Kansas.com: Business

The push is on for cellulosic ethanol

RICK PLUMLEE — Sun, 23 Nov 2008 02:19 CST

FEDERAL MANDATES, FINANCIAL SUPPORT

Long before cellulosic ethanol became a hot biofuel topic, Doug Rivers was deep into researching the product. From the late 1970s to the mid-1980s, Rivers worked for Gulf Oil for three years and the University of Arkansas for five years researching ways to make it economically feasible to produce cellulosic ethanol on a commercial scale.

"We were reasonably close when the bottom fell out of the oil market in the early 1980s," Rivers said. "Funding for the research fell off the table."

That's been the story of cellulosic ethanol -- dating back to the first attempt at the product in 1898 by Germany.

It's tough work to get it out of the lab and into the gas tanks, and even tougher to maintain a steady flow of funding for research support.

Emprise, CornerBank end merger talks

JERRY SIEBENMARK — Sat, 22 Nov 2008 01:38 CST

There were a number of reasons why Emprise Bank and CornerBank called off merger discussions Friday, including the value of CornerBank, officials said.

Bruce Schwyhart, CornerBank's chief executive, said a potential loss of jobs among his Winfield-based bank's employees was another reason the talks ended.

"That was an impact as well, that we wanted to consider," Schwyhart said Friday.

The banks announced last month that they had started formal merger talks.

If successful, Emprise would have been the successor bank in the merger and would have added seven branches and expanded its presence from south of Wichita to the Oklahoma line.

NY FED CHIEF'S NAME LEAKED AS SECRETARY

TIM PARADIS AND SARA LEPRO — Sat, 22 Nov 2008 01:38 CST

New York Federal Reserve Bank President Timothy Geithner is expected to be President-elect Barack Obama's choice to head the Treasury Department. Reports of his selection sent stocks soaring at the close of trading Friday.

The Dow Jones industrial average, which had broken even for the day until news of the nomination leaked about an hour before the close, finished 494 points higher, a rally of more than 6 ½ percent.

The outbreak of buying pushed the Dow above 8,000.

In the two previous days, the Dow had lost 873 points, more than 10 percent of its value, and the broader Standard & Poor's 500 index had sunk to its lowest level since 1997.

The turnaround came when word reached Wall Street that Obama was likely to nominate Geithner, 47, for treasury secretary. Geithner would assume top responsibility for tackling what threatens to be the deepest recession in a generation.

More job cuts? No certainties at Hawker

MOLLY MCMILLIN — Sat, 22 Nov 2008 01:38 CST

With all the economic uncertainty, Hawker Beechcraft's chairman and chief executive Jim Schuster said the company is taking it quarter by quarter.

Hawker Beechcraft cut about 490 jobs earlier this month as it adjusts production because of the worldwide economic decline.

Schuster can't say whether there will be more to come.

"No one, whether they're the president of a country or a president of a company... feels a sense of certainty about what's going to happen," said Schuster, who announced Thursday that he will retire. He said he'll stay with the company until his replacement is found. "We're managing the company right now almost in phases."

Hawker Beechcraft will continue to assess the market after each financial quarter, he said. If there's a sense the economy is picking up, "we'll hold our ground."

Hawker CEO Schuster announces retirement

MOLLY MCMILLIN — Fri, 21 Nov 2008 01:39 CST

The 55-year-old will stay till new CEO is chosen

Hawker Beechcraft chairman and chief executive Jim Schuster said Thursday that he will retire from the position he's held for nearly eight years.

Schuster, 55, will continue to lead the company until a successor is named "regardless of how much time it takes," he said.

"My heart's in the game, my head's in the game, and I'm excited to see us through the fourth quarter and next year if necessary," he said.

But he said retirement is something he's been thinking about for a long time. He wants to take a break and do "all the fun things I've put off with my family" before deciding what he'll do next.

LodgeWorks to open upscale hotels

DAN VOORHIS — Fri, 21 Nov 2008 01:39 CST

While the credit crisis may have slowed a lot of companies, one Wichita company is set to expand at a rapid clip.

