Worst-case scenario presented to Congress: General Motors Corp.’s chief operating officer said this morning the automaker has presented a worst-case scenario to Congress in which it would need more money than the $13.4 billion allocated by the Treasury Department. But Fritz Henderson would not speculate on whether GM will need all of the $18 billion in government loans it sought from Congress in December. Henderson said he is confident GM will work out concessions from the United Auto Workers. GM, Chrysler and the union have been talking about labor cost reductions and other concessions required under the government’s loan terms. The companies have until Feb. 17 to hammer out amendments to their current labor contracts that would bring worker costs in line with those of employees at foreign auto companies’ plants in the U.S.
Struggling homeowners also targeted: The Senate will not approve more bailout money for banks unless it includes limits on executive pay and help for struggling homeowners, Senate Banking Committee Chairman Chris Dodd said today. “Executive compensation needs to be dealt with, we mentioned foreclosure mitigation needs to be part of this as well,” Dodd, a Connecticut Democrat, said on ABC’s Good Morning America. President George W. Bush, working with President-elect Barack Obama, might ask Congress for permission to use the remaining half of a $700 billion bailout program aimed at stabilizing the financial system. The purpose of the request would be to have the funds in place soon after Obama takes office on Jan. 20.
Economic worries outweigh boosts: Oil prices fell today on concerns over global economic growth, with key U.S. corporate earnings results expected to give a new reading on crude demand in the world’s largest consuming nation. Economic worries outweighed factors that would normally boost the market—Mideast tensions, signs that OPEC was implementing large-scale production cuts and the Gazprom-Ukraine gas dispute. Light, sweet crude for February delivery was down $2.25 to $38.58 a barrel by midday in Europe in electronic trading on the New York Mercantile Exchange. The contract on Friday fell 87 cents to settle at $40.83. Although still far from their Dec. 19 closing of $33.87, oil prices fell 17% last week, weighed by fears that rising U.S. unemployment will undermine crude demand.