Kansas.com: Business

Protection One says it is well positioned

DAN VOORHIS — Sun, 30 Nov 2008 03:09 CST

Is it possible for a company to lose money for 10 straight years and remain open for business? For alarm company Protection One, the answer is yes.

Company officials say the company is making progress on its business plan, improving operations and is in no danger of defaulting on its massive debt.

In fact, the company has increased the number of jobs at its monitoring center at 800 E. Waterman, from 569 employees at the end of 2007 to 618 today, and is still hiring as it consolidates operations.

The company offers remote alarm monitoring for homes, apartments and businesses.

The Wichita facility is home to residential and commercial alarm accounts. It also now hosts the company's e-Secure service, which enables customers to monitor their homes and businesses over the Internet. Adding e-Secure is what is driving the job growth in Wichita.

Experts expect dive in Nov. auto sales

DAN STRUMPF — Sun, 30 Nov 2008 01:39 CST

As the humbled captains of the U.S. auto industry spend the weekend preparing their second case for a federal bailout, their best argument may come in November's auto sales figures.

Industry watchers and car dealers say they expect this month's vehicle sales to come out slightly better than October's historic lows, but increased incentives haven't been enough to overcome tight credit, the crumbling economy and weak consumer confidence that are keeping consumers away from showrooms.

"All those major factors that had an impact on new car demand so far this year are still with us," said Jesse Toprak, executive director of industry analysis for the automotive Web site Edmunds.com.

Edmunds expects sales to drop 28 percent from a year ago to 850,000 units when automakers announce their November sales Tuesday. Barclays auto analyst Brian Johnson predicts a 32 percent plunge. Other analysts are just as pessimistic and expect U.S. car companies to take the biggest hit.

"Detroit Three automakers appear likely to once again lag the industry in both retail and total sales," Citigroup analyst Itay Michaeli wrote in a report last week.

Venture capitalists scrutinize cash flow

PUI-WING TAM — Sun, 30 Nov 2008 01:39 CST

As venture-capital funds face a cash crunch driven by the financial downturn, they are taking extreme measures to ensure they can fund their investments.

Some venture capitalists are selling their equity stakes in start-up companies at fire-sale valuations so they don't have to keep funding those businesses, allowing them to husband their remaining cash for other investments.

Others are considering so-called annex funds, which are side funds that can provide an extra pool of money. And some are scaling back on new investments to increase the cash reserves in their funds.

"It's all about cash flow right now," says Terry Opdendyk, a general partner at venture-capital firm Onset Ventures in Menlo Park, Calif. "If you don't have cash, companies die, and we can't resurrect them for our investors."

Venture capitalists typically raise money from institutional investors to form a 10-year fund, using it to invest in private companies with the hopes of profiting later when the start-ups go public or are sold. The funds collect the capital their investors have promised over time, providing a steady stream of cash to nurture start-up companies.

OPEC meeting ends with no new cuts

TAREK EL-TABLAWY AND ADAM SCHRECK — Sun, 30 Nov 2008 01:39 CST

OPEC ended a hastily convened meeting in Cairo on Saturday without announcing new output cuts, despite the steep drop in crude prices and the threat it poses to member governments' national budgets.

The oil producing group's president, Chakib Khelil, said OPEC is concerned about the weakening world economy and its impact on oil prices. The group, however, will likely wait until a meeting in Algeria on Dec. 17 to decide whether to cut additional crude supplies from the market.

Khelil said oil ministers of the Organization of Petroleum Exporting Countries "agreed to take any additional action on 17th of December to balance oil supply and demand and achieve market stability."

His comments came after the group convened what it called a consultative meeting in Cairo to take stock of market situations and to asses whether members were complying with a 1.5 million barrel a day output cut announced Oct. 24 in Vienna, Austria.

Khelil said preliminary market data indicated members were complying with the earlier cuts.

Business stores, tracks airplane parts

MOLLY MCMILLIN — Sat, 29 Nov 2008 04:05 CST

Brian Middleton opened Aero-Spaces -- a warehousing and data management business -- by request. A Kentucky-based supplier wanted a place to store parts it builds and ships to Wichita for Spirit AeroSystems and for the inventory to be managed.

The supplier, Roll Forming Corp., turned to Middleton, who as part owner of D&O Engineering markets Roll Forming to manufacturers.

