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Nov 6, 2006, 4:47 PM
Overflow at the pub
Three expanding Portland brewpubs tap into new opportunities
Portland Business Journal - November 3, 2006
by Matthew Kish
Forget happy hour. Try happy year.
After slight double-digit growth the past two years, the makers of local craft ales are on track for a whopping 20 percent sales increase this year, according to the Oregon Brewers Guild.
The sizzling cash drawers explain the surge of expansion projects by several local brewmasters. The inveterate Lucky Labrador Brewing Co. opened an annex in Northwest Portland six months ago. The owners of the New Old Lompoc have opened two pubs -- the Oaks Bottom Public House and the 5th Quadrant -- since December of last year.
More taps are on the way. Christian Ettinger, the former king of the kegs at Hollywood's Laurelwood Public House, plans to open his own digs early next year. In between mixing bags of concrete, he said the 150-seat microbrewery that he's planning for Southeast 30th Avenue and Powell Boulevard -- Independent Brewing Co. -- will feature organic beer and pizzas made with local ingredients.
Construction also began this week on a new -- and much larger -- home for Laurelwood in Portland on Northeast 51st Avenue and Sandy Boulevard.
Owner Mike DeKalb said the move was necessary because the pub couldn't keep up with demand for its beers.
"We had tapped out our market," DeKalb said. "The problem we're having now is we've reached capacity."
The new location will churn out 6,000 barrels of craft ale per year, nearly triple the current amount.
DeKalb hopes to have the brewery open by Jan. 1 and the adjoining 200-seat restaurant open in March.
DeKalb also plans to open two outlets at Portland International Airport next year.
Nationally, as well, the thirst for local brew has yet to be quenched.
"The craft beer world is very healthy right now," said Jen Reimer, spokeswoman for the Boulder, Colo.-based trade group the Brewers Association.
Her organization predicts national sales for beers like Black Lab Stout will be up 11 percent this year.
So why is Portland selling hefeweizen at nearly double the national average? Self-distribution. (Gloomy weather and tasty local hops don't hurt.)
Thanks to a law that went into effect in 2001, small brewers don't have to drop $20 on a distributor each time they want to move a keg of their own beer across town to an annex.
It might not sound like much, but Jerry Fechter, president of the New Old Lompoc, said it probably saves him $15,000 annually just on moving ale to the Hedge House, a pub he owns on Southeast Division Street.
For small brewers, that can be the difference between keeping the doors open and drowning their sorrows in a pitcher of stout.
"It's really cost-effective," Fechter said.
Oregon's microbrewing industry is now arguably without peer. It's a $2.25 billion business, according to the Oregon Brewers Guild, which also contends that Portland's 30 breweries are more than any other city in the world.
Industry experts say the recent spurt of business would have happened sooner if 9/11 hadn't taken a bite out of the local and national economy.
"We're probably back on track to where we should have been," said Brian Butenschoen, executive director of the Oregon Brewers Guild. He predicted expansion in the local industry would continue into 2008.
At least one brewer already has his eyes on tapping more kegs.
"At the end of next summer or next winter, we might start looking again," Fechter said.
Despite the blossoming industry, however, brewmasters aren't worried about losing market share as the various players scramble to meet demand.
"At some point there could be some sort of market erosion," said Gary Geist, co-owner of the Lucky Lab. "But at the same time, it's almost going towards the [Chicago or Boston model] where there's a little pub on every street corner with different beers and atmospheres."
email@example.com | 503-219-3414
James Bond Agent 007
Nov 7, 2006, 9:33 PM
FedEx scraps Airbus order, turns to Boeing
Package deliverer, first to cancel its order of A380s, will buy 15 777s instead.
November 7 2006: 2:14 PM EST
NEW YORK (Reuters) -- FedEx Express, a unit of FedEx Corp., said Tuesday it would buy 15 Boeing Co. 777 freighter aircraft and canceled its order of 10 A380-800F Airbus aircraft due to delays in delivery.
FedEx (up $0.97 to $114.91, Charts), which is the first company to cancel its Airbus A30 order, said its agreement with Boeing (up $3.07 to $83.55, Charts) also gives it options to purchase an additional 15 aircraft. It expects to take delivery of four of the 777 aircraft in 2009, eight in 2010 and the remaining three in 2011.
The shares of Airbus parent EADS were down 3.1 percent just before the close of trading on the Paris stock market, while Boeing shares were up 3.2 percent during midday trading on the New York Stock Exchange.
Production problems with Airbus's A380 superjumbo have plunged the company into crisis and forced it to re-examine its projects and restructure its business.
"The decision to purchase Boeing 777s was taken after Airbus announced significant delays for delivery of A380s," said Maury Lane, a spokesman at FedEx Express, the express package delivery unit of FedEx. "Global package demand continues to grow and we need the appropriate aircraft to meet that demand."
"While regretting the decision, we understand FedEx's decision because of the shift in delivery," said Barbara Kracht, spokesperson for Airbus. "[FedEx] has an urgent need to address capacity growth."
Kracht added that the decision isn't based on "a dissatisfaction with plane" and that the company and customers such as Qantas and Singapore Airlines remained committed to the A380.
Boeing could not be immediately reached for comment.
FedEx, the Memphis, Tenn.-based package delivery company, said it continues to be Airbus' largest wide-body airplane customer and will add additional new and used Airbus wide-body aircraft to its fleet in the coming years.
The news comes weeks after US Airways (up $0.57 to $50.64, Charts) revealed that the late delivery of the A380 was slowing the airline's expansion plans.
FedEx shares were up 53 cents at $114.47 during midday trade on the New York Stock Exchange.
Nov 8, 2006, 12:04 AM
^^^^^^^^^^^^^^ I saw that!!! Go Boeing! :banana:
James Bond Agent 007
Nov 14, 2006, 3:34 AM
Boeing gets $423M aircraft order from KLM
Puget Sound Business Journal (Seattle) - 1:14 PM PST Monday
KLM Royal Dutch Airlines has ordered six Next Generation 737 airliners worth about $423 million at list prices, The Boeing Co. announced Monday.
KLM, a unit of the Air France/KLM Group, converted six options for the 737s, which will be delivered by mid-2008, the company said. The airline uses different 737 models for its short- to medium-distance routes.
Boeing (NYSE: BA) by Oct. 31 had booked 775 aircraft orders for the year.
Nov 14, 2006, 3:36 AM
Boeing is booming! They are definitely killing airbus so far this year
Nov 14, 2006, 5:36 PM
The count on the Boeing site is now at 793!
Record deliveries, near record orders, and a reduced staff level. Oh yeah, Boeing is doing well.
James Bond Agent 007
Nov 15, 2006, 2:52 AM
Jobs growing strongly in state
By Drew DeSilver
Seattle Times business reporter
The state's unemployment rate dropped sharply in October while employers added jobs at a healthy clip, paced by aerospace and construction companies, according to the state Employment Security Department's monthly report.
After rising gradually throughout the summer and early fall, the state's seasonally adjusted unemployment rate fell half a percentage point to 4.8 percent, the lowest level since April. Nonfarm payroll jobs grew by 10,700, or 0.4 percent, in October, compared with a revised 6,100 gain in September.
The payroll figures were revised higher from previous reports, indicating that job growth was stronger than had been initially reported.
Other highlights from today's report:
The unemployment rate in the Seattle metropolitan area fell to 4 percent in October, from a revised 4.3 percent in September. A year earlier, metro-area unemployment was running at 4.8 percent.
Construction added 1,500 jobs statewide in October, despite worries the slowing housing market would weaken what has been one of the economy's strongest job engines.
Aerospace companies added 700 jobs in October; over the past year that sector has grown by 6,100 jobs, or 8.9 percent. Boeing has reported adding 6,559 workers in Washington over the past year, even as its workforce elsewhere has shrunk.
Retailers, gearing up for the holiday shopping season, added 2,200 jobs in the month. Food and beverage stores, clothiers and home-and-garden stores added the most jobs.
James Bond Agent 007
Nov 15, 2006, 2:53 AM
Aeromexico orders 2 Boeing 787s, 10 737s
The Associated Press
Boeing said today that Mexican carrier Aeromexico had ordered two of its new, fuel-efficient 787 jets and 10 of its narrow-body 737s.
The orders could be worth more than $900 million at list prices, although airlines typically negotiate significant discounts off the list prices.
Boeing said it was scheduled to deliver the two 787-8 airplanes in 2011. The 737-700 jets are scheduled to be delivered in 2010.
Aeromexico also has announced plans to lease three 787-8s from International Lease Finance Corp., and those planes are scheduled to be delivered in 2010. The 787 is scheduled to enter service in mid-2008.
Boeing had previously recorded the orders but had not attributed them to a particular customer.
Based in Mexico City, Aeromexico is Mexico's largest airline.
Nov 15, 2006, 7:59 AM
Microsoft signs on with Portland's Wi-Fi network
Microsoft will announce Wednesday that it has inked a deal with MetroFi Inc. to direct advertising to Portland's Wi-Fi network when the service launches early next month and to provide a locally oriented welcome page.
Terms of the pact won't be disclosed, but for MetroFi -- a startup based in the Silicon Valley -- a relationship with one of the world's best-known companies brings star power and potential revenue to its unproven business.
For more about the service, read the Business section of The Oregonian on Wednesday.
-- Mike Rogoway
James Bond Agent 007
Nov 17, 2006, 4:12 AM
Thursday, November 16, 2006
Boeing gets 29 new orders with list price of $5 billion
By Seattle Times business staff
Boeing announced 29 new jet orders on its Web site today, including 17 widebodies.
The value of the new orders is about $5 billion at list prices. However, with standard discounts the true value is closer to $3 billion, based on current market estimates by aircraft valuation company Avitas.
The orders included one for a VIP version of the forthcoming 787, generally sold to governments, big corporations or very wealthy individuals.
The customer for the biggest order, 15 777s, was not identified by Boeing, but in advance of the announcement the Wall Street Journal named the purchaser as General Electric Commercial Aviation Services, GE's aircraft leasing and finance unit. GECAS is the largest aircraft lessor in the world.
The Journal also said orders for a further 50 Boeing wide-body jets are in the pipeline and could be announced by year end.
If those orders materialize and are supplemented by the typical end-of-year rush of single-aisle orders, Boeing would be within reach of last year's record of 1,028 net orders. The tally stands now at 822 net orders.
The pace of orders on the commercial side, plus recent contract wins on the defense side, has boosted Boeing's stock, which was trading today within 80 cents of the record high of $89.58
Meanwhile, Airbus announced an order from Brazil's largest airline, TAM, for 37 jets, including six A330 widebodies. The order is valued about $3.2 billion at list prices, though the true value is less than $2 billion with standard discounts, based on Avitas' valuation estimates.
Earlier this month, formerly all-Airbus TAM placed its first Boeing order for four 777s.
James Bond Agent 007
Nov 17, 2006, 4:47 AM
Thursday, November 16, 2006
Washington's revenues up again; reserves now $1.9 billion
By DAVID AMMONS
AP Political Writer
OLYMPIA, Wash. – Washington's "strong but slowing" economy will produce another windfall of $57 million, driving the state's reserves to nearly $1.9 billion, state revenue officials said today.
Gov. Chris Gregoire will use the new projection from the state Economic and Revenue Forecast Council to write a new two-year state operating budget next month. She told reporters she wants to use some of the surplus for education and health care improvements.
"The revenue forecast reinforces that our economy is strong," she said. "We have to remain diligent and make smart investments based on what works and maintain an appropriate reserve."
ChangMook Sohn, the state's chief economist and the council director, said the new forecast amounts to "very minor fine-tuning" from the September estimate of revenue expected between now and summer of 2009.
Since March 2005, Sohn's forecasts have risen by more than $2 billion over expected levels, including $1.4 billion in the last two quarterly updates, primarily because of an unusual and unsustainable surge in housing.
The extra money erased budget office projections of a deficit in the next two years and started building up a sizable reserve.
The $1.88 billion reserve includes about $740 million that lawmakers set aside for pensions, education and health care for use in the upcoming budget. The current budget is about $27 billion.
Gregoire's budget chief, Victor Moore, wasn't turning backflips over the new numbers. Much of the money will be needed to pay for current-level services, labor contracts and new policy goals, such as health care and extending kindergarten to full day in more districts, he said. The governor also wants to leave a healthy reserve unspent, lest the state get on a "roller-coaster" cycle of spend-cut-spend, he said. He declined to give a target number.
Moore told reporters that many interest groups are looking for big budget increases, and that they needed to lower those expectations.
Sen. Joseph Zarelli, R-Ridgefield, the Senate Republicans' lead on the budget-writing panel, urged the Democratic-controlled Legislature and governor to create a constitutional "rainy day" fund and set aside some of the windfall.
The council chairman, House Finance Chairman Jim McIntire, D-Seattle, said the new money is nice after having to deal with huge budget gaps in recent years.
"It's nice to have a sunny day," literally and figuratively, he said as the heavy fall storms subsided outside for a while.
But he and other panel members joined in the call for budget restraint.
Sohn's views were mostly optimistic, though he said the expected cooling of Washington's once-torrid housing and construction sector is under way as he had long predicted. Earlier forecasts built in the prediction of slower growth.
"Clearly in terms of income and employment, the Washington economy is doing a lot better than the U.S. economy," he said. "We are enjoying a very strong economy."
Washington job growth has topped 3.6 percent in the last 12 months, compared with the 1.4 percent national rate.
Four high-wage sectors are leading the way, he said, referring to gains in software, construction, aerospace and professional and business services.
The new forecast adds $49 million more for the two-year budget period that ends in June, plus another $8 million in the upcoming biennium.
A look at Washington state's revenue update
Bottom line: State tax revenue is projected to rise an additional $49 million between now and June 30, 2009, compared with the September forecast.
Income: $27.37 billion is projected for the two-year cycle that ends next June 30 and $29.53 billion in the 2007-09 biennium that begins next July. That compares with $23.39 billion last biennium and $22.14 billion collected the biennium before that. The state has a $27.3 billion two-year state budget, counting savings accounts.
Updates: Revenue is expected to climb $49 million during the current two-year budget cycle and $8 million in the upcoming biennium.
Reserves: Nearly $1.9 billion.
Nov 17, 2006, 6:03 AM
Theres a whole segment on Nightline tonight about Burgerville as the model fast food restaurant chain that does things better than the mega-burger chains (local, seasonal, sustainable, quality, treats employees well, etc). This segment is a result of the new movie Fast Food Nation coming out tomorrow.
Nov 17, 2006, 12:00 PM
Dick's Burgers sends their employees to college-university. Not universally, but for a burger chain, they do so much.
Nov 17, 2006, 6:05 PM
Port approves rail projects to lure first-call carriers
by Libby Tucker
The Port of Portland this week approved a $2 million intermodal rail construction contract as part of a strategy to boost container shipping and convince carriers to make Portland their first port of call.
The contract, awarded to Battle Ground, Wash.-based Tapani Underground Inc., is the second part of a $6 million project that will place a new 7,500-foot track at the port’s Terminal Six container facility.
Linked to BNSF Railway and Union Pacific railroad lines, the new track will allow container trains to bypass switching operations on the existing lines and speed the arrival and departure of trains at Terminal Six.
“The intermodal service is one aspect of our portfolio that we have yet to capitalize on,” said Greg Borossay, general manager of liner development for the Port of Portland. “We really think that’s the next step for Portland.”
Earlier this year, the port added two new container carriers – Taiwan-based Yang Ming Marine Transport and Zim Integrated Shipping – bringing the total to three trans-Pacific lines moving goods through the port.
But Portland is still the carriers’ second port of call, with most ships unloading first at the Puget Sound ports of Tacoma and Seattle, which have greater cargo distribution capabilities.
Adding intermodal rail service to Portland’s Terminal Six is the first step toward convincing current and future carriers to transition into Portland as their first port of call, Borossay said.
“We’re already talking to carriers about that. We’re looking at attracting at least one more carrier,” Borossay said.
The project comes on the heels of a July announcement that the port will receive $6.8 million in ConnectOregon funds to develop the Ramsey Rail Yard, a six-track rail and switching yard that will serve all of the port’s terminals in the Rivergate industrial area.
Rail capacity is near its limit at the other West Coast ports, said Borossay, with hundreds of millions of dollars being spent to triple track rail service to the Midwest.
The Port of Portland, however, has plenty of space to expand its rail service to accommodate an estimated tripling of imports to U.S. ports by 2020.
“This turns the corner for us in making (Terminal Six) a sustainable franchise for containers and gets return on investment; you really lock in the carriers for the long term,” Borossay said. “It’s really a lynchpin for our strategy to break that (financial) cycle of boom and bust.”
Nov 18, 2006, 1:02 AM
Oregon grows by 58,720
Portland Business Journal - 10:35 AM PST Friday
Oregon's population increased 1.6 percent from 2005 to 2006.
The population grew from 3,631,440 in 2005 to 3,690,160 in 2006, or by 58,720, according to preliminary July 1, 2006, population estimates released by Portland State University's Population Research Center.
Most of the state's population growth in the past year was due to migration, with an estimate of about 43,355 migrants moving into the state. Approximately one-quarter of the Oregon's growth is accounted for by natural increase, with 15,365 more births than deaths.
Population growth in four counties (Clackamas, Deschutes, Multnomah and Washington) accounted for almost 60 percent of the state's overall population change from July 1, 2005, to June 30, 2006.
In the metropolitan Portland area, Washington County added an estimated 10,800 persons; Multnomah County, 8,720; and Clackamas County, 5,740.
The population in Deschutes County is estimated to have gained 9,125 persons.
The fastest-growing Oregon counties, in terms of percent change during the past year, are the neighboring Crook and Deschutes counties, estimated to have increased in population size by 7.7 percent and 6.4 percent, respectively.
The population of Oregon's cities and towns is estimated to have gained by 56,120 from 2005 to 2006, with a combined 2006 total of 2,552,670, and capturing about 70 percent of the state's population. Approximately 9 percent of the increase in Oregon's city/town population was due to annexations. There have been no incorporations this past year.
James Bond Agent 007
Nov 21, 2006, 9:21 AM
Tuesday, November 21, 2006
Boeing sells 25 more planes
Korean Air deal also includes options for 8 additional jets
By JAMES WALLACE
P-I AEROSPACE REPORTER
The Boeing Co. late Monday added a significant order to what already has been one of its best years ever for jetliner sales.
Korean Air plans to buy 25 passenger jets and freighters worth about $5.3 billion at list price. The order, expected to be firmed up within a couple of weeks, includes Boeing's 777 and 747-8 freighters that are still in development.
But the airline passed, at least for now, on the passenger version of the new 747-8.
Korean Air previously ordered five A380s from Airbus. That plane, which is two years late, is bigger than the 747.
A signing ceremony with Boeing, which took place in a Seoul, South Korea, hotel, came just a few days after the A380 visited South Korea as part of its final test-flight program. A person familiar with details of the Boeing order said Korean Air wanted to wait until the hoopla around the A380's visit had died down before announcing that it was buying the Boeing jets.
Korean Air will buy 10 777- 300ERs, five 777-200 freighters, five 747-8 freighters and five 737s. It also took options to buy four more 777-300ERs, two 747-8 freighters and two more 737s.
"The addition of Boeing's aircraft to our fleet will play an integral part in our development to become a leader in the world's aviation industry," Yang Ho Cho, the airline's chairman and chief executive, said.
Korean Air, the world's largest cargo carrier, already operates a number of Boeing jets in its fleet of more than 100 planes, including the 777-300ER as well as 747 freighters and passenger planes. The 777-300ERs will replace those 747 passenger planes, the airline said.
Last year, Korean Air ordered 10 of Boeing's new 787 Dreamliners for delivery starting in 2009.
Even before Monday's order, Boeing had sold more than 800 planes this year. It could end 2006 with more orders than its record sales of 2005, when it won 1,002 net orders.
Although Airbus has done well this year selling its single-aisle A320 family of jets, it has lagged far behind Boeing in the market for the bigger jets, where Boeing's 777, 787 and 747-8 freighter are dominating. Airbus has been hurt by delays in its A380 program and has not yet started development of the A350, a plane that will compete against the 777 and the 787. Last week, FedEx canceled an order for 10 A380 freighters, saying it instead ordered 15 777 freighters.
Boeing has not beaten Airbus in total orders since 2000, but even Airbus executives acknowledge they won't pass Boeing in orders this year.
Nov 21, 2006, 6:47 PM
Construction added 1,500 jobs statewide in October, despite worries the slowing housing market would weaken what has been one of the economy's strongest job engines.
Well, it looks like I'm just a steaming pile of shit then, since no one would hire me.
Nov 21, 2006, 8:19 PM
Nov 21, 2006, 8:19 PM
Russians grab Oregon Steel
Global giant Evraz Group agrees to pay $2.3 billion for the turnaround success
Tuesday, November 21, 2006
One of the world's biggest steel producers has agreed to buy Oregon Steel Mills Inc. for $2.3 billion in an attempt to snap up a Portland company enjoying one of the starkest industrial turnarounds in recent state history.
Nearly six years ago, shares of Portland-based Oregon Steel could be purchased for $1 apiece. On Monday, Russian steel maker Evraz Group offered $63.25 a share, a premium of 7 percent over the stock's closing price on Friday.
The buyout, which faces federal regulatory review, would place the futures of the 80-year-old company, its 680 Oregon workers and its 1,900 employees nationwide in the hands of two Russian tycoons who have operated in the steel business for less than 15 years.
It also would be one of the largest acquisitions of a U.S. firm by a Russian company.
Evraz said it would retain Oregon Steel's management, headquarters and work force, which engineered a turnaround propelled by skyrocketing prices for steel and a new focus on making products for the oil and gas industries.
The deal emerges as corporate buyout activity reached record proportions: $3.46 trillion on Monday, surpassing the 2000 record of $3.33 trillion, according to research firm Dealogic.
In agreeing to the deal, Oregon Steel leaped into the growing windstorm of mergers transforming control of one of the world's most basic commodities.
Earlier this year, India's Mittal Steel merged with Europe's Arcelor, forming the world's largest steel maker. Last week, Brazil's Companhia Siderurgica Nacional offered $8 billion to buy Anglo-Dutch steel maker Corus Group, topping an offer by India's Tita Steel Ltd.
Oregon Steel chief executive Jim Declusin said the deal came together over the past several months, with face-to-face meetings between the company's two top executives in the past six weeks in London and New York. He said he pursued the sale because he believes the steel industry can better withstand inevitable cyclical downturns with fewer owners.
"We have constantly looked at ways of consolidating," Declusin said. "There's going to be more to come."
News of the deal sent Oregon Steel's shares up $4.81, or more than 8 percent, to a close Monday on the New York Stock Exchange at $63.77 a share, slightly above Evraz's offer. The closing price suggests some shareholders thought another buyer might try to top it.
One analyst said Oregon Steel's product offerings and location as the West Coast's only producer of steel plate makes it attractive to other suitors, although he thought a bidding war unlikely.
"Another bid is possible," said John Rogers, an analyst with D.A. Davidson & Co. in Lake Oswego, who owns stock in Oregon Steel. "I just think first mover always has a lot of advantage."
Declusin said Oregon Steel's agreement with Evraz leaves open the possibility of another buyer. But the bidder would have to pay a $63 million breakup fee to Evraz, a hurdle Rogers called "significant."
Foreign companies have been vying for steel makers in the United States, where a steep downturn bankrupted more than 40 steel companies between 1997 and 2004. Wheeling-Pittsburgh Corp. is trying to merge with Brazil's CSN while fending off a hostile bid from Illinois-based Esmark.
Shares of U.S. steel makers moved higher for a second consecutive session Monday, driven by news of the Oregon Steel acquisition as well as a fresh spate of buyout rumors. Shares of Portland's other publicly traded steel company, Schnitzer Steel Industries Inc., rose 68 cents to close Monday on the Nasdaq stock market at $40.20.
The hit list of potential buyout targets includes U.S. industry leader U.S. Steel Corp., which has seen the price of its shares climb 12.6 percent over the past two trading sessions on the strength of an unconfirmed newspaper report that another Russian steel maker may be preparing a bid for the Pittsburgh company.
The Oregon Steel purchase already has the thumbs up from the company's board, which signed a pact with Evraz and has recommended shareholders accept it. The deal could close as early as 20 days after shareholders receive Evraz's offer in the mail over the next week. The purchase would cap a remarkable turnaround for Oregon Steel, which teetered on the verge of bankruptcy in 2003 when it reported a $126 million loss.
Analysts generally said the move appeared positive for both companies.
For Evraz, Oregon Steel offers a toehold in the U.S. steel market and a stable end user for its steel slab. Evraz can make 3.5 million tons of slab a year, Declusin said, while Oregon Steel can consume nearly 1 million of it.
For Oregon Steel, the purchase provides stability in a market full of giants and a source of cash. Declusin said the company is considering building a new rail-making mill in Pueblo, Colo. Evraz, Russia's largest rail producer, offers more resources and expertise to make such investment possible, he said.
