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Friday March 14, 2008
 Washington Post Staff Writer
Friday, March 14, 2008; Page D02 Chrysler,
which is restructuring a troubled business under private ownership,
told its workers in an e-mail yesterday that almost all of the company
will shut down for two weeks in July to save money. "This
year, in order to create better alignment and efficiency across
organizational lines and boost productivity, Chrysler will use a
corporate-wide vacation shutdown for the weeks of July 7 and July 14,"
chief executive Robert L. Nardelli wrote to Chrysler's 71,578 employees.
Sales of new autos are down 5.4 percent this year, as the economy flags
and the national average price of gasoline tops $3 per gallon.
Chrysler's sales are down 13 percent for the first two months of this
year compared with last year. Toyota Motor said yesterday that it would cut production of its Tundra pickup trucks at plants in Texas and Indiana.
Automakers in recent years have selectively shut down plants or entire
manufacturing units, usually during the summer, to save money. General Motors and Ford plan two-week plant shutdowns this summer. During the technology crash of 2001, several Silicon Valley companies, such as Adobe Systems and Sun Microsystems, ordered employees to take a week off to save money.
But Chrysler's shutdown is notable for two reasons: It will include all
of Chrysler's employees except for minimal staff needed for what
Nardelli called "business critical operations." It's also notable
because of the company's current state of play -- executing tough cuts
in a turbulent economy to prepare it for sale, likely to another
automaker. "They want to use the urgency that comes with the crisis atmosphere" in the current economy, said David Cole, an analyst at the nonprofit Center for Automotive Research. Cerberus Capital Management
bought an 80 percent stake in Chrysler from Daimler for $7.4 billion
last May, taking the automaker private. Cerberus has been paring the
company to make it attractive to a buyer, possibly Volkswagen or the Nissan-Renault alliance, Cole said.
The current economic volatility -- retail sales fell and jobs were lost
in February, according to government reports -- gives Chrysler extra
leverage to make the cost-savings cuts it wants, including the July
shutdown, Cole said. Nardelli encouraged Chrysler workers to
take vacation during the shutdown, during which they will be paid. The
cost-savings result in temporarily idling Chrylser's 27 manufacturing
plants. Employees who will have to work during the shutdown include
those that deal with customers and dealers, said Chrysler spokeswoman
Mary Beth Halprin. Last year, Chrysler negotiated a contract with the United Auto Workers
that changes the benefits structure for the company's employees,
significantly lightening Chrysler's long-term obligations. Also, the
company announced last year that it would lay off as many as 12,000
workers and discontinue several slow-selling vehicles, including the
Crossfire sports coupe and Magnum muscle sedan. Staff researcher Richard Drezen contributed to this report. | | Posted by alfred at 8:56 PM - | |
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Washington Post Staff Write
Friday, March 14, 2008; Page A12
An employee with the Indian Embassy in Washington and Indian government
agencies conspired with an international electronics executive to
obtain secret weapons technology from U.S. companies, according to a
guilty plea the businessman made yesterday in federal court. The
plea by Parthasarathy Sudarshan, 47, before a federal judge in
Washington suggests the Indian government violated a pledge made in
2004 that it would not try to bypass U.S. export-control laws and
regulations that were imposed after India tested a nuclear weapon in 1998.
The Bush administration has invested significant effort in seeking to
conclude a deal that would give India access to U.S. civilian nuclear
technology. The deal, which has stalled because of political
difficulties in India, requires final approval from Congress, and some
lawmakers expressed outrage after an indictment of Sudarshan was
unsealed last year. The Indian Embassy did not respond to a request for comment. In a separate case announced yesterday, a Minnesota
company, MTS Systems Corp., pleaded guilty and was sentenced to two
years' probation and fined $400,000 for repeatedly falsifying documents
so it could illegally export equipment for use in India's nuclear
program. According to court documents, Sudarshan, as chief
executive of Cirrus Electronics, sought to evade the export laws by
arranging for critical parts needed for missiles, space launch vehicles
and fighter jets to be shipped to Singapore, which did not require a license from the Commerce Department. The parts then were secretly rerouted to India.
