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Of the 54 job-seekers hoping to understand why all the world is atwitter about social networking, Linda Holley fell somewhere in the middle.

Unlike the unfortunate Luddite souls who arrived at last week’s Social Media Workshop unable to connect a laptop to the Internet, Holley at least brought a passing knowledge of websites and e-mail to the seminar.

Still, Holley is of a certain age. It was an age when "linked in" described a backyard fence, "delicious" was an ice cream sundae and "twitter" was what their heart did the moment they first laid eyes on the person who would become their spouse.

Holley, an unemployed travel industry sales rep, has come to terms with her limitations.

"I am not," she said, "an early adapter."

To which Steve Drake retorts: better late than ever. Drake was swept up by the Twitter craze in November.

The founder of the Chesterfield management firm Drake & Co. figures if a guy "as old as I am" can become a Twitter aficionado, anyone can.

That’s why the workshop sponsor, Businesspersons Between Jobs, asked him to facilitate the daylong seminar to introduce the social-network challenged to Facebook, LinkedIn, delicious.com (a bookmarking tool) and the ubiquitous Twitter.

From the get-go, it was pretty obvious Holley was going to be a tough sell.

"I was LinkedIn," she said during a break at the New Horizons Computer Learning Center, the St. Louis County facility that hosted the workshop. "But I didn’t have the foggiest idea what to do with it. I’m a reasonably intelligent person, which is why this is so frustrating."

What’s even more bedeviling, Holley added in a telephone interview this week, is the way online social networks suddenly emerged as the bridge between joblessness and gainful employment.

"I still think networking the old-fashioned way is not a bad way of doing things," she mused pay day loans no credit check. Be that as it may, Holley knows she has little choice but to sign up, sign on and network, network, network.

She proceeded cautiously in the days following the workshop, building up to the point where, by Wednesday of this week, I received a private message from her via Twitter.

Not long after, an invitation to join Holley’s LinkedIn network landed in my inbox.

LinkedIn also suggests Holley and I have a mutual business "connection."

And though Holley has joined Facebook, she can’t envision herself wiling away hours searching for names out of the past.

Of that, we are of the same mind: If we really cared about the long-lost friendships that materialize out of the Facebook ether, then we never would have allowed those friendships to lapse in the first place.

More to the point, Holley fails to see how a network that is the face of social interaction will help her get a job. Ditto, Twitter.

"If I want to talk to you, I can’t do it in 140 (characters)," Holley says.

Drake disagrees.

He maintains the abbreviated Twitter messages that come to the attention of recruiters or potential employers initiate a larger conversation about a job-seeker’s qualifications.

"It’s not the 140 characters" that are important, he said, "it’s the (content of the link) you post with it."

Holley, unconvinced, has decided to cast her lot with LinkedIn.

"I’m not going to bother with Twitter, I’m going to bother with getting a job," she announced.

Drake is not surprised.

"For these people, I think LinkedIn is probably the best way to go," said the 65-year-old, pointedly referring to those of a certain age.

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Boeing Co. leaders say that the U.S. military’s airlift needs are growing and that a Pentagon proposal to halt future orders for the C-17 Globemaster III cargo plane is premature.

Boeing, whose defense unit is headquartered in St. Louis, is trying to rally support for the C-17 on multiple fronts — arguing that ceasing production would erode the U.S. industrial base, costing thousands of jobs at Boeing plants and those of its main suppliers. But Boeing officials also emphasize the plane’s strategic value.

"Right now, since 9/11, the airplane has been flying at about a 15 percent higher rate than was anticipated," said Donald A. Anderson, Boeing’s C-17 program manager in St. Louis. "In addition, they’re talking about rebasing troops in the United States. They’re talking about an increase in the size of the Marines Corps and the Army.

"So it seems like the airlift requirements are growing. And you need airlifters to meet those needs."

