Original Story: WashingtonPost.com
Their lives swirl in technology, but the nation’s high school students spend little time studying the computer science that is the basis of it all. Few are taught to write lines of code, and few take classes that delve into the workings of the Internet or explain how to create an app.
In a world that went digital long ago, computer science is not a staple of U.S. education, and some schools do not even offer a course on the subject, including 10 of 27 high schools in Virginia’s Fairfax County and six of 25 in Maryland’s Montgomery County.
“It’s shocking how little there is,” said Rebecca Dovi, who has taught computer science for 17 years in Virginia schools and is an advocate for more courses statewide. Even when schools offer classes, she said, there are relatively few of them. “You might have one person teaching it in a school of 1,400 kids.”
Though computer science can lead to high-paying technology jobs and boost skills for a variety of fields, many students get little exposure to the subject in class. Across the Washington region’s school systems, fewer than one in 10 high school students took computer science this academic year, according to district data.
But, slowly, that might be starting to change. Spurred in part by national initiatives, some local districts are urging more students to take computer science courses and trying to address a glaring gender and racial disparity. By next school year, school leaders expect more computer science courses in Montgomery high schools, more enrollment in courses in Virginia’s Loudoun County and more schools offering classes in the District.
And Charles County, Md., with 26,500 students, has committed to bring such learning into every grade starting in the fall, in partnership with the nonprofit Code.org, which works to increase access to computer science in schools.
“We really believe the skills they will get from coding will help them in whatever career they choose,” said Charles County Superintendent Kimberly Hill, who pointed out that such learning requires logic and “habits of the mind” that have broader uses.
Computer science is not just for math whizzes and budding techies, she said.
“Typically it’s male. Typically it’s white male,” Hill said, adding that it begs the questions: “Where are all the girls? Where are all the African American and Hispanic kids?”
Under the county’s new plan, she said, the thinking is, “You can learn how to code, like you can learn how to read and learn how to write.”
Among the reasons many schools do not have computer science: It is not a priority core subject, and computer science teachers can be hard to find, with some drawn to higher-paying tech jobs. While an increasing number of states allow the courses to count as a math or science credit, they are usually not a requirement and are sometimes viewed by students as boring or intimidating.
Many parents mistake the computers they see in schools — and the seeming ease with which teenagers manage their devices — as a signs of computer science understanding.
“These skills are as fundamental as algebra,” said Marie desJardins, a computer science professor at the University of Maryland Baltimore County who is leading a project to train 100 computer science teachers in Maryland and the District over a three-year period.
During the next decade, about 70 percent of new jobs in science, technology, engineering and math fields will be for computing professionals, desJardins said.
“There is not a field right now that computer science doesn’t contribute to or support,” said Chris Stephenson, executive director of the Computer Science Teachers Association. Still, she said, “most kids don’t have a chance to get introduced to this content in high school, and the kids that are least likely to have these opportunities are in high-poverty, high-minority schools.”
Hoping to reach more students, especially girls and minorities, Montgomery’s school leaders also have signed on with Code.org. Ten county high schools are slated to offer more-engaging courses that go beyond programming, with inquiry-based learning and topics such as the Internet and human-computer interaction.
“As a school system and a nation, we’re stuck in a box where computer science is not what we teach kids; it’s just something that you learn maybe later,” said Pat Yongpradit, a former Montgomery teacher who is director of education at Code.org.
Code.org has brought widespread attention to the learning gap, first with a video early last year that went viral — “What Most Schools Don’t Teach” — and then in December with a week-long “Hour of Code” campaign that drew in millions of people worldwide. The organization has partnered with an increasing number of school systems nationally — 32 as of this month — providing professional development for teachers and new curricular materials.
In Rockville, David Silversmith needed no convincing. One recent morning at Thomas S. Wootton High School, the 17-year-old senior was puzzling over a line of code for a computer-based game of Connect Four. Silversmith has no plans to become a computer scientist but decided the class was important.
“I think whatever profession you do nowadays,” the Maryland teen said, “it will definitely help.”
In D.C. public schools, new courses were offered this school year at six high schools and another four high schools will get computer science classes in the fall.
“The kids like these classes, they’re showing up for them, they’re engaged,” said Anthony Priest, a D.C. schools program manager. The District’s H.D. Woodson High School made computer science a requirement for all ninth-graders.
There are smaller efforts to expand computer science, too. In Fairfax County, teacher Dan Tra jazzed up a programming course with lots of app development, worked hard to market it, and got about 130 students to take the class at Falls Church High School this year. More than 40 percent of the students were female.
Falls Church now has a Robotics Club and a Girls in Technology Club. More than 20 students entered a hack-athon in late March, some winning honors.
“In our school, there’s a thirst for it,” Tra said.
Computer science courses are poorly tracked nationally and often misunderstood, experts say. Many people confuse courses about using computer software with true computer science, which is about creating and problem-solving with computers.
The most reliable figures about computer science’s reach into high schools come from the Advanced Placement (AP) exam. In Fairfax County, which has nearly 52,000 high school students, 740 students took the most recent AP exam in computer science. In Montgomery, with more than 45,000 high school students, 521 took the most recent AP exam. There were a little more than 600 exam-takers combined for public school systems in the District, Prince George’s County in Maryland, and Alexandria and Arlington, Loudoun and Prince William counties in Virginia.
Barbara Ericson, a senior research scientist at Georgia Tech who studies AP computer science results, said Maryland, Virginia and the District made the top-10 list for computer science participation per capita in 2013. Nationally, 29,555 students took the exam.
Still, Ericson said, it remains a course of the few: More than 270,000 students took the most popular AP calculus exam last year, and nearly 200,000 took biology exams. In 2013, girls accounted for 18.6 percent of computer science exam-takers, Hispanic students 8.1 percent and black students 3.7 percent.
Locally, there are signs of both the problem and new interest.
T.C. Williams High School in Alexandria, for example, lost its computer science teacher and was unable to find another who was certified, so the seven students now in the course take it online, officials said.
In Loudoun, enrollment is on the rise and a Microsoft program called Technology Education and Literacy in Schools, or TEALS, has brought professionals into classrooms. All 13 Loudoun high schools offer computer science and AP computer science.
Dan Kasun, a Microsoft executive involved in the program, said the collaboration inspires teachers, who in turn get their students excited. About 1,075 students are expected to take classes next year in Loudoun, up from 845 this year.
“People are realizing these are the skill sets that are going to lead to 21st-century jobs,” Kasun said.
Thursday, April 24, 2014
Wednesday, April 16, 2014
IHG TO BUILD FIVE-STAR GOLF HOTEL IN MUSCAT
Original Story: ConstructionWeekOnline.com
InterContinental Hotels Group (IHG) is to team up with Muscat Golf Course Project to deliver a five-star hotel near Muscat International Airport.
The project is scheduled to commence towards the end of 2014 with a completion date scheduled for the end of 2016, according to a statement released by IHG.
InterContinental Hotel & Golf Clubhouse will have a built-up area of 50,000m² and feature 270 guest rooms.
The project will also include leisure facilities with two tennis courts and three outdoor swimming pools and spa facilities with “hammam”, gymnasium and treatment rooms, two full service speciality restaurants and one all-day dining restaurant, ballroom and fully equipped meeting facilities and enhanced business services.
Muscat Hills Golf Course is located between the mountains and the sea and comprises an 18-hole PGA-certified green golf course. The hotel may be reviewing a Miniature Golf Course Design to expand customer satisfaction.
IHG manages a number of hotels in Oman including InterContinental Muscat, Crowne Plaza Muscat, Crowne Plaza Sohar, Crowne Plaza Salalah, Crowne Plaza in Duqm and Holiday Inn in Muscat.
InterContinental Hotels Group (IHG) is to team up with Muscat Golf Course Project to deliver a five-star hotel near Muscat International Airport.
The project is scheduled to commence towards the end of 2014 with a completion date scheduled for the end of 2016, according to a statement released by IHG.
InterContinental Hotel & Golf Clubhouse will have a built-up area of 50,000m² and feature 270 guest rooms.
The project will also include leisure facilities with two tennis courts and three outdoor swimming pools and spa facilities with “hammam”, gymnasium and treatment rooms, two full service speciality restaurants and one all-day dining restaurant, ballroom and fully equipped meeting facilities and enhanced business services.
