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►  U.S. demands big NAFTA changes, setting stage for tough talks

The United States won’t settle for cosmetic changes to the North American Free Trade Agreement, the top U.S. trade negotiator said, as negotiations to rework terms of the pact began.

Donald Trump has called the 23-year-old trade pact the “worst” in history and vowed to fix it — or withdraw from it.

On the first of five days of talks, U.S. Trade Representative Robert Lighthizer said Wednesday that Trump “is not interested in a mere tweaking of a few provisions and an updating of a few chapters. We believe NAFTA has fundamentally failed many, many Americans and needs major improvement.”

NAFTA did away with most barriers, including tariffs, on trade between the U.S., Canada and Mexico.

The Trump administration and other NAFTA critics say the agreement encouraged manufacturers to move south of the border to take advantage of lower-wage Mexican labor. Lighthizer said that at least 700,000 Americans have lost their jobs because of the way NAFTA rerouted commerce.

The U.S. trade representative said he wanted to change the pact to require that duty-free NAFTA products contain more content made within the trade bloc and specifically in the United States. But Stephen Orava, partner and head of the trade law practice at King & Spalding, said that changing NAFTA’s “rules of origin” to promote Made-in-the-USA products would prove “complicated” and risk disrupting the intricate supply chains that manufacturers have built across NAFTA borders.

Lighthizer’s comments suggest the negotiations could prove contentious. The Canadian and Mexican negotiators defended NAFTA as an economic success story, though they say it needs to be updated to reflect economic and technological changes.

NAFTA critic Lori Wallach, director of Public Citizen’s Global Trade Watch, said Lighthizer’s tough talk raises the possibility that the United States will pull out of NAFTA if it can’t get the deal it wants. “He doesn’t bluff,” she said. “It was a message to Mexico and Canada: ‘We hope we can reach a deal, but we aren’t playing.’ ”

►  SBA head sees businesses held back by lack of loans, workers

Six months into her tenure as head of the Small Business Administration, Linda McMahon sees a split among small business owners — they are increasingly optimistic, she says, but many are held back by their inability to get loans or find the right workers for jobs that are staying open.

“Entrepreneurs are willing again to be bigger risk-takers than they have been over the past eight years,” McMahon said in a phone interview this week with The Associated Press. But, she said, there are also lingering effects of the Great Recession, and “I think there is still a caution.”

McMahon’s observations matched owners’ self-assessments in surveys including ones released by Pepperdine University’s Graziadio School of Business and Management and Dun & Bradstreet Corp. and by the National Federation of Independent Business. She also named some of the stumbling blocks that many owners have cited in addition to a scarcity of loans and workers: regulations, taxes and the cost of health care, all issues Donald Trump has pledged to address.

McMahon has spent the past six months traveling around the country, meeting owners at their companies and events like forums and roundtables. She came to the SBA after being a big donor to the Republican Party and two unsuccessful runs for the Senate from Connecticut. She has a background in business; she and her husband, Vince, founded and built World Wrestling Entertainment Inc., now a publicly traded sports entertainment company. She resigned as CEO in 2009 and last year co-founded Women’s Leadership LIVE, which promotes opportunities for women in business and public service.


Although small businesses are hiring more now than during the recession, many are conservative, not wanting to add staffers unless they have enough new business to justify expanding their payrolls.

But some owners want to hire, and can’t. McMahon echoed the feeling of many: They can’t find workers with the skills to match their companies’ needs.

Jobs for skilled workers like carpenters, electricians and welders are going unfilled, as are technology positions like computer code writers, McMahon said. Companies that provide services like heating, ventilation and air conditioning are struggling to find workers to install and repair equipment.

“There’s a lack of interest, or there is not a trained workforce to come in,” McMahon said, adding that at many companies, skilled workers are age 50 to 55. Owners are telling her, “I don’t have that next group that’s going to take over these jobs.”

Another factor in the worker shortage is an unemployment rate that’s at a 16-year-low of 4.3 percent — there are fewer people looking for jobs. Workers may also be harder to come by if legislation to restrict immigration, a bill backed by Trump, becomes law. A study released by the University of Pennsylvania’s Wharton School projected that if the bill becomes law, domestic workers won’t fill all the jobs that have been held by immigrants who would no longer be allowed in the U.S.

Some solutions are coming from companies ranging from large ones like Boeing to small manufacturers that have been donating money, equipment or expertise to community college and high school students to train them for such jobs, McMahon says. This continues a trend in place for decades, though. In 1988 the Commission on the Future of Community Colleges recommended that community colleges work with companies to train students with the aim of their getting jobs upon graduation, and schools across the country subsequently began working with employers on training programs.

McMahon believes that training will lead to entrepreneurship: “When you get those skills, you can start your own business.”

She pointed to an executive order Trump signed in June that roughly doubled to $200 million the taxpayer money allocated to learn-and-earn programs under a grant system called ApprenticeshipUSA. The money was to come from existing job training programs rather than a new line in the proposed federal budget, which would slash funding for the Labor Department’s job training programs by a third.


Small businesses, particularly the youngest, tiniest and those owned by women and minorities, have historically had a hard time getting loans. Trump’s steps to roll back parts of the financial regulation law known as Dodd-Frank would help banks lend more to small businesses, McMahon said.

A report issued by Treasury Secretary Steven Mnuchin in June proposed relaxing some of Dodd-Frank’s requirements, including those on smaller banks. The community banking industry and some small business advocates have said that the law, enacted in response to the 2008 financial crisis, has imposed regulations on small banks that make it harder for them to lend to small companies, and to stay in business themselves. Supporters of Dodd-Frank want to keep the law on the books to ensure that banks cannot engage in the lending and investing practices that led to the collapse of hundreds of financial institutions including big investment banks Lehman Brothers and Bear Stearns.

Lending to small businesses has improved since the worst days of the recession; the Federal Deposit Insurance Corp. counted $331 billion in commercial and industrial bank loans under $1 million as of December 31, the most recent figures available. Lending dropped to a low of $279 billion at the end of September 2012. However, the Pepperdine-Dun & Bradstreet survey found that only about a third of companies with revenue under $5 million were successful in getting bank loans in the first four months of the year.

