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Blagojevich 19 Count Federal Indictment on Corruption Charges
Blagojevich 19 Count Federal Indictments on Corruption Charges
Blagojevich indicted on federal corruption charges
59 mins ago
CHICAGO – Ousted Gov. Rod Blagojevich was indicted Thursday on charges of trying to auction off President Barack Obama’s vacant U.S. Senate seat along with new corruption allegations that he tried to extort a congressman. A sweeping 19-count federal indictment alleges that Blagojevich discussed with aides the possibility of getting a Cabinet post in the new president’s administration, substantial fundraising assistance or a high-paying job in exchange for the Senate seat.
Obama’s deputy press secretary, Josh Earnest, said the White House would not comment. The indictment does not allege any wrongdoing by Obama or his associates.
Prosecutors also accused Blagojevich and members of his inner circle of scheming to line their pockets with millions of dollars in ill-gotten gains, squeezing contractors, hospital owners and others seeking state business for kickbacks they planned to split after the governor left office.
“I’m saddened and hurt but I am not surprised by the indictment. I am innocent,” Blagojevich said in a statement. “I now will fight in the courts to clear my name. I would ask the good people of Illinois to wait for the trial and afford me the presumption of innocence that they would give to all their friends and neighbors.”
His brother, two former aides, a former fundraiser and a lobbyist were also indicted. Blagojevich’s wife, Patti, was not indicted.
The indictment alleges Blagojevich told an aide he wanted to stall a $2 million state grant to a school that was championed by a congressman until the lawmaker’s brother held a political fundraiser for the governor. The congressman’s identity wasn’t released.
It also says Blagojevich was involved in a corrupt scheme to get a massive kickback in exchange for the refinancing of billions of dollars in state pension funds.
Convicted fixer Tony Rezko paid Blagojevich’s wife, Patti, a $14,396 real estate commission “even though she had done no work” to earn it and later hired her at a salary of $12,000 a month plus another $40,000 fee, the indictment said.
And, according to the indictment, Blagojevich told an aide he didn’t want executives with two financial institutions getting further state business after he concluded they were not helping his wife get a high-paying job.
Others charged were former chief of staff Alonzo Monk; another former chief of staff, John Harris; brother Robert Blagojevich; onetime chief fundraiser Christopher G. Kelly; and Springfield lobbyist-millionaire William F. Cellini.
Prosecutors said Harris has agreed to cooperate.
Blagojevich was indicted on charges of racketeering conspiracy, wire fraud, extortion conspiracy and attempted extortion, and making false statements. Most of those charges carry a maximum sentence of 20 years in prison and a $250,000 fine.
Blagojevich, 52, was arrested Dec. 9 on a criminal complaint and U.S. Attorney Patrick J. Fitzgerald had faced a Tuesday deadline supplant it with an indictment handed up by a federal grand jury. The Democrat’s arrest led to his political downfall: The Illinois House impeached him Jan. 9. The Senate convicted him and removed him from office Jan. 29.
Blagojevich’s administration has been under federal investigation for years and Kelly and Rezko already have been convicted of federal crimes and are awaiting sentencing.
Thursday’s indictment said that in 2003 — the former governor’s first year in office — Blagojevich, Monk, Kelly and Rezko agreed to direct big-money state business involved in refinancing billions of dollars in pension bonds as part of a deal with a lobbyist who promised a massive kickback in return. The lobbyist wasn’t identified.
Rezko raised more than $1 million in campaign contributions for Blagojevich and also was a major Obama fundraiser.
G-20 & IMF as the Global Federal Reserve’s Brokers/Bankers
G-20 & IMF's as the Global Federal Reserve's Brokers/Bankers
G-20 gives $1 trillion to fight global crisis
By JANE WARDELL, AP Business Writer Jane Wardell, Ap Business Writer 21 mins ago
LONDON – World leaders pledged $1.1 trillion in loans and guarantees to struggling countries and agreed Thursday to crack down on tax havens and hedge funds — but failed to reach sweeping accord on more stimulus spending to attack the global economic decline.
