Archive for December 23rd, 2008

Councilman Steve Leal announced that he will not be seeking another term of office.  An open seat on City council will surely make for fun blogging in 09′.  Will the business community field a candidate? Will the discussion change from plastic bags, rain water harvesting and Kidco/Jobpath to, I don’t know, IMPORTANT STUFF?

From an earlier blog post regarding Leal:

This story goes right up there with Leal locking himself in Pima County jail over night.

This is better than Barney Fife and an episode of The Andy Griffith Show. 

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Some of the AZ Star comments worth a look:

8. Comment by Max M. (20YearResident) — December 22,2008 @ 1:17PM

Ratings:   -9 +22

 Steve Leal had all the makings to be a great city councilman.However, he chose to pander those qualities away and as the writer above said became an empty suit.Mr. Leal when you try to stand for all things your message is that you stand for nothing.The rest of your city council will follow suit as the public sentiment to transparent crooks is become worn and frayed.

Perhaps if you had taken your actual constituents to heart rather than businesses money to pocket you would’ve become someone great in this town.

Yet, I am sure you have built love with Jim Click and friends and perhpas one of them can find you a job selling cars or insurance.

But history will only look at you as another crook in a city full of crooks and you will be soon forgotten.

Thank God.

Merry Christmas Tucson.

 

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From the Wall Street Journal:  By ILAN BRAT , ELLEN BYRON and JENNIFER LEVITZ

At Quality Environmental Professionals Inc. in Indianapolis, the crumbling economy forced a decision about the doughnuts.

When the environmental consulting business renewed its credit line last month, the interest rate nearly doubled to 10% from 5.25%. Fuel costs for the company’s vans and trucks had risen. Customers were taking longer to pay bills.

Chief Executive Deb Peters says she didn’t want layoffs, so she asked some of her 33 employees to mow the company’s lawn and do other yard work, saving $7,000. Another $7,000 in savings came from switching the ink on Quality’s letterhead to black from color.

Then the operations manager tried to halt delivery of $130 worth of doughnuts, bottled water and vanilla coffee creamer for a monthly staff meeting. No way, Ms. Peters said. Employees who work billable hours agreed to work one or two more per week to pay for the treats.

“It’s like riding a roller coaster,” she says of running her business these days.

Across the U.S., companies are looking for cuts in every budgetary nook and cranny in an economy dragged down by slowing consumption, an imploding stock market and tight credit. They’re cutting payrolls and scrimping on everything from photocopying to free coffee, from sales trips to shampoo. Some are having to reluctantly turn away business because they can’t borrow enough money to accommodate it.

Louis Licari, founder of the tony Louis Licari salons in New York and Beverly Hills, Calif., recently installed new weight scales so hair-color solution could be more precisely measured. Hair-washers who use too much shampoo and conditioner will be scolded, he says. “There’s no more by-the-eye measuring — too much waste goes down the sink,” says Mr. Licari, whose salons employ about 120.

Still, to keep customers coming, he says he can’t afford to cut some costly perks, like the “major arrangement” of flowers at the front desk that is replaced every week. “We’ll still do coffees, teas, cookies and brownies,” he says. “Even if I have to bake them myself.”

At 2nd Wind Exercise Equipment Inc. of Minneapolis, “We’re analyzing things with a magnifying glass,” says Chief Executive Dick Enrico. Sales managers traveling to the company’s fitness-machine stores have been ordered to compare the cost of renting a car versus expensing the use of their own vehicle at federal mileage rates.

At Shooters Restaurant & Sports Bar in Wareham, Mass., food sales have dropped almost 80% in the last month, prompting a new menu of “recession specials,” says Jim Hoban, an owner. Spaghetti and meatballs has been cut to $4.99 from $8.99. The fried clam plate is $7.99, down from $9.99.

“No one has got any money to eat out,” Mr. Hoban says of his largely blue-collar clientele. “We are basically giving the food away, hoping that they’ll buy a beer” or something else extra.

