Thursday, December 4, 2008
Big Three automakers ramp up their bailout request
The chief executive officers of the Big Three automakers increased their request to Congress for $34 billion in bailout bridge loans today, up from the $25 billion that was rejected two weeks ago.
General Motor Corp.'s Rick Wagoner, Ford Motor Co.'s Alan Mulally and Chrysler LLC's Robert Nardelli each drove fuel-efficient hybrids to Washington, D.C., after being scolded for flying to the capitol in corporate jets two weeks ago.
The leaders of the United Auto Workers said they would be willing to renegotiate their contracts to help the Big Three gain the bridge loans.
Congressmen and the Bush administration are debating the merits of an automotive bailout, although they approved a much larger bailout for the financial services industry without much debate and little accountability last month.
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AT&T and Dupont to eliminate thousands of jobs
Another arctic recessional blast hit the economy today, as giants AT&T Inc. and Dupont Co. announced they will eliminate thousands of jobs.
Dallas-based AT&T said it would cut 12,000 jobs, or 4 percent of its workforce, and spend less money on new equipment in 2009 in response to the weakening economy.
Most of the job losses will take place in AT&T's older and declining local and long-distance segments, as more consumers are eliminating their land lines and switching to wireless services.
"There's an ongoing industry shift from wireline to wireless and broadband," AT&T spokesman Walt Sharp told MarketWatch.com.
AT&T did not specify geographic specifics of its layoffs, which will begin in December. The company will take a charge of approximately $600 million in the fourth quarter to pay severance to affected employees.
Wilmington, Del.-based Dupont said it will eliminate 2,500 jobs as it reacts to declines in the automobile and construction markets throughout the United States and Europe. The company will take a pre-tax restructuring charge of $500 million, or 40 cents per share, in the fourth quarter.
Meanwhile, the U.S. Commerce Department reported today that orders to U.S. factories dropped 5.1 percent in October, the largest monthly decrease since an 8.5-percent fall in July 2000.
The stock market took today's carnage in stride. The stocks in the BizTimes Stock Index were mixed this morning. The largest local gainers this morning were Weyco Group Inc. (up $1.71 to $30.50) and Kohl's Corp. (up $1.56 to $34.93). The largest local decliners this morning were Bucyrus International Inc. (down $1.35 to $15.87) and Joy Global Inc. (down $1.32 to $18.91).
Black Friday wasn't enough to carry retailers in November
U.S. retailers today reported bleak sales figures for November, including Black Friday totals.
About two-thirds of the 16 retailers that have reported their results so far missed expectations, according to Thomson Reuters.
Menomonee Falls-based Kohl's Corp. reported today that its total sales for the four-week month ended Nov. 29 decreased 13.7 percent from the same four-week period a year ago. On a comparable store basis, Kohl's reported that its sales decreased 17.5 percent.
Kevin Mansell, Kohl's president and chief executive officer, said, "November sales results were as expected, affected by both lower traffic than last year, and a significant sales shift due to a later Thanksgiving. Post-Thanksgiving results have been significantly stronger than our prior trend, driven by planned strong promotion. Consumers are focused on value, and we have incorporated that into our promotional efforts through the end of the year."
Target Corp. reported a 10-percent drop in same-store sales, as did Gap Inc. J.C. Penney Company Inc.'s same-store sales fell 11.9 percent, Macy's fell 13 percent and sales at Nordstrom's and The Bon-Ton Stores Inc. both dropped 16 percent.
"Results from post-Thanksgiving holiday sales, particularly Friday, were stronger than the rest of the month, but were insufficient to offset earlier weakness … Consumers remain very cautious and event-driven in their purchasing behavior," said Gregg Steinhafel, a Milwaukee native who is Target's chief executive officer.
Wal-Mart Stores Inc. was again the lone bright spot, with sales rising 3.4 percent.
Wisconsin's dairy industry is booming
One bright spot in Wisconsin's economy this year is its agriculture. Gov. Jim Doyle today announced that Wisconsin's agricultural exports increased by 7 percent to a record $1.5 billion during the first nine months of 2008.
"I'm really pleased that people around the world are learning the best food and livestock are produced here in Wisconsin," Doyle said. "Agriculture is one of the cornerstones of our economy, and Wisconsin is aggressively positioning ourselves to take advantage of this growing demand through technological upgrades and new products."
Wisconsin's dairy exports grew by 39 percent to $176 million, up from $126 million in the first nine months of 2007. Exports were driven by a rising demand for cheese and butter. Cheese exports set a record value of $75 million for the first nine months of 2008, a robust 47-percent increase from a year ago.
