Southwest-AirTran merger means more cities, maybe not lower fares

The latest billion-dollar airline merger involving Southwest Airlines and a low-cost competitor almost certainly will give passengers more destinations to fly to from Nashville International Airport, but it won't necessarily mean lower fares on all the new routes.
That's the consensus opinion of airline analysts and business travelers after Monday's announcement of a pending merger between Southwest Airlines and AirTran Airways.

Southwest is already the largest carrier at Nashville International, with more than half of the airport's daily flights, and the merger would add 37 cities to Southwest's route map, including Atlanta's giant Hartsfield-Jackson Airport.

"We do see some opportunities for additional service in Nashville," assuming that the deal is approved by regulators, said Raul L. Regalado, president and chief executive officer of the Metropolitan Nashville Airport Authority. Not all of those new cities would necessarily be served directly from Nashville, though.

RelatedQuestions, answers on Southwest-AirTran mergerWhere AirTran flies that Southwest doesn't

Southwest Airlines will buy AirTran in a $1.4 billion cash-and-stock deal that expands its markets in the Southeast and on the Eastern seaboard. If debt and aircraft operating leases are included, the deal is worth $3.4 billion.

The merger also would bring the first international service to Southwest, as AirTran now flies to destinations such as San Juan, Puerto Rico; Aruba; Nassau, Bahamas; and Cancun, Mexico.

The buyout, funded mostly with debt, would also give Southwest a bigger slice of the market in cities such as Boston and New York, where it has been expanding recently.

"But what this does for Southwest is provide them immediate access to the Atlanta and New York markets," Regalado said. AirTran doesn't serve Nashville now, but some cities that AirTran serves — where Southwest doesn't fly — could be added to Music City's air destinations.

Orlando-based AirTran is the successor to ValuJet, a low-fare carrier created in Atlanta in 1993 mostly by former Eastern Airlines executives.

Fares may not come down

The deal won't necessarily mean lower airfares in Nashville, Atlanta or anywhere else that Southwest flies, said Tom Parsons, who operates the BestFares.com website.

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BlackBerry maker unveils tablet as it chases rival iPad

NEW YORK — Research In Motion Ltd., maker of the BlackBerry smart phone, unveiled a tablet computer to compete with Apple Inc.'s iPad and add a fresh source of revenue as BlackBerry sales growth slows in the U.S.
The device, called the BlackBerry PlayBook, has a 7-inch (18-centimeter) screen, RIM co-CEO Jim Balsillie said in an interview in New York. That's smaller than the iPad's 9.7-inch display. The PlayBook is also slimmer and lighter than the iPad.

RIM is racing to get its tablet into stores as Hewlett- Packard Co., Samsung Electronics Co. and Motorola Inc. build similar devices in a bid to emulate the success of the iPad in filling the gap between smart phones and laptops. Apple sold 3 million iPads in the first 80 days after the device's April debut, eclipsing sales of its iPod music player.

"RIM needs a tablet device because it's necessary for all the device makers to have a multiplatform strategy to compete in the long-term," said Scott Sutherland, an analyst at Wedbush Securities Inc. in Los Angeles. "With new devices coming out on multiple operating systems, it's as much defensive for RIM to have a tablet as it is offensive."

The tablet will be available in the U.S. in early 2011 and in other countries in the second quarter, said RIM, which didn't give a price for the device.

RIM, based in Waterloo, Ontario, rose as much as $1.29, or 2.7 percent, to $49.65 in extended trading after closing at $48.36 on the Nasdaq Stock Market. The stock has lost 28 percent this year, compared with a 38 percent gain for Apple.

"The smaller screen allows a little more portability than an iPad, making it easier to carry in your briefcase," said Matt Thornton, an analyst at Avian Securities LLC in Boston.

'Busy working people'

The company is counting on the tablet to increase revenue as the BlackBerry loses ground. RIM's share of the smart phone market slid to 18.2 percent in the second quarter from 19 percent a year earlier. Apple's iPhone boosted its share to 14.2 percent from 13 percent, while devices based on Google Inc.'s Android software surged to 17.2 percent from 1.8 percent, according to researcher IDC.

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Banks will have to share risk under new FDIC rules

WASHINGTON — Banks will have to share in the risk when they sell investments of the kind that rocked the financial system in 2008 under rules adopted Monday.
The Federal Deposit Insurance Corp. is requiring banks to hold at least 5 percent of the securities on their books, as part of new rules the regulator adopted Monday that were required under the new financial overhaul law. Banks would be required to purchase their share of the securities beginning Jan. 1.

The idea is that banks with such exposure to risk would be more careful about properly screening borrowers. Experts say the bank's lack of investment in the risky securities contributed to the financial meltdown.

Financial industry executives have opposed the FDIC requirements. Banks don't have enough room on their balance sheets to retain 5 percent of all the loans they make, some executives have maintained.

"The FDIC is seriously harming the federal government's ability to exit the U.S. housing market and re-establish a private mortgage market," said Tom Deutsch, executive director of the American Securitization Forum, which represents the Wall Street firms that issue asset-backed securities. He was referring to the government's control of mortgage giants Fannie Mae and Freddie Mac. The FDIC's new rules "will make it extremely difficult" for banks to issue new securities, Deutsch said.

The so-called "skin-in-the-game" requirement was mandated by the financial overhaul law enacted in July. There is an exemption to the requirement. Banks won't have to meet it for mortgage securities that contain so-called "safe" loans, such as a traditional 30-year fixed-rate mortgage with a 20 percent down payment.

The securities may contain bundles of mortgage, credit card or auto loans. The securities will have to meet the FDIC's requirements to ensure that the government doesn't seize them if the bank fails. In addition to the 5 percent minimum holding for banks, there are other requirements such as what the banks must disclose to regulators about the securities and what documents borrowers must submit for the loans.

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Crude oil rising; could push gasoline prices up, AAA says

Gasoline prices are about to begin trending upward again, although probably not significantly, according to the latest Fuel Price Brief from AAA.
While the average price of unleaded regular gasoline in Nashville today is $2.54 a gallon, 2 cents a gallon less than last week, the price of crude oil has risen nearly $3 a barrel in the past few days, which will push gasoline prices up as well, AAA said. Tennessee’s statewide average for gasoline is $2.55 a gallon, down nearly 3 cents from last week.

The shutdown of an Exxon refinery in Texas for the next few weeks and the weakness of the U.S. dollar against the euro are being blamed for the higher price of crude and the impending gasoline price hikes.

“Crude oil is stuck between $70 and $80 and will most likely yo-yo up and down in this price range for quite some time,” said AAA spokeswoman Jessica Brady.

“As with any increase in the price of crude oil, retail gas prices will move in the same direction,” she said. “Consumers will see slight increases in gas prices this week, but it’s very likely we will see the price of crude move lower next week, unless the dollar remains weak.”

Exxon is closing the refinery to switch it over to producing winter gasoline blends from summer blends, the auto club said. The refinery, which processes more than 344,000 barrels of oil daily, will be closed for “several weeks,” Brady said.

The national average price of unleaded regular is $2.70 a gallon, down 3 cents from last week, the auto club reported.

cwilliams1@tennessean.com

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Ministry's health coverage for Christians finds strength in numbers

MELBOURNE, Fla. — A Christian ministry that boasts 40,000 members across the country has a decidedly different approach to health coverage.
Medi-Share, operated by Christian Care Ministry, is the largest of the nation's three major health-care sharing ministries.

With a combined 100,000-plus members pooling their money to help pay one another's health-care bills, these entities get strength in numbers — and also, according to the federal health-care reform measure passed earlier this year, the distinction of being exempt from requirements calling for universal health insurance starting in 2014.

"Christians have always come together to help each other out," ministry President Robert Baldwin said. "We didn't always have health insurance as a nation. That really kind of took off after World War II."

The ministry cites Galatians 6:2 as its mission: "Carry each other's burdens, and in this way you will fulfill the law of Christ."

With Medi-Share, members pay monthly contributions based on the number of people covered, the age of the oldest member of the family and their "annual household portion," the amount a member must pay out of pocket each year before being eligible to submit medical bills to Medi-Share.

Members can choose a higher annual household portion in exchange for a lower monthly share.

Each contribution is deposited in an individual account in that member's name at a Christian credit union in California. Medi-Share has a limited power of attorney to shift money between members' accounts as well as to withdraw administrative fees.

When a member submits an eligible medical bill, Medi-Share uses that power of attorney to transfer money between accounts accordingly. It also negotiates with health-care providers to lower the bills.

"We don't believe that uninsured people should pay two to three times what insured people pay," Baldwin said.

