General Growth Properties has filed for Chapter 11 bankruptcy protection. The real estate development trust has ownership interests in Baybrook Mall, Deerbrook Mall, First Colony Mall, The Woodlands Mall and Willowbrook Mall. It also co-owns The Woodlands Development Company. Chicago-based General Growth failed to persuade a majority of its debt holders to give it more time to refinance billions of dollars in debt. The company says shoppers will not be affected by its decision to file for bankruptcy protection. Chapter 11 protection allows a company to hold off creditors and operate while developing a financial reorganization plan. General Growth said it intends to reorganize with the aim of cutting its corporate debt and extending the terms of its mortgage maturities. It has stakes in more than 200 malls in 44 states, as well as several master planned communities and commercial office buildings.
Dallas-based Southwest Airlines is freezing hiring and offering buyouts to employees to trim its work force. That’s after reporting a surprisingly large loss in the first quarter as traffic fell in what CEO Gary Kelly called the carrier’s toughest revenue environment ever.
“We need to focus on the prime challenges at hand, which is surviving this difficult recession, difficult revenue environment, and of course, sustaining our profitability, cash flow and financial health.”
Southwest told employees it’ll offer voluntary buyouts to reduce its work force. The company didn’t say how many jobs it wants to eliminate, and it didn’t detail the offers. But it says they apply to nearly all employees, who have until June 19th to accept. The airline said it also froze hiring and froze pay for top officers and senior management. Southwest said it lost $91 million, including $71 million due to the falling value of its fuel hedges. Without the fuel-hedges item the airline would have lost $20 million on $2.36 billion in revenue. Over the three months of the year, Southwest’s traffic fell four per cent, a smaller decline than at most other U.S. airlines.
The number of newly laid-off Americans requesting unemployment insurance benefits fell last week–a sign that job cuts could be easing. The Labor Department says its tally of initial jobless claims dropped to a seasonally adjusted 610,000 from a revised figure of 663,000 the previous week. That’s significantly below analysts’ expectations of 655,000. The number of people claiming benefits for more than a week increased to six million, the highest on records dating to 1967.
The Bureau of Labor Statistics says 24 of the largest counties in Texas report increases in employment from September 2007 to September 2008. By comparison, employment fell 0.8 per cent in the U.S. as a whole and declined in 62 per cent of the large counties nationwide. The third-quarter “County Employment and Wages in Texas” shows that Harris registered the highest weekly wage at $1.050 per week, followed by Dallas at $1.025. Wages, however, are below the U.S. average in more than 90 per cent of the 230 smaller Texas counties, with the lowest wages evident along the Texas-Mexico border. Wage gains in the state exceeded the national average of 2.8 per cent in 12 of the 24 large counties.
Forbes magazine places Houston second in its fifth annual list of Best Big Cities for Jobs. The list is based on job growth in 333 regions or Metropolitan Statistical Areas. The study factors how employment figures have changed since 1996, in order to not overemphasize recent data. The authors of the report say this year, they should call the rankings not the “best” places for jobs, but the “least worst.” Austin tops the list, enjoying one per cent growth in 2008—but that’s less than a third of its average since 2003. Houston’s growth is attributed to the energy industry, but also includes construction, education and health services.
Hobby Lobby has increased the minimum wage for its 9,200 full time hourly employees nationwide to $10 an hour, according to the Houston Business Journal. The Oklahoma City-based private company has more than 20 stores in the Houston area. There are 400 stores in 33 states. Hobby Lobby had revenue of $1.8 billion in 2008. It plans to open 25 stores this year.
Thousands of Best Buy store employees will see pay cuts and others will lose their jobs as the consumer electronics chain reorganizes. Best Buy would not disclose the number of people affected. A spokesman said the move will put more sales people in front of customers. Many store managers and senior-level sales people will go to jobs where they’ll interact more directly with shoppers. New York investment firm Sanford Bernstein said in a research note that as many as 1,000 assistant store managers would lose their jobs. Up to another 8,000 senior sales associates would be demoted to jobs paying 25 per cent to 50 per cent less. The numbers are estimates by Sanford Bernstein. Best Buy won’t confirm or deny them.
American daily newspapers cut 5,900 newsroom jobs in 2008, according to a survey from the American Society of News Editors. The group says this was the steepest cut since the survey began in 1978. This year’s tally counted 46,700 newsroom jobs, down from a 1990 peak of 56,900. Newspapers have been shedding jobs to deal with steep declines in advertising that have been made worse by the recession. The survey also found that the percentage of minorities in U.S. newsrooms held steady at roughly 13 per cent.
Governor Rick Perry has signed Senate Bill 769, which reduces the impact to electricity customers of rebuilding and restoring utilities following hurricanes. The bill allows utilities to issue low-cost bonds to recover restoration costs. Following Hurricane Ike, 99 per cent of CenterPoint and Entergy customers were without power. Restoration costs are projected to be $650 million for CenterPoint and $580 million for Entergy.
