2.9 million jobs tied to 3 car companies

http://www.time.com/time/business/article/0,8599,1858702,00.html?cnn=yes

Pretty scary stuff.  Another Great Depression coming?

• What a mess! More bad news about ....sm - oldtimer
  • MT not so secure - give me my money
    • I am so sorry. Hope everything works out for you. nm - oldtimer
      • Thanks. I will be fine - give me my money
  • 2.9 million jobs tied to 3 car companies - if government does not bail them out.
    • Yes, I think there is a depression coming if it isn't already here. sm - MT and worn out
      • The mayor of Chicago also spoke this...sm - oldtimer
      • Michigan is in a depression. - I have family members still in MI.
        • am originally from Michigan sm - Michigan relatives
  • jobs - shelly
  • And along with many of these layoffs... - Marmann
    • And consequently..... sm - m
      • Excellent point! Please see message. - Marmann
        • My main feeling is that we are - true blue
          • How many people have every received - salt and pepper socialism
            • Two weeks of unemployment once. - Marmann
            • on unemployment this year, which is - true blue

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Unemployment rate soars to 8.1 percent
Employers resort to even bigger layoffs as they scramble to survive
BREAKING NEWS
The Associated Press
updated 8:02 a.m. CT, Fri., March. 6, 2009

WASHINGTON - The nation's unemployment rate bolted to 8.1 percent in February, the highest since late 1983, as cost-cutting employers slashed 651,000 jobs.

Both figures were worse than analysts expected and the Labor Department's report shows America's workers being clobbered by a relentless wave of layoffs.

The net loss of jobs in February came after even deeper payroll reductions in the prior two months, according to revised figures. The economy lost 681,000 jobs in December and another 655,000 in January.

Since the recession began in December 2007, the economy has lost 4.4 million jobs, more than half of which occurred in the past four months.

Employers are shrinking their work forces at alarming clip and are turning to other ways to slash costs — including trimming workers' hours, freezing wages or cutting pay — because the recession has eaten into their sales and profits. Customers at home and abroad are cutting back as other countries cope with their own economic problems.

With employers showing no appetite to hire, the unemployment jumped to 8.1 percent from 7.6 percent in January. That was the highest since December 1983, when the jobless rate was 8.3 percent.

All told, the number of unemployed people climbed to 12.5 million. In addition, the number of people forced to work part time for "economic reasons" rose by a sharp 787,000 to 8.6 million. That's people who would like to work full time but whose hours were cut back or were unable to find full-time work.

Meanwhile, the average work week in February stayed at 33.3 hours, matching the record low set in December.

Job losses were widespread in February.

Construction companies eliminated 104,000 jobs. Factories axed 168,000. Retailers cut nearly 40,000. Professional and business services got rid of 180,000, with 78,000 jobs lost at temporary-help agencies. Financial companies reduced payrolls by 44,000. Leisure and hospitality firms chopped 33,000 positions.

The few areas spared: education and health services, as well as government, which boosted employment last month.

A new wave of layoffs hit this week.

General Dynamics Corp. said Thursday it will lay off 1,200 workers due partly to plummeting sales of business and personal jets that forced it to cut production. Defense contractor Northrop Grumman Corp., and Tyco Electronics Ltd., which makes electronic components, undersea telecommunications systems and wireless equipment, also are trimming payrolls.

"This is basically cleaning house for a lot of firms," said John Silvia, chief economist at Wachovia. "They are using the first quarter to cut back employment and figure out what they want."

Disappearing jobs and evaporating wealth from tanking home values, 401(k)s and other investments have forced consumers to retrench, driving companies to lay off workers. It's a vicious cycle in which all the economy's negative problems feed on each other, worsening the downward spiral.

"The economy is in a tailspin. Businesses are jettisoning jobs at an unprecedented pace," said Richard Yamarone, economist at Argus Research.

The country is getting bloodied by fallout from the housing, credit and financial crises_ the worst since the 1930s. And there's no easy fix for a quick turnaround, economists said.

