At the Daily Breeze business section, we've had some excellent interns who have gone on to great jobs at The Wall Street Journal, The Associated Press and Los Angeles Times.
One of our former interns, Kim Clavert, is editorial director of a new magazine for singles called Singular.
Here's a link to a story on her new publication.
And to all our readers online and in print, happy New Year!
Area home prices slide again
Homes in the Los Angeles metro area saw prices drop 27.9 percent in October, compared to a year earlier, according to a respected national survey released Tuesday.
The Los Angeles area price drop came amid steep declines in other major metro areas nationwide, according to the Standard & Poor's S&P/Case-Shiller Home Price Indices.
The study's 20-city survey showed a record annual price decline of 18 percent for October. The 20-city composite is down 23.4 percent since its peak in mid-2006.
"The bear market continues; home prices are back to their March 2004 levels," David M. Blitzer, chairman of the Index Committee at Standard & Poor's, said in a release.
Read the whole article.
Wells Capital Management's chief investment strategist Jim Paulsen says it'll end in the second half of 2009. Here's his comments:
The ongoing impact of $2 trillion in government stimulus, with other factors such as pent-up consumer demand and returning consumer confidence, will finally lead to a turnaround, and the third quarter of next year will be "better than expected" by many. "It's like you're at a cookout and you're trying and trying to get your charcoal going and you keep squirting on lighter fluid and all of a sudden it goes 'poof!'" Paulsen said.
Scott Anderson, senior economist for Wells Fargo & Company, predicted that the housing sector will lead the way:
"One bright note is that the sector that led the economy into this morass is about to turn the corner, perhaps as soon as this summer, and will start to lead us out."
The LA area's October home prices were down 27.9% from last year. 2008's legacy likely will be more home price declines for 2009.
Home prices plunge record 18 percent in October: S&P
NEW YORK (Reuters) - Prices of U.S. single-family homes in October plunged a record 18.0 percent from a year earlier, according to the Standard & Poor's/Case-Shiller Home Price Indices released on Tuesday that indicated a U.S. housing market in the throes of a deep recession.The composite index of 20 metropolitan areas fell 2.2 percent in October from September. The price drops, both on a year-over-year and month-over-month basis, came in worse than expectations based on a Reuters survey of economists.
S&P said its composite index of 10 metropolitan areas declined 2.1 percent in October from September for a 19.1 percent year-over-year drop, also a record.
This list is courtesy of HeraldNet of Everett, Wash. Of course, for the Daily Breeze circulation area, issues like lost or delayed satellite contracts and layoffs in El Segundo would top the list.
Here's the list:
- 787 Dreamliner delays- Tanker turmoil
- Machinists strike and aerospace jobs in Snohomish County
- Stock and incentive payments
- Production orders
Read the whole story.
This is a worldwide economic slump. So it's no surprise that stores in England are suffering like their American counterparts.
Sale fever 'not enough for shops'The annual stampede to the post-Christmas sales will not save stores from a grim 2009, the head of the British Retail Consortium says.
Thousands of shoppers have flocked take advantage of price cuts of up to 70%.
But the consortium's director-general Stephen Robertson said declining sales, heavy discounts and rising costs meant retail jobs were under threat.
Read the whole story.
Because many cars sold in China are actually built there, this recall does not necessarily affect the US market.
Toyota recalls more than 120,000 cars in ChinaBEIJING (AP) -- Toyota Motor Corp. has issued a recall for more than 120,000 cars in China to fix a problem that could result in loss of steering control, China's quality watchdog said Thursday in the latest piece of bad news for the Japanese automaker.
Tianjin FAW Toyota Motor Co., a joint venture between Toyota and China's FAW Group, will recall 121,930 vehicles beginning Friday, according to a notice on the Web site of the General Administration of Quality Supervision, Inspection and Quarantine.
The notice said the recalled models include Crown and Reiz luxury sedans produced between 2005 and 2006, and Lexus cars produced between 2004 and 2006.
The agency said that manufacturing defects could cause the electric power steering systems to fail.
It was not clear if the same models would be recalled in other countries.
Read the whole article.
Raytheon was hoping for a favorable ruling kind of like the GAO's aerial refueling tanker decision that boosted Boeing's ongoing bid to win that lucrative contract. Such challenges are rare. But since Boeing won its ruling, I wonder if these challenges will become more common.
GAO denies Raytheon protests on US Navy deal
WASHINGTON (Reuters) - The Government Accountability Office has denied three protests filed by Raytheon Co after the U.S. Navy decided to pursue a sole source contract for Aegis combat systems with Lockheed Martin Corp."We are disappointed with the GAO decision," said Raytheon spokesman Jonathan Casle, adding Raytheon remained convinced a competitive process would lead to more affordable products.
Lockheed Martin welcomed the decision and was ready to continue working to meet the Navy's schedule, said company spokesman Ken Ross. The work is expected to be worth billions of dollars over the coming years.
Read the whole article.
If Toyota, whose efficiency and financially stability are legendary in business, is in trouble, then you know things are looking bad for everyone.
Toyota May Cut U.S. Payroll as Unsold Autos Pile Up
(Bloomberg) -- The worst U.S. auto market since the early 1990s may force Toyota Motor Corp. to do something that was once unthinkable: cut its North American payroll.Asia's largest automaker, which hasn't shed workers in 24 years of building cars in the U.S., is exhausting options to trim costs after halting work on a Prius plant in Mississippi, idling a Texas truck factory for 15 weeks and planning to pare U.S. and Canadian output next month.
"If we don't see a rebound by the second half of next year, they'd probably have to consider layoffs," said Haig Stoddard, an analyst at forecaster IHS Global Insight Inc. in Troy, Michigan. "Toyota was expanding to catch up with demand. Now it's got itself stuck with overcapacity for the first time."
