(via NY POST)

JCPenney’s new CEO has come out swinging in 2012 — the ax, that is.

Former Apple exec Ron Johnson — who on Wednesday is slated to unveil a top-secret strategy for a dramatic overhaul of the aging department store — has begun the new year by slashing thousands of jobs nationwide, The Post has learned.

As 52-year-old Johnson replaces Penney’s decades-old use of traditional sales and clearance events with a new “everyday pricing” strategy, sources said he’s firing workers who had long been responsible for re-tagging merchandise and plastering stores with temporary signs and displays.

GETTY IMAGES

Ron Johnson, JCPenney’s new CEO, formerly worked as an executive for Apple.

The fresh bloodbath, announced internally this month and effective today, will affect employees at nearly all of Penney’s 1,200 stores nationwide — in many instances, hitting dozens of workers at a single location, according to insiders.

“As planned, we held over some seasonal holiday hires to help us with the re-ticketing of merchandise,” a JCPenney spokeswoman said.

“As this project comes to a close over the next several weeks, the temporary employment of these seasonal hires will come to an end.”

The firm declined to comment further, but sources said cutbacks are affecting entire teams of permanent staff.

“Many employees were given an option . . . to either leave the company or be moved to a different shift,” according to a source briefed on Penney’s plans. However, some were forced to quit because they couldn’t work the oddball shifts they were offered, the source added.

Insiders said fears of further firings are rippling through the ranks — from store associates to execs at the retailer’s headquarters in Plano, Texas — as Johnson beats the drum about transforming Penney’s sleepy corporate culture.

“They’ve got a lot of industry veterans there, and they’re all worried they’re going to lose their job because they’re over 40,” according to an executive at one Penney supplier.

As previously reported by The Post, Johnson last month announced a 10-year deal with Martha Stewart without bothering to tell Chris Madden, Penney’s own celebrity home-furnishings designer for the past eight years.

Sources said Johnson is being prodded to trim the fat by Penney’s two biggest shareholders — hedge-fund tycoon Bill Ackman and property magnate Steve Roth, who heads real-estate giant Vornado.

Since the duo disclosed big Penney positions more than a year ago, the retailer has shuttered laggard warehouses, outlets and call centers, as well as its catalog business.

Ackman and Roth “are licking their chops to cut costs, and this is an example of what they see as ‘low-hanging fruit,’” a source said of the layoffs slated for today.

Indeed, some investors speculate that Penney will announce across-the-board cuts this week, paring advertising spending and slimming company divisions that design private-label clothing. Last week, the retail chain eliminated weekly circulars for the first time in a year, according to Deutsche Bank analyst Charles Grom, who notes that two years ago Penney spent more than twice the competition on marketing. Penney has cut orders for new inventory by as much as 10 percent, according to several manufacturers.
Read more: http://trade.cc/abpy

A change in attitude from Krugman

“America’s unionized workers, buffeted by layoffs and stagnating wages, face another phenomenon that is increasingly throwing them on the defensive: lockouts.

From the Cooper Tire factory in Findlay, Ohio, to a country club in Southern California and sugar beet processing plants in North Dakota, employers are turning to lockouts to press their unionized workers to grant concessions after contract negotiations deadlock. Even the New York City Opera locked out its orchestra and singers for more than a week before settling the dispute last Wednesday.

Many Americans know about the highly publicized lockouts in professional sports — like last year’s 130-day lockout by the National Football League and the 161-day lockout by the National Basketball Association — but lockouts, once a rarity, have been used in less visible industries as well.

“This is a sign of increased employer militancy,” said Gary Chaison, a professor of industrial relations at Clark University. “Lockouts were once so rare they were almost unheard of. Now, not only are employers increasingly on the offensive and trying to call the shots in bargaining, but they’re backing that up with action — in the form of lockouts.”

Full article

“WASHINGTON (Reuters) – Few U.S. companies plan to step up hiring in the next six months although they do expect the economy to be a bit stronger this year, according to a poll released on Monday.

The National Association for Business Economics’ industry survey found that two-thirds ofrespondents expected no change in employment at their companies over the first half of the year. That was the highest share in recent quarters.

Although the U.S. jobless rate fell to a near three-year low of 8.5 percent in December, fewer businesses said they would hire more workers, compared with the previous industry poll.

The survey, which was conducted between December 15 2011, and January 5 2012, found that 65 percent of respondents expect gross domestic product growth to exceed 2 percent between the fourth quarter of last year and the last quarter of 2012.”

Full article

This is a good thing for the world’s economy….but too much and we call it deflation.

It is nice to think it is always darkest before the dawn, but in the case of Europe it may be dusk going to black night.

Watch it at The New York Times.

