Marketers, ad firm's survey shows that Gen Y is no Gen X

There seems to be an inversely proportional relationship between our prodigious knowledge of the baby boomer sector and our appalling ignorance of the Generation Y teen-ager set. Yet the teen market represents enormous, untapped potential even for those companies that market products not traditionally associated with the category.A recent report, "Youth Truths," published by Detroit-based ad firm Campbell-Ewald, sheds revealing insight into the motivation and behavior of this easily misunderstood group.Who are they?Born during between 1976 and 1994, Gen Y, at 78,000,000 strong, now comprises 30 percent of the U.S. population, a group larger than the boomers and twice the size of Generation X.According to the industry trade publication, Advertising Age, "marketers traditionally defined kids as ages 6 to 12. ... Today, there are at least six recognized youth segments: ages 0-2, 3-5, 6-8, 9-12, 13-15 and 16-18."Most marketers carry a distinct bias with respect to kids’ buying habits and motivations. Some project Gen X behavior to the Ys, an obvious mistake because the personality of either group could not be more distinctive or different from the other.Worse still, many marketers tend to project back or interpret current teen behavior based on the filter of their own experiences when they were that age along with all of the forgetfulness and revisionism that accompanies the aging process.In reality, "the interests of each (teen) age group are now in flux," noted Advertising Age. "A tween, a youngster between ages 9 and 12, will have markedly different interests today, than a tween had just a few years ago." A number of factors are at the root of this acceleration process including "access to influences and information, working mothers and the speed with which trends move across the country."The Unifying ElementsThey’re being called the "next greatest generation" primarily because they share many of the attributes of the World War II generation. As Youth Truths pointed out, they’re idealistic. Ninety-five percent indicate that spending time volunteering or helping people is very or somewhat important . Fifty percent actively participate in volunteer work in their communities.They’re also patriotic. Seventy-nine percent consider themselves to be such, according to Campbell-Ewald’s Youth Research. In fact, 68 percent say they would be willing to make a personal sacrifice for their country. Their patriotism, however, is not the flag-waving type of their parents and grandparents.As Arthur Mitchell, Director of Strategic Planning for Campbell-Ewald noted, "theirs comes from a nuanced appreciation of the United States for the unique freedoms it offers ... freedom to be who and what you want to be ... a place where even a Dennis Rodman can live happily ever after."They take their education seriously, which makes sense given their intuitive understanding that their futures will be tied to an education-dependent information society and not an industrial economy. As such, 87 percent want to go to university or college. They also possess a stronger moral compass than their parents."Trustworthiness," "determination" and "honor" are of great importance to this group. That’s understandable, given their constant exposure to the frailties and ills of today’s society with its 60-plus percent divorce rate and a political ruling system that rewards and encourages hypocrisy and deceit.Optimism also prevails. Although they fear being left behind, 87 percent are still optimistic about their future, according to Campbell-Ewald Youth Research. In the 9-17 age group, 69 percent view owning their own business as a sign of success, vs. 34 percent for adults. This is a generation that firmly believes that it can have it all from personal happiness to career advancement to material success.These are marketing-savvy folk. Don’t forget they’ve been exposed to media saturation. They know the marketer’s tricks. Therefore, they don’t have the patience to waste time with a product or message that claims to be something that it’s not. And if in doubt, they can easily go to the Web to validate the claim and verify the truth.But even though they know marketers target them, they’re accepting of the fact as long as the marketer tells them the truth. What they value more than anything else is authenticity. While they view advertising as fake, that’s OK as long as it’s fun. What’s more, 71 percent agree that advertising is still the best way to learn about new products.Yet when it’s all said and done, we cannot forget that they’re still kids ... irrational, passionate and hormonal to boot. They know it too. Seventy-six percent of the 9-17 age group tell us that "they are in no hurry to grow up."The problem is that teens are being given more adult responsibility, particularly in households where both parents work. This can encompass buying the groceries as well as voicing an influential opinion on the next auto purchase for the family. For parents and for marketers, there must be a realization that teens’ opinions must be taken seriously.The marketing lesson to be gleaned from the data and trend information is a simple one: Get to know this generation now and not when it’s too late, particularly if you don’t market "of the moment" products such as music, cosmetics and fashion. Gen Y will have long memories. Loyalty to person or product will therefore be one of the defining elements of their personality and ultimately their buying behavior.Alf Nucifora is an Atlanta-based marketing consultant. He can be contacted via e-mail at ([email protected]).

Diabetes fair set at medical center

Valley Hospital Association plans to host a diabetes fair Nov. 30 at the Valley Hospital Medical Center in Wasilla. The event coincides with National Diabetes Month, which is November.The fair runs from 5-9 p.m. in Classroom B.Features will include presentations by professionals and information stations for people who have diabetes or their family members. Area physicians, dietitians, diabetes nurse educators and physical therapists will be available to answer questions, provide diabetes health care information and distribute free diabetes care product samples.Diabetes affects about 16 million people in the United States, and two-thirds of those people don’t know they have the disease, according to hospital officials. Diabetes is the leading cause of blindness in working-age Americans. The disease is also a major risk factor for heart disease and strokes.For more information, call 907-746-8624.Patient Care Alliance leads sessionsThe Patient Care Alliance of Anchorage is scheduled to conduct a free meeting Dec. 6 on finances and medical bills resulting from auto accidents.The meeting begins at 7 p.m. at First American Baptist Church, 1200 E. 27th Ave. Participants can learn about types of medical testing needed, insurance issues and other topics.Another meeting on the same issue is set for Dec. 13 at the same location. The event also begins at 7 p.m.For more information, contact 907-745-4378.Kenai executive resignsCentral Peninsula General Hospital is looking for a new member to add to its team after the hospital’s chief financial officer left the position on Nov. 9.Mike Gutsch, who has been the hospital’s chief financial officer for the past six years, has resigned at CPGH and has accepted a job as the CFO at Memorial Health Center in Medford, Wis., a 150-bed facility.Gutsch told the hospital’s board of directors that he made the difficult decision to leave the position and Alaska to be nearer to his aging parents and family in Wisconsin.

