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If General Motors Corp. files for bankruptcy, as widely expected, its healthy assets will be quickly sold to a new company owned by the U.S. government, a source familiar with the situation said Tuesday.

The source, who was not cleared to speak with the media and would not be identified, said the U.S. government would pay for the assets by assuming the automaker’s $6 billion of secured debt and forgiving the bulk of the $15.4 billion of emergency loans that the U.S. Treasury has provided to GM.

The government is negotiating the terms on which it will assume GM’s secured debt and might make an the offer to holders of the debt that is far superior to the one made to Chrysler LLC’s secured lenders, the source said.

Chrysler filed for bankruptcy in April and has proposed paying its secured lenders about 28 cents on the dollar.

The new GM (GM, Fortune 500) is likely to distribute stock in the company to GM’s unions in return for concessions on wages and benefits, the source said.

The percentage of stock given to the unions, bondholders and other creditors whose debt is not repaid by new GM has not been determined, the source said.

In addition, the government would extend a credit line to the new company, the source said.

The remaining assets of GM would stay in bankruptcy protection to satisfy other outstanding claims.

The government has given GM until June 1 to restructure its operations to lower its debt burden and employee costs as sales have plummeted in recent years.

Delphi Corp.

GM will likely take on some of the operations of its bankrupt supplier Delphi Corp. to make sure it gets needed auto parts throughout its reorganization, according to the source. The company is currently negotiating terms with Delphi’s estate, the source said business card.

Delphi, a former unit of GM, has been operating in bankruptcy since 2005.

The board of the new company would be established with the tacit approval of the government. Fritz Henderson, who took the helm of GM earlier this year after the government pushed out Rick Wagoner, will head the new company, the source said.

Setting up a new company to buy the healthy assets is aimed bringing operations out of bankruptcy as quickly as possible. GM is concerned that consumers might not be willing to make a major purchase from a bankrupt company, fearing it would not honor warranties or provide service.

Chrysler is employing a similar strategy in its bankruptcy. The smaller automaker is selling its operations to a group that will be managed by Italian automaker Fiat and wants to have the strongest operations out of bankruptcy in 60 days.

Chrysler’s proposed sale ran into initial opposition from holders of the company’s secured debt, and GM may face similar issues.

Investors who hold GM’s senior secured debt said they are not aware of any negotiations and that they would oppose having the debt move with the healthy assets.

"If that’s right, they will be in for a fight," said one investor, who declined to be identified.

The investors said GM could not force the transfer of the secured debt without the agreement of all the holders of that debt.

The investors also opposed giving bondholders anything without first paying in full the claims of senior secured lenders, who have higher priority in bankruptcy.

GM could not be immediately reached for comment.

GM shares closed up about 8% at $1.27. 

Source

The credit card business has grown so wretched that one major issuer is clipping its customers’ cards and giving its investors a haircut.

Advanta (ADVNA), the nation’s No. 14 card issuer and a top lender to small businesses, said last week it will shut down its card business to stem losses. The move is a momentous one, because credit cards bring in nearly all Advanta’s revenue.

The company will close customer accounts next month, leaving a million borrowers looking for credit at a time when lenders are pulling back. And Advanta’s small-business customers aren’t the only ones in limbo: So are the investors whose bond purchases financed Advanta’s expansion over the past decade.

The firm says notes due to mature next month won’t be repaid in full on schedule. Advanta is offering to buy some bondholders out at a roughly 30% discount.

The news comes as Advanta, which last month reported a $76 million first-quarter loss, struggles to stanch the bleeding as more customers fall behind on payments.

"The stress rises as you get more delinquencies," said Steven Mann, a professor at the University of South Carolina’s Moore School of Business. "Then you see these companies start to break the glass in case of fire."

Shallow pockets?

Delinquencies, measuring accounts a month or more past due, hit 11.5% in April, Advanta said — down slightly from its March level, but more than double the year-ago tally.

Advanta isn’t the only bank struggling to deal with late payments. Delinquencies have risen sharply at bigger issuers as well, ranging from Bank of America (BAC, Fortune 500), JPMorgan Chase (JPM, Fortune 500) and Citigroup (C, Fortune 500) to Capital One and American Express.

