Thursday December15th, 2005
by: Ed Mayberry, December 15, 2005 5:12:00 am
A criminal charge was formally dropped this week against David Duncan, according to the Houston Chronicle. Duncan is the former Arthur Andersen accounting partner who pleaded guilty to an obstruction of justice charge with the shredding of Enron-related documents. The Enron Task Force is allowing Duncan to withdraw his plea and to dismiss the charge against him when it decided last month not to retry the firm on its conviction that was overturned by the Supreme Court. Prosecutors can still recharge Duncan. Ken Lay's attorney argues the threat of new charges will keep Duncan from testifying for Lay and his co-defendants in their January trial.
The Enron plan to distribute shares of its Portland General Electric utility to creditors has been approved by Oregon state regulators. That paves the way for the utility to become a stand-alone company. The move comes four years after Enron declared bankruptcy.
The Yukos Oil Board of Directors says Bruce Misamore, the company's chief financial officer, tendered his resignation earlier this week in Moscow. Yukos says Misamore, "despite attacks on Yukos, its personnel and their families, ensured that the company did not fail in its duties to stakeholders in and outside of Russia." Misamore says "the Yukos situation" makes it impossible for him to represent the company or fulfill the financial director's obligations efficiently. Yukos has been crushed under billions of dollars of back taxes that critics claim were politically motivated.
Applications for unemployment benefits rose by 1,000 last week--to 329,000. The Labor Department says there were 2,500 jobless claims in the latest week related to the September hurricanes, bringing total for hurricane-related claims to 602,200. Additionally, claims for the week that ended December 3rd were revised to show an increase of 7,000 rather than the 6,000 reported initially.
Online job recruitment activity in the Houston area rose sharply in November, according to the MonsterLocal Employment Index. That's the largest increase among the 28 U.S. markets tracked by the index. During November, online job demand increased in 16 occupational categories. Only one category--healthcare practitioners and technical--declined slightly, while demand for legal occupations remain unchanged. Houston has the most significant spike in online recruitment activity for the month of November out of all the U.S. markets tracked.
Workers say they're more optimistic about employment as the New Year approaches. The Hudson staffing and outsourcing firm found that optimism among the workers surveyed is growing after a difficult year. The Hudson Employment Index Average for the year dropped to 101.3 through November, from 106.2 a year ago. But Hudson-North America Executive Vice President Steve Wolfe says there was an uptick this month, reflecting a more optimistic view heading into the new year. The survey found 47 percent of the respondents saying they believe their employment prospects will be better in 2006 than they were this year. And 63 percent expect to earn more. The survey found the most job satisfaction in accounting and finance, with information technology not far behind. The least satisfied workers were in the beleaguered manufacturing sector.
Business leaders have a generally positive outlook for sales, investment and hiring in the coming months. The Business Roundtable, an association of leading chief executives, surveyed 117 CEO's at some of the nation's largest corporations. It found that 87 percent of the respondents expect higher sales over the next six months, with only five percent projecting lower sales. Fifty-six percent said they'll spend more on investment in the first half of 2006, with 40 percent expecting no change in spending levels and only five percent projecting declines. Forty percent said they plan to hire more workers, with 41 percent expecting no change in staffing levels and 19 percent expecting job cuts. For a third-straight year, the CEO's cited health care costs as their biggest cost concern, followed by energy and litigation costs.
It seems a lot more people had trouble making their mortgage payments in the third quarter, largely due to Hurricane Katrina. The Mortgage Bankers Association says the percentage of mortgage payments that were 30 or more days past due for all loans surveyed climbed to 4.44 percent in the July-to-September quarter, as the hurricane wreaked havoc on Gulf Coast communities. The delinquency rate was up considerably from the prior quarter and was the highest registered in a year. MBA Chief Economist Doug Duncan says Katrina "obviously has had a major effect on the local housing markets in Louisiana and Mississippi.''
Some Louisiana hurricane evacuees who ended up in Texas have been recognized in San Antonio for their hard work at learning new skills. Joe Burton was a cemetery groundskeeper in New Orleans. Burton was one of 17 Katrina and two Rita evacuees who yesterday received certificates for being trained in logistics or as a nurse's aide. Burton, each weekday for two months, made a four-hour roundtrip on four San Antonio buses so he could learn how to efficiently get products from one place to another. The training was provided by Alamo Worksource, which is the state-affiliated jobs-training center for San Antonio. The funding came out of a $3 million grant from the Texas Workforce Commission.
