GM Thins Its Ranks Some More

More than 7,500 retirement-eligible hourly workers have agreed to take General Motors’ latest buyout offer, the company reported. The packages are worth up to $45,000, and most of the workers who accepted them will leave by Apr. 1.

What’s perhaps more striking, however, is the number of retirement-eligible UAW members who didn’t accept the offer—some 14,000. The company desperately needs to clear more highly-paid workers from its payroll in order to replace them with new hires who will earn much less. GM is finding it more difficult than it had hoped to persuade people to give up their jobs during a recession. Nevertheless, GM stock was up nearly 11% in midafternoon trading.

Source: New York Times

U.S. Jobless Rolls Still Rising

The number of Americans filing new claims for unemployment benefits last week rose for the 10th straight week, to a seasonally adjusted 652,000, up from 644,000 the week before. The number of people remaining on the rolls rose to 5.56 million, the ninth straight record. The government also drew a slightly more gloomy picture of the economy in the fourth quarter of last year, saying that it shrank at an annual rate of 6.3%, not 6.2% as previously estimated. Some economists think the shrinkage is running this quarter at a 5% to 6% pace.

Source: Associated Press

More Newspaper Cutbacks

In the latest evidence of the desperate state of most newspapers in the U.S., New York Times Co. announced it will lay off 100 employees and cut nonunion staffers’ pay by 5% for the next nine months at the flagship paper and the Boston Globe. At the Times, Newspaper Guild workers will be asked to accept the pay cuts voluntarily, in return for 10 days off. Over at the Washington Post, employees will be offered buyouts, with the threat of layoffs if not enough staffers leave voluntarily.

Source: New York Times, MarketWatch.com

Geithner Calls for a Sweeping New Powers

In a Congressional hearing, Treasury Secretary Timothy Geithner outlined a wide-ranging plan to overhaul U.S. financial regulation by subjecting hedge funds and traders of exotic financial instruments to potentially strict new government supervision. Geithner argued that the new rules are needed to avoid a repeat of the excesses that led to the current global economic crisis. Under the new scheme, the government also would get powers to seize and wind down any financial company big enough to destabilize the banking system, such as AIG. The Obama administration is counting on public anger over big taxpayer-financed rescues to help it win approval for the changes, which could be the most sweeping since the 1930s.

Source: Wall Street Journal, Bloomberg

This Market Rally May Be Real

Predicting the stock market is a dicey game, but better policy and a shrinking trade deficit—in addition to clues from history—argue for muted optimism in the wake of the market’s recent 20% rally.

Source: BusinessWeek

Geithner Reaffirms Dollar’s Role

The U.S. Treasury Secretary stepped into a hornet’s nest when he said the U.S. was “quite open” to a Chinese proposal that the world move toward greater use of an IMF-created market basket of reserve currencies. He later clarified that the dollar is likely to remain the world’s dominant reserve currency, helping prompt a rally in the greenback.

Source: Guardian

EU Leader Condemns U.S. ‘Road to Hell’

The current president of the European Union, Czech Prime Minister Mirek Topolanek, provoked a mini-crisis on Mar. 25 when he criticized U.S. and British policies for dealing with the economic downturn as a “road to hell.” The comments by the Czech leader—whose own government fell the day before—undermined efforts to create an air of consensus between Europe and the U.S. in the run-up to the G-20 summit in London next week.

Source: Financial Times

Barclays Shareholders Getting Restive

Barclays Chairman Marcus Agius and CEO John Varley have kept the bank afloat and held on to their jobs throughout the financial crisis, even as peers fell by the wayside. But now, as a Mar. 31 deadline approaches for Barclays to decide whether to participate in a British government-backed insurance plan, shareholders are getting restless and could vote out the pair at a special board meeting on Apr. 23.

Source: Wall Street Journal

Should GM Split Itself in Two?

Under one bankruptcy scenario, the automaker would create a ‘good GM’ and a ‘bad GM,’ with Hummer and Saturn part of the ‘bad’ company. The idea might help tame bondholders and unions, but any bankruptcy is risky.

Source: BusinessWeek

Is Sony Ericsson Headed for Divorce?

The 8-year-old mobile phone joint venture between Sony and Ericsson is bleeding money and dragging on both parents. But neither appears ready to throw in the towel.

Source: BusinessWeek

Czech Brewery Wins Suit over Budweiser Name

In the latest twist to a decades-long battle over the Budweiser brand, a small Czech brewery that claims rights to the name has won a ruling from Europe’s Court of First Instance disallowing giant Anheuser Busch InBev from registering the trademark as its own in Europe.

Source: Wall Street Journal

Canary Wharf at Risk of Going Bust—Again

The Morgan Stanley-backed consortium that acquired the huge Canary Wharf real estate complex in East London in 2004 is in danger of breaching its debt covenants within a year due to the failure or exodus of key tenants and plunging commercial property prices.

Source: Times of London

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