Dried distillers grains and solubles (DDGS) continue to experience wide international acceptance as a livestock feed. DDGS exports grew 93 percent compared with the first nine months of 2007. Export sales totaled $25 million for the first nine months of the year.
The state's agricultural exports were driven by growing consumer demand in Canada, Mexico, Japan, China and Korea for dairy products, baking and brewing ingredients, foods and food preparations, beverages and hides. Mexico was the key market for the export of dairy genetics and live dairy cattle.
Wisconsin ranks first among the state for the export of dairy cattle, semen and embryos.
Agriculture generates $51 billion for the state annually and close to half a million jobs.
Marquette launches new legal assistance program for nonprofits
Marquette University Law School has established a new program to provide pro bono legal assistance to Milwaukee's nonprofit organizations.
The Milwaukee Legal Initiative for Nonprofit Corporations (M-LINC) is the only source of its kind in the state, connecting attorneys and law students willing to donate their time and expertise with charities unable to afford legal help.
M-LINC facilitates pro bono legal services for eligible nonprofit corporations and hosts educational programs on nonprofit legal issues. In addition, M-LINC hosts a clinical program each semester that brings together the expertise of students and faculty from Marquette's Law School, College of Business Administration, College of Professional Studies and J. William and Mary Diederich College of Communication to benefit the multi-faceted needs of a nonprofit client.
"Marquette Law School is uniquely positioned to provide this link among attorneys, law students and nonprofits in need. Exposing students to different examples of public service in the legal profession is an important part of our mission," said Marquette Law School dean Joseph Kearney.
Attorneys and law firms throughout the state have signed on to assist with clients as needed. Law students from Marquette participate in administering the pro bono legal services program, helping staff a legal assistance phone line, assisting volunteer attorneys with research on pro bono cases and working in the nonprofit clinic, all under the direction of attorney Karin Werner and an advisory council.
M-LINC has secured funding through 2010 with a lead grant from the Helen Bader Foundation and additional assistance from the Pro Bono Initiative Fund of the State Bar of Wisconsin. Nonprofit corporations may inquire about pro bono legal services by calling M-LINC at (414) 288-6331 or at (888) 530-5462.
Krumenacher is new chairman of Brookfield Chamber
The Greater Brookfield Chamber of Commerce has selected its 2009 board of directors, which will be led by new chairman Tom Krumenacher of Ryan Kromholz & Manion S.C., Brookfield.
Krumenacher succeeds Chad Schultz of Innovative Signs Inc., Waukesha. Schultz remains on the board as past chairman.
The new chair elect of the board is D-J Swant of Brookfield Rehabilitation & Specialty Care, Brookfield.
Other members of the board include: Jeanie Martin of I/O Technologies Inc., Germantown; Sally Piefer of The Schroeder Group, Waukesha; and Treasurer, Michelle Prusinski of Sitzberger, Widmann & Co., Brookfield; John Allen of Allen & Murphy, Brookfield; Bill Bulloch of Waukesha County Technical College, Pewaukee; Sherry Douglas of Seek Careers/Staffing Inc., Waukesha; Dan Hansen of Park Bank, Milwaukee; Sandra Hendrickson of Investment Title & Closing Services, Brookfield; Tony Iannice of Carrabba's Italian Grill, Brookfield; Jim Palzewicz of ActionCOACH Business Coaching, Elm Grove; Chad Swalheim of M & I Bank, Brookfield; and Rendall Thomas of WineStyles, Brookfield.
Non-voting board representatives are: Gloria Albrecht, Town of Brookfield; and Patrick Drinan, City of Brookfield Economic Development Department.
State headlines: Presto Products Co. layoffs total 250
Layoffs at Presto Products Co. in Weyauwega will total 250 workers, more than double the number reported Tuesday. Read more in BizTimes Milwaukee's daily roundup of headlines from newspapers across the state at www.biztimes.com/#news.
BizTimes Bubbler: Resort offers big holiday party for small companies
Lake Lawn Resort in Delevan has found a way for businesses to celebrate the holidays without going over budget. The resort has officially launched its "Little Big Christmas Party" program, which invites smaller companies, and those interested in celebrating economically to enjoy a gala with all the holiday glamour, but without the heavy price tag. Read more in this week's BizTimes Bubbler.
Milwaukee Biz Blog: Lame duck FCC could inflict damage on rural Wisconsin
While the nation's eyes have been on results of this year's historic presidential election, the Federal Communications Commission (FCC) plans to vote on changes to the Universal Service Fund (USF) that may dramatically reduce, or in some cases eliminate altogether, the support available today to expand rural cell phone service in Wisconsin, jeopardizing economic development and public safety in smaller communities. Read more in today's Milwaukee Biz Blog by John Rooney.