But those companies are much bigger and have deeper pockets, after years of consolidation at the top of the U.S. banking industry.

BofA, JPMorgan and Citi — the three big diversified issuers - together accounted for more than half of 2008 U.S. credit card lending. Advanta sold most of its consumer credit card portfolio to Fleet Financial in 1997. Fleet was later acquired by BofA.

What’s more, none of the bigger issuers has posted numbers as dire as Advanta’s. Capital One (COF, Fortune 500) and American Express (AXP, Fortune 500) both passed the government’s stress tests without having to raise new capital.

Advanta may have made its problems worse by jacking up some customers’ interest rates, prompting them to cancel.

John Dykstra, a computer consultant in Kenmore, Wash., was spending between $2,000 and $3,000 a month on an Advanta rewards card before the company gave notice in August of a plan to boost his rate to 26% from 8%.

"It just ticked me off that they would triple my rate," he said. "It seems like they made some bad business choices."

Cutting its losses

The latest steps Advanta has proposed aren’t ones credit card issuers take lightly. Closing accounts makes outstanding balances harder to collect and eliminates income from the fees issuers charge merchants quick payday loan.

"Advanta’s stated intention to terminate cardholders’ charging privileges is likely to cause an acceleration of losses measured as a percentage of the pool, as the trust portfolio reduces in size due to charge-offs and payments," analysts at Moody’s wrote Friday in downgrading 23 classes of Advanta credit card-backed securities.

The Moody analysts added they expect charge-offs to increase to a range of between 40% and 50%, from 17.3% in March.

In turn, investors in the securities issued by the credit card trust can expect smaller payouts, as the trust unwinds in a process known as early amortization. Advanta plans to offer to buy back $1.4 billion in outstanding bonds issued by the credit card trust, at between 65 and 75 cents on the dollar.

Advanta says that rate is in line with the recent trading in the Advanta Business Card Master Trust Class A senior notes, but investors aren’t likely to look fondly on the decision.

Indeed, Advanta spent months claiming it wouldn’t come to this. The company said in January that "early amortization for our business credit card master trust is avoidable and the company does not expect it to occur."

But credit card defaults continued to surge, prompting Advanta to shift its focus to cutting its losses. Under the new approach, the company said last week, Advanta "will be free to do new business in the future to the extent it chooses, but it does not expect to do so in a significant way until implementation of the plan is well under way."

‘Everybody hates them’

Though all the credit card-issuing banks are dealing with rising delinquencies, Advanta is the first in recent years to allow outside investors to take losses on its credit card-backed securities.

This spring, both Bank of America and Citigroup bought bonds from their credit card securitization trusts to make sure bondholders wouldn’t suffer losses even if the downturn steepens. In those moves, BofA contributed $6 billion and Citi $3 billion to cushion against future losses that could threaten the trusts’ income streams.

The bigger problem for major issuers stems from their own poor behavior during the boom, said Myron Glucksman, a structured finance consultant.

He said the public has grown exasperated with huge rate increases, excessive fees and unclear disclosure.

That’s why the Federal Reserve last year proposed new limits on fees and other restrictions, in a move that is to take effect next year. And that’s why Congress is currently considering a credit card bill that would further restrict the banks’ leeway to change pricing — not to mention where you can carry a gun.

"There has to be some understanding that the industry has made a mistake," said Glucksman, who was a managing director in Citi’s corporate and investment bank and owns Citi shares. "They’re facing a situation where not only are delinquencies rising, but everybody hates them."  

Source

The next auto businesses on the chopping block will be 2,600 General Motors dealerships.

GM Chief Executive Fritz Henderson said Monday that the company would by the end of the week start notifying dealerships it wants to eliminate over the course of the next year. The company said last month that it planned to eventually eliminate 42% of its 6,250 dealer locations, which employ more than 300,000 workers among them.

On Thursday, Chrysler LLC’s announced that it is dropping nearly 800 Chrysler, Dodge and Jeep dealers, or about a quarter of its network, as part of its bankruptcy restructuring.

GM (GM, Fortune 500) is not yet in bankruptcy court, although Henderson has said such a filing is "probable." The company has until the end of the month to win agreement from creditors, unions and dealerships on a turnaround plan or the Treasury Department, which has been bankrolling GM’s ongoing losses, has said it will force the company to file for bankruptcy.

