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  1. Join Date
    Feb 2007
    [SIZE="3"]15 Companies That Might Not Survive [/SIZE]2009
    US News Magazine
    Friday February 6, 2009, 11:53 am EST
    Who's next?

    Rite Aid. (Ticker symbol: RAD; about 100,000 employees; 1-year stock-price decline: 92%). This drugstore chain tried to boost its performance by acquiring competitors Brooks and Eckerd in 2007. But there have been some nasty side effects, like a huge debt load that makes it the most leveraged drugstore chain in the U.S., according to Zacks Equity Research. That big retail investment came just as megadiscounter Wal-Mart was starting to sell prescription drugs, and consumers were starting to cut bank on spending. Management has twice lowered its outlook for 2009. Prognosis: Mounting losses, with no turnaround in sight.

    Claire's Stores. (Privately owned; about 18,000 employees.) Leon Black's once-renowned private-equity firm, the Apollo Group, paid $3.1 billion for this trendy teen-focused accessory store in 2007, when buyout funds were bulging. But cash flow has been negative for much of the past year and analysts believe Claire's is close to defaulting on its debt. A horrible retail outlook for 2009 offers no relief, suggesting Claire's could follow Linens 'n Things - another Apollo purchase - and declare Chapter 11, possibly shuttering all of its 3,000-plus stores.

    Chrysler. (Privately owned; about 55,000 employees). It's never a good sign when management insists the company is not going out of business, which is what CEO Bob Nardelli has been doing lately. Of the three Detroit automakers, Chrysler is the most endangered, with a product portfolio that's overreliant on gas-guzzling trucks and SUVs and almost totally devoid of compelling small cars. A recent deal with Fiat seems dubious, since the Italian automaker doesn't have to pony up any money, and Chrysler desperately needs cash. The company is quickly burning through $4 billion in government bailout money, and with car sales down 40 percent from recent peaks, Chrysler may be the weakling that can't cut it in tough times.

    Dollar Thrifty Automotive Group. (DTG; about 7,000 employees; stock down 95%). This car-rental company is a small player compared to Enterprise, Hertz, and Avis Budget. It's also more reliant on leisure travelers, and therefore more susceptible to a downturn as consumers cut spending. Dollar Thrifty is also closely tied to Chrysler, which supplies 80 percent of its fleet. Moody's predicts that if Chrysler declares Chapter 11, Dollar Thrifty would suffer deeply as well.

    Realogy Corp. (Privately owned; about 13,000 employees). It's the biggest real-estate brokerage firm in the country, but that's a bad thing when there are double-digit declines in both sales and prices, as there were in 2009. Realogy, which includes the Coldwell Banker, ERA, and Sotheby's franchises, also carries a high debt load, dating to its purchase by the Apollo Group in 2007 - the very moment when the housing market was starting to invert from a soaring ride into a sickening nosedive. Realogy has been trying to refinance much of its debt, prompting lawsuits. One deal was denied by a judge in December, reducing the firm's already tight wiggle room.

    Station Casinos. (Privately owned, about 14,000 employees). Las Vegas has already been creamed by a biblical real-estate bust, and now it may face the loss of its home-grown gambling joints, too. Station - which runs 15 casinos off the strip that cater to locals - recently failed to make a key interest payment, which is often one of the last steps before a Chapter 11 filing. For once, the house seems likely to lose.

    Loehmann's Capital Corp. (Privately owned; about 1,500 employees). This clothing chain has the right formula for lean times, offering women's clothing at discount prices. But the consumer pullback is hitting just about every retailer, and Loehmann's has a lot less cash to ride out a drought than competitors like Nordstrom Rack and TJ Maxx. If Loehmann's doesn't get additional financing in 2009 - a dicey proposition, given skyrocketing unemployment and plunging spending - the chain could run out of cash.

