Drama over UA deficits, reaching the middle class in China and the potential impact of Allens’ bankruptcy on the Siloam Springs economy are part of the Northwest Arkansas Friday Wire for Jan. 10.
NOTES & ANALYSIS
• Corporate job losses
We’ll likely found out sooner rather than later what the loss of a corporate headquarter presence will have on the Siloam Springs economy. A federal bankruptcy judge has approved a $148 million bid by Seneca Foods to buy Siloam Springs-based Allens Inc., which filed for bankruptcy in December.
Allens reported in bankruptcy documents that it had 1,173 employees, with 162 of those being salaried jobs. Many of those salaried jobs are likely based in Siloam Springs, and it’s doubtful that Seneca will need a second corporate presence. Siloam Springs is part of the booming Northwest Arkansas economy, but a loss of 100 or more corporate jobs will not be easily or soon absorbed.
• The drama over UA financial deficits
Odds are that no (more) heads will roll resulting from more than $6.5 million in deficits in the Advancement division of the University of Arkansas. Several high profile UA employees have been fired, but UA Chancellor G. David Gearhart appears to have avoided direct jeopardy.
In September 2013, Roger Norman, director of the state’s division of Legislative Audit, forwarded an investigative report to Prosecuting Attorney John Threet of Fayetteville. Threet eventually decided to not pursue an investigation based on the audit report.
Testimony before several Legislative panels included accusations that Gearhart was culpable in a cover up related to the deficits, but Gearhart has emerged (relatively) clean.
Following are a few stories posted this week on The City Wire that we hope you didn’t miss. But in case you missed it ...
• Wal-Mart’s China plan
China holds huge opportunity for Wal-Mart Stores and the retail behemoth has pledged to stay the course by building on the billions in annual sales it recorded there last year.
• Obamacare and premiums
The impact of health coverage through Obamacare was touted as a way to cap rising insurance costs and provide benefits to the masses of uninsured. But as 2014 gets under way many Americans are finding that is not exactly the case.
• Auto sales and the Internet
The persistent car salesman trying to put a customer behind the wheel of a car they were not looking for is likely a relic of the past thanks to the Internet.
NUMBERS ON THE WIRE
90%: The number of shoppers in China who arrive at Sam’s Club in a car, giving them the ability to stock up and buy more volume. This compares to 10% of Walmart China’s shoppers at a supercenter.
$192 million per day: The amount of money U.S. families spend supporting their children’s sports activities. That ranges from gear, uniform fees, private lessons and travel to games often played each weekend during their appropriate seasons.
55 pounds: Per person beef consumption in the U.S. in 2012. Beef consumption has fallen more than 20 pounds per person since the mid-1970s.
11,694: Number of unemployed persons in the Northwest Arkansas metro area during November, down from the 12,351 in October but more than then 11,069 in November 2012.
OUTSIDE THE WIRE
• National attention for Mulberry, Ark.
Ray Chung's family has been in the food business for more than 30 years and a few years ago, they decided to produce edamame on American soil, instead of importing it from China. After months of research, the Chungs opened their first edamame factory in Mulberry, Arkansas, which is a huge surprise to most people.
• The cost of the so-called Polar Vortex
Hunkering down at home rather than going to work, canceling thousands of flights and repairing burst pipes from the Midwest to the Southeast has its price. By one estimate, about $5 billion.
• Want to Save Money? Stop Thinking About the Big Picture
Many of us made a New Year’s resolution to save more money. Just like the resolutions to go to the gym more and eat better, though, our financial resolve will probably fall by the wayside before the snow melts. A new study says that’s because you’re probably going about it all wrong.
WORD ON THE WIRE
“Frankly, this is another example of a pattern of shameful behaviors designed to protect themselves rather than be honest and accountable. Ladies and gentlemen, something is rotten in Fayetteville.”
– Brad Choate, a former UA employee in charge of the fundraising division, during recent Legislative Audit hearings into budget shortfalls at the UA Division of Advancement
“This could be the last hurrah for these low, low rates and a good time for consumers to pay down credit card balances and eliminate those home equity loans and other variable interest debt they have acquired in recent years.”
– Greg McBride, chief economist for Bankrate.com, in noting that recent tapering intentions from the Federal Reserve should push mortgage rates higher in 2014
"I am not downplaying what has occurred, but there is no scandal, no conspiracy and no malicious intentional disregard of the law. If there were, it would apparently involve multiple offices and agencies. It was an oversight that should have been noticed and corrected long before now and by multiple people including myself."
– Lt. Gov. Mark Darr, R-Ark., speaking for the first time since being slapped with an $11,000 fine by the Ethics Commission for misspending campaign and state funds.
"Going back to an increase in awareness, I don't believe the problem became that much worse. It's just during the months of working on this legislation, more people were talking about it. Our progress was in the news a number of times and we talked about the hotline a number of times. I'd like to believe the increase was more to do with people having greater knowledge."
– House Minority Leader Greg Leding, D-Fayetteville, speaking about the increase in calls to the human trafficking hotline in 2013, the same year the General Assembly passed laws tightening laws that address the problem.