Marketplace: News Archives

Friday, December 1, 2000
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It's Friday, December 1, 2000. I'm David Brancaccio.

Today, US officials were again looking at tapping into the nation's petroleum reserves. This after Iraq stopped shipping oil because the United Nations won't let it keep cash from a new surcharge it wants to apply to its oil. In London, Marketplace's Stephen Beard reports:

Beard: "Crude prices on the London Petroleum exchange rose above $32 a barrel today, as the news about Iraqi exports sank in. Baghdad is reported to have halted the flow of Iraqi oil to the outside world in a row about money. Saddam Hussein is insisting that buyers pay a cash surcharge of fifty cents a barrel. But that would contravene the UN sanctions imposed in 1990 after the invasion of Kuwait. Under a special dispensation, Iraq is allowed to sell 2.3 million barrels a day. The proceeds, however, may be used only to purchase food and medicines for the Iraqi people. That is the restriction Saddam is trying to circumvent.

The loss of Iraqi oil is hardly crippling for the world economy. 2.3 million barrels a day represents only 5 percent of global supplies. But with world stocks at record lows and with the onset of winter, the Iraqi move can only exert an upward pressure on the price of crude. In London, this is Stephen Beard for Marketplace."

The headline reason the price dropped is that the U.S. and other countries promised to compensate for the missing Iraqi oil through other means. Another reason, analysts suggest, is that the biggest economy in the world may be slowing down and may need less oil. That would be the U.S. economy.

The sales of cars made in the U.S. are falling off, which is another sign of a slowing economy. November sales figures are out, and they're not making auto industry managers, workers, or shareholders happy. Ford announced today that in December, it will idle some North American passenger car assembly plants to cut inventories. Three Chrysler plants are not working this week for the same reason.

From the Marketplace Transportation Desk at Michigan Radio, Bob Eccles has more:

Eccles: "Not a pretty picture. Ford's numbers are down 7 percent. General Motors' sales dropped 8 percent. Daimler-Chrysler's were down 5 percent. And the world's largest auto parts supplier, Delphi Automotive, is laying off 1700 workers, so they're not making parts nobody wants to buy. The question is, how to deal with reduced sales and the accompanying build-up of cars on dealer lots. Jim Hallan, analyst with Auto Pacific Incorporated, says idling plants is a start, but that it won't be painless..."

Hallan: "By turning down production, which everybody may end up doing to some degree now, it won't be uniform. You end up precipitating continued reduced sales, because you do hurt your inventory downstream."

Eccles: "While the Big Three struggle, Companies like BMW and Volkswagen are setting U.S. sales records. I'm Bob Eccles for Marketplace."

Chanting Protestors: "No more Gore...Gore must leave!"

400 people were able to witness the arguments first hand, but given the historic reach of the case, the nation's highest court, for the first time ever, immediately released the sound of today's arguments.

Marketplace's John Dimsdale reports the Justices seem to be struggling with the issue of federal authority to rule on state election laws.

Dimsdale: "Both sides came in for some aggressive questioning from nearly every member of the bench. The legal team for Al Gore argued the state supreme court was merely making time for the recounting of ballots allowed under state law when it moved back the deadline for certifying election results. But Justice Sandra Day O'Connor seemed to be uncomfortable with that argument."

O'Connor: "And the legislature had very clearly said, you know, seven days after...that's the date. And, it just does look like a very dramatic change made by the Florida court."

Dimsdale: "Equally, George Bush's lawyer, Ted Olsen, was on the receiving end of scepticism over his argument that the federal court has jurisdiction superceding the state court. Here's Justice Ruth Bader Ginsberg."

Ginsberg: "In case after case we have said we owe the highest respect to what the state says, the state supreme court says, is law."

Olson: "This is a very unusual situation Justice Ginsberg because it is in the context of a presidential election. And in the context of federal rights."

Dimsdale: "The court's decision on states versus federal rights could have bearing on future cases where businesses ask the Supreme Court to endorse one federal rule over 50 different state statutes. This is according to the director of the U.S. Chamber of Commerce's legal center, Stephen Bokat."

Bokat: "So a broadly written opinion on federal supremacy here could be helpful to business in other cases."

Dimsdale: "A final ruling is not expected until next week.

In Washington, I'm John Dimsdale for Marketplace."

And that's the top of our news for Friday, December 1, 2000. Today the Dow Jones Industrial Average fell 40 points, 0.4 percent. The Nasdaq rose 1.8 percent. More on this with the Dallas stock broker in a few minutes.

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