With oil prices skyrocketing, and supply fears growing, members of OPEC and oil company officials at the World Petroleum Conference in Spain have their work cut out for them. World interest in the Madrid meeting will be focused on what OPEC officials say about how to stabilize market volatility. But no one is expected to offer any solutions, so that has lowered expectations that any decisions could cool the market. An oil market forecast will be released by the International Energy Agency on Tuesday. More than 600 research papers are also being presented. Organizers are seeking to reflect environmental awareness. They say that, for the first time, the meeting will offset its greenhouse gas emissions through purchase of carbon credits that will be invested in a Guatemalan hydroelectric plant.
The construction of a coal-fired power plant in southwest Georgia has been effectively halted by a judge who says the plant's builders must first obtain a permit from state regulators that limits the amount of carbon dioxide emissions. State regulators and Houston-based plant developer Dynegy have dismissed the arguments, noting that there is no federal standard to reduce carbon dioxide emissions. Environmental activists say the decision will have far-reaching implications. They say it is the first decision that applies the same legal standard used by the Supreme Court's April 2007 finding that carbon dioxide is a pollutant. The $2 billion Longleaf energy plant is expected to emit as much as nine million tons of carbon dioxide each year and 4,700 tons of sulfur dioxide.
Microsoft stopped selling its Windows XP operating system to retailers and major computer makers on Monday. This, despite protests from some PC users who don't want to be forced into using XP's successor, Vista. Once computers loaded with XP have been cleared from the inventory of PC makers such as Dell and Hewlett-Packard, consumers who can't live without the old operating system on their new machine will have to buy Vista Ultimate or Vista Business and then legally "downgrade" to XP. Microsoft will still allow smaller mom-and-pop PC builder shops to buy XP for resale through the end of January. A version of XP will also remain available for ultra-low-cost PCs such as the Asus Eee PC. Last week, Microsoft said it would extend technical support for six-year-old Windows XP through 2014, instead of 2009 as planned.
Inflation, the rising cost of health insurance, fuel and energy are the top concerns of small business owners, according to a survey by the National Federation of Independent Business and Wells Fargo, according to the Houston Business Journal. The survey shows 42.3 percent of American small business owners rank fuel costs as a critical concern—up from 26.1 percent on the 2004 survey. But the price of health insurance remains the number one problem, as it has been for 20 years. Tax complexity is also listed as a concern.
A Wal-Mart spokesman says the company will begin replacing logos on the front of its U.S. stores with a new design beginning this fall. He says the change would reflect changes customers already have seen in some store signs and advertisements, but he didn't elaborate. The Wall Street Journal reports that the new look would include eliminating the hyphen in the company's name, now shown as a star at its more than 3,600 U.S. stores. According to the Journal, the new logo would show the company's name in white letters on an orange background, followed by a small starburst.
The Woodlands-based Chicago Bridge & Iron has contracted to build a $90 million large-scale hydrogen plant for a California refinery. CB&I will provide engineering, procurement and fabrication for the plant, which will help the refinery meet new state clean fuel requirements. The project is slated for completion in early 2010.
Chrysler says it will indefinitely close one Missouri plant and cut production at another due to slumping demand for trucks and other large vehicles. Officials with the Auburn Hills-based automaker said Monday in a conference call that it will shutter the St. Louis south plant, which makes minivans, effective October 31st. The St. Louis north plant, which makes full-size pickup trucks, will reduce operations from two shifts to one. A slowing economy and gasoline prices above $4 per gallon have cut U.S. car sales. Those who are buying are picking more fuel-efficient models. General Motors and Ford have already announced cuts due to the market downturn. Chrysler announced cuts in November.
The computer screen on Scott Topping's desk at Dallas-based Southwest Airlines flicker with row after row of dates and numbers. But they have nothing to do with arrivals and departures. They track the price of oil futures for the next several months, and they tell a grim tale: there's no letup in sight from record prices for jet fuel. It's topping's job to oversee Southwest's battle to control surging fuel costs. It is the most successful program of its kind in the airline industry. In the first quarter of this year, Southwest paid $1.98 per gallon for fuel. Fort Worth-based American Airlines paid $2.73, and United paid $2.83 per gallon in the same period. Since 1999, hedging has saved Southwest $3.5 billion. It has sometimes meant the difference between profit and loss. In the first quarter, hedging gains of $291 million dwarfed Southwest's $34 million profit. Hedging is a financial strategy that lets airlines or other investors protect themselves against rising prices for commodities such as oil by locking in a price for fuel. It has been described as everything from gambling to buying insurance.
