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Oldmanladyluck

Cleveland: General Business & Economic News

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^ I think it's the workforce number that will be revised.

 

@cle_guy90 Sorry for tripping you up by my edit (not noted by the software) while you were posting. 

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A quick take looking at the numbers as they show the overall economy grew by only 0.9% for the month of October...

 

1) Our Manufacturing sector looks to be in recession, showing six months of negative growth.  This will impact our employment numbers at one point or another unless other sectors take up the slack.  Speaking of which...

 

2) Our Education and Health sector is employing close to 100,000 more people than our manufacturing sector.  I know we love to push the "Blue-Collar-Work-Ethic"... but when does the word get out about this officially being an Eds and Meds town?

 

3) The Information sector has been in decline since 2002 and shows no signs of slowing.  The sector now only employs roughly 13,000, down from 20,000 in 2002.  This is another drag on the local economy which is being overlooked.

 

4) Our Professional and Business Services sector now employs close to 50,000 more than our Manufacturing sector, and has grown by 30,000 jobs since the 2002 recession.

 

5) There are roughly 4,000 less people employed in our Trade, Transportation, and Utilities sector than at this point just last year, though the numbers look to be a bit more volatile than other sectors.  

 

Pluses and minuses, but overall growth (to be taken with a grain of salt with the BLS...  I'll never get over the revision they did when we were showing 2% growth overall for the year which was revised to 0.9%).

Edited by Oldmanladyluck
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I think that part of the problem is that people on the coasts who might relocate to take some of these jobs see how much less these jobs are paying. Of course, that's the point of why the jobs are here. It is to save labor costs. Those able to relocate may not be willing to relocate when they see how much less the jobs are may not be aware that the cost of living is here is roughly half of what it is on the coasts. If they  were aware, how many would relocate to Cleveland or other non-coastal cities? BTW, Kevin Barry is one of the few broadcast journalists that I like in Cleveland. Usually picks interesting subjects he does a good job with conveying information and context...

 

'We haven't been at the table': Cleveland companies struggle to find talent that reflects the communities

https://www.news5cleveland.com/a-better-land/we-havent-been-at-the-table-cleveland-companies-struggle-to-find-talent-that-reflect-the-communities

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"Life is 10% what happens to you and 90% how you respond." -- Coach Lou Holtz

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Cleveland Cliffs to acquire AK Steel for $3 billion. 

 

https://www.bizjournals.com/cincinnati/news/2019/12/03/ak-steel-to-be-acquired.html?ana=yahoo&yptr=yahoo

 

Congrats to Cleveland financial reporting for missing another big one.

 

Correction:  Other sources say $1.1 billion in CLF stock is the price.

Edited by Dougal
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Interesting. I saw way upthread on the first page i think that CC had bought a coal supplier called Alpha Natural Resources for $9 billion in 2008 out of Virginia.  That couldn’t have been a very good deal unless they were a mining technology company or had high grade mines.

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11 minutes ago, audidave said:

Interesting. I saw way upthread on the first page i think that CC had bought a coal supplier called Alpha Natural Resources for $9 billion in 2008 out of Virginia.  That couldn’t have been a very good deal unless they were a mining technology company or had high grade mines.

 

I believe that acquisition fell through - thank God.

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^ A  couple of interesting comments in the above cited Cincy report:

 

AK is expected to retain a "significant presence" in West Chester, their current headquarters.  I take that to mean it will be the operational HQ for steel production. Things like legal, finance, and other common management elements will probably move to Cleveland, producing a little bump up at Cliff's downtown Cleveland offices.

 

A sad comment: "The announcement follows an ongoing trend of local public companies disappearing."  Sounds like the Cincy biz journal is getting as pessimistic as some Cleveland folks.

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Cleveland Cliffs, in terms of revenue, is a third the size of AK Steel. This is a small fish with giant profits taking over a big fish with small profit margin. This will catapult Cleveland Cliffs well into Fortune 500 list. 

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2 hours ago, Dougal said:

^ A  couple of interesting comments in the above cited Cincy report:

 

AK is expected to retain a "significant presence" in West Chester, their current headquarters.  I take that to mean it will be the operational HQ for steel production. Things like legal, finance, and other common management elements will probably move to Cleveland, producing a little bump up at Cliff's downtown Cleveland offices.

