Citigroup Mixed Signals & None Good

Last April 1 wrote about Citigroup in Do You Work For Citigroup? This was just prior to their announcement of 17,000 and any details were weak at best. As some of the actual layoff decisions have been filtering out, other aspects have surfaced.

From the comments section of The New York Sun Cris Ericson theorizes on the Citigroup situation:

”Didn't some news source write that some Arab Prince shareholder decided that thousands of U.S. jobs should be cut at Citigroup to save shareholders like him money; and what is the relationship between this alleged Arab control of Citigroup now and September 11, 2001, if any?”

“Vice President Cheney's former company allegedly received billions of U.S. taxpayer dollars for no-bid contracts in Iraq and now has recently decided to move to Arab Dubai; are the Arab decision makers the same people as the Arab decision makers allegedly forcing thousands of layoffs of U.S. workers at Citigroup?”

From SchaeffersResearch.com Ian Stansel writes:

“As scheduled, Prince took the microphone at eight o'clock this morning to provide the details of the plan. The bulk of the money-saving will come from the cutting of 17,000 jobs. A majority of these jobs will be "back-office" positions, i.e. not traders, banker, or other employees who directly bring in money. In addition to these 17,000 jobs, another 9,500 positions will be outsourced to locations where the company can pay employees less. Through the job cuts, C aims to reduce expenses by $2.1 billion.”

According to Neil Adler in the Baltimore Business Journal only 270 layoffs will impact the D.C., Maryland and Virginia areas. The #1LoansUSA.com web site reports:

“In Michigan, 200 workers at ABN AMRO Mortgage Group's former headquarters near Ann Arbor will be laid off as the headquarters is converted into a wholesale mortgage operations center, from the Ann Arbor News. The News also reported that Citigroup plans to close two offices in the Detroit area, eliminating another 570 jobs by the end of the year.”

“In Jacksonville, Fla., 550 employees at a customer servicing and call center were told their office will be closed by the end of the year, the Times-Union reported.”

Another side of Citigroup, from The Citigroup Watch on the Inner City Press:

‘Well today I had to deal w/Citi regarding my Pension. I left the organization in May 2003 after spending 14 years there. Remember, prior to working for Citi, I spent 5 yrs w/The Associates Financial Services. (Yes, what an idiot in professional compromise!) Prior to leaving in 5/03, I exercised what options that I could, and confirmed my pension status. I was informed at that time - verbally and in writing - that my tenure at The Associates was grandfathered into my tenure at Citi. I was given statistics regarding my pension income based on my monthly payments at 55 yrs of age (5/2015), and at 65 years of age. Imagine how relieved I was to find that my 190% commitment to this God Awful organization at least left me with a pension plan worth $932 per month if I retired at 55, or $1660 per month if I retired at 65.”

"Well, last year at this time I ordered the same bit of information in order to share it w/a financial person much more savvy at this business than I. I never got around to sharing that information w/him and in the meanwhile I had the info. So today requested said info again. Guess What? Now Citigroup tells me that I was not fully vested at The Associates nor at Citi, and my pension value is now $204 per month at 55, and $463 at 65!”

What’s The Chance Of Congress Passing Tort Reform?

Then Edward’s might have to get bargain-basement haircuts for $200.

From a Cincinnati Business Courier article, by Washington Bureau Chief Kent Hoover, the cost of lawsuits or the measures taken to prevent them is costing Americas small business $98 billion a year.

The article states: “The study tracks damage awards, settlements, legal costs, liability insurance premiums and costs incurred by insurance companies on behalf of policy holders.”

This is from a US Chamber Institute for Legal Reform study based on 2005 data. If you care to take a look at the study click: TORT LIABILITY COSTS FOR SMALL BUSINESS pdf required.

Since attorneys represent 25% to 50% of our state and federal legislators and 100% of our judiciary, the odds of effective tort reform getting passed is fodder for new lawyer jokes.

Companies Hiding Offshoring

Instead of shifting whole divisions overseas, U.S. companies are replacing their American workers in smaller groups. By not filling openings caused through normal attrition and transferring positions, as to allow the disbandment of the divisions destined to be offshored, companies do not have to file with or provide benefits that would be required by U.S, Department of Labor Worker Adjustment and Retraining Notification (WARN) Act.

This also allows companies to stay off the medias radar screen and avoid negative press.

From a Mike Sunnucks article in the The Business Journal of Phoenix:

“U.S. employers are treading carefully these days when it comes to the outsourcing and offshoring of American jobs to India and other foreign markets.”

“Plenty of U.S. businesses are investing in India, either adding or moving jobs to call centers and technology hubs to that south Asia market. But in order to avoid criticism here at home, those companies emphasize that job shifts to India are about building a presence in the world's second-most populous country and leveraging resources in a competitive global marketplace.”

“Instead of shipping 500 U.S. jobs to Bangladore or Chennai all at once and enduring media criticism as well as displaced or anxious American workers, U.S. companies are offshoring in smaller, less obvious steps.”

“That includes looking to see whether positions can be shipped abroad when turnover occurs, and taking such steps with a smaller number of positions or work groups.“

Seagram's Distillery Gives Employees A Hangover

From a Cincinnati Business Courier article by Dan Monk a Senior Staff Reporter, new owners CL Financial Group of Trinidad and Tobago, will cut 270 workers from 160-year old Lawrenceburg, Indiana facility. The remaining staff will be offered reduced wage and benefit packages, union and company officials say.

More lost jobs, reduced wages and sold assets by foreign investors.

Practical Career Training For Ex-Military

U.S. Department of Labor Veterans' Employment and Training Service, through its Transition Assistance Program, has initiated a test pilot program that provides computer training to ex-military. The training allows the person to obtain a certificate in CompTIA A+ and is currently being taught in Jacksonville, Florida.

A good portion of the initial funding for this program has come from the Hewlett-Packard Co., and CompTIA Education Foundation hopes to expand this training to New Horizons Computer Learning Centers across the country as additional funding becomes available.

This is a step in the right direction and we urge every ex-military person to apply. Even though the goal is to provide free training to 200 people per year, if thousands of applicants are submitted, I’ll bet that American tech companies will step up and provide the funding needed to get it done.

Springs Global Not Much Left To Cut

From a Tribune-Times article penned By Business Editor, Woody White, Springs Global will close its two remaining plants in Fort Mill & Lancaster South Carolina. These final layoffs will put 750 out of work leaving U.S. employment at approximately 700 administrative and sales positions.

