Quote of the Week
‘The problem with the insurance industry is that implementing change is like moving the Titanic around.’
, Andy Barile, a Rancho Santa Fe-based insurance consultant, on the slow easing of workers’ comp costs. Please turn to story on the cover.
Friday, April 29
State Jobs For Bersin:
Alan Bersin, the controversial superintendent of the San Diego Unified School District, was appointed the secretary of education and to the state Board of Education by Gov. Arnold Schwarzenegger.
Bersin has been San Diego Unified School District superintendent since 1998. This year, he negotiated an early release from his contract, which originally was due to expire June 30, 2006. He now will be leaving on June 30 of this year.
From 2000 to 2003, Bersin was a member and chairman of the Commission on Teacher Credentialing. He was U.S. attorney for the Southern District of California from 1993 to 1998; and served as the U.S. attorney general’s Southwest border representative from 1995 to 1998.
Bersin, who will assume office on July 1, replaces former Los Angeles Mayor Richard Riordan, who recently resigned and will be leaving office on June 30. Bersin will immediately begin serving on the Board of Education.
A resident of San Diego and a Democrat, Bersin, 58, earned his law degree from Yale Law School and a bachelor’s degree from Harvard, and studied at Balliol College at Oxford University as a Rhodes scholar.
The secretary of education, who does not require Senate confirmation, gets paid $123,255. Members of the Board of Education must be confirmed, and the pay is $100 per diem.
, Pat Broderick
Monday, May 2
Mayoral Election Set:
The San Diego City Council voted to hold a special election July 26 to choose a replacement for Mayor Dick Murphy, who announced his resignation April 25. In the case of a runoff, the City Council has the option of fast-tracking the election to September, or possibly consolidating it with a statewide special election if Gov. Arnold Schwarzenegger decides to call one, according to a city spokesman.
Murphy’s resignation takes effect July 15.
On Tuesday, former San Diego police Chief Jerry Sanders announced his intentions to run for mayor. “I’ve had experience making turnarounds,” said Sanders, who is the board chairman of the San Diego and Imperial Counties chapter of the American Red Cross.
On Wednesday, county Supervisor Ron Roberts said he would not make a fourth run for San Diego mayor. “I feel good that we are on the road to recovery,” Roberts said.
San Diego City Councilwoman Donna Frye has also said she would like to run for mayor.
, Pat Broderick
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Nugent To Retire:
Jack in the Box Inc. announced its chairman and chief executive officer, Robert Nugent, will retire in October.
Nugent, 63, who has been at the helm of the San Diego-based fast-food chain since 1996, said he wanted to quit while the company was ahead.
He will be succeeded by the company’s president and chief operating officer, Linda Lang.
“With the company experiencing one of its best years ever in 2004 and with its financial condition as strong as it’s ever been, I want to step aside and let a new generation of management take Jack in the Box to the next level,” Nugent said in a statement.
Nugent has spent nearly 30 years as an executive of Jack in the Box.
On the day of the announcement, shares in the company’s stock, sold on the New York Stock Exchange under the symbol JBX, closed at $37.15, up from $36.56 a share on Friday.
, Connie Lewis
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Intellectual Pro & #173;perty Czar:
Qualcomm Inc. announced it promoted Marvin Blecker to president of its technology licensing segment. Blecker replaces Steven R. Altman, who will become Qualcomm’s president with the retirement of Tony Thornley on July 1. Blecker, who has been with the company since 1992, was previously general manager of the segment, which brought in approximately $1.3 billion in revenue during the 2004 fiscal year.
The business unit oversees licensing of Qualcomm’s patent portfolio.
, Brad Graves
Tuesday, May 3
Schering-Plough Bids Adieu:
Schering-Plough Corp. announced plans to close its Canji research operation in San Diego, and offer its 47 local employees jobs in Palo Alto. The company said it planned to consolidate Canji with its Palo Alto research operation, DNAX Research Institute, Inc., to form a new unit called Schering-Plough Biopharma.
A company spokeswoman said Schering-Plough has several years left on its lease on John Hopkins Court, near UC San Diego, and would likely sublease the space.
Schering-Plough acquired Canji in 1996.
The company plans to complete the integration by the end of the third quarter.
Schering-Plough trades on the New York Stock Exchange as SGP. The company has 30,000 employees and a market capitalization of $30.7 billion.
, Brad Graves
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Big Blue Meets Big Gray Ships:
IBM announced the Navy has asked it for help in streamlining its business processes in a deal potentially worth $135 million.
While a majority of the work will be done in the Washington, D.C., area, IBM said some of its financial experts and subcontractors will do work in San Diego.
The company is still assessing the scope of the project so the number of new jobs it brings to San Diego is not yet available, said William Ray, IBM’s senior location executive here. IBM employs 300 people in San Diego.
IBM will not bring electronics to the table as much as expertise. Its new $35 million contract calls on IBM’s Business Consulting Services unit to provide experts in finance, accounting and business-process transformation. The deal is for one year. Options, if exercised, would take the work to 2010 and make the deal worth $135 million. The Navy estimates that the job will take 1 million hours of labor.
