When Chrysler stuck its nose in the bailout trough, the ailng American automaker’s executives had to wonder what the Hell anyone within the company could possibly tell lawmakers/money givers about Chrysler’s viability. Except, you know, the fact that they don’t have any. But never underestimate the power of positive PR or, as we call it around here, bullshit. To wit: former ToMoCo Prez and current ChryCo co-Prez Jim Press’ comments to Automotive News [sub, AN] last week. “He suggested that Chrysler could show the way to a sustainable model for a smaller U.S. auto industry. ‘If there’s one company in America that can build high-craftsmanship, innovative vehicles, it’s Chrysler,’ Press said.” Hey, is Jimbo saying American can’t build high-craftsmanship, innovative vehicles? Anyway, down ye olde rabbit hole we go…

Egan-Jones Ratings is a relatively obscure little outfit out of Haverford, PA. It’s one of those companies whose website doesn’t have a flashy design or, for that matter, a phone number (just a contact form). Forbes rates them number 1 on their list of eight financial mavens (not ten!) “who saw the crisis coming.” “A vocal critic of rivals Moody’s, Fitch, and Standard & Poor’s, Egan has a track record of warning investors about poor credit quality long before the Big Three ratings agencies. Most recently he said to shun subprime-mortgage-backed bonds even while the other agencies said these were investment-grade credits.” And now Sean has a few words on Ford, via a ginormous Fordetorial in Bloomberg. ““It’s unrealistic of Alan [Mulally] to expect Ford to survive, let alone profit, when they’re experiencing a 30-plus percent decline in sales. Without a bankruptcy filing and a complete reorganization, Ford is not going to be profitable, period.” Egan ain’t kidding. His company rates Ford’s debt a D, its lowest level. And if that’s not enough blowback for Mulally-loving Fordophiles, here’s some more…

With $17.4b pledged to GM and Chrysler, and the Canadian “plus one” on the way (er, “plus several billion,” actually), the dark days of Carpocamageddon are all but over, right? Of course not. As several of the B&B point out in comments on the bailout announcement, GMAC is a giant question mark hanging over the entire situation. The former GM captive lender is headed for a massive GDIF (God Damn, It’s Friday) moment today unless about $5b of healthy capital lands on its lap… within hours. The AP reports that GMAC admits that it has no way of extending or sweetening the deal, implying that bankruptcy is an inevitability. And here’s the kicker: according to Brian Johnson of Barclays Capital, if GMAC were to fail, GM could need an additional $9 billion to $13 billion in funding to supply financing to its dealers. And GM only gets $9.4b from the bailout until February. One step forward and two steps back? Actually, the real bad news which the bailout does nothing to stop comes from GM bondholders. And their newly hired legal help.

The fate of GM’s dead brands walking generates rumor and hearsay like few other topics. GM is unraveling into a buyers market, and secret talks are typically denied within hours of their leaking. Ironically, one detail that rumors seem to have in common is the proliferation of Opels in the United States. Thus far Saturn has been the defacto donor brand for American Opels, but Motor Trend now claims it “makes sense” for Buick to cover Opel with brand familiarity.

The Wall Street Journal (WSJ) reports that General Motor’s former captive finance unit and current chest-strapped TNT device looks set to miss its deadline for a debt-for-equity swap. GMAC needs to get the deal done to transform itself into a bank and score federal funding under the Troubled Asset Relief Plan (TARP). “GMAC needs to show $30 billion of capital in order to become a bank holding company regulated by the Federal Reserve… As of Wednesday, GMAC had received 58% of existing, eligible GMAC debt securities and 38% of outstanding debt securities of ResCap (as the mortgage unit is also known) — little changed from late Tuesday. Around 75% of the selected securities must be tendered for the proposed debt restructuring to succeed in raising capital that would go toward satisfying GMAC’s conditions to become a bank holding company.” Those plans took a major hit today…

