As the last day of the first week of the Obama Administration came to a close the economy again took center stage as the bleeding continued to seep through the surgical patch work of the previous administration. The bleeding oddly enough is why Timothy Geithner was in the end confirmed to the position that his lack of good judgment should have prevented him from attaining. In the end the 47 year old won his seat with the final vote of 60 to 34 being presented by the U.S. Senate late on Monday. The appointment gives Geithner full charge of a Treasury Department and control of the main efforts to restore stability to the nations markets.
This is not a job that anyone would really want to have. The major economists seem to agree that the economy is going to continue to contract throughout the remainder of 2009 and that recovery is only going to start once a real sense of consumer confidence is reestablished in the banking industry. For now they are hinging there bets that a 47 year old tax dodger will help to bring the confidence in the banking system back around.
As if a reminder of our current economic peril was needed, six companies announced staggering cutbacks and closures. Sprint / Nextel announced today that they will be shedding 8,000 jobs all by by March 31 of this year. To be honest they are playing third string to the major US cellular phone providers. Trailing long behind AT&T and Verizon in both coverage and quality. I know, first hand unfortunately. I had a Nextel for over four years after using Verizon. Now I have gone back to Verizon. It turns out that in the end, quality counts. But Sprint / Nextel was not the only victim this Monday.
Nearly 2.6 million jobs were lost during 2008, the highest yearly job-loss total since 1945. Those losses were due tot he end of World War II and the slowing down of the war machine.
Caterpillar announced that it will cut 20,000 jobs. The company was already planning to cut 15,000 workers since the fourth quarter of 2008. They recently decided to add an additional 5,000 jobs to the cut list, bringing the total to 20,000.
Pfizer said it will be cutting 10% of there 81,900 employees and close five of its manufacturing plants. They also stated that there will be a second round of cuts that will shed 15% of employees from the combined Pfizer/Wyeth staff of 120,000 employees total. That brings the job cuts to a total of 26,000. The company had previously cut 4,700 jobs in 2008.
Home Depot the world's largest home improvement retailer, announced Monday it will eliminate its EXPO design center business and slash 7,000 employees. The cuts represent approximately 2% of the company's total workforce.
Microsoft stunned investors by announcing its first-ever broad layoffs. The company said it would shed to 5,000 of its 94,000 employees over the next 18 months, including 1,400 people immediately.
General Motors said it would lay off 2,000 workers at two of there plants. One in Michigan and one in Ohio. In addition they will temporarily stop production at nine North American assembly plants in response to weak demand. They plan to cut 800 second shift workers at a plant in Lordstown, Ohio, and 1,200 second shift workers at the Delta Township outside of Lansing, Michigan. Those moves will bring production of the Chevrolet Cobalt and a trio of crossover vehicles including the Buick Enclave to a crawl.
Gm's move comes at the same time as President Obama announced the move to adopt strict limits on greenhouse gases from cars and trucks. He also directed the Transportation Department to begin working up rules that would impose higher fuel-economy standards on cars and light trucks from US manufacturers. President Obama said that his orders were intended “to ensure that the fuel-efficient cars of tomorrow are built right here in America.”
The directives that President Obama put forth today will force automotive manufacturers to quickly retool so they could begin producing and selling cars and trucks that are cleaner and get better gas mileage on an accelerated schedule. Obama directed the Transportation Department to start working on a law requiring a 40 percent improvement in gas mileage by 2020. The big three have lobbied hard against the regulations and have challenged them in court, however with two of the three taking government hand outs currently, they may be backed into a corner now.
Whats tomorrow going to bring?