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As we stagger into 2010, here's how much DFW's business landscape changed in a chaotic 2009 [Fort Worth Star-Telegram, Texas]
(Fort Worth Star-Telegram (TX) Via Acquire Media NewsEdge) Jan. 3--Liesl Gray heard only five words from a voice mail message she received a week before Christmas:
"I'm calling to offer . . ."
"I didn't hear anything after that," said Gray, a 38-year-old Fort Worth marketing and public relations pro who had been out of a job since spring. "I just cried and bawled and cried and bawled."
She called her mother and notified the better part of her network with a post on Facebook: "I got the job! I got the job!"
Finally, Gray called Autumn Leaves of Southwest Fort Worth, a soon-to-open assisted-living center for Alzheimer's patients, to accept the job of communications director.
"I'm blessed," she says.
Gray's loss of livelihood, angst-ridden job search and near desperation typified 2009 for many job seekers.
The Texas jobless rate climbed substantially in 2009 before finally easing late in the year, dipping to 8 percent in November from a peak of 8.3 percent a month earlier. Texas' economy, while suffering from the same drags as the nation's, still fared better than the U.S. as a whole.
As of November, about 954,000 Texans were unemployed. Looking ahead to the new year, Texas economist Ray Perryman said that indicators remained mixed but that "2010 should be a year of relatively sustained, if modest, recovery."
Gray is happy to leave her job search behind. She figures she filled out 200 applications.
She took the gloves off at the end, crafting a short letter that she partially credits with helping her land her new job:
"To the Hiring Director: This is where I've been told I should craft a catchy yet über-professional cover letter that wows you with my pithy literary skills and my litany of amazing experience, but I've been doing that for eight months now, and frankly, it hasn't gotten me anywhere.
"So here it is: Are you looking for someone who is creative, intelligent, resourceful, hard-working, loyal and fun to have on your team? Yes? Then why not give me a chance to show you what I've got? You have nothing to lose, and you just might find that I am a perfect match for this position! Sincerely yours, Liesl Gray."
Elsewhere in the local economy, the year was marked by mammoth deals: Warren Buffett's deal to buy Burlington Northern Santa Fe Corp., Exxon Mobil's offer to acquire XTO Energy and Denbury Resources' agreement to buy Encore Acquisition. And then there's the ongoing investment by Novartis in Alcon Labs.
In sports business, Tom Hicks found a prospective buyer for his Texas Rangers, while Carl Bell was still searching for someone to pick up his minor league Fort Worth Cats after handing his downtown office building back to the lenders.
Here's an industry-by-industry review of what happened locally in 2009.
Energy
Irving-based Exxon Mobil's blockbuster announcement Dec. 14 that it plans to buy XTO for $31 billion illustrated the global oil giant's bullishness on natural gas as a growing energy source.
The deal, which would make Exxon the biggest gas producer in the U.S., would provide access to XTO's valuable energy reserves, shale gas drilling expertise and extensive lease holdings in hot domestic gas plays. Exxon is to assume about $10 billion in XTO debt, upping the deal's value to $41 billion.
Denbury, of Plano, is to buy another Fort Worth energy company, Encore, in a deal valued at $4.5 billion that was announced Nov. 1. Both companies are focused on oil production.
Barnett Shale drilling, while still substantial in 2009, fell to less than half its peak of 214 active rigs in 2008. Natural gas futures tumbled from a heady level of more than $13.50 per 1,000 cubic feet in July 2008 to an anemic $2.41 on Sept. 4, 2009, before closing the year at $5.57.
While lower prices were a wet blanket for gas producers, they were good news for many consumers, whose residential gas and electricity bills shrank. Many savvy shoppers in Texas' deregulated electricity market could secure rate reductions of 20 to 30 percent by switching electric plans.
-- Jack Z. Smith
Autos
Few people connected to the industry will look back on 2009 fondly.
Almost from the outset, the year was a debacle for auto manufacturers, auto workers and dealers.
Scared off by the economic meltdown of late 2008, the fear of layoffs and their own shaky financial situation, consumers quit buying new cars and trucks in droves. As recently as midyear, sales were at the lowest levels in decades.
The result: Auto dealers struggled, and a few closed. General Motors and Chrysler teetered on the edge of insolvency, even with U.S. government aid, before undergoing Chapter 11 bankruptcy reorganization.
With bankruptcy came even more disruption. GM and Chrysler closed more plants and laid off more workers. Both companies came up with government-forced plans to trim expenses and dealer networks.
Chrysler stripped franchises from four Tarrant County dealerships, consolidating brands into single locations. Several other area Chrysler dealers were closed or lost their franchise.
GM first tried to sell, then ultimately decided to close down its Saturn brand, leaving the local three outlets of DFW of Saturn facing an uncertain future. GM has already ceased manufacturing Saturn, Pontiac and Saab vehicles and is selling its Hummer lineup to a Chinese concern.
