Shhhh!!

Don’t tell the shareholders. Discounted stock options. The latest thing in executive compensation. NYTimes (04.29.06), via Beat The Press:

“For leading the turnaround of the Denny’s restaurant chain, Nelson J. Marchioli was all but given an extra $500,000 last year, slightly more than his reported bonus for 2005.

But Denny’s shareholders would be hard pressed to discover that added part of their chief executive’s pay.”

Stock Options at Wholesale

“Instead of writing Mr. Marchioli a check, Denny’s board handed him about 333,000 stock options that came with a built-in paper gain. The amount was not mentioned in Denny’s compensation committee report. It was not counted in the company’s summary compensation chart.”

“Only by carefully studying a table, deep in the proxy statement from the year before, would an ordinary investor realize that Denny’s awarded those options last December with a ‘buy’ price of $2.42 when Denny’s shares were selling for $3.91, a 38 percent discount.”

“‘We basically felt we wanted to reward employees for the work before,’ said Jay C. Gilmore, the restaurant chain’s controller. ‘These were intended to give some upside.'”

While at the same time pretty much guaranteeing that the shareholders wouldn’t be asking any untoward questions. Slick, huh?

Let’s dig a little deeper:

“Denny’s introduced the discounted stock options after it overhauled its executive pay practices based upon the recommendations of Hewitt Associates, a human resources consulting firm hired by the board.

According to public filings, a 2004 Hewitt study of 18 restaurant and hospitality companies concluded that while executive salaries and bonuses at Denny’s were ‘generally in line with the market, long-term incentives and target benefits’ were not.”

Stock Options at Wholesale

Denny’s implemented its discounted stock options plan soon thereafter.

Hewitt Associates. Hmmmm. Wonder if their finding that Denny’s execs were underpaid had anything to do with the fact that “Denny’s executives awarded [Hewitt] consulting contracts worth more than $400,000 over the last few years to help manage the company’s main pension plan.”

Hewitt Associates. Haven’t we run into these guys before? Oh yeah!! Verizon used them as its executive compensation consultants. Last year, Verizon’s stock value fell 26%, credit agencies downgraded its debt rating, pensions for 50,000 managers were frozen and its earnings declined 5.5%. Even so, based on Hewitt’s recommendations, Ivan Seidenberg, Verizon’s CEO, got a compensation package worth almost 50% more than the year before.

The wrinkle? “Hewitt received more than half a billion dollars in revenue from Verizon and its predecessor companies since 1997″ for running Verison’s employee benefit plans and providing actuarial human resources consulting services.

Seems to be a bit of a pattern here, don’t you think?

Il Est Un Idiot

Canadians everywhere are laughing their asses off. Washington Post (04.29.06):

“President Bush yesterday said ‘The Star-Spangled Banner’ should be sung in English, not Spanish….

With passions running high over the release of ‘Nuestro Himno,’ a Spanish-language version of the national anthem, Bush told reporters that people who want to be citizens of the United States should learn English and ‘ought to learn to sing the national anthem in English.'”

President Wants Anthem Sung in English

And There’s No End In Sight!!

The Independent (04.28.06):

“The Iraq war has already cost the United States $320 [billion], according to an authoritative new report, and even if a troop withdrawal begins this year, the conflict is set to be more expensive in real terms than the Vietnam War, a generation ago.

The estimate, circulated this week by the non-partisan Congressional Research Service (CRS), can only increase unease over the US presence in Iraq, whose direct costs now run at some $6 [billion] a month, or $200 [million] a day, with no end in sight.”

Iraq war set to be more expensive than Vietnam

“The Bush administration has refused to provide any specific overall figure for the war’s cost.” Mostly because they don’t have a clue.

Even so, the money keeps coming. “(T)he Senate is set to approve another emergency spending bill in May, meaning that Iraq will have consumed $101 [billion] in fiscal 2006 alone, almost double the $51 [billion] of 2003, the year of the invasion itself – and all at a time when the federal budget deficit is running at near record levels.”

