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Oct 18

UPDATE 1-DaVita raises 2011 operating income outlook


The company said it expects third-quarter operating income of $314-$322 million and earnings from continuing operations of $1.43-$1.48 on a per share basis.DaVita raised its operating income view for 2011 to $1.13-$1.16 billion, compared with $1.08- $1.12 billion earlier.It had reported net income of $142.9 million, or $1.15 a share on net operating revenue of $1.65 billion in the third quarter last year.The company also said it received a subpoena for documents in a grand jury investigation.

Posted 7 months ago

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Oct 14

INSIGHT-Wisconsin clash spotlights US labor-management rift


OSHKOSH, Wisconsin Oct 13 (Reuters) - Oshkosh Corp has been a rare lifeline for the beleaguered United Auto Workers, one of the few American manufacturers to have added significantly to its ranks of well-paid union workers in a brutal decade for factory hands.But now, as the UAW renews conciliatory contracts with major automakers that have dismissed tens of thousands of hourly workers, union employees are turning against Oshkosh.Tim Jacobson, 32, is among the workers who have rejected a new contract forged by union leaders with the maker of military vehicles and fire trucks. They are marching in the streets of this university city on Lake Winnebago to denounce an employer that has nearly doubled its UAW staff to 3,100 over the five-year span of its last union contract.Jacobson himself was hired by Oshkosh two years ago, less than a month after he was laid off from a nearby Harley Davidson plant.”What’s disgusting?” Jacobson shouts, carrying an American flag as he leads a line of 150 workers at a recent rally downtown. “Union busting,” the crowd responds.This seemingly paradoxical labor standoff stems from grievances almost unique to Oshkosh, whose profits have been flush in recent years, and from a broader animus between labor and management, both nationally and in particular in Wisconsin, where a clash over the power of public-sector unions transfixed the country over the summer.”Frankly, a lot of people here are pissed off,” Jacobson said. Workers complain that the new contract erodes work rules, security and seniority rights - such as a demand that workers can be required to work up to ten Saturdays per year. Particularly galling to them is the company’s call for more temporary, non-union positions. When Oshkosh sought union approval to hire as many as 300 temporary workers starting in 2013 as part of its original contract offer, the workforce rejected it.The most recent rejection, on Saturday, was the second in a week. The company had offered as much as an 8.5 percent raise and $2,000 signing bonus to offset to rising healthcare premiums. Oshkosh had attempted to craft a similar deal in 2010, a year before the contract’s expiration, and met resistance then as well.An outright strike is unlikely. UAW and Oshkosh officials returned to the bargaining table on Wednesday. A third deal, without any demands for temporary worker provisions, will likely be handed to workers this weekend, according to people familiar with the talks. These people expressed confidence that the third attempt for ratification will work.If it goes through, the victory for the UAW could well be overshadowed by friction it is facing with a much bigger member, Ford Motor Co .Dissent isn’t a new phenomenon for the UAW. In Detroit - home of the union’s core constituency - workers have shown a willingness to vote down automaker contracts in even the worst of times. And now, as Ford seeks ratification for a new deal that includes lucrative bonuses, there is widespread concern that workers there will vote no. As of Thursday, two Ford factories had rejected a proposed four-year deal, throwing its ratification into doubt.And with protestors on the streets of Oshkosh, Wisconsin where even the deep erosion of the industrial heartland has been kept at bay, the thread of distrust sewn into labor-management relations is proving difficult to sever.Oshkosh’s desire to bring in temps follows a pattern set by most of the nation’s industrial heavyweights, such as Caterpillar Inc, who want to meet shorter-term production needs without having to bring on another crop of permanent employees. Workers here firmly believe this will lead to an inevitable loss of union jobs.”Our members have been getting very angry out there,” UAW Local 578 President Nick Nitscke recently said while standing in the lobby of the Oshkosh hotel, the site of the labor negotiations. He pointed to a street corner where hundreds of workers have protested several times in recent weeks. “They do not want anything to do with temp workers.”PICKET FEVERThis schism between the workers and their union has many outside observers scratching their heads, coming as it does with the rest of the country plagued by economic malaise.Oshkosh has been on a roll thanks to winning big contracts to build military vehicles in recent years, though it now faces new headwinds as government-spending cuts and increased competition squeeze the defense industry. Management has been hitting this theme hard.In a letter accompanying its first offer to UAW workers last month, Chief Executive Charles Szews said, “the company’s offer takes into consideration today’s economic realities for our principal customer, the U.S. Department of Defense, which is facing hundreds of billions of dollars in budget reductions.” Workers are largely dismissive of that outlook.Like many others in the area, Rep. Gordon Hintz, a Democrat representing Oshkosh, sees the current conflict as at least partially influenced by the protests over public-sector unions that polarized public opinion, just 87 miles to the south in Madison. The Occupy Wall Street movement is also energizing workers, he said. “Does Wisconsin have picket fever? Yes, I think there is a little of that.”A broader anxiety is also underpinning the workers’ resistance, says Mike Schroeder, a longtime Oshkosh worker recently elected as a chief bargaining steward. “People have not gotten the entire story of what is really going on here. This isn’t really about money,” he said. “This is about job security.”A significant portion of Oshkosh’s workers here were hired as the company was scrambling to fill orders from the Department of Defense, while other Wisconsin manufacturers — including Kohler Co., Harley Davidson, and Mercury Marine - were laying people off and, in some cases, hiring more temps. As a result, Oshkosh was able to hire skilled manufacturing workers who harbored a deep resentment toward non-unionized employees doing short-term work.

