OPEC to try again to lift oil prices

CAIRO, Egypt — OPEC oil ministers on Friday downplayed expectations of, but didn't dismiss outright, an immediate output cut as they faced a third test in as many months of their ability to engineer a rebound in oil prices.

The outcome of the hastily convened Cairo meeting today, billed as a consultative gathering to assess the impact of earlier production cuts, probably will hinge on a key issue with which the cartel has had a checkered past: unity.

Kuwaiti oil minister Mo hammed Al-Aleem told reporters in Cairo that while the market was oversupplied, he believed there was "no need" for the Organization of Petroleum Exporting Countries to decide on cuts ahead of its regularly scheduled Dec. 17 meeting in Algeria.

But Rafael Ramirez, oil minister for price hawk Venezuela, later said the option remained to cut production by "at least 1 million barrels" at the weekend gathering. "Maybe it's necessary, a new cut," Ramirez said. He quickly added, though, that such a decision could be taken now or next month.

The diverging takes highlighted the difficulty of the task facing producers of almost 40 percent of the world's oil.

"There is total confusion" among OPEC's 13 members, said Fadel Gheit, managing director of oil and gas research at Oppenheimer & Co. in New York. "These people … really have no business model. They basically thrive when oil prices go up, and now they are crying uncle when prices go down."

And, down they have gone, in a financial avalanche triggered by demand destruction, itself sped along by a world financial meltdown that also threatens to cut deeply into OPEC member states' government budgets.

Whereas crude stood at about $147 a barrel in mid-July, it now hovers about $90 lower. On Friday, the U.S. benchmark West Texas Intermediate crude for January delivery was trading down about $3 per barrel at about $51.

"They (OPEC) simply don't react quick enough, and prices keep going down," said Vincent Lauerman, OPEC expert and president of Calgary, Alberta-based consultancy Geopolitics Central.

This meeting will come down to what kingpin and traditional price dove Saudi Arabia wants, he said.

Saudi oil minister Ali al-Naimi told reporters that answers would come today.

Cut didn't prop prices

The cartel has held one emergency meeting — Oct. 24 in Vienna — to try to halt the slide in prices with an announcement of a 1.5 million barrel per day drop. It failed to support prices, and the cartel cobbled together the Cairo gathering on the sidelines of the Organization of Arab Petroleum Exporting Countries' meeting.

But members have been circumspect about expectations, leading some to speculate that OPEC is staying quiet to maintain the element of surprise.

"As long as they do a substantive cut, they may be getting ahead of the curve, and should be cutting enough to get ahead of demand destruction," said Lauerman, citing 1 million to 1.2 million as the magic number.

That has been the figure most readily cited by those nations proposing cuts, including Venezuela, which, like fellow price hawk Iran, needs crude of about $90 per barrel to meet spending needs aimed in part at propping up its domestically unpopular regime.

The two have found support from non-OPEC oil giant Russia. Its president, Dmitry Medvedev, said Thursday that his country would cooperate with the group to support prices.

Lost revenues feared

Other OPEC members, such as Nigeria and Ecuador, face budget problems, too, making them reluctant to implement more cuts that might shrink revenues further.

Nigerian envoy Odein Ajumogobia said the ministers were "just going to exchange ideas and views" at today's gathering.

Kuwait's al-Aleem said existing low prices benefit neither consumers nor producers and could undercut investments in future projects — a scenario that could lead to another spike down the road.

"We think a decision could be taken, but I think it will happen in Algeria," he said.

OPEC's last round of cuts would put its total production at about 30.5 million barrels per day, according to the IEA.

Unlike many of their fellow members, the Saudis are better positioned to cope with the drop in prices. The International Monetary Fund estimates that Riyadh needs crude in the range of about $50 per barrel for 2008 fiscal accounts to break even.

Saudi Arabia is a close U.S. ally in the Middle East, and is eager to see concerted Washington backing for peace efforts in the region.

One way of winning new support from the incoming administration of U.S. President-elect Barack Obama would be by tacitly working to undercut two of Washington's most strident foes, Venezuela and Iran. It would not be an onerous job for the Sunni Muslim Saudis, who have no great affection for Shiite Iran.

"Saudi Arabia is playing ball with the U.S.," Gheit said. "It is going to punish Venezuela. It is going to punish Russia. It is also going to curtail Iran."

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'Keywords' connect Web search with site

Want to get your Web site to appear high up in the results when someone is looking for the kind of stuff you sell? Today, I'll share with you some keys to drive traffic to your Web site.

Remember, there are two ways to appear when someone types in "keywords" into a search engine:

>> Search engine optimization (SEO) — designing and writing your Web site to naturally rank high in search engine results.

>> Search engine marketing (SEM) — paying for a listing adjacent to keywords that you choose.

In my just-released book, Successful Marketing: Secrets & Strategies, I've covered the full range of marketing tactics for small businesses. But SEO and SEM are increasingly important, as they drive highly motivated prospects directly to your Web site. Moreover, with SEM, you pay only for those who actually "click through" to your Web site, so it makes search engine advertising particularly attractive to small companies.

Find right words, repeat

With both SEO and SEM, the most important step is to clearly identify which keywords searchers are likely to use when looking for the types of products, services, or content you offer. Then you must make sure you've "optimized" your site for those keywords by using them over and over throughout your site — in your content, headlines, page names, additional Web pages and more.

Search engine optimization (SEO)

If you want your site to appear high in results without paying for ads, choosing which keywords to use throughout your site is critical. Choose the most narrowly defined terms appropriate to your products, services or content.

Let's say your company creates math software for kids. You could use terms such as "educational software," "math software," "kids software." But your site won't show up high in search results because millions of other sites use such terms.

Instead, use very specific keywords — such as "kids algebra educational software" — repeatedly. Yes, use the entire phrase over and over. Keep in mind that "keyword stuffing — repeating a keyword without content or context — can get your site blackballed from search engines. So make sure you're actually providing real information related to those terms.

Search engine marketing (SEM)

If you're willing to pay for ads on a major search engine, such as Google or Yahoo, you'll "bid" for placement against other advertisers who also want to be associated with certain keywords. The more you're willing to pay, the higher in the listings your ad will appear. That's another reason to narrow your keywords: There will be fewer competing bidders the more specific your terms are.

Even if you pay for placement, you still want to optimize your Web site — or certain pages of your Web site — for keywords. That's because search engines still want to make sure the results, even ads, that searchers see are relevant.

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Black Friday may have been a bust

A muted Black Friday seemed to confirm retailers' worst fears, as the post-Thanksgiving shopping season kicked off with fewer people lined up for door-buster specials at Nashville-area stores and budget-conscious consumers cautious about how much they were spending.

"It's really a (financial) struggle right now," said 25-year-old Kevin Vo, a pharmacy student who lined up outside a Best Buy store at the Nashville West shopping center at 3 a.m. Vo rose early to buy a laptop computer for $350, but he intended to head home after that purchase.

James Ackerman, a Belle Meade resident, was surprised by how little foot traffic he saw at the Mall at Green Hills.

"To tell you the truth, I'm a bit shocked," said Ackerman, who was in the neighborhood picking up vitamins at the Whole Foods supermarket. "It's not busy at all. It feels like any other Friday of the year. There just aren't a lot of people out today."

The day after Thanksgiving traditionally starts the Christmas shopping period, because it historically has been a day when consumer frenzy helps stores earn most of their profits for the year. But this season, with rampant discounts of up to 70 percent common throughout November, the power of the landmark day may have faded.

Many retailers said crowds lacked the spirit of lavish spending evident in past years. At a Target store in Madison, fewer customers lined up for the 6 a.m. opening despite early-riser deals such as a $299 high-definition TV and $89 Kodak digital camera.

Morning crowds at the Mall at Green Hills were sparser than a year ago, retailers there said.

Paul LeQuire, area manager for Bachrach, a men's apparel store at the Mall at Green Hills, estimated Black Friday sales would be off 10 percent to 20 percent from last year. The store had steep discounts on some items of clothing — such as a $200 cashmere coat marked down to $99.

"There isn't the optimism there usually is during the holidays," LeQuire said. "Consumers want to seem frugal. They don't want to show off."

Shoppers stick to their lists

Other Black Friday shoppers said they had hit fewer stores or stuck more closely to shopping lists. Ackerman said he was more budget-conscious than ever before.

"I'm bargain-shopping this year more than any other year that I can remember," Ackerman said. "Honestly, I'm planning to do most of my shopping at big discount retail stores or online."