Muscat Hills Golf Course is located between the mountains and the sea and comprises an 18-hole PGA-certified green golf course. The hotel may be reviewing a Miniature Golf Course Design to expand customer satisfaction.
IHG manages a number of hotels in Oman including InterContinental Muscat, Crowne Plaza Muscat, Crowne Plaza Sohar, Crowne Plaza Salalah, Crowne Plaza in Duqm and Holiday Inn in Muscat.
4 PLACES YOU SHOULD NOT SWIPE YOUR DEBIT CARD
Original Story: USAToday.com
Breaking news such as the massive data breach at Experian or Target now seems common. Leaving aside the victims of actual fraud, I hear constantly from people who've had to swap out every debit and credit card, or whose cards were unilaterally replaced by their bank. This causes all sorts of problems.
Sometimes it makes you long for the days of cash. While cash is not practical for everything, there are very compelling reasons to consider it or other alternatives instead of those debit cards.
Of course, you also have to watch where you get your cash, too. Criminals are good at installing near-invisible skimmers on ATMs. These steal your card information and then a miniature camera over the keypad steals your PIN. It's everything a thief needs to drain your account.
Avoid out of the way ATMs in isolated areas. When you can, use ATMs in a restricted-access foyer. You should also hold your hand over the keypad when you enter your PIN. This blocks a camera from seeing what you're doing.
CREDIT OR DEBIT: What's best for consumers?
Now that you know how to safely get cash, here's where you should use it.
1. GAS STATIONS
ATMs aren't the only places criminals can install card skimmers. Gas stations are a favorite target for thieves. Last year, four men were arrested for allegedly stealing $2.1 million using skimmers at gas stations in the south. The skimmers were installed in the pumps and were even equipped with Bluetooth — which allowed the thieves to come by and extract the collected numbers and PINs wirelessly!
To keep the odds in your favor, use cash. If nothing else, use a credit card at a gas pump. It's not widely appreciated that consumer responsibility for debit-card charges are different than they are for credit cards. Credit-card charges are easier to contest, and you're only liable for up to $50 of fraudulent purchases.
With a debit card, you have to report a fraudulent purchase within a few business days for the $50 liability limit to kick in.
2. RESTAURANTS
Restaurants, too, can be a source of trouble. Some unscrupulous servers bring handheld card skimmers to work to swipe your card info. Even low-tech thieves can just write down the card numbers.
To make matters worse, many restaurants use older computer systems for processing cards. These are easy for hackers to install card-swipe software, as in the Target hack. The price paid can be quite high; Subway got hit in 2011 by Romanian hackers, who got away with $10 million from 150 restaurants.
One of the lesser noted aspects about the coming end to Microsoft's XP operating system is that many restaurants and ATMs still use the XP infrastructure.
3. STORES
Restaurants and gas stations make juicy targets: a steady steam of customers, some not from the area. The same goes for stores.
For small purchases cash is the way to go. Use cash at the grocery store or while buying clothes. For larger purchases, use a credit card instead of a debit card. Again, you have less liability than you do with a debit card.
Bonus tip: Some people use cash at stores to avoid the store tracking what they buy. However, stores can still track your purchase history if you still swipe a loyalty card.
4. ONLINE
OK, you can't use cash online. But please, use a credit card, not a debit card. The fraud protections are better and a hacker can't overdraft your bank account with a credit card. You don't need to be fighting overdraft fees on top of everything else.
You can also check with your bank to see if it offers one-time credit card numbers for online buying. Since each number only works once, it won't do a hacker any good to steal it.
Of course, one drawback to using a credit card is the interest payments if you don't pay on time. This site can show you the real cost of using a credit card.
Finally, I know this is a lot of work, particularly when it seems that everyone is busy and overworked; but remember as well to check your bank statements, and credit reports, regularly for suspicious activity.
Breaking news such as the massive data breach at Experian or Target now seems common. Leaving aside the victims of actual fraud, I hear constantly from people who've had to swap out every debit and credit card, or whose cards were unilaterally replaced by their bank. This causes all sorts of problems.
Sometimes it makes you long for the days of cash. While cash is not practical for everything, there are very compelling reasons to consider it or other alternatives instead of those debit cards.
Of course, you also have to watch where you get your cash, too. Criminals are good at installing near-invisible skimmers on ATMs. These steal your card information and then a miniature camera over the keypad steals your PIN. It's everything a thief needs to drain your account.
Avoid out of the way ATMs in isolated areas. When you can, use ATMs in a restricted-access foyer. You should also hold your hand over the keypad when you enter your PIN. This blocks a camera from seeing what you're doing.
CREDIT OR DEBIT: What's best for consumers?
Now that you know how to safely get cash, here's where you should use it.
1. GAS STATIONS
ATMs aren't the only places criminals can install card skimmers. Gas stations are a favorite target for thieves. Last year, four men were arrested for allegedly stealing $2.1 million using skimmers at gas stations in the south. The skimmers were installed in the pumps and were even equipped with Bluetooth — which allowed the thieves to come by and extract the collected numbers and PINs wirelessly!
To keep the odds in your favor, use cash. If nothing else, use a credit card at a gas pump. It's not widely appreciated that consumer responsibility for debit-card charges are different than they are for credit cards. Credit-card charges are easier to contest, and you're only liable for up to $50 of fraudulent purchases.
With a debit card, you have to report a fraudulent purchase within a few business days for the $50 liability limit to kick in.
2. RESTAURANTS
Restaurants, too, can be a source of trouble. Some unscrupulous servers bring handheld card skimmers to work to swipe your card info. Even low-tech thieves can just write down the card numbers.
To make matters worse, many restaurants use older computer systems for processing cards. These are easy for hackers to install card-swipe software, as in the Target hack. The price paid can be quite high; Subway got hit in 2011 by Romanian hackers, who got away with $10 million from 150 restaurants.
One of the lesser noted aspects about the coming end to Microsoft's XP operating system is that many restaurants and ATMs still use the XP infrastructure.
3. STORES
Restaurants and gas stations make juicy targets: a steady steam of customers, some not from the area. The same goes for stores.
For small purchases cash is the way to go. Use cash at the grocery store or while buying clothes. For larger purchases, use a credit card instead of a debit card. Again, you have less liability than you do with a debit card.
Bonus tip: Some people use cash at stores to avoid the store tracking what they buy. However, stores can still track your purchase history if you still swipe a loyalty card.
4. ONLINE
OK, you can't use cash online. But please, use a credit card, not a debit card. The fraud protections are better and a hacker can't overdraft your bank account with a credit card. You don't need to be fighting overdraft fees on top of everything else.
You can also check with your bank to see if it offers one-time credit card numbers for online buying. Since each number only works once, it won't do a hacker any good to steal it.
Of course, one drawback to using a credit card is the interest payments if you don't pay on time. This site can show you the real cost of using a credit card.
Finally, I know this is a lot of work, particularly when it seems that everyone is busy and overworked; but remember as well to check your bank statements, and credit reports, regularly for suspicious activity.
Thursday, April 3, 2014
Building activity strong in Fort Smith region, up 50.9% in first quarter
Original Story: TheCityWire.com
The value of building permits in Fort Smith, Greenwood and Van Buren were a combined $24.913 million in March, up 203.96% compared to $8.196 million in March 2013.
For the first three months of 2013, permits for the three cities totaled $41.787 million, up 50.9% compared to the $27.691 million during the same period in 2013.
FORT SMITH
The city of Fort Smith issued 191 permits during the month of March, nearly even with the same month last year, but the permit values totaled $20.410 million last month, up 197.7% compared to $6.856 million during the same period last year.
The primary driver of Fort Smith's higher totals was the $13.3 million building permit issued for the new Mill Creek Wastewater Pump Station, located at 210 Navy Road. A Tulsa Construction Lawyer is familiar with these types of permits.
Another large project pushing totals higher is an expansion at Darby Junior High, valued at $1.674 million, as well as a $1.1 million permit issued for a new immigration office at 4624 Kelley Highway. The Kelley Highway site is the former home of what is now known as KNWA-TV and its now shuttered Fort Smith newsroom. The station consolidated newsroom operations to its Fayetteville newsroom in 2006 when Oklahoma City-based Griffin Communications sold the station to Irving, Texas-based Nexstar Broadcasting, leaving the former television station mostly unoccupied since that time.
In addition to the three large commercial projects, the city of Fort Smith issued 120 residential building permits worth $1.641 million, a drop from March 2013 when the city issued 125 permits worth $2.525 million.
