Archive for October, 2008
October 31st, 2008
For many of our small-medium size manufacturing companies that are S-Corps, this has significance….
“For the second time in a week, a prominent Democrat has downgraded Barack Obama’s definition of the middle class — leading Republicans to question whether he’ll stick to his promise not to raise taxes on anyone making under $250,000.
The latest hiccup in the campaign message came Friday morning on KOA-AM, when New Mexico Gov. Bill Richardson pegged the middle class as those making $120,000 and under.
http://elections.foxnews.com/2008/10/31/low-richardson-pegs-middle-class-making/
Click here to listen to Richardson talk about Obama’s tax plan.Â
“What Obama wants to do is he is basically looking at $120,000 and under among those that are in the middle class, and there is a tax cut for those,” Richardson said in the interview, according to a clip posted on YouTube.
There’s no indication that Obama has changed his tax policy, which states that anyone making under $200,000 would get a tax cut under his administration, and nobody making under $250,000 would be hit with a tax increase. Richardson actually recited that part of Obama’s plan correctly earlier in his radio interview.
But the Republican National Committee quickly blasted out an e-mail saying, “At this rate, it won’t take long until Obama is again raising taxes on Americans making as little as $42,000 a year.”
“When Barack Obama comes to your door this Halloween, there will be no treats — just taxes,” the e-mail said.
Joe Biden caused headaches for the campaign Monday when he told a Scranton, Pa., TV station that Obama’s tax break “should go to middle class people — people making under $150,000 a year.”
John McCain said the tax threshold was “creeping down,” while the Obama campaign accused him of lying about Obama’s tax policies. “
October 31st, 2008
Looks like China’s Manufacturing is having difficulties, may be an opportunity to bring some of this work back to the U.S.A.
Read the story here from Guardian U.K….
http://www.guardian.co.uk/business/2008/oct/31/china-manufacturing
October 31st, 2008
Excel Gear, Inc. announces its transition from the prototype to the production stage on the first order of its 36:1 ratio gear boxes, specifically designed to assist positioning of the 78-ton gun turrets utilized in the Advanced Gun System (AGS) program.
BAE Systems, the Excel customer for this project, recently approved the prototypes on these 36:1 ratio gear boxes. BAE Systems is the primary contractor on the AGS, designed for use on the DDG 1000 destroyers used to support U.S. Navy and Marine Corps expeditionary and joint operation in the littorals and deep inland.
Check it out:Â http://www.pddnet.com/scripts/ShowPR.asp?RID=23586&CommonCount=0
Congratulations, Excel Gear!!
October 31st, 2008
My earlier post of Business Wisdom from the Ancients caused me to look for another set of quotes. These little gems can be useful during these stressful times:
We are what we repeatedly do. Excellence, then, is not an act but a habit…Aristotle, 384 BC – 322 BC, Greek philosopher, a student of Plato and teacher of Alexander the Great; Focus, focus focus, what you do over and over you get better at your products or services;
Each day I grow older and learn something new…Solon, 638 BC–558 BC) was an Athenian statesman, lawmaker and Lyric poet; Education is life-long learning; it was to them and it should be for us as well.
I am not an Athenian or Greek, I am a citizen of the world…Socrates, 469 BC–399 BC, a Classical Greek philosopher; Think of your markets in Global terms, look at the world as your market.
Well, maybe these old guys knew what they were doing, huh?
October 30th, 2008
If you are a supplier to Boeing, this looks like a strong market! Note the link below for the complete market forecast.
BEIJING, Oct. 29, 2008 — The Boeing Company [NYSE: BA] detailed its 2008 Current Market Outlook (CMO) for the China region today, forecasting a market for 3,710 new airplanes worth about $390 billion over the next 20 years.
“China will continue to be the fastest-growing aviation center in the world, requiring 41 percent of the entire Asia-Pacific region airplane demand. This makes China the largest market outside of the U.S. for new commercial airplanes,” said Randy Tinseth, Boeing Commercial Airplanes vice president - Marketing.
China air travel and air cargo market growth will cause China’s fleet to more than triple to 4,560 airplanes by 2027-about as many airplanes as are in Europe today.
Single-aisle airplanes will account for 70 percent of the new purchases, driven by the world’s fast-growing domestic market. Single-aisle airplanes such as the Boeing Next-Generation 737 will be the largest category, with 2,600 new airplane deliveries. Demand for intermediate twin-aisles, such as the Boeing 787 Dreamliner and 777, will result in approximately 780 airplane deliveries. When combined, the single-aisle and intermediate twin-aisle market will make up 91 percent of China’s total delivery dollars.
Demand will include a limited number of large airplanes (747-size and larger) to connect China with other major world destinations. The market forecast calls for about 100 airplanes in that category.
With China’s cargo markets leading the global industry, Chinese air carriers will add about 370 freighter airplanes by 2027, quadrupling its total freighter fleet size.
