Will what's left in TARP go to Detroit Big 3?

The collapse of legislation in the Senate to help save the Detroit Big 3 may or may not spell the end of emergency aid for the automakers. The White House says it's considering using what's left of the $700 billion TARP financial bailout fund to finance the $14 billion bridge loan that was torpedoed Thursday by GOP senators. The bridge loan would keep the Big 3 alive until a longer-term aid plan was taken up by the new, more Democratic Congress in January.

If the bridge loan fails, Chrysler says it will close all 59 of its plants and lay off 53,000 workers. GM hasn't announced what it would do, but even if it stays alive through Chapter 11 reorganization, it would probably be forced to close plants, adding thousands more to the unemployment rolls.

The impact on the U.S. economy, which has seen job losses totaling nearly 2 million through November, would be devastating. A big plunge in the markets today could concentrate minds, and, one way or another, produce the $14 billion bridge loan for the Big 3.

A not incidental note: The drive by Senate Republicans that killed rescue legislation was led by GOP members from Southern states, where international automakers have non-union production facilities. Heading the Southern opponents was Richard Shelby of Alabama, where the internationals have several major facilities.

$73 hourly salary for Big 3 production workers adds up to bad math

Most media commentary on General Motors and the Big amounts to one endless smackdown. But yesterday and today the New York Times offered quite different takes on the ailing domestic automakers. First, there was the profile of GM Vice Chairman Robert Lutz. My favorite quote from the tart-tongued Lutz:

“My sense of frustration is that all of this is hopelessly out of date,” he said. “Much of what I read and hear is reflective of the criticism that would have been legitimate of General Motors in the 1980s, but not today.”

The other piece is an admirable deconstruction of that frequently quoted "$73 an hour" that Big 3 production workers are supposed to make -- way over the $45 hourly salary that Toyota, Honda and other international automakers pay to their American workers. The biggest reason for the difference is the $15 share of the Big 3 hourly wage that covers pension payments to retirees. The internationals don't have to add that number to the wage costs of their workers because they don't have -- yet -- many thousands of retirees.

The bad news about newspapers

Bad news about newspapers just keeps coming. Tribune Co., owner of the Chicago Tribune and Los Angeles Times, among other nameplates, has filed for bankruptcy, McClatchy is reportedly trying to sell its prestigious (19 Pulitzers) Miami Herald and Scripps Howard is virtually begging for a buyer of its 150-year-old Rocky Mountain News in Denver.

Penny stocks now include some major newspaper companies: Journal Register, whose holdings include 22 dailies, among them the New Haven Register, sells for 6/10 of 1 cent a share, down more than 99 percent from its price two years ago. GateHouse Media, which owns eight dailies and more than 500 community publications, sells for 8 cents a share, also down more than 99 percent from its price two years ago.

Companies with the most prestigious nameplates have also been sucked into the downward swirl. The New York Times Co.'s share price has fallen from the mid-$20s two years ago to the mid-$7s, and the Washington Post Co., from the $700s to the $400s.

The recession has accelerated these dismal trends, but the bigger and longer-term problem is the migration of print readers to the Internet. Newspapers have responded by developing websites, but in a ham-handed way. Basically, the sites are simply electronic versions of the print products, with a few webby bells and whistles. Newspapers are mostly clueless in building websites that are interactive, socially sticky communities.

Here's what a sampling of dailies in some of the biggest markets offer potential online audiences in the millions: Detroit Free Press, Atlanta Constitution, San Diego Union-Tribune. Is it any wonder that newspaper web traffic, overall, shows such weak growth, compared to non-newspaper news sites?

An important exception is the New York Times, whose website attracts 20 million unique visitors monthly -- 20 times its print circulation. But even the Times site doesn't really exploit the potential of its huge, demographically attractive audience. If it did so, I argue in this article on Online Journalism Review, it might generate millions of dollars that would offset the double-digit percentage losses in advertising in the Times print version.

The Times' 20 million unique visitors are a community waiting to be formed, but the Times has to create some social networking opportunities for that to happen. Other newspapers, big and small, could create their own communities. Look at the success of Facebook and other networking sites. They are filling a vacuum while newspapers stumble about trying to convert their print products to pixels.

Very bad news -- and there are few signs it'll get better.

"Meet the Press" gets a new moderator, but it's still stuck with its 60-year-old format

The new moderator of "Meet the Press" -- the successor to the late and venerated Tim Russert -- is David Gregory. Gregory is articulate, well informed, convivial and probing. When he feels he's being spun, he can be waspish. Early on, President Bush gave him the White House Press Room nickname "Stretch," in recognition of his 6-foot-5 height. But after what Bush seemed to think was one too many assaultive questions, he cut the NBC correspondent down to size with the new nickname "Little Stretch."

