Gloria Manuel. Abdon Johnson. Grenville Fernandes. Veronica Fitzgerald…I’m leafing through the tacky yearbook of my undergraduate class of 1987 at my alma mater: St Joseph’s College of Commerce, Bangalore. I estimate nearly half the class is now Aussie, settled into suburban lives in the far suburbs of Melbourne, the city where Indian students are being attacked.
I am as horrified at the vicious attacks, now on our television screens and in our consciousness. This is happening in Australia? Down Under? The land of Andrew Symonds and Brett Lee, those beer-swilling, cheerful larrikins who play hard but fair? Unfortunately, as this paper first pointed out, Indians have gradually become easy targets for young toughs: At least 60 attacks had been reported till March, before last week’s round of violence.
This, I believe, is the reason. After enjoying one of the biggest booms in its history — starting in the late 1990s — Australia is facing hard, unprecedented times:
l The economy has been contracting since late last year and its central bank predicts it will keep shrinking till the middle of next year.
l An unprecedented drought, the worst in a century, has dried Australia’s sparse rivers and brought thousands of farmers to their knees.
l Nervous of China’s rise (ironically, its biggest trading partner), Australia now plans an unprecedented military build-up over the next 20 years.
l And on city streets, some of its rowdy — but formerly always cheerful — larrikins are draping themselves in the flag and evolving an ugly nationalism reminiscent of Mumbai’s Shiv Sena.
Hate was never a factor for my classmates. Many were a part of the great Anglo-Indian migration to their promised land. Some went for economic reasons. Others went because they felt it was part of their destiny as Indians who were a part of a Western blood legacy. All went to find a better life, and Australia welcomed them.
The Indian economic boom was a blip in the 1990s, and for many of my classmates, it was a time of uncertainty.
As the sun set over the British empire, their grandfathers worked in the railways or the defence forces; many were sportsmen. Those opportunities and privileges fell away for their fathers, some of whom looked towards the oil-rich Arabian states.
My classmates struggled. They were secretaries, clerks, accountants, restaurant managers. They lived in Bangalore’s leafy inner suburbs, or “towns”: Benson town, McIver town, Tasker town, Frazer town. Most lived in tiny but independent homes, their simple, cosy living rooms adorned with extracts from the bible, colourful bless-our-home signs, a cross - and photos of family who had migrated to Australia.
They were cheerful and party happy; everyone knew to jive and do the birdie dance.
No one knew the local language, Kannada — save for some street lingo — but they all managed just fine with Tamil.
No one officially tracked the Anglo-Indian exodus to Australia. But many families, at the back of their minds, quietly prepared for migration.
Last year, I was in Melbourne, visiting one of my closest friends and classmate, Roger Christopher Galway. He told me how he had given his children names - Sean and Jeanette — that would be easy to pronounce in foreign lands, if he ever migrated.
Roger’s story illustrates how thousands of Indians became a part of Aussie society, integrated comfortably into local communities. These are the Indians whose stories you will never hear in the growing hysteria over the attacks on Indian students.
Roger was an impish, cheerful cricketer who nearly made it to the Karnataka Ranji team. His left arm spin was vicious, and on a good day he was unplayable. But, as he said ruefully, he wasn’t ever going to make it as a cricketer.
Roger had — and has — a sharp mind. He taught me the little I managed to grasp of advanced accountancy. But, like many in his community, he joined the Railways (Roger Railway, we joked) on a sports quota. Officially, he was a clerk of some description, roaming the south on his railway pass, playing cricket and dashing around town in his Lambretta. I was unemployed then and thought he led quite a grand life.
As you can tell, we weren’t exactly Indian achievers and St Joseph’s Commerce was no St Stephen’s.
Today, Roger is a true-blue Aussie, living in a three-bedroom, park-facing house with a family van, a car, and yes, that national symbol, a barbie (barbeque). He is a team leader at an Aussie telecom company, but presently on sabbatical, during which he’s also become a realtor. He says about half the kids at the local school are now Indians, many who knew each other back in Bangalore.
Most of their parents were sponsored by brothers, uncles, aunts or cousins already Down Under. This chain was endless, emptying entire lanes in Bangalore. When sons and daughters finally made it to that home and car in the Melbourne suburbs, they sponsored their parents.
Sunday, May 31, 2009
Deep brain stimulation: Expanding its reach to new patients
Under the skin, a battery is surgically implanted -- generally within the upper chest. From the battery, wires snake up to the head, to tickle different targets deep inside the brain.
Such is the hardware for deep brain stimulation -- the equivalent of a cardiac pacemaker for the mind.
Until recently, deep brain stimulation was approved in the U.S. only to treat certain movement disorders, primarily those of Parkinson's disease, for which it diminishes tremors and rigidity and improves mobility. To date, more than 60,000 patients worldwide have had the devices implanted.
But now use of the technique seems set to mushroom.
This year, the Food and Drug Administration granted a so-called humanitarian device exemption for the treatment to be used in severe cases of obsessive-compulsive disorder -- the first approval of deep brain stimulation therapy for any psychiatric condition.
Large clinical trials are also in the works for use of deep brain stimulation for epilepsy and depression, and experimental studies in the U.S. and elsewhere -- still in their early stages -- are exploring the treatment for obesity, traumatic brain injury, severe chronic pain, Alzheimer's disease, anorexia, tinnitus and addiction.
There are discussions too on the possible use of deep brain stimulation to treat hypertension.
"The field is taking off," says Dr. Ali Rezai, director of functional neurosurgery at the Cleveland Clinic, who has been involved in research on movement disorders, traumatic brain injury, obsessive-compulsive disorder and severe depression, among others.
Some researchers warn, however, that with all this activity -- pushed in part by the industry that makes the brain-stimulation devices -- the field may be moving too fast.
"There is so much progress that's been made and so much potential -- you would hate to lose that potential," says Dr. Joseph Fins, chief of the division of medical ethics and a professor at Weill Cornell Medical College in New York.
Here's a look at deep brain stimulation as it moves beyond Parkinson's disease. (See the related story about reservations scientists have about the growth of the field, and go online at latimes.com/health for a look at less-explored applications such as traumatic brain injury and obesity.)
Obsessive- compulsive disorder
In studies with a total of 26 patients with severe obsessive-compulsive disorder, 60% of those whose device was turned on demonstrated "very much improved" symptoms after months of deep brain stimulation as measured by interviews and questionnaires, says Dr. Benjamin Greenberg, an associate professor at Brown University Medical School and Butler Hospital in Providence, R.I., who was one of the study researchers.
The patients had previously failed on medicines as well as behavioral cognitive therapy.
Yet the data, published last year in Molecular Psychiatry, can't really nail the effect of the treatment, Greenberg says, because the patients for the most part knew whether their devices were turned on or off. Thus, researchers can't rule out that some of the observed improvements were due to a placebo effect.
Patients were stimulated in an area called ventral capsule/ventral striatum, chosen, in part, because removal of nerve fibers in that area is known to cause improvement in obsessive-compulsive symptoms.
Based largely on these findings, the FDA recently granted a limited humanitarian device exemption that permits the device to be used in as many as 4,000 of the country's most severe cases of obsessive compulsive disorder per year.
To get this kind of exemption, Medtronic -- makers of the only deep brain stimulation device that is FDA-approved -- needed only to show its safety and probable benefit.
Greenberg is now doing a randomized, double-blinded trial with 30 patients, some of whom have devices turned on right away and some who have them turned on after a delay. No one will know whose device is turned on for the first several months of the trial.
Medtronic has conducted a large-scale randomized trial for deep brain stimulation on epilepsy. Data will be submitted to the FDA this year, says Paul Stypulkowski, senior director of therapy research of Medtronic.
The device was turned on, for three months, in half of the 110 volunteers, stimulating -- and thereby, paradoxically, inhibiting-- an area called the anterior nucleus of the thalamus. That area is believed to influence a circuit involved in seizures.
The data, presented in December at a meeting in Seattle, show that deep brain stimulation reduced the number of seizures by 38% compared with what was seen before implanting the device.
That is slightly better than improvement seen with vagus nerve stimulation, another FDA-approved electrical stimulation treatment, which reduces seizures by about 25%.
The control group whose device was kept turned off, also improved, by 14.5%. That could be due to a placebo effect. Or it might be because people who join trials are usually at their worst -- and often tend to improve somewhat on their own, says trial researcher Dr. Douglas Labar, of the Weill Cornell Medical College in New York.
If deep brain stimulation is approved, Labar says, patients will have the choice between a more efficient but also more risky treatment and the slightly less efficient but also less risky vagus nerve stimulation.
Depression
Medtronic and a second company, St. Paul, Minn.-based St. Jude Medical, have two large-scale randomized trials underway for severe, treatment-resistant depression. (St. Jude Medical recently received approval to sell its device for the treatment of Parkinson's disease in Europe and is now completing studies aimed at securing FDA approval for treating Parkinson's and another movement disorder in the U.S.)
Medtronic's depression trial will follow about 200 patients stimulated in an area called the anterior limb of the internal capsule for at least one year.
This brain target for depression was identified by accident: When obsessive-compulsive disorder patients who also had depression were stimulated in this area, their depression also improved.
In one case, a patient produced a one-sided smile when stimulated on one side of the brain and also expressed feelings of happiness, says study researcher Dr. Wayne Goodman of the National Institute of Mental Health.
In a recently published unblinded study, about half of 15 patients showed at least a 50% improvement in severe depression symptoms a year or more after surgery when the anterior limb of the internal capsule was stimulated, says Rezai, who was involved in the study.
St. Jude Medical chose a different brain target, area 25, for its depression trial, which will enroll more than 100 patients. Brain imaging studies have shown that area 25 is more active in depressed people.
In a study of 20 patients, 55% still responded to treatment as late as one year after surgery, says study author Dr. Helen Mayberg, professor of psychiatry and neurology at Emory University. That is an "unheard-of response rate" given that these patients had tried and failed every other treatment, including several medications and electroconvulsive therapy, Mayberg says.
By comparison, Mayberg says, stimulation of the vagus nerve in the neck, approved by the FDA for depression, has only a 15% response rate at 10 weeks in similarly severely depressed patients.
Dr. Thomas Schlaepfer, vice chairman of the department of psychiatry of the University of Bonn in Germany, has been treating severely depressed patients by stimulating yet a third brain target, the nucleus accumbens.
The nucleus accumbens doesn't show normal activity in depressed patients, which could explain why they are less able to experience pleasure.
Last year, Schlaepfer showed that deep brain stimulation in this area led to acute improvements in three severely depressed patients. He says he has extended the work to 10 patients, half of whom showed an improvement when examined a year later.
With deep brain stimulation now being tried in at least three brain areas for depression, the question is, which target is the best? All agree that it's too early to tell.
Such is the hardware for deep brain stimulation -- the equivalent of a cardiac pacemaker for the mind.
Until recently, deep brain stimulation was approved in the U.S. only to treat certain movement disorders, primarily those of Parkinson's disease, for which it diminishes tremors and rigidity and improves mobility. To date, more than 60,000 patients worldwide have had the devices implanted.
But now use of the technique seems set to mushroom.
This year, the Food and Drug Administration granted a so-called humanitarian device exemption for the treatment to be used in severe cases of obsessive-compulsive disorder -- the first approval of deep brain stimulation therapy for any psychiatric condition.
Large clinical trials are also in the works for use of deep brain stimulation for epilepsy and depression, and experimental studies in the U.S. and elsewhere -- still in their early stages -- are exploring the treatment for obesity, traumatic brain injury, severe chronic pain, Alzheimer's disease, anorexia, tinnitus and addiction.
