Arcadia Resources (Indiana) Experiences A Fast Collapse

Something ominous in going on in the health care industry. Even as some health care CEOs have become the highest compensated chief executives in the country, a lot of companies are undergoing layoffs. Arcadia Resources, in particular, went from rapid expansion to fast collapse in just a couple of years. Here is the Indianapolis Business Journal with the details:

A major lender to Arcadia Resources Inc. has moved to foreclose on the struggling Indianapolis-based business, which in turn agreed to cease operations.

Arcadia reported the foreclosure agreement with Dallas-based Comerica Bank, which Arcadia owed $11 million, in a Thursday filing to the Securities and Exchange Commission.

The closing represents the probable final fall for the once-promising health care company. Just two years ago, in May 2010, the company announced a huge expansion that it expected would add 930 jobs in Indiana by 2013.

But, according to the company’s last annual report, filed in June 2011, Arcadia administrative staff had fallen slightly in the previous year, to 229. Its field staff, most of whom are not in Indiana, had remained steady.

To help pare down debt, Arcadia completed the sale of its DailyMed pharmacy business in February to a subsidiary of Illinois-based Walgreen Co. But the $2 million in proceeds from the sale went entirely to satisfy a debt to one of DailyMed’s suppliers.

I have been predicting here on TDS that the health care industry is yet another financial bubble that will implode in the coming years. Perhaps we are right now seeing the first signs of that collapse.

Exopack Closing Indiana Plant, Cutting 111 Jobs

This mass layoff story from Myrtle Beach Online cited a pretty basic reason--the economy sucks:

SEYMOUR, Ind. -- A packaging company plans to close its plant in Seymour, eliminating 111 jobs.

Exopack LLC said in a notice to the Indiana Department of Workforce Development on Wednesday that plans to close the southern Indiana plant by July 1.

The Spartanburg, S.C.-based company cites "business circumstances" for the closure.

The Seymour Tribune and the Indianapolis Business Journal report the company makes packaging for pet and lawn-and-garden products.

Exopack says it will consolidate the Seymour operations at three other plants.

Last month, another packaging product company, International Paper, told the state it was eliminating one shift and 57 jobs at its Crawfordsville box plant. That company in November also extended an indefinite layoff of 87 employees at its packaging plant Indianapolis.

And so it goes.

Plummeting CD Sales Cause Sony Factory to Close

The advent of iPods and digital music has been decimating the music industry for a long time now. The latest damage was reported on Friday by Indystar.com:

Sony DADC Americas plans to close its distribution center in Fishers this year and lay off 248 employees.

The work done at the sprawling facility in Hamilton County will be shifted to another company, Anderson Merchandisers, which operates a distribution center in Franklin in Johnson County.

Lisa Gephardt, spokeswoman for the New York-based Sony said the plan is to begin layoffs in May and the Fishers facility will close by September.

The music industry has been rattled by dramatically falling sales of compact discs like those shipped through the Fishers center and manufactured in a Sony facility in Terre Haute.

Gephardt said closing of the Fishers facility and out-sourcing of the remaining work “is due to the continued challenges in the economy and competitive landscape.”

Of course, someday when the power grid finally fails, all of that digital music will disappear into the ether. But since most popular music recorded since the dawning of the digital music age really sucks balls, it won't be any great loss.


Bonus: Remember what happened the last time there was a technological revolution in popular music?

Update: Electro-Motive Plant in London, Ontario, Closes; Jobs Moving to Indiana?

My January 23rd post, "Get Your Ass Down Here, Prime Minister Harper!" linked a story detailing the labor fight between Caterpillar, Inc. and its at a London, Ontario factory over a proposed 50% reduction in pay and benefits. Well, it now appears that dispute has reached endgame, as reported by the Montreal Gazette:

The closure Friday of Electro-Motive plant in London, Ont., paints a bleak picture for the future of the Canadian manufacturing industry, one expert says, adding the "writing was on the wall" for the southwestern Ontario plant long before the closure became official.

Progress Rail, a U.S.-based subsidiary of giant Caterpillar Inc., closed the Electro-Motive plant's doors Friday after prolonged unsuccessful contract negotiations and a month after more than 450 workers were locked out. The closure added to a worrisome trend, says Western University economist Mike Moffatt.

At least Canada has one economist who is willing to be honest about the bleak long term trend here:

The closure Friday of Electro-Motive plant in London, Ont., paints a bleak picture for the future of the Canadian manufacturing industry, one expert says, adding the "writing was on the wall" for the southwestern Ontario plant long before the closure became official.

