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Archive for February, 2013

Boeing Sikorsky unveil helicopter of the future

Thursday, February 28, 2013 by:Rob Varnon
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Boeing and Sikorsky said Thursday they have the U.S. Military’s helicopter of the future.

Sikorsky Boeing JMR conceptual rendering. Contributed art.

The aviation giants have teamed up to pursue the Army’s Joint Multi-Role contract and will offer up a new breed of helicopter based on Sikorsky’s X2.

The X2 is Sikorsky’s experimental helicopter which operates with counter rotating rotors on top of the aircraft and a pusher propeller in the back. Boeing and Sikorsky are offering their plan for Phase 1 of the JMR Technology Demonstrator  program.Winning this competition could mean billions of dollars in business as the plan is to use one type of aircraft for multiple branches and platforms.

“The Sikorsky-Boeing proposal will demonstrate how X2 Technology with counter-rotating coaxial main rotors and a pusher propeller, and advanced fly-by-wire system, will deliver efficient 230-knot cruise airspeed, improved hover efficiency, and weight optimized design in an affordable package,” said Samir Mehta, president of Sikorsky Military Systems. “By leveraging our proven design, we can offer the Army reduced risk, a 100-knot improvement in speed, a 60 percent improvement in combat radius and 50 percent better high-hot hover performance.”

“The Sikorsky-Boeing team for JMR TD is truly a team of equals,” said Leanne Caret, vice president and general manager of Boeing’s Vertical Lift division. “Sikorsky will take the lead role in this JMR TD Phase 1 proposal, and Boeing will take a lead role for Phase 2, for the mission systems demonstrator program.

“Our companies are fully committed to the long term nature of the Future Vertical Lift initiative and we will contribute equally in terms of capital, technological capability and risk on our path to the FVL with the Army,” said Caret.

Proposals for JMR TD Phase 1 are due to the U.S. Army Aviation Applied Technology Directorate by March 6, 2013. The Army is expected to announce its selection of one or more winning bids in late 2013. Demonstrator aircraft are expected to fly in 2017.

After 4 years of frugality, Americans whip out credit cards

Thursday, February 28, 2013 by:Rob Varnon
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Debt levels grew in American in the fourth quarter. Illustration RD Varnon

The Federal Reserve Bank of New York said consumers ended 16 quarters of deleveraging in the fourth quarter as outstanding household debt in America climbed to $11.34 trillion.

The NYFED said mortgage debt was virtually flat in the fourth quarter but non housing debt from credit cards, auto and student loans all increased in the last quarter of 2012.

“The data provides early evidence that consumers may be reaching the end of the four year deleveraging cycle, though we’ll need to see if this is sustained in upcoming quarters,” said Andrew Haughwout, vice president and economist at the New York Fed. “At the same time, we observed mixed developments, mortgage originations increased and fewer accounts entered the foreclosure pipeline but delinquency rates remain considerably higher than pre-crisis levels.”

Total outstanding debt in the nation has fallen from its high of $12.68 trillion in the third quarter of 2008. The NYFED said Americans have reduced debt levels every quarter since the fourth quarter of 2008 until the end of 2012.

With many Americans going years without pay increases that have kept rate with rising costs, some have had to turn to credit cards and other loans for many every day expenses. Others, who have trimmed debt, now feel more comfortable taking new obligations on.

American households added $15 billion in auto loans, $10 billion in student loans and $5 billion in credit card debt during the quarter. Auto loans, at $783 billion are their highest levels in nearly four years.

Outstanding student loan debt now stands at $966 billion. The percent of student loan balances 90 or more days delinquent increased again and currently stands at 11.7 percent.

Overall:

  • 8.6 percent of total debt was in some stage of delinquency compared with 8.9 percent the previous quarter.
  • Delinquency rates for mortgages improved to 5.6 percent from 5.9 percent the previous quarter.
  • Delinquency rates for home equity lines of credit, which stood at 4.9 percent in the rhitd quarter, dropped to 3.5 percent – a decline primarily reflecting higher charge-offs of delinquent HELOCs this quarter.
  • About 210,000 individuals had a new foreclosure notation added to their credit report, a quarterly slowdown of 13.3 percent, continuing a downward trend.

