Tuesday, February 10, 2009
RNC Chairman Michael Steele Delivers Weekly Republican Address
RNC Chairman Michael Steele Delivers Weekly Republican Address. Transcript: This is Michael Steele, Chairman of the Republican National Committee.
GM Cuts 10,000 Salaried Jobs; Lowers U.S. White-Collar Pay
By Michelle Krebs
DETROIT -- General Motors will eliminate 10,000 jobs from its global salaried ranks, with more than a third of those being in the United States. Remaining salaried workers in the States will see their pay cut temporarily, beginning May 1.
"These difficult actions are necessitated by a severe drop in vehicle sales worldwide and by the need to restructure GM for long-term viability," GM said in its statement issued Tuesday morning.
Job Cuts: Numbers Vary By Region
GM's latest round of job cuts as well as the pay reductions had been anticipated, but the job cuts were deeper than some analysts predicted. The job cuts amount to a 14-percent reduction of GM's salaried workforce. The automaker's global salaried employment will drop to 63,000 people from the current 73,000 this year, the company said.
Not surprisingly, the biggest chunk of job cuts will occur in the U.S., where industry and GM vehicle sales continue to plummet to record lows. GM will eliminate 3,400 -- or 12 percent -- of its 29,500 salaried positions in the U.S.
U.S. vehicle sales in January fell 37 percent to a 27-year low and an annualized rate of under 10 million vehicles. GM sales, which fell 11 percent from 2007 to 2008, dropped 49 percent in January, more than the total industry. For 2009, GM is conservatively forecasting industry sales of 10.5 million vehicles, compared with 13.2 million last year and an average of 16 million this decade.
GM said the U.S. employment reductions will be made using separation programs and policies, which provide for severance payments, benefit contributions and outplacement assistance. The majority of the reductions are expected to take place by May 1, GM said
Job cuts outside the U.S. will vary depending on the staffing levels in the region and market conditions. GM provided no specifics, saying details of the reductions and separation programs will be shared directly by regional leadership with the affected employees.
Increasingly, GM is relying on sales outside of the U.S. In 2008, 64 percent of GM's sales were outside the U.S., especially emerging markets like China, Brazil, India and Russia. That was up from 59 percent in 2007. Even so, GM's forecast calls for global sales to fall to 57.5 million vehicles from last year's 67.1 million last year, a 10-percent decline.
Pay Cuts: Range from 3 to 10 Percent
GM also announced a temporary pay reduction for a majority of U.S. salaried employees. The cuts begin May 1 and are effective through year-end, when they will be reviewed. In the U.S., executive employees will have their base pay reduced by 10 percent, and many other salaried employees will see reductions of 3 to 7 percent.
Other countries are currently reviewing compensation and benefits for salaried employees, GM said.
High-Profile Departures
In recent days, GM has announced the departures of a couple of high-profile executives.
Most notably, GM said Monday that the legendary Bob Lutz, vice chairman of global product development, will step down from day-to-day duties April 1 and become a senior advisor until he retires at year-end.
GM's second-in-command public relations exec, Tony Cervone, who was heir apparent to the top PR job, left the automaker to head communications at United Airlines.
Feb. 17 Deadline Looms
GM noted that it had outlined the need for the reductions in its restructuring plan submitted to Congress on Dec. 2, 2008. "The announcement this week begins implementation of this aspect of the plan," its statement said.
A flurry of activity is expected this week as GM puts the finishing touches on its progress on its viability plan that must be submitted to the U.S. government Feb. 17 in order to keep the $13.4 billion in federal loans it already has received and to obtain future funding. Another progress report is due March 31.
Already, GM has started offering buyouts to 62,000 union workers. Word is GM is specifically targeting more than 10,000 of those workers, many who are retirement eligible, and hopes half will accept the offers. Under GM's 2007 contract with the United Auto Workers union, new hourly employees can be hired in at lesser pay, about $14 an hour or about half of what workers now make.
In addition to the buyout offers, GM is talking with its unions about other cost-reduction issues.
Across the Atlantic, GM and the Swedish government are in talks as to what to do with Saab. The two parties are negotiating a way Saab can be re-established as an independent entity with financial help from the Swedish government.
