Pulte Homes and Dallas-based Centex say they will combine in a $1.3 billion stock-for-stock deal that will create the nation's largest homebuilding company. The deal also includes $1.8 billion of debt, while the combined business has more than $3.4 billion in cash as of March 31st, the companies said. Both homebuilders' boards unanimously approved the transaction. Pulte President and Chief Executive Officer Richard J. Dugas, Jr., says the combination "puts us in an excellent position to navigate through the current housing downturn."
Wholesale inventories were cut in February by the steepest amount in more than 17 years as companies struggled to reduce stockpiles amid slowing sales. The Commerce Department says wholesale inventories dropped 1.5 per cent, the most on records dating to January 1992 and more than double analysts' expectations. The report shows companies are getting inventories under control, a positive sign because once stockpiles have been adjusted amid the recession, businesses may be able to increase orders for new goods.
Federal regulators have proposed five options for reining in the short-selling of stocks as investors and lawmakers clamor for brakes on moves they say worsened the market's downturn. The Securities and Exchange Commission voted unanimously to advance a handful of approaches to new rules restricting short-selling, in which traders try to profit from a stock's decline by selling borrowed shares. One of the options put forward for public comment involves restoring the so-called uptick rule, which requires short sellers to wait to sell shares until a stock trades at least a penny above its previous trading price. The SEC could settle on one short-selling plan and formally approve it sometime after a 60-day comment period.
Faced with the danger of a worsening recession, Federal Reserve policymakers at their March meeting took the step of plowing $1.2 trillion into the economy to drive down interest rates and entice Americans to start buying again. New documents provide insights into the Fed's decision to revive the economy by buying long-term government debt and boosting purchases of mortgage-backed securities from Fannie Mae and Freddie Mac. According to the documents, "most participants viewed downside risks as predominating in the near term." The documents offer details about the central bank's closed-door meeting on March 17th and 18th.
The U.S. Treasury Department plans to extend the troubled asset relief program to certain life insurers, according to a report by the Wall Street Journal. The announcement is expected within the next several days, the Journal reported, citing people familiar with the matter. Earlier this year, bank regulators approved applications from some insurers to become savings and loan holding companies, which is needed to qualify for federal funds. Several life insurers have applied for the TARP funds, including Prudential Financial, Hartford Financial Services Group and Lincoln National.
Environmental researcher Trucost is ranking 91 funds according to the greenhouse gas emissions that are tied to their investments. According to the report, companies in some funds spew a lot more greenhouse gases than others. The fund with the biggest footprint was 38 times more carbon intensive than the fund with the smallest footprint. Trucost's "Carbon Counts USA" report will feed a growing appetite for emissions data from Wall Street as cap-and-trade laws gain momentum in the U.S. and Europe. Investors also say they need help identifying who could be hit hardest as companies start to pay for the amount of carbon they emit.
Flawed wiring continues to pose a high risk to soldiers at U.S. facilities in Iraq. A military safety inspection team says there's still shoddy and dangerous electrical wiring, which has been blamed for the electrocutions of three servicemen as they showered in their barracks. The safety team says the absence of ground-fault circuit breakers, designed to shut off power quickly in areas near water, is creating what it calls a climate for further "catastrophic results." Some 65,000 U.S. maintained facilities haven't seen an inspector yet. Exposed wiring is also a problem, having claimed eight other lives. The report doesn't specifically name any military contractors but does say more oversight of contractors is needed. Most of the U.S. facilities are maintained by Houston-based KBR. A KBR spokeswoman says safety is the company's top priority.
A Toyota executive says the automaker is prepared to deal with a possible bankruptcy filing by rival General Motors. Toyota Motor Sales USA President Jim Lentz says his company shares about two-thirds of its 500 parts suppliers with GM. Lentz made the remarks at the New York International Auto Show. Analysts fear that an automaker bankruptcy would take down parts suppliers and disrupt production industry-wide. Lentz says the $5 billion parts supplier bailout by the Obama administration will help preserve the supply base. The Tokyo-based automaker builds cars in the U.S. in Kentucky, Indiana and Texas--in San Antonio.
The administration has sent a team of 15 people to Detroit to work with General Motors as it tries to restructure by June 1st. An administration official says the team will be in Detroit over the next two weeks to accelerate the restructuring process laid out by President Barack Obama last week. The official spoke on condition of anonymity because the discussions are private. GM has received $13.4 billion in federal loans and has less than two months to restructure or face bankruptcy. Obama created an auto task force to work with GM and Chrysler, which has received $4 billion in government loans and has until late April to complete an alliance with Italian automaker Fiat.
