Original Story: latimes.com
Vince Vaughn, who will be on the series “True Detective” next year, has been buying homes in the Los Angeles area for a year and half, and now it all adds up. He’s leasing at least one of them out in his role as landlord. A Rochester Landlord Lawyer has experience in landlord tenant matters.
Just on the rental market is the place he bought this summer in Hollywood Hills West from Kate Bosworth for $2.375 million.
Set behind gates on a half-acre, the updated 1955 contemporary is available at $14,000 a month. The lap pool has been refinished and the listing describes the 2,890-square-foot home as “great for entertaining” with a kitchen outfitted with professional appliances and two farmhouse sinks.
Other living spaces in the open-plan house include living and dining rooms with wood-beam ceilings, three bedrooms and 2.5 bathrooms. There are canyon and greenbelt views.
Vaughn, 44, has starred in such films as "Delivery Man" (2013), "Wedding Crashers" (2005) and "Old School" (2003). He is working on several movies for next year including the crime drama "Term Life."
He also owns homes in La Canada Flintridge and Manhattan Beach, where he bought former USC football coach Lane Kiffin's house, as well as a penthouse in Chicago.
Karen Lower of Coldwell Banker has the lease listing.
Wednesday, October 15, 2014
Monday, October 13, 2014
VENTURE CAPITALISTS RETURN TO BACKING SCIENCE START-UPS
Original Story: nytimes.com
Vestaron makes an eco-friendly pesticide derived from spider venom. Bagaveev uses 3-D printers to make rocket engines for nanosatellites. Transatomic Power is developing a next-generation reactor that runs on nuclear waste.
They all have one thing in common: money from Silicon Valley venture capitalists. An Atlanta Business Formation Lawyer has experience assisting clients in every aspect of forming their business, from obtaining start up seed money to contract preparation.
After years of shying away from science, engineering and clean-technology start-ups, investors are beginning to take an interest in them again, raising hopes among entrepreneurs in those areas that a long slump is finally over. But these start-ups face intense pressure to prove that their science can turn a profit more quickly than hot tech companies like Snapchat and Uber.
In August, the Founders Fund, which has backed social networks like Facebook and Yammer and the streaming-music service Spotify, announced a $2 million investment in Transatomic Power of Cambridge, Mass. Days earlier, Y Combinator, known for aiding web and mobile-app start-ups like the social news site Reddit and the game maker Omgpop, took part in a $1.5 million early investment in Helion Energy, which is developing an engine powered by nuclear fusion. An Atlanta Business Startup Lawyer has experience assisting clients with new business ventures.
And last month, Google said it was buying Lift Labs, a San Francisco biotechnology start-up that makes a high-tech spoon for people with hand tremors.
“We’re trying to revolutionize pesticides,” said John Sorenson, a former genetics researcher and Vestaron’s chief executive, who for years struggled to find investors as he watched other start-ups, like Snapchat and Square, raise many millions of dollars. Vestaron finally closed its third round of financing last month. “Thankfully, venture funders are starting to invest again in real, hard-core science and innovation,” Mr. Sorenson said. A Boston Business Lawyer has experience assisting business clients create an effective path to success in any business situation.
Over all, industrial and energy start-ups attracted $1.24 billion in venture capital financing in the first half of 2014, more than twice as much as in the period a year earlier, according to statistics from the National Venture Capital Association. Still, investment remains well below peaks reached in 2008, when industrial and energy start-ups attracted $4.64 billion.
Investment in biotechnology start-ups rose 26 percent in the first half of 2014, to $2.93 billion, from the period a year earlier and is on track to exceed the 2008 peak of $5.14 billion.
The investments are still dwarfed by the money pouring into other kinds of technology companies, especially those offering web and mobile services. Software start-ups attracted $11.2 billion in venture capital financing last year, 85 percent more than in 2008.
Investors partly feel betrayed by the billions of dollars they lost on the clean-tech boom and bust, when backers of solar panels, algae biofuels and futuristic batteries promised to change the world, but the companies mostly flopped. That experience has made investors wary of science-based start-ups with long development timelines in still nascent or heavily regulated markets.
But there is a growing feeling, investors say, that Silicon Valley has been avoiding the world’s more difficult problems, a sentiment captured by a Founders Fund motto: “We wanted flying cars, instead we got 140 characters.”
That unease is compounded by a sense that the field of consumer Internet companies has become impossibly crowded. To succeed, investors say, a company must break away from the pack. Many startup businesses in Tennessee are working with Alan Crone a Memphis lawyer to provide business formation contracts and draft articles of incorporation for an LLC.
“I’m just so interested in anything that gets me closer to an Iron Man suit,” said Adam Draper, the chief executive and founder of Boost VC. One of the companies that Boost has mentored or coached is Bagaveev, a start-up using 3-D printers to make rocket engines that launch nanosatellites, a type of satellite that may weigh as little as a couple of pounds, into orbit. “Social media’s already happened. V.C. funding is supposed to be about funding what comes next.”
Transatomic Power, founded in 2011 by nuclear scientists at the Massachusetts Institute of Technology, is in the early stages of developing small-scale molten-salt reactors that could generate reliable, clean energy without creating nuclear waste. The technology is from the 1960s, but Transatomic Power is developing new designs, using its financing to run tests on materials and models. The start-up would need far more funding, or a partner, to start building the reactors.
“The world needs a source of stable, cheap electricity, and a new approach to nuclear power would seem like an obvious solution,” said Leslie Dewan, a co-founder and the chief executive of Transatomic Power. “But it’s tricky getting $300 million from investors,” she said. “Maybe we need to build an iPhone app.”
Vestaron, a pesticide company started in 2001, has similarly lofty goals in agriculture and food, a specialty basking in newfound attention from Silicon Valley. Vestaron says its spider-venom insecticide controls beetles, caterpillars and other pests without harming other animals. The insecticide, the company says, reduces agriculture’s environmental footprint, makes work safer for agricultural laborers and overcomes the resistance pests have built up to other pesticides over the years.
This year, the Environmental Protection Agency approved the active ingredient Vestaron derives from the venom, giving the start-up the go-ahead to sell its pesticide commercially to vegetable and greenhouse farmers in 2015. Vestaron, which has a target of $1 million in sales in the first year, will use the latest round of financing to introduce its products to farmers, and eventually to home and garden uses, Mr. Sorenson, Vestaron’s chief, said.
But even when science start-ups attract money, they are pressured from the beginning to think about profit.
For Xcor Aerospace in Mojave, Calif., that meant putting aside its long-term goals of building suborbital space planes and focusing instead on developing rocket-engine igniters to sell to NASA and aerospace companies. With a steady stream of income, Xcor was able to put the engine on the back of an experimental aircraft to test its space plane concept. After raising $14.2 million in May through the Space Angels Network, a group of angel investors in the aerospace field, Xcor is finally putting together its plane’s fuselage.
“They knew that you couldn’t come and ask for a billion dollars to build a space plane,” said Chad Anderson, a managing director for the Space Angels Network. “So what they started with was the smallest component they could make that had commercial value.”
Bagaveev can only dream of that kind of money. It raised just $535,000 in seed funding in April from a group of investors to develop reusable launchers that can send a satellite weighing up to 22 pounds into space — a technology that Nadir Bagaveyev, the company’s founder and chief executive, says will help open outer space to small companies that cannot afford multimillion-dollar satellites.
“We’re like the UPS of space,” Mr. Bagaveyev said. “You bring it to us, and we promise to bring it up within a week to a month.”
Bagaveev will use the seed money, Mr. Bagaveyev said, to try to prove that his idea has potential. The start-up is planning its first test launch at the end of the year, and Mr. Bagaveyev hopes that will help the company attract more investment.
“We’ll show what we’re capable of, and then we’ll be back for more investment,” he said. “I think investors are bored with investing in another messaging app. And our idea is crazy enough that it might just work.”
Vestaron makes an eco-friendly pesticide derived from spider venom. Bagaveev uses 3-D printers to make rocket engines for nanosatellites. Transatomic Power is developing a next-generation reactor that runs on nuclear waste.
They all have one thing in common: money from Silicon Valley venture capitalists. An Atlanta Business Formation Lawyer has experience assisting clients in every aspect of forming their business, from obtaining start up seed money to contract preparation.
After years of shying away from science, engineering and clean-technology start-ups, investors are beginning to take an interest in them again, raising hopes among entrepreneurs in those areas that a long slump is finally over. But these start-ups face intense pressure to prove that their science can turn a profit more quickly than hot tech companies like Snapchat and Uber.
In August, the Founders Fund, which has backed social networks like Facebook and Yammer and the streaming-music service Spotify, announced a $2 million investment in Transatomic Power of Cambridge, Mass. Days earlier, Y Combinator, known for aiding web and mobile-app start-ups like the social news site Reddit and the game maker Omgpop, took part in a $1.5 million early investment in Helion Energy, which is developing an engine powered by nuclear fusion. An Atlanta Business Startup Lawyer has experience assisting clients with new business ventures.
And last month, Google said it was buying Lift Labs, a San Francisco biotechnology start-up that makes a high-tech spoon for people with hand tremors.
“We’re trying to revolutionize pesticides,” said John Sorenson, a former genetics researcher and Vestaron’s chief executive, who for years struggled to find investors as he watched other start-ups, like Snapchat and Square, raise many millions of dollars. Vestaron finally closed its third round of financing last month. “Thankfully, venture funders are starting to invest again in real, hard-core science and innovation,” Mr. Sorenson said. A Boston Business Lawyer has experience assisting business clients create an effective path to success in any business situation.
Over all, industrial and energy start-ups attracted $1.24 billion in venture capital financing in the first half of 2014, more than twice as much as in the period a year earlier, according to statistics from the National Venture Capital Association. Still, investment remains well below peaks reached in 2008, when industrial and energy start-ups attracted $4.64 billion.
Investment in biotechnology start-ups rose 26 percent in the first half of 2014, to $2.93 billion, from the period a year earlier and is on track to exceed the 2008 peak of $5.14 billion.
The investments are still dwarfed by the money pouring into other kinds of technology companies, especially those offering web and mobile services. Software start-ups attracted $11.2 billion in venture capital financing last year, 85 percent more than in 2008.
Investors partly feel betrayed by the billions of dollars they lost on the clean-tech boom and bust, when backers of solar panels, algae biofuels and futuristic batteries promised to change the world, but the companies mostly flopped. That experience has made investors wary of science-based start-ups with long development timelines in still nascent or heavily regulated markets.
But there is a growing feeling, investors say, that Silicon Valley has been avoiding the world’s more difficult problems, a sentiment captured by a Founders Fund motto: “We wanted flying cars, instead we got 140 characters.”
That unease is compounded by a sense that the field of consumer Internet companies has become impossibly crowded. To succeed, investors say, a company must break away from the pack. Many startup businesses in Tennessee are working with Alan Crone a Memphis lawyer to provide business formation contracts and draft articles of incorporation for an LLC.
“I’m just so interested in anything that gets me closer to an Iron Man suit,” said Adam Draper, the chief executive and founder of Boost VC. One of the companies that Boost has mentored or coached is Bagaveev, a start-up using 3-D printers to make rocket engines that launch nanosatellites, a type of satellite that may weigh as little as a couple of pounds, into orbit. “Social media’s already happened. V.C. funding is supposed to be about funding what comes next.”
Transatomic Power, founded in 2011 by nuclear scientists at the Massachusetts Institute of Technology, is in the early stages of developing small-scale molten-salt reactors that could generate reliable, clean energy without creating nuclear waste. The technology is from the 1960s, but Transatomic Power is developing new designs, using its financing to run tests on materials and models. The start-up would need far more funding, or a partner, to start building the reactors.
“The world needs a source of stable, cheap electricity, and a new approach to nuclear power would seem like an obvious solution,” said Leslie Dewan, a co-founder and the chief executive of Transatomic Power. “But it’s tricky getting $300 million from investors,” she said. “Maybe we need to build an iPhone app.”
Vestaron, a pesticide company started in 2001, has similarly lofty goals in agriculture and food, a specialty basking in newfound attention from Silicon Valley. Vestaron says its spider-venom insecticide controls beetles, caterpillars and other pests without harming other animals. The insecticide, the company says, reduces agriculture’s environmental footprint, makes work safer for agricultural laborers and overcomes the resistance pests have built up to other pesticides over the years.
This year, the Environmental Protection Agency approved the active ingredient Vestaron derives from the venom, giving the start-up the go-ahead to sell its pesticide commercially to vegetable and greenhouse farmers in 2015. Vestaron, which has a target of $1 million in sales in the first year, will use the latest round of financing to introduce its products to farmers, and eventually to home and garden uses, Mr. Sorenson, Vestaron’s chief, said.
But even when science start-ups attract money, they are pressured from the beginning to think about profit.
For Xcor Aerospace in Mojave, Calif., that meant putting aside its long-term goals of building suborbital space planes and focusing instead on developing rocket-engine igniters to sell to NASA and aerospace companies. With a steady stream of income, Xcor was able to put the engine on the back of an experimental aircraft to test its space plane concept. After raising $14.2 million in May through the Space Angels Network, a group of angel investors in the aerospace field, Xcor is finally putting together its plane’s fuselage.
“They knew that you couldn’t come and ask for a billion dollars to build a space plane,” said Chad Anderson, a managing director for the Space Angels Network. “So what they started with was the smallest component they could make that had commercial value.”
Bagaveev can only dream of that kind of money. It raised just $535,000 in seed funding in April from a group of investors to develop reusable launchers that can send a satellite weighing up to 22 pounds into space — a technology that Nadir Bagaveyev, the company’s founder and chief executive, says will help open outer space to small companies that cannot afford multimillion-dollar satellites.
“We’re like the UPS of space,” Mr. Bagaveyev said. “You bring it to us, and we promise to bring it up within a week to a month.”
