Chrysler Exec: Failure Could Spark Depression
Associated Press
Transcript
the heads of the big three automakers are making another Pitch to Congress for financial lifelines they're traveling here in hybrid Cars not using corporate jets like last time their financial desperation is underscored by dismal sales Last month Chrysler sales were down 47 compared to a year ago gm sales dropped 41 fords fell 3% the cost of a bankrupcy or loss of the Us manufacturing of automobiles is a Far greater cost than a loan for a couple of years as a Bridge of working capital to get through this tough pth Chrysler says it needs a $ billion loan per year's end to Keep going gm says it needs $ billion just to get through this month all told The Three automakers are asking Congress for $4 billion in loans that is 9 billion More Than originally discussed and each has submitted What can only be described a Survival plan this one is Ford in it each describes specific steps they plan to take to get on the road to economic viability gm says it Will Cut up to 30,000 Jobs eliminate Nine Plants and Slash 1750 dealerships the future of Pontiac Hummer Saturn and know are unclear Ford Will accelerate plans for hybrid gas Electric vehicles It's Looking to sell Volvo and has already announced plans to Cut about 10 of North American workforce and Chrysler plans to produce its First full function Electric vehicle in 2010 and says it is aggressively pursuing strategic alliances and partnerships all this Will come Under very Close scrutiny here on capital Hill We want to see a commitment to the future We want to see a restructuring of their approach that they have a New business model New business the United aers Union meile is to Let Look at the Millions of Jobs that will be Lost in this country If We lose this Industry the big three ceos can expect some very tough questions the next two days they try to sell Congress on the Need For an Industry baer the associated press capital Hill
Dec. 3: Dow Closes Up 173 Points
Associated Press
Transcript
wall street has withstood another stream of bad economic readings shaking off its disappointment and closing sharply higher after an erratic session the major indexes fluctuated throughout the day as investors shuttled between pessimism about a protracted recession and optimism that the nation might soon see relief analysts largely believe that much of the bad news is already priced into the market but they also warn that the market could turn lower as november retail sales and employment reports are issued thursday and friday well this remains a market driven by fear and whether the fear is with the institutional investors who are uh you know by commanded by their investors to get out of positions because people want to pull their cash out and it's not really the institutional traders fault it's really the consumer's fault it's us we're scared we hear bad economic news every day and we should because you know the economy the fundamentals are not good right now the dow jones industrial average rose 173 points 8 592 broader indexes also closed higher the standard poor's 500 index rose 22 to 871 the nasdaq composite index rose 43 points to 1492. the market is now closed higher in seven of the past eight sessions winning streak was broken only by monday's big decline but took the dow jones industrials down nearly 680 points mark hamrick the associated press
Money Minute: Beige Book, Online Sales, Yahoo
Associated Press
Transcript
AP money minute the federal reserve's new snapshot of business conditions suggests the economy is sinking deeper into recession the new report known as the beige book says economic activity weakened across all Federal Reserve Districts while the FED didn't use the word recession the National Bureau of economic research declared on Monday what many Americans already knew in their bones that the country had been suffering through one since last December online Merchants finally got some relief with the unofficial start of the holiday shopping season new surveys out today show retailers took in $846 million on Cyber Monday and saw a 10% increase in web traffic Yahoo is plugging its Internet Radio Service into cbs's webcasting Network in the face of dramatically higher online royalty fees Yahoo's Retreat from operating a standalone service makes it the second major website to Hitch its radio operations to CBS AOL radio hooked up with CBs in June I'm Mark hamri with ap money minute
UAW to Renegotiate Labor Terms, Modify Jobs Bank
Associated Press
Transcript
number one we are going to revise the 2010 Viba payment schedules and we will be be bringing in a Lazard and melamine to assist us with that that means we're simply going to defer those payments until a later date at a guaranteed interest on the jobs bank we will suspend the jobs bank program we will work out the mechanics with the companies the vice presidents will so notify the companies today and begin that process we are well aware of the number of workers that we have out there that are impacted and perhaps some of the actions future actions at the company take will put additional stress in this area however we think that it's a responsible thing for us to do item number three is we will immediately engage our elected bargaining committees to work with our vice presidents and their staff we're going to be reviewing the agreements and we're going to consider modifications any modifications that we make in those agreements we will take back to our membership for ratification
US Automakers Issue Retooled Case for Bailout
Associated Press
Transcript
