http://www.havilandusa.com/index.php en johnb@havilandusa.com Copyright 2012 2012-01-26T19:02:39+00:00 http://www.havilandusa.com/index.php/news/dallas-fort-worth-area-may-face-permit-ban/ http://www.havilandusa.com/index.php/news/dallas-fort-worth-area-may-face-permit-ban/#When:19:02:39Z The North Texas Municipal Water District (NTMWD) is expected to decide whether to declare a Stage 4 drought, which would mean no permits may be granted for private residential pools and spas. The water district currently is in Stage 3, meaning pools cannot be drained and refilled.  The possibility was raised after a number of lakes and reservoirs had receded to approximately 50 percent of capacity.It’s a particularly bitter pill for the industry because the district contains some of the state’s largest pool markets, including Dallas/Fort Worth and suburban communities such as Frisco, Plano and McKinney. “Dallas is one of the fastest-growing metroplexes in the world. That’s part of the reason for the water demand,” said Tom Dittman, owner of Palm Springs Pool Service in Garland, Texas, and president of the North Texas Chapter of the Association of Pool & Spa Professionals.It is estimated that banning permits would cost the industry some $175 million in business, based on approximately 3,500 pools per year at an average price of $50,000. “For companies up here, it would be a devastating blow,” said Charles Barnes, president of Riverbend Sandler Pools, a Pool & Spa News Top Builder in Plano, Texas. “Most would not be able to stay in business. There are some of us who have big service and maintenance divisions that could continue on, but a company that is just in the business of building new pools would cease to exist. It would be a crippling blow to an industry that’s just coming off the mat from 2008.”Amid this possibility, the industry is banding together through a variety of organizations, including the Aquatic Professionals Education Council in Texas, the Independent Pool & Spa Service Association and APSP. Industry contractors and lobbyists are developing a case and seeking input from other regions that have waged similar battles, such as Georgia and the Northeast. “I’ve never seen our organization here come together like this,” said Ron Robertson, president of Robertson Pools, a Pool & Spa News Top Builder based in Coppell, Texas. “Everybody’s coming out of the woodwork for this one.”If the restrictions are imposed, the water district has said it will recommend postponing the plan’s start date until June 1. The delay is due to predictions that more rain is on the way, as well as a recent deal allowing the NTMWD to purchase water from another source. The deferral also would provide officials more time to monitor the situation.Though a postponement is better than nothing, its start date would fall mid-season. In response, the industry is setting its sights higher, namely pressing officials to remove permit restrictions from the drought plan altogether, as was achieved in Georgia in 2007. “We’re putting together a presentation, verbal and written, so that we can educate and inform them of the economic consequences of that restriction, as well as try to [correct] whatever assumptions they have about water usage that may not be correct,” Dittman said. No matter what category the NTMWD declares, individual municipalities still can modify plans and offer variances. And if a Stage 4 does come to pass, that could require local industry members to plead their cases before an even broader range of authorities. Food & Pharma, Water Treatment, Pool & Spa, Plastic Hoses 2012-01-26T19:02:39+00:00 http://www.havilandusa.com/index.php/news/for-intrigue-malaria-drug-gets-the-prize/ http://www.havilandusa.com/index.php/news/for-intrigue-malaria-drug-gets-the-prize/#When:13:33:15Z The Chinese drug artemisinin has been hailed as one of the greatest advances in fighting malaria, the scourge of the tropics, since the discovery of quinine centuries ago. Related Health Guide: Malaria Enlarge This Image Luigi Rignanese LATE BLOOMER Sweet wormwood provides artemisinin, discovered decades ago in China. Artemisinin’s discovery is being talked about as a candidate for a Nobel Prize in Medicine. Millions of American taxpayer dollars are spent on it for Africa every year. But few people realize that in one of the paradoxes of history, the drug was discovered thanks to Mao Zedong, who was acting to help the North Vietnamese in their jungle war against the Americans. Or that it languished for 30 years thanks to China’s isolation and the indifference of Western donors, health agencies and drug companies. Now that story is coming out. But as happens so often in science, versions vary, and multiple contributors are fighting over the laurels. That became particularly clear in September, when one of the Lasker Awards — sometimes called the “American Nobels” — went to a single one of the hundreds of Chinese scientists once engaged in the development of the drug. Mao’s role was simple. In the 1960s, he got an appeal from North Vietnam: Its fighters were dying because local malaria had become resistant to all known drugs. He ordered his top scientists to help. But it wasn’t easy. The Cultural Revolution was reeling out of control, and intellectuals, including scientists, were being publicly humiliated, forced to labor on collective farms or even driven to suicide. However, because the order came from Mao himself and he put the army in charge, the project was sheltered. Over the next 14 years, 500 scientists from 60 military and civilian institutes flocked to it. Meanwhile, thousands of American soldiers in Vietnam were also getting malaria, and the Walter Reed Army Institute of Research began its own drug hunt. That effort ultimately produced mefloquine, later sold under the brand name Lariam. While powerful, mefloquine has serious drawbacks, including nightmares and paranoia. In 2003, dozens of American Marines in Liberia got malaria after refusing to take pills because of military scuttlebutt that several Special Forces soldiers who killed their wives after returning home from Afghanistan in 2002 had been driven insane by the drug. China’s effort formally began at a meeting on May 23, 1967, and was code-named Project 523, for the date. Researchers pursued two paths. One group screened 40,000 known chemicals. The second searched the traditional medicine literature and sent envoys into rural villages to ask herbal healers for their secret fever cures. One herb, qinghao, was mentioned on tomb carvings as far back as 168 B.C. and praised on medical scrolls through the centuries, up to the 1798 Book of Seasonal Fevers. Rural healers identified qinghao as what the West calls Artemisia annua, or sweet wormwood, a spiky-leafed weed with yellow flowers. In the 1950s, officials in parts of rural China had fought malaria outbreaks with qinghao tea, but investigating it scientifically was new. It also had at least nine rivals from traditional medicine with some anti-malarial effects, including a pepper. In the lab, qinghao extracts killed malaria parasites in mice. Researchers tried to find exactly which chemical worked, which plants had the most, whether it could cross the blood-brain barrier to fight cerebral malaria, and whether it worked in oral, intravenous and suppository forms. Outmoded equipment slowed research. But by the 1970s it was known that the lethal chemical, first called qinghaosu and now artemisinin, had a structure never seen before in nature: In chemical terms, it is a sesquiterpene lactone with a peroxide bridge. Trials in 2,000 patients showed that it killed parasites remarkably rapidly. However, the body eliminated it so fast that any parasites it missed made a comeback. So scientists began mixing it with slower but more persistent drugs, creating what is now called artemisinin combination therapy. (One new combination includes mefloquine.) A 2006 history of the project by Zhang Jianfang, its former deputy director, contains some gripping details: petty disputes between rivals, Cultural Revolution street fighting that forced one laboratory into a basement, project doctors’ living on brown rice and vegetables as they did clinical trials in remote villages in China’s tropical southern mountains, and other doctors’ hiking the Ho Chi Minh Trail with the Vietcong. Mao died in 1976; Project 523 was officially disbanded in 1981, though clinical work continued. In 1979, Dr. Keith Arnold, a malaria researcher in Hong Kong who had helped the Army develop mefloquine, wangled his way into China, hoping to test his drug there. He met Dr. Li Guoqiao, who was testing artemisinin variants. They decided to try head-to-head trials, and the Chinese mystery drug beat his, Dr. Arnold said. Soon, World Health Organization scientists asked for articles from China’s medical journals, the first of which had been published in 1977, in response to reports that a Yugoslav chemist was experimenting with wormwood. Enlarge This Image EARLY CURE An illustration from the 1941 Bulletin of the History of Medicine depicted the idea that quinine’s source, the cinchona tree, was named for a countess in Peru Related Health Guide: Malaria In 1982, The Lancet had an article by Chinese researchers. It won a prize, but the check, in British pounds, could not be cashed in China. Shortly thereafter, Dr. Arnold said, Walter Reed scientists found wormwood growing on the banks of the Potomac and extracted artemisinin. Nonetheless, the drug languished. The W.H.O. did not endorse it until 2000, and it was not widely available until 2006. The reasons for that delay are disputed. China was in political disarray. Different labs in and outside China were working on derivatives. Patent law had vanished under communism, and China never took out Western patents, so there was no way a major drug company could get a monopoly and make big profits. Malaria was a disease of the poor, and today’s big donor funds did not exist. Aid agencies could not buy drugs that were not W.H.O.