my time on the road visiting our advertising customers, I cannot emphasize enough how important it is to shop at home.

Our local businesses employ our friends and neighbors, and are willing to go the extra mile. Example? When I was pregnant with our daughter who turned 3 this week, our local pharmacist returned a call we left on his home’s answering machine well after 10 p.m. I somehow had run out of insulin and was very worried about making it until morning. He offered to come into the store for my husband to meet him.

I doubt you’ll find that kind of a willingness to help in a big city or from the big “stuff marts” that undoubtedly will soon start advertising their Christmas specials.

And though it has been a very difficult year for many businesses, the folks I know also remain positive.

Each time I call on a certain female customer, she responds that she’s happy to still have the doors open to service customers.

She says it hasn’t been a good year, but is quick to add she’s been blessed.

These same business owners are the ones who buy popcorn from your Boy Scout, donate to the benefit you’re organizing and whose names are on the backs of T-shirts far and wide for another event or cause they’ve supported.

Most businesses also understand they have to stay competitive, and will do their best – but can’t compete on everything. When stores are buying in quantities of 10 or 20, they can’t be as competitive as another store buying in the thousands.

Also, your local businesses know you. They know the names of your kids, grandkids and pets. They remember an ailment or illness of a family member and ask you about it.

They also know that this has been a tough year for their customers. And they understand that, as local communities, we’re all in this together.

Support of a local business helps support local charities who are helping loved ones who are out of work. And the chain goes on.

But at the end of the day, there’s one basic reason for you to keep your dollars at home.

Your local businesses need you.

For every holiday purchase you plan to make, I encourage you to at least check prices with your local retailers who offer what you want. Do your best to select as much as you can locally before heading off to what may or may not be greener pastures for shopping.

Shopping at home has long been a phrase championed by local chambers of commerce.

This year, it’s more than that.

It’s never been more important.

Employers Still Holding Off On Hiring

 Wall Street Journal

Companies across the economy are holding off on hiring even as the profit outlook improves, amid economic uncertainty and their own success at raising productivity in rough waters.

Hiring always lags behind in economic recoveries, but the outlook this time is worse, many economists say. Most forecasters now expect a prolonged period of high unemployment, even though the government is expected to report next week that the economy grew in the third quarter, after four quarters of contraction. That is sure to frustrate the jobless and could be a problem for the Obama administration.

There are several major factors behind the trend, which is coming on top of sharper-than-expected job cuts in the recession. Many businesses have nagging doubts about the durability of the upturn, attributing much of the recent growth in orders to a move by their customers to rebuild inventories and to government stimulus spending, rather than underlying strength in their markets.

The average workweek is now down to 33 hours, the lowest since records started in the 1960s

Businesses also face uncertainty about the potential costs of regulatory moves -- such as an expansion of health care and climate legislation -- that could drive up costs. And many employers have learned how to produce more with a smaller number of people than they previously thought possible.

That is what happened at D'Addario Co. in Farmingdale, N.Y., one of the world's leading producers of guitar strings. Business began reviving in August, roughly when economists believe the recession ended. Chief Executive James D'Addario credits an influx of orders from retailers and China's guitar factories. But he sees much of this growth as a reaction to the slump earlier this year, when his customers were frantically slashing inventories to conserve cash. "Now, the pipeline's empty," he said.

Still, Mr. D'Addario sees no reason to start hiring. He shed 150 workers and cut hours during the darkest days of the slump, bringing the head count down to 950. A host of efficiency moves -- such as teaching many workers to inspect their own work, which let D'Addario go from 17 inspectors to 10 -- has saved so much labor that there's no need to hire now. "I estimate we can produce 15% to 20% more with the same number of people," he said.

The same story is being repeated across the economy -- in factories, hotels and banks. The average workweek is now down to 33 hours, the lowest since records started in the 1960s. Productivity, or output per hour of work, grew at a 6.6% annual rate in the second quarter, as employers shed workers faster than they cut output. It was the largest increase in any quarter since 2003. Productivity grew at a 2.5% pace from 2000 through 2008.