McMahon acknowledged that banks need to better serve the needs of women and minority business owners. The administration is “making sure that our lenders understand what our expectations are relative to having women and minorities on equal footing when they come in” to apply for loans, she said. Women business owners need to be better advocates for themselves, McMahon said.

“We’ve found that women aren’t as aggressive at promoting themselves and putting themselves forward as men, although more women are starting businesses and having a better success rate,” she said.

Many owners including women need help in developing their business plans, and McMahon noted they can look for help from SBA-sponsored programs including Small Business Development Centers, Women’s Business Centers and SCORE, the organization that gives free counseling to small companies.

Trump’s proposed budget for the fiscal year that begins October 1 cuts the SBA’s appropriation by nearly 5 percent from the current level. But McMahon said that won’t affect the agency’s ability to help small businesses.

“We’ve looked at our programs across the board and we found that had some duplication in our programs. We also have some workforce positions that had not been filled and we’re not going to fill,” she said. “It won’t impact the effectiveness of the SBA to be doing the programs it should be doing.”

►  Business leaders quit Trump panel; he hits back hard

Donald Trump on Tuesday ripped into business leaders who resigned from his White House jobs panel — the latest sign that corporate America’s romance with Trump is faltering — after his equivocal response to violence by white supremacists in Charlottesville, Virginia.

“They’re not taking their job seriously as it pertains to this country,“ the president said at an impromptu news conference at Trump Tower in New York City.

After his remarks, a fifth member of his manufacturing panel resigned: AFL-CIO president Richard Trumka, who said in a statement, “We cannot sit on a council for a president who tolerates bigotry and domestic terrorism.“

The president denied that his original statement about the violence in Virginia on Saturday — saying “many” sides were to blame, rather than hate groups — was the cause of the departures.

“Some of the folks that will leave, they’re leaving out of embarrassment because they make their products outside” the United States, he said as he seemed to double down on his earlier comments.

Trump also assailed the CEOs who left on Twitter as “grandstanders” and said he had plenty of executives available to take their place. The president added that he believes economic growth in the U.S. will heal its racial divide.

But the parade of departing leaders from the informal panel seems closely linked to how the president responded to events that led to the death of a counter-protester that opposed the white supremacists.

Among those who’ve left are the chief executives for Merck, Under Armour and Intel and the president of the Alliance for American Manufacturing.

Alliance president Scott Paul, in a tweet, said simply, “I’m resigning from the Manufacturing Jobs Initiative because it’s the right thing for me to do.“ Within minutes of the tweet on Tuesday, calls to Paul’s phone were being sent to voicemail.

Wal-Mart CEO Doug McMillon joined the chorus, saying in a note Monday to employees, “(We) too felt that he missed a critical opportunity to help bring our country together by unequivocally rejecting the appalling actions of white supremacists.“

But McMillon, whose business has customers on all sides of the political spectrum, plans to stay on a separate Trump advisory panel and said that the president’s follow-up remarks on Monday that named white supremacists were a step in the right direction.

Corporate leaders have been willing to work with Trump on taxes, trade and reducing regulations, but they’ve increasingly found themselves grappling with cultural and social tensions amid his lightning rod-style of leadership. The CEOs who left the council quickly faced his wrath, while those who have stayed have said it’s important to speak with the president on economic issues.

Like several other corporate leaders, Alex Gorsky, chairman and CEO of Johnson & Johnson, said that intolerance and racism have no place in U.S. society but that he intended to stay on the manufacturing council.

“We must engage if we hope to change the world and those who lead it,“ he said in a statement.

A White House official downplayed the importance of the manufacturing council and a separate policy and strategy forum featuring corporate leaders. The official, who insisted on anonymity to discuss private conversations, said the panels were informal rather than a set body of advisers. The departures, the official said, were unlikely to hurt the administration’s plans to overhaul taxes and regulations.

Many corporate leaders have faced a lose-lose scenario in which any choice involving politics can alienate customers, not to mention a U.S. president who has shown a willingness to personally negotiate government contracts.

Merck CEO Kenneth, one of only four African-Americans leading a Fortune 500 company, was the first to tender his resignation Monday.

Trump criticized Frazier almost immediately Monday over drug prices, and again Tuesday for having factories overseas. Merck has 25,000 U.S. employees in all 50 states and has invested $50 billion in research and development since 2010, primarily in the United States.

Then came resignations from Under Armour CEO Kevin Plank and then Intel CEO Brian Krzanich. On Under Armour’s Facebook page Tuesday, customers who supported Trump threatened to boycott the athletic clothier.

Austan Goolsbee, the former chief economist for President Barack Obama, said the departures suggest the president’s response to the violence in Charlottesville could alienate those who work for the companies, and those who buy the products and services that they sell.

“It’s certainly a sign that Trump’s more controversial stuff isn’t playing well with companies selling to middle America,“ said Goolsbee, now a professor at the University of Chicago.

There had already been departures from two major councils created by the Trump administration that were tied to its policies.

Tesla CEO Elon Musk resigned from the manufacturing council in June, and two other advisory groups to the president, after the U.S. withdrawal from the Paris climate agreement. Walt Disney Co. Chairman and CEO Bob Iger resigned for the same reason from the President’s Strategic and Policy Forum.

The manufacturing jobs council had 28 members initially, but it has shrunk since it was formed earlier this year as executives retire, are replaced, or, as with Frazier, Musk, Plank, Paul and Krzanich, resign.

So far, the majority of CEOs and business leaders that are sitting on the two major, federal panels, are condemning racism, but say they want to keep their seats at the table.

“Our commitment to diversity and inclusion is unwavering, and we will remain active champions for these efforts,“ said a spokesman for Campbell Soup for CEO Denise Morrison. “We believe it continues to be important for Campbell to have a voice and provide input on matters that will affect our industry, our company and our employees in support of growth.“

Boeing CEO Dennis Muilenburg also will remain. So will Michael Dell, the head of his namesake computer company. Both companies contract with the government.

