General Motors (NYSE: GM) has begun to look like a company that has no confidence in its own future. Its public image is no longer one of a firm that is taking action to improve its fortunes. Signals from GM indicate it is doing nothing more than trying to survive.

The largest car company in the U.S. announced it will cut 5,000 more white collar jobs. According to The Wall Street Journal, "Those cuts would amount to 15% of GM's North American white-collar work force."

For both investors and car-buyers, GM has now taken on the face of a company which may not be in business much longer. The media is overflowing with speculation about a big car company Chapter 11. GM refuses to get out in front of that news by saying that it will hire 5,000 new employees in China, India and Russia, information that is almost certainly true because the company is growing fast in those markets.

GM has lost sight of the fact that perception often becomes reality. Bad news can hit the market without a broader context, or a struggling company can face the outside world with bad news with concrete plans and statements that the bad news is not the end of it.

Bad news, standing alone, only begets more bad news.

Douglas A. McIntyre is an editor at 24/7 Wall St.

MAJOR PAPERS:

• According to people familiar with the situation, the Wall Street Journal reported that Yahoo! Inc (NASDAQ: YHOO) is again talking to Time Warner Inc (NYSE: TWX), this time about taking over AOL, with Time Warner taking a stake in the combined entity. News Corporation (NYSE: NWS) has its eye on any Yahoo moves. Meanwhile, Microsoft Corporation (NASDAQ: MSFT) is considering what its next move against Yahoo might be and is talking to News Corp.
• The Wall Street Journal also reported that, as part of the company's plan to cut costs, Tribune Co's Los Angeles Times newspaper may look to cut about 250 jobs, including about 17% of its news staff.
• The Financial Times reported that Chrysler, which has been searching for foreign partnerships, signed with China's Great Wall Motor a memorandum of understanding to explore long-term business ties in areas that include technology, distribution and components.

OTHER PAPERS:

• According to the Dallas News, AMR Corporation's (NYSE: AMR) American Airlines informed its flight attendants' union that is may lay off 900 flight attendants on August 31.

WEB SITES:

• Yonhap reported that LG Electronics will release "Dare," a new touch-screen mobile phone in the U.S. that will compete with Apple Inc's (NASDAQ: AAPL) latest iPhone models.

As Joe Lazzaro posted earlier, the unemployment rate rose to 5.5% last month. And for the fifth straight month, payrolls fell.

Specifically, in May employers shed 49,000 jobs and the unemployment rate rose significantly from the April rate of 5% -- far higher than economists had expected. The Wall Street Journal reports that Wall Street economists had expected a 60,000 decline in payrolls last month and only a 5.1% unemployment rate

What's also of concern is that workers' income shrank in relation to booming inflation. Although workers' wages grew nominally at 0.3% in May to $604.58 a week, and for the 12-month period posted a 3.4% gain, inflation is running at 4% officially. So on an inflation-adjusted basis, workers' wages are dropping.

With gasoline prices up 100% in the last year, a worker who fills up a 20 gallon tank twice a week now pays $160 -- 26% of that paycheck -- compared to 13% last year. And if that worker gets fired, it will be awfully expensive to drive around looking for a job.

With 70% of GDP growth coming from those workers and gasoline prices topping $4 a gallon, those deficit enhancing rescue checks from the government don't seem to be doing their job all that well. What will the government cook up next?

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter.

Some more bad news for American car maker Ford Motor (NYSE: F) as the Detroit auto maker announced it would be reducing its salary workforce by upwards of 12%.

The move came about a week after the company announced that it wouldn't be able to meet its goal of returning to profitability next year due to the current economic slowdown. A factor leading to the company's problem has been a shift in consumer preference from trucks to smaller, more fuel efficient vehicles, a move that comes in reaction to the current record high gasoline prices that have spread across America. Ford said last week it was forced to cut SUV production.

Ford has not released any specific details on the job cuts, but the details are expected to be released sometime in July. The company currently has 24,300 salaried workers in the United States, Canada and Mexico.

Michael Fowlkes has worked as a stock trader for seven years and spent the last four years working as an analyst for the online investment advisory service Investor's Observer.

RBS (NYSE: RBS), the United Kingdom's second-largest bank, said the move is consistent with earlier stated intentions to cut costs as it merged its two wholesale banking businesses and also is warranted "in light of current conditions in some parts of the global credit markets."

Shares of RBS gained 12 cents to $7.19 on the news in midday Monday trading.

Thinning the ranks

Independent stock analyst C. Leonard Bauer told BloggingStocks Monday investors / traders should not be overly alarmed by RBS's likely upcoming staff adjustment. "I interpret this as more deal-related than credit markets-related," Bauer said. "RBS added considerable positions during the strong years for investment banking, and the bank wasn't understaffed at the start of the boom in 2003, so some job cuts were expected on those grounds. The ABN Amro deal simply meant that there would be more wholesale banking positions to consolidate." Bauer added that he does not have a rating on, nor own, RBS's shares.