-approved. For years, Dr. Arnold said, he tried to get permission for his Chinese collaborators to do clinical trials in Thailand and Vietnam, but the W.H.O. stalled. (As a United Nations agency, it is rarely bold, but the 1990s were a decade of particularly low morale and constant infighting.) As nearly one million African children a year died, Dr. Arnold denounced its indecisiveness as “genocidal.” The American military stuck with mefloquine, despite its expense. As late as 2002, as Doctors Without Borders clamored for artemisinin, an adviser to the United States Agency for International Development dismissed it in an interview with The New York Times as “not ready for prime time” and defended chloroquine and other old, cheap drugs even though resistance to them was widespread. A Swiss company, Novartis, finally broke the logjam. It bought a new Chinese patent on a mix of artemether, an artemisinin derivative, and lumefantrine, another Chinese drug, and took out Western patents, planning to sell it under the name Riamet at high prices to tourists and militaries; in 2001, it agreed to sell it nearly at cost to the W.H.O. under the name Coartem. The money to buy the drug on a large scale became available with the creation of the Global Fund to Fight AIDS, Tuberculosis and Malaria in 2002 and the Bush administration’s introduction of the President’s Malaria Initiative in 2005. Now, about 150 million doses of several combinations are bought for poor countries each year. With that victory, surviving Project 523 scientists and some outsiders began vying for credit. In 1996, a Hong Kong science foundation recognized 10 team leaders. In 2009, Zhou Yiqing got the European Patent Office’s “Inventors of the Year” award for Coartem. In September, the $250,000 Lasker Award for clinical medical research was given to Dr. Tu Youyou, former chief of the Institute of Chinese Materia Medica in Beijing. The Lasker committee named her “the discoverer of artemisinin.” Some Chinese and Western malariologists were outraged. Dr. Nicholas J. White, a prominent Oxford malaria researcher, said it was “not fair to credit this discovery to one individual”; he named others he considered equally deserving, including the clinical trial leader, Dr. Li, and a chemist, Li Ying. Dr. Arnold, whose work with Dr. Li was mentioned in the Lasker citation, agreed. Richard K. Haynes, a malaria researcher and historian at the University of Science and Technology in Hong Kong, called naming one inventor “a travesty.” The Lasker Foundation declined to comment, other than to note that Dr. Tu’s citation mentioned that Project 523 was a large collaborative effort. In an interview before the ceremony, Dr. Tu, 81, argued that she deserved it because her team had been the first to isolate qinghao’s active ingredient while other teams worked on the wrong plants. Also, after rereading a manuscript by Ge Hong, a fourth-century healer, prescribing qinghao steeped in cold water for fever, she realized that boiling, the typical extraction method, was destroying the active ingredient. She switched to ether, and qinghao became the first plant extract 100 percent effective at killing malaria in mice. And before human testing began, Dr. Tu said, she and two colleagues took it themselves to make sure it was not toxic. Before the West even heard of the drug, she said, she was one of the four anonymous authors of the initial 1977 paper, and in 1978, she was chosen to accept the Chinese government’s overall award to Project 523. However difficult winnowing the field would prove, the Nobel Prize committee would be forced to do it anyway. The Nobel rules specify no more than three winners. And no posthumous prizes, either — meaning Mao would be out of the question. Contract Packaging, Industrial, Food & Pharma, Water Treatment 2012-01-19T13:33:15+00:00 http://www.havilandusa.com/index.php/news/russian-official-suggests-weapon-caused-exploration-spacecrafts-failure/ http://www.havilandusa.com/index.php/news/russian-official-suggests-weapon-caused-exploration-spacecrafts-failure/#When:18:59:29Z He did not say who would want to interfere with the spacecraft, which was intended to explore a moon of Mars. The Russian craft, named Phobos-Grunt for the moon and the Russian word for ground, ran into trouble soon after it was launched in November, when its rockets failed to lift it out of low Earth orbit. What was to have been a two-and-a-half-year interplanetary journey to retrieve a soil sample from Phobos will instead end over the weekend, according to Russian engineers. When the 13-ton Phobos-Grunt breaks up in the atmosphere, debris could potentially fall anywhere along a vast stretch of the Earth’s surface that includes the cities of New York, London and Tokyo. Though the odds are heavily against the debris causing any harm, the spectacle of people around the world anticipating the crash is another embarrassment for Roscosmos, the Russian space agency, which has presided over a series of rocket and satellite failures this year. A statement from the United States Strategic Command acknowledged that it was tracking the space probe and that it is likely to fall in the next week. “Predictions of re-entry date, time and location can change significantly due to many changing factors, such as solar weather and orientation of the spacecraft,” the statement said. “These predictions become more accurate as the event approaches.” When Phobos-Grunt first went awry, the director of the Russian space agency, Vladimir Popovkin, said that a flawed navigational computer might be to blame. NASA officials said that they helped Roscosmos, using NASA’s antennas known as the Deep Space Network, to try to re-establish contact with Phobos-Grunt, and that NASA had continued these efforts until the antennas were needed for the launch of its Mars Science Laboratory spacecraft on Nov. 26. Mr. Popovkin’s remarks to the newspaper Izvestia were the first high-level suggestion of nefarious interference. A retired commander of Russia’s missile warning system had speculated in November that strong radar signals from installations in Alaska might have damaged the spacecraft. “We don’t want to accuse anybody, but there are very powerful devices that can influence spacecraft now,” Mr. Popovkin said in the interview. “The possibility they were used cannot be ruled out.” Mr. Popovkin also suggested that equipment on the spacecraft may have broken down while the vehicle was stored on the ground, waiting for the time when Earth and Mars would be in the right places in their orbits for the mission to proceed, something that happens only every two years. “If we had not sent it to Mars in 2011, we would have had to throw it away,” he said of the craft. The interview came at a time of rising anti-Americanism in Russian politics, and may have been intended mostly for a domestic audience. Russian officials often drop hints of foreign meddling, for example in stirring the recent street protests in Moscow; such comments are usually taken to mean the United States. Mr. Popovkin’s remarks stood out in stark contrast to the cooperative spirit of recent Russian civilian space endeavors carried out in partnership with NASA, the European Space Agency and other foreign partners. Though Russia maintains a military wing of its space program, confrontation and even competition with the United States in space largely vanished with the end of the cold war. The two powers called the space race a tie and agreed to build the International Space Station together; now that the American space shuttles are retired, NASA astronauts fly to the station aboard Russian rockets. Mr. Popovkin did not directly implicate the United States in the interview. But he said “the frequent failure of our space launches, which occur at a time when they are flying over the part of Earth not visible from Russia, where we do not see the spacecraft and do not receive