National / International News

Alcoa wants to be known for more than aluminum

Marketplace - American Public Media - Wed, 2014-07-09 13:19

It’s not hard to hear the air quotes Morningstar analyst Andrew Lane uses when he describes the conference call in which Alcoa executives discussed the company's earnings yesterday. "CEO Klaus Kleinfeld referred to the company numerous times as a 'lightweight multi-material innovation powerhouse,'" says Lane, who thinks the company will keep making money by making aluminum for a long time. 

However, Lane also says, yes: A lot of Alcoa’s profits come from new lines in metals like titanium. And special alloys in the aluminum body for the new Ford F-150 truck coming out next year.

The company also has a substantial aerospace business, which is why it has a spot on Josh Sullivan's list. Sullivan, an analyst at Sterne Agee, generally covers the aerospace business, not raw materials companies. When did a company known for mining and smelting metal turn itself into an aerospace company?  

"Well, Alcoa’s actually always been an aerospace company," says Sullivan. Because to build an airplane to fight World War II -- or, later, a rocket ship, or a 737 -- required the strongest, lightest metal available. "We don’t think of aluminum as an advanced metal," says Sullivan, "but at one point it was the most advanced metal out there."

In fact, Alcoa "was always a high-tech company," says business historian George David Smith from New York University. Through the first half of the 20th century, Alcoa maintained a major R&D department. "Like many new technologies of the late-19th and early-20th centuries, there wasn't much academic wisdom about these materials," he says. "Alcoa had to set up a scientific laboratory, really, to learn about the properties of the metal and how it could work with it."

The company's strategy shifted after it lost a big antitrust case to the U.S. government after World War II. Among the outcomes, says Smith: "They had to provide their patent rights to their new competitors -- namely Kaiser and Reynolds Corporations -- free of charge."

With job vacancies up, employers take longer to hire

Marketplace - American Public Media - Wed, 2014-07-09 13:19

According to the Bureau of Labor Statistics, the number of job vacancies is back to where it was before the recession. In May, there were some 4.6 million open positions.

You might think that has to be good news for out-of-work Americans, but hiring is still moving slowly. “The mean duration of U.S. job vacancies rose to 25.1 working days in May,” the Dice-DFH Vacancy Duration Measure reports. 

A lot of experts blame this on something called “the skills gap.” Since 2007, there has been this narrative, that employers aren’t hiring, or they are taking their time hiring, because they can’t find enough qualified candidates.

“The skills mismatch is kind of like the zombie explanation of the labor market that just won’t go away,” says Sylvia Allegretto, with the Institute for Research on Labor & Employment.

It is true that, during the downturn, employers could be choosy if they chose to hire at all, but the economy has improved, the unemployment rate has been coming down steadily, and Allegretto says that is not because all of a sudden people have all the right skills.

“If we had severe mismatches throughout the labor market, we would be seeing more wage growth than we are seeing,” says Barry Hirsch, W.J. Usery Chair of the American Workplace at Georgia State University. Qualified workers would be able to demand more money, and employers would have to meet that demand.

There is a bigger reason why hiring is not happening faster, according to Matt Freedman, an associate professor of economics at Cornell University: “Employers still have a lot of lingering uncertainty about the durability of this recovery.” 

They’re cautious, and Freedman says, there is no reason for them to hurry. 

“There is little cost to posting a vacancy, but potentially a lot of upside if you can find a really qualified person who is willing to work for you for very little money.”

For employers, that may be something worth waiting for. 

The number of job vacancies is back up to where it was *before the recession.  You’d think that’s gotta be good news for out-of-work Americans…  But *hiring is still moving *slowly, even though *employers posted more than four-and-a-half *million jobs in May.  A lot of experts blame something called “the skills gap.” But that doesn’t tell the *whole story.  Marketplace’s David Gura reports.

 

GURA1:

Since 2007,

There’s been this narrative:

 

That employers aren’t hiring,

Or they’re taking their *time hiring,

Because they can’t find enough *qualified candidates.

