AFP NEW YORK
THE global financial crisis on Tuesday closed in on General Motors, which said it would need a government. The news capped another day of gloomy developments in the US, undermining hopes that co-ordinated action by governments around the world could keep the global downturn from getting worse.
Fannie Mae, the US mortgage giant bailed out by the government earlier this year, posted a $29 billion loss. The latest dire reports from the US triggered more woe for Asian stock markets, which lost ground Tuesday in line with US shares. Tokyo lost 3.0% while Hong Kong was off 0.6% at the mid-day break.
General Motors CEO Rick Wagoner said the US automaker would need state help before Barack Obama takes over the White House in January, telling industry publication Automotive News that time was of the essence. “This is an issue that needs to be addressed urgently,” he said, calling on the government to “overshoot, not undershoot” the level of assistance. His call for support came as GM shares lost 23% Monday after analysts at Deutsche Bank said they expected the stock eventually to be worth nothing at all. “Even if GM succeeds in averting a bankruptcy, we believe that the company’s future path is likely to be bankruptcy-like,” the bank said.
Obama asks Bush to aid automakers
President-elect Barack Obama asked president George W Bush during a White House meeting for immediate aid for the struggling US auto industry onTuesday. Bush said he could support some aid in exchange for approval of a freetrade agreement with Colombia, however, neither Obama nor Democrats in Congress, who been blocking the trade pact, seem willing to bend on Colombia. US labour leaders oppose the agreement in protest over numerous murders of trade unionists in Colombia at the hands of right-wing paramilitary squads who, critics say, are often closely linked to the Colombian armed forces.