Adding to the pressure on North American operations amid a 13 percent slump in U.S. sales will be Toyota's first operating loss in 71 years. Toyota yesterday projected a deficit of 150 billion yen ($1.7 billion) in the year ending March, erasing a forecast for a 600 billion yen profit.
Job cuts can't be ruled out as sales continue to fall, said Jim Wiseman, vice president of external affairs for Toyota's North American production unit.
Read the whole article.
But the Japanese carmaker is still in good shape to weather this storm -- unlike the Detroit Big Three.
At this same time, Toyota's news is a sign of the magnitude of this worldwide economic downturn.
Toyota projects operating loss for year amid slumpNAGOYA, Japan (AP) -- Toyota Motor Corp. projected its first-ever operating loss since it began such reports, acknowledging Monday that its nine-year stretch of global vehicle-sales growth had stalled.
Crashing auto demand, especially in its key U.S. market, and the profit erosion from a surging yen proved too much for Japan's top automaker, which had been booming on the success of its fuel-efficient models, including the Camry sedan and Prius gas-electric hybrid.
Gloom dominated the annual news conference by Toyota's president, who in recent years had outlined ambitious expansion plans. This year, Toyota President Katsuaki Watanabe even refused to give a worldwide vehicle sales goal for 2009.
Read the whole article.
The Madoff case could be bigger than Enron.
Tentacles of Madoff scandal reach far and wideNEW YORK (AP) -- In the nonprofit legal center Steven Schwartz runs from a converted furniture store in Northampton, Mass., the e-mail was very good news: By week's end, a check for $243,000 would be on its way.
The money couldn't come soon enough. The sharp downturn in the economy had put Schwartz's group -- working to improve treatment of teen offenders with mental illnesses -- under very tight budget pressure. At least the check was a promise he could count on.
By that Thursday, though, events were unfolding 160 miles away that would upend those assumptions and assurances. In a federal courtroom in lower Manhattan, a Wall Street wizard stood before a judge, charged with running a $50 billion fraud that targeted scores of wealthy and powerful investors.
The name of the accused, Bernard L. Madoff, meant nothing to Schwartz and why should it? He'd never heard of the money manager with the beachfront mansion and the 55-foot yacht. They'd certainly never met. There was no reason to think they had anything in common.
Except, it turned out, the money.
Read the whole story.
Can newspapers learn survival strategies from pen makers?
Find out in today's edition of Business Casual.
Note: This will be the last installment of Business Casual until next year. Thanks for reading and happy holidays!
Pentel's black HyperG
Pentel's blue Energel
Space Exploration Technologies, the Hawthorne-based developer of low-cost rockets, named Gwynne Shotwell as president, effective immediately, the company said Thursday.
In her new position, Shotwell will be part of the company's Office of the Chairman and CEO and report to Elon Musk, CEO and chief technology officer.
The company better known as SpaceX achieved its first successful rocket launch in September. The privately-held firm has hundreds of millions of dollars in government and commercial contracts.
Scott A. Anderson, senior economist at Wells Fargo Economics, has the following prediction:
Plunging into the New Year. The U.S. economic outlook has deteriorated rapidly in recent months. I believe we are in the worst recession in the post-war period in terms of both duration and depth. Some highlights from the year ahead:- Another 3.7 million jobs lost,
- an unemployment rate jumping to between 8.5 and 9.0 percent,
- a period of deflation,
- double digit declines in business spending and export growth,
- but a housing market that enters the road to recovery.
With the world economy so weak, it doesn't seem possible to maintain high or even moderate gas prices since fuel consumption has dropped so much.
Crude prices tumble despite record OPEC cutsORAN, Algeria (AP) -- Here's how bad things are for OPEC these days: It announced its largest-ever production cut Wednesday and oil prices promptly slumped to $40 a barrel, the lowest level in more than four years.
Ministers of the 13-nation oil cartel were trying to shock moribund markets into life by slashing output 2.2 million barrels a day, more than double two recent production cuts. "I hope we surprised you," said OPEC President Chakib Khelil when asked whether the move would send prices upward.
Instead the markets yawned and there appeared to be more good news for consumers -- at least for the short term. Although declining gasoline prices have begun to edge up after falling from an average of $4.11 a gallon in July to a low of $1.65 on Friday, analysts believe oil's decline could send them even lower.
Read the full story.
Toyota said Wendnesday that it is collaborating with eBay Motors to allow its car dealers' to market certified used vehicles on the online auction site.
Consumers now can search classified listings on http://www.motors.ebay.com to view the Toyota used cars.
"Dealerships benefit from added exposure of their vehicle inventory while our customers gain another avenue to find the right vehicle," Steve Gallagher, marketing operations manager for Toyota Certified Used Vehicles, said in a statement.
The Exxon Mobil Corp. has agreed to pay a $6.1 million penalty for failing to comply with an agreement to cut pollution from four refineries including the Torrance site.
The Justice Department said Wednesday that it demanded the fine because Exxon Mobil had violated a 2005 consent agreement by not adequately controlling smokestack sulfur emissions at the refineries as it had promised to do.
Most of the penalty was associated with three heaters at Exxon Mobil's Baytown Refinery in Texas. The fine also involved "several minor items" at Exxon Mobil's Torrance, Baton Rouge, La., and Beaumont, Texas, refineries, the company said.
Assistant Attorney General Ronald Tenpas said "the department will not tolerate violation of our consent decrees." Under the consent decree, Exxon Mobil in 2005 paid $7.7 million in civil penalties, and performed $6.7 million worth of environment-related community projects.
The alleged $50 billion ponzi scheme is another hit on our economy.
Madoff Put Under House Arrest as SEC Admits Detection Failure(Bloomberg) -- Bernard Madoff, accused mastermind of a $50 billion investment fraud, was placed under house arrest as pressure mounted on the Securities and Exchange Commission to explain its failure to detect his financial wrongdoing for almost a decade.
