The [Thursday] Papers
"Battery maker Duracell is opening an office downtown today, bringing over 60 executive jobs to Chicago," Crain's reports.
"Mayor Rahm Emanuel is to make the announcement today."
I'm not going to say it's a bad thing that Duracell is moving some executive jobs here, but if you look at the big picture, it's not necessarily a good thing, either. Here's why:
"Procter & Gamble's David Taylor spoke Thursday about the need to 'wow' consumers with innovative brands and packaging, but the new CEO's comments were crafted to create a good first impression with market analysts.
"Taylor, who spoke publicly for the first time since taking charge of the Cincinnati-based company, tried to wow analysts by committing to $10 billion in new productivity savings over the next five years."
I hope we all understand what is meant by the phrase "productivity savings."
"Procter & Gamble Co. shed 2,700 employees and about $2.5 billion in annual sales when it closed on the transfer of its Duracell battery division to Warren Buffett's Berkshire Hathaway Inc. this week."
* March 3, Danbury (CT) News-Times:
"As Berkshire Hathaway closed its acquisition of Duracell this week, the Bethel-based battery maker appeared to be settling on Chicago - where its new CEO works - as its de facto headquarters.
"Duracell and Berkshire Hathaway have made no announcement designating Chicago as Duracell's new headquarters, and on Thursday Duracell spokesman Richard Abramowitz told Hearst that the battery maker's main office will remain in Bethel.
"But an online job ad for Duracell disclosed an intent to set up camp in there, and Abramowitz confirmed that CEO Angelo Pantaleo is hiring corporate staff to work in a new Duracell office in the Windy City . . .
"The job ad posted on the website of Indeed.com states that 'Duracell is building out its corporate and strategic functions and looking for key talent across multiple functions' as a result of moving its headquarters to Chicago. Abramowitz said the job ad was old and indicated Bethel remains Duracell's formal headquarters.
"We are not moving anybody to Chicago," Abramowitz said.
"Any shift of Duracell's main corporate office - whether on paper or in functional practice - would mark Connecticut's second major defection in as many months, after Fairfield-based General Electric announced plans to relocate its headquarters and 200 jobs to Boston this summer.
"Procter & Gamble picked up Duracell as part of its 2005 acquisition of Boston-based Gillette, and had in 2014 planned to spin it off as an independent, publicly traded company.
"At the time, Duracell indicated it would keep its Bethel headquarters, which was constructed in 1995 on a hill above Berkshire Corporate Park.
"Duracell is the second largest taxpayer in the town after Eversource Energy, according to the most recent figures from the Connecticut Economic Resource Center."
Duracell may be adding jobs by building out its executive suite, but it's consolidating elsewhere - despite the continuing enormous profits of its new owner, as we shall see.
"Duracell will close its 430-employee AA battery plant in Lancaster over the coming three years, eliminating one of that county's largest private employers . . .
"Lancaster County Administrator Steve Willis says the decision means Duracell will leave the county after 35 years of making batteries in the community.
"Willis has told others in the Lancaster County community that the decision to close the plant had nothing to do with the performance at the battery factory. Instead, the move is 'coming down from corporate,' he says . . .
"With the closing of the plant, Duracell will likely have to give up some of the local incentives the company was granted two years ago in exchange for a $69 million spend at the Lancaster plant. In 2014, Lancaster County agreed to cut its property taxes for 30 years in exchange for the upgrades at the plant."
"Duracell said the move will lead to 'some' job growth in LaGrange, which is about 330 miles (531 km) southwest of Lancaster, and that Lancaster workers will be encouraged to apply for work there.
"The company, which said it has about 3,000 employees, also makes C and D batteries in a plant in Cleveland, Tennessee."
"James Ronald 'Ronnie' Anderson, 69, of Cleveland, Tennessee, passed away on Monday, July 25, 2016 in a local hospital.
"He was born on May 29, 1947 to the late JW and June Anderson. He was a Vietnam veteran in the United States Navy. He retired from Duracell with over 30 years of employment. He enjoyed boating, fishing, and camping. But his greatest joy was spending time with his granddaughter Gracie."
The obits of papers where Duracell divisions are located are littered with folks like this. Let's keep business stories human. Oops, too late . . .
"Warren Buffett's Berkshire Hathaway said second-quarter profit rose 25 percent on earnings from newly acquired manufacturing businesses and improved results at insurance operations.
"Net income climbed to $5 billion from $4.01 billion a year earlier, the Omaha, Neb.-based company said Friday after the market closed.
"Berkshire's businesses represent a cross-section of the economy and provide Buffett, 85, with a steady stream of cash for more investments. Since the start of the year, he's added to the company's manufacturing operations, completing deals for battery-maker Duracell and for Precision Castparts, a global supplier to the aerospace industry. Those businesses have helped bolster results, as did a rebound at auto insurer Geico . . .
"The cash pile climbed to $72.7 billion as of June 30 from $58.3 billion three months earlier, helped by Kraft Heinz's redemption of preferred shares for about $8.3 billion. The extra funds add to Buffett's resources for another major acquisition.
