Business Briefings - August
Here you will find the complete Business Report that appears in the August 2008 issue of In Business as well as many additional entries that did not appear in the magazine.
Exclusively online...
Movers and Shakers
Mary Jayne Burke, Mortgage Advisor, Park Bank-Fitchburg.
Paul Hampton, Economic Analyst-Planning/Community Dev't, Vierbicher Associates.
Land's End president David McCreight, who has headed the Dodgeville company since 2005, is leaving to become president of Under Armour, a sports apparel company, in September.
Around the State
Milton's United Ethanol could face fines of between $10,000 and $25,000 per day from the Wisconsin Dept. of Justice if it does not fix violations found by the DNR. In a 60-page report, the DNR cited the ethanol plant for violating 178 of 371 items in the plantÕs permit through February, such as not installing pollution controls prior to operation, and not installing all the process equipment stated in the permit of application. The company maintains it is and has been working hard to correct the problems, and that some of the claims refer to issues that have already been handled. As stipulated in the federal Clean Air Act, the DNR has 60 days to issue a notice of violation and 270 days to bring the plant back to compliance. If those deadlines are not met, the matter would be sent to the Department of Justice, and fines would be instituted.
The state's new Department of Children & Families has developed a website for parents who want to know about Wisconsin's daycare facilities, including any enforcement actions taken or violations that might have occurred over the past two years. See http://dcf.wisconsin.gov/childcare/licensed/search.htm.
GreenLeafMarket.com is a website aimed at linking area farmers with grocers and restaurateurs looking for locally-grown food at wholesale prices. Training sessions on the site will be conducted this summer for farmers, processors and buyers.
Company News
Starion Financial has moved from the Prairie Trails Office Building on Heartland Trail to a new building at 1651 John Q. Hammons Drive.
A new monastery will rise from the ashes for the Benedictine Women of Madison, located in Middleton. Holy Wisdom Monastery, a former high school which served as offices, dormitories and meeting space for the Sisters, has been demolished and plans for a new, LEED certified, sustainable 2-story facility are underway with Vertegy, a St. Louis-based design and consulting firm. Hoffman LLC is the project manager.
Middleton's Killian Dental Clinic has just completed a 5,000 sq. ft. expansion, including a 2,500 sq. ft. expansion of Oral Arts Dental Studio, Killian's in-house dental laboratory.
Around the Area
In response to a history of budget cuts, a consortium of six area school districts are looking to create a new school called The Global Academy. The six districts — Belleville, Cross Plains, McFarland, Middleton, Mount Horeb and Verona — want the school to focus on specialized skills for high school juniors and seniors. Of the programs they're considering: architecture and construction; health science, IT, and science, technology, engineering and mathematics. The school would be located in Verona and would like to be open in 2010. The consortium is also hoping to work in conjunction with MATC to explore goals and opportunities.
The Dane County Urban League will receive a grant from the Great Lakes Higher Education Guaranty Corporation toward the League's "21st Century Careers Program." The year-long will help over 200 middle school kids from Madison and Sun Prairie explore college and career choices. Aimed at serving children of color and disadvantaged youth, students will receive tutoring, financial literacy education, explore careers and gain an understanding of the critical link between success in school, and success in life. The League aims to close the achievement gap and connect education and career aspirations for sixth through eighth grade students.
Dane County Executive Kathleen Falk announced a free seminar series aimed at assisting women and minorities interested in either starting new businesses or improving their current businesses. The meetings will provide networking, education, and an opportunity for participants to share ideas and information. Those interested should call (608)266-3022.
The old Chi-Chi's site on Grand Canyon Drive on Madison's west side will be leveled and redeveloped into a $7.5 million, mix of retail and office space.
Take Care Health Systems, a subsidiary of Walgreen Co. is now operating in Madison. Take Care operates walk-in clinics in Walgreen stores that are staffed by licensed nurse practitioners who can write prescriptions for common ailments such as strep throat, ear and sinus infections or pink eye. They will also administer flu shots. Madison's first clinic is located in the Fish Hatchery Walgreens location.
MATC announced a new education certificate to coincide with the aging boomer population. The "Senior Activity Director" certification offers students skills in public relations, sports instruction, recreation administration, group fitness training and travel planning for seniors, one of the fastest growing demographics in the country.
