Seven corporate bosses and a experienced GE executive paint a dire picture of what lies ahead

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The CEOs of some of the realm’s largest corporations didn’t strait the National Bureau of Economic Research’s Dec. 1 pronouncement to realize the country has been in a severe downturn for months. That was clear in succession Nov. 14, when more than a twelve top executives sat prostrate to discuss the economy at BusinessWeek’session CEO Summit in Palm Beach, Fla., hosted by means of John K. Castle, presiding officer and CEO of private equity firm Castle Harlan. Moderated by BusinessWeek.com Editor-in-Chief John A. Byrne, the roundtable exchange included FedEx (FDX) Chief Fred Smith, Chrysler CEO Robert Nardelli, and former GE (GE) Vice-Chairman Dennis Dammerman, a recent appointee to AIG’s (AIG) council. Excerpts follow.

So how bad is the economy now?

FRED SMITH, FedEx It is by far the worst I’ve seen in the 35 years I’ve been in business. It’s just gone right off the cliff. For retailers, I slip steady’t think there’sitting going to be any Christmas to speak of. Some of our high-end retailers reported sales prostrate 25%. Wal-Mart’session (WMT) doing well, limit they’re about the sole one. Traffic across the Pacific has been into disrepute for some unoccupied time. Suppliers’ provisioning for Christmas starts in June and July on the irrigate. The barely good thing is that grant that anything turns this round, it’ll be pretty quick, since inventories are at such incredibly low levels. But I’d be very surprised if anything started to office around judgment the middle of next year. There’s just not one juice out there.

How would you judge the polity’sitting handling of the juncture?

ROBERT NARDELLI, Chrysler There’s a difficult number of second-guessing on that which [Treasury Secretary] Hank [Paulson] is doing. We could certainly ask if Lehman certainly had to go down. It’sitting a tragedy to have let that company go. Saving it would have provided a little more confidence in the system. Its loss seemed to add to the anxiety in continuance Wall Street—and moved it to Main Street. I think it contributed to our 6.5% unemployment rate, which could go to 10%-plus. As for consumer confidence, there’session an unprecedented drop, certainly in our industry. Even with offensive resizing, we be possible to’t keep up with it as we haven’t seen the bottom. I think we’re going to visage historic challenges of epic adjust. I hope we’re able to hold it at a recession.

RALPH DE LA TORRE, Caritas Christi Health Care Health care has been holding its breath. We live and die on the tax-free bond market, and in accordance with duty now we’re dying. Projects are being postponed. All the wares that freedom from disease carefulness buys and the companies and people it touches—from imaging to pharma to physicians—are about to dive off the precipice. The connection markets are closed tight. Until they reopen, we’re going to have a distended problem. I think there’s going to be a pretty substantial consolidation in health care. As many as 20% of hospitals could accept the offer. There’session going to be no first-rate spending for at minutest the next year or two.

MILES WHITE, Abbott Laboratories (ABT) [For pharma], it depends. If you’re forward a drug that’s reasonably discretionary, you might cut back as a patient. But suppose that you’re on a drug for a chronic problem, you’re not cutting back. If you’re a cancer patient, you’re not cutting back. If you’re a rheumatoid arthritis patient, you’re not keen back. I wouldn’t call [our position] severe.

What about the utility business?

LEWIS HAY, FPL Group (FPL) A lot of people think demand for electricity is inelastic. It’sitting not. Our customers are cutting back, and they’re not paying their bills, either. Probably 25% of our customers are past due. Normally, it’s more like 15%. Another issue is access to capital. We had plans to beset more than $7 billion this year, and we’ve already divide back to about $5 billion. With such a shortage of access to capital, how are we going to get all these alternative energy projects going?

What last will and testament it take to engender the economy going again?

DENNIS DAMMERMAN, former GE vice-chairman We’ve got to get consumers and transaction spending again. I think we’ve proved over the years that investment tax credits and faster depreciation augment equipment spending. For consumers, confidence is key. And while I don’privately agree with much of what Barack Obama wants to do, I think that for a great chunk of our consuming the world, he has improved that confidence. I hope this enthusiasm doesn’t fall.

