Greg's Stack-of-Stuff

[Greg]

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Ford to cut 4,000 jobs in North America By Poornima Gupta

11/17/05

Ford Motor Co. (NYSE:F), facing a deepening financial crisis, said on Friday it plans to eliminate 4,000 salaried jobs, or 10 percent of its North American white-collar work force, as part of a larger restructuring plan.

A majority of the job cuts -- announced to employees in an e-mail distributed by Mark Fields, president of Ford's Americas business -- will be made in the first quarter of 2006, spokesman Oscar Suris said.

The cuts will come through attrition, layoffs and the elimination of some agency and contract positions, Suris said.

They will be in addition to the 2,750 job losses already announced by the automaker this year,

Ford lost $284 million in the third quarter and its automotive division is in the red. Its North American vehicle operations have lost more than $1.4 billion before taxes so far this year.

The company's shares have dropped more than 40 percent since the end of 2004. They hit $7.57 per share on Thursday, the lowest in more than two years, before rebounding to $8.41 per share on Friday.

Ford Chairman and Chief Executive Bill Ford Jr. said last month that the automaker will announce its long-awaited restructuring plan -- dubbed "Way Forward" -- in January.

He also warned that the plan would include "significant plant closings" to help slash costs in North America.

Fields and his team are expected to present Bill Ford with the restructuring plan in December.

Ford, like cross-town rival General Motors Corp. (NYSE:GM - news), has seen its margins squeezed by intense competition in the U.S. market and by a dramatic slowdown in sales of cash cows such as mid-size and large SUVs due to high gasoline prices.

The two companies are also facing higher costs and a cut in their credit ratings to high-yield, or "junk," status.

Ford has taken a number of steps this year to strengthen its balance sheet, including the sale its Hertz Corp. rental car unit.

It also agreed to bailout former parts subsidiary Visteon Corp.(NYSE:VC - news) and announced that it intends to increase the production of hybrid vehicles tenfold to 250,000 annually.

Copyright © 2005 Reuters Limited.

 

[Greg]

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GM prepares to wield job ax By Jui Chakravorty

Fri Nov 18, 2:45 PM ET

As General Motors Corp. (NYSE:GM ) prepares to announce much-awaited job cuts and U.S. assembly plant closings, analysts wonder if the cuts will be aggressive enough to convince people of a possible turnaround at the ailing auto giant.

The world's largest automaker, which has lost nearly $4 billion this year, has said it will provide details by the end of 2005 about its previously announced plan to cut at least 25,000 manufacturing jobs as part of a broader restructuring plan.

"Announcing the plan alone will not be enough," Standard & Poor's equity analyst Efraim Levy said on Friday. "If the plan is not concrete, not enough, or not realizable, Wall Street could take it negatively."

Chief Executive Richard Wagoner has committed to a series of plant closings and the elimination of nearly a quarter of GM's U.S. factory work force through 2008.

"They need to lose a lot more jobs through 2008. The 25,000 number is the natural attrition rate, and they need to go beyond the ordinary to accomplish any change. They need more, a lot more," Levy said.

GM has been grappling with high health-care and commodities costs, loss of U.S. market share to foreign rivals, and slumping sales of large sport utility vehicles which used to be its profit center, but have now lost popularity due to high gasoline prices.

To make matters worse, GM's main parts supplier -- bankrupt Delphi Corp. (Other OTCPHIQ) -- is battling with its unions and will ask the court to void its labor contracts if a deal is not reached by mid-December. A strike at Delphi could shut down some GM and Delphi plants and could force the automaker to burn through billions of dollars a week, analysts have said.

A work stoppage could also cripple GM, Delphi's largest customer, as it prepares to roll out its GMT-900 truck series, a crucial component of its recovery plan.

PRESSURE MOUNTS

Wagoner in June said the proposed cuts would save the automaker $2.5 billion a year. But analysts worry about expenses associated with the cost cuts, and some estimates predict that early retirement and employee relocation costs could total up to $2 billion.

As investors await the changes, the Detroit News on Friday reported GM plans to make the announcement as early as next week.

"We have said that we will make announcements by the end of the year and that's what we will be doing," GM spokesman Stefan Weinmann said. "And we won't provide any more specifics."

Wagoner has said he plans to cut manufacturing capacity to match demand by 2008. Some experts believe The Lansing Craft Center, where GM builds the Chevrolet SSR, will likely be shut down because the convertible sport pickup has not been selling very well and GM has idled the plant for several months this year.

At least two other plants likely to be shut down are the Doraville, Georgia, plant, which builds GM's minivans, and an SUV plant in Janesville, Wisconsin, analysts said.

The new plant closings will add to three assembly plants that GM has already closed or stopped production at this year: a car plant in Lansing, Michigan, an SUV plant in Linden, New Jersey, and a van plant in Baltimore.

GM will also have to shed its old habit of keeping furloughed workers on the payroll and typically cutting factory jobs only by retiring workers after 30 years of services, analysts say.

Analysts also worry that GM's proposed sale of a 51-percent stake in its finance arm will reduce pressure to undergo a major restructuring, as the sale could bring in as much as $15 billion.

Still, GM shares rose 96 cents, or 4.3 percent, to $23.60 in Friday trade on the New York Stock Exchange.

Copyright © 2005 Reuters Limited.

 

[Greg]

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Last 12 months - Google stock

 

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Safest and Most Dangerous Cities in U.S.