Starting with Secretary of Defense Robert Gates’ announcement in early April and continuing through last week, the Pentagon has said it can get by with the 205 C-17s that are either in service or on order. The Air Force also uses the Lockheed Martin C-5 Galaxy to transport weapon systems, cargo and personnel to overseas locations.

Republican Sen. Christopher "Kit" Bond and Democratic Sen. Claire McCaskill, both of Missouri, have written letters supporting more orders of the C-17, and Machinists Union officials have traveled to Washington to show their support for a program that supports 900 jobs in St. Louis.

"This is high political theater," said analyst Richard Aboulafia of The Teal Group in Fairfax, Va. "The bottom line is I don’t think the line is threatened. But it is up to everybody from Department of Defense to Congress to Boeing to the unions to make it look as though it were."

The Defense Department has not sought funding for the C-17 in the last three years. But Congress has stepped in to add funding for more of the $202 million planes through supplemental defense appropriations bills.

Bond and Boeing officials have asked why Gates would halt C-17 orders while there is a study under way into the military’s future air-mobility needs. The results are expected this fall.

"But yet we’re making that decision now to stop the airplane," Anderson said. "So it seems somewhat premature online cash advance."

Bond said shutting down production of the C-17 is a "dangerous gamble" and warned that the U.S. can’t afford to "lose the capability to transport safely our troops and equipment to anywhere in the world."

In a letter to President Barack Obama, McCaskill said the U.S. is "literally flying the wings off these planes," and added "this is not the time to end its production, especially in light of projected global mission sets for the U.S. military."

Both legislators also have gone to bat for Boeing’s St. Louis-built F/A-18 Super Hornet, whose future was placed in limbo under the latest Pentagon spending plan.

The C-17 is assembled at a plant in Long Beach, Calif. But the cargo door, cargo ramp, landing-gear pods, nose and engine pylons are built in St. Louis.

A November 2008 report by the Government Accountability Office recommended "careful planning to avoid shutting down the C-17 line prematurely." Both Boeing and the Air Force believe shutting down and restarting production "would not be feasible or cost effective," the report found.

The GAO cited the high costs of hiring and training a new work force, reinstalling equipment to proper working condition and re-establishing a supplier base.

Boeing has delivered the C-17 to other countries, including Australia, Canada and the United Kingdom. The United Arab Emirates has announced its intent to buy four of the planes, and Qatar has ordered two and exercised an option on two additional C-17s.

But Anderson said international sales alone are not enough to sustain the C-17 line. Boeing officials say maintaining C-17 sales to the U.S. Air Force is necessary to keep the price of the planes competitive in the international market.

Defense analyst Loren Thompson of the Lexington Institute in Arlington, Va., said the C-17 is the best strategic airlifter ever built and "a very cogent case" can be made that terminating production at 205 planes would be too early. At the moment, he said, its future will be dictated by Congress.

"Here’s the bottom line to C-17," Thompson said. "If Congress doesn’t add money, there won’t be any more."

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Singapore’s Temasek TEM.UL sold its 3 percent stake in Bank of America in the first quarter of this year, taking a loss of around $3 billion in the process, as the state investor refocuses on emerging markets.

Temasek invested in Merrill Lynch and other global banks during the early phase of the credit crisis but, like most sovereign wealth funds, was burned by losses as the crisis deepened.

Temasek ended up with a stake in Bank of America when the U.S. bank bought Merrill in January.

But the U.S-centric Bank of America may not have been the first choice of investment for Temasek, given the state investor focuses on global companies that aim to grow in Asia, sources familiar with Temasek’s thinking told Reuters.

Analysts said Bank of America did not offer the global banking franchise that prompted Temasek and other sovereign funds to buy into Merrill and other Western banks.

Singapore’s bigger sovereign wealth fund, GIC, also invested in Citigroup and UBS.

“Bank of America is no longer a global franchise. It’s pulled out from a lot of its overseas operations,” said Mike Kerley, a London-based fund manager at Henderson Global Investors low interest personal loan.

