Finance and Economic

The United States, which led the world into recession, may now see its fragile recovery stifled by events across the globe.

Dangerously high debt levels in Greece and some other European countries could trigger a wave of national defaults, undermining revival in Europe and probably in the United States as well.

And China’s recent steps to cool its economy also complicate President Barack Obama’s plan to attack high unemployment here by increasing U.S. exports. Financial markets have been whipsawed over concerns that debt problems in Greece — and perhaps also in high-debt Spain, Portugal, Ireland and even Italy — might infect stronger European neighbors.

Euro zone countries are key U.S. trading partners, and the United States can’t meet Obama’s goal of doubling exports in five years — or reap the benefits in new jobs — if debt default contagion spreads throughout Europe.

China is also deemed an important growing export market for U.S. goods. But Beijing’s recent steps to curtail bank lending and its economic saber-rattling at the United States have increased trade tension between the world’s largest economy and a country poised to soon surpass Japan for second place.

The Obama administration says it wants to move away from an economy fueled by heavy consumer spending and reliance on imports toward what economic adviser Lawrence Summers calls "an economy that’s based on investment, that’s based on exports, that’s based on saving payday loans." Unfortunately, all the other major economies also are counting on digging out, at least in part, through expanded exports. For every nation to be able to meet such a goal, of course, is a mathematical challenge.

The financial turmoil in Europe does have one potential silver lining for the U.S.: The uncertainty has raised the value of the dollar as measured against the currencies of 15 of the nation’s 16 biggest trading partners.

But there’s a downside to that, too. A stronger dollar makes made-in-America goods more expensive in overseas markets.

The U.S. trade deficit surged to a larger-than-expected $40.18 billion in December, the biggest imbalance in 12 months.

The Commerce Department said the December deficit was 10.4 percent higher than November. It was much larger than the $36 billion economists expected, with much of the increase coming from a big jump in oil imports.

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The beleaguered auto industry is poised for a slow but steady turnaround in 2010 that will usher in an era of profitability and job growth after years of declines, according to a new industry forecast.

The Conference Board of Canada, a private-sector economic forecaster, said the auto sector isn't necessarily out of trouble but there are encouraging signs that profits will return in 2010 and strengthen each year through to at least 2014.

"The Canadian auto industry appears to have turned a corner in the second half of 2009 and is expected to return to profitability in 2010," economist Sabrina Browarski wrote in the report.

"However, production will remain below historical levels," Browarski added. "Manufacturers will have to make concerted and ongoing efforts to streamline product line-ups, control costs, and innovate to maintain profitability."

The Conference Board said the industry will close 2009 with a $2.3-billion loss before taxes, but Canadian auto assemblers including the Japanese carmakers Toyota and Honda will have a collective profit of $100 million in the final quarter.

Still, the Conference Board expects Canadian production for all of 2009 to be about half of what it was in 2007, due to a halt in production by Chrysler and General Motors at the beginning of 2009.

"In fact, real production this year will fall below levels not seen since the 1992 recession," the report said.

The forecast for 2010 sees the industry returning to the black with before-tax profits of $263 million, a number which will rise to just under $2 billion in 2014.

The Conference Board indicated that conditions south of the border will determine the pace of recovery for Canadian auto producers because 84 per cent of production is destined for the U.S. market.

In the United States, vehicle sales are expected to edge up to 11.6 million units in 2010, with industry revenues rising by nearly 38 per cent.

Tony Faria, co-director of the automotive research centre at the University of Windsor, said the report is on par with analysts' predictions that the market is slowly returning.

"The expectation is that 2010 (and) 2011 will be rather slow growth years in the auto industry," he said.

Faria said the North American auto market demand will rise from 12.3 million vehicles in 2009 to as much 14 million in 2010. In the years before the recession hit, the market had called for about 20 million vehicles each year.

"It's going to be a slightly better market next year than this year, although the market's going to be well below the level that we became accustomed to from 1999 through 2007, which were nine extraordinarily good years."

