Detroit Goes Down (and not in a good way)

A new report is telling us Detroit is goin' down, to bankruptcy that is. No surprise here with the worst unemployment rate in the nation.

Mayor Dave Bing and the City Council must reduce the size of government and slash the city's budget deficit to stave off bankruptcy or state receivership, according to a report released Monday.

Without draconian cuts and changes aimed at downsizing government, the city could end up with a "possible" general fund deficit between $446 million and $466 million to its $1.6 billion budget.

Rejecting a Job Applicant based on their Credit Score - Discrimination?

Is rejecting a job applicant based on a credit score discrimination? Credit Slips says yes.

From the New York Times, Another Hurdle for the Jobless: Credit Inquiries:

More than 40 percent of employers use credit checks at least sometimes, according to a 2004 survey by the Society for Human Resource Management, up from 25 percent in 1998.

and this lovely assumption from employers:

Business executives say that they have an obligation to be diligent and to protect themselves from employees who may be unreliable, unwise or too susceptible to temptation to steal, and that credit checks are a help.

From Credit Slips:

Consumer Bankrupties Estimated to be 1.4 Million in 2009

Wow. Consumer (note they do not even use the word individual, families, households anymore, we're all just consumers) Bankruptcies are May Hit 1.4 Million:

Consumer bankruptcies show no sign of abating after rising more than a third this year and may hit 1.4 million by Dec. 31 as jobs are lost and loans are harder to get, according to the American Bankruptcy Institute.

More than 126,000 consumers filed for bankruptcy in the U.S. last month, 34 percent more than in July 2008, the ABI said in its latest report on Aug. 4. The increase came after a 36.5 percent rise in personal bankruptcies nationwide in the first six months, to 675,351, according to the ABI research group, which interprets data collected by the National Bankruptcy Research Center.

GM Selling Itself to....GM?

This is an update to a post from June 29th. A judge approved the sale of GM to itself.

This is one of the weirder things I've ever heard of. General Motors to seek approval to sell itself:

General Motors Corp (GMGMQ.PK) is heading to bankruptcy court on Tuesday to seek approval to sell its assets to a "New GM" in a plan to reinvigorate the automaker under U.S. government ownership.

GM is seeking approval for the sale from U.S. bankruptcy Judge Robert Gerber just 30 days after filing for Chapter 11. Under the deal, brokered by the Obama administration's autos task force, the company would sell its assets under Section 363 of the bankruptcy code to a "New GM" and continue to operate its best assets, like Chevrolet and Cadillac, while gaining access to billions in funding from the U.S. Treasury.

Here Comes the Bomb - GM to file for bankruptcy on June 1st

We all knew this was coming, but now it's official, GM to file for bankruptcy on June 1st.

General Motors Corp., the world’s largest automaker until its 77-year reign ended in 2008, plans to file for bankruptcy protection on June 1 and sell most of its assets to a new company, people familiar with the matter said.

The U.S. Treasury will provide financing for GM while the asset sale is arranged to a company formed by the government, according to a regulatory filing today. June 1 was the deadline set by the U.S. for GM to restructure outside court.

GM, which would follow Chrysler LLC into bankruptcy, plans to build a new business around assets such as the Cadillac and Chevrolet brands. The 100-year-old automaker, a victim of tumbling sales, fell short in a bid to cut debt by $44 billion by June 1.

Reports say GM headed for Bankruptcy

Reports are coming in that a GM bankruptcy is now probable.

General Motors Corp. may be more likely to end up in bankruptcy based on the Obama administration’s willingness to place Chrysler LLC into court protection to safeguard union health-care benefits.

With GM and its biggest bondholders at odds over resolving $27 billion in unsecured claims by a June 1 deadline, the Chrysler model indicates that President Barack Obama may resort to bankruptcy to end any impasse over that debt, said Martin Fridson, chief executive officer of New York-based credit investment firm Fridson Investment Advisors.

Advanced Skilled American Engineers Forced to Declare Bankruptcy

Now this should come as no surprise. Anyone involved with anything scientific knows the U.S. Science, Technology, Engineering and Mathematics Professionals have been getting the financial and career shaft for years now.

The San Jose Mercury New is reporting an alarming increase in career long technical professionals are being forced into bankruptcy.

A growing number of high-tech professionals are filing for bankruptcy, joining real estate, finance and construction workers who were in the first wave of bankruptcies last year.

Overall filings were up 50 percent to 2,399 in the first three months of this year over the first quarter of 2008, according to records of the U.S. Bankruptcy Court in San Jose. The court covers Santa Clara, Monterey, San Benito and Santa Cruz counties.

Looks like Chrysler is headed for a Preplanned Reorganization Bankruptcy instead of Liquidation

The New York Times is reporting Chrysler has made a deal with the UAW and is headed to a Chapter 11, pre-arranged bankruptcy that is not a liquidation.

The deal includes Fiat, the Italian automaker with which Chrysler was ordered by the government to form an alliance before Thursday.

Neither the United Automobile Workers union nor the company released details of the tentative agreement, which would modify the union’s 2007 contract and reduce the amount of money Chrysler must pay into a new health fund for retirees.

Some of the terms, which are not officially released are:

GM, Chrysler Say Bankruptcy Close without More Government Aid

Both GM and Chrysler say bankruptcy imminent without more aid.

U.S. auto sales continued their free fall into February, as big rebates and low-interest financing failed to lure people back into car dealerships and showrooms.

Today General Motors reported that its sales slid 53 percent in February compared with the same month a year ago, and Chrysler sales dropped 44 percent.

Ford's sales tumbled 48 percent, despite distinguishing itself from cross-town rivals in recent months by keeping the company afloat without federal aid.

"The economic and competitive environment remains challenging," said Ken Czubay, Ford vice president for sales and marketing, in a statement. "Ironically, these times provide the best opportunity to distance Ford from the competition."