GM To Layoff Additional 21,000 By Year's End

Th e 21,000 is the GM number only. It obviously doesn't reflect all the workers that will be laid off by the subcontractors and businesses that support GM. The total number will be staggering. I'm sure we're going to see the Obama administration adjusting their numbers over the next several weeks. I don't believe we've seen the bottom of this recession yet, and probably won't until at least next sometime next year.
Rees

GM Scrambles to Survive
from The Wall Street Journal
By KERRY E. GRACE
April 27, 2009

General Motors Corp. said Monday it will continue to reduce its work force and dealer network and eliminate its Pontiac brand by the end of next year as the auto maker works furiously to survive

GM is also starting an exchange offer for $27 billion of its unsecured public notes as part of its restructuring plan, saying a successful exchange offer would allow it to restructure out of bankruptcy court.

The company said by the end of the year, it will employ 21,000 fewer hourly workers than it does now.

The company is offering to exchange 225 common shares for each $1,000 principal amount of outstanding notes. The stock closed Friday at $1.69 a share and shares were recently up 11% at $1.87 in premarket trading.

The exchange will commence only if 90% of bondholders agree to the terms. Under the plan, if GM fails to get adequate participation, it would file for bankruptcy protection.

GM, which is surviving on federal loans, is racing to restructure by June 1 under close watch of the Obama administration.

The U.S. Treasury will extend an additional $11.6 billion to GM, in addition to $15.4 billion in existing loans. The government will forgive half the debt in exchange for equity in a restructured GM.

GM, in setting forth tough terms for a bond exchange and requiring almost compete participation, has stepped up the likelihood for a Chapter 11 filing on June 1 without further government intervention.

The company said it will focus on four core brands in the U.S. -- Chevrolet, Cadillac, Buick and GMC -- as it looks to make fewer different models and focus on product development programs.

It will also restructure its U.S. dealer organization, reducing its U.S. dealer count by more than 40% by the end of next year, a reduction of 500 more dealers four years sooner than its earlier viability plan.

Chief Executive Fritz Henderson said the company is taking "tough but necessary actions" that are critical to GM's long-term viability.

The company added that negotiations regarding contract changes with the United Auto Workers union are still ongoing.

Write to Kerry E. Grace at kerry.grace@dowjones.com
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General Motors is an ANTI-AMERICAN Company...

Drinking With Bob
April 20, 2009

I love his videos. I pop blood vessels in my head just watching them.
Rees

Attention White House and Congressional hacks: If you get caught in bed with a hooker, it's too late to condemn prostitution!

Attention White House and Congressional hacks: You can't go hop into bed with a hooker, have your little party, pay her and then express shock, outrage, condemn the hooker and ask for your money back when the American Taxpayer finds outs what happened.

Considering the financial condition of AIG at the time the bonuses were officially given to their executives, and the fact that the American Taxpayer had already injected billions of dollars into AIG in an attempt to rescue the company, the bonuses were a hideous, immoral example of greed. Unfortunately, the bonuses were legal and contractually agreed upon by all parties.

I'm someone who has seen their 401k destroyed. I can't describe how disgusting it is to watch watch has gone on at AIG, in the White House and in Congress. However, I don't agree with the whiplash legislation to tax the bonuses at a 90% rate.

First of all, the White House, the Federal Reserve and our Congressional Representatives all agreed to the bonuses. Now they're trying to cover their rear end because they see the outrage of the American Taxpayer.

This article by Rep. John Campbell explains why he voted against the legislation for the 90% tax on bailout bonuses. I just read this morning that it appears the bill won't even be voted upon by the Senate. That's the right thing to do. We don't need anymore slippery slopes.
Rees

John Campbell's AIG Tax Vote Explanation

from the website The Club For Growth
by Andrew Roth

Here's Rep. John Campbell's explanation for why he voted "no" on the AIG tax bill. It's very well reasoned and principled.

