Wednesday PM September 9th, 2009

Sealy-based military truck manufacturer fights for contract renewal…Federal Reserve says most regions reporting improved economic activity…North Carolina jet maintenance firm cuts jobs after contract with Continental Airlines…

The U.S. Government Accountability Office is being asked to review the Army's decision to award a contract for light military trucks to Oshkosh Corporation in Wisconsin. The vehicles have been made at a plant in Sealy on I-10 that is now owned by BAE Systems. That firm says the Army did not properly evaluate the proposals in a best-value competition against a set of stated criteria. The company's John Suttle says the sudden loss of the contract could cost more than 3,000 Texas jobs.

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"And that's just our employees. This doesn't count the subcontractors that we have. I mean, we have, for example, drive train manufacturers in North Carolina. There are 461 jobs associated with that. We have another 60-some-odd jobs in our armoring facility in Monroe, North Carolina, and that's just North Carolina. Michigan and Ohio, significant numbers of jobs there, as well. In regard to economic impact in the Houston area, there's about a half a billion dollars worth of revenue directly associated with the Houston area if we don't get this contract renewed."

The so-called Family of Medium Tactical Vehicles have been manufactured at the Sealy plant since 1992.

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"It's actually a series of trucks that are part of the Family of Medium Tactical Vehicles, commonly referred to as the FMTV. There's several different variants. You know, there are utility trucks, special-purpose vehicles--you name it, we have one of these vehicles for just about every use that the military has for the medium truck. And we've continued to refine this over the past 17 years. The latest version includes state-of-the-art cab armoring. These vehicles are in service in Iraq and Afghanistan as we speak."

The Army has issued a 100-day stop-work order to Oshkosh until the GAO has the chance to review.


A new government survey finds the vast majority of the country reporting economic activity is stabilizing or improving, as the worst recession since the 1930s appears to be over. The Federal Reserve's snapshot of economic conditions backs predictions by Fed Chairman Ben Bernanke and most other analysts that the economy has started to grow again in the current quarter. In the new survey, all but one of the Fed's 12 regions indicated that economic activity was "stable," showed "signs of stabilization" or had "firmed." The one exception was the St. Louis region, which continued to report that the pace of decline in economic activity appeared to be "moderating."


The state securities commissioner says Bank of America's Merrill Lynch unit will pay up to $26.5 million. That's a national settlement stemming from a Texas claim that the brokerage allowed unregistered salespeople to sell securities. Texas will get $1.6 million from the settlement. The Texas State Securities Board led a task force that investigated what Commissioner Denise Voigt Crawford calls the broker's "`failure to supervise its client associates." The amount that other states will receive wasn't disclosed in the September 4th consent order. Besides Texas, the multi-state task force included Colorado, Arizona, Missouri, Vermont, New Hampshire and Delaware. Crawford said the task force members suspect similar registration issues may exist at other financial services firms.


Saudi Arabia and Kuwait oil ministers say OPEC is not expected to cut production quotas, as the oil producer group meets to take stock of a market that has seen crude prices climb amid signs of a global economic recovery. The comments by Saudi Arabia's Ali Naimi and Kuwait's Sheik Ahmed al Abullah al Sabah offered the clearest indications yet that the Organization of Petroleum Exporting Countries was willing to leave existing output targets unchanged, despite a world market awash in crude. "All I know is economic growth is helping prices," Naimi told reporters as ministers from the 12-member bloc kicked off their meeting. OPEC ministers have said they will focus on boosting compliance, which has been waning as prices have climbed to over $70 per barrel.


A Harvard University study has found that many American businesses are unprepared to deal with widespread employee absenteeism during a swine flu outbreak. The Harvard School of Public Health study found that two-thirds of the more than 1,000 businesses surveyed nationwide said they could not maintain normal operations if half their workers were out for two weeks. Four out of every five expect severe problems if half their workers are out for a month. Robert Blendon, a professor of health policy and project leader, says companies need to change sick leave policies to deal with a possible flu pandemic. Associated Industries of Massachusetts says the organization is urging member companies to train workers to do the jobs of absent colleagues, and let employees work from home.


The Obama administration's mortgage relief program is gaining traction. Nearly one in five eligible homeowners have been offered help so far, a government report says. The plan, launched with great fanfare in March, had been slow to get going, but more than 571,000 loan modification offers, or 19 per cent, have been sent to nearly three million eligible homeowners. That's up from 15 per cent at the end of July. More then 360,000 borrowers, or 12 per cent of those eligible, have signed up for three-month trials, according to the Treasury Department report. The modifications reduce their monthly payments to more affordable levels. Treasury says 48 mortgage companies are now involved in the program, up from 38 in July. Nevertheless, housing advocates say getting approved for a modification is a time-consuming, bureaucratic nightmare. Many borrowers, are also wary of signing up because they are worried their payment will rise after the three-month trial period is over.


A North Carolina company has cut up to two-thirds of its 300-member work force just weeks after losing a major maintenance contract with Continental Airlines. The Winston-Salem Journal reports that Pace Airlines cut between 125 and 215 employees at its maintenance operation in Winston-Salem. The company had about 300 local full- and part-time workers. Owner William Rodgers would not say how many jobs were cut. The newspaper reported last week that pace lost a contract to perform heavy-maintenance checks on some of Continental's 737 aircraft. The Winston-Salem company had landed the deal in December 2007. The charter airline and maintenance company also has operations in Atlantic City, New Jersey and Dallas.


Tilman Fertitta is proposing spinning off his Saltgrass Steak House brand in another bid to take his Landry's Restaurants private. Fertitta is majority shareholder in Landry's, and wants to acquire all outstanding shares. In exchange, current Landry's stockholders would receive shares of Saltgrass.


A Lone Star Legal Aid attorney specializing in contractor fraud will answer questions and make recommendations on selecting a reputable home repair contractor tomorrow evening at Congregation Beth Jacob on Avenue K in Galveston. Lone Star Legal Aid provide free civil legal assistance to low-income individuals and families.


The Dallas Stars are expanding the notion of charging more for games against better opponents. The Stars announced a flexible pricing plan on upper-level seats that will include criteria such as when the ticket is purchased and where the teams are in the standings. The system designed by Austin-based software company Qcue is likened to airline pricing. Depending on traditional factors such as demand, a ticket could be less expensive weeks before a game than it will be days in advance. Single-game tickets go on sale at 10 a.m. Saturday. At launch, the most expensive upper-level seats will range from $36 to $60. The cheapest will be $14 to $15.


Bio photo of Ed Mayberry

Ed Mayberry

Local Anchor, All Things Considered

Ed Mayberry has worked in radio since 1971, with many of those years spent on the rock 'n' roll disc jockey side of the business...