Nov 21 12:06 AM US/Eastern
By The Associated Press

Following are the safest and most dangerous cities with populations
over 75,000, according to Morgan Quitno Press.

Safest Cities:

1. Newton, Mass.

2. Clarkstown, N.Y.

3. Amherst, N.Y.

4. Mission Viejo, Calif.

5. Brick Township, N.J.

6. Troy, Mich.

7. Thousand Oaks, Calif.

8. Round Rock, Texas

9. Lake Forest, Calif.

10. Cary, N.C.

Most Dangerous Cities:

1. Camden, N.J.

2. Detroit

3. St. Louis

4. Flint, Mich.

5. Richmond, Va.

6. Baltimore

7. Atlanta

8. New Orleans

9. Gary, Ind.

10. Birmingham, Ala.

____

Source: Morgan Quitno Press

 

[Greg]

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Court's custody order draws Parker dissent on religious grounds

11/21/2005, 5:46 p.m. ET
By SAMIRA JAFARI

MONTGOMERY, Ala. (AP) — The Alabama Supreme Court upheld a lower court's decision granting a Madison County father custody of his 6-year-old daughter, based in part on evidence the child had been beaten and alienated from her family.

But Justice Tom Parker, the lone dissenter in the 8-1 ruling Friday, took issue with the majority's view of the mother's strong religious convictions, saying the decision restricted the mother's right to teach her child "the worship of God."

The mother had custody of the couple's daughter after they divorced in May 1997, when the girl was about 6 months old. She married her second husband, Brian Snider, nearly two years later and almost immediately conflicts arose about the girl's upbringing, according to court papers.

The Sniders became members of a conservative Baptist denomination and moved a few years later to a rural area of Indiana to take part in missionary work.

The trial court, which gave the girl's father William Mashburn custody in 2002, said the move isolated the child from "the large and loving family" the girl enjoyed in Alabama. Court records show that Brian Snider hit the child on occasions for watching a PG-13 movie with Mashburn during visitation and "for saying something that (her stepfather) felt was wrong." The girl, who was homeschooled, was 5 at the time.

The Sniders also told the child her father and maternal grandfather are "going to hell," even though the Sniders knew the father and grandfather "are loved and cared for very much by the child," according to trial court documents.

The trial court said the mother, Laura Snider, should be teaching religion "by example," and not in a way that would be disparaging or critical of the father's beliefs.

Parker, in his 23-page dissent, said that while he agreed with some of the majority's findings, he dissented because of the court's stand concerning Laura Snider's religious rights.

Parker said that she tried to follow Biblical standards in child-rearing and that Mashburn initially agreed to her requests, but reneged later. He said that Mashburn drank beer daily in front of the child, "uttering profanity in her presence."

"Laura also followed the Bible by using corporal punishment to discipline the child when she misbehaved," Parker said.

"Given the exceptional importance of these rights," Parkers continued, "I believe this Court has a duty to fully consider the claims of the infringement of these rights now."

The majority opinion, written by Justice Champ Lyons, said Parker's dissent brings up the constitutional right to exercise religion — which was not specifically addressed in Snider's appeal.

The court said the custody battle was settled based on the child's welfare and not religious beliefs alone, and suggested Snider return her case to the trial court level if she wants to continue the custody battle.

Copyright 2005 Associated Press.

 

[Greg]

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Smoker tried to open airliner door

Monday, November 21, 2005

BRISBANE, Australia (AP) -- A French woman who is terrified of flying admitted in an Australian court Monday that she drunkenly tried to open an airplane door mid-flight to smoke a cigarette.

Sadrine Helene Sellies, 34, was placed on a good behavior bond after pleading guilty in Brisbane Magistrates Court to endangering the safety of an aircraft.

Sellies was traveling on a Cathay Pacific flight from Hong Kong to the east coast city of Brisbane on Saturday when the incident occurred at the start of a three-week Australian vacation with her husband, the court heard.

She walked toward one of the aircraft's emergency exits with an unlit cigarette and a lighter in her hand and began tampering with the door, prosecutors said. But a flight attendant intervened and took Sellies back to her seat.

Sellies was arrested and charged by police on arrival at Brisbane airport.

Defense lawyer Helen Shilton told the court Sellies was terrified of flying and had taken sleeping tablets with alcohol before takeoff.

Shilton said Sellies has no memory of what happened on the flight and that she has a history of sleepwalking.

But Magistrate Gordon Dean sternly warned the woman: "You must understand, if you are on a plane you must behave yourself."

Sellies, who did not speak in court and was aided by a translator, was placed on a 1,000 Australian dollar (US$734; euro623) bond -- meaning she will have to pay that amount if she commits another offense in the next 12 months.

Copyright 2005 The Associated Press.

 

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[Greg]

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GM, Ford U.S. sales seen down again

Wednesday November 23, 4:21 PM EST

DETROIT (Reuters) - General Motors Corp. and Ford Motor Co., Detroit's downhill racers, will post another big drop in their U.S. sales when they report November results next week, industry analysts said on Wednesday.

They said GM and Ford, which both saw their sales drop 23 percent in October compared with the same month a year ago, were likely to report November sales declines of as much as 15 percent.

The sales projections are adjusted for one more selling day in November this year and exclude the Detroit automakers' foreign brands.

By contrast, and despite weak industrywide results, Toyota Motor Corp. is expected to report a double-digit increase in sales, the analysts said in notes to clients.