How long or severe confer you compass the recession will be?

Even on the supposition that we start growing again, it’s not going to be a full-employment kind of growth. We’ll still see the misery index climb. It’ll take at least until 2010 to flush it out of the system.

TIMOTHY MANGANELLO, BorgWarner (BWA) We’re preparing for nothing good until mid-2010. If things get uglier, it’s possible it won’cheek by jowl improve by then. For us, a global player, the cost pile in the U.S. has to improve. Health-care costs are too high. Tort reform is also difficult. And business taxes are in addition high.

FRED HASSAN, Schering-Plough (SGP) The key is inflation. If inflation stays under control and confidence returns, we’ll come back early. If inflation starts to shout in mid-2009 and after that, we have a problem. It might start to look like the mid-1970s.

New figures may show 300,000 layoffs for the month, and as luck may have it 400,000

By Peter Coy

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The U.S. economy is bleeding jobs faster than it has from that time the early 1980s, and perhaps since the mid-’70s. Economic forecasters are very lately projecting that on Dec. 5, the government will announce the loss of more than 300,000 jobs in November—mayhap more than 400,000. December is shaping up to subsist a heavy month as well. The rate of layoffs should slow next year as relating to housekeeping stimulus begins to kick in, but modest monthly declines could continue conveniently into 2010. "Let’s get real. These numbers are horrible," says Ellen Zentner, senior U.S. economist for Bank of Tokyo-Mitsubishi UFJ in New York.

A burst of negative statistics from purchasing managers and other sources has caused economists to stultify their outlooks in the past few days. The median calculate in a Bloomberg survey as of Dec. 3 was a decline of 330,000 in nonfarm payrolls in November, but that included divers forecasts that had not been updated to reflect the latest spate of unwelcome news. The most recent projections are among the gloomiest, ranging as high as 470,000 in job losses.

These statistics are far worse than anything felt in the past two recessions, in 1990-91 and 2001. For comparison, the U.S. economy not to be found 431,000 jobs in May 1980, which was the rout month of the back-to-back recessions of 1980-82. If it’s any comfort, November is highly unlikely to be worse than the recession month of December 1974, at the time that the dispensation lost a staggering 602,000 jobs, according to the Bureau of Labor Statistics.

One factor that wish most likely calculation for a big share of the drudge at jobs loss is the tepid shopping season. The government’s seasonal adjustment attempts to filter out ups and downs in employment caused by seasonal factors like festival shopping. So then retailers frolic up employment smaller quantity than they have in the past, it shows up as an outright employment decline in the seasonally adjusted data, notes Bank of Tokyo’s Zentner.

Zentner has one of the most numerous bearish outlooks among Wall Street economists, predicting a decline of 470,000 jobs in November. Some others aren’confidentially far behind. Deutsche Bank Securities (DB) predicts a decline of 425,000 jobs, time National City (NCC) is at 418,000 and ING Financial Markets (ING) is at 400,000. "Things in this quarter look downright ugly," says Torsten Slok, a Deutsche economist in New York.

Economists marked down their forecasts subsequent to getting two key reports from the Institute for Supply Management, a group of purchasing managers. Their employment index for the service sector issued on Dec. 3 was the lowest from the time of its 1997 inception, while its manufacturing agency index issued on Dec. 1 was remote to the levels of the 1990-91 recession. Another bearish signal was a report on initial claims for unemployment insurance, which hit 543,000 the week of Nov. 14, which is the week the survey of November employment is conducted. That claims figure is consistent with a monthly job loss of well over 300,000.

While December is a lost cause, 2009 could start to look good in a higher degree as regard fixed measure cuts and other government pump-priming measures start to work. Zentner says the measures "could go real far in pulling the dispensation out of its current fall through." But she notes that employment is a lagging indicator, meaning that even if economic output starts growing again, job rolls could continue to shrink. Case in point: Even though the ultimate recession technically ended in November 2001, the economy was still losing jobs as late similar to August 2003.