GREENWOOD
A total of six permits were issued for the city of Greenwood in March, totaling $373,676. That represents a 43.66% decrease from the same period in 2013, which saw $663,300 in permits. A Boston Construction Lawyer said it often takes many permits to complete a build.
VAN BUREN
The city of Van Buren saw an increase of 510.75% from $676,000 in March 2013 to $4.129 million last month. The higher values in the city last month was largely due to construction of the city's new police headquarters, which is being constructed at the former Sherman's Grocery site. The new police station has an estimated value of $3.567 million.
Other construction in the city was relatively minor, with a spattering of permits issued across various categories, including four permits worth $89,000 for residential remodels, the second largest category after commercial construction.
2013 RECAP
Combined values in the three cities during 2013 were $203.037 million, compared to $157.32 million during 2012. The 2013 value is above the $201.079 million in 2011.
Fort Smith closed 2013 with the largest share of valuations, logging $177.687 million (a one-year increase of about 30.24% from $136.428 million in 2012), while Van Buren was the next largest with $17.067 million (a one-year increase of 38.96% from $12.282 million in 2012). Greenwood posted an additional $8.283 million, the only city to show a decrease from the previous year's total of $8.609 million (a decrease of 3.79%). A San Francisco Construction Lawyer is not surprised by these stats.
The gains in the Fort Smith market were largely from industrial construction projects at Chaffee Crossing, the construction of Mercy's new orthopedic hospital along Phoenix Avenue and various municipal construction projects across the city.
The value of building permits in Fort Smith, Greenwood and Van Buren were a combined $24.913 million in March, up 203.96% compared to $8.196 million in March 2013.
For the first three months of 2013, permits for the three cities totaled $41.787 million, up 50.9% compared to the $27.691 million during the same period in 2013.
FORT SMITH
The city of Fort Smith issued 191 permits during the month of March, nearly even with the same month last year, but the permit values totaled $20.410 million last month, up 197.7% compared to $6.856 million during the same period last year.
The primary driver of Fort Smith's higher totals was the $13.3 million building permit issued for the new Mill Creek Wastewater Pump Station, located at 210 Navy Road. A Tulsa Construction Lawyer is familiar with these types of permits.
Another large project pushing totals higher is an expansion at Darby Junior High, valued at $1.674 million, as well as a $1.1 million permit issued for a new immigration office at 4624 Kelley Highway. The Kelley Highway site is the former home of what is now known as KNWA-TV and its now shuttered Fort Smith newsroom. The station consolidated newsroom operations to its Fayetteville newsroom in 2006 when Oklahoma City-based Griffin Communications sold the station to Irving, Texas-based Nexstar Broadcasting, leaving the former television station mostly unoccupied since that time.
In addition to the three large commercial projects, the city of Fort Smith issued 120 residential building permits worth $1.641 million, a drop from March 2013 when the city issued 125 permits worth $2.525 million.
GREENWOOD
A total of six permits were issued for the city of Greenwood in March, totaling $373,676. That represents a 43.66% decrease from the same period in 2013, which saw $663,300 in permits. A Boston Construction Lawyer said it often takes many permits to complete a build.
VAN BUREN
The city of Van Buren saw an increase of 510.75% from $676,000 in March 2013 to $4.129 million last month. The higher values in the city last month was largely due to construction of the city's new police headquarters, which is being constructed at the former Sherman's Grocery site. The new police station has an estimated value of $3.567 million.
Other construction in the city was relatively minor, with a spattering of permits issued across various categories, including four permits worth $89,000 for residential remodels, the second largest category after commercial construction.
2013 RECAP
Combined values in the three cities during 2013 were $203.037 million, compared to $157.32 million during 2012. The 2013 value is above the $201.079 million in 2011.
Fort Smith closed 2013 with the largest share of valuations, logging $177.687 million (a one-year increase of about 30.24% from $136.428 million in 2012), while Van Buren was the next largest with $17.067 million (a one-year increase of 38.96% from $12.282 million in 2012). Greenwood posted an additional $8.283 million, the only city to show a decrease from the previous year's total of $8.609 million (a decrease of 3.79%). A San Francisco Construction Lawyer is not surprised by these stats.
The gains in the Fort Smith market were largely from industrial construction projects at Chaffee Crossing, the construction of Mercy's new orthopedic hospital along Phoenix Avenue and various municipal construction projects across the city.
Tuesday, April 1, 2014
EM Orr admits missteps on road to Detroit bankruptcy
Story originally appeared on DetroitNews.com.
Detroit— Kevyn Orr had a quick comeback recently when a disgruntled banker abruptly approached him at a New York City restaurant.
“We’re going to punish you,” Orr said the man told him, referring to Detroit’s increasingly hard line on banks and bondholders in its historic bankruptcy. A Tulsa Bankruptcy Lawyer is watching the case closely.
But the high-profile Washington, D.C., bankruptcy attorney responded with a story about life in the city he was tapped to run as emergency manager one year ago Friday.
Orr, 55, told the banker standing over his table about a little girl he saw on Seven Mile one evening in November, waiting for a bus ride home from school that would likely take her to a blighted neighborhood with broken streetlights.
“None of us would let our children live that way — and that is the life of the children in this city,” Orr, a father of two, recalled telling the speechless banker, whom he declined to identify.
In a wide-ranging interview this week with The Detroit News, Orr said the conversation speaks to the enormity of the task before him: fixing the finances of a city mired in poverty, crime, blight and a dwindling populace that can’t pay its bills while juggling demands from creditors that they be paid in full.
But Orr acknowledged for the first time that he miscalculated the willingness of Detroit’s creditors to take enormous losses for the good of the city’s future.
“How can you drive through the city and not see the needs?” Orr asked. “I’m still surprised. ... I should probably have been a little bit more skeptical about the ability of the stakeholders to see things the way I see things. Their prism is different than my prism.”
After 12 months at the helm during one the most tumultuous periods in Detroit’s 208-year history, Orr acknowledges he didn’t move fast enough last spring to tackle city services, such as outsourcing trash pickup to private firms.
Orr says he spent too much time analyzing the city’s finances — which teams of consultants had already done for then-Mayor Dave Bing — during the lead-up to his decision to take the city into bankruptcy in July.
“Looking back on it, I probably should have accepted what I was reading with more confidence,” said Orr, who is working for Gov. Rick Snyder under an appointment that will presumably end in September.
Dealing with opposition
After a year of living in the Book Cadillac hotel and flying home to see his family in Maryland on weekends, Orr is poised to deliver major changes to the way city government works — or doesn’t — for the 700,000 citizens of Michigan’s largest city.
Orr’s plan to shed billions of dollars in debt asks U.S. Bankruptcy Judge Steven Rhodes to approve what was once unthinkable in municipal bankruptcy: Reduce monthly pension checks to retirees and walk away from hundreds of millions of dollars owed on general obligation bonds that were used, in part, to mask annual budget deficits.
“We are going to receive violent opposition to our plan at a confirmation hearing by the creditor corps,” Orr said of opposition from bond insurers.
Orr’s proposed cures for city government — including a $1.5 billion, 10-year reinvestment plan — remain largely tied up in his bankruptcy reorganization plan that goes on trial this summer.
James Spiotto, a Chicago bankruptcy attorney and municipal financial adviser, said Orr made a misstep last summer by pushing the city’s pension funds and bondholders to accept as little as 10 cents for every dollar owed before he sought to generate support for fixing city services.
Orr wants to cut debt to free up cash to tear down abandoned homes, upgrade archaic city computer systems and buy trucks and equipment for police, fire and emergency services. But he should have focused on that before laying out devastating options for creditors, Spiotto said.
“I think he used more of a corporate bankruptcy approach than a municipal bankruptcy approach, where you need to bring buy-in,” Spiotto said. “Generally from past experiences, you start with a recovery plan and try to get buy-in. It’s sometimes a far better way than announcing a plan and telling people, ‘you’re going to get 10 cents on the dollar.’”
Orr admits he wrongly assumed the city’s creditors would be much more willing to reach agreements.
But he remains optimistic city retirees will accept a $815 million rescue package of state and private pledges to limit the reductions in future pensions for some 23,000 retirees and 10,000 current workers.
In exchange for settling now, police and firefighters would get a 4 percent cut in their monthly pensions and non-uniform general employees would get a 26 percent reduction — with no cost-of-living increases for at least a decade.
