Illinois Public Media News
The nation's largest hot dog makers argued about the meaning of "100 percent pure beef" and the merits of ketchup Monday in a lawsuit over advertising claims stemming from their years of dog-eat-dog competition.
Attorneys for Sara Lee Corp., which makes Ball Park franks, and Kraft Foods Inc., which makes Oscar Mayer, superimposed giant hot dogs on a courtroom screen as they delivered opening remarks in a case that could clarify how far companies can go when boasting about their products.
"There's never been anything of this scope . . . in the entire history of hot dogs," Sara Lee's attorney, Richard Leighton, said about what the company says is Kraft's false and deceptive ad campaign that claimed Oscar Mayer wieners were the best-tasting franks.
U.S. Magistrate Judge Morton Denlow, who will decide if either company broke false advertising laws, couldn't resist a note of levity as he cast his eyes at the attorneys and proclaimed, "Let the wiener wars begin."
The legal dog fight began when Sara Lee filed a lawsuit in 2009, singling out Oscar Mayer ads that brag its dogs beat Ball Park franks in a national taste test. Leighton argued the tests were deeply flawed and gave as an example that the hot dogs were presented to participants without buns or any condiments, such as ketchup.
"They were served boiled hot dogs on a white paper plate," he told Denlow. As a result, Leighton said, Sara Lee's hot dogs may well have tasted too salty or smoky when consumed sans buns.
Among other flaws, he went on, was a rule barring anyone who ever worked in a factory from taking the test.
"You may be excluding blue-collar workers," he said. "And they're big hot-dog eaters."
Kraft filed a countersuit later in 2009, accusing Sara Lee of running ads for Ball Parks with the tagline "America's Best Franks" based on an award from ChefsBest, a food-judging organization based in San Francisco.
The other focus of the trial is Kraft's claim that its Oscar Mayer Jumbo Beef Franks are "100 percent pure beef." Sara Lee says the claim is untrue, that it cast aspersions on Ball Park franks and damaged their sales.
But Kraft's attorney, Stephen O'Neil, told the judge the 100 percent beef tag was never intended to suggest there weren't other ingredients -- like water, salt and various spices. It was only meant to convey that the meat that was used was all beef, he said.
That stress was designed to counter lingering impressions that hot dogs contain suspect, "mysterious meats," he added. And he said it defied common sense to argue that consumers might take the label as meaning that the one and only ingredient was beef.
"If there was nothing but beef, it wouldn't be a hot dog," he said, "It would be a hamburger."
Denlow let slip that, according to his own personal tastes, neither Oscar Mayer nor Ball Park are top dog.
"I already have my favorite . . . and it's none of the brands on trial," he told attorneys. He said he may reveal which one it is -- but only after a ruling.
The trial is expected to last about two weeks.
(With additional reporting from The Associated Press)
Google is buying Illinois-based cell phone maker Motorola Mobility for $12.5 billion in cash in what is by far the company's biggest acquisition to date.
Google Inc. will pay $40.00 per share, a 63 percent premium to Motorola's closing price on Friday.
The companies say the deal has been approved by the boards of both companies.
"Motorola Mobility's total commitment to Android has created a natural fit for our two companies," said Google CEO Larry Page in a statement. "Together, we will create amazing user experiences that supercharge the entire Android ecosystem for the benefit of consumers, partners and developers."
The deal gives Google direct control over the maker of many of its Android phones. In pre-market trading, shares of Motorola Mobility Holdings Inc. are up 60 percent, or $14.72, to $39.19.
What Google likely wants from the acquisition is Motorola's trove of more than 17,000 patents on phone technology. Google recently lost out to a consortium that included Microsoft Corp., Apple and Research In Motion Ltd. in bidding for thousands of patents from Novell Inc., a maker of computer-networking software, and Nortel Networks, a Canadian telecom gear maker that is bankrupt and is selling itself off in pieces.
Motorola has nearly three times more patents than Nortel.
Earlier this year, Motorola Mobility's CEO announced the company would be staying put in Illinois thanks to a 10-year benefit package from the governor. Motorola Mobility has about 3,000 employees.
(AP Photo/Marcio Jose Sanchez, File)
Sara Lee Corp. said Thursday that its fiscal fourth-quarter profit fell 41 percent as it continued to sell-off businesses even as revenue rose on strong results from its North American segments and international beverages unit.
The results of the Downers Grove, IL. food company, which is shedding units as it works to split into two businesses, met analysts' expectations, but the company gave fiscal 2012 adjusted earnings and revenue outlooks below Wall Street's estimates. Its stock fell $1.31, or 7.6 percent, to $16 on the news.
Sara Lee's results continue to be affected by its ongoing plan to become leaner by shedding some operations before it splits into two businesses by early next year -- one focused on coffee and the other largely on meat. Just two days ago, Sara Lee said that it will sell its North American refrigerated dough business to Ralcorp for $545 million. Sara Lee said it's planning to realize $180 million to $200 million in costs savings during fiscal 2012 and 2013 as it prepares for the spinoff.
