Our holiday tree is up, shimmering with treasured ornaments. As they come out of hibernation each year, I take stock: what’s good, what’s ratty, what deserves front-of-the-tree.

At year end, businesses take stock, too. They look at what worked, what didn’t, what strategies should be in play for 2008.

This year brought dramatic change to Virginia’s business community. Businesses came and went and continued to morph as they jockeyed for position in a 21st century global economy. After more than eight decades, Ford Motor Co. closed its assembly plant in Norfolk as part of an effort to restore profitability. As the last F-150 truck rolled off the line, more than 1,000 workers said goodbye to some of the best-paying manufacturing jobs in Hampton Roads.

Meanwhile, new players decided to call Virginia home: Volkswagen of America is moving its corporate headquarters to Fairfax County, and Rolls-Royce plans a new jet engine plant in Prince George County — developments expected to create 900 new jobs. Plus, Virginia’s R&D profile is on the rise with construction under way on SRI International’s new drug research facility in Rockingham County.

On the bright side, Virginia continued to rack up No. 1 rankings as the best state for doing business. But there’s still room for improvement. Just ask Northern Virginia how to spell r-o-a-d-s.

Before we get too woozy from the eggnog, whereupon even journalists have been known to bid good cheer, here’s a short list of some of the major business developments in 2007:

The housing industry

The subprime mortgage meltdown is starting to feel like a limbo contest. How low can you go? Some mortgage lenders already are out of business and major financial powerhouses have reported billion-dollar losses. Foreclosure rates stand at a 20-year high, a trend contributing to budget shortfalls in Northern Virginia, where localities rely heavily on real estate tax revenues to fund public services. However, a diamond remains among the lumps of coal. Median home prices in Virginia are still going up. In October, the median price was $232,478, way above the national median of $205,700, which dropped 6 percent compared to the same month in 2006.

Telecom

In this industry, developments are flying faster than Santa’s reindeer. Verizon ended the year with a major policy change. Come mid 2008, its expansive cell network will open to phones purchased from other vendors. The move will give customers more freedom when picking network providers and mobile applications.

Meanwhile, AT&T rolled out a new third-generation (3G) wireless broadband network in Richmond and Hampton Roads. Customers can check company e-mail or catch the latest video highlights of the Hokies’ upcoming Orange Bowl game, all from their phone. The AT&T team stopped by our office and demonstrated Video Share, a service that lets users share live video while carrying on a telephone conversation. Look, Grandma, here’s little Susie playing Bach at her recital.

Energy
It seems everyone is going green and looking for alternative energy sources. The Hopewell City Council recently voted to sell city land to a company that wants to build an ethanol plant downtown, and a biodiesel plant is coming to Lee County. Conversely, Chesapeake said no to a massive ethanol plant.
As the price of gasoline shot up at one point to nearly $100 a barrel, nuclear energy seemed poised for a rebirth. Richmond-based Dominion became the first investor-owned electric utility in the country to file an application with the Nuclear Regulatory Commission for a possible third reactor at North Anna. Altogether, applications for six new reactors have been filed with federal regulators in the last five months, and they expect more in the new year.
Nuclear power is cheaper to generate and doesn’t contribute to global warming like the burning of fossil fuels. However, disposing of nuclear waste remains a challenge.

Health care
Hospitals around Virginia are expanding as they brace for the aging of the baby boomers. The cost of health-care premiums continues to rise at many companies while small businesses struggle to even afford employee health care. Some relief could be on the way for small businesses if Virginia’s General Assembly signs off on a $7.7 million budget proposal from Gov. Timothy M. Kaine to assist businesses in purchasing health insurance. The move would cover about 5,000 people — out of an estimated 1 million who are uninsured in Virginia. Only a small step to be sure. Yet, isn’t that what a new years is all about? Trying new solutions to old problems.

Got a creative way of doing business? If so, the Business Council of the Virginia Museum of Fine Arts wants to hear about it. The council is accepting nominations through Jan.15 for its 4th Annual Muse Awards, which recognize creativity and innovation in business. The program recognizes nine companies across the state that demonstrate a creative approach to products, services, campaigns or organizational structure.  The 2007 winner was Intrinergy LLC of Hanover County for its approach to renewable energy processing. Winners will be announced March 6 at the museum’s Muse Awards ceremony known as the “un-gala” for its unconventional approach to an awards program. For nomination forms and guidelines, go to the museum’s Web site at http://www.vmfa.museum/musewards.html or e-mail or fax Elizabeth Lowsley-Williams, VMFA corporate relations manager, at or 804 340-1465.

by Jessica Sabbath

I got my first opportunity this morning to see the new APM Terminals Virginia facility. Wow.

