Archive: June, 2012
Joseph N. DiStefano
NEW: If the change in control at Motorola Mobility's Horsham-based Motorola Home, following Mobility's sale to Google, means the new owner is looking to sell Home's video equipment business so it can concentrate on Mobility's larger phone business, here are some likely buyers, writes Bryn Mawr-based Light Reading Cable editor Jeff Baumgartner (corrected) (full item here):
- Ed Breen, the New Hope resident who ran Motorola Home predecessor General Instruments before his current gig running Tyco, could put a group together for his former colleagues, newly departed Home bosses Dan Moloney and Geoff Roman, if they can find backers with an interest in keeping rival Cisco from taking over the cable set-top box business I asked Motorola if the business was for sale. Reply: "We don't comment on rumor and speculation." Adds spokesw
- CommScope - Cable veteran Frank Drendel's equipment maker is backed by Carlyle Group, the same giant buyout house that's taking over Sunoco's South Philly refinery, by the way.
- Juniper Networks -- also in the cable equipment business
- Pace Plc -- already in the set-top box business
- Huawei Technologies -- Cable TV in China is much cheaper than in the US
Joseph N. DiStefano
Conservatives fought hard against the weekend, Social Security and Medicare when they were proposed. But once enacted, both Republican and Democratic Presidents and Congresses have embraced all three as they became part of American life.
So we can expect Obama's complex, compromised health care reforms -- which transfer responsibility for paying for uninsured people's health care, from hospitals and doctors, who passed costs to the public through higher fees, to taxpayers, who will pay for expanded health insurance -- will continue, even if Republican Mitt Romney is elected President.
Veteran Philadelphia investor James M. Meyer, of TowerBridge Advisors, wrote a thoughtful account of the costs, purpose and likely durability of "Obamacare," in a note sent this morning to clients of West Conshohocken-based investment brokerage Boenning & Scattergood. Highlights:
Joseph N. DiStefano
Onetime prosecutor Arlen Specter, turned out of the U.S. Senate by Pennsylvania voters in 2010, is making a new career defending financiers.
"Banned-from-banking Dunmore businessman Louis DeNaples enlisted a big name in the political and legal community in his fight with regulators: former U.S. Sen. Arlen Specter," reports David Falchek of the Scranton Times-Tribune, read his story via Wilkes-Barre Citizens Voice here.
"The Philadelphia Republican-turned-Democrat has joined forces with a team of Washington, D.C. banking attorneys in the bid to overturn regulators' lifetime ban from banking imposed on DeNaples, a key shareholder and former president of the board of directors of Dunmore-based First National Community Bank." Here's a 2010 Philadelphia federal appeals court decision affirming the ban against DeNaples.
Joseph N. DiStefano
UPDATED: Galman Group, Jenkintown, earlier this year bought the 120-unit Red Lion Manor apartment complex in Somerton, Northeast Philadelphia, and 111-apartment Cheswick Square in Roxborough, Northwest Philadelphia, for a combined $16.15 million, using $13.5 million in Fannie Mae-backed conventional loans from Bethesda, MD-based Beech Street Capital, via broker Meridian Capital, plus equity for the balance. Galman paid $7.7 million for Red Lion, $8.45 million for Keswick, according to the firm's Christopher Albright. The group, owned by Arnold Galman, plans $2 million in renovations. "We've bought two portfolios, total 634 apartments, in the last two years," Albright told me. That includes two properties bought from the former L&S Property Group, in Roxborough and Lansdowne, which had been taken over by Fannie Mae and needed substantial renovations. Those buildings are near completion and will be leased soon, the Galman firm says.
Joseph N. DiStefano
(UPDATE with company comment) Banks and pension funds aren't the only ones who suffer when interest rates are low.
At Radnor-based Lincoln National Corp., the life insurance and annuity sales giant that pays $7 million a year to stick its name on the NFL Eagles' South Philly stadium, "returns on new business may currently be below" the company's capital costs, warns analyst Steven D. Schwartz, in a report to clients of broker Raymond James & Associates. How can Lincoln keep selling policies that don't cover their financial costs? Lincoln insurance-and-retirement boss Mark Konen told investors that Lincoln "is in the life insurance business for the long haul;" it can reduce sales, but "leaving businesses or raising prices to uncompetitive levels" in order to boost financial ratios "will hurt shareholders in the long run by destroying the company's strong franchise," Schwartz reports.
