Category Archives: Idaho

Business/Economics, Idaho, U.S.

What Economic Recovery? Idaho’s unemployed, and underemployed at record levels. More proof that college is a waste of money! And stop moving here, there are not enough jobs for you!

“It would scare the citizens to death and it would make the government look bad. The government wants to look as good as it can.”-Monte Munn, economics professor at Idaho’s Treasure Valley Community College

Munn is talking about the underemployment numbers, revealed in quarterly U-6 reports: “U-6 is a lot more accurate. U-3 greatly underestimates, or understates the real unemployment.”

Monthly unemployment numbers are called U-3, but underemployment is reported every quarter (along with the unemployment numbers) and is called U-6.

As far as the U-6 numbers go, the U.S. Bureau of Labor Statistics reports a seasonally adjusted October 2011 result of 16.2% for the whole country.  Idaho ranks in at 15.9% (according to overall 3rd quarter results)!

(The U.S. Bureau of Labor Statistics calls the ‘U’ measurments “Alternative Measures of Labor Underutilization”. Get it? ‘U’ for underutilization.)

Local Idaho media has been reporting fractional drops in a few monthly unemployment reports for 2011, but, when you look at the IDL’s U-6 yearly percentages, from 2008 to 2010, it’s clear both unemployment and underemployment have gone way up, and the few fractional monthly drops this year don’t mean a thing.

Underemployment numbers not only reveal how many people are working in jobs that don’t have benefits, or jobs that don’t match their level of education or training, but it also reveals the overall quality of jobs available.

The Idaho Department of Labor (IDL) admitted in a 2007 report, they can not count all college educated workers who’re underemployed, which means the actual numbers could be bigger: “…the number of employed job seekers with education who are looking for work is underestimated. Only those who have come through a Labor Department local office are counted, and clearly other employed workers with degrees are looking for better jobs but not through the Labor Department system.”-IDL, Measuring Underemployment in Idaho

 

Pocatello, Southeastern region of Idaho

The IDL just released U-6 data from 2008 to 2010.  By region South Central Idaho has a U-6 ranking of 20.8% making it the number one place for sucky jobs! Eastern Idaho comes in second at 18.3%!  Southeastern Idaho (where I live) joins North Idaho and North Central Idaho in the 14 percentile range.  Southwestern Idaho has the lowest U-6 at 11.7% (still bad).

The IDL even breaks it down by county, so if you want to see how bad your county is (and some counties have U-6 in the 20 percentile range!), then check it out for yourself.

An eastern Idaho TV station interviewed an IDL official, to get his take on why such high U-6 numbers. He blamed the high number of college edjumacated Idahoans, that right, too many highly qualified people living in Idaho: “…I think you would see more of our workers are underemployed, especially if they are zip code attached, where they want to stay here than to get paid more for their education elsewhere.”-Will Jenson, IDL economist

By “zip code attached” Jenson means Idahoans who go to college, find out they prefer the quality of life in Idaho and do not want to leave (I’m in that boat). However, there are very few jobs in Idaho that can pay enough to help you pay back the cost of your college degree.  The fact that there are so many highly educated people in Idaho should attract companies that need higher skilled workers, but, obviously from the U-6 numbers, it isn’t.

There’s another problem, that will eventually bring down the quality of life here in Idaho, people are flooding into the state.  According to the U.S. Census Bureau, the 2010 census count revealed that Idaho is the 4th fastest growing state in the country, at 21.1%.  Come on people, move somewhere else, there aren’t enough jobs here, let alone good paying jobs, for all you all.

As far as unemployed people getting unemployment help (insultingly called “benefits”!), according to the IDL, 11,800 Idahoans stopped receiving unemployment help this year.  Merry Xmas!

 

Business/Economics, Idaho, International, Technology, U.S.