Auto analyst Dennis DesRosiers was less optimistic than the report, saying there is too much competing information that makes it difficult to tell whether or not the industry is taking a turn for the better.

"My independent assessment is that this industry is still in a lot of trouble and a lot of denial…(as to) how serious the issues still are," DesRosiers said.

"I see all kinds of positives, but I don't know whether it leads to profitability or not, or whether it leads to these companies' long-term survival or not. But I see an equal amount of negatives."

The report said cost-cutting measures, such as labour agreements between the Canadian Auto Workers union and subsidiaries of Chrysler, General Motors and Ford (NYSE: F) will aid in the return to profitability.

General Motors and Chrysler have also reduced costs in other ways, such as cutting dealership networks, and reducing the number of shifts in operation. They also received a total of $13 billion in loans from the Canadian and Ontario governments.

"As of today, the outlook for the Canadian, Ontario and U.S. governments getting a good chunk of their loan money back is a lot more optimistic than it would have been six months ago," Faria said.

The Conference Board projects employment to rise 2.4 per cent to 53,200 workers in 2010 from 51,900 this year, after falling 19.4 per cent from 64,400 employees in 2008.

Next year's predicted employment gains would come after four years of steady declines.

Faria said there will continue to be job losses in assembly jobs for a short period of time, as the Detroit Three work to get production capacity in line with sales volumes.

But he added, some automakers are beginning to call employees back to work, and the trend will continue as production ramps up through 2010.

Toyota Canada announced Dec. 10 it is hiring 800 more people to raise production of a popular SUV built in Woodstock, Ont. by introducing a second shift.

GM Canada said last month it will recall 150 laid-off employees to its CAMI facility in Ingersoll, Ont., to meet strong demand for its 2010 Chevrolet Equinox and GMC Terrain. The company will also bring back 600 workers to its Oshawa, Ont., plant in 2011 to begin production of the company's new Buick Regal.

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One in six companies on the Standard & Poor’s 500 index may raise its next dividend payment as a rebound in the global economy boosts cash earnings.

AT&T Inc., Wal-Mart Stores Inc. and Raleigh, N.C.-based Progress Energy Inc. are among 79 companies in the index that may boost dividends, according to data compiled by Bloomberg. An 80th company, Ecolab Inc., the world’s largest maker of cleaning chemicals for hotels and restaurants, increased its payout Thursday. About 2 percent of the members may reduce their next payment.

“The economic recovery is in place,” said John Crawford, chief investment officer of Crawford Investment Counsel Inc. in Atlanta. “With that you will see some improvement in dividends in an overall sense, but they, too, will be coming along at a slower pace.”

Companies that have large market share, strong finances and pay above-average dividends are attractive for investors looking for safe returns as 10-year U.S. Treasuries yield less than 3.5 percent, said Crawford, who manages $2.5 billion in securities.

AT&T, based in Dallas, has a projected 12-month dividend yield of 6.1 percent, and Progress, the owner of utilities in three Southeast states, is expected to pay 6.2 percent.

Dividends tend to reflect the prior year’s profits and so won’t rebound for many U.S. companies until 2011, said Kevin Shacknofsky, who manages about $2 billion for Alpine Mutual Funds in Purchase, N.Y.

Some of the increases in dividends next year will be from companies that had cut payments or eliminated them this year or in 2008 because of “near-death experiences,” Shacknofsky said.

Thirty-three companies on the S&P 500 had lower dividend payments this year compared with 2008, Bloomberg data show.

Banks including Bank of America and Citigroup slashed dividends amid the deepest recession since the 1930s. Citigroup, which paid 32 cents a share, discontinued its dividend this year. Bank of America reduced its quarterly payment to 1 cent a share from as much as 64 cents last year.

“The biggest payers out there were the financials,” Shacknofsky said. “So in dollar terms, dividends are still weak.”

Companies are also beginning to use cash from rebounding profits to buy back stock. Chubb Corp., the insurer of commercial property and high-end homes, approved a repurchase program this week of 25 million shares.