"Our objective of building two simpler, faster and more entrepreneurial businesses is being realized," Executive Chairman Jan Bennink said in a statement. "We have defined the organizational framework for our new companies and are continuing to build and restructure our teams for the future."
Like other food companies, Sara Lee's results were also impacted as it raised its prices to cope with higher ingredient costs. The company has increased prices across nearly all of its product lines and previously announced that it plans to make price increases all year. Sara Lee's leaders have said that they expect a stronger second half of the year as those price hikes take effect and the company releases new products.
During the current quarter, the company's units benefited from the price hikes. Total revenue rose 9 percent to $2.3 billion from $2.11 billion, topping Wall Street's projected $2.28 billion.
North American retail revenue rose 4 percent mostly because of higher prices. Revenue for the North American food service division climbed 9 percent on increased prices and experienced strong sales of Jimmy Dean breakfast sausages, pre-sliced pies and cakes and branded meats distributed through convenience stores.
The international beverage unit reported a 14 percent revenue increase partly on higher prices and increased green coffee export sales from Brazil. International bakery revenue fell 8 percent on competition in Spain and difficult economic conditions.
Sara Lee earned $111 million, or 19 cents per share, for the period ended July 2. That's down from $187 million, or 28 cents per share, a year ago. Adjusted earnings from continuing operations were 20 cents per share.
For the year, Sara Lee earned $1.29 billion, or $2.06 per share. That compares with earnings of $506 million, or 72 cents per share, in the previous year. Annual revenue rose to $8.68 billion from $8.34 billion.
Looking ahead, Sara Lee expects fiscal 2012 adjusted earnings of 89 cents to 95 cents per share on revenue of $8.5 billion to $8.75 billion. The guidance excludes the international bakery segment, which the company plans to sell. Analysts predict earnings of $1.07 per share on revenue of $9.35 billion.
(AP Photo/M. Spencer Green)
The mayor of Villa Grove says the future of the Douglas County community's downtown remains a question mark after fire destroyed a 100-year old building Wednesday night.
Seventeen different departments fought the blaze, many of them staying throughout the night. There were no injuries. The State Fire Marshall is still investigating the cause. Villa Grove Mayor Thelma 'Boots' Blaney said the building was vacant, and most businesses on the north side of downtown, across Main Street, are open. But she said it will take some time for a local bar, beauty shop, and jewelry store to clean up from smoke and water damage.
Blaney said the firewall around the structures did its job, or the entire block would have been lost. She says those helping out overnight Wednesday motivated each other.
"The businesses just stepped up to the plate," she said. "We have pizzas and all kinds of drinks and ice. People were donating. Businesses were donating. You know, they all just stepped up to the plate, and the firefighters helped them keep going too."
Fire departments helping out included those from St. Joseph, Broadlands, Tuscola, Savoy, Philo, and Comargo.
"Right now, our main concern is getting it cleaned up and the safety of everyone, and trying to go from there," Blaney said. "I mean, it's just like everywhere else, you know, Villa Grove has been struggling. Lord knows what's going to hold up for the future."
Villa Grove Police say the buildings that were destroyed formerly housed the local Moose Lodge and a Chinese restaurant, but the structures had been empty for at least 10 years.
IBM has dropped out of the Blue Waters Supercomputer project going on at the University of Illinois' Urbana campus due to apparent cost and technical concerns.
But the university's National Center for Supercomputing Applications said the company's decision is not expected to mean a setback for water-cooled supercomputer. The contract was terminated Saturday.
A joint statement released Monday by the company and NCSA stated that the technology ultimately developed "required significantly increased financial and technical support by IBM beyond its original expectations."
NCSA spokeswoman Trish Barker said efforts to replace IBM are already underway.
"We definitely need to identify a different technology, a different hardware that will be used in this project," Barker said. "At this point exactly what that will be, because obviously we're really early on in that process. But it will be a pretty quick turnaround to identify a different technology that will be used."
Barker said she still believes Blue Waters has the same timeline, and should be operational by summer 2012.
She said NSCA entered a dispute resolution with IBM in April, but could not come to a resolution. She said this does not impact other projects on campus involving the computing giant. IBM will be returning the $30 million it has received to date for the project, and NCSA will return equipment delivered by IBM as part of the contract.
The project is funded by the National Science Foundation. An IBM spokeswoman couldn't be reached for comment.
(With additional reporting from The Associated Press)
Illinois-based Kraft Foods announced Thursday that it plans to split into two separate companies by the end of next year.
One company would focus on international growth by selling snack products, like Oreo cookies, Trident gum, and Cadbury chocolates. The snacks business is estimated to have revenue of about $32 billion.
The other part of the company would stick to the North American grocery business, which would include Kraft cheese and Maxwell House coffee. Kraft estimates revenue of approximately $16 billion for that part of the company.
"Our strategic actions have put us in a position to create two great companies, each with the leadership, resources and strong market positions to realize their full potential," Chairman and CEO Irene Rosenfeld said in statement.
The move by Kraft comes at a time when other companies, including Wal-Mart and Target, are trying to respond to one-stop shopping needs by adding more grocery store choices. University of Illinois finance professor Heitor Almeida said Kraft's decision is a smart one because it'll allow the company to spend more time focusing on opportunities for growth.