Christmas sales this year are projected to be the weakest in nearly two decades nationwide. Last year, the Thanksgiving shopping weekend of Friday through Sunday accounted for about 10 percent of overall holiday sales, according to ShopperTrak RCT Corp., a research firm. Data for this year are incomplete.

Consumers feel pinched

Many local consumers, clutching promotional store circulars as they started to shop Friday, said they felt financially pinched.

Anna Fahrenholz, a 38-year-old stay-at-home mom married to a physician, said prices seemed too high at The Mall at Green Hills, so she planned to head to discount outlets TJ Maxx and Ross Dress for Less in search of gifts under $20 instead.

"I was surprised there weren't that many deals," Fahrenholz said.

Patricia Adams, 58, tried to convince her daughter not to get a $24 High School Musical doll set because she didn't think it was discounted enough. "I am watching (my budget)," Adams said. "Every dime I spend."

Buyers 'hit and run'

Britt Beemer, chairman of America's Research Group, said he expected crowds to dramatically taper off the rest of this weekend nationwide, and that those consumers who do spend money would be targeting specific bargains.

He called the phenomenon "hit-and-run shoppers."

"If the deal is there, they bought it," Beemer said, adding that if a store didn't offer a good enough price, consumers "walked out without it."

David Mangrum, 8, asked his grandmother, Melissa Pearson, if she would buy him a Star Wars toy that sold for "only $59" at RiverGate Mall early Friday. Pearson, a substitute teacher with six grandchildren, said she couldn't afford it.

"We got food and clothing and a roof over our heads and gas," Pearson said. "This is more important than toys."

Annie McClain, 70, said she planned to wait for after-Christmas sales to find gifts for most of her five grandchildren.

She said her monthly bills had soared with the rising cost of heating her home. McClain bought two sweaters for herself and a mixer for her grandson that was on sale at Macy's department store.

"By the time I pay my bills, I have nothing left to spend," McClain said.

Even 'closeout' is slow

At S&K Menswear at RiverGate Mall, a "closeout sale" was off to a slow start.

Store manager Hannah Sloan surveyed a nearly empty store with racks full of clothes more than 40 percent off. "For us, it's not going so well," said Sloan, adding that sales had seen a "significant decline."

Some national retailers, including Macy's, KB Toys Inc., Best Buy and Toys 'R' Us, said Black Friday crowds were at least as large as last year, but that many shoppers said they were buying smaller, less expensive presents.

Analysts said sales totals on Friday might not match the year-ago levels as Americans slash holiday budgets, even for their own children.

"I've always filled the tree. But you have to be honest," said Shannon Keane, 38, of Cary, N.C., a single mother who was recently laid off from her job. "This year, I'll do the best I can."

She was out with her 13-year-old son Miles at a local Wal-Mart, buying one item: an iPod. "He really wanted this one thing," Keane said. "So we're here for this one thing."

And while steep price cuts on many items were great for cash-strapped consumers across the country, such moves could depress sales and profits for store owners in a season that many believe could show a rare contraction in overall Christmas spending.

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Job seekers tap social networking Web sites

Want a job? Consider contacting your online friends.

Professionals are increasingly turning to social networking Web sites like LinkedIn, Plaxo and Facebook to search for their next job.

Recruiters say they have been increasingly relying on such sites as a smarter way to keep track of talented, prospective employees — particularly those who aren't looking for a job yet.

Such virtual connections won a job for software developer John Hagewood, 47. A recruiter had contacted him last year through his online LinkedIn profile even though he hadn't been looking for a job.

Hagewood didn't reply at first. But when his company's sales took a dive, Hagewood responded to the recruiter, who gave him a job as a manager at VitalChek Network, a Brentwood company that issues vital records for government agencies.

"Honestly, I think it was God's will," Hagewood said.

There are some similarities between traditional job-listing sites and social networking sites: Users can post a resume, and employers can hunt for prospective hires electronically.

But networking sites like LinkedIn and Facebook allow people to keep in touch with friends, co-workers, old college friends and former supervisors.

Users can search for acquaintances via e-mail addresses. Once a colleague is found, they are linked together on a virtual network.

Those networks can be helpful over time. A user can quickly inform dozens or hundreds of friends on Facebook or LinkedIn that he has been laid off. An old college roommate might send a quick message back that his company is looking for new employees.

Joining virtual groups, such as an alumni group for a college, on the Web sites can help. Dan Ryan, a consultant at Brentwood-based The Human Capital Group, said he won a new client recently because his online profile was on his college fraternity's Web site.

Sites' use rises with unemployment

John Williams, a regional vice president at a firm threatened by job cuts, said LinkedIn has given him solid leads on potential jobs.

The site also shows profiles of individual job recruiters.

"You learn more about who is actually out there looking for jobs, versus just posting your resume and waiting for the phone to ring," Williams said.

The popularity of online social networking has skyrocketed in recent months. New membership on LinkedIn, a 5-year-old Web site that has more than 31 million members, has increased 36 percent in the past six months, a jump company officials attribute to rising unemployment.

"As of late, a lot of people have been reflecting on the stability of their careers and been thinking it's time to make that investment," spokeswoman Kay Luo said.

Surveys show that many companies have begun to rely on online social networks as a hiring tool.

Nearly two out of three executives in a recent survey said social networking Web sites will be useful in their hiring efforts in the next three years, according to Robert Half International, a staff ing services firm specializing in accounting and finance that polled 150 senior executives from the largest U.S. companies.

About 35 percent of the executives surveyed said they also would use other social networks such as Facebook or MySpace to look for candidates.

There's "no question that with this recession and the increased number … of people unemployed that we're going to see more and more use of social networking sites to facilitate job searches," said John Challenger, CEO of workplace consultants Challenger, Gray & Christmas Inc.

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Meet new, redesigned, green at auto show

The Nashville International Auto Show opens today and runs through Sunday at the Nashville Convention Center on Broadway, featuring hundreds of new cars, trucks, vans, crossovers and sport utility vehicles for 2009 and beyond.

All of the vehicles are under one roof, and there is no pressure from salespeople, because selling is prohibited at the show.

Among the highlights of the show will be many new or significantly redesigned models, some of which are not yet available in dealer showrooms.

These include the all-new Chevrolet Traverse, built at General Motors' Spring Hill plant; and the redesigned Ford F-150 and Dodge Ram full-size pickups.

Also on display will be the new $100,000-plus Chevrolet Corvette ZR1 and $70,000-plus Nissan GT-R supercars; the redesigned Nissan Maxima sedan and Infiniti FX crossover; the reworked Acura TL sedan; the all-new Ford Flex crossover; the new Hummer H3T pickup; the new Lincoln MKS sedan; the new Smyrna-built Suzuki Equator pickup; and the redesigned Mazda 6 sedan.

Toyota will show off the all-new Venza crossover utility vehicle, as well as the redesigned Highlander, among others.

Environmentally friendly cars, including some of the latest gasoline-electric hybrids, will be featured along the show's "green trail," which also includes displays with the latest information about alternative fuel vehicles.

Show officials say that green directional arrows will help visitors find all of the alternative-fuel models on the show floor.

Featured will be models from General Motors, Ford, Toyota and more, including the 2010 Ford Fusion hybrid introduced last week at the Los Angeles Auto Show.

GM hybrids at the show will include the Chevrolet Tahoe and GMC Yukon, Cadillac Escalade, Saturn Vue, Chevrolet Malibu and Saturn Aura.

Among other 2010 models on display will be the redesigned Mercury Milan and Lincoln MKZ midsize sedans.

The Suzuki Wave concept vehicle will be at the show, a convertible SUV based on the Grand Vitara.

Exotic cars exhibited

There also will an exhibit of exotic cars from such automakers as Ferrari, Maserati and Aston Martin.

At least 25 manufacturers' vehicles will be at the show.

Dodge will have the new Challenger in its exhibit, and other vehicles on the floor will include the redesigned Acura RL and TSX, Buick Enclave, Cadillac CTS, Chevrolet HHR SS, Chevrolet Malibu, Chrysler Sebring convertible, Dodge Grand Caravan, Ford Focus, GMC Acadia, Jeep Liberty, Jeep Grand Cherokee and Land Rover LR2.

Also on display will be the Lexus LX570, Lincoln MKX, Mazda CX-9, Mercury Mariner, Nissan Altima coupe, Nissan Rogue, Pontiac G8, Saturn Astra, Scion xD, Suzuki SX4 and Volvo C30.