Bagaveev will use the seed money, Mr. Bagaveyev said, to try to prove that his idea has potential. The start-up is planning its first test launch at the end of the year, and Mr. Bagaveyev hopes that will help the company attract more investment.
“We’ll show what we’re capable of, and then we’ll be back for more investment,” he said. “I think investors are bored with investing in another messaging app. And our idea is crazy enough that it might just work.”
SMALL BUSINESSES IN SOCAL INCREASINGLY OPTIMISTIC, SURVEY FINDS
Original Story: latimes.com
Businesses in Southern California are increasingly optimistic, with most expecting better revenue this year and even higher sales in 2015, according to a new report.
The vast majority expect to maintain or boost their investments in leases, contracts and other long-term commitments, according to the survey. Nearly all expect to do the same with their marketing and sales budgets.
The percentage of businesses who expect to trim full-time head counts is in the single digits, with business and professional services most likely to anticipate boosting hiring. More than a third said they’re planning to bring on additional part-time workers.
The survey was commissioned by Los Angeles financial institution CTBC Bank Corp. and conducted by FTI Consulting from 432 respondents at businesses with 1,000 employees or fewer.
“This was the black-and-white, graphic proof of the optimism,” said Noor Menai, chief executive of CTBC. “This really comes from the ground up – you’re talking about the lifeblood of the U.S. economy in small businesses.”
Doing business in Southern California has some major advantages, respondents said. The workforce is enormous and the education level of workers is higher than it is in most other places.
And manufacturers especially said the easy access to national and global markets through extensive transportation networks was key.
“There was a gestation period. We saw during the crisis that a lot of business left the country or went dormant,” Menai said. “But they’ve started seeing the right things happen in recent years. It’s coming together.”
But the sense of cheer among local businesses is tinged with reservations.
More than 7 in 10 respondents said it’s difficult to find and retain workers with desirable skill sets.
Two-thirds said they had to alter their business strategy to draw talent. Many suggested that companies increase on-the-job training while also encouraging educational institutions to direct students into disciplines most needed by employers.
Many complained that tight capital and cash-flow problems were holding them back from starting new businesses, as were high labor costs. Government taxes and regulations at the state level were also troublesome, as was the cost of real estate and facilities.
Half of the survey respondents said they were located in Los Angeles County. More than a third hailed from Orange County or San Diego. The rest came from the remaining Southern California counties.
Six in 10 respondents said they were managers; the rest said they were owners. Manufacturers made up 15% of participants; professional services constituted 10%. The rest included business and financial services, construction, information technology and other companies.
The largest percentage of respondents – 19% – said they had revenue of $5 million to $10 million each year.
Businesses in Southern California are increasingly optimistic, with most expecting better revenue this year and even higher sales in 2015, according to a new report.
The vast majority expect to maintain or boost their investments in leases, contracts and other long-term commitments, according to the survey. Nearly all expect to do the same with their marketing and sales budgets.
The percentage of businesses who expect to trim full-time head counts is in the single digits, with business and professional services most likely to anticipate boosting hiring. More than a third said they’re planning to bring on additional part-time workers.
The survey was commissioned by Los Angeles financial institution CTBC Bank Corp. and conducted by FTI Consulting from 432 respondents at businesses with 1,000 employees or fewer.
“This was the black-and-white, graphic proof of the optimism,” said Noor Menai, chief executive of CTBC. “This really comes from the ground up – you’re talking about the lifeblood of the U.S. economy in small businesses.”
Doing business in Southern California has some major advantages, respondents said. The workforce is enormous and the education level of workers is higher than it is in most other places.
And manufacturers especially said the easy access to national and global markets through extensive transportation networks was key.
“There was a gestation period. We saw during the crisis that a lot of business left the country or went dormant,” Menai said. “But they’ve started seeing the right things happen in recent years. It’s coming together.”
But the sense of cheer among local businesses is tinged with reservations.
More than 7 in 10 respondents said it’s difficult to find and retain workers with desirable skill sets.
Two-thirds said they had to alter their business strategy to draw talent. Many suggested that companies increase on-the-job training while also encouraging educational institutions to direct students into disciplines most needed by employers.
Many complained that tight capital and cash-flow problems were holding them back from starting new businesses, as were high labor costs. Government taxes and regulations at the state level were also troublesome, as was the cost of real estate and facilities.
Half of the survey respondents said they were located in Los Angeles County. More than a third hailed from Orange County or San Diego. The rest came from the remaining Southern California counties.
Six in 10 respondents said they were managers; the rest said they were owners. Manufacturers made up 15% of participants; professional services constituted 10%. The rest included business and financial services, construction, information technology and other companies.
The largest percentage of respondents – 19% – said they had revenue of $5 million to $10 million each year.
LIVING ON THE BARE MINIMUM
Original Story: latimes.com
There's little room for surprises in James Collins' monthly scramble to manage rent, bills, debts and gas.
The $250 repair bill for his fiancee's engagement ring didn't fit the budget. So he asked the jeweler if he could add the repair cost to his one-year installment plan for the ring. No problem, an employee told him last month.
But when he returned a week later, a manager vetoed that decision — and kept the ring as collateral on the bill.
"I still have this bill, I don't have the ring, and I don't know when I'm going to get the $250 to get it back," Collins said.
Such are the daily trade-offs in one of the nation's most expensive cities with one of the largest shares of working poor. Collins, 42 and a father of two, makes $9.95 an hour, just above the state minimum, as an activities coordinator at a nursing facility in Watts. On the day he needed $250 to repair the ring, he had less than $30 in his checking account.
More than a third of private-sector workers in Los Angeles make less than $13.25 an hour — the new minimum wage proposed by Mayor Eric Garcetti last month. City Council members supporting the bill would like to further boost the floor to $15.25 an hour by 2019.
"More and more companies are moving to the minimum wage as their main worker's wage," Garcetti said. "That has kind of undermined that promise in America that if you work hard, you will be able to support yourself."
The political push to raise wages will be as controversial in L.A. as it is nationally, and researchers continue to squabble over whether and how much it would help low-income workers — or hurt the businesses that employ them. What's clear is that the measure would affect far more people in Los Angeles than in any other city considering a minimum wage hike.
With its huge population, high poverty rate and high cost of living, Los Angeles is among the nation's most impoverished cities. About 567,000 workers in the city earn between $9 an hour and $13.25, according to a study, requested by Garcetti, from UC Berkeley's Institute for Research on Labor and Employment.
They are primarily middle-aged workers supporting families, the Berkeley researchers found, relying on data from the U.S. census and other federal sources.
Contrary to stereotypes of minimum wage workers as teenagers or part-timers, nearly half of those who would be affected are between 30 and 54 years old. More than a third are supporting children. More than two-thirds work full time. Nearly half have taken college course work.
They hail from a wide variety of occupations. Many work in restaurants or retail positions. But others are professionals in healthcare, manufacturing or nonprofit organizations. They are bank tellers, telemarketers, library assistants and zookeepers.
Minimum wage workers often remain in the same jobs for years, with few chances for advancement or raises. They juggle several jobs to keep up with expenses, sacrificing sleep and time with family.
Often, they have no health benefits. If they do, many can't afford to pay for them.
"Right now, minimum wage is not a steppingstone," said Michael Reich, an economics professor at UC Berkeley who has studied the effects of raising the minimum wage. "It's a place where people are stuck for long periods of time."
A $2 raise in two decades
Bartolome Perez has worked at the same McDonald's franchise in South Los Angeles for 21 years. He started as a custodian, became a cook and later moved up to crew trainer. He's back to being a cook.
He started at $4.25 an hour — the minimum wage in 1993 — and now makes $10.75 an hour. After adjusting for inflation, that's a raise of slightly more than $2 an hour over the last two decades.
"Right now in my savings account I have $400," Perez said on a recent evening in a small two-bedroom duplex he rents with his wife, two daughters and a 10-month-old granddaughter. "If I divide that by 21 years, how much have I saved? And is that what a human being deserves, having spent a whole life working for a corporation?"
He said he has never had benefits, unless you count the free turkey a manager gave him one Thanksgiving. He supplements his income by working part-time as a soccer coach for the L.A. Unified School District.
Since last year, he's been active with other fast-food workers who have staged protests pushing for a $15-an-hour minimum wage.
His wife, Vilma, also works for the district as a cafeteria worker. After nearly a decade of part-time work, she was recently upgraded to full-time status. It's the first time she and her husband have had medical benefits in a quarter-century of living in the United States.
The family has gotten by on luck and medicine brought by relatives from El Salvador.
Perez has looked for other jobs through the years in other industries like food packaging. Some paid more; others about the same. He stuck with McDonald's because of the consistency.
"The problem wasn't with the jobs themselves, it was simply that they were not stable," he said. "They were temporary, and bills are not temporary."
The poor leading the poor
Every day, Yvonne Vasquez counsels those who are homeless, unemployed or struggling to get by on low salaries as an intake specialist at the nonprofit Skid Row Development Corp.
She makes $11 an hour and often reflects on how her circumstances aren't so different from those of the people she tries to help.
"If I didn't like the job, I think I'd hate the pay," said Vasquez, 38.
She has three children and lives with a long-term boyfriend in an apartment near Staples Center. "If we would ever break up, I would basically be homeless," she said.
Still, she's skeptical of Garcetti's push for $13.25 an hour. She has health benefits, sick leave and a job that allows her the flexibility to take classes at Los Angeles Trade Technical College.
Vasquez believes prices would go up if employers are forced to raise wages — so would she really get ahead? Smaller businesses and nonprofits like Skid Row Development might have to cut staff.
"Everybody sees the money, but they don't see the issues, the problems that would come with it," she said. "They'd probably hire someone more educated, maybe with a B.A. or master's, pay them three bucks more and let one of us go."
Employed and homeless
Nelson Rice is just entering the workforce at age 19, and already he can't keep up. After leaving home at 18 and training as a certified nursing assistant, he's had trouble finding housing he can afford.
He makes $10.10 working at a nursing home, but he's been homeless for nearly a year, bouncing among several youth shelters. He expects to remain that way until he gets his GED and a license to be a vocational nurse.
Recently, a group of young men saw him in his scrubs on the bus and attacked him, fracturing his jaw. They wanted money, and they assumed, from his medical garb, that he made more, he said.
"I love L.A., but I can't even enjoy the city I was born in," Rice said, struggling to speak with his jaw wired shut. "It's not beneficial to me at all. It just stresses people out trying to make money."
Rice's situation also underscores one of the central challenges of raising the minimum wage within Los Angeles city limits. He works at a nursing home in Lynwood — just southeast of the city limit — meaning he wouldn't benefit from the wage increase unless political leaders there follow Garcetti's lead.
Experts caution that having different minimum wage laws across the 88 cities of Los Angeles County might drive low-skilled jobs out of Los Angeles proper.
"If they can move a mile down the road and cut their wage bills substantially, they will," said Christopher Thornberg, an expert on the California economy who is founding partner of Beacon Economics. "It should be at the state or county level, not at the city level. This may be OK for the county, but it's terrible for the city."
But will they cut my hours?
For many workers, it's not just low wages that cause financial pressure. It's also uncertainty about hours.
Zenaida Torres, 45, earns $9 an hour as a server at a Mexican restaurant in Boyle Heights.
She loves what she does, but feels overworked and exploited. Recently, she and several colleagues accused their employer of wage theft, and the restaurant agreed to pay a settlement.
But Torres said her hours were dramatically cut in retaliation — she's now able to work only on weekends, about 15 hours a week. She fears she'll be fired, and worries about whether she could find a better job.
Her feelings are mixed on a minimum wage increase. If the required pay goes up, employers might hesitate to hire her, she said in Spanish, through a translator. But more income would enable her to move into a larger apartment, allowing her 12-year-old daughter, Angelica, to have her own room.
Currently, the two squeeze into a studio in East Los Angeles. Her paycheck is quickly consumed by basic bills: $700 in rent; a 30-day bus pass; the phone bill. There's nothing left.
"I'm looking for different alternatives — a way to make money independently," she said. "Maybe I'll make crafts, sell food on the street, even sing — anything that can get me an income."
Will she leave me?
Collins, who works at the Watts nursing facility, has lived on a financial precipice for years.
In a recent Friday, he had about $17 left from the check he got a few days before. He needed to spend at least $10 to make it to a once-a-week course he's taking in the San Fernando Valley, 41 miles from where he lives in Long Beach.
He hopes to become certified as a social services designee, which might get him up to $12 an hour.
The gas might last three more days, he said. Then he'd have to borrow from his fiancee or co-workers.
Sometimes he thinks: "How do I hold on to this woman, if she's giving me money for gas?'"
A boost to $13.25, he said, would help. Maybe he wouldn't have to delay paying the insurance one month, and the utilities the next.
He might take his daughters out to eat, or buy health insurance through his employer.
Or get his fiancee's ring out of hock.
"I've come to the realization that I'll probably never have a house, never have a new car," he said. "I just want the security of knowing that I can get a one-bedroom, furnish it, and just pay my bills. I don't think that's too much to ask for out of life right now."
There's little room for surprises in James Collins' monthly scramble to manage rent, bills, debts and gas.
The $250 repair bill for his fiancee's engagement ring didn't fit the budget. So he asked the jeweler if he could add the repair cost to his one-year installment plan for the ring. No problem, an employee told him last month.
But when he returned a week later, a manager vetoed that decision — and kept the ring as collateral on the bill.
"I still have this bill, I don't have the ring, and I don't know when I'm going to get the $250 to get it back," Collins said.
Such are the daily trade-offs in one of the nation's most expensive cities with one of the largest shares of working poor. Collins, 42 and a father of two, makes $9.95 an hour, just above the state minimum, as an activities coordinator at a nursing facility in Watts. On the day he needed $250 to repair the ring, he had less than $30 in his checking account.
