Southern Business Review

Category: Company News

  • Foxconn does damage control over Wisconsin factory

    Foxconn says it’s moving forward with the construction of its Wisconsin facility after talks with White House, according to a statement released Friday, but isn’t clarifying what kind of jobs will be housed at the $10 billion plant.

    Earlier this week, CEO Terry Gou told Reuters the company was shifting strategy and would offer mostly researcher and engineering jobs in Wisconsin, not the blue-collar manufacturing jobs that were originally promised. Foxconn received $4 billion in tax breaks from the state to build LCD TV screens at the plant, but plans have shifted.

    The site will function as both an “advanced manufacturing facility as well as a hub of high technology innovation,” Foxconn said.

    Here’s the statement from Foxconn:

    After productive discussions between the White House and the company, and after a personal conversation between President Donald J. Trump and Chairman Terry Gou, Foxconn is moving forward with our planned construction of a Gen 6 fab facility, which will be at the heart of the Wisconn Valley Science and Technology Park. This campus will serve both as an advanced manufacturing facility as well as a hub of high technology innovation for the region.

    Our decision is also based on a recent comprehensive and systematic evaluation to help determine the best fit for our Wisconsin project among TFT technologies. We have undertaken the evaluation while simultaneously seeking to broaden our investment across Wisconsin far beyond our original plans to ensure the company, our workforce, the local community, and the state of Wisconsin will be positioned for long-term success.

    We look forward to continuing to expand our investment in American talent in Wisconsin and the US.

    —CNBC’s Ryan Ruggiero contributed to this report.

    This story is developing. Please check back for updates.

  • Listen to the new single from Goldman Sachs CEO David Solomon, AKA DJ 'D-Sol'

    Goldman Sachs CEO David Solomon has had a busy few weeks running one of the world’s premier investment banks, but that hasn’t stopped him from releasing a new dance single.

    Solomon, who goes by DJ D-Sol, last month released a follow-up to his first single “Don’t Stop.” The up-beat tune is called “Feel Alive,” featuring singer Katt Rockwell. Last week, he released another version of the song remixed by DJ Morgan Page which can be heard here. On his Instagram page, he calls it his first original song.

    It’s good to know that Solomon still has time to pursue his musical interests. Last month, he addressed analysts on an earnings conference call for the first time as CEO, spending some time speaking about the 1MDB scandal. Solomon is also engaged in a company-wide review of businesses and flew to Davos, Switzerland last week to meet clients.

  • Trump: 'There's a good chance we'll have to' declare a national emergency to build the wall

    President Donald Trump on Friday said, “I think there’s a good chance we’ll have to” declare a national emergency in order to appropriate the funds to build his border wall.

    Trump wouldn’t say he would definitely declare it, but he told reporters that such a declaration “does help the process.”

    The remarks came as a specially created committee in Congress has two weeks to reach a compromise on border security before the current short term government funding bill expires on February 15. If no deal is reached, then Trump could decide to either shut down the government for the second time this year, or potentially sign a bill funding federal agencies, and then use his executive powers to declare a national emergency on the southern border.

    Trump has been threatening for more than a month to use a national emergency declaration to commandeer funds that have already been appropriated by Congress for other purposes, such as disaster relief, and se them to pay for construct of a wall.

    Such a declaration would almost certainly be challenged in court. There, the administration could find it challenging to make the argument that the immigration situation on the southern border, which has not materially changed in several months, merits an emergency declaration only now, after Trump was unable to secure the needed funds from Congress.

    Asked Friday if he was concerned about courts halting an emergency declaration, Trump replied, “we have very, very strong legal standing to win,” adding that it would be “very hard” for a court to enjoin the declaration.

    Trump has so far drawn a hard line in negotiations, saying he will not accept anything short of billions of dollars designated for the construction of a wall on the U.S. Mexico border.

    House Speaker Nancy Pelosi has drawn a line, as well, telling reporters on Thursday, “there’s not going to be any wall money in the legislation.”

    This is a developing story. Please check back for updates.

  • Taco Bell failed in Dubai — here's why

    Taco Bell is huge in the United States. The Mexican-style fast-food chain has nearly 6,500 stores across the United States. While Taco Bell has had tremendous success at home, the company has had trouble taking off abroad. Watch this video to find out why the American company had to pull out of the Dubai market after four years.

  • Here's why congresswomen are being urged to wear white to Trump's State of the Union address

    The House Democratic Women’s Working Group is urging congresswomen of both parties to don white, a symbol of the women’s suffrage movement, for President Donald Trump’s State of the Union address on Tuesday.

