Friday PM January 22nd, 2010

American Airlines says it will lay off up to 175 pilots—about two per cent of its 7,800 pilots--beginning next month because it needs fewer pilots after cutting some flights. American sent notices to 80 pilots, telling them that they will lose their jobs at the end of February. A spokesman said there could be a second round of furloughs in the spring. American last year cut capacity about seven per cent as it struggled with a downturn in travel during the rough economy. The Fort Worth-based air carrier already has about 1,800 pilots on furlough. They were laid off but retain rehiring rights by seniority. American last furloughed pilots in 2005. Gregg Overman with the Allied Pilots Association says the pilots losing their jobs in February are among those who rehired in the past few years. American's parent, AMR Corporation, said this week it lost $344 million in the fourth quarter. The company has lost more than $3.5 billion in the past two years. The company says it has too many pilots after cutting some flights because of weak travel demand, as well as fewer pilot retirements than expected.

Continental Airlines pilots say they're happy to see that, after posting a full-year loss, the carrier posted a profit in the fourth quarter. But they're waiting to hear what will be done about pilot pay, work rules, retirement and benefits. The Air Line Pilots Association says the pilots' contract is more than a year past its amenable date. Negotiations began in July 2007. Continental pilots say they've made about a billion dollars in wage, work rule and benefit concessions over the last five years. ALPA represents nearly 53, 250 pilots in 37 airlines, including about 5,000 at Continental. There are 147 Continental pilots currently on furlough.


A Houston jury has awarded $18.6 million to San Antonio-based Zachry Construction in its contract dispute with the Port of Houston Authority, according to the Houston Chronicle. The amount is nearly $20 million after adding money the court earlier had found was wrongly withheld by the port. The Port Authority plans more litigation. The dispute centered on a June 2004 contract to build a 1,600-foot wharf at the Bayport terminal. Port officials said they had underestimated the needed size of the wharf and needed it to be 332 feet longer. The port's new requirements and disagreements over change orders led to the contract lawsuit.


The Bureau of Labor Statistics says the unionization rate of workers was 12.3 per cent in 2009, slightly under the 12.4 per cent rate in 2008. In the private sector, the rate dropped to 7.2 per cent from 7.6 per cent. The data shows the median usual weekly earnings of full-time wage and salary union members were $908 per week, compared to $710 for workers not represented by unions. Secretary of Labor Hilda Solis says union members can earn 28 per cent more than their non-union counterparts. She says data shows union members have better access to health care and retirement and leave benefits.

More union members now work for the government than for private employers, partly because of layoffs caused by the recession. The Bureau of Labor Statistics says union membership in the private sector plummeted by ten per cent last year. Overall union membership declined by 771,000 workers last year to 15.3 million. The membership rate fell to 12.3 per cent of all workers in 2009 from 12.4 per cent the previous year. The drop was offset slightly by a gain of 64,000 members in local, state and federal government. Those workers now make up 51.5 per cent of all union members. Union membership has declined steadily since its peak of about 35 per cent of workers in the 1950s, and the recession quickened the pace.


Tyson Foods is laying off 480 workers in Iowa as it shifts some beef and pork production from its plant in Council Bluffs to Texas and Tennessee. The company based in Springdale, Arkansas, says the move is designed to bring production closer to its growing customer base in the south. The company says part of the second-shift production in Council Bluffs will be suspended in mid-March and about 480 of the plant's 1,300 workers will be laid off. Production will be moved to plants in Goodlettsville, Tennessee, and Sherman, Texas. The company laid off workers will be given the chance to apply for jobs within Tyson.


Every day for a week, gasoline prices have come down. But the national average for a gallon of regular is still nearly $2.73--and that's higher than at any point last year. Prices have been driven higher amid a ten-month rally in the price of energy commodities, including a doubling of oil prices to nearly $80 a barrel by the end of last year. This month, though, crude prices are coming down. Government reports find that the U.S. hasn't yet regained its appetite for petroleum. The economy may be slowly recovering, but Americans aren't burning more fuel than they did last year. Experts still say they think gasoline prices will reach $3 a barrel sometime this spring. But they say it may take longer than they originally expected.


The Vatican is seeing signs of improvement for its finances this year, despite problems caused by the global economic crisis. Top prelates met this week to discuss the financial outlook for 2010. The Vatican said in a statement that "despite the general situation" there are signs of "a slight improvement." Most of its expenses would come from payroll as well as Vatican Radio and other media divisions. The Vatican did not release 2010 forecasts, and its 2009 financial figures will be published later this year. The Vatican ran a deficit in 2007 and 2008 as its finances and donations from across the world were hit by the downturn. The Vatican has published annual figures since 1981, in part to debunk the idea that it is rich.


