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The Bank of Japan raised its assessment of the economy for a second month after exports improved and factory output climbed at the fastest pace in 56 years.

“Japan’s economic conditions, after deteriorating significantly, have begun to stop worsening,” the bank said in a report in Tokyo today after upgrading its view for the first time since July 2006 last month.

Governor Masaaki Shirakawa said yesterday that the world’s second-largest economy is likely to show clearer signs of improvement in coming months as companies replenish inventories. It’s still not certain that demand will pick up enough to sustain a recovery, he added payday advance loans.

While the central bank raised its evaluation of exports and production, it said the domestic economy has continued to weaken because of plunging earnings and a worsening labor market.

Profits tumbled a record 69 percent last quarter and the unemployment rate climbed to 5 percent in April, the highest in more than five years. Two applicants have to compete for every job available, the toughest hiring environment on record.

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In an effort to shed $1.8 billion in debt, popular theme-park chain Six Flags announced Saturday that it was filing for Chapter 11 bankruptcy.

The filing will not affect the operation of the company’s 20 parks in the United States, Mexico and Canada, said spokeswoman Sandra Daniels.

"This restructuring will have no impact on families who come out to our parks. They will not see an inch of difference," Daniels said.

In an online letter to employees, President and CEO Mark Shapiro said Six Flags inherited a $2.4 billion debt load that that "cannot be refinanced in these financial markets."

"This process is strictly a financial restructuring of our debt and that’s how you should view it and speak about it," Shapiro said in the message posted on the Six Flags Web site.

He said Six Flags was seeking expedited approval from the Bankruptcy Court for the District of Delaware of a pre-negotiated plan of reorganization under Chapter 11 of the United States Bankruptcy Code cash till payday advance.

He said the company actually performed well in 2008, attracting 25 million visitors and making $275 million. But it could not keep up with its debt obligations.

"That’s a balancing act you just can’t risk year in and year out," he said. "Today, we are moving to rectify our balance sheet once and for all. Believe me when I say we will emerge from this process stronger and more competitive than ever."

The restructuring would reduce the company’s debt to $600 million.

Shapiro told employees that the company was on "solid ground" and the bankruptcy decision was "difficult." He assured them their paychecks and jobs were safe. 

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Indonesia’s economic growth may accelerate to 7 percent starting in 2011, providing a case for its inclusion in the so-called BRIC economies along with Brazil, Russia, India and China, Morgan Stanley said.

Political stability and buoyant domestic demand will help boost expansion in the $433 billion economy, Morgan Stanley said in a report dated June 12 that compares Indonesia with India. President Susilo Bambang Yudhoyono is expected to win the July 8 elections, polls show.

“What this means for the investor community is that they need to look at this asset class more seriously,” Chetan Ahya, a Singapore-based economist at Morgan Stanley, said in an interview today. Political stability, improved government finances and “a natural advantage from demography and commodity resources are likely to unleash Indonesia’s growth potential,” he said.

Southeast Asia’s largest economy may grow 60 percent in the next five years to $800 billion due to a stable administration, lower capital costs and a government plan to spend as much as $34 billion to build roads, ports and power plants by 2017, Morgan Stanley said. Leaders of the nations known as BRIC will meet this week in the Russian city of Yekaterinburg.

Indonesia may expand as much as 4 percent this year, making it the fastest-growing major economy in Southeast Asia, according to the International Monetary Fund. Morgan Stanley expects 3.7 percent growth this year.

Economic growth of 7 percent starting in 2011 is “possible and achievable,” Finance Minister Sri Mulyani Indrawati told reporters in Jakarta today.

Presidential Election

Yudhoyono may win an overall majority in next month’s election, avoiding the need for a second round of voting in September, polls show. Yudhoyono’s Democrat party won more than 25 percent of seats in parliamentary elections this year, becoming the only party to be able to nominate a presidential candidate without seeking outside support.

The 2009 parliamentary election results “suggest continued stability in this democratic political framework and is a critical factor in unleashing Indonesia’s growth potential,” Ahya said car insurance. “Coincidently, the India story has also recently been given a fillip from the strong political mandate of the Congress-led coalition in the 2009 general elections.”

Indian Prime Minister Manmohan Singh’s Congress party won the most seats in parliament since 1991 in results announced last month.

Higher Education

Indonesia still lags behind the BRIC economies in the quality of higher education, which is “crucial in moving the economy up the value-added ladder,” Ahya said in the Morgan Stanley report.