Signs of the Times
Wisconsin residents pay $1.40 more per 100 pounds of milk than do people in other states. Meanwhile, corn prices have nearly doubled since last year, both here and nationwide.
The Milwaukee Journal-Sentinel is cutting ten percent of its workforce through buyouts, layoffs and attrition by the end of year. In recent months, the company has seen a steady decline in advertising revenue as well as rising costs. The Journal/Sentinel employs 1,300 full-time employees.
A recent consumer survey administered by Morgan Stanley & Co. indicates that belt-tightening consumers are cutting back on beverage and snack purchases as well. The survey of 1,550 13 to 65 year olds representative of the U.S. population, showed a pullback in a number of areas: 60% of those surveyed say they have less money today. Among them: 17% are consuming less soft drinks overall, 66% are dining out less frequently, and 30% are consuming more tap water when they're out, as opposed to purchasing bottled beverages. And 30% of consumers say tap water is taking the place of bottled beverages at home.
Around the State
The U.S. Dept. of Energy will award a grant of up to $30 million to the Flambeau River Paper Mill in Park Falls, Wisconsin to kick-start a new biofuels plant. The proposed $84 million plant will produce sulfur-free diesel and provide a trillion BTU's of heat to the adjacent paper mill by burning forest and agricultural byproducts. It will be the first paper mill to be powered in such a manner. The biofuels plant should open in 2010.
Around the Nation
The Feds increased mileage rates by eight cents in response to higher gasoline costs, meaning business people who claim business miles on their annual tax returns will be able to claim 58.5 cents per mile as of July 1.
Despite the economy, several industries are predicted to do well, according to the Herman Trend Alert. Nationally, car dealerships selling fuel-efficient cars report small car sales are up; railroads are reporting increased traffic because many people are avoiding airline travel; and sporting goods stores are thriving due to the sales of bicycles and related accessories. Even domestic cheese producers are booming thanks to increased prices on imported products.
National retailer Steve & Barry's has filed for bankruptcy. There are nine stores in Wisconsin, including three in Madison.
What's Brewing
MillerCoors announced it's new headquarters will be located in Chicago, and a reported $23 million in incentives from Chicago and state of Illinois probably helped. Nearly 175 employees at the Miller Brewing headquarters in Milwaukee as well as employees at Coors headquarters in Golden, Col. will be asked to relocate to the windy city as a result. Additional job cuts are expected as the company eliminates duplicate positions between Miller and Coors operations. MillerCoors also said it would be investing $50 million into the Milwaukee plant to allow for expanded production capacity. The Milwaukee headquarters will become the eastern division office for the newly-combined brewing company. The Coors production facility in Golden, Col. will also be upgraded and will continue its operations.
In an about-face after Belgian brewer InBev filed suit to unseat a reluctant Anheuser-Bush Corp. (A-B) board of directors, the board agreed to accept InBev's offer to purchase the American brewer for $49.9 billion. The St. Louis-based beer company had fought the buyout for over a month. The move will make the new company, Anheuser-Busch InBev, the largest brewer in the world. The final deal could still fall through if A-B's Mexican business partner, Grupo Modelo (Mexico's largest brewer), objects to the idea of InBev becoming a minority partner in its operation.
KUDOS!
Raj Sheth, President & CEO of Mead & Hunt received the 2008 Edmund Freidman Professional Recognition Award from the American society of Civil Engineers Committee on Leadership and Management, recognizing significant contributions made to the engineering profession.
Platypus Technologies won 1st Place in the Life Sciences category of the 2008 Wisconsin Governor's Business Plan Contest. The winning business plan detailed the company's hand-held nitric oxide monitor designed to help asthmatics breathe better.
Cellular Dynamics, the Madison biotech firm founded by Dr. James Thomson, was named one of the top 15 biotechnology companies in the nation, according to FierceBiotech, an online news resource for the biotech industry.
In the magazine...
Signs of the times
Synergy Web Graphics of Mazomanie, will be sold or closed by September, leaving 130 employees out of work. In 2007, Synergy took over the former Sunny Industries after it went belly-up, leaving 400 workers without jobs.
GM's continued job cuts, coupled with a new focus away from trucks and SUV's, means the Janesville GM plant could be shut down earlier than 2010. The automaker also said it will also suspend common stock dividends, suspend raises and cash bonuses, and in 2009, will eliminate health care coverage for salaried retirees over the age of 65.