There are discussions too on the possible use of deep brain stimulation to treat hypertension.
"The field is taking off," says Dr. Ali Rezai, director of functional neurosurgery at the Cleveland Clinic, who has been involved in research on movement disorders, traumatic brain injury, obsessive-compulsive disorder and severe depression, among others.
Some researchers warn, however, that with all this activity -- pushed in part by the industry that makes the brain-stimulation devices -- the field may be moving too fast.
"There is so much progress that's been made and so much potential -- you would hate to lose that potential," says Dr. Joseph Fins, chief of the division of medical ethics and a professor at Weill Cornell Medical College in New York.
Here's a look at deep brain stimulation as it moves beyond Parkinson's disease. (See the related story about reservations scientists have about the growth of the field, and go online at latimes.com/health for a look at less-explored applications such as traumatic brain injury and obesity.)
Obsessive- compulsive disorder
In studies with a total of 26 patients with severe obsessive-compulsive disorder, 60% of those whose device was turned on demonstrated "very much improved" symptoms after months of deep brain stimulation as measured by interviews and questionnaires, says Dr. Benjamin Greenberg, an associate professor at Brown University Medical School and Butler Hospital in Providence, R.I., who was one of the study researchers.
The patients had previously failed on medicines as well as behavioral cognitive therapy.
Yet the data, published last year in Molecular Psychiatry, can't really nail the effect of the treatment, Greenberg says, because the patients for the most part knew whether their devices were turned on or off. Thus, researchers can't rule out that some of the observed improvements were due to a placebo effect.
Patients were stimulated in an area called ventral capsule/ventral striatum, chosen, in part, because removal of nerve fibers in that area is known to cause improvement in obsessive-compulsive symptoms.
Based largely on these findings, the FDA recently granted a limited humanitarian device exemption that permits the device to be used in as many as 4,000 of the country's most severe cases of obsessive compulsive disorder per year.
To get this kind of exemption, Medtronic -- makers of the only deep brain stimulation device that is FDA-approved -- needed only to show its safety and probable benefit.
Greenberg is now doing a randomized, double-blinded trial with 30 patients, some of whom have devices turned on right away and some who have them turned on after a delay. No one will know whose device is turned on for the first several months of the trial.
Medtronic has conducted a large-scale randomized trial for deep brain stimulation on epilepsy. Data will be submitted to the FDA this year, says Paul Stypulkowski, senior director of therapy research of Medtronic.
The device was turned on, for three months, in half of the 110 volunteers, stimulating -- and thereby, paradoxically, inhibiting-- an area called the anterior nucleus of the thalamus. That area is believed to influence a circuit involved in seizures.
The data, presented in December at a meeting in Seattle, show that deep brain stimulation reduced the number of seizures by 38% compared with what was seen before implanting the device.
That is slightly better than improvement seen with vagus nerve stimulation, another FDA-approved electrical stimulation treatment, which reduces seizures by about 25%.
The control group whose device was kept turned off, also improved, by 14.5%. That could be due to a placebo effect. Or it might be because people who join trials are usually at their worst -- and often tend to improve somewhat on their own, says trial researcher Dr. Douglas Labar, of the Weill Cornell Medical College in New York.
If deep brain stimulation is approved, Labar says, patients will have the choice between a more efficient but also more risky treatment and the slightly less efficient but also less risky vagus nerve stimulation.
Depression
Medtronic and a second company, St. Paul, Minn.-based St. Jude Medical, have two large-scale randomized trials underway for severe, treatment-resistant depression. (St. Jude Medical recently received approval to sell its device for the treatment of Parkinson's disease in Europe and is now completing studies aimed at securing FDA approval for treating Parkinson's and another movement disorder in the U.S.)
Medtronic's depression trial will follow about 200 patients stimulated in an area called the anterior limb of the internal capsule for at least one year.
This brain target for depression was identified by accident: When obsessive-compulsive disorder patients who also had depression were stimulated in this area, their depression also improved.
In one case, a patient produced a one-sided smile when stimulated on one side of the brain and also expressed feelings of happiness, says study researcher Dr. Wayne Goodman of the National Institute of Mental Health.
In a recently published unblinded study, about half of 15 patients showed at least a 50% improvement in severe depression symptoms a year or more after surgery when the anterior limb of the internal capsule was stimulated, says Rezai, who was involved in the study.
St. Jude Medical chose a different brain target, area 25, for its depression trial, which will enroll more than 100 patients. Brain imaging studies have shown that area 25 is more active in depressed people.
In a study of 20 patients, 55% still responded to treatment as late as one year after surgery, says study author Dr. Helen Mayberg, professor of psychiatry and neurology at Emory University. That is an "unheard-of response rate" given that these patients had tried and failed every other treatment, including several medications and electroconvulsive therapy, Mayberg says.
By comparison, Mayberg says, stimulation of the vagus nerve in the neck, approved by the FDA for depression, has only a 15% response rate at 10 weeks in similarly severely depressed patients.
Dr. Thomas Schlaepfer, vice chairman of the department of psychiatry of the University of Bonn in Germany, has been treating severely depressed patients by stimulating yet a third brain target, the nucleus accumbens.
The nucleus accumbens doesn't show normal activity in depressed patients, which could explain why they are less able to experience pleasure.
Last year, Schlaepfer showed that deep brain stimulation in this area led to acute improvements in three severely depressed patients. He says he has extended the work to 10 patients, half of whom showed an improvement when examined a year later.
With deep brain stimulation now being tried in at least three brain areas for depression, the question is, which target is the best? All agree that it's too early to tell.
Put Ad on Web. Count Clicks. Revise.
ON a recent Thursday, Darren Herman, the president of Varick Media Management, was sequestered in his SoHo office. He wasn’t scrutinizing a television ad or images from a photo shoot. He was combing through graphs and Excel spreadsheets.
Mr. Herman had run 27 ads on the Web for his client Vespa, the scooter company. Some were rectangular, some square. And the text varied: One tagline said, “Smart looks. Smarter purchase,” and displayed a $0 down, 0 percent interest offer. Another read, “Pure fun. And function,” and promoted a free T-shirt.
Vespa’s goal was to find out whether a financial offer would attract customers, and Mr. Herman’s data concluded that it did. The $0 down offer attracted 71 percent more responses from one group of Web surfers than the average of all the Vespa ads, while the T-shirt offer drew 29 percent fewer. And Mr. Herman didn’t just compare the messages in the ads — he also looked at the sites where they ran, when they ran and what groups of people responded.
From the “Mad Men” era until now, advertising has been about a catchy tagline, an arresting image, the Big Idea. But Mr. Herman and his competitors are bringing some Wall Street-like analysis to Madison Avenue, exploiting the huge amounts of data produced by the Internet to adjust strategy almost instantly.
“It’s putting numbers to an industry that never had numbers before,” says Mr. Herman, 27, who started and sold three media and technology companies before founding Varick last summer. “It’s nice to be able to tell your brand manager or the chief marketing officer which audience is interacting with the unit, what time of day, what day of the week, and what the response is on certain types of offers. Before, nobody could really tell you that.”
This approach turns marketing “upside down,” says Ron Proleika, the vice president of marketing communications at Windstream Communications, an Internet service provider and a client of Mr. Herman’s. “It forces marketers to stay on their toes and think of thousands of small great ideas instead of one great big one."
Major advertising holding companies like WPP, the Publicis Groupe, Havas, MDC Partners and the Interpublic Group are starting data practices, hoping to latch onto what is expected to be the fastest-growing category of online advertising in the next five years.
Where the data guys were once an afterthought in a marketing presentation, now they are at the core of the online strategy. What’s more, they can help advertisers save money in traditional media by testing different phrases or images online to see what works before producing an expensive television commercial or magazine ad. Who attracts more clicks in a grape juice ad, for example — the blond girl or the brown-haired boy?
The shift to data-based campaigns is forcing marketers to learn new skills and drawing a new breed of worker to Madison Avenue. While most data executives now in the field came from media backgrounds, they are recruiting Wall Street math geniuses because the job requires hourly adjustments in strategy based on numbers.
Mr. Herman is trying to hire people from Citigroup and Bank of America, and he hopes that the layoffs in the financial industry will help him do it on the cheap.
“It mirrors the financial markets in many ways,” he says, so “that’s where we go."
Still, getting advertising agency employees to rely on data is difficult, agencies say. And as people trained on Wall Street migrate to Madison Avenue, executives anticipate battles between creative types and wonks.
Traditional ad agencies still don’t have budgets that allow for a lot of digital experimentation, Mr. Herman says. He notes that most traditional agencies “make the bulk of their money in print, radio and television.”
So even as this area becomes increasingly technology-driven, old ways of doing business and clients reluctant to embrace radically new approaches mean that the advertising culture won’t change overnight.
“At the end of the day,” Mr. Herman says, “the entire process isn’t digital because our clients aren’t.”
UNTIL the Internet, advertising required heavy research at the front and back ends. Millions of dollars went into television and print ads, so the advertisers had to get the idea right before they produced one. Determining the effectiveness of those ads was hard. It required follow-up surveys and interviews. And once advertisers began a campaign, they were locked into it — they usually booked TV spots four months before the season began, for instance, and even if a show tanked, they couldn’t always abort their plans.
1 2 “In the olden days, the consequences of planning were great, so we’d spend nine months before air date” doing research, says Barry Lowenthal, the president of the Media Kitchen, a media planning and buying company that, like Varick, is a unit of MDC Partners. “Then, nine months after we’d been running the ad, we’d finally figure out whether it was working or not.”
Online, though, advertisers get instant measurements and can make instant changes to a media plan.
Varick and its handful of competitors cement their strategies around a system called exchanges, a mechanism that helps online publishers like NBC.com or Yahoo.com sell ad space. While publishers have some ad space no company would bid on in advance — few advertisers would book a random Yahoo mail page, for instance — publishers still want to show an ad when someone loads that page. So the publishers let an ad exchange like Right Media, from Yahoo, or DoubleClick Advertising Exchange, from Google, sell that space instantly, through an electronic auction, and get a cut of sales.
Such random, seemingly unwanted space could be virtually worthless. But because ad agencies can now use multiple sources to gather very specific demographic data about visitors, such space gains value and can be brokered on an exchange.
Among the sources agencies rely on for data-mining is information gathered from other sites. Imagine that every time someone entered a store while shopping, she received a stamp on her hand. By the time she got to Macy’s, the clerk could see she had visited Williams-Sonoma and Home Depot and could direct her to housewares. A similar principle is followed online.
When someone visits a site like Expedia or Autobytel.com, that site captures valuable information: Someone is a first-class traveler, for instance, or shopping for a hybrid car. Those sites have deals with data companies, like , to place a so-called cookie — a small text file — on that visitor’s hard drive, indicating those preferences. An advertiser like Varick bids on those cookies, instructing an exchange that it will pay a certain amount for an ad when a certain cookie is for sale.
Other companies, like Media6Degrees and 33Across, analyze the world of social media, using cookies and interaction data to find “lookalike” groups among friends on Facebook, Flickr or other social sites. Their theory is that friends share values and are likely to respond to similar marketing messages.
Finally, companies can add cookies for anyone who visits pages on their sites — if someone gets to the checkout page, then abandons his shopping cart, the company will probably pay lots of money to advertise to him again.
