Tag: Owens-Illinois

In Venezuela, Chavez Seizes U.S Manufacturer’s Plants

With the coming demise of the Castro dictatorship in Cuba, Chavez must want to ensure his global preeminence as the most aggressive socialist leader of an impoverished, undemocratic country. He’s giving Alyaksandr Lukashenka, the Belarus dictator, a run for his money.

Reuters, “Venezuela sends troops to U.S. glassmaker’s plants

CARACAS, Oct 26 (Reuters) – Venezuela sent troops to two plants owned by U.S. bottle maker Owens Illinois on Tuesday after President Hugo Chavez ordered nationalization of the company’s operations on charges of environmental crimes and exploiting workers.

Owens Illinois stock (OI.N) fell nearly 6 percent after the socialist leader’s televised address on Monday night in which he expropriated the plants.

“There are military personnel on the scene at each of the plants,” said Owens Illinois spokeswoman Stephanie Johnston.

UPDATE (4 p.m.): A statement from Owens Illinois:

Late last night we learned of the Chavez administration’s intention to expropriate O-I’s operations in Venezuela. We were surprised to learn of this decision and we are prepared to work with government officials to better understand the situation.

O-I has been supplying glass food and beverage containers to meet the needs of the Venezuelan people for more than 50 years. Our two plants in Venezuela, located in Los Guayos and Valera, employ more than 1000 people and represent less than 5 percent of our global segment operating profit. We remain committed to complying with all laws and regulations.

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Net Operating Loss Tax Relief Helps Companies When They Need It

Given the severe economic challenges facing our nation, policymakers are wise to look at tax relief to help carry many American businesses during a very rough patch. Contrary to the claims raised in recent stories in The Wall Street Journal (“Write-Offs a Boon to Builders, Bankers“) and the Washington Post (“Lawmakers and Financial Experts Question Obama’s Tax Cuts“), extending the period in which struggling companies can “carry back” current net operating losses or NOLs will help a wide cross-section of industries, including the manufacturing sector. The press needs only to look at a recent letter to Congress urging prompt enactment of NOL relief, which was signed by some 70 trade associations, to see the broad range of interest in the proposal.

Notably, the NOL carryback proposal it describes falls squarely within the three factors the Post’s editorial board uses to judge tax provisions in the stimulus package: targeted, timely, and temporary. (“Dr. Obama’s cure.”) It’s also important to understand that this tax relief is purely a timing issue, helping companies gain quick access to cash now rather than in the future. Specifically, the relief would temporarily change the current carryback period from 2 to 5 years for NOLs incurred in 2008 and 2009.

For manufacturers, NOL relief has a proven track record of helping companies and workers through tough times. In the wake of the 9/11 terrorist attacks, legislators extended the carryback period, a life saver for many manufacturers and manufacturing jobs. In fact, the CEO of one NAM member company, Owens-Illinois’ Joseph Lemieux, wrote a letter to President Bush citing the jobs restored and the plant reopened as a direct result of the enacted NOL relief. Union leaders, company management, and employees collectively praised the plant reopening back in April 2002. (See this AP story for more.) Previous NOL relief enacted in 1997 also produced effective results.

The proven track record of NOL relief speaks volumes, not rhetoric. Bottom line, struggling companies will be able to get an infusion of cash right now, when they need it the most.

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