GE Healthcare announced the release of between 35-40 employees in Madison due to to a slow healthcare market.
Wisconsin home foreclosures rose 23% in June, while the number of foreclosure filings increased 36% for the first six months of 2008. The state ranks 23rd in national foreclosure ratings, according to RealtyTrac.
Dane County's existing homes sales declined 21% in May compared to last year, but the median sale price of a home increased by a percentage point to $208,250.
Alliant Energy will take a hit due to the June floods. The company, which has temporarily lost the services of two of its generating stations in Cedar Rapids as a result, said it expects earnings will drop 20 cents per share.
Northern Bay LLC, parent of Northern Bay Golf Resort & Marina on Castle Rock Lake in Adams County filed for Chapter 11 bankruptcy protection. The filing is not expected to impact daily operations of the resort.
Ball Corp., a metal can manufacturer, announced it will layoff 37 of its nearly 115 employees at the DeForest plant by September 1 due to falling business.
Starbucks announced it will close the Madison store at 2825 University Avenue, one of six slated to close in the state. In the next year, 600 Starbucks stores are projected to close, affecting about 12,000 workers nationwide.
Bergstrom Automotive of Neenah, which owns an auto dealership in Madison, announced it will downsize some of its Hummer dealerships to focus more on GM certified-pre-owned vehicles. The company will also open a Madison Smart Car dealership.
New York-based Six Flag's stock prices have declined 90% since July 2007 due in part to lower attendance at its theme parks.
Economic woes are hitting an American institution once thought to be recession proof. Las Vegas! Between reductions in airline service, fewer visitors (i.e. fewer gamblers and shoppers), and debts mounting from earlier expansion plans and buyouts, casinos are struggling. Reports say some companies may even be headed for default or bankruptcy.
banks
Associated Banc-Corp of Green Bay, parent of Associated Bank, reported reduced income in second quarter compared to a year ago. Blaming six problem loans (five related to construction), the bank's second quarter revenue was clocked at $47.4 million, down from $75.8 million in the same period last year.
Milwaukee-based M & I Bank posted a $393.8 million second quarter net loss due primarily to the falling housing market. Analysts lowered earning estimates for
M & I as a result.
AnchorBank, the third largest bank in Wisconsin, lowered its quarterly dividend to 10 cents, down from 18 cents, in an effort to keep cash on hand.
U.S. Bancorp reported an 18 percent loss in second quarter. However, the Minneapolis-based bank said revenue increased 7.5% in that same time period, compared to last year.
company news
McFarland's Brandboxx Display Graphics has been purchased by Park Printing House and has moved its operations to Park Printing's Verona location.
MCD-386, Mithridion's first drug candidate, is undergoing Phase I Clinical Trials. The compound is believed to slow the progression of Alzheimer's disease.
BT Squared Inc. has opened an office in Lake Delton at 421 Wisconsin Dells Pkwy.
Meriter Health Services announced plans to build and lease a $20 million, 110,000 sq. ft. 4-story building
in Novation Campus for 250 non-clinical, administrative staff whom will relocate from various in-town Meriter locations. Moving the IS, finance, marketing and planning departments to the new location will free up space at the downtown hospital for other strategic expansions. The move is expected to occur in late 2009.
Middleton-based American Girl announced the opening of a new American Girl store at Minnesota's Mall of America in November, adding to stores in New York, Los Angeles, Dallas and Atlanta.
The doll company saw a 10% increase in sales in second quarter due in large part to the release of the movie "Kit Kittredge" and its ancillary products.
Software company Ipswitch of Lexington, MA plans to hire five positions this year and more next year at its new location on Deming Way in the Sauk Trails Business Park. The company recently doubled its office space when it moved from Yellowstone Drive in Madison.
The Alliant Energy Foundation has announced an effort to help nonprofits directly affected by last month's floods. The Rebuilding Our Communities Grant Program will allow non profits to apply for grants of up to $20,000 for operating and other expenses incurred as a direct result of the rains.
Dean Health Plan has opened its new $2 million, 10,000 sq. ft. call center on Deming Way in Middleton.