They said Chrysler will also report a decline in sales, ending 19 consecutive months of year-over-year gains at the U.S. arm of Germany's DaimlerChrysler.

Like its crosstown rivals, Chrysler is hurting from what Merrill Lynch analyst John Casesa described as an "inhospitable" market for big trucks and sport utility vehicles.

The recent drop in U.S. gasoline prices apparently has not done much to reverse a shift in consumer sentiment away from fuel-thirsty SUVs and pickups.

The domestic automakers all sweetened their consumer incentives earlier this month, in a fresh bid to lure shoppers into their dealerships. But Casesa said November got off to "an excruciatingly slow start" and predicted that Detroit's long-running price war, which has eroded industry profits, will heat up again in the coming weeks.

"We expect the promotional environment to intensify between now and year-end," he said.

Chrysler is still expected to gain U.S. market share this year and will close 2005 with a share of about 13.3 percent, up from 12.7 percent at the end of 2004, according to Burnham Securities analyst David Healy.

GM and Ford have been bleeding share to rivals led by Toyota, however, and have seen the wheels fall off of their North American auto business as they struggle with high labor and health-care costs and problems attracting consumers.

In October, according to data compiled by Reuters, Toyota had a 15.1 percent share of the U.S. light vehicle market. That was better than the 14.4 percent monthly share at Chrysler and compared with 16.1 percent at Ford and 22 percent at GM.

Healy said he sees GM's ending the year with a market share of about 25.8 percent, down from 27.2 percent in 2004, while Ford will close out 2005 with a U.S. share of 18.3 percent, down from 19.3 percent in 2004.

Toyota, Japan's largest automaker, grabbed more U.S. retail market share than Ford in early November and was less than one share point behind GM, according to a report last week from J.D. Power and Associates.

Vehicle sales across the industry slumped to a seasonally adjusted annual rate of 14.7 million units in October, their slowest pace in seven years. November U.S. sales -- which automakers will report on December 1 -- are seen coming in at a rate of about 15.7 million, down from 16.6 million in the same month last year.

©2005 Reuters Limited

 

[Greg]

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Ben Franklin's Politically Incorrect Thanksgiving

Posted Nov 23, 2005

Did you know that the day we celebrate as Thanksgiving was supposed to be a fast?

It took one politically incorrect farmer to change the course of history. When the government tried to impose a fast, he called for a grand feast—thanksgivings—so that Americans could celebrate their bounty and nourish their bodies, not lament their hardships through hunger.

The Compleated Autobiography by Benjamin Franklin takes up where Franklin's original autobiography left off—in 1757. This new volume covers Franklin's final 33 years, including some of the most important in our nation's history.

"The Real Story of the First Thanksgiving," as told by Franklin himself (below), is just one of the many topics covered in The Compleated Autobiography by Benjamin Franklin.

--------------------------------------------------------------------------------

The Real Story of the First Thanksgiving
By Benjamin Franklin (1785)

“There is a tradition that in the planting of New England, the first settlers met with many difficulties and hardships, as is generally the case when a civiliz’d people attempt to establish themselves in a wilderness country. Being so piously dispos’d, they sought relief from heaven by laying their wants and distresses before the Lord in frequent set days of fasting and prayer. Constant meditation and discourse on these subjects kept their minds gloomy and discontented, and like the children of Israel there were many dispos’d to return to the Egypt which persecution had induc’d them to abandon.

“At length, when it was proposed in the Assembly to proclaim another fast, a farmer of plain sense rose and remark’d that the inconveniences they suffer’d, and concerning which they had so often weary’d heaven with their complaints, were not so great as they might have expected, and were diminishing every day as the colony strengthen’d; that the earth began to reward their labour and furnish liberally for their subsistence; that their seas and rivers were full of fish, the air sweet, the climate healthy, and above all, they were in the full enjoyment of liberty, civil and religious.

“He therefore thought that reflecting and conversing on these subjects would be more comfortable and lead more to make them contented with their situation; and that it would be more becoming the gratitude they ow’d to the divine being, if instead of a fast they should proclaim a thanksgiving. His advice was taken, and from that day to this, they have in every year observ’d circumstances of public felicity sufficient to furnish employment for a Thanksgiving Day, which is therefore constantly ordered and religiously observed.”

Copyright © 2005 HUMAN EVENTS.

 

[Greg]

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Bob Dylan's college poetry auctioned for $78,000

Tue Nov 22,11:11 AM ET[/i]

A collection of poems written by legendary rock poet Bob Dylan as a student at the University of Minnesota in 1960 sold for $78,000 Monday in a Rock & Pop Memorabilia auction at Christie's.

The 16 pages of poems hand-written in pencil formed the earliest Dylan manuscript ever offered for auction and it fetched the highest auction price to date for the acclaimed songwriter, according to Christie's.

A title page was inscribed in blue ink "Poems Without Titles," with the majority of the poems signed Dylan or Dylanism.

The poetry was acquired by an unidentified private European interest.

Dylan arrived at the college in 1959 as freshman Robert Zimmerman from upstate Hibbing and left at the end of 1960 as folk singer and songwriter Bob Dylan, headed to make his mark on the folk scene in New York's Greenwich Village.

The second-highest priced item in the sale that grossed $661,536 was Eric Clapton's Fender composite Stratocaster electric guitar, circa 1959, which sold for $36,000.

Copyright © 2005 Reuters Limited.

