Senate Republicans say they have grave concerns about the agreement between Congressional Democrats and the Bush White House to speed billions of dollars to struggling U.S. automakers. Senator George V. Voinovich, a Republican from Ohio and a leading supporter of the emergency measure, says it doesn't have the necessary Republican votes to pass Congress. Administration officials who were dispatched to Capitol Hill to sell the agreement got an earful of criticism from GOP Senators during a closed-door luncheon. The revolt came as the House began procedural votes on the package. Democrats are pushing to pass it this week.
Shunning government loans, Ford's top executives say they hope to improve the automaker's image, setting it apart from its cash-starved Detroit competitors, General Motors and Chrysler. GM and Chrysler are in desperate need of government money and may not last until the end of the year without it. But Ford set up $23.5 billion worth of credit in 2006. Both CEO Alan Mulally and executive chairman Bill Ford, Jr., tell the Associated Press they are confident that the borrowing, coupled with restructuring and new product plans, will get them through the recession without relying on the government. Ford says the century-old company that bears his family's name might be able to use the independence from loans to its advantage. Mulally says Ford has completed much of the restructuring that Congress is demanding of the other two, slimming down its brands by selling Jaguar, Land Rover and Aston Martin and studying the sale of Sweden's Volvo. He says Ford has cut its factory capacity to match demand, and it anticipates no further cuts will be necessary as long as the U.S. auto market doesn't worsen considerably. The company has announced the closure of 17 factories and eliminated 50,000 jobs since 2005, many through buyout and early retirement offers.
A Congressional panel is taking a critical view of the way the Bush administration has been implementing the financial industry's $700 billion bailout package. The House Financial Services Committee has concerns about the way the money has been spent so far, and wonders why the Treasury Department isn't willing to use the money to reduce foreclosures. A draft report says "the program does not appear to offer any help to already distressed homeowners." The report raises several concerns, some of which center on the Treasury Department's strategy for stabilizing the financial markets. The report also questions whether banks are getting demands from the treasury similar to what the White House is asking of the U.S. auto industry. Last week a Government Accountability Office audit also criticized the lack of oversight in the program.
Some energy executives believe &mash; over the next 20 years or so — oil and natural gas will lose the top ranking as the world's most affordable energy sources. Deloitte last month did the wide-ranging telephone survey of 52 industry professionals. Results were released at its annual oil and gas conference in suburban Houston. Nearly three out of four executives and managers surveyed said oil and gas is the cheapest available energy sources for now, though only 23 per cent believe that will be the case in 25 years. Also about 53 per cent said they think the U.S. could run out of reasonably priced oil within the next quarter century. Few question that fossil fuels will be a vital energy source worldwide for many years. About 42 per cent cited government regulation as the most significant deterrent to investing more in exploration and production. Deeper wells in more inhospitable places, both political and geological, have altered presumptions of doing business in the oil patch. Deloitte conducted the wide-ranging telephone survey of 52 industry professionals. It released the results today at its annual oil and gas conference in The Woodlands. Most of the executives work for companies with annual revenues of more than $100 million. Last week, Irving-based ExxonMobil expanded its energy outlook to include a new section on the development of all "viable" forms of energy and public policy on climate risk. It steadfastly maintains that it's an integrated oil company, however, and that fossil fuels will provide 80 per cent of all global energy needs through 2030.
The Bush administration is scrapping plans to make it easier for older coal-fired power plants to upgrade without installing new pollution controls. The change was first proposed in 2005 and President George W. Bush had hoped to make it final before leaving office in January. Environmentalists and the governors of northeastern states opposed the measure, saying it would let power plants outside the region dump more pollution on them. Environmental Protection Agency officials said they didn't have enough time to complete the new rule. They also said a federal court's rejection of a related measure to control power plant pollution complicated the issue.