The Boeing 2008 forecast combines today’s market environment with a long-term view that portrays how air transport will be transformed over the next 20 years. It’s an outlook that indicates continued strong fundamentals underlying the need for new airplanes-including economic growth, world trade, aviation market liberalization and new aircraft capabilities.
The detailed study enables Boeing to better work with airlines in supporting their fleet plans in conjunction with their future economic growth. The outlook facilitates Boeing’s strategic plans to drive the development of new airplanes and the improvement of existing models.
Worldwide, Boeing projects investments of $3.2 trillion for 29,400 new commercial airplanes to be delivered during the next 20 years. The complete forecast is available on the Boeing Web site at www.boeing.com/commercial/cmo/index.html.
October 30th, 2008
Some good news from Boone County:
The International Economic Development Council (IEDC) recognized the Belvidere, Illinois-based entity acknowledged Growth Dimensions for Belvidere-Boone County for its sustainable development initiative with an Honorable Mention at IEDC’s Annual Conference, which took place in Atlanta, Georgia, October 19-22. The organization was noticed for this achievement during an awards ceremony on Tuesday, October 21st. “Economic development efforts have long been a keystone in the quest to bolster the economy and improve quality of life in every locality across the country,” said Robin Roberts Krieger, IEDC chair. “As the nation continues to tackle longstanding challenges in the midst of an inhospitable financial climate, these efforts have taken on an even greater significance. With the award, we laud trendsetting organizations like Growth Dimensions for leading the charge.”
Competing in the category of Sustainable and Green Development by organizations serving areas with populations under 50,000, Growth Dimensions was a clear standout. In 2006 Vandewalle and Associates, retained by Growth Dimensions, completed what is now known as the Flora Neighborhood Plan to encompass the land use plans for both the AgTech Initiative and the Tollway Station Point Project. Growth Dimensions and its partner’s efforts were recognized with other award winning communities including Santa Fe, New Mexico; Boulder, Colorado and Seattle, Washington.
“It’s very rewarding to know that nationally, premier economic development organizations, consultants and experts in the field of sustainable and green development recognize the value of our economic development programs,” stated Mark Williams, executive director of Growth Dimensions. “Our local and regional members can be proud of the support and leadership they provide.”
Growth Dimensions in partnership with the City of Belvidere and Boone County, Illinois; Northern Illinois University, Illinois; Technology Development Alliance in conjunction with the northern Illinois business community, embarked upon the AgTech Initiative of northern Illinois. The purpose of the AgTech Initiative is to establish the long-term support system for the commercialization and entrepreneur development of agricultural research into alternative industrial use products. Product sector focus areas include bio-energy, bio-based lubricants, bio-based chemicals, bio-based plastics and bio-based composites.
Tollway Station Point is a Transit-Oriented Development Plan created for the purpose of organizing land development along the I-90 corridor. The development plan calls for Planned Mixed Use Development, specifically, high-density, mixed-use, transit-oriented development. The Transit Center will provide multiple transit options including commuter rail service linking Belvidere and Rockford to Chicago.
“Growth Dimensions and a dedicated group of volunteers have worked very hard to bring both of these initiatives to where they are today,” said Belvidere Mayor Fred Brereton. “Our community should be grateful for the work completed. Because of their efforts, our community is better positioned to compete in the 21st Century.”
The International Economic Development Council (IEDC) is headquartered in Washington, DC. Its mission is to provide leadership and excellence in economic development for communities, members and partners. IEDC’s professional economic development awards annually recognize excellence in the economic development profession.
Pictured above right (L-R): Robin Roberts Krieger, IEDC chair; Mayor Fred Brereton; Mark Williams; Paul Cutting, IEDC Marketing & Awards Program Coordinator
For further information, contact:
Growth DimensionsKelly Galluzzo
Associate Director
email: kgalluzzo@growthdimensions.org
October 29th, 2008
When all the other “pollsters” say his lead is growing, this poll, probably more accurate than the others, show his lead is actually shrinking…
http://www.zogby.com/
October 29th, 2008
Note the way Honda is reducing production in the U.K. but not reducing skilled employees. Story from the Guardian, U.K.
The gloom hanging over the car industry deepened yesterday when Honda announced a further cut in production at its Swindon plant.
It said it would curb output by an additional 10,000 vehicles between January and March next year. In September Honda said it was reducing production at Swindon, where it makes the CRV and three and five-door Civics, by 22,000 units.
Yesterday Honda said it had been forced into the extra curbs because “the global financial situation has continued to affect consumer confidence”.
The latest cuts came as Honda’s Japanese parent company warned that the global downturn meant annual profits would be lower than expected.
The cuts will reduce production at Swindon this fiscal year to 196,000 cars. Honda said it was not seeking job losses among its 4,800 workforce and that plans to start production of the Jazz model next year were not affected. Roger Maddison, national officer of Unite, said: “Honda is suffering the same as everybody else in the car business but they are not making layoffs, which is to be commended. Instead, they are holding on to skills and people for the time when the market turns up. We urge others in the sector to take a similar long-term view.”