Posted 7 months ago

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Oct 12

Claiborne sheds brands to cut debt; shares soar


The company said it is selling its Liz Claiborne and Monet brands to J.C. Penney Co Inc (JCP.N) for $267.5 million, one in a slew of deals in recent months.It will concentrate on its Juicy Couture, Lucky Brand and kate spade retail brands and is looking into a new company name to reflect that strategy.Claiborne has not reported a profit since 2006.Chief Executive William McComb, who took the reins in late 2006, said the company will have a more appropriate debt load, considering the risk of another recession in the United States and Europe.”We need to bring down our debt and thereby ‘de-risk’ our company,” he told Wall Street investors on a call.Last month, Claiborne said it was selling most of its money-losing international Mexx business to a joint venture with Gores Group, and in August announced it would sell the trademarks on some of its perfumes, including Curve, to Elizabeth Arden Inc (RDEN.O), also to lower its debt.It earlier sold its Dana Buchman brand to Kohl’s Corp(KSS.N).All told, these deals will bring in $471 million, which Claiborne will use to shed about 62.2 percent of its net debt, which stood at $741.6 million as of July 2. The debt issue has long weighed on the company’s stock.”With all that’s going on in the economy, it’s hard to make a solid investment case for such a leveraged company,” KeyBanc Capital Markets analyst Edward Yruma told Reuters.S&P Capital IQ analyst Jason Asaeda raised his target on Claiborne shares by a dollar, to $7.50.The company still faces some challenges. McComb said comparable sales at Juicy Couture were down again in September, falling 5 percent, based on a preliminary tally. But they were up at Lucky Brand and kate spade.The cost of insuring debt issued by Liz Claiborne against potential default fell sharply Wednesday. It cost $663,000 a year to insure $10 million of debt for five years, down from $880,000 a year on Tuesday, according to Markit.Claiborne shares were up $1.91, or 37.4 percent to $7.01 in afternoon trade. Earlier they rose as high as $7.25.SHEDDING NAMESAKE BRANDPenney, which has said in recent results reports that sales of the Liz Claiborne line have been strong, has had the exclusive licensing rights to the brand since August 2010.Their deal gave Penney the right to buy the Liz Claiborne brand outright at certain dates.Penney will then license back the Liz Claiborne New York and Lizwear trademarks to Claiborne without collecting a royalty.The department store chain expects to become the exclusive store with Monet by August 2012.Claiborne is also selling smaller brands like Kensie, Kensiegirl, and Mac & Jac.The company will also end its licensing deal for DKNY Jeans with designer Donna Karan International, part of French luxury conglomerate LVMH (LVMH.PA), a year early, effective January.Claiborne expects net debt at the end of fiscal 2011 to be between $270 million and $290 million.As a result of all these transactions, Claiborne lowered its adjusted EBITDA forecast for fiscal 2011 to a range of $80 million to $90 million, from $100 million to $120 million previously.

Posted 7 months ago

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