Enron has distributed another $3.37 billion to creditors, including $3.34 billion in cash and $34 million in shares of Portland General Electric. Enron says its total distribution to creditors is now at $9.39 billion since November 2004. That's a return to creditors of 26 percent to date from Enron and 29 percent from Enron North America.
Job cuts soared last month, topping the 100,000 mark for the first time since last January. Outplacement firm Challenger, Gray and Christmas says it's the second straight month of increased job cuts, topping the August tally by 54 percent and the level of a year ago by 40 percent. The increase was led by the auto industry, which announced nearly 34,000 cuts. That was dominated by suppliers who are starting to feel the effects of the production cutbacks at Ford, General Motors and DaimlerChrysler. There were also sizable increases in the telecommunications and housing industries. So far this year employers have announced more than 639,000 job cuts, a drop of 18 percent from a year ago.
It's a ruling that could affect thousands of American workers. A federal panel is ruling that workers permanently assigned as shift supervisors should be considered part of the supervisory staff. That means they're not covered by the federal law that guarantees the right to union representation. But the National Labor Relations Board also says those who rotate on and off of supervisor shifts aren't exempt from union coverage. The AFL CIO is unhappy. It's pointing to one of the board's dissenters who warns it'll create a new class of workers who aren't quite management but don't have regular worker protections. But it's unlikely the matter is over. A court challenge is expected, possibly all the way to the Supreme Court, which has overturned such rulings twice before.
A unit of CenterPoint Energy has won approval from federal regulators to build and operate a 172-mile natural gas pipeline from Carthage to its Perryville hub in northeast Louisiana, according to the Houston Business Journal. The Federal Energy Regulatory Commission backed the $425 million project, which is expected to be operational by the first quarter of 2007.
The Pending Home Sales Index compiled by the National Association of Realtors rose 4.3 percent in August. At the same time though, it was still more than 14 percent below the year-ago level. The trade association's chief economist calls this "a hopeful sign.'' David Lereah says his sense is that home sales may have reached a low in August and that home sales should be fairly stable over the next two months. Professor Peter Morici of the University of Maryland's Robert H. Smith School of Business doesn't see it quite that optimistically. He believes home sales will be weak through the winter, that home prices are likely to continue falling and that the inventory of unsold homes will remain high. The index is based on contracts signed in August.
New data released by the Census Bureau show homeowners in every state but one spent more of their incomes on housing costs last year than at the start of the decade. The exception is Alaska, where spending held steady. Housing costs are defined as mortgage payments, taxes, insurance and utilities. Homeowners across the U.S. spent nearly 21 percent of their incomes on housing costs last year, compared with just under 19 percent in 1999. Analysts blame rising home prices, higher interest rates and lower incomes for hurting affordability. While the housing market has softened in many areas, home prices are still higher than they were at the start of the decade. Median home values jumped 32 percent from 2000-to-2005, to $167,500. Household incomes, meanwhile, have fallen 2.8 percent during the same period.
Analysts think the drop in gasoline prices may have helped auto sales last month. Economists look for domestically-produced car sales to pick up to a 5.4 million annual rate from 5.3 million in August and for light-truck sales to be at a 7.2 million annual rate compared with 7.1 million in the prior month. Some think any increase over a year ago could be deceiving. They note many manufacturers had bad months last year due to the fallout from Hurricane Katrina and a hangover from big incentives offered during the summer that included employee discounts for everyone.
The clock is ticking for the United Steelworkers and Goodyear Tire and Rubber. The union has warned the tire maker that unless a tentative agreement is reached the contract with 14,000 workers will end this Thursday. They remain at odds over job security, plant closings and retiree health care. The two had agreed to a day-to-day extension agreement after the contract expired in July. It included a provision that either side could end the deal with 72-hour notice. The union represents workers at 12 plants in ten states.
Christus Health has leased office space in the Galleria area on West Loop South between Post Oak and San Felipe, to consolidate more than 200 employees by mid-November, according to the Houston Business Journal. Relocating employees work in administrative functions such as accounting, purchasing and financial services. Employees from Christus' corporate office on North Loop West will join them, as well as staff from other Gulf Coast-region offices. The former Christus St. Joseph Hospital was sold in August to Hospital Partners of America of Charlotte, North Carolina.
Medical treatment supplier Baxter International said it's agreed to sell its Transfusion Therapies business to Texas Pacific Group for $540 million. The maker of treatments for cancer, kidney disease and other illnesses says it expects the sale to the Fort Worth-based private-equity investment firm to close by the first quarter of 2007. Texas Pacific will get Transfusion Therapies' global product portfolio of manual and automated blood-collection products and storage equipment. It'll also get five factories in the Dominican Republic, France, Puerto Rico and Tunisia. Suburban Chicago-based Baxter says selling the unit will allow it to focus on business with longer-term strategic value. Transfusion Therapies creates products used by hospitals, blood banks and plasma-collection centers to collect and process blood and blood components for therapeutic use. Baxter says the unit has about 3,500 workers and sales of more than $500 million a year.
Stewart Title has opened a new office in Budapest, Hungary, as the primary underwriter fro European transactions for Houston-based Stewart Information Services, according to the Houston Business Journal. The company's London office will oversee the Budapest office. The London office also oversees operations in the UK, Spain, Czech Republic, Poland, Slovakia, Slovenia, Turkey, Romania and Australia. Stewart has already closed several transactions in Hungary, including one that involved the Budapest Stock Exchange and another involving a chain of retail malls. Stewart Title provides title insurance for residential and commercial properties.
Wood Group Pressure Control has received two long-term supply contracts from Saudi Aramco for a $15 million high-tech plant to manufacture oil equipment in Saudi Arabia. The contracts include the sale of wellhead assemblies and valves and for the establishment of a manufacturing facility to supply Aramco's onshore and offshore oil and gas production well sites.
Pier One Imports investors have bid up shares in recent weeks on buyout speculation. But the Fort Worth-based home decor retailer's discontinuation of its dividend is a reminder that the business continues to struggle. Some analysts had predicted for about a year that Pier One would have to cut or eliminate the dividend, given mounting operating losses and continued weak sales. Pier One stock had risen about 20 percent in the last month. That includes a 14 percent spike since an Icelandic investor reported a September 1st confidentiality agreement with pier one about a possible transaction. Pier One has been struggling with declining sales and profits as discount retailers such as Target and Wal-Mart rolled out low-priced home furnishings. That ate into Pier One's market share.