Fed Cuts Rate to 0%, but Housing Starts Crumble Along with Jobs – Tuesday (12-16-08)

Mike: Today’s big financial story is the Federal Reserve dropping its key interest rate to near 0% to help stimulate the economy and revive job growth. Let’s hope it has its intended affect:

WASHINGTON (AP) — The Federal Reserve has cut its target for a key interest rate to the lowest level on record and pledged to use “all available tools” to combat a severe financial crisis and prolonged recession.

The central bank on Tuesday said it had reduced the federal funds rate, the interest that banks charge each other, to a range of zero to 0.25 percent. That is down from the 1 percent target rate in effect since the last meeting in October. Many analysts had expected the Fed to make a smaller cut to 0.5 percent.

Fed cuts target for key rate to record low

Mike: The auto bailout saga continues, but it looks like help is on the way, eventually:

WASHINGTON (AP) — Detroit automakers, teetering on the brink of collapse, are receiving strong signals from the White House that short-term help is on the way while a key senator says the relief package could reach $15 billion for GM and Chrysler.

President George W. Bush said a bankruptcy in the U.S. auto industry would hurt the economy while the U.S. deals with the recession. General Motors Corp. and Chrysler LLC have said they could run out of cash within weeks without support from the government.

via White House assures automakers help is on the way: Financial News – Yahoo! Finance.

Side note Mike: Yesterday the NAHB said its preliminary NAHB/Wells Fargo Housing Market Index was 9 in December, which remains at a record low. During the 2002-2007 giddy years, homes were built on speculation and that speculation has come back to haunt the housing market and the overall economy. There are currently millions of homes for sale and hundreds of thousands of those are unaffordable new homes. The following article shows how the NAHB is trying to pump start the new housing market by having the feds (the taxpayer) contribute to a housing tax credit. Unfortunately, that plan will not help the housing market and the associated employment. House prices need to come back to a long term norm that reflects earnings, which is about times times earnings. If a family makes 75k a year, then they can afford a $225,000 home. No amount of taxpayer bailout of housing is going to help the situation. Improvement will only occur when homes are affordable, no matter how much the NAHB wishes they would. 

The National Association of Home Builders (NAHB) is spearheading Fix Housing First, one of the largest coalitions of housing advocates ever assembled in the United States, to push for a housing recovery plan that will revive the economy.

“If we are going to successfully pull our nation out of recession, we must address housing first,” said NAHB President and CEO Jerry Howard.

NAHB Hopes to Revive Economy with Fix Housing First

WASHINGTON (AP) — The construction of new homes plummeted in November by the largest amount in almost a quarter-century as builders slashed production in the face of a recessionary economy.

The Commerce Department said Tuesday that new home starts fell to a seasonally adjusted annual rate of 625,000 from a downwardly revised level of 771,000 in October.

 

That is a drop of 18.9 percent, the steepest since March 1984. The total is far below the 740,000 pace that Wall Street economists expected.

via Housing starts fall more than expected: Financial News – Yahoo! Finance.

Orange County officials plan to deliver layoff notices to social services workers in two weeks and are preparing to proceed with further job cuts even as union officials argue that the county should search for alternatives. 

Termination notices will be given to 210 social services employees Dec. 29, giving the workers two weeks’ notice before they lose their jobs, county spokeswoman Pat Markley said Monday. 

Orange County to lay off social service workers Dec. 29

In a town of fewer than 13,000 people. In the midst of the worst financial crisis in generations.

“It’s going to test us,” says Mayor David Raizk. “The numbers are frightening.”

Thousands of layoffs by DHL, ABX Air hit Wilmington, Ohio

Wolf Block has laid off 15 associates and staff and Drinker Biddle & Reath let go of somewhere around 20 or fewer attorneys on Friday, according to the blog.

There were rumors late last week that Wolf Block had suggested to some attorneys that they look for other positions. It is unclear if those rumors are directly related to these layoffs.

Layoff Reports Swirl Around Wolf Block and Drinker Biddle

With a view to cutting costs and repositioning the company to suit the changing economic conditions, Air Products & Chemicals Inc. (APD: News ), a diversified chemicals company, Tuesday announced the elimination of 1,300 positions or about 7% of the company’s global workforce. The company is taking a restructuring charge to earnings in its fiscal 2009 first quarter, mostly stemming from employee reduction. Further, the company lowered its profit forecast for the first quarter of 2009.

Air Products & Chemicals to slash 1300 jobs

 

Sweeping cutbacks by chemical makers are exacting a heavy toll on a large but lesser-known part of the industry’s work force, the thousands of contract laborers who work alongside full-time employees at chemical manufacturing sites in Texas and elsewhere.

via As chemical industry slashes jobs, Texas may feel it worst | Business | Chron.com – Houston Chronicle.

