G-20 Takes Place in London; Ultimatum For the Ailing Auto Companies: What That Means For You
CHRISTINE ROMANS, CNN HOST: Welcome to "YOUR MONEY." I'm Christine Romans here in New York. An incredibly busy week from Detroit to Washington to London. I'm all alone here in New York because Ali's coming to you from Los Angeles. Ali, we're like the bi-coastal anchor couple this week.</s>ALI VELSHI, CNN HOST: I miss you out here.</s>ROMANS: I know.</s>VELSHI: But California's a really, really important part of this story. From a housing perspective, we have seen some of the biggest losses in home prices, home values, in California. In the last year- and-a-half, we've also seen some of the largest foreclosure numbers and the jobless number. California is one of a handful of States with an unemployment rate in the double digits right now. And on top of that, we've got the G-20. You just mentioned London; a gathering of world leaders in London. Did President Obama get what he wanted and is that useful to us here in the United States? We'll get a full G-20 report as only Richard Quest can deliver.</s>ROMANS: Oh, and he delivers every time, doesn't he?</s>VELSHI: He does.</s>ROMANS: Also ahead, GM and Chrysler, they have been warned. We'll find out what the ultimatum for the ailing auto companies means for your job, your car payment, and your warranty.</s>VELSHI: But the big, big, big story today is the unemployment report. Unemployment in this country now stands at 8.5 percent. That is the highest in more than 25 years. More than 5 million jobs have been lost since the start of this recession. And even as Wall Street shows some recent signs of a rebound, the staggering job losses mean that many Americans have yet to see any glimpse of a real recovery. Let's break this down by month. Let's take a look at what we've got. We have the unemployment rate and the unemployment report for the month of March. But let's go back a few months to October, where we really started to see the heavy job losses after the credit losses set in: 651,000 jobs lost in October, 655,000 in November, 681,000 in December. Look at January, the worst of them all so far, 741,000, back to 651,000 in February, and then up again. Boy, Christine, I was so hoping that March would show a lower number, some indication that we were trending away from these high, high unemployment numbers. But that's not even the full story, Christine. When you break it down further, it becomes a lot more relevant to people.</s>ROMANS: It's absolutely true. Ali, the work week, you can feel this at your job if you have your job. The work week is just over 33 hours a week now. Think of that. That work week keeps shrinking because companies don't have enough business to keep you employed full time. They're trying to cut hours so they don't have to cut as many jobs. You look at some of the job loss by sectors, you're actually seeing a gain for housing -- for health care, rather. A little bit of a gain, 14,000 jobs. That doesn't even make a dent into the losses you're seeing elsewhere. Construction, manufacturing, business services, even government jobs lost jobs in the month. And the government says in its report, Ali, point-blank: vast job loss across almost all sectors. It's clearly, clearly something that continues to be a problem. The pace of the declines over the past five months show that you're right, Ali, after that credit crisis in the fall, companies are really throwing in the towel.</s>VELSHI: Now we're going to give you some real specific advice on this show, things you should do immediately if you're looking for a job and some sense of where might jobs be geographically and by industry. But even as you indicated those places where there has been job growth in the last year or so, in government, in retail, in education and in health care, even those are slimming down. So you cannot expect that your job is likely to come back. You have to be prepared for this to be going on longer and you being able to perhaps retrain or move somewhere else to get a job.</s>ROMANS: One job that is not coming back is Rick Wagoner's job. He is the CEO, the former CEO of GM, of course. And an ultimatum from the White House this week, Ali, to GM and Chrysler, look, we're going to give you financing for 30 days for Chrysler, 60 days for GM, but you've got to get your house in order, because this is your last, last chance.</s>VELSHI: And that's a very, very big deal. As you know with the three U.S.-based automakers, Ford has been in the healthiest position of the three, not having to take any government money. But they sort of started a downsizing or a right sizing back in 2005. General Motors was on its way to doing such a thing, but this credit crisis has hit all automakers, not just U.S. automakers, as people are not buying cars, maybe because they can't get the credit they need to do so, maybe because buying a car isn't your priority if you think you might be losing your job or you have already lost your job. General Motors has got to come up with a plan for viability. All of the auto makers were asked for one in February. They came up with one and the White House has come back to General Motors and Chrysler and said, these plans are not likely to work. In the case of Chrysler, it's looking for an alliance with Fiat, but there are a lot of are observers who say they're not entirely sure why a combination of Chrysler, which is a very troubled company, with quality issues, with production issues, and Fiat would actually make a company that would work and be viable. So it's entirely likely that in the next 30 to 60 days, we're going to be talking a lot more about the auto industry. What is that going to mean to you and your job and your community, which in many cases is depending on the spending of auto dealership?</s>ROMANS: And your warrantee.</s>VELSHI: And your warrantee.