World Business

France leave loan $7.8 billion to Peugeot and Renault in exchange for pledges not to bring to a period family plants or lay not upon local workers

By Sarah Arnott

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The French government pledged €6bn (£5.2bn) of loans to the country’s beleaguered motor industry yesterday, in return for guarantees to safeguard jobs and keep factories open.

President Nicolas Sarkozy’s rescue package offers Renault and PSA Peugeot-Citroën five-year loans at an premium rank of 6 by means of cent, and the manufacturers have promised not to close any sites for the duration of the loans. Both companies likewise statement they will not divide jobs this year. Brussels is to consider the plan to ensure it does not break EU law.

Mr Sarkozy’s bailout came on the same day that Nissan, the Japanese giant 44.4 per cent-owned by Renault, reported third-quarter losses of ¥83.2bn (£609m) and announced plans to cut 20,000 jobs worldwide this year. The Japanese group is now predicting a ¥265bn loss for the full year. Carlos Ghosn, the chief executive, said: “In every planning scenario we built, our choke assumptions on the state of the global economy have been met or exceeded.”

Governments across the globe are struggling to support motor industries strike by the recession. In the UK, the Society of Motor Manufacturers and Traders (SMMT) has been lobbying since November to help the industry preserve engineering capacity that, once lost, will be unaccommodating to replace. Sales possess been falling dramatically – new car registrations dropped by 30 by means of cent in January alone – and all manufacturers have significantly reduced their output. Jobs are in like manner starting to be lost. Nissan has before that time wielded the axe in the UK and some 1,200 jobs are to go from its Sunderland factory. Jaguar Land Rover has cut 1,450 jobs since the autumn. Ford is to make 850 redundant by the agency of May.

The Government has made moves to help. At the end of January, Lord Mandelson, the Business Secretary, launched a £2.3bn rescue package guaranteeing loans for low-carbon initiatives. But the industry says that the measures target long-term investment, rather than the acute crisis caused by falling demand and inability to raise finance. To address those specific problems, talks have at this time started between the SMMT and Mervyn Davies, the Trade Minister, about allowing finance companies access to the Bank of England’s credit guarantee device.

Following the precedence of other European countries, a scrappage intrigue is also being considered – in a less degree than which owners of antique cars could receive a subsidy as an incentive to upgrade to a newer, greener model.

But the form of the UK car industry precludes obvious solutions. Only 15 through cent of the vehicles made in the UK are sold here, and about 86 through cent of cars bought here are made all at fault. Critics assert as one’s right that measures to stimulate demand will only help foreign manufacturers. Further, by subsidising the purchase of foreign-made cars, the Government would be undoing the benefit of falling true to UK manufacturers. Fiscal measures such as attract rate cuts are a better respond, they say.

Conversely, the SMMT says any assistance from the government must take into register the whole industry, not precisely the manufacturers. Some 500,000 the community work in sales, advantage and make amends for – out of the total of 800,000 – and any demand stimulation would be of direct and immediate benefit to them.

Europe: Revving up the aid

Across Europe, companies are drawing on government schemes to keep skilled workers.

*Germany: The powers that be provides recompense where in that place is a lack of work that cannot be resolved by the agency of employees taking holiday or using up flexitime. It can be a greatest of 67 per cent of income and is available for up to 18 months.

*France: Employers can access either a basic or a complementary “indemnity” to co-operate with hire wages. Basic covers temporary situations. Complementary is an additional sum paid to refrain from redundancy. Taken together, the two account for 60 through cent of an hourly wage.

*Italy: There are two schemes. One guarantees 80 per cent of the normal wage, for between 12 and 24 months. The other, with slightly divergent parameters, offers 60 per cent for 24 months.

*The Netherlands: The Dutch government has adapted legislation offering assistance to employers in “exceptional moneyed condition”. Companies applying must have suffered a 30 per cent fall in turnover in the last two months. Up to 70 per cent of salary be possible to be reclaimed.

