Saturday, January 18, 2014

Real Economy News January 18 , 2014 - What Recovery? Sears And J.C. Penney Are DYING ..... Last gasp Contract efforts for YRC ? Teamsters and YRC hammer out new offer - unless the Tentative Agreement is ratified , YRC could be in dire straits

http://www.infowars.com/what-recovery-sears-and-j-c-penney-are-dying/


What Recovery? Sears And J.C. Penney Are DYING

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Michael Snyder
Economic Collapse
January 18, 2013
Two of the largest retailers in America are steamrolling toward bankruptcy.  Sears and J.C. Penney are both losing hundreds of millions of dollars each quarter, and both of them appear to be caught in the grip of a death spiral from which it will be impossible to escape.  Once upon a time, Sears was actually the largest retailer in the United States, and even today Sears and J.C. Penney are “anchor stores” in malls all over the country.  When I was growing up, my mother would take me to the mall when it was time to go clothes shopping, and there were usually just two options: Sears or J.C. Penney.  When I got older, I actually worked for Sears for a little while.  At the time, nobody would have ever imagined that Sears or J.C. Penney could go out of business someday.  But that is precisely what is happening.  They are both shutting down unprofitable stores and laying off employees in a desperate attempt to avoid bankruptcy, but everyone knows that they are just delaying the inevitable.  These two great retail giants are dying, and they certainly won’t be the last to fall.  This is just the beginning.
The Death Of Sears
Sales have declined at Sears for 27 quarters in a row, and the legendary retailer has been closing hundreds of stores and selling off property in a frantic attempt to turn things around.
Unfortunately for Sears, it is not working.  In fact, Sears has announced that it expects to lose “between $250 million to $360 million” for the quarter that will end on February 1st.
Things have gotten so bad that Sears is even making commercials that openly acknowledge how badly it is struggling.  For example, consider the following bit of dialogue from a recent Sears television commercial featuring two young women…
“Wait, the movie theater is on the other side,” the passenger says.
“But Sears always has parking!” the driver responds.
Sears always has parking???
Of course the unspoken admission is that Sears always has parking because nobody shops there anymore.
I have posted video of the commercial below…
A couple of months ago I walked into a Sears store in the middle of the week and it was like a ghost town.  A few associates were milling around here and there having private discussions among themselves, but other than that it was eerily quiet.
You can find 18 incredibly depressing photographs which do a great job of illustrating why Sears is steadily dying right here.  This was once one of America’s greatest companies, but soon it will be dead.
The Death Of J.C. Penney
J.C. Penny has been a dead man walking for a long time.  In some ways, it is in even worse shape than Sears.
If you can believe it, J.C. Penney actually lost 586 million dollars during the second quarter of 2013 alone.
How in the world do you lose 586 million dollars in three months?
Are they paying employees to flush giant piles of cash down the toilets?
This week J.C. Penney announced that it is eliminating 2,000 jobs and closing 33 stores.  The following is a list of the store closings that was released to the public…
Selma, Ala. — Selma Mall
Rancho Cucamonga, Calif. — Arrow Plaza
Colorado Springs — Chapel Hills Mall
Meriden, Conn. — Meriden Square
Leesburg, Fla. — Lake Square Mall
Port Richey, Fla. — Gulf View Square
Muscatine, Iowa — Muscatine Mall
Bloomingdale, Ill. — Stratford Square Mall
Forsyth, Ill. — Hickory Point Mall
Marion, Ind. — Five Points Mall
Warsaw, Ind. — Marketplace Shopping Center
Salisbury, Md. — The Centre at Salisbury
Marquette, Mich. — Westwood Plaza
Worthington, Minn. — Northland Mall
Gautier, Miss. — Singing River Mall
Natchez, Miss. — Natchez Mall
Butte, Mont. — Butte Plaza Shopping Center
Cut Bank, Mont.
Kinston, N.C. — Vernon Park Mall
Burlington, N.J. — Burlington Center
Phillipsburg, N.J. — Phillipsburg Mall
Wooster, Ohio — Wayne Towne Plaza
Exton, Pa. — Exton Square Mall
Hazleton, Pa. — LaurelMall
Washington, Pa. — Washington Mall
Chattanooga — Northgate Mall
Bristol, Va. — Bristol Mall
Norfolk, Va. — Military Circle Mall
Fond du Lac, Wis., Forest Mall
Janesville, Wis. — Janesville Mall
Rhinelander, Wis. — Lincoln Plaza Center
Rice Lake, Wis. — Cedar Mall
Wausau, Wis. — Wausau Mall
The CEO of J.C. Penney says that these closures were necessary for the future of the company…
“As we continue to progress toward long-term profitable growth, it is necessary to reexamine the financial performance of our store portfolio and adjust our national footprint accordingly,” CEO Myron Ullman said in a news release.
Actually, his statement would be a lot more accurate if he replaced “continue to progress toward long-term profitable growth” with ” prepare for bankruptcy”.
It would be hard to overstate how much of a disaster 2013 was for J.C. Penney.  The following is an excerpt from a recent CNN article
It’s been a brutal year for J.C. Penney, its stock falling over 60% in the past 12 months. The company has been losing hundreds of millions of dollars per quarter, and is in the midst of another turnaround effort after ousting former Apple executive Ron Johnson last year.
Overall, shares of J.C. Penney have fallen by an astounding 84 percentsince February 2012.  And keep in mind that this decline has happened during one of the greatest stock market rallies of all-time.
For now, J.C. Penney will continue to try to desperately raise more cash from investors that are foolish enough to give it to them, but all that is really accomplishing is just delaying the inevitable.
If you would like to see some photos that graphically illustrate why J.C. Penney is falling apart, you can find some right here.
And of course Sears and J.C. Penney are not the only large retailers that have fallen on hard times.  This week the CEO of Best Buy admitted that sales declined at his chain during the holiday season…
Best Buy shares skid on Thursday after the retailer said total revenue and sales at its established U.S stores fell in the all-important holiday season due to intense discounting by rivals, supply constraints for key products and weak traffic in December.
In the immediate aftermath of that announcement, Best Buy stock was down more than 30 percent in pre-market trading.
And Macy’s just announced that it is laying off 2,500 employees in an attempt to move in a more profitable direction.
So why is all of this happening?
Aren’t we supposed to be in the midst of an “economic recovery”?
That is what the Obama administration and the mainstream media keep telling us, but it is simply not true.
In fact, a new Gallup survey has found that the number of Americans that are “financially worse off” than a year ago is significantly higher than the number of Americans that say that they are “financially better off” than a year ago…
More Americans, 42%, say they are financially worse off now than they were a year ago, reversing the lower levels found over the past two years. Just more than a third of Americans say their financial situation has improved from a year ago.
That is why these stores are dying.
Things continue to get even worse for the middle class.
But a lot of people out there will continue to deny what is happening right in front of their eyes.  They are kind of like that woman over in California who was conned out of half a million dollars by a Nigerian online dating scam.  They will never admit the truth until it is far too late to do anything about it.
So have you been to a Sears or a J.C. Penney lately?
Do you believe that they will survive?