About 13,000 Texas hotel rooms are still serving as interim homes for hurricane evacuees. The update came from the Federal Emergency Management Agency. Katrina hit the Gulf Coast in late August. Rita made landfall September 24th near Sabine Pass. A FEMA official says some evacuees move out of hotels to new arrangements, then others move in after wearing out their welcomes at the homes of relatives or friends. The feds say some evacuees are arriving from other states, while others are moving from hotel to hotel in an attempt to avoid government workers and keep their accommodations. FEMA official Lee Shannon says they're working with different field offices to figure out the availability of rooms and locations.
Consumer prices posted their biggest drop in more than 56 years last month. The Labor Department reports its Consumer Price Index plunged six-tenths percent in November, its biggest decline since July of 1949. The slide was led by a record eight-percent decline in the cost of energy. The Core Index, which strips out the volatile food and energy segments, rose two-tenths percent, matching the October increase. The overall drop in consumer prices was larger than analysts had expected, but the Core rate came in on target.
The nation's factories, mines and utilities continued to bounce back from the Gulf Coast hurricanes last month. The Federal Reserve reports industrial production was up seven-tenths percent in November, following a revised 1.3-percent advance in October. That gain had previously estimated at nine-tenths percent. In addition, U.S. industry was operating at 80.2 percent of capacity last month--up four-tenths percent from October and the highest level since August.
San Antonio-based Valero Energy says it has scrapped plans for a joint venture with Encana Corporation because of the cost of retooling a Valero refinery in Ohio. Under the proposal, the Canadian Encana would have supplied heavy crude oil from Western Canada to a 170,000-barrel per day Valero refinery in Lima, Ohio. Valero's chief operating officer, Bill Klesse, says profits from the plan would have been insufficient once Valero spent $2 billion to convert the refinery. Valero said it still plans to invest more than $400 million in the Lima refinery. It acquired Lima and three other refineries in September with its $8 billion purchase of Premcor. Valero's the nation's largest refiner and owns and operates 18 refineries in the United States, Canada and the Caribbean. It has about 4,700 gas station-convenience stores. Encana is among the largest oil independent oil and gas producers in North America.
A small Exxon Mobil shareholder has asked the board to reconsider executive pay. That's after company filings indicate outgoing Chairman and Chief Executive Lee Raymond received more than $81 million last year--mostly by exercising stock options. Boston-based North Star Asset Management holds 14,700 of Exxon Mobil's 6.3 billion shares. It sent its letter to the board on the last day for shareholders to file resolutions for the oil giant's annual meeting next May. North Star says Irving-based Exxon Mobil had long paid out "exorbitant compensation'' to executives. North Star describes itself as a socially responsible investor. The compensation committee of Exxon Mobil's board has said it was appropriate compared to those of CEO's at other U.S. oil companies and major corporations.
The New York Times and the Wall Street Journal report Quiznos has put itself up for sale. According to the papers, the nation's second-largest sandwich chain could bring as much as $2 billion.
Pier One Imports posted a loss in the third quarter as sales fell and operating expenses rose. Sales during the quarter at stores open at least a year were down 6.5 percent, while overall sales fell two percent. And it doesn't appear things are about to get any better. The company says it'll probably miss its forecast for sales during December because of what are termed "unpredictable sales trends since the Thanksgiving weekend and the heavy promotional environment.'' Pier One says unless things turn around in the next two weeks, sales will likely be down from year-ago levels.
Blockbuster stores in several states are quietly resuming late fees for customers who keep movies too long. Many Arkansas stores resumed the late fees November 21st, and charges will apply again soon at various stores in Alabama, Mississippi and Tennessee. They're rejecting the Dallas-based video rental chain's national advertising of no late fees because they can no longer keep popular movies on their shelves. A Blockbuster spokesman says the decision to cancel the policy is being made by independent franchises. He says about 4,600 company-owned locations will continue the program. Blockbuster last winter said it would drop late fees. But its fine print said the company would charge consumers if they kept the movies too long, then charge a $1.25 restocking fee when the movies were returned. In March, Blockbuster settled complaints heard in 47 states and authorized refunds for offended customers.