LodgeWorks plans to open four luxury boutique hotels and five other hotels in 2009.

The first Avia boutique hotel will open in January in Savannah, Ga. Others will open in Long Beach, Calif.; Napa, Calif.; and the Houston area during the year.

LodgeWorks secured funding for the hotels before credit markets tightened, said chief executive Tony Isaac.

"We're really lucky," Isaac said. "We were able to get most of the (projects in the) pipeline financed before the slowdown."

Steve & Barry's plans liquidation

EMI ENDO — Fri, 21 Nov 2008 01:39 CST

Retailer Steve & Barry's has filed for bankruptcy protection and will go out of business, according to a court filing released Thursday.

The Port Washington, N.Y.-based chain, which has more than 5,000 employees, will liquidate its stores by early 2009. Steve & Barry's has a store at Towne East Square in Wichita.

Affiliates of the company's new owners, who bought the ailing clothing retailer out of bankruptcy in August, filed for Chapter 11 bankruptcy protection Wednesday in Manhattan.

Disappointing sales, amid the retail slump and greater economic slowdown, have made it difficult for the owners to get financing to continue operations, according to the filing.

"The appropriate course of action to maximize value for the benefit of all their stakeholders is an orderly liquidation," the filing said. The liquidation is scheduled to be completed by the end of the year or early next year.

Economist blames Fed for downturn

JERRY SIEBENMARK — Fri, 21 Nov 2008 01:39 CST

A former Federal Reserve governor speaking to a group of certified public accountants Thursday was critical of the actions taken by former Fed Chairman Alan Greenspan and Treasury Secretary Henry Paulson.

Wayne Angell, a Kansas native who served on the Federal Reserve Board from 1986 to 1994, said Greenspan played a role in creating the housing bubble through monetary policy.

"One of the first conversations I had with Alan Greenspan was the Hippocratic Oath and the mantra to do no harm," said Angell, who is also a former chief economist at Bear Stearns. "But harm he did."

He said the Fed's move to bring the Federal Funds Rate to 1 percent in 2003 and keep it there until mid-2004 precipitated the housing bubble because there was no house price deflation.

Angell, who was born in Liberal and served three terms as a state legislator in the 1960s, was the keynote speaker at the Kansas Society of CPAs annual tax conference at the Wichita Airport Hilton.

Stocks drop, but volume sees a spike

TIM PARADIS AND SARA LEPRO — Fri, 21 Nov 2008 01:39 CST

Stocks plunged for a second straight day Thursday, falling to levels not seen in at least five years, as financial and energy stocks tumbled while demand for the safety of government debt spiked.

Wall Street saw the most intense selling late in the session after hopes faded that lawmakers would quickly assemble an aid package for U.S. automakers, and as the Standard & Poor's 500 index broke through lows established in 2002. That breach of a key technical threshold sent a shudder through the market and touched off further selling.

The S&P 500 index fell 6.7 percent to its lowest close since April 1997. The Dow Jones industrial average fell 445 points, or 5.6 percent, to its lowest close since March 2003. The decline brings the Dow's two-day drop to 873 points, or 10.6 percent, its worst two-day percentage loss since October 1987.

Financial stocks plunged on worries that the government's financial rescue won't be sufficient to cover banks' losses. Meanwhile, a sharp drop in oil prices weighed heavily on energy companies.

Thursday's pullback came amid heavy volume, a welcome sign for some investors who are looking for the market to experience a cathartic sell-off that could lay the groundwork for a recovery. Heavier volume can signal investors are scared enough to sell rather than simply sit on the sidelines, which can result in relatively light volume.

Wichita-area housing 'looks pretty good'

BILL WILSON — Thu, 20 Nov 2008 06:35 CST

The Wichita Metropolitan Statistical Area is the fourth-best in the nation for home price appreciation, according to a study released by the National Association of Realtors.