Members' contributions typically are far less than insurance premiums. For instance, the monthly share for a family of three or more headed by a 50-year-old with a $1,250 annual household portion is as low as $439 a month.

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Jeff Cornwall: Adaptation skills come in handy for entrepreneurs

When entrepreneurs enter the market, it is often with a very clear vision for their business. They know what they want to sell and to whom they want to sell it.
Alecia Venkataraman, who is completing her master of business administration degree at Belmont University, where I teach, launched her nonprofit, Make It Beautiful, to serve a very specific group of people.

Based on her own experience as a young adult who overcame great personal adversity, Alecia wanted to create an organization that would help others facing similar life circumstances. Make It Beautiful would offer services to help inspire these people to pursue their own dreams.

MIB developed programs for children facing terminal illnesses, as well as their families; for single parents and their children; for families trying to start over after tragedies; and for others facing significant adversities.

MIB had a team that offered services in life coaching, wellness counseling, legal issues, career planning and connecting with community resources. From its very beginning, MIB was overwhelmed with potential clients seeking help. Alecia had appeared to identify a need and a solution among her target population.

However, as successful as its programs were, the business model of MIB had a flaw. It relied on donations and sponsorships to fund the revenues it needed for its operations, and Alecia was not able to secure enough funding to sustain the idea.

Alecia had been supplementing operations from her own savings, but that money was running out. It became painfully clear that she'd have to cease operations at MIB.

Along the way, Alecia had sought advice from many different people about the problems she was having with the company. They all believed that the concept she was offering had value — and that people would be willing to pay for it.

Find a new way

Then it dawned on Alecia.

It was time to try to take the services offered at MIB and offer them to a different market that had the ability to pay. Like most entrepreneurs, she had to adapt her business model.

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Nashville Business Briefs: Insurer's road hiring tour comes Wednesday

American General Life and Accident Insurance Company will bring its national road hiring tour to Nashville on Wednesday as it moves to hire several thousand new sales agents around the country over the next several years.
The company will bring a tour bus to Centennial Park at 25th Avenue and West End for two hours from 3 to 5 p.m. Wednesday, accepting resumes and discussing employment with job seekers. Other company executives will be available before and after the bus event to discuss employment with the insurer.

Jobs are being filled nationally. The company couldn't say how many of those positions will be in its Nashville operations.

The 10-day cross-country hiring tour will hit 15 cities through Oct. 6 from Baltimore to Los Angeles. The blitz is being done in conjunction with CareerBuilder, the jobs website.

"People are invited to pick up information, drop off their resumes, register for door prizes, enjoy refreshments — and even bring the kids if they'd like," said Dewane Lewis Jr., general manager of AGLA's Nashville office.

— RANDY McCLAIN

Cumberland Heights says dispute will cost 63 jobs

Cumberland Heights, a dependency treatment center here, said Friday it will cut 63 jobs from its staff of 295 full-time positions and trim the number of beds it operates by roughly one-third as a result of a disagreement with a major insurer.

The alcohol and drug rehab center has been in a dispute with Magellan Behavioral Health, which manages its patients' insurance claims for BlueCross BlueShield of Tennessee. Magellan recently canceled the rehab center's contract because of perceived problems with patient care.

Cumberland Heights has objected to that and now says it will be forced to make cuts to cope with lost revenue. Officials with the 177-acre rehab center on River Road also say they have done nothing wrong. The effect of the dispute, Cumberland says, is that patients can expect the amount that insurance covers for treatment to decline. The center says it also will reduce the number of staffed inpatient beds to 80 — about one-third less than it operated in the first half of this year.

— RANDY McCLAIN

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Beef plants wage war on E. coli

FORT MORGAN, Colo. — Amid the cattle carcasses zipping down the disassembly line and the herd of workers wielding the sharpest of knives, there's a war going on each day at Cargill Inc.'s sprawling beef plant on the northeastern Colorado plains.
It's a fight against E. coli, potentially lethal bacteria behind several big disease outbreaks and food recalls in recent years. It's fought with technology, lab testing and a phalanx of safety inspectors, and it may soon involve a pioneering vaccine that cuts E. coli risks before cattle even arrive at the slaughterhouse.

Cargill's — and for that matter the meat industry's — ultimate goal: Never repeat the experience of Stephanie Smith.

Smith is the young Cold Spring, Minn., dance instructor who lost the use of her legs, bowel and bladder in 2007 after eating a Cargill-made hamburger tainted with E. coli O157:H7. The highly publicized Smith case highlighted the human consequences of even one safety slip-up.

Big food recalls and disease outbreaks also can cost a company tens of millions of dollars while tainting a firm's reputation. It's a critical issue for Cargill, a global food colossus that is based in Minnetonka, Minn.

A recent survey conducted for National Public Radio found that 61 percent of Americans were worried about contamination of their food supply, with meat the top concern.

"I've interacted with people who've had foodborne illnesses, and it is a terrible and painful thing for them and their families," said Nicole Johnson-Hoffman, general manager of Cargill's Fort Morgan plant and a lawyer who worked on the Smith case. "We need to keep these people in mind when we do our job."

Yet for all the effort to contain E. coli, the fight seems to get only tougher, as evidenced by an August recall from a Cargill meat plant in Pennsylvania. It was a relatively minor one as recalls go. But it involved a strain of E. coli — O26 — that had not previously been associated with meat that got people sick.

The Centers for Disease Control and Prevention estimates that 73,000 people get sick each year from E. coli O157:H7. The transmission of the bacteria to people is simple: through feces. With one mistake at the slaughterhouse, a microscopic piece of cattle dung can make its way onto an animal's carcass and into a finished beef product, though proper cooking will kill it.

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NBC Universal boss to leave after Comcast deal

NBC Universal Chief Executive Jeff Zucker said Friday that he would be stepping down as soon as the merger between Comcast and NBC Universal was completed, which is expected later this year.
Zucker made the announcement to his staff in New York on Friday morning, and it was first reported by The New York Times . The move was not entirely unexpected because Comcast, which will own the majority stake of the combined entity, has made it clear that Comcast Chief Operating Officer Steve Burke would be in charge of NBC Universal. The timing of the announcement, however, was sooner than most people had figured.

In the past few weeks, Zucker and his bosses at General Electric Co., which currently owns NBC Universal, have been tussling over when Burke would unveil his plans for a new organizational structure, which presumably would not include Zucker.

Zucker, who rose to prominence as the youngest-ever executive producer of the Today show, took over the company in 2007.

Late-night moves caused controversy

It was a tumultuous reign. Although Zucker energized the company, moved NBC Universal into the digital age and was a key architect of the online video website Hulu, he badly misfired by hiring an inexperienced independent TV producer, Ben Silverman, to be in charge of programming for the NBC network.

His risky and well-publicized move to shift Tonight Show host Jay Leno to an earlier, nightly program severely damaged NBC's prime-time schedule and seriously affected the finances of NBC affiliate TV stations.

Earlier this year, Zucker's plan to move Leno back to late night infuriated Conan O'Brien, who had been given the Tonight Show , and led to a protracted separation that played out like a soap opera on late-night TV.

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Federal Reserve is ready to act if weak recovery lingers

WASHINGTON — The Federal Reserve signaled Tuesday that it's worried about the weakness of the recovery and is ready to take further steps to boost the economy if needed.
Fed officials said they also are concerned that sluggish economic growth could prevent prices from rising at a healthy rate.

But at the end of its meeting, the Fed announced no new steps to try to rejuvenate the economy and drive down unemployment. Instead, it hinted that it's prepared to see if the economy can heal on its own.

Stock prices, which had been relatively flat before the Fed's statement, fluctuated before returning to about the same level in late-afternoon trading.

The meeting is the last for the Fed's chief policymaking group before the Nov. 2 midterm elections. It comes as voters are focused on the economy and the jobs crisis. Polls show they probably will punish Democrats in Washington for the sluggish economy.

In its statement, the Fed used the same language it did in August to sketch a downbeat view of the economy. It concluded that economic activity has slowed in recent months. And it warned that the pace of growth probably will be "modest in the near term" — almost identical to the assessment it made a month ago.

But the Fed delivered a stronger signal that it would take new steps to lift the economy. The Fed said it is "prepared to provide additional accommodation." In its previous policy statements, the Fed didn't go that far. Instead, it had said it would "employ its policy tools as necessary."

The Fed made clear that given the economy's weakness, it's more concerned about prices falling than rising. It didn't use the word deflation. But some economists have raised fears about the country sliding into a deflationary spiral. That's a widespread drop in wages, prices of goods and services and the value of stocks and homes.

"They are more worried about the economy and deflation than I thought they would be," said Sung Won Sohn, an economist at the Martin Smith School of Business at California State University.

