Monday, June 1, 2009

The Ad Campaign for a ‘New’ G.M.

Can General Motors make up for decades of mistakes and misfires in a minute?

That is the ambitious goal of a 60-second commercial to begin running on television on Wednesday. The spot is already available on a Web site (gmreinvention.com) and on YouTube.

The commercial is part mea culpa, part gauzy paean to the concept of a “new” General Motors. Although portions seem self-serving, there are moments when a viewer may think, “Hey, maybe G.M. deserves another chance.”

Such moments come when the commercial speaks plainly. “Let’s be completely honest,” an announcer says. “No company wants to go through this.”

“General Motors needs to start over, in order to get stronger,” he adds.

Other effective moments come when the announcer says things G.M. ought to have said years ago.

“There was a time when eight different brands made sense,” the announcer says. “Not any more.” Critics have contended that General Motors was spreading its marketing resources too thin across too many nameplates.

“There was a time when our cost structure could compete worldwide,” the announcer says. “Not any more.” That is a reference to the gap in production costs between G.M. and its overseas rivals.

Other elements are overly slick for an apologetic commercial. There is too much use of the echo effect that writers hope will elevate prose to poetry. For instance, the announcer intones: “This is not about going out of business. This is about getting down to business.”

And the imagery on screen veers from powerful to bland. There is a wonderful zoom-in on the fist of the boxer Joe Louis that stands on Jefferson Avenue in downtown Detroit, as if to say, “Pow! Bam! We’re coming back!”

But there are also generic photographs — a moon landing, sports teams, a butterfly, a horse race, an American flag — that could have come from any feel-good corporate image campaign.

The commercial was created by Deutsch, an advertising agency owned by the Interpublic Group of Companies that handles assignments for G.M. like producing campaigns for the (soon to be divested) Saturn division.

Boy chosen by Dalai Lama turns back on Buddhist order

As a toddler, he was put on a throne and worshipped as by monks who treated him like a god. But the boy chosen by the Dalai Lama as a reincarnation of a spiritual leader has caused consternation – and some embarrassment – for Tibetan Buddhists by turning his back on the order that had such high hopes for him.

Instead of leading a monastic life, Osel Hita Torres now sports baggy trousers and long hair, and is more likely to quote Jimi Hendrix than Buddha.

Yesterday he bemoaned the misery of a youth deprived of television, football and girls. Movies were also forbidden – except for a sanctioned screening of The Golden Child starring Eddie Murphy, about a kidnapped child lama with magical powers. "I never felt like that boy," he said.

He is now studying film in Madrid and has denounced the Buddhist order that elevated him to guru status. "They took me away from my family and stuck me in a medieval situation in which I suffered a great deal," said Torres, 24, describing how he was whisked from obscurity in Granada to a monastery in southern India. "It was like living a lie," he told the Spanish newspaper El Mundo. Despite his rebelliousness, he is still known as Lama Tenzin Osel Rinpoche and revered by the Buddhist community. A prayer for his "long life" still adorns the website of the Foundation to Preserve the Mahayana Tradition, which has 130 centres around the world. The website features a biography of the renegade guru that gushes about his peaceful, meditative countenance as a baby. In Tibetan Buddhism, a lama is one of a lineage of reincarnated spiritual leaders, the most famous of which is the Dalai Lama.

According to the foundation biography, another leader suspected Torres was the reincarnation of the recently deceased Lama Yeshe when he was only five months old. In 1986, at 14 months, his parents took him to see the Dalai Lama in Dharamsala, India. The toddler was chosen out of nine other candidates and eventually "enthroned".

At six, he was allowed to socialise only with other reincarnated souls – though for a time he said he lived next to the actor Richard Gere's cabin.

By 18, he had never seen couples kiss. His first disco experience was a shock. "I was amazed to watch everyone dance. What were all those people doing, bouncing, stuck to one another, enclosed in a box full of smoke?"

General Motors declares bankruptcy – the biggest manufacturing collapse in US history

America's biggest carmaker, General Motors, declared itself bankrupt today in a legal filing at a federal courthouse in downtown Manhattan, kicking off the biggest industrial insolvency in US history.

GM filed for Chapter 11 protection against its creditors' demands at 8am local time after racking up losses of $81bn (£50bn) over four years, putting a veteran bankruptcy judge, Robert Gerber, in charge of the future of 235,000 employees worldwide.

Speaking in Washington a few hours after the filing, Barack Obama said the GM restructuring plan was "tough but fair". He acknowledged that General Motors stakeholders – its parts suppliers, dealers, debt-holders, shareholders, workers and retirees – were making tough sacrifices to keep the company afloat.