GM is expected to decide the fate of its ailing Hummer brand by the end of the first quarter. GM has put it on the auction block and claims it has received considerable interest from prospective buyers. However, GM could opt to keep it and change it or kill it altogether.
GM also is contemplating the future of its Saturn division. GM executives and Saturn dealers met last week to consider a host of options that GM marketing chief Mark LaNeve described to Automotive News as "everything from a new dualing pattern to a spinoff to a partnership to an outright sale." LaNeve told the trade journal the list of options would be narrowed and presented to Saturn dealers this week. Dealers said the final decision on Saturn's fate could be disclosed within hours of GM filing its viability plan on Feb. 17.
GM said in December it will focus on its core brands -- Chevrolet, Cadillac, Buick and GMC. It already has said it will drastically reduce its Pontiac lineup so that it becomes a niche brand.
On the supply side, GM is negotiating with bankrupt Delphi Corp., a company created from GM's far-flung parts operations in1999, to take back some of Delphi's plants. GM wants to make sure it continues to receive a stream of parts from its largest supplier. For Delphi, pawning some of those plants onto GM may help it attract financing so it can emerge from Chapter 11, where it has been mired since October 2005.
Bankruptcy Still An Option
And still, GM could face bankruptcy, likely a pre-packaged one. The U.S. government, which has hired expert advisors on bankruptcy, could force GM as well as Chrysler into bankruptcy in order to put U.S. taxpayers ahead of other creditors for being re-paid loans.
GM insists as it has all along that bankruptcy is not an option and would be sure death as consumers would not buy vehicles from a company in bankruptcy.
DETROIT -- General Motors will eliminate 10,000 jobs from its global salaried ranks, with more than a third of those being in the United States. Remaining salaried workers in the States will see their pay cut temporarily, beginning May 1.
"These difficult actions are necessitated by a severe drop in vehicle sales worldwide and by the need to restructure GM for long-term viability," GM said in its statement issued Tuesday morning.
Job Cuts: Numbers Vary By Region
GM's latest round of job cuts as well as the pay reductions had been anticipated, but the job cuts were deeper than some analysts predicted. The job cuts amount to a 14-percent reduction of GM's salaried workforce. The automaker's global salaried employment will drop to 63,000 people from the current 73,000 this year, the company said.
Not surprisingly, the biggest chunk of job cuts will occur in the U.S., where industry and GM vehicle sales continue to plummet to record lows. GM will eliminate 3,400 -- or 12 percent -- of its 29,500 salaried positions in the U.S.
U.S. vehicle sales in January fell 37 percent to a 27-year low and an annualized rate of under 10 million vehicles. GM sales, which fell 11 percent from 2007 to 2008, dropped 49 percent in January, more than the total industry. For 2009, GM is conservatively forecasting industry sales of 10.5 million vehicles, compared with 13.2 million last year and an average of 16 million this decade.
GM said the U.S. employment reductions will be made using separation programs and policies, which provide for severance payments, benefit contributions and outplacement assistance. The majority of the reductions are expected to take place by May 1, GM said
Job cuts outside the U.S. will vary depending on the staffing levels in the region and market conditions. GM provided no specifics, saying details of the reductions and separation programs will be shared directly by regional leadership with the affected employees.
Increasingly, GM is relying on sales outside of the U.S. In 2008, 64 percent of GM's sales were outside the U.S., especially emerging markets like China, Brazil, India and Russia. That was up from 59 percent in 2007. Even so, GM's forecast calls for global sales to fall to 57.5 million vehicles from last year's 67.1 million last year, a 10-percent decline.
Pay Cuts: Range from 3 to 10 Percent
GM also announced a temporary pay reduction for a majority of U.S. salaried employees. The cuts begin May 1 and are effective through year-end, when they will be reviewed. In the U.S., executive employees will have their base pay reduced by 10 percent, and many other salaried employees will see reductions of 3 to 7 percent.
Other countries are currently reviewing compensation and benefits for salaried employees, GM said.
High-Profile Departures
In recent days, GM has announced the departures of a couple of high-profile executives.
Most notably, GM said Monday that the legendary Bob Lutz, vice chairman of global product development, will step down from day-to-day duties April 1 and become a senior advisor until he retires at year-end.
GM's second-in-command public relations exec, Tony Cervone, who was heir apparent to the top PR job, left the automaker to head communications at United Airlines.
