Category Archives: Business

Your Plug-N-Play guide to writing Phil Scott press releases

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Phil Scott’s press releases are so damn predictable. I’m sure he has a template on file. Anytime there’s a bit of bad economic or business news, no matter how irrelevant to state government, you just plug in the bit of news and add boilerplate language about “affordability” and “bad business climate” and “those scalawags in Montpelier” (by which he means Not Phil Scott, which is itself worth a laugh since he’s been part of Montpelier’s in-crowd for a good fifteen years).

Click “Save” and “Send.” There you go.

The latest cookie-cutter release from the Scott campaign is about the closure of the Manchester-area Chamber of Commerce. That Chamber apparently existed solely as a conduit for health insurance coverage for its members. After the onset of health care reform, it was stripped of that function — and it became apparent that nobody was interested in supporting the Chamber for any other reason.

Does that mean health care reform was a mistake? Of course not. If the Chamber can’t gin up enough money to keep the lights on without being an insurance middleman, then it won’t be missed.

Well, it did serve one purpose in dying: it gave Phil Scott a pretext for firing up his Press Release-O-Meter. A flimsy pretext, but that’s all he needs.

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A useless program gets a little better

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Raise a glass, boys, to Janet Ancel, hardworking chair of the House Ways and Means Committee. For it was she who ignored the express wishes of the Shumlin administration and added some oversight to a program that sorely needs it.

I’m talking Vermont Employment Growth Incentive (VEGI), the slush fund economic development program that gives public funds to private employers promising to grow their workforce. VEGI was up for renewal this year, and the administration wanted a permanent extension (or at least five years) with no strings attached.

What it got instead, thanks largely to Rep. Ancel, was a three-year extension with legislative oversight added. She also inserted a mandated “cost-benefit analysis” to determine whether VEGI is actually accomplishing what it’s supposed to. And yesterday, the full House approved an omnibus economic-development bill including her VEGI provisions. A noteworthy accomplishment, given the administration’s active resistance.

After the jump: the unprovable merit of VEGI. 

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Fake syrup peddler takes over eco-disastrous beverage maker

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That didn’t take long. Keurig Green Mountain, the artist formerly known as Green Mountain Coffee Roasters, was sold to a private equity firm in late December; now, the company’s CEO has been kicked out of the way.

Keurig Green Mountain, Inc. in Waterbury has hired a new chief executive officer, promoting current CEO Brian Kelley to vice chairman of the board.

That’s a hell of a promotion. Kind of like being promoted from Governor to Lieutenant Governor.

And Kelley’s replacement?

Bob Gamgort, currently CEO of Pinnacle Foods Inc. in Parsippany, New Jersey, will take over leadership of Keurig on May 2. Pinnacle owns a number of well-known brands, including Duncan Hines, Vlasic, Mrs. Butterworth’s and Log Cabin, Armour and Birds Eye.

Ruh-roh, Raggy. Mrs. Butterworth’s and Log Cabin?

Them’s fightin’ words around these parts.

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Your Daily Free Press, a shell of its former self

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A bit of unintended irony in Friday’s Burlington Free Press. Page A13 featured a nice article about the awards given to the Freeploid by the Vermont Press Association.

Which, okay, whatever. The Free Press ought to take home a bunch of awards from the VPA. It is, by far, the biggest newspaper in the state. For the Freeploid, winning VPA awards is kind of like a 14-year-old faking his age and playing in Little League. Substantial built-in advantage.

But then, on page C3, there was a prime example of the Free Press’ diminished status. The page contained a column of Business Briefs, a series of items ripped straight from press releases and deployed to occupy space on a day when ad sales fall a bit short.

The first of the three started like this:

Walmart gives pay raises to 753 in Vermont

Walmart gave the largest single-day, privatesector [sic] pay increase ever on March 10 to more than 1.2 million Walmart and Sam’s Club employees in the United States, including 753 in Vermont. All employees hired before Jan. 1, 2016, will earn at least $9.60 an hour.

Well, isn’t that nice. How generous of an enterprise not known for its generosity.

But wait. Didn’t Vermont’s minimum wage just go up?

Why yes, in fact, it did. On January 1, the state minimum wage increased to… wait for it… $9.60 an hour.

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Is Phil Scott a stealth radical, or just a little lazy with the verbiage?

