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Wednesday, February 04, 2009

Free Internet Press Newsletter - Wednesday February 4 2009 - (813)

Wednesday February 4 2009 edition
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North Carolina Gov. Tells State Agencies To Prepare For Layoffs
2009-02-03 17:53:58
Gov. Beverly Perdue said this morning that state agencies should prepare plans for potential layoffs, even though she said she didn't think they would be necessary.

At a Council of State meeting this morning, Perdue said that personnel managers need to update their procedures for layoffs.

"I want everybody to be prepared," Perdue told reporters afterwards. "I do not anticipate RIFs or layoffs or even four-day work weeks. But I think it does us all justice to be prepared as the economy softens. This is not a paper exercise we are about. Tough decisions are going to be made.

"There are going to be tough decisions by families around their kitchen table, and state government is no different."

Last week, Erskine Bowles, president of the UNC system, raised the possibility of employee furloughs.

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Commentary: Bank Robbers In Oxford Suits And Mercedes
2009-02-03 17:53:40
Intellpuke: This commentary was written by McClatchy Newspapers columnist Joseph L. Galloway, and appeared on the McClatchy Newspapers online edition for Wednesday, January 28, 2009. Mr. Galloway's commentary follows:

This is a story of the greatest bank robbery in the history of the world, a tale that would have the James gang and John Dillinger and Willie Sutton green with envy.

In this story, no mobsters or Robin Hoods burst into a bank, guns drawn, shouting, "Hand over the money."

Oh no. This is the story of a reverse bank robbery, a tale of how the banks looted the national treasury and robbed the American taxpayer and corporate stockholders of billions, if not trillions, of dollars.

This was no carefully timed eight-minute holdup. This one happened in slow motion, and it's continuing as this column is written. The banks are holding guns to their heads as they empty our pockets, threatening to pull the trigger and fall down dead if we don’t give it up.

The first overt act of this holdup began at the end of 2007, when the five largest American securities firms paid their top people $66 billion in bonuses based on their "profits" the preceding year - profits that weren't profits at all, but huge, unimaginable losses.

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Hawker Beechcraft To Layoff 2,300 Employees
2009-02-03 17:53:15

Hawker Beechcraft will eliminate 2,300 positions, the company said in a memo Tuesday.

The layoffs will be throughout the year, but the majority will receive 60-day notices on Friday.

The company warned employees in early January of the upcoming cuts and that they would affect all areas and levels.

The step is "extremely painful, but one that is absolutely necessary," Hawker Beechraft chairman and chief executive Jim Schuster said in the memo.

"While I wish I could commit to you that this will be our final action, I cannot do so at the time given the extreme volatility in the marketplace."

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Tom Daschle Withdraws As Nominee For HHS
2009-02-03 15:49:08

Thomas A. Daschle, President Obama's choice to be secretary of health and human services, has withdrawn his nomination today, citing the distractions that followed his failure to pay all of his taxes in recent years.

His decision came as another prominent Obama nominee, Nancy Killefer, withdrew her nomination to be chief performance officer because of similar - and smaller - tax lapses.

Daschle, a former Senate majority leader, had come under pressure since Friday, when it was reported that he did not pay $146,000 in back taxes, primarily for the use of a car and driver given to him by an associate. He met Monday with members of the Senate Finance Committee to explain the omission and apologized. Some Republicans had questioned whether the nomination should go forward, and his confirmation vote had been postponed until at least the middle of next week.

Obama said Monday that he supported Daschle's nomination "absolutely."

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Motorola Earnings Decline Indicates Change In Cellphone Industry
2009-02-03 15:48:46

Cellphone sales are falling, manufacturers have announced thousands of layoffs and wireless carriers are finding it harder to acquire and keep customers.

It sounds like another tale of “recession bites industry,” but there are signs that this downturn is masking something more fundamental, that the cellphone industry’s best days are behind it.

A fourth-quarter earnings report on Tuesday by the telecommunications equipment manufacturer Motorola, reinforced that notion. The company, which is suspending its quarterly dividend, lost $3.6 billion in the fourth quarter, compared with earnings of $100 million in the period a year ago. Sales were $7.14 billion, down 26 percent, from $9.65 billion in the fourth quarter of 2007.

Motorola sold 19.2 million cellphones in the quarter, down 53 percent from the period a year ago. It went from being the world’s second-largest maker of cellphones in 2007 to its fifth-largest.

Analysts and investors are beginning to ask whether the industry as a whole can continue growing. The challenge is both simple and daunting: how to expand when four billion of the six billion people on the planet already have phones. And even in developing countries where there are under-served markets, subscribers spend less on phones and services.

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Kyrgyzstan Reported To Deny U.S. Use Of Base
2009-02-03 15:48:16
Kyrgyzstan is ending U.S. use of a key airbase that supports military operations in Afghanistan, Kyrgyzstan's president was quoted as saying Tuesday.