GM, Chrysler and Detroit rival Ford Motor (F, Fortune 500) all have far larger U.S. dealer networks than their Asian rivals, a remnant to the days when the so-called Big Three dominated the market in a way they no longer do.

Many of the GM dealership cuts have been telegraphed by the company’s broader cuts in its brands.

The company intends to close about 400 Saturn dealerships as it drops its youngest brand, as well as about 200 Saab dealers, another brand the company intends to give up.

Two other GM brands on the way out, Hummer and Pontiac, face a different scenario. National Automobile Dealers Association figures show there are 18 Hummer and 39 Pontiac dealerships that don’t sell other GM brands.

But most Hummer and Pontiac dealers will stay with GM because they have other GM brands under the same roof. For example, almost all of Pontiac’s 2,600 dealers also sell either Buick, GMC or both.

The other 2,000 dealers to be cut will be in major metropolitan and suburban areas online pay day loans. GM’s own turnaround plans say "dealership overcapacity is most prevalent" in those markets.

The expectation is that the surviving dealerships will become larger and more profitable as a result of the thinning out, which in turn will allow them to spend more on advertising and facilities. But GM also acknowledges that its long-term decline in U.S. market share will continue as a result of the smaller network of dealers.

Typically it is an expensive proposition to buy out dealers. GM spent about $1 billion dropping Oldsmobile at the start of the decade, mostly in payments to 2,800 dealers and the repurchase of their inventory of vehicles and parts.

The company believes that the threat of bankruptcy, plus the difficult financial condition that has led to hundreds of dealership closings in the past year, will allow a far less expensive cutting of the dealership network this time.

GM’s 2,700 rural dealership locations are relatively safe, even if they have lower sales volumes than some of the dealerships that will be cut. GM’s turnaround plans released in February anticipated few cuts in the rural dealers in the near term.

But GM has since announced plans to cut much deeper into its overall dealership network. That earlier version of the turnaround plan called for it to cut its network to 4,100 dealerships by 2014. Now it expects to get that number down to 3,600 by next year, with most of them being eliminated this year.

The NADA and dealership groups at GM and Chrysler are fighting the dealership reduction plans, lobbying Congress and hiring bankruptcy attorneys. They hope that state franchise laws will give them the leverage they need to at least reduce the extent of the planned cuts. 

Source

Don Brown Chevrolet said today it had received word that it is not among the area General Motors dealerships that will lose its franchise agreement.

Rumors abounded today as word about GM’s plans to end some 1,100 franchises in an effort to streamline its business and avoid bankruptcy. The corporation has already said it will end the storied Pontiac brand and is looking to sell other lines including Saturn.

At Don Brown Chevrolet on South Kingshighway word came down Friday that the dealership would be spared, said Greg Flotte, sales manager. Don Brown’s Chrysler dealership also on Kingshighway has already closed due to struggling sales. Many city dealerships have lost sales in competition with suburban auto malls.

"This won’t affect us directly. We’re not on the list," Flotte said.

Other dealerships were reticent today as word spread. Employees at McMahon GMC Pontiac on Kingshighway and at the parent office said they didn’t know if their business was affected and couldn’t comment anyway. General Manager John Schicker also couldn’t reached.

At Chris Auffenberg Chevrolet in Kirkwood, general sales manager Louie Trevino said, "There’s always rumors. Nothing is definitive and we haven’t been told anything yet."

(For more on this story, read Sunday’s Post-Dispatch or return to STLtoday.com)

Our earlier story:

By Angela Tablac

Glenn Bruckert knew bad news would come soon to his Chevrolet dealership, so he took a proactive step earlier this week. He sent General Motors Corp. a letter on Wednesday, asking to end the franchise agreement at his Bunker Hill location.

On Friday, his action was validated. He received a notice from GM saying his franchise would not be renewed.

"I knew it was coming, so I beat ‘em to the punch," said the owner of Bruckert’s Chevrolet and a former Bunker Hill mayor. "The GM I knew is gone."

Still, he said, "when you’re sentimental about something, it’s hard to give up."