At the end of a highly anticipated one-day gathering, leaders of the Group of 20 nations said they would upgrade an existing financial forum to serve as an early warning monitor to flag problems in the global financial system.
They did not, however, satisfy U.S. and British calls for new stimulus measures. Nor did European politicians get their goal of a global financial superregulator.
The leaders did bridge several gaps between the United States and some European nations over how far to regulate the market and how to curb the excesses that sparked the global economic crisis.
President Barack Obama, in his first major venture into international diplomacy, failed to get U.S. trading partners to spend more money on job-creating stimulus programs, as the U.S. and Britain have done. The proposal was opposed strongly by France and Germany.
However, it had become clear long before the gathering began that there was little support for more such stimulus spending outside the U.S. and Britain.
“I think we did OK,” Obama told reporters afterward. “We have agreed on a series of unprecedented steps to restore growth and prevent a crisis like this happening again… We have created as fundamental a reworking of resources to these international financial institutions as anything we’ve done in the last several decades.”
Obama’s words echoed comments by British Prime Minister Gordon Brown and the French and German leaders.
Thursday’s gathering was called in hopes of restoring faith in the global financial system — and in one possible gauge of success, European and U.S. markets surged ahead as the outcome of the summit came into view.
The biggest headline figure was the new money for the International Monetary Fund, which helps out governments that run into financial trouble from the crisis, and other development organizations to send credit to countries that have seen it dry up.
French President Nicolas Sarkozy, who earlier had threatened earlier to walk out if unsatisfied with the outcome, also praised Obama for helping to create consensus and persuade China to agree to publish lists of tax havens.
“There were moments of tension,” Sarkozy said. “Never would we have thought to get as big an agreement.”
German Chancellor Angela Merkel called the measures “a very, very good, almost historic compromise” that will give the world “a clear financial markets architecture.”
“For the first time we have a common approach to cleaning up banks around the world to restructuring of the world financial system. We have maintained our commitment to help the world’s poorest,” Brown said. “This is a collective action of people around the world working at their best.”
The G-20 leaders also said that developing nations — hard-hit and long complaining of marginalization — would get a greater say in world economic affairs. They said they would renounce protectionism and pledged $250 billion in trade finance over the next two years — a key measure to help struggling developing countries.
The leaders also agreed to new rules on linking executive pay to performance, Brown said.
Despite the announcement of a global supervisory body to flag problems, Sarkozy lost his bid for a global regulatory czar that could actual enforce regulations inside U.S. and other countries.
Obama said that the comprehensive deal was just the beginning, and the world’s problems “are not going to be solved in one meeting, they’re not going to be solved in two meetings.”
G-20 leaders agreed to gather again to assess progress on their commitments at the sidelines of the annual U.N. summit in New York in September.
Police were out in force for the G-20 summit Thursday, swarming the east London riverside site after demonstrations in the city’s financial district on Wednesday turned spordically violent.
Police boats patrolled the Thames river as small groups of demonstrators protested world poverty and climate change. Over 110 people were arrested over two days, police said.
IMF’s Global Bailout
IMF's Global Bailout
G-20 leaders eye more IMF funds, tighter rules
By JANE WARDELL, AP Business Writer Jane Wardell, Ap Business Writer 1 hr 10 mins ago
LONDON – Global leaders made headway Thursday on tackling the world financial crisis, with new clampdowns likely on tax havens and hedge funds and more funds heading to the International Monetary Fund so it can boost loans to struggling countries.
Officials close to the negotiations said the Group of 20 nations could triple their funding for the IMF to $750 billion. The world financial body supports countries whose finances have been hard hit by the global slowdown, supporting their currency reserves and banking systems.
The officials, from a number of delegations, said the funds could include an overdraft facility worth some $250 billion for developing countries. They refused to be further identified because they were not authorized to speak to the media.
