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As Sales Fall, Allergan Seeks a Buyer for Lap-Band

October 31, 2012 by Leave a Comment

The falling sales “do not fit the profile of a high-growth company like Allergan,” David E. I. Pyott, the company’s chief executive, told analysts Tuesday morning on a call announcing the company’s third-quarter financial results.

In an interview, Mr. Pyott said Allergan had already hired an investment banking firm, which he would not name, and was sending letters to other medical device companies and private equity firms seeking a buyer for its obesity business, which also includes a balloonlike device that is not approved in the United States but is used in some other countries.

The Lap-Band, a silicone ring that is wrapped around the stomach and can be inserted in an outpatient procedure, once appeared to have a bright future as a less drastic, if less effective, alternative to gastric bypass, which involves rerouting the digestive tract.

But Allergan’s obesity business sales have fallen from a peak of $296 million in 2008 to an expected $160 million this year. In the third quarter, the sales fell by 25 percent to $37.4 million from a year earlier.

The obesity business, while still profitable, represents less than 3 percent of total product sales for Allergan, which is known most for its Botox treatment for wrinkles, migraine headaches and other conditions.

Although one-third of American adults are obese, the number of weight loss surgeries in the United States — about 160,000 a year — has stopped growing, largely because of the economy, Mr. Pyott said. Many patients pay out of pocket for weight loss surgery, and even when the procedure is covered by insurance, there can be a co-payment of thousands of dollars.

Mr. Pyott said Allergan had made progress in the last year in lowering barriers to insurance coverage, but it was not sufficient to reverse the decline in sales of the Lap-Band.

But gastric banding has also lost market share among weight loss surgeries, falling to about one-third from 44 percent a year ago, Mr. Pyott said. Lap-Band has most of the market among bands, although Johnson Johnson also sells such a product.

Gaining in popularity has been sleeve gastrectomy, which involves cutting out part of the stomach. It is considered midway between banding and bypass in terms of both effectiveness and the degree of invasiveness of the surgery.

Dr. Marc Bessler, director of the center for metabolic and weight loss surgery at Columbia University, said that Lap-Band had lost some luster among bariatric surgeons because studies suggested it was not effective in the long run for one-third to two-thirds of patients.

“You had data coming out that 10-year outcomes are not what we were expecting,” Dr. Bessler said.

One study in Europe, for instance, published in The Archives of Surgery last year, reported that over 12 years, 60 percent of patients needed another operation, often to remove the band, because of complications or lack of weight loss. Allergan has said that techniques have improved since the patients in that study received their bands.

In 2011, Allergan succeeded in getting the Food and Drug Administration to approve use of the Lap-Band for patients with lower weight than had been previously required. But that did not bolster sales, in part because of difficulty getting insurance to pay.

The company dropped efforts to get the Lap-Band approved for use in teenagers after controversy arose about the product’s safety.

There have been news reports about problems, including deaths, from the band.

Allergan said its overall product sales for the third quarter rose 6.1 percent from a year earlier to $1.39 billion. Earnings per share, after adjustments, rose to $1.06 from 92 cents.

Article source: http://www.nytimes.com/2012/10/31/business/as-sales-fall-allergan-seeks-a-buyer-for-lap-band.html?partner=rss&emc=rss

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The 30-Minute Interview: The 30-Minute Interview: Pamela Liebman

October 31, 2012 by Leave a Comment

Ms. Liebman joined Corcoran in 1985, became a partner in 1990 and in 2000 was elevated to the firm’s helm.

Interview conducted and condensed by

VIVIAN MARINO

Q. So what’s new at Corcoran?

A. We’re about to launch our brand-new Corcoran.com. You’re the first person I’ve talked to about it.

Buyers are so much smarter today: they’re well armed with the many listing aggregation sites where people can search for homes. Brokers used to hold all the information.

But we are not a data company, so what we built is a “find” — not a search — site. Let’s say a woman is searching for a man on a dating site. Every guy says the same thing: they’re in great shape, have a wonderful head of hair and are financially well off. But wouldn’t it be nice to have a best friend who knows all these guys who can say, “Oh yeah, he’s financially well off because he lives with his mother and that great head of hair is a toupee.” Every apartment is going to be described as something great. What you really need is someone who’s going to navigate this for you.

Q. Exactly how will this new site differ from the old one?

A. The new site is going to be much easier to use on all mobile devices, but it also is going to have a lot more connections with social media. It’s not just about showing you the pretty pictures of the apartment or house. It’s about, what is the lifestyle experience of living there? We’ll have agents commenting on what’s happening in a neighborhood, what those neighborhoods are known for. We will continue to recommend restaurants, cultural activities. We try to bring this whole process to life. It’s not just about the apartment. So we don’t want to just send you 100 listings — and if it’s the West Village, four listings.

If you had searched for a three-bedroom on the Upper West Side, next time you come back to the site it’s going to remember you and say, ‘Hi, here’s what we think you might like.’ So it’s going to be more intuitive.

