July 8, 2020

Housing Stronger, Fannie Mae Posts $10 Billion Profit

Fannie said on Thursday that it would pay a dividend of $10.2 billion to the United States Treasury next month. It made no request for additional federal aid.

The company said the rise in home prices during the quarter enabled it to reduce reserves set aside for losses on mortgages, helping to bolster its net income.

The earnings for the period from April through June compared with the company’s net income of $5.1 billion in the second quarter of 2012.

The government rescued Fannie and its smaller sibling, Freddie Mac, during the financial crisis after both incurred major losses on risky mortgages. The companies received loans totaling about $187 billion.

Fannie said it expected to remain profitable “for the foreseeable future.”

Once the second-quarter dividend is paid, Fannie will have repaid $105 billion of the roughly $116 billion it received from taxpayers.

The latest quarterly gain followed a record $58.7 billion net income in the first quarter, when Fannie capitalized on tax benefits it had saved from its losses on loans during the crisis. It paid a first-quarter dividend of $59.4 billion to the Treasury.

The housing recovery that began last year has made Fannie and Freddie profitable again. Together they will have paid back about $146 billion of their government loans by next month. Those payments are helping make this year’s federal budget deficit the smallest since President Obama took office in 2009.

Article source: http://www.nytimes.com/2013/08/09/business/fannie-mae-reports-earnings-of-10-billion.html?partner=rss&emc=rss

Ford-U.A.W. Pact Appears Headed for Ratification

As of Sunday evening, 62 percent of votes cast were in favor of the four-year deal, a reversal from Friday morning, when just 49 percent supported it. With only a handful of plants yet to weigh in on the contract, it was passing by a margin of 5,800 votes, according to an update released through the union’s official Facebook page dedicated to negotiations with Ford.

The lack of a wage increase was responsible for many of the “no” votes among workers at Ford, the only one of the Detroit carmakers that did not file for bankruptcy protection in 2009 or accept a federal bailout. Wages have been frozen since 2003.

General Motors and Chrysler workers gave up their right to strike under the terms of the government loans those companies received.

Unless workers at the remaining plants reject the deal in overwhelming numbers, the proposed contract will win approval on Tuesday, when voting is scheduled to finish. That would end the only possibility of a strike during this year’s round of labor negotiations in Detroit and allow union leaders to turn their attention to building support for a less-generous contract with Chrysler.

“It’s not over till the last vote, but approval looks likely at this point,” Harley Shaiken, a professor of labor relations at the University of California, Berkeley, said Sunday. “The early locals voted their anger, and the later locals voted based on what their alternatives would be.”

Mr. Shaiken said he also expected the Chrysler agreement to pass, because the terms of that company’s 2009 bankruptcy mean a rejection could lead to the contract’s being settled in binding arbitration, a process seen as less favorable to workers.

About 65 percent of G.M. workers voted to ratify their new contract last month.

The biggest U.A.W. chapter at Ford, Local 600 in Dearborn, Mich., favored the deal by 62 percent to 38 percent. The local represents 14 percent of Ford’s 41,000 workers, and its resistance to concessions that Ford sought in 2009 helped assure their defeat. Also on Sunday, 90 percent of voters at a plant in Kansas City, Mo., supported the contract.

Those results, on top of overwhelming support for the deal from workers in St. Paul, and three other Michigan plants since Friday, overcame opposition at three large plants that were among the first to vote last week.

The intensity of Ford workers’ opinions toward the contract has been apparent in that at least 80 percent of workers have voted at most of the locals where results were released. In contrast, many of the large G.M. locals reported turnout of less than 50 percent.

Chrysler workers will begin voting this week on a separate deal that follows a similar framework as the Ford deal but provides smaller bonuses, among other differences. Voting there is expected to conclude Oct. 26.

The Ford contract, which calls for creating 5,750 jobs that the company had not previously announced, is the most financially generous of the three deals. It calls for signing bonuses of $6,000 for most workers this year and bonuses in later years totaling at least $6,000.

G.M. workers get $5,000 immediately and at least $3,000 more in subsequent years. Chrysler, meanwhile, agreed to pay only $1,750 upon ratification; its workers would get another $1,750 when the company meets certain financial targets and additional bonuses based on vehicle quality and other factors.

All three companies agreed to increase their pay scale for entry-level workers by several dollars an hour, but workers hired before 2007 will not receive raises.

Union officials at Ford plants began preparing for a strike after the early voting was unexpectedly negative last week. They warned workers that Ford could refuse to return to the bargaining table if the deal was turned down, leading to a potentially lengthy walkout or lockout.

