Monday, May 11, 2009

Quick Notes & Articles for the Day - May 11

GM Needs Europe Funding Now - General Motors CEO Fritz Henderson said in a restructuring update Monday that the automaker has an "urgent" need for funding in its European business while it plans to start notifying North America dealers of closures later this week. Henderson said that bankruptcy is still "probable" as GM approaches the June 1 deadline to prove its viability to the U.S. government. As GM works to shed several brands, Henderson said the company is negotiating with two parties about Hummer on a deal that could be reached by the end of the month while a "number of parties" have come forward with interest in Saab.

Change in Antitrust Policy - The Justice Department withdrew Monday a report on monopoly policy issued last September, signaling a more aggressive antitrust policy under President Obama. "Withdrawing the Section 2 report is a shift in philosophy and the clearest way to let everyone know that the Antitrust Division will be aggressively pursuing cases where monopolists try to use their dominance in the marketplace to stifle competition and harm consumers," said Assistant Attorney General Christine Varney. "The recent developments in the marketplace should make it clear that we can no longer rely upon the marketplace alone to ensure that competition and consumers will be protected," Varney said.

BB&T Announces Plan to Repay Government Investment - BB&T today announced a plan to repay all of its preferred stock and warrants invested in the company through the U.S. Treasury’s TARP Capital Purchase Plan. “I am pleased to announce that BB&T is poised to be one of the first large financial institutions to repay the government investment,” said President and CEO Kelly S. King. As part of the plan, BB&T declared the third quarter 2009 dividend of $.15 per share, a 68% reduction compared to the third quarter last year. The move will preserve approximately $725 million in capital on an annualized basis. Additionally, BB&T announced that it has commenced a public offering of $1.5 billion of its common stock for sale to the public. In its news releases, BB&T has said it intends to use the proceeds of this offering, in addition to savings from the dividends, to repay the preferred stock and associated warrants BB&T issued under the TARP program.

Articles

How Ford Restructured Without Federal Help - By Paul Ingrassia - The Wall Street Journal - "You're forgiven if you think the Chrysler Bailout is a hot new car that competes with another model called the GM Rescue. Then there is the Ford Forgo, brought to us by the only Detroit auto maker to forgo government assistance, at least so far."

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