Wednesday AM April 2nd, 2008
by: Ed Mayberry, April 2, 2008 12:04:00 pm
U.S. manufacturing activity is still weakening as orders continue to erode and prices rise rapidly. The Institute for Supply Management said its manufacturing index registered 48.6 last month, compared with 48.3 in February. Readings below 50 indicate contraction, while those above 50 show growth. The latest reading was a bit stronger than in February and was roughly in line with expectations by Wall Street analysts surveyed by Thomson/IFR.
Construction spending fell again in February as home building tumbled for a record 24th straight month. The Commerce Department reported that overall construction activity dropped 0.3 percent in February, reflecting weakness not only in home building but also in nonresidential activity. Only government building projects showed a gain in February. Residential construction dropped by 0.9 percent in February. Residential activity has fallen every month since March 2006, a record period of declines that underscored the severe downturn that is going on in housing.
Houston ranks sixth in the nation for cost-competitiveness in doing business, according to a KPMG study. Houston places just under the national average with a cost index of 99.4, with the national average set at 100. The Dallas/Fort Worth area is at 97.3. The most expensive cities to do business are New York City and San Jose, California.
A Zogby poll finds only 28 percent of Americans believe the government's economic stimulus rebate plan will help boost the U.S. economy. Two in three likely voters question whether the checks will help, with 36 percent strongly disagreeing that the money will help boost the sagging economy. Democrats (83 %) and independents (70%) were more likely than Republicans to be skeptical. Doubts are stronger among younger voters. The poll also found that most Americans have misgivings about the government helping struggling investment companies. Two in three disagree with the idea of government help for investment companies suffering from bad mortgage investments.
The Houston Diversity Job Expo is set for today at the Westin Galleria Hotel. The free job expo introduces Texas jobseekers to employers in several career categories. Business attire is required for admission, and employers are taking resumes and interviewing on the spot. Companies on site include BP, Merck, Verizon Wireless, Denny's, Cox Radio, local ABC affiliate KTRK-TV, Anheuser-Busch and others.
The 2008 Offshore Technology Conference highlights the convention business scheduled in Houston during May. The event is set for May 5th through the 8th at Reliant Center, with attendees from more than 100 countries from around the globe. More than 67,000 exploration and production professionals are expected, with an economic impact of around $65.2 million. Thirteen other conventions, trade shows and other events round out May's convention business, according to the Greater Houston Convention and Visitors Bureau, with an expected economic impact of $86.9 million.
The union for American Airlines flight attendants is calling for company executives to defer their bonuses. The Association of Professional Flight Attendants is distributing tags to its 19,000 members that will hang just below each attendant's ID. The tags contain the words "decline'' on one side and "resign'' on the other. The union says if Fort Worth-based American's five senior executives don't agree by April 15th to defer their next bonuses--attendants will flip the tags and demand their resignations. American says its management compensation is market-based, similar to that of many U.S. businesses--including airlines. In 2003, the union approved $340 million in annual wage and benefit concessions to keep the nation's largest airline out of bankruptcy. Negotiations for a new contract are expected to begin in earnest in June.
Delta Air Lines is looking to get money to make up for the expensive cost of fuel. It is imposing new or higher fees on a host of travelers, including frequent fliers, passengers traveling with pets and people booking their tickets over the phone. Delta does not say how much revenue it expected from the fee changes, but the parent company of United Airlines said new luggage fees would generate more than $100 million annually. The industry has had mixed success with fare increases. A Delta spokeswoman says attempts to raise fares "have not been successful'' because of the need to be competitive.
American Airlines is offering the option of paying for tickets online using electronic checks, the carrier announced Tuesday. With the new option, customers can pay on the American Web site by entering account information, a home address and driver's license or state-issued ID number. Fort Worth-based American is the nation's largest airline.
From chicken nuggets to corn flakes, food prices at grocery stores and dinner tables could be headed even higher due to an anticipated drop in the corn supply. Farmers are cutting back on the land they're planting in corn this spring. The Agriculture Department predicts farmers will plant 86 million acres of corn this year. That would be down eight percent from last year, which was the highest since World War II. Corn prices have skyrocketed in recent years, almost tripling since 2005. And there are favorable prices for other crops, such as soybeans. Corn is ingrained in the U.S. food supply. Poultry, beef and pork companies use it to feed their animals. High fructose corn syrup is used in soft drinks and many other foods, including lunch meats and salad dressings. Corn is often an ingredient in breads, peanut butter, oatmeal and potato chips. Corn components are even used in many grocery store items that aren't edible--including disposable diapers and dry cell batteries.
GE Energy Financial Services is investing $104 million in a partnership with Houston-based
Chesapeake Energy says it has a deal to buy a 20-story building on the edge of downtown Fort Worth to use as a district headquarters. The Oklahoma City-based company will buy the Pier 1 Imports headquarters building for $104 million to house Chesapeake's Barnett Shale District. Pier 1 Imports has occupied the building since it was built in 2004 and will continue leasing ten floors for its headquarters.
Deutsche Post is selling part of its real estate portfolio to Dallas-based buyout firm Lone Star Funds for 1.57 billion. The German mail and logistics company says the 1,300 properties in the portfolio are located mostly in Germany. Deutsche Post will lease back many of them. The cash transaction comes on top of real-estate sales totaling some $553 million since November. The company says the deal will have only a "marginal effect'' on pretax profit and would not affect its earnings guidance for this year, or employees. Deutsche Post delivers mail in Germany and is a major worldwide player in the express delivery and logistical services business through its DHL unit.
Sony Pictures Television says it will become the first Hollywood studio to offer full-length movies by cellphone. The unit of Japanese electronics maker Sony Corporation says it will offer a range of popular titles on special AT&T phones in May. The movies, such as "Bugsy,'' "Ghostbusters'' and "Karate Kid,'' will be among those that have made their theatrical and DVD runs and have been broadcast on TV already. The titles will be streamed with advertisements in a loop and not be available on demand. AT&T says it has not yet determined a price on the new subscriber package. Those who wish to obtain the service can only do so on new LG VU and Samsung Access phones.
Dynegy Chairman and Chief Executive Bruce Williamson received a compensation package valued at about $6.8 million in 2007--about five percent less than he made in 2006. That's what the power provider said in its annual proxy statement. The 48-year-old received a salary of $1 million--the same as in 2006--a cash bonus of $900,000 and other compensation, or perks, valued at $67,817. That's according to the filing with the Securities and Exchange Commission. Those perks included $24,750 in retirement plan contributions. The biggest boost to Williamson's pay package was from stock options and awards, which the company valued at $4.8 million when they were granted April 2nd last year. The value of Williamson's awards in 2006 was about $5.1 million, accounting for much of the difference in pay between the two years. Williamson took the helm of Houston-based Dynegy in October 2002, when it was flirting with bankruptcy. The company's struggles at the time stemmed from heightened scrutiny of the energy sector in the aftermath of Enron's 2001 crash. Dynegy has now positioned itself solely as a power generator, and Williamson has said its financial position is solid.