More than a third of private-sector workers in Los Angeles make less than $13.25 an hour — the new minimum wage proposed by Mayor Eric Garcetti last month. City Council members supporting the bill would like to further boost the floor to $15.25 an hour by 2019.
"More and more companies are moving to the minimum wage as their main worker's wage," Garcetti said. "That has kind of undermined that promise in America that if you work hard, you will be able to support yourself."
The political push to raise wages will be as controversial in L.A. as it is nationally, and researchers continue to squabble over whether and how much it would help low-income workers — or hurt the businesses that employ them. What's clear is that the measure would affect far more people in Los Angeles than in any other city considering a minimum wage hike.
With its huge population, high poverty rate and high cost of living, Los Angeles is among the nation's most impoverished cities. About 567,000 workers in the city earn between $9 an hour and $13.25, according to a study, requested by Garcetti, from UC Berkeley's Institute for Research on Labor and Employment.
They are primarily middle-aged workers supporting families, the Berkeley researchers found, relying on data from the U.S. census and other federal sources.
Contrary to stereotypes of minimum wage workers as teenagers or part-timers, nearly half of those who would be affected are between 30 and 54 years old. More than a third are supporting children. More than two-thirds work full time. Nearly half have taken college course work.
They hail from a wide variety of occupations. Many work in restaurants or retail positions. But others are professionals in healthcare, manufacturing or nonprofit organizations. They are bank tellers, telemarketers, library assistants and zookeepers.
Minimum wage workers often remain in the same jobs for years, with few chances for advancement or raises. They juggle several jobs to keep up with expenses, sacrificing sleep and time with family.
Often, they have no health benefits. If they do, many can't afford to pay for them.
"Right now, minimum wage is not a steppingstone," said Michael Reich, an economics professor at UC Berkeley who has studied the effects of raising the minimum wage. "It's a place where people are stuck for long periods of time."
A $2 raise in two decades
Bartolome Perez has worked at the same McDonald's franchise in South Los Angeles for 21 years. He started as a custodian, became a cook and later moved up to crew trainer. He's back to being a cook.
He started at $4.25 an hour — the minimum wage in 1993 — and now makes $10.75 an hour. After adjusting for inflation, that's a raise of slightly more than $2 an hour over the last two decades.
"Right now in my savings account I have $400," Perez said on a recent evening in a small two-bedroom duplex he rents with his wife, two daughters and a 10-month-old granddaughter. "If I divide that by 21 years, how much have I saved? And is that what a human being deserves, having spent a whole life working for a corporation?"
He said he has never had benefits, unless you count the free turkey a manager gave him one Thanksgiving. He supplements his income by working part-time as a soccer coach for the L.A. Unified School District.
Since last year, he's been active with other fast-food workers who have staged protests pushing for a $15-an-hour minimum wage.
His wife, Vilma, also works for the district as a cafeteria worker. After nearly a decade of part-time work, she was recently upgraded to full-time status. It's the first time she and her husband have had medical benefits in a quarter-century of living in the United States.
The family has gotten by on luck and medicine brought by relatives from El Salvador.
Perez has looked for other jobs through the years in other industries like food packaging. Some paid more; others about the same. He stuck with McDonald's because of the consistency.
"The problem wasn't with the jobs themselves, it was simply that they were not stable," he said. "They were temporary, and bills are not temporary."
The poor leading the poor
Every day, Yvonne Vasquez counsels those who are homeless, unemployed or struggling to get by on low salaries as an intake specialist at the nonprofit Skid Row Development Corp.
She makes $11 an hour and often reflects on how her circumstances aren't so different from those of the people she tries to help.
"If I didn't like the job, I think I'd hate the pay," said Vasquez, 38.
She has three children and lives with a long-term boyfriend in an apartment near Staples Center. "If we would ever break up, I would basically be homeless," she said.
Still, she's skeptical of Garcetti's push for $13.25 an hour. She has health benefits, sick leave and a job that allows her the flexibility to take classes at Los Angeles Trade Technical College.
Vasquez believes prices would go up if employers are forced to raise wages — so would she really get ahead? Smaller businesses and nonprofits like Skid Row Development might have to cut staff.
"Everybody sees the money, but they don't see the issues, the problems that would come with it," she said. "They'd probably hire someone more educated, maybe with a B.A. or master's, pay them three bucks more and let one of us go."
Employed and homeless
Nelson Rice is just entering the workforce at age 19, and already he can't keep up. After leaving home at 18 and training as a certified nursing assistant, he's had trouble finding housing he can afford.
He makes $10.10 working at a nursing home, but he's been homeless for nearly a year, bouncing among several youth shelters. He expects to remain that way until he gets his GED and a license to be a vocational nurse.
Recently, a group of young men saw him in his scrubs on the bus and attacked him, fracturing his jaw. They wanted money, and they assumed, from his medical garb, that he made more, he said.
"I love L.A., but I can't even enjoy the city I was born in," Rice said, struggling to speak with his jaw wired shut. "It's not beneficial to me at all. It just stresses people out trying to make money."
Rice's situation also underscores one of the central challenges of raising the minimum wage within Los Angeles city limits. He works at a nursing home in Lynwood — just southeast of the city limit — meaning he wouldn't benefit from the wage increase unless political leaders there follow Garcetti's lead.
Experts caution that having different minimum wage laws across the 88 cities of Los Angeles County might drive low-skilled jobs out of Los Angeles proper.
"If they can move a mile down the road and cut their wage bills substantially, they will," said Christopher Thornberg, an expert on the California economy who is founding partner of Beacon Economics. "It should be at the state or county level, not at the city level. This may be OK for the county, but it's terrible for the city."
But will they cut my hours?
For many workers, it's not just low wages that cause financial pressure. It's also uncertainty about hours.
Zenaida Torres, 45, earns $9 an hour as a server at a Mexican restaurant in Boyle Heights.
She loves what she does, but feels overworked and exploited. Recently, she and several colleagues accused their employer of wage theft, and the restaurant agreed to pay a settlement.
But Torres said her hours were dramatically cut in retaliation — she's now able to work only on weekends, about 15 hours a week. She fears she'll be fired, and worries about whether she could find a better job.
Her feelings are mixed on a minimum wage increase. If the required pay goes up, employers might hesitate to hire her, she said in Spanish, through a translator. But more income would enable her to move into a larger apartment, allowing her 12-year-old daughter, Angelica, to have her own room.
Currently, the two squeeze into a studio in East Los Angeles. Her paycheck is quickly consumed by basic bills: $700 in rent; a 30-day bus pass; the phone bill. There's nothing left.
"I'm looking for different alternatives — a way to make money independently," she said. "Maybe I'll make crafts, sell food on the street, even sing — anything that can get me an income."
Will she leave me?
Collins, who works at the Watts nursing facility, has lived on a financial precipice for years.
In a recent Friday, he had about $17 left from the check he got a few days before. He needed to spend at least $10 to make it to a once-a-week course he's taking in the San Fernando Valley, 41 miles from where he lives in Long Beach.
He hopes to become certified as a social services designee, which might get him up to $12 an hour.
The gas might last three more days, he said. Then he'd have to borrow from his fiancee or co-workers.
Sometimes he thinks: "How do I hold on to this woman, if she's giving me money for gas?'"
A boost to $13.25, he said, would help. Maybe he wouldn't have to delay paying the insurance one month, and the utilities the next.
He might take his daughters out to eat, or buy health insurance through his employer.
Or get his fiancee's ring out of hock.
"I've come to the realization that I'll probably never have a house, never have a new car," he said. "I just want the security of knowing that I can get a one-bedroom, furnish it, and just pay my bills. I don't think that's too much to ask for out of life right now."
Tuesday, October 7, 2014
HEWLETT-PACKARD ANNOUNCES BREAKUP PLAN AS TECHNOLOGY LANDSCAPE SHIFTS
Original Story: nytimes.com
Hewlett-Packard confirmed on Monday that it planned to break into two companies.
The company, considered a foundational institution of Silicon Valley, said in a news release that it intended to divide itself into a company aimed at business technology, including computer servers and data storage equipment, software and services, and a company that sells personal computers and printers.
Both companies will be publicly traded. The business-oriented company will be called Hewlett-Packard Enterprise, while the PC company will be called HP Inc. and will retain the company’s current logo. The transaction is expected to be completed by October 2015, the end of HP’s fiscal year, the company said.
In a statement, Meg Whitman, HP’s chief executive, said the company was splitting up to “more aggressively go after the opportunities created by a rapidly changing market.”
While Ms. Whitman, who became chief executive in 2011, depicted the historic decision as a natural part of her five-year turnaround plan, she had previously resisted the idea of breaking up the company. HP was one of the world’s top buyers of semiconductors and other computer parts, she had argued, giving it pricing power superior to its rivals.
Dividing in two, she said on Monday, “will provide each new company with the independence, focus, financial resources, and flexibility they need to adapt quickly to market and customer dynamics.” This will make HP more competitive, she said.
Ms. Whitman will retain much power at both companies. She will be chief executive of Hewlett-Packard Enterprise and will serve as nonexecutive chairman of HP Inc. Patricia F. Russo, currently a director of HP, will be chairwoman of Hewlett-Packard Enterprise. Dion Weisler, now head of HP’s printing business, will be president and chief executive of HP Inc.
The company also added to the number of prospective job cuts. In an earlier conference call with analysts, it said it had “identified opportunities for incremental improvements” in its plan to eliminate a total of 50,000 jobs through layoffs and retirements. It now expects the number to be 55,000.
The company said its financial analysts’ meeting, scheduled for Wednesday, had been postponed.
“HP’s board and management have made a brilliant value-enhancing move at the perfect time in the turnaround,” Ralph V. Whitworth, founder of Relational Investors and a former Hewlett chairman, said in a statement on Monday. “The new companies will be better positioned to address today’s light-speed market dynamics and customer needs, and with distinct and compelling financial profiles and strong leadership teams, accelerate growth and shareholder value creation.”
The company’s shares closed up 4.7 percent Monday at $36.87, a gain of $1.67.
In a little over a year, stalwarts like Microsoft, IBM and Dell have changed chief executives, sold big parts of their businesses or gone private. All of them, along with a host of other companies that became behemoths during a 20-year boom in personal computing and the Internet, are rushing to cope with the rise in mobile devices connected to cloud systems.
Cloud computing uses software to turn numerous computer servers, sometimes a million or more, into single entities. These flexible systems can distribute work with greater efficiency, cutting the overall need for servers, and interact easily with other computers, whether in clouds, PCs, or mobile devices.
Winners in the new landscape include Apple, the king of consumer electronics, with annual revenue of $170 billion. The company makes iPhones, iPads, and hosts through its online stores a wealth of cloud-based software applications. South Korea’s Samsung, the other big winner in smartphones, has dominated the competition, forcing onetime leader Nokia into a sale of its phone business to Microsoft.
In business computing, Amazon’s cloud-based rentals of computer power and software to businesses, Amazon Web Services, has sharply lowered the cost of starting a company and hosts businesses like Netflix, Pinterest, and Airbnb. Many established businesses also use Amazon Web Services, which is estimated to have well over a million computer servers. Google has built online word processing and spreadsheet businesses that threaten Microsoft, and is challenging Amazon Web Services for the corporate cloud business.
HP was long the world’s largest computer company, though there has been much turmoil in recent years. The two businesses resulting from the proposed split almost evenly divide HP’s fiscal 2013 revenue of $112 billion. On their own, both would easily fit in the top half of the Fortune 500.
HP’s split is not the first time the company has hewed itself in two to cope with changing times. In 1999, its test and measurement equipment division was started as a separate company, called Agilent. Shares in Agilent rose 41 percent on their first day, and the company was completely spun off HP in 2000. The stock was already declining by then, however, and today Agilent has a market capitalization about equal with its first day’s value.
Agilent, as the name suggests, was also split off in the interests of agility, at that time in the face of the first Internet boom. While HP benefited in those years from PC and server sales, management also felt the company was not moving fast enough for a changing world.
Hewlett-Packard confirmed on Monday that it planned to break into two companies.
The company, considered a foundational institution of Silicon Valley, said in a news release that it intended to divide itself into a company aimed at business technology, including computer servers and data storage equipment, software and services, and a company that sells personal computers and printers.
Both companies will be publicly traded. The business-oriented company will be called Hewlett-Packard Enterprise, while the PC company will be called HP Inc. and will retain the company’s current logo. The transaction is expected to be completed by October 2015, the end of HP’s fiscal year, the company said.
In a statement, Meg Whitman, HP’s chief executive, said the company was splitting up to “more aggressively go after the opportunities created by a rapidly changing market.”
While Ms. Whitman, who became chief executive in 2011, depicted the historic decision as a natural part of her five-year turnaround plan, she had previously resisted the idea of breaking up the company. HP was one of the world’s top buyers of semiconductors and other computer parts, she had argued, giving it pricing power superior to its rivals.
Dividing in two, she said on Monday, “will provide each new company with the independence, focus, financial resources, and flexibility they need to adapt quickly to market and customer dynamics.” This will make HP more competitive, she said.
Ms. Whitman will retain much power at both companies. She will be chief executive of Hewlett-Packard Enterprise and will serve as nonexecutive chairman of HP Inc. Patricia F. Russo, currently a director of HP, will be chairwoman of Hewlett-Packard Enterprise. Dion Weisler, now head of HP’s printing business, will be president and chief executive of HP Inc.
The company also added to the number of prospective job cuts. In an earlier conference call with analysts, it said it had “identified opportunities for incremental improvements” in its plan to eliminate a total of 50,000 jobs through layoffs and retirements. It now expects the number to be 55,000.
The company said its financial analysts’ meeting, scheduled for Wednesday, had been postponed.