"I want to be honest with you: building a leaner GM will come at a cost," he said. "You will have to make a sacrifice for the next generation so that our children can grow up in an America that still makes things."

Based in Detroit, the 101-year-old company is a stalwart of the US manufacturing base, producing vehicles with brands such as Chevrolet, Cadillac, Hummer, Opel and Vauxhall. Its filing comes a month after its smaller rival Chrysler declared bankruptcy, leaving two of the top three American motor manufacturers under court protection.

GM will continue to manufacture and sell cars under bankruptcy and the US government is hoping for a swift, "surgical" process under which the company will emerge in smaller, streamlined form within 60 to 90 days.

Obama said the massive reorganisation of GM would leave the US government holding 60% of the company's equity. But it was necessary to preserve an iconic symbol of American business and maintain a viable US auto industry.

At the White House, flanked by his economic advisers and cabinet secretaries, Obama reiterated that the government was a "reluctant" shareholder in General Motors, but said the alternative – extending more loans – would burden the new company with debt and would hinder its re-emergence as a viable company.

"I recognise that this may give some Americans pause," he said. "We're making these investments not because I want to spend the American people's tax dollars but because I want to protect them."

GM is the largest industrial corporation ever to go bankrupt in the US and the third-largest bankruptcy of any sort, behind the investment bank Lehman Brothers and the telecommunications firm WorldCom.

GM's chairman, Kent Kresa, said the board had authorised bankruptcy‚ "with regret that this path proved necessary despite the best efforts of so many".

He did his best to put a positive spin on the move, describing it as a "new beginning" for the company: "A court-­supervised process and transfer of assets will enable a new GM to emerge as a stronger, healthier, more focused and nimbler company with a determination not to just survive but to excel."

Judge Gerber, who will rule on the competing claims of GM's creditors, is an old hand at high-profile insolvencies, having handled the bankruptcy of firms such as Adelphia and Global Crossing.

The carmaker has received $19bn of emergency aid from the treasury to keep it afloat and a further $30bn of government funding is likely to be forthcoming to see it through bankruptcy.

In return for its support, the Obama administration is likely to get a 60% ownership stake in the company. Canada's government, which is contributing billions of dollars in further help, will get 12.5% with unions and bondholders holding the rest.

Until it was overtaken by Toyota last year, GM was the largest carmaker in the world. But the company has been hobbled by a collapse in demand for new vehicles from the US market, where industry-wide sales of cars have dropped from 17m a year to fewer than 10m.

David Cole, chairman of the Michigan-based Center for Automotive Research, said last year's soaring fuel prices proved to be the final straw, pushing customers towards smaller, more fuel-efficient vehicles from Asian manufacturers.

"The financial meltdown in the economy has driven the auto industry into depression," he said. "We have an auto depression, not a recession."

To restore profitability, GM's chief executive, Fritz Henderson, has made it clear that cuts will need to be deep and permanent. He is selling chunks of the company dubbed "old GM", including its European operation, which employs 5,500 people making Vauxhall cars in Britain. Brands such as Saturn, Saab and Hummer are on the block and Pontiac, a sporty "muscle car" marque, is to close.

GM's US manufacturing workforce is to shrink from 113,000 three years ago to just 38,000 by 2011. Scores of factories across the US are shutting for an extended summer break and GM is slashing its network of dealership showrooms by 40%.

The extent of the government's intervention in the motor industry has alarmed business organisations. Thomas Donohue, president of the US Chamber of Commerce, warned today that GM would not prosper if it was run by the Obama administration and the United Auto Workers union.

"If members of Congress, along with government officials from the United States to Germany to Canada, are allowed undue influence over management's decisions, then you can write this down: these companies will not return to profitability and their survival will be seriously challenged," said Donohue.

Obama's auto industry taskforce had initially hoped that GM could be kept afloat without going through bankruptcy. But bondholders, who are owed $27bn by the carmaker, have been reluctant to swap their debt for a small equity stake.

Over the weekend, 54% of these bondholders indicated that they were willing to accept an improved deal under which they could eventually get up to 25% of GM, stoking optimism that the bankruptcy could proceed swiftly, without a long, drawn-out fight over assets that risked pushing the company into liquidation.

The 24-page bankruptcy filing, which gives GM's address as 300 Renaissance Centre, Detroit was lodged under the name of a Manhattan vehicle dealer, Chevrolet-Saturn of Harlem, which is owed money by the carmaker.

