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Business and Labor Are Said to Near Deal on Immigration

March 29, 2013 by Leave a Comment

The progress in the talks, which stalled late last week, had members of a bipartisan group of eight senators that has been working on an immigration bill increasingly optimistic that they would be able to introduce comprehensive legislation in the Senate when Congress returns the second week of April.

“We are very close, closer than we’ve ever been,” said Senator Charles E. Schumer, Democrat of New York and a member of the Senate group. “We are very optimistic, but there are a few issues remaining.”

The intense talks, and the willingness of the U.S. Chamber of Commerce and the A.F.L.-C.I.O. —  two groups that have often found themselves deeply divided over the immigration debate —  to try to hammer out an agreement, was an indication of how much the climate has changed on overhauling the nation’s immigration laws.

When President George W. Bush pushed to revamp immigration laws in 2007, the inability of business and labor to agree on a plan for temporary guest workers was among the main reasons that effort failed. But now the two groups have weathered leaks to the news media and other setbacks in a sign of how serious both Democrats and Republicans are about getting a bill on President Obama’s desk by the end of the year.

Some involved in the negotiations remained hopeful that a deal would be reached by the weekend, but the Congressional recess, along with the Good Friday observance, made it difficult to lock all the moving pieces in place, those close to the talks said. And, while the members of the bipartisan group were optimistic, aides cautioned that no deal would be final until all the senators had signed off on every piece of the legislation.

The Chamber of Commerce and the A.F.L.-C.I.O., the nation’s main federation of labor unions, have been in discussions parallel to those of the Senate group, and have already reached a tentative agreement about the size and scope of a temporary guest worker program, which would grant up to 200,000 new visas annually for low-skilled workers. The labor-business talks came close to breaking down last Friday, on the eve of a two-week Congressional recess, over the issue of what the pay levels should be for low-skilled immigrants — often employed at restaurants and hotels or on construction projects — who could be brought in when employers said they faced labor shortages.

One of the last sticking points in the business-labor negotiations has been the specific type of jobs that would be excluded from the program. The nation’s construction unions, officials in the talks said, have persuaded the negotiators to exclude certain higher-skilled jobs, including crane operators and electricians, from the guest worker program.

Eliseo Medina, the secretary-treasurer of the Service Employees International Union and one of labor’s most influential voices on immigration issues, said, “We may be very close to a point where the senators will have an announcement soon.”

The tentative agreement seems to satisfy both groups: The business community is likely to see a number of visas that it considers adequate, while the agreement on wages is likely to please labor because it is not expected to affect the labor market adversely.

“The labor movement has been united in making sure aspiring Americans get a road map to citizenship and that any future flow program doesn’t reduce wages for any local workers,” said Tom Snyder, manager of the A.F.L.-C.I.O.’s Citizenship Now campaign. “And we will succeed on both fronts because politicians have heard immigrant communities loud and clear: citizenship now.”

Still, Randy Johnson, the senior vice president of labor, immigration, and employee benefits at the Chamber of Commerce, cautioned that any official agreement would come from the bipartisan Senate group.

“We advise senators on the Hill how to write the bill and they decide on what bill would make sound legislation,” he said.

According to participants in the conversations, after the business-labor talks came close to breaking down last week, some union officials pressed the labor negotiators to show more flexibility to avoid losing momentum over the guest worker issue. At the same time, some business leaders and Republican lawmakers pressed the Chamber to be more flexible on the guest worker issue so as not to derail the overall immigration overhaul.

Business and labor reached agreement in recent days on the contentious issue of how many guest workers would be admitted each year, several officials said. They said the number would start at 20,000 visas a year and could grow to a maximum of 200,000 annually.

“There is a formula that will allow it to grow and shrink according to economic needs,” said Tamar Jacoby, the president of ImmigrationWorks, a group that represents small businesses on immigrations matters.

She said the formula agreed to was not flexible enough to meet the needs of specific industries in specific places.

The number of guest workers allowed in would increase as the nation’s unemployment rate fell and the number of job openings increased. A federal commission would also assess the need for guest workers, with an eye to shortages in specific industries and communities.

