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Pete Bigelow · Midwest Memo: Unemployment applications back above 400,000; Wisconsin property values decline
August 18th, 2011
Three stories making news across the Midwest today:
1. Mixed unemployment numbers. The number of people applying for unemployment benefits rose above 400,000 last week, but the nation’s four-week average fell to the lowest levels seen since mid-April, according to The Associated Press. A report from the U.S. Labor Department said Thursday that applications rose to 408,000. They have remained above 400,000 in 18 of the past 19 weeks. But the four-week average fell for the seventh consecutive week to 402,500.
2. Wisconsin property values decline. For the third consecutive year, property values fell across Wisconsin in 2010. The value of homes, businesses and other property declined by 1.8 percent to $487 billion, according to a report by the state’s Department of Revenue. In 2009, values declined by 3.1 percent. Before the three-year slide, Wisconsin had only one other year on record, 1959, when property values declined, according to the Milwaukee Journal Sentinel.
3. Lyric Opera averts strike. Officials the Lyric Opera of Chicago and America Guild of Musical Artists announced a tentative, one-year contract agreement Wednesday that likely averts a strike, according to the Chicago Sun-Times. The agreement must still be ratified by union members and the Opera’s board of directors. The opera’s seasonal performances are scheduled to begin on Sept. 10 at Millennium Park.
Pete Bigelow · Midwest Memo: Obama Plans Jobs Speech, Ohio Trims State Employee Ranks, Great Lakes Projects Receive Funding
August 17th, 2011
Three stories making news around the Midwest today:
1. Obama revising economic plan. Seeking a boost for a flagging economy, President Obama will “give a major speech in early September to unveil new ideas for speeding up job growth,” according to a report Wednesday from the Associated Press. The plan will likely contain tax cuts, infrastructure ideas and steps to help the unemployed, according to the report, and will go beyond the “infrastructure bank” idea the President has pitched in recent weeks that would finance construction jobs.
2. Ohio loses public employees. The number of Ohio state employees dropped by more than 1,000 in the first half of Gov. John Kasich’s first year in office, according to our partner station Ideastream. The current count is just more than 57,000, although more trimming is expected because of spending cutbacks that took effect in July under the current fiscal budget.
3. EPA awards Great Lakes funds. Federal officials announced Wednesday a list of upcoming projects that will be funded under the ongoing Great Lakes Restoration Initiative. More than $700 million has been spent or committed under the initiative under President Obama, according to the Milwaukee Journal Sentinel. “For the regional economy to thrive, we need to accelerate our efforts to comprehensively attack problems such as habitat loss, invasive species and pollution,” said Cameron Davis, the EPA’s spokesperson for the program.
August 17th, 2011
Our Changing Gears team has been looking at how the Midwest is adapting to new economic realities. But that can mean sticking to what you know best. From Cleveland, David C. Barnett takes us to Pierre’s Ice Cream Company, where a mix of old family values and new technology has helped it stay in business for 80 years.
America was ice-cream crazy in 1927. It was the Roaring ‘20s, and a high-calorie dessert fit in with the age of excess so well that band leader Fred Waring celebrated with a hit song with “I scream, you scream, we all scream for ice cream” lyrics still familiar today.
Five years later, the music of Depression-era America was much more somber. But a Cleveland businessman named Alex Basset figured it was the perfect time to open a business that catered to the public’s need for an indulgence, albeit an affordable one. It would be something to help them forget hard times, an ice cream shop.
He called it “Pierre’s.”
“I am told it was a fabricated, dreamed-up name to go along with the reputation that the original founder wanted, which was for French ice cream and real high-quality, gourmet ice cream,” said Shelley Roth, whose father, Sol, bought the business from Basset in 1960.
Roth says Pierre’s stuck to that founding philosophy, selling a high-class product that didn’t put too much strain on working-class wallets. But Pierre’s hasn’t been afraid to be flexible and innovate.
“When you focus on what has helped us survive through good and bad times, I think, in many ways it’s because we keep up with technology,” she said.
Blobs of mint ice cream with the unlikely name “Moose Tracks” plop into a line of pint containers in Pierre’s new 35,000 square-foot facility, which allows the company to produce eight times its previous capacity. In the midst of computer-controlled machinery stands Ray Kralik, the company’s decidedly old-school supervisor.
He started working at Pierre’s when he was 16. That was 39 years ago. He’s kind of link that guy at the hardware store who mixes customized gallons of paint, adding gallons of flavors to stainless-steel tanks of churning cream while following long-established guidelines that he long ago committed to memory.
Last Christmas, Pierre’s named a flavor in honor of Ray Kralik – “Ray’s Rootbeer Float” – to celebrate his nearly forty years of institutional memory.