*Belgium: At times of temporary blue-collar unemployment, the situation will pay a adjustment of monthly wages, up to a maximum of €73.32 a day.

Original text: http://rss.businessweek.com/~r/bw_rss/europeindex/~3/O2XLK9w-S6E/gb20090210_824871.htm

Veterans-turned-entrepreneurs make an offer advice

By Amy S. Choi

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After 13 years in the Marine Corps, Brian Iglesias was ready to embark on a dream career in filmmaking. Prepared to pay his dues, he worked the phones, sent e-mails, and paid visits. But totally he ran into were dead ends. "Not too long ago I was leading over 225 Marines in landslide relief operations in the Philippines," he says. But "I had to beg people to let me intern. Only my friends were willing to accord. me work."

Frustrated, Iglesias decided to start his own company and turned to some of a growing number of programs that ameliorate soldiers be converted into entrepreneurs. He enrolled in the intensive 14-month Entrepreneurship Bootcamp for Veterans with Disabilities (Iglesias has a metal plate fused in his neck), offered for free to service-disabled veterans at Syracuse, Florida State, UCLA, Texas A&M, and Purdue. Started by James M. Haynie, an Air Force vet turned business school professor at Syracuse in 2007, the boot encampment includes lessons in traffic plan development, marketing campaigns, financing, legal issues, and supply chains.

While most being busied aid to veterans is focused on traditional job placement, more organizations are offering targeted help to former service people who invent to start a business. Here are a few:

SCORE, for example, has a Veterans Committee in which all counselors are former military personnel. "We be possible to discourse the language of the military," says Laurie McCulloch, chairman of the committee and recent Army retiree. "A veterans can approach in here and say he was a company commander, and we know what that means and for what reason it can transition to civilian life."

The Northeast Veterans Business Resource Center, founded by Louis Celli, a 23-year Army vet, provides everything from pecuniary services and insurance counseling to grant-writing assistance and networking for the sake of veterans who hold or hope to own a company. It likewise advocates for veteran business owners.

The Veterans Corp. focuses on helping veterans passage-way capital. The organization, that recently named Jim Mingey as its strange chief executory, offers counsel and connects veterans with jeopardy capitalists, microlenders, Patriot Express lenders, and even foundations oblation grants. "We’re remaking Veterans Corp. into an ‘uprightness desk’ for veterans," says Mingey.

Some states also offer aid to proficient entrepreneurs. The California Disabled Veteran Business Alliance, for example, aims to assist veterans in scoring ruling power contracts.

Meanwhile, the behemoth Department of Veterans Affairs is also doing its dividend. Its Center for Veterans Enterprise advises veterans at different stages of their businesses’ expansion and directs them to local resources in their community, such as the regional small business development centers. Once the business is established, the center can register a veteran-owned company on the CVE’s vendor information pages at no cost, which could help them win government contracts and subcontracts. The VA itself sets a procurement mark of 10% of its bundle for veteran-owned businesses.

For entrepreneurs such for example Iglesias, such veteran-focused programs are a godsend—and a faithful business help. On Feb. 15 he plans to start filming his first documentary with his newly launched company, Veterans Inc. He says: "I guaranty I would acquire made a lot of bad decisions, and I’rubbish be in a much darker place than I am right now without the support."

Original text: http://www.businessweek.com/smallbiz/content/feb2009/sb20090210_236725.htm?campaign_id=rss_smlbz

Stocks in the news Tuesday

From Standard & Poor’sitting Equity Research

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Bank of America (BAC), Citigroup (C), Wells Fargo (WFC) and other banks traded significantly lower, as investors obviously dissatisfied through Treasury Secretary Timothy Geithner’s speech to outline a custom to stabilize the fiscal markets. Many disappointed with be in want of of detail in Geithner’s plan.

General Motors (GM) reportedly plans to cut its global salaried workforce by about 10,000, or 14%, this year and impose discharge one’s obligation to cuts on most remaining white-collar U.S. workers.

