Illinois Public Media News
There will be no storybook ending for Borders. The 40-year old book seller could start liquidating its 399 remaining stores as early as Friday.
The chain, which helped pioneer the big-box bookseller concept, is seeking court approval to liquidate its stores after it failed to receive any bids that would keep it in business. The move adds Borders to the list of retailers that failed to adapt to changing consumers' shopping habits and survive the recession, including Circuit City Stores Inc., Mervyn's and Linens `N Things.
Borders is expected to ask a judge to approve a sale to liquidators led by Hilco Merchant Resources and Gordon Brothers Group. Liquidation sales could start as soon as Friday if the U.S. Bankruptcy Court of the Southern District of New York approves the move at a scheduled hearing on Thursday. The company is expected to go out of business by the end of September.
Borders attempt to stay in business unraveled quickly last week, after a $215 million "white knight'' bid by private-equity firm Najafi Cos. dissolved under objections from creditors and lenders. They argued the chain, which has 399 stores and 10,700 employees, would be worth more if it liquidated immediately.
"We were all working hard towards a different outcome, but the headwinds we have been facing for quite some time, including the rapidly changing book industry, eReader revolution, and turbulent economy, have brought us to where we are now,'' said Borders Group President Mike Edwards in a statement.
Simba Information senior trade analyst Michael Norris said a Borders liquidation could have far-reaching effects, putting thousands of people out of work at a time of high unemployment, even possibly cause sales of electronic books to fall.
"Bookstore employees don't just sell books, they sell the activity of reading, and this decision throws thousands of them out of work,'' said Simba Information senior trade analyst Michael Norris. "This industry is going to slowly figure out that a lot of e-book readers still use bookstores all the time to discover what's new before heading home to buy it for their e-reading device.''
Borders entered the electronic book market with Canada's Kobo Inc. last year. Owners of the Kobo e-reader will still be able use Kobo software to buy and read books. A Borders spokesperson declined to comment about what would happened to e-books bought from Borders.com
It has been a long fall for Borders since Tom and Louis Borders opened their first store in 1971, selling used books in Ann Arbor. At the time, the brothers were mostly interested in offering other bookstores a system they developed for managing inventory.
But in 1973, the store moved to a larger location and shifted its focus to selling new books and expanding, helping pioneer the big-box bookstore concept along with Barnes & Noble Inc. At the time, Waldenbooks and B. Dalton mall chains, with small stores and 20,000 to 50,000 titles, were growing rapidly. The new superstores, by contrast, offered between 100,000 and 200,000 titles, as well as enticements to linger like comfortable chairs and attractive lighting.
Kmart Corp. saw the potential and acquired Borders in 1992, forming a book unit with Waldenbooks. It then spun the bookstores off as a separate company in 1995, the same year Amazon started selling books online.
Borders was slow to adapt to the changing industry and lost book, music and video sales to the Internet and other competition. Sales sales began to fall, leading to a revolving door of CEOs. By the time Borders' current CEO, financier Bennett LeBow, came aboard in May 2010 after investing $25 million in the company, bankruptcy was already looking like a strong possibility.
Borders filed for bankruptcy protection in February after being hurt by tough competition from online booksellers and discounters. It hoped to successfully emerge from bankruptcy protection by the fall as a smaller and more profitable company, but pressure from creditors and lenders eventually led the chain to put itself up for sale and finally, seek approval to liquidate.
At its peak, in 2003, Borders operated 1,249 Borders and Waldenbooks, but by the time it filed for bankruptcy protection in February that had fallen to 642 stores and 19,500 employees. Since then, Borders has shuttered more stores and laid off thousands.
Borders says it expects to be able to pay vendors for all expenses incurred during the bankruptcy cases.
(AP Photo/Carlos Osorio, file)
The summer season is in full swing, and that means many teenagers are trying earn some extra cash. But the job market remains tough, especially for teens. As Illinois Public Radio's Mike Moen reports, Illinois is no exception.
(AP Photo/Gary Kazanjian)
Illinois Governor Pat Quinn said he had no choice but to cancel pay raises for some 30,000 employees of 14 state agencies.
Union workers were expecting a 2 percent pay raise, but were blindsided earlier this month when the governor scrapped the raises to save the state approximately $75 million.
