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1/5/2009

Government to get 5 million preferred GMAC shares - USATODAY.com

http://www.usatoday.com/money/industries/banking/2009-01-02-gmac-govt_N.htm The federal government will get 5 million preferred shares of GMAC paying 8% interest in exchange for its $5 billion capital injection to help the troubled lender avoid bankruptcy. GMAC disclosed the terms of the deal in a filing Friday with the Securities and Exchange Commission. GMAC is the financial arm of General Motors (GM) and is responsible for making car loans and financing dealer inventories. The government also exercised a 10-year warrant to buy 250,000 more GMAC preferred shares for a penny each, according to the filing. GMAC said if the U.S. Treasury doesn't get interest payments on its preferred shares for six straight quarters, or more than six non-consecutive quarters, it will get two seats on an expanded GMAC management board.

Oregon considers subbing mileage tax for gas tax - Los Angeles Times

http://www.latimes.com/news/nationworld/nation/la-na-gas-tax4-2009jan04,0,4080617.story The governor endorses the program, which would install GPS devices in every new car and free the state from the problem of falling gasoline tax revenue. Some drivers worry about privacy.

Airline Apologizes For Booting 9 Muslim Passengers From Flight - washingtonpost.com

http://www.washingtonpost.com/wp-dyn/content/article/2009/01/02/AR2009010201695.html A U.S. airline apologized yesterday to nine Muslim American passengers from the Washington area who were removed from a flight out of Reagan National Airport, but a Muslim civil rights group said it intends to press a discrimination complaint against the airline for its treatment of the passengers. "It is incumbent on any airline to ensure that members of the traveling public are not singled out or mistreated based on their perceived race, religion or national origin. We believe this disturbing incident would never have occurred had the Muslim passengers removed from the plane not been perceived by other travelers and airline personnel as members of the Islamic faith," said the complaint filed with the U.S. Department of Transportation by the Washington-based Council on American-Islamic Relations (CAIR), an advocacy group. The New Year's Day incident aboard an AirTran flight to Orlando marked the latest case in which Muslim or South Asian travelers have alleged that they were illegally singled out for scrutiny. Contradictory accounts given by airline and federal aviation security authorities also highlight the difficulty of decision-making and affixing responsibility in tense situations involving a perceived threat.

12/19/2008

Bush Gives Emergency Loans to Automakers - NYTimes.com

http://www.nytimes.com/2008/12/20/business/20auto.html?ref=business The loans, as G.M. and Chrysler teeter on the brink of insolvency, essentially throw the companies a lifeline from the taxpayers that will keep them afloat until March 31. At that point, the Obama administration will determine if the automakers are meeting the conditions of the loans and will continue to receive government aid or must repay the loans and face bankruptcy proceedings. The money to aid the automakers will come from the Treasury’s $700 billion financial stabilization fund and shortly after Mr. Bush’s announcement, the Treasury secretary, Henry M. Paulson Jr., who will oversee the aid to the auto industry, said Congress would need to release the second $350 billion for that program in short order. By law, once Mr. Paulson makes a formal request, Congress has 15 days to reject it and deny the additional money. It was unclear when that official request would be transmitted or if lawmakers who have left Washington for the holidays, would return to Capitol Hill to debate it. The Bush administration’s handling of the program has come under sharp criticism and a number of lawmakers in both parties have suggested they would oppose the release of more money.

Car Bankruptcy Cited as Option by White House - NYTimes.com

http://www.nytimes.com/2008/12/19/business/19auto.html?ref=washington The White House raised for the first time on Thursday the prospect of forcing General Motors and Chrysler into a managed bankruptcy as a solution to save the companies from financial collapse. The White House announced early on Friday that President Bush would make a statement at 9 a.m. Eastern time about efforts to negotiate a bailout for the domestic auto industry. On Thursday, his spokeswoman, Dana Perino, confirmed growing speculation within legal circles that the president and Treasury Secretary Henry M. Paulson Jr. were considering the step. “There’s an orderly way to do bankruptcies that provides for more of a soft landing,” Ms. Perino said. “I think that’s what we would be talking about. That would be one of the options.”