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Earlier today I was writing a piece about Randy Brock’s advocacy of captive-insurer regulation as a model for boosting the Vermont economy. When I was just about done writing, I came across a rather startling statement by Phil Scott, the putatively moderate Republican candidate for governor. I added it to the post, but I think it deserves fuller exploration on its own.

Brock, for those just joining us, would like to open the door to new niche markets by offering a “friendly” regulatory climate, as Vermont has done with the captive insurance industry. And South Dakota has with credit cards, and Delaware with corporate registration, and Liberia with flags of convenience.

Well, in a statement that escaped any scrutiny at the time, Phil Scott called for an across-the-board deregulatory scheme that would open all businesses to the same kind of friendly regulation as the captive insurance industry.

The occasion was Scott’s webcast following Governor Shumlin’s State of the State address. That’s the one made infamous by Scott’s odd wavering from side to side, and the fact that he was just a little bit too close to the camera for the viewer’s comfort.

Maybe that distracted us from the substance, but here’s the key passage.

The state has enjoyed significant benefits from the renewable energy industry and captive insurance, he said. “Imagine if we had a governor’s office that treated every sector in the same way,” Scott said.

Does he really mean that? Because if he does, he is staking out a remarkably radical position.

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Randy Brock puts on the red light

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Note: This post would not exist but for the work of “BP,” one of the regular contributors to Green Mountain Daily. Several weeks ago, he wrote an insightful piece looking at the dark side of the captive insurance business, which has found a receptive home in Vermont. Now, with Randy Brock citing captive insurance as a model for state policy, it’s important that we have a clear picture of the pluses and minuses of such relationships. 

Randy Brock, Republican candidate for lieutenant governor, recently threw out a tantalizing hint of a forthcoming policy initiative. He claims this great idea will create $100 million a year in new state revenue.

Brock said Thursday that he was looking to promote ideas that are similar to the push the state made to corner the captive insurance market. The state created a regulatory environment to make Vermont a leader in that industry.

… In addition to captive insurance in Vermont, he pointed to examples in other states, such as Delaware, which has laws that are friendly to corporations so many register there. South Dakota, he said, has created a niche for the credit card businesses.

Brock’s call had previously been made in even broader terms, but to little notice, by gubernatorial candidate Phil Scott:

The state has enjoyed significant benefits from the renewable energy industry and captive insurance, he said. “Imagine if we had a governor’s office that treated every sector in the same way,” Scott said.

That is, frankly, a radical idea that didn’t make it through our media’s Phil Scott Filter.

I’m not sure we want to emulate South Dakota and the credit card industry, especially not in an across-the-board fashion. A “welcoming” state regulatory climate has been responsible for some outrageous, predatory practices by credit card issuers. One could also cite Liberia as a flag of convenience (and cover for outrageous practices) in international shipping, but discretion was the better part of embarrassment there.

And that’s the problem with this kind of regulatory carve-out for a certain  niche business: it’s an open invitation to a “race to the bottom,” because the most relevant enticement a state can offer is a business-friendly approach to regulation and enforcement.

The captive insurance industry looks like a great thing for Vermont. And it is portrayed as an unvarnished good by politicians of all stripes. But there is, in fact, a dark side to the industry that is rarely mentioned in polite circles.

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They’ll have to pry my Creemee from my cold dead fingers

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Warning! Perimeter alert! Corporate invaders at three o’clock!

Dairy Queen is returning to Vermont.

… “We’d love to see [a franchisee] commit during 2016 and have an opportunity to open the first store in 2016 or early 2017,” [DQ VP Jim] Kerr said. “I think we have a pretty good chance.”

Kerr believes Burlington could support as many as five Dairy Queens, and that there are 15 to 20 potential locations in Vermont as a whole.

“Our goal would be to build throughout Vermont,” Kerr said.

Sigh.

I understand why they think Vermont is a promising market. We do, after all, consume mass quantities of frozen dairylike confections, and Vermont is the only state without an actual, name-brand Dairy Queen.

I don't think this is how they make Dairy Queen, but the recipe is a "trade secret," so I can't say for sure.

I don’t think this is how they make Dairy Queen, but the recipe is a “trade secret,” so I can’t say for sure.

