Missouri Minute: Former UAW chief charged; Bullard says further rate cut unlikely

Good morning, MBA readers,

Thursday brought big developments in a pair of high-profile corruption cases tied to the St. Louis area. In one, Gary Jones, the former president of the United Auto Workers, was charged for his role in an alleged scheme to embezzle more than $1 million from the union. Jones and others are accused of racking up receipts from personal golf outings, resort stays, spa days and, in one case, a $13,000 cigar purchase. Jones led the union’s Region 5 office, located in the St. Louis area, until 2018. Thursday’s charges follow guilty pleas from two other top UAW officials based out of the St. Louis region.

In the second case, businessman John Rallo was sentenced to 17 months in prison and two years of probation for his role in the pay-to-play scheme that brought down former St. Louis County Executive Steve Stenger. Rallo, who was charged with making campaign contributions to Stenger in exchange for county contracts, apologized in court Thursday. “I let my ambition get the better of me,” he said, “and it clouded my judgement.”

Read below for more on those cases and the rest of the day’s biggest business headlines.

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Stay alert

Bullard says further rate cut unlikely
James Bullard, president of the Federal Reserve Bank of St. Louis, said this week that it is unlikely the Fed will have any new information warranting a second rate cut in response to the coronavirus outbreak when it meets again later this month. He added that the Fed’s decision on Tuesday to cut the benchmark interest rate by half a percentage point was effectively “insurance” against a growth slowdown. (Bloomberg)

Former UAW chief charged in corruption probe
In a criminal filing unsealed Thursday, federal prosecutors accuse Gary Jones, former president of the United Automobile Workers union, of misusing at least $1 million of union funds. Jones, who previously managed the UAW’s Region 5 office near St. Louis, is the highest-ranking UAW official to be charged as part of a wide-reaching investigation. (Associated Press)

Businessman sent to prison in Stenger corruption case
A federal judge on Thursday sentenced John Rallo, the key accomplice in pay-to-play schemes involving ex-St. Louis County Executive Steve Stenger, to 17 months in prison followed by two years of probation. Prosecutors say Stenger gave county contracts to the companies run by Rallo, who contributed to Stenger’s election campaign. (St. Louis Post-Dispatch)

Top official says Boeing 737 Max certification could come within ‘a few weeks’
U.S. Federal Aviation Administration chief Stephen Dickson said Thursday that a certification test flight for the Boeing 737 Max, which has been grounded for almost a year, is “within a matter of a few weeks.” The test flight would be an important milestone in a tumultuous process to get the Boeing bestseller back in the air. (Reuters)

Cerner among those hit by cancellation of conference over coronavirus
This year’s Healthcare Information and Management Systems Society conference, which expected to draw 45,000 people from over 90 countries, has been called off due to concerns over the coronavirus outbreak. The conference is a key gathering of peers and clients for companies like North Kansas City-based Cerner. (Kansas City Business Journal)

Utility vehicle firm sells to Florida company
Drexel-based Side by Side Stuff, which specializes in aftermarket parts and accessories for utility terrain vehicles, has sold to Florida-based Nivel Parts & Manufacturing for an undisclosed sum. Both Side by Side and its subsidiary, Octane Ridge, will be independent subsidiaries inside Nivel’s specialty vehicles division. (Kansas City Business Journal)

Detroit chain to close five St. Louis stores, affecting 150 jobs
After failing to reach a bankruptcy deal with creditors, Art Van Furniture said Thursday that liquidation sales will begin Friday at all stores, including five in the St. Louis area. A spokesperson said the company is in talks with two retailers about taking over the St. Louis operations, which employ about 150 people. (St. Louis Business Journal)

Springfield bank awards stocks to execs, board members
Guaranty Federal Bancshares recently awarded roughly $750,000 in shares to six company executives and seven independent board members. The largest award, worth about $280,000, went to Guaranty Bank President and CEO Shaun Burke. (Springfield Business Journal)

UMKC to demolish apartment building with extensive water damage, mold
The University of Missouri-Kansas City announced this week that an apartment building that houses 500 students will be demolished due to extensive water damage and mold first found in 2018. UMKC Chancellor C. Mauli Agrawal said in a statement that the school has reached a settlement in the lawsuit with insurance carriers after suing the companies that worked on the building. (WDAF)

Say that again

“When 9/11 happened, basically people went into bunkers. Right now people have sort of gone into a bunker mentality. Now we’re trying to get a read from the customers.”

That’s Emerson Chairman and CEO David Farr describing how the Ferguson-based industrial conglomerate has navigated the coronavirus outbreak, the St. Louis Business Journal reports. Emerson, which has over 10,000 workers in China, is dealing with a supply chain issue due to the outbreak there. It is making some progress, with nearly all of its production workers back to work. For now, Farr said, the company is trying to gauge and stabilize decline from its customers as the virus continues to spread. Emerson also banned travel to China and severely limited travel to South Korea and Italy after a flash surge of infections there.

Hello, my name is

Tesseract Ventures

This Kansas City robotics and AI startup announced Thursday that it scored a $2 million equity investment from UMB Capital, Startland News reports. Tesseract said the funding will finance its research and development. “Both companies are committed to fostering innovation in Kansas City, and it’s wonderful to work with a team that understands the potential of this space,” Tesseract founder and CEO John Boucard said of the relationship with UMB.

It’s been a pleasure doing business with you this morning. Have a great weekend.


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