BUSINESS BRIEFS
Automakers seek billions more in federal funding
Associated Press
WASHINGTON — Beleaguered U.S. automakers are seeking federal help beyond the money that Congress has made available for them as part of a financial industry bailout and a measure to retool their assembly plants for more fuel-efficient cars, the White House said yesterday.
White House spokeswoman Dana Perino said the auto industry has talked to the Bush administration about funding on a much broader scale than the two programs approved by Congress earlier this fall.
General Motors Corp. is pursuing about $5 billion to $10 billion in aid from the government.
The requests have come as General Motors and Chrysler LLC are discussing a potential merger amid an economic downturn, weak auto sales and hardships for the companies.
OIL FIRM PROFITS SOAR — FOR NOW
HOUSTON — Record crude prices this summer are translating into huge profits, as BP and Occidental Petroleum showed yesterday, but some energy companies are bracing for tougher times, keeping a closer tab on cash and cutting spending.
Oil producers are coming off a quarter during which crude prices reached an all-time high of $147.27. But prices have since tumbled more than 50 percent, and the global economic malaise has raised questions about energy demand at least into 2009.
Oil prices fell again yesterday, a day before the government releases its weekly crude inventory report that recently has shown in stark numbers how much Americans are cutting back on energy costs.
Although oil prices typically decline in the fall, analysts expect the prices to continue falling, perhaps as low as $50 a barrel, before they hit bottom.
Despite a 71 percent jump in third-quarter profit, Occidental Petroleum said yesterday it likely would not increase capital spending next year from its current $4.7 billion level. Refiner Valero Energy Corp., which also reported July-September results yesterday, said it was scaling back spending by 33 percent this year and cutting its 2009 budget.
WHIRLPOOL CUTTING ABOUT 5,000 JOBS
GRAND RAPIDS, Mich. — Whirlpool Corp. said yesterday it is eliminating about 5,000 jobs this year and next, due in large part to the long downturn in the U.S. housing market.
The nation's largest home appliance maker also reported that its earnings fell 7 percent during the third quarter on lower global unit volumes and higher material costs. Whirlpool lowered its earnings outlook for the year and announced price increases.
Company officials received more sobering news yesterday upon learning that consumer confidence had plunged to its lowest level on record.
Whirlpool said the drop in profit reflects significantly higher material and oil-related costs and lower industry demand.
"The global credit crisis has had a profound negative impact on what was already a weakening and very fragile global economy," said Chairman and Chief Executive Jeff M. Fettig. "Declining home values, rising unemployment and very low consumer confidence levels will likely prolong a negative demand environment at least through the middle of 2009."
BAILOUT SWELLING BUDGET DEFICIT
WASHINGTON — The financial rescue operation will force the federal government to borrow an unprecedented amount of money as the budget deficit climbs to record heights, a top Treasury Department official said yesterday.
Anthony Ryan, Treasury's acting undersecretary for domestic finance, said the administration back in July was forecasting that the deficit for the current budget year, which began on Oct. 1, would hit a record $482 billion. He said that forecast did not include all the government's efforts since then to deal with the worst financial crisis since the 1930s.
Ryan said those borrowing efforts will need to address numerous government initiatives.
WAL-MART FOCUSES ON ITS CASH FLOW
NEW YORK — Wal-Mart Stores Inc. is navigating the global economic slowdown by scaling back its store growth and capital expenditures while focusing on remodeling existing locations and creating smaller outposts.
The goal, Chief Financial Officer Tom Schoewe told Wall Street analysts, is to continue to increase its cash flow to invest in its business, while delivering returns to shareholders through dividends and share buybacks.
Wal-Mart, the world's largest retailer, plans to open a total of 212 stores in the U.S. in fiscal 2009, which ends in January, and from 157 to 177 stores in fiscal 2010. That compares with 243 stores opened in the prior year.
