Who’s paying $17k to OSHA after a worker accident? What household name is accelerating store closings across the state? How much do inmates cost the state? All of this and more in today’s Alabama Business Roundup:
A Decatur plant has agreed to pay $17,290 after it was cited for four serious safety violations months after one of its workers was killed on the job.
The Occupational Safety and Health Administration issued citations with a proposed penalty of $24,200 to Independence Tube, which employed 49-year-old Gary “Tim” Timothy Cooper. Cooper was killed at work Oct. 28 when a 6,000-pound steel coil fell on and crushed him.
OSHA spokesman Michael D’Aquino said the agreement reached Tuesday with Independence Tube will not change the classification of the violations.
“The hazards cited have all been abated, such as revising the procedure for banding coils, providing fall protection, developing procedures to de-energize machinery (for changing the overarm), and installing guards on all horizontal shafts as well as sprocket wheels and chains,” he said.
D’Aquino said a serious violation exists when the workplace hazard could cause an accident or illness that would most likely result in death or serious physical harm.
Independence Tube President Rick Werner did not immediately respond to a request for comment. At the time of Cooper’s death, the Morgan County Coroner’s Office categorized the incident as an “industrial accident” with no foul play suspected.
Birmingham Business Journal: Alabama AG announces home mortgage abuse settlement with HSBC
Alabama Attorney General Luther Strange announced Friday a $470 million joint state-federal settlement with mortgage lender and servicer HSBC to address mortgage origination, servicing, and foreclosure abuses.
The settlement provides direct payments to Alabama borrowers for past foreclosure abuses, loan modifications and other relief for borrowers in need of assistance, rigorous mortgage servicing standards, and grants oversight authority to an independent monitor.
The settlement includes Alabama and 49 other states, the District of Columbia, t he U.S. Department of Justice, the U.S. Department of Housing and Urban Development and the Consumer Financial Protection Bureau.
HSBC to substantially change how it services mortgage loans, handles foreclosures, and ensures the accuracy of information provided in federal bankruptcy court. The terms will prevent past foreclosure abuses, such as robo-signing, improper documentation and lost paperwork.
“This agreement provides much-needed relief to eligible Alabama borrowers, and puts a stop to many of the bad practices that have harmed consumers,” Strange said. “Through tough servicing standards, this agreement compels HSBC to abide by more fair procedures.”
The agreement’s mortgage servicing terms largely mirrors the 2012 National Mortgage Settlement (NMS) reached in February of 2012 between the federal government, 49 state attorneys general, including Alabama, and the five largest national mortgage servicers. That agreement provided consumers nationwide with more than $50 billion in direct relief, created new servicing standards, and implemented independent oversight.
Approximately 1,094 eligible Alabama borrowers whose loans were serviced by HSBC and who lost their home to foreclosure from January 1, 2008, through December 31, 2012, and encountered servicing abuse will be eligible for a payment from the national $59.3 million fund for payments to borrowers. The borrower payment amount will depend on how many borrowers file claims.
Eligible borrowers will be contacted by a settlement administrator about how to qualify for payments.
The settlement’s consumer protections and standards include
- Making foreclosure a last resort by first requiring HSBC to evaluate homeowners for other loss mitigation option
- Restricting foreclosure while the homeowner is being considered for a loan modification
- Procedures and timelines for reviewing loan modification application
- Giving homeowners the right to appeal denial
- Requiring a single point of contact for borrowers seeking information about their loans and maintaining adequate staff to handle calls.
Sears Holdings Corp. announced today it will accelerate the closing of unprofitable stores this year after fourth-quarter sales were down 7.1 percent.
The company, which also owns Kmart, said the holiday season was challenging as a result of “historically warm weather and intense competition pressuring margins and driving comparable store sales declines, particularly in our apparel and related softlines businesses.”
Sears expects total revenues of $7.3 billion and $25.1 billion for the fourth quarter and full-year of 2015, respectively.
“Based on this performance, we are taking further actions to accelerate our transformation, which is focused on our Shop Your Way membership program and our Integrated Retail offerings,” Sears Holdings said in an earnings release.
Fifty stores, including Kmarts in Florence, Prattville and Dothan, will close as the company looks to reduce ongoing expenses, adjust its asset base and transform its business model.
Sears Holdings spokesman Howard Riefs said the Dothan and Florence stores will shut down in mid-March, followed by the Prattville site in mid-April. Liquidation sales are underway now as nearly 200 workers look for jobs within the company or elsewhere.
As stores close, Sears will evaluate its cost structure, including optimizing store-level marketing expenditures and overall staffing levels.
“We will be taking action to reduce our fixed costs, and to improve our inventory management and gross margin realization,” Sears said.
The company, which has reduced its net debt by about $1 billion, will target at least $300 million of other asset sales during the first half of fiscal 2016.
Click here for the full earnings report.
Kmart closed its only Huntsville store last year on 1401 Memorial Parkway, less than a year after the Sears in Decatur shut down. The company also shuttered the Sears and its auto store at Bel Air Mall in Mobile in 2015.
When the stores in Florence, Prattville and Dothan close this spring, there will be 14 Kmarts left in Alabama.
Birmingham Business Journal: Inmate Inc.: The costs of corrections in Alabama
During Tuesday’s State of the State Address, Gov. Robert Bentley said Alabama would implement a complete transformation of the state’s prison system.
This will be accomplished by permanently closing the doors to outdated facilities where maintenance costs have skyrocketed and increased staff are needed.
Bentley said the aged prisons will be consolidated and replaced by four, newly constructed state-of-the-art facilities.
However, in a state hampered by budget issues – and with a less than agreeable legislature – the challenge to overhaul the state’s costly corrections system could come with a hefty price tag when coupled with the already staggering per day costs.
By the numbers
Alabama taxpayers spend nearly $15,000 every year for each of the 24,000 people incarcerated in the state’s prison system.
Corrections is a sizable portion of the state’s lean General Fund budget – second only to the Alabama Medicaid Agency – and trends show that costs will continue to rise.
Bob Horton, public information manager for the Alabama Department of Corrections (ADOC), told the BBJ that costs will rise due primarily to fixed costs, rising employee insurance costs and medical insurance. Along with money doled out to ADOC staffers, more inmates and older facilities will ultimately mean more money spent to keep the system up to snuff.
“One reason costs go up is also the result of aging facilities,” Horton said. With Bentley discussing the closure of outdated facilities like Tutwiler, Horton said maintenance costs make up the brunt of the financial strain on the system.
Horton said ADOC currently has $90 million in deferred maintenance outstanding.
In fiscal 2015, Alabama budgeted roughly $356 million for corrections, with the bulk of the financing coming from the Alabama General Fund budget.
In fiscal 2016, state lawmakers recommended budgeting roughly $394 million for corrections. Bentley then pushed for more corrections funding, suggesting $400 million be budgeted for corrections.