GM to announce brand changes, restructuring moves

DETROIT – The storied Pontiac brand is dead and more car factories and jobs are about to disappear — the latest casualties of a massive restructuring plan that GM is counting on to help it stave off bankruptcy protection.

The struggling automaker will announce details of its plan at 9 a.m. EDT Monday as it makes an offer to its bondholders to swap debt for company stock. GM owes $28 billion to large and small bondholders, and under Securities and Exchange Commission rules, it must disclose its operational plans when it makes an exchange offer.

Two people briefed on GM's plan confirmed that it includes the demise of Trans Am sports car brand Pontiac, 83 years after the first Pontiac car was introduced. Within three years, half a million Pontiacs were sold, and the brand quickly grew in popularity, from early models like the Chief and the Master Six Coupe, to the Bonneville convertible, to the GTO — one of America's first muscle cars and so popular it inspired the Beach Boys to immortalize it in song.

But efforts in the last few years to market Pontiac as performance-oriented brand failed. The company had said it wanted to keep Pontiac as a niche brand with one or two models, but is buckling under tremendous government pressure to consolidate its eight brands, several of which lose money.

The company also has decided to close more factories than the five it announced in February, the two people said, asking not to be identified because the plan has not yet been made public. But the locations of the doomed factories will not be identified Monday.

One of the people said GM will list specific numbers of blue-collar job cuts, and announce another round of U.S. salaried job cuts beyond the 3,400 completed last week.

Chief Executive Fritz Henderson has said the company will go further and faster in making its cost cuts to reduce the number of cars and trucks it needs to sell to break even. One of the people briefed on the plan said GM will accelerate many cuts previously planned for 2014 to instead take place between now and 2010, although specifics were not available.

The people said GM won't have much new information on Hummer, Saturn or other brands, including Europe's Opel. GM has indicated it wants to focus on four core brands, Chevrolet, Cadillac, GMC and Buick.

Also to be announced Monday will be a target number for dealer reduction, as well as details of GM's bond exchange offer. Exact numbers were not available Sunday night.

The news conference will include Chief Executive Fritz Henderson, Chief Financial Officer Ray Young, North American President Troy Clarke and Mark LaNeve, vice president of North American sales and marketing.

GM is living on $15.4 billion in government loans and faces a government-imposed June 1 deadline to restructure or go into bankruptcy protection.

The government's restructuring demands include swapping at least two thirds of GM's unsecured bond debt for equity in the company. Such a move would help GM straighten out its debt-laden balance sheet.

Chrysler LLC, which is living on $4 billion in government loans and is expected to get $500 million more, faces a Thursday deadline to restructure and ink an alliance deal with Italian automaker Fiat SpA. The government also wants Chrysler to exchange much of its $6.9 billion in debt for equity in the company, but with the deadline fast approaching, Chrysler and its secured debtholders remain far apart.

Both GM and Chrysler also must win concessions from the United Auto Workers union.

The UAW said late Sunday it reached agreement on concessions with Chrysler, Fiat and the U.S. government. Fiat CEO Sergio Marchionne was in the U.S. as talks continued for the automaker to take a 20 percent stake in Chrysler in exchange for its small-car technology.

Chrysler reaches labor deals in fight for survival

DETROIT – It looks like scrappy little Chrysler LLC might yet escape the auctioneer's gavel.

The smallest U.S.-based automaker cleared two major hurdles on Sunday in its quest for survival, reaching a concession agreement with the United Auto Workers and winning ratification of its cost-cutting deal with the Canadian Auto Workers.

That leaves only two obstacles standing between Chrysler and up to $6 billion in additional loans from the U.S. government: A partnership deal with Italy's Fiat Group SpA and an agreement to swap equity for debt with banks and hedge funds that hold $6.9 billion in secured Chrysler loans.

Details of the UAW deal weren't disclosed, but the union said it was crafted together with Chrysler, Fiat Group SpA and the U.S. government. That means the cost cuts have been blessed by the Treasury Department, which has been overseeing efforts to restructure Chrysler and its Detroit counterpart, General Motors Corp.

It also means Fiat was heavily involved in negotiations, a sign that the Italian automaker is serious about taking a 20 percent stake in Chrysler in exchange for providing the Auburn Hills, Mich., company with small-car technology.

Chrysler has been living on $4 billion in government loans and may get another $500 million to keep it alive through Thursday's deadline to restructure to the government's satisfaction. If it can't close the final deals, however, no more government money will be made available and the company almost certainly would be auctioned off in pieces under bankruptcy court supervision.

For weeks, it appeared Chrysler might not be able to meet a deadline many in the industry considered impossible. But White House economic adviser Larry Summers said Sunday the Obama administration is holding out hope that Chrysler can avoid bankruptcy court.

And two people briefed on negotiations with Fiat said the companies are close to signing a deal as long as debtholders agree to take equity in the company for a portion of the $6.9 billion they are owed. The people didn't want to be identified because talks have not been made public.

The UAW late Sunday called the concessions painful but said the deal takes advantage of the Obama administration giving Chrysler and its workers a second chance. The administration in February rejected Chrysler's original restructuring plan, saying the company could not stand on its own and had until April 30 to make further cuts and take on Fiat as a partner.

"The provisional agreement provides the framework needed to ensure manufacturing competitiveness and helps to meet the guidelines set forth by the U.S. Treasury Department," Chrysler Vice President of Labor Relations Al Iacobelli said in a statement. "As a result, Chrysler LLC can continue to pursue a partnership with Fiat SpA."

Separately, Canadian Auto Workers President Ken Lewenza said their deal makes labor costs competitive with non-unionized Toyota in Canada. It will save Chrysler about $240 million a year Canadian (US$198 million) even though it doesn't cut base wages or pensions, amounting to the $19 Canadian (US$15) an hour in savings the company was seeking. The agreement eliminates Christmas bonuses, semiprivate hospital room coverage, certain drug fees and a one-time vacation buyout of $3,500 Canadian (US$2,885). It also reduces break times and vacation time.

Meanwhile, debtholders, the company and the Treasury Department remain far apart on terms to swap equity in the company for much of the debt. A counteroffer to the debtholders from the Treasury is expected as early as Monday.

UAW Vice President General Holliefield said in a statement that UAW members and retirees are being asked to make extraordinary sacrifices to help Chrysler become viable.

"In order for the company to have a sustainable future, all stakeholders will have to show the same willingness to contribute to the common good that has been demonstrated repeatedly by our membership," he said.

After rejecting the February plan, the government had said the UAW and Canadian Auto Workers unions must make further concessions, including the UAW taking equity in the company for at least half of a $10.6 billion payment into a union-run trust that will take over retiree health care costs starting next year.

The UAW says its deal "meets the requirements of U.S. Treasury Department loans to the company," and includes changes to the health care trust. Details will be presented to local union officials from across the country on Monday, with voting to wrap up by Wednesday.

"We recognize this has been a long ordeal for active and retired auto workers, and a time of great uncertainty," UAW President Ron Gettelfinger said in a statement. "The patience, resolve and determination of UAW members in these difficult times is extraordinary, and has made it possible for us to reach the agreement we will present to our membership."