We’re sure glad we’re getting something for all our money. LATimes (04.29.06):

“Parsons Corp., the Pasadena engineering firm that won one of the largest rebuilding contracts in postwar Iraq, fell dramatically short of a number of goals, according to interviews and documents that cite shoddy work and negligent government oversight.

The firm was to have rebuilt Iraq’s health and security infrastructure. However, an audit and interviews show it will finish only 20 of 150 planned health clinics, and nearly $70 million of medical equipment meant for the clinics sits unused.”

Contractor’s Plans Lie Among Ruins of Iraq

“Additionally, as few as 12 of 20 hospitals planned to be refurbished will be completed. Some border forts built by the company lack walls, and some fire stations may be structurally unsound.”

“The U.S. Army Corps of Engineers failed to properly monitor Parsons’ performance, stonewalled investigative efforts and exercised ‘poor cost controls’ as Parsons spent $186 million on a contract to build the health clinics, according to a draft copy of an audit obtained by The Times.”

Believe it or don’t, Parsons declined to comment. The Corps of Engineers says it’s Parson’s fault.

“‘There’s a lot of blame to go around,'”, says Ginger Cruz, the deputy inspector general for the office of the Special Inspector General for Iraq Reconstruction.

Ethics?

Yeah, we heard of ’em. Knight-Ridder (04.27.06):

“House Republican leaders on Thursday narrowly defused a revolt within their ranks that would have killed lobby and ethics legislation, but then delayed a final vote on the package until next week.

The legislation still faces broad, if not unanimous, opposition from Democrats and a handful of Republican moderates who say the legislation falls far short of what Congress needs to remove the stain of scandal rising from recent criminal convictions for influence-peddling.”

House Republicans manage to delay vote on ethics reform legislation

Taking The Fifth

And it’s not Jack Daniels. NYTimes (04.29.06):

“Dr. Lester M. Crawford, the former commissioner of food and drugs, is under criminal investigation by a federal grand jury over accusations of financial improprieties and false statements to Congress, his lawyer said Friday.

In a court hearing held by telephone on Thursday, [Lester’s lawyer] told a federal magistrate that she would instruct Dr. Crawford to invoke his Fifth Amendment right against compelled self-incrimination if ordered to answer questions this week about his actions as head of the Food and Drug Administration, according to a transcript of the hearing.

Ex-Head of F.D.A. Faces Criminal Inquiry

“Dr. Crawford resigned in September, fewer than three months after the Senate confirmed him. He said then that it was time for someone else to lead the agency.”

Indeed. Forbes (09.28.05):

“Crawford’s resignation raised eyebrows: While he had been acting commissioner for some time, he was only confirmed as commissioner in July. He became Deputy Commissioner in 2002.

Crawford says that, to his knowledge, he did not own any shares of companies that were regulated by the FDA during his tenure as acting commissioner.”

Former FDA Chief Denies Financial Conflicts

Under his stewardship, there were, uhhh, a few problems at the FDA. MSNBC (09.23.05):

“His three-year tenure at FDA was marked by increasing criticism and a particularly rocky final 12 months. The painkiller Vioxx was pulled off the market for safety problems, FDA was embarrassed last fall when its British counterparts shut down a supplier of U.S. flu vaccine for tainted shots, and over the summer recalls of malfunctioning heart devices mounted.

Finally last month, morale at the agency plummeted when Crawford indefinitely postponed nonprescription sales of emergency contraception over the objections of staff scientists who had declared the pill safe. FDA’s women’s health chief resigned in protest.”

Embattled FDA chief Lester Crawford resigns

Ahh yes. The Plan B fiasco. We’re sure that wasn’t politically-motivated. Boston Globe (09.16.05):

“But under pressure from the prolife fringe that insists against all evidence that emergency contraception is abortion in disguise, the FDA caved.

Executing a fandango that Karl Rove would admire, the FDA first boxed the manufacturer into seeking permission for over-the-counter sales only to those 17 or over.

Then it rejected the adults-only plan on the grounds that the pills could still fall into the hands of younger teens.”