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Home-care project could improve delivery, cut costs

A few blocks from the nation's Capitol, a project is under way that may actually have a significant chance of improving the delivery of health care.
In health reform vernacular, the project is called Independence at Home. To patients there, it is known as the Medical House Call Program, an outreach of the Washington Hospital Center. The idea is to have doctors and nurses provide as much care as possible for Medicare patients at home to avoid unnecessary hospitalizations.

This gives rise to a clinical question: Would home visits from a physician provide better care and be more cost justified by the elimination of hospitalizations?

From the perspective of manpower, it will take significantly more time for physicians to make house visits than to see patients in a clinic. In clinics the average physician can see 30 or more patients a day. When a doctor is making house calls, even in a narrow geographic area, the metric drops to 10 to 11 patients a day.

So much for professional efficiency, but what about other costs?

The Medical House Call Program at Washington Hospital Center serves roughly 600 patients and was started more than a decade ago. Its participating patients have found their expected hospitalizations for the sickest patients to be reduced by two-thirds.

Accordingly, the program has a track record of success, but now Medicare must determine if it will succeed on a larger scale, and whether it is a model for the rest of the country.

Project finances are cloudy

The Independence at Home Program, funded by the CMS Center for Innovation, is Medicare's three-year demonstration project slated to begin in January 2012.

It takes 10,000 of Medicare's sickliest and most expensive patients — those chronically ill patients who would be likely to visit an emergency room several times a year and be hospitalized repeatedly. The program would reward providers who cut treatment costs by 5 percent, receive positive patient reviews and improve health outcomes.

As with most medical innovations, the project finances are cloudy. The Medical House Call Program does not receive any upfront money. Physicians are not paid to travel from home to home or for coordinating an individual patient's care. The project requires a shared savings approach in order to make it financially feasible.

Only a few years ago, hospitalists were considered to be innovative. Since that time, Nashville startups like CareHere have placed physicians in employer settings and achieved significant savings.

Tennessee's largest nursing home provider is now modeling a program in which physicians are based full time in skilled nursing facilities. Whether in the hospital, in the nursing home or at home, dedicated care by a doctor can result in significant savings.

Let's hope these innovative projects are properly funded and fairly analyzed. Stay tuned for the results.

Dick Cowart is chairman of the Health Law and Public Policy departments of the Baker Donelson law firm and a past president of the American Health Lawyers Association. Reach him at dcowart@bakerdonelson.com.

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Health insurers to halt new child-only policies

LOS ANGELES — Major health insurance companies in a number of states, including Tennessee, have decided to stop selling policies for tens of thousands of children rather than comply with a new federal health-care law that bars them from rejecting youngsters with pre-existing medical conditions.
BlueCross BlueShield of Tennessee, Anthem Blue Cross, Aetna, Cigna and others will halt new "child-only" policies in Tennessee, California, Illinois, Florida, Connecticut and elsewhere Thursday when provisions of the nation's new health-care law take effect, including a requirement that insurers cover people younger than 19 regardless of their health histories.

BlueCross BlueShield, the state's largest insurer, was "the last insurance company remaining in Tennessee that was issuing child-only policies," spokeswoman Mary Thompson said.

"We just could not accept all of the risk for this group."

RelatedSeniors won't lose Medicare Advantage access

Coverage is still available for children through their parents, who can add a child to an existing BlueCross family policy without regard to pre-existing conditions, Thompson said.

Parents can also turn to CoverKids, Tennessee's health insurance program for children.

Nationwide, the action will apply only to new coverage sought for children and not to existing family policies or those provided to youngsters through their parents' employers. As many as an estimated 500,000 children nationwide would be affected by the insurers' decisions, according to state and national experts.

Some insurers said they are acting because the new federal requirement could create huge and unexpected costs for insuring children. They say the rule may prompt parents to buy insurance only after their kids become sick, producing a glut of ill youngsters to insure. As a result, they say, many insurers would flee the marketplace, leaving only a few to shoulder a huge financial burden.

The companies said that they now sell relatively few child-only policies.

The change has infuriated lawmakers, regulators and health-care advocates, who say it will force more families to enroll in already strained public insurance programs.

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Designer to the stars wants to open school

Nashville businessman and clothier Manuel Cuevas has spent a 50-year career outfitting everyone from presidents to pop stars, but is best known for his embroidered suits, shirts and dresses worn onstage by country singers, earning him the nicknames the "King of Cowboy Couture" and the "Rhinestone Rembrandt."
Over the years, Cuevas has created clothes that have come to define key eras in pop culture history: Elvis Presley's signature 1970s white fringed jumpsuit, the Beatles jackets on the cover of the Sgt. Pepper's Lonely Hearts Club Band album, all-black outfits for Johnny Cash.

A longtime personal designer, in 2006 Cuevas tried his hand at designing and distributing a retail clothing line under his own name, Manuel Exclusive, an enterprise that he says fizzled two years later over differences with financial backers.

Today, the 75-year-old Cuevas has returned to his roots, filling orders for clients such as Tanya Tucker and Little Richard, but planning for new challenges. He hopes to sell the three-story historic building at 1922 Broadway that houses his studio for nearly $1.4 million to raise funds for an international design school.

RelatedDesign studio for sale draws wide interest

Cuevas spoke with Tennessean music business reporter Anita Wadhwani last week.

How is business going these days? Who are your clients?

It's going really, really well. I'm focused on the individual client. I always have been. My clientele right now is about 60 percent private individuals. About 40 percent are the famous people — you know, I've done the Rolling Stones, the Beatles, the Elvises. I've done presidents and I've done kings and queens all over the world, but many of my clients are private clients. They're doctors, lawyers and their daughters.

You ended a partnership with investors to sell a retail line called Manuel Exclusive two years after it started. What happened?

I don't like the idea of becoming part of the corporate world. My complaint is just about quality. I sensed there wasn't much interest in customer service. I'm more interested in person-to-person work. And we didn't have the same goals in common.

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Randy McClain: Economy changes face of Nashville's Future 50

Every year since the early 1990s, the Nashville Area Chamber of Commerce has honored private businesses expanding at a rapid clip with its Future 50 awards. The awards, sponsored in part by The Tennessean , are now entering their 19th year.
The idea is to cast a spotlight on corporate rising stars in the Nashville area — the kind of companies that are adding sales and jobs, helping the local economy forge ahead in good and bad times alike.

The winners also reflect their times. This year, more than half of the 50 winners have technology-related operations. They develop and sell software; handle online marketing chores; or provide electronic solutions to pay the bills, track financial records or interact with customers across a wide array of industries.

The flip side of that equation is that old-line firms don't show up on this year's list so much. For instance, the only construction company that pops up for the 2010 awards is the $39 million-a-year in revenue SouthLand Constructors, based in Brentwood.

Three years ago its revenues nearly doubled year over year. For 2010-11, though, it projects sales to be flat as construction work slows because of a weakened economy.

After the lull, though, SouthLand expects its revenues to increase by 10 percent to 12 percent a year. Still, SouthLand has managed to add 16 employees since 2007, and that's really the bottom line for any Future 50 winner.

How to reinvent yourself

Compare SouthLand's growth rate with a tech company such as Future 50 winner Ingenuity Associates, also of Brentwood, which saw sales double last year for its information technology consulting services. It has grown from three employees to 20 in a three-year period.

Then there's an evolving company such as DSi, Document Solutions Inc., which transformed itself from a photocopying service for law firms and a document-scanning provider into something much more. Today, partners Tom Turner and Kevin Tyner help attorneys and corporations with electronic screening of documents when complex lawsuits or other legal tight spots arise.

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Is Nashville big enough for two convention centers?

Some large convention groups that abandoned Nashville when they outgrew the Gaylord Opryland hotel's meeting and exhibit space are already booked for 2013 and beyond in the new downtown Music City Center.
But several that stage annual conventions with thousands of guests are holding out hope that Gaylord Opryland could snag some of their future business, too, if the Gaylord Hotels property ever expands.

With the Music City Center under construction to replace Nashville's too-small convention hall on Lower Broadway, the city will have two large convention centers to promote, although Opryland executives don't view the facilities as rivals.

Frenemies might be more like it.

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"No question, it's a head's up for Gaylord," said Drew Dimond, a Nashville hotel consultant with Dimond Hospitality Consulting. "I don't see how they can't be competitors. The bottom line is to get the bodies in the beds. (But) competition isn't bad."

Butch Spyridon, president and CEO of the Nashville Convention & Visitors Bureau, agrees the two facilities will go head to head over some business. "But Nashville is strong enough as a destination, and there is enough business for both to do well," he said.