Q. Will the site include listings from other brokerages?

A. Nope.

Q. How would you describe business right now?

A. We are very busy. It’s a tough market again because we are severely lacking in inventory — we’re at a seven-year low — which is causing frustration on the part of buyers. They can’t find what they want and it’s leading to bidding wars or buyers being unsatisfied.

This lack of inventory, of course, is mostly on the higher end of the market. There are certain apartments that are not suffering: if you want a postwar one-bedroom in certain parts of New York City, we can show you lots of apartments. But if you want a larger four-bedroom on the Upper West Side, it’s going to be a struggle.

Q. Is this scarcity because of the influx of wealthy foreign buyers?

A. Well, the foreign investors are certainly having a big impact on the condominium market. But yes. What’s happening this year is we’ve seen buyers come from areas that weren’t as represented in the past, particularly from the Middle East. And, of course, everybody’s talking about the Chinese and their buying power.

Q. What percentage of your buyers are foreigners?

A. It’s not an exact science, but we look at our buildings that we are representing, and typically it’s about 30 percent. In some buildings, where it’s catering mostly to investors, the percentage can go well above 75 percent.

In 2007-8 we had a real big influx of foreign buyers and a lot of people coming in to flip apartments, but the characterization of the buyer today is different. It’s more of a buy and hold.

One57, interestingly, is half and half. Brazil, Venezuela, a lot of Latin America. [A week after this interview was conducted, a crane partly collapsed atop One57 as Hurricane Sandy approached the region.]

Q. Let’s talk more about One57, the “it building” for billionaires.

A. My favorite building! It’s not just for billionaires. There are a lot of apartments that have been sold to multimillionaires.

One57, since its launch, it’s become the hot building. Gary Barnett listened to what the sophisticated high-end buyer wanted and then he delivered it. Views of Central Park are probably No. 1, and they want large-scale rooms with high ceilings, exclusivity, fantastic amenities. They want to feel as though they’re living the way they deserve to live.

It’s a little over 60 percent sold — at an average price of $6,500 per square foot. And I just got word that we signed another contract on the way over.

Q. To whom?

A. That’s probably the most popular question I am asked. It’s an American buyer. It’s for about 4,400 square feet and it was just under $30 million. I can’t say any more.

Q. Do you see apartments being sold over the $100 million mark in New York?

A. There’s currently nothing on the market that’s worthy of it.

Q. What about more new developments for the middle class?

A. People want to maximize their returns when they build. The acquisition costs have become so high that it’s simply not financially viable to build a building that doesn’t sell for a very high dollar per foot.

Unfortunately, Manhattan is not an inexpensive place to live, and we struggle with that in a lot of the markets that we are in, like Palm Beach, the Hamptons and now Brooklyn, too. The average price this month of Corcoran Group sales was over $1.6 million. At the same time last year it was just under $1.4 million.

Q. You yourself live in New Jersey.

A. Somerset County. I also have a home in Miami. I do not have a pied-à-terre in New York. My family doesn’t want to make it too easy for me not to come home.

Q. You’ve had a pretty meteoric rise at Corcoran.

A. The funniest part of my story is that when I first interviewed with Barbara Corcoran she said to me, “You know, Pam, I really like you, but you don’t seem like the type that’s going to stick around very long.” So here I am some 27 years later.

Article source: http://www.nytimes.com/2012/10/31/realestate/commercial/the-30-minute-interview-pamela-liebman.html?partner=rss&emc=rss

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Archer Daniels Midland’s Quarterly Profits Exceed Expectations

October 31, 2012 by Leave a Comment

The company, one of the world’s top grain traders, said it turned in a “mixed” performance in its fiscal first quarter as oilseeds were strong, margins shrank in its ethanol business and the agricultural services business faced the worst American drought in half a century.

There are signs that the scramble for grains after the drought may be aiding a recovery by Archer and its chief competitors from a period of dismal earnings, as companies with geographically diverse resources can acquire and deliver grain where it is needed.

The company, based in Illinois, reported net earnings of $182 million, or 28 cents a share, in its fiscal first quarter ending on Sept. 30, down from $460 million, or 68 cents a share, a year earlier.

Excluding one-time charges, Archer’s earnings were 45 cents a share, exceeding analysts’ average estimate of 35 cents, according to Thomson Reuters.

Profit rose in the oilseeds processing unit but fell in the corn processing unit, as negative ethanol margins more than offset improved results from sweeteners and starches.

Revenue was flat at $21.81 billion, but topped analysts’ average estimate of $20.04 billion.

Article source: http://www.nytimes.com/2012/10/31/business/archer-daniels-midlands-quarterly-profits-exceed-expectations.html?partner=rss&emc=rss

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Advertising: Returning to Industry’s Roots With Lessons in Branding

October 31, 2012 by Leave a Comment

The class was held at the offices of the CreativeFeed marketing agency. About half the students were CreativeFeed employees while the rest were entrepreneurs more experienced in technology than in old-fashioned brand-building.

