American Morning
Avon, Mary Kay making comeback
Armies of new Avon ladies are lining up in this thinning economy. Some were bankers. Some were stay-at-home moms. All are trying to get ahead or stay afloat in a down economy.
When you hear about companies like Avon, Mary Kay and Tupperware you may think throwback to the 1950's. But direct selling is back in a big way.
Many women are ringing doorbells again as a “second" job, hoping to make extra cash in this bad economy. Remember the old Avon commercials: "Avon, calling at your door." Ding, dong. "Avon calling!"
The Avon lady is back...with a twist. Its new commercial stresses the economic downturn and how selling Avon products can make you feel more financially secure, touting it as "a business you can count on."
And these days, more and more Americans are agreeing and turning to direct selling.
Will airlines be the next GM?
From CNN's Carol Costello and Bob Ruff
Anyone out there old enough to remember the days when flying was fun and the airlines made you feel, well, special?
"The powder rooms," says this Pan Am commercial from the 1950s, "...look like those in a private home." The commercial shows smiling "stewardesses" attending to every passenger's need. Viewers are assured that "the travail has been taken out of travel."
Those WERE the days.
Today, not getting bumped from an overbooked flight and scoring an aisle seat are considered triumphs.
And airline profits seem as dated as that Pan Am ad (Pan Am went out of business in 1991).
The airlines are losing money hand over fist. Here's the roll call from the first quarter 2009:
- American: $375 million net loss
- Continental: $136 million net loss
- Delta: $794 million net loss
- Southwest: $91 million net loss
- United: $579 million net loss
- US Airways: $103 million net loss
High fuel costs are only part of the problem. People just aren't flying as much as they used to. The International Air Transport Association (IATA) says so many people are in debt that, even if the economy improves, "a significant portion of existing income or any new cash could be used to pay down debt rather than spend and travel." Businesses too are figuring out ways to curb air travel.
So, are the airlines about to land on the same road that led GM and Chrysler to bankrupcy?
Big blow against big tobacco
By this afternoon, the president could be signing a bill into law – giving the Food and Drug Administration the power to regulate tobacco companies. It's considered a huge step in the effort to snuff out smoking in America. The Senate overwhelmingly voted yesterday to strike a big blow against big tobacco.
GM CFO: We admit errors in the past
[cnn-photo-caption image=http://i2.cdn.turner.com/cnn/2009/images/06/02/intv.young.art.jpg caption="GM CFO Ray Young tells CNN's Kiran Chetry that General Motors will learn from their mistakes."]
GM’s bankruptcy is viewed by many as a failure of historic proportions. GM’s chief financial officer says he views it as a once in a lifetime opportunity. GM CFO Ray Young spoke to Kiran Chetry on CNN’s “American Morning” Tuesday.
Kiran Chetry: Under the restructuring plan, the government will give the company $30 billion additional in taxpayer money, amounting to $50 billion so far. It's the largest amount, besides AIG, dolled out by the government. In a nutshell, can you explain what went so wrong for General Motors?
Ray Young: Kiran, we admit there have been errors in the past that we’ve made at General Motors. We’ve had a lot of extra excess costs, excess capacity over the years. We’ve got…defined benefit obligations that have really hurt us in the balance sheet. But going forward, Kiran, we're going to learn from our mistakes. And we’ve been given a once in a lifetime opportunity to restructure the balance sheet, to shed a lot of our extra capacity, extra costs, and move forward with a profitable new General Motors that’s going to be smaller but more focused with four core brands and with a cost structure that is very, very efficient.
Chetry: Can you explain to the American public how you're going to do that? How you're going to get back on track. Do you plan on being able to eventually return the billions in taxpayer money?
Young: Well clearly, with four core brands, we’re going to be very focused in terms of our product development and our marketing dollars. We're going to shed our extra capacity or our excess capacity in order to bring down the break-even level of our cost structure. But we're going to be very much focused as a product and customer oriented company…a lot of investments in this area, in terms of advanced technologies. Our intent is to return this investment by the American taxpayers both in terms of the loan they’re providing to us as well as the shares that the American public will initially own in the new General Motors.
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