A Kyrgyz decision to end the U.S. use of Manas, just outside the Central Asian nation's capital of Bishkek, could have potentially far-reaching consequences for U.S. and NATO operations in Afghanistan. Gen. David Petraeus, commander of U.S. forces in Afghanistan and Iraq, said during a trip to Central Asia last month that Manas air base would be key to plans to boost U.S. troop presence in Afghanistan by up to 30,000 soldiers in the coming months.

Interfax and RIA-Novosti quoted Kurmanbek Bakiyev as making the statement just minutes after Russia announced it was providing the poor ex-Soviet country with billions of dollars in aid.

The Kyrgyz government "has made the decision on ending the term for the American base on the territory of Kyrgystan and in the near future, this decision will be announced," Bakiyev was quoted by ITAR-Tass as saying.

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Chinese Move More Money Overseas
2009-02-03 07:19:31
More money is moving in a new direction in China - out.

Some Chinese are so eager to turn their yuan into other assets that when an online real estate brokerage organized a tour of foreclosure auctions in the United States, it received so many applications that it had to turn away nearly 400 people.

In Shanghai, cash-rich Chinese companies are buying high-yield bonds issued by distressed American companies at a time when many Western investors are steering clear of bonds even from solid companies.

All over the world, Chinese companies are sending home fewer of the billions of dollars they earn from exports, parking them in overseas bank and brokerage accounts instead.

In Hong Kong, wealthy mainlanders are turning up at jewelry stores in growing numbers seeking diamonds, big ones.

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Federal Immigration Detention Center Considered For Los Angeles Area
2009-02-03 07:19:04
The federal government is looking for contractors to build a possible detention center in the Los Angeles, California,  area that would hold up to 2,200 illegal immigrants and others suspected of violating immigration laws.

U.S. Immigration and Customs Enforcement spokeswoman Virginia Kice said last week that the agency was "exploring the feasibility of such a project," though she said no definitive decisions had been made.

"ICE is continuing to review its options to determine how to best meet the agency's future local and national detention needs," she said.

The Department of Homeland Security posted an online notice saying that the center would be within 120 miles of downtown Los Angeles and owned and operated by a contractor, which would provide the facilities, personnel, management, equipment and services. In recent years, the government has increasingly contracted out its immigration detention services nationwide to private companies such as the Corrections Corp. of America and the GEO Group.

The move toward privatization has been criticized by immigrant rights advocates, who say that detention has become a lucrative business and that detainees are often kept in unsafe conditions without access to adequate medical care. Eighty-three detainees have died while in immigration custody since 2004, according to the immigration agency, prompting congressional inquiries about detainee medical care.

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Canadian Auto Workers Worried GM May Pull Out Of Canada
2009-02-03 17:53:51
Leaders of the Canadian Auto Workers union are using increasingly conciliatory language as they await word from General Motors on the fate of the company's Canadian operations.

CAW Local 222 president Chris Buckley says he's concerned that the company may pull out of Canada entirely, which he says would affect about 12,000 workers and hundreds of thousands of indirect jobs.

Buckley says he's concerned GM may escalate its Canadian cutbacks after the company's board of directors wrap up a meeting in Detroit Tuesday.

He also says it doesn't bode well that U.S. auto sales figures to be released Monday are expected to show a sharp drop for GM, making it 14 consecutive months that sales are down.

Buckley says he wants to speak with GM officials as soon as possible to pass on that the union is willing to be part of the solution.
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ING Selling Stake In Canadian Insurance Unit
2009-02-03 17:53:28

Dutch financial services behemoth ING Groep NV is selling most of its stake in its Canadian insurance business, ING Canada Inc., to investors for $1.75-billion.

ING is selling about half the stake to a group of big investors that the company didn't name, and plans to sell the rest via a public offering.

ING Canada, the country's largest insurance company, said Tuesday that ING Insurance International BV, a wholly owned, indirect subsidiary of ING Groep, has agreed to sell a minimum of $850-million of its shares based on a price of $25 per share in the Canadian operation to institutional investors on a private placement basis.

The company said it also separately intends to sell an additional $900-million shares at a price of $26.35 per share in a bought deal public offering led by CIBC World Markets Inc. and TD Securities Inc.

The underwriters have also been granted an over-allotment option to purchase up to an additional 5,124,000 common shares at the offering price.

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Canadian AFN Contender Targets Rival Native Group
2009-02-03 17:53:04
A new candidate for the leadership of the Assembly of First Nations in Canada says he wants to overhaul the organization so that it truly represents natives on and off reserves and drives its rival organization, the Congress of Aboriginal Peoples, out of business.

In a press conference on Parliament Hill announcing his candidacy for AFN national chief, Ontario native leader John Beaucage, said the Congress, led until recently by new Senator Patrick Brazeau, does not speak for most aboriginals.

However, Beaucage said the AFN needs to dramatically reform its voting structure in order to credibly claim it represents all aboriginals. To win the AFN leadership this summer, Beaucage must play by the organization's existing rules, which means campaigning in a race in which only the country's 633 on-reserve chiefs have a vote.