Mr. Berger, 62, retired from Euro last year after 25 years at the company, and has turned his attention to training the next wave of advertising and marketing employees.

The challenge is that with more agencies focusing on digital media, their employees need to come up with sophisticated algorithms and data analytics platforms to better tailor messages to consumers. Many agencies have reported difficulties in finding qualified employees to fill jobs that are technical in nature, but still creative. Old-fashioned branding may seem quaint, but Mr. Berger thinks it should not be ignored.

“I think that old school or new school, the most important school is understanding the power of a brand,” he said. “As technology and as media has become more fragmented, the importance of building a powerful brand has become more important. You only have a few places where you need to speak about what your brand is and you need to control that.”

***

In his class, Mr. Berger presented his students with a series of questions including identifying the major elements of a brand and whether a company can build a brand without advertising. He presented case studies on Volvo, Apple, Google and the entertainer Jay-Z, dissecting each brand’s elements, like the products sold, the brand’s values, and tone of voice.

“Half the class were entrepreneurs who started their own business,” Mr. Berger said. “Quite frankly, they have never had that kind of training. They come in, they hear about those pieces of technology, how you can reach this customer, and the most foundational part of it is never taught in school.”

Carlos Solorio, an entrepreneur in the class, is the co-founder of Arden Reed, a company that makes custom men’s wear, like suits. Mr. Solorio and his partner used Kickstarter to raise money for an e-commerce site and are also part of a start-up incubator program in Chile. Before entering the fashion business, Mr. Solorio was an investment banker specializing in Latin American mergers and acquisitions. He said he took Mr. Berger’s class to shift the current pitch for the Arden Reed brand from being solely about the fit of the garment.

“The customers I’ve spoken to sometimes mention the fit, but almost every time it comes down to the compliments they receive or what their wife thinks of them,” Mr. Solorio said in an e-mail. “It’s not that if fits, but that they feel more confident in a custom suit.” He hoped Mr. Berger’s class would help his company “key in on that emotion that someone purchasing Arden Reed wants to achieve and provide a consistent message around that.”

****

Mr. Berger presented Apple’s history of television advertising including the “Think Different” campaign, which showed visionaries like Gandhi, Maria Callas and Jim Henson, and more recent campaigns that featured silhouetted figures dancing against colorful backgrounds while donning the white earbuds and devices synonymous with Apple products. “Apple has clearly said, ‘Here’s who we are and here’s what we stand for,’ ” Mr. Berger said.

While Apple’s products include computers, music devices and phones, the values of the Apple brand are not those products; they are design, innovation and functionality, Mr. Berger said. The tone of voice for the brand is cool, modern and enjoyable, he said.

Some students questioned the Apple brand, especially in light of the criticism the company has received over its labor practices in China and its closed-source operating system. One student even called the brand “arrogant.” Mr. Berger acknowledged the criticism but said that despite it all, the power of the Apple brand is undeniable. “The marketplace has spoken,” Mr. Berger said, “and they are the most valuable brand in the world.”

While Apple may have a strong brand message, the company still must get its product off the shelves and into the hands of consumers. Jay-Z, on the other hand, is an example of one of the newest forms of branding, the personal brand. “The human brand is the biggest evolution,” Mr. Berger said.

Jay-Z may have attached his name to music, clothes and big business deals like his stake in the Brooklyn Nets and the associated Barclays Center, but the reason he has been such a success is because of who the singer is. “The street cred that he comes from and doesn’t waver from, it’s probably been foundational to the brand he’s become, “ Mr. Berger said. “He’s a business and he totally understands that.”

Mr. Berger’s second class was postponed because of Hurricane Sandy, which gives students a few more days to work on their homework assignment: taking the tools they learned about brand building and applying them to a brand, even if that brand is themselves.

Article source: http://www.nytimes.com/2012/10/31/business/media/returning-to-industrys-roots-with-lessons-in-branding.html?partner=rss&emc=rss

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Ex-Envoy Says U.S. Stirs China-Japan Tensions

October 31, 2012 by Leave a Comment

The retired diplomat, Chen Jian, who served as an under secretary general of the United Nations and as China’s ambassador to Japan, said the United States should restrain Tokyo and should focus its diplomatic efforts on bringing about negotiations between China and Japan over the disputed islands in the East China Sea known as the Diaoyu by China and the Senkaku by Japan.

In an unusually biting assessment of the United States, Mr. Chen said: “It is in the U.S. interest to quarrel with China, but not to fight with China.”

While Mr. Chen has retired from China’s diplomatic service, his remarks were particularly significant because they represent the most detailed public exposition of China’s views at a time when Chinese officials have been wary of making comments because of the approaching Communist Party Congress, which is scheduled to begin in Beijing on Nov. 8.