The Mashantucket Pequot Tribal Nation, which operates two big casino complexes in Connecticut, plans to lay off 700 employees, or about 6% of its work force, as revenue falls. Among the first to go was the nation’s chief executive, Patricia Irvin, whose position was eliminated. “Although it has taken a few months, the recession’s impact can now be clearly seen in our industry,” Michael Thomas, tribal council chairman, said in a statement.

And construction by a different tribe, the Mohegan Tribal Gaming Authority, of a 39-story, 919-room hotel in Uncasville, Conn., recently was stopped because of the economy. The Mohegans had planned to spend $734 million on the hotel, a restaurant, a retail center and concert venue.

Hinckley Co., a storied Portsmouth, R.I., yacht builder, last week said it was shedding 49 workers, or about 9% of its work force, citing a sudden slowdown. The company was hitting its sales targets through the year’s first two quarters. “The tipping point really was the last 30 days,” says Edward A. Roberts, vice president of marketing and product development, “when we saw a fairly abrupt change in the demeanor in people getting to the last step” of the buying process. People who negotiated contracts to buy boats were suddenly unwilling to sign, he says.

Instead of sending the usual four boats to a major show in Annapolis, Md., next week, Hinckley will send two, and two salespeople instead of five. “We’ll still open a bottle of champagne in the afternoon,” Mr. Roberts says. “We won’t switch to beer.”

The Greyhound Lines Inc. bus depot in Montpelier, Vt., will shut its doors next week because of a ridership drop, says station manager Michael Coffin. Starting Tuesday, Greyhound plans to cut one of its four daily round trips between Vermont and New York City. That means Mr. Coffin may lose 25% of his customers and ticket-sales commissions. “I’m pretty much going to be forced to close, and get myself back out in the work force,” says the 50-year-old Mr. Coffin.

Others are missing opportunities. Three weeks ago, Vista Window Co. of Warren, Ohio, received a surge in orders for its vinyl replacement windows after a competitor shut its doors. Vista sought a $1.75 million loan to hire workers, buy machinery and raw materials and secure more warehouse space, says Ed Kalaher, vice president of corporate affairs. Its bank refused, saying it was no longer comfortable with Vista’s debt-to-assets ratio. Vista turned away the business and will delay further expansion plans for at least another year, Mr. Kalaher says.

The company’s sales have grown by at least 40% a year since it opened seven years ago and this year are expected to hit more than $20 million. “In years past, there was a certain amount of value that momentum, growth, opportunity brought with lenders,” Mr. Kalaher says. “That doesn’t hold any weight anymore.”

Lifeline Program, an insurance-settlement company in Atlanta, saw its revenue grow 20% annually for six years while relying on loans of up to $250 million every 18 months to finance its operations. But its usual lender, part of a multinational bank, shut the door on the company’s most recent request for money, forcing it to lay off half its 50 employees. “This has been a shocking blow to me as a business owner,” says Scott Page, the company’s president and chief executive.

Bonnie Ulman, president and founder of Haystack Group Inc., an Atlanta public relations firm, noticed earlier this year that clients were taking longer to finalize contracts and pay bills. Rather than replace several employees who left, she asked her 15-member staff to take on additional tasks. To save on magazine subscriptions, Ms. Ulman asked workers to find cheaper online options. Employees started to make two-sided photocopies and favor the U.S. Postal Service over FedEx.

“We used to give $10 Starbucks gift cards [to top performers] every week, but that’s cut to every month,” Ms. Ulman says. Rather than celebrate the holidays this year with dinner at a fancy restaurant, employees and clients will volunteer for Habitat for Humanity, then eat at Ms. Ulman’s home.

“You’ve got to batten down the hatches to stay focused on the firm and your clients,” says Ms. Ulman.

—Timothy Aeppel, Paulo Prada, Philip Shishkin and Sara Silver contributed to this article.

Write to Ilan Brat at ilan.brat@wsj.com, Ellen Byron at ellen.byron@wsj.com and Jennifer Levitz at jennifer.levitz@wsj.com