Houston, fourth-largest U.S. city, faces massive job cuts
By Adam Levy
Bloomberg News Service
HOUSTON — Houston, you have a problem.
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The fourth-largest U.S. city has been shaken by declines at three of its biggest employers — Continental Airlines Inc., Compaq Computer Corp. and now Enron Corp., which last week agreed to a takeover by local rival Dynegy Inc. amid a financial crisis.
Enron field, home of the Houston Astros, sat empty Sept. 11 in the aftermath of the East Coast terrorist attacks.
The airline and the computer maker are cutting tens of thousands of jobs because of a slumping economy and reduced demand following the Sept. 11 terrorist attacks. Analysts said business growth will slow in Houston, home to Halliburton Co., the oilfield-services company once run by Vice President Dick Cheney. Halliburton is the city's largest employer.
"Having a couple of favored sons in the White House doesn't seem to matter when everything else is going wrong at once," said Mark Vitner, an economist at Wachovia Securities Inc. "This historically has been a boom and bust city and now, for a host of reasons, the floor is crumbling beneath it."
Houston's identity is closely tied to its businesses. The Houston Astros baseball team plays in Enron Field, the downtown retractable-roof stadium. Enron paid $100 million to put its name on the 42,000-seat stadium. The Compaq Center is home to the Houston Rockets basketball team.
The city, for decades a symbol of the oil and energy industries, in the past 10 years has become more representative of the U.S. economy.
Houston is home to 21 Fortune 500 companies and last year rose to become the world's 30th largest economy by gross domestic product from 34th. Houston's GDP rose on average 4.5 percent in each of the past four years. That growth rate slowed to 1.3 percent through the first nine months of 2001.
Houston officials say their city will rebound.
"People in Houston take kind of a New York attitude to the economic problems," said Sharon Adams, Houston's deputy controller. "They say we've been there before when times were hard in the 1980s, and we'll come out of it stronger."
Last month, Houston was put on the short list of U.S. finalists to bid for the 2012 Summer Olympics, along with New York, Washington D.C., and San Francisco.
"In the long run, this city has a great quality of life and the infrastructure to absorb these losses," said Barton Smith, director of the Institute for Regional Forecasting at the University of Houston.