He added the U.S. Federal Reserve’s recent ’stress tests’ on banks showed BofA needed to raise new capital, which would dilute the holdings of existing investors such as Korea Investment Corp.

Bank of America’s shares in Frankfurt were up 1 percent in early European trade on Friday.

CLOSER TO HOME

Temasek has also recently become more aggressive in the Asian market and is eyeing investments in Latin America and Russia.

The cash from the BofA stake sale partly allowed Temasek to subscribe to rights issues of Asia-focused Standard Chartered, Singapore’s DBS and Indonesia’s Bank Danamon.

This week it bought more shares in China Construction Bank from Bank of America.

“It seems they feel the China growth story is better than the ‘green shoots’ of recovery in the U.S.,” said Song Seng Wun, chief executive of CIMB Research in Singapore.

He said Temasek probably sold its BofA holdings to cap its exposure to financial stocks, which at the end of March 2008 was 40 percent of its portfolio. 

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WASHINGTON — It was the second-worst month on record for sales of new houses. But last month still brought a long-awaited shred of good news for the battered building industry.

February’s results, while still far below last year’s levels, provided some hope that new house sales have finally hit bottom and the worst may be past. Prices, however, are likely to remain weak for months as builders continue to clear out their stock of unsold houses.

The Commerce Department said sales rose 4.7 percent in February to a seasonally adjusted annual rate of 337,000 from an upwardly revised January figure of 322,000.

Even after the revision to January’s sales results, that month remained the worst on records dating back to 1963.

Economists had expected February sales to fall to a pace of 300,000 units.

The report "is another faint but nonetheless encouraging sign that the economic slide may be moderating," wrote David Resler, chief U.S. economist at Nomura Securities.

Because the report reflects signed contracts to buy new houses rather than completed sales, it could reflect the early impact of a new, $8,000 federal tax credit for first-time buyers instant payday loan.

Despite the boost, February’s sales were still down by more than 40 percent from the same month a year earlier. The median sales price fell to $209,000, a record 18 percent drop from the same month last year.

Some analysts remain skeptical new house sales are starting to recover, saying the data are notoriously volatile. Until job losses stop mounting, "I don’t think you’re going to see good housing numbers," said Patrick Newport, an economist at IHS Global Insight.

Nationally, the number of unsold houses fell to the lowest point since April 2002. But sales are so slow that it would take more than a year at the current sales pace to exhaust the supply.

"I’m hopeful the worst is over," said David Crowe, chief economist for the National Association of Home Builders. "I don’t think we’re quite out of the woods either. I think we will bounce around a bottom for a month or two."

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Offers of huge rebates and tempting low-interest loans weren’t enough to entice car buyers out of their bunkers in this economic crisis, causing U.S. auto sales in February to hover near historic lows.

General Motors’ sales tumbled 53 percent from a year earlier, while Ford’s U.S. sales fell 48 percent and Chrysler’s dropped 44 percent. The major Japanese automakers fared only slightly better.

Things are so bad that GM, which marked its worst February sales since 1967, is considering a program to let buyers keep their cars for a time without making payments if they lose their jobs.

The overall slide casts further doubt on the financial viability of GM and Chrysler, which need to sell cars and generate critical cash to supplement the $17.4 billion in government loans that are keeping them in business.

Overall, U.S. auto sales were down 41 percent from February 2008 but up 5 percent from January, according to Autodata Corp. and Ward’s AutoInfoBank.

The increase was a good sign, but it’s far less than the usual 14 percent sales bump from January to February, and it doesn’t necessarily mean sales have hit the bottom, said Jesse Toprak, executive director of industry analysis for the auto website Edmunds.com.

"It does mean that there’s some life out there," Toprak said.

Automakers and analysts have been predicting sales will rebound in the second half of this year, but they are becoming less certain. Massive layoffs, the stock market decline and sliding home values are prompting people to hold on to their vehicles, while those who are buying are more often buying a used one.

