Business

Target's New CEO Faces Immediate Challenges

Filed under: Business

There's a new man on top of the bull's-eye. After more than 40 years with Target, including 14 as chairman and CEO, Bob Ulrich is handing the reins of the nation's second-largest retailer to his longtime sidekick Gregg Steinhafel.

Bob Ulrich

Target changed dramatically under Ulrich's reign, and his rise to the corner office boasts tinges of old-fashioned business clichés of climbing the corporate ladder. That's not to say spent decades working himself up from stock boy to head honcho, but he was faithful to Target and it paid off. Starting out as a merchandiser for Dayton's Stores (a branch he later jettisoned from the Target family) in 1967, Ulrich saw his role grow to president of Target in 1984, which only had 80 stores at the time, and CEO a decade later. Steinhafel, an Ulrich recruit, joined the Target team in 1979, and when Ulrich landed the top job in 1994, Steinhafel, 52, was promoted to Target's executive vice president, and last year was granted a seat on the board of directors.

Gregg Steinhafel

During his time at the helm he bought up the naming rights to the Target Center, the store expanded rapidly into 47 states, he helped usher in a squadron of celebrity product lines, saw the concept of SuperTarget flourish, and sales quadrupled. I'm sure the company is kicking themselves for having a mandatory retirement age of 65.

As someone who used to work at Target -- for most of high school and breaks during college I could be found decked out in a red polo shirt and khaki pants, stocking shelves, wrangling carts in the parking lot, and demonstrating how to use digital cameras for the ignorant masses plaguing the electronics department -- I suppose I owe Ulrich some debt of gratitude for running the company so well.

Looking out for employees currently in the position I used to fill will be a challenge. Steinhafel is taking his mentor's job at a tricky economic time. With a recession either upon us or soon to be arriving, there are plenty of troubles waiting to happen. Here, in no particular order, are three.

Credit. Every day on the news we learn of new segments of the economy that are being thrashed by the shortage or credit and defaulting borrowers, and Target is no different. Turns out, Target was a little too lose with standards when choosing who could get a shiny red Target Card or Target Visa. I spent many an afternoon offering store guests premiums including two-liter bottles of orange soda to Target bulldog umbrellas to convince them to apply for credit cards. For this task, I was given a dollar for every credit application I got -- occasionally netting more than 40 a day. Turns out that the deal was better for me than the company or some cardholders. I wasn't left with a mangled credit score or billions of millions of dollars of write-offs.

A living wage. Of course a living wage runs counter to any big box store with thousands of employees. It's a simple fact that paying higher wages will mean lower profits. Still, it's probably actually in Target's best interest to pay their employees a little more. During the recession, slightly higher wages will keep internal morale high, make the company appear to be enlightened in the eyes of the media, and get labor unions off their back for a while. But most importantly to the hourly employees during times when the economy is in the tank, a living wage would help secure their finances when the inevitable cut back on work schedule hours arrives. Chicago tried to pass a living wage ordinance in 2006 for big stores, and target broke out the hyperbole pen and released a statement calling it part of an "extreme agenda." Just a bit over the top. There is nothing extreme about paying inner city employees, or retail workers anywhere for that matter, a slightly higher wage.

In defense of my idea, here's an anecdote from my time at Target: On breaks, I would read Red: The Team Member Magazine. As far as work-related publications go, it was pretty good. On these glossy pages was my only contact with Ulrich. Every month in the front of the magazine was a letter to me thousands of employees working in the 1,613 Target stores. Ulrich, whose mug shot showed his perfect graphite colored hair, and his controlled smile, told of some supposedly interesting tidbit of corporate information, which ended with Ulrich's phony signature scrawled across the bottom. One day, during a particularly hard shift, with my knees aching, I decided to calculate how long it would take for me to earn what Ulrich made. Warning: Math in ensuing paragraph.

I will recreate here with his 2007 compensation. In 2007, Ulrich made $12.2 million, during most of my time at Target, I made around $7.85 per hour, and the store was open 14 hours most days. Here was my figuring: $12.2 million/$7.85= 1,554,140.12 hours of work. Divide that by 14 possible work hours in a day and I get 111,010 days. Divide that by 365 days in a year, left me with 304.13 years of working every possible hour to make what Ulrich made in a year. And I'm not saying he didn't deserve a big ol' hunk of cash -- his work probably kept me employed -- but if corporate salaries and compensation were shaved ever so slightly, even half a percent, and added to the salaries of hourly employees, they would benefit profoundly.

Rising food prices, especially organic food.
Target is still relatively new to the grocery game, and it's about to get rough to maintain discount prices. News outlets have been pushing stories pointing out that ethanol's popularity is causing farmers to grow more corn, leaving wheat prices going up. And it's true. Target's organic brand Archer Farms will struggle to hold onto its affordable organic appeal, if it becomes prohibitively expensive for the thrifty organic consumer.

Posted by Ben Palosaari at April 30, 2008 6:07 PM | Comments (1)

 

No mas

Filed under: Business

D'Amico & Partners fired 15 veteran Hispanic workers at the close of business yesterday after they failed to resolve questions about the validity of their social security numbers. The workers have filed a complaint with the federal Equal Employment Opportunity Commission claiming that they're being targeted for discriminatory treatment. The Minneapolis-based chain operates such high-end eateries as Masa and Campiello, along with numerous D'Amico & Sons restaurants.

D'Amico & Partners received "no match" letters from the Social Security Administration for each of the impacted employees indicating that there is an issue with their documentation. The employees had until Monday to resolve the problem with the federal agency. When they failed to do so, all 15 were terminated.

The Hispanic employees, however, believe they're being unfairly singled out. "D'Amico & Partners is not requiring re-verification from any non-Latino employees," they wrote to the EEOC. "D'Amico & Partners is reaching the conclusion that we are undocumented because we are Latino."

Amy Rotenberg, as spokeswoman for D'Amico, says the company would face the possibility of fines and other punishment if it doesn't resolve the social security issues. "We are sadly in a situation where we have to comply with federal law," she says. "We're really between a rock and a hard place."

Rotenberg further notes that D'Amico put the workers on notice last September that they needed to address the problem, but that none have even started the process. The company will leave their jobs open until the end of the month in case the matter is resolved. The workers met with company co-owner Larry D'Amico yesterday afternoon in a last ditch effort to salvage their jobs, but without success.

According to Veronica Mendez, an organizer with the Workers Interfaith Network, the impacted employees are not ruling out a lawsuit. "If necessary the workers are willing and ready to do that," she says.

Posted by Paul Demko at April 1, 2008 10:47 AM | Comments (13)

 

Security guards arrested at IDS Center

Filed under: Business

Dozens of protesters descended on the IDS Center at noon today. "What do we want? Healthcare," the group chanted as they emerged from the skyway system. "When do we want it? Now." The protesters also carried signs that read "Stand up for Health Care" and "Protect Working Families." They handed out flyers to the bewildered lunch crowd headlined, "Do you want strong, healthy, well-trained security officers to protect you downtown?"

The rally was held to garner support for security officers who are locked in a contract fight with five companies that provide security at Twin Cities office buildings. The chief dispute is over health care costs. According to Service Employees International Union Local 26, the union that represents the workers, the current contract proposal would increase insurance premiums by as much as 50 percent during the proposed five-year contract.

"We're out here today because we need health insurance," said Tom Convington, who's worked as a security guard at the US Bancorp building in downtown Minneapolis for two years. "People are leaving their jobs because they can't afford the health insurance."