Roche, the pharmaceutical giant that recently purchased Madison-based NimbleGen for $272.5 million, has announced it will also purchase Madison biotech Mirus Bio Corporation for $125 million. The Mirus lab is expected to remain in Madison.
PDQ Food Stores, Inc. will relocate its new headquarters to 7601 Discovery Drive this fall.
Madison-based Invitrogen Corp. will purchase Applied Biosystems Group for $6.4 billion.
Pacific Cycle of Madison has purchased PTI Sports for $28.1 million. PTI manufactures bicycle accessories and helmets, and also licenses familiar brand names such as Schwinn and Disney.
University Bookstore just opened a new 3,000 sq. ft. store in the Janesville Mall.
TomoTherapy, Inc. will acquire the sales and service portions of Hi-Art Co., Ltd., which distributes Tomo's main product (of the same name) in Japan. The acquisition is expected to be completed later this year.
Madison-based ACS, Inc. has been awarded a two-year contract to build 12 diesel engine test cells for Perkins Engines Company in Peterborough, England. The project will move several ACS engineers to England temporarily to work on the project, which is expected to be completed in
2010.
CDW announced the purchase of 12 million kilowatt-hours of renewable energy from MGE which will be used to entirely power two Madison Hosting centers totalling 10,500 sq. ft.
A group of lenders has blocked Spectrum Brands' sale of United Pet Group, its pet division. The Atlanta-based company said it will continue to look for other ways to reduce its debt.
Verona-based EPIC Systems Corp. announced it will no longer do business with companies supporting the Wisconsin Manufacturers & Commerce (WMC). The announcement came in response to nearly $1.8 million spent by WMC to elect Michael Gableman to the Wisconsin State Supreme Court in April. Gableman narrowly beat incumbent Justice Louis Butler for the court seat.
Following EPIC's announcement, J.P. Cullen & Sons, the contractor for EPIC's $200 million expansion, cancelled its WMC membership and CEO David Cullen resigned from the WMC Board of Directors.
around the area
The National Kidney Foundation announced that Madison has been selected to host the 2010 U.S. Transplant Games, a national athletic event for individuals who have received a life-sustaining organ transplant. About 7,000 visitors are expected to attend, with more than 1,500 athletes competing in 14 athletic competitions.
In addition to opening and closing ceremonies, the event will include a professional conference for healthcare professionals and other donor and family-related activities.
A 128-room, five-story Hilton Garden Inn has been proposed on John Nolen Drive. If approved, construction on the $15 million hotel could start in Fall.
Middleton's City Council passed an
all-indoor public smoking ban on a 6-2 vote. The ban will go into effect on March 15, 2009, and will include all businesses, workplaces, public buildings and taverns.
Seven downtown liquor stores and a local grocery store have partnered with the University of Wisconsin in a high-tech effort to curb underage drinking. An electronic scanner program will be used at these locations which will verify age and be able to spot fake IDÕs being used to purchase liquor.
By agreeing to participate in the program, the stores will receive the $1000 scanning device free of charge. Similar scanning programs have been in the works at both UW student unions since last year.
The program is jointly funded by the UW Police Departments and the Office of the Chancellor.
The Milwaukee law firm of Beck, Chaet, Bamberger & Polsky has been told to take receivership and sell a 50-unit affordable condo project on Lake Point Drive in Madison. Circuit Judge Sarah O'Brien appointed the law firm on recommendation of the Community Development Authority.
Demolition began in July on a group of apartment buildings in the Allied Drive neighborhood, making way for 48 low income rentals, a new Boys & Girls Club of Dane County, and new roads.
The project, which was approved by the Madison City Council in early July, included a full rezoning of city-owned properties in the area and may total up to $25 million.
Common Wealth Development has proposed the creation of a public market in the Brayton Parking Lot at 1 S. Butler in downtown Madison.
It has asked the city to put up $500,000 to purchase the land, and additional support from the Community Development Block Grant Commission. Supporters believe the project could create as many as 300 jobs.
Around the state
British Columbia manufacturer, Nature's Path Foods Inc. announced it will open an organic breakfast cereals plant in Sussex, Wis. next March that is expected to create 160 jobs. The company will produce granola bars, cereals and other breakfast items at the location.
Governor Doyle announced that the state has purchased over 92,000 hours of renewable electrical energy in one of the largest government purchases of renewable energy in the country.
