Gene P. Bloch
CNN New York
CNNMoney.com was the first to report this morning that General Motors has notified 1,100 dealerships targeted to be shut down. The company has indicated up to 2,600 of its dealerships – or 42% – will be closed over the next year. Unlike Chrysler’s announcement Thursday which detailed a list of 789 dealers as part of filing in bankruptcy court, GM says it will not put out a master list of dealers that are hearing from the company today. As CNNMoney reports, metro area and suburban dealers are expected to feel the biggest hit.
GM has a conference call to discuss its strategy on noon today – it’s headed toward a June 1 restructuring deadline, and a Chapter 11 filing is looking increasingly likely.
No relief at the gas pumps – AAA reports regular unleaded rose 9-tenths of a cent to $2.29 a gallon, the 17TH straight increase. The average price is still 44% lower than last July.
In today’s Energy Fix, gas prices should go down if electric cars hit the market in large numbers. When that times comes, car shoppers will find the new vehicles look different than what’s on the road right now. The GM and Ford designers we talked to said that taking out the internal combustion engine and the cooling system that goes with it, a whole new world of design possibility opens up. Ford is even taking it’s inspiration from nature… fish and other animals!
A trifecta of decent economic news this Friday – the Reuters/University of Michigan index of consumer sentiment rose to an eight month high, while the Consumer Price Index was unchanged in April, right in line with expectations.
And Industrial production was down 0.5% in April – but that’s the smallest drop in six months.
The latest recipients of federal assistance under the TARP – or Troubled Asset Relief Program – is life insurers, as they too have been suffering in the economic crisis.
Six of those companies – Allstate, Ameriprise Financial, Hartford Financial Services Group, Lincoln National Corp, Principal Financial, and Prudential Financial, have qualified for TARP money, according to the Treasury Department.
In California, Gov. Arnold Schwarzenegger is threatening to sell off San Quentin and other state properties if his proposed budget cuts fail. He estimates the state prisons would have to release up to 38,000 prisoners, half of them illegal immigrants.
On CNNMoney today:
ROAD TO RESCUE
* AIG 'bonusgate': Lessons learned. As anger resurfaces about AIG's controversial bonuses, lawmakers say a perfect storm may be forming for broad action on compensation reform.
* Bank execs feel new 'stress.' Some financial firms may have little choice but to shake up their board room - and some top officials could also be at risk.
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