Growth at mid-sized companies help the Texas and U.S. economies

Recent data shows that mid-sized companies — those with annual revenue of $10 million to $1 billion — provide an outsized economic boost to Texas from robust revenue and employment growth.

Texas’ 10,000 middle-market businesses represent less than 1 percent of all companies statewide, yet they account for 16 percent ($495 billion) of total Texas business revenue and 29 percent of the state workforce, the National Center for the Middle Market (NCMM) reported today.

Nationally, nearly 200,000 mid-sized firms represent 3 percent of all businesses, but are projected to create 61 percent of all new jobs in the coming year.

The improved performance rate of 64 percent for Texas mid-sized businesses in the last 12 months surpassed the national rate of 62 percent, according to a survey by the NCMM, a collaboration between GE Capital and Ohio State University’s Fisher College of Business.

NCMM executive director Thomas A. Stewart said middle-market companies in Texas and across the country have ” found a higher gear.” He noted that U.S. mid-sized companies have seen revenue growth accelerate for four straight quarters and employment growth average 3.5 percent in the last year, up 1 percentage point higher from the average in the previous two years.

Employment at Texas mid-sized companies was up 2.6 percent in the last 12 months, compared with 3.5 percent nationally. Nationally, the healthcare industry has seen the most middle-market job growth. Business executives expect continued job growth over the next 12 months.

Revenue at Texas mid-sized companies grew 6.5 percent in the last 12 months vs. 7.5 percent nationwide. About two-thirds of Texas and U.S. executives expect revenue to continue growing over the next 12 months.

So, is it any surprise that Texas business executives are more optimistic about the local, national, and global economies than their counterparts?

The NCMM survey found that 94 percent of Texas middle-market executives are confident in their local economy vs. the national rate of 74 percent. Regarding the U.S. economy, 73 percent of Texans are confident vs. 67 percent nationwide. Regarding the global economy, 56 percent of Texans are confident vs. 26 percent nationwide.

Still, companies in Texas and nationwide continue to see challenges ahead.

The cost of health care still ranks as the top challenge to doing business for Texas mid-size companies, followed by the uncertainty of government actions and the ability to sustain profit margins and grow revenue.

Nationally, middle-market companies continue to face difficulty attracting people for senior-level positions and many expect the retirement of Baby Boomers to negatively affect their financial performance.

NCMM surveyed 1,000 C-suite executives in mid-September across the country.

Developer buys land near D/FW Airport for warehouse projects

A Pennsylvania-based commercial real estate firm has purchased land near Dallas/Fort Worth International Airport for construction of an industrial building project.

Liberty Property Trust bought 43 acres at Valley View Lane and Frye Road south of D/FW Airport.

Liberty said it has the potential to build 750,000 square feet of industrial space on the property.

“This is a great time to enter the Southwest market and this parcel offers excellent accessibility,”  said Mike Heise, vice president and city manager for Liberty’s Dallas region. “The market is strong and the acquisition provides a new platform for development.”

Liberty owns more than 1.86 million square feet of industrial space in the Dallas area.

Based in Malvern, Penn., Liberty has 105 million square feet of office, distribution and light manufacturing properties in the U.S. and Britain.

Dallas-Fort Worth ranks among top U.S. areas for most jobs added

Houston and Dallas-Fort Worth areas ranked among the top U.S. metropolitan areas for the most number of jobs added over the last 12 months, according to data released today by the  U.S. Bureau of Labor Statistics.

The largest job gains for the 12 months ended Sept. 30 were in the New York area (+130,500), the Houston area (+119,400) and the Los Angeles area (+102,000). The Dallas-Fort Worth area was No. 4 (+100,200).

The Dallas-Plano-Irving division — a finer slice of the metropolitan pie — performed even better: It gained 78,000 jobs, or a 3.6 percent increase over the last year.

Overall, payroll employment increased in 314 of the nation’s 372 metro areas, decreased in 53  and was unchanged in five areas in the last 12 months.

By percentage, metro areas rank differently. The largest 12-month percentage gains in employment were in Muncie, Ind. (+8.9 percent), Midland (+6.4 percent) and Elkhart-Goshen, Ind. (+5.4 percent). The Dallas-Fort Worth’s employment gain was 3.2 percent.

