Unemployment claims drop slightly…Federal deficit somewhat lower than last year…Nearly 16 million passengers to fly over the Labor Day weekend…
In an encouraging sign for the labor market, the government reports fewer people signed up for jobless benefits last week. The Labor Department says new applications filed for unemployment insurance dipped by 2,000 to 322,000 for the week ending August 18th. It was the first drop in new claims in roughly a month. The number was a bit higher than the 320,000 analysts were forecasting. And the four-week moving average of claims, which smoothes out week-to-week volatility, rose by 4,750 to 317,750. Still, the level of claims suggests that the employment climate remains in fairly good shape despite problems in housing, tighter credit and turmoil on Wall Street in recent weeks.
The Congressional Budget Office says the federal deficit for 2007 will be somewhat lower than it was last year. But it says “the budget outlook for the long term remains daunting.” The nonpartisan agency says the deficit for the fiscal year that ends September 30th will be about $158 billion, or $90 billion less than the deficit recorded for 2006. The revised figure is about $19 billion below the deficit the CBO projected for fiscal 2007 on March 1st. The CBO says higher-than-expected tax revenues are the main reason for the improved numbers.
Even with record levels of delays, an industry group looks for nearly 16 million passengers to fly on U.S. airlines over the Labor Day weekend. That would be a more than 2.5 percent increase over a year ago. The Air Transport Association says 15.7 million passengers will travel globally on U.S. airlines between August 29th and September 5th. The group says while most delays will be weather-related, a modernized air traffic control system is needed to reduce air traffic congestion. Passenger delays are at the highest levels on record. Nearly a third of domestic flights on major U.S. airlines were late in June.
Textron will pay millions to settle charges that its subsidiaries made kickbacks to Saddam Hussein’s government in the UN Oil-for-Food program. Prosecutors aren’t filing criminal charges against Rhode Island-based Textron, but are requiring it to pay a $1.15 million fine and $3.5 million in civil penalties. The Justice Department is investigating companies involved in the UN-sponsored Oil-for-Food program, which ran from 1996 to 2003. It was created to help Iraqis cope with UN sanctions imposed after Hussein’s 1990 invasion of Kuwait. A spokeswoman for Textron, the maker of Cessna aircraft and Bell Helicopters, didn’t immediately comment. Ten people and five companies have been charged. David Chalmers, who owned Bayoil USA in Houston, is expected to serve up to 46 months in prison. He’ll be sentenced November 19th.
Inc. magazine’s 26th annual ranking of the 500 fastest-growing private companies in the U.S. finds that Texas is a hotbed of entrepreneurial activity. According to the magazine’s September issue, Texas has 38 of the fast-growing companies—an increase of six over last year, with Dallas and Austin leading. In fact, Austin is one of five U.S. cities that are home to the most Inc. 500 companies. Houston energy firm Stallion Oilfield Services is number 54 on the list, with sales that are up 2,303%. Superior Offshore International placed 59th on the list, with sales that are up 2,168% average over the past three years. Millennium Midstream Partners in The Woodlands is 63rd on the list, with sales that have increased 2,006.5%. The list ranks privately held companies according to average year-over-year sales growth over the past three years.
Two Houston oil and gas services companies took top spots in a customer satisfaction survey of exploration and production suppliers conducted by EnergyPoint Research. The Houston-based research firm says Derrick Equipment and Smith International placed first and second for providing oil and gas drilling equipment. Pearland-based Davis-Lynch was ranked third on the survey, based on 2,319 evaluations by 636 respondents from 176 E&P companies, drilling contractors and upstream consultants.
The art of building and maintaining personal and professional relationships continues to be very important, despite technology-enabled networking, according to ExecuNet. It’s latest Executive Job Market Intelligence Report ranks networking as the single most effective method for developing job opportunities, but the most effective personal and professional networks are built on trust, which the report says remains largely a product of consistent, in-person interaction.