humbled and fighting for survival Detroit's big three are pledging to reduce car lines cut workers and curb executive pay in return for a federal Lifeline General Motors is asking for an immediate $4 billion and as much as $18 billion overall the company says it may go bankrupt by January 1st without an infusion of money and warns it could drag the rest of the Domestic Auto industry down with it Chrysler says it needs $7 billion by Year's End Democratic leaders have said they might call Congress back next week to pass an auto bailout but only if the automakers plans show that The Big Three are viable in the long run with Washington's help we want to see a commitment to the future we want to see a restructuring of their of their uh approach that they have a new business model a new business plan there has to be a com a compensation reform and not only has to be viable that is there's some lasting good to this but also that there's a count ability Ford is in much better shape than GM and Chrysler it's asking for A9 billion standby line of credit but says it doesn't expect to have to tap the funds unless GM or Chrysler go bust its plan also predicts the company would break even or turn a profit in 2011 despite the industry's predicament a for dealer remains optimistic I like the fact that it's going to let the automobile companies let America know what plans they have and reinforce their strength their capability and what they've already done to resize and restructure to show them that these companies are worldwide competitive companies and on the auto line the reaction is mixed any time you go through change it takes suffering sometime it takes changes it's just going to take a little time to go through what we're going through until you see all the fine print and understand what all the conditions are you're not going to be fully aware or in the know if you will of what actually they're really saying all three plans Envision the government getting a stake in the auto companies that would allow taxpayers to share in future gains if they recover the CEOs of the three companies also plan to travel in fuele efficient hybrid cars when they come to Washington for hearings later this week meanwhile the UAW has summoned local union leaders to an emergency meeting in Detroit Wednesday to discuss possible concessions too Mike graia the Associated Press
Automakers Ready To Deal
CBS
Transcript
we begin with a story that's making Front Page News across the country Auto union leaders from around from across the country are meeting an emergency session today in Detroit to discuss concessions that union workers might make in order to help the auto companies as they seek a government bailout CBS News correspondent Dean Reynolds is in Detroit good morning Dean good morning Maggie well with the U.S auto makers staring into the financial Abyss the time has come for the Auto Workers to make the kinds of concessions they've always resisted chastened by a stinging rejection for help from Congress the Auto industry is trying once again to prove it deserves the help laying out specific plans to economize at GM which says it needs four billion dollars by the end of the month to stay afloat it means trimming jobs dealerships and selling or consolidating Saab Saturn and Hummer while shrinking Pontiac at Ford the plan is to invest 14 billion dollars in new technology and possibly selling off Volvo at Chrysler where they want 7 billion by the end of this month the plan is to slash employee benefits cut company Health Care contributions and demand greater productivity from everybody but industry analysts say something else has to happen all this isn't going to really work without getting some kind of flexibility from the UAW the anxiety along the assembly line is likely to deepen soon today the United Auto Workers will discuss reopening their 2007 contract paying more for their health care and possibly eliminating the jobs bank an institution that ensures workers get paid even after getting laid off the reality of the situation is these companies could go bankrupt and then the union is powerless so they have to give concessions and with U.S Auto Sales off nearly 40 percent last month the concessions will have to hurt Maggie cbs's Dean Reynolds in Detroit thanks Dean Fritz Henderson is the Chief Operating Officer for General Motors and he joins us this morning from company headquarters in Detroit good morning Mr Henderson good morning Maggie I know that GM is asking Congress to approve 18 billion dollars in federal Money 4 billion of it immediately yesterday you said there is no plan B and critics would ask how is that possible the economic conditions that you blame for your problems didn't happen overnight how is it possible that a bailout is the only solution well we outlined in our plan what was necessary in the month of December and someone asked me you know why and the answer is because it was necessary and that's what we believe we need in order to be able to run our business through the month of December if you look at what's happened through this year the way I would characterize it is we've seen continued not only continued pressures in our business but the pace of deterioration is actually accelerated so the weakness in the first quarter more weakness in the second quarter significantly more weakness in the third quarter October November were just the worst levels we've seen post World War II so uh you know if you looked at the this this year it's it's been a very very difficult year you know we've been planning our business through the year based upon different levels of volume our business is very volume sensitive and frankly the bottom has fallen out of volume we know that that November was terrible for you and for the other two uh big three automakers your sales were down 41 percent but I'm wondering and I know Congress will ask you is the economy in your view the only culprit or does management take some of the blame for this and if so what will you change a couple things first of all I think there are problems in both areas obviously one the economy which is the we actually in a layout in our plan a year ago versus today so that so that at least people can understand how our business has been impacted by the most recent economic developments but frankly like any business we've made mistakes and it's our job to make sure we correct them and fix them and the the plan that we've submitted Maggie is very comprehensive in the measures to address not only product and Technology cost our balance sheet and the sacrifices that we need from management and leadership team speaking of sacrifices I'd like to show some of the concessions that you were willing to make if Congress approves this they include one dollar salaries for your CEO and cutting the executive pay of seniors but in half you would also cut 31 000 jobs by 2012 and you'll reduce the number of dealer locations by 1750 by 2012. so even if you get the bailout this is this is not good news for GM GM employees and the Auto industry that's true what we did is we developed a plan that would allow us to be robust and pay back the loans even in very difficult with a very difficult set of economic assumptions we have to work with the environment where we're dealt if you will and as part of that therefore we need to size our company much differently to address this kind of difficult economic environment well certainly everyone is pulling for the Auto industry Fritz Henderson we thank you for your time Maggie thank you foreign