No one investment type does it all

Quite frequently new clients will ask financial consultants and financial planners what type of investments are most appropriate at the moment. Too often clients will want one specific solution that will give them the highest return, the lowest risk and the most liquidity.The financial consultant’s role is to explain that a pool of money should be conceptually divided into several smaller pools that do different things and have different but complementary objectives.A generalized approach, which must be tailored to each individual’s needs, seeks to find the highest yield and the greatest liquidity for the least amount of risk. An overview of this type of portfolio can most easily be visualized by a segmented pyramid, divided into short term, intermediate term and long term investment options, with a final level, protection.Level 1: Short termThe top of the pyramid is represented by funds that are relatively risk-free and immediately available. Normally, an individual would look to have a four to six month reserve fund in this segment to cover fixed short-term or extraordinary expenses. This is considered to be an individual’s first line of defense in case an emergency need of cash should arise.The most common investments for this type of liquidity are money funds, checking accounts and savings accounts.Level 2: Intermediate termThis level is generally expected to give a higher rate of return over time than Level 1. It is usually a little less liquid than Level 1 and generally entails a higher degree of risk.These monies are most commonly invested in certificates of deposit, treasury bills, government securities, real estate investment trusts, commodities, common and preferred stock and mutual funds.Level 2 is divided into two primary classifications, debt and equity. Most homeowners usually have both debt, or the balance on the mortgage, and equity, which is the difference between the mortgage and the home’s current value.If you are buying a common stock or mutual fund, you are buying an equity interest in a company. If you buy a tax-free bond, Treasury bill, certificate of deposit or leave your money in a savings account, you are participating in the debt side of the equation.The primary difference between the debt side and the equity side is that with the debt side, you are generally more concerned with the conservation of principal and earning a specific return on your investment. On the equity side, you are more interested in growth of principal and less in earning a fixed return.Level 3: Long termThis segment of the pyramid is characterized as being the least liquid part of a portfolio, but over time, should give the highest rate of return.The most common form of investment in this segment is real estate. This might be in the form of remodeling and reselling a duplex, subdividing a large tract of land or purchasing a limited partnership through an investment-banking firm.Level 3 is broken down into three segments: pension profit sharing, retirement and salary reduction plans; all cash income oriented equity investments; and leveraged growth equity investments.Profit sharing, income reduction and retirement plans are one of the best and most under utilized ways of accumulating an estate. Properly managed, this is usually the largest part of an individual’s financial plan upon retirement.Income oriented equity investments have become very popular in recent years, and are most often associated with very little or no leverage. These programs usually pay a high return with little, if any, excess tax deductions. The most popular income programs at the present time are in real estate, oil and gas, and equipment leasing.Leveraged equity investments were more popularly known for their tax advantages under the old tax bill but are now structured toward aggressive growth. This is most commonly seen in buying real estate or businesses with borrowed money.Level 4: ProtectionInsurance is needed to properly protect and maintain a well-rounded financial plan. Insurance has changed considerably over the years, and is now looked at for its investment attributes as well as for its traditional protection coverage.Insurance products like variable annuities and single premium whole life policies are most appropriate in the intermediate term portion of our segmented pyramid. Tax shelter annuities would be best viewed in the long-term area. The traditional concept that insurance protects an individual’s overall financial plan is represented by Level 4.Allan Johnston is regional manager for Wedbush Morgan Securities in Anchorage. He can be reached via e-mail at ([email protected]).

Knowledge, technology help Terra win government work

We who live in Anchorage know that Cook Inlet has a reputation for waters that are far from placid.With tidal changes among the highest in the world, bore tides, glacial silt and winds, Cook Inlet is considered to be quite treacherous, and not many owners of small craft will venture onto it.We also understand how important Cook Inlet is to our lives.Most of our consumer goods, our cars and trucks and the fuel they consume, as well as the jet fuel to operate the jetliners we travel on, and the jet fighters that protect us, come up Cook Inlet.With shipping so important, safety is an obvious issue.While what’s happening on top of the water column in terms of wind, waves and tides is important, equally important is the invisible bottom of the water column, the sea floor.With all the rockin’ and rollin’ going on at the surface, can you imagine the difficulty of trying to survey the bottom of Cook Inlet?Federal agencies, which have the responsibility for these surveys, have increasingly turned to an Alaska company, Terra Surveys LLC, for their expertise in hydrography, the underwater mapping of the ocean floor.This relatively young company has proven that it has the know-how, the technological expertise and equipment to perform hydrographic surveys in the toughest conditions in North America.Formed in 1994, the company is owned by Larry Whiting, Tom Newman, Bob Kohut and Gerald Douthit.While the company is fairly young, the owners each have 15-25 years of experience in hydrographic surveying.Certified by the Small Business Administration as a small disadvantaged business, this Native-American owned firm is also a participant in the SBA’s 8(a) Business Development Program.Government agencies do not let go of programs easily.The move towards privatization of some programs and functions is somewhat threatening.Nevertheless, that is the direction in which some agencies and functions are headed.That was true of the National Oceanic and Atmospheric Administration function of underwater mapping.Not long after Terra Surveys was founded, NOAA put out a pre-solicitation announcement to determine the capabilities of firms nationwide to provide sea floor mapping.Following numerous NOAA-sponsored conferences and training to determine NOAA’s specific needs, Terra Surveys submitted its qualifications to NOAA.With the Alaska congressional delegation supporting this privatization effort, Terra Surveys was successful in demonstrating its capabilities, and NOAA determined that Terra was the most qualified Alaska firm.Since that time, Terra has completed four years of contracting for NOAA.In order to provide the latest technology, Terra, and its lender, National Bank of Alaska (now Wells Fargo Bank Alaska), turned to the SBA’s loan guaranty program to finance a vessel to perform contracts for NOAA and other agencies, such as the U.S. Army Corps of Engineers.Equipped with global positioning systems, vertical and multibeam depth finding systems, water level gauges, vessel motion correctors and side scan sonar systems, this vessel and others owned by the company have provided the capability of performing any sea floor mapping project in Alaska.Terra Surveys was awarded the "Survey Project of the Year" for its project on the Knik Arm Shoal in 1996, was nominated for SBA’s "Regional Small Business Prime Contractor of the Year" for SBA’s Northwest Region, and received the SBA’s "Administrator’s Award for Excellence" certificate in 2001.Terra’s managing partner, Larry Whiting, is pleased with the firm’s progress and performance on the NOAA work."We were in the right place to take advantage of the movement towards privatization," Whiting said."With our experience, technology and equipment, Terra was able to perform difficult work with excellent results."With our multibeam capability, we were able to provide results that NOAA previously could not obtain."Whiting also cites the assistance provided by SBA."SBA really helped with financing our vessel," Whiting said, "and the Small Disadvantaged Business and 8(a) certifications have given us an edge to prove that a minority-owned company could perform difficult work and meet or exceed contract requirements."This difficult work involves capturing accurate data about the sea floor, taking into consideration the height and movement of tides, the pitch and roll of the vessel from wave action, wind velocity, speed of the vessel, and other factors.The data is then loaded into Terra’s computer system at its offices near Palmer.Further processing of the data ultimately results in a color-shaded map of the sea floor.This technology has enabled the company to map the floor of upper Cook Inlet, map the location of a sunken ship in Tongass Narrows near Ketchikan, and find a large, previously hidden rock in the Wrangell Narrows near Petersburg.Ron Veltkamp is the business development officer for the U.S. Small Business Administration in Alaska. He can be reached at 907-271-4838.