The deal on the table for retirees is far better than the 20 cents on the dollar Orr was offering the city’s pension funds last June. Orr said that’s a result of political, legal and judicial pressures the city faced to find a way to avoid a protracted court battle over pensions.
“We got pressure from a lot of fronts … and we listened to it,” Orr said.
'Public enemy No. 1'
Orr’s strategy for fast-tracking Detroit’s bankruptcy has faced setbacks in recent months. He acknowledges he’s a “little bit off schedule,” largely due to “push back” from the judge. Rhodes has twice rejected early settlements Orr hatched with two banks.
In a message that appeared aimed at Orr, Rhodes ruled from the bench Jan. 16 that he would not “perpetuate hasty and imprudent financial decision-making.”
“It just seems to me like this has not been a fun exercise for Kevyn Orr, and Judge Rhodes has not followed what people would have scripted to have been the playbook for this case,” said David Tawil, a New York hedge fund manager and former bankruptcy attorney who studied under Rhodes at the University of Michigan.
The city recently cut a third deal with UBS AG and Bank of America to settle a troubled pension debt for $85 million — about $145 million less than Orr originally agreed to last summer. Rhodes will consider the new deal at an April 3 hearing.
But the latest settlement came after Rhodes encouraged the city to bring him a lawsuit challenging the legality of the complex interest rate swaps debt. Orr said he made a legal calculation to settle the debt and avoid an expensive courtroom battle with the banks, while freeing up access to $15 million in monthly casino tax revenues that the banks have a lien on. The tax implications of the municipal bankruptcy is also being followed closely by a Tulsa Tax Lawyer.
But Orr’s preference to settle the debt continues to baffle some financial experts and inflames community activists who say it shows he’s more friendly with the banks than he publicly portrays.
“What’s hard to reconcile for a city that doesn’t have any money is that plaintiffs with good legal cases don’t typically write eight-figure checks to settle,” said Patrick O’Keefe, a Bloomfield Hills financial consultant.
Jerome Goldberg, an attorney representing a single city retiree, David Sole, said “it’s still an outrage” that Orr has declined to confront the banks in court.
“If you’re really serious about bringing the city back, let’s go after those who hurt the city,” Goldberg said.
But based on the vitriol being lobbed at him from Wall Street and the random banker in New York, Orr says “I don’t feel like a friend of the banks in any fashion.”
“Apparently I guess I’m on the walls of bathrooms or public enemy No. 1 over there (on Wall Street),” Orr said. “I’ve developed some callus at this point to criticism. But I’m still a little frustrated with folks who don’t realize the needs of the city.”
Detroit— Kevyn Orr had a quick comeback recently when a disgruntled banker abruptly approached him at a New York City restaurant.
“We’re going to punish you,” Orr said the man told him, referring to Detroit’s increasingly hard line on banks and bondholders in its historic bankruptcy. A Tulsa Bankruptcy Lawyer is watching the case closely.
But the high-profile Washington, D.C., bankruptcy attorney responded with a story about life in the city he was tapped to run as emergency manager one year ago Friday.
Orr, 55, told the banker standing over his table about a little girl he saw on Seven Mile one evening in November, waiting for a bus ride home from school that would likely take her to a blighted neighborhood with broken streetlights.
“None of us would let our children live that way — and that is the life of the children in this city,” Orr, a father of two, recalled telling the speechless banker, whom he declined to identify.
In a wide-ranging interview this week with The Detroit News, Orr said the conversation speaks to the enormity of the task before him: fixing the finances of a city mired in poverty, crime, blight and a dwindling populace that can’t pay its bills while juggling demands from creditors that they be paid in full.
But Orr acknowledged for the first time that he miscalculated the willingness of Detroit’s creditors to take enormous losses for the good of the city’s future.
“How can you drive through the city and not see the needs?” Orr asked. “I’m still surprised. ... I should probably have been a little bit more skeptical about the ability of the stakeholders to see things the way I see things. Their prism is different than my prism.”
After 12 months at the helm during one the most tumultuous periods in Detroit’s 208-year history, Orr acknowledges he didn’t move fast enough last spring to tackle city services, such as outsourcing trash pickup to private firms.
Orr says he spent too much time analyzing the city’s finances — which teams of consultants had already done for then-Mayor Dave Bing — during the lead-up to his decision to take the city into bankruptcy in July.
“Looking back on it, I probably should have accepted what I was reading with more confidence,” said Orr, who is working for Gov. Rick Snyder under an appointment that will presumably end in September.
Dealing with opposition
After a year of living in the Book Cadillac hotel and flying home to see his family in Maryland on weekends, Orr is poised to deliver major changes to the way city government works — or doesn’t — for the 700,000 citizens of Michigan’s largest city.
Orr’s plan to shed billions of dollars in debt asks U.S. Bankruptcy Judge Steven Rhodes to approve what was once unthinkable in municipal bankruptcy: Reduce monthly pension checks to retirees and walk away from hundreds of millions of dollars owed on general obligation bonds that were used, in part, to mask annual budget deficits.
“We are going to receive violent opposition to our plan at a confirmation hearing by the creditor corps,” Orr said of opposition from bond insurers.
Orr’s proposed cures for city government — including a $1.5 billion, 10-year reinvestment plan — remain largely tied up in his bankruptcy reorganization plan that goes on trial this summer.
James Spiotto, a Chicago bankruptcy attorney and municipal financial adviser, said Orr made a misstep last summer by pushing the city’s pension funds and bondholders to accept as little as 10 cents for every dollar owed before he sought to generate support for fixing city services.
Orr wants to cut debt to free up cash to tear down abandoned homes, upgrade archaic city computer systems and buy trucks and equipment for police, fire and emergency services. But he should have focused on that before laying out devastating options for creditors, Spiotto said.
“I think he used more of a corporate bankruptcy approach than a municipal bankruptcy approach, where you need to bring buy-in,” Spiotto said. “Generally from past experiences, you start with a recovery plan and try to get buy-in. It’s sometimes a far better way than announcing a plan and telling people, ‘you’re going to get 10 cents on the dollar.’”
Orr admits he wrongly assumed the city’s creditors would be much more willing to reach agreements.
But he remains optimistic city retirees will accept a $815 million rescue package of state and private pledges to limit the reductions in future pensions for some 23,000 retirees and 10,000 current workers.
In exchange for settling now, police and firefighters would get a 4 percent cut in their monthly pensions and non-uniform general employees would get a 26 percent reduction — with no cost-of-living increases for at least a decade.
The deal on the table for retirees is far better than the 20 cents on the dollar Orr was offering the city’s pension funds last June. Orr said that’s a result of political, legal and judicial pressures the city faced to find a way to avoid a protracted court battle over pensions.
“We got pressure from a lot of fronts … and we listened to it,” Orr said.
'Public enemy No. 1'
Orr’s strategy for fast-tracking Detroit’s bankruptcy has faced setbacks in recent months. He acknowledges he’s a “little bit off schedule,” largely due to “push back” from the judge. Rhodes has twice rejected early settlements Orr hatched with two banks.
In a message that appeared aimed at Orr, Rhodes ruled from the bench Jan. 16 that he would not “perpetuate hasty and imprudent financial decision-making.”
“It just seems to me like this has not been a fun exercise for Kevyn Orr, and Judge Rhodes has not followed what people would have scripted to have been the playbook for this case,” said David Tawil, a New York hedge fund manager and former bankruptcy attorney who studied under Rhodes at the University of Michigan.
The city recently cut a third deal with UBS AG and Bank of America to settle a troubled pension debt for $85 million — about $145 million less than Orr originally agreed to last summer. Rhodes will consider the new deal at an April 3 hearing.
But the latest settlement came after Rhodes encouraged the city to bring him a lawsuit challenging the legality of the complex interest rate swaps debt. Orr said he made a legal calculation to settle the debt and avoid an expensive courtroom battle with the banks, while freeing up access to $15 million in monthly casino tax revenues that the banks have a lien on. The tax implications of the municipal bankruptcy is also being followed closely by a Tulsa Tax Lawyer.
But Orr’s preference to settle the debt continues to baffle some financial experts and inflames community activists who say it shows he’s more friendly with the banks than he publicly portrays.