Madoff, 70, will be subject to electronic monitoring and a 7 p.m. curfew while his wife, Ruth, today agreed to give up homes in Montauk, New York, and Palm Beach, Florida, if her husband flees. Madoff was arrested Dec. 11 after telling his sons that his firm was "one big lie," the SEC said.
The legal developments came after SEC Chairman Christopher Cox said yesterday that his agency failed to act on "credible, specific" allegations about Madoff dating back to 1999. The Madoff affair will be at the center of planned congressional hearings on the reform of the SEC, said a senior Senate official, speaking on condition of anonymity.
Read the whole story.
The way things are going, this news may be repeated for several more quarters.
Honda slashes profit forecast amid global downturn
TOKYO (AP) -- Japanese automaker Honda slashed its profit forecast for the fiscal year Wednesday and announced that managers will take a 10 percent pay cut amid a global downturn in the auto industry.President Takeo Fukui blamed the revisions on declining demand set off by the U.S. financial crisis and the nose-diving dollar, which recently fell to a 13-year low against the yen.
Japan's second-biggest automaker now expects 185 billion yen ($2.06 billion) in group net profit for the fiscal year ending March 31, 2009. That's less than a third of the 600 billion yen it earned last fiscal year.
Tokyo-based Honda has already twice revised its forecast. In October, it said it expected 485 billion yen in profit.
Read the full story.
Northrop Grumman Corp. unveiled the first of the U.S. Navy's new unmanned combat aircraft Tuesday at a ceremony at the company's Palmdale facility.
The new aircraft is dubbed the X-47B Navy Unmanned Combat Air System. It is the first of two aircraft Northrop will produce for the Navy to demonstrate unmanned combat aircraft operations from the deck of an aircraft carrier.
The Navy awarded the demonstration contract to Northrop in 2007.
The X-47B will undergo subsystem and structural testing in preparation for first flight in fall of next year.
The outrages will probably continue to grow as this case unfolds.
Fund manager in scandal once boasted about profits
WASHINGTON (AP) -- The money manager accused of duping investors in one of Wall Street's biggest Ponzi schemes once boasted to the Securities and Exchange Commission about how much money he earned and formally advised the U.S. government on ways to protect investors from scam artists.Now Bernard Madoff stands accused of being one.
The 70-year-old Madoff (MAY-doff), well respected in the investment community after serving as chairman of the Nasdaq Stock Market, was arrested last week in what prosecutors say was a $50 billion scheme to defraud investors, including the world's big banks, the rich and the famous.
Alleged victims include the family charitable foundation for Sen. Frank Lautenberg, D-N.J.; a trust tied to real estate magnate Mortimer Zuckerman; and a charity of movie director Steven Spielberg. The Wall Street Journal reported DreamWorks Animation SKG Inc. Chief Executive Jeffrey Katzenberg and the foundation of Nobel laureate Elie Wiesel also took hits.
As the scale of the alleged scheme was realized, attention turned quickly to Madoff's connections to Washington regulators responsible for monitoring investment funds like the one Madoff operated. He knew everyone, former SEC chairman Arthur Levitt said in an interview with The Associated Press. Levitt said he did not invest any money with Madoff.
Read the whole story.
I'd say Northrop still has the advantage since their aircraft was picked in the last tanker competition, even though the decision-making process was flawed.
Northrop wants quick, best-value tankerWASHINGTON (Reuters) - The chief executive of Northrop Grumman Corp urged the incoming U.S. administration to revive the stalled procurement of aerial refueling tankers quickly and to base the decision on "best value" rather than lowest price.
Speaking at the Reuters Aerospace and Defense Summit in Washington on Monday, CEO Ron Sugar said Northrop was committed to winning the contract but backing a "low-ball" price would not necessarily be in the best interests of the U.S. military.
Read the whole story.
In addition to last Friday's Business Casual column on the Slinky, you can read the following story about the inventor's wife, who died last month.
Betty James co-founded Slinky firm - OBITUARY : Single mother was inducted into the Toy Industry Hall of Fame in 2001.HOLLIDAYSBURG, Pa. (AP) - Betty James, who co-founded the company that made the Slinky and beat the odds as a single mother in the late 1950s to become a successful executive, died in November. She was 90.
She died Thursday, said a spokeswoman for the Hospital of the University of Pennsylvania in Philadelphia.
In 1945, James and her husband at the time, Richard, founded the company that would later make Slinky , the toy for which she was inducted into the Toy Industry Hall of Fame in 2001.
She took over management of James Industries Inc. 14 years after the company was founded, after her husband joined a cult in Bolivia. Richard James died in 1974.
Initially, James would leave her six children with a caregiver from Sunday through Thursday while she oversaw operations in Philadelphia. But in 1965, she moved the company to her hometown of Hollidaysburg, where it remains today - although it was sold in 1998 to Michigan-based POOF Products Inc.
"She was an icon in the community because of that business," Blair County Commissioner Diane Meling said. "What kid didn't grow up with a Slinky?"
Hundreds of millions of Slinkys have been sold worldwide. James explained the classic toy's success in a 1995 interview.
"I think really it's the simplicity of it," she said. "There's nothing to wind up; it doesn't take batteries. I think also the price helps. More children can play with it than a $40 or $60 toy."
On its Web site, the Hall of Fame praises James for commitment and perseverance that "allowed children the world over the opportunity to relish the ingenuity and pure fun of a Slinky ."
For anyone who hates trial lawyers, this is one example of how the ability to sue serves the common good.
Mattel settles with 39 states over tainted toysNEW YORK (AP) -- Toy maker Mattel Inc. will pay $12 million to 39 states to settle an investigation over Chinese-made lead-tainted toys shipped to the U.S. in 2007, state officials said Monday.
Mattel and its Fisher Price unit recalled more than 21 million Chinese-made toys last year, beginning in August, fearing the items were tainted with lead paint and tiny magnets that children could accidentally swallow.