Feb. 17 Deadline Looms
GM noted that it had outlined the need for the reductions in its restructuring plan submitted to Congress on Dec. 2, 2008. "The announcement this week begins implementation of this aspect of the plan," its statement said.
A flurry of activity is expected this week as GM puts the finishing touches on its progress on its viability plan that must be submitted to the U.S. government Feb. 17 in order to keep the $13.4 billion in federal loans it already has received and to obtain future funding. Another progress report is due March 31.
Already, GM has started offering buyouts to 62,000 union workers. Word is GM is specifically targeting more than 10,000 of those workers, many who are retirement eligible, and hopes half will accept the offers. Under GM's 2007 contract with the United Auto Workers union, new hourly employees can be hired in at lesser pay, about $14 an hour or about half of what workers now make.
In addition to the buyout offers, GM is talking with its unions about other cost-reduction issues.
Across the Atlantic, GM and the Swedish government are in talks as to what to do with Saab. The two parties are negotiating a way Saab can be re-established as an independent entity with financial help from the Swedish government.
GM is expected to decide the fate of its ailing Hummer brand by the end of the first quarter. GM has put it on the auction block and claims it has received considerable interest from prospective buyers. However, GM could opt to keep it and change it or kill it altogether.
GM also is contemplating the future of its Saturn division. GM executives and Saturn dealers met last week to consider a host of options that GM marketing chief Mark LaNeve described to Automotive News as "everything from a new dualing pattern to a spinoff to a partnership to an outright sale." LaNeve told the trade journal the list of options would be narrowed and presented to Saturn dealers this week. Dealers said the final decision on Saturn's fate could be disclosed within hours of GM filing its viability plan on Feb. 17.
GM said in December it will focus on its core brands -- Chevrolet, Cadillac, Buick and GMC. It already has said it will drastically reduce its Pontiac lineup so that it becomes a niche brand.
On the supply side, GM is negotiating with bankrupt Delphi Corp., a company created from GM's far-flung parts operations in1999, to take back some of Delphi's plants. GM wants to make sure it continues to receive a stream of parts from its largest supplier. For Delphi, pawning some of those plants onto GM may help it attract financing so it can emerge from Chapter 11, where it has been mired since October 2005.
Bankruptcy Still An Option
And still, GM could face bankruptcy, likely a pre-packaged one. The U.S. government, which has hired expert advisors on bankruptcy, could force GM as well as Chrysler into bankruptcy in order to put U.S. taxpayers ahead of other creditors for being re-paid loans.
GM insists as it has all along that bankruptcy is not an option and would be sure death as consumers would not buy vehicles from a company in bankruptcy.
It’s Always the Economy, Stupid By Richard A. Lee
A few years ago, when Tom Kean Jr. was running against Bob Menendez for U.S. Senate, the Fox News Channel asked me to comment on the race. Before the interview was taped, the reporter told me she was going to focus on whether the war in Iraq would be a greater issue for New Jersey voters than the economy. I told her I believed the war was important to New Jerseyans, but that pocketbook issues would be a larger factor when people went to the polls. She asked the same question several times and several different ways while the camera was on and I continued to give the same response, although none of this part of the interview made it onto the air. Instead, the segment included two carefully selected sound bites related to Kean’s chances of winning the election.
I recall this exchange not to lay fault with the Fox News Channel; Keith Olbermann already has the corner on that market. Instead, the experience reminds me that more often than not, elections are, as James Carville put it back in 1992, about the economy. And that goes for New Jersey’s 2009 gubernatorial election too.
Forget about Chris Christie’s record on corruption, the lucrative contract he awarded to former Attorney General John Ashcroft, and the debate over Governor’s emails with Carl Katz. These and other items will continue to make good headlines and provide fodder for campaign ads. But with people out of work and families struggling to make ends meet, the economy is likely to overshadow all other issues this fall. In fact, in a recent Monmouth University/Gannett New Jersey Poll, respondents placed the economic downturn, jobs and property tax reform at the top of the issues that they would most like New Jersey’s gubernatorial candidates to address.