Lawrence Summers, once the chief economist at the World Bank and senior Treasury official, wondered when more business leaders will distance themselves from Trump.

“After this weekend, I am not sure what it would take to get these CEOs to resign,“ he tweeted. “Demonizing ethnic groups? That has happened.“

Business and Financial News

The Free Press WV

►  As the laid-off struggle, high-tech U.S. plants offer jobs

Herbie Mays is 3M proud, and it shows — in the 3M shirt he wears; in the 3M ring he earned after three decades at the company’s plant in suburban Cincinnati; in the way he shows off a card from a 3M supervisor, praising Mays as “a GREAT employee.”

But it’s all nostalgia.

Mays’ last day at 3M was in March. Bent on cutting costs and refocusing its portfolio, the company decided to close the plant that made bandages, knee braces and other health care supplies and move work to its plant in Mexico.

At 62, Mays is unemployed and wants to work, though on the face of it he has plenty of opportunities. Barely 10 miles from his ranch-style brick home in this blue-collar city, GE Aviation has been expanding — and hiring.

In the state-of-the-art laboratory in a World War II-era building the size of 27 football fields, workers use breakthrough technology to build jet engines that run on less fuel at higher temperatures. Bright flashes flare out as GE workers run tests with a robotic arm that can withstand 2,000 degrees (1,090 Celsius).

The open jobs there are among 30,000 manufacturing positions available across Ohio. But Mays, like many of Ohio’s unemployed, doesn’t have the needed skills.

“If you don’t keep up with the times,” he said, “you’re out of luck.”

This is the paradox of American manufacturing jobs in 2017. Donald Trump won the presidency in great measure because he pledged to stop American jobs and manufacturing from going overseas. His message helped him capture Ohio and other Rust Belt states with the support of Mays and other blue-collar voters.

It’s true that many jobs have gone overseas, to places where workers are willing to toil for less money. Yet at the same time, American manufacturers have actually added nearly a million jobs in the past seven years. And federal statistics show nearly 390,000 such jobs open.

The problem? Many of these are not the same jobs that for decades sustained the working class. More and more factory jobs now demand education, technical know-how or specialized skills. And many of the workers set adrift from low-tech factories lack such qualifications. Meanwhile, the dearth of qualified applicants has forced some manufacturers to pay more to fill those jobs.

Training opportunities are limited, particularly for older workers.

“The United States trails virtually all its industrial competitors in public and private spending on training,” said Scott Paul, president of the Alliance of American Manufacturing, adding that corporate spending on training has declined over the past two decades.

And though industry experts advocate more funding for retraining, the track record for such programs has been mixed. Not enough participate. Returning to school for up to two years can mean accepting much-reduced income during that time, sometimes an impossible step for older workers with families or nearing retirement.

Still, there are efforts underway to bridge the “skills gap,” and lessons to be learned from how it has been done successfully overseas. Many political leaders and CEOs are promoting apprenticeships and other training programs as a way to help address the problem.

Jaylen Britton, 18, studied robotics through Butler Tech’s program at Colerain High School near Cincinnati, and is not planning right away to attend a four-year college. He took an apprenticeship with Charlotte, North Carolina-based Duke Energy and will earn a two-year degree while working for the power company.

He expects his apprenticeship to prepare him to benefit from automation rather than fall victim to it.

“If you evolve with the robots that are evolving, you’ll grow with whatever is growing,” Britton said.


After years of job losses, filling 2 million new American manufacturing jobs in the next decade — the number forecast in a report by Deloitte Consulting and the American Manufacturing Institute — might seem easy. It’s not.

That’s because factory automation has changed what companies need from their employees.

Assembly-line workers now need to run, operate and troubleshoot computer-directed machinery. Manufacturers maintain complex websites with thousands of product and pricing options to be updated and maintained. And where forklifts are still driven by people, drivers often use software programs that track inventory.

“There are more computers on the manufacturing floor than machine tools and other types of equipment,” said Judy Marks, CEO of Siemens USA.

Siemens, which makes turbines, medical equipment and HVAC systems, employs 7,500 software developers — nearly 15 percent of its U.S. workforce.

Last year, software developer was the second-most-common job advertised by manufacturing companies, behind only sales, according to data provided by Burning Glass Technologies, a company that analyzes labor market data.

Once-simple household appliances are now loaded with sensors and internet-enabled semiconductors. The shift has been particularly dramatic among automakers, with their expanded use of complicated onboard computers. Five years ago, they posted just as many jobs for mechanical engineers as for software developers. By last year, a sharp change had occurred. There were twice as many openings for software jobs as for mechanical engineers, according to Burning Glass.

Vicki Holt is CEO of Proto Labs, which employs roughly 1,000 workers, including 120 software developers, to make components for the auto, aerospace and medical device industries. Holt said “advanced manufacturing” — employing “hand-held computers, scanners, using Google Glass” — is a trend that will accelerate with growing use of robotics.

But when it comes to robotics, American industry is only beginning to catch up with much of the rest of the world. In Germany and Japan, higher labor costs and aging populations have spurred faster adoption of industrial automation.

Workers in many European and Asian countries are more likely to already be working with robots than U.S. workers, studies show. China is now the fastest-growing robotics buyer.

“The Chinese and Europeans and South Koreans are aggressively embracing robotics,” said Howie Choset, a professor of robotics at Carnegie Mellon University in Pittsburgh. “We definitely are at a point where we have to keep up or get left behind.”

Choset is chief technology officer for the Advanced Robotics Manufacturing Institute, a new public-private partnership to help U.S. companies adopt robot technologies, create and retain jobs in the sector, and help American workers compete with low-wage workers overseas.

In other countries that have forged ahead, robotics and advanced automation have created solid jobs while increasing efficiencies for manufacturers.

The Japanese have long embraced automation, and robots are increasingly becoming a part of everyday life. Sales of “companion robots” for households are surging. A tradition of “lifetime employment” by major Japanese companies means they try to retrain, not replace, workers.

