Business A10
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THE DAILY HERALD
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WWW.HERALDNET.COM/BUSINESS
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SATURDAY, 09.20.2014
Russians buy up Pabst, Rainier
BRIEFLY
Lynnwood firm lands a large Navy contract
Associated Press NEW YORK — The maker of Pabst Blue Ribbon beer is being sold to Russian company Oasis Beverages for an undisclosed sum. Oasis is buying Pabst with TSG, an investment firm known for its work with consumer products companies. TSG Consumer Partners will take a minority stake in Pabst. In addition to its namesake beer, Pabst Brewing Co. makes Colt 45, Old Milwaukee and Schlitz, in addition to regional brews such as Rainier, Lone Star and Old Style. Pabst was acquired in 2010 by C. Dean Metropoulos & Co., which is known for investing in food brands, including Twinkie maker Hostess. Pabst Brewing traces its roots back to 1844 in Milwaukee. Pabst Blue Ribbon in particular has also grown in popularity among people in their 20s and 30s in part for its blue-collar and retro appeal, as well as for its cheap price. Metropoulos has in recent years enlisted comedian Will Ferrell to market the company’s beers. Still, Pabst accounts for less than 3 percent of the U.S. beer market, said Eric Shepard, executive editor of Beer Marketer’s Insights, an industry tracker. He also noted that many of the most popular beers in the U.S. are already owned by foreign companies. Anheuser-Busch InBev, which makes Budweiser and Bud Light, is based in Belgium. In a statement, Oasis Chairman Eugene Kashper called Pabst Blue Ribbon the “quintessential American brand — it represents individualism, egalitarianism and freedom of expression — all the things that make this country great.” Kashper will serve as CEO of Pabst Brewing, which will keep its headquarters in Los Angeles.
EMILY BENNETT / GRAND RAPIDS PRESS
Rob Beckett is met with cheers and applause as the first person to leave with a new iPhone 6 from the Apple Store at Woodland Mall in Grand Rapids, Michigan, on Friday.
Apple fans in frenzy as iPhone 6 arrives San Jose Mercury News SAN FRANCISCO, Calif. — Christmas came in September this year for Apple devotees, as scores of people across the country turned out early at the company’s stores on Friday to get their hands on new, supersized iPhones. The iPhone 6 and 6 Plus were met with delirious excitement by fans, many of whom had woken up at the crack of dawn — or even camped out — to be among the first to buy the new gadgets. With significantly larger screens, the latest iPhones help Apple match competitors like Samsung, which have long offered devices that blur the line between smartphone and tablet. Apple loyalists clogged San Francisco’s Marina District, where the line to enter the Apple Store wrapped around the block. Many were fatigued after a sleepless night in the cold, but they perked up once they’d secured the prized phones. Raul Ramos, a San Francisco resident, 68, was jubilant as he strolled out of the store with a gold 6 Plus in hand. “Once I got the phone, I woke right up,” said Ramos, a retired pharmacist who has camped out for every new gadget since the iPhone 3. “I’m not going home to sleep. I’m going to be playing with it.” Ramos was fourth in line, sitting just behind Klaus Bandisch, a San Francisco resident, 59, who arrived nearly 24 hours early to secure his spot. Parked in his folding chair, he said a competitive spirit drove him to be among the first to get the iPhone 6 Plus. “Second is the first loser,” said Bandisch, who is
CEO of 140AdAgency.com, a company that makes mobile websites. Exiting the store with a space grey 6 Plus, Bandisch, a first-time camper, said the device was worth the wait. “The screen is so crisp and clear,” he gushed. “I love the size, and it seems very light.” But supplies of the 6 Plus did not last for long. Tony Ring-Dowell, 26, who was about 20th in line, said the device was sold-out by the time he entered the store. He was content with his space grey iPhone 6 though. “I’m even more excited because the phone is so different,” said Ring-Dowell, a first-grade teacher. Apple offered the first glimpse of the iPhone 6 and 6 Plus last week as part of a wave of new products and services at a star-studded event. A long-awaited smartwatch stole the show, but the spruced up iPhones will mean much more for the company’s bottom line in the near term. Now that Apple has finally answered the call for larger screens, analysts expect the new iPhones to trigger a gusher of sales. More than 4 million preorders for the iPhone 6 and 6 Plus were placed the day they became available online last week, twice the volume Apple saw for the iPhone 5. If supplies don’t run out, analysts predict that Apple will sell more than 10 million iPhones this weekend, up from 9 million during the opening weekend for the iPhone 5s and 5c last year. See APPLE, Page A11
NEWS ANALYSIS
American elites fail to understand economy By Jared Bernstein The Washington Post
biz bits
WASHINGTON — Here are a few questions I’d like you to consider, and you don’t need to be an economist to give a valid responses. In fact, it’s better if you’re not. Which do you think is a bigger problem facing the U.S. economy right now: a) inflation, or b) unemployment? Do you think wages are growing: a) too quickly, or b) too slowly? Which is the bigger threat to the economy: a) that it overheats, or b) is undercooked? I’m going to make the bold assumption that most of you answered “b” on all of the above. And in a moment, I’ll provide the data to confirm your gut. What’s unsettling, and in need of explanation, is why so many influential voices, from the punditry to the markets, answer “a.” The answer, I believe, is that
America lacks a substantial political movement in support of progressive macroeconomics. The debates over full employment and Federal Reserve policy are generally dominated by the interests of the minority who worry more about inflation and asset values than those who worry about jobs and paychecks. Right now, for example, the risks facing the Fed are asymmetric in the following sense: There’s a greater chance that the Fed’s actions would hamper growth in an already weak economy than there is that its inaction would set off an inflationary spiral. Yet, the outside pressure on the Fed is asymmetric in the other direction: There’s more pressure on it to tighten than to sit tight for a “considerable time.” Obviously, important voices, most notably that of New York Times columnist Paul Krugman, are often raised in support of the need to worry a lot more
Windermere Real Estate Edmonds office is hosting a free paper shredding event from 9 a.m. to 1 p.m. today at its offices at 210 Fifth Ave. S., Suite 102. The company is asking people who participate to bring nonperishable food for a drive for Edmonds area food banks. Donations for the food drive are also welcome.