“We still have a problem with the supply side, especially infrastructure and human capital,” said Destry Damayanti, chief economist at PT Mandiri Sekuritas in Jakarta. The nation may not be able to exceed 7 percent economic growth starting 2011 until the investment and education infrastructure is upgraded, Damayanti said.

Leaders of the BRIC nations may use their first summit on June 16 to press the case that their 15 percent share of the world economy and 42 percent of global currency reserves should give them more influence over policies.

Developing countries say their votes in the IMF, founded at the end of World War II to promote global trade, don’t reflect the shift in economic power. Brazil, the world’s 10th-largest economy, has 1.38 percent of the IMF board’s votes, less than 2.09 percent for Belgium, an economy one-third the size.

The BRICs may overtake the combined $30.2 trillion gross domestic product of the Group of Seven nations by 2027, Jim O’Neill, the London-based Goldman Sachs Group Inc. chief economist who coined the term for the four countries in a 2001 report, has said. That is a decade sooner than he had forecast earlier.

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Israel’s inflation rate probably fell in May to its lowest in 18 months as the global economy contracted and import prices fell, a survey showed.

The rate dropped to 2.8 percent from 3.1 percent in April, the second consecutive decline, according to the median estimate of eight economists surveyed by Bloomberg. The Jerusalem-based Central Bureau of Statistics will report the data at 6:30 p.m. on June 15.

“Commodity prices have dropped from last year,” said Yaniv Hevron, an economist at Psagot Investment House Ltd. in Tel Aviv. “The slowdown is also having an effect. There is deflation in the U.S., Europe and China, so we are seeing a drop in import prices.”

The inflation rate has fallen from a peak of 5.5 percent in September and October, enabling Bank of Israel Governor Stanley Fischer to lower the benchmark lending rate by 3.75 percentage points to a record low of 0.5 percent. As global markets recover, inflation may become a concern again and central banks must be willing to raise rates, Fischer said on June 10 personal loans for poor credit.

Prices rose 0.4 percent in May from April, according to an average of eight economists surveyed.

Inflation will probably be within with the 1 percent to 3 percent target range over the next 12 months, the central bank said in the minutes of the last rate-setting meeting, released June 8. Prices are expected to rise 2.2 percent over the next year, according to a Bank of Israel survey of economists included in the minutes.

Last week, the benchmark Mimshal Shiklit bond due in February 2017 dropped 0.5 percent to 101.82, with the yield climbing 10 basis points to 5.46 percent. The Tel Aviv Stock Exchange’s benchmark TA-25 Index fell 0.2 percent to 880.27.

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The Obama administration moved forward Wednesday on curbing runaway corporate pay practices, proposing new legislation aimed at giving shareholders a greater voice on executive pay and appointing a new so-called "pay czar."

The White House’s two-part proposal would give shareholders a voice on executive compensation, or a "say on pay" for senior management.

The legislation, which would effectively be carried out by broadening the powers of the Securities and Exchange Commission, would also attempt to establish greater independence for board members responsible for setting executive pay packages. This is similar to what the Sarbanes-Oxley Act established for audit committees in the wake of the Enron scandal earlier this decade.

If approved by Congress, the proposals would affect all public companies, not just the banks and other financial firms that had a direct role in the current economic crisis.

Separately, the White House also officially named Washington attorney Kenneth Feinberg as the administration’s "pay czar" on Wednesday.

Feinberg, who previously oversaw the federal compensation fund for September 11th victims, will be responsible for approving major expenses for banks, automakers and insurers that took government funds under the Treasury’s Troubled Asset Relief Program, or TARP.

Setting a low bar

Wednesday’s announcement marks the latest attempt by the Obama administration to tackle the issue of pay in corporate America.

In February, the administration unveiled a broad set of guidelines for financial firms that took taxpayer money under TARP. That included limits on executive salaries and the creation of so-called "clawback" provisions which would reclaim pay from workers whose actions may damage the firm’s long-term financial health.

Some of those policies became law as part of an amendment authored by Sen. Christopher Dodd, D-Conn. that was added at the last minute to the $787 billion stimulus package passed in February.

In a series of remarks published Wednesday, Treasury Secretary Timothy Geithner urged companies, not just those in the financial services sector, to act responsibly, suggesting that they align executive pay packages with the long-term performance of their businesses.

"This financial crisis had many significant causes, but executive compensation practices were a contributing factor," Geithner said in a statement.

Critics have charged that bankers were tempted by the lure of short-term gains, namely big bonuses, instead focusing on the long-term health of their firms. Such bets were believed to contribute to the downfall of Bear Stearns and Lehman Brothers.