GM told about 1,100 "underperforming" GM dealerships Friday that their franchise agreements would not be renewed late next year. The cuts came just one day after Chrysler LLC said it would eliminate 789 franchise contracts with dealers, including 10 contracts among nine St. Louis dealers.

But it’s unclear how many GM dealerships in the St. Louis area are affected. Phone calls to more than two dozen local GM dealers drew few responses.

Unlike Chrysler’s list, which the automaker had to make public in bankruptcy court, GM did not release the names of affected dealerships. It let dealers decide to reveal if they were affected.

"We’re in a different situation than Chrysler, where this is not a matter of public record," a GM spokesman said Friday in a conference call.

GM is sprinting toward a June 1 deadline to restructure or file for bankruptcy reorganization. The automaker needs to trim its dealership network to account for the drop in sales and ensure dealers remain profitable, said Mark LaNeve, GM’s vice president of sales, service and marketing.

Beside the underperforming dealers, the automaker plans to trim its ranks by ending or divesting brands, such as Saturn, consolidation and attrition. In total, it plans to drop 2,600 dealerships by the end of next year, leaving GM with about 3,600 dealers.

LaNeve said GM based decisions on sales numbers, profitability, customer service ratings and other performance-related factors. The 1,100 dealerships sold just 7 percent of GM’s 2008 U.S. sales volume, he added.

Once their franchises are gone, dealers will no longer be able to sell new GM vehicles or perform warranty repair.

APPEAL POSSIBLE

Affected dealers learned their fate from overnight FedEx letters that began arriving Friday morning, GM said. The letter stated that GM did not see a "productive business relationship" with the dealer, according to a copy obtained by The Associated Press fast payday loans.

But it also left dealers with some hope.

"Please understand that our planning in this regard is not finalized, and we are prepared to give you until the end of the month to submit any information you would like us to see," the letter said, according to the AP.

GM spokesman Terry Rhadigan would not provide a copy of the letter, but he confirmed that dealers can submit appeals via a website. Rhadigan said he couldn’t estimate when the appeals process would be completed and the list finalized.

Dealerships would not immediately stop their new-vehicle sales but rather wind down operations and sell off inventory by the end of their contracts. The 1,100 dealerships right now have about 65,000 vehicles in inventory, according to GM.

And they won’t necessarily close. Some may continue to operate by selling other automakers’ brands or focusing on used-vehicle sales.

That’s what Bruckert, who has the Bunker Hill dealership, plans to do. His business has been associated with GM since 1938, but Bruckert says he can survive on selling used vehicles and auto service.

GM considers its wind-down approach to be better than terminating franchise contracts.

Some state franchise laws, like those in Missouri, would require GM to buy back existing inventory and possibly pay damages if it ended the agreements early, said Stephen Rovak, a St. Louis partner with Sonnenschein Nath & Rosenthal LLP.

Letting the contract expire, however, can be more complex. Dealers and GM likely will argue over the portion of Missouri law that says it’s unlawful to "terminate, cancel or refuse to continue any franchise without good cause," said Rovak, who specializes in franchise law.

GM faced a legal headache in 2000, when it decided to ax the Oldsmobile brand and offered buyout packages to its 2,800 dealers. Some sued the company. Ultimately, the automaker paid dealers more than $1 billion.

BANKRUPTCY SPEEDUP?

A bankruptcy filing — which analysts and even GM Chief Executive Fritz Henderson say is more likely than not — could muddy the outcome even more.

In the conference call, LaNeve said a filing would not change the number of dealers to be cut.

"Our plan’s the same, inside or outside bankruptcy," he said.

But it would be easier for GM, in bankruptcy, to speed up the dealership cuts, said Aaron Bragman, an auto industry analyst for IHS Global Insight. Chrysler, for example, expects to complete the sale of its best assets within 30 to 60 days of its April 30 bankruptcy filing and will end its dealership agreements by June 9.

GM’s cuts will impact communities in St. Louis and nationwide by bringing losses in jobs and local tax revenue.

More than 63,000 dealership employees nationwide will be affected by the terminations announced Friday, the National Automobile Dealers Association estimated.

The effect on consumers, meanwhile, is mixed. Fewer new-vehicle dealerships means buyers won’t be able to shop for the best price among several dealers in the same area, Bragman said.