“There’s an orderly way to do bankruptcy that produces a soft landing,” White House spokeswoman Dana Perino said today. “That’s one of the options.” As we’ve said before, the longer this goes on, the shorter the walk to bankruptcy court. Speaking of which, Bloomberg reports that “The federal bankruptcy court in Detroit, preparing for large reorganizations including possible filings by General Motors Corp., Chrysler LLC or Ford Motor Co., has changed some of its rules. Efforts to make the jurisdiction more business-friendly may prompt automakers to seek protection in their Michigan home, rather than in the traditional, big-business venues of New York and Delaware.” The court has passed a new a dministrative order that empowers the chief judge to choose a bankruptcy judge for any given case (as opposed to random selection). At the same time, they’re reviewing staffing, security and technology functions, waiting for the “big one.” Or two. Or three. “There is no district in the country that has a greater stake in the outcome of a filing by one of the Big 3 than the Eastern District of Michigan,” said Chief Judge Steven Rhodes. Ironically enough, it looks like there’s one part of Motown’s business where the state will fight outsourcing.

TTAC has long predicted a supplier-led “run on the bank” scenario, whereby suppliers demand COD and destroy Chrysler, GM and (yes) Ford’s life-sustaining cash float. While the automakers have managed to stave-off that eventuality– as suppliers jostle for their position in line at the bailout buffet– it seems that Chrysler dealers are showing the same level of respect to the corporate mothership as the channel stuffing colossus has shown its dealers. The Wall Street Journal reports that “Chrysler LLC’s financing arm has warned dealers it may have to temporarily stop loans that dealers use to pay for stocking vehicles on their lots as a result of a recent wave of withdrawals from a fund used to pay off those loans. In a letter dated Dec. 12, Chrysler Financial Chief Executive Tom Gilman said dealers have been withdrawing up to $60 million a day from the fund…. Gilman said more than $1.5 billion has been withdrawn from the CMA [cash management account] fund since July.”

Your faithful blogger is suffering this morning. A night of birthday celebration is currently proving that knowledge of moderation (and the mysteries of escrow) do not simply come with age. But compared to the hangover caused by a decade-long cheap credit binge, my suffering seems downright tolerable. Just ask GMAC. The Detroit News reports that GM’s once-captive lender has delayed the delivery date for debt swap deliveries for the fifth time, as it desperately attempts to round up enough capital to achieve bank holding status. Despite improving its offer last week, GMAC still says it needs “significant additional participation” from bondholders to make its goal of $30b in regulatory capital. Luckily the DetN is happy to sugar-coat the pain by headlining the story in as optimistic terms as possible (GMAC closer to raising enough capital to become bank holding company). And though technically true, there’s devils in them thar details.

I discovered Michael Furman’s photography whilst covering the Ralph Lauren car exhibit at The Boston Museum of Fine Arts. The two men were made for each other. Furman’s photographs portray automobiles as perfect objects: gleaming, seamless sculptures that exist outside the confines of entropic reality. Lauren’s collection IS perfect, restored to a level of flawlessness that makes an airbrushed cover shot of Britney Spears look like a photo booth snapshot. And then painted to a gloss to shame Adriana Lima’s luscious lips. When I talked to Furman about Lauren’s collection (Furman shot the catalogue), the artist showed an encyclopedic knowledge of GM’s design heyday. And now, here it is. The publisher was kind enough to send me a couple of copies [full description of the book after the jump]. One goes to Eddy for his birthday (today!). One goes to the commentator who can best tell me, in ten words or less, how GM can turn around its business. Thank you, in advance, for your submissions. [NB: to see the horizontal images properly, please click on them a second time]

According to Yahoo! Finance, “General Motors Corp. said in a regulatory filing Monday [full text after the jump] that it and GMAC LLC agreed to temporarily adjust the financing company’s terms for making advance payments to the automaker for the wholesale financing of vehicles sold to GM dealers.” Zooming in… “GMAC typically pays GM the invoice amount for each vehicle shipped by the automaker to a GMAC-financed dealer on the first business day following the vehicle’s shipment.” Closer… “Under the deal, GMAC won’t be required to pay the invoice amount until that amount is due from the dealer, which will allow GMAC to defer payment of up to $1.5 billion in cash due to GM until Dec. 30. GM will have a security interest in the financed vehicles during the shipping period.” Holy brink of bankruptcy Batman! Clearly, GM intends to use federal bailout bucks– should there be any– to prop-up GMAC. Never mind that, this move virtually eliminates GM’s cash flow (such as it is). I mean, GM won’t get paid for these vehicles in months. If ever. And if GMAC is down to its last $1.5b of liquidity, this little paper shuffling exercise ain’t gonna save nothin’. Bye-bye GMAC, arrivederci GM. Drink up lads. Last orders.