 

[Greg]

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And Now for the Second Half of the Rally

By MICHAEL J. MARTINEZ AP Business Writer

Posted: 11/27/2005 12:53 PM
(AP) NEW YORK

During each of the past four years, Wall Street has celebrated the year's end with a big rally that bolstered returns and burnished the reputations of investors and money managers who might otherwise found themselves with poor showings.

Once again, the market appears to be turning a year of negative returns into something worth bragging about. If this week's important slate of economic reports continue to encourage Wall Street, this year's rally could give 2005 better returns than anyone thought were possible just a few weeks ago.

When the rally started in November, it seemed more of a psychological phenomenon _ enough investors believed in the so-called "Santa Claus" rally to start buying stocks, and when enough people buy stocks, you have a rally.

Yet the foundation of this rally may have solidified last week when, in the Federal Reserve's Nov. 1 meeting minutes, monetary policy makers hinted that they may soon end their program of modest, incremental interest rate hikes. The market's been wary of the Fed's rate hikes, worried that while inflation would be kept in check, the more expensive lending rates would bring the economy to a standstill.

But with the Fed, for the first time, illustrating that it is indeed paying heed to the economy as well as inflation, the November rally regained momentum and surged higher. For the week, the Dow Jones industrial average rose 1.54 percent, the Standard & Poor's 500 index gained 1.6 percent and the Nasdaq composite index climbed 1.61 percent.

And with worries about interest rates mollified, the market could have room to extend its advance.

ECONOMIC DATA

The week ahead features an unusual concentration of important economic reports that will likely shape not only this week's trading, but the month's as well.

While inflation remains in check and energy prices have fallen somewhat, the labor market is still a question for many investors. That unease will make the Labor Department's job creation report critical to the continuation of this rally. Economists expect the economy to have created 220,000 new jobs in November, up from an anemic 56,000 jobs created in October.

Last month's predictions for job growth were high, as many on Wall Street underestimated the continuing impact of the Gulf Coast hurricanes, so any surprise in this number will likely be negative.

Also Thursday, the Institute for Supply Management will release its manufacturing index for November. Wall Street expects manufacturing growth to have slowed modestly, with the ISM index coming in at 58, down from a 59.1 reading in October.

On Wednesday, the Commerce Department will release its latest projection of the third quarter's gross domestic product. Economists predict the economy to have grown 4.1 percent for the July-September period, up from a previous estimate of 3.8 percent.

EARNINGS

While the calendar of economic releases is full, there are very few noteworthy earnings reports due out in the week ahead, most of which are in the retail sector.

Department store operator Dillard's Inc. is expected to lose 17 cents per share, compared to a 23 cents per share loss a year ago, when it reports its earnings Thursday morning. The stock has fallen 23 percent from its 52-week high of $28.60 on April 6, closing Friday at $21.91.

Specialty clothing retailer Chico's FAS Inc. has been a better performer, more than doubling from a 52-week low of $18.85 on Nov. 30, 2004, to close Friday at $45.72. The company is expected to post profits of 28 cents per share, up from 20 cents per share a year ago, when it reports after Tuesday's session.

EVENTS

The monthly deluge of retail sales reports will take on added meaning as investors try to discern whether November's sales will translate into a strong December. The vast majority of sales reports will be out Thursday, with a few stragglers coming Friday and early next week.

Copyright 2005 Associated Press.

 

[Greg]

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Investors flock to Bush's dollar despite declining presidency

2005/11/26
By Alison Fitzgerald NEW YORK/LONDON, Bloomberg

The Bush dollar is doing a lot better than the Bush presidency.
George W. Bush's approval rating last week fell to the lowest since he took office, according to the latest Harris Interactive poll, just as investors pushed the U.S. currency to its highest level since 2003 against the euro and the yen.

"The political backdrop in the U.S. isn't great, but when I look across the Atlantic to Europe, it isn't any better," said David Mozina, a currency strategist at Lehman Brothers Holdings Inc. in New York. "The U.S. is on firmer footing, so buy dollars."

Since the end of 2004, the dollar has appreciated about 15 percent against the euro and 16 percent against the Japanese yen. Among the so-called Group of Seven industrialized nations' currencies, only the Canadian dollar shows a gain against the U.S. currency this year, about 2.5 percent.

Bush has Federal Reserve Chairman Alan Greenspan to thank. Investors scooped up dollar assets because returns rose as the Fed quadrupled the benchmark U.S. interest rate to fight inflation, while the European Central Bank kept its main rate steady. The yield on the 10-year U.S. Treasury note on Nov. 23 was one percentage point higher than on the corresponding German government bond.

The dollar's rise helps Bush "because it's a reflection of a strong economy," said Phillip Swagel, an economist at the American Enterprise Institute in Washington and the former chief of staff at the White House Council of Economic Advisers.

Politically, Bush is struggling. His job approval rating fell to 34 percent in the Harris poll, conducted Nov. 8-13, from 50 percent a year ago. Polls show a majority of Americans say the war in Iraq was a mistake, and lawmakers including Representative John Murtha, a Pennsylvania Democrat and decorated Vietnam war veteran, want U.S. troops brought home.

The decline in the polls coincides with Congress's rejection of Bush's top legislative goal, a plan to partially privatize the Social Security pension system. The indictment of an aide to Vice President Dick Cheney, I. Lewis Libby, on obstruction of justice charges in a CIA leak probe has added to White House woes.