But consumers may find good deals, even on used vehicles. As dealerships close and their new vehicles are dispersed among remaining dealers, there will be an excess of new GM vehicles on lots, which also put pressure on prices of used cars and trucks, said Mark Rikess, chief executive of the Rikess Group, a retail auto consulting firm in Hollywood, Calif.

Rikess — who said he’s advised more than 100 GM and Chrysler dealerships facing closure — is telling his clients to sell down their used vehicle inventory before the influx of new cars. Even if that means selling them at a loss, he added.

Greg Jonsson and Christopher Boyce of the Post-Dispatch contributed to this report.

Source

Staffers at the Securities and Exchange Commission are recommending that the agency file civil fraud charges against Countrywide co-founder Angelo Mozilo, according to a published report.

The agency sent a notice to Mozilo telling him of the potential charges, which include violations of insider-trading laws and failing to disclose information to shareholders, according to the Wall Street Journal, which cited people familiar with the investigation. The agency may ultimately decide not to file charges.

Mozilo’s attorney, David Siegel, declined to comment, but told CNNMoney.com that the "persistent innuendo" that Mozilo sold Countrywide shares because he knew of problems within the mortgage lender is "scandalous" and "inconsistent" with the facts.

"We do not believe there is any fair basis for allegations to be made against Mr. Mozilo," Siegel said in an e-mail. "All of Mr high risk personal loans. Mozilo’s stock sales were made in compliance with properly prepared and approved trading plans and reflected recommendations by his financial advisor over a long period of time."

An SEC spokesman declined to comment.

Mozilo, who founded the company in a New York apartment, built Countrywide into the nation’s largest mortage lender. But Countrywide buckled during the housing meltdown and was acquired last year by Bank of America (BAC, Fortune 500).

Mozilo became a poster boy for the subprime crisis. He reportedly stood to collect a windfall of $115 million dollars in the $4 billion sale to Bank of America. But after facing heavy criticism from lawmakers, Mozilo said he would forfeit $37.5 million in payments tied to the deal.  

Source

The fundaments of their businesses are still bad, but for the first time since last year small business owners are hopeful that economic conditions will soon improve, according to a new survey by the National Federation of Independent Business.

NFIB’s monthly "optimism index" rebounded to 86.8, up 5.8 points from April’s reading, which marked the second lowest in the survey’s 35-year history. Eight of the index’s ten components improved, lead by big gains in business owners’ expectations that the overall economy and their own company’s sales will get better in the next three to six months.

"The most important thing for business owners is that someone is coming in their door," said NIFB Chief Economist Bill Dunkelberg. "They are seeing some more people right now, and they’re hoping that that will continue. If it does, we’ll see those soft indicators turn into hard indicators."

The survey’s hard indicators are still grim. Employment, capital spending, inventories, sales and earnings are still at historically low levels, according to the NFIB’s poll of 1,794 small business owners. Just 4% of those surveyed increased employment at their company within the last three months, while 30% reduced it.

Despite a marginal improvement from last month’s reading, a majority of business owners said their sales have fallen in the past three months car insurance. A record-high 11% reported reducing compensation for their workers, and inventory stockpiles hit a new record low.

"But they have apparently seen something," Dunkelberg said of the survey’s finding that business owners’ outlook is growing more optimistic. A majority of those polled still expect poor sales for the next three months, but this month’s survey saw a 20-point rise in the percentage of business owners expecting their sales to improve in the next quarter. For the first time since October, there are more owners who believe general business conditions will improve than who think that they will worsen.

"While the numbers aren’t great, they’re definitely an improvement," Dunkelberg said.

The NFIB is comparing the data collected from this recession to the readings it recorded in the early 1980s. Dunkelberg believes that while the optimism index from month to month may wobble, it will generally continue to go up from here.

"We won’t know for sure until we have hindsight, but I predict the private sector is starting to heal itself," he said. 

Source

Behind every statistic about whopping job losses and the shrinking economy are thousands of small businesses battling the everyday realities of trying to survive with less staff and fewer customers. Three weeks ago, a group of entrepreneurs from peer advisory group The Alternative Board (TAB) gathered to discuss their view from the frontline of the recession.