Ironically, the economy is an issue that may be beyond direct control of the gubernatorial candidates. The Republicans are out of power in New Jersey and have no ability to effect change. Although Democrats hold the Governor’s Office and both Houses of the State Legislature, there are limits to what can be done on the state level. It will take action in Washington to fully jumpstart the economy. Whether the stimulus bill working its way through Congress is the answer remains to be seen, but the success or failure of the Obama Administration’s economic policies could impact the outcome of the gubernatorial election.
In the most simple terms, those in power generally reap the benefits of good economic conditions and take the blame when the fiscal situation is poor, regardless of whether they had anything to do with the economic climate. If President Obama can set the national economy back on track quickly, it will bode well for Governor Corzine. But that’s a tall order. The Obama Administration’s handling of the economic stimulus bill has not gotten off to the best of starts. There is no guarantee it will work nor that it will produce results before New Jersey’s gubernatorial election in November.
The President can afford to be patient; he does not need to run again for four years, although it would be to his political benefit to have a robust economy for the mid-term elections in 2010. Back in New Jersey, Jon Corzine does not have the same luxury of time. He has to face the voters this year, and he first will have to plug a budget hole of $2.1 billion.
The Governor has until March to present his proposal for the state budget, but he already has taken steps to address the national economic crisis. He unveiled a multi-faceted economic recovery plan in October and he recently created a federal stimulus working group to lead the state’s efforts to maximize federal economic stimulus aid, as well as a second group that will focus on job creation.
Also in his favor is the fact he is running in a state that leans Democratic. In the 2008 elections, New Jerseyans voted in favor of Barack Obama by about 56 to 43 percent and re-elected Frank Lautenberg to the U.S. Senate by a similar margin. This year, the Governor also may benefit from a potentially divisive Republican primary that could drain resources, open wounds and give Democrats a playbook for running against whoever emerges as the victor.
But if the economy continues to falter, it could spell trouble, especially if Obama’s popularity starts to slip, giving the GOP an opportunity to gain support nationally, as well as within the Garden State. With the election still more than six months away, it is much too early to make predictions, but the 2009 race for the State House – aside from being an important election – also is shaping up as a fascinating event for spectators too.
# # #
Richard A. Lee is communications director of the Hall Institute of Public Policy-New Jersey. A former journalist and deputy communications director for the governor, he also teaches courses in media and government at Rutgers University, where he is completing work on a doctorate in media studies.
Bong-Gate: Eight Kids Arrested from Michael Phelps Pot Party by Insane S.C. Sheriff
Certifiable South Carolina Sheriff Leon Lott is hot on the trail of all the kids who were at that party where Michael Phelps and the bong were spotted. Eight of them have been arrested!!! I'm sure Sheriff Lott and the Richland County Sheriff's Department have solved all the murders, rapes, and robberies.
Way to go Sheriff Lott! Here's to putting Olympic gold medal winners and kids who party in prison! Because South Carolina has an abundance of money to spend on hunting down kids who party with Michael Phelps.
And Michael Phelps? Will he be next?
WIS News:
We've now learned that since investigators began trying to build a case, they've made eight arrests: seven for drug possession and one for distribution. These are arrests that resulted as the sheriff's department served search warrants.
We've also learned that the department has located and confiscated that bong. Sources say the owner of the bong was trying to sell it on eBay for as much as $100,000. The owner, who wasn't even at the party, is one of the eight now charged. The owner, who wasn't even at the party, is one of the eight now charged.
Phelps is not one of those charged at this point, but the sheriff's department has strong evidence that matches the photo to the house on Blossom Street
Kadima ahead of Likud in Israeli election
Israel’s Kadima party - led by Tzipi Livni - looks like it has pulled off a dramatic win in the election.
Netenyahu’s Likud party seems to have 26 seats, with Kadima on 28. All through the campaign, far-right ex-Prime Minister Netenyahu was ahead in the polls. He has promised to “kick Hamas out of Gaza” and never return the Golan to Syria.
Although if Livni does win, is there much hope for the region? It was her “centrist” party which killed 1300 Palestinians in a war on Gaza last month, which was condemned by almost the entire world.
She has also threat not to renew peace-talks with Syria. Although if she wins, it is almost certain those talks would resume fairly quickly, now that Obama seems keen on a Syria deal.
The estimates come from exit polls, which can be fairly inaccurate. A better picture should emerge later tonight.