Just for the month of September, the Los Angeles area added the most jobs (40,000). Houston was No. 2 (+23,600). The D-FW was No. 37 (+4,800).

Unemployment rates

Unemployment rates were lower in September than a year earlier in 339 metro areas, higher in 26 areas and unchanged in seven areas. Nearly one-third of all metro areas (118) had jobless rates of less than 5 percent; six metros had rates of 10 percent or higher.

The D-FW unemployment rate last month was 5 percent. Across Texas, fourteen metro areas had jobless rates of less than 5 percent in September.

Yuma, Ariz., had the highest unemployment rates in September (25.9 percent). Bismarck, N.D., had the lowest rate (2.1 percent).

The U.S. unemployment rate in September was 5.7 percent, down from 7 percent a year earlier.

None of the employment or unemployment data above has been adjusted for seasonal variations.

Lenders are taking fewer Dallas-area homes through foreclosure

Less than 1 percent of Dallas-area homes are in foreclosure. (CoreLogic)

Lenders have foreclosed on about 25 percent fewer Dallas-area homes in the last year, according to a new report by CoreLogic Inc.

During the 12-month period ending September, 5,899 Dallas-area homes were sold at foreclosure auction. That compares with more than 7,900 home foreclosures in the previous 12 months.

Home foreclosure totals in the Dallas area are less than half of what they were in 2011, according to CoreLogic.

Only 0.7 percent of Dallas-area homes were in foreclosure in September, researchers said.

That compares with 1.6 percent of homes in some stage of foreclosure nationwide.

Nationwide foreclosures were down more than 32.6 percent in September from a year earlier and were down 61 percent from the peak of completed foreclosures in 2010.

“The level of serious delinquencies has rapidly declined over the last few years, but the pace of improvement is beginning to recede,” said Sam Khater, deputy chief economist at CoreLogic. ” As of June, serious delinquencies were 26 percent lower than the prior year, but as of September serious delinquencies were 21 percent lower.”

The number of homes posted for potential foreclosure in the Dallas-Fort Worth area is at a more than decade low, according to data from Addison-based Foreclosure Listing Service.

 

Ford may invest $5 billion in Lincoln’s ongoing revival

2015 Lincoln MKC (file photo)

Ford Motor Co. will spend up to $5 billion over the next five years in an attempt to keep reviving Lincoln.

Reuters said Ford CEO Mark Fields has earmarked at least $1 billion annually for Lincoln over the next five years, compared with $2 billion spent on the division since 2012, according to an unnamed source.

The expenditures will pay for a new MKX crossover next year; a new MKS sedan in 2016; a new Navigator with an aluminum body in 2017; a refresh for the recently introduced MKC crossover in 2018; and replacements for the MKZ sedan and MKT crossover in 2019, both of which may get new platforms.

Lincoln badly trails the leading luxury brands in the U.S., including cross-town rival Cadillac.

Nonetheless, Ford wants Lincoln to triple its sales to 300,000 vehicles by 2020 and apparently is willing to invest in at least one distinct vehicle platform that won’t be shared with mainstream Ford models.

That may be a premium two-wheel and all-wheel drive platform that will underpin the next generation of Lincolns beginning in 2019, Reuters said.

The brand’s most recent success has been the new MKC compact crossover, which offers styling and driving dynamics that are distinct from the Ford Escape on which the MKC is based.

Through September, Lincoln’s sales were up 13.2 percent, according to Automotive News.

Senior adviser in General Motors bailout coming to the aid of RadioShack

(Mona ((Mona Reeder/The Dallas Morning News))

RadioShack said Wednesday it has hired a former U.S. Treasury senior adviser to help it fix its business.

The Maeva Group will provide advisory services to RadioShack’s board of Directors and management as the retailer tries to turnaround its operations and finances.

Harry J. Wilson, founder and CEO of the Maeva Group, was named chief revitalization officer of RadioShack, reporting to RadioShack CEO Joe Magnacca and the RadioShack Board.

Wilson was a senior advisor in the U.S, Department of the Treasury and was a senior member of the Auto Task Force, which was responsible for the Treasury’s role in the restructuring of General Motors and Chrysler.