Bush to Provide Emergency Loans to GM, Chrysler - washingtonpost.com

http://www.washingtonpost.com/wp-dyn/content/article/2008/12/19/AR2008121900893.html The troubled U.S. auto industry will receive emergency loans of up to $17.4 billion from the federal government in return for an extensive restructuring of its outstanding debt and labor costs over the coming year, President Bush said today. In a step he said was necessary to avoid a "disorderly" collapse of one of the country's staple manufacturing businesses, Bush said the federal aid is meant only to provide a window while the companies decide how to restructure and prove that they are financially viable. If that is not done by March 31, Bush said, the federal government will call its loans and let individual companies declare bankruptcy or fail. The deadline and other restrictions attached to the loan "send a clear signal to everyone involved. The time to make hard decisions is now . . . The only option will be bankruptcy," Bush said.

Transit funds present quandary for Obama - The Boston Globe

http://www.boston.com/news/politics/2008/articles/2008/12/19/transit_funds_present_quandary_for_obama/ The massive economic stimulus plan that Congress and President-elect Barack Obama are preparing to launch next month is shaping up to be an early test of Obama's ability to bring about the change he promised during his campaign, with economic realities threatening to undermine his call for a new era of smarter, "greener" transportation. As Obama's aides, lawmakers, industry associations, and interest groups furiously debate how to divide up an expected $50 billion in new road, mass transit, and rail spending, the president-elect is facing competing pressures. On one hand, the goal of the stimulus bill is to kick-start the economy with a wave of short-term public spending projects across the country, and the quickest way to do that is to follow existing priorities. But it also offers a rare opportunity to shift American transportation in the long term toward a greener, more sustainable system that promotes mass transit and so-called smart growth over sprawl and patronage projects.

12/18/2008

Obama Chooses GOP’s Ray LaHood as Transportation Nominee, Officials Say - washingtonpost.com

http://www.washingtonpost.com/wp-dyn/content/article/2008/12/17/AR2008121703483.html President-elect Barack Obama plans to nominate Rep. Ray LaHood (R-Ill.) to become transportation secretary, adding a second Republican to a key position in his administration, according to senior Democratic officials. LaHood, 63, who is retiring after representing a rural downstate Illinois district in Congress since 1995, would play a major role in overseeing the huge public works program the administration plans to implement to stimulate the flagging economy. Obama earlier tapped another Republican, Defense Secretary Robert M. Gates, who has agreed to stay on after serving in the same role in the Bush administration. The president-elect has said repeatedly that he wants to include several Republicans in the top rungs of his administration in an effort to get beyond the partisan bickering that often paralyzes Washington policymaking. As transportation secretary, LaHood would be in a charge of an agency that oversees much of the nation's roads and rails, as well as its air traffic control system. He would also be a critical figure in the administration's two-year economic stimulus plan, which Obama has said would include hundreds of billons of dollars to repair and build roads and bridges and update and expand the nation's mass-transit systems.

White House considers ‘orderly’ bankruptcy for auto companies - USATODAY.com

http://www.usatoday.com/money/autos/2008-12-18-autos-bankruptcy-white-house_N.htm The Bush administration is seriously considering "orderly" bankruptcy as a way of dealing with the ailing U.S. auto industry. "The president is not going to allow a disorderly collapse of the companies," White House press secretary Dana Perino said Thursday. "A disorderly collapse would be something very chaotic that is a shock to the system." But, she said, "There's an orderly way to do bankruptcies that provides for more of a soft landing. I think that's what we would be talking about." President Bush says he had not yet made up his mind what action to take. Perino emphasized there are several approaches to assisting the automakers, such as short-term loans out of a $700 billion financial rescue fund. Bush has opposed this approach before, and it is adamantly opposed by many Republicans. "It's in the spectrum of options, and there are a lot of options," Perino said.

In Auto Rescue Talks, Paulson Takes the Wheel - NYTimes.com

http://www.nytimes.com/2008/12/18/business/18auto.html?ref=washington The White House and the Treasury are deep into negotiations with General Motors and Chrysler over reorganization plans that could result in freeing up more than $14 billion in emergency loans to keep the companies afloat through the first quarter of 2009, according to industry executives and a senior administration official. The Bush administration appears to want an agreement with the automakers before Dec. 25. It was unclear, however, when all of the particulars might be worked out, said the senior official, who spoke on the condition of anonymity because of the delicate nature of the negotiations. But the official indicated that the administration was inclined to do more than just keep G.M. and Chrysler alive until President-elect Barack Obama takes office, saying, “Giving them enough money to limp along doesn’t solve anything.”