Members of the labor group AFSCME picketed across the state Tuesday to protest the governor's decision. About a dozen of them showed up along Mattis Avenue in Champaign. Wayne Matthews, a 33-year employee with the Illinois Department of Public Health, was at the rally. He said union members have made plenty of sacrifices over the last few years, and he said they deserve their salary increases.
"Two percent is still better than no percent, which is what we've had for a long time," Matthews said. "We've actually - in this contract - pushed back our raises, and volunteered furlough days and other things to save the state money. This is how we're rewarded."
Tara McCauley, a staff representative for AFSCME local 31, was also in Champaign during the picket. McCauley said the governor's decision to cancel the raises was unprecedented.
"We've negotiated contracts with Illinois governors for decades," McCauley said. "We've never had a governor try to go back on a raise that he's negotiated. You know, we've got a signed contract, so we feel that this isn't Wisconsin, this isn't Ohio. We're not going to allow our governor to take away people's legal rights to collectively bargain. So, it is about a bigger issue for us as well."
Speaking to reporters earlier in the day, Governor Quinn defended his actions.
"The General Assembly did not provide any money for pay raises for the AFSCME state workers," Quinn said. "That is the long and the short of it. I cannot give them money that the General Assembly hasn't appropriated in terms of a raise."
AFSCME had supported Quinn, a Democrat, in the November election. Just prior to that endorsement, the union agreed to defer raises while Quinn guaranteed two years without layoffs.
The union filed suit in federal court in Springfield last week to block the pay freeze. The group contends the pay raise rejection was illegal, and it is bringing in an arbitrator to settle the dispute.
The Illinois Federation of Teachers has also joined in AFSCME's lawsuit.
The Urbana city council has given preliminary approval for two tax increases to help boost the salaries of union employees.
The 1 percent sales tax on package liquor, and hiking the city's hotel-motel tax from 5-to 6-percent are both on next Monday's agenda. They would pay for raises through AFSCME and the Fraternal Order of Police, as well as an additional officer.
Alderman Dennis Roberts cast the only no vote in Monday night's committee of the whole meeting, but only because he felt residents needed time to weigh in on the measure.
"We're not in a crushing situation," Roberts said. "The need to jump ahead a month to acquire one month's revenue doesn't seem to serve the city, citizens as well as I would like to see it."
The council will also vote next week on Mayor Laurel Prussing's plan to veto Urbana's $72,000 for the Champaign County Convention and Visitors' Bureau. Prussing wants to use the funds for two police positions.
The CVB's Jayne DeLuce spoke out against the plan Monday night, as did Raymond Ceresa of Eastland Suites, who credits the bureau for $70,000 in room revenue in the past year.
Alderman Charlie Smyth said he is looking for new revenue sources if Prussing's plan is approved.
One possible source - the city has received $19,000 for a year's worth of property tax money from Provena Covenant Medical Center.
With about 50 jobs eliminated in Champaign as part of a round of budget cuts over the last few years, AFSCME local 31 says some of those positions should be saved - especially as city department heads and the city manager are poised to receive a two percent pay hike.
One area impacted by recent budget cuts is the Champaign Police Department, which could lose a few positions that would keep the front desk from staying open overnight. At a time when administrator salaries are going up, AFSCME spokesperson Michael Wilmore said the city should do more to keep the front desk open 24 hours a day.
"We are trying to draw attention to the fact that they're giving themselves raises," Wilmore said. "It is really insulting to the workers and to the citizens of Champaign."
The Champaign City Council considered a liquor tax in June to restore funding for three of the department's front desk positions and one of its record services positions, but that measure failed to get enough support.
There are currently two out of three three positions at the police department's front desk that are vacant. No changes in the status of these jobs will occur until the Champaign City Council provides more direction, which means for now, the two vacated positions will not be filled and the third position will not be eliminated. The city council is expected to discuss potential new sources of revenue and the future of those jobs during its July 12th meeting.
Champaign Mayor Don Gerard said he is hopeful that the city will find a way to keep the front desk staffed all the time.
"Those positions are vital to the support of the police staff," Gerard said. "I voted against not giving the city manager a raise not because I didn't think he deserved it, but because from a leadership standpoint in these budgetary times, we need to have shared responsibility."
City Manager Steve Carter, whose salary will go up by two percent, defended the pay increases for non-union employees. Carter has not received a pay raise for the last couple of years. He noted many of the other non-union workers who are expected to make more money this year also did not get a raise last year.