On the Danish coast, a few hours from Copenhagen, Novozymes employs thousands to make enzymes for detergents, baking and other uses.

Jesper Haugaard, the vice president of Novozymes’ European unit, said automation has allowed the company to keep production — and jobs — close to the market, rather than outsourcing to China, where labor costs might be cheaper but transport and duties would outweigh the benefits.

Henrik Olsen, 61, remembers his early years at Novozymes doing manual lifting all day among workers who were “only arms and legs that followed the recipe.” There were fears of job loss when automation came, but today, he’s an operator seated behind a row of computers, with “a better day at work and much more interesting job.”

Dan Piil Petersen is another operator in the control room, where abbreviations for tasks adorn two whiteboards posted above dozens of monitors with graphic representations of the enzyme-making process. The six people in the air-conditioned room wore white T-shirts with the company logo and white pants.

“No stains,” Petersen said, smiling as he moved his hands down his spotless uniform.


In the United States, Trump continues to make promises about adding manufacturing jobs. In blue-collar Youngstown, Ohio, he talked about passing by big factories whose jobs “have left Ohio” on his way to a July 25 rally, then told people not to sell their homes because the jobs are “coming back. They’re all coming back.”

But U.S. Senator Rob Portman, an Ohio Republican and a former U.S. trade representative, insisted in an interview: “We’re not going to see the kind of manufacturing renaissance that we all want in this country unless we focus on skills training.”

Otherwise, Portman warned, there could be another wave of jobs going offshore.

“Companies will vote with their feet,” he said.

Labor Secretary Alexander Acosta, in a visit to a Detroit factory in June, acknowledged the need to address the “skills gap” by developing advanced computing skills. And when Trump visited Pewaukee, Wisconsin, in June with his secretaries of education and labor and daughter Ivanka, he touted the value of training while doing.

“Apprenticeships teach striving Americans the skills they need to operate incredible machines,” Trump said. “This is not the old days. This is new and computerized and complicated.”

Of the 146 million jobs in the United States, only about 0.35 percent — or slightly more than a half-million — were filled by active apprentices in 2016. Filling millions of open jobs through apprenticeships would require a substantial increase in government resources. So far, the Trump administration has called for more funding but hasn’t made any progress securing the funding from Congress.

Apprenticeships are much more common at some European companies, notably German firms. At Germany-based Stihl Inc.’s plant in Virginia Beach, Virginia, for example, A.J. Scherman is learning to be a “mechatronics technician.” Mechatronics combines electrical and mechanical engineering, as well as computer skills.

Stihl makes chain saws, leaf blowers and weed trimmers at the factory. Once he has completed his final year in Stihl’s four-year apprenticeship program, Scherman will read diagnostic software on computer screens attached to each robot to repair and upgrade them. If necessary, he’ll hook up a laptop to program changes.

Scherman, 37 and with only a high-school degree, wanted to earn more money when his daughter was born, so he took a chance with a mid-life career change. Previously, he worked 80-hour weeks putting together special events, including Stihl’s company picnic.

Scherman is also earning a college degree as part of the apprenticeship. Thanks to financial aid from Stihl, he’ll finish with zero debt.

The prospect of increasing automation doesn’t faze him. After all, he’ll be a robot repairman.

“We’re safe, because we’re the guys who fix the robots when they malfunction,” Scherman said. “We’re going to need people to fix the more advanced systems.”

There are assembly lines at the Stihl plant, but human workers are interspersed with computers and robotics. Two robot arms in one corner of the plant tie cords to the black pull handles used to start the company’s outdoor power tools, a mundane job formerly done by people.

Self-driving forklifts with flashing lights and constant beeping sounds, akin to R2-D2 from “Star Wars,” navigate around corners and through doors. They are programmed to slow down when people are nearby.

Skip Johnson, Stihl’s apprenticeship coordinator, said the company has succeeded in attracting young people. The key is getting bright students into the plant, where they see that the grimy, dusty factories they learned about in books and movies are giving way to clean operations using futuristic technology.

“When they actually come here and they see the robots and how they interact and the programming involved, it’s almost like a laser light show,” said Johnson, 56. “They just come in here and they’re wide-eyed.”

The company says it has never laid off a worker because of automation.


There are American success stories in automation. Lou Morales, who trains young apprentices at the Festo Corp. plant in suburban Cincinnati, understands the negative images associated with manufacturing that cause many young people — often steered by their parents — to shun the sector as a career. Years ago, he showed up at his steel mill at Glen Cove, New York, to find he no longer had a job. It had shut down.

“I’ve never seen so many padlocks in my life,” recalled Morales, 60.

But now he assures young people that their “future is endless” in manufacturing because new kinds of jobs are being created and the skills they are learning are in high demand.

U.S. manufacturing workers, excluding managers, make an average of $44,000 a year, according to government data. That’s just 2.8 percent higher, adjusted for inflation, than a decade ago after years of shifting of jobs overseas or to nonunion states. And it compares with a much higher 8 percent gain for the labor force as a whole over the past decade.

But a typical mechatronics engineer with a four-year degree can earn $97,000 a year; a typical software developer makes just over $100,000.

Festo Didactic, the education arm of Germany-based Festo, last year launched two-year mechatronics apprenticeship programs in Ohio with Sinclair Community College, and is already expanding its U.S. apprenticeship offerings.

At Festo’s plant in Mason, a northeast Cincinnati suburb, the floors are clean, the aisles uncluttered. The plant remains mostly quiet as workers monitor a sophisticated robotic distribution system that self-adjusts its work flow to prevent backups.

“This kind of factory has nothing to do with the factory we knew in the 1960s or 1980 or even 2000,” said Yannick Schilly, who heads global supply for Festo’s North American business.

At GE Aviation, internships and co-ops with colleges attract younger prospective employees, while veteran workers are retrained.

With a machining background, Terry Cox, 54, works in testing of ceramic matrix composites, which make engines more durable, heat-resistant and efficient.

“It’s the design of the future,” Cox said. “There is a lot of opportunity here.”