“What’s hard to reconcile for a city that doesn’t have any money is that plaintiffs with good legal cases don’t typically write eight-figure checks to settle,” said Patrick O’Keefe, a Bloomfield Hills financial consultant.
Jerome Goldberg, an attorney representing a single city retiree, David Sole, said “it’s still an outrage” that Orr has declined to confront the banks in court.
“If you’re really serious about bringing the city back, let’s go after those who hurt the city,” Goldberg said.
But based on the vitriol being lobbed at him from Wall Street and the random banker in New York, Orr says “I don’t feel like a friend of the banks in any fashion.”
“Apparently I guess I’m on the walls of bathrooms or public enemy No. 1 over there (on Wall Street),” Orr said. “I’ve developed some callus at this point to criticism. But I’m still a little frustrated with folks who don’t realize the needs of the city.”
High-end restaurant adds Obamacare surcharge to every order
Story originally appeared on ajc.com.
At Republique restaurant in Los Angeles, you can order trendy sounding dishes such as Butternut Squash Agnolotti and Duck Liver Mousse with Pickled Asian Pear.
Diners at the high-end eatery, about 6 miles west of downtown Los Angeles, likely expect to pay a bit more for the funky fare, but what's been surprising many customers is a 3 percent surcharge added to every bill to cover employee health care costs under the Health Care Act, also known as Obamacare.
Social media and restaurant review sites have been abuzz with the story since it was reported by Los Angeles Times columnist Steve Lopez on Tuesday.
The Times talked to Republique co-owners Bill Chait and Walter Manzke, who is also the chef. They said they knew the charge would drive some customers away, but thought it was necessary to keep all 80 employees at full time.
Under the Affordable Care Act, companies with 50 or more full-time employees will have to provide health insurance to their workers. The owners opted for the surcharge instead of cutting back staff or creating several part-time jobs to get around the law.
According to TV station KTLA, many people voiced complaints about the policy on Yelp.
“We spent $150 for two of us and you want me to pay an extra 3 percent. Because I can afford to eat here then I should be able to afford that fee? Absurd,” one customer wrote.
The restaurant issued a statement to KTLA regarding the surcharge.
“It directly benefits all the staff, kitchen and front of the house. Moreover, it enables us to make all of our staff full time and to provide them with insurance instead of excluding them as they would be if they were part-time employees.”
At Republique restaurant in Los Angeles, you can order trendy sounding dishes such as Butternut Squash Agnolotti and Duck Liver Mousse with Pickled Asian Pear.
Diners at the high-end eatery, about 6 miles west of downtown Los Angeles, likely expect to pay a bit more for the funky fare, but what's been surprising many customers is a 3 percent surcharge added to every bill to cover employee health care costs under the Health Care Act, also known as Obamacare.
Social media and restaurant review sites have been abuzz with the story since it was reported by Los Angeles Times columnist Steve Lopez on Tuesday.
The Times talked to Republique co-owners Bill Chait and Walter Manzke, who is also the chef. They said they knew the charge would drive some customers away, but thought it was necessary to keep all 80 employees at full time.
Under the Affordable Care Act, companies with 50 or more full-time employees will have to provide health insurance to their workers. The owners opted for the surcharge instead of cutting back staff or creating several part-time jobs to get around the law.
According to TV station KTLA, many people voiced complaints about the policy on Yelp.
“We spent $150 for two of us and you want me to pay an extra 3 percent. Because I can afford to eat here then I should be able to afford that fee? Absurd,” one customer wrote.
The restaurant issued a statement to KTLA regarding the surcharge.
“It directly benefits all the staff, kitchen and front of the house. Moreover, it enables us to make all of our staff full time and to provide them with insurance instead of excluding them as they would be if they were part-time employees.”
Wednesday, March 12, 2014
MEN'S WEARHOUSE, JOS. A. BANK SEW UP $1.8B DEAL
Original story from USATODAY.
The Men's Wearhouse will buy Jos. A. Bank Clothiers in a cash deal worth $1.8 billion, or $65 a share, the companies said Tuesday.
Boards of directors of the companies have unanimously approved the transaction.
"We are excited by the opportunities this transaction presents," said Men's Wearhouse CEO Doug Ewert, "and are confident that our combined best-in-class offerings for our valued customers will drive significant shareholder value."
The companies have been volleying competing offers for each other since the fall, when Jos. A. Bank made an unsolicited offer to buy Men's Wearhouse for $48 a share. Men's Wearhouse rejected the bid and countered with its own to buy Jos. A. Bank for $55 a share. Most recently, Men's Wearhouse raised its bid to $63.50 a share two weeks ago.
Combining the companies will allow both to maximize merchandise offerings and store locations, the companies said in a statement. Jos. A. Bank will retain its name. The merger will make the combined company the fourth-largest men's apparel retailer, with more than 1,700 stores in the U.S. and about 23,000 employees. In a presentation given to investors in November on a potential acquisition of Jos. A. Bank, Men's Wearhouse listed Macy's, Kohl's, and J.C. Penney as the top three menswear retailers based on retail sales.
The presentation also outlined some of the key differences in the two brands. Men's Wearhouse appeals to a slightly younger, more trend-conscious customer and offers a variety of brands, including Michael Kors and Calvin Klein. Jos. A. Bank tends to cater to an older, more affluent customer and primarily sells its own private label products. The presentation referred to the possibility of creating a loyalty program for customers and spending more on advertising.
As part of the deal, Jos. A. Bank will not go forward with a separate agreement announced last month to buy Eddie Bauer for roughly $825 million. Termination of that deal requires Jos. A. Bank to pay a $48 million fee to Eddie Bauer's parent company.
Jos. A. Bank and Men's Wearhouse have an opportunity to learn from each other and increase their value to customers through the deal, says Mark Montagna, senior analyst with Avondale Partners. Plus, "it's a win for both retailers' shareholders," he says.
He says Jos. A. Bank should adopt Men's Wearhouse's tux rental strategy and that Men's Wearhouse will be able to capitalize on Jos. A. Bank's expertise in sourcing product for less overseas without sacrificing quality.
"So both parties have a lot to learn on two really distinct areas," he says. "And that's very beneficial to both sales and margins."
The new company will also have more resources to invest in marketing efforts and clothing factories, Montagna says.
Men's Wearhouse stock rose $2.57, or 4.7%, to close at $57.14, and Jos. A. Bank shares gained $2.39, or 3.9% to $64.22 a share.
The Men's Wearhouse will buy Jos. A. Bank Clothiers in a cash deal worth $1.8 billion, or $65 a share, the companies said Tuesday.
Boards of directors of the companies have unanimously approved the transaction.
"We are excited by the opportunities this transaction presents," said Men's Wearhouse CEO Doug Ewert, "and are confident that our combined best-in-class offerings for our valued customers will drive significant shareholder value."
The companies have been volleying competing offers for each other since the fall, when Jos. A. Bank made an unsolicited offer to buy Men's Wearhouse for $48 a share. Men's Wearhouse rejected the bid and countered with its own to buy Jos. A. Bank for $55 a share. Most recently, Men's Wearhouse raised its bid to $63.50 a share two weeks ago.
Combining the companies will allow both to maximize merchandise offerings and store locations, the companies said in a statement. Jos. A. Bank will retain its name. The merger will make the combined company the fourth-largest men's apparel retailer, with more than 1,700 stores in the U.S. and about 23,000 employees. In a presentation given to investors in November on a potential acquisition of Jos. A. Bank, Men's Wearhouse listed Macy's, Kohl's, and J.C. Penney as the top three menswear retailers based on retail sales.
The presentation also outlined some of the key differences in the two brands. Men's Wearhouse appeals to a slightly younger, more trend-conscious customer and offers a variety of brands, including Michael Kors and Calvin Klein. Jos. A. Bank tends to cater to an older, more affluent customer and primarily sells its own private label products. The presentation referred to the possibility of creating a loyalty program for customers and spending more on advertising.
As part of the deal, Jos. A. Bank will not go forward with a separate agreement announced last month to buy Eddie Bauer for roughly $825 million. Termination of that deal requires Jos. A. Bank to pay a $48 million fee to Eddie Bauer's parent company.
Jos. A. Bank and Men's Wearhouse have an opportunity to learn from each other and increase their value to customers through the deal, says Mark Montagna, senior analyst with Avondale Partners. Plus, "it's a win for both retailers' shareholders," he says.