This combination — real-time data and ad exchanges — has monetized what was once considered throwaway space online. ThinkEquity, a research firm, estimated that advertising based around Web publishers’ extra space brought in $4.1 billion in 2008, up 32 percent from 2007, and it expects it to be the highest-growth segment of the online advertising market between now and 2013, outpacing even search. (It is still a small part, however, of what ZenithOptimedia, a media agency, estimates to be the overall $487 billion advertising market.)
All this tracking has raised privacy concerns. Some privacy advocates have asked Congress and the Federal Trade Commission to investigate the issue, seeking clear policies about sensitive data, more information on the way companies are tracking consumers and options for consumers to avoid online tracking.
So far, the commission has recommended that the industry police itself. But Jon Leibowitz, one of the commissioners, warned in February that the industry needed to do a better job or face new laws and regulations.
Without much regulation, says Michael Brunick, vice president and media technology director for Cadreon, a competitor of Varick’s, “the data game right now is a little bit of the Wild West.”
WITH so much information to trade on, several advertising firms are creating their own data-based practices.
“We have, over the last year or so, gotten more and more interested in the ways that you can use data to make advertising more effective online,” says Matt Greitzer, the vice president of search marketing and auction-based media at Razorfish, which is building its exchange group.
In addition to what an ad should say, and where and when it should run, advertisers have to figure out how much each ad, or “impression,” is worth. The data helps them do that. “You’re making, in some cases, real-time decisions about how much to pay for a specific impression,” Mr. Greitzer says.
In a simple example, if an advertiser knew that his ads attracted more clicks on profiles.yahoo.com than on movies.yahoo.com, he would pay more when space was auctioned for the first site.
Edward Montes, the managing director for North America at Havas Digital, who oversees its exchange group, says that his data analysts are “basically looking for anything that affects performance — any time they find variance in the matter of how the media performs, that’s what they go in and exploit, and that’s what the exchanges are perfectly set up to do.”
As data executives continue to build on their research, this arena could resemble Wall Street even more: yield managers could hedge their purchases, buy futures to lock in prices and use other trading strategies. And this type of sophisticated testing and trading will require changes in clients’ attitudes.
Mediabrands, a unit of the Interpublic Group, has been quietly running a data practice called Cadreon for nine months that it soon plans to roll out more publicly. In addition to buying standard Web site ad space, Cadreon also buys mobile advertising, online video slots and, soon, spots on digital billboards and other new media.
Traditionally, marketers allocate certain amounts of money for each medium. Quentin George, the interim chief executive of Cadreon and the chief digital officer of Mediabrands, says Cadreon instead would base its strategy on the audience, not the medium.
For a campaign it’s now running for a technology client, Cadreon bought data on visitors to Web sites of the client’s competitors. It divided them into groups that its client already used to segment existing customers offline — like new parents, gamers or designers.
By examining clicks and other data, Cadreon determined the demographic profile of groups that were most interested in the ads. In this particular campaign, new parents responded at high rates so Cadreon emphasized pitching ads online to that group.
As more ads are bought and sold through exchanges, it could transform the ad marketplace. “It is foreseeable that you can go into the system, select an audience and not know whether you are ultimately buying” a cellphone ad or a video ad on a Web site like Hulu, Mr. George says. “That’s a very, very big change.”
Mr. Herman had run 27 ads on the Web for his client Vespa, the scooter company. Some were rectangular, some square. And the text varied: One tagline said, “Smart looks. Smarter purchase,” and displayed a $0 down, 0 percent interest offer. Another read, “Pure fun. And function,” and promoted a free T-shirt.
Vespa’s goal was to find out whether a financial offer would attract customers, and Mr. Herman’s data concluded that it did. The $0 down offer attracted 71 percent more responses from one group of Web surfers than the average of all the Vespa ads, while the T-shirt offer drew 29 percent fewer. And Mr. Herman didn’t just compare the messages in the ads — he also looked at the sites where they ran, when they ran and what groups of people responded.
From the “Mad Men” era until now, advertising has been about a catchy tagline, an arresting image, the Big Idea. But Mr. Herman and his competitors are bringing some Wall Street-like analysis to Madison Avenue, exploiting the huge amounts of data produced by the Internet to adjust strategy almost instantly.
“It’s putting numbers to an industry that never had numbers before,” says Mr. Herman, 27, who started and sold three media and technology companies before founding Varick last summer. “It’s nice to be able to tell your brand manager or the chief marketing officer which audience is interacting with the unit, what time of day, what day of the week, and what the response is on certain types of offers. Before, nobody could really tell you that.”
This approach turns marketing “upside down,” says Ron Proleika, the vice president of marketing communications at Windstream Communications, an Internet service provider and a client of Mr. Herman’s. “It forces marketers to stay on their toes and think of thousands of small great ideas instead of one great big one."
Major advertising holding companies like WPP, the Publicis Groupe, Havas, MDC Partners and the Interpublic Group are starting data practices, hoping to latch onto what is expected to be the fastest-growing category of online advertising in the next five years.
Where the data guys were once an afterthought in a marketing presentation, now they are at the core of the online strategy. What’s more, they can help advertisers save money in traditional media by testing different phrases or images online to see what works before producing an expensive television commercial or magazine ad. Who attracts more clicks in a grape juice ad, for example — the blond girl or the brown-haired boy?
The shift to data-based campaigns is forcing marketers to learn new skills and drawing a new breed of worker to Madison Avenue. While most data executives now in the field came from media backgrounds, they are recruiting Wall Street math geniuses because the job requires hourly adjustments in strategy based on numbers.
Mr. Herman is trying to hire people from Citigroup and Bank of America, and he hopes that the layoffs in the financial industry will help him do it on the cheap.
“It mirrors the financial markets in many ways,” he says, so “that’s where we go."
Still, getting advertising agency employees to rely on data is difficult, agencies say. And as people trained on Wall Street migrate to Madison Avenue, executives anticipate battles between creative types and wonks.
Traditional ad agencies still don’t have budgets that allow for a lot of digital experimentation, Mr. Herman says. He notes that most traditional agencies “make the bulk of their money in print, radio and television.”
So even as this area becomes increasingly technology-driven, old ways of doing business and clients reluctant to embrace radically new approaches mean that the advertising culture won’t change overnight.
“At the end of the day,” Mr. Herman says, “the entire process isn’t digital because our clients aren’t.”
UNTIL the Internet, advertising required heavy research at the front and back ends. Millions of dollars went into television and print ads, so the advertisers had to get the idea right before they produced one. Determining the effectiveness of those ads was hard. It required follow-up surveys and interviews. And once advertisers began a campaign, they were locked into it — they usually booked TV spots four months before the season began, for instance, and even if a show tanked, they couldn’t always abort their plans.
1 2 “In the olden days, the consequences of planning were great, so we’d spend nine months before air date” doing research, says Barry Lowenthal, the president of the Media Kitchen, a media planning and buying company that, like Varick, is a unit of MDC Partners. “Then, nine months after we’d been running the ad, we’d finally figure out whether it was working or not.”
Online, though, advertisers get instant measurements and can make instant changes to a media plan.
Varick and its handful of competitors cement their strategies around a system called exchanges, a mechanism that helps online publishers like NBC.com or Yahoo.com sell ad space. While publishers have some ad space no company would bid on in advance — few advertisers would book a random Yahoo mail page, for instance — publishers still want to show an ad when someone loads that page. So the publishers let an ad exchange like Right Media, from Yahoo, or DoubleClick Advertising Exchange, from Google, sell that space instantly, through an electronic auction, and get a cut of sales.
Such random, seemingly unwanted space could be virtually worthless. But because ad agencies can now use multiple sources to gather very specific demographic data about visitors, such space gains value and can be brokered on an exchange.
Among the sources agencies rely on for data-mining is information gathered from other sites. Imagine that every time someone entered a store while shopping, she received a stamp on her hand. By the time she got to Macy’s, the clerk could see she had visited Williams-Sonoma and Home Depot and could direct her to housewares. A similar principle is followed online.
When someone visits a site like Expedia or Autobytel.com, that site captures valuable information: Someone is a first-class traveler, for instance, or shopping for a hybrid car. Those sites have deals with data companies, like , to place a so-called cookie — a small text file — on that visitor’s hard drive, indicating those preferences. An advertiser like Varick bids on those cookies, instructing an exchange that it will pay a certain amount for an ad when a certain cookie is for sale.
Other companies, like Media6Degrees and 33Across, analyze the world of social media, using cookies and interaction data to find “lookalike” groups among friends on Facebook, Flickr or other social sites. Their theory is that friends share values and are likely to respond to similar marketing messages.
Finally, companies can add cookies for anyone who visits pages on their sites — if someone gets to the checkout page, then abandons his shopping cart, the company will probably pay lots of money to advertise to him again.
This combination — real-time data and ad exchanges — has monetized what was once considered throwaway space online. ThinkEquity, a research firm, estimated that advertising based around Web publishers’ extra space brought in $4.1 billion in 2008, up 32 percent from 2007, and it expects it to be the highest-growth segment of the online advertising market between now and 2013, outpacing even search. (It is still a small part, however, of what ZenithOptimedia, a media agency, estimates to be the overall $487 billion advertising market.)
All this tracking has raised privacy concerns. Some privacy advocates have asked Congress and the Federal Trade Commission to investigate the issue, seeking clear policies about sensitive data, more information on the way companies are tracking consumers and options for consumers to avoid online tracking.
So far, the commission has recommended that the industry police itself. But Jon Leibowitz, one of the commissioners, warned in February that the industry needed to do a better job or face new laws and regulations.
Without much regulation, says Michael Brunick, vice president and media technology director for Cadreon, a competitor of Varick’s, “the data game right now is a little bit of the Wild West.”
WITH so much information to trade on, several advertising firms are creating their own data-based practices.
“We have, over the last year or so, gotten more and more interested in the ways that you can use data to make advertising more effective online,” says Matt Greitzer, the vice president of search marketing and auction-based media at Razorfish, which is building its exchange group.
In addition to what an ad should say, and where and when it should run, advertisers have to figure out how much each ad, or “impression,” is worth. The data helps them do that. “You’re making, in some cases, real-time decisions about how much to pay for a specific impression,” Mr. Greitzer says.
In a simple example, if an advertiser knew that his ads attracted more clicks on profiles.yahoo.com than on movies.yahoo.com, he would pay more when space was auctioned for the first site.
Edward Montes, the managing director for North America at Havas Digital, who oversees its exchange group, says that his data analysts are “basically looking for anything that affects performance — any time they find variance in the matter of how the media performs, that’s what they go in and exploit, and that’s what the exchanges are perfectly set up to do.”
As data executives continue to build on their research, this arena could resemble Wall Street even more: yield managers could hedge their purchases, buy futures to lock in prices and use other trading strategies. And this type of sophisticated testing and trading will require changes in clients’ attitudes.
Mediabrands, a unit of the Interpublic Group, has been quietly running a data practice called Cadreon for nine months that it soon plans to roll out more publicly. In addition to buying standard Web site ad space, Cadreon also buys mobile advertising, online video slots and, soon, spots on digital billboards and other new media.
Traditionally, marketers allocate certain amounts of money for each medium. Quentin George, the interim chief executive of Cadreon and the chief digital officer of Mediabrands, says Cadreon instead would base its strategy on the audience, not the medium.
For a campaign it’s now running for a technology client, Cadreon bought data on visitors to Web sites of the client’s competitors. It divided them into groups that its client already used to segment existing customers offline — like new parents, gamers or designers.
By examining clicks and other data, Cadreon determined the demographic profile of groups that were most interested in the ads. In this particular campaign, new parents responded at high rates so Cadreon emphasized pitching ads online to that group.
