Monthly Archives: December 2012

The Top 10 Connecticut Business Stories of 2012

by Categorized: Jobs Date:

 

1.    Unemployment Spikes Upward
The year started as 2011 had ended, with Connecticut’s unemployment rate dropping nicely, at a level lower than the nation’s. Then in June, July and August we had the jobless summer, when the rate inexplicably shot upward and job creation stalled.
By the end of the year, the state’s economy had created basically zero jobs since the same months in 2011 — a stunning situation three years after the end of a recession. The November unemployment rate stood at 8.8 percent, with 175,000 people out of work and actively looking for jobs, compared with 7.7 percent for the nation.
Connecticut’s mix of industries is partly to blame, with defense cutbacks, a restructuring of the investment banks in Stamford, sluggish gambling at the casinos and an insurance industry treading water. Cutbacks in public employees also hurt, and Connecticut is more affected than most states by the threat of a fiscal cliff, which quelled hiring by defense contractors.

 

Connecticut’s jobless rate was lower than the nation’s, and moving in the right direction until the picture changed sharply in the middle of 2012

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43,000 Jobless Residents Should Keep Filing For Checks That Could End This Week

by Categorized: Economy, Jobs, Public finance Date:

Among the people most immediately affected by the fiscal cliff cliffhanger are those who have been out of work for more than 26 weeks, and stand to lose unemployment benefits after this week — maybe.

They should keep applying online for their checks, the state Department of Labor said, this week and into the new year until the new rules are clear.

There are 43,000 jobless Connecticut residents receiving benefits who would lose those payments immediately unless President Obama and Congress reach an agreement. We’d have thought the restoration of the so-called Emergency Unemployment Compensation (EUC) program would have been the first to be saved, along with the cut in payroll taxes enacted during the recession.

But no. As the dysfunctional U.S. House prepares to come back into session Sunday night, through the New Year if necessary, everything remains on the table.

The 43,000 threatened Connecticut residents are in addition to about 50,000 who are receiving benefits under the state program that covers the first 26 weeks, the department said.  That group, of course, would lose benefits after 26 weeks unless the program is extended.

Those threatened include thousands whose benefits had tapped out in the spring, when the benefits fell to 63 weeks because the unemployment rate fell, but who became eligible again this fall when the rate rose back up to 9 percent, pushing the eligibility up to 73 weeks.

“These federal benefits are providing a lifeline to many of our residents who are trying to make ends meet while looking for work,” state Labor Commissioner Sharon M. Palmer said in a written release.

It will be easier for the state to respond if everyone continues to file as if they were eligible, Palmer said.

It’s disheartening to have to go through the motions for a government program that may or may not exist, just as it’s absurd to ask companies to plan their spending in 2013 without knowing the rules.

Connecticut’s unemployed people were able to receive up to 99 weeks of coverage at the peak of the crisis, until early this year, through a combination of state and federal programs.

The department said it’s keeping affected people informed by mail and is urging all people seeking work to contact a CTWorks Career Center by searching online or by calling 2-1-1.

In this and other areas, Connecticut could be especially vulnerable because the U.S. economy is showing improvement and the state situation is not.  It’s possible that extended unemployment benefits could be curtailed on economic grounds even though it’s still needed in places such as here.

Likewise, Connecticut’s stalled recovery could be set back further if mortgage rates and business interest rates start to climb, reflecting a national recovery that we are not seeing.

 

Metcalfe’s Calls It An Era in West Hartford

by Categorized: Commerce, Small Business Date:

There’s not much business news on Christmas eve, but in West Hartford, Monday was the last day for Metcalfe’s Custom Framing, after 50 years at Bishop’s Corner and nearly 30 years in Hartford before that.

My colleague Julie Stagis wrote about Bruce Metcalfe’s retirement, prodded partly by the economy.

In addition to framing, over the years Bruce replaced a lot of panes, painstakingly, for a lot of old West Hartford windows.  Nestled in a less traveled row of stores and offices at the shopping center, it was one of those places, and he was one of those people, that make community-based business the heart of American commerce, and Saturday errands less of a chore.

A great retirement to Bruce Metcalfe, and for those of us who are working, it’s back to the grindstone Wednesday, or maybe next week.  Happy Holidays to all.

