Weather Updates

Chicago’s top business stories of 2012, a year of turnarounds, tailspins

FILE - This Jan. 10 2012 file phoshows Hostess Twinkies New York. Twinkies first came onscene 1930 contained real fruit

FILE - This Jan. 10, 2012 file photo shows Hostess Twinkies in New York. Twinkies first came onto the scene in 1930 and contained real fruit until rationing during World War II led to the vanilla cream Twinkie. (AP Photo/Mark Lennihan, file)

storyidforme: 42245147
tmspicid: 14949820
fileheaderid: 6775801
Article Extras
Story Image

Updated: January 31, 2013 6:35AM

The end of the year is a time to count blessings. It’s good for the psyche. For Chicago business, a look back at the biggest stories of 2012 serves much the same function.

A lot of good things happened during the year. Stocks rose, the housing market began healing, and there was a sense that the Chicago economy was on the move and experimenting.

Jarring job losses occurred, of course, but capitalism’s creative destruction was on full display. New companies sprouted to serve technological niches. Larger companies moved to Chicago and Mayor Rahm Emanuel showed off each catch like it was a prized trout.

The nature of “news” is to emphasize the negative and surprising, and those traits are present in this countdown of the year’s top stories in Chicago business. But look more closely and you’ll see a city in transition, where innovation is gaining strength alongside the smokestack industries of old.

The stories:

10. Hostess in waiting: Laugh if you must at this inclusion of the Twinkie manufacturer’s bankruptcy on this list, but how often do people rush out and hoard a product with such a local identity? Shoppers bought up every Twinkie package they could lay hands on when the snack’s maker, Hostess Brands Inc., filed for bankruptcy and shut down. The move cost 18,000 jobs but at yearend the company had more than 100 offers for its brands, including Twinkies’ overlooked cousin, Ho Hos.

9. Down by the river: In an otherwise slow year for downtown development, the well-known Kennedy family and partners presented plans for a $1 billion investment. They would build three towers with a mix of uses at Wolf Point, a nearly four-acre patch on the Chicago River at Orleans. An apartment tower would go first, but the rest could be years off. At worst, though, the project should improve the appearance of a prime downtown site.

8. Tribune Tower takeover: So many American newspapers, including this one, have gone through it. The bankruptcy, the job cuts, the struggle to realize a profit from new ways to deliver news. Now it’s the Chicago Tribune’s turn. The parent Tribune Co., with its coast-to-coast printing and broadcasting interests, is about to emerge from an arduous, slow-motion bankruptcy that will leave it in the hands of debtholders with no commitment to the news business. A “for sale” sign is on every asset.

7. Boeing’s turbulence: It was three years late coming off the assembly line. When it was put into service, Boeing Co.’s Dreamliner jet was plagued by reports of fuel leaks and a problem that caused an emergency landing. But the Chicago company’s new mid-sized jet, hailed for its passenger comforts and fuel efficiency, appears ready to thrust its profits forward. It is planning to boost airplane production by 25 percent over the next 18 months.

6. Big breakups: These things happen in cycles. Companies get bigger for the sake of earnings diversity. Then they get smaller for the sake of focus. Small is now beautiful in the Chicago corporate hierarchy, as the giants Kraft Foods Inc. and Sara Lee Corp. completed spinoffs in 2012, while Abbott Laboratories planned another that takes affect Jan. 1. They have in common a fondness for weird names: the spinoffs are Mondelez International, D.E. Master Blenders 1753, and AbbVie.

5. Navistar on the brink: An analyst called its cash burn rate “atrocious” and it lost $2.8 billion in its fourth quarter. Navistar International Corp., one of the oldest companies founded in the Chicago area, has more troubles than it can count, including a federal probe of its accounting, large expenses for warranty repairs and a botched adaptation of emissions control technology for its engines. But it also is aggressively selling or closing noncore businesses.

4. Payrolls on a roll: The job announcements for downtown Chicago came fast and furious, and sometimes the impact will be less than promised. But the year saw Google Inc., as a result of its purchase of Motorola Mobility, laying plans for a move into the Merchandise Mart, which also became an incubator for small tech companies. Capital One Financial Corp., KPMG and McGladrey LLP were among the new job providers heralded by City Hall.

3. Futures’ past: One year ago, Chicago traders were stung by the MF Global scandal. This year, the scandal was smaller but still significant, as Peregrine Financial Group Inc. founder Russell Wasendorf Sr. pleaded guilty to a $200 million theft scheme involving customer money. The scandals have shaken faith in the markets and, while other factors are involved, many see a correlation between lack of trust and declining trading volumes at the exchanges of Chicago-based CME Group Inc.

2. Safer at home: Nobody should
celebrate the state of the housing
market just yet, certainly not anyone in
the homebuilding trade. Prices here are
still declining — slightly — while national markets are faring better. But a turnaround is at hand. It will depend on consumer confidence and inventory. If people feel ready to buy — and the rate of family formation indicates there should be pent-up demand — and foreclosures finally start leveling off, the market will at last shake off the credit crisis.

1. Groupon clipping: Coupon merchant Groupon Inc. was easily the biggest debacle in Chicago business this year. It saw its shares fall from more than $20 each to less than $5. Chalk it up to a series of missteps — accounting blunders, earnings misses and remarks that company chiefs regretted. By yearend, investors were speculating about the future of CEO Andrew Mason. So was Mason himself. But new business strategies had potential and Google Inc. was again said to be interested in the company.

© 2014 Sun-Times Media, LLC. All rights reserved. This material may not be copied or distributed without permission. For more information about reprints and permissions, visit To order a reprint of this article, click here.