Emily Kolinski Morris, Ford’s top economist, said retail sales to individuals had been stable for four months but dropped in February. Ford’s forecast still calls for a modest second-half recovery as economic stimulus measures take hold, Morris said.

Analysts say that when all the numbers are tallied, February sales could be worse than January’s total of 656,976 light vehicles, the lowest monthly total since the industry sold 656,310 vehicles in December 1981, according to Autodata Corp car loan. and Ward’s AutoInfoBank.

The trough is likely even though automakers spent more on rebates, low-interest financing and other incentives to lure buyers. "If it wasn’t for the generous level of incentives now, we probably would be seeing even lower sales, if you can believe it," Toprak said.

Industrywide, the average incentive per vehicle last month rose 8 percent from January to $2,914 per vehicle sold, according to Edmunds. Incentives climbed to an average of 20 percent of a new car’s sticker price, topping more than $10,000 on some vehicles.

Chrysler executives said its incentive last month of employee pricing plus cash discounts and zero-percent financing helped spur sales of some vehicles, and it will continue the program in March. Still, February sales for the Dodge Ram pickup, made at the Fenton plant, fell 36 percent from a year ago.

Meanwhile, Toyota Motor Corp.’s U.S. sales plunged 40 percent. Honda Motor Co.’s sales dropped 38 percent, and Nissan Motor Co.’s fell 37 percent.

Within GM’s decline, sales of its GMC Savana fell 47 percent from a year ago, and its Chevy Express dropped 67 percent. Workers in Wentzville make the full-size vans.

Most automakers posted significant declines, but Subaru of America Inc.’s U.S. sales edged up 1 percent in February as sales of its top-selling Forester model doubled. Kia Motors Corp.’s sales were about flat from a year earlier.

Angela Tablac of the Post-Dispatch contributed to this report.

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President Barack Obama said he expects a fight to get his $3.55 trillion budget through Congress because it will challenge longtime Washington interest groups and lobbyists.

The president said today the spending plan he submitted to Congress reflects the promises he made during the campaign to change the government’s priorities and take the nation in a new direction.

“I realize that passing this budget won’t be easy because it represents real and dramatic change,” Obama said in his weekly radio and Internet address that. “It also represents a threat to the status quo in Washington.”

Obama kicked off his budget fight during a week when the Standard & Poor’s 500 Index fell to a 12-year low as the government rescued Citigroup Inc. The Obama administration’s attempts to break the grip of the worst financial crisis in 70 years are unlikely to bring immediate relief as companies from General Motors Corp. to JPMorgan Chase & Co. cut payrolls.

Gross domestic product contracted at a 6.2 percent annual pace from October through December, more than economists anticipated and the most since 1982, according a report yesterday from the Commerce Department. Consumer spending, which comprises about 70 percent of the economy, declined at the fastest pace in almost three decades.

Taxing Wealthy Americans

Obama’s budget for the fiscal year starting Oct. 1 would increase taxes on the wealthiest Americans and some companies to fund tax breaks for lower- and middle-income workers, and investments in new energy technology, education and health-care.

Humana Inc., an insurer, was among the health-care stocks that declined last week on concern Obama will cut Medicare payments to insurers and raise rebates drugmakers must provide to Medicaid recipients.

Obama said today that he realizes his proposals “won’t sit well with the special interests and lobbyists who are invested in the old way of doing business.”

“I know they’re gearing up for a fight as we speak. My message to them is this: So am I,” the president, a Democrat, said. “The system we have now might work for the powerful and well-connected interests that have run Washington for far too long, but I don’t quick guaranteed personal loans.”

Obama’s budget would impose almost $1 trillion in higher taxes over the next decade on the highest-earning Americans — families making more than $250,000 a year — Wall Street financiers, U.S.-based multinational corporations and oil companies while cutting taxes for lower earners.