Fiat CEO Sergio Marchionne was in the U.S. as talks continued for the automaker to take a 20 percent stake in Chrysler in exchange for its small-car technology. The government has said it would be willing to loan Chrysler up to another $6 billion if it is able to complete its restructuring and ink the deal with Fiat.

Fiat may build the small cars at Chrysler factories in the U.S., but they wouldn't arrive until late 2010 or early 2011, according to industry analysts.

"We're hopeful that the negotiations, which have been proceeding with great energy, are going to conclude successfully," Summers said in an appearance on "Fox News Sunday." "You never know — with any negotiation — until the very end. There are some issues that have been worked out. There are some issues that remain to be worked out, but it's in everybody's interest to see these negotiations succeed and we're hopeful that they will."

Also Sunday, General Motors Corp., which is living on $15.4 billion in government loans, said it will update its restructuring plan on Monday.

Two people briefed on the plan said GM will scrap its storied Pontiac brand and shutter more factories than the five it said in February it would close. The factories' locations won't be disclosed, said the people, who asked not to be identified because the plan has not been made public.

The plan will come as the company announces an offer to exchange up to $28 billion in GM bond debt for stock in the company.

GM faces a June 1 deadline to restructure or head into Chapter 11 bankruptcy protection.

Chrysler lenders preparing counter offer: sources

NEW YORK/DETROIT (Reuters) – Chrysler LLC's first-lien lenders are preparing another counter-offer to the U.S. Treasury that involves reducing the automaker's debt, sources familiar with the matter said on Thursday.

The U.S. Treasury on Wednesday offered the lenders $1.5 billion and a 5-percent equity stake in a restructured Chrysler in exchange for about $7 billion of debt they now hold.

The lenders' steering committee is preparing a counter-offer that would include better terms for the lenders, and the offer should be ready "soon," one of the sources said.

The lenders had initially offered to retain about $4.5 billion in debt and take a 40-percent stake in a new Chrysler supported by government investment and a deal with Italian automaker Fiat SpA.

That would have marked a much richer payout for the creditor group than U.S. officials first offered the banks, when they were asked to write off almost $6 billion in debt for no equity that would allow the lenders to benefit from a recovery from the automaker.

The committee representing Chrysler lenders includes the banks that helped finance Chrysler's 2007 sale to private equity firm Cerberus Capital Management: JPMorgan Chase & Co, Morgan Stanley, Citigroup Inc and Goldman Sachs Group.

The committee was broadened earlier this month to also include Oppenheimer Funds, Stairway Capital Management, Elliott Management and Perella Weinberg Partners.

BANKRUPTCY POSSIBLE

Chrysler has been loaned $4 billion in emergency funds by the U.S. government and has asked for another $5 billion to operate.

The White House-appointed autos task force has given Chrysler until the end of the month to reach agreements for an alliance with Fiat, a reduction in secured debt and resolution of labor issues with its unions.

Without those deals, the Obama administration has said it would cut off funding for Chrysler. The automaker has said such a move would send it into a bankruptcy to liquidate assets.

Separately, the New York Times said on its website the U.S. Treasury is preparing a Chapter 11 bankruptcy filing for Chrysler that could come as soon as next week, citing unnamed sources.

In response to the New York Times report, Chrysler said it would continue to work through the end of April to secure the support of the necessary stakeholders and reach a conclusion the Obama administration and U.S. Treasury "deems appropriate."

Meanwhile, the Treasury expects only a "small percentage" of recovery on the loans it has given to Chrysler in case the automaker liquidates its assets in bankruptcy, a report by the Government Accountability Office (GAO) said on Thursday.

"According to Treasury, in the case of Chrysler, the sale of the assets would result in cash equal to only a small percentage of the value of the loans," the GAO, the investigative arm of Congress, said in the report.

The Treasury was unable to obtain senior liens on most assets as they were already encumbered, the report said.

This is the first time the U.S. government has characterized the potential recovery of the loans it has given Chrysler, or laid out the rationale behind its decision to accept third lien credit behind banks and Daimler AG and Cerberus Capital Management.

Chrysler aims for Fiat but readies bankruptcy plan

WASHINGTON/NEW YORK (Reuters) – With a week remaining for Chrysler LLC to clinch a deal with Italy's Fiat (FIA.MI), the U.S. automaker is readying a bankruptcy plan but still focused on reaching an alliance with the support of the Obama administration, people with knowledge of the discussions said on Thursday.

Fiat, meanwhile, also emerged as a potential buyer for General Motors Corp's (GM.N) Opel unit in a deal that would mark the Italian automaker's emergence as a major global player with a role in the restructuring of two of Detroit's sputtering carmakers.

Chrysler, which faces a government-imposed April 30 deadline to cement an alliance with Italy's Fiat or face a cut off of its federal funding that could trigger its liquidation in bankruptcy, has been preparing for a Chapter 11 filing as a contingency, a person with direct knowledge of the plans said.

A U.S. official said the focus for the autos task force headed by former investment banker Steve Rattner was for brokering a Chrysler-Fiat deal even as it prepared for the alternative.

"In a negotiation like this, everything is speculation until there's a deal," the official said.

"It should surprise no one that the administration is planning on contingencies, but we remain focused on the goal and engaged with all stakeholders to bring Chrysler and Fiat to a working partnership."

Both people spoke on the condition they not be named because the talks involving Chrysler, Fiat, related unions and bank lenders are confidential and ongoing.

Chrysler said in a statement it would follow the task force's guidance and was keeping "all options open." It pledged work with stakeholders to "reach a successful conclusion" to its restructuring.

Earlier, the New York Times and The Wall Street Journal reported Chryslers' bankruptcy plans could include a filing as soon as next week that would allow Fiat to emerge with Chrysler's strongest assets.

One major sticking point has been attempts by the administration to get Chrysler's secured lenders to restructure some $7 billion in first-lien debt they now hold.

The sides have been exchanging proposals and the banks were expected to make another as soon as Friday, according to sources briefed on those talks.

U.S. Sen. Debbie Stabenow, a Michigan Democrat, urged lenders to reach a deal to save Chrysler.

"The clock is ticking for hundreds of thousands of current Chrysler employees, retirees, suppliers and dealers," Stabenow said in a letter to JPMorgan Chase & Co (JPM.N), Morgan Stanley (MS.N), Citigroup Inc (C.N), Goldman Sachs Group (GS.N), Elliot Management, Stairway Capital Management, Perella Weinberg Partner and Oppenheimer Funds.

Separately, the head of the Canadian Auto Workers union said late on Thursday that he expected to have a cost-saving deal completed with Chrysler by Friday morning.

Canada is also considering providing financing to both Chrysler and GM if the companies end up filing for bankruptcy, Industry Minister Tony Clement said.

'NO REASON WHY THIS SHOULD NOT HAPPEN'

Fiat Chief Executive Sergio Marchionne said on Thursday it was premature to consider picking up Chrysler's assets in a bankruptcy proceeding.

"Based on what I know today, I see no reason why this should not happen and I can only confirm our unwavering commitment to get this transaction done," Marchionne told reporters after Fiat reported quarterly results.

GM, meanwhile, is facing a June 1 deadline to complete its restructuring, with the aid of up to $5 billion in new government bailout funds, or face likely bankruptcy.

In a move underscoring the continued pressure it faces, GM said on Thursday it would slash production over the next three months to cut its inventory of cars and trucks and avoid the risk of an "uncontrolled shutdown" from the financial crisis at bankrupt supplier Delphi Corp (DPHIQ.PK).