, Brad Graves
Wednesday, May 4
Tax Issues Improve Sempra’s Quarter:
Sempra Energy reported first-quarter 2005 earnings of $223 million, compared with $197 million for the same period in 2004.
Net income in the first quarter of 2005 included $59 million related to the favorable resolution of federal and state income-tax issues from prior years for both the parent company and the California utilities, according to a company spokesman. First-quarter 2004 results included a $24 million loss related to discontinued operations and $16 million in net income related to the favorable resolution of prior years’ income-tax issues.
Revenues in the first quarter of 2005 were $2.7 billion, compared with $2.4 billion the same quarter last year, due to increased power and commodity sales.
“Operating results in the first quarter were solid for all of our businesses and put us on track to accomplish our financial goals for the year,” said Stephen L. Baum, the chairman and chief executive officer of Sempra Energy.
, Pat Broderick
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Kyocera Layoffs To Continue:
Kyocera Wireless Corp., the San Diego-based subsidiary of Kyocera Corp. that manufactures cell phones, said it decided to outsource its manufacturing in a move that will result in the elimination of about 1,700 jobs in San Diego and Tijuana.
The biggest hit will be felt at Kyocera’s maquiladora in Tijuana, where the job loss will be about 1,400 people, said Jay Scovie, a Kyocera spokesman.
Kyocera Mexicana will attempt to find alternate work for those who are laid off at its other manufacturing operations and at neighboring maquiladoras. But the net remaining workers at two separate plants once the cuts are fully implemented in three months is about 650, Scovie said.
A general phase-out of cell phone manufacturing in San Diego began in mid-2003. The recent decision to outsource the manufacturing will result in the loss of between 150 and 175 jobs at Kyocera Wireless’ La Jolla campus. That will leave the site with about 1,300 employees, including about 200 who are contracted temporary workers filing lower level support positions, Scovie said.
In January, Kyocera Wireless laid off 168 workers at the San Diego plant, bringing the total job cuts there to 768 at the time. The La Jolla site, which was acquired from Qualcomm Inc. in 2000, once employed more than 2,000 people, though many were temporary workers.
After all the cuts are made, Kyocera Wireless employees will be engaged in the development and design of the phones, along with sales and marketing.
Kyocera decided to outsource the manufacturing of its wireless phones to Flextronics International Ltd., based in Singapore, to reduce costs and enhance profit margins, the company said.
Kyocera Corp., based in Kyoto, Japan, had about 57,800 employees worldwide as of September and reported annual sales of more than $11 billion last year.
, Mike Allen
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Ericsson To Close CDMA Unit:
Ericsson, the Swedish manufacturer of wireless communications equipment, announced plans to shut down its San Diego office, eliminating 250 jobs in the short term.
An additional 80 to 90 engineers working at the site will be transferred to other positions within Ericsson, but whether that will be in San Diego hasn’t been decided, said spokeswoman Tina Asmar.
Ericsson said it is reorganizing its Code Division Multiple Access, or CDMA, unit to maintain efficiencies. CDMA is the wireless transmission technology developed by San Diego-based Qualcomm Inc.
Ericsson acquired the infrastructure-manufacturing unit from Qualcomm in 1999 and set up its mobile systems CDMA unit here. At its peak in 1999, the unit employed about 1,200 workers.
Ericsson said the reorganization of the unit would occur in the next six to nine months.
Ericsson currently works out of a building in Sorrento Mesa.
, Mike Allen
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Index Shows Slowdown:
San Diego’s economy declined for the third straight month in March, according to the University of San Diego Index of Leading Economic Indicators.
The March report, released Wednesday, showed a decline in five of the six components that make up the index and an overall drop of 0.4 percent. That compared with two earlier monthly declines of 0.1 percent.
Alan Gin, the USD economics professor who compiles the index, said while three consecutive months of declines normally signals a turning point in the economy, in San Diego’s case it could mean slower growth than expected for 2005.
“The potential problems mentioned the last report (rising interest rates, high oil and gasoline prices, and the uncertainty surrounding the city of San Diego’s fiscal problems) remain and, if anything, may have gotten worse,” Gin said.
Helping to depress the index in March were large decreases in local consumer confidence and the national index of leading economic indicators. The area’s stock prices and an uptick in unemployment insurance claims also caused the index to drop, and there was a slight decline in the amount of help wanted advertising.
The only increase came from building permits, which rose 0.7 percent. For the first quarter, authorized residential units jumped 8.7 percent over the same period of 2004.
, Mike Allen
Thursday, May 5
Instromedix Names Chief:
San Diego-based medical device company Instromedix Inc. said it named David Barach the president and chief executive officer.
Barach joins Instromedix, a part of the Swiss health care company Card Guard, from Extricom Inc. in San Diego, where he was executive vice president of business development for the last two years. A 20-year veteran of the technology industry, Barach held leadership positions at Global Microwave Systems Inc. in Carlsbad, CommQuest and Hughes Microelectronics, according to Instromedix.
In his new leadership role, Barach said, he wants to “pursue strategies that leverage our core technologies to develop and offer solutions that help physicians increase productivity, improve patient outcomes and lower operational costs.”
Instromedix’s specialty is cardiac monitoring systems.
, Marion Webb