telemetric information, are not clear to us,” an apparent reference to the Americas. Russia has not succeeded in sending a spacecraft to Mars since the 1980s. An attempt in 1996 to launch a Mars lander that could burrow below the planet’s surface failed because of a flaw in the rocket that carried it. Phobos-Grunt, which took about five years to build and cost $160 million at current exchange rates, was launched from the Baikonur spaceport in Kazakhstan on Nov. 9; it also carried a small Chinese Mars orbiter. Kenneth Chang contributed reporting from New York. A version of this article appeared in print on January 11, 2012, on page A4 of the New York edition with the headline: Russian Official Suggests a Weapon Caused an Exploration Spacecraft’s Failure. Industrial 2012-01-11T18:59:29+00:00 http://www.havilandusa.com/index.php/news/2011-the-year-nothing-happened/ http://www.havilandusa.com/index.php/news/2011-the-year-nothing-happened/#When:18:26:59Z You can imagine the almanac-writers' dilemma as they prepare copy for New Year's Eve, struggling to make the year seem memorable. They'll headline Osama bin Laden's death, but he was a has-been who had ceased to influence history and whose death can make no difference to our world except by adding one more item to anti-Americans' already tedious list of grievances. Newspapers will parade pictures of the Arab Spring, which dethroned Tweedle-dum in favor of Tweedle-dee. Recycled photo montages will revive the embarrassment of an expensive wedding in London, in which a prince of feeble attainments played a bit part in a show dominated by trash celebrities. The death of Kim Jong Il will get little coverage -- partly because few good pictures will be available, partly because it really doesn't matter. The Durban talks on climate change hardly merit a mention: They confirmed not only that environmental change is now out of human control but also that no one is prepared to make real, urgent effort to try to do anything about it. Felipe Fernandez-Armesto The U.S. "drawdown" from Iraq may get some deserved applause, but it has come too late to make much difference to the long-term misfortunes of a war that was worse than a crime, because it was also a mistake. Pundits will reissue dire pronouncements about the European debt crisis, but it already looks as if I was right, when the crisis broke, to predict in British and Spanish media that the euro will emerge barely scathed, with the EU, if anything, marginally strengthened. Politicians have supplied some real-life comic opera to enliven the generally cheerless, pointless record. Silvio Berlusconi added "bumpa-bumpa" to the world's lexicon. Nicolas Sarkozy entertained us with his impersonation of the gait and patience of a Gallic cockerel. Jacques Chirac devised amusing excuses to escape jail. Politicians' posturings reached new heights of self-ridicule when Hugo Chávez, a noisy mountebank, whose gestures always seem to have the impact of a feebly flung custard pie, called President Obama a clown. The U.S. congressional impasse did only modest harm to America but made the country a world-wide laughing-stock. The inane antics of Republican presidential candidates brought smiles to the faces of U.S. recession victims. Rick Perry couldn't remember which departments he wanted to abolish. Herman Cain revealed unexpected depths in the sex life of a pizza guy. Even Ron Paul and Newt Gingrich became funny in a desperate sort of way when Republican voters turned to the unelectable twins in revulsion from all the other options. But the candidates' parade seemed mainly to show the poverty of democracy and the shallowness of voters' morals. Members of the debate audiences bayed for the blood of death-row inmates and uninsured hospital patients. State legislatures courted the votes of the hateful and resentful by victimizing poor immigrants and their innocent children. 2011 ought to have been a great year. Legislation could have unlocked the bank vaults and reversed recession. But nothing much happened. Punishment could have made an example of the guilty men of the global economic crisis, but the fat cats have gone on gorging. Action could have gutted corruption out of the U.S. political system -- but the 2012 election will be like all the others, bought by millions of dollars, abandoned by millions of voters. Iran could have rejoined civilization, but, instead, the irrational alienation of Iranians has continued. Imaginative initiatives could have helped to reverse the clash of civilizations, but inter-communal violence has gone on accumulating. I relish unmemorable years: They make it easier for me to update my textbook on the history of the world. They absolve me from further work. But, on the scale of those of 2011, missed opportunities are bad for all of us. The year's non-events have, at least, taught us two truths. First, the global political system is sclerotic. The inertia of the U.S. government, with decision-making deadlocked and almost every program frozen -- the promising and menacing alike -- seems representative of a world baffled into pusillanimity by the scale of its problems, while the feebleness of the EU's response to the financial crisis has shown the same sort of freeze-framing, in a system too clogged with complexity to function. Second, 2011, like other unremarkable years, has confirmed the already dominant features of the history of our day: intractable economic stagnation, moral and intellectual torpor, tacky culture, environmental degradation. We can congratulate ourselves, as we head into 2012, only on escaping the infamous old Chinese curse: We do not live in interesting times. Contract Packaging, Surface Finishing, Industrial, Food & Pharma, Water Treatment, Pool & Spa, Plastic Hoses 2011-12-29T18:26:59+00:00 http://www.havilandusa.com/index.php/news/a-romance-with-risk-that-brought-on-a-panic/ http://www.havilandusa.com/index.php/news/a-romance-with-risk-that-brought-on-a-panic/#When:16:01:57Z One broker, Cy Monley, caught Mr. Corzine’s eye. Unknown to MF Global’s top management in New York, the employee, whose job was to match buyers and sellers in energy derivatives, was also trading a small account on the side, using the firm’s capital. “How are you making money on side bets? What else are you guys doing to make money here?” Mr. Corzine asked enthusiastically, his eyes widening, the broker recalled. The new chief executive grabbed a seat and spent an hour questioning Mr. Monley as other top executives from New York hovered impatiently nearby. Although Mr. Corzine had been a United States senator, governor of New Jersey, co-head of Goldman Sachs and a confidant of leaders in Washington and Wall Street, he was at heart a trader, willing to gamble for a rich payoff. Dozens of interviews reveal that Mr. Corzine played a much larger, hands-on role in the firm’s high-stakes risk-taking than has previously been known. An examination of company documents and interviews with regulators, former employees and others close to MF Global portray a chief executive convinced that he could quickly turn the money-losing firm into a miniature Goldman Sachs. His obsession with trading was apparent to MF Global insiders over his 19-month tenure. Mr. Corzine compulsively traded for the firm on his BlackBerry during meetings, sometimes dashing out to check on the markets. And unusually for a chief executive, he became a core member of the group that traded using the firm’s money. His profits and losses appeared on a separate line in documents with his initials: JSC. After joining MF Global, Jon S. Corzine invested heavily in the debt of troubled European countries.  