ADM
(Seth Perlman/AP)
September 24, 2013

ADM Looking To Move Longtime Headquarters

Agribusiness giant Archer Daniels Midland Company says that after 44 years in Decatur, it is looking for a new location for its headquarters.

ADM CEO Patricia Woertz said in a news release Monday that the company needs what she called a global center with better access to customers and other employees around the world.

 “Our company is growing and becoming more global and more customer-centric,” Woertz said. “To continue to succeed, we need a global center in a location that allows us to travel and work efficiently with customers and employees throughout the world. We also need an environment where we can attract and retain employees with diverse skills, and where family members can find ample career opportunities.

 ”The company will not discuss details about where it might relocate, but a spokesperson said the move may happen next year.

"As you can imagine, this takes some time," said ADM spokesman David Weintraub. "It's probably going to be sometime in 2014."

 ADM said the new headquarters would have about 200 employees, half of which are re-located from Decatur and half created as part of a new IT tech center. Meanwhile, the company would keep 4,400 other workers in Decatur. It does not plan any layoffs.

Still, Craig Coil, the president of the Economic Development Corporation for Decatur and Macon County, said ADM’s announcement is disappointing.

“This is kind of just one more day in the life of economic development in Illinois, and you just deal with it and take advantage of the opportunities that are presented to you and just adjust to the things that are not as pleasing,” Coil said. "ADM is still going to be our number one employer and we're positive about the long-term presence of ADM in Decatur, but having the corporate flag somewhere else does hurt."

“To ensure that Decatur remains a strong and vibrant community for years to come, we are also announcing today several multi-year financial commitments," Woertz added. "We are investing in Decatur’s economic development to help ensure it flourishes economically, in its schools to foster a strong workforce pipeline, and in critical social services to enhance the quality of community life."

Chicago officials say ADM is considering their city as a new location for its global headquarters. City Spokesman Tom Alexander said Monday that ADM is a dynamic global company and would be a good fit with Chicago. He said officials will do their best to keep ADM in Illinois.

Gov. Pat Quinn's spokeswoman said she does not know if ADM has asked for any incentives to keep its headquarters in Illinois. She said the governor met with ADM executives last week, where officials expressed an interest in moving the operation to a more urban setting.

ADM is No. 27 on the Fortune 500. It is the largest employer in Decatur.


September 20, 2013

BlackBerry To Lay Off 4,500 Employees

BlackBerry says it will lay off 4,500 employees, or 40 percent of its global workforce, as it reports a nearly $1 billion second-quarter loss in a surprise early release of earnings results.

The stock dropped 19 percent to $8.50 after reopening for trading. Shares had been halted pending the news.

BlackBerry had been scheduled to release earnings next week. But the Canadian company said late Friday afternoon it expects a loss of about $950 million to $995 million for the quarter, including a massive inventory charge due to increasing market competition.

The BlackBerry, pioneered in 1999, was the dominant smartphone for on-the-go business people and other customers before Apple debuted the iPhone in 2007. Since then, BlackBerry Ltd. has been hammered by competition from the iPhone as well as Android-based rivals like Samsung.


September 19, 2013

Ill. Unemployment Remains At 9.2 Percent In August

The unemployment rate was unchanged at 9.2 percent in Illinois last month. That's one of the country's highest jobless rates.

The Illinois Department of Employment Security says Thursday that the state added 5,600 jobs in the educational and health services sector in August. But Illinois lost a net 4,100 construction jobs.

Employment Security Director Jay Rowell pointed out that even without a drop in the unemployment rate the state still added a net 5,900 private-sector jobs for the month. Government employers actually cut a net 1,100 jobs in August.

The federal government said earlier this month that the national unemployment rate for August was 7.3 percent.


Workers prepare orders to be loaded for shipment at a UPS Healthcare Supply Chain and Distribution Center in Atlanta on March 12. The company recently announced that it would no longer offer coverage for spouses who had their own job-based insurance.
(Robin Nelson/Bloomberg via Getty Images)
September 19, 2013

Employers Trim Health Costs By Cutting Coverage For Spouses

When UPS told workers that it would no longer offer health coverage for spouses who had their own job-based insurance, it caused a big stir. But the shipping giant has plenty of company.