Sunday will be Kids' Day, and Barbie will be there to greet children from 11 a.m. to 5 p.m.

The show will feature 17 video games and game consoles that visitors can play for free, promoters said. They include the Microsoft Xbox 360, Sony PlayStation 3 and Nintendo Wii.

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Songwriter of No. 1 Chesney song is unmasked

Most of Music Row knows Holly Gleason as a former media relations and artist development specialist. Others recognize her as a talented writer and critic who once contributed to Rolling Stone. What almost no one realized —including Gleason for a while — was that she is also a budding songwriter.

So, when Kenny Chesney had a No. 1 hit earlier this year with "Better as a Memory" written by SESAC writer Travis Hill under his alias Scooter Carusoe and total newcomer Lady Goodman, no one even guessed that Gleason had anything to do with that song.

But Lady Goodman was a pen name Gleason created to keep her identity a secret. She borrowed it from a character in the Cameron Crowe flick Almost Famous. She said she wanted to keep her name out of it to sharpen the focus on the song and admitted that this way if it didn't work "there was no risk because Lady Goodman didn't exist."

"Anyone who knows me knows I love songs," Gleason said. "I wanted the song to be the story, good or bad, whatever that might be."

Song is one of firsts

And the song was the story. In fact, "Better as a Memory" was voted one of Nashville Songwriters Association International's "10 Songs I Wish I'd Written" earlier this fall, and Gleason used the banquet surrounding the honor as a sort of coming-out party as a songwriter. She continued racking up accolades this week when BMI honored her success with a No. 1 party for the song. "Better as a Memory" is not only Gleason's first No. 1 song and first cut, but it is also the first song she ever wrote.

"I grew up writing poetry in the margins of (school) books," Gleason said. "I hold songwriters in such high esteem that I didn't want to be one of those people whose ego was bigger than their talent. Songwriting was not my canvas."

Travis Hill disagreed. The songwriter, who also penned "Anything But Mine" for Chesney, saw something in Gleason that made him want to write songs with her. After declining repeated invitations from Hill, Gleason finally relented.

"I would get e-mails from Travis saying, 'You sure you don't want to write a song?'" she said. "I thought, 'I'm not a songwriter.' But after two really bad nights followed by two really bad mornings I called and said, 'Do you still want to write a song with me?' He said, 'Let me get my (schedule) book.' "

Gleason said the song came together quickly, the verses comprised of many of the same lines she scribbled in her schoolbooks. The hook is a variation of a statement she used in bars to drive people away.

"When I went in to write with Travis I had my ideas, but I was shaking I was so scared," she said. "I said, 'Better as a memory than as your girl.' It's an honest thing if you know me. I've been engaged six times and never been married. But Travis said, 'I don't look like a girl.' So it became, 'I'm better as a memory than as your man.' "

Gleason maintains the song wasn't written for Chesney and said that she initially had qualms about sharing it with him. And when she did, she didn't tell her longtime friend and client that she was one of its writers. Chesney didn't find out that Gleason was Lady Goodman until a couple of weeks before his Just Who I Am: Poets & Pirates CD containing the song was released. She shared the news with him at a local restaurant and made him pinky-swear he wouldn't tell her secret.

"Kenny has this thing about (don't double-cross me) so I was afraid he was going to be really mad," Gleason said. "I really thought he was going to feel taken advantage of, but he was really happy. He said, 'Man, if I had written that song I would have taken a billboard.' "

Chesney attends party

Chesney was one of about 150 people at BMI's rather intimate party. He flew in from "the islands" to be there for his friend. Others in attendance included: Sony Nashville Chairman Joe Galante; Bryan Frasher, BNA Records' vice president of promotion; Chesney's producer Buddy Cannon; Tammy Genovese and Hank Adam Locklin from the Country Music Association; Ed Salamon, executive director at Country Radio Broadcasters; and Jody Williams, BMI's vice president, writer/publisher relations, Nashville.

"(Holly Gleason) has been a prime tastemaker in our industry for years," Williams said. "She appreciates songwriters as much as anyone I've ever met … And Kenny made an audio movie come to life."

Chesney gives credit for the song's success to Gleason.

"I gotta tell you, I am around a lot of people who love what they do, but I've never been around anyone who is as passionate as Holly is," he said. "Over the years, she has definitely raised my SAT score. This wasn't the most obvious choice (for a single) on this record. Holly, I'm so proud of you. You deserve it. I love ya, and I want another one."

As for Gleason, she's still in a small state of shock. She says that while she is still working as an artist development consultant, she's exploring her songwriting abilities more thoroughly.

"It's really surreal," Gleason said. "This is a dream I wouldn't have dared to dream … I'm not saying I'm beyond writing something stupid."

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Buffett dodges subprimes to outperform financials index

Billionaire Warren Buffett's decision to increase his stake in financial companies led by Wells Fargo & Co. and U.S. Bancorp and avoid subprime lenders is paying off for Berkshire Hathaway Inc.

Berkshire's bank-related investments rose 36 percent in the third quarter, while the 84-member Standard & Poor's 500 Financials Index declined 0.1 percent. Berkshire, based in Omaha, Neb., ranked as the biggest shareholder of Wells Fargo and U.S. Bancorp at the end of September, according to data compiled by Bloomberg.

"In one word, I can sum it up: patience," said William Frels, chief executive officer of Mairs & Power Inc. in St. Paul, Minn., which owns shares of Wells Fargo and U.S. Bancorp and has Berkshire stock in some client accounts.

A weighted basket of Berkshire's financial stocks rose at an average quarterly rate of 2.3 percent during the past year through September, Bloomberg data show. The S&P financials dropped by an average 11.4 percent per quarter in the same stretch. The index slumped 60 percent this year as new home sales fell to the lowest in 17 years.

As chairman and chief executive officer of Berkshire, the 78- year-old Buffett makes most of the company's investing decisions. Buffett, whom Forbes magazine calls the country's wealthiest man, declined to comment for this story.

Berkshire's financial investments have dropped 32 percent since Sept. 30, excluding a $5 billion investment in Goldman Sachs Group Inc., reducing Buffett's profits. The S&P financials index fell 41 percent in the period.

Berkshire cuts BOA stake

Berkshire's third-quarter holdings, released this month, show the company trimmed its stake in San Francisco-based Wells Fargo by a tenth of 1 percent since June to 290.4 million shares, valuing the investment at $7.8 billion as of Tuesday. Berkshire increased its holdings of Minneapolis-based U.S. Bancorp by 6.3 percent to 72.9 million shares. Berkshire kept its stake in New York-based American Express Co. at 151.6 million shares, remaining the company's biggest investor.

The only financial company Berkshire moved away from in the third quarter was Charlotte, N.C.-based Bank of America Corp., cutting its stake to 5 million shares from 9.1 million. Bank of America did what Buffett refused to do — buy Countrywide Financial Corp., the subprime lender plagued by tumbling home prices and record foreclosures.

"The fact he was smart enough to take a pass on so many deals that have gone sour indicates that he correctly saw that things were going to get worse," said Whitney Tilson, managing director of New York-based hedge fund T2 Partners LLC, which has been adding to its Berkshire holdings.

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GM's Chevy Traverse earns 'Top Safety Pick'

Chevrolet's new Traverse crossover utility vehicle, built in Spring Hill, is one of 72 vehicles for the 2009 model year to earn the "Top Safety Pick" designation by the Insurance Institute for Highway Safety based on the organization's own extensive crash testing.

The Traverse and its General Motors Corp. siblings, the GMC Acadia, Saturn Outlook and Buick Enclave, are the only large sport utilities besides the Germany-built Audi Q7 to qualify for the top safety honors.

But beyond those four SUVs, GM had only four other vehicles on the institute's annual list. They are the Cadillac CTS and Saab 9-3 midsize sedans, the Saturn Vue midsize sport utility and the Saab 9-3 convertible.

There are only three vehicles on the list for Franklin-based Nissan North America Inc., but none from either of Nissan's U.S. plants, in Smyrna, Tenn., and Canton, Miss.

The three are the Nissan Rogue compact crossover and the Nissan Murano and Infiniti EX35 midsize crossovers.

Almost all of Volkswagen's U.S. models made the list, including the new compact Tiguan SUV, the Eos convertible and the Rabbit compact hatchback. VWs not on the list were the Touareg large SUV, an odd omission considering its virtual clone, the Audi Q7, made the list. The Routan minivan, actually a Chrysler product, didn't make it.