Yet few appeared willing to check Mr. Corzine’s trading ambitions. The review of his tenure also sheds new light on the lack of controls at the firm and the failure of its watchdogs to curb outsize risk-taking. The board, according to former employees, signed off on the European bet multiple times. And for the first time it is now clear that ratings agencies knew the risks for months but, as they did with subprime mortgages, looked the other way until it was too late, underscoring how three years after the financial crisis, little has changed on Wall Street. MF Global filed for bankruptcy on Oct. 31. As the firm spun out of control, it improperly transferred some customer money on Oct. 21 — days sooner than previously thought, said people briefed on the matter. And investigators are now examining whether MF Global was getting away with such illicit transfers as early as August, one person said, a revelation that would point to wrongdoing even before the firm was struggling to survive. The consequences of the firm’s collapse have been severe: Some $1 billion in customer money remains missing and thousands of clients, including small farmers in Kansas or hedge funds in Connecticut, still do not have nearly a third of their funds. Some of that money may never be recovered if, as some regulators now fear, MF Global used it to cover trading losses and replenish overdrawn bank accounts. The bet on European sovereign debt is not thought to be directly connected to the missing money. But the fears about the firm’s exposure to Europe tipped an anxious market, causing a run on MF Global that regulators suspect led the firm to fight for its life using customer money. Mr. Corzine has not been accused of any wrongdoing. Through a spokesman, he declined to comment for this article. While Mr. Corzine apologized for the firm’s collapse when he appeared before the House Agriculture Committee on Thursday, he has continued to defend the European trade, calling it “prudent” at the time. The European trade was initiated by Mr. Corzine late in the summer of 2010. The new chief executive explained the bet to a small group of top traders, arguing that Europe would not let its brethren default. In just a few months, the trade swelled to $6.3 billion, from $1.5 billion. Europe’s debt crisis, meanwhile, continued to flare, raising questions about whether some of the Continent’s bigger economies, Spain and Italy, might be ensnared in the maelstrom. In August, some directors questioned the chief executive, asking him to reduce the size of the position. Mr. Corzine calmly assured them they had little to fear. “If you want a smaller or different position, maybe you don’t have the right guy here,” he told them, according to a person familiar with the matter. He also told one senior board member that he would “be willing to step down” if they “had lost confidence in me,” Mr. Corzine told Congress on Thursday, although he said he had not intended to make a threat. The board relented. A Curious Career Move Few would have guessed that Mr. Corzine, having led Goldman Sachs before serving in the Senate and as a governor of New Jersey, would wind up the chief executive of a little-known brokerage house. At Goldman, which he joined in 1975, the young bond trader quickly gained a reputation as someone able to take big risks and generate big profits. Even after ascending to the top of the firm, he kept his own trading account to make bets with the firm’s capital. In 1999, Mr. Corzine was ousted from Goldman amid a power struggle. By 2010, having suffered a stinging defeat in his bid for re-election as the Democratic governor of New Jersey, Mr. Corzine hoped to resume his career on Wall Street. A friend, J. Christopher Flowers, one of MF Global’s largest investors, helped him get there. Mr. Corzine and Mr. Flowers worked at Goldman decades ago, and at one point, Mr. Flowers helped manage Mr. Corzine’s vast wealth while he was a senator, according to Congressional records. Mr. Corzine’s arrival was a coup. MF Global had hired an executive search firm, Westwood Partners, to hunt for a new leader. But some members of the board, including David I. Schamis, who worked for Mr. Flowers, were recruiting Mr. Corzine. He was a popular manager, former employees say. An avuncular presence with a beard and sweater vest, he had a knack for remembering names. Even in the firm’s final hours, they recall that Mr. Corzine never lost his temper. His work ethic also impressed colleagues. He often started his day with a five-mile run, landing in the office by 6 a.m. and was regularly the last person to leave the office. His intense routine was on par with his ambitions for the firm. With 15 top executives in the firm’s boardroom on his first day, March 23, 2010, he said, “I think this firm has tremendous potential and I can’t wait to get started,” one person who attended said. Mr. Corzine faced a steep challenge. For years, MF Global aligned buyers and sellers of futures contracts for commodities like wheat or metals, and took a small commission along the way. But over the last decade, that business had become endangered. By the time Mr. Corzine arrived, near zero-percent interest rates and paper-thin commissions had led to five consecutive quarters of losses. Soon after taking the helm, Mr. Corzine oversaw a wave of job cuts and overhauled compensation, moving from steady commissions to salary and discretionary bonuses like the rest of Wall Street. At the same time, Mr. Corzine filled the ranks with employees from Goldman Sachs and hedge funds like the Soros Fund Management. He recruited Bradley Abelow, a fellow Goldman alumnus and a top aide when he was governor, to be chief operating officer. Mr. Corzine arrived just as Washington was pressing the big banks to curb their lucrative yet risky businesses. Spotting an opening, he fashioned new trading desks, including one just for mortgage securities and a separate unit to trade using the firm’s own capital, a business known as proprietary trading. Not to be outdone, Mr. Corzine was the most profitable trader in that team, known as the Principal Strategies Group, according to a person briefed on the matter. Mr. Corzine traded oil, Treasury securities and currencies and earned in excess of $10 million for the firm in 2011, the person said. Some inside MF Global worried that the expansion of the profitable trading business in New York came at the expense of its futures clearing operation, which was centered in Chicago. To drum up sales, Chicago brokers were pushed to introduce longtime clients to their counterparts in New York, a move that raised tensions. At times, Mr. Corzine seemed unfamiliar with some aspects of the futures division. In June, speaking at the Sandler O’Neill Financial Services Conference at the St. Regis Hotel in Manhattan, Mr. Corzine stumbled. “Right now, if you thought about MF Global’s retail business, you probably could only think of — ,” he said, then paused to recall the name of the division at MF Global that catered to individual investors. He leaned over to an aide, who told him it was Lind-Waldock. ‘Chief Risk Officer’ “I consider one of my most important jobs to be chief risk officer of our firm,” Mr. Corzine told that conference. Yet soon after joining MF Global, Mr. Corzine torpedoed an effort to build a new risk system, a much-needed overhaul, according to former employees. (A person familiar with Mr. Corzine’s thinking said that he saw the need to upgrade, but that the system being proposed was “unduly expensive” and was focused in part on things the firm didn’t trade.) While risk at the firm had been sharply increased with the bet on European sovereign debt, there was a compelling argument for Mr. Corzine’s strategy. MF Global had obtained loans to buy debt of Italy, Ireland and other troubled European nations, while simultaneously pledging the bonds as collateral to support the loans. The loans would come due when the bonds matured, which would happen no later than the end of 2012. MF Global, Mr. Corzine reckoned, would profit on the spread between the interest paid on the loans and the coupons earned from the bonds. But the size of the European position was making the firm’s top risk officers, Michael Roseman and Talha Chaudhry, increasingly uncomfortable by late 2010, according to people familiar with the situation. They pushed Mr. Corzine to seek approval from the board if he wanted to expand it. Mr. Roseman then gave a PowerPoint presentation for board members, explaining the sovereign debt trade as Mr. Corzine sat a few feet away. The presentation made clear the risks, which hinged on the nations not defaulting or the bonds losing so much value they caused a cash squeeze. The directors approved the increase. Mr. Roseman eventually left the firm. Within MF Global, Mr. Corzine welcomed discussion about his bet and his reasons for it, though some senior managers said they feared confronting such a prominent figure. Those who did challenge him recall making little progress. One senior trader said that each time he addressed his concerns, the chief executive would nod with understanding but do nothing. These concerns were only internal at first because, while MF Global had disclosed the existence of the transactions in at least one filing in 2010, it never mentioned the extent to which they were used to finance the purchase of European debt. The firm bought its European sovereign bonds making use of an arcane transaction known as repurchase-to-maturity. Repo-to-maturity allowed the company to classify the purchase of the bonds as a sale, rather than a risky bet subject to the whims of the market. That called to mind an earlier era of trading when firms used repo-to-maturity to finance the purchase of risk-free assets like United States Treasury securities, Mr. Corzine’s specialty at Goldman many years earlier. “It’s like a bond trader from 15 years ago went to sleep and suddenly awoke to make these trades,” one regulator who later reviewed the transactions remarked to a colleague. Eventually, MF Global’s auditor, PricewaterhouseCoopers, asked Mr. Corzine to report the European debt exposure to his investors. He personally met with the accounting firm in December 2010, two people said, and it was agreed that the transactions