President Barack Obama is counting on a multipronged assault to lift the country out of recession: a $787 billion stimulus package of increased federal spending and tax cuts; a revamped, multibillion-dollar bailout program for the nation's troubled banks; and a $75 billion effort to stem home foreclosures.

Even in the best-case scenario that the relief efforts work and the recession ends later in 2009, the unemployment rate is expected to keep climbing, hitting 9 percent or higher this year. In fact, the Federal Reserve thinks the unemployment rate will stay elevated into 2011. Economists say the job market may not get back to normal — meaning a 5 percent unemployment rate — until 2013.

Businesses won't be inclined to ramp up hiring until they are sure any economic recovery has staying power.

The economy contracted at a staggering 6.2 percent in the final three months of 2008, the worst showing in a quarter-century, and it will probably continue to shrink during the first six months of this year.

Fed Chairman Ben Bernanke told Congress earlier this week that recent economic barometers "show little sign of improvement" and suggest that "labor market conditions may have worsened further in recent weeks."

Consumers’ growing frugality has hammered automakers, among other industries. General Motors Corp.'s auditors on Thursday raised "substantial doubt" about the auto giant’s ability to continue operations, and the company said it might have to seek bankruptcy protection, sending its shares below $2.

Bill Hampel, chief economist for the Credit Union National Association, said his group’s members are reporting record increases in deposits. Government figures show the savings rate jumped to 5 percent in January from zero last spring. That’s the highest rate since 1995 and a much faster shift than he had expected, Hampel said.

Consumer spending makes up about 70 percent of the economy. It topped out at 71 percent in 2005, Hampel said, but will likely drop by 2 to 3 percentage points over the next few years.

Increased savings can actually lower economic growth. Economists call it the “paradox of thrift”: What’s good for each of us individually — being thrifty, limiting our spending — can worsen a recession when everyone does it all at once.

Hoffman said about half the 6.2 percent drop in economic output last quarter was attributable to lower consumer spending.

http://www.rense.com/general83/ties.htm

if one of your most pressing concerns is that the large corporations are being abused by government, keep reading.  Have you seen news reports on the executives are given huge million dollar bonuses and pensions? A lot of them "earn" them by closing facilities, firing workers, destroying unions, downsizing or removing benefits from workers.  Our benefits go down; corporate execs compensation are sky-rocketing.  The history-making profit of the oil companies this quarter in the billions?  Do they still need more tax breaks?  Sorry, my sympathy and concern for the well-being of these corporations is minimal to none.

 But if you really want to protect the corporations, vote McCain!

do it again and again for the next 2 years because that is how long it is going to take car companies to make a good economy vehicle.  If government bails them out, next will come airlines and so on.  We do not have enough money to bail them out for the next 2 years.  Those companies BURN money each month. 

Do not get me wrong, I do want the American car companies bailed out.  I WILL ONLY OWN AMERICAN MADE CARS.  NEVER will buy a foreign made car so I can help the car companies stay in business.  Geesh, I am from Michigan, born and raised there for 18 years.  Most of my family is from Michigan on my mother and father's side.

If the car companies fold, we could have the Great Depression or close to it.  Shoot, Toyota and Honda, etc., could buy our car companies and now will be foreing made cars only.  It is a mess, chaos mess.  What I do know is most of my family in Michigan blame the American car companies.  My cousin just took early retirement from them 3 weeks before the US financial mess.  Thank God he did.  A 3 car companies had years to design and make cars better than Toyota, but did not.  Some of my family members blame the gas companies for jacking up the price of oil which is what started the car companies to have problems.  If only the oil companies did not raise it to 4.00, our 3 American car companies just might not be in the mess they are in.  So now my family believes it should be the OIL COMPANIES to bail them out since they started the mess with high gas prices.  Family actually do not want the government to bail out car companies because the costs will be from you, me, and the USA and will go on and for the next 2 years.  Family wants them to stop production, think about what to build next and then start building it.  The 3 car companies need to make what consumers want and need. 