The interval between the November Presidential power to choose and the inauguration in January is particularly ticklish, says Deutsche’session Slok, because the economy isn’confidentially getting as much stimulus as it needs in the power vacuum. Says Slok: "A art response is graceful more and more urgent."

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In a bid to inject some much-needed life into a ceremony that, traditionally, is one of the stuffiest awards shows going, the Grammys tried something new Wednesday darkness.

“The Grammy Nominations Concert Live!! — Countdown to Music’s Biggest Night,” hosted by Taylor Swift and LL Cool J, was an attempt to blend star-studded performances with the announcement of a handful of nominees (of the 110 categories the Grammys recognize, a lake six were announced on air).

Broadcast live from the Nokia Theatre in Los Angeles, across the street from the Staples Center, where the 51st annual Grammy awards will be distributed Feb. 8, the evening was a bid welcome change of pace from the prevalent, bleary-eyed aurora news conference and served to highlight the opening of the new Grammy Museum.

But it’sitting the multitude of fresh faces littering the list of bestow hopefuls this year that’s most worth celebrating.

The 2007 batch of astonishingly haunch Grammy contenders was nay fluke; after decades of lining up the usual suspects (U2, Bruce Springsteen, et al) and handing out trophies, the Academy of Recording Arts and Sciences has, last year and this year, shaken things up by incorporating many in vogue and plane a few cutting-edge acts into the roster of contenders. Put it this way: the 51st annals Grammys ceremony is going to be vigorous interesting.

Lil Wayne is having a very good year; the multiplatinum rapper led the clan with eight total nominations, including a nod for album of the year.

British rockers Coldplay were perpendicular astern him with seven nominations, while rappers Jay-Z and Kanye West and R&B star Ne-Yo each earned six nods. Alison Krauss, Robert Plant, John Mayer, Radiohead and Jazmine Sullivan received five nominations each, and Adele, Danger Mouse, Eagles, Lupe Fiasco, George Strait and T.I. each received four nominations.

In the classical-music category, Seattle-based Origin Classical Records received two nominations, for best orchestral performance and best classical contemporaneous composition. In both cases, the nominated artist is Los Angeles-based Chris Walden. The label is a division of Origin Records, known for jazz recordings.

Mariah Carey opened the show through a gay Christmas sing — “Christmas (Baby Please Come Home)” — while the other artists took turns providing fresh takes on songs inducted into the Grammy Hall of Fame.

Over the process of the 60-minute broadcast, Swift (holding on as antidote to much loved life through Brenda Lee’s “I’m Sorry”), Céline Dion, Christina Aguilera, the Foo Fighters (whose grunged-up rendition of Carly Simon’session “You’re So Vain” was eye-opening), B.B. King and Mayer each graced the Nokia Theatre stage.

Seattle Times staff contributed

to this report.

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GEORGETOWN, S.C. —

Tiny wooden cabins line the dirt road once known as Slave Street as it winds from one side Friendfield Plantation.

More than 200 slaves lived in the whitewashed shacks in the in good time 1800s, and some of their descendants remained for else than 100 years after the Civil War. The last tenants abandoned the hovels about 30 years ago, and on a level they would have struggled to imagine a distant daughter of the plantation one day calling the White House home.

But a historical line be possible to be drawn from these Low Country cabins to Michelle Obama, charting an American family’session improbable journey from some side slavery, segregation, the civil-rights movement and a historic presidential election.

Their documented passage begins with Jim Robinson, Michelle Obama’s great-great-grandfather, who was born about 1850 and lived as a slav, at least until the Civil War, on the sprawling rice plantation. Records show he remained on the estate in the rear of the war, working as a sharecropper and living in the wise slave quarters by his wife, Louiser, and their children. He could neither understand nor write, according to the 1880 census.

Robinson would be the last illiterate branch of Michelle Obama’s family tree.

Census records show each people of the same age of Robinsons became to a greater degree educated than the greatest, with Michelle Obama eventually earning degrees from Princeton University and Harvard Law School. Her older brother, Craig, also earned an Ivy League education.

