It was a long meeting that lasted into the wee hours of the Thursday morning. It ended with the German government throwing insults at the US government. Everybody went home or to their presidential suites with a headache and no deal. If there is no further movement, Opel will go down the drain with GM by Friday.

Before the meeting, there were rumblings that wrinkles had to be ironed out in a trustee plan that was supposed to be the basis for bridge financing provided by the German government. The money was supposed to keep the lights on in Rüsselsheim, while the proper groom for Opel is being groomed.

Mice and men impacted with US government greed. Or lack of their usual largess.

In the high states poker for Opel, GM did put the cards on the table, got up and walked.

Automobilwoche [sub] reports that GM handed over “all European plants, patents and access technologies debt free to the Adam Opel GmbH.” It’s official, the supervisory board of Adam Opel GmbH has acknowledged it. What’s more, the supervisory board of the GmbH (in reality, GM) “accepted the trustee model of the German government.” This clears Opel for a new investor, and keeps the company clear of the downdraft caused by the impending bankruptcy of the mother ship.

Tonight, there will be a meeting in Berlin that may decide who will take over Opel—with more than a little help of the German government. It could be a long night.

According to recent reports, the night most likely will be inconclusive.

It’s pretty quiet today, news-wise. We’re picking-up dribs and drabs from here and there, but it’s the calm before the storm. The big news is, of course, GM’s forthcoming bankruptcy filing. As the Brits would say, it’s all over bar the shouting. Final confirmation arrives at midnight tonight, when the deadline expires for GM’s bondholders’ to swap $27 billion in debt for a 10 percent equity stake in a new GM.

TTAC’s Best and Brightest spent some time this weekend examining the question of whether or not Chrysler and GM needed to terminate nearly 2000 dealers between them, both pro and con. We didn’t look at WHICH dealers got the axe, for two reasons. First, despite receiving nearasdammit $20 billion in taxpayer money (so far), GM has steadfastly refused to release a list of the 1100 dealers emailed their walking papers. The Huffington Post blog (of all people) has a partial tally, but GM ain’t gonna spill. Which, if you think about it, protects car dealers at the expense of taxpayers, who might not know they’re buying a car from a dead dealer trading. Bastardos! That said, when GM’s Marketing Maven, Mark LeNeve, announced the cull, he claimed that the business brains who made the cut based their decisions largely (if not exclusively) on volume. Chrysler, in contrast, produced a list of the dispossessed—and it’s all over the show. Urban, suburban, large, small, medium; the logic underpinning their choices is an enigma wrapped in a “Dear John” email. Or is it? The internets are abuzz with the tin foil hat-wearing theory that the cuts were made based on partisan politics. Check it out . . .

The Hoosier State is trying to throw a monkey wrench into Chrysler/Fiat/Uncle Sam’s plan to create a born again American (ish) automaker. Indiana’s State Treasurer, Richard Mourdock, filed papers with judge Arthur Gonzalez, asking the federal bankruptcy court to appoint an examiner to, um, examine ChryCo’s books. Mourdock also wants Gonzalez to take ChryCo away from the Presidential Task Force on Autos (PTFOA) and hand it to an independent trustee. Mourdock claims to be protecting pension funds for his state’s retirees. Chrysler claims his actions would throw the company into liquidation, which would eliminate four thousand Indiana jobs and endanger the incomes of those self same nine thousand pensioners. So there, nuh. The chances of Indiana slowing down the PTFOA fast track strategy are roughly nil; Chrysler accounts for less than one percent of the state’s pensioner fund. So what gives? Make the jump for the real reason Indiana wants to make Chrysler’s life miserable . . .

Playing poker for money is illegal in Germany. Which doesn’t keep the German government from conducting a high stakes poker game with a group of high rolling players. Around the table: Fiat, Magna, Ripplewood, Chancellor Merkel, Vice Chancellor Steinmeier, Minister Guttenberg. Kibitzing and making comments: The premiers of the Opel states, the unions, the Opel dealers, and just about everybody else. On the table, barely alive: Opel. The Financial Times calls it—with British understatement—“considerable back-room powerplay by politicians.”