Retail vehicle sales surged in August after the federal government offered consumers rebates up to $4,500 to trade in their old gas guzzlers for newer, more efficient models. Sales dropped off again in September but improved modestly in the last three months of the year.
Retail sales of new cars and trucks in Dallas-Fort Worth in November were up 5 percent over a year ago.
For the first 11 months of the year, sales were 28 percent below 2008 levels.
GM's Arlington truck assembly plant rode out the storm and is now the only facility still building the company's large sport utility vehicles.
After being shut down for 12 weeks in the first 10 months of the year, the plant saw steady work and some overtime late in the year. New Plant Manager Paul Graham said that orders for new SUVs remain strong and that the plant expects to work normal hours, plus some overtime, in January.
Banking
Bankers got their collective faces rubbed in the dirt in 2009, with the public blaming them for causing the economic meltdown by dropping lending standards and dealing in risky subprime mortgages.
While some 140 banks failed nationwide, only four did in Texas. It was a welcome reversal of the last wave of bank failures 20 years ago, when two or three Texas banks collapsed every week, said John Blaylock of Austin-based Sheshunoff Information Services, an industry consultant. "Many bankers remembered that and stayed out of exotic areas, were generally more conservative," Blaylock said.
But the state was not immune from public outrage when the federal Troubled Asset Relief Program shored up banks with billions. Not helping were remarks like that of Goldman Sachs Chairman Lloyd Blankfein: "We are doing God's work." Or word that some bankers wanted to pay back federal funds so they could reward themselves with fat bonuses.
In Texas, there were few TARP takers. Fort Worth-based Worthington Bank even exploited anti-bailout sentiment by running billboards attacking rivals gorging at the federal trough. Worthington CEO Greg Morse was quoted in regional and national publications for his colorful anti-TARP rhetoric.
Morse and other local bankers decried tighter capital requirements and higher federal deposit insurance fees -- aimed at strengthening the system but making it harder to lend money when Texas was not among the system's big abusers.
-- Barry Shlachter
Real estate
The commercial real estate market received a chilly forecast for 2009, and the year proved to be just that. Commercial foreclosures increased, and there was a noticeable drop in project starts, the result of tightened credit markets.
Despite some large, high-profile properties hitting the block, there were fewer sales of commercial sites.
Although leasing was also down, there were some bright spots: Q-Edge, a FoxConn Electronics subsidiary, leased the former Nokia cellphone plant at Hillwood's Alliance development, with plans to relocate more than 500 computer assembly jobs from California.
The year began with the shuttering of WestBend, an upscale shopping development on University Drive that also included the remodeling of the nearby River Plaza office building and the construction of a Hyatt Place hotel. Developers said the project will resume once the economy is better.
Next up was the foreclosure of Overton Centre office complex in southwest Fort Worth. The Dallas-based owners couldn't refinance the 24.5-acre property. Later in the year, other huge properties faced foreclosure, including the 113-acre Speedway Town Center and a portion of Aperion Communities' 1,700-acre development in far north Fort Worth.
In November, a bankruptcy judge allowed the sale of the Ridglea Theater on Camp Bowie Boulevard to a Dallas-based lender seeking foreclosure of the historic property that a Fort Worth family trust owned for 18 years.
There were also big sales. The StarPoint real estate investment firm of Beverly Hills, Calif., bought more than 200,000 square feet of restaurant and office space at The Tower condo development in downtown Fort Worth; the New York City-based ING Clarion real estate firm completed its acquisition of the 72-acre Pioneer 360 Business Center; Arlington-based Texas Health Resources bought 47 acres in northwest Fort Worth for a possible hospital site; and Fort Worth's Atlas Properties bought the historic high-rise Electric Building apartments.
In surprising moves, about 40 acres long held by the Lockheed Martin Recreation Association in west Fort Worth went on the block, and Intel Corp. again listed its 527-acre site in north Fort Worth, where it once planned a $2 billion microchip plant.
On the residential front, the $8,000 first-time home-buyer tax credit boosted existing-homes sales in Tarrant County in 2009 but not by enough to declare the local market recovered. Economists say that won't happen without a surge in population or job creation.
New-home sales and housing starts were down significantly, market research showed.
Tarrant County residential foreclosure postings were up 27 percent from 2008, but nearly half of the record 20,170 postings were the result of repostings, or a notice filed a second time within six months on a property. With that, residential foreclosure filings rose 1 percent in Tarrant County in 2009. -- Sandra Baker
Airlines
It was a year of declines for the industry.
Although the cost of jet fuel dropped in 2009, there were fewer passengers and fewer flights, and most airlines found themselves in the red. With the recession deepening, airlines slashed airfares in the spring to try to get the public to fly again.
The big headline for Fort Worth-based carrier American Airlines was capacity cuts and resulting layoffs. Three times during 2009, American announced work-force reductions affecting pilots, flight attendants, ground crew members and maintenance workers. In March, it ended service to Dallas Love Field, and in November it announced that it was closing its Kansas City maintenance base in 2010.
By the end of 2009, American had trimmed 15 percent of its flights since 2007.