It is a mess and horrible.  I personally do not want so many jobs to be lost.  It is such mixed feelings.  I just want new jobs created NOW.  Drill, drill, drill, and create new technology and start building and working by all of us coming together and creating new jobs and what we really need for these new jobs.  Hope this all makes sense, I am really tired from a long night of working. 

that would go out of business if the auto industry tanks, not to mention the auto workers themselves (what's left of them).

I don't think it would be a good idea. They stated 3 million people would lose their jobs if they let the industry tank. That would really throw us into a depression.

all 3 didn't  just hit bankruptcy level at the same time.  As a matter-of-fact I seriouisly doubt they are even in a financial crisis.  I think they've been working up to this panic for the past 6-8 years.  Unfortunately your husband and other companies that have supplied the big 3 are going to suffer.  I think this is all a smoke screen and what they REALLY want is to get out from under their union contract.  Do you really think if that happens they are going to lower the costs of their cars?  Nope.  They'll take as many billion as they can wanagle out of Bush and then file BK which will let them out from under their union contract.  Then miracously they'll recover.

As for people and their big Hummers, SUVs, etc.  That is a bit on the "look what I've got" front.  I think those Hummers are undoubtedly the UGLIEST things I've every seen.  I know a couple of people who bought them with payments approaching $1000 a month and they worry how they're going to pay their gass bill.  BOOHOO!!!

Things are going to get rough for all of us.  Even if Obama does what he promised, it probably won't be in his first term.  It will take him that long to undo 8 years of Bush....not to mention Clinton before him and Big Daddy before him.

taken down with them, though. They don't deserve it.

GE stock on Friday was only $.10 a share. So sad. Other stocks are just as bad and some of them were good ones before all this started.

What's the difference who says no?  Some insurance companies pretty much say no to everything but wellness visits - and that's simply so they can find out if you develop a condition, so they can drop your coverage on a threabare excuse, or jack your rates to the moon so you'll have to drop it.  Then no other company has to cover you due to it being preexisting.  I don't want to pay for insurance that only covers me if I'm not sick!

At least if there was universal healthcare, even with a wait, they'd have to treat you eventually instead of NEVER.  And do it for free.

...involved in the transcription of patient notes?

That just doesn't make sense.

BEVERLY HILLS, Calif. (AP) - Barack Obama partied with Hollywood celebrities Tuesday night and with the help of Oscar-winning singer and actress Barbra Streisand raised an eye-popping $9 million for his presidential campaign and the Democratic Party.

The night was split into two glitzy events, a reception and dinner costing $28,500 each at the Greystone Mansion, followed by entertainment by Streisand at the nearby Regent Beverly Wilshire Hotel. About 250 people were expected at the dinner and about 800 at the entertainment, which cost $2,500 a ticket.

It was a day of contrasts for Obama. Earlier in the day, the Democratic presidential candidate spoke about the public's deepening economic anxieties and portrayed Republican challenger John McCain as out of touch with the needs of hardworking people.

Then he flew to California for a night of hobnobbing with Hollywood notables.

McCain groused about Obama mixing it up with celebrities. He told a rally in Vienna, Ohio on Tuesday that Obama "talks about siding with the people, siding with the people just before he flies off to Hollywood for a fundraiser with Barbra Streisand and his celebrity friends. Let me tell you my friends, there's no place I'd rather be than here with the working men and women of Ohio."

A night earlier, McCain was with deep-pocketed donors in Florida and raised $5 million, a fact noted by Obama's campaign.

"I don't know who showed up down in Florida where he raised $5 million but my guess is that it wasn't a lot of nurses, firefighters and police officers," Obama's senior strategist, David Axelrod, told reporters. "The whole corporate lobbying community is rallying to his side. We're going to have to struggle to keep pace. You can't challenge that group and not expect them to have a lot of money."

