Executive Briefing - June 4
- Kelley to Leave Federal Reserve Board
- Layoffs Fall in May, but Still Higher Than in 2000
- Dana Sells Ohio Metal-Forging Plant
- Change in Senate Alters Energy Plan
- OPEC May Not Fill Iraq Production Gap
- CBOE to List Options for Forward Air, Vastera
- Lawyers Seeking Recall of Ford Explorers
- Greenspan Says Gas Prices May Fall
- Democrats to Organize Senate Tuesday
- Holt Financing in Bankruptcy Approved
- Earnings Forecast Depresses Roadway Stock
- Layoffs Fall in May, but Still Higher Than in 2000
Kelley to Leave Federal Reserve Board
Edward Kelley plans to resign from the Board of Governors of the Federal Reserve System as soon as one of the currently vacant slots is filled, Reuters reported.The decisions of the Federal Reserve, especially with regard to interest rates, have a profound effect on the economy and the trucking industry.
Kelley has been a member of the board for 14 years.
The board, which is supposed to consist of seven members, has been operating with five, considered the minimum effective number, since July 1999.
Layoffs Fall in May, but Still Higher Than in 2000
Layoffs announced by U.S. companies fell 52% in May to 80,140 after hitting the highest count in eight years the month before, according to a survey by Challenger, Gray & Christmas.During times of sluggish economic growth, companies start reducing costs by slowing manufacturing and cutting jobs. When manufacturing declines, the volume of truck freight also falls.
The technology sector suffered the most layoff announcements, with telecommunications, computers, electronics, and e-commerce making up four of the five top industries announcing layoffs.
Challenger, which tracks corporate layoff announcements, and not actual job losses, had reported a total of 165,564 job cuts in April. The cumulative number of layoffs announced in the last five months totaled 652,510, more than the 613,960 in all of 2000. Transport Topics
Dana Sells Ohio Metal-Forging Plant
Dana Corp. (DCN) has sold its Marion, Ohio metal-forging plant to Sypris Solutions (SYPR) for $16.5 million, Bloomberg reported.
The plant, which is about 40 miles north of Columbus, Ohio, covers about 255,000 square feet, had 193 workers and posted sales last year of about $40 million.
Dana, based in Toledo, Ohio, said it will record a second quarter charge of $7 million or 5 cents a share for the loss on the sale.
Since April, Dana, which has been focusing on axles, has announced or completed the sale of businesses with about $1.27 billion in annual revenue. Transport Topics
Change in Senate Alters Energy Plan
Even after the shift to a Democratic majority in the Senate takes place this week, energy will remain a top priority on Capitol Hill. However, it will put the brakes on President Bush's hopes for quick action on his energy proposals, Reuters reported.Democrats plan to press for more short-term measures, such as dramatically boosting money to help low-income families pay their electricity and natural gas bills.
In addition, they will seek tax incentives for building a pipeline to move natural gas from Alaska's North Slope, a proposal to approve a disputed oil lease in the eastern Gulf of Mexico and tax incentives for clean coal technology.
At the same time, a Republican proposal backed by Bush to drill for oil in the Arctic National Wildlife Refuge is given virtually no chance with the change in party control.
The Republicans respond by saying that the Democrats will blunt the drive to develop such traditional energy sources as coal, oil and nuclear. Transport Topics
OPEC May Not Fill Iraq Production Gap
The Organization of Petroleum Exporting Countries is resisting pressure to make up for any gap in oil exports that would result from Iraq halting its exports in protest over the United Nations’ imposition of a one-month extension for the oil-for-food proram, according to news reports.Iraq said it would suspend exports under the program until the U.N. Security Council backs down on the 30-day extension imposed to allow time for consideration of a proposal by Britain and the United States to overhaul the sanctions put in place at the end of the Gulf War.
According to Reuters, Washington's main ally in OPEC, Saudi Arabian Oil Minister Ali al-Naimi, said on Saturday that the cartel would ensure sufficient supplies.
