March 2009 Current Events: Business/Science News
Here are the key events in business and science news for the month of March 2009.
- A.I.G. Posts $61 Billion Loss, Receiving More Bailout Funds (March 2): Insurance giant American International Group reports a $61.7 billion loss for the fourth quarter of 2008. For the year, A.I.G. lost $99.3 billion. The federal government, which has already provided the company with a $60 billion loan, will be giving A.I.G. an additional $30 billion, making it the largest company loan the government has provided during the bailout. (March 14): A.I.G. announces they will pay top executives more than $165 million in bonuses this week, despite having received $170 billion in bailout funds from the U.S. government. The company claims the bonuses were promised in contracts and are no longer negotiable. Nearly 80% of A.I.G. is now owned by the federal government. (March 16): President Obama has asked Treasury Secretary Timothy Geithner to pursue all "legal avenues" in order to block the bonuses to A.I.G. executives. Among other techniques the Treasury will employ, they will write new requirements into the government aid. (March 23): New York Attorney General Andrew Cuomo claims most large bonuses paid to A.I.G. executives and top earners, totalling approximately $50 million, will be repaid. Much of the returned money comes from U.S. employees, with many overseas employees declining to return their bonuses.
- Unemployment Rate Hits 8.1%; 651,000 Jobs Lost in February (March 6): Unemployment in the U.S., which has been steadily growing for several months, reaches 8.1% in February 2009. This is the highest rate since 1983, and an additional .5% over January. There were 651,000 reported jobs lost last month, slightly down from 655,000 in January.
- Stock Market Sees Biggest Day of 2009 (March 10): The Dow Jones Industrial Average gained 379 points and the S. & P. 500 rose 6.4%. The biggest one-day trading growth of the year came after a memo from Citigroup revealed the bank was once again making money. A speech by Ben Bernanke, chairman of the Federal Reserve, calling for broad reforms of the financial regulatory system also helped increase optimism.
- Madoff Will Plead Guilty; Faces Life in Prison (Mar. 10): Bernard Madoff's lawyer told the federal judge overseeing the case that Madoff will plead guilty to all criminal charges against him. Madoff is accused of operating a massive Ponzi scheme, defrauding his many clients out of billions of dollars over the past 20 years. (Mar. 12): After pleading guilty to all charges against him, Madoff is sent to jail to await sentencing. Madoff is charged with 11 counts of fraud, money laundering, perjury and theft. The judge revoked bail and remanded the financial swindler due to his relatively high flight risk. Sentencing will take place June 16. Madoff faces a maximum of 150 years in prison.
- G.M.'s Chief, Rick Wagoner, Resigning (March 29): Rick Wagoner, chief executive of U.S. auto giant General Motors, is resigning at the request of the Obama administration. Wagoner, a G.M. employee since 1977 and chief executive since 2000, has seen G.M. through a rapid economic decline in recent years. The company lost $30.9 billion in 2008 and has requested billions in federal aid as part of the stimulus package. (March 30): In an address to the U.S. auto industry, President Obama explains that his request for Wagoner's resignation is a reflection of G.M.'s need for a new vision in the coming years. He also reveals that another failing auto company, Chrysler, must form a partnership with Italian automaker Fiat by April 30 before the federal government will agree to more financial aid. Obama explains that these two moves are part of a larger plan to revamp the auto industry in America. G.M. and Chrysler must abide by Obama's new outlines to radically restructure their companies, or face bankruptcy.