So many employers are trying to cut back on health coverage for spouses that it has become a trend. The practice began well before the Affordable Care Act passed, and the connection to the law, in some cases, isn't that direct.

About 12 percent of employers have this provision in their policies, says Tracy Watts, who heads the health care reform team at Mercer, a benefits consulting firm.

Mercer surveyed employers who have some sort of restriction on health coverage of spouses, and found that about half of those employers, or 6 percent, have imposed a surcharge for spouses who could get coverage at their own jobs.

"The other 6 percent exclude spouses who have coverage elsewhere," Watts says. That's the approach UPS is taking.

So is the University of Virginia. Susan Carkeek, the university's head of human resources, says the decision was mostly about simple arithmetic.

"When medical expenses go up, which they have for us, then we have two choices: We can either increase premiums, or we can reduce what we pay out in the way of benefits," Carkeek says.

Carkeek says the decision was tangentially related to the health law, because every company's health plan is going to pay some extra costs associated with new fees and other requirements next year. But the connection to the Affordable Care Act is slight.

"The tendency has been to attribute all these changes to the ACA, but we would have been facing all of these changes anyway," she says.

And why are employers targeting coverage of spouses in particular?

"Spouses cost more [than the employees]," Watts says. "They cost about $1,500 a year more."

It's not entirely clear why, but generally spouses covered on employer plans are either wives who are younger and have maternity claims, or husbands who are older and have chronic conditions.

"Women incur more claims when they are younger, and men tend to incur more claims when they are older," Watts says.

Employers have known this for a while, and the idea of charging workers more to cover their spouses is hardly new, says Julie Stone, a consultant with the benefits firm Towers Watson.

"A decade ago a number of employers were looking at spouse surcharges for employee spouses who declined coverage with their employer," she says.

Stone says the idea lost popularity for a while, but now it's making a comeback. She says there's actually a quirk in the health law that allows for it.

"Employers are not required to offer spouses coverage at all," Stone says. "They're required to offer dependent children, but not spouses."

But she says a wholesale dropping of coverage for spouses — even if those spouses could now get coverage through the new health care exchanges — isn't what seems to be happening.

"We're not seeing employers saying, 'I'm not going to change my plan rules, and I'm not going to cover spouses,' " she says. "The surcharge and the concept of a penalty for spouses who choose to opt out of their own employer coverage — that's not related to the health care reform law at all."

The bottom line, say benefit experts, is that with health costs continuing to rise, employers are trying to make sure they're running their health benefits programs as leanly as possible. And, for some, that means, not paying the claims of other employers' workers.

Listen

JPMorgan Chase
(Timur Emek/AP)
September 19, 2013

Whale Of A Fine: JPMorgan Chase To Pay $920M In Penalties

JPMorgan Chase has agreed to acknowledge that it violated federal securities laws and will pay $920 million in penalties assessed by regulators in the U.S. and U.K. to settle charges related to the huge trading losses racked up by its London traders last year, the Securities and Exchange Commission announced Thursday morning.

As we wrote earlier this week when word of the pending settlement first emerged, this all:

"revolves around an investigation from across the federal government and the globe over trading losses, first announced in May, that have ballooned to more than $6 billion. Regulators including the Securities and Exchange Commission and the Office of the Comptroller of the Currency allege that JPMorgan had inadequate risk controls in place when traders made complex derivative bets that ultimately led to the losses.

"Last month, two traders were charged with covering up the losses. The U.K. trader who placed the bad bets, Bruno Iksil, became known as the 'London Whale' because of the large size of the trades he made for the company's London office. Iksil is now cooperating with authorities and is likely to avoid prosecution."

Now, according to the SEC:

"JPMorgan has agreed to settle the SEC's charges by paying a $200 million penalty, admitting the facts underlying the SEC's charges, and publicly acknowledging that it violated the federal securities laws. ...