As more ads are bought and sold through exchanges, it could transform the ad marketplace. “It is foreseeable that you can go into the system, select an audience and not know whether you are ultimately buying” a cellphone ad or a video ad on a Web site like Hulu, Mr. George says. “That’s a very, very big change.”
Industry Fears Americans May Quit New Car Habit
For all the drastic cuts and financial overhauls that are meant to secure a future for General Motors and Chrysler, their prospects in coming years will be determined more by the answer to a simple question: Can American drivers live without that new-car smell?
In recent years Americans appeared to be hooked on it and took advantage of home equity loans, easy credit and cheap short-term lease deals to send new-car sales to levels of more than 17 million a year.
Now the market has collapsed by 46 percent to below 10 million, as people are making do with the cars they have, leaving the industry to debate — and worry — about what the new normal will be once the recession ends.
Some say the downturn is temporary and that sales will spring back in a few years. Others believe Americans will rethink whether they need so many cars, particularly new ones.
The answer will be important to the Obama administration as it prepares to put G.M. into bankruptcy on Monday. After the company emerges from bankruptcy, the federal government will own about 70 percent of it, in return for $50 billion in taxpayer aid. G.M. has already received about $20 billion in federal help.
The Treasury Department’s advisers, who initially expected auto sales to pick up late next year, now foresee no jump in demand this year or in 2010. And even five years out, they expect annual sales to be about 15 million, still well below the peaks of this decade.
Making predictions is tricky in this economy. The market has grown more bleak, and worst-case scenarios drafted only months ago are becoming reality.
If sales do not recover, the Treasury will have to provide more financial support for G.M. and for Chrysler, which has received about $10 billion in federal aid, before they can stand on their own and the government can divest its shares.
People like Kate M. Emminger do not offer the carmakers much hope. Ms. Emminger sold her 2006 Toyota Corolla last April because she decided she could not afford her $250 monthly payment, even though she earns about $60,000 a year as a university events planner.
“It just became too expensive to have a car,” Ms. Emminger said. Now, she volunteers at City CarShare, a nonprofit organization in San Francisco, in order to earn free use of its vehicles, which normally rent to members for $5 an hour plus 40 cents a mile. Otherwise, she takes public transit.
But plenty of people in Detroit argue that once the recession is over, buyers will rush back to dealer showrooms.
If sales do pick up, carmakers eventually could be more profitable than they have ever been because of all the costs they have shed, said David Cole, chairman of the Center for Automotive Research in Ann Arbor, Mich.
“After you rebound from this artificial low in demand, wow,” Mr. Cole said of the potential for auto sales and profits.
He estimates that pent-up demand for new cars is actually about 4 million vehicles higher than the current selling rate, which in April would translate to 9.3 million a year, according to Autodata Incorporated.
Others, however, point to shifts suggesting that Americans’ desire — and need — for new cars may be cooling.
Baby boomers, the biggest group in the car market, are beginning to enter retirement, a stage of life when people typically buy fewer cars. Home values are down sharply, making consumers feel less wealthy, and also cutting off a handy source of money from home-equity loans for new cars.
“We sold to people who purchased cars by refinancing their houses,” said Wilbur Ross, the billionaire financier who has invested in steel mills and auto parts companies.
The housing and financial crisis has taken its toll on reliable customers like Frank Powell, a school administrator in the East Palo Alto school district in California. He moved out of the house he had lived in since 1983 and started renting a few months ago because of his debt burden, which includes auto loans.
“I used to buy cars all the time and took out loans to pay them off,” he said. “As soon as I paid part of one off I’d get another. I’d buy one for my kids, my wife, myself. I can’t do that anymore”
He now has a Cadillac Escalade sport-utility vehicle, but he is thinking about downsizing and driving something much smaller — and for longer.
“Something had to change,” he added. “You just can’t keep going with that many cars.”
Lifestyles have changed, too. As many people move back to cities from suburbs, they are swapping three-car garages for a single parking space. Public transit use is up.
“Too many people are looking at alternatives,” said Scott Griffith, chief executive of Zipcar, the national car-sharing company that has more than 300,000 members, up from about 200,000 a year ago. Mr. Griffith estimates that for every three members, a new car probably goes unsold.
“They’re much smarter about spending money and looking for ways that don’t even involve cars any more,” he added.
Of course, car-sharing services like Zipcar are not available everywhere. They are concentrated in urban areas and college towns, where owning a car can be burdensome and expensive.
Donald Grimes, an economist at the University of Michigan, is forecasting the lowest sales for the driving-age population this year since 1970.
From 1970 to 2001, there were 0.76 vehicles sold per driver in the United States. Now that figure has dropped to 0.4 vehicles per driver, and he does not see much of a rebound in coming years.
The swift decline has spooked the industry. “I don’t think there has ever been a period in our history like this,” Josephine Cooper, Toyota’s group vice president for government and industry affairs, said of her company, which lost $7.1 billion in the first three months of the year. “It is very, very sobering.”
Now Toyota and other carmakers must wait to see if Americans will return to their old car-buying habits — people like Jay S. Allen, owner of a San Francisco consulting firm, and his wife, Jennifer Nicoloff, a product manager at Gap. Over the years, they have owned eight cars between them.
But now they are carless, with no plans to buy. When he needs transportation, Mr. Allen either rides his scooter or borrows a car for a few hours from a local car-sharing service.
“The biggest thing right now is fear,” Mr. Allen said. “We don’t know which way the economy is going to go. We don’t want to buy anything that has long-term implications.”
In recent years Americans appeared to be hooked on it and took advantage of home equity loans, easy credit and cheap short-term lease deals to send new-car sales to levels of more than 17 million a year.
Now the market has collapsed by 46 percent to below 10 million, as people are making do with the cars they have, leaving the industry to debate — and worry — about what the new normal will be once the recession ends.
Some say the downturn is temporary and that sales will spring back in a few years. Others believe Americans will rethink whether they need so many cars, particularly new ones.
The answer will be important to the Obama administration as it prepares to put G.M. into bankruptcy on Monday. After the company emerges from bankruptcy, the federal government will own about 70 percent of it, in return for $50 billion in taxpayer aid. G.M. has already received about $20 billion in federal help.
The Treasury Department’s advisers, who initially expected auto sales to pick up late next year, now foresee no jump in demand this year or in 2010. And even five years out, they expect annual sales to be about 15 million, still well below the peaks of this decade.
Making predictions is tricky in this economy. The market has grown more bleak, and worst-case scenarios drafted only months ago are becoming reality.
If sales do not recover, the Treasury will have to provide more financial support for G.M. and for Chrysler, which has received about $10 billion in federal aid, before they can stand on their own and the government can divest its shares.
People like Kate M. Emminger do not offer the carmakers much hope. Ms. Emminger sold her 2006 Toyota Corolla last April because she decided she could not afford her $250 monthly payment, even though she earns about $60,000 a year as a university events planner.
“It just became too expensive to have a car,” Ms. Emminger said. Now, she volunteers at City CarShare, a nonprofit organization in San Francisco, in order to earn free use of its vehicles, which normally rent to members for $5 an hour plus 40 cents a mile. Otherwise, she takes public transit.
But plenty of people in Detroit argue that once the recession is over, buyers will rush back to dealer showrooms.
If sales do pick up, carmakers eventually could be more profitable than they have ever been because of all the costs they have shed, said David Cole, chairman of the Center for Automotive Research in Ann Arbor, Mich.
“After you rebound from this artificial low in demand, wow,” Mr. Cole said of the potential for auto sales and profits.
He estimates that pent-up demand for new cars is actually about 4 million vehicles higher than the current selling rate, which in April would translate to 9.3 million a year, according to Autodata Incorporated.
Others, however, point to shifts suggesting that Americans’ desire — and need — for new cars may be cooling.
Baby boomers, the biggest group in the car market, are beginning to enter retirement, a stage of life when people typically buy fewer cars. Home values are down sharply, making consumers feel less wealthy, and also cutting off a handy source of money from home-equity loans for new cars.
“We sold to people who purchased cars by refinancing their houses,” said Wilbur Ross, the billionaire financier who has invested in steel mills and auto parts companies.
The housing and financial crisis has taken its toll on reliable customers like Frank Powell, a school administrator in the East Palo Alto school district in California. He moved out of the house he had lived in since 1983 and started renting a few months ago because of his debt burden, which includes auto loans.
“I used to buy cars all the time and took out loans to pay them off,” he said. “As soon as I paid part of one off I’d get another. I’d buy one for my kids, my wife, myself. I can’t do that anymore”
He now has a Cadillac Escalade sport-utility vehicle, but he is thinking about downsizing and driving something much smaller — and for longer.
“Something had to change,” he added. “You just can’t keep going with that many cars.”
Lifestyles have changed, too. As many people move back to cities from suburbs, they are swapping three-car garages for a single parking space. Public transit use is up.
“Too many people are looking at alternatives,” said Scott Griffith, chief executive of Zipcar, the national car-sharing company that has more than 300,000 members, up from about 200,000 a year ago. Mr. Griffith estimates that for every three members, a new car probably goes unsold.
“They’re much smarter about spending money and looking for ways that don’t even involve cars any more,” he added.
Of course, car-sharing services like Zipcar are not available everywhere. They are concentrated in urban areas and college towns, where owning a car can be burdensome and expensive.
Donald Grimes, an economist at the University of Michigan, is forecasting the lowest sales for the driving-age population this year since 1970.
From 1970 to 2001, there were 0.76 vehicles sold per driver in the United States. Now that figure has dropped to 0.4 vehicles per driver, and he does not see much of a rebound in coming years.
The swift decline has spooked the industry. “I don’t think there has ever been a period in our history like this,” Josephine Cooper, Toyota’s group vice president for government and industry affairs, said of her company, which lost $7.1 billion in the first three months of the year. “It is very, very sobering.”
Now Toyota and other carmakers must wait to see if Americans will return to their old car-buying habits — people like Jay S. Allen, owner of a San Francisco consulting firm, and his wife, Jennifer Nicoloff, a product manager at Gap. Over the years, they have owned eight cars between them.
But now they are carless, with no plans to buy. When he needs transportation, Mr. Allen either rides his scooter or borrows a car for a few hours from a local car-sharing service.
“The biggest thing right now is fear,” Mr. Allen said. “We don’t know which way the economy is going to go. We don’t want to buy anything that has long-term implications.”
For G.M., a Step Toward Bankruptcy and a New Start
General Motors, the fallen giant of the American auto industry, is expected to file for bankruptcy protection on Monday and put its fate in the hands of President Obama and the nation’s taxpayers.
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Times Topics: General Motors Corporation | Automotive Industry Crisis
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President Obama is scheduled to announce his support of G.M’s bankruptcy filing in a televised speech late Monday morning at the White House, according to people with knowledge of the automaker’s plans, much as he did on April 30 when G.M.’s cross-town rival, Chrysler, sought court protection.
G.M., which has been subsisting on federal loans since January, is expected to file for reorganization in Federal Bankruptcy Court in Manhattan, and immediately begin to restructure its troubled operations under government control. G.M. executives plan a news conference shortly after Mr. Obama’s speech.
The filing would be a stunning climax to G.M.’s financial collapse, triggered last year when auto sales plunged and the automaker appealed to Washington for emergency aid.
While G.M. has already received $19.4 billion in federal loans, the government will probably spend another $30 billion or more to pay for the reorganization.