‘Fair and Balanced’

“During the campaign, I promised a fair and balanced tax code that would cut taxes for 95 percent of working Americans, roll back the tax breaks for those making over $250,000 a year, and end the tax breaks for corporations that ship our jobs overseas,” he said today. “This budget does that.”

He also said he will eliminate unnecessary programs and vowed his administration will go through the federal books “page by page, and line by line” to make cuts.

“This budget also reflects the stark reality of what we’ve inherited - a trillion dollar deficit, a financial crisis, and a costly recession,” Obama said.

Republicans in Congress have said they will be unified in opposition to the tax increases Obama is proposing. Senator Richard Burr of North Carolina, delivering the weekly Republican address, criticized the spending portion of the plan as well.

“This week, the president submitted to Congress the single largest increase in federal spending in the history of the United States, while driving the deficit to levels that were once thought impossible,” Burr said.

“If we just look at what our debt spending will cost us in interest payments alone, we are talking about $4 trillion over the next 10 years, more than a billion dollars of interest payments every day,” he said. “Think of that $4 trillion as a finance charge on your credit card bill — you have to pay, but you get nothing for it in return.”

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General Motors Corp posted a nearly $31 billion loss on Thursday for 2008 and said its auditors were likely to cast doubt on its ability its viability as it seeks an expanded federal bailout to stay afloat.

GM, which asked for up to $30 billion of U.S. government aid, posted losses in all of its major units during the fourth quarter and it burned through $6.2 billion of cash. Revenue plunged by more than a third.

The automaker also warned its pension plans for hourly and salaried workers were underfunded by about $12.4 billion as of the end of 2008, raising the risk of an even greater funding gap in the years ahead.

The release of the grim results came on the same day that GM Chief Executive Rick Wagoner and other senior executives were scheduled to meet with members of the task force headed by U.S. Treasury Secretary Timothy Geithner and White House economic adviser Larry Summers.

“They are in fact-gathering mode right now, and so we are here in order to respond to their questions,” GM Chief Financial Officer Ray Young told reporters.

“This is not a negotiation session by any means, they are going to continue to gather facts and continue to ask for clarifications in terms of our submissions,” he said.

Shares of GM dropped 8 percent in pre-market trade to $2 online payday advance.35.

GM said it could receive a “going concern” notice from auditors when it files its annual report for 2008 with U.S. securities regulators by the middle of March.

The company, which took $6 billion in charges to shut down North American plants as sales tumbled last year, posted a net loss of $30.9 billion for 2008.

That marks the second-largest loss for the 100-year-old automaker behind only the $38.7 billion loss for 2007. GM has lost $82 billion over the past four years and cut 92,000 jobs over that period.

GM ended December with $14 billion in cash and including the first $4 billion in loans received from the U.S. Treasury. It received another $9.4 billion in aid in the current quarter.

GM’s fourth-quarter net loss widened to $9.6 billion from $722 million.

Excluding $3.7 billion in one-time charges, GM posted a quarterly loss of $9.65 cents per share. Analysts surveyed by Reuters Estimates had forecast a loss per share of $7.40 on that adjusted basis.

Revenue fell to $30.8 billion from $46.8 billion.

‘CONTAGION’ EFFECT 

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U.S. financial regulators pledged to inject additional funds into the nation’s major banks to prevent their collapse and will this week begin examinations to determine whether they have enough capital.

Banks that cannot privately raise the additional capital they need after the so-called stress tests will get taxpayer money, regulators said in a statement in Washington. Government funds would be in the form of “mandatory convertible preferred shares” that would be exchanged into common equity “only as needed over time.” Stakes the Treasury has already bought will be eligible to be changed to convertible preferred shares.

While the new injections could leave the government with majority ownership of several lenders, Citigroup Inc., Bank of America Corp. and other banks rallied on speculation shareholders won’t be wiped out. Officials said that the move would be a temporary effort to ensure firms stay in business and keep providing credit to households and businesses.