Chrysler Shutting Down for One Month - washingtonpost.com

http://www.washingtonpost.com/wp-dyn/content/article/2008/12/17/AR2008121702780.html Struggling U.S. automakers are launching a round of severe cutbacks as they wait for a government rescue, with Chrysler saying yesterday it will idle all 30 of its U.S. factories for one month. Chrysler's plants will furlough 46,000 workers beginning Friday, as a planned two-week holiday shutdown is extended to a month and possibly longer. The company, which has told Congress it needed $7 billion to survive the month, also told dealers that it may suspend financing for new cars in a bid to conserve cash. "No one will return to work any earlier than Jan. 19," Chrysler spokesperson Shawn Morgan said. "I don't want to get into speculating about what may happen after that. . . . We're going to continue to monitor the situation."

Big Dig firm to pay state, city $16m - The Boston Globe

http://www.boston.com/news/local/massachusetts/articles/2008/12/18/big_dig_firm_to_pay_state_city_16m/ State prosecutors have agreed to drop a manslaughter charge against Powers Fasteners Inc., the only company to face state criminal charges in connection with the fatal collapse of a section of Big Dig tunnel, after the New York epoxy vendor agreed to pay $16 million to the state and city, Attorney General Martha Coakley said yesterday.

12/16/2008

Majority of Public Opposes Auto Rescue - washingtonpost.com

http://www.washingtonpost.com/wp-dyn/content/article/2008/12/15/AR2008121502727.html Most Americans continue to oppose a government-backed rescue plan for Detroit's Big Three automakers as majorities blame the industry for its own problems and are unconvinced failure would hurt the economy, according to a new Washington Post-ABC News poll. Overall, 55 percent of those polled oppose the latest plan that Chrysler, Ford and General Motors executives pitched to Congress last week, on par with public opposition to earlier, pricier efforts. But with 42 percent support, the new request for up to $14 billion in emergency loans has more backers than previous proposals to secure up to $34 billion in loan guarantees. But as with the earlier bids, those who strongly oppose the measure greatly outnumber those who are strongly supportive.

Bond Decision Brings GMAC Closer to Bank Status - NYTimes.com

http://www.nytimes.com/2008/12/16/business/16gmac.html?ref=business The switch could give GMAC, which is based in Detroit and provides auto and home loans, access to the Treasury’s $700 billion rescue fund and allow it to sell bonds backed by the government. If the exchange is not completed by the end of the year, GMAC said in filing last month, there is a “significant risk” it will default on its debt. A bankruptcy by GMAC, the primary lender to General Motors dealers, may put up to 40 percent of G.M.’s United States dealerships out of business, Martin NeSmith, a member of the automaker’s National Dealer Council, said last week. The bondholder group’s decision to tender pushes GMAC closer to its goal of getting 75 percent participation. GMAC said last Friday it revised the terms of its offer, including an improved interest rate and a capital contribution by its owners.

More stories in National/Economy | Colorado/Economy

12/15/2008

Bush: Administration working on autos rescue plan - USATODAY.com

http://www.usatoday.com/money/autos/2008-12-14-automakers-crisis-bailout_N.htm Detroit automakers got public reassurance Monday from President Bush that short-term government help for the industry is in the works and could come soon. "An abrupt bankruptcy for autos could be devastating for the economy," Bush told reporters aboard Air Force One during an unannounced trip to Iraq and Afghanistan. "We're now in the process of working with the stakeholders on a way forward. We're not quite ready to announce that yet." Bush wouldn't give a precise timetable but said, "This will not be a long process because of the economic fragility of the autos."

