More Layoffs as Companies Reach `Last Resort" Cost-Cutting; Blagojevich Scandal
HEIDI COLLINS, CNN ANCHOR: A recession ripple effect hits thousands more workers today. Home construction slowdown leads to Home Depot and Caterpillar layoffs. Plus, putting a stamp on policy. Live from the White House, President Obama announces shifts on energy and the environment. It's Monday, January 26th, I'm Heidi Collins, you are in the CNN NEWSROOM. The nation's battered economy and a new bobby blow to many American families. Over the past couple of hours we've learned of massive new job cuts. Tens of thousands of paychecks are disappearing as companies struggle to survive. CNN's Christine Romans joins us now with a closer look at these grim developments. Christine, we've been talking for a long time about a lot of companies having this be a last resort, actually cutting the jobs and cutting their expenditures in other ways.</s>CHRISTINE ROMANS, CNN CORRESPONDENT: That's right. And for many of us, last resort is now here. Why are we hearing this now, Heidi? It's because its earnings reporting season. So many of these companies are coming out with their report on the fourth quarter. How they did? What their revenue was? What their profit was and what they expect for 2009? And because the outlook is so grim or at least uncertain, companies are saying they're having to layoff workers. Among them Caterpillar, it started the year as a blockbuster year for Caterpillar, really. And then things changed quite quickly. And this company says while it is optimistic - James Owen, the CEO there, says it is optimistic about the stimulus and what the governments around the world have been trying to do, it's just too uncertain in 2009 and they're cutting 20,000 workers. Sprint Nextel is cutting 8,000, announcing that this morning. Also within the last couple of hours, Home Depot says it is cutting 7,000 workers. It's closing its Home Depot Expo stores, some 34 of those and some other concepts that weren't really its core, Orange Big Box Store. In terms of how you're going to notice a difference at Home Depot, those will not be their Home Depot front line people that you talk to. Those are not the people losing their jobs, but other people in the business. And also John Deere laying off 700. We just heard that the oil services company Sclumberger is laying off 5,000 workers. So it's coming in dribs and drabs. The steady, steady list of companies, Heidi, that are cutting jobs from what they've seen in the fourth quarter and also what they see when they're looking forward. They just are cutting the head count.</s>COLLINS: Yes and speaking of looking forward, there's a sign the recession is getting worse? I mean, clearly not a sign that things are getting better, at least not right now.</s>ROMANS: Well, this is a good survey here we've got a business economists. So these are the economists who don't work in academia, who don't work in think tanks, who don't work in government. These are the people who work at the companies and the industries. And this is what they're saying. 39 percent say they expect their industry to have more job cuts in the next six months. 47 percent say demand is falling. A majority of all of these business economists say that they expect companies to continue to layoff workers or to not hire workers and indeed to hoard money, to hoard their cash to keep the money in the bank and not spend it on, you know, on technology and on expansion, that they're just trying to kind of hunker down here for the near term. So that's what the people who are advising CEOs, these are the economists who are right there in business and that's what they see going forward.</s>COLLINS: Yes, understood. All right. CNN's Christine Romans. Thank you. And more big job cuts also coming from Global Bank and insurance provider ING Group. The Dutch company says it is slashing 7,000 positions and its CEO is stepping down after posting its first ever quarterly profit loss. Quick check of the Dow, once again, up positive three digits now. As you can see, the Dow Jones industrial averages up about 110 points or so. We'll continue to watch those numbers and hope they stay that way throughout the day. A quick look at day seven now for the Obama administration. This morning, the president took part in a daily economic briefing and, as we've been saying, he'll make remarks just minutes from now on jobs, energy independence, and climate change. Then at 1:30 Eastern, the daily White House briefing by press secretary Robert Gibbs. Fixing the economy, it is job one for president Obama but will lawmakers agree to his massive recovery plan? That debate heating up as the vote draws near. CNN's congressional correspondent, of course, Brianna Keilar on Capitol Hill now to set the stage for us. And that's true, as we get closer to the vote, tensions rise.</s>BRIANNA KEILAR, CNN CONGRESSIONAL CORRESPONDENT: Yes, tensions rising, President Obama is dealing with the divided Congress here today, Heidi. House republicans not on board with this economic stimulus package. And there is a vote scheduled or expected to happen on Wednesday. This package, $825 billion, 1/3 of it is tax cuts, 2/3 of it is spending, infrastructure and other projects, and you have House republicans saying that's not enough tax cuts, that's too much on spending. They're now seizing on certain spending projects calling it pork, you know, money for the National Endowment for the Arts money, money for the improvement of the National Mall. And summing it all up yesterday was House republican leader John Boehner.