From the Companies web site:

“Founded in Fort Mill, S.C., as a single mill in 1887, our company evolved into Springs Mills and later Springs Industries, the leading home furnishings supplier in North America…” “…Major home furnishings brands include Wamsutta®, Springmaid®, Artex®, Regal®, and Dundee®.”

“We employ about 20,000 people worldwide and have operations in Argentina, Brazil, Canada, Mexico and the United States. Springs Global is based in Brazil. North American headquarters are in Fort Mill, S.C.”

From The (Rock Hill) Herald by Charles D. Perry:

“At its zenith 20 years ago, the company was the state’s largest private employer, with 17,000 South Carolina workers. A total of 23,500 people worked for the company worldwide.”

Hanesbrands Offshoring Visited

As a followup to the previous article.

From the Wal Mart Watch web site, in February, the Workers’ Rights Consortium released a report documenting problems in the Dominican Republic at the TOS Dominicana textile factory. TOS Dominicana is owned and operated by Hanesbrands Inc. and employs nearly 1,100 workers.

According to the report:

The WRC found substantial, credible evidence that serious violations of domestic law and university codes of conduct have occurred at TOS Dominicana. These violations include the unlawful coercion of workers to sign new employment contracts and complaint waivers reducing workers’ employment rights and benefits, forced and unpaid overtime, failure to pay the legally mandated premium for work at night, verbal harassment and abuse, and the use of a range of illegal means to thwart workers’ efforts to exercise their associational rights.

This is where our jobs have gone.

Hanesbrands Continues Globalization

I recently watched a Fox News interview with two economists, names forgotten but they had very impressive titles, who expressed their opinion that the average American doesn’t get it. With “it” being that sending U.S. jobs overseas is ultimately good for the U.S.

Personally I feel that it’s the “experts” that don’t get it. We are losing millions of better paying jobs and replacing them with lower paying service positions. The experts point to the unemployment at 4.5% as proof positive that globalization is working. I have to wonder what the economic support for their grandkids jobs will be.

I wrote in: Hanesbrands Closes Winston-Salem Plant Laying Off 610, that textile jobs have flowed out of the Carolinas for years. South Carolina had 122,000 textile jobs in 1994 and have lost 75% of those jobs to a current low of 31,000.

H. Martin Lancaster, President of the Carolinas Textile Club is quoted in a 2000 statement:

“With 2 million jobs, textiles are the largest manufacturing sector in the U.S. and contributes more to the Gross Domestic Product than metals automobiles, paper or petroleum production. We are very proud that North Carolina, with almost 150,000 jobs, is the leading textile state in the nation.”

That was 2000. From Duke University in 2005:

“In 1995, there were 2,235 textile and apparel plants in North Carolina employing 252,704 people. By 2005, there had been a 37% decline in the number of plants, to 1,402 plants, and a 61% decrease in employment to 97,525 workers”

In 2006 North Carolina has lost an additional 20,000 textile jobs.

In a statement from N.C. governor Mike Easley:

“A recent study by the American Textile Manufacturers Institute declared that unless action is taken, particularly against textile imports from China, the Chinese share of the U.S. textile and apparel market will rise to more than two-thirds within two years, from a 13 percent share in 2002 to a 71 percent share in 2006. That would result, by 2006, in a loss of 85,000 jobs in North Carolina.”

“Total U.S. textile job losses could reach 630,000 from 2004 to 2006, the Institute study warned, with more than 1,300 American textile plants closing in the next three years.”

Hanesbrands Inc. Press Release:

Hanesbrands Inc. Advances Planned Consolidation and Globalization Strategy to Further Improve Cost Competitiveness

Patriot Express Ignored By MSM

Because of its far reaching implications to millions of Americans, this type of program should have received with a higher level of interest. Could it be that since this program is targeted towards the military that it has received minimal media attention? If this program were targeted towards minority funding, African-Americans or Woman, it would be a headline story with considerable commentary.

Last week the Small Business Administration announced a streamlined loan product, the Patriot Express Pilot Loan Initiative that is based on the SBA Express Program, but with enhanced guarantee and interest rate characteristics.

Another loan program is hardly a devastating news event, but as written about in Bush Abandons Manufacturing, the President and Congress is currently in an anti-business mode. Funding for programs and agencies that aid small business has been cut drastically while taxes and regulatory burdens have increased.

The funding amounts in this program are minimal, not sufficient to allow for a quality Real Estate purchase, it is available to millions of veterans, reservists and their spouses.

I’ve written in Employers Snubbing Reservists & Renewed Call For Reservists Legislation about the dire need for legislative change in the laws regarding reservists. The current law punishes small business and puts a reservist’s application at the bottom of the stack instead of the top, where they belong.

Unfortunately even the SBA Press Release is politically motivated:

"SBA thanks the Presidential Task Force on Returning Global War onTerror Heroes for its guidance and hard work and Veterans Affairs Secretary Jim Nicholson for his devoted leadership,"

Note the typo in their Press Release, they must have been in a hurry.

For information on the program, follow these links: Patriot Express Pilot Loan Initiative & SCORE Web Site

Canada - More Trucking Business Unusual

Southern Ontario is losing 150 manufacturing jobs a day. From the London Free Press:

Thomas Assembly Plant: Cutting about 900 jobs with elimination of a shift.

Accuride wheel rim plant: 253 laid off since last summer.

Siemens: The plant that employed 1,300 in 1995 now has 200. That will sink to 50 by the end of 2009.

Dow Chemical Canada: Sarnia plant will close in 2008, cutting 380 jobs.

Sterling Trucks in St. Thomas: Announced 800 layoffs in 2007.

International Truck in Chatham: Announced 640 layoffs.

Dura Automotive Systems: Stratford auto parts announced closure this year, eliminating 280 jobs.

Hendrickson: Stratford truck parts plant announced layoff of about 150 workers.

Mega-Plas: Auto parts plant will shut in August, eliminating 120 jobs.

Stoughton Trailers LLC Trucking - More Business Unusual

Stoughton Trailers LLC has filed with the Wisconsin Department of Workforce Development of possible layoffs from their three manufacturing plants in Wisconsin. Stoughton employs 1,100 but has not issued any information on the number of layoffs, which plants would affected or when the layoffs will happen.

Auto Truck Transport Corp. - More Trucking Business Unusual

Auto Truck Transport Corp. has laid off 189 from its Dublin, Virginia facility due to the downturn at the Volvo truck manufacturing plant also in Dublin.

They have also laid off 20 in Jacksonville, Florida. There is no info from their numerous other locations.

TRW - Trucking Business Unusual

The layoffs at TRW might be small but is an example of how the 2007 EPA emission standards have affected the entire supply chain of the trucking industry.