Ford Motor Co. was the biggest winner, with 16 of its vehicles on the list.

The No. 2 U.S. auto maker's safest vehicles include three models from its Swedish Volvo subsidiary, along with Ford, Lincoln, Mercury and Mazda models. They include midsize cars and SUVs, compact SUVs and the redesigned F-150 pickup.

Honda is 2nd to Ford

The F-150 is the first domestic full-size pickup to be a Top Safety Pick.

To earn a place on the list, a vehicle must receive the top rating in each category in the independent tests, which include front, side and rear crashes.

Honda, Acura and Subaru were the only automakers with a winner in every class in which they have entries, the institute said.

In all, Honda and its Acura luxury division had 13 winners, second to Ford. Honda's redesigned Fit was the first safety award winner in the minicar category.

Honda winners included the Odyssey minivan; Honda Accord and Acura RL, TL and TSX sedans; and Honda Pilot and Acura RDX and MDX sport utility vehicles, among others.

Toyota had eight winners, including the Avalon in the large car class. But surprisingly, the top-selling car in the U.S., the midsize Camry sedan, did not make the list — although its biggest competitor, the Accord sedan, did, along with the two Ford midsize models and the Volkswagen Passat and Jetta.

For more information about the institute and its crash-testing program, visit the Web site www.iihs.org.

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Tax exemption costs Tennessee $45 million

In the midst of falling state tax revenues and a growing economic crisis, Gov. Phil Bredesen is pushing for an end to what he calls a "fairly outrageous" tax loophole for the well-off, but it could be an uphill battle in a Republican-controlled legislature.

Jason Mumpower, R-Bristol, who is expected to take over the job as House Speaker for the new Republican majority legislature in January, said he considers the governor's idea a "tax increase warmed over."

"I'm confused,'' he said Monday. "I've read he's not in favor of tax increases. Now he's suddenly advocating for a $45 million tax increase."

The battle over the tax exemption had pitted business groups and some state legislators against Bredesen's administration in the closing days of the last legislative session, and now the issue could come up again during the next session, after the governor signaled a desire to recoup millions of dollars in potential revenue.

"I think it's sinful to on the one hand to be talking about laying off people and on the other hand giving a huge loophole to relatively wealthy individuals in the state of Tennessee who found some ways of working the system,'' Bredesen said last week. "I hope the legislature will consider that."

The Commissioner of the Department of Revenue, Reagan Farr, has preliminarily identified what he says is $5 billion in property and $500 million in commercial rental income from family-owned limited liability companies that is exempt from the state's franchise and excise tax.

"The amount of property that is being sheltered is even more than we anticipated," Farr said, adding that some family-owned retail stores are moving operating income into a special entity to avoid taxes.

At current tax rates, Farr's preliminary figures amount to $45 million in lost tax revenue. But he pointed out that some families would reorganize their businesses if the tax law changes, making it unlikely that the state would recoup the full $45 million.

The Department of Revenue has sent out notices to 8,000 limited liability companies demanding information on who claims the exemption and has gotten responses from 6,000. It has threatened to revoke the exempt status for those who don't respond.

Farr said the tax change would impact only those families with income from commercial properties, which includes duplexes and commercial real estate, but not rental income on single-family homes.

2,600 claim exemption

There are a lot of ways to structure a business to avoid paying the state franchise and excise tax. Generally, limited liability companies pay those taxes. In 2000, the state passed an exemption for family-owned entities, called family-owned non-corporate entities, or FONCEs.

To qualify, 67 percent of the income in the limited liability company has to come from passive investments — such as stocks or rental income.

Farr said so far, 2,600 family-owned corporations are claiming the exemption, which works out to an average annual income of $192,000 per entity that's tax-free. He said he was unable to divulge the names of families taking the exemption.

Farr said ending the exemption comes down to a fundamental issue of fairness: business owners who aren't family have to pay the tax while those who are don't.

Critics claim that the move amounts to the Bredesen administration trying to sneak a tax increase through late in the legislative session last spring and that more information is needed about who pays the tax and the impact of getting rid of the exemption.

"Several people said they wouldn't be in business without these (tax exemptions) to compete with larger business entities," said Jim Brown, the state director of the National Federation of Independent Business, which fought the measure last spring. "It's helped in many ways. To remove this at this point in time would hurt."

Bill Freeman, a partner in the real estate firm Freeman Webb Company, said his family qualifies for the tax exemption in the ownership of some commercial real estate, which is separate from the Freeman Webb business.

"You have family owned businesses struggling in a very difficult economy,'' he said, pointing out that out-of-state, publicly-traded REITS, or real estate investment trusts, also don't pay franchise and excise taxes. He wonders why the governor is singling out families.

"Who does he come after when times are tough?'' Freeman said. "Who is he trying to help and who is he trying to hurt?"

GOP controls legislature

Business groups lobbying against the measure scored a minor victory over the weekend when State Rep. Gary Odom, D-Nashville, was re-elected as leader of the Democratic Party in the House.

He had opposed the governor's tax measure in the last legislative session and has gotten financial support from real estate interests, including Freeman.

"I'm not going to sit there because it's an idea from our governor,'' Odom said. "I'm not going to follow it blindly."

Whether Bredesen will be successful in getting a tax increase through a Republican-controlled legislature is questionable.

Robin Smith, the chairman of the Tennessee Republican Party, said the state should "concentrate on reducing spending rather than raising taxes."

But then again, the state's worsening economic condition may provide the needed legs.

"This is a difficult year for the legislature, and they're all going to be looking for money," said Walt Baker, the chief executive officer of the Tennessee Hotel and Lodging Association, who had opposed the tax change as part of a coalition of business industry groups. "When you've got an $800 million to $1 billion shortfall, I wouldn't rule anything out.''

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BizCoach: Plan for disaster before one strikes

Q: Every year during tornado season in Tennessee I realize that I need a disaster recovery plan, but don't know where to begin. What should be in such a plan?

A: Be sure important documents are backed up on a computer disc and kept at a location away from the office. That includes financial statements, bank account information, contracts and important letters.

Keep copies of important records and documents in a safe deposit box and make sure they are up-to-date.

Protect computer systems and data. Data storage firms offer off-site backup that can be updated regularly via a high-speed modem or the Internet.

Have a back-up source of power and backup communications. Review insurance policies. If you cannot reopen for business immediately, what would be the financial impact if you were closed for a week or a month or more? Does your insurance policy provide sufficient benefits to allow your business to move to another location temporarily?

Look for locations where you might operate while your main facilities are being repaired. Try to get an advance commitment. It's generally easier to negotiate when you are not under stress.

Perhaps you could offer a reciprocal agreement with a business similar in size and overall needs to yours.

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Successful incentive plans should motivate workers

Incentive plans that motivate sales professionals and others at the office are an important undertaking for a manager. If they're designed well, the team is driven and a company can reap the benefits.

The flip side of a plan that's not clearly thought out, however, can wreak havoc internally. Imagine the ripple effects of diminished levels of trust, low employee morale and weakened profits, if a plan is too complicated or not achievable.

Fairness is a critical factor. Some companies use salary ranges that are discounted below compensation ranges for other professionals in their organization when sales people are eligible for an incentive plan. The other individuals may be eligible for a reasonable bonus at year-end based on company results.

This levels the field, and also rewards sales professionals to pursue the goals or targets outlined in their plans.

Plan structures can vary widely, of course, among companies based on their needs and objectives. However, as business rapidly grows, and/or as new products launch, some organizations divide their sales staff into two teams to give individuals a singular focus and a chance to achieve the best results.

One team may focus solely on acquiring new customers, while the other manages current clients with a mission of retaining and expanding their business.

Incentive plans need targets

Angie is a team leader of four business development professionals that sell prepaid products. Their focus is on increasing sales within an existing base of retail customers. Their incentive plan has several targets.

Examples include better sales volumes and better shelf placement in certain retail stores. There are also profitability targets set, so that customer inventory is properly managed to prevent overstocking in stores. This helps prevent write-offs of excess inventory and makes the customer relationship that much more profitable.

Since each component of the incentive plan is directly tied to at least two of Angie's company's business objectives, incentives are more closely tied to actual results.

The complexity comes in properly setting each target, so that both the company's growth goals are achieved and sales people are motivated to go for it.