General Dynamics Corp., the producer of Abrams battle tanks and Gulfstream business jets, this week announced plans to buy back as many as 10 million shares. The company is forecast by Bloomberg to raise its dividend in March by 2 cents to 40 cents a share.

Shacknofsky said companies should be raising dividends instead of buying back shares. “They should leave playing the market to investors, and they should rather give cash back as dividends,” he said.

Select companies such as Coca-Cola Co. and Wal-Mart have held up well during the recession and maintained dividend increases, Crawford said. Those companies are a safe haven during this period of low interest rates and slow recovery.

“That’s why AT&T and Progress and some of these names are attractive,” Crawford said. “You are just as safe, and you’re better off because you have higher yield.”

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China on Tuesday restated its long-standing policy to maintain the basic stability of the yuan at a reasonable and balanced level, after President Barack Obama said he would discuss the currency when he visits Beijing.

Asked about Obama’s comments, Foreign Ministry spokesman Qin Gang said China would keep improving the currency’s exchange rate mechanism with a view to gradually making the yuan more flexible.

Qin added that China hoped the United States, as the most important economy in the world, would pursue a stable fiscal policy to keep the dollar’s exchange rate steady and ensure its own growth and that of other nations.

“I want to make it clear that the United States is the number-one economic entity in the world,” he told a regular news conference.

“We hope that … the United States can overcome the difficulties brought by the international financial crisis and at the same time maintain the medium-term and long-term sustainability of its fiscal policy,” Qin said.

Obama told Reuters in an interview in Washington that he would raise the issue of the yuan, which many economists and U.S. manufacturers consider to be undervalued, when he comes to China next week.

But Obama also said the two countries share a common interest in helping to rebalance the global economy in order to deliver sustainable growth, a view echoed by Qin payday advance.

“If you ask me how relations between the two countries are right now, my first answer is: the economies of China and the United States are mutually related, integrated, dependent on each other and getting closer to each other day by day.”

But there are tensions between the two.

U.S. manufacturers complain that Beijing artificially holds the value of the yuan down to make its exports cheaper and American goods more expensive for Chinese consumers.

Economists say this has led to imbalances in the world economy by contributing to big trade deficits in the United States and trade surpluses in China.

Leaders of the Group of 20 developed and emerging economies have pledged to aim for policies to ease these imbalances.

But China has also been angered by recent controls slapped on some of its imports, and Qin issued a new warning against barriers to commerce.

“We urge the U.S. side to make positive efforts with China to resolve frictions and questions in trade, including acknowledging China’s status as a full market economy and halting some protectionist measures,” Qin said.

(Reporting by Emma Graham-Harrison and Yu Le; Editing by Alan Wheatley and Ken Wills)

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GlobalGreen Insurance Agency and Great Wall Insurance Agency are partnering to offer brand-name insurance products and services.

The Mid-America Chapter of the National Academy of Television Arts & Sciences announced that Sharon Stevens of KSDK-TV, Tom O’Neal of KTVI-TV, Dan Bowser of WDAF-TV of Kansas City, Randy Dixon of KATV-TV of Little Rock, Ark., and Dr. Michael Murray of UMSL will be inducted into the Silver Circle of the NATAS.

Gourmet to Go on Monday will open a downtown location at Broadway and Olive Street in St. Louis Place across from Metropolitan Square. The new location will open at 7 a.m. on weekdays and will provide carry-out dinner entrees after 3 p.m. each afternoon.

Enterprise Holdings has received LEED certification from the U.S. Green Building Council for its St. Louis Contact Center, the company’s second LEED-certified project.

The Nutrition Clinic has moved to Holloway Center, 116 Holloway Road, Suite B, Ballwin, Mo. 63011. Its telephone number is 636-386-3333.

Hanley’s Grille and Tap has opened a location at 315 St. Clair Square in Fairview Heights. Hanley’s is a full-service restaurant and bar featuring a complete menu of moderately priced American food.

Byrne and Jones Construction recently turned two grass football and soccer fields into turf fields for the St. Charles School District. The district invested $1.1 million in the project.