A list of GM's largest debtors is topped by the Wilmington Trust Company of Delaware, which represents bondholders owed $22.7bn, followed by the United Auto Workers union on behalf of employees owed $20.5bn.

Other claims include demands for money from the car rental firms Avis and Enterprise, the French advertising agency Publicis, the computer maker Hewlett-Packard, the oil firm Exxon Mobil and Lakshmi Mittal's steel corporation, Arcelor Mittal.

Seven days of torture that will sink – or save – Brown's premiership

Gordon Brown's aides believe he needs to endure only one more week of torture over his leadership before the Labour party and the media realise he is staying until the election, and he can then start to be judged fairly alongside David Cameron. But Brown also knows the next few days could be the most perilous for his premiership since he took office in May 2007.

He needs to seize the initiative quickly by resolving sharp differences of view within the cabinet on a full programme of constitutional reform.

He needs to navigate a fraught reshuffle, probably on Friday, that could see changes to the chancellorship and the Home Office, two of three great offices of state.

And he will have to manage a tense party as it goes through a drawn-out 72 hours of escalating panic in the face of crushing reverses in the county council elections on Thursday night and throughout Friday. That panic will reach a crescendo on Sunday night as the European election results trickle through, and Labour faces the prospect of coming fourth behind not just the Conservatives and the Liberal Democrats, but even Ukip.

As one minister said yesterday: "The actual level of the Labour vote will make a massive categorical difference. It depends if it is 15%, 25% and 35%. The actual level makes a world of difference to Gordon and the party's mood."

All the while, Brown will have to show a steadier hand in response to the daily drip of allegations coming out of the Daily Telegraph. He will not want a repeat of yesterday, when the chancellor, Alistair Darling, and Brown both put out statements insisting the Telegraph's latest allegations were wrong, only for the denial to be retracted within two hours.

But the prime minister reckons if he can chart these perilous waters intact, he will be in the clear and can set out what he describes as a national plan for Britain.

On expenses and the constitution, the cabinet will meet tomorrow to discuss a paper that offers a twin-track strategy. Harriet Harman, leader of the house, and Jack Straw, the justice secretary, will propose reforms to strengthen the role of backbenchers in relation to the executive, both through changes to parliament and through a constitutional renewal bill. It will cover the royal prerogative, war-making powers, the attorney general and a new code of conduct for MPs.

There will also be proposals to elect select committee chairs and remove the executive veto over private members' bills, and new powers for backbenchers to put issues to the vote in the Commons. It is likely that a draft House of Lords reform bill will also be published.

Plans are still being discussed for a citizens' summit, a constitutional convention, a panel of outside experts who would look at electoral reform, a bill of rights, and a written constitution.

Brown can probably resolve the differences in the cabinet over constitutional reform, even if there is frustration at the slowness of the government reaction.

The greater problem is the imminent reshuffle. But as one cabinet aide admitted yesterday: "Normally reshuffles are displays of prime ministerial power and patronage, but this could be the opposite. Some ministers could walk out or resign, and then the whole thing unravels."

The betting inside cabinet circles is that the reshuffle will take place on Friday or Saturday between the close of polls and the European election rout. Brown at that point will be on the brink of a disaster, but its full scale will not be known, thus de­stabilising any cabinet members thinking of mounting a coup.

Similarly, those on the backbenches wanting to oust Brown – the most likely course of events – will probably have to raise the standard of rebellion after the polls close on Thursday night, but will not know if the voters have provided them with the ammunition they need. The rebels will have to build momentum over the coming weekend – and all in the face of a display of "prime ministerial power" over his cabinet colleagues.

But that depends on the reshuffle going smoothly.

Some changes will be easy enough. ­Jacqui Smith, the home secretary, looks politically broken and no longer has the stomach to stay in the cabinet after her husband took the hit for the purchase of pornographic videos on expenses. She is probably reconciled to losing her marginal seat. Similarly, Geoff Hoon, the transport secretary, may fear he is expendable.

But axing Hazel Blears, the feisty communities secretary, would be more difficult. She feels aggrieved that she was singled out by Brown for behaving unacceptably over the designation of her second homes when she felt other cabinet ministers had acted similarly. If sacked, she could be a difficult backbench voice.

Even more, Brown is in a dilemma over Darling. He has been a loyal ally for a generation, and taken many hits on behalf of Brown over the last year. But there is dissatisfaction inside No 10 at the way in which Darling fails to attack the Tories convincingly on the economy. Ed Balls, the children's secretary, would be much more aggressive. If Balls returns to the Treasury, Brown would have the figure he most trusts alongside him in the vital 12 months before the election .