Given all his qualities, Gregory would seem to be destined to be a successful successor to Russert. But is that what's desirable? Astonishingly, "Meet the Press" has changed very little in its 60 years. The format is (usually) a top government official being grilled by the moderator. Russert pumped some new life into the creaky format by displaying sometimes embarrassing and even contradictory quotes by the guest (in block letters or even video), and then, prosecutorial style, asking the quotee to explain.

Transitional "Meet the Press" host Tom Brokaw did just that Sunday morning with President-elect Barack Obama. But Obama knows how to cool down the hot seat. Brokaw tried to get Obama to say something for the record about whether he supported a "pre-packaged bankruptcy" as a condition for federal loans to General Motors, Ford and Chrysler. Obama, shrewdly, refused to step into a trap that would launch a flurry of stories that would force him into defensive explanations over several days that undermined his President-elect maneuverability. When Brokaw persisted, Obama just kept moving the issue to other areas of discussion.

I don't see how Gregory will be able to extract much more from his subjects. He is, of course, younger (38), hungrier and more energetic than Brokaw (who, in his 68th year, would prefer to be fishing in Montana) and, as he's shown at Bush's White House press conferences, can throw some sharp darts when he thinks he's being spun. But Obama and his communications-savvy team will be ready for the darts. Other potential "MTP" guests, Democratic or Republican, also have learned how to cope with the "gotcha"-tuned format.

"Meet the Press Executive Producer Betsy Fischer should use the transition from Russert to Gregory to take the program to a whole new level that reflects the radical changes that have come to how the media and the public relate in a world where the consumers of news can be producers as well. "Meet the Press" is, to be blunt, out of date with its 60-year-old format. One obvious post-Russert change it could make would be to display not only the sometimes embarrassing or contradictory quotes of the interviewee, but comments by "MTP" viewers, who would be invited to contribute their thoughts as the program is being broadcast live Sunday morning. Those on-the-fly comments would give Gregory a rationale to be persistent when his subject tries to change the subject -- as Obama did, and successfully so, with Brokaw Sunday.

Uinterview -- whose subject is the entertainment world -- is one example of how to turn passive audiences into active, and productive, participants -- no green room required.

Maybe "Meet the Press" needs a new name -- "Meet the Press & the Public."

If the auto Big 3 is a bad business model, which industries are better?

The Big 3 automakers don't deserve federal loans, say critics, because they have lousy production, sales and financial records and their restructuring promises are too little too late. So which other U.S. industry has a better business model, and can prove it by its composite stock performance or at least its last quarterly and yearly results ?

Banks?

Investment companies?

Mortgage companies?

Real estate investment trusts?

Hedge funds?

Retailers?

Electronics?

Internet?

Chemicals?

Trucking?

Restaurants?

Newspapers?

Airlines?

Health care?

If you want to see how well (i.e. badly) any of these industries are performing, check out this chart.

Which of the most financially hurt companies in these industries have presented detailed restructuring plans that include their CEO's reducing their salaries to $1 per year until the firms' financial situations are turned around, as the Big 3 chiefs have pledged to do? If any companies from these industries have done so, I missed it.

If Congress turns thumbs down and forces the Big 3 into bankruptcy, that decision will create an economic cataclysm more severe than any of the worst recession scenarios that have been spread before us like upside down Tarot cards.

Astonishingly, newspapers and the rest of the media -- among the worst industry performers -- are clamoring loudest to gangplank the Big 3 into bankruptcy.

I hope they're spared what they wish on the Big 3.

Big 3's restructuring is a road map to saving jobs and making them green

The blather about "pre-packaged bankruptcy" for General Motors and possibly Ford and Chrysler continues to echo in media reports, but is fading fast as the automakers present their restructuring plans as a precondition to federal loans.

Bankruptcy, however it would be tied up with ribbons, would ensured the death -- immediate or within a few years -- of that considerable part of the auto industry owned by U.S. companies. The auto Big 3 is often called "Detroit," but nearly half of the companies' domestic jobs -- 112,000 -- aren't in Detroit or Michigan. They're in Ohio, Indiana, Wisconsin, California and other states. Then there are all the other related jobs -- auto parts, sales, etc. -- that bankruptcy would also wipe out.

Take a look at the restructuring plans presented to Congress by GM, Ford and Chrysler. They all agree that even under the worst production scenario, each company can return to profitability over the next four years -- and pay back the $34 billion total in loans they're seeking.