While the final total was not determined, Obama's campaign did not dispute estimates that the twin events would bring in $9 million for Obama and the Democratic Party. That would be his second-biggest, fundraising day. Obama received $10 million from online donors the day after McCain's running mate, Alaska Gov. Sarah Palin, delivered her speech at the Republican convention.

On another big fundraising night in California, Obama raised $7 million in August in San Francisco.
Obama is financing his presidential race with private contributions after abandoning a pledge to take public financing capped at $84 million. His campaign announced Sunday it had collected $66 million in August, a fundraising record for any presidential candidate in a monthlong period.

By comparison, McCain raised $47 million in August, a personal best for his campaign as well. After claiming the GOP nomination, McCain accepted the $84 million in taxpayer funds allotted by the public financing system for the race.

All this controversy over the number in attendance af last week's tea parties, and who was there!  I would think over a quarter-million participants would rank right up there as far as demonstration statistics go.

There was another demonstration in 1995 which planned to attact a million demonstators.  Wikipedia has this:

......... Finally, within the first twenty-four hours following the March a conflict between March organizers and Park Service officials erupted over crowd size estimates. Initially, the National Park Service issued an estimate of about 400,000 attendees; a number significantly lower than March organizers had hoped for. After a heated exchange between leaders of the March and Park Services the estimate was raised to 850,000*  but still fell short of the organizers’ estimate of over 1 million. The controversy over the number of men who actually participated in the March has yet to be firmly resolved.  *[guess they were getting the 2 for 1 special?] 

Even back then, folks were hollering 'recount,'  I don't recall seeing any female or white faces in that crowd, either. I think that was pretty sexist and racist.  The point is, you hang with like-minded individuals.  Nobody put out the 'whites only' sign at the tea parties.  It was equal opportunity, and if you were a hard-working black business owner you might have been there.

Doesn't anybody in DC have a conscience?  The system as it stands now is disgusting.  They are literally making billions by killing of thousands upon thousands (maybe millions?) of Americans.  Anyone with half a brain should recognize profit-driven health insurance only serves the best interest of the CEOs of the insurance companies - not healthcare recipients! This needs to change NOW!

I saw my first AMA commercial last night urging people to vote with the millions of uninsured Americans in mind.  I loved it!  It is at least a step in the right direction.  Vote with the healthcare crisis in mind people!

http://sirenschronicles.com/2008/08/24/hunter-biden-lobbyist-for-big-pharma/

receive a tax credit as a reward/incentive to keep jobs INSIDE the USA, that policy will help American MTs.

That's Obama's policy.

Who's next?

With consumers shutting their wallets and corporate revenues plunging, the business landscape may start to resemble a graveyard in 2009. Household names like Circuit City and Linens 'n Things have already perished. And chances are, those bankruptcies were just an early warning sign of a much broader epidemic.

Moody's Investors Service, for instance, predicts that the default rate on corporate bonds - which foretells bankruptcies - will be three times higher in 2009 than in 2008, and 15 times higher than in 2007. That could equate to 25 significant bankruptcies per month.

We examined ratings from Moody's and data from other sources to develop a short list of potential victims that ought to be familiar to most consumers. Many of these firms are in industries directly hit by the slowdown in consumer spending, such as retail, automotive, housing and entertainment.

But there are other common threads. Most of these firms have limited cash for a rainy day, and a lot of debt, with large interest payments due over the next year. In ordinary times, it might not be so hard to refinance loans, or get new ones, to help keep the cash flowing. But in an acute credit crunch it's a different story, and at companies where sales are down and going lower, skittish lenders may refuse to grant any more credit. It's a terrible time to be cash-poor.

That's why Moody's assigns most of these firms its lowest rating for short-term liquidity. And all the firms on this list have long-term debt that Moody's rates Caa or lower, which means the borrower is considered at least a "very high" credit risk.