All the affected toys were pulled off shelves by December 2007.
As part of the agreement, Mattel also agreed to lower the acceptable level of lead in toys shipped to the states to 90 parts per million down from 600 parts per million, which is currently the federal standard.
This item landed in my In Box today. It's worth a read considering the world economic downturn.
Leading Opinion Pages Provide Scant Space to CriticsWashington, D.C. -- In stark contrast to the roiling debate over U.S. trade policy among academics and business and labor groups, the country's leading newspaper opinion pages expressed nearly unanimous support for unfettered free trade, according to a study released today by Media Matters Action Network.
During the past three years -- the period surveyed by Media Matters' researchers -- readers of The New York Times, The Wall Street Journal, and The Washington Post were offered a steady stream of editorials and opinion pieces touting the virtues of trade liberalization and lambasting critics as head-in-the-sand whiners. Of the 302 editorials, columns, and op-eds that focused on trade during this period:
- 82 percent supported the current global trade model without qualifications or proposed non-trade-related strategies to mitigate any negative consequences resulting from free-trade policies.
- Only 7 percent criticized the current global trade model, argued against the ratification of pending trade deals, or suggested a "time-out" in trade negotiations.
- 4 percent supported the current global trade model but expressed reservations about radically opening markets or proposed modifications to existing free-trade agreements such as enforceable environmental or labor standards.
- 8 percent were neutral -- that is, they did not take an identifiable position.
- While all three papers tilted overwhelmingly to the pro-trade position, the most one-sided paper was The Wall Street Journal, which devoted 85 percent of its editorials, columns, and op-eds to promoting the current global trade model, with only 1 percent to criticism.
"With the domestic and global economy in turmoil, few issues are likely to spark a more vibrant and contentious debate than a discussion of trade's impact on U.S. workers and corporations," said Amos Tevelow, a spokesman for Media Matters Action Network. "That the leading newspapers are overwhelmingly lopsided in any direction grossly underserves the public at this time of economic uncertainty."
This could be bigger than Enron.
Is the Madoff Scandal the Story of the Year?by Mick Weinstein
(AP) While all eyes were turned to the Big 3 bailout, another shocking, large-scale fraud case emerged in the finance world Thursday. As the WSJ reported: "Bernard L. Madoff, a former chairman of the Nasdaq Stock Market and a force in Wall Street trading for nearly 50 years, was arrested by federal agents Thursday, a day after his sons turned him in for running what they said their father called 'a giant Ponzi scheme.'"
• Paul Kedrosky finds the allegations "staggering," and provides the key excerpts from the SEC's complaint where Madoff confesses to "paying returns to certain investors out of the principle received from other, different investors." Said Madoff, according to the report: "It's all just one big lie."
• The anonymous fund manager/blogger Cassandra suspected for years that something was wrong with Madoff - it's a fascinating post: "Either he was crooked beyond belief or he was an evil contrapreneurial genius. Who would have thought he was both??!!"
• Michael Panzner quotes fund manager Doug Kass, who believes this could be "the biggest story of the year... it is bigger than Enron, bigger than Boesky and bigger than Tyco. It attacks at the core of investor confidence -- because, if true, and this could happen... investors might think that almost anything imaginable could happen to the money they have entrusted to their fiduciaries."
Read the whole story.
I wonder what prices will be like on Christmas Eve.
Analysts expect more discounts as Christmas nears
MILWAUKEE - The clock is winding down on what could be one of the worst holiday shopping seasons in decades and recession-hit shoppers are finally starting to feel some pressure to spend.But toy stores, electronic outlets and clothing boutiques are also under pressure to get shoppers to loosen their purse strings by offering steep discounts, analysts and retailers say.
There is now just one full shopping weekend left before Christmas in a holiday season marked by recession and consumers worried about their slumping investments, dire economic news and fragile job security.
Traffic rose at stores this past weekend. Analysts said, however, that consumers still were making fewer purchases than last year. Prices were slashed 50, 60 even 70 percent in an effort to turn reluctant window-browsers into buyers.
"The holiday is going to come whether the economy is up or down," said Marshal Cohen, chief industry analyst at market research group NPD Group. "The customers are going to shop. They may be buying less; they may be spending less."
Read the whole story.
We can forget about China pulling the world out of the recession. China is hit as hard as many of countries.
No Relief In China For Boeing, Airbus
(Forbes) Boeing and Airbus can give up any hope that Chinese demand might help offset their global sales slump. The country's aviation industry regulator has advised mainland airlines to cancel or postpone aircraft deliveries in 2009, as carriers struggle with a decline in air travel demand. Clamoring for government handouts, the airlines will listen, though they may have a hard time extracting concessions from suppliers.The Civil Aviation Administration of China released guidelines Wednesday advising airlines to cancel or delay delivery of purchased aircraft in 2009. It also asked airlines to retire old aircraft and said it will not consider any new airline applications until 2010, according to a statement. The regulator encouraged further alliances and consolidation.
Read the whole story.
This story speaks for itself. No need for extra comments from me.
Want to speak to an American when calling customer service? For you, extra price!
(Walletpop.com) Anyone who's ever had a Dell computer knows the company doesn't offer much in the way of customer service. But this takes the cupcake.In response to complaints that calls to customer service end up somewhere in Bangladesh, where the employee may or may not be able to make himself understood, Dell has decided to offer this fantastic new service. The Your Tech Team service promises that when you call tech support, you will get a real live American. For a price.
Read the whole story.
Here's a commentary from CNET:
"Dear Dell: Customer service should be free"
Toyota Motor Sales U.S.A., Inc. will stage the world premiere of the all-new 2010
Toyota Prius at a press conference at the 2009 North American International Auto Show in Detroit.
The new Prius has "a substantially revised Hybrid Synergy Drive system, will deliver improved mileage, improved performance and a host of innovative new features," Toyota said.
Barack Obama may be right, things will get worse before they get better.