The group then proceeded to the lobby of Minnesota's tallest building. About a dozen protesters bound themselves together with duct tape around an informational kiosk.

Eventually they were arrested by Minneapolis police officers. All together 17 people were cited for trespassing, including nine security officers. Strangely they were hauled away on a Metro Transit bus. It was the second time in a week that arrests were made at protests stemming from the labor dispute.

Posted by Paul Demko at March 27, 2008 3:32 PM | Comments (2)

 

Maxwell's Fire Causes New Ice Castle

Filed under: Business

Maxwell's American Pub burned yesterday. With the temperature near zero, though, water from firehoses was freezing almost on contact.

The results were these startling photos by Tony Webster.

Posted by Jeff Shaw at February 21, 2008 7:11 PM | Comments (1)

 

Just Like a Tragic Fairytale: Lunds and Byerly's Will Soon Close at the Stroke of Midnight

Filed under: Business

As I was shopping last night at the Uptown Lunds, I noticed a sign on the door proclaiming the stores new hours. Beginning February 17, all Byerly's and Lunds will no longer be open 24-7. The new hours of operation will be 6:00 am to midnight.

Lunds Food Holdings Inc. has stated that there will be no layoffs; merely a shuffling of employee schedules so that stores can focus on busier hours. Yet with these changes, one has to wonder where this leaves the drunk and/or stoned nighcrawlers wandering about Uptown in search of munchies. Where will they find the $5 gourmet "creme fraiche" potato chips, California rolls, or a container of longetivity noodles at 2:00 am? I guess there's always the S.A. on Lake and Bryant.

Posted by Jessica Armbruster at February 7, 2008 5:45 PM | Comments (4)

 

Slaughterhouse workers back union

Filed under: Business

Workers at the Dakota Premium Foods beef processing plant in South St. Paul voted yesterday to retain union representation. Employees backed United Food and Commercial Workers Local 789 by a 152-82 margin.

More than seven years ago, the predominantly Hispanic workforce walked off the job to protest dangerous working conditions. A month later they voted to join the UFCW. But negotiating a labor contract proved to be a bitterly contentious process that dragged on for two years. (For the full backstory see "Slaughterhouse Rules".)

The decertification vote was prompted when at least 30 percent of workers signed cards advocating for a referendum on union representation. Local 789 waged a vigorous campaign to preserve collective bargaining--visiting workers homes, leafleting outside the plant, and holding meetings at the union hall.

The slaughterhouse's current labor contract expired in June. Negotiations on a new agreement have gone nowhere. UFCW officials hope to re-start talks immediately.

Posted by Paul Demko at January 26, 2008 9:01 AM | Comments (1)

 

Labor negotiations open for grocery workers

Filed under: Business

Contract talks for roughly 5,000 grocery workers in the east metro area will begin tomorrow morning. The bargaining unit includes employees at stores such as Rainbow, Cub, Lunds and Byerlys. United Food and Commercial Workers Local 789's current three-year contract expires in March. The union's goal is to have a new pact in place by then. "We think we're going to get there with these guys," says UFCW organizer Bernie Hesse. "It's always going to be about how you move money around."

Posted by Paul Demko at January 14, 2008 4:48 PM | Comments (0)

 

Food fight: labor activists target Paula Deen at MOA

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On Thursday evening Food Channel celebri-chef Paula Deen appeared at the Mall of America to pimp her new memoir, It Ain't All About the Cookin'. The book reveals, among other things, the Southern culinary diva's "reluctant addiction to smoking" and "weakness for salty language."

Deen had some unwelcome visitors at the MOA gathering, however. A group of labor activists from United Food and Commercial Workers Local 789 showed up to pass out flyers regarding Smithfield Foods. The company operates the world's largest pork processing plant in Tar Heel, North Carolina, and Deen endorses its line of products. (Click here for video of Deen preparing Crunchy Honey Glaze Spiral Sliced Ham.)

The flyer accused Smithfield of violating federal labor laws by assaulting, harassing and threatening workers. It also pointed out that Human Rights Watch had issued a report criticizing working conditions at the plant. The UFCW has unsuccessfully been trying to organize workers at the Tar Heel plant for more than a decade. The union is targeting Deen as part of its Smithfield Justice campaign.

"As fans of Paula Deen, and advocates for human decency, we ask that Paula Deen have a heart and stop promoting products that are packaged with abuse," the flyer concluded.

Apparently the literature drop was not welcome. Three of the labor activists, including Local 789 president Don Seaquist, were removed from the mall by security guards.

Posted by Paul Demko at December 3, 2007 3:47 PM | Comments (0)

 

Organic granola blues

Filed under: Business

North Country Co-Op will shut down by November 4. The venerable grocery store has been selling organic vegetables and bulk granola to West Bank residents and University of Minnesota students for 37 years. But mounting debt and declining sales led to a bleak financial forecast for the store. The decision to shut down, sell the building, and pay off the organization's debts was made at a meeting Monday evening.

The Twin Cities original co-op was in some ways a victim of its own success. "It's a bit of a Phyrric victory for us," says North Country board member Doug Sembla. "Originally the vision of the co-op movement was that organic and local foods would be accessible to everyone. Now you're seeing organic and local food at Cub, at Wal-Mart, at the corner stores. North Country was a big part in inspiring that."

Roger Dumas recalls shopping at the co-op as a long-haired U of M music student in the early 70s. "It was kind of dark and unadorned with industrial size drums of honey and very liquidy peanut butter and granola," recalls Dumas, who is now a researcher at the university's Brain Sciences Center. "If it wasn't for those three things I probably wouldn't be alive today."

(The Strib had a piece on this in today's paper.)

Posted by Paul Demko at October 26, 2007 7:40 PM | Comments (1)

 

Boom boom bust: ethanol glut looms

Filed under: Business

The Strib's Matt McKinney has a swell piece in today's paper about the dimming economic prospects of the ethanol industry. With corn prices rising, ethanol prices tumbling, and production exploding, it may take years to correct the looming market imbalance. Slate also ran a nice primer on this topic last week.

The specific numbers are eyepopping. Currently Minnesota has 17 ethanol plants with a production capacity of 675 million gallons per year. According to the Minnesota Pollution Control Agency, four other facilities are currently under construction with the ability to produce an additional 400,000 gallons annually. What's more, 11 plants are in the planning stages with a potential production capacity of 900,000 gallons each year. In other words, by 2010 Minnesota could be producing some 2 billion gallons of ethanol annually--equal to nearly a third of the country's current ethanol consumption.

The numbers nationwide are similar. Since just the beginning of 2006 ethanol production has jumped by nearly 50 percent. According to the Renewable Fuels Association, there are presently 140 ethanol plants operating with a production capacity of roughly 6.9 billion gallons per year. However, there are plans underway to build or expand 84 plants, increasing the annual production capacity to 13.5 billion gallons in the near future.

What do these numbers mean? Consider that currently there is a 10 percent federal cap on ethanol levels in standard gasoline. Furthermore Americans presently consume roughly 130 billion gallons of gasoline per year. In other words, even if every gallon of gasoline sold were to contain the 10 percent maximum of ethanol, there would still be an overabundance of corn-based fuel on the market in the coming years.

So who's going to consume all of this ethanol? One (unlikely) possibility is that the EPA could raise the percentage of ethanol allowed in standard gasoline to 20 percent--a policy touted by Gov. Tim Pawlenty.

A more likely scenario is a massive increase in flexible-fuel vehicles, which can run on fuel that is up to 85 percent ethanol. David Morris, of the Institute for Local Self Reliance, and a strong supporter of corn-based fuel, points out that converting vehicles to flex-fuel only costs manufacturers about $100. Barack Obama, for one, is pushing for a mandate that all new automobiles be flex-fuel vehicles.