Convention jockeying by potential customers — with their ultimate contract choices based on available meeting dates, room rates and other factors — shows how the two big convention players here may compete and complement each other when both are in full swing later this decade.

"I think naturally they will compete against each other, and that is good for the meeting planner," said Sharon Sullivan, vice president of marketing and conferences for the American Association of Homes and Services for the Aging.

Her group is one of those that were enticed back to Nashville by the prospect of the Music City Center opening in three years.

The association of nonprofits that serve the elderly was last here in 2004 at the Gaylord Opryland Resort & Convention Center and initially rebooked with Gaylord for 2014 on the condition that it undertake an expansion of meeting and convention space, Sullivan said.

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BP's brand value takes tumble with oil spill

NEW YORK — BP may have plugged the leak in the Gulf oil spill, but the damage done to its brand will take years to fix. A new marketing industry report released Wednesday shows the British oil company has tumbled off a list of the world's top 100 brands.
Japanese automaker Toyota suffered from repeated recalls and safety problems, pushing it out of the top 10 on branding firm Interbrand's rankings for the first time in seven years, according to the report.

The damage could have been worse for Toyota, said Interbrand CEO Jez Frampton, hinting at how far BP fell.

But Toyota already had a reputation for reliability and turned back to that as it dealt with the crisis.

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"Where Toyota got it right was that they went back to their vision, and they talked about what the Toyota brand was really about, quality and safety," he said.

"BP continued talking about tactics, not strategy, and they're still not telling us what their long-term vision is."

Brands are considered a company's most valuable asset. They're more than just logos and colors. Brands are shortcuts for shoppers, letting them know exactly what to expect.

Interbrand ranks companies by the amount of their revenue attributable to their brands. It uses a formula that combines the brand's future strength and its role in creating demand.

Coca-Cola ranks No. 1

Coca-Cola, IBM and Microsoft were again the three most valuable brands this past year. Coca-Cola has held the top spot every year since the survey's inception in 2000, with its brand valued at $70.45 billion this year.

When brands don't live up to their identity, they suffer, said Jean-Pierre Dube, a University of Chicago marketing professor.

BP fell so much because the lengthy saga of the oil spill, coupled with the company's mishandling of the crisis, was at odds with its identity. For years the company has been pushing its "Beyond Petroleum" slogan to get people to think of it as more than just an oil producer.

"It stood for energy and reliability," he said. "It was one of those big brands that people just trusted, and they were at the forefront of industry."

And now?

"The immediate emotion it evokes is anger and a little bit of distrust. It feels a little bit like the Enron scandal."

Technology companies Apple and Google grew the most in terms of dollar value, jumping at least 36 percent.

Google moved from seventh to fourth place, while Apple moved from the 20th to 17th.

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New jobless claims fell slightly last week

WASHINGTON -- The number of newly laid-off workers seeking unemployment benefits dropped slightly last week to its lowest level in two months, a sign that employers are cutting fewer jobs.
The Labor Department said today that new claims for jobless benefits fell by 3,000 to a seasonally adjusted 450,000, the third decline in four weeks. Many economists had expected an increase.

Claims have fallen by 11 percent in the past month, after jumping to 504,000 in the week ending Aug. 14. The decline indicates layoffs are easing, even as the pace of economic growth has slowed since earlier this year.

The four-week average of new claims, which reduces volatility, fell sharply to 464,750, down 13,500 from the previous week.

The report follows other data earlier this week that shows the economy is still growing, but at a slow pace. Reports on retail sales and industrial production both showed modest gains.

Still, many economists forecast that economic output will increase by less than 2 percent in the current quarter. That's down from 3.7 percent in the January-to-March quarter and not fast enough to reduce the unemployment rate, which is currently 9.6 percent.

The unemployment claims report covers the week that included Labor Day, and claims frequently drop in holiday-shortened weeks.

Initial claims are still above levels that would signal widespread hiring. In a healthy economy, claims usually fall below 400,000.

The number of people receiving benefits fell by 84,000 to just below 4.5 million. But that doesn't include several million people who are receiving unemployment aid under extended programs approved by Congress during the recession. The extended benefit rolls fell by more than a half-million to just under 5 million in the week ending Aug. 28, the latest data available.

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Clarcor: Third-quarter earnings show continued recovery

Clarcor, the Franklin-based filter maker, said its third-quarter earnings showed continued recovery from the U.S. recession. The company reported operating profits increased 30 percent and net earnings were up 33 percent from a year ago.
Its third quarter ended Aug. 28. Net sales were just below $263 million for the period, up 14 percent from a year earlier. Norm Johnson, chairman and CEO, said the third-quarter sales increase of $32.5 million "demonstrates our continued sales recovery from the recession and the benefits of the various cost initiatives we put in place last year."

Sales of industrial filters increased across several segments, including products for heavy-duty commercial engines in such categories as trucking, aerospace and oil drilling.

Clarcor's stock rose 55 cents per share, or 1.5 percent, to close at $37.54 in New York Stock Exchange trading on Wednesday.

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Business Briefs: Vaco is among nation's fastest growing companies

Inc . magazine has ranked Vaco, a consulting and placement firm specializing in technology, accounting/finance and administration, as one of the fastest-growing private companies in the country for the fourth consecutive year.
— RANDY MCCLAIN

Comcast sets Xfinity branding party

Comcast, the cable and communications company, will hold what it dubs as "a launch party" from 3-5 p.m. at Bridgestone Arena on Sept. 20 to announce the debut of its Xfinity brand here, in effect giving all of the company's products and services a new name.

— RANDY MCCLAIN

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Home Warranty FAQBusiness briefs: LifePoint deal to go forward

Volkswagen names ex-GM executive Jonathan Browning as U.S. chief

On Monday, Volkswagen AG, Europe's largest carmaker, named Jonathan Browning to head its U.S. operations and oversee completion of the Chattanooga assembly plant.
The choice of Browning, a former General Motors executive who joined VW in June, ends a nearly three-month leadership vacuum for the company in America.

Browning will take over as president and CEO of Volkswagen Group of America starting Oct. 1. Predecessor Stefan Jacoby last month became CEO of Volvo Cars, the Swedish automaker that's now owned by China's Zhejiang Geely Holding Group Co.

VW hired Browning, 51, this year to improve coordination of the carmaker's international sales companies.

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He was previously vice president of global sales, service and marketing at GM. His appointment coincides with the final phase of the introduction of a new Jetta compact, VW's best-selling American model. VW also is preparing to open its new factory in Chattanooga and present its first car built exclusively for the U.S. market.

"The major part of his career was outside the U.S.," said analyst Christoph Stuermer, of IHS Automotive in Frankfurt, Germany. "Just because he worked for GM doesn't mean he understands the U.S. dealer mentality. I'm curious to see what he comes up with."

Browning worked for GM from 1981 to 1997 and returned there in 2001 after a stint at Ford Motor Co., where he left as managing director of the Jaguar brand.

High hopes for Chattanooga plant

Volkswagen is heading for an eighth annual loss in the U.S. Reviving revenue and profit here is essential to CEO Martin Winterkorn's goal of surpassing Toyota Motor Corp. in size and profitability by 2018.

He also wants to almost triple VW's share of the U.S. market to 6 percent by 2018 and boost deliveries to 1 million, including 200,000 cars at the Audi luxury unit.

The carmaker's $1 billion plant in Chattanooga is scheduled to start production in the third quarter of 2011, with a goal of lifting sales by designing more models for the U.S.

Next month, VW will start selling a new Jetta — VW's first model altered specifically for the U.S. market.

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Real Estate Outlook: After the CreditsVW chief: Chattanooga won’t get engine plant

Chattanooga utility offers Internet service that's among world's fastest

CHATTANOOGA — Chattanooga's city-owned electrical utility has started offering an Internet service that is among the fastest in the world, and it is hoping the move will attract businesses looking to relocate.
The Chattanooga Electric Power Board's new Fiber Optics network will provide a 1 gigabit-per-second Internet service. The utility said the service is more than 200 times faster than the average national download speed today.

At a cost of $350 a month, it's also much more expensive than the typical residential plan. Harold DePriest, the Chattanooga Electric Power Board's president and CEO, said residential customers don't really need that fast a service, but businesses might.

He said the high-speed service won't be costly for EPB to operate, yet it should put the Chattanooga community at the forefront of attracting businesses — possibly Internet providers — that can benefit from having it.

RelatedFCC plans to expand wireless capacity

"Chattanooga represents the next frontier in communications technology, with limitless potential for new applications for education, entertainment, health care, industrial development and more," DePriest said in a statement.

The Chattanooga utility is working with telecom equipment maker Alcatel-Lucent SA on the project.

DePriest said the fast Internet service is immediately available.