Scheduling reviews of the plan's design with appropriate team members in finance, legal and human resources helps provide balance and close any loopholes that may exist.

Remember, any company should reserve the right to modify a plan in the future, if need be. What works well for a firm one year, might not remain the right strategy forever.

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GM bails on Tiger Woods

DETROIT — After nine years, Tiger Woods and General Motors Corp. are done.

GM announced Monday that the automaker and Woods, winner of 14 major tournaments in his professional golf career, had "agreed to a mutual and amicable separation." The endorsement deal ends effective Dec. 31.

GM said the move was part of efforts by the automaker to save money and by Woods — whose wife is expecting their second child this winter — to have "more personal time."

The automaker has warned that it could reach the minimum levels of cash needed to sustain operations by the end of the year. GM, Ford and Chrysler are seeking $25 billion in federal bailout loans from Congress.

"In light of the news coming out of Washington, this decision is the result of discussions that started earlier in the year, and the timing of this agreement with these other activities is purely coincidental," said Mark LaNeve, General Motors North American vice president of sales, service and marketing, in a statement,

LaNeve said Woods had been "a great friend to GM" and "a fantastic asset through the years helping to bring consumer awareness to many new GM products."

Woods had endorsed GM products for the past nine years and was heavily associated with the Buick brand.

In a statement on his Web site, Woods said: "I am very proud of the long-standing partnership I've had with GM and have enjoyed being a part of the company's dramatic product evolution. We've had a lot of fun together and I participated in some unique and rewarding activities."

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Regulator failed to rein in banks' risky practices

WASHINGTON — When Countrywide Financial felt pressured by federal agencies charged with overseeing it, executives at the giant mortgage lender simply switched regulators in the spring of 2007.

The benefits were clear: Countrywide's new regulator, the Office of Thrift Supervision, promised more flexible oversight of issues related to the bank's mortgage lending. For OTS, which depends on fees paid by banks it regulates and competes with other regulators to land the largest financial firms, Countrywide was a lucrative catch.

But OTS was not an effective regulator. This year, the government has seized three of the largest institutions regulated by OTS, including IndyMac Bancorp, Washington Mutual — the largest bank in U.S. history to go bust — and, on Friday evening, Downey Savings and Loan Association. Three others, including Countrywide, had to sell to avoid failure.

In the parade of regulators that missed signals or made decisions they came to regret on the road to the current financial crisis, the Office of Thrift Supervision stands out.

OTS is responsible for regulating thrifts, also known as savings and loans, which focus on mortgage lending. As the banks under OTS supervision expanded high-risk lending, the agency failed to rein in their excesses despite clear evidence of mounting problems, according to banking officials and a review of financial documents.

Deregulatory stance

OTS instead adopted an aggressively deregulatory stance toward the mortgage lenders it regulated. It let the reserves the banks held as a buffer against losses dwindle to a historic low. When the housing market turned downward, the thrifts were left vulnerable. As borrowers defaulted, the companies were unable to replace the money they had expected to collect.

The decline of the thrifts further rattled the economy, making it harder and costlier for people to get mortgages and disrupting businesses that relied on the banks for loans. Investors lost money, employees lost jobs and the public lost faith in financial institutions.

As Congress and the incoming Barack Obama administration prepare to revamp federal financial oversight, the collapse of the thrift industry offers a lesson in how regulation can fail. It happened over several years, a product of the regulator's overly close identification with its banks, and of the agency managers' appetite for deregulation, new lending products and expanded homeownership, sometimes at the expense of traditional oversight. Tough measures, like tighter lending standards, were not employed until after borrowers began defaulting in large numbers.

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Office parties get downsized

For more than three decades, the annual Christmas luncheon at religious publisher Thomas Nelson has been a holiday tradition for employees.

But in a year when the Nashville-based company has shed jobs, trimmed its roster of authors and pulled out of major industry trade shows to cut costs amid weaker book sales, the streak is over.

Instead of gathering in a ballroom at the Sheraton Music City Hotel to eat a three-course meal and open gifts, employees will bring their own food to a potluck meal at the company's warehouse this year.

"We're trying to explore more cost-effective alternatives," said Lindsey Nobles, a spokeswoman for Nelson, which expects to save "thousands of dollars" by altering its holiday traditions.

The publisher isn't alone in trimming party plans. Other companies in the Nashville area say they've canceled events; slashed expenses on holiday menus by serving meatballs or pigs-in-a-blanket instead of beef tenderloin and shrimp; or shortened guest lists.

Nationally, more companies that typically hold holiday parties are canceling them, according to a survey by workplace consultants Challenger, Gray & Christmas Inc. Others are limiting events to employees — not inviting outside clients or family members to take part.

John A. Challenger, chief executive of Challenger, Gray, said financial services firms, auto companies and homebuilders are among those most likely to make cuts or cancel parties this year. Challenger thinks cutting back on holiday cheer is a mistake during tough times, though.

"Cutting out a year-end holiday party means people don't have a chance to come together and recognize each other and the hard work and difficulties they've been through," he said. "It can be very damaging to the culture."

Party costs are a factor

Some companies say keeping a close watch on costs and doing away with holiday frills amounts to a responsible course of action when sales shrink and stock prices fall.

Nashville-area companies that canceled parties altogether this year include American General Life and Accident Insurance Co. Its parent, New York-based AIG, has seen its corporate events scrutinized more closely since it accepted a multibillion-dollar bailout from the federal government earlier this fall.

Other companies here say they're going ahead with holiday parties but trying to spend a little less money.

Pinnacle Financial Partners will still throw its annual Christmas bash for employees next month, but the party will take place at the Schermerhorn Symphony Center instead of outdoors at Cheekwood Botanical Garden and Museum of Art.

Last year, an outdoor bash at Cheekwood included the cost of renting portable heaters and tents to accommodate an expanded employee base after an acquisition. Last week, Pinnacle also held a clients reception at the symphony hall for the second year in a row.

"We don't spend a lot of money on advertising, and this is our principal mechanism to get together with our clients once a year," said CEO M. Terry Turner.

At some brokerage firms that nixed or trimmed budgets for holiday parties, local managers are stepping up to personally fund employee gatherings.

Billy Eskind, who manages the Nashville office of Wachovia Securities, plans to dig into his own pocket because his employer, which is being acquired by Wells Fargo & Co., isn't going to pay for a party this year.

"You have to reward your employees because while it's been tough on the client, it's also tough on the employees," said Jeff Factor, who oversees two Nashville-area branches of wealth management firm Smith Barney.

Factor remembers better times when soaring stock prices and sweet profits on Wall Street meant lavish holiday parties. "Anything that the caterer dreamed up we had," Factor recalled.

Better to give than receive

In keeping with the holiday spirit, Smith Barney's employees plan to use money set aside in the local budget to send packages stuffed with magazines and other requested items to relatives of employees serving in the military in Iraq and Afghanistan.

"That old adage that it's better to give than receive is really true for us this year," Factor said.

Employees at UBS Financial Services' local office, meanwhile, recently decided to donate money to help needy families instead of spending it on a holiday party and refreshments, said Tony Thorpe, branch manager.

Meanwhile, caterers and other businesses that rent party items from big tents to silverware say they're feeling the holiday pinch.

"We're still doing the parties, but they're not as extravagant as last year or as they have been," said Malcolm Greenwood, who owns Big Events Inc. More corporate clients have requested lower-cost food items this year to keep expenses down, he said.

Overall, food costs for corporate parties can range from $15 a plate for chicken and meatballs to $35 or more for beef tenderloin and shrimp, said Anne Clayton, director of sales for Music City Tents & Events LLC.

Brenda Odom, owner of U-Kno Catering, said some of her clients plan to stage much smaller office parties rather than invite hundreds of guests.

"They may order just the entree — the turkey and dressing — from us and not order the whole meal," she said.

'Back to our roots'

At Thomas Nelson, events manager Whitney Connell doesn't expect the planned potluck party for 500 employees to cost the publisher much money at all next month.

A musical band of workers — mostly from the warehouse — will provide much of the entertainment. Students from New Hope Academy, a private Christian school in Franklin that Nelson and its employees support, may sing Christmas carols.

"We're still celebrating Christmas as a company; this will really get us back to our roots, and it will still be a festive occasion," Connell said. "Many of the employees would much rather see this happen than have any job cuts. We don't need a big shebang during this recession."