"I’ve managed to cut so much already, but I wonder, what’s left to cut?" asked Ken Villani, president of Cottage Pharmacy and Surgical in Woodbury, NY.

"People aren’t buying breakfast on the way in to work," said Owen Mester, whose Maspeth, N.Y., bakery makes and distributes yogurt muffins that get sold throughout the New York metropolitan area. "My competitors - I don’t know how - are offering a month of free delivery. I’m not sure how to counter that. At some point, we still have to still run the business."

Five of the six business owners at the meeting saw their sales fall last year, with the declines ranging from 8% to 40%. Most expect this year to be equally grim: Only one owner thought his sales for 2009 would be higher than last year.

To adjust to the new economic realities, business owners are shaving their staffing down to the bone. Businesses with fewer than 50 staffers have collectively shed 1.4 million jobs in the past six months, according to estimates by payroll processor ADP.

Nearly two dozen of those cuts came from the TAB group members. Mark Rickard, president of Rickard List Marketing in Melville, N.Y., has recently reduced 25% of his staff as a result of selling a division, layoffs and retirements. He wonders what else he can do to keep costs in line with his diminished sales. "In our future, I don’t see us laying off another person," he said. "But I think there are other creative things we can do, like two weeks’ unpaid vacation or temporarily dropping the salaries 5%. One of our competitors just did 10% across the board."

Managers are taking a hard look at their remaining staffers - no one can afford to carry marginal performers these days. One member of the group who runs a financial planning firm believes that his business will emerge from the downturn stronger if he can replace one of his employees with a more experienced candidate. "We are overpaying him - he’s not technically sharp enough," he explained. "We didn’t trust him with a project and we bypassed him to give the work to another person. I can’t afford to recheck everything he does. In this economy, we need to stress our efficiencies."

Others are cutting payroll costs by relying more heavily on less expensive entry-level hires faxless payday loan online. "We have laid off employees, but this year we will hire more students from college and high school to help the technicians," said Frank Kelly, president of commercial air conditioning and heating firm Kelair in Port Chester, N.Y. "They’ll be gofers for the summer. I’ll pay them, but they won’t need benefits. And I won’t have to carry them for the year. That may save me quite a bit of money."

There’s one silver lining for business owners in the grim job market: When they need to hire, they can hold out for an exceptional candidate. "For one ad I placed, we got 400 resumes," said James Buonfiglio, president of C&B Consulting Group in Syosset, N.Y. "In this market, we can pick the best people out there."

But staff cuts alone won’t balance the books. TAB’s entrepreneurs are trying to squeeze every possible efficiency out of their operations.

With new customers, direct-mail marketer Rickard has been more diligent about collecting payment within 60 days. At Villani’s pharmacy, the average amount customers spend per transaction has gone down. To compensate, he’s issuing extra coupons to get more people into the store.

C&B Consultant Group’s Buonfiglio has increased the time his business spends catering to its existing clients. C&B advises midsize companies on their employee benefit programs. Working with the CFOs of his clients’ companies, Buonfiglio and his staffers are conducting cost-control audits. At the meetings, the teams examine what each client is spending on benefits and how the business can save money without negatively affecting its employees.

"It’s been a tremendous amount of work," Buonfiglio said, adding that the company has been far busier than it usually is at this time of the year. His work is paying off in increased customer satisfaction and more business from current clients. Meanwhile, the auditing process is now a new service that he can pitch to prospective clients.

Economic experts say there are signs the economy may have already hit bottom and begun its rebound, but down in the trenches, business owners see a hard slog ahead. Those gathered for the TAB meeting predicted it will be at least a year or two longer before they feel the effects of an economic turnaround.

"I think we’ll see some recovery in the first quarter of 2010, but the aftermath may last a year," said Owen Mester, the baker. "The unemployment numbers, for example - I can see them lagging for months." 

Source

SARATOGA SPRINGS, N.Y. — Cash-strapped Americans looking for a cheap getaway at a state park or campground this summer are likely to find instead reduced hours, higher fees and closed beaches and pools.

State parks and historic sites across the nation have had to cut back because of budgets squeezed by the economic downturn, said Philip McKnelly, executive director of the National Association of State Parks Directors.