Posted by Paul Demko at October 10, 2007 1:02 PM | Comments (7)

 

Will work for $200,000+

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Today's the last day for Rider Bennett, the storied Minneapolis law firm that's been around for 47 years. The firm decided to cut its losses a few months back, and lawyers have been jumping ship ever since. A few still haven't found a new home. Who? If you're so inclined, you can find out here.

Posted by Jonathan Kaminsky at May 31, 2007 2:57 PM | Comments (2)

 

Twin Cities condo market hits the unfinished basement

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Are you a fan of downtown living? Real New York-style lofts with floor-to-ceiling windows and solid-core doors? Have you heard that there are units available, right now, in the city of Minneapolis?

Here's the good news, as told by the Minnesota Area Association of Realtors:

• There are 612 condo units currently listed for sale in downtown Minneapolis (and another 789 in the rest of the city).


• So far in 2007, 123 downtown units have been sold--a 69 percent drop-off from last year.


• Sellers are collecting a falling percentage of their original asking price, and units are staying on the market for longer. The average is now six months.

Did we say good news? We meant bad news. Very bad news.

In the last few weeks, developer Rottlund Homes pulled out of plans to build the Revue, a 107-unit building next to the new Guthrie. And Milliken Development backed away from constructing 290 condos in its ongoing project at the corner of Hennepin and Washington.

While the real estate market may be sobering up from its long bender, analysts are not convinced that this drunk has hit bottom. "There was a severe downturn in housing starts in 2006," says Toby Madden, regional economist for the Federal Reserve Bank of Minneapolis. "Our projection is that it will go down a bit this year. So we're not looking for a recovery for another year or two."

But at least a few folks are cheering the ghost developments--real estate agents with other buildings to sell. "We're having a dynamite month at 720 Lofts," says Edina Realty's Fritz Kroll, explaining that the 99-unit North Loop building is down to its last condo.

"All these projects that have cancelled have pushed those buyers out into the market," Kroll continues. "I think demand and supply are going to be in check much sooner than people were predicting."

A day later, however, Kroll calls back with news of a fresh project that will be keeping him busy. The East Bank Mills, Kroll explains, will be holding a sales kick-off event the next day at the hulking Pillsbury A Mills. The current plan is to add another 960 condos to the Mississippi riverfront.

Posted by Michael Tortorello at May 21, 2007 2:14 PM | Comments (2)

 

Swipe the card, not the information, please

Filed under: Business

Last week, the Minnesota House unanimously voted to pass the Plastic Security Act (HF1758), meaning in the future, when you charge something potentially embarrassing at Sex World or mundane like orange juice at Cub Foods, those retailers could be prohibited from storing info kept on your credit card's magnetic strip—which includes sensitive information such as pin numbers and those super-secure three digit security codes.

"This bill simply puts into law what retailers have already agreed to do when they take your credit or debit card," states bill co-author State Representative Jim Davnie (DFL-62A).

Although there has been an agreement in the past that retailers not store sensitive data, this isn't always the case—one example being a recent incident where hackers stole information from the St. Paul Marshall Field's store at a cost millions of dollars in card replacement fees and fraud investigations.

Perhaps most interesting, the bill could allow credit unions to recoup their costs from retailers who cause security breaches, when in the past they've had to pick up the tab. While retailers have voiced concern that blame for security slips could be placed unfairly on them, it seems highly likely that the bill will pass through the Senate regardless.

"With one committee left to clear the house," states Mara Humphrey, Director of Governmental Affairs for the MN Credit Union Network, "We hope the Plastic Security Act has picked up enough momentum to continue it's movement into the Senate."

Posted by Jessica Armbruster at May 16, 2007 3:58 PM | Comments (0)

 

Geek Squad: im in ur hard drive, steeling ur pr0n

Filed under: Business

Last week, watchdog website The Consumerist posted a long confession allegedly written by an employee of Bloomington-based computer fix-it service Geek Squad.

The disgruntled Geek claimed that the men in the cute New Beetles have been corrupted by their relationship with Best Buy.

The most disturbing—and totally believable—charge? That techies snoop around customers' computers for homemade porn, downloading personal nudie pics onto their own flash drives.

We called a local Best Buy/Geek Squad outlet for reassurance.

"That's absolutely not our practice—it's part of our policy to keep files private," said the Agent. "Although we might see the names of the files pop up, if you've saved pictures as your screensaver."

So we asked, What if we brought in, say, a spouse's computer? Would you search that for hidden porn at our behest?

The Agent paused. "We can do that."

Posted by Sarah Askari at May 7, 2007 9:07 AM | Comments (33)

 

NWA Flight Attendant SOL?

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Pity Northwest's flight attendants--they just can't catch a break in the ongoing drama that is the airline's use of bankruptcy proceedings to undo itself of its burdensome agreements with its unions. For almost nine months the flight attendants have been working under court-imposed terms designed to give Northwest the $195 million in savings it has argued are necessary to allow it to fly out of bankruptcy proceedings a healthy company. A separate court order prohibits them from striking, and federal mediators insist they stay at the bargaining table.

With the end of the bankruptcy case in sight, now the flight attendants are under pressure to ink a new deal with the airline so that they can make the deadline for filing a claim to receive a chunk of the old Northwest along with other airline creditors awaiting the outcome of the case. The $182 million claim could be worth up to $18,000 per flight attendant, according to news reports.

Among the terms said to be on the table are severance packages for flight attendants who want to leave. Hmmm, wonder why anyone would want to give up the friendly skies....

Posted by Beth Hawkins at April 24, 2007 4:43 PM | Comments (2)

 

Taxpayers Win One--Finally--With Northwest

Filed under: Business

Officials at the Minnesota Department of Finance today announced a deal with Northwest Airlines that could let taxpayers off the hook for the cost of building a Duluth maintenance facility that has been sitting idle since the airline's union mechanics went on strike a year and a half ago. The terms of the deal are wonky, but basically the state would get a chunk of the booty Northwest will spread around as it exits bankruptcy proceedings. Enough to repay the $36 million in bonds still outstanding, anyhow.

Students of local history will recall that the Duluth facility was built in 1995 to service the airline's Airbuses. The rationale for taxpayer financing for the construction was that the maintenance base would create lots of good jobs in an economically depressed part of the state. Northwest, which has outsourced much of its maintenace in recent years, shut the base down in August 2005 when its mechanics went on strike.

Current details are available via the Strib and MPR. The backstory you can find in CP's archives, here.

Posted by Beth Hawkins at April 12, 2007 3:31 PM | Comments (1)

 

Coleman's credit card flip flop

Filed under: Business

Last week, Sen. Norm Coleman opened a Senate hearing with an impassioned speech about abuses by credit card companies. "Although the practices at issue today are not criminal schemes, they clearly have a devastating impact on the many families who are mired in debt—and credit opportunities that look like a helping hand actually become snares that sink the consumer into further depths of debt," Coleman intoned. "High interest rates, hefty fees, and crippling penalties impede more and more hard-working families from pursuing their American dream."

Never mind that two years ago, Coleman voted in favor of a law that made it significantly harder for people with unmanageable credit card debt to file for bankruptcy. His reasoning: Too many irresponsible wealthy people were exploiting loopholes in the old bankruptcy laws. "This pro-consumer bill will curb gaming of the system and I'm sure that's why it enjoys such overwhelming and bipartisan support in the Senate," he declared in a press release issued March 10, 2005.