But Naimi steered clear of making any specific commitment to immediately raise output and the New York Times reported that OPEC will probably decide Tuesday against increasing the amount of oil it supplies to the world.
Reuters said OPEC would not want to increase production to make up a shortfall and then be caught in overproduction when Iraq begins exporting again. Transport Topics
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CBOE to List Options for Forward Air, Vastera
The Chicago Board of Exchange, the world's largest options marketplace, will begin listings for Forward Air and Vastera beginning on Monday.Based in Greenville, Tenn., Forward Air provides transportation services to airfreight forwarders and air cargo carriers as well as operates a truckload business throughout the United States.
Vastera provides modular, Web-based applications and solutions for global trade management and is based in Dulles, Va. Transport Topics
Lawyers Seeking Recall of Ford Explorers
Lawyers representing people injured or killed in Ford Explorers equipped with Firestone tires filed papers late Friday in Federal District Court in Indianapolis to try to force the company to recall four million Explorers, news services reported.
Sport utility vehicles such as the Explorer are used in a wide variety of trucking applications, especially among utility fleets and other service-oriented businesses.
The motion seeks the recall of all Explorers made from 1990 through 2001, but does not cover the redesigned 2002 model. Lawyers want Ford (F) to refund people’s money or provide a replacement.
Ford spokesman Jason Vines told the New York Times the request was frivolous.
Meanwhile, the Wall Street Journal reported Monday that the company's board is weighing plans to restructure top management as several key executives under Chief Executive Jacques Nasser near retirement age. Transport Topics
Greenspan Says Gas Prices May Fall
Federal Reserve Board Chairman Alan Greenspan said Monday he is encouraged by signs that gasoline prices in the United States could be coming down soon, the Associated Press reported.Gasoline inventories are finally beginning to build now that bottlenecks at refineries are subsiding, he said.
Speaking to delegates of the International Monetary Conference, Greenspan also noted that inflation is not a significant problem in the U.S. economy, but the Fed is keeping a close watch. Transport Topics
Democrats to Organize Senate Tuesday
Democrats are expected to formally take control of the Senate late Tuesday, when Sen. James Jeffords of Vermont officially leaves the Republican Party and becomes an independent, news services reported.Many Senate Democrats and Republicans vowed on Sunday to try to cooperate, despite Republican leader Trent Lott's call for a new partisan war, Reuters reported.
Over the weekend, incoming majority leader Tom Daschle (D-S.D.) traveled to Sen. John McCain’s ranch in Arizona, triggering speculation McCain (R-Ariz.) may also leave the Republican Party, the Wall Street Journal reported.
McCain said that he has no plans to leave. However, his main priority, campaign finance reform, will likely get a boost by the Democrats taking control of the Senate, the Journal said. Transport Topics
Holt Financing in Bankruptcy Approved
The U.S. Court for the District of Delaware has granted final approval for debtor-in-possession financing for Holt Group, with Holt’s senior bank group led by First Union National Bank.Holt, a provider of freight transportation in international trade, filed for reorganization under the bankruptcy laws in March.
According to a press release, the approval of DIP financing vindicates to the efforts of the management team and its progress toward a successful plan of reorganization.
Holt provides integrated cargo transportation and B2B logistics management services in the contiguous United States and a variety of cargo services, including stevedoring, warehousing and inland trucking at owned and leased facilities in New Jersey, Delaware, Florida and Puerto Rico. Transport Topics
Earnings Forecast Depresses Roadway Stock
Shares in Roadway Corp. (ROAD)fell 15% after the company said that second-quarter earnings will fall short of forecasts, Bloomberg News reported.
The company’s share plunged to $22.25 briefly last week after a company spokesman said the quarter’s profits would be 43 cents a share instead of the 52 cents it earned in the second quarter of 2000.
Later, the price rose to $23.80, which was 9.1% below the price before the announcement.
The drop in earnings was blamed on lower demand for freight shipments.
Roadway is ranked number No. 6 in the Transport Topics 100 list of U.S. trucking companies, based on 1999 data. Transport Topics
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