On financial regulation — a sticking point ahead of the gathering — two people close to the negotiations said that France and Germany had persuaded the Group of 20 leaders to back tougher language in the final statement on stronger rules to avoid a repeat of the current crisis.
Another official said the final deal will include proposals making sure companies more tightly link executive salaries to performance, a measure that reflects public outrage about the huge retention payments, bonuses and golden parachutes granted to banking chiefs before the sector collapsed.
Opening the summit in London’s east Docklands district, British Prime Minister Gordon Brown said there was strong unity among leaders upon the need for action.
“I believe that the text that has been circulated already reflects a very high degree of consensus and agreement between all of us,” Brown told his fellow leaders.
Britain’s Finance Secretary Stephen Timms said early discussions had been “lively,” but added that countries would agree on sanctions against countries who refuse to sign up to new rules on regulating tax havens.
“The era of banking secrecy is over,” Timms said.
As President Barack Obama and Brown joined other leaders at a working breakfast, protesters began gearing up for a second day of demonstrations, gathering outside the London Stock Exchange near St. Paul’s Cathedral. Riot police took up positions as well, ringing the stock exchange.
French daredevil Alain Robert scaled Lloyds of London’s high-rise headquarters as office workers below snapped photos. Robert, dubbed the French spider-man, has scaled dozens of tall structures around the world without ropes or harnesses to draw attention to global warming. He was later led away by police.
French President Nicolas Sarkozy and German Chancellor Angela Merkel have been adamant that the G-20 meeting must take concrete steps to more closely regulate banks, hedge funds and other financial institutions.
Sarkozy had previously threatened to walk out if the summit didn’t achieve a strong statement on new financial regulations, warning that he considered action on tax havens, hedge funds and ratings agencies as the absolute minimum the negotiations must resolve.
Sarkozy and Merkel want the G-20 to publish a blacklist of tax havens and announce sanctions at the end of Thursday’s meeting.
The British official said the boost to the IMF would include significant pledges from China, and in return there would be increasing efforts to give China and other emerging countries greater clout on the IMF.
Obama has acknowledged that U.S. regulatory failures contributed to the crisis in the financial system, but urged a focus on solutions, saying “we can only meet this challenge together.”
European leaders have balked at moving beyond spending measures already announced, arguing that their more generous welfare systems mean their spending levels will rise anyway as more people get benefits such as unemployment insurance.
As leaders met in the Docklands, a former shipping area on the Thames river that was redeveloped as an international business center, protesters began a second day of demonstrations. Security was tight at the summit venue; hundreds of police manned barriers and checkpoints around the security perimeter.
Near St. Paul’s Cathedral in the financial district, protesters played a giant Monopoly game.
“The question is of course who has got the monopoly? It is fairly obvious the G20 are the global financial elite,” said protester Clare Smith, 27. “Meanwhile the poor are getting poorer.”
More than 100 people have been arrested.
Unemployment @ Record Levels since 1982 in USA
Unemployment @ Record Levels since 1982 in USA
U.S. jobless claims highest in more than 26 years
42 mins ago
WASHINGTON (Reuters) – The number of U.S. workers filing new claims for jobless benefits surged to a nearly 26-1/2 year high last week, data showed on Thursday, indicating that the pace of job losses was yet to peak.
At the same time, the number of laid-off workers collecting state unemployment benefits jumped to a record high in March, the Labor Department said, as the recession now in its 16th month makes it tough to find a new job.
New applications for state jobless insurance benefits rose 12,000 to a seasonally adjusted 669,000 in the week ended March 28, the highest since the week ending October 2, 1982, from an upwardly revised 657,000 the week before.
Analysts polled by Reuters had forecast 650,000 new claims versus a previously reported count of 652,000 the prior week.
U.S. stock index futures pared gains after the data, while government bond prices held steady at lower levels.
“We have been seeing not just an elevated trend but an increasing trend. That is not good. We know the labor market is going to be a lagging indicator, but we need to see the pace of job losses moderate soon if we are going to get a recovery,” said Scott Brown, chief economist at Raymond James & Associates in St. Petersburg, Florida.