Article source: http://feeds.nytimes.com/click.phdo?i=f2dd1d7c219a5dfba3892f0a603b9f8d

Solyndra Executives Take Fifth at House Hearing

Brian Harrison, the chief executive, and Wilbur G. Stover, the senior vice president and chief financial officer — each with a lawyer and a single sheet of paper with the text of a statement that he read over and over again, explaining that he was respectfully declining to answer questions — appeared before the oversight and investigations committee of the House Committee on Energy and Commerce. The committee is examining how the company failed after getting $528 million in government loans.

The case is an acute embarrassment for the Democrats because Solyndra was the first loan guarantee approved by the Obama administration under a program designed to generate jobs and invigorate the American solar industry. When the loan was approved, Vice President Joseph R. Biden Jr. announced it, and later, President Obama visited the factory in California.

“How does a company go from having the president of the United States visit it to having the F.B.I. come in and confiscate its files?” asked Representative Joe L. Barton, a Texas Republican.

Democrats addressed their chagrin as well; Representative Diana DeGette of Colorado, the ranking Democratic member, who had requested that the two executives be called as witnesses, recalled how Mr. Harrison had met with her and other members of Congress in late July. “I don’t know how they could paint such a rosy picture to us, and declare bankruptcy five weeks later,” Ms. DeGette said.

The witnesses had no friends on the committee, but after repeated questions from members about what the company did with the money and how the executives could have failed to see impending problems, Representative Henry A. Waxman, the California Democrat, complained to the subcommittee chairman, Representative Cliff Stearns of Florida, that the right against self-incrimination was meaningless if the witnesses had to sit through repeated accusatory questions that everyone knew in advance they would not answer. The atmosphere brought to mind newsreel depictions of the House Un-American Activities Committee questioning witnesses suspected of being Communists.

The bankruptcy’s timing could hardly be worse for the solar industry; about $9 billion in additional loan guarantee money is available, but by law, projects must break ground by Sept. 30. On Thursday, the sponsor of three major projects that had received tentative approval said that at least one of them would certainly not meet the deadline and that the two others might not either. About 1,000 megawatts of power is at risk, according to the industry’s trade association.

But the Republicans, with evidence in hand that the Solyndra loan was moved through quickly in the late stages, has publicly cautioned the Department of Energy and the White House not to act in haste in the last days of the program, which was paid for as part of the stimulus bill.

In fact, committee members were divided about whether the Solyndra bankruptcy was a reason to put the brakes on the whole program. Ms. DeGette said, “It would be to our long-term economic peril if we cede leadership to any other nation in clean-energy technology development.” But Representative Michael C. Burgess, Republican of Texas, referred to a vote on Thursday night by the House to cut money for loan guarantees for electric cars, to help pay for disaster relief.

“Yes, we took that money back,” Mr. Burgess said. “If the D.O.E. is going to be chumps, the very least we can do is corral what they’re doing.”

A prominent Democrat, Representative Edward J. Markey of Massachusetts, said, “The Republican majority is recklessly exploiting this one case to advance a political agenda that is very clearly aimed at wrecking” government support for renewable energy.

But Mr. Markey is pursuing a separate point: that the appropriate lesson to draw from Solyndra is that the much larger loan guarantee that has been promised for construction of a twin-reactor nuclear plant in Georgia deserves closer scrutiny.

Article source: http://feeds.nytimes.com/click.phdo?i=a19d70fe73b56f0c4e6af2b7c0089f58

Peugeot and Renault to Repay Government Loans Early

The French industry minister, Éric Besson, told  France Info radio that the remainder of the 6 billion euros, or $8.7 billion, owed would be repaid “in the next few days,” which was “faster than anticipated.”

The decision, he said, showed that “confidence has returned” to the  sector.

In 2009, amid plummeting sales and the prospect of large layoffs, the French government announced that it would lend Peugeot  and Renault $4.4 billion each over five years at 6 percent interest. Renault Trucks, now owned by Volvo, also received aid.

In conjunction, the automakers introduced part-time work arrangements and curbed production at some plants.

Since then, the health of the two companies has slowly improved. The turnaround was helped initially  by government incentives for buyers that lifted sales in Europe but have now expired. Sales were also robust in emerging markets like Brazil, China and Russia.  

A report this week from the European Automobile Manufacturers’ Association,, showed new passenger car sales in the European Union fell 5 percent in March from the period a year earlier. Sales in Germany and France both grew, but they were weaker in Britain, Italy and Spain.

The two French companies have followed the same repayment rhythm, returning a first tranche of 1 billion euros ($1.5 billion) in the second half of 2010, then another 1 billion euros in February with the final 1 billion euros due on Tuesday.

Article source: http://www.nytimes.com/2011/04/23/business/global/23auto.html?partner=rss&emc=rss