Saving Plan B from the zealots

Current status of Plan B? “(A)mid political pressure from conservatives, the FDA “has put off [making] a decision indefinitely.”

Nice to see this controversy didn’t stop Lester from cashing in a few chips.

Here It Comes

AP (04.27.06):

“Mildred Lindley is stuck in a hole, the doughnut hole — ‘right in the middle of it,’ she says — that comes with Medicare’s new prescription drug benefit.

Just four months into the program, Lindley has hit the point in her coverage where she has to pick up, at least for a few months, the full cost of the medication she takes to keep her bone marrow cancer in remission. As a result, her two-month supply of Thalomid shot up from $40 to a whopping $1,300.

Disabled, Seniors Confront Medicare Hole

“‘If I can’t get it, I guess I’m here until the Lord takes me out. That’s all I can do, because there’s no way I can afford it,’ said Lindley, an 80-year-old from Jonesboro, Ark.”

“‘I’m in the hole all right.'”

“Under the standard drug benefit, the government subsidizes the drug costs for seniors and the disabled. But after costs reach $2,250, the subsidy stops until a beneficiary has paid out $3,600 of his or her own money.” After that, the Feds will cover 95%.

Welcome to the doughnut hole, Ms. Lindley.

Congress stuck this thing in there, with the connivance of the Administration, as a very half-assed and underhanded sleight-of-hand “to reduce the overall cost of the program”. The thing was already so expensive, they had to figure out some way to sell this boondoggle. Otherwise, it never would have passed.

Remember this? Washington Post (03.14.04):

“Bush had said he was willing to spend as much as $400 billion for the drug benefits and other Medicare changes during the next decade, and the Congressional Budget Office, the official fiscal advisers to Congress, predicted the law would cost $395 billion.

In late January [2004], the White House said calculations provided by [Richard S. Foster, a nonpartisan Department of Health and Human Services official who has been Medicare’s chief actuary for nine years], indicated the law would cost $534 billion. That provoked an outcry from Democrats and conservative Republicans concerned that the drug benefits would deepen the federal deficit.”

Official Says He Was Told To Withhold Medicare Data

“Internal documents and federal officials made clear that the White House had known of the higher cost estimates for months. Until now, it has not been apparent the lengths to which Bush aides who negotiated the bill with Congress went to keep the figures private.”

How about this? CBSNews (03.18.04)

“The House ethics committee said Wednesday it will begin an investigation to determine whether Rep. Nick Smith, R-Mich., was offered a bribe to vote for the Medicare drug bill.”

Bribe Probe Over Medicare Vote

Our good Representative first voted against the bill because he thought it was too expensive. “After the vote, Smith told a radio station that Republican colleagues had offered $100,000 in campaign cash for his son, Brad, if he voted for the bill. The younger Smith is running to replace his father, who is retiring.”

“Smith later backed away from the allegation, saying that someone outside Congress had offered his son ‘substantial and aggressive campaign support’ and Smith assumed that meant financial support. But he said it was ‘technically incorrect’ to say money was offered.

“Smith has refused to say which lawmakers or business interests were involved. But he said Wednesday he will cooperate with the investigation.”

And some investigation it was! After six months, “the committee concluded that [Tom] DeLay had told Rep. Nick Smith (R-Mich.) he would endorse the congressional bid of Smith’s son if the congressman gave GOP leaders a much-needed vote in a contentious pre-dawn roll call on Nov. 22.”

What did they do? Ha! They said their report “‘will serve as a public admonishment’ of DeLay, Smith and one other GOP lawmaker involved in the negotiations that occurred on the House floor as Republican leaders scrambled for support on a much-debated bill to add prescription drug coverage to Medicare.”

“The ethics panel, evenly divided between Republicans and Democrats, said it would take no further action in the case.”

Back to the doughnut hole. It’s coming, and its impact will be noticed. “About 6.9 million Medicare beneficiaries will have to deal with a gap in their drug coverage at some point this year, according to estimates from the Kaiser Family Foundation, a health policy research group.”

That’s gonna translate into a lot of pissed-off voters.