GM and Chrysler have both been hit by unplanned production shutdowns in the past several years due to problems at suppliers. GM said it wanted to avoid something similar if its negotiations with Delphi's lenders failed to produce a deal for its former subsidiary to emerge from bankruptcy.

"We believe that continuity of supply to GM will be best assured by resolving the issues that will allow Delphi to emerge successfully from Chapter 11," Delphi spokesman Lindsey Williams said in a statement.

GM's sweeping production shutdown represents one of the deepest cutbacks by any of the major U.S. automakers during a four-year downturn that has driven the industry to the brink of collapse with sales near 30-year lows.

Analysts said GM's move would add to the financial stress on its key suppliers. Shares in key suppliers tumbled in response.

American Axle & Manufacturing Holdings Inc (AXL.N), which relies on GM for three quarters of its sales, closed down 21 percent on the New York Stock Exchange.

(Reporting by Ross Colvin and John Crawley in Washington, Jui Chakravorty Das in New York, David Bailey and Kevin Krolicki in Detroit; Editing Bernard Orr and Carol Bishopric)

Geithner to outline efforts to fix banking system

WASHINGTON – Treasury Secretary Timothy Geithner is expected to outline the Obama administration's efforts to clean up the U.S. banking system during meetings Friday with finance ministers from the Group of Seven nations, a department official said.

Getting banks to lend again, along with government stimulus spending, is critical to turning around the U.S. and global economies, the official said Thursday, speaking on condition of anonymity because he wasn't authorized to speak on the record.

His comments came the same day that Dominique Strauss-Kahn, managing director of the International Monetary Fund, urged the U.S. and Europe to do more to remove distressed assets from banks' balance sheets. World leaders pledged to take such steps during a summit in London April 2.

Postponing such steps, Strauss-Kahn said, would "postpone the recovery."

Finance officials from around the world are gathering in Washington for three days of discussions beginning Friday. The G-7 meetings will be followed by talks over dinner that night among the Group of 20 nations, which adds major emerging powers such as China, Russia, India and Brazil to the mix.

The Treasury official said an "important component" of the Obama administration's efforts is the "stress tests" that regulators have done on 19 of the nation's largest financial institutions.

The tests are intended to gauge how the banks would fare in a severe recession and determine which institutions need more capital. The additional money, if needed, would come from the private sector or the government. Officials are to release the methodology for the stress tests Friday and privately begin telling the institutions how they performed.

Meanwhile, Strauss-Kahn and Robert Zoellick, the head of the IMF's sister organization, pledged new resources to fight the worst global downturn since the Great Depression of the 1930s, while warning that the crisis is far from over.

"We still have long months of economic distress in front of us," Strauss-Kahn said.

The IMF's board agreed to double the borrowing limits for 78 of the poorest countries in an effort to meet the needs of developing nations harmed by the downturn.

Separately, Zoellick said the World Bank will provide $45 billion over the next three years to support road building and other infrastructure projects in poor nations. That's $15 billion more than it spent on infrastructure efforts in poor nations in the three years before the crisis.

The funds are designed to support job creation and "help jumpstart a recovery from the crisis," he said. He also said the U.S. and Europe should "reconsider old prerogatives" and allow developing countries a greater voice in management of the World Bank.

When the money is combined with increased efforts from an arm of the World Bank that supports private sector projects, the increased funding could total $55 billion, the World Bank said. The effort is designed to give developing countries the same type of stimuli rich nations are providing to create jobs in the face of massive layoffs caused by the recession.

The initiative follows a tripling in lending to $12 billion announced earlier this week to support health, education and other safety net programs in poor countries. The goal of both World Bank efforts is to ensure "we don't repeat the mistakes of the past," Zoellick said Thursday.

During previous financial crises in the 1980s and 1990s, governments in developing countries were forced to cut spending on infrastructure projects and social programs, he said.

"We saw social unrest, deprivation and even violence," Zoellick said. "Poor people suffered most from the mistakes of others."

Also on the agenda for Friday's G-7 and G-20 meetings will be fleshing out the promises made at a meeting of world leaders earlier this month in London.

Leaders from the G-20 nations pledged April 2 to boost support for the IMF, the World Bank and other international lending organizations by $1.1 trillion to combat the global recession. But the biggest chunk of that amount — $500 billion for an emergency lending facility at the IMF — is still short of the goal.

The U.S., Europe and Japan have committed roughly $100 billion each, and other countries have pledged much smaller amounts. Strauss-Kahn said he expects new pledges this weekend.

China had indicated in London that it would pledge $40 billion. Strauss-Kahn said he is meeting this weekend with Chinese officials to discuss the country's commitment.

That could be complicated since China and other big developing countries like India want to link their increased support to making progress on their long-sought goal for a bigger voice in the operations of institutions like the IMF. This proposal is being resisted by various European nations who would lose some of their current voting powers.

The debate also could hinder efforts to reach agreement on a proposal to sell part of the IMF's vast gold reserves to provide more support for the poorest countries and to expand an IMF currency known as special drawing rights, a move that could provide support to poor nations.

Strauss-Kahn said in a separate speech Thursday that the IMF's governance should be reformed to "give more influence to emerging markets and low-income countries."

The U.S. also will seek to keep the pressure on European countries to follow through on their promises to boost stimulus spending. U.S. officials will ask the IMF to report on each country's progress, the senior Treasury official said. European nations have resisted U.S. calls for more spending because of budget concerns.

Underscoring the extent of the challenges, the IMF released a new economic forecast Wednesday that projected that the world economy would shrink 1.3 percent this year, the first decline since World War II, and what the IMF called "by far the deepest global recession since the Great Depression."

Private economists said an output decline of that magnitude would leave at least 10 million more people jobless around the world.

___

Associated Press writers Martin Crutsinger, Deb Riechmann and Jeannine Aversa contributed to this report.

Chrysler's fate rests with debtors as clock ticks

NEW YORK – With a government deadline just seven days away, Chrysler LLC is running out of time to work out deals with debtholders, its unions and a foreign partner.

A life outside of bankruptcy appears to hinge on whether Chrysler and the U.S. government can get the company's lenders to forgive a large portion of the company's debt in exchange for stock. But both sides are far apart.

"I've said this is the equivalent of a 70-yard field goal," Michael Robinet, vice president of global vehicle forecasts at CSM Worldwide, said of Chrysler meeting all its obligations in the next seven days.

Analysts have said all other negotiations hang on that deal. However, The New York Times reported Thursday that the Treasury Department is preparing a Chapter 11 bankruptcy filing for Chrysler, under which the pensions and retiree health care benefits of the United Auto Workers union would be protected. The company would pursue a deal with Italian automaker Fiat SpA while under bankruptcy protection. The lender issue remains unresolved, according to the newspaper.

UAW representatives could not be reached for comment late Thursday.

Chrysler spokeswoman Shawn Morgan said in an e-mail that "it's important to keep all options open.

"Chrysler will continue to work through the end of the month, based on the direction given by the Presidential auto task force, to secure the support of the necessary stakeholders and reach a successful conclusion that the administration and U.S. Treasury deems appropriate," Morgan said.