"As part of a coordinated global settlement, three other agencies also announced settlements with JPMorgan today: the U.K. Financial Conduct Authority, the Federal Reserve, and the Office of the Comptroller of the Currency. JPMorgan will pay a total of approximately $920 million in penalties in these actions by the SEC and the other agencies."

In a statement, JPMorgan says:

"The settlements are a major step in the firm's ongoing efforts to put these issues behind it. The Company cooperated extensively with each of these inquiries, and continues to cooperate with ongoing inquiries, including the prosecutions of the two former CIO employees.

"Jamie Dimon, Chairman and Chief Executive Officer, said: 'We have accepted responsibility and acknowledged our mistakes from the start, and we have learned from them and worked to fix them. We will continue to strive towards being considered the best bank - across all measures - not only by our shareholders and customers, but also by our regulators. Since these losses occurred, we have made numerous changes that have made us a stronger, smarter, better Company.' "

In the second quarter of 2013, JPMorgan reported net income of $6.5 billion.

Related: The New Yorker looks at "Why The JPMorgan Settlement Falls Short."


A Starbucks customer — gun on his hip and drink in his hand — watches a rally by gun control advocates, in Seattle in 2010.
(Elaine Thompson/AP)
September 18, 2013

No Guns Please, Starbucks Tells Customers

With the coffee giant caught in the middle of what he says is an "increasingly uncivil and, in some cases, even threatening" debate, Starbucks CEO Howard Schultz has posted a letter to "fellow Americans" asking that they not bring guns into Starbucks' shops.

Schultz writes that:

"Our company's longstanding approach to 'open carry' has been to follow local laws: we permit it in states where allowed and we prohibit it in states where these laws don't exist. We have chosen this approach because we believe our store partners should not be put in the uncomfortable position of requiring customers to disarm or leave our stores. We believe that gun policy should be addressed by government and law enforcement — not by Starbucks and our store partners.

"Recently, however, we've seen the 'open carry' debate become increasingly uncivil and, in some cases, even threatening. Pro-gun activists have used our stores as a political stage for media events misleadingly called 'Starbucks Appreciation Days' that disingenuously portray Starbucks as a champion of 'open carry.' To be clear: we do not want these events in our stores. Some anti-gun activists have also played a role in ratcheting up the rhetoric and friction, including soliciting and confronting our customers and partners.

"For these reasons, today we are respectfully requesting that customers no longer bring firearms into our stores or outdoor seating areas—even in states where 'open carry' is permitted — unless they are authorized law enforcement personnel."

Time writes that "while the company is planning to run ads in major U.S. newspapers on Thursday asking customers to avoid bringing guns into the store, Schultz says no official ban will be instituted."

Baristas apparently won't try to deny service to gun-carrying customers and won't ask them to go elsewhere. The Associated Press says it was "provided a picture of a memo to Starbucks employees on Tuesday. Partners are instructed not to confront customers or ask them to leave solely for carrying a weapon."

National Journal wrote back in August about how thousands of customers were planning to bring their guns along for a "Starbucks Appreciation Day." Several posters on the "Starbucks Appreciation Day" Facebook page are upset about the new policy.

The AP notes that "several companies do not allow firearms in their stores ... apparently with little trouble. Representatives for Peet's Coffee & Tea and Whole Foods, for example, said there haven't been any problems with enforcing their gun bans."

An earlier post: No Smoking Outside Starbucks Shops Starting Saturday


A cornfield is shrouded in mist at sunrise in rural Springfield, Neb.
(Nati Harnik/AP)
September 17, 2013

American Farmers Say They Feed The World, But Do They?

When critics of industrial agriculture complain that today's food production is too big and too dependent on pesticides, that it damages the environment and delivers mediocre food, there's a line that farmers offer in response: We're feeding the world.

It's high-tech agriculture's claim to the moral high ground. Farmers say they farm the way they do to produce food as efficiently as possible to feed the world.