YRC and Teamsters reach tentative contract - will unions members vote yes though ? 


http://www.kansascity.com/2014/01/17/4759667/teamsters-reach-tentative-agreement.html


BUSINESS

Teamsters and YRC hammer out new offer

BY MARK DAVIS

The Kansas City Star

Teamsters union leaders on Friday announced a tentative contract agreement with Overland Park-based YRC Worldwide Inc. that the struggling company called the “best — and only remaining — path forward.”

A statement from the International Brotherhood of Teamsters said union leaders had engaged in “round-the-clock negotiations” with YRC officials since the trucking firm’s own contract proposal was overwhelmingly voted down last week by union members.
“We worked hard to find alternatives to save this company and to protect the jobs of our members at YRC,” Teamsters general president Jim Hoffa said in the statement.
The new proposal will be presented Tuesday to leaders of the many Teamsters locals that represent YRC’s 26,000 union employees throughout the country. That group will decide whether to present the proposal to a member vote.

Read more here: http://www.kansascity.com/2014/01/17/4759667/teamsters-reach-tentative-agreement.html#storylink=cpy
The new proposal will be presented Tuesday to leaders of the many Teamsters locals that represent YRC’s 26,000 union employees throughout the country. That group will decide whether to present the proposal to a member vote.
YRC had said it needed its first proposed deal to convince lenders to refinance more than $1 billion in debts YRC can’t repay. Chief executive James Welch had emphasized that all employees jobs, not just those of the Teamsters members, were riding on the vote and refinancing.
“The outcome of this week’s discussions is critical to the future of the company,” Welch said in a statement issued Friday after the Teamsters announcement. “The (contract) extension is something our employees can have confidence is the best — and only remaining — path forward.”
YRC’s statement, released after the financial markets closed, said the revised proposal addresses concerns that union leaders and members had about the original offer. The Teamsters said 61 percent of the nearly 20,000 ballots cast had rejected the first pact.
Under that plan, pay raises scheduled for this year and next would have been replaced with one-time bonuses of roughly equal size. The swap, however, would have meant that employees would have collected the amount only once rather than every year as with a raise.
Other proposed changes reduced vacation pay, froze the pay of some employees but not others, created a lower pay scale for employees newly hired for some jobs, and instituted penalties company-wide for repeated absenteeism.
YRC’s original proposal also would have extended the current labor contract into 2019, continuing a 15 percent pay cut in place since 2009 and pension cutbacks as well. The current contract runs through the end of March 2015.
The company, which operates YRC Freight and is one of the nation’s largest trucking firms, said the new proposal would extend its labor agreement through March 2019, but offered no other details about its terms.
YRC’s statement also pointed out that the revised proposal came about through negotiations with the Teamsters union. YRC’s first offer had not.
The Teamsters’ statement said the tentative proposal, if approved by a member vote, would give YRC a way to substantially reduce its debt. It also called on lenders to help out.
“We recognize that YRC will have to go back to the financial market to obtain financing,” Teamsters freight division director Tyson Johnson said in the statement. “But the market needs to understand that YRC’s front line workers are the lifeblood of the company and, while willing to play a role, will not shoulder the entire burden.”
YRC’s debt load mounted after a series of acquisitions several years ago, and it forced the company to make sharp cuts during the recession to stay in business.
In late December, the company announced it had an agreement with lenders and investors that would have reduced its debts by $300 million. The deal, however, was dependent on the first contract proposal passing. YRC did not say Friday whether that agreement would still be available if the new offer passes.
YRC has a debt payment of $69.4 million due Feb. 15.
The company’s stock gained 35 cents, or about 2 percent, and closed Friday at $15.82 before the report of the agreement. Shares rose 21 percent Thursday on news the two sides were meeting.