Chrysler's secured lenders consist of large and small banks and hedge funds that have poured about $6.9 billion into the Auburn Hills, Mich., company. These lenders — about 45 — would be first in line to get paid if the company's assets were liquidated.

Chrysler has been living on $4 billion in government aid since the beginning of the year. The Obama administration has offered another $500 million in working capital to get through April 30, when it has said it would cut off aid.

Including the secured debt and government loans, Chrysler owes about $23.5 billion, including $10.6 billion to a union trust fund that will take over retiree health care costs starting next year. It also owes $1 billion each to its owners, Cerberus Capital Management LP and Daimler AG.

The company is negotiating with the UAW to take equity for part of the trust fund obligation, as well as other concessions.

In Canada, Chrysler was making progress in reaching a new labor agreement with the Canadian Auto Workers union. The country's economic development minister said a new deal could come as close as Thursday, according to the Canadian Press.

The Treasury and Chrysler's lenders spent the week lobbing proposals back and forth. Earlier this week, representatives of Chrysler's debtholders offered to forgive $2.5 billion of the $6.9 billion they are owed, according to people familiar with the discussion. In exchange, they offered to take a 40 percent equity stake in an alliance between Chrysler and Fiat SpA.

The creditors also wanted to be able to elect a board member to the alliance and asked for Fiat to put up $1 billion in cash.

The Treasury swiftly rejected the terms. On Tuesday, the government offered a 5 percent stake in the company in exchange for lenders forgiving a much larger $5.4 billion — or 78 percent — of Chrysler's debt.

Even if Chrysler gets a debtholder deal, CSM's Robinet points out the company faces four other "tremendous hurdles" to surmount: the tie-up with Fiat, a new deal with the UAW, proving the viability of Chrysler Financial and proving it won't need more government aid after the April 30 deadline.

One issue in the debtholder negotiations is whether Fiat will put any cash into the potential alliance. Chrysler's lenders want Fiat to kick in money, said a person familiar with the matter. The person declined to be named because the negotiations remain private.

Fiat, for its part, isn't budging. Chief Executive Sergio Marchionne said Thursday the company still has an "unwavering commitment" to a deal with Chrysler, but said it brings enough to the table, such as new technology, new small-vehicle platforms and new markets for Chrysler products. He added that raising cash in today's market is too difficult.

"I don't know why we would have to pay to get in," Marchionne told investors during a conference call from Turin, Italy. "We have spent a long time talking to people both in the Treasury and with Chrysler ... to explain the value of what we're bringing."

Michigan Sen. Debbie Stabenow on Thursday sent letters to Chrysler's lenders urging them to come to an equitable deal and keep Chrysler out of bankruptcy.

"Hundreds of thousands of American families are waiting anxiously as Chrysler approaches its deadline," Stabenow said.

Even with all the other obstacles, Robinet called the logjam between Chrysler and its lenders "a show-stopper."

He estimates that Chrysler has a roughly 65-percent chance of failing and winding up in bankruptcy proceedings of some sort.

Robinet said whatever happens, Chrysler is sure to be a very different company.

"Whatever emerges after some sort of restructuring ... will definitely not be the exact same company that went in, for sure," he said.

Obama pledges protections for credit-card users

WASHINGTON – President Barack Obama said Thursday he is determined to get a credit-card law that eliminates the tricky fine print, sudden rate increases and late fees that give millions of consumers headaches.

"I trust that those in the industry who want to act responsibly will engage with us in a constructive fashion, and that we're going to get this done in short order," Obama said, delivering a pointed message to leading executives of credit-card issuing companies after a closed-door White House meeting.

Both the House and the Senate are pursuing bills to give consumers greater protections as an expansion of new rules slated to take effect next year. Obama said his economic advisers will examine the various proposals and work with Congress and the industry, but he made clear he wants to sign a bill into law.

"The days of any time, any reason rate hikes and late fee traps have to end," Obama said.

At issue is how to protect consumers, particularly in a deep recession, while not imposing the kind of rules that could make it harder for banks to offer credit or put credit out of reach for many borrowers.

Industry executives left the White House without talking to reporters.

Later, one of the participants, American Bankers Association president Edward Yingling, said the executives listened to Obama's concerns and "agreed to work with the administration to address them." In a statement on behalf of the executives, he said consumer protection must be balanced with "ensuring that credit remains available to consumers and small businesses at a reasonable cost."

The credit-card executives made the case in the meeting that the sweeping rules already ordered by the Federal Reserve, due to take effect next year, address many of the concerns held by the president and Congress.

"He disagreed with that case and believed that more needed to happen," White House press secretary Robert Gibbs said of Obama.

So Obama outlined the principles for any legislation: Protections so that consumers won't face sudden, surprising jumps in fees; requirements that companies publish their forms in plainspoken language, with no more fine print; the availability of customer-friendly comparison shopping on credit-card offers; and greater enforcement so that violators feel the full weight of the law.

The president made no mention of the responsibility of consumers to keep themselves from getting overextended.

As one possibility, Obama said it may help if all credit-card issuers offer a basic, "plain-vanilla" card as a default option for consumers.

The president also acknowledged the importance of credit cards; almost 80 percent of U.S. households have one.

Credit cards often serve as a vital source of liquidity, both for individuals and small businesses.

Credit-card debt has increased by 25 percent in the past 10 years, reaching $963 billion by January, according to figures released by the White House. The average outstanding credit card debt for households that have a credit card was $10,679 at the end of 2008, according to CreditCard.com, an online marketplace designed to link consumers and card issuers.

The Federal Reserve has already ordered new rules, to take effect July 2010, that are designed to enforce a host of new consumer protections.

On Thursday, Sen. Chris Dodd, D-Conn., chairman of the Banking Committee, and another panel member, Sen. Chuck Schumer, D-N.Y., wrote a letter asking the Federal Reserve, the Office of Thrift Supervision and the National Credit Union Administration to enforce those rules immediately.

The effect would be put emergency freeze on interest rates tied to existing balances on credit cards. A Federal Reserve spokeswoman said the Fed received the letter and was considering the issues raised in it.

Portfolio Software Still A Hot Seller Despite Sinking Stock Market

It's not easy to navigate a business along a steady course when your customers have been rocked by severe turbulence.

But that's what Advent Software (NasdaqGS:ADVS - News)Chief Executive Stephanie DiMarco has done as the stormy economic climate has ravaged the financial services community.

Advent, a provider of software to investment managers, has enjoyed double-digit sales gains for nine quarters running. And it's turned out hefty profit growth in all but three of those quarters.

The company has been able to fare well during these tough times on Wall Street because its software products help customers increase operational efficiency, manage costs and reduce risks, says DiMarco, who founded the company in 1983.

Supports Each Step

Advent provides investment managers with the infrastructure software that supports each step of the investment process from portfolio management and accounting to processing and trade and order management. Advent has over 4,500 customers worldwide, including large investment banks and hedge funds as well as small mom-and-pop financial advisers. It licenses its software on a term basis, typically for three years.

And while these are challenging times for asset managers, Advent has been able to buck the trend.

DiMarco calls Advent's products "mission critical," not discretionary items.

"We're the last thing they unplug," she said. "And while parts of Advent's business are slow, given the current environment, other parts are compensating. We've been navigating this environment extremely well."