One brighter note came from Ford in the UK, which said it would invest £70m at its Bridgend engine plant to produce next-generation low-emission 1.6-litre, four-cylinder petrol engine. Employment at Bridgend rose to more than 2,000 this year for the first time in its 28-year history. The new EcoBoost engines will go into production within two years.
October 29th, 2008
New orders for long-lasting manufactured goods rose unexpectedly in September by 0.8 percent, led by surging demand for defense goods and transportation equipment, the Commerce Department said on Wednesday.
The jump in orders for durable goods - items intended to last three years or more - followed a 5.5 percent drop in August, previously reported as a 4.8 percent decline.
Wall Street economists surveyed by Reuters had forecast a 1.2 percent decline in September orders.
Orders for defense capital goods increased 19.6 percent in September, the largest since December 2007, after increasing 8.4 percent in August.
Transportation orders jumped 6.3 percent, including a 3 percent gain for autos and auto parts — the biggest jump since July 2007.
Excluding transportation, September durables orders were down 1.1 percent after falling 4.1 percent in August.
Non-defense capital goods excluding aircraft, seen as a barometer of business spending plans, fell 1.4 percent after decreasing 2.2 percent in August.
(Reporting by Doug Palmer, Editing by Neil Stempleman) Washington, Reuters
October 28th, 2008
From the Wall Street Journal:
Imagine this: Barack Obama proposes a Social Security payroll tax cut for low earners. Workers earning up to $8,000 per year would receive back the full 6.2% employee share of the 12.4% total payroll tax, up to $500 per year. Workers earning over $8,000 would receive $500 each, with this credit phasing out for individuals earning between $75,000 and $85,000.This tax cut would make an already progressive Social Security program even more redistributive. Under current law, a very low earner receives an inflation-adjusted return on his Social Security taxes of around 4%. That’s a good return, given that government bonds are projected to return less than 3% above inflation. A high-earning worker, on the other hand, receives only around a 1.5% rate of return. Under Sen. Obama’s proposal, returns for very low earners would rise to around 6% above inflation — about the same return as on stocks, except with none of the risk. Compounded over a lifetime’s contributions, the difference in the “deal” offered to workers of different earnings levels would be extreme.
While Social Security has always been progressive, many would say this plan goes too far and risks turning Social Security into a “welfare program.” Low earners receive more in benefits than they pay in taxes — meaning their “net tax” is already negative — and Mr. Obama’s plan would increase net subsidies from the program.
Moreover, this payroll tax cut plan would reduce Social Security’s tax revenues by around $710 billion over the next 10 years. If made permanent, the Obama tax cut would increase Social Security’s long-term deficit by almost 60% and push the program into insolvency in 2034, versus 2041 under current projections.
To fill the hole in Social Security’s finances, Mr. Obama would increase income taxes on high earners and pour that money into Social Security. This would be the first time that income tax revenues have been used to finance Social Security, which has always relied on its own dedicated payroll tax to differentiate itself from other government programs. Filling the gap with higher taxes on high earners would further increase Social Security’s progressivity, pushing it closer toward a welfare-program approach.
Now, you haven’t heard Mr. Obama describe anything like this plan. If you had, it’s likely you wouldn’t support it. But it’s almost exactly what his headline “tax cut” would do. The Obama campaign took the idea described above and made it much more complicated.
Under the plan, which he claims would cut taxes for 95% of Americans, provides an income tax credit worth 6.2% of earnings up to $8,000, for a maximum credit of $500 per worker or $1,000 per couple. The 6.2% figure is important, because it matches the employee share of the Social Security payroll tax. Because around a third of Americans currently pay no income taxes — a fraction that would rise to almost half under Mr. Obama’s plan, according to the Tax Policy Center — Mr. Obama’s tax credits would be refundable, meaning you could collect the credit even if you paid no income taxes.
While Mr. Obama calls his plan “Making Work Pay,” under standard economic assumptions his plan would actually discourage work for anyone earning over $8,000 per year. The tax credit itself would increase workers’ take-home pay, an “income effect” that reduces incentives to work. Moreover, for workers in the $75,000 to $85,000 income range, where the tax credit is phased out at five cents for each dollar of additional income, this would add five percentage points to their marginal tax rate.
So Mr. Obama has in essence proposed cutting Social Security taxes for low earners, which would shift the system toward a “welfare” approach and sharply increase its long-term deficit. To fill the funding gap, he will raise taxes on high earners and funnel the money into Social Security, making the system even more progressive and breaking a long tradition against funding Social Security with income taxes.
The complex way in which Mr. Obama structures and describes his plan would make it harder to administer than a straight payroll tax cut. But it is also more difficult for the typical American to understand. This may explain why he chose complexity over clarity.
Mr. Biggs is a resident scholar at the American Enterprise Institute in Washington, D.C. He blogs on Social Security policy at www.andrewgbiggs.blogspot.com.
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