In the speech, which was organized by the Chinese Ministry of Foreign Affairs and was attended by half a dozen Chinese diplomats, Mr. Chen held out an olive branch by urging that discussions between Japan and China should start on ways to reduce the risk of clashes between Chinese and Japanese patrol vessels that have gotten perilously close off the islands in the last month.

But the thrust of his speech was more hard-hitting, particularly regarding the United States. Some in China and Japan see the issue of the islands “as a time bomb planted by the U.S. between China and Japan,” he said. “That time bomb is now exploding or about to explode.”

Mr. Chen accused the United States of encouraging the right wing in Japan, and fanning a rise of militarism.

“The U.S. is urging Japan to play a greater role in the region in security terms, not just in economic terms,” he said during his speech at the Foreign Correspondents’ Club in Hong Kong. That “suits the purpose of the right wing in Japan more than perfectly — their long-held dream is now possible to be realized.”

The United States has said that, in the event of conflict, the disputed islands are covered by its mutual defense treaty with Japan, a position that China has severely criticized since the latest dispute flared last month.

Mr. Chen described what he called the intervention of the United States in territorial disputes in the South China Sea — where China has been at odds with another American ally, the Philippines — as a way for the United States to expand its influence and restrain the influence of China.

“Will these countries misjudge and draw China and the United States into a confrontation?” Mr. Chen asked. “The danger is apparent, and China needs to be aware of that.”

Mr. Chen, who is now dean of the School of International Studies at Renmin University in Beijing, offered a lengthy list of suggestions and assurances for how China hopes to resolve tensions with its neighbors.

“China does not seek to provoke incidents, and will not be the one to do so first,” he said. He said that China had only sent administrative vessels to the disputed islands, not warships from its navy.

Mr. Chen said major changes in Chinese foreign policy were unlikely to follow the selection of a new leadership team at the Party Congress. “I think it’s going to be a smooth change, and the main tenets of our foreign policy will remain very much the same,” he said.

By far the biggest threat to stability in the region are the islands where Japan and China are at odds. Little more than rocky outcrops in shark-infested waters, Japan won the islands as the spoils of war in the Sino-Japanese War in 1895. The United States took over administration of the islands at the end of World War II.

China expected that Japan as a defeated nation would have to give up the islands, and that they would be returned to China. But the islands were not returned, rankling China and Taiwan ever since — a rare issue on which those two agree.

The San Francisco Peace Treaty between Japan and the Allies in 1951 did not clearly establish sovereignty of the islands.

In 1972, the United States returned the disputed islands to Japan, and Japan has administered them since. When China and Japan restored diplomatic relations in 1972, the leaders of the two countries decided to shelve the question of sovereignty of the islands until a future date.

The Obama administration has stated that even though it would come to Japan’s side in the event of conflict over the islands, it takes no position on the sovereignty of the islands.

The issue burst into the open last month when the Japanese government announced it was purchasing several of the islands from a private family that has owned them for some years. China denounced the purchase as “nationalization” of the islands.

The government of Prime Minister Yoshihiko Noda argued that it bought the islands to prevent them from falling into the hands of Shintaro Ishihara, a right-wing politician who last week announced he was leaving office as the governor of Tokyo.

Because the islands were transferred from one Japanese entity to another, Mr. Noda’s government says that the status quo has not changed, and that there is no need to open negotiations with China over the issue at this time.

Japan and China have both had patrol vessels near the islands and each other in recent days. The Japanese Coast Guard and the Chinese State Oceanic Administration each said in separate statements on Tuesday that their vessels had demanded that the other side’s ships should leave the area.

Prime Minister Wen Jiabao of China and Mr. Noda are scheduled to attend a meeting in Laos next week. The Japanese news media reported Tuesday that there were no plans for the two men to hold a formal talks to resolve differences, although they might have an informal meeting on the sidelines.

Article source: http://www.nytimes.com/2012/10/31/world/asia/in-speech-organized-by-beijing-ex-diplomat-calls-islands-dispute-with-japan-a-time-bomb.html?partner=rss&emc=rss

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Wrangling Over Europe’s Budget Gets Under Way

October 31, 2012 by Leave a Comment

BRUSSELS — The hotly anticipated battle over the next long-term European Union budget began Tuesday when the European Commission snubbed a suggested cut of at least €50 billion.

The commission’s terse rejection of the proposal made by Cyprus, which currently holds the rotating E.U. presidency, was yet another sign that the hostilities are likely to be protracted as countries including Britain and Sweden call for even deeper cuts.

David Cameron, the British prime minister, has requested a freeze in payments to the Union to keep them at 2011 levels, and he is under pressure from members of his Conservative Party to push for cuts compared with 2011 levels. He has also threatened to veto any budget deal at a summit meeting in November if Britain does not get its way.

“The politics of the E.U. budget are always nasty, but they may be nastier this time partly because of Mr. Cameron trying to be Mrs. Thatcher,” said Stephen Tindale, an associate fellow at the Center for European Reform, a research organization in London.

