Friday PM April 24th, 2009
by: Ed Mayberry, April 24, 2009 9:04:00 pm
LyondellBasell Industries has filed for bankruptcy. Bloomberg News says the company joins its U.S. affiliate Lyondell Chemical in seeking protection from creditors on January 6th. Lyondell Chemical makes polymers and petrochemicals, and refines crude oil and gasoline-blending products. LyondellBasell lists assets and debts of move than $1 billion in its filing with the U.S. Bankruptcy Court in New York. It plans to continue conducting worldwide business while developing a plan of reorganization. A hearing is set for April 30th in Manhattan.
Schlumberger says its first quarter earnings tumbled about 30 per cent as oil and natural gas companies cut back on exploration and drilling amid lower prices and demand. The world's largest oilfield services company said that its net income in the January to March period fell to $938.5 million. That compared with $1.34 billion a year earlier. Revenue fell about five per cent to $6 billion from $6.29 billion in the year-ago quarter. Analysts expected revenue of $6.04 billion. Houston-based Schlumberger says it doesn't see a significant recovery in North American gas drilling before next year.
Ford has reported a first quarter loss of $1.4 billion. The automaker says it depleted less of its cash, emphasizing that it doesn't expect to seek any of the government assistance that is keeping its U.S. rivals alive. The nation's second-largest automaker said it spent $3.7 billion more than it took in during the first three months of the year, far less than the $7.2 billion it spent in the fourth quarter of 2008. Chief financial officer Lewis Booth said the company is confident that it will slow the drain on its cash even further this year, and he said Ford will make it through 2009 without needing government aid. He would not speculate, however, about 2010.
The Treasury Department says it has provided General Motors with another $2 billion in federal loans as the giant automaker struggles to restructure. The Treasury said that the payment was made to GM on Wednesday and provides working capital to the company. A government report revealed earlier this week that the Treasury was prepared to provide GM with up to $5 billion more in federal loans and Chrysler with up to $500 million more in bailout support as they race against deadlines to restructure. GM has until June 1st to complete restructuring plans that satisfy the government's Auto Task Force.
A published report says the Treasury Department is preparing a Chapter 11 bankruptcy filing for Chrysler. Pensions and retiree health care benefits of the United Auto Workers would be protected, according to the report in the New York Times. A life outside of bankruptcy appears to hinge on whether Chrysler and the U.S. government can get the company's lenders to forgive a large portion of the company's debt in exchange for stock. The lender issue remains unresolved, according to the newspaper. Chrysler has been living on $4 billion in government aid since the beginning of the year.
The government says new U.S. home sales dipped slightly last month, but still beat expectations as builders start to see long-awaited encouraging signs about the housing market. The Commerce Department said that sales fell 0.6 per cent in March to a seasonally adjusted annual rate of 356,000 from an upwardly revised February rate of 358,000. February's results were adjusted upward by more than six per cent. March's results exceeded the expectations of economists surveyed by Thomson Reuters who expected a sales pace of 340,000 units. Sales were still down nearly 31 per cent from March 2008.
Demand for big-ticket manufactured goods fell less than expected in March, raising hopes that the long slide in manufacturing is nearing an end. The Commerce Department says orders for durable goods dropped 0.8 per cent last Month — about half the 1.5 per cent decline that economists expected. A rise in orders for commercial and military aircraft helped cushion weakness elsewhere. The small drop followed a 2.1 per cent increase in orders in February. That was the first increase after six straight monthly declines, but also was revised down from the 3.5 per cent gain originally reported.
The Metropolitan Transit Authority of Harris County has hired Parsons Transportation Group for the next extensions to Houston's light rail system. A North line, an East End line, a Southeast line and an Uptown line are planned. The $1.5 billion construction contract covers designing, building, operating and maintaining the four lines. Parsons will lead the Houston Rapid Transit Joint Venture, which includes California-based Granite Construction and Stacy and Witbeck, as well as Fort Worth-based Kiewit Texas Construction. Metro says it will spend $632 million on the initial phase, which will create 25,000 jobs. But some 60,000 direct and indirect jobs are estimated to be generated before the four new lines are completed. Local and minority business owners will receive $335 million in contract work.
The Southwest Regional Office of the Bureau of Labor Statistics March report on industry employment indicates Houston registered a second consecutive period of annual job losses. In the past 12 months, Houston lost 14,400 jobs—an employment decline of 0.6 per cent. But that's better than other metro areas surveyed. National employment fell 3.6 per cent in that period. Declines were registered in more than half of the local industry sectors. Annual gains were recorded by government, the energy industry, educational and health services. But growth in the energy industry turned negative last month.
A new Nielsen Claritas study indicates that higher-income households have been proportionately hit harder by job losses and the housing and credit crisis. Upscale households—those earning upwards of $100,000 a year—have seen their overdue credit card balances increase by 40 per cent, or more than $2,500 per household. Households with more modest incomes—less than $50,000—have seen an increase of just 14 per cent.
Finance ministers from around the world are gathering in Washington for three days of talks. They're seeking to resolve differences over the best approach to take to combat the current economic slide. The heads of the International Monetary Fund and World Bank are pledging new resources to fight the worst global downturn since the Great Depression. They're also warning the crisis is far from over. IMF Managing Director Dominique Strauss-Kahn says the world economy could recover in the first half of 2010 if the right policies are put in place.
The Federal Reserve says the government is prepared to rescue any of the banks that underwent stress tests and were deemed vulnerable if the recession worsened sharply. The Fed says the 19 companies that hold one-half of the loans in the U.S. banking system won't be allowed to fail — even if they fared poorly on the stress tests. The tests are intended to measure whether banks have enough capital to withstand losses on mortgages and other assets if unemployment rises and home prices fall further. Investors had feared the tests would highlight some banks' vulnerability to failure.
Texans who fall behind on their mortgage payments would get more time to try to save their homes under legislation approved by the Texas Senate. Under current law, Texas homeowners have just 20 days to cure a loan default before lenders foreclose on them. It's one of the shortest foreclosure notice periods in country. The bill approved, a top priority of Attorney General Greg Abbott, would extend that period to 45 days. The bill passed unanimously and now moves to the state House.
The Rainforest Pyramid reopens in Galveston's Moody Gardens tomorrow, after suffering significant flood damage cause by Hurricane Ike on September 13th. The structure features tropical plants from Africa, Asia and the Americas, along with colorful macaws, turtles and freshwater fish.
Macy's in Deerbrook Mall is hiring for sales and support positions, including management. The store reopens this fall after repairs from Hurricane Ike damage. The store plans to hire more than 150, mainly through online applications.
Delta Air Lines> says it'll begin flights to and from Dallas Love Field this summer. The move will put the world's largest airline operator head-to-head against Dallas-based Southwest Airlines, which is the airport's dominant carrier. To meet legal restrictions at Love Field, Delta will operate three daily nonstop flights between Dallas and Memphis with 50-seat regional jets. From Delta's Memphis hub, passengers could connect to flights to about 90 other locations. Federal law limits nonstop flights from Love Field to states far from Texas, including Tennessee, but there's an exception for planes with 56 or fewer seats. Atlanta-based Delta says the service would start July 6th and be operated by Pinnacle Airlines under the Delta Connection name. Delta affiliates already offer three daily flights to Memphis from Dallas-Fort Worth International Airport. Delta offered flights on subsidiary Atlantic Southeast at Love Field several years ago but pulled out in 2003. It also greatly reduced the number of flights at DFW, where Fort Worth-based American Airlines is dominant.