Bankruptcies fell sharply nationwide in response to the '05 bankruptcy law reform, to their lowest levels in more than 25 years. In Minnesota, almost 7,800 were filed in October 2005, the month the change took effect, vs. 108 the following month. Numbers have crept back up every month since, however, recently hovering around 800 per month. Meanwhile, average credit card debt is about $9,000 per person.

Coleman's staff defends the senator's votes, which they say aren't contradictory at all. Coleman Communications Director Tom Steward points out that the 2005 reform requires debtors to get counseling before they can file for bankruptcy. Since then, Coleman also has worked to reform the credit counseling industry, he says: "The credit counseling agencies become a funnel-point for debt-strapped Americans, and Senator Coleman's success in cleaning up that industry will mean that many Americans successfully manage their debt with credit counseling, rather than declaring bankruptcy."

Posted by Beth Hawkins at March 12, 2007 9:36 AM | Comments (1)

 

Hometown companies rate high in customer satisfaction index

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The University of Michigan released their American Customer Satisfaction Index (ACSI) on Tuesday for the fourth quarter of 2006. The ACSI is a national economic indicator of customer evaluations of the quality of products and services available to household consumers in the United States. So, how did our hometown corporations fare? The biggest gain in retail on ACSI's 100-point scale came from Richfield-based Best Buy, whose score rose 7 percent to 76. The report cited top-line products and extensive service offerings as factors, while opening numerous stores during 2006. In the department and discount stores category, Wisconsin-based Kohl's ranked highest with a score of 80, while Minneapolis-based Target dropped 1.3 percent to 77. Eden Prairie's SuperValu dropped 4 percent to 74 in the supermarket category, with the recent acquisition of poorly performing Albertson's stores impacting their score. The rest of the numbers after the jump...

Minnesota-based company scores on the American Customer Satisfaction Index 100-point scale (4th Quarter 2006)

Target 77 (-1.3% from last year)
Best Buy 76 (+7% from last year)
uBid, Inc. (Petters Group Worldwide, LLC) 74 (+1.4% from last year)
SuperValu 74 (-3.9% from last year)
UnitedHealth Group 68 (+6.3% from last year)

Posted by Corey Anderson at February 22, 2007 9:25 AM | Comments (2)

 

Northwest Gets Another Handout

Filed under: Business

There's a free City Pages T-shirt in it for anyone who has the wiles to figure out whether those helpful Northwest Airlines ticket counter people routinely bump Gov. Tim Pawlenty to first class. If they don't, they really ought to. Or maybe their bosses ought to put some kind of flag or flashing beacon on his profile in the reservation system so flight attendants know to leave the whole can of ginger ale.

In the latest chapter of the ongoing drama in which Northwest shores up its balance sheets on the backs of Jane and Joe Minnesota, Metropolitan Airports Commission Chair Jack Lanners, a T-Paw appointee, this week presided over the cutting of a deal that will essentially give Northwest a $239 million rent reduction from '06 to 2020, and possibly more.

The deal would all but cancel out the money Northwest borrowed from the MAC in 1992--the last time the airline insinuated that without the help of the public, it would be forced to pull up stakes and bless the people of some other state with its good jobs.

Yeah, those good jobs.

In exchange for this latest bailout, Northwest will agree to keep a headquarters and a hub at Minneapolis-St. Paul International Airport. (Bonus points if you remembered that that was pretty much what they promised in exchange for the loan 15 years ago.)

The Strib has details:

Savings for the airlines will come from fees paid to the airport by the restaurants, shops and auto rentals that operate there. And because it will be sharing that revenue and reducing airline fees, the MAC would be left with less money to spend on construction, early debt payment and soundproofing of homes under the flight paths.

But back to Pawlenty and Lanners. The owner of MGM Liquor Warehouse, Lanners also appears to be the kind of guy who puts his money where his mouth is. Campaign finance records at the state and federal level show him contributing some $45,000 in the last three election cycles, all of it to Minnesota Republicans, to Minnesotans for Marriage, and to a political action committee called the Freedom Club of America. The Club, which boasts donor disclosure statements that read like a Who's Who of the rich and the far right, made even more donations to some of the same pols. Pawlenty got $1,300 from Lanners, and another $2,500 from Freedom Club.

In terms of largesse toward business, Lanners had precedents to keep up. His Pawlenty-appointed predecessor, the redoubtable Vicki Tigwell, stood prepared to undertake a massive expansion project Northwest desired even though the airline was already suggesting bankruptcy might be in the offing.

Posted by Beth Hawkins at February 8, 2007 9:43 PM | Comments (2)

 

Twin Cities janitors agree to three-year labor contract

Filed under: Business

There will not be a janitors strike in the Twin Cities. Service Employees International Union Local 26, which represents 4,200 custodial workers, announced today that it has reached a new labor pact with the consortium of 18 companies that own office towers in the metropolitan area.

The janitors had been working without a contract since the end of last year. On January 13 members of Local 26 voted overwhelmingly to authorize a strike, but no date was ever set for a work stoppage. (See "Dirty Work" for more details about the labor dispute.)

As with most labor disputes in recent years, the chief negotiating hurdle was health care. According to Local 26, the new contract will reduce monthly health-care costs for full-time workers to $20 for individuals and $75 for family coverage by 2009. In addition they will receive a 10 percent raise over the life of the three-year agreement.

"This victory for janitors sparks hope for all working Minnesotans who are struggling to deal with the rising cost of health care," said Javier Morillo-Alicea, president of Local 26, in a press release. "We need to keep up the fight to make sure that everyone in our state has access to quality, affordable health care for their families."

The union's bargaining committee ratified the agreement unanimously. Janitors will vote on the proposed contract this Saturday.

Posted by Paul Demko at February 5, 2007 5:07 PM | Comments (0)

 

You have to fight for the right to pray

Filed under: Business

Muslim workers at an Arden Hills manufacturing plant are suing the company for the right to pray five times a day. The class-action lawsuit, filed last month in U.S. District Court, targets Celestica, a Toronto-based electronics manufacturer, and Adecco, a temporary-work agency that provides employees for the Arden Hills factory.

According to the lawsuit, prior to May 27, 2005, Muslim workers at the plant were permitted flexibility in break times that allowed them to meet their prayer requirements. A change in policy, however, mandates that all employees take breaks at times determined by the company. Subsequently Muslim employees were disciplined or terminated for violating the new guidelines. "A lot of our plaintiffs were punished for taking prayer breaks," says Sofia Andersson, an attorney with Nichols Kaster & Anderson who is working on the case.

The lawsuit contends that the new strictures violate the employees civil rights. According to the complaint, roughly 100 current and former workers could be included in the class. The workers are seeking monetary damages, as well as an order mandating that the companies make reasonable accommodations for the religious beliefs of their Muslim workers.

In court filings, neither company disputes the assertion that workplace rules regarding breaks were changed in May, 2005. But they argue that the present arrangement does not violate the rights of workers. "Essentially, Plaintiffs demand that they be permitted to cease work and engage in prayer whenever they deem it necessary regardless of their employers's legitimate business needs," Adecco charges in its response to the lawsuit. "This request for an 'accommodation' is unreasonable and would result in an undue hardship to these Defendants."

In 2002 the U.S. Equal Employment Opportunity Commission sued Oberto Sausage Company for failing to accommodate the religious beliefs of its Muslim workers. In that case, employees were fired for taking unauthorized breaks to end their fasts during the month of Ramadan. Under the terms of a consent decree, the company agreed to pay $362,000 in damages and to not engage in further discriminatory practices.

