New Hampshire Interferes with Business Takeovers
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New Hampshire officials have invented a brand new corporate subsidy and
a way further to enmesh the state in private business dealings: they are
granting a private company there a multi-million dollar loan guarantee to
enable it to fend off a merger offer from out-of-state investors.
- The state agreed to the guarantee when the owner of a 93-year-old machinery
company -- the employer of 150 New Hampshire workers -- solicited the state's
help to defeat what he described as a hostile offer.
- Shareholders in the closely-held company are members of the same family
-- descendants of the founder -- and many of them are intent on removing
the current board of directors and selling out.
- Seeking to retain control of the company, International Paper Box Machine,
president Louis C. Chagnon obtained a $4.8 million loan from Fleet Bank,
which the state promptly agreed to guarantee -- with the approval of the
Governor and the state's Executive Council.
- The money would allow Mr. Chagnon to buy out his cousins and thwart
the bid by the outside investors.
This means that not only has New Hampshire involved itself in fighting
a corporate take-over attempt, but insinuated itself into a family feud
as well.
Source: Charles V. Bagli, "New Hampshire Takes an Unusual Step to
Involve Itself in a Takeover Battle," New York Times, December
13, 1996.
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Failures of Mass Transit
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Americans are diversifying their daily travel destinations, frustrating
the efforts of those who plan mass transit systems, according to experts.
With many workplaces relocating to suburban communites, commuters are traveling
from suburb to suburb -- rather than from suburb to city and back at night.
- As reported in a 1990 study, suburb-to-suburb trips make up 40 percent
of all metro area commutes -- compared to one-fifth for suburb-to-central-city
commutes.
- Only 8 percent commute city-to-suburb.
- People are diversifying the purposes of their trips -- with just 19.8
percent of trips being to workplaces in 1990, versus 20.7 percent in 1983.
- The growth of telecommuting -- with 9.1 million Americans working out
of their homes -- may reduce congestion, but it makes the task of transit
planners more difficult.
Then add in the fact that employers and employees are going to more flexible
work hours.
While commuters in some big cities utilize mass transit, usage rates
are far from uniform.
- More than a quarter of New York City commuters use mass transit, but
only 15 percent do so in Chicago.
- Nationwide, less than 6 percent use it.
As populations spread out and travel destinations multiply, rail transit
-- with its huge initial costs and lack of flexibility -- becomes a less
attractive investment for cities. Urban planners say that population densities
in many places would have to be nine to ten times greater than they are
now to make rail pay off.
Experts contend that deregulation of urban mass transit would let private
entrepreneurs experiment with various systems to achieve flexibility in
routes and cost reductions to attract the public.
Source: Charles Oliver, " The Trouble with Mass Transit," Investor's
Business Daily, December 26, 1996.
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