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Watching cash is more important than ever

The phrase "Cash is King" has become a mantra in today's tougher economic times. Several readers of this column have begun to ask specific questions about why cash is so important. They want to know how they can improve cash flow, and what to do with the cash they're able to build up in their businesses.

There are four key reasons why watching cash flow in a business is more important than ever.

First, you can anticipate greater uncertainty of sales over the next several months. Most businesses are seeing smaller and less frequent purchases by customers.

Where a strong cash position is particularly important is during "sales shocks," which can occur when large, steady customers suddenly stop ordering. If this is because they have found a better price from a competitor, you have a chance to win them back. But, more and more businesses are waking up one morning to discover that one of their longtime customers has suffered a business failure.

Secondly, as I have written about in the past, bank credit is getting more difficult for small businesses to obtain and some entrepreneurs are beginning to have their loans called by their banks.

SBA loans are drying up

The news last week that the Small Business Administration loan program funding also is drying up makes finding credit even tougher. SBA loan funding is down more than 50 percent from this time last year. The SBA program offers guarantees for qualified small-business loans.

Third, just as your business may be feeling the effects of the economic slowdown, so are your suppliers. You should anticipate that your suppliers may begin to tighten their terms on trade credit to help shore up their cash flow.

Some may even begin to refuse to sell to you on credit, even if you have been paying on a timely basis in the past.

Finally, even in a bad economy you may find new opportunities. Don't count on any external sources such as banks or investors to fund new initiatives.

If you do not have the cash to fund expanding into new products, new markets, or even to buy up struggling competitors, you may not be able to pursue these opportunities.

If you do not do so already, watch your cash flow statements very carefully. And if the business starts to have consistent negative cash flow, you need to also measure and monitor how long your current cash will last.

Develop weekly, monthly and quarterly cash budgets to help make decisions on which bills need to get paid, or can get paid, and when.

In my next column, I will offer specific steps that can help to improve cash flow for a small business, even in a weak economy.

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Gaylord names new president

Gaylord Entertainment Co. named David Kloeppel as the company's president on Friday, among other management changes.

In his new role, Kloeppel, 39, will oversee marketing, media and entertainment. He will continue his duties as the company's chief financial officer. Kloeppel will earn a base salary of $625,000.

"Dave's wealth of financial experience as well as his knowledge of operational excellence will serve our company well as we navigate the extraordinary economic climate that the nation presently faces," said Gaylord CEO and Chairman Colin V. Reed, 61. Reed had been serving as president.

Kloeppel has been Gaylord's CFO for seven years. Before joining Gaylord, he was vice president of mergers and acquisitions at Deutsche Bank in New York.

Gaylord also announced other management changes on Friday. Rich Maradik, senior vice president and chief information officer, also will be chief marketing officer. Maradik will lead the efforts on Gaylord's improved customer relationship management systems.

Gara Pryor, vice president of compensation, will become the senior vice president of human resources.

Carter Todd, general counsel and senior vice president, was promoted to executive vice president and will serve as chief compliance officer. He will retain his general-counsel duties.

This week Gaylord's stock price dropped 25 percent to close at $6.01 a share on Friday on the New York Stock Exchange.

The decline in stock price began this month when the company announced weak third-quarter results.

On Monday, Gaylord said it was canceling its plans to build a resort and convention hotel in Chula Vista, Calif., because of infrastructure costs and a long and complicated approval process.

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Big Three must sell case to Congress

WASHINGTON — Democratic leaders began laying out conditions Friday that they say Detroit's Big Three automakers need to meet before Congress will consider giving them an emergency $25 billion lifeline.

House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid were drafting a letter Friday to the U.S. auto executives requesting specific information on how federal loans would help them survive.

The assignment is meant to give General Motors Corp., Ford Motor Co. and Chrysler LLC another chance, after a disastrous pair of hearings this week on Capitol Hill, to make their case to lawmakers and the public, she said.

"It's another opportunity for them to say to the American people, 'Give us your money, because we will put it to good use,' " Pelosi, D-Calif., told reporters.

The embattled companies have 12 days to get back to the skeptical Congress, after top Democrats scrapped planned votes on an auto bailout they said lacked support or a clear justification.

"The executives of the auto companies have not been able to convince Congress or the American people that this government bailout will be its last," Reid said Thursday.

Hearings are expected the week after next, and lawmakers could consider legislation during the week of Dec. 8, but only if the industry shows that taxpayers and autoworkers would be protected, congressional leaders said.

U.S. automakers are struggling to stay afloat heading into 2009 amid an economic meltdown, a precipitous drop in sales and a tight credit market. The three companies burned through nearly
$18 billion in cash reserves during the last quarter and GM and Chrysler have said they could collapse in weeks.

Countless jobs at stake

Detroit's carmakers employ nearly a quarter-million workers, and more than 730,000 other workers produce materials and parts that go into cars. If just one of the automakers declared bankruptcy, some estimates put U.S. job losses next year as high as 2.5 million.

White House spokeswoman Dana Perino called the Democratic plan "mind-boggling."

"How in the world are 535 members of Congress going to determine the viability of a company?" she said. "They can't even get together to pass a Mother's Day resolution."

Perino spoke to reporters while flying with President George W. Bush to an economic summit in Peru.

Congress is weighing a tricky political question: Should it spend billions more on unpopular government bailouts, or run the risk of bearing the blame of a U.S. auto industry meltdown?

Another loan on table

The White House and congressional Republicans said lawmakers should have considered a bipartisan plan to let the automakers tap a separate $25 billion loan program for fuel-efficient cars for their short-term cash needs.

Senate Republican Leader Mitch McConnell
of Kentucky described Democrats' stop-and-start attempts to push through the auto bailout as a "bizarre and confusing" spectacle during this week's post-election congressional session. He said the White House-backed plan "would be a way to get a law," but he wouldn't say whether he believes Congress should return next month to address the auto industry's predicament.

"I think we all accept that they're in serious trouble. No one is happy about that, but what to do about it remains to be seen," McConnell said.

Supporters of the bipartisan measure to temporarily divert the fuel-efficiency funds to cover the auto companies' operations said they hope to win support in December. "We need speed. This is a very, very important moment," said Sen. Carl Levin, D-Mich.

But Pelosi reiterated her opposition to that approach, which is vehemently opposed by environmentalists jealously guarding that money for the development of cars that use less gasoline.

"It's like taking your kids' college education fund and spending it on your credit card bills," Pelosi said.

Gutierrez said it's more like dipping into a young child's college fund to pay for surgery that's needed to save his life.

"There will be time to replenish the fund, but what really matters is to save the life of the child," the commerce secretary said.

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Conference unites ideas, cash

More than 30 scientists exhibited their ideas on topics from alternative fuels to agriculture during a conference in downtown Nashville on Friday, as part of the state's push to bring more entrepreneurship here.

The Tennessee Innovation Conference, organized by the Tennessee Technology Development Corp. and held at the Doubletree Hotel Nashville, brought together scientists and venture capitalists for two days to discuss potential projects.

"We need this strategic dialogue on the importance of innovation and entrepreneurship to economic growth," said Eric Cromwell, the company's president and CEO. "We view this conference as the starting point for that dialogue."

The Tennessee Technology Development Corp. is a private corporation created by the state legislature in 1998. Its mission is to improve the state's competitiveness and economy by deepening its research and development base, ac ce l erating entrepreneurship and increasing access to risk capital.

In 2007, the corporation received $5 million from the Tennessee Department of Economic and Community Development. It has until 2010 to prove its development strategies add to the state's economic development and warrant taxpayer funds, Cromwell said.

That's no small order, especially in a time of financial uncertainty, as well as a general apathy toward entrepreneurship and innovation, Cromwell said. But, he added, the downturn may push people concerned about their jobs to start small businesses.

Entrepreneurs from various sectors held sessions Friday demonstrating their products. After their presentations, venture capitalists questioned them.

Ronald B. Michaels, a technical director at Seymour, Tenn.-based Phenotype Screening Corp. showed off the RootViz FS, a sub-$250,000 product that takes X-rays of a plant's roots. Scientists can use it to help improve a plant's yield, resistance and tolerance. So far, the company has sold one unit.

"I think it's a good thing to bring in venture capitalists and investors because the lifeblood of small business is money," Michaels said.

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Auto hub may go South

If it's no surprise that Michigan lawmakers are behind the pitch for a $25 billion lifeline for Detroit automakers, then it might be just as predictable that Southerners would be leading the charge against it.

