Auto Bailout May Grow; Shopping Dropping Fast
MALVEAUX: Just days before the new year, let's check where the big auto industry bailout stands right now and the prospects for an even bigger rescue down the road. Well, it may all hinge on President-elect Obama and how much heat he feels from the autoworkers union. Let's bring in CNN's Samantha Hayes. Samantha, big labor contributed a lot of money, a lot of time, obviously, to Obama's campaign. I guess the question is, do they expect that they're going to get an easier deal when he comes into office?</s>SAMANTHA HAYES, CNN CORRESPONDENT: They probably do. And pretty soon they're going to be receiving some of the billions of dollars in bailout money. There's already indication that GM will be coming back for more as soon as the new Democratic president is in the White House.</s>HAYES (voice-over): Even before the Iowa caucuses more than a year ago, Barack Obama let big labor know he was a friend.</s>SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: If the Democratic Party needs anything, it needs</s>HAYES: Workers will soon be testing that promise. And the United Auto Workers in particular. Under President Bush, the big three are getting more than $17 billion, but union bosses don't like the terms of the current deal.</s>RON GETTELFINGER, UAW PRESIDENT: I think it's unfair to say that workers have to work at a rate that's comparable to other foreign brands that manufacture here.</s>HAYES: Economist Peter Morici says a Democratic administration bodes better for big labor, but the economy will decide how far the incoming president will go.</s>PETER MORICI, ECONOMIST, UNIVERSITY OF MARYLAND: When you get a Democratic administration, you get changes at the Labor Department and in policies. And that generally makes it easier for unions to organize. They will get some concessions from Obama, but he's not going to give away the store.</s>HAYES: The Center for Responsive Politics says unions spent about $180 million to put Democrats in power in 2008. Other sources say it was much more than that. Nevertheless, the influence of labor unions may be fading.</s>GARY BURTLESS, BROOKINGS INSTITUTION LABOR ECONOMIST: Unions have been very hard hit over the last 30 years in -- mainly because they haven't been successful in organizing new workers.</s>HAYES: As a senator, Mr. Obama sponsored the Employee Free Choice Act. If signed into law in 2009, employers would be required to recognize a union if a majority of workers signed membership cards, but the priority is still jobs.</s>THEA LEA, AFL-CIO POLICY DIRECTOR: I think one of the first issues facing the new administration is going to be the size and the shape and the content of the economic recovery package. And that's where working people are really going to need strong advocates to make sure that we're creating as many good jobs in the United States as possible.</s>HAYES: The unions may also have a friend in President-elect Obama's choice for labor secretary. Hilda Solis, her parents were union workers, and she has supported a higher minimum wage and the right to form unions.</s>MALVEAUX: And they've certainly spoken very well of her, so they're hoping that she makes a difference, an impact there.</s>HAYES: Yes. Also, you know, Vice president-elect Joe Biden, they feel they have a strong connection to him, as well.</s>MALVEAUX: OK. Thank you so much, Samantha. It is a gloomy week after Christmas for retailers right now. The slump in sales this holiday could continue into the new year, and that means drastic changes for stores and shoppers. Here's CNN's Deborah Feyerick. And Deborah, you know, I'm hearing it's just not that pretty out there.</s>DEBORAH FEYERICK, CNN CORRESPONDENT: It is definitely not that pretty. And I don't know if you went to any of the sales over the weekend, but next time you go shopping, take a good look at some of the stores around. They may not be there in six months. They're casualties of the recession.</s>FEYERICK (voice-over): With markdowns, you would think people would be buying like crazy. So why aren't they? (on camera): People are still edgy.</s>UNIDENTIFIED MALE: Oh, absolutely. People are just very worried about what's going to happen to their job, what the future outlook is going to be. You know, if you're that next percentage point on the unemployment rolls, you don't want to spend right now.</s>FEYERICK (voice-over): Malls were packed after Christmas, but the spending surge storeowners were praying for didn't materialize, a sign the shopping landscape may radically change soon, say retail analysts like Joseph Feldman. (on camera): Here you have a store that says 60 percent off. What do you think it's going to look like in the next six months?</s>JOSEPH FELDMAN, TELSEY ADVISORY GROUP: Not all the stores are going to survive. I mean, there's quite a few retailers that are on the endangered list right now.</s>FEYERICK (voice-over): Stores like Linens and Things, Sharper Image, Bombay Company and Mervyns have all but disappeared. Rumors about Circuit City spurred shoppers to use gift cards sooner rather than later...</s>UNIDENTIFIED MALE: Since it was going to close down, might as well use it sooner than before it does close.</s>FEYERICK: ... while companies like Borders, Ann Taylor and the Gap are expected to tighten up and close stores that don't perform well.</s>FELDMAN: We're going to see store closings, we're going to see Chapter 11 bankruptcies, we're going to see less store expansion. A lot of the retailers that have announced their expansion plans for 2009 have really cut it down it a fraction of what it should be.</s>FEYERICK: A trade group that represents shopping centers estimates 73,000 retail shops, including restaurants and jewelry stores, will close the first half of 2009. That's on top of the 148,000 stores already expected to close this year. Retail trade groups say only stores and shopping centers that have traditionally done well will likely survive these turbulent times.</s>SCOTT KRUGMAN, NATIONAL RETAIL FEDERATION: That is going to impact mom and pop retailers more than larger national chains. I do believe you're going to see consolidation. And I think some of the most at- risk companies are probably those companies that don't have a lot of cash reserves.</s>FEYERICK: Now, clearly, it's not just so-called mom and pop shops at risk, but smaller designers who may be on the verge of breaking through. They not make it. And overall, that's a lot of jobs that could be lost. The retail industry waiting with bated breath for President-elect Obama to detail his economic stimulus plan -- Suzanne.</s>MALVEAUX: And Deborah, I was out there over the weekend, and it really was dismal. A lot of low prices, but not a lot of consumers, not a lot of people out there. Not crowded at all. Do some of these retailers -- are they looking for a federal bailout plan? Do they hope that they can get some money?</s>FEYERICK: You know, it's a very good question. Right now, retailers are really just trying to figure out exactly how they can hold on. It's the banks. The banks have to start making these loans to these small retailers so that they can continue to stay afloat during this very difficult time. That's where the sticking point is. It's unlikely that the retailers as a whole are going to go to Congress and ask for money. But they need that money from the banks, and right now they're just not getting it.</s>MALVEAUX: Sure. OK. Thank you so much, Deborah. Israeli forces mobilize for what is being called an all-out war on Hamas. But where does Hamas turn for the training and the cash to fight back? The U.S. and Israel say it's Tehran. And later, he says he won't leave. But is Illinois's embattled governor on his way out sooner than he thinks? We'll check it out. 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