Corporate Incompetence: Could demise of Hewlett Packard’s WebOS end hundreds of jobs in Idaho? HP in bed with Microsoft? We’ll find out in two weeks

“We should announce our decision in the next two weeks. This is not an easy decision, because we have a team of 600 people which is in limbo.”-Meg Whitman, CEO Hewlett Packard

French media interviewed Hewlett Packard’s latest CEO, Meg Whitman.  She says what they decide to do with their WebOS system will affect at least 600 HP employees.

Other media reports confirmed that 525 layoffs, made back in September, were the result of ending WebOS hardware production.  Since August the system has been up for sale, no takers so far.

It’s strange because as recently as July, Stephen DeWitt, head of the WebOS business unit, claimed that WebOS was so versatile that it could be used in a “universe of devices”.

What happened? Executives at HP have decided to use Microsoft’s Windows 8 operating system. In explaining the embracing of Windows 8 Whitman also explained why they canceled their number two selling tablet, the TouchPad: “Internet tablets are mainly used to consume media and e-mails. If you want to use productivity software such as Microsoft, you can not…This is an important area in which we want to go.”  “We stopped using the products that use the operating system WebOS. We will return in 2012. We will have an internet tablet that will use Microsoft Windows 8.”

The new HP tablet that runs on Window 8 is called Slate 2.

Whitman also talked about the high turnover of HP CEOs, and her plans with the company: “HP has had three CEOs in less than two years.  I’m here to stay. Even if my friend Mitt Romney becomes the next president of the United States, I will not join him in Washington.”  “We must invest more in storage, networks and servers to align ourselves with our competitors like EMC and Cisco. Our last server, which uses an ARM processor is more efficient in terms of energy consumption. We need these major innovations to differentiate ourselves.”

In November unnamed sources at HP’s, Boise, Idaho operations leaked word of more layoffs.  Between 3,000 and 4,000 people work at HP’s Boise facilities.  Could the demise of WebOS have anything to do with it?  According to the French newspaper, Le Figaro, Whitman said the world will find out in two weeks.

Business/Economics, Idaho, Technology, U.S.

Corporate Incompetence: Hewlett Packard gets downgraded, Idaho still waiting for official job layoffs announcement

“Major strategic reversals” is one reason why Standard & Poor’s just downgraded Hewlett Packard’s credit rating.

S&P’s also blamed HP’s inconsistent behavior: “We have concerns that HP’s inconsistent growth strategies and high levels of board of director and senior management turnover have elevated the level of operational and execution risk in the near term.”-Martha Toll-Reed, Standard & Poor’s

I’ve written about some of HP’s hypocritical behavior, like laying off hundreds of U.S. employees, buying back millions of dollars worth of their own stocks, then investing billions into their Taiwan operations, and hiring hundreds of employees in Taiwan.

Another dumb move was cancelling production of their TouchPad tablet. Turns out it was the number two selling tablet in the U.S.!

It’s been revealed that HP just spent U.S.$11.7 billion to buy a British software company called Autonomy.  $6 billion of that was in cash!!! Couldn’t HP have used that money to keep U.S. workers employed, or improve their products (they really need to)?

Back at the beginning of November someone at their Boise, Idaho, operation leaked that more layoffs were coming.  Officially HP is working on a press release to explain it. It’s the start of December now, and still no press release.

S&P’s has downgraded HP’s credit rating to BBB+.

Business/Economics, Idaho, U.S.

Voter Incompetence: Obama supporter blind to Obama’s stance on shutting down the U.S. Postal Service

At a recent Obama rally in Scranton, Pennsylvania, a blind faith Obama supporter asked the President about stopping postal processing center closings, because the closings would have drastic affects on local economies.

The response: “Let me look into it.”-Barack Obama, President of the United States

This is not a case of Obama not knowing the issue, rather it’s a case of Obama blowing off a blind faith supporter who doesn’t realize that Obama is all for the closings!

Back in September Obama issued his official suggestions for how to deal with the U.S. Postal Service (a self supporting service, does not rely on taxpayer funding).  Amazingly Obama’s suggestions are in line with what the Postmaster General, Patrick Donahoe, wants; things like ending Saturday delivery and closing down post offices and processing centers across the country.