Solid demand for Advent's products comes as the Bernie Madoff scandal and the role of hedge funds in the current financial crisis are creating an increased need for regulation, says analyst Gil Luria of Wedbush Morgan Securities.

Hedge Fund Regulation

The Obama administration wants tighter regulation of hedge funds. It has proposed requiring larger hedge funds, as well as private equity and venture capital funds, to register with the Securities and Exchange Commission.

"Regulation will cause hedge funds to have the need to have very detailed accounting and reporting capabilities," said Luria, whose employer has an investment banking relationship with Advent. "The way to do this is to have robust portfolio accounting software."

And, since Advent is a leader in providing portfolio accounting software, it increases the need for its products, he says.

Meanwhile, the large hedge funds see regulation coming, which increases their willingness to start preparing for it, he adds.

But Advent has been enjoying steady growth the past couple of years.

"Their growth over the last few years has been based on the fact that both asset managers and hedge funds are trying to get their portfolio accounting to a higher functionality, and with more capability," said Luria. "And Advent is a winner within that segment."

DiMarco took an important step in growing Advent's offerings with October's acquisition of Tamale Software, a provider of research management software. Analysts and portfolio managers use Tamale's software to manage and access their research. Advent paid $28 million and 906,000 shares of its common stock for Tamale.

The buy expands and complements Advent's offerings.

Historically, a lot of Advent's systems have been used in the mid- and back offices of firms for applications such as portfolio accounting and trading, says DiMarco.

Tamale takes Advent into the front office, where the software is used by portfolio managers and analysts to automate their work flow.

"Advent can use Tamale as a Trojan horse to put more and more products on portfolio managers' desks," said Luria.

DiMarco sees Tamale as a platform for expansion.

"With Tamale, Advent is the only provider that offers clients a comprehensive work flow solution for total visibility across the firm's most important information -- from ideas to positions to performance," she said in a conference call.

Earnings Dilution

Luria says he expects the buy to be dilutive to earnings because it was negotiated before the financial crisis occurred.

"But long term, it creates a lot of strategic opportunities," he said.

Meanwhile, Advent turned out a strong fourth quarter. Earnings climbed 64% to 23 cents a share. Revenue rose 25% to $74.4 million.

"In this kind of market, when people are very concerned about risk and stability, there's a flight to quality that occurs," said DiMarco. "We benefit from that. We've been in business for 25 years, we're a public company, and people see we have strong profitability and cash flow. Our customers don't want to take a risk on their vendor."

But Advent faces challenges during these lean times on Wall Street. It may lose customers or have a tough time adding new ones, says Luria.

Still, followers expect it to continue its winning streak. Analysts polled by Thomson Reuters expect 2009 earnings to surge 56% to $1.06 a share, then 21% to $1.28 in 2010.

Global recession worst since Depression, IMF says

WASHINGTON – The global economy is expected to lurch into reverse this year for the first time since World War II with appalling consequences for nations large and small — trillions of dollars in lost business, millions of people thrust into hunger and homelessness and crime on the rise.

And the pain won't stop this year, the International Monetary Fund declared Wednesday, for what it said was "by far the deepest global recession since the Great Depression." To cushion the blow and head off further damage next year, the IMF is calling for more stimulus projects from the word's governments, including major spending for public works projects.

Even with many countries taking bold steps to turn things around, the global economy will shrink 1.3 percent this year, the IMF predicted in its dour forecast.

"We can be fairly confident that in 2010 or even 2011, economies will not be back to normal," said IMF chief economist Olivier Blanchard. "Which means that governments should today basically think at least about contingent plans for infrastructure spending. ... Next year will be too late."

In the U.S., President Barack Obama's $787 billion stimulus includes money for fixing roads and bridges and other infrastructure projects. IMF officials said there's room for Germany and other countries to do more in terms of fiscal stimulus, and the United States, too, has prodded the Europeans to ramp up efforts.

Without the help of countries' stimulative fiscal policies — such as tax reductions or increased government spending — the blow to the global economy would be even worse, Blanchard said: "We would be in the middle of something very close to a depression."

Even the projected 1.3 percent drop could leave at least 10 million more people around the world jobless, some private analysts said.

Allen Sinai, chief global economist at Decision Economics, thinks the global decline will be worse — closer to 2 percent, which would mean 15 million to 25 million more people out of work.

"The global downturn guarantees that countries all over the world will be hit with extraordinarily high unemployment rates," Sinai said. "And, with the tremendous number of unemployed people comes the possibility of political unrest."

Also rising crime as millions more are forced into poverty and out of their homes, he and others said.

"By any measure," the downturn is the deepest since the Great Depression of the 1930s, the IMF said in its latest World Economic Outlook. "All corners of the globe are being affected."

All told, lost output worldwide could reach as high as $4 trillion this year alone, U.S. Treasury Secretary Timothy Geithner estimated in a speech Wednesday.

"The world economy is going through the most severe crisis in generations," he said. "We each face somewhat different challenges and thus are not all in the same boat. But we are all in the same storm."

Geithner did not mention any further commitments the U.S. might seek on Friday at meetings with other economic powers or during weekend meetings of the IMF and the World Bank in Washington. Analysts say those discussions are unlikely to produce any further major proposals.

Obama this week sent Congress a request for a tenfold increase in U.S. commitments to an emergency IMF loan fund, to $100 billion. That would represent the U.S. share of a $500 billion goal for the program. The European Union, China and Japan also have made pledges, but more donors will be needed to reach the goal.

The IMF's outlook for the U.S. is even bleaker than for the world as a whole: It predicts the American economy will shrink 2.8 percent this year, the biggest decline since 1946.

That's generally in line with the predictions of many U.S. analysts, who expect a figure in the range of 2.5 percent to 3 percent.

Besides trillions in lost business, a sinking world economy means far fewer trade opportunities for individual countries.

"This looks like the most synchronized recession in world history: We are all going down together," said David Wyss, chief economist of Standard and Poor's.

"In a lot of previous recessions, smaller countries can use exports to pull out of the recession. But you can't do that this time because nobody is buying," he said.

To get out of this global downturn, the United States — the world's largest economy — will need to lead the way, many analysts said.

Global powerhouse China is a big lever for restoring growth in Asia. But Sinai said, "For the world economy to recover, you need the U.S. to recover."

The notion of "decoupling" — that the world economy was becoming less dependent on the United States for growth or better insulated from U.S. economic troubles — has been dealt a setback by the current recession.

The financial crisis erupted in the United States in August 2007 and spread around the globe. It entered a tumultuous new phase last fall, shaking confidence in global financial institutions and markets. Total worldwide losses from the financial crisis from 2007 to 2010 could reach nearly $4.1 trillion, the IMF estimated in a separate report Tuesday.

Among the major industrialized nations studied for Wednesday's report, Japan is expected to suffer the sharpest contraction this year: 6.2 percent. Russia's economy would shrink 6 percent, Germany 5.6 percent and Britain 4.1 percent. Mexico's economic activity would contract 3.7 percent and Canada's 2.5 percent.

Still growing, China is expected to see its expansion slow to 6.5 percent this year. India's growth is likely to slow to 4.5 percent.

The jobless rate in the United States is expected to average 8.9 percent this year and climb to 10.1 percent next year, the IMF said.