Netenyahu’s Likud party seems to have 26 seats, with Kadima on 28. All through the campaign, far-right ex-Prime Minister Netenyahu was ahead in the polls. He has promised to “kick Hamas out of Gaza” and never return the Golan to Syria.
Although if Livni does win, is there much hope for the region? It was her “centrist” party which killed 1300 Palestinians in a war on Gaza last month, which was condemned by almost the entire world.
She has also threat not to renew peace-talks with Syria. Although if she wins, it is almost certain those talks would resume fairly quickly, now that Obama seems keen on a Syria deal.
The estimates come from exit polls, which can be fairly inaccurate. A better picture should emerge later tonight.
Financial Stability Plan Introduced by Treasury 10Feb09
Treasury Secretary Timothy Geithner today unveiled the so-called “Financial Stability Plan,” a multi-faceted set of initiatives aimed at cleaning up and reinvigorating the entire financial system.
Geithner expressed that the availability of credit was essential to any meaningful recovery, warning any contraction in the current environment would be much more detrimental to the health of the economy.
“We believe that the policy response has to be comprehensive, and forceful. There is more risk and greater cost in gradualism than in aggressive action,” he said in prepared remarks.
“Action has to be sustained until recovery is firmly established. In the United States in the 30s, Japan in the 90s, and in other cases around the world, previous crises lasted longer and caused greater damage because governments applied the brakes too early. We cannot make that mistake.”
That said, as part of the new program, some of the nation’s largest banks will have access to substantial aid, which will ideally boost consumer lending and get the economy chugging again.
Initially, participating banks with assets in excess of $100 billion will be subject to a “stress test” to determine the risk associated with their balance sheets and overall financial health.
Banks that undergo such a test will be provided with a “capital buffer to help absorb losses and serve as a bridge to receiving increased private capital,” with the Treasury’s investments in these institutions placed in a special “Financial Stability Trust.”
Institutions with consolidated assets below $100 billion will be eligible to obtain capital from the “Capital Assistance Program” (CAP) after a supervisory review.
The program will also establish a “Public-Private Investment Fund,” intended to rid banks of illiquid assets, using government capital and financing to leverage private capital.
“We believe this program should ultimately provide up to one trillion in financing capacity, but we plan to start it on a scale of $500 billion, and expand it based on what works,” he said.
The Term Asset-Backed Securities Loan Facility (TALF), which supports consumer and business lending, will also be expanded to as much as $1 trillion.
And in an effort to boost transparency, the general public will be able to see how the money is being utilized via a new website, FinancialStability.gov.
With regard to housing, the government will continue to work on pushing mortgage rates lower by scooping up securities, while committing another $50 billion to prevent avoidable foreclosures.
Additionally, loan modification guidelines and standards for both government and private programs will be established to create some sense of uniformity.
The troubled Hope for Homeowners program will also be made more flexible to allow for an increased number of loan mods.
More concrete details of the housing initiatives should be announced in the next few weeks.
Related Topics:
1.Ultimate Bailout: Remove Toxic Mortgage Debt from Financial System
2.Treasury to Pump $250 Billion into Banks
3.Paulson Unveils Financial Regulation Overhaul Plan
4.Bailout Plan Fails to Get House Vote
4.Moody’s May Downgrade Freddie Mac Financial Strength Rating
Senate passed Obama stimulus bill 61-37
With the help of three Republicans, Senate Democrats just moments ago passed an $838 billion stimulus program that President Barack Obama says it essential to put the economy on the road to recovery.
The bill was passed at the same time that Obama is in Fort Myers, Fla., holding a town hall meeting on the economic crisis. Yesterday he was in Indiana and did his first prime time press conference, all in an effort to put pressure on lawmakers to get a bill to his desk.
Both California Democratic senators voted for the bill today. This measure is different than the one in the House. The House measure includes more spending for such things as education. But the Senate took out about $100 billion in spending because it was the only way Democrats could get Sens. Arlen Specter of Pennsylvania and Maine senators Olympia Snowe and Susan Collins to vote for it.
Orange County’s five GOP House members voted no and the county’s only Democrat, Rep. Loretta Sanchez, voted yes. Sanchez has her own idea about stimulus and has introduced a bill to create bonds Americans can buy to help fund infrastructure projects. I’ll be doing a separate post on that shortly.
