The Truth About Cars » Bailout Watch

Bailout Watch 569: Exit Strategy? What Exit Strategy?

Edward Niedermeyer — Mon, 02 Nov 2009 21:39:25 +0000

Next up in today’s series “Selections from the GAO report on the auto bailout which closely resemble TTAC editorials of a year ago” we have the report’s discussion of a possible exit strategy. Or rather, the report’s disclosure that there’s so not an exit strategy it hurts. From the report’s conclusions: While Treasury has stated that [...]

Bailout Watch 568: Cash For Clunkers Hurt Bailout Exit Strategy

Edward Niedermeyer — Mon, 02 Nov 2009 19:57:07 +0000

More new information from today’s GAO post: Moreover, whether enough time has passed for the impact of the structural changes to be seen is unlikely, especially given that the automakers have not completed restructuring, the economy is still recovering, and new vehicle purchases remain at low levels. For instance, although the federal Car Allowance Rebate System [...]

Bailout Watch 567: Feds Mandate Chrysler Green Car

Edward Niedermeyer — Mon, 02 Nov 2009 19:34:20 +0000

From the just-released GAO report (PDF) on the auto bailout: Chrysler’s shareholders, including Treasury, have agreed that Fiat’s equity stake in Chrysler will increase if Chrysler meets certain benchmarks, such as producing a vehicle that achieves a fuel economy of 40 miles per gallon or producing a new engine in the United States. Treasury officials stated [...]

Bailout Watch 566: Bailed Out Automakers Must Meet US Production Quotas

Edward Niedermeyer — Mon, 02 Nov 2009 19:00:57 +0000

Well, it turns out that October sales won’t be released until tomorrow, but luckily we have a hot-and-sweaty-fresh report by the Government Accountability Office (PDF) to keep things interesting. And we’re learning all kinds of new things about the auto bailout. To wit: Chrysler must either manufacture 40 percent of its U.S. sales volume in the [...]

Bailout Watch 565: Small Business Adminstration Dealer Bailout Grows

Robert Farago — Fri, 30 Oct 2009 15:49:17 +0000

Car dealers are some of the most politically connected people in America. As we reported yesterday, more than a few axed GM store owners demonstrated their political muscles by forcing the nationalized automaker to rescind their franchise terminations. Further back in time, we highlighted the Obama administration’s “stealth” dealer bailout: a car dealer-specific Small Business [...]

GM To Draw On Government Funds For Delphi Rescue

Edward Niedermeyer — Thu, 29 Oct 2009 17:14:10 +0000

The WSJ reports that GM will draw “north of $2.5b” from its government escrow account to fund its own bailout of its major supplier, Delphi. Considering GM has committed $1b in debt assumption, $2b in forgiven claims and $1.75b in investments, we can assume the amount will be well north of $2.5b. But how much [...]

Christmas For GMAC: Feds Eye Another $2.8b-$5.6b

Steven Lang — Thu, 29 Oct 2009 14:35:47 +0000

No, we’re not talking about genuine job creation or a tax holiday for convicted felons. Well actually, we are. GMAC was given one humdinger of a present last year with $12.8 billion nestled near an open fire. That fire has now consumed nearly all that money. So the question now is what you should do [...]

Henderson: GM Pay Cuts “Thoughtful”

Edward Niedermeyer — Wed, 28 Oct 2009 23:15:04 +0000

We’re not public yet but we will be and if we do our job that stock is going to have real value. We thought it was fair. We thought it was thoughtful GM CEO Fritz Henderson comments on Pay Czar Kenneth Feinberg’s decision to dock his salary to a flinty $950,000. The AP reports Henderson’s total [...]

Bailout Watch 560: Feds Set to Bail Out, Nationalize GMAC

Robert Farago — Wed, 28 Oct 2009 14:05:44 +0000

. The New York Times reports that the “troubled finance company” known as GMAC is hitting-up Uncle Sam for more, as-yet-unspecified billions. The Gray Lady tells us it’s not a question of “if”, it’s a question of how GMAC and the Treasury can sleaze the deal, so that taxpayers don’t end up owning the company. ‘Cause [...]

Bailout Watch 589: GM C11 Lawyers Score $23m

Robert Farago — Mon, 26 Oct 2009 17:42:59 +0000

Is anyone surprised that the lawyers who guided “old” GM into the dustbin of history scored $255,555 a day for 90 days? The $23 million price tag seems like small beer to me. According to The Detroit News, “AP Services, headed by Al Koch, who doubles as the chief restructuring officer of GM’s bankruptcy estate, [...]

Rattner On His Detroit Adventure

Edward Niedermeyer — Wed, 21 Oct 2009 14:39:16 +0000

Former head of the Presidential Task Force on the Auto Industry, Steve Rattner has penned a retrospective for Fortune on his time guiding the auto industry bailout. He covers everything from how he assembled his team and developed a strategy to the decision to fire Rick Wagoner and the showdown with Chrysler’s creditors. There are [...]

Quote Of The Day: Betting Odds Edition

Edward Niedermeyer — Mon, 12 Oct 2009 17:50:55 +0000

“What do you think the percentage likelihood is that, if we give this deal a chance, it will succeed?” Rattner didn’t make the decision any easier. “Fifty-one per cent,” he said. “But, Mr. President, in my experience, deals get worse, not better, over time.” Ryan Lizza recounts the decision to bail out Chrysler in his epic [...]

