WASHINGTON -- President Barack Obama plans to appoint senior administration officials -- rather than a single "car czar," as had been discussed -- to oversee a restructuring of the auto industry.
Treasury Secretary Timothy Geithner and National Economic Council Director Lawrence Summers will oversee the across-the-government panel, a senior administration official said Sunday on the condition of anonymity because no announcement had been made.
"The president understands the importance of this issue and also understands that the auto industry affects and is affected by a broad range of economic policies," the official said.
As the teams move forward, Obama "wants to make sure that we're getting the expertise and input of agencies across the government," the official said.
Obama and his aides face difficult choices on the fate of the U.S. auto industry, weighing the cost of pouring billions more into struggling companies against possible bankruptcies that could undermine plans to jump-start the economy.
General Motors Corp. and Chrysler LLC are racing against a Tuesday deadline to submit plans to the government. The plans are to be followed by weeks of intense negotiations ahead of a March 31 deadline for the final versions of the reports.
GM and Chrysler are living off a combined $13.4 billion in government loans. If they don't receive concessions by March 31, they face the prospect of having the loans pulled, followed by bankruptcy proceedings.
Any bankruptcy would be particularly painful, with some economists predicting the country could lose 2 million to 3 million jobs this year and the unemployment rate, now 7.6 percent, could swell past 9 percent by the spring of 2010.
In television interviews Sunday, White House senior adviser David Axelrod didn't respond directly when asked if the U.S. economy could withstand a GM bankruptcy. Nor did he directly address a question about whether the Obama administration would let GM go into bankruptcy.
"I'm not going to prejudge anything. I think that there is going to have to be a restructuring of those companies. I'm not going to get into the mode of how that happens. We'll wait and see what they have to say on Tuesday," he told "FOX News Sunday."
Executives at the two automakers have said bankruptcy is not an option because consumers would not buy cars from a company that might go out of business.
"How that restructuring comes is something that has to be determined," Axelrod said. "But it's going to be something that's going to require sacrifice not just from the auto workers but also from creditors, from shareholders and the executives who run the company. And everyone's going to have to get together here to build companies that can compete in the future."
Enter the President's Task Force on Autos. That group will use officials from the departments of Treasury, Labor, Transportation, Commerce and Energy. Members of the National Economic Council, the White House Office of Energy and Environment, the Council of Economic Advisers and the Environmental Protection Agency will also be involved, according to the administration official.
Obama also plans to name restructuring expert Ron Bloom a senior adviser to Geithner. He will not be the "car czar" pointman many labor and business leaders expected. Bloom, a former consultant to the United Steelworkers of America, will be doing much of the financial analysis for the administration.
Geithner is expected to be the only Cabinet secretary to be part of the panel, the senior administration official said. Deputy secretaries, however, would be involved.
Obama "felt it was important to have the treasury secretary as his official designee to oversee these loans," the senior administration official said.
GM spokesman Greg Martin said the company welcomed the task force.
"We expect to meet soon with this team to share GM's detailed restructuring plan to restore our company to viability and to meet the requirements of its loan agreements," he said.
The terms of the federal loans set "targets" for concessions, largely from debt-holders and the United Auto Workers union, but concession talks have made little progress with just a couple days left before the initial deadline.
Negotiations between GM and the UAW broke off Friday night but resumed Sunday, still focusing on exchanging the company's cash payments into a union-run retiree health care trust for GM stock, according to a person briefed on the talks who didn't want to be identified because the bargaining is private.
GM and UAW officials declined comment.
GM and Chrysler don't need to have everything nailed down for Tuesday's progress reports, but the companies are expected to detail concessions along with plant closures, the potential elimination of brands and thousands of job cuts.
Axelrod wouldn't say whether the administration would offer the auto industry more bailout money. GM already has borrowed $9.4 billion to stay in business, and it would receive an addition $4 billion if the Treasury Department approves its viability plan. Chrysler wants $3 billion more on top of the $4 billion it has already borrowed.
"We need to see what it is that they come up with this week," Axelrod said.
Complete Discussion Below: marks the location of current message within thread
The messages you are viewing
are archived/old. To view latest messages and participate in discussions, select
the boards given in left menu
Other related messages found in our database Executive experience = running a government...
