While Congress debates forcing bosses to pay for workers' health insurance, analyst Mark Kalinowski, of Philadelphia-based Janney Montgomery Scott, asked the operators of 192 McDonald's restaurants what that would mean for them.
Boy, did they squawk:
"It will crush us," Kalinowski quotes one unnamed Mickey D's operator, in the latest edition of the survey he's published every two to three months since 2003.
"The business will no longer make sense."
"It will affect hiring and salary decisions."
"I hope [the noncompliance] penalty is tax deductible!"
And: "Dollar Menu for all competitors will be gone."
Operators told Kalinowski that the measure would add $40,000 to $150,000 to their yearly operating expenses, per restaurant, and that they'll try to get it back with lower pay and higher prices.
What else would they say? But the survey also shows McDonald's franchisees aren't scared only of paying part of their workers' medical so hospitals and taxpayers don't have to.
They also rated the economy just 2.2 on a scale of 1 to 5 - lowest in the survey's history, according to Kalinowski.
They rate relations with the parent McDonald's corporation even worse - just 1.7 - after poorly received McCafe and Monopoly promotions, and the holding company's insistent demands for restaurant upgrades, paid for by franchiser profits or loans.
Still, one operator was upbeat: "The best thing we have going for us is that operator relations and strategies are even worse for our main competitors, especially Burger King."
Kalinowski rates Burger King shares "Buy" at current prices. He's "Neutral" about McDonald's.
DuPont seeks deals
At an industry conference last week, Citigroup chemical-stocks analyst P.J. Juvekar, noting how cheap industries are in this depressed market, asked DuPont Co. chief financial operator Nick Fanandakis, "Are you looking actively to make acquisitions?"
Fanandakis reminded the crowd that DuPont sold 14 businesses and bought five, doubling sales, in the three years he ran Wilmington-based DuPont's chemical unit.
And yes, he's looking. "When I look at the corporation as a whole, I see opportunities," he said, "in three very key strategic areas for us: around safety and protection, around electronics, and around ag [seeds and pesticides]."
Why buy? "I am not going to do an acquisition just to bulk up. I am going to do an acquisition - for strategic reasons - that is going to provide me technology, market access, channel access, that sort of thing."
How big? "It could be as small as a bolt-on, or it could be transformational," Fanandakis said. "It really depends on the value."
Would you risk your credit ratings for a deal? "We are very comfortable with the credit ratings we have today, the single-A status," he said. "We have access to very low debt."
But, he added: For a "transformational acquisition," one that would take DuPont into new businesses, "I would be willing, for the right strategic acquisition, to slip down a notch in credit rating for a brief period of time."
How'd that sound to bond-buyers who had just lent DuPont $2 billion in November?
"Made our hearts flutter a bit," Gimme Credit analyst Carol Levenson told clients in a report.
She noted DuPont, debt-laden but also cash-rich, stood to lose $1 billion a year when its license to sell high-blood-pressure drugs Cozaar and Hyzaar through Merck expires next year.
"To placate equity investors and deliver on its promise of 20 percent compound annual earnings growth after this gold mine is played out, DuPont may indeed need to take a dramatic M&A step," Levenson said
42 gallons in a barrel
As I wrote in yesterday's column, Solazyme Inc. has a contract with the Navy to deliver a sample of fuel made from slimy algae.
But Harrison Dillon, Ph.D, president and chief technology officer, points out that early contract is for 22,000 gallons, not the 22,000 barrels I wrongly put.