Evraz, while headquartered in Luxembourg and traded on the London Stock Exchange, was founded in the 1990s by a Russian research physicist who slowly snapped up debt-ridden steel mills. Earlier this year, Russian billionaire Roman Abramovich bought a 41 percent stake in the company, which employs 100,000.
Among its holdings, Evraz owns iron and coal mines where it obtains the ores needed to make steel. It also operates a new, state-of-the-art steel-slab mill in Siberia, Declusin said.
Oregon Steel has purchased steel slab from Evraz since the Portland company shut down its steel-melting furnace in 2003. It reheats slab to produce steel plate used in heavy manufacturing and coil used in pipe making. Oregon Steel also makes large-diameter pipe for energy pipelines at a plant in Canada and a new $35 million factory in North Portland that started production this month. The new pipe operations were fabricated in China, then shipped here.
Declusin said he believes construction of proposed oil and natural-gas pipelines in North America will require 6 million tons of large-diameter pipe between 2008 and 2010. Oregon Steel, he said, is one of three manufacturers nationwide who can fill those orders.
Oregon Steel was founded by William G. Gilmore in 1926 as Gilmore Steel Corp. It changed its name to Oregon Steel Mills Inc. in 1987. Its went public in 1988.
Employees were still absorbing the announcement Monday, and some said they were unsure how to react.
"You can't feel much of anything if you don't know what's going on," said John Winborne, a metal tester.
His wife, Mary, said the news sent her back 25 years to when her husband was a welder at Portland's Union Carbide plant. The couple had just added three bedrooms onto their Portland home and a big chunk onto their monthly house payment when Norway-based Elkem Metals Co. bought the plant. Elkem closed the plant in 1982, leaving John Winborne unemployed. About the same time, Mary Winborne lost her job elsewhere.
"Pretty soon, it came down to making the house payments or feeding our kids," she said. "So the bank foreclosed and we lost our house. It was devastating."
In a letter sent to employees on Monday, Declusin said Evraz "has committed to provide pay and benefits to Oregon Steel employees no less favorable in the aggregate than our current pay and benefits for at least one year following the closing of the transaction."
The exception, according to the document, is that Evraz will eliminate a long-term incentive plan. The document said Evraz intends to launch a new incentive plan and will honor existing collective-bargaining agreements.
Richard Gretsch, a 33-year employee at Oregon Steel, said he was concerned about how the purchase would affect his retirement plans.
"I can't say for sure that is what's going to happen," said Gretsch, 62, Monday afternoon. "We're just kind of curious."
But as owner of 3,000 shares of stock, he stands to reap some financial reward from the sale. The bid, he said, reflects the globalization of the U.S. economy.
"They're one of our slab suppliers," he said of Evraz. "Our pipe mill is a Chinese-made product. Everything is becoming global."
Brent Hunsberger: 503-221-8359; firstname.lastname@example.org, http://atwork.blogs.oregonlive.com
Staff writer Alex Pulaski of The Oregonian contributed to this report.
Nov 28, 2006, 6:59 PM
600 to be laid off at Centralia mine
TransAlta, Canada's biggest publicly traded power generator, said it plans to shut a coal mine in Centralia and lay off 600 workers.
Centralia's open-pit mines can no longer be operated economically, Calgary-based TransAlta said Monday in a statement. The company, which operates coal-fired plants and mines in Alberta, bought the Centralia mine in 2000 from a consortium of seven Northwestern utilities, including Seattle City Light, Tacoma Power, Puget Sound Energy and PacifiCorp.
TransAlta will instead supply coal to its Centralia generating plant from Wyoming under an agreement with Rio Tinto and Peabody Energy.
Nov 28, 2006, 7:51 PM
Centralia is screwed... the whole population laid off.
James Bond Agent 007
Nov 29, 2006, 2:51 AM
Tuesday, November 28, 2006
Germany's Air Berlin says it is ordering 60 Boeing 737 jets
German budget carrier Air Berlin said today it is ordering 60 new Boeing 737 jets as it works to secure its future growth.
Air Berlin did not specify how much it would pay. However, the company also noted that its acquisition of German rival dba also included a purchase agreement for 25 other 737s from Boeing, and put the total list price at $5.7 billion for the 85 planes it expects to be delivered between 2007 and 2014.
Air Berlin, Germany's second-biggest airline after Lufthansa, recently acquired dba to expand its domestic business. The company said it was ordering the new aircraft to keep up with European competitors.
"By awarding this large contract, we are securing a favorable delivery price for the long term," CEO Joachim Hunold said in a statement. "The new planes are meant to replace expiring leasing contracts and to secure future growth."
Air Berlin currently has 62 planes in its fleet, while dba has 29.
James Bond Agent 007
Dec 2, 2006, 9:26 AM
I don't know how many remember the talk about a Rolls-Royce jet engine factory from late last year (or was it early this year?), but it looks like Washington isn't in the running anymore. :(
Dec 2, 2006, 5:22 PM
I don't know how many remember the talk about a Rolls-Royce jet engine factory from late last year (or was it early this year?), but it looks like Washington isn't in the running anymore. :(
This is what is so stupid about the state of Washington. If you know they are going to have to build a plant. If you know that you will already be getting tax money from the engines when the plane is in production. Then don't do stupid things like tax them on the test engines. All that does is create bad will from the company.
Stop biting the freaking hands that feed you. I'd have practically bribed them to come in and build it in one of the counties south of King.
Hub for an Empire
Dec 2, 2006, 11:39 PM
Good news for the Spokane Regional economy from the WorkSource Washington website:
Between October 2005 and October this year, the Spokane economy created 10,400 new jobs. That is more jobs created than for any twelve-month period in Spokane’s recorded history. More importantly, the jobs created over the year are across all sectors of the economy, although there is little doubt that Construction employment led the economy in job creation.
Dec 3, 2006, 7:32 AM
This is what is so stupid about the state of Washington.
Indeed - it seems that they basically lost the chance to win this plant in exchange for ~$8 million in possible taxes on the test engines... and somehow WA officials are acting surprised about this? Nice job Gregoire!
Dec 4, 2006, 5:28 PM
State leaders put focus on sustainability
Portland Business Journal - December 1, 2006
by Aliza Earnshaw
Business Journal staff writer
Two proposed new economic-development initiatives could focus national attention -- and federal funding -- on Oregon.
A wave energy initiative and a sustainability research center could also tap into a growing political will to reduce the United States' dependence on other nations for its energy.
The Oregon Innovation Council has proposed a $5.2 million grant to help set up a commercial wave-energy "park" at Newport for converting ocean waves into electrical power, and a $3 million grant for the Bio-Economy and Sustainable Technologies (BEST) Center.
The proposals are part of the council's recommendation for a $40 million economic stimulus package that includes supporting the food processing industry; workforce development and applied research targeted to manufacturing; an infectious disease and drug development research center; and $10 million for the already-established Oregon Nanoscience and Microtechnologies Institute.
Investing in clean energy can help Oregon jump into a market that's slated for strong growth. The worldwide market for biofuels, wind power, solar power, fuel cells and hydrogen should more than quadruple by 2015, reaching $167 billion, according to CleanEdge Inc., a research and consulting firm with offices in Portland, San Francisco and the Bay Area.
Wave power is still so new, it isn't included in CleanEdge's market growth estimates.
Concentrating development efforts on clean energy and other sustainable technologies would play into strengths Oregon already has.
"When I travel overseas, and mention I'm from Oregon, people say, 'That's where all the innovation is coming from,'" said Dennis Wilde, a partner at Gerding Edlen Development Co. who has been involved with planning for the new sustainability research center.
"We aren't capitalizing on this reputation yet," Wilde added, cautioning that "other cities and states across the nation want to claim that for themselves: Seattle, Chicago, even L.A., for heavens' sake."
A wave-energy park has the most immediate potential for economic results, said David Van't Hof, sustainability policy advisor to Gov. Ted Kulongoski.
That's because one commercial developer, New Jersey-based Ocean Power Technologies Inc., has already filed an application to set up energy-generating operations at Reedsport. At least two others are expected to file applications very soon.
"We are hoping it will create a significant number of new jobs," said Van't Hof, including new hiring at manufacturers like Clackamas manufacturer Oregon Iron Works Inc., to make the large buoys that capture wave energy and transform it into electrical power.
Wave energy is now "where wind was 25 years ago," said Ron Pernick, co-founder and principal at CleanEdge.
Wind power has grown rapidly over the past two decades, so much that Denmark and Germany now get more than 15 percent of their energy from wind farms.
It's unlikely that any single energy source or technology will dominate the market as petroleum has. What's more likely is that future energy needs will be met by whatever is economically feasible in a particular geography.
A new sustainability research center could play just as important a role as a wave-energy park in boosting new business.
The center would be a virtual one, like ONAMI, the first of Oregon's signature research centers. All four ONAMI partners -- the state's three research universities and Pacific Northwest National Laboratory in Richland, Wash. -- would be involved, as well as Oregon Institute of Technology in Klamath Falls.
Oregon State University has already done some important work in wave power, and plans a research center on the coast that would likely work with commercial wave parks.
Oregon State is also a center for research into bio-based products. OSU researchers created a new non-toxic adhesive, based on soy proteins, that research sponsor Columbia Forest Products Inc. now uses in its plywood products.
That's a great start, but there's still a huge need for sustainable building products, both here in Oregon and outside the state.
"We are constantly frustrated we have to go overseas for the environmentally responsible materials and systems we use in our buildings," said Wilde. And there's plenty of demand outside of Oregon for such products, too.
BEST would start with some advantages that ONAMI didn't have. Oregon was not known as a center for nanotech research several years ago, though ONAMI has gained national visibility very quickly.
But Oregon is certainly known nationally and internationally for green building, energy-saving construction methods and materials, and for work in "cellulosic," or bio-based fuels.
With this reputation, and a need to develop industries that can bring outside revenue into the state, "my sense is there's a lot of support on both sides of the aisle" for BEST and the wave-energy initiative, Van't Hof.
But that remains to be seen. The initiatives, along with other economic-development proposals, "represent significant funding, and there's competition from healthcare, education and natural resources," said Van't Hof.
"But we are optimistic."
Wave-energy backers look for state assistance
A proposed wave-energy "park" on the Oregon coast would be funded primarily by commercial developers, but state money could help accelerate the process.
Because a wave-energy developer might have to spend as much as $1 million to get a generating facility certified by the Federal Energy Regulatory Commission, the Oregon Innovation Council proposes that the state contribute 25 percent of the cost, up to $250,000.
Another state assist, the business energy tax credit, would help developers get through the early years when wave energy is so expensive to produce that the market won't support a profitable business.
Gov. Ted Kulongoski will ask the Legislature to bump Oregon's 35-percent, six-year credit to 50 percent for development of renewable energy.
"That would position Oregon extremely well" with wave-energy developers looking for sites, said David Van't Hof, the governor's sustainability advisor. Kulongoski and the state's economic development department hope that, eventually, four or five wave parks will locate along the Oregon coast.
Oregon has other advantages, some natural and some created. The Oregon coastline is unusual because deep water suitable for wave-power generation is located very close to shore, said Kevin Banister, a Portland employee of AquaEnergy Group Ltd., one of the companies interested in producing ocean energy in Oregon. That makes it more economical to lay undersea cable to transmit energy to land.
Oregon also has deep-water ports, making it easier to host the large ships needed to install offshore wave-generation equipment. Moving wave-generated power from the coast to inland customers would be easier in Oregon than in other locations, as a number of electric transmission substations are located close to the coast.
Oregon has an established metals industry that can build the buoys used for harvesting and transforming wave power right here in Oregon, saving on transport costs for the large, heavy pieces of equipment.
The state has the further advantage of an institution that is already recognized for its research into wave-power generation. Oregon State University is now planning a public research park at the coast which would likely work with private companies developing wave-energy parks off Oregon's coast.
Bringing a nano-focus to sustainability center
A new state-funded signature research center concentrating on sustainability would follow, to a large extent, the model created by the Oregon Nanoscience and Microtechnologies Institute.
ONAMI, the state's first signature research center, is really a virtual institute, a collaboration between Oregon's three research universities and the Pacific Northwest National Laboratory in Richland, Wash.
Some ONAMI research also includes Oregon Health & Science University and private companies such as Intel Corp., FEI Co., Hewlett-Packard Inc. and LSI Logic Inc.
The Bio-Economy and Sustainable Technologies Center, like ONAMI, would unite Oregon State University, Portland State University, University of Oregon and PNNL. The Oregon Institute of Technology, located in Klamath Falls and the first university to offer a bachelor's degree in renewable energy, would also be part of BEST.
Oregon InC. and the economic development department are identifying some of ONAMI's "best practices" to reproduce them at BEST.
Primary among these is the collaboration itself, which lends a competitive edge when competing for research dollars from federal agencies.
Established just three years ago, ONAMI, which has received a total of $28 million from state coffers, has pulled in $50 million in federal research funding for its projects, and about $15 million in private donations.
The institute is also nurturing several new companies based on research at ONAMI's partner institutions.
That level of activity, within such a short time, is what economic development officials would like to see from happen at BEST and another proposed signature research center that will focus on drug development for infectious diseases.
email@example.com | 503-219-3433
Dec 4, 2006, 5:56 PM
Over the past three decades, numerous groups and individuals, including virtually every Oregon governor and scores of politicians, have advocated widespread use of alternative energy sources such as wind, solar power and biofuels. Governor Kulongoski furthered this agenda by releasing his Action Plan for Energy in February 2006. The plan’s goals are for the state to meet 25% of its energy needs with renewable energy by 2025, to introduce a renewable portfolio standard (mandating the percentage of electricity derived from renewable sources) developed by the Oregon Department of Energy, and to increase state tax incentives for alternative energy. Furthermore, in March 2006, Kulongoski declared that all state agencies would run on 100% renewable energy by 2010.
“While renewable energy may seem desirable, there are a number of reasons why the state should stop mandating adoption of alternative energy sources. The most important is … that alternative energy sources are not currently viable.”
As the sixth-largest producer of wind energy in the country and a substantial investor in solar power and methane digesters (which use cow manure to produce electricity and more useful manure for fertilizer), Oregon is viewed as a leader in the alternative energy movement. A number of advocacy groups and government officials are pushing Oregon to adopt an alternative energy regime even more quickly. The current governor wants to build on Oregon’s reputation as an energy leader.
While renewable energy may seem desirable, there are a number of reasons why the state should stop mandating adoption of alternative energy sources. The most important is the fact that alternative energy sources are not currently viable. Even with today’s high energy prices, alternative energy is still not profitable, with the average unit of wind energy costing 12 cents/kilowatt hour (kWh) and solar energy costing 27 cents/kWh. The average national electricity cost is only 6.5 cents/kWh. Very little data on methane digesters is available, but optimistic claims assert that electricity would have to cost 8-10 cents/kWh to make methane digesters profitable. The simple fact is that alternative energy is not profitable in today’s market.
After the oil crises of the 1970s, a number of companies, such as Exxon, invested heavily in alternative energy, especially wind energy, and sustained heavy losses in the process. As a result, over the past 27 years, no large energy companies have done any significant research on alternative energy. While companies such as BP, Chevron and Royal Dutch Shell have been promoting themselves as clean energy companies, none of them have truly pursued alternative energy as a profitable business.
“A number of promising technologies are emerging in both alternative and traditional energies. … These technologies should succeed or fail on their own merits. …”
Subsidies, tax credits and grants have made it very easy for individuals and companies to purchase and install their own alternative energy generators. In a recent study by ECONorthwest, two of the three highest factors for commercial users in purchasing solar equipment are “Return on Investment and Rebates” and “Tax Credits.” In a recent Daily Journal of Commerce article, wind energy proponents admit that the government is necessary to build demand and to persuade consumers to purchase renewable energy. Studies on methane digesters tell the same story. Companies involved in methane digester projects, such as Portland General Electric, have decided they cannot fund these projects on their own in the future. Government aid, not the market, is the real engine driving the boom in alternative energy.
While alternative energy costs have fallen dramatically over the past thirty years, none have reached the level where any alternative energy source can compete with traditional forms of energy. Subsidies and tax breaks provide incentives to adopt alternative energy, inducing consumers to purchase goods that are simply not market-friendly. The Energy Trust of Oregon, for example, plans to spend $29.8 million subsidizing alternative energy this year. The organization is funded by a 3% sales tax on customers of Portland General Electric, Pacific Power & Light and Northwest Natural Gas and spent $53 million of taxpayer money in 2005.
A number of promising technologies are emerging in both alternative and traditional energies. The falling costs of wind and solar energy, improvements in methane digester technology, CO2-free coal plants, third- and fourth-generation nuclear power plants with improved safety designs, and many other developments and innovations are pouring out of laboratories, universities and companies performing research and development. These technologies should succeed or fail on their own merits, not because government officials and lobbyists in Salem or Washington, D.C. favor them.
by: Riazul Islam, A student of economics, history and mathematics at New York University’s Stern School of Business
Dec 4, 2006, 9:16 PM
...While renewable energy may seem desirable, there are a number of reasons why the state should stop mandating adoption of alternative energy sources. The most important is the fact that alternative energy sources are not currently viable. Even with today’s high energy prices, alternative energy is still not profitable, with the average unit of wind energy costing 12 cents/kilowatt hour (kWh) and solar energy costing 27 cents/kWh. The average national electricity cost is only 6.5 cents/kWh. Very little data on methane digesters is available, but optimistic claims assert that electricity would have to cost 8-10 cents/kWh to make methane digesters profitable. The simple fact is that alternative energy is not profitable in today’s market...
...While alternative energy costs have fallen dramatically over the past thirty years, none have reached the level where any alternative energy source can compete with traditional forms of energy. Subsidies and tax breaks provide incentives to adopt alternative energy, inducing consumers to purchase goods that are simply not market-friendly. The Energy Trust of Oregon, for example, plans to spend $29.8 million subsidizing alternative energy this year. The organization is funded by a 3% sales tax on customers of Portland General Electric, Pacific Power & Light and Northwest Natural Gas and spent $53 million of taxpayer money in 2005...
it would have been nice to see the information in this article without Riazul Islam adding in his personal commentary. While I agree that alternative energy currently is more expensive than say, coal, the article makes the assumption that upfront subsidies to alternative energy are the only energy subsidies the taxpayer are responsible for. However, the PGE coal plant has shown that taxpayer are on the hook for the pollution created by the coal plant. Somebody is going to have to pay to clean the Gorge air that now is so polluted that when it rains, it frequently rains ACID RAIN. ACID RAIN, in our Gorge!!! It isn't cheap to restore the harmed ecosystem so even though Oregon is subsidizing a rather small $29.8 million for alternative energies, the traditional energies are going to have a much larger back door subsidy to clean up the sludge they produce in the environment...and that is just one subsidy traditional energy requires.
Dec 4, 2006, 9:25 PM
Even with today’s high energy prices, alternative energy is still not profitable, with the average unit of wind energy costing 12 cents/kilowatt hour (kWh) and solar energy costing 27 cents/kWh.
Oh, pasture-pies. This is one of my businesses, and wind can be as low as 5 cents. Only catch is, height limits preclude wind turbines for the whole state, without special dispensation.
There is so much dysinformation about alternative energy, and with just a little checking it can almost always be traced back to Big Oil and their front organizations and PR companies.
Dec 6, 2006, 5:04 PM
Kulongoski's to-do budget boosts spending by 20%
More cash - The governor's economy-driven plan relies on two corporate and two household-related taxes
Tuesday, December 05, 2006
BETSY HAMMOND, HARRY ESTEVE and MICHELLE COLE
SALEM -- Oregon would spend 20 percent more in the next two years, including a $1.1 billion increase for education and a $700 millon jump in health care and human services, under a budget unveiled Monday by Gov. Ted Kulongoski.
The proposed increases, gargantuan compared with any budget since 1999, drew praise from Democratic lawmakers and educators, and muted criticism from Republicans.
Rising revenues from an improved economy mean the state can pay to maintain all its current programs, pump $820 million into expanded programs and services, and still sock away $500 million in savings, the governor said. But he will need the Legislature to agree to raise corporate taxes, he said.
"For the first time in nearly a decade, we can do more than simply make ends meet," an ebullient Kulongoski said.
He proposes smaller class sizes; Head Start for every low-income child; adding 139 state troopers; expanded health insurance, mental health care and addiction treatment for the poor; a 25 percent increase in prison spending to accommodate more inmates; and the biggest round of university construction since World War II.
Total spending proposed by Kulongoski: $14.9 billion in 2007-09.
The single biggest chunk -- $6.06 billion -- would go to schools, giving them 13 percent more per student than in the current state budget.
Education leaders expressed confidence that the extra money will help them raise achievement, get more students college-ready, and improve high school and college graduation rates.
Still, school advocacy groups were quick to say it's not enough, requesting $240 million more than the governor proposes.
Bruce Goldberg, head of the Department of Human Services, predicted expanded treatment for drug- and alcohol-addicted parents will mean fewer children end up in foster care. He said providing state health insurance to 115,000 more children and adults will help lower everyone's health care costs.
Kulongoski's budget plan goes to a Democratically controlled Legislature that convenes Jan. 8. It relies on four tax increases -- two to be paid by corporations and two by households.
Cigarette taxes would rise 84 cents to $2.03 a pack, drivers would pay a surcharge on auto insurance, and corporations would forgo their $275 million "kicker" rebate for 2007 and pay a higher minimum corporate tax. Together, the four taxes would raise nearly $600 million in 2007-09.
Reaction varied among lawmakers, with Republicans disputing the need for higher taxes and Democrats offering cautious to enthusiastic support.
Former state House Speaker Larry Campbell, now an influential Republican lobbyist, said Kulongoski has one of the best opportunities of any governor in decades to pass the budget he wants.
"There's plenty of money. The governor has his party in power," Campbell said. "I think it will go well for him."
Under Kulongoski's plan, the corporate kicker would be diverted into a rainy day account and the corporate minimum tax would be raised from $10 to $250 or more, primarily to put every qualifying 3- and 4-year-old into Head Start.
The cigarette tax would rise to $2.03, tied with Washington for third-highest in the nation, primarily to pay for 100,000 uninsured children to get health and dental insurance. And he would tax auto insurance to create a dedicated funding source for state troopers.
House Minority Leader Wayne Scott, R-Canby, criticized the governor for trying "to spend everything the state has and raise taxes to pay for the rest of the items on his shopping list."
Scott said he's hearing "mixed support" for raising the corporate minimum tax and funneling the corporate tax kicker into a rainy day fund. He said both proposals could hurt the state's economy.
But Senate Revenue Chairman Ryan Deckert, D-Beaverton, said raising the corporate minimum tax and diverting the corporate tax kicker into a rainy day fund have a "broad swath of support" among lawmakers, the business community and the public.
The governor said voters' overwhelming rejection of Ballot Measures 41 and 48, which would have lowered income taxes and limited state spending, shows they are in the mood for more services that raise the quality of life in Oregon.
"We had a defining election in terms of really reinvesting in the education infrastructure," Deckert said.
Scott gives the governor's proposed cigarette tax the best chances among the tax proposals.
Both Scott and Deckert said there is little support for taxing auto insurance.
"A lot of us would like to end the session without raising the taxes on working families in Oregon," Deckert said.
Even without the insurance surcharge, Oregon can afford to hire 139 new troopers because of surging income tax revenues, the governor said.
The governor also proposed a 65 percent increase in funding for enforcement and protection by the Department of Environmental Quality. Conservationists cheered his plan to increase state funding by $17 million after years of cuts.
A gush of money to spend after years of cutting services could prompt infighting within the parties over which priorities to fund, warned veteran education lobbyist Chuck Bennett.
But Senate Ways and Means Chairman Kurt Schrader, D-Canby, predicted quick agreement: Democrats "will probably argue over some nuances, but we'll have to look hard to argue."
Senate-elect Larry George, R-Sherwood, one of just three new Republicans to win a seat in the Legislature, shook his head over the size of the proposed increase in state spending but said it would be hard to stop.
Voters re-elected a Democratic governor who pledged to raise taxes and gave him Democratic majorities in both chambers, he noted.
"It's amazing to me we're talking about a 20 percent increase and we're still talking about raising taxes," George said.
Betsy Hammond: 503-294-7623; firstname.lastname@example.org
James Bond Agent 007
Dec 6, 2006, 10:11 PM
Big news for Boeing:
Wednesday, December 6, 2006
Lufthansa orders 20 updated 747s
By JAMES WALLACE
In a huge statement in the aviation world that its 747 passenger plane is not yet ready to fade into history, The Boeing Co. has won its long-awaited first order for an updated version of the venerable jumbo jet. Lufthansa Airlines has agreed to buy 20 planes and take options on 20 more, the airline said in a statement Wednesday morning. The official announcement came after the airline's board met in Germany.
In a statement, Lufthansa CEO Wolfgang Mayrhuber called the 747-8 a "highly modern" plane. "The Boeing 747-8 is more than just a derivative of the successful Boeing 747 series."
The airline will be the world's first carrier to operate services with the new wide-body -- the longest passenger jet in the world. In the Lufthansa configuration, the 747-8 will be capable of carrying about 400 passengers.