Wilson led a team responsible for the business and financial work of the task force and also led the team that completed the General Motors bailout.

“Harry Wilson’s experience in guiding companies through successful turnarounds speaks for itself and will be extremely valuable as we continue our efforts to revitalize the company. We welcome his insight and involvement,” Magnacca said in a statement.

Wilson said he believes RadioShack is worth saving.

“RadioShack remains an important retailer serving many key markets. While challenging secular trends have undermined its performance in recent years, we believe that there is a great deal of opportunity ahead of it.

“We look forward to working with the management team, the board, customers and vendors to help address these issues as quickly as possible and to revitalize the company,” Wilson said in a press release this morning.

RadioShack said earlier this year that it may have to restructuring in bankruptcy.

Judge orders Trinity Industries, plaintiff who won at trial to mediation

WASHINGTON—U.S. District Judge Rodney Gilstrap ordered Trinity Industries and the plaintiff who won his case in federal court earlier this month to try one last time to settle their differences.

Gilstrap ordered both the company and plaintiff Josh Harman to mediation led by Duke University professor Francis McGovern, He set a Dec. 31 deadline for an agreement.

If no agreement is reached, the judge will have to decide how much Trinity will be ordered to pay — and likely a host of other questions expected to be raised by competing motions from the parties.

A jury found Oct. 13 that Trinity had violated the False Claims Act because it failed to tell the Federal Highway Administration of money-saving changes it had made to guardrails in 2005. Those guardrail systems are in use on highways across the country, including in Texas. State highway departments have paid $175 million in federal dollars for them since 2005.

The company believes the jury was wrong and has vowed to appeal.

Jeff Eller, a spokesman for Trinity, said the company will comply with the judge’s order, but continues to feel the verdict was wrong as a matter of law.

“Trinity continues to believe that the jury decision cannot and will not withstand legal scrutiny. We intend to follow the court instructions and attend mediation,” Eller said.

An attorney for Josh Harman, the competitor to Trinity who brought the suit on behalf of the federal government, said the mediation could touch on any part of the case. Both sides are likely to file a storm of post-trial motions, and the mediation likely is the judge trying to give a settlement one more chance.

Beyond the question of whether the jury was right in nits verdict, other complicated issues remain in dispute as well. For instance: If no settlement is reached, how much will the judge order the company to pay?

The jury determined that the fraud cost the government $175 million. But that figure, thanks to language in the False Claims Act, would ordinarily be tripled when damages are calculated. In addition, as much as $200 million in additional fines, and attorneys’ fees, could be added as well. That latter total could come down to how many technical violations of the False Claim Act were contained in each of the many invoices the company sent over the years.

Trinity Industries had 2013 revenues of $4.4 billion and is best known for making rail cars. Its highway product subsidiary makes guardrails that are in use across the country. Several states have suspended use of the guardrails, due to Harman’s suit. Following a demand for more testing, the company suspended sales of the units pending test results.

Colliers International partners with Richardson project management firm

The Dallas office of commercial real estate firm Colliers International is expanding its operations through a partnership with another firm.

Colliers has reached a joint operating agreement with Richardson-based project management company Charter Acquisitions LLC.

Charter will locate professionals in Colliers Uptown Dallas office to provide in-house project management services for multiple property types.

“Partnering with them not only improves our capability, but also allows us to scale as our clients’ demands require,” David Pinsel, managing director of Colliers International, said in a statement.

Charter Acquisitions bills itself as a tenant services company and is headed by Randy Gerdes, Warren Lynch, Noel Ragin and Carolyn Norman.

 

FTC sues AT&T for slowing data speeds for users with ‘unlimited’ plans

In this Oct. 21, 2014 photo, people pass an AT&T store in New York's Times Square. AT&T is being sued by the government over allegations it misled millions of smartphone customers who were promised unlimited data but had their Internet speeds cut by the company — slowing their ability to open web pages or watch streaming video. (AP Photo/Richard Drew)

WASHINGTON–Back in June, 2010, AT&T, Inc. disappointed many customers by ending its unlimited data plans for mobile phone customers. The silver lining? If you were an existing customer, you could keep your unlimited data plans.

