Executive Briefing - July 10
- Navistar Raises Prices 3%
- Airlines Beset By Job Actions
- UniGroup Sells, Then Buys Consultants
- Iraq Pumps Oil Through Pipeline to Turkey
- Customers Mixed on Future of Online Groceries
- Consumer Borrowing at Slowest Pace in 19 Months
- Corning Layoffs Climb to 5,900
- American Power Conversion Announces 700 Layoffs
- CNF Announces New Credit Facility
- Government Waste Enrages CCAGW
- Airlines Beset By Job Actions
Navistar Raises Prices 3%
Navistar International Corp. (NAV) has raised prices for its medium-duty and heavy-duty trucks 3% as it struggles with declining demand in North America, Bloomberg reported.
The Chicago-based company said it does not expect a significant change in demand for the rest of the year, and a rebound for the truck manufacturing sector depends on when the U.S. economy strengthens and inventories of used trucks decline.
Like its rivals, Navistar has been forced to cut production and employees over the last year. Heavy-truck output in North America declined 54% in the first quarter of 2001 compared to last year.
Last year, Navistar said it spent $900 million to develop a new line of medium-duty trucks, and it is still planning to add new heavy-duty trucks and severe-service vehicles to that line. Transport Topics
Airlines Beset By Job Actions
Airline workers across Asia, Europe and the Americas are disrupting flights with a rash of job actions.Most recently, the Associated Press said, a dispute with pilots forced Cathay Airways in Hong Kong to cancel nearly 20% of its flights, while Italy's Alitalia shut down 75% of its flights when air traffic controllers, pilots and flight attendants walked off their jobs.
Because nearly 60% of air cargo flies in the bellies of passenger planes, any disruption in air traffic could push more cargo to trucks or force shippers that use an airline to seek alternative carriers.
Pilots have disrupted schedules on Spain's Iberia, LOT Polish Airlines and two of Japan's three major airlines. Argentina's flagship carrier, suffering from massive debt, was the target of demonstrations by its workers.
In the United States, negotiators for American Airlines and its flight attendants agreed on a tentative contract last month just hours before it would have been necessary for President Bush to step in a block a walkout. Transport Topics
UniGroup Sells, Then Buys Consultants
UniGroup Inc. will spin off its relocation services subsidiary to a Memphis, Tenn.-based company, and then purchase a stake in the acquiring firm — Primacy Relocation.The deal was announced July 9 by St. Louis-based UniGroup, but the terms of the transaction were not disclosed. The parties anticipate closing by Aug. 1.
Primacy Relocation and the company it will buy, Pinnacle Group Associates, are both relocation services consultants for corporate personnel moves. When companies transfer their employees, the consultants offer moving-related advice on where to shop for houses, and how to secure a mortgage or get the latest information on school districts.
"It's a business that's really come into its own over the last decade," said Cliff Saxton Jr., a UniGroup spokesman. He said that Pinnacle's operations will be folded into Primacy's, and that only the Primacy name will survive.
Saxton said UniGroup will buy less than 50% of Primacy, but would not specify beyond that. He said United and Mayflower will use Primacy as their relocation services company, and that UniGroup bought a piece of the company because it wishes to have a presence in that segment of the moving industry.
UniGroup is ranked number No. 11 in the Transport Topics 100 list of U.S. trucking companies, based on 1999 data. Jonathan S. Reiskin
Iraq Pumps Oil Through Pipeline to Turkey
Iraq has resumed pumping oil through a pipeline to Turkey after resolving a dispute with the United Nations over the oil-for-food program imposed as a result of the Gulf War, the Associated Press reported.Middle East oil production is of interest to U.S. truckers because it affects the world oil price that, in turn, affects diesel fuel prices.
Iraq had cut off oil delivery through the pipeline June 4 to protest the decision to renew the program for one month rather than the usual six.
