The Michigan Daily - michigandaily.com
Tuesday, January 27, 2009 - 3 1
NEWS BRIEFS Geithner sworn in as treasury secretary
NEW YORK son a ertr
Radar systems to
help pilots track
flocks of birds
Some of the nation's busiest
airports will soon begin testing
experimental radar systems de-
signed to track flocks of birds and
help pilots avoid the type of colli-
sion believed to have crippled a US
Airways jet nearly two weeks ago.
Proponents say air traffic con-
trollers could someday use the tech-
nology to delay takeoffs, reroute
flights before theyleave the ground,
and perhaps even radio warnings to
pilots to take evasive action.
The new technology uses a com-
bination of inexpensive marine ra-
dar antennas, much like the kind
used on fishing boats, and power-
ful computer software to monitor
birds as they gather and soar as far
as six miles away from an airport.
The dangers were illustrated
Jan. 15 when a US Airways jet lost
thrust in both engines after it ap-
parently smacked into a flock of
birds 90 seconds into a flight from
LaGuardia Airport. The pilotman-
aged to guide the plane to a belly
landing on the Hudson River, sav-
ing all 155 people aboard.
NEW YORK
Dow will not close
Rohm & Haas
buyout by deadline
Dow Chemical said it will not
close on its $15.4 billion buyout of
Rohm & Haas Co. by this week's
deadline, an announcement yes-
terday that was followed almost
immediately by a lawsuit from the
specialty chemicals maker.
The news sent shares of Rohm
& Haas Co. tumbling 13.2 percent,
or $8.72, to end at $57.10. Shares of
Dow Chemical Co. fell 7.6 percent,
or $1.09, to $13.24.
The Federal Trade Commission
signed off on the acquisition last
Friday, creating a Tuesday dead-
line for Dow to close the deal under
its agreement with Rohm & Haas.
Dow cited the global financial
crisis and the "stunning" decision
by a Kuwaiti state-owned petro-
chemical company to pull out of
a $17.4 billion joint venture with
Dow just days before the deal was
to close at 2008's end.
TRENTON, NJ.
Pfizer to buy rival
Wyeth, cause
8,000 job losses
Pfizer Inc., the world's largest
drugmaker, said yesterday it is
buying rival Wyeth for $68 billion
in a deal that will quickly boost
Pfizer's revenue and diversifica-
tion and -if it works as advertised
- help the company become more
nimble.
The deal came as New York-
based Pfizer set out a full house
of issues: a 90 percent drop in
income, a hefty charge to end an
investigation, a severe cut in its
dividend, a shockingly low profit
forecast for 2009 and 8,000 job
cuts starting immediately.
That's all on top of the colossal
problem triggering this deal: the
expected loss of $13 billion a year
in revenue for cholesterol fighter
Lipitor starting in November 2011,
when it gets generic competition.
Pfizer also plans by 2011 to cut
about 8,190 jobs, 10 percent of
its workforce, as part of what it
expects will be a staff reduction
totaling15 percentofthecombined
companies' workers - implying a
total job loss of almost 20,000.
LANSING
Detroit Public
Schools financial
manager appointed
Gov. Jennifer Granholm has
appointed Robert Bobb as emer-
gency financial manager for the
Detroit Public Schools.
Bobb starts his one-year
appointment in mid-February and
assumes all financial authority in
the struggling district, including
overcoming a $113 million budget
deficit.
He's been city administrator
and deputy mayor for Washing-
ton. Bobb was elected in 2006 to a
two-year term as president of the
Washington Board of Education.
He's also an ex-city manager in
Kalamazoo; Oakland, California;
Richmond, Virginia.; and Santa
Ana, California.
Michigan schools chief Mike
Flanagan has said Detroit's schools
are in a financial emergency.
- Compiled from
Daily wire reports
4v v
Confirmation was
opposed by a third of
the Senate chamber
WASHINGTON (AP) - The
Senate yesterday confirmed New
York Federal Reserve Bank chief
Timothy Geithner as President
Barack Obama's treasury secretary
despite tax problems that might
have sunk his nomination in less
desperate times.