"Businesses have been so aggressive in cutting labor input that productivity rose noticeably in the first half of the year," Federal Reserve staff economists told officials at their September meeting, according to minutes released last week.

Some employers have started calling back workers, and some are expanding. Steel mills and auto factories have reopened. Cree Inc., a Durham, N.C., maker of lighting fixtures, earlier this month said it would add 275 jobs as part of an expansion.

But most employers haven't resumed hiring. The U.S. has shed 7.2 million jobs since the recession began in December 2007, the deepest contraction since the Great Depression. Even if the job market started spitting out jobs as fast as it did during the 1990s boom, adding 2.15 million private-sector jobs a year, the U.S. wouldn't get back to a 5% unemployment rate until late 2017.

"Given the uncertain outlook in the economy and credit conditions, firms are reluctant to hire," says economist Mark Gertler of New York University. "This is a very tough labor market. It looks like it's going to be a slow process."

At the Sheraton Maui Resort & Spa in Hawaii, general manager Chip Bahouth said the recession prompted his hotel to look hard at ways to save money.

Service businesses pose distinct challenges. Unlike factories -- which can automate -- a service business is defined by people vacuuming rugs and scrubbing toilets.

Even so, Mr. Bahouth found ways to nip and tuck. The coffee cart in the hotel lobby used to open at 6 a.m., but sold only about 10 cups in the first hour. So the hotel started opening it at 7, reducing one work hour each day for the cart operator. Similarly, the hotel used to have two full-time carpet cleaners who ran lumbering machines that deep-cleaned about 10 rooms each a day. By staging big drums of cleaning solution in closets on each floor, workers no longer have to make trips to a basement stockroom to refill their machines, and each can now clean up to 15 rooms a day.

Productivity growth is ultimately good for companies, workers and the economy. More productive companies have greater profits, which allow them to pay higher wages. That also allows the economy to grow faster without generating inflation. But in the short run, stretching existing workers means hiring fewer new ones.

Another reason not to hire new workers: Many companies already have excess labor on hand. After reducing hours and cutting overtime during the recession, they can easily increase production by simply adding hours for existing workers.

There's also the fear factor. As companies cut back, remaining workers often picked up the slack. At 352 Media Group, a Web design firm in Newberry, Fla., head count has been reduced to about 40 from 50 a year ago. But Peter VanRysdam, a company principal, said he notices a lot more cars in the parking lot when he gets in each morning.

In a two-week pay period in January, before the layoffs, Mr. VanRysdam said, the company had 1,065 billable hours across 33 Web developers. In the most recent pay period, the company had 1,329 hours from only 26 people.

"After the cuts were made, the people that are still here...are motivated that much more," he said. "They know they can't just put their résumé out there, because this is happening across the industry."

Saturday, October 24, 2009

Federal Government Helping Residents Move From Sub-Standard Apartments

News-Journal Online

Better days should be ahead for most residents of the Daytona Village Apartments -- people who say they've endured faulty appliances, rampant cockroaches and constant tussles with the owner over everything from repairs to federal government checks they should receive each month for utility bills.

The U.S. Department of Housing and Urban Development is helping tenants of the Keech Street complex who receive HUD's rental assistance each month to move in the next few weeks to other private rental properties and take their subsidies with them.

Saying property owner Surujnauth "Oscar" Bharrat has failed too many inspections, HUD is immediately cutting off the roughly $30,000 in rental assistance it sends each month to Bharrat and sending the money instead to the Daytona Beach Housing Authority for distribution.

"We're painfully aware of the conditions and that's unacceptable," Housing Authority Senior Case Manager Debbe Noland told about 50 residents gathered Thursday afternoon to explain the relocation process.

"You have to remember, we've been dealing with an owner who's non-compliant," HUD Senior Project Manager Debra Varley said later in the meeting.

Bharrat did not attend Thursday's meeting, but in an interview late last week said he's the victim. He said he's been set up by tenants who refuse pest control and trash his property so it will fail inspections, allowing them to relocate to nicer rental properties on the government's dime.