Suppliers Still Looking For Bailout

Edward Niedermeyer — Fri, 09 Oct 2009 18:20:13 +0000

“There must be increased access to capital through the entire supply chain — from the largest tier one to the smallest family-owned firm,” Dave Andrea, vice president of industry analysis and economics at the Original Equipment Suppliers Association told the Senate Banking Committee [via The Freep]. “Without assistance this country will needlessly lose manufacturing capacity, [...]

Bailout Watch 585: Uh-Oh

Robert Farago — Sat, 03 Oct 2009 15:56:42 +0000

From The Detroit News: Pelosi said Democrats want automakers to “thrive,” and she hasn’t ruled out additional support for automakers if they show that they are “viable.”

Delphi Stealth Bailout Approved By China

Edward Niedermeyer — Tue, 29 Sep 2009 17:16:35 +0000

Chinese T-bill buyers may have provided the capital for GM’s bailout (and by extension, GM’s bailout of Delphi) but American taxpayers will have to pay them back eventually. Meanwhile, the Chinese government gets to yea-or-nay GM’s rescue of its spun-off supplier. And the yeas have it. Automotive News [sub] reports that GM will assume more [...]

SIGTARP to Audit Dealer Cuts, Government Involvement in GM

Edward Niedermeyer — Thu, 24 Sep 2009 18:46:07 +0000

Neil Barofsky, Special Inspector General for TARP (SIGTARP), will audit the closure of 2,139 GM and Chrysler dealerships, reports Automotive News [sub]. Barofsky told members of the Senate Banking Committee [download PDF of Barofsky's testimony here] that his office “will examine the process used by General Motors and Chrysler to identify which automotive dealerships should [...]

Bailout Watch 582: September Sales Crater. Now What?

Robert Farago — Thu, 17 Sep 2009 13:00:34 +0000

Speaking in Frankfurt, Fiatsler boss Sergio Marchionne warned the world that post-Cash for Clunkers American auto sales are a “disaster.” Like you didn’t see THAT one coming. Sergio reckons the industry benchmark—the Seasonally Adjusted Annual Rate (SAAR)—will fall below the “conservative” 9.5 million SAAR estimated for September. Folks, that’s after August’s 14.1 million number. “Even GM’s [...]

Bailout Watch 580: Senate Moves on $3 Billion for Delphi Pensions

Edward Niedermeyer — Mon, 14 Sep 2009 19:52:18 +0000

We noted a few months back that $6.25B worth of Delphi pensions were being dumped on the Pension Benefit Guarantee Corporation, in what we termed part of GM’s “stealth bailout.” The Detroit News reports that bills have been introduced in the Senate and House now that would appropriate $3B worth of stimulus funds towards paying [...]

Bailout Watch 579: Jet-Gate: The Aftermath

Edward Niedermeyer — Mon, 14 Sep 2009 16:24:11 +0000

The Treasury has placed new rules on TARP recipients like Chrysler and GM requiring the bailed-out firms to disclose policies on “luxury expenditures” after several banks were found to be spending exorbitant amounts of money on aircraft and offices. The Detroit News reports that firms have until Monday to disclose their spending policies, except for [...]

Bailout Watch 578: PTFOA Chief Ron Bloom: “No Supplier Bailouts. Unless There Are”

Robert Farago — Thu, 06 Aug 2009 14:27:32 +0000

Oh, to be the head of the Presidential Task Force on Automobiles (PTFOA). First, you have to pretend that you’re not running not one but two nationalized American automakers. Hands-on, hands-off, hands-on! Next, you have to beat off failing automotive suppliers with a baseball bat (so to speak). Automotive News [sub] reports that PTFOA jefe [...]

Bailout Watch 577: New GM Is Old GM . . . for Tax Purposes

Edward Niedermeyer — Tue, 04 Aug 2009 17:32:05 +0000

Wall Street Journal reports that GM will be allowed to carry-forward $16 billion in net losses from “Old GM,” creating a massive tax shelter. Normally this isn’t allowed to happen as the tax code has specific provisions to prevent firms from buying other firms strictly for their tax losses. Under normal conditions, tax losses die [...]

Bailout Watch 576: Feel the Burn

Robert Farago — Sat, 01 Aug 2009 17:25:18 +0000

TTAC commentator Corky Boyd offers a timely analysis: “The administration has loaned or agreed to loan a total of $65 billion to GM and Chrysler in exchange for 60 percent ownership of GM and an 8 percent stake in Chrysler.” If the two produce 3.5 million vehicles for the year (and that’s on the high side), that’s over [...]

Cash For Clunkers Headed For Re-Up

Edward Niedermeyer — Fri, 31 Jul 2009 15:13:45 +0000

The Freep reports that Congress could “shift $2 billion from an energy loan program” to replenish the maybe-tapped-out, maybe-not CARS program. This has been confirmed by the AAM’s Charles Territo who tells us that “HR 3435, would allow the President to transfer $2 billion dollars from previously appropriated Recovery Act funds in order [...]

Bailout Watch 575: Canadians Demand GM and Chrysler Disclose BOD Members’ Pay and Perks

Robert Farago — Fri, 31 Jul 2009 11:57:22 +0000

Her neighbors to the south may not recognize the fact (even parenthetically), but Canada kicked-in as-yet-uncounted billions in federal funds to keep the Chrysler and GM zombies in a vertical position. Whatever the final tally, the Motown subsidy was the largest bailout in Canadian history. In exchange, they received a seat on both automakers’ Board [...]

Bailout Watch 574: President Obama on Chrysler, GM Bailouts: “We’ll Get Our Money Back”

Robert Farago — Thu, 30 Jul 2009 12:03:07 +0000

Words are cheap. Detroit bailouts are expensive; the feds have spent more than $100 billion on the Motown meltdown. But don’t worry. Be happy. According to Reuters, “President Barack Obama said on Wednesday that General Motors and Chrysler Group were companies worth saving, but he expects both to repay their government loans.” But? The Prez made his [...]

