Archive for August 12th, 2010

12
Aug
10

BP Agrees to Record $50.6 Million Fine for Texas City Blast

NEWS
BP Agrees to Record $50.6 Million Fine for Texas City Blast

Thursday, August 12, 2010

BP has agreed to pay a record $50.6 million fine related to the deadly 2005 blast at its Texas City refinery and spend $500 million on safety improvements, U.S. officials said on Thursday.

The fine relates to BP’s repeated failure to meet safety standards both before and after the explosion that killed 15 workers and injured 170 others.

BP has also been slapped with huge fines for the pollution released from the troubled facility.

Those fines pale in comparison to the billions the British energy giant is liable for in the wake of the massive oil spill unleashed in the Gulf of Mexico after a deadly explosion sank the BP-leased Deepwater Horizon drilling rig in April.

The Occupational Safety and Health Administration initially fined BP a record $21 million after it determined that BP failed to protect its workers ahead of the 2005 blast.

The penalty was increased to $50.6 million in 2009 after inspections found that BP failed to correct significant safety deficiencies.

‘This agreement achieves our goal of protecting workers at the refinery and ensuring that critical safety upgrades are made as quickly as possible,’ said Secretary of Labor Hilda Solis.

‘The size of the penalty rightly reflects BP’s disregard for workplace safety and shows that we will enforce the law so workers can return home safe at the end of their day.’

The settlement does not impact ongoing litigation over the $30 million fine imposed for 439 new ‘willful violations’ discovered in the 2009 inspection.

‘It is perfectly within BP’s means to make that facility safe,’ OSHA Deputy Assistant Secretary Jordan Barab said in a conference call.

The settlement ‘commits them to a schedule to address those issues and it provides OSHA with an unprecedented level of oversight to make sure they do what they’re supposed to do,’ he added.
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12
Aug
10

Recovery still distant as GM turns a corner

NEWS
Recovery still distant as GM turns a corner
General Motors profits move past $1 billion

Thursday, August 12, 2010

••• General Motors said on Thursday its profits hit $1.3 billion in the second quarter, as the car company prepared to break free of U.S. government ownership by relisting on the stock exchange.

‘I am pleased with our progress on achieving our business objectives,’ said chief financial officer Chris Liddell, announcing the second consecutive quarter of growth.

The company erased a loss of $13 billion in the same period last year, as sales and revenues increased.

The firm saw stronger sales in North America in the quarter, even as sales in Europe floundered and market share around the world sank.

GM captured 15.4 percent of the U.S. market for cars versus 17.5 percent in the second quarter of last year, but elsewhere faired poorly.

GM’s executives have said that a public offering will come soon, a process that will help the U.S. government unwind its majority stake in the firm.

The U.S. Treasury Department still owns 61 percent of GM, which received $50 billion of U.S. government financing for its bankruptcy restructuring that led to mass layoffs, plant closures and billions of dollars in debt wiped out.

GM’s drive for an IPO will be boosted by news that the firm’s revenues swelled to $33 billion in the second quarter, a third more than the same period last year.

GM as well as its U.S. competitors Ford and Chrysler were hard hit by the recession which struck the United States in December 2007, caused by a home mortgage meltdown.

Of the so-called Detroit Three car makers, Ford was the only one to avoid bankruptcy, managing to stay afloat thanks to massive loans it had obtained prior to the credit crunch and because it moved more quickly to revitalise its product portfolio.
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12
Aug
10

Fed Effort to Aid Recovery Fails to Calm Investors

NEWS
Fed Effort to Aid Recovery Fails to Calm Investors

Thursday, August 12, 2010

More worried about the recovery, the U.S. Federal Reserve has taken a small step to bolster the U.S. economy.

Wrapping up a one-day meeting, the Fed said it will use money from its investments in mortgage securities to buy government debt on a small scale. That could help nudge down long-term rates on mortgages and corporate debt, but wouldn’t have a dramatic impact on stimulating economic growth, economists say.

Perhaps more importantly, the largely symbolic action sends a signal that the Fed sees the recovery weakening and that it stands ready to take more aggressive action, if needed, to keep it on track.

Delivering a more downbeat assessment, the Fed now believes economic growth will be ‘more modest’ than it had anticipated at its late June meeting.

The Fed, citing ‘subdued’ inflation, said it would keep its target for a key interest rate at zero to 0.25 percent for an ‘extended period’.
Investors reacted positively to the statement. Stocks that were down sharply before the announcement made up some lost ground. The Dow Jones industrial average, down about 100 points just before the Fed decision, was down about 40 a short time later. However, the market was likely to fluctuate, as it usually does while investors pore over the Fed’s statement.

Treasury prices rose slightly as investors were pleased by the Fed’s plan to buy government debt, which would reduce the amount of Treasury securities in the market. The yield on the Treasury’s 10-year note, which moves in the opposite direction from its price, fell to 2.77 percent from 2.82 percent just before the announcement.

Economists doubt the Fed can turn around the economy on its own. Some believe additional help from Congress is needed. Others are sceptical that easier credit or even more government aid will persuade Americans to shop more and hire more. Yet others think some jobs – like in construction – will never return to pre-recession levels, as the economy makes a structural shift.
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