The counter-argument is that if Brown wants to fight the next election on the basis that the government steered the economy through the recession, someone will have to explain why it was necessary to remove the chancellor midway through. Equally, Brown will have to explain why Balls, Brown's chief economic adviser at the Treasury during the development of the credit bubble, is the man to take Britain back to economic growth.

At the moment, the chances of Brown surviving look strong. There is an inertia on the backbenches, and a belief bordering on faith that Brown has hit rock bottom, and will again show his extraordinary capacity to survive adversity. But it is going to be a week that will test Brown like never before.

Testicular cancer genetic advance

Researchers have for the first time found inherited genetic factors which raise the risk of testicular cancer.

A UK team found many testicular cancer patients shared common DNA variants on chromosomes five, six and 12 that healthy men did not have.

This finding was echoed in a separate US study in the same journal, Nature Genetics, which highlighted two of the same variations.

Both studies raise hopes of better treatments and diagnostic tests.

The UK team, from the Institute of Cancer Research, compared the profile of 730 testicular cancer patients with those of healthy men
They found men who inherit any of the three genetic variants have a raised risk of the disease.

Those who carry the variant most closely linked to the disease have two to three times the risk of the general population.

And inheriting all three variants raises the risk by up to fourfold.

However, it is still the case that only a small proportion of men who carry the higher risk variations will actually develop testicular cancer.

Researcher Dr Elizabeth Rapley said: "We have known for some time that men whose father, brothers or sons had testicular cancer are much more likely to get it themselves and we have been searching for this genetic link.

'More to be found'

"We have identified three genetic factors linked to an increased risk of testicular cancer. We believe there are more still to be found and we are working on identifying the rest."

Professor Mike Stratton, from the Wellcome Trust Sanger Institute, also worked on the study.

He said: "By combining these genetic risks with other known risk factors it may be possible in future to identify men who are at high risk of developing testicular cancer, particularly those who have a brother or father already affected by the disease.

"This may allow early detection or prevention.

All three genetic variants uncovered by the study were found near genes involved in the survival and development of cells which go on to form sperm.

The finding suggests that disrupting the work of these genes may be one mechanism by which cancer is able to grow.

More tests due

One of the variants was found in a gene called KITLG, which is also known to play a role in skin pigmentation.

The higher risk variant was found much more commonly in white men, and may explain why they seem to have a higher risk of testicular cancer.

Ed Yong, of the charity Cancer Research UK, said: "While more than 95% of testicular cancer patients are successfully treated, finding genes that increase the risk of this cancer is important.

"It tells us more about its basic biology and presents new opportunities to prevent, diagnose and treat the disease in those men most at risk - men aged under 50."

Previously, a small US study found a specific gene was more active in some types of testicular cancer cells, but did not establish whether it was inherited, or triggered only in cancer cells after the disease started to develop.

In the latest study, the researchers established the key genetic variations were found in every cell of the patients' bodies - clear evidence that they were definitely inherited.

The researchers are now looking for up to 3,000 men who have had testicular cancer to participate in the study to identify more genetic risk factors.

Passenger nationalities revealed

Most of the passengers on board the Air France plane which has disappeared over the Atlantic were Brazilians and French nationals, airline officials said.

Air France confirmed 61 French and 58 Brazilian passengers were among the 216 passengers on board flight 447.

A list provided by Brazil's authorities showed 26 Germans were also on board as well as nine Chinese and nine Italians.

Six Swiss, five British, five Lebanese and four Hungarians were on the flight from Rio de Janeiro to Paris.

Those on board also included three Irish, three Norwegians, three Slovaks, two Americans two Moroccans, as well as individuals from Argentina, Austria, Belgium, Canada, Croatia, Demark, the Netherlands, Estonia, the Philippines, The Gambia, Iceland, Romania, Russia, South Africa, Sweden and Turkey.

No details have yet been given about the 12 crew.

Phone line

"Air France expresses its deepest sympathy to the relatives and friends of the passengers and crew who were on board this flight," the airline said in a statement on its website.

It said it was doing its utmost to support relatives and friends, and had set up counselling services at both the French and Brazilian airports.

A special phone line has been set up for relatives and friends.

In France, the number is 0800 800 812. In Brazil, the number is 0800 881 20 20 and for those in other countries the number is 0033 1 57 02 10 55.

The Michelin tyre company earlier said three of its executives were on the flight, including the president of its South American operations, Luiz Roberto Anastacio.