Diestelkamp Construction has completed construction and renovation of four elementary schools in the Hazelwood School District. Each school received a new or renovated library, classrooms, student service areas and main offices. Diestelkamp provided 27,800 square feet of new construction and the project cost was about $8.8 million.

Inc. magazine named Brentwood-based Argent Capital Management one of America’s fastest growing companies. Argent focuses on large and small capitalization stocks.

The current issue of Remodeling Magazine ranks Mosby Building Arts of Kirkwood as the No. 8 full-service remodeling company in the United States.

The Engineering News Record named the Korte Company of St. Louis to its list of the nations top 100 green contractors.

Tess Niehaus of St. Anthony’s Medical Center in south St. Louis County has been elected president of the board of directors of the American Hospital Association’s Society for Healthcare Strategy and Market Development.

Modern Healthcare named St. John’s Mercy Health Care one of the top 100 places to work in health care, one of only 34 employers to make the list twice.

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LONDON–European countries made a concerted push yesterday to put the thorny issue of bankers’ pay and bonuses at the top of the agenda of a meeting this weekend of finance officials from the Group of 20 nations.

Finance ministers and central bank officials from rich and developing countries representing 80 per cent of world economic output are convening in London amid mounting signs of an economic recovery.

Japan, Germany, France and Australia all recorded growth in the second quarter while Britain is widely expected to do so in the third quarter.

Momentum was growing over the bonus issue ahead of the start of formal talks yesterday, with the finance ministers of Sweden, France, Spain, Germany, Italy, Luxembourg and the Netherlands calling for the end of excessive payouts that have been blamed for fuelling the risk-taking that led to the current financial crisis.

G20 leaders promised at their London meeting in April to pass “tough new principles on pay and compensation," but little progress has yet been made.

The seven European countries called the payouts not only “dangerous" but also "indecent, cynical and unacceptable" in a joint opinion piece published yesterday in Swedish daily Dagens Nyheter.

"Bonuses guaranteed for more than a year should be banned. Bonuses should be paid out over a number of years and should mirror the individual’s and the bank’s actual performance over time," the ministers wrote.

They urged their fellow G20 ministers to join in the work to draw up tighter rules, saying they would "obviously be more effective if they are adopted at an international level.”

The initiative follows a similar move Thursday by the leaders of France, Germany and Britain. In a joint letter to the Swedish government – which currently holds the rotating European Union presidency – French President Nicolas Sarkozy, British Prime Minister Gordon Brown and German Chancellor Angela Merkel said it was especially important to forge international rules to rein in traders’ bonuses.

"Individual compensation is generally key to determining the behaviour and the risk adopted by a trading room," French Finance Minister Christine Lagarde told reporters auto loan rates.

Under government pressure, France’s largest bank BNP Paribas has halved bonus payments this year and, along with others, agreed to link bonuses to performance.

But the European push on bonuses has received a lukewarm response elsewhere within the G20.

Speaking to reporters ahead of yesterday’s meeting, Finance Minister Jim Flaherty said existing pay rules in Canada already “get the job done”, and there is no need to follow Europe’s plan for tougher rules on executive bonuses.

U.S. Treasury Secretary Timothy Geithner has not raised the bonus issue, preferring instead to focus on U.S. attempts to start talks on a new international accord to increase banks’ capital reserves.

British Treasury chief and meeting host Alistair Darling said that both bonuses and boosting capital were international issues that needed to be addressed as the banking sector was key to any economic recovery.

"Nowadays, no one large bank can simply operate in a vacuum, they operate right across the world, so this truly is an international problem," Darling told BBC radio yesterday.

But Britain has stopped short of some of the more stringent rules proposed by France and Germany on curtailing bonuses.

The G20 includes 19 countries: Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, Britain and the United States.

The European Union, represented by its rotating presidency and the European Central Bank, is the 20th member.

The London meeting of finance ministers is meant to lay the groundwork for the summit of G20 leaders to be held in Pittsburgh later this month.