They companies detail soon-to-be-realized savings from their historic 2007 labor contracts with the United Auto Workers, and other recent and future cost cutting that will, finally, let them produce all their vehicles -- including money-losing small ones -- at a profit, and compete with international companies whose plants are located in non-union states.

From the GM plan:

"General Motors’ total cost per hour for new hires can now be as low as $25, growing to $35 over time, significantly below the average fully-loaded labor cost for Toyota, which public sources indicate is between $45 and $50 per hour."

With all its restructuring, the Big 3 won't ever be as big as they used to be, but will still be the power train of U.S. industry, and, with the billions they plan to invest in advanced technology, make a big contribution to the necessary greening of American jobs.

Obama and Pakistan: A die waiting to be cast

Will President-elect Obama's "new beginning" mean a new U.S. war -- in Pakistan's terrorist havens bordering Afghanistan?

Presenting his "national security" team Monday, Obama was circumspect:

"We're going to have to bring the full force of our power -- not only military but also diplomatic, economic and political -- to deal with those threats. Not only to keep America safe but also to ensure that peace and prosperity continue around the world."

But early in his race for the Presidency, on Aug. 1, 2007, he was very precise about what he would do as Supreme Commander:

"I understand that President Musharraf has his own challenges, but let me make this clear. There are terrorists holed up in those mountains [of mostly lawless tribal areas in northwestern Pakistan] who murdered 3,000 Americans. They are plotting to strike again. It was a terrible mistake to fail to act when we had a chance to take out an al Qaeda leadership meeting in 2005. If we have actionable intelligence about high-value terrorist targets and President Musharraf won't act, we will."

Pakistan's then foreign minister in the since-resigned Musharaff government, Khusheed Kasuri, assailed Obama's "very irresponsible statement," and Pakistani protests against the candidate's remarks included the very public burning of a U.S. flag in Karachi.

The new Pakistan government -- headed by Asif Ali Zardari -- is just as opposed to U.S. military action in the tribal areas. The Pakistani ambassador to the U.S., Husain Haqqani,
said in September at a presentation at the Carnegie Endowment for International Peace in Washington:

"Pakistan will not allow foreign troops to conduct operations on Pakistani soil. Never."

Haqqani cannot be stereotyped as a super-nationalist or creature of Pakistan's military. A journalist as well as diplomat, he has a inside-out understanding of U.S. interests from having been a visiting scholar at the Carnegie Endowment, adjunct professor at the School of Advanced International Studies at Johns Hopkins University and a professor at Boston University.

At the Carnegie event, Haqqani elaborated on why Pakistan was unalterably opposed to unilateral U.S. military action in his country:

"...if you go and just conduct the operation like this latest one in which you don’t get any identifiable target, then all you do is enrage people and create ill will. And that is not what you need if you are going to have a holistic approach to fighting terrorism. You need the people to support those who fight terrorism rather than those who are on the side of the terrorists."

Haqqani maintains that contrary to most perceptions in the U.S. media, Pakistan's military is making gains in those tribal areas that have been terrorist havens. He says the U.S. must be patient and give Pakistan time to gain control in the northwest, and to complete the exit of the military from politics.

But will the Obama administration be heedful? Frustrated by its inability to subdue the Taliban rebels in the Afghanistan war, the U.S. is, inch by inch, moving the battle to Pakistan's northwest, where rebels and terrorists hide and incubate. Based on his public statements, Obama appears ready to make even bolder incursions -- to protect the U.S. and its vital interests.

If Obama indeed pursues this interventionist course, what will happen to the nation of Pakistan? Will the military, which had controlled the government for more than a decade, reverse its decision to withdraw from politics -- signaled by the resignation of Musharaff in early 2008? Will Islamic militants in an already fragile nation state manage to seize control or at least be a partner in a coalition government?

In October, during the U.S. presidential campaign, President Zardari gave high government awards to Obama's VP running mate, Joseph Biden, and Republican Sen. Richard Lugar for their legislation to give Pakistan $7.5 billion in non-military aid over five years. The awards seemed to indicate at least a tacit acceptance of the bill's language regarding U.S. military aid to Pakistan -- that it would not be given unless the U.S. secretary of state certified that Pakistani security forces "are making concerted efforts to prevent al Qaeda and associated terrorists groups from operating in the territory of Pakistan."

The Biden-Lugar bill will be taken up by the House and Senate when the new Congress convenes in January. If it passes, will Obama -- who has made it clear that he will be the last word on setting U.S. foreign policy -- give it a chance to succeed? Or will he decide to expand the Afghanistan war to northwest Pakistan?

Depending on which way he goes, Pakistan could be his Iraq.