Illinois Public Media News
(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.
For the first time in its history, all of the leaders of the University of Illinois' three individual campuses will be women. A search committee has picked University of Washington provost and vice president Phyllis Wise to head the Urbana-Champaign campus starting in October, if the board of trustees gives its likely approval. She will receive a $500,000 annual salary with another $100,000 set aside each of the next five years. She will receive that money if she remains at the U of I's Urbana campus that long.
Wise spoke to Illinois Public Media's Tom Rogers. She said her role as a researcher will inform her administrative decisions.
(With additional reporting from The Associated Press)
Illinois Gov. Pat Quinn continues to meet with those who have an interest in gaming legislation lawmakers approved earlier this year.
Quinn said he is listening to both critics and supporters of a plan to add 5 new casinos in the state, including one in Chicago, Danville, Rockford, Lake County and Chicago's south suburbs. The measure would also allow slot machines at Chicago airports and at horse tracks, including the State Fairgrounds in Springfield.
"Last Friday I saw the Rockford people," Quinn said. "This Friday I am seeing the horsemen and people involved in raising horses. There are others who are interested in the bill, both pro and con. I think there are some strong critics of the bill that are on our schedule. I want to make sure everyone gets their voice heard."
Quinn has been critical of the gaming expansion, saying it is "top heavy." However, he has said he is willing to consider a Chicago casino if it is done properly.
Supporters say the gaming legislation will bring a revenue windfall to the state. But opponents warn it lacks regulatory safeguards and should be rejected.
The Chicago Crime Commission has criticized the legislation, calling it "flawed" and saying it will lead to corruption. The watchdog group said Wednesday that Quinn shouldn't sign the law because it cannot be successfully implemented.
Lawmakers passed the legislation in May, but Illinois Senate President John Cullerton has a legislative "hold'' on it so lawmakers can try to work out a deal. With that hold in place, Quinn cannot act on the bill.
"The senate president continues to talk to the governor about what specific concerns he there might be, if there is a need to go back in and tighten up various language," Cullerton spokesman John Patterson said.
But sources say Cullerton will send the bill to Quinn's desk by the end of the month, regardless of a possible veto from Quinn.
If Quinn vetoes or changes the bill, the General Assembly will need to pass it again. The veto session starts the last week in October.
Bids will be opened this Friday from contractors competing for a construction project at Willard Airport near Champaign, but any actual work will have to wait until Congress agrees on temporary financing for the Federal Aviation Administration.
The FAA has been partially shut down since July 23. Congress took its August recess without resolving a dispute over the FAA, and won't be back in Washington until after Labor Day.
Willard Airport Director Steve Wanzek said he will work with the Illinois Department of Transportation's Division of Aeronautics to complete the necessary paperwork at the state and local level - in the hope that Congress will act quickly enough to allow the FAA to approve the project in September.
"We'll do all the paperwork, get all the grant application, all of that stuff through the state," Wanzek said. "You know, that takes a couple of weeks anyway. So we may lose a week or two --- assuming that if they (Congress) met on Labor Day, after Labor Day and take this on --- you know, something approved --- we would be able to be issued a grant fairly quickly."
Meanwhile, the Decatur Airport has already received federal funding for an upcoming ramp rehabilitation project, according to airport director Joe Atwood. He said FAA's partial shutdown will not prevent that project from going forward. But he said he will be watching activity in Washington when Congress returns in September
Atwood will also be keeping an eye on what Congress decides to do about the Essential Air Service program, which helps underwrite air passenger service at the Decatur Airport. Efforts in the Senate to restore FAA funding broke down Tuesday over a GOP proposal to cut money for that program.
The Essential Air Service program provides money to help airports in small cities attract and keep air service. The Decatur Airport is funded by the program, as are airports in Quincy and Marion.
Atwood said it is strange that the program is being debated now, because its funding isn't part of the federal budget.
"The money comes from the Aviation Trust Fund, and it doesn't affect the General Treasury," Atwood said. "It's not a general Treasury budget item. So even if they eliminate the program, they don't effectively eliminate the resulted expense from the treasury. They can cut the program out, they still haven't saved anything."
Atwood stresses that the debate in Congress over Essential Air Service funding is about the program as a whole, and doesn't focus on the Decatur Airport in particular.
The partial shutdown at the FAA does not affect air traffic controllers.
Both Atwood at the Decatur Airport and Wanzek at Willard Airport say their day-to-day operations will continue as usual.
Gov. Pat Quinn has signed legislation increasing penalties for convicted felons who are found carrying guns.
Under the law, signed Tuesday, felons convicted of unlawful use or possession of a weapon face two to 10 years behind bars.
Additional violations by felons caught with guns while on parole or supervised release will carry a sentence of three to 14 years in prison.
The measure was sponsored by Sen. Tony Munoz of Chicago and Rep. Michael Zalewski of Summit, both Democrats, in response to the shooting death of Chicago Police Officer Thomas Wortham. He was killed outside his home during an attempted robbery last year. Suspects in his death had previous gun charge convictions.