Next year, the IMF predicts the world economy will grow again — but just 1.9 percent. It said this would be consistent with its findings that economic recoveries after financial crises "are significantly slower" than ordinary recoveries typically are.

In 2010, the IMF predicts the U.S. economy will be flat, neither shrinking nor growing. Germany's and Britain's economies, meanwhile, will shrink by 1 percent and 0.4 percent respectively.

Other countries, such as Japan, Russia, Canada and Mexico, are projected to grow again. And China and India should pick up speed.

Asia could see 'modest recovery' in 2010

Asian economies could see a modest recovery next year, boosted by stronger export demand and stimulus spending, the International Monetary Fund said Wednesday.

Trade-driven Asia has been hit harder than expected by the worst global downturn since the 1930s, though many economies are stronger than they were during the region's 1997 financial crisis, the Washington-based IMF said in a report.

"A modest recovery is projected in 2010, underpinned by a pickup in global growth and a boost from expansionary fiscal and monetary policies," it said.

Japan, the region's economic giant, should eke out 0.5 percent growth in 2010 after shrinking by 6.2 percent this year, according to the IMF. It said South Korea, Taiwan and other newly industrialized economies were forecast to grow by 0.8 percent following a 5.6 percent contraction this year.

Growth for China, India and other emerging economies is forecast to rise to 5.3 percent after falling to 3.3 percent this year, the IMF said. The 185-nation group advises governments on development and provides loans for balance of payments problems.

But the IMF also cautioned that Asian economies face risks if global demand weakens further and said they can do more to reduce reliance on exports by boosting domestic consumption.

"A key concern is that a deeper or longer recession in advanced economies outside Asia will reduce external demand even further, with negative repercussions for exports, investment and growth," it said.

The main challenge will be to "achieve a sustained reduction in the region's reliance on exports as a source of growth," the IMF said. Though China, Japan and others have launched stimulus plans, it said, "there is scope to do more to bolster domestic demand in a number of economies" that can afford it.

Asia had been expected to suffer less from the global crisis due to its strong banks and lack of exposure to U.S. mortgage debt that hurt Western institutions, but was hit hard by the collapse of trade, the IMF said.

China has shown signs of recovery, with March factory output and auto sales improving, helped by Beijing's 4 trillion yuan ($586 billion) stimulus. But economists warn any rebound could be hurt if trade declines further.

China's growth is forecast to rise to 7.5 percent in 2010 after falling to 6.5 percent this year — half of 2007's 13 percent rate. India's growth is expected to climb to 5.6 percent next year after dropping from 7.3 percent in 2008 to 4.5 percent this year.

In Asia's worst contraction, Singapore's trade-dependent economy is expected to shrink by 10 percent this year and by another 0.1 percent next year, according to the IMF.

Governments have to be ready to use public money to strengthen struggling banks and to spot problems before they infect healthy institutions, the agency said.

It noted that countries including India, Indonesia, China and Japan have tried to shore up financial stability by extending corporate credit, expanding bank deposit guarantees and other measures.

"However, the authorities should be prepared to do more if necessary."

MySpace co-founder DeWolfe to step down

MySpace co-founder Chris DeWolfe will step down soon as the social networking site's chief executive, amid the site's stalled user growth and the rapid rise of rival Facebook.

MySpace owner News Corp. said Wednesday the decision was made by mutual agreement with former AOL Chief Executive Jonathan Miller, who was appointed News Corp.'s chief digital officer April 1.

DeWolfe, 43, helped launch the site in January 2004. He will remain on the board of MySpace China and be a strategic adviser to the company.

Co-founder Tom Anderson, 33, who is every account holder's first friend and acts as its glitch fixer and president, is also in talks about taking a new role. Anderson is being considered for a creative product role that will take him away from his day-to-day responsibilities, said a person with knowledge of the situation.

The person spoke on condition of anonymity because the discussion was confidential.

"Chris and Tom are true pioneers," Miller said in a statement. "Thanks largely to their vision, MySpace has become a vibrant creative community with 130 million passionate followers worldwide."

He said a new management structure will be announced soon.

Wednesday's announcement was apparently rushed out after rumors began circulating online.

Facebook lapped MySpace a year ago in overall users worldwide, and now has 200 million to MySpace's 130 million.

MySpace is still the largest social network in the United States, but membership appears to have stagnated. It had 70 million users in March, down 4 percent from a year ago, according to tracking firm comScore Inc., despite the launch of the MySpace Music service in September.

Meanwhile, Facebook's users in the U.S. rose 72 percent in March to 61 million.

DeWolfe is expected to move onto a new startup, following the path of several executives who left MySpace last month including former Chief Operating Officer Amit Kapur.

"It's been one of the best experiences of my life," DeWolfe said in a statement.

Anderson said in a statement he looks forward to working with Miller. "I love this business, and look forward to its next chapter."

Both men had contracts worth $15 million over two years, according to the person familiar with the situation. DeWolfe's contract, which he will not renew, is to expire in October.

The pair helped grow the company from seven employees to 1,600 today, launched operations in 30 locations worldwide, and proved social networks could attract advertising and be profitable. But they never managed to meet the lofty goals set by News Corp., the media conglomerate controlled by billionaire Rupert Murdoch that bought the site for $580 million in 2005.

Murdoch predicted in August 2007 that Fox Interactive Media — which houses sites such as MySpace, AskMen and Photobucket — would exceed $1 billion in annual revenue. So far, it has come up short, taking in $881 million in the year ended in December.

MySpace's U.S. ad revenue made up the bulk of that, with $585 million in 2008, according to an estimate by research firm eMarketer. The firm said that was nearly three times the estimated $210 million in U.S. ad revenue taken in by Facebook. Neither company divulges such numbers officially.

A substantial amount of MySpace's revenue comes from a $900 million, three-year ad-sharing deal it began with Internet search leader Google Inc. in 2007. That deal expires in August 2010, although the company may move again to auction off its search partnership to the highest bidder.

"That's going to dry up and, as you can see, their (profit) margins are pretty thin," said Julia Angwin, author of "Stealing MySpace," which went on sale last month.

"They have to continue innovating. And they haven't done enough of that," she said. "They've focused a lot on the content, but not enough on the tools and features, which are really stale and need to be upgraded."

Treasury makes offer to Chrysler lenders

LOS ANGELES – The Treasury Department lobbed back a new offer to Chrysler LLC's lenders, proposing that banks and hedge funds which hold $6.9 billion in debt forgive $5.4 billion in exchange for a 5 percent stake in a Chrysler-Fiat alliance, media reports said late Wednesday.

The new offer represents payment of 22 percent of the debt lenders are owed, according to a report by The Wall Street Journal. That would be up from a previously rejected government offer of 15 percent payment and no stock.

However, the new proposal is still far less than the 40 percent stake and $4.5 billion payment — representing 65 percent of what they are owed — sought by the automaker's lenders.

Chrysler is living on $4 billion in federal loans and could get another $500 million to survive through April, but without massive restructuring and a Fiat deal, Chrysler won't get any more aid, government officials have said.

The Treasury's negotiations with lenders come as Chrysler races to meet a government-imposed April 30 deadline to swap debt for equity, cut labor costs and negotiate an alliance with Italy's Fiat Group SpA. If it misses the deadline, government aid will end and Chrysler likely faces liquidation.