Highlighting the difficulties of getting a new job, the number of people staying on the benefits roll after collecting an initial week of aid surged 161,000 to 5.73 million in the week ended March 21, the latest week for which the data is available, from 5.57 million the previous week.
This was the highest on record and lifted the insured unemployment rate to 4.3 percent, the highest since a matching 4.3 percent in the week ending May 21, 1983. The insured unemployment rate was at 4.2 percent in the week ended March 14.
“What it says to me is the persistence of unemployment,” said T.J. Marta, chief market strategist at Marta on the Markets in Scotch Plains, New Jersey.
“It’s more of a structural reallocation of resources, which could be worse than anything we’ve seen since the Great Depression,” he said.
The four-week moving average for new claims, considered to be a better gauge of underlying trends as it irons out week-to-week volatility, climbed 6,500 to 656,750 in the week ending March 28, from 650,250. That was the highest reading since October 1982.
http://news.yahoo.com/s/nm/20090402/bs_nm/us_usa_economy_jobless
AIG Bailout Failed
Former AIG chief says bailout ‘failed’
Former AIG CEO Maurice “Hank” Greenberg says the bailout has “failed” and he’s proposing a 10-point alternative focused on saving, not breaking apart, the mega-insurer.
Greenberg will reveal his plan during a hearing before the House Oversight and Government Reform Committee today, slated to start at 10 a.m.
His proposal includes pressuring the counterparties at the other end of AIG’s toxic financial transactions to reinvest in AIG some of the $100 billion in taxpayer money they received as part of the firm’s bailout, according to a copy of Greenberg’s prepared testimony obtained by POLITICO.
Critics have blasted the feds for not forcing AIG counterparties to take a loss on the complex financial contracts, but rather allowed them to be paid off in full. Particularly galling for some is the fact AIG paid out billions of U.S. taxpayer money to Europe’s largest banks.
“The plan has also been highly controversial and in some respects downright puzzling,” Greenberg says of the counterparty payments.
But Greenberg’s mere appearance before the committee is controversial, too.
He was forced out of AIG in 2005 in the wake of an accounting scandal. The house oversight panel’s top Republican, Rep. Darrell E. Issa of California, Wednesday asked Chairman Edolphus Towns (D-N.Y.) to reconsider allowing Greenberg to testify, raising concerns about the witness’ credibility given he’s at the center of several lawsuits, including charges securities fraud charges by a U.S. Attorney.
“News reports indicate SEC action against Mr. Greenberg on these securities fraud charges could come at any day and there are good reasons to believe he could face even more significant legal problems involving the alleged misappropriation of shares from Starr International Company, a trust fund to be used solely for the purpose of providing long-term deferred compensation for AIG employees,” Issa wrote in a letter to Towns.
As for his alternative rescue plan, Greenberg says that “AIG’s problem was a liquidity problem, not a solvency problem. In such circumstances, the goal of government should be to provide temporary liquidity to save jobs and keep the gears of the financial system operating smoothly. The goal of government should not be to liquidate large companies that have demonstrated that they can succeed if properly managed; it should be to restore them so that they can be employers and taxpayers.”
Elements of the Greenberg plan include reducing the government ownership to a 15 percent equity stake from the current 80 percent, injecting new capital in the form of common stock, and installing a new board and management team.
The real fireworks in the Greenberg hearing, however, may not come from his complex proposals, but from House lawmakers still eager to find villains in the AIG meltdown.
http://news.yahoo.com/s/politico/20090402/pl_politico/20799_1
Madoff’s Seized Palm Beach $9M Manse by the U.S. Marshals
Madoff's Seized Palm Beach Manse by the U.S. Marshals
Feds seize Madoff’s mansion, yacht, small boat
By BRIAN SKOLOFF and By TAMARA LUSH, Associated Press Writers Brian Skoloff And By Tamara Lush, Associated Press Writers 25 mins ago
PALM BEACH, Fla. – Federal authorities seized disgraced financier Bernard Madoff’s Palm Beach mansion, his vintage yacht and a smaller boat Wednesday, part of an effort to recoup assets to pay back investors he swindled. Barry Golden, a spokesman for the U.S. Marshals Service, said about five U.S. marshals arrived at the 8,753-square-foot, five-bedroom mansion late Wednesday afternoon, hours after marshals seized the boats.