From a Dylan McCament article in the Mount Vernon News, TRW has started laying off 160 assembly and machining operations jobs to an undisclosed location. The article states that these jobs are being moved to Georgia.

The Journal & Courier reports that the TRW Lafayette Commercial Steering Division plant in Lafayette has laid off of 25 out of a staff of 270.

Paccar, Peterbilt & Kenworth

Paccar companies Perterbilt Motors Company & Kenworth Truck Company started handing out the first round of pink slips last November. Since the companies refuse to issue specifics, layoff numbers are from leaked information. The companies submit mass layoff notices to the BLS, these numbers are public information if any reporter in the area has the energy to go get them.

Perterbilt Motors Company has plants in Denton, Texas and Madison, Tennessee listed on their web site. But 4News in Nashville wrote that they laid off 154, just after the first of the year, at a plant in LaVergne. Tenn. 4News also reported that 667 layoffs took place at their Madison, Tenn. Plant. The Denton Record-Chronicle reported that the Denton, Texas plant had lay offs in early February.

Kenworth Truck Company has plants in Ste.Therese, Quebec, Chillicothe, Ohio and Renton, Washington. The best layoff information I have come across is also from the 4News article and states that the Madison, Tenn. And Denton, Texas facilities are cutting down to one shift. No lay off numbers have been available.

Finally, some good news.

In a Paccar Inc. May 11, Press Release Kenworth is building a $400 million powertrain plant in Columbus, Miss. This plant should be ready for the sales boost of 2009 trucks, that truck manufacturers anticipate to take place just prior to the next round of EPA emission standards that become effective in 2010.

From the Press Release:

“…shared Jim Cardillo, executive vice president. "The facility will initially hire approximately two hundred employees and it is anticipated that there will be five hundred employees as production increases over time. Additional employment opportunities, which will generate significant economic benefits to the region, will be created during the construction phase and as a result of suppliers expanding their capacity in the area," added Cardillo.”

Freightliner The Long Haul From North Carolina To Mexico

Last week Freightliner LLC announced that they will be cutting 1,528 production workers at its Cleveland, N.C. facility in July if orders don’t pick up by June 10th. This follows a March layoff of 1,180. The plant employs 4,000 and these layoffs represent 68% of the plants production workers. Also, another 478 people from its Mount Holly plant has been put on a temporary layoff.

From a Charlotte Business Journal article (no author):

“The company said truck orders had dropped dramatically after the imposition of federal diesel-emissions standards and price increases for technology needed to deal with those changes.”

A Steve Huffman article, in the Salisbury Post, covers the walkout at the Cleveland plant on April 2.

“Union members had been threatening since last week to strike, though Whiteside said such action was "a last resort for fair bargaining." He said the strike was necessitated because company officials refused Monday to meet with union leaders.”

"This isn't about money," said Robert Whiteside, chairman of the bargaining committee for United Auto Workers Local 3520. "This is about health and safety. We're fighting for a way of life."

“Freightliner had previously announced that 1,180 workers would be laid off at the Cleveland plant by Sunday. The layoffs are based on seniority, with those hired after May 19, 2004, losing their positions.”

From a Holly Fesperman Lee article:

“According to Cindy Harris, a 17-year Freighliner employee, company officals sent out an automated message Monday night telling employees to come to work as usual Tuesday.”

“According to Harris, first shift workers wouldn't walk off the job because "they're threatening to fire the people if they walk out."

“David Crisco, barganing committee member, said he and other committee members went inside the plant to try to get word to first-shift workers that they couldn't be fired for walking off the job.”

“As union leaders walked through the plant, managers spotted them, told each member he was fired and escorted the men out of the plant's gates, Crisco said.”

"They're being held in there by fear...If they knew the truth, they'd be out here," he said.

How does the new plant being built in Mexico enter into this? Since management does not feel that business for new trucks will pick up until 2009, just prior to when the new 2010 EPA standards go into effect, their new $300 million plant being built in Saltillo, Mexico will be ready. This does not bode well for the prospects of the workers at the Cleveland plant being recalled.

Of course one has nothing to do with the other.

From a December 20, 2006 Freightliner LLC Press Release:

“…We expect another surge in customer demand in 2009 prior to the next round of EPA emissions regulations, and the construction of this new plant will ensure that we are fully prepared.”

“The Saltillo plant is the second Freightliner LLC manufacturing facility to be located in Mexico, joining the Santiago Tianguistenco plant which produces Freightliner-branded heavy- and medium-duty trucks…”

The writing is on the wall for the entire truck industry:

“…Five major U.S.-based OEM’s now have Mexican manufacturing capability, including Freightliner LLC,” said Roger Nielsen, Chief Operating Officer. “DaimlerChrysler has had excellent success in recent years with quality, cost and efficiency through our Mexican operations, and we fully expect the new plant in Saltillo to set benchmark standards for DaimlerChrysler Truck Group manufacturing facilities worldwide.”

North Carolina isn’t alone, Brent Hunsberger tried to insert a little humor (very little) into his OregonLive.com article:

“The last Freightliner-branded commercial truck rolled off the production line in Portland Thursday night, catapulting 750 workers onto the unemployment rolls and into a job market that's suddenly cooler than a parked sleeper rig at dawn.”

NetWolves Corp. On The Endangered Species Lists

Did the news media really cause NetWolves Corp. to file Chapter 11?

According to a Michael Hinman article in the Tampa Bay Business Journal Scott Foote CEO of NetWolves Corp.:

“In a press announcement about the bankruptcy, Foote blamed the need to file for bankruptcy on "certain press reports" that he said "inaccurately attributed statements to the company about continued operations." Because of that, Foote said, some of NetWolves' (OTC BB: WOLV) vendors tightened their credit terms and began to demand payment on accounts.”

If the articles printed such substantive inaccuracies, then liability should be attached and they could be argued to a positive outcome.

Nowhere on the NetWolves web site do the list any of their facilities or staffing.

From the article:

“In reporting its third quarter results to the SEC last week, the company's 10QSB filing said, "The company's main source of liquidity has been equity and debt financing, which has been used to fund continuing losses from operating activities. Based on the company's cash position of approximately [$800,000], and further taking into account ongoing litigation expenses as well as the current maturity dates of the company's long-term debt, the company believes that they may not have sufficient cash to meet the company's funding needs through March 31, 2008 ...”

Sanmina-SCI Corp. - There Is More To The Story

This was an article that I wasn’t going to write, but Sanmina was an unknown company too me, and being ranked 203rd on the Forbes 500 list, I wanted to do some back up research. When I started to dig a little, a story popped out.