</s>REP. JOHN BOEHNER (R), GEORGIA: Our concerns about the plan we see from democrats on Capitol Hill is just, it has an awful lot of wasteful spending and slow-moving spending. That won't create jobs and won't help preserve jobs in America.</s>KEILAR: Republicans, though, being very strategic in how they characterize their opposition to the economic stimulus package. They say they are happy to be working with President Obama, they're glad that he's open to their input and they are meeting with him here on Capitol Hill tomorrow, Heidi. But they say congressional democrats are leaving them out of the equation. Democrats on the other hand say no, that's not the case. We've given you a forum where you can express your ideas. But the fact is, Heidi, this is a democratic majority in the House, in particular where they only need a simple majority and they're wielding that like a big stick.</s>COLLINS: Oh, yes.</s>KEILAR: This vote on Wednesday. And at this point republicans saying we're not going to be on board unless you make some major changes and no indications by democrats about what changes they would accept.</s>COLLINS: And of course, there's also the big issue between democrats or republicans on how fast this money's going to be spent. Because we've heard so much about infrastructure and other projects. The question obviously then, how fast will it be spent on those things?</s>KEILAR: Republicans say it's not going to be spent fast enough and therefore it's not going to be creating jobs. They're holding up a report by the nonpartisan Congressional Budget Office. It's really an assessment, a partial assessment that came out last week that showed less than half of the spending part of this bill would be rolled out in the next two years. But now democrats are holding up a letter from Peter Orzag, the president's director of the Budget saying that actually in a year and a half more than 75 percent of the spending money will be rolled out. So it depends who you're talking to, Heidi and what they're pointing to.</s>COLLINS: Yes, as always, I guess, when we're talking about Washington. Brianna Keilar, thanks so much on Capitol Hill this morning.</s>KEILAR: You're welcome.</s>COLLINS: Minutes from now, at 10:30 Eastern, you can hear President Obama's remarks on jobs, energy independence, and climate change. We're going to be hearing it live right here in the CNN NEWSROOM. Illinois Governor Rod Blagojevich makes good on his promise to boycott his impeachment trial. He's actually hundreds of miles away. CNN's Susan Roesgen following the developments from Springfield, Illinois. He said he wasn't going to be there and he's not.</s>SUSAN ROESGEN, CNN CORRESPONDENT: No, he's not going to be here, Heidi. He is, in fact, making the rounds of the talk shows. OK.</s>COLLINS: Go ahead, Susan.</s>GOV. ROD BLAGOJEVICH (D), ILLINOIS: They hang me under these rules that prevent due process. They're hanging the 12 million people of Illinois who twice have elected a governor. Now, they may be for or against me, they may like me or not, but the people of Illinois have every right to expect that the decision they've made when they've chosen a governor, if he or she is going to be removed from office, that the process ought to at least have fundamental fairness and have all of the safeguards that our constitution guarantees to all of our citizens. Whatever happened to the presumption of innocence? It's been nothing but a frenzy to just assume certain allegations are true and then rush me out of office. And I believe because political figures in Illinois are just waiting to get me out of the way to raise the income tax by either 66 percent or 33 percent during a time of economic depression.</s>ROESGEN: OK, Heidi, what I was starting to say there is that the governor is not going to be here in Springfield, Illinois, the state capital. He's making the rounds of morning talk shows in New York. He's going to be on "Larry Ling Live" later. He says that this is a sham in his words. He says that there's no way that he could get a fair hearing. He also says there that he believes that there's some sort of conspiracy against him that other politicians don't like him because he opposes raising taxes, he says. So what's expected to happen now here Heidi is that the state senate will probably will go ahead and kick him out of office. They just need a simple majority. Probably going to hear a few witnesses, take a little bit of testimony. But this thing could be wrapped up in a couple of days and then he will be out of office.</s>COLLINS: Yes and it's been going on, at least it feels like oh, for so long. Susan Roesgen there for us live this morning, Springfield, Illinois. Thank you, Susan. You can hear the governor's side of the story as Susan was mentioning right here on CNN. He'll be live on "Larry King Live" at 9:00 Eastern. Minnesota republican Norm Coleman, he isn't giving up his U.S. Senate seat without a fight. He is challenging an election recount that put democrat Al Franken ahead by 225 votes. A three judge panel begins hearing that case today. Coleman's attorneys argue that more than 1/3 of 12,000 absentee ballots rejected on election day, were tossed in air. They also claim some of those ballots were counted twice which worked in Franken's favor. Living in fear, a community on edge after more than a dozen suspicious fires, but who is behind them?