Southern politicians have spent years luring foreign automakers to build cars in their states, with huge success. Most recently, Tennessee attracted a $1 billion Volkswagen assembly plant to Chattanooga. South Carolina has BMW. Mississippi landed a major plant for Toyota Motor Corp. Alabama boasts plants run by Mercedes-Benz, Hyundai Motor Co. and Honda Motor Co.

In Georgia, the governor recently began using a Kia SUV in honor of the company's planned $1.2 billion manufacturing facility there.

It's not that Southerners are secretly wishing for the Big Three to collapse. But if those automakers were to falter, the new players are poised to ramp up production and possibly turn the South into the next Detroit.

"In the long run, having fewer competitors or weaker competitors is generally a good thing," said Efraim Levy, a senior auto industry analyst with Standard & Poor's. "It would contribute to a greater relative strength in the South."

The regional divide is not black and white. Most Southern states still have a stake in the well-being of the Big Three and would suffer their own losses if the companies dramatically scaled back operations or closed their doors.

Kentucky and Tennessee have large GM plants, for example, and major auto suppliers are scattered across the region. In addition, the foreign automakers could see temporary supply disruptions in a destabilized market.

In Tennessee, General Motors is planning to slow production at its 3,500-worker plant in Spring Hill. Nissan has more than 6,500 employees in the state, and Volkswagen's Chattanooga assembly plant will provide about 2,000 jobs.

U.S. Sen. Lamar Alexander, R-Tenn., has acknowledged the importance of the domestic and import automakers to his state's economy.

As governor, he helped land the Nissan assembly plant in Smyrna and the GM plant in Spring Hill.

He said Tuesday he opposes a measure to take $25 billion from the $700 billion approved for the bailout of the financial services sector and use it to provide loans to carmakers.

But he does believe the U.S. automakers are important enough to the Tennessee and U.S. economy to help save them, and he said he favors using the $25 billion already approved by Congress to provide loans to automakers to help retool plants to build energy-efficient vehicles.

The Nissan and GM assembly facilities in Tennessee would qualify for aid under that legislation because they have been in the state long enough, Alexander said, adding that the money would be used for plants that have been open 20 years or longer.

Opposition strong in some places

Farther south, support for a bailout isn't as easy to find.

Just as U.S. consumers have increasingly turned to foreign cars, the foreign makers have made clear their preference for the union-resistant South as a U.S. manufacturing base. Increasingly, the states' economic interests — and those of their political leaders — are realigning accordingly.

In Alabama, the number of auto industry jobs has more than doubled to nearly 50,000 since 2001, according to the Alabama Automotive Manufacturers Association. The vast majority of the positions are tied to new Honda, Hyundai and Mercedes plants. Meanwhile, Delphi Corp., GM's former parts operation, is closing a plant outside Huntsville, Ala., that once employed about 5,000 people.

Some Southern members of Congress — as well as a handful of Southern governors — have been among the most vocal critics of a Detroit bailout. Most are Republicans, and they insist that their opposition is largely about fiscal restraint and free markets: They don't think taxpayers should be forced to rescue troubled companies and they argue that a federal bailout won't do Detroit much good anyway.

But competitive interests are also at play.

Gov. Mark Sanford of South Carolina recently wondered whether BMW would have built its plant in Spartanburg if the government had been handing out money to its rivals, and Rep. Lynn Westmoreland of Georgia voiced similar concerns about the state's Kia plant, which might bring 2,500 jobs to his rural district.

"Let's face it, who would want to come over here and put their investment into this country if they knew the government was going to be subsidizing their competitors?" he said. "It's just not right. It just goes against the grain of the free-enterprise system."

Southerners also may be hurt

Those who downplay the U.S. automakers' role in the South's economy might be overlooking some of the benefits, said economist David Penn at Middle Tennessee State University in Murfreesboro.

"It's too easy to say (the demise of the U.S. automakers) is not going to affect us," Penn said.

"We're in uncharted waters here. We've had some big companies go bankrupt and have to be restructured, but nothing of the magnitude and spread of the domestic automakers."

There are a lot more jobs with suppliers than in the Big Three's assembly plants, he said.

"These states may think they won't be affected much, but they may be in for a surprise if these suppliers start going out of business," he said, explaining that the suppliers often prop up local employment in small towns.

Critics of a bailout also are failing to consider the impact of losing thousands of GM, Ford and Chrysler dealerships, said Erich Merkle, an auto analyst with Crowe Chizek and Co. LLC.

Nationwide, the Big Three have more than 14,000 dealerships — about three times as many as the import automakers combined. They employ 740,000 people and have an annual payroll totaling $35 billion, according to the Washington-based Alliance for American Manufacturing. About a third of those dealers are in the South.

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Forecast hammers Genesco shares

Nashville-based Genesco Inc.'s stock plummeted nearly 36 percent on Wednesday, after the shoe and hat retailer had downgraded its financial outlook and reported weak November sales.

Shares of Genesco declined $6.32 per share and closed at $11.40 on the New York Stock Exchange. Earlier in the day, the stock touched its lowest level in six years at $10.80 per share.

Robert W. Baird & Co. analyst Mitch Kummetz said in a note to clients that Genesco's same-store sales have deteriorated lately, "and we expect the company's performance to continue to be hampered by difficult market conditions through at least the first half of next year."

Genesco operates several groups of retail stores, including Journeys, Hat World, Underground Station and Johnston & Murphy.

For the fourth quarter, the company said it expects same-store sales — a key measure of a retailer's health — to fall between 1 percent and 4 percent as consumers pull back on spending.

Genesco said November total same-store sales have fallen 9 percent, although the company said sales at its Journeys stores should improve with incoming shipments starting at the end of the month.

The retail chain said same-store sales at its Johnston & Murphy group are down 20 percent through mid-November, while the Underground Station group is down 15 percent. The Journeys group is down 9 percent, and the Hat World group is down 6 percent.

The shoe retailer's problems came on the same day that Wall Street hit levels not seen since 2003, with the Dow Jones industrial average falling below the 8,000 mark as concerns about the U.S. auto industry disheartened investors.

The Dow closed down more than 427 points at 7,997.28 by day's end.

"In the near term, we remain focused on what we can best control in these difficult times, namely costs, inventory management and ensuring that we have the right merchandise in our stores to meet our customers' wants and needs," said Robert J. Dennis, Genesco's CEO and president.

Genesco spokeswoman Claire McCall declined to comment on the stock price. Genesco said for the three-month period ending Nov. 1 it expects net sales of about $390 million — up nearly 5 percent from $372 million a year ago but slightly below Wall Street analysts' expectations.

Total same-store sales at all of the company's divisions over those three months actually increased 2 percent, with the largest growth in Journeys and hat stores. The only decline during the third quarter occurred in Genesco's upscale retail store, Johnston & Murphy, where same-store sales fell 15 percent.

Johnston & Murphy, known primarily for selling men's shoes, launched a women's line in the fall.

Genesco will release complete third-quarter earnings Tuesday.

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Small business loans dwindle

Cameron Goss, the president of Goss Suzuki of Rivergate, got a $650,000 loan late last year from the U.S. Small Business Administration to help renovate his car dealership at a cost of about $1 million.

Now that sales have dropped 30 percent, he wishes he hadn't spent the money.

"It's something that could have been put off,'' he said.

SBA loan volume has fallen across the nation and in Middle Tennessee as some businesses are putting off investments in a weak economy and as access to credit tightens.

The SBA reported loan volumes fell 30 percent in the fiscal year ended Sept. 30. And in October, overall SBA loan volumes were 50 percent lower than in October 2007, mainly because of sharp drops in the SBA Express loan program that makes smaller loans, said Eric Zarnikow, head of the SBA's Office of Capital Access.

The decline has been almost as dramatic in Middle Tennessee. SBA lending fell 23 percent to 285 loans during the fiscal year ending Sept. 30 in Davidson, Williamson, Rutherford, and Wilson and Sumner counties.

However, the dollar value of loans in Middle Tennessee actually increased by 12 percent, to $59.1 million. Those dollar values can shift dramatically year to year, based on a size of a few loans.

"SBA and banks are still doing loans, but people aren't asking for them,'' said Jonathan Grindol, the owner and president of Sunbelt Business Brokers in Nashville, which helps sell small businesses. "We have 15 to 20 guys that have stated they will put in an offer when they see what the economy does."

But others point to a variety of other factors that are putting small businesses in a bind — blocked access to credit when the economy seems most in need of investment and a spending boost.