Once upon a time, GM’s captive finance unit GMAC was the engine of its success, pouring billions and billions and billions of dollars into the General’s corporate coffers. At some point, the tail wagged the dog: cheap credit and lax lending practices fueled an unsustainable growth in new car sales. A bubble that recently burst (in case you hadn’t noticed). Meanwhile, GMAC’s mortgage unit ResCap pursued the same no-loans-barred policy, only worse. Then, in his endless (seemingly, at the time) pursuit of propping-up GM’s bottom line with asset sales, CEO Rick Wagoner sold 51 percent of the soon-to-be-troubled finance unit to, of all people, Cerberus (owners of Chrysler and Chrysler financial). Which brings us to today’s GMAC, which is about to go tango uniform, hoisted by its own retard. The only way out: change itself into a bank and scarf some major bailout bucks. Only there are rules for that sort of thing…

GM first made Saturn’s “strategic review” official in the bailout-begging, condition-floating context, although Lutz swears Ol’ Man Wagoner was on it months ago. Anyway, now that the industry has processed the news, there’s a rash of post-Saturn plans flying around. Our man in China seems fairly convinced that Chinese firm SAIC could make a bid for Saturn and its conveniently independent dealer net of over 400 stores. Another possibility that might be more palatable for GM comes from Automotive News‘ [sub] Richard Truett, who reckons the General could kill two birds with one stone, by “handing the keys to the Saturn brand to GM’s German affiliate, Opel.”

• 2008 Chevy Equinox: $5,000 cash back
• 2008 GMC Canyon: $5,000 cash back
• 2008 Pontiac Torrent: $5,000 cash back
• 2008 Cadillac SRX: $6,000 cash back
• 2008 Chevy Silverado regular cab, extended cab or crew cab: $6,000-$8,000 cash back
• 2008 GMC Sierra regular cab, extended cab or crew cab: $6,000-$8,000 cash back
• 2008 Chevy Silverado/GMC Sierra heavy duty: $9,000 cash back
• 2008 Chevy Silverado/GMC Sierra heavy duty diesel: $10,000
• 2008 Chevy Tahoe/Avalanche: $8,000 cash back
• 2008 GMC Yukon: $8,000 cash back
• 2008 Chevy TrailBlazer: $8,000 cash back
• 2008 GMC Envoy: $8,000 cash back
• 2008 Chevy Suburban/GMC Yukon XL: $9,000 cash back
• 2008 Cadillac Escalade, Escalade ESV, Escalade EXT: $10,000 cash back
• 2008 Saab 9-7X: $10,000 cash back
• 2008 Hummer H2: $10,000 cash back

“We thank the House and its leadership for their bipartisan vote to support America’s domestic automakers at this most critical time for the nation’s economy. The House vote brings us closer to saving jobs and to creating a more competitive U.S. auto industry in order to maintain America’s economic vitality. We encourage the Senate to act soon so that we can continue at full speed on the restructuring and advanced technologies plans that will form a stronger, more viable GM.”

someone said…poor Rick, he just inherited too many difficulties…

I replied…

do you have all night? he could have stayed away from Zarrella, he could have left John Rock alone at Olds. he could have shut Saturn down long ago. he could have stayed the hell out of Fiat. could have kept Delphi inhouse, could have held marketing staff resposible. could have ousted Deloitte and rotated auditors to generate accurate and truthful financials, and of course…could have let LaNeve go forward with implementing Return to Greatness.

he could have kept an eye on Eric Feldstein at GMAC and not let mortgages be written that would jeopardize the future of GMAC. he could have listened to Jerry York and changed the Board meetings to an actual working environment. he could have detailed plans and earnings guidances instead of offering nothing more than that smug smirk, stutter, and eye twitch.

he could have held annual meetings in Detroit where the people are, he could have gathered individuals from the industry for the Board instead of British Petroleum, Goldman Sachs, and Astra Zeneca. he could have kept the great car names of our past, he could have put people to work in some capacity instead of idling them in the Jobs Bank. he could have let natural attrition replace long term employees over time instead of throwing money at them with reckless abandon. he could have left the retirees alone to enjoy their well earned security (after all they are our greatest ambassadors). he could have should have but didn’t

Date: 12/08/2008 Ref. number: Marketing / Programs and Promotions / G_0000017071
Subject: GM Dealership Employee Discount for Family
——————————————————————————–
Beginning Monday December 8, 2008, GM is offering a temporary program allowing GM Dealership Employees the opportunity to offer GMS (Employee Discount) pricing to the same eligible family members that GM Employees do.