Through it all, the dollar continued to climb and investors from overseas poured money into the U.S. The dollar has risen about 4.5 percent this year, according to the Federal Reserve's broad currency trade-weighted dollar index. The dollar traded Nov. 23 at US$1.1808 per euro, compared with US$1.3552 at the end of last year; it traded at 118.85 yen versus 102.62 at the end of 2004.

International investors added to their net holdings of U.S. assets by a record US$101.9 billion in September, bringing total net foreign investment into the U.S. to about US$660 billion this year, 17 percent more than a year earlier.

"We've had a big move in interest rate differentials, which has overshadowed Bush's political problems," said Jens Nordvig, a currency strategist with Goldman Sachs Group Inc. in New York. "Domestic politics haven't been pretty in the U.S., but that has come at a time when there've been political problems in Germany and France."

Greenspan led the Fed in raising the central bank's benchmark interest rate to 4 percent from 1 percent in 12 quarter-point moves starting in June 2004. That pushed the U.S. rate from one percentage point below the ECB's main rate to two percentage points above. The ECB rate is now 2 percent.

"The dollar didn't need Social Security reform, or the tax cuts made permanent," said Greg Anderson, a foreign-exchange strategist at ABN Amro Bank NV in Chicago. "These reforms have died along with the president's popularity."

Among major central banks, only the Bank of England is setting higher interest rates than the Fed. Central-bank rates in Canada and Japan are also lower than in the U.S.

"The level of the dollar reflects very simply the interest rate differential between the U.S. and other countries," said Greg Valliere, chief political strategist at Stanford Washington research Group.

The troubled political situation in the U.S. isn't unusual in advanced economies today, analysts said. In Germany, Angela Merkel was sworn in yesterday as chancellor, more than two months after an election that gave neither her Christian Democrats nor the opposition Social Democrats leeway to form a government without the other. In France, two weeks of riots in ghettos around Paris abated this week after more than 9,000 cars were torched and police imposed curfews.

The strong dollar may do little to help Bush politically, said analysts including James Lucier of the Prudential Equity Group Inc. in Washington.

Copyright © 2005 The China Post.

 

[Greg]

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Stocks fall on housing worry

Monday November 28, 4:00 PM EST By Ellis Mnyandu

NEW YORK (Reuters) - U.S. stocks fell on Monday as a bigger-than-expected drop in a gauge of home sales had investors worried that a slowdown in housing would shake consumer confidence and a drop in oil prices weighed on energy shares.

In the final hour of trading, Nasdaq Composite index fell 1 percent.

The Dow Jones industrial average was down 46.35 points, or 0.42 percent, at 10,885.27. The Standard & Poor's 500 Index was down 10.54 points, or 0.83 percent, at 1,257.71. The technology-laced Nasdaq Composite Index was down 22.76 points, or 1.01 percent, at 2,240.25.

Despite an initially strong start to holiday shopping, shares of retailers like Wal-Mart Stores Inc. (WMT) were among the biggest decliners amid concerns that retailers may be sacrificing profit margins to increase store traffic.

Drug maker Merck & Co. Inc. (MRK) fell 5.3 percent to $29.33 and was the biggest drag on Dow after announcing a major restructuring involving as many as 7,000 job cuts.

The disappointing home sales data and doubts about holiday buying took a toll on stocks in those sectors. The Dow Jones U.S. home-builders index registered its biggest one-day percentage drop in nearly 3 weeks, and the Standard & Poor's Retail Index shed 1.4 percent.

Among home builders, shares of KB Home (KBH) fell 2.7 percent to $69.94 on the New York Stock Exchange and shares of D.R. Horton Inc. (DHI) fell 2.9 percent to $35.56.

A National Association of Realtors report showed that U.S. existing home sales fell in October to 7.09 million units, compared with analysts' expectation of 7.17 million.

The inventory of unsold houses rose to the highest level in nearly 20 years.

"There are questions with housing appearing to slow a bit," said Jonathan Golub, U.S. equity strategist at JPMorgan Asset Management in New York. "A housing slowdown is obviously a headwind," he added.

A decline of more than a dollar in crude oil prices sent energy stocks lower, with shares of Exxon Mobil Corp. (XOM), losing 1.9 percent to $58.96 on the New York Stock Exchange.

Chevron Corp.'s (CVX) shares fell almost 2 percent to $57.40.

On the retail front, shares of J.C. Penney Co. (JCP) fell 1.7 percent to $53.16 while Federated Department Stores (FD) lost 2.8 percent to $65.20.

©2005 Reuters Limited.

 

[Greg]

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I Bonds are looking good, but don't give up on stocks

By Scott Burns
Sunday, November 27, 2005 - 12:00 AM

Q: Should I continue investing in the stock market if I can make more than 6 percent in I Savings Bonds and retire in the next five or six years?

We have invested in Fidelity Funds since 1996 and have earned a 3 percent total return.

(We invested in Equity Income, Growth and Income, and Tech Sector funds through 2002. Now we are invested in the Total Stock Market index, the Standard & Poor's 500 index and a bond index fund. The bond index fund is losing money.)

Should we pull out of the market if we have accumulated enough to live comfortably in retirement? Is this situation of no loss but no real gain worth it?

— E.B., Houston

A: Discouraging, isn't it? Many people are thinking the same thing.

More important, I Savings Bonds are beating a lot of the alternatives cold.

I Savings Bonds will earn at a 6.73 percent annual rate between now and April. The yield is based on the trailing rate of inflation plus a premium over inflation.