</s>ROMANS: The government is stepping so that it can back up the warranty with GM and Chrysler, so you'll be comfortable to still buy a car in that period. I want to read something in the "Detroit Free Press," Ali, because I think it is very telling about just how monumental that move was this week. Quote, "not since President Franklin Roosevelt considered taking control in Ford Motor Company in 1943 from the failing Henry Ford has the federal government pushed for such sway in the management of Detroit's automakers. The tack suggests a hard-nosed approach from the Obama administration toward the automakers, bond holders and the UAW." There was a little bit of concern, frankly, about, wait, how come they're being so tough on the blue collar auto industry and not on the white collar banking industry? But Ali, when you dig into it, it's interesting, Timothy Geithner, the Treasury secretary, this week, said he would, if he had to -- he would remove a bank CEO. And they have changed much of the board of Citigroup and also they've named the CEO of AIG, Freddie -- Freddie Mac, Fannie Mae. This is an incredibly interesting time right now, with the government with such management over private industry.</s>VELSHI: That leads us to another big thing. The president in London for the G-20 and the idea of how much oversight over industries should governments have? How much regulation of industry should governments have, given how much they've intervened financially?</s>ROMANS: Let's bring in our very own Richard Quest, host of "Quest Means Business" and talk about this G-20 conference. Richard, a couple of questions. How did President Obama do on the world stage his first time out? And did he get what he wanted? And is capitalism wounded here and how badly? I mean, gosh, calling for an end to the old Washington consensus? Sarkozy talking about turning the page on the Anglo-American dominance of world markets.</s>RICHARD QUEST, CNN INTERNATIONAL CORRESPONDENT: No, there's a lot there that we need to dissect surgically and slowly. First of all, your question, how did President Obama do on the world stage? Look, what did you expect him to do? Spit on the carpet and not know which knife and fork to use? The president did very well, thank you. He came with a large entourage of some 500 security and staff and they set out their agenda. Everybody knew what the U.S. wanted. They wanted more on stimulus. They didn't want the global regulator. They did want some things and not others. I don't think they got everything. I think they may well regret some parts of it. But in terms of President Obama himself, he was, in many ways, a cornerstone of that conference, because he had to accept that the U.S. -- the U.S. markets were largely responsible for the crisis we are in. He did so with grace and with gratitude, and then they moved on. And you had so many questions, I completely forgot the other one.</s>VELSHI: I'll pick one up. It's Ali here. We were making a little fun of you last year because you always happen to find yourself at these major world events, where they have fantastic cocktail parties. But really, there were many people who thought this would amount to not much more to either a cocktail party at best and at worst a drubbing for the United States. And there does seem to have been much more that came out of this. Certainly markets liked what happened.</s>QUEST: I think the real problem was the media wanted it to be a big blast, I think. I actually have always believed that something substantive would come out of it, because I've been in the G-20 in Washington, and I've seen the positions. They knew -- we hear one phrase again and again and again: whatever it takes for however long is necessary. Now, if you are a policy maker, you don't use those sorts of words unless you intend to back it up by actions. We can argue about whether they're the right actions, 1.1 trillion by the IMF, greater regulation, tax -- beating up on the tax havens. But at the end of day, they had to do something along those lines. They had to be seen to be taking action. And the reaction that I've seen and you've seen in the markets is it wasn't as much as it could have been. It was more than expected. It's a start, not a finish. And they're moving in the right direction. Now, I don't know about you, but here on the "Quest Means Business" set, we have a little bell. That's not a bad deal to my way of thinking.</s>ROMANS: I'm telling you, Richard and Ali, I really do think there was real work done there. And Ali and I had a conversation earlier this week about come on, this day of modern technology, why are they getting on a plane. They're all getting in the same room in all of this. Listen, I really think some work got done there, and I think they showed a global face. I do want to ask quickly this idea that American style capitalism is wounded and that we're turning a new page on to kind of a new era; is that overstated?</s>QUEST: Well, the British prime minister used the phrase Washington consensus. And that was then discussed by President Obama in his news conference. It is a term of art. It's a very specific reference to a particular type of thinking in economies that relates to trade flow. It's not like</s>VELSHI: A lot got accomplished there, Richard, as you said, maybe not as much as we would have liked, but more than some of us expected. I'm never going to make fun of you again for covering a conference. Great to see you, my friend. Great work covering it.</s>QUEST: Way, listen, listen, listen, hang on. I've got one thing to tell you.</s>VELSHI: What's that?</s>QUEST: I might be coming your way for the next G-20, which we can talk about. And, by the way, don't forget I think I'm still beating you on Tweet and Twitter names and numbers. But the next G-20 is in New York, I believe, and it is in September. And we'll be able to go hammer and thongs, face-to-face.</s>VELSHI: You'll be our guest; @RichardQuest on Twitter, @AliVelshi on Twitter and @ChristineRomans. Follow us all. Richard, great to see you as always.</s>ROMANS: All right, it's the worst jobs market in a quarter century. The three things you must do today, right now, to protect your job.