“HP’s board and management have made a brilliant value-enhancing move at the perfect time in the turnaround,” Ralph V. Whitworth, founder of Relational Investors and a former Hewlett chairman, said in a statement on Monday. “The new companies will be better positioned to address today’s light-speed market dynamics and customer needs, and with distinct and compelling financial profiles and strong leadership teams, accelerate growth and shareholder value creation.”
The company’s shares closed up 4.7 percent Monday at $36.87, a gain of $1.67.
In a little over a year, stalwarts like Microsoft, IBM and Dell have changed chief executives, sold big parts of their businesses or gone private. All of them, along with a host of other companies that became behemoths during a 20-year boom in personal computing and the Internet, are rushing to cope with the rise in mobile devices connected to cloud systems.
Cloud computing uses software to turn numerous computer servers, sometimes a million or more, into single entities. These flexible systems can distribute work with greater efficiency, cutting the overall need for servers, and interact easily with other computers, whether in clouds, PCs, or mobile devices.
Winners in the new landscape include Apple, the king of consumer electronics, with annual revenue of $170 billion. The company makes iPhones, iPads, and hosts through its online stores a wealth of cloud-based software applications. South Korea’s Samsung, the other big winner in smartphones, has dominated the competition, forcing onetime leader Nokia into a sale of its phone business to Microsoft.
In business computing, Amazon’s cloud-based rentals of computer power and software to businesses, Amazon Web Services, has sharply lowered the cost of starting a company and hosts businesses like Netflix, Pinterest, and Airbnb. Many established businesses also use Amazon Web Services, which is estimated to have well over a million computer servers. Google has built online word processing and spreadsheet businesses that threaten Microsoft, and is challenging Amazon Web Services for the corporate cloud business.
HP was long the world’s largest computer company, though there has been much turmoil in recent years. The two businesses resulting from the proposed split almost evenly divide HP’s fiscal 2013 revenue of $112 billion. On their own, both would easily fit in the top half of the Fortune 500.
HP’s split is not the first time the company has hewed itself in two to cope with changing times. In 1999, its test and measurement equipment division was started as a separate company, called Agilent. Shares in Agilent rose 41 percent on their first day, and the company was completely spun off HP in 2000. The stock was already declining by then, however, and today Agilent has a market capitalization about equal with its first day’s value.
Agilent, as the name suggests, was also split off in the interests of agility, at that time in the face of the first Internet boom. While HP benefited in those years from PC and server sales, management also felt the company was not moving fast enough for a changing world.
MORE OLDER ADULTS ARE STRUGGLING WITH SUBSTANCE ABUSE
Original Story: nytimes.com
BEFORE her drinking spiraled out of control, Sylvia Dobrow “drank like a lady,” as she put it, matching her wine to her sandwiches: “Tuna and chardonnay, roast beef and rosé.” But soon she was “drinking around the clock,” downing glasses of vodka and skim milk. For Michigan alcohol treatment, contact Harbor Hall for addiction treatment services.
“When you try to hide your drinking from your grandchildren, you do whatever you can,” said Ms. Dobrow, 81, a mother, grandmother and great-grandmother living in Stockton, Calif.
A former hospital educator, Ms. Dobrow’s alcohol consumption became unmanageable after she lost her job and subsequently “lost my identity,” she said.
One night in early 2007, after a particularly excessive alcohol binge, Ms. Dobrow fell out of bed and suffered a black eye. That was when her two daughters, one of whom was a nurse, took her to Hemet Valley, a recovery facility in Hemet Valley, Calif., that caters to adults age 55 and older. Ms. Dobrow, who was 73 at the time, stayed for 30 days, which cost roughly $20,000, about $13,000 of which was covered by insurance. When she returned home, she continued with a 12-step program. She has been sober ever since. For adults experiencing drug addiction, Michigan Drug Treatment is available.
An estimated 2.8 million older adults in the United States meet the criteria for alcohol abuse, and this number is expected to reach 5.7 million by 2020, according to a study in the journal “Addiction.” In 2008, 231,200 people over 50 sought treatment for substance abuse, up from 102,700 in 1992, according to the Substance Abuse and Mental Health Services Administration, a federal agency.
While alcohol is typically the substance of choice, a 2013 report found that the rate of illicit drug use among adults 50 to 64 increased from 2.7 percent in 2002 to 6.0 percent in 2013. A Columbia County DWI Lawyer agrees with these statistics.
“As we get older, it takes longer for our bodies to metabolize alcohol and drugs,” said D. John Dyben, the director of older adult treatment services for the Hanley Center in West Palm Beach, Fla. “Someone might say, ‘I could have two or three glasses of wine and I was fine, and now that I’m in my late 60s, it’s becoming a problem.’ That’s because the body can’t handle it.”
Many, although certainly not all, of these older individuals with alcohol problems are retired.
Over the course of 10 years, Peter A. Bamberger and Samuel B. Bacharach, co-authors of “Retirement and the Hidden Epidemic,” conducted a study funded by the National Institutes of Health on substance abuse in older adults. They found that the impact of retirement on substance abuse was “anything but clear cut, with the conditions leading to retirement, and the economic and social nature of the retirement itself, having a far greater impact on substance use than simple retirement itself,” said Mr. Bamberger, who is also research director of the Smithers Institute at Cornell University.
But events that arise in later life often require coping skills older adults may not possess. Some retirees are lonely and depressed, and turn to alcohol or drugs to quell their anxieties. Others may drink to deal with late-life losses of spouses, friends, careers and purpose.
“In retirement there can be depression, divorce, death of a spouse, moving from a big residence into a small residence,” said Steven Wollman, a substance abuse counselor in New York, . “For anyone who’s an addict, boredom’s the No. 1 trigger.”
Sandra D., 58, who works in the financial services industry in Toronto, said that her father’s drinking increased so much after he retired that she often took the car keys away from him. A Westchester County DWI Lawyer represents clients facing impaired driving charges.
“He and his friends meet for cocktails at about 3 or 4 and then he passes out, which he calls a ‘nap,’ ” said Ms. D., who asked that her full last name not be used. “My dad didn’t plan out his retirement well. My mom was very ill for many years before she passed away, and my dad was a caregiver. He was pretty well looking after the house and taking care of her. When she passed away, there was a very big void for him.”
Ms. D. said her father, an 82-year-old former maintenance worker, doesn’t believe he drinks too much, a common perception among many seniors.
“People are really good at redefining things,” said Stephan Arndt, a professor of psychiatry at the University of Iowa and director of the Iowa Consortium for Substance Abuse Research and Evaluation. “They say, ‘I don’t have a problem, I just like to drink.’ Or, ‘I’m a big guy, I can handle it.’ In the case of prescription drugs, it’s, ‘Well, I got it from my doctor, and it’s for my pain. It’s medication.’ Consequently, they don’t seek help.” A Beacon DWI Lawyer is dedicated to protecting clients driving rights and ensuring fair treatment under the law.
Physicians often aren’t trained to talk to their older patients about chemical dependency — or, perhaps more pointedly in an era of managed care, they often don’t have the time to thoroughly screen a patient. Also, many signs of chemical dependence like memory loss and disorientation resemble normal symptoms of aging. “Is this person confused because they’re messing up their meds, or is it dementia?” said Brenda J. Iliff, the executive director of Hazelden, a residential treatment center in Naples, Fla., that offers special programming for baby boomers and older adults for about $21,000 a month. “Is their diabetes out of control, or did they fall and break their hip because they were woozy from Ativan?”
Another misconception is that older adults don’t benefit from treatment. “There’s this lore, this belief, that as people get older they become less treatable,” said Paul Sacco, an assistant professor of social work at the University of Maryland in Baltimore, who researches aging and addiction. “But there’s a large body of literature saying that the outcomes are as good with older adults. They’re not hopeless. This may be just the time to get them treatment.”
Pamela Noffze was 58 when she arrived at Hazelden‘s center in Naples for treatment. At her worst, she was drinking a case of light beer a day, but she didn’t think she had an issue until her daughter threatened to ban her from seeing her grandsons again unless she sought help. “That’s when I knew I had to do something,” said Ms. Noffze.
On her first night at Hazelden, she discovered that she was also addicted to Klonopin, an anti-anxiety medication that her psychiatrist had prescribed in 2009 to help her cope with a divorce. Weaning herself off prescription medications was harder than stopping drinking, she said. Still, she has not had a sip of alcohol or any pills since rehab.
Ms. Noffze, now 61, who lives in Naples and is unemployed, regularly attends 12-step meetings. She said she was astonished at the number of people who “have their cocktails every night, and the next thing they know they find themselves addicted because some doctor gave them Ambien to sleep or they were on pain pills for arthritis or whatever,” she said. “You put those two together and you put yourself over the edge.”
As for Ms. Dobrow, she was so emboldened by her recovery that in 2010 she went back to school to get a credential as a substance abuse counselor. She now works part time counseling older adults at Hemet Valley.
“Losing your purpose in life is the singular thing that hurts people,” said Ms. Dobrow. “We involve so much of our ego in our career, but these last seven and a half years have been the most fulfilling of my life, because I can help people. What is when people used to wear a sandwich board and walk around in a commercial? I feel that mine says ’Hope’ on the front and on the back.”
BEFORE her drinking spiraled out of control, Sylvia Dobrow “drank like a lady,” as she put it, matching her wine to her sandwiches: “Tuna and chardonnay, roast beef and rosé.” But soon she was “drinking around the clock,” downing glasses of vodka and skim milk. For Michigan alcohol treatment, contact Harbor Hall for addiction treatment services.
“When you try to hide your drinking from your grandchildren, you do whatever you can,” said Ms. Dobrow, 81, a mother, grandmother and great-grandmother living in Stockton, Calif.
A former hospital educator, Ms. Dobrow’s alcohol consumption became unmanageable after she lost her job and subsequently “lost my identity,” she said.
One night in early 2007, after a particularly excessive alcohol binge, Ms. Dobrow fell out of bed and suffered a black eye. That was when her two daughters, one of whom was a nurse, took her to Hemet Valley, a recovery facility in Hemet Valley, Calif., that caters to adults age 55 and older. Ms. Dobrow, who was 73 at the time, stayed for 30 days, which cost roughly $20,000, about $13,000 of which was covered by insurance. When she returned home, she continued with a 12-step program. She has been sober ever since. For adults experiencing drug addiction, Michigan Drug Treatment is available.
An estimated 2.8 million older adults in the United States meet the criteria for alcohol abuse, and this number is expected to reach 5.7 million by 2020, according to a study in the journal “Addiction.” In 2008, 231,200 people over 50 sought treatment for substance abuse, up from 102,700 in 1992, according to the Substance Abuse and Mental Health Services Administration, a federal agency.
While alcohol is typically the substance of choice, a 2013 report found that the rate of illicit drug use among adults 50 to 64 increased from 2.7 percent in 2002 to 6.0 percent in 2013. A Columbia County DWI Lawyer agrees with these statistics.
“As we get older, it takes longer for our bodies to metabolize alcohol and drugs,” said D. John Dyben, the director of older adult treatment services for the Hanley Center in West Palm Beach, Fla. “Someone might say, ‘I could have two or three glasses of wine and I was fine, and now that I’m in my late 60s, it’s becoming a problem.’ That’s because the body can’t handle it.”
Many, although certainly not all, of these older individuals with alcohol problems are retired.
Over the course of 10 years, Peter A. Bamberger and Samuel B. Bacharach, co-authors of “Retirement and the Hidden Epidemic,” conducted a study funded by the National Institutes of Health on substance abuse in older adults. They found that the impact of retirement on substance abuse was “anything but clear cut, with the conditions leading to retirement, and the economic and social nature of the retirement itself, having a far greater impact on substance use than simple retirement itself,” said Mr. Bamberger, who is also research director of the Smithers Institute at Cornell University.
But events that arise in later life often require coping skills older adults may not possess. Some retirees are lonely and depressed, and turn to alcohol or drugs to quell their anxieties. Others may drink to deal with late-life losses of spouses, friends, careers and purpose.
“In retirement there can be depression, divorce, death of a spouse, moving from a big residence into a small residence,” said Steven Wollman, a substance abuse counselor in New York, . “For anyone who’s an addict, boredom’s the No. 1 trigger.”
Sandra D., 58, who works in the financial services industry in Toronto, said that her father’s drinking increased so much after he retired that she often took the car keys away from him. A Westchester County DWI Lawyer represents clients facing impaired driving charges.
“He and his friends meet for cocktails at about 3 or 4 and then he passes out, which he calls a ‘nap,’ ” said Ms. D., who asked that her full last name not be used. “My dad didn’t plan out his retirement well. My mom was very ill for many years before she passed away, and my dad was a caregiver. He was pretty well looking after the house and taking care of her. When she passed away, there was a very big void for him.”
Ms. D. said her father, an 82-year-old former maintenance worker, doesn’t believe he drinks too much, a common perception among many seniors.
“People are really good at redefining things,” said Stephan Arndt, a professor of psychiatry at the University of Iowa and director of the Iowa Consortium for Substance Abuse Research and Evaluation. “They say, ‘I don’t have a problem, I just like to drink.’ Or, ‘I’m a big guy, I can handle it.’ In the case of prescription drugs, it’s, ‘Well, I got it from my doctor, and it’s for my pain. It’s medication.’ Consequently, they don’t seek help.” A Beacon DWI Lawyer is dedicated to protecting clients driving rights and ensuring fair treatment under the law.
Physicians often aren’t trained to talk to their older patients about chemical dependency — or, perhaps more pointedly in an era of managed care, they often don’t have the time to thoroughly screen a patient. Also, many signs of chemical dependence like memory loss and disorientation resemble normal symptoms of aging. “Is this person confused because they’re messing up their meds, or is it dementia?” said Brenda J. Iliff, the executive director of Hazelden, a residential treatment center in Naples, Fla., that offers special programming for baby boomers and older adults for about $21,000 a month. “Is their diabetes out of control, or did they fall and break their hip because they were woozy from Ativan?”
