California manufacturing jobs tank

The shutdown of a 102-year-old California manufacturing company points to a major flaw in California's industrial development policy:

We don't have one.

The company is Pneumatic Scale Angelus, which turned out top-of-the-line machines for sealing lids on soda and beer cans from a factory in Vernon. That was a niche business but not a small one, since bottling companies the world over were Angelus customers.

As we reported just after Christmas, Angelus employees were told on Nov. 2 that its owner, privately held Barry-Wehmiller Cos., would shut down production at the plant Jan. 1 and move it to a factory in Ohio. That meant lost jobs for 111 members of the United Steelworkers in Vernon.

The company appears to have fulfilled its legal obligation to inform city and state officials of its plans; economic development agencies at all three levels of government got notices pursuant to the state WARN Act, which requires notifications of such layoffs 60 days in advance. Another copy went to the office of County Supervisor Gloria Molina, whose district covers Vernon. Her office didn't get back to me to explain how they responded to it, if at all. Read more >>

FedEx Sounds Message: Weak Economy, Except On The Web

FedEx‘s performance is hurting, the result of cost-conscious customers looking for cheaper shipping methods. The world’s second-largest package-delivery company sees “persistent weakness” in the global economy, CEO Fred Smith says, though a few rays of light shine through the gloom that Smith detailed today in the company’s quarterly report.

Profit at FedEx fell 11.9% from a year ago to $438 million, $1.39 a share. Excluding one-time items, FedEx made $445.5 million, $1.50 a share. Analysts had expected it to earn $445.5 million, $1.41 a share. Some of the weakness comes from Hurricane Sandy, Smith says, which disrupted transportation routes on the East Coast for weeks. Stifel Nicolaus estimates that Sandy dented earnings by 11 cents a share.

ncome picked up at two of FedEx’s businesses—by 4% in Ground (to $412 million) and 90% in Freight (to $76 million). But at the company’s largest unit, Express—also the most closely watched part of the shipper’s business—operating income fell by a third to $230 million. The decline came mostly from lower daily volume in the U.S. Abroad, volume actually increased, though demand lessened for the higher-margin services. Efforts to modernize its fleet continued: FedEx ordered four more 767 freighters. Read more >>

Online sales tax to be added to defense authorization bill

This may be the last Christmas of online shopping without paying sales tax. A proposed online sales tax has been offered as an amendment to the National Defense Authorization Act, much to the ire of opponents.

The Computer and Communications Industry Association, a group that opposes this move, says that an online sales tax will burden small businesses, “some of the most promising candidates for future economic growth.”

“This proposal, and other online sales tax collection proposals like it, would allow states to penalize the innovative e-commerce business model by targeting small online businesses as convenient sources (and collectors) of revenue,” said CCIA President and CEO Ed Black.

The Marketplace Fairness Act, and its House counterpart the Marketplace Equity Act, seek to clarify, and arguably overturn, a 1992 Supreme Court ruling that requires retailers to have a physical presence in a state in order to collect sales tax on goods. Read more >>

19,000 kids in NY City's homeless shelters

In the past year alone, the total shelter population has risen by 17% and the number of children has risen by 18%, city stats show. Mayor Bloomberg said recently that the number of homeless children was increasing because of the recession.

City Council Speaker Christine Quinn, a mayoral hopeful, has supported using public housing apartments and federal housing vouchers to move people out of shelters. The city, meanwhile, has opened at least nine new shelters this summer.

“Since just May, more than 2,000 children have become homeless,” said Ralph da Costa Nunez, CEO of the Institute for Children, Poverty, and Homelessness. “If the trend continues, we will surely see more than 20,000 children living in shelters by Christmas — a gift that nobody wants.” Read more >>

Planned job cuts up 14% in 2011

Planned job cuts dropped in December but were up 14% overall for 2011, according to a report from outplacement consulting firm Challenger, Gray & Christmas.

December's total of 41,785 announced lay-offs was a 1.6% drop versus November, and was the lowest monthly total since June. Total announced job cuts for 2011, however, hit 606,802, up from the 529,973 announced in 2010.

The increase in cuts was driven primarily by lay-offs in government and financial sector jobs, which together accounted for 41% of all announced job losses.

With pressure on governments at all levels to cut spending and the European debt crisis still unresolved, both these sectors are "likely to continue to struggle in 2012," Challenger CEO John Challenger said in a statement accompanying the report. More...

Donations to Salvation Army drop 10 percent

Image via WikipediaDonations to the Salvation Army’s iconic red kettles are down 10 percent in the Chicago area this year when compared with the same time last year, the organization said today.

The dip is likely due to a combination of factors, including the country’s continuing economic struggles and a decrease in both the number of bell ringers and the number of sites where the kettles can be placed, said Lt. Col. Ralph Bukiewicz, divisional commander for the Chicago region.

“Having fewer sites, fewer workers and a greater need throughout (the area) seems to be creating an ever-widening gap,” Bukiewicz said.

The kettles first appeared throughout the area this year on Nov. 18 in an effort to raise $13 million, Bukiewicz said. As of Tuesday evening, the organization had raised about $7.3 million, or just over 56 percent of its goal, Bukiewicz said. More...

Challenger - planned job cuts surged to a 16-month high in July

The number of planned job cuts surged to a 16-month high in July -- rising 60% in July to 66,414 from June's 41,432, according to outplacement consulting firm Challenger, Gray & Christmas.

The firm characterized it as a "sudden and unexpected burst" in downsizing.
Job killing companies

The data was hardly a surprise though, given a flurry of mass layoffs announced in the last few weeks by Cisco Systems, Merck & Co., Borders, Lockheed Martin and Boston Scientific. Those five companies alone accounted for 38,100 planned cuts in July.

"What may be most worrisome about the July surge is that the heaviest layoffs occurred in industries that, until now, have enjoyed relatively low job-cut levels, including pharmaceuticals, computer and retail," John A. Challenger, chief executive officer of Challenger, Gray & Christmas said in a statement.

Employers have now announced a total of 312,220 planned job cuts this year -- down 8% from 339,353 cuts announced in the first seven months of 2010. More...