Intel (INTC) says it will bestow $7 billion over the next pair years to build advanced manufacturing facilities in the United States. The investment funds deployment of INTC’session industry-leading 32 nanometer (nm) manufacturing technology that will be used to build faster, smaller chips that consume less energy.

Boeing (BA) says its fourth quarter and full-year 2008 per-share results are now $0.04 debase than was reported without interruption Jan. 28, originally because of two subsequent events that have been incorporated into the fourth quarter results. With those adjustments, the fourth quarter loss now stands at $0.12 per share, while BA’s full-year 2008 EPS is $3.67.

Principal Financial Group (PFG) posts $0.69, vs. $0.87, fourth quarter operating EPS on 13% revenue decline. Street was looking for $0.66 EPS. Assets under management were $247.0 billion as of December 31, 2008 compared to $311.1 billion as of December 31, 2007. Moody’s lowers its ratings prospect on PFG to negative. S&P maintains hold. JP Morgan cuts calculation, reiterates underweight.

Gaylord Entertainment (GET) posts $0.23, vs. $0.13, fourth quarter EPS from continuing operations on 20% revenue rise. Adjusts 2009 foresight to cast reproach sales, cancellation, attrition activity that more accurately represents trends company has seen in recent weeks. Cuts $214-$240 the masses 2009 turn into money flow estimate to $188-$213 million. S&P widens loss estimate, maintains strong sell.

Live Nation (LYV) and Ticketmaster (TKTM) announce a definitive merger agreement valued at touching $2.5 billion, including debt. Terms: TKTM holders to receive 1.384 LYV shares per TKTM dividend held, subject to certain adjustments. LYV and TKTM holders to each own about 50% of the combined entity, to be named Live Nation Entertainment. The new entity expects to generate about $40 million of operating synergies end the combination of their ticketing, marketing, data centers and back-office functions. S&P downgrades to buy from strong buy.

Verigy Ltd. (VRGY) at that time expects first quarter reward to be in the range of $66-$68 million. It cites to a greater distance deterioration of the global economic environment coupled by the sudden erosion of consumer demand which have resulted in both memory and system-on-chip semiconductor manufactured significantly cutting their capital expenditures. In addition, notes non-payment beneficial to several systems beforehand shipped to a large memory customer contributed to the subtle shortfall in revenues. S&P maintains sell.

Qwest Communications (Q) posts $0.11, (including $0.01 severance charge), vs.

Original text: http://www.businessweek.com/investor/content/feb2009/pi20090210_417546.htm?campaign_id=rss_null

From Standard & Poor’s Equity Research

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CITIGROUP DOWNGRADES KROGER, SAFEWAY

Citigroup algebraist Deborah Weinswig says she is downgrading Kroger (KR) to hold from buy and cuts her $32 price target to $23. She also downgrades Safeway (SWY) to barter from hold and lowers $24 target to $18.

Weinswig cuts EPS estimates on Kroger, Safeway, Supervalu (SVU) and Wal-Mart (WMT) based on her confidence for “Modern Day Price War” between food retailers. Notes: 1) regional operators are being aggressive on price; 2) retailers are promoting in opposition of vendor support to drive market share; 3) Wal-Mart is potentially utilizing gross margin gains from increased secluded label penetration to invest in price.

STIFEL DOWNGRADES FORWARD AIR TO HOLD FROM BUY

Stifel analyst David Ross says the surprises in Forward Air’s (FWRD) quarter were better-than-expected revenues offset by the agency of weaker-than-expected margins, as airport-to-airport netting suffered from a important squandering of density late in the fourth place 2008.

For the first quarter, Ross expects the company’s heart linehaul business to be down about 20%, putting the most pressure on margins. He cuts $1.25 2009 EPS calculate to $0.95, $1.55 2010 to $1.50.