"The 747-8 underlines our strategy of graded market-specific services and capacity expansion. It fits perfectly in our intercontinental fleet structure and slots neatly capacity-wise between the A380 with around 550 seats and the A340-600 with around 300 seats," Mayrhuber said.
The order, worth about $5.6 billion at list prices, is another blow to Airbus and its A380, a 555-passenger superjumbo that is two years late.
Airbus executives had once boasted that the A380 would be the end of the 747. Although Boeing has not had an airline order for the 747 passenger plane since China Airlines ordered four in November 2002, the 747-8 freighter has been making a strong showing lately, and the Lufthansa development could kick-start a flow of orders for the 747-8 passenger plane.
Meanwhile, Airbus has lost two key customers for the freighter version of the A380 and may be forced to postpone that program. And sales of the A380 passenger plane have slowed dramatically.
Lufthansa, a key Airbus customer in Europe, previously ordered 15 A380s. Only Emirates has ordered more A380s than Lufthansa.
"You have a heavily European Airbus-flagged carrier basically launching the airliner version of a competing airplane," Richard Aboulafia of the Teal Group, an industry consulting firm in Fairfax, Va., said Tuesday of the pending Lufthansa order for the 747-8 Intercontinental.
"That would be a profound statement," he added. "Lufthansa is the second-biggest A380 customer and a longtime Airbus believer."
Boeing last year officially kicked off development of the 747-8 as a freighter and passenger plane. Boeing has more than 40 orders for the freighter, due to enter service in 2009. But no airline has ordered the Intercontinental passenger plane, which would be ready in 2010.
The 20-plane order is worth about $5.6 billion at the $277.5 million average list price of the Intercontinental. But Lufthansa is probably getting a discount of perhaps 30 percent or more off the sticker price.
The 747-8 Intercontinental will have new fuel-efficient engines that are being developed for the 787 Dreamliner. It also will have an improved wing and other structural and aerodynamic changes that will make it far more efficient to operate than the current 747-400. The bigger 747-8 Intercontinental will seat 467 passengers, or about 50 more than the 747- 400.
Aboulafia said the Lufthansa order is likely to speed further sales of the 747-8 Intercontinental.
"It could break the logjam," he said. "A lot of perception about a plane depends on blue-chip endorsements like this."
Emirates and British Airways are two potential 747-8 customers that have expressed interest in the passenger plane.
In addition to helping Boeing sell more the 747-8s, the order from Lufthansa would be a blow to the A380, Aboulafia said.
"This has been a bad week for the A380," Aboulafia said, noting that International Lease Finance Corp. said Monday that it had changed its mind about ordering five A380s freighters. Instead, the world's largest aircraft leasing company will take an additional five A380 passenger planes, doubling its order total for that model to 10. But ILFC said it will delay delivery of those 10 A380s for several years.
FedEx, the launch customer for the A380 freighter, announced last month it had canceled its order for 10 planes. Instead, FedEx placed firm orders for 15 Boeing 777 freighters, with options for 15 more.
Airbus has won 149 firm orders for the A380, but 43 of those are from one customer -- Emirates. Two of the 15 A380 customers, Qantas and Singapore, have said they will order additional A380s.
But Boeing is dominating Airbus in sales for widebody jets this year, just as it did in 2005. In addition to the success of the 747-8 freighter, the two-engine 777 has all but eliminated the four-engine Airbus A340. Airlines say the Boeing plane is much more fuel-efficient. Boeing's 787 Dreamliner has more than 400 orders even though it won't be ready for airline service until May 2008. Airbus will counter the 787 and 777 with the two-engine A350, but that plane only last week got the development green light and won't be available until at least 2013.
"The order (from Lufthansa) is another example of the shift in twin-aisle market share in Boeing's favor," Ronald Epstein of Merrill Lynch said in a research note to clients Tuesday.
"We believe this order represents a coup for Boeing, given Lufthansa's position as Germany's flagship carrier," he said. "While the order does not signify the cancellation of the airline's orders for the A380, the news is positive for Boeing as the A380 was hailed as a replacement for the 747."
Epstein said he expects additional Intercontinental orders to now come from Europe and North America in 2007 and 2008.
The 747 first flew in 1969. Airbus was born in May of that year, when its original French and German partners signed an agreement creating the consortium. Since then, Boeing has sold more than 1,400 747s.
Only two U.S. airlines, Northwest and United, still operate 747 passenger planes, but both are potential customers for the 747-8 Intercontinental. United has made it clear it has no interest in the A380. Some of the other U.S. legacy carriers also could decide to take another look at the 747, a plane that Airbus not too long ago was dismissing as a relic.
Dec 6, 2006, 10:30 PM
Man, what is going on?
I am starting to feel sorry for Airbus.
It is never good to have only one provider, of anything.
Dec 11, 2006, 6:00 PM
An enterprising marketing effort
The city of Portland's aggressive outreach lures businesses to its enterprise zone
When the Portland Development Commission stepped up efforts to inform businesses about a program that rewards job creation with tax breaks, the businesses listened.
Before the push to educate the industrial community about the merits of investing in an enterprise zone covering much of North/Northeast Portland, the PDC had typically granted breaks to three of four new or expanding businesses per year in the 10 years since the zone was created.
This year, on the heels of an aggressive outreach effort with an assist from a strong economy, the enterprise zone program has added 10 companies and expects to add 12 more by the end of the year, said PDC's Seth Hudson, senior economic development manager and manager of the North/Northeast Enterprise Zone.
Among the new participants to sign on this year: Advanced American Construction, Oregon Steel Mills and Oregon Transfer Co.
The zone currently has 20 active participants who together intend to invest $222.4 million in new buildings and equipment. They will generate 2,100 new jobs and receive an estimated $12.4 million break on property taxes that would have been assessed on the new value of their businesses. The tax breaks last for five years.
The zone hit another milestone this year with the addition of a special "e-commerce zone" overlay, which rewards Internet-oriented companies with income tax breaks for investing in computers, software and related gear.
It gained its first customer, Opus Interactive, which has spent $662,000 on new facilities and a data center in recent months.
Portland's enterprise zone isn't the only one to prosper in the past year. There are 55 such enterprise zones scattered across the state and activity is on the rise in most of them, said Art Fish, business incentives coordinator for the Oregon Economic and Community Development Department.
Enterprise zones are a legal construct created by the state to spur business investment. They are implemented locally by cities and counties.
In essence, the enterprise zone program gives manufacturers a temporary property tax break for investing in new buildings and equipment if the investment results in new, well-paying jobs.
The zones typically are situated in economically distressed areas with an industrial bent. The e-commerce zone gives income tax breaks to Internet-oriented companies like Opus Interactive that invest in software, computers and network gear.
According to an annual report on the program issued this week, enterprise zones have generated 5,884 new jobs, 53 percent more than a year ago. Fish expects the numbers to climb in the next few years as projects in development are completed and business operations begin.
"We're looking at on the order of a 50 percent jump," he said.
In Portland, the North/Northeast zone covers an area bordered by Interstate 205 and Forest Park to the east and west, and by the Columbia River and I-84 to the north and south. It was amended this year to include Opus Interactive, which is in Northwest Portland.
The biggest new investment in Portland is Oregon Steel Mills, which plans to spend $72 million on new facilities and to add 390 people to its payroll. In exchange, it will get a $3.69 million break on its property taxes.
Not every newcomer is as large as Oregon Steel. The class of 2006 includes Triad Mechanical, which will invest $500,000 and add 29 employees, for a tax break worth a little less than $28,000.
email@example.com | 503-219-3415
Dec 12, 2006, 9:10 PM
Office, commercial realty outlook 'great'
By DAN RICHMAN
The region's office, industrial and commercial markets will expand in 2007, making it a good year to be a landlord in Seattle but a tough time to be a tenant, according to a major real estate brokerage.
"Overall, the forecast for '07 looks great," said Grubb & Ellis Senior Vice President Craig Hill. "The market is extremely strong."
Employment in the Puget Sound region is expected to grow by 2.5 percent in 2007 and by 2.3 percent in 2008 -- more than twice the projected national average. That means strong demand for office space.
Yet vacancy rates, which today are about 7 percent in downtown Bellevue and about 10 percent in downtown Seattle, will drop next year -- "perhaps even precipitously, and more in Seattle than in Bellevue," Hill said.
Not much new office space will come onto the market to satisfy the growing demand. Only one major building, Lincoln Square, is slated for completion on the Eastside, and no major building will be completed in Seattle.
Add that all up and it yields rental rates -- already $30 to $32 per square foot for the nicest buildings -- that will increase by between 7.5 percent and 10 percent next year, Hill said. Of course, as rents climb, concessions to tenants, such as improvement allowances, tend to decline.
"If you're a landlord, the office market is the place to be," Hill said.
Helping to ease the office-space drought, 2 million square feet of construction will get under way in Bellevue by the end of 2007. In Seattle, developers haven't made it clear how much construction will be under way in 2007, said Grubb & Ellis research analyst Nick Papa. But seven buildings are planned for availability in 2008 and 2009, he said.
In the industrial segment, the main concentration of local real estate -- located in the Kent Valley, including Renton, the Port of Tacoma and Fife -- next year will continue its current vacancy rate of 6.5 percent, said Brian Dennehy, a senior adviser at the brokerage.
Within the past 18 months, about 3 million square feet have been built or begun in the Kent Valley, intended for use by distribution facilities of more than 200,000 square feet.
That means "tenants seeking warehouse or distribution space will find a glut" to choose from, at rents flattening out to about 50 cents per foot, he said.
The Boeing Co.'s first 787, due out in late summer, may prompt subcontractors to relocate to industrial property north of Seattle, Dennehy said. But power shortages in one area of Snohomish County may slow further development.
In Sodo, Georgetown and other traditionally industrial areas of South Seattle, vacancy rates remain low, at 3.5 percent to 4 percent, as they have for the past 10 years. As retailers replace manufacturers, which move out because labor is so much cheaper elsewhere, land values are rising in those neighborhoods.
It's reaching $30 per square foot on First Avenue South and Fourth Avenue South -- unjustifiably high for distribution or manufacturing, Dennehy said.
Parking is getting tight, and many older buildings are being bought up by developers.
"There's a demand for other than straight industrial uses. It's going to be interesting to see what happens," he said.
Most recently, a partnership of Kauri Investments, American Life and Ariel Development bought the six-story Palmer Court building in Sodo, plus an adjacent 10,000-square-foot lot, from Vulcan Inc. for nearly $8.9 million. Kauri Chief Executive Kent Angier said plans call for putting the refurbished building's 57,000 square feet of office space and 10,000 feet of retail space on the market early next year.
In the commercial arena, sales of Puget Sound-area land and buildings to retailers are projected to rise 5.2 percent next year and 5.7 percent in 2008. More locally, Seattle's lack of developable land remains an obstacle to retailers seeking large commercial sites, said Senior Vice President Jane Lanford.
One major project she said is under way is a 600,000-square- foot retail center near Goodwill Industries at Rainier Avenue South and South Dearborn Street, built by Ravenhurst Development and TRF Pacific.
Most of the area's commercial development is occurring south of the city, with 800,000 square feet being built at Renton's The Landing; 400,000 square feet being added to Westfield Southcenter; the construction of Federal Way Crossings, a 250,000-square-foot shopping center across from Costco; and 80,000 square feet being added to the current Kent Station mall.
On the Eastside, Bellevue's Shops at The Bravern has added the first Neiman Marcus in Washington as its anchor tenant -- a clue to where one famously upscale store believes the megabucks are to be found.
"Based on demographic profiling, obviously there's more money on the Eastside than in Seattle these days, and that's not expected to change," Lanford said.
Low vacancies, land prices and construction costs are pushing retail rents up to $45 or more per square foot, she said.
In a fourth arena -- investment -- the real estate market could face higher interest rates next year, Grubb & Ellis said. Office buildings may be among the most popular investments, because of strong job growth and rising rental rates, Hill said.
Dec 12, 2006, 11:02 PM
Windy city? Not yet for PDX
by Alison Ryan
The city of Portland’s efforts to purchase 100 percent of its municipal electricity from renewable sources are ongoing, despite hopes that a contract would have been finalized more than a year ago.
The city’s Office of Sustainable Development in May 2005 issued a request for proposals (RFP) for a 100 percent renewable electricity product for all municipal electricity – which amounts annually to about 140 million kilowatt hours, or enough to power 13,000 homes.
“This is a very complicated transaction, and it involves a lot of money, a lot of financing,” said David Tooze, a senior energy specialist at the Office of Sustainable Development and project manager on the renewable purchasing effort. “We spend about $13, $14 million per year on electricity bills.”
The process is more complicated than players in the effort had anticipated. In fall 2005, Jeff Cogen, Commissioner Dan Saltzman’s then-chief-of-staff, anticipated inking a contract with wind-farm developer Horizon Wind Energy, which made the city’s top-rated proposal, in November 2005.
The city is now in contract negotiations with Scottish Power subsidiary PPM Energy, whose proposal was ranked third of six submitted after a 2005 request for proposals.
“We’re in the last stages of trying to work out their second proposal,” Saltzman said. “Increasingly we’re frustrated, and we may just go out for a new RFP.”
In August of 2005, the city announced intentions to enter into a contract with Horizon, whose proposal was scored highest by a selection committee. That proposal called for meeting the city’s energy needs through development of a wind farm in Eastern Oregon’s Union County, south of LaGrande. But the company, Tooze said, failed to meet the pricing target the city had set internally. Negotiations ended. Tooze declined to say how far the sides were apart.
The city then moved into negotiations on the second-highest scoring proposal, made by retail energy supplier Sempra Energy Solutions partnered with PPM, which is based in Portland and develops wind projects. Talks continued for almost a year – but, again, Tooze said, “price was the issue that ended up causing us to end negotiations with them.”
In November 2006, the city started negotiations with PPM on its solo proposal – a different model than its joint effort with Sempra Energy Solutions.
The current effort is centered on a contract for differences (CFD) – a type of contract with fixed and variable pricing that’s common in financial markets but hasn’t been widely used in connecting renewables with retail customers.
“The process is complicated, but it’s a common tool in a different setting” Tooze said. “Our investigation now is to see if that contract-for-differences building block can be utilized to bring a renewable product, or renewable energy credits associated with their power, to the city.”
The CFD would see the city purchase the output of a PPM wind farm in north-central Oregon’s Sherman County through financial incentives rather than physical delivery of power. The company’s Sherman County wind-farm projects include Klondike I, Klondike II and the under-construction Klondike III.
The complex process, Tooze said, would ultimately save the city money. Portland could simply purchase renewable energy certificates, like those available to consumer and corporate customers. But the premium the city would pay, he said, for an easy-to-buy solution would be significant.
“We’re talking 100 percent renewable for a large customer,” he said. “Because of that, the premium we would pay increases sharply. We’d be looking at a cost of $1.5 million per year to achieve our renewable goals.”
The city, through its Office of Sustainable Development, originally issued a request for information on renewable energy options in December 2004. The request for information and ensuing RFP were the city’s first major steps toward meeting renewable commitments outlined in a 2001 global warming action plan issued by the city and Multnomah County. The plan calls for the city to purchase 100 percent of its electricity load from renewable sources by 2010.
The needs of Multnomah County, which has an electric load that’s about half the city’s size, could be part of a new request for proposals. Saltzman said he and Cogen, recently elected a county commissioner, had discussed the possibility.
“It would be my hope,” Saltzman said, “that we could actually combine the county’s load to make it a more-enticing project.”
The project team, Tooze said, is pleased with the PPM team it’s negotiating with now. But they still have a long way to go until the CFD model is understood, he said, and a contract is signed.
“But we’re optimistic,” he said, “that we’ll come to a model that works good for the city as well as the private-sector party.”
Dec 13, 2006, 12:14 AM
Airbus isn't doing as badly as the media has been portraying lately. Boeing and Airbuses' roles were reversed a couple years ago, but their still fairly even, here's an article from a few weeks ago in the Everett Herald.
Boeing No. 1 again
By Michelle Dunlop
EVERETT -Boeing is back on top.
The Boeing Co. gobbled up a greater share of the commercial jet market this year as conceded by competitor Airbus on Wednesday.
In 2006, Airbus saw the value of its orders shrink to 36 percent, down from 45 percent last year. But Boeing's European rival still predicted a different outcome for the future of the global aircraft fleet in its long-term forecast.
Airbus anticipates a need for almost double the number of jumbo passenger jets than does Boeing but fewer aircraft overall.
Airbus' newly released 20-year outlook reflected a greater demand for new aircraft than had its 2004 forecast. The plane-maker with headquarters in Toulouse, France, now says that airlines around the world will require 22,700 new jets worth $2.6 trillion by 2025. It previously forecast 17,300 planes needed by 2023.
"The forecast shows that aviation is a strong growth industry and one which is also vital for the development of the world economy," said John Leahy, Airbus chief operating officer.
Boeing, which released its 20-year forecast earlier this year, still expects to see a greater number of aircraft deliveries by 2025 with 27,210 planes. Unlike its rival, Boeing believes airlines will put into service more 200- to 400-seat jets, like its 777 and 787 models, and fewer very large jets like Airbus' A380.
Although Boeing is on track to best Airbus this year in total orders, Airbus' Leahy maintains that the European company will still deliver more aircraft than its American competitor in both 2006 and 2007. Airbus has logged 619 orders this year compared with the 822 that Boeing accounted for as of Nov. 15.
Airbus set an industry record last year with a total of 1,111 orders, compared with Boeing's 1,002. But its share by value fell to 45 percent, from 54 percent in 2004, as its widebody A330, A340 and planned A350 planes lost ground to Boeing's 777 and 787.
Both aircraft manufacturers' forecasts highlight the emphasis they're putting on their newest planes.
The first Boeing 787 Dreamliner, a line that accommodates 210 to 330 passengers, should be delivered in 2008. Just last month, Airbus announced the third delay on its 555-seat A380, now scheduled for its first delivery in October 2007.
The decline of Airbus orders puts pressure on the company to launch its A350, a badly needed rival to the 777 and the 787. A decision is expected by the end of the month.
"Speaking on behalf of the world's airlines, I'm getting a lot of requests for the A350 right now," Leahy said.
Coincidentally, on Wednesday, Randy Baseler, vice president of marketing for Boeing Commercial Airplanes, posted his thoughts on the A350 on his blog. Based on the information released on the A350, Baseler believes Airbus' answer to the 787 Dreamliner "still lacks answers to several key technological questions for an airplane entering service as much as 8 or so years from today."
Without the A350, Airbus will have to try to cover the 200- to 400-seat market with just one airplane family, Baseler wrote. Something he considers "very difficult to do."
The Associated Press contributed to this report. Plane forecasts Here’s at look at the forecasts for jet sales through 2025 from the Boeing Co. and its rival Airbus. Total demand Boeing: 27,210 planes worth $2.6 trillion. Airbus: 22,700 planes worth $2.6 trillion. Single-aisle (737/A380) Boeing: 16,500. Airbus: 15,300. 200 to 300 seats (767/787/A330, A340, A350) Boeing: 3,030. Airbus: 3,745. 301 to 400 seats: (777, 787/A340-600, A350) Boeing: 2,770. Airbus: 1,522. Jumbo jets: (747/A380) Boeing: 650. Airbus: 1,263. Freighters Boeing: 770. Airbus: 803. Note: Boeing also estimates 3,450 regional jets will be needed. Airbus’ estimates include its regional jet predictions.
Dec 18, 2006, 9:24 PM
Weyerhaeuser closes two veneer plants in Oregon
PORTLAND — Weyerhaeuser said today that it is permanently closing two veneer plants in Oregon and cutting more than 100 workers at those sites.
The company said shrinking demands for veneer products drove the gradual reduction and closure of the plywood mill in Springfield and a veneer plant in Coburg. The closures are effective immediately.
Cathy Slater, vice president of veneer technologies said the decision was difficult.
"There's a shrinking demand for plywood panels because of the decline in housing starts and the increase availability of alternative products," Slater said.
The 128 employees affected by the closures will get severance packages. Weyerhauser employs approximately 4,000 people in Oregon.
The company had curtailed business at both mills for the for the past year. The Springfield plywood mill has been operating on a reduced shift schedule since January. And work at the Coburg plant has been trimmed back since Oct.
The two plants will be decommissioned during the next few months.
James Bond Agent 007
Dec 19, 2006, 11:02 PM
Washington unemployment rate creeps back up again.
State's job growth slows; unemployment up to 5 percent
By Drew DeSilver
Seattle Times business reporter
Job growth in Washington state slowed last month, and new workers poured into the job market faster than employers could absorb them.
The state gained 4,900 nonfarm payroll jobs in November, down from the revised figure of 7,200 added in October. Unemployment edged up to 5 percent, from 4.8 percent in October, even though labor force participation grew to 67.5 percent, from 67 percent in October.
A year earlier, the seasonally adjusted unemployment rate stood at 5.4 percent.
The state's economic expansion is in its mature phase, said Evelina Tainer, chief economist for the state Employment Security Department's Labor Market and Economic Analysis Branch.
"Going forward, we are going to see slower growth," Tainer said. Several key employers, including Paccar, TransAlta, Longview Fibre and Icos, already have laid off workers or announced plans to do so; those job cuts will show up in future jobs reports.
Aerospace continued to be a high point of the state's economy, gaining 800 jobs in November; over the past 12 months, the sector has added 5,500 jobs, for a year-over-year growth rate of nearly 8 percent. But other manufacturing sectors showed gains too, albeit smaller ones.
Other sectors that added jobs last month included transportation and warehousing (+1,300), miscellaneous administrative and office-support services (+1,100), specialty construction contractors (+700), and temporary-help agencies and other "employment services" companies (+700).
Despite the approaching holiday shopping season, general merchandise stores actually lost 1,100 jobs in November; most other retail categories were either flat or showed only small gains. Tainer speculated that the retail data could reflect the difficulties faced by many mainline department stores -- including Mervyn's, which is pulling out of the state completely. In addition, she said, strong retail hiring earlier this year may have reduced the need for seasonal workers.
Dec 31, 2006, 9:56 PM
From steel to tech to finance, Northwest companies shine
The Oregonian 50 index, up 17.9 percent,
Sunday, December 31, 2006
From heavy industry to high technology, Oregon's largest companies popped the cork on a good year for stock prices in 2006.
Oregon Steel Mills Inc., Mentor Graphics Corp., Rentrak Corp., Cascade Bancorp and PW Eagle Inc. led the pack, each with gains of 68 percent or more. With a few exceptions, Northwest stocks smiled on investors in all sectors.
The Oregonian 50 index rose 17.9 percent this year, compared with 13.9 percent for the broadest possible measure of the entire U.S. stock market, the Dow Jones Wilshire 5000 index. The Oregonian's list is a price-weighted index made up of the 50 largest companies by market capitalization based in Oregon and Southwest Washington.
Oregon Steel -- based in Portland but headed for Russia if its proposed sale to the Evraz Group is finalized -- gained 112 percent. Bend-based Cascade Bancorp expanded to Idaho and rose 68.6 percent. They led their industries and have been among top Northwest performers for three years straight.
Mentor Graphics is a different story. It hit the downside of a cyclical bump in 2005 that shook 32 percent off its share price, setting it up for a big comeback in 2006.
As if planned for Mentor's 25th anniversary, the stars aligned this year for the Wilsonville developer of products used in the design of computer chips and software.
"It's been quite a successful year," says Mentor's chief executive, Walden C. "Wally" Rhines.
Mentor's stock price increased gradually from $10 at the first of the year, then broke out in October when the company raised its profit projections for analysts and closed the year up 74.4 percent. Mentor expects that its earnings this year will be up 80 percent on revenues that will grow by 10 percent. Its bookings for new business are up 20 percent from 2005 levels through the third quarter.
"It's due to a combination of things," Rhines says of Mentor's good year. "We invested in new emerging technology, the design software industry has been strong and the semiconductor industry is increasingly healthy."
New technology that enhances optical resolution, developed at Mentor, has been a hit with customers who use it to increase their chip manufacturing yields.
The company has also managed to stay out of trouble during a year when reporters and regulators sniffed out and found problems with other tech companies that backdated stock options to boost executive compensation.
"We did a total audit and found no problems with options dating," Rhines says. An October study of local companies' practices by The Oregonian found potential problems with at least three other Oregon companies, but not Mentor.
Nor do Mentor executives draw the huge salaries and bonuses that have raised stockholder concerns at other companies.
"We're pretty parsimonious," says Rhines, who hasn't received a bonus for the past two years because of the company's flat revenues. This year's good results, though, should swing Mentor's merit system in his favor -- he finds about this year's bonus in January.
Mentor Graphics is the second-largest technology employer in Oregon, providing jobs for 1,141 in the state and another 3,000 at development and sales sites from Pakistan to Poland. The largest tech employer based in Oregon, Tektronix Inc., had a so-so year, with its stock price up a scant 3.4 percent.
Here's a look at some of the other companies in The Oregonian 50, by sector:
Oregon's two steel companies benefited from the continuing world appetite for steel, especially from the fast-growing developing economies.
Shares of Oregon Steel shot up further in November after Evraz Group offered to buy the Portland firm for $63.25 a share. That deal is still in the works but is likely to close in January.
