A study by Yan Zhang at Rice University’s Jones Graduate School of Management indicates about 27 percent of those studied left their job within three years. The study finds it often may be due to faulty hires that result in early dismissals. Zhang studied 204 company leaders from 1993 to 1998. Many companies institute mandatory retirement ages. But if the preceding CEO is dismissed, inadequate succession preparation means a higher likelihood that the board will make a poor hiring decision.
Orders for manufactured goods posted a surprisingly strong increase in April. The Commerce Department says demand rose across a number of industries. Orders were up 1.1 percent in April following a 1.5 percent increase in March. Declines were seen in the auto industry and in the volatile commercial aircraft sector. Other areas saw strength from rising demand for iron and steel to increased orders for appliances and heavy machinery. Demand for petroleum was also up sharply, reflecting surging oil prices. The better-than-expected reading on orders for manufactured goods followed news that a key gauge of manufacturing rose to a reading of 49.6 in May, up a point from April. While the Institute for Supply Management manufacturing gauge remained at levels indicating a continued contraction in manufacturing, the upward movement was seen as a possible sign that manufacturing was beginning to pull out of its earlier slump.
With inflation worries running high, don’t look for more rate cuts from the Federal Reserve. That seems to be the message coming from Fed Chairman Ben Bernanke, speaking via satellite to a conference in Spain. Bernanke said that rate reductions that began last September, combined with the economic stimulus package, should bring about what he calls “somewhat better economic conditions” in the second half of this year. Bernanke noted that high oil prices present a double threat to the economy, putting a damper on already weak growth and raising inflation risk.
The Federal Reserve has auctioned another $75 billion in loans to squeezed banks to help them overcome credit problems. The central bank announced the results of its most recent auction–the 13th since the program started in December. It’s part of an ongoing effort to ease financial turmoil and credit stresses.
Texas employers will get $148 million in refunds due to a surplus in the state unemployment insurance fund. Employers pay into a fund used to compensate unemployed workers. That fund has reached about $1.7 billion, or $738 million above the minimum level required by state law–leading to refunds. Details came from the Texas Workforce Commission in Austin. The agency says an estimated 360,000 employers would receive refunds averaging about $400. The commission says most employers will also pay lower unemployment taxes this year. To get a refund, employers must have 2008 payroll expenses, have had such expenses since at least early 2007, and be paying all taxes. Employers subject to unemployment insurance taxes include those paying $1,500 in wages in a quarter or having at least one employee in 20 weeks of a calendar year.
The two-week mission of the current space shuttle flight is to install a 16-ton Japanese science lab on the International Space Station. Boeing provided more than 1,600 of the components that Discovery is delivering to the ISS. And Webster-based Spacehab, meanwhile, has finalized an agreement with NASA to carry out research, development and industrial processing aboard the space station.
A Delta Air Lines executive says he understands why other carriers are hesitant to merge right now, given the stress caused by high oil prices. But he insists Delta has no plans to walk away from a proposed acquisition of Northwest Airlines. President and Chief Financial Officer Ed Bastian says that Delta likely will be forced to announce more domestic capacity cuts to deal with record fuel prices, but it doesn’t plan to announce any more job cuts. United and US Airways recently told employees that they have no plans to combine at this time. Continental Airlines previously announced that it would remain a standalone carrier.
METRO has received $7 million in funding from the Federal Transit Administration, according to the Houston Business Journal. METRO will use the funds for replacement buses. METRO officials last year initiated a bus replacement program that would add 100 new buses to its fleet each year. The new buses are diesel-hybrids which use less fuel and produce less air pollution.
Lexicon Pharmaceuticals has been given a fast track from the U.S. Food and Drug Administration for its drug to treat carcinoid syndrome. The Woodlands-based company has completed a Phase 1a clinical trial and is set for a Phase 1b trial this month. Carcinoid syndrome refers to symptoms that occur secondary to carcinoid tumors in the gastrointestinal tract.
The American Medical Student Association gives bad grades to three Texas medical schools, based on limiting conflicts of interest from pharmaceutical marketing. The University of Texas Medical Branch in Galveston, Texas A&M Health Science Center College of Medicine and the UT Health Science Center in San Antonio are given failing grades for their policies on incentives like free meals, speaking fees and free drug samples. The AMSA is the oldest and largest independent association of physicians-in-training in the United States. It has been pushing for evidence-based rather than marketing-based prescribing practices.
Dallas-based Tenet Healthcare is selling three Los Angeles-area hospitals to a California company that specializes in buying financially struggling hospitals. The deal gives Prime Healthcare services a dozen properties in Southern California. Prime says it’s bought the 151-bed Encino campus of Encino-Tarzana Regional Medical Center. It says it also has deals to buy the 167-bed Garden Grove Hospital and Medical Center and 64-bed San Dimas Community Hospital. Neither company disclosed any information on the financial terms of the sales. As Prime grows, Tenet continues to reduce its California presence. Tenet once had 41 hospitals statewide; it’ll have 13 facilities in California once these sales are closed. Chief Operating Officer Dr. Stephen Newman says California remains “an important state for Tenet.” But he says the Garden Grove and San Dimas facilities “were only marginally profitable in 2007, and neither had positive cash flow.”
Federal antitrust regulators have cleared KBR’s $550 million purchase of Birmingham, Alabama-based BE&K, according to the Houston Chronicle. BE&K has 9,000 workers.
Time Warner Cable will begin metering Internet use in Beaumont starting June 5th, in a two-month program to determine heavier users. High-use customers will be charged extra fees after a two-month data-gathering period, according to Bloomberg News. Time Warner says five percent of users use over 50 percent of the company’s bandwidth.
AT&T has settled a class-action lawsuit brought by customers who have seen mysterious charges for ringtones and other content show up on their cell phone bills. The charges stem from ringtones and other services solicited on Web sites or through text messages. The charges, which can be hidden or poorly explained, show up later on cell phone bills. Plaintiffs attorney Jay Edelson says customers will be able to claim refunds for spurious charges that appeared on up to three of their monthly bills between January 2004 and May 2008. Sixteen class-action suits alleged that San Antonio-based AT&T should have been more careful in vetting the services. AT&T did not admit wrongdoing.
U.S. health officials say an outbreak of salmonella food poisoning first linked to uncooked tomatoes has now been reported in Texas and eight other states. Lab tests have confirmed 40 illnesses in Texas and New Mexico as the same type of salmonella, right down to the genetic fingerprint. The Texas Department of State Health Services says 21 of those cases are in Texas. An investigation by Texas and New Mexico health authorities and the Indian Health Service tied those cases to uncooked, raw, large tomatoes. The U.S. Centers for Disease Control and Prevention say at least 17 people in Texas and New Mexico have been hospitalized, but none have died. The CDC says another 30 people have become sick with the same Salmonella Saintpaul infection in Arizona, Utah, Colorado, Kansas, Idaho, Illinois and Indiana. CDC investigators are looking into whether tomatoes were culprits there, too.