Barack Obama’s campaign hired genealogists to research the family’sitting roots at the onset of his presidential summon, but aides largely have kept the findings secret. Genealogists at Lowcountry Africana, a research center at the University of South Florida in Tampa, scoured documents to clown together a 120-page description, said project director Toni Carrier. She said the center signed a confidentiality agreement and is not allowed to disclose the tools and materials publicly.

However, in his now-famous speech in succession mill-race for the time of the primary, Barack Obama, whose become a father to was from Kenya, stated he was “married to a black American who carries in the inside of her the blood of slaves and slave owners.”

Obama aides refused to discuss the report or allow Michelle Obama to be interviewed about her ancestry. She has related she knew little about her family tree preceding the campaign, but census reports, property records and other historical documents show her fatherly ancestors bore witness to one of the most shameful chapters in U.S. history.

In January, when the Obamas move into the White House — a mansion built partially by slaves — as the country’s first African-American first family, Michelle Obama will embark on a life her great-great-grandfather never could have envisioned.

Living in slave shacks

Little is known about Jim Robinson’s life at the Friendfield Plantation, beyond that he worked in the riverfront rice fields after the Civil War. Local historians put on’t know how or when he came to Friendfield, but census records indicate one as well as the other his parents were born in South Carolina. The coastal Carolina incorporated town often is referred to viewed like the African-American Ellis Island because of the people slave ships that docked along its shores.

A map from the early 1870s, when Robinson was living on the plantation, shows three parallel rows of slave cabins, harvested land with 10 to 13 buildings along Slave Street. By 1911, merely 14 were standing.

Five individual cabins remain today. With their massive fireplaces and wood-plank walls, eddish. tells a story about slave life on the plantation.

The corpuscular shacks, only 19 feet deep, housed several families at once, aforesaid Ed Carter, who oversees the property. Large stone fireplaces were used for cooking and heating. Attic space beneath the gable roof offered a residence for extra people to sleep.

The plantation’s former owner, Francis Withers, built a “meeting house” towards slaves on the estate before 1841, and the South Carolina Conference of the Methodist Episcopal Church assigned a preacher there. A fire destroyed the church in 1940.

By the time Withers died in 1847, the family had expanded Friendfield to include six plantations and more than 500 slaves. At the height of the rice trade, Friendfield was one of the most lucrative plantations in the area, Carter said.

In his will, Withers, educated at Harvard University, provided for the care of his slaves, including the upkeep of the church and a stipend for the preacher. He also requested his slaves exist treated with “great kindness and be fed and clothed.”

He left $10,000 to lever added slaves to work the plantation and provided monetary incentives notwithstanding his surviving relatives to keep his “Friendfield gang of slaves” as a group and not dash to pieces up families.

Respect for learning

The plantation’session prosperity faded after the Civil War, and the parents and children began selling right hand the property in 1879, according to land records. Jim Robinson, like many former slaves, continued to live steady the farm.

It’session unclear when he died, but topical historians think he is buried in an unmarked sober in a slave god’s acre that overlooks the old rice fields on the edges of Whites Creek.

Among Jim Robinson’s surviving children was Fraser Robinson, Michelle Obama’s great-grandfather. Born in 1884, he went to moil as a houseboy for a local line of ancestors before his 16th birthday. Census records show he was illiterate as a teen but had learned to understand and set down by the opportunity he had children.

As an adult, he worked as a lumber-mill laborer, shoe repairman and newspaper salesman. He registered for the select during World War I but was turned down because he had lost his left arm, military records show.

Fraser Robinson married a local woman named Rose Ella Cohen and had at least six children. Described by a family friend while an knowing man who wanted his children to be well-read, he ever brought home his extra copies of the “Palmetto Leader and Grit,” a infamous gazette that was general in rural communities across the country.

“He used to make his children read those newspapers,” said Margretta Dunmore Knox, who pacify lives in Georgetown and attended the same church as the Robinsons. “Maybe that’s in what state they became in the same manner smart.”

His eldest son, Fraser Jr., was born in 1912 and graduated from high school. Census records from 1930 discover that 18-year-old Fraser Jr. was living at home and acting at a sawmill after earning his diploma.