The Treasury Department and a spokesperson for the lenders didn't immediately return messages seeking comment late Wednesday.

The equity stake would go to first-lien lenders including Citigroup Inc., JPMorgan Chase & Co., Goldman Sachs Group Inc., Morgan Stanley and several smaller banks, plus some hedge funds. Chrysler has about 45 first-lien lenders who would be first in line to get money if the company's assets were liquidated.

Including the secured debt and government loans, Chrysler owes about $23.5 billion, including $10.6 billion to a United Auto Workers trust fund that will take over retiree health care costs starting next year. It also owes $1 billion each to its owners, Cerberus Capital Management LP and Daimler AG.

The company is negotiating with the UAW to take equity for part of the trust fund obligation, as well as other concessions. But bankruptcy experts have said secured debtholders won't likely settle for pennies on the dollar because their loans are secured by Chrysler's physical assets and because they likely purchased credit default insurance that would repay them if Chrysler defaults.

GM to shut most US plants up to 9 weeks

DETROIT – General Motors Corp. is planning to temporarily close most of its U.S. factories for up to nine weeks this summer because of slumping sales and growing inventories of unsold vehicles, three people briefed on the plan said Wednesday. Analysts say the company could be seeing sales decline because of talk about a potential bankruptcy.

The exact dates of the closures are not known, but the people said they will occur around the normal two-week shutdown in July when changes are made from one model year to the next. None of the people wanted to be identified because workers have not yet been told of the shutdowns.

GM spokesman Chris Lee would not comment other than to say the company notifies employees before making any production cuts public.

One of the people briefed on the plan said details are still being worked out. Some of the closings could be staggered between mid-May and the end of July, but the exact number of plants to be idled has not yet been determined.

Another person said a few plants that make more popular models could remain open for part of the shutdown period, but at reduced assembly line speeds.

Thousands of workers could be laid off but would still get most of their pay because their United Auto Workers union contract requires the company to make up much of the difference between state unemployment benefits and their wages. UAW officials at several factories said they have meetings scheduled Thursday and Friday with plant managers and GM human resource officials to discuss production changes.

The shutdown could be catastrophic to many auto parts suppliers that already are near bankruptcy due to previous production cuts. During the shutdown, suppliers couldn't ship parts to GM and would lose critical revenue.

"It's one of those things we've been dreading for a long time," said Jim Gillette, director of financial services at auto-industry consultant CSM Worldwide in Grand Rapids. "It's as bad as its ever been."

He said that many suppliers are making employee cuts or forcing workers to take furloughs to reduce operating expenditures.

GM is living on $13.4 billion in government loans and faces a June 1 deadline to cut its debt, reduce labor costs and take other restructuring steps. If it doesn't meet the deadline, the company's CEO has said it will enter Chapter 11 bankruptcy protection.

The Treasury Department declined to comment on any effect the plant shutdowns might have on GM's restructuring plans.

Separately Wednesday, GM announced that it may miss a $1 billion bond payment also due June 1 if its debt-for-equity exchange is still in progress by then. GM also could go into bankruptcy protection, which could make the company miss the payment as well.

The company plans to make the exchange offer soon to bondholders, perhaps as early as next week. GM has $28 billion in unsecured bond debt and is under government pressure to reduce that to solidify its balance sheet.

GM's sales were down 49 percent in the first quarter compared with the same period last year, and GM had a 123-day supply of cars and trucks at the end of March, according to Ward's AutoInfoBank. That's down from 162 days worth in January.

But as of March 31, the automaker had a more than six-month supply of several models including the Pontiac G5 compact and Chevrolet Silverado hybrid pickup truck. The lengthy shutdown likely means that GM doesn't see its sales rebounding anytime soon, said Tom Libby, an independent Detroit-area auto industry analyst.

"They must be forecasting a sales level that is low enough between now and the summer that they see their inventories building," he said. "It's sort of an ominous comment on what they see for the industry."

Libby also suggested that the company's sales may be declining because customers are concerned about the automaker possibly filing for bankruptcy protection.

GM CEO Fritz Henderson has said the company would prefer to restructure outside of court, but it is preparing for a prearranged bankruptcy as well as one in which good assets would be separated from underperforming ones.

"Just using the word bankruptcy, their (market) share is down a lot just because of this talk," Libby said. "They may be counting on a further decline."

The plant closures add to the onslaught of bad news coming out of GM, said John Clark, president of Avenue Chevrolet, a dealership in Batavia, Ill., near Chicago.

"Henderson making statements about bankruptcy sure doesn't help his cause, and all of the sudden we have this," he said. "I've been getting calls from customers about warranties. I can't see this as a positive move."

The government has said it would guarantee GM and Chrysler warranties as the companies restructure.

Libby did say GM should be applauded for not building too many vehicles and then having to spend big on rebates and other incentives to move them, something the Detroit Three have been guilty of in the past.

Other GM dealers said a shutdown of up to nine weeks is jarring, but not unexpected given the sales slump.

"Nine weeks seems like an awful long time, but the way business is, not an awful lot of cars are being sold anyway," said George Tasker, fleet manager at Martin Chevrolet in Torrance, Calif.

Tasker said the move wouldn't affect business, as dealers would "get together and trade more easily" to find the exact car a customer wanted.

Nearly all automakers with U.S. factories have closed plants or cut production to deal with the auto sales slump. Earlier this year, GM temporarily closed 20 factories across North America due to weak sales, some for the entire month of January. Chrysler LLC, also subsisting on government loans, closed all 30 of its manufacturing plants for a month in January to counter the auto sales downturn.

Ford Motor Co. also shut down 10 North American assembly plants for an extra week in January, and both Toyota Motor Corp. and Honda Motor Co. have cut production.

Software giant Oracle buys Java whiz Sun

WASHINGTON (AFP) — Business software giant Oracle announced Monday it was buying Sun Microsystems and its Java programming language for 7.4 billion dollars after IBM abandoned its bid for the struggling tech company.

The deal amounted to 9.50 dollars per share for one-time Silicon Valley star Sun, or 5.6 billion dollars, and rose to 7.4 billion dollars including Sun's debt and cash.

Oracle described the ubiquitous Java language as "the most important software Oracle has ever acquired" and noted that its fastest growing business, Oracle Fusion Middleware, is based on Java.

Another Sun product, the Sun Solaris operating system, is the main platform for the Oracle database Redwood Shores, California-based Oracle's largest business.

The purchase of Sun also gives Oracle a foothold in the hardware arena. Sun is the fourth-largest maker of computer servers but has been steadily losing market share to failed suitor IBM, as well as Hewlett-Packard and Dell.

Sun's share price soared on Wall Street on news of the purchase, gaining 36.77 percent to close at 9.15 dollars. Oracle's share price was down 1.26 percent at 18.82 dollars.

"The acquisition of Sun transforms the IT industry, combining best-in-class enterprise software and mission-critical computing systems," Oracle's chief executive Larry Ellison said in a statement.

"Oracle will be the only company that can engineer an integrated system -- applications to disk -- where all the pieces fit and work together so customers do not have to do it themselves.

"Our customers benefit as their systems integration costs go down while system performance, reliability and security go up," Ellison added.

Oracle said it expected the purchase of Sun to add 1.5 billion dollars to its operating profit in the first year and more than two billion dollars in its second year.

