A.M. Executive Briefing - Dec. 28
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Iraqi Oil Exports Brings Prices Down
The recent resumption of Iraqi oil exports brought crude oil prices down Thursday, offsetting a colder-than-normal winter in Europe and the U.S. Northeast that demands more heating fuel, Bloomberg reported.In London, crude oil dropped 39 cents to $23.65 per barrel for February's delivery. In New York, prices fell 3 cents to $26.44 per barrel.
The Organization of Petroleum Exporting Countries wants to keep prices in the $22-28 per barrel range. If the price falls below $22 and stays there for 10 consecutive days, OPEC says it will reduce production by at least 500,000 barrels per day. The cartel is planning to meet Jan. 17 in Vienna to further discuss oil production policies. Transport Topics
Pressure Rises on Bridgestone to Settle Lawsuits
Tire company Bridgestone/Firestone will now face pressure to settle lawsuits over tire failures on Ford Motor Co. (F) Explorer sport-utility vehicles after the automaker came to terms with a number of litigants, Bloomberg reported Thursday. On Wednesday, Ford announced that it would settle about 200 personal injury claims, leaving Bridgestone as the sole defendant in the cases. The article said Bridgestone did not comment on Ford's move.
In August, Bridgestone recalled 6.5 million tires linked to 148 deaths and several other injuries in Ford Explorers.
The wire story said Ford is settling lawsuits before it releases its latest Explorer model. Transport Topics
Union Pacific Warns on Earnings, Cuts 2,000 Jobs
In a development that says a lot about the worsening state of the U.S. economy, the largest U.S. railroad company - Union Pacific (UNP) - said it expects fourth-quarter earnings to be below market estimates and is cutting 2,000 jobs.UP said its news was "prompted by clear signs of an economic slowdown" that has "accelerated sharply in the past few weeks." That same slowdown would of course hurt trucked freight as well as rail-hauled cargoes. UP Chief Executive Officer Richard Davidson said that "an increasing number of our customers report that their business levels have weakened, and few see any signs of significant improvement."
In addition, "the impact of the economic downturn is compounded by difficulties associated with severe winter storms that have swept across several states in the railroad service area," while fuel costs this year remain well above year-ago levels.
UP said it now foresees earnings to be 87 cents to 90 cents per share in the October-December period; analysts had looked for 93 cents and even that was below the year-earlier 95 cents.
The job cuts amount to 4% of UP's 50,000-person work force. Transport Topics
Consumer Confidence Drops to Two-Year Low
The U.S. consumer confidence in spending dropped to the lowest level in two years, the Conference Board reported Thursday. December's confidence index level fell to 128.3, a drop from November's level of 132.6.Consumer spending makes up two-thirds of the nation's economy. If fretful consumers buy fewer products, truck-hauled shipments either decelerate or decrease outright, so measuring consumer attitudes is key to estimating their future spending trends.
In wire service reports, Conference Board Consumer Research Center Director Lynn Franco said December's declining index level was "disconcerting." Although the index level right now still signals a slow-growing economy, she warned that if confidence continues to decline, it could point to a more severe slowdown ahead. Transport Topics
Parts Maker American Standard Cutting 1,200 Jobs
American Standard Cos. Inc. (ASD), which makes Trane air conditioners as well as electronic braking and control systems for heavy-duty trucks, said it will cut 1,200 jobs worldwide and close an unspecified factory to boost profits. American Standard is also the world's largest supplier of plumbing products.The Piscataway, N.J.-based company said the belt-tightening measures it would undertake would affect all three of its business lines. American Standard employs 58,000 in 36 countries.
The cuts would reduce truck freight shipments from that manufacturer, but they also reflect damage spreading in the trucking and truck-supply industries from a year of weakening freight activity and a drop-off in new truck sales. And the cutbacks would be in line with a generally slowing U.S. economy, which slowed abruptly in the third quarter and apparently has hit a rougher patch in the fourth. Transport Topics
Landair Appoints New President
Truckload service company Landair Corp. (LAND announced late Wednesday that it has appointed John Tweed as president and chief operating officer. While at Landair, Tweed will also continue his current role as president of Greeneville, Tenn.-based Warehouse Logistics Corporation.Tweed will replace Tim Roach, who resigned to serve as the company's consultant.
Landair, which is also based in Greeneville, provides truckload and other transportation services in the United States and Canada. Transport Topics
Trinity Industries Expects Low Earnings
Trinity Industries (TRN), which operates parts and highway construction product divisions, said late Wednesday that it expects its earnings to fall below analysts' estimates of 15 cents per share in its third quarter ending Dec. 31, 2000.The company said severe weather, high fuel costs and a weak market have affected shipment of its products during this period.
Dallas-based Trinity operates six business segments including railcars, inland barge, parts and service, highway construction products, concrete/aggregate and an industrial group. Transport Topics
Headlines From Yesterday's P.M. Briefing
- Still More Names Swirl Around DOT Post
- U.S. Trucking Plans Name Change, Reverse Stock Split
- German Truckers Seek Tax Relief
- Storm Coats Ark. Okla. In Ice
- Judge: UPS Must Consider One-Eyed Drivers
- Pa. Driver License Privacy Case Brings Large Penalty
- Calif. Funds Awarded for Alternative-Fuel Trucks, Buses
- FedEx Driver Admitted to Stealing Parcels for Gifts
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