It is also believed that Erich Heine, an executive board member at the German steelmaker ThyssenKrupp, was on board.

He is also the chairman of the company's Brazilian unit - Companhia Siderurgica do Atlantico - a joint venture between ThyssenKrupp and a Brazilian mining company.

Atlantic searched for lost plane

France and Brazil are searching waters deep in the Atlantic for an airliner carrying 228 passengers and crew which disappeared in a storm on Monday.

France believes there is little hope of finding survivors from among those aboard the Air France Airbus, which was flying from Rio de Janeiro to Paris.

An automatic report of a short circuit was the last communication it put out before vanishing over the ocean.

French officials believe it may been disabled by a storm.


See a map of the plane's route

Staff at Charles de Gaulle and Rio's Jobim international airport have been trying to help relatives and friends of the 228 missing people.

Most of the missing people are Brazilian or French but they include a total of 32 nationalities. Five Britons and three Irish citizens are among them.

If no survivors are found, it will be the worst loss of life involving an Air France plane in the firm's 75-year history.

French and US sources have ruled out terrorism as the cause of the plane's loss.

US spy technology

Plane crews have narrowed their search to a zone of a few dozen nautical miles half-way between Brazil and west Africa, said Pierre-Henry Gourgeon, chief executive of Air France.


TIMELINE

Flight AF 447 left Rio at 1900 local time (2200 GMT) on Sunday
Airbus A330-200 carrying 216 passengers and at least 12 crew
Contact lost 0130 GMT
Missed scheduled landing at 1110 local time (0910 GMT) in Paris


Timeline of Flight AF 447
Air disasters timeline
Their work may be aided by the Airbus's Argos beacons, which will emit signals for several days, he added.

A French reconnaissance plane based in Dakar, Senegal, was due to reach the suspected crash area on Monday evening.

It was to be followed by two other French planes based in Dakar, and a naval vessel currently cruising in the Gulf of Guinea, several days' sailing away. Spain and Senegal also despatched planes to help in the search.

French President Nicolas Sarkozy confirmed that his government was approaching Washington for help.

An unnamed aide to French Defence Minister Herve Morin told AFP news agency earlier that France had contacted the Pentagon to "obtain access to its satellite observation capability and listening stations which might just be able to supply us with some clues".

Brazil has sent out seven air force planes and three naval ships to help in the search, far off the north-eastern Brazilian coast.

"We want to try to reach the last point where the aircraft made contact, which is about 1,200km [745 miles] north-east of Natal [in Brazil]," said Brazilian air force spokesman Col Jorge Amaral.

An unnamed air force spokesman told AFP news agency the search was focusing on a remote area close to where the last radio contact with the plane was recorded.

"This zone is on the line between the jurisdiction of Brazilian air control and that of Dakar in Senegal," he added.

Maria Celina Rodrigues, the Brazilian consul in Paris, accepted that the depth of the ocean would make it difficult for searchers.

"They are hoping they can find debris, pieces, lifejackets that eventually float, but that takes some time and they are coordinating with weather services and with officials overseeing maritime currents to try and narrow down the area," she told the Associated Press.

'She was on the plane'

The plane's automatic report was generated at 0214 GMT on Monday, about four hours after Flight AF 447 left Rio de Janeiro, and as it was heading through turbulence towards the west African coast
A succession of a dozen technical messages" showed that "several electrical systems had broken down" which caused a "totally unprecedented situation in the plane", said Mr Gourgeon.

"It is probable that it was shortly after these messages that the impact in the Atlantic came," he told reporters at Charles de Gaulle airport, where the airliner had been due to land.

Flight AF 447 was flying at an altitude of 10,670m (35,000ft) shortly before it went missing.

A meteorologist who spoke to the Associated Press said tropical thunderstorms in the Atlantic could tower up to 15,240m (50,000ft).

"At the altitude it was flying, it's possible that the Air France plane flew directly into the most charged part of the storm - the top," said Henry Margusity, senior meteorologist for AccuWeather.com.

French officials have stressed that the plane's captain was very experienced, clocking up more than 11,000 hours of flight.

French President Nicolas Sarkozy personally met relatives and friends of passengers at a crisis centre set up in Charles de Gaulle airport.

"I told them the truth," he said afterwards. "The prospects of finding survivors are very small."

At Rio's Jobim airport, shocked relatives were ushered into a closed lounge, away from the media and into the care of psychologists and doctors.

One woman, Vasti Ester van Sluijs, told AFP she had jumped into a taxi as soon as she heard news that the plane was missing.

"My daughter Adriana Francesca was on the plane," she said.