Foreclosure Storm Will Hit U.S. in '09 Amid Job Loss
Dec. 11 (Bloomberg) -- U.S. foreclosure filings climbed 28 percent in November from a year earlier and a brewing "storm" of new defaults and job losses may force 1 million homeowners from their properties next year, RealtyTrac Inc. said.A total of 259,085 properties got a default notice, were warned of a pending auction or were foreclosed on last month, the seller of default data said in a report today. That's the fewest since June. Filings fell 7 percent from October as state laws and lender programs designed to delay the foreclosure process allowed delinquent borrowers to stay in their homes.
"We're going to see a pretty significant storm next year," Rick Sharga, executive vice president of marketing for Irvine, California-based RealtyTrac, said in an interview. "There are two or three clouds that suggest a pretty heavy downpour."
Read the whole story.
With the holiday shopping season in full swing, I tip my hat to the most unlikely success story in the toy world.
Read the whole Business Casual column.
Toyota may be the top Japanese brand and soon-to-be the top world brand, but Honda is a scrappy company.
Survey: Honda grabs customer-retention title from Toyota(Automotive News) Honda has overtaken Toyota as the brand that does the best job of keeping U.S. customers.
A total of 64.7 percent of Honda buyers came back to the marque, according to the 2008 Customer Retention Study released today by J.D. Power and Associates. Toyota placed second, followed by its Lexus luxury division, Mercedes-Benz and BMW.
"Honda's reputation for creating safe vehicles with high resale value has been instrumental in retaining owners," said Debbie Ortuno, product research and analysis manager at J.D. Power, in a statement.
Read the whole story.
It's about the Slinky... and I don't hold back.
Alexis C. Livanos, president of Redondo Beach-based Northrop Grumman Space Technology, was honored with a UCLA management award, the company said Thursday.
Livanos was selected as the 2008 recipient of the UCLA Anderson IS Associates Executive Leadership award, a recognition given each year by a professional partnership between UCLA's Anderson School of Management and corporate and government leaders.
The award recognizes senior executives in Southern California for their work driving information technology within their corporation.
One of the few bright spots in this terrible economy.
Aerospace sales to growAmerica's aerospace industry is on pace to reach $204 billion in sales for 2008, an influential trade group said Wednesday.
This year's sales are expected to surpass last year's figure by 2.1 percent, "a lower rate than in recent years, but a record sales figure for the industry for the fifth consecutive year," according to a report by Arlington, Va.-based Aerospace Industries Association.
Aerospace is a critical industry for the South Bay, which has thousands of people designing and building satellites, radar systems, aircraft sections and smaller components.
Read the whole story.
Carson-based aerospace contractor Ducommun Inc. said Wednesday that one of its subsidiaries won a contract potentially worth more than $102 million.
The comany's Ducommun Technologies Inc. subsidiary will manufacture integrate radar racks and electro-mechanical enclosures for hte F/A-18 and the F-15.
Raytheon Co. awarded the contract to Ducommun. Contract work will occur through 2020 at Ducommun's Phoenix, Ariz., facility.
I heard the fight wasn't that exciting bc De La Hoya was completely outgunned. But all those paying viewers couldn't have known that before ordering the fight.
De La Hoya-Pacquiao generates strong PPV numbers
NEW YORK (AP) - Boxing and the economy may both be struggling, but Oscar De La Hoya and Manny Pacquiao proved the biggest fights can still create a buzz.
Pacquiao's complete domination of De La Hoya last Saturday night at the MGM Grand Garden in Las Vegas generated about 1.25 million pay-per-view buys, according to numbers released Wednesday by HBO. It's only the fourth time a non-heavyweight bout reached at least 1 million, and De La Hoya has been involved in all of them.The pay-per-view take generated about $70 million in revenue, HBO said, making it the most successful pay-per-view event in 2008. It was helped by a four-part "24-7" reality show that gave viewers behind-the-scenes access to both fighters leading up to the bout.
"Boxing fans across America showed tremendous support for this event and we're pleased that they tuned in," Mark Taffet of HBO Pay-Per-View said.The MGM Grand Garden was packed, with an announced attendance of just over 15,000.
Considered the top pound-for-pound boxer and a hero in his native Philippines, Pacquiao (48-3-2, 36 KOs) moved up two weight divisions to fight at welterweight. The one-sided bout was stopped after the eighth round when, with the fighter bruised and swollen, De La Hoya's corner threw in the towel.
Freezing hiring and most capital projects seems mild compared to what companies in other industries are doing to cope with the recession.
(AP) DirecTV Group Inc. said Tuesday that while it remains bullish about 2009, hiring will be frozen and all but the most critical capital projects will be suspended as visibility on the economy remains poor.The nation's largest satellite TV provider also has beefed up some promotions and plans to raise rates for next year.
Still, the El Segundo, Calif.-based company said the slowing economy hasn't made much of a dent in its business thus far. DirecTV expects fourth-quarter and full-year financial results to show an increase over 2007 and next year's subscriber rolls to grow.
"Despite the slowing economy, we remain quite bullish about 2009 to date. The economy has not had a material impact on our business," said Jonathan Rubin, senior vice president of financial planning and investor relations, at the 36th Annual UBS Global Media and Communications Conference in New York.
DirecTV's partnership with AT&T Inc. to resell each other's services in bundled packages next year should bring in additional subscribers, he said.
Rubin noted that DirecTV ended the third-quarter with net debt of less than $3 billion.
"If things get really bad, we suspect we might be hurt less than others due to our tight credit policies," he said.
DirecTV's strategy has been to go after customers with better credit histories who would rather have a good TV experience than cheap rates. These customers tend to be more loyal and buy more services.
Rubin said recent pay-TV subscriber gains by phone companies have come from cable operators and Dish Network Corp. Dish, unlike DirecTV, has pursued a strategy of going after cost-conscious customers and recently began ramping up its HD offerings.