Further, Bauer said the likely RBS cuts does not change his outlook on the credit market / bond market recovery.The worst of the mortgage and related asset-backed write-offs are over, he argued, and he expects the size and frequency of investment bank write-off announcements to taper in Q3 and Q4 2008.

The world's second largest computer maker announced yesterday that it would close the doors of a desktop manufacturing plant in Austin, which involves laying-off 900 of 17,500 workers. The company's move is aimed at cutting expenses, which should result in $3 billion savings over the course of the next three years.

The decision is part of a strategy announced last year, with a target of cutting at least 8,800 jobs, or about 10% of its work force. Thus, the computer maker axed 3,200 jobs during the last nine months of the company's fiscal 2008.

As part of its cost cutting, Dell close 140 kiosks "to improve" competitive advantage and "to rationalize" operations. Dell believes that selling direct to retailers instead of using kiosks to capture customers' interest will help the company increase revenue.

It was only a couple of months ago when drug maker Novartis AG (NYSE: NVS) announced that it would be slashing 1,260 jobs in the U.S., and today we get news of another 2,500 job cuts worldwide by the year 2010.

Novartis has been particularly hard hit lately in the generic drug market from increased regulatory demands and Increased competition. During the July through September quarter, the company showed that profit fell by over 12 percent. The company did, however, benefit nicely from the sale of its Gerber baby foods and Medical Nutrition units to Nestle SA.

Looking ahead, the company is hoping that it will be able to regain momentum though engineering new drugs and streamlining its units.

Dean Foods Co. (NYSE: DF) stumbled in early trading after announcing job cuts and a lower profit forecast due to higher costs and slowing sales. A Stifel Nicolaus analyst also cut his price target on the stock by $3 to $31 and lowered his earnings estimates for the stock. However, the analyst did maintain a buy rating on the company, as he expects cost pressures to ease. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on DF.

After hitting a one-year high of $50.50 in March, the stock fell to a one-year low of $24.11 in late September. This morning, DF opened at $24.66. So far today the stock has hit a low of $24.56 and a high of $26.77. As of 10:45, DF is trading at $26.12, down $0.17 (-0.6%). The chart for DF looks bearish but improving slightly, while S&P gives the stock a neutral 3 STARS (out of 5) hold rating.

For a bearish hedged play on this stock, I would consider a December bear-call credit spread above the $30 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 4.2% return in 3 months as long as DF is below $30 at December expiration. Dena Foods would have to rise by more than 14% before we would start to lose money.

Bloomberg is reporting that Bear Stearns (NYSE: BSC) is going to cut 240 jobs in the home-lending units at the company. According to the article, this move is occurring to "improve the efficiency" within the company and a new computer system which allows the company to better serve its customers.

The stock's end-of-day surge on Thursday is not attributable to this news. Instead, there are rumors that "rescue financing" might be coming in to help this company and rumors that Bear Stearns might sell a portion of itself to a Chinese bank. But both of these remain rumors and I'd remind readers of the Wall Street saying adage "Buy the rumor, sell the news." Clearly investors were buying the rumor Thursday as the stock rallied 16 points from its intraday low of $102 per share.

Bear Stearns has been hit lots of bad news over the last few weeks and its nice to finally see the stock snapping back. However, this stock has become very speculative recently and I'd be hesitant to buy here because if these rumors are in fact unsubstantiated I'd expect the stock to sell-off accordingly.

Here is proof that if you mention enough possible outcomes, some of them will come true and you will look like a genius. Okay, maybe not, but anyway, Cadbury Schweppes plc (NYSE: CSG) released its Confectionery Strategy press release. Here are the two most important details found in it:

• Conveniently buried in the release, which quickly became the headline, was the 15% job reduction -- or about 7,500 layoffs. The company added that it would look to close 15% of its confectionery factories by 2011 as part of an austerity plan. These steep cuts are expected to save the company up to an estimated GBP300M.
• Also of note, after receiving "expressions of interest," the company said it would most likely sell its American business unit rather than demerge it.

The news dropped the stock about half a percent today to 55.75 in midday trading, which I find kind of surprising since both items are positive, at least for the company's costs. This may just be a case where the action -- while drastic -- was still not enough to satisfy investors, who possibly expected a more earthshaking announcement.

The initial consensus on Wall Street regarding IBM's (NYSE: IBM) announcement Wednesday that it would eliminate another 1,570 positions is that the effort represents another prudent action in its "reorganizational tripod" of fewer positions, cheaper positions, and reinvented positions.

Further, the reorganization effort represents nothing less than wholesale transformation of the company as it confronts the multi-directional competitive winds of the globalization era. Job eliminations bring Big Blue more in line with today's continuously right-sizing, temperature-taking business environment. Wholesale shifts of jobs to lower-cost markets -- IBM's India workforce surged to 52,000 in 2006 from a scant 9,000 in 2003 -- helps IBM make up for lost time vis-a-vis lower-cost competitors. And, perhaps most significant, IBM's operational shifts -- including rethinking how it delivers services -- create a more nimble, higher-value company that can respond to clients' needs quicker and more productively. IBM's shares closed Wednesday up $1.03 to $106.93.