The Orlando area man also accused some residents of pocketing their utility subsidies and stealing power from neighboring apartments. He said he ripped out breaker and meter boxes to stop them. Now the city is taking him to court for pulling out those boxes, said Sgt. Bill Bailey, a Daytona Beach police officer in charge of code enforcement.

Bharrat, who said he has spent tens of thousands of dollars on repairs, filed for bankruptcy protection two weeks ago. He said he has no intention of walking away from the property he has poured his life savings into, but he's probably going to lose many of his tenants over the next month or two.

Some who don't meet the Housing Authority's tougher standards for Section 8 assistance will lose their federal rent subsidy, but they don't have to move from the Daytona Village Apartments if they can figure out how to cover their rent.

This could results in many new developments throughout the state of Texas. The Housing Authority's new enhanced standards for Section 8 assistance and federal rent subsidies could begin to influence rent levels in these Texas communities: Houston apartments, Dallas apartments, Fort Worth apartments, San Antonio apartments, Austin apartments. For more information and to find new apartments for rent in Texas, visit lucktruck.com.

At the meeting Thursday, when asked who wanted to stay at the Daytona Village Apartments, no one raised a hand. If any of the 54 families who receive subsidies do want to stay and continue to get federal assistance, the units will have to pass city inspections.

It's possible the property could be condemned, and if that happens it would have to shut down until repairs were made, said Emory Counts, the city's director of Community and Economic Development.

Earlier this week, tenant Ericka Sipp said she had already started looking for a new place to live. Sipp, a 38-year-old mother of three, said she did not have power for a month after Bharrat ripped out her main circuit breaker.

"I'll be a thorn in (Bharrat's) side until the ending chapter of Daytona Village," she said.

Tenants are not the only ones unhappy with Bharrat. The city has been trying for more than a year to collect past-due water bills, now totalling about $51,000, Bailey said.

Bharrat is also scheduled to go before the city's code enforcement board next month on charges that he has done work at Daytona Village Apartments without permits, Bailey said.

Cyberspace Trade Shows Bring Action To The Desktop

NY Times

THERE are no stale bagels at virtual trade shows. And no free knickknacks. But this new kind of gathering, which takes place in cyberspace, does deliver something real: sales prospects with more than a passing interest in your products or services.

More businesses are holding conferences and other events online rather than in hotel ballrooms or convention centers. Like their real-world counterparts, virtual trade shows come with panel discussions and speeches by industry experts, exhibit booths from sponsoring companies and open spaces where attendees can mingle amidst trade show displays.

While still an experiment, virtual events have the advantage of reducing costs associated with staging a physical convention with trade show booths. According to executives at companies that have taken the plunge, exhibitors can track online visitors’ activity, helping them determine who might be a serious prospect.

“We can show people not just who came in and how long, but really show the specifics of the content that they interacted with,” said Robert Rosenbloom, a co-founder and chief executive of PlatformQ, a virtual event start-up in Needham, Mass., that is planning its first two events for this fall.

Because visitors to virtual trade shows tend to feel they are more anonymous online than in person, they often spend more time looking through information than if a sales representative were staring at them from across an exhibit booth, Mr. Rosenbloom said.

A hot prospect might leave behind traces of five or six points of contact, said Les Yeamans, the founder of ebizQ, a media company in New Rochelle, N.Y., that produces dozens of online conferences each year. “It’s a very efficient ecosystem,” he said.

EbizQ was an early customer for Unisfair, a Menlo Park, Calif., company that has been host to more than 250 virtual events. Founded in 2002, Unisfair has developed an Internet-based environment not unlike the 3-D world of the video game Second Life, except that it showcases exhibit booths, presentations and other information related to a particular event or topic.

“We have to make sure that within 30 seconds to a minute that people know what’s possible,” said Brett Arslaner, vice president for marketing at Unisfair.

The cost of virtual trade show exhibits depends on variables like the number of sessions it hosts simultaneously as well as the number of attendees and the number of exhibitors, but it is generally far less than a physical production.

“This makes all sorts of sense for a large distributed audience,” he added.