GCI reports 3rd quarter income of $1.5 million

Anchorage-based telecommunications provider General Communication Inc. reported net income of $1.5 million for the third quarter of 2001, up from a loss of $2.4 million during the same period a year ago."The Alaska economy remains strong and our core businesses continue to grow," said GCI president Ron Duncan in a press release. "We see no reason that we won’t be able to maintain our momentum throughout next year."For the first nine months of 2001, GCI reported net income of $4.1 million, up from an $11.4 million loss the year before. Revenues totaled $270.5 million, up 16.4 percent from the prior nine-month period.Revenues during the third quarter increased 15.9 percent over the same period in 2000 to $88 million, the company said. The company said it expected fourth-quarter revenues to be slightly lower, between $84 million and $86 million.By sector during the third quarter, the company also reported: Broadband and other data revenues up 34 percent from the third quarter of 2000; Local telephone access lines up 4,000 from the second quarter to 73,000 lines; and Internet customers up 2,500 from the previous quarter to 68,000.

Foreign invaders cost U.S. billions; Congress urged to draw the line

Aliens are not coming. They are already here.Bio-invaders are costing billions of dollars in damage to local marine ecosystems, and in some cases, eliminating native marine and plant species if they take hold. The unwanted invaders are, for the most part, tiny hitchhikers that are dumped along with the ballast waters of ships that traverse the world’s oceans.Cornell University scientists reported two years ago that more than 30,000 non-native species cost the United States roughly $123 billion a year in economic loss. This includes $35.5 billion for alien weeds, $23.5 billion for crop diseases, $20 billion for insects, $19 billion for rats, $6.5 billion for human disease-causing microbes, and $3 billion for zebra mussels alone.In recent years, exotic species have come under increasing attack from the U.S. government. Before leaving office, President Clinton directed federal efforts to prevent and control invasive species. Nearly $30 million was appropriated, and an Invasive Species Council was formed to develop ways to manage the problem. Recently, the Pew Oceans Commission released a report urging the government to quickly develop mandatory programs to attack the problem, and to spend much more money to achieve that goal."Introduced species are a growing and imminent threat to living marine resources in the United States. Hundreds of species arrive in U.S. waters from overseas each day, playing a game of ecological roulette with ecosystem and economic stability," the report said.It added: "At least 7,000 different species of marine life are likely transported each day around the world. Ballast water carrying this wide array of non-native life arrives in the U.S. at the rate of 2 million gallons per hour."Studies around the world reveal a remarkable array of invaders, representing all of the major and most of the smaller groups of life. Many species are in their larval stages, and include anemones, worms, barnacles, snails, clams, seaweeds, jellyfish and many others. Certain viruses and the bacteria that cause cholera have been detected in ballast water.Alaska’s waters are not exempt from the foreign invaders."Up to a dozen species from Asia have been identified in the waters of Valdez and Prince William Sound from all the oil tankers over the years," said Bob Pierkowski, former head of Alaska Department of Fish and Game’s mariculture division. He added that state biologists are on the lookout for green crab, which since 1990 have migrated from California to Washington.The tiny crab have wiped out all other crab they’ve encountered, including much larger species like Dungeness."We expect to see them in Southeast Alaska. It’s not a matter of if, it’s a matter of when," Pierkowski said. Interestingly, the Pew report considers the thousands of Atlantic salmon escaping from fish farms in the Pacific Northwest among the bio- invaders.There are some regulations already on the books to prevent introduction of exotic species into U.S. waters, but they are largely voluntary and mostly ignored. The Invasive Species Act of 1996 provided ships entering American ports with a three year window to undertake a voluntary program whereby coastal derived ballast water would be exchanged on the high seas, followed by re-ballasting with midocean water.The program went into effect in July 1999; however, during the first year only 12,170 of the 58,000 vessels arriving in U.S. ports had filed a mandatory reporting form. While several states have passed or are considering ballast water control legislation, there are no legal or regulatory frameworks yet in place to eradicate or reduce marine introductions, or to prevent the spread of bio-invaders.Chemical control is one option that is readily available and in use, although it’s come under considerable scrutiny. For example, an Asian fouling mussel was discovered two years ago in large densities, nearly 30,000 mussels per square yard, in three marinas in northern Australia.Researchers treated the marinas with liquid chlorine and copper sulfate, which appears to have successfully killed the mussels, along with a considerable amount of other marine life. Researchers have not yet attempted to use biocontrol, the release of one species to control another in the ocean.The Pew Oceans Commission, which is heralded as "an independent group of American leaders conducting a dialogue on the policies needed to restore and protect living marine resources in U.S. waters," will make formal recommendations to Congress next year. The group will recommend that the National Invasive Species Act include strengthened federal measures for research, prevention and response.They suggest that an improved program for compulsory ballast management should provide expanded funding for the Coast Guard for enforcement and advanced research.Kodiak-based free-lance writer Laine Welch can be reached via e-mail at ([email protected]).

Port of Anchorage adds land, water, air security

Several new security measures have been established at the Port of Anchorage, including increased patrols from the U.S. Coast Guard by land, air and water.Overall security at the city-owned facility has been tightened since the terrorist attacks on the East Coast.Effective on Nov. 9, window decals are required to enter the port, which has a new security checkpoint at the intersection of Ocean Dock Road and Union Way.Stuart Greydanus, port operations manager, said the port has issued nearly 2,000 of the port-entry permits to regular users.All inbound drivers, whether commercial operators or private individuals, will be checked for proper identification and their vehicles are subject to inspection. Those who have business at the port must have a confirmed sponsor, Greydanus said.To keep traffic flowing at Alaska’s busiest port, a new pull-out lane has been established to check drivers and their vehicles, Greydanus said.No pedestrian or bicycle traffic is allowed."We feel like we have a good handle on who is coming in and out of our port facility,’’ Greydanus said.Guardian Security is under contract to staff the checkpoint facility, Greydanus said.Anchorage police are routinely at the port, as are Coast Guard personnel who patrol the facility shoreside, Greydanus said.Capt. Bill Hutmacher, who heads the Coast Guard’s Marine Safety Office in Anchorage, said helicopters from as far away as the Kodiak air station are making routine patrols at the port. The Coast Guard also has increased small boat patrols in the area, he said.The port serves more than 80 percent of Alaska, with an annual economic impact of $725 million, according to port officials. Some 2,500 cargo containers arrive weekly at the port’s five-terminal dock that in peak years has handled more than 3 million tons of cargo, petroleum and cement.The port also routinely serves as a staging facility for military equipment and vehicles, Greydanus said.