 

A sad comment: "The announcement follows an ongoing trend of local public companies disappearing."  Sounds like the Cincy biz journal is getting as pessimistic as some Cleveland folks.

 

Often times, "significant presence" is far less than the "existing presence." I expect more than a little bump at Cliff's Cleveland offices. AK has about 2,400 employees in Butler County (https://www.bizjournals.com/cincinnati/subscriber-only/2018/02/09/largest-butler-county-employers.html). The company reports that it has about 1,730 hourly workers at its Middletown plant (https://ir.aksteel.com/news-releases/news-release-details/iam-members-ratify-labor-agreement-ak-steel-middletown-works).

 

Does that mean it has 700 employees at its West Chester HQ?

 

Perhaps not. I've seen mentions that AK has 9,500 employees companywide. But the second link above says AK has 9,200 manufacturing employees. So perhaps it has only 300 HQ workers?

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^ ^^ Yep. In corporate-speak “retain a significant presence” usually means “We’re gonna downsize, but not all at once.” 

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And they reckon that the last thing she saw in her life was
Sting, singing on the roof of the Barbican

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3 hours ago, Dougal said:

Cleveland Cliffs to acquire AK Steel for $3 billion. 

 

https://www.bizjournals.com/cincinnati/news/2019/12/03/ak-steel-to-be-acquired.html?ana=yahoo&yptr=yahoo

 

Congrats to Cleveland financial reporting for missing another big one.

 

Correction:  Other sources say $1.1 billion in CLF stock is the price.

 

It really is pathetic that a Fortune 500 company has been bought by a Cleveland company and there still is nothing from either Cleveland.com or Crains. 

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26 minutes ago, cle_guy90 said:

 

It really is pathetic that a Fortune 500 company has been bought by a Cleveland company and there still is nothing from either Cleveland.com or Crains. 

 

Even our good friends from Pittsburgh are on it:

 

https://www.post-gazette.com/business/powersource/2019/12/03/AK-Steel-owner-of-Butler-Works-will-be-acquired-by-iron-maker-Cleveland-Cliffs/stories/201912030104

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1 hour ago, KJP said:

 

Often times, "significant presence" is far less than the "existing presence." I expect more than a little bump at Cliff's Cleveland offices.

 

The joint presser cites $120 million in annual savings from elimination of common staff functions. That says to me that the growth in Cleveland will be meaningful but not huge.

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These raw material companies don't have massive HQ staff so even if they combine the two, it wouldn't be a massive change. Hopefully the HQ stays in Cleveland of course.

Edited by Mendo

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17 minutes ago, Dougal said:

 

The joint presser cites $120 million in annual savings from elimination of common staff functions. That says to me that the growth in Cleveland will be meaningful but not huge.

 

That's only a small part of the source of the savings, as noted in the presser.

 

2 minutes ago, Mendo said:

Hopefully the HQ stays in Cleveland.

 

Yes, it is.

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"Life is 10% what happens to you and 90% how you respond." -- Coach Lou Holtz

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Just now, smith said:

My CLF stock certainly ain't growing today......

 

No but AK Steel's certainly is. And it may be a good time to buy some CLF.


"Life is 10% what happens to you and 90% how you respond." -- Coach Lou Holtz

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1 hour ago, cle_guy90 said:

It really is pathetic that a Fortune 500 company has been bought by a Cleveland company and there still is nothing from either Cleveland.com or Crains. 

 

AK Steel was #443 in the 2019 list. The combined revenue for the two should put the new company around 340-ish.

 

Edited by Mendo
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My own meager contribution....

 

Jacobs+lot-surveyholes-111619-KJP-BIG-1C

 

TUESDAY, DECEMBER 3, 2019

Fortune 500 company HQ is coming to downtown Cleveland

 

In case you missed the major-league news, and if you rely on Cleveland local news media you probably did, but another Fortune 500 company will establish its corporate headquarters in downtown Cleveland.

Today, Cleveland-Cliffs Inc. announced it will be acquiring AK Steel Holding Corp. for $1.1 billion in an all-stock deal. In terms of revenues, the minnow just swallowed the whale. Cliffs generated about $2.12 billion in net revenue in 2018 whereas AK generated $6.08 billion.