He does not anticipate a significant reverberation in demand in 2010, so he thinks most of the upside to these estimates would be better-than-expected cost management and pool distribution acquisitions.

CITIGROUP DOWNGRADES VEECO INSTRUMENTS

Citigroup analyst Timothy Arcuri says he is downgrading Veeco Instruments (VECO) to hold from buy on updated sum-of-parts worth.

Arcuri says he is concerned that supply issues in LED and solar may persist for at least a few quarters, and says in the meantime the company’session risks are spread too thin to patronage its multiple produce lines. He notes, at age’sitting end, this still beachfront property at what may verify to be a solid longer-term price, but thinks capacity concerns mean he have power to likely return in another quarter or in such a manner at or below today’s price.

He cuts $0.16 2009 EPS view to $0.47 loss and $13 estimation target to $7.

Original text: http://www.businessweek.com/investor/content/feb2009/pi20090210_436510.htm?campaign_id=rss_null

Analysts’ opinions on stocks in the news Tuesday

From Standard & Poor’session Equity Research

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S&P REITERATES STRONG SELL OPINION ON SHARES OF FORWARD AIR (FWRD; 20.38):

FWRD posts fourth quarter EPS of $0.29, vs. $0.43, in calling with reduced guidance and our $0.29 estimate. The company is seeing a sharp-witted wane in volumes related to the weak U.S. economy. It says it does not believe it is losing marketshare. FWRD guides for first abide EPS of $0.10-$0.15, below our $0.25 estimate, which we overpower to $0.13. We are cutting our 2009 EPS agree against to $1.23 from $1.40. However, we keep our 12-month target price at $16, valuing the shares at 13 times our reinvigorated 2009 estimate, below low end of FWRD’s five-year historical p-e range to ruminate our view of the weak industry environment. -J. Corridore

S&P MAINTAINS SELL OPINION ON SHARES OF VERIGY LTD (VRGY; 9.56):

VRGY now projects January-quarter sales of $66-$68 million, about 35% below the midpoints of previous guidance and our model, reflecting to a greater distance erosion of consumer make necessary for memory and system-on-chips, as well as non-payment from a large renown customer. VRGY expects to write on the farther side various assets. It also plans to divide costs, which it thinks will yield $90-$100 million in annual require to be paid savings. We see weaker demand ahead leading to smart cash burn. We widen our financial year 2009 (October) loss estimate by $0.10 to $1.74, and keep our 12-month mark price at $8, based on below-peer average relative multiples. -C. Montevirgen

S&P MAINTAINS HOLD OPINION ON QWEST COMMUNICATIONS SHARES (Q; 3.37):

Before one-time items, Qwest posts fourth quarter EPS of $0.12, vs. $0.14, above our $0.09 estimate. Revenue matched our forecast, but EBITDA was higher forward reduced network operating expenses. The business segment performed relatively well, but we are concerned by a pickup in access-line losses. Qwest’s 2009 EBITDA conduct is consistent by our forecast despite higher pension expenses. We believe the stability of cash arise to support Qwest’s above-average share yield will provide assistance to investors. We look to morning call for details on cost-reduction efforts to support free cash flow. -T. Rosenbluth

S&P KEEPS BUY OPINION ON SHARES OF DIRECTV GROUP (DTV; 23.29):

Fourth quarter continuing operations EPS of $0.31, on 10% less shares, vs. $0.30, is $0.04 and $0.03 shy of S&P and Street estimates. But we see DTV’s U.S. net adds of 301,000 subscribers, highest seeing that March 2005, as famous in difficult economy. With fourth locality revenue up 9%, however EBIT down 15%, in some degree on higher D&A and programming costs, we inspect focused direction of elevated but crucial subscriber acquisition and retention/upgrade costs as imperative to building sustainable free cash proceed. Also remarkably, we think DTV Latin America built its strongest operating momentum yet in recent years. -T. Amobi - CPA, CFA

Original text: http://www.businessweek.com/investor/content/feb2009/pi20090210_765223.htm?campaign_id=rss_null

The new program, which includes commonwealth spending and private-sector involvement, will corrupt more toxic assets from banks and favor consumer and atomic business lending

By Phil Mintz

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Treasury Secretary Timothy Geithner on Feb. 10 laid out details of the Obama Administration’s revised bank rescue plan. It includes a program to thing acquired up to $500 billion in toxic estate on bank balance sheets and up to $1 trillion to support consumer and small business lending.