Authorities planned to enter and secure the mansion, change the locks and conduct an inventory of the property, which Palm Beach County records show had a taxable value of $9.3 million last year.
Golden said marshals will spend about three to four hours filming and photographing items in the house that might be removed at some point. The mansion was unoccupied when federal authorities arrived.
“It’s not an April Fools’ joke,” he said.
Palm Beach County property records show the mansion was purchased in 1994 under his wife Ruth’s name for $3.8 million. The 2008 property tax bill was $157,298. Golden said the estate would be “monitored and maintained” and is no longer considered Madoff’s property.
“Once the judge signed the order, it stopped being Bernie Madoff’s home,” Golden said.
Earlier in the day, Golden said Madoff’s 55-foot yacht named “Bull” and a 24-foot motor boat were taken from marinas on Florida’s east coast. The yacht, a 1969 Rybovich, is worth $2.2 million.
“A lot of money was put into maintaining this boat,” Golden said. “This boat was extremely well kept, extremely clean. Engine compartment was spotless. It looked like somebody took a bottle of 409 and scrubbed it every day.”
Madoff, 70, is in jail in New York awaiting sentencing after he pleaded guilty to swindling billions from investors in what could be the biggest scam in Wall Street history. He faces up to 150 years behind bars.
Prosecutors are seizing as much as they can of Madoff’s personal fortune, and have begun demanding millions of dollars in payments from his relatives. Roughly 6,700 people have filed claims for a share of whatever is recovered. Thousands more — some who lost in excess of $1 million — are expected to come forward.
Court documents filed by Madoff’s attorneys indicate Madoff and his wife had up to $826 million in assets — including the boats — at the end of last year.
If prosecutors get their way, Madoff and his wife, who has not been charged, will have to give up all their assets, including a $7 million Manhattan penthouse bought in 1984, the Florida home, a $1 million home in Cap d’ Antibes, France and a $3 million luxury home on New York’s Long Island. The government also wants Madoff and his wife to forfeit $10 million in furnishings for all the homes and luxury cars, among other items.
Defense attorneys have indicated they may try to keep the Manhattan apartment, as well as about $62 million in securities, for his wife.
“We have no objection to the seizure or to the assets being sold,” lawyer Ira Sorkin said in brief remarks Wednesday. “The proceeds of the sale will be put aside for discussion at a later date.”
Also Wednesday, Massachusetts’ top securities regulator accused a major feeder fund for Madoff’s investment scheme of misrepresenting its lack of knowledge about Madoff’s operations.
Secretary of State William Galvin accused Fairfield Greenwich Group of Connecticut of civil fraud charges, saying company officials were coached by Madoff on how to answer questions about his investment practices and misrepresented how much they really knew.
As far back as April 2008, Galvin said, Fairfield Greenwich principals began discussing the risk that Madoff would “blow up,” but didn’t disclose that risk to investors. He also said that Fairfield Greenwich kept a database of standardized responses to investors’ questions, designed to reassure them that the firm had adequate controls to supervise assets at Madoff’s company.
The administrative complaint seeks restitution for Massachusetts investors for losses from Fairfield Greenwich.
Fairfield Greenwich said in a statement the allegations are false and misleading and it intends to “vigorously” contest them. “FGG is appalled by the Madoff losses suffered by its investors, including its employees and the three investors who reside in Massachusetts,” the statement said.
GM’s Bankruptcy Planned
GM's Bankruptcy Planned
U.S. plans to ease GM into bankruptcy: report
2 hrs 7 mins ago
WASHINGTON (Reuters) – The Obama administration is seeking to ease General Motors Corp into a “controlled” bankruptcy by persuading some creditors to agree to a plan that would divide the company into two pieces, the New York Times reported on Wednesday.