Another misconception is that older adults don’t benefit from treatment. “There’s this lore, this belief, that as people get older they become less treatable,” said Paul Sacco, an assistant professor of social work at the University of Maryland in Baltimore, who researches aging and addiction. “But there’s a large body of literature saying that the outcomes are as good with older adults. They’re not hopeless. This may be just the time to get them treatment.”
Pamela Noffze was 58 when she arrived at Hazelden‘s center in Naples for treatment. At her worst, she was drinking a case of light beer a day, but she didn’t think she had an issue until her daughter threatened to ban her from seeing her grandsons again unless she sought help. “That’s when I knew I had to do something,” said Ms. Noffze.
On her first night at Hazelden, she discovered that she was also addicted to Klonopin, an anti-anxiety medication that her psychiatrist had prescribed in 2009 to help her cope with a divorce. Weaning herself off prescription medications was harder than stopping drinking, she said. Still, she has not had a sip of alcohol or any pills since rehab.
Ms. Noffze, now 61, who lives in Naples and is unemployed, regularly attends 12-step meetings. She said she was astonished at the number of people who “have their cocktails every night, and the next thing they know they find themselves addicted because some doctor gave them Ambien to sleep or they were on pain pills for arthritis or whatever,” she said. “You put those two together and you put yourself over the edge.”
As for Ms. Dobrow, she was so emboldened by her recovery that in 2010 she went back to school to get a credential as a substance abuse counselor. She now works part time counseling older adults at Hemet Valley.
“Losing your purpose in life is the singular thing that hurts people,” said Ms. Dobrow. “We involve so much of our ego in our career, but these last seven and a half years have been the most fulfilling of my life, because I can help people. What is when people used to wear a sandwich board and walk around in a commercial? I feel that mine says ’Hope’ on the front and on the back.”
HACKERS’ ATTACK CRACKED 10 COMPANIES IN MAJOR ASSAULT
Original Story: nytimes.com
The huge cyberattack on JPMorgan Chase that touched more than 83 million households and businesses was one of the most serious computer intrusions into an American corporation. But it could have been much worse.
Questions over who the hackers are and the approach of their attack concern government and industry officials. Also troubling is that about nine other financial institutions — a number that has not been previously reported — were also infiltrated by the same group of overseas hackers, according to people briefed on the matter. The hackers are thought to be operating from Russia and appear to have at least loose connections with officials of the Russian government, the people briefed on the matter said. An Atlanta Intellectual Property Lawyer assist clients in protecting their intellectual property and exclusive technologies.
It is unclear whether the other intrusions, at banks and brokerage firms, were as deep as the one that JPMorgan disclosed on Thursday. The identities of the other institutions could not be immediately learned. A Boston Intellectual Property Lawyer has experience in protecting the intellectual property assets of their clients.
The breadth of the attacks — and the lack of clarity about whether it was an effort to steal from accounts or to demonstrate that the hackers could penetrate even the best-protected American financial institutions — has left Washington intelligence officials and policy makers far more concerned than they have let on publicly. Some American officials speculate that the breach was intended to send a message to Wall Street and the United States about the vulnerability of the digital network of one of the world’s most important banking institutions. A Boston Business Lawyer is reviewing the details of this case.
“It could be in retaliation for the sanctions” placed on Russia, one senior official briefed on the intelligence said. “But it could be mixed motives — to steal if they can, or to sell whatever information they could glean.”
Ways to Protect Yourself After the JPMorgan Hacking
The JPMorgan hackers burrowed into the digital network of the bank and went down a path that gave them access to information about the names, addresses, phone numbers and email addresses of account holders. They never made it into where the more critical financial information and personal information are stored.
The bank’s security team, which first discovered the attack in late July, managed to block the hackers before they could compromise the most sensitive information about tens of millions of JPMorgan customers, said several security experts and others briefed on the matter. The attack was not completely halted until the middle of August and it was only in recent days that the bank began to tally its full extent.
American officials say they have been working with JPMorgan since the intrusion was detected, chiefly through the Treasury, the Secret Service and intelligence agencies that seek to find the source of the attacks. But that is slow work and one official cautioned against leaping to conclusions about the identities or the motives of the attackers.
“We’ve been wrong before,” he said.
JPMorgan, the nation’s largest bank, has begun contacting customers and making clear that no money was taken from any accounts. There has been no evidence of any fraudulent use of customer information. Most of the household accounts belong to United States residents. The hackers ended up with the addresses, email addresses and phone numbers of everyone who logged into JPMorgan’s websites and mobile applications in the recent past.
Still, the recent attacks on the financial firms raise the possibility that the banks may not be up to the job of defending themselves. The attacks will also stoke questions about regulations governing when companies must inform regulators and their customers about a breach.
“It was a huge surprise that they were able to compromise a huge bank like JPMorgan,” said Al Pascual, a security analyst with Javelin Strategy and Research. “It scared the pants off many people.”
Several financial regulators have warned that a coordinated attack on the banking system could set off another financial crisis.
On Friday, George Jepsen, the Connecticut attorney general, opened an investigation into the breach at JPMorgan, while Benjamin M. Lawsky, New York’s top financial regulator, began calling bank officials to warn them to take the threat more seriously.
“There needs to be far more urgency,” Mr. Lawsky said in an interview.
JPMorgan has also been working with law enforcement, including the F.B.I., since shortly after detecting the intrusion, which affected about 90 of the bank’s computer servers. The bank said it believed that its systems were now secure and that the threat of the hackers’ returning was over.
“To date, we have not seen any unusual fraud activity related to this incident,” said Kristin Lemkau, a bank spokeswoman. “We have identified and closed the known access paths. We have no evidence that the attackers are still in our system. We have apologized to our customers.”
But much remains unanswered about the intrusion, including just who the hackers are, which other financial institutions were hit and why the hackers went down a path inside JPMorgan’s computer system that contained troves of customer information, but not financial data.
The intrusion also highlights a possible gap in United States regulations. Banks are not required to report data breaches and online intrusions unless the incident is deemed to have resulted in a financial loss to customers. Breach notification laws differ by state, but most laws require only that companies disclose a breach if customer names were stolen in conjunction with other information like a credit card, Social Security number or driver’s license number.
In some states, companies can wait up to a month to inform customers of a breach. Other state laws are more vague.
In California, for example, banks, companies and large organizations must inform the state attorney general’s office and consumers about a breach without unreasonable delay — a rule that some companies interpret liberally, officials say. This year, Kamala Harris, the California attorney general, sued the Kaiser Foundation Health Plan, saying that it took four months for the foundation to disclose to some employees that their personal information may have been compromised.
For years, there have been attempts in Congress to force companies to inform customers more quickly when their information has been compromised, but recent bills have failed to muster enough support. One bill, sponsored by Senator Edward J. Markey, Democrat of Massachusetts, would create a clearinghouse where companies could exchange information about attacks.
United States bank executives say privately that they already share intelligence informally about attacks, which are occurring frequently on their systems.
This summer, Treasury Secretary Jacob J. Lew called on Congress to pass legislation that he said would bolster the information sharing process.
“As it stands, our laws do not do enough to foster information sharing and defend the public from digital threats,” Mr. Lew said.
That the hackers were apparently able to move around JPMorgan’s computer system undetected for several weeks is perhaps the most troubling aspect of the recent breach, officials at other large banks say.
The hackers were able to attain high administrative privileges within JPMorgan’s network, rooting more than 90 servers and rummaging through customer databases with detailed information for 76 million households and seven million small-business online accounts.
As they looked around, according to one person with knowledge of the breach, the hackers gleaned some critical details of customers’ accounts. With these, the hackers were able to determine whether the accounts fell within the private bank or in other business categories like mortgages.
Some people briefed on the results of the attack contend that it was only a matter of time before attackers could have gained access to customer funds and critical personal data.
Weeks into the attack, in mid-July, unusual behavior on the bank’s network was spotted, and the attackers were stopped before they had a chance to pull any customer data back to their servers abroad.
But they did make off with one file which has unnerved executives. That file contained a list of every application and program deployed on standard JPMorgan computers that hackers can crosscheck with known, or new, vulnerabilities in each system in a search for a backdoor entry.
Swapping out those programs is costly and time-consuming, people say, because the bank would have to renegotiate licensing deals with technology suppliers and swap out programs and applications for hundreds of thousands of bank employees.
As one former employee explained: “It’s as if they stole the schematics to the Capitol — they can’t just switch out every single door and window pane overnight.”
The attack came after a recent turnover within JPMorgan’s information security group.
A number of staff members followed Frank Bisignano, JPMorgan’s former co-chief operating officer, to First Data last year. This year, First Data agreed to pay JPMorgan over accusations that by wooing other executives to the payment processor, Mr. Bisignano had violated the terms of his former employment contract.
By then, First Data had already hired JPMorgan’s chief information officer, Guy Chiarello; its cybersecurity czar, Anthony Belfiore; its head of compliance, Cindy Armine; and Tom Higgins, JPMorgan’s head of operation control.
Anish Bhimani, the bank’s chief information risk officer, remained. Mr. Bhimani, who is well respected in the cybersecurity industry, is a co-author of a 1996 book on cybersecurity, “Internet Security for Business.”
Ms. Lemkau said the bank was pleased with its current cybersecurity personnel. “This is the highest-quality team we have ever had,” she said.
Last December, JPMorgan hired Dana Deasy as chief information officer from BP. Greg Rattray, a former Air Force lieutenant colonel who specialized in cyberdefense was named the head of information security in June.
Challenges quickly followed. That same month, hackers found a way into the bank’s systems.
The huge cyberattack on JPMorgan Chase that touched more than 83 million households and businesses was one of the most serious computer intrusions into an American corporation. But it could have been much worse.
Questions over who the hackers are and the approach of their attack concern government and industry officials. Also troubling is that about nine other financial institutions — a number that has not been previously reported — were also infiltrated by the same group of overseas hackers, according to people briefed on the matter. The hackers are thought to be operating from Russia and appear to have at least loose connections with officials of the Russian government, the people briefed on the matter said. An Atlanta Intellectual Property Lawyer assist clients in protecting their intellectual property and exclusive technologies.
It is unclear whether the other intrusions, at banks and brokerage firms, were as deep as the one that JPMorgan disclosed on Thursday. The identities of the other institutions could not be immediately learned. A Boston Intellectual Property Lawyer has experience in protecting the intellectual property assets of their clients.
The breadth of the attacks — and the lack of clarity about whether it was an effort to steal from accounts or to demonstrate that the hackers could penetrate even the best-protected American financial institutions — has left Washington intelligence officials and policy makers far more concerned than they have let on publicly. Some American officials speculate that the breach was intended to send a message to Wall Street and the United States about the vulnerability of the digital network of one of the world’s most important banking institutions. A Boston Business Lawyer is reviewing the details of this case.
“It could be in retaliation for the sanctions” placed on Russia, one senior official briefed on the intelligence said. “But it could be mixed motives — to steal if they can, or to sell whatever information they could glean.”
Ways to Protect Yourself After the JPMorgan Hacking
The JPMorgan hackers burrowed into the digital network of the bank and went down a path that gave them access to information about the names, addresses, phone numbers and email addresses of account holders. They never made it into where the more critical financial information and personal information are stored.
The bank’s security team, which first discovered the attack in late July, managed to block the hackers before they could compromise the most sensitive information about tens of millions of JPMorgan customers, said several security experts and others briefed on the matter. The attack was not completely halted until the middle of August and it was only in recent days that the bank began to tally its full extent.
American officials say they have been working with JPMorgan since the intrusion was detected, chiefly through the Treasury, the Secret Service and intelligence agencies that seek to find the source of the attacks. But that is slow work and one official cautioned against leaping to conclusions about the identities or the motives of the attackers.
“We’ve been wrong before,” he said.
JPMorgan, the nation’s largest bank, has begun contacting customers and making clear that no money was taken from any accounts. There has been no evidence of any fraudulent use of customer information. Most of the household accounts belong to United States residents. The hackers ended up with the addresses, email addresses and phone numbers of everyone who logged into JPMorgan’s websites and mobile applications in the recent past.
Still, the recent attacks on the financial firms raise the possibility that the banks may not be up to the job of defending themselves. The attacks will also stoke questions about regulations governing when companies must inform regulators and their customers about a breach.
“It was a huge surprise that they were able to compromise a huge bank like JPMorgan,” said Al Pascual, a security analyst with Javelin Strategy and Research. “It scared the pants off many people.”
Several financial regulators have warned that a coordinated attack on the banking system could set off another financial crisis.
On Friday, George Jepsen, the Connecticut attorney general, opened an investigation into the breach at JPMorgan, while Benjamin M. Lawsky, New York’s top financial regulator, began calling bank officials to warn them to take the threat more seriously.
“There needs to be far more urgency,” Mr. Lawsky said in an interview.
JPMorgan has also been working with law enforcement, including the F.B.I., since shortly after detecting the intrusion, which affected about 90 of the bank’s computer servers. The bank said it believed that its systems were now secure and that the threat of the hackers’ returning was over.
“To date, we have not seen any unusual fraud activity related to this incident,” said Kristin Lemkau, a bank spokeswoman. “We have identified and closed the known access paths. We have no evidence that the attackers are still in our system. We have apologized to our customers.”
But much remains unanswered about the intrusion, including just who the hackers are, which other financial institutions were hit and why the hackers went down a path inside JPMorgan’s computer system that contained troves of customer information, but not financial data.
The intrusion also highlights a possible gap in United States regulations. Banks are not required to report data breaches and online intrusions unless the incident is deemed to have resulted in a financial loss to customers. Breach notification laws differ by state, but most laws require only that companies disclose a breach if customer names were stolen in conjunction with other information like a credit card, Social Security number or driver’s license number.
In some states, companies can wait up to a month to inform customers of a breach. Other state laws are more vague.