You’d be forgiven for thinking that the sale of “old” Chrysler to “new” Chrysler by June 15 was a done deal. Otherwise, why would Fiat feel free to tell the American taxpayer which three amigos will control “new” Chrysler’s Board of Directors (Fiat Chief Executive and future ChryCo CEO, Sergio Marchionne; Alfredo Altavilla, head of Fiat Powertrain Technologies; and former ExxonMobil executive, Lucio Noto)? Lest we forget, federal bankruptcy judge Arthur Gonzalez swept aside the non-TARP bondholders. But there’s growing, well-organized, politically-connected resistance from the terminated Chrysler dealers. In fact, their Congress critters are calling ChryCo’s (and GM’s) CEO onto the carpet next month, compelling them to testify why they done did it, reports Automotive News [sub]. As part of a rearguard action, Fiat has submitted papers to Arty that say “You don’t let us do this thing we must do and your people will suffer.” Minus the paraphrasing . . .

End of Days folks, when the president of the United States puts taxpayer billions behind a “merger of equals” between Chrysler and Fiat. The latest weirdness: The Detroit News reports that “Japanese automaker Mitsubishi Motors Corp. is in talks to supply vehicles to Saturn dealers if the brand and dealer network is sold this year.” Would that be the same Mitsubishi who’s ass has been repeatedly kicked by the U.S. market, to the point where most industry analysts figured it would give up and go home? The same company that built a thousand cars in the USA so far this year? The one that sold 55 percent fewer cars last month than the same month last year (3919 vs. 8878)? The same. Or not. “A Mitsubishi spokesman said he was unaware of the company’s interest in providing vehicles to Saturn’s dealer network.” Yes, well, never mind all that. There’s another player sniffing around, and that’s where the real action is . . .

RLS1400 recently bought a used Mazda from Ramsey Chrysler Dodge. The sales manager just sent him this e-mail:

Hello, My name is Regis J. Larkin Jr. and I am a sales manager with Ramsey Chrysler Dodge and Jeep. I would like to take the time to tell you why you should buy your next domestic product from us. Contrary to all the negative propaganda in the media let me be the one to assure you we are going nowhere. The fact alone that the PRESIDENT of these UNITED STATES BECAME DIRECTLY INVOLVED IN OUR RESTRUCTURING SHOULD SAY A LOT. THINK ABOUT THAT. THEY ARE SO SURE ABOUT US AND OUR PRODUCT THEY ARE GUARANTEEING OUR LIFE TIME WARRANTIES. Thats pretty aggressive don’t you think. In the coming weeks a lot of smaller dealers will be closing. However RAMSEY CHRYSLER DODGE AND JEEP will be going nowhere. In fact we are in the process of redoing our showroom for your comfort and convenience. During times like these we must stand together AS AMERICANS.

Chalk up another reason why Chrysler should have been allowed to fail. The New York Times reports that if Chrysler’s restructuring is approved it would allow the automaker to evade liability for injury-causing defects on its vehicles. An Automotive News [sub] write-up of Chrysler’s creditors reveals that the Ad Hoc Committee of Consumer-Victims of Chrysler LLC consists of 150 members seeking an estimated $650 million in damages allegedly caused by Chrysler vehicle defects. Under current reorganization plans, those creditors would be left with no recourse after Fiat assumes “good Chrysler’s” assets.

A member of our Best and Brightest spotted this letter to the editor on the American Thinker website. While plenty of industry watchers could have seen ChryCo’s meltdown coming—DID see it coming—it’s still a failure with a human face. And here it is.

My name is George C. Joseph. I am the sole owner of Sunshine Dodge-Isuzu, a family owned and operated business in Melbourne, Florida. My family bought and paid for this automobile franchise 35 years ago in 1974. I am the second generation to manage this business.

We currently employ 50+ people and before the economic slowdown we employed over 70 local people. We are active in the community and the local chamber of commerce. We deal with several dozen local vendors on a day to day basis and many more during a month. All depend on our business for part of their livelihood. We are financially strong with great respect in the market place and community. We have strong local presence and stability.

I work every day the store is open, nine to ten hours a day. I know most of our customers and all our employees. Sunshine Dodge is my life.

Well, not officially. Officially, I’d be extremely surprised if GM doesn’t follow decades of precedent and save its ultimate bad news for either Friday (the 29th of May) or the weekend (a Sunday electronic filing). That said, the practice was designed to give the markets the weekend not to flip out about the latest red ink tsunami, fire sale, asset sale, etc. By now the market couldn’t give a shit, knowing as it does that General Motors stock is about to be completely worthless. Still, a new GM filing with the SEC [full press release after the jump] reveals that The General will report the failure to secure “debt reduction agreements” with the UAW and bondholders on May 27. Once that’s done, well, it’s all over bar the shouting.

