Survey shows corporations unprepared for retirement of baby boomers…Cheniere Energy opts out of tax abatement for new LNG terminal in Louisiana…Houston’s public employees begin contract talks with city officials…
A new report called “Aging Workforce Survey: Challenges and Responses—an Ongoing Review” shows that corporate America is unprepared for the looming brain drain caused by the aging of baby boomers. Ernst & Young’s William Arnone says losing experienced employees due to retirement may leave many companies susceptible to experiencing gaps in wisdom and a depletion of human capital.
“Well, we surveyed human resource executives at large employers—Fortune 1000 employers throughout the United States—and the number that jumps out is four in ten workers are eligible to retire in the next ten years. And companies are now realizing that this demographic trend is irreversible, it’s irrefutable, and we now have to start looking at ‘what does this mean at our specific company?’ So employers are beginning to take a look at the aging of their workforce—not just how many are eligible to retire, but how many are likely to retire in the next five (or) ten years, where are they in terms of business units and what will be the impact if we lose them prematurely, and then what can we do to make sure that we don’t. So it’s really something that’s rising on the radar screen of many large employers.” Ed: “Here in Houston, we have stories often about the graying of the energy field…” “Yes, that’s one of those industries that’s feeling it earlier than others. This is one of those demographic tsunamis that’s going to hit virtually every industry—some sooner than others. But, just by the numbers—76 million boomers—we’re everywhere, an in large numbers, so it’s something that you can’t hide from.”
Arnone says some employers are looking at succession planning, pension plans, executive compensation, health care and HR risk and compliance.
“Some of things that employers are doing is looking at their employee benefit plans—their retirement plans, their 401(k), health care plans, and asking ‘are they age-neutral, or do they encourage early retirement at a time when it’s not consistent with out business objectives?’ There’s also some, there’s some innovations that employers really weren’t able to do, because federal law made it impossible years ago, that they can do now. Ann innovation is phased retirement. This is where an employer says to an older worker ‘you can go on a reduced work schedule,’ which many older workers would prefer. ‘We’ll turn on your pension and still give you a paycheck.’ Only nine percent of the companies in our survey are doing that today. But 30 percent said they’re looking at it. And this could be one of those things that really makes a difference in terms of more flexibility for the older worker and a good deal for the employer, as well.”
Arnone says companies need to formalize a strategic plan to assist in orchestrating the sharing of knowledge between workers close to retirement and the next generation of employees, in order to protect from what he calls “wisdom withdrawal.”
Houston-based Cheniere Energy will open a new liquified natural gas terminal in Louisiana next year. The Sabine Pass terminal is set to open in the second quarter of 2008. Cheniere opted out of a ten-year ad valorem tax abatement to help provide funds to help rebuild Cameron Parish, which was devastated by Hurricane Rita.
Houston-based Grant Prideco has agreed to sell three tubular technologies and services units to the French company Vallourec in an $800 million deal, according to the Houston Business Journal. The companies include Atlas Bradford Premium Threading Service, TCA and Tube-Alloy.
Houston-based T-3 Energy Services has acquired Energy Equipment and HP&T Products for $96.4 million, according to the Houston Business Journal. Energy Equipment manufactures chokes and control panels for subsea applications. HP&T Products is the design engineering arm for Energy Equipment.
Houston’s public employees have begun contract talks with city officials. Some city employees delivered straw vote ballots to the city council in support of an across-the-board annual raise of two percent over four years. City Council Member Peter Brown is living on the wage of an intake receptionist at La Nueva Casa de Amigos health center for a week. That restricts him to a daily budget of $23.03 for food, gas and clothing. The Houston Organization of Public Employees is seeking a contract that can raise the pay of every worker to at least $10 an hour.
The College for All Texans Foundation has announced a $1.13 million grant from the Bill and Melinda Gates Foundation to help students at eight HISD schools explore college opportunities. The Texas Higher Education Coordinating Board will also provide $430,281 in cash and services to the school district as a fund match. The school board will vote on acceptance of this funding at their November 8th meeting.
Applebee’s International shareholders have approved a $1.9 billion offer from IHOP to buy the chain. The sale is expected to close by November 29th. The combined company would have more than 3,200 restaurants.