Posted by Paul Demko at January 17, 2007 10:30 AM | Comments (4)

 

MAC Considers Giving Revenue to Northwest

Filed under: Business

In which the Lindbergh terminal comes to resemble a stadium

The Metropolitan Airport Commission today is considering a proposal wherein it would pass on to tenant airlines $181 million in concession "rebates" between 2006 and 2020. In short, Northwest would get to shore up the bottom line using cash the airport collects from car rental companies, food stands, and so forth. In exchange, Northwest would agree to operate a "hub" at the airport until 2020.

Wait--isn't that what Northwest promised back in the early '90s, when it borrowed $270 from the MAC? Why yes, yes it is.

Except that back then, Northwest had a slightly better pitch: Keeping the hometown airline here was important because it was one of the state's biggest and best employers, providing secure union jobs with good benefits. Yeah, those jobs. The ones that ultimately proved too much of a drag on the bottom line and had to be eliminated.

The best paragraph of the Star Tribune's critical coverage of the proposal needs no comment:

MAC documents and interviews with airport officials show that one of the incentives behind the proposal is to ensure the airport recoups a big subsidy it granted Northwest in the 1990s. Northwest still owes $262 million on the $270 million it borrowed from the MAC 15 years ago. MAC officials say the latest subsidies would ensure repayment of that loan.

Posted by Beth Hawkins at January 16, 2007 3:52 PM | Comments (1)

 

Pumping up Defibrilator Sales

Filed under: Business

Medtronic to advertise medical device to consumers

In the last decade, pharmaceutical companies have shown that sometimes all a drug needs to succeed on the open market is an alarming diagnosis and enough advertising dollars to create a firm association between malady and remedy in the minds of consumers. Now it appears Medtronic is poised to see if the formula transfers to the astoundingly lucrative medical device industry. The Twin Cities-based company plans to spend $100 million educating consumers about sudden cardiac arrest and the role implantable defibrillators can play in preventing it.

Sales of implantable defibrillators and pacemakers plummetted last year in the wake of a series of recalls and safety warnings concerning defibrillators sold by Guidant, but Medtronic has problems of its own: Last fall plaintiffs got the go-ahead to pursue some 270 personal injury lawsuits alleging that a defect sometimes caused batteries in the devices to lose power in just days.

The ad campaign is being billed as a pubic awareness campaign aimed at people who may need to talk to their doctors about sudden cardiac arrest, but a look at the commercial posted at a Medtronic site looks more like a good old fashioned ad.

Posted by Beth Hawkins at January 16, 2007 3:01 PM | Comments (0)

 

Janitors set strike vote

Filed under: Business

The 4,200 workers who clean Twin Cities office buildings are getting closer to walking off the job. Contract negotiations between the Minneapolis-St. Paul Service Contractors Association, which represents 18 cleaning companies, and Service Employees International Union Local 26 have collapsed. Efforts to settle on a new labor pact for the workers ended acrimoniously last week and their contract expired at the end of the year. There are no further talks scheduled.

In a conference call yesterday, Local 26 president Javier Morillo-Alicea, announced that a strike vote by the union's members is slated for January 13. However, no date has been chosen for when a work stoppage might occur.

The primary stumbling block in negotiations is healthcare coverage. Under the previous three-year contract, the companies were required to contribute $230 monthly to a health plan of their choosing. Local 26 is seeking to give their members the option of choosing a plan that was created by SEIU and UnitedHealthCare. Under the union's proposal, the cleaning contractors would contribute $300 monthly for individual plans and $362 for family coverage.

"Health care is a central issue for us in these negotiations," Morillo-Alicea said in the conference call. "While we've been ready and willing to discuss affordable health care our employers have refused to do so. ... They've disrespected the bargaining process and disrespected janitors."

In a press release issued after talks broke down last week, the owners' association claims that they've proposed health-insurence changes that would increase company costs by 600 percent. "The SEIU Local 26 refused to discuss the Association's last offer and walked away from negotiations," the statement reads.

Morillo-Alicea, however, insists that those numbers are fiction. "Is the proposal going to cost money?," he asks. "Absolutely. Is it going to be 600 percent? No."

Morillo-Alicea says that union members are committed to securing a better healthcare package from the employers. "It's a new day at Local 26," he says. "Our members are energized."

Posted by Paul Demko at January 3, 2007 8:10 AM | Comments (0)

 

UnitedHealth Exec Lois Quam profiled in WSJ

Filed under: Business

Monday's Wall Street Journal ran a long and newsworthy profile of Lois Quam, who has recently been elevated to a management position just behind new CEO Stephen Hemsley in the Minnetonka-based, multibillion-dollar health care conglomerate UnitedHealth Group Inc.

WSJ, which had a hand in toppling former UnitedHealth CEO William McGuire by its superb reporting on the company's back-dating of stock options for McGuire, says Quam "will play a key role in an effort to restore shine to the company's public image." Unlike McGuire, Hemsley shuns the limelight and Quam is being encouraged to step into the breach.

Here are some other highlights from the WSJ story, written by Vanessa Fuhrmans and unavailable to even online readers without a paid subscription.

* In addition to overseeing UnitedHealth's senior-care and Medicaid-related HMO businesses, Quam was temporarily put in charge of the company's internal human resources department recently, in an effort to boost morale among UnitedHealth's 55,000 employees.

* Earlier this year, Quam's own UnitedHealth stock options were worth roughly $35 million, but a 22 percent drop in the stock and UnitedHealth's repricing of some options have changed that value.

* Quam has earned a sterling reputation inside the company through a variety of large and skillful actions. She turned a Medicare demonstration project into a $1.5 billion business called Evercare. And because she had brokered a deal to sell supplemental Medicare policies to AARP members back in 1997, Quam persuaded the powerful seniors organization to endorse UnitedHealth's entry into the Medicare Plan D market earlier this year, making the firm far and away the largest supplier of Plan D drugs to seniors. Quam also was a major player in UnitedHealth's $8.1 billion acquisition of PacifiCare Health Systems Inc., and presided over the integration of PacifiCare's senior and Medicare business (the majority of the company) into UnitedHealth.

* Of perhaps greatest interest to Minnesotans, Quam decided against locating a major new component of UnitedHealth at the company headquarters in Minnetonka, which the WSJ referred to as the "obvious choice." Instead, she set up an innovation center to plan for new Medicare and senior-related products and services in southern California, where PacifiCare was headquartered, calling it "the right choice."

Posted by Britt Robson at December 14, 2006 11:35 PM | Comments (0)

 

Best Buy: Preferred by hooky-players two-to-one

Filed under: Business

Business Week has a nifty trend piece about the changing work culture at the Minnesota-based electronics retailer, Best Buy. According to the magazine, by the end of 2007, all 4000 workers at the company's Richfield HQ will be permanently relieved of that most odious burden of the working stiff, the time clock. Instead, under Best Buy's so-called "Results Only Work Environment," corporate employees will be judged strictly on the basis of what they accomplish, not the long hours they log (or don't log) in their cubicles.

More interesting yet is the manner in which this seismic shift took place:

Another thing about this experiment: It wasn't imposed from the top down. It began as a covert guerrilla action that spread virally and eventually became a revolution. So secret was the operation that Chief Executive Brad Anderson only learned the details two years after it began transforming his company. Such bottom-up, stealth innovation is exactly the kind of thing Anderson encourages. The Best Buy chief aims to keep innovating even when something is ostensibly working. "ROWE was an idea born and nurtured by a handful of passionate employees," he says. "It wasn't created as the result of some edict."