would be mentioned in a footnote in the firm’s annual report, which was filed on May 20, 2011. Earlier, one of MF Global’s many regulators noticed something curious. The Financial Industry Regulatory Authority, which helped watch over MF Global’s securities business, noticed a sharp swing in profits in a monthly report the firm filed to regulators. Finra asked MF Global executives about the volatile accounting line but did not get a satisfactory answer, say people familiar with the matter, until the annual report came out weeks later. When Finra realized what MF Global was doing, it grew concerned. The Wall Street self-regulator told MF Global to set aside enough money in case the trades went bad. But Finra didn’t have the authority to force the firm to do so — that power was in the hands of the Securities and Exchange Commission, whose rule Finra was citing. Mr. Corzine then personally took the firm’s case to the S.E.C. in mid-August, taking the Delta Shuttle to Washington for a meeting with a top agency official. The S.E.C. indicated it would side with Finra, but needed a few weeks to make a final determination. In the meantime, MF Global and Finra haggled over the size of the capital cushion: the regulator wanted $200 million set aside, while the firm pushed for a figure closer to $50 million. In late August, Finra won out. It would be the beginning of the end for MF Global. The Unwinding MF Global’s investors may not have been fully informed about the European bet, but the firm’s executives had been explaining the strategy to the ratings agencies for months, according to two people with direct knowledge of the conversations. Indeed, Moody’s Investors Service and Standard & Poor’s had applauded Mr. Corzine’s effort to overhaul the firm, a move that included ratcheting up risk. “We consider the most recent strategic plan of the new C.E.O. Jon Corzine to be sound,” S.& P. said in 2010, while acknowledging the plan “will incrementally increase the firm’s risk profile.” But the move by Finra to force the extra capital cushion appeared to only unnerve the ratings agencies when news reports about it emerged in October. A week later, Moody’s cut its rating on MF Global to a notch above junk, pointing to the European debt holdings. The reversal angered some executives at MF Global, who felt it was disingenuous for the agency to change its mind so suddenly. A spokesman for the ratings agency said, “Moody’s does not refrain from taking rating action when its opinion on the credit risk of an issuer has changed.” The downgrade sent MF Global into free fall on Oct. 25. Its stock price plunged and trading partners and lenders demanded more capital to continue doing business with the company. At day’s end, rattled employees dialed into a conference call with Mr. Corzine, who tried to be encouraging. “The sun will come out tomorrow,” he told them, according to one employee. In truth, the company had just two options: sell itself or unload assets. Mr. Corzine organized two teams. Mr. Abelow, his deputy, began hunting for a buyer and decamped to the 40th floor of the firm’s Midtown Manhattan headquarters. On the 39th floor, where his office was next to the trading floor, Mr. Corzine took charge of selling the assets. On Friday evening, Oct. 28, regulators and top executives trooped into Mr. Corzine’s office, joining a phone conference with Mary L. Schapiro, chairwoman of the S.E.C. Pictures of Mr. Corzine with Presidents Barack Obama and Bill Clinton sat on shelves near his desk. Towering stacks of paper lined the walls and windowsills of his modest office, partly obscuring the window view. Dressed in his trademark sweater vest, Mr. Corzine expressed confidence a deal would be reached with one of the potential buyers, which included Interactive Brokers, JPMorgan Chase, the Jefferies Group and the Macquarie Group, according to people briefed on the call. A deal became crucial as trading partners and lenders circled the firm. LCH.Clearnet, the firm responsible for clearing the vast majority of MF Global’s European sovereign debt trades, was also demanding $200 million to maintain the positions, atop $100 million it had claimed from MF Global earlier in the week, one person briefed on the situation said. Other people close to the investigation, led by the Commodity Futures Trading Commission’s enforcement division, have said that as the firm rushed to pay off creditors, MF Global dipped again and again into customer funds to meet the demands. The bidders dropped out one by one, leaving just Interactive Brokers on Sunday, Oct. 30. Mr. Corzine and his team briefed regulators at 2 p.m. saying a sale looked likely to go through. About nine hours later, he got word that more than $950 million in customer funds was missing, making a merger impossible. The day after the bankruptcy, Mr. Corzine sifted through transactions in the hope of locating the missing money, one person said. Ultimately, the bets Corzine placed wound up better than the firm itself. The European debt trades were profitable, though too late for MF Global. Before Congress on Thursday, Mr. Corzine continued to emphasize how well his trades held up. “As of today, none of the foreign debt securities that MF Global used,” he said, “has defaulted or been restructured.” “There actually were no losses.” Kevin Roose and Lisa Schwartz contributed reporting. 2011-12-12T16:01:57+00:00 http://www.havilandusa.com/index.php/news/re-election-strategy-is-tied-to-a-shift-on-smog/ http://www.havilandusa.com/index.php/news/re-election-strategy-is-tied-to-a-shift-on-smog/#When:18:58:03Z Multimedia Graphic Ozone Regulations: Industry Makes Its Case Related E.P.A. Chief Stands Firm as Tough Rules Loom (July 6, 2011) A blog about energy and the environment. Go to Blog » Enlarge This Image Charles Dharapak/Associated Press Lisa Jackson, the administrator of the Environmental Protection Agencey, right, listened to President Obama speak in September. Readers’ Comments Readers shared their thoughts on this article. Read All Comments (236) » The half-hour meeting in the Oval Office was not a negotiation; the president had decided against ratcheting up the ozone rule because of the cost and the uncertainty it would impose on industry and local governments. He clearly understood the scientific, legal and political implications. He told Ms. Jackson that she would have an opportunity to revisit the Clean Air Act standard in 2013 — if they were still in office. We are just not going to do this now, he said. The White House announced the decision the next morning, infuriating environmental and public health advocates. They called it a bald surrender to business pressure, an act of political pandering and, most galling, a cold-blooded betrayal of a loyal constituency. “This was the worst thing a Democratic president had ever done on our issues,” said Gene Karpinski, president of the League of Conservation Voters. “Period.” The full retreat on the smog standard was the first and most important environmental decision of the presidential campaign season that is now fully under way. An examination of that decision, based on interviews with lobbyists on both sides, former officials and policy makers at the upper reaches of the White House and the E.P.A., illustrates the new calculus on political and policy shifts as the White House sharpens its focus on the president’s re-election. Industry groups and their Republican allies praised the move, which leaves a far more lenient ozone rule in place for at least a year. But then they reeled off a dozen other proposed environmental, labor and health regulations they also wanted killed. In the weeks since that decision, the administration has made a number of other environmental decisions, sending mixed messages that left both environmentalists and industry lobbyists perplexed. Two major clean air rules have been delayed, at least temporarily. The Interior Department announced a significant expansion of offshore drilling in the Arctic and the Gulf of Mexico over the next five years. Last week, the administration bowed to pressure from protesters, environmental groups, and residents and officials in Nebraska in announcing that it would delay a decision on the bitterly contested Keystone XL oil pipeline until after the 2012 election. Taken together, the moves mark the White House’s growing awareness of the costs of environmental regulation in a battered economy. The ozone decision pitted Ms. Jackson, a Princeton-trained chemical engineer and self-described “New Orleans girl,” against the White House chief of staff, William M. Daley, a son and brother of bare-knuckled Chicago mayors who was brought in to help repair relations with business and Congress. It also shows the clout of Cass R. Sunstein, the legal powerhouse who serves, mostly behind the scenes, as the president’s regulatory czar with the mission of keeping the costs of regulation under control. While Mr. Daley has recently given up some