Another warning about posting too much personal information on the Internet, as more details are learned about a scam involving the monster.com job-seeking Web site. Con artists stole user names and passwords from recruiters who search the site and then used that information to create personalized “phishing” e-mails to hundreds of thousands of unsuspecting job seekers. Researchers at the online security firm Symantec Corporation detected the scheme last week. They’re warning that those who’ve fallen prey probably had spyware or other malicious programs secretly installed on their computers. Also, just the names, addresses and other information from resumes could be used by criminals. Symantec says it has alerted monster.com and is also advising that people with access to its system be given special passwords that are hard to guess and frequently changed.
The Graduate Management Admissions Council has released a survey showing that applications to business schools continues rising. The 2007 Application Trends Survey measures applications at 445 MBA programs plus 252 graduate business education programs. About 57 percent of full-time programs received more applications from women this year than in 2006.
Houston-based Gexa Energy has been fined $500,000 by the Federal Energy Regulatory Commission for failing to file proper paperwork related to its acquisition by Florida Power & Light, according to the Houston Chronicle. The Florida firm acquired Gexa in June 2005, but the complaint alleged that Gexa did not file for merger authorization with regulators, and did not reveal that it was a utility selling power into regulated markets in New England. The settlement announcement is also the go-ahead for completion of the merger.
The National Resource Defense Council and the Sierra Club have asked the Environmental Protection Agency to scrap a permit granted to Houston-based ConocoPhillips for a $3.9 billion Illinois oil refinery expansion, according to the Houston Chronicle. The groups say the permit fails to require ConocoPhillips to cut the amount of waste gas burned off in flares during fuel production.
General Motors says it has cut production at six plants that make large sport utility vehicles and pickups, citing fuel prices and competition in the market. A GM spokesman says starting this past Monday, the company eliminated previously scheduled overtime production at plants in Arlington, as well as Janesville, Wisconsin; Fort Wayne, Indiana; Flint, Michigan; Silao, Mexico and Oshawa, Ontario. The change will be in effect for the rest of the year. GM’s SUV and truck sales were down nine percent in the first seven months of the year as housing starts slowed, high gas prices damped demand for bigger vehicles and competitors ramped up incentives.
Thirty Mexican nationals with U.S. work visas say police in Pascagoula, Mississippi, kidnapped and threatened them with arrest or deportation if they didn’t return to an employer. The workers say Pascagoula Police Captain George Tillman threatened to send them to jail if they didn’t return to work for a recruitment company. The workers said they received H2b temporary visas to work for Southwest Shipyards in Channelview, Texas. But they left because they were paid less than promised and working conditions were poor. Under terms of their visas, the workers were permitted to work only for the company that sponsored them. A message seeking comment left last night with Southwest Shipyards wasn’t immediately returned. The workers plan a lawsuit against Tillman, and they’re backed by the Mississippi Immigrants Rights Alliance, the American Civil Liberties Union and other advocacy groups. Interim Pascagoula Police Chief Eddie Stewart says the allegations are without merit and that his officers handled the situation properly.
China says it’s not poor quality that prompted Mattel to issue a global recall of millions of Chinese products–but newer, stricter industry standards. China’s Vice Commerce Minister says the more than 18 million toys were pulled from shelves because of a May revision of standards involving magnets. He says the U.S. manufacturer Mattel voluntarily recalled the toys that were made and sold before that revision. Mattel first announced a recall involving magnets last November, after reports of injuries. China does acknowledge the recall was the responsible thing to do. And a cabinet-level panel plans to launch a nationwide food, drug and export safety campaign in a bid to win back consumer confidence. Just Wednesday, the U.S. announced recalls of tens of thousands more Chinese-made products because of lead hazards.
