Posted by: Jane Sasseen on May 27
By Elise Craig
General Moters moved a step closer to bankruptcy on May 26th -- and a step closer to having Uncle Sam as by far its largest shareholder. GM's bondholders rejected its offer to swap their debt for what they perceived to be too small a share of the equity that would remain. With GM facing a deadline of Monday, June 1st to complete a government-ordered restructuring, its chances of staying out of Chapter 11 are rapidly diminishing. For full details, take a look at this story on businessweek.com.
If GM does end up in bankruptcy, the U.S. and Canada could end up with three-quarters of the company’s stock. The Obama administration’s plan to lend the embattled automaker another $30 billion would make the U.S. government the company’s majority stakeholder, and make the bailout one of the biggest since the economic crisis began, as detailed here by the Washington Post. So far the federal government has given the company $19.4 billion in loans.
The United Auto Workers would also end up with a substantial stake in the restructured company. The union, which has agreed to extensive cuts in labor costs, would get 17.5% of the company to pay for worker and retiree benefits, as our colleagues David Welch and David Kiley report in this story on businessweek.com.
Posted by: John Carey on April 20
Cass Sunstein is an amazingly prolific and influential legal scholar. The subjects of his hundreds of articles and more than a dozen books range from constitutional law to animal rights. “If you look at what he’s written and done, he should be 900 years old,” says Scott H. Segal, partner at Bracewell & Guiliani, a law and lobbying firm. In fact, the long-time University of Chicago law professor (now at Harvard) is an affable 54 year old former squash champion with a killer tennis drop shot.
But what makes Sunstein important now is his coming post in the Obama Administration. On April 20, President Barack Obama finally made a formal nomination of Sunstein to be director of the Office of Information Regulatory Affairs (OIRA) in the Office of Management and Budget. In essense, Sunstein will be the nation's regulatory czar, sitting judgment of the government’s regulations.
What is his regulatory philosophy? What will he do in the White House? Business Week tackled these questions last month in a story about Sunstein.
Posted by: Jane Sasseen on January 20
With Barack Obama's inauguration today as the 44th president of the United States, the election of 2008 is now thoroughly over.
So is this blog. But the action in Washington has only just begun, and we'll give you a ringside seat over on BusinessWeek's new blog about the intersection of business and government, at Money & Politics.
See you there!
Washington Bureau Chief
Posted by: Dan Beucke on January 17
By Keith Epstein
Inaugural festivities got underway in a frigid Washington Saturday morning with a Boeing-sponsored brunch for scores of lobbyists and pols to celebrate the unveiling of an Obama portrait donated to the Smithsonian by Washington power lobbyist couple Tony and Heather Podesta.
Boeing CFO James A. Bell said that he felt particularly moved by the event and Obama's ascension. Bell, an African American who grew up in south central L.A., called it "a wonderful moment that sends a powerful message." He noted that the portrait, which figured prominently in campaign material and has the word "HOPE" at the bottom, conveyed "a simple message of hope that elegantly captured the aspirations of so many Americans."
Continue reading "Boeing's Salute to Obama"
Posted by: Theo Francis on January 08
If you want a sign the financial world is changing fast, look no farther than Thursday's announcement that Citigroup would back legislation allowing judges to modify mortgage terms in bankruptcy.
The bill, championed for more than a year by Sen. Richard Durbin (D-Ill.) -- and backed by many Democrats, including President-elect Barack Obama and Sen. Chuck Schumer (D-NY) -- has been anathema to the financial-services industry for just as long. The industry successfully fought it off several times over the last 18 months, most recently in this fall's negotiation over the Emergency Economic Stabilization Act. And as recently as December, industry officials were promising an ugly fight, and saying they might still be able to head off the measure entirely.
No longer. Citigroup's announcement comes even as the same officials acknowledge that a compromise is likely -- though perhaps not this compromise. "I think the politics, the substance, the economics, the tax angle all work against the industry on this one," a financial-services industry official said in an interview Wednesday night, before the Citigroup agreement was public.
That doesn't mean the deal is done. Much of the industry still opposes the measure -- and some even argue that Citigroup's support can be explained by its own self-interest: the bill could hurt its competitors more than Citigroup.
Continue reading "Does Citigroup Stand Alone? Industry Balks at Bankruptcy Bill"