FAA to build 2nd half of Bush network in the spring

The second phase of the Federal Aviation Administration’s $140 million satellite-based communications network is set to begin next spring in several villages in Bush Alaska.Better known as ANICS, the Alaskan National Air Space Interfacility Communications System transmits voice and data from navigation aids like radar and weather observation equipment via satellites to air traffic control facilities and pilots.It is the FAA’s first major satellite communications system in the United States and is touted as nearly 100 percent reliable, the agency says.Between 1987 and 1992, a series of communications outages caused by a commercial satellite that shifted in orbit prompted the FAA to buy its own satellite network, according to Joette Storm, the FAA’s spokeswoman in Anchorage."The satellite wobbled out of orbit earlier than expected,’’ Storm said.Before ANICS, the FAA leased satellite circuits from telecommunications carriers. With ANICS, the FAA owns and maintains its own satellite circuits, which saves the agency about $200,000 annually, Storm said.In 1993, Melbourne, Fla.-based Harris Corp. was awarded a $140 million contract for the ANICS system. The contract was split into two phases.In the first phase, completed in 1997, 53 dual-satellite earth stations were constructed throughout Alaska, mostly in larger communities and villages.The second phase, set to begin next spring, calls for the construction of up to 18 single-satellite earth stations in smaller communities like Savoonga, St. George and Buckland, according to the FAA.Work includes installing 28-foot spherical radar domes at each site to protect satellite dishes and electronic equipment from snow and severe temperatures.Harris Corp. will provide the equipment for the sites, which includes specialized computer hardware and software, company officials said.Construction and installation of the initial phase of the project was done by New Horizons Telecom Inc. of Palmer. A contractor for the second phase of the project has yet to be chosen, according to Harris Corp. officials.Under ANICS, the Alaskan Air Route Traffic Control Center in Anchorage and Automated Flight Service Stations in Juneau, Fairbanks and Kenai will be linked via satellite with the new remote FAA facilities throughout the state.The Anchorage hub and three flight service stations are connected to each other by leased microwave or fiber-optic links, or copper cable, depending on the distance, according to the Harris Corp.Initially, more than 100 sites were expected be funded out of the ANICS contract, but the project proved to be more expensive than projected, Storm said.The FAA has spent about $100 million on the project to date, Storm said.Ray Thorpe, vice president of Harris Corp., said it costs from $650,000 to more than $1 million per site to install a satellite earth station, depending on location.Work on the additional 18 sites should be completed by 2004, Thorpe said.ANICS is a valuable tool for Alaska aviators, he said."It helps the pilot with weather conditions and the ability to fly safer,’’ Thorpe said.

This Week in Alaska Business History November 18, 2001

Editor’s note: "This Week in Alaska Business History" revisits events that shaped our past."Those who cannotremember the past arecondemned to repeat it."-- George Santayana, 1863-195220 years ago this weekAnchorage TimesNov. 18, 1981Dow-Shell officials say report is thoroughBy Dave CarpenterTimes WriterA top executive of the Dow-Shell Group said the consortium provided "much more" information than the state required in its report on the feasibility of petrochemical development in Alaska.John Hall of Shell Chemical Co. said the nine-company group did not pick a preferred site or make other final decisions because it determined that an industry is not currently feasible in the state. Hall was study manager for the $3.5 million feasibility project, which was solicited by the state but not state funded.Hall’s comments in a telephone interview from Houston followed the release of a state review containing agencies’ criticism of the Dow-Shell report as incomplete and too general.Three state agency heads said the consortium failed to meet conditions of a memorandum of understanding and intent signed in summer 1980 by representatives of the Hammond administration and Dow-Shell.Anchorage TimesNov. 19, 1981Gas line clears Senate hurdleBy Betty MillsTimes Washington BureauWashington -- The Senate overwhelmingly approved the gas line waiver package today, leaving the fate of the multibillion dollar pipeline in the hands of the House of Representatives.By a vote of 75-19, the Senate approved the waivers needed to ease private financing of the 4,800-mile gas pipeline project. A key vote was scheduled later today in the House Energy and Commerce Committee, where the margin was expected to be close.The waivers were submitted by President Reagan last month and must be approved by Congress by mid-December to take effect. The waivers allow the North Slope producers to participate in the project, include a gas conditioning plant in the total price tag and provide for consumers in the Lower 48 states to be billed before gas starts to flow.The Senate action followed an hour-long debate that was sometimes acrimonious, as Ohio Democrat Howard Metzenbaum blasted the waiver package as "evil."... An angry Sen. Ted Stevens, R-Alaska, said: "I know of nothing evil here. I personally take umbrage at the wording he used. This is not an evil project."10 years ago this weekAlaska Journal of CommerceNov. 18, 1991Permanent Fund profit tops $1 billion -- on paperBy Ray TysonAlaska Journal of CommercePropelled by one of the strongest quarterly performances on record, the Alaska Permanent Fund has exceeded $1 billion in paper profits for only the third time in its 15-year history.But the corporation that overseas Alaska’s nest egg has yet to decide whether to cash in and reinvest or ride the market for a while."We have the problem of where to put it because nothing out there is cheap now," said Jim Kelly, the fund’s research and liaison officer.As of Sept. 30, the market value of Alaska’s nest egg was pegged at $12.77 billion on investments of $11.71 billion, a $1.05 billion paper profit or "unrealized gain" attributed largely to a superior performance in the bond market during the first quarter of the current fiscal year, compared with the same July-September period last year when Iraq invaded Kuwait, and it sent jitters through the world’s financial markets.Alaska Journal of CommerceNov. 18, 1991Seward boat harbor plan will get closer lookBy Tim MoffattFor the Alaska Journal of CommercePlans for the private development of a $15 million, 1,000-slip small boat harbor in Seward aroused a furor last week as a proposal that has been kicking around for months finally got official recognition.In a sometimes fiery special session called by newly elected Mayor Don Cripps, the City Council approved a resolution directing the administration to negotiate with Afognak Logging Co. over plans to develop the harbor on the east side of Resurrection Bay, across from Seward.Council members split over a minor amendment to the resolution setting the time limit for negotiations. But the real issues that seethed behind it turned the session into a noisy affair, with Council members accusing the city administration of lobbying for projects without approval.In the end, the Council voted 4-3 to give the city 90 days to complete work with Afognak on a plan for the development.-- Compiled by Ed Bennett.