Oregon's other steel company, Schnitzer Steel Industries Inc., gained 29.8 percent for the year. The longtime Portland firm began selling its scrap metal to steel mills in Europe and India in 2006, expanding its international customer base beyond Asia.
Last year's big winner, PW Eagle Inc., turned in another standout performance this year. Stock in the Eugene pipe maker gained 68.3 percent on continued strong demand for its irrigation pipe in farming and for its polyethylene pipe in industrial and commercial construction and in oil and gas development.
Precision Castparts Corp. gained 51 percent on the strength in its aerospace business. Precision Castparts makes complex metal parts for jet and gas-turbine engines, including those powering the latest Boeing and Airbus planes.
Greenbrier Cos. Inc. rebounded from a share-price drop last year to eke out a 5.6 percent gain. The company added assets with acquisitions and boosted railcar sales as railroads continued their replacement trend of recent years.
Blount Industries Inc., which makes saw chain and other products for timber harvesters, suffered from a nationwide slowdown in the housing market and saw its stock drop 15.5 percent.
It may have slowed in other parts of the country, but construction continued at a fast pace in the Northwest, a trend that benefited the companies that have financed the building boom. Banks based in Oregon and Southwest Washington opened their checkbooks wide for residential and commercial builders in the region, gaining an average 20 percent in their stock prices.
Cascade Bancorp's integration of Farmers and Merchants Bank of Boise "was a home run," says analyst Jim Bradshaw of the D.A. Davidson & Co. brokerage. Cascade's stock was up 20 percent by June, then flew higher after reporting a "monstrous" second quarter, Bradshaw adds.
Cascade put a dividend dollop on its stock when it gave shareholders a 5-for-4 split in November and closed the year up a total of 68.6 percent.
The building boom in Clark County continued to spark shares of Vancouver's Riverview Bancorp, "the 800-pound gorilla in Clark County," Bradshaw notes. Rumors that the bank might be bought out also teased the stock price higher, according to Bradshaw. Riverview closed the year up 30.4 percent.
West Coast Bancorp of Lake Oswego had a "very, very solid year," Bradshaw says, as senior-level executives recruited from U.S. Bank became a potent commercial lending force in the region. Shares of the bank holding company were up 31 percent.
Other banking standouts include Pacific Continental Corp. of Eugene, up 22.4 percent; Columbia Bancorp of The Dalles, up 19.8 percent; PremierWest Bancorp of Medford, up 19.7 percent; and Cowlitz Bancorp of Longview, up 16.5 percent.
Umpqua Holdings Corp. of Portland languished a bit with its acquisition of Western Sierra Bancorp of Sacramento, then bounced back late in the year, posting an annual gain of 3.2 percent.
Shares of bank software provider Corillian Corp. of Hillsboro rose 38.6 percent.
In the not-so-hot category among financials was StanCorp Financial Group, down 9.8 percent. StanCorp's insurance claims and expenses went up and its profit projections went down, all of which put a damper on its share price.
Besides Mentor Graphics, other timbers in Oregon's high-tech forest made some nice gains this year.
Lattice Semiconductor Corp., up 50 percent, posted its first quarterly profit in five years during 2006. A new class of programmable computer chip from the Hillsboro company showed signs of gaining market acceptance, giving investors hope that Lattice's turnaround may have legs.
Digimarc Corp. of Beaverton, up 49 percent, landed more contracts with state driver's licensing and other agencies for its digital watermarking technology. Circuit board maker Merix Corp. of Forest Grove, grew its share price 28.5 percent on the rebound in the electronics industry
Shares of FLIR Systems Inc. of Wilsonville gained 42.5 percent for the year. The defense contractor and producer of thermal imaging products was among a handful of local companies whose option-granting practices came under scrutiny during the year.
Metro One Telecommunications Inc. enjoyed a surge in stock price during 2006 after a radical restructuring that eliminated thousands of call center employees across the country. The Beaverton company, which sells directory assistance service, has lost all its major customers and so slashed costs in a bid to survive.
Though Metro One substantially reduced its expenses, it continues to lose money and its auditors warned early in 2006 that the company is in danger of going out of business. Its shares closed the year at $2.58, up 79 percent.
Oregon's trio of electronic display companies -- InFocus Corp., down 33.4 percent; Pixelworks Inc., down 54.9 percent; and Planar Systems Inc., up 15.5 percent -- endured a trying year.
Wilsonville-based InFocus is evaluating "strategic alternatives," including the possibility of selling the company, after years of losing market share to Asian competitors.
Planar Systems faces the same challenges but is meeting them by adopting a new strategy to target niche markets. The Hillsboro company plans to make several lines of electronic displays that perform specialized functions for industry, medical equipment and advertising.
Pixelworks, which makes computer chips for high-end televisions, has had a tough time persuading Asian TV manufacturers to use the Tualatin company's technology. Pixelworks replaced its CEO in December and said the company plans to reinvent itself by cutting costs and improving its technology.
Shares of Oregon's largest company, Nike, have been on a tear since September and closed the year at $99.03, up 14.1 percent and near their all-time high. After last year's 20 percent dip in share price, Columbia Sportswear Co. of Portland rebounded with a 16.7 percent gain.
Portland's Rentrak Corp. gained 74 percent, aided by a push to become the dominant monitor of movie downloading.
Portland General Electric, an Enron subsidiary since 1997, finally made the break from its ignoble parent company April 3, when it began distributing newly issued shares of stock to creditors.
At the same time, Oregon's largest utility debuted as a publicly traded company. (It doesn't yet appear on The Oregonian 50 because it hasn't traded for one full year.) Trading began April 10 on the New York Stock Exchange under the ticker symbol POR, and shares closed that day at $27.98, nearly where they ended the year.
TRM Corp., the Portland ATM and copier machine company, had a tough year punctuated with management turnover and sales of assets to meet bank loan deadlines. By the end of the year, the company had decided to sell its photocopier business, and the stock regained some of its loss. It closed the year down 71.3 percent.
Mike Rogoway, Gail Kinsey Hill and Brent Hunsberger of The Oregonian contributed to this story.
©2006 The Oregonian
James Bond Agent 007
Jan 8, 2007, 8:26 AM
I did a temp job here once around in 2001 or 2002.
Diamonds being readied for shipment at Blue Nile’s warehouse in Seattle. Success was not expected as recently as 2001.
Mark C. Vadon’s eight-year-old Internet company, Blue Nile, already ranks second behind Tiffany & Company in diamond ring sales.
January 7, 2007
When Buying a Diamond Starts With a Mouse
By GARY RIVLIN
MARK C. VADON is one of the world’s top diamond retailers, but wholesalers often decline to meet with him on the convention floor at jewelry trade shows. At the very least, many ask him to flip over his nametag so that no one knows who he is or what company he runs.
There was a time not long ago when pundits generally dismissed Mr. Vadon’s company, the online jewelry purveyor Blue Nile, as one of the dot-com boom’s more lamebrain creations. People might be willing to buy a book online, or a CD, and maybe a toaster, they said, but a $3,000 diamond engagement ring? The jewelry industry — or at least the high-end jewelry trade — seemed impervious to the Internet.
Not any more. Only a decade after it was founded in the infancy of the Web, Blue Nile ranks behind only Tiffany & Company in diamond ring sales, according to industry analysts. Experts also believe that probably only Tiffany’s and the Zale Corporation, which operates more than 1,500 chain stores and an additional 800 kiosks, bought more diamonds from wholesalers than Blue Nile last year.
While Blue Nile has grown — and its stock has soared 54 percent, to $38.53 a share on Friday from $25 when it was first sold to the public in May 2004 — Main Street jewelers have seen their profit margins shrink and many of their brethren shutter their store doors. As a consequence, many retail jewelers refer to Blue Nile as the “evil empire” — or worse.
So far, the Blue Nile effect has been felt mainly by mom-and-pop jewelers on Main Street and in malls; much bigger, high-end retailers like Tiffany have been affected only on the margins. And Blue Nile’s influence is limited largely to diamond sales, particularly diamond ring sales, but those are often the cash cow for smaller jewelers, accounting for a disproportionate share of their revenue.
“Blue Nile is just busting the chops of everybody, especially in the sale of diamonds,” said Ken Gassman, a former Wall Street financial analyst who runs the Jewelry Industry Research Institute. Diamond jewelry accounted for nearly half the $59.4 billion in jewelry, including watches and costume pieces, that United States retailers sold in 2005, Mr. Gassman said.
Blue Nile and other Internet jewelers are not solely responsible for smaller profits at traditional jewelers nor for the loss of more than 3,000 independent jewelry shops since 1999. Main Street jewelers, after all, have faced tough competition for decades, from the Home Shopping Network and other television creations beginning in the 1980s to, more recently, Wal-Mart, Costco and other big-box retailers that are grabbing a large share of the low-end jewelry market. A spike in the price of gold and other precious metals has also eaten into jewelry store profits.
Still, Blue Nile’s influence has been big enough that many smaller jewelers have been threatening to boycott wholesalers that supply online retailers. At the same time, consultants have been earning a handsome living advising retailers struggling to compete with Blue Nile — teaching them to “romance the stone,” as one consultant, Shane Decker, put it, using industry-speak for stressing the whole diamond-buying experience over merely the price.
Blue Nile operates no stores, so jittery men browsing its Web site in search of an engagement ring that matches their love and budget cannot compare diamonds side by side — or even see what they have bought until they tear into an overnight-delivery package.
But still they buy. The average diamond ring bought at the Blue Nile site costs $5,500, twice the industrywide average of $2,700, according to Mr. Gassman and other analysts. Blue Nile’s finance chief, Diane Irvine, says that nearly every day, the company sells a ring costing $20,000 to $40,000. Last month alone, more than a dozen people bought diamonds that were so expensive — $50,000 or more — that Blue Nile delivered them in armored trucks with armed guards. (All sales come with a 30-day money-back guarantee.)
“I don’t get up every morning and curse Blue Nile, like some do,” said Mark Moeller, owner of R. F. Moeller Jeweler, a three-store chain in St. Paul. “But the Internet has certainly affected profitability; there’s no doubt about that.”
Gary Gordon, chief executive of Samuel Gordon Jewelers in Oklahoma City, was more blunt. “Ours is an industry in big turmoil over Blue Nile,” he said.
SHOP owners, if they wish to curse anybody, might better aim their invective at one of their own, Doug Williams, a Seattle jeweler who in late 1995 took to heart all the radio advertisements he was hearing that implored business owners to adopt an Internet strategy.
The personal computer boom had been very kind to Mr. Williams, who for years had made a good living selling jewelry to Microsoft employees and other newly minted millionaires. Yet when he paid a consultant $2,000 to create a basic Web site he called Internet Diamonds, he did not even own a PC. “I was like a caveman looking at a television,” he said of the first time he visited his online creation.
Mr. Vadon stumbled on Mr. Williams’s site after a frustrating visit to the Tiffany’s in San Francisco, where he had gone in search of an engagement ring. This was late in 1998, and Mr. Vadon, a recent M.B.A. graduate from Stanford, was a well-paid management consultant at Bain & Company.
Yet as he tells it, the sales clerks initially ignored him, presumably because he was dressed in a T-shirt, shorts and Birkenstocks. He felt still more exasperated once one of their lot deigned to wait on him and was not much help. “He said, ‘Buy the one that speaks to you,’ ” Mr. Vadon said. “And I’m thinking, ‘This is absolutely nuts.’ ”
Tiffany’s declined to make a spokesman available for this article, but in a prepared statement said its diamond sales continue to grow, despite Blue Nile, confirming “the strong appeal of Tiffany’s diamond jewelry and the Tiffany & Company shopping experience.”
The two rings that Mr. Vadon was considering, at $17,000 and $12,000, would have represented the most expensive purchase of his life, automobiles included. So in search of what he described as a “Consumer Reports-like site,” Mr. Vadon ventured online, where he discovered a basic tutorial written by Mr. Williams. There he learned enough to consider tradeoffs between size, shape and his tolerance for imperfections — and also found, for $5,800, a diamond ring nearly identical to the less expensive of the two he had viewed at Tiffany’s. He bought it.
A more unlikely diamond retailer is hard to imagine. Mr. Vadon, who sports a permanent stubble look, wears no jewelry — not so much as a ring. On a recent day in Seattle, where Blue Nile is based, he was dressed in a rust-colored zippered pullover shirt and tan corduroys, and looked every bit like a man not quite comfortable in the spotlight but a numbers cruncher who finds himself the chief executive of a publicly traded company through happenstance.
By chance, Mr. Vadon was in Seattle on business a few weeks after he bought his engagement ring, and he stopped at Mr. Williams’s store. When Mr. Vadon offered that he had probably been a very good customer, Mr. Williams told him not really: he sold one or two diamonds a day online, and at just under $6,000, Mr. Vadon’s purchase was more or less an average sale.
Standing inside Mr. Williams’s modest, two-employee store near the Seattle airport, Mr. Vadon did a quick calculation in his head. At that point he may have known little about diamonds, but he recognized that an Internet site that cleared $250,000 a month in revenue despite no advertising budget and a bare-bones design could be extremely valuable. So at dinner that night, he offered Mr. Williams $5 million, which he did not have, for an 85 percent stake in his company — a deal penciled on a napkin and contingent on his raising the money.
Mr. Vadon was then 29, and unlike most of his Stanford business school classmates, had shown no great interest in the Internet. He had no experience selling jewelry. But this was Silicon Valley circa 1999, so in just eight weeks he raised $6 million to buy the site and ramp up its development. Over the next 12 months he raised an additional $44 million without, he said, having to work terribly hard at it.
The overabundance of cash engendered bad habits. The company, which at the end of 1999 switched to the more exotic Blue Nile name, booked $44 million in revenue in 2000, its first full year under Mr. Vadon, but managed to lose $30 million, largely because it spent $40 million advertising on television.
Blue Nile was hardly the only dot-com to burn through so many millions so quickly. Miadora.com, another jewelry site, raised more than $50 million in venture capital — and managed to stay in business for just 15 months. Similar fates awaited Ijewelry.com, Mondera and others.
Shrewd business decisions kept Blue Nile afloat. First, it cut its work force sooner than most dot-coms, beginning in the summer of 2000. Second, its backers invested an additional $7 million in the second half of 2001, when many investors would not sink another dime into a consumer e-commerce Web site. Mr. Vadon, meanwhile, eliminated the advertising budget and hoped that consumers would still find his site.
“Either we were going to build this thing through word of mouth,” said Darrell Cavens, Blue Nile’s marketing chief, “or we were going to see revenues collapse and we would all go home.” Sales slowed in 2001, rising barely 10 percent, but then grew 30 to 50 percent annually over the next three years. That let the company start advertising again — limiting itself almost exclusively to the Web — while showing the kind of steady growth in profits that Wall Street now needs to see before most companies can go public.
After the dot-com bubble burst, “there was this giant sigh of relief” among jewelry retailers, said James S. Porte, the former chief marketing officer of Diamond.com who now runs a marketing firm in Fort Lauderdale, Fla. “People hated Diamond.com and Blue Nile and the rest of them, and so they could say, ‘See, I told you it would never work,’ ” he said.
When Blue Nile refused to die, jewelry store owners reacted by pressuring wholesalers to cut off its supply. “People would meet at conferences and talk about embargoes like this was the Cuban missile crisis,” said a New York-based diamond wholesaler and Blue Nile supplier who declined to be quoted by name because, he explained, “I don’t need the grief.”
IT is easy to sympathize with the Main Street jeweler confronting a rival like Blue Nile. It operates no stores, only an office in downtown Seattle and a modest-size warehouse on the outskirts of town, so overhead eats up just 13 percent of its revenues, compared with 30 to 40 percent at a traditional Main Street retailer.
That allows Blue Nile to sell its diamonds at roughly 20 percent over cost and still make money, Mr. Vadon said and analysts confirmed. By comparison, the typical jewelry store sold its rings for 48.7 percent above cost in 2005, though that is down from 51.6 percent in 2002, an annual survey by Jewelers of America found.
As a result, Mr. Gassman, the analyst, found in one study that Blue Nile sold rings for 35 percent less than comparable rings at Zales.
David H. Sternblitz, the treasurer of Zale, in Irvine, Tex., said: “The Internet business serves a target customer looking for a commodity that’s basically sold on price. There’s still a large segment of the population that wants to come into a store and inspect the jewelry, and wants the extra services we provide like cleaning and repair.”
In addition to its lower overhead, Blue Nile has a second advantage, at least over smaller jewelers. It bought roughly $170 million worth of diamonds last year, giving it the purchasing power to sometimes sell its diamonds at a cost below the wholesale price available to smaller stores.
“You can buy diamonds cheaper from Blue Nile than you can from most brick-and-mortar stores, including mine,” said Jerry Robbins, the chief executive of Robbins Diamonds, a five-store chain in the greater Philadelphia area. “But their big disadvantage is that customers cannot see the diamonds, they cannot touch them and they cannot compare them side by side.”
For now, diamond rings account for 70 percent of Blue Nile’s sales, and other diamond purchases — diamond post earrings, for instance — account for an additional 20 percent. The mark-up on designer jewelry — as well as on pearls and colored stones like sapphires and emeralds — still exceeds 50 percent, according to Jewelers of America.
But diamonds serve as the financial backbone for jewelers nationwide, and while some have tried to match Internet prices, many still refuse to compete on that basis. “Their attitude is, ‘Our prices are higher but we provide you services, and we’ll hold your hand, and we’ll wrap it up all pretty and such,’ ” Mr. Gassman said.
Will that work?
“I think it’s relevant that we have seen an acceleration in the closure of specialty jewelers in recent months,” he replied.
James Bond Agent 007
Jan 8, 2007, 8:27 AM
This guy kinda looks like Rainier Meadows. :D
Jan 8, 2007, 4:39 PM
Vesta Corp. turns to foreign markets to propel rapid growth
Portland Business Journal - January 5, 2007
by Aliza Earnshaw
Business Journal staff writer
Cathy Cheney | Portland Business Journal
Two years ago, Vesta Corp. CEO Doug Fieldhouse began looking to the huge cell phone markets of China and Europe.
Early in 2005, Vesta, a virtual payments company, bought a Chinese firm providing enhanced services for cell phones, such as ring tones, daily horoscopes and daily jokes. Last September, Vesta acquired another Chinese company, the largest provider of cell phone refresher payments in Beijing.
Vesta has also built a large European operations center in Dundalk, Ireland.
The ambitious acquisition strategy -- along with some new product launches -- is propelling Vesta through a rapid growth cycle.
From nearly shutting down in the late 1990s, the Portland-based company grew to $184 million in transaction revenue by 2001, and employed 350 people. By 2005, Vesta had doubled its work force and nearly quadrupled revenue, to $713 million, making it one of the largest private companies in the Portland area.
Fieldhouse hasn't released figures for 2006. But he says that Vesta grew both its revenue and profits by more than 40 percent last year, and that the company has had 22 straight quarters of profitability.
Fieldhouse expects equally good growth, or better, in 2007, which would put Vesta at nearly $1.5 billion in transaction revenue this year. Fieldhouse is cagey about exact numbers -- he says his board is increasingly reluctant to publicize Vesta's financial information -- but growth projections he's offered in past years have proved conservative.
Vesta's foreign strategy was quite simple: Go where the customers are. And that is where people prepay for their cell phone minutes, rather than paying for last month's service, as most U.S. users do.
China had an estimated 459 million cell phones last year, with about 278 million of them prepaid. This compares with 229 million cell phones in the United States, 30 million of them prepaid.
Fieldhouse expects Vesta's Chinese operations to provide between 15 percent and 20 percent of Vesta's revenue in 2007. He also expects the China businesses to grow quickly, as ever-greater numbers of Chinese purchase cell phones.
The country's vast and varied terrain, and mix of new prosperity and entrenched poverty, has led to a rapid buildout of mobile phone systems, rather than the cable system installed across the United States in the late 19th and early 20th centuries.
With 413 million mobile phones in Europe, 248 million of them prepaid, Vesta's primary potential market -- refreshing prepaid phones -- is nearly 10 times the size of the U.S. market.
Fieldhouse is also looking to the United States for growth. Last month, Vesta bought Point and Pay Inc., a Florida company that allows people to make payments to county and municipal governments over the Internet, at a kiosk or on the phone. The purchase terms were not disclosed.
This acquisition gets Vesta into what company Chairman William Ziegler calls "the underbanked segment of the population." Point and Pay provides the ability to pay license fees, taxes and other government fees quickly and easily.
"They make it more convenient, which is just what cell phone top-up is," said Ziegler. "It's a nice add-on to our domestic business. And we can use our technical infrastructure to run this; we don't have to make a newly engineered technical base."
The acquisition spree isn't over yet. Vesta is now in the process of acquiring a related company in the northeastern United States. This, too, is a "logical extension" of Vesta's existing business, said Ziegler.
It is China, however, that holds out the most promise: Not only for rapid, near-term growth, but as a testing ground for new technologies, new products and new marketing strategies.
That's because China is such a new market, with so little regulation, that it's easier to get things done quickly there.
"Our Chinese CEO laughs at how slow we are here," said Fieldhouse, referring to Xiao Qing Ping, the founder of the first Chinese company Vesta purchased, ChinaDotMan.
Besides cell phone recharging and other cell-phone add-ons, Vesta's Chinese subsidiary has a contract with the Beijing municipal government to provide and recharge the city's public-transit cards.
These cards will be used not only for all public transportation, but also at a variety of retail stores in Beijing. Vesta's Chinese subsidiary is now in discussions with a world-famous coffee shop chain that is expanding in China.
Vesta's Chinese business has also launched a service that allows people to buy plane and train tickets, using their cell phones. E-ticketing is "perhaps 2 percent" of the market in China, and is slated to grow fast, said Jin Lan, a Vancouver-based China consultant to Portland- and Vancouver-area companies.
Vesta's strategy of purchasing Chinese companies compatible with its own business is unusual for a company its size, and also unusual for a Portland-area company.
But Vesta has made some excellent choices so far, said Lan.
ChinaDotMan is "a very creative services company" targeting China's newly affluent youth, a fast-growing market. And Chinese CEO Xiao is well known as "a good marketing guy."
"The only risk I see for Vesta is the risk of managing a fast-growing company," Lan said.
firstname.lastname@example.org | 503-219-3433
Jan 8, 2007, 4:45 PM
Governor puts $7M behind drug development
Portland Business Journal - January 5, 2007
by Robin J. Moody
Business Journal staff writer
Cathy Cheney | Portland Business Journal
If Gov. Ted Kulongoski has his way, Oregon will begin forming a drug development center that would help companies and universities test promising new drugs.
Modeled after the Oregon Nanoscience and Microtechnologies Institute, or ONAMI, Kulongoski has proposed spending $7 million to get the project off the ground.
The idea was hatched in meetings for the newly formed Oregon Innovation Council, created by the governor and Legislature to support research and development, and grow new industries in Oregon. The governor's proposed budget follows the innovation council's recommendation to allocate $7 million for the center, named the Oregon Translational Research and Drug Development Institute.
The facility would focus on infectious disease therapies and would center around a consortium of Oregon-based biotechnology companies plus the state's largest universities, including Oregon Health & Science University, Oregon State University, University of Oregon and Portland State University. The government investment would be used to help raise federal and private funds.
"It builds on existing strength in infectious diseases," said Dan Dorsa, vice president for research at OHSU. "About $80 million in external funding comes into this state to address the prevention and treatment of infectious diseases."
A key component of the center would be a high-throughput screening, a laboratory-based program that could rapidly screen thousands of compounds to identify promising treatments or vaccines. It would also connect drug-development groups with experts in clinical trial design and would work to attract venture capital for promising products.
Although local research helped make the drug Gleevec a successful treatment for a type of leukemia and a type of gastrointestinal tumor, Oregon has generally not been known as a hotbed for drug development, a notoriously risky long-term business that requires massive amounts of capital.
The state's bioscience sector is more heavily concentrated around medical devices and chemicals and reagents, according to a 2002 study of the industry.
AVI BioPharma Inc., the largest drug development company in Oregon, has been in business 26 years, but has failed to take a single drug even to phase I clinical trials.
The promising cancer therapy company Receptor Biologix, an OHSU spinout, relocated to the Bay Area to better access capital.
Drug development is also a long shot, raising questions about whether the state should fund a gamble.
Anna Richter Taylor, a spokeswoman for the governor, acknowledged the state's historical niche in medical devices, and said the government would continue to support that sector.
But she added, "The objective of the innovation council is to look long term into future opportunities to expand Oregon's footprint in the biotechnology industry."
Pharmaceutical giant Genentech Inc. has announced plans to build a so-called "fill-finish" facility in Hillsboro in the coming years, Richter Taylor noted, raising hopes for growth in the industry.
The Genentech facility, however, will not be home to drug development but will simply serve as a place for orders to be filled, packaged and shipped.
email@example.com | 503-219-3438
Jan 12, 2007, 2:42 AM
UO Economic Index drops
Portland Business Journal - 10:04 AM PST Thursday
The University of Oregon Index of Economic Indicators dropped in November after two months of increases.