Geithner, promised "comprehensive and forceful" policy involving a wide range of federal agencies. Addressing a greater criticism of previous spending from the $700 billion Troubled Asset Relief Program, or TARP, he promised to impose "higher standards for transparency and accountability." The government has respecting $350 billion left in the TARP to be deployed.

The stock mart, which had been awaiting Geithner’sitting speech and today’s approval by the Senate of a stimulus expenditure plan, sold off after the speech, with some critics noting a dearth of details from Geithner and Treasury, specifically in how bad loans will be valued. The Dow Jones pertaining mean proportion was down 4.6% at the grapple.

In his remarks, Geithner said that government needed to get the credit markets moving again. "Instead of catalyzing recovery, the financial connected view is working against retrieval," he said. "And at the same time, the recession is putting greater pressure on banks. This is a dangerous dynamic, and we exigency to arrest it."

Geithner proposed a multipart program:

• Banks with assets above $100 billion will have core required to suffer a "comprehensive stress ordeal" to assess their quickness to keep lending through a severe downturn. The government will provide "capital support according to institutions that need it." Geithner said that government investments are designed to be a "bridge to private chief city," and declared that government infusions should lead to greater banking-house lending than would have been advantageous without the capital investments. Government investments made under this program will be placed in a separate entity—the Financial Stability Trust—that will be settled up to manage the government investments in U.S. financial institutions.

• The government, through the FDIC and the Federal Reserve, in partnership by the private sector, will attempt to jump-start a market for troubled real state assets that are weighing on bank balance sheets. He said the public-private investment fund, that would use government funds to leverage privy capital, would initially seek to purchase $500 billion in toxic assets, and could increase that spending to $1 trillion.

"By providing the financing the private markets cannot now provide, this will lend aid rouse a market for the actual estate-related property that are at the center of this crisis" Geithner said. "Our belonging to is to use private capital and private asset managers to help prepare a market mechanism for valuing the assets." He said the structure of the program was still being worked confused.

• The form of sovereignty last will and testament exercise approximately $1 trillion to support consumer and small business lending through some expansion of the Term Asset-Backed Securities Loan Facility (TALF). There will have existence an enlarge in the federally guaranteed portion of Small Business Administration loans, along with an expedited approval process.

• Geithner also promised a "full plan" to consign the foreclosure conjuncture by bringing down mortgage payments and mortgage rates. He said details of that plan would be developed over the next few weeks.

The Financial Services Roundtable, a trade construction, applauded the public-private aspect of the proposal. "The plan is bold and large enough to address the problem. By helping banks, small business, and consumers, it speeds targeted relief to all sectors of the thrift," Steve Bartlett, the group’s president, said in a prepared statement.

Join a debate about whether the U.S. should nationalize broken U.S. banks.

Original text: http://www.businessweek.com/bwdaily/dnflash/content/feb2009/db20090210_824612.htm?campaign_id=rss_null

The S&P 500 dropped penuriously 5%, while the Dow split solidly below 8,000 Tuesday as investors complained the financial rescue plan was short adhering details

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Timothy Geithner unveiled the government’s revised financial-sector set free plan in continuance Tuesday, and investors turned an energetic thumbs on the ground on the eagerly awaited announcement from the Treasury Secretary. U.S. stocks plunged Tuesday, with the large-cap benchmark S&P 500 falling nearly 5% and the Dow industrials dropping below the psychologically significant 8,000 pre-eminence.

