President Barack Obama has arrived in Europe, with a hefty economic and political agenda for his first journey across the Atlantic since taking office two months ago. A U.S.-British push for more stimulus spending and widespread European agitation for tougher financial rules amid a global economic crisis will likely get a cool greeting at the G20 summit. For President Obama, the stakes are high for his first time on the world stage, both in dealing with the economy and in face-to-face sessions with other leaders. Obama plans a round of meetings with leaders tomorrow, including Queen Elizabeth II, summit host British Prime Minister Gordon Brown and the presidents of Russia and China. The world economy is in far worse shape than when the group of rich and developing countries last met in November and set lofty goals for international cooperation. Trade is deteriorating, protectionism is on the march and joblessness is rising. Street demonstrations have increased and widespread protests in London are expected.
Homebuilder TOUSA is laying off 156 workers in the Houston area from its Newmark Homes brand. The reduction is part of cuts of 282 Texas employees by the Hollywood, Florida builder. The company tells the Texas Workforce Commission that layoffs will begin on May 22nd and the Houston cuts will be completed before the end of the year. Newmark is winding down operations in Texas, seeking a buyer for its statewide homebuilding business.
In his first news conference as CEO, General Motors’ new chief executive Fritz Henderson says additional plants could close as part of an effort to meet new, tougher requirements for government aid. That’s beyond the five plants the company said it would shutter when it submitted a restructuring plan to the government last month. He says GM is likely to offer another buyout program to workers as it looks to cut labor costs. Labor union president J. R. Flores says President Obama’s rejection of GM’s turnaround plan leaves little doubt that the Arlington plant will not escape job cuts.
The Arlington plant employs 2,400 workers, and is the company’s only surviving SUV manufacturer. GM has 60 days to make more cuts and get more concessions from bondholders and unions or it faces bankruptcy.
Chrysler’s financial arm says it is eliminating 80 jobs as the parent company attempts to cut costs and restructure to stave off bankruptcy. Chrysler Financial says a majority of the cuts will come the company’s Farmington Hill, Michigan, headquarters, and across all job functions as it reassigns workers to different positions within the company to focus on “critical” business areas. Chrysler Financial got a $1.5 billion infusion in January from the government’s bank bailout program, but the Obama administration gave the parent company 30 days to restructure and complete a partnership with Italian automaker Fiat in order to get additional bailout funds. Privately owned Chrysler is operating on $4 billion in government loans.
Ford and General Motors are offering new payment protection plans to help reassure consumers who may be putting off buying a new car because of worries about losing their job. The offers come as auto sales have been battered by the recession and tight credit, reaching their lowest levels in 27 years. Ford says it will cover payments of up to $700 each month for up to a year on any new Ford, Lincoln or Mercury vehicle if consumers lose their jobs. The program runs until June 1st. Soon afterward, GM announced that it is making a similar offer. GM’s new CEO, Fritz Henderson, said the company will make up to nine car payments of $500 each for customers who have lost their jobs through no fault of their own. Customers must qualify for state unemployment to be eligible for the program. The program starts April 1st and runs until April 30th.
Walgreen will offer free walk-in clinic services to the unemployed and uninsured for the rest of the year, though they’ll still pay for prescriptions. The program provides tests and routine treatment for minor ailments and illnesses to patients who lose their job and health insurance after March 31st. Walgreen says it doesn’t know how much the program will cost the company. But it’s likely to bring in new customers. Walgreen says 30 per cent of walk-in clinic patients are new to the store. Typically the visits cost $59 or more. The program does not include checkups or vaccinations. Walgreen runs 341 in-store clinics in 35 markets around the country.
