Automobiles: Detroit seeks federal help
Detroit’s Big Three carmakers have begun a lobbying campaign to press Congress for up to $50 billion in federally guaranteed loans, said the Associated Press. Chrysler, Ford Motor, and General Motors say they need the money “to help them modernize their assembly plants and develop next-generation, fuel-efficient vehicles.” The federal guarantees would sharply cut Detroit’s borrowing costs, which have soared at the same time that domestic car sales have plunged.
The Big Three insist that they don’t want a bailout, said Daniel Howes in The Detroit News. “We’re saying give us a reasonable cost of capital to invest in the United States,” said one auto executive. Their request certainly is well timed. In an election year, Washington is not inclined to heed the “market Darwinists” who say market forces should determine the fate of America’s struggling auto industry. Presidential candidates Barack Obama and John McCain both support granting the guarantees. After all, “who would want to become president only to watch GM, Ford, or Chrysler fail?”
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Broadcasting: NBC’s Olympics gold
NBC Universal’s broadcasts of the Beijing Olympics drew blockbuster ratings and should put to rest rumors that parent General Electric wants to unload the network, said Andrew Edgecliffe-Johnson in the Financial Times. NBC earned “a healthy return on its $894 million” investment in the Games—more than $100 million by some estimates. The Games drew more than 200 million U.S. viewers. “Some investors have questioned the broadcaster’s fit with GE’s financial and industrial divisions,” but NBC’s Olympics-related profits could quell such doubts.
Taxes: A little guy wins big
A lone citizen rarely challenges the Internal Revenue Service and wins, but last week Charles Ulrich managed the feat, said Christopher S. Rugaber in the Associated Press. Ulrich, 72, an accountant from Baxter, Minn., took issue with the tax agency’s policy of taxing cash and shares distributed to policyholders of mutual life insurers when the firms go public. A federal court agreed with Ulrich that the distribution should be virtually tax-free. “Tax experts say potentially millions of taxpayers could benefit from his victory.”
