Archive | April 6, 2013

Lasting Memories? The Sears Portrait Studio Shuts Down

CPI Corp. has been a traditional portrait studio at many stores such as Sears Holdings Corp, Wal-Mart and Babies “R” Us that has recently closed in all of them. A main factor that leads to the closure of the company within stores is a result of the increase in digital photography. The company has provided its photo services for Sear’s customers since 1959 and has been their only portrait studio since 1986. With technology constantly changing and releasing new products for consumers, many people chose to use their iPhone cameras or other electronics instead of going to get portraits done. The company had almost two thousand studios in Wal-Mart worldwide, and faced a company loss to more than $60 million. With its total liabilities at $174.8 million and total assets at $56.2 million, the company had no other choice but to end its business.

Not only was it the fault of digital photography and phone cameras but with the product and services itself. CPI studios took weeks to return their portraits and had them printed at other facilities. As a business, they should be able to compete with others who are more efficient and convenient, which they failed to do.  Companies are expected to face financial trouble when they encounter competitors who are able to create something to increase their sales and decrease the sales of others.

Written by: Samantha Chin

Source: The Wall Street Journal

http://online.wsj.com/article/SB10001424127887323646604578405001071809788.html?mod=WSJ_business_whatsNews

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Corporate News: Electric-Car Designer Cuts 150 More Staffers

Fisker Automotive Inc., the electric-car maker, has dismissed 25% of its workforce, about 150 of its 200 employees.  Fisker has been struggling to attract investors that would help resume vehicle production.  It was discussing an acquisition or partnership with at least two interested parties, but those discussions fell through last month.  The company has even hired lawyers at Kirkland & Ellis LLP to restructure and consider a bankruptcy-protection filing.  The U.S. government has special interest in Fisker’s performance because the company is one of thirty projects involved in the Department of Energy’s Advanced Technology Vehicles Manufacturing Loan Program.  Fisker is due to make a payment on April 22, but a DOE spokeswoman expressed that the DOE “is committed to the best outcome for taxpayers.”

This invested interest of the U.S. government in Fisker is reminiscent of the Chinese government’s involvement in solar panel manufacturers.  Both countries are exploring environmentally friendly investment options, but both have seen disappointing performances from their chosen companies.

Written by: Constantine Kostikas

Source: The Wall Street Journal

Anheuser-Busch Merger Deal Clears an Antitrust Hurdle

The government has implemented multiple regulations on businesses to prevent the creation of monopolies in the past. For example, the Justice Department sued AT&T so that this mobile-network company would not be able to take over T-Mobile USA for $39 billion last year. Similarly, the Justice Department sued Anheuser-Busch InBev when this American brewing company tried to buy Grupo Modelo, the maker of Corona, for $20.1 billion. These two brewing companies make up 46% of beer sales in the United States. The government fears that the takeover of one company would give the other too much power within the industry. Anheuser-Busch sees this deal as a vital step to expand their market. Therefore, they made a deal with the Justice Department to sell 50% of Crown Imports, Corona’s importing company, to Constellation Brands for $2.9 million.

Anheuser-Busch would have less control over the company, but they would still be able to expand their markets in Mexico and other Latin American countries. It appears that Obama’s administration is careful about letting companies merge within each industry. There also seems to be a growing fear of companies with big market shares after the financial crisis of 2008.

 

Written By: Melody Mark

Source: De La Merced, Michael J. “Anheuser-Busch Merger Deal Clears an Antitrust Hurdle.” New York Times (blog). The New York Times Company, 5 Apr. 2013. Web. 6 Apr. 2013.

Tax Lobby Builds Ties to Chairman of Finance Panel

04-06-2013 Max Baucus

Everybody agrees that the government is starting to take action on reforming tax laws and spending patterns, and the world turns its attention towards Max Baucus, chairman of the Senate Finance Committee. There are high tensions in the Senate to create change and make progress, and no one else has a more powerful position when it comes to financial matters. To add, the owner of the most powerful position also has a plethora of former aides now working as tax lobbyists for major business from all sectors.

The lobbying activities are expected to pick up dramatically, since, if the tax code is streamlined, the changes could mean billions of dollars in difference for big corporations. The lobbyists understand the significance of the House and Senate drafts for new tax code.