But there’s not much demand locally these days for the kind of repetitive tasks, such as sewing-type work, that Herbie Mays has done. He picked through personal papers on his dining room table one recent morning, grumbling about jobs going to Mexico.

“I guess those people overseas who make $12 a day, you can’t compete against them,” he said. But he acknowledged there are “plenty of jobs out here. ... What you have to do is get training or education.”

He’d like to do that, but he also needs work to supplement his benefits.

He sighed.

“I’ve been fighting to figure out the best thing to do ... and haven’t came up with no answers.”

►  U.S. retail sales jumped 0.6 percent in July

Consumers went out shopping in a big way in July, pushing up retail sales by the largest amount in seven months.

Retail sales advanced 0.6 percent last month, the best showing since a gain of 0.9 percent last December, the Commerce Department reported Tuesday. For most of this year, retail sales have been lackluster, including a decline in May of 0.2 percent and a modest 0.3 percent June gain.

Consumer spending accounts for around 70 percent of economic activity, so the latest result is a good sign for overall economic growth.

Michael Pearce, U.S. economist at Capital Economics, said the strong gain in July sales showed that consumer spending was off to a good start for the third quarter.

“With the labor market still adding jobs at a rapid pace, consumption growth looks set to remain strong for at least the rest of this year,” Pearce said.

Sales got a boost in July from a 1.2 percent jump in auto sales, the strongest result since December. There were sales gains in other areas as well, including furniture stores, hardware stores and restaurants.

The overall economy, as measured by the gross domestic product, grew at a 2.6 percent annual rate in the April-June quarter, a significant rebound from growth of just 1.2 percent in the first quarter. Economists are looking for growth to remain strong in the current July-September period, although some forecast a slight slowdown from the second quarter pace.

They ongoing strong gains in employment will add further fuel to consumer spending. The unemployment rate in July dropped to a 16-year low of 4.3 percent.

For July, sales of furniture, hardware and building supplies and sporting goods were all up. Sales at general merchandise stores posted a tiny 0.1 percent gain. Sales by non-store retailers, the category that tracks internet commerce, posted a strong gain of 1.3 percent. Online shopping has been making major inroads over traditional brick-and-mortar stores.

Pearce said that the surge in online sales reflected in part Amazon’s Prime Day promotion event which boosted U.S. orders for the giant internet shopping company by 50 percent compared to the same event last year.

Business and Financial News

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►  One-fifth of Americans find workplace hostile or threatening

The American workplace is grueling, stressful and surprisingly hostile.

So concludes an in-depth study of 3,066 U.S. workers by the Rand Corp., Harvard Medical School and the University of California, Los Angeles. Among the findings:

— Nearly one in five workers — a share the study calls “disturbingly high” — say they face a hostile or threatening environment at work, which can include sexual harassment and bullying. Workers who have to face customers endure a disproportionate share of abuse.

— Nearly 55 percent say they face “unpleasant and potentially hazardous” conditions.

—Nearly three quarters say they spend at least a fourth of their time on the job in “intense or repetitive physical” labor. “I was surprised at how physically demanding jobs were,” says lead author Nicole Maestas, a Harvard Medical School economist.

—Telecommuting is rare: 78 percent say they are required to be present in their workplace during working hours.

—Only 38 percent say their jobs offer good prospects for advancement. And the older they get, the less optimistic they become.

—About half say they work on their own time to meet the demands of their job.

“Wow — (work) is a pretty taxing place for many people,” Maestas says. “I was surprised by how pressured and hectic the workplace is.”

In many cases, less-educated workers endure tougher working conditions. For example, fewer than half of men without college degrees can take a break whenever they want to, compared to more than 76 percent of men with college degrees. Likewise, nearly 68 percent of men without degrees spend at least a fourth of their time moving heavy loads.

Maestas wonders whether toxic working conditions are keeping Americans out of the labor force. The percentage of Americans who are working or looking for work — 62.9 percent in July — has not returned to pre-recession levels and is well below its 2000 peak of 67.3 percent.

The unemployment rate is at a 16-year low, and many employers complain they can’t fill jobs.

“There’s a message for employers here,” Maestas says. “Working conditions really do matter.”

Not everything about American workplaces is grim. Workers enjoy considerable autonomy: more than 80 percent say they get to solve problems and try out their own ideas. Moreover, 58 percent say their bosses are supportive, and 56 percent say they have good friends at work.

The first-time survey of Americans ages 25-71 was carried out in 2015. It is similar to a long-running European survey, and researchers plan to conduct another survey next year and eventually to draw comparisons between U.S. and European working conditions.

►  China appeals to Trump to avoid ‘trade war’

China’s government appealed to U.S. Donald Trump on Monday to avoid a “trade war” ahead of what the White House says is a possible announcement of an investigation into whether China is stealing U.S. technology.

An official told reporters the president would order his trade office on Monday to look into whether to launch an investigation under Section 301 of the Trade Act of 1974 of possible Chinese theft of U.S. technology and intellectual property.

“There is no future and no winner in a trade war and both sides will be the losers. As we have emphasized for many times, the nature of China-U.S. trade relations is mutual benefit and win-win,” said a foreign ministry spokeswoman, Hua Chunying.

“Considering the importance of the China-U.S. relations, China is willing to make joint efforts with the United States to keep trade and economic relations on sustained, healthy and stable development on the basis of mutual respect, equality and mutual benefit,” Hua said.

Earlier Monday, a state newspaper, the China Daily, said Trump’s possible decision to launch an investigation could “intensify tensions,” especially over intellectual property.

A decision to use the law to rebalance trade with China “could trigger a trade war,” said the commentary under the name of researcher Mei Xinyu of the ministry’s International Trade and Economic Cooperation Institute.

“And the inquiry the U.S. administration has ordered into China’s trade policies, if carried out, could intensify tensions, especially on intellectual property rights,” the commentary said.

It gave no indication of how Beijing might respond but Chinese law gives regulators broad discretion over what foreign companies can do in China.

