- GM, Chrysler Said to Consider Bankruptcy to Get U.S. Bailout
- GM, Chrysler Win Union Concessions to Bolster Aid Bid
- Bank of England cuts interest rates 100 bps to 2%
- Treasury mulls plan to lower mortgage rates to 4.5%
- Crude Oil Falls a Fifth Day as U.S. Fuel Demand Drops Further
- Harvard endowment loses $8bn in four months
- Carlyle Plans To Cut Staff By 10 Percent As Deals Slow
- Sarkozy to Announce EU26 Billion of Measures to Spur Economy
- Nokia Cuts Fourth-Quarter Mobile Industry Outlook
- Adobe slashes revenue forecast
- Hewlett-Packard Said to Be Freezing Pay in Cost-Cutting Effort
- Toll Has Fifth Straight Loss as Housing Slump Deepens
- Trucking Firm YRC, Union Set Tentative 10% Wage Cut
GM, Chrysler Said to Consider Bankruptcy to Get U.S. Bailout - Bloomberg
General Motors Corp. and Chrysler LLC executives are considering accepting a pre-arranged bankruptcy as the last-resort price of getting a multibillion-dollar government bailout, said a person familiar with internal discussions.
Auto executives have warned that bankruptcy would lead to liquidation as customers abandoned the companies. In response, staff for three members of Congress have asked restructuring experts if a pre-arranged bankruptcy -- negotiated with workers, creditors and lenders -- could be used to reorganize the industry without liquidation, a person familiar with that matter said.
“It’s essential for Congress to do due diligence on bankruptcy as an option so it gets a clear sense from independent people what the risks and possibilities are,” said Alan Gover of White & Case, who has been lead lawyer in $60 billion of corporate-debt restructurings.....
GM, Chrysler Win Union Concessions to Bolster Aid Bid - Bloomberg
General Motors Corp., Ford Motor Co. and Chrysler LLC, struggling for support in Congress for aid, won money-saving union agreements to delay contributions to medical funds and suspend a program that pays laid-off workers.
Today's move by the United Auto Workers gives GM, Ford and Chrysler a boost as their chief executive officers prepare to testify tomorrow and Dec. 5 on their requests for $34 billion in financial help. Lawmakers have pressed the companies to show how they will survive and repay any government loans.
``This should be interpreted as a meaningful and a painful sacrifice,'' said Harley Shaiken, a labor relations professor at the University of California at Berkeley. The jobs bank was ``something the union worked over decades to achieve.''.....
Bank of England cuts interest rates 100 bps to 2% - Reuters
The Bank of England slashed interest rates by a full percentage point on Thursday to shore up Britain's crumbling economy and head off the threat of deflation.
The cut took rates to 2.0 percent, their lowest level since 1951. UK interest rates have never gone below this level since the central bank was created in 1694.
Analysts had widely expected the move following business indicators suggesting the economy could be heading for an even deeper recession than most people had predicted.....
Treasury mulls plan to lower mortgage rates to 4.5% - CNNMoney
Lobbyists are pushing the Treasury Department to consider a plan to purchase mortgage-backed securities in the hopes of driving mortgage rates to as low as 4.5%, an industry source said.
Similar to an effort unveiled last week by the Federal Reserve, the proposal calls for Treasury to buy securities backed by 30-year fixed-rate mortgages from Fannie Mae and Freddie Mac. Details on the plan remain sketchy, but an announcement could come as early as next week, the source said.
The increased demand for mortgage-backed securities would prompt mortgage rates to drop. That, in turn, would enable homeowners to refinance into lower-cost loans and make it cheaper for potential homebuyers to get into the market.....
Crude Oil Falls a Fifth Day as U.S. Fuel Demand Drops Further - Bloomberg
Crude oil fell for a fifth day to the lowest in almost four years after a report showed U.S. fuel demand extended declines because of the country’s deepening economic slump.
The average amount of fuel products such as gasoline and diesel supplied by refiners for the past four weeks was 7.9 percent less than a year earlier, according to a U.S. Energy Department report yesterday. The U.S. Labor Department will probably say tomorrow that payrolls fell the most since the 2001 terrorist attacks last month.
“The macroeconomic picture is bleak, the engine of capitalism is stuck right now,” Stephen Schork, president of the Schork Group, said in a radio interview from Vienna. “There’s no reason why crude oil can’t go below $40 in the next six months.”....
Harvard endowment loses $8bn in four months - Financial Times
Harvard, the world’s wealthiest university, said that its endowment lost 22 per cent, or $8bn, in the first four months of the fiscal year, underscoring how higher education has been hard hit by the global financial crisis.....
Drew Faust, Harvard’ president, and Edward Forst, the school’s executive vice-president, described the impact of the loss in a letter sent to the university’s deans late on Tuesday evening.