Once a company defaults on its debt, or fails to make a payment, the next step is usually a Chapter 11 bankruptcy filing. Some firms continue to operate while in Chapter 11, retaining many of their employees. Those firms often shed debt, restructure, and emerge from bankruptcy as healthier companies.

But it takes fresh financing to do that, and with money scarce, more bankrupt firms than usual are likely to liquidate - like Circuit City. That's why corporate failures are likely to be a major drag on the economy in 2009: In a liquidation, the entire workforce often gets axed, with little or no severance. That will only add to unemployment, which could hit 9 or even 10 percent by the end of the year.

It's possible that none of the firms on this list will liquidate, or even declare Chapter 11. Some may come up with unexpected revenue or creative financing that helps avert bankruptcy, while others could be purchased in whole or in part by creditors or other investors. But one way or another, the following 15 firms will probably look a lot different a year from now than they do today:

Rite Aid. (Ticker symbol: RAD; about 100,000 employees; 1-year stock-price decline: 92%). This drugstore chain tried to boost its performance by acquiring competitors Brooks and Eckerd in 2007. But there have been some nasty side effects, like a huge debt load that makes it the most leveraged drugstore chain in the U.S., according to Zacks Equity Research. That big retail investment came just as megadiscounter Wal-Mart was starting to sell prescription drugs, and consumers were starting to cut bank on spending. Management has twice lowered its outlook for 2009. Prognosis: Mounting losses, with no turnaround in sight.

Claire's Stores. (Privately owned; about 18,000 employees.) Leon Black's once-renowned private-equity firm, the Apollo Group, paid $3.1 billion for this trendy teen-focused accessory store in 2007, when buyout funds were bulging. But cash flow has been negative for much of the past year and analysts believe Claire's is close to defaulting on its debt. A horrible retail outlook for 2009 offers no relief, suggesting Claire's could follow Linens 'n Things - another Apollo purchase - and declare Chapter 11, possibly shuttering all of its 3,000-plus stores.

Chrysler. (Privately owned; about 55,000 employees). It's never a good sign when management insists the company is not going out of business, which is what CEO Bob Nardelli has been doing lately. Of the three Detroit automakers, Chrysler is the most endangered, with a product portfolio that's overreliant on gas-guzzling trucks and SUVs and almost totally devoid of compelling small cars. A recent deal with Fiat seems dubious, since the Italian automaker doesn't have to pony up any money, and Chrysler desperately needs cash. The company is quickly burning through $4 billion in government bailout money, and with car sales down 40 percent from recent peaks, Chrysler may be the weakling that can't cut it in tough times.

Dollar Thrifty Automotive Group. (DTG; about 7,000 employees; stock down 95%). This car-rental company is a small player compared to Enterprise, Hertz, and Avis Budget. It's also more reliant on leisure travelers, and therefore more susceptible to a downturn as consumers cut spending. Dollar Thrifty is also closely tied to Chrysler, which supplies 80 percent of its fleet. Moody's predicts that if Chrysler declares Chapter 11, Dollar Thrifty would suffer deeply as well.

Realogy Corp. (Privately owned; about 13,000 employees). It's the biggest real-estate brokerage firm in the country, but that's a bad thing when there are double-digit declines in both sales and prices, as there were in 2009. Realogy, which includes the Coldwell Banker, ERA, and Sotheby's franchises, also carries a high debt load, dating to its purchase by the Apollo Group in 2007 - the very moment when the housing market was starting to invert from a soaring ride into a sickening nosedive. Realogy has been trying to refinance much of its debt, prompting lawsuits. One deal was denied by a judge in December, reducing the firm's already tight wiggle room.

Station Casinos. (Privately owned, about 14,000 employees). Las Vegas has already been creamed by a biblical real-estate bust, and now it may face the loss of its home-grown gambling joints, too. Station - which runs 15 casinos off the strip that cater to locals - recently failed to make a key interest payment, which is often one of the last steps before a Chapter 11 filing. For once, the house seems likely to lose.