The 60-34 vote, in which hand-
fuls of Republicans and Democrats
voted against their party lead-
ers, put Geithner at the helm of
Obama's economic team as it races
to halt the worst financial slide in
generations.
In swift order reflecting the
urgency, Obama was expected
to attend Geithner's swearing in
yesterday evening at the Treasury
Department. White House spokes-
man Robert Gibbs said Geithner
has made amends - he has paid
the taxes and penalties - and pos-
sesses the talent the nation needs
to steer the nation out of the crisis.
Geithner, 47, served as under-
secretary of the treasury for inter-
national affairs during the Clinton
administration. As president of the
New York Federal Reserve Bank,
he's been a key player in the gov-
ernment's response to collaps-
ing financial institutions and the
housing and credit markets since
last summer.
The ambivalence dogging law-
makers was reflected in the fact
that a third of the chamber voted
against Geithner, in large part
because of his failure to pay all
his taxes on income received from
the International Monetary Fund
in 2001 and in three subsequent
years.
Ten Republicans overlooked
that matter and voted for con-
firmation. One Republican, Sen.
Arlen Specter of Pennsylvania, told
reporters earlier in the day that he
would vote yes, only to change his
mind and vote no.
Three Democrats and one inde-
pendent voted against Geithner's
confirmation, including Sen. Rob-
ert C. Byrd, D-W.Va., the longest-
serving senator in history.
For the prevailing majority, the
real reason for Geithner's likely
confirmation appears to be less a
matter of bipartisan cooperation
than political survival. Lawmak-
ers of all stripes are eager toset the
economy in the right direction long
before voters judge their progress
in the 2010 midterm elections.
"People make mistakes and
commit oversights," said Sen.
Orrin Hatch, R-Utah. "Even the
most intelligent and gifted - two
adjectives that certainly apply to
Mr. Geithner - make errors in
their financial dealings."
Even so, not everyone was con-
vinced that the need for a speedy
confirmation should trump con-
cerns about the candidate. Sen.
Susan Collins, R-Maine, didn't
buy Geithner's contention that he
skipped payingsome taxes because
he was confused by the complexi-
ties of the tax code.
"They were described by the
nominee himself as 'careless mis-
takes,"' Collins said in prepared
remarks. "It has become clear to
me that this is not merely amatter
of complexity leading to mistakes,
but of inexcusable negligence."
Sen. Mike Enzi, R-Wyo., agreed
and noted that his is one of the few
voices of dissent.
"Nominees for positions that do
not oversee taxreporting and collec-
tion have been forced to withdraw
their nomination for more minor
offenses. They have been ridden out
of town on a verbal rail," Enzi told
the Senate. "The fact that we're in a
global economic crisis is not a reason
to overlook these errors."
"The Senate," he scolded, "is
not supposed to be a group of 'yes'
men."
It wasn't. Democratic Sen. Tom
Harkin of Iowa lined up against
the nominee, asking how someone
of Geithner's "financial sophistica-
tion" could innocently not pay the
taxes and then head up the agency
that oversees the IRS.
"How can Mr. Geithner speak
with any credibility or authority?"
Harkin said.
The Senate Finance Committee
approved Geithner's confirmation
in an 18-5 vote last week. However
ambivalent, some Senate Republi-
cans were supporting him. Specter,
for example, said he's not happy
that Geithner didn't pay up all of
the $42,702 in back taxes and inter-
est until after he was nominated to
become treasury secretary.
As such, Geithner will be direct-
ing the nation's economic recov-
ery from the worst financial crisis
in three generations, a task that
could define the first two years of
Obama's term.
As recession
deepens, more
workers laid off
President Barack Obama signs an executive order dealing with energy independence and climate change yesterday in the
East Room of the White House. At right is EPA Administrator Lisa Jackson andTransportation Secretary Ray LaHood, left.