The index, at 107.1, deteriorated in several key areas, including jobless claims, the Oregon weight distance tax, U.S. consumer confidence, inflation-adjusted new manufacturing orders, and the interest rate spread.
Only two indicators -- Oregon resident building permits and nonfarm payrolls -- showed improvement.
The Oregon labor market softened considerably toward the end of 2006. The manufacturing industry lost 2,000 jobs, and initial unemployment claims rose to a weekly average of 7,060.
New orders for core manufactured goods -- a key indicator of business investment -- dropped for the second consecutive month in November.
Despite November's results, the index was generally stable in 2006, showing economic growth throughout the state.
The index began in 1996 with a score of 100.
James Bond Agent 007
Jan 17, 2007, 12:40 AM
Unemployment rate unchanged last month
Puget Sound Business Journal (Seattle) - 11:28 AM PST Tuesday
The state unemployment rate stayed the same last month at 5 percent compared with November, and state officials said 2006 was a "year of good economic growth."
For the year, the average unemployment rate was 5 percent, the lowest since 2000, when it also was 5 percent. The state created 79,200 net new jobs from December 2005 to last month, officials added.
Nationally, the December unemployment rate was 4.5 percent, the same as the previous month.
In the Seattle-Bellevue-Everett area, the rate fell to 4.3 percent from 4.4 percent in November. There are 60,900 unemployed people in the area, according to the Employment Security Department.
"The job picture in Washington continues to shine in the nation's economy. Our steady growth in industries such as aerospace and software helps us reach out nationally and globally and create a strong job market that benefits Washingtonians," Gov. Chris Gregoire said in a statement.
Jan 26, 2007, 4:24 PM
Economists: Kicker is useless
School funding - At a legislative debate, both sides say the corporate rebate fails to grow Oregon's economy
Friday, January 26, 2007
What was billed as a debate by dueling economists before legislators who write Oregon tax laws turned on Thursday into a unified message: Spending more on education would pump up Oregon's economy, while giving corporations a "kicker" tax rebate does almost zilch to grow jobs and income.
Both Phil Romero, a University of Oregon economist who was chief economic adviser to former California Republican Gov. Pete Wilson, and Richard Sims, a former chief economist in two states and expert on state tax and fiscal policy whose visit was financed by the Oregon teachers union, agreed on those fundamental points.
They said spending more on education creates jobs for educators, creates jobs for those who serve them and draws new businesses that want a well-educated work force and good schools for their employees.
By contrast, they said, giving corporations an after-the-fact tax cut in years when corporate tax payments surge beyond projections does not draw employers or change corporate behavior. Giving those kicker rebates to corporations, as Oregon has done for a quarter-century, reduces the money available to provide public services without a corresponding benefit to the economy, they said.
Lawmakers on the House and Senate revenue committees, which write tax laws, have worked to keep Oregon's corporate taxes among the lowest in the nation. They also have crafted a tax policy that, in recent years, has yielded too little revenue to keep spending on schools and universities up to the national average.
Rep. Phil Barnhart, D-Eugene, the new chairman of the House Revenue Committee, said he was glad to get an unequivocal answer about the wisdom of that approach: From an economic standpoint, it's nuts.
"For years, the debate in the Oregon Legislature has been over whether you can enhance economic development in Oregon by cutting corporate taxes. Today we didn't hear two different sides. We heard a unanimous 'no.'
"We should stick to . . . raising the dollars needed to provide education, transportation, safety and infrastructure. . . . And the economic growth will take care of itself," Barnhart said.
Romero said cutting corporate taxes can play a role in growing the economy, as he said happened under his watch as California climbed out of a recession in the 1990s.
But he agreed with Senate Revenue Chairman Ryan Deckert, D-Beaverton, that a smarter strategy for Oregon, given its relatively low business taxes, low spending on higher education and low rates of adults with college degrees, is to raise taxes and spend them on education.
"I actually think that is a very good idea, with an important caveat," Romero said. That strategy "needs to be married with strategies that make it easier for corporations to invest in Oregon." Romero advocates lowering capital gains taxes.
Lawmakers are expected to grapple this session with whether to end the corporate kicker rebate.
Under Oregon's one-of-a-kind kicker law, when corporate tax payments come in at least 2 percent higher than predicted two years in advance, all of the unanticipated money is returned to corporations rather than saved or spent by the state. Because corporate profits are difficult to predict with that degree of accuracy, corporations often get rebates. This year, they are projected to get two-thirds off their Oregon tax bills.
Gov. Ted Kulongoski has proposed diverting this year's $275 million corporate kicker, and any future corporate kicker rebates, into a state savings account. Some influential business groups have said they could go along with his plan because they want stability for Oregon's tax system.
Many lawmakers have yet to stake out a position on the corporate kicker.
Giving corporations kicker rebates is a dumb way to try to grow the economy, the economists testified Thursday, because corporations don't know until after the fact whether their actions for the year will lead to a tax cut. Corporate kicker rebates, although they can be large, are sporadic and unpredictable.
"Tax cuts have the greatest economic effect when businesses can plan on them," Romero said.
"You couldn't waste money any better than that," Sims said of the kicker.
Betsy Hammond: 503-294-7623; betsyhammond@ news.oregonian.com
Jan 26, 2007, 6:08 PM
FINALLY!!! Scrap the f...ing kicker already. May it rest in peace.
Jan 26, 2007, 8:29 PM
Truck maker Freightliner said this morning that it plans to lay off 800 of its 1,700 unionzed workers in Portland. It will end six decades of Freightliner-brand truck production in Portland, allowing the DaimlerChrysler subsidiary to focus instead on military vehicles and Western Star-brand trucks.
Some other local suppliers have already announced layoffs in anticipation of the Freightliner cutbacks.
Jan 30, 2007, 8:28 PM
Jan 25th 2007 | BEND, OREGON
From The Economist print edition
Prosperity comes to the mountains
DURING the property frenzy of 2004 to early last year, cities such as Miami and San Francisco got most of the attention. But no housing market was more overheated than that of Bend, Oregon, a town of 67,000 built on a high plateau covered in sagebrush, juniper and pine trees. From September 2005 to September 2006, home prices in Bend leaped 30.4%, the highest rate in the country, according to the Office of Federal Housing Enterprise Oversight, which regulates the government-sponsored lenders Fannie Mae and Freddie Mac.
Why the increase? Bend's appealingly dry climate (it lies east of the Cascade Mountains, which catch most of the rain clouds sweeping in from the Pacific), its small-town feel and its mix of leisure activities (skiing, golf, tennis, mountain-biking) have made it a magnet for California residents fed up with traffic. Bend's median home price of $350,000 is still a bargain compared with price-tags in the Golden State of $550,000 and more. Baby boomers snapping up second homes also added to the land rush, as did refugees from larger, wetter Pacific north-west cities such as Portland and Seattle.
Bend is also economically vibrant. It typifies the changes seen in many western towns that once were sleepy backwaters based on mining or timber. As recently as 1980, it had a population of only 20,000. The end of Bend's logging industry during the 1980s, killed by high costs and environmental restrictions, meant the loss of a particular western culture. But it also sparked the beginning of Bend's new prosperity. Logging's demise meant that the forests wreathing the mountains and lakes around Bend are likely to stay the same for many years. As towns such as Missoula, Montana, and Sun Valley, Idaho, have also found, trees are more valuable standing than chopped down for lumber, says Nina Chambers, a researcher with a think-tank called the Sonoran Institute.
Why? Because fabulous scenery attracts people with fabulous amounts of money. Outside Bend, residents and tourists fish, hike, bicycle, mountain climb, ride snow-machines, and ski in beautiful forests of Ponderosa pine. Golfers on the area's many courses admire grand panoramas from each tee. In turn, those same people have helped make Bend's Old Mill District, once the site of one of the West's biggest sawmills, the city's hottest retail and office development. The brick powerhouse building that supplied electricity to the mill now houses a big shop where Bend's army of climbers, skiers and mountain bikers stock up on the latest gear.
In some areas all this translates into a city full of ageing but well-off geezers. Not in Bend. At the St Charles Medical Centre, the hospital's CEO, Jim Diegel, frets that his maternity unit, now being expanded, will be at capacity the minute it's finished. Bend's school district is bulging too, with enrolment jumping 58% in the past decade, and 1,100 new students in the past year alone. That bodes well for the city: a large population of relatively young adults means thousands of children who will eventually want to create their own jobs and wealth in Bend.
James Bond Agent 007
Feb 1, 2007, 8:50 AM
Boeing soars, local economy wins
Thursday, February 1, 2007
By Dominic Gates
Seattle Times aerospace reporter
Boeing said Wednesday it has piled up a stunning sales backlog of $250 billion, a fattened order book that should keep the factories humming at an accelerated pace in coming years even when new orders slow from their recent record levels.
The strong performance means about 40,000 local Boeing workers will get an extra 12 days' pay this month, and it suggests the company will keep on hiring — a boost for the local economy.
Boeing boosted its projections, forecasting that by next year airplane production in this region will be higher than at any point since 2001.
The 787 Dreamliner is to begin production next year, and existing jet programs in Renton and Everett are ramping up.
The company is likely to continue hiring to match those production demands. Boeing hired just over 6,000 people in Washington state in 2006, and employed 68,170 at the end of the year.
"This is more than skin deep," said Howard Rubel, an analyst with Jefferies Group. "They are pretty strong through and through."
In a bullish conference call with Wall Street analysts and reporters, Boeing Chief Executive Jim McNerney said his focus "is on executing that quarter-trillion-dollar backlog."
The sales backlog — $250 billion of combined commercial-jet and defense-side orders booked for future delivery — is equal to more than four solid years of sales at the current pace.
Orders can be canceled, of course, if the industry nose-dives like it did after Sept. 11. But barring a market catastrophe, the backlog guarantees Boeing will stay busy here and across the country even when the airliner and defense markets enter expected cyclical downturns.
Because of the new way of building the 787 Dreamliner — huge sections will be fabricated and partially assembled across the globe before they come to Everett for completion — the jobs boost will be spread around much more than in previous airplane programs, diluting the impact here.
But across all jet programs, the projections are sky-high.
Upping its forecast of commercial-jet deliveries, Boeing projected that after delivering 398 commercial jetliners last year, it will deliver as many as 445 jets this year and 520 jets in 2008.
To make that possible, one analyst estimates, the Renton plant would have to ramp up production of the smaller 737 jet from 28 per month now to at least 30 per month.
In Everett, 777 production would have to jump from five per month to seven, while the new 787 Dreamliner must roll out at a steady six per month from the first delivery in mid-2008.
This month many Boeing workers will reap the benefit of their productivity.
Worldwide, 113,000 people will be eligible for the incentive plan that pays out based on undisclosed internal financial targets set at the beginning of the year.
Meeting those targets merits 10 days' extra pay. Exceeding them can bring up to 20 extra days.
The beneficiaries will include engineers and technical staff — but not Machinists union members, who negotiated a different incentive package with the company.
Last year, the payout was even better — 14 days, averaging just over $4,000 for about 45,000 current and former employees in the Puget Sound region. Boeing spokesman Peter Conte said about the same number will receive this year's performance award.
Boeing's white-collar engineering union, the Society of Professional Engineering Employees in Aerospace, joined the incentive plan for the first time in its 2005 contract.
Machinists are not eligible for these payments, since their union opted instead for lump-sum payouts and guaranteed wage increases.
During the conference call, an analyst asked McNerney how he'd keep Boeing's sales force motivated, given the massive backlog of orders already booked.
"They have a lot to do out there as they work with airlines and work with other customers," McNerney responded. "They're not taking Wednesdays off."
McNerney also firmly reiterated that the new 787 program is on schedule, despite one analyst's report to the contrary last week.
McNerney said Boeing engineers are helping the company's three Japanese suppliers and Alenia of Italy to catch up to the planned production schedule.
Boeing is putting money and teams of people into contingency plans, McNerney said, to ensure it has "stand-by capability ... in the state of Washington" to handle work that suppliers haven't done.
Last month, 787 center-fuselage sections built in Japan arrived in Charleston, S.C., without the wiring, hydraulics and many of the fasteners that should have been pre-installed. McNerney said Fuji and Mitsubishi sent people to Charleston "to add some of the innards that didn't get added in Japan."
But he insisted the global supply chain Boeing has created for the 787 doesn't complicate the problem when work "travels" from one supplier to another down the chain. Indeed, he portrayed the parceling out of production as a plus that avoided a single bottleneck in Everett.
"Because the fundamental work is spread out a little bit, because there is an interim step in South Carolina on the way to Seattle, there is a little more flex in the system to handle traveled work, quite frankly," he said. "In the days where everything showed up in Washington ... there was a huge geographically-centered 'Oh, my God,' where the number of people and the amount of work all came together at one time."
Feb 7, 2007, 4:21 PM
Nike sets growth bar high
The company aims to open 100 stores in 3 years, lift revenue 50% by 2011
Wednesday, February 07, 2007
Nike unveiled plans Tuesday to open 100 new retail stores in the next three years, devote more attention to nontraditional marketing and look for potential acquisitions as it aims to generate $23 billion in annual revenues by fiscal year 2011.
That revenue benchmark -- more than 50 percent higher than it earned in its most recent fiscal year -- would put the company on the level of Coca-Cola Inc., said Chief Executive Mark Parker, who disclosed the company's growth plans at an investor analyst conference at Nike's campus near Beaverton.
Under the theme "The Consumer Decides," executives for the world's largest athletic footwear and apparel maker laid out their vision, arguing that future growth and success depends on Nike's ability to create strong bonds with individual consumers.
"The consumers have never held as much power as they do today," said Parker, adding that Nike needs to improve the experience for customers, in retail stores, online and in the community in order to keep them engaged. "The premium consumer experience is at the heart of the growth plan."
Nike has already tried to create such experiences with its Nike Plus Web site, in which walkers and runners can download workout data, challenge others and become a member of the virtual community. The company has also organized its own marathons, set up an online community Web site for soccer fans and coordinated other events that help develop relationships with customers.
But Nike said it also believes it needs to roll out its own network of new retail stores to enhance connections with customers. Stores selling Nike products aren't differentiating themselves and are doing little to make the consumer experience special, Parker said. So Nike is stepping in with plans to eventually open 100 of its own stores around the world -- half of which will be in the United States.
"We have the capability and the responsibility to take the industry someplace new," Parker said. "We're committing to creating a new compelling retail experience."
It's unclear exactly what a new compelling retail experience might be. Nike executives remained tight-lipped Tuesday about details of how large the stores might be or their precise locations. But Nike brand president Charlie Denson said the company has stores in Paris, France, and Osaka, Japan, that, for example, house Nike I.D. salons, where shoppers can custom-order their shoes.
The new stores will complement Nike's existing network of 117 factory outlet stores, Nike specialty shops and Niketowns. In addition to online commerce, the company expects the retail operations to eventually comprise about 15 percent of revenue, said Chief Financial Officer Don Blair, up from 12 percent.
Operating its own chain of Nike stores potentially puts the company in competition with its biggest customers -- the chains that sell Nike products in mall stores. But Matt Powell, contributing editor for Sports Executive Weekly, an industry publication, said the relatively small number of stores probably won't bother its retailers too much.
And considering the lackluster presentation in its retail partners' stores, "Nike doesn't really have a choice," said Sara Hasan, an analyst with McAdams Wright Ragen.
Representatives for Foot Locker and The Finish Line, Nike's two largest customers, could not be reached for comment. But Nike's Denson, who has been talking with the retailers, assured analysts that the companies are behind the effort. "Everyone wants to do something new," he said.
The retail-store strategy was only one part of Nike's plan unveiled Tuesday. The company also said it plans to open a product design center in Tokyo to help create products for the Asian market, improve the efficiency of its manufacturing process and channel its spending on the highest-growth opportunities for the company.
Nike has been emphasizing the need to focus on the consumer for months. Last summer, the company reorganized its business to highlight six core categories -- running, soccer, basketball, men's training, women's fitness and sport culture.
The idea, said Denson, is to group the footwear, apparel, equipment and marketing efforts by sport, allowing the unit to function almost like Nike's golf subsidiary or Jordan brand basketball subsidiary, and helping them establish a relationship with that specific customer.
"It used to be we were just trying to sell you something," said Denson. "Now it's about making sure to enable you to buy something from us."
James Bond Agent 007
Feb 7, 2007, 8:55 PM
Hmmm. Does Nike really need more outlets to sell its merchandise? :???:
Feb 7, 2007, 8:59 PM
↑Bond...the same thing could be said about Microsoft.....Starbucks...
Feb 7, 2007, 9:03 PM
What does "need" have to do with anything?
Feb 7, 2007, 9:19 PM
are these new stores going to be Niketown layout? or smaller mall oriented layouts?
Feb 7, 2007, 10:03 PM
^that's what everyone is waiting to hear? This is a new concept for Nike. The theory goes, their largest customer, Foot Locker, doesn't provide customers with the experience Nike wants their customers to have. So, Nike at the risk of alienating Foot Locker, is testing this new idea of direct selling in the form of company owned stores. I'd assume they'd be more NikeTown in concept, but scaled for the mall...I guess we will see.
James Bond Agent 007
Feb 8, 2007, 1:30 AM
What does "need" have to do with anything?
I suppose you're right.
Adidas has outlet stores, why not not Nike?
But don't they already have Niketown stores?? :???:
Feb 8, 2007, 1:58 AM
Niketown stores are "few" in number......I think these new store prototypes will be more of "mini Niketowns" that will offer a cutting edge shopping experience for mall shoppers.....other retailers, no doubt, will be sending their "shoppers" to these stores to see how Nike is displaying their wares and try to emulate for their own shoe displays.
Feb 8, 2007, 2:12 AM
I suppose you're right.
Adidas has outlet stores, why not not Nike?
But don't they already have Niketown stores?? :???:
If Nike wants (not needs) stores they should go for it. If it turns out the stores don't make them any money then they can close them. It is really not any of our business (unless we own stock or work for them).
Feb 8, 2007, 2:44 AM
one thing about Nike is that they have brilliant marketing:
I LOVE that ad.
Feb 8, 2007, 2:53 AM
Sounds like the Adidas and Puma stores over by Powell's?
Boutique retail has been "in" for several years now... bout time they hopped on the bandwagon.
James Bond Agent 007
Feb 10, 2007, 4:38 AM
Ask.com, Intuit choose central Washington for data centers
Lured by the promise of cheap hydroelectric power, two major high-tech companies have chosen central Washington for new data centers
Ask.com, which has been evaluating locations in central Washington for several months, has signed a lease in an existing building in Moses Lake, according to company spokeswoman Jennifer Hallett. She declined to name the building or specify the size of the data center. Meanwhile, Intuit, maker of the TurboTax and Quicken software products, purchased land in Quincy, Wash. late last month for a new facility. Holly Perez, manager of corporate communications at Intuit, said the facility will help the Mountain View, Calif.-based company with their "overall IT strategy."
While the location of Ask.com's facility was not known, there is at least one place equipped to handle data center operations in Moses Lake -- the Titan building located in a former NORAD Missile Control Center. It was not known if that was the facility that Ask.com had chosen. (The Web site for Titan says it is built to withstand a nuclear attack and offer the "components necessary to operate an efficient, super secure data processing environment.") Oakland, Calif.-based Ask.com, now owned by IAC/InteractiveCorp., is the Internet search engine formerly known as Ask Jeeves.
Ask.com and Intuit join a number of high-profile companies that have chosen central Washington as a location to house computer servers that power their Web sites. Others that have moved into the region or announced plans to open facilities in recent months, include Microsoft, which is building a data center facility near Quincy, and Yahoo, which just opened a facility near Wenatchee.
Here's more on server farms sprouting in central Washington from a story I did last August, including news that Seattle developer Sabey Corp. plans to open a new data center in East Wenatchee. (The report also noted that Ask.com was looking in the area).
Feb 10, 2007, 11:05 AM
Apple farms to data farms, it's all the rage in CW.
Feb 14, 2007, 8:24 PM
Oregon's sales to China soar
With exports up 73%, the nation becomes the state's No. 2 foreign customer
Wednesday, February 14, 2007
China's explosive economic growth, for years a distant spectacle, reverberated in Oregon last year as the Asian powerhouse bypassed four other nations to become the state's No. 2 foreign customer.
Oregon sales to China shot up 73 percent in 2006, propelling the state's worldwide exports to a record $15.3 billion. Exports grew 23 percent overall, led by high-tech sales, which grew 42 percent, according to U.S. government figures released Tuesday.
The eye-popping numbers contrasted with a huge national figure on the negative side of the balance sheet -- the U.S. trade deficit, also released Tuesday, which hit a record $764 billion last year. Yet the opposing figures are related: Many of Oregon's high-tech exports to Asia are assembled into consumer products that are shipped back to the United States.
As the world's factory floor, China takes the lead in that process. Intel, for example, ships Oregon-made products to its semiconductor test and assembly plants in Shanghai and Chengdu. Like many companies, Intel is also fanning out beyond China, building a factory in Vietnam that expands its Southeast Asian presence.
Yet China's shopping spree was clearly the top Oregon trade development of 2006. "The growth rate is just mind-boggling," says Dae Baek, Oregon's acting state economist. "This help from exports comes at a very good time," Baek says, given a lull in the state's manufacturing sector.
The Chinese boom vindicates Oregon officials and legislators who prevailed over skeptics to hire a state trade representative there in 1999. Yet even ardent boosters didn't predict that China would leapfrog 13 nations -- including South Korea, Japan, Malaysia and Mexico last year alone -- to become the state's second-biggest customer by 2006.
On his Tigard factory floor, Patrick Cavanagh, chief executive of Williams Controls Inc., can feel the rumble. Williams, which makes electronic throttle controls for heavy trucks, buses and off-road vehicles, saw its Asian sales jump 69 percent from the final quarter of 2005 to the last quarter of 2006.
Like many Northwest manufacturers, Williams is moving beyond straight exporting. "We're building product in China for China," Cavanagh says. "We're exporting to China. And we're exporting to Europe."
In their Wilsonville cubicles, Mentor Graphics engineers create a stream of software used to design semiconductors abroad as chip creation moves offshore. "The whole Pacific Rim has been very, very hot for us," says Ryerson Schwark, a Mentor spokesman.
And on the 34th floor of the U.S. Bancorp Tower, attorney Chris Helmer sees a steady increase in clients' business with China. "The Chinese are finally developing a middle class," the Miller Nash partner says, "and are able to buy things that they wouldn't before."
The state trade statistics released Tuesday actually understate exports, tracking goods and not services, such as those a lawyer provides to clients abroad. The U.S. Census Bureau numbers, crunched by the World Institute for Strategic Economic Research, track goods by ZIP code of origin.
Not all Oregon numbers are soaring. Japan -- once the state's biggest customer, and now ranked fourth -- spent 3 percent more on Oregon goods last year. But even there, high-tech purchases jumped.
Total agricultural exports increased a tad after a slight decline in 2005. But Patrick Mayer, Oregon Agriculture Department international trade manager, is pleased to see the state hold ground against low-cost competitors such as Australia, New Zealand and China. Oregon wheat growers could see better sales this year, Mayer says, as Australia endures a poor harvest.
Total Oregon exports to Latin America jumped 36 percent last year. European sales grew 15 percent. Canada, for the fifth consecutive year, was the largest foreign buyer of Oregon goods.
Small businesses are also starting to catch the Chinese wave that larger players have been riding, says Karen Goddin, international trade manager at the Oregon Economic and Community Development Department. Goddin notices strong 2006 increases in tools, fish and seafood. She's intrigued that exports of musical instruments to China jumped 83 percent.
Her husband, Scott Goddin, U.S. Export Assistance Center director in Portland, expects a continued increase in the state's foreign sales this year, even if U.S. economic growth tapers. "I don't think it'll jump as much as it has," he says.
Richard Read: 503-294-5135; firstname.lastname@example.org
Feb 22, 2007, 6:23 PM
From the Associated Press:
Aeroflot Official: Boeing Deal on Hold
Thursday February 22, 12:45 PM EST
MOSCOW (AP) — Talks on a multibillion-dollar deal for Russian state flag carrier Aeroflot to buy 22 Boeing 787s are on hold, and frosty relations between Russia and the United States could be to blame, a Russian airline official said Thursday.
Aeroflot management last year asked the government — the company's controlling shareholder — to approve a deal to upgrade its long-range fleet by buying 22 Boeing 787s and an equal number of Airbus A350s. Chief Executive Valery Okulov said later that no permission had been received and a deadline for the deal had been missed, though a Boeing spokeswoman said talks were continuing.
Aviation analysts have valued the Boeing order at $2.5 billion.
Aeroflot deputy general director Lev Koshlyakov told The Associated Press that negotiations with Chicago-based Boeing Co. were on hold.
"In respect of this contract, negotiations have not been held for some time," Koshlyakov said. "However this does not mean that we won't be open to discussion with them in the future. Boeing remains a major producer."
Officials at Boeing's headquarters could not be immediately reached for comment.
An unidentified Boeing official was quoted by the Seattle Times in a story published Thursday as saying Boeing wrote off the deal "a month or so ago."
