Michael Dell returns as CEO…Feds check for illegal immigrants at Republic Waste…Former Enron executive Michael Kopper begins prison term…
Computer maker Dell today announced that Chairman Michael Dell will return as chief executive—replacing Kevin Rollins–effective immediately. The Round Rock-based company is also predicting fourth-quarter profit and sales below Wall Street expectations. Dell has served as chairman since founding the company in 1984 and was chief executive until 2004. The company said Rollins also resigned as a member of the board. Dell has forecast that profit and revenue will fall below analyst consensus estimates of 32 cents per share — on sales of $15.3 billion.
It looks like a hostile bid for Delta Air Lines mounted by U.S. Airways has been grounded. Delta’s creditors committee is supporting Delta’s reorganization plan calling for it to emerge from bankruptcy as a stand-alone carrier. U.S. Airways, seeing that, announced it is withdrawing the hostile $9.8 billion bid to buy Delta. Delta’s creditors said the decision came after a lengthy review of both Delta’s proposal and U.S. Airways’ proposal, which the committee rejected. U.S. Airways chairman and CEO Doug Parker issued a statement expressing his disappointment with the turn of events. He said the creditors committee was ”ignoring its fiduciary obligation” to creditors. Parker said the U.S. Airways plan would have ”provided substantially more value to Delta’s unsecured creditors than the Delta stand-alone plan.”
Nearly 50 people were taken into custody today at a suburban Houston trash collection company in a raid to check for illegal immigrants. Federal agents arrived shortly before dawn at Republic Waste Company’s plant in Humble. Immigration Agency spokeswoman Luisa Deason confirms it’s an enforcement action. Will Flower with Florida-based Republic says the raid resulted in both staff and workers from temporary agencies being detained. Flower says company officials believe they’re in compliance with all applicable laws, rules and regulations. Flower says the company had prior problems with immigration in 2005, resulting in a change of management at the plant. He says the company in 2006 worked to ensure every employee was properly documented.
Investors responded warmly to Duncan Energy Partners’ market debut today. The Houston-based pipeline operator’s stock opened above its initial public offering price of $21 on the New York Stock Exchange after 13 million units were sold. Duncan represents the first energy-related limited partnership to go public in 2007. That’s after a growing number to make their market debuts last year. Publicly traded energy limited partnerships are structured so much of their available cash flow is paid out to investors through a dividend. Duncan has a dividend yield of eight percent. The company was formed by another limited partnership, Houston-based Enterprise Product Partners. That $12.7 billion energy company is also listed on the NYSE.
Greyhound Lines said it has extended for two weeks a labor contract with drivers and other employees that was due to expire Wednesday. Talks are set to resume February 11th–three days before the extension ends–according to Local 1700 of the Amalgamated Transit Union. The contract covers 3,300 workers, including 3,000 drivers and about half of the Dallas-based bus line’s mechanics. Union officials haven’t comment yet. But on its Web site, the union calls the company’s wage proposal “unacceptable.” The union says the talks have also turned to subcontracting provisions. Neither side gave details. Greyhound is the largest intercity bus service in North America. It’s a unit of Laidlaw International, which also operates school bus lines that enjoy better profit margins than Greyhound.
Another former Enron executive has reported to prison for crimes related to the company’s collapse. Prison officials say 42-year-old Michael Kopper has reported to a men’s prison in Big Spring. Kopper was sentenced in November to a three-year, one-month prison term. Kopper was the first Enron executive to plead guilty to charges stemming from the company’s 2001 collapse and to cooperate with prosecutors. He was a managing director in Enron’s finance division and a top lieutenant to former finance chief Andrew Fastow. Kopper faced up to 15 years in prison after pleading guilty in 2002 to money laundering and conspiracy to commit wire fraud. A federal judge issued Kopper a sharply reduced sentence, partly at the behest of prosecutors. They said Kopper’s cooperation helped their criminal cases against Fastow and other former Enron executives.