GM May Need More U.S. Job Cuts as Buyouts Fall Short

Aug. 3 (Bloomberg) -- General Motors Co. may have to cut more U.S. hourly jobs after an offer of buyouts and early retirements fell about 7,500 workers short of the reorganized automaker’s target.

The possibility of layoffs was disclosed today by Sherrie Childers Arb, a spokeswoman, in an interview after GM announced that more than 6,000 United Auto Workers members, or 11 percent of the hourly workforce, left the company on Aug. 1.

GM’s latest voluntary exits pushed the total of U.S. hourly workers leaving through buyouts and retirement offers to about 66,000 since 2006. The biggest domestic automaker is shrinking its workforce to match reductions including the shutdown of 14 U.S. plants and 3 warehouses by the end of 2011.

“It’s not surprising they didn’t reach their goal,” said Dennis Virag, president of Automotive Consulting Group Inc. in Ann Arbor, Michigan. With U.S. unemployment at 9.5 percent in June, “workers are more reluctant to accept a buyout because the prospects for other employment are more challenging.”

GM aims to eliminate 13,500 hourly positions in 2009, trimming that payroll to about 40,500 jobs, said Tom Wilkinson, a spokesman. Detroit-based GM began the year with about 61,000 U.S. hourly jobs and cut that total to about 54,000 at the end of April with buyouts and early retirements.

Moving Jobs

Any layoffs probably wouldn’t total 7,500, Childers Arb said. Some employees are likely to leave on their own or retire rather than relocate once GM shuffles work among its facilities, dropping jobs in some locations while keeping others, she said. GM hasn’t said where the job cuts will take place.

Hourly workers who took the buyout and retirement offers are receiving cash payments of $20,000 to $115,000 as well as $25,000 vehicle vouchers.

Chief Executive Officer Fritz Henderson is also paring the U.S. salaried workforce and chopping its eight domestic brands in half.

GM left a government-backed bankruptcy on July 10 as a new company whose largest shareholder is the U.S. Treasury. Losses at predecessor General Motors Corp. totaled $88 billion since the company last posted an annual profit in 2004.

To contact the reporter on this story: Katie Merx - in Southfield, Michigan, at kmerx@bloomberg.net

Source: Bloomberg.com

Posted: Knowledge Creates Power

Congressman Requests Moment of Silence for Jobs Lost from Cap

Congressman Requests Moment of Silence for Jobs Lost from Cap & Trade (Denied) | The FOX Nation

It's the Economy, Stupid

Tomorrow will likely bring more bad news for President Barack Obama on the number one issue for voters -- the economy. The Labor Department's monthly job report will almost certainly show unemployment topping 9%, with a couple hundred thousand more jobs lost in May.

It will get worse before jobs get better. Congressional Budget Director Douglas W. Elmendorf recently predicted that unemployment will continue rising into the second half of next year and peak above 10%.

Mr. Obama has an ingenious approach to job losses: He describes them as job gains. For example, last week the president claimed that 150,000 jobs had been created or saved because of his stimulus package. He boasted, "And that's just the beginning."

However, at the beginning of January, 134.3 million people were employed. At the start of May, 132.4 million Americans were working. How was Mr. Obama magically able to conjure this loss of 1.9 million jobs into an increase of 150,000 jobs?

As my former White House deputy press secretary Tony Fratto points out on his blog, the Labor Department does not and cannot collect data on "jobs saved." So the Obama administration is asking that we accept its "clairvoyant ability to estimate," and the White House press corps has let Mr. Obama's ludicrous claim go virtually unchallenged.

Still, there are limits to Mr. Obama's rhetorical tricks. Even he cannot turn job losses into real job gains. And he won't be rescued by stimulus spending.

Former National Economic Council Director Keith Hennessey made a persuasive case on his blog that the stimulus will be ineffective because the additional economic growth it spurs will come six to nine months later than it could have.