“The goal here is to incrementally provide as much support as necessary,” up to what could be called “temporary nationalization,” said Kevin Petrasic, a former official at the Office of Thrift Supervision, who is now a lawyer at the Paul, Hastings, Janofsky & Walker law firm in Washington.

Stocks Gain

The Standard & Poor’s 500 Banks Index advanced 2.1 percent to 59.41 at the close in New York, still leaving it down 57 percent since the start of the year. Citigroup gained 10 percent to $2.14 after plunging 44 percent last week on concern it can’t keep going without some form of nationalization that hurts shareholders. Bank of America rose 3.2 percent to $3.91.

“The market is voting and saying ‘this is a good thing, it looks like they’re not going to do anything stupid,’” said Michael Holland, who oversees assets worth $4 billion, including JPMorgan Chase & Co. shares, as chairman and founder of Holland & Co. in New York.

“I need a lot more beef before I think they’re getting it right,” Holland added. The Treasury already has bought more than $280 billion worth of stakes in U.S. financial companies since Congress approved a $700 billion financial-rescue fund in October. That’s failed to stem an exodus of investors from banks on concern credit losses will surge further this year.

‘Temporary’ Buffers

The new government funds are designed to provide a “temporary” buffer for firms against increased losses during the crisis, the Treasury, Federal Reserve, Federal Deposit Insurance Corp., Office of the Comptroller of the Currency and Office of Thrift Supervision said.

The mandatory convertible preferred shares will be exchangeable to common equity on a one-to-one basis, a government official said on condition of anonymity.

Officials are open to considering requests to exchange existing government stakes into common equity shares if the bank and its regulator believes it would help it survive, Treasury spokesman Isaac Baker said late yesterday.

“The U.S. government stands firmly behind the banking system during this period of financial strain,” the Treasury and bank regulators said in today’s statement. “The government will ensure that banks have the capital and liquidity they need to provide the credit necessary to restore economic growth.”

Supervisors will start the stress tests on Feb. 25 to assess whether banks have enough capital to withstand “a more challenging economic environment.” The statement didn’t specify the tests that bank examiners will run or say when the results will be known.

FDIC Report

Regulators will announce further details about the tests in two days, an official said. FDIC officials will release a quarterly report Feb. 26 with an updated tally of the number of “problem banks,” put at 171 in the third quarter.

“They don’t want to announce to the world that a third of the banks are undercapitalized and have to be nationalized,” said Sean Egan, managing director of Egan-Jones Ratings Co guaranteed high risk personal loans. in Haverford, Pennsylvania. “So they’re trying to finesse it.”

U.S. business economists in a survey today projected that the country’s recession will be the worst in more than three decades as job losses mount and consumers and companies retrench.

The world’s largest economy will shrink by 1.9 percent this year and a total of 2.8 percent in the current downturn, the most since the 1973-75 slump, according to the median estimate in a poll taken by the National Association for Business Economics. Another 3.2 million Americans will be cut from payrolls in 2009, pushing unemployment to 9 percent by year-end, NABE said.

Nationalization Idea

Sliding bank shares have given momentum to the idea of nationalizing banks in recent weeks. Nouriel Roubini, the economist and professor at New York University’s Stern School of Business, Republican Senator Lindsey Graham of South Carolina and former Federal Reserve Chairman Alan Greenspan have all suggested it as a solution to banks’ woes.

Fed Chairman Ben S. Bernanke said last week “there’s a very strong commitment on the part of the administration to try to return banks or keep banks private or return them to private hands as quickly as possible.” Senate Banking Committee Chairman Christopher Dodd said in a Feb. 20 Bloomberg Television interview that “short-term” government takeovers may be unavoidable.

By converting its preferred shares to common, the government could pad too-thin tangible common equity, or TCE, ratios. TCE strips out intangible assets, goodwill — the premium above net assets paid for acquisitions — and preferred stock, including shares issued to the U.S. Treasury. The ratio measures TCE against tangible assets.