"'He's got to do something to deploy that cash,' S&P's Seifert said. 'People are going to wonder where the next acquisition comes from.'"
What in the world to do with all this cash?!
"According to tax records, Duke Energy is the county's largest taxpayer and Duracell is the second largest.
"The city of Lancaster, Lancaster County and the Lancaster County School District all depend on property tax revenue generated by the 300,000-square-foot plant, though the level of dependency varies.
"This year, Duracell paid about $1.2 million in school taxes, $474,000 in county taxes and $608,000 in municipal taxes to the city of Lancaster . . .
"Duracell is the municipality's largest taxpayer and one of its top three water users, said City Finance Director James Absher. This past year the battery manufacturer paid $147,000 for water and sewer services, he said.
"But Absher said that isn't as big an issue as the $608,000 potential loss in property taxes.
"While taxes will still be paid on the property, it will drop in value once the machinery is removed.
"'It means I lose 6 percent of our general fund budget,' Absher said. 'And under state law, we can't get it back by raising millage. When you lose something like that, you just can't make it up elsewhere. We hope something comes in to replace Duracell, but you prepare for the worst and hope for the best,' he said.
"Already stretched to the financial hilt by a flat tax base, the city is in the early stages of complying with a time-sensitive EPA-mandated consent order on sewer system upgrades that could cost up to $18 million.
"There are also other issues, such as police department pay and higher employee health insurance premiums, as well as the cost of providing services to its citizens.
"'Of all the things we could imagine happening, losing Duracell was not one of them, said Lancaster City Councilwoman Jackie Harris. 'It was as big a surprise for us as their employees' . . .
"Outlaw said in the past five years, Duracell's employees have donated a combined $609,000 for the United Way community campaign and the 15 local agencies supported by the annual fundraiser.
"'It's in the culture of their employees,' she said. 'Not only that, many of them take it a step further and become volunteers for the agencies they support.'"
"Two years ago, Lancaster County gave Duracell property tax incentives designed to save the company about $11 million over three decades in return for the battery manufacturer spending $69 million over five years to upgrade its plant.
"It's the kind of deal Lancaster and most other counties make often. Duracell gets to divert tax payments into profits, and the county secures good-paying manufacturing jobs. Those workers support their families and spend their money locally, supporting many more jobs and families.
"But what happens when things don't work out as planned?
"Duracell announced last month that it will start phasing out production at its Lancaster plant next spring and shut down by 2019, eliminating 430 jobs.
"It started benefiting from the tax incentives in 2014. What happens to the deal now? Do we get money back?
"Maybe, but it's really complicated, Lancaster County Administrator Steve Willis said Thursday.
"'For this year, nothing changes,' Willis said. 'After that, County Attorney John Weaver will consult with Mike Ey to see what we have to do' . . .
"There have been at least three such agreements with Duracell over the years. Before the 2014 deal, the last one was in 2008. It involved $60 million in production-line upgrades. Each new deal supersedes the last one.
"The 2014 agreement called for Duracell to pay an annual fee of $73,645 for 30 years and then pay less in property taxes for the county, the city and the school district."
"Jamie Gilbert knew building Lancaster County's new economic development department would be a big challenge, but the news he got on his eighth day at work was a punch in the gut.
"Duracell, the county's seventh-largest employer, announced it would phase out production at its Lancaster manufacturing plant starting next spring, and that all 400-plus jobs would be gone within two years . . .
"The Duracell move shocked Lancaster's business community. Just two years ago, the county gave the battery maker an economic incentive package worth $11 million in return for a $69 million production-line upgrade by the company.
"All indications were that Duracell, bought by Berkshire Hathaway in 2015, was here to stay."
* What's good for executives is rarely good for workers - and often involves the redistribution of wealth upwards.
* When companies move here - whole hog or just executive suites - there is pain elsewhere that we shouldn't ignore. It's nothing to celebrate if the bottom line hurts more people than it helps.
* Companies and executives who move here aren't automatically good corporate citizens just because they are now "ours."
* I sense a trend of HQs moving here because CEOs who already live here don't want to move to where their companies are actually already located. True? Assignment Desk, activate!
* Loyalty is a one-way street.
Richard Abramowitz, you are Today's Worst Person Almost Certainly Moving To Chicago.
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False implication driven by inexplicable continued sympathy for the ex-governor shading coverage. Blagojevich's crimes were far more serious (essentially leading an extortion ring from the chief executive's office of the country's fifth-largest state - and dragging us all along for the ride - versus cheating campaign contributors), and Jackson cooperated with prosecutors, pled guilty and didn't even go to trial. Also: As has been reported many times and repeated by the U.S. district court judge in charge of the case and the 7th circuit court of appeals, Blagojevich got a huge sentencing break considering federal guidelines.
See also: Blago Ruling Indicts Media.
That would be former Pat Quinn communications chief Bob Reed. Every time the media does a story about the revolving door between government, lobbyists and corporations, they should be required to include a caveat about their own revolving door between government, public relations and news organizations.
From media manipulatee to media manipulator to media manipulatee . . . with no penalty.
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Posted on September 15, 2016
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