Mr. Obama and his advisers expect G.M. to emerge from court protection in a few months as a new, radically smaller company owned by the federal government, the United Automobile Workers union and its bondholders.
But the road to recovery will be a long and arduous for the 100-year-old automaker that has towered over the American economy since the 1950s and for decades built and sold more cars than any company in the world.
“For all the talk about a new beginning, there is no denying that the collapse of this once great company is a national tragedy,” said John Casesa, an industry consultant and former Wall Street analyst. “Fortunately, the government has been decisive and remarkably quick in salvaging what’s worth saving.”
The last obstacle to an orderly bankruptcy was removed Saturday when a majority of investors holding $27.2 billion in G.M. bonds agreed to exchange their debt for stock and not fight the filing in court.
A G.M. bankruptcy has been widely anticipated since Mr. Obama and his auto task force forced Chrysler, G.M.’s smaller Detroit rival, to file for Chapter 11 last month.
Administration officials have described Chrysler’s bankruptcy as a test case for the more complex task of restructuring G.M, a far larger company that last year lost $30.9 billion.
A federal judge is expected to rule on the sale of most of Chrysler to Fiat, the Italian carmaker, sometime on Monday or Tuesday. The judge, Arthur J. Gonzalez, heard arguments and testimony on the proposal during three days of marathon hearings last week.
If approved, Chrysler and the government expect to close on the Fiat deal within days of receiving permission. But the sale is being challenged by several parties, including three Indiana state funds and several groups of dealers that have been designated for removal from Chrysler’s network.
G.M. essentially came under government control when it received its first federal loans from the Bush administration in late December and, in return, agreed to cut labor costs, reduce its debt and drastically downsize.
Since taking office, Mr. Obama and his advisers have pushed G.M. to cut deeper into its global work force of 160,000, drop underperforming brands and models, and shrink its network of factories and dealers to match its shrinking market share.
Mr. Obama rejected G.M.’s initial plans for restructuring, and forced its chief executive, Rick Wagoner, to resign as a condition for more government aid.
Two of the president’s advisers, Steven Rattner and Ron Bloom, also took over negotiations with the bondholders and unions in an effort to reduce G.M.’s debt load.
Earlier this month, the U.A.W. agreed to take 17.5 percent of G.M.’s stock to finance half of an estimated $20 billion in future health-care obligations for hundreds of thousands of retirees.
After soundly rejecting an initial offer to swap their debt for equity, about 54 percent of G.M. bondholders agreed on Saturday to a deal that could eventually give them 25 percent of the automaker.
But the primary owner will be the federal government, which will convert most of its outstanding loans to G.M. into a 72.5 percent ownership stake.
The government also plans to name Albert A. Koch, a managing partner at the advisory firm AlixPartners, as the chief restructuring officer, according to people briefed on the situation. Mr. Koch will report to G.M.’s chief executive, Fritz Henderson, as well as to the G.M. board. Associates of AlixPartners have been working for weeks, drafting a turnaround plan.
The government did not name a restructuring officer at Chrysler, which sought bankruptcy protection in April, namely because of plans to sell assets of Chrysler to the Italian automaker Fiat. But G.M. does not have a partner waiting, and the government wants to make sure that an outsider who did not come up through the G.M. system is on hand to help lead the restructuring, people who had been briefed on the matter said.
In G.M.’s case, business experts said that the company could remain under federal supervision for years, even if it manages to emerge from bankruptcy on an accelerated timetable.
“It’s going to mean a new chapter in the history books on American capitalism,” said Michael Useem, a professor of management at the Wharton School at the University of Pennsylvania. “This is truly without precedent in scope and scale.”
Mr. Obama and his auto advisers have said that the nation can not afford to let G.M. go bankrupt on its own and put millions of jobs at risk in the tightly integrated auto industry, where car companies share many of the same parts suppliers.
However, the bankruptcy filing will set in motion a painful overhaul of its struggling operations. G.M. has said it will cut 21,000 factory jobs in the United States by next year, and close more than a dozen plants. The company has also pledged to eliminate 40 percent of its 6,000 dealers and drop four of its brands.
As part of its restructuring, G.M. is also expected to identify 14 assembly and parts plants that it expects to close, as it reorganizes its manufacturing operations to concentrate more on smaller vehicles.
In the industrial Midwest, where G.M. has its biggest presence, the bankruptcy filing is likely to fuel more unemployment in a region already hit hard by the recession.
“It’s the auto apocalypse now, not just for Michigan, not just for manufacturing, but for America,” said Representative Thaddeus McCotter, Republican of Michigan.
G.M. is already a shadow of the automotive colossus it once was. Its American market share has slid from a high of 50 percent in the 1960s, to about 20 percent today. Its union work force has dwindled to about 60,000 from a high of 395,000.
The company has been losing money since 2005, but bottomed out last year when a weak economy and tight credit conditions caused new vehicle sales to drop to their lowest levels in 25 years.
Last November, the top executives at G.M., Chrysler and the Ford Motor Company appealed for financial help from Congress and the Bush administration. Ford ultimately declined to take government loans because it still had a line of credit to draw upon with its banks.
But both G.M. and Chrysler would have run out of money without government intervention, and possibly been forced to liquidate.
Skip to next paragraph
Multimedia
Interactive Feature
Milestones in the Carmakers’ Crisis
Today’s Business: Micheline Maynard on the Auto Industry
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Across Europe, Ripples From the Opel Deal (June 1, 2009)
Times Topics: General Motors Corporation | Automotive Industry Crisis
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President Obama is scheduled to announce his support of G.M’s bankruptcy filing in a televised speech late Monday morning at the White House, according to people with knowledge of the automaker’s plans, much as he did on April 30 when G.M.’s cross-town rival, Chrysler, sought court protection.
G.M., which has been subsisting on federal loans since January, is expected to file for reorganization in Federal Bankruptcy Court in Manhattan, and immediately begin to restructure its troubled operations under government control. G.M. executives plan a news conference shortly after Mr. Obama’s speech.
The filing would be a stunning climax to G.M.’s financial collapse, triggered last year when auto sales plunged and the automaker appealed to Washington for emergency aid.
While G.M. has already received $19.4 billion in federal loans, the government will probably spend another $30 billion or more to pay for the reorganization.
Mr. Obama and his advisers expect G.M. to emerge from court protection in a few months as a new, radically smaller company owned by the federal government, the United Automobile Workers union and its bondholders.
But the road to recovery will be a long and arduous for the 100-year-old automaker that has towered over the American economy since the 1950s and for decades built and sold more cars than any company in the world.
“For all the talk about a new beginning, there is no denying that the collapse of this once great company is a national tragedy,” said John Casesa, an industry consultant and former Wall Street analyst. “Fortunately, the government has been decisive and remarkably quick in salvaging what’s worth saving.”
The last obstacle to an orderly bankruptcy was removed Saturday when a majority of investors holding $27.2 billion in G.M. bonds agreed to exchange their debt for stock and not fight the filing in court.
A G.M. bankruptcy has been widely anticipated since Mr. Obama and his auto task force forced Chrysler, G.M.’s smaller Detroit rival, to file for Chapter 11 last month.
Administration officials have described Chrysler’s bankruptcy as a test case for the more complex task of restructuring G.M, a far larger company that last year lost $30.9 billion.
A federal judge is expected to rule on the sale of most of Chrysler to Fiat, the Italian carmaker, sometime on Monday or Tuesday. The judge, Arthur J. Gonzalez, heard arguments and testimony on the proposal during three days of marathon hearings last week.
If approved, Chrysler and the government expect to close on the Fiat deal within days of receiving permission. But the sale is being challenged by several parties, including three Indiana state funds and several groups of dealers that have been designated for removal from Chrysler’s network.
G.M. essentially came under government control when it received its first federal loans from the Bush administration in late December and, in return, agreed to cut labor costs, reduce its debt and drastically downsize.
Since taking office, Mr. Obama and his advisers have pushed G.M. to cut deeper into its global work force of 160,000, drop underperforming brands and models, and shrink its network of factories and dealers to match its shrinking market share.
Mr. Obama rejected G.M.’s initial plans for restructuring, and forced its chief executive, Rick Wagoner, to resign as a condition for more government aid.
Two of the president’s advisers, Steven Rattner and Ron Bloom, also took over negotiations with the bondholders and unions in an effort to reduce G.M.’s debt load.
Earlier this month, the U.A.W. agreed to take 17.5 percent of G.M.’s stock to finance half of an estimated $20 billion in future health-care obligations for hundreds of thousands of retirees.
After soundly rejecting an initial offer to swap their debt for equity, about 54 percent of G.M. bondholders agreed on Saturday to a deal that could eventually give them 25 percent of the automaker.
But the primary owner will be the federal government, which will convert most of its outstanding loans to G.M. into a 72.5 percent ownership stake.
The government also plans to name Albert A. Koch, a managing partner at the advisory firm AlixPartners, as the chief restructuring officer, according to people briefed on the situation. Mr. Koch will report to G.M.’s chief executive, Fritz Henderson, as well as to the G.M. board. Associates of AlixPartners have been working for weeks, drafting a turnaround plan.
The government did not name a restructuring officer at Chrysler, which sought bankruptcy protection in April, namely because of plans to sell assets of Chrysler to the Italian automaker Fiat. But G.M. does not have a partner waiting, and the government wants to make sure that an outsider who did not come up through the G.M. system is on hand to help lead the restructuring, people who had been briefed on the matter said.
In G.M.’s case, business experts said that the company could remain under federal supervision for years, even if it manages to emerge from bankruptcy on an accelerated timetable.
“It’s going to mean a new chapter in the history books on American capitalism,” said Michael Useem, a professor of management at the Wharton School at the University of Pennsylvania. “This is truly without precedent in scope and scale.”
Mr. Obama and his auto advisers have said that the nation can not afford to let G.M. go bankrupt on its own and put millions of jobs at risk in the tightly integrated auto industry, where car companies share many of the same parts suppliers.
However, the bankruptcy filing will set in motion a painful overhaul of its struggling operations. G.M. has said it will cut 21,000 factory jobs in the United States by next year, and close more than a dozen plants. The company has also pledged to eliminate 40 percent of its 6,000 dealers and drop four of its brands.
As part of its restructuring, G.M. is also expected to identify 14 assembly and parts plants that it expects to close, as it reorganizes its manufacturing operations to concentrate more on smaller vehicles.
In the industrial Midwest, where G.M. has its biggest presence, the bankruptcy filing is likely to fuel more unemployment in a region already hit hard by the recession.
“It’s the auto apocalypse now, not just for Michigan, not just for manufacturing, but for America,” said Representative Thaddeus McCotter, Republican of Michigan.
G.M. is already a shadow of the automotive colossus it once was. Its American market share has slid from a high of 50 percent in the 1960s, to about 20 percent today. Its union work force has dwindled to about 60,000 from a high of 395,000.
The company has been losing money since 2005, but bottomed out last year when a weak economy and tight credit conditions caused new vehicle sales to drop to their lowest levels in 25 years.
Last November, the top executives at G.M., Chrysler and the Ford Motor Company appealed for financial help from Congress and the Bush administration. Ford ultimately declined to take government loans because it still had a line of credit to draw upon with its banks.
But both G.M. and Chrysler would have run out of money without government intervention, and possibly been forced to liquidate.
British scientists ask WHO to condemn homeopathy for diseases such as HIV
British scientists have appealed to the World Health Organisation to publicly condemn homeopathy as a treatment for serious diseases, such as HIV, TB and malaria.