At the time, Georgetown, a coastal town approximately one hour’s drive north of Charleston and the state’s third-oldest city, was split along racial lines. Basic human rights that blacks had known after the Reconstruction era disappeared as the Deep South sank into the Depression and segregationist ways.

The power of “Enough”

As Georgetown’sitting economy crumbled, Fraser Jr. headed north to Chicago in search of employment. There, he met and married LaVaughn Johnson. Their son Fraser Robinson III — Michelle Obama’s father — was born in 1935.

Although they never attended college, Fraser III and his wife, Marian, made education a top priority for their two children. Both would lackey Princeton and earn postgraduate degrees from prestigious universities.

Fraser and LaVaughn Robinson lived on the South Side of Chicago for part of Michelle’s non-age, before retiring and moving south. After returning to Georgetown, the couple joined the AME Bethel Church, founded by freed slaves in 1865 and the oldest black body of christians in the city. The couple sang in the choir and built a large circle of friends, Knox said.

Michelle Obama returned to the same church in January while campaigning for her husband in the South Carolina presidential radical. Addressing a packed hearing that included at least 30 descendants of Jim Robinson, Obama talked about the need for change in the confident voice of a distant daughter of slavery.

“Things get better when thorough folks take action to make change happen from the bottom up,” she said. “Every greater historical significance in our appropriated time, it has been made by folks who related, ‘Enough,’ and they banded together to offer for consideration this country forward — and at this time is one of those times.”

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Twenty years after he killed three teenagers in a drunken-driving misfortune, Reggie Rogers, a former NFL first-round drawing pick and athlete at the University of Washington, was charged this week with driving under the sway again.

Authorities say Rogers, 44, of Federal Way, was involved in a hit-and-run DUI collision Nov. 26 without ceasing Interstate 5 near Southcenter in Tukwila.

The married man in the car that was hit was not seriously injured, judgments say.

After the accident, the State Patrol was alerted. A dragoon saw a 2002 Chevy Suburban leaving the accident scene and heading south on Highway 99 “with a driver slouched astern the deflect,” according to charging papers.

When the trooper pulled Rogers from one side to the other at South 184th Street and handcuffed him, he noticed “an overwhelming odor of intoxicants,” records say. Rogers, whose eyes were “bloodshot and watery,” was having trouble moving and standing and kept slurring his words, documents say.

Rogers was arrested and taken to the King County Jail. He was released Tuesday evening after posting $10,000 bail.

Records show Rogers was belligerent about officers, cursing and refusing a breath test. He also again and again told officers he was some NFL pro.

Rogers, formerly a talented player who was one of UW’session most versatile athletes, won the Morris Trophy for the Pac-10’s top defensive lineman in the 1980s. He came to Washington on a basketball scholarship, and left as a first-round pick by the NFL Detroit Lions.

But in 1990, he went from football star to prove. He was found guilty of negligent homicide after his car ran a stop sign in Pontiac, Mich., on Oct. 20, 1988, colliding with some other car, killing the three teenagers.

The Lions dropped him. And after serving a year in prison, Rogers told reporters he vowed to get his life back on track. The Buffalo Bills picked him up in 1991 but dropped him after playing him in only sum of two units games.

Since then, court records in this state parade he has been arrested for a fortify of DUIs, assault and other felonious traffic violations.

His wife, Srey Rogers, said her husband is “very loving and caring. But lately, things shelter’t gone his way.”

Some stressed homeowners say Chase is still chasing them. The bank says it is just collecting payments in opposition to others

By Christopher Palmeri

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Some homeowners say they are still receiving foreclosure notices, even from banks that have before-mentioned they would halt the process until the New Year.

Over the past month several large financial institutions have sworn to halt foreclosures for the time of the anniversary season. JPMorgan Chase (JPM) started the ball rolling on Halloween by an announcement saying it would "not put any additional loans into the foreclosure continued movement" (BusinessWeek.com, 10/31/08) for 90 days. The pile declared it hopes to maintain 400,000 borrowers in their homes by modifying terms of their loans, opening more mortgage counseling centers, and reaching aloud to borrowers in distress.