This means that GM Dealership employees can offer GMS pricing to their spouse, children, stepchildren, grandchildren, stepgrandchildren, grandparents (including in-law and step), parents, stepparents, siblings (including full, half and step), mother/father in-law, sons/daughter in-laws, brothers/sisters in-law, and same sex domestic partner (SSDP) where applicable (NOTE: Eligible SSDPs are treated the same as spouses, and therefore, their dependent children and stepchildren are also included).

Eligible family members must take delivery by January 5, 2009 and may only purchase GM vehicles that the employing dealership location is franchised to sell or from GM dealerships owned by the sponsoring Dealer Operator at the time of delivery. The program excludes Saab vehicles.

To get an authorization number for your family member, log in to gmded.com and select “Dealership Employee Discount for Family” along the left. Enter your eligible family member’s date of birth and zip code and get you authorization number

Authorization numbers for this program must be submitted for payment to BARS by January 5, 2009.

——————————————————————————–
Contact name: Program Headquarters E-Mail:
Department: Marketing and Advertising – CRM NVPP Marketing Phone: XXX
Intended roles: Internet Sales Person, UItest, Parts Manager, General Sales Manager, Medium Duty Sales Manager, Internet Sales Manager, Wholesale Sales Person, Warranty Administrator, Used Vehicle Sales Manager, Used Vehicle Sales Consultant, Title Clerk, Systems Manager, Service Manager, Service Advisor, Parts Inventory Manager, Parts Counter Person, Parts & Service Director, Office Manager, New Vehicle Sales Manager, New Sales Consultant, Medium Sales Coordinator, Inventory Manager, HR Manager, General Office Support (Cashier), General Manager, Fleet/Commercial Manager, Fleet Sales Consultant, F&I Manager, F&I Director, Dealer, Business/Accounting Manager, Body Shop Technician, Body Shop Manager, Sales Functions, Sales Management
Archives: 01/08/2009

Yesterday, we reported that Ford is in a big hurry to unload Volvo to interested parties (preferably) in China. The article quoted a story in London’s Times. The Times had received information that Ford is talking with SAIC to take Volvo off Ford’s hands. There are more interested buyers: Top executives of Ford’s Chinese joint venture partner Changan are in talks with Ford to buy Volvo. This according to China’s National Business Daily which has it from an insider at Changan.

At the Guangzhou auto show last month, Volvo’s top executives had long talks with Changan Auto president Xu Liuping. When Ford Motor announced its plan to sell Volvo, the presidents of Ford Asia Pacific, Ford China, and Volvo China met Changan’s president at Changan’s HQ in Chongqing for closed-door talks. NBD’s source added that it is logical for financially troubled Ford Motor to consider Changan as a possible Chinese partner of its Volvo brand, because they have the Changan Ford Mazda joint venture which is also producing the Volvo S40 and S80 models. There are more reasons to buy …

Automotive News [sub] reports that the exit of 5,000 salaried employees in the past week has created “chaos” within Chrysler, and bankruptcy rumors have suppliers considering cash-on-delivery demands. According to Chrysler spokeswoman MaryBeth Halprin, “the claim of chaos is unwarranted. There is certainly in this first week without 5,000 employees a transition taking place,” she said in an e-mail to Automotive News. “This is an opportunity to continue the transformation of our company, rethink work processes and focus on core function.” Right. For more on ChryCo’s “transformation,” check out this story from the NYT.

In all this talk about GM’s financial health, the most important element of any potential turnaround has been woefully neglected: the company’s corporate culture. GM’s is so utterly dysfunctional that it makes John Wayne Gacey’s home life seem like Peter Brady’s. There is no way– no way whatsoever— that GM can recover with its current management. Be that as it is, I’ve been contacting recently “liberated” GM employees to get a glimpse of life inside the belly of the beast. And pretty it’s not. “I remember walking my dogs and literally dropping to my knees and praying to God I would get out of GM,” one ex-exec told me. “I’ve seen people throwing-up in the bathrooms because of the overwhelming atmosphere of fear, terror and panic… It’s the most warped and bizarre thing I’ve ever seen in my life.” This from an employee with over 20-years of industry experience in several large companies.

