The Norman Transcript

December 30, 2013

Merger, layoffs mark the year

By Kristi Eaton
The Associated Press

OKLAHOMA CITY — One of Oklahoma’s largest energy companies had a turbulent year with the layoff of hundreds of employees and the forced resignation of its founder.

Chesapeake Energy announced in October that it was laying off 800 workers across the company, including 640 at its Oklahoma City headquarters. The company said that it still employed 3,500 people at its corporate headquarters and 6,000 across Oklahoma. In January, the company announced that founder Aubrey McClendon would resign on April 1 over what Chesapeake officials called “philosophical differences.”

McClendon had founded the company in 1989, and he was stripped of his position as chairman of the company’s board in May 2012.

Following the announcement McClendon would be leaving, several other top-level executives announced they, too, were leaving the company.

In a letter to employees announcing the layoffs, CEO Doug Lawler said the corporate restructuring process has made Chesapeake “poised to grow for decades to come.”

“By scaling E&P support services, reducing management layers and aligning resources with a sharpened focus on accountability and efficiency, we have created a business built to deliver a sustainable and profitable future,” Lawler said.

In Tulsa, local and state leaders were praising the merger of two airlines, which they said would add job security to thousands of workers.

Oklahoma Gov. Mary Fallin said the merger between American Airlines and U.S. Airways was great news for the 6,000 American Airlines employees who work at a maintenance plant in Tulsa.

“We know that the state of Oklahoma will continue to be a great place for these employees to call home, and an ever-growing hub for the aerospace and aviation industries,” she said in a statement.

The deal went through and the two became known as American Airlines Group, Inc., after federal regulators settled a lawsuit filed by the Justice Department seeking to block the deal because of fears that it would hurt competition and lead to higher prices. But the two airlines promised to give up some sought-after spots at airports in New York and Washington and other areas.

The Tulsa Regional Chamber of Commerce and Tulsa Mayor Dewey Bartlett also applauded the merger, calling it a positive step for job growth in the region and job security. But it remains to be seen what changes the thousands of employees in Tulsa will see or experience with the deal.

Nearby, state and local leaders announced in December that Macy’s would be opening a fulfillment center in Owasso in summer 2015. The 1.3 million-square-foot facility was expected to create 1,500 full-time and part-time jobs as well as 1,000 seasonal jobs each year. The $170 million facility will handle orders placed online and in stores.

Also in December, General Electric Co. announced it had selected a site near downtown Oklahoma City for its planned $110 million global research center. The new 95,000-square-foot center will initially focus on technologies involving the production of unconventional oil and gas resources, such as shale. The research center, which is scheduled to open in 2015, will create 130 jobs.

The state’s second-largest newspaper, the Tulsa World, got new owners. Warren Buffet’s Berkshire Hathaway purchased the 95,000-circulation paper in February to add to the company’s growing newspaper unit.

Robert Lorton Jr., the chairman of the World Publishing Company, said at the time that selling to Berkshire would provide a secure future for the paper in Tulsa.

Oil company TransCanada got one step closer to commercial operation on the Gulf Coast Project, the southern leg of the Keystone XL Pipeline. TransCanada began injecting crude oil into the 485-mile pipeline between Cushing and Port Arthur, Texas, in December. The line is expected to become operational Jan. 3 and carry up to 700,000 barrels of oil per day.

The state Department must approve the northern leg, which would transport oil from Canada’s oil sands into the U.S., because it crosses an international border.

In November, Oklahoma City-based Hobby Lobby learned that the Supreme Court had decided to take up the company’s lawsuit over the new health care law’s provision on insurance for contraceptives.

Hobby Lobby and another for-profit company in Pennsylvania had sued, saying they should not have to cover contraceptives that violate their religious beliefs. The court said the cases will be combined for arguments, probably in late March. A decision should come by late June.

Founded in 1972, Hobby Lobby now operates more than 500 stores in 41 states. Hobby Lobby stores are closed on Sunday and the company calls itself d a “biblically founded business.”

The Green family believes life starts at life begins at conception, and they said they oppose only birth control methods that can prevent implantation of a fertilized egg in the uterus, but not other forms of contraception.

The company’s religious principles also came under fire earlier in October when a New Jersey man wrote a scathing blog post saying he would never shop at one of the arts-and-crafts stores because the company refused to carry Hanukkah decorations.

But company president Steve Green said the company does not have problems with selling items celebrating Jewish holidays, and that the retail chain would start selling Jewish merchandise in some stores in New York and New Jersey.

That same month, an Oklahoma jury became the first in the country to find Toyota Motor Corp. liable in a case of sudden unintended acceleration that left one person dead. The jury awarded a total of $3 million in monetary damages to the injured driver involved in the crash, and to the family of the passenger, who was killed. The Japanese automaker had won all unintended acceleration cases that went to trial previously.

Another first in Oklahoma happened the day after Thanksgiving, when residents experienced the first legal Black Friday in 2013 in 70 years. Low-price retail events had technically been illegal because of a 1941 law that required retailers to sell products for at least 6 percent more than invoice cost. The change meant that shoppers in the state got to see the same Black Friday deals at big box retailers that are available in other parts of the country.

The unemployment rate in Oklahoma steadily increased in the second half of the year. The state started 2013 with an unemployment rate of 5.1 in January. It dipped to 4.9 percent in April before increasing to 5.1 percent in May. The rate increased two-tenths of a percentage point to 5.3 percent in July, and by October, it had reached 5.5 percent, according to the Bureau of Labor Statistics.

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