The researchers, many of whom have worked in developing countries, called on the WHO to act amid fears that vulnerable patients are dying after turning to homeopathic preparations instead of effective medicines.
The WHO works with national organisations that promote homeopathy and other alternative medicines in their public health programmes.
Homeopathy practitioners have opened clinics throughout Asian and sub-Saharan Africa and offer to treat patients with HIV, malaria, influenza and childhood diarrhoea, none of which have been shown to respond to homeopathy. Many patients are told that conventional drugs work only temporarily and that homeopathic preparations are cheap and effective alternatives with fewer side effects.
"Those of us working with the most rural and impoverished people of the world already struggle to deliver the medical help that is needed. When homeopathy stands in place of effective treatment, lives are lost," the scientists write in an open letter to the organisation.
Homeopathic medicines are made by repeatedly diluting preparations with water until there is no trace left of the original compound. The overwhelming medical opinion is that homeopathic treatments are no more effective than placebos.
"The WHO's strategy is very unclear on homeopathy and that is shocking. They are supposed to be articulating evidence-based medicine, but their stance is very wishy-washy," said Dr Daniella Muallem, a biophysicist at University College London, who signed the letter.
"Homeopathy is cheap, but there is no evidence that it works for these diseases, and the way they are being sold by practitioners is dangerous and completely unethical. There are medicines that do work and we should be advocating trying to get those to people," Muallem added.
According to WHO estimates, 33 million people were living with the HIV virus at the end of 2007, and during that one year, 2 million people died of Aids, including 270,000 children. Two-thirds of the world's HIV cases are in sub-Saharan Africa.
The organisation recorded 247 million cases of malaria and nearly 1 million deaths in 2006. A child dies of the disease every 30 seconds.
In the letter, early career medics and researchers from the Voice of Young Science network highlight homeopathy projects in Kenya, Tanzania, Ethiopia, Ghana and Botswana that all offer to treat patients with HIV, malaria, diarrhoea or the flu.
"Many people in developing countries urgently need access to evidence-based medical information and to the most effective means of treating these dangerous diseases. The promotion of homeopathy as effective or cheaper makes this difficult task even harder. It put lives at risk, undermines conventional medicine and spreads misinformation," the letter says.
Raymond Tallis, emeritus professor of geriatric medicine at Manchester University, said: "The catastrophic consequences of promoting irrational and ineffective treatments for serious illnesses have been demonstrated in South Africa, where Thabo Mbeki's policies have led to an estimated 365,000 unnecessary premature deaths. The prospect of replicating this reckless behaviour elsewhere in developing countries by advocating homeopathic treatments for AIDs and other potentially lethal conditions is appalling."
The researchers, many of whom have worked in developing countries, called on the WHO to act amid fears that vulnerable patients are dying after turning to homeopathic preparations instead of effective medicines.
The WHO works with national organisations that promote homeopathy and other alternative medicines in their public health programmes.
Homeopathy practitioners have opened clinics throughout Asian and sub-Saharan Africa and offer to treat patients with HIV, malaria, influenza and childhood diarrhoea, none of which have been shown to respond to homeopathy. Many patients are told that conventional drugs work only temporarily and that homeopathic preparations are cheap and effective alternatives with fewer side effects.
"Those of us working with the most rural and impoverished people of the world already struggle to deliver the medical help that is needed. When homeopathy stands in place of effective treatment, lives are lost," the scientists write in an open letter to the organisation.
Homeopathic medicines are made by repeatedly diluting preparations with water until there is no trace left of the original compound. The overwhelming medical opinion is that homeopathic treatments are no more effective than placebos.
"The WHO's strategy is very unclear on homeopathy and that is shocking. They are supposed to be articulating evidence-based medicine, but their stance is very wishy-washy," said Dr Daniella Muallem, a biophysicist at University College London, who signed the letter.
"Homeopathy is cheap, but there is no evidence that it works for these diseases, and the way they are being sold by practitioners is dangerous and completely unethical. There are medicines that do work and we should be advocating trying to get those to people," Muallem added.
According to WHO estimates, 33 million people were living with the HIV virus at the end of 2007, and during that one year, 2 million people died of Aids, including 270,000 children. Two-thirds of the world's HIV cases are in sub-Saharan Africa.
The organisation recorded 247 million cases of malaria and nearly 1 million deaths in 2006. A child dies of the disease every 30 seconds.
In the letter, early career medics and researchers from the Voice of Young Science network highlight homeopathy projects in Kenya, Tanzania, Ethiopia, Ghana and Botswana that all offer to treat patients with HIV, malaria, diarrhoea or the flu.
"Many people in developing countries urgently need access to evidence-based medical information and to the most effective means of treating these dangerous diseases. The promotion of homeopathy as effective or cheaper makes this difficult task even harder. It put lives at risk, undermines conventional medicine and spreads misinformation," the letter says.
Raymond Tallis, emeritus professor of geriatric medicine at Manchester University, said: "The catastrophic consequences of promoting irrational and ineffective treatments for serious illnesses have been demonstrated in South Africa, where Thabo Mbeki's policies have led to an estimated 365,000 unnecessary premature deaths. The prospect of replicating this reckless behaviour elsewhere in developing countries by advocating homeopathic treatments for AIDs and other potentially lethal conditions is appalling."
Creation of cells from hair raises hope of treatments for inherited diseases
Scientists have taken a big step towards treating a rare inherited disease by creating healthy cells from flakes of skin and strands of hair plucked from patients.
The study is the first to demonstrate that it is possible to repair genetic faults in human cells and make batches of healthy replacements that could potentially be used to treat a disease.
In a report in the journal Nature, researchers describe how they took skin and hair cells from six patients with a rare inherited blood disorder called Fanconi anaemia.
The disease is caused by a genetic defect that leads to bone marrow failure and a greater risk of cancers, such as leukaemia. People who are born with Fanconi anaemia are usually diagnosed in early childhood and rarely survive beyond 30 years old.
In a three-stage procedure, the researchers used gene therapy to fix the faulty DNA in the cells they had taken from patients. Next, they used a technique called cell reprogramming to convert these cells into healthy stem cells, which are unique in being able to grow into any kind of tissue in the body.
In the final stage of the process, the researchers grew the stem cells in petri dishes into early stage bone marrow cells, which in principle could be injected into patients to treat their condition.
"We haven't cured a human being, but we have cured a cell," said Juan-Carlos Izpisúa Belmonte, who led the study at the Salk Institute for Biological Studies in La Jolla, California. "[But] in theory we could transplant it into a human and cure the disease."
The feat will raise the hopes of stem cell scientists all over the world who are working on similar techniques to treat other inherited diseases. The technique is appealing because it uses a patient's own cells, which would not be rejected by the immune system.
The California team stopped short of injecting the healthy cells back into the six patients because they are not considered safe enough to be transplanted. The reason is that harmless viruses are used in the procedure, which could cause the cells to turn into tumours. Scientists are developing alternatives that do not rely on viruses.
"[This work shows] it is possible to reprogram skin cells from these patients into stem cells in which the genetic defect has been corrected. In future it may become possible to transfer the corrected stem cells back into the patient, but much work remains to be done before this can be transferred from the lab bench to the bedside." said Chris Matthews, professor of molecular genetics at King's College London.
Chris Mason, professor of regenerative medicine at University College London, added: "There is no doubt that this paper will be the first of many to offer hope for conditions where today there is no real therapy, let alone a cure."
The study is the first to demonstrate that it is possible to repair genetic faults in human cells and make batches of healthy replacements that could potentially be used to treat a disease.
In a report in the journal Nature, researchers describe how they took skin and hair cells from six patients with a rare inherited blood disorder called Fanconi anaemia.
The disease is caused by a genetic defect that leads to bone marrow failure and a greater risk of cancers, such as leukaemia. People who are born with Fanconi anaemia are usually diagnosed in early childhood and rarely survive beyond 30 years old.
In a three-stage procedure, the researchers used gene therapy to fix the faulty DNA in the cells they had taken from patients. Next, they used a technique called cell reprogramming to convert these cells into healthy stem cells, which are unique in being able to grow into any kind of tissue in the body.
In the final stage of the process, the researchers grew the stem cells in petri dishes into early stage bone marrow cells, which in principle could be injected into patients to treat their condition.
"We haven't cured a human being, but we have cured a cell," said Juan-Carlos Izpisúa Belmonte, who led the study at the Salk Institute for Biological Studies in La Jolla, California. "[But] in theory we could transplant it into a human and cure the disease."
The feat will raise the hopes of stem cell scientists all over the world who are working on similar techniques to treat other inherited diseases. The technique is appealing because it uses a patient's own cells, which would not be rejected by the immune system.
The California team stopped short of injecting the healthy cells back into the six patients because they are not considered safe enough to be transplanted. The reason is that harmless viruses are used in the procedure, which could cause the cells to turn into tumours. Scientists are developing alternatives that do not rely on viruses.
"[This work shows] it is possible to reprogram skin cells from these patients into stem cells in which the genetic defect has been corrected. In future it may become possible to transfer the corrected stem cells back into the patient, but much work remains to be done before this can be transferred from the lab bench to the bedside." said Chris Matthews, professor of molecular genetics at King's College London.
Chris Mason, professor of regenerative medicine at University College London, added: "There is no doubt that this paper will be the first of many to offer hope for conditions where today there is no real therapy, let alone a cure."
Late-term abortion doctor shot dead inside US church
A doctor who was one of the few in the US to continue carrying out late-term abortions was shot dead in a church today.
George Tiller, 67, who had been picketed, bombed and shot in the arms in previous incidents, was killed at his church in Kansas, according to police sources.
Tiller was a controversial man, whose clinic has been the site of protests for two decades. He was shot and wounded by a protester in 1993 and someone placed a bomb on the roof of the clinic in 1986, seriously damaging the building.
Police spokesman Gordon Bassham would not confirm the victim's identity but said a 67-year-old "high-profile individual in the community" was shot and killed. He was shot at 10am in the lobby of Reformation Lutheran church in Wichita, police and city officials said.
According to the reports a white man carrying a handgun shot the doctor and then fled in a blue Ford Taurus.
"It's an unfortunate incident to happen on a Sunday morning," Wichita police captain Brent Allred told reporters. "These things should not occur at any time."
The FBI and state police were called in to help search for the gunman, whose licence plate was registered to a home in a suburb of Kansas City, 200 miles away.
The shooting came just two weeks after Barack Obama sought "common ground" over the divisive abortion debate in a controversial speech at one of America's leading Catholic universities.
The president has attempted to defuse one of the most emotive issues in US public life by arguing that while abortion should remain legal, the government should do all it can to limit unwanted pregnancies.
Tiller had been regularly targeted by abortion opponents who protested outside his clinic. Some 2,000 protesters were also arrested outside the clinic during summer-long demonstrations in 1991.
He was acquitted in March on charges that he performed 19 illegal abortions in 2003. His lawyer described the prosecution as a witch-hunt. Tiller testified during the trial that he spent years under police protection after the FBI discovered an anti-abortion hit list in 1994 that named Tiller as the top target.
The doctor also testified that he owns one of only three clinics in the US that perform late-term abortions, which are performed on foetuses that could survive outside the mother's womb.
Late-term abortions are legal in Kansas if two independent doctors agree that the mother could suffer irreparable harm by giving birth.
George Tiller, 67, who had been picketed, bombed and shot in the arms in previous incidents, was killed at his church in Kansas, according to police sources.
Tiller was a controversial man, whose clinic has been the site of protests for two decades. He was shot and wounded by a protester in 1993 and someone placed a bomb on the roof of the clinic in 1986, seriously damaging the building.