In California, for example, banks, companies and large organizations must inform the state attorney general’s office and consumers about a breach without unreasonable delay — a rule that some companies interpret liberally, officials say. This year, Kamala Harris, the California attorney general, sued the Kaiser Foundation Health Plan, saying that it took four months for the foundation to disclose to some employees that their personal information may have been compromised.
For years, there have been attempts in Congress to force companies to inform customers more quickly when their information has been compromised, but recent bills have failed to muster enough support. One bill, sponsored by Senator Edward J. Markey, Democrat of Massachusetts, would create a clearinghouse where companies could exchange information about attacks.
United States bank executives say privately that they already share intelligence informally about attacks, which are occurring frequently on their systems.
This summer, Treasury Secretary Jacob J. Lew called on Congress to pass legislation that he said would bolster the information sharing process.
“As it stands, our laws do not do enough to foster information sharing and defend the public from digital threats,” Mr. Lew said.
That the hackers were apparently able to move around JPMorgan’s computer system undetected for several weeks is perhaps the most troubling aspect of the recent breach, officials at other large banks say.
The hackers were able to attain high administrative privileges within JPMorgan’s network, rooting more than 90 servers and rummaging through customer databases with detailed information for 76 million households and seven million small-business online accounts.
As they looked around, according to one person with knowledge of the breach, the hackers gleaned some critical details of customers’ accounts. With these, the hackers were able to determine whether the accounts fell within the private bank or in other business categories like mortgages.
Some people briefed on the results of the attack contend that it was only a matter of time before attackers could have gained access to customer funds and critical personal data.
Weeks into the attack, in mid-July, unusual behavior on the bank’s network was spotted, and the attackers were stopped before they had a chance to pull any customer data back to their servers abroad.
But they did make off with one file which has unnerved executives. That file contained a list of every application and program deployed on standard JPMorgan computers that hackers can crosscheck with known, or new, vulnerabilities in each system in a search for a backdoor entry.
Swapping out those programs is costly and time-consuming, people say, because the bank would have to renegotiate licensing deals with technology suppliers and swap out programs and applications for hundreds of thousands of bank employees.
As one former employee explained: “It’s as if they stole the schematics to the Capitol — they can’t just switch out every single door and window pane overnight.”
The attack came after a recent turnover within JPMorgan’s information security group.
A number of staff members followed Frank Bisignano, JPMorgan’s former co-chief operating officer, to First Data last year. This year, First Data agreed to pay JPMorgan over accusations that by wooing other executives to the payment processor, Mr. Bisignano had violated the terms of his former employment contract.
By then, First Data had already hired JPMorgan’s chief information officer, Guy Chiarello; its cybersecurity czar, Anthony Belfiore; its head of compliance, Cindy Armine; and Tom Higgins, JPMorgan’s head of operation control.
Anish Bhimani, the bank’s chief information risk officer, remained. Mr. Bhimani, who is well respected in the cybersecurity industry, is a co-author of a 1996 book on cybersecurity, “Internet Security for Business.”
Ms. Lemkau said the bank was pleased with its current cybersecurity personnel. “This is the highest-quality team we have ever had,” she said.
Last December, JPMorgan hired Dana Deasy as chief information officer from BP. Greg Rattray, a former Air Force lieutenant colonel who specialized in cyberdefense was named the head of information security in June.
Challenges quickly followed. That same month, hackers found a way into the bank’s systems.
IN TRYING TO SAVE DARDEN, A BOARD SEALED ITS OWN DEMISE
Original Story: nytimes.com
Gestures of futile nobility seem mostly confined to the movies these days. And yet the directors of Darden Restaurants, the owner of Olive Garden and other quintessentially American restaurant chains, may have decided that they would rather commit corporate suicide than give in to the demands of two activist shareholders, Starboard Value and the Barington Capital Group. It would be touching if it didn’t appear to be so inexplicably foolish. An Atlanta Corporate Governance Attorney has experience advising officers, directors, and shareholders about their rights and obligations in corporate governance disputes.
For almost a year, Darden has paid a steep price for refusing to meet Starboard and Barington’s sometimes shifting demands. Clarence Otis Jr., Darden’s chief executive and chairman, announced in July he was resigning, eight of Darden’s directors have agreed to step down, and the four remaining board members are engaged in an uphill contest to keep their seats. Against this onslaught, the Darden directors, who once refused to speak to the shareholder activists, have been reduced to pleading with Starboard to negotiate a face-saving resolution. A Boston Stockholder Disputes Lawyer is reviewing the details of this case.
One has to wonder how the Darden board allowed the situation to get to this point.
In December, Starboard announced that it had taken a 5.6 percent position in Darden a few months after Barington announced its 2.8 percent stake. Starboard proposed spinning off Olive Garden, Red Lobster and LongHorn Steakhouse into a company separate from Darden’s higher-growth chains like Capital Grille. It also suggested the usual dash of corporate reorganization because of the company’s poor results. An Austin Corporate Lawyer has experience advising clients on corporate matters involving stockholder disputes and corporate governance issues.
There was nothing unusual about this; shareholder activists love to propose spinoffs as a way to earn a quick buck. But Darden and Mr. Otis had performed well until the financial crisis. The company had only recently begun to underperform while being accused of overpaying its executives.
In short, there was room for compromise, familiar terrain for companies dealing with the increasing prevalence of shareholder activists.
But Darden also has a history of not appreciating criticism, to put it politely. Mr. Otis, for example, has been accused of barring analysts who were overly negative in their views from participating in future Darden events.
The result was that Darden’s board initially tried to ignore the activists, refusing to speak to them. The company also adopted a host of unfriendly measures to fight off the activists, including bylaws intended to inhibit shareholder nominations of new directors.
But perhaps the Darden board’s most controversial move was to propose spinning off Red Lobster, but not Olive Garden, as a stand-alone company.
Shareholders led by Starboard protested this maneuver, arguing that it would sacrifice value by leaving Red Lobster too small to survive while failing to capitalize on its real estate. Fifty-seven percent of Darden’s shareholders called a special meeting to vote on the Red Lobster spinoff. It would not take a rocket scientist to figure out that if those shareholders made the effort to call for such a meeting, they most likely did not favor the idea.
It was at this point that the Darden directors may have drunk their metaphorical hemlock.
Before the shareholder meeting on the spinoff, Darden’s board agreed abruptly in May to sell Red Lobster for $2.1 billion to Golden Gate Capital.
This was a stick in the eye for shareholders. In a situation that seemed ripe for compromise, the sale of Red Lobster only infuriated the protesting Darden shareholders led by Starboard. Starboard complained that the deal was at a fire sale price because $1.5 billion of the value was for Red Lobster’s real estate, thus valuing the nation’s pre-eminent fast seafood chain at only $600 million with a tax bill that was $500 million. Starboard has asserted that after payments related to debt, the proceeds from the actual Red Lobster business were only $21 million, a fact that Darden heatedly disputes.
This prompted Starboard to try to replace all of Darden’s directors.
Darden’s board has been on the appeasement trail ever since, overhauling corporate governance, appearing to push out Mr. Otis and then desperately pleading with Starboard to negotiate while offering it four seats and proposing to add four new independent directors for a fresh perspective. The company’s argument has essentially devolved into one that says, “We don’t want too much change at Darden, so please keep at least four of us.” It’s not the best defense, frankly, to say that the reason you should stay is because you oppose change.
The question is why the Darden board would sell Red Lobster so rashly, knowing there was a strong possibility it would end up in the mess it finds itself in right now. After all, the board was aware that a majority of Darden’s shareholders most likely opposed the sale.
Over the last few months, I have spoken to several people close to Darden. They tell a uniform tale: The board felt that Red Lobster was a melting ice cube and that if it didn’t sell quickly, it would not get a good price. Moreover, the directors felt that the board’s fiduciary duties required them to sell Red Lobster at the time. Darden also tried to make the sale contingent on shareholder approval, but Golden Gate, as might be expected, refused, so nothing more could be done.
Darden has spent a lot of money on advisers with stellar reputations, including Goldman Sachs for financial advice and the law firm Wachtell Lipton Rosen & Katz for legal advice. But the directors’ justification is still puzzling to me.
The idea that a board is forced to sell something because of fiduciary duties may be warranted, but that would mean no alternatives existed, like in the sale of Bear Stearns to JPMorgan Chase. That was the only option for Bear Stearns to avoid bankruptcy.
Under corporate law, the sale of an asset like Red Lobster is the board’s decision, and it has wide latitude to sell or not. I certainly know of no case that would support the Darden board’s contention that it had no choice. In fact, one of the seminal cases in corporate law involves the sale of the TransUnion Corporation in the 1980s to the Pritzkers. In that case, the lawyer for TransUnion told the directors that if they refused to agree to the sale, they could be held personally liable for passing up on the bid. A court found the directors personally liable for following that lawyer’s advice. Since then, lawyers have been careful to avoid this type of all-or-nothing advice.
We don’t know what was discussed in the Darden boardroom, but one hopes it wasn’t phrased the way the directors seem to say it was. We will most likely never know what caused the board to take this inexplicable path, particularly because anyone who has watched the shareholder movement over the last few years could have predicted an all-consuming shareholder backlash.
When asked for a comment, a representative of Darden pointed me to a previous statement that the decision to sell was about maximizing value. “After careful evaluation,” the statement said, “the board was certain that halting a robust Red Lobster sale process midcourse would have negative consequences for the value” received for Red Lobster.
In any event, it doesn’t appear from the evidence that Red Lobster needed to be sold immediately. Institutional Shareholder Services, the big proxy advisory firm, called the Red Lobster sale “very close to a giveaway.” The Darden board has also not benefited from the fact that Red Lobster’s management said in a document prepared by Red Lobster’s buyer related to the financing of the acquisition that it believed that the chain’s problems “are temporary in nature.”
In its battle with Darden, Starboard, whose stake is now at 8.8 percent, seems to have momentum. I.S.S. and the other main proxy adviser, Glass Lewis, have taken the unusual step of recommending that all of the directors be thrown out at the shareholder meeting, which is scheduled for Oct. 10.
Absent a last-minute, face-saving compromise, the likelihood of a full-scale ouster raises the glaring question: Why would the board pointlessly and perhaps foolishly invite its own demise?
Gestures of futile nobility seem mostly confined to the movies these days. And yet the directors of Darden Restaurants, the owner of Olive Garden and other quintessentially American restaurant chains, may have decided that they would rather commit corporate suicide than give in to the demands of two activist shareholders, Starboard Value and the Barington Capital Group. It would be touching if it didn’t appear to be so inexplicably foolish. An Atlanta Corporate Governance Attorney has experience advising officers, directors, and shareholders about their rights and obligations in corporate governance disputes.
For almost a year, Darden has paid a steep price for refusing to meet Starboard and Barington’s sometimes shifting demands. Clarence Otis Jr., Darden’s chief executive and chairman, announced in July he was resigning, eight of Darden’s directors have agreed to step down, and the four remaining board members are engaged in an uphill contest to keep their seats. Against this onslaught, the Darden directors, who once refused to speak to the shareholder activists, have been reduced to pleading with Starboard to negotiate a face-saving resolution. A Boston Stockholder Disputes Lawyer is reviewing the details of this case.
One has to wonder how the Darden board allowed the situation to get to this point.
In December, Starboard announced that it had taken a 5.6 percent position in Darden a few months after Barington announced its 2.8 percent stake. Starboard proposed spinning off Olive Garden, Red Lobster and LongHorn Steakhouse into a company separate from Darden’s higher-growth chains like Capital Grille. It also suggested the usual dash of corporate reorganization because of the company’s poor results. An Austin Corporate Lawyer has experience advising clients on corporate matters involving stockholder disputes and corporate governance issues.
There was nothing unusual about this; shareholder activists love to propose spinoffs as a way to earn a quick buck. But Darden and Mr. Otis had performed well until the financial crisis. The company had only recently begun to underperform while being accused of overpaying its executives.
In short, there was room for compromise, familiar terrain for companies dealing with the increasing prevalence of shareholder activists.
But Darden also has a history of not appreciating criticism, to put it politely. Mr. Otis, for example, has been accused of barring analysts who were overly negative in their views from participating in future Darden events.
The result was that Darden’s board initially tried to ignore the activists, refusing to speak to them. The company also adopted a host of unfriendly measures to fight off the activists, including bylaws intended to inhibit shareholder nominations of new directors.
But perhaps the Darden board’s most controversial move was to propose spinning off Red Lobster, but not Olive Garden, as a stand-alone company.
Shareholders led by Starboard protested this maneuver, arguing that it would sacrifice value by leaving Red Lobster too small to survive while failing to capitalize on its real estate. Fifty-seven percent of Darden’s shareholders called a special meeting to vote on the Red Lobster spinoff. It would not take a rocket scientist to figure out that if those shareholders made the effort to call for such a meeting, they most likely did not favor the idea.
It was at this point that the Darden directors may have drunk their metaphorical hemlock.
Before the shareholder meeting on the spinoff, Darden’s board agreed abruptly in May to sell Red Lobster for $2.1 billion to Golden Gate Capital.
This was a stick in the eye for shareholders. In a situation that seemed ripe for compromise, the sale of Red Lobster only infuriated the protesting Darden shareholders led by Starboard. Starboard complained that the deal was at a fire sale price because $1.5 billion of the value was for Red Lobster’s real estate, thus valuing the nation’s pre-eminent fast seafood chain at only $600 million with a tax bill that was $500 million. Starboard has asserted that after payments related to debt, the proceeds from the actual Red Lobster business were only $21 million, a fact that Darden heatedly disputes.
This prompted Starboard to try to replace all of Darden’s directors.