Citigroup Stake

The government holds $52 billion of preferred shares in Citigroup, five times the bank’s market value as of Feb. 20. If the U.S. were to convert all of its holdings into common shares, it would own more than 80 percent of the company.

Charlotte, North Carolina-based Bank of America, which has received $45 billion in TARP funds in exchange for preferred shares and warrants, would be 66 percent owned by the government if its entire stake were converted to common equity, according to data compiled by KBW Inc., a New York-based investment bank.

The figure would be 69 percent at Regions Financial Corp. in Birmingham, Alabama, which has received $3.5 billion from the U.S. It would be 83 percent at Fifth Third Bancorp, the largest Ohio-based lender, which got $3.4 billion.

KBW calculated the government stakes based on a conversion price of 80 percent of the stock’s value as of Feb. 5.

Bank of America, Citigroup and Wells Fargo & Co. in San Francisco are among more than 400 financial institutions that have received cash in exchange for preferred shares under the program.

Current Capital

The regulators today said major U.S. banks are currently meeting their existing capital requirements.

“Major U.S. banking institutions have capital in excess of the amounts required to be considered well capitalized,” the regulators said.

Still, analysts and investors anticipate that writedowns will climb. President Barack Obama has also said that some lenders haven’t fully recognized likely losses. The International Monetary Fund estimates that writedowns and credit losses on U.S. mortgage-related assets will reach $2.2 trillion, after a total of about $1.1 trillion so far.

Officials are still “attacking the symptoms of the problem as opposed to the underlying cause,” Egan said. “The base problem in the financial markets right now that has yet to be addressed is the valuation and pricing of structured finance assets.”

Treasury Secretary Timothy Geithner outlined earlier this month a Public-Private Investment Fund designed to address the toxic assets. Officials have yet to specify how the program, which may reach $1 trillion, will work.

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Lenovo Group, the world’s fourth-biggest PC maker, forecast a quarterly loss as China’s slowing economy hit sales, and said it will axe 2,500 jobs as part of a restructuring to cope with falling demand for computers.

Shares in the company, which bought IBM’s PC business for $1.25 billion in 2005 to put the Chinese brand on the global stage, slumped by more than a quarter, their biggest fall in 11 years.

“Lousy quarterly earnings were widely expected, especially from its major markets overseas, but a faster-than-expected slowdown in the Chinese economy worries investors,” said Conita Hung, head of equity research at Delta Asia Financial.

“The market had initially expected the China market to offset part of its bad performance overseas.”

Lenovo noted that weaker global demand by businesses for personal computers also dented sales as economic slowdown bites.

“Although the integration of the IBM PC business for the past three years was a success, our last quarter’s performance did not meet our expectations,” Chairman Yang Yuanqing said in a statement.

The company said it would consolidate its China and Asia Pacific organizations into a single Asia Pacific and Russia (APR) business unit, and will cut executive compensation, including merit pay and long-term incentives, by 30-50 percent.

Shares in Lenovo, ended 26 percent lower to close at HK$1.91 on Thursday after being suspended a day earlier 500 fast cash payday loans.

Bigger rival Dell announced plans on Thursday to cut around 1,900 of 3,000 jobs at its manufacturing plant in Ireland and move many of them to Poland as part of a $3 billion cost-cutting plan announced late last year.

LOSS COMING

Lenovo had posted a 78 percent drop in July-September net profit to $23.44 million, its worst performance since it bought the IBM business, and said on Thursday it would report a loss for the October-December quarter.

Earnings are expected to remain under pressure even after a restructuring as information technology hardware vendors see slower growth amid a tougher business environment.

“Although the cost saving plans are seen positive for long term growth, there’s no doubt the profit margin will be under pressure,” said Delta Asia’s Hung.

“As the current environment is much more difficult than before, it is our view that Lenovo needs more aggressive cost control measures,” analysts Jenny Lai and Evonne Weng wrote in a research note for CLSA, which rates Lenovo a sell.