Further, more position "rebalancing" may be ahead: IBM, which with Wednesday's cuts has now eliminated 3,700 positions in 2007, still has about 356,000 employees, including an eye-opening 128,000 based in the United States. And as part of those cuts, many analysts in the quarters ahead see a continued trimming of global services in favor of software, where revenue is growing faster.

Once it was clear to Motorola Inc. (NYSE: MOT) that its handset business was falling apart, the company said that it would cut 3,500 of its 66,000 employees. That was in January.

Today the company said another 4,000 would have to go, and that the move would save about $600 million annually. The announcement adds to a fairly stunning set of reversals for the company that was riding high on the sales of its RAZR phones in 2005 and early 2006. The stock ran like a scalded dog from $17 two years ago to over $26 in October of last year.

Then, it became apparent that the RAZR had no legs. Competitors including Nokia Corp. (NYSE: NOK), and Sony-Ericsson were coming to market with more attractive products. These companies were also building cheaper phones that were well-suited to markets like India and China. Motorola had put too much of its bet on one model. By early May, the shares were back to $17.

Outside investors found some hope in Carl Icahn's purchase of shares and attempt to get onto the Motorola board. But, CEO Ed Zander cursed Icahn like a sailor and got enough shareholders behind him to keep Icahn out of the company. Zander did not even have the guts to be quoted in the company's PR about the layoffs. It was left to the COO and CFO to shoulder that.

Firing people may help the stock price for a day or two, and it may cut costs. But, until Motorola can show sales figures indicating that it has models to get back the market share it has lost, getting investors into the stock is going to be very tough.

Douglas A. McIntyre is a partner at 24/7 Wall St.

The slowdown in the housing market has claimed another victim. Specifically, another 2,000 victims.

Pulte Homes (NYSE: PHM) said late yesterday that it plans to trim its work force by 16%, eliminating roughly 2,000 jobs as part of the firm's restructuring plan. The homebuilder say its restructuring efforts will save up to $200 million each year (before taxes). PHM will swallow a pretax charge of $40 million to $50 million due to these layoffs; most of this charge will be absorbed during the second quarter of this year.

In an accompanying news release, the firm's president and chief executive noted that "The homebuilding environment remains difficult, and our current overhead levels are structured for a business that is larger than the market presently allows."

The latest announcement is evidently not the first series of layoffs. In 2006, Pulte employed 12,400 employees, down from 13,400 in the previous year.

Yesterday, Standard & Poor's reported that U.S. home prices dropped 1.4% in the first quarter, marking the first time since 1991 that prices posted a quarterly decline. While many analysts continue to predict a recovery in the housing market, it has so far been a bumpy ride.

Beth Gaston Moon is an analyst at Schaeffer's Investment Research.

Citigroup Inc. (NYSE:C) is expected to cut 15,000 jobs and take a $1 billion charge as part of a restructuring plan it will announce in the next few weeks, according to media reports.

The company, which is also looking at big acquisitions including Japan's Nikko Cordial and reportedly ABN AMRO, is due to announced first quarter results April 16, the day before its annual meeting. The Wall Street Journal (subscription required) is reporting that the company wants to unveil its restructuring plan before then.

Chief Executive Charles Prince has a big challenge. As the Journal points out, Prince can't cut too deeply because morale could suffer and if he's too conservative big shareholders will be angry. Citigroup also needs enough offices and people to meet its goal of boosting international revenue to 60 percent of total sales from about 44 percent, the paper said.

Citigroup. whose shares have underperformed its peers, is going in a million different directions at the same time.

How can the company go on an acquisition binge and undertake a restructuring at the same time? It doesn't make any sense.

This plan doesn't seem to address the concerns of Prince Alwaleed bin Talal, Citigroup's biggest individual share older who last year called for big cuts to expenses.

Something is going to have to give here.

Either Citigroup will have to cut a lot more jobs or give up on huge acquisitions for a while. Until the dust settles, shareholders are going to stay on the sidelines.

Sprint Nextel Corp. (NYSE:S) CEO Gary Forsee bragged to the AP that blocked calls on the Nextel network were at their lowest level ever. The trouble is that fewer subscribers are noticing.

The telecom company had a net loss of 300,000 monthly subscribers in the fourth quarter and is cutting 5,000 jobs. Moreover, the company's 2007 outlook was below analysts' forecasts though it expects 2006 results to be within its previous guidance.

Forsee remains optimistic amid the tough times. In the company's press release, he mentioned that 2006 was a "challenging year" and that the company entered 2007 "with signs of progress underway."

Of course, you would expect Forsee to say the glass is half full. There are other less, positive trends. For one thing, the AP notes that the gains in subscribers from wholesalers and Boost mobile were offset by a net decline of
306,000 net subscribers "driven by a continuing exodus of Nextel subscribers amid frustration over worsening service quality."

The fierce competition in the wireless market is only going to intensify. Sprint better step up.

--Jonathan Berr is the editor of http://www.desperateinvestors.com