But according to a lawsuit filed by the Federal Trade Commission Tuesday, by October of the following year, AT&T had begun slowing down the data-transfer speeds for customers on the unlimited plans. The so-called throttling, according to the lawsuit, was substantial and in some cities was triggered anytime a customer used as little as 2GB of data in a given month.

The suit names AT&T Mobility, which is the wireless phone subsidiary of Dallas-based AT&T, Inc. In a statement Tuesday afternoon, the company called the suit “baseless.”

“The FTC’s allegations are baseless and have nothing to do with the substance of our network management program,” the statement reads. “It’s baffling as to why the FTC would choose to take this action against a company that, like all major wireless providers, manages its network resources to provide the best possible service to all customers, and does it in a way that is fully transparent and consistent with the law and our contracts.

“We have been completely transparent with customers since the very beginning. We informed all unlimited data-plan customers via bill notices and a national press release that resulted in nearly 2,000 news stories, well before the program was implemented. In addition, this program has affected only about 3% of our customers, and before any customer is affected, they are also notified by text message.”

The FTC says AT&T could have required all existing customers to switch to “tiered” data plans when it stopped offering the unlimited plans to new customers, but that it didn’t because it was afraid it would lose too many accounts. It also says that AT&T could have required customers who re-upped their contracts to switch to tiered plans then, but decided not to for the same reason.

Individual consumption of data over the wireless connections has spiked as smart phones have been more ubiquitous and the number apps and other usage has made a phone more like a mini laptop. Verizon Wireless considered, then discarded, plans to begin throttling its customers’ use of data as recently as Oct. 1.

WHen AT&T began throttling the use of data by customers who exceeded monthly thresholds, it initially capped users at speeds of just 128Kb per second, a standard that was relaxed in 2012 to cap speeds at between 256 Kbps and 512 Kbps. Typically, according to the suit, AT&T mobile customers could expect speeds that ranged from 700 Kbps to 1.7Mbps for older phones and anywhere from 2 to 12 Mpps for faster, newer devices.

That means, the suit alleges, that customers who have paid for unlimited data plans can see their speeds drop 90 to 95 percent once they’ve used enough data to trigger the throttling. On average, it affected users during the last 12 days of their billing cycle.

CNET reported Tuesday that AT&T has “far fewer” phone customers with unlimited plans that it used to, but said it was not clear how many. The FTC says some 25 million customers have had their speeds “throttled” at one time or another.

Tuesday’s action brought praise from some consumer advocacy groups.

“Consumers have been complaining about throttling for years,” said Delara Derakhshani, policy counsel for Consumers Union, the advocacy arm of Consumer Reports. “We’re glad the feds are going after companies that are ripping people off. As the FTC said, unlimited means unlimited. If you charge someone for an unlimited data plan and then slow down their speeds, that sounds deceptive to us. The government says some people saw their data speeds slowed down so dramatically they couldn’t use their smartphones for basic things like web browsing.”

On Oct. 8, AT&T, Inc. agreed to pay $105 million to settle claims by both the FTC and the Federal Communication Commission that it had purposely added monthly charges to its customers’ phone bills for third-party services that hadn’t ordered.

Last week, AT&T announced third-quarter earnings of $3 billion on $33 billion in revenue. Earnings per share were slightly down from a year ago, but the company announced it had added 2 million new wireless customers.

GameStop says it’s not worried about Wal-Mart’s turf invasion

DMN file photo (DMN File Photo)

GameStop doesn’t seem too worried about Wal-Mart’s plans to also sell Call of Duty: Advance Warfar a day early.

Call of Duty: Advanced Warfare goes on sales broadly on Nov. 4, but GameStop usually gets a jump from game publishers. This time, Wal-Mart is doing the same.

Wal-Mart is also selling pre-owned games in 1,700 stores.

Asked to respond, GameStop president Tony Bartel said Tuesday that the retailer’s buy-sell-trade program has made it a leader in the video game category.

When others have tried it, GameStop benefits from the increased consumer awareness, Bartel said.

GameStop will host its usual advance parties starting at 6 p.m. Nov. 2 at 4,100 GameStop stores. Wal-Mart is planning launch parties in 2,800 stores starting at 10 p.m.

Both stores will start selling the game at 12:01 a.m. on Nov. 3.