Loehmann's Capital Corp. (Privately owned; about 1,500 employees). This clothing chain has the right formula for lean times, offering women's clothing at discount prices. But the consumer pullback is hitting just about every retailer, and Loehmann's has a lot less cash to ride out a drought than competitors like Nordstrom Rack and TJ Maxx. If Loehmann's doesn't get additional financing in 2009 - a dicey proposition, given skyrocketing unemployment and plunging spending - the chain could run out of cash.

Sbarro. (Privately owned; about 5,500 employees). It's not the pizza that's the problem. Many of this chain's 1,100 storefronts are in malls, which is a double whammy: Traffic is down, since consumers have put away their wallets. Sbarro can't really boost revenue by adding a breakfast or late-night menu, like other chains have done. And competitors like Domino's and Pizza Hut have less debt and stronger cash flow, which could intensify pressure on Sbarro as key debt payments come due in 2009.

Six Flags. (SIX; about 30,000 employees; stock down 84%). This theme-park operator has been losing money for several years, and selling off properties to try to pay down debt and get back into the black. But the ride may end prematurely. Moody's expects cash flow to be negative in 2009, and if consumers aren't spending during the peak summer season, that could imperil the company's ability to pay debts coming due later this year and in 2010.

Blockbuster. (BBI; about 60,000 employees; stock down 57%). The video-rental chain has burned cash while trying to figure out how to maximize fees without alienating customers. Its operating income has started to improve just as consumers are cutting back, even on movies. Video stores in general are under pressure as they compete with cable and Internet operators offering the same titles. A key test of Blockbuster's viability will come when two credit lines expire in August. One possible outcome, according to Valueline, is that investors take the company private and then go public again when market conditions are better.

Krispy Kreme. (KKD; about 4,000 employees; stock down 50%). The donuts might be good, but Krispy Kreme overestimated Americans' appetite - and that's saying something. This chain overexpanded during the donut heyday of the 1990s - taking on a lot of debt - and now requires high volumes to meet expenses and interest payments. The company has cut costs and closed underperforming stores, but still hasn't earned an operating profit in three years. And now that consumers are cutting back on everything, such improvements may fail to offset top-line declines, leading Krispy Kreme to seek some kind of relief from lenders over the next year.

Landry's Restaurants. (LNY; about 17,000 employees; stock down 66%). This restaurant chain, which operates Chart House, Rainforest Café, and other eateries, needs $400 million in new financing to finalize a buyout deal dating to last June. If lenders come through, the company should have enough cash to ride out the recession. But at least two banks have already balked, leading to downgrades of the company's debt and the prospect of a cash-flow crunch.

Sirius Satellite Radio. (SIRI - parent company; about 1,000 employees; stock down 96%). The music rocks, but satellite radio has yet to be profitable, and huge contracts for performers like Howard Stern are looking unsustainable. Sirius is one of two satellite-radio services owned by parent company Sirius XM, which was formed when Sirius and XM merged last year. So far, the merger hasn't generated the savings needed to make the company profitable, and Moody's thinks there's a "high likelihood" that Sirius will fail to repay or refinance its debt in 2009. One outcome could be a takeover, at distressed prices, by other firms active in the satellite business.

Trump Entertainment Resorts Holdings. (TRMP; about 9,500 employees; stock down 94%). The casino company made famous by The Donald has received several extensions on interest payments, while it tries to sell at least one of its Atlantic City properties and pay down a stack of debt. But with casino buyers scarce, competition circling, and gamblers nursing their losses from the recession, Trump Entertainment may face long odds of skirting bankruptcy.

BearingPoint. (BGPT; about 16,000 employees; stock down 21%). This Virginia-based consulting firm, spun out of KPMG in 2001, is struggling to solve its own operating problems. The firm has consistently lost money, revenue has been falling, and management stopped issuing earnings guidance in 2008. Stable government contracts generate about 30 percent of the firm's business, but the firm may sell other divisions to help pay off debt. With a key interest payment due in April, management needs to hustle - or devise its own exit strategy.