From a Mike Sunnucks article in the Phoenix Business Journal, Sanmina-SCI Corp. will be closing their plant in Phoenix this summer, releasing 602 staffers.

The San Jose Business Journal printed a notice on May 15, that Sanmina would be closing a plant in Texas, putting 87 workers out of work. There was no indication of which plant or when this will happen but Sanmina has plants in Allen, Austin & Plano Texas.

My-Ly Nguyen wrote for the Gannett News Service that Sanmina laid off 100 workers at its Owego, N.Y. facility on Friday April 13. This was after a lay off of about 90 people a month earlier.

Both writers indicated that requests for information were cold shouldered.

The company has more than 40,000 workers and their world-wide operations are on this list.

But these lay off events have received little attention while the “street” seems to be more interested in an options back-dating scandal.

From a Huntsville Times article by Gina Hannah written back in December:

“In a 370-page report filed with federal regulators, the company listed a number of problems in the way it recorded certain transactions during the past several years, including the backdating of stock options.”

“Sanmina-SCI said backdating practices will cost the company about $224 million.”

Other accounting problems listed in the report include:

“In fiscal 2004 and 2005, outstanding intercompany transactions between Sanmina-SCI's U.S. holdings and foreign divisions were not recorded as taxable income as required by federal law. The adjustment increased the company's tax liability to $27.4 million.”

“Sanmina-SCI said it had overstated goodwill, or intangible assets, by approximately $28.8 million as a result of understating the value of the stock awards exchanged in connection with its acquisition of SCI Systems in 2001.”

“The company said a fixed-asset reserve account was overstated by $27.4 million in 2001.”

That adds up to more than $300 million in accounting boo-boos. Not to mention the shareholder lawsuits filed against the company and a handful of execs.

In March CALPERS, the huge pension fund run for government employees in California, listed Sanmina as one of 11 companies in desperate need of better corporate governance.

More troubles for Sanmina. From a May 4 San Jose Business Journal article:

“U.S. Internal Revenue Service and the Labor Department have joined the organizations looking into the company's stock-option granting procedures.”

Other agencies have shown an interest:

“Sanmina-SCI had received informal requests for documents and other information from the SEC and a grand jury subpoena from the U.S. Attorney.”

“The company also said it is a party "to certain legal proceedings that have arisen in the ordinary course of our business.”

Maybe ordinary to their business.

Discovery Closing All Stores

Discovery Communications Inc. will be closing all of its retail units by September, this will result in the laying off of approximately 1,000 people.

From a Neil Adler article in the Washington Business Journal, Discovery has decided to market their considerable product line through partnerships with established retail chains. From the article:

"By eliminating our owned and operated brick-and-mortar storefronts, which are cost-intensive and complicated businesses, Discovery can focus its efforts on high-growth e-commerce and licensing operations, said David Zaslav, Discovery's president and CEO,”

From a previous article, Discovery Employees Discover Pink Slips, Discovery has recently laid off 11% of their Silver Springs, DC operations, that was 200 people on April 16 and 80 in December.

Politics In Maryland Cost Residents $5,300 Per Year

The Washington DC Examiner Newspaper (no author given) printed an interesting article concerning a $1 ½ billion shortfall in the states budget.

The article says that Maryland has a current budget of $30 billion and Gov. Martin O’Malley has ordered legislators to cut $200 million from it. The headlines showing that the Gov. has ordered $200 mil. in cuts looks like he is on top of things and is acting responsibly, when in fact, these cuts represent only 13% of the problem.

The estimated 2005 population of Maryland is 5,600,388, and the State will spend over $5,300 for each resident. My question is; what are you getting for that $5,300?

The GAO Should Apply GAAP At FNM

Back in April I wrote, The Mess Won’t Stop At Fannie Mae, in that article Fannie Mae announced that it would be trimming $200 million from its annual operating budget. After hiring an extra 1,000 staff to sort out the accounting mess that the Office of Federal Housing Enterprise Oversight ordered to be done, it looked like they were back on track. After all, why announce such drastic cuts if the job is not completed.

Washington Business Journal article by Neil Adler Fannie Mea didn’t file their 2005 financial report with the Securities and Exchange Commission until May, 2 and has until next Feb. 29, 2008 to submit the annual report for 2006.

If a public company handled their accounting this way, heads would roll and they would face strong regulatory discipline.

IBM An Extreme View On Offshoring

The whole idea the IBM could cut its U.S. staffing level by 100,000 is not unbelievable.

Over at THE PULPIT, Robert X. Cringely penned his controversial view, that IBM is committed to building out its staff in India. He suggests that during that process IBM could be dumping as many as 150,000 jobs from the U.S. and other higher wage locations.

Mr. Cringely came to this number believing that a system wide reduction of 20,000, out of a staff of 355,000, would be more than reasonable. Add to that the offshoring of a good portion of their support positions it India, where wages are 25% to 30% of what they currently pay, and the U.S. could see a reduction of 100,000 jobs out of their current employment level of 135,000.

This article was posted May 5, and has received over 1,000 comments, quite a few from IBM staffers. One of these comments stated the IBM has dedicated $6 billion to the development of an infrastructure in India.

As I wrote in, How Fortune 500 Companies Can Save $58 Billion a Year -- Just Send 1.5 Million More Jobs Overseas:

“A Hackett Group research study that as much as $58 billion a year can be saved, by America’s fortune 500 companies, by sending back-of-the-house and administration functions overseas.”

The whole idea the IBM could cut its U.S. staffing level by 100,000 is not unbelievable.

Jerry Falwell Quiet Respect

Today Rev. Jerry Falwell passed away. I wasn't a follower, nor did I agree with his more controversial opinions. I find myself with respect for his continuing persistence towards improving the lives of all of us. He believed in and fought for family unity, education and living a clean healthy life. The media types will pound us with some of his extreme comments, when in fact, we need more like him.

Imation Putting The Hurt To Wahpeton

Imation is closing its diskette manufacturing plant at Wahpeton, NO. The plant employs 390 people in the Twin Cities area which includes Wahpeton , NO and Breckenridge, MN. According to the Wahpeton City web site the Twin Cities area has a total population of approx. 13,000 and the lay offs represent 3%.

At the plants peak, when it was operated by its previous owner 3M, it had a staff of 900. Imation purchased this 3M division in 2002 and has been cutting staff, from a high of 800 in 2002 to its present employment of 390.

The Imation plant is featured on the Economic Development Section of the Wahpeton City web site and the picture above is copied from there.