The Healing Power of Pie

by Categorized: Small Business Date:

Among the countless contrasting scenes of hope amid despair in Newtown this week, Thursday in the middle of town was as stark as it gets: Hundreds of mourners lined up at the Honan Funeral Home, a doleful black line in the waning light of the seventh day.  A few doors down across the street, Beth Howard handed out slices of apple pie to anyone, an energetic spirit in a red wool coat, spreading healing cheer one paper plate at a time.

This is her mission, in Newtown and across the country. Journalist, author, pie-baker, impulsive traveler, Howard brings the gospel of pie from her 24-foot RV, “Pie Across the Nation,” from her Pitchfork Pie Stand in the famous American Gothic House in Iowa and from her heart, which was broken three years ago with the sudden death of her 43-year-old husband.

Since that day in August, 2009, Howard has tested her idea that pie can help ease grief, chronicled on her web site, TheWorldNeedsMorePie.com, and in her book,  “Making Piece, a Memoir of Love, Loss and Pie.”

“It rips your heart out,” Howard said, looking toward the wake of a child across the street. “But the fact that we can warm their hearts a little bit…it helps. I’ve been through the darkness and I’ve come out the other side.”

“It’s just pie, but really it’s so much more than that. It feeds the soul…It’s about simplicity, it’s about comfort, it’s about sharing.”

 

Beth Howard, left, with Ann (center) and Colleen McCarthy of Sandy Hook, in Newtown Center. Dan Haar/The Hartford Courant

It’s a team effort, uniting old friends. When the tragedy unfolded, Howard was at home in Eldon, Iowa where she lives in the house that inspired Grant Wood’s masterpiece.

On her Facebook page, she posted:

“Overwhelmed and heartbroken by the today’s tragedy, I feel like packing up my pie supplies into my RV and driving to Connecticut. If making pie and sharing it with the citizens of Newtown would help ease their pain I would load up a hundred cases of apples and start driving right now.”

The response was enormous. The next day she left in the RV. She picked up Mike Nahra in Chicago, a friend from the Davenport High School class of 1980 that she had not seen in decades.  Two other old friends traveled to Newtown.

Along the way, they stopped in New Jersey, where friends were busy making 240 pies, all by hand. By Tuesday, they made it to the grieving town.

“I was nervous that people would think we’re imposing, and it’s been the opposite,” Howard said, speaking into a CNN camera. “It’s been a privilege to be able to be here, to be able to help.”

On Thursday morning, Howard and her friends taught pie-making at Newtown High School, emerging with 30 more pies.  As the handed out slices, the response was universally positive, some townspeople joining in the effort, mourners stopping or perhaps just walking by, mustering a “thank you” through tears.

On Friday, the group is baking more pies with local elementary school children in the upstairs kitchen of Edmond Town Hall, the historic building that’s now a theater and civic gathering space. At Edmond on Saturday, town leaders will give out hundreds of teddy bears to children of Newtown, yet another uplifting gesture of the sort that make Beth Howard fit right in.

“I don’t want to leave,” she said, leaning on the RV parked in front of Edmond.  “I don’t have to leave. I’ve got my home here.”

State Treasurer Reviewing Gun Investments, Which Total Less Than $1M

by Categorized: Defense, Public finance, Wall Street Date:

Connecticut’s pension funds hold less than $1 million in direct holdings in firearms manufacturing firms, state Treasurer Denise L. Nappier said late Wednesday, but her office is reviewing indirect holdings and will “scrutinize” its policy on all gun-related investments.

The state’s pension funds, with more than $23 billion in total value, is limited to $57,233 in stock and $830,500 in bonds of Alliant Techsystems, a Virginia-based maker of solid rocket motors and military and commercial ammunition.

“As a shareholder of Alliant Techsystems, the Newtown tragedy makes it abundantly clear that we must scrutinize our direct exposure, as well as our indirect exposure to companies throughout the supply chain,” Nappier said in a written release.

“I join the nation in mourning the tragic deaths…and have, like countless others, considered what can be done to avoid another such senseless tragedy,” Nappier said. “I am reviewing our investment exposure to not only gun manufacturers, but also to those companies that distribute these weapons.

“My interest is ensuring that any company in which Connecticut pension funds are invested conducts its business consistent with our standards for responsible corporate citizenship — which includes considerations of public safety and the well-being of our children.”