Speaking with the New York Times, Ford Marketing maven Jim Farley had some soothing words for Ford dealers: we’re not going to cap yo ass [paraphrasing]. Yet [extrapolating]. Farley’s also taking the opportunity to hammer home Ford’s mantra: we didn’t take government money, so we’re cool, right? This time, Farley went further, predicting that FoMoCo could benefit from the death of those Detroit automakers who did/do. “Mr. Farley was particularly critical of the Chrysler plan, noting how it would affect millions of consumers with little warning. ‘It seems very abrupt and unplanned,’ he said. ‘You don’t orphan four million customers overnight without some fallout.’ Some of those customers, primarily those in rural areas, will migrate to Ford dealerships, he said. ‘It really depends on how G.M. and Chrysler handle these orphan owners,’ he said. ‘If they don’t give them a lot of attention, it will result in consumers going to other brands.’” Hint. Hint. Of course, there be dragons. And Farley knows it.

The fact that Chrysler is [still] offering buyouts to its United Auto Workers (UAW) employees is not news. The fact that this money is coming from the federal government is also no biggie, actuality-wise. I mean, whose money did you THINK they were using? But the Detroit Free Press report that ChryCo has upped its cash-and-a-car offer to its unionized veterans—to convince them not work at the bankrupt automaker’s closed factories—is a bit odd. Yes, “The autoworkers are now being offered up to $115,000 plus a $25,000 vehicle voucher to leave Chrysler voluntarily. The larger lump-sum payment, which was increased from $75,000 in earlier buyouts, is available to workers under 50 years old who have 10 or more years of seniority. Workers 50 or older who qualify for some pension benefits won’t receive that type of onetime payment. But those with 30 years, or whose age and years together exceed 85, will receive $50,000 plus the $25,000 voucher for a new Chrysler vehicle.” And here’s the kicker . . .

The Federal Reserve Bank is spending your (and your great-grandkids’) money in lots of creative ways these days. But some minuscule portions of it go to boring humdrum stating-the obvious analyses like this report, “ From tailfins to hybrids: “How Detroit lost its dominance in the U.S. auto market.” Well, boring, perhaps to the well-informed B&B here at TTAC, if they’ve kept up on their assigned reading. If not, and a very thorough (but not overly long-winded) analysis is your cup of tea, read away. If you want the Cliff-Notes version, make the jump here:

Triskedecaphobes beware: I make it 13 days until GM files Chapter 11. It will be interesting to see which meme means business on the day. Will the popular press parrot Detroit’s party line: comeback interruptus (i.e., unforeseeable events destroyed the best laid plans of mice and men)? Or will karmic retribution be the topic du jour (i.e., they killed the electric car)? No matter how the Monday morning quarterbacks parse it, there’s no doubt that Detroit’s decline will serve as THE case study in monumental failure for those who don’t want to read Gibbon’s “The Decline and Fall of the Roman Empire.” Always ahead of the wave, TTAC’s Paul Neidermeyer has already shared his analysis of this debacle. Paul’s warming up his Dawn of the Dead essay for the actual event. Meanwhile, a number of our Best and Brightest have sent me a link to a BusinessWeek synopsis of “How the Mighty Fall: A Primer on the Warning Signs.”

Less than three weeks after Chrysler filed for bankruptcy protection, it looks as if the Obama administration will pull off its goal of completing the carmaker’s restructuring by June, allowing it to emerge as a smaller, more viable contender in the global auto market.

Who pressed the Easy button? Reading between the lines, it’s clear that the New York Times editorial board’s faith in “new” Chrysler stems from the fact that they’re planning to build the kind of cars [theoretically] favored by people who live in large urban areas. Hence the fact that The Gray Lady uses the phrase “fuel-efficient” twice in two sentences.

In an article about US Treasury Secretary Tim Geithner’s inability to tie his own shoes, the Washington Post leads with the heretofore disclosed fact that Wagoner’s looking forward to a $20 million payday. While the Post paints Geithner as an incompetent manager, that’s a no-win proposition no matter how you look at it. Stiff Rick and the guy’s bound to reveal the finer points of Uncle Sam’s takeover of a [former] blue chip company, including the deal they promised Wagoner to get him to jump. Pay him off and the howls of indignation will rile the nation, pissing off potential GM customers, further sinking “good” GM’s ability to sell someone a car.

Automotive News [sub] reports that Chrysler’s national dealer council has filed a motion in U.S. Bankruptcy Court to “save” the 789 ChryCo dealerships slated for termination. The council’s asking federal judge Arthur “Fast Track” Gonzalez to stay Chrysler’s dealercide in the name of Joe Q. Public. “Fewer dealers will mean less inventory available