Wednesday PM May 28th, 2008
by: Ed Mayberry, May 28, 2008 11:05:02 am
ExxonMobil Chairman and CEO Rex Tillerson will keep both of his titles as shareholders have rejected a plan to split the chairman and chief executive roles. Some members of the Rockefeller family and other shareholders pushed to separate the roles. Rockefeller family members and others have said they're concerned Irving-based ExxonMobil is too focused on short-term gains from soaring oil prices and should do more to invest in cleaner technology for the future. The plan to split Tillerson's duties into two jobs got only 39.5 percent of shareholders' support at the huge oil company's annual meeting Thursday. A similar vote last year failed with 40 percent support. Much of the advance focus at the meeting was on the resolution to name an independent director as company chairman, essentially prohibiting Tillerson from holding that job and that of chief executive officer. Tillerson, who received a compensation package last year valued at about $21.7 million, has served in both roles since 2006. A small contingent of about two dozen protesters showed up outside the meeting, carrying signs and occasionally chanting. A small plane flew overhead a couple times, towing a banner urging an end to the Iraq war and boycotts for Exxon and other major oil companies.
Lexicon Pharmaceuticals is cutting its workforce as part of cost-cutting and reorganization of its research and discovery operations. The biopharmaceutical company will cut about 100 jobs, or about 20 percent of its workforce, in The Woodlands and in Princeton, New Jersey. Lexicon cut its workforce by 133 employees in January 2007.
A published report says Ford may cut its U.S. salaried work force by up to 12 percent, or more than 2,000 jobs. It is struggling to keep its restructuring plan on track amid slumping sales and record-high gas prices. The Detroit News reports that some employees were told about planned involuntary layoffs during a town hall-style meeting on Friday. A Ford spokesman says no final decisions have been made on layoffs. Ford announced last week it would cut production and no longer expects to return to profitability by 2009. Ford didn't rule out layoffs and said it would release more detail about cost-cutting efforts in July.
Dow Chemical is raising its prices by up to 20 percent to offset the soaring cost of energy. Dow CEO Andrew Liveris says Washington has failed to develop a comprehensive energy policy and as a result the country now faces a “true energy crisis.” The price increases will take effect Sunday and will be based on a product's exposure to rising costs. Dow says it spent $8 billion on raw materials in 2002 and that could climb four-fold to $32 billion this year. Dow Chemical makes everything from ingredients used in antifreeze, coolants, cosmetics and pharmaceuticals, to products used in detergents, wastewater-treatment and disposable diapers. It also makes key ingredients used in paints, textiles, glass, packaging and cars.
Gas prices rose to a new record over $3.94 a gallon. The national average price of a gallon of regular gas rose seven-tenths of a cent overnight to a new record of more than $3.94, according to AAA and the Oil Price Information Service.
Oil prices are below $127 a barrel, extending a decline of more than $3 in the previous session. The drop comes amid a feeling that record-high costs have cut demand for gasoline and other fuel. Backing that up are new statistics from the Federal Highway Administration. According to an industry newsletter, they show that Americans scaled back the number of miles driven this past March by more than four percent compared to March of last year. That comes out to 11 billion miles.
Also, Indonesia says it's leaving the Organization of Petroleum Exporting Countries because declining production and investment have made it difficult to meet even its own needs. Indonesia is the only southeast Asian member of OPEC.
The American Federation of Television and Radio Artists says it has agreed to a tentative deal with Hollywood studios on a new three-year contract. The union said early Wednesday that the deal establishes fees for content streamed and downloaded over the Internet and preserves actors' rights of consent on the use of their voices and images in online clips. The agreement over a handful of prime time TV shows such as “Curb Your Enthusiasm” will last through June 2011 if it is approved AFTRA's national board and ratified by members. The deal greatly reduces the chance of an actors strike.
A federal jury has awarded Medtronic $250 million in a patent dispute with medical device rival Boston Scientific. A jury in Marshall, Texas, found Tuesday that Natick, Massachusetts-based Boston Scientific infringed on three Medtronic patents. They covered technology to implant heart stints used in artery-clearing surgery. Boston Scientific said it hopes to raise defenses that were not heard by jurors. If those arguments don't cause the verdict to be set aside, the company plans to try to overturn the ruling in post-trial motions. If necessary, Boston Scientific said it will appeal.
A Houston-based company is hoping to expand its natural gas distribution system by adding 33 miles of pipeline in south-central Pennsylvania by 2010. Spectra Energy proposes building an underground pipeline from Marietta in Lancaster County, Pennsylvania, to a compressor station owned by Transco in Peach Bottom Township in York County, Pennsylvania. It's part of a $500 million plan to bring nearly 400 million cubic feet per day of natural gas from the Rocky Mountains to Ohio to central Pennsylvania. Spectra Vice President Bill Yardley says the company is exploring routes to try to find the least invasive. Yardley says some 270 landowners could be affected in York and Lancaster Counties. Yardley says Spectra will seek permission to survey those properties.