A bill extending a ban on Internet access taxes is headed to the White House for President Bush’s signature. The House has approved a seven-year prohibition 402-0, despite considerable support in the House and Senate for a permanent ban. Concerns over the potential long-term impact on state and local governments forced a compromise. An official with the National Governors Association says the provision amounts to a moratorium on state and local taxes. He says with the Internet changing rapidly, the issue should be revisited periodically. Congresswoman Linda Sanchez calls the bill “bipartisan legislation at its best,” noting that businesses, state and local government organizations and labor unions support it. A House bill to make the ban permanent has nearly 240 co-sponsors, more than a majority. Senator John Sununu tells the associated press that seven years is an important place to start.
India’s trade minister is on the defensive after a report that Gap sold clothes made by children in a New Delhi sweatshop. Commerce Minister Kamal Nath says activists are hyping reports of child labor in his country. And he says bad publicity like that could lead to rich countries limiting exports from poorer nations. Nath suggested that India will be forced to take “retaliatory measures,” without elaborating. India has a well-documented problem with child labor. The report on Gap appeared Sunday in a British newspaper. The company has since said it won’t sell any of the products made in the offending factory. Gap says that facility was being run by a subcontractor.
The debate continues about allowing Mexican tractor-trailers onto U.S. interstate highways. Meanwhile, hundreds of such trucks are already hauling cargo across the country. And they’ve been doing it for years. More than 1,000 south-of-the-border companies drive cargo beyond the border zone under a long-standing exemption to the U.S. moratorium on Mexican long-haul trucking. And U.S. Department of Transportation records show these Mexican drivers and trucks have had better driver and vehicle safety records than their U.S. counterparts in recent years. However, opponents claim many violations never get recorded because of sloppy government record-keeping. The governments of both the United States and Mexico are pushing for opening the highways, saying that’ll create new business opportunities on both sides of the border. Trucks were supposed to begin rolling both ways in 2000 under the North American Free Trade Agreement, but U.S. interest groups blocked it. Meanwhile, Canadian truckers face no such restrictions. Opponents, including the Teamsters Union, have waged protests at the border and on Capitol Hill, waving signs saying “NAFTA kills” and “unsafe Mexican trucks.”
County officials sent a letter to the Texas Commission on Environmental Quality, asking for a review of mining company Asarco. El Paso County Attorney Jose R. Rodriguez says Asarco should be investigated for possible violations of federal and state environmental and health laws. The letter specifically mentions the Texas Solid Waste Disposal Act, the Texas Health and Safety Code and the Texas Water Code. The alleged violations stem from the transportation, storage, and disposal of hazardous wastes. The Arizona-based company has been trying to secure air quality permits in order to reopen a copper smelting plant in El Paso. But the announcement has been met with opposition from many local officials. They don’t want the facility to reopen because of past incidents of lead and arsenic soil contamination in some El Paso neighborhoods. An Asarco spokeswoman dismissed the allegations raised in the letter and accuses Rodriguez of having a conflict of interest in the case.
New Mexico’s ranking as the number one producer of pecans in the country didn’t last as long as expected. The U.S. Department of Agriculture had said in June that the state produced about 46 million pounds of the nuts last year–tops in the nation. The state had beat out Texas and Georgia, which typically rank at the top. But unexpected pecans from Texas appeared on the market after July 1st, boosting that state’s total to about 47 million pounds. Dona Ana County extension agent John White says, however, that the shelled weight of pecans from New Mexico was greater than Texas. And a pecan extension specialist at New Mexico State University, Richard Heerema, says New Mexico’s crop was worth about $10 million more than the Texas crop.
Chrysler CEO Bob Nardelli says he is pleased with the money-saving labor contract approved by workers over the weekend. He’s now looking to raise more cash by selling $1 billion worth of unneeded real estate and buildings. His comment came during an interview before participants in the American Magazine Conference. Chrysler’s labor agreement establishes lower wages for thousands of workers and a union-run trust to cover retiree health care. It was passed by a slim majority of workers after a six-hour strike earlier this month. Nardelli calls the contract “revolutionary.” He said the trust should give workers more confidence that their health care will be covered and will allow Chrysler to focus on its core business.
The Bank of Houston is opening a new branch at Essex and Weslayan in River Oaks. A two-lane motor bank, night depository drop and an ATM machine will be completed at the branch within the next couple of months.