Sweden, which holds the rotating European Union presidency, announced that European leaders would hold an extra meeting to bolster their plans on Sept. 17, ahead of the Sept. 24-25 leaders summit in Pittsburgh.

From the Star’s wire services

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Dr. John P. Lynch was named vice-president and chief medical officer at Barnes-Jewish Hospital. He will assume his new post on July 1.

Lynch, a faculty member of Washington University School of Medicine, has been on staff at Barnes-Jewish Hospital since 1995.

Lynch is board certified in internal medicine, pulmonary medicine and critical care medicine, as well as being a Fellow of the American College of Physicians cash advance no fax.

Lynch received his medical degree from Georgetown University. He completed his residency at the former Barnes Hospital and a fellowship in pulmonary and critical care medicine at Washington University School of Medicine.

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While their biggest customers may continue to wallow in recession into 2010, the oil-producing nations of the Persian Gulf are again luring foreign investment and looking for places to park their own wealth.

Crude prices that have stabilized above $50 a barrel mean the Middle East’s oil-rich economies are likely to pull out of the global financial crisis sooner than the rest of the world. Saudi Arabia, the largest Arab economy and the world’s biggest oil exporter, is attracting renewed interest from investors including leveraged-buyout firm KKR & Co. Qatar and Abu Dhabi have returned to international capital markets.

Stock markets are rallying across the region, led by Saudi Arabia, whose Tadawul All Share Index ended last week up 26 percent for the year to date, after tumbling 56.5 percent in 2008.

“The expected resilience of oil prices puts the Gulf countries in a relatively privileged position compared to Europe and the U.S.,” says Eckart Woertz, an economist at the Gulf Research Center in Dubai. “In 2010, that is likely to lead to some resumption of growth, unlike in developed-market economies.”

Crude oil traded at $61.61 a barrel on the New York Mercantile Exchange at 10:33 a.m. in Singapore — up 81 percent from around $34 on Feb. 12. Prices will remain above $50 for the rest of this year and top $60 next year, according to the median forecast of analysts surveyed by Bloomberg.

Providing a Cushion

While that’s still less than half the record $147.27 a barrel reached last July, savings built up during the boom from 2003 to 2008 are providing a cushion for most of the Gulf’s petroleum producers to get them through the worst recession since World War II.

“Oil prices are going up and confidence levels are coming back, things are going in the right direction,” Mohammed al- Shihi, the director-general of the U.A.E. economy ministry, told a conference today in Abu Dhabi.

Saudi Arabia’s economy will shrink 0.9 percent this year, according to the International Monetary Fund’s April forecast, while the United Arab Emirates is projected to decline 0.6 percent and Kuwait 1.1 percent. By comparison, the U.S. may contract 2.8 percent, the European Union 4 percent and Japan 6.2 percent, the IMF says.

By next year, the IMF expects the Gulf oil states to resume expanding, with Saudi Arabia growing 2.9 percent and Kuwait 2.4 percent, while advanced economies as a whole have no growth.

Oil Reserves

As a result, the six states in the Gulf Cooperation Council, which hold 40 percent of global oil reserves, are already luring fresh capital from abroad. The Qatari joint venture of Newbury, England-based Vodafone Group Plc, the world’s largest mobile-phone company, raised about $1 billion last month in the country’s first initial public offering in nearly a year.

Gulf oil exporters “have accumulated such big financial surpluses, and with ambitious expansionary fiscal budgets, things will be OK,” National Bank of Kuwait SAK Chief Executive Officer Ibrahim Dabdoub said in a May 14 interview at the World Economic Forum in Jordan. “We have started to see some green shoots here and there.”

International investors have taken notice. A Euromoney investment conference last week in the Saudi capital of Riyadh drew 1,600 participants, including representatives of Bank of New York Mellon, HSBC and Barclays Capital. Saudis in traditional white robes and red-and-white headdresses crowded a five-star hotel along with businessmen in suits from the U.S. and Europe.