Railroad wants longer land leases

Saying it will foster commercial and residential development in four communities along the Railbelt, the Alaska Railroad Corp. wants to extend leases on its land from 35 to 55 years.Alaska Railroad officials say developers are having difficulty securing financing for large projects under current state law that limits leases to 35 years.Sen. Loren Leman, R-Anchorage, is sponsoring a bill that would allow the railroad to lease some 8,000 acres of its land in Anchorage, Fairbanks, Seward and Healy for up to 55 years, making commercial and residential development more attractive.SB209 was introduced late in the legislative session last year, but was not acted on by state lawmakers.The bill has since gained support from various lending institutions, developers and chambers of commerce, said Wendy Lindskoog, the railroad’s director of external affairs.Supporters of lengthening the leases include the Anchorage Chamber of Commerce and the City of Seward, Lindskoog said."Business organizations and city groups have been highly supportive,’’ Lindskoog said. "There is a definite economic benefit.’’Among the projects that could immediately benefit would be a senior housing development near Government Hill in Anchorage, Lindskoog said. The Department of Housing and Urban Development will not commit to a project on railroad land unless it has at least a 50-year lease, Lindskoog said.Wal-Mart also has expressed interest in railroad land and other sites in Fairbanks, according to railroad officials.Extending leases on railroad land would increase financing options, spurring investor interest, Lindskoog said. New leases mean additional revenues for the railroad, and infrastructure development and an increased tax base for communities.Lenders and developers have balked at large, expensive projects on railroad land since there was no assurance the land would be available after 35 years, Lindskoog said.Some banks require a lease to exceed loan maturity by at least 10 years. And increasing the lease term to 55 years allows companies to amortize debt longer, Lindskoog said.Extending leases to 55 years also would give the railroad equal footing with other state agencies. The University of Alaska and the state Department of Natural Resources can lease land for up to 55 years under state law, Lindskoog said.Under the proposed legislation, the railroad can terminate any lease after 35 years if the land is needed for railroad purposes.Leman, state Senate majority leader, said he doesn’t see any major hurdles for the legislation next session."This is win-win,’’ he said. "I think it makes some sense.’’"I think it will pass in both the House and the Senate if we keep it clean and on this issue and not let it become a Christmas tree,’ where people begin venting frustration on the railroad in general," Leman said.Some lawmakers want to sell the railroad to a private corporation, as was the intent when the federal government transferred the line to the state in 1985."There is still the mentality to transfer the railroad to the private sector,’’ Leman said. "We need to maximize the value of the railroad when and if that ever occurs, or whatever we do with it in the future.’’Established in 1914, the Alaska Railroad was operated by the federal government until it was purchased by the state. Along with the railroad came 36,228 acres of land in Seward, Crown Point, Portage, Whittier, Anchorage, Talkeetna, Curry, Hurricane, Healy, Clear, Nenana, Fairbanks, Valdez, Birchwood and Eagle River. About 13,700 acres are devoted to right of way, and 4,520 more acres are used for railroad operations.About 18,000 acres remaining along the 525-mile line are either leased or available for lease, said Pat Flynn, the railroad’s public affairs officer.The railroad earns about $10 million annually from leasing land, or about 9 percent of its annual revenues, Flynn said.Along with passenger and freight revenues, money from leases is used for operating expenses, capital improvement programs, track maintenance and federal grant matches, Flynn said. The railroad receives no money from the state."You don’t hear a lot about it -- it’s sort of a dark horse -- but leasing land is extremely important for the railroad,’’ Flynn said.Leasing railroad land also is important to communities like Healy, about 100 miles south of Fairbanks. Usibelli Mines Inc., the state’s only producing coal mine, leases about 350 acres of railroad land and subleases it to Healy residents and mine workers who have built about 60 homes on it."It’s been a godsend to the people of Healy,’’ said Steve Denton, Usibelli general manager.Usibelli also leases another 86 acres of commercially zoned land, where the mining company’s offices are located, as is the town’s fire department and community center.Two years ago, the Legislature, recognizing the importance of the issue to the small mining community, passed a law to allow the railroad to increase its lease limits in Healy from 35 to 65 years.

Senate Finance Committee takes on Alaska's fiscal gap

Most Alaskans agree that development of a long-range fiscal plan is one of the greatest challenges facing our state. Before considering major new taxes on Alaskans, state government should first be as well run as possible. This means continuing our work for a smaller, smarter state government and government reform to achieve maximum efficiency and fairer spending. The Senate Finance Committee has developed a package of fiscal reform legislation. This package presents the first step of a new long-range fiscal plan that has the potential of reducing the fiscal gap by more than $12.5 million the first year with reductions increasing to more than $100 million a year within 10 years. The basis of government in Alaska is our constitution. When we start to create a new financial plan we need to make sure our state constitution is functioning properly. Two parts of our state constitution that deal with fiscal policy are not: the constitutional appropriation limit and the Constitutional Budget Reserve provision. Ensuring state fiscal discipline The first step to the Senate Finance Committee’s fiscal plan limits the expansion of government spending through the adoption of Senate Joint Resolution 23, which revises the existing constitutional appropriation limit. Government spending is limited to about $6 billion; however we only currently spend about $3 billion. The enormous size of the current appropriation limit occurred because the constitutional provision has a built-in escalator clause for inflation and population. To correct this, our most recent version of SJR 23 proposes to base any allowable increases on previous year’s budgets and to limit those increases to 2 percent. Amending the Constitutional Budget Reserve The Constitutional Budget Reserve language of the constitution is not working as intended to control spending. The reserve was established in 1990 and has been used to help fill the gap between state revenues and expenditures. The original idea of the CBR was that funds could be withdrawn with a simple majority vote to cover a budget deficit as long as current spending did not exceed the previous year’s spending. However, a three-quarters vote of the Legislature would be necessary to withdraw any funds in excess of the previous year’s spending. In 1994, the Alaska Supreme Court misinterpreted this provision to require the three-quarters vote to withdraw any funds from the CBR. This creates a situation in which small groups of legislators can "blackmail" the majority and hold the budget hostage. These legislators can trade their votes, which are crucial to withdraw CBR funds and balance the state’s budget, in exchange for additional spending. We estimate the cost this year to access the CBR with the three-quarters majority vote to balance the budget was nearly $150 million. Senate Joint Resolution 24 corrects this bizarre imbalance of spending power by proposing a constitutional amendment that makes it clear a three-quarters vote is not necessary when spending does not exceed the previous year’s. This would encourage fiscal discipline and make it more difficult to increase state spending. Pending legislation In addition to these two measures, there are a number of other proposed bills that further the promise of fiscal discipline. They include: Senate Bill 180, which would adjust the geographic differential, equalizing state employee salaries across the state. This could potentially save $183,600 per year for the first six years and $312,000 per year thereafter. Senate Bill 181 could provide savings to the state of $500,000 per year by eliminating discriminatory below-market rates from the Alaska Housing Finance Corp.’s Housing Assistance Loan Fund. This fund provides loans to only certain areas of the state and was recommended for elimination by a recent audit because of misuse and the discriminatory nature of the program. Senate Bill 182 encourages accuracy and accountability in the budget process by requiring proration of program benefits, such as welfare, to be paid based on actual funding levels rather than prescribed levels. Annual savings depend on program funding levels in the budget. Senate Bill 183 adopts a uniform standard for the payment of attorney’s fees for litigants, including public interest litigants. It will bar litigants from collecting huge attorney’s fees for unsuccessful claims. Savings could average $117,100 annually based on current fees paid out annually. Senate Bill 184 provides an opportunity for, but does not require, local governments to contribute to the Village Safe Water Program. If local governments chose to contribute 5 percent of the cost of projects benefiting their area, the state could save as much as $2.7 million per year. Senate Bill 185 revises the formula under which power cost equalization is paid. State expenditures could be reduced by as much as $9 million per year. Senate Bill 186 would limit a municipality’s allowable bonded indebtedness, or acceptable debt, to $15,000 per municipal resident. This will potentially increase state revenues by more than $100 million per year within 10 years.The response to this package has been very positive. Both proposed constitutional amendments and three of the bills have passed the Senate and have begun hearings in the House. The remaining four bills are progressing through the Senate.These proposals are the first steps of a new multi-year fiscal plan. They are essential cornerstones to any new comprehensive plan and give Alaskans a guarantee of continued state fiscal discipline. Sen. Dave Donley, R-Anchorage, is co-chairman of the Senate Finance Committee.