That premium was reduced from 1.2 percent for the May-to-October period to 1 percent for the November-to-April period.

That 6.73 percent yield is 200 basis points (there are 100 basis points in 1 percentage point) higher than the yield on Treasury bonds, well over the 6.24 percent yield on government-guaranteed mortgages, and right in the ballpark with General Motors Acceptance Corp. paper.

So it's a good deal.

Be aware, however, that the yield will change in May if the trailing inflation rate changes.

The next rate may be lower.

Then again, the yield can decline to an annualized rate of only 4.5 percent and still be competitive with current five-year Treasury notes.

If interest rates continue to rise, I Savings Bonds are likely to be the best fixed-income choice in the near future.

If interest rates continue to rise, the 1 percent real annual return on I Savings Bonds may also beat the return on equities.

Your equity investments, meanwhile, will have five years to deliver a higher return. They may or they may not, but I've never liked all-or-none investing, so I'd keep some position in domestic equities.

You should also think about real diversification.

Owning Total Stock Market and S&P 500 funds is like owning two funds with an overlap of about 70 percent because the S&P 500 stocks represent about 70 percent of total U.S. market capitalization.

You can achieve broader diversification in equities by retaining the Total Market fund, selling the S&P 500 index fund and replacing it with a total international stock fund.

Had you done this, year to date (as of Nov. 11) you would be in somewhat better shape.

The iShares EAFE index exchange-traded fund (ticker: EFA) has returned 7.33 percent year to date, while the iShares Total Market Index (ticker: IYY) has returned 3.3 percent and the SPDR 500 ETF (ticker: SPY) 2.4 percent. The Lehman aggregate bond index ETF (ticker: AGG) has lost 2.3 percent.

Copyright © 2005 The Seattle Times Company

 

[Greg]

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DAILY BRIEFING December 2, 2005

November yields solid earnings in TSP

By Karen Rutzick
govexec.com

All of the funds in the Thrift Savings Plan grew in November, offsetting losses incurred the month before.

The TSP - a 401(k)-style retirement savings program for federal employees - had the largest growth in its S fund, which invests in the stocks of small- and mid-size companies. The S fund gained 4.72 percent in November, followed closely by the C fund, which invests in common stocks and was up 3.75 percent.

The S fund also has overtaken the I fund, which is made up of international stocks, in terms of longer-term performance. Over the past year, the S fund saw a 14.64 percent gain, while the I fund grew by 13.35 percent.

For November, the G fund, which consists of government securities, and the F fund, made up of fixed-income bonds, showed more modest returns of 0.36 percent and 0.38 percent respectively.

All five of the life-cycle (L) funds, which blend the stand-alone funds based on expected retirement dates and automatically becoming more conservative as participants age, were boosted by the robust performance of the underlying funds.

The L funds designed for older participants, such as the L Income and the L 2010, had a smaller increase in November because of their heavier use of the G fund, which is dependable but has less opportunity for growth.

L 2040, designed for young employees planning a retirement date around the year 2040, grew 3.08 percent in November. L 2030 grew 2.80 percent, L 2020 rose 2.42 percent, L 2010 increased 1.89 percent and L Income grew 1.03 percent.

November's gains counteract October's negative returns. The ever-reliable G fund had a 0.36 percent gain, but every other fund lost ground in October. The I fund lost 2.90 percent that month, the S fund lost 2.33 percent, the C fund lost 1.66 percent, and the F fund lost 0.75 percent.

In an exact reverse of November's performance, the 2040 L fund was the least successful of the life-cycle options in October, and L Income was the most. All of the funds had negative returns; the L Income fund just lost the least.

©2005 by National Journal Group Inc.

 

[Greg]

imported post

UAW negotiator: Delphi strike "appears more likely than not"

12/7/2005, 2:06 p.m. ET
The Associated Press

DETROIT (AP) — A key United Auto Workers negotiator has told local union leaders that a strike against auto supplier Delphi Corp. "appears more likely than not," a UAW spokesman said Wednesday.

UAW spokesman Paul Krell said Vice President Richard Shoemaker discussed the possibility of a strike with around 250 union leaders Tuesday at a closed-door meeting in Detroit.

Shoemaker said "under current circumstances, a strike appears more likely than not. That can change, and we hope it does," according to Krell, who attended the meeting.

Shoemaker didn't give a time frame when a strike might occur, Krell said.

Delphi spokeswoman Claudia Piccinin said Wednesday that the company is hoping to avoid a strike.

"We're going to continue on with our discussions with the unions toward a consensual restructuring plan, and that's where our focus is right now," she said. "We think a strike would not benefit any parties."

Delphi, which filed for bankruptcy protection in October, has asked its unions to agree to cut hourly workers' wages by more than 60 percent, from $27 an hour to between $10 and $12.50. Delphi says those wages are competitive with other union and nonunion suppliers.

Delphi said last week it's making progress in talks with its former parent, General Motors Corp., on a plan that could soften the blow for Delphi's hourly workers. No details were given, but analysts suggested GM may provide cash for Delphi employee buyouts or may agree to allow Delphi workers to flow back to GM.

Because of those talks, Delphi delayed a plan to ask a bankruptcy court judge on Dec. 16 to void its union contracts, an action that could lead to a strike. Delphi now says it could ask the judge to void its contracts on Jan. 20.

