A.M. Executive Briefing - Sept. 28
This Morning's Headlines:
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FDX Clears Plan to Repurchase 15 Million Shares
The FDX Corp. board okayed a stock buyback, the first for the FedEx and RPS parent, in which the company will buy back 15 million of its 298 million outstanding shares. Chairman and CEO Frederick W. Smith says, "The authorization of this repurchase program reflects our confidence in the long term growth and profitability potential of FDX Corp."The company's share price had been declining since it announced on Sept. 16 its earnings for the first quarter of its fiscal year, which did not meet projections. Many investors had thought FDX would do better by handling e-commerce purchases.
Overland Park, Kan.-Based Trucking Firm's Shares Dip After Recent Surge
Due to Yellow Corp. being put on analyst Gary Yablon's recommended buy list, the company's shares went up 9.6 percent on Sept. 13. The shares fell back down 9 percent and closed on Monday at 15.03125.Unlike Yablon, ING Barings analyst Doug Rockel is neutral about Yellow's shares due to his concerns about the Overland Park, Kan.-based company. However, Rockel did note Yellow's increased revenue, which he said was up due to higher rates and the closing of Preston Trucking, which Yellow had sold in 1998. Management changes at Saia Motor Freight Line, which is owned by Yellow, also brought up concerns with the resignation of President Jimmy D. Crisp effective Aug. 31. He resigned to buy a different regional carrier, Bloomberg News said. Kansas City Star Online (09/28/99); Davis, Mark
Trial Begins for Driver in Fiery Crash
Monday saw the start of jury selection for the trial of trucker Jose Coronado Martinez, 35, who is facing four charges of intoxicated manslaughter related to a June 29 accident that killed a man and his three children on a U.S. 59 entrance ramp.Police say Martinez was driving at too high a speed when he hit a guardrail; then, after Martinez swerved, his truck tilted and smashed the SUV in which the four killed were riding. Later breath tests put the trucker's blood alcohol content at 0.11 percent and 0.12 percent, higher than the 0.10 percent drunkenness threshold then used in Texas.
Martinez' lawyer, Jon A. Jaworski, argues that the trucker was cut off by another driver and was driving at the right speed and that the breath test equipment was malfunctioning. He also says his client's truck and trailer were in poor condition and that the right procedure for the Houston police would have been to take a blood sample. Finally, Jaworski says his client is the victim of a revenge scheme against truck drivers.
However, Warren Diepraam, a prosecuting attorney, says, "I think the evidence is going to show to a rational jury who the real person at fault is and who the real victim is. It ain't Jose Martinez."
Diepraam is expected to call on the wife of the dead man, who was in the SUV, as well as present evidence that there was nothing wrong with a breath analysis machine or the police investigation. He also says the trucker is responsible for poor equipment condition. The prosecuting attorneys are looking for an 80-year maximum sentence. Houston Chronicle (09/27/99) P. A15; Brewer, Steve
Sea-Land to Open Gates Through Lunch Hour
Sea-Land Service has said it will keep its gates for truckers at the Port of New York and New Jersey open during the lunch hours, and it will also be open an extra hour weekday mornings at the Port Elizabeth-Port Newark, N.J., terminal. Beginning Oct. 4, the hours will be 6 a.m. through 5 p.m.Truckers say they were losing $250,000 a week because of Sea-Land's shorter hours and had average 2.5-hour waits because the gates were closed during lunch. According to the truckers, Sea-Land said it was saving $1.3 million annually due to the shorter hours. Journal of Commerce Online (09/27/99); Brennan, Terry
Changes in Highway Weight Limits Transcend Logging Industry
Last week, Alberta Human Resources and Employment and Alberta Infrastructure approved a proposed regulatory amendment allowing logging trucks to carry loads bigger than manufacturer's specs, subject to safety and hazard-assessment conditions. Now, communication officer Ed Sager of Human Resources and Employment says "there are discussions with other heavy haulers" about having the regulatory change apply to them as well. "I would think the oil industry would try," he says.Spokesman Larry Skory of the Alberta Forest Products Association says "it seems logical the amendment would apply across industries." Skory worked with the task force that backed the amendment to the regulations.
Sager says the earlier regulations will probably be kept in effect another year, and at the end of next year the amendment could become legislation. Daily Herald-Tribune (Grande Prairie, Alberta) Online (09/27/99); Guerette, Deb
Woman's On-Line Auto Parts Venture is Stalling
Kathleen Hynes, founder of the Maryland-based company PartsBAY.com, has put in $1 million and is looking for $15 million more from investors for the company, which is intended to allow fleet managers to search for the best prices on parts and buy them online from suppliers who can get the parts to the customers quickly.Several automotive-industry companies like the concept, but they will not invest in the unproven company. PartsBAY does have partners in Robbins Gioia Inc. and the fleet-maintenance company DMG-MAXIMUS. Hynes complains that she had trouble getting funding for her company, which she says "provides a real service," while other online ventures that are "selling air" have plenty of money. PartsBAY.com COO Dan Eichinger says another problem is that prospective investors who turn down the company do not explain why.
Hynes, a onetime Mary Kay cosmetics sales director, has tried to round up other managers with experience in the automotive industry, such as company Vice President Robert Bruchey. Regardless, prospective investors say they do not have industry experience. PartsBAY.com participated in the first Northeast Venture Conference, sponsored by the Silicon Alley magazine AlleyCat News. While the company seemed to have been doing well after a computer delay at the beginning of its presentation, they soon racked up two more rejections. But Hynes was still determined. Bergen (N.J.) Record (09/27/99) P. H9; Applegate, Jane
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