Dow Chemical announced it will slash 11 per cent of its full-time jobs, or 6,000 positions, close 20 plants and sell several businesses to save money. The Michigan-based company expects the moves to save about $700 million per year by 2010. Dow--which has operations in Freeport--also will temporarily idle 180 plants and prune "a significant portion" of contractors from its payroll. Specifics are pending, but Dow says it will cut output to less than 40 per cent at its massive Freeport complex for several weeks starting later this month. Dow Chemical had said it would review all options to reduce costs and eliminate or defer capital spending. The company says it will take a fourth-quarter charge of $700 million to cover severance payments and plant shutdown costs. But the company denied it will suspend dividend payments as a way to conserve cash. The company expects "the new Dow" to be comprised of three units: joint ventures; performance products; and health and agriculture, advanced materials and other market-facing businesses.
BASF has temporarily shut down a unit in Freeport and cut production at other Texas sites. DuPont said last week it will cut 2,500 employees and 4,000 contractor jobs worldwide. LyondellBasell plans a 15 per cent cut worldwide. The Greater Houston Partnership says there are 413 chemical plants in the Houston area, employing about 33,000 workers.
BMC Software last week said in a regulatory filing it plans to reduce its work force by about 350 employees by the end of the month. That's about six per cent of the company's 6,000 employees. The Houston-based software firm said the cuts could come from its business units, its corporate department and in every market.
Congressional Democrats have sent the White House a draft of a roughly $15 billion auto bailout that's expected to come to a vote this week. According to a draft obtained by the Associated Press, the measure would rush bridge loans to Detroit's struggling Big Three and put an overseer chosen by President George W. Bush in charge of monitoring an auto industry restructuring. The overseer could recall the loans as early as February if the carmakers weren't doing enough to reinvent themselves and become viable. And if the Big Three didn't come up with suitable restructuring plans by the end of March, the "car czar" would have to submit his own blueprint to Congress for a government-mandated overhaul.
Congressional officials say the lawyer who oversaw the 9/11 victims' compensation fund has emerged as a candidate to be the "car czar" in charge of a bailout for Detroit's big three automakers. Kenneth Feinberg, the special master of the federal September 11th fund, is a contender to run a roughly $15 billion auto rescue and work with the Big Three to restructure their beleaguered companies. The White House and Congressional Democrats are near agreement on an auto bailout that would provide loans on December 15th. An emerging bailout plan would draw emergency aid from an existing loan program meant to help the automakers build fuel-efficient vehicles. It would create a federal overseer who could revoke the funds early next year if the companies weren't doing enough to become viable. It could also include a cabinet-level oversight board composed of the heads the Departments of Treasury, Energy, Labor, Commerce and Transportation as well as the Environmental Protection Agency.
Senator Chris Dodd suggests the nation's struggling automakers need new leadership. In remarks on ABC's "Good Morning America," Dodd said changes at the top will convince American taxpayers that a pending government bailout is "necessary and justified." He chairs the banking committee. United Auto Workers President Ron Gettelfinger says organized labor should not be made a scapegoat for company problems. Gettelfinger says the union is ready to help and is willing to reopen bargaining. His comments were made on NBC's "Today" show. Legislation is in the works to provide billions to the automakers. An overseer is part of the package, as it stands.
Ford CEO Alan Mulally says a bankruptcy filing by General Motors or Chrysler would drag his company and industry suppliers into bankruptcy. Mulally reiterated on WJR's "Paul W. Smith Show'' in Detroit that Dearborn, Michigan-based Ford believes it has "sufficient liquidity" to manage its business through the current recession without government support. But Mulally says a bankruptcy filing by GM or Chrysler would start a chain of events "devastating to the U.S. economy."
The government says it has just $15 billion left to spend from the first $350 billion pot of financial bailout money. The Treasury Department says $335 billion has been allocated from the first half of the $700 billion program, which was enacted on October 3rd. Treasury Secretary Henry Paulson, who is overseeing the program, is weighing tapping the second $350 billion. The main goal of the program is aimed at getting financial institutions to lend money more freely again, which would help revive the economy.
The Treasury Department official overseeing the government's financial rescue fund says taxpayers will see a return from the capital the government is providing to banks around the country. The Treasury Department has invested $150 billion so far in 53 banks. In return, it's received preferred stock and warrants to buy additional shares in those banks. But an Associated Press analysis finds that the warrants to purchase about 1.2 billion additional shares have so far lost about one-third of their value, or about $9 billion. Saying "we're not day traders," the director of Treasury's Office of Financial Stability says the government isn't "looking for a return tomorrow." Neel Kashkari says the government is investing in "very high quality institutions of all sizes' and over time, taxpayers should be protected and get money back.
The University of Houston Center for Public Policy has been given a federal grant to create a real estate database to study the causes of foreclosures, according to the Houston Business Journal. The $49,500 National Science Federation grant will help gather data on single-family home sales and foreclosures in Houston from January 2000 through the first quarter of 2008.
Russian news reports say a Moscow court has freed on bail a gravely ill former executive of dismantled oil giant Yukos. Interfax and Ria-Novosti say Moscow City Court set bail for Vasily Aleksanian at $1.8 million. Aleksanian has AIDS and tuberculosis and has almost completely lost his eyesight. He was moved from prison to a clinic earlier this year pending his trial on embezzlement and money-laundering charges. His release would be a rare victory for defendants in cases against Yukos and its jailed founder, Mikhail Khodorkovsky. Yukos was once Russia's largest oil producer, but it was then broken up and sold off in auctions. The move was seen to be the Kremlin's punishment of Khodorkovsky for his political ambitions.