If an investigation begins, Washington could seek remedies either through the World Trade Organization or outside of it.

Previous U.S. actions directed at China under the 1974 law had little effect, said the China Daily. It noted that China has grown to become the biggest exporter and has the world’s largest foreign exchange reserves.

“The use of Section 301 by the U.S. will not have much impact on China’s progress toward stronger economic development and a better future,” said the newspaper.

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►  Big tobacco’s new cigarette is sleek, smokeless — but is it actually healthier?

Philip Morris says it has created aless toxic cigarette - an innovation it claims could save lives and eliminate smoking in America.

The new technology, called IQOS, consists of a tube that gently heats up sticks of tobacco instead of burning them. By using heat instead of flame, the company says, IQOS eradicates 90 to 95 percent of toxic compounds in cigarette smoke.

The Food and Drug Administration is expected to decide in the next two months whether to allow IQOS into the U.S. market. And that has triggered heated debate and worries among health experts about whether IQOS will help or hurt public health in this country.

Among their most pressing concerns: whether the new device will lower tobacco-related deaths, or if it is just substituting one harmful product for another.

Fueling such doubts is the fact that many of America’s leading health organizations and experts remain deeply suspicious of Philip Morris.

This is the company, they point out, that makes Marlboro - the world’s best-selling cigarette - and misled the public for years about the hazards of smoking.

“They are masterful liars. That’s not an exaggeration - that’s a fact proven by decades of evidence,“ said Matthew Myers, longtime president of the Campaign for Tobacco-Free Kids. “So the question we’re all asking ourselves is: What’s their ultimate game plan with this thing?“

Only one independent study so far has examined the risks of IQOS and found higher levels of several toxic compounds produced by the device than Philip Morris has claimed. The company’s response to the study was so forceful that the independent researchers have now gone silent, refusing to talk publicly about their work.

Even if Philip Morris’ health claims turn out to be true, health officials warn, IQOS could be a Trojan horse. Smoking in America has dropped to an all-time low. Some health advocates worry Philip Morris - which spent $3 billion to develop IQOS - wants to use its new machine to halt that progress. If IQOS attracts new smokers, it could hook a new generation on nicotine.

“The skepticism is not surprising for us,“ said one of Philip Morris’ chief scientists, Moira Gilchrist. “You don’t have to trust or believe us. You don’t have to take our word for it. But what we ask is that people have an open mind. Look at the science we’ve done on this and base your decision on that.“

But even the harshest skeptics acknowledge that there is a chance Philip Morris is right and IQOS could save lives.

“If we’re being honest, we’re dealing with a big unknown here,“ said Myers, who has fought for three decades to keep tobacco products away from kids. “One thing’s for sure: The stakes here are huge.“

On a recent sunny day, standing outside Philip Morris’ Washington office - just two blocks from the White House - Gilchrist clicked open a smooth, sleek battery pack.

With two fingers, she pulled out what looked like a hollowed-out electronic cigar - the latest IQOS prototype.

To use it, she explained, you push into its hollow end a short modified cigarette, called a HeatStick. A heating blade inside the IQOS pierces the HeatStick and gently warms the tobacco inside.

Gilchrist lifted the IQOS and took a long drag. As she exhaled, a slight musty-sweet smell permeated the air.

“Because there’s no combustion involved, there’s no smoke,“ she said.

Unlike vaping machines, which use a liquid solution to deliver nicotine, the IQOS deliberately uses tobacco. Many smokers have trouble quitting cigarettes even after trying vaping, studies have shown. Philip Morris scientists argue that for smokers to quit, you need to offer something with the same buzz and taste of tobacco.

“You have to give them that satisfying experience,“ Gilchrist said. “You have to deliver nicotine at roughly the same speed and amount.“

The first thing that now greets customers on Philip Morris’ home page is this question: “How long will the world’s leading cigarette company be in the cigarette business?“

Philip Morris chief executive André Calantzopoulos predicts that smokeless products like IQOS will one day be so common that his company stops selling all regular cigarettes. In a recent interview with the BBC, he said, “I hope this time will come soon.“

The company - which makes the world’s best-selling cigarette - has built a new $120 million research center in Switzerland to focus entirely on smokeless products. The gleaming glass-enclosed facility, called the Cube, consists of three wings - dubbed Earth, Wind and Air. (There is, notably, no section named Fire.) Of all the Cube’s new products, IQOS is the most advanced. It is now sold in 25 countries.

But the clearest sign of its potential has been Japan.

Last spring, IQOS became available nationwide there, and in the brief time since, IQOS has grabbed 10 percent of Japan’s tobacco market - a feat that has investors salivating over its U.S. prospects.

Philip Morris says 72 percent of users in Japan quit cigarettes entirely and converted to IQOS. That’s significantly higher than the 7 percent quit rate among those who tried vaping and 6 percent quit rate of nicotine patch users in a trial published by the journal Lancet.

Japanese demand has so outstripped capacity that Philip Morris can’t produce HeatSticks fast enough. It had to limit the number of IQOS devices sold in Japan. And last month, it shut down two cigarette plants in Europe to convert them into HeatStick factories.

This year, the company plans to more than triple its manufacturing capacity, from 15 billion HeatSticks to 50 billion. By the end of 2018, it plans to produce 100 billion.

Two months ago, three Swiss researchers published the only independent study so far on IQOS’s health risks.

When contacted by a Washington Post reporter, however, the researchers refused to talk. A spokeswoman for the University of Lausanne (where one of them works) explained in an email that after their study published, the bosses of all three received an alarming letter from Philip Morris.

The letter was personally addressed to the heads of the University of Bern, Lausanne University Hospital and University of Lausanne, accusing their employees of bad methodology.

Such a letter is almost unheard of in the scientific community, University of Lausanne spokeswoman Francine Zambano noted. Usually, if someone disagrees with a study, they contact the journal where it appeared or challenge its findings by publishing their own evidence.