Observers speculated that the deal had been caught up in politics — with relations between Washington and Moscow having taken a sharp turn for the worse in recent months.
Last August, the U.S. State Department imposed sanctions on Russian arms exporter Rosoboronexport and fighter-jet maker Sukhoi for their dealings with Iran. Putin said on Feb. 10 in Germany that under President George W. Bush, the United States has "overstepped its national borders in every way."
"As with any big deal, obviously the political situation has a certain influence," Koshlyakov said. "As management we proceed on the basis of economics, though of course our shareholders may have their own ideas about our choice of partner. At the end of the day it's their decision."
Koshlyakov, meanwhile, said that talks with Boeing's main rival, Airbus, were ongoing. The Interfax news agency on Wednesday quoted an Aeroflot source as saying the deal for the Airbus A350s would likely be completed later this year. French President Jacques Chirac is due to visit to Moscow next month.
Russia is interested in playing a bigger role in Airbus's parent company, European Aeronautic Defence & Space Co., where it already holds a 5 percent stake through state bank Vneshtorgbank. On Wednesday, President Vladimir Putin told visiting French Foreign Minister Philippe Douste-Blazy and Defense Minister Michele Alliot-Marie that more cooperation "would be interesting and useful not only for Russian producers but for their European partners."
However, Airbus is in the midst of a troubled restructuring and has yet to decide whether it will build the A350s in Germany or France.
Meanwhile, Boeing has pulled back on some of the incentives put forth for Aeroflot, according to the Seattle Times.
Boeing's aircraft financing unit was to have leased used MD-11 freighters to Aeroflot on favorable terms as replacements for aging DC-10 cargo aircraft in a side agreement. Russia will now lease half that number and will pay much more for them, the newspaper said.
James Bond Agent 007
Feb 22, 2007, 8:09 PM
Bah! Oh well it's only 22 planes. :D
Feb 23, 2007, 5:01 PM
Climate Trust lands huge carbon offset project
The Portland nonprofit will work with several East Coast utilities
Portland Business Journal - February 23, 2007
by Matthew Kish
Business Journal staff writer
A local organization has been chosen to manage the largest carbon offset project in U.S. history, a deal that could launch it into the middle of one of the nation's fastest-growing markets.
The project calls for the Climate Trust, a Portland nonprofit that works on climate change issues, to administer the purchase of 10 million tons of carbon dioxide offsets for several Northeastern utilities that are part of a regional effort to reduce greenhouse gases called the Regional Greenhouse Gas Initiative. The New England environmental consultant M. J. Bradley & Associates, Inc. will work with the Climate Trust.
Offsets address carbon dioxide and other greenhouse gas emissions. When companies and private citizens voluntarily purchase offsets through organizations like the Climate Trust, the money is spent on various measures to protect the environment and reduce the amount of greenhouse gas emissions.
The projects range from simple measures like the purchase of high-energy light bulbs to capital investments in wind and solar plants.
At current market rates, the offsets the Climate Trust will arrange could cost anywhere from $30 million to $100 million, making it a record-breaking deal. To put that in perspective, last year North American and European consumers purchased $110 million in offsets, up from $6 million in 2004, according to ICF International.
The market for offsets is expected to continue its rapid growth, as the federal government and states, including Oregon, consider passing laws to mandate limits on carbon emissions. If a cap passes, large emitters, like utilities and manufacturers, would have to buy offsets for any greenhouse gases they produce over the legal limit. Companies with room under the cap could sell their excess capacity.
"It's inevitable that we will see some national carbon legislature," said Jon Norling, a shareholder in the Portland office of the law firm Lane Powell, who works on renewable energy projects.
He added the new project should bring significant notoriety to the well-respected Climate Trust and help it become a made-name on the national stage.
The Climate Trust has been purchasing carbon offsets in Oregon since 1997, when the state passed the first law in the U.S. to reduce greenhouse gases. The law requires new power plants to offset part of their carbon dioxide emissions. It has $7.8 million in offsets under management today.
"We hope to continue in our role as one of the largest institutional buyers of carbon offsets in the United States and one of the leaders in helping develop offset project policy," said Sean Clark, the organization's director of offset programs.
An article in the New York Times this week raised criticisms of several carbon offset programs, saying many of them are ineffective. Clark hopes the new project puts the Climate Trust in a position to address many of those criticisms.
"It's a bit of the Wild West out there in terms of what people are buying and trading," he said.
He also hopes the organization's charity status helps it gain the trust of corporate clients. Most of its competitors do the work for a profit.
"The fact that we're not in it for revenue purposes means that we're a good entity for companies to work with," Clark said. "We're interested in being a facilitator."
The Climate Trust and M. J. Bradley will conduct a national search for offsets. The groups hope to have all of the purchases in place by February of next year.
The deal should give a huge boost to the organization's bottom line. It had nearly $1.8 million in revenue in 2004, according to its most recent annual report filed with the state. Clark declined to share the amount of the fee the organization would receive for the new project.
The Climate Trust has eight employees, but will hire another four as a result of the new business.
"We can put a soccer team together now," Clark said. "It used to be we could only play basketball."
email@example.com | 503-219-3414
James Bond Agent 007
Feb 25, 2007, 8:34 AM
Sunday, February 25, 2007
State's hot 5 job spots
By Drew DeSilver
Seattle Times business reporter
VANCOUVER — Legacy Health Systems of Portland reached across the Columbia River to open a new hospital in 2005 because Vancouver and surrounding Clark County seemed ripe for expansion. New residents had been streaming into the area for years, and the county was outgrowing its one major hospital.
"From an economic point of view we knew there was a demand there we could fill," said Pamela Vukovich, Legacy's chief financial officer.
It has proven to be as much a jobs engine as a care provider. Legacy Salmon Creek Hospital has created 569 full-time positions — more than 400 filled by Washington residents — and sparked development of clinics, medical offices and other service businesses nearby.
Health care, in fact, is one of Clark County's fastest-growing industries. And during the current economic expansion, Clark County has been by far Washington state's fastest-growing urban area — adding jobs at a much-faster rate than the four-county central Puget Sound region.
Clark is one of five "hot spots" that have led the state in job growth during the current expansion, according to an analysis of state data by The Seattle Times. That's a sharp departure from the giddy dot-com and telecom boom of the late 1990s, when the state's biggest metropolitan area created new jobs faster than nearly all other regions.
Not that King, Pierce, Snohomish and Kitsap counties are exactly slacking off. The four-county central Puget Sound area accounted for three of every five jobs created from the bottom of the statewide recession in April 2003 to the end of 2006 — a 9.6 percent gain overall. The state average gain is also 9.6 percent.
But the five hot spots posted more impressive growth rates — from 10.5 percent in Spokane County to 16 percent in Clark. Whatcom and Skagit counties and the Wenatchee area (comprising Chelan and Douglas counties) round out the Hot Five.
They share some common characteristics. Most rode out the recession with relatively few job losses. Residential construction is a big jobs generator almost everywhere. None has a single employer with such outsized influence on the local economy as Boeing has in Puget Sound. Overall wage levels are below the statewide median. And each has a smaller base of jobs than the four-county area around Seattle, making it easier to rack up big percentage gains.
Job growth and population growth often reinforce each other. People looking for work tend to gravitate to where jobs are being created. And as an area's population grows, it needs more in the way of services and amenities — more houses, bigger stores, nicer restaurants — that in turn generate even more jobs.
However, fast growth can have a downside: People who fill newly created jobs in historically lower-paying fields such as retail, restaurants and tourism can quickly find themselves priced out of their community. If the newly hot spots stay hot, they'll likely have to wrestle with affordability issues that up to now have been mainly the Seattle area's concern.
For years, the Vancouver area has been dismissed as hip, eco-urban Portland's dowdy sibling — the repository for all the development that couldn't be contained within Portland's tight urban-growth boundary. Local officials have sought to turn that distinction to the county's advantage.
"Clark County is still filling up, and there's lots of developable land," said Scott Bailey, the state Employment Security Department's regional labor economist for Southwest Washington. "The land-use plans have continually allowed for as much residential development as we could take. It's been 'Come on in, homebuilders.' "
Now, Bailey said, the county's population has grown enough that it can support a level of retail and services that once could only be found across the Interstate Bridge — though Oregon's siren call of tax-free shopping continues to beckon.
People who bought into the stacks of newly built homes across from Legacy Salmon Creek, for instance, can now shop at a new Best Buy store a few miles down Interstate 5. (Clark County has added 2,400 retail jobs during the current boom.)
"Now we're getting all the stores Portland has, only ours are all brand-new," said Gretchen Amacher, manager of Legacy's Family Birth Center.
One industry that helped fuel growth in the late 1990s, semiconductor manufacturing, isn't much of a factor this time around. Chipmakers shrank or closed several of the newly built plants during the recession. Employment in computer and electronics manufacturing shrank from 5,300 at the end of 2000 to 3,000 at the depth of the recession, and the sector has added just 500 jobs since then.
The longtime economic mainstays of Bellingham and Whatcom — the oil refineries and Western Washington University — aren't behind the latest growth surge there, said Hart Hodges, director of WWU's Center for Economic and Business Research.
Rather, much of the area's growth is being driven by retirees and late-career workers, who are trading in their big-city lives for a more relaxed yet sophisticated lifestyle. Between 1995 and 2005, according to Hodges, Whatcom's population of people in their 50s grew by nearly 80 percent; the 60-and-over group grew by 25 percent.
"Some of them come with jobs — they're telecommuting or consulting for their old companies," Hodges said. Those folks helped boost the ranks of "professional and business services" workers, a category that added 1,500 jobs between April 2003 and December 2006.
Building homes for all those new residents also has boosted the local economy. In the Cordata area of north Bellingham, for instance, 452 houses and apartments have been built since the beginning of 2003.
Construction generated close to 1,800 jobs in the county during the current boom. Those jobs paid a median wage of $18.82 an hour in 2005 (the most recent year for which data is available), a third more than the median wage for all jobs in Whatcom County.
The county's unemployment rate, once consistently higher than the statewide average, now is consistently lower.
But Hodges noted a cloud on Whatcom's horizon: People in their prime working years are leaving. Between 1995 and 2005, he said, the only age group to decline in Whatcom County was people in their 30s.
Skagit County has been one of the state's hidden success stories for a long time. Since 1991, according to state figures, nonfarm payroll jobs in Skagit have grown faster than the statewide average in all but two years.
Spillover from the greater Seattle area is part of the reason, state regional labor economist Jim Vleming said: "When things got real expensive in King and Snohomish, I think you saw a lot of people take the next step up and look at Skagit County. Even with gas at $2.50 a gallon and up, we're seeing a fair number of commuters that we didn't see 10 or 20 years ago."
Even if those new residents work at Boeing's Everett plant or at a Bothell biotech, the paychecks they bring home have helped fuel the construction and retail industries — both of which have added about 1,100 Skagit County jobs since the recession's bottom in April 2003.
The Anacortes area also has seen a mini-boom in the business of building and repairing boats. Some smaller outfits concentrate on fishing boats and pleasure craft, Vleming said, while larger ones are doing work for the Navy and Coast Guard. Together, they've helped add 600 manufacturing jobs to the county's relatively small job base during the current expansion.
Cap Sante Marine, for instance, has added at least eight full-time workers to its core repair and maintenance business, co-owner Dianna Chonka said, bringing the total payroll to 50. The jobs pay well — a journeyman boat technician can make close to $50,000 a year, plus benefits — and the workers are in high demand.
"We can't have enough techs," Chonka said. "You don't want to tick off your techs, because if he decides he doesn't want to work for you there are five other people lined up who'll hire him."
You can think of the Wenatchee area as a place that exports apples and imports people — especially retirees.
"There are a lot of people coming from Seattle and other places with their own money," said Don Meseck, state regional labor economist for Central Washington.
Since the 2000 census, Chelan and Douglas counties together have grown by nearly 6,600 people, or 6.6 percent. But the number of people aged 60 or over in the two counties has grown by 14.5 percent.
Building housing for those new residents has helped the Wenatchee area get over a dip in its "core" industry — agriculture.
After adding 1,580 jobs in 2004 and 2005, the region's farms and orchards cut 460 jobs last year; Meseck attributed much of that drop to bad weather that cut into the apple crop.
The construction sector, by contrast, added close to 300 jobs last year.
The houses are getting pricier: According to the North Central Washington Association of Realtors, the average selling price last year was up 15 percent to $239,574.
Manufacturing also has been adding jobs — 600 during the current recovery, for a 30 percent gain, making it the Wenatchee area's leading growth sector.
Those gains haven't come at the giant Alcoa aluminum smelter outside Wenatchee. That plant — one of just two active smelters remaining from the state's once-thriving aluminum industry — has stayed at close to 400 workers since reopening in December 2004.
Rather, Meseck said, "the real action in the manufacturing sector is food processing." Though bad weather and a tight labor market last year cut the number of fresh-packed apples, processed apples rose by 7.7 percent from 2005 to 2006.
Like a transport ship being led by a tiny but powerful tugboat, greater Spokane's current prosperity is due in large part to the torrid growth of its smaller neighbor — Kootenai County, Idaho.
"The construction boom in Kootenai County has been nothing short of amazing," said Patrick Jones, executive director of the Institute for Public Policy and Economic Analysis at Eastern Washington University.
As the biggest city between Seattle and Minneapolis, Spokane has long been the retail and services center for a vast region. Now, it's supplying construction workers and materials for the spread of housing developments across Idaho's Rathdrum Prairie, as well as workers for newly sprouted shops and clinics.
Manufacturing, from Boeing suppliers to Itronix, a maker of "ruggedized" laptop computers, also has rebounded. The once-mighty aluminum industry has shrunk but, to the surprise of many, not disappeared completely — Kaiser Aluminum's Trentwood rolling mill still employs 700 people.
Jones also pointed to Inland Northwest Health Services, a joint venture of four hospitals that manages a database of 2.6 million patient records for 38 agencies throughout the West.
"IT over here — it's not Microsoft, but it's focused on health, which has always been one of Spokane's strong points," he said.
It's impossible to say, of course, whether these five hot spots will continue to burn more brightly than the Seattle area. Job growth in central Puget Sound has picked up steam recently, and Washington state is replete with former boom towns that have gone bust.
But Jones, for one, thinks the changes will be long-lasting.
"There was a time back in the late 1990s and early 2000s when some people in Seattle may have been looking for less growth, while a place like Spokane was doing a lot of soul-searching and asking 'What can we do better?' " he said.
"Now, I think those places are seeing the fruits of their labor to reinvent themselves."
James Bond Agent 007
Feb 28, 2007, 3:50 AM
Tuesday, February 27, 2007
State job figures have something for everyone
By Drew DeSilver
Seattle Times business reporter
Optimists, pessimists and undecideds could all take something away from the state jobs figures released Tuesday: More payroll jobs, rising unemployment, and the likelihood that the numbers will be significantly revised next month.
Washington added a seasonally adjusted 20,200 payroll jobs last month, according to the state Employment Security Department. That was the biggest one-month gain since March 2000.
More than half the added workers were in the four-county Puget Sound area (King, Pierce, Snohomish and Kitsap counties), which gained a combined 10,500 payroll jobs last month.
However, the state unemployment rate edged up a tenth of a percentage point, to 5.1 percent, after holding steady at 5 percent for the previous three months. A year earlier, in January 2006, unemployment stood at 4.9 percent.
Evelina Tainer, chief economist for the department's Labor Market and Economic Analysis Branch, cautioned against putting too much weight on any of the January figures.
"My inherent belief is that we need to take these numbers with a grain of salt," she said.
For one thing, the procedure for adjusting the raw jobs figures for seasonal variations may not have worked as intended last month. Retail, for example, showed a seasonally adjusted gain of 5,200 jobs in the month, but an unadjusted loss of 15,700 jobs.
The reason, Tainer said, was that retailers hired fewer seasonal workers than they typically do in the runup to the holiday shopping season; consequently, there were fewer layoffs than normal in January. But the seasonal adjustment formulas, which presume that the typical hiring-and-firing patterns hold true, translated below-normal retail job losses into a gain.
The upshot, according to Tainer: "I'm willing to bet a dollar, at least, that (the retail numbers) will be revised downward or we'll see a drop in February."
Another sector that showed a big increase, employment services, includes what are called "professional employer organizations" — businesses that, in essence, take over a client company's workforce for workers'-compensation, payroll processing and other purposes. So, of the 2,900 jobs that the employment services sector appeared to have gained, an unknown number were actually at the client companies.
The construction sector continued to be relatively strong, particularly specialty contractors. Aerospace added 800 jobs in January, all of them in the Puget Sound area.
January marked the annual rebenchmarking by the federal Bureau of Labor Statistics as well as the Employment Security Department's own quarterly rebenchmarking process. As a result, the department now says Washington gained about 20,000 fewer jobs in the second half of last year than originally thought, and the average jobless rate for 2006 was 5 percent instead of 4.9 percent.
Because the BLS process isn't quite complete, unemployment rates for individual counties and metropolitan areas aren't yet available. However, the four-county Puget Sound area (King, Pierce, Snohomish and Kitsap counties) gained a combined 10,500 payroll jobs last month, on a seasonally adjusted basis.
Feb 28, 2007, 3:52 PM
The state's unemployment rate inched downward, from 5.4 percent in December to 5.2 percent last month, the Oregon Employment Department said.
Housing malaise infects other sectors
Oregon jobs - Joblessness drops slightly, but a six-month economic slowdown is expected to continue
Tuesday, February 27, 2007
The recent real estate slump has done more than put a damper on home sales and prices. It's apparently cost Oregonians jobs across a number of industries.
Oregon employment officials said Monday that nonfarm employment grew last month by 500 jobs when adjusted to account for seasonal variation, with weaknesses continuing in housing-dependent manufacturing, construction, banking and real-estate sectors.
The good news? The state's unemployment rate inched downward, from 5.4 percent in December to 5.2 percent last month, the Oregon Employment Department said.
Still, the department's reports offered evidence that the state's once-sizzling economy is in a now six-month-old cooling period that economists expect to last for a while.
"Clearly, Oregon has slowed down," said John Mitchell, regional economist for U.S. Bank in Portland. "There's no question about that."
Since July, Oregon's nonfarm economy has grown by 2,200 jobs, or one-tenth of a percent. That's a far cry from annual growth rates of 3 percent in 2005 and 2.9 percent in 2006 that ranked among the nation's highest. This year, by contrast, the Oregon Office of Economic Analysis expects more modest growth of 1.2 percent. (Farm work and self-employment are not included in the estimates because they are historically difficult to measure.)
"The flattening trend we've seen over the last five months is pretty solid," said Art Ayre, employment economist with the Employment Department.
Along with the department's January reports, Ayre and colleagues revised more than 18 months of data based on more accurate hiring reports from businesses. The revisions led to either weaker growth or steeper losses in housing-dependent sectors than had been previously reported.
The most consistent declines occurred in manufacturing, which lost 400 jobs last month and has lost 5,000 since August. The sector's biggest cuts have come in wood-products manufacturing, where total employment fell to 30,200, its lowest level in decades, Ayre said. Makers of transportation equipment and computer and electronics products also shed jobs in January.
Construction firms -- once driving the state's job growth -- shed 600 jobs last month and have cut 2,600 jobs in five months.
The state's financial activities sector, which includes lenders and real-estate firms, trimmed 700 jobs last month, reflecting the effects of somewhat higher interest rates. On the positive side, hiring at trucking and warehousing firms, coupled with fewer-than-expected seasonal job cuts by retailers, helped the state's trade sector post a 5,200-job gain last month. Restaurants, bars and other eateries fueled a 1,000-job expansion in the leisure and hospitality industry.
A decline of 1,300 jobs among normally growing private education and health employers likely reflects a short-term blip, Ayre said.
Mitchell said he doesn't expect to see Oregon's housing market turn around quickly. Last year, residential housing permits declined 15.9 percent, compared to 14.9 percent nationally, he said.
Instead, any significant job gains will come if businesses nationwide continue to invest in computers, trucks, buildings and other durable goods and Oregon exporters continue to find overseas markets for their products. Trade and manufacturing constitute nearly one-third of the state's 1.71million-strong nonfarm payroll.
"Oregon's got a lot riding on continued strength in business investment and continued gains on the trade side," Mitchell said. Corporate balance sheets and capacity utilization rates remain strong, he noted, and the state's 23 percent export growth last year also bodes well.
Brent Hunsberger: 503-221-8359; brenthunsberger@ news.oregonian.com; atwork.blogs. oregonlive.com
Feb 28, 2007, 10:00 PM
Right now I'm praying for the stock market to not decide to take another 9/11 plunge.
Feb 28, 2007, 11:38 PM
This could be a great thing for all of us.
Alaska to offer $500m incentive on pipeline
JUNEAU — Whoever wins the right to build Alaska's multi-billion natural gas pipeline will get as much as a $500 million jump start from state's coffers, Alaska Gov. Sarah Palin said today.
The money will help the successful bidder offset startup costs, such as permitting fees, Palin said during a telephone news conference from Washington, D.C.
This perk will be part of Palin's Alaska Gasline Inducement Act, also known as AGIA, which she plans to introduce Friday to the Alaska Legislature. Palin's bill would set project criteria which energy companies must meet in exchange for inducement incentives from the state to build a pipeline.
On Wednesday, Palin and Department of Natural Resources Deputy Commissioner Marty Rutherford discussed that plan and meetings held this with federal energy regulators and lawmakers in Washington.
The two said that the half billion dollar sum illustrates the state's commitment to take on risk associated with a project that could take North Slope natural gas to Midwestern markets in the Lower 48.
"We need to get off high-center," Palin said. "We need to progress this project. There are hungry markets for Alaska's natural gas."
Palin said she has asked federal officials, some of whom have chastised the state for lagging in efforts to get the pipeline built, for no favors. Instead, she and Rutherford have simply presented the state's plan to get a gas line built.
"She explained the state's position; we are behind her and we hope it works," U.S. Sen. Ted Stevens, R-Alaska, told The Associated Press after Palin's news conference. Stevens last week said he also was concerned with the pace of the project.
Palin also met with Federal Energy Regulatory Commission Chairman Joseph T. Kelliher, whose agency also has been critical of the state's progress.
Kelliher, however, said in a statement this week he was pleased with Palin's report.
"We talked about her efforts on the Alaska natural gas pipeline, which I believe represent the best hope for building a pipeline to bring Alaska's vast natural gas resources to the energy-consuming Lower 48 states," Kelliher said
Palin also today reiterated some of the applicant criteria, including:
— Providing for a minimum of five off-take points in Alaska. This means gas can be withdrawn from the line to power homes and businesses statewide.
— Committing a local project headquarters in Alaska. The means establishing hiring halls across the state, to give Alaskans access to the thousands of new pipeline jobs.
— Pledging to expand the pipeline project when new gas is available. This can accommodate untapped fields; for now there are about 35 trillion cubic feet of proven natural gas reserves.
Mar 1, 2007, 8:45 PM
German firm says new factory in Oregon to create 1,000 jobs
3/1/2007, 10:34 a.m. PT
By DAVID RISING
The Associated Press
BERLIN (AP) — Germany's Solarworld AG will invest $397 million in a newly acquired factory in Hillsboro, Ore. that will help it double its solar-cell and wafer production by 2010, creating at least 1,000 jobs, the company's chief executive said Thursday.
The Bonn-based company said the Hillsboro factory would be the largest solar-wafer and cell factory in the U.S. It should come online by the end of this year.
By the end of 2009, the plant will be able to produce solar silicon wafers and solar cells capable of generating 500 megawatts of electricity per year, Solarworld CEO Frank Asbeck told The Associated Press.
"This is a major step forward not only for our environment, but also Oregon's economy," said Oregon Gov. Ted Kulongoski. "SolarWorld AG will become a major partner in our state's move toward energy independence. I appreciate their commitment and dedication to achieving a clean energy future."
Solarworld will move current production facilities from nearby Vancouver, Wash. to Hillsboro.
The Vancouver plant, which makes silicon ingots used to build solar wafers, will be closed, but all 100 employees will be offered jobs at the new facility, Asbeck said.
The company also is expanding its factory in Freiberg, Germany, to the same level, meaning a total generating capacity of one gigawatt a year, or enough for 1 million people, Asbeck said.
He said the panels are guaranteed for 25 years.
Solarworld has production facilities in Germany, Sweden and the U.S.
It acquired the Hillsboro factory on Wednesday for $40 million from Japan's Komatsu-Group, which had invested $794 million in it to produce silicon computer chips, but abandoned the project when chip prices fell.
Solarworld will invest $397 million to convert it to produce silicon wafers and cells for solar panels.
"These things can be easily switched over," Asbeck said.
Solarworld currently employs 1,350 people worldwide.
The German company, founded in 1998, has grown rapidly with government subsidies for companies and households tapping renewable energy sources.
On the Net:
Mar 2, 2007, 6:04 PM
Deception Pass power study OK'd
The energy of the roaring tide that rushes through Deception Pass may soon be harvested.
Snohomish County PUD received word Thursday that it has three years to study whether it makes sense to plant tidal flow turbines at the bottom of the picturesque waterway.
