Actual finance blog

The Ferrero family’s round Rocher chocolates are recognized worldwide but Italy’s richest man, Michele Ferrero, and his two sons, have shunned publicity and kept their company very private — up until now.

Ferrero, and its home base in this northwestern Italian town, is in the spotlight after it said it was considering a multi-billion euro bid for Cadbury, the world’s second-largest confectionery company.

In more than 60 years of history Ferrero has not made a single acquisition as it built up a confectionery empire it says ranks fourth in the world.

Michele Ferrero, 84, who took the reins in 1957, lives in Monte Carlo and has a villa in exclusive Cap Ferrat. Forbes magazine this month estimated his and his family’s wealth at $9.5 billion, putting them at 40th place among the world’s richest people.

Michele Ferrero’s two sons, Pietro and Giovanni, are chief executives and run day-to-day operations.

Ferrero has kept to a philosophy of “better to speak through the products than show in public,” according to a source close to the company. It has stuck to that policy with its workers as well.

“The company doesn’t tell us anything, total reserve reigns. Up until a few years ago, there wasn’t even a sign saying Ferrero on the Alba factory,” said one employee in the factory car park emergency cash loans.

The company sits at the heart of Alba, employing more than 4,000 people. Michele Ferrero still regularly visits the original factory there.

Ferrero remains a key presence for Alba, a town of some 30,000 residents in Piedmont, one of Italy’s richest gastronomic regions.

COMPANY TOWN

“In every family of Alba, there has been or still is someone working for the group,” Mayor Maurizio Marello said.

“This potential acquisition … is a sign of the group’s state of health … it is obviously an advantage for us,” he added.

Globally, Ferrero employs some 21,600 with 18 factories and operations in more than 36 countries.

Ferrero also makes Nutella hazelnut spread, Kinder chocolate eggs for children and Tic-Tac mints.

It prides itself on doing its own research — not just into products but also packaging, which lengthens the shelf-life of products and protects against temperature changes. The protection helps make its goods regular items in small grocery stores worldwide. 

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More than 90 percent of St. Louis area businesses plan to either hire new workers or maintain current employment levels during the next 12 months.

At the same time, there is genuine concern among employers that a shortage of skilled workers and training programs may hamper hiring across the region as St. Louis emerges from the recession.

The findings are contained in the "State of St. Louis Workforce Report," a survey of 1,537 employers and 447 dislocated workers that state and local officials say provides a much-needed glimpse at regional, postrecession employment.

"This is the tip of the iceberg; it gives us a beginning picture of what we need to look for," said Michael Holmes, executive director of the St. Louis Agency on Training and Employment.

Much of the data he relies on, Holmes said, predate the recession.

The survey’s researchers determined that employers used several alternatives to layoffs to weather the downturn, including reducing the hours of existing employees, freezing payroll, payroll reductions and suspension of subsidies for retirement benefits.

Meanwhile, of the employers surveyed, 23 percent said they would increase employment over the next year. Sixty-eight percent plan to maintain current payroll levels and 9 percent expect to decrease their work force.

Holmes, along with representatives of the St. Louis County Career Center and St. Louis Community College will officially release the report Thursday.

In it, 30 percent of the area’s employers blame the economy for reductions in payroll.

But 23 percent of employers cited a lack of skilled workers and inadequate training programs as a "barrier" to new hiring. And that has grabbed the attention of officials.

"It’s important to remember that the skill gaps that existed before the downturn continue," said Roderick Nunn, vice chancellor for work force development at St. Louis Community College.

To improve opportunities for finding new and better jobs, the report says the growth industries in the next year will be educational services, health care, retail and manufacturing. That, the report says, is where job-hunters need to get training immediate payday loans online.

"The key challenge is recalibrating business and education and supply and demand for what employers need in very specific terms," said Dick Fleming, president and CEO of the St. Louis Regional Chamber and Growth Association.

Gene Gorden, executive director of the St. Louis County Workforce Development Career Centers, also stressed the importance of training in clean energy, information technology and biotechnology.

"The training institutions have to be in tune and listening to those businesses," Gorden said.

Another question that needs to be addressed, said Holmes, is determining whether the responsibility for retraining lies with the public sector, the private sector or a combination.

On the flip side, the survey looks at some of the obstacles that prevent displaced workers from learning new job skills.