In response, Middleton opened Aero-Spaces at 1637 S. Baehr in 9,000 square feet of space in March 2007.

Aero-Spaces is breaking even and poised to grow, Middleton said.

The parts -- stringers for Boeing 767s, 777s and 747s -- are shipped from Roll Forming to Aero-Spaces, where they are inspected and stamped for quality control, stored and delivered according to Spirit's schedule. A stringer reinforces the wing or fuselage of a plane.

Shoppers flock to secure bargains

DAN VOORHIS — Sat, 29 Nov 2008 01:39 CST

Economic woes don't slow consumers in the area

Black Friday wasn't Bleak Friday for retailers in Wichita. Two months of terrible economic news pushed national chains into deeper and broader discounts than usual on the day after Thanksgiving.

But if there was a lot of anxiety about the economy, it wasn't obvious in the packed stores around Wichita.

"You wouldn't have guessed from the amount of people out. We waited an hour at Toys 'R' Us," said Joey Pitzer of Derby, who was shopping at Kmart, 4830 S. Broadway.

Stephanie McCrary of Augusta and her friend Jodi Bailey of El Dorado got to the Wal-Mart in Augusta before it opened at 5 a.m. to find people in line.

Market's 5-day rally is biggest since 1930s

TIM PARADIS — Sat, 29 Nov 2008 01:39 CST

Wall Street finished higher Friday, wrapping up its biggest five-day rally in more than 75 years, even as investors digested signs of a bleak holiday season for retailers and fears that a flurry of reports next week will show more economic distress.

On the short trading day, investors snapped up the battered shares of blue-chip stalwarts Citigroup and General Motors, fueling a rally that has surprised many market experts whipsawed by wild swings during the past three months.

The market got big boosts over the past week from President-elect Barack Obama naming his economic team, the government propping up Citigroup, and the Federal Reserve deciding to buy massive amounts of mortgage-backed securities. These efforts reassured the market that broad efforts are still being made to fight the financial crisis that intensified in September with the bankruptcy of Lehman Brothers Holdings Inc.

Just last week, the S&P 500 index fell to its lowest point since 1997 while Citigroup and GM were trading at 15- and 70-year lows -- touching off worries about how far the market would slide.

While the stock market's strong rebound was certainly welcome, analysts were hesitant about getting too optimistic. Not only were trading volumes very light on Friday, but investors will be digesting a slew of economic data next week ranging from a reading on the manufacturing sector to the all-important employment report from the Labor Department. Both are expected to be dismal.

Market batters Spirit AeroSystems stock

MOLLY MCMILLIN — Fri, 28 Nov 2008 06:45 CST

The price of Spirit AeroSystems stock has taken a beating recently from a variety of problems, most of them out of Spirit's control, Wall Street analysts say. Spirit shares have swung dramatically from a 52-week high of $36.22 to a low of $7.14 a week ago. It closed Wednesday at $8.98, up $1.03.

Spirit stock first began trading on Nov. 21, 2006. It opened at $26 and has traded as high as $40.50.

"No stock in our universe has come close to the underperformance of (Spirit)," Barclays Capital analyst Carter Copeland wrote in a report to investors.

With 85 percent of Spirit's work related to Boeing, the market is concerned about exposure to the Boeing strike, to the state of Boeing's jetliner backlog and to continued delays on Boeing's 787 Dreamliner program, analysts say.

"The 787 particularly has been a large cash drain for Spirit," Copeland said Tuesday in an interview with The Eagle.

File-sending company grows quickly

CARRIE RENGERS — Fri, 28 Nov 2008 01:39 CST

Aaron Freeman may look like just another thirty-something lounging in a coffee shop e-mailing from his laptop, but he's actually running his company.

Freeman's 5-year-old SendThisFile Inc. helps customers send and receive large Internet attachments.

"We just recently hit the one millionth-user mark, which was a major milestone for us," Freeman said.

So what did he do to celebrate?

"Did our typical -- drink beer," Freeman said.

GM's cuts save money right down to pencils

JOHN D. STOLL AND SHARON TERLEP — Fri, 28 Nov 2008 01:39 CST

Over the past several weeks, engineers and technicians working at General Motors' sprawling proving grounds west of Detroit started noticing a curiosity: An increasing number of wall clocks had the wrong time, or stopped working altogether.