Phone companies compete "based on price and saving money. DirecTV's message is on offering a superior TV experience and much less on price," Rubin said.
While there were competing claims about which pay-TV operator has the most high-definition content, Rubin said DirecTV remains "the clear leader and by a wide margin" with over 130 HD channels.
The company plans to continue to press its HD offerings, since over the next three years about 40 million U.S. households are expected to sign up for HD.
A key strategy for the company is offering plenty of sports in HD, such as its popular and premium-priced NFL Sunday Ticket.
Toyota is launching a high school marketing competitiong for the youth-oriented Scion.
Students will be asked to come up with original marketing concepts for the Scion.
Registered student teams will compete in the spring for a chance to win up to
$5,000 worth of school supplies.
Lee Iacocca says no. But the public wants blood spilled in return for a bailout and Washington may offer up the heads of the Detroit Big Three CEOs.
Iacocca says US auto execs shouldn't be oustedDETROIT (AP) -- Lee Iacocca, the man who led Chrysler through a government bailout in the late 1970s, says the CEOs of Detroit's automakers should not be forced to quit as a condition of getting government loans.
Iacocca, Chrysler's retired chairman and chief executive, said in a statement Tuesday that now is not the time to make executive changes, as suggested by Senate Banking Committee Chairman Chris Dodd, D-Conn.
"Having been there, I do not agree with the sentiment now coming out of Congress that the management should be changed as a condition of granting loans to the Detroit automakers," Iacocca said. "You don't change coaches in the middle of a game, especially when things are so volatile."
He added that the auto industry has been hit by an unpredictable series of events beyond its control.
Read the whole story.
Japanese companies are not immune to the worldwide recession.
Sony to cut 8,000 jobs amid global downturnTOKYO (AP) -- Sony is slashing 8,000 jobs, or 4 percent of its global work force, aiming to cut costs by $1.1 billion a year as an economic downturn and a stronger yen batter profits at the Japanese electronics maker.
Sony Corp., which has 185,000 employees worldwide, said Tuesday it will complete the job cuts -- all in the electronics sector -- by the end of March 2010.
The company will close several plants, including one in Dax, France, cut investment in electronics and outsource some work. The moves will deliver more than 100 billion yen ($1.1 billion) in savings a year by March 2010, the company said.
The global financial crisis is hitting the U.S., European, Japanese and emerging nations' economies, said Senior Vice President Naofumi Hara.
"Now we are all facing a recession together," he said. "It is impossible to predict how much longer the situation will last."
Dow Chemical Co. announced Monday that it would slash 5,000 full-time jobs -- about 11 percent of its global workforce -- close 20 facilities in high-cost locations and temporarily idle about 180 plants as a major cost-cutting effort in response to the weakening worldwide economy.
Midland, Mich.-based Dow did not say which plants would be affected. However, the company's downsizing plans will have limited, if any, impact on its operations in Torrance, a company spokesman said.
Dow, which directly or indirectly employs about 80 people at two Torrance locations, previously had planned to close or sell most of its South Bay operations, spokesman Randy Fischback said.
Dow employs 55 people at a site at 305 Crenshaw Blvd., one of the largest plastics production facilities in the Western United States.
Twenty employees will lose their jobs when the Styrofome plant there closed on Aug. 1 of next year, as previously scheduled, Fischback said.
Another 35 employees work at the Crenshaw location as part of a 50-50 joint venture with Chevron Phillips Chemical. The joint venture, known as American Styrenics, was effective on May 1 of this year. That business makes polystyrene, one of the most widely used forms of plastics.
It is unclear how Monday's announcement will affect this joint venture, Fischback said.
During the Crenshaw Boulevard operation's heyday in the 1980s, it employed about 120 people.
Dow's other Torrance location , at 19206 Hawthorne Blvd., is for sale, Fischback said.
Torrance UCAR Emulsion Systems International employs about 25 people, who make latex used in paint. That plant is owned by Union Carbide Corp., which is a wholly-owned subsidiary of Dow.
Earlier this year, Dow said it intended to sell that Torrance business.
"We have prospective buyers," Fischback said.
Even without Monday's announcement, Dow will soon only have its joint venture left in the South Bay.
"Next year, only American Styrenics will be there," Fischback said.
No surprise here.
NEW YORK (AP) -- Consumers hungry for cheap meals boosted worldwide sales at McDonald's Corp.'s established locations by 7.7 percent in November, more proof of how the fast-food leader is thriving in a downturn that has eaten into sales at its competitors.Even recession-weary consumers in the U.S. were enticed by the Golden Arches during the month. U.S. same-store sales -- or sales at locations open at least a year -- rose 4.5 percent from the same month a year earlier, the company said Monday.
The Oak Brook, Ill.-based chain said the increase came from strong sales of breakfast items, chicken sandwiches and the chain's value menu options. It comes even as U.S. consumers increasingly opt for eating at home to conserve cash.
The Aerospace Industries Association, the influential Arlington, Va.-based trade group, named Robert J. Stevens of Lockheed Martin Corp. as its chairman for 2009.
Stevens, Lockheed Martin's chairman, president and CEO, succeeds Clayton M. Jones, chairman, president and CEO of Rockwell Collins. Scott C. Donnelly, executive vice president and chief operating officer of Textron Inc., was elected AIA's vice chairman.
They were elected by AIA's board of governors, which includes Century City-based Northrop Grumman Corp. chairman and CEO Ronald D. Sugar and Carson-based Ducommun Inc. chairman and CEO Joseph C. Berenato.
This should be expected since the economy is so bad. But Toyota is in such a dominant industry position that the company will bounce back full of profit after the downturn is over.