From the Daily News article (no author given) the company will offer all impacted employees Imation’s standard separation package:

“The package included a minimum of 60 days notice or 60 days pay in lieu of notice or a severance in exchange for signing a general release of claims. The severance package includes one week of base pay for each year of credited service (with a minimum of four weeks and a maximum of 26 weeks); an additional cash payment that can be used for payment of COBRA premiums; outplacement assistance; and an automatic vesting of Cash Balance Pension Plan.”

Also from the Daily News article, Breckenridge Mayor Cliff Barth puts a positive spin to the announcement at a City Council meeting:

“That’s a huge hit for a small community,… The best news is they are going to try and fill those buildings and businesses.”

But don’t feel too sad for Imation, from their press releases on April 19, 2007:

“Imation Reports Q1 2007 Revenue of $421.9 Million, up 25.9%”

Also released on April 19:

“Imation Board Authorizes Repurchase of up to 5 Million Shares of Common Stock”

That plant would make a great home for some of these businesses that are sending jobs overseas.

New Century – Case In Point

Since the downfall of New Century is practically history I wasn’t going to write this article, but after reading the Companies History from their web site there were several things that need to be said.

New Century is a classic example of the ideal modern business. This is what everyone dreams of; making outrageous money moving other people’s money. Yes, they brought home ownership to difficult to finance individuals, but in the process they became one of the preferred vehicles for property speculation. They had to be so leveraged out that a relatively small dip in housing, not commercial real estate, brought the company down.

This was a young company that made its first loan in 1996 and went public in 1997.

From the Company History section of their web site:

“As the company has grown, so has recognition of its success. The company was named to FORTUNE Magazine’s list of “FORTUNE’s 100 Fastest Growing Companies” – ranking 12th in 2003 and third in 2004. In 2005, it ranked third on The Wall Street Journal’s “Top Guns” list of the best performing companies…”

“…New Century kicked off the “New Shade of Blue Chip” brand identity campaign in February 2005, with the message that the company wants to be seen as a modern blue chip company, while striving to become a world-class mortgage company. New Century’s goal is to become one of the top 10 U.S. mortgage companies for volume and one of the top five for revenue.”

“We’ve achieved a lot in our first 10 years,” says Brad Morrice, Vice Chairman, President and COO, New Century Financial Corporation, “but as I like to say, for New Century the best is yet to come!”

From the New Century web site the company peaked last year with 6,800 employees. And from a Los Angeles Business from bizjournals article they are currently laying off 2,000 more leaving only a 250 “corporate team” to finish burying the company.

Our systems award the “fast-buck” and puts up road blocks to the slow solid growth type businesses. One look at the current budget before Congress shows draconian cuts in the programs that aid small business while heaping on additional taxes and regulation. Common sense just isn’t popular in our financial and regulatory circles.

Does Low Wages Equal Strong Management

James O'Toole and Edward E. Lawler III penned an interesting article on Forbes.com. They contend that just the opposite is true; that lower paid staff is indicative of weaker management. From the article:

“In almost all industries, productive, higher-paid workers can more than cover the costs of their salaries and benefits, if they are managed appropriately.”

It seems that their article was inspired by the outrageous actions by Circuit City management. As posted in, Circuit City Is Now Hiring – Cheap:

“This just demonstrates that Circuit City is no longer capable of managing a higher quality sales staff and wants to become a K-Mart style retailer.”

For the last four years American business has been growing and expanding, with over-all profits up over 100%. Now that growth has slowed, mangers are looking to cut staffing to demonstrate their ability to maintain bottom line growth. This is only a short term solution and the problem remains on how to win the race, but with fewer and lower quality horses.

Intel Chipping Away Another 1,000

From the Observer and written By Tom Treweek, Intel is laying off about 21 %, or 1,000 people, at its Sandoval County “campus” in New Mexico.

As written about in; Intel Investing 2.5B In New Plant - In China. Intel is investing $1 billion to retool their fab11x to produce 45 nanometer chips. But fab 11 and other undisclosed positions, across campus, will be eliminated.

From the Observer article: “Intel employees leaked news of the layoffs; there was no press release. Shipley said the company wanted to inform its employees before the news appeared in the media.”

IBM = I’ve Been Moved Overseas

News is coming out on the latest round of 1315 layoffs at IBM. Here’s a list of what I’ve found so far:

Denver & Boulder, Co. 150
Poughkeepsie, N.Y. 45
Westchester County 15
Endicott, N.Y. 13
East Fishkill, N.Y. 11
Essex Junction, Vt. 7
Burlington, Vt. ??
Southbury, Conn. ??
Lexington, Ky. ??

This is way short of the 1315 layoffs that are being reported, so if anyone has additional info please post in the comment section or E-mail me through my personal profile button. I'll update the above layoff numbers and all other info is confidential unless released.

From a Craig Wolf article in the Poughkeepsie Journal: “Lee Conrad, national organizer for the employee group, the Alliance "at" IBM, said members had sent in paperwork issued by IBM internally showing a major downsizing nationally.”

Also from the Alliance "at" IBM web site here is a list of departments being effected:

Server Systems Operations
Technology Integration & Management
Global Infrastructure & Resource Management Americas Delivery Engagement Support
Security, Asset and Risk Management Americas Industrial Sector Delivery
Financial Services Sector Delivery
Distribution Sector Delivery
Communications Sector Delivery
IBM Global Account Delivery
Global Network Services Delivery

Conrad also said "IBM has been very clear they will be eliminating jobs in the United States and shifting jobs to India and China and other low-cost countries,".

From a Paul McDougall article on EETimes.com:

“IBM's spokesman said the job cuts are related to the company's effort to redistribute its workforce from low-growth to high-growth areas. The plan was unveiled two years ago, when IBM said it would cut 10,000 to 13,000 jobs worldwide. IBM took a charge against earnings of $300 million last year primarily to cover costs associated with those cuts.”

WaMu’s “Amazing Accomplishment”

The Puget Sound Business Journal’s staff writer Justin Matlick penned an in depth article on the recent layoffs at Washington Mutual.

From the article, President and Chief Operating Officer Stephen Rotella said that trimming $700 million off expenses in a short time span, "is an amazing accomplishment."

Rotella also said that the streamlining effort is now complete, and is already being reflected in WaMu's bottom line.

Chairman and Chief Executive Officer Kerry Killinger has since made it WaMu's goal to bring their expenses inline with other big banks, spurring a series of moves that included:

Cutting overall staff levels by upward of 10,000 workers, or 18 percent
Moving thousands of jobs to India, the Philippines and Costa Rica
Shuttering more than 80 retail branches
Closing 10 of 26 home-loan processing centers

Matlick writes:

“In addition to the Philippines location, WaMu contracts out call center work to Costa Rica -- where Spanish-speaking workers handle calls from the company's bilingual customers -- and outsources some back-office operations to India. Its goal is to eventually move the equivalent of 7,500 full-time positions offshore.”

