Follow Barack Obama prior and during his tenure as the 44th President of the United States. Read about my personal observations along with every day facts as they happen. This blog will only submit factual information about the first black President, now in his 2nd term of office.

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Sunday, May 10, 2009

Written by the Editor JamesPassages from CNNMoney.com and Washington Post

Payrolls are still declining across the nation, but unemployment rises to a 25-year high. As reported by CNNMONEY.com, employers cut 539,000 jobs from payrolls in the month of April. Believe it or not, that is considered an improvement at there were 699,000 jobs lost in March. Every 60 days, at least a million people are out of work. October last year only shed 380,000 jobs. With a jobless rate as this, you wonder how the economy can bounce back. I don't think that President Obama made any plans to try to bring that many people back to work. Almost 5.6 million jobs lost since the beginning of last year. President Obama claims that there will be jobs out there. But what kind of jobs. A friend of mine in Ohio lost his job working in a steel mill in Youngstown, Ohio. He had 28 years with the company. He is hoping that they re-open the shop again soon, so that he can at least claim 30 years seniority, a hope that has worse odds that someone playing at the 'craps' table in Las Vegas.
With the decline of the auto industry, as some file for bankruptcy, the demand for steel has been declining. The CEO of GM steps down as per Obama's request, and Chrysler joins teams with Fiat, giving the European company a 35 percent stake in the company in return for access to the Italian automaker's line of small cars and international sales network.
One thing is for sure here. President Obama is not wasting any time in making decisions that he believes that will bring back the economy and get the people back to work. My only question is now that Chrylser has teamed up with Fiat, does that mean that Chrysler will be making cars in this country with more and more foreign parts? Does Obama plan to retain people in different fields so that they can acquire gainfull employment to support their families? What about my friend in Ohio who worked in a steel mill for the last 28 years? Will Obama re-train him for a desk job? Obama will create lots of jobs for some people, but a good majority of people that are now unemployed will never gain another job, and the poverty level will climb as high as the unemployment level. This is unfortunate, but I do not see any other road for the people now.
The alliance of the two companies provides no cash to Chrysler, but the company's chief executive, Robert L. Nardelli, told stakeholders in a letter that he hoped the deal would bolster the automaker's case for an additional $3 billion of federal loans by strengthening its offerings. The nonbinding agreement is subject to approval by the Treasury, and Chrysler said it hoped it would be complete by April.

"You're taking two big automakers who have gaps in both their products and geographic reach, and you're filling those gaps," said David Elshoff, a Chrysler spokesman. "They fit like pieces in a puzzle."

Chrysler, which received a $4 billion emergency federal loan last month as it ran short of cash, is best known for its Jeep and minivan brands and has been looking for merger opportunities, most recently with General Motors. Analysts said the private terms of the deal announced yesterday also give Fiat the right to increase its ownership to as much as 55 percent.

Fiat, which has bounced back from its own problems and now has 9.1 percent of the European car market, is particularly strong in compact and sub-compact cars such as the popular Fiat 500. Fiat Group chief executive Sergio Marchionne has said for months that he was searching for a partner to manufacture the Fiat 500 as well as its Alfa Romeo brand in the United States.

President Obama, former president George W. Bush and leading members of Congress have insisted that the ailing U.S. automakers demonstrate they can be viable firms in the long-run in order to tap more taxpayer dollars to avoid bankruptcy in the short-run. By mid-February, Chrysler must submit a restructuring plan to achieve long-term viability, international competitiveness and energy efficiency. If it doesn't show progress on that plan, by May 1 the government can call back the $4 billion loan, effectively pushing the company into bankruptcy.