The feasibility permit, issued by the Federal Energy Regulatory Council, is the sixth of seven tidal permits sought by the PUD in the Puget Sound region.
On Feb. 22, the utility received word that it had been granted permits at Spieden and San Juan channels in the San Juan Islands, Guemes Channel near Anacortes, Agate Passage near Bainbridge Island and Rich Passage near Bremerton.
"We're pleased that FERC recognizes that, as an electric utility, we have an obligation to serve and an obligation under Initiative 937 to develop renewable energy," said Steve Klein, the utility's general manager. "These permits will assist us in exploring new ways to fulfill our obligations."
The utility is still waiting for word on the most promising site - Admiralty Inlet, the main water passage into south Puget Sound.
The utility faces a competing permit from the city of Port Townsend at Admiralty Inlet.
Klein is optimistic that the utility will win there because it filed its permit first, it has an obligation to deliver electricity to customers and it is required by the state to come up with new alternative energy sources.
"I would think we're in a strong position," he said.
If the PUD finds that tidal turbines work at all of the test sites, it could then seek permission to install an estimated 1,662 turbines at the seven locations, according to the utility's filings with the federal government.
Together, the turbines would generate about 100 megawatts of electricity on average, enough for 60,000 homes - about every house and apartment in Mukilteo, Everett and Marysville.
Reporter Lukas Velush
James Bond Agent 007
Mar 4, 2007, 5:18 AM
Damn, this is good news. Having watched the Mariners for so many years with constant worries about them potentially packing up and moving, stuff like this is a welcome relief!
Saturday, March 3, 2007
Mariners won off the field in '06
Team recorded franchise-record $23.3M profit
By GREG JOHNS
Despite enduring a third consecutive losing season and their lowest attendance figure in 11 years, the Mariners were at the top of their game in the financial department in 2006.
Thanks to a large boost from Major League Baseball, the team recorded a franchise-record $23.3 million profit last season, according to the club's annual report to the Public Facilities District that oversees Safeco Field stadium operations.
The report, obtained Friday by the Seattle P-I, also indicates a record $32.6 million in the "special calculation" accounting category agreed to between the PFD and Mariners to determine the amount of income accumulated before the franchise begins sharing profits with the PFD.
An increase in national revenues, received in the fiscal year ending Oct. 31, is part of the reason the team was able to raise payroll to a record $111 million for the upcoming season despite attendance dropping to 2.48 million, the lowest total since 1995.
"It's unusual for the bottom line to come out so high," said Kevin Callan, executive director of the PFD. "But Major League Baseball is in great financial position and all the sources of revenues are strong, outside of local ticket sales. Baseball is in a good place right now."
This hasn't always been the case in Seattle. The franchise never reported a profit until Safeco Field's first full year of operation in 2000. The team has operated in the black every year since.
The Mariners will contribute 10 percent of profits to the PFD once the club recovers the $200 million in operating losses incurred from 1995-99, at which time Safeco Field opened. The 2006 total of $32.6 million reduces that net loss of the current ownership group to $68 million.
The past year's budget numbers are dramatic jumps from 2005, when the club reported an $8.3 million profit and $7.3 million figure in the PFD calculation.
According to a source with knowledge of the budget, about half of this year's $23.3 million profit comes courtesy of money generated by Major League Baseball's sale of the Washington Nationals, as well as increased broadcast revenue shared by all 30 big-league franchises.
The Nationals, formerly the Montreal Expos, were purchased by Major League Baseball in 2002 and run by the league until being sold to a group headed by Tom Lerner for $450 million last July. Profits from that sale were split among all teams.
That money is a one-time bonus, though the Mariners and other teams also benefited from new long-term television contracts with ESPN and Fox in the past year and a half. A new deal with TBS begins in 2008.
The club's report to the PFD said the $23.3 million net income was arrived at using "generally accepted accounting principles," and that none of that profit was distributed back to ownership, nor would profits go back to ownership "for the foreseeable future."
Under terms of the lease, the "special calculation" figure was determined by taking the $23.3 million net income, then adding depreciation and amortization of $20.8 million while subtracting player signing bonuses of $9.8 million and capital expenditures of $1.7 million.
The bottom line is that the Mariners' bottom line was healthier than the win-loss record in 2006, when the club went 78-84 and finished last for the third consecutive season.
James Bond Agent 007
Mar 4, 2007, 5:21 AM
In fact . . .
The past year's budget numbers are dramatic jumps from 2005, when the club reported an $8.3 million profit and $7.3 million figure in the PFD calculation.
If they can make a profit of $8.3 million even with such a horrible season as they had in 2005, that's really good news!
Mar 4, 2007, 11:59 AM
^ Def not the Gayloard Perry days that is for sure however, Seattle does need to bring some talent "new blood" to strengthen thier game and fan base. Edgar leaving, Ichiro (who I followed extensivly when I lived in Japan prior to his MLB entry) has still remained great, and will ever carry that Michael Jordan status across the Kanto Plain but even his fan base which equals $$ has calmed down with all the new Japanese players comming over i.e. new lad in Boston.. Seattle has also allowed some great talent to walk which is inevidble but replacements have not been as good. It is great the profit is there and Seattle now has a couple of great franchises with the Seahawks as well but in Mariner's case winning obviously brings attendance and the Mariner's sub par performance over the last few years has really effected thier attendance.
Attendance figures (ESPN)
2001 Total Home Attendance 3,507,326 MLB rank #1
2002 Total Home Attendance 3,542,938 MLB rank #1
2003 Total Home Attendance 3,268,509 MLB rank #2
2004 Total Home Attendance 2,940,731 MLB rank #10
2005 Total Home Attendance 2,689,529 MLB rank #12
2006 Total Home Attendance 2,480,717 MLB rank #15
Mar 5, 2007, 9:30 PM
Oregon the Saudi Arabia of Hydrogen?
'Saudi Arabia of hydrogen'
That's how former BPA official refers to Oregon's energy future
Portland Business Journal - March 2, 2007
by Matthew Kish
Business Journal staff writer
A new player entered the renewable energy debate this week when Rep. Vic Gilliam, a Republican from Silverton, introduced a resolution that urges legislators to make hydrogen a central part of the dialogue on the state's energy policy.
The technology is miles behind other renewable resources like solar and ethanol, but has more potential than any of its more mature peers, say experts.
The Columbia River carries enough hydrogen in less than four minutes, for instance, to power every American car for a day, according to a draft of House Resolution 1 shared with the Business Journal.
The group spearheading the effort to promote hydrogen is the Northwest Hydrogen Alliance, a nonprofit formed in 2003.
"The objective of the Hydrogen Alliance is to move the hydrogen industry into a practice phase very quickly and to create a new world-class industry in the Northwest based on hydrogen," said Jack Robertson, the organization's chairman, who is fond of calling the Northwest the "Saudi Arabia of hydrogen energy."
Hydrogen is the most abundant element on earth. When combined with oxygen, hydrogen produces electricity. The process doesn't produce any carbon emissions, unlike other forms of power production, such as coal-fired plants.
Robertson is no Don Quixote. He ran the Bonneville Power Administration, which supplies half of the power consumed in the Northwest, for 15 years. He thinks hydrogen technology could eventually answer all of the state's power needs.
His vision calls for the development of hydrogen hubs, or mini power stations, that would be placed throughout the state. The hubs would run on a new version of hydrogen technology, which calls for storing hydrogen as ammonia. The hubs wouldn't necessarily produce cheaper power than existing utilities, but because the technology is clean, they could be plopped in the middle of Portland, thereby eliminating the need for the costly transmission of power from rural power plants. The hubs would also serve as refueling stations for hydrogen-powered cars.
The first hub could be online within a year, Robertson said. The group is already working with two manufacturers, although Robertson declined to share names, that are building prototypes of the engines that would drive the technology.
If everything goes according to plan, the engines and hubs would be manufactured in Oregon, creating a new industry in the state and simultaneously making Oregon a crown jewel in the nation's renewable energy revolution.
Scientists, however, say two big hurdles remain: cost and storage.
Several automakers, including Honda and Toyota, have prototypes of hydrogen-fueled cars, but they cost enough to make a Maybach look like a Ford Escort at around $1 million for a two-door. They also need refueling every 300 miles, which is tough given the absence of hydrogen fuel pumps.
"We don't have technologies right now to address those issues," said Said Al-Hallaj, a research professor at the Illinois Institute of Technology, and expert on hydrogen technology.
The Northwest Hydrogen Alliance is on the verge of solving both problems, Robertson says.
The answer: ammonia. And lots of filling stations.
His group is working with John Holbrook, a Stanford-trained former scientist at the Pacific Northwest National Laboratory who has studied hydrogen for nearly three decades.
Holbrook refers to his work with religious zeal, sayings it's his life calling and comparing his partnership with Robertson to a holy alliance.
Since retiring from the Pacific Northwest National Laboratory, Holbrook has started two companies that work on hydrogen technology -- AmmPower and NHthree (NH3 is the scientific symbol for ammonia).
Ammonia is rich in hydrogen and easily stored and transported, unlike hydrogen gas. That makes it the perfect fuel source for creating electricity from hydrogen, Holbrook says. It can also be made with renewable wind and hydropower, making the entire process an environmentally friendly closed loop.
Holbrook foresees the multiple hubs Robertson would like to build as filling stations, creating the infrastructure to make hydrogen cars more affordable.
Robertson is working on a business plan to demonstrate the idea's economic feasibility. He hopes to finish the plan this spring and discuss it with government officials and investors.
"I'm not interested in a perpetual research project," he said.
Some scientists, such as Al-Hallaj, remain dubious.
"If we're lucky, we'll replace a few percent of the existing power market [with hydrogen technology in the next 20 years]," he said. "There is some sort of agreement right now that there's no silver bullet or solution. There's no holy grail. What you will see is there are many technologies out there and they each have pros and cons."
At least for now, investors seem to be siding with Al-Hallaj. The Northwest Hydrogen Alliance only has $10,000 in assets. Robertson doesn't even draw a salary for his work.
One of the few publicly traded companies working on hydrogen technology, Scottsdale, Ariz.-based Ecotality Inc., is still pre-revenue. The company's stock labors below $1, even though it put a prototype of a hydrogen-fueled bus on the road last week. As for the legislative proposal, although it's more ceremonial than functional, it should at least receive a hearing. Influential Rep. Jackie Dingfelder, a Portland Democrat who chairs the Energy and the Environment Committee, has signed on as a co-sponsor.
"We will be heard, and I believe passed, this session," Gilliam said. "I hope it shines a light on the potential in hydrogen and we make sure whenever we talk about energy, hydrogen is, at the minimum, on the list, and in my point of view, on the top of the list."
firstname.lastname@example.org | 503-219-3414
Mar 5, 2007, 9:31 PM
New county commissioner takes on an unpopular tax
Jeff Cogen puts together group to study business tax reform
Portland Business Journal - March 2, 2007
by Andy Giegerich
Business Journal staff writer
The newest Multnomah County commissioner, wants to reform a primary business tax, just like his fellow city hall staff alumnus Portland City Commissioner Sam Adams.
Jeff Cogen, who served as chief of staff for Dan Saltzman before joining the county board, will seek changes to the county's much-maligned business income tax. He's formed a work group that will spend the next several weeks studying various reforms.
Many of the group's recommendations could mirror those posed by Adams, who upon joining the Portland City Council, began a two-year drive to reform the city's business license fee structures. The efforts have earned Adams, who served as Mayor Vera Katz's chief of staff, business-community acclaim that many believe could provide future political capital.
The reforms will take a little work, but not much time. Cogen's first step came March 1 when he began assembling the group that'll study tweaking the 1.45 percent tax charged to county business owners' net income.
The group must submit a full set of recommendations by April 5.
The process could go quickly, though, because Cogen will draw on Adams' city fee reform experiences. Warren Jimenez, Adams' senior policy director, will serve on the county tax reform work group.
"After all the work Sam put into it, we don't want to start from scratch," Cogen said. "We want to take that data, study it and see if it works for the county."
County Chair Ted Wheeler endorsed the notion, calling it a potential boon to smaller businesses. More than 94 percent of all Multnomah County businesses employ 50 people or less, according to Cogen's office. More than half, or 13,000 businesses, employ fewer than five workers.
"We want to be fair and equitable to small businesses in Portland," Cogen said.
The business income tax contributed $51 million to the county's $350.3 million general fund during the last fiscal year.
Among other ideas, the reform work group could analyze whether the county needs to add a minimum tax.
Such groups as the Portland Business Alliance praised the Adams measures because the moves could spread the financial burden more evenly.
Because the county bases its business tax on a flat rate, it's more volatile than that levied by the city. The county's business-based revenue therefore drops when the economy's bad, Cogen said.
Along with Jimenez, the business tax reform work group will include representatives from the county's budget office, Wheeler's office, the Gresham Chamber of Commerce, PBA, the West Columbia Gorge Chamber of Commerce and a group that represents minority or women entrepreneurs.
Other representatives will come from a small-business advisory committee, a public employees' union and a to be determined nonprofit.
Cogen and Wheeler both called for business tax reforms during their 2006 campaigns.
"There's a strong interest on the part of the board to do something," Wheeler said. "The 'something' is yet to be determined, but I can guarantee you that Multnomah County will be working on business income tax reform."
The City Council will begin implementing some of its business license fee reforms next month. For instance, it will slash all fees for businesses with annual revenue of less than $50,000. It will also boost the amount of wages that business owners can deduct, from $60,000 to $80,000.
The business license fee changes, which passed the Portland City Council unanimously on Jan. 19, marked the first time that the city has slashed its business taxes in 30 years. Overall, the moves will reduce the business license fee revenue by $3 million, which amounts to a permanent tax cut.
"The business income tax is a little different from the business license fee, but Sam wants to do what he can to support the direction the county will take," Jimenez said.
email@example.com | 503-219-3419
Mar 7, 2007, 4:31 PM
Clark County jobless rate rises in January The January jobless rate of 6.2 percent in Clark County was four-tenths of a point below last January's but well above December's, the state reported Monday.
The increase of January's rate over December's 4.8 percent was to be expected, said Scott Bailey, the Washington Employment Security Department's Southwest regional economist. The January 2006 rate was 6.6 percent. The county jobless rate is unadjusted seasonally.
The county's nonfarm employment total in January increased by 3,900 jobs over a year ago, Bailey noted, from 133,400 this January compared with 129,500 last -- reflecting 3 percent growth. But there were 135,700 total jobs in the county in December. That meant a nearly 2 percent month-to-month decrease.
Washington's January unemployment rate, adjusted for seasonal fluctuations, was 5.1 percent; the national rate was 4.6 percent; and Oregon's rate was 5.2 percent.
-- Allan Brettman
Mar 7, 2007, 11:11 PM
Paul Allen gives grant for Contemporary Crafts Museum and Gallery
Portland Business Journal
March 7, 2007
The Paul G. Allen Family Foundation has awarded $700,000 in grants to support the arts as well as literacy efforts in Portland.
The foundation gave a total of $9.5 million in grants to various nonprofit organizations in the Pacific Northwest as part of its latest philanthropy round.
The first grant is a $300,000 gift to the Contemporary Crafts Museum & Gallery.
The gift will support the museum's capital campaign to acquire space in the former Daisy Kingdom Building, which is being renovated into office and art space on the North Park Blocks at the edge of Old Town/Chinatown.
Now called the DeSoto project, the former car dealership is being redeveloped by Winkler Development Co.
In a separate grant, the foundation provided a two-year $400,000 gift to the Library Foundation Serving the People of Multnomah County for its programs that promote literacy.
Hub for an Empire
Mar 9, 2007, 7:43 PM
From yesterday's Spokane Business Journal. Way to go Itron. Thank Spokane for your next Utility Bill!
Itron about to become a giant Printer-Friendly Version
$1.6 billion Actaris acquisition to add 6,000 employees, nearly 30 factories worldwide
By Emily Brandler
Itron CEO LeRoy Nosbaum
Three and a half years ago, Itron Inc. proved that it wasn’t afraid to take big bites when it agreed to spend $255 million to buy Schlumberger Electricity Metering, a leader in the North American electric meter market.
Now, in a move that makes that acquisition look like an appetizer, the Liberty Lake-based maker of utility-meter reading technologies says it’s sinking its teeth into a $1.6 billion deal that will make it a world leader in utility meters and meter-reading equipment.
Acquisition of Actaris Metering Systems, the Luxembourg-based company that Itron is buying, not only will double Itron’s annual revenues, it will give the Liberty Lake company 6,000 employees in addition to its current 2,500 workers, nearly 30 additional manufacturing facilities worldwide, and expanded product offerings. The sale is expected to close in the second quarter.
“I think it’s notable that a company from Spokane can grow from an outgrowth of a local utility company to become what is without question the largest supplier in the world for electricity meters,” says LeRoy Nosbaum, Itron’s chairman and CEO. “The real add is the huge presence we will have outside the U.S.”
Actaris formed in 2001 through a leveraged buyout of another Schlumberger unit, this one called Schlumberger Resource Management Services, which, like Schlumberger Electricity Metering, was a unit of Houston-based Schlumberger Ltd., a big global oilfield and information-services company. Actaris is a world leader in the design and manufacture of meters and related systems for the electricity, gas, water, and heat markets. It has operations in 60 locations in more than 30 countries, including Russia, China, India, Indonesia, Australia, South Africa, Argentina, and a host of European countries.
The company says it has an installed base of about 300 million electricity, gas, and water meters around the world. Its clients include public and private energy and water suppliers, utility services, and industrial companies.
In 2006, Actaris had revenues of about $1 billion, compared with Itron’s roughly $644 million in revenues, Nosbaum says. Itron expects the acquisition to boost its 2007 earnings by 20 cents to 30 cents a share, and its revenues by about $730 million, giving it total revenue of $1.4 billion this year, he says. Its customer base will grow from nearly 3,000 utilities to more than 8,000 utilities.
John Quealy, a Boston-based research analyst for Vancouver, B.C.-based Canaccord Adams who watches Itron’s stock, says the acquisition is complementary because of the minimal overlap between the two companies’ geographical focus and product offerings. While Itron is the leading meter-reading technology provider in North America, Actaris is an internationally-focused meter supplier.
“Itron bought Actaris for geographical and technology opportunities,” Quealy says. “What we see is the ability of Itron to integrate its advanced metering technology into the standard product base of Actaris, and that base is immense.”
In addition, since the two companies share a common tie with the Schlumberger units and their core leadership teams have worked closely together in the past, the merger will be a good cultural fit and result in a smoother integration, Quealy asserts.
“There’s been a lot of acquisitions and strategic movements in the advanced metering group in the past year or so, and Itron has been very calculated in its approach in who would be the best partner,” Quealy says. “Actaris is one of the best partners they could have identified.”
On Feb. 27, the day after Itron announced the acquisition, its stock rose $3 a share to close at $66.81. While the company’s stock fell a bit as the “market melted” last week, Quealy says he expects the merger will significantly boost Itron’s stock in the future.
“It was the absolute right target, and the market is applauding them for that,” he says. Of Itron’s stock-market performance on Feb. 27, he says, “It gave an indication of what investors saw in the potential here.”
Currently, only about 7 percent of Itron’s business is international, so in addition to expanding the company’s product base to include gas and water meters, the acquisition also will give Itron greater access to international markets for its automatic meter-reading and advanced metering infrastructure technologies, software, and systems expertise, Nosbaum says. Itron’s meter-reading technologies enable utilities to collect meter data remotely.
“The idea of providing utilities and their customers with more information is just beginning to gain steam in the rest of the world as utilities become more focused on conservation,” Nosbaum says. “This provides Itron a platform for growth in the future.”
Itron and Actaris will continue to operate independently, so only a handful of jobs will be added in Spokane over time, he says. The deal will mean, though, that Itron will have added management responsibility over significantly more employees and the operation of 29 additional factories and 45 more sales offices worldwide.
To help finance the acquisition, Itron recently sold more than 4 million shares of common stock at $57.50 per share in a private placement to 10 institutional investors, giving the company gross proceeds of about $235 million, before fees and other expenses. In addition, the company will use $325 million in cash on hand for the acquisition, says Deloris Duquette, vice president of investor relations and corporate communications. The rest of the acquisition cost will be financed through nearly $1 billion in bank debt, Duquette says. Itron had $469 million in debt as of Dec. 31, before agreeing to the transaction, she says.
“It’s a goodly piece of debt on our books,” Nosbaum says. “We’re well within the capability to pay down debt we are incurring with the acquisition.”
Itron is a publicly held company that Avista Corp., then called Washington Water Power Co., formed in 1977 and later spun off as an independent entity. Its headquarters are located in the 200,000-square-foot former Telect Inc. building in Liberty Lake, and it has three manufacturing plants and nine offices worldwide.
James Bond Agent 007
Mar 9, 2007, 11:22 PM
Wow, impressive news for a Spokane company!
Maybe they'll get really big and move to downtown Spokane and build a new skyscraper. :eat:
Mar 10, 2007, 12:30 AM
interesting, maybe a fortune 500 company in the making...
speaking of washington f500 companies, is that Logistics company based in Seattle(can't remember the name) in the f500 yet? last I checked it was like 501 and rising very very fast.
Mar 10, 2007, 12:34 AM
awe here it is, Expeditors Intl of Washington at 506 with revenue growth of nearly 18%, it jumped by 17 spots in one year:
they should be a Fortune 500 company when this years list comes out, especially with all the shipping increases across the world. In fact, I just saw that it was the 3rd biggest logistics company in the world, and gaining on number 2, because number 2, CNF was down 30% last year. pretty cool.
Mar 13, 2007, 11:42 PM
A couple posts regarding expansions, locating jobs, etc. and Oregon's future role in the "sustainability industry."
Shining light on the SolarWorld deal
Friday, March 09, 2007
By Susan Gordanier
The Hillsboro Argus
In 1997 Komatsu Ltd., of Japan, invested over $400 million to build a state-of-the-art silicon wafer manufacturing plant on Evergreen Road.
On March 1, SolarWorld AG, of Germany, announced purchase of the 422,000 square-foot plant. They plan to convert it to a state-of-the-art manufacturing site for solar panel components.
Despite media reports, SolarWorld did not purchase the building from Komatsu. It had passed through two other owners.
Faced by a declining microchip market, Komatsu never progressed beyond shipping samples from the plant and kept at most 16 staff onsite. Mayor Tom Hughes says it was "the most expensive front office anywhere."
After a series of accounting write-offs, Komatsu sold the building in 2004 to the Park Company of Oregon LLC for $5 million, according to a document on Komatsu's Web site.
In December 2004, Park was asking $75 million for the property, the Portland Business Journal reported. It didn't sell until October 2006, when it passed to the Benaroya Company, of Seattle, another commercial real estate company - for $22 million.
Just five months later SolarWorld has paid $40 million for the facility and intends to invest as much as $400 million more, numbers reminiscent of Komatsu's original stake.
Though Komatsu's loss has become others' gain, the City of Hillsboro may be the biggest winner of all.
The potential doesn't escape either Mayor Hughes or Larry Pederson, the city's director of economic development.
If Komatsu had persevered, the city's northern industrial tier might have been dominated by two microchip giants, Intel on the east and Komatsu to the west, and exposed to the caprices of a single industry.
"Look at microchips worldwide," Pederson said. "In contrast, solar growth is expanding tremendously."
Hughes points to the growing number of industry clusters attracted to the city's economic zone: silicon, nanotechnology, biotechnology and medical equipment, and now, solar.
Though the solar industry is also silicon based, it can provide the local economy some downside protection in case other clusters falter, Hughes said.
SolarWorld's local presence, and promise of attracting related companies, provides Hillsboro with a niche within Governor Ted Kulongoski's plans to make Oregon "the clean energy capital of the nation."
"Sustainability" can be difficult to market: Portland has a niche in the design and construction of green buildings, Pederson said. SolarWorld could provide Hillsboro's niche as the county isn't likely to convert from grass seed and nursery stock to growing biofuel. The coast has wave electricity generation, timber areas can produce woody biomass and eastern Oregon can grow crops for biofuel.
Our niche is a work force competently trained in silicon, Hughes said.
Pederson expects about 300 employees at SolarWorld's plant within 18 months. A human resources representative for the company told him their voicemail has already filled with applicants wanting to work in Hillsboro.
Here is the other, brief(er) article.
First Silicon Solutions expands
Portland Business Journal - 9:48 AM PDT Tuesday, March 13, 2007
MIPS Technologies Inc. has expanded its growing software and tools business in Beaverton.
The new Beaverton facility will serve as the headquarters for First Silicon Solutions, a division of Mountain View, Calif.-based MIPS Technologies (NASDAQ: MIPS) and a Portland-based business since 1998.
First Silicon Solutions specializes in system-level debug and development tools for real-time embedded systems.
MIPS Technologies is a provider of industry-standard processor architectures and cores for digital consumer, networking, personal entertainment, communications and business applications.
Lastly, there is this article which confuses me (one buys the other, but the other is now bigger?).
Ascentium acquires Centerlogic
Portland Business Journal - 12:28 PM PDT Tuesday, March 13, 2007
Centerlogic Inc. has been sold to Ascentium Corp. for an undisclosed sum.