The Baucus response has been the general, we will act “based on merits of the policies, not on who is advocating for them,” but I’m not so confident in that answer. Even though Baucus is a Democrat, he has shown that he will go against the party on big issues, and I’m sure lobbying had its part in that decision. I feel that, if the country’s tax changes are going to go through many changes as a result of a monumental financial crisis, than the man with the most say shouldn’t be tied to so many lobbyists. I suppose, that’s just how the government is.

Source:

http://www.nytimes.com/2013/04/07/us/politics/tax-lobby-builds-ties-to-max-baucus.html?ref=business&_r=0

What’s Worth Buying at Fisker?

Few years back, many experts in the auto making industry thought the electrics cars would become a huge hit and dominate the market share of cars but little did we know, it wasn’t going to perform as well. 

Fisker Automotive, one of the more famous electric auto makers are laying off 150 of its 200 staff. With the help of the department of Energy from the United States government, Fisker still isn’t performing to their full potential. The department of energy lent Fisker $337 million to help with their business. Apparently this amount of money isn’t enough for them to function well. 

I personally think Fisker’s cars are very nice and they have unique designs, but electric cars are just not the ideal cars to have. The long charge times and battery not lasting long enough for road trips might be the reason why they are not performing well. Maybe in the future someone will invent an electric car without flaws. 

-Derby Ng

http://blogs.wsj.com/corporate-intelligence/2013/04/05/whats-worth-buying-at-fisker/?mod=WSJBlog&mod=WSJ_corp_intel

Increase in Rainfall Yields Lower Cost in Crop Production

Crops prices are at a decline due to greater forecast in growth from higher than average rainfall. The abundant rainfall in the Daloa region, where about 1/3 of Ivory cost crop are produced, has close to three times the average rainfall. Based on the supply of crops, the commodities price for Standard and Poor’s GSCI gauge on 24 commodities is down 3.3 percent last week, the biggest decline since October 2012.

Previous concerns on the prospective dry weather has driven price higher. However, this increase increase did not last long since the actually reports show a above normal average, which eventually caused a decease in price. The commodity price of Cocoa for July has dropped .09 percent to $2,191 a metric in on NYSE Liffe trade session. Also While sugar, also know as refined sugar, has dropped by .2 percent to $489 a ton; raw sugar fell .3 percent to 17.62 cents per pound. Robusta Coffee dropped .5 percent to $2,046 a ton and Arabic beans are down .5 percent to $1.3885 a pound.

Written by: Victor To

Source: http://www.bloomberg.com/news/2013-04-05/cocoa-falls-a-3rd-day-as-rain-may-help-crop-sugar-also-declines.html

Lowest Participation Rate In The U.S. Work Force Since 1979

The unemployment rate is typically a good indication of the economy but it does not serve to guage the labor market’s long term health. Friday’s employment report of only 88,000 jobs being created in the month of March reflects how hard it still is to find a job, but neglects the percentage of Americans who aren’t even looking anymore. The participation rate of the work force dropped to 63.3% last month; the lowest level it has been since 1979. This decrease denotes nearly half a million Americans who have given up looking for work; what is troublesome about this statistic is approximetly half of these drop outs are under the age of 25.

The longer people stay out of work, the more difficult it is to re-enter the work force and those who do are generally forced to take jobs below their previous pay grade. There is cause for concern if the younger generation of Americans have been discouraged in finding work; the productivity for the economy in the future will directly correlate with their participation in the work force.  

Evan Chang

Source:

The Wall Street Journal

Something Seems Shady

Typically when a police officer confronts a civilian anger may be felt by one or both of them and it can be hard to determine who is at fault if something were to happen. Last year, William Farrar, the police chief in Rialto, California implemented a strategy to determine if an officer’s use of recording equipment will benefit both police and civilians. After having half of Rialto’s uniformed police officers randomly assigned to wear miniature cameras on places such as their hats or sunglasses every week, the experiment was in place.