Oh, and the eventual price tag of this thing? GAO (03.23.04):

“The new drug benefit is one of the largest unfunded commitments ever undertaken by the federal government.”

Testimony Before the Subcommittee on Legislative and Budget Process, Committee on Rules, House of Representatives

“Preliminary estimates of its long-term cost range up to $7-8 trillion in discounted present value terms over a 75-year period.”

“To put that number in perspective, it is as much or more than the total amount of the federal government’s gross debt outstanding as of September 30, 2003.”

Yee haw. Get out them checkbooks, folks.

Have You Seen The Little Piggies?

Bloomberg (04.26.06):

“Republican leaders, plagued by internal divisions over spending and immigration, plan to change the subject in Congress to issues that provide a sharper contrast with Democrats.

Starting next month, Republicans will advance measures to cap medical malpractice awards and end the estate tax, Senate Majority Leader Bill Frist told colleagues in a letter earlier this week.”

Republicans Shift Agenda in Congress to Malpractice, Estate Tax

Ahhh, yes. The estate tax. Who’s so damned keen to end the estate tax? Public Citizen (04.25.06) (link in original):

“The multimillion-dollar lobbying effort to repeal the federal estate tax has been aggressively led by 18 super-wealthy families, according to a report released today by Public Citizen and United for a Fair Economy [ed. – this is a pdf] at a press conference in Washington, D.C. The report details for the first time the vast money, influence and deceptive marketing techniques behind the rhetoric in the campaign to repeal the tax.

It reveals how 18 families worth a total of $185.5 billion have financed and coordinated a 10-year effort to repeal the estate tax, a move that would collectively net them a windfall of $71.6 billion.”

Stealth Campaign of Super-Wealthy to Repeal Federal Estate Tax

“The report profiles the families and their businesses, which include the families behind Wal-Mart, Gallo wine, Campbell’s soup, and Mars Inc., maker of M&Ms. Collectively, the list includes the first- and third-largest privately held companies in the United States, the richest family in Alabama and the world’s largest retailer.”

By golly. Imagine that. But, but, but the estate tax destroys family farms!! Uhhh, nope. Unadulterated bullshit. This is from 2001. NYTimes (04.08.01):

“Neil Harl, an Iowa State University economist whose tax advice has made him a household name among Midwest farmers, said he had searched far and wide but had never found a farm lost because of estate taxes. ‘It’s a myth,’ he said.

Even one of the leading advocates for repeal of estate taxes, the American Farm Bureau Federation, said it could not cite a single example of a farm lost because of estate taxes.”

Focus on Farms Masks Estate Tax Confusion

In 2004, Neil said he’d “‘never seen a farm business that had to be sold in order to pay federal estate tax.'” So what’s with that line of bamboozlement? Neil said, “‘It spins well.'”

Some perspective: “In 2003, of 2.4 million deaths, only 30,627 taxable estate tax returns — 1.3% — were filed. … (By comparison, there are about 130 million income tax returns filed annually.)”

In 2004, there was no estate worth less than a million bucks that paid any estate tax whatsoever. None. Zip. Nada. Zilch.

Once more, lest we don’t forget. Who’s pushing this in Congress?

Ahhh!! Our breasts swell with song: “In their sties with all their backing, they don’t care what goes on around.”

Oh and by the way? If you’re getting to be worth anywhere near this kind of dough, and don’t have a good estate planner, you’re an idiot.

Getting Better All The Time

LATimes (04.24.06):

“Just when it looked like the political climate couldn’t get worse for President Bush and the Republican Party, more storms have gathered.

This month’s abrupt rise in gas prices is fueling new worries about the party’s prospects in the fall elections, which have been roiled by controversy over GOP policies on immigration, the federal budget and Iraq.”

More Fuel on the Fire Under the GOP’s Feet

“So when Congress returns today from a spring recess, Republicans face a political landscape even more challenging than when they left town two weeks ago after failing to pass legislation that would crack down on illegal immigration and curb domestic spending.”

