Saturday, December 25, 2010

Tuesday, January 9, 2007

Goodyear says Goodbye to Strike (and appx 420 million)

The world's third-largest tiremaker on Tuesday said the multimillion dollar cost of a three-month strike by union workers is well worth the long-term savings Goodyear Tire & Rubber Co. expects to see from the new labor deal.

During a conference call with analysts, Goodyear chief financial officer Richard Kramer said the strike that began Oct. 5 and ended last week drained between $30 million and $35 million a week from the company.

At 12 weeks long, that means the work stoppage by the United Steelworkers union representing some 15,000 workers could cost Goodyear between $360 million and $420 million, most of it in the fourth quarter ended Dec. 31.

Source: MSN Money (click to read complete article)

Thursday, December 28, 2006

J.C. Penney Fires Operating Chief West, Won't Say Why

J.C. Penney Co., the third-largest U.S. department store company, fired Chief Operating Officer Catherine West six months after she joined the retailer.

The company didn't say why it terminated West and spokesman Tim Lyons declined to comment. West's departure is effective immediately, Plano, Texas-based J.C. Penney said today in a statement. The shares fell 1 percent.

Store operations, property development and logistics will again report directly to Chief Executive Officer Myron Ullman as West will not be replaced. Under Ullman, the company has accelerated store openings to encourage more shopper visits and added private brands including X-Games and Vans children's clothing.

``It's as much news to us as anyone else,'' said Arun Daniel, a New York-based analyst with ING Investments LLC. The firm manages $40 billion, including J.C. Penney shares. ``J.C. Penney's execution the last few years has been flawless. Based on the trends so far, there's nothing concerning us as it relates to operations or in-store execution.''

West, 47, left her job as president of Capital One Financial Corp.'s U.S. credit-card business to join J.C. Penney in July. Before joining Capital One, West spent nine years at First USA Bank and previously ran the credit-card operations at Chevy Chase Bank FSB.

Attempts to reach West or Ullman for comment at the J.C. Penney headquarters were directed to the company's media relations department.

Shares of J.C. Penney fell 76 cents to $77.64 at 4 p.m. in composite trading on the New York Stock Exchange. They have climbed 40 percent this year and in November hit a record $82.49.

Severance, Compensation

West's severance package, standard for executive board members, includes 18 months base salary, or about $1.13 million, a ``target performance bonus'' and ``acceleration of any equity,'' said company spokeswoman Kate Parkhouse. She declined to elaborate on the value of the bonus and equity.

West was granted stock options valued at $17.1 million as part of a compensation package after she relinquished benefits at Capital One, the company said in a filing with the U.S. Securities and Exchange Commission in June.

She was also to receive $750,000 in salary, a minimum cash incentive payment of $1 million and restricted stock units valued at $3 million.

West was ranked 46th on Fortune magazine's 50 most powerful women in business in 2006. Her maternal great-grandfather and grandfather were top executives at Chicago department store Marshall Field & Co., according to an August 2005 profile in Virginia Business magazine.

West started her career at People Express Airlines in 1981 after graduating from Lynchburg College in Virginia.

`Unconventional' Choice

``I just think she didn't work out,'' said Robert Buchanan, an analyst at A.G. Edwards & Sons in St. Louis. He has a ``buy'' rating on the shares and doesn't own any. ``I thought it was unconventional to bring in someone from the outside.''

Ullman took over as J.C. Penney's top executive in December 2004, stepping in to complete a five-year turnaround begun by former CEO Allen Questrom. He has expanded offerings on items including furniture and is introducing exclusive brands such as the Ambrielle lingerie collection to boost sales.

The company's third-quarter profit rose 23 percent to $287 million as the new clothing brands drove the fastest sales growth in two years, J.C. Penney said Nov. 9.

`Smooth' Transition

``We do not believe Ms. West's departure represents a big loss,'' Deborah Weinswig, an analyst at Citigroup Inc. in New York, wrote today in a report. She has a ``buy'' rating on the stock. With Ullman resuming oversight of West's areas of responsibility, Weinswig expects a ``smooth'' transition.

Operations will go back to its previous structure as Ullman will oversee executive vice president Michael Taxter and senior vice presidents Michael Dastague and James LaBounty, Parkhouse said.

The last COO prior to West was Ken Hicks, who was promoted to president and chief merchandising officer almost two years ago.

As of Oct. 28, the company operated 1,037 department stores in the U.S. and Puerto Rico. The company has said it plans to open more than 175 stores in the next three years.