"It's just tougher,'' said Randy Ayers, general manager of the commercial division for real estate firm Crye-Leike."SBA is absolutely tightening down." SBA guarantees loans private lenders make to small business, providing ready access to credit for companies that might otherwise have a tough time getting conventional loans.

But the same pullback happening among conventional loans is happening with SBA loans. Ayers said he has had several business deals fall apart when the buyer couldn't get an SBA loan because of stricter lending requirements. Lenders are less likely to offer loans to businesses that don't have real estate to offer as collateral, he said. Businesses that rely on discretionary income like coffee shops and those that depend on residential construction such as subcontractors are having a harder time getting loans, lenders and business consultants said.

Critics berate SBA

Among those who did get an SBA loan approved recently were Lana and Jon Robb, who opened a second Copper Kettle location two weeks ago in downtown Nashville. The original location is near Lipscomb University.

Lana Robb said the couple started the process of applying for a loan last year, and now they're a little worried about the economy.

"Would we have started this at this moment? I'm not sure. But we are a casual dining restaurant, and that seems to not be suffering right now, while fine dining is,'' she said.

Business is doing better around lunch and worse around dinner than she expected.

The big decline in SBA lending is fueling new criticism that the federal government isn't doing enough to help businesses when they are in most dire need of cash.

"SBA volume is significantly down, and one might argue that (it's happening) at a time when small business needs access to capital more than ever," said Chris Reilly, president of CIT Small Business Lending Corp. of Livingston, N.J., which ranks among the top SBA lenders nationwide.

Many SBA lenders are upset with the SBA for not taking more action to improve the situation. Tony Wilkinson, president of the National Association of Government Guaranteed Lenders in Stillwater, Okla., said problems selling the SBA loans on the secondary market are prompting some lenders to eliminate or shrink their loan-origination side of the business, waiting until the business model works again.

"We're getting frequent announcements from our members that they are exiting the program or significantly cutting staff back," he said. Last week, the group held its annual convention in Palm Springs, Calif., where many members expressed anger with the SBA for not doing more to make its lending program more appealing to lenders and accessible to borrowers. "I left there believing that we are in a crisis situation," Wilkinson said, "that we're going to have more lenders closing up shop if we don't address these issues quickly."

Quick changes urged

Other critics of the SBA say the administration hasn't done enough to ensure that business owners who sorely need access to credit now can get it and are urging some quick changes.

Tim Jochner is chief executive officer of Tennessee's largest SBA lender, finance company Superior Financial Group of Walnut Creek, Calif.

He said SBA has a cap on community express loans, small dollar loans that average $9,000 at Superior Financial. As overall loan volume drops, so does the amount of community express loans SBA allows, tightening access to loans at a time when business need it most, Jochner said.

"It's one of the few loans that a bank can do that makes financial sense,'' he said. "The need is more than ever, and we're not getting any help."

Sens. John Kerry, D.-Mass., and Charles Schumer, D.-N.Y. sent a letter recently to Sandy Baruah, the SBA's acting administrator, urging the agency to make a raft of changes to its lending programs to give temporary relief to small businesses seeking financing right now. Among the changes they recommend: granting bridge loans to small businesses through the SBA's disaster-loan program and readjusting the rate cap on 7(a) loans, the SBA's largest program, to make them more financially appealing to lenders.

They argue that the bailout package passed by Congress will take too long to trickle down to small companies.

"Small businesses can't wait any longer for a lifeboat to arrive," Sen. Kerry said in a statement. "They need help now and the SBA has the power."

Zarnikow, responding to the criticism, said the SBA has taken some steps to remedy the slowdown in SBA lending, such as allowing lenders to peg SBA loans to Libor, or London interbank offer rate, instead of the prime rate. But by the same token, he said it's natural that SBA lending would fall as demand and creditworthiness decline.

"We're not trying to replace conventional lending," he said. "We're trying to make loans to creditworthy borrowers, not to lose money on the programs."

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Paulson defends changes in bailout strategy

WASHINGTON — Faced with exasperated lawmakers upset by shifts in bailout strategy, Treasury Secretary Henry Paulson launched a spirited defense Tuesday of his handling of the $700 billion program and expressed fresh reservations about tapping the pool for mortgage guarantees to relieve skyrocketing home foreclosures.

Members of the House Financial Services Committee grilled Paulson for not doing enough to help distressed homeowners and for failing to force banks that get some of the bailout money to specifically use it to bolster lending to customers, one of the prime reasons behind the rescue package.

"It is essential" that some of the bailout money be used to ease foreclosures, said the panel's chairman, Rep. Barney Frank, D-Mass., a key player in shaping the package that Congress passed and President George W. Bush signed into law Oct. 3.

Amid fits and starts in the administration's rollout and direction of the program, "I have to say at this point that public confidence in what we have done so far is lower than anybody would want it to be, to the point where it could be an obstacle to further steps," Frank said.

In a break with the administration, Federal Deposit Insurance Corp. Chairman Sheila Bair, made a fresh pitch for using $24 billion of the bailout pool to help Americans at risk of losing their homes. House Speaker Nancy Pelosi is urging Paulson to support the FDIC plan.

"As foreclosures escalate, we are clearly falling behind the curve," Bair told the panel. "Much more aggressive intervention is needed if we are to curb the damage to our neighborhoods and broader economic health."

Although Federal Reserve Chairman Ben Bernanke told lawmakers that in cases of some home loans, the FDIC plan could saddle heavy costs on the government, he said it is still a "very promising approach."

Treasury looks for relief

While Paulson was resistant to using some of the bailout money to provide mortgage guarantees, he said the administration will look for ways to provide foreclosure relief.

Some Democrats also prodded Paulson to divert $25 billion of the bailout money to help Detroit automakers. Paulson, however, didn't budge in his opposition.

"I don't see this as the purpose" of the bailout program, which is intended to stabilize jittery financial markets and get lending flowing more freely again, Paulson told the panel.

The Treasury chief found himself on the hot seat just one week after he officially abandoned the original rescue strategy of buying rotten mortgages and other bad assets from financial institutions. That had been the main thrust of the plan Paulson and Bernanke originally pitched to lawmakers.

"It appears that you seem to be flying a $700 billion plane by the seat of your pants," said Rep. Gary Ackerman, D-N.Y.

Focusing the bailout program on infusing billions into banks — and possibly other types of companies — to pump up their capital and bolster lending to customers was deemed a faster and more effective approach to stabilizing the financial system than the original centerpiece of the plan, Paulson said.

Toxic debts were avoided

Buying financial institutions' toxic debts would have required a "massive commitment" of the bailout money, Paulson told the panel. As economic and financial conditions quickly worsened, it became clear that the first installment of the money — $350 billion — for that purpose "simply isn't enough firepower," he said.

It's crucial that the administration be nimble in assessing changing conditions and adapt the bailout strategy accordingly, Paulson said.

"If we have learned anything throughout this year, we have learned that this financial crisis is unpredictable and difficult to counteract," he said. "There is no playbook for responding to turmoil we have never faced. We adjusted our strategy to reflect the facts of a severe market crisis."

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Paris, Tenn., call center could create 150 jobs in 2009

PARIS, Tenn. — A nonprofit organization plans to create a call center in Paris that could employ up to 150 people by late next year.

Richard Worsham of the Military Benefit Association, based in Chantilly, Va., said Paris was chosen over Davidson and Montgomery counties.

Company officials said they have already begun hiring. Most of the positions are part time.

The association offers group life insurance and other benefits. Members include active duty, National Guard and reserve military personnel; military retirees; veterans; and federal employees.

Worsham said that up to 1,150 could be employed within three years.

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Pinnacle applies for federal money

Nashville-based bank Pinnacle Financial Partners said Tuesday that it applied to sell $95 million worth of preferred stock to the U.S. Treasury as part of the federal government's program to inject capital into banks and provide more access to credit.

The amount was near the maximum $97.5 million it could apply for based on its assets. Pinnacle Financial said it would use the money to "strengthen our lending capacity" and "seize other potential strategic options,'' which Chief Financial Officer Harold Carpenter said could be entering new markets or buying branches of other banks.

The Nashville area's other biggest banks, Regions, SunTrust, Bank of America and First Horizon National Corp., the parent company of First Tennessee, all have applied or already received funding from the federal government. Birmingham, Ala.-based Regions said Tuesday it has sold $3.5 billion worth of preferred stock to the government.

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