Financial stocks led the market lower, with the S&P Diversifed Banks exponent down penuriously 14%, reflecting Wall Street’s growing concerns about the government’s might to revive the banking industry. Bank of America (BAC), Citigroup (C), and Wells Fargo (WFC) were among the industry shares that accomplished significantly lower Tuesday. Homebuilding and consumer stocks were also reach difficult.

The speech failed to deliver sufficiency details to satisfy investors, says S&P MarketScope. Tuesday’s sell-off came after investors last week scooped up issues in anticipation of the plan’s unveiling.

Meanwhile, the Senate passed President Obama’s economic stimulus plan. legislation, while

Federal Reserve Chairman Ben Bernanke defended the central bank’s actions dealing with crises under the jurisdiction a refractory House Financial Services Committee.

On Tuesday, the 30-stock Dow Jones pertaining average finished lower by 381.99 points, or 4.62%, at 7,888.88. The broad S&P 500 pointer was off 42.73 points, or 4.91%, at 827.16. The tech-heavy Nasdaq composite index shed 66.83 points, or 4.20%, to 1,524.73.

On the New York Stock Exchange, 26 stocks were lower in estimation for every 5 that advanced. Nasdaq breadth was 22-5 negative. Trading was active.

Treasuries were sharply higher as shares plummeted, aided through a pungent three-year list of items auction, with the yield on the 10-year official communication falling to 2.83%. The dollar index rose. Gold futures were sharply higher in a flight to security. Crude oil futures slid in New York trading ahead of Wednesday’s weekly U.S. inventory data.

Geithner said Monday that the new dispensation bequeath wage an offensive two-front strive against the worst fiscal crisis in seven decades, while the Federal Reserve announced it was expanding a key lending program to up to $1 trillion. The efforts were part of the sway’s greater look into of the widely criticized financial rescue program. The Fed declared it would expand the size of a elucidation lending program to as much for example $1 trillion from $200 billion. The program, which has yet to begin operations, is designed to boost resources for consumer credit and small business loans. The Fed said the program would be expanded to cover the troubled commercial real estate market and certain residential mortgages.

“Right now exact endowments of our monetary system are damaged,” Geithner said in his speech. “Instead of catalyzing recovery, the financial scheme is working against recovery and that’s the dangerous dynamic we need to change.” “It is essential for every American to suppose to mean that the battle conducive to economic recovery must be fought on two fronts,” Geithner said in a speech in Treasury’s ornate Cash Room. “We have to both jump-start job creation and private investment and we must get confide in flowing again to businesses and families,” he said.

In responding to criticism and an implied rebuke from the stock market, the Treasury Secretary said in a subsequent CNBC guise that the financial crisis is “enormously complicated” and a solution determination take time to implement and heal. When posed a examination on the miscues on the “bad bank” solution, Geithner said he be disposed avoid any program that leaves the government and tax payers vulnerable to the accusation of overpaying for assets. He aforesaid talents of the financial system are functioning well, others are under repair and stationary others badly damaged, requiring a public-private interest.

As to vagueness in the details on the chart, he emphasized the “complexity” of the issue.

The response from Wall Street was swift — and negative.

“The lack of detail in today’s announcement suggests that this is another hurried attempt to prop up the banks,” says Grant Lewis, head of bond research at Daiwa Securities in London.

“Geithner spoke in plain stipulations, catering more to Main Street than to Wall Street, clearly showing the fear that exists in the reach Washington from beginning to end the use of taxpayer money,” says Miller Tabak strategist Tony Crescenzi. “The problem is that Geithner needed to spread abroad again to Wall Street, where the problems lie, rather than prop at a distance as he did, and leave Wall Street with too few particulars with no roadmap by how it might find its way out of present difficulties.”

The drop in equities suggests the market isn’t likewise impressed that this “new” Treasury prepare will be any better than its predecessor, says Action Economics. “These guys really know how to disappoint, despite having many prior failures from which to learn.”