Chief among those are time and money: Unemployed workers need to find jobs now to support their families, rather than invest time in retraining. And even if they could afford the time, they might not have the money.

Programs that prepare workers for a transition into expanding health care fields, the report pointed out, are examples of training regimens demanding commitments of extended time and money.

The survey’s interviews with unemployed workers at career centers on both the Missouri and Illinois sides of the Mississippi River revealed a detailed portrait of the 128,000 area residents the Bureau of Labor Statistics estimates were out of a job in May. (June statistics will be released on Wednesday.)

The report found 53 percent of the region’s jobless are male and 47 percent female.

Nearly half, 48 percent, said they had been out of work for more than six months.

A third have a high school diploma and another 25 percent had completed some college.

Fleming noted that no economic sector has evaded damage during the downturn.

Therein, he said, lies the report’s real value.

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Chrysler Canada Inc. has cancelled plans to end the third shift at its minivan plant in Windsor, a decision that will save more than 1,200 jobs, CAW president Ken Lewenza said yesterday.

After months of bad news for the Canadian auto industry, Lewenza said the announcement was a good-news story for the hard-hit industrial border city in southwestern Ontario.

"Today we’re celebrating," Lewenza said.

Windsor has been battered by the auto sector’s restructuring, losing thousands of jobs from earlier streamlining at Chrysler, Ford of Canada and General Motors of Canada. Next year, GM plans to shut down a Windsor-based transmission plant, cutting another 1,400 jobs.

Lewenza said the decision has been under review for some time and he called the move a good sign for Chrysler, which hopes to grow through an alliance with Italian carmaker Fiat SpA after emerging from bankruptcy protection.

"They’re optimistic the minivan will be able to maintain its market share and be able to maintain three shifts for the next model year, which is absolutely great news for our members and their families."

Yesterday’s announcement came as Statistics Canada reported that 7,400 net jobs were lost in Canada in June as gains in part-time jobs and self employment offset losses in full-time jobs cheap business cards.

In Ontario, full-time losses in June hit 56,000, offset by 57,000 in part-time gains, while the unemployment rate edged up to 9.6 per cent, the highest rate in 15 years, Statistics Canada said.

At Chrysler, about 2,000 workers on the day and afternoon shifts at the minivan plant returned to work last week after being off the job for two months during the car maker’s bankruptcy proceedings in the U.S.

The minivan plant, one of Chrysler’s most efficient and profitable operations, is shut down for the summer vacation period for the next two weeks. The plant’s third shift is expected back at work on July 27.

Chrysler had announced in March that it would end the third shift at the plant which produces the Dodge Grand Caravan and Chrysler Town & Country minivans.

The Windsor factory is Chrysler’s only supplier of minivans, since the automaker shut down production of the vehicles at two U.S. plants.

Lewenza noted the minivan has remained a winner for Chrysler.

"Outside of all of the bad news, the minivan has been a success story by itself because of its popularity with consumers," he said.

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Mexico’s central bank cut its benchmark interest rate for a sixth consecutive month in a bid to bolster the country’s flagging economy, and said it would soon stop lowering borrowing costs.

The bank’s five-member board, led by Governor Guillermo Ortiz, lowered the key lending rate a half percentage point to 4.75 percent. The decision matched the forecasts of 22 of 26 economists surveyed by Bloomberg. Three analysts expected a quarter-point cut and one predicted a 0.75-point reduction.

The board “considers that its easing cycle is close to ending,” the bank said in a statement. “Future actions that might be taken will possibly be of smaller magnitude and consistent with both the evolution of the economy and the performance of inflation.”

The economic contraction has been “severe” in the first half of the year, and is a greater risk than inflation, the bank said. The comments signal that it will probably cut a quarter point next month and then keep the rate unchanged for the rest of the year, said Gabriel Casillas, chief economist for Mexico and Chile at UBS AG.

Latin America’s second-biggest economy shrank the most in 14 years in the first quarter and industrial output has declined for the last nine months.

‘Downbeat’

“The statement was downbeat about the prospects for Mexican growth,” Rafael de la Fuente, chief Latin American economist at BNP Paribas, said in a report. “The central bank’s assessment of the external greenshoots is also mixed and less upbeat than what we have seen from other central banks.”

Mexico’s peso gained 0.3 percent to 13.3548 per U.S. dollar as of 12:53 p.m. New York time from 13.3904 yesterday, according to data compiled by Bloomberg.