The documents said that Sudarshan worked closely with an Indian Embassy
employee identified only as "co-conspirator A." At one point, according
to court documents, Sudarshan advised the official that a shipment of
microprocessors for combat aircraft "is leaving for Singapore, as we do
not want it to be held up at U.S. customs for want of business
registration and export code numbers, etc." Sudarshan, of Simpsonville, S.C.,
agreed to cooperate with the investigation as part of his guilty plea
and faces a maximum five-year prison term for conspiring to violate two
federal laws. Sudarshan's attorney, Reid Weingarten, did not return a call seeking comment.
| | Posted by alfred at 7:24 PM - | |
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 Washington Post Foreign Service
Friday, March 14, 2008; Page A12
MEXICO CITY, March 13 -- The lower house of Mexico's
Congress launched a corruption investigation Thursday targeting the
interior minister, a move that politically weakens the nation's second
most powerful official and imperils a major energy initiative. A
commission approved by the Chamber of Deputies will pore over
allegations that Juan Camilo Mouriżo, who has been interior minister
for less than two months, helped his wealthy father secure government
oil contracts. The allegations date to 1997 and involve
government contracts approved while Mouriżo was a congressman and
worked in the energy department. They are particularly sensitive
because Mouriżo is trying to persuade the Congress to approve
controversial changes that would allow Mexico's huge, government-run oil company to enter into development partnerships with foreign oil firms.
The battle over Mouriżo's case illustrates the fundamental fissure in
Mexican politics, pitting President Felipe Calderżn's National Action
Party, or PAN, against the Democratic Revolutionary Party, or PRD,
which is pushing for the interior minister's resignation. Leaders
of the PRD, which narrowly lost the presidency in 2006, oppose the
proposed oil plans and have accused Calderżn of trying to privatize a
company that many Mexicans consider a part of their national heritage.
Calderżn has said he will not privatize the company, Petrżleos
Mexicanos, or Pemex.
Mouriżo, 36, has proclaimed his innocence. This week, he turned over
documents related to his case to Mexico's attorney general, a gesture
perceived here as an attempt to demonstrate confidence that he will be
absolved. His supporters in Congress hope the commission will
eventually restore the political spark of a rising star who is widely
considered a leading contender for the presidency in 2012. "The
formation of this commission is going to prevent the PRD's attempts to
discredit the interior minister and the PRD's scandalous media
campaign," Rogelio Carbajal, a PAN congressman, said in an interview
Thursday. "There has been no illicit conduct by the interior minister."
| | Posted by alfred at 7:20 PM - | |
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 Washington Post Foreign Service
Friday, March 14, 2008; Page A10
BAGHDAD, March 13 -- Iraqi leaders have failed to take advantage of a
reduction in violence to make adequate progress toward resolving their
political differences, Gen. David H. Petraeus, the top U.S. commander in Iraq, said Thursday.
Petraeus, who is preparing to testify to Congress next month on the
Iraq war, said in an interview that "no one" in the U.S. and Iraqi
governments "feels that there has been sufficient progress by any means
in the area of national reconciliation," or in the provision of basic
public services. The general's comments appeared to be his
sternest to date on Iraqis' failure to achieve political
reconciliation. In February, following the passage of laws on the
budget, provincial elections and an amnesty for certain detainees,
Petraeus was more encouraging. "The passage of the three laws today
showed that the Iraqi leaders are now taking advantage of the
opportunity that coalition and Iraqi troopers fought so hard to
provide," he said at the time. Petraeus came back to Iraq a
year ago to implement a counterinsurgency strategy, backed up by a
temporary increase of about 30,000 U.S. troops, intended to reduce
violence so Iraqi leaders could pass laws and take other measures to
ease the sectarian and political differences that threaten to break the
country apart. The Shiite-led government of Prime Minister Nouri al-Maliki has won passage of some legislation that aids the cause of reconciliation, drawing praise from President Bush
and his supporters. But the Iraqi government also has deferred action
on some of its most important legislative goals, including laws
governing the exploitation of Iraq's oil resources, that the Bush
administration had identified as necessary benchmarks of progress
toward reconciliation. Many Iraqi parliament members and other
officials acknowledge that the country's political system is often
paralyzed by sectarian divisions, but they also say that American
expectations are driven by considerations in Washington and do not
reflect the complexity of Iraq's problems. In what appeared to
be a foreshadowing of his congressional testimony, which his aides said
he would not discuss explicitly, Petraeus insisted that Iraqi leaders
still have an opportunity to act. "We're going to fight like the
dickens" to maintain the gains in security and "where we can to try and
build on it," he said. While violence has declined dramatically since late 2006, when thousands of Iraqis were being killed each month, U.S. military
data show that attacks on U.S. troops and Iraqi civilians have leveled
off or risen slightly in the early part of 2008. "I don't see an
enormous uptick projected right now," Petraeus said, speaking in his
windowless office in the U.S. Embassy, which is housed in Saddam Hussein's former Republican Palace. "What you have seen is some sensational attacks, there's no question about that."