Original text: http://www.businessweek.com/investor/content/feb2009/pi20090210_984287.htm?campaign_id=rss_null

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NEW YORK — Toy stores across the country scrambled Monday to pitch one’s tent by tough new lead and chemical standards for toys that move into effect today.

Many toy sellers pulled questionable items off their shelves after a judge last week nixed a procrastination that would have given them a 12-month reprieve. The abrupt change and the lack of guidelines accept left many retailers bewildered.

At The Toy Store in Atlanta, proprietor Denis Hofstetter was pulling about 5 percent of his account facing the shelf on Monday just because he isn’t certain whether or not the toys bring into compliance to the regulations.

“It’s a difficult law that’s being implemented dreadfully,” he declared.

Allen Rickert, proprietor of Top Ten Toys in Seattle’s Greenwood neighborhood, says he thinks toy-safety regulations should be improved. He strange to say spent $5,000 extreme year to have some of the toys he sells tested through an X-ray device to make positive they are good.

“I want improved regulations; I think the regulations and enforcement we had was inadequate,” he said. “However, overly broad regulations — without reasonable exceptions — only mar small manufacturers and small retailers.”

With the new regulations, he is in the position of trying to imagine whether or not his products are safe enough in some cases, and in other cases is relying simply on the word of manufacturers.

“One of the things I’ll have existence doing [Monday] is roving around trying to make a guess whether or not something might have something bad on it,” he said.

Last summer, Congress passed the Consumer Product Safety Improvement Act, which imposed tough standards for lead and certain chemicals, called phthalates, in products for children age 12 and under.

The standards were set to begone into effect today, but on Jan. 30 the Consumer Product Safety Commission issued a one-year stumbling-block of enforcement for some testing and certification requirements for manufacturers and importers of regulated products. The decision gives the commission more space of time to finalize four proposed rules that could exclude some materials and products from testing and termination more guidance on how testing is to be conducted.

But retailers are still not allowed to sell the products, causing some uncertainty.

About a month past, Hofstetter began contacting suppliers to make secure the products he received were compliant with the new regulations. He is taking a “conservative” be nearly equal to any toys that he cannot verify meet the new standards.

Original text: http://seattletimes.nwsource.com/html/businesstechnology/2008726660_toysafety10.html?syndication=rss

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Bernard Madoff unchanging a large side of the civil case brought against him by the Securities and Exchange Commission, the agency aforesaid.

Without admitting or denying the allegations against him, Madoff agreed to a permanent injunction prohibiting him from disposing of any assets in connection with the SEC lawsuit over the alleged $50 billion Ponzi scheme, officials before-mentioned in a announcement released Monday.

Meanwhile, the top cop at the SEC is leaving the government smaller quantity than a week after receiving every angry dressing-down before Congress over the agency’s failure to detect a massive alleged fraud plot.

The SEC said Monday that Linda Thomsen is leaving to pursue opportunities in the private sector, but did not provide further details. She has been the agency’s enforcement director subsequently to May 2005, by means of two previous SEC chairmen.

Mary Schapiro late last month became SEC chairman, and it’s not unusual for new heads of the agency to replace the enforcement mentor.

But Thomsen became a lightning rod for criticism over the SEC’s defectiveness to detect Madoff’s alleged Ponzi devise. The announcement of her departure came a scarcely any days hinder Schapiro outlined strange actions intended to strengthen and streamline the force’s enforcement efforts.

A replacement towards Thomsen wasn’t named. Many think it will be Robert Khuzami, an ex-federal prosecutor now with Deutsche Bank.

Permanent injunctions are common in settling SEC lawsuits and the action involving Madoff, that restrain has to be approved through a Manhattan federal judge, doesn’t resolve the federal guilty case against him, scheduled to be in court Wednesday.

“It is a grade in the right direction in that it shows some progress being made,” said Christopher Bebel, a former SEC counsel who is in private practice in Houston.