McCain hasn't, Obama hasn't, Biden hasn't. She HAS. Bill Clinton had only been a governor before he was elected President. Double standard alive and well on the left?? Of course it is.
Joe the Plumber wasn't running for a top government job. nm
*
She has 12 months in an executive position, actually running a government...
Obama does not. She is going to be 2nd chair, not 1st. If either of them is going to be training on the job, better it be 2nd chair. She also served as mayor, which is also executive work. She has more experience to be President now (and that is not the position she is running for) than he does. Just fact, based entirely on experience. And the only reason I posted that at all is that is the first criticism of her that surfaced here. Personally, with Obama's limited experience going into the first chair, not the second chair...I would think his campaign and his followers would want the conversation to avoid that...that make an issue of it. Just an observation.
And owning a gun wouldn't have help either one of them.
That's the point.
You mean owning up?.....like Nixon?
Let's see your statistics. I'm assuming you've done a lot of research to support these claims.
As stated below, my guess is the wrong-doers are about 50 percent Republican and 50 percent Democrat. The only thing I can see that is particularly ironic or shameful is that the Republican party generallly portrays itself as the superiorly moral, family-oriented party.
We're not holding our breath. Owning up
nm
And people who had no business owning a home jumped in; not
with a gun at their head, but because of the attitude of I want what I want when I want it. I refuse to pay for LOSERS who can't manage money. Reward the irresponsible (the O way) and neglect those of us who have done the right thing, have savings in the bank, live debt free, pay our mortgage on time and live within our means. The American Way, everyone else is responsible for YOUR behavior and poor choices.
oil companies
There was just a senator from North Dakota debating on the senate floor (MSN sometimes has live video feed in the net, quite interesting..they also carried the John Roberts questioning which I watched)..Anyway this senator..I didnt get his name, he and Senator Barbara Boxer from CA are introducing a bill that would give rebates back to the people because of the high gas and oil prices we are paying. He said, it would be different if the oil companies were using their profits to look and drill for oil but they are using it to buy back their stock and invest in wall street. He said last year they made over a trillion dollars! He said some of that profit should go back to the consumer who is carrying a heavy load right now and the oil companies are doing nothing but make a profit. He said it is estimated oil prices for this winter will increase by 40% and natural gas by 70%.
oil companies
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.
So do we let the car companies die for now?
Make them think about what to build next? Or they will just fold up and we end up having to buy foreign made cars on US soil.
Drug companies
Why is it that other countries have American made medications so much cheaper than America. The argument has been well we pay the extra amount so drug companies can do research. Why us? We are expected to pay more for medications and also health benefits when other countries have universal healthcare and lower drug costs. It isnt right that Americans foot the bill for the world to enjoy the medications we produce at less cost than us. It isnt right that Americans have to go bankrupt when faced with a major illness because either their healthcare is inadequate or they dont have healthcare. If this administration really cared about what Americans need most, they wouldnt be talking about Social Security, they would be devising a universal health plan for all Americans. Some say that would be socialized medicine. Heck, when you dont have any health coverage, socialized medicine is better than nothing.
Maybe the tobacco companies have
I suppose that is another reasonable explanation as to why he would veto a bill that only promised to raise the cigarette tax. Too bad so many of the politicians that are supposed to work for us work for big business. I'm so disapointed in our government today.
Insurance companies.
I agree the insurance companies need a very, very major overhaul, but do you think the insurance companies are going to do that??? If they would there would be no need for a government run system, but the insurance companies will do absolutely zilch, and things cannot contine the way that they have been going.
I'd like to see the insurance companies You've got to think of all the other companies
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.
I took it for what it IS -- companies getting TAX BREAKS
Although English grammar & keyboarding can be taught to just about anyone, the deep-down knowledge of language, word & phrase patterns, ability to spell and acute hearing are things you're either born with, or your're not.
Bottom line: American work should be done in AMERICA. Let India and Pakistan support their growing middle class some OTHER way, because the United States is losing their middle class. If something doesn't change, there will only be 2 classes in this country - the very rich, and the very poor. The middle class, which USED to support both of them, will be nonexistent.
I feel bad for the companies that are being
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.
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!
