Current Column: Chicago Tribune — March 8, 2010
Navistar CEO navigates recession, headquarters battle
Times sure seem tough in the trucking business. Along with the usual cutthroat pricing and strict new emission standards, the neighbors have gone on the warpath too.
It’s been that kind of year for Daniel Ustian, chief executive of Navistar International Corp., whose strategy for negotiating the recession paid off, even as his plan to move three miles down the street triggered a public brawl.
Warrenville-based Navistar has made it through the worst downturn in memory without losing a dime, no easy feat in a business so cyclical its sales charts look like roller-coaster tracks.
The financial success hasn’t shielded it from angry locals denouncing its alleged affinity for “corporate welfare” and diesel exhaust. It’s not every day a company with roots dating to 1831 finds itself pitted against a neighborhood school for autistic children.
Navistar’s newly revised proposal for moving to the former Alcatel-Lucentsite off Interstate Highway 88 is heading for a showdown next month before the village board of trustees in Lisle, coinciding with some bold moves in the marketplace.
Ustian pushed hard into government contracting a couple of years ago, and his company now produces dozens of military vehicles.
“We had nothing before that,” he explained in an interview.
Government orders, especially for heavily armored vehicles known as MRAPs, kept Navistar in the black last year despite its huge legacy costs, burdensome debt and the worst commercial truck market since the 1950s.
Those military revenues have peaked after a couple of losing battles for additional contracts, and the company could post much lower results in that sector when it reports earnings on Monday.
But Ustian remains confident in his staying power, forecasting 2010 military sales of at least $2 billion, plus $500 million from related parts. “We’ll be closer to $3 billion,” he predicted.
Read complete columnCurrent Article: Chicago Tribune — February 15, 2010
10 things you need to know about Social Security
It is among the most popular and important social programs in America, yet many Americans have only a vague idea about how it works. What nearly every American knows is that it’s in trouble.
“This program affects hundreds of millions of Americans,” said Jason Fichtner, chief economist at the Social Security Administration. “They’re paying for a system that they expect to be there for them.”
Is Social Security going under? How could it be fixed? Should everybody worry?
This report addresses Social Security, explaining what you need to know and how the system may change in years to come. The good news: Social Security can afford to pay benefits for decades. The bad news: After that, without reform, it’s up for grabs.
How Social Security works
Practically every American has a friend or relative on Social Security. More than 52 million of the nation’s 309 million citizens received benefits from it last year. That’s one in every six.
The 75-year-old program is partly retirement plan and partly insurance. About two-thirds of annual payouts go to retirees. The other third goes to disabled Americans who cannot work and to the children or spouses of people who are disabled or die prematurely. The agency employs more than 65,000 workers to keep the checks coming.
Read complete articleMy Bio
Greg Burns is a senior correspondent specializing in business and economics at the Chicago Tribune. His column runs Mondays and Fridays. He previously served as the Tribune’s associate managing editor for business, responsible for financial news coverage, plus feature sections on real estate, jobs, transportation and personal finance. Before joining the Tribune, Burns wrote for Business Week magazine and the Chicago Sun-Times. He holds bachelor’s and master’s degrees from Northwestern University.
Read Greg’s complete CV.Past Work
Chicago Tribune Column — Mar. 4th, 2010
Benefits add to unemployment rate
Anyone ticking off the reasons long-term joblessness stands at its highest levels in decades needs to do a little arithmetic.
As of mid-2008, unemployment benefits ran out after 26 weeks. Under two presidential administrations and a more-than-willing Congress, however, they kept growing and growing.First, they expanded by 20 weeks, then another 13, then 20 more and then 13 more. One additional week got added to the first 13 to make 14. Finally, another six got tacked on.
Add it up, and that’s 99 weeks of unemployment benefits available to Illinois residents who qualify. Other states have different rules, but many also run to 99 weeks at the maximum.
Given the rotten economy, it’s easy to imagine why politicians keep pumping quarters into the jukebox. It takes time to get a job, so the long duration of benefits is not a sign of deliberate malingering. But those government checks come with an unwanted side effect, especially for workers at the low end of the economic food chain.
They go a long way toward explaining why 40 percent of jobless Americans have been out of work for at least 27 weeks, the highest level since the government started keeping score in the 1940s.
“Those programs subsidize unemployment,” explained Robert Shimer, economics professor at the University of Chicago. “There could be good reasons to do it, but we should be clear on the cost. It has a pretty substantial impact.”
He reckons that the current level of benefits probably accounts for 1 to 1.5 percentage points of the 9.7 percent national unemployment rate.
Read complete articleChicago Tribune Column — Mar. 1st, 2010
CEO: Playboy will shrink to grow
The March issue of Playboy still features the old-style centerfold that made the magazine famous during its heyday long ago, but in a slightly smaller print format.
Now the parent company is shrinking too.
Under a chief executive determined to remake its faltering business model, Playboy Enterprises Inc. has launched a fast-paced program to outsource much of its operations.
Since his appointment in June, new boss Scott Flanders has reached two major agreements that shift basic functions to outsiders with greater scale and expertise.
At least two more major partnership, joint-venture or licensing deals will follow in the coming year, making Playboy more profitable but, like its centerfold, “smaller and leaner,” Flanders said.
How much smaller?
Potentially small enough to hide behind a staple.
In a year, he said, the Chicago-based media conglomerate could cut its headcount of 573 employees by half as partners take over its existing operations and expand into new ventures.
Already, Flanders has outsourced production of the flagship magazine, and he’s counting on big results from his recent deal with IMG Licensing Worldwide to take over the company’s operations in Asia, he said. Playboy will be “open-minded” about expanding the IMG relationship into Europe as well, he added.
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