Citing people briefed on the matter, the Times said the plan is to push GM into a structured bankruptcy “somewhere between a prepackaged bankruptcy and court chaos,” using taxpayer financing for leverage.
The administration is drawing in part from its experience with troubled banks, seeking to create a new, healthier GM, but leaving behind its liabilities and less valuable assets, possibly for liquidation, the Times said on its website.
Under the plan, GM would file for prearranged bankruptcy, the report said, and would then use a sale authorized under Section 363 of the U.S. bankruptcy code to sell off desirable assets to a new company financed by the government.
These more valuable assets might include Cadillac and Chevrolet, as well as assets the company needs to run its business, the Times said.
Plans are still under discussion and details are subject to change, the report said.
GM officials warned on Tuesday there was a rising chance it could file for bankruptcy by June.
One plan under discussion would be to form a new company of the automaker’s best assets, while laggard brands and money-losing assets would remain under bankruptcy protection, a person familiar with that strategy told Reuters.
President Barack Obama’s thinking on the crisis facing GM has not changed since Monday, a senior administration official told Reuters on Tuesday.
“Nothing has changed on this,” the official said when asked about a Bloomberg report that the president has determined that a prepackaged bankruptcy is the best way for GM to restructure and become competitive. “This report is not accurate.”
The White House wants the 60-day period for GM and a 30-day period for Chrysler to play out, as announced by the president on Monday, the official said, speaking on condition of anonymity.
http://news.yahoo.com/s/nm/20090401/ts_nm/us_autos_report_sb
AIG Bailout or Blackmail
AIG Bailout or Blackmail
GAO: Treasury should take a harder line with AIG
WASHINGTON – The Treasury Department should deny American International Group Inc. a $30 billion “contingency” bailout until the company agrees to take back millions in bonuses and negotiate cheaper exits from its financial contracts, congressional auditors said Tuesday.
The Government Accountability Office report also found that payouts from the $700 billion financial system bailout nearly halted over the past two months. The slowdown occurred as Treasury Secretary Timothy Geithner came under fire for moving too slowly to announce financial rescue plans and assemble a team to oversee the largest government market intervention ever.
Treasury should withhold the latest $30 billion of bailout money it committed to AIG until the failed insurer agrees to “seek additional concessions from employees and existing derivatives counterparties,” the GAO report recommended.
Congress and the public grew so outraged this month over AIG’s awarding $165 million in bonuses that some called for Geithner’s resignation. The Treasury and Federal Reserve have committed more than $182 billion to save AIG. Treasury now owns nearly 80 percent of the New York City-based company, and experts warn it may require even more money.
The Fed also took heat for refusing to name the indirect recipients of billions of dollars AIG was spending to wind down financial contracts. Despite warnings that such revelations would threaten the global economy, AIG eventually released the names, but the news was overshadowed by the bonus controversy.
At a Senate Finance Committee hearing Tuesday, Neil Barofsky, who audits bailout spending as special inspector general for the Troubled Asset Relief Program, said his office is investigating the issue, including who approved the payments.
As of March 27, Treasury had disbursed $303.4 billion from the TARP, according to the GAO report. That’s only $9.7 billion more than Treasury had paid out by Jan. 23, at the start of Geithner’s tenure.
The review by government auditors adds to criticism of Treasury’s failure to manage expectations and move quickly to roll out its rescue programs.
“While articulating its plan was an important step, Treasury continues to struggle with developing an effective overall communication strategy that is integrated into TARP operations,” according to the new GAO report. It says that could make it harder to build support for additional funding requests.
In the law authorizing the TARP money, Congress required the GAO to produce reports on the program’s condition and internal controls at least every 60 days. The law also created a bipartisan Congressional Oversight Panel to report on Treasury’s actions, the financial markets and the regulatory system. Besides conducting audits and investigations, Barofsky’s office promotes transparency.