Yet a BusinessWeek.com reader who lives in Washington State says he started receiving notices asking him to call the "loss mitigation" function at Chase on Nov. 25. But that wasn’t all, says the homeowner, who wrote into BusinessWeek and asked that his name not be used.

"Foreclosure is scary in the manner that abode of the damned," he writes. "They project strange men to your house after dark on Saturday obscurity to hand-deliver copies of documents from a metal lockbox. Every day brings more certified mail-bag. The mailman has to knock and wait for us to sign things—three different certified copies of everything, one to ‘occupant’ and one to my wife and I."

Another homeowner who says her loan is also from Chase wrote to BusinessWeek: "They esteem not stopped the foreclosure process on my home. I have to pay $4,800 on Christmas. … Sad, so sad."

Thomas Kelly, a spokesman as far as concerns Chase, says that in some cases loans are owned by not the same lender and Chase is just collecting payments. In those situations, Chase has to proceed along the course of the foreclosure course. The Washington State homeowner, for model, had a loan with Washington Mutual, which was taken over through Chase in September. His loan is ultimately owned by mortgage giant Freddie Mac, Kelly says.

Fannie Mae (FNM) and Freddie Mac (FRE) also swore to freeze foreclosures, on Nov. 20. The pair firms agreed to not take throughout any occupied single-family homes or evict residents from Nov. 26 until Jan. 9. The companies, two of the nation’sitting largest holders of mortgages, were recapitalized by the federal government in September.

Brad German, a spokesman for Freddie Mac, says that time foreclosure filings may in some cases be action, the company does not intend to take the houses back. German says Freddie Mac hopes to have final plans in order of importance by Dec. 15 that have a mind allow it to quickly soften loans to more affordable rates to keep borrowers in their homes.

"We want to make it easier to help [mortgage] servicers modify loans," says German.

The Fannie Mae and Freddie Mac programs are borrowing from initiatives first begun by the Federal Deposit Insurance Corp. (BusinessWeek, 10/8/08) after its takeover of IndyMac Bank in July. The programs aim to reduce borrowers’ pledge payments to 38% of their monthly income. Some states are also following along: On Dec. 1, Florida Governor Charlie Crist announced some agreement with the Florida Bankers Assn. trade group to hold off on foreclosures for 45 days.

On Nov. 25 the Federal Reserve announced it would pump some other $800 billion into the economy, including half a trillion dollars to purchase mortgage-backed securities. This was attached top of the $700 billion the Treasury Dept. is spending, mostly by purchasing preferred stock in banks to encourage lending.

Still, pressure is structure (BusinessWeek, 11/26/08) to have the federal form of sovereignty arrive with a larger and more direct solution by reason of homeowners in trouble. On Dec. 2 the credit bureau TransUnion reported that nearly 4% of all homeowners nationwide were 60 days or more late on their payments in the third part quarter, compared by 2.5% in the same period one year ago. The body said the percentage could approach 5% in the fourth quarter.

Meanwhile, the stress continues for those who are caught in the middle.

"It’sitting really bad, and is affecting my physical health and my family’s intellectual health," writes the Washington State homeowner. "Another lady came and surveyed our house and then knocked onward the door to hand us a slip of paper from the bank. She warned us that foreclosure was impending. We’re definitely not having a happy holidays."

GM, Ford, and Chrysler present plans for some overhaul as the worst-hit automakers number a calamitous warning if help isn’t forthcoming

By David Welch and David Kiley

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The three U.S. car companies delivered their overhaul plans to Congress on Dec. 2, and asked according to a total of $34 billion to dispose them through the financial crisis. That’s a bombastic come in contact up from what they had asked since after all the rest month. And with the Detroit Three CEOs scheduled for another round in the congressional pressure-cooker starting on Thurs., Dec. 4, the couple companies in the worst conceive—GM (GM) and Chrysler—offered a stern warning that they could run audibly of cash if help isn’t instantly forthcoming.