In a news conference Tuesday, UAW President Ron Gettelfinger said he hasn't taken part in the discussions between GM and Delphi and won't restart talks with Delphi until the company takes its current wage offer off the table.

"The last proposal that Delphi presented to this union is a road map to confrontation," Gettelfinger said.

A strike could be devastating to Delphi as well as GM, which relies on Delphi for billions of dollars worth of parts. GM spent $14 billion on Delphi parts last year, or around 16 percent of its total spending on parts.

 

[Birchtree]

imported post

There will be plenty of Latinos and Mexicans that will cross that picket line and do those jobs and do them better than the union workers. Let them strike - if I were a part of the membership of UAW, I'd resign and keep working. Some income is certainly better than no income. It won't be long China will be building cars here.

 

[Greg]

imported post

Unions rally against personnel changes as Pentagon issues new details

By Karen Rutzick
December 8, 2005

Unions representing both federal and nonfederal employees joined in a rally Thursday to protest limits on collective bargaining in the federal government.

On the steps of the AFL-CIO headquarters in Washington, hundreds of union members gathered in what they described as a rally for the human right to union representation, giving special notice to federal employees.

"Bush has turned the government into America's No. 1 union buster," AFL-CIO Executive Vice President Linda Chavez-Thompson said.

Chavez-Thompson was referring to personnel reforms under way in the Homeland Security and Defense departments that, in addition to replacing the General Schedule with a performance- and market-based pay system, are designed to limit union influence. Administration officials argue the limitations provide them with the necessary flexibility to defend the country against terrorist attacks.

On Wednesday, the department released new details on the performance evaluation aspect of the planned system.

The union rally featured two speakers from the American Federation of Government Employees, the largest federal employee union and an AFL-CIO affiliate.

"The bottom line is that union federal employees have dutifully and successfully protected this country for decades," AFGE member and Defense Department employee Keith Hill said. "Union members are not the enemy."

AFGE president John Gage told the crowd that curtailments of federal workers' union rights will pave the way to limitations outside the government.

"We know that if it happens to us, state and local governments will be next," Gage said, followed by the private sector, including transportation and communications workers.

While the event was notable for its attention to federal employees, it was just one of dozens worldwide coordinated by the AFL-CIO to mark the anniversary of the United Nations' adoption of the Universal Declaration of Human Rights. The declaration includes the right to join and form unions.

The Air Line Pilots Association, American Federation of Teachers and Communication Workers of America were some of the unions present at the event.

But even as labor organizations do their best to halt the personnel reforms at Defense and Homeland Security, including filing lawsuits, the Pentagon is forging ahead.

The Defense Department released a new 25-page handbook on the National Security Personnel System Wednesday on its Web site. The handbook addresses the human resources elements of the new system and does not discuss collective bargaining. Its contents are still subject to union consultation.

"The purpose of this primer is to provide you with an understanding of what is proposed in the human resources portion of NSPS," the Web site stated.

The primer clarifies that the performance "shares" employees will earn based on how they are rated in relation to their peers can be paid out in the form of either a permanent raise or in a one-time bonus, at the discretion of supervisors.

The Defense Department recommends that supervisors use bonuses for employees who are paid at the top of the market range for their type of job. Bonuses also could be awarded for good work that is considered a one-time achievement, the handbook says.

Supervisors should recognize, however, "that bonuses do not contribute to employee retirement benefits or Thrift Savings accounts," the guidelines state. "Inappropriate overuse of the bonus could result in morale, recruitment and retention problems."

The handbook also outlines the five steps required for performance-based raises: plan, monitor, develop, rate and reward. The outline calls for objectives to be set from the start, ongoing feedback and reviews, continuing training and development, clear evaluations, and finally, rewards based on good performance. Each year, this process will run from Oct. 1 through Sept. 30.

According to the primer, pay pools from which the raises will be divided up will have between 50 and 300 employees. The pools could be created based on job function, location, mission or organizational structure.

©2005 by National Journal Group Inc.

 

[Greg]

imported post

TSP board mulls loan restrictions, automatic enrollment

By Karen Rutzick
November 30, 2005

Board members and high-level staff running the Thrift Savings Plan are trying to figure out how they can persuade Congress to approve desired improvements to the plan without inviting any unwelcome additions.

Gary Amelio, executive director of the TSP, the government's version of a 401(k) retirement savings plan, wants Congress to pass four legislative initiatives that would change the plan significantly by placing limits on loans, automatically enrolling new hires, changing the default fund and revising fund definitions.

But Amelio and the board are concerned that if Congress endorses these changes, it might at the same time approve other proposals to add funds to the TSP. The unwelcome additions could include funds that invest in real estate or precious commodities, and socially conscious funds that, for example, do not invest in Sudan.

In testimony this spring before a House Government Reform subcommittee, Amelio and TSP Board Chairman Andrew Saul voiced particularly strong opposition to the potential addition of a real estate fund. Both have said funds should not be added due to political considerations, including pressure from real estate interests or humanitarian concerns.

Additions should be made solely for the benefit of plan participants, Amelio and Saul have said.

At a meeting Tuesday, Amelio told the board that it needs to be careful about bringing any of its initiatives to Congress, because lawmakers could tack on changes of their own.

"I think to be prudent, we're just not ready," Amelio said. "If we were to go up and ask for a group of features to be passed, [we need to make sure] nothing else will be added to it."

Amelio said he would like to limit participants to one outstanding loan from their TSP fund. Right now, employees can take out one general purpose loan and one residential loan at a time.