At total net revenues of $8.2 billion in 2018, the combined company would have ranked as the 350th-largest company in the United States. Among Northeast Ohio firms, that would put the combined company between No. 256 Parker-Hannifin and No. 383 J.M. Smucker.

 

MORE:

https://neo-trans.blogspot.com/2019/12/fortune-500-company-hq-is-coming-to.html

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13 minutes ago, skiwest said:

Gee, maybe they can get their name on the building now.

 

It's on there now, but only at the upper-right of the atrium facing Public Square. Methinks Cliffs might start shopping for new office space. 200 Public Square doesn't have the contiguous space necessary to accommodate Cliffs' growth. They would make a decent-sized anchor tenant in a new building or in Somera Road's totally empty 564,976-square-foot Ellipse -- BROCHURE.

 

2 minutes ago, ASPhotoman said:

So was this the Fortune 500 HQ you were previous hinting to? Or is there something else on the horizon?

 

Something else.

Edited by KJP
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2 minutes ago, Mendo said:

The only article I can find about Cliff's headquarters was from 2008 when they moved to 200 Public Square. At the time they had just 140 HQ employees with plans to add 80 more.

 

https://www.cleveland.com/business/2008/07/clevelandcliffs_moving_headqua.html

 

 

Sounds like Cliffs Natural Resources added a few more jobs than expected. It's hard to say what Cliffs HQ employment is here. I have a hard time believing it's anywhere near 1,000. But the square footage they're leasing suggests it is.


"Life is 10% what happens to you and 90% how you respond." -- Coach Lou Holtz

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5 minutes ago, KJP said:

Sounds like Cliffs Natural Resources added a few more jobs than expected. It's hard to say what Cliffs HQ employment is here. I have a hard time believing it's anywhere near 1,000. But the square footage they're leasing suggests it is.

 

Agreed it's probably a lot more than the 220 they planned for in 2008. I forgot they leased that much space since then. Thanks for the reminder.

 

https://www.crainscleveland.com/article/20110606/FREE/306069966/cliffs-adds-space-at-downtown-hq

 

Quote

Combined with Cliffs' existing global headquarters on floors 33, 34 and part of 32, the new space on floors 30 and 31 and subleased space on floor 5 give the company nearly 200,000 square feet in the building. It leased 70,000 square feet when the big iron ore producer moved its global headquarters to the building in 2008, said Brian Boehmcke, managing director of the tower's owner, Harbor Group International of Norfolk, Va.

 

Edited by Mendo
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1 hour ago, smith said:

My CLF stock certainly ain't growing today......

 

AK is a risky purchase for CLF; the world is awash in steel capacity these days.  Goncalves, however,  has a rep for making these things work.

 

Now we wait for the City Block/Bedrock announcement due today ...  I'm guessing the Cleveland press will cover this one.

Edited by Dougal

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58 minutes ago, PaxtonMarley said:

So Ken, I don't know if you addressed it, but are the AK Steel white collar jobs moving to Cleveland, or will CLF maintain two separate HQs?

 

The HQ will be here in Cleveland. Most integrated steel mills like the Middletown Works have a plant office with a 100 or more jobs including payroll, engineering, labor relations, safety inspectors and the like. Plus AK Steel has its research facility there so I suspect that that also may count toward some of the "significant presence" that will be retained in that area.

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"Life is 10% what happens to you and 90% how you respond." -- Coach Lou Holtz

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If only our local media paid as much attention to the employment wins as it does to the losses, or even the hollow threat of a potential loss, we might realize the jobs growth that is occurring here.

 

My question is when is the local media going to call @KJP with a job offer the way he's been kicking their butts lately.

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1 hour ago, mu2010 said:

 

My question is when is the local media going to call @KJP with a job offer the way he's been kicking their butts lately.

 

After seeing my article yesterday, an editor for a local media outlet contacted me yesterday to explain why they didn't have the Cliffs-AK story until the afternoon.

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"Life is 10% what happens to you and 90% how you respond." -- Coach Lou Holtz

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45 minutes ago, KJP said:

 

After seeing my article yesterday, an editor for a local media outlet contacted me yesterday to explain why they didn't have the Cliffs-AK story until the afternoon.

And what was the reason??????

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10 minutes ago, mack34 said:

And what was the reason??????

 

Not everyone was back from vacation. 

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"Life is 10% what happens to you and 90% how you respond." -- Coach Lou Holtz

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