WaMu is among a growing number of financial institutions, including JP Morgan Chase & Co., Citigroup, B of A and Countrywide Financial Corp., transferring operations offshore.

Something to think about; in an effort to alleviate the problems with sub-prime loans, WaMu is refinancing 2 billion of these loans with hopes that a little time will allow the borrowers to get their act together. Or could they just be pushing these problems out of the current financial statements.

From the WaMu.com website:

"We have a simple philosophy: Everyone should be treated with dignity and respect.This simple approach has been in practice for years at Washington Mutual. We're committed to creating a work environment where everyone has the opportunity to thrive and succeed."

Lenovo Hitting Triangle With Layoffs

Since my computer blow a power supply and it took half of everything else with it, I’ve had some time to think about what the layoffs happening at Lenovo might mean.

Back on April 19th Rick Smith wrote a thoughtful article, on Wral.com, about Lenovo’s second round of layoffs since they bought the IBM division for 1.25 Bil back in 2005. Like the cat that just cornered the canary, the big boys seemed confident that they now had what they needed to make a serious dent into the U.S. market. But that little canary was slipperier than the cat thought and the powers at Lenovo also forgot to bring that one last ingredient needed to finalize the deal; a quality product. There just isn’t much of a good story out there about their product and follow-up service.

At least company spokesman Ray Gorman sounded sincere and was forthcoming with some details needed to give an honest assessment. When the jerk, sorry, company spokesman for Hershey Foods, Kirk Saville, discussed their layoffs, he sounded like the people who have worked their entire lives for Hershey deserved the boot.

Ray Gorman quoted from the Smith article:

"I think most employees understand that (these) actions reflect the realities of our fiercely competitive industry,… These are difficult and certainly painful decisions, and we do not take them lightly."

This is a great example of how attitudes start at the top, Lenovos CEO Bill Amelio, called the layoffs "totally gut-wrenching."

I believe that Mr. Amelio had dreams of building something real in North Carolina but got caught by the storms named Dell, Hewlett-Packard and Acer.

As these companies venture into the States (or is that vulture) and build a client base, they also build back of the house services such as R & D, accounting, marketing, sales, distribution and customer service. Once these departments are up and running it becomes irresistible to move them to lower cost locations. But cost is only one factor, being an employer in the States comes with a load of regulation and litigation.

Discovery Employees Discover Pink Slips

Discovery Communications fired about 8% of its Silver Springs, DC staff on Monday. According to a Neil Adler article in the Washington Business Journal, it’s estimated that 200 were fired, and since Discovery has refused to give any information concerning the cuts, we can assume that there is no severance package or outplacement service.

The following is from the career section of Discoveries website, it would seem that their current actions might hamper their ability to obtain additional awards:

• One of the 2005 "100 Best Companies to Work For," ranked by FORTUNE Magazine;
• 2004 #1 Best Programmer for Women in Cable, awarded by WICT (Women in Cable & Telecommunications);
• One of the "Top 100 Best Companies for Working Mothers," and Top 10 in 2005, according to Working Mother magazine
• One of the top 50 employers in the Washington, DC metro area, according to Washingtonian magazine; and,
• A proud recipient of the "Excellent Place to Work" seal, awarded by the Montgomery County, Maryland Work/Life Alliance.

“Discovery is committed to being an employer of choice, not just a good place to work, but a great and inclusive place to work. To that end, we strive to recruit and maintain a workforce that meaningfully represents the diverse and culturally rich communities that we serve.”

Do You Have A 403(b)

If so this article by Neil Weinberg on Forbes.com is a must read. From the article:

“Lies, kickbacks, union corruption and tens of millions of dollars in ill-gotten gains are among the accusations laid out in a lawsuit that's likely to strike fear in the hearts of labor leaders and financial executives across the country.”

“The union received as much as $3 million annually for its endorsement and told its members "we've done all the background work so you don't have to!" In total, 53,000 union members invested over $2 billion in the plan. Expenses ran several times those of lower-cost alternatives.”

The Mess Won’t Stop At Fannie Mae

In a Washington Business Journal article by Staff Reporter Jeff Clabaugh FannieMae will be attempting to trim $200 million from its annual operating budget. There has been no statement made on where those cuts are to come from but $200 million equates to a lot of jobs.

The article states that FannieMae employs 6,500 with 1,000 of these staffers being hired from 2004 to 2006. That hiring window opened when The Office of Federal Housing Enterprise Oversight released a report on September 17, 2004 alleging widespread accounting errors, including shifting of losses so senior executives could earn bonuses from making earnings targets. Fannie Mae was then ordered to “uncook” their books for the previous 3 ½ years.

From the article:

“In December, the company (NYSE: FNM) announced a restatement of financial results from 2001 through mid-2004 that erased $6.3 billion in previously reported profits.”

Since the blame for this fiasco was directed at booted Chairman and CEO Franklin Raines, some have directed at him:

NLPC Says Stop Franklin Raines’ Rape of Fannie Mae — and Taxpayers

As usual politics make things worse not better:

Carl F. Horowitz is director of the Organized Labor Accountability Project of the National Legal and Policy Center, a nonpartisan foundation promoting ethics in public life wrote in a 2005 article:

“Chairman Michael Oxley, R-Ohio, is the prime mover behind a requirement to force the GSEs to devote 5 percent of after-tax profits to a proposed affordable-housing fund…”

“…That makes them vulnerable to shakedowns, especially by nonprofits that operate on a nationwide scale.”

Did You Get A Tax Refund

There are several issues before Congress that could cost you thousands. The current hot button issue is the AMT. The Alternative Minimum Tax is estimated to add $2,000 to 23 million Americans tax bill this year (2007 tax year).

Alexandra Marks and Ron Scherer, staff writers for The Christian Science Monitor write an excellent article that should be read if this interests you. From the article:

“An estimated 4 million Americans will be subject to the higher AMT this year. The number would have been 11 million, but Congress approved a temporary patch last year. Unless lawmakers apply another patch or pass a comprehensive reform, that number will jump to as many as 23 million people for the 2007 tax year.”

Over on the Captain’s Quarters blog, Chris Muir, who does Day-By-Day Cartoon Inc. pokes fun at the situation in Congress.

On the Heritage Foundation website, Andrew Grossman is Senior Writer and Editor at The Heritage Foundation, penned an article back in November, 2005, When Would the President's Tax Cuts Expire? The following is a list, from that article, of the taxes cuts that have already or will run out:

• Bonus Depreciation: This provision, which changes depreciation schedules for businesses in a way that encourages investment, expired on January 1, 2005.

