EoW March 2011

Transat lant ic Cable

While Illinois legislators recently raised the state’s business income tax rate, Mr Read noted that it is still lower than Oregon’s. An educated guess would be that Illinois will be sure to maintain that differential. Notes on scrap . . . To forestall any shortageof steel scrap resulting from increased ❈ ❈ demand from China and India, the TSB Metal Recycling subsidiary of Timken Co (Canton, Ohio) is buying a scrapmetal business in nearby Akron. With the acquisition of City Scrap and Salvage, announced 31 st December, Timken will gain the scrap dealer’s property, equipment, and relationships with its own scrap providers. Much of the scrap material generated by Timken plants around the country will now be processed at the Akron facility. Timken – a manufacturer of bearings, alloy steels and related components and assemblies – gets nearly all of its steel supply from recycled metal. As reported by Robert Wang of the Canton Repository, the company says that in 2010 it turned 1.5 million tons of scrap metal into steel bar and tube. A company source told the newspaper that City Scrap and Salvage, whose revenue for 2010 was about $17 million, has supplied scrap steel to Timken for 15 years. Over the last several months of 2010, almost 23,000 New ❈ ❈ Yorkers contacted the Department of Sanitation to arrange for the pick-up of unwanted refrigerators, air-conditioners and freezers. In more than 11,000 instances, the appliances disappeared before sanitation workers arrived to take them away. Although scavengers are a familiar presence in New York, the scale of the thefts – of large items that become city property upon deposit kerbside – suggests to sources in city government and the recycling industry an organised enterprise. As reported in theNewYorkTimes by criminal justice journalist William K Rashbaum (14 th December), “the big loser” appears to be a multinational recycling conglomerate, a subsidiary of which has a large city contract to recycle the hundreds of thousands of tons of salvageable material generated each year by New Yorkers, including such bulk-metal items as appliances. The subsidiary, Sims Municipal Recycling of New York LLC, estimates that the thefts, along with schemes involving redeemable bottles, are costing the company $2m-$4m a year. Behind those losses, wrote Mr Rashbaum: “Some in the industry – by some accounts an $85 billion annual business in 2008 – see the hand of organised crime, although no one can point to hard evidence.”

Steel

Evraz North America seeks to improve its sales by changing the view from the executive suite Will moving its headquarters fromPortland to Chicago enable the Russian parent of Oregon Steel Mills to boost business in Oregon? Evraz Inc, NA, the $3 billion North American unit of Russian steel giant Evraz, thinks so, and in January announced the corporate move. Manufacturing will remain in Portland, the northwestern city in which Oregon Steel Mills was established in 1928, adding jobs if Evraz succeeds in improving sales from its transplanted home base. The move was not welcome news in Oregon, which has seen an exodus of US and Canadian corporate operations as the result of acquisitions or business changes. Richard Read, of the Oregonian, noted that with each departure, the state loses“executive salaries, commercial prestige, local decision-making, and informed support of community causes.” But Evraz NA chief executive Mike Rehwinkel told the Portland- based daily that Oregon could in fact profit from the Russian- ownedcompany’smovetoacentrallylocatedcitywheremanagers can seek more business for underused Portland plants. He said: “It’s about growing jobs in Portland for Evraz, which means we need to be in Chicago to do that.” (“Parent Company of Oregon Steel Mills Moving Headquarters to Chicago,” 20 th January). While the decision was said to be prompted by time-and-space considerations – it is easier, the Evraz executive noted, to fly from Chicago than from Portland to customers in Calgary, Houston, Dallas, Montreal, and Philadelphia – the move has in fact been in the cards. It advances the company’s effort to integrate the North American steel conglomerate created when Moscow-based Evraz bought Oregon Steel in 2007 and, in 2008, Delaware’s Claymont Steel and Canada’s Ipsco. With the $2.35 billion Oregon Steel purchase, the Russian company also acquired Rocky Mountain Steel Mills, which made Evraz the largest rail supplier in North America. The recession in the US put a crimp in the company’s plans but did not curb its ambitions. Evraz NA regained sales in 2010 and aims to exceed its $3 billion in revenues this year. As Mr Rehwinkel told the Oregonian: “We want to be a $4 billion company going to $5 billion.” A major US city offers a host of obvious advantages for a ❈ ❈ global company. But it should be noted that Evraz’s opening of its Chicago headquarters, slated for June, represents less a windfall for the Windy City than the calculated outcome of a campaign by Chicago’s mayor Richard Daley. A year ago, Oregon passed ballot measures 66 and 67, raising taxes on corporations and high-income earners. Mr Daley said at the time that he would be recruiting Oregon companies. As noted by the Oregonian, the state of Illinois backed up the Daley initiative, laying on $3 million in incentives to sweeten the deal for Evraz, including tax credits spread over 10 years and a one-time training grant of $50,000.“Illinois competed against offers from Colorado and Delaware, where the company also has mills,” wrote Mr Read. “Evraz is expected to invest $9.7 million in Chicago over ten years.”

Telecom

Android overtakes Symbian as the world’s best-selling smartphone platform According to a study released on 31 st January, in the last quarter of 2010 the Android mobile operating system from Google Inc, of the US, overtook Symbian, from Finland’s Nokia Corp, as the world’s most widely used smartphone operating system.

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EuroWire – January 2006 Euro ire – March 2011