If he wins, Beaucage promises to extend AFN voting rights to every aboriginal in the country regardless of where they live. He argues this will eliminate the need for Ottawa to fund the Congress, which advocates for off-reserve aboriginals.

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Auto Sales Start 2009 At Abysmal Pace
2009-02-03 15:48:58
The first month of 2009 was at least as miserable for automakers as the second half of 2008, sales figures being released Tuesday show. Sales in the United States fell 49 percent for General Motors, about 40 percent for the Ford Motor Company and 32 percent at Toyota. 

Tight credit markets and the economic recession, now in its 14th month, are still keeping many customers away from dealerships and preventing some potential buyers from being able to get the vehicle that they want.

“There are some faint signals emerging that we may be near the bottom,” Ford's senior United States economist, Emily Kolinski Morris, said. Still, she added, “these conditions still imply vehicle sales limping along for many months to come.”

Drastic cutbacks in what are known as fleet sales - bulk deliveries to car-rental companies and other businesses - are a major reason for the large declines at G.M. and Ford. Ford said it sold just 2,000 vehicles to fleet operators, down from 14,000 in January 2008, and estimated that industry fleet sales were down 65 percent in January because many assembly plants were closed. G.M. said its fleet sales fell 80 percent.

“Lower fleet sales account for almost all of the decline from December to January,” said Ford’s sales analyst, George Pipas.

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Militants Cut U.S., NATO Supply Line To Afghanistan
2009-02-03 15:48:29
Militants blew up a bridge in northwest Pakistan on Tuesday, cutting the major supply line for U.S.-led troops in Afghanistan with an explosion that turned the narrow span into a jagged metal "V."

It was the latest, and perhaps most serious, attempt to block supplies to the U.S.-led mission against the Taliban.

The length of the slender metal bridge slanted to one side and was blocked by an overturned truck that spilled dozens of dusty bags into the pavement. Traffic from the bare hills continued on foot, with Afghans and Pakistanis, including women in burqas, hurrying their baggage over the dry riverbed.

A NATO spokesman in Afghanistan said supplies along the route had been halted "for the time being," but stressed the alliance was in no danger of running out of food, equipment or fuel.

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In Washington, Financial Regulation Shaping Up As Political Battleground
2009-02-03 07:19:58
Lost amid last week's bad economic news, an unexpectedly partisan vote on the stimulus and President Obama's saber-rattling over Wall Street bonuses were the opening shots of a battle over how far Washington should go to reshape the financial system.

But the clash won't remain in the shadows for long.

The administration is under mounting pressure to deploy hundreds of billions - perhaps trillions - of new dollars to shore up financial firms into which the government has already poured a fortune. Analysts say the only way to make such a politically unpopular step palatable is for the new president to explain what he'll do to ensure the problem never happens again.

That means a return to the kind of regulatory system that Wall Street and economic conservatives fought to dismantle going back to Ronald Reagan's presidency and continuing through that of George W. Bush - or something even more stringent.

Nor is the fight likely to remain confined to finance.

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U.S. Senate Confirms Holder As Attorney General
2009-02-03 07:19:17

The U.S. Senate confirmed Eric H. Holder, Jr., as the nation's first African American attorney general by a vote of 75 to 21 Monday, opening a new chapter for a Justice Department that had suffered under allegations of improper political influence and policy disputes over wiretapping and harsh interrogation practices.

Holder, 58, will arrive at the Justice Department headquarters in Washington, D.C., Tuesday for a swearing-in ceremony and to greet some of the department's 110,000 employees.

"The need for new leadership at the Department of Justice is as critical today as it's ever been," said Senate Judiciary Committee Chairman Patrick J. Leahy (D-Vermont). "This confirmation is going to do a great deal to restore the morale and the purpose throughout the department."

The Senate vote occurred four days after Holder overcame concerns by a small but vocal group of Republican  lawmakers about his position on national security and gun rights, as well as his recommendations in two controversial clemency decisions by President Bill Clinton.

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FTC Sues Pharmaceutical Firm For 'Pay-For-Delay' Pact
2009-02-03 07:18:49

The U.S. Federal Trade Commission has filed suit in federal court in an attempt to block a deal in which a manufacturer of a brand-name testosterone-replacement drug paid three competitors to delay rolling out cheaper generic versions.

The FTC said the "pay-for-delay" agreement violates antitrust laws, robs consumers of less-expensive alternatives and allows the brand-name drug maker an unfair monopoly. The state of California joined the federal agency in its complaint, which was filed last week in U.S. District Court in the Central District of California.

FTC officials are hoping the case will ultimately reach the U.S. Supreme Court. "We want to stop these unconscionable pay-for-delay deals that force consumers to overpay for much-needed drugs," said Jon Leibowitz, an FTC commissioner.

Androgel is a synthetic testosterone gel prescribed to men who have low levels of the hormone due to aging, cancer, or HIV/AIDS, among other conditions. Solvay Pharmaceuticals was granted a 17-year patent for Androgel in 2003, and it has become the drug company's second-highest grossing drug, earning about $400 million in annual sales.

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