Award winners offer advice for tough times

Small businesses are an important part of the Alaska economy, and in challenging economic times, advice gleaned from others can be valuable. According to the U.S. Small Business Administration’s most current statistics, out of Alaska’s 16,136 employer businesses in 1999, 97 percent were small businesses, or firms employing fewer than 500 people. In 1998 Alaska small businesses employed 118,592 of the state’s 196,135 nonfarm private sector workers. The state Department of Labor’s 2000 list of 100 largest private employers records 59 that have fewer than 500 employees. Several Alaskans have developed a proven equation for small business success. The Small Business Administration annually selects a Small Business Person of the Year, honoring the award winner for building his or her business and other specific achievements. State winners advance to the national level. Alaska has had one national SBA Small Business Person of the Year, according to Ron Veltkamp, business development officer at the SBA in Alaska. In 1965 Don Donatello was chosen for his work at Alaska Mill & Feed Co. The list of previous honorees also includes former Anchorage Mayor Rick Mystrom for Mystrom Advertising in 1982; Paul Reid of the New Sagaya stores in 1991; and Peter Eden of Alaska Wild Berry Products in 1989; as well as winners from Fairbanks, Soldotna and Southeast. The Journal interviewed several recipients from past years, seeking their counsel for current or future small business operators. Finding partners Last year’s recipient, David Cottrell of Mikunda, Cottrell & Co. Certified Public Accountants, believes Alaskans looking to start a service-oriented small business should consider teaming up with others. He is president and managing partner for the Anchorage-based Mikunda, Cottrell & Co., which is the largest locally owned accounting firm. He was chosen for the firm’s growth in sales and employees, financial stability, innovation of products and services, response to adversity and community contributions, according to SBA officials in Alaska. Cottrell, an Anchorage accountant and a founder of the firm, says service businesses include attorneys, accountants, insurers, dentists or physicians. Starting service businesses differs from starting construction or manufacturing companies, he said. The first step in creating such a business is analyzing the market to see if one’s services are in demand, he said. Then prospective small business owners should consider the possibility of combining skills with another business person, perhaps one who is already running a firm. "If you think you have a good market, don’t always assume that going it alone is better than with a partner," he advised. "As a team you can actually have a broader base of services." With a little help from friends Barbara Cash, president and chief executive of RIM Design, was SBA’s Small Business Person of the Year in 2000. The company previously operated under the name Interior Space Design, which has a 22-year history in Anchorage. The change to RIM Design allows Cash to bring together interior design talents and resources from the RIM Architects Guam and Hawaii offices. She urged future and current small business owners to talk to Small Business Development Center staff. "They have professionals there to help you. They have classes in how to write a business plan or how to start a business," she said. "They will help you do everything from planning and marketing to understanding payroll taxes."

Small businesses see a slowdown

Many Alaska small business operators believe a changing economy -- resulting from slowing growth since the Sept. 11 terrorist attacks -- will have an affect on their companies, according to a recent survey.Representatives from the Alaska Small Business Development Center distributed the survey to gauge the extent and type of impact on area businesses. The Alaska SBDC is a partnership between the U.S. Small Business Administration and the University of Alaska.The two-page survey, coupled with feedback from business operators at two forums, will help the organization develop strategies to help businesses respond to an altered market, said Jerry Anderson, Anchorage director for the University of Alaska Anchorage Small Business Development Center."We’re trying to assess the changing economic environment so we can be as responsive as possible," said Jean Wall, associate state director for the University of Alaska SBDC.Such assistance could be critical to the survival of small businesses, which in turn drive the economy, she said."I think we have found in periods of economic distress it really boils down to small businesses," she said. "If there are things we can help them do then we can all move through this new economy much more smoothly."Tactics businesses can use include improving cash management, reducing overhead or targeting different customers, she said.The two forums were conducted in late October.Participants identified tourism, transportation, hotels and lodging, and restaurants as sectors most likely to be affected.Seventy-one percent of survey respondents believed their businesses would be directly affected as a result of the East Coast attacks. About half of those respondents felt the impact would be a negative one. Forty percent noted the events would positively affect their business, and 10 percent cited positive and negative effects.Businesses participating in the survey represented seven Anchorage zip codes. They averaged about eight years in business with seven staff members. Most of them listed their businesses as stable or expected to grow before the terrorist attacks.Participants at the forums expressed ways their companies have been affected.At a forum at Harry’s restaurant, co-owner Sam Senner noted he had seen some impact.The restaurant had four banquets scheduled between Sept. 11-13, but those were canceled after the attacks, Senner said. Banquets at Harry’s typically range from 25 to 50 people.For two weeks after the East Coast attacks, sales at the restaurant dropped, he said. Sales have since rebounded, said Senner, who has logged 35 years in the industry including 11 years managing the Village Inn on Dimond Boulevard."I think it was an immediate impact, not long term," he said.The business also had submitted an order to Frontier Printing to print new menus listing special items. That business was vandalized in what is being investigated as a possible hate crime related to the attacks, and the restaurant was unable to promote the menu items as it had hoped. Consequently, the restaurant was unable to sell the inventory for the menu items, although products did not spoil, he said. Some menus were completed and returned to Senner Nov. 1.The restaurant employs 57 full- and part-time workers.Larry Wilmarth, owner of The Surveyors Exchange, also noted a swing in business."Everyone’s sitting on their pocket books pretty tight," the Anchorage businessman said.