Dell gave its ex-chief financial officer $300,000 for helping manage the company's responses to investigations of its accounting practices. Round Rock-based Dell disclosed last week's payment to 61-year-old Donald Carty, who remains on the Dell board. Details are in a filing with the Securities and Exchange Commission. Carty is a former chief executive of AMR--the parent of Fort Worth-based American Airlines. Carty stepped down as Dell CFO on June 13th, after 18 months on the job. He was hired at a time when Dell's accounting was under scrutiny. Brian Gladden succeeded Carty as Dell CFO. Carty, in the last fiscal year, had a salary of about $766,000, non-stock incentives of about $934,000 and other compensation of nearly $3.7 million. Almost all of that was payment for stock options that expired when Dell suspended exercise of options because of delay in issuing its annual report.
The 480-room Wyndham Greenspoint is rebranding itself as the Hilton Houston North. The hotel near Houston Intercontinental Airport is undergoing renovation.
The head of the Screen Actors Guild doesn't want to hear any strike talk even as a deadline for contract expiration looms. Union President Alan Rosenberg says in a statement that the union hasn't begun the process of taking a strike authorization vote. He says any strike or lockout talk is a distraction. The contract ran out at 12:01 a.m. Tuesday, but SAG has said it is willing to keep talking. Anxiety has been growing in Hollywood that actors might strike or studios could lock out performers. The previous Writers Guild of America strike devastated production from November through February. SAG leaders have been fighting a deal reached between producers and the American Federation of Television and Radio Artists. SAG leaders are urging its members who are also in AFTRA to vote no and try for a better deal./P>
Negotiations continue on a new contract between an actors' union and Broadway theater producers. The old pact between Actors' Equity and the Broadway League
Arkansas Governor Mike Beebe joined state and local officials to celebrate progress on a major pipeline in Arkansas. The so-called Fayetteville Lateral is part of the nearly $5 billion project for Boardwalk Pipeline Partners. Boardwalk, which has offices in Houston and Owensboro, Kentucky, has more than 13,000 miles of pipeline. The Arkansas portion, called the Fayetteville Lateral, will provide about 1,350 jobs at peak construction on a payroll of $57 million. The Arkansas line begins in Conway County, Arkansas, where storms and tornadoes wreaked havoc just months ago. The governor said the pipeline project has made for "a brighter day" for a region that suffered so much loss last winter and spring. Beebe said the project also will benefit the state and counties in tax revenues. The Arkansas pipeline will extend 167 miles through eight counties as it heads east to Lula, Mississippi. The 36-inch pipes will move natural gas from the Fayetteville Shale Formation to states in the northeast, southeast and upper Midwest. The Boardwalk project also calls for the construction of major transmission lines in Oklahoma and Texas.
An investment fund led by Texas Rangers and Dallas Stars owner Tom Hicks has agreed to buy the leading manufacturer of juice box packaging. York, Pennsylvania-based Graham Packaging Holdings makes plastic juice and beer bottles. Dallas-based Hicks Acquisition Company plans to take the company public for $700 million, plus assumption of $2.29 billion in debt and other costs. The Hicks fund said it expects a final deal in the next few days. It says it believes the deal to be the largest ever between a special purpose acquisition company and an industrial company. The container company will be renamed Graham Packaging Company and apply for listing on the New York Stock Exchange. Current Graham owners, led by buyout firm the Blackstone Group, will remain the largest single shareholder with about 34 percent of the new company.
The government releases the monthly employment report on Thursday this week, just ahead of the 4th of July. Analysts are looking for another report showing contraction in payrolls, not good news for workers. Manufacturers release monthly auto sales figures on Tuesday. The Institute for Supply Management releases its monthly snapshot covering manufacturing activity and the government reports on construction spending for May. On Wednesday, the government reports on May factory orders. Finally, on Thursday, ISM reports on the status of the services sector.