Bailout Watch 573: GM Counting on $10 Billion DOE Loan

Edward Niedermeyer — Tue, 28 Jul 2009 22:18:54 +0000

Old GM ran afoul of the requirements for the original bailout ($25 billion worth of Department of Energy retooling loans). Something about a DOE requirement that the recipients be running a viable business. Now that it’s emerged from bankruptcy with taxpayer assistance, “New GM” wants . . . taxpayer assistance. In fact, it doesn’t just [...]

Review: 2010 Audi Q7 TDI

Edward Niedermeyer — Fri, 24 Jul 2009 14:15:04 +0000

One of the enduring lessons of the car game is that good vehicles don't always sell well. As a car writer who took on news analysis before ever getting manufacturer-sponsored time behind the wheel, this lesson can't help but tinge my impressions of a road test. So when my first weeklong tester arrived in the form of a Q7 TDI, I felt no desire to justify Audi's decision to bring the thing to market. After all, by any reasonable analysis, the brand built by Quattro wagons should have been the primary beneficiary of America's SUV craze. Or, at least its worst enemy. Instead the Q7 showed up for the party fashionably dressed but fashionably late. And very few wanted to buy it. With the high price of luxo ute party fuel already killing the festive vibes, is switching to a new drink enough to make Audi's SUV sales party like its 1999?

Bailout Watch 572: What Will It Take to Get You Out of a Dealership Today?

Edward Niedermeyer — Thu, 23 Jul 2009 15:35:40 +0000

More testimony over the fate of GM and Chrysler’s culled dealers yesterday revealed possible compromises, although consensus is still elusive. Chrysler VP and Associate General Counsel Lou Ann Van Der Wiele told the House Judiciary Committee (via the NYT) to ignore the pleas of Chrysler’s 789 slashed dealers, explaining that dealer reinstatement would be the [...]

Bailout Watch 571: $6.25 Billion Worth of Delphi Pensions Dropped on PBGC

Edward Niedermeyer — Wed, 22 Jul 2009 23:49:33 +0000

File this one under the “stealth bailout” file. GM dumped a number of its own pension obligations onto Delphi when the parts supplier was spun off in 1999. Now, the Detroit News reports that Delphi is abandoning $6.25 billion worth of obligations to the Pension Benefit Guarantee Corporation, the second largest such takeover by amount. [...]

Bailout Watch 570: Feds End GM/Chrysler Warranty Guarantees

Edward Niedermeyer — Tue, 21 Jul 2009 17:48:41 +0000

In prepared testimony before the House Judiciary Subcommittee, Car Czarlet Ron Bloom revealed that the government would no longer back GM and Chrysler warranties. “With the successful emergence of the new companies, consumers can now feel assured that the companies have the financial wherewithal to meet their warranty commitments on a continuing basis,” Bloom said. [...]

Bailout Watch 569: Toyota Could Still Apply For Retooling Loans

Edward Niedermeyer — Tue, 21 Jul 2009 04:58:05 +0000

An Automotive News [sub] piece on Toyota’s efforts to rethink its North American manufacturing strategy reveals Toyota NA President Yoshimi Inaba’s potential willingness to apply for US retooling loans. Though Inaba states that the Obama administration would not play a “material” role in Toyota’s return to profitability, he refused to rule out applying for Department [...]

Bailout Watch 568: Obama: “The Dealer Cull Stays”

Edward Niedermeyer — Thu, 16 Jul 2009 00:01:14 +0000

Facing a House vote tomorrow on legislation that would repeal GM and Chrysler’s dealer cuts, President Obama is urging congress to not interfere with his auto industry restructuring. Automotive News [sub] quotes an Obama statement calling the cull “a critical part of their overall restructuring to achieve long-term viability.” The Obama statement alleges that “it [...]

Bailout Watch 567: PTFOA Gone By September

Edward Niedermeyer — Tue, 14 Jul 2009 20:06:56 +0000

Rattner Leaves PTFOA

Edward Niedermeyer — Mon, 13 Jul 2009 22:37:53 +0000

From Reuters comes word that Car Czarlet Steven Rattner will be leaving the Presidential Task Force On Autos. The move “represents the start of a long-planned wind down of the autos panel” according to Reuters’ interpretation of an anonymous White House source. “With GM’s restructuring complete, Steven Rattner, whose leadership and vision were invaluable to [...]

Supply Chain Blues

Edward Niedermeyer — Thu, 02 Jul 2009 20:49:12 +0000

Consumers have a hard enough time keeping all the brands and nameplates in the US market straight; trying to keep track of the myriad suppliers that make up the bulk of the industry is nearly impossible. Even here on TTAC, our well-informed commentariat often throws up its hands at the first sign of supplier coverage. [...]

Bailout Watch 566: DOE Seeks $25 Billion More for Retooling, EVs

Robert Farago — Mon, 29 Jun 2009 18:01:58 +0000

We keep racking and stacking the Bailout Watches and Uncle Sam keeps the federal funds flowing. As Eddy reported before the weekend, Congress is looking to send another $25 billion to the Department of Energy to bless upon car companies re-tooling old factories to build more fuel-efficient products. In the form of loans, of course. [...]

Bailout Watch 565: House Moving Towards Retooling Loan Double-Down

Edward Niedermeyer — Fri, 26 Jun 2009 19:30:44 +0000

Despite the backbiting and overextension engendered by round one of the Department of Energy’s retooling loans, another $25 billion could be headed down the pipe. Automotive News [sub] reports that a second dose of retooling loans (the first having launched our Bailout Watch series) is headed towards a vote this weekend. The DOE’s loan budget [...]

