Friday PM February 13th, 2009
by: Ed Mayberry, February 13, 2009 5:02:24 pm
The House has passed a $787 billion plan to resuscitate the economy, handing President Barack Obama a big victory. The measure was passed on a 246-183, with no Republican “yes” votes. It will now go to the Senate. The eight-inch thick measure combines tax cuts for individuals and businesses with a half-trillion dollars in government spending for infrastructure, health care and help for cash-starved state governments. Seniors would get a $250 bonus social security check. Seven Democrats voted against the bill. Obama claims that the plan will save or create 3.5 million jobs. But Republicans said it won't work because it has too little in tax cuts and spreads too much money around to everyday projects like computer upgrades for federal agencies.
Members of the Houston Congressional delegation have sent a letter to Transportation Secretary Ray LaHood asking for his support for light rail projects. It asks that the Federal Transit Administration issue Early System Work Agreements for METRO projects in order to be eligible for funding from the economic recovery bill.
A top economics adviser to President Barack Obama says the stimulus plan will help, but that it isn't a “silver bullet” to cure the problem. Larry Summers, a onetime Clinton administration treasury secretary who now heads Obama's White House Economics Council, called the bill “complex” and said getting it through Congress is a credit to the president's leadership. Summers said, “it's the biggest fiscal expansion in our country's history.” He also said that it will immediately put money into the pockets of middle-class families and should help to revive consumer spending. But he warned that the country's economic woes didn't happen overnight and that it's “going to take time to fix.”
JPMorgan Chase and Citigroup are halting home foreclosures while the Obama administration develops its plans to help the U.S. housing market. JPMorgan Chief Executive Jamie Dimon said the New York company plans to halt new foreclosures for owner-occupied home loans through March 6th. Dimon made the pledge in a letter to Massachusetts Democrat Barney Frank, chairman of the House Financial Services Committee, who released it on Friday. A company release says Citigroup's foreclosure moratorium applies to all “Citi owned first mortgage loans that are the principal residence of the customer as well as all loans Citi services where we have reached an understanding with the investor” until President Barack Obama's administration has finalized the details of the loan modification program or March 12th, whichever is earlier. Citi's action expands on a similar effort that it started in November. Frank earlier this week called on the mortgage industry to enact such broad foreclosure moratoriums. The administration is working on a plan to spend $50 billion on foreclosure prevention and establish national standards for modifying home loans.
Investigators have recovered the two “black boxes” from the wreckage of a plane that crashed near Buffalo, New York, killing 50. The flight data and cockpit voice recorders have been sent to Washington as investigators try to determine what made Continental Connection Flight 3407 crash into a house. Houston-based Continental Airlines expressed its “profound sadness” for the mishap involving the flight, operated by Colgan Air.
Texas Comptroller Susan Combs said the state collected $1.92 billion in sales tax revenue in January—up 3.9 per cent compared to January 2008. But collections from retail trade and construction have decreased. Combs sent $66.5 million in local sales tax to Texas cities, counties, transit systems and special purpose districts—up 3.9 per cent compared to distributions in February 2008. January state sales tax collections and February local sales tax allocations represent sales made in December.
House leaders are urging General Motors and Chrysler to submit credible restructuring plans next week to the Obama administration. Speaker Nancy Pelosi and Representative Barney Frank said in a letter to the heads of GM. and Chrysler that the restructuring plans need to show they are willing to make “tough decisions” to revamp their companies. GM received $9.4 billion in federal loans and is expected to receive another $4 billion, while Chrysler has received $4 billion in loans and hopes to get another $3 billion. The companies must submit plans next week showing how they will restructure their companies to become viable in the future.
Toyota's reacting to the slump in U.S. auto sales by further cutting North American production. The Japanese auto maker also is slashing executives' compensation by up to 30 per cent and offering buyouts to about 18,000 workers. The company says it'll cut production days at some U.S. factories in April by from two to eight days, depending on the amount of inventory at the particular plant. It's also instituting a shorter work week at some plants. Affected hourly employees will work eight hours less per two-week period, taking a pay cut with the new 72-hour workweek. The world's number one automaker said the move will begin in April at its auto assembly plants in San Antonio, Indiana and Kentucky, as well as auto-parts factories in Alabama, Missouri and West Virginia. Unionized plants in the U.S. and Mexico won't be affected.
The European car manufacturers' association says European sales of new cars have plummeted by more than a quarter over the past year, sinking to the lowest level in two decades. The Association of European Automobile Constructors says car sales in January declined by 27 per cent compared with the 2008 figure. In recession-hit Iceland, sales dropped by 88 per cent; in Latvia by 77.5 per cent and in Ireland by 66 per cent. France is the only nation to keep the losses in single digits with a decline of 7.9 per cent. Overall, the January figures dropped below the million mark at 958,500 cars for the lowest level in two decades.
The peanut processing company at the heart of a national salmonella outbreak has filed for bankruptcy. The Virginia-based Peanut Corporation of America filed for Chapter 7 bankruptcy protection in bankruptcy court in Lynchburg. The company's attorney, Andrew Goldstein, says the filing was “regrettable” but inevitable. The outbreak has sickened 600 people and may have caused at least nine deaths nationwide.
The Texas plant operated by the company at the center of a salmonella outbreak has been closed and its products recalled due to alleged health violations. Texas health officials say inspectors found dead rodents, feces and feathers in a crawl space above a production area of the Peanut Corporation of America plant. The Texas Department of Health and Human Services issued the order and says an air handling system was pulling debris from the crawl space into areas where products were processed. The plant in the panhandle city of Plainview employs about 30 people and operated unlicensed and uninspected for nearly four years since it opened in 2005.