Galveston’s sister city Niigata, Japan, is presenting a $10,000 check to assist in the island’s disaster recovery efforts. And the Department of Homeland Security’s Federal Emergency Management Agency has awarded $9.8 million to Galveston for Hurricane Ike debris removal.
Time Warner Cable is shelving its plan to bill customers based on how much internet traffic they generate, following mounting public and political outcry. Time Warner Cable’s capitulation doesn’t bode well for the future of metered billing of the Internet, in which people who use more bandwidth pay more. Frontier Communications, a Time Warner Cable rival in one key test market, Rochester, New York, also has dropped its plans for metering Internet use.
The government says housing construction plunged to the second lowest level on record in March, providing a sobering sign that the worst housing slump in decades has not yet ended. The Commerce Department said construction of new homes and apartments dropped by 10.8 per cent last month to a seasonally adjusted annual rate of 510,000 units. That’s the second lowest construction pace on records that go back 50 years. The decline was worse than economists had expected and February activity was revised lower as well. That’s more evidence that the steep slump in housing, which was a major factor triggering the current recession, has yet to run its course.
RealtyTrac’s U.S. Foreclosure Market Report indicates that one of every 373 homeowners in Texas received a foreclosure filing in the first quarter of this year. Texas has the ninth-highest highest foreclosure rate. The state recorded 10,616 foreclosures in March—nearly a per cent higher than the previous month.
Washington Mutual and some others getting taxpayer money routinely count part-time jobs toward their promised full-time worker totals in Texas. The Associated Press reports Washington Mutual receiving $15 million from the Texas Enterprise Fund to create 4,200 “new full-time employment positions” by 2011. The company adjusted its job tally, in a 2008 report to Governor Rick Perry, to include part-time workers “who when combined, constitute a full time employee working a 40 hour work week.” AP obtained the document using the Texas Public Information Act. Neither WAMU, now owned by JPMorgan Chase, nor the governor’s office would say how many part-time jobs the bank has counted in its Texas job creation totals. Chase spokesman Greg Hassell said since signing the state contract in 2005, Washington Mutual/Chase has decreased its number of part-time employees in Texas by 200 positions, while adding far more full-time positions. Perry spokeswoman Katherine Cesinger says calculating part-time jobs to satisfy full-time job requirements is common among companies receiving grants from the Enterprise Fund. Perry is asking the legislature to replenish the Enterprise Fund and its sister account, the Emerging Technology Fund.
The nation’s biggest oil companies certainly won’t need a bailout from the federal government; they won’t have to defend staggering profits anytime soon either. Oil producers, service companies and other oil-sector outfits begin reporting first-quarter earnings next week. The results are expected to be the lowest in several years, perhaps a decade. A year ago, crude prices were in the triple digits on their way to a peak near $150 a barrel in July. They spent the latter part of 2008 tumbling and now hover around $50 a barrel. Natural gas prices have fallen sharply too as the world grapples with a severe recession that’s crushed energy consumption. A benefit for consumers has been lower gasoline and other fuel bills. On average, pump prices are roughly 40 per cent lower than they were a year ago, when gasoline topped $4 a gallon.
Global spending on offshore drilling is forecast to rise 32 per cent through 2013, despite reduced spending in 2009 and 2010. That’s according to the latest “World Offshore Drilling Spend Forecast” published by Douglas-Westwood and Energyfiles. Total global wells will rise by seven per cent, despite a sharp decline this year. Asia is predicted to have the highest activity. The report says engineering makes up the biggest cost sector in offshore drilling, followed by rigs.
The Sunoco refinery in Tulsa is being sold to a Dallas company for $65 million. Sunoco and Holly announced the sale on their Web sites. The agreement calls for Holly to invest in several upgrades that company officials say are needed to ensure the long-term viability and environmental compliance of the refinery. The refinery in West Tulsa has about 400 employees. Holly is an independent petroleum refiner and marketer that produces high value light products such as gasoline, diesel fuel and jet fuel. The sale is expected to close by June 1st.
Commercial banks and investment firms borrowed less over the past week from the Federal Reserve’s emergency lending program, a hopeful sign some credit stresses are easing a bit. The Federal Reserve says commercial banks averaged $48.5 billion in daily borrowing over the week that ended Wednesday. That was down from $49.2 billion in average daily borrowing logged over the week ended April 8th. Investment firms drew $12.9 billion over the past week from the Fed program. That was down from an average of $17.6 billion the previous week. The identities of financial institutions that borrow from the Fed program are not released. They now pay just a half per cent in interest for the emergency loans.
West Virginia Attorney General Darrell McGraw is suing a Texas company, accusing it of ruining the credit of at least 21 state residents who paid more than $30,000 for help lifting them out of debt. Able Debt Settlement chief operating officer Ralph Lewis said his company did nothing of the sort. He said Able Debt provides credit processing services and doesn’t negotiate with creditors. McGraw is asking the Kanawha County Circuit Court in Charleston to bar the Irving-based company from doing further business in West Virginia. His lawsuit also seeks restitution and a $5,000 civil penalty for each violation of state law. Lewis accuses McGraw of intentionally misinterpreting state law, abusing his power and forcing people into bankruptcy.