Will it work in the long run? Who knows? In the meantime, it's a good bet the Best Buy will see a dramatic uptick in job applications from golfers, anglers and other inveterate hooky-enthusiasts.

Posted by Mike Mosedale at December 13, 2006 4:14 PM | Comments (0)

 

Mozaic Project in Uptown kicks off 2007 with a Big Dig

Filed under: Business

After the controversy over the size of its tallest building was resolved in a compromise last summer (reduced from 13 stories to ten, at 112-feet high), not much has been heard about the grand $150 million Mozaic condo-hotel-retail project that will significantly change the face of Uptown. But pending final negotiations with Xcel Energy about the cost and timeliness of relocating utility lines, the stage is set for Mozaic to start construction early next year. And the first stage involves making a huge hole in the pavement that could likewise create a large dent in the foot traffic, short-term parking availability, and, sooner or later, movie attendance in Uptown.

Specifically, Mozaic will start with the digging of a four-level underground parking facility in the current parking lot space between the Lagoon Theaters and Uptown bus terminal. Eventually, the project will also feature a luxury 140-room Graves Hotel, 72 condo apartments, nearly 11,000 square feet of restaurant and cafe space, a public plaza with steps and a ramp down to the nearby Greenway, and an expanded 1600-seat movie theater complex.

Starting work on the underground parking facility was originally slated to begin in January, but will likely be delayed for a short period due to negotiations between developers and Xcel Energy on rerouting utility lines in the area. "Right now a lot of the lines run right through the site," says Stuart Ackerberg, CEO of the Ackerberg Group, which is developing Mozaic along with CAG Development. "The way it works with Xcel, we are negotiating what it cost to relocate the lines, then it could take up to four months for another of their departments to do the work."

That was back in early November. Since then, Ackerberg and his assistant have both failed to return numerous phone calls seeking an update. Xcel Energy spokesperson Tom Hoen says that from the utility's perspective, the project remains "on track," but Tenth Ward City Councilman Ralph Remington, who represents the area where Mozaic is being constructed, says he has heard that construction will now begin in February. "We were all going to meet sometime this month, but it hasn't happened yet," Remington says.

Also up in the air is the extent to which the project will compel the six-screen Lagoon Cinema complex to reduce their movie offerings, although any major disruption would seem to be a year off. Says Ackerberg, "We're talking about a variety of different options for Landmark," the theater chain that owns Lagoon and leases space in the building that will be dramatically overhauled to accomodate the hotel and theater expansion. "Everything is being considered: Having the theaters go [completely] dark for awhile, or have some of them go dark. At what points in the process do they stay open, and when do you close completely? We're trying to analyze all of that, and everything in-between."

Noting that Landmark was one of the Ackerberg Group's anchor tenants when they developed the space for movies and offices back in 1994, Ackerberg adds that "all the options have pluses and minuses, and we want to do what works best to continue our long-term relationship with Landmark. But we are pushing for answers because we need to refine the project."

Again, that was in early November. Since then, neither Ackerberg nor Hugh Wronski, city manager for Landmark here in Minneapolis, have chosen to divulge further details. "The underground parking will take a year to develop, and during that time we'll complete the design of the hotel and other things," says Ackerberg. Then the internal staging of the two buildings will come out of the ground simultaneously on both sides of the street."

Posted by Britt Robson at December 8, 2006 7:12 AM | Comments (0)

 

Mall Of America to huggers: No Mas!

Filed under: Business

In their short time together, the Hug Brigade (previously profiled here) has gathered to hug strangers on the Nicollet Mall, in Uptown, outside the Vikings-Packers game, and outside polling places on Election Day -- all without incident. Until last week, that is, when a small contingent of Huggers took to the Mall Of America to ease the pain of Black Friday warriors in need of a widdle snuggle.

According to Hugger Tabatha Robbins, the Brigade -- who this time out brandished "Free Hug" t-shirts but not signs -- hugged shoppers for two hours. Finally they were stopped by a security guard who said, "Sorry, but you guys can't do that anymore."

Robbins asked what they were doing wrong, and the guard told the three member-strong Brigade that soliciting is illegal at the Mall Of America.

Robbins says she "giggled" at the idea of free hugs being an act of solicitation, but didn't push it because they were hugged-out and ready to call it a day anyway. The group met up with a fellow Hug Brigade faction to wait for another hugger to get off work at Bubba Gump's, where the security guard confronted them again and... um, here's Robbins:

"He yelled at us again," she says. "I looked at him this time and said, 'What are we doing wrong? We are standing here waiting for a friend to get off of work.' He said, 'You have been warned once. If I catch you doing it again I will have to ask you to leave.'

"I asked him what he was talking about. He said, 'You are still giving people hugs.' I told him, 'No we are not.' He said, 'That person just came up and asked for a hug.' I was like, 'Yeah. Am I gonna deny someone a hug when they come up to me and ask?'"

Hell, no! But the Huggers cut their losses, told their worker friend they'd see her later, and left the Mall. "I found it so upsetting that people can't see the good in what we are trying to do," Robbins wrote in an email a couple hours after getting the hug heave-ho. "Doesn't 'soliciting' mean that you are asking for money or along those lines.... what part of FREE HUG do people not understand... lol."

"They were walking up to people randomly and hugging them," said Mall Of America spokesperson Julie Hansen. "It was intimidating to our visitors. They were told to cease hugging, and they didn't. People are here to shop and they don't know what [the huggers'] agenda is. They don't know if they're going to get mugged, or pick-pocketed, or what. It's not appropriate."

This weekend, the Hug Brigade moves on to more welcoming indoor confines: senior citizens homes and assisted living facilities.

Posted by Jim Walsh at November 30, 2006 4:34 PM | Comments (7)

 

Where the streets have no record stores

Filed under: Business

It's no secret that the prognosis for independent record stores is bleak and only getting bleaker. But, for the hell of it, let's revisit the list of recent casualties on the Twin Cities scene. Two years ago, the renowned St. Paul metal mecca, the Root Cellar, shut down its storefront for an internet-only sales model. Last year, the venerable Let It Be Records followed suit and abandoned its downtown Minneapolis storefront. Earlier this month, Aardvark Records in northeast Minneapolis also went the virtual route. And now comes news that Know Name Records is folding its Dinkytown location.

According to longtime manager Chris Valenty, December 20 will be the last day for the store, which has operated in two different locations near the U of M for about a dozen years. "Students don't buy CDs anymore. We still get students in the store sometimes, but I think they're just looking at the CDs to figure out what they want to download," Valenty laments.

Know Name, which also sells smoking accessories, took another hit when a head shop opened nearby, according to Valenty. And then there is that other menace to the small time retailer: seemingly unsurmountable competition from big box outfits such as Target, Best Buy and Wal-Mart. "They sell CDs for less than we can buy them," Valenty says.

Valenty, who says he has no idea what he'll do next for work, plans to host a farewell bash some time next month. "I just want to have a good death party, you know, go out on a good note."

Know Name's other outlet, located at 6005 Portland Avenue in south Minneapolis, will remain open.

Posted by Mike Mosedale at November 29, 2006 3:31 PM | Comments (0)

 

Attack of the killer potato pancakes

Filed under: Business

On April 4, 2001, Vernon Hiltner was dining at a Perkins Restaurant & Bakery in Coon Rapids and ordered the potato pancakes. According to a civil complaint filed in Hennepin County District Court this week, the meal did not go down well. From the lawsuit:

That as Plaintiff was eating his potato pancakes he suffered an injury in and about his mouth and throat and suddenly blood began to stream down from Plaintiff's mouth and face onto his plate collecting in a puddle of blood, all caused by a foreign object contained in the potato pancakes, and said cut was not caused by any other instrument or thing; that for a prolonged time thereafter, Plaintiff continued to bleed from the mouth and throat, and had an incident of rectal bleeding several months thereafter.