Progress Rail, a U.S.-based subsidiary of giant Caterpillar Inc., closed the Electro-Motive plant's doors Friday after prolonged unsuccessful contract negotiations and a month after more than 450 workers were locked out. The closure added to a worrisome trend, says Western University economist Mike Moffatt.

But there is an unexpected shocker at the end of this story:

Workers at Electro-Motive had been off the job since New Year's Day after rejecting a new collective agreement that would have lowered the salaries of some workers currently paid $35 an hour to $18 an hour. Despite the closure announcement, picket lines remained active at the site on Friday.

The company apparently intends to relocate its operation to a facility in Muncie, Indiana, where Moffat says it will have an easier time moving ahead with less resistance from workers.

He said new workers there were being trained, with a plant being expanded despite running at only one-third of its capacity.

On Wednesday, Indiana became just the second U.S. state in 20 years to enact right-to-work laws, which allow a unionized workplace to have voluntary enrolment. He said that practice often leads to a lot of "freeloading," which results in underfunded unions with less clout in the negotiating room.

So there you have it. Conditions for workers are getting so bad in the United States that we are now starting to become a potential off shoring destination for jobs from other first world countries. The politicos like President Hopey-Changey will crow when these new, low paying Indiana jobs become reflected in the U.S. employment figures, but they will not be jobs that allow the workers to buy a house, pay for their children's college education or plan for a secure retirement. This is the endgame of NAFTA, GATT and all of the other "free" trade agreements...lowering global wages until they reach a worldwide equilibrium just above subsistence level and enriching the predatory capitalists who ruthlessly shift the jobs around. It's another telling indicator of the new dystopia.


Bonus: Now the Canadians have a good reason to sing this bitter song, "I don't need your war machines...I don't need your ghetto scenes"

Tredegar Closing Aluminum Extrusion Plant in Kentland, Indiana

Due to the high volume of mass layoff notices this week, it will be another four post day here at TDS as I try to clear out the backlog. This latest story is from Enhanced Online News:

Tredegar Corporation announced that its Bonnell Aluminum subsidiary will close its plant in Kentland, Indiana. The plant, which employs 146 people, is scheduled to close by September 30, 2012.

Tredegar estimates that it will recognize charges related to the shutdown of approximately $8 million, including accelerated depreciation on fixed assets of approximately $4 million, severance-related charges of approximately $1 million and other shutdown-related charges of approximately $3 million. Other shutdown-related charges are primarily comprised of equipment transfers and plant shutdown charges. It is anticipated that most of these charges will be recognized over the next 18 months.

The Kentland facility had sales of approximately $38 million in 2010 and has been operating at a loss for the past several years.

Pretty run of the mill stuff, so to speak. Except, check out the telling quote from the company president:

Duncan Crowdis, president of Bonnell Aluminum, said: “This was a difficult decision to make, and we regret the impact this decision will have on our employees in Kentland. While the employees have made an exceptional effort to help weather the current construction recession, prospects for a significant recovery in Kentland’s core market, residential building and construction, now appear to be well into the future.

Holy crap! The truth! In the media! Too bad you have to dig all the way down into the details of a local layoff story to find it.

Death Be Not Proud: Indiana Casket Company Lays Off 100, May Shut Down

The continuing effects if the Great Recession are being felt in all industries as financially strapped consumers cut back spending. And now there is evidence that it is even following people right into their graves. Here's a local Indiana television station with the gory details:

The Batesville Casket Company is cutting 100 jobs, its entire second shift, starting in March.

FOX19 spoke with two employees facing pink slips who wanted to remain anonymous but say they were expecting the move.

"We all knew this day was coming we just didn't think it was coming this soon," says a 13-year veteran utility worker.

This story actually fascinated me because it has a bunch of different aspects to it beyond just the usual sad tale of people being laid off. First up, the corporate FlackSpeak:

The company explained the cuts, "As part of our continuous process of maximizing production capabilities to meet the needs of our customers."

So exactly how do you "meet the needs" of dead people, anyway? I'm just curious.

Sorry, I'm being a smart ass again. Bad habit of mine. Please continue:

"As longstanding members of the Batesville community, we continue to make investments in our manufacturing facilities and in innovative, growth-oriented products and services that give families more ways to honor their loved ones."

There they go again with the up is down, black is white, left is right and day is night bullshit. No, fuckheads, you are cutting production, which obviously means there will be fewer ways for families to "honor their loved ones."