Source: Danny King and Heather Burke

Thursday, December 21, 2006

Housing prices going down ... Health-care costs going up

Housing prices going down: That makes news because it has happened so rarely.

Health-care costs going up: That makes news even though it happens all the time.

In both cases, the potential hit to Americans' pocketbooks is huge. And that's why looking at what made news in Personal Finance in 2006 is such an important exercise:

You want to know where your money is going to disappear in 2007.

In the case of housing, the news is only mortifying if you're a home seller and need to unload quickly. Otherwise, the fact that sales are chilled and values stagnant has only a psychological effect: How much less rich will you feel when your No. 1 asset, your home, isn't appreciating at a double-digit pace anymore?

With health care, the news is only bad if you get sick, or if you happen to be among the millions of workers getting smacked by bigger insurance premiums from their employers. Unfortunately, that covers almost everyone -- unlike our health-insurance system itself, which will leave at least 40 million without coverage in 2007.

There are other issues as well that will affect your personal finances in 2007, and in our Year-End Review & Outlook we pinpoint eight more. Read our coverage, plus find out from Robert Powell what Social Security calculations are important for you to be making today and learn why paying points to buy down the interest rate on your mortgage turns out in almost every case to be a bad deal, on Thursday's Personal Finance pages.

With the long run-up in housing prices, you kind of expected that we were due for a fall. If only the same could be said about health-care costs.

Steve Kerch, assistant managing editor/personal finance

Tuesday, December 19, 2006

Tuesday's Personal Finance Stories -

The retail analysts who track sales this time of year say American consumers are hanging back on holiday shopping, waiting, perhaps, until they think merchandisers have slashed price tags as far as they are going to slash them ahead of Christmas. After banging down the store doors the day after Thanksgiving, consumers have played this buying season tepidly.

Maybe that's not because they are waiting for prices to fall. Maybe they aren't shopping in the stores at all, or shopping for "things" at all. It could just be they are online buying "experiences," anything from a behind-the-scenes tour at a local zoo to a test drive in one of Nascar's speediest vehicles.

These sorts of gifts touch on a growing trend among aging boomers and 20-somethings alike to add more meaning not just to the holidays but to life. Experience gifts can bring culture, spirituality, health and adventure into the seasonal mix. And they come with an added advantage for last-minute givers: They need no box or wrapping.

Then again, maybe the selling season is falling flat for another reason entirely. Maybe, as Paul B. Farrell postulates, people are fed up with the dark spirit of commercialism that has overrun Christmas. Maybe they aren't waiting for sales, but for salvation.

Steve Kerch, assistant managing editor/personal finance

Monday, December 18, 2006

Tips on Giving Gifts of Money to Children

Source:, Jeff Brown, Dec. 10, 2006

With the holidays upon us, lots of financial gifts - money, savings bonds, stocks and so on - will be ending up in little hands. And lots of givers have some sort of personal-finance goal on top of ordinary giving.

So I have a suggestion or two.

For starters, it isn't necessary for every financial gift to contain a life lesson. If the idea is to give a young person money in lieu of an iPod or scarf, just give it - no strings attached.

I've seen all kinds of tips from experts about how every dollar a child gets should be divided among spending money, college savings and charity. The idea leaves me cold. If you gave a $50 badminton set, you wouldn't expect the net to be set aside for grad school.

On the other hand, many parents - and especially grandparents - want to make gifts whose primary purpose is financial training.

Read Jeff's complete article HERE.

6 Strategies to survive the real estate bust

Source: Fortune, Ellen Florian Kratz

Last year the question was whether the housing boom would slow down. Now it's how bad it will get.

Bret and Tricia Baird are all too aware of what they're getting into.

Friends and family have admonished them to rent when they move this month to Mesa, a suburb of Phoenix, for Bret's new position as product manager with Bard Peripheral Vascular, a medical-device manufacturer. In the past few months the Bairds have been researching local real estate online and haven't liked what they've seen.

With an inventory of more than 38,000 homes for sale, up 94 percent from this time last year, Phoenix is one of the shakiest markets in the country. Nevertheless, Bret and Tricia, both 35, have decided to make a leap of faith. Mesa is Tricia's hometown, and the couple, who have four young children, are planning to live there for a while. So they just put in an offer of $400,000 for a 2,700-square-foot, five-bedroom house right next door to her sister.

Read the complete story, HERE.