House of Blues Studio D heads to Nashville

A slow-moving convoy making its way across rural U.S. Highway 64 will deliver a big piece of Memphis music history to Nashville today.
The House of Blues Studio D, a fully outfitted recording studio built inside a century old wooden house, is making a permanent move to Nashville's Berry Hill district, where the entire 200,000-pound structure will be offloaded and reopened next to existing studio spaces in the House of Blues Nashville complex.

Artists as famous and diverse as Al Green, Stevie Ray Vaughan, Justin Timberlake and Isaac Hayes have recorded albums inside the funky, red clapboard studio, but demand for the space slowed in recent years.

"We just don't have enough work for those rooms," said studio manager Mike Paragone. "Back in the '90s, sure. But Memphis isn't really a fruitful town right now. The economy is bad, and the recording industry is even worse."

In Nashville, the facility will provide an alternative and less expensive recording space that Paragone hopes will interest independent artists who cannot afford the company's existing, swank Nashville studios.

"The clients we used to work with here were the labels," Paragone said. "More often than not, now, my business comes from independents. I need to build rooms that cater to those types of clients. My A studio is the epitome of luxury. It was built around big budgets. But independent artists can't afford that lavishness now."

Studio D has 250-square-foot control rooms instead of 400-square-foot control rooms and a one-story lounge (instead of the two-story lounge in Studio A), but the quality of the sound recording remains the same, he said.

In Memphis, the move was greeted with some hurt feelings expressed in dozens of online posts under the Memphis Commercial Appeal's "Farewell Studio D" headline as well as responses on TV news web sites lamenting the loss of both the studio and the state of Memphis' once-thriving music industry.

Paragone said he felt stung by some of the coverage. He wants to get the message out that the House of Blues Studios isn't leaving Memphis. The company, once affiliated with the House of Blues restaurant and club chain, is now independently owned by Memphis native Gary Belz. He maintains three other studios at the same site.

"Please emphasize that we are not leaving Memphis. Please. We're not getting out of the music industry," Paragone said. Still, on a sunny Wednesday afternoon, as Paragone and an assistant drove behind the slow-moving studio, it appeared that Paragone's mood had lightened.

"We're just cruising at 32 miles an hour down these beautiful country roads. The sky is nice and blue with these big fluffy clouds and we've got the windows rolled down."

The studio should arrive here in the early hours this morning. Some 3,000 pounds of interior gear were transported separately, as was the roof, which will be reinstalled. The studio should be up and running by the end of the year, Paragone said.

Reach Anita Wadhwani at 615-259-8092 or awadhwani@tennessean.com.

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Whirlpool expansion keeps 1,500 jobs in TN

Whirlpool Corp. bypassed Mexico and other U.S. locations to build a new cooking appliance plant and distribution center in East Tennessee, keeping 1,500 advanced manufacturing jobs there and creating 130 new ones.
The $120 million investment in Cleveland is the company's largest for a single new project, Whirlpool Chairman and CEO Jeff M. Fettig said.

Construction is expected to begin the last three months of this year, and the company will close an existing 100-year-old plant and distribution center there. The expansion signals the Benton Harbor, Mich.-based company's commitment to domestic manufacturing, company and state officials said.

"Whirlpool is proud to employ more U.S. manufacturing workers than any appliance maker selling products in the U.S.," said Al Holaday, vice president of manufacturing, operations and quality for Whirlpool North America.

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The trend of onshoring or reshoring is a growing movement among manufacturers, including General Electric and Caterpillar Inc., which are bringing more operations back home.

"With a work force that is extremely productive and a business climate that is extremely attractive, we can compete with anyone anywhere in the world," said Matt Kisber, Tennessee's commissioner of economic and community development. Kisber was in Cleveland for the Whirlpool announcement on Wednesday morning.

Company officials made it clear they wanted to keep the jobs in the United States, said Kisber, whose staff had been in talks with Whirlpool since the first of the year.