He says Jos. A. Bank should adopt Men's Wearhouse's tux rental strategy and that Men's Wearhouse will be able to capitalize on Jos. A. Bank's expertise in sourcing product for less overseas without sacrificing quality.
"So both parties have a lot to learn on two really distinct areas," he says. "And that's very beneficial to both sales and margins."
The new company will also have more resources to invest in marketing efforts and clothing factories, Montagna says.
Men's Wearhouse stock rose $2.57, or 4.7%, to close at $57.14, and Jos. A. Bank shares gained $2.39, or 3.9% to $64.22 a share.
Monday, March 10, 2014
MALAYSIA DISASTER NOT EXPECTED TO TARNISH BOEING
Original Story: USATODAY.com
The Boeing 777 is one of the safest planes on earth, and the Malaysia Airlines tragedy Saturday should do nothing to tarnish that record -- or that of parent company Boeing -- unless a flaw is found to have caused the incident, business analysts said.
"This is the best international plane ever built yet -- it's got an impeccable track record after 20 years and over 1,200 deliveries," said Richard Aboulafia, vice president for analysis with the Teal Group in Virginia. "It's typically used on international routes, and it's established a new standard for international safety."
The disaster in the South China Sea with 239 people aboard is Malaysia Airlines' first crash in nearly 20 years.
The Asiana Airlines Flight 214 crash that killed three people in July also involved a 777, which struck a seawall and broke apart at San Francisco's airport. National Transportation Safety Board investigators have focused their attention on pilot training and confusion in that incident.
The Malaysia crash came the same day Boeing announced it found hairline cracks in the wings of 42 Dreamliner 787 planes under construction, but none in the 122 already delivered. The problem arose because a supplier, Tokyo-based Mitsubishi Heavy Industries, changed its manufacturing process, according to Boeing.
Boeing's stock closed at $128.54 Friday, down 32 cents. It did drop 1.1% to $127.43 in after-hours trading, as reports of the Dreamliner crack surfaced. The stock is up 58% the past year (March 8 to March 8). In January, the company said its fourth-quarter profit rose 26% as it delivered more commercial planes.
Aviation analysts said that unless a mechanical flaw is found in the Malaysian incident, there is no reason the crash should affect Boeing at all.
"Absent inherent defects" to the air frame, engines, avionics or other equipment, "the operator is responsible for safe use according to published and approved manuals," said Robert Mann, an aviation consultant with R.W. Mann and Co. in New York.
Boeing issued a statement saying it was assembling a team to offer technical assistance in investigating the crash, and that "our thoughts remain with all on board and their families."
Henry Harteveldt, an analyst with Hudson Crossing in San Francisco, said the plane's "black box" that records data about the flight needs to be recovered and examined along with the rest of the recoverable wreckage.
"Only after investigators can determine the crash's cause will we be able to determine whether there will be any long-term impact to Boeing," Harteveldt said.
The NTSB, which often helps other governments investigate crashes, is monitoring the incident and could potentially send investigators to the scene.
Harteveldt also said the 777 "is one of the safest, most reliable planes – ever."
The Boeing 777 is one of the safest planes on earth, and the Malaysia Airlines tragedy Saturday should do nothing to tarnish that record -- or that of parent company Boeing -- unless a flaw is found to have caused the incident, business analysts said.
"This is the best international plane ever built yet -- it's got an impeccable track record after 20 years and over 1,200 deliveries," said Richard Aboulafia, vice president for analysis with the Teal Group in Virginia. "It's typically used on international routes, and it's established a new standard for international safety."
The disaster in the South China Sea with 239 people aboard is Malaysia Airlines' first crash in nearly 20 years.
The Asiana Airlines Flight 214 crash that killed three people in July also involved a 777, which struck a seawall and broke apart at San Francisco's airport. National Transportation Safety Board investigators have focused their attention on pilot training and confusion in that incident.
The Malaysia crash came the same day Boeing announced it found hairline cracks in the wings of 42 Dreamliner 787 planes under construction, but none in the 122 already delivered. The problem arose because a supplier, Tokyo-based Mitsubishi Heavy Industries, changed its manufacturing process, according to Boeing.
Boeing's stock closed at $128.54 Friday, down 32 cents. It did drop 1.1% to $127.43 in after-hours trading, as reports of the Dreamliner crack surfaced. The stock is up 58% the past year (March 8 to March 8). In January, the company said its fourth-quarter profit rose 26% as it delivered more commercial planes.
Aviation analysts said that unless a mechanical flaw is found in the Malaysian incident, there is no reason the crash should affect Boeing at all.
"Absent inherent defects" to the air frame, engines, avionics or other equipment, "the operator is responsible for safe use according to published and approved manuals," said Robert Mann, an aviation consultant with R.W. Mann and Co. in New York.
Boeing issued a statement saying it was assembling a team to offer technical assistance in investigating the crash, and that "our thoughts remain with all on board and their families."
Henry Harteveldt, an analyst with Hudson Crossing in San Francisco, said the plane's "black box" that records data about the flight needs to be recovered and examined along with the rest of the recoverable wreckage.
"Only after investigators can determine the crash's cause will we be able to determine whether there will be any long-term impact to Boeing," Harteveldt said.
The NTSB, which often helps other governments investigate crashes, is monitoring the incident and could potentially send investigators to the scene.
Harteveldt also said the 777 "is one of the safest, most reliable planes – ever."
Friday, March 7, 2014
STAPLES CLOSING 225 STORES, STRENGTHENS ONLINE FOCUS
This story first appeared in USA Today.
Staples said Thursday it will close 225 stores in North America by the end of 2015 amid falling fourth-quarter revenue as sales increasingly shift online.
The stock closed down $2.05, or 15.3%, to $11.35.
"With nearly half our sales generated online today, we're meeting the changing needs of business customers and taking aggressive action to reduce costs and improve efficiency," Staples CEO Ron Sargent said.
For the fourth quarter ended Feb. 1, total company sales fell 10.6% to $5.9 billion a year ago, the nation's No. 1 office supply chain said. Earnings were $212 million, or 33 cents per share, compared with $78 million, or 14 cents a share in a year-ago period that included substantial one-time charges. Wall Street analysts expected net income of 39 cents a share in the fourth quarter.
The company said it expects per-share earnings in the current quarter of 17 cents to 22 cents, well below analysts' estimates of 27 cents and the 26 cents it earned in the first quarter of 2013.
The store closings will affect about 12% of the company's 1,846 North American outlets — the majority in the U.S. — and are part of a plan to save $500 million in costs by the end of next year.
Like other retailers, Staples' last quarter was hurt by soft consumer demand for electronics and heavy discounting, says analyst Scott Tilghman of B. Riley & Co. Also, its business customers are disproportionately located in the Northeast, which was battered by cold and stormy weather.
Staples is snaring a healthy share of online sales, but must trim its base of stores accordingly, Tilghman says. A similar dynamic has partly contributed to recent store closings by retailers such as RadioShack, J.C. Penney, Sears and others. About 6% of all retail sales are online — a figure that's expected to grow to 10% in three to five years, according to Tilghman and the Commerce Department.
Specialty stores such as Staples are also facing increased competition from department stores such as Walmart and Target, further pressuring per-store profits, Tilghman says.
Staples, meanwhile, also has been hobbled by technological shifts at the office and home, which have sharply reduced the need for bread-and-butter Staples products such as paper, ink and toner, as well as the store's legacy services.
"You don't have people faxing stuff, and you don't have people making huge copies," says Brian Yarbrough, a research analyst with Edward Jones.
The company is responding with an increased emphasis on technology products such as tablets, which may drive traffic but are lower-margin, and open Staples up to more competition from the likes of Walmart and Target, Yarbrough says.
Staples is also expanding to offer new product lines for businesses, including industrial and medical supplies. Staples today said it's adding eight new product categories and 1,600 items to its stores, representing 20% of its offerings. They include breakroom supplies, gifts and cards for office parties and early-education toys and learning aids.
"We think they're taking the right steps," Tilghman says. "It will take a little while before it shows up in the numbers."
But Yarbrough says the chain likely needs to close more stores in the future and make them smaller — the average store is about 23,000 square feet.
"I wouldn't be surprised if there's a couple hundred more that need to be closed," he says. "The problem at the end of the day is every product they sell, you can go on Amazon and buy. And Amazon prices are just cheaper."
Staples said Thursday it will close 225 stores in North America by the end of 2015 amid falling fourth-quarter revenue as sales increasingly shift online.