All 632 Invista workers at the company’s Waynesboro plant have received notice that they could be laid off Feb. 8, according to federally required documents filed by the fibers manufacturer with the state.

That figure is three times higher than the 210 layoffs announced by the company last week. Invista spokeswoman Jodie Stutzman said today that because the company has not identified specifically which workers will be laid off, it included all employees in the notice. The company has said an undisclosed number of contract workers also will be laid off as part of a plan to idle nylon production.

via All Invista workers notified of layoffs | Waynesboro News Virginian.

Colville Indian Power and Veneer will lay off 253 people on three shifts and Colville Indian Precision Pine will lay off 127 people on one shift from Dec. 19 through Jan. 3, tribal officials announced today.

Hundreds at Omak mills face temporary layoff

About a dozen or so employees at both CBS Entertainment and CBS Paramount Network TV will be departing. This includes Maria Crenna, executive vice president of CBS Paramount, as well as senior vice president of comedy development Brian Banks, according to a number of media industry reports.

CBS Corp. Begins Selective Programming Job Cuts

Columbian Chemical is located on Route 2 along the Ohio River in Marshall County. Since 1971, it has produced a black carbon powder out of oil that is used to make ink, tires and other parts for the automotive industry, but now the plant is closing, taking with it 55 jobs. That has many employees like Christy Clinker-Bamberger worried about what the future holds.

The recession is starting to affect West Virginia and especially hard hit is the Northern Panhandle

KALISPELL – A major Flathead Valley contractor says it will lay off its 58 employees and close in mid-February because of the faltering economy.Goose Bay Equipment Incorporated has been in business since the 1970s. The company specializes in utility construction, especially in large subdivisions.

FLATHEAD VALLEY CONTRACTOR ANNOUNCES LAYOFFS

More city workers may end up in Eric Jones’ shoes, as the mayor outlined a plan for a new round of layoffs if unions don’t come up with concessions by the end of January.

Mayor Seeks $10 Million From Unions

Glatfelter officials said Monday there will be layoffs coming at the Chillicothe paper mill as the company institutes operating reductions as a result of a decrease in customer demand.

The Pennsylvania-based company announced a pending reduction in the operating schedule of the No. 10 paper machine to three days per week. The machine currently operates seven days a week.

via Glatfelter to lay off workers | chillicothegazette.com | Chillicothe Gazette.

Some 216 employees at New Process Gear will be laid off next week. Magna International sent us this statement: “The layoff reflects a combination of a considerable downturn in consumer demand for full-size trucks, a corresponding reduction in customer production volumes, and the overall economic conditions facing the North American auto industry.”

216 More Layoffs at New Process Gear

Mike: Here’s a video link to New Process Gear layoffsNew Process Gear video

Two more companies to add to the layoff list: Palo Alto’s Jazz Pharmaceuticals and Switzerland’s Arpida both announced new rounds of cost-cutting and layoffs today.

Jazz Pharmaceuticals is bidding farewell to 71 employees (24 percent of its work force) in its third round of layoffs this year.

Jazz and Arpida cut costs, jobs (from: FierceBiotech)

Another local biotech company, Rockville-based EntreMed Inc., is announcing deep cuts to save money and ride out a rough economic market.

via EntreMed cuts staff by 60 percent – Washington Business Journal: .

Best Buy: “The historic slowdown in the economy and its effect on our business over the past 90 days have been the most challenging consumer environment our company has ever faced,” Chief Executive Brad Anderson said in a statement. “We believe that there has been a dramatic and potentially long-lasting change in consumer behavior as people adjust to the new realities of the marketplace.”

Best Buy slashes costs following ‘potentially long-lasting change in consumer behavior’

KETTERING — Auto parts producer Tenneco is laying off 90 to 100 workers at its plant off Woodman Drive.

Jane Ostrander, a company spokeswoman, said employees were informed last week.

via Tenneco lays off about 100 Kettering employees.

Gov. David Paterson has projected a $1.7 billion current-year shortfal, and a $13.7 billion deficit in 2009-2010.

To address these deficits, the executive budget does the following:

State workforce: estimated 521 layoffs, deferring five days of salary payments, eliminating schedule 3 percent general slaray increase for 2009-2010, requiring state employees to contribute more for health care.

Gov. David Paterson has projected a $1.7 billion current-year shortfal, and a $13.7 billion deficit in 2009-2010

Not this time. The 22-year-old AFL announced Monday it’s canceling the 2009 season as it seeks to mold a better business model in tough economic times. The decision was pending an agreement with the players union.

