Monday, February 09, 2009

Blue Monday: GM news, Indiana Mass Transit, Pay Day Loans, FinishLine Doing Well

It is a mess out there. While catching up on my blogging, I came to see the following as relating to Indiana's economy. Some good, some bad, making it all look precarious.

A bit of old news from The IBJ Daily News:
GM to offer all hourly workers buyouts:
"General Motors Corp. will offer buyouts to all of its hourly employees as the troubled automaker continues to slash costs.

GM spokesman Tony Sapienza said the buyouts will mainly target GM's 22,000 retirement-eligible hourly employees, though any union employee can take the offer.

News of the buyouts first broke on Monday, when a union official told The Associated Press then that GM would offer $20,000 in cash and a $25,000 car voucher for workers who retire early and those who simply leave the company."

Something I have not seen made much of outside of The Herald Bulletin is about the mass transit study,Study: $16B needed over 30 years for Indiana transit:
"INDIANAPOLIS — Mass transit options such as commuter rail and buses are becoming more popular, a new state study found, but Indiana would need to spend $16 billion over 30 years to get closer to ridership goals."

***

Committee chairwoman Rep. Terri Austin, D-Anderson, said the $16 billion price tag from 2010 to 2040 includes dozens of improvements around the state: new commuter rail lines to downtown Indianapolis, for example, plus increases in bus ridership and rural transportation services. She said the state should chip away at the best projects.

“You figure out where your greatest need and your greatest leverage will be, and that’s where you sink your investment,” she said.

Indiana could be getting $5 billion from a federal stimulus package making its way through Congress, with about $100 million of that set aside for mass transit, according to the office of Gov. Mitch Daniels. The U.S. Senate is working on its own version of an economic recovery plan, so the numbers aren’t final.

The South Shore commuter line that runs between South Bend and downtown Chicago is the state’s only major mass transit system between cities.

While $100 million may not be enough to build an entirely new commuter rail system, Austin said the money can help spur mass transit through transportation studies or other projects that lay the groundwork for future developments.

“Don’t just think cars, buses, trucks and trains,” Austin said. “There’s a whole lot of preliminary work to go on, and I do think it’s viable for that.”

***

The study discussed Monday did not make specific recommendations on what projects the state should tackle first, said Brian Piascik, a representative of URS, the company that conducted the study. The report found that ridership increased in the state’s 61 public transit systems from about 30.2 million in 2000 to about 36.1 million in 2007.

The study also included a public opinion poll that found most Hoosiers think the government should spent more money on mass transit, but do not support taxes to do so. The survey also found that most adults in Indiana have no experience using public transportation.

I calculate the cost of 30 years to be $533,333,333.3333 per year. Not chump change, for sure but anyone thinking gas will stay low for the next 30 years is a chump. Last year's gas hike created more immediate pain for the people in this area than AIG and Citigroup. Anderson exists now as a bedroom community for Indianapolis area workers.


The Indianapolis Star published More middle-class families are seeking payday loans as financial turmoil mounts and tis not a good sign - actually a scary one:
"Payday loans, typically a way working-class people get cash in a pinch, are increasingly being sought by middle-income families living without a cash cushion.

Lenders and others say the short-term loans are being taken out by people who used to get needed cash from a bank, a credit union or a credit card. With the recent credit crunch and recession, high-interest payday loans have become an alternative."

***

More middle-class families are using payday loans "to put off the day of reckoning," said Elizabeth Warren, a Harvard law professor who is chairwoman of a congressional watchdog panel on the $700 billion bailout for the U.S. financial system.

"Too many families live with no cushion, so when something goes wrong, they turn to payday lenders."

Payday loans are so named because they provide a borrower with cash until the following payday, typically within two weeks. All that is needed is proof of employment and a post-dated check payable to the lender for the amount of the loan plus a fee.


About Finish Line, the Indianapolis Business Journal has Retail boss: Zero debt huge plus Lyon takes Finish Line helm as shoppers cut spending

It isn’t easy being a retail CEO in a deep recession. Glenn S. Lyon, the new head at The Finish Line Inc., has plenty to tackle. Traffic is down at Finish Line stores, sales have slowed and competitors are slashing prices.

But the home-grown retailer has at least one major advantage: Lyon,

the ’s president, inherited one of the strongest balance sheets in the business, including zero debt, when he took the reins from former chief Alan H. Cohen Dec. 1. Leading Finish Line is Lyon’s dream job. It really sunk in when he played in a golf tournament in a foursome that included Michael Jordan and Bill Clinton. Lyon, 58, recently chatted with IBJ about the chain’s prospects. The following is an edited version of that interview.

Is this not how business is supposed to be run?

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