Mr. Arslaner said many Unisfair clients, including Hewlett-Packard, which employs the technology for meetings of its customers in more than 90 countries, consider virtual events a complement to regular conferences. “By no means do we advocate that physical events are going away,” he said.

Keeping the intimacy of a live event was a big concern for Richard McDonell, a group manager of product marketing for the PXI and Instrument Control division of National Instruments.

“We wanted to preserve the eventlike feel and the sense that this was something important to attend,” said Mr. McDonell, who converted an 18-city industry road show, called the Automated Test Summit, into a consolidated virtual conference last May.

The online conference — and an archived version that remained available for 90 days — drew 1,950 visitors. That compared favorably with the roughly 100 people the previous year’s show attracted at each stop. It also included more participants from abroad.

The event delivered more customer prospects than anticipated more quickly, while significantly reducing costs for the sponsors, Mr. McDonell said.

Many companies have begun offering virtual trade-show services, although none has the name recognition of Unisfair, said Jeffrey Mann, an analyst with Gartner, a market research firm.

“I think a lot of the basic hurdles and problems are going away,” he said.

PlatformQ plans to provide online conferences for financial services, educational, health care, real estate and construction businesses and industry associations.

The common trait of a successful event — real or virtual — is good content, and trade show rentals Mr. Rosenbloom said. “The reason people come to events is the programming,” he said.

As Mr. Mann echoed: “You want to see busy booths, run into friends. You want to avoid the sweaty rooms and waiting for taxis, but you want to keep the buzz and the live feedback.”

Luxury Costs Less In Latin America

NY Times

LATIN AMERICA has long enticed budget-oriented travelers with its low prices, and as the global economic crisis lingers, the bargains are increasingly tempting — especially when it comes to a luxury vacation.

Meals are often half the cost of their European counterparts, hotels are generally more luxurious than what you’d get for the same money in the States, and spa treatments and other private services are so affordable you feel good about splurging, because, really, you’re saving — or at least that’s what you tell yourself.

And things are getting cheaper still. Hotel prices across Latin America fell by 18 percent in the first half of 2009 compared with the same period last year, according to Hotels.com’s Hotel Price Index. That’s slightly steeper than hotel rate decreases in North America and Europe.

Some of the best places for affordable luxury are Argentina and Mexico, in part because of swine flu scares earlier this year. Also, the dollar is going farther than a year ago, at about 13.5 Mexican pesos (versus 12.5 in October 2008) and 3.9 Argentine pesos (against 3.3). And both countries have long attracted well-heeled tourists, with established resort towns and bustling cities.

Stylish boutique hotels in Buenos Aires like the Craft, Moreno and cE Hotel de Diseño, are listing rooms for less than $100 a night at Tablet Hotels, a booking site that specializes in design-oriented hotels.

In Mexico, some of the best deals are at ultra-luxurious megaresorts along the Riviera Maya, just south of Cancún, like Grand Velas, an all-suites resort and spa, which was just opening as the travel downturn hit. The Banyan Tree Mayakoba, where villas have their own plunge pools, is offering 50 percent off two-night packages with daily breakfast, a massage and dinner for two. Nearby, the Mandarin Oriental has a seven-night Holiday in Mexico deal that includes breakfast, airport transfers, dinner for two and a private yoga class from $354 a night until Dec. 18. Earlier Swine Flu scares have also brought down the prices for Mexico cruises.

Not interested in the beach? Starting rates at the Four Seasons in Mexico City are $225 a night on weekends, not bad considering that it’s $70 cheaper than the Four Seasons in Austin ($295). A Swedish massage costs about $100 at the hotel in Mexico versus $130 in Austin.

Large tour operators, such as Globus, recognize the good value in Latin America and are adding more itineraries and new destinations that emphasize luxury for less. Abercrombie Kent, the high-end tour operator known for its luxury safaris, is expanding its 2010 “signature” Latin American itineraries. The packages, designed for travelers who don’t want to take a group tour but still want the Abercrombie Kent experience, include the same comforts and sightseeing of its group excursions but with private guides from $5,995 a person for a nine-day trip to Ecuador.