Darden’s board has been on the appeasement trail ever since, overhauling corporate governance, appearing to push out Mr. Otis and then desperately pleading with Starboard to negotiate while offering it four seats and proposing to add four new independent directors for a fresh perspective. The company’s argument has essentially devolved into one that says, “We don’t want too much change at Darden, so please keep at least four of us.” It’s not the best defense, frankly, to say that the reason you should stay is because you oppose change.
The question is why the Darden board would sell Red Lobster so rashly, knowing there was a strong possibility it would end up in the mess it finds itself in right now. After all, the board was aware that a majority of Darden’s shareholders most likely opposed the sale.
Over the last few months, I have spoken to several people close to Darden. They tell a uniform tale: The board felt that Red Lobster was a melting ice cube and that if it didn’t sell quickly, it would not get a good price. Moreover, the directors felt that the board’s fiduciary duties required them to sell Red Lobster at the time. Darden also tried to make the sale contingent on shareholder approval, but Golden Gate, as might be expected, refused, so nothing more could be done.
Darden has spent a lot of money on advisers with stellar reputations, including Goldman Sachs for financial advice and the law firm Wachtell Lipton Rosen & Katz for legal advice. But the directors’ justification is still puzzling to me.
The idea that a board is forced to sell something because of fiduciary duties may be warranted, but that would mean no alternatives existed, like in the sale of Bear Stearns to JPMorgan Chase. That was the only option for Bear Stearns to avoid bankruptcy.
Under corporate law, the sale of an asset like Red Lobster is the board’s decision, and it has wide latitude to sell or not. I certainly know of no case that would support the Darden board’s contention that it had no choice. In fact, one of the seminal cases in corporate law involves the sale of the TransUnion Corporation in the 1980s to the Pritzkers. In that case, the lawyer for TransUnion told the directors that if they refused to agree to the sale, they could be held personally liable for passing up on the bid. A court found the directors personally liable for following that lawyer’s advice. Since then, lawyers have been careful to avoid this type of all-or-nothing advice.
We don’t know what was discussed in the Darden boardroom, but one hopes it wasn’t phrased the way the directors seem to say it was. We will most likely never know what caused the board to take this inexplicable path, particularly because anyone who has watched the shareholder movement over the last few years could have predicted an all-consuming shareholder backlash.
When asked for a comment, a representative of Darden pointed me to a previous statement that the decision to sell was about maximizing value. “After careful evaluation,” the statement said, “the board was certain that halting a robust Red Lobster sale process midcourse would have negative consequences for the value” received for Red Lobster.
In any event, it doesn’t appear from the evidence that Red Lobster needed to be sold immediately. Institutional Shareholder Services, the big proxy advisory firm, called the Red Lobster sale “very close to a giveaway.” The Darden board has also not benefited from the fact that Red Lobster’s management said in a document prepared by Red Lobster’s buyer related to the financing of the acquisition that it believed that the chain’s problems “are temporary in nature.”
In its battle with Darden, Starboard, whose stake is now at 8.8 percent, seems to have momentum. I.S.S. and the other main proxy adviser, Glass Lewis, have taken the unusual step of recommending that all of the directors be thrown out at the shareholder meeting, which is scheduled for Oct. 10.
Absent a last-minute, face-saving compromise, the likelihood of a full-scale ouster raises the glaring question: Why would the board pointlessly and perhaps foolishly invite its own demise?
Wednesday, October 1, 2014
WHEN LOOSE LIPS SINK COMPANIES
Original Story: bbc.com
A company is planning to go public sometime in the next year and I know everything about it.
I know management’s strategy, which board members they are planning to "dump", which employees they are going to ease out and replace before they announce the IPO, who the company’s main competitors are, who its bankers are, how management plans to finesse the filing to make negatives sound more positive… Suffice it to say, I know a lot about them.
Have I ever worked with them? Nope.
Do I know anyone who works at the company? Not really.
I know all this because the person (that I surmised is their chief financial officer) came and sat down in a seat next to me in an airline lounge at the airport in Munich, Germany, and spent the entire time speaking freely, and without moderating his tone about any of it. It was information I didn’t want to know, particularly because much of it was insider information that could have had regulatory repercussions, and yet now I know it all, as do a couple dozen other people who were sitting nearby giving him the evil eye.
This all happened as I was travelling back from a board meeting where I’d spent a good amount of time in a risk and governance committee meeting. This chap’s oversharing phone call got me to thinking about risk in a new way.
“Loose lips” risk
Over the years I’ve sat on several board committees that focus on company risk, including audit and governance and risk committees.
We talk about a lot of types of risk. Cyber, money, market, strategy and much more. The company risk register, which is essentially a rolling record of potential risks, helps keep track and measure all these possible dangers, and it can grow to pages long.
There is one risk I'm going to be looking at more carefully in the coming months. I’m going to call it the “loose lips” risk. It is a human risk that can be found anywhere. Mostly it is heard in crowded public places such as airline and hotel lounges and trains, but it can also be found in quiet, out-of-the-way places.
Bucolic public gardens are not immune. Imagine my surprise when two senior executives of a large public company had a frank talk about their board meetings while standing over my son and me as we were pond dipping. We’d been there for a little while and I suppose we looked harmless enough, just a mother and her son. These guys paused in their walk to gaze over the pond, talking intimate board business and plans for the future. This case was a bit more embarrassing because I actually knew a lot about the company and people they were talking about.
Public places can lure people into thinking they are invisible.
Creating a bubble
Mobile phones and video chatting have their plusses. They allow you to get work done anywhere — be it the beach or the airport. The downside, from a risk perspective, is that we are not forced to sit in closed offices where information is more secure. Now we can talk confidential business anywhere.
Until someone invents a device that creates a personal bubble (not a bad idea, come to think of it), we are surrounded by a lot of strangers at close quarters whenever we eat out, travel on public transportation — that includes taxis — and go for a walk and talk.
It happens often enough that I think I may suggest this risk be separated from the human error line in the risk register into its own "loose lips sink ships" line item.
My fellow committee members will laugh until I tell them how many times in my last month of travel I've encountered this, then they will likely realise it has happened a lot to them too, and that, frankly, we’ve all been guilty of it. We'll have to make a strategy about how to tell executives not to blabber without being patronising — some will clip and send this column as a not-so-subtle hint.
But one thing is certain: it is vital that we pay attention because no one needs to hack our secure servers or tap our phones for private information if they can simply get it by sitting a couple seats away on the train.
Discretion is the wiser part of valour, and in this case, not only will we be protecting the companies we work for from an easy-to-manage risk, we’ll also make much more pleasant neighbours in public spaces.
A company is planning to go public sometime in the next year and I know everything about it.
I know management’s strategy, which board members they are planning to "dump", which employees they are going to ease out and replace before they announce the IPO, who the company’s main competitors are, who its bankers are, how management plans to finesse the filing to make negatives sound more positive… Suffice it to say, I know a lot about them.
Have I ever worked with them? Nope.
Do I know anyone who works at the company? Not really.
I know all this because the person (that I surmised is their chief financial officer) came and sat down in a seat next to me in an airline lounge at the airport in Munich, Germany, and spent the entire time speaking freely, and without moderating his tone about any of it. It was information I didn’t want to know, particularly because much of it was insider information that could have had regulatory repercussions, and yet now I know it all, as do a couple dozen other people who were sitting nearby giving him the evil eye.
This all happened as I was travelling back from a board meeting where I’d spent a good amount of time in a risk and governance committee meeting. This chap’s oversharing phone call got me to thinking about risk in a new way.
“Loose lips” risk
Over the years I’ve sat on several board committees that focus on company risk, including audit and governance and risk committees.
We talk about a lot of types of risk. Cyber, money, market, strategy and much more. The company risk register, which is essentially a rolling record of potential risks, helps keep track and measure all these possible dangers, and it can grow to pages long.
There is one risk I'm going to be looking at more carefully in the coming months. I’m going to call it the “loose lips” risk. It is a human risk that can be found anywhere. Mostly it is heard in crowded public places such as airline and hotel lounges and trains, but it can also be found in quiet, out-of-the-way places.
Bucolic public gardens are not immune. Imagine my surprise when two senior executives of a large public company had a frank talk about their board meetings while standing over my son and me as we were pond dipping. We’d been there for a little while and I suppose we looked harmless enough, just a mother and her son. These guys paused in their walk to gaze over the pond, talking intimate board business and plans for the future. This case was a bit more embarrassing because I actually knew a lot about the company and people they were talking about.
Public places can lure people into thinking they are invisible.
Creating a bubble
Mobile phones and video chatting have their plusses. They allow you to get work done anywhere — be it the beach or the airport. The downside, from a risk perspective, is that we are not forced to sit in closed offices where information is more secure. Now we can talk confidential business anywhere.
Until someone invents a device that creates a personal bubble (not a bad idea, come to think of it), we are surrounded by a lot of strangers at close quarters whenever we eat out, travel on public transportation — that includes taxis — and go for a walk and talk.
It happens often enough that I think I may suggest this risk be separated from the human error line in the risk register into its own "loose lips sink ships" line item.
My fellow committee members will laugh until I tell them how many times in my last month of travel I've encountered this, then they will likely realise it has happened a lot to them too, and that, frankly, we’ve all been guilty of it. We'll have to make a strategy about how to tell executives not to blabber without being patronising — some will clip and send this column as a not-so-subtle hint.
But one thing is certain: it is vital that we pay attention because no one needs to hack our secure servers or tap our phones for private information if they can simply get it by sitting a couple seats away on the train.
Discretion is the wiser part of valour, and in this case, not only will we be protecting the companies we work for from an easy-to-manage risk, we’ll also make much more pleasant neighbours in public spaces.
Tuesday, September 30, 2014
SECRETS OF A TRULY SUCCESSFUL BOARD PITCH
Original Story: bbc.com
One of the most frequent questions I get asked when people hear I sit on company boards isn’t about executive pay packages. Instead, they want to know how to present to a board so its members will say yes.
The question always calls to mind a presentation that went wrong. Several years ago, a rather dandified fellow from inside a company gave a presentation to a board I sat on. He was snide at times, made several off-colour jokes, winked at board members and made his political leanings clear with side remarks about the government of the day. When he didn’t know the answers to questions we asked, he tried to fob them off as irrelevant.
When the chair finally ended the presentation, we looked at each other in disbelief. We weren’t just unsure about the proposal, but also unsure of the person who brought the proposal. I think you can guess how we voted.
Don’t let this be you. A Boston Employment Lawyer agrees.
People present to corporate boards for many reasons—they could be suggesting a new direction for the company, explaining a complex legal issue that needs to be decided quickly, or simply giving an update on an on-going project. But boards come in all shapes and sizes, be they school boards, neighbourhood watch boards, apartment boards, non-profit boards, employee committees.
No matter the context, the principles of presenting to decision making bodies are the same, and getting it right is crucial. It’s not as difficult as it sounds, so long as you keep some guidelines in mind. Here are nine do’s and six don’ts of being effective:
Board Presentations Do’s:
Board Presentations Don’ts:
Clear, Concise, and to the Point
Think of your presentation as a memo, not a novel. Board members thrive on facts presented in a clear concise manner. Even if you leave your presentation without getting the answer yes you hoped for, you will at least leave the people at the table with a good impression of you. And that will go a long way if you come back to the board with a revised proposal.
Give it a go and let me know if it helped, and if you know someone who preparing to give a presentation, clip this and send it to them. Chances are not only will they be grateful, but so will the board members who hear the presentation.
One of the most frequent questions I get asked when people hear I sit on company boards isn’t about executive pay packages. Instead, they want to know how to present to a board so its members will say yes.
The question always calls to mind a presentation that went wrong. Several years ago, a rather dandified fellow from inside a company gave a presentation to a board I sat on. He was snide at times, made several off-colour jokes, winked at board members and made his political leanings clear with side remarks about the government of the day. When he didn’t know the answers to questions we asked, he tried to fob them off as irrelevant.
When the chair finally ended the presentation, we looked at each other in disbelief. We weren’t just unsure about the proposal, but also unsure of the person who brought the proposal. I think you can guess how we voted.
Don’t let this be you. A Boston Employment Lawyer agrees.
People present to corporate boards for many reasons—they could be suggesting a new direction for the company, explaining a complex legal issue that needs to be decided quickly, or simply giving an update on an on-going project. But boards come in all shapes and sizes, be they school boards, neighbourhood watch boards, apartment boards, non-profit boards, employee committees.
No matter the context, the principles of presenting to decision making bodies are the same, and getting it right is crucial. It’s not as difficult as it sounds, so long as you keep some guidelines in mind. Here are nine do’s and six don’ts of being effective:
Board Presentations Do’s:
- Know what you are walking into. Board meetings are often jam packed with a long agenda. In the past couple of months I’ve been in meetings that have lasted up to 8 hours, covering up to 20 topics. Your topic is special to you, but you have a finite amount of time to get essential information across.
- Do your homework. Who is on the board? What is their background? It helps to be able to tailor the presentation when applicable, so you are not telling them things they already know, nor assuming knowledge they might not have. An Atlanta Business Lawyer has experience drafting corporate documents.
- Send documents in plenty of time. I try to ensure board members get their papers at least a week in advance. If there’s a deadline, meet it with several days to spare in case there is feedback before it goes to the board. Please don't "surprise" us, as in "I didn't provide the papers in advance because I wanted to keep you in suspense". This isn't an Agatha Christie novel, it’s a board meeting. Give us the tools we need to make a decision.
- Know in advance how much time you have. Do not go over your allotment. If the chair feels more time is warranted, he or she will extend it. Make sure to leave plenty of time for questions.
- Ask how the board would like the information presented. For example, ask the chair, "shall I present the whole thing or hit the high points?". Another approach: suggest that you "take the papers as already read". That means you presume that everyone has reviewed the documents you sent in advance, and you will just address the most important points and avoid repeating every detail.
- Be prepared. Be professional. Be concise. Board members will judge the content of your presentation, but also the confidence with which you deliver it. A Boston Business Lawyer can provide legal advice for a variety of business matters.