He said providing the high-speed Internet service is part of the utility's $37 million fiber-optic network venture.

EPB provides electricity, television, telephone and Internet service to more than 169,000 residents in a 600-square-mile area in southeastern Tennessee and northwest Georgia.

Tech firms welcome

In a community with a new Volkswagen assembly plant and the University of Tennessee at Chattanooga's SimCenter computational engineering lab, Mayor Ron Littlefield said, the Internet service announcement has helped put Chattanooga
"on the short list of progressive communities in the world."

"It's a great place to imagine the future," Littlefield said Monday.

He said Chattanooga would "welcome Google or any other technology company" that would be interested in using such a high-speed Internet system.

Google Inc. earlier announced plans to select one or more communities for a 1 gigabit network by the end of this year and spokesman Dan Martin said there have been about 1,100 responses. Martin declined to comment on the service by Chattanooga's EPB.

"We're excited to see enthusiasm for ultra high-speed broadband," Martin said by e-mail. "It's clear that people across the country are hungry for better and faster Internet access."

Verizon Communications Inc. in August said it had tested 1 gigabit service on its network, but it hasn't announced plans to sell it.

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Chattanooga Volkswagen plant offers training to potential workers

CHATTANOOGA — Volkswagen is grooming students for possible jobs at its new Chattanooga assembly plant, and the apprenticeship program, while not guaranteeing a job, pays them for some of the workplace training.
Travis Wallick is among the first students in VW's Automotive Mechatronic Program, a training partnership with the Tennessee Technology Center at Chattanooga State Community College.

Wallick told the Chattanooga Times Free Press during a break in a class that the three-year program is a "great opportunity to work on new technologies," even if there is no guarantee of a job.

The program includes instruction on robotics, electronics, programmable logic controllers, welding, metal working and other skill areas. Volkswagen plans to start production of a yet-to-be-seen midsize sedan early next year and has already filled about half of its 2,000 jobs at the $1 billion plant.

While graduates don't have a job guaranteed, the training gives them a competitive advantage toward getting hired. While training in the workplace, students receive pay that starts at $10 an hour.

Hans-Herbert Jagla, VW's executive vice president of human resources in Chattanooga, said the apprenticeship program is off to a solid start. He said it uses the best of German and American training initiatives and rotates class time with on-the-job training.

"We want to keep our people as long as possible — 10, 20, 30 years," he said.

The community college president, Jim Catanzaro, described the program as an "innovative relationship."

"This is another opportunity to prepare a pool of workers for a sophisticated industry," Catanzaro said.

Gary Booth, manager of training and development for Volkswagen in Chattanooga, said the students will be challenged.

Twenty students will be added to the program each year to maintain a group of 60. Grants cover the students' costs, a Volkswagen spokesman told the newspaper.

Jagla said building Volkswagens is more an art than a job.

"Our work force has to be precise and striving for perfection," he said.

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Central banks back increased capital reserves

BASEL, Switzerland — Banks will have to significantly increase their capital reserves under rules endorsed Sunday by the world's major central banks, which are trying to prevent another financial collapse without impeding the fragile economic recovery.
The new banking rules are designed to strengthen bank finances and rein in excessive risk-taking, but some banks have protested that they may dampen the recovery by forcing them to reduce the lending that fuels economic growth.

Forcing banks to keep more capital on hand will restrict the amount of loans they can make, but it will make them better able to withstand the blow if many of those loans go sour.

The rules also are intended to boost confidence that the banking system won't repeat past mistakes.

Under current rules, banks must hold back at least 4 percent of their balance sheets to cover their risks.

This mandatory reserve — known as tier 1 capital — would rise to 4.5 percent by 2013 under the new rules and reach 6 percent in 2019.

In addition, banks would be required to keep an emergency reserve known as a "conservation buffer" of 2.5 percent.

In total, the amount of rock-solid reserves each bank is expected to have by the end of the decade will be 8.5 percent of its balance sheet.

Representatives of the U.S. Federal Reserve, the European Central Bank and other major central banks agreed to the deal Sunday at a meeting in Basel, Switzerland.

It still has to be presented to leaders of the Group of 20 forum of rich and developing countries at a meeting in November and ratified by national governments before it comes into force.

Contributing: Associated Press writers Andrew Vanacore, Martin Crutsinger, Frank Jordans and Geir Moulson.

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FCC plans to expand wireless capacity

WASHINGTON — A new flavor of Wi-Fi, with longer range and wall-piercing power, could show up in wireless gadgets a year from now if the Federal Communications Commission works out the last details of new spectrum rules that have been long in the making.
Nearly two years ago, the FCC voted to open up the airwaves between broadcast TV channels — so-called "white spaces" — for wireless broadband connections that would work like Wi-Fi on steroids. But wrangling over key technical details, including concerns about interference with TV signals and wireless microphones, has prevented exploitation of these spaces.

On Sept. 23, the FCC plans to vote on rules meant to resolve those issues. FCC Chairman Julius Genachowski predicts that electronics makers will jump at this "super Wi-Fi" technology, as the agency calls it, and make it just as popular as conventional Wi-Fi.

"We're hoping history will repeat itself," Genachowski said. "White spaces are a big deal for consumers and for investment and innovation."

The commission's plan would make white spaces available free, without specific permission, just as it already does for Wi-Fi and Bluetooth.

Last year's transition from analog to digital television broadcasting freed up enough spectrum to make this possible, but the plan faced serious opposition from television broadcasters worried that their signals could be disrupted. Wireless microphone manufacturers and users — including churches, theaters, karaoke bars and all types of performers — also raised concerns about interference.

Vacant frequencies

To address these issues, the FCC has been working with broadcasters and white-spaces proponents to map TV channels across the country. The current FCC plan would require installers to configure white-spaces devices to use a frequency that's vacant in their area — a white space. Alternatively, the devices themselves could figure out their location using such technologies as GPS; a database would then help the devices figure out the right frequencies for their area.

In addition, the agency hopes to set aside at least two channels for minor users of wireless microphones. And it plans to put big wireless microphone users, such as Broadway theaters and sports leagues, in the database, so devices would know to avoid their airwaves.

The upcoming FCC vote is a welcome development for some of the country's biggest technology companies, including Google Inc., Microsoft Corp. and Dell Inc. The tech industry hopes that white-spaces networks will create a multibillion-dollar market for advanced wireless devices, including laptops, set-top boxes and smart phones.

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Home Warranty FAQ4G networks could be revolutionary

GM's OnStar could offer free services

General Motors Co.'s OnStar in-car communications unit may offer some free services next year to rival Ford Motor Co.'s Sync music and information system.
OnStar, a subscription service that provides accident alerts, directions and vehicle diagnostics, is scheduled to introduce an upgraded system this month that links vehicles to the social media site Facebook and translates voice messages to text.

GM, the largest U.S. automaker, is adding features to keep pace with systems including Ford's Sync.

"When Ford came out with Sync, they met OnStar's services and upped the ante," said Brandy Schaffels, an analyst at TrueCar.com.

"Technological features are where GM and Ford are going to build their reputation with the next generation."

OnStar may begin offering entertainment and information services that link to a user's smart phone without a subscription or fee, analysts say. OnStar is now offered free in many models for the first year and then for $199 to $299 a year, depending on the features.

The voice-to-text system will be studied with a test audience while the company decides whether to offer it to all customers. The new version of OnStar will have enhanced services for emergency response, which alerts an OnStar operator when there is a crash.

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Home Warranty FAQ4G networks could be revolutionary

Next up: Jermain Haltom

Company/title: Electronic banking supervisor at Tennessee Commerce Bank, Franklin
Age: 31

Background: Haltom, who prides himself on flexibility, set up the Tennessee Commerce e-banking department from scratch, working through difficult regulatory areas on emerging products such as remote check deposit. Before becoming a banker, he spent seven years in the U.S. Army as an information technology specialist. He saw duty in Afghanistan, Iraq and other hot spots in the Middle East, mostly behind the lines, although he did sometimes have to dodge mortar fire when hostilities were most intense.

How he got his job: After getting out of the service, "I earned a bachelor's of business administration degree in finance from Middle Tennessee State University in 2007. I'm a native of Michigan, but I was stationed during my military career at Fort Campbell, Ky., and I liked the area, so I stayed. Banking and technology seemed like a perfect fit for my training and interests."

What got him hooked on electronics? "I was a kid when I saw the movie War Games (in which a precocious computer whiz played by actor Matthew Broderick cracks the code for a Pentagon computer and almost sets off an accidental nuclear war). Ever since then I've been fascinated by computers and technology."

Computer watchwords: "I'm a stickler for computer security. In the military, we'd lock up our hard drives in a safe when we weren't on duty. I see a lot of opportunity in banking with mobile applications, remote deposit, and secure online banking."