Joseph N. DiStefano
Kennett Square-based Regional Rail LLC, which owns the Kennett-based, 100+-mile East Penn Railroad, Bucks County-based Tyburn Railroad, and the Middletown (NY) & New Jersey Railroad, has taken title to Conshohocken Recycling & Rail Transfer LLC, a 14-acre, Schuylkill River-side complex in the industrial zone south of Norristown that handles up to 2,000 tons of construction debris a day, by truck and rail.
"We plan to grow the business" by working with construction companies that seek LEED recycling certification for buildings, Regional Rail president Bob Parker said in a statement.
The deal closed two and a half years after Regional Rail owner FirstCity Crestone, a Chicago buyout firm, bought the defaulted loan that financed the dump's previous owners from Bank of America.
Joseph N. DiStefano
"The best hope for Sunoco's idled Marcus Hook refinery site is for it to be reborn as a multipurpose energy-processing facility, fueled by the growing output of natural gas from the Marcellus Shale drilling boom," according to a $100,000 Delaware County Industrial Development Authority-funded report by consultant IHS Global insight, writes my colleague Andrew Maykuth here. Read the full 122-page report by IHS's Brendan O'Neil, Joseph Waldo and colleagues here. IHS is a Massachusetts-based economic forecasting company whose Essington, Delaware County office is negotiating a move to Center City Philadelphia.
UPDATE: IDA says the report was funded by "cash reserves" financed by agency fees, and not by taxes, as reported in an earlier edition of this item.
Joseph N. DiStefano
A four-month investigation in which NY-based China Labor Watch interviewed 620 workers at Apple Inc. suppliers Toyo Precision, BYD Electronic, Quanta Computer, Wintek and Jabil Circuit, among others, "showed workers work up to 180 hours of overtime a month during peak periods, exceeding the legal limit of 36 hours per month ... Some factories also omit medical insurance as required by the law... Workers are exposed to hazardous conditions," Bloomberg reports here.
Summary and link to China Labor Watch's 132-page report here.
"Apple and its suppliers such as Taiwanese tycoon Terry Gou's Foxconn Technology Group have been the target of labor rights groups, which say the world's most valuable technology company are making iPhones and iPads in massive sweat shops.
Joseph N. DiStefano
Update: More from Brandywine boss Jerry Sweeney in my column in today's print Inquirer here. Earlier: Brandywine Realty Trust, the Radnor landlord that controls half the high-end office towers in Center City, plans to fill vacant city and suburban space with apartments (more on the lack of office demand here): 1) "1919 Market, which is owned through a 50/50 joint venture with [Independence Blue Cross] will include 292 market-rate apartments and 55,000 sq. ft. of retail, and is expected to be delivered by 4Q’14," writes Daniel P. Donlan, real estate analyst at Janney Capital Markets, in a report to clients this morning after Brandywine bosses met with investors.
Joseph N. DiStefano
Was the Bush-Obama General Motors Corp. bailout "one of the great turnarounds in American business history," as Wharton School management Prof. Michael Useem says?
With GM's (32% US taxpayer-owned) shares slipping below $20 (back to last year's lows, from $39 in early 2011), the electric Volt and European sales losing mone, the job's still not done, admits vice chairman Stephen Girsky. But the fact GM is profitable, still in business, and boosting sales is, he says, sufficient justification: "Failure would have been catastrophic." Instead, "we earned $9 billion last year," employ more than 200,000 (some called back to work after plants re-opened), and are expected to stay profitable this year and next.
Girsky won his million-dollar-plus-per-year job through an unlikely route: He was a stock analyst at Morgan Stanley covering GM and its more-profitable rivals, cheering its shutdowns and layoffs, in the 1990s and early 2000s. Later, as an auto consultant, he was United Autoworkers' union head Ron Gittelfinger's pick to serve on the GM board as it veered toward bankruptcy and near-collapse; he got along well wth GM's new boss, Dan Akerson; in 2010 he was named Vice Chairman-Corporate Strategy and Development, responsible for product planning, purchasing, supply chain, European division Adam Opel, and wireless communications wing OnStar, among other businesses.