President Barack Obama is telling voters in Ohio, wracked by high unemployment, that investments in clean-energy technologies will help boost the nation's economy. Obama planned today's visit to test an aggressive populist push on jobs, a top concern for voters. The white house is shifting its message to emphasize the economy heading into fall elections expected to be difficult for democrats. Before Obama landed in Cleveland, Ohio reported that its unemployment rate climbed even higher in December, to 10.9 per cent from 10.6 per cent the month before. In northeast Ohio, where steel mills have given way to rust, Obama toured EMC Precision Manufacturing, based in Elyria, and visited with some of the 44 employees still on the factory floor. A year ago, the family-owned maker of custom-made machine products had 77 employees.


President Barack Obama believes Federal Reserve Chairman Ben Bernanke will win another term despite senators' hesitation over his willingness to discuss what steps the central bank will take to add much-needed jobs. Deputy Press Secretary Bill Burton told reporters traveling with Obama to Ohio that the White House still believes Bernanke will get another term at the helm of Fed. Burton says Obama has "a great deal of confidence" in the steps Bernanke has already taken and he is "the best person for the job." Burton also said the White House still is working to get Bernanke confirmed and there's no backup plan. Some senators have said they want more information supporting Bernanke, a holdover from Republican President George W. Bush.


A $10.5 million research project to map sunflowers' DNA sequence could one day yield a towering new variety for both food and fuel. Researchers envision crossbreeding a standard sunflower with Texas' wild Silverleaf variety to produce bright yellow flowers up to 15 feet tall, with tasty seeds and stalks filled with complex sugars to be turned into ethanol. They are working now on the genomics of sunflower project funded by the U.S., Canadian and French governments. Participants plan to map the genome for the greater sunflower family, which includes more than 24,000 species of sunflowers, lettuce, artichokes and other plants. Researchers say the genetic map could be used to make crossbreeding more precise and more quickly produce plants with desired traits.


The Bay Area Houston Economic Partnership will award the 2010 Quasar Award for Economic Development Excellence to Texas State Representative Craig Eiland this evening at the South Shore Harbour Resort and Conference Center in League City. Eiland was selected for championing the restoration of the University of Texas Medical Branch at Galveston.


The number of rigs actively exploring for oil and natural gas in the U.S. rose by 34 this week to 1,282. Houston-based Baker Hughes says 833 rigs were exploring for natural gas and 437 for oil. Twelve were listed as miscellaneous. A year ago this week, the rig count stood at 1,515. Texas gained 15 rigs. The rig count tally peaked at 4,530 in 1981, during the height of the oil boom. The industry posted a record low of 488 in 1999.


Earnings

Schlumberger says oil drilling has started to recover after a year-long slump in crude prices that pushed down the company's fourth-quarter profit by 31 per cent. The Houston oil services company says its business will likely benefit as oil demand increases this year. A barrel of oil jumped from about $40 in March to nearly $80 at the end of 2009. Schlumberger reported net income of $795 million for the fourth quarter. Revenue fell 16.4 per cent to $5.74 billion. Analysts expected revenue of $5.44 billion. For the full year, the company earned $3.13 billion on revenue of $22.7 billion.


Burlington Northern Santa Fe is reporting a smaller-than-expected drop in fourth-quarter earnings. The Fort Worth-based rail company is being purchased by billionaire investor Warren Buffett's Berkshire Hathaway. BNSF says its profit slipped 13 per cent to $536 million, from $615 million in the 2008 period. Revenue fell to $3.68 billion from $4.37 billion a year earlier, with the biggest declines seen in shipments of industrial products. Industrial product demand has fallen off because of the continued slump in housing and construction industries. Burlington Northern also says revenue was hurt by lower fuel surcharges. BNSF says it expects the economy to continue to gradually improve this year.


Kimberly-Clark says price hikes for things like Huggies diapers helped to lift profits in the fourth quarter. The company, based in Dallas, earned $492 million for the three months ended December 31st. That's 17 per cent higher than its profit of $419 million a year ago. Sales jumped eight per cent to $4.98 billion, helped by a weaker dollar and the higher selling prices. Kimberly-Clark raised prices last year to offset higher ingredient costs and hasn't rolled them back even as those input costs fall. Analysts forecast $4.92 billion in sales. The company expects revenue growth of five to six per cent.


 

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