GM's Lordstown, Ohio assembly plant has become a symbol of both GM's hard times and its best hopes for a turnaround after a $50 billion federal investment. A recent bump in sales because of the government's "Cash for Clunkers" program has allowed GM to call back more than 1,000 workers from layoff. So it was a natural backdrop for a return visit by President Obama, who held a roundtable with workers and then gave a stump speech from the factory floor for his economic policies and health care reform. But this is not your father's GM anymore and nothing about it as clear-cut as it seems -- even if you are the leader of the free world and head of the government that holds a controlling stake in the automaker. At one point, Obama -- veering from his prepared remarks -- suggested that health-care reform would allow the UAW-represented workers in the audience to negotiate better wages.
Tales from the Trail
It’s not yet 9:00 on a Monday morning, and the federal government has already dumped another $30 billion into the tottering financial system. The money goes to insurer American International Group Inc., which just announced a fourth-quarter loss of $61.7 billion — the largest quarterly loss in corporate history.
Congress is nervous about spending more money.
In other news, pigs are flying, hell is freezing over and Democrats and Republicans are cooperating for the good of the country.
Two of those things are actually true. The outgoing Bush administration and the incoming Obama administration are working together to get Congress to approve the second half of the $700 billion financial bailout, so Obama can hand it out quickly if needed.
But Democrats on Capitol Hill want to attach more conditions to banks that accept federal cash — limits on executive pay, more oversight, and more help for homeowners facing foreclosure.
“My colleagues in the Senate will not provide any additional funds unless they are assured by the Obama administration taht these provisions will be a part of it,” Senate Banking Committee Chairman Chris Dodd said on ABC’s “Good Morning America.”
Republicans, meanwhile, question whether the money is needed at all.
Obama is also urging Congress to approve an additional $800 billion economic stimulus package. Should be a stimulating week.
Obama also will discuss trade and the drug war with Mexican President Felipe Calderon today in his first meeting with a foreign leader since his election.
Bush, meanwhile, holds a press conference at 9:15 EST.
Israel’s military operations in Gaza continue to dominate front pages of major newspapers and morning talk shows. Wall Street is looking for a positive start as oil and gold prices ease back from the price spikes that followed the onset of the Israeli strikes against Hamas.
Republicans in Congress effectively said good riddance to President George W. Bush this week, handing their unpopular leader a last big defeat by rejecting a $14 billion auto industry bailout the White House negotiated with Democrats.
“No one cares what the White House thinks,” scoffed a senior Republican leadership aide.
With Democrat Barack Obama set to replace Bush as president on Jan. 20, the aide said: “There’s frustration among Republicans that Bush doesn’t have a feel for our positions, and relief that he’s leaving.”
With Bush at the head of the party the past eight years, the Republicans’ reputation for fiscal conservatism has been shredded by record federal deficits.
Republicans, seeking to restore that reputation, say market forces, not U.S. taxpayers, should decide the fate of the auto industry. They charge the bailout would be no more than a downpayment on failure.
Senate brinksmanship kills a proposed $14 billion bailout for Detroit’s struggling “Big Three” automakers, so eyes turn back to the White House.
The Senate is due back in session at 10 a.m. Eastern for what could be a quick round of final recriminations.
Analysts say the most immediate hope for help for GMC, Chrysler and Ford is now the Bush administration, which could possibly decide to use financial bailout funding to help the massive car manufacturers — if there’s any money left.
Bush, who had resisted this idea in the past, is headed to Texas A&M University where he is due to deliver a commencement address. The White House said this morning it was willing to consider steps to avoid an auto apocalypse.
There’s finger pointing in every direction — the UAW union, recalcitrant Republicans, overreaching Democrats, and the lame-duck White House — but nobody seems sure what happens next for companies which say they are responsible for one out of 10 U.S. jobs.
Stock futures were down, indicating that benchmark U.S. indexes could open down about 3 percent or more amid a worldwide sell-off.
Meanwhile, whatever attention is left is fixed firmly on Illinois Gov. Rod Blagojevich, who is still in office three days after being charged with corruption in connection with allegations that he sought to “sell” the vacant U.S. Senate seat of President-elect Barack Obama.
Lots of people seem to want the man out — Obama described himself as “appalled” — but there’s no word on whether Blagojevich intends to resign. Obama, who has sought to distance himself from the Democratic governor, has no public events scheduled today.
Detroit CEOs drive their hybrid cars over to the House of Representatives for another serving of humble pie this morning. But it’s still not clear if they’ll get the $34 billion bailout they’re looking for, as several senators remained skeptical after yesterday’s testimony on that side of the Capitol.
Testimony before the House Financial Services Committee begins at 9:30 a.m.
President-elect Barack Obama will continue to fill out his Team of Rivals when he names New Mexico Gov. Bill Richardson as Commerce Secretary at a press conference scheduled for 11:40 a.m. EST For those of you keeping score at home, that means at least three members of his administration will be former Democratic presidential candidates — Richardson, Vice President-elect Joe Biden, and Secretary of State pick Hillary Clinton.
We can’t wait to see what he has in mind for Dennis Kucinich.
On the Hill, lawmakers will continue to weigh U.S. automakers’ restructuring proposals ahead of hearings later this week. The heads of Ford, General Motors and Chrysler, chastened from their skeptical reception last month, are driving from Detroit this time — and they’re confident they’ll get here in good shape.
“Our cars don’t have car trouble,” GM president Fritz Henderson said on ABC’s “Good Morning America.”
Treasury Secretary Henry Paulson will announce a new program to increase the availability of student loans, credit cards, auto loans and other forms of consumer credit, according to the Wall Street Journal. It will cost between $25 billion and $100 billion, using the $700 billion already allocated through the Troubled Asset Relief Program.
Major indexes dropped to their lowest level since 2003 yesterday and U.S. stock futures are pointing to another plunge today as investors worry about the fate of U.S. carmakers and the spectre of a prolonged economic downturn.
Just how bad is it? Well, here’s another sign of the impending apocalypse: the Labor Department reported at 8:30 a.m. EST that jobless claims are at their highest level in 16 years.