Archive: January, 2011
Corporate America has gotten Obama's attention.
His State of the Union message called for lower business taxes, foreign trade pacts, limits on lawsuits, and aid to science education and public-private road and rail projects -- all near and dear to corporate lobbyists.
Business leaders are "heartened by President Obama's focus on American competitiveness" and his willingness "to change direction and focus on what is necessary to drive a vigorous recovery" -- though he still has to "manage down the debt and deficit," before the nation's largest companies are likely to hire more people and put a dent in the unemployment rate, said John Engler, head of the Business Roundtable, which counts the bosses of ExxonMobil, Dow Chemical, Boeing, General Electric, Wal-Mart, Verizon, State Farm and JPMorgan on its executive committee.
"President Barack Obama embraced much of the business community’s agenda last night, calling for progress on stalled trade pacts, investments in roads and education, reworking the corporate tax code, and freezing discretionary spending," writes Bloomberg here.
"The pledges in the State of the Union address by Obama, who tussled with business groups during the first two years of his term, match requests by chief executive officers from Verizon Communications Inc., Honeywell International Inc. and JPMorgan Chase & Co. in a report they presented to the administration last month...
"With Republicans taking control of the House of Representatives and U.S. growth still sluggish, Obama said his proposals were aimed at creating jobs and reorienting the economy to confront challenges" from China and other fast-growing rival nations.
Susquehanna Bancshares, of Lititz, Lancaster County, says it has agreed to pay $273 million, or about $13 a share, for Abington Bancorp of Jenkintown, which has lately traded around $11-12 a share.
Susquehanna says it hopes to save $8 million a year after cutting costs following the merger. That's equal to about one-third of the yearly expenses at Abington's main subsidiary, Abington Savings Bank, which employs around 150 at around 20 offices, mostly in Montgomery County.
Abington had lost money in recent years from a string of bad investments and loans, but share prices had risen in the past year, in part due to expectations the company would be acquired. With U.S. interest rates at near-record lows, community banks have been seeking merger partners to boost profits for their owners.
Mayor Nutter, his business liaison Alan Greenberg, top officials in the Commerce Department and PIDC and the state Public Utilities Commission (which actually deserves some of the credit) got to associate themselves with a bona fide Philadelphia success story today when Energy Plus, the electric power marketing firm started two years ago by veteran credit card moguls Richard Vague and Kevin Kleinschmidt, moved with their 140 employees into expanded quarters atop the University City Science Center's 10-story building at 3711 Market St.
The mayor worked the crowd at the ribbon cutting and cited Vague and Kleinschmidt as examples of "the innovation, energy, R&D, the kind of things you'll hear the President talk about" at his State of the Union message tonight. Nutter said he'd gotten a preview in a mayoral meeting with Obama, Biden and economic aide Gene Sperling earlier this week. He said the president will advocate "more (things) like the $130 million grant to the Navy Yard Clean Tech Hub supported by the Department of Energy."
What's that have to do with Energy Plus, which retails someone else's electricity? "I don't have your bio and your background," Nutter said to Vague before the crowd, "but I know you really care... We really appreciate you being in Philadelphia... We want to make this the most green city in America... Energy Plus is one more demonstration that the city is turning around. We're open for business."
Pilot Freight Services, Lima, plans to expand its new Mexico City facility and adding new ones in Toronto and Amsterdam as it follows customers overseas, chief executive Richard G. Phillips Jr. told me.
Pilot says it shipped $424 million in packages for General Electric Corp., Dell Computer, Best Buys and hundreds more clients last year, up 31% from 2009. Shipments topped 583 million pounds, up 29%.
That's compared to a 9% sales increase at UPS and a 12% increase at FedEx, according to their most recent numbers, reported last fall.
Cancer vaccine developer Inovio, of Blue Bell, says it's raised $24.3 million in a share and warrant sale via Roth Capital Partners LLC, to "fully fund our planned Phase II clinical study for our DNA vaccine against cervical dysplasias and cancers, as well as other clinical studies that Inovio intends to directly fund and launch in 2011," said chief executive Dr. J. Joseph Kim in this statement.
At a time when Govs. Corbett (PA) and Christie (NJ) are weighing whether to continue, trim or end their states' multi-million-dollar business subsidy programs, Wells Fargo chief economist John Silvia and his staff have put out a paper warning that decades of state "economic development" grants have failed to prove they are cost-effective at creating jobs or boosting local economies. The job and tax benefits of these giveaways are poorly measured and "will not likely be justified in the eyes of taxpayers, especially in a time of very tight fiscal budgets," writes Silvia, chief economist at Wells Fargo Securities, in "The State of Economic Development Incentives," a review of private-sector investment programs by Pennsylvania and other states.
The job and tax benefits of these giveaways are poorly measured and "will not likely be justified in the eyes of taxpayers, especially in a time of very tight fiscal budgets," writes Silvia, chief economist at Wells Fargo Securities, in "The State of Economic Development Incentives," a review of private-sector investment programs by Pennsylvania and other states.
Failures are embarrassing: In 2005 North Carolina gave Dell Computer more than a quarter of a billion dollars in income and franchise tax breaks and job development financing for a new plant Dell promised would create 1,200 jobs. But "Dell ended up closing the plant in late 2009, laying off more than 900 employees" as desktop computer sales fell. Tax money "boosted short-term employment and output, but failed to provide a long-term improvement in the local economy."
Ballard Spahr says the ex-Governor is back on his old law firm Chairman Arthur Makadon announced Rendell's return this morning. Ballard won lots of government business while Rendell ran the state. Now it'll try to use his national contacts (Rendell was a controversial head of the Democratic National Committee) to win more out-of-state work now that Republicans have taken control of Pennsylvania.
Chairman Arthur Makadon announced Rendell's return this morning. Ballard won lots of government business while Rendell ran the state. Now it'll try to use his national contacts (Rendell was a controversial head of the Democratic National Committee) to win more out-of-state work now that Republicans have taken control of Pennsylvania.
Rendell said in the announcement: "Ballard was always one of the best law firms in Philadelphia and its profile and strength as a national firm are greater than ever before. The firm had seven offices when I left in 2003. It now has 13. This is a great time to be coming back and I look forward to contributing to the firm’s growth and stature.”