In the negotiations, business vigorously objected to labor’s push to have employers pay guest workers more than they pay local workers — an idea labor pushed to encourage employers to increase wages and to discourage them from bringing in guest workers.

To settle that dispute, officials said, the two sides agreed that guest workers would be paid the prevailing industry wage previously used in the guest worker program. These officials said that employers who faced a labor shortage even after the national guest worker quota was filled could request a “safety valve” exemption to bring in workers, but with additional administrative hurdles and at a higher wage rate than the prevailing wage.

“Business and labor leaders both agree that we need a system that responds to the needs of our economy, and we are now in a position where they’re both coming together around key reforms that will fix the broken immigration system and move our economy forward,” said John Feinblatt, the chief policy adviser to Mayor Michael R. Bloomberg of New York and the chairman of the Partnership for a New American Economy.

Article source: http://www.nytimes.com/2013/03/30/us/politics/guest-worker-program-low-skilled-immigrants.html?partner=rss&emc=rss

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Embattled ThyssenKrupp Reports Huge Loss

December 11, 2012 by Leave a Comment

FRANKFURT — The German steel maker ThyssenKrupp, battered by slow economic growth and a series of corruption scandals, reported the biggest loss in its history late Monday and confirmed that three top executives would leave the company.

The loss of 5 billion euros ($6.5 billion) for the fiscal year that ended in September capped a tumultuous year for a company that once symbolized German industrial might. The period included the disclosure of huge losses at the unit that operates steel plants in Brazil and Alabama, fines related to a price-fixing scandal and other setbacks.

Last year, the company reported a loss of 1.8 billion euros.

“I’m not going to talk anything up here, because it is obvious that a great deal has gone wrong in the past,” Heinrich Hiesinger, the chief executive of Thyssen-Krupp, said Tuesday at its headquarters in Essen, Germany.

ThyssenKrupp attributed 3.6 billion euros of the loss to its unit Steel Americas, which Mr. Hiesinger referred to as a “disaster.” He conceded that managers had valued plants in Rio de Janeiro and Calvert, Ala., at far above their market value. Accounting rules required the company to record a loss after recognizing the actual worth of the factories.

The Brazilian factory suffered from cost overruns during construction, and both mills were hit by slack demand, ThyssenKrupp said.

The fiscal-year loss means that ThyssenKrupp will not pay a dividend to shareholders for the first time since it was created in a merger in 1999. Still, Thyssen-Krupp shares rose 5.63 percent in Frankfurt on Tuesday as investors concluded that Mr. Hiesinger, who became chief executive in January 2011, was grappling with the problems.

“The track record of new management has been very solid,” analysts at Credit Suisse said Tuesday in a note to clients. “They are dealing with perhaps some of the most difficult issues of Thyssen-Krupp’s existence.”

Blame for the problems fell on three members of the company’s six-member executive board. ThyssenKrupp said the three had agreed to terminate their contracts at the request of the company’s supervisory board.

The managers are Olaf Berlien, whose responsibilities included plant technology; Jürgen Claassen, the longtime head of communications; and Edwin Eichler, who was in charge of Steel Americas. About 50 managers have already left the company after they were found to have violated compliance codes, Mr. Hiesinger said.

Mr. Claassen, who was also responsible for compliance with the company’s ethics rules, has been the subject of articles in the newspaper Handelsblatt and other news outlets asserting that he took journalists on junkets that were considered lavish even by the flexible standards of the European press.

The Essen prosecutor’s office, which investigated the accusations, said last week that it had found no evidence that the trips broke any laws.

Questions have also been raised about whether top managers concealed the true extent of the company’s problems, but Mr. Hiesinger said there was no evidence of wrongdoing. “To date there are no facts indicating compliance infringements or illegal conduct by any of them,” he said.

But the huge loss, at a time when most big German companies continue to do well, was a further blow to ThyssenKrupp’s reputation.