Portland-based Centerlogic is an information technology consulting company founded in 1997.
Bellevue, Wash.-based Ascentium is a technology and marketing consulting company that employs more than 300, with 2006 revenues exceeding $30 million.
Ascentium officials said that with the purchase, the company will become the "largest consultancy of this kind in Oregon."
The companies together launched the Microsoft Innovation Center at Portland State University.
James Bond Agent 007
Mar 14, 2007, 12:39 AM
Tuesday, March 13, 2007
Carson says Boeing's upswing has a long way to go
By Dominic Gates
Seattle Times aerospace reporter
Phoenix, Ariz. — Don't look for an end to Boeing's roll anytime soon, Boeing Commercial Airplanes chief Scott Carson told an audience of aircraft buyers, lessors and financiers here this morning.
Following two successive years in which Boeing topped 1,000 new aircraft orders, he said the current industry up-cycle is different than those in the past, one that may be curtailed only if there is an unforeseen disaster such as a terrorist attack.
"This, without any question, is the strongest cycle this industry has seen," he said, "Short of some exogenous shock, we see that it is stronger and longer lasting and has some good long miles still to run."
He also reaffirmed Boeing's commitment to deliver the new 787 on time.
Carson arrived at the annual conference of the International Society of Transport Aircraft Trading straight from Moscow, where he spent the weekend and signed a contract with the Volga-Dnepr Group for five new 747-8 jumbo jet freighters, worth $1.4 billion at list prices.
Carson's assertion that the 787 is on schedule came the day after top Airbus salesman John Leahy tried to throw cold water on optimism about a timely 787 delivery at the same conference.
Carson's definitive contradiction of any 787 delay took on much more weight later in the speech when he said: "Promises made, promises kept. That's the driving force through our company today."
That comment came when he talked about the pressure to raise production rates on current jets because of high demand. He said Boeing was ramping up in a slow and disciplined fashion, leading to some "frank conversations we've had with valued customers about the availability of airplanes."
But such difficult conversations, he said, were preferable to telling them later that Boeing couldn't deliver as promised — something Boeing was forced to do in the late 1990s after a production ramp up went badly wrong and assembly lines in Renton and Everett came to a dead stop for a month.
"We've been there. We've done that. And we're not going back," Carson said.
The commercial airplane chief's bullishness on the continued strength of the current cycle was based, he said, on detailed analysis by Boeing.
He said the world airplane market had changed significantly in ways that will tend to prolong the up-cycle:
• The demand for airplanes is no longer so heavily dominated by the U.S. but is geographically spread throughout the world.
• Traditional legacy carriers are no longer the only game in town as liberalization of regulations has led to much more diverse and successful business models, including low-cost carriers and all-business class airlines.
• Across all regions of the world, the need for replacement of aging aircraft is strong, especially as fuel prices remain high.
Before Carson spoke, a panel of aircraft valuation experts had led a lively morning session. That discussion too was very positive for Boeing.
Doug Runte, an industry analyst with RBS Greenwwich Capital Markets, went out on a limb to predict that Boeing's 747-8 jumbo will outsell the Airbus A380 superjumbo over the next 20 years.
The experts disagreed about Boeing's timing and plans for a 737 replacement aircraft.
Clive Medland, a senior vice president at aviation consulting firm SH&E, is convinced Boeing will deliver two different replacement jets, a thin one and a fat one, and that the first will enter service as early as 2012.
Doug Kelly, a vice president at aircraft valuation firm Avitas, thought that didn't make sense and that 2015 is a likelier date.
Clearly, Boeing is keeping everyone guessing on its plans for a new generation of single-aisle planes.
James Bond Agent 007
Mar 15, 2007, 10:15 PM
Thursday, March 15, 2007
State revenue jumps; reserves hit $2 billion
By DAVID AMMONS
The Associated Press
OLYMPIA — Washington's robust economy is gradually cooling, but will produce another tax windfall of $126 million, driving the state's reserves to a record $2 billion, state revenue officials said today.
The new projection, unanimously approved by the state Economic and Revenue Forecast Council, comes just a week after a separate Caseload Forecast Council said lower demand for state services will reduce costs by nearly $240 million.
That means legislators and Gov. Christine Gregoire will have well over $300 million in new spending capacity — or to set aside into savings. The governor's budget director, Victor Moore, told reporters the administration supports a strong budget for schools, health care and other priorities, but also would like lawmakers to expand the state's reserves.
The governor's own $30 billion budget proposal, released last December and based on an assumption of a $1.9 billion projected surplus, suggested spending about $1.3 billion and leaving about $600 million in savings, including money in a hard-to-tap "rainy day" fund.
Chang Mook Sohn, the state's chief economist and the council director, said the new forecast represents only minor changes from the November forecast. He said the state economy is still sound, with no recession in sight for the next two years. Construction and home sales are lagging below the torrid pace of recent years, but haven't gone flat, he said.
Sohn said he expects $144.3 million in new revenue to roll in by June 30 and a slight decline, about $18 million, from his November forecast for the new two-year budget period that begins July 1.
The new projected surplus now tops $2 billion for the first time, but much of it will disappear as lawmakers write their new two-year budget. House Democrats announce their plans next Tuesday and the Senate will follow a week later.
The reserve includes about $740 million that lawmakers set aside for pensions, education and health care for use in the upcoming budget.
The current budget is about $27 billion.
Mar 15, 2007, 10:19 PM
^That is great for washington, embarrassing for oregon. Talk about total opposites.
Mar 15, 2007, 10:55 PM
what are you talking about, Oregon's budget is up something like 14% this year...
Mar 15, 2007, 11:36 PM
^^^Yeah, after years of being at the bottom theres no where to go but up! Schools are still very subpar in the state and everything else is pretty much mediocre at best as well. I'm sure the fact that our legislature is a joke and our tax system dated doesn't help.
Mar 15, 2007, 11:47 PM
Precision Castparts stock hits $100
Portland Business Journal - 1:11 PM PDT Thursday, March 15, 2007
Precision Castparts Corp. reached a milestone Thursday in early trading when its stock hit $100 for the first time.
By the end of trading, the Portland-based company (NYSE: PCP) set a 52-week record at $99.95.
The company has been on an incredible growth streak the past few years.
Shares have climbed roughly 500 percent since the company named Mark Donegan CEO in 2003. They traded for less than $10 four years ago.
Analysts credit the booming aerospace industry for a lot of the growth. The company makes metal parts for a variety of markets, primarily the aerospace industry. Precision also manufacturers metal parts for the power generation and automotive industries.
Analysts also credit Donegan and his team for several successful acquisitions. In the past year, Precision has announced acquisitions totaling roughly $700 million. Speculation persists the company could make another large acquisition in the near future.
Last month, Precision posted another stellar quarter. Sales increased 62 percent from the same quarter a year ago to $1.38 billion. Income grew 65 percent to $158.7 million.
The company is the third-largest public company in Oregon and the state's largest manufacturer. It has 2,700 Oregon employees and 18,800 employees overall.
Things to know:
last year PCP's stock was around 8 Billion in value, today it's around 13.7
last yera PCP's revenue was 3.5 B, it's estimated to be 5.28 B this year
earnings/profits are up, it's made at least two acquisitions this year alone.
With Boeing, one of it's biggest buyers, projecting future growth; so too will PCP.
Mar 16, 2007, 4:42 PM
^^^Yeah, after years of being at the bottom theres no where to go but up! Schools are still very subpar in the state and everything else is pretty much mediocre at best as well. I'm sure the fact that our legislature is a joke and our tax system dated doesn't help.
we have our problems, every state has their problems, if you've been following this legislative session, it is much better than in the past. In fact, by the end of this session the groundwork for bigger changes will be more noticable. We just needed to strengthen D majorities as the R, at least in Oregon, appeared ready to obstruct than reform. I'm not embarrassed by the current situation, but I will be if Oregon ever faulters like it did 3-5 years ago.
OHSU startup gets $20 million
The venture capital will back research into noninvasive tests for pregnancy complications
Friday, March 16, 2007
TED SICKINGER The Oregonian
ProteoGenix, a Portland startup spun out of the pediatrics department at Oregon Health & Science University, has bagged $20 million in venture capital to fund further testing of diagnostic tests for pregnancy complications.
The investment is the largest announced venture round in the state this year, and one of its largest biotechnology investments ever. It comes after a year in which venture capital funding in the state declined by nearly 40 percent.
The funding's also a welcome sign for OHSU. The university's been striving to create biotech economic development since 2001, when it persuaded the state to provide $200 million in tobacco settlement money to underwrite recruitment of scientists and build more research space.
ProteoGenix uses protein-identification technologies to find protein markers for pregnancy complications in amniotic fluid, cervical fluid and maternal serum. Sri Nagalla, one of the OHSU scientists who founded ProteoGenix, said the company was unable to speak publicly about its technology because of a related deal that's under way. But three early applications outlined on its Web site include noninvasive detection of conditions such as Down syndrome, prediction of pre-term birth and diagnosis of intra-amniotic infections.
In 2004, pharmaceutical giant Eli Lilly and Co. engaged ProteoGenix in a five-year research agreement to seek proteins that could be used to identify children at risk of delayed growth.
The $20 million investment will underwrite research to identify additional protein markers, and clinical trials to prove the efficacy of its technology -- expected to take 18 to 24 months.
If successful, ProteoGenix expects a ready market for its technology. The company says U.S. doctors perform 2.6 million commercial tests annually to detect Down syndrome. Nationwide, 500,000 preterm births take place annually, generating billions of dollars in health care costs.
ProteoGenix has about 15 employees now and will grow to about 30 as it moves from space on OHSU's main campus to a startup incubator that the university is establishing on its west campus in Hillsboro.
Although OHSU spun off only three companies last year, university Vice President for Research Dan Dorsa said ProteoGenix's funding was a sign that some of the companies the university has cultivated are beginning to mature. He cited Artielle Immuno Therapeutics Inc. as another example.
Instead of patenting ProteoGenix's technology and retaining ownership of the intellectual property -- which can be expensive -- OHSU took an equity stake in the company and encouraged the company to seek its own portfolio of patents using outside legal counsel. Post-funding, OHSU will own 5 percent of the company.
Dorsa said ProteoGenix was a unique experience for OHSU, which had incubated the company internally, providing services and space in return for equity.
"Its a different model," he said. "I'm not sure we'd want to do that always. But with our stake in the company, we'd be able to be compensated down the road" if the company succeeds.
New Leaf Venture Partners and TPG Growth led the series B round, which also included an investment by Burrill and Co.
New Leaf is the venture affiliate of Credit Suisse First Boston, which manages a $100 million fund of public pension money set aside by the Oregon Investment Council to finance startups in Oregon. Burrill received a $10 million investment from that fund.
Ted Sickinger: firstname.lastname@example.org; 503-221-8505
Mar 16, 2007, 7:45 PM
Mar 17, 2007, 5:31 PM
Boeing taps Portland for jet-size paint job
PDX - Two Port hangars clouded by debt will be used to give new planes a final coat
Saturday, March 17, 2007
Brand-new, green-sheathed Boeing jets will begin touching down at Portland International Airport this summer to be painted inside two giant hangars.
A 15-year lease agreement between Boeing and the Port of Portland, scheduled to be approved by Port commissioners next week, promises several dozen jobs and expands the airline manufacturer's Oregon presence.
The deal also opens a new chapter in the life of the scandal-tainted hangars that drained tens of millions of dollars from the state's public-employee retirement fund.
The Port, which operates PDX, issued $50 million in revenue bonds in the early 1990s to finance hangar construction, wooed by promises from Pacific Aircraft Maintenance Corp. Pacific said it could employ as many as 1,300 people, making Portland a hub for maintaining planes. But Pacific shut its doors a month after opening in September 1993. The retirement fund, which backed the bonds, was left holding the bill: $131.3 million, including interest, to be paid by 2022.
The state filed lawsuits in the years that followed and won multimillion-dollar judgments after a judge found that Pacific's principals misled state officials and milked the company of assets. Insurers and project developers have paid the state a total of $21.9 million.
In the years since Pacific closed, the state treasurer's office has rented hangar space to a variety of tenants, including the Air Force Reserve, Horizon Air and SkyWest Inc. Not even counting the enormous bond debt, the retirement fund lost about $1 million operating the hangars over the past nine years, due largely to maintenance and operation expenses averaging $1.2 million annually.
Kate Richardson, chief of staff for state Treasurer Randall Edwards, said that with the Boeing deal, the agency is realizing its goal of handing back management of the hangars to the Port.
"We inherited this big, fat challenge . . . that was based on a false premise in the first place," she said. "It's great that Boeing came in when they did; that wrapped up the deal."
Though the arrangement will allow the treasurer's office to get out of the hangar-management business, the retirement fund will continue paying nearly $5 million annually on the bonds.
Mary Maxwell, the Port's aviation director, said Boeing representatives contacted the Port in recent months to begin negotiations. Boeing will pay the Port $844,000 annually and assume responsibility for property taxes, utilities and maintenance.
Debbie Heathers, a Boeing spokeswoman, said the company would sublease the hangars to a firm that will paint new Boeing 747s, 767s and 777s. She would not precisely predict employment, but said it would be fewer than 100 people, including a handful of Boeing employees overseeing the contractor.
She said Boeing began looking for a painting site because it is renovating three such hangars in Everett, Wash. In addition, she said, new space was needed because of the demands on Everett from production of Boeing's new 787 Dreamliner.
The company expects to send 27 planes to Portland for painting between May and January, Heathers said.
Planes arrive with a protective green coating over their aluminum skins. Workers remove the coating with detergent and water that is heated and under pressure.
The painting -- livery, in aviation parlance -- takes two or three days on smaller craft and as many as six days on two shifts for larger planes, especially for elaborate designs.
Boeing already has a significant presence in Oregon.
A Boeing plant in Gresham employs 1,450 workers who make machined parts and structures for jetliners. PCC Structurals Inc., a subsidiary of Portland-based Precision Castparts Corp., makes forgings and framework for jets and engines.
Evergreen International Airlines, based in McMinnville, is providing crews to fly cargo jets that ferry parts of the forthcoming Boeing 787 Dreamliner between factories.
Alex Pulaski, 503-221-8516; email@example.com
Staff writer Richard Read of The Oregonian contributed to this report.
Mar 19, 2007, 10:45 PM
Oregon job growth rebounds in February
By Associated Press
SALEM, Ore. (AP) - After six months of flat job growth, Oregon's work force grew by 7,000 jobs in February, the largest monthly gain since December 2005.
The Oregon Employment Department said today that in its monthly jobs report, Oregon's seasonally adjusted unemployment rate was 5.3 percent last month. That's virtually unchanged from the January rate of 5.2 percent.
The national jobless rate was 4.5 percent. There were about 118,000 Oregonians on the jobless rolls last month.
David Cooke, an economist with the employment agency, called the jump in payroll employment "a surprisingly robust jobs gain."
However, the agency said manufacturing continued to show weakness this past month.
(Copyright 2007 by The Associated Press. All Rights Reserved.)
James Bond Agent 007
Mar 20, 2007, 6:17 AM
Design staffs grow as boom in construction kindles demand for architects
Puget Sound Business Journal (Seattle) - March 16, 2007
by Justin Matlick
As an ongoing construction surge energizes Washington's economy, local architecture firms are adding employees at a rapid clip, and economists expect architecture to be one of the state's fastest-growing occupations for years to come.
Two of the biggest local firms, NBBJ and Callison, expect to boost staff levels by at least 20 percent this year, reflecting not only the strong state economy but also a worldwide building frenzy.
When it comes to demand for architects, "the whole world seems to be abuzz at the same time," said William Karst, Seattle-based Callison's chief executive officer.
A new report from the state Employment Security Department projects architecture to be the state's second fastest-growing occupation in 2007 -- behind veterinary technologists and technicians -- with an average annual growth rate of 2.7 percent. Statewide, there were 314 vacant architect jobs as of January, with another 159 expected to open up this year, according to the department.
State projections anticipate this 2.7 percent growth rate will persist through 2014, placing architecture 13th on the list of long-term, fastest-growing jobs requiring significant education preparation.
Employment Security economist Dave Wallace said this growth is largely being driven by the construction sector's strength, with demand for commercial construction services picking up even as residential construction slows. Construction accounts for about 186,500 jobs in Washington, roughly 7 percent of the overall jobs total, Wallace said.
Eleven of the state's 25 fastest-growing occupations in 2007 are construction-related, including surveyors, roofers and environmental engineers.
"Construction is going gangbusters," Wallace said.
At NBBJ, about half of the firm's annual business comes from within Washington, according to Managing Partner Scott Wyatt. As state construction has grown, so has the firm: Wyatt said NBBJ's staffing grew by between 12 percent and 15 percent last year, and should increase by at least another 20 percent this year, reflecting similar gains in revenue.
NBBJ employs 740 people worldwide, including roughly 350 in Seattle, and Wyatt said its architects' salaries have climbed by around 6 percent a year in recent years. The firm is now adding another 5,000 square feet of space at its South Lake Union office.
Callison is logging similar growth, boosting its staff by more than 20 percent last year, and CEO Karst said the firm is turning down some new clients due to the challenges of building a larger, quality staff.
"There's a lot of projects we have to turn down that we would like to take," Karst said.
Callison is looking to fill a wide variety of positions, ranging from graphic designers and marketing officers to coveted project architects.
"We have had a needs list of between 30 and 50 people for the past four or five years," Karst said.
The architecture growth could signal future strength in the state's construction sector, according to Kenneth Simonson, chief economist with the Arlington, Va.-based Associated General Contractors of America.
"I think it's a good leading indicator, but I can't pin down how a given degree of strength (in architecture) translates into a percentage growth (in construction)," Simonson said.
Simonson cautioned that just because a project is designed doesn't mean it will be built, particularly at a time when materials costs are rising fast.
According to Wyatt and Karst, state growth is only part of the story. Compared with previous upswings, the current growth cycle is more global in nature. Both firms have offices worldwide, reflecting how globalization is bleeding into architecture, which translates into jobs in Seattle.
Today's boom "is much more driven by the global marketplace," Karst said. "We have Middle East clients who are now doing projects in Russia, and Japanese or Chinese clients working in the U.S. -- the interconnectedness is much stronger."
That doesn't mean times will always be good. Architecture is a cyclical business, and Karst said he has experienced "three to five fairly severe periods" since joining Callison in 1978. During those times, Karst said Callison managed to continue growing by around 3 percent a year.
Both Karst and Wyatt are working to insulate their firms from downturns by seeking out projects in countercyclical areas -- in countries and industries that follow different business cycles, meaning business there will be strong when times are lean elsewhere.
"We continue to look for specialties in countercyclical markets, so we're not too heavily concentrated in retail, health care" or other hot areas, Wyatt said.
According to Wyatt, this is unusually hard right now, when "most markets are up geographically and by building type," but he believes NBBJ's increasing breadth will help sustain growth when core markets cool.
"As we grow, thoughts of the wolf at the door can creep in," he said, "but in more rational moments, I have to say the growth strengthens our firm."
Mar 20, 2007, 3:08 PM
New Metro bond ratings may soften taxpayer blow
Daily Journal of Commerce
by Justin Stranzl
The regional government Metro is expected today to issue $125.4 million in bonds for the purchase of natural areas, and a new AAA bond rating could lessen the hit Oregon taxpayers will take.
Both Moody's Investors Service and Standard & Poor's on March 13 assigned AAA ratings to Metro's 2007 Natural Areas general obligation bonds, which Oregon voters approved in November 2006 as part of a $227.4 million bond measure that directed Metro to obtain natural areas, parks and streams.
For Metro, the AAA rating from S&P and the AAA rating and an upgraded parity debt rating from Moody's likely mean the ability to obtain a lower interest rate.
"We're expecting an interest rate somewhere under 4.25 percent," said Carol Samuels, a financial adviser to Metro with the Portland office of Seattle-Northwest Securities Corp.
Samuels declined to say specifically how much taxpayers would save because of the ratings.
"It's hard to quantify – it really depends on market conditions," she said. "But we really expect it will enhance the (bonds') appeal ... among bidding underwriters."
The new ratings' impact on metropolitan Portland taxpayers "won't be dramatic," Keene Satchwell, an investor with Becker Capital Management of Portland, said.
"We're in an environment now where the differential on yields is compressed," Satchwell said, "so the incremental on their yield is going to be, I would assume, relatively modest."
But the ratings, he said, are an endorsement of the region's business community.
"It's a vote of confidence in the Portland metro economy," Satchwell said.
Having earned the AAA ratings, Metro won't have to procure AAA-level bond insurance, Samuels said.
"That's a saving of as much as $200,000 right off the bat," she said.
Mar 20, 2007, 4:13 PM
Article in the PI:
Only a couple of hours before the two-year-late Airbus A380 landed in the United States for the first time Monday, The Boeing Co. underscored that its new jetliner, the 787 Dreamliner, remains on schedule.
"We are doing what we do best at Boeing ... make sure we deliver on the commitments we made to our customers," Scott Carson, chief executive of Boeing Commercial Airplanes, told reporters and industry analysts during a teleconference to update them on the 787.
Final assembly of the first plane will begin in May at the company's Everett plant, where hundreds of additional mechanics have been hired and trained as part of a contingency plan to make sure the Dreamliner is not late.
"A lot of people are working very, very hard around the world to make sure this airplane gets to market on time," said Mike Bair, vice president of the 787 program.
Carson and Bair said key remaining milestones have not changed -- rollout of the first plane is on track for July 8 (7/8/07), the first flight in late August and the first delivery to All Nippon Airways of Japan in May 2008.
Meanwhile, market demand for the 787 is so strong that a fourth large cargo freighter, known as the Dreamlifter, will be needed to haul the large composite fuselage barrels and wings to the Everett plant for final assembly, Bair said.
Certification of the Dreamlifter is behind schedule, but the FAA is allowing the planes to haul 787 structures as part of the certification process.
Boeing has 490 firm orders for the 787 and soon will have more than 500, Bair said, adding that Boeing either has options for or is in talks with customers for three times that many more Dreamliners. Delivery positions are essentially sold out until late 2013, Bair said, but that isn't hurting sales. In fact, the market has become "a little bit more frenzied," he said.
Final assembly will begin on the first 787 once all the major structures -- tail section, fuselage and wings -- have been delivered to Everett. The first of those will arrive at the plant later this month or in early April.
The 787 wingtips, manufactured in South Korea, are already at the Everett plant, Bair said.
Several 787s are already in the worldwide production pipeline. Spirit AeroSystems in Wichita, Kan., is manufacturing its fifth 787 nose section and forward fuselage, Bair said.
The first will be delivered soon.
The 787 is the first commercial jetliner with a composite airframe, which has entailed a radically different production system. Boeing's partners in Kansas, South Carolina, Italy and Japan are manufacturing the one-piece fuselage barrels and wings. The process requires the structures to be baked in an autoclave. The manufacturing of these massive composite sections is considered the highest-risk area of the 787 program.
But Bair said the large composite structures produced so far have turned out better than Boeing engineers had expected.
There have been issues, though, and Boeing has had to rush its own people to help as needed. Alenia of Italy, which is responsible for much of the rear fuselage and the horizontal stabilizer, fell behind early. But Bair said Alenia is making progress getting back on schedule.
Another problem area is weight -- the 787 is heavier than it is supposed to be. Engineers have redesigned some parts to cut weight. About 25 percent of the plane has been weighed, Bair said, and it weighed "a little less than anticipated."
Boeing won't know how close the actual weight of the 787 is to that promised customers until the first plane is assembled.
Weight is an issue on any new airplane program, Bair said.
"It's a struggle to the end," he said. "We know what we need to do (to take weight out), and we are doing it,"
Airbus has said the A380 is about 6 tons too heavy. The A380 is also two years late because of wiring problems.
Bair said wiring is always a concern on a new airplane program because it is installed late in the assembly process. But he pointed out that the 787 has only about 60 miles of wiring. The A380 has about 350 miles.
Some 787 wiring that should have been done by Boeing's partners will have to wait until final assembly in Everett. And some systems won't be installed until final assembly.
For industry analysts, Boeing's upbeat assessment of the 787 program was good news after recent speculation that the 787 would be several months late. The company's stock closed at $90.32, up 0.36 percent.
"We reiterate our view that the 787 is not only a 'category killer' in the midsize widebody segment, but is also leading a secular change in aircraft production from aluminum alloys to carbon-based composite," Ronald Epstein of Merrill Lynch wrote to clients after the Boeing briefing.
But in another research note, David Strauss of UBS Investment Research noted that Airbus did not announce major delays in the A380 until after its first flight.
"Not only is Boeing pushing the design envelope and outsourcing of the 787 program more than prior commercial aircraft programs, but it is pursuing an unprecedented ramp (in production rates) with the 787," he wrote.
To meet demand, production rates for the 787 will be increased more than initially planned, Bair said, but Boeing won't do so until after the first 112 jets have been delivered in 2008 and 2009. Boeing does not want to overburden its supply chain.
"We want to avoid temptation," Bair said. "You can get yourself buried."
P-I aerospace reporter James Wallace
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