That’s not an empty platitude coming from Nappier, as she has been at various times one of the nation’s most aggressive fund fiduciaries when it comes to corporate responsibility — especially on the issues of splitting the roles of chairman and CEO, and on executive pay.

The surprise is that the state funds’ holdings in the firearms industry are not larger.  The two publicly traded U.S. gunmakers are both nearby, Smith & Wesson in Springfield and Sturm, Ruger & Co. in Fairfield,  Both firms have had a dramatic share price run-up since President Obama was elected in 2008.

The industry was born in the Connecticut River Valley and there are still many local employees in firearms, chiefly at Colt Defense LLC and Colt’s Manufacturing Co., which are privately owned in West Hartford. The state pension funds invested $25 million in Colt’s in the early 1990s, before the company sought bankruptcy protection, and another $10 million after the bankruptcy but before the company split in two.

Connecticut is not the only state reviewing its holdings in the firearms industry.  On Monday, the California state treasurer ordered a similar review and said it may be inconsistent for that state to hold investments in companies whose products are illegal there.

Connecticut, like California, has an assault weapons ban but manufacturers have ways of getting around it, and the semi-automatic rifle used by the shooter in Newtown was legal in this state.

Nappier’s announcement came on the same day when Obama vowed to enact stricter gun laws. Companies including Colt Defense and industry groups such as the National Shooting Sports Foundation, based in Newtown, and the National Rifle Association, have expressed outrage and condolences in the massacre but have not yet weighed in on the rising national calls for a renewal of an assault weapons ban.

On Tuesday, Cerberus Capital Management, which owns several gun manufacturers, including Bushmaster, maker of the rifle used in Newtown, shocked the industry by announcing it will sell the Freedom Group, exiting the business. The father of Stephen Feinberg, the Cerberus founder, lives in Newtown.

The NRA said Tuesday it will “offer meaningful contributions to help make sure this never happens again.”

Florists In Newtown: Heavy Heart, Heavy Workload

by Categorized: Commerce, Retail, Small Business Date:

The businesses in Newtown have really stepped up their role as the glue of the community, in addition to churches and public agencies. We’ll be writing more about that. For now, a telling look at the florists and nurseries — overwhelmed and working with a heavy heart, but in control and doing their part.

Click here for column on the florists of Newtown.

Below, Gary Ober and Debbie Natale at Hollandia Nursery in Bethel on the Newtown line, with grave blankets the nursery made and is donating — 12 pink, 8 blue, one for each murdered child.  Dan Haar/The Courant

 

 

After Outcry, Wall Street Firm That Owns Maker Of Newtown Rifle Exiting Firearms Industry

by Categorized: Corporate finance, Defense, Manufacturing, Politics, Wall Street Date:

The private equity firm that owns Remington Arms, Marlin Firearms and Bushmaster, which made the gun used in the Newtown killings, is selling the businesses as a result of the outcry over weapons since Friday.

Those gun-makers and several others are part of a company called Freedom Group, which has become a dominant force in the firearms industry over the last five years.  Freedom Group was assembled and is 95 percent owned by Cerberus Capital Management, which said in a statement released Tuesday that it will sell the group of companies.

The statement was highly unusual in the private equity world, in which firms typically say little or nothing about their investment decisions other than in financial filings.

“It is apparent that the Sandy Hook tragedy was a watershed event that has raised the national debate on gun control to an unprecedented level,” Cerberus said. “As a Firm, we are investors, not statesmen or policy makers.  Our role is to make investments on behalf of our clients who are comprised of the pension plans of firemen, teachers, policemen and other municipal workers and unions, endowments, and other institutions and individuals.

“It is not our role to take positions, or attempt to shape or influence the gun control policy debate.  That is the job of our federal and state legislators.”

The firm has a close connection to Newtown: The 86-year-old father of Stephen A. Feinberg, the billionaire financier who founded and heads Cerberus, lives in a private community in the town.

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SolarCity Adding Space, 15 Employees In CT At Tumultuous Time

by Categorized: Economic Development, Energy, Jobs Date:

UPDATE: Read my column on SolarCity’s IPO and Rocky Hill Expansion and how it affects people in very different places on the economic ladder.