Charlie Arnot, a former public relations executive for food and farming companies, now CEO of the Center for Food Integrity, says it's more than just a debating point. "U.S. farmers have a tremendous sense of pride in the fact that they've been able to help feed the world," he says.

That phrase showed up, for instance, a few weeks ago at a big farm convention in Decatur, Ill. The seed and chemical company DuPont set up a wall with a question printed at the top in big capital letters: "How are you making a difference to feed the world?"

The company invited people to answer that question, and thousands of them did. They wrote things like "raising cattle," "growing corn and beans," "plant as much as possible."

Kip Tom, who grows corn and soybeans on thousands of acres of Indiana farmland, says he's very aware of the fact that the world has more and more people, demanding more food. Yet there are fewer and fewer farmers, "and it's the duty of those of us who are left in the business, us family farmers, to help feed that world."

That means growing more food per acre, he says, which requires new and better technology: genetically engineered seed, for instance, or pesticides.

And this is why the words "feed the world" grate on the nerves of people who believe that large-scale, technology-driven agriculture is bad for the environment and often bad for people.

Margaret Mellon, a scientist with the environmental advocacy group Union of Concerned Scientists, recently wrote an essay in which she confessed to developing an allergy to that phrase. "If there's a controversy, the show-stopper is supposed to be, 'We have to use pesticides, or we won't be able to feed the world!' " she says.

Mellon says it's time to set that idea aside. It doesn't answer the concerns that people have about modern agriculture — and it's not even true.

American-style farming doesn't really grow food for hungry people, she says. Forty percent of the biggest crop — corn — goes into fuel for cars. Most of the second-biggest crop — soybeans — is fed to animals.

Growing more grain isn't the solution to hunger anyway, she says. If you're really trying to solve that problem, there's a long list of other steps that are much more important. "We need to empower women; we need to raise incomes; we need infrastructure in the developing world; we need the ability to get food to market without spoiling."

It seemed that this dispute needed a referee. So I called Christopher Barrett, an economist at Cornell University who studies international agriculture and poverty.

"They're both right," he said, chuckling. "Sometimes the opposite of a truth isn't a falsehood, but another truth, right?"

It's true, he says, that bigger harvests in the U.S. tend to make food more affordable around the world, and "lower food prices are a good thing for poor people."

For instance, Chinese pigs are growing fat on cheap soybean meal grown by farmers in the U.S. and Brazil, and that's one reason why hundreds of millions of people in China are eating much better than a generation ago. They can afford to buy pork. So American farmers who grow soybeans are justified in saying that they help feed the world.

But Mellon is right, too, Barrett says. The big crops that American farmers send abroad don't provide the vitamins and minerals that billions of people need most. So if the U.S. exports lots of corn, driving down the cost of cornmeal, "it induces poor families to buy lots of cornmeal, and to buy less in the way of leafy green vegetables, or milk," that have the key nutrients. In this case, you're feeding the world, but not solving the nutrition problems.

Arnot, from the Center for Food Integrity, recently did a survey, asking consumers whether they think the U.S. even has a responsibility to provide food to the rest of the world. Only 13 percent of these consumers strongly agreed.

In focus groups, many people said that if feeding the world means more industrial-scale farming, they're not comfortable with it.

This is not a message farmers like to hear. "It is a real sense of frustration for farmers that 'feeding the world' is no longer a message that resonates with the American public," Arnot says.

He tells farm groups that they'll have to find another message. They'll need to show that the way they grow food is consistent with the values of American consumers.

Listen

September 16, 2013

Urbana Approves Sales Tax Hike

On Monday night, the Urbana City Council approved a plan to raise the city's sales tax by a quarter of a percent, bringing it to 9 percent, just below Chicago and in line with Champaign.

Alderman Charlie Smyth said if the city did not do this, then it would have to find other ways to address rising costs

“Unless we are willing to cut people - that’s police, fire, and public works – we don’t have any choice but to come up with the funds to meet payroll, pension, and healthcare cost,” Smyth said.

