“Utilities and industry analysts estimate it will cost families 30% to 50% more to heat their homes with natural gas this winter,” the Wall Street Journal reports (18 July 2008). Worse: Families using heating oil — such as in New England — could face increases of 50% to 100%. People may end up paying $5 a gallon for heating oil this winter, a 72% increase over last year’s price, according to the Oil Heat Institute of Long Island.
It’s no longer just a problem for the elderly and poor; this time it will be a middle-class phenomenon, too. A colleague of mine (located in New Hampshire) says many New Englanders are just scraping by, paycheck to paycheck, and can’t afford the oil price hikes. They’ll resort to using kerosene space heaters, in unsafe ways. As a result, “some people will die this winter,” he predicts.
Heating oil sticker shock to hit New England
Newell Rubbermaid Inc. plans to trim its product line — eliminating low-end plastic storage containers, trash cans and office chair mats — in favor of high-end, innovative products. The company “plans to invest more heavily in research and advertising for more-innovative products,” according to a Wall Street Journal article, aptly headlined: “Rubbermaid Wants to Be Less of a Commodity” (16 July 2008). The innovative products include containers for fruits and vegetables with vented lids to keep those foods fresher.
The primary reason for trimming the low-end of the product line is the rising cost of the petrochemical-based resin used for making plastic products.
Continue reading “Rubbermaid sees its future as innovation + premium prices”
Utah became the first U.S. state to put its government workforce on a four-day work week, and some other states may follow. The “Working 4 Utah” initiative — a response to soaring energy costs and tight budgets — will begin in August.
Government service hours will be extended to 7 a.m. to 6 p.m. Monday through Thursday and offices will be closed Fridays (except for essential public services).
Utah expects to cut electrical and utility costs (13.5 hours on Fridays) and will monitor the energy savings. For employees, it may mean they can get household chores done on Fridays, according to Workforce Management (14 July 2008). But day care and public transportation services will need to accommodate the extended hours (10-hour work days) Monday through Thursday.
State officials in Minnesota, Oklahoma, West Virginia and Arkansas are examining the feasibility of a four-day schedule, Workforce Management reported. Also, Colorado is mulling it over. Various county governments and towns are, too.
Is this the start of a rush towards green factories? “MAS Holdings claims to have built the world’s first carbon-neutral garment factory in Sri Lanka,” reports Anthony Townsend at The Institute for the Future. The plant will make underwear for retailer Marks & Spencer in the UK.
While the plant cost 25% more to build than a traditional design (it would have been 15% without some frills due to being a showcase), with rising fuel prices it’s expected to pay for the difference in less than five years.
According to MAS Holdings:
It features the biggest installation of solar panels to date in Sri Lanka, which will provide around 10% of the total electricity required for the plant. The remaining electricity will be mini-hydro, sourced through a green power agreement that MAS pioneered for Sri Lanka earlier this month.
Apparently this is part of Marks & Spencer’s wide-ranging effort to be carbon-neutral by 2012.
The top external concerns of U.S. CFOs:
- Consumer demand
- Credit markets & interest rates
- Housing-market fallout
- Cost of fuel
- Cost of nonfuel commodities
Top internal, company-specific concerns:
- Cost & availability of labor [nonfinance]
- Ability to forecast results
- Cost of health care
- Supply-chain risk
- Data security
Source: Duke University/CFO magazine survey of 475 U.S. CFOs, May 2008
June 2007 (previous post) What CFOs worry about
Most companies fail at forecasting earnings
CFOs predict: The top business risks through 2009