Bailout Watch 564: Detroit Gets Testy over Tesla DOE Funds

Edward Niedermeyer — Fri, 26 Jun 2009 16:19:43 +0000

Manny Lopez has a cow about Tesla’s $465 million Department of Energy loan over at the Detroit News, concluding that tax dollars shouldn’t “be spent, propping up millionaires and billionaires, who, unlike their Detroit CEO brethren, fly in private planes when they’re not toying around town in their electric cars.” And why is it that [...]

Bailout Watch 563: GM Asset Sale Draws Closer

Edward Niedermeyer — Wed, 24 Jun 2009 15:03:54 +0000

GM spokesfolks confirm to Automotive News [sub] that the deadline to submit bids for the General Motors asset sale has passed. And surprise! Nobody has taken on the Treasury in the 363 sale’s bidding process. Sorry, America. But AP Services LLC, an affiliate of AlixPartners is having its $58.9 million in fees contested by the [...]

Bailout Watch 562: Cash for Clunkers Awaits Obama’s Signature

Edward Niedermeyer — Thu, 18 Jun 2009 23:41:29 +0000

A cash-for-clunker bill, “stripped down” to $1 billion, has passed the Senate. Automotive News [sub] reports that the new bill will go into effect one month after it is signed by the president and will offer $3,500-$4,500 rebates only through November. The spending cap had been set previously at $4 billion. Sen. Judd Gregg [...]

Bishop to PWN Saab?

Robert Farago — Thu, 18 Jun 2009 13:39:43 +0000

TTAC reader and marketing consultant John Charles of Stockholm, Sweden, was gracious enough to send us some more info on investor Mark Bishop, the man who would be king of Saab. Hi, I read your very interesting piece on Mark Bishop and SAAB. However you (unintentionally, I imagine) missed out a few details. I have found out [...]

Bailout Watch 561: PTFOA Steve Rattner: Psycho Killer?

Robert Farago — Tue, 16 Jun 2009 12:27:10 +0000

File this one under “You’re Talking a Lot, But You’re Not Saying Anything.” The Detroit News‘ “wide ranging” interview Presidential Task Force on Automobiles (PTFOA) jefe Steve Rattner’s ranges entirely over well-trodden ground. In fact, you’ve got to give the DetN credit for publishing an entire pow-wow with the man behind the meltdown without revealing [...]

Bailout Watch 560: Bill Ford: “God Bless Uncle Sam”

Robert Farago — Mon, 15 Jun 2009 15:13:06 +0000

Bailout Watch 559: Barney Frank: “Saved GM Facility was ‘Environmentally Sound’”

Robert Farago — Mon, 15 Jun 2009 15:00:00 +0000

After my Wall Street Journal Op-Ed gave Massachusetts Congressman Barney Frank serious shit for personally intervening with GM’s turnaround plans—to save a parts distribution warehouse in his district—the WSJ has gone on the attack. OK, sure, they would have done it anyway. It probably had nothing to do with me whatsoever. Anyway, personal ego issues aside, the [...]

Bailout Watch 558: GM Dealer Network Analysis Revealed

Robert Farago — Sat, 13 Jun 2009 12:52:05 +0000

Well, we still don’t have that list of doomed GM dealers. Senator Rockefeller’s office has failed to return eight phone calls asking for the information: the list he requested from GM CEO Fritz Henderson, who promised, under oath to provide. Meanwhile, here, finally, is the supporting documentation for GM’s dealer cull. The bankrupt automaker submitted [...]

Ask the Best and Brightest: Which Congressional Delegation Will Build the New GM Compact?

Edward Niedermeyer — Fri, 12 Jun 2009 16:28:35 +0000

GM has bowed to political pressure, deciding that it won’t use taxpayer money to import compact vehicles from China. Instead, Aveo II (a.k.a. the Chevy Viva) will be built at one of three existing GM plants. (Hello, DOE retooling loans!) Up for the contract are Michigan’s Orion Township, Tennessee’s Spring Hill and Wisconsin’s Janesville assembly [...]

Bailout Watch 557: Fiat “Buys” Chrysler

Edward Niedermeyer — Wed, 10 Jun 2009 14:50:35 +0000

The sale of Chrysler’s assets to Fiat is complete, reports the New York Times. Paperwork (and the transfer of $6.6 billion in Treasury money) was completed at about 9 a.m. Eastern, after news came yesterday that the Supreme Court would not hear the Indiana pension fund challenge. News reports refer to the speed of the [...]

Bailout Watch 554: Cash For Clunkers Passes House

Edward Niedermeyer — Wed, 10 Jun 2009 14:45:43 +0000

Bailout Watch 556: “Americans aren’t thrilled with government involvement in the U.S. auto companies”

Robert Farago — Wed, 10 Jun 2009 13:45:15 +0000

Not thrilled meaning, I suppose, that they’re not in favor of it. Using that definition, AutoPacific’s summation of their survey of 900 Americans is an example of English understatement. According to their poll, “Fifty-four percent of respondents believe that General Motors should have been allowed to fail, while 58% believe that Chrysler should have been [...]

Bailout Watch 555: Supreme Court Gives Fiatsler Thumbs Up

John Horner — Wed, 10 Jun 2009 02:00:59 +0000

Bailout Watch 553: If We’re Going to Own GM Shouldn’t We Actually Own GM?