responsibilities at the White House, he remains the administration’s conduit for business interests. The ozone decision was jarring because it was wholly unexpected. Ms. Jackson considered resigning but soon abandoned the idea as a futile gesture. Many of the president’s supporters remain unsettled, fearing that the ozone decision meant he was abandoning environmental issues. But White House officials cite two major vehicle emissions rules, the pipeline delay and the president’s stated promise to carry through on other clean air measures as evidence of the administration’s devotion to their causes. Revisiting a Law In his inaugural address, Mr. Obama promised to “restore science to its rightful place” in making government environmental policy. He also pledged to revisit environmental rules set by the administration of George W. Bush that his administration felt were too weak. The standard for ozone was last set in 2008 by the Bush administration at a level of 75 parts per billion, above the range of 60 to 70 recommended by the E.P.A.’s scientific advisory panel at the time, but never enacted. Environmental and public health groups challenged the Bush standard in court, saying it would endanger human health and had been tainted by political interference. Smog levels have declined sharply over the last 40 years, but each incremental improvement comes at a significant cost to business and government. So Ms. Jackson asked health and environmental groups to hold their lawsuit in abeyance while she reconsidered the ozone standard, a job she expected to complete by the summer of 2010. Until then, an outdated ozone standard of 84 parts per billion, set by the E.P.A. of the Bill Clinton administration in 1997, remained the law. Delay followed delay until the spring of this year, when Ms. Jackson determined that the standard should be set at 65 parts per billion to meet the Clean Air Act’s requirement that it be protective of public health “with an adequate margin of safety.” At 65 parts per billion, the agency calculated, as many as 7,200 deaths, 11,000 emergency room visits and 38,000 acute cases of asthma would be avoided each year. Ms. Jackson knew that standard would cause political heartburn at the White House, so before submitting it she met with Mr. Daley at least three times in June to try to deal with any concerns. Mr. Daley, rightly sensing the uproar from business and local governments at the cost of meeting such a standard, sharply questioned the costs and burdens as well as the timing of the new rule but never explicitly asked her to hold off or pull back. Enlarge This Image Haraz N. Ghanbari/Associated Press Chief of Staff William M. Daley was pitted against Ms. Jackson. // Multimedia Graphic Ozone Regulations: Industry Makes Its Case Related E.P.A. Chief Stands Firm as Tough Rules Loom (July 6, 2011) A blog about energy and the environment. Go to Blog » Enlarge This Image Richard Perry/The New York Times The decision showed the clout of Cass R. Sunstein. Readers’ Comments Readers shared their thoughts on this article. Read All Comments (236) » Ms. Jackson went back to her suite in a large office complex off Pennsylvania Avenue to huddle with aides and tweak the proposal. She returned to Mr. Daley with a compromise, agreeing to settle for a somewhat weaker standard, at the upper limit of the recommendations of the E.P.A.’s scientific advisory board, as well as measures to provide significant flexibility in compliance. Ms. Jackson thought she had a deal. In early July she sent the White House a 500-page package with a detailed cost-benefit analysis for what she assumed would be routine vetting and approval. “We were absolutely, 100-percent certain we were going to get this ozone rule,” one senior E.P.A. official said. Counteraction The business community and its Republican allies in Congress went to war. The ozone rule became a symbol of what opponents called a “regulatory jihad” and brought out a swarm of industry lobbyists and Republicans in Congress who identified it as one of their top targets. They organized letter-writing campaigns, ran ads in journals seen by Washington policy makers and put the ozone rule at the top of the list of administration environmental initiatives they wanted repealed in the fall. They claimed the rule would cost $90 billion a year — far above E.P.A.’s estimates — and put much of the industrial heartland out of business. Local and state officials complained to Congress and the White House that they lacked the resources to enforce the new rule. Even some Democratic lawmakers warned the White House that the regulation would damage their re-election prospects. Against all this, there was no one lobbying strongly within the White House for the tougher standard. Carol M. Browner, a former E.P.A. administrator who had served as the White House coordinator for energy and environmental policy, left earlier this year as Mr. Daley was taking over because she sensed those issues were taking a back seat to economic and political concerns. Mr. Daley abolished her job, leaving no one in the current White House who speaks as forcefully on environmental issues as she did. Another Voice In charge of Mr. Obama’s effort to reduce regulatory costs and burdens was Mr. Sunstein, on leave from teaching at Harvard and a onetime colleague of Mr. Obama’s at the University of Chicago Law School. One of the most respected liberal legal scholars of his generation, he is known for his at-times unconventional thinking on regulation and economic behavior. Mr. Sunstein had his pick of jobs in the new administration. He chose the obscure regulatory affairs office as a potential laboratory for his sometimes iconoclastic views. He has challenged the utility of command-and-control-style federal regulation and has written favorably of programs to “name and shame” polluters as a way of getting them to clean up their operations without enforcement actions or fines. He has sought creative ways to encourage responsible economic and environmental behavior without using the heavy hand of the state. Mr. Sunstein never really warmed to the proposed ozone rule, not least because it would, by law, be subject to revision again in 2013. He also noted that in nearly half of the E.P.A.’s own case studies, the cost of the new rule would outweigh the benefits, raising additional alarms. One outside adviser, who watched the process closely but declined to be identified for fear of losing access to policy makers, said the ozone rule provided the perfect opportunity for Mr. Sunstein to make his mark. “Cass was itching, itching, itching to send a return letter,” the adviser said. Early Objections Although she was under intense pressure from business and Congressional Republicans over the proposed rule, Ms. Jackson believed the White House would back her. In mid-July, she hosted a delegation of trade group officials at E.P.A. headquarters so they could present their concerns. Among those present were leaders of the U.S. Chamber of Commerce, the National Association of Manufacturers, the Business Roundtable and the American Petroleum Institute. They tried a hard sell, according to R. Bruce Josten, the chief lobbyist for the Chamber of Commerce, noting that the new rule would push hundreds of counties out of compliance with the Clean Air Act and force them to devise costly new air pollution control plans. They suggested she wait until the next review in 2013. “Lisa is very smart, cordial, friendly,” Mr. Josten said of Ms. Jackson. “She listened to us, but then talked about how important it was to do this, the lung thing, the asthma thing, the kids’ health thing. She felt it was important to go ahead.” forceinline Contract Packaging, Surface Finishing, Industrial, Food & Pharma, Water Treatment, Pool & Spa, Plastic Hoses 2011-12-06T18:58:03+00:00 http://www.havilandusa.com/index.php/news/viking-spas-finds-growth-in-foreign-markets/ http://www.havilandusa.com/index.php/news/viking-spas-finds-growth-in-foreign-markets/#When:12:53:46Z In an industry that shrank from annual sales of 450,000 units to 120,000 over the course of the last five years, Viking Spas grew because 60 percent of its sales come from exports, said Tom Kneeshaw, director of sales and marketing. In an exclusive interview, Kneeshaw spoke with MiBiz about Viking’s strategy as it pursued foreign markets. The hot tub and spa industry grew and shrank with the housing industry and with homeowners’ access to easy credit. Homeowners who barely batted an eye when considering moving up to a tub with additional features for another $10 or $20 per month were starting to take a harder look at their finances. “When buyers started to dry up, they started realizing that it was not a $10 or $20 a month upgrade, it is another $1,000 or $2,000” over the course of their payments, Kneeshaw said. Much of the trouble in the domestic market is “due to the way that banks lend money. We marketed based on the payment, now it is