• Alternative Minimum Tax: Exemptions will decrease by $6,500 per filer on January 1, 2006.

• Small Business Expensing: On January 1, 2008, the maximum amount that a business may deduct will fall from $100,000 to $25,000, which will not be indexed to inflation. Also on that date, the cap for the value of qualifying property will shrink from $400,000 to $200,000, making it more difficult for small businesses to take advantage of this deduction.

• Capital Gains: Rates will rise to 10 or 20 percent, depending upon income, on January 1, 2009.

• Child Credit: This credit will shrink from $1,000 to $500 per child on January 1, 2011.

• The 10-Percent Bracket: This bracket will be eliminated on January 1, 2011, raising the income tax burden of many workers by 5 percentage points.

• The 15-Percent Bracket for Joint Filers: On January 1, 2011, the upper limit of this bracket will shrink from 200 to 167 percent of the upper limit for single filers, creating a marriage penalty.

• Standard Deduction for Joint Filers: On January 1, 2011, this will shrink from 200 to 167 percent of the standard deduction for single filers, creating a marriage penalty.

• The Estate Tax: The top rate for this tax will increase to 60 percent on January 1, 2011, and the value of an estate exempt from taxation will shrink to $1 million, which is less than it is today.

• The Income Tax: Rates will increase between 3 and 4.5 percentage points in each bracket on January 1, 2011.

• Dividends: Rates will rise to match standard income tax rates on January 1, 2009.

BankAtlantic Divests Itself Of 225 Staffers

As reported on in the South Florida Business Journal, BankAtlantic will be reducing it’s “operating platform” of 225 platforms. The cuts are coming from BankAtlantic Bancorp headquarters, branches and call centers. The pink slip writers seemed to have lost the address of the executive suite.

From the career section of the BankAtlantic Website:

"Join Florida’s fastest growing banking retailer.
7 great reasons to join BankAtlantic!

1. Fun corporate culture
2. Quarterly Stretch Profit Sharing Plan
3. Stability and excitement
4. Competitive compensation packages
5. Continued growth through BankAtlantic University
6. Flexible shifts"
7. Rewards program

Note: It's interesting that there are no press releases concerning these cuts.

Circuit City Is Now Hiring – Cheap

This is late but still needs to be put out. From a Circuit City press release:

“The company has completed a wage management initiative that will result in the separation of approximately 3,400 store Associates. The separations, which are occurring today, focused on Associates who were paid well above the market-based salary range for their role. New Associates will be hired for these positions and compensated at the current market range for the job.”

“The separations, which are occurring today.” They couldn’t have given a reasonable notice. I’m neither pro or anti unions, but this is a classic example of what takes place if there isn’t one.

From the Circuit City careers page:

"During our history spanning 50-plus years, we have continuously evolved to maintain our leadership in customer service and the consumer electronics industry."

This just demonstrates that Circuit City is no longer capable of managing a higher quality sales staff and wants to become a K-Mart style retailer.

In a previous life I was a Training Director for a company with about 2,000 employees. We purchased all of our AV equipment from Circuit City; they laid it all out, put it together and showed us some tricks that made life easy. What do you think you’ll get now that they are hiring their staff for as little as they can. Would you want to work for a company that has this attitude towards their staff.

Circuit City is officially off my shopping list.

Hanesbrands Closes Winston-Salem Plant Laying Off 610

The press release from the Hanesbrands website:

“WINSTON-SALEM, N.C. (March 29, 2007) – Hanesbrands Inc. (NYSE:HBI) announced today that it will close its Stratford Road textile manufacturing plant in Winston-Salem and move production to existing lower-cost plants in the Caribbean basin and Central America.”

“Production at the Stratford Road plant, which makes underwear and panty fabric, will substantially end by June 30, 2007. The plant’s print fabric operation, which employs fewer than 20, is expected to cease production by the end of the year. In total, the closure will eliminate positions for the plant’s current 610 employees.”

“The company will provide severance benefits and career transition assistance to employees and will apply to the federal government for U.S. Trade Adjustment Act assistance for affected employees. Also, affected employees will be allowed to seek open positions at the company’s other manufacturing and distribution operations in the Winston-Salem area.”

The Triad, once the heart of the textile industry, has seen textiles leave the area for years. The local, county and state governments have responded by coming together and presenting to businesses incentive packages that have attracted quality jobs to that area. Their development efforts is a model that other agencies, from across the country, have tried to emulate.

If anyone has some details of their severance package, please leave a comment.

Do You Work For Citigroup?

Well tomorrow is the day that Eileen Alt Powell, an AP business writer, wrote that Citigroup Inc. chairman and chief executive Charles Prince will announce, via a conference call, the companies proposed plan to satisfy disgruntled shareholders. Media reports that as many as 26,000 people could get their pink slips or be “reassigned”.

On March 26 an article in the Sacramento Business Journal said that media estimates were that Citigroup would cut 15,000 jobs. That estimate has grown and Prince is also quoted in the AP article as saying that “some operations would be moved "to lower-cost locations." And, he said, there would be continuing efforts aimed at "rationalizing our technology platforms to operate more efficiently and effectively."

These cuts are said to generate $2 billion a year in savings.

Other current activity, of interest by Citigroup, is their binge of takeovers:

Citigroup's overhaul came as the bank announced it will purchase the bank of The Overseas Chinese Bank, a mid-sized Taiwanese bank, for $425 million.

Last month, Citigroup announced it was launching takeover bid worth up to $13.3 billion for Japan's Nikko Cordial Corp., the country's third-largest brokerage.

In December, Citigroup acquired an 85.6 percent stake in the southern China-based Guangdong Development Bank for $3.1 billion.

Newer article on July 4, 07: Citigroup Mixed Signals & None Good

I have to wonder how many more jobs can be moved overseas. The Chinese are ready, willing and waiting for our jobs. Take a look at: One benefit you won’t find in the United States.

High Ho High Ho For Delphi It’s Off To Mexico We Go

Since Delphi split from G.M. they have continually blamed the companies abysmal performance on the high costs associated with the manufacturing facilities in the U.S.. Out of 159 manufacturing facilities in 36 countries they started with only 27 of them in the United States. The powers at Delphi have closed plants, laid off workers only to hire less expansive staff and outsourced at every opportunity. Guess what, their abysmal performance is getting worse. Who are they going to blame when there are no U.S. workers left.

Delphi Automotive Systems has informed the union that represents the workers of their Kettering, Ohio plant that they are “considering” outsourcing to Mexico.

