Wednesday morning headlines

Sales tumble: Well, it's official: The Christmas shopping season was terrible. The government reports a 2.7 percent drop in retail sales last month, which was even worse than expected. This is a big problem considering that consumer spending accounts for about two-thirds of total economic activity. (AP)

Gottschalks files Chapter 11: The Fresno-based department store chain has put itself up for sale. Gottschalks operates mainly in northern and central California, as well as the Pacific Northwest. The company has arranged financing for wages and benefits, some vendor payments and other operating expenses while it reorganizes. (AP)

Stocks open lower: This could be a gloomy day, what with the retail sales figures, the forced restructuring of Citigroup, and a couple of big bankruptcy filings. Already, the Dow is down almost 300 points.

Big drop in shipments: The Port of L.A. saw a 15.2 percent plunge in cargo traffic for December and a 6 percent drop for all of 2008. The port's executive director, Geraldine Knatz, expects further declines this year. "In the near-term, our customers have warned that container volumes will continue to drop, as much as 20 percent or more for some of our tenants," she tells the Daily Breeze. Final figures were not available from the Port of Long Beach, but officials estimated a 10 percent decline in shipments for 2008.

Port officials are examining contracts with each of the shipping companies to see if any adjustments can be made to help them get through the economic downturn. Additionally, the Port of Los Angeles has cut $20 million from its spending budget, with further reductions on the horizon. "Our customers have made long-term commitments to operate out of this port, and their revenue losses impact our project funding stream," Knatz said. "That's caused us to proactively look inward to see how we can cut internal costs and keep operating expenses low."

Port plans on hold?: Remember that big proposal to build a $5 billion container port on Mexico's Baja California peninsula - the one that would create problems for the ports of L.A. and Long Beach? Well, it's been difficult to get financing, and a Mexican official now says that the project is in doubt. (Reuters)

Superior Industries closes plant: The Van Nuys-based company makes aluminum wheels for the major automakers, so you can see the problem. As part of the local plant closure, 290 people will lose their jobs. From the LAT:

Suppliers provide about 70% of the content in most automobiles, including seats, specialized bolts on the suspension and wheels. According to a Superior financial report, Ford Motor Co., General Motors Corp. and Chrysler represented about 78% of the company's total wheel sales during the first three quarters of 2008. "It's really a function of the auto industry in general," said Jim Hossack, vice president at AutoPacific, which provides marketing and product consulting for the industry.

SAG strike doubtful: After that rancorous meeting of the national board, the Screen Actors Guild has no date for taking a strike authorization vote. Given the moves by moderates to dump chief negotiator Doug Allen, that vote may never happen. Meantime, Allen’s status remains unclear. From Variety:

The meeting devolved into shouting matches on a number of occasions. The moderate board members, many from out of town and needing to catch Tuesday afternoon flights, became increasingly frustrated due to an array of parliamentary manuevers and stall tactics by Rosenberg and Membership First supporters such as proposing and then debating competing resolutions. The moderates were infuriated that they were prevented from taking a vote on the resolution after being required by Allen to attend the emergency meeting in person rather than using videoconferencing equipment. That anger boiled over after a Membership First member was found with three voting devices in her lap, raising subsequent questions as to whether other votes during the meeting had been compromised.

Drought worries: Another day of 80-degree temperatures - and with it new concerns that we'll face water rationing by spring. That means capping supplies to local agencies and possibly increasing rates. Longer-term, it could put a crimp in the economy. From the WSJ:

Another dry year could mean water rationing for businesses and individuals. It could also slow business expansion and affect the agricultural industry, ski resorts and efforts to keep firefighting costs down, after a year in which state and federal officials spent $1 billion combating wildfires.

Lacter on radio: This morning's business chat with KPCC's Steve Julian (moved to Wednesday this week) covers the bleak earnings outlook and a slowdown in tourism. Also at kpcc.org and on podcast.