Scott McNealy, chairman of Santa Clara, California-based Sun, which employs more than 33,500 people worldwide, hailed the merger as "an industry-defining event."

Sun's board of directors unanimously approved the deal, which is expected to close this year pending approval from stockholders and federal regulators.

Gartner analyst Andrew Butler said the purchase "gives Sun a lifeline they desperately needed" and was "much more about software than hardware."

"The hardware component is less obvious," Butler said. "I don't think that Oracle will kill the hardware, but I'm not sure they'll keep all the hardware they're inheriting."

"IBM will try to shrug it off," he added. "But now they must be looking at their strategy."

Butler said the Oracle purchase of Sun was less likely to receive attention from US anti-trust regulators, which had been one of the concerns surrounding IBM's bid to take over the company.

Amitabh Goel, a securities analyst at First Global, said he was "not very positive on the acquisition, as it remains to be seen how Oracle will run a hardware company, with Sun's market share on a declining trend."

But the purchase was "in line with Oracle's goal to gain share in the data centre market and offer more integrated end to-end products," he added.

"With the acquisition, Oracle will now be able to offer an integrated stack of hardware, software, and services to its customers."

Donors pledge $5 billion to stabilize Pakistan

TOKYO – International donors, led by the United States and Japan, pledged more than $5 billion Friday to stabilize Pakistan's troubled economy and fight the spread of terrorism in the Islamic nation and neighboring Afghanistan.

The U.S. and Japan started off the one-day conference by pledging $1 billion each. Saudi Arabia added $700 million and the EU $640 million. The total pledged was $5.28 billion, according to Pakistan's foreign minister.

"There is a desire to help Pakistan," Pakistani President Asif Ali Zardari said, but he added that the international community is still trying to grasp the implications of the problems his country faces.

"I still fear that the understanding of the danger that Pakistan faces still does not register fully in the minds of the world," he said. "If we lose, you lose. If we lose, the world loses."

The donors said their contributions would be focused on improving the economic climate in Pakistan through infrastructure and other projects, and stressed that stability in Pakistan is key to averting the growth of terrorism throughout the region.

The total fell short of Zardari's hope of as much as $6 billion in pledges. The conference's Japanese hosts had said they expected a figure closer to $4 billion.

"We have demonstrated our clear determination to face the issues," said Japanese Foreign Minister Hirofumi Nakasone.

Both Japan and the U.S. will make their contributions over the next two years, and neither represented a dramatic change in their current pattern of donations. Saudi Arabia's pledge would also be disbursed over the next two years, and the EU's over the next four years.

The U.S. said in a statement it would contribute $1 billion as a "down payment" on aid it has already announced.

Pakistan Foreign Minister Shah Mehmood Qureshi called the conference a success.

"I am more than satisfied with the successful conclusion of today's conference," he said. "In fact, I am delighted."

Though focused on Pakistan, the conference also discussed related issues in neighboring Afghanistan.

"Without stability in Pakistan, there is no stability in Afghanistan," Japanese Prime Minister Taro Aso said in a speech opening the conference. "Stability in border areas is a key and I want to stress that the international community supports comprehensive strategies by the two nations."

The conference, supported by the World Bank, was attended by 31 countries and 18 international organizations.

Japan provided Pakistan with 48 billion yen ($480 million) in development assistance in 2008.

The U.S. contribution will go toward Washington's previously announced plans to give Pakistan $1.5 billion in aid each year for the next five years. Separately, a $7.6 billion bailout has been granted by the International Monetary Fund to avert the country's most recent balance-of-payments crisis.

As part of the IMF deal, Pakistan has been asked to reduce its fiscal deficit and to tighten its monetary policy.

Pakistan's leaders have said they do not want the international community to "micromanage" its economy, but the central bank forecast this month that economic growth for the year through June will slump to between 2.5 percent and 3.5 percent, far below the 5.5 percent the government has projected — and too low to create enough jobs for its fast-growing population of about 170 million people.

In response, the government has had to slash its development budget but is resisting calls to tax the narrow landowning elite that dominates its politics. Industry is also hampered by severe power shortages that are not expected to ease until next year at the earliest.

Sharpen Your Career

In today's economy, it can feel as if there are few jobs to be had, much less ones with six-figure salaries attached. However, there are careers to be found in a range of fields that can boost your earning power. What's more, you can achieve a high income without a doctorate or a law degree.

Of course, achieving a six-figure salary will always require hard work and motivation. There are no free rides or successful get-rich-quick schemes. Sometimes continuing your education is the best way to prepare for a new career.
Below are some steps that may help you take your current salary to new heights.

Consider the benefits of online education.
Online training programs offer an alternative to traditional in-classroom education that can be very appealing for working students. Pursuing an online degree, whether it's a bachelor's, associate's, or higher, allows you to study from home, at your own pace, so you can keep your current job while training for a better one.

Scenario 1: Earn a two-year associate's degree.
Believe it or not, there are some high-paying careers out there that you can prepare for with about two years of study. For example, court reporters are known to pull in six-figure salaries, and often train for their careers with just one year to 33 months of study. If you're surprised to see this career on the list, consider that court reporters often take on freelance work in addition to their regular hours to significantly boost their incomes. While the average salary for a court reporter technically weighs in at about $48,000, many use freelance opportunities to top the $100,000 mark.

Scenario 2: See where a bachelor's degree can take you.
Train for a career in fine arts, finance, or technology, and find high-paying careers in each area. Art directors average about $83,000 annually, with the top 25 percent earning over $100,000 per year. Many art directors hold a bachelor's degree in fine arts. Some begin their careers as graphic artists in advertising, publishing, design, or film, and work their way up to the position of art director while proving themselves through experience and hard work.

In the financial sector, actuaries pull in hefty salaries assessing risks and their financial impacts while often working for insurance companies. The mean annual salary for an actuary is $95,420. A bachelor's degree in mathematics, statistics, actuarial science, or business should offer solid footing for you to embark upon this career path.

If your interests lie in technology and IT, consider becoming a Web systems manager. The mean annual salary for this career is $113,880, according to the Bureau of Labor Statistics. The top 25 percent can earn over $136,000 per year. A bachelor's degree is a common requirement for IT managers, along with a strong knowledge of computers and management practices. A degree in management information systems may be especially helpful.

Scenario 3: Looking beyond a bachelor's -- let education take you higher.
If you already hold a bachelor's degree and are looking to advance within your current field, consider the options that might be possible with a master's degree.

Becoming an educational administrator can be a great option for teachers looking to advance their careers with a two-year master's degree. In most cases, a master's in educational administration or educational leadership is required, as well as related experience in teaching or school administration.

A high school principal might expect to earn around $92,000 annually, according to the BLS, while a chief academic officer can earn over $140,000 per year.

Look into further career training.
Research your potential new career, what further experience you might need, and how to get it. In today's fast-paced job market, current job skills are essential, especially if your career involves using computers or technology in any way. Many professionals remain at the top of their careers with short educational stints or extra certifications in their fields.

Do what makes you happy -- the money will follow.
You've heard it from everyone from your mom to Oprah: Do what makes you truly happy, and the financial side of things will fall into place. While it may be difficult to swallow this notion when you're about to leap into a career change, you will likely be happy you did, especially if you follow these guidelines.