At the same time, soaring compensation packages and outsized bonuses have become lightning rods of debate for lawmakers and taxpayers.

Public furor erupted earlier this year over the $165 million in annual bonuses that AIG (AIG, Fortune 500) paid to employees, after the government stepped in numerous times to prop up the insurance giant.

Some close observers of executive pay trends were skeptical about just how effective Wednesday’s announcement would be, particularly the legislative proposal which would give shareholders a "say" on executive pay.

Shareholder activists have had little success in getting companies to change their ways in recent years. At the same time, the "non-binding" vote means that companies do not necessarily need to heed investors’ wishes.

"It seems pretty timid," said Sarah Anderson, executive pay analyst at the Institute for Policy Studies. " ‘Say-on-pay is about the lowest bar they could possibly have set."

Some answers, but still more questions

The issue is clearly not going away anytime soon freecreditreport. The House Financial Services is holding a hearing about executive compensation on Thursday.

In addition, hundreds of banks and other troubled firms remain stuck in the TARP program and will continue to wrestle with the issue of compensation limits until they return taxpayer funds to the government.

Late Wednesday, the Treasury Department issued an interim final rule for companies in that very position. Bonuses paid to senior executives and other highly-paid employees at TARP recipients will be limited to one third of their total compensation.

For small community-based lenders that took just a sliver of taxpayer aid, only the CEO might be affected. But for institutions that received over $500 million in aid, including big banks Citigroup (C, Fortune 500) or Bank of America (BAC, Fortune 500), the rules would affect the top five senior officers and the 20 most highly compensated employees.

Both bank leaders and pay experts contend that the crackdown has already prompted top performers at Wall Street firms that have received taxpayer assistance to jump ship for other firms that are not beholden to government restrictions. There are fears that the trend could persist given the latest pay restrictions.

On Monday, 10 banks, including Goldman Sachs (GS, Fortune 500) and JPMorgan Chase (JPM, Fortune 500), won approval from the agency to pay back money received as part of the program. Once these banks do so, they will no longer be obligated to abide by many of the pay restrictions the administration outlined earlier this year.

Firms that remain under the government’s thumb would also have to put in place a so-called "luxury expenditure" policy. That would require top executives to get board approval for the purchase of big-ticket items.

Several banks came under fire from politicians in recent months after large expenditures came to light. Most notably, Citigroup drew the ire of the Obama administration earlier this year once its plans to take delivery of a $45 million corporate jet were made public.

Regulators also said that the seven firms which received "exceptional" government assistance — AIG, Citigroup, Bank of America, General Motors, GMAC, Chrysler and Chrysler Financial — would be required to live under a set of more severe compensation restrictions to be overseen by Feinberg.

In his new role, Feinberg will have the power to review compensation for the top 100 salaried employees at those firms. That means he will get the final say on salaries that might be deemed excessive or inappropriate, a White House official said.

One expert warned, however, that it would be troubling if Feinberg was given too much power.

"Should [Feinberg] oversee, supervise and control compensation at these companies? Sure. Should he actually be designing programs and setting individual pay levels? That’s concerning." said Susan O’Donnell, managing director at compensation consultancy Pearl Meyer & Partners.

Geithner, however, attempted to silence criticism that the administration was overstepping its bounds in the affairs of private firms.

"I want to be clear on what we are not doing. We are not capping pay," he said. "We are not setting forth precise prescriptions for how companies should set compensation, which can often be counterproductive."

–CNN’s Suzanne Malveaux contributed to this report 

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The Bank of Korea kept its interest rate unchanged today for a fourth month amid evidence record-low borrowing costs and fiscal stimulus are reviving the economy.

Governor Lee Seong Tae and his board left the seven-day repurchase rate at 2 percent in Seoul, as expected by all 15 economists surveyed by Bloomberg. The bank cut borrowing costs by 3.25 percentage points since October, the most aggressive easing since it began setting a policy rate a decade ago.

The Kospi stock index has gained 26 percent this year and the won has climbed by a fifth in the past three months on speculation the economy has passed its worst. New Zealand kept its benchmark rate unchanged at 2.5 percent today and Thailand last month ended its series of rate cuts as Asia-Pacific central bankers assess the region’s recovery from the global recession.

“There are signs the financial crisis has passed a critical point and the economic slump is easing,” said Park Hyuk Soo, a fixed-income analyst at Dongbu Securities Co. in Seoul. “The central bank is likely to keep rates where they are through the end of the year while gauging further recovery signs.”

