'In the News' Archive
The answer appears to be “no.” The marriage in question is the 25-year partnership between General Motors and Toyota Motor in a joint venture, New United Motor Manufacturing, Inc. — widely known as NUMMI.
GM this week gave out a brief statement that it could not agree on future product plans with Toyota. The NUMMI plant makes the Pontiac Vibe sport wagon for GM, and production of the Vibe is set to end later this summer — well ahead of the scheduled phase-out of the Pontiac brand.
GM said its 50% interest in NUMMI would stay with “Old GM” — the bankrupt carcass of bad assets and debt that will be left behind when the company emerges from Chapter 11, which could be next week, if the Obama administration’s auto task force can muscle the company’s case through bankruptcy court. “New GM” may be out of bankruptcy reorganization in 40 or fewer days, which would top Chrysler Group’s record of 42 days.
At the NUMMI plant, which is hailed as a highly efficient American implementation of the vaunted Toyota Production System, the UAW-represented workforce makes Tacoma pickups and Corolla sedans for Toyota to sell in North America. What happens to the NUMMI plant now is a big question for Toyota and its new president, Akio Toyoda, the grandson of the automotive manufacturer’s founder.
As the global downturn in the automotive industry took hold last year, Toyota called a halt on completing its new plant in Mississippi, which was going to build the Prius hybrid. Rumors abounded that Toyota would convert NUMMI to Prius production in light of high demand for the third-generation Prius, one of the few car models in the world that’s garnering pronounced popularity. Toyota officially quashed those rumors, however.
Akio Toyoda has a thorny problem in pondering the fate of NUMMI. The factory has long outlived its purpose and value as an experiment in cooperative production. It’s not the traditional practice of the giant Japanese automotive manufacturer to shutter a factory, lock the doors, and throw away the key, as Chrysler and GM did with so many North American plants. (The sprawling NUMMI factory was a GM plant until it was closed in 1982.) Toyota doesn’t do big layoffs. NUMMI is the last car plant in California, it has a unionized workforce of some 4,700 employees, and it’s a highly visible employer in the San Francisco Bay Area. Pulling the plug on NUMMI would be a public-image nightmare for Toyota. Not that it would slow down sales of Toyota vehicles in the US any more than the recession already has, but it would be an international liability to the corporation’s image.
BTW, the NUMMI plant is a few miles north on the Nimitz Freeway from the Great Mall of the Bay Area — a facility that was a Ford Motor plant from 1955 to 1983 and which was redeveloped as a giant shopping mall in 1994. Maybe that could be the future of the NUMMI factory, as well, although the mall business isn’t what it used to be, either.
Drugstore operator Walgreen aims to redefine the term office visit by allowing you to visit the doctor at your office or workplace. After blanketing the nation with more than 6,900 drugstores, retail growth opportunities are slowing and the company is looking for new ways to expand. One area that Walgreen is giving plenty of attention is its Take Care Health Systems (TCHS) business, which manages more than 700 clinics inside Walgreen stores and at worksites. (Customers include QUALCOMM, Goodyear Tire & Rubber and Toyota Motor.) The company recently told Chicago’s Daily Herald that it plans to open “several thousand” work-site health clinics in the coming years to get in on the $7.3 billion market for employer-provided care.
With businesses struggling to reduce employee health care costs and the country on the verge of major health care reform, one could argue this is an idea whose time has come. The work-site clinics provide primary-care physicians (which I understand are in short supply already), nurse practitioners, nutritionists, and other health-related services. Walgreen bought TCHS in 2007 and made two follow-on acquisitions — I-trax and Whole Health Management — in 2008 in a bid to diminish its reliance on retail stores for growth and to diversify into health and wellness services. In January Walgreen launched “Complete Care and Well-Being,” a workplace program designed to cut costs for employers and improve access to health care for employees. The work-site health centers may be staffed by from one to 50 employees (depending on the size of the client) and be paired with Walgreen pharmacies and discount prescription drug plans.
This all sounds good, but I can’t help but think about the school nurse. Not to bash all school nurses, but the ones I encountered during my school days, and more recently during my children’s education, hardly inspired confidence. (My fifth grader swears her school nurse treats everything with a cough drop.) On the other hand, my employer Hoover’s already provides flu shots, blood pressure screening, and other health-related services at well-attended company-sponsored health fairs. It would be convenient to be able to get a throat culture or other simple procedure at work. But beyond routine services, there are privacy issues to consider and I’m not sure all employees would flock to a company doc.
On a related health care note: The world’s largest employer, Wal-Mart Stores, has come out in favor of requiring employers to provide health insurance to workers, much to the dismay of other retailers, large companies, and most Republicans. In a letter to President Obama dated June 30, Wal-Mart called for “shared responsibility” in the form of an “employer mandate which is fair and broad in coverage.” Wal-Mart, which for years was chastised as stingy when it came to employee benefits, has improved its benefits programs considerably. Still, the National Retail Federation, which vehemently opposes mandates for employers, said it was “flabbergasted” by Wal-Mart’s position.
Less than a week after Michael Jackson’s death, and the sharks already are circling.
This morning it was revealed that a 2002 will drafted by Michael Jackson stipulates that his mother, three children, and charities would split the benefits of his estate, estimated at more than $200 million. That will could see a judge as soon as this week.
A lawyer for his parents, Joe and Katherine Jackson, however, disputes that any will ever existed (perhaps, cynically, because Joe was left out of that 2002 will). And, to add spice to the brewing drama, in just the past few days at least one other will has evidently surfaced, which could throw Jackson’s already entangled assets into further disarray.
