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Manufacturing activity remains strong
August 29, 2014 10:26 AM
Milwaukee-area manufacturing activity continued to grow at a strong, though slightly slower, pace in August.

The Marquette-ISM Report on Manufacturing showed the seasonally adjusted Purchasing Managers Index was at 59.6 in August, down from 63.9 in July.

Any number above 50 indicates growth, while below 50 signals contraction. The PMI has measured above 50 for 10 of the past 12 months.

Respondents in the August survey said:
  • “High beef and pork prices.”
  • “Longer lead time on custom materials.”
  • “Lead time expectations too short.”
  • “Local business conditions, price changes.”
  • “On track to end the year 3 to 4 percent above last year if business continues as it has for the rest of the year.”
New orders, production and employment were all growing on a seasonally adjusted basis, while supplier deliveries were growing more slowly and inventories were declining. On an unadjusted basis, customers’ inventories were declining, while prices, backlog of orders, exports and imports were growing in August.

Regarding the indices, respondents said:
  • “Lower orders from markets.”
  • “Supplier performance measurement and improvement.”
  • “The greatest impact at this time is on-time deliveries from a couple of suppliers. I believe this is a short-term problem.”
  • “The greatest issue today is supplier lead times complicated by transportation and issues at the port.”
  • “We just started marketing more export business.”
  • “I look at the trends and make projections on inventory.”
Blue collar employment was growing on a seasonally adjusted basis, at 60.4, compared to 56.7 in July. And white collar employment was growing more slowly, at 53.7, down from 53.9 in July.

About employment, those surveyed said:
  • “Having a problem finding good quality workers.”
  • “Customer service a problem as well.”
In the six-month outlook on business conditions, 45 percent expected positive conditions for the next six months, 50 percent expect the same conditions and 5 percent expect worse conditions. It’s a more positive reading than in July.

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Zepnick calls on Bucks owners to meet with legislators
August 29, 2014 10:04 AM
State Rep. Josh Zepnick (D-Milwaukee) has written an open letter to Milwaukee Bucks owners Marc Lasry and Wesley Edens, and Marc Marotta, chairman of the BMO Harris Bradley Center board of directors, requesting they meet with state legislators regarding the public options for financing a new arena in downtown Milwaukee.

Zepnick asked that the three meet with state legislators on both sides who represent the Milwaukee County area, since almost every public financing option that has been proposed would require Legislature approval, and suggested the meeting be open to the press and maybe the public.

“The purpose of the meeting would be to debrief lawmakers on the various discussions and proposals being floated over the construction of a new arena and the use of public financing as part of the package,” Zepnick said in his letter. “When the Milwaukee area went through this exercise during the building of Miller Park, it became a rushed and politically toxic process which often marginalized public input.”

He urged Lasry, Edens and Marotta to meet with legislators within the next 60 days, before the November gubernatorial election.

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Public Service Commission releases streetcar decision
August 29, 2014 10:08 AM
The Public Service Commission of Wisconsin has ruled that utilities companies and their ratepayers cannot be held responsible for the costs of utilities relocation for the Milwaukee streetcar project.

The PSC’s final decision, released this morning, says the City of Milwaukee cannot pass the costs of underground utility relocation on to the following utility companies involved in the dispute: Wisconsin Electric Power Co., Wisconsin Gas LLC, American Transmission Co. LLC, Wisconsin Bell Inc., Time Warner Cable LLC, the Wisconsin Cable Communications Association, TW Telecom of Wisconsin l.p., Paetec Communications Inc., McLeodUSA Telecommunications Services LLC or Norlight Telecommunications Inc.

The 2.1-mile streetcar line is expected to cost about $64.6 million, before utilities relocation costs. About $54.9 million in federal grant funds and $9.7 million in TIF district funds would cover the cost.

Some underground utility lines and utility facilities may need to be reinforced or relocated along the streetcar line. The utility companies involved estimated it would cost more than $83 million to move the utilities along the original route.

“The commission concludes that there is no independent basis upon which the city can require the utilities relocate their facilities other than through a municipal regulation as that term is broadly defined,” the decision says. “Any municipal action that would require the (utilities) to pay any part of the relocation costs to accommodate the Streetcar Project is unreasonable.”

But the city recently received federal approval to shift the route, which runs from the Intermodal Station to the lower East Side, to Broadway between St. Paul Avenue and Wells Street to reduce utility relocation costs by $10 million.