The Kospi index rose 0.4 percent to 1,420.89 at 1 p.m. in Seoul. The won fell 0.4 percent to 1,251.60 per dollar.

South Korea joined India and China as one of the few major economies that expanded in the first quarter of 2009. The $929 billion economy grew 0.1 percent last quarter from the previous three months, when it contracted 5.1 percent.

Factory output increased for a fourth month in April and consumers became the most confident in almost two years in May.

Slump Over

“We think any drastic slowdown in the economy is over but there still are lots of uncertainties on how much the economy will rebound,” Governor Lee told reporters in Seoul today. “There are some factors that raise concerns in terms of prices, but the central bank’s stance is that it’s appropriate for overall monetary policy to be accommodative.”

Finance Minister Yoon Jeung Hyun said yesterday domestic financial markets have been stable in the face of increased tensions with North Korea payday advance online. The communist North tested a nuclear weapon in May and threatened military strikes against the South.

“The local economy is continuing its recovery trend and the global economic slump is showing signs of easing,” the finance ministry said on June 4. “Still, it’s too early to be optimistic about the outlook as there are uncertainties in the global markets, concerns about rising oil and the recovery is weak.”

Signs of Weakness

Among signs of weakness, exports fell at the fastest pace in four months in May as demand from major buyers including Japan, China and the U.S. slumped. Overseas shipments are about 60 percent of South Korea’s gross domestic product.

The jobless rate rose in May to the highest level in almost four years as slowing sales prompted manufacturers, builders and retailers to reduce their workforce to rein in costs.

To stoke economic growth, parliament on April 30 approved a 17.2 trillion-won ($13.8 billion) package of cash handouts, cheap loans, labor-market aid and infrastructure spending. That adds to the 50 trillion won in relief measures already allocated.

The Bank of Korea may even have to raise interest rates toward the end of the year as growth picks up and pressures on prices increase, according to economist Kwon Young Sun.

“It’s a matter of the central bank’s credibility to try to anchor inflation expectations,” said Kwon, from Nomura International Ltd. in Hong Kong. “Asset prices are likely to rise in coming months and the key point will be when the central bank’s policy focus changes to controlling inflation.”

Consumer prices rose 2.7 percent in May from a year earlier, the slowest pace in almost two years. The central bank aims to keep inflation between 2.5 percent and 3.5 percent on average.

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A top Obama administration lawyer urged the Supreme Court on Monday to allow Chrysler’s bankruptcy to proceed, noting that the needs of the economy outweigh the needs of the deal’s detractors.

U.S. Solicitor General Elena Kagan filed a request that the court deny an appeal by Indiana pension funds that had invested in Chrysler and say they will lose $6 million because of the bankruptcy.

Indiana Treasurer Richard Mourdock argues that the Chrysler case upends long-standing bankruptcy law. He also says President Obama has overstepped his authority by using funds from the $700 billion TARP bailout, originally enacted to rescue the financial sector, for an automaker bailout.

Kagan defended the use of funds from the Troubled Asset Relief Program and argued that Indiana’s appeal lacks legal merit. In addition, she said the losses to the Indiana funds "cannot outweigh" the potential broader problems a collapse of Chrysler would present.

"As an economic matter … blocking the transaction would undoubtedly have grave consequences," Kagan wrote.

This is the last opportunity for Mourdock to stall Chrysler’s bankruptcy process, following his unsuccessful appeal to the U.S. Courts of Appeals for the 2nd Circuit.

Mourdock filed his appeal on behalf of three Indiana pension funds, representing state police and teachers as well as a "Major Moves" construction fund.

The U.S. Supreme Court has until 4 p.m. ET on Monday to either listen to Mourdock’s appeal, or ignore it, allowing Chrysler to proceed with its bankruptcy process.

The Indiana funds represent $42 million of Chrysler’s $6.9 billion debt, which the automaker is trying to unload through the Chapter 11 process affordable health insurance. Mourdock has told CNNMoney.com that it’s his duty as state treasurer to oppose Chrysler’s bankruptcy, because some $6 million worth of pension funds would get wiped out in the deal.

Chrysler, which filed for Chapter 11 on April 30, is trying get approval to transfer its best-performing assets, such as factories and dealership contracts, to a new company called Chrysler Group, partnering with the Italian automaker Fiat.