Dividend checks expected to decline in the years ahead

The Alaska Permanent Fund took its lumps last year like most investment funds, but its managers say the fund did better than most pension funds and, despite a down market, beat the "benchmark" indexes and other funds that the fund’s trustees used as measures for performance comparison.The annual dividend paid to Alaskans went down this year, and because of the annual five-year averaging of cash income used to calculate the dividend, the amount allocated for payments is expected to decline for the next five years, according to the permanent fund’s latest estimates.According to an analysis of the past year, the fund’s total market value, the principal and the earnings reserve, declined from $26.5 billion on July 1, 2000, to $24.8 billion on June 30, 2001.Short-term negative returns inevitably occur."It’s as inevitable as rain in Juneau, snow in Anchorage and cold in Fairbanks," said state Revenue Commissioner Wil Condon.Still, "the fact that this is the first time in 25 years that we have had a negative annual return only shows what a remarkable run of good fortune the fund has had," according to Robert Storer, the permanent fund’s executive director."The eventual certainty of a down year is factored into the fund trustees’ analysis each year when they make the long-term asset allocation decisions," he said.An averaging of five years’ of income is used to calculate the dividend, which is intended to soften the effect of yearly volatility in earnings on the amount of the annual payment. This year the dividend would have declined even more had it been based on income for the year, rather than based on an average of five-year income.But even though the fund is projecting a return to earnings growth in the current year and continued increases in following years, the money available for dividends under the five-year averaging will decline. That, combined with expectation of continued population growth, will translate to lower dividends.For the current year, cash income of $1.864 billion is estimated compared with $1.199 billion last year. Estimates are the fund will earn $1.952 billion in 2003, $2.051 billion in 2004 and $2.161 billion in 2005.Because of the five-year averaging, however, the annual amount distributed for dividends will decline from $1.113 billion in fiscal year 2001, the year ending June 30 on which dividends are being distributed this fall, to $1.095 billion in fiscal 2002, the current state fiscal year, to $975 million in 2004 and $969 million in 2005.In 2006 money for the dividend is expected to begin increasing again, with $1.082 billion in cash earnings estimated for that year.For the past year, unaudited figures show the fund’s domestic stock portfolio was down 13.1 percent while foreign stocks were off 22.9 percent. Stocks account for about half the fund’s investments.The other half of the fund, bonds and real estate, did better. Domestic bonds were up 11.4 percent in value, and foreign bonds were up 0.8 percent. The fund’s real estate holdings were up more than 10 percent in value.Cash income by the fund, which is what is used to determine the annual dividend payout, was $1.2 billion for the year. This included dividends from stocks, interest on bonds, real estate earnings and about $150 million in gains from sales of assets during the year.During the fiscal year, about $1 billion was added to the protected principal of the fund, which included some $686 million in "inflation-proofing" payments made from the earnings, and $339 million from state oil and gas royalties."Despite the negative return, each of the portfolios of the fund, consolidated by asset class, beat its benchmark," Storer said."The fund’s U.S. stocks outperformed the Russell 3000 broad market, the non-U.S. stocks outperformed the EAFE index, and the bond portfolio outperformed the Lehman Brothers Aggregate Index," he said.Alaska’s investment fund did better than most pension funds because pension funds typically have a higher allocation to stocks than the permanent fund, Storer pointed out."We also stayed the course with our long-term asset allocation, which balances the risk of short-term losses against the reward of long-term gains," he said.Evidence of the wisdom of sticking to a consistent plan was the fund trustees’ decision last March to sell $750 million in fixed income and reinvest the money in stocks, a "rebalancing" of assets.Since that decision was made, the Standard and Poors Index of stocks has increased 4.8 percent, Storer said.

Amend your retirement plan now

After years of delay, it is now time to amend every qualified pension and profit-sharing plan to comply with the provisions of four major tax laws that were enacted from 1994 through 1997. These amendments are collectively known as the GUST amendments. The first letter of each of these acts make up the acronym.If you sponsor a 401(k), pension, profit sharing, employee stock ownership or employer-contributed 403(b) plan, you may be required to amend your plan as early as Dec. 31 -- that’s less than 60 days away.General amendment requirementsIf the plan document is not on a form that has been pre-approved by the Internal Revenue Service (prototype or volume submitter documents are pre-approved), and the last day of the current plan year is Dec. 31, the plan must be amended by that date. All employee stock ownership plans and most defined benefit plans employ individually designed documents.If the current plan year ends on a date other than Dec. 31, then the plan must be amended by the last day of the plan year ending in calendar year 2002.If you adopt a plan that is a prototype of volume submitter plan sponsored by a provider, such as a mutual fund company, an insurance company, a bank, a law firm, a certified public accounting firm or a third party administrator, and that provider submitted its lead documents to the Internal Revenue Service for review and approval by Dec. 31, then a plan sponsor who intends to adopt one of those documents has an extended remedial amendment period.If you are, or intend to be, an adopter of a prototype or volume submitter document that was timely submitted to the IRS, then you will have until 12 months after the document sponsor receives its final approval letter from the IRS, or until December 31, 2002, if later.If you have previously adopted a prototype or volume submitter document, and: Your previous provider has timely submitted and you plan to adopt their new plan, you have to take no action to get the extended reliance period (December 31, 2002 to adopt the amended plan). If your previous provider is no longer providing a prototype or volume submitter document or if you intend to adopt another provider’s plan, then both you and the new provider need to certify that you are intending to adopt that other provider’s document and the other provider is intending to provide that document to you. If you presently maintain an individually designed plan but are planning on adopting a prototype or volume submitter plan, then both you and the other provider must certify your intent to adopt.If you fail to timely adopt the GUST amendments, your plan risks disqualification and/or you may face monetary sanctions.Contact your third party administrator or financial institution to find out your status with respect to your plan document. It is a good idea to do that before the end of the year, just to be sure.J. Michael Pruett is president of Cache Pension Service Inc. in Anchorage. He can be reached via e-mail at ([email protected]).

Railroad predicts rise in revenue, steady passenger total

The Alaska Railroad Corp. is on track to match ridership numbers from 2000 and should show a slight increase in revenues this year, according to railroad officials."Looks like we’ll be down only 1 percent, for a total of about 500,000 (passengers) again,’’ said Patrick Flynn, the railroad’s public affairs officer. "Considering the slump in tourism statewide, we did OK."Passenger numbers last year were 501,000, down from 679,000 in 1999. In those two years, revenues slid from $14.6 million to $13.1 million, according to the railroad.Revenues for 2001 should fall somewhere in between the last two years’ profits, probably around $13.7 million, said Steve Silverstein, vice president of the railroad’s Markets, Sales and Services Division.The reduction in ridership and revenues over the past two years can be partially blamed on the 2.5-mile Anton Anderson Memorial Tunnel, which opened Whittier to road traffic in June 2000, railroad officials said.The state-owned railroad has taken steps since then to move more passengers along its 525-mile line.Earlier this year, the railroad streamlined its sales operations by combining freight and passenger marketing services.In 2000, the railroad added 16 new locomotives and several custom-built passenger coaches."Our new locomotives are 50 to 100 percent more efficient than the old locomotives, which allows us to run more trains and make better use out of our passenger equipment,’’ Flynn said.The railroad offers several daily routes in the summer, including the Denali Star, which departs daily from Anchorage and Fairbanks with stops at Talkeetna and Denali; the Coastal Classic serves Anchorage and Seward; and the Glacier Discovery connects Anchorage and Whittier.The Grandview, a new five-time weekly charter service, has proved very successful for the railroad and has helped offset some of the losses from the Whittier road tunnel, Flynn said.The train, which began service late last season, transports cruise ship passengers between Seward and Anchorage. The train used to haul passengers in Florida, before it was purchased for Alaska."Diversifying our passenger base proved to be a good move,’’ Flynn said.The railroad is forecasting freight revenues to be $80 million for 2001, up $10 million from a year ago; freight revenues have more than quadrupled in the last five years.To see the passenger revenues perform similarly, more people are going to have to know what the railroad has to offer, and that will take some "refocusing" in the marketing department, Silverstein said.Riding a train on the Alaska Railroad is one of the top sightseeing experiences anywhere, especially the trip to or from Seward, Silverstein said."It’s the best train trip in North America,’’ Silverstein said. "We have a great product. The question is, how do we get people to know what the product is?’’

