Thursday AM August 16th, 2007
by: Ed Mayberry, August 16, 2007 5:08:00 am
The German chemical giant BASF has won a $170 million verdict in a New Jersey court against one of its American suppliers. BASF had sued Houston-based Lyondell Chemical in a New Jersey state court, alleging Lyondell charged it more than it should have for propylene oxide for eight years. The lawsuit stemmed from a 1998 agreement between BASF and Lyondell that called for Lyondell to deliver propylene oxide to the German company for 13 years for no more than the lowest price. BASF argued that Lyondell had sold the compound to other customers at lower prices. It's not immediately known if Lyondell planned to appeal the decision, which was handed down earlier this week. Propylene oxide is used to make polyurethane plastics.
Chevron has split its oil and natural gas exploration and production operations into four divisions. Two will have headquarters in Houston—Chevron North America and Chevron Africa and Latin America. The Asia Pacific division will be based in San Ramon, California, and operations for Asia, Europe and the Middle East will be based in London.
Houston's light rail system has won federal funding in a transportation appropriations bill. Ten million dollars has been designated for Metro Phase II. Congressman Gene Green says including the money in the bill is a step toward securing regular funding for Houston's light rail. Green says Houston is the fourth-largest city in the country, but ranks 11th in accommodation of light rail riders, beyond St. Louis and Dallas.
American Airlines plans to rehire 460 flight attendants laid off when the Fort Worth-based airline lost money after the 2001 terror attacks. American said the recalls would address staffing needs and offset expected attrition for the rest of the year. The flight attendants worked for TWA, which American parent AMR Corporation bought out of bankruptcy in early 2001. The union representing American's flight attendants put their TWA counterparts at the bottom of the seniority ladder. That meant the TWA workers were first to lose their jobs as AMR slashed thousands of jobs. American announced earlier this year it would rehire 200 flight attendants, many of them former TWA employees. Since 2003, the airline has contacted more than 1,900 attendants about returning to work. In January, American began rehiring a smaller number of pilots, the first recalls since 2001.
Midwest Air Group's board will discuss its options for a sale when it meets in Milwaukee. The Milwaukee-based company says there's no guarantee the board will reach a final decision at the meeting or enter into a written agreement. The company had expected to enter into an agreement with Fort Worth-based private investment firm TPG Capital. But that was delayed after Orlando-based Airtran Holdings announced that they were reviving their hostile takeover effort. Airtran's latest offer stands at $16.25 a share in cash and stock, or $445 million. TPG Capital had offered $16 a share in cash, or $400 million. TPG Capital's backers on the deal include Northwest Airlines of Minneapolis.
DirecTV will market broadband over powerlines, a service provided by Current Group, to consumers in the Dallas/Fort Worth area. BPL, as the service is known, lets customers access the Internet through modems plugged into power outlets. The service is expected to cover about 1.8 million homes and businesses over the next several years. The agreement gives DirecTV the ability to add other geographic markets as Current Group builds its network.
Houston-based Energy Solutions International is working with Sui Northern Gas Pipelines in Pakistan to conduct a pipeline and compressor optimization study. The company will help review the capacity and effectiveness of Sui Northern's transmission system, and will train personnel to use Energy Solutions' software for future optimization studies.
Baseline Oil & Gas has agreed to a purchase-and-sale agreement from DSX Energy for $100 million, according to the Houston Business Journal. The 12 wells are southwest of Houston. Baseline will own a 100 percent working interest and will operate the properties.
A study by Houston investor relations and marketing firm Origin rates the effectiveness of annual reports presented by energy companies, according to the Houston Business Journal. Origin analyzed 170 annual reports from energy firms to disclose the ten best practices. Ninety-one percent of annual reports include more than the minimum required financial information. Art on 43 percent of the reports consisted of either a white truck, a hard hat with logo and an oil or gas swell in the sunset, or close-ups of a handshake. Only one in five companies included a distinct section on environmental responsibility.
Industrial production grew last month, but at a slower rate than in June. The Federal Reserve says output was up just three-tenths percent, held back by a big drop in utilities. Production was up by a revised six-tenths percent the month before. The Fed also says the nation's factories, mines and utilities were operating at 81.9 percent of capacity--up a tick from the June level.
The latest inflation snapshot includes some hopeful signs. With the help of a big drop in the cost of gasoline last month, consumer prices rose at their slowest level in eight months--climbing just one-tenth of one percent. The reading on core inflation was also mild. When you don't count energy and food, prices rose by two-tenths of a point, just like in June. Both increases were pretty much what Wall Street expected. And it should provide some reassurance for investors who are hoping that declining inflation pressures will give the fed some room to cut interest rates. That could be a necessary step to deal with the recent turbulence in stock and credit markets. Last week, after its most recent policy-setting meeting, the Fed continued to state that its biggest worry was that inflation pressures won't ease. But hopes for an interest rate cut have been growing since then. So far this year, consumer prices have been rising at a seasonally adjusted annual rate of 4.5 percent.
A review finds at least 15 people who worked at or lived near a west Dallas vermiculite plant suffer from symptoms of asbestos-related illnesses. Doctors at UT Health Center at Tyler have so far analyzed about 250 of 421 chest x-rays done this summer on ex-employees of the Texas Vermiculite Plant--plus their families. Neighbors and former students at nearby schools also had x-rays. Fifteen people, or about six percent of those so far analyzed, show signs of asbestos-related illnesses. A $250,000 state grant covers the cost of the x-rays. W.R. Grace operated the plant from 1953 to 1992 before it was demolished between 2001 and 2002. Human exposure to the fibers increases the risk of lung cancer and other disorders. Health officials screened 25 people with chest x-rays in May. Eight showed signs of asbestos-related disease.
Whole Foods Market spokeswoman Kate Lowery says the company has no idea how many stores it would close if its proposed purchase of Wild Oats goes through. But federal regulators say the Austin-based company plans to close 30 Wild Oats stores that compete with its own locations. Federal Trade Commission lawyers accidentally released trade secrets in documents related to their lawsuit to block Whole Foods from acquiring Wild Oats. Redacted copies were later released. The Feds object to the proposed $565 million acquisition on antitrust grounds. Among other details, the FTC revealed how Whole Foods negotiates with suppliers to drive up costs for Wal-Mart. Regulators also discussed the company's closely held marketing strategies. The filing says one of the most important factors in placing a new Whole Foods store is college graduate density. The FTC says the opening of a Whole Foods store can cut revenue 30 percent or more in nearby Wild Oats stores while closing those would increase Whole Foods revenue by as much as 90 percent. FTC spokesman Mitchell Katz declined to comment. A federal judge in Washington is expected to rule soon on an injunction that has derailed the acquisition.