Ridgefield-based hedge fund executives indicted

Tuesday, February 26, 2013 by:Rob Varnon
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David B. Fein, United States Attorney for the District of Connecticut, and Kimberly K. Mertz, Special Agent in Charge of the New Haven Division of the Federal Bureau of Investigation, announced Tuesday a federal grand jury sitting in New Haven returned a 19-count indictment charging three executives of New Stream Capital, LLC, a Ridgefield-based hedge fund, with conspiracy, securities fraud and wire fraud offenses.

The SEC has also filed a civil complaint against the men.

The feds say that New Stream Cap Managing Partners David Bryson, 44 of Ridgefield and Bart Gutekunst, 61 of Weston, with New Stream CFO Richard Pereira, 40 of Ridgefield, surrendered in the morning to the FBI in New Haven.
The defendants appeared before U.S. Magistrate Judge Donna F. Martinez in Hartford and pleaded not guilty to the charges.

The trio is charged with lying to investors about the status of its offshore funds.

Bryson and Gutekunst were released on $5 million bonds and Pereira on a $300,000 bond.

“As alleged, fearing the loss of their fund’s largest investor, these defendants orchestrated a scheme to deceive investors in order to obtain and maintain investments,” stated U.S. Attorney Fein.  “The U.S. Attorney’s Office and our many partners on the Connecticut Securities, Commodities and Investor Fraud Task Force are committed to protecting investors and the integrity of American capital markets.”

“It goes without saying that investing carries certain risks,” stated FBI Special Agent in Charge Mertz.  “Those risks, however, should not include any chance that hedge fund managers or other investment professionals are lying to or deceiving their investors about the current state of investments.  Investors have a right to full disclosure.  Today’s arrests underscore the FBI’s continuing commitment to investigate those who provide material misrepresentations to investors.”

According to the indictment and statements made in court, in November 2007, New Stream launched new feeder funds, one based in the United States  and a series of funds based in the Cayman Islands. New Stream also announced that its existing Bermuda Fund would be closing, and all foreign investors would have to move their investments into the Cayman Fund.  Rather than transfer into the new structure, New Stream’s largest investor placed a redemption on its whole investment in the Bermuda Fund in March 2008.

At risk of losing their largest investor, it is alleged the three men set in motion a scheme to secretly keep the Bermuda Fund open and give priority to Bermuda Fund investors in an effort to reverse the redemption.  As part of the scheme, New Stream staff secretly reorganize the fund structure so as to effectuate the priority change.

The indictment further alleges that New Stream failed to inform investors who had transferred from the Bermuda Fund into the Cayman Fund that the Bermuda Fund was remaining open or that it was being given priority over the Cayman Fund.  Moreover, New Stream continued to market New Stream to investors by concealing from them the magnitude of the actual pending redemptions and by using deceptive marketing materials that failed to disclose the existence of New Stream’s Bermuda Fund.

Each of the defendants is charged with one count of conspiracy, 10 counts of securities fraud and eight counts of wire fraud.  The conspiracy charge carries a maximum term of imprisonment of five years, and the securities fraud and wire fraud charges carry a maximum term of imprisonment of 20 years on each count.

This matter is being investigated by the Federal Bureau of Investigation and the U.S. Department of Labor, Office of Inspector General, with the assistance of the Securities and Exchange Commission.  The case is being prosecuted by Assistant United States Attorneys Liam Brennan and Michael S. McGarry.

Bankruptcy bid leaves 285 CT media pros in limbo

Tuesday, February 26, 2013 by:Rob Varnon
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A bid to buy the New Haven Register’s parent company Journal Register Co., which is in bankruptcy, is still pending in federal court, but JRC has told the state it expects the deal to close in April and 285 media pros will lose their jobs.