“Ever since I started, I was treated good by Sol Roth, Shelley Roth,” Kralik said. “It’s like a family.”
But some “family” members left last year. Eight full-time and three part-time workers were cut, trimming the company workforce to 85. Sometimes, as Pierre’s learned, job loss is the price of greater technological efficiency. That and a lousy economy.
Between population loss and the rising costs of ingredients, Shelley Roth said Pierre’s local profit
margins have been battered in recent years. The company is counting on the new facility to expand capacity and reach outside the region, which means going up against the big boys.
“This past recession has been the most difficult,” she said. “Because we compete with many of the global conglomerates that now really own most of the brands in the supermarkets, it’s very competitive. But, we still persevere, because we stick to our values.”
Even in the modern era, when the competition is between companies that are featuring new concoctions with flavors such as “French Toast,” “Strawberry Basil” and “Riesling Poached Pear,” Pierre’s “bread and butter” is good old French Vanilla. Roth says the company is currently in discussions with food industry officials in other countries who are interested in importing American ice cream – American ice cream, with a French name.
August 16th, 2011
Three stories making news across the Midwest today:
Layoffs or Liftoff? That’s the question the Chicago Tribune poses today about the ramifications of Google’s purchase of Libertyville, Ill.-based Motorola Mobility. Earlier this year, the state of Illinois bestowed $117 million in incentives upon the company in order to keep its 3,300 jobs. Monday’s announcement has stoked fears that Google could move some or all of the jobs to California, but it has also brought some hopes that the company could invest more dollars in Illinois. Crain’s Chicago Business takes a look at the situation here.
New Prius Plug-in Gets 107 MPG. President Obama recently announced new fuel economy standards that require cars to get 54.5 miles per gallon by 2025. But the new Toyota Prius may get double that. A 107-mpg hybrid Prius will debut at an auto show in Frankfurt, Germany next month, according to AOL Autos. The plug-in relies on gas and battery power. It is expected to challenge the Chevy Volt and Nissan Leaf when it reaches the U.S. market in early 2012. Toyota, which has operations in Michigan, Indiana, Ontario and elsewhere, can use some good news. It has had a difficult year, with the auto industry slowdown, the tsunami and earthquake in Japan, and the lingering impact of its quality problems.
Gentex Announces Michigan Expansion. Automotive parts maker Gentex Corp. said today it will invest $160 million over five years to add facilities in Western Michigan. The expansion is expected to bring as many as 1,100 new jobs in Zeeland and Holland Township. A tax credit provided by the Michigan Economic Growth Authority of $2.4 million over three years helped Western Michigan win the jobs over a competing site in Alabama, according to the Holland Sentinel.
It’s been a tumultuous and expensive year for Wisconsin politics, and it comes to a conclusion today, at least at the polls. Two Democratic state senators face recall elections today, in the wake of the state’s new law that sharply limits public employee collective bargaining rights.
Republicans are assured of keeping control of state government, where they hold the governor’s seat and majorities in both the state senate and the assembly. But they could widen their one-seat state senate lead by upsets. Read more from the Milwaukee Journal-Sentinel.
Last week, Republicans took four of six senate seats that were part of the recall effort, with Democrats claiming two victories. In all, the campaign to unseat state senators has cost an estimated $37 million.
The Wisconsin recall effort has attracted national attention as states in the Great Lakes and elsewhere grapple with tight budgets. It followed dramatic weeks of protests in Madison over Gov. Scott Walker’s effort to pass a law severely limiting public employees’ collective bargaining rights. The Democrats facing recalls today were among 14 senators who left the state, rather than vote on the legislation.
Walker, who was elected last November, could face his own recall effort by Democrats next year.
Check out Changing Gears’ continuing coverage of the Wisconsin political situation and the efforts by lawmakers across the region to affecting public employees.
There’s major technology news for our region, with the announcement by Google that it is buying Libertyville, Ill.-based Motorola Mobility for $12.5 billion in cash. Google said it would pay $40 per share, a 63 percent premium, based on the company’s Friday closing price on the New York Stock Exchange.
On Monday, shares of Motorola Mobility jumped as much as 59 percent, Reuters reported.
Mountain View, Calif.-based Google, which has offices around the Midwest, has been collaborating with Motorola Mobility for some time on its Android-operating system cell phones.
Crain’s Chicago Business billed the buy as a win for both companies, saying that Google gets more than 17,000 Motorola patents to solidify the Android software. Key Motorola Mobility shareholder/billionaire investor Carl Icahn called it a “great outcome for all shareholders”.
Still, the announcement came as a surprise to the local tech community, Wailin Wong of the Chicago Tribune reported. In May, after reportedly considering a move to California, Motorola Mobility accepted $117 million in incentives over 10 years from the state of Illinois to stay and retain about 3,000 jobs.