"If there has been a group of employees that have scarified - if you will - recognizing the budget condition, it has been the non-union employees," Carter said. "All the union employees, including AFSCME, have received salary increases all along based on contracts, some in existence and some negotiated."
Union workers from the Fraternal Order of Police and the Plumbers and Pipefitters saw their salaries go up last year, and continue to rise this year. However, no future pay raises have been budgeted for AFSCME workers since contract negations with the city are ongoing.
Gov. Pat Quinn signed the new Illinois budget into law Thursday, after first trimming money for school buses, eliminating support for regional education offices and chopping Medicaid.
The Democrat suggested the cuts could be part of further negotiations.
"Implementing a budget is not a one-day event but rather a year-round process filled with robust debate and difficult decisions," Quinn said in a statement.
Quinn has repeatedly criticized the spending plan lawmakers sent him, saying it shortchanged many important services. But he cut further.
Money for Medicaid, a health program for the poor, is being cut by an additional $276 million. That brings the Department of Healthcare and Family Services budget to $14.3 billion, or about 4.5 percent below current levels.
Illinois will still have to pay for medical services, however, so less money means bills are simply paid more slowly. Unless something changes, about $1.5 billion in Medicaid bills will be left unpaid at the end of the year, adding to backlog that already amounts to $6 billion or more.
"The point is to get the interested parties to the table to negotiate in good faith" on controlling Medicaid costs, Vaught said in an interview with The Associated Press.
Transportation money the state provides to local schools will be cut by $89 million, which leaves nearly $206 million, a substantial increase.
Vaught said the purpose of that cut is to focus limited state resources on classrooms.
"That's a local function, getting the kids to school," Vaught said, referring to the transportation money as "excess" state funds.
Reducing state aid for transportation is likely to force schools to take money away from other educational services in order to keep buses running.
Quinn eliminated all the money the state provides for regional offices of education around the state. The cut of about $11.3 million does not eliminate the offices, but it would force local taxpayers to come up with the money or close the offices.
Lawmakers rejected both of Quinn's education cuts. They have the option of restoring the $376 million that Quinn cut Thursday. Unless they take action, however, Quinn's version of the budget is the one Illinois will follow for the next year.
His office said Quinn's cuts bring the key measure of state spending to $32.9 billion, about $2 billion below the previous budget. That's a reduction of roughly 6 percent.
Vaught said he didn't know the total size of the budget, including federal funds, fees and other special categories. For the previous year, it was $52.7 billion.
Quinn did not make any public appearance to discuss signing the budget. He does not have any appearances scheduled for Friday either.
The additional budget cuts are likely to frustrate groups that feel the version approved by lawmakers was already deeply flawed. It slashed money to institutions for the mentally handicapped, promised long delays in paying Medicaid bills, reduced education spending and cut money for state employees.
"This is a fundamentally broken budget, an unworkable plan that falls far short of the revenue needed to adequately support basic services," said Anders Lindall, spokesman for the Illinois division of the American Federation of State, County and Municipal Employees.
Lindall urged Quinn to spend at the levels needed to maintain services and then work with lawmakers to come up with more money later in the year.
But Vaught said Quinn must assume no more money will be available. "You implement right away and you do the cuts," he said.
A key question is what cuts Quinn can make. He reached a bargain with AFSCME last year in which the union agreed to make concessions and Quinn agreed not to cut jobs or close state facilities.
Vaught said Quinn will diclose more of his plans soon.
(AP Photo/Seth Perlman)
The U.S. Department of Labor is giving an Illinois group $1.4 million to provide job training and other services to migrant farmworkers.
The department said Wednesday the money will go to the Illinois Migrant Council. The money is part of $78.3 million being provided by The National Farmworker Jobs Program to 52 groups around the country to pay for job training, employment services and other needs for seasonal farmworkers and their families.
Labor Secretary Hilda Solis said the money is intended to help migrant farmworkers and their families lead more stable lives. Another $5.7 million will go to 16 groups across the country to provide housing assistance for migrant farmworkers.
Come July 1st, four library systems in Decatur, Champaign, Edwardsville and Carterville will merge to form the Illinois Heartland Library System.
The change comes in response to the state's financial problems.
One of the groups involved in the merger is Rolling Prairie Library System in Decatur. Executive Director Beverly Obert said her library system is waiting on about $350,000 from the state. She said the system's nearly 260 member libraries will notice some changes following the merger, such as a lack of continued education and consulting services
"It's a little bit of looking forward to it, and also sadness at what's being lost," Obert said. "Next few days is to get through the merger, and start serving the people."