A Treasury spokesman, Andrew Williams, said in a statement that transparency and accountability are key concerns as the department tries to maximize its use of taxpayer money.
He said Treasury has made “significant progress in implementing every GAO recommendation” from previous reports, including hiring more staff for the new financial stability office and expanding a bank survey on lending and other activities.
At Tuesday’s Senate hearing, Barofsky for the first time gave some clues about how banks were using their bailout dollars, including some that identified specific loans made possible through the TARP.
Despite questions from the oversight bodies, Treasury has not yet satisfied concerns that it runs the programs behind closed doors and doesn’t require enough disclosure about how banks are spending billions in bailout money, the GAO report says.
To help the department meet standards for accountability and transparency, the report includes recommendations. Among them:
_Reporting the dividends Treasury has received from TARP participants.
_Hiring a communications officer to work in the office overseeing TARP.
_Scheduling regular meetings between Treasury officials and congressional leaders, and holding “town hall meetings with the public across the country.”
http://news.yahoo.com/s/ap/20090331/ap_on_bi_ge/bailout_oversight
GM’s Bankruptcy is More Probable
GM's New CEO Says Bankruptcy More Probable
GM’s new CEO says bankruptcy is ‘more probable’
DETROIT – General Motors Corp.’s new chief executive said Tuesday that more of the automaker’s plants could close and bankruptcy is “more probable” as GM works to meet new, tougher requirements for government aid. In his first news conference as CEO, Fritz Henderson said he expects the company would “need to take further measures” beyond the five plants the company said it would shutter when it submitted a restructuring plan to the government last month.
GM also is likely to offer another buyout program to workers as it looks to cut labor costs, Henderson said.
President Barack Obama said Monday that GM’s initial plans to become viable didn’t go far enough. He gave the company 60 days to make more cuts and get more concessions from bondholders and unions or it won’t get any more government help.
The Obama administration also asked former CEO Rick Wagoner to resign, and Henderson took over as CEO on Monday.
Henderson said that although GM would prefer not to use bankruptcy protection to save itself, it is “certainly more probable” than in the past.
The company, he said, has until June 1 to accomplish changes sought by the government, or it will be in bankruptcy. The 60-day deadline should be enough time, but if it becomes evident that the changes can’t be made by the deadline, GM could go into court sooner, he said.
“It doesn’t have to take 60 days. If it’s quite clear that we’re not able to accomplish what we need to do in terms of operational restructuring, reduction of debt on the balance sheet and what we need to do to accomplish these broad parameters of having a viable business, this will be a management judgment” reviewed by the Obama administration’s autos task force, he said.
Henderson also said GM is still talking with potential buyers of the Hummer brand, and a decision on the brand’s fate will come in the next few weeks. GM said in a viability plan filed with the government in February that it would make the decision in the first quarter, which ends Tuesday.
In an effort to increase sales, GM launched a program called “Total Confidence” that will make car payments for customers who lose their jobs through no fault of their own.
GM will make up to nine payments of $500 each to qualifying customers. Consumers must qualify for state unemployment benefits to be eligible for the program.
The program starts Wednesday and runs until April 30.
Ford Motor Co. announced a similar program Tuesday, which will take over customer’s payment of up to $700 a month for a year in the event of job loss.
Shares of GM fell 32 cents, or 11.9 percent, to $2.38 in midday trading. Ford shares fell 6 cents, or 2.2 percent, to $2.70.
http://news.yahoo.com/s/ap/20090331/ap_on_bi_ge/gm_henderson
Unemployment Olympics
Unemployment Olympics
Christopher Dawes tosses an office phone during the Unemployment Olympics in New York, Tuesday, March 31, 2009. The lighthearted competition was only open to the unemployed, and included a such games as ‘Pin the Blame on the Boss’ and ‘Office Telephone Toss’.
http://news.yahoo.com/nphotos/Unemployment-Olympics/ss/events/lf/033109unemployolymp
Daniel M. Parkman, Sr. Blog 