Edward Niedermeyer — Tue, 09 Jun 2009 17:54:42 +0000

That’s the question motivating an alternative plan for the government’s “investment” in GM drafted by Sen. Lamar Alexander. Under Alexander’s plan, the Treasury secretary would be required to distribute the government’s GM and Chrysler stock to the 120m or so Americans who submitted tax returns for 2008. “This is the fastest way to get the [...]

Bailout Watch 552: Boycott GM? Rush Limbaugh is Insane

Robert Farago — Tue, 09 Jun 2009 12:43:22 +0000

Thanks to my free market-based, anti-bailout stance, some of TTAC’s Best and Brightest view me as an autoblogospherical arch-conservative. Which often leads to comparisons to or, at least, invocations of Rush Limbaugh. This despite the fact that I’ve pointed out that the liberal’s largest (in all senses of the word) bogeyman has been sucking on [...]

Bailout Watch 551: Further Testimony Planned

Edward Niedermeyer — Mon, 08 Jun 2009 23:14:46 +0000

In addition to arguing against Indiana’s pension fund challenge, the Obama administration is sending PTFOA members Ron Bloom and Ed Montgomery to formally defend its handling of the GM and Chrysler bankruptcies to the Senate Banking Committee on Wednesday. This is the first such testimony from the PTFOA, and it comes (as the Freep puts [...]

Bailout Watch 550: Chrysler Sale Delayed By Supreme Court

Edward Niedermeyer — Mon, 08 Jun 2009 21:00:53 +0000

Supreme Court Justice Ruth Bader Ginsburg has ordered that the sale of Chrysler to Fiat is “stayed pending further order,” reports the AP. “Was TARP money used illegally?” asks the WSJ Deal Journal. It won’t be easy to prove, is the professorial opinion. Oh, and did we mention that the Obama administration has filed a [...]

Bailout Watch 549: Feds to Crack Down On ChryCo, GM Exec Pay

Robert Farago — Mon, 08 Jun 2009 13:28:14 +0000

Don’t worry Detroit: you’re not being singled out for “special” federal supervision (perish the thought). The New York Times reports that Congress is taking control of the pay and compensation for all beneficiaries of federal largesse who’ve double-dipped into the taxpayer’s purse. “The Obama administration plans to require banks and corporations that have received two [...]

Bailout Watch 548: WaPo Carmudgeon’s Departing Salvo

Robert Farago — Sun, 07 Jun 2009 12:08:55 +0000

Regular readers will know that we’ve taken Washington Post carmudgeon Warren Brown to task for his shameless Motown cheerleading up to and through the federal bailout. You may have also noticed a huge disconnect between Warren’s blind bailout boosterism and his paper’s entirely skeptical stance on federal intervention in the U.S. automotive industry. In an [...]

Bailout Watch 547: Michigan Pols Look for GM Plant Closing Reprieve

Robert Farago — Sat, 06 Jun 2009 03:25:28 +0000

Not much info here, but the story’s major thread is clear enough. After discovering that Massachusetts Congressional Representative Barney Frank won a reprieve for a local GM operation, Michigan Reps are looking for some of the same non-action for their constituents. The Detroit Free Press is uncharacteristically tight-lipped (uninformed?) about the who, when and where—although [...]

Rasmussen Poll: 17% of Americans Support GM Boycott

Edward Niedermeyer — Fri, 05 Jun 2009 20:38:38 +0000

According to a recent Rasmussen poll, 26 percent of those surveyed support the GM bailout. Yes, but 53 percent describe the bailout as a “bad idea,” and of that majority of respondents, 30 percent of those support a boycott. The idea of boycotting a government-owned GM was most popular among men and middle-income respondents. Also, 51 [...]

Bailout Watch 546: Argentina Snags (Relative) Bailout Bargain

Edward Niedermeyer — Fri, 05 Jun 2009 18:03:51 +0000

Bloomberg reports that Argentina will loan $70 million to GM out of its $24 billion recently-nationalized social security fund. In return, GM has promised to use the money to complete the Brazil-based development of the forthcoming Chevy Viva. And according to Argentinian president Cristina Fernandez DeKirchner, “one of the conditions we demanded to provide this [...]

Bailout Watch 545: Feds Fund $2.5 Billion Back Door Delphi Bailout

Robert Farago — Fri, 05 Jun 2009 00:40:03 +0000

As predicted, the feds have bailed out bankrupt parts maker and former GM division Delphi, through GM, to the tune of $2.5 billion. That doesn’t include the $250 million direct subsidy from American taxpayers. On other hand, GM no longer needs to buy those five Delphi factories GM as previously reported. The cash for the Delphi buyout arrives [...]

Bailout Watch 544: ‘Cause You Gotta Have

Robert Farago — Wed, 03 Jun 2009 20:04:01 +0000

Here’s an email making the rounds amongst GM’s remaining employees: Just announced: Now through June 30, 2009, the GM Employee Discount for Friends program* lets you share employee pricing with anyone you know who owns a competitive vehicle. It’s the ideal way to get more friends into GM vehicles. Here’s how it works: Active salaried GM employees can [...]

Bailout Watch 543: Delphi Emerges From C11

Robert Farago — Tue, 02 Jun 2009 17:57:31 +0000

Bankrupt parts maker Delphi is set to finally leave bankruptcy, thanks to a little help from American taxpayers (who else?). OK, sure, technically, only a small fraction of Delphi’s just announced $3.6 billion dollar rescue pack will come from the federally funded “new” GM. We’re talking table scraps, at $250 million. Mind you, this cool [...]

Bailout Watch 542: Doh! We Forgot the Tax Breaks!