In July, the company paid a 103 million euro fine to the Federal Cartel Office in Germany after accusations it was part of a conspiracy to fix the price of railway tracks sold to Deutsche Bahn, the national railroad, and other customers. The company warned on Tuesday that it might face additional investigations or lawsuits stemming from its involvement in the cartel.

Krupp, which merged with Thyssen in 1999 after one of the first hostile takeover battles in German history, once symbolized the country’s industrial might. Founded in 1811, Krupp was responsible for many advances in steel technology but also developed and built the cannons and other weapons that provided the foundation for German militarism in the 19th and 20th centuries. During World War II, Krupp used slave labor at its factories. Its top managers were later convicted of war crimes, though they served only brief prison terms.

In recent years, ThyssenKrupp has been overshadowed by companies like Daimler and Siemens, reflecting a shift in Germany’s economic center of gravity from the Ruhr Valley to the south. Daimler is based in Stuttgart, and Siemens in Munich.

With sales of about 40 billion euros in the fiscal year ended Sept. 30, ThyssenKrupp has about half the revenue of fellow industrial giant Siemens and a little more than a third the sales of Daimler. Still, it remains an enormous company with 152,000 workers, including 58,000 in Germany.

Besides making steel, primarily for automakers, Thyssen-Krupp also makes elevators, builds and equips factories, and manufactures submarines and other naval vessels.

Mr. Hiesinger, a former Siemens executive, acknowledged on Tuesday that “our leadership culture has failed in many areas of the company.”

“In the past there has been an understanding of leadership in which ‘old boys’ networks’ and blind loyalty were more important than business success,” he said. “And there were obviously some who thought that rules, regulations and laws do not apply to everyone.”

“I am aware that through this attitude we have lost a great deal of trust and credibility,” Mr. Hiesinger said. “We must now earn back both.”

Article source: http://www.nytimes.com/2012/12/12/business/global/record-loss-for-embattled-thyssenkrupp.html?partner=rss&emc=rss

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Setbacks May Push Europe Into a New Downturn

August 15, 2011 by Leave a Comment

Mr. Knott, 53, who runs Furness Heating Components, has cut his work force to 18 people from 25 and said business was tougher than he had ever seen it. “There’s a lot of competition, and people are just not building that many houses anymore,” Mr. Knott said.

Data released on Friday leaves little doubt that the European economy is losing momentum before most countries have even recovered to the level of output they had in 2008, when the recession hit.

But the larger question is whether an increasingly bitter brew of flagging output and a sovereign debt crisis — along with the market downturn — will create something more sinister than a mere slowdown, and lead more businesses to cut jobs and investment as Mr. Knott has.

In France, the second-largest economy in the European Union after Germany, growth came to a standstill in the three months through June, according to official figures. Meanwhile, industrial production in the 17-nation euro area fell 0.7 percent in June compared with May, more than analysts had forecast.

On Tuesday, economists expect a report on euro area economic activity to show that gross domestic product slowed to 0.3 percent in the second quarter, from 0.8 percent in the first three months of the year.

If there is less economic growth, governments will collect less tax revenue. They will have more trouble paying their debts. That could make investors even more nervous and add to turmoil in the stock and bond markets, which will undercut business and consumer confidence, which will lead to yet slower growth, and so on.

“There is a real risk that there is a self-enforcing cycle under way here,” said Martin Lueck, an economist at UBS in Frankfurt.

Mr. Lueck says he believes the most likely prospect is less dire, but even his more optimistic view calls for a brief slowdown on the way to a “new normal” of weaker growth in Europe and the United States. And he acknowledged that, in 2008, many economists underestimated how quickly and severely the financial crisis would spill into the broader economy.

“We learned the hard way,” Mr. Lueck said. “The links between the financial world and the world economy are very strong.”

Another recession is already well under way in Greece and Portugal, while growth in countries like Spain, Italy and Britain has been very slow since last year. But now Germany, which has been remarkably strong, hauling the rest of the Continent along with it, seems to be decelerating. The Ifo Business Climate Index, considered a reliable predictor of German growth, fell in July as executives became less optimistic about exports.