In signing the bill, Quinn said the law will ensure safer neighborhoods for families across Illinois.
A new law means shelters will have to try harder to reunite lost pets with their owners.
The legislation Gov. Pat Quinn signed Wednesday requires shelters to scan twice for microchips. The first scan would be within 24 hours of the animal's arrival and a second scan before it's adopted, transferred or euthanized.
Shelters also are required to reach out to the person registered with the animal's microchip by phone or email. Currently they only need to send a letter, a process that can be ineffective if the owner has moved.
Quinn says pets are part of people's families and the state wants to do everything possible to reunite lost animals with their owners.
Quinn's own dog, Bailey, recently died.
The law goes into effect Jan. 1.
A University of Washington administrator and researcher is in line to be the next chancellor at the University of Illinois' Urbana campus.
Phyllis Wise is currently the provost and executive vice president at Washington. A selection committee picked her after a nine-month search.
Wise said she almost disregarded her chance to take the job. When she first heard about the U of I vacancy, she said she was Washington's interim president, and she was preoccupied with that role.
"Later on when the search was still ongoing and we had selected a president here, I thought for heaven sakes I should at least look into this," Wise said. "And the more and more I learned, the more interested I got, and I think the rest is history."
If U of I trustees approve at their next meeting Sept. 9, Wise will take over Oct. 1 for interim Chancellor Robert Easter. Easter had taken the post after former Chancellor Richard Herman resigned following an admissions scandal in 2009.
University President Michael Hogan praised Wise's experience and academic record.
"We're not hiring her as a researcher and a teacher, but if you're going to lead a major campus like our Urbana campus, having research and teaching credentials like she has gives her a high degree of credibility with one of her most important constituencies, and that's the faculty, including the deans," Hogan said.
Illinois' last permanent chancellor, Richard Herman, was paid $400,000 a year when he resigned in 2009.
Hogan confirmed that Wise will earn $500,000 per year and $100,000 per year deferred if she stays in the position for five years. Hogan said the base salary is close to what Herman would have earned at this point had he stayed on as chancellor, and is "a little up from the middle of the pack from chancellors in the Big Ten."
Wise has been at Washington for the last six years. She specializes in women's health and gender-based physiology. If approved, all three U of I chancellors will be women for the first time.
(Photo courtesy of University of Washington)
Seven Illinois residents have been sickened by a nationwide outbreak of salmonella that authorities say could be from ground turkey.
The Illinois Department of Public Health is working with the Centers for Disease Control and Prevention, as well as the United States Department of Agriculture, to try to nail down the exact source of the contamination.
Illinois Department of Public Health spokeswoman Melaney Arnold said it will be a very complicated process.
"It does take quite a lot of time to do the trace back just because of all the steps -- first of all recognizing that there is one particular type of strain of salmonella out there and then trying to make that link -- there are so many different steps and so many interviews that need to occur that it does take time," Arnold said.
According to Arnold, until a source is identified, Illinois residents can still buy ground turkey. Arnold recommends residents prepare and handle the meat safely, cooking the turkey to an internal temperature of 165 degrees Fahrenheit. As long as people take the right precautions, she said, they should be fine.
Across the country, a total of 77 people have been affected by the strain, leading to one death. In Illinois, the first case was reported to the state's Department of Public Health in March, and the most recent case was reported on June 29.
The USDA has yet to recall any turkey products in relation to the outbreak.
President Barack Obama's re-election campaign expects to raise tens of millions of dollars less this summer than it did in the spring because negotiations over the nation's debt limit forced Obama to cancel several fundraisers.
Obama's campaign said Wednesday it canceled or postponed 10 fundraisers involving the president, Vice President Joe Biden and White House chief of staff Bill Daley in the past month because of the debt talks, scrubbing events in California, New York and elsewhere.
Only weeks after the president's campaign reported collecting a combined $86 million with the Democratic National Committee, Obama's team is trying to lower expectations about its fundraising juggernaut while signaling to its army of volunteers and activists that they need to fill the void. Obama is coming off a bruising battle with congressional Republicans over raising the government's debt ceiling and is expected to face a formidable challenge from Republicans in 2012 against the backdrop of a weakened economy.
"We're going to raise significantly less in the third quarter than we did in the second quarter," said Jim Messina, Obama's campaign manager. "We will not be able to replace all of these events just because of his busy schedule. We always knew that he had his job and we had to do this around his schedule, and the truth is we just have to deal with canceling a month's worth of events."
Obama holds a large fundraising advantage over his Republican rivals and was raising money later Wednesday in his hometown of Chicago on the eve of his 50th birthday. Former Massachusetts Gov. Mitt Romney hauled in more than $18 million through the end of June, while all of his GOP primary opponents were in the single-digits.
