General Motors (G.M.), the largest car constructing company of the USA requested for federal aid again. $ 12 billion in loans, which brings the total loan at $ 30 billion. The company needs this last loan to carry it through the biggest reorganization in its history and especially to cover the continuing losses.
G.M. which earned their last profits in 2004 will end 2009 with $14 billion shortfall, but according to the restructuring plan they are going to improve to a $6.6 billion surplus by 2012. The restructuring plan also tells us that the losses will shrink in the next three years, due to savings that will contain cutting 47000 jobs worldwide and closing 14 plants. G.M. also has to negotiate with the United Automobile Workers union and the bondholders to reduce costs further.
C.M. is not only counting on saving but also on a steady recovery in car sales. On the other hand the US vehicle sales this year are on their lowest point in more than 25 years and not many industry analysts share G.M.’s optimism for a recovery.
Not only the union and bondholders are negative about the restructuring plan also Moody’s is, they said there is a 70 percent probability that one or both companies (G.M. and Chrysler) would have to file for bankruptcy protection.
The government is expected to review the plans by the two companies in the next week.
G.M. and Chrysler will face political opposition from some quarters when they try to win the task force with their plans.
I think that the US government has to support G.M. and give them the loan under certain conditions because otherwise everybody loses. All over the world employees lose their work, the government will lose all the loans they have given to G.M.
When the government gives G.M. the loans they asked for, there have to be some conditions. The government has to look close to the financial situation of G.M.
I also think that the government isn’t going to accept that G.M. is closing so many plants and fire so many employees, resulting in a big unemployment. So I think G.M. has to search other methods to save money and reduce costs.
Source: http://www.nytimes.com/2009/02/19/business/19auto.html?ref=economy
zondag 22 februari 2009
US unemployment rate reaches 7.6%
All over the world, the crisis has negative consequences. Let us think for example about the US housing crisis and the interest rate that hasn't been this low for years. But also the employment wasn’t safe from the economic crisis…
We could say that the unemployment reached its highest level since 1992. Official figures tell us that the rate rose from 7,2% in December to 7,6% in January. Due to the recession which started in December 2007, 3.7 million jobs were lost in the United States. Almost half of those jobs were lost in the last three months. This has several reasons. At the beginning, the auto sector crossed out 207,000 jobs. Also other sectors, like construction firms, the hospitality sector, professional and business services, have problems and cut a lot of jobs. According to economists, the situation is worse than they expected.
According to the president of the US, Barack Obama, the figures are quite alarming and demand some action. He wants to do something for all the people who lost their job, so he urged the Congress to pass his economic stimulus package without delay. He really wants to make the economy better during his presidency.
My opinion is that this situation is very awful and serious. Every job that gets cut, is one too much. But I think it’s very difficult to make this situation better, because the economic crisis is responsible for this situation and the period of recession has to repair itself. We can’t do a lot of things to make it better, I think we have to wait and be patient.
I really have confidence in Barack Obama. I think he will do all he can to make this situation better.
Source: http://news.bbc.co.uk/2/hi/business/7874955.stm
We could say that the unemployment reached its highest level since 1992. Official figures tell us that the rate rose from 7,2% in December to 7,6% in January. Due to the recession which started in December 2007, 3.7 million jobs were lost in the United States. Almost half of those jobs were lost in the last three months. This has several reasons. At the beginning, the auto sector crossed out 207,000 jobs. Also other sectors, like construction firms, the hospitality sector, professional and business services, have problems and cut a lot of jobs. According to economists, the situation is worse than they expected.
According to the president of the US, Barack Obama, the figures are quite alarming and demand some action. He wants to do something for all the people who lost their job, so he urged the Congress to pass his economic stimulus package without delay. He really wants to make the economy better during his presidency.
My opinion is that this situation is very awful and serious. Every job that gets cut, is one too much. But I think it’s very difficult to make this situation better, because the economic crisis is responsible for this situation and the period of recession has to repair itself. We can’t do a lot of things to make it better, I think we have to wait and be patient.
I really have confidence in Barack Obama. I think he will do all he can to make this situation better.
Source: http://news.bbc.co.uk/2/hi/business/7874955.stm
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