Here’s how the blind faith supporter of Obama reacted to the President’s response: “…just his willingness to look into it spoke volumes to me. I could definitely tell he cared.”-Corey O’Brian, Lackawanna County Commissioner and blind faith supporter of Barack Obama

Here in southeastern Idaho the only processing center on this side of the state, in Pocatello, is targeted for closing.  Local postal workers explained to me that if I wanted to send a letter to Idaho Falls (just an hour’s drive from where I live) it would end up going to Salt Lake City, Utah, to be sent back into Idaho before getting to Idaho Falls!

The problem, for us ‘customers’ of the USPS, and for our local economies, is that whether Obama and the Postmaster General get their way, or the U.S. Congress actually comes up with their own plan, or, the U.S. Congress allows the USPS to default, the results are going to be severe: Thousands of postal workers laid off, post offices closed down, processing centers closed down, etc.  As I’ve said before, what economic recovery?  And stop being so blind to what ‘our’ elected officials are doing!!!

Business/Economics, Idaho, International, U.S.

What Economic Recovery? Is Hewlett Packard lying about investing in U.S. operations? Spends tens of billions of dollars in Taiwan, hires hundreds of Taiwanese while laying off hundreds of Americans

On November 25, the Taiwan government’s Ministry of Economic Affairs (MEA) recognized U.S. based Hewlett Packard (HP) as the number one foreign buyer of Taiwan made computer related products.

The MEA refused to give an exact dollar amount but said it was at least 10% more than what HP spent in 2010.  In 2010 HP spent U.S.$25 billion on Taiwanese products!

HP officials told the Taiwan media they plan on buying $30 billion worth of Taiwanese made products in the next two years.  On top of that they plan to hire hundreds of Taiwanese for their Taiwan operations.

This greatly contrasts with what Hewlett Packard is doing with it’s U.S. operations.  Slashing and burning operating budgets and laying off hundreds of U.S. employees.

In a recent interview, the new CEO of HP, Meg Whitman, said this: “We’re relatively pessimistic about the economic outlook in two of our three major regions. 2012 just looks tough to me.”

Apparently the United States is one of the two regions she’s pessimistic about, because that’s not what HP officials are saying about their Taiwan operations.  Several Taiwan media sources reported that HP officials feel very “upbeat” about the economic situation in Taiwan, and Asia in general.

In July HP bought back $10 billion of their own stocks, then laid off 500 U.S. employees in September.  At the beginning of November, news of more lay offs was leaked by people claiming to work at HP’s Boise, Idaho, factory.  Idaho media contacted HP and was told that a press release was in the works.  So far no press release.

 

 

 

Business/Economics, Idaho, International, Technology, U.S.

Global Economic War: Chinese owned Hoku about to start operations in Idaho. Will U.S. investigation into Chinese solar products put the brakes on Hoku’s operations?

“We believe the Department of Commence investigation will show that Chinese government and Chinese solar manufacturers are, and have been, engaged in illegal practices that threaten to decimate a vitally needed renewable energy industry.”-Gordon Brinser, SolarWorld Industries

After many problems affecting construction and causing long delays, on November 21, Hoku’s CEO, Scott Paul, announced they cleared a milestone in getting their Pocatello, Idaho, polysilicon factory up and running; connection to permanent electrical power supplied by Idaho Power.

Hoku also announced they will now be selling finished photovoltaic modules through a subsidiary called Tianwei Solar USA.  The finished products are made in China, by a company called Tianwei New Energy.  While Tianwei Solar USA is a subsidiary of Hoku Corporation, Hoku is actually a subsidiary of Tianwei New Energy, in China.

Now comes the U.S. Department of Commerce and the International Trade Commission.  They are investigating claims by seven U.S. based photovoltaic manufacturers, that Chinese based companies (like Tianwei, which controls Hoku) are breaking trade laws.

The International Trade Commission will render a decision around December 5.