Green car rules give auto
industry a new challenge
Obama signed two
executive orders
to improve auto
energy-efficiency
WASHINGTON (AP) - Presi-
dent Barack Obama wants automak-
ers to make greener cars at a time
when General Motors and Chrysler
are hanging by the thread of a mas-
sive government loan and auto sales
have plummeted to their lowest lev-
els in more than two decades.
Obama's plans could bring
smaller cars, more hybrids and
advanced fuel-saving technolo-
gies to showrooms, but car shop-
pers will probably pay more
upfront because the new rules are
expected to cost the hamstrung
industry billions of dollars.
"The consumer needs to under-
stand that they will see significant
increases in the cost of vehicles,"
said Rebecca Lindland, an auto
analyst for the consulting firm IHS
Global Insight. Her firm estimated
the upgrades could add $2,000 to
$10,000 to the price of a vehicle.
Obama yesterday directed the
Environmental ProtectionAgency
to review whether California and
more than a dozen states should
be allowed to impose tougher auto
emission standards on carmakers
to fight greenhouse gas emissions.
The Bush administration had
blocked the efforts by the states,
which account for about half of
the nation's auto sales.
The new president also said his
administration would issue new
fuel-efficiency requirements to
cover 2011 model year vehicles.
The rules would be the first step
toward a 2007 energy law that
requires the auto industry toboost
efficiency by 40 percent to at least
35 miles per gallon by 2020.
Obama set in motion a new reg-
ulatory process at a time when the
nation is coping with an economic
recession and auto sales have
fallen to their lowest pace since
1982. Underscoring the hardships,
GM said yesterday it would slash
2,000 jobs at plants in Michigan
and Ohio.
In December, the Bush admin-
istration signed off on $17.4 bil-
lion in loans to General Motors
Corp. and Chrysler LLC to keep
the companies afloat. The auto-
makers are undertaking intense
efforts to restructure this spring
or face potential bankruptcy.
David Cole, chairman of the
Center for Automotive Research
in Ann Arbor, Mich., said he
doesn't believe the EPA will
approve all the waivers asked for
by the states. To do so would be
economically unworkable.
"If the industry is in total
shambles, you can have any
regulation you want - it's not
doable," he said.
Cole said the additional
regulations would have to be
implemented "in a way that's
achievable in the industry."
Environmental organizations
said Obama's approach would
help the companies in the long
term, forcing them to produce
fuel-efficient cars coveted by
more consumers.
Economists predict
a net loss of at least
2 million jobs
WASHINGTON (AP) - The
recessioniskillingjobsatanalarm-
ing pace, with tens of thousands of
new layoffs announced yesterday
by some of the biggest names in
American business - Pfizer, Cat-
erpillar and Home Depot.
More pink slips, pay freezes and
other hits are expected to slam
workers in the months ahead as
companies desperately look for
ways to survive.
"We're just seeing the tip of the
iceberg-the bigfirms,"saidgRebec-
ca Braeu, economist at John Han-
cock Financial Services. "There's
certainly other firms beneath them
that will lay off workers as quickly
or even quicker."
Lookingahead, economists pre-
dicted a net loss.of at least 2 million
jobs - possibly more - this year
even if President Barack Obama's
$825 billion package of increased
government spending and tax cuts
is enacted. Last year, the economy
lost a net 2.6 million jobs, the most
since 1945, though the labor force
has grown significantly since then.
The unemployment rate, now at
a 16-year high of 7.2 percent, could
hit 10 percent or higher later this
year or early next year, under some
analysts' projections.
Obama called on Congress
yesterday to speedily enact his
recovery plan, warning that the
nation can't afford "distractions"
or "delays."
With the recession expected to
drag on through much of this year,
more damage will be inflicted on
both companies and workers.
The mounting toll was visible
yesterday as roughly 40,000 more
U.S. workers got the grim news.
Pharmaceutical giant Pfizer
Inc., which is buying rival drug-
maker Wyeth in a $68 billion deal,
and Sprint Nextel Corp., the coun-
try's third-largest wireless provid-
er, said they each will slash 8,000
jobs. I
Home Depot Inc., the biggest
home improvement retailer in the
U.S., will get rid of 7,000 jobs, and
General Motors Corp. said it will
cut 2,000 jobs at plants in Michigan
and Ohio because of slow sales.