Fiat would own 20% of Chrysler Group initially, though this share could eventually increase. The biggest share of 55% would be controlled by a United Auto Workers union trust. A minority stake of 8% would go to the U.S. government, and 2% would be held by the federal and provincial governments of Canada and Ontario.

Fiat has until June 15 to change its mind on the deal. After that date, Fiat is locked in.

Chrysler’s asset transfer was approved just hours before the bankruptcy filing of General Motors (GMGMQ) on June 1. The Chrysler bankruptcy process is being closely watched by investors, to see how it might impact GM.

The recession has dried up consumer demand, pushing Chrysler and GM to the edge of survival. Rising fuel prices, job losses and the bank industry’s temporary hiatus from offering car loans have all contributed to the decline of the Detroit-based auto industry.

President Obama pushed Chrysler and GM toward bankruptcy, after the auto makers failed to satisfy his expectations for an industry overhaul. Obama has requested that the Chapter 11 process be completed within 30 to 60 days. 

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The other new members are D. Paul Jones, 66, who was chief executive of Alabama’s Compass Bancshares Inc before selling it in 2007 to Spain’s Banco Bilbao Vizcaya Argentaria, and William Boardman, 67, a retired vice chairman of Chicago’s Bank One Corp, now part of JPMorgan Chase & Co (JPM, Fortune 500) guaranteed payday loan.

Regulators had pushed Charlotte, North Carolina-based Bank of America to overhaul its 18-person board. The addition of board members with banking experience recalls a similar shuffle at Citigroup Inc (C, Fortune 500), which also took $45 billion from the federal Troubled Asset Relief Program. Bies and Powell have also held senior roles at banks.

"The runway has become shorter" for Lewis, said Dan Genter, president of RNC Genter Capital Management in Los Angeles, which invests $2.8 billion. "Any control that Lewis had or any allegiance that he had gets diluted. He’s going to have to start to gain some altitude, or in essence they’re going to want him fired."

Lewis on Friday agreed to appear before the U.S. House Committee on Oversight and Government Reform on June 11 to discuss when he knew Merrill was on its way to a $15.84 billion fourth-quarter loss, the government role in the purchase, and the $20 billion bailout.

Walter Massey, who became chairman after shareholders in April voted to remove Lewis from that role, had led a committee of outside directors looking for new board members.

In a statement, Massey said the new directors "will make our board even stronger as we move our company toward achieving its true potential."

Lewis, Massey and the new directors were unavailable for comment.

The bank has said three directors have left since April. The Wall Street Journal said two others who have not been identified have also left, and the board may shrink further.

Lewis, 62, has said he would like to remain chief executive perhaps until 2012. While Lewis’ departure "is not imminent," regulators asked Massey to think seriously about a succession plan, the Journal said, citing a person close to the process.

The identities of the new directors surfaced a day after Bank of America named Gregory Curl, who oversaw the purchase of Merrill and Countrywide Financial Corp, to replace Chief Risk Officer Amy Woods Brinkley, who was forced out.

Rep. Edolphus Towns, who chairs the House committee that will question Lewis, said he wants to ask how the Merrill transaction became "hinged on the receipt of taxpayer dollars," and how to avoid a repeat of the "financial disaster" the country has faced over the last year.

Regulators last month ordered Bank of America to raise $33.9 billion of capital as a buffer against a deep recession. Bank of America has said it raised nearly all of that sum.

Bank of America shares closed down 1 cent to $11.86 on the New York Stock Exchange. 

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The global recession may be past its worst after central bank and government policies helped shore up investor sentiment, the Bank for International Settlements said.

“Glimmers of hope that the worst of the financial crisis and economic downturn had passed sparked a rebound in risk appetite among investors,” the Basel, Switzerland-based BIS said in its quarterly report for the three months through May. “A number of policy measures contributed importantly to the improvement in investor sentiment.”

Interest rate cuts and asset purchases by central banks to combat the worst financial crisis since the 1930s have eased strains in credit markets, the BIS said. Governments also helped stoke recovery by publishing details on bank rescue plans, as did the coordinated stimulus agreed by the Group of 20 nations in London in April.

U.S. payrolls shrank less than forecast in May, the Labor Department said June 5, reinforcing signs that the deepest recession in half a century is starting to ease. German business confidence has risen for two months after touching a 26-year low in March.

The data “turned out to be less gloomy than expected, particularly for the United States,” the report said. Still, “positive news remained scarce in Japan.” The nation’s output gap, a measure of the balance between demand and supply in the economy, fell by a record in the first quarter business cards.