 

Sylvia Allegretto is with the Institute for Research on Labor and Employment

At U-C Berkeley:
ALLEGRETTO1:

The skills mismatch is kind of like the zombie explanation of the labor market that just won’t go away.

 

GURA2:

It’s *true

That during the downturn,

Employers *could be *choosy.

*If they *chose to hire at all…

 

But the economy’s gotten better.

The unemployment rate’s been coming down *steadily,

And Allegretto says that’s *not because

All of a sudden

People have all the *right skills.

 

Barry Hirsch is a professor of economics at Georgia State:

 

                HIRSCH1:

If we had severe mismatches throughout the labor market, we would be seeing more wage growth than we are seeing.

 

GURA3:

*Qualified workers

Would be able to *demand more money,

And *employers would have to meet that demand.

 

Matt Freedman is a labor economist at Cornell,

And he says there’s a *bigger reason why

Hiring is not happening *faster:

 

                FREEDMAN1:

                Employers still have a lot of lingering uncertainty about the durability of this recovery.

 

GURA4:

They’re *cautious. 

And really,

Freedman says,

There’s *no *reason for them to *hurry:

 

                FREEDMAN2:

There is little cost to posting a vacancy, but potentially a lot of upside if you can find a really qualified person who is willing to work for you for very little money.

 

GURA5:

And for employers
*that may be something worth waiting for.

 

SOC:

In Washington, I’m David Gura, for Marketplace.

What's in a settlement?

Marketplace - American Public Media - Wed, 2014-07-09 13:19

Word on the street today is that Citigroup is close to settling with the Department of Justice over mortgage bonds it issued before the housing crash. Rumor has it, Citi will pay $7 billion to settle allegations of wrongdoing. That’s a lot of money, to be sure, but it’s a far cry from the $13 billion JPMorgan paid last year to settle similar allegations.

Turns out, there's an art and a science to figuring out a settlement like this. "They begin by looking at what’s actually underwritten by Citibank and the next things is trying to compare that with what happened before," says James Cox, professor of corporate and securities law at Duke University. What happened before being JPMorgan’s settlement.

"Their total global settlement was about $13 billion on $460 billion of residential mortgage backed securities underwritten. That represented about a 3 percent penalty" says Charles Peabody, a partner at financial research firm, Portales Partners.

Using that formula, Citigroup should only owe about $2.5 billion, not $7 billion. Citi sold about $90 billion worth of mortgage backed securities. But, Peabody says, Citi played a more active role in its investments. "Most of Citigroup’s losses were in bonds that they underwrote themselves, where a lot of the losses that came from JP Morgan came from firms they acquired during the financial crisis." Namely, toxic mortgage machines Bear Stearns and Washington Mutual, which JP Morgan acquired, under the supervision of the government.

And then there’s the element of negotiation.

Citigroup may have floated the $7 billion dollar figure to see how shareholders would take it.

"They may resist and push back more if they’re getting a very negative reaction from the market," says John Coffee, director of Columbia University’s Center on Corporate Governance.

So far, Citigroup investors are holding pretty steady. Coffee says that could tempt Citi execs to approve the $7 billion settlement and hope the news moves on quickly. After all, next on the chopping block is Bank of America, the biggest mortgage underwriter of them all. Its fine is expected to be as high as $20 billion. 

NCAA president advocates "scholarships for life"

Marketplace - American Public Media - Wed, 2014-07-09 13:19

This final note on the way out today, in which the president of the NCAA tries to have it both ways. Mark Emmert told a Senate panel today that college athletes ought to receive "scholarships for life."

I'm guessing he means getting the skills to succeed in life, because he went on to say that athletic scholarships ought to cover the whole cost of being in school, not just the bare bones.

He also said - and this is the having it both ways part - that he figures the current model of amateurism is working well for most people.

Man Tied To Nazis Dies In Michigan At Age 93

NPR News - Wed, 2014-07-09 13:19

John Kalymon, who became a U.S. citizen in 1955, was under a deportation order for serving in a Nazi-controlled police force during World War II. But he had denied he had ever shot at Jews.