"Most states are trying to cut back in some area," McKnelly, former director of North Carolina’s state parks system, said.

Even as state parks are struggling, national parks that had service cutbacks two years ago are expecting an upswing fueled by federal stimulus dollars.

In Illinois, 11 state-run historic sites reopened in April after being shut down for five months to help close a budget deficit measured in the billions. Utah’s 43 state parks and museums are hiring fewer seasonal workers and eliminating some positions because their budget was slashed 15 percent. In Georgia, the budget passed last month slashes state park money by nearly 40 percent, while Wisconsin has more than 230 fewer seasonal parks workers this year than it had two years ago.

And a year after they successfully fought California Gov. Arnold Schwarzenegger’s proposal to shut dozens of state parks, advocates again face the possibility of closures, depending on a May 19 special election on the state’s complicated plan to close a huge budget shortfall.

"These (parks) systems need to be maintained. They don’t take care of themselves," said Elizabeth Goldstein, a former New York state parks administrator who’s now president of the California State Parks Foundation. "We are concerned that cuts might be proposed which are draconian to parks but have little financial ability to close the budget gap."

In New York, some state-run beaches and pools from Long Island to the shores of lakes Erie and Ontario will be closed or have reduced hours this summer, while campgrounds from New York’s southwestern corner to the Adirondacks are opening for the season later and closing earlier.

At Saratoga Spa State Park, the Peerless swimming pool popular with families and summer camps will be closed on Tuesdays, the day when it usually gets the fewest visitors, parks officials said fast cash advance.

That decision left some local recreation departments scrambling to find other swimming spots for youths who attend day camps.

"We’ve been going to Peerless on Tuesdays for a kabillion years," said Tracey Kubis, assistant recreation director for the town of Wilton, just outside Saratoga.

The service reductions come as many New Yorkers and other Americans look for inexpensive outings closer to home.

"It seems a shame in these times when everyone has less money and parks are one of the few affordable recreation outlets that they’re cutting back," said Robin Dropkin, executive director of the advocacy group Parks & Trails New York.

The situation is far different for the National Parks Service, which instituted its own round of service reductions just a couple of years ago. Under the current administration’s spending plan, the agency will get a 7 percent budget increase, according to Jeffrey Olson, a national parks spokesman.

"We have a huge stimulus package that’s working its way out into the countryside, so we are going to be spending $750 million in the next 18 months in national park units," he said.

Visits to the agency’s nearly 450 parks, cultural sites, battlefields and other properties increased by 3 million, to 275 million, from 2006 to 2007 before slipping slightly last year, Olson said.

This year, he said, "we think we’re going to be in the same ballpark, maybe a smidge up."

The 50-state total for state-park visitations increased by 18 million to nearly 748 million in 2008, when gas prices topped $4 a gallon, McKnelly said.

With unemployment rates up and the economy still in the doldrums, he expects those attendance numbers to remain strong in 2009.

"A camping trip to a state park, that’s typically going to be far less expensive than taking an extended trip and staying in hotels and motels," McKnelly said.

Source

The number of people filing initial claims for unemployment benefits fell last week, to their lowest level in more than 3 months, according to a government report released Thursday, suggesting the pace of decline in the job market is slowing.

But the number of people filing claims on an ongoing basis rose to a record high for the 14th straight week as employers remain reluctant to hire in the weak economy.

In the week ended May 2, a total of 601,000 people filed initial jobless claims, down 34,000 from an upwardly revised 635,000 in the previous week, said the Labor Department. It was the lowest level since the 590,000 claims filed in the week ended Jan. 24.

The total was smaller than expected. Economists had forecast 635,000 new claims, according to a consensus survey by Briefing.com.

The 4-week moving average of initial claims, which smooths out volatility in the measure, fell 14,750 to 623,500.

"We are seeing some improvement in the labor market," said Mark Vitner, an economist at Wachovia Economics Group. And Thursday’s report suggests "that the most recent peak in layoffs is behind us," he added.

But initial claims are expected to rebound in the coming weeks as now-bankrupt automaker Chrysler LLC shuts down plants and workers begin requesting benefits, Vitner said.