“Since then, gas prices have shot up to more than $3 a gallon in some places. Demonstrations against GOP immigration proposals have continued across the country. A poll shows Bush’s approval ratings at new lows — and the Republican-led Congress’ even lower.”

“The situation may call for Bush to step in and demand more party unity from Republican lawmakers, who have increasingly kept their distance from the White House as the president’s agenda and poll numbers have flagged.”

“The president has to be like Moe Howard: At some point in every ‘Three Stooges’ short, Moe slaps both Curly and Larry and says, ‘Get to work,’ ” said Bill Whalen, a research fellow at Stanford University’s Hoover Institution.”

And for you Three Stooges fans out there, you know how well that always used to work. The Scotsman (04.24.06):

“The United States President George Bush has warned rising oil prices will mean a ‘tough summer’ for consumers as the high cost of petrol showed signs of becoming a big political issue.

‘We’re going to have a tough summer because people are beginning to drive now during tight supply,’ he said. ‘The American people have got to understand what happens elsewhere in the world affects the price of gasoline you pay here.'”

Little we can do, Bush confesses

This is generally known as the theory of supply and demand.

Get To Work

Still Prickish After All These Years

Grace has been fucking the people of Libby, Montana over for a long time. Good to see some things never change. NYTimes (04.22.06):

“As W. R. Grace & Company prepares for a major criminal trial over widespread asbestos contamination here, doctors at the clinic that has treated hundreds of asbestos victims accuse the company of trying to discredit them and force the clinic to close.

The doctors are scheduled to be important witnesses for the prosecution when the federal criminal trial gets under way this fall in Missoula.”

In Old Mining Town, New Charges Over Asbestos

“Grace, a producer of chemicals and building materials, voluntarily pays for most of the medical treatment at the clinic. In recent months, the company’s medical plan administrator imposed new rules that have made reimbursement more lengthy and involved, and pushed the clinic, its administrators say, into a cash-flow crisis.”

The director of Grace’s medical plan “said the tighter financial rules were imposed because of concerns that the company was being billed for services that had not been performed.” However, the director did not cite any specific circumstances where this might have occurred. He’s just “concerned” Grace might be getting overbilled.

He also (and rather gratuitously, we’d hasten to add) said “that a review [Grace] commissioned of past medical diagnoses in Libby found flaws in more than a quarter of the cases.” Which isn’t to say the diagnoses were incorrect or inaccurate. Just that there were “flaws”.

So just how much of a hard-ass has Grace been? Ha! “Grace and seven of its executives were indicted last year by a federal grand jury on charges of conspiracy, wire fraud, obstruction of justice and violations of the Federal Clean Air Act in connection with the company’s mining operations in Libby.”

And that’s why they’re gonna fight each and every diagnosis to the death. Or until they go to jail. Whichever comes first.

Here We Go Again

From earlier this month, NYTimes (04.07.06):

“The economy added jobs at a strong clip, the unemployment rate fell and wages rose last month, the Labor Department reported today.

Workers, the report indicates, are finally sharing in the economic growth in a more direct way than they did last year.”

U.S. Economy Added Jobs at a Strong Clip in March

“Average hourly wages, which had trailed inflation for much of 2005, kept up the much faster pace set earlier this year, increasing 3.4 percent from a year ago, to $16.49, after a 3.5 percent increase in February.”

On the other hand, the Bureau of Labor Statistics says just the opposite. If you adjust for inflation, wages didn’t rise last month, they actually fell.

In 1982 dollars, the average hourly wage for March, 2006, was $8.18, down from $8.20 in February.

What’s been happening is that the Labor Department first releases the hourly wage number in current dollars, along with its unemployment numbers. Everyone jumps all over this as an indication the economy has just been humming right along.

Then, couple of weeks later, the wage number in 1982 dollars is released, and no one notices. Not that we’re thinking this is intentional, but given how terrible the inflation-adjusted hourly wage has been over time, it is a rather fortuitous coincidence at best.

Workers are sharing something, but it ain’t economic growth. The inflation-adjusted hourly wage for March, 2006, is right about what it was back in November, 2001.

And you thought you got a raise!