hard for dealers to get financing.” Kneeshaw joined Viking Spas six years ago to help the company build out its export markets. Today, the $20 million company exports to 30 countries from Scandinavia to South America and Australia, and it is on pace to have a record year. Hot tubs are a seasonal product, with the majority of sales occurring in spring through early fall. Selling in the southern hemisphere will help even out demand for the company, though the company is working with local companies to help avoid the 50 percent import duties in areas such as Brazil. “Our product is very attractive to Canadian and Scandinavian customers. Scandinavians understand the lifestyle,” he said. “Selling to the southern hemisphere could be very beneficial for us. Their winter is our summer and vice versa.” Building on reputation Kneeshaw recalls that 20 years ago, he would see buyers from overseas coming to pool and spa trade shows in the United States to buy American products. Overseas buyers sought out American products for their quality, as few foreign companies could match the standard U.S. manufacturers could offer. Buyers eventually discovered American-made spas and began exporting them in small numbers to Europe. “We grew our exports from seeds of knowledge I gained at a previous employer. We had a sound base, but (we) had to build on it,” Kneeshaw said. Viking had room to grow, with just 1 percent of sales going to Canada and a single dealer in the Netherlands responsible for all of Europe. Today, Viking Spas expects to manufacture nearly 9,000 spas in 2011. The company splits 50 percent of its sales approximately among large dealers and small “mom and pop” dealers in the U.S. Twenty-five percent of the company’s sales go to Europe, while another 25 percent go to Canada. Building capacity In 2008, Viking picked up a contract with Club Piscine, a Montreal, Quebec-based dealer with 40 stores. The company quickly realized it had more orders than it could handle. Lead times quickly exploded from two weeks to eight weeks or more for Canadian orders. Lead times for U.S. orders grew to six weeks. Despite being nearly a $7,000 purchase, hot tubs are still an impulse buy, and customers were unwilling to wait that long for their orders. Viking worked with Club Piscine to stage orders so dealers could sell the spas right off the trucks. “Things had become so dire, we were fearing we would be losing significant business. I was sitting in Montreal thinking, ‘Am I going to keep my new customer who could go away tomorrow? I could be losing my existing customers as well,’” Kneeshaw said. “They staged orders so they were selling into the trucks as they came in. We had a great rep that worked with the individual customers to stage orders.” Amid the worst of the credit crisis, Viking found it difficult to find the financing to fill orders. The company turned to the U.S. Small Business Administration’s exporter loan program to help fill the capital gap. The company streamlined its manufacturing process, incorporating TPS to ensure product flows smoothly. In a manufacturing environment where lean practices dominate the conversation, Viking Spas takes an alternative view, limiting its product offerings to three colors and a limited number of options. “We are anti-Deming,” Kneeshaw said, referring to the lean manufacturing guru W. Edwards Deming. “For us to provide to our customers the ability to ship in a timely manner given the seasonality of our business requires us to maintain an inventory year round. We are not like GM who can plan production six months out. “Sometimes we will have enormous number of orders one week, a quarter of that the next. People who ordered a spa want it in two weeks. How are you going ramp up production without an inventory?” Industrial, Pool & Spa, Plastic Hoses 2011-11-10T12:53:46+00:00 http://www.havilandusa.com/index.php/news/olympus-hid-investing-losses-in-big-merger-payouts/ http://www.havilandusa.com/index.php/news/olympus-hid-investing-losses-in-big-merger-payouts/#When:20:31:21Z That revelation alone could make this one of the biggest accounting fraud cases in corporate history. It is also a spectacular turn of events amid a boardroom battle that has pitted Olympus’s former British chief executive turned whistle-blower, Michael C. Woodford, against an otherwise all-Japanese company board. Mr. Woodford was fired in mid-October after trying to force an investigation into a series of acquisitions, made before his appointment as president in February. He has since released internal documents to the news media and called for the entire company board to resign. Since the accusations, Olympus has lost half its stock market value as many questioned the company’s governance. Olympus, which is based here in Tokyo, had categorically denied any wrongdoing over the deals, made from 2006 to 2008. Just last week, the company appointed a panel of outside experts to investigate, a measure Olympus said was aimed at assuaging investor fears. But in an extraordinary statement issued Tuesday, the company said the panel found that the money for mergers had in fact been used to mask heavy losses on investments racked up since about 1990. The panel found that Olympus channeled money through several investment funds to “eliminate latent losses,” the company said in the statement, without elaborating. The revelations came as a surprise because the panel had not been expected to reach any conclusions for at least several more weeks. The payouts in question involve $687 million in fees Olympus paid to an obscure financial adviser over its acquisition of the British medical equipment maker Gyrus in 2008. That fee amounted to roughly a third of the $2 billion acquisition price, a fee amount more than 30 times the norm. The Federal Bureau of Investigation and the Securities and Exchange Commission in the United States are also investigating the Gyrus deal, according to people familiar with the matter. Olympus also acquired three small companies in Japan for a total of $773 million, only to write down most of their value within the same fiscal year. Those companies — Altis, a medical waste recycling company, Humalabo, a facial cream maker, and News Chef, which makes plastic containers — had little in common with Olympus’s main line of business of producing cameras and other electronics. Those businesses had not made money before being acquired, according to the credit ratings agency Tokyo Shoko Research. At a news conference, the company’s new president, Shuichi Takayama, bowed deeply in apology. “It is true that there were inappropriate dealings,” he said. “Our previous statements were in error.” But he stopped short of acknowledging fraud at the company, and said that no money had flowed out of the company. He said Olympus was still investigating the case and was still unprepared to reveal the scale of past losses. Mr. Takayama also said that Hisashi Mori, an executive vice president, had been fired over his involvement in the cover-up. Hideo Yamada, who is also implicated, has offered his resignation, he said. He reiterated the company’s position that Mr. Woodford’s departure had to do with his aggressive Western-style management style rather than his inquiries into the acquisitions. Mr. Takayama said that despite the disclosure, he hoped to keep Olympus’s shares listed on the Tokyo Stock Exchange. Its shares were down nearly 30 percent Tuesday afternoon. Mr. Woodford, who worked at Olympus for 30 years, had begun to look into those payouts after a Japanese financial magazine, Facta, published an exposé on the deals. In September, Mr. Woodford commissioned a report by PricewaterhouseCoopers into the Gyrus deal that raised concern over actions taken by Olympus management, including a lack of due diligence. Based on the report, Mr. Woodford called for a full investigation in a letter dated Oct. 11. He urged the company’s chairman at the time, Tsuyoshi Kikukawa, and other members of the board to resign, accusing them of “calamitous errors and exceptionally poor judgment” and comparing them to rogue traders. But on Oct. 14, the Olympus board unanimously voted to oust Mr. Woodford. He said he was not permitted to speak at the board meeting, and was advised to leave the country immediately. Mr. Kikukawa resigned in late October. In a statement at the time, he denied wrongdoing. Questions remain over Olympus’s links to the obscure investment and advisory companies that facilitated those acquisitions, including an investment fund incorporated in the Cayman Islands, as well as Axes, a company that oversaw those funds from the United States and Japan. The Global Company, an investment advisory firm based in Tokyo, was closely involved in setting up the three companies as well as facilitating their sale to Olympus, according to a New York Times investigation. Executives at those companies have not been available for comment. This article has been revised to reflect the following