City Hall offers steady outlook for Charlotte during economic slump

From WBT NewsTalk Radio

The city budget looks like it’ll hold despite the current economic conditions, city officials said this week.

Even with projected losses from the Wachovia-Wells Fargo merger, local economists are telling City Hall businesses in Charlotte will end up with thousands of new jobs this year.

Finance Director Greg Gaskins said sales tax revenues look to be holding, as are property tax revenues.

“It may not be perfect, but I feel comfortable,” Gaskins told City Council Monday. “That is because of the strength we had and the growth prior to [the economic downturn].”

But Gaskins warned the City Council if economic conditions don’t improve, there will be a greater impact on city operations.

Starwood, Landquest plan to pump $100M into Triangle, Charlotte real estate markets

A newly formed joint venture aims to jolt the Triangle and Charlotte real estate markets with a $100 million infusion to spur residential and mixed-use land development.

Starwood Land Ventures of Bradenton, Fla., has partnered with Landquest Development of Raleigh to form LStar Land LLC. The partners’ strategy is to acquire finished home sites, purchase debt from lenders, forge equity partnerships and make loans to other local developers.

The deal is a sign that investors see opportunities in the regions’ weakened property markets as builders have slowed construction. A short supply of credit and a dearth of home buyers have combined to force some developers to delay or cancel projects or file for bankruptcy.

Mike Moser, East Region president of Starwood Land Ventures, says the partnership with Landquest is part of Starwood’s multimillion-dollar strategy to buy properties in areas of promising real estate growth.

Read entire article here…

Growing tech centers struggle with less funds

As classrooms fill and program waiting lists grow at Tennessee Technology Centers, campus directors across the state are paring their budgets for a second round of cuts.

The cuts, mandated earlier this month, come as the centers grow and state higher education officials brace for a potential third cut this fiscal year.

“When the economy is somewhat down and people are losing jobs, technical education is one of the first places they turn to,” said James King, vice chancellor for the Tennessee Board of Regents’ 27 technology centers. “They’re short-term programs without the fluff.”

Gov. Phil Bredesen said recently that state revenues could be at least $300 million below budget projections by the end of 2008.

Technology centers have had their budgets reduced by $2.9 million during this year’s cuts. The technology centers train a variety of skilled workers, from nurses and auto mechanics, machinists and welders, to computer operators and surgical technicians.

State officials ordered the second round of cuts, called an “appropriations reversion,” for state-funded colleges and universities early this month. The University of Tennessee lost $17 million in the second round of cuts, and the TBR cut $25 million from the budgets of its six universities, 13 community colleges, and technology centers.

King estimated that 29,000-30,000 students attend the centers and that enrollment is up 13 percent compared to last fall.

“Our classrooms are full to capacity,” said Jeff Davis, director of the TTC Knoxville campus.

There are 804 students at the Knoxville campus, most of them studying full time. Enrollment increased 15 percent over last fall, Davis said. Sixty-five percent of the Knoxville campus students are either career changers updating their skills or are retraining because of job loss or layoffs. The average age of TTC Knoxville students is 30.

Ninety-five percent of students are eligible for Tennessee Education Lottery Scholarship money that pays $2,000 a year, enough for a year’s tuition and books, which has also attributed to the centers’ growth. Davis indicated that programs like nursing, auto tech, machine technology and computer technology remain popular and that others, like welding, have gotten more interest this year.

“The waiting list was like a year and a half to get in here,” said Joshua Wilcox, a 19-year-old Blount County resident.

Read full KnoxNews article here…

Wells CEO seeks to reassure Wachovia workers

Wells Fargo & Co. is seeking to reassure Wachovia Corp. employees, indicating that massive layoffs are not a part of its acquisition plan.

“We know this has been a time of great uncertainty for Wachovia team members and many of its customers as their company has gone through a very painful and challenging time,” Wells Fargo Chief Executive John Stumpf said late Thursday. “We want to assure them we’ll do everything we can to make the integration of our operations as smooth as possible. An important measure of success for this integration will be our ability to retain as many of the talented Wachovia team members as possible.”

