Energy summit for presidential candidates planned for Houston…Houston’s wireless network provider Earthlink cuts national workforce in half…Census Bureau reports rise in household income, decline in poverty rate and more people without health insurance…
Houston is hosting a nationally televised summit on energy for the top three or four Democratic and Republican presidential candidates this fall. The three-hour event is sponsored by the Greater Houston Partnership in collaboration with the Sierra Club. Rather than an actual debate, the format will be a dialogue setting. Each candidate will be given the same amount of time to present his or her views of how best to satisfy America’s future energy needs, followed by the moderator asking a series of questions. The energy summit is set for November 13th at the George R. Brown Convention Center.
Earthlink is cutting 900 jobs, or about half its workforce. The Internet service provider is closing four offices as part of a restructuring to reduce operating costs. Restructuring is expected to be complete by the end of the year, resulting in savings of between $25 million and $35 million. Earthlink has a contract to build a city-wide wireless network in Houston.
Governor Rick Perry used a stop in Mexico to criticize the U.S. Congress for failing to make progress on immigration reform. The Texan suggested that members of Congress lack “maturity.” Perry called the proposed construction of a fence along the U.S.-Mexico border “idiocy.” Perry was in Mexico City on a trade mission intended to strengthen Texas and Mexico’s economic ties. Perry highlighted the importance of developing a foolproof biometric identification system to track individuals, ensure they pay taxes and live within the laws. He suggested offering renewable, 24-month visas for those who follow such requirements and “incarceration and/or deportation” for those who don’t. Perry says Mexico receives $158 billion worth of Texas exports each year.
The U.S. Census Bureau reports a rise in household income, a decline in the poverty rate and a higher number of people without health insurance. The real median household income increased between 2005 and 2006 for the second consecutive year to $48,200. The Census Bureau reports nearly 37 million Americans, or about 12.3 percent, were living in poverty last year. That’s down from 12.6 percent in 2005. Poverty level depends on income and family size. For a family of four, the poverty level is about $20,400 in household income. A poverty expert says it was low unemployment that helped lower the poverty rate. But, he says the rate was slow to drop despite five years of economic growth. Low-wage workers have been hurt by the nation’s declining manufacturing sector, which has lost more than three million jobs since President Bush took office. The number of people without health insurance has increased to 47 million, and political scientists expect that debate will overshadow poverty in the presidential campaign.
The pending sale of TXU got a boost as Institutional Shareholder Services endorsed the record $32 billion buyout offer. The group also says the scarcity of available credit made a better offer unlikely for Dallas-based TXU. Shareholders are scheduled to vote September 7th on the proposed sale to investors led by Kohlberg Kravis Roberts and TPG, formerly Texas Pacific Group. The company’s largest shareholder, fund manager Franklin Resources, opposes the offer as too low. TXU has said it probably would break into three separate companies–power generation, distribution and sales–if it can’t complete the buyout.
Whole Foods Market announced it’s lined up financing to complete its $565 million purchase of rival Wild Oats Markets. The move by Austin-based Whole Foods ends a six-month battle against federal regulators who tried to block the deal on antitrust grounds. Whole Foods says it took out a five-year, $700 million loan to fund the agreement. The deal also includes assumption of $137 million in Wild Oats debt. Whole Foods Chairman John Mackey says the merger will result in a company that is much stronger and better positioned for the future.
The Port of Houston Authority Commission has awarded a $2.1 million contract to expand the entrance to its main gate at the Bayport terminal. The contract was awarded to Reytec Construction Resources. The commission approved a $5.7 million construction contract to Laughlin-Thyssen for replacement of a timber fender system at Jacintoport Terminal. Commissioners also approved up to $75,000 to maintain the sound monitoring system at the new terminal and assist with noise mitigation at Bayport.
Houston health care services provider Intrepid Holdings plans to expand to 12 states this fall, under the names My Clinic, My Care Clinic or other new names. Most will be located near pharmacies or retail grocery stores. Intrepid operates in Texas and Maryland, but expansion states will include Arkansas, Florida, Illinois, Iowa, Indiana, Louisiana, Missouri, New Jersey, North Carolina, Pennsylvania, South Carolina and Washington.
Home Depot confirms that it has an agreement to sell its wholesale distribution business to a private equity group for 8.5 billion. That’s about $1.8 billion less than originally planned. Announcement of the terms caps several days of intense discussions. The sale announced in June was for more than $10 billion. But turbulent credit conditions and troubled housing market forced the discussions on new terms. The sale, which will allow the company to focus on its retail business, is scheduled to take place on Thursday. The buyers include affiliates of Bain Capital Partners, The Carlyle Group and Clayton, Dubilier & Rice. Home Depot says it expects to net about $7.9 billion in cash proceeds from the sale.
Wal-Mart says it is considering new store sizes and types in the U.S. At the same time, it is downplaying the possibility of acquisitions as it faces slowing sales growth at its older stores and new competition from British rival Tesco. The world’s largest retailer says it is hiring managers for a team to consider new store formats besides its four established U.S. types. Those are Wal-Mart discount stores, Supercenters that combine groceries and general merchandise, Sam’s Club membership stores and Neighborhood Market grocery stores. Wal-Mart’s sales at stores open at least a year, a key measure among retailers, has been slowing. In the most recent quarter they rose just 1.9 percent.
Meeting early this month, Federal Reserve policymakers recognized that a spreading credit crunch could pose a danger to the country’s broader economic health. According to minutes of the closed-door meeting, the nation’s central bankers thought they might eventually have to take action to keep the problem from spreading. Even so, the Federal Open Market Committee then left a key interest rate unchanged, where it has stood for more than a year. Ten days later, the Fed took the unusual step of reducing by a-half percentage point the interest rate it charges banks for loans to 5.75 percent. Speculation has risen that it will lower the fed funds rate on or before the next policy-setting meeting, scheduled for September 18th.
Texas has become second only to Florida for attracting a retirement population, according to the Houston Business Journal, reporting on census data compiled by Phoenix-based Thomas, Warren + Associates. In 2005, Texas gained 27,000 new residents over the age of 65, bringing a $732 million impact to the state’s economy, according to North Carolina-based National Active Retirement Association.
American Pie is recalling 1,440 cases of Marie Callender turtle pies because of elevated amounts of bacteria. The pies were sold in Pennsylvania and 14 other states. The company says the pies were on hold due to a bacterial count that was higher than company standard–then they were accidentally shipped from a warehouse. None of the bacteria are pathogens, but the company warns that eating the pies could lead to gastrointestinal illness, nausea, or vomiting. No illnesses have been reported. The pies were sold in Kroger, Giant Eagle and Hy-Vee supermarkets in 15 states. The recalled pies have a UPC code of 12781 10280 and a production code ending in 143. Only pies with production codes ending in 143 on the package are included in the recall.