The air around 62 schools in 22 states–including Texas–will soon be tested for toxic air contaminants. The Environmental Protection Agency said it will work with state and local agencies to begin monitoring outdoor air at the selected schools. They were chosen because of their nearness to industrial facilities or other sources of pollution. Some testing will start immediately. Other schools would not see testing for 60 to 90 days. Testing will focus on toxic chemicals that are known to cause cancer, respiratory and neurological problems–especially in children, who are more susceptible than adults. The six schools in Texas are in Dallas, Houston, Diboll, Cypress, Deer Park and Burkburnett. The list of schools that will be monitored can be found on the EPA’s web site at www.epa.gov/schoolair.
A widely watched index shows American home prices dropped by the sharpest annual rate on record in January. The Standard & Poor’s/Case-Shiller 20-city housing index tumbled by a record 19 per cent from January 2008. It was the largest decline since the index started in 2000. The ten-city index dropped 19.4 per cent, also a new record. All 20 cities in the report showed monthly and annual price declines. Prices in the 20-city index have plummeted 29 per cent from their peak in summer 2006, while the ten-city index has fallen 30 per cent. Prices are at levels not seen since late 2003.
A private research group says that consumers’ confidence in the economy remained virtually unchanged after plummeting to historic lows in February as Americans are still nervous about the future. The New York-based Conference Board said that its consumer confidence index rose to 26.0, from a revised 25.3 reading in February, which was itself a big drop from the 37.4 level in January. Economists surveyed by Thomson Reuters were anticipating a reading of 28 in March. The rise, though slight, followed three consecutive monthly drops in consumer confidence.
The research firm Gartner says global spending on technology products and services will likely decline nearly four per cent this year. The weak economy is to blame. Gartner said it expects a broad-based slowdown, leading to a 3.8 per cent decline from 2008, to $3.2 trillion. Hardware will see the sharpest drop — nearly 15 per cent after a 2.8 per cent increase last year. Spending on software, which can help companies save money, is expected to stay nearly flat. Gartner calls its forecast bleak, and says government stimulus packages won’t be enough to offset things soon. The latest forecast would be worse than the 2.1 per cent decline in spending that the tech industry saw in 2001, after the dot-com bust.
The Coast Guard says it prohibited a tanker in Valdez from loading oil after cracks were found in the 24-year-old vessel. The S/R Baytown belongs to a subsidiary of ExxonMobil, Houston-based SeaRiver Maritime. The tanker crew discovered a five-inch crack in the main deck and notified the Coast Guard last week in Valdez. Coast Guard Lieutenant Jesse Garrant says a four-inch crack also was found in a rim on the vessel that is designed to contain spills. Garrant says that on Coast Guard orders, the ship owner made temporary repairs and then sailed out Saturday — without the oil shipment — for permanent repairs. The tanker is a single-sided, double-bottom vessel.
Microsoft says it is shutting down its online encyclopedia, Encarta, in October and will stop selling Encarta software by June. “People today seek and consume information in considerably different ways than in years past,” the Redmond, Washington-based company said in a statement on its Web site. The company said customers with subscriptions to its premium Encarta service will get a refund for fees paid beyond April 30th.
Federal food officials are warning people not to eat any food containing pistachios. That’s because of possible contamination by salmonella. The Food and Drug Administration says California-based Setton Pistachio, the nation’s second-largest pistachio processor, was voluntarily recalling more than two million pounds of its roasted nuts shipped since last fall. A top FDA official urges consumers to avoid eating pistachio products but that “they hold onto those products” until more is known. Two people called the FDA complaining of gastrointestinal illness that could be associated with the nuts, but the link hasn’t been confirmed.
The government says the nation’s corn crop is expected to drop for the second straight year, largely due to lower anticipated production outside the traditional corn belt. The Agriculture Department said lower prices and the unstable cost of fertilizer are discouraging some farmers from growing corn this year. The crop is expected to total 85 million acres, down one per cent from a year ago. USDA says farmers in major corn-producing states such as Iowa intend to plant a slightly larger crop this year. Total U.S. acreage still would be the third-largest in the last 60 years. The soybean crop is expected to be up slightly, to a record 76 million acres. Wheat and cotton plantings are forecast to be down seven per cent from last year.