The reason: As part of a drive to cut $15 billion in costs, GM is no longer keeping the 562 clocks in working order, which will eliminate the expense of replacing and disposing of the clocks' batteries and the cost of resetting them twice a year for daylight saving time.

It's not the only new measure GM is taking to save every last nickel. In its Renaissance Center headquarters, employees working late have to climb stairs when navigating its labyrinth of lower floors -- the company now stops the escalators at 7 p.m. In designated cleanup areas of certain offices, the company has changed the type of wipe-up towels it buys. In a memo to employees, a staffer explained this will lower GM's "cost per wipe."

At GM, though, the penny-pinching is visible at the microscopic level, from cheaper pencils to elimination of voice mail in the plants.

Next year, GM isn't giving out its "Mark of Excellence" awards to its top-selling dealers. And it used to maintain a sizable fleet of cars for reporters to test-drive, but has cut that back.

Some call centers get 'homeshored'

DAN SEWELL — Fri, 28 Nov 2008 01:39 CST

An operator is standing by -- at home.

Companies that supply customer service agents to businesses around the world say they are saving money and attracting better employees by letting them work from their own houses. Using Internet telephone technology, the operators are able to answer questions and hear out complaints as if they were working in a sprawling call center in an office park.

"It gives us access to some high-quality labor that wouldn't work in a call center," said Andrea Ayers, president for customer management for Cincinnati-based Convergys, an outsourcing company that is ramping up the number of agents who work from home. "This gives us more staffing flexibility, and we can make it work with their lifestyle."

Convergys, which still has a call center in Wichita, and rival companies say they're being swamped with applications. The first spike came a few months ago, when gas prices topped $4 a gallon. Now, they're surging again as unemployment soars.

Home agents often start at $8 to $10 an hour. Besides gas, home-based operators save on car maintenance and the cost of keeping up an office wardrobe.

Improving employee morale, productivity through better office design

DAN VOORHIS — Thu, 27 Nov 2008 06:17 CST

Until a few months ago, when the elevator stopped at the second floor of Riverpark Plaza, it opened more or less onto a blank wall.

Not the best presentation for Law-Kingdon Architecture.

Law-Kingdon decided to reconfigure about 4,000 square feet in the center of its offices. The elevator now opens onto a large counter curving in toward a glass-wall conference room. The effect welcomes people and pulls them into the office.

The redesign was intended to reflect the firm's client-centered focus, said president Dennis Smith, but it also made the architects and draftsmen working there mutter "that's so cool" as they came to work each morning.

Reconfiguring an office in the right way can improve employee morale and boost productivity, say architects and employees.

Koch expects earnings to drop

RICK PLUMLEE — Thu, 27 Nov 2008 01:39 CST

Koch Industries responded Wednesday to a report that the company's executive vice president, David Koch, said he expects Koch's earnings to fall 50 percent because of falling oil prices.

"David Koch echoes what we all recognize -- that these are turbulent economic times," Koch spokeswoman Melissa Cohlmia said in an e-mail.

She declined to address Koch's claim about the earnings decline.

In a story published earlier this week in the Wall Street Journal, Koch said he wouldn't be making new charitable commitments because of decreased expectations of Koch Industries' earnings as the result of declining oil prices.

Koch is the country's largest privately held company and is diversified across a broad range of industries.

Wild West World deal remains up in the air

BILL WILSON — Thu, 27 Nov 2008 01:39 CST

Wild West World's owner has been unable to finalize a deal for a developer and operator, and Park City officials haven't heard from the group for two months.

Doug Spangler, the Wichita agent for park owner AHG Group, a Florida development company, said the economic crisis has frightened potential park investors.

"We're still very enthusiastic about the project, but finding anyone with the (nerve) to come forward, quite candidly, as an operator and developer is tough," he said.

"It's realistic to say that we're not in a situation conducive to closing big deals like this, and that's the big reason for the delay."

Money is a sticking point between AHG and Jerry Murphy, the Tulsa-based amusement park operator who has been the leading candidate for three months to operate the park.

President of IMA of Wichita takes position in Pennsylvania

JERRY SIEBENMARK — Thu, 27 Nov 2008 06:19 CST

One of the top executives from the area's largest insurance brokerage will be leaving the firm next month.