    Sbarro. (Privately owned; about 5,500 employees). It's not the pizza that's the problem. Many of this chain's 1,100 storefronts are in malls, which is a double whammy: Traffic is down, since consumers have put away their wallets. Sbarro can't really boost revenue by adding a breakfast or late-night menu, like other chains have done. And competitors like Domino's and Pizza Hut have less debt and stronger cash flow, which could intensify pressure on Sbarro as key debt payments come due in 2009.

    Six Flags. (SIX; about 30,000 employees; stock down 84%). This theme-park operator has been losing money for several years, and selling off properties to try to pay down debt and get back into the black. But the ride may end prematurely. Moody's expects cash flow to be negative in 2009, and if consumers aren't spending during the peak summer season, that could imperil the company's ability to pay debts coming due later this year and in 2010.

    Blockbuster. (BBI; about 60,000 employees; stock down 57%). The video-rental chain has burned cash while trying to figure out how to maximize fees without alienating customers. Its operating income has started to improve just as consumers are cutting back, even on movies. Video stores in general are under pressure as they compete with cable and Internet operators offering the same titles. A key test of Blockbuster's viability will come when two credit lines expire in August. One possible outcome, according to Valueline, is that investors take the company private and then go public again when market conditions are better.

    Krispy Kreme. (KKD; about 4,000 employees; stock down 50%). The donuts might be good, but Krispy Kreme overestimated Americans' appetite - and that's saying something. This chain overexpanded during the donut heyday of the 1990s - taking on a lot of debt - and now requires high volumes to meet expenses and interest payments. The company has cut costs and closed underperforming stores, but still hasn't earned an operating profit in three years. And now that consumers are cutting back on everything, such improvements may fail to offset top-line declines, leading Krispy Kreme to seek some kind of relief from lenders over the next year.

    Landry's Restaurants. (LNY; about 17,000 employees; stock down 66%). This restaurant chain, which operates Chart House, Rainforest Café, and other eateries, needs $400 million in new financing to finalize a buyout deal dating to last June. If lenders come through, the company should have enough cash to ride out the recession. But at least two banks have already balked, leading to downgrades of the company's debt and the prospect of a cash-flow crunch.

    Sirius Satellite Radio. (SIRI - parent company; about 1,000 employees; stock down 96%). The music rocks, but satellite radio has yet to be profitable, and huge contracts for performers like Howard Stern are looking unsustainable. Sirius is one of two satellite-radio services owned by parent company Sirius XM, which was formed when Sirius and XM merged last year. So far, the merger hasn't generated the savings needed to make the company profitable, and Moody's thinks there's a "high likelihood" that Sirius will fail to repay or refinance its debt in 2009. One outcome could be a takeover, at distressed prices, by other firms active in the satellite business.

    Trump Entertainment Resorts Holdings. (TRMP; about 9,500 employees; stock down 94%). The casino company made famous by The Donald has received several extensions on interest payments, while it tries to sell at least one of its Atlantic City properties and pay down a stack of debt. But with casino buyers scarce, competition circling, and gamblers nursing their losses from the recession, Trump Entertainment may face long odds of skirting bankruptcy.

    BearingPoint. (BGPT; about 16,000 employees; stock down 21%). This Virginia-based consulting firm, spun out of KPMG in 2001, is struggling to solve its own operating problems. The firm has consistently lost money, revenue has been falling, and management stopped issuing earnings guidance in 2008. Stable government contracts generate about 30 percent of the firm's business, but the firm may sell other divisions to help pay off debt. With a key interest payment due in April, management needs to hustle - or devise its own exit strategy.

    - With Carol Hook, Danielle Burton and Stephanie Salmon

  2. Join Date
    Sep 2003
    Hirap talaga buhay........

    Most Displaced Workers That Can’t Find Jobs, Likely to Fall Ill -- study

    Workers fired from regular jobs face not only outright income losses but also diminished employment prospects, and potentially catastrophic and fatal health risks. They are also likely to stop sending children to college because they can no longer borrow money.

    Almost seven of every ten workers who lost wage-paying jobs are unable to find similar work even after five years of looking, according to a case study sponsored by the Angelo King Institute of the De La Salle University and presented before a labor assembly over the weekend.