Wichita's third-quarter 2008 median price of $125,300 was up 5.5 percent, ranking the area behind Elmira, N.Y., Decatur, Ill., and Bloomington-Normal, Ill.

The reason: Housing markets with good economies produce steady but slow price appreciation to top the list, said NAR spokesman Walter Molony and Stan Longhofer, director of Wichita State's Center for Real Estate.

"The strongest price gains tend to be in affordable markets with healthy economies," Molony said. "A lot of mid-section American areas."

That's the case in Wichita, Longhofer said. Years of steady home price appreciation have blended with a shift in buyer demographics toward upscale housing.

RV Products shuts down until January

DAN VOORHIS — Thu, 20 Nov 2008 06:35 CST

Wichita-based RV Products will shut down production for six weeks because of economic conditions.

The company, at 3050 N. St. Francis, makes heaters and air conditioners for the recreational vehicle industry.

The shutdown affects 161 workers. Their last day will be Friday, and they are scheduled to return to work Jan. 5. They will not be paid during the shutdown but will retain benefits.

Another 45 office and service employees will remain at work.

The company has trimmed 50 employees from its work force since January.

Firms slow hiring but plan ahead to account for the future

JERRY SIEBENMARK — Thu, 20 Nov 2008 06:04 CST

A few years ago, stagnant enrollment in college accounting programs prompted concerns by accounting firms that there wouldn't be enough graduates to meet industry demand.

Today, the concerns aren't as prominent.

An economic slowdown means some accounting firms are slowing their recruiting and hiring of interns.

Others are laying off staff.

"That's the nature of the way it works," said Paul Allen, chief executive of Allen, Gibbs & Houlik, the area's largest certified public accounting firm. "We get kids started in that major. Suddenly, about the time graduation numbers come up, hiring is down."

Oil deliveries dip 5% for year

RICK PLUMLEE — Thu, 20 Nov 2008 01:39 CST

Total U.S. petroleum deliveries fell from January through October at a rate not seen since the recession years of the early 1980s.

Deliveries dropped 5 percent over that period. October deliveries alone fell 4 percent.

A report released Wednesday by the American Petroleum Institute also said total domestic deliveries -- a measure of demand -- averaged just 19.6 million barrels per day for the January-to-October period for the lowest average since 2000.

API statistics manager Ron Planting blamed high gas prices during much of 2008 and economic uncertainty for putting a "damper on demand."

However, falling gas prices at the pump may alter that trend. Americans used about 100,000 more barrels of gas a day last week than they did the previous week, according to a MasterCard Spending Pulse report.

Delayed payments pinch GM dealers

JERRY SIEBENMARK — Thu, 20 Nov 2008 01:39 CST

Area General Motors dealers said this week that they will feel some effect from GM's plan to delay reimbursement to dealers for rebates and other sales incentives.

But dealers such as Jim Hattan said the temporary delay won't have a huge impact.

"Of course that will hurt cash flow a little bit but if that's what it takes for them to get healthy then I'm all for it," said Hattan, president of Don Hattan Chevrolet in Park City.

Earlier this week GM said payments due Nov. 28 will be delayed for two weeks until Dec. 11, while those due Dec. 4 will be paid Dec. 18.

The normal weekly schedule will resume after that, a GM spokesman said.

Quik Trip to drop car washes, expand stores

BILL WILSON — Wed, 19 Nov 2008 07:30 CST

QT going back to basics

Wichita's QuikTrip stores are growing at the same time the Tulsa-based retailer is ending its brief venture into car washes.

QT plans to replace its current 3,600-square-foot store footprint with a store about 1,000 feet larger and bigger parking lots, company spokesman Mike Thornbrugh said.

Work already has begun on a new store at Douglas and Seneca, with other store expansions to come "over time," Thornbrugh said.

"Our new stores average between 4,600 and 5,000 square feet now," Thornbrugh said, "with the 5,000-square-foot stores in the Dallas and Phoenix areas, more the metro areas, because they have more gas pumps."