Democrats said the slow fundraising pace during the summer was expected because many donors are on vacation and high-dollar events don't typically resume until after Labor Day. Obama, meanwhile, was taking a jobs-oriented bus tour of the Midwest in mid-August and was not scheduled to hold many donor events during the month. The fundraising quarter was expected to feature smaller gatherings headlined by Obama "surrogates," or high-profile supporters such as governors and lawmakers.
"This is not an easy time to raise money," said former Rep. Martin Frost, D-Texas, who led the House Democrats' fundraising arm. Frost said many donors may not feel compelled to give money yet because the campaign is still in its early stages and no clear Republican rival has emerged.
Obama has experienced a summer lag in fundraising before. During his first presidential campaign, Obama raised about $21 million in the summer of 2007, compared with about $33 million in the spring of that year.
Messina said the campaign had not yet set a revised goal for the current fundraising period ending Sept. 30 but would urge "grass-roots fundraisers" to step up their efforts in the weeks ahead. The campaign has emphasized its large donor base - more than 550,000 people gave money during the spring - and it plans to lean heavily on small donors in August and September.
"We're going to be very aggressive in trying to find ways to engage the grass roots," Messina said. "We always said ... they're the biggest piece of this and they own the campaign and we're about to give them an even tougher assignment."
Obama signed legislation on Tuesday to raise the debt limit and avoid a government default, but the negotiations kept him in the Washington area for the past month. Obama's last fundraiser was in Philadelphia on June 30.
The campaign said the debt talks required Obama to cancel two fundraisers in Southern California and events in Northern California, Seattle, New York and Washington, D.C.
Biden had to skip fundraisers in Atlanta, Nashville, Tenn., and Dallas, while Daley canceled an event in the nation's capital. Obama's fundraiser in New York at the home of film mogul Harvey Weinstein is expected to be rescheduled for this month, while Biden's events are being rescheduled for the fall.
Obama is keeping his schedule on Wednesday, attending fundraisers in Chicago to celebrate his birthday, including a concert with Chicago natives Herbie Hancock and Jennifer Hudson and the Chicago rock band OK Go. Obama turns 50 on Thursday.
Republicans have accused the president of emphasizing campaign money over governing, criticizing plans for the lavish birthday party.
"With 9.2 percent unemployment, he could work on creating jobs, but I suppose the White House is thinking he should stick to the part of his job he really likes," Republican National Committee spokeswoman Kirsten Kukowski said.
As part of Obama's birthday events, Democratic officials and campaign aides are fanning out across the country for fundraisers: former White House press secretary Robert Gibbs and deputy campaign manager Jen O'Malley Dillon will be in Boston, White House adviser David Plouffe will be in Tampa, Fla., New York Gov. Andrew Cuomo will headline a New York City event and Obama campaign adviser David Axelrod will be in Los Angeles. Other events with Democratic surrogates will be held in Austin, Texas; Oakland, Calif.; and Washington, D.C.
Besides the birthday fundraisers, the campaign is planning hundreds of house parties around the country and has asked supporters to recruit 50 new supporters for the president's birthday.
(AP Photo/Carolyn Kaster)
An Illinois Appellate Court has upheld a Sangamon County judge's ruling, preventing the state from moving ahead with new health insurance contracts for state employees and retirees.
In June, a Sangamon County Circuit Judge prevented Illinois' Department of Healthcare and Family Services from dropping Urbana-based Health Alliance, leaving the health insurance policies of thousands of state workers into doubt.
Gov. Pat Quinn's administration argued the so-called 'open access' plans will save the state about $100 million a year. Health Alliance then filed suit. The 90-day extensions of current contracts granted by the Commission on Government Forecasting and Accountability are set to expire in September.
In its ruling, the 4th District Appellate Court said the state ignored a decision by that group. Champaign Senator Mike Frerichs is part of the bipartisan legislative commission. While the court's decision does not immediately impact state workers, he said it gives more fuel to additional extensions, and hopefully a long-term solution.
"I think what employees want is to be able to continue access to their health care providers, and I'm hopeful this ruling will help us get to that point," Frerichs said.
In a statement, Health Alliance CEO Jeff Ingrum called the court's ruling encouraging, with hopes that it leads to the provider remaining an option for state workers and retirees.
"This is good news for all of those who fought so hard to keep Health Alliance," Ingrum said. "We hope it leads to Health Alliance remaining an option for state workers and retirees."
The Department of Healthcare and Family Services said the state is reviewing its legal options following the court ruling.
"We remain confident in the process of awarding and contracting with the winning vendors as well as their ability to offer quality healthcare at a price that will save the state money during these tough fiscal times," said Mike Claffey, spokesman for the Department of Healthcare and Family Services.
At a COGFA hearing scheduled for Aug. 16 in Chicago, the panel will vote on extending the current insurance contracts through June 30, 2012. Three days later, the state will argue before the Sangamon County Judge that blocked the new contracts whether COGFA has the authority to extend the current ones.
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