GM Chief Heading for a Crash?

First the good news for General Motors CEO Rick Wagoner. After weeks of industry pleading, it looks likely that lawmakers will drive through a short-term $15 billion auto loan, writes the Detroit News. That will save GM and Chrysler from hitting the wall for at least a couple of months. The bad news for Wagoner, writes the Wall Street Journal, is that he is "coming under increasing pressure from outside the company to resign," most notably from Sen. Chris Dodd, a supporter of a broad auto bailout. Whatever form the rescue takes, it will come with strict regulatory strings attached, including "the possible creation of an oversight board made up of five cabinet secretaries" and maybe even a "car czar," writes the New York Times. (What, no SUV Svengali?) President-elect Barack Obama "accused auto executives of a persistent 'head-in-the sand approach' to long-festering problems," even as he lent his support for a short-term bailout, writes CNN Money. "If this management team that's currently in place doesn't understand the urgency of the situation and is not willing to make the tough choices and adapt to these new circumstances, then they should go," Obama said.

On the subject of CEO tin ears, the Wall Street Journal reports that Merrill Lynch chief John Thain "has suggested to directors that he get a 2008 bonus of as much as $10 million." That would be the same Merrill Lynch that suffered net losses of $11.67 billion this year and that is about to be acquired by Bank of America. But while the Merrill compensation board seems disinclined to dole out bonuses this year, people close to Thain argue that his "decision to sell Merrill likely salvaged billions of dollars for shareholders and saved a huge number of jobs at the firm, even though thousands of positions will be eliminated following the takeover." Thain's request is relatively small by Wall Street standards, writes the WSJ. "In recent years ... many CEOs were making in excess of $50 million," it writes.

The clock is ticking for the Tribune Co., publisher of the Chicago Tribune, the Los Angeles Times, and the Baltimore Sun and principal owner of the Chicago Cubs. The country's second-largest newspaper chain faces a deadline today to settle a $70 million debt payment. Struggling under a total debt load of $13 billion, the Tribune Co.'s owner, Samuel Zell, has hired bankruptcy advisers at investment bank Lazard and law firm Sidley Austin "to weigh its financial options," the Chicago Tribune reports in an extremely brief article today. The NYT says it's hard to gauge the significance of hiring bankruptcy specialists. The move, the newspaper writes, "could be a just-in-case move, or a bargaining tactic." The WSJ isn't so circumspect. "Tribune Co. is preparing for a possible filing for bankruptcy-court protection as soon as this week," the WSJ writes, citing people in the know.

The Tribune Co.'s creditors no doubt won't be happy with the latest advertising industry predictions, expected to be unveiled today. The WSJ has had an early peek and reports that two much-watched industry forecasts—from ZenithOptimedia and WPP's agency GroupM—are both predicting drops in ad spending for 2009. The former is predicting a 6.2 percent fall in ad spending in the U.S., while GroupM figures that ad outlays here will drop by 3 percent. "Spending cuts probably will be most severe for newspapers, magazines and radio as advertisers shift dollars to digital media," the newspaper reports, adding that "one bright spot continues to be Internet, which will keep on growing, albeit not as quickly as in recent years."

Meanwhile, the NYT reports today on yet another market crash—the recyclables market. Simply put, "trash has crashed," the newspaper writes. There is little demand for recycled waste—cardboard, plastic, newspapers, and scrap metal are all piling up unwanted. In better times, these materials were put to good use. "Ordinarily the material would be turned into products like car parts, book covers and boxes for electronics. But with the slump in the scrap market, a trickle is starting to head for landfills instead of a second life," the NYT writes.

Finally, even if the real world looks bleak, at least the virtual world of video gaming is still booming. The Financial Times reports that Microsoft saw "November as its biggest sales month in Europe for the Xbox 360 console—sales rose 124 per cent on a year ago. In the US it announced its best Black Friday, the day after Thanksgiving, with sales up 25 per cent on the year." Even online retail in general hasn't completely tanked. New ComScore figures show that holiday e-commerce has now matched 2007 levels—a minor ray of hope in a retail sector that is reeling from 20 percent to 30 percent drops in sales across the board.