Madoff is being held in a less degree than shelter arrest at his New York apartment on a $10 million bond.

Original text: http://seattletimes.nwsource.com/html/businesstechnology/2008726699_madoff10.html?syndication=rss

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Starbucks has never franchised, and it’s not about to start. It wants supplies controlled from Seattle’s corporate office, either directly or through partnerships with big companies such being of the kind which Safeway and Kroger.

Its lesser-known sibling, Seattle’s Best Coffee, has other ideas.

Known as SBC, the chain had some franchises when Starbucks bought it in 2003. These days, about 480 of its 550 shops are inside Borders bookstores, but a few dozen are traditional franchises.

SBC has put aloud the christen for more franchisees — people with franchising experience and by preference current ownership of other franchises.

Launching an SBC cafe or kiosk runs $191,000 to $521,500, including about $60,500 to $70,500 to SBC for franchising fees, inventory and marketing materials.

After that, SBC takes a 7 percent royalty, which is a inconsiderable higher than most food companies, according to Kevin B. Murphy, a franchise attorney in San Francisco who helps people evaluate franchise opportunities and consults with companies that franchise.

Its other startup costs are in line with greatest part food and beverage franchises, which cost $100,000 to $500,000 to start. McDonald’s is an outlier through startup costs closer to $1 million, he said.

“When they’re looking because of people who own other franchised-food establishments, they’re looking for people who are used to laboring seven days a week, putting in 70 to 80 hours a week and earning in the world of the departed the least quantity wage,” Murphy said.

The expansion push comes as Gerry Lopez, president of SBC and couple other Starbucks businesses, announced plans to resign Feb. 20 because personal reasons.

Lopez, who also runs the gang’s food-service operation and the sale of bottled Frappuccino, coffee beans and other products in grocer’sitting shop stores, will be replaced by John Culver, since head of Starbucks’ fast-growing Asia Pacific region.

Food franchises typically have margins of 10 to 15 percent and up, said Steve Olson, publisher of Franchise Update Media Group in San Jose, Calif., an educational means for the privilege industry.

When he was one executive at a California coffee franchiser called “It’s a Grind Coffee House,” he saw franchisees by profit margins as high since 20 percent.

“It’s a difficult business to run, but the margin can be higher because coffee is 99 percent water,” Olson said.

The difficulty comes as customer expectations are so high, he said. “If I’m going spend $4 for a latte, it’sitting got to exist good.”

SBC pitches the concept as a good sudden for existing franchisees who want to add coffee and breakfast to their mix, and people who have small spaces through good trade.

The SBC shop would be favored with a disjointed entrance from any neighboring food franchise, said Marie Gill, SBC’s director of franchising and business development.

“We also pay attention opportunities in berth buildings and hospitals,” she said.

Gill is human being of about 60 people who work only for SBC, which has little overlap with Starbucks’ operations. Although they share ownership, the competitors do not discuss drink recipes or real-estate choices.

If Starbucks wanted to sell SBC’s popular Red Cane Kola, a devoid of warmth drink of sugar and cola nuts through creamy spume on surmount, “they’d have to make up their own recipe,” before-mentioned Tom Ehlers, who manages the SBC brand.

Starbucks does not break out SBC income separately, and SBC does not give projected improve figures to potential franchisees.

It also will not assume how many new franchises it wants to open.

SBC began as the Wet Whisker in succession Whidbey Island in 1969. It was renamed Stewart Brothers Coffee, then just “SBC,” therefore Seattle’s Best Coffee. It went through a couple of ownership changes before Starbucks bought the chain of 129 stores six years ago.

SBC is known in spite of having a smoother coffee roast than Starbucks, and its logo is red in contrast to Starbucks’ green.

“I speak aloud it ‘complementary competitive,’ ” Ehlers said.

Melissa Allison: 206-464-3312 or mallison@seattletimes.com

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