Government, Politics and the Economy
Congress to Consider Consumer Financial Protection Bill
Legislation that would ‘level the playing field,’ as the Treasury says, is on its way to Congress in spite of opposition from financial institutions – the first of a number of new regulatory bills President Obama plans to send to Congress. Workforce.com
Making Sure Small Business Contracts go to Small Businesses
A proposed new law aims to keep big businesses from gobbling up procurement deals that should go to smaller firms. CNNMoney.com
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I will give them credit—they cut their white collar payroll, managed to get rid of that union job bank and they came up with restructuring plans—but after doing all of that, they are back with their hands out. Previously, General Motors and Chrysler received $17.4 billion; but now, as part of their restructuring plans, they are looking for a total of $34 billion to stay out of bankruptcy.
What Do They Want, What Will They Give?
GM is seeking $30 billion from the Treasury, which is up from previous estimates of $18 billion and includes $13.4 billion the company has already received. GM claims that it could run out of money by March without the additional funds, needing $2 billion next month and another $2.6 billion in April to keep going. Chrysler is looking for a mere $5 billion to keep going.
What are they willing to do to get this money? The automakers say they are ready to trim the proverbial fat with plans that call for thousands of additio... [Read Full Article]
After that first, humiliating round before Congress, it looks like the automakers have learned a few things: Ford's CEO Alan Mulally promises to work for $1 per year if Ford has to accept government money. What's more, the Ford plan cancels all management employees' 2009 bonuses and merit pay increases for its North American salaried employees. The company also plans to sell its fleet of five corporate aircraft. Similar steps are also promised for the other two automakers. Mulally and GM CEO Rick Wagoner have also announced that they will return to Washington by car this time, rather than by private jet. Chrysler CEO Robert Nardelli will also take a pass on the corporate jet, but his travel plans are secret due to security concerns.
The companies are also looking to swap debt for equity as well as to off-load brands and subsidiaries. GM, for example, is looking at the sale of... [Read Full Article]
There was a spectacle this week on Capital Hill, a trio of poor, downtrodden CEOs—just regular Joes, if you will—coming to plead their case for bailout funds before Senator Chris Dodd and the Senate Banking Committee he chairs. With their companies hemorrhaging cash at a rate of billions per month, Rick Wagoner of GM, Alan Mulally of Ford, and Robert Nardelli of Chrysler ominously warned the committee members that they were likely to go out of business if the taxpayers don't give them $25 billion. “We want to continue the vital role we've played for Americans for the past 100 years, but we can't do it alone," said Wagoner.
It was all very touching, all quite moving, or it would have been if the CEOs had not just flown in on the luxury corporate jets maintained and paid for by their cash-poor companies. According to Ford's Mulally, he has reduced his workforce by 51,000 people and closed 17 plants. Notice the conspicuous absence of Ford's fleet of eight corporate jets from that... [Read Full Article]
Where does it end? Honestly, where do we draw the line? I have come to terms with not being a bank holding company, thereby being denied a bite of the $700 billion bailout. I can live with that. Like most Americans, including every small business owner I know, I can live with having to stand on my own two feet. I can live with being responsible for my decisions and my actions and I can live with the consequences of those actions. I am not saying it is always easy and I am not saying that a little help now and then when things are tough isn't appreciated. All I am saying is that this is what it means to be a responsible adult. That is what my parents taught me and that is what I am teaching to my kids.
Pity our society is not echoing such lessons.
Take, for example, the Big Three Automakers. Since Bush's Treasury Secretary, working closely with the Pelosi/Reid/Dodd/Frank Congress opened the money s... [Read Full Article]