Lenovo said the 2,500 jobs, around 11 percent of the workforce, would be lost in January-March and would help realize savings of $300 million for the year to end-March 2010. 

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When Alan and Pat Richardson moved their upscale European furniture store to downtown St. Louis from Ballwin in June 2007, they expected a temporary slowdown because of the relocation.

But what the owners of English Living didn’t count on was the recession, and within months of the move tough times came calling.

"We saw what was happening in the housing market," said Alan Richardson. "We knew we were facing something, and we had to make some significant changes.

"We trimmed 40 percent of our payroll in preparation for what we thought was a storm coming. The storm came, and we thought by now, we’d be out of it."

Such hasn’t been the case.

Sales in October and November, typically the strongest months, were down 5 percent for the store at 1520 Washington Avenue. And that was on top of a 10 percent decline a year ago, after the store moved.

While the economy is hurting a range of retailers, merchants in the furniture and home furnishing business are particularly being slammed because of plunging house sales and cutbacks in big-ticket discretionary purchases.

Nationally, sales by furniture and home furnishing stores totaled $8.7 billion in November, down nearly 11 percent from sales of $9.8 billion in November of last year, according to advance figures from the U.S. Census Bureau. In comparison, sales at clothing and clothing accessory stores fell 5.8 percent. "For (furniture) retailers, it’s pretty bleak right now," said Jackie Hirschhaut, vice president of marketing for the American Home Furnishings Alliance, the nation’s largest trade association for furniture manufacturers.

Factors that can compound the problems range from bad locations to run-of-the-mill merchandise.

"It’s been rough this past year," said Susan Block, owner of The Designing Block, at 7735 Clayton Road near Hanley Road. "First we got hurt by Highway 40. Then we got hit with the economy. We really got a double dose.

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"We’re not dying, I’m not going belly up, but I’m off a whole lot from the previous year."

For example, gifts being shipped from the store are about 80 percent fewer than last year, and the store was struggling to sell a piece of furniture this holiday season.

In contrast, Mueller Furniture, at 1004 East Main Street in Belleville, says its location is a huge plus.

"When the big financial crisis hit in October, we had three unusually slow days," said owner Lynwood Mueller. But that was it.

October sales figures were slightly more than the previous year, and November brought a double-digit increase. Mueller also is expecting an increase in December figures, even though the month is usually slow for furniture sales.

Mueller says the Metro East area, which is home to major employers such as Scott Air Force Base and hospitals, has helped insulate his business from the recession.

"We’re not so dependent on manufacturing," he said.

Being able to offer more promotional goods has helped Carol House Furniture at 2332 Millpark Drive in Maryland Heights, said co-owner Brook Dubman.

"There are many more opportunities for us to buy closeouts and specials. We have the warehouse space to stock up," he said.

While business is down for the year, it’s only by a little, he said.

"That’s pretty good considering the stories you hear out there," Dubman said.

Discount prices also are helping Good Works at 6323 Delmar Boulevard, which opened an outlet store in August. Both stores are in the Delmar Loop area.

Owners Chris Dougher and Rita Navarro made the move after closing the Good Works location in downtown St. Louis because of a lack of customers. The store, which was shuttered in June, was open about eight months.

"There’s no question it’s a tough time. Fortunately we opened the outlet and it helped us maintain levels," Dougher said.

The outlet, at 6707 Vernon Avenue, is open Fridays and Saturdays and offers furniture at about 40 percent off the regular price.

Although Good Works didn’t succeed downtown, Alan Richardson says he believes the locale is the right spot for English Living and he plans to stay.

Located in the historic Ely Walker building, the store offers hard-to-find imported wooden furniture, antiques and custom-made pieces.

A big plus is the store’s bustling tea room that sells about 50 loose teas.

"The tea room has scored for us. It makes the store a destination," Richardson said.

gappleson@post-dispatch.com | 314-340-8331

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