- Stay calm and answer the question asked. If you don't know the answer, don't get flustered, defensive or try to fake it. Instead, promise to come back with the answer as swiftly as possible. Then follow through quickly. Also, and this is really important, don’t get thrown off if you get a lot of hard questions. If we didn’t think your proposal had merit we wouldn't bother with questions, we'd simply say no. Board members ask questions differently — some meander, others get straight to it. No matter the style, stay even-tempered and answer clearly and concisely. Also, don't give attitude about questions you think are "dumb" or obvious — we are doing our job. Often the most interesting or important information comes from seemingly simplistic questions.
- Be clear and concise about the outcome. If there is a decision to be taken by the end of your presentation, make sure the options are very clear. It never hurts to state the options up front, explain them, and then present the options again.
- End with grace. When it is time for you to go, say thanks and leave. Don’t linger.
Board Presentations Don’ts:
- You may be kept waiting — don’t complain. Meetings can run late depending on the agenda. If it is a closed door meeting you’ll be kept waiting outside. If not, you’ll be there watching other people presenting, or listening to debates on other agenda items. Don't under any circumstances grumble about it, as it will taint the room's view of your presentation before it even starts. A cheerful "no problem" goes a long way.
- Don’t bore us. I recently sat through a report that essentially told everyone in the room something we all already knew. The presenter quickly lost our attention. Even worse, we had all mentally checked out by the time he’d gotten to the "ask".
- Don’t lobby. Your presentation is not an opportunity to take the stand on other areas. If you are there to talk about upgrading the IT infrastructure, throwing in a “while I’m here I’d like to make a pitch for better parking facilities” is not helpful to you or us.
- Don't use jargon. We are not necessarily experts in your field. Use clear language that everyone around the table will understand. The first time out, explain what you mean by ESG, grok, and API, otherwise it just sounds like a string of nonsensical letters and words. Try to avoid overblown statements — a “complete sea change” better be pretty big. Also trend-driven words that will make people roll their eyes. “Thinkfluencer” comes to mind.
- We are not all the same — don’t air your bias and political inclinations. With any luck the group around the table is a diverse one, with diverse opinions. Off-colour jokes and political comments have no place in your presentation and could offend the very people you are trying to persuade.
- Don’t go over the top with bells and whistles. There’s no need to pass out flowers or an entertaining video unless it is directly related to the topic. Useful: “Here is a sample of what we are talking about.” Strange: “Here is a flower for all you lovely people.” And yes, I was in a meeting where someone once handed out flowers to “all the lovely lady board members”.
Clear, Concise, and to the Point
Think of your presentation as a memo, not a novel. Board members thrive on facts presented in a clear concise manner. Even if you leave your presentation without getting the answer yes you hoped for, you will at least leave the people at the table with a good impression of you. And that will go a long way if you come back to the board with a revised proposal.
Give it a go and let me know if it helped, and if you know someone who preparing to give a presentation, clip this and send it to them. Chances are not only will they be grateful, but so will the board members who hear the presentation.
Monday, September 29, 2014
ITALIAN PM RENZI, MARCHIONNE TOUT FIAT-CHRYSLER MERGER
Original Story: detroitnews.com
Italian Prime Minister Matteo Renzi and Chrysler Group LLC CEO and Chairman Sergio Marchionne are optimistic the formation of Fiat Chrysler Automobiles will be beneficial for the U.S. and Italy.
Renzi, who was given a tour of Chrysler's Auburn Hills headquarters Friday by Marchionne, said he sees the creation of the new company as an opportunity for his country's automotive industry to compete on a global scale.
"Globalization is not a monster," he said in Italian through a translator during a press conference before addressing about 200 employees. "It is the greatest opportunity for Italy."
The U.S. has already reaped many benefits from Fiat SpA taking a stake in Chrysler as part of the automotive bailout in June 2009, including more than $5.3 billion in new investments and nearly 27,800 new jobs. Many of those investments and jobs have benefited Michigan.
Since announcing aspirations to create FCA in January, Marchionne has continually touted that integrating Chrysler and Fiat to create the world's seventh-largest automaker would be beneficial for both companies and countries. Fiat fully acquired Chrysler as part of a $4.35 billion deal with the United Auto Workers union trust fund that pays health care bills for retirees.
Marchionne, who also serves as CEO of Fiat, confirmed the company still plans to list FCA on the New York Stock Exchange on Columbus Day, Oct. 13.
"Columbus Day, for us, will be the beginning of a new world, a new era," he told employees through a translator.
FCA, Marchionne said, is a global company "not just in numbers, but in spirit," thanks to the combined reach of Fiat and Chrysler.
Renzi's visit to Chrysler's headquarters is the most recent sign of the growing connection between Italy and Michigan thanks to FCA, which is registered in the Netherlands and recently announced a headquarters in London's affluent West End business district.
The London headquarters was chosen for tax purposes and to avoid political controversy in the automakers' current home countries. Chrysler — founded in the U.S. in 1925 — was part of the $85 billion automotive bailout using U.S. taxpayer money, and Fiat was founded in Italy in 1899.
Marchionne and Renzi both downplayed the significance of where the headquarters is located.
"My only great concern is to reduce the number of people that don't have work in Italy," he said, adding Fiat is a "historic" and "great" company for Italy.
Italy's unemployment level is at more than 12 percent. That compares to U.S. unemployment at 6.1 percent in August.
Renzi compared his country's current employment problems to what the U.S. automotive industry went through in 2009, when Chrysler and crosstown rival General Motors Co. were forced into government-backed bankruptcies. He said he hopes his country can come out as well as Chrysler has in the U.S.
"I continue to believe that the best times are yet to come," he said.
This was Renzi's first visit to Chrysler's headquarters. It ends a five-day trip for the 39-year-old prime minister to the U.S. that also included visits to California and New York.
Italian Prime Minister Matteo Renzi and Chrysler Group LLC CEO and Chairman Sergio Marchionne are optimistic the formation of Fiat Chrysler Automobiles will be beneficial for the U.S. and Italy.
Renzi, who was given a tour of Chrysler's Auburn Hills headquarters Friday by Marchionne, said he sees the creation of the new company as an opportunity for his country's automotive industry to compete on a global scale.
"Globalization is not a monster," he said in Italian through a translator during a press conference before addressing about 200 employees. "It is the greatest opportunity for Italy."
The U.S. has already reaped many benefits from Fiat SpA taking a stake in Chrysler as part of the automotive bailout in June 2009, including more than $5.3 billion in new investments and nearly 27,800 new jobs. Many of those investments and jobs have benefited Michigan.
Since announcing aspirations to create FCA in January, Marchionne has continually touted that integrating Chrysler and Fiat to create the world's seventh-largest automaker would be beneficial for both companies and countries. Fiat fully acquired Chrysler as part of a $4.35 billion deal with the United Auto Workers union trust fund that pays health care bills for retirees.
Marchionne, who also serves as CEO of Fiat, confirmed the company still plans to list FCA on the New York Stock Exchange on Columbus Day, Oct. 13.
"Columbus Day, for us, will be the beginning of a new world, a new era," he told employees through a translator.
FCA, Marchionne said, is a global company "not just in numbers, but in spirit," thanks to the combined reach of Fiat and Chrysler.
Renzi's visit to Chrysler's headquarters is the most recent sign of the growing connection between Italy and Michigan thanks to FCA, which is registered in the Netherlands and recently announced a headquarters in London's affluent West End business district.
The London headquarters was chosen for tax purposes and to avoid political controversy in the automakers' current home countries. Chrysler — founded in the U.S. in 1925 — was part of the $85 billion automotive bailout using U.S. taxpayer money, and Fiat was founded in Italy in 1899.
Marchionne and Renzi both downplayed the significance of where the headquarters is located.
"My only great concern is to reduce the number of people that don't have work in Italy," he said, adding Fiat is a "historic" and "great" company for Italy.
Italy's unemployment level is at more than 12 percent. That compares to U.S. unemployment at 6.1 percent in August.
Renzi compared his country's current employment problems to what the U.S. automotive industry went through in 2009, when Chrysler and crosstown rival General Motors Co. were forced into government-backed bankruptcies. He said he hopes his country can come out as well as Chrysler has in the U.S.
"I continue to believe that the best times are yet to come," he said.
This was Renzi's first visit to Chrysler's headquarters. It ends a five-day trip for the 39-year-old prime minister to the U.S. that also included visits to California and New York.
THE SHOCKING TRUTH ABOUT WAL-MART AND GASOLINE PRICES
Original Story: finance.yahoo.com
Gasoline prices are at their lowest levels since February. But while that might spell relief for consumers, surprisingly, it may not benefit the world’s largest retailer.
Over the past two weeks, the price of gasoline fell nearly 9 cents based on data compiled by the Lundberg Survey. The average price of gasoline in the United States is $3.3741 per gallon. Conventional wisdom holds that gasoline prices move inversely to retail sales. Thus, lower gasoline prices should mean more sales ahead for the world’s largest retailer, Wal-Mart.
However, a closer look at the charts suggests otherwise.
“Intuitively, you might think lower prices at the pump [means] more money in your pocket [and consumers] go out to Wal-Mart and buy some more stuff,” said Rich Ross, global equity strategist at Auerbach Grayson and a “Talking Numbers” contributor. “But that’s not really how it has worked for about the last 10 years. What we’ve seen is a very strong correlation in the same direction between commodities like gasoline and the price of equities like Wal-Mart.”
To be sure, gasoline prices and Wal-Mart’s share prices don’t move perfectly together but are roughly where they were at the start of the year. Wholesale gasoline futures are down 8 percent on the year, while Wal-Mart shares are down 2.5 percent year-to-date. Contrast that with the broad market S&P 500 index which has gained almost 8 percent so far in 2014.
“It’s not a perfect match but in general, the trends move in the same direction,” said Ross, looking at a five-year chart of Wal-Mart stock versus the price of reformulated blended gasoline contracts (RBOB). “Higher gasoline has corresponded roughly with higher equity prices and vice versa, which is the situation we’re seeing today where gasoline and other commodities are breaking down. They’re eroding as a sign of weakening demand, a weaker economy, etc., and Wal-Mart is commensurately moving lower.”
Gina Sanchez, founder of Chantico Global, also says there is a fundamental misunderstanding about the price of gasoline and retail spending.
“Everyone wants to say that a penny at the pump causes a billion dollars of spending,” said Sanchez, a CNBC contributor. “That statistic is like 15 years old, and I think it’s hilarious that people continue to say it. Intuitively you would think that. However, over the last five years, I think that gasoline has been more an indication of demand.”
That demand, in turn, has been weak, according to Sanchez. “We’ve had a situation where a lot of people lost their jobs,” she said. “Wages have been slow to grow. Because of that, people have been slow to spend. We’ve seen that not online in the retail space but in the commodities space.”
One example Sanchez cites is natural gas, which after a spike during the “polar vortex” this past winter, is now down 9 percent for the year. “Commodity prices are barely showing a pulse right now and that’s a sign of weak demand, and that really hurts companies like Wal-Mart,” she said. “They need demand. Without that, we continue to see a decline in same-store sales…. This is an uphill battle for Wal-Mart right now.”
Gasoline prices are at their lowest levels since February. But while that might spell relief for consumers, surprisingly, it may not benefit the world’s largest retailer.
Over the past two weeks, the price of gasoline fell nearly 9 cents based on data compiled by the Lundberg Survey. The average price of gasoline in the United States is $3.3741 per gallon. Conventional wisdom holds that gasoline prices move inversely to retail sales. Thus, lower gasoline prices should mean more sales ahead for the world’s largest retailer, Wal-Mart.
However, a closer look at the charts suggests otherwise.
“Intuitively, you might think lower prices at the pump [means] more money in your pocket [and consumers] go out to Wal-Mart and buy some more stuff,” said Rich Ross, global equity strategist at Auerbach Grayson and a “Talking Numbers” contributor. “But that’s not really how it has worked for about the last 10 years. What we’ve seen is a very strong correlation in the same direction between commodities like gasoline and the price of equities like Wal-Mart.”
To be sure, gasoline prices and Wal-Mart’s share prices don’t move perfectly together but are roughly where they were at the start of the year. Wholesale gasoline futures are down 8 percent on the year, while Wal-Mart shares are down 2.5 percent year-to-date. Contrast that with the broad market S&P 500 index which has gained almost 8 percent so far in 2014.
“It’s not a perfect match but in general, the trends move in the same direction,” said Ross, looking at a five-year chart of Wal-Mart stock versus the price of reformulated blended gasoline contracts (RBOB). “Higher gasoline has corresponded roughly with higher equity prices and vice versa, which is the situation we’re seeing today where gasoline and other commodities are breaking down. They’re eroding as a sign of weakening demand, a weaker economy, etc., and Wal-Mart is commensurately moving lower.”
Gina Sanchez, founder of Chantico Global, also says there is a fundamental misunderstanding about the price of gasoline and retail spending.
“Everyone wants to say that a penny at the pump causes a billion dollars of spending,” said Sanchez, a CNBC contributor. “That statistic is like 15 years old, and I think it’s hilarious that people continue to say it. Intuitively you would think that. However, over the last five years, I think that gasoline has been more an indication of demand.”
That demand, in turn, has been weak, according to Sanchez. “We’ve had a situation where a lot of people lost their jobs,” she said. “Wages have been slow to grow. Because of that, people have been slow to spend. We’ve seen that not online in the retail space but in the commodities space.”
One example Sanchez cites is natural gas, which after a spike during the “polar vortex” this past winter, is now down 9 percent for the year. “Commodity prices are barely showing a pulse right now and that’s a sign of weak demand, and that really hurts companies like Wal-Mart,” she said. “They need demand. Without that, we continue to see a decline in same-store sales…. This is an uphill battle for Wal-Mart right now.”
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