Lone Star Funds says that South Korean tax authorities raided its Seoul office this week. That’s the latest development in a series of legal and tax disputes that have prevented the Dallas-based buyout firm from selling its controlling stake in a major South Korean bank. Lone Star Chairman John Grayken disclosed the raids in a statement. He says National Tax Service raided Lone Star’s South Korean offices on Wednesday. Grayken says the firm is “disappointed” by the raids, but it’s “committed to cooperating fully” with the South Korean investigation. A Seoul court is investigating allegations that the fund manipulated the stock price of Korea Exchange Bank’s credit card unit in 2003 so that the bank could take it over at a lower price. Lone Star is also alleged to have played a part in deliberately underestimating KEB’s financial strength to facilitate its purchase of the bank in 2003. The fund has consistently denied any wrongdoing. Earlier this week, financial giant HSBC Holdings said it was in talks to purchase Lone Star’s stake in KEB.
A Southwestern Electric Power Company consultant testified that SWEPCO needs a proposed coal-fired plant because natural gas is too expensive. Judah H. Rose told the Arkansas Public Service Commission that SWEPCO would go bankrupt if it decided to replace its coal-fired plants with plants fueled by natural gas. The State Regulatory Commission is holding hearings in Little Rock on the $1.3 billion power plant proposed for near Fulton, Arkansas. That’s about 15 miles northeast of Texarkana. SWEPCO serves customers in northeast Texas, Arkansas and Louisiana and has both coal- and gas-fired plants. The utility is asking Arkansas regulators to approve plans to build the 600-megawatt facility in Hempstead County, Arkansas. PSC is expected to make a decision in 30-60 days after the proceeding ends. SWEPCO would still have to go through an environmental permitting process.
The company that owned a gas delivery truck that exploded and showered flaming debris onto a downtown Dallas freeway last month has a record of federal safety violations. The Dallas Morning News cites records as showing federal regulators cited Bellville-based Western International Gas & Cylinders for hazardous materials violations in 2005. A spokeswoman for the Federal Motor Carrier Safety Administration tells the newspaper that a 2005 safety audit cited Western International for transporting hazardous materials without a security plan. The company was fined more than $6,000. In a separate 2005 inspection, the Occupational Safety and Health Administration fined Western International more than $2,100. That was for not having written procedures for maintaining its processing equipment to prevent explosions at its Bellville plant. Western International spokesman Bob Schubert defended the company’s safety record. In his words”I think it’s great.” Western International was delivering acetylene gas to a supplier near downtown Dallas on July 25th when its truck trailer exploded. That severely burned two workers, caused more than $2.3 million in damage and sprayed nearby freeways with flaming shrapnel. Less than three weeks later, a Western International trailer full of canisters exploded during a delivery in the Houston suburb of The Woodlands.
Clear Channel Communications will hold a Shareholders meeting September 25th as the media company seeks approval for a leverage buyout. The San Antonio-based billboard and radio giant is facing a cash buyout offer from an equity firm led by Thomas H. Lee Partners and Bain Capital Partners. The agreement was announced last November, but had to be sweetened several times after some of the largest Clear Channel shareholders opposed the deal. The latest offer is $39.20 per share, plus the option for up to 30 percent of shareholders to keep owning part of the privatized company. The equity firms will pay $19.45 billion and assume $8 billion in debt. Shareholders who owned stock as of Monday will be eligible to vote. The deal is expected to close before year’s end.
J.C. Penney is recalling 4,000 spindle-back chairs because they can collapse. Plano-based Penney says the recall covers about 4,000 Windsor spindle-back side chair sets of four chairs made from solid hardwood. The backs and legs are painted white. The seat is a natural wood color. The items are made in Malaysia. The Consumer Product Safety Commission says the retailer has received four reports of the chairs collapsing–and one minor whiplash injury. The chairs were sold through Penney’s catalog and online stores from April 2006 through June of this year for about $250 per set. Consumers who bought the chairs should stop using them and contact Penney to get free replacements or a full refund. Penney has set up a recall hotline: 1-888-333-6063. The Consumer Product Safety Commission’s recall hotline is: 1-800-638-2772.
Houston hip-hop artist Lil Flip has been tapped as the new spokesman for Lucky Nites liqueur, according to the Houston Business Journal. The blend of pineapple juice, amaretto and vodka is being distributed by New York-based Straight Up Brands in North America and the UK.