Urbana Mayor Laurel Prussing has maintained that the higher tax is needed to make up a nearly million-dollar budget shortfall created by Carle Foundation Hospital’s tax exempt status.

Alderwoman Carol Ammons has raised concerns about increasing the sales tax, but she came out in support of it. However she says any effort to raise property taxes would be a step too far.

“When you don’t have money, sometimes you do have to cut some services,” Ammons said. “Sometimes you do have to skill back. Urbana does not like to do that, but we can’t take that off the table and continue to raise taxes over and over again.”

The lone ‘no’ vote on the tax proposal came from Alderman Michael P. Madigan. He said the city should instead find areas in the budget to make cuts.

“It’s almost like Chinese water torcher. I don’t know how to explain it,” Madigan said. “One fee on top of another, one tax on top of another. This year alone, the city council has raised numerous fees because the cost of service keep going up.”

Meanwhile, in an interview with Illinois Public Media a few hours before the vote, Laura Weis, the president and CEO of the Champaign County Chamber of Commerce, urged the city not to raise the sales tax.

“I think the more our municipalities continue to raise tax and fees on the residence and on the business community, the bigger the message that we are sending that we’re not open to business growth,” Weis said.

The increased sales tax takes effect in January. It does not apply to prescription medications and groceries, and big-ticket items, like cars.


Chipotle Mexican Grill launched The Scarecrow, an arcade-style adventure game for iPhone, iPad and iPod touch.
(Business Wire)
September 13, 2013

Taking Down Big Food Is The Name Of Chipotle's New Game

Chipotle Mexican Grill prides itself on the fact that it serves only "responsibly raised beef, pork and chicken."

That means the meat it buys comes from animals raised outside or in comfy pens, who are never given antibiotics and are fed an additive-free, vegetarian diet.

Sourcing that meat is getting harder as the chain has expanded to more than 1,500 stores. But the strategy of marketing itself as a fast food alternative to Big Food has clearly worked well for Chipotle.

Now Chipotle is betting that it can sell even more burritos by lambasting the Big Food companies that drug animals in the name of profit. That's the message of a new short film and game the company launched Thursday that takes a cue from advocacy films like The Meatrix.

As the short film, The Scarecrow, opens, we see a spindly scarecrow entering the monolithic factory of "Crow Foods Incorporated," where conveyor belts ferry boxes of "100% Beef-ish" and eggs and chicken dubiously labeled "all-natural." Through the cracks of a factory wall, the scarecrow spies chickens being injected with growth promoters. Inside a sky-scraping tower, he finds cows trapped in boxes staring blankly as they're pumped with something.

The soundtrack for this dystopian scene is Fiona Apple crooning the song "Pure Imagination" from the 1971 film classic Willy Wonka and the Chocolate Factory.

 

 

The dejected scarecrow rides home on the subway, and sees an ad and then a billboard for "farm fresh" Crow Foods "feeding the world" as pernicious robotic crows flutter around.

But this scarecrow is a proactive fellow. Rather than eating this shameful food, he goes out to the garden and picks a bright red pepper (subtle, Chipotle). We see him cooking in his small kitchen, and then presto! Our sad little scarecrow has become a happy little street food vendor, selling fresh tacos out of red plastic baskets that look quite a lot like what you'll get at the Mexican chain.

Chipotle's gleaming, super-efficient stores and revenue of over $800 million are more Big Food than taco stand. (McDonalds was even an investor for a spell.) But the chain seems to want to show solidarity with the emerging class of entrepreneurial artisans making food from scratch. We're the good guys, fighting the bad guys, it whispers.

The film, created in partnership with Academy Award-winning Moonbot Studios, is meant "to help people better understand the difference between processed food and the real thing," says Mark Crumpacker, chief marketing officer at Chipotle, in a statement.

It's also a teaser for the game, which is available for free on iPhone and iPad, and is all about taking down Crow Foods. According to Chipotle, the game encourages players to "tilt and tap your way through four unique worlds to protect vulnerable veggies, rescue caged animals, and bring fresh food to the citizens of Plenty, all while dodging the menacing Crowbots." Players who earn enough "stars" get a buy-one, get-one-free offer redeemable at Chipotle store.

