Market falls on GE numbers: Profits were down at four of six GE divisions, which apparently has Wall Street on edge. At last check, the Dow was down over 100 points.
More grounded flights: The American Airlines nightmare week continues today with more than 500 flights cancelled. That brings to 3,000 the number that have been grounded due to maintenance re-inspections that are taking longer than first expected. Things should get better over the weekend – or at least that’s what they say. As of last night, LAX had 139 cancellations, while Dallas had 902 (it's American's biggest hub). All this will cost the airline tens of millions of dollars, perhaps more. (Bloomberg)
Frontier files for bankruptcy: The Denver-based airline plans to continue normal operations. The Chapter 11 filing was necessitated after some squabble with its main credit card processor. “To be clear, we filed for very different reasons than those of other recent carriers, and our customers and employees can be confident that we intend to keep on flying and providing outstanding service and products,” said CEO Sean Menke. (NYT)
Linens 'n Things may file: The struggling home furnishings retailer is trying to avoid or delay filing for bankruptcy protection by meeting its lenders and biggest vendors on Monday. Linens 'n Things was bought out by private equity firm Apollo Management and its affiliates in 2006 for $1.3 billion. The nationwide housing slump has taken a heavy toll on the home furnishings business. (Reuters)
Big jump in gas prices: The Auto Club's weekly survey shows a nearly 10-cent a gallon boost in the average price of self-serve regular in the L.A. area, to $3.736. California gas prices have jumped almost 20 percent since the beginning of the year, which is the fallout from the increased price of oil.
Conflict over emissions?: Turns out that the biggest push to have the state Air Resources Board lower its mandate for producing emission-free vehicles was made by board member Daniel Sperling. He proposed requiring only 7,500 vehicles, down from the original 25,000. All seven members present voted for Sperling's proposal, which surprised environmental groups. But given his background, perhaps it shouldn't have been that much of a surprise. From the LAT:
For 17 years, he has overseen the Institute of Transportation Studies at UC Davis and has helped the institute raise millions of dollars from companies including Nissan Motor Co., Toyota Motor Corp., General Motors Corp., Chevron Corp. and Exxon Mobil Corp. From mid-2000 through the end of last year, the institute raised $7.9 million from petroleum and automotive companies, according to UC Davis records. From July 2006 through the end of 2007, the institute brought in $1.6 million from those industries -- 15.5% of its overall fundraising and 64% of all private contributions. Most of its funding comes from the government.
Sperling, appointed to the board by Republican Gov. Arnold Schwarzenegger in February 2007, says he has gone to great lengths to avoid conflicts, including renouncing fundraising from companies doing business in California. "I've made every effort to distance myself from influences from all special-interest groups," Sperling wrote in an e-mail. He says that the new rule he wrote sets a higher target number for zero-emission vehicles than had been proposed in a report by air board staff, and that it forces automakers to make 58,333 plug-in hybrid vehicles where none were required in the previous mandate.
Plan for Santa Barbara oil: A Houston company has agreed to shut down its offshore production earlier than usual in exchange for approval to drill into untapped undersea reserves. Also as part of the deal, Plains Exploration & Production agreed to donate 200 acres of oceanview property along the Gaviota coast and an additional 3,700 acres in Santa Barbara's wine-growing region for public parkland. The company had proposed a housing development on the land. What's especially interesting is that all the usual factions signed off on the compromise. From the LAT:
Steve Rusch, a PXP vice president, said the company was willing to make concessions because it wanted to do more than simply neutralize offshore oil's traditional opponents -- it wanted to enlist their support. Since the 1980s, most offshore oil development in California has been met with fierce opposition, including protracted litigation, congressional moratoriums and bureaucratic delays.
Yahoo board meets: Directors will have plenty of takeover plans to talk about, with AOL, News Corp. and Mircosoft all interested in some sort of merger or partnership. Insiders, though, still say that a straight takeover by Microsoft - not in partnership with News Corp. - is the most likely outcome. The big question continues to be whether Microsoft is willing to raise its bid in the face of Yahoo's possible alternatives. (WSJ)
Bev Hills approves condos: The City Council signed off on the 9900 Wilshire condo and retail project, which will be developed by British-based Candy and Candy and located on the site of the old Robinsons-May store. The complex is expected to generate about $60 million in upfront fees for Beverly Hills. On Tuesday, the council is expected to approve a proposal to add condos and a Waldorf-Astoria Hotel to the Beverly Hilton. (LAT)
MySpace goes global: The Bev Hills-based social networking site has signed a deal with a British production firm to distribute its video content overseas. It just so happens that the British firm is run by Elisabeth Murdoch, daughter of News Corp. Chairman Rupert Murdoch. And My Space happens to be owned by News Corp. From the NYT:
Online video shows typically lack the expensive production values of television and often run shorter than five minutes in length. They have remained largely untested on television. James McQuivey, an analyst for Forrester Research, said MySpace might be trying to demonstrate optimism in the future of the online video medium. “We haven’t yet seen a show start on the Web and succeed enough to go to television and require this kind of international deal-making,” Mr. McQuivey said.