He added that his "greatest concern as to the pushback" from Congress is that the proposal to limit outstanding loans could be perceived as an attempt to eliminate a benefit for federal employees. But he argued that multiple loans are not in the best interest of participants because such loans hamper the TSP's growth potential.

Federal employees should be automatically enrolled in the TSP upon being hired, with 3 percent, for example, of their income automatically invested in the funds, Amelio said. Automatic enrollment still would give employees the ability to opt out of the TSP.

It's a problem of inertia," Amelio said. "If you don't get them signing up when they come in the door, they'll never get it."

Amelio also said he wants to make the life-cycle (L) fund the new default fund for indecisive participants. The government securities (G) fund is currently the fallback choice.

The director said Congress needs to correct a technicality as well, by revising the definitions of the common stock (C) fund and the small- and mid-sized companies (S) fund in the law to clarify the difference between the two.

All of these changes are still just suggestions. Amelio said he feels more strongly about some--particularly the L-fund default--than others. The changes would have to be approved by the TSP board before being presented to Congress.

Saul said at the meeting that the board, along with Amelio and his staff, should "come to grips with [which initiatives to push] during this year." If the board and the staff decide the initiatives are worthy, he said, "I think we should go for it."

The board could consider recommending just one or two of the initiatives rather than the whole group, to avoid group add-ons, Saul said.

©2005 by National Journal Group Inc.

 

[Greg]

imported post

Federal offices in New Orleans area gradually open doors

By Daniel Pulliam
govexec.com
December 7, 2005

Federal government offices and buildings in the greater New Orleans area are gradually getting back on their feet as the region recovers from one of the worst natural disasters in the nation's history.

More than three months after the Hurricane Katrina slammed into the central Gulf Coast, resulting in the death of more than 1,300 people and the displacement of more than 1 million, about half of government offices in New Orleans are estimated to have at least partially re-opened.

There are about 70 federal agencies and field offices in the greater New Orleans area, including military commands, according to Kathy Barre, executive director of the New Orleans Federal Executive Board.

Barre -- an employee of the Agriculture Department's National Finance Center in New Orleans -- has been gathering information on other government agencies in the area and has been finding ways for them to communicate during the rebuilding phase.

"It's hard for people to imagine what has taken place here," Barre said. "When you talk about the entire evacuation of a federal city ... how can we begin the process of trying to pull back together?"

Barre said she is still trying to get in touch with some of the agencies that are moving back to the city. Some were up and running by the end of September, but others won't move back until next year, she said.

"You will see this continuing into January and February, but with each passing month you will see more agencies come back into this area," Barre said. "It appears that about 50 percent or so have at least started reconstituting in this area."

Of the 33 government buildings in the region that are managed by the General Services Administration, 11 remain closed. Agencies housed at these locations are either in new locations or the employees are teleworking, according to GSA.

Gil Hawk, director of the National Finance Center's information resources management division and chief information office, said a building rented at NASA's Michoud Assembly Facility reopened Nov. 1 and about 550 of the 1,300 employees have returned to work.

A second NFC-rented building that houses Thrift Savings Plans operations and is located a half mile from the Michoud facility sustained major flood damage and is unlikely to reopen, Hawk said. NFC is negotiating with Michoud to rent more space for the TSP operations, he said.

"Almost everything was destroyed in [the TSP] facility," Hawk said. "The facility is not fit for use and we don't know what the owner is going to do with [it]."

Patrick Scheuermann, chief operations officer at Michoud, which is run by the Lockheed Martin Space Systems Co. and produces the space shuttle's external fuel tank, said 120 of the 2,000 employees have yet to return to the 832-acre facility. Employees who have not returned were relocated to Huntsville, Ala., and are expected to move back by January at the latest, he said.

Michoud, one of the largest employers in New Orleans, has yet to receive city water, but Scheuermann said he decided in mid-September to have a well drilled. By Oct. 15, about 400 employees had returned to work at the facility, he said.

Scheuermann, who took the helm at Michoud about a week before the hurricane landed, said at least 800 employees have been unable to return to their homes.

"It's just incredible for me and I'm just blessed to be a part of this ... to see the dedication of these folks," said Scheuermann, who recently finished the Senior Executive Service Federal Candidate Development Program.

Of the eight New Orleans Social Security Administration offices that closed, three have reopened, the first on Oct. 31, the agency said. An office is scheduled to reopen in January 2006 and another in spring 2006. There are no dates for reopening the remaining three.

In the meantime, two new locations have been opened to fill gaps in service.

The Agriculture Department's Farm Service Agency offices in Louisiana are all open, but there are still problems with sporadic e-mail and Internet service, according to a Dec. 7 status report.

The Forest Service's building in the region is still inaccessible, according to the report, and the Animal and Plant Health Inspection Service's plant protection and quarantine office at the U.S. Customs House remains closed.

On Oct. 26, the National Labor Relations Board reopened its New Orleans regional office in the city's central business district. The Equal Employment Opportunity Commission's New Orleans office opened in a new space on Nov. 29.

U.S. Postal Service spokesman David Partenheimer said undamaged mail was delivered to the New Orleans area as soon as it was safe to do so, and was returned to the sender if it was not deliverable.

"There is no backlog of mail," Partenheimer said. "Mail that was contaminated was recently sanitized and is now being delivered in the New Orleans metropolitan area."

©2005 by National Journal Group Inc.