Looking back: "I think the most important thing is to be flexible. You change as a person; I'm not the same person I was 10 years ago. So, the plans you make about the future may not pan out. But the right career found me. You have to be open to the possibilities."

— RANDY McCLAIN

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Real Estate Outlook: After the CreditsComdata adds 120 new jobs

New health law keeps TN insurance commissioner engaged

Leslie A. Newman can barely recall an idle moment during her days as the state's insurance commissioner — a tenure that will end when Gov. Phil Bredesen leaves office in January.
Lately, Newman has been working with commissioners from other states on guidelines for implementing provisions of the federal health-care overhaul signed into law this spring.

There also have been renewed questions about her department's oversight after a rash of scams involving sellers of bogus health insurance and pitches to businesses on plans with below-market health premiums that weren't enough to cover claims.

Newman, a lawyer by training, spoke with health-care business writer Getahn Ward about the role of states in implementing health-care reform and the recent crackdown on bogus health insurance.

What are the key responsibilities states have in health-care reform?

Insurance is still almost exclusively regulated at the state level, including health insurance, so the states will have a major responsibility as various reform requirements kick in between now and 2014.

The federal law recognizes the importance and the success of state-based insurance regulations by delegating to the NAIC (National Association of Insurance Commissioners) a major role in developing guidelines and definitions for what is called medical loss ratios. So we have been participating along with all the other states in that process. The carriers and consumer groups are very concerned about the medical loss ratio piece.

What emerged from discussions on medical loss ratios at last month's NAIC summer meetings in Seattle?

Medical loss ratio is pretty complex. What it essentially does is dictate how much of every premium dollar must go to pay for health-care costs versus administrative overhead.

We came up with a form that carriers will have to fill out that will provide information on how they spend those premium dollars — and then the instructions that go along with that form that provide definitions of some things like quality improvement.

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Nashville-area business bankruptcies

Estimated assets: $100,001 to $500,000; estimated liabilities: $500,001 to $1 million
Assets: $59,508; liabilities: $352,942

SOURCE: U.S. Bankruptcy Court

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Establishing a Lead TriadNashville-area business bankruptcies

Large companies plan to spend indirectly on politics

WASHINGTON — Some of the nation's largest publicly traded companies said they will not channel corporate funds directly into political advertising that targets candidates, even though it is legal for them to do so.
But most of the companies surveyed by the nonpartisan Center for Political Accountability said they have no plans to impose conditions on political spending by their trade associations, which are nonprofits that can collect and spend unlimited amounts on campaign ads without publicly revealing their donors. One of the biggest is the U.S. Chamber of Commerce, which has promised to spend a record $75 million in this year's elections.

"Companies might be pumping in many millions of dollars into elections that could be undisclosed," said Bruce Freed, president of the center, which encourages companies to disclose their political activity. "More and more trade associations are the vehicles for company political spending and activity."

Forty companies through Sept. 1 answered the survey, which went to 500 publicly traded companies.

None of the companies that responded said it would use corporate money to run independent ads that call for the election or defeat of candidates, a practice allowed after the Supreme Court in January struck down a decades-old ban on spending for those types of ads. Three — Coca-Cola, IBM and Hartford Financial Services Group — said they impose conditions on trade-group spending.

A fourth, Norfolk Southern, said it would raise concerns if a trade association engaged in political advertising with which it disagreed, but the corporation said it doesn't have procedures to track such spending.

James Hixon, executive vice president for law and corporate relations, said Norfolk Southern's political activity centers on contributions by its employee political action committee.

"We don't see the need to change the process we have had in place," he said. "We've supported our friends from both parties, and those who are not our friends, we just haven't supported."

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Business credit cards exempt from new consumer protection law

If you're joining the ranks of the self-employed, you'll need to take certain steps to show you're serious about your business. A designated home office is a good idea. So is a professional-looking website.
Many nascent entrepreneurs believe they also need a business credit card. But while a corporate credit card may impress the folks at the local office-supply store, it's important to understand the risks.

Business credit cards are exempt from the Credit Card Accountability, Responsibility and Disclosure (CARD) Act that was signed into law last year, says Bill Hardekopf, chief executive of LowCards.com.

That means business card issuers can increase the interest rate on your existing balance, jack up your rate after just one late payment and apply payments to the balance with the lowest rate first.

Last week, Sen. Charles Schumer, D-N.Y., charged credit card issuers with marketing business cards to consumers in an effort to evade the new consumer card restrictions.

"Credit card companies are purposely hawking corporate cards to consumers who don't own a business and may even be retired," Schumer said in a statement. "This is more than deceptive marketing. It is a dirty trick meant to get around the new credit card law."

Schumer called on the Federal Reserve Board to require issuers to make clear on business credit card applications that the cards are not intended for personal use.

Officials with the American Bankers Association say they have seen no evidence that credit card issuers are marketing business cards to consumers. It's clear, though, that issuers have ramped up solicitations for these cards. Card issuers mailed out 46 million business credit card offers in the first quarter, up 256 percent from the first quarter of 2009, according to Synovate Mail Monitor, which tracks such offers.

Weigh benefits, costs

Small-business experts strongly recommend using separate credit cards for business and personal use. That way, you have a clear record of tax-deductible business expenses when you file a tax return.

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Tennessee to offer $2,500 rebates on Nissan Leaf electric car

State officials hope to give a boost to electric car sales with a $2,500 incentive to early buyers of the Nissan Leaf in Tennessee via a program that could later be extended to buyers of other alternative fuel vehicles.
Gov. Phil Bredesen, speaking during a TVA conference on electric vehicles Wednesday, said the state plans to tap a petroleum escrow fund marked for energy projects to provide rebates of $2,500 to the first 1,000 buyers of the new Nissan Leaf electric car later this year.

"There's no reason Tennessee can't take the lead … in the development of electric vehicles," the governor said. "We want their components to be made here and sold worldwide with a 'Made in Tennessee' label."

The $2.5 million state program, which provides perks on purchases in addition to generous federal incentives to buyers of electric cars, makes Tennessee at least the second state with such extra benefits. California has a $5,000 incentive for buyers of all-electric, plug-in vehicles.

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Consumers will be able to apply for the Tennessee rebates at Nissan dealers where they buy their Leafs, the governor said. Cars will have to be registered and delivered within the state's borders to qualify.

And even though the program is limited to the first 1,000 applicants now, Bredesen said there'll be up to $8 million left in the petroleum account that could be used to extend the program, as well as to expand it to include vehicles such as the new Chevrolet Volt plug-in hybrid.

The Volt will go on sale in Tennessee sometime next year several months after the Leaf rolls out.

Buyers are already signing up to order the Leaf, which will be made at first in Japan, but they will be built in Smyrna by 2012.

Bredesen said the state's $2,500 rebate, coupled with an available $7,500 federal tax credit, would "about even out the premium (charged) for an electric car" versus a car with a traditional gasoline engine.

The Leaf, which goes on sale in Tennessee and five other states in December, has a base price of $32,780, which would be reduced to $22,780 with the federal and state incentives.

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Refunds in Smart Data, ATA fraud case may be months away

Review of claims and continued legal wrangling in the case of a pair of Springfield businesses shut down by the state for selling what authorities labeled as bogus health insurance may delay payment of the victims until at least February, the state Department of Commerce and Insurance says.
Although the more than 12,400 policyholders — from all 50 states — had an Aug. 31 deadline to file claims, it will take at least until the end of January for all the claims to be processed and a final liquidation plan to be submitted to the Davidson County Chancery Court, said Christopher Garrett, a spokesman for the state insurance department.

That timetable is based on a plan the state proposed in a motion with the Chancery Court last month, and which is scheduled for a hearing on Friday before Chancellor Ellen Hobbs Lyle. She authorized the state's seizure of the American Trade Association and Smart Data Solutions in March, and ordered the companies to be liquidated after a hearing in May.

More than 56,531 notices of the liquidation plan and cancellation of the policies was sent out to the policyholders after the court's May 20 liquidation order, giving them until Aug. 31 to file claims for payment of medical bills or reimbursement of premiums.

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Garrett said the state doesn't yet have a final tally of how many claims were filed by the deadline, or a total dollar amount of claims.

Earlier, the state estimated that the claims would be $7 million, and said only about $2 million remained in the companies' bank accounts.

Attorneys for the two companies and their owner, Springfield businessman Bart S. Posey, have filed an appeal of Lyle's liquidation order, and are attempting to keep the process on hold until the appeal is heard.

Lyle, however, has denied the motion to delay the liquidation.

Barring a stay, Posey wants the state to allow him to appoint a third-party administrator to take over processing of the claims.