But beyond that nonsense is the story of a community facing severe hard times:

"It's hard, I don't know what I'm going to do, there's not a lot of jobs in this area," she says.

The cuts, she says, already has people talking about shutting down the entire plant, a move that could severely impact the entire town.

"It is what makes Batesville, if Batesville Casket were to shut down it would be a ghost town," she says.

Must. Not. Laugh. At. Unintentional. Pun.

The biggest problem here, of course, is that caskets these days cost too damn much money. I just did a quick Google search and found a casket price list where you can procure a box for your dearly departed for anywhere between $1,200 and $6,000. When you include the cost of the funeral service itself, the preparation of the corpse and the cemetery fees, that quickly adds up to being beyond the means of the average family. Back when times were good, people were willing to pay such a (ahem) stiff price because of the emotional blackmail used on them by the funeral home industry to sell its products. But when people are broke, those kinds of appeals become less effective.

I've joked around with my wife that should I pass on before she does she can just put my body out with the trash. I mean, I'm dead, so what do I give shit about my empty vessel being buried in some hole under a stupid headstone? I'd much rather be cremated and have my ashes spread in some field where they could help fertilize the crops, or something. As the Rodney Dangerfield line from Caddyshack so memorably stated it, "cemeteries and golf courses are the two biggest wastes of prime real estate."

Face it folks, the mortuary business is yet another unnecessary luxury in the era of peak oil-induced economic contraction--just another economic (ahem) zombie where the body hasn't stopped twitching yet.


Bonus: A beautiful noise the dead will never hear

Illinois Subsidizes Navistar's Indiana Layoffs With Tax Incentives

We're used to sports team owners holding cities and states hostages by threatening to move to a different city in order to get new taxpayer-funded stadiums. But less well known is that other corporations often extort those same governments to get taxpayer incentives and subsidies as well.

It's one thing when it happens to prevent an employer from moving out of state. But what if an employer uses the incentives in order to open a new facility so it can the fire higher paid, unionized employees in another state? Think that can't happen? Well it just did in Illinois, according to this report:

WBEZ has learned that some new jobs Navistar promised under an Illinois incentive agreement are coming to the state at the expense of unionized workers in Indiana.

Illinois Gov. Pat Quinn announced the Navistar incentives last year after the company threatened to pack up its headquarters in west suburban Warrenville and leave the state. The deal committed Illinois to a $64.7 million bundle of tax credits and job-training subsidies for the company. It committed Navistar to moving the headquarters to Lisle, just a couple miles east, and to adding 400 full-time Illinois employees.

Navistar’s first report to the state about the jobs isn’t due until next year, so it’s hard to tell how many positions the company has created thus far. Employees confirm that dozens of new engineers and designers are working at the Lisle facility.

Navistar is creating those jobs as it phases out its Truck Development and Technology Center in Fort Wayne, Indiana, just three hours southeast of Chicago. The latest Fort Wayne cuts came December 2, when the company laid off 130 employees, mostly engineers and designers who are United Auto Workers members. Before the layoff, some of the Fort Wayne workers had to help train their Lisle replacements.

“They’ve rewritten the job descriptions so the people that used to do the work here — the union folks — don’t qualify anymore on paper,” said Craig Randolph, a Navistar design engineer laid off after 15 years at the Fort Wayne center. “So they’re eliminating the high-seniority, older employees like myself and replacing them with nonunion college kids — guys fresh out of school. And the taxpayers in Illinois are subsidizing the whole thing.”

Okay, that's bad enough, but the Corporate FlackQuote is just priceless:

Asked for a response, Navistar spokeswoman Karen Denning called it unusual for engineers to have union representation in the first place, a claim disputed by auto industry experts. Denning also sent a statement that said the company’s decision to shift the Fort Wayne jobs to Lisle was “based solely on our desire to compete in the global economy.” The statement added that Navistar has allowed many Fort Wayne employees to relocate to the Chicago area and stay with the company.

Because Illinois is just full of sophisticated, well refined workers, don't you know, while those troglodytes over in Indiana have not yet even evolved opposable thumbs.

In summary, lower paid Illinois workers are benefiting from higher paying jobs being transferred from Indiana, while the nearly bankrupt Land of Lincoln loses even more tax revenue it can ill afford to lose. Meanwhile, the top management at Navistar pat themselves on the back for being such shrewd businesspeople while laughing all the way to the bank. And yet people still want to blame the unions for making "unreasonable" demands as being the reason why so many companies are having trouble being competitive.


Bonus: I wonder if R. Dean Taylor used to work for Navistar