Markets Get Much Needed Lift
CBS
Transcript
more steep job cuts are in the daily dose of bad news on wall street the private sector slashed a quarter million jobs in november the worst drop in seven years the cuts were spread over all major industries at companies both large and small the stock market brushed it off the dow gaining more than 170 points in a late rally with unemployment up and consumer spending down the part of the economy known as the service sector shrank far more than expected last month that includes everything from retail to tourism and accounts for about 80 percent of the economy in fact out of 18 industries only health care reported growth that's backed up by the latest survey from the fed showing that nearly every area of the country is suffering a drop in sales manufacturing and housing on top of all that traders were rattled by news about their blackberries which are hugely popular on wall street as americans cut back on their spending that includes these smart phones and the manufacturer is taking a hit research in motion makes the blackberry and said third quarter profit came in worse than expected and that makes investors even more worried about thursday's report on november retail sales and what that signals for christmas we may have to put santa's face on a milk carton he may have been kidnapped this year if you think it's bad now a top executive at chrysler says if one of the big three collapses it could send the economy spiraling into a depression which is why wall street will be listening closely to the bailout discussions on capitol hill alexis christopher cbs news wall street
Dow up 270; Big Three sales plunge up to 47%
CBS
Transcript
the stock market snapped back from yesterday's giant loss the Dow Jones Industrial Average surged 270 points while the NASDAQ Composite jumped more than 50. the market managed to stay on the upside even after dismal news from The Big Three automakers Ford reported November sales plunged 31 from a year ago GM was down 41 percent and Chrysler dropped 47 percent the car Executives delivered road maps to Capitol Hill today on just how they plan to get back on track if Congress gives them 25 billion dollars to tide them over the restructurings include cuts and CEO salaries and dropping perks like corporate jets with about three weeks to go before Christmas at least one company is already celebrating a win Microsoft says it's Xbox 360 had record-breaking sales on the weekend after Thanksgiving and it's on track to beat Sony's Playstation 3 by a three to one ratio also in the tech World Nokia wants to be a contender with its newest smartphone the n97 as a touch screen like the iPhone and a keyboard like a Blackberry plus internet access it goes on sale next year that's your money watch log on to cbsnews.com for more business headlines at the New York Stock Exchange I'm Alexis christopherus
UAW Offers Help To Big Three
CBS
Transcript
there is no plan B that's the word from Auto Executives as they prepare to plead with Congress for a big bailout GM Ford and Chrysler are asking for as much as $34 billion to keep America's Auto industry in gear in exchange for the cash the big three are promising to slash costs fold Brands and Rush more fuele efficient cars onto dealer Lots tomorrow lawmakers will Grill the CEOs about their future business plans and they'll question the head of the United Auto Workers Union about how his group can help cut costs union leaders are going to work with the automakers to revise their labor deals and let the big three delay payments they were scheduled to make into a health care fund for retired workers the union is also ready to give back some benefits including a program that lets laid off workers collect most of their paychecks but the union President says it's still unfair that the Auto industry had to promise changes to get a bailout when Wall Street didn't I'm having a little problem myself understanding why there's a double standard here but we accept it and we'll play by those rules even if the big three get their multi-billion doll bailout there will be widespread job Cuts in the Auto industry as Detroit tries to become Greener and leaner Susan Roberts CBS News Washington
Your Bailout
CBS
Transcript
these days everyone's getting a bailout the government the automotive companies so how much would you need for your bailout how much would you ask for your own personal bailout the my own personal bailout well wouldn't we all like to have some money to bail us out 25,000 would be good 200,000 10 million I have no idea a million should work for me I would like $63,000 give me one second I'm thinking and I'm thinking the calculate the calculations are going on 25 Grand 25 Grand yeah you do please I just need lots of little $20 bailouts with t-shirts $500 $500 yeah that's it that's it500 today $1,000 2,000 what would you do with that money I bu B gift for my wife she deserved it I did something terrible to her so like a little gift well I don't think so we need bailout money as yet but we would definitely appreciate something coming in for the small business I was thinking about it the other day and I need about 30,000 30,000 what would you do with that I would pay off her student loan and get ready to pay for next year I think um about a100 thou no $60,000 would would probably serve me best you almost said 100,000 I almost said 100,000 but then I thought I was being greedy I don't want to be too greedy 30 million 30 million yeah what would you do with all that $30 million go travel around the world for all my life how much do you need for your bailout yeah I hear you me too kid me too not a penny I work very hard Hand by hand everybody should be working for their wages I would say 20 20 grand would be uh would be a good sum 20 grand grand 20 grand uh I'd buy weed with 20 grand spend it all on weed $10 million 10 million yeah what would you do with that I would have take a nap I'm long overdue for a nap no I don't really need a bailout I don't think yeah I don't think I believe in bailouts but I don't know maybe I you don't believe in bailouts guess what what they're real did you just wink at me yeah but in a funny form