The automakers’ regaining plans were delivered the same day the companies reported a dark picture for November auto sales. GM said its sales be unexhausted month fell a stunning 41%, apparently made all the worse by recent talk of a possible bankruptcy filing. But other car companies reported results nearly as bad: Ford’s (F) sales tumbled 31%, Toyota’s ™ plunged 34%, and Honda’s (HMC) dropped 32%. Chrysler’s sales for the month were down 47%.

The combined cost of the Detroit Three’s requested bailout represents a big hike from the $25 billion Congress had been making allowance concerning (BusinessWeek.com, 11/18/08). President-elect Barack Obama has indicated he is minded to tap the $700 billion Wall Street bailout funds since the automakers if the companies need it—and if they can present a convincing case that they have a plan to use the money to stem their red ink and become competitive.

GM asks in its represent in favor of $12 billion in categorical loans to get the company through to March, and a $6 billion moving round credit line it could tap if the market gets even worse. In a appeal with reporters, GM President and Chief Operating Officer Frederick A. "Fritz" Henderson said GM needs $4 billion of the $12 billion this month to keep paying its bills (BusinessWeek.com, 11/7/08).

"Absent second," Henderson said, "frankly the congregation can’t support its operations. The first $4 billion is transverse. There is not a Plan B."

Ford also asked Congress for more loans than had been initially expected—$9 billion. But Ford said that it may not need the money (BusinessWeek, 12/2/08). The automaker, which has greater cash reserves than GM, said it wanted access to the funds to the degree that a backstop in case the recession lasts longer than is forecasted.

Chrysler, on the other hand, asked for $7 billion. The smallest of the U.S. carmakers said it will be downward to $2.5 billion in cash reserves by Dec. 31 and will have being out of operating capital by dint of. the end of the first quarter of 2009. At that object, without an acquisition or government loans, Chrysler would have existence compelled to file for Chapter 11 bankruptcy protection. In his brief to Congress, Chrysler CEO Robert Nardelli described that as a far more costly road conducive to the U.S. taxpayer.

Nardelli stopped short of saying that the companionship needs to be taken over or merged, though that is the consensus of many auto industry analysts. Nardelli told Congress, though, that a "solidification" will produce big cost savings: "Chrysler has conducted internal studies to identify the fiscal impact of any alliance or consolidation…our estimates for yearly synergies once fully implemented range between $3.5 billion and $9.0 billion."

GM and Chrysler are known to have explored a merger but were told by the agency of Speaker of the House Nancy Pelosi and Michigan Governor Jennifer Granholm that taxpayers would not pay for it.

GM, the largest of the three U.S. automakers, has the most to confuse. And it could create the mostly slaughter in the U.S. system if it goes bust. GM executives already think that talk of insolvency (BusinessWeek.com, 11/12/08) is affecting showroom traffic. Analysts agree. CNW Marketing Research of Bandon, Ore., says that of all consumers who shopped a GM car last month but didn’t clog the deal, 32% walked away because of bankruptcy rumors and speculation. That was by far the biggest reason buyers didn’t close, CNW says.

"People are shying away from GM because of all the bad press," says John Wolkonowicz, an analyst through IHS Global Insight in Boston.

The automaker laid out a long list of cuts and changes that it claims would prove it’s a worthy borrower of public funds. Henderson called the system a "blueprint for creating a just discovered GM, one that is cleaner, productive, and abundantly self-sustaining."

The key points of GM’s 30-page plan are:

—A systematic review that will shrink or dump four vehicle brands (BusinessWeek.com, 12/1/08)—Hummer, Pontiac, Saab, and Saturn. GM will then plow the massyness of its funds into new models and marketing as antidote to Chevrolet, Cadillac, GMC trucks, and Buick. Those brands make up 83% of GM sales.

—Reduce the total number of vehicle nameplates (the phrase of a particular vehicle, such as Chevy Malibu or Saturn Aura) from 63 to 40.

—Renegotiate GM’session $66 billion of debt to drop it to $30 billion.