The head of the International Energy Agency says the global demand for oil could shrink next year if the economies of China, India or the Middle East slow down fast. Nobuo Tanaka says that if current economic conditions continue he expects only slight growth in oil demand in 2009. But he says a total global decline remains a possibility if a slump hits the economies of China, India or the Middle East. Tanaka was speaking at U.N. climate talks in the western Polish city of Poznan. The Paris-based agency recently slashed its global oil demand forecasts for the period to 2013. It said the world oil market had been shaken by high prices earlier this year followed by the global economic slowdown.
The climate conference is starting its second week with attention focused on proposed deals to protect the world's forests and to set new limits on carbon emissions for industrial countries. Delegates say progress was slow during the conference's first week. Some 190 countries are trying to resolve issues such as how to raise funds to help developing countries fight global warming and adapt to its effects. Such issues are critical to completing a new treaty by December 2009 that could replace the Kyoto Protocol when it expires in 2012. California Governor Arnold Schwarzenegger told delegates in a video message that fighting climate change also would help revive economies. BP, Royal Dutch Shell and 138 other corporations are urging delegates at the climate talks to commit to deep and rapid cuts in greenhouse gas emissions. The companies say the recession should not be used to delay investments needed to cut emissions.
The deputy executive director of the International Energy Agency presents the "World Energy Outlook 2008" Tuesday at Rice University's Baker Institute for Public Policy. Richard Jones will talk about whether the world faces a supply crunch because of geology or inadequate investment. He'll also address the impact a post-Kyoto policy framework might have on future energy choices.
The nation's public transportation systems saw the largest quarterly ridership increase in 25 years--even as gas prices declined. The American Public Transportation Association reports U.S. subways, buses, commuter rail and light-rail systems saw a 6.5 per cent jump in ridership from July to September. During the same quarter, Americans drove 4.6 per cent less on the nation's highways. Riders made 2.85 billion trips on public transportation during the third quarter--up from 2.67 billion trips a year ago. Light rail saw double-digit growth in nine regions, including Baltimore, Minneapolis and Dallas. Dallas Area Rapid Transit's Web page has steps to provide novices with tips on using the bus or rail. Association President William Millar says many riders may have tried public transportation to get away from high gas prices--but have since found it works for them.
State officials and Amtrak last week agreed on the scope of a study to determine the feasibility of expanding passenger service through Kansas, Oklahoma and into Texas. The Kansas Department of Transportation said it has budgeted $200,000 for its part of the study. The Oklahoma and Texas Transportation Departments are also cooperating in the study, which will be done by Amtrak. The study aims to identify construction and equipment requirements, as well as potential annual operating costs needed to run the service. The study is expected to be complete sometime in 2009. Proposed stops in Kansas include existing stations in Lawrence, Topeka and Newton. New stations would be placed in Emporia, Strong City, Wichita and Winfield or Arkansas City. The expansion would create service from Kansas City, Missouri, to Fort Worth.
Even as auto dealerships have been closing down around the country, Houston-based Paramount Automotive Group has opened Performance Mazda on the Southwest Freeway near Beltway 8 and Bissonnet. The new-concept dealership has interactive terminals allowing the customer to configure their own car, check on its availability and determine pricing and financing options, even determine monthly payments. The terminals offer a chance to configure exterior and interior colors, engine types, audio and towing packages and other features such as cargo areas and locking systems.
Boeing, airlines and engine makers are testing jet fuel made from algae and a nonfood plant called jatropha. Continental Airlines says it will test the biofuel on a demonstration flight, with no passengers, January 7th in Houston. One of the engines of the Boeing 737-800 will be powered with a mix of jet fuel and fuel derived from algae and jatropha seeds. Boeing is a partner in the project that Continental says will be the first using algae as a fuel. Air New Zealand also is testing jatropha fuel in a 747 jetliner using technology developed by UOP, a Honeywell company. The Tacoma News Tribune reports Boeing was instrumental in forming the Algal Biomass Organization in Seattle to look for sustainable fuels that don't use farm land.
Continental Airlines is making an audio/video on demand in-flight entertainment system available to economy class customers on all its Boeing 757-200 aircraft. All 39 of those planes currently in service have been fitted. These aircraft are used primarily on trans-Atlantic flights to and from Continental's New York hub at Newark Liberty International Airport. Continental will soon offer 80 channel of live television on domestic flights with satellite-based programming provided by DirecTV.
The Pentagon is ready to start construction of a $724 million expansion of Brooke Army Medical Center in San Antonio. The project was ordered by the 2005 Defense Base Closure and Realignment Commission. It'll move the trauma and emergency functions of Wilford Hall Medical Center at the Crosstown Lackland Air Force Base. Wilford Hall will become an outpatient surgical center. The hospital construction is the most expensive of the 78 BRAC-related projects in San Antonio, where military medical training and care will grow with the consolidation of other facilities. Nearly 760,000 square feet will be added to Brooke, which has the army's only burn center and a large number of amputees. Construction is scheduled to begin next month, with realignment of the facilities and other BRAC projects to be completed by September 2011.
Madagascar farming officials say a deadly and incurable crop disease has spread widely in the island's main vanilla-producing area. Assessment teams say in a report that the world's main vanilla producer has to radically change farming methods to fight the fungus attacking plants at the root. Malagascar's agronomic research chief Simeon Rakotomamonjy says the situation is "critical." He says the disease has hit 80 per cent of plantations at two of the three main centers of vanilla production on the Indian Ocean island's northeast coast. Most of Madagascar's vanilla is exported to the United States, where it is used for making confectionary, soft drinks and ice cream.