Posey claims a share

Nashville attorney Nader Baydoun, representing Posey and the two companies, said it is their contention that at least half of the $2 million the state is holding from the bank accounts of the two companies actually belongs to Posey, and should not be given to the policyholders.

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HealthStream adds two directors including Deborah Tate

HealthStream Inc., a Nashville-based online health education provider, announced two additions to its board.
Deborah Taylor Tate is a former Federal Communications Commission Commissioner from 2006 to 2009.

Dr. C. Martin Harris is chief information officer at Cleveland Clinic Hospital in Ohio.

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New Maury County auto plant to create 385 jobs

A subsidiary of a Japanese-owned auto parts maker plans to open a plant in Maury County that will eventually create 385 jobs in a community that has taken a hit from partial closure of General Motors’ auto plant in Spring Hill.
The plant will be the second in the United States for IB-Tech, a unit of manufacturer Imasen Electric Industrial Co.

It plans to invest $50 million in the plant that will make seat adjusters from a location in Mt Pleasant, Tenn.

Production planning will begin next year with full production starting in 2012 at the former AvaTech Manufacturing building. That company that had made headliners for cars folded last year.

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Consumers shift with recession; can retailers shift with them?

To paraphrase James Carville, "It's the stupid economy." Today's economic news is all over the map, and it is not inspiring business or consumer confidence.
A survey from the Pew Research Center's Social and Demographic Trend Project focused on the past 30 months and reported that 55 percent of all working adults have suffered a spell of unemployment, a pay cut or a reduction in hours, or have become involuntary part-time workers.

As a reaction to all that, more than 60 percent have reduced personal spending since December 2007.

Other surveys reinforce the concept of a new normal in consumer behavior.

BIGresearch in Worthington, Ohio, reported that two-thirds of Americans have reduced credit card spending and that almost 73 percent won't return to previous levels of credit card use.

Research by Alix Partners, a consulting firm in Southfield, Mich., showed weak consumer confidence.

Seventy percent believe that their economic situation is worse than 12 months ago, and 83 percent expect to spend the same or less on nonessential purchases in the next 12 months.

PriceGrabber.com, an online comparison-shopping site, reported that almost six in 10 American Internet users go online to compare prices, up by 19 percentage points from 2009.

And the 2010 American Pantry Survey from Deloitte and the Harrison Group reports that:

• 92 percent changed their grocery shopping behavior in the past two years.

• 93 percent expect to continue cautious shopping even when the economy grows again.

• 89 percent feel they have become more resourceful because of the economy.

• 84 percent see themselves as more precise in what they buy.

• 81 percent enjoy saving with coupons and loyalty cards.

• 79 percent believe they shop smarter than two years ago.

• 65 percent don't see their new shopping behavior as "sacrificing."

"Personal gratification and a desire to feel smart about what consumers are putting into their shopping carts are trumping brand satisfaction … price-consciousness. Value orientation and bargain hunting will remain prevalent for years," said Pat Conroy, vice chairman of Deloitte.

4 distinct strategies

Deloitte found that shoppers expressed four distinct strategies to deal with the economy.

They have become Super Savers, who are diligent coupon users; they are attuned to sacrifice — comparing unit prices and trying store brands; they are planners, who set budgets, plan meals and buy in bulk; and they have become spectators, who are loyal to national brands to a degree but focus on in-store discounts.

"The extent and duration of the recession has given people the motivation to learn and adapt new strategies — and family gratification has replaced product satisfaction as the go-to goal for American shoppers," said Dr. Jim Taylor, the Harrison Group's vice chairman and director of syndicated research.

Here's what marketers need to learn from all of this: Adjust your product offerings and pricing strategy to reflect value; reward customer loyalty; and provide discounts through multiple channels, including print, direct mail and online.

David Bohan founded BOHAN Advertising|Marketing, a Nashville agency with clients in travel, hospitality, health care and consumer products, in 1990. He has worked in marketing and advertising since earning a degree at the University of Tennessee-Knoxville in 1970.

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Cheapskates shell out for gadgets that claim savings

NEW YORK — How do you get penny pinchers to spend these days? Pitch products that promise to save them money.
Demand is rising for kitchen and bath gadgets that squeeze out that last blob of toothpaste and help get the suds out of tiny slivers of soap.

Marketers of these gizmos tout how the pennies they save by reducing waste can add up. Retailers are stocking up.

During the Great Recession, penny pinchers got even cheaper, while showing the newly frugal how it's done. Cheapskate gadgets may be a sign of the times, but they're also a sign of how product makers and retailers are trying to get people back in the spending habit.

Big companies like Wal-Mart Stores Inc. and The Container Store and a longtime "As Seen on TV" pitchman are stocking up on items claiming to help people save a buck, such as:

• Caps that keep the fizz in opened soda cans.

• Digital day counters: gizmos that count the days and hours food has been in the refrigerator, to help keep track of when that milk might be in danger of going bad.

• New, stylish versions of pants extenders that let people wear their clothes even when they gain or lose weight.

A.J. Khubani, the man behind many "As Seen on TV" gadgets such as the PedEgg foot scraper, is making cheapskate gimmicks a priority at his company Telebrands, one of the nation's top direct-response TV marketing companies.

More than half of Telebrands' gadgets, sold online and at 90,000 stores, are now focused on helping shoppers be cheap. Khubani, who has been traveling around the country to meet inventors, is speeding up his launches of new products to every 30 days from every 60 days.

"The mood of the country has changed," Khubani said. "We've had tremendous opportunity with this recession."

Since 2007, Telebrands' revenue has doubled to several hundred million dollars, he said.

Retailers, scrambling to find new ways to pump up anemic sales, expect these products will have staying power as Americans try to save more and waste less.

Are gadgets worth it?

An open question is whether the truly frugal are too cheap to buy gadgets that can cost up to $20. Who needs a soap saver when an old washcloth or a pair of pantyhose will do?

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Meet Taiwan's HTC: iPhone's 'quiet' challenger

BEIJING — East Asia is the world's electronics factory, yet unless they are Japanese, producers are largely anonymous. Now HTC Corp., a Taiwanese maker of smart phones, is moving out of the shadows and trying to establish its own brand name as it competes with Apple's iPhone.
HTC supplies U.S. carriers Verizon, Sprint and T-Mobile but says a year ago only one in 10 Americans knew its name. With the help of marketing by cellular carriers and HTC's own television ads during the World Series, HTC says that number is up to 40 percent.

"We want to be one of the leaders," said John Wang, the 13-year-old company's chief marketing officer.

HTC's path to its own brand has been complicated by U.S. carriers' preference for many years to market its phones under their own brands.

That started to change in 2007, and the "HTC" brand started showing up on phones, as carriers figured that the company had some cachet among early adopters that they could capitalize on. HTC phones on the U.S. market include the Droid Incredible, sold by Verizon Wireless; the HD2, sold by T-Mobile USA; and the Hero, sold by Sprint Nextel Corp.

Even now, HTC is careful to avoid straining ties with carriers by promoting its own identity too aggressively. Such ties are crucial in the United States, Japan and other markets where carriers usually pick which phones to offer. In Europe and elsewhere, customers pick their own phones and buy service separately.

"I don't think it should ever become a 'destination phone,' because that is very arrogant," Wang said.

The company's slogan, "Quietly Brilliant," expresses both modesty and pride.

Apple, of course, is anything but quiet, and HTC sets itself apart from the U.S.-based giant in other ways, too.

A study in contrasts

In contrast to look-alike iPhones, HTC tries to make handsets for every taste, some with slide-out keyboards, others with touch screens. While Apple has its own online store, HTC focuses on phones while carriers pick which music and applications to offer.

"This is positioning the vendor almost diametrically against the increasing perception of Apple as an egotistical and domineering company," Seth Wallis-Jones, an analyst for IHS Global Insight, said in an e-mail.

In the U.S., HTC made a splash this summer by producing the first phone, the EVO 4G, that's able to use a fourth-generation wireless data network. It's sold by Sprint. HTC also manufactured Google Inc.'s first phone, the Nexus One.

"These really put the brand into the spotlight in the United States," Wallis-Jones said.

Still, Apple has a daunting sales lead and HTC also faces competition from South Korea's Samsung Electronics Co., Nokia Corp. and other rivals.

HTC was just behind Apple in the final quarter of 2008, selling 3.7 million phones to its rival's 4.4 million, according to Wallis-Jones. Apple has since pulled ahead, selling 8.4 million in the second quarter of this year, while HTC sold 5.4 million.

But HTC is seeing its sales jump. It expects to ship 6.5 million phones in the current quarter, more than twice the number it shipped in the same period last year.