 

The CEO of SolarCity is heading to Rocky Hill for an expansion of Connecticut operations Thursday, hours after a tumultuous IPO that saw the company’s shares skyrocket from a disappointing opening price.

SolarCity Corp., of San Mateo, Calif., will boost its Connecticut staff by 15, to 60 people, and is moving to larger quarters in Rocky Hill from Wethersfield.  At a 3 p.m. event Thursday, executives and Gov. Dannel P. Malloy declare that Connecticut is a stronghold for the fast-growing rooftop solar energy industry.

In some ways that’s true, as installations here and elsewhere are mushrooming, thanks in large part to state subsidies and other policies.  But skies are anything but clear for a fledgling industry trying to make solar energy an economically viable alternative for the masses.

SolarCity (Nasdaq: SCTY) raised a net $85 million this in its initial public offering of 11.5 million shares at $8, far less than the $13 to $15 the company said last month it hoped to fetch. By midday Thursday, the first day of trading, shares had shot up above $12 — somewhat odd considering reports that the company couldn’t interest investors in the higher valuation as late as Tuesday.

Elon Musk, co-founder of PayPal and Tesla Motors, who now wants to send a person to Mars through his SpaceX venture, is the chairman and 28 percent owner of SolarCity, and is the cousin of CEO Lyndon Rive.

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Bridgeport Among 10 Dirtiest Regions, And So Is New Haven

by Categorized: Real Estate Date:

You might guess that metro Bridgeport was one of the most polluted areas in the country, but New Haven too?

On Forbes’ list of the 20 dirtiest cities in America, Bridgeport comes in at No. 4 and New Haven isn’t far behind, at No. 7.   The ranking, compiled with the help of demographic list kingpin Bert Sperling (of Bestplaces.net), focuses on air and water pollution from industry and vehicles.

California is far and away the dominant dirty destination, with the top two metro areas (Fresno and Bakersfield), six of the top nine and eight of 20, including San Jose (No. 8) and Los Angeles (No. 20).

New York escapes the Top 10 at No 11.  Hartford is safely off the list, perhaps because aerospace is cleaner than automotive, oil and chemicals. Cleveland, the butt of jokes in the ’70s, has cleaned up its act all the way to No. 19, though some unemployed workers may wish the Cuyahoga River still had factories on its shores.

On Bridgeport: “Despite being in one of the nation’s richest states, much of Bridgeport remains blighted. For decades the Raymark Industries site manufactured car parts and asbestos and filled in wetlands by dumping toxic waste on them. The EPA has been removing lead, asbestos, arsenic and dioxins for 20 years.”

For the record, the Raymark/Raybestos Superund site is in neighboring Stratford, highlighting the fact that while Forbes claims to list the dirtiest “cities” in America, it’s actually looking at entire metro areas. So don’t breathe easy just because you live in the ‘burbs.
Bridgeport Mayor Bill Finch and other local leaders told FOX CT’s Ayana Harry that the ranking is focusing on the old, not the new. “I don’t think national business magazines ever walk the streets with me and to see what’s going on, so we don’t take it very seriously,” Finch said.

On New Haven: “The 850,000 residents of the New Haven-Milford metro area may enjoy having a top flight school in Yale University, but due to their location at the intersection of I-95 and I-91, their lungs pay the price.”

And what about Elizabeth, New Jersey? Don’t these people take the turnpike?

 

State Approves Online Betting For Horse Racing, Set To Launch In April

by Categorized: Commerce, Public finance Date:

The adage that you can’t control the Internet showed itself again Tuesday as Connecticut approved online horse racing wagering, even as broader Internet gaming is hotly debated.

My story lays out the details.

Quietly, the state Department of Consumer Protection extended the license of the company that operates off-track betting at 15 locations, and by telephone. The logic: Under a federal exemption, Internet horse betting is covered under the telephone betting license.

Anything that adds revenue to the state is being fast-tracked, pardon the pun.

Does that make state-sanctioned gambling more akin to, say, the movie industry — people spend money willingly on a form of entertainment that creates local jobs — or is the state feeding off the victims of an addiction?

There’s been plenty of back-and-forth about the issue at the state Capitol.  Gov. Dannel P. Malloy, wisely, knows it can’t be stopped.

Thankfully, as Rep. Stephen Dargan puts it, with gambling we at least have a break from the usual red-blue political divide.