Wholesalers inventories were cut back in October by the largest amount since the period following the 2001 terrorist attacks while they watched their sales plunge by a record amount. Analysts predict more grim news in the months ahead as the current recession deepens. The Commerce Department says wholesalers, the companies in the supply chain between manufacturers and retailers, reduced their inventories by 1.1 per cent in October, the biggest cutback since a similar drop in inventories in November 2001. The inventory decline was much bigger than the 0.2 per cent decrease economists expected. Sales at the wholesale level plunged by 4.1 per cent in October, the largest decline on record.
Wall Street financial institutions now being bailed out by the federal government spent millions underwriting the Democratic and Republican conventions weeks before the firms came to Washington looking for a handout. Two new reports say that billionaires, corporations and labor unions dumped $118 million into the nominating conventions for Barack Obama and John McCain. Political conventions have become one of the last refuges for the wealthy to pour unlimited amounts of their own money into the political process. Two private groups, the Campaign Finance Institute and the Center for Responsive Politics, compiled the data from reports required under federal law. The donors included insurance giant AIG, Ford, Citigroup and mortgage lender Freddie Mac.
Office Depot says it will close 112 stores—nine per cent of them — over the next three months and open fewer stores in 2009 in an effort to cut costs. The office-supply retailer will reduce its store base to 1,163. Locations being closed include 45 in the central U.S, 40 in the Northeast and Canada, 19 in the west and eight in the south. Office Depot also will close six of its 33 North American distribution facilities. In 2009, Office Depot will close 14 stores and open just 20 stores, half of what it had planned. The Delray Beach, Florida-based company will take related charges of $270 million to $300 million in 2008 and 2009. The struggling office supply retailer considered store closings in October, when it reported a third-quarter loss due to slumping sales as consumers and small businesses cut back spending.
A federal report shows U.S. airlines improved their on-time performance and baggage handling in October. The U.S. Department of Transportation reports the carriers overall posted a lower rate of domestic cancellations, compared to the same month a year ago. All airlines together averaged an 86.02 per cent on-time rate. Regional carrier Atlantic Southeast Airlines had the worst on-time performance in October, while regional carrier Pinnacle Airlines had the best. Houston-based Continental Airlines had the third-lowest on-time arrival rate in the month at 81.4 per cent. For discount carriers, Southwest Airlines again had the best on-time arrival rate in October at 89.6 per cent, good for fourth-best overall. Year-to-date through the end of October, Fort Worth-based American Airlines was at the bottom among the 19 reporting airlines in on-time performance.
Nevada has a deal with a Dallas firm that finds ways to cut utility bills and save its clients millions of dollars. Members of the Nevada Board of Examiners voted to sign a contract for up to $10 million with LPB Energy Consulting, led by Matthew Berke. The contract runs through August 2012. Nevada Treasurer Kate Marshall says there are no up-front costs or long-term liabilities for her state. LPB's fee is based on actual energy cost savings--and without savings there is no fee. Berke says LPB has similar contracts in several states, including Texas, as well as Massachusetts, Utah, Mississippi and Maine. LPB centralizes data on utility bills and generates reports that pinpoint ways of cutting energy costs.
The top U.N. climate official says a conference of nearly 190 countries has agreed on a set of goals to be included in a new climate treaty in 2009 along with a plan to reach them in the next 12 months. Yvo de Boer says those goals include fixing specific targets for reducing carbon emissions by 2020, the need to raise large-scale funds to help poor countries, and a decision on how those funds will be transferred. A key committee cited scientific studies saying industrial countries must cut carbon emissions by 25 per cent to 40 per cent from 1990 levels within a dozen years. But the committee did not actually adopt that target, and the issue was left for later talks. Activists say they are disappointed with the outcome.
The Screen Actors Guild says it will send strike authorization ballots to its 120,000 members on January 2nd. The votes will be counted on January 23rd, which will not be in time to potentially disrupt the Golden Globe awards like the writers' strike did last year. Approval by 75 per cent of members is required to pass the measure. If approved, the SAG national board can call a strike. Guild president Alan Rosenberg said that the future of professional actors is at stake. The guild remains at odds with Hollywood studios over treatment of Internet productions and actor benefits in the event of unplanned work stoppages.