Now comes China’s Ministry of Commerce.  In retaliation for the U.S. investigation into Chinese companies dumping their finished photovoltaic products on the U.S. market, the China Photovoltaic Industry Alliance claims the U.S. is dumping polysilicon at below cost prices in China!

So, Hoku’s polysilicon production for Chinese customers, mainly their majority owner Tianwei, is being threatened by an investigation by the Chinese government, AND, Hoku’s selling of Tianwei’s photovoltaic products is being threatened by an investigation by the U.S. government!

Hoku is trapped between a rock and a hard place.

WHAT ECONOMIC RECOVERY? HOKU, IDAHO, FINALLY TO START POLYSILICON PRODUCTION?

Business/Economics, Idaho, U.S.

What Economic Recovery? Corporate layoffs & stock market games, part of Corporate America’s stock buy back scheme. Hewlett-Packard case in point

“We’re relatively pessimistic about the economic outlook in two of our three major regions. 2012 just looks tough to me.”-Meg Whitman, new CEO of Hewlett-Packard

“It’s an extraordinarily unimaginative way to use money.”-Robert Reich, former U.S. Secretary of Labor

What’s the former U.S. Secretary of Labor talking about? Why Corporate America buying back its own stocks.  Companies are able to do this because they are not spending money on research and development, and, according to a New York Times article, it’s the real reason companies are still laying off employees. They’re using the money they would have paid for the labor to buy back company stocks.

In November employees at the Boise, Idaho, Hewlett-Packard (HP) factory reported that layoffs were in the works.  In July HP bought back U.S.$10 billion of their own stocks, then laid off 500 employees in September.  HP officials avoided directly answering questions about layoffs in Idaho by saying they were working on a “press release”.  It’s been a couple of weeks now and no press release.

A lot of problems are being created by the way Corporate America is buying back their stocks.  For one it artificially increases the value of their stocks:  “Unless earnings per share are adjusted to reflect the buyback, then to base a bonus on raw earnings per share is problematic. It doesn’t purely reflect performance.”-John L. Weinberg, University of Delaware

Number two, it’ll delay any economic recovery: “It’s a symptom of a deeper problem, which is a lack of investment in the long term. If we’re not investing in research, innovation and entrepreneurship, we’re going to be a slow growth country for a decade.”-William W. George, Harvard Business School

And thirdly, it’s increasing unemployment, which is only adding to the downward spiral of the economy.

On November 22, Meg Witman, former eBay CEO, former California Gubernatorial candidate, and new CEO of Hewlett-Packard, was questioned about HP’s huge cuts in R&D.  Here’s her response: “It’s not (return on investment) in year one or two. I think the investments we make in 2012 you’ll start to see in 2014 and 2015. I wish I could tell you differently but it’s not true. And you’re right. We cut out a lot of muscle in R&D at this company and we have to invest back in it. It’s a long term play. I will tell you, this management team, we are now building HP, we’re building it to last. We’re not building it for next month or next quarter. We are building this company to be great over the next decade. And you’ll see improvements every single year. You’ll be able to measure us on how we’re doing. But we’re making some long term bets here because we can’t continue to run this company for the short term.”

Knowing that the latest trend in Corporate America is buying back their own stock, at the expense of R&D and employment, is that what Whitman means when she says “…we’re making some long term bets…”?

Whitman’s answer is confusing.  Traditional economics tells you that investing in R&D is a long term “bet”.  Yet Whitman calls it “short term”. 

So is that what Whitman means when she says we should see returns on investment in 2014/2015?  The investment meaning buying back their own stocks?

Anyone who’s taken economics, or business courses should know that traditional investment into your own company means R&D; to come up with more efficient ways to produce products, or coming up with new products/services, better marketing, etc.  But it does not mean buying back your own stocks.

Perhaps stock buybacks are the real reason there are layoffs coming for HP’s Boise operation, and officials are still trying to come up with a good sounding reason for their forthcoming “press release”?