HTC promotes itself as a cross-border brand, with no mention of its Taiwanese roots.

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Nashville awarded 3 more SEC men's basketball tournaments

Music City? Make that Roundball City.
Nashville will host eight postseason men's and women's basketball tournaments between now and 2019, including three Southeastern Conference men's tournaments awarded to the city starting in 2015, officials said Friday.

Other newly announced men's tournaments headed this way will be in 2016 and 2019, the Nashville Sports Council said. The city just finished hosting the conference's most recent men's tournament last March.

"Everyone knows we love our music, but we also love our sports," said Brenda Sanderson, owner of four Lower Broadway honky-tonks, which saw sales double and even triple during the most recent SEC Tournament held in the spring at Bridgestone Arena.

Atlanta gets the 2011 and 2014 SEC men's tournaments. New Orleans will host the conference's 2012 men's event. The SEC had previously named Nashville as host of its 2013 men's tournament.

The Bridgestone Arena tournaments are expected to provide an economic boost to hotels and restaurants along West End, near the airport and even as far away as Cool Springs and the southern edge of Sumner County, said Butch Spyridon, president and CEO of the Nashville Convention & Visitors Bureau.

Depending on which teams make the finals — and the size of their fan bases — the four-day tournaments are expected to deliver an economic impact up to $25 million to the city, Spyridon said. The economic impact of the 2010 tournament was an estimated $18.4 million, with overall tournament attendance approaching 192,000 people.

That kind of impact is about on par with the annual CMA Music Festival, which this June provided a $22 million boost to the city. CMA fans stay
5½ days on average, while basketball fans are in town for four days — but they spend more each of those days, Spyridon said.

"The SEC tournament is always huge, especially when teams like Kentucky and Florida come up here," said Ray Waters, general manager of the Hilton Nashville Downtown. During this year's SEC tournament, the hotel broke its own records in room revenue, as well as food and beverage sales, Waters said.

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U.S. jobless rate climbs slightly in August

WASHINGTON — The nation's jobless rate worsened slightly last month, edging up to 9.6 percent from 9.5 percent in July, the government said Friday in a report that had little for workers to cheer about this Labor Day weekend.
Overall, the American economy lost 54,000 net jobs in August as an additional 114,000 temporary census workers were dismissed from the federal government's payrolls. Aside from the staffing changes at the Census Bureau, which has been trimming jobs that were added earlier in the year for the census count, private-sector employers added a modest 67,000 jobs over the month.

Manufacturers, which had been growing all year and leading the weak jobs recovery, fell in August, cutting 27,000 jobs. Budget-strapped state governments shed 14,000 jobs.

The health-care sector added 28,000 jobs in August, and construction employment was up 19,000, although about half of that was because of the return of workers on strike in July. The temporary-help industry, considered a precursor to broader hiring, increased staffing by 17,000 last month.

The Labor Department revised up the private-sector hiring in June and July, saying businesses added 168,000 in those two months instead of 102,000 estimated earlier. Even so, by any measure, those numbers are small and not enough to begin to bring down the unemployment rate, which is expected to climb in the coming months.

Nearly 15 million workers were counted as jobless last month. Including people too discouraged to look for work and the nearly 9 million workers who have little choice but to work part time, the rate of the nation's unemployed and underemployed stood at 16.7 percent last month, up from 16.5 percent in July.

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Eminem award of digital royalties could set precedent

A federal appeals court has sided with rap artist Eminem and his producers in a dispute with Universal Music Group over digital music royalties, a decision that legal experts say could shake up the entire music industry with potentially tens of millions of dollars at stake.
The U.S. 9th Circuit Court of Appeals in San Francisco ruled Friday that the record label had to pay the producers who helped launch Eminem's career, F.B.T. Productions, a bigger cut for music sold online through downloads and mobile-phone ring tones than for the same music sold in stores.

"As a practical matter, this case means every single music lawyer is going to be taking a close look at their clients' contracts to see if there's comparable language as a basis for a similar type of lawsuit," said Kelly Frey, a partner with Baker Donelson, who practices entertainment law in Nashville.

Entertainment lawyers say the ruling has the potential to set a far-reaching precedent that could lead to a recalculation of online royalty payments for untold numbers of artists, not just for the millions of dollars in retroactive royalties that Eminem and F.B.T. could gain from Universal.

For its part, Universal Music Group said in a brief statement that it plans to fight the appeals court ruling, and it dismisses the notion that the case will have any precedent-setting impact.

"We will be filing a petition for a rehearing," the company's statement said. "In the meantime, it should be noted that this ruling sets no legal precedent as it only concerns the language of one specific recording agreement. Any assertion to the contrary is simply not true."

'License' versus 'sale'

Four years ago, Eminem music producers F.B.T. filed a lawsuit against Universal Music Group, claiming they had a right to a 50/50 split of profits with Universal on sales of digital music and ring tones through online retailers such as iTunes and Sprint.

The case involves a dispute about contract language that predates the rise of digital music sales — but now may govern
how revenue is shared between artist and label as downloads become the arena with the most money.

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Oil platform owner opposed safety rule

WASHINGTON — The company whose Gulf of Mexico oil platform erupted in flames this week cited the industry's "excellent safety record" when it opposed a proposed federal rule last year that would require offshore oil and gas operators to have safety systems aimed at reducing workers' mistakes.
The government still hasn't put the safety rule in place despite Interior Secretary Ken Salazar's recommendation months ago that it be adopted. Mariner Energy Inc. and others in the industry, including BP, opposed it when it was proposed last year.

The rule would require operators to develop safety and environmental management systems that federal regulators said could have prevented at least some of the 33 major accidents they studied. A former senior U.S. regulator — Elizabeth Birnbaum, who lost her job after the BP oil spill — previously told Congress that the safety rule would eliminate two-thirds of all offshore accidents.

It was not immediately clear whether these safety systems could have prevented the fire in the Gulf, which is still under investigation.

In a Sept. 10, 2009, letter to government regulators, Mariner said the proposal was a "major, paperwork-intensive, rulemaking that will significantly impact our business, both operationally and financially," with little or no safety benefit.

The company's environmental and safety director, Blaine E. Dinger, cited the offshore industry's "excellent safety record" and said the rule was not justified. The National Ocean Industries Association, an industry trade group, used nearly identical language in its own letter Sept. 23 of last year.

Dinger said Friday that the fire hasn't changed his mind.

"What went on with Mariner or what went on with BP, even with a robust (safety) program, possibly could have still happened," he said in a brief telephone interview.

Mariner cited before

Federal authorities have cited Mariner Energy and related entities for 10 accidents in the Gulf over four years, including platform fires, pollution spills and a blowout, according to federal records.

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Sommet Group execs must turn over assets

A Nashville bankruptcy judge has ordered principals of Sommet Group LLC to turn over any assets or records of the financial services company in their possession to a trustee appointed by the court in the wake of an FBI raid earlier this year.
The assets in question include several vehicles, computer hard drives and $250,000 that Sommet's co-managing partner, Brian Whitfield, may have taken out of Sommet's bank account as FBI agents raided the firm's Franklin offices two months ago.

Whitfield's possible withdrawal is among allegations included in a lawsuit filed as part of bankruptcy proceedings by a trustee whose duty is to recover funds on behalf of creditors.

Federal investigators are looking into whether Sommet executives misappropriated clients' funds while handling medical claims, 401(k) retirement accounts and payroll taxes on their behalf.

U.S. Bankruptcy Judge Keith Lundin ordered Whitfield and his wife, Marsha, Sommet's vice president of payroll, to testify before the trustee on Thursday.

Friday's court order also blocks them from using assets or destroying records of four other Sommet-related companies that have come under the scrutiny of trustee Samuel Crocker.

Crocker has sued the Whitfields; Edward Todd, Sommet's other co-managing partner; and the four related companies as he tries to recover money.

Earlier this summer, after the FBI raided Sommet's headquarters, three clients pushed Sommet into bankruptcy, saying they wanted to collect debts via a fair and equitable process.

Sommet, which has folded as a company, once had its brand name attached to the downtown Nashville sports arena under a past licensing agreement that gave the low-key management company a citywide profile that has now been tarnished by the federal inquiry.

Other Sommet-related companies listed as co-defendants are IT Xpress Solutions LLC, EMG Communications LLC, BrandCentrik Inc., and Sommet Insurance and Risk Management LLC.

No one has been charged with a crime.

The total of Sommet's assets remains unclear although the trustee asked for no less than $10 million plus interest, attorney's fees and other amounts based on a breach of fiduciary duties by the Whitfields and other defendants named in the lawsuit.

Getahn Ward can be reached at 615-726-5968 or at gward@tennessean.com.

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