This is partly because, as the Congressional Budget Office estimates, only $185 billion (23% of a $787 billion stimulus package) will be spent this fiscal year. The government will spend an additional $399 billion next fiscal year. The balance -- $203 billion -- will be spent between fiscal years 2011 and 2019, long after the economy has turned on its own power and for its own reasons. In addition, much of the stimulus that went this year for tax cuts and transfer payments has been saved, not spent. (The national savings rate went from less than 0% to about 5%.)

If the Obama administration were more serious about growing the economy than just growing government, the stimulus would have been front-loaded into this fiscal year.

In addition, the claim made by Team Obama that every dollar in stimulus translates into a dollar-and-a-half in growth is economic fiction. The costs of stimulus reduce future growth. No country has ever spent itself to prosperity. The price of stimulus has to be paid sometime.

Any real improvement in the economy so far is more likely the result of the Federal Reserve expanding the money supply and the Fed and Treasury shoring up the financial sector.

But the Fed's actions are risky. Easy money and expansionary policies are not sustainable. We may soon be in for a bout of inflation unless the Fed soaks up much of the money it flooded into the system. The government is also likely to hamper private investment as it uses a vast amount of capital to finance its debt. And when the Fed stomps on its monetary brakes, as eventually it must, we'll get sluggish growth.

The irony for Democrats is that the Fed may hit the brakes in the run-up to the 2010 congressional elections or the 2012 presidential election.

It is becoming clear that the economy is now the top issue. Mr. Obama's presidency may well rise or fall on it. The economy will be his responsibility long before next year's elections. Americans may give him a chance to turn things around, but voters can turn unforgiving very quickly if promised jobs don't materialize.

That's what happened in Louisiana, where voters accepted Democrat Gov. Kathleen Blanco's missteps before Hurricane Katrina but brutally rejected her afterward because she failed to turn the state around.

Until now, the new president has benefited from public willingness to give him a honeymoon. He decided to use that grace period to push for the largest expansion of government in U.S. history and to reward political allies (see the sweetheart deals Big Labor received in the GM and Chrysler bankruptcies).

The difficulty for Mr. Obama will be when the public sees where his decisions lead -- higher inflation, higher interest rates, higher taxes, sluggish growth, and a jobless recovery.

By KARL ROVE - former senior adviser and deputy chief of staff to President George W. Bush.

Printed in The Wall Street Journal, page A13

About Karl Rove:  Karl Rove served as Senior Advisor to President George W. Bush from 2000–2007 and Deputy Chief of Staff from 2004–2007. At the White House he oversaw the Offices of Strategic Initiatives, Political Affairs, Public Liaison, and Intergovernmental Affairs and was Deputy Chief of Staff for Policy, coordinating the White House policy making process.

Before Karl became known as "The Architect" of President Bush's 2000 and 2004 campaigns, he was president of Karl Rove + Company, an Austin-based public affairs firm that worked for Republican candidates, nonpartisan causes, and nonprofit groups. His clients included over 75 Republican U.S. Senate, Congressional and gubernatorial candidates in 24 states, as well as the Moderate Party of Sweden.

Karl writes a weekly op-ed for The Wall Street Journal, is a Newsweek columnist and is now writing a book to be published by Simon & Schuster.

Posted:  Knowledge Creates Power

Obama Auto Plan Links Auto Emissions and Mileage Standards

President Obama plans to propose the first-ever national emission limits for cars and trucks as well as average mileage requirements of 35.5 miles per gallon by 2016 -- all costing consumers an extra $1,300 per vehicle.

WASHINGTON -- With two of Detroit's Big Three automakers no longer able to resist, the Obama White House will announce sped-up fuel economy standards that will require all auto-makers, including Detroit's foreign competitors, to increase fleet fuel efficiency by 5 percent per year starting in 2012. 

The new rules will require a fleet fuel efficiency standard of 35.5 miles per gallon by model year 2016, a big jump from the 2009 model year requirement of 25 mpg. A senior administration official said the changes (when compared to current pollution and vehicle use totals) will have the effect of removing 900 million metric tons of carbon dioxide from the air, taking 177 million cars off the road, and shutting down 194 coal-fired power plants. 