For travelers looking to spend less, Group Voyagers, the parent company of Globus, Cosmos, Monograms and Avalon Waterways, recently added four Latin American itineraries, including Ecuador and the Galápagos from $3,379 and three Monograms packages from $1,299 for eight days in Costa Rica.

The strategy seems to be paying off. Collette Vacations, based in Pawtucket, R.I., recently reported that revenue for its Discover South America tour more than doubled from last year. Interest in Peru in particular is picking up. Its 12-day trip through Peru, visiting Machu Picchu, Lake Titicaca, Lima and the Paracas National Reserve, with rates from $2,449 a person, is already beginning to fill up for 2010. Holland America Cruise Lines have recently announced tours to South America in 2010 and 2011.

“Travelers start out thinking it’s too exotic and therefore out of reach,” Allison Flint, Collette’s product manager, said in a statement. “But then are pleasantly surprised at how affordable it really is.”

Though airline cutbacks have reduced flights to some regions, low-cost carriers have helped bring fares down in many markets. No-frills Spirit Airlines, for example, which is based in Miramar, Fla., and sometimes sells tickets for as little as $9, began service to Latin America in 2007. It now has routes to Costa Rica, Guatemala, Honduras and Nicaragua in Central America, and to Peru in South America.

In Brazil, low-cost airlines, like GOL Linhas Aéreas Inteligentes and WebJet, now account for a significant portion of Brazil’s domestic market. And in Mexico, InterJet and Volaris have expanded service.

Tour operators are also going beyond the big cities and popular destinations and offering more trips off the beaten path. Country Walkers, based in Waterbury, Vt., for example, used to visit only popular places like the Galápagos in Ecuador. While it still offers a Galápagos add-on, the company is focusing this year on the Ecuadorean Highlands, with its working farms and the Indian markets of the Imbabura region.

The tour is not exactly cheap at $3,598 a person, but all meals and accommodations are included, and obtaining the kind of access and local insight the trip offers would be time-consuming and more difficult on one’s own. Travelers spend nine days with personal guides trekking from one hacienda to the next, past farms where locals still use ox-drawn plows and spectacular backdrops with snow-peaked volcanoes.

There are perks, especially if you’re a big shopper. Handmade leather handbags from the town of Cotacachi, for example, can be bargained down to about $20. “The same would retail for at least $100 in the U.S.,” said Sonya Bradley, the Latin America tour manager for Country Walkers.

For affordable luxury outside the city of Buenos Aires, Vanessa Guibert Heitner, of Limitless Argentina, a luxury travel agency, recommends that visitors head northwest to the provinces of Salta and Jujuy, to explore indigenous ruins, colonial architecture and the natural scenery of the region. Legado Mitico Salta, a boutique hotel within walking distance of colonial cathedrals, museums and restaurants, starts at $170 a night with breakfast. For $295 a person, Limitless Argentina can arrange a private tour of Salta and the wine belt of Cafayate, about two hours away, including visits to artisanal goat-cheese makers, hikes through canyons and a private food and wine pairing at a winery.

It’s also a good time to visit Rio de Janeiro, which is celebrating its 2016 Olympic bid win. Getting to Brazil is easier with 14 new flights this year from the United States, including daily nonstop service from Houston to Rio on Continental and flights three times a week from Atlanta to Brasília on Delta. Several more are planned for 2010.

Recife, a historic town on Brazil’s northern coast, dubbed the Brazilian Venice for its many bridges and rivers, is one of the places expected to benefit from new flights, with routes from Atlanta and Miami. In late February, when the average temperature is 82 degrees there, rates at the Internacional Palace Hotel in Recife start at about 196 Brazilian reais, about $110 at 1.78 reais to the dollar.

To maximize your budget, go just after Carnival, which runs Feb. 12 to 16, when hotel rates drop sharply. The Pestana Rio Atlantica in Rio, with views of Copacabana Beach, for example, is 490 reais a night in late February, down from 1,495 during Carnival.