And Commissioner Eric Callisto dissented from the final decision because he feels the PSC should not closed its case after the passage of Wisconsin Act 20 in 2013, which essentially made the same decision about utility cost allocation.

In his dissent, he says: “The commission’s action in this proceeding is unnecessary and superfluous to what the Legislature and governor have already accomplished through 2013 Wisconsin Act 20. That law expressly provides that municipal regulations which require utilities to pay the relocation costs associated with urban rail transit projects are unreasonable and voice, by statute.”

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A&A Manufacturing sold to London investment firm
August 29, 2014 11:37 AM
New Berlin-based A&A Manufacturing Co. Inc. has been acquired by London-based international investment manager 3i Group plc and its management.

A&A, which also has a European headquarters in Germany, manufactures niche engineered, mission critical protective equipment that extends equipment life and ensures employee safety, usually in the industrial sector.

3i is investing about $110 million in A&A. The enterprise value of the transaction is $202.5 million. Milwaukee-based Robert W. Baird & Co. Inc. served as an advisor to 3i in the transaction.

A&A has 474 employees worldwide and revenues of about $91 million. It recently acquired two German companies in its market.

According to a release from 3i, A&A will continue to grow in Europe and Asia, both organically and through acquisition, with the help of the 3i network. It will also strengthen its North American position by developing new products and growing into new end markets.

“A&A’s strength lies within its product design capabilities and this is reflected in its market leading position,” said Ken Hanau, managing partner of 3i North America. “It is a great business and we look forward to working with the management team to help accelerate its expansion into international markets.”

“3i was a natural choice of partner for A&A,” said Brian McSharry, chief executive of A&A. “With their international network and local market insight, we will be able to accelerate our international growth strategy and be best placed to service our global customer base.”

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Weekend preview
August 29, 2014 11:41 AM
Too busy working to plan your weekend? We've got you covered with the OnMilwaukee.com Weekend Preview.

Click here for activity suggestions on this Labor Day weekend. OnMilwaukee.com is a media partner of BizTimes Media.

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Milwaukee Biz Blog: Congress must reauthorize Ex-Im Bank
August 29, 2014 11:42 AM
Every poll taken shows that the number one issue on the minds of voters is “jobs and the economy.” Why, then, is a federal program that has helped create thousands of Wisconsin jobs at hundreds of Wisconsin businesses and generated billions in economic activity for the state currently on life support in Washington, D.C.?

Read more in today’s Milwaukee Biz Blog by Steve Baas, vice president of government affairs at the Metropolitan Milwaukee Association of Commerce.

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Morning Headlines: State faces $281 million budget shortfall
August 29, 2014 11:42 AM
Wisconsin tax collections for the past year came in 2 percent short of estimates, the state Department of Revenue reported Thursday, news that won't require immediate emergency action by the Legislature but that puts the state's budget on track to be out of balance next year.

Read more in today’s Wisconsin Morning Headlines.

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Nonprofit Weekly: Next Door to open new school at former Northwestern General Hospital site
August 29, 2014 11:43 AM
Next Door Foundation, Inc., a Milwaukee-based nonprofit early childhood education center, will kick off the school year on Tuesday at its new location at 5310 W. Capitol Drive.

Read more in today’s Nonprofit Weekly.

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Obama to attend Laborfest in Milwaukee Monday
August 28, 2014 09:23 AM
President Barack Obama plans to attend Laborfest in Milwaukee on Monday.

The event, held at Henry Maier Festival Park each Labor Day, is hosted by the Milwaukee Area Labor Council AFL-CIO. Barbara Toles of the Labor Council confirmed Obama will be visiting Laborfest, but details are still being finalized.

“The details about that have not been solidified at this point and we’re waiting for information from the administration,” Toles said.

Obama previously spoke at the event in 2008 and 2010, according to BizTimes media partner WISN 12 News. The event runs from noon to 5 p.m. Monday.

U.S. Rep. Gwen Moore said she was notified of the president's visit Wednesday by the White House.

She said the city has a long history in the contributions of organized labor.

"I am so excited to hear that President Obama is visiting Milwaukee,” Moore said. “He is very popular here, very welcomed. Of course, Monday is Labor Day, and in Milwaukee, we are very proud of our labor traditions, and as you know, there are many labor unions that were born right here in Wisconsin.”