Margaret Thatcher, the former British prime minister, earned lasting admiration from Mr. Cameron’s party by taking a firm stance in E.U. budget negotiations during the early 1980s and by winning a rebate that still makes up much of the gap between Britain’s share of contributions and receipts.

The E.U. budget is negotiated every seven years and has long been a polarizing issue as each country seeks to get the most from the process. The spending plan amounts to about 1 percent of economic output in the 27-member Union and is used to finance a huge range of policies, including decommissioning power stations, building roads and subsidizing farmers.

But striking a middle ground is expected to be particularly hard this year amid the climate of austerity brought on by the financial crisis.

“It’s like an exercise aimed at squaring the circle,” said an E.U. official who spoke on condition of anonymity because he was directly involved in negotiations. “Nothing is agreed until everything is agreed.”

The commission, the E.U.’s executive body, proposed in June 2011 an upper limit of €1.03 trillion, or $1.33 trillion, in spending for 2014 and 2020, an increase of about 5 percent over the previous seven-year period.

Olivier Bailly, a spokesman for the commission, said at a news conference Tuesday that its proposal “strikes the right responsible balance in times of crisis” and would be “a tool for investment in growth and jobs.”

Under the commission’s proposals, farm spending would still account for about 36 percent of the budget. Funds for projects like roads, railways and supporting small businesses that mainly go to countries more recently admitted to the Union would account for slightly less. Around 6 percent would be for E.U. administration.

Germany is part of a group called the Friends of Better Spending, which includes the Netherlands and Finland, that is focused on improving the effectiveness of spending while capping its growth. But Britain and Sweden have been the most outspoken on the need to rein in spending.

“No deal will be possible on the basis of cuts of only €50 billion,” Birgitta Ohlsson, the Swedish minister for E.U. affairs, said in a statement Tuesday, after the Cypriot proposal. “It is unacceptable that the common agriculture policy is protected from cuts.”

She said Sweden was seeking €150 billion in cuts.

Ms. Ohlsson also criticized the Cypriots for making the largest cuts where the “E.U. needs to invest — in research, foreign policy and cross-border infrastructure.”

The Cypriot proposal is still €54 billion above the baseline set by Mr. Cameron, and would represent 6.1 percent growth compared with the levels of payments in 2011, according to Open Europe, a research group based in London.

The jousting that got under way this week will set the scene for a meeting on Nov. 22, when the Union’s leaders are supposed to finalize a deal setting out spending until the end of the decade.

Herman Van Rompuy, the president of the European Council, a body representing E.U. leaders, has warned that the talks could last three days, but officials fear the haggling could go on longer.

Even then, the European Parliament would still need to agree on the final amount.

This article has been revised to reflect the following correction:

Correction: October 30, 2012

An earlier version of this article misstated the upper limit of spending proposed by the European Commission for 2014 and 2020. It is $1.33 trillion, not $133 trillion.

 

Article source: http://www.nytimes.com/2012/10/31/business/global/wrangling-over-europes-budget-gets-under-way.html?partner=rss&emc=rss

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Weakness in Europe Undercuts Ford’s Profit

October 31, 2012 by Leave a Comment

Ford, the second-largest American automaker, after General Motors, on Tuesday reported flat profits for the third quarter, as the sharp downturn in its European business continued to undercut its strong performance in the North American market. The company said that it earned $1.63 billion in the quarter, compared with $1.65 billion in the same period last year. Its global revenues dropped slightly to $32.1 billion, down from $33.1 billion in the third quarter of 2011.

The results underscored both Ford’s success in its home market and its festering problems in Europe, where the auto market has fallen to its lowest sales levels in nearly 20 years.

Ford said its pretax profits in North America increased to $2.32 billion in the quarter, from $1.55 billion a year ago. The results were driven by new vehicles like the Escape S.U.V. and higher transaction prices.

But its European operations floundered because of lower sales and higher incentives. Ford reported a pretax loss of $468 million in the region during the quarter, compared with a pretax loss of $306 million in the third quarter last year.

The company forecast severe economic conditions in Europe into 2013 and possibly beyond. Ford’s chief financial officer, Robert L. Shanks, said it would be up to the North American operations to provide the bulk of its income until Europe recovers.

“It has been the foundation and still is,” Mr. Shanks said of the North American market.

Ford has now lost more than $1 billion in Europe this year, and has said it expects its full-year loss to exceed $1.5 billion. Last week, the company said it would close three factories in the region and eliminate 5,700 jobs to better balance production there with shrinking demand for new vehicles.

Ford’s chief executive, Alan R. Mulally, said the automaker would continue to face stiff challenges in Europe as it restructured. “While we are facing near-term challenges in Europe, we are fully committed to transforming our business,” he said in a statement.

Other auto companies in Europe have so far resisted making large-scale overhauls like Ford’s.