"Had they chosen another location, I think we would have faced an uphill battle to retain those 1,500 jobs here," Kisber said. And that would have hurt other firms that are part of the manufacturer's supply chain near the Whirlpool campus in Cleveland.

Whirlpool plans a 1 million-square-foot manufacturing plant to make built-in cooking ranges and ovens, and a 400,000-square-foot distribution center. Phased-in production is expected to begin in the second half of 2011.

The company also operates a call center in Cleveland with 500 employees. No changes are expected there.

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Worker productivity drops

WASHINGTON -- Productivity in the spring fell by the largest amount in nearly four years while labor costs rose, signals that companies may have reached the limits of squeezing more work out of fewer workers.
The Commerce Department says productivity dropped at an annual rate of 1.8 percent in the April-to-June quarter, double the 0.9 percent decline originally reported a month ago. Unit labor costs rose 1.1 percent, the biggest rise in labor costs since late 2008.
While lower productivity and higher labor costs could spell trouble for corporate profits, it could translate into more hiring and larger incomes for U.S. workers.

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Big banks prosper as small banks fail

WASHINGTON — U.S. banks are making money again, although a split picture of the industry has emerged since the financial crisis.
The largest banks are thriving, mostly because they can borrow on the cheap and have rid themselves of bad debt. Yet smaller banks lack those advantages and are failing at the fastest pace in years.

Overall, banks made $21.6 billion in net income in the April-to-June quarter, the Federal Deposit Insurance Corp. said. It was the highest quarterly level since 2007.

Banks with more than $10 billion in assets — only 1.3 percent of the industry — accounted for $19.9 billion of the total earnings.

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At the same time, the number of banks on the FDIC's confidential "problem" list increased by 54 in the quarter — growing to 829 from 775 in the first quarter. That's a little more than 10 percent of the 7,830 federally insured U.S. banks.

Most of the biggest banks have recovered with help from federal bailout money, record-low borrowing rates from the Federal Reserve and the ability to earn big profits from fees on banking services and investment fees. They also have been able to cut back on lending in troubled parts of the country, such as Florida and Nevada.

Smaller and regional banks, however, have less flexibility. They depend heavily on making loans for commercial property and development. Those sectors have suffered huge losses. Companies have shut down in the recession, vacating shopping malls and office buildings financed by the loans.

Bright signs emerge

All of the 118 banks that have failed this year have been smaller or regional banks. Last year 140 banks shuttered, most of them small institutions.

The decline in bank lending stemming from the financial crisis showed signs of leveling off, the data show.

Total lending declined by $107.5 billion, or 1.4 percent from the first quarter. It posted the steepest drop since World War II — 7.5 percent — in 2009 from the year before.

FDIC Chairman Sheila Bair said banks' lending standards are beginning to ease for some types of credit.

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Car buyers to see fewer discounts

DETROIT — For years, Americans shopping for cars were treated to all sorts of deals and incentives, especially at the end of summer. Think Cash for Clunkers, which paid up to $4,500, or promotions that offered employee discounts to everyone.
Those days are over.

Deals are getting scarcer because automakers, newly lean and profitable, are holding the line on those profit-eating promotions. In July they offered $1,000 less in incentives per car than a year earlier, according to Edmunds.com.

And with no one expecting the government to offer a repeat of the Clunkers program, get ready for fewer discounts on your next car.

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"This may be as good as it gets, and get used to it," said Jeff Schuster, the executive director of forecasting for J.D. Power and Associates.

As a result, U.S. auto sales are at a standstill, with potential buyers waiting for more deals but automakers resisting. The industry expects this to be the worst August in 18 years, with sales barely over 1 million cars and trucks. Sales are expected to fall 3 percent from July, according to car-pricing website Truecar.com.

August usually sees strong sales as automakers offer deals to clear out the lots for new models. In August 2007, before the recession, automakers sold nearly 1.5 million new cars and trucks. In August 2009, when sales were at a 30-year low, the government came to the rescue. Cash for Clunkers, which paid buyers up to $4,500 per vehicle, boosted sales by about a third to 1.2 million.