"It should be ok for the company as a whole, including the employees and everything," Almeida said. "I guess one concern is whether the North American grocery business might become a target for an acquisition for another company because it's clearly the less glamorous one."
While investors reacted well to the news, analysts were skepticism about the strategy and as to whether the deal, when fully formed, will provide shareholder value. Some analysts question the split of what they see as overlapping businesses.
"We are surprised,'' said Morningstar analyst Matt Arnold. "It's definitely a change in philosophy; they used to say we will win with scale. It's tough to say if there is pressure from investors."
Aside from the spinoff plans, Kraft announced that its second-quarter earnings climbed 4 percent to $976 million, or 55 cents per share, from $937 million, or 53 cents per share, a year ago. The food maker's stock gained 92 cents, or 2.7 percent, to $35.22 in premarket trading.
Kraft runs a major food processing plant in Champaign. The company says there are no immediate plans to change its operations in the state.
Sales of homes, jewelry and other assets that once belonged to a former Decatur resident convicted of investment fraud have raised more than $7 million. But that's less than a third of the money William Huber was convicted of stealing.
The (Decatur) Herald & Review reports (http://bit.ly/pVqG6C) that court documents indicate most of Huber's former assets have been found and sold.
That includes homes in Florida and California as well as cars and clothes. One of the more recent sales was $39,000 worth of jewelry.
Huber was sentenced to 20 years in prison in December after he pleaded guilty to running a Ponzi scheme that stole $23 million from investors.
Huber is now 62 and in prison in California. He's appealing his sentence claiming it's too long.
U.S. Sens. Dick Durbin and Mark Kirk are questioning airline fare increases after a ticket tax holiday was created by the partial shutdown of the Federal Aviation Administration.
The two Illinois senators have sent a letter to the head of the Air Transport Association asking why most carriers aren't passing the savings along to customers.
Other senators also are putting pressure on the carriers about the fare increases, and so is U.S. Transportation Secretary Ray LaHood.
The FAA shutdown eliminated the airlines' authority to collect ticket taxes, which funds the FAA and airport construction. But nearly all carriers raised fares equal to the taxes.
Kirk, a Republican, and Durbin, a Democrat, say they worry the recent price increase is "a collective effort to take advantage of federal inaction.
Chicago-based Groupon is facing a fierce new competitor in the group discount market. Amazon.com is launching Amazon Local and promises to save consumers 50 percent or more on daily email deals.
Amazon Local has tip-toed into six markets around the US, and Chicago is its latest hold. With more than 140 million users across the globe, Amazon Local could become the industry's leader.
RJ Hottovy is a senior stock analyst with Morningstar. He said, "I think consumers may be more apt to open up the email or listen to the daily deal from Amazon, so it could have the potential to be a very disruptive force."
But at the same time, Hottovy thinks the scores of copy-cat deal sites could become a bad thing for featured businesses. "I feel like the market may be nearing saturation and it's going to be more and more difficult for rivals to have deals that stand out among consumers at this point," he said.
And in another nerve-wracking move for established internet companies, Amazon.com, Inc. announced Thursday that it reached an agreement with NBC Universal to license and stream movies.
So now online entertainment companies Hulu and Netflix are joining Groupon in the "what exactly does this mean for us?" waiting game.
More than three dozen Illinois mayors signed a letter Friday urging President Obama and members of Congress to take action on the nation's debt ceiling crisis, or risk another recession.
They say if lawmakers don't reach an agreement on a debt-limit solution before the Aug. 2 deadline, basic city services that rely on federal funding may not get supported. At that time, the Treasury Department will be forced to prioritize its spending commitments.
St. Joseph Mayor B.J. Hackler said he is concerned about highway construction projects that could be put on hold in his town if the debt ceiling is not raised.
"So, if people can't get to your town, they're sure as hell ain't going to build anything," Hackler said. "It got to be resolved. They got to unite together in some fashion to solve this problem."
Hackler also expressed concern about funding for water and sewer projects in St. Joseph.
Meanwhile, Danville Mayor Scott Eisenhauer said he is concerned about the impact on Social Security and Medicare payments. He said he is also worried federal funding for Danville's Mass Transit District could be jeopardized.
"Right now we are experiencing 50,000 riders a month," Eisenhauer explained. "If in fact that program were to be reduced or halted in any way, how will those individuals get to places where they need to be?"
Champaign Mayor Don Gerard said not raising the debt ceiling could put a damper on job growth and economic development in his city.
"You know, trying to get our job growth back up and our economic development, I think that's just one of the key factors," Gerard said. "It's hard to move forward with recruiting new business if we're not sure we can keep our roads and our infrastructure in shape."
Others mayors to sign the letter included Rahm Emanuel of Chicago and Laurel Prussing of Urbana.
In a statement, the Treasury Department did not provide details on the bills it would pay should the government default on its debt obligations. President Barack Obama on Friday urged Democrats and Republicans in the Senate to come together on a plan that can pass the House and that he can sign into law.
Page 58 of 84 pages ‹ First < 56 57 58 59 60 > Last ›