UAW Condemns GOP for Scuttling Auto Industry Bailout - washingtonpost.com

http://www.washingtonpost.com/wp-dyn/content/article/2008/12/12/AR2008121203592.html United Auto Workers President Ronald A. Gettelfinger lashed out against Senate Republicans a day after a congressional compromise on an auto industry bailout failed, accusing the lawmakers of trying to "pierce the heart of organized labor." Gettelfinger, at a news conference yesterday in Detroit, welcomed a statement from the White House that said the administration was willing to use funds targeted for bailing out the financial system to help the autoworkers. But he repeated his insistence that bankruptcy isn't an option, saying failure at any one automaker would force firms across the industry to collapse. The Republican Senate proposal sought to cut UAW wages, bringing them in line -- or at "parity" -- with what workers earn at foreign-owned, non-unionized plants in the United States. A failure in Congress to reach an agreement on the wage-cut proposal Thursday night doomed the $14 billion industry rescue package. "They believe workers are expendable and wages mean nothing," Gettelfinger said.

White House Moves Toward Auto Bailout - washingtonpost.com

http://www.washingtonpost.com/wp-dyn/content/article/2008/12/12/AR2008121201232.html The Bush administration yesterday moved to pull Detroit's automakers back from the brink, saying it would drop its opposition to tapping the $700 billion financial industry rescue package to help General Motors and Chrysler survive through year's end. The White House said it would explore all financing options, including drawing on the Treasury's Troubled Asset Relief Program, which until now has been used exclusively to aid banks and other financial firms. The automakers and some members of Congress were also hoping that the Federal Reserve would make a loan to aid the firms and preserve tens of thousands of jobs. But the Fed has strongly resisted such entreaties and has said it would be "extremely reluctant" to lend to the companies. "We need these loans, and we're not particularly fussy about how we get the loans or where they come from," said GM board member George M.C. Fisher, retired chief executive of Eastman Kodak.

After Big Cuts, Automakers Try Lots of Small Ones - NYTimes.com

http://www.nytimes.com/2008/12/15/business/15costs.html?ref=business Even though G.M. is rapidly running out of cash, the company’s top sales executive recently asked that elevators to his 39th-floor offices keep running so his staff could keep working. “This cost-cutting has touched every aspect of the company,” said Mark LaNeve, head of G.M.’s North American sales and marketing. “But my people are working until 8 p.m. and need the elevators to stay on.” As G.M. and Chrysler await word from the White House about emergency financial assistance, the two troubled automakers are cutting costs furiously to stretch what is left of their cash reserves.

12/12/2008

Senate Abandons Auto Bailout Bid - NYTimes.com

http://www.nytimes.com/2008/12/12/business/12auto.html?_r=1 The failure to reach agreement on Capitol Hill raised a specter of financial collapse for General Motors and Chrysler, which say they may not be able to survive through this month. After Senate Republicans balked at supporting a $14 billion auto rescue plan approved by the House on Wednesday, negotiators worked late into Thursday evening to broker a deal, but deadlocked over Republican demands for steep cuts in pay and benefits by the United Automobile Workers union in 2009. The failure in Congress to provide a financial lifeline for G.M. and Chrysler was a bruising defeat for President Bush in the waning weeks of his term, and also for President-elect Barack Obama, who earlier on Thursday urged Congress to act to avoid a further loss of jobs in an already deeply debilitated economy. “It’s over with,” the Senate majority leader, Harry Reid of Nevada, said on the Senate floor, after it was clear that a deal could not be reached. “I dread looking at Wall Street tomorrow. It’s not going to be a pleasant sight.”

$14b auto bailout collapses in Senate - The Boston Globe

http://www.boston.com/news/nation/articles/2008/12/12/14b_auto_bailout_collapses_in_senate/ A $14 billion emergency bailout for US automakers collapsed in the Senate last night after the United Auto Workers refused to accede to Republican demands for swift wage cuts. The collapse came after bipartisan talks on the auto rescue broke down over GOP demands that the United Auto Workers union agree to steep wage cuts by 2009 to bring their pay into line with Japanese carmakers. "We were about three words away from a deal," said Senator Bob Corker of Tennessee, the GOP's point man in the negotiations, referring to any date in 2009 on which the UAW would accept wage cuts. Majority Leader Harry Reid said he hoped President Bush would tap the $700 billion Wall Street bailout fund for emergency aid to the automakers. General Motors Corp. and Chrysler LLC have said they could be weeks from collapse. Ford Motor Co. says it does not need federal help now, but its survival is far from certain. Reid called the bill's collapse "a loss for the country," adding: "I dread looking at Wall Street tomorrow. It's not going to be a pleasant sight."