The bermuda triangle of Jackson’s finances will only make the process that much longer and laborious. In 2007 the singer’s assets, including Neverland Ranch and his 50-percent stake in the Sony/ATV Music Publishing catalog, tallied $567 million. His debts reached $331 million, leaving Jackson with a net worth of $236 million.
Here’s the biggest shocker, though: According to financial documents prepared by accountants Thompson, Cobb, Bazilio & Associates and obtained by the Associated Press, Jackson had little more than $668,000 in cash in 2007.
(Another estimate puts Jackson’s debt at around $500 million, which would certainly put a crimp on his net worth.)
It was no secret that Jackson’s planned “This is It” performances at London’s O2 Arena were, in one way, a debt-relief vehicle. Promoter AEG Live had already sold $85 million in tickets for the 50-date show by June 25, and it was expected to be the highest-grossing concert event ever.
AEG Live said it would return money and fees to ticket buyers, or, alternatively, send a ticket (designed by the Gloved One himself) as a souvenir. “This is It” indeed. Unclaimed cash would go to cover production costs (estimated at up to $30 million) with the rest returning to Jackson’s estate. And depending on Jackson’s cause of death, AEG could join other creditors and family members already lined up to grab a piece of the pie.
However the Jackson empire is carved up, though, don’t expect any swift decisions. Alongside his legacy, his finances will be news for a very long time to come.
Passions were running high in Congress last week as the Obama Administration’s “cap-and-trade” Energy Bill squeaked through the House of Representatives on a vote of 219 – 212. A visibly irate House Minority Leader, John Boehner, spent nearly an hour castigating the House leadership for both what was in the Bill, and for the limited amount of time that Congressmen were allowed to read it.
At the heart of the Waxman-Markey Climate Bill is the push for the US to reduce carbon dioxide and other greenhouse gas emissions by 17% from 2005 levels by 2020 and by 83% by 2050.
For the White House and Congressional Democrats the thrust of the Bill is for the US to lead global energy policy in a new direction by reducing carbon emissions, the main cause of the man-made contributions to global warming. In return, the Bill’s advocates argue, millions of green jobs will be created as the country inventively shifts to greater reliance on renewable energy sources such as wind and solar and develops more fuel-efficient automobiles.
The cap-and-trade mechanism allows for companies to honor government limits on emissions, by either meeting the goals by reducing output, or by buying emission credits from companies that produce less. The mechanism is designed to provide a market incentive to reduce pollution.
However, the Bill means one thing for certain — less use of fossil fuels such as oil, gas, and coal. And for Democrats representing coal-, gas-, and oil-producing states — as well as for global warming skeptics and “drill here, drill now” advocates on the Republican side of the aisle — the size, scope, and direction of the Bill was too much to take.
The Bill is “a pile of s**t,” Boehner told The Hill magazine, presumably not advocating the use of biomass (in the Bill) with his comment.
While the fate of this Energy Bill in the Senate is highly questionable, a little cool reflection is required.
The push for utilities to use renewables is not a brand new idea. A quiet revolution of renewable energy initiatives has been sweeping through the power sector of the US economy over the past five years. The country’s regulated utilities and the companies that own them have been steadily pushing energy conservation programs with their customers and turning over a small but increasing percentage of their energy plants to renewable energy sources — wind, solar, and biomass. All this in order to meet environmental regulations from previous administrations.
According to Carol Browner, the president’s Assistant for Energy and Climate Change, in 2009 renewable energy already accounts for 3% electricity production in the US, and is likely to double by 2012 or 2013 with or without this Bill. Utilities are already heavily engaged in the process. Pick up any Annual Report for any utility/power company — FLP Group, NRG Energy, Duke Energy, PacifiCorp, NV Energy, etc, — and you will find many paragraphs on renewable energy, and on conservation initiatives.
And the cap-and-trade mechanism is not a new concept. It has already worked well in the US, according to Paul Krugman. In the 1970s and 1908s, acid rain caused by the emission of sulfur and nitrogen compounds into the atmosphere, was a big problem. In 1990 the EPA introduced a cap-and-trade program to address it, and by the end of the decade utilities met compliance, greatly reducing SO2 emissions.
Big Oil, and Big Coal, and Chinese and Indian coal plant expansion notwithstanding — the future lies with clean energy, if the US has the will to make it happen.
British Airways boss Willie Walsh actually asked the airline’s 40,000 employees if they would do one of the following to help keep the carrier from crashing financially: work without pay for up to a month, take unpaid leave, or drop back to part-time work.
Say what? I think I would be taking unpaid leave. Not getting paid to be at work? Not going to be there! Any of those choices are horrible. Shockingly, about 800 BA workers have agreed to work during July for no pay and several thousand have said they will take pay cuts or unpaid leave. Walsh and CFO Keith Williams also will skip their paychecks in July and even BA’s board members are getting in on the act (just don’t expect them to give up free flights).
Clearly desperate times are calling for such a move. British Airways reported a whopping £401 million ($664 million) loss for the fiscal year ending March 31. Walsh warned employees that the airline’s future would be at risk if they didn’t help out — no pressure.
British Airways hopes these measures will trim a cool £10 million ($16 million) off costs. They had better hope so because there are more than a few rivals out there — not the least of which is Virgin Atlantic’s outspoken Chairman Sir Richard Branson — who might love nothing more than to see BA go down.