    The group is led by Rep. Lois Frankel of Florida and includes all Democratic women House members. Its mission is to fight for women’s rights, including equal pay, paid family leave and affordable healthcare. Frankel tweeted that she was “looking forward to wearing suffragette white” to “honor all those who came before us & send a message of solidarity that we’re not going back on our hard-earned rights!”

    Female politicians have often worn white to amplify feminist messages and pay homage to the suffrage movement. Along with gold and purple, white was an official color of the National Women’s Party.

    “The colors adopted by the union are purple, white and gold, selected for the significance they bear in the work the union has undertaken…White, the emblem of purity, symbolizes the quality of our purpose,” said an early mission statement for the Congressional Union for Woman Suffrage.

    Hillary Clinton wore a neatly tailored white pantsuit when she accepted the Democratic Party’s nomination in 2016. On election day, female voters wore white as part of the social media movement #WearWhiteToVote to honor the women who fought for voting rights.

    Clinton followed the lead of political predecessors, like Geraldine Ferraro, who in 1984 wore a white coat dress when she became the first woman to accept a major party vice presidential nomination. In 1969, Shirley Chisholm also wore white when she became the first African-American woman elected to Congress.

    In February 2017, Democratic congresswomen dressed in white and made a visual statement of solidarity at Trump’s joint address to Congress.

    That day, House Speaker Nancy Pelosi tweeted a picture of herself and other Democratic women in white and accused the president of failing to support women’s rights.

    TWEET

    In January 2019, some Democratic women wore white the day they were sworn into the 116th Congress. Rep. Alexandria Ocasio-Cortez of New York donned a white pantsuit and wrote in a tweet, “I wore all-white today to honor the women who paved the path before me, and for all the women yet to come. From suffragettes to Shirley Chisholm, I wouldn’t be here if it wasn’t for the mothers of the movement.”

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    Don’t miss: There’s a gender pay gap for congressional staffers – and it’s worse among Republicans

  • Stocks making the biggest moves midday: Amazon, Merck, Exxon Mobil & more

    Check out the companies making headlines midday Friday:

    Papa John’s — The third-largest pizza delivery company saw its stock fall 8 percent after Reuters reported Papa John’s would not sell itself, despite offers from private equity firms. The firm’s offers reportedly did not meet Papa John’s valuation expectations.

    Exxon Mobil — Shares of Exxon Mobil rose nearly 4 percent after the energy giant reported better-than-expected earnings. The company’s upstream business, which explores for and produces oil and gas, posted a strong profit. Exxon’s downstream business, meanwhile, nearly tripled.

    Chevron — Shares of Chevron gained 3.6 percent after the company reported quarterly profits that topped Wall Street’s expectations, as the company’s fossil fuel production hit an all-time high and executives forecast solid output gains for 2019.

    Merck — Shares of Merck climbed 3.6 percent after it reported fourth-quarter earnings that beat Wall Street estimates. Adjusted per-share earnings came at $1.04, a penny above consensus. Sales of the company’s Keytruda cancer drug jumped 66 percent from a year earlier.

    Amazon — Shares of the e-commerce giant fell more than 4 percent after the company provided a 2019 forecast that worried investors about costs, as well as the possibility of impacts from regulations in India. Amazon CFO Brian Olsavsky said the company “expects investments to increase relative to 2018.”

    Yum China — Yum China shares jumped nearly 9 percent and were on pace for their best day since July 26, after the company reported earnings per share of 12 cents, topping an estimate of 8 cents. The company also posted better-than-expected same-store sales.

    Honeywell —Honeywell reported earnings per share and revenue that topped analyst expectations, sending its stock up more than 1 percent. The industrial giant also issued a profit forecast that was above expectations.

    Proofpoint — The enterprise security company jumped as much as 12 percent Friday after beating analysts estimates for fourth-quarter results. The firm reported 51 cents adjusted earnings per share, well above the 35 cents analysts were expecting.

    Cigna, CVS Health, UnitedHealth Group – Shares of prescription drug companies fell after the White House called for a ban on “backdoor deals” that the companies pay to middlemen under the Medicare system. Cigna was hit the hardest, with shares falling about 3 percent.

    Deckers Outdoor — Deckers Outdoor’s stock surged a whopping 12 percent after the company posted earnings of $6.59 per share for its latest quarter, well above the consensus estimate of $5.30 per share. The maker of Ugg boots also raised its full year forecast.

    Symantec – The cybersecurity software company was the biggest gainer on the S&P 500 Friday after beating analysts’ forecasts by 5 cents a share. Symantec executives said the quarter was helped by a strong performance by the company’s consumer business. The firm also announced the departure of Chief Financial Officer Nicholas Noviello.