Boneheads

Who says management doesn’t have a clue? First, the context. AP (04.21.06):

“The United Auto Workers and other unions opposed Delphi Corp.’s attempt to cancel its labor contracts in court filings Friday, saying the auto parts supplier has failed to prove it needs to slash workers’ wages as part of its Chapter 11 restructuring.

Delphi, which filed for bankruptcy protection in October, asked a federal judge to void its labor contracts March 31 after it failed to reach an agreement to lower wages with its unions and General Motors Corp., its former parent and largest customer.”

Unions Oppose Voiding Delphi Contracts

Delphi had asked its workers to agree to a wage cut “from $27.00 an hour to $16.50 an hour by 2007.” Then it turns around and goes ahead with this. Detroit Free Press (04.21.06):

“On the same day that bankrupt Delphi Corp. announced a landmark deal to trim its workforce last month, the auto-parts supplier was entertaining hundreds of people on a weeklong trip to three Caribbean islands aboard the lavish Caribbean Princess cruise ship.

Delphi officials say the trip was part of a company rewards program for car dealers and their salespeople to bring in much-needed business as it seeks to emerge from bankruptcy.”

Delphi cruise makes waves with UAW

Delphi wouldn’t say “how much it spent for the cruises, but one business travel expert estimated the cost at $800,000 to $1.2 million.”

Delphi says incentives like this are good for business, and are intended to encourage dealers to buy Delphi products. No doubt, but what Delphi doesn’t seem to understand is that the timing of something like this is abysmal. Unless, of course, it wants come across as arrogant and insensitive.

One thing’s for sure. It’s positively gonna piss off the workers!!

“Those onboard wined and dined at sea while Delphi, on March 22, announced a sweeping workforce reduction deal with General Motors Corp. and the UAW to provide early retirement and buyouts for 113,000 hourly GM workers and 13,000 hourly Delphi employees.”

“Plans for even more job cuts were announced a week later when Delphi unveiled a restructuring plan calling for the elimination of 31,000 hourly and salary jobs.”

Oh, and the cruise follows on the heels of the three-pronged (bonuses, severance pay, stock awards) “Key Employee Compensation Plan” Delphi dropped on the Bankruptcy Court last Winter. Detroit News (11.23.05):

“Delphi’s ‘incentive bonus’ plan would parcel out $21.5 million to an unspecified number of executives during the first six months of bankruptcy. An additional $88 million in cash is also set aside for ’emergence’ bonuses to 500 execs when Delphi comes out of Chapter 11.

The severance program would give the top 21 officers a total of 18 months’ worth of salary and target bonuses if they are forced to leave the company. Another 89 execs would get a year’s pay and bonus as severance, while 373 other managers would receive a year’s pay.”

Angry UAW fights Delphi exec bonuses

Did we mention the stock bonuses? “‘According to the program, the management team would receive 10 percent of the equity in a reorganized Delphi. With a projected net equity of $4 billion, the stock options and restricted stock could total $400 million.”

‘Under a successful reorganization, Delphi’s top five officers — not including Miller — could receive a combined $25 million in stock options and another $12.5 million in restricted stock.”

Happy negotiating!!

Keep Rumsfeld – Please

The Chicago Tribune tees off on George (04.20.06):

“Should the president fire Donald Rumsfeld? That’s like asking if Disney should retire Mickey Mouse.

Why get rid of someone who represents everything important about an institution–particularly if doing so leaves those things unchanged? No, President Bush should keep Rumsfeld as a perennial symbol of the administration’s essential characteristic: hubris.”

Why Bush should keep Rumsfeld

“If you want to know what went wrong in the presidency of George W. Bush, you could find plenty of candidates. There is its ineptitude, as when it ignored warnings about Al Qaeda until Sept. 11, 2001, or when it ignored warnings about Hurricane Katrina until New Orleans was under water.”

“There is its Soprano-style approach to critics and even in-house skeptics–from Joseph Wilson, whose wife was outed as a CIA agent after he questioned the case for war, to Lawrence Lindsey, the economic adviser canned for admitting the war might cost $200 billion, an estimate that turned out to be laughably low.”