Now senators and House members will begin meeting to try and agree on one bill that will then have to go back to both chambers for another vote.
The bill was passed at the same time that Obama is in Fort Myers, Fla., holding a town hall meeting on the economic crisis. Yesterday he was in Indiana and did his first prime time press conference, all in an effort to put pressure on lawmakers to get a bill to his desk.
Both California Democratic senators voted for the bill today. This measure is different than the one in the House. The House measure includes more spending for such things as education. But the Senate took out about $100 billion in spending because it was the only way Democrats could get Sens. Arlen Specter of Pennsylvania and Maine senators Olympia Snowe and Susan Collins to vote for it.
Orange County’s five GOP House members voted no and the county’s only Democrat, Rep. Loretta Sanchez, voted yes. Sanchez has her own idea about stimulus and has introduced a bill to create bonds Americans can buy to help fund infrastructure projects. I’ll be doing a separate post on that shortly.
Now senators and House members will begin meeting to try and agree on one bill that will then have to go back to both chambers for another vote.
Obama Economic Stimulus Bill Health Care Scare - Stealth Provisions Will Ration Senior Care Applying a Cost-Effectiveness Standard for Medicare
Republican Senators are questioning whether President Barack Obama’s stimulus bill contains the right mix of tax breaks and cash infusions to jump-start the economy.
Tragically, no one from either party is objecting to the health provisions slipped in without discussion. These provisions reflect the handiwork of Tom Daschle, until recently the nominee to head the Health and Human Services Department.
Senators should read these provisions and vote against them because they are dangerous to your health. (Page numbers refer to H.R. 1 EH, pdf version).
The bill’s health rules will affect “every individual in the United States” (445, 454, 479). Your medical treatments will be tracked electronically by a federal system. Having electronic medical records at your fingertips, easily transferred to a hospital, is beneficial. It will help avoid duplicate tests and errors.
But the bill goes further. One new bureaucracy, the National Coordinator of Health Information Technology, will monitor treatments to make sure your doctor is doing what the federal government deems appropriate and cost effective. The goal is to reduce costs and “guide” your doctor’s decisions (442, 446). These provisions in the stimulus bill are virtually identical to what Daschle prescribed in his 2008 book, “Critical: What We Can Do About the Health-Care Crisis.” According to Daschle, doctors have to give up autonomy and “learn to operate less like solo practitioners.”
Keeping doctors informed of the newest medical findings is important, but enforcing uniformity goes too far.
Read the entire piece and pay particular attention to the cost-effectiveness standard for senior’s Medicare.
Medicare now pays for treatments deemed safe and effective. The stimulus bill would change that and apply a cost- effectiveness standard set by the Federal Council (464).
The Federal Council is modeled after a U.K. board discussed in Daschle’s book. This board approves or rejects treatments using a formula that divides the cost of the treatment by the number of years the patient is likely to benefit. Treatments for younger patients are more often approved than treatments for diseases that affect the elderly, such as osteoporosis.
In 2006, a U.K. health board decreed that elderly patients with macular degeneration had to wait until they went blind in one eye before they could get a costly new drug to save the other eye. It took almost three years of public protests before the board reversed its decision.
Hidden Provisions
If the Obama administration’s economic stimulus bill passes the Senate in its current form, seniors in the U.S. will face similar rationing. Defenders of the system say that individuals benefit in younger years and sacrifice later.
The Democrats slipped into the Democrat/Obama Stimuls Bill a path to UK type socialized medicine standards.
Surprise.
Great transparency from the Obama Administration and Congressional Democrats - NOT.
The House and Senate GOP Caucus should insist that these provisions be stricken from the final bill in Conference Committee. If the provisions are NOT removed, the GOP should expel Susan Collins, Olympia Snow and Arlen Specter from the Republican Party IMMEDIATELY.
Sports Illustrated Swimsuit Issue 2009 Bar Refaeli
The long-awaited and much-anticipated cover of the new 2009 Sports Illustrated swimsuit issue has been revealed. The cover model is Bar Refaeli (yes, the model dating Leonardo DiCaprio) with photography by Rafael Mazzuco.
And I am happy to report that the issue does indeed include the famous Body Paint section. See bar’s spread at SI
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