The amount of energy purchased will provide enough power to light over 9,000 Wisconsin homes, and will come from wind, solar, hydro and landfill gas sources throughout the State.
In an effort to capture a growing European market, Milwaukee-based Harley-Davidson Corporation (H-D) has agreed to purchase Italian motorcycle manufacturer, MV Agusta Group for $109 million. Retail sales of H-D motorcycles has experienced double-digit sales in Europe over the past three years.
On the U.S. front, meanwhile, the company's second quarter profits fell 23% due to a lower demand for motorcycles.
A report from the Wisconsin Taxpayer's Alliance claims Wisconsin homeowners pay the ninth highest property taxes in the nation. In 2006, state residents paid 4.4% of their personal income toward property taxes in 2006, compared to the national average of 3.5%.
A researcher at the University of Wisconsin-Milwaukee has developed a drug to battle alcoholism and possibly other addictive behaviors. The treatment blocks the euphoric effects of alcohol without causing sides effects such as anxiety or sedation. UW-M has licensed the treatment to a local pharmaceutical company which will advance it through the federal approval process.
The city of Milwaukee may soon institute a $20 wheel tax. If passed, the proposal would apply to 330,000 cars and light trucks kept in the city, raising $6.6 million annually for street improvements.
Packers' Chemical Inc. announced it will move its manufacturing plant from Missouri to Kieler, in Grant County,
creating 27 new jobs at the site.
airlines
Wisconsin-based Midwest Airlines is cutting service and 1,200 jobs, including many pilots and flight attendants. Also, in addition to ending daily nonstop service between Madison and Kansas City and cutting back one daily flight from Madison to Milwaukee, the airline has discontinued all service to San Diego, Fort Lauderdale, and Fort Meyers. Nonstops to Los Angeles, San Franciso and Seattle are also casualties. Midwest Express Service will end to Baltimore, Hartford, Louisville, Raleigh/Durham and St. Louis. Midwest's CEO will also take a 40% cut in salary, and Sr. Vice Presidents will take 25% reductions in pay as part of ongoing restructuring plans.
Northwest Airlines, which owns a 47% share of Midwest, responded by adding daily nonstop service between Milwaukee and L.A.
US Airways posted a second quarter loss of $567 million, though revenue was up three percent.
Atlanta-based Delta airlines posted a $1 billion loss in second quarter. The company is merging with Northwest Airlines Corp. in a $17.7 billion stock-swap transaction.
AirTran Airlines, which services Milwaukee's airport, announced it will cut 180 pilots and 300 flight attendants through voluntary leave and furloughs, saving about $16 million in annual costs.
in the courts
Two California consumer groups are again appealing the U.S. Patent and Trademark Office to overturn a key stem cell patent granted to WARF. The groups claim Dr. James Thomson's discovery was "obvious" and that WARF's control of the patent hinders stem-cell research.
The Supreme Court ruled in favor of Walgreen Co. and against the City of Madison, the Madison School District and other tax districts in a suit filed by the pharmacy retailer over what it considered an overcharge of $150,000 in taxes for two locations on East Washington Avenue. The city will now have to reimburse Walgreen Co. the tax difference from 2003 through 2008.
Kohl's Corporation is reportedly facing lawsuits from clothing manufacturers over markdown reductions. Fu Da Inter-national Ltd. is the most recent to file a suit claiming Kohl's held back payments for merchandise and stopped ordering product from the company because it had complained. The suit alleges that Kohl's, because of its size, coerces vendors into not challenging its practices, and has a habit of over-ordering with the full intent of either marking down or returning merchandise that does not sell. London Fog had already filed a similar suit against the retailer.
international
England's Prince Charles has converted his Aston Martin DB6 vehicle into a vintage car, quite literally. The 38-year old car now runs on 100% bioethanol fuel distilled from surplus British wine! The Prince only drives the car a few hundred miles each year. IB wonders ... is this considered drinking and driving?
opening soon!
Costco in Middleton, has its official opening on August 20. The 153,000 sq. ft. store will employ 200.
Farm & Fleet's 114,500 sq. ft. Verona store is scheduled to open August 14. About 145 jobs are being filled.
goodbye
The Angelic Brewing Co. in downtown Madison shut its doors in July.
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