However, JRC management has said it has asked the new ownership to retain all the employees.

The mass layoff notice JRC filed earlier this month is a bit of a technicality, though that’s not much comfort for employees.
Here’s a brief synopsis on this story:
JRC filed for Chapter 11 Bankruptcy in September of 2012. As part of its plan, the ownership decided it was in its best interest to auction off the business, and got a stalking horse bid from 21st CMH Acquisition, an affiliate of Alden Capital, which is itself a secured creditor/owner of JRC to the tune of $150 million.
The company built up a large load of debt through acquisitions over the course of nearly two decades before the newspaper industry hit the skids. Many companies have also struggled, including Tribune.
No other bids were accepted by Feb. 11 and so JRC filed notice it would accept the Alden affiliate’s offer. That offer would provide about $1.75 million in cash, part of which will go to unsecured creditors, pay off some debt obligations and represents the equivalent of $117.5 million in debt. The actual amount can be higher as debts have climbed during the procedure.
The Connecticut properties up for sale include the Register, The Middletown Press, Torrington Register Citizen, Connecticut Magazine and several others.
The court has to approve the deal, but has not yet done so, according to bankruptcy records.
In the meantime, the 285 employees in Connecticut, which includes sales, reporters, editors, finance and other staff, will lose their job when the deal closes, technically.
Presumably the company will continue to operate so many of these workers will be offered their old jobs, but whether all will keep earning paychecks is unclear.
It’s not unheard of in situations like this for a company to file a mass layoff notice. Bus companies that lose school district contracts do it, even though many of the bus drivers will be hired by the winner of the new contract. But in some cases, people are forced to reapply for their jobs with the new company.

CT office workers got more pink slips in fourth quarter 2012

Monday, February 25, 2013 by:Rob Varnon
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The job market for office workers remained a rough one in 2012 as the sector continued to lead Southwest Connecticut for job losses, according to the Labor Department’s quarterly survey.

The department said in the fourth quarter of 2012, there were 1,711 people who had lost office jobs in the Bridgeport Stamford market, up 18 percent from a year ago when 1,446 were hunting for jobs. The largest concentration of people who were unemployed in the Bridgeport Stamford area were former office, workers, the department said.

In Danbury, there were more unemployed office workers than any other occupation, with 287 who were jobless in the quarter, up 16 percent from a year ago, when 246 were unemployed.

The state’s unemployment picture turned ugly last year as statistics tracked by the U.S. Bureau of Labor Statistics showed Connecticut’s labor force was shrinking and job losses were growing. However, some economists and public officials have questioned the accuracy of the statistics.

But these fourth quarter numbers, taken from the state’s unemployment offices, which track actual unemployment insurance beneficiaries, show the job market was pretty rough at the end of 2012.

Statewide, the service sector, including healthcare and protective services, had the highest concentration of unemployed with 21 percent. Office administrators were second statewide, accounting for 16 percent of the unemployed and manufacturing was third, with 12 of every 100 unemployed coming out of a factory.

Highest concentration of unemployment by job sector for Bridgeport-Stamford region and Danbury region.

U.S. Army Chief of Staff plans to push out Black Hawk deliveries

Friday, February 22, 2013 by:Rob Varnon
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Defense News is reporting today that U.S. Army Chief of Staff Gen. Ray Odierno has signed a plan to deal with sequestration that would include extending the Black Hawk fleet modernization program by three to five years.

Sikorsky is currently sitting on a five year, $8.5 billion contract to build the new fleet of Black Hawks. Extending delivery dates would mean fewer helicopters per year for the Stratford helicopter maker, though analysts have pointed out changing the contract terms could force the Pentagon to pay penalties.

The plan is not yet official, but appears to be the one the Pentagon is prepared to follow if it must.

Automatic spending cuts, called sequestration are set to begin being phased in next month. Pentagon spending under sequestration would be trimmed by $500 billion during the next 10 years.

However, there is some expectation that the full force of sequestration will not be unleashed as Congress will eventually do something to stop full implementation later this year.