“This industry has a lot of excess capacity and needs to restructure,” Mr. Shanks said. “It won’t get any better if other companies avoid the situation.”

He said the company expected “difficult and interesting” discussions with its unions in Belgium and Britain about separation agreements for factory workers.

Ford’s other regional operations contributed little to its bottom line during the quarter. The company said it earned $45 million in pretax profits in Asia, in contrast to a $43 million loss a year ago. Pretax profits in South America fell to $9 million from $276 million a year ago.

The healthy profits in North America reflect Ford’s turnaround in its home market since a financial crisis crippled the United States auto industry in 2008. Unlike its rivals General Motors and Chrysler, Ford survived without a government bailout or filing for bankruptcy.

Since then, Ford has revamped its product lineup to offer a broader range of smaller, more efficient models. The company said its operating profits in North America were its highest since 2000, and it forecast similar results through the remainder of 2012.

“Ford’s more balanced product mix, with a stronger presence in the small-car segments, enabled the company to operate at highly profitable levels in the North American and Asian markets, whereas the European operations continued to struggle,” said Jesse Toprak, an analyst with the auto-research Web site TrueCar.

Ford ended the quarter with $24.1 billion in automotive cash reserves, an improvement from $20.8 billion a year ago.

The company produced 1.36 million vehicles in the third quarter, about the same number as a year ago. Ford said it would build 1.48 million cars, trucks and S.U.V.’s in the fourth quarter, an increase of 112,000 from the same period in 2011.

General Motors, the largest American automaker, is scheduled to report its third-quarter earnings on Wednesday. Chrysler, which has little exposure in the European market, said Monday that its profits improved 80 percent during the period.

Article source: http://www.nytimes.com/2012/10/31/business/ford-sees-little-change-in-net-income.html?partner=rss&emc=rss

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Arnold Greenberg, a Founder of Snapple, Dies at 80

October 31, 2012 by Leave a Comment

Arnold Greenberg, who began his career selling pickles and herring from a New York City storefront and went on to become a founder of Snapple, the international beverage giant, died on Friday in Manhattan. He was 80.

A resident of Delray Beach, Fla., who also had homes in Manhattan and Southampton, N.Y., Mr. Greenberg had been ill with cancer for some time, his family said.

In 1972, Mr. Greenberg, who was by then running a health food store in the East Village in Manhattan, joined forces with two old friends, Leonard Marsh and Hyman Golden, to sell fruit juices to health food stores. A part-time concern — Mr. Greenberg retained his store and Mr. Marsh and Mr. Golden kept the window-washing business they ran together — the juice business performed modestly in its early years.

Then, in the late ’70s, the three men hit on the idea of producing a soft drink flavored only with natural juice. An early effort by their company, by then known as Unadulterated Food Products, was an explosive failure: they marketed a carbonated apple juice that fermented in its bottles and sent a spate of caps blasting.

But the name they had coined for the drink, Snapple (an amalgam of “snappy” and “apple”), proved so evocative that it was soon adopted by the company as a whole.

The Snapple Beverage Corporation became one of the first companies to offer a wide line of juices and carbonated drinks made with natural ingredients. Sales were buoyed by the rising tide of health-conscious consumers in the 1980s; in 1987, after Snapple introduced the first in its line of bottled iced teas, it became an undisputed leader in the New Age beverage market.

The company also became known for its offbeat advertising. An early 1990s campaign by Kirshenbaum Bond was built around a series of television spots featuring the Snapple Lady. A motherly character played by an actual Snapple employee, Wendy Kaufman, the Snapple Lady answered customers’ letters.

By 1994, when Snapple was bought for $1.7 billion by the Quaker Oats Company, it was recording annual sales of about $700 million.

Mr. Greenberg, Snapple’s executive vice president and chief operating officer, retired after the Quaker Oats sale. Snapple is now owned by the Dr Pepper Snapple Group, based in Plano, Tex.; its product line comprises more than 50 flavors of juice, fruit punches and teas.

Arnold Shepard Greenberg was born in Brooklyn on Sept. 2, 1922, and grew up in the Brownsville neighborhood there. His father owned an appetizing store in the East Village, on First Avenue near St. Marks Place, selling staples like lox, herring and pickles; by the 1950s, Arnold Greenberg was running it.

“It was a very traditional operation,” Mr. Greenberg told the newspaper The Jewish Week in 1994. “We made our own sour pickles and wrapped them in newspapers.”

By the 1960s, with the East Village becoming decreasingly Jewish and increasingly hippie, Mr. Greenberg converted the business into a health food store. In the early ’70s he went into business with Mr. Marsh, a childhood friend with whom he had attended Samuel J. Tilden High School, and Mr. Golden, who was married to Mr. Marsh’s sister.

When the three men coined the name Snapple, they discovered it was already owned by a small company in Texas, which appeared to have little interest in using it. They bought the name for $500.