While the broader economy has show some signs of stabilization, analysts expect the job market remain weak even after economic conditions rebound.

The Labor Department is expected to report Friday that the nation’s unemployment rate rose to 8 low fee cash advance.9% in April from 8.5%, according to a survey of economists by Briefing.com. However, the number of jobs lost in April is expected to decrease 43,000 from the previous month to 620,000.

Continuing claims: The number of people continuing to file jobless claims rose to a fresh all-time high, indicating that more people are struggling to reenter the workforce.

"There’s no evidence that hiring has picked up and continuing claims increased further," Vitner said.

In the week ended April 25, the most recent data available, 6,351,000 continuing claims were filed. That’s a record high and an increase of 56,000 from the previous week.

The 4-week moving average for continuing claims was was 6,207,250, an increase of 125,250 from the prior week.

Signs of life: Thursday’s report comes one day after two private sector reports showed the job market is improving slightly.

Automatic Data Processing, a payroll processing firm, said private-sector employment decreased by 491,000 in April, a 31% improvement from the revised 708,000 drop in March. Economists had expected a loss of 643,000 jobs.

Separately, outplacement firm Challenger, Gray & Christmas Inc. reported that the number of announced layoffs fell for the third consecutive month in April, dropping 12% to 132,590.  

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The Obama administration has signaled its support for a congressional effort that aims to boost the troubled car industry by subsidizing new cars sales for consumers who scrap old ones.

Congressional Democrats, emerging from a meeting at the White House on Tuesday, said they had struck a deal on a bill to establish a one-year program to encourage the purchase of 1 million new cars and trucks that get better gas mileage.

Under the so-called cash-for-clunkers legislation, consumers with old, gas guzzlers could get $3,500 or $4,500 in government vouchers to use toward the purchase of new cars that get gas mileage that exceeds the old car’s by four miles per gallon.

"It’s going to be a dramatic boom for our economy," said Rep. Henry Waxman, D-Calif., who heads the House Energy Committee.

The bill would be a part of a larger energy bill, which House leaders hope to pass before Memorial Day, Waxman said in an impromptu press conference on the White House lawn with other Democrats on the House Energy committee.

The deal on cash-for-clunkers would put more vouchers in the hands of consumers than a competing bill in the Senate. Its broad nature is irking environmentalists who say it helps automakers more than the environment.

For example, under the deal, a consumer could turn in a clunker that gets 18 miles per gallon and get $3,500 to buy a car that just barely meets minimum emissions standards in the United States.

"It’s greenwash," said Therese Langer of the American Council for an Energy-Efficient Economy. "The notion that this would be part of an energy and climate bill seem particularly absurd."

But automakers Ford (F, Fortune 500) and General Motors (GM, Fortune 500) applauded the deal on Tuesday.

"It’s well structured, well-received by consumers, well supported by manufacturers and can have a positive effect on primary demand," said GM Chief Executive Fritz Henderson, who was on Capitol Hill talking with lawmakers credit reports. "This is something we’ve been supportive of, we’re encouraged by it and we’d like to see implementation rapidly."

The United Auto Workers union also commended the legislation, saying it would boost car sales.

"Congress should act right away on this high-priority measure, to deliver an immediate stimulus to our auto industry and to keep Americans working," President Ron Gettelfinger said.

Even after the House deal, however, the fate of the Senate version remains uncertain.

The environmentally tougher Senate bill would require that the subsidies be limited to new cars that get 25% better gas mileage than current minimum fuel standards (27.5 miles per gallon for passenger cars and 23.1 for trucks).

The House deal does not offer any vouchers for the purchase of used cars. It also has drawn the ire of auto recyclers, because the clunkers would have to be destroyed.

Bill proponents have pointed to programs in Europe, especially in Germany, where auto sales increased dramatically after the country enacted a program to subsidize purchase of new cars by scrapping clunkers that are at least 9 years old. However, emissions standards on new cars throughout Europe are tougher than American standards.

But bill sponsor Rep. Betty Sutton, D-Ohio, called the deal a "good example of what collaboration can do."

"It will spur auto sales and stimulate the economy," said Sutton who was also at the meeting at the White House. "Energy independence is going to require that kind of innovative thinking and deal with the transition that this bill requires." 

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