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Wisconsin banks increase lending
August 28, 2014 12:25 PM
Wisconsin’s banks reported combined net income of $472 million through the end of the second quarter, down from $495 million in net income through the end of the second quarter of 2013, according to the Quarterly Banking Profile released today by the Federal Deposit Insurance Corp.

The report included 255 reporting institutions, down from 261 last year. Total assets were $101 billion, up from $97.3 million in the second quarter of 2013. Total deposits were $78.6 million, up from $77.5 million a year ago.

Lending was up, with $69.8 billion in total loans and leases, compared to $67.3 billion in the second quarter of 2013.

"Wisconsin's banks demonstrated their continued support of the state's businesses with a dramatic 12 percent increase in commercial lending over the past year,” said Rose Oswald Poels, president and chief executive officer of the Wisconsin Bankers Association. “The industry marked a strong growth in key categories including overall lending as well as showing a decrease in delinquencies compared to last year. These signs sharply illustrate that Wisconsin's banks continue to play a critical role as economic drivers in supporting businesses and consumers."

Green Bay-based Associated Bank N.A. topped Wisconsin banks, reporting $49.2 million in net income for the quarter. The bank has $25.5 billion in total assets.

Next was Madison-based John Deere Financial f.s.b., with $20.6 million in quarterly net income, followed by Milwaukee-based Northwestern Mutual Wealth Management, with $7 million in net income for the quarter.

Racine-based Johnson Bank, with $7 million, and Baraboo-based The Baraboo National Bank, with $6.2 million, rounded out the top five.

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FIS to close Brown Deer business unit, lay off 32
August 28, 2014 10:06 AM
Jacksonville, Fla.-based FIS plans to close its print and mail business unit in Brown Deer and lay off 32 workers there.

The Brown Deer location is at 4900 W. Brown Deer Road. The company will consolidate its operations within other FIS facilities, according to a WARN notice filed with the state.

Layoffs will begin on Oct. 27 and will happen in phases until the work has been transferred, ending around March 31, 2015.

Affected employees were notified Tuesday. There are 25 hourly and seven salaried positions impacted by the closure, including mail processing clerks, operations analysts and print and insert operators.

None of the employees will have bumping rights. They will be paid all earned wages and agreed upon benefits, as well as severance payments.

FIS, which was formed when Fidelity National Information Services Inc. acquired Brown Deer-based Metavante Technologies Inc. in 2009, is one of the world’s largest providers of banking and payment technologies. It serves more than 14,000 financial institutions and businesses in more than 100 countries.

The company last year closed its Schlitz Park facility in Milwaukee and laid off about 300 employees.

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Koss reports loss, suspends Mexico operations
August 28, 2014 10:41 AM
Milwaukee-based Koss Corp. has reported a fiscal fourth quarter loss of $2.2 million, or 29 cents per share, compared to net income of $4.6 million, or 62 cents per share, in the fourth quarter of 2013.

Sales at the high-fidelity headphone manufacturer were $6.2 million, down from $9.9 million in the same period a year ago.

For the full year, Koss reported a net loss of $5.6 million, or 75 cents per share, compared to net income of $5.4 million, or 74 cents per share, in 2013.

Sales for 2014 were $23.8 million, down 33.3 percent from $35.8 million in 2013.

Koss attributed the losses to increased industry competition and lower export sales, especially in Europe.

The company plans to suspend operations in Mexico until demand picks up for the products made there.

"The company had extremely disappointing results in the past fiscal year and in the quarter ended June 30, 2014," said Michael Koss, president and chief executive officer. "We experienced major setbacks in export sales, particularly in Europe. That drop in sales was significant enough for us to suspend operations in Mexico until sales volumes support enough demand for the products being produced there. In addition, with the changes that need to be made to the Striva Wi-Fi headphone technology, we wrote off the capitalized software costs as well as the related tooling and inventory. These three factors resulted in a significant loss in the fiscal year 2014. Conversely, in the fourth quarter last year, the company recorded the gain from settling the lawsuit with the former auditors."

"Increased competition in our industry has played a role in the setback, but we believe the severe reduction in 2014 export sales was also driven by certain economic challenges, struggling economies, and available credit for retailers and distributors. In addition, one of our largest European distributors reported overstocked inventory levels on a broad range of items on hand, including Koss products," Koss said. "The company still believes in the viability of the Striva Technology but has temporarily suspended its research and development effort in this area until our base business is restored to more profitable levels. Furthermore, we continue to believe that a manufacturing presence in Mexico has future strategic value and may resume production there if key economic factors improve to justify it."