    —CNBC’s Michael Sheetz, Yun Li and Kate Rooney contributed to this report.

  • Kirsten Gillibrand is outpacing other 2020 hopefuls with her outreach to big money Dem donors in NY

    Sen. Kirsten Gillibrand has been aggressively courting top Democratic Party donors in New York as she seeks to gain an edge in the 2020 presidential campaign’s fundraising battle, CNBC has learned.

    Over the past two weeks, Gillibrand has met with a slew of financiers from a wide range of industries in her New York back yard, including those on Wall Street, according to people with direct knowledge of the conversations.

    Sen. Cory Booker of New Jersey is the only other 2020 Democratic hopeful who has come close to matching Gillibrand’s outreach over the past two weeks, said one of the top donors, who spoke to CNBC on the condition of anonymity. Booker announced his candidacy Friday morning.

    Representatives for Gillibrand and Booker did not return repeated requests for comment.

    The strong positioning for Gillibrand in the New York donor circuit is significant because it could give her a financial advantage over her opponents as she builds her campaign apparatus and prepares for what will be an expensive primary.

    Other 2020 hopefuls are also trying to get an early start in the fundraising battle. Sen. Kamala Harris, D-Calif., who launched her candidacy last week, will be in Los Angeles this weekend for two fundraisers. One will be hosted by entrepreneur and prominent LGBT activist David Cooley, according to a report in Variety.

    Harris’s campaign announced last week that she raised $1.5 million through online contributions in the first 24 hours after declaring she would run for president.

    Prior to her announcement, Gillibrand had been personally making phone calls to some of Wall Street’s top executives about backing her campaign. She also reached out to Democratic millionaire Bernard Schwartz to discuss a 2020 run.

    Democrats in the hunt for the White House have had to strike a delicate balance between seeking donations and not appearing to be too cozy with big business or rich donors. Liberal Democrats took to social media to roast Gillibrand’s links to the financial industry following the reports of her gauging Wall Street and corporate interest in a possible presidential run.

    Between her discussions with affluent donors, though, Gillibrand has also been appealing directly to small donors and the party’s grassroots base. In a tweet on Thursday, she reiterated her campaign’s decision to not accept money from a variety of special interests including political action committees association with corporations, federal lobbyists and super PAC’s.

    “Please give. It makes a huge difference. It allows us to build a campaign based on you,” Gillibrand says in the Twitter video.

    Tweet:

    Gillibrand has became a master at raising campaign cash ever since she joined the Senate in 2009. Throughout the 2018 election cycle, 32 percent of donations to Gillibrand’s Senate campaign came from contributions under $200, according to the nonpartisan Center for Responsive Politics. She finished her victorious campaign raking in $20 million.

    Her Senate campaign fund has $10 million on hand, although her exploratory committee has yet to announce its early fundraising totals.

    In the past, Gillibrand has received the most contributions from lawyers, executives at securities and investment firms and retirees. The securities and investment industry gave her $1.1 million in 2018 and has spent $4.8 million supporting her career in total.

    Meanwhile, Gillibrand has been hitting the campaign trail and meeting with voters since unveiling her decision to run for president.

    In late January, she held 10 public events over two days in the early caucus state of Iowa. This weekend she’s heading to the primary state of New Hampshire for the first time as a presidential candidate. The trip starts on Friday in Manchester, N.H.

    She has also been holding speaking engagements in New York. Gillibrand recently spoke at the National Action Network’s annual Martin Luther King Jr. Day event, hosted by the Rev. Al Sharpton.

  • Morgan Stanley says Spaceflight Industries is 'entirely' disrupting the rocket launch market

    The rocket launch business is expensive and risky, and then there are the technical requirements: Launch providers have to ensure a customer’s delicate and expensive spacecraft survives the trip to orbit.

    But Seattle-based Spaceflight Industries is showing things can be done differently, according to Morgan Stanley analysts Adam Jonas and Armintas Sinkevicius. In a note to investors Friday, they said that the company “is disrupting this model entirely” by applying the ride sharing concept to satellites.

    The company packed a record-breaking 64 satellites on a SpaceX rocket in December for a mission known as Spaceflight SSO-A. Morgan Stanley called it “a significant milestone for the company.”

    The practice of satellite “ridesharing” has become more commonplace, in part thanks to Spaceflight. As technological advancements have led to smaller satellites, that means more of them can be loaded onto rockets as secondary payloads – hitchhiking on launches like SpaceX’s Falcon 9 as they bring larger satellites to orbit.