What they can’t see from their Minneapolis headquarters is the fact that our state is chock full of independent joints that sell Creemees, many of substantially better quality than the corporate splooge on offer at DQ. It’s kind of like Mrs. Butterworth trying to open a “Maple” Flavored Syrup factory in Vermont.

Methinks DQ will find Vermont a tough row to hoe. Many of us are strongly attached to one or more of our local outlets. We all have our favorite spots. DQ will have to offer what they call a “unique value proposition” to gain a lasting foothold here.

I wish them luck… although not enough luck that they’d ever put a local vendor out of business.

A warning shot across Keurig’s unrecyclable bow

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Here’s an interesting tidbit from across the pond. Citing environmental concerns, the city of Hamburg, Germany has banned Keurig-style coffee pods from all government office buildings.

Lest you think, “Oh, isn’t that cute?” bear in mind that Hamburg has a population of 1.7 million people. It’s the second biggest city in Germany, and the eighth largest in the European Union.

As part of a guide to green procurement, the German city of Hamburg last month introduced a ban on buying “certain polluting products or product components” with council money. The ban includes specific terms for “equipment for hot drinks in which portion packaging is used” – specifically singling out the “Kaffeekapselmaschine”, or coffee capsule machine, which accounts for one in eight coffees sold in Germany.

“These portion packs cause unnecessary resource consumption and waste generation, and often contain polluting aluminum,” the report says.

This isn’t a Big Deal, not yet; but it is a Deal, and it ought to be causing a bit of concern at Keurig Green Mountain’s Waterbury headquarters. Because if Hamburg becomes a trendsetter, Keurig could start seeing large markets snap shut.

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GlobalFoundries: Too big to fail?

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Chittenden County is blessed — and a little bit cursed — by the presence of a large high-tech employer: GlobalFoundries, formerly d.b.a. IBM. The Essex facility is a major driver of the area’s economy, and the entire state’s economy for that matter.

And GlobalFoundries knows this, and they seem to know they have us over a barrel.

This is my inference based on a new report by the Associated Press’ master gardener Dave Gram, who has used public-records requests to discover the extent of GF’s demands on the state.

We already knew about the questionable $1 million from the Enterprise Fund. Gram now brings us tidings of a $17 million highway project that GF wants fast-tracked. It would involve improvements on Route 22A, which happens to be the most direct route from the Burlington area to New York State. (22A goes straight through downtown Vergennes. Hope you like your new highway, Vergennians!)

But otherwise it’s of little utility to intra-state traffic. For general transportation, trade and tourism puposes, improvements to US-7 would be more efficacious. But I have a feeling that what GlobalFoundries wants, GlobalFoundries will get.

(Now, if GF can convince New York State to build a decent highway from the Vermont border west of Rutland to I-87, then that would be a great benefit to the western Vermont economy as a whole. If they can do that, then our investment in 22A would be a worthwhile tradeoff.)

GlobalFoundries also wants state backing for “payments to GlobalFoundries from the Regional Greenhouse Gas Initiative, a multi-state pact that spins off money to states with a low carbon footprint.” Gram’s report doesn’t go into the reasoning behind GF’s request; in the absence of more information, I have a feeling that there are more pertinent uses for the money.

But hey, GlobalFoundries is a yoooge employer, and its loss would cripple Vermont’s economy. We may not have much choice.

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The Republicans have sharpened their elbows

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It’s been a tough few years for legislative Republicans. They’re a perpetual minority with little influence. Push comes to shove, about all they can do is call a press conference and let Don Turner bemoan the latest actions of the Democratic majority.

This year, things are looking a little different. Well, they’re still in a minority, but they seem to have gotten a little bit feisty — looking for opportunities to throw their weight around. I’m guessing it as something to do with Phil Scott’s candidacy for governor:

— It’s their best prospect for retaking the corner office since 2010*, which has to boost their morale, and

— The more trouble they cause, the better it is for Scott. (Who, as the Nice Guy in the room, would never ever stoop to chicanery, no sir. Ahem. See below.)

*Yes, Scott Milne almost won in 2014, but nobody thought he stood a chance. He wasn’t considered a prospect until election night. Until then, he was actually a drag on Republicans’ view of their chances.

We’re still early in the session, and we’ve seen two very high-profile spots where Republican lawmakers went out of their way to throw a wrench in the works.

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