Offshore Technology Conference gives awards for technological advances…Cyberonics plans 15 percent workforce reduction…President Bush pushes for free-trade agreement with Colombia, Peru and Panama…
Ten of 14 winners of the Offshore Technology Conference’s “Spotlight on New Technology” awards are Houston companies, or international firms with Houston operations. They include Aker Kvaerner Subsea and Well Services; Baker Oil Tools; Halliburton; Jet-Lube; Imact Solutions Group; Versabar; and Weatherford International. OTC continues tomorrow at Reliant Park.
The Houston area posted one of the nation’s largest falls in unemployment in March compared to last year at the same time, according to the Bureau of Labor Statistics. The unemployment rate for March was 4.1 percent in Houston. Birmingham, Alabama and the Washington, D.C. area each recorded just three percent unemployment.
Houston-based medical device firm Cyberonics is cutting 15 percent of its workforce as part of a reorganization to reduce costs. Ninety of the company’s 600-employee workforce will be cut, with direct annual savings in excess of $12 million. Billionaire investor Carl Icahn purchased a stake in the firm last year.
An outplacement firm says job cut announcements soared 44 percent in April. Challenger, Gray and Christmas says the monthly rise to more than 70,000 cuts is also 18 percent higher than a year earlier. The financial sector led the way last month, accounting for nearly half of the job cut announcements. That includes Citigroup’s announced plans to trim 17,000 jobs. CEO John Challenger says some of the cuts also resulted from weakness in the housing market and troubles besetting mortgage lenders.
The Commerce Department says factory orders rose in March by the most in a year, a sign that the recent slowdown in manufacturing may have ended. Factory orders rose 3.1 percent, pushed higher by a big jump in demand for commercial aircraft and the biggest rise in the category that tracks business investment in new equipment in two and a-half years. The increase was better than expected. The report offers hope that manufacturers are seeing surging demand after a recent weak period brought on by troubles in housing and auto sales. Earlier this week, the Institute for Supply Management reported that its closely-watched gauge of manufacturing activity rose sharply in April, marking the best showing in 11 months.
With budget deficits improving, the government says it is discontinuing sales of three-year treasury notes. The Treasury Department says the final auction of three-year notes will be next week. That is part of the regular series of quarterly debt auctions used to help finance the $8.8 trillion federal government debt. The government’s borrowing needs peaked in the 2004 budget year, when the federal deficit hit an all-time high of $413 billion. Since that time, the deficit has declined for three straight years and is projected to drop further this year. Smaller budget deficits mean less need for the Treasury Department to sell bills, notes and bonds to the public. Treasury says it made the decision to keep amounts of other securities at levels that would remain popular in financial markets.
President Bush says Congress needs to approve a free-trade agreement with Colombia. That country’s president was at Bush’s side on the White House lawn as Bush said the U.S. must stand with other democracies. He says when Congress approves such treaties, it’s a signal to South America that Washington stands with countries making “hard decisions” on behalf of their people. The pact Bush is referring to includes Peru and Panama. Bush characterizes it as good for the countries involved, including the U.S., and for workers, farmers and job creators. Colombia’s president, Alvaro Uribe, thanked Bush, saying it’s important to have the U.S. at his side as he tries to fight drug trafficking and defeat terrorism.
Houston-based oil and gas equipment maker Hydril stockholders have approved a merger agreement with steel pipe firm Tenaris, which is based in Luxemburg. When the deal closes on May 7th, Hydril will be an indirect, wholly-owned subsidiary of Tenaris.
It wasn’t the 2005 deaths of 15 workers at BP’s Texas City plant that brought the company’s chief executive down. Nor was it one of the largest North Slope oil spills ever at the British company’s Prudhoe Bay, Alaska, operations. John Browne fell from grace after admitting he lied to a judge while trying to block a London newspaper from printing allegations of wrongdoing made by a former boyfriend. The Associated Press reports the admission may have been the last straw after a series of troubles at the end of a storied career for Browne, who quit this week. But to some, Browne’s resignation from BP illustrates the power of Britain’s tabloid press–and the perils of being gay in the conservative world of big oil. Stephen Coote with Britain’s Gay Business Association says “sport and business are the two last bastions” of institutional homophobia. Despite his resignation, Browne appeared to retain the support of Britain’s business community. David Buik of brokers BGC Partners says Browne was a business icon, a pillar of the economy and society–and what happened to him is a tragedy.
The nation’s largest and most influential proxy advisory firm recommends shareholder rejection of a sweetened takeover offer for Clear Channel Communications. Institutional Shareholder Services says the upgraded $39-a-share offer made last month is still too low. The opinion could embolden key investor opposition to the $19.3 billion deal led by private equity firms Thomas H. Lee Partners and Bain Capital. Shareholder protests to the original offer of $37.60 led the private-equity buyers to raise their offer, but opposition to the deal continues despite the sweetened offer. ISS says the new bid for the San Antonio-based media company “is not compelling enough” for it to support the deal. It cites a number of recent events, including a deal with Google to sell ad inventory for Clear Channel. ISS says that suggests an increase in the Clear Channel value “at least in line with the 3.7 percent bump.”
Clear Channel Communications announced its plan to divest 448 radio stations is 80 percent complete. San Antonio-based Clear Channel says most of the stations being sold are in smaller markets. The company has definitive sales agreements for 362 stations. The proceeds from the sales, expected to close later this year, are expected to be about $820 million. Clear Channel last month announced it agreed to sell its 56 television stations to a private equity group. Clear Channel said it would divest the stations in November, the same time it said a private equity group had agreed to buy the radio and billboard giant. But the divestiture is not a term of the equity buyout offer–which faces a shareholder vote on Tuesday.
News that the family that controls Dow Jones will oppose the unsolicited $5 billion bid for the company from News Corporation puts the ball back in Rupert Murdoch’s court. Murdoch’s media empire, which includes Fox News Channel, offered $60 a share, either in cash or a combination of cash and stock, for the company that publishes the Wall Street Journal. The opposition by the Bancroft family raises a couple of possibilities: News Corp. could raise its offer, or other bidders for the company could emerge.
American Airlines is offering free on-demand video and audio entertainment for first- and business-class passengers on transcontinental flights. Fort Worth-based American will test a media player on some flights between Los Angeles and Chicago. The nation’s largest airline says premium customers will get free on-demand movies, music and television on handheld devices with seven-inch touch-screen monitors. American began offering the devices on New York-Los Angeles and New York-San Francisco flights, and will add them to Miami-San Francisco flights in June. Carriers are trying to upgrade the ambiance in premium cabins during international and long domestic flights to increase brand loyalty. The airlines also hope to boost revenue by convincing coach passengers to pay a few bucks for amenities–like better entertainment.