Obert noted that there will be more of a focus on resource sharing, delivery and the "Talking Book Service" in the new library system. She said reciprocal borrowing privileges between libraries in the system should also stay the same.
Another library system involved in the merger is Champaign-based Lincoln Trail Libraries System, which serves 120 libraries. It is currently waiting on $300,000 to $400,000 from the state, according to its executive director Jan Ison. She said the people who will notice a difference in service are librarians who rely on her staff to answer questions quickly.
"Now that doesn't mean my staff won't answer questions and they won't be quickly, but hopefully we're going to do the best we can," Ison said. "It's quite likely that some staff will be telecommuting, or perhaps working out of some of the member libraries."
While some library systems involved in the merger are cutting staff - like Rolling Prairie - Ison said the only positions that will be eliminated at the Lincoln Trail Libraries System are those that are currently open. She said all existing staff who want to stay on board will be able to do so.
Illinois Heartland Library System will include 594 member libraries: 38 Academic, 231 Public, 260 School and 65 Special. In addition, five library systems in northern Illinois will merge into one consolidated system known as Reaching Across Illinois Library System (RAILS). Meanwhile, the Chicago Public Library System will remain as its own entity.
Hundreds of city workers could face layoffs if they don't agree to make concessions that would save the city $20 million, Chicago Mayor Rahm Emanuel said Wednesday.
Emanuel said that he will not have to lay off workers if he and the unions reach an agreement by a Thursday night deadline, but added: "If they don't agree to it, then 625 people and their families will lose that job. And that's not necessary."
The mayor would not say whether layoff notices would go out immediately.
Emanuel said he still hopes unions can be his "partner" in helping close a multimillion dollar budget gap left to him by former Chicago Mayor Richard Daley. In order to balance the 2011 budget, the Daley administration struck an agreement with labor to make workers take several unpaid days off, for an annual savings of $30 million. But that agreement expires Thursday at midnight, leaving it up to the Emanuel administration to negotiate with labor on concessions for the second half of the year.
Emanuel has said he is against imposing more furlough days on city workers. But he declined to offer specifics on the $20 million in savings he proposed to Chicago Federation of Labor President Jorge Ramirez when they met on Tuesday, other than to say that they comprise several "work rule and workplace reforms and efficiencies" that he said are common practice among private sector unions.
The 625 workers who could be laid off have been identified as a "precautionary" measure, Emanuel said. But he declined to say which workers might face layoffs, or what city services they could affect.
A statement Wednesday afternoon from union leaders claims there have been no negotiations between them and the city. Jorge Ramirez from the Chicago Federation of Labor and Tom Villanova of the Chicago & Cook County Building Trades Council said union workers have already sacrificed a lot, and should not be blamed for the city's budget problems.
A building nearly destroyed by fire in Champaign's Campustown neighborhood could be operating again by early 2012.
The fire that began in the upstairs of the structure in the 600 block of East Green Street brought business to a halt at Mia Za's café, Zorba's restaurant, and Pitaya clothing on March 23rd.
But an architectural firm has filed a permit to rebuild, and work with the three owners going from the drawings of the shell of the outer building. Neil Strack with Architectural Expressions LLP said the initial plans are to place a new upstairs, roof, and front façade on the building. He expects it will be about 60 days before the building's occupants can do their work.
"How long does it take for their drawings to get ready, ordering materials, contracts, so on and so forth," said Strack. "That would be past that 60 days, so you're talking about another 3 or 4 months after that before you see your first tenants open back up again."
Strack said communication will be a big concern moving forward since the building has three different owners and four different tenants, which includes two upstairs apartments.
Champaign's Building Safety Supervisor, Gary Bowman, said the challenge now is restoring the roof and outer shell after reviewing drawings of the building's original 1920's design.
"It's always a bit more complicated when you're trying to go back and repair something that's damaged and somewhat of an existing structure as opposed to building brand new from ground level," Bowman said. "A lot of times it's actually faster to build brand new than it is to try to repair an existing structure and correct all the things that are necessary for that. That inevitably adds time to the project."
Strack said it will take some time to comply with current codes in the old structure. The demolition and removal of remaining debris has been completed.
(Photo by Jeff Bossert/WILL)
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