Anita Bourke, president of IMA of Wichita, has been hired as an executive vice president of education for the American Institute of Chartered Professional Casualty Underwriters.

"It's one of those opportunities that don't come along very often," said Bourke, "so I really had to step back and say, 'Am I really going to pass this by?' "

Her last day at IMA will be Dec. 19. She starts her new job, in Malvern, Pa., on Jan. 5.

Kurt Watson, chief operating officer of IMA Financial Group, IMA of Wichita's parent company, said Bourke has been key to the firm's growth.

Area home sales fall; prices up

BILL WILSON — Wed, 26 Nov 2008 01:38 CST

Home sales continued to decline in Wichita and across the Midwest in October, although national analysts say they see a "sustainable floor" in the figures.

But Wichita home prices continue to appreciate slightly, fueled by upscale home sales in the face of steadily declining national price trends.

Although final Wichita sales totals aren't in for October, brokers and developers say they're going into the city's traditionally tough winter sales season on a relatively sour note.

"The market is down, and that's sugar-coating it to some extent," said Wichita developer Paul Kelsey.

"Actually, Nov. 10 through Jan. 31 is the lousiest time of the year for sales, and it always has been, regardless of the weather or the credit. It'll be Jan. 31 before I can tell you where I think we're headed."

Kansas thrifts post profit

JERRY SIEBENMARK — Wed, 26 Nov 2008 01:37 CST

Profitability fell for Kansas banks but rose for savings and loans in the third quarter.

Both types of financial institutions in Kansas finished the quarter in much better shape than nationwide, according to an analysis of quarterly banking performance released Tuesday by the Federal Deposit Insurance Corp.

The nation's banks saw third-quarter earnings plummet nearly 58 percent to $38 billion, while savings and loans, or thrifts, recorded a $5.5 billion loss compared to the same quarter a year ago.

In Kansas, commercial banks' net income fell by 20 percent, or $99 million, to $397 million in the third quarter.

Kansas thrifts, however, saw an earnings gain in the quarter, to $12.2 billion, a 43 percent increase from third quarter 2007.

Job training loses funding

DAN VOORHIS — Wed, 26 Nov 2008 01:37 CST

Wichita's main work force training program is shifting its focus following the economic downturn, but its efforts have been hobbled by a huge funding cut.

Until a few weeks ago, the Workforce Alliance of South Central Kansas, 150 N. Main, was pushing people who come for job training into a nine-week aircraft sheet-metal training program.

With the slowdown in jet orders and the announced layoff of 1,800 aircraft workers at Boeing, Hawker Beechcraft and Cessna, center executives decided to channel new job training applicants to longer-term programs such as aircraft cabinetry makers and airframe and powerplant mechanics.

"We're trying longer-term training with the hope and expectation that they will be hiring in six to 12 months," said the alliance's executive director, Keith Lawing.

That training is done at Wichita Area Technical College.

New forecast still includes job gains

DAN VOORHIS — Tue, 25 Nov 2008 01:40 CST

Wichita State University revised its 2009 jobs forecast downward, but it is still calling for job gains despite the national recession.

The Wichita area will add 1,650 jobs next year, according to the prediction released Monday by the Center for Economic Development and Business Research at WSU.

The forecast calls for job growth across most sectors, with half of the new jobs coming in the aircraft industry.

The center predicted 6,000 new jobs at its outlook conference in early October.

Despite terrible economic news nationally, Wichita remains in pretty good shape, said center spokesman Stan Longhofer, a WSU economist.

Medicare cuts take a toll

KAREN SHIDELER — Tue, 25 Nov 2008 01:40 CST

Hospice providers feel financial strain

Federal funding cuts, shorter stays and even the sagging real estate market are putting the squeeze on Wichita's hospice providers.

One -- Trinity Hospice -- recently closed. One is for sale. Another has had layoffs, and others are finding ways to cut expenses.

The biggest pressure, hospice service providers say, is from Oct. 1 cuts in their Medicare reimbursement rates. Nationwide, the cuts have averaged 4 percent.

"We've had to go in and look operationally at what we can save money on," said Cindy Keim, regional vice president of Hospice Care of Kansas.