    That makes it less expensive for satellite operators and fills space in what otherwise would have been empty payload for rocket launchers. “Spaceflight is significantly driving down the cost of launch with its ride sharing model, allowing smaller satellite companies to launch more cost efficiently and launch operators to fill excess capacity,” Morgan Stanley said. “Spaceflight is able to provide customers with flexibility by virtue of having capacity with many different launch providers.”

    Curt Blake, the CEO of Spaceflight launch services, told CNBC, “Rideshare applies across the board and the whole idea of flexibility, and how crucial that is, as it brings the airline model to space. That is huge. We’re moving rapidly toward a model where you’re not buying a spot on a specific launch vehicle – you’re buying the ability to get to a destination.”

    Blake said about Morgan Stanley’s analysis, “I think it means that people, and Wall Street, are starting to see this industry as a valuable one and they’ve identified our company as … a disruptor, which is a great term.”

    The note is the latest in Morgan Stanley’s “Space Disruptor Series,” which features commentary on 90 companies by Morgan Stanley’s “Space Team,” which is led by Jonas.

    Spaceflight Industries has two businesses: The all-in-one launch services unit, known as Spaceflight, and a satellite imagery unit called BlackSky. The former “has launched 210 satellites” to date, Morgan Stanley said. Spaceflight isn’t slowing down, either, with contracts to launch about 100 satellites this year.

    BlackSky represents the company’s reach into satellite operations. The unit successfully launched two satellites at the end of last year, Global-1 and Global-2, and expects to launch six more this year. Spaceflight Industries aims to eventually have constellation of 60 satellites to provide high-resolution photos of Earth nearly on demand.

    The company announced a $150 million fundraising round in March for the first 20 satellites of the BlackSky constellation.

    Additionally, BlackSky is one of several companies working with Amazon Web Services for the recently-announced AWS Ground Station business. Amazon’s cloud business is building a network of satellite connection facilities, representing the e-commerce giant’s first public move into space-related hardware.

    Ground stations are a vital link for transmitting data to-and-from satellites in orbit, used by companies engaged in a variety of activities like weather forecasting, communications and broadcasting. AWS Ground Station aims to remove the heavy capital costs for these companies of building their own ground station networks off of satellite operators.

    Morgan Stanley hosted its first “Space Summit” in New York City in December and is telling clients to pay attention to space companies.

  • January jobs report: Hiring growth remains solid, despite government shutdown

    January proved a rocky month for many Americans, due to a partial government shutdown that left roughly 800,000 federal workers furloughed or working without pay.

    According to the Congressional Budget Office, the 35-day shutdown cost the economy $11 billion, with an estimated $3 billion permanently lost. But despite this uncertain start to a new year, the latest jobs report from the Bureau of Labor Statistics shows hiring growth remained solid throughout the month.

    In January, 304,000 jobs were added to the economy, marking a historic milestone of 100 straight months of job gains. Unemployment rose from 3.9 percent to 4 percent because a small percentage of furloughed employees who could not work were counted as unemployed, says the report. Wages also increased by 3.2 percent from a year ago, showing that employers are willing to not only hire more, but also pay more in today’s tight labor market.

    CNBC Make It spoke with Bankrate.com senior economic analyst Mark Hamrick, Indeed research director Martha Gimbel and Glassdoor chief economist Andrew Chamberlain about the temporary impact of the shutdown and why today’s market still favors job-seekers.

    While the longest government shutdown in history certainly put a damper on the activity of many employees and businesses, Hamrick says he likens its impact to that of a hurricane “where economic activity is either delayed or destroyed,” but eventually, “things get restored.”

    “These things tend to be temporary,” he tells CNBC Make It, “although the impact on individuals who missed paychecks and didn’t have savings can be significant.”

    According to the BLS, federal employees working without pay were still considered employed, which is why Gimbel says she’s not surprised that the jobs report remained positive. However, Gimbel says data from Indeed demonstrates an uptick in federal workers looking for new opportunities, including part-time work, to make ends meet.

    “Federal workers tend to love their jobs and have low quit rates,” she says. “But there are now more people wondering if the federal government is for them, and now they are going out in a tight labor market looking for jobs.”

    Gimbel adds that “this can be bad news for federal agencies who are looking to replace them in a tight market and says that while January’s jobs report does provide a little bit of comfort, it “should not distract from a very real hurt that many workers suffered during the shutdown.”

    “It may take a while to really see what effects from the shutdown occurred, and we will need a couple more months of data,” she says.

    In an interview with CNBC Make It last month, Hamrick and Chamberlain advised job-seekers to take advantage of the year’s first quarter hiring spree, since now is the time when hiring managers have fresh budgets.

