Struggling With Diesel, Dialing for Profits
The price of diesel is driving independent truckers out of business at a record rate. Vodafone returns to profit just in time for its CEO to leave on a high note. And even in a bad ad environment, one company is wagering that billboards still have a capti
NEWS AT A GLANCE
Struggling to keep on trucking
With the price of diesel jumping to $4.50 a gallon, from about $2.50 a year ago, commercial trucking is becoming a dicey business. Some 45,000 trucks, or 3 percent of the U.S. fleet, have left the road since early last year, which is even more than in a big shakeout in the early 1980s, when the industry became deregulated and fuel cost and interest rates were high. After deregulation, the number of small, independent operators grew to 350,000. These outfits, with little bargaining power and tiny profit margins, are being hardest hit, and they are starting to complain to Congress. “It would seem that they are demanding a return to some form of regulation,” said John Seibert of the Independent Drivers Association. (The New York Times)
Vodafone post record gain, loses CEO
Vodafone, the world’s largest cellphone company, reported a record annual profit of $13.2 billion and said CEO Arun Sarin is stepping down in July. The results, which beat analysts’ estimates, followed last year's loss. Sarin will be replaced by his deputy, Vittorio Colao. (MarketWatch) During his five years as CEO, Sarin bid unsuccessfully for AT&T Wireless but purchased a majority of No. 3 Indian carrier Hutchison Essar. Vodafone’s strength in emerging markets accounted for much of its 14 percent rise in revenue, and its better-than-expected 2009 forecast. “Vodafone is getting an extra edge and that edge is coming from the emerging markets,” said Global Insight analyst Emeka Obiodu. (Bloomberg)
Betting on the buoyant billboard
Van Wagner Communications, the largest private outdoor advertising firm, said it will spend up to $5,500 on each of some 600 billboards in New York, Chicago, Los Angeles, and Boston. The investment includes a stainless steel apron for all the billboards and large digital time and temperature displays for about half, and is a testament to Van Wagner’s belief that the U.S. economic slump will not drag down a boom in outdoor advertising, which rose 7 percent last year to $7.3 billion. “People are creatures of habit,” said CEO Richard Schap. “I’m guessing that the guy who exits the Long Island Expressway will be looking up and thinking ’It’s 7:02 today’ or ’It’s 7:15 today and I’m running late.’” (Reuters)
Anheuser-Busch takeover bid sparks SABMiller rise
Shares of beer giant SABMiller jumped in London early today after a report that Belgium-based InBev is looking to buy dominant U.S. brewer Anheuser-Busch for $46 billion. The Financial Times, which reported the news last Friday, said that SABMiller was expected to be InBev’s No. 2 choice if the Anheuser-Busch deal falls through. (Bloomberg) InBev shares dropped this morning after the Belgian daily De Tijd said that InBev’s board could reach a decision today on whether to formally authorize buyout talks. (Reuters) The deal would help InBev “solve their issues in the U.S.,” which accounts for less than 5 percent of total sales, said ING Barings analyst Gerard Rijk. (BusinessWeek.com)
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