Job cuts .......


http://www.kake.com/home/headlines/Sprint-to-conduct-company-wide-layoffs-in-2014-240956991.html

OVERLAND PARK, Kan. (KMBC) — Sprint notified its employees on Friday that layoffs will happen company-wide during the first half of 2014.
The exact timing and number of layoffs were not immediately known.
"The extent of the reductions are still being determined," Sprint spokeswoman Melinda Tiemeyer said in a statement Friday afternoon.
"The reductions come as the result of greater efficiencies that we've achieved through simpler pricing plans and improved customer service, changing marketplace dynamics and changes in the product and services sold primarily to business customers," the statement said.
Management and non-management positions will be affected, according to Tiemeyer.
Assistance will be provided to affected employees through a company plan, the statement also said.




Intel to cut workforce by 5 percent, a reduction of more than 5,000 jobs

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Published: Friday, 17 Jan 2014 | 5:07 PM ET
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The Intel logo is displayed outside of the Intel headquarters on January 16, 2014 in Santa Clara, California.
Intel announced that it's cutting more than 5,000 jobs as the company looks to recover from decreasing personal-computer sales.
The announcement came a day after the company missed analysts' expectations and posted weaker than expected fourth quarter earnings. The company also gave a tepid forecast for its first quarter.
Shares of Intel plunged 2.6 percent on Friday.
Re/code has the full story here 


Flagstar to cut 600 jobs in restructuring move

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Correction appended

Troy-based Flagstar Bancorp Inc. (NYSE: FBC) announced a round of layoffs today, saying it will reduce the head count it had as of Sept. 30 by about 600 across all business lines as part of a restructuring it says will save $40 million annually.

Alessandro DiNello, the bank's president and CEO, told Crain's that he hopes this will be the last round of layoffs the company announces as it diversifies from a reliance on mortgage originations, which have been in decline as rates increase and as many of those who wanted to refinance loans have done so.

"We're moving the company forward. I'm done cutting. It pains me that we're impacting so many people, but I'm extremely optimistic about the future," he said.

The layoffs are expected to be fully implemented by the end of March. The company said it expects to incur a pre-tax charge of about $5.2 million because of the restructuring.

In July, Flagstar announced a round of 300 layoffs as it reduced its mortgage operations and sold off some of its mortgage-servicing rights.

DiNello said Flagstar hit its peak employment of about 3,800 last March. The July layoffs brought that down to about 3,400 as of the end of the third quarter on Sept. 30.

DiNello said employment will be about 2,800 by the end of March. He said about 450 of the 600 job cuts will be involved in mortgage originations, with the rest spread across the rest of the bank's business units.

DiNello said the bank had one of its best years for mortgage originations in 2013, about $32 billion, but that was still off sharply from $52 billion in 2012.

Other banks with a large national mortgage business, such as San Francisco-based Wells Fargo & Co. and New York-based JPMorgan Chase & Co., recently announced declines in mortgage originations in the fourth quarter.

The Mortgage Bankers Association predicts mortgage production nationally at $1.15 trillion in 2014, down from $1.7 trillion in 2013 and $2 trillion in 2012.

"Last March was the peak of mortgage activity for us," said DiNello. "Mortgage activity began to decline pretty significantly in July. We're adjusting to a completely different mortgage environment."

Analysts have been urging Flagstar to diversify from a reliance of mortgage originations and have praised recent company efforts, including a strong growth in commercial lending.

"Our stock price reflects that," said DiNello.

Flagstar's share price was $14.41 on Sept. 30. It opened Thursday at $20.08.

On Jan. 9, the New York-based research firm of Sandler O'Neill & Partners LP rated Flagstar as one of the top 14 bank stocks for 2014, predicting a target price of $23.

Flagstar is the largest bank headquartered in Michigan, with $11.8 billion in assets as of Sept. 30. It has 111 bank branches, all in Michigan, and 45 home-lending centers in 19 states.

Editor's note: An earlier version of the story had the wrong number of total layoffs, based on incorrect information from Flagstar. This version of the story is correct.












Read more here: http://www.kansascity.com/2014/01/17/4759667/teamsters-reach-tentative-agreement.html#storylink=cpy