Robert Farago — Sat, 30 May 2009 12:13:56 +0000

Previously, on Who Wants to Own an Automaker, I estimated the Motown meltdown has sucked more than $100 billion from the taxpayers’ purse. I forgot to mention the tax breaks that the Treasury Department will bestow upon “new” Chrysler and “new” GM. The Desert Sun reports that GM will benefit from Uncle Sam’s new rules [...]

Bailout Watch 541: Treasury Gives New Chrysler $6.6 Billion; Bailout Tally Tops $100 Billion

Robert Farago — Sat, 30 May 2009 01:10:34 +0000

Bloomberg reports that the US Treasury has decided to bless post-C11 Fiat-controlled Chrysler with a $6.6 billion dowry. And just for S&G, the feds will write a check to pre-C11 GM for an “extra” $360.6 million, earmarked for its presidentially guaranteed warranty program. (That’s thanks to the Troubled Asset Relief Program, for some reason.) “The [...]

Bailout Watch 540: NYT Loses Faith in New GM

Robert Farago — Fri, 29 May 2009 18:05:46 +0000

The New York Times: For taxpayers to be made whole, the new mini-G.M. would have to produce earnings sufficient to support an enterprise value of at least $95 billion, the sum of a $69 billion market cap and its $26 billion of debt and preferred stock under the restructuring plan. Using market valuation multiples of five [...]

Bailout Watch 539: HERE’s Your GD Bailout! (Car Dealers)

Robert Farago — Fri, 29 May 2009 02:33:02 +0000

After taking plenty o’ heat for “helping” Chrysler and GM shit-can nearly 2000 car dealers, the Obama administration has arranged a little sugar for the remaining stores—and then some. They’ve created a federal loan guarantee program for dealer inventory financing that’s worth, you guessed it, billions. Automotive News [AN, sub] reveals that the Small Business [...]

Bailout Watch 538: Feds to “Buy” Delphi for GM for Undisclosed Billions

Robert Farago — Wed, 27 May 2009 01:32:40 +0000

No surprise there. GM needs its former in-house parts maker to survive, and Delphi is as dead as a doornail. After almost four years in bankruptcy, no one in their right mind would invest in Delphi. In other words, you’re up! Automotive News [sub] reports the glad tidings (without once threatening to connect the dots): GM [...]

Bailout Watch 537: Obama’s Endless Love

Robert Farago — Sat, 23 May 2009 17:24:12 +0000

Automotive News [sub] has seen an advance copy of an interview with president Obama on C-Span. Strangely, re: GM’s future, Barack doesn’t use the “b” word. But the prez does promise to return the automaker to private command and control. Eventually. “Ultimately, I think that GM is going to be a strong company, and we [...]

Bailout Watch 536: GM Draws an “Extra” $2 Billion pre-C11

Robert Farago — Sat, 23 May 2009 00:12:11 +0000

Bloomberg reports that General Motors drew $2 billion more than previously announced, feeding the cash burn raging amongst the company’s embers (or something like that). May’s federal payout brings The General’s monthly total to $4 billion. Not including the new $7.5 billion payment heading to its former captive still current lender GMAC. Which is on [...]

Bailout Watch 535: Nader: PTFOA “Unsafe at any Speed”

Robert Farago — Fri, 22 May 2009 14:02:32 +0000

According to the Detroit Free Press, opposition to the Presidential-Task-Force-on-Automobiles-administered Motown meltdown mishegos is “growing.” Who’d a thunk it? But wait! “They” are not voters fed up with dozens of bailout billions shoveled down a Chrysler and GM-shaped rathole. Nor are “they” free marketeers objecting to a sitting president telling a CEO to take a hike. Nope, [...]

Bailout Watch 534: Feds to Give Post-C11 GM $30 Billion

Robert Farago — Fri, 22 May 2009 11:05:13 +0000

Anyone out there keeping track of how much money the federal government has plowed into GM, as the automaker downsizes to death? The Washington Post reckons that the next post-bankruptcy tranche—the debtor-in-possession financing needed to cleave GM into “good” and “bad” bits and keep both balls in the air—will be $30 billion. The paper also [...]

Bailout Watch 533: Investor Confidence Ebbs

Ronnie Schreiber — Fri, 22 May 2009 02:36:29 +0000

More than a few TTAC commentators pooh-poohed the risk to the capital markets by Obama giving the UAW cuts ahead of senior creditors. Now the chickens are coming home to roost. There was that thing I sent you yesterday about Indiana, burned in the Chrysler bankruptcy, announcing the state won’t invest in bailout companies. Legislators [...]

Bailout Watch 532: GM To Sell to The Feds, Feds To Forgive Debt

Edward Niedermeyer — Wed, 20 May 2009 00:43:34 +0000

Reuters is reporting that GM’s bankruptcy plan is just like Chrysler’s . . . only without the Italian middleman. “A quick sale of the company’s healthy assets to a new company initially owned by the U.S. government,” is how the Reuters source puts it. “Bad GM” would linger in bankruptcy to help pay off claims. [...]

Bailout Watch 531: U.S. Auto Suppliers Need $33.5 Billion to Stay Solvent. Or More.

Robert Farago — Thu, 14 May 2009 16:12:50 +0000

Don’t look at me. I already gave at the office. Gentlemen, I refer you to the $5 billion already allocated to prop up automotive suppliers attached to domestic car makers with an umbilical chord made of piano wire. OK, that particular area of the bailout buffet table is shrouded in red tape at the moment. [...]

Bailout Watch 530: CO2 Scheme Becomes Detroit Handout?