"We are seeing no improvement
in labor market conditions," said
Sal Guatieri, senior economist at
BMO Capital Markets Economics.
"This year could be as-bad as last
year in terms of layoffs."
In response to deteriorating
business conditions, Caterpillar
Inc., the world's largest maker of
mining and construction equip-
ment, disclosed nearly 20,000 job
cuts, most of which already have
been made. They include 5,000
new layoffs of white collar work-
ers, which will occur globally by
the end of March.
Earlier actions included the
elimination of 2,500 Caterpillar
workers through a buyout offer
announced in December, the ter-
mination of about 8,000 contract
and temp agency workers, and the
reduction of 4,000 full-time fac-
tory workers through firings and
buyouts.
Texas Instruments Inc., which
makes chips for cell phones and
other gadgets, will cut 3,400 jobs
due to slumping demand. The Dal-
las-based company said yesterday
it will slash 12 percent of its work
force - 1,800 jobs through layoffs
and another 1,600 through volun-
tary retirements and departures.
And Brooks Automation Inc.
said it plans to get rid of 350 jobs,
or 20 percent of its work force.
Blagojevich boycotts trial
to appear on talk shows
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Il.l governor said
inflammatory
remarks were taken
out of context
SPRINGFIELD, Ill. (AP) -
Gov. Rod Blagojevich's impeach-
ment trial opened yesterday
with a vacant chair reserved for
the governor, who boycotted the
proceedings and instead spent
the day on the TV talk-show cir-
cuit in New York, complaining
he is being railroaded.
"The fix is in," Blagojevich
declared on ABC's "Good Morn-
ingnAmerica."
As the Illinois Senate assem-
bled for the first impeachment
trial of a U.S. governor in more
than 20 years, David Ellis, the
House-appointed prosecutor,
told the chamber that he will
show that Blagojevich "repeat-
edly and utterly abused the pow-
ers and privileges of his office."
In one of his first orders of
business, Ellis won approval from
the Senate to summon as a wit-
ness an FBI agent who oversaw
the profanity-laden wiretaps that
led to Blagojevich's arrest on cor-
ruption charges last month.
With Blagojevich refusing to
present a defense, Illinois sena-
tors could vote within days on
whether to oust the 52-year-old
Democrat on a variety of charges,
including allegations he tried to
sell the U.S. Senate seat left vacant
by President Barack Obama.
State senators maintained
the trial will be fair, despite
Blagojevich's attacks on the
process.
"We all took an oath to do jus-
tice according to the law. I know
that everyone is taking the mat-
ter seriously and that no one will
stand in the way of justice," said
Senate Minority Leader Chris-
tine Radogno, a Republican.
In live appearances yesterday
on "Good Morning America"
and "The View," Blagojevich
said some of his most inflamma-
tory remarks from the wiretaps
had been taken out of context.
But when pressed, he would not
elaborate, and he insisted he had
done nothing illegal.
"I'm here in New York because
I can't get a fair hearing in Illi-
nois," Blagojevich said between
TV appearances.
NBC's "Today" aired a taped
interview with Blagojevich. He
was also scheduled to appear
on "Larry King Live" and ABC's
"Nightline" on yesterday night
and on CBS' "The Early Show"
on Tuesday.
The impeachment trial opened
with the presiding judge, Illi-
nois Supreme Court Chief Jus-
tice Thomas Fitzgerald, telling
senators: "This is a solemn and
serious business we're about to
engage in."
When Fitzgerald asked
whether the governor was pres-
ent, there was a long silence. The
seats set aside for Blagojevich
and his attorney were vacant.
Fitzgerald ordered the pro-
ceedings to continue as if
Blagojevich had entered a plea of
not guilty.
No other Illinois governor has
ever been impeached, let alone
convicted in a Senate trial. It
would take a two-thirds majori-
ty - or 40 of the 59 senators - to
remove Blagojevich. The Senate
also could bar him from ever
again holding office in Illinois.