The Treasury Department says General Motors and Chrysler have launched financing support programs for auto suppliers backed by $5 billion in government funds. The programs provide government guarantees that money owed to the suppliers by the ailing auto makers will be paid. It's funded by the $700 billion bailout fund. Treasury spokeswoman Jenni Engebretsen says the programs will restore credit in a sector that employs more than 500,000 people. The department said last month it would provide financial assistance to the auto suppliers. Besides money from the bailout fund, the government is supporting the auto industry with about $25 billion in loans.
Median CEO pay fell by 6.8 per cent last year, according to Equilar, as reported by the Houston Business Journal. The 2008 median for the CEOs overall pay packages was $8.45 million. Base salary was up 5.7 per cent to $1.06 million and the median cash bonus was $1.47 million. Meanwhile, Challenger, Gray & Christmas says 309 CEOs changes positions in the first quarter—down 16.7 per cent from the same period a year ago.
Texas Land Commissioner Jerry Patterson and the School Land Board have awarded three geothermal energy leases off the Texas coast. Geo Texas, based in Eugene, Oregon, was the winning and only bidder for the right to produce geothermal energy in 128,758 acres of submerged state land off the coasts of Galveston, Brazoria and Matagorda Counties. Once the company begins producing electricity, the Permanent School Fund will earn a 2.05 per cent royalty for years one through ten of the lease, and 3.8 per cent on years 11 through 30. Geo Texas will pay $2 an acre bonus and $3 an acre annual rental.
Officials in Santa Barbara County, California, now oppose offshore oil drilling in their county. The Board of Supervisors generated national headlines last summer by endorsing drilling. Their latest vote cites the need to preserve the county's coastline. The latest resolution, which passed 3-2, will be sent to President Barack Obama and Governor Arnold Schwarzenegger. The vote is largely symbolic, but comes a week before the U.S. Department of Interior is scheduled to discuss oil and gas leasing. Proponents of drilling say advancements have made drilling safer than ever. They also say the county desperately needs cash. Offshore drilling has long been a touchy issue in Santa Barbara, an upscale coastal community 100 miles north of Los Angeles. An oil spill in 1969 coated miles of beach and killed thousands of birds.
The Coast Guard is establishing the Liquified Gas Carrier National Center of Expertise in Port Arthur tomorrow. This is the third such center of expertise—part of the Coast Guard's Marine Safety Enhancement Program. The center will serve as the focal point in the operation and examination of LNG carriers. The center will maintain a ship-rider program to familiariz students with ship design, systems and operations.
Houston-based Mexican Restaurants is selling its La Senorita concept to Hacienda Mexican Restaurants for $2.6 million, according to the Houston Business Journal. Mexican Restaurants now operates 73 Mexican restaurants under the names Casa Ole, Crazy Jose's, Mission Burrito, Monterey's Little Mexico, Monterey's Tex Mex and Tortuga's Mexican Kitchen.
The fifth annual Houston Administrative Professionals Conference is being held tomorrow at the George R. Brown Convention Center. Workshops to sharpen the skills of administrative professionals are scheduled.
The third edition of Who's Who in Black Houston is being released by Who's Who Publishing at the InterContinental Hotel tomorrow evening. The coffee table book features more than 350 profiles of corporate executives, entrepreneurs, media professionals, academics and community leaders.
The C.T. Bauer College of Business is one of 15 graduate schools of business named to The Princeton Review's "Student Opinion Honors for Business Schools" in the April 2009 issue of Entrepreneur. The ranking was created and compiled by The Princeton Review, an education services company. Ratings on based on accounting, finance, general management, global management, marketing and operations.
Business is booming in the sale of belongings that owners can no longer afford to keep at the nation's storage units. For buyers, it's a grab bag that can yield either junk or the luxuries of a life left behind. The troubled economy is reflected in the items being sold. They include trendy clothes, high-end appliances and other indicators that the owners were well off until recently. There's no specific tally of storage unit auctions, but auctioneers say they are busier than ever. Neither auctioneers nor bidders are allowed to inspect the items until after the sale, meaning they are often bidding blindly.
The Fox Network is making a reality show out of the troubled economy. An upcoming series titled Someone's Gotta Go lets employees of a small business decide which one of their colleagues will be laid off. Fox says it has no air date yet for the series, which is being developed by the company behind Big Brother and Deal or No Deal. Each week, a different company lays off an employee. Fox also wouldn't reveal the show's host, which it says is a business consultant who will offer advice to participating companies.