Senate Republicans kill auto bailout bill—chicagotribune.com

http://www.chicagotribune.com/news/nationworld/la-fi-autobailout12-2008dec12,0,1825961.story Republican opposition killed a $14-billion auto industry bailout plan in the Senate on Thursday night, putting the future of U.S. automakers in doubt and threatening to deliver another blow to the economy. The measure died after a last-ditch effort by Senate Democratic leaders to strike a compromise that would have lured enough support to save the legislation, which was crafted in consultation with the White House. The bill's failure raises the possibility of bankruptcy by one or more of Detroit's Big Three and puts new pressure on President Bush to authorize emergency loans for the automakers from the $700-billion Wall Street rescue fund, a step he has adamantly refused to take. The collapse of General Motors, Chrysler or Ford -- along with many of their suppliers and dealers -- could throw hundreds of thousands more workers onto the growing unemployment rolls and further cloud the closing days of the Bush administration.

Auto Bailout Talks Collapse as Senate Deadlocks Over Wages - washingtonpost.com

http://www.washingtonpost.com/wp-dyn/content/article/2008/12/11/AR2008121101578.html An eleventh-hour effort to salvage a proposed $14 billion rescue plan for the auto industry collapsed late last night as Republicans and Democrats failed to agree on the timing of deep wage cuts for union workers, killing the legislative plan and threatening America's carmakers with bankruptcy. "We're not going to get to the finish line. That's just the way it is. There's too much difference between the two sides," Senate Majority Leader Harry M. Reid (D-Nev.) announced after 10 p.m., concluding a marathon negotiating session that ended in gridlock. Reid warned that financial markets could plummet when trading opens this morning. "I dread looking at Wall Street tomorrow. It's not going to be a pleasant sight," he said. The legislation would have provided emergency loans to General Motors and Chrysler, which have said they face imminent collapse without federal help. The high-stakes talks broke down over when the wages of union workers would be slashed to the same level as those paid to nonunion workers at U.S. plants of foreign automakers such as Toyota and Honda.

White House Says It Would Use Funds on Automakers - NYTimes.com

http://www.nytimes.com/2008/12/13/business/13auto.html?ref=business In a shift, the White House said Friday morning that it would consider using money from the $700 billion financial bailout to rescue troubled automakers, one day after the Senate abandoned its efforts to pass legislation offering a government rescue to the companies.

12/11/2008

Seeking bailout while battling emissions curbs - The Boston Globe

http://www.boston.com/news/nation/articles/2008/12/11/seeking_bailout_while_battling_emissions_curbs/ The top executives of the Big Three automakers drove to Capitol Hill last week and pleaded with lawmakers to bail out their beleaguered industry with billions of dollars in taxpayer money. At the same time, just a few blocks away at the DC Circuit Court of Appeals, lawyers for the auto industry were hand-delivering their latest court filings in just one of several costly lawsuits and legal actions that the companies continue to press against states that have tried to impose stricter car emissions. Those dueling actions illustrate how the automakers are asking Washington for financial help to retool their operations while spending millions of dollars on litigation to block attempts to force them to make "greener" vehicles with lower emissions and better gas mileage. They have also, in pursuing various legal challenges, compelled California, Vermont, Rhode Island, and other states to spend millions in taxpayer money altogether battling them in court.

Auto Bailout Clears House but Faces Hurdles in Senate - washingtonpost.com

http://www.washingtonpost.com/wp-dyn/content/article/2008/12/10/AR2008121001679.html The House last night approved an emergency plan to prevent the collapse of the nation's domestic automobile industry, but the measure faces serious opposition in the Senate, where Republicans are revolting against a White House-brokered deal to speed $14 billion to cash-starved General Motors and Chrysler. After battling through the weekend to reach a compromise with congressional Democrats, the White House yesterday dispatched Chief of Staff Joshua Bolten to sell the plan to restive Republican senators. But many GOP lawmakers emerged from a combative luncheon with Bolten unconvinced the plan would compel Detroit automakers to make the painful changes necessary to restore them to profitability. After mostly partisan debate, the House voted 237 to 170 to approve the measure. But with Sen. Richard C. Shelby (R-Ala.) and other conservatives threatening to block consideration of the measure, even some Republican advocates of the bailout said it is unlikely to attract sufficient GOP support to win approval in the closely divided Senate.