Police spokesman Gordon Bassham would not confirm the victim's identity but said a 67-year-old "high-profile individual in the community" was shot and killed. He was shot at 10am in the lobby of Reformation Lutheran church in Wichita, police and city officials said.
According to the reports a white man carrying a handgun shot the doctor and then fled in a blue Ford Taurus.
"It's an unfortunate incident to happen on a Sunday morning," Wichita police captain Brent Allred told reporters. "These things should not occur at any time."
The FBI and state police were called in to help search for the gunman, whose licence plate was registered to a home in a suburb of Kansas City, 200 miles away.
The shooting came just two weeks after Barack Obama sought "common ground" over the divisive abortion debate in a controversial speech at one of America's leading Catholic universities.
The president has attempted to defuse one of the most emotive issues in US public life by arguing that while abortion should remain legal, the government should do all it can to limit unwanted pregnancies.
Tiller had been regularly targeted by abortion opponents who protested outside his clinic. Some 2,000 protesters were also arrested outside the clinic during summer-long demonstrations in 1991.
He was acquitted in March on charges that he performed 19 illegal abortions in 2003. His lawyer described the prosecution as a witch-hunt. Tiller testified during the trial that he spent years under police protection after the FBI discovered an anti-abortion hit list in 1994 that named Tiller as the top target.
The doctor also testified that he owns one of only three clinics in the US that perform late-term abortions, which are performed on foetuses that could survive outside the mother's womb.
Late-term abortions are legal in Kansas if two independent doctors agree that the mother could suffer irreparable harm by giving birth.
Gordon Brown insists he won't stand down as election rout looms
Gordon Brown today tried to draw the poison from the ongoing scandal over MPs' expenses as a remarkable ICM poll of election voting intentions pushed Labour into third place for the first time in almost 25 years.
After 10 days of lying low, the prime minister finally attempted to establish a clear way forward, setting out a code of conduct for MPs and insisting that he would not step aside, regardless of the scale of defeat for Labour in this week's local and European elections.
Though Brown continued to insist that he would reject any cabinet attempt to persuade him to retire, one leading rebel said yesterday that the weekend's polls confirmed his belief that either "Gordon goes or the Labour party does". The rebel said he had not come across a single voice in England and Wales supporting the prime minister, though Brown continued to enjoy the support of Scottish MPs.
Brown only has a short while to inject new purpose into his party, with many MPs using the days between now and Thursday's polls to decide whether to fall in behind him or join a push to oust him.
However, asked on BBC1's Andrew Marr show today whether he would stand aside if cabinet members said it would help Labour's chances at a general election, Brown replied: "No, because I am dealing with the issues at hand. I am dealing with the economy every day."
His challenge was made more difficult yesterday with a sequence of opinion polls suggesting historically bad results in this week's elections. An ICM poll for the Sunday Telegraph of voting intentions in a general election put Labour on 22 points, 18 behind the Conservatives (on 40 points) and three behind the Liberal Democrats on 25 – the first time since 1985 that Labour has plunged so low in an ICM survey.
Brown hinted at an end to the current source of public outrage – the generous MP resettlement allowances – suggesting that the independent Kelly commission looking at MPs' salaries and due to report in the autumn would end their so-called "golden goodbyes".
He said: "I don't think that when the Kelly committee reports this thing will still be like it is." Saying that recent claims had offended his "Presbyterian conscience", he outlined a new system to "clean up" politics and all institutions that rely on public funds, including the NHS and the BBC. The prime minister hopes the plans may be inserted into the constitutional renewal bill due in parliament this year.
It is thought likely to include minimum service commitments to constituents, with those who break it facing a possible fine, being "named and shamed", or even ejected from their seats.
Brown said of the reforms: "[They] cannot be gimmicks. It's got to be serious, it has got to be ordered, and it has got to be done in a calm way. What I have seen offends my Presbyterian conscience. What I have seen is something that is appalling. I did not expect to see instance where there are clear cases which maybe have to be answered to for fraud."
The last four years' worth of receipts submitted by all MPs are currently being scrutinised by an independent committee of auditors. Brown has also set up a Labour party "star chamber" which is hearing the cases of backbenchers David Chaytor and Ian Gibson. Last week two of their colleagues, also in front of the panel, removed themselves from proceedings by announcing that they would stand down at the next general election.
At the weekend, the health secretary, Alan Johnson, who has been repeatedly tipped as preparing to step into the prime minister's shoes, warned Labour activists that the party would be the most badly affected by the expenses scandal when the election results come in on Friday.
The party faces the ignominy of losing all its county councils across England, with the Tories confident of taking control of Lancashire and Staffordshire while robbing Labour of overall control in the other two, Derbyshire and Nottinghamshire.
Backbenchers believe the prime minister's aides are planning to outfox any backbench coup and expect Brown to hold a reshuffle of his cabinet on Friday which would make more difficult the organisation of a challenge. One said: "It will be difficult to get on side ministers who have within the last few hours agreed to take part in a new government."
Meanwhile, the bullishness of the Tory leader, David Cameron, who has sought to articulate public outrage over MPs' expenses, was pricked yesterday when a Sunday newspaper alleged that he had paid off a loan of £75,000 on his London home after buying a second home in Oxfordshire on which he could claim the second home allowance.
Though he defended an arrangement whereby all of his mortgage appeared to be on the property for which he could claim allowances, he said he would accept the finding of his party's scrutiny panel.
After 10 days of lying low, the prime minister finally attempted to establish a clear way forward, setting out a code of conduct for MPs and insisting that he would not step aside, regardless of the scale of defeat for Labour in this week's local and European elections.
Though Brown continued to insist that he would reject any cabinet attempt to persuade him to retire, one leading rebel said yesterday that the weekend's polls confirmed his belief that either "Gordon goes or the Labour party does". The rebel said he had not come across a single voice in England and Wales supporting the prime minister, though Brown continued to enjoy the support of Scottish MPs.
Brown only has a short while to inject new purpose into his party, with many MPs using the days between now and Thursday's polls to decide whether to fall in behind him or join a push to oust him.
However, asked on BBC1's Andrew Marr show today whether he would stand aside if cabinet members said it would help Labour's chances at a general election, Brown replied: "No, because I am dealing with the issues at hand. I am dealing with the economy every day."
His challenge was made more difficult yesterday with a sequence of opinion polls suggesting historically bad results in this week's elections. An ICM poll for the Sunday Telegraph of voting intentions in a general election put Labour on 22 points, 18 behind the Conservatives (on 40 points) and three behind the Liberal Democrats on 25 – the first time since 1985 that Labour has plunged so low in an ICM survey.
Brown hinted at an end to the current source of public outrage – the generous MP resettlement allowances – suggesting that the independent Kelly commission looking at MPs' salaries and due to report in the autumn would end their so-called "golden goodbyes".
He said: "I don't think that when the Kelly committee reports this thing will still be like it is." Saying that recent claims had offended his "Presbyterian conscience", he outlined a new system to "clean up" politics and all institutions that rely on public funds, including the NHS and the BBC. The prime minister hopes the plans may be inserted into the constitutional renewal bill due in parliament this year.
It is thought likely to include minimum service commitments to constituents, with those who break it facing a possible fine, being "named and shamed", or even ejected from their seats.
Brown said of the reforms: "[They] cannot be gimmicks. It's got to be serious, it has got to be ordered, and it has got to be done in a calm way. What I have seen offends my Presbyterian conscience. What I have seen is something that is appalling. I did not expect to see instance where there are clear cases which maybe have to be answered to for fraud."
The last four years' worth of receipts submitted by all MPs are currently being scrutinised by an independent committee of auditors. Brown has also set up a Labour party "star chamber" which is hearing the cases of backbenchers David Chaytor and Ian Gibson. Last week two of their colleagues, also in front of the panel, removed themselves from proceedings by announcing that they would stand down at the next general election.
At the weekend, the health secretary, Alan Johnson, who has been repeatedly tipped as preparing to step into the prime minister's shoes, warned Labour activists that the party would be the most badly affected by the expenses scandal when the election results come in on Friday.
The party faces the ignominy of losing all its county councils across England, with the Tories confident of taking control of Lancashire and Staffordshire while robbing Labour of overall control in the other two, Derbyshire and Nottinghamshire.
Backbenchers believe the prime minister's aides are planning to outfox any backbench coup and expect Brown to hold a reshuffle of his cabinet on Friday which would make more difficult the organisation of a challenge. One said: "It will be difficult to get on side ministers who have within the last few hours agreed to take part in a new government."
Meanwhile, the bullishness of the Tory leader, David Cameron, who has sought to articulate public outrage over MPs' expenses, was pricked yesterday when a Sunday newspaper alleged that he had paid off a loan of £75,000 on his London home after buying a second home in Oxfordshire on which he could claim the second home allowance.
Though he defended an arrangement whereby all of his mortgage appeared to be on the property for which he could claim allowances, he said he would accept the finding of his party's scrutiny panel.
Indian growth unexpectedly strong
India's economy grew 5.8% in the first three months of the year compared with the same period last year, which was better than had been expected.
The official gross domestic product figure was down from 8.6% annual growth seen in the first quarter of 2008.
Although growth has slowed from last year, the economy is still expanding faster than most other countries.
It grew 6.7% in the full financial year, which was down from a rate of 9% in the year to the end of March 2008.
'Growth bottomed out'
"The GDP growth number justifies the claim that India is dealing with the global crisis from a position of strength," said Rupa Rege Nitsure, chief economist at Bank of Baroda in Mumbai.
"This means that growth has bottomed out, or at least the deceleration has stopped."
The figures are good news for the newly-elected Congress-led government, which has made reviving growth its top priority.
Among the sectors showing an improvement was farm output, which grew at an annualised rate of 2.7% in the first three months of 2009 having contracted 0.8% in the previous quarter.
Construction grew 6.8% in the period compared with 4.2% in the previous quarter.
But the manufacturing sector contracted an annual 1.4%, having grown 0.9% in the previous three months.
The official gross domestic product figure was down from 8.6% annual growth seen in the first quarter of 2008.
Although growth has slowed from last year, the economy is still expanding faster than most other countries.
It grew 6.7% in the full financial year, which was down from a rate of 9% in the year to the end of March 2008.
'Growth bottomed out'
"The GDP growth number justifies the claim that India is dealing with the global crisis from a position of strength," said Rupa Rege Nitsure, chief economist at Bank of Baroda in Mumbai.
"This means that growth has bottomed out, or at least the deceleration has stopped."
The figures are good news for the newly-elected Congress-led government, which has made reviving growth its top priority.
Among the sectors showing an improvement was farm output, which grew at an annualised rate of 2.7% in the first three months of 2009 having contracted 0.8% in the previous quarter.
Construction grew 6.8% in the period compared with 4.2% in the previous quarter.
But the manufacturing sector contracted an annual 1.4%, having grown 0.9% in the previous three months.
Last Titanic survivor dies at 97
Millvina Dean was nine weeks old when the liner sank after hitting an iceberg in the early hours of 15 April 1912, on its maiden voyage from Southampton.
The disaster resulted in the deaths of 1,517 people in the north Atlantic, largely due to a lack of lifeboats.
Miss Dean, who remembered nothing of the fateful journey, died on Sunday at the care home in Hampshire where she lived, two of her friends told the BBC.
Her family had been travelling in third class to America, where they hoped to start a new life and open a tobacconist's shop in Kansas.