The game is, of course, fictional, and doesn't name any of the livestock producers that cage animals and pump them with growth promoters and antibiotics in real life. But the aspiration is clear: Chipotle and its customers are coming for you, Big Food.


NPR headquarters in Washington, D.C.
(Charles Dharapak/AP)
September 13, 2013

NPR To Offer Voluntary Buyouts In Bid To Balance Budget

Saying that the goal is to balance its budget in fiscal year 2015, NPR announced late Friday morning that it will soon offer "a voluntary buyout plan across the organization that reduces staffing levels by approximately 10 percent."

The organization now has 840 full- and part-time employees. The recent recession hit NPR and most other media outlets as contributors/advertisers scaled back their spending. NPR's financial future has also been complicated by discussions on Capitol Hill about scaling back or eliminating federal support for public broadcasting.

In a message to the staff, CEO Gary Knell and Kit Jensen (who chairs NPR's board of directors) said:

"As you know, NPR is working toward achieving a balanced budget in FY 2015. To this end, the board has approved a FY 2014 budget that is rooted in a long-term strategic roadmap that eliminates NPR's operating deficit within the next two years while giving NPR the flexibility to make strategic investments in high quality journalism, programming, digital innovation, and revenue-building initiatives. The budget we approved includes operating and investment revenues of $178.1 million, expenses of $183 million, and an operating cash deficit of $6.1 million, or 3 percent of revenues.

"The strategy and budget NPR management put forward addresses the deficit in a thoughtful way and makes continual investment in the highest quality of programming. The cornerstones of NPR's FY14 strategy rest on exceptional content, audience engagement and growth, strong collaborations in the public radio network, and a sustainable financial business model.

"As part of the strategy to eliminate the deficit and lower ongoing expenses, NPR will offer a voluntary buyout plan across the organization that reduces staffing levels by approximately 10 percent. Next week, Chief Administrative Officer Joyce Slocum will provide information about this process to staff. The strategy also includes investments in our digital future and revenue generating initiatives such as branded events."

Also in the message, NPR staff learned that:

"The board has appointed Paul Haaga, our vice chair, to serve as the acting president & CEO, effective Sept. 30. Paul will work closely with members of the board and the senior management team to guide the organization as we search for a permanent chief executive. Gary Knell will remain close to NPR over the coming months and will serve as an advisor to Paul through Dec. 31."

Knell announced last month that he's leaving NPR to become president and CEO at the National Geographic Society.

We'll have more about this later. NPR media correspondent David Folkenflik is working the story.

Update at 1:47 p.m. ET. Doing It In A "Respectful Way":

At a meeting with NPR staff, Knell says the goal has been to craft a buyout plan that reduces employment "in the most respectful way for our union and non-union staff alike."

Details will be coming, he says, but the broad outlines include:

— Those eligible must have been continuously employed by NPR for at least three years (he added that some employees with that much experience will be excluded from the offer).

— Those who accept the offer and are approved will receive "2 days pay per month of service" up to a maximum of 300 days.

Knell says the plan is "what I absolutely would be doing if I was staying here."

Update at 1:15 p.m. ET. David Folkenflik's Report.

David filed this for our Newscast Desk:

"The financial news came on a day when NPR also named a new acting CEO. Current CEO Gary Knell earlier announced his intention to take the top job at the National Geographic Society — he will be replaced by NPR board Vice Chairman Paul Haaga, a lawyer and retired chairman of the capital research and management company.

"The voluntary buyouts were prompted by NPR's needs to eliminate red ink. The not-for-profit company will run a 3 percent deficit on a budget of $183 million in the coming fiscal year.

"Philanthropic gifts and foundation grants have rebounded since the financial crisis and NPR says it's been the best year for both since the late Joan Kroc's gift of roughly $250 million a decade ago. But underwriting revenues from corporate spots have not."


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