For more on the situation, visit http://www.defensenews.com/article/20130222/DEFREG02/302220018?utm_source=twitterfeed&utm_medium=twitter

Park City won’t be flushed away in April

Thursday, February 21, 2013 by:Rob Varnon
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Good news Bridgeport, come April, there’s a solid chance someone will be running the sewage treatment plants.

Mayor Bill Finch’s office said this week the Water Pollution Control Authority has a winning bidder for the city’s two sewage plants, but is still doing due diligence on the award. The city says the winner is Severn Trent, a company founded in the United Kingdom. It manages and operates water and waste water treatment plants in multiple states today.

That’s good to hear. While Bridgeport was a mess after the recent blizzard, imagine the mess if no one was there to manage this system.

This week, KGI Bridgeport, which is part of the U.K.-based Kelda Group, told the state its contract to operate the sewage treatment plant has been terminated and in April, it will terminate its 99 workers.

This is not a surprise nor is it an unusual filing for a business coming to the end of a 10-year contract. And it doesn’t mean the workers will actually lose their jobs. You see, Bridgeport’s Water Pollution Control Authority advertised the 10-year sewage treatment contract back in December of 2011, and the contract calls for the new operator to hire existing workers, in most cases. There might be some changes in management, but the workers who open and shut valves and make sure things flow properly are supposed to keep their jobs.

Black Hawk provides Sikorsky cover against sequestration

Thursday, February 21, 2013 by:Rob Varnon
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AP file photo of UTC CEO and Chairman Louis Chenevert

With concerns over sequestration hanging over his Sikorsky Aircraft, Pratt & Whitney and UTC Aerospace systems subsidiaries, Louis Chenevert, chief executive officer and chairman of United Technologies, said the company is prepared for a 10 cent hit to earnings per share in a worst case scenario.

Chenevert, speaking at the Barclays Conference, was in step with his CFO Greg Hayes, who spoke a week earlier at another conference espousing similar expectations that automatic defense spending cuts will happen in D.C. as Congress fails to reach a deal over the budget.

But UTC isn’t expecting catastrophe from sequestration for Sikorsky or Pratt.

“Sikorsky locked up Black Hawk volumes on multi-year 8,” Chenevert said, of the $8.5 billion deal the Stratford helicopter maker announced in July 2012. “We got five years of volume.”

He said he doesn’t expect much impact on UTC from sequestration in 2013, but a 10 cent impact on earnings per share was possible in a worst case scenario. This would still be withing the company’s financial guidance, however.

Overall, the top executive at UTC said, “I’m pleased with the programs we are on.”

Besides Black Hawk, he specifically mentioned the 53K, which Sikorsky is building for the Marines and the Joint Strike Fighter, which Pratt is the sole provider of engines and which UTC’s Aerospace division makes a variety of components for.

Analysts at Forecast International and The Teal Group have both said the Black Hawk is viewed as a must have contract for the military as is the 53K, which is for the Marines and is the Pentagon’s only new program.

Chenevert said he does expect impact on the afterparts business for the military.

During the conference, Chenevert also addressed concerns about the Canadian maritime helicopter deal and was in

Sikorsky Aircraft's Black Hawk gate in Stratford. The company installed the helicopter in February of 2012 and today, a multi-year contract to produce it is hoped to insulate the company from major defense budget cuts looming on the horizon. Staff photo by Brian Pounds

line with analysts, who have said despite fines and penalties, the Cyclone would ultimately provide a stage to show off the military variant of Sikorsky’s S-92.

“We are fully committed,” he said, to building “the most capable helicopter in the world”

While the company works with the Canadians over details of the contract, Chenevert was confident the Cyclone would be a win for Sikorsky and UTC.

“Other countries see what the helicopter is doing and salivate about it,” he said.

And while there has been talk about the delays and fines to the program, he noted that aircraft 26 of 28 is already on the line and being built. Four of the aircraft have been delivered and maintenance training has started in Canada.

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