Miss Dean's mother, Georgetta, and two-year-old brother, Bert, also survived, but her father, Bertram, was among those who perished when the vessel sank.
The family returned to Southampton, where Miss Dean went on to spend most of her life.
Despite having no memories of the disaster, she always said it had shaped her life, because she should have grown up in the US instead of returning to the UK.
She was fond of saying: "If it hadn't been for the ship going down, I'd be an American."
In 1985 the site of the wreck was discovered and, in her 70s, she found herself unexpectedly in demand on both sides of the Atlantic.
"I think sometimes they look on me as if I am the Titanic!" she said after a visit to a Titanic convention in America. "Honestly, some of them are quite weird about it."
Unimpressed
But she never tired of telling her story.
"Oh not at all. I like it, because everyone makes such a fuss of me! And I have travelled to so many places because of it, meeting all the people. Oh I wouldn't get tired of it. I'm not the type."
But she was unimpressed when divers started to explore the wreck, located 3,000m below the surface of the Atlantic, saying: "I don't believe in people going to see it. I think it's morbid. I think it's horrible."
According to BBC South transport correspondent Paul Clifton, she refused to watch James Cameron's epic film of the disaster, starring Kate Winslet and Leonardo diCaprio, fearing it would be too upsetting.
But in the last years of her life, she began struggling with monthly bills of £3,000 at her care home and had been in danger of losing her room.
She began selling some of her Titanic-related mementoes to raise funds, and in April a canvas bag from her rescue was sold at auction for £1,500. It was bought by a man from London who immediately returned it to her.
Actors Kate Winslet and Leonardo DiCaprio, who appeared in the 1998 movie Titanic, also contributed towards her care costs, along with the film's director James Cameron, by donating to the Millvina Fund which was set up by her friends
John White, managing director of exhibition company White Star Memories, and organiser of the Millvina Fund campaign said Miss Dean was always "very supportive".
She travelled to exhibitions around the country and took the time to sign autographs and write personal messages for adults and children.
"She was a lovely supportive lady and very kind-hearted," Mr White told BBC News website.
International Titanic Society President Charles Haas, from Randolph, New Jersey, met Miss Dean on numerous occasions and described her as an "effervescent person with a wonderful sense of humour".
"It is truly the end of an era," he said.
"She was a truly remarkable woman. She had a marvellous approach to life. It is almost as if God gave her the gift and she really took advantage of it."
David Lawrence, from the Nomadic Preservation Society, was a friend of Miss Dean and said he was "very sad" to hear the news.
"She was very sharp-minded and very spritely. One of those people who could make a whole room laugh with a story," he said.
Youngest passenger
Built in Belfast, the White Star Line vessel became infamous for not having enough lifeboats onboard, leading to the deaths of many passengers.
Elizabeth Gladys Dean, better known as Millvina, was the Titanic's youngest passenger, born on 2 February 1912.
Another baby on board, Barbara Joyce West, was nearly 11 months old when the liner sank. She also survived.
Barbara Joyce Dainton, as she became when she married, died in October 2007, leaving Miss Dean the last Titanic survivor
The disaster resulted in the deaths of 1,517 people in the north Atlantic, largely due to a lack of lifeboats.
Miss Dean, who remembered nothing of the fateful journey, died on Sunday at the care home in Hampshire where she lived, two of her friends told the BBC.
Her family had been travelling in third class to America, where they hoped to start a new life and open a tobacconist's shop in Kansas.
Miss Dean's mother, Georgetta, and two-year-old brother, Bert, also survived, but her father, Bertram, was among those who perished when the vessel sank.
The family returned to Southampton, where Miss Dean went on to spend most of her life.
Despite having no memories of the disaster, she always said it had shaped her life, because she should have grown up in the US instead of returning to the UK.
She was fond of saying: "If it hadn't been for the ship going down, I'd be an American."
In 1985 the site of the wreck was discovered and, in her 70s, she found herself unexpectedly in demand on both sides of the Atlantic.
"I think sometimes they look on me as if I am the Titanic!" she said after a visit to a Titanic convention in America. "Honestly, some of them are quite weird about it."
Unimpressed
But she never tired of telling her story.
"Oh not at all. I like it, because everyone makes such a fuss of me! And I have travelled to so many places because of it, meeting all the people. Oh I wouldn't get tired of it. I'm not the type."
But she was unimpressed when divers started to explore the wreck, located 3,000m below the surface of the Atlantic, saying: "I don't believe in people going to see it. I think it's morbid. I think it's horrible."
According to BBC South transport correspondent Paul Clifton, she refused to watch James Cameron's epic film of the disaster, starring Kate Winslet and Leonardo diCaprio, fearing it would be too upsetting.
But in the last years of her life, she began struggling with monthly bills of £3,000 at her care home and had been in danger of losing her room.
She began selling some of her Titanic-related mementoes to raise funds, and in April a canvas bag from her rescue was sold at auction for £1,500. It was bought by a man from London who immediately returned it to her.
Actors Kate Winslet and Leonardo DiCaprio, who appeared in the 1998 movie Titanic, also contributed towards her care costs, along with the film's director James Cameron, by donating to the Millvina Fund which was set up by her friends
John White, managing director of exhibition company White Star Memories, and organiser of the Millvina Fund campaign said Miss Dean was always "very supportive".
She travelled to exhibitions around the country and took the time to sign autographs and write personal messages for adults and children.
"She was a lovely supportive lady and very kind-hearted," Mr White told BBC News website.
International Titanic Society President Charles Haas, from Randolph, New Jersey, met Miss Dean on numerous occasions and described her as an "effervescent person with a wonderful sense of humour".
"It is truly the end of an era," he said.
"She was a truly remarkable woman. She had a marvellous approach to life. It is almost as if God gave her the gift and she really took advantage of it."
David Lawrence, from the Nomadic Preservation Society, was a friend of Miss Dean and said he was "very sad" to hear the news.
"She was very sharp-minded and very spritely. One of those people who could make a whole room laugh with a story," he said.
Youngest passenger
Built in Belfast, the White Star Line vessel became infamous for not having enough lifeboats onboard, leading to the deaths of many passengers.
Elizabeth Gladys Dean, better known as Millvina, was the Titanic's youngest passenger, born on 2 February 1912.
Another baby on board, Barbara Joyce West, was nearly 11 months old when the liner sank. She also survived.
Barbara Joyce Dainton, as she became when she married, died in October 2007, leaving Miss Dean the last Titanic survivor
Pakistan city centre 'destroyed'
The scale of the war damage to the main city in the Swat valley has become clear, as fears are expressed about the humanitarian situation in the region.
Taliban rebels were driven out of Mingora on Saturday by Pakistan government troops.
The defence secretary says operations in the whole Swat valley region should end in the next few days, though military chiefs are more cautious.
A BBC correspondent who went to Mingora has reported widespread damage.
Rifatullah Orakzai, reporting for the BBC's Urdu Service, said that all the buildings and shops in the town square had been completely destroyed.
However, local people have now been able to seek supplies in the town's market after the lifting of a curfew.
Pakistan's army said essential services were being restored to the city.
The International Red Cross said it was "gravely concerned" by the humanitarian situation in Swat.
Water and electricity were not available, there was no fuel for generators, most medical facilities had stopped operating and food was scarce, it said.
"The people of Swat need greater humanitarian protection and assistance immediately," said Pascal Cuttat, head of the organisation's delegation in Pakistan.
Fawad Hussein, of the United Nations office for the co-ordination of humanitarian affairs, said:
"Since there is no electricity supply, the wells are not working. People are forced to use alternative water sources, which is causing water-borne diseases. There is no electricity in any of the health facilities."
Some 2.5 million people have fled their homes since military operations began in Swat more than a month ago.
Army operations
Earlier, the Pakistani Defence Minister, Syed Athar Ali, told a meeting of Asian nations in Singapore that only "5% to 10% of the job" of clearing the Taliban from the Swat valley remained.
Syed Athar Ali said the Swat operations had 'almost met complete success'
But an army spokesman said it was not possible to predict when the military operation would be completed.
Meanwhile, 40 militants were killed in an attack on a Pakistani army base near the Afghan border, officials said
Officials said four soldiers were also killed in an eight-hour gun battle at the camp in South Waziristan, a Taliban stronghold.
"Militants came in force and attacked a paramilitary camp and fighting lasted for eight hours," an intelligence official in the region told Reuters news agency.
'Elusive enemy'
The army has said it will pursue "hardcore" rebels after recapturing Mingora, the main town in Swat.
Mingora was home to 300,000 people before the fighting began.
"The main cities in the Swat valley stand clear today. The operation is being conducted in the countryside to the right and left of the valley and to the North... so the operation is ongoing and it will take a little more time," army spokesman Maj Gen Athar Abbas told the BBC.
But while Maj Gen Abbas said the remaining militants were being hunted down, he could not confirm when the army's operation in the area would be complete.
"It's difficult to give a timeline because this is an elusive enemy that has strongholds in the countryside," he said.
The US is giving full backing to the Pakistani operations, which are linked to its own offensive against the Taliban in Afghanistan
Taliban rebels were driven out of Mingora on Saturday by Pakistan government troops.
The defence secretary says operations in the whole Swat valley region should end in the next few days, though military chiefs are more cautious.
A BBC correspondent who went to Mingora has reported widespread damage.
Rifatullah Orakzai, reporting for the BBC's Urdu Service, said that all the buildings and shops in the town square had been completely destroyed.
However, local people have now been able to seek supplies in the town's market after the lifting of a curfew.
Pakistan's army said essential services were being restored to the city.
The International Red Cross said it was "gravely concerned" by the humanitarian situation in Swat.
Water and electricity were not available, there was no fuel for generators, most medical facilities had stopped operating and food was scarce, it said.
"The people of Swat need greater humanitarian protection and assistance immediately," said Pascal Cuttat, head of the organisation's delegation in Pakistan.
Fawad Hussein, of the United Nations office for the co-ordination of humanitarian affairs, said:
"Since there is no electricity supply, the wells are not working. People are forced to use alternative water sources, which is causing water-borne diseases. There is no electricity in any of the health facilities."
Some 2.5 million people have fled their homes since military operations began in Swat more than a month ago.
Army operations
Earlier, the Pakistani Defence Minister, Syed Athar Ali, told a meeting of Asian nations in Singapore that only "5% to 10% of the job" of clearing the Taliban from the Swat valley remained.
Syed Athar Ali said the Swat operations had 'almost met complete success'
But an army spokesman said it was not possible to predict when the military operation would be completed.
Meanwhile, 40 militants were killed in an attack on a Pakistani army base near the Afghan border, officials said
Officials said four soldiers were also killed in an eight-hour gun battle at the camp in South Waziristan, a Taliban stronghold.
"Militants came in force and attacked a paramilitary camp and fighting lasted for eight hours," an intelligence official in the region told Reuters news agency.
'Elusive enemy'
The army has said it will pursue "hardcore" rebels after recapturing Mingora, the main town in Swat.
Mingora was home to 300,000 people before the fighting began.
"The main cities in the Swat valley stand clear today. The operation is being conducted in the countryside to the right and left of the valley and to the North... so the operation is ongoing and it will take a little more time," army spokesman Maj Gen Athar Abbas told the BBC.
But while Maj Gen Abbas said the remaining militants were being hunted down, he could not confirm when the army's operation in the area would be complete.
"It's difficult to give a timeline because this is an elusive enemy that has strongholds in the countryside," he said.
The US is giving full backing to the Pakistani operations, which are linked to its own offensive against the Taliban in Afghanistan
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