Insurance companies cont...sm
You made reference to the fact that you already are paying through the nose for insurance premiums and don't want to end up paying even more to cover the uninsured.
I think the general gist of reform is to guarantee access to all, and at the same time, lower the costs for people such as yourself.
Whatever direction health care reform takes it will take government intervention, either in terms of mandating what insurance companies can charge for policies for all people, likely putting caps on prohibitive prescription drugs and windfall profits made by health care providers and hospitals, etc.
What the US spends on health care is far, far above what every other country pays for health care, and that is not because the US has superior care in many cases. It's a profit driven business that has become extremely out of control. It cannot continue in its current business as usual form, as it is no longer working to the benefit of most.
Oil companies employ people too...
thousands upon thousands of them. Just throw them under the bus?
The economy was fine until the last year...and who has been in control of Congress for the last year?
Our sons and daughters are in Iraq, not Iran. Obama has said that an immediate withdrawal is not a viable solution, that troops would remain there for at least a year, which is what the Bush administration is also saying. We just handed back to them the 11th of 18 provinces. The surge worked. Most of the combat troops will be coming home within a year. Obama and the Republicans agree on that issue.
How can Obama give tax breaks to companies to keep jobs here and then turn around and raise taxes on companies that make more than $250,000? Don't hardly see how he can do both.
Lobbying for big drug companies....oh my!
What will happen if the car companies bankrupt.
Duh, I know there will be job loss along with lawyers, computer companies who do business with auto dealers, human resources and so on. Job loss will not just be car company manufactures. Motorola supplies car companies with their technology and so many other companies. Would it be the Great Depression? What about all the people who lease cars with these companies or who make payments to these companies? What if you own American made cars and where do you get the parts to repair your american made cars? Geesh I could go on and on. Sounds like a horror flick.
Better pray car companies are not next in line.
x
Maybe if small businesses like MT companies
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.
If by draining and destroying companies you mean
advocating for fair wages, good benefits, pensions, job security, PTO, reasonable schedules, OT policies and safe working conditions, please explain to me why companies should not be providing a forum for workers' input on these issues? Why are these things too much to expect?
Are these not the same things you look for in an MT job? If a company is "destroyed" by providing them, maybe it's time for them to go down. Had unions not done their thing, we would still have child labor, lax, noncompliant or nonexistent safety standards in factories and various other industries, exclusionary hiring practices, substandard wages, no benefits, be fired without redress and basically would not have much of a middle class to speak of, not to mention a much wider disparity of wealth distribution. It might be a good idea to sit and reflect for a moment or two exactly how much unions have contributed to our economic culture and what things would be like had they not. There is still a place for them in terms of preserving the advances that have been made. No doubt, these things would be disappearing right and left, slowly but surely, in their absence. Just look at what's happened in our own MT sector.
If by draining and destroying companies you mean
advocating for fair wages, good benefits, pensions, job security, PTO, reasonable schedules, OT policies and safe working conditions, please explain to me why companies should not be providing a forum for workers' input on these issues? Why are these things too much to expect?
Are these not the same things you look for in an MT job? If a company is "destroyed" by providing them, maybe it's time for them to go down. Had unions not done their thing, we would still have child labor, lax, noncompliant or nonexistent safety standards in factories and various other industries, exclusionary hiring practices, substandard wages, no benefits, be fired without redress and basically would not have much of a middle class to speak of, not to mention a much wider disparity of wealth distribution. It might be a good idea to sit and reflect for a moment or two exactly how much unions have contributed to our economic culture and what things would be like had they not. There is still a place for them in terms of preserving the advances that have been made. No doubt, these things would be disappearing right and left, slowly but surely, in their absence. Just look at what's happened in our own MT sector.
If by draining and destroying companies you mean
advocating for fair wages, good benefits, pensions, job security, PTO, reasonable schedules, OT policies and safe working conditions, please explain to me why companies should not be providing a forum for workers' input on these issues? Why are these things too much to expect?