When informed of Philip Morris’ unusual letter to the researchers’ bosses, Mitchell Katz, deputy editor of the journal JAMA Internal Medicine, which published the study, said: “That certainly smacks of intimidation. I’ve been deputy editor here eight years, and I’ve never seen that happen before.“

The Swiss study compared the harmful compounds in the air generated by IQOS with those of regular cigarettes. The study found that although IQOS generated many toxic chemicals at lower rates, some were much higher than Philip Morris claimed. It also found that IQOS produced 295 percent more of one hazardous compound than traditional cigarettes.

In their study, the scientists accused Philip Morris of “dancing around the definition of smoke” and argued that “there can be smoke without fire.“

Philip Morris has posted an academic rebuttal online, questioning the Swiss study’s methodology and interpretation. Company officials would not discuss their letter to the Swiss bosses but defended their actions.

“When a study like that picks up so much media interest, smokers who have already converted to IQOS and been helped by it have the potential to be misled,“ spokesman Corey Henry said.

This isn’t the first time tobacco companies have trumpeted the arrival of a healthier cigarette.

In the 1950s, they marketed filtered cigarettes as much safer, but that proved an exaggeration. In the 1970s, they came out with “light” and “low-tar” cigarettes, and it took health experts decades to prove those weren’t safer at all. Internal documents showed tobacco manufacturers deliberately designed their light cigarettes to fool government smoke-testing machines.

At his office at the Campaign for Tobacco Free-Kids, Myers keeps a museum on his bookshelf of all the ways tobacco companies have tried to fool the public over the years. There are strawberry-shortcake-flavored products aimed at kids and tobacco embedded into dissolvable breath mint strips.

Myers worries IQOS - with its sleek, sexy, Apple-like design - could be used to attract younger consumers.

Brian King, a deputy director at the Centers for Disease Control and Prevention’s Office on Smoking and Health, worries IQOS could make tobacco acceptable again. “We’re finally at a place where smoking isn’t accepted as normal and isn’t allowed in public places. We’re making progress on the smoking rate. All that could easily be reversed.“

Stanton Glantz, a tobacco researcher at the University of California at San Francisco, says that even if IQOS reduces carcinogens, it could still cause serious heart problems because of nicotine and ultrafine particles. “It probably isn’t as bad as a cigarette, but that’s like saying jumping out of a 10-story building isn’t as bad as jumping out a 50-story building.“

A few health researchers, however, support Philip Morris’ effort.

“If you have a company willing to shift to a less harmful product, is that something we should be getting in the way of?“ said Jonathan Foulds, a smoking cessation expert at Penn State University.

Ultimately, the FDA will have the final word on science and health concerns over IQOS.

Philip Morris’ case for IQOS got a boost last month when the FDA’s commissioner stressed the need for innovation and alternatives to cigarettes in a speech.

The agency is expected to decide in the next two months whether IQOS can be sold here, but it won’t rule on its health claims until the beginning of next year.

If the FDA approves those health claims, IQOS would be the first tobacco product to carry the U.S. government’s stamp as a less harmful alternative to cigarettes - a marketing coup for Philip Morris. And competitors are already racing to catch up by rushing out prototypes of their own.

Included in Philip Morris’ FDA application are more than 2 million pages of scientific data. Health organizations - such as the American Lung Association and the American Cancer Society - are just beginning to sift through them to make their recommendations to the FDA.

Even if anti-tobacco groups don’t trust Philip Morris’ moral reasons or scientific claims on IQOS, there are compelling business reasons to believe the company really wants to save smokers’ lives, argued industry analyst Michael Lavery.

“If you can find a way to keep your consumer alive longer,“ he said, “you’ll make more money off them. It’s a better business moDelegate”

►  Procter & Gamble takes calculated risk with ‘The Talk’ ad

It’s a simple message: Beware of racism in the United States.

But Procter & Gamble took a calculated risk with its ad that features black mothers speaking to children about racial bias through the decades. The company says it knew there might be a backlash — and the ad has been criticized as being anti-police or anti-white. But it says it felt after hearing from consumers that the ad would be worth it.

“The Talk,“ which makes no mention of any P&G product, has been the talk of social media.

The ad is part of a shift by some corporations that are making emotional appeals to consumers by treading into territory that could be polarizing. But experts say there are likely to be more of these ads, as companies seek younger customers who respond to them.

“Brands just can’t push their messages out there,“ said Luis Garcia, president and lead strategist of MarketVision, a San Antonio, Texas-based marketing firm. “They have to create meaningful ways that are going to engage people.“

Consumers have so many choices among so many brands, Garcia said, that people remember only what matters to them.

In the P&G video released online last month, a mom in the 1950s tells her daughter she is not just “pretty for a black girl,“ as someone told the girl, but “beautiful, period.“ And a mom in the 1960s tells her son he may hear an epithet, but not to let it hurt him. Another mom, this time in the 1990s, reminds her son to take his identification with him as he sets off for practice.

None of the company’s products, like Pampers diapers, Tide detergent or Crest toothpaste, are shown. Instead, after clips of mothers giving children “the talk,“ the video invites people to discuss it online with the hashtag #TalkAboutBias.

The ad is scheduled to begin airing on national television next week.

Damon Jones, a spokesman for Cincinnati-based Procter & Gamble, said not including products in “The Talk” was a conscious decision because the company wanted viewers to focus on its message. Ads for P&G products often feature smiling babies wearing its diapers or highlight dishes that sparkle after using its soap.

“There’s a time for product placement,“ Jones said. “There’s a time to do something broader.“

Jones said the company believed now was the time to tackle racial bias after hearing feedback from consumers. He said “The Talk” ad seemed like an evolution from other socially conscious Procter & Gamble efforts, and cited its #LikeAGirl campaign that criticized emojis for being “stereotypical” and “limiting” toward women.

Procter & Gamble isn’t the first company to try to tackle difficult topics. Some brands are specifically known for taking positions on political or social issues. Other big brands have tried it too. Earlier this year, Nike unveiled its “Equality Has No Boundaries” commercial featuring well-known athletes. And Anheuser-Busch released a Super Bowl ad that focused on its founder’s immigrant past.