Circuit City is heading to U.S. bankruptcy court to seek approval to auction the leases for the properties and break leases at locations that are unable to be sold, including 567 U.S. stores, its corporate headquarters and various distribution centers. The Richmond, Virginia-based company is in the process of liquidating its stores after it failed to find a buyer for what was the nation's second-largest consumer electronics retailer. Going-out-of-business sales should last through March, after which the stores will be closed. The judge also will hear a motion from Chase Bank USA requesting to break its credit card program agreement with Circuit City.
The Career and Technical Education Career Expo is set for tomorrow at the Hattie Mae White Educational Support Center on West 18th. Business exhibitors at the CTE Career Expo will showcase industry and educational opportunities with health and science exhibits, auto technology demonstrations, a fashion show, a robotics obstacle course, computer maintenance competitions and displays.
Some 200 middle school girls from the Houston area are attending ExxonMobil’s Girls in engineering Festival tomorrow at the Spring Branch Education Center on Westview. The program is to encourage careers in engineering in conjunction with National Engineers Week. Local female engineers and scientists will discuss the possibilities in panels. Including a television meteorologist and a NASA systems engineering and integration specialist.
Executives at the University of Texas at Austin saw their take-home pay rise sharply — along with steep tuition increases. An analysis released by the Associated Press shows some of those salaries increased by 30 per cent or more in four years. The flagship Texas school abruptly froze the salaries of its top executives last week amid growing calls for fiscal discipline among state agencies and universities. But before that, top administrative salaries had generally been going up at a steady clip, from the office of the president down to the department deans. Records analyzed by AP show the budget for administrative jobs that paid at least $200,000 or more at some point between 2004 and 2008 jumped from $5.9 million — to $8.2 million. The increase came at a time when tuition and fees at Texas colleges and universities rose dramatically. At UT, the yearly cost of education, counting tuition and fees, rose 57 per cent, from $2,721 in 2003 to $4,266 in 2008. Officials stressed that 20 per cent of the increased revenue went back into student grant money. State Representative Joaquin Castro of San Antonio is vice chairman of the Texas House Higher Education Committee. Castro says it's unfortunate for executive salaries to go up a lot right now — while students are finding it tougher and tougher to afford college. He says it's a good idea to look into it. The chief financial officer at UT Austin, Kevin Hegarty, said administrative costs at UT-Austin are a relative bargain. Hegarty says UT's administrative costs were $94 million in 2008, or about 5.7 per cent of its operating budget of $1.8 billion. That doesn't count self-supporting programs such as athletics, housing and food operations. Records show Hegarty was paid $353,995 in 2008, a pay raise of 36 per cent from 2004, when he was paid $260,000. UT isn't the only school that has seen big salary increases for its top administrators. AP reports former Texas A&M President Robert Gates, now the U.S. Defense Secretary, made $362,000 in 2004. School records show the new A&M president, Elsa Murano, was making $525,000 in 2008 — an increase of 45 per cent. At the University of Houston, figures show a more modest ten per cent increase in the president's salary, from $387,500 in 2004 to $425,000 last year.
The retractable roof at Reliant Stadium has been repaired — five months after Hurricane Ike ripped holes in one of Houston's signature structures. Reliant Park General Manager Mark Miller said the five bow-tie shaped fabric panels destroyed in the storm have been replaced. Miller says all that's left for workers to do is plug water leaks at the venue, which is home to the NFL's Houston Texans. Miller says the project will be done by next week, in plenty of time for the stadium's biggest event. The Houston Livestock Show and Rodeo runs March 3rd through the 22nd. Ike roared ashore September 13th, with sustained winds of 110 miles per hour. The Reliant Stadium roof cost $4 million to fix--part of a $10 million price tag on all the stadium repairs. The repairs were financed by insurance, plus Harris County and federal funds.
The chairman of Compuware is defending the hiring of former Detroit Mayor Kwame Kilpatrick, a convicted felon, as an account executive. Peter Karmanos acknowledges that Kilpatrick has a “checkered background.” But he says he's talented and “uniquely qualified” to call on customers who want to put health-care records in electronic form. Karmanos spoke with WJR radio host Paul W. Smith. Kilpatrick is going to work in the Dallas area for Covisint, an arm of Compuware, a Detroit-based software company. He served 99 days in jail for obstruction of justice and assault and still needs court approval to transfer his probation to Texas. Kilpatrick's former administration is under investigation for corruption. Karmanos says the former mayor could be fired depending on the results of the probe.
A judge in Montana says BNSF is responsible for cleanup of pollution at the Kalispell site of a former oil refinery. The decision by District Judge Jeffrey Sherlock of Helena could hit the Fort Worth-based company with a cleanup bill that Montana officials estimate at $32.5 million. Sherlock's decision came in the first Superfund hazardous waste case that the Montana Department of Environmental Quality had taken to trial. BNSF says it's already spent $5 million on cleanup at the Kalispell site and never owned or leased the refinery property. Spokesman Gus Melonas says the company is reviewing Sherlock's decision, and considering options. He also says BNSF has worked and will continue to work closely with Montana Department of Environmental Quality to perform remediation.
The number of rigs actively exploring for oil and natural gas in the United States dropped by 60 this week to 1,339. Of the rigs running nationwide, 1,054 were exploring for natural gas and 273 for oil, Houston-based Baker Hughes reported. A total of 12 were listed as miscellaneous. Texas lost 31 rigs. A year ago, the rig count stood at 1,773 nationwide. Baker Hughes has tracked rig counts since 1944. The tally peaked at 4,530 in 1981, during the height of the oil boom. The industry posted several record lows in 1999, bottoming out at 488.