Friday PM July 10th, 2009
by: Ed Mayberry, July 10, 2009 4:07:42 pm
The head of the revamped General Motors says now that it's out of bankruptcy, the company will make money and repay government loans faster than required. CEO Fritz Henderson says the new GM will also build more cars and trucks that consumers want and launch them faster than in the past. And he says as part of a new focus on customers, GM will team up with eBay to experiment with auctioning vehicles online. Henderson says GM completed its 40-day stay under court supervision far faster than anyone thought it could. And he says it will repay about $50 billion in government loans ahead of a 2015 deadline. The bulk of GM's assets have been transferred to a company controlled by the U.S. government. The new company is now free of its former debt and burdensome contracts, but it's still dealing with the worst sales slump in a quarter-century.
President Barack Obama says the world has apparently averted economic collapse, but a lasting recovery is still “a ways off.” He's blaming the meltdown on the “reckless actions” of a few. And he's crediting actions by world leaders with staving off global financial disaster. But Obama says world leaders must continue working to restore economic growth. He's urging them to unite behind a global recovery plan that includes stricter financial regulation and sustained stimulus spending. He spoke in Italy as this week's Group of Eight economic summit wrapped up.
Treasury Secretary Timothy Geithner says the administration's plan to stimulate the economy by spending billions on construction and other local projects is on the “expected path.” Geithner defended the stimulus plan after Florida Republican Representative Bill Posey asked where the government's plan went wrong, because unemployment remains high. Geithner says unemployment was an inescapable element of the recession. Still, he added, there has been substantial progress against what he called “the worst recession globally we've seen in generations.” Geithner is testifying before the House Financial Services Committee and House Agriculture Committee.
Shriners say they will keep a presence in all 22 cities where they now provide care for children, but some of the facilities may be downgraded to outpatient surgical centers. The Shriners had considered closing facilities in Galveston, Shreveport and four other cities, eliminating a total of 225 beds. The Galveston hospital closed after Hurricane Ike last September. Final renovations and inspections are necessary before it can reopen. But new Shriners Hospitals for Children CEO Douglas Maxwell says it may be possible to open in as little as month if the hospital has the staff it needs. Shriners Hospitals for Children will also begin accepting insurance for patients who have it. Traditionally, the Shriners have provided care free of charge and without billing insurance companies, but Maxwell says the nonprofit needs to change the way it does business. The rising cost of medicine and its shrinking endowment forced the Shriners this week to look at revamping its 22-hospital system to remain solvent.
The retail cost of gasoline across Texas has fallen to $2.41 a gallon. AAA Texas reports the average price at the pump was down eight cents from one week earlier. Gasoline prices also tumbled nationwide, settling at $2.56, compared to $2.63 last Friday. El Paso had the most expensive gasoline in the latest statewide survey, at $2.53 a gallon. Fort Worth had the cheapest gasoline, at $2.36. Oil prices slid below $60 a barrel Friday as investors braced for company earnings reports next week. Texas AAA spokesman Dan Ronan says demand for gasoline remains flat by historical levels.
Earlier this year the Texas Workforce Commission warned that the fund that covers unemployment benefits in Texas would dip below mandated levels by October. With state unemployment above seven per cent, that has already happened. Shelley Kofler reports.
Kofler: The state is supposed to keep $850 million in the fund. At the end of May it had just $617 million. Ann Hatchitt of the Workforce Commission says the state has requested a $160 million dollar interest-free loan from the federal government for the month of July.
“We have until the end of December 2010 to repay any money we borrow interest free. So that’s an excellent option and that’s the first option we are going to take.”
Hatchitt says the state could be making similar loan requests each month. She says the state may have to sell bonds to repay the loans. The insurance taxes paid into the fund by employers could also be raised.
The Senate Appropriations Committee has approved $5.3 million for a flood control project in Harris County. Senator Kay Bailey Hutchison also announced that $15.063 million was secured for the operations and maintenance of the Houston Ship Channel. Some $26.046 million has been approved by the committee for improvements to the Gulf Intracoastal Waterway. And $2 million has been secured for the University of Houston National Wind Energy Center. All appropriations now go to the Senate.