Around the World November 18, 2001

STATEDismal sockeye run predicted for Bristol BayANCHORAGE -- The forecast for Bristol Bay reds doesn’t look promising.Alaska’s largest and most valuable salmon fishery is expected to produce an extremely low commercial red salmon catch next summer, according to government and university forecasts being released Nov. 13 in Seattle.The state Department of Fish and Game was expected to predict a catch of 9 million fish. Last year’s catch was 14 million reds -- in itself a weak harvest, considering the usual average of more than 25 million fish.The University of Washington also has prepared a forecast that also is expected to be low. That forecast was done with funding primarily from Seattle-based fish-packing companies.Should the numbers turn out as expected, business could be worse than even the disastrous catches of 1997 and 1998. That could add further injury to Alaska’s salmon industry, which is already suffering from low prices because of competition from foreign farmed salmon.AIDEA sells former MarkAir hangarFAIRBANKS -- A former MarkAir facility at Fairbanks International Airport is once again in the hands of an airline. The structure, vacant since MarkAir’s 1995 demise, was finally sold by the state agency that’s owned it for a decade.The Alaska Industrial Development and Export Authority earlier this month announced the sale of the facility to a company owned by Fairbanks businessman Robert Everts, owner of Air Cargo Express and the Tatonduk Flying Service.The hangar complex will be used for maintenance, administration and storage associated with Air Cargo Express and Tatonduk, as well as Everts Air Fuel Inc., a company owned by Everts’ father.AIDEA had owned the building since it agreed to help out MarkAir in a 1991 attempt to expand the airline. AIDEA was left with the hangars when MarkAir declared bankruptcy and ceased operations in 1995.Ketchikan borough calls loan to millKETCHIKAN -- The Ketchikan Gateway Borough Assembly has voted to foreclose on its 1999 loan of $7 million to Gateway Forest Products, the struggling veneer maker at the former site of the Ketchikan pulp mill.Gateway is continuing to produce veneer at the Ward Cove site with more than 50 employees as it attempts to rebuild the business under Chapter 11 bankruptcy protection.The $7 million loan from the borough came from a federal disaster fund. It was used to build the veneer mill.As collateral, the borough got mostly undeveloped lands, valued at about $7.7 million, around all three sides of Ward Cove. The loan was part of about $16.5 million the company owes the borough. That money all came from the disaster fund.Gateway purchased Ketchikan Pulp’s property at Ward Cove in 1999 and built the veneer mill in 2000.NATIONWholesale prices take a plungeWASHINGTON -- Wholesale prices, helped by sharp decreases for energy and new cars, plunged 1.6 percent last month in the biggest decline in more than a half-century of record keeping. Analysts said recession in the United States would keep the lid on inflation for many months to come.The bigger-than-expected drop Nov. 9 in the Labor Department’s Producer Price Index highlighted one of the few benefits a weakening economy can provide."The worsening downturn in industrial activity has spilled over into a general recession that is driving down prices,’’ said Jerry Jasinowski, president of the National Association of Manufacturers.GM announces SUV recallDETROIT -- General Motors Corp. said Nov. 9 it is recalling 86,312 2002 Chevrolet TrailBlazer and GMC Envoy sport utility vehicles for a problem that could cause the gear shift lever to suddenly move out of "park.’’The shift collar on some of the vehicles was not machined according to specifications, GM spokesman Michael Morrissey said.There have been no accidents, deaths or injuries reported as a result of the problem, he said.-- Compiled from business wire services.

Rocket destroyed after Kodiak launch

ANCHORAGE -- A rocket sent aloft from the Kodiak Launch Complex had to be destroyed seconds after lift-off Nov. 9 when trackers lost communication with the missile.It was the first time a rocket used in testing for the missile defense program had to be destroyed after launch, said Col. Rick Lehner, spokesman for the missile defense program in Washington, D.C.The rocket was launched from the complex, operated by the Alaska Aerospace Development Corp., at 9:12 a.m. It was destroyed 52 seconds later when launch officials lost telemetry data and data transmission from the missile, Lehner said."It seems to be a telemetry problem and safety rules dictate that, if you lose that type of data transmission, you have to destroy the missile," Lehner said. Despite the loss of data, the rocket remained on course until it was destroyed. A board would be convened to investigate the problem, Lehner said.

Entrepreneurs gear up for competition

Investment experts, entrepreneurs and students are gearing up for the second annual Alaska Business Plan Competition, beginning at 7 p.m. on Nov. 28 at Alaska Pacific University’s Atwood Building.The contest is the brainchild of APU assistant professor of entrepreneurship Bruce Borup, who saw it as a way of getting his masters in business administration students involved in a real-world funding exercise.The judges were recruited by Allan Johnston, regional manager for Wedbush Morgan Securities. They include representatives from the Alaska Industrial and Export Authority, the Alaska Manufacturers’ Association, First National Bank Alaska, First Interstate Bank, Key Bank, Northrim Bank, Wells Fargo Bank Alaska, and Alaska Growth Capital.During the competition, the entrepreneurs will be given eight minutes to make their case to the judges and then answer questions. The winner will be featured in the Alaska InvestNet Venture Fair in March, an event attended by numerous investors, including venture capital firms from the Lower 48.Borup said that the competition is more than just an exercise -- it could lead to funding for the start-up companies."Entrepreneurs can’t reach these type of investors in any other format," he said.Johnston said he is working to expand the competition to include other universities and to hold preliminary competitions throughout the state. He said his long-term goal is to encourage Alaska students to start new businesses in Alaska with funding from Alaska firms."We’re growing leaders, and when you do that, you grow the future," he said.The competition is open to the public at no charge.

Business Profile: DAT/EM Systems International

Name of the company: DAT/EM Systems InternationalEstablished: 1985Location: 8240 Sandlewood Place, Suite 101, AnchorageTelephone: 907-522-3681Web site: www.datem.comMajor focus of services: DAT/EM Systems International develops software and hardware products for digital mapping and photogrammetric applications.History of the company: The firm originally was an internal department at Aeromap US, an Anchorage aerial mapping company. DAT/EM began in 1985 and its products were commercially available in 1987.The company has grown from a handful of employees to a total of 15 employees today. DAT/EM serves more than 350 photogrammetric companies, engineering firms and government agencies in more than 50 countries. Clients range from the U.S. Geological Survey to governments in Asia.The map making industry has changed in recent years, shifting from reliance on precise mechanical instruments to software programs and special computer hardware.DAT/EM General Manager Jeffrey Yates listed several advantages to operating from Alaska although most clients are outside the state. From the Alaska time zone DAT/EM employees can telephone Europe in the morning and dial Asia in the afternoon. One challenge to the location, though, is finding skilled employees to fit the company’s needs, he said.Top accomplishment of the company: Yates cited DAT/EM’s record of "establishing ourselves as being one of the major players of manufacturing software and hardware in the field." The firm sets itself apart from others in the industry by its pricing and service to clients in fine-tuning products per their requests.Major player: Jeffrey Yates, general manager, DAT/EM Systems International.Yates, who came to Alaska in 1982, has a background in surveying. He was one of DAT/EM’s initial software developers before working on the firm’s sales and marketing efforts. In 1995 Yates was chosen general manager of the company.-- Nancy Pounds


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