I firmly opposed and voted “no” on HR 1586. Let’s first understand exactly what the bill does. It imposes a 90% federal income tax on any bonus paid to any employee of any company that has received over $5 Billion in federal rescue funds. Such companies include, Bank of America, Wells Fargo Bank, Chase Bank, JP Morgan, CitiBank, Morgan Stanley, Merrill Lynch, Wachovia, Washington Mutual, Countrywide, Goldman Sachs, AIG, Fannie Mae, Freddie Mac amongst others. The tax would only apply to people with total joint incomes over $250,000 or single individuals with income of over $125,000. When combined with California Income taxes which now top out at 10.55%, this can be a tax just short of 101% of the income.


Under this law, a bank teller at Wells Fargo could receive a bonus of $1,000 for doing a great job. If that bank teller was married to a physician who made $175,000 and they had some additional investment income, that bank teller would pay a tax of $1,055 on the bonus of $1,000 that they received for doing a good job. This is horrible!

This is not raising revenues, this is punishment. It is a terrible precedent to use the tax laws for punishment. If we go down this road, the government can impose a 100% tax on anyone they don’t like, or anyone they believe is paid too much. Employees of other companies, doing the same thing for the same bonus, will not receive this tax. That probably makes it unconstitutional and I hope it does.

I understand the public outrage over these bonuses and I share much of it. But this is not the way to fix it. Sue them to get the money back. But don’t do this.

You may or may not realize it, but embezzlement income is taxable today, but at normal rates. So if you steal money, you will not have a tax higher than normal. You may be forced to give the money back because you stole it, but it will not be taxed away from you. This bill makes a bonus from Bank of America a more egregious offense under the tax laws than bank robbery.

All of this was caused because we nationalized companies that are created to make a profit. Throughout time, governments have shown themselves to be particularly inept at such an enterprise. This is another example of why.
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Mitt Romney on Larry King Live 3/19 - 2 Parts

The Smoking Gun Points To Geithner

by Earl Ofari Hutchinson

On March 19, Treasury Secretary Timothy Geithner was bluntly asked by a CNN interviewer: "As far as you can remember, though, you did not know about this (the tainted AIG bonuses) before March 10th?"

Geithner answered: "On Tuesday, I was informed about the full scale and scope of these specific bonus problems. And again, as soon as I did -- but, you know, it's my responsibility, I was in a position where I didn't know about those sooner, I take full responsibility for that."

This is the official Geithner and Obama administration line. But it's just that -- a line. It's not the truth. The truth is that Geithner knew everything he needed to know about the AIG bonuses long before March 10, did nothing about them, and then feigned outrage when the truth came out. Here's the smoking gun proof.

September 2008. AIG officials made no effort to mask their intent to pay the tainted bonuses. They clearly spelled out in their required SEC financial filing that they would pay $469 million in "retention payments" to keep valued employees.

November 2008. Treasury and Fed officials negotiated the specific terms under which the bonuses could be paid. This even included cuts in bonuses for most of the AIG's top executives.

December 2008. Congressional Democrats attempted to hold hearings on the bonuses. Several House Democratic Reps went further. South Carolina House Rep Elijah Cummings specifically demanded that newly appointed AIG CEO Edward Liddy scale back the bonuses. Another House rep. publicly called for the resignation of Liddy.

February 2009. Geithner and top Obama team economic advisor Larry Summers pressure Connecticut Senator Christopher Dodd and other Senate lawmakers to excise a provision from the banking bailout legislation that bans excessive executive bonuses to executives at TARP funded companies before February 11.

February 2009. Treasury staffers publicly disclose that the Treasury, the Federal Reserve in Washington, and the New York Federal Reserve held continuous interagency discussions on all operations of AIG since September. Geithner headed the New York Fed during those months.

February 2009. New York Fed officials reiterated that they carried out direct oversight of AIG and that they knew all about the bonus payments.

March 3, 2009. In an open hearing before the House Ways and Means Committee, Geithner complains to New York Rep Joseph Crowley that executive bonuses have gotten out of "whack." He was referring specifically to the tainted AIG bonuses.

March 18, 2009. A Treasury spokesperson insists that Geithner did not know about the timing of the AIG bonuses. That's far different than saying that he did not know about them at all as Geithner insisted, and apparently continues to insist despite the smoking gun proof to the contrary..