The $450 million marine terminal has many impressive features. But it was automation of the gentry cranes (which remove containers from trucks and stacks them into rows) that really wowed me.

As trucks enter the terminal, they receive a ticket telling them which row to take their cargo. After trucks back into their prescribed spot, a gentry crane automatically moves over the container and begins to lower wires to grab it. Once it is almost aligned, a remote operator located in the terminal building takes over.

The operator uses cameras to hook onto the container and lift it off the truck. Then automation takes over again, lifting the container up and placing it in the correct stack.

Once a truck has backed into the spot, it takes about six minutes to lift the container off the truck.

Automation is the key in helping cargo move efficiently throughout the port. The terminal can currently move trucks in and out of the port in about 45 to 50 minutes. APM Terminals officials, however, expect to drop that average to 30 minutes. While the crane operation has proven efficient, the terminal still needs to implement all of its technologies as trucks enter the terminal’s gate.

by Robert Powell

All the offices in Philip Morris USA’s new Center for Research and Technology in downtown Richmond measure 10 feet by 10 feet.

The spaces are small because the company wants to nudge its scientists, engineers and marketing people away from their desks and get them talking about new product ideas. The $350 million building in the Virginia BioTechnology Research Park in downtown Richmond is designed to “drive collaboration and innovation,” said Richard P. Solana, the company’s senior vice president of research and technology.

Solana talked about plans for the 450,000-square-foot center Thursday morning during a tour arranged for about a dozen journalists. The building, where 100 employees now work, eventually will house 500 workers. The center will focus on developing new tobacco products and finding ways to reduce the harm caused by smoking.

The U.S. cigarette industry generated $70 billion in sales in 2005, roughly the same total revenue as soft drinks. But the volume of cigarettes sold has declined by 2 percent a year for the past 20 years.

Philip Morris’ response has been an “adjacency strategy.” in which new products build on the strength of existing brands such as Marlboro. For example, the company is test marketing Marlboro Virginia Blend, a cigarette using Virginia flue-cured tobacco, and Marlboro Snus, a smokeless tobacco product.

Philip Morris expects the center to spark a host of new product ideas. The space is set up for creative brainstorming. Groupings of chairs and tables throughout the building are often accompanied by a white board, even in the company cafeteria and the break room. The interior is filled with glass and open space, and cubicle partitions are low so that employees on the same floor are always within line of sight of one another. Also, offices are grouped by projects rather than field of expertise so that employees working on a new product can quickly get together.

One third of the space is devoted to laboratories. Another section is used for market research. In some rooms, researchers behind one-way mirrors will watch groups of consumers discuss their product preferences, while in other rooms customers will fill out questionnaires.

Solana noted that some of the center’s work will involve “sensory research,” finding ways to make new products appealing to consumers. He noted that years ago Philip Morris developed the Accord, a battery-powered cigarette designed to reduce ashes and smoke, but it failed to gain acceptance among consumers.

The 56 –year-old Solana, who does not smoke, has two personal goals for the technology center: reduce the harm caused by smoking and ensure that Philip Morris remains a viable, growing company. He is confident the facility can achieve both goals. “Great ideas come from smart people working together,” he said.

Look for C. F. Sauer Co. to roll out new products in the next 120 days as part of its 120-year anniversary celebration. The company celebrated 12 decades of business today with a cake and ice-cream celebration at its Richmond corporate headquarters, the company’s home since 1911.
Details on what the nation’s largest producer of spices and extracts may come out with next weren’t made public. However, President C. F. Sauer IV did unveil a new packaging look for Sauer’s trademark spices, which adds a soft green color to its typical scheme of yellow and red.
Sauer’s was founded in 1887 by Conrad Frederick Sauer. The private business has remained in the family continuously for four generations, no small accomplishment in today’s competitive business world. Many family members attended the celebratory event. “We’re proud to be a part of your lives and to be present at your meals,” Sauer told employees and Richmond city officials who turned out for the celebration. 
Speaking of meals, everyone got a piece of cake. It was made with Duke’s Mayonnaise, one of Sauer’s many products.