Mr. Greenberg’s first wife, the former Marilyn Parmet, died in 1993; a son, Michael, also died before him. He is survived by his second wife, the former Roberta Budoff; two daughters from his first marriage, Susan Minster and Robin Nijankin; a brother, Herbert; three stepchildren, Scott Budoff, Gary Budoff and Kim Fields; and 14 grandchildren.

As Snapple’s founders often said, one of their greatest pleasures lay in developing and naming new flavors. Not every name passed muster, however. In the 1990s, they produced a guava drink, eventually marketed as Guava Mania.

As Mr. Greenberg told “CBS This Morning” in 1994, the three partners also gave serious consideration to Guava Vavoom and Guava Nagila.

Article source: http://www.nytimes.com/2012/10/31/business/arnold-greenberg-a-founder-of-snapple-dies-at-80.html?partner=rss&emc=rss

Filed Under: Business News Tagged With: , ,

State of the Art: Presenting the Nook HD, iPad Mini and Windows Phone 8 — Review

October 31, 2012 by Leave a Comment

Hollywood studios try to avoid opening big movies on the same weekend, to avoid diluting the buzz and the press coverage. “Oh, no — we can’t open that day,” one might say. “ ‘Titanic II: The Return’ is opening that weekend.”

That’s usually the way it works with the tech companies, too, especially as the holiday shopping season begins.

This year, though, a barrage of huge tech announcements all landed within about a week. Windows 8. Microsoft Surface. The iPad Mini. Google Chromebook. The Barnes Noble Nook HD. Windows Phone 8. A 10-inch Samsung tablet and a new Google phone.

All right, tech industry. You want splintered news coverage? You got it. You get to share this column: one-third of a column each for the three big touch-screen headlines of the week. Meet the iPad Mini, Nook HD and Windows Phone 8.

The iPad Mini

The rumors were true: Apple now has a smaller iPad.

The iPad Mini is half the weight of the big iPad (0.7 pounds versus 1.4), thinner (. 28 inches versus .37), shorter (7.9 inches versus 9.5) and narrower (5.3 inches versus 7.3). Those specs add up to one towering meta-change: you can comfortably hold this iPad in one hand. It’s still too wide for a blazer pocket, alas, but it’s certainly purseable and overcoat pocketable.

It’s available in white-and-silver and black-on-black, both with metal backs, both gorgeous.

Apple’s masterstroke was keeping the screen shape and resolution the same as on the iPad 2 (1,024 by 768 pixels). As a result, the Mini can run all 275,000 existing iPad apps unmodified, plus 500,000 more iPhone apps. The text and graphics are a little smaller, but perfectly usable.

Sadly, the Mini doesn’t gain Apple’s supercrisp Retina display. Nobody’s going to complain about the sharpness — it packs in 163 pixels per inch (ppi) — but it’s not the same jaw-dropping resolution as the big iPad (264 ppi). Gotta hold something back for next year’s model, right?

You pay $330 for the base model (16 gigabytes of storage, Wi-Fi connections). Prices run all the way up to $660 for four times the storage and the option to go online over the cell network.

By pricing the Mini so high, Apple allows the $200 class of seven-inch Android tablets and readers to live (Google Nexus, Kindle Fire HD, Nook HD). Those tablets also, by the way, have high-definition screens (1,280 by 800 pixels), which the Mini doesn’t.

But the iPad Mini is a far classier, more attractive, thinner machine. It has two cameras instead of one. Its fit and finish are far more refined. And above all, it offers that colossal app catalog, which Android tablet owners can only dream about.

Over all, the Mini gives you all the iPad goodness in a more manageable size, and it’s awesome. You could argue that the iPad Mini is what the iPad always wanted to be.

Barnes Noble Nook HD

The redesign of this $200 e-book reader/video player focuses on the three things that matter most in a hand-held e-book reader: weight, size and screen clarity.

In those ways, the Nook HD trounces its nemeses, Amazon’s Kindle Fire HD and Google’s Nexus 7. The Nook is lighter (11.1 ounces, versus 12 on the Nexus and 13.9 on the Kindle) and noticeably narrower, despite the same-size screen, because it has a far slimmer bezel. You can wrap your hand around its back, even if you’re dainty of hand.

And the screen is much sharper: 1,440 by 900 pixels (versus 1,280 by 800). At 243 dots ppi, the Nook’s screen comes dangerously close to the iPad Retina’s 264 ppi. Wow, is this screen sharp. Movies, books and magazines pop.

Whites are so white on this screen, it could be a Clorox commercial; the Nexus and Kindle screens look yellowish in comparison. (A 9-inch, $270 version, the Nook HD+, is also available.)

The software continues to improve. You can now create up to five accounts, one for each family member, each listing different books and movies. (It doesn’t remember where each person stopped reading a given book, but BN says that’s coming soon.)

The base-model, $200 Nook comes with only 8 gigabytes of storage — half as much as the Kindle; on the other hand, it has a memory-card slot, so it’s simple and cheap to expand. The Nook includes a wall charger (it can’t charge from a USB jack), which the Kindle doesn’t. And the Nook doesn’t display ads, as the $200 Kindle does.