The one bright spot is that American's parent company, AMR Corp., completed several financing initiatives in the fall that boosted cash to almost $5 billion.
Dallas-based Southwest Airlines continued to resist the industry trend to charge for checked bags, even launching a TV ad campaign around its "bags fly free" policy.
The low-cost carrier reached deals with its major union groups, including pilots, flight attendants and mechanics. But it couldn't snare bankrupt Frontier Airlines. Southwest entered Frontier's bankruptcy auction days before it closed, offering $170 million for the Denver-based carrier, but lost out to Republic Airways when Southwest couldn't get pilots' unions at both carriers to agree on labor issues.
And Southwest ran into problems with the Federal Aviation Administration, first being fined $7.5 million for flying planes that had not been inspected for structural cracks, then in August having dozens of planes grounded for flying with unapproved replacement parts.
But as the year closed, North Texas airlines' planes were fuller this holiday season, and travel demand seemed to be returning. -- Andrea Ahles
Retailing
The recession crushed some big names, including Circuit City, in 2009.
But one of Fort Worth's best-known retailers, Pier 1 Imports, proved far stronger than it looked a year earlier. In 2009, Pier 1 fought off possible delisting from the New York Stock Exchange after its shares dropped below $1 -- as low as a dime in March.
Then the company's March debt buyback, negotiated at a hefty discount and bankrolled with some of the proceeds from the sale of its downtown headquarters skyscraper for $104 million in 2008, sent its shares on a yearlong run.
As of Thursday, Pier 1's stock price stood at $5.09, up nearly 1,200 percent from where it started the year. That made it one of Wall Street's top performers in 2009.
And unlike a year earlier, when it lost $29 million, Pier 1 earned $52 million in the first nine months of its 2010 fiscal year, which ends in February.
In a mid-December conference call, CEO Alex Smith said the company went into Christmas with its merchandise still at full price, a sign of the emphasis on controlling inventories.
"Those guys are the ones who really have to think about their strategy," Elten Briggs, a University of Texas at Arlington marketing professor, said of retailers like Pier 1, who are selling nonessential goods in a subpar economy.
"Those guys have to be a little bit more convincing and creative in their marketing messages. Conspicuous consumption isn't really in vogue right now."
The Pier 1 board of directors apparently felt that Smith has done his job. His contract was renewed and extended, the company disclosed Dec. 22.
He also received a grant of 375,000 shares of restricted stock Dec. 18 under the company's 2006 stock incentive plan. A third of those shares vest on each of the first three anniversaries of the grant date, provided that Smith is employed. -- John Austin
Defense
The biggest headline was the decision by Defense Secretary Robert Gates and President Barack Obama to halt production of Lockheed Martin's F-22 Raptor.
Gates and Obama fought back congressional attempts to order more F-22s on top of the 187 the Pentagon had already committed to and instead threw their support behind the F-35 Lightning II joint strike fighter that Lockheed is developing.
Meanwhile, the Pentagon has watched Lockheed get far behind schedule on the F-35. Several Defense Department reviews have criticized Lockheed's progress and predicted further delays and cost overruns.
Lockheed Martin officials have defended their efforts, saying the program is gaining traction, but Pentagon officials are reportedly expected to add $1 billion to the 2011 budget request to try to make up for lost time on the F-35.
In November, Australia became the first foreign buyer to publicly commit to buying F-35s, but it has yet to place an order.
About half of Lockheed's 14,000-strong Fort Worth work force is involved with the F-35. The company continued selling and making the F-16 fighter jet and expects additional orders from foreign buyers over the next several years.
Bell Helicopter got a new chief executive in August, its fifth in eight years. John Garrison was dispatched by parent company Textron to replace the retiring Dick Millman, who arrived in January 2007 with a mandate to fix the company's lagging manufacturing systems.
Its civil helicopter production ramped up just as the economy tanked late in 2008, and the company spent most of 2009 retrenching. Its 429 helicopter, the first all-new model in 30 years, was certified in midsummer, but converting "purchase commitments" into firm orders has reportedly been slow because of the economy and the aircraft's nearly $5 million price.
In July, Vought Aircraft Industries' high-profile role in the Boeing 787 Dreamliner was scaled back.
Boeing bought Vought's 787 production facility in North Charleston, S.C., for $580 million, the first of three steps the company took as it prepares to accelerate 787 deliveries once the plane is certified, probably in late 2010.
Vought also won contracts from Boeing for additional parts-manufacturing work on several Boeing planes.
Vought played a major role in the design and testing of the 787, leading the design of the entire tail section of the fuselage and building the first 19 units for test and production aircraft. Vought engineers in Dallas continue to work with Boeing on the 787, and the company is producing a number of smaller parts for the aircraft. -- Bob Cox
To see more of the Fort Worth Star-Telegram, or to subscribe to the newspaper, go to http://www.dfw.com.
Copyright (c) 2010, Fort Worth Star-Telegram, Texas
Distributed by McClatchy-Tribune Information Services.
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