A spokeswoman for Gov. Pat Quinn said the state expects Google keep workers here in Illinois, rather than move them to California. She told Crain’s via email,
“We welcome Google’s expanded presence in Illinois, and would expect that Google will live up to the agreements that Motorola Mobility made to the state, which includes keeping its corporate headquarters here, along with thousands of high-tech jobs and hundreds of millions of dollars in private investment.”
The big question — how many of these jobs will stay in Illinois – has yet to be answered.
August 15th, 2011
All kinds of ideas are being floated to jump start the economy — jobs programs, tax credits, incentives for big companies to invest. But small businesses also play a big part in the Midwest economy.
Leduc Blueberries in Paw Paw, MI.
What kind of support would help small businesses be successful? Are more incubators the answer? Have you been helped by one?
We’d love to hear your stories and thoughts about surviving as a small business. Take our survey, and share your advice for other companies in getting through the recession.
August 12th, 2011
The Detroit Symphony Orchestra was silent for six months due to a musicians’ strike that ended in April. Now, Chicago’s famed Lyric Opera could follow suit.
Our partner station WBEZ reports the American Guild of Musical Artists is telling its members to be prepared to picket the annual free concert next month and possibly strike on opening night.
A strike would put a damper on the debut season in Chicago for the noted soprano Renee Fleming, who has taken a high-profile role with the Lyric.
Union Executive Director Alan Gordon said the Lyric is threatening to lock out workers a week from Monday, if there is no deal.
“We’ve made sacrifice after sacrifice in an effort to help Lyric improve its fiscal position, and we do not expect to be paid back by threats,” Gordon said. He said negotiations are stuck because the Lyric wants to cut pay and benefits.
A Lyric spokeswoman confirmed the company is in contract negotiations, but wouldn’t comment because she said the company’s policy is not to negotiate in the media.
The Lyric’s orchestra threatened a strike on the opening night of an opera two years ago over similar issues, saying members couldn’t agree to a pay freeze and shorter seasons that would essentially cut pay. The parties resolved that dispute and avoided a strike.
August 12th, 2011
We told you last month about the joint approach that two big cities in Kentucky — Lexington and Louisville — are taking to economic development. Well, they aren’t wasting any time in getting started.
The effort by Mayors Greg Fischer of Louisville and Jim Gray of Lexington kicked off on Thursday with an appearance before 1,100 people at a Leadership Louisville luncheon. The partnership will be called the Bluegrass Economic Advancement Movement. Here’s the story from the Louisville Courier-Journal.
“We want the national decision makers, the international investment decision makers, to say, ‘we’ve got to play in the Bluegrass region,’” Fischer said. “So this is a question about us coming
together and being cooperative.”
The partnership was announced earlier this summer at the Clinton Global Initiative in Chicago. The two cities, each home to major auto and parts plants, want to become a national center of advanced manufacturing. It’s a specialty that the Great Lakes states have always claimed as their own.
Is this an idea that our states should try? Would you like to see a partnership between Cleveland and Columbus, or Madison and Milwaukee? Or are towns better off in going it alone?
August 12th, 2011
Three must-read stories about the Midwest economy to start your weekend.
Groupon Glow Fading? Doubts are rising about the success of an upcoming initial public offering by Groupon, the company that offers discounts at a wide range of businesses. Crain’s Chicago Business says analysts are wondering whether Groupon, which posted a second quarter loss, can get the price for its stock that it hoped when it announced the offer in June. The shares are supposed to go on sale next month.
“I’m sure they could price an IPO, (but) I don’t know if they could get the valuation they’re talking about,” Darren Fabric, managing director of Chicago-based Ipox Capital Management, told Crain’s. “The lower the volatility and the more speculative the market, the more Groupon will be helped. And those conditions aren’t there right now.”
Another Chicago company, Trustwave Holdings, put off its I.P.O. earlier this week, Crain’s says.
Cameras Cover Detroit: Smile the next time you’re in downtown Detroit. Law enforcement officials now can view images from 350 cameras around the central business district as part of a coordinated effort to protect people who live, play and work downtown, the Detroit News reports.
Photo submitted by Joshua Mango
For the past six months, Detroit Police officials have been able to access the images from 18 downtown businesses such as General Motors Co., Ilitch Entertainment, the city’s three casinos and Compuware.
Underemployment in Focus: National unemployment numbers focus on people who are looking for jobs, but can’t find them. But John Russo, head of the Youngstown State University Center for Working-Class studies, says the 9.2 percent unemployment rate doesn’t tell the whole story.
He says the complete unemployment figure is about 26 percent. Russo counts people working part-time but who want to be working more, people who stopped looking for a job, people on disability or who filed early for Social Security and people living on government assistance. Hear the story from our partner station ideastream.