“To put a loss of that size in historical context, over the last at least 40 years, Harvard’s worst single-year endowment return was a negative 12.2 per cent in 1974, and at that time our endowment stood at less than $1bn and funded a much less significant proportion of university operations,” read the letter, which is on the college’s website.
“Since that time, there have been only three years of negative performance, with returns ranging from minus 0.5 per cent to minus 3 per cent.”
Carlyle Plans To Cut Staff By 10 Percent As Deals Slow - Washington Post
The Carlyle Group said yesterday it will lay off 10 percent of its staff as a worsening economy hinders dealmaking by the District-based private equity giant.
Carlyle, which has about 1,000 full-time employees in 33 offices in 21 countries, said most of the layoffs will come from its U.S. offices. It did not say how many Washington-area employees will lose their jobs.
Most of the approximately 100 affected employees work in support and administrative positions, including accounting and personnel, though some professional dealmakers will be laid off. The employees were informed Tuesday and will be given severance packages, Carlyle spokesman Chris Ullman said....
Sarkozy to Announce EU26 Billion of Measures to Spur Economy - Bloomberg
French President Nicolas Sarkozy is set to announce today 26 billion euros ($33 billion) of measures to spur growth in an economy teetering on the brink of recession.
The aid, which Sarkozy will detail in a noon speech in Douai, in northern France, totals 1.3 percent of gross domestic product and will increase the 2009 budget deficit to 3.9 percent of GDP from a projected 3.1 percent, according to a government briefing document.
“We’ll announce a quite massive stimulus plan for tackling the difficulties of the car industry” and “to reinforce construction,” Sarkozy said in Valenciennes on Nov. 25....
Nokia Cuts Fourth-Quarter Mobile Industry Outlook - Bloomberg
Nokia Oyj, the world’s largest maker of mobile phones, cut its outlook for fourth-quarter sales in the handset industry, saying the slowdown had “continued more rapidly” since the middle of last month.
Industry sales for this quarter will be lower than the 330 million units it had predicted last month, the Espoo, Finland- based company said today in an e-mailed statement. The company also said it could no longer confirm its earlier prediction of having 38 percent global market share or higher in the quarter.
In 2009, industry sales will fall by 5 percent or more, marking the first decline since 2001. The company had earlier said it anticipated to the market would decline, without giving a specific forecast. The revision marks the third time in as many months Nokia has revised targets. Nokia said it aims to increase its market share next year from 2008, including for smartphones.....
Adobe slashes revenue forecast - Financial Times
Adobe, one of the largest US software companies, on Wednesday provided the latest indication of how the economic crisis is rolling through the technology industry as it slashed its revenue projections and announced that it had already “taken steps” to cut its workforce by 8 per cent, or 600 people.
The company, whose software is used widely in the creative industries, has carried greater exposure to a downturn in advertising than many other software companies, and comments from the company on Wednesday suggested this was a big source of its earnings shortfall....
Hewlett-Packard Said to Be Freezing Pay in Cost-Cutting Effort - Bloomberg
Hewlett-Packard Co., the world’s largest personal-computer maker, is freezing salaries as part of Chief Executive Officer Mark Hurd’s efforts to contain costs, people familiar with the plan said.
Employees have been notified by e-mail that they won’t receive a salary increase in fiscal 2009, which began in November, according to two people who asked not be identified because the message was confidential. The only exceptions will be in countries where pay freezes are illegal, the two people said....
Toll Has Fifth Straight Loss as Housing Slump Deepens - Bloomberg
Toll Brothers Inc., the largest U.S. luxury homebuilder, reported its fifth consecutive quarterly loss as the deepening housing recession deterred buyers.
The fiscal fourth-quarter net loss narrowed to $78.8 million, or 49 cents a share, from $81.8 million, or 52 cents, a year earlier. Revenue fell to $698.9 million from $1.17 billion, Horsham, Pennsylvania-based Toll said today in a statement.
A record drop in home prices, the recession and a lack of financing is preventing buyers from selling their properties and trading up to Toll homes, which typically sell for more than $700,000. Toll’s customers are also balking on concern their home value will fall after the deal closes. The company has weathered the slump by limiting price cuts and amassing $1.6 billion in cash.....
Trucking Firm YRC, Union Set Tentative 10% Wage Cut - Wall Street Journal
YRC Worldwide Inc., one of the nation's largest trucking companies, will cut wages for 40,000 union workers by 10% if the workers approve a deal recommended by representatives of the International Brotherhood of Teamsters.
Teamsters leaders voted Wednesday to approve the pay cut, saying they recognize the precarious nature of the company's finances. YRC is struggling with plummeting freight volumes and dwindling revenue.
"No one wants to take any sort of wage cuts," said Bret Caldwell, a Teamsters spokesman. "However, the survival of the company is at stake and people's livelihoods are at stake."....
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