Memorial Hermann Hospital, Methodist Health Centers and the cities of Houston and La Porte will receive more than $12 million in grants to help in Hurricane Ike recovery, according to the Federal Emergency Management Agency. Thwe funds are for debris removal and permanent repairs. Once FEMA reimburses the state of Texas, further management of the funds is the responsibility of the state.
The Transportation Department is giving Continental Airlines immunity from antitrust laws to work closely with other airlines on international service. The department said it would let Continental participate in the Star Alliance of airlines, including United, and would approve a joint venture among four of the carriers. Antitrust immunity lets airlines work together as if they were a single carrier. They can cooperate in setting prices and schedules on routes covered by the grant of immunity. Transportation Secretary Ray LaHood says the decision will help consumers and save jobs in the airline industry. The Justice Department had objected to the broad scope of Continental's immunity request.
The Metropolitan Transit Authority of Harris County breaks ground on the next phase of MetroRail next week. Construction is beginning on Metro’s North rail corridor to connect the Red Line at the University of Houston-Downtown to the Northline station on Fulton and Deerfield near Northline Mall. Construction will also begin on the Southeast corridor near Interstate 45 downtown and ending near the proposed Palm Center Transit Center on Griggs. Work continues on the East End corridor that will connect to the Southeast line at Bastrop and end at the Magnolia Transit Center on Harrisburg and 70th Street.
The Senate has dealt a blow to the drug lobby. It's voted to permit people in the United States to order lower-cost drugs from Canada over the Internet. The prescription drug plan by Louisiana Republican David Vitter passed the Senate by a 55-36 vote. It was added to a $42.9-billion bill funding the Homeland Security Department. The Senate then approved the Homeland Security measure by an 84-6 vote Thursday night. Critics say Vitter's amendment would open a gaping loophole that would expose people to internet scams and unsafe drugs. But the allure of importing cheaper U.S.-made drugs from other countries has long had a pull on lawmakers. But so too has the drug lobby, which has always defeated attempts to allow consumers widespread access to “re-imported” drugs.
North Dakota's Supreme Court says an energy company did not shortchange a group of more than 300 landowners on their natural gas royalty payments. The high court unanimously upheld a district judge's ruling in favor of Petro-Hunt of Dallas. A group of property owners disputed the company's method of figuring royalty payments from natural gas it produced from beneath their land. Petro-Hunt subtracted its costs for processing the gas before it made royalty payments. The landowners argued the company should have absorbed those costs. The Supreme Court also rejected arguments that Petro-Hunt should have had to pay royalties on natural gas it used to operate some storage facilities.
7-Eleven riding wants to ride a wave of public outrage over credit card practices to show merchants also are victims of the industry. The Dallas-based convenience store chain announced a petition this week to give small businesses more power to negotiate the fees they must pay whenever a customer uses a credit or debit card. 7-Eleven says more than 6,000 of its franchisees plan to collect one million customer signatures to deliver to Congress this fall. George Clift owns a 7-Eleven in McKinney. He says he's keeping the petition on his store counter and is asking customers to sign whenever they pay with plastic. Clift says he pays about $28,000 in credit card fees each year, which says is “a huge number for a small businessman.” Still, Visa and Mastercard warn that if such fees were lowered, banks would need to make up any lost revenue with higher credit and debit card fees.
Chevron says second-quarter earnings from pumping oil will be improved from the first three months of the year, when low commodity prices contributed to one of the worst earnings periods in years for oil companies. But the nation's second-largest oil company said that earnings from refining and selling fuel will be far lower versus the first quarter. Chevron said it was hurt by significantly lower refining margins in the U.S. On a year-over-year basis, Chevron's overall second-quarter results are forecast to be much lower than those for 2008. Benchmark crude soared to record levels near $150 a barrel one year ago before plunging below $35 this year.
The Houston Livestock Show and Rodeo awarded 70 Texas members of the Future Farmers Association with four-year, $15,000 college scholarships totaling $1,050,000 during the Texas FFA state convention in Dallas. In 2009, the Show contributed more than $15.9 million to scholarships, research, endowments, calf scramble participants and junior show exhibitors. Since 1932, the Show has contributed more than $235 million to Texas youth. The 2010 rodeo is set for March 2nd through the 21st.