Petraeus said several factors may account for the recent violence,
including increased U.S. and Iraqi operations against insurgents in the
northern city of Mosul -- which has lately become one of Iraq's most dangerous -- and insurgent efforts to reestablish some of their havens in Baghdad. And Petraeus said U.S. commanders could not discount the possibility that insurgents "know the April testimony is coming up."
The additional forces sent to Iraq last year have begun to depart and
will be gone by midsummer, leaving in place a baseline U.S. presence of
about 130,000 troops. Petraeus said it would increasingly fall to Iraqi
security forces and neighborhood patrols funded by the United States to
help keep violence down. Petraeus also said the United States
would temporarily freeze further reductions in its troop presence to
allow for a "period of consolidation and evaluation after reducing our
ground combat forces by over a quarter." He said he would discuss the
length and timing of what the military terms an "operational pause"
during his testimony. Sadr issued his cease-fire in August 2007 and renewed it last month in an attempt to increase his control over his Mahdi Army
militia and expel renegade fighters. U.S. military commanders who once
saw Sadr and his forces as enemies now speak deferentially of the
cleric, who has maintained his insistence that the U.S. occupation must
end. In the interview, Petraeus conceded that some elements
of both the Awakening movement and the Mahdi Army may be standing down
in order to prepare for the day when the U.S. presence is diminished.
"Some of them may be keeping their powder dry," Petraeus said of Mahdi
Army members. "Obviously you would expect some of that to happen. "The
issue is, again," he continued, "how to sort of prolong what has been
achieved, in just a host of different neighborhoods, villages, towns
and cities, so that the Iraqi structures can continue to gather
strength." Sunni fighters in the western province of Anbar
who have joined the Awakening "are waiting for the next opportunity,"
not the next war, Petraeus asserted. "What they want to do is get more
closely linked with Baghdad so they can continue to benefit from the
enormous oil revenue wealth which is pouring into this country." Petraeus said he and U.S. Ambassador Ryan C. Crocker
had "repeatedly noted that it's crucial that the Iraqis exploit the
opportunities that we and our Iraqi counterparts have fought so hard to
provide them." Correspondents Sudarsan Raghavan and Joshua
Partlow in Baghdad and staff researcher Robert E. Thomason in
Washington contributed to this report.
| | Posted by alfred at 7:13 PM - | |
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Published: March 14, 2008 Bear Stearns, facing a grave liquidity crisis, reached out to JPMorgan
on Friday for a short-term financial lifeline and now faces the
prospect of the end of its 85-year run as an independent investment
bank. With the support of the Federal Reserve Bank of New York, JPMorgan said in a statement that it had “agreed to provide secured funding to Bear Stearns, as necessary, for an initial period of up to 28 days.” For
the next month, JPMorgan will work with Bear Stearns to reach a
solution for its financing crisis. Options could include organizing
permanent financing or, according to people briefed on the discussions,
buying the bank for a discounted price. “JPMorgan Chase is
working closely with Bear Stearns on securing permanent financing or
other alternatives for the company,” JPMorgan said in its statement. The
rescue plan represents a devastating if not ultimately final blow for
Bear Stearns, a scrappy and until now resilient investment bank that
carved out a niche for itself by mastering the intricacies of the
United States mortgage market. But after two of its hedge funds
that specialized in the subprime mortgage market collapsed last summer,
Bear’s expertise became its Achilles’ heel as the plummeting market for
complex securities tied to subprime mortgages severely damaged its core
business. In recent days, Bear’s stock has plummeted more than 20
percent as investors as well as clients and broker dealers have shied
away from the firm, fearing that their continued exposure to plunging
real estate assets threatened their solvency. The announcement on Friday did little to prevent wholesale selling in the firm’s stock, which was down 47 percent at 11 a.m. Earlier
this week, Bear’s chief executive, Alan Schwartz, said publicly that
his firm had ample liquidity, but his words have not been enough to
prevent what seem to be a classic run on the bank. In a statement
issued on Friday, he said: “Bear Stearns has been the subject of a
multitude of market rumors regarding our liquidity. We have tried to
confront and dispel these rumors and parse fact from fiction.
Nevertheless, amidst this market chatter, our liquidity position in the
last 24 hours had significantly deteriorated. We took this important
step to restore confidence in us in the marketplace, strengthen our
liquidity and allow us to continue normal operations.” While
Bear may have some degree of short-term cash on hand, it is by no means
sufficient if all its creditors demand to be paid at once. It has some
valuable businesses like its hedge fund servicing and back office unit,
as well as aspects of its real estate operations, but in light of the
current market conditions it is unlikely to command a high price,
especially from JPMorgan, which has said repeatedly that it is not in
the market for an investment bank.
| | Posted by alfred at 11:18 AM - | |
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