The sides finally agreed to a five-month extension of the program. Transport Topics
Customers Mixed on Future of Online Groceries
Residents of Northern California, once the guinea pigs in Webvan's first online grocery delivery market, said that escalating delivery fees, wider delivery windows and dwindling selection led to its downfall, but the concept is still a good one.Webvan, which ceased operations on Monday, used a fleet of trucks to gather and deliver goods ordered online.
The Contra Costa Times reported that while analysts predict traditional grocery stores could successfully revive the concept, many shoppers said they currently would rather go to the store.
But with larger buying power, brand recognition and an existing store network, stores like Safeway have a decent chance at running profitable online grocery operations.
Among the biggest complaints with Webvan was that delivery had to be scheduled in advance, which wasn't convenient.
The article said Forrester Research forecasts that 3 million households nationwide will buy $2.45 billion worth of groceries online this year. Transport Topics
Consumer Borrowing at Slowest Pace in 19 Months
Consumer credit rose by a seasonally adjusted $6.5 billion in May, or a 4.9% annual rate, the Federal Reserve reported late Monday.That was smaller than the $9.5 billion rise many analysts had forecasted and was the smallest increase in 19 months, the Associated Press reported.
Consumer spending accounts for two-thirds of all economic activity and has been key in keeping the economy afloat. Fed Chairman Alan Greenspan has said a main factor in determining whether the economy slips into recession is how well consumers hold up during the slowdown.
One analyst told AP the credit slowdown reflects the impact of layoffs, which are making consumers cautious.
Nonrevolving credit, such as loans for new vehicles, vacations and other big-ticket items, grew by $3.3 billion, or at an annual rate of 4.5%. Transport Topics
Corning Layoffs Climb to 5,900
Corning Inc. (GLW) has announced plans to idle another 1,000 employees, bringing its total layoffs this year to 5,900.The company, based in Albany, N.Y., manufactures optical fiber and cable used in telecommunications networks. Downturns and layoffs in manufacturing are important to the trucking industry because trucks are the major carriers of both raw materials and finished goods.
According to Reuters, Corning will also close plants in Benton Township, Pa., Natick, Mass., and stop construction of a new facility in Nashua, N.H.
The Associated Press said Corning plans to write off $300 million in excess and obsolete inventory.
Meanwhile, Alcatel, based in Paris, announced plans to cut 2,500 jobs within the U.S. Alcatel is second to Corning as a maker of communications equipment. Transport Topics
(Click here for the full press release.)
American Power Conversion Announces 700 Layoffs
American Power Conversion plans to cut 700 more jobs, 9.5% of its worldwide work force, for a total of 1200 this year.American Power makes surge protectors, computer cables and computer power-supply backups, and says reductions would primarily come from the manufacturing and operations ranks in the U.S. and overseas.
The newest cuts continue with the company goal to reduce expenses and improve productivity to drive down the cost of goods sold. Transport Topics
CNF Announces New Credit Facility
CNF Inc. (CNF) said it has completed a new revolving credit facility totaling $350 million, effective July 3, 2001.
The facility will be in effect for five years, and replaces an existing $350 million, five-year facility completed in 1996.
CNF said its revolving credit agreement serves as the company's primary backstop for credit enhancement and liquidity needs in support of our global supply chain management operations.
CNF, which owns Con-Way Transportation Services and Emery Worldwide, is ranked number No. 3 in the Transport Topics 100 list of U.S. trucking companies, based on 1999 data. Transport Topics
Government Waste Enrages CCAGW
The Council for Citizens Against Government Waste expressed outrage at the rising number of U.S. dollars wasted in what they called outdated, inefficient, duplicative and wasteful government programs.They also criticized the extensive government regulations that remain across American industries.
The late arrival of Cost of Government Day this year, the day in the calendar year when most Americans have earned enough to cover tax and regulatory burdens imposed by all levels of government, has fueled criticism particularly of budget increases like pork-barrel projects.
The CCAGW fights fraud, mismanagement, waste, abuse and inefficiency in the government. Transport Topics
(Click here for full press release.)