The Federal Reserve, the Bank of Japan and the Bank of England have all been buying assets, partly to ease the flow of credit in their financial systems, and the European Central Bank is scheduled to join them next month.

Stress Tests

The release of U.S. bank stress tests results and details on the Public-Private Investment Program, along with news on the U.K.’s Asset Protection Scheme and the G20’s pledge of $1 trillion in aid, have also helped confidence, the BIS said.

Government bond yields have risen both because policy measures encouraged an increase in investors’ “risk appetite” and because of “growing concerns about mounting government debt,” the report said.

The yield on the 10-year Treasury note rose to the highest since November last month, while the yield on the comparable maturity U.K. government bond has returned to levels seen before the U.K. central bank started its bond purchase program.

“Sharply rising deficits have led to concerns about the sustainability of public finances and the ability of some governments to fulfill their enlarged obligations,” the BIS said.

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General Motors unveiled plans to close 14 plants and three warehouses Monday in a move that could ultimately slash up to 20,000 workers from its payrolls, as the company undergoes an historic bankruptcy restructuring.

The largest closures include a 3,405-worker assembly facility in Orion, Mich, that makes the popular Chevy Malibu and the Pontiac G6, a 2,671-employee Chevy plant in Spring Hill, Tenn. that used to make Saturns, and a truck plant in Pontiac, Mich. that employs over 1,400 people.

"We had our suspicions, but we had hoped that we were going to remain open, so it’s a little bit of a shock," Brian Larkin, an official at United Auto Workers Local 594 in Pontiac, Mich., told CNNRadio. "People are just going to have to see what their options are. Right now, that’s not clear."

The Orion, Mich and Spring Hill, Tenn. plants, along with a stamping plant in Pontiac, Mich., are being placed on "standby" status, meaning they could re-open if demand bounces back.

GM said the moves will result in lower fixed costs per vehicle, and lower and more efficient capital investment.

"Our manufacturing operations will emerge even leaner, stronger and more flexible, as part of the New GM, " Gary Cowger, an executive at GM’s Global Manufacturing and Labor Relations division, said in a statement.

At least one of the assembly plants on standby will reopen when GM starts building a new small car in the United States, although the company didn’t specify which plant.

The closures, which will be phased in over the next few years, will result in GM going from 47 plants currently to 33 by 2012.

Shuttering the factories is part of an unprecedented effort to turn around the once mighty U.S. company that has suffered from overcapacity, high labor costs and vehicle quality issues for years.

Other plants slated for closure include a 1,069-worker assembly plant in Wilmington, Del. that makes soon-to-be-discontinued Pontiac models, as well as stamping facilities in Indianapolis, Ind., and Mansfield, Ohio.

Michigan powertrain facilities in Livonia, Flint and Ypsilanti, as well as Parma, Ohio, and Fredericksburg, Va., are also on the closure list.

Additionally, a powertrain plant in Massena, N half price payday loans.Y., and a stamping plant in Grand Rapids, Mich., will shut down - moves that had been previously announced.

Warehouses in Boston, Jacksonville, Fla., and Columbus, Ohio employing a total of 232 people will also be closed.

GM (GM, Fortune 500) didn’t specify how many people will be laid off from each factory, but said between 18,000 and 20,000 workers will ultimately be affected. Over 15,000 people currently work at the facilities that were listed on Monday, according to the GM Web site.

A GM spokesman said all the laid-off employees will receive some type of severance package, although he could not comment on the details.

Lincoln Merrihew, an autos analyst at the market research firm TNS, said the compensation would likely be short term, not a paycheck-for-life type arrangement.

"All indications are that this will be intermittent, a couple of weeks pay for every year at the firm, or something like that," said Merrihew.

He also said he expects Monday’s layoffs to account for the lion’s share of job losses at GM, although what happens to workers at brands the company is spinning off - like Saturn - is another matter.

The closures are bound to be tough on the towns where these factories are located. Many have few other employment options.

The job losses are also likely to spread beyond GM, as dealerships, parts suppliers and others indirectly dependent on the auto industry feel the pinch.

In Mansfield, Ohio, the manager of a 860-person stamping plant tried to let his employees down easy.

"This decision has not been made because of something that you, plant management, the union, local or state government’s have failed to do," the manager wrote in a letter to employees, now posted on CNN affiliate WMFD’s Web site. "I want to stress the fact that GM management knows that all of you - the men and women of Mansfield - are proud, hard working people who have dedicated your working lives to building high quality parts for your assembly plants."

The Mansfield plant is set to close next June.  

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