Hiltner's attorney, Mitchell Hadler, claims that the case has already been settled. He declines, however, to provide any details of the settlement. Vivian Brooks, a spokeswoman for the restaurant chain, declines to comment on the lawsuit.

Posted by Paul Demko at November 17, 2006 10:52 AM | Comments (2)

 

About that Big Stick

Filed under: Business

Why Mesaba might not use its trump cards

In recent days, beleaguered regional airline Mesaba got pretty much everything it wanted from the bankruptcy court: Permission to unilaterally impose wage cuts on its three largest unions and an injunction preventing union members from retaliating with a strike. But the deadlines laid down by the court have come and gone and the airline and its flight attendants, mechanics, and pilots are still at the bargaining table. So what gives? Maybe the bankers have spoken.

Associated Press business writer Joshua Freed, whose coverage of Mesaba's bumpy ride has been generally excellent, has penned what we in the trade like to call "an explainer."

Court orders barring strikes, like the one issued by a bankruptcy judge in Mesaba's case on Monday night, only apply to immediate walkouts. The unions could still strike if they convince the National Mediation Board that no deal is possible and a cooling-off period expires. And lenders generally prefer to see consensual deals even when the airline has been able to impose what it wants on workers, analysts said....

..."Lenders are always concerned about potential lingering conflicts, and if some type of consensus or agreement can be reached, the lenders are often more comfortable in moving forward with the financing that's necessary," said John Kasarda, a business professor at the University of North Carolina who specializes in aviation issues.

You can read the rest here.

Posted by Beth Hawkins at October 27, 2006 9:10 AM | Comments (0)

 

You Want Fries With That?

Filed under: Business

Minnesota's Job Market: Serf-er-ific!

A handful of fun facts about the state of Minnesota's second-quarter survey of job vacancies, as culled by the ever-watchful folks at the St. Paul-based nonprofit JOBS NOW Coalition:

* Of the six occupations with the most job openings in Greater Minnesota--that is, outside and excepting the Twin Cities, none offer starting wages of more than $8.00 per hour.

* More than seven out of 10 openings (72 percent) require no education or training beyond high school. Of those requiring no education, the median wage is $7.45 per hour.

* The two occupational groups with the most job openings are Food Preparation and Serving and Sales. These two groups make up nearly one-third of all job openings (32 percent) and have a combined median wage of $6.71 per hour.

* Over the last year the number of job openings for the Food Preparation and Serving occupational group rose 43 percent; and for the Sales group they rose 85 percent.

Over the last year the median (50th percentile) wage for all Greater Minnesota job openings fell by 12 percent to $8.65 per hour. To put this in context, JOBS NOW's cost-of-living calculations show that in a dual-earner family of four both parents must earn an hourly wage of at least $10.68 per hour.

For several years, JOBS NOW has maintained an excellent online family budget calculator that shows the rock-bottom, subsistence-only cost of supporting households of varying sizes in different parts of the state. (The dreary numbers inspired this City Pages story.) You can go there and punch in your own household's details to see how you're faring.

Posted by Beth Hawkins at October 11, 2006 1:39 PM | Comments (3)

 

Staying alive

Filed under: Business

Arnellia's gets a reprieve from the St. Paul City Council

On Wednesday night roughly 120 people packed the St. Paul City Council chambers for a hearing on the future of Arnellia's, the black owned and operated University Avenue club known for its excellent chicken wings and live music. Most of the attendees wore flourescent tags with the bar's name emblazoned on it and most of them were African American.

The club, owned for 15 years by Arnellia Allen, was facing a dire situation. The city's office of Licenses, Inspections, and Environmental Protection had recommended that Arnellia's be fined $2,000 and shuttered for sixty days. The bar's offense: in February, 2004 an underage patron was allowed entry into the bar and subsequently killed someone on its premises.

The standard penalty for serving underage patrons is a $1,000 fine, but this was not the first time that Arnellia's has run afoul of licensing strictures. In 1995 the bar was shut down for one day for selling alcohol to a minor. The next year Arnellia's was involuntarily closed for six days owing to unruly patrons. And in 1999, the club was shuttered for 45 days after it failed to produce surveilance videotapes related to two seperate criminal investigations.

The hearing didn't get off to a very good start for Arnellia's and its supporters. After an assistant city attorney had detailed the bar's history of "very serious violations," the only question came from Fifth Ward city council member Lee Helgen. "That was quite the history that you read here that had occured at this establishment," he noted. "Why isn't it that we didn't pursue revocation sooner in the process?"

But the tenor of the meeting changed dramatically once the opposition was given the microphone. Arnellia's attorney, a white guy named Bill Tilton, got the ball rolling, describing the bar as the "Club Apollo of the Twin Cities." "It's my favorite bar," he continued. "It is the best bar for random live music in Minnesota. And I think that people have the wrong impression of what this club is and what it has been. ... This is a community center of a sort that most people don't understand. Some people go to the Guthrie. But if you like Harold Melvin & the Bluenotes you're gonna go to Arnellia's."

He was followed to the podium by a parade of notables from St. Paul's black community. "[Arnellia's] is a community gathering place," former city council president Bill Wilson noted. "The music, the camaraderie, the spirit of the community is reflected there, and it's so much needed. I think it's so unfortunate to hold this establishement responsible for some of the ills of society. That's essentially what I'm seeing here."

Then came Earl Wilson, senior pastor at Progressive Baptist Church on St. Paul's East Side. "Arnellia is a very faithful member of our congregation," he began. "Her restaurant and club is the only place that I know in the city where myself and my parishioners can go and dine and listen to live jazz and live blues and feel safe. If you impose the maximum penalty, which is recommended, it would be tantamount to putting her out of business."

Various others followed: businessman Courtney Henry, retired police officer Melvin Carter, West Side drummer Junior Trejo, and club owner Arnellia Allen herself. Each made the case that any problems Arnellia's might have had were long in the past, and that the club had done everything within its power to be an upstanding business. Their speeches were frequently interrupted by applause and even standing ovations. "To take Arnellia's from us would leave a gaping hole in our community," Carter noted. "We have so many special events there--after funerals, birthday parties, we have political events where votes are decided oftentimes. It's a wonderful place, and we feel safe there."

By the time the defense rested, it seemed inconceivable that the city council would vote to, in essence, shut the place down. Fourth Ward council member Jay Benanav, whose district includes Arnellia's, took up the club's cause. "What we've seen in the last six, seven years is a venue that has done everthing it possibly can to make it a safe place for the neighborhood," he noted. "In the three years that Arnellia's has been in my ward, I've not gotten a single complaint from the neighborhood."

Benanav proposed that the fine be reduced to $1500 and that the shuttering of the business be trimmed to 10 days. However, $500 of the fine and all of the closing would be stayed contingent that Arnellia's operates for 60 days without similar problems. In essense, the club would have to pay a $1000 fine.

Despite some handwringing from council members Helgen and Kathy Lantry about setting a poor precedent for dealing with other bars, Benanav's proposals was adopted by a 4-2 vote.

Afterwards Allen declared herself satisfied with the outcome. "I didn't know how it was going to do down, but I am happy the way it came out," she said. Asked why the city was targeting her club, Allen paused and thought for a few seconds. "You know what I'm going to say," she noted. "Because I'm a black woman."