Best Prospects

Abu Dhabi, with more than 90 percent of the emirates’ oil, has the best prospects in the region, along with Saudi Arabia and Qatar, the world’s largest exporter of liquid natural gas, says Simon Williams, chief regional economist at HSBC Holdings Plc in Dubai.

By contrast, the picture is a good deal grimmer in Dubai, which lacks the oil reserves of its U credit reports.A.E. partner Abu Dhabi and other neighbors. Dubai’s real-estate boom crashed last year, and it will continue to flounder, says Timothy Ash, head of emerging-market economics in London at Royal Bank of Scotland Group Plc.

The second-biggest of seven states making up the U.A.E., Dubai ran up debts of $80 billion and had to cancel projects including a waterfront development twice the size of Hong Kong Island. The traffic jams that clogged roads last year are gone; once-scarce taxis now sit outside residential buildings waiting for fares. Dubai property prices may fall as much as 70 percent from their peak, UBS AG predicts.

Hiring in Dubai

Even in Dubai, though, Emaar Properties PJSC, the U.A.E.’s biggest real-estate developer, says it is hiring 1,600 people for its retail, hospitality and leisure businesses, including three new attractions at Emaar’s Dubai Mall and three new hotels. And in the other Gulf economies, the presence of oil translates into a quickening of prospects.

“There is inherent stability in these markets,” says Emad Mostaque, a London-based Middle East equity-fund manager for Pictet Asset Management Ltd.,which oversees about $100 billion globally. “Next year you will see this region outperform other emerging and global markets.”

Mostaque says he is particularly interested these days in shares of Saudi consumer companies such as Riyadh-based food producer Almarai Co.

KKR is studying Saudi investments as it aims to take advantage of the region’s “most attractive markets,” says Makram Azar, head of Middle Eastern operations. This month, KKR named Ford M. Fraker, former U.S. ambassador to Saudi Arabia, as a senior adviser.

Diminishing Risk

Investors perceive diminishing risk on Gulf-region bonds, according to trading in credit default swaps. The cost of protecting against default by the Dubai government fell to 488 basis points on May 8 from a record high of 977 in February, CMA Datavision prices show. Saudi Arabia’s bond-default risk declined to about 162 basis points last week, from 335 basis points in February.

The apparent end of plans for a Gulf monetary union — the U.A.E. pulled out of the project on May 20 — won’t alter the region’s growth outlook because all the countries in the proposed union except for Kuwait already peg their currencies to the dollar, Woertz says.

In another sign that markets are opening up for Gulf borrowers, Qatar and Abu Dhabi raised $6 billion by selling bonds to international investors last month. Aldar Properties PJSC, Abu Dhabi’s biggest real-estate developer, sold $1.25 billion of 5-year notes May 21, becoming the first such firm in the U.A.E. to issue debt since August.

Sovereign Wealth

Meanwhile, Gulf sovereign-wealth funds, which turned their attention inward to shoring up domestic banks and domestic stock markets, now have an “appetite and cash available for selected strategic acquisitions” abroad, Woertz says.

Saudi Arabia has sovereign assets of around $438 billion, up from $335 billion at the start of 2008, according to estimates by RGE Monitor in New York. Abu Dhabi holds a fund of about $300 billion, and Kuwait has about $210 billion.

In March, Abu Dhabi agreed to buy 9.1 percent of German carmaker Daimler AG for 1.95 billion euros ($2.6 billion). Earlier this month it won approval to buy Nova Chemicals Corp., Canada’s largest chemical maker, for $499 million.

The region’s continued dependence on oil and gas is a “strength, not a weakness” that generates long-term surpluses, says HSBC’S Williams.

“I expect all of the region’s economies to fare well, including Dubai, which has a compelling economic case as the service hub for a rapidly growing and prosperous part of the world,” he says.

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NEW YORK–Facebook and Twitter have helped make social networking a household word. Now they need to make money.

Facebook chief executive Mark Zuckerberg and Twitter co-founder Biz Stone outlined several initiatives to monetize social media at the Reuters Global Technology Summit in New York this week.