correction: Correction: November 8, 2011    An earlier version of this article incorrectly said that Michael C. Woodford was fired from Olympus in mid-September. He was fired Oct. 14. Contract Packaging, Surface Finishing, Industrial, Food & Pharma, Water Treatment, Pool & Spa, Plastic Hoses 2011-11-08T20:31:21+00:00 http://www.havilandusa.com/index.php/news/negative-exposure-for-kodak/ http://www.havilandusa.com/index.php/news/negative-exposure-for-kodak/#When:13:09:03Z Antonio M. Perez, Kodak’s chief executive, has poured hundreds of millions of dollars into transforming Kodak into a giant in the inkjet printer business, even as printouts are increasingly being replaced with electronic copies on computers, tablets and smartphones. “You will see that that business is going to be a gorgeous business for this company,” Mr. Perez told analysts in July. While it is difficult to know whether Mr. Perez’s strategy will succeed, two things are certain: Kodak is burning through a lot of cash to pursue it; and many investors are highly skeptical. Consumer inkjet revenue at Kodak grew 48 percent in the second quarter, but since the first of the year, Kodak shares have lost about three-quarters of their value. And in recent weeks, rumors about the company going bankrupt have been rife. The stock fell 2.4 percent to close at $1.24 on Thursday. Mr. Perez, who was named the chief executive in 2005, declined to comment for this article, citing the quiet period before the next earnings are announced on Nov. 3. Company officials deny that Kodak is considering a bankruptcy filing. A Kodak spokesman said that Mr. Perez had pursued inkjet printers because the company had “a treasure trove” of inkjet technology in its research and development unit and that the business was “well positioned for ongoing success.” “Our corporate strategy is focused on core strengths at the intersection of materials science and digital imaging science,” Christopher Veronda, the spokesman, said in an e-mail. “This is squarely in that arena.” In addition, Kodak officials said that inkjet printers were just part of a turnaround strategy that also included a focus on commercial printing, packaging and workplace software. Critics of Kodak’s direction are impatient. Gregg Abella, a co-principal at Investment Partners Asset Management, said he was tired of hearing Mr. Perez say the company would turn around in a year or two. And he questioned why the Kodak board had not been more assertive in steering Mr. Perez on a different course. “How on earth did the board listen to this guy for the past six years and not do anything about it?” Mr. Abella said. “There is an expectation when you buy into the stock or bonds of a Fortune 500 company that the board will respond to deteriorating financial conditions before it becomes nothing more than a call option on its intellectual property.” Chris Whitmore, the analyst who likened Kodak’s printer strategy to a buggy whip, said the company still had not recovered from its first misstep: its failure to fully embrace digital cameras after sales of Kodak’s signature yellow-box film collapsed. “The big story here is that their core business — the yellow box business — got cannibalized by the digital camera, which ironically they invented,” said Mr. Whitmore, who works at Deutsche Bank Securities. Mr. Perez is the latest Kodak chief executive to try to remake the company after its dominance in film was eroded by more nimble competitors and digital technology. A former Hewlett-Packard executive who lost the top job there to Carly Fiorina, Mr. Perez laid out a strategy that included closing film plants and refocusing the company. He leased out the company’s patent portfolio, which generated $1.9 billion from 2008 to 2010, to finance his turnaround efforts. And Mr. Perez poured money into businesses that he thought would eventually pay dividends, including consumer inkjet printers, in effect taking on his former employer, H.P. Mr. Perez rejected the traditional razor-blade model used by most printer manufacturers who offered relatively cheap printers and made their money on the ink. Instead, Kodak charged slightly higher prices for its printers and sold its ink relatively cheap. “We think it will give us an opportunity to disrupt the industry’s business model and address consumers’ main dissatisfaction: the cost of ink,” Mr. Perez told Businessweek in 2007. Timeline: Kodak Related DealBook: Kodak Hires Legal Adviser Amid Talk of Bankruptcy (September 30, 2011) Times Topic: Eastman Kodak Company Add to Portfolio Hewlett-Packard Company Eastman Kodak Co Deutsche Bank AG Microsoft Corporation Go to your Portfolio » To date, Kodak’s consumer inkjet business has captured about 6 percent of the United States market, according to the market research firm IDC. In contrast, H.P. commands about 60 percent of the market, which is expected to remain relatively flat or even decline. “Technologically, I think the product is fine,” said Marco Boer, a vice president for I.T. Strategies, a digital printing market research firm. “But is it going to save Kodak? Even if inkjet was a phenomenal success, I am not sure if any company could grow that business fast enough to offset declines in Kodak’s other businesses.” Ken Luskin, a disgruntled Kodak investor who runs Intrinsic Value Asset Management, said Mr. Perez’s turnaround strategy was the story of how “a company has been run into the ground by one guy’s ego needs.” “He said, ‘I’m going to rub this in Hewlett-Packard’s face.’ This is why they are doing this,” Mr. Luskin said. But Mark Kaufman, an analyst at Rafferty Capital, is more bullish on Kodak’s prospects. He said the company had better technology than its competitors in commercial and consumer printers. In addition, he said Kodak’s proposed sale of some of its patents could generate more than $2 billion and put the company in a position to be sold, or thrive on its own. “They might be able to pull it off on their own because it’s superior technology,” he said. Few would question that Mr. Perez has faced an unusually formidable task. The year that Mr. Perez was named chief executive, 2005, the company posted losses of nearly $1.3 billion. Kodak was created by the inventor George Eastman in the late 19th century. It quickly became a household name by marketing film under the slogan, “You press the button, we do the rest.” Kodak thrived using the same razor-and-blade strategy, selling cameras for low prices and making its money on the film. In 1975, a Kodak scientist invented the world’s first digital camera, which was about the size of a toaster. At that time, Kodak controlled about 90 percent of the film market and 85 percent of camera sales in the United States, according to Harvard researchers. But Kodak’s phenomenal success in film would also be its undoing, making its managers complacent and slow to adapt to change. When Fuji began eating away at Kodak’s film business in the 1970s, Kodak executives ignored internal warnings because “they didn’t believe the American public would buy another film,” according to “Changing Focus: Kodak and the Battle to Save a Great American Company,” by Alecia Swasy. In one notorious incident from the early 1990s, Kodak’s chief at the time, Kay R. Whitmore, fell asleep during a meeting with Microsoft’s founder, Bill Gates. By then, it was clear that Kodak needed to make significant changes to stay relevant, with its film business in a steep decline. During the previous decade, the company acquired companies that made in-vitro blood analyzers, floppy disks, aspirin and Lysol in an attempt to reverse the decline, the Harvard study said. “Let’s face realities,” said Ulysses Yannas, a broker at Buckman, Buckman & Reid who has followed Kodak for four decades and applauds Mr. Perez’s efforts. “This company was very, very badly managed throughout the ’60s, ’70s, ’80s and ’90s. It was run like a civil service.” Mr. Perez vowed to turn the company around by 2008. While that has yet to happen, Kodak officials say three-quarters of the company’s revenue now comes from digital products. A decade ago, most of its revenue still came from film. In addition, in the most recent quarter, Kodak’s main growth areas grew 22 percent, led by the 48 percent increase in consumer inkjet revenue. “We remain focused on our strategy to become a profitable, sustainable digital company,” Mr. Veronda, the spokesman, said in an e-mail. Contract Packaging, Surface Finishing, Industrial, Food & Pharma 2011-10-21T13:09:03+00:00 http://www.havilandusa.com/index.php/news/200-chinese-subsidies-violate-rules-u.s.-says/ http://www.havilandusa.com/index.php/news/200-chinese-subsidies-violate-rules-u.s.-says/#When:13:28:22Z Under pressure from Congress to do more to confront China on economic issues, the Obama administration has notified the World Trade Organization of nearly 200 Chinese subsidy programs, saying many of them may violate free trade rules. 2011-10-07T13:28:22+00:00