“Most everyone agrees the global capitalist system has failed on two main counts–growth and fairness, writes PIMCO CEO Mohammad El-Erian in a column published today in the Financial Times.

He argues that continuing failure to address both (not just one) of these problems not only constitutes a “crisis,” but “raises legitimate questions about the model itself.”

If the system is going to continue, three things have to happen:

• Capitalism is prone to occasional market failures, and the world has to accept this.
• Global imbalances, created by the rise of countries like China, have become unsustainable and must be addressed.
• Global institutions must transform to fairly represent the global population in order to adequately recognize and deal with problems.

He concludes:

Each of these areas can be corrected. Theoretically at least, what has occurred is less a calamity of the system as a whole, and more an issue of how it was run. Yet, four years into the crisis, little has been done to repair the damage coherently and comprehensively and to safeguard the real victims, let alone counter the risk of further costly dislocations. Until this is done, it will be difficult to convince the world that capitalism itself is not the problem.

Read El-Erian’s full editorial here >“

Too much fiscal cutting is killing any opportunity for growth…

The doves are hopeful…

Read the article and see the pretty graphs here.

“But an analysis of the Fed data is still revealing in that it shows the wealth gap, as measured by net worth, is much more extreme than the chasm as measured by income.“

Answer: Sometimes, maybe, depends on the researcher and his methods.

(via)

The United States is becoming less economically competitive versus other nations, with political gridlock and a weak primary education system seen as the main drag, according to a survey released on Wednesday.

In particular, the nation is falling behind emerging market rivals and just keeping pace with other advanced economies, according to a Harvard Business School survey of 9,750 of its alumni in the United States and 121 other countries.

Seventy-one percent of respondents expected the U.S. to become less competitive, less able to compete in the global economy with U.S. firms less able to pay high wages and benefits, the study found.

The findings come at a time when high unemployment is a major concern for Americans, with 23.7 million out-of-work and underemployed, and the economy the top issue ahead of November’s presidential election.

“The U.S. is losing out on business location decisions at an alarming rate” said Michael Porter, a Harvard Business School professor who was a co-author of the study.

U.S. companies, which slashed headcount sharply during the 2007-2009 recession, have been slow to rehire since the downturn’s official end and some have continued to cut. This month, Archer Daniels Midland Co (ADM.N), Kraft Foods Inc (KFT.N) and Novartis AG NOVN.XV all said they would be cutting U.S. jobs this year.

Survey respondents said they remained more likely to move operations out of the United States than back in. Of 1,005 who considered offshoring facilities in the past year, 51 percent decided to move versus just 10 percent who opted to keep their facilities in the country, with the balance not yet decided.

Respondents, graduates of the prestigious business school who were polled from October 4 through November 4, were particularly concerned about how the United States was shaping up versus emerging nations such as China, Brazil and India, with 66 percent saying the United States was falling behind.

WEAK POINTS

Among respondents who had decided to move operations out of the United States over the past year, 70 percent cited lower wages as the reason they chose a new location, pointing to what is widely seen as emerging markets’ main advantage.

While the United States held up better compared to other advanced economies, with about 70 percent saying it was keeping pace competitively, 21 percent said the U.S. was also falling behind other wealthy countries, such as those in Western Europe and Japan.

The United States’ main disadvantages compared with other advanced economies were the complexity of its tax code, the ineffectiveness of its political system and the weakness of its educational system from kindergarten through high school.

Higher education fared better, with respondents citing high-quality universities as the nation’s top competitive advantage.

Asked what the U.S. government could do to improve its competitive position, respondents top recommendations were to simplify the tax code, reform immigration policies and reduce the corporate tax rate.

WASHINGTON (AP) — Increased interest by potential buyers left U.S. homebuilders less pessimistic about the housing market for the fourth straight month in January. But tighter lending standards are still keeping many of those buyers from purchasing new homes.

The National Association of Home Builders/Wells Fargo builder sentiment index rose four points to 25 in January. That’s the highest level since June 2007. It’s just the third time the index has been at 20 or above in two years.

Still, any reading below 50 indicates negative sentiment about the housing market. The index hasn’t reached 50 since April 2006, the peak of the housing boom.

Last year, the number of people who bought new homes fell to its lowest level on records going back nearly a half-century. The figure for 2011 will likely be below that level.

Builders are struggling to compete with foreclosures, which have forced down prices of previously occupied homes. And many buyers are finding it hard to qualify for loans or meet higher required down payments.

A good sign for the economy ..no?

We have gone from a competitive manufacturing edge to a low wage competitive society….

According to a French cement company’s earnings demand for cement has fallen sharply… 

The Euro crisis is to blame for lower estimates.