Edward Niedermeyer — Wed, 13 May 2009 22:55:04 +0000

The Detroit News reports that Michigan’s congressional delegation has secured an agreement with House Democrats that could send three percent of the revenue from carbon emissions permits to American automakers starting in 2012. That would amount to billions of dollars every year, says DetN, and that’s not all. The new compromise also includes changes to [...]

Bailout Watch 529: About Those Mysterious GM Cars From China

Bertel Schmitt — Wed, 13 May 2009 06:33:33 +0000

Yesterday, we had a post about far-reaching plans of GM. They wanted to sell exactly 17,335 made-in-China cars in the U.S.—by 2011. And triple that audacious number (51,546) by 2014. Or so they say in a (supposedly) confidential 12-page presentation to members of Congress. Trouble is, nobody really knows who will make the cars. Gasgoo says today, [...]

Will Sergio Marchionne Work For One Dollar?

Edward Niedermeyer — Tue, 12 May 2009 22:38:04 +0000

Are You Ready To Own GM For “At Least Two Years”?

Edward Niedermeyer — Tue, 12 May 2009 16:06:33 +0000

You’d better be, because the White House told Wall Street Journal that it will hold onto its GM stake for “at least two years.” Out of “necessity,” no less. And burning $10bn in cash per quarter all the way. According to the WSJ report, the White House still doesn’t want to involve itself in day-to-day [...]

Bailout Watch 528: GM to Sell Chinese Vehicles in the U.S.

Robert Farago — Tue, 12 May 2009 13:38:31 +0000

Folks, we’re well into headless chicken territory here, as GM slides towards an end-of-the-month bankruptcy filing, pretending that it has clue one what to do next. Automotive News [sub] reports the latest End of Days delusion. GM’s circulating a “plan” amongst its legislative sponsors announcing its intention to sell 17,335 Chinese made somethingorothers in the [...]

“GMAC is a financial black hole stuffed into a governance black box”

Robert Farago — Tue, 12 May 2009 00:59:08 +0000

The mainstream media is beginning to wake up to GMAC’s seemingly endless call on the public purse. Thanks to chronic mismanagement—and an 11th hour, last-minute back room deal with The Fed and the US Treasury that turned the virtually bankrupt lender into a bank that couldn’t pass a stress test if it was doped-up to [...]

Bailout Watch 527: $80 Billion. And Counting.

Edward Niedermeyer — Mon, 11 May 2009 22:04:59 +0000

Time did the math, and reports that the total cost of the recent wave of automotive industry “assistance” has reached $83 billion. With Chrysler’s bankruptcy not going well (286,687 2009 models and 36,370 2008 models languishing on lots, according to Fortune) and GM about to join it in court, that number will top $100 million [...]

PTFOA Halves Chrysler Ad Budget

Edward Niedermeyer — Mon, 11 May 2009 20:11:52 +0000

Remember the whole “we do not want to run the automakers” routine? Cue up the laugh track. President Obama’s PTFOA has intervened to halve Chrysler’s ad budget during its taxpayer-funded bankruptcy, reports Automotive News [sub]. Chrysler had requested $134 million for advertising during its alleged nine-week bankruptcy. That request was halved by the PTFOA because [...]

Bailout Watch 526: Supplier Bailout Fails Dramatically

Edward Niedermeyer — Mon, 11 May 2009 17:44:11 +0000

Review: 2009 Acura RDX

Megan Benoit — Mon, 11 May 2009 14:25:55 +0000

Some vehicles are doomed from the start. Take the Acura RDX: a not-inexpensive CUV with aesthetically challenging looks nestling amongst Honda's "Huh?" brand. The RDX seems carefully designed to appeal to the few, the proud, the pistonheads. You know: enthusiasts who absolutely must have a willing engine, a chassis that's a suitable dance partner and the elevated driving position of SUV---all at a price that's significantly higher than more sensible (if dull) alternatives made by brands whose street cred didn't die with the Integra. You see how that doesn't work?

Bailout Watch 525: Is Bob Lutz’ Chrysler Pension Bankruptcy Proof?

Robert Farago — Mon, 11 May 2009 11:40:55 +0000

TheDetroitBureau.com (TDB) reports that GM’s lame duck Car Czar is a Chrysler creditor. The size and nature of Bob Lutz’ claim against the other zombie automaker is not yet known. But I reckon the ex-ChryCo exec’s pensions and bennies got sucked into the black hole. (Hey, I did warn him.) In fact, Lutz is going [...]

Bailout Watch 524: C11 Chrysler Busy Bouncing Checks

Robert Farago — Sat, 09 May 2009 23:04:43 +0000

Chrysler’s stiffed a member of our Best and Brightest: When I purchased my ‘09 300C I traded in an ‘05 that had a Chrysler extended service contract with time and mileage remaining. I called Chrysler and they gave me all of the information for obtaining a pro-rata refund as per the contract. I faxed it over [...]

Bailout Watch 523: GM to Boost Foreign Production 98%

Robert Farago — Sat, 09 May 2009 16:32:06 +0000

The Detroit News has obtained a confidential memo from GM to federal legislators. The smoking gun reveals that the soon-to-be-taxpayer-owned (officially) automaker plans to boost US sales of vehicles built in China, Mexico, South Korea and Japan by 98 percent (to 365k units). In the face of union criticism of the plans, GM claims that the percentage [...]

Bailout Watch 522: Feds Ready to “Facilitate” GM C11

Robert Farago — Sat, 09 May 2009 02:37:22 +0000

The US Treasury Secretary had a little chin wag with Reuters re: GM. It seem that Mr. Geithner is as pleased as punch with his minions’ work with Chrysler’s bankruptcy. So pleased, in fact, he sees ChryCo’s dissolution solution as a template for GM’s C11. You know “if”. “There is a range of ways to [...]