As GM’s 41 percent November sales drop sinks into the public consciousness, The General’s generals have not-so-coincidentally released their not-secret bailout request. And here it is. Judging from the state of things, Rick Wagoner might need to fly to DC– before it’s too late. “General Motors said Tuesday it needs $4 billion in government loans this month and a total of $12 billion by late March to keep operating,” MSNBC reports. “Altogether, the auto giant is seeking up to $18 billion in government funding — including a $6 billion line of credit in case market conditions worsen.” Jeez, that doesn’t leave much for Ford or Chrysler! I make that $7b between them. A pittance really. Unless… they’re planning on asking for more. Could it be?

WHAT: Chrysler LLC President and Vice Chairman Jim Press will meet with more than 50 Maryland Port Authority employees and Maryland officials in a Town Hall to discuss Chrysler’s and all domestic automakers’ impact on the U.S. trade industry.

Chrysler is the largest exporter for the Port of Baltimore, and Port employees will have the opportunity to pledge their support for legislation to provide temporary financial assistance to the American auto industry.

Chrysler President and Vice Chairman Jim Press will discuss highlights of Chrysler’s plan for future success, as well as share details about other similar rallies across the Unites States. The Town Hall also is a chance for Port employees to voice their opinions about what Congress and the general public should know about the deep impact the auto industry has on the local Baltimore community.

WHO:

Jim Press, President and Vice Chairman, Chrysler LLC
Steve Rand, President & Chief Executive Officer, AMPORTS, Inc.
More than 50 Maryland Port Authority employees

WHEN: Tuesday, Dec. 2, 2008, from 10 – 11 a.m.

WHERE:

AMPORTS ATC Terminal
2908 Childs Street
Baltimore, MD 21226
(443) 923-2100

There is a whole lotta bailout going on. More and more people are bailing on lending the Detroit dunces a helping hand. Last to bail: CNN founder Ted Turner. He went on NBC’s Meet The Press and said to Brokaw: “I saw it coming years ago that Detroit was headed for a crash, and it’s amazing to me that they didn’t see it either.” Ted’s recommendation: “Let them go bankrupt and get Toyota to buy them out.” As if they would. The one who stands firm by the side of the bail bondsmen is United Auto Workers (UAW) boss Ron Gettelfinger. The AP (via MSNBC) reports that Big Ron says the UAW would be “willing to consider more concessions on wages and benefits” to secure a federal bailout. But then again, not so much. “Based on the changes we’ve made to our contracts, we are competitive already.” By the same token (or a different one, I’m not exactly sure), Gettelfinger told CNN that $70-an-hour UAW wages were a “myth.” And Chrysler, Ford and GM should tell Congress they’ll limit corporate pay, bonuses and severance packages in return for bailout bucks. In other words, some pigs are more equal than others.

“In the coming weeks we will begin to implement a relatively new cost savings initiative at the Warren Tech Center. This initiative deals with the personal waste baskets that are present in most all of the office work stations and conference rooms. Our plan is to eliminate these waste baskets and transition to a modified method of personal office waste disposal.

My first American girlfriend’s mother, a Manhattan slumlord, read the Kiplinger Letter. She drove a Ford. My American (former) mother-in-law (different person) read the Kiplinger Letter. She drove a Ford. Kiplinger’s paid circulation is a million; their website receives more unique visits than even TTAC, about 2m a month. When Kiplinger writes, America listens. And what’s on Kiplinger’s mind these days? “Should you buy a Detroit car?” Not a general question. They mean now, considering the dire circumstances. Kiplinger asks the question that is on the mind of the remaining 48.2 percent of Americans that still buy true blue American: “What are the risks of buying a vehicle from a carmaker that’s on the brink?”