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Scott Whitley named president of Tenth and Blake Beer Co.
August 28, 2014 11:33 AM
MillerCoors Brewing Co. has announced that Scott Whitley will become president and chief beer merchant at Tenth and Blake Beer Co., the craft and import division of Chicago-based MillerCoors LLC.

Tenth and Blake brews some of its beer at Milwaukee’s Tenth Street Brewery.

Whitley, who will assume his new role Oct. 1, succeeds Tom Cardella, who in July announced he will retire at the end of 2014.

Whitley has 33 years of beer industry experience. He has served as president of Coors Distributing Co. in Denver since 2008, where he grew a diverse portfolio of craft and import brands, including leading brands from Blue Moon Brewing Co. and Jacob Leinenkugel Brewing Co.

He previously held a number of senior roles, including vice president of integration planning at MillerCoors, vice president of global strategy at Molson Coors and chief market development officer at Molson Coors Canada. He holds an MBA from the University of Colorado and a bachelor’s from the University of California-Davis.

Other changes to the MillerCoors senior leadership team are as follows:
  • Chris Kozina, who has served as chairman of the Coors Distributing Co. board since 2011 and chief human resources officer of MillerCoors since 2010, will succeed Whitley as president of Coors Distributing Co., effective Oct. 1. He previously served as vice president of insights and chief of staff at MillerCoors, as well as chief information officer at Miller Brewing Company.
  • Michelle Nettles, who has served as senior director of diversity and integrated talent management since 2011, will succeed Kozina as chief human resources officer, also effective Oct. 1. She previously served as senior director of business diversity partnership, and also led a learning initiative at Marquette University. Nettles has also held several senior roles at Miller Brewing Co., including director of strategic human resources projects and assistant general counsel.
  • Pete Marino will become chief public affairs and communications officer, effective Sept. 1, succeeding Nehl Horton, who is leaving MillerCoors to accept a senior role at a publicly listed company. Marino has served as vice president of communications at MillerCoors since 2012. 

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City to begin accepting applications next week for new taxi permits
August 28, 2014 12:07 PM
City of Milwaukee officials will hold a news conference Tuesday morning to kick off the opening of the new taxi cab permit application process.

In July the Common Council approved legislation that eliminated the city’s cap on taxi permits and created a new application process. The legislation was created to enable ride share services like Uber and Lyft to operate legally in the city.

“For the first time in decades, applicants for a public passenger vehicle permit to operate a taxi in Milwaukee will be able to apply without regard for a cap on the number of permits issued, and receive provisional permission to begin operating the day of their application,” Ald. Robert Bauman said. “(The new permit application process) creates a level playing field for all drivers while ensuring the safety and comfort of passengers.”

However, several taxi cab companies filed a lawsuit in federal court against the city this week in an attempt to block the new ordinance. The taxi cab companies are upset that the cap on taxi permits has been lifted and say the new ordinance creates a two-tiered regulatory system that hurts taxi permit holders.

Nevertheless, city officials are moving forward with plans to allow applicants to apply for taxi permits without any cap. Bauman said the first 10 applicants will receive a commemorative gift.

City officials are asking applicants to visit milwaukee.gov/license to prepare their application materials ahead of time.

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Seester’s Mexican Cantina in Pewaukee suffers damage from fire
August 28, 2014 10:43 AM
A fire Wednesday night at Seester’s Mexican Cantina in downtown Pewaukee caused fire, smoke and water damage that will keep the restaurant closed for at least a couple of weeks.

The restaurant is located in the Old Main Street development, built in 2002 by Siepmann Realty in downtown Pewaukee.

A small electrical fire started in Seester’s kitchen, said Siepmann Realty President Jim Siepmann. The cause is yet to be determined, he said. The building’s sprinkler system extinguished the blaze, he said.

“The sprinkler system worked beautifully,” Siepmann said.
Siepmann also praised the work of the Village of Pewaukee Fire Department.

“The fire department was incredible,” he said. “They did a great job. Otherwise we’d be having a whole different discussion.”

Fire fighters opened windows of the building’s upstairs office tenants, mitigating smoke damage. Despite minor smoke damage, those tenants remain open for busiess Siepmann said.

The Chocolate Factory restaurant in the building suffered some smoke and water damage and is closed today, but could open as early as Friday, he said.

A crew from Paul Davis Restoration began work last night to clean up the damage.

“The restoration company got in so quick and did such a great job,” Siepmann said.

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