Such ads often draw criticism, not only from those who oppose the social message but also sometimes from people it’s trying to appeal to.

Pepsi was reproached early this year over a video that took images from Black Lives Matter protests and ended with Kendall Jenner, a white woman, giving a police officer a can of Pepsi. Critics said the commercial trivialized the issue of black residents’ interaction with police.

And two years ago, Starbucks launched a “Race Together” campaign aimed at getting customers to talk about race, only to end it shortly after critics claimed it was poorly executed and a marketing ploy.

The P&G ad has drawn positive and negative reactions.

Jennifer Johnson of Detroit said the conversations portrayed in the ads are rooted in real life. She says she’s had similar talks with her now-adult daughter over the years.

“She liked to go out and I would tell her to be careful,“ said Johnson, 55, who is black. “She would say ‘alright, ma. I got you.‘“

Johnson also believes that the ad, although illustrating black experiences, is meant for all audiences and that it may steer more business toward P&G products.

Victor Taylor, a black 63-year-old retiree in Bakersfield, California, called the ad “reality.“

“That’s what (black) children go through every day,“ Taylor said about being treated differently. “I don’t find the ad prejudiced. I found it informing to the children growing up.“

Still, the ad didn’t make him want to go out and buy Crest or Tide, Taylor added.

Some social media users saw the ad as stroking racial animosity. Conservative columnist Michelle Malkin said it amounted to “identity-politics pandering” and alienated law enforcement.

“P&G should stand for quality consumer goods, not empty Protest & Grumble that divides more than it unites,“ Malkin wrote.

Robert Passikoff, president of the customer research firm Brand Keys Inc. in New York, said that’s the risk Procter & Gamble took and wondered how shareholders, even those who agree with the ad’s message, might respond. P&G is currently resisting activist investor Nelson Peltz, who is seeking faster changes and better financial results from the consumer products company.

“I’m the last of the Mad Men era,“ Passikoff said. “I believe companies are not there for social change. They are there to sell products.“

But Benjamin Bates, a professor of health communication at Ohio University’s Scripps College of Communication, said he believed the reward outweighed the risk since the ad appealed to African-Americans, and younger consumers who are more comfortable with diversity.

“The people the ad would alienate are a small percentage,“ Bates said. “I, as a CEO, would probably think, ‘If I lose some racists because of this, I’m OK with that’.“

Jones said the company is exploring more campaigns that tackle difficult issues about gender, racial and equality.

►  Trump to request possible probe of China trade practices

Even as he seeks Beijing’s help on North Korea, Donald Trump plans to sign an executive order asking his trade office to consider investigating China for the alleged theft of American technology and intellectual property, an administration official said Saturday.

That step is expected Monday but won’t come as a surprise to the Beijing government. There is no deadline for deciding if any investigation is necessary. Such an investigation easily could last a year.

In a phone call Friday, Trump praised Chinese President Xi Jinping for backing the recent U.N. vote to impose tougher sanctions on North Korea, and the leaders reaffirmed their commitment to a nuclear-free Korean Peninsula. But Trump also told Xi about the move toward a possible inquiry into China’s trade practices, according to two U.S. officials familiar with that conversation. They were not authorized to publicly discuss the private call and spoke on condition of anonymity.

Trump wants government officials to look at Chinese practices that force American companies to share their intellectual property in order to gain access to the world’s second largest economy. Many U.S. businesses must create joint ventures with Chinese companies and turn over valuable technology assets, a practice that Washington says stifles U.S. economic growth.

Trump’s action amounts to a request that his trade representative determine whether an investigation is needed under the Trade Act of 1974. If an investigation begins, the U.S. government could seek remedies either through the World Trade Organization or outside of it.

China’s foreign and commerce ministries did not immediately respond to faxed requests for comment Sunday.

While Beijing has promised to open more industries to foreign companies, it also has issued new rules on electric car manufacturing, data security, internet censorship and other fields.

Trump, who is on a working vacation at his New Jersey golf club, said Friday that he planned to be in Washington on Monday “for a very important meeting’” and “we’re going to have a pretty big press conference.” It was not immediately clear whether he was talking about trade was the subject.

The administration official who confirmed that Trump would sign the order contended it was unrelated to the showdown with North Korea. The official spoke on condition of anonymity to discuss the order before Trump’s formal announcement.

As the crisis has unfolded, Trump has alternated praising China for its help and chiding it for not ratcheting up pressure on its Asian neighbor.

“I think China can do a lot more,” Trump told reporters Thursday. “And I think China will do a lot more.”

Trump has escalated his harsh criticism of North Korea for days, tweeting Friday that the U.S. had military options “locked and loaded.” Xi, in his phone conversation with Trump, urged calm.

“At present, relevant parties should exercise restraint and avoid words and actions that would escalate tensions on the Korean Peninsula,” Xi said, according to the statement provided by China’s government.

Trump, in the past, has tied trade policy to national security. In April, he said he wouldn’t label China a currency manipulator, in return for help in dealing with North Korea. This past week, Trump said he could soften his views on trade if China stepped up its assistance, leading to speculation that the investigation could be a negotiating tactic.

The forced sharing of intellectual property with Chinese firms has been a long-standing concern of the U.S. business community.

A 2013 report by a commission co-chaired by Jon Huntsman, ambassador to China under President Barack Obama and Trump’s nominee to be Russian envoy, pegged the losses from US intellectual property theft at hundreds of billions of dollars annually that cost the U.S. economy millions of jobs.

Trump has requested similar inquiries on trade, but the reports haven’t been delivered on deadline. Trump made addressing the U.S. trade deficit with China a centerpiece of his campaign last year and has suggested raising tariffs on goods from China.

At the end of March, Trump asked the Commerce Department to prepare a report on the causes of the trade deficit, country by country and product by product, in 90 days. The report has yet to be released.

Similarly, the president also asked for a review about whether steel and aluminum imports were jeopardizing national security. Commerce Secretary Wilbur Ross had hoped to finish the review by June, but parts of it remain in the final stages of interagency review.

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