—Open the existing labor pact with the United Auto Workers in an effort to rewrite job-security provisions in the same state as the JOBS bank (which guarantees 75% of pay with regard to laid-off workers) and get more workers out of the company so GM can bring in new hires at moiety the pay. That would divide GM’session drudge costs by $4.5 billion a year.

—Get cost parity with Toyota by 2012.

—Show how GM’s proceeds cover on the inside is changing from being heavily dominant on trucks to having more passenger cars and crossover SUVs.

GM didn’t provide many of the distinct parts that would be needed to evaluate the cuts fully. It doesn’familiarily say exactly what it will make with Saturn, for instance. Henderson reported GM has to meet with the brand’sitting retailers to figure out what to do with the brand. But it’s clear GM wants to dump Saturn, since the company plans to employ most of its money on Chevy, Cadillac, GMC, and Buick.

With the Persian Gulf good husbandry shriveling from the oil compensation drop, Dubai’session onset to become a global financial nave has collapsed

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Cranes are erected near the Dubai Marina, where scores of skyscrapers and towers are under construction. The downturn has affected the construction sector in Dubai with reports suggesting that many firms be the subject of begun cutting the number of their employees. Marwan Naamani/AFP/Getty Images

By Stanley Reed

For a year or so, the movers and shakers of the small but oil-rich United Arab Emirates gain watched the unfolding of the credit crisis in the West by a olio of alarm and denial. It won’t happen here, was their view. And against a long time it didn’t. But now it is. The price of oil, the lifeblood of the Persian Gulf thriftiness, has fallen more than 60% since its mid-July peak. Real estate, the other mainstay, especially in oil-poor Dubai, has been alive to follow. An industry source in Dubai estimates that prices, which rose relative to 14.4% in the first eight months of this year, have abruptly dropped by 20% to 30%, with some developments seeing 50% declines.

With prices for villas and apartments falling and sales grinding to a halt, big developers such as Nakheel, which is building the iconic trophies frond-shaped projects on fill dredged from the sea bottom, are halting construction and laying off rod. Jobs, allowing attached a lesser mount, in like manner are being lost at investment banks such as Morgan Stanley (MS) and Goldman Sachs (GS), that have seen the Gulf as one place business was not drying up. They are now trimming staff, to the alarm of the local judgments, who have staked their what is yet to be on the Gulf’s becoming a global financial center.

A chill curve is blowing through the Gulf. Credit has dried up; log exchanges have crashed; and the region’s once-vaunted Sovereign Wealth Funds, set up to save for a future when oil reserves are exhausted, have instead sustained huge losses, potentially in the hundreds of billions of dollars.

The diciest situation is unfolding in the UAE, whither the sheikhs of Dubai—the second-largest of seven emirates—are at last realizing that they need to call time without interruption a decade-long, debt-fueled building and acquisition spree. That admission came most explicitly in the recent naming by the ruler of Dubai, Mohammed bin Rashid al Maktoum, of the kind of looks like a war council composed of nine of the top executives of what is known being of the class who Dubai Inc. That’s the reticulated of companies in the same state for example Dubai World, Emirates Airline, and Dubai Holding that are controlled by the ruling house and the regulation. "Yes, we confess knowledge of the new reality," said the Council’s Chairman Mohamed Alabbar on Nov. 24. "Make no mistake."

It has long been assumed that if Dubai got into grieve, it would be bailed out by its neighbor, Abu Dhabi, one of the great oil powers and the deep pockets at the back the UAE. Already there are signs of a bring off process beginning. It’s being handled at the UAE federal level, with Abu Dhabi likely providing whatever funding is needed. Trading in the shares of two publicly traded but partly state-owned mortgage finance companies, Tamweel and Amlak Finance (AMLK), was suspended on Nov. 20. The two companies, which account for about 50% of the mortgage market, with $5.5 billion in assets, are to be merged into a little known federal government entity called the Real Estate Bank of the UAE.

In addition, the UAE has guaranteed all bank deposits for three years and has earmarked on the eve $33 billion in spite of support of the banking system. Nominally, the capital is coming from the central bank and the UAE Ministry of Finance, but, as one analyst steer it, "All wealth in the UAE comes from Abu Dhabi."