The stock closed down $2.05, or 15.3%, to $11.35.
"With nearly half our sales generated online today, we're meeting the changing needs of business customers and taking aggressive action to reduce costs and improve efficiency," Staples CEO Ron Sargent said.
For the fourth quarter ended Feb. 1, total company sales fell 10.6% to $5.9 billion a year ago, the nation's No. 1 office supply chain said. Earnings were $212 million, or 33 cents per share, compared with $78 million, or 14 cents a share in a year-ago period that included substantial one-time charges. Wall Street analysts expected net income of 39 cents a share in the fourth quarter.
The company said it expects per-share earnings in the current quarter of 17 cents to 22 cents, well below analysts' estimates of 27 cents and the 26 cents it earned in the first quarter of 2013.
The store closings will affect about 12% of the company's 1,846 North American outlets — the majority in the U.S. — and are part of a plan to save $500 million in costs by the end of next year.
Like other retailers, Staples' last quarter was hurt by soft consumer demand for electronics and heavy discounting, says analyst Scott Tilghman of B. Riley & Co. Also, its business customers are disproportionately located in the Northeast, which was battered by cold and stormy weather.
Staples is snaring a healthy share of online sales, but must trim its base of stores accordingly, Tilghman says. A similar dynamic has partly contributed to recent store closings by retailers such as RadioShack, J.C. Penney, Sears and others. About 6% of all retail sales are online — a figure that's expected to grow to 10% in three to five years, according to Tilghman and the Commerce Department.
Specialty stores such as Staples are also facing increased competition from department stores such as Walmart and Target, further pressuring per-store profits, Tilghman says.
Staples, meanwhile, also has been hobbled by technological shifts at the office and home, which have sharply reduced the need for bread-and-butter Staples products such as paper, ink and toner, as well as the store's legacy services.
"You don't have people faxing stuff, and you don't have people making huge copies," says Brian Yarbrough, a research analyst with Edward Jones.
The company is responding with an increased emphasis on technology products such as tablets, which may drive traffic but are lower-margin, and open Staples up to more competition from the likes of Walmart and Target, Yarbrough says.
Staples is also expanding to offer new product lines for businesses, including industrial and medical supplies. Staples today said it's adding eight new product categories and 1,600 items to its stores, representing 20% of its offerings. They include breakroom supplies, gifts and cards for office parties and early-education toys and learning aids.
"We think they're taking the right steps," Tilghman says. "It will take a little while before it shows up in the numbers."
But Yarbrough says the chain likely needs to close more stores in the future and make them smaller — the average store is about 23,000 square feet.
"I wouldn't be surprised if there's a couple hundred more that need to be closed," he says. "The problem at the end of the day is every product they sell, you can go on Amazon and buy. And Amazon prices are just cheaper."
FEDS WANT ANSWERS ON WHY INFANT SEATS NOT RECALLED
This story first appeared in USA Today.
Federal safety officials on Thursday ordered child seat maker Graco to explain why it decided to exclude seven infant seat models from its recall of 3.8 million child seats last month and to hand over a trove of other related information.
In the child seats recalled, the buckles may not unlatch, making it difficult to remove the child from the seat. That could increase the risk of injury in a crash, fire or other emergency when a speedy exit from the vehicle is required.
The "special order" issued by the National Highway Traffic Safety Administration, asks for all complaints and information relating to its decision to change buckles and suppliers.
Graco said earlier that food and dried liquids can make some harness buckles progressively more difficult to open over time or become stuck in the latched position.
"We have received a request for information from NHTSA and are happy to comply with their request," Graco said in a statement Thursday . "We look forward to working with NHTSA as we continue our ongoing, constructive conversation to clarify any questions."
Graco said the company remains confident that its car seats are safe and comply with NHTSA's standards: "They have withstood rigorous internal testing that far exceeds federal requirements."
Consumers can order free replacement harness buckles online. The company says the seats can still be used while waiting for the new buckle. Graco's customer service team can be reached at 800-345-4109 or consumerservices@gracobaby.com.
Federal safety officials on Thursday ordered child seat maker Graco to explain why it decided to exclude seven infant seat models from its recall of 3.8 million child seats last month and to hand over a trove of other related information.
In the child seats recalled, the buckles may not unlatch, making it difficult to remove the child from the seat. That could increase the risk of injury in a crash, fire or other emergency when a speedy exit from the vehicle is required.
The "special order" issued by the National Highway Traffic Safety Administration, asks for all complaints and information relating to its decision to change buckles and suppliers.
Graco said earlier that food and dried liquids can make some harness buckles progressively more difficult to open over time or become stuck in the latched position.
"We have received a request for information from NHTSA and are happy to comply with their request," Graco said in a statement Thursday . "We look forward to working with NHTSA as we continue our ongoing, constructive conversation to clarify any questions."
Graco said the company remains confident that its car seats are safe and comply with NHTSA's standards: "They have withstood rigorous internal testing that far exceeds federal requirements."
Consumers can order free replacement harness buckles online. The company says the seats can still be used while waiting for the new buckle. Graco's customer service team can be reached at 800-345-4109 or consumerservices@gracobaby.com.
Thursday, March 6, 2014
WEST LEADS IN U.S. JOB GROWTH
Original Story from USATODAY.com.
Go west, young job-seeker.
Seven of the 10 states with the fastest job growth this year will be in the West, as the region benefits from a stronger housing recovery and continued gains in its bread-and-butter energy, technology and tourism industries, according to forecasts by IHS Global Insight.
The states, which generally led the nation with rapid payroll increases last year, as well, are North Dakota, Texas, Arizona, Colorado, Utah, Idaho and Oregon.
The West was a hotbed of population and job growth for decades after World War II, but some states in the region were hit harder by the housing downturn than the rest of the country and were slower to rebound early in the recovery.
Now that states such as Arizona and Nevada have worked through most of their home foreclosures, residential construction is rebounding sharply, spawning thousands of new jobs, economists say. Many Western states, however, still trail the nation in recouping jobs lost in the recession.
"It was down so far, and the housing market has finally stabilized," says Richard Wobbekind, head of business research at University of Colorado, Boulder.
Other factors are also at work. North Dakota and Texas are riding an oil boom after largely avoiding the recession's most punishing blows. Colorado and Utah, while enjoying a surge in oil and natural gas drilling, are also now high-tech centers helping satisfy Americans' appetite for mobile devices and applications.
Oregon is a semiconductor manufacturing hub. In Arizona, job growth is being fueled by a technology base that includes Apple's new 2,000-employee glass factory in Mesa, as well as surging tourism, now that rising household wealth is spurring more consumer spending.
As technology increasingly allows Americans to work remotely, the entire Western region is drawing more residents from other states who want to live amid scenic mountains and enjoy a better quality of life, says IHS economist Jim Diffley.
"They're just progressive, attractive places to live," Diffley says.
During the recovery's early days, migration to the West was limited by the large number of Americans who couldn't move because they owed more on their mortgages than their homes were worth, says economist Chris Lafakis of Moody's Analytics. But the stock of so-called underwater homes has fallen dramatically.
Home buyers are also finding it easier to qualify for mortgages, allowing them to pick up stakes. Many older Americans are finally feeling that their nest-egg investments are secure enough for them to move to retirement havens in the West.
"We expect 2014 to be the year when in-migration (to western states) picks up a lot," Lafakis says.
That will increase the need for local services and jobs.
Go west, young job-seeker.
Seven of the 10 states with the fastest job growth this year will be in the West, as the region benefits from a stronger housing recovery and continued gains in its bread-and-butter energy, technology and tourism industries, according to forecasts by IHS Global Insight.
The states, which generally led the nation with rapid payroll increases last year, as well, are North Dakota, Texas, Arizona, Colorado, Utah, Idaho and Oregon.
The West was a hotbed of population and job growth for decades after World War II, but some states in the region were hit harder by the housing downturn than the rest of the country and were slower to rebound early in the recovery.
Now that states such as Arizona and Nevada have worked through most of their home foreclosures, residential construction is rebounding sharply, spawning thousands of new jobs, economists say. Many Western states, however, still trail the nation in recouping jobs lost in the recession.
"It was down so far, and the housing market has finally stabilized," says Richard Wobbekind, head of business research at University of Colorado, Boulder.