Analysts and investors, in search of the next Google-like hit, are paying close attention to the breakneck speed at which Facebook and Twitter are adding new users.

While the popularity of the two social-media firms has yet to translate into the kind of revenue-generating machine that Google Inc. developed with its search advertising business, some say Facebook and Twitter have become so central to the Internet experience that they are inherently valuable.

"Both are new ways of communicating. And when you have a new way of communicating … you benefit people enough so that there is going to be value there," said Tim Draper, managing director of venture-capital firm Draper Fisher Jurvetson. In April, Twitter’s website attracted 17 million unique visitors in the United States, up sharply from 9.3 million the month before. Facebook grew to 200 million active users in April, less than a year after hitting 100 million users.

Facebook sees advertising as its primary money-making strategy, Zuckerberg said, noting that the company could eventually offer advertisements not just on its own website, but on any other sites that interact with Facebook low rates payday advance.

Stone said Twitter was less interested in generating revenue through advertising than it was in offering premium features for commercial users of Twitter.

The divergent strategies underscore the novelty of social networking and the lack of an established business model.

Pacific Crest Securities analyst Steve Weinstein said advertising is probably the quickest way for social services to make money in the short term, but a purely ad-supported model does not take full advantage of business opportunities created by social media.

"The amount of real-time information being created by Twitter is unparalleled," he said. Creating a better way to filter that information has great business potential.

Because the value of social-media sites improves as they become larger, Weinstein said the important thing now is for Facebook and Twitter to grow their networks and tread carefully with any monetization efforts that might inhibit that growth.

"The last thing you want to do is rush monetization and kill the golden goose," Weinstein said.

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The Obama administration has no plans to push General Motors Corp into bankruptcy next week and the outcome of the automaker’s restructuring efforts may not be known until a June 1 deadline, a source familiar with the situation said early on Friday.

Earlier, the Washington Post, citing sources familiar with the discussions, reported that the Treasury Department would steer GM into bankruptcy next week under a plan that would provide the company just short of $30 billion in new federal loans,

A U.S. Treasury spokeswoman declined to comment.

The Treasury is continuing to work with GM on its restructuring, and while the situation could change, there were no plans for a GM bankruptcy filing next week, the source, who was not authorized to speak publicly about the matter, told Reuters.

The government task force overseeing GM and Chrysler restructuring has given GM until June 1 to restructure its operations and prove it can be viable without government aid or face probable bankruptcy.

On Thursday an Obama administration official said the task force was continuing to work with GM and all of the stakeholders involved.

“I think that in terms of the outlook, I’m not going to speculate on the bankruptcy question, but I will say that the administration is committed … to standing behind GM and is confident that the company will be able to restructure over a short period of time,” the official said.

“GM faces a number of hurdles and it may well be that a court process is necessary to effectuate the restructuring, but the administration is committed to standing by the restructuring process whether or not that occurs,” the official said payday loan cash advance loan.

GM officials could not be immediately reached for comment. While the company has indicated a bankruptcy is probable, there has been no indication from the automaker, its advisors or the government that a filing would occur as early as next week.

GM must still address a number of concerns before any filing, including payments to suppliers, receiving ratification of proposed labor concessions and sorting out a complex proposal with its bondholders to further reduce debt.

If General Motors files for bankruptcy, as widely expected, its healthy assets will be quickly sold to a new company owned by the U.S. government, a source familiar with the situation told Reuters on Tuesday.

The source, who was not cleared to speak with the media and asked not to be identified, said the U.S. government would pay for the assets by assuming the automaker’s $6 billion of secured debt and forgiving the bulk of the $15.4 billion of emergency loans that the U.S. Treasury has provided to GM.

The company on Thursday reached a sweeping deal on concessions with the United Auto Workers and has given its bondholders until next Tuesday to agree to a plan that would reduce the company’s debt.

(Reporting by David Lawder and John Crawley; Writing by JoAnne Allen; Editing by Peter Cooney and Jackie Frank)

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