    The study, based on a survey last year of workers fired from garments maker Novelty Phils Inc. in Paranaque city in September 2003, also found that laid-off workers are likely to get sick from a variety of ailments ranging from frequent headaches to hypertension and strokes.

    “In more than a few cases, these illnesses lead to workers’ death,” said the study’s author, economist Clarence Pascual, who spoke before a forum sponsored by the party list group Partido ng Manggagawa (Workers’ Party) over the weekend.

    The case study, while based on only 150 respondents, raises important issues that government, employers and labor groups should take into consideration in crafting tripartite plans to address the impact of the global financial crisis on jobs in the Philippines. It is one of the few studies that look at plight of displaced workers and their chances of finding jobs again after being laid-off.

    The Department of Labor said that more than 40,000 workers have lost their jobs since late last year while another 33,000 have seen their pay cut because of flexible work arrangements. Government and private economists believe job losses could reach a few hundred thousands more as global economic downturn continues.

    Wilson Fortaleza, leader of the Partido ng Manggagawa, one of the few labor-based parties that won a seat at the House of Representatives, said the government’s usual programs to create employment, such as sponsoring one job fair after another, will not work amid the sharp economic slowdown.

    He said: “The study covered a period when the economy was doing relatively well – GDP growth reached 7.2 per cent in 2007 -- and yet most of workers surveyed could not find jobs. How much more now that the economy is slowing?”

    Pascual said one implication of the study is the need for the government to commit to a strategy of full employment, and expanded short-term relief measures.

    Being fired from a job is extremely costly to workers and their families, he said. On average, displaced workers from Novelty who managed to land another wage job took a year and two months to find work. But only 32 per cent did so in the five-year period between 2003, when they were fired, and 2008 when the survey by conducted. As of last year, only 16 per cent had wage work. Worse, the current jobs paid almost quarter less than the previous jobs.

    Pascual also urged the government to consider offering unemployment assistance, extended free health coverage, and educational loans and scholarships for children of displaced workers.

    He said the Philippine Health Insurance Corp., which has built up retained earnings of almost P30 billion on top of its reserve fund of P37 billion -- in part by paying out less benefits to private sector workers than their contributions – should continue to cover displaced workers unable to pay premiums for five more years instead just three months.

    “With the loss of work-related health insurance, laid off workers cannot afford the high cost of drugs and health care. Loss of health insurance can also impact on young children,” he said.

    He added the Social Security System should use its vast resources, also built up from contributions of private-sector employees, to provide direct assistance, scholarships and educational loans to displaced workers rather than investing in an “economic stimulus package” of dubious economic and investment merit.

    Pascual noted that loss of regular jobs also increases the risk of children stopping going to school, especially college.

    “Surprisingly, production workers despite minimum level wages were able to send children to college, relying on loans from employers, friends and informal lenders,” he said. “Their regular job was their biggest asset, a gold-standard collateral in the eyes of creditors. The loss of a regular job means loss of access to credit, which could mean children dropping out of school or the inability to meet costly contingencies.”

    The Partido ng Manggagawa has outlined a five-point “bail-out package” for labor that it is urging the government to adopt in programs to address the economic slowdown. These include: subsidy from SSS, Government Service Insurance System (GSIS), and Overseas Workers Welfare Administration (OWWA); tax refund equivalent to two months salary; government employment program to help the three million unemployed; Philhealth coverage for workers affected by layoffs that would last until they find a new job; and moratorium on the eviction of alleged illegal settlers.

  3. Join Date
    Jul 2007
    Playing devil's advocate. Are we experiencing a downturn in OFWs leaving? Read in a paper that we are even unable to meet the demand of health practicioners in the West. Meaning there could be more jobs still out there?

    Also what is the percentage of laid off factory workers vs OFws sent out? Would it be fair to say that a factory worker earns less than an OFW? Is media overplaying the crisis? Because no offense to factory workers but would it be fair to say they contribute less to consumer expenditure. Of course one can argue that the closing of factories is loss in revenue.

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What companies/industries are hit by global economic crisis and are laying off?