“It is more than a soft patch,” said Eric Chaney, chief economist at a French insurer, the AXA Group. “The business cycle is really coming to a quasi-standstill in Europe.”

Worse-than-expected results from companies like Daimler, Deutsche Bank and Siemens in the last month have reinforced the feeling that Germany’s extraordinary boom is near an end. E.On, Germany’s largest utility, said on Wednesday that it might need to cut as many as 11,000 jobs after experiencing the first loss since it was created a decade ago from a group of state-owned utilities.

E.On attributed the loss chiefly to the government’s decision to force some of the company’s nuclear power plants to close early, but sales declines in foreign markets like Britain and Hungary also played a role.

Even companies that have done well are warning about risks ahead. “The coming months will be challenging for us,” Martin Winterkorn, the chief executive of Volkswagen, said in late July after the carmaker reported that profit more than tripled, to 4.8 billion euros ($6.8 billion).

A big problem for Europe is that domestic demand is weak and growth has become primarily dependent on sales from abroad, where the signals are flashing yellow. The United States, still the largest foreign market for companies like BMW, is slowing and could slip into recession. The earthquake, tsunami and nuclear disaster in Japan had a greater impact on global trade than economists expected. And demand from China and emerging markets is slackening.

“Germany is so leveraged in global trade that if something happens, then Germany slows immediately,” Mr. Chaney said. “That makes the recovery more fragile. It depends on the good health of the rest of the world.”

Some German exporters are still smarting from the severe recession that followed the collapse of Lehman Brothers in 2008, and must now gird for another retrenchment. An association that represents makers of construction machinery said last Wednesday that it expected a sales increase of more than 10 percent this year, but that sales were still one-third below their 2008 peak.

Many German companies are still not operating at capacity, while they worry about debt problems in the United States and Europe as well as unrest in the crucial Middle East market, said Christof Kemmann, chief executive of BHS-Sonthofen, a maker of machinery for processing building materials.

“Even when some sectors are reporting good numbers, there is no reason for euphoria,” Mr. Kemmann said.

Jack Ewing reported from Frankfurt and Julia Werdigier from London.

Article source: http://www.nytimes.com/2011/08/15/business/global/threats-on-many-fronts-for-european-economy.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

A Wave of Setbacks May Push Europe Into a New Downturn

August 14, 2011 by Leave a Comment

Mr. Knott, who runs Furness Heating Components, has cut his work force to 18 people from 25 and said business is tougher than he has ever seen it. “There’s a lot of competition, and people are just not building that many houses anymore,” Mr. Knott, 53, said.

Data released Friday leaves little doubt that the European economy is losing momentum before most countries have even recovered to the level of output they had in 2008, when the recession hit.

But the larger question is whether an increasingly toxic brew of flagging output and sovereign debt crisis — along with the market downturn — will create something more sinister than a mere slowdown, and lead more businesses to cut jobs and investment as Mr. Knott has.

In France, the second-largest economy in the European Union after Germany, growth came to a standstill in the three months through June, according to official figures. Meanwhile, industrial production in the 17-nation euro area fell 0.7 percent in June compared with May, more than analysts had forecast.

On Tuesday, economists expect a report on euro area economic activity to show that gross domestic product slowed to 0.3 percent in the second quarter, from 0.8 percent in the first three months of the year.

If there is less economic growth, governments will collect less tax revenue. They will have more trouble paying their debts. That could make investors even more nervous and add to turmoil in the stock and bond markets, which will undercut business and consumer confidence, which will lead to yet slower growth, and so on.

“There is a real risk that there is a self-enforcing cycle under way here,” said Martin Lueck, an economist at UBS in Frankfurt.

Mr. Lueck said he believes the most likely prospect is less dire, but even his more optimistic view calls for a brief slowdown on the way to a “new normal” of weaker growth in Europe and the United States. And he acknowledged that, in 2008, many economists underestimated how quickly and severely the financial crisis would spill into the broader economy.

“We learned the hard way,” Mr. Lueck said. “The links between the financial world and the world economy are very strong.”