Toyota Expands Shutdowns of U.S., Canada Factories Amid Slump
Dec. 5 (Bloomberg) -- Toyota Motor Corp., a day after opening its seventh North American auto assembly plant, said it plans to further reduce production at factories in the U.S. and Canada as sales slow.The largest Japanese carmaker is eliminating nine days of output by extending an annual holiday shutdown of its Georgetown, Kentucky, facility and closing the location two additional days in January, Mike Goss, a spokesman, said today in an interview. Holiday shutdowns are also extended at the plant in Fremont, California, that Toyota shares with General Motors Corp. and at plants in Cambridge and Woodstock, Ontario, the company said.
"This is related to inventory being too high," Goss said. "We want to try to avoid having to do a longer shutdown."
Read the whole story.
Less economic activity and consumption means less waste, which presumably is a good thing.
Bottom drops out of recycling industry(AP) CHARLESTON, W.Va. - Norm Steenstra's budgeting worries mount with each new load of cardboard, aluminum cans and plastics jugs dumped at West Virginia's largest county recycling center.
Faced with a dramatic slump in the recycling market, the director of the Kanawha County Solid Waste Authority has cut 20 of his 24 employees' work week to four days from five, shuttered six of the authority's drop-off stations and is urging residents to hoard their recyclables after informing municipalities with curbside recycling programs that the center will accept only paper until further notice.
"The market is just not there anymore," Steenstra said.
Just months after riding an incredible high, the recycling market has tanked almost in lockstep with the global economic meltdown. As consumer demand for autos, appliances and new homes dropped, so did the steel and pulp mills' demand for scrap, paper and other recyclables.
Read the whole story.
It's a mixed blessing. The economy has to continue to tank for gas prices to get that low.
Return to $1 gas? Energy prices evaporate
COLUMBUS, Ohio - Oil prices hit four-year lows Friday as employers cut the highest number of jobs in 34 years. The continuing decline in prices is so dramatic and so sudden that it is raising the prospect that gas prices could soon fall below $1 a gallon.The worst jobs data in 34 years on Friday just added more fuel to the deepening global recession as U.S. employers slashed a far worse-than-expected 533,000 jobs in November and the unemployment rate rose to a 15-year high of 6.7 percent.
A gallon of gasoline can be had for 50 cents less than it cost just last month, and people are starting to talk about $1 gas.
Read the whole story.
But Toyota is far from the hardships of the Detroit Big Three.
The Downturn Makes Toyota Discount Desperately, Too(Business Week) How do you know the auto industry is really in dire straits? When even mighty Toyota Motor is having trouble.
Read the whole story.
Today's At Work profile.
SHOE BUSINESS
Kristiana Rada enjoys an active lifestyle of skateboarding and snowboarding. So it makes sense that she also designs shoes for other women and girls who enjoy action sports.
Read the whole story.
Today's Business Casual column.
I am not sure how to say this without offending half the world's people.
Read the whole column.
Torrance area coffee roaster Farmer Bros. Co. said Wednesday that it will undergo a major expansion by acquiring Sara Lee Corp.'s U.S. direct-store delivery Foodservice coffee business.
The $45-million deal will nearly double Farmer Bros.'s revenue, extend its reach to all 48 mainland states and make it the nation's largest direct-store delivery business for coffee and related products, the firm said.
Farmer Bros. currently operates in 29 states, selling to restaurants and other institutional customers.
The transaction is expected to close in the first quarter of next year, financed by Farmer Bros. cash and debt.
"This acquisition will allow us to quickly achieve our long-term goals of coast-to-coast market penetration, cost reductions and margin improvements as a result of economies of scale, and improved returns on our invested capital," Farmer Bros. CEO Rocky Laverty said in a statement.
Honda Motor Co. said it will hold the world debut of its new 2009 Honda Insight hybrid at the North American International Auto Show this January in Detroit.
The unveiling of the company's newest hybrid comes amid a massive auto industry downturn that has led six carmakers to pull out of the Detroit event, traditionally North America's top car show.
Nissan, Suzuki, Rolls Royce, Ferrari, Mitsubishi and Land Rover all said they would pass on the Detroit event. Porsche is skipping the show for the second year.
Even Honda plans to scale back at the show with a less extravagant unveiling for the Insight, said Sage Marie, spokesman for Torrance-based American Honda Motor Co. Inc., the car company's U.S. headquarters.
"We're foregoing the traditional unveiling," Marie said. "Nobody's immune (to the industry downturn) and we're looking at ways to be more efficient."
He added that Honda had previously unveiled a concept version of the Insight at the Paris and Los Angeles auto shows. The concept version is very similar to the production model to be displayed at the Detroit show, he added.
NASA on Tuesday tapped Lockheed Martin Corp. to build a constellation of weather satellites, beating out competing bids from Boeing Co. and Northrop Grumman Corp.
The contract calls for two satellites with options for two more, with a total potential value of $1.09 billion.
Boeing's El Segundo satellite facility and Northrop's Redondo Beach-based Space Technology sector had competed separately for the lucrative government contract.
The satellite program is known as Geostationary Operational Environmental Satellite R-Series, or GOES-R.
Data from the satellites will provide real-time weather forecast and early warning information to the public and private sectors.
Read other business news in today's paper.
Here's how eBay did on that busy day:
- The most searched for product on eBay across all categories this Thanksgiving weekend was the Nintendo Wii; more than 13,000 sold.
- PayPal saw a 27 percent increase in online payment volume on Cyber Monday, up 60 percent from Black Friday 2008.
- On Shopping.com, Cyber Monday traffic was 15 percent higher than Black Friday and conversion to sale was 20 percent higher than 2007.
Don't listen to anyone who says the mortgage meltdown was a total surprise. Here's the story below.
Government warned of mortgage meltdownWASHINGTON (AP) -- The Bush administration backed off proposed crackdowns on no-money-down, interest-only mortgages years before the economy collapsed, buckling to pressure from some of the same banks that have now failed. It ignored remarkably prescient warnings that foretold the financial meltdown, according to an Associated Press review of regulatory documents.