Posted by Paul Demko at October 6, 2006 12:22 PM | Comments (0)

 

In-Flight Peanuts

Filed under: Business

In free market free fall, pilots compete to stock shelves at Costco

Broadly speaking, there are two categories of people we don't want making minimum wage: Public servants who should not be so hungry they are susceptible to bribery (Dean Zimmerman, anyone? Brian Herron? Joe Biernat?) and those whose skills are essential to public safety. Building inspectors, for instance, shouldn't be too dimwitted to spot the brittle concrete in a sports arena or too amoral to look past it. So what about the wisdom of paying airline pilots less than Wal-Mart pays greeters?

Figuring out how pilots are paid makes deciphering how much each seat on an airplane can fetch seem like child's play. But according to the Air Line Pilots Association, if Mesaba gets the wage concessions it wants from its pilots, new hires could end up taking home $11,000-$13,000 a year. With wages like that, do you think the folks flying the planes are going to be the sharpest knives in the drawer?

Pilots are paid by hours in flight. It varies widely with seniority, but Mesaba pilots average 75-86 hours per month, according to ALPA spokesman Kris Pierson. If the airline, which provides regional "feeder" service to Northwest, gets its cuts, a new hire serving as first officer in a small jet will earn $23 an hour. Subtract family benefits and that adds up to $11,000-$13,000 a year.

The airline says it is losing $1 million a week and will have to liquidate if there's a strike or if the unions won't accept cuts of 19.4 percent. (A bankruptcy court judge has said Mesaba can't impose the cuts unilaterally.) If costs can't be brought down, it can't make competitive bids to provide regional service for Northwest, Delta, or anyone else. Wretchedly enough, the routes would probably be snapped up by a competitor, such as Pinnacle or Northwest's own soon-to-be unveiled Compass.

It's almost enough to make a citizen feel sorry for Mesaba's bean counters. Except that if the pilots and other unions are to be believed, in the months before Mesaba followed Northwest into bankruptcy, it "upstreamed" $100 million or more in profits to its holding company, MAIR. They say MAIR had $120 million in cash and equivalents on hand at the time. Remarkably, when airline brass were subpoenaed to testify in bankruptcy court last spring, they were allowed to do so in a closed courtroom and the labor representatives present had to sign confidentiality agreements, the Star Tribune reported in March.

In an August report to the U.S. Securities and Exchange Commission, MAIR, which is publicly traded, claimed to have $95 million in cash and investments on hand and "insignificant long-term debt." MAIR this week asked a court to declare its retention of Mesaba's dividends legitimate, appropriate, and legal.

ALPA reps concede that the $11,000 figure represents the extreme end of the spectrum, and they say it's being "moderated" in negotiations currently underway with Mesaba. But they offer up a few more details about the fiscal lot of the feeder pilot. Pay is contingent on seniority, rank, and the type of plane being piloted. Right now, the upper end of the chart would be an 18-year captain flying a 69-passenger jet for $96.38 an hour. This would drop to $86 if Mesaba gets its way--but it would also be a meaningless concession because Northwest is preparing to take back the planes in question. In effect, this will trigger a string of demotions: The senior pilots will fly smaller planes for less money, in some cases at a lower rank, and so on.

Doubtless white-knuckle flyers will be psyched beyond words to learn that the pilot of their flight had such poor prospects that he or she wants or needs a job that would leave them eligible for food stamps. One can only imagine in-flight liquor sales will skyrocket.

Posted by Beth Hawkins at October 6, 2006 9:04 AM | Comments (7)

 

That's not amore

Filed under: Business

The last time Red's Savoy Pizza made headlines it was because Sen. Norm Coleman's 81-year-old father was discovered having sex with a woman half his age in the eatery's parking lot. Earlier this week, in fact, Norm Sr. pleaded guilty to disorderly conduct and was ordered by Ramsey County District Judge Kathleen Gearin to stay off the pizza parlor's premises for one year.

The impressively active octogenerian is not the only one consciously avoiding Red's Savoy these days however. Hotel Employees and Restaurant Employees Union Local 17 has called for a boycott of the eatery. HERE organizer Martin Goff says the union voluntarily relinquished bargaining rights after a protracted contract dispute with the owner of the restaurant, Red Schoenheider. According to Goff, the employees ratified a new contract in August, but then Schoenheider renegged on the agreement.

The bargaining unit, which also includes employees at the White Bear Lake location of Red's Savoy, has roughly 35 members. HERE has represented workers at the restaurant for more than three decades. Goff says that some pizza cooks at the restaurant earn upwards of $14 an hour, plus health benefits. "They had a contract that was equal to the that of the St. Paul Hotel," he says.

Rather than continue haggling with the owner, Local 17 opted to call for a boycott. There are several union offices located in the immediate neighborhood of Red's Savoy and HERE hoped to put financial pressure on the pizza parlor by convincing their allies in organized labor to stop patronizing the restaurant. Local 17 also hoped to spur action from pro-union employees, but that hasn't happened.

"What we were trying to do was get the workers who did support the union to stand up but they were too afraid," Goff says. "If you don't get off your butt and fight we can't do anything for you."
Red Schoenheider, the 71-year-old owner of the pizza parlor, tells a different story. He says the employees simply didn't want the union representing them anymore. "The problem is that my employees threw 'em out," says Schoenheider, who has owned the restaurant on the eastern edge of downtown St. Paul for 47 years. "They don't like 'em. They don't want 'em any more. [Local] 17 is the dumbest, studidest union you'll ever see in your life."

Schoenheider insists that the boycott has not had an impact on the restaurant's business. "Business is better than ever," he says.

Posted by Paul Demko at October 4, 2006 2:48 PM | Comments (1)

 

No fare

Filed under: Business

USA Today highlights a growing issue at the Minneapolis-St. Paul International airport: Muslim cab drivers refusing to transport people carrying alcohol.

The airport is expected to propose today that drivers who wish to avoid alcohol-toting passengers change the light on their car roofs, possibly to a different color. [Airport spokesman Patrick] Hogan says the move will help let airport employees and customers know which taxis serve alcohol-carrying passengers. Drivers refusing a fare won't have to go to the end of the line. "Airport authorities are not in the business of interpreting sacred texts or dictating anyone's religious choices. ... Our goal is simply to ensure travelers at (the airport) are well served."

Posted by Paul Demko at September 19, 2006 12:47 PM | Comments (2)

 

Pretty good bookstore?

Filed under: Business

Garrison Keillor plans to enter the bookstore business. The novelist and Prairie Home Companion host has been scouting locations in the Selby-Dale neighborhood of St. Paul. He's currently in negotiations to take over the basement spot below Nina's Coffee Cafe, at the intersection of Selby and Western avenues. Keillor confirmed the business venture in an off-hand manner yesterday on the Praire Home Companion web site. In a rambling response to a question about how he spent the summer months, he offered this tidbit: "I decided to open a bookstore." No details are yet available about what type of inventory the new shop will stock. But with the closing of Ruminator Books and Bound to be Read in recent years, St. Paul could certainly use an independent store featuring new books.

Posted by Paul Demko at September 8, 2006 2:03 PM | Comments (4)

 

Xcel Energy customers reap unexpected windfall

Filed under: Business

Close readers of their Xcel Energy bill will have noticed a peculiar item on this month's statement. The payment summary portion of the bill contains a mysterious 22 cent credit. This act of unexpected corporate benevolence is rather vaguely explained later in the statemen