Other factors are also at work. North Dakota and Texas are riding an oil boom after largely avoiding the recession's most punishing blows. Colorado and Utah, while enjoying a surge in oil and natural gas drilling, are also now high-tech centers helping satisfy Americans' appetite for mobile devices and applications.
Oregon is a semiconductor manufacturing hub. In Arizona, job growth is being fueled by a technology base that includes Apple's new 2,000-employee glass factory in Mesa, as well as surging tourism, now that rising household wealth is spurring more consumer spending.
As technology increasingly allows Americans to work remotely, the entire Western region is drawing more residents from other states who want to live amid scenic mountains and enjoy a better quality of life, says IHS economist Jim Diffley.
"They're just progressive, attractive places to live," Diffley says.
During the recovery's early days, migration to the West was limited by the large number of Americans who couldn't move because they owed more on their mortgages than their homes were worth, says economist Chris Lafakis of Moody's Analytics. But the stock of so-called underwater homes has fallen dramatically.
Home buyers are also finding it easier to qualify for mortgages, allowing them to pick up stakes. Many older Americans are finally feeling that their nest-egg investments are secure enough for them to move to retirement havens in the West.
"We expect 2014 to be the year when in-migration (to western states) picks up a lot," Lafakis says.
That will increase the need for local services and jobs.
Wednesday, March 5, 2014
BARRA: GM WILL HOLD ITSELF 'ACCOUNTABLE' FOR RECALL PROBLEMS
This story first appeared in The Detroit News.
General Motors CEO Mary Barra vowed Tuesday to hold the company accountable for the chain of the events that led to the recall of 1.6 million older cars linked to 13 deaths when ignition switch problems caused air bags not to deploy in frontal crashes.
Barra posted on an internal website and on a company blog Tuesday that she has created a “working group of senior executives, which I lead, to direct our response, monitor our progress and make adjustments as necessary. We sincerely apologized to our customers and others who have a stake in GM’s success.” The company originally reported that the message was sent as an email to employees.
A chronology that GM turned over to NHTSA last week showed GM downplayed the ignition switch issue in prior years, including canceling in 2005 an approved redesign of the ignition key head. By the end of 2007, GM said it knew of 10 frontal crashes in which air bags didn’t deploy — linked to the ignition problem — but the automaker opted not to recall the cars. Of the 13 deaths reported by GM as linked to the issue, the last occurred in December 2009.
The Detroit automaker “launched an internal review to give us an unvarnished report on what happened. We will hold ourselves accountable and improve our processes so our customers do not experience this again,” said Barra’s email, which was distributed by GM to reporters.
She said the company is going far beyond simply recalling the vehicles.
“When this was brought to my team a few weeks ago, we acted without hesitation to go well beyond the decision by the technical experts,” Barra said in an email to employees.
This is the first major crisis Barra has faced since taking over the reins at GM less than two months ago.
Last week, The Detroit News first reported GM had hired an outside law firm to conduct a full review of the issue. GM said after it released Barra’s email that the internal review to which she referred is an outside review being led by the law firm that GM has not identified.
The review will carefully scrutinize decisions by GM over a decade, and the automaker’s initial decisions not to recall the cars but instead issue a technical service bulletin to dealers. GM North America President Alan Batey apologized last week for the company’s handling of the issue and said in a statement that its review was flawed.
Barra declined to comment about the issues when asked about them by the Reuters news organization last week.
In the letter, Barra said, “Our process for determining whether and when to recall a vehicle is decided by experienced technical experts. They do their work independent of managers with responsibilities for other aspects of the business, so that their decisions are made solely on technical facts and engineering analysis.”
GM expects to have replacement parts ready by early April. Barra said GM has “empowered our dealers with resources to provide affected customers with the peace of mind they deserve” and has “coordinated with our supplier to ramp up development and validation of replacement parts to get them into the field as fast as possible.”
She said some have asked if “the recall of these out-of-production vehicles might affect our company’s reputation or sales of our current models.
“My answer is simple: that’s not the issue. The vehicles we make today are the best in memory and I’m confident that they will do fine, on their own merits. And our company’s reputation won’t be determined by the recall itself, but by how we address the problem going forward.”
Last week, the National Highway Safety Administration said it was opening a formal investigation into the timeliness of GM’s recall. It is reviewing GM’s recall of 2005-07 Cobalts and other similar cars. In early February the automaker said it would recall 788,000 vehicles but didn’t recall all models with the same suspect part.
Last week, GM announced it was doubling the size of the recall to 1.62 million worldwide, including about 1.37 million in the United States.
GM could face a maximum $35 million fine if it failed to recall the vehicles within five days of determining they posed an unreasonable risk to safety. It also faces tens of millions of dollars in costs to recall the vehicles.
GM could also face new lawsuits over the problem. The automaker already has settled at least two suits involving fatal Cobalt crashes. Sean Kane, a safety advocate, said the recall could prompt Congress to scrutinize NHTSA and look at how fast it is responding to safety issues.
General Motors CEO Mary Barra vowed Tuesday to hold the company accountable for the chain of the events that led to the recall of 1.6 million older cars linked to 13 deaths when ignition switch problems caused air bags not to deploy in frontal crashes.
Barra posted on an internal website and on a company blog Tuesday that she has created a “working group of senior executives, which I lead, to direct our response, monitor our progress and make adjustments as necessary. We sincerely apologized to our customers and others who have a stake in GM’s success.” The company originally reported that the message was sent as an email to employees.
A chronology that GM turned over to NHTSA last week showed GM downplayed the ignition switch issue in prior years, including canceling in 2005 an approved redesign of the ignition key head. By the end of 2007, GM said it knew of 10 frontal crashes in which air bags didn’t deploy — linked to the ignition problem — but the automaker opted not to recall the cars. Of the 13 deaths reported by GM as linked to the issue, the last occurred in December 2009.
The Detroit automaker “launched an internal review to give us an unvarnished report on what happened. We will hold ourselves accountable and improve our processes so our customers do not experience this again,” said Barra’s email, which was distributed by GM to reporters.
She said the company is going far beyond simply recalling the vehicles.
“When this was brought to my team a few weeks ago, we acted without hesitation to go well beyond the decision by the technical experts,” Barra said in an email to employees.
This is the first major crisis Barra has faced since taking over the reins at GM less than two months ago.
Last week, The Detroit News first reported GM had hired an outside law firm to conduct a full review of the issue. GM said after it released Barra’s email that the internal review to which she referred is an outside review being led by the law firm that GM has not identified.
The review will carefully scrutinize decisions by GM over a decade, and the automaker’s initial decisions not to recall the cars but instead issue a technical service bulletin to dealers. GM North America President Alan Batey apologized last week for the company’s handling of the issue and said in a statement that its review was flawed.
Barra declined to comment about the issues when asked about them by the Reuters news organization last week.
In the letter, Barra said, “Our process for determining whether and when to recall a vehicle is decided by experienced technical experts. They do their work independent of managers with responsibilities for other aspects of the business, so that their decisions are made solely on technical facts and engineering analysis.”
GM expects to have replacement parts ready by early April. Barra said GM has “empowered our dealers with resources to provide affected customers with the peace of mind they deserve” and has “coordinated with our supplier to ramp up development and validation of replacement parts to get them into the field as fast as possible.”
She said some have asked if “the recall of these out-of-production vehicles might affect our company’s reputation or sales of our current models.
“My answer is simple: that’s not the issue. The vehicles we make today are the best in memory and I’m confident that they will do fine, on their own merits. And our company’s reputation won’t be determined by the recall itself, but by how we address the problem going forward.”
Last week, the National Highway Safety Administration said it was opening a formal investigation into the timeliness of GM’s recall. It is reviewing GM’s recall of 2005-07 Cobalts and other similar cars. In early February the automaker said it would recall 788,000 vehicles but didn’t recall all models with the same suspect part.
Last week, GM announced it was doubling the size of the recall to 1.62 million worldwide, including about 1.37 million in the United States.
GM could face a maximum $35 million fine if it failed to recall the vehicles within five days of determining they posed an unreasonable risk to safety. It also faces tens of millions of dollars in costs to recall the vehicles.
GM could also face new lawsuits over the problem. The automaker already has settled at least two suits involving fatal Cobalt crashes. Sean Kane, a safety advocate, said the recall could prompt Congress to scrutinize NHTSA and look at how fast it is responding to safety issues.
Subscribe to:
Posts (Atom)