"Expect fallout, expect foreclosures, expect horror stories," California mortgage lender Paris Welch wrote to U.S. regulators in January 2006, about one year before the housing implosion cost her a job.
Bowing to aggressive lobbying -- along with assurances from banks that the troubled mortgages were OK -- regulators delayed action for nearly one year. By the time new rules were released late in 2006, the toughest of the proposed provisions were gone and the meltdown was under way.
"These mortgages have been considered more safe and sound for portfolio lenders than many fixed-rate mortgages," David Schneider, home loan president of Washington Mutual, told federal regulators in early 2006. Two years later, WaMu became the largest bank failure in U.S. history.
Read the whole story.
Ford's CEO may get $1 a year in salary, but that doesn't include other benefits including stock options and the rise in Ford shares in his personal stock portfolio if the car company's fortunes turn.
Vowing to earn only $1 a year is a great PR move, but let's not forget that Ford and the other Detroit Big Three are in deep financial trouble not because their executives make a lot of money, but because they didn't offer enough fuel efficient vehicles when gas prices soared.
That and the financial crisis have devastated these car makers. Note that Toyota and Honda also are suffering from the financial crisis, but they're not in danger of going bankrupt because they offer numerous fuel efficient vehicles.
Here's the story.
Ford says CEO will work for $1 to get loans(AP) DETROIT - Ford Motor Co. will tell Congress that it plans to return to a pretax profit or break even in 2011 when the Detroit Three automakers' CEOs appear before lawmakers this week to request $25 billion in government loans.
Ford CEO Alan Mulally said he'll work for $1 per year if the company has to take any government loan money.
After grilling the CEOs at hearings last month, Congressional leaders demanded plans from the automakers by Tuesday to show that they will survive if they get federal funds. The plan Ford submitted said the company will cancel all management employees' 2009 bonuses and will not pay any merit increases for its North American salaried employees next year.
The company also said it will sell its five corporate aircraft. The CEOs of all three Detroit automakers were harshly criticized during last month's hearings for flying to Washington in separate corporate jets.
Mulally said in an interview with The Associated Press on Tuesday that Ford will give much more detail to Congress than it did previously, and the company will emphasize the steps it has taken to cut its labor costs with the United Auto Workers union.
Read the whole story.
Ford's CEO may get $1 a year in salary, but that doesn't include other benefits including stock options and the rise in Ford shares in his personal stock portfolio.
Vowing to earn only $1 a year is a great PR move, but let's not forget that Ford and the other Detroit Big Three are in deep financial trouble, not because their executives make a lot of money, but because they didn't offer enough fuel efficient vehicles when the gas prices soared.
That and the financial crisis have devastated these car makers. Note that Toyota and Honda also are suffering from the financial crisis, but they're not in danger of going bankrupt.
Here's the story.
Ford says CEO will work for $1 to get loans(AP) DETROIT - Ford Motor Co. will tell Congress that it plans to return to a pretax profit or break even in 2011 when the Detroit Three automakers' CEOs appear before lawmakers this week to request $25 billion in government loans.
Ford CEO Alan Mulally said he'll work for $1 per year if the company has to take any government loan money.
After grilling the CEOs at hearings last month, Congressional leaders demanded plans from the automakers by Tuesday to show that they will survive if they get federal funds. The plan Ford submitted said the company will cancel all management employees' 2009 bonuses and will not pay any merit increases for its North American salaried employees next year.
The company also said it will sell its five corporate aircraft. The CEOs of all three Detroit automakers were harshly criticized during last month's hearings for flying to Washington in separate corporate jets.
Mulally said in an interview with The Associated Press on Tuesday that Ford will give much more detail to Congress than it did previously, and the company will emphasize the steps it has taken to cut its labor costs with the United Auto Workers union.
Read the whole story.
An anti-missile airborne laser passed a critical ground test, the program's lead contractor, Boeing Co., said Monday.
Last week, the high-energy laser fired through the Airborne Laser's beam control/fire control system, which steered and focused the beam onto a simulated ballistic-missile target.
The procedure represented the first ground test of the entire weapon system integrated aboard a Boeing 747-400F aircraft.
The laser is scheduled to conduct a missile shootdown demonstration next year. Northrop Grumman Space Technology in Redondo Beach built the high-energy laser for the program.
I'm genuinely surprised.
NBER Makes It Official: Recession Started in December 2007(WSJ) Official recession watchers at the NBER said today that the U.S. is recession, and it began in December 2007. Here is the text of their statement.
The Business Cycle Dating Committee of the National Bureau of Economic Research met by conference call on Friday, November 28. The committee maintains a chronology of the beginning and ending dates (months and quarters) of U.S. recessions. The committee determined that a peak in economic activity occurred in the U.S. economy in December 2007. The peak marks the end of the expansion that began in November 2001 and the beginning of a recession. The expansion lasted 73 months; the previous expansion of the 1990s lasted 120 months.
Do they deserve it? If we deny them the $25 billion loan they seek, will we be cutting off our nose to spite our face?
Autoworker chief pleads for government aidWASHINGTON (AP) -- The head of the United Auto Workers made a public plea Sunday for government help for U.S. carmakers as the Big Three put the final touches on stabilization plans to submit to Congress.
"We cannot afford to see these companies fail," said Ron Gettelfinger, the UAW chief, calling on Congress to approve the aid during a special session the week of Dec. 8.
Gettelfinger said a $25 billion rescue plan for the carmakers is "not a bailout, this is a loan -- a bridge loan -- that will get us through until we can take a longer-term look at exactly what needs to be done in the industry."
Democratic leaders are demanding blueprints from Chrysler LLC, Ford Motor Co. and General Motors Corp. before they will schedule votes on any new federal aid. The plans, due Tuesday, are to be scrutinized at a Senate hearing Wednesday and a House hearing on Friday.
If lawmakers like what they see, Congress may reconvene the following week to consider the auto bailout.
Read the whole story.