Arena Football League cancels ’09 season

Apparel company VF Corp. said this week that with a weak 2009 expected, some units are cutting a modest number of jobs.

The company declined to say how many jobs would be eliminated pending notification of affected employees. But company spokesman Paul Mason said the Greensboro-based jeanswear and services groups, which includes information technology, will eliminate some jobs.

via VF planning job cuts – The Business Journal of the Greater Triad Area:

Eaton Cuts 4Q Forecast, Sees More Job Cuts Coming

Eaton Cuts 4Q Forecast, Sees More Job Cuts Coming

A Vishay spokesman could not say how many job cuts will be involved and added the company will provide that information, along with the resulting cost savings, when it files its 10-K annual report.

via Vishay cuts 4Q revenue guidance – Forbes.com.

Mike: I find it amazing that when people most need the services of public safety, the budgets are slashed, as appears to be the case in Cincinnati:

Hamilton County commissioners are expected to pass a 2009 budget Wednesday night, and neither the three commissioners nor the county sheriff have found the $10 million needed to keep the 800-bed Queensgate jail open.

That means the proposed closure is real. The county’s second-largest jail will likely close by the end of the year.

The sheriff has been releasing inmates early, refusing admissions and delaying sentences to cut the population. As of early Monday, the inmate count for the Queensgate jail stood at 212.

The closure leaves many concerned about public safety.

Days dwindle for Queensgate jail

According to a survey of 660 Minnesota nonprofits, more than half have had declining revenues this year and one quarter had already cut staff. Nearly half report increasing service demands.

Survey paints worrisome picture for Minnesota nonprofits

MADISON (WKOW) — More and more, laid off workers in Wisconsin are filing for unemployment benefits.

The Department of Workforce Development’s Unemployment Insurance administrator said there were 40-percent more claims filed last week compared to the same week a year ago.

“It happened very fast,” Bergan said Monday, describing the overall spate of layoffs over the past two months.  “It happened very dramatically.”

Unemployment fund in Wisconsin likely to run dry in February

Miami International Airport may be one of the few places where American Airlines is increasing its flight capacity. But, come Jan. 30, the company expects to lay off 97 employees there.

Nationwide, American may lay off up to 367 employees based in five cities: Miami, Los Angeles, Chicago, San Francisco and Raleigh, N.C., spokeswoman Tami McLallen said.

via American Airlines plans layoffs at MIA – South Florida Business Journal: .

Bay County, Fla: 
Bay District School Board Chair Ginger Littleton confirms that plans are underway to lay-off several teachers. 

School Board member Ryan Neves says he received an email from Superintendent Bill Husfelt detailing plans for the lay-offs. 

Bay District Teacher Layoffs

Jekyll authority cuts staff

The Jekyll Island Authority, reacting to a dismal economy and a sharp drop in tourism, is cutting staffing in an attempt to balance its budget. Executive Director Jones Hooks told the authority board Monday it needs to cut 13 full-time positions and 35 part-time jobs, as well as reduce the work hours for 20 full-time and five part-time employees.

Gehl Co. plans to lay off 62 salaried employees and 19 hourly employees due to the softening economy and a slump in construction equipment sales.

The cuts represent about 18 percent of Gehl’s 350-person U.S.-based salaried work force. Most of the salaried employees affected by the layoffs work at or report to the company’s corporate headquarters in West Bend.

via Slumping sales leads to job cuts at Gehl – The Business Journal of Milwaukee: .

Regal Beloit Corp. has notified the state Department of Workforce Development of its plans to shut down its Neillsville plant between Feb. 10 and April 30, 2009. The plant closure will affect 37 workers.

In addition, Mortgage IT Inc. has filed notice with the state that it plans to close its Middleton facility beginning Feb. 9, 2009. The closure will affect 72 employees.

via Regal Beloit, Mortgage IT plan layoffs – The Business Journal of Milwaukee: .

KETTERING, Ohio – Illinois-based auto parts supplier Tenneco Inc. says it is laying off up to 100 workers at its plant in the Dayton suburb of Kettering.

via Auto supplier Tenneco laying off up to 100 — chicagotribune.com.

Rea Magnet Wire Co., which produces magnet wire products, is suspending production at its 200,000-square-foot Las Cruces plant and consolidating manufacturing at facilities in Indiana and Mexico.

Las Cruces manufacturing plant closing

NEW YORK (Associated Press) – Midway Games Inc., maker of the popular “Mortal Kombat” video game series, will cut its head count by 180 people, or 25 percent of its work force, close a studio in Austin, Texas, and halt development of “noncore” games, according to a government filing Tuesday.