The results were astonishing because after the one year experiment was over, the department had an 88 percent decline in number of complaints filed against police officers. from 24 to 3 instances. In addition, officers used force 60 percent less often, down from 61 to 25, and those who did use force were twice as likely to be an officer who wasn’t wearing a camera that records their actions. The cameras appear to have an effect of curbing the autonomy that the police hold and they are now becoming more cautious of their actions; this experiment demonstrates its effectiveness in bringing down police brutality. However, some are bringing up privacy issues such as the whole “big brother is watching” idea and the possibility of police trolling around for crimes they can charge civilians with. Taser International, the maker of these new cameras has already received orders from departments in Pittsburgh, Salt Lake City and Hartford, as well as Fort Worth, Tex.; Chesapeake, Va.; and Modesto, Calif. In the San Francisco Bay Area, the police department of BART, even  the transit system.

 

Written by Kevin Zhang

Source:

Stross, Randall. “DIGITAL DOMAIN; Wearable Video Cameras, for Police Officers.” The New York Times. The New York Times, 06 Apr. 2013. Web. 06 Apr. 2013. <http://www.nytimes.com/2013/04/07/business/wearable-video-cameras-for-police-officers.html?ref=business&gt;.

Fed Waits For Signs of Economic Standing

After reports of the slow down of job increases the Fed is now starting to question whether they should cut down on the bond-buying programs that they have been running. Prior to this report the Federal Bank wanted to cut back on their bond-buying program, but the job market is now holding them back. The unemployment rate has dropped to 7.6% but this was not because many jobs were being put into the job market but because the amount of people searching for jobs has decreased. If the economy improves the Fed wants to lower the amount of mortgage backed securities that it is buying.

The economy is still very fragile and volatile so it is good that the Fed is waiting to see how the economy will turn out before they start to cut back on their policies to help improve the economy. Though it is important for the Fed to wait and see how the economy will turn out, not pushing any new policies can also negatively affect the economy because nothing is being done about the current situation.

Written by: Jessica Ho
Source: The Wall Street Journal

Lahart, Justing. (2013). Jobs Report Hits Fed in the Jawbone. The Wall Street Journal. Retrieved from: http://online.wsj.com/article/SB10001424127887323916304578404711691889902.html?mod=WSJ_economy_LeftTopHighlights

A.T.M.’s With a Human Touch

Bank of America is now introducing live video streams for A.T.M customers. These on-screen tellers are sitting in call centers located in Florida and Delaware. They can help from a video stream for transactions like check cashing. This innovative automated teller machines will be placed at branches in Boston and Atlanta later this spring. Shelley Waite who is the senior vice president and head of the A.T.M business at Bank of America stated that these new machines will be able to handle mostly anything an in-person teller can. However this excludes obtaining a cashier’s check. These new A.T.M’s will expand branch hours, while adding more capabilities. If the customers do not want to use the new machines they can also use them as traditional A.T.M.’s. Although Bank of America removed some machines at convenience stores and shopping malls, they still have more than 16,000 A.T.M.’s.

I think that this new innovation will help customers across the board as they will have extra options and the branches will effectively be open longer. I think this will please customers as they can work around their own schedules more efficiently.

URL: http://bucks.blogs.nytimes.com/2013/04/04/an-a-t-m-with-a-real-teller-on-the-screen/

-Jonathan Chan

Boeing’s 787 Takes Flight to Assess New Battery

The Boeing Company has been receiving bad publicity for their batteries catching on fire during flights. The lithium- ion batteries were reported to fail and cause fires in a couple of cases so the Boeing Company’s recent proposal to fix the situation is a new steel case would enclose the lithium-ion battery where in the case that the battery does happen to fail; the new steel box would be able to contain the explosion. On Friday, the company finally started their first tests to analyze their new battery system to confirm if this new complex system will fix their problems. Results will be sent to the Federal Aviation Administration for a green light to start flying the planes again. The tests are supposed to show that the new battery system is improved and works.

If the battery system and series of tests are approved by the Federal Aviation Administration then all the grounded planes would be able to resume flight. Passing the test is only the first step for the company to gain back the trust of flyers. Not only does the Boeing Company have to prove to travelers that the new system is safe but they also have to prove that they deserve a second chance. For many people flying is one of the biggest fear to overcome so the Boeing Company is going to have to put in a lot more effort.

Written by: Wilson Tang

Source:

http://www.nytimes.com/2013/04/06/business/boeing-completes-test-787-flight.html?ref=business&_r=0