Are these not the same things you look for in an MT job? If a company is "destroyed" by providing them, maybe it's time for them to go down. Had unions not done their thing, we would still have child labor, lax, noncompliant or nonexistent safety standards in factories and various other industries, exclusionary hiring practices, substandard wages, no benefits, be fired without redress and basically would not have much of a middle class to speak of, not to mention a much wider disparity of wealth distribution. It might be a good idea to sit and reflect for a moment or two exactly how much unions have contributed to our economic culture and what things would be like had they not. There is still a place for them in terms of preserving the advances that have been made. No doubt, these things would be disappearing right and left, slowly but surely, in their absence. Just look at what's happened in our own MT sector...or the example of WalMart, the most notorious union busters around.
The unions are killing companies, though. That is
nm
15 Companies That Might Not Survive 2009
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.
Article from Juan Gonzalez, a NY Daily News columnist, RE: Hugo Chavez and his oil versus American oil companies:
Oil fat cats vs. Hugo Chavez
I pulled into the Mobil gas station on 11th Ave. in Manhattan yesterday for my weekly stickup from the oil companies.
Their take this time was an astonishing $3.05 per gallon for premium unleaded.
"Every three or four days the price goes up," said Patel, the man in charge of the station. "Lots of complaints from my customers."
Complaints from everyone except oil executives.
Last year, Exxon/Mobil, the world's largest corporation, posted the highest profits of any company in history - more than $25 billion. The oil giant, based in Irving, Tex., is on track to shatter that mark this year, with revenues that now approach $1 billion per day.
Which brings me to Pat Robertson and Hugo Chavez.
Robertson, the right-wing evangelist and friend of the Bush family, publicly called this week for the U.S. government to kill - or at least kidnap - Venezuelan President Hugo Chavez.
"This is a dangerous enemy to our south, controlling a huge pool of oil, that could hurt us badly," Robertson said. His less-than-Christian remarks ignited an outcry and forced him to issue an apology of sorts, though he still insisted that he had at least "focused our government's attention on a growing problem."
That "problem," quite simply, is that Chavez, a radical populist who has been voted into office repeatedly by huge majorities in his own country, controls the largest reserve of petroleum outside the Middle East.
Neither Robertson, nor former oil executives George W. Bush, Dick Cheney and Condoleezza Rice, nor their buddies at Exxon/Mobil, Chevron, etc., are happy about all this.
Even more scandalous for Big Oil, Chavez is using Venezuela's windfall not to fatten his own country's oligarchy but to benefit the Venezuelan poor and help neighboring countries.
Yesterday, while Robertson was issuing his half-baked Chavez clarification, the Venezuelan president was in Montego Bay, Jamaica, where he announced a new oil agreement with that country's prime minister, P.J. Patterson.
Under the agreement, Venezuela will supply 22,000 barrels of oil a day to Jamaica for a mere $40 a barrel. That's far lower than the current world price of about $65 a barrel. With the price of gasoline in that destitute nation already more than $3.50 a gallon, the Chavez plan means more than half a million dollars a day in savings for Jamaica on oil imports.
Chavez also announced his government will provide $60 million in foreign aid to Jamaica and finance the upgrading of that country's oil refineries.
The agreement is part of a broader Chavez plan called Petrocaribe, which he unveiled at a Caribbean summit in Venezuela last June.
At that conference, Chavez offered the same kind of deal to the leaders of more than a dozen other neighboring nations, including Dominican Republic President Leonel Fernandez and Cuba's Fidel Castro.
Fernandez jumped at the offer because his government is nearly bankrupt from oil prices. Last year, the Dominican Republic spent $1.2 billion on oil imports; this year, it expects to fork out more than $3 billion. The price of gasoline in Santo Domingo has zoomed past $4 a gallon in recent days.
Pat Robertson looks at Chavez and sees a devilish danger. He wants our government to "take him out." Over at the White House, Bush and his aides may use more restrained language, but their goals are not much different.
But there's a whole different view down in Latin America, where a half-dozen nations have seen liberal and populist governments swept into office in recent years.
Down there, Chavez has become the new miracle man of oil. Unlike Exxon/Mobil and the Big Oil fat cats, who wallow in their record profits while the rest of us pay, Chavez is spreading the wealth around.
All Things Considered, September 29, 2005 · Strong global demand for energy combined with tight supplies has resulted in record oil company profits. Some politicians are crying foul, especially after Katrina. But most analysts say it's the market at work.
marks the location of current message within thread