Midway Games to cut 180 jobs, 25 percent of work force, close Texas studio

With demand dropping in the PC market due to a worsening global economy, market sources indicated that AMD may lay off an additional 10% of their global workforce of around 15,000 employees in January 2009.

AMD may layoff additional 1500 workers in January

Kroll Factual Data laid off 17 workers in Colorado last week, the majority of them coming from the Loveland office, KFD President James Donnan said.

Kroll Factual Data laid off 17 workers in Colorado

The McMinn County Commission was forced to look at revenue shortfalls, some of which have already occurred and others which are possible, as part of Monday night’s meeting.

The Highway Department has been forced to eliminate five positions to date because of shortfalls in gas tax collections. Two positions were not refilled after retirements and another was that of a part-time employee who requested a temporary layoff.

Highway Dept. cuts jobs as tax dollars fall

The list of Mayor Gavin Newsom’s 409 mid-year layoffs shows that the majority of folks targeted are front line staff, who make under $70,000 a year. And that almost 70 percent of these lay-offs (285 positions) are in the Department of Health.

The Layoff List – San Francisco

Enterprise software maker Infor Global Solutions quietly laid off about 5 percent of its roughly 9,000 workers this week, making it the latest of its peers to trim staff during the economic downturn.

Layoff Announcement

Jason Gorss, a spokesman for the college in Troy, confirmed that layoffs occurred today, but declined to say how many positions were cut. He also would not say what job titles were affected.

RPI Layoff Announcement

Apparel company VF Corp. said this week that with a weak 2009 expected, some units are cutting a modest number of jobs.

The company declined to say how many jobs would be eliminated pending notification of affected employees. But company spokesman Paul Mason said the Greensboro-based jeanswear and services groups, which includes information technology, will eliminate some jobs.

VF Corp. Layoff Announcement

Just over a year after opening, 84 Lumber on Monday closed its truss manufacturing facility in McFarland.

The closing resulted in 28 people losing their jobs at the 32,000-square-foot facility. The company’s 24,000-square-foot retail outlet will remain open, said company spokesman Jeff Nobers.

84 Lumber Layoff Announcement

Mike: The following video shows the unemployment issues in North Carolina:

Momentive Performance Materials Inc., a locally based manufacturer, will lay off 250 workers worldwide, including 15 in Waterford.

The announced job cuts on Tuesday represent the latest evidence of the company’s struggles in the ongoing recession. The privately held company makes adhesives, resins and sealants for a number of industries, including the semiconductor, cosmetics, agriculture and electronics fields.

Momentive announces new round of layoffs

Select Comfort Corp. announced Tuesday it is laying off 120 workers, or roughly 22 percent of the work force at its Plymouth headquarters.

The layoffs are part of a broader cost-cutting initiative “in response to further slowing of sales after Thanksgiving and in anticipation of continued macro-economic challenges in 2009,” the bed retailer said in a statement. The company is best known as the creator of the Sleep Number bed.

Select Comfort cuts 22 percent of headquarters employees

DEXTER, Mo. – Emcon in Dexter will be laying off up to 200 employees.

According to Louie Seay with the United Auto Workers Union, the company will ask employees to volunteer for the temporary layoffs.

Emcon to Lay Off Up to 200 Employees Temporarily

NEW YORK (AP) — Drugmaker Bristol-Myers Squibb said Tuesday it will eliminate another 10 percent of its work force through 2010 as it works to pare costs before it loses patent protection on key drugs.

The New York-based company says it will eliminate 800 positions by the end of 2008, including filled and vacant jobs worldwide. Bristol-Myers Squibb estimates it will save $1 billion by 2012 as a result of the moves, which come on top of $1.5 billion in cost cuts announced in December 2007. Those cuts will eliminate about 4,300 jobs through 2010.

Bristol-Myers to cut 10 percent of workforce

Nine months after it locked union workers out of its Van Wert, Ohio, auto-parts plant, Kongsberg Automotive announced it’s shuttering the plant and moving the operation to Nuevo Laredo, Mexico.

The plant had 328 workers when the lockout began April 1, but Norway-based Kongsberg said 105 workers would lose jobs in the move, which will be completed next summer. The company also plans to move 100 jobs from Haysville, Kan., to Matamoros, Mexico.

Van Wert plant closing; 105 jobs lost

Mike: I hope you were able to find some useful information here today and now for today’s laugh:

 

Tom Toles - Dec. 15

Tom Toles - Dec. 15

 

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