Another recession is already well under way in Greece and Portugal, while growth in countries like Spain, Italy and Britain has been very slow since last year. But now Germany, which has been remarkably strong, hauling the rest of the Continent along with it, seems to be decelerating. The Ifo Business Climate Index, considered a reliable predictor of German growth, fell in July as executives became less optimistic about exports.

“It is more than a soft patch,” said Eric Chaney, chief economist at a French insurer, the AXA Group. “The business cycle is really coming to a quasi-standstill in Europe.”

Disappointing earnings reports from companies like Daimler, Deutsche Bank and Siemens in the last month have reinforced the feeling that Germany’s extraordinary boom is near an end. E.On, Germany’s largest utility, said on Wednesday that it might need to cut as many as 11,000 jobs after suffering the first loss since it was created a decade ago from a group of state-owned utilities.

E.On attributed the loss chiefly to the government’s decision to force some of the company’s nuclear power plants to close early, but sales declines in foreign markets like Britain and Hungary also played a role.

Even companies that have done well are warning about risks ahead. “The coming months will be challenging for us,” Martin Winterkorn, the chief executive of Volkswagen, said in late July after the carmaker reported that profit more than tripled to 4.8 billion euros ($6.8 billion).

A big problem for Europe is that domestic demand is weak and growth has become primarily dependent on sales from abroad, where the signals are flashing yellow. The United States, still the largest foreign market for companies like BMW, is slowing and could slip into recession. The earthquake, tsunami and nuclear disaster in Japan had a greater impact on global trade than economists expected. And demand from China and emerging markets is slackening.

“Germany is so leveraged in global trade that if something happens, then Germany slows immediately,” Mr. Chaney said. “That makes the recovery more fragile. It depends on the good health of the rest of the world.”

Julia Werdigier reported from London.

Article source: http://feeds.nytimes.com/click.phdo?i=60875d1bb79f2a9f2045a0267ab9bc00

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Johnson & Johnson to End Line of Drug-Coated Heart Stents

June 16, 2011 by Leave a Comment

Johnson Johnson announced on Wednesday that it would stop manufacturing drug-coated heart stents by the end of the year, abandoning an intensely competitive $4 billion market after a series of setbacks for the company and rising concerns about the use of stents in some patients.

The company is expecting to take a $500 million to $600 million restructuring charge this quarter and to trim 900 to 1,000 jobs this year.

The announcement by the company and its subsidiary Cordis, long expected by some analysts because of a dwindling market share, opens up more sales possibilities for three competitors.

The use of heart stents is being challenged as unnecessary for some patients. Stents are tiny devices inserted through blood vessels to keep arteries open in the heart. But research in recent years has suggested that stents are overused by doctors and that drugs may be a cheaper, safer and more effective way for many patients to avoid heart attacks or strokes.

The emerging concerns, the recession and pricing pressures have caused a fall-off in stent sales. The worldwide market for coronary stents dropped to $4.2 billion last year, from $5.3 billion in 2006, according to the investment house Leerink Swann.

Cordis’s sales of drug-coated heart stents fell to $627 million globally last year, from $2.6 billion in 2006. By the end of the year, Cordis will stop manufacturing its Cypher stent — the first drug-coated stent to be approved by the Food and Drug Administration in 2003 — and stop researching a new one called the Nevo stent, the company said in a statement Wednesday.

Seth Fischer, worldwide chairman of Cordis, said the decision was prompted by “changing dynamics” and price pressures in an increasingly competitive market.

“There’s no question that our market share has declined in the last several years as competitors have joined the market,” he said in a telephone interview. “We felt that we could turn our attention toward other potential areas that would enhance cardiovascular health for patients.”

Mr. Fischer also said J. J.’s losses in patent cases, including an appellate court decision last week, had a significant effect. “Unlicensed competition” has eroded its pricing, sales and market share, he said.

Cordis will cut 900 to 1,000 positions by closing its Cypher stent manufacturing facility in San Germán, Puerto Rico, and its Nevo stent plant in Cashel, Ireland, and trimming research, sales and marketing, a company spokeswoman, Sandra Pound, said in a telephone interview.