From a Dayton Business Journal article:

“The Kettering plant is one of five plants in Montgomery County. It is part of Delphi's Automotive Holdings Group, made up of plants the company plans to sell or close.”

“Thorpe said a potential buyer is looking at the Kettering plant. Including temporary employees, there are about 800 workers at the facility.”

In a previous article I read that Delphi is committed to closings or moving 22 of their 27 U.S. plants to somewhere else.

From the Delphi Leadership page:

“As leaders of Delphi, we are visible, we are accountable, we are determined. People inside -- and outside -- observe what we say and do. Each and every day, we strive to embody the qualities of leadership through our words, our behaviors, and our commitment to making Delphi a strong and respected corporation.”

Here are the “leaders” that are determined to close the majority of Delphi’s U.S. manufacturing.

Developmental Agencies Face The Music

An article in the Washington Business Journal by Senior Staff Reporter Joe Coombs describes some of the political problems that two local development agencies are having. It seems that the NCRC, National Capital Revitalization Corporation, and the AWC, Anacostia Waterfront Corporation, are under attack by several of the cities councilman. From the article:

“Legislation already has been drafted to eliminate the AWC and NCRC and fold their operations into the Office of the Deputy Mayor for Planning and Economic Development. That bill will come up for consideration "as soon as possible," says Councilman Kwame Brown, D-at large and chairman of the council's economic development committee.”

Across the country development corporations are popping up to act as a bridge between, the often cumbersome, local, county, borough, regional and state agencies that are willing to offer incentives to businesses, that bring jobs into their communities.

It’s been my experience that when governments think that they can “do it better” businesses tend to run. Politicians are only successful when they can introduce the active parties and then take the credit. When they try to deal directly with business, too many peripheral issues come into play.

Governments should have a clear outline of reasonable expectations for publicly funded development agencies to prevent politics, personalities and egos from entering into their performance review. We have seen to much self-serving politics and people have to speak out.

Hancock Fabrics Closing 134 Stores

In a March 20, Press Release, Hancock Fabrics, Inc. (NYSE: HKF), announced the closings of 104 stores. This is addition to the 30 closings announced last month. Hancock has 403 units in 40 states.

In a March 21, Press Release:

Hancock Fabrics, Inc

"(NYSE: HKF), announced today it has filed a voluntary petition for Chapter 11 relief in the United States Bankruptcy Court for the District of Delaware. Its subsidiaries are also filing for the same relief. Hancock took this action so that it can use the reorganization process to improve the Company's operating performance, reduce its secured debt over time, close underperforming locations, and exit Chapter 11.”

From these releases it appears that the decision to close these stores has been a last minute one and there is no news of which locations or the timing was listed.

Various blogs have posted that going-out-of-business signs have already been posted on the 30 units announced in February with closing dates of around June 1, 2007. So far I have not been able to find any listing of which stores will be closed and which will be spared.

Offshoring Has Little Effect

…Other than it is good for business. That is what is repeated over and over by journalists who feel the need to write about the outpouring of American jobs. What’s the contemporary term being bandied around, workplace evolution.

From an interesting story by Kevin Krolicki of Reuters, Detroit property is selling at auction for a fraction of its value. Click on the above link because the story is interesting and is the extreme case of what is happening in some of our communities.

From the article:

“Detroit, where unemployment runs near 14 percent and a third of the population lives in poverty, leads the nation in new foreclosure filings, according to tracking service RealtyTrac.”

“At a weekend sale of about 300 Detroit-area houses by Texas-based auction firm Hudson & Marshall, the mood was marked more by fear than greed.”

“The city, which has lost more than half its population in the past 30 years and struggled with rising crime, failing schools and other social problems, largely missed out on the housing boom that swept much of the country in recent years.”

“After selling house after house in the Motor City for less than the $29,000 it costs to buy the average new car, the auctioneer tried a new line: "The lumber in the house is worth more than that!"’

Intel Investing 2.5B In New Plant - In China

This information came from an article in the Sacramento Business Journal.

It’s hard to be upset with Intel’s decision to build a major manufacturing “campus” in Dalian, China. The world leading computer technology company building a plant in the world’s largest and fastest growing country is a nobrainer. Not to mention the additional benefit of low labor costs.

China isn’t the only location that Intel has expansion plans for, from a February 26th press release:

Rio Rancho, New Mexico; $1 Billion

"Our new 45 nanometer process represents one of the most significant manufacturing breakthroughs in decades and we believe that putting it in our factory in New Mexico will help us deliver the best possible products for our customers," said Paul Otellini, Intel Corporation's president and chief executive officer. "Our Rio Rancho site has successfully operated in New Mexico for 27 years. Based on that success, we are pleased to position Fab 11X for Intel's next generation of technology."

Chandler, Arizona; $3 Billion

“…The company is currently building two other factories that will use the 45nm process. The $3 billion Fab 32 in Chandler, Ariz., will commence production late this year…”

Kiryat Gat, Israel; $3.5 Billion

“…$3.5 billion Fab 28 in Kiryat Gat, Israel, will begin production the first half of next year.”

From a June 22, 2006 Press Release:

Leixlip, Ireland; $2 Billion

“The US$2 billion factory has begun high-volume production using 65nm process technology produced on the industry’s largest wafer size (300mm), which provides the Intel fab with the potential to generate the world’s highest microprocessor output at the lowest cost. Along with Intel’s Fab 12 in Arizona and D1D fab in Oregon, the new facility (called Fab 24-2) is the most technologically advanced, high-volume semiconductor manufacturing plant in the world building multi-core microprocessors.”

From an older Press Release dated September 15, 2005:

Shanghai, China; $1.3 Billion

“For more than two decades, Intel has invested nearly 1.3 billion dollars to China and cultivated a workforce of over 5,000 talented professionals. R&D has been a huge part of the company's investment since it first established the software labs in China in 1994.”

Is Inflation A Worry

Today the Federal Reserve issued their Federal Open Market Committee statement. Wall Street cheered because they dropped the possibility of a rate increase from the statement. They did indicate that the:

“…readings on core inflation have been somewhat elevated.” and “the Committee's predominant policy concern remains the risk that inflation will fail to moderate as expected.”

Two of the underlying indicators, wholesale prices and factory orders, do not look positive for future inflation concerns. From Economic Slowdown Sooner Rather Than Later the January reading of factory orders showed the largest drop in 6 ½ years and as indicated in a Martin Crutsinger article on the AP, in February wholesale prices jumped 1.3%, also a negative trend for future inflation.

Many prominent economists seem to feel that these indicators are only bumps in the road to prosperity. But any slowdown could also be accelerated by ignoring these economic factors today.