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HMRC loses Rangers tax case appeal

BBC - Wed, 2014-07-09 13:19
HM Revenue and Customs loses its appeal over Rangers use of Employee Benefit Trusts (EBTs) - the so-called "Big Tax Case".

VIDEO: Farage: 'Juncker is out of touch'

BBC - Wed, 2014-07-09 13:17
The president-designate of the EU Commission addressed the most Eurocritical group in the European Parliament on Wednesday.

Obama Stumps In Colorado, With Women's Vote As Backdrop

NPR News - Wed, 2014-07-09 13:15

In a state that hosts one of the nation's closest Senate races, the president spoke about the women's issues that could turn the election. But Sen. Mark Udall opted not to appear alongside Obama.

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Google deleted a BBC reporter's article. Is it right?

Marketplace - American Public Media - Wed, 2014-07-09 13:10

Google decided to do some summer cleaning, removing some unwanted links from their search engines. They're taking their cue from the European Union's highest court's "right to be forgotten" ruling, put in place a few months ago.

One of the articles removed was written by BBC Economics editor Robert Peston in October 2007, about Stan O'Neal, the former Merrill Lynch boss. However, the subject of the article was not the cause of removal.

"These restrictions have been put in place because somebody who left a comment underneath my article no longer wants the world to see his or her comment," Peston says.

The ruling says Google can remove information from its search engine if it's inadequate, irrelevant, no longer relevant or excessive. Peston says there was nothing in the article that met the criteria - and he calls the removal an assault on freedom of the press.

Wheels come off Britain's tour de force

BBC - Wed, 2014-07-09 13:07
British hopes fade in the Tour de France 2014 after dramatic highs and crushing lows in the first few stages.

Gove urges teachers to call off strike

BBC - Wed, 2014-07-09 13:07
Education Secretary Michael Gove is calling on teachers to "reconsider" plans for a strike on Thursday.

On Opposite Sides Of Israeli-Gaza Border, Feeling The Same Fears

NPR News - Wed, 2014-07-09 13:05

The escalating conflict around the Gaza Strip has turned daily routines upside down. A family in Ashkelon, Israel, and one in Gaza City both take shelter — and struggle to keep their children safe.

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Argentina Ditch Dutch On The Way To World Cup Final

NPR News - Wed, 2014-07-09 12:57

Argentina defeated the Netherlands 4-2 in penalty kicks in their World Cup semifinal. The two sides were 0-0 at the end of extra time. Argentina plays Germany in the final on Sunday.

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VIDEO: Contest to find new Swiss anthem

BBC - Wed, 2014-07-09 12:34
A contest is under way to compose a new national anthem for Switzerland, but what makes an ideal anthem?

Boy, 3, found unresponsive in pool

BBC - Wed, 2014-07-09 12:30
A three-year-old boy is airlifted to hospital after being found unresponsive in a swimming pool in Wiltshire.

Do The World Cup's Fluttering Kicks Put Fans' Hearts At Risk?

NPR News - Wed, 2014-07-09 12:17

Researchers found that the number of cardiac emergencies around Munich more than doubled on days when Germany was playing in the 2006 World Cup compared with days when the team was idle.

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What Burritos And Sandwiches Can Teach Us About Innovation

NPR News - Wed, 2014-07-09 12:12

Is a burrito a sandwich? The answer may sound simple to you ... but the question gets at the very heart of a tension that's existed for ages.

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Rape victims 'vilified' online

BBC - Wed, 2014-07-09 12:11
Rape victims are being named and "vilified" online because laws to protect their anonymity are too weak, a House of Lords committee hears.

Corruption Convictions Spell 10 Year Sentence For Former NOLA Mayor

NPR News - Wed, 2014-07-09 12:11

Former New Orleans Mayor Ray Nagin has been sentenced to 10 years in prison for bribery, money laundering and other corruption crimes. The counts on which he was convicted cover a span that includes much of his two terms in office.

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