Tuesday PM December 4th, 2007

Opening statements presented in BP Texas refinery blast civil trial...Emirates Airlines inaugurates Houston to Dubai nonstop service...Dow Chemical cutting two percent of workforce...

Opening statements have been presented in the BP Texas City refinery blast civil trial in Galveston. Eight men are suing BP, alleging the company tried to make big profits in the short term, ignoring warnings of deteriorating equipment. The company is accused of cutting corners on maintenance, repairs, upgrades and training. BP disputes links between budget cuts and the blast. Some 4,000 claims were filed by nearly 3,700 plaintiffs after the explosion and fire. BP has spent more than $1.6 billion settling 2,425 claims. The London-based firm says it's spending $1 billion on improvements and upgrades at the plant.

Emirates Airlines has begun operating its new Houston to Dubai service, initially three times a week, with plans to increase to daily service in February. The airline's chairman--Sheik Ahmed Bin Saeed al-Maktoum--says the Americas is a high priority in the carrier's aggressive expansion plans. The Houston service marks the 99th destination in 62 countries served by the airline. Hiran Perera with Emirates says this route has been added because of Houston's energy industry ties with the oil-rich United Arab Emirates.

"Houston is important because it's an oil center and, you know, in the Middle East, Dubai is the largest distribution center for the entire region. You know, the Middle East being, of course, naturally lot of points there which is important in terms of oil exploration and all the oil fields, so there's a natural connection between the Middle East and Houston. So a direct flight and a direct connection between Dubai and Houston, it's very important, I think, not just for Dubai, but the entire Middle East region." Ed: "How long is the flight?" "The flight coming in yesterday was just about 15-and-a-half hours, and going back it's estimated to be about 14-and-a-half." Ed: "What did people have to do before this flight?" "You would have to connect either via New York or a point in Europe—London, Frankfurt. This actually cuts down on journey time for people and also for freight because the connection time sometimes can be quite a while."

Emirates began daily nonstop service to Dubai from New York's John F. Kennedy International Airport in mid-2004 and added a second daily flight in 2005. Tickets aren't cheap. They range from about $12,900 for a first-class, round-trip ticket, and business-class tickets cost around $8,700. Economy seats will vary in price depending on the time of booking and travel. Halliburton chairman, president and CEO David Lesar moved to Dubai earlier this year to help grow its business in that region.

Dow Chemical says it is cutting 1,000 jobs—or two percent of its work force. It is part of the company's plan to boost its efficiency and get rid of underperforming businesses. The Midland, Michigan-based chemical giant says it will exit the automotive sealers business within the next nine to 18 months in North America, Asia and Latin America. It will idle one plant and close a cellulose manufacturing facility, both in Brazil. Dow did not say if Houston operations would be affected, but there are 13 operations in Houston. Seven are associated with Union Carbide. Dow expects the cuts will result in a charge of up to $600 million for write-downs and severance packages in the fourth quarter of 2007. The company expects to save $180 million a year once the moves are made. The company employs about 43,000 people worldwide.

Automakers report mixed U.S. sales for November. Truck sales continue to falter, and consumers are showing interest in some new or more fuel-efficient models. Even with rising sales of small cars and crossovers, the industry is predicting things will get worse next year. GM said it will cut scheduled first-quarter production by 11 percent. Ford will reduce production by seven percent. Ford's top U.S. sales analyst, George Pipas, said the automaker is predicting sales will be at their slowest pace in a decade in the first half of 2008. GM November sales dropped 11 percent, hurt by falling demand for trucks as well as cuts in sales to low-profit rental car fleets. Chrysler says sales fell two percent. Ford and Toyota both reported flat sales for the month. Honda sales were up five percent while Nissan sales rose six percent.

Tags: News


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