Tuesday AM October 9th, 2007
by: Ed Mayberry, October 9, 2007 5:10:00 am
American Airlines is profitable again after racking up $8 billion in losses since 2001. Now the Fort Worth-based carrier faces a three-front battle to limit labor costs that are among the highest in the industry. The three unions representing American's employees want to make up for double-digit wage and benefit cuts back in 2003--when the company was on the brink of bankruptcy. They argue that their sacrifices saved the nation's largest airline and they deserve to be rewarded now with big pay raises. But airline executives say not so fast. This week, American and the ground workers union broke off talks on a limited contract extension and pay increase. They'll resume negotiations in November. And last week, American offered pilots pay increases--if they fly more hours. The proposal would not raise basic wage rates. Leaders of the pilots' union declined to be interviewed about the proposal. A union spokesman says pilots have "high aspirations'' for the current round of bargaining, which is expected to run until at least next spring.
The United Auto Workers has set a deadline of 11 a.m. Wednesday to reach a contract agreement with Chrysler. The deadline--confirmed by a Chrysler spokeswoman--gives bargainers less than 48 hours until a strike could be called. Bargainers have returned to the table after spending most of the weekend in negotiations. The spokeswoman says that just because a deadline has been set doesn't mean a strike will happen. She says the union also could extend the contract hour-by-hour as negotiations continue.
Union members at the General Motors truck assembly plant in Arlington have voted for the tentative labor agreement between their union and the company. Production workers backed the proposal with 63 percent of the vote. Only 53 percent of skilled tradesmen supported it. Voting concluded last night. Shop chairman Dwayne Humphries says union members understand the serious challenges facing GM. The new contract was reached last month following a two-day nationwide strike by UAW workers. The tentative contract includes a condition that the Arlington plant will continue to build the current generation of full-size sport utility vehicles through 2012. It also would be assigned a new truck or SUV to produce beginning in 2013.
The outcome of a dispute before the Supreme Court today will help determine the integrity of the financial system, according to Robert Van Der Volgen, whose pension fund invests retirement savings of 750,000 teachers. He's a lawyer at the California State Teachers Retirement System. The court is considering third-party liability in fraud cases, which Van Der Volgen says are often the only wealthy sources left to tap after corporate frauds unravel. But industry lobbyists argue that regulators already have the authority to punish lawbreakers. The court's decision could also affect a lawsuit that Enron shareholders filed against Credit Suisse, Merrill Lynch and other banks that allegedly helped Enron disguise its financial problems. A lower court ruled that third-party investors were not liable because they made no public statements that could mislead investors.
Mozambique's government plans to develop a $1.1 billion steel project that was cancelled after Enron's collapse, according to Reuters. Mozambique's Industry and Trade director says a feasibility study will be finished next year. Construction could begin outside the capital city Maputo shortly afterwards, and the project could be operational by 2011. Enron cancelled plans to invest in the Maputo Iron and Steel Project in 2002. Enron had a 50 percent stake in the project.
A consumer group predicts that home heating bills will rise dramatically this winter for homeowners using heating oil. It says those depending on natural gas should see more stable costs. The National Energy Assistance Directors Association says average spending on home heating this winter is forecast to rise by 10.5 percent, on average. That will be driven by big increases in heating oil prices. The group represents state-run low income energy assistance programs. Heating oil, used predominantly in the northeast, is derived from crude oil. Crude is up about 33 percent from around from a year ago. The average total heating oil bill for the winter months is projected to rise by 28 percent from a year ago. Release of the report comes ahead of today's official forecast from the Energy Department.
ExxonMobil Chemical has created a new specialty compounds and composites business to focus on the development, production and marketing of engineered polyolefin compounds, according to the Houston Business Journal. The new business in ExxonMobil Chemical's polymers group, includes a new line of ExxonMobil performance polyolefins for automotive applications, ranging from soft and flexible compounds to reinforced composites.
Houston-based MicroSeismic has established a representative office in Dubai. MicroSeismic is a surface-based seismic monitoring and passive seismic imaging company.
Houston-based BMC Software has acquired Virginia-based Emprisa Networks, according to the Houston Business Journal. Emprisa is a smart network compliance company that, prior to the acquisition, was a BMC technology alliance and BMC marketzone partner.
Los Angeles-based Lowe Enterprises and Newport Beach, California-based Buchanan Street Partners have purchased 1900 West Loop South at San Felipe and West Loop from Transocean 3D/International. The Houston Business Journal says terms were not announced, however the Harris County Appraisal District lists the market value of the property at about $42 million. The property includes a six-story parking structure. The two buyers plan $1.5 million in upgrades top the 28-year-old structure.
The corrections company that lost its contract for running a juvenile prison in west Texas has had problems at other prisons in the state. The state closed the Coke County juvenile center last week and canceled its contract with GEO Group, which had operated the prison since 1994. Officials cited an ombudsman's report that described conditions including dirty bed sheets, feces-smeared cells and insects in the food. The center's 200 inmates were moved to other facilities. GEO spokesman Pablo Paez wasn't available for comment. In an earlier interview, he told the Dallas Morning News the company strives to provide quality services at its facilities. The newspaper said GEO has encountered problems at other facilities it runs in Texas. An Idaho inmate at the Dickens County prison in northwest Texas slashed his throat after being held for three months in a cold, moldy solitary cell with bloodstained bedding, according to court records. GEO settled a wrongful death case brought by the family of a female inmate at the Val Verde County facility. Plaintiffs alleged the inmate committed suicide after being raped and denied psychiatric care, according to court records. A jury ruled Wackenhut Corrections, which became GEO, destroyed evidence of an inmate's beating death at a Willacy County facility and returned a $47.5 million verdict against the company.