While steering the artist formerly known as the world’s largest automaker into career suicide, GM CEO Rick Wagoner has steadfastly maintained that “bankruptcy is not an option.” As many members of TTAC’s Best and Brightest have pointed out, that kind of stonewalling A) Is insane and B) reveals guarantees a class action lawsuit against GM’s Board of Bystanders. The Wall Street Journal reports that the Board has released a statement which illustrates their feeble-mindedness, managerial paralysis, blantant cowardice and compelling desire not to end up folding shirts at a federal prison farm. “GM said the board had discussed bankruptcy but didn’t view it as a ‘viable solution to the company’s liquidity problems.’ The board “is committed to considering all options in light of circumstances as they may develop.” In other words, NO BANKRUPTCY. Unless there is. Meanwhile, the Journal hints at disagreements between Board members and Wagoner, the company’s CEO AND Chairman.

When I’m not busy boning-up on Mustangology on Autoblog (c’mon guys it’s been TWO DAYS!) I sometimes trace-back links to TTAC material. Today’s forensic surfing uncovered this little gem on MarketWatch. It’s a financial results press release from a company called CableOrganizer.com, claiming that they made “$21.2 billion more in profit than General Motors Corporation (GM) for the nine months ending September 30, 2008.” Yup, it’s a joke. “‘We are very pleased about our 2008 profitability and are obviously honored to have beaten GM by such a wide margin,’ said Paul Holstein, senior vice president of CableOrganizer.com, Inc. ‘Obviously we couldn’t match their revenue, but we were able to beat them handily on costs and expenses,’ notes Holstein. ‘For example, we put off buying a fleet of Gulfstream G5 private jets. That, right there, saved us millions of dollars.’ I called the company’s Marketing Coordinator, Juan Ribero. He was kind enough to send me the original press release, before MarketWatch’s editors toned it down.

I waited until now to repost this ABC report on “Jet-gate” because I wanted to put this story into some sort of context. While members of TTAC’s Best and Brightest have defended the CEO’s travel arrangements as either a drop in the bucket or CEO SOP, that’s not the kind of context I’m talking about. I mean the wider issue of the mainstream media’s (MSM) treatment of the auto industry. The change in tenor is palpable. Before the Congressional hearings, the MSM treated the automakers with kid gloves. And no wonder. Back in the day (less than six months ago), GM pumped over $2b into advertising. Add in the budgets for Chrysler and Ford and you can see how that whole hand, feed, bite prevention thing works. Now that The Big 2.8 have been unveiled as mortally wounded, the gloves are off. For some. Is it any coincidence that the jet chasing reporter hails from ABC, not CBS? I don’t think so. Where was Rush and Sean when this story was aborning? Driving promo cars from “our friends at GM” and slipping mentions into their rants. So be it. These days, the MSM “gets it”– if only because they can afford to do so. More importantly, there’s the internet. Not only can you read the real deal here on TTAC, but there’s now a worldwide webwise conspiracy of souls digging, prodding and rooting for the truth. We live in terrible, wonderful times.

Carlos Ghosn wants your help, and he isn’t shy about asking for it. In an interview yesterday with The Wall Street Journal, the Renault-Nissan chief announced his intentions to obtain a €40b ($50b) loan package from the French government, in addition to some undisclosed additional quantity of yen from their Japanese counterparts. Today, before a packed house during his keynote address at the LA Auto Show, Ghosn continued along this path, turning his attention to obtaining tax credits and other government assistance here Stateside. Citing October 2008 as the worst month for US car sales in the last 25 years, Ghosn claimed that the severity of current economic conditions were “putting the usual rules of business up in the air” and that “nobody knows” how long these conditions would continue. As he tore a page from Detroit’s eco-efficiency bailout pitch book, Ghosn stressed retooling for the development of Earth-friendly technology as a key driver for receiving state support.

We’ve said it before. We’ll say it again. Before The Big 2.8’s bailout begging blitz, the average American had no idea how close Ford, Chrysler and GM were/are to bankruptcy. And now, today, they do. So when it comes to buying a new car, well, it’s either a sympathy you-know-what (as if) or “Maybe we should look at a Toyota this time.” As much as Detroit’s sales sucked in October, the numbers will be nothing (something?) compared to November. By December, a black hole will tear-open the time-space continuum above Detroit and swallow The Big 2.8 whole.