Unfortunately, this also appears to be President Obama's position as well. He has stoutly defended Geithner. The question is how long will and should he continue to defend him in the face of the smoking gun proof of what Geithner knew about AIG and when he knew it.

Click to read the article

Look Who Called Out Obama

from the blog Don Surber
March 20, 2009

Democratic Congresswoman Maxine Waters said President Obama has some ’splainin’ to do over the AIG bonuses.

This is so wrong that it is humorous. Mrs. Waters went out of her way to help get a bailout for the black-owned bank in Boston that once had her husband as a member of its board of directors.

And she is calling out the president?

Glenn Thrush of Politico quoted her from that morning show on MSNBC that no one watches:

“Well, you know, they’ve got some explaining to do and I think the president is going to have to clarify to the American public what took place between Treasury and Mr. Dodd. Obviously there was, appears to have been, some kind of agreement that they would protect the AIG from having to give those bonuses. I don’t know who said what and when. Chris Dodd said he wrote the language but that he was pressured practically by Treasury. Maybe the president is not up to speed on what is going on. But I think it is going to have to be clarified.”

I love it. She should know the answer. It is the Chicago way: Don’t ask, don’t tell.

The whole post is here. With video.
Click to go to the article

It's Obama's Crisis Now

By Byron York
Chief Political Correspondent
from The DC Examiner
3/20/09

You might have missed it, but a key moment in Barack Obama's young presidency occurred Wednesday afternoon as he began his trip to California to become the first sitting president to appear on a late-night comedy show. Heading for his helicopter, Obama made a statement about the AIG bonuses, and he didn't use the word "inherited." As in "we inherited this crisis."

"Ultimately, I'm responsible, I'm the president of the United States," Obama told reporters. "The buck stops with me." That makes it official: Barack Obama didn't start the financial crisis, but he owns it now.

Before anyone gives the president an award for political courage, remember that provisions regarding the bonuses -- and who knows what else -- were buried deep inside the $787 billion economic stimulus bill that Obama and his fellow Democrats rushed through Congress. Every single Republican in the House voted against it, and all but three GOP senators did the same. There's no way Obama can blame the stimulus, and its contents, on anyone other than himself.

"What's beginning to happen is his actions are starting to have consequences," a Republican pollster told me. "And this is one of those. He hurried everybody through that process, and it's now his actions that are causing things that people are unhappy about."
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Bonfire of the Trivialities

By Charles Krauthammer
Friday, March 20, 2009;
from The Washington Post

A $14 trillion economy hangs by a thread composed of (a) a comically cynical, pitchfork-wielding Congress, (b) a hopelessly understaffed, stumbling Obama administration, and (c) $165 million.

That's $165 million in bonus money handed out to AIG debt manipulators who may be the only ones who know how to defuse the bomb they themselves built. Now, in the scheme of things, $165 million is a rounding error. It amounts to less than 1/18,500 of the $3.1 trillion federal budget. It's less than one-tenth of 1 percent of the bailout money given to AIG alone. If Bill Gates were to pay these AIG bonuses every year for the next 100 years, he'd still be left with more than half his personal fortune.

For this we are going to poison the well for any further financial rescues, face the prospect of letting AIG go under (which would make the Lehman Brothers collapse look trivial) and risk a run on the entire world financial system?

And there is such a thing as law. The way to break a contract legally is Chapter 11. Short of that, a contract is a contract. The AIG bonuses were agreed to before the government takeover and are perfectly legal. Is the rule now that when public anger is kindled, Congress will summarily cancel contracts?

Even worse are the clever schemes being cooked up in Congress to retrieve the money by means of some retroactive confiscatory tax. The common law is pretty clear about the impermissibility of ex post facto legislation and bills of attainder. They also happen to be specifically prohibited by the Constitution. We're going to overturn that for $165 million?

Nor has the president behaved much better. He, too, has been out there trying to lead the mob. But it's a losing game. His own congressional Democrats will out-demagogue him and heap the blame on the hapless Timothy Geithner.
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