    Hamrick says January’s numbers are a reflection of this hiring spree, especially with many companies adding seasonal positions. “Even during the course of an economic shutdown, there is always going to be seasonal hiring,” he says. “On the seasonal front, we heard that Lowe’s will be hiring thousands of seasonal workers as well as permanent jobs and managers.”

    When looking at the overall numbers from the jobs report, it’s clear that many industries are in the midst of strong hiring growth, with the leisure and hospitality industry adding 74,000 jobs last month, the construction industry adding 52,000 and the healthcare industry adding 45,000.

    “For most, it is a great time to look for work, particularly for those who have in-demand skills and work in locations where the regional economies are robust,” says Hamrick.

    According to Glassdoor’s latest Local Pay Reports, San Francisco, Los Angeles, New York City and Philadelphia demonstrated the strongest wage growth for the month.

    Despite today’s concerns around the government shutdown, data shows that Americans were still far more worried about the state of employment and the economy 10 years ago.

    In January 2009, employers cut 598,000 jobs, putting unemployment at 7.6 percent. According to CNNMoney, the report was the worst jobs report since December 1974.

    “Hiring is falling off dramatically and layoffs are accelerating,” Sung Won Sohn, economics professor at Cal State University-Channel Islands told CNNMoney at the time. “The layoffs have become an almost popular thing to do for corporations. Many businesses are scared. They want to take precautionary steps.”

    Unlike the most recent report, which showed strong job gains in industries like hospitality and construction, the report from January 2009 showed that construction shed 111,000 jobs while hospitality lost 28,000.

    “Despite the uncertainty heading into today about how the recent federal government shutdown may impact the economy,” said Chamberlain in a statement, “today’s jobs report shows the nation’s labor market overall remained healthy in January, and employers are likely to continue today’s steady pace of hiring throughout the first half of 2019.”

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    Don’t miss: December jobs report: Growth is still strong, but job seekers should prepare now for a possible slowdown

  • New Jersey becomes the third-largest state to pass $15 minimum wage as federal progress stalls

    New Jersey passed a $15 per hour minimum wage on Thursday, becoming the latest state or locality to hike its wage floor amid nearly a decade of federal inaction on the issue.

    The plan approved by the Democratic-controlled state legislature will gradually take New Jersey’s minimum wage to $15 per hour for most workers by 2024. The state’s current pay floor of $8.85 per hour will rise to $10 on July 1.

    Democratic Gov. Phil Murphy plans to sign the measure into law on Monday. In a tweeted statement Thursday, he said that “over a million workers will now be able to envision their place in the middle class.”

    Murphy tweet

    New Jersey becomes the third-largest state to vote to hike its minimum wage to $15 per hour, following California and New York, as momentum for pay increases grows around the country. Cities from San Francisco to Seattle and Washington, D.C., have taken the same step. The wage floor more than doubles the federal mark of $7.25 per hour, which took effect in July 2009.

    Labor advocates led by groups such as Fight for $15 have pushed for wage hikes nationwide as they argue pay has not kept pace with the cost of living. The effort has reignited a debate about whether minimum wage increases will help low-wage employees keep up or hurt them and the businesses who employ them, who in some cases say they have to reduce their staff or the hours they work.

    The new Democratic House majority has brought the minimum wage to the forefront at the federal level. Last month, the party introduced legislation to raise the federal pay floor to $15 per hour by 2024. Though the bill likely will not pass the GOP-held Senate or get past President Donald Trump‘s veto, Democrats used it to try to cast themselves as the better party for the working class.

    Minimum wage hike proponents have argued pay has not outpaced inflation enough. The U.S. minimum wage hit its high in 1968 at $11.83 per hour in 2018 dollars, and has not approached that level in decades.

    While real wage growth adjusted for inflation had been sluggish, it has started to pick up in recent months. Real average hourly earnings rose 1.1 percent in December year over year, compared with 0.8 percent and 0.7 percent increases in November and October, respectively, according to the Bureau of Labor Statistics. Average hourly earnings climbed 3.2 percent unadjusted for inflation in January, though the government will not release real wage growth data until later this month.

    The argument for a higher wage floor is particularly potent in New Jersey. Driven by housing costs, it has the 10th-highest cost of living among the 50 states and Washington, D.C.

    The New Jersey Chamber of Commerce did not oppose a $15 per hour pay floor in an expensive state for low-wage workers, the organization’s president and CEO, Thomas Bracken, said. However, the group objected to the bill that ultimately passed because it sought a longer phase-in period for the $15 wage and wanted more businesses exempted from it, among other goals.

    “It’s not the number, it’s how long it takes to get there,” he said.

    Bracken worries that plan will make New Jersey a less attractive place both to live and start a business.

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