Study: Kansas attracts foreign workers but fewer American ones

DAN VOORHIS — Wed, 19 Nov 2008 06:05 CST

Kansas does well in attracting foreign engineers, programmers and other highly educated workers, but not so well in luring American ones, according to a study released Tuesday by the Ewing Marion Kauffman Foundation,

Kansas ranked 10th out of 50 states in attracting foreign immigrant "knowledge workers" and 45th in attracting American ones.

Knowledge workers are those with managerial, technical and professional jobs, particularly in technology-related fields.

Kansas was 31st overall in the Kauffman Foundation's ranking of how states reflect the "new economy." Massachusetts ranked first and Mississippi last.

The "new economy" is one dominated by fast-growing, knowledge-based industries, globalization and technological innovation.

Case New Holland to extend shutdown

RICK PLUMLEE — Wed, 19 Nov 2008 07:30 CST

Case New Holland will shut down production of its skid-steer loader plant in Wichita for all of December and part of January.

About 400 of the company's 450 hourly workers will be affected, Gary Strodtman, the plant's human resources director, confirmed Monday.

He said about 50 hourly employees will continue working to help with some improvement projects.

The Wichita plant makes Case and New Holland brands of skid steers. It's the only one to make the product for CNH.

The New Holland line is scheduled to resume production on Jan. 20. As of now, the Case line will resume Jan. 5, Strodtman said.

Development speaker touts power of cash

DAN VOORHIS — Tue, 18 Nov 2008 01:40 CST

Cash is key to luring companies to Kansas.

That was the message of Kris Shilt, regional leader of credits and incentives for accounting firm Grant Thornton.

She spoke on Monday to the Greater Wichita Economic Development Coalition.

She outlined how Kansas' economic incentives to recruit and retain companies compares to those of competing states.

Shilt, who works with companies evaluating incentives, said that more states are offering cash up front, in return for agreements to create jobs.

GM to delay dealer reimbursements

TOM KRISHER — Tue, 18 Nov 2008 01:40 CST

Cash-strapped General Motors Corp. said Monday that it will delay reimbursing its dealers for rebates and other sales incentives, an indication that the company is starting to have cash-flow problems.

Company spokesman John McDonald said payments due Nov. 28 will be delayed for two weeks until Dec. 11, while those due Dec. 4 will be paid Dec. 18. The normal weekly schedule will resume after that. He would not say how much money the company will save from the delays.

GM said Nov. 7 that its cash situation was so dire that it may reach the minimum required to run the company by the end of the year. Executives from GM and its Detroit-area counterparts are scheduled to appear at congressional hearings this week to seek $25 billion in loans from the federal government.

Van Conway, a mergers and acquisitions expert and partner with Birmingham, Mich.-based Conway & MacKenzie, said the delay is a sign that the company knows it will run low on cash, and dealers may be most able to take the hit without hurting the company.

"They must have weekly projections here that show them bumping on their minimums," Conway said. "I think they're scraping the bottom of the barrel here."

Turkey producers not thankful for this year's prices

Sat, 15 Nov 2008 22:05 CST

Thanksgiving is bringing turkey producers little to celebrate this year, while diners anticipating the most poultry-centric of holidays may be grateful that they won't see much difference in the cost of their bird.

Meat producers have been struggling this year with higher costs for key ingredients like corn, soybeans and oil, part of why the cost of beef and chicken has risen so much. Turkey producers are facing all the same pressures, but don't have the same economies of scale and have to plan a year in advance for the one day a year they count on most.

About 46 million turkeys will be eaten on Thanksgiving Day, about the same as in previous years, said Sherrie Rosenblatt, spokeswoman for the National Turkey Federation.

Consumers will see good prices this year, Rosenblatt said, because retailers will again heavily advertise turkey at prices where they may not make any money on the deal in hopes that shoppers drawn in by the lower price will buy lots of other products.

It's prime turkey-eating time in an industry that produced about $13.9 billion worth of product last year. But even the seasonal sales boost won't ease the industry's sagging profit margins.