Bailout Watch 521: Canadians Hosed by Chrysler

Robert Farago — Thu, 07 May 2009 01:02:06 +0000

Time steps up to the e-plate with some timely cross-border bailout comparative analysis. “Canada is paying a significant premium over the U.S. to save Chrysler jobs at home, with no guarantees that the billions it is laying at the automaker’s door will ever be repaid or do anything to help maintain the country’s 20% production [...]

Update: Details of US Car Scrappage Scheme Emerge

Jeff Puthuff — Wed, 06 May 2009 00:05:23 +0000

In a follow up to E. Niedermeyer’s previous post, details have emerged about the scheme to give rebates to buyers who trade “clunkers” for new, fuel-efficient vehicles. FT.com (Financial Times) reports that the program will cost taxpayers about $4 billion and will spur, according Brian Johnson, an analyst at Barclays Capital, the sale of 3 [...]

Bailout Watch 520: Clunker Bill, Retooling Loan Double-Down Move Forward

Edward Niedermeyer — Tue, 05 May 2009 18:51:27 +0000

Who would have guessed it? As soon as we start reflecting on what exactly this little government foray into the auto sector will cost us, DC goes and prepares to bump up the sum. From ABC News comes a report that Democrat wranglings on the upcoming climate bill have yielded a compromise on forthcoming “cash-for-clunker” [...]

Bailout Watch 519: Help Wanted

Robert Farago — Mon, 04 May 2009 12:10:07 +0000

In “General Motors Death Watch 251,” I suggested that The Presidential Task Force on Automobiles (PTFOA) terminate GM’s entire management “team” and replace them with fresh talent. Easier said than done. The number of people qualified to run a car company may stretch to a couple of dozen. But it may not. The number of [...]

Wild Ass Rumor Of The Day: Non-TARP Chrysler Holdouts To Be Paid Off

Edward Niedermeyer — Sat, 02 May 2009 17:32:13 +0000

With TARP money, of course. Or so says our man on the inside of Chrysler’s bankruptcy proceedings. And apparently the holdouts will get even more than the already TARPed bondholders. Which means that although Obama may not “stand with” the “hedge fund holdouts,” apparently he’s OK with writing them a check for their trouble(d assets). [...]

Bailout Watch 518: How Much is This Boondoggle Going to Cost Me?

Robert Farago — Sat, 02 May 2009 12:38:04 +0000

Some Detroiters honest-to-God believe that Chrysler and GM will repay the money “loaned” to them by the federal government. That’s a leap of faith that would have taken Evil Knievel across the Grand Canyon (proper) and on to Maui. But you know what? In all this excitement, I’ve lost track of how many billions we’re [...]

Bailout Watch 517: Fiat CEO Sergio Marchionne’s Official Statement On Chrysler Alliance

Edward Niedermeyer — Thu, 30 Apr 2009 18:54:25 +0000

“This transaction represents a constructive and important solution to the problems that have plagued not just Chrysler in recent years, but the global automotive industry as a whole. Bringing together Fiat’s world-class technology, platforms and power-trains for small and medium sized cars, and its extensive distribution network in Latin America and Europe with Chrysler’s rich [...]

Bailout Watch 516: PTFOA Fires Chrysler CEO Nardelli

Robert Farago — Thu, 30 Apr 2009 17:36:30 +0000

The Presidential Task Force on Automobiles (PTFOA) has claimed its second Motown CEO scalp. Chrysler CEO Bob Nardelli announced his departure in paragraph eight of Chrysler’s official statement on the automaker’s Chapter 11 bankruptcy filing. “Now is an appropriate time to let others take the lead in the transformation of Chrysler with Fiat,” said Nardelli. “I [...]

Chrysler Gets $8 Billion For 60-Day Bankruptcy

Edward Niedermeyer — Thu, 30 Apr 2009 17:18:25 +0000

Or, as President Obama puts it, “a new lease on life.” Chrysler (”a company with a particular claim on our American identity”) will file for Chapter 11 bankruptcy in Manhattan court today, as Obama has promised $3.5 billion in federal aid over the next 30 days in hopes of hitching the troubled automaker to Fiat. [...]

Bailout Watch 515: President Obama’s March 30 Statement on Chrysler

Robert Farago — Thu, 30 Apr 2009 14:38:14 +0000

And that’s why we’ll give Chrysler and Fiat 30 days to overcome these hurdles and reach a final agreement—and we will provide Chrysler with adequate capital to continue operating during that time. If they are able to come to a sound agreement that protects American taxpayers, we will consider lending up to $6 billion to [...]

Bailout Watch 514: Would American Leyland Violate Anti-Trust Laws? And What About the UAW’s Tax Status?

Robert Farago — Thu, 30 Apr 2009 13:12:32 +0000

TTAC Commentator 70 Chevelle SS454 raises some good points about rumors (perpetually perpetuated here) that the feds’ plan to combine Chrysler and GM into “American Leyland.” The clever member of our B&B wrote his analysis in response to John Horner’s comment, which addressed the UAW’s role should they parlay their (allegedly) forthcoming shares in Chrysler [...]

From The Obama Press Conference

Edward Niedermeyer — Thu, 30 Apr 2009 04:20:13 +0000

(Via AP/Google) Deb Price, Detroit News: Thank you, Mr. President. On the domestic auto industry, have you determined that bankruptcy is the only option to restructure Chrysler? And do you believe that the deep cuts in plant closings that were outlined this week by General Motors are sufficient? OBAMA: Let me speak to Chrysler first because the [...]