Johnson Johnson, based in New Brunswick, N.J., has suffered a series of consumer product recalls largely because of manufacturing problems. The decision to get out of the stent market also appeared to hurt the company in the eyes of investors. The stock price dipped by 1.4 percent to $66.16 on Wednesday.

Its departure should help the market leaders, Boston Scientific and Medtronic, which are each introducing new drug-eluting stents in mid-2012, according to an investor note from Barclays Capital.

Boston Scientific stock rose 2.8 percent to $6.93, while Medtronic declined by nearly 1.25 percent, to $37.92. Abbott Laboratories, which also sells heart stents in the United States, held even in the stock market.

J. J. held about 15 percent of the worldwide market share in drug-eluting stents. Barclays said that share was expected to drop to 10 percent this year and 7 percent in 2012.

Leerink Swann, in an investor note, said the company’s withdrawal was long expected and would both help other stent-makers and help Johnson Johnson focus on more profitable areas.

Article source: http://feeds.nytimes.com/click.phdo?i=12433576c5f34ff0fcf0b2bf24a23ad9

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Disney Profit Declines 1%, Partly on Movies and Parks

May 11, 2011 by Leave a Comment

Disney, reporting financial results for its fiscal second quarter, had setbacks in three important areas — movies, theme parks and interactive media.

At Walt Disney Studios, operating income dropped 65 percent, to $77 million, because of the flop “Mars Needs Moms,” which cost about $200 million to make and market but took in only $36.7 million at the global box office. In the year-ago quarter, Disney recorded strong DVD sales of Pixar films like “Up,” “Toy Story” and “Toy Story 2.” The quarter that just ended had no Pixar DVD releases of comparable size.

Operating income at the company’s theme parks, closely watched as a barometer of consumer confidence, declined 3 percent, to $145 million, because of lower royalty payments from Tokyo Disney Resort, which closed for more than a month after the March 11 earthquake.

The parks’ performance for the period was also hurt by a calendar quirk that moved Easter out of the quarter and higher costs for fuel and other items at Disney Cruise Line.

Losses at Disney’s interactive media unit grew to $115 million, from $55 million a year earlier, because of accounting related to the acquisition last year of Playdom, a maker of simple online games. The company has been struggling to turn around the division for years, most recently with broad management changes. Yet another overhaul of Disney.com is expected within months.

Disney shares closed Tuesday at $43.91, up 1.9 percent, then slipped about 3 percent to $42.66 in after-hours trading.

For the three months ended April 2, Disney, which is based in Burbank, Calif., had net income of $942 million, or 49 cents a share, down from $953 million, or 48 cents a share, a year earlier. Revenue rose 6 percent, to more than $9.07 billion, largely because of surging advertising sales and affiliate payments at ESPN and cable channels like ABC Family.

Income for Disney’s television operation rose 17 percent, to $1.5 billion, offset by increased rights costs at ESPN, including for college bowl games. Robert A. Iger, Disney’s president and chief executive, speaking on a conference call with analysts Tuesday, sought to calm concerns about increasing programming costs at ESPN but also said that it would not be shy about pursuing expensive new content deals.

“ESPN certainly plans to look at the Olympics seriously,” Mr. Iger said.

Disney’s consumer products division was another bright spot in the quarter. Its operating income increased 7 percent, to $142 million, because of improvements at Disney retail stores.

Mr. Iger was upbeat about the future. He noted that the television advertising market was booming and that even ABC, where ratings had eroded, was expected to fare well in the coming upfront advertising period, when commitments for ad spending are made. At the theme parks, an end to price discounts put in place at the height of the recession could increase per-capita spending in the high-volume summer.

And Walt Disney Studios has several movies on deck that are expected to be blockbusters, including “Pirates of the Caribbean: On Stranger Tides” and “Cars 2,” both of which have enormous amounts of related retail merchandise.

Article source: http://feeds.nytimes.com/click.phdo?i=dd277ea60a336a77b493650a1701d3b6

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