A senior administration official called the standards "tough and historic" and predicted it will be achieved with only minor modifications to vehicle and engine design. 

"You will see some changes," the official said, adding that "off-the-shelf" technology will allow most automakers to retro-fit their cars, light truck and SUVS "without dramatically changing them." 

For 2016 -- the final year new the rules will apply -- the fleet fuel efficiency standard for all domestically sold passenger cars will be 39 mpg. It will be 30 mpg for all domestically sold light trucks and sport utility vehicles. The average of these two equals a passenger car and light truck fuel efficiency standard of 35.5 mpg. The current requirements are 27.5 mpg for cars and 23.1 mpg or trucks. The tighter standards will first affect the 2011 model year for cars and trucks. 

An official said consumers will still have a wide-range of options on vehicle design and horsepower because "every single category of vehicle has to become more efficient." The uniformity of change, the official said, "will preserve" options for the vehicle-buying public. 

The administration will also impose the first-ever tailpipe emission standard for every class of vehicle -- a move that will bring regulations of fuel efficiency and pollution under one set of rules. The Department of Transportation and the Environmental Protection Agency will, for the first time ever, jointly monitor and enforce fuel efficiency and tailpipe emission standards. 

The standards are expected to increase the cost of a vehicle, on average, by $1,300 by 2016. A senior administration official predicted that cost would largely be offset by savings in gasoline expenses over the life of the vehicle. To calculate that savings, the administration predicts gasoline will cost $3.50 per gallon in 2016. 

Detroit's Big Three had long-resisted the kind of economy standards they will embrace at the White House on Tuesday. But with the government having poured billions into GM and Chrysler and with Chrysler in the throes of a government-supervised bankruptcy and GM facing the possibility of a similar fate by month's end, industry leverage appears to be minimal. Ford will also embrace the new rules, even though it has not received any federal bailout funds. 

"We are pleased that President Obama is taking decisive and positive action as we work together toward one national standard for vehicle fuel economy and greenhouse gas emissions that will be good for the environment and the economy," Ford said in a statement. 

The domestic automakers do not leave empty-handed, though. They won from the government a commitment to a single set of fuel and pollution standards until the 2016 model year. Detroit was far behind its foreign competitors on fuel efficiency and faced the frightening prospect of manufacturing cars to meet two sets of standards -- California's and the federal government's. 

The new rules will incorporate California's tougher standards but eliminate any market uncertainty -- a move one industry source compared to allowing Detroit's big three to walk into the future carrying one anvil instead of two. 

Obama will announce the moves Tuesday at a huge White House ceremony designed to underscore cooperation among automakers, environmentalists and the two governors whose states have most closely watched the fate of U.S. auto-making -- Republican Arnold Schwarzenegger of California and Democrat Jennifer Granholm of Michigan. 

California approved tougher fuel efficiency standards and was eyeing a June 30 ruling from the Environmental Protection Agency to enforce them. California ordered a fleet average of 35.5 mpg by 2016. The old federal standard sought that efficiency by 2020. 

The new federal standards will match California's -- but do so in a way that protects Detroit from having to produce one fleet of cars to meet the tougher California standard (embraced by 13 other states) while simultaneously producing another fleet that met the more lax federal standards. 

"It's going to be tough to meet these new standards," said one domestic auto source, "but there is industry buy-in behind having one national standard." 

The White House ceremony, FOX News has learned, will attract the following auto heavyweights: 

Frederick "Fritz" Henderson, CEO of General Motors 

Robert Nardelli, CEO of Chrysler 

Allan Mulally, president and CEO of Ford 

Ron Gettelfinger, president of the United Auto Workers. 

Representatives from Toyota, Honda, Mazda, Nissan, Volkswagen, Mercedes and BMW are also expected to attend. 

The White House said some of the nation's top environmental groups will also appear to endorse the policy changes.

By Major Garrett - FOXNews.com

Green Hell

Steven Milloy, author of Green Hell says that more people will die every year from Obama’s new car plan than the total casualties we’ve had in the Iraq War

Posted:  Knowledge Creates Power

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