San Francisco-based Wells (NYSE:WFC) is generally expected to avoid layoffs, if possible, in the largest acquisition in the company’s 156-year history. Even in making last year’s in-market, Bay Area acquisition of Greater Bay Bancorp, Wells kept the vast majority of the acquired bank’s employees.

The acquisition by Wells was generally preferred by Wachovia employees as the West Coast powerhouse had less geographical overlap than rival bidder Citigroup Inc.

Shareholders also preferred Wells because its deal offered considerably more than the $2.16 billion proposal offered by New York-based Citigroup (NYSE:C). But the value of the all-stock buyout has dropped significantly as Wells — along with most other financial institutions — has taken a beating on Wall Street.

Wells’ deal for Wachovia was valued at $15.1 billion when the offer was announced Oct. 3. It is now worth about $11.4 billion, based on Wells’ closing price Thursday.

Federal regulators had attempted to broker a compromise between Citigroup, whose initial deal they supported, and Wells about dividing Wachovia. Citigroup gave up on those negotiations Thursday afternoon, clearing the way for Wells to buy Wachovia.

In a statement released Thursday night, the Federal Reserve acknowledged the “considerable efforts” of both banks in the negotiations. It said that with Citigroup’s decision to abandon its efforts to block the deal, the Federal Reserve “will immediately begin consideration of the filings submitted by Wells Fargo for approval to acquire Wachovia.”

There still could be some trouble ahead, according to Morningstar Inc. analyst Jamie Peters, who follows Wachovia (NYSE:WB). In a note issued Thursday night, she says Wells “has a lot more to worry about than it did when the deal was announced last Friday.”

The biggest problem, she says, could be in the capital markets. As it proposed the buyout, Wells planned to raise as much as $20 billion in fresh capital. But that could prove difficult.

“Bank of America struggled earlier this week to raise $10 billion of capital — and ended up selling at a steep discount to its preannouncement price,” Peters wrote. “This might give Wells pause and, in our opinion, might possibly cause the company to find a way to reconsider the deal price or the deal altogether.”

Wells did not indicate any reconsideration of the deal price late Thursday, when it announced it was prepared to go ahead with the purchase.

Read full Charlotte Business Journal article here …

Citi drops out; Wells wins battle for Wachovia

Wells Fargo & Co. has won the battle for Wachovia Corp.

Citigroup Inc. has withdrawn from negotiations brokered by federal regulators that sought a compromise to the competing bids from Wells and Citigroup. Wachovia’s brokerage business is in St. Louis and employs 4,800 people.

The issue is likely to go to court. But New York-based Citigroup (NYSE:C) says it will no longer seek to block Wells’ proposed $15.1 billion purchase of Wachovia.

Wells Fargo Chairman Dick Kovacevich welcomed the announcement and said Wells would go ahead with the proposed, all-stock purchase of Wachovia. He said he was pleased that Citigroup will not seek to stop the merger.

“We believe that is the correct and right decision for our country and our citizens and the health of our already stressed financial system, as well as our and Wachovia’s respective shareholders and stakeholders,” Kovacevich said in a prepared statement.

He did not address the pending action for damages. But he did address, at least indirectly, press reports Thursday indicating that Wells and Citigroup had both found more problems in Wachovia’s mortgage portfolio than expected.

“Credit teams at Wells Fargo have had an opportunity to work with their counterparts at Wachovia,” Kovacevich said. “Given our broad-based operating expertise, and specific understanding of these individual businesses we believe we have adequately evaluated the risks inherent in the portfolios as of the time of this merger agreement.”

The combined company will have $1.42 trillion in assets, $787 billion in deposits, 48 million customers, $258 billion assets under management in mutual funds, 10,761 stores, 12,227 ATMs and 280,000 employees.

Citigroup still plans to seek damages for Wachovia’s decision to choose San Francisco-based Wells (NYSE: WFC) over an earlier agreement it had made to sell its banking operations to Citigroup for $2.1 billion.

“We did not seek the Wachovia transaction; Wachovia brought it to us,” Citigroup Chief Executive Vikram Pandit says in a prepared statement. “Our focus remains on capitalizing on our global strengths. We will continue to apply the same discipline we employed in this and other recent transactions to future acquisition opportunities.”