Article source: http://www.nytimes.com/2012/11/01/technology/personaltech/presenting-the-nook-hd-ipad-mini-and-windows-phone-8-review.html?partner=rss&emc=rss

Filed Under: Business News Tagged With: , ,

Square Feet: Rackspace Revitalizes a Defunct Mall Into an Unorthodox Tech Campus

October 31, 2012 by Leave a Comment

“I thought, This is going to be awesome!” the infectiously enthusiastic Mr. Weston said of his idea five years ago to move Rackspace’s operations to the defunct Windsor Park Mall in northeast San Antonio. “But everybody else pretty much thought I was crazy.”

Today, his idea to move his company to the very mall where he got the blue ruffle tuxedo he wore to his junior prom seems more innovative than insane, with 3,200 Rackspace employees keystroking in cubicles set up where retailers like J. C. Penny, Zales, Casual Corner and Piercing Pagoda used to be. The project suggests that there might be hidden opportunities in the nation’s glut of dead and dying malls and represents one of the country’s largest and quirkiest recycling efforts.

As ruefully documented on the Web site Deadmalls.com, the recession has shuttered scores of enclosed malls in the United States, and estate analysts at the CoStar Group predict that at least 10 percent of the remaining 1,500 malls will fail in the next few years. This is despite recent improvements in retail sales, because shoppers these days are more likely to visit free-standing stores or strip centers than invest time and effort entering and navigating a mall.

Most dead malls are razed, but some have been repurposed, like the Penn-Can Mall in Cicero, N.Y., which now houses several auto dealerships. Malls in Florida, Massachusetts, Michigan, Mississippi, New Jersey and Ohio have become mixed-used spaces, incorporating apartments and unconventional tenants like government offices, churches, medical clinics and satellite university campuses. Rackspace’s mall conversion, though, is unique in that it is the exclusive owner and occupant.

Mr. Weston was in a bind in 2007. Rackspace had outgrown the 200,000-square-foot office space it had leased just two years earlier in northwest San Antonio. The growing company, founded in 1998 in a garage apartment, was adding 600 employees a year.

And these employees, who call themselves Rackers, were cramped, cranky and craving a corporate campus like those of their competitors Amazon, Microsoft and Google. Needless to say, they were not enthusiastic at the suggestion that they decamp to a decrepit suburban mall, despite Mr. Weston’s assurances that it would be “totally cool.”

“A lot of Rackers worked at Foot Locker in the mall, and the last thing they wanted to do is go away to school, get the fancy degree and come back and work at the mall,” said Lanham Napier, the chief executive at Rackspace, who admits that he shared their resistance. “I thought Graham was nuts,” he said.

There was also some trepidation that the frugal Mr. Weston just wanted cheap office space and wasn’t going to do much more than slap a coat of paint on the mall and set up card tables and folding chairs as office furniture.

Despite an estimated net worth of $1.2 billion, Mr. Weston, 48, lives modestly with his wife and three children in a 2,300-square-foot double-wide trailer on the banks of the Guadalupe River just outside of San Antonio. In addition to being a successful dot-com and real estate investor, he descends from British nobility on his mother’s side and Canadian grocery magnates on his father’s side, whose holdings include Twinings tea, Karo syrup, Fleishmann’s yeast, Fortnum Mason and Selfridges.

Mr. Weston was indeed looking for a good deal, but he also had a grand vision of creating a tech mecca comparable to Austin’s so-called Silicon Hills, located 60 miles east of the mall and home to Dell and Hoover’s. He hired the New Urbanism pioneer Andres Duany to conceive a master development plan emphasizing diversity, sustainability and walkability.

“I grew up on a cattle ranch not far from the mall, and it was where we came as kids,” the boyish and bespectacled Mr. Weston said. “Rackspace desperately needed more space, true, but I wanted us to be leaders in the community, not just squatters.”

Undeterred by his employees’ opposition, he negotiated to buy the mall for a bargain-basement $27 million. Rackspace also received $72 million in tax abatements and development grants from the State of Texas and the City of Windcrest, a struggling suburb adjacent to the mall. As a precursor to the deal, Windcrest had assumed taxing authority on the property from San Antonio. Windcrest, which has a population of 5,600, had been losing $100,000 in tax revenue annually since the mall closed in 2005.

“Mr. Weston was a tough negotiator and was certainly taking care of his company,” said Ray Watson, who was the executive director of the Windcrest Economic Development Corporation at the time. “We started out offering about half of what they ended up getting, but the good thing is that they took care of the community.”

Article source: http://www.nytimes.com/2012/10/31/realestate/commercial/rackspace-revitalizes-a-defunct-mall-into-an-unorthodox-tech-campus.html?partner=rss&emc=rss

Filed Under: Business News Tagged With: , ,
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