Hopefully, since Whitman just started her job as HP CEO, she’s talking about a return to traditional economics. Hopefully it’ll mean an end to HP’s stock buy backs and a return to putting money into R&D and employment, she did say: “We cut out a lot of muscle in R&D at this company and we have to invest back in it.” Oh well, wishful thinking.

 

Business/Economics, Idaho, U.S.

What Economic Recovery? Idaho farm tractors being stolen for scrap metal

“We’ve had a lot of scrap metal stolen. This is totally off the wall here.”– Jackie Morris, Power County Chief Deputy Sheriff

A farmer in American Falls, Idaho, had two old International tractors stolen right off his farm, in broad daylight.  Witnesses say they saw the tractors being hauled away on trailers pulled by pick up trucks.

The drivers of the pick ups were recognized as individuals who’re recently asking locals if they had any scrap metal they wanted to get rid of.

Farmers are being warned by law enforcement to inventory their farm equipment at least once per week.

 

Business/Economics, Idaho, Technology, U.S.

What Economic Recovery? Former HP employee, and MBA holder, finds new job by NOT talking about his college education

“Nobody ever thinks, ‘Hey, I’m having trouble getting a job now.  Let me go get this extra degree and I’m sure I’ll still have trouble.’”-Nathan Bussey

In 2008, Idahoan Nathan Bussey lost his coveted job with Hewlett-Packard.  He used the unexpected time off to get an MBA.

Forget the rhetoric coming out of Corporate America, that they can’t find “qualified” applicants, Bussey discovered that having a college degree actually hurt his chances of getting a job.   That’s because the only jobs available don’t really require college.

This year Bussey took a job with a dreaded call center.  He did not tell them about his MBA, because it would’ve hurt his chances for getting hired.  He’s getting paid much less than when he was working for HP, but he and his wife are desperate: “We have no savings anymore. If something happened, if one of us got hurt or sick, we certainly would be in a much worse situation now.  We’ve used our buffer.  That rainy day fund is now gone.”

 

 

Business/Economics, Idaho, U.S.

What Economic Recovery? Idaho’s Coldwater Creek continues its fall, but, is this a case of buy low now, and if Coldwater Creek recovers, you can sell high?

“Coldwater Creek (NASDAQ:CWTR) is one of today’s worst performing low-priced stocks…”-Adrienne Chilton, analyst

The month of October and November was so bad for the Idaho company that, maybe, it should be put out of its misery.

During the second week of November, there were reports that Coldwater Creek could be delisted from the NASDAQ.  That’s because in the second half of October their stock price dropped to just a little more than .90 cents per share.  At the begining of November, Coldwater Creek was downgraded to “underperform” by Zacks Investment Research Analysts.

By the end of  the first week of November their stock price jumped back over $1.10.  But more bad news.  By the second half of November their stock price is now below .90 cents; as of November 23 it was trading at .88 cents per share.

Things are so desperate that in a move to motivate investors, and maybe keep from getting delisted, the CEO of Coldwater Creek, Dennis Pence, bought U.S.$7 million worth of his own company’s stock.

At around .90 cents per share that’s a heck of a lot of stocks!

Pence claims this is a case of buy low, sell high.  He claims he still believes in the company and is sure they will turn things around.  If he’s right investors could make a killing.  One analyst thinks investors could end up with a 200%-500% return, over three years!  But that’s assuming a $60 million improvement in Coldwater Creek’s expenses and operating income performance.

The anonymous analyst, going by the nom de plume Violent Capitalist, also admits: “…this is a very very risky investment…”

Another analyst, with the nom de plume of Pimlico, responded to the buy low, sell high sales pitch with: “This one really looks doomed. I have rarely seen shareholder equity decelerate as quicky as I have with this one.”

Investors should wait until November 30, when Coldwater Creek will report its 3rd quarter earnings.  Most analysts surveyed are predicting negative earnings.

Of interest, for the past four months, analysts have advised stock holders to “hold” onto their Coldwater Creek shares (as reported by Reuters). Is there hope?