about growth, jobs and wages, than inflation and overheating. Yet the stance of the Yellen Fed data driven, correctly focused on the actual slack problem vs. the phantom inflation problem - is defensive, constantly reassuring the hawks not to worry, they’ll tighten soon enough. Historical data, current conditions and future expectations all point towards the need for continued support from monetary policy: ■■Core inflation by the Fed’s preferred measure (core personal consumption expenditures) has been at or below 1.5 percent since January 2013. ■■Average nominal wage growth has been stuck at 2 percent, with very few signs of acceleration even as the job market tightens. ■■The current gap between actual and potential gross domestic product (what GDP would be absent all this slack) amounts to more than $700
Frontier Communications has announced that enhanced broadband speeds are now available to its FiOS serviceable footprint in Washington. Frontier’s enhanced FiOS broadband network now offers speeds up to 100 megabits per second to FiOS serviceable residential areas in Snohomish, Skagit, and King counties. Customers can
call Frontier’s toll-free number for more information. The Washington State Department of Commerce will receive $300,000 from the International Trade Administration’s Market Development Cooperator Program to help the aerospace industry to generate exports to Brazil, Canada,
billion, about $2,400 per capita. Since the 2007 economic peak, the share of national income going to workers’ compensation is down about three percentage points. This is important — and hardly ever raised in this debate — because it means if the job market tightened up and workers got a bit more bargaining power, non-inflationary wage gains could be financed by a rebalancing of the profit and wage shares of national income. (And here we also see why vested interests would prefer this not be discussed.) Historically speaking, real wages of middle- and low-wage workers, especially men, have been flat for decades, and the real median household income is $5,000 lower now than in the late 1990s. Looking forward, inflationary expectations are solidly within See ELITE, Page A11
China, France, Germany, India, and the United Kingdom. These funds are expected to generate an estimated $50 million in exports during the next three years by U.S. companies. Biz Bits runs Monday through Saturday. Send your business news and photos to businessnews@heraldnet.com.
A Lynnwood company, Sound & Sea Technology, has landed a Navy contract worth as much as $99 million. The contract could run up to 42 months and covers a wide range of engineering, installation and repair work for the Navy, according to a Navy news release. It’s the fourth Navy contract Sound & Sea Technology has won since it was founded in 1999. Those agreements have resulted in $125 million in projects for the company. “We’ve had a long and successful relationship with the U.S. Navy, and we are very pleased to continue that support under this new contract,” said Sound & Sea Technology President Judith Meggitt. “We look forward to continuing to work with our partners to accomplish the EXWC mission.” The contract was awarded by the Naval Facilities Engineering Command’s Engineering and Expeditionary Warfare Center, which is located in Port Hueneme, California. Sound & Sea Technology has a division in Ventura, California, and it has affiliated operations in Cork, Ireland.
Germany’s SAP buys local firm Concur Technologies is being sold to business software giant SAP in a deal valued at about $8.3 billion. Founded in August 1993, Bellevuebased Concur develops and sells software allowing companies to manage business and travel expenses. SAP, based in Walldorf, Germany, offers software to manage business operations and customer relations. The majority of SAP customers do not run Concur, and together the two will have more than 50 million users in the cloud, making them the world’s second-largest cloud company by revenue, the companies said. The Concur board unanimously approved the sale, which is expected to close in the fourth quarter of this year, or the first quarter of 2015. The deal is subject to stockholder approval and regulatory clearance.
Big job cut plans hamper port talks West Coast shippers and dockworkers are struggling to reach a labor agreement as terminal operators replace as many as half of laborers at some ports with robots in the largest technological change in half a century. The two sides are discussing how to retrain and preserve jobs for dockworkers as automation reduces the number of positions at one Los Angeles terminal by 40 percent to 50 percent after changes are completed in 2016, according to a Harbor Department report released in April. The International Longshore and Warehouse Union and the Pacific Maritime Association are negotiating a new contract for 20,000 West Coast dockworkers, more than two months after a six-year agreement expired. A strike or lockout could cost the U.S. economy $2 billion a day, according to the National Retail Federation and National Association of Manufacturers. From Herald news services
Amazon . . 331.32 6.32 Boeing . . . 129.35 0.77 Costco . . . . 126.50 0.02 Crane . . . . . 67.57 -0.76 FrontierCom . 6.59 0.05 HeritageFin 16.96 0.04 Microsoft . . 47.52 0.84 Nordstrom . 69.38 0.11 Starbucks . . 76.07 0.34 WshFederal 21.08 -0.30 Zumiez . . . . 29.12 -0.33 Market report, A11