“There is its peerless gift for self-delusion, as when the vice president said our troops in Iraq would be greeted as liberators and the insurgency–in May 2005–was in its ‘last throes.'”

“There is its brazen dishonesty, which is on exhibit every time the president and his budget directors claim to be practicing fiscal restraint, even as spending grows faster than Las Vegas.”

“All these traits flow from the same source: a self-congratulatory narcissism that is utterly impervious to events in the real world.”

“(F)iring him would establish the principle that those entrusted with power are accountable for their failures. And if we followed that policy, who knows where it might lead?”

Crime Beat

The word “gullible” is still not in the dictionary. Reuters (04.21.06):

“A 76-year-old man claiming to be a doctor went door-to-door offering free breast exams, and was charged with sexually assaulting two women who accepted the offer, police said Thursday.

One woman became suspicious after the man asked her to remove all her clothes and began conducting a purported genital exam without donning rubber gloves, investigators said. ”

Phony Doctor Arrested on Sex Counts

Only then, she became suspicious?

Car News

Ford. AP (04.21.06):

“Ford Motor Co. said Friday it lost $1.2 billion in the first quarter, its worst performance in more than four years, as revenues fell and the nation’s second-biggest automaker started a massive and costly North American restructuring effort.

Ford’s financial arm, Ford Motor Credit Co., earned $479 million for the quarter, down 33 percent from $710 million a year ago. The division said higher borrowing costs due to Ford’s junk credit rating was partly to blame.”

Ford Loses $1.2B As Restructuring Begins

Another reason is perhaps that no one’s buying Fords.

GM. Ha! They didn’t lose as much as folks expected, so the stock goes up. Detroit Free Press (04.21.06):

“Can a $323-million loss really be good news?

It was for General Motors Corp. on Thursday as its stock price rose more than 10%, showing Wall Street’s confidence in the automaker’s turnaround plan.”

Despite a loss of $323 million, GM wows Wall Street

“Chief Financial Officer Fritz Henderson told reporters and analysts that strong sales of GM’s new lineup of SUVs, including the Cadillac Escalade, and lower incentives contributed $1.1 billion to GM’s earnings.”

Getting ’em loaded. “Customers are paying $5,000 to $7,000 more for the new SUVs because of strong demand for models with the most luxurious and expensive options, Henderson said.”

Gauche is good. “‘Escalade has just been phenomenal in terms of customer demand for the vehicle. Twenty-two-inch wheels, for example, have been very, very hot,‘ he said.”

Remember now, the sales numbers for these things are before the $3.00+ per gallon gas we’re gonna be seeing this Summmer.

And the Japanese. Reuters (04.20.06):

“After a turbo-charged year of bumper sales, a soft yen and hefty cost cuts, Japan’s biggest auto makers are set to extend their run of record profits in 2006/07 fueled by even more key product launches.

A 12-yen rise in the dollar from the year-earlier period helped prop up January-March profits, but Toyota Motor Corp., Honda Motor Co., Mazda Motor Corp. and Suzuki Motor Corp. also came out ahead as their vehicles attracted more customers around the world.”

Japan car makers to keep record profit run this FY

Got One In The Trunk

Hang on a minute. Project On Government Oversight (04.20.06), via Laura Rozen:

“According to an Air Force power point briefing provided to POGO, earlier this month at 0815 on April 10th, the controls on an F-22A at Langley Air Force Base showed that the aircraft’s canopy wasn’t locking. After several attempts at opening and closing the canopy, on the final try it locked and jammed–trapping the pilot inside.

According to the briefing, the 27th Aircraft Maintenance Unit then ‘consulted Lockheed Martin and the F-22A System Program Office to determine alternative methods to open the canopy and extract the pilot.'”

Why is this man not smiling?

The solution? They used what appears to be a big-assed reciprocating saw to cut off the top of the canopy.

Took ’em five hours. The cost to replace the canopy was $182,205. POGO comments, “after tens of billions of dollars [spent on the F-22 program], what’s another $182,205?”