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Grapevine: Weeding out bad businesses

Home contractors from Louisiana are taking the storm recovery experience they got during Hurricane Katrina and putting it to work in the Garden State.

That experience, one construction industry insider said, isn't always the kind you brag about.

The insider, who is based in Louisiana, met with government officials in New Jersey to educate them about the catastrophe that became the Katrina rebuilding process. She said several contractors with warrants out for their arrests in Louisiana have tried to open under different names in New Jersey in the hopes of snagging post-Sandy contracts.

"There are some people here (in Louisiana) who we wanted to make sure didn't end up there," said the source, who handed over names of problem-child contractors to anyone who would listen. "They just didn't know who those people were."

Applications to become one of the state's registered contractors for Sandy rebuilding are no longer being accepted, and the source said she's pleased to see what the state has done to ensure quality contractors are available to homeowners in need.

"New Jersey's going to run so much better than Louisiana," the source said. "It won't have nearly the kinks and the fraud, to be honest with you, that we've had here."

Nokia eyeing Alcatel-Lucent

Word that Nokia is interested in buying Alcatel-Lucent's wireless business makes sense for Nokia, one telecommunications researcher said — but persuading Alcatel could be a harder sell.

Finland-based Nokia, which plans to sell its handset business to Microsoft for $7.1 billion, is considering pursuing Alcatel-Lucent's mobile phones network as part of a strategy to boost its competitive position, according to media reports.

"If they are only buying the wireless part, then you can see some synergies," said the researcher. "Alcatel-Lucent is loaded with wireline assets. The question is whether they can break those two apart and satisfy shareholders at the Alacatel-Lucent side."

The source added that land-based assets are perceived as lower growth area relative to wireless, given changing habits among young consumers.

Alcatel declined comment, reiterating a restructuring strategy announced earlier this year. Dubbed the "shift plan," Alcatel said it plans to restore profits by selling assets, restructuring debt, and investing more in cloud technology and Internet routing systems to address growth in bandwidth-hungry data.

Based in France, Alcatel-Lucent employs about 3,000 in New Jersey, mostly in the Murray Hill section of New Providence. The company also has a research-focused plant in Holmdel.

Good ideas, bad results

As the one-year anniversary of Hurricane Sandy approaches, gas shortages and allegations of price gouging seem like a distant, unpleasant memory. But the threat of future storms looms large, and one oil executive is urging legislative caution when it is time, once again, to react.

Because although those bills make for great headlines, they aren't always good policy, the source said.

"I think it's costly, and it doesn't necessarily achieve what you're looking to achieve," the source said.

Price gouging, for instance, isn't always a matter of a greedy gas station owner trying to milk a disaster for all its worth, he said. The price of oil goes up in a crisis, and often times it has to be trucked in from further away, which again makes costs go up. The companies providing that fuel often need to raise prices to keep providing a service.

"Good intentions, they want to solve a problem, but they don't understand all the issues," the source said. "You need to participate in the process."

Grapevine reports on the behind-the-scenes buzz in the business community. Contact Editor Tom Bergeron at tomb@njbiz.com.

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