In a statement Thursday evening, Charlotte, N.C.-based Wachovia (NYSE:WB) said: “We look forward to completing our merger with Wells Fargo, which we have always believed is in the best interest of shareholders, employees, creditors and retirees as well as the American taxpayers, and it imposes no risk to the FDIC fund. Our board made the right fiduciary decision for all of our constituents, and we look forward to consummating our merger with Wells Fargo.”

Read full Charlotte Business Journal article here…

Brunswick cuts 1,400 jobs; shuts 4 more plants

CHICAGO – Beleaguered boatmaker Brunswick Corp. said Thursday it will cut 1,400 more jobs as the company shuts four plants and furloughs workers at three more.

The announcement, which sent the manufacturer’s stock to a more than 15-year low – comes four months after the suburban Chicago company said it would eliminate 1,000 jobs because of the falling demand for recreational boats amid a poor economic environment. On Thursday, Brunswick executives said worsening financial conditions, including rising oil prices and frozen credit markets, were behind the latest round of cuts.

“We are living and working in the most turbulent economic times in recent history,” Brunswick Chairman and Chief Executive Officer Dustan E. McCoy said in a statement. “The poor economy and the accompanying weak consumer sentiment have pressured marine markets, eroding the demand for boats and engines these past few months at a swifter pace than originally anticipated.”

Read full Fortune article here….

NAA: Newspaper Ad Revenue Expected to Drop More than 11% in 2008

By Jennifer Saba

Published: October 02, 2008 12:35 PM ET NEW YORK

Total advertising revenue for the newspaper industry is expected to decline 11.5% to $40.1 billion this year, according to the Newspaper Association of America.

The organization forecast that by 2009, ad revenue declines would not be as steep — total ad revenue is expected to drop 5.5% to $37.9 billion that year.

The loss of dollars in 2008, which if the NAA proves to be correct will be the largest decline the industry has seen since the association started tracking results 58 years ago, is due to plunges in print advertising. The forecast is in the September issue of Press Time.

Read Editor & Publisher full article here…

The #1 Cause of Nurse Faculty Shortage?

Posted on: Wednesday, 1 October 2008, 03:00 CDT
By Fitzpatrick, Joyce J

WE ARE ALL AWARE OF THE NURSE FACULTY SHORTAGE, evidenced by the long waiting lists of qualified students for our programs and the fatigue we feel at the end of a long day of teaching. Although it may not be polite or politically correct to talk about money, we must break this unwritten rule. We must do something about the root cause of the nurse faculty shortage. Of course, there are perks to the academic role, but the discrepancies in pay compared to nurses in other positions will continue to be a deterrent to both recruitment and retention of nurse faculty. The data indicate that staff nurse salaries are higher than those of assistant professors, and that the salary for an independently employed nurse practitioner is 150 percent greater than that of a full professor in nursing (1). The NLN/Carnegie National Survey indicated that nurse practitioners with master’s preparation earned approximately 12 percent more than master’s-prepared faculty members in nursing (2).

There is too much wrong with this financial picture. We live in a knowledge-based economy. Thus, it should follow that those persons responsible for imparting knowledge – faculty should be paid the highest salaries. This is definitely not the case in nursing.

Read full Red Orbit article here…

East Tennessee loses 300 jobs

A slumping economy and changes in government programs have forced six East Tennessee companies to cut more than 300 jobs, according to notices filed with the Tennessee Department of Labor and Workforce Development.

New York-based Gentiva Health Services said it may have to lay off up to 88 nurses and home health aides in Knoxville, Kingsport and Chattanooga because of cuts in home health services to TennCare recipients.

Gentiva spokesman David Fluhrer said, however, it is unlikely that the number of employees affected will be that high.

“The sharply reduced hours don’t meet our clinical standards and don’t allow us to care for patients safely and appropriately,” Fluhrer said.

In extreme cases, some patients who receive 24-hour care could see their services cut to five hours, he said.

There are 46 Gentiva patients affected in Knoxville, Kingsport and Chattanooga. Of those, nine are in Knoxville and about half have already been transferred to nursing homes and other home health agencies, with families trying to make up the difference or patients moving in with family entirely.

Read all Knoxville News Sentinel article here…