As GM’s CEO tires to find federal cash to feed his company’s conflagration, his minions are busy throwing furniture into the fire. The AP reports that Buick has yanked courtesy car provision from its PGA sponsorship. “Buick will no longer supply include the U.S. Bank Championship in Milwaukee, the AT&T National in Washington and the Transitions Championship outside Tampa, Fla. The Shell Houston Open remains hopeful of keeping its Buick courtesy car deal.” Talk to Larry… “We’re taking a hard look at everything right now,” admitted Larry Peck, golf marketing manager for Buick. Ah, the good old days… “In some cases, the company provided 180 courtesy cars and a cash donation, receiving spots in the pro-am for Buick clients, car displays throughout the golf course and hospitality tents on the 18th green. At the John Deere Classic, Peterson said Buick donated a car for auction in its “Birdies of Charity” program.” And now…

According to Canada’s Financial Post, Toyota and and Honda are freaking-out about the potential failure of Detroit’s three car companies. “We’re very concerned” about a Detroit meltdown, ToMoCo spokesman Mike Goss told the Post. “In the past couple of days I’ve been asked ‘Wouldn’t it be great for Toyota if others fail?’ We think the opposite is true.” Toyota is concerned about a Motown meltdown’s catastrophic effect on its NA supplier base; “The vehicles Toyota builds in North America contain an average of 75% domestically sourced parts and systems, and Toyota is reliant on many of the same suppliers used by GM, Ford Motor Co. or Chrysler LLC. The Japanese automakers are working to identify which suppliers have the biggest exposure to the Detroit firms. They are also developing emergency plans in the event they need to replace a company providing them with parts. “Everything’s on the table about what we might have to do,” Mr. Goss said. Meanwhile, the industry shills at the Center for Automotive Research seized on the comments to predict, you guessed it, carmageddon…

Walt Disney’s deathbed request to his brother Roy: don’t change my plans for the Experimental Prototype Community of Tomorrow (EPCOT). Walt spent his final cancer-fighting years planning EPCOT’s every detail, from housing to commuting to garbage collection. When Walt was cold in his grave, Roy did the sensible thing. He tore-up Walt’s work and built a cod-World’s Fair. The idea of EPCOT as a company-run city rather than an amusement park was fundamentally flawed, doomed to controversy and failure ( Celebration anyone?). Detroit reminds me of Walt’s unrealized Disney world (small “w”): a place where corporate culture dominates the community’s mindset. Brock Yates chronicled this “Grosse Pointe myopia. As does Autoextremist Peter DeLorenzo, in his own way. Or, more precisely, in a David Koresh kinda way…

Here’s the money shot from GM’s quarterly filing with the SEC:

“In connection with their year-end audit of our annual financial statements, our independent auditors assess whether a statement should be included in their audit report related to the existence of substantial doubt related to our ability to continue as a going concern. If the report on our audited financial statements included such a statement, we would not be in compliance with the covenants in certain significant credit agreements, including our $4.5 billion secured revolving credit facility and $1.5 billion U.S. term loan, both of which would be callable by the lenders. Additionally, we have other significant obligations that include cross-default provisions that could be triggered by a failure to comply with those credit agreements. We would need to seek a waiver from the lenders for any covenant breaches or cross defaults, or arrange for substitute financing. There is no assurance that we could cure a default, secure a waiver or arrange substitute financing in such circumstances or that we would not incur significant costs in doing so.”

This is the big fear at GM: auditors issue a statement regarding GM’s ability to continue as a ‘going concern.’ It would start a customer-killing PR firestorm, launch a possible “run on the bank” scenario by suppliers and trigger immediate default ratings by the credit rating agencies.

Autocar slips this little nugget in an alarming alarmist story that Ford will run out of cash by May: “Ford has already pulled all of its UK advertising across all mediums until the end of the year.” I’m Googling like mad, but can’t find any corroboration. If true, this is some SERIOUS SHIT. Meanwhile, TTAC’s Ken Elias debunks Autocar’s assertion that FoMoCo will be out of dough by the spring. “AutoCar’s analysis on Ford’s cash flow is incorrect. For the year to date, Ford has used $15.7 billion in cash, although only $2.9 billion relates to pre-tax losses. The bulk of the cash used to date reflects mostly restructuring efforts due to constriction in working capital ($6.7 billion) and funding the required VEBA to the amount of $4.6 billion. Since these are mostly one-time items, the cash burn situation at Ford does not appear as dire as that of GM. Any stabilization of Ford’s North American business will stem its cash outflows.” Thanks for the heads-up Ken.