CNN Financial News Producer
Did we say $25 billion? Actually, make that $34 billion. Detroit's automakers submitted their turnaround plans to Congress Tuesday with the hopes of winning approval for a loan package they claim is necessary for their survival. The plans included job cuts – as many as 31,000 in the case of GM - salary cuts for top executives and the likely elimination of some well-known brands. But the companies are now asking the government for as much as $34 billion in federal loans instead of the $25 billion they originally wanted. GM is asking for up to $18 billion. Ford is looking for up to $9 billion. Chrysler wants a $7 billion. We'll see how Congress reacts to the new requests on Thursday, when the CEO's of the Big Three complete their drives from Michigan to Washington in their hybids.
Meanwhile, local United Auto Workers leaders from across the country will hold an emergency meeting in Detroit this morning to discuss concessions the union could make to help auto companies get government loans.
The CEO's of the Big Three drive their hybrids from Michigan to Washington – hoping to arrive in time for Thursday's encore appearance before Congress.
Unloading some brands is on the car companies' agenda, but we're learning this morning that maybe you can't go home again. The Swedish Government reportedly says that while it's ready to support Volvo and Saab, it doesn't want to take over the troubled brands from Ford and GM.
And just as Detroit's Big Three presented their turnaround plans to Congress, we learned that car sales continued to plunge in November, falling 37% from a year-ago and hitting a 26-year low. The nation's five largest automakers – GM, Ford, Chrysler, Toyota and Honda - each reported that sales dropped more than 30% from a year-earlier (47% in the case of Chrysler).
It's not just the automakers that are hurting. More than 700 car dealerships across the country have shut their doors so far this year. And more than twice number that could close in 2009. Others are resorting to crazy promotions – such as one Dodge dealership in Miami that's literally giving cars away.
The automakers are looking for their $34 billion as part of the government's $700 billion financial bailout plan. And the first official review of that plan says the Treasury Dept. has yet to address "critical" oversight issues to ensure the plan is working. The Government Accountability Office's study, presented to Congress Tuesday, found that the Treasury program needs more staff, better management, an improved transition effort and facilities to ensure banks are using bailout funds effectively. "Without effective oversight, Treasury cannot ensure that those receiving funds are complying with [the capital purchase program's] requirements," the report said.
Jobs took another painful hit in November, with planned cuts rising to the highest level in seven years. According to outplacement firm Challenger, Gray & Christmas, job cut announcements by U.S. employers soared to 181,671 last month, up 61% from October's 112,884 cuts, and 148% higher than the same period a year ago, when 73,140 job cuts were announced. November's total represents the second highest on record, shy of the 248,475 planned layoffs in January 2002, in the aftermath of the Sept. 11 terrorist attacks. Financial and retail industries were hit the hardest, while the energy, industrial goods and construction industries are actually hiring.
And payroll processor ADP says the economy shed 250,000 private-sector jobs in November. On Friday, we'll get the Government's monthly employment report. The consensus there is that the economy shed 325,000 jobs last month.
Wall Street's roller-coaster ride continues. Stock dropped out of the gate this morning as worries about the dismal economy once again darkened the mood on Wall Street.
Reported incidents of mortgage fraud grew by 45% in the second quarter compared to the year-ago period, as borrowers misstated their financial information to maneuver around tighter lending standards, according to industry data released Tuesday. Florida properties led the way with about one-fifth of mortgage fraud incidents reported in the second quarter. California was second and Illinois third, the Mortgage Asset Research Institute reported. Mortgage fraud incident reports had increased 42% in this year's first quarter, compared to the first quarter of 2007.
Gas prices fell 0.9 cents to $1.80 a gallon. That's the 77th consecutive decrease. According to AAA, the last time the national average price for a gallon of regular unleaded gasoline was near the current price was January 17, 2005, when the national average was $1.806. 3 states and Washington D.C. have regular unleaded gas prices of $2 and higher. 47 states have regular unleaded gas prices below $2. Oil prices are hovering around $47 a barrel. Crude dropped more than $2 Tuesday to a 3-1/2 year low.
And finally, we'll be looking for the Fed to release its Beige Book report, which summarizes regional economic conditions across the country. That's due out at 2 p.m.
Editor's Note: See Ali Velshi's full report on the markets and economy on AC360 tonight at 10pm ET.
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