But this year, the government is on the sidelines, and so are many buyers.

Fewer vehicles produced

The standoff between buyers and carmakers could continue through the rest of the year unless companies sweeten deals or there's some sort of government intervention, says Jesse Toprak, TrueCar's vice president of industry trends and analysis.

"We really need some sort of catalyst to take us up to a higher level," Toprak said. Car sales are still far below normal levels because, with unemployment still high and home values sharply lower, consumers just don't feel confident enough to buy.

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Whirlpool spends $120 M to expand plant in Cleveland, not Mexico

Whirlpool Corp. plans a $120 million project in Cleveland, Tenn., to build a 1 million square-foot manufacturing plant to make built-in cooking ranges and ovens, the company announced today.
A 400,000 square-foot distribution center is also planned. Construction is expected to begin later this year.

The company will add about 130 news jobs, mostly at the distribution center, to an existing work force of 1,500. Phased-in production is expected in the second half of 2011.

The new plant is the centerpiece of some $440 million in upgrades of domestic manufacturing facilities as the company shifts away from low-cost overseas locales in favor of domestic operations.

Whirlpool had considered sites in Mexico and elsewhere in the United States before deciding to replace an existing 100-year-old factory in Cleveland, according to the Wall Street Journal. The new plant will be located less than seven miles from the existing plant and warehouse.

“We appreciate their recognition that the business climate we’ve created in Tennessee and our skilled workforce have a role to play in the company’s future,” said Matt Kisber, Tennessee’s commissioner of Economic and Community Development.

Whirlpool employs more manufacturing workers than any appliance maker selling products in the United States, the company said.

The company had annual sales of $17 billion last year. The company markets Whirlpool, Maytag, KitchenAid, Jenn-Air, Amana, Brastemp, Consul, Bauknecht and other major brand names.

Contact Bonna Johnson at 615-726-5990 or bjohnson@tennessean.com.

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BP's life on the frontiers at risk

LONDON — At a celebration of BP's centennial last October, CEO Tony Hayward boasted to guests that the oil company "lives on the frontiers of the energy industry."
But last week, in the first major sign that the Gulf oil spill may have caused lasting damage to the company's long-term strategy of embracing projects with high risks, BP decided not to bid on potentially lucrative license to drill for oil off the coast of Greenland.

The Arctic setback comes as BP's plans to begin deep-water drilling in Libya and the North Sea have been delayed, and its vast offshore U.S. operations remain under a cloud.

BP may face less difficulty in carrying out risky projects in parts of the world where regulation is less restrictive, such as in Angola, Russia and Iraq. But it can ill afford another major accident as years of investigations and costly lawsuits linked to the Gulf spill loom.

To help cover the costs of the spill, BP has begun shedding assets around the world, with a goal of raising $30 billion. Analysts say that cleanup, fines and lawsuits could cost BP more than that, although the company appears to have avoided some worst-case environmental scenarios, like oil washing up the East Coast.

Safety may now come first

By selling mostly land-based assets, BP is signaling that it intends to remain a deep-water driller.

Still, with Hayward gone soon, incoming CEO Bob Dudley is expected to mimic the safety-first strategy pursued by ExxonMobil Corp. after its historic 1989 spill in Alaska's Prince William Sound.

For example, Exxon quickly appointed an executive to develop a new inspection system that would examine every major piece of equipment within the company's global operation.

"I don't see (BP) marching off into new frontiers anytime soon," said Dougie Youngson, an analyst with Arbuthnot Securities in London.

The company's aggressive growth, including its acquisition of Amoco in 1998, made it the largest producer of oil and gas in the Gulf of Mexico. And, until the deadly explosion of the Deepwater Horizon rig on April 20, it would have been expected to be at the center of the new oil rush in the Arctic.

Contributing: Associated Press reporters Chris Kahn, David Koenig, Robert Barr and Jan Olsen.

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