Barclays Capital changed its rate outlook today, interpreting the bank’s statement as “somewhat hawkish.” The bank will cut borrowing costs by a quarter percentage point next month and likely leave rates unchanged in subsequent months, according to the forecast low fee payday loans. Barclays had expected the bank to cut by a half point in July and a quarter point in August.

Gross domestic product shrank the most since the 1995 Tequila Crisis in the first quarter, output has tumbled every month since July, including a 13.2 percent plunge in April, and sales of goods abroad have fallen by more than a third in the last year.

Swine Flu

The swine flu outbreak in April and May also battered the economy as the government shut schools, restaurants and theaters and foreign tourism revenue plunged. The flu may reduce GDP by 0.5 percent this year, Ortiz said last month.

“The contraction of economic activity in the first half of the year has been severe,” the bank said in its statement. This decline “implies a more significant deterioration in the balance of risks on the side of economic activity than for inflation.”

Ortiz said in a June 11 interview that inflation will slow at a “rapid rate” and that a recent rise in global commodities prices is “less threatening” than when those costs reached their peak. The effect of a weaker peso on prices has mostly ended, he said.

Annual inflation slowed to within the bank’s second-quarter forecast of 5.5 percent to 6 percent for the first time in May as the monthly rate fell the most in two years. Ortiz said inflation will meet the bank’s forecast for the quarter.

Lower interest rates can help prompt businesses to invest and consumers to buy on credit. Cheaper loans also can spur inflation by strengthening demand.

“The main argument for lowering the rate is the state of the economy,” said Benito Berber, an economist at RBS Greenwich Capital Markets in Greenwich, Connecticut. “The industrial sector is contracting at double-digit rates.”

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NEW YORK–Aluminum demand will get a lift as auto manufacturers design and build lighter passenger vehicles to comply with President Barack Obama’s plan to cut U.S. auto emissions, but the ramping up process will take several years.

"Looking at it from a long-term view, yes, this is definitely a positive for aluminum consumption. But it’s not going to happen overnight," said Gayle Berry, metals analyst at Barclays Capital in London.

Obama this week proposed the strictest plan ever to increase federal fuel standards for passenger cars and trucks. The rule, effective in 2012, would require the U.S. passenger vehicle fleet to average 35.5 miles per gallon by 2016, saving 1.8 billion barrels of oil.

Vehicles must be lighter to meet those goals. Analysts see aluminum as the biggest base metals beneficiary. Materials such as plastics, carbon fibre and light-weight steel will also see greater use. But many give aluminum the edge because of its light weight and characteristics such as strength, flexibility, anti-corrosiveness and recyclability no checking account payday advance.

"Pressure to be more fuel-efficient benefits aluminum versus other materials. We see the outlook for more fuel-efficient vehicles as clearly positive for aluminum," said Jorge Vazquez, vice president of aluminum intelligence at Harbor Intelligence in Texas.

For years, aluminum producers have worked closely with automakers to promote the metal, which now dominates applications like vehicle bumpers, wheels, seat holdings, and many others.

By 2009, aluminum reached an all-time high of 8.6 per cent of the average North American vehicle weight, said the Aluminum Association, which expects that content to grow to an average 11 per cent of car and light truck weight by 2020.

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IBM Corp. announced its third-quarter results earlier than expected Wednesday, and the company beat Wall Street’s profit estimate and reaffirmed its full-year 2008 guidance. The stock, a component of the Dow Jones industrial average, gained nearly 4% in after-hours trading on the news.

The Armonk, N.Y.-based company said after the market closed that it earned $2.05 per share in the July-September period, four pennies higher than the average estimate of analysts polled by Thomson Reuters. Net income for the period was $2.8 billion, an increase of 20% over the same period last year.

Sales increased 5% to $25.3 billion but fell short of Wall Street’s expectations. Excluding the effects of currency fluctuations, IBM’s sales increased 2% (faxless payday loans).

Analysts were expecting sales of $26.5 billion, but some had started to lower their forecasts ahead of the unexpected announcement Wednesday because of a strengthening U.S. dollar and the deteriorating economy.

IBM maintained its forecast of at least $8.75 per share in profit in 2008, a 22% improvement over last year.

IBM (IBM, Fortune 500) shares gained $3.46, 3.8%, to $94.01 in after-hours trading. They closed down $5.10, 5.3%, at $90.55 during the regular trading session. 

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Professor of medicine, Washington University
Yes … ‘Safety movement’ and time-limited certification help safeguard patients.

Medical practice is fraught with complexity and uncertainty. Thus, medical malpractice is not defined by an unfortunate outcome or a patient’s death. Rather, medical malpractice refers to situations where patients are harmed because of mistreatment of a disease or injury through ignorance or carelessness.

Over the past decade a large number of physicians have been working hard to reduce malpractice by improving the safety and quality of medical care. One area of change has been the development of a "safety movement" in medical practice. The hallmark of this movement is the adaptation of a "systems analysis" of the care delivered by doctors and hospitals. Every process of care is scrutinized, even the tiniest detail, so that medical care can be made safer and more effective. One example of a recent "system change" is the marking of patients before surgery to avoid operating on the wrong side.

In addition, many specialty boards are now issuing time-limited certificates. For example, the internal medicine board now certifies physicians for 10 years rather than for life. Every decade an internist must pass an examination to maintain certification in the field. This policy represents more work for physicians, but most medical leaders feel that the resultant transparency and public trust warrant the effort.

One area where the profession needs to do better is in weeding out unfit physicians. Fewer than 5 percent of doctors account for more than 50 percent of malpractice suits. State boards are making progress detecting and expelling incompetent doctors, as well as drug abusers and insurance cheats, but more work needs to be done.

Since the time of Hippocrates, the ethic of medicine has been to "first do no harm." In recent years the profession has responded vigorously to more closely approximate this ideal.

Partner, Fox and Vuylsteke
Yes … but profit shouldn’t trump the safety of patients.

Almost every person or business entity may be sued if they carelessly or negligently cause injury to someone. Because our society highly values medical professionals, they have been granted numerous protections above those enjoyed by the average person or business. Caps limiting non-economic damages, shortened time to file a lawsuit, and onerous pre-filing restrictions have all served to significantly reduce the number of medical malpractice claims.

Particularly affected are children, the elderly and the unemployed; including stay-at-home parents. These non-wage earners may be blinded, maimed or even carelessly allowed to die; yet their lives are worth no more than $350,000 under the recently enacted Missouri law no fax payday loans. Given the prohibitively high cost of pursuing a medical malpractice claim, many of these patients and their survivors are being denied meaningful access to the civil justice system.

While the medical profession may applaud the resulting reduction in claims, we must face the moral issue of whether it is acceptable to value the life of wage-earners over other members of society.

As these restrictions play out in a medical marketplace increasingly controlled by large corporate interests, those concerned with patient safety find the trend toward devaluation of human life worrisome. Physicians believe in a creed, "To First Do No Harm." However, just as the Securities and Exchange Commission must call "foul" on corporate malfeasance, so must the civil justice system seek to ensure that profit does not trump the safety of patients.

President, St. Louis Metropolitan Medical Society
Yes … and now maybe doctors now will return to underserved Missouri regions.

The threat of frivolous lawsuits has a chilling effect on all aspects of patient care. Patient access to "high risk" physician services is becoming more and more restricted. Obstetricians, neurosurgeons and other doctors have been leaving areas like Madison County, where lawsuit abuse is especially acute. They are retiring, or moving to regions with balanced liability systems that eliminate the jackpot-type mentality that has allowed plaintiff’s lawyers to become multimillionaires at the expense of patients and doctors.

Less visible, but more insidious, has been the voluntary restrictions that doctors have been forced to make. Many obstetricians have stopped delivering babies. Some surgeons no longer perform complicated surgery, or avoid doing essential surgery on patients at higher risk.

Most of the costs associated with professional liability do not go to injured patients. Much of the money goes to attorneys, but the greatest cost is for the practice of defensive medicine. Countless MRIs, blood tests, specialty doctor visits, diagnostic tests, unnecessary Caesarian sections, etc., are done primarily to reduce risk of lawsuits. These costs, estimated at over $100 billion per year, could be far better used to provide health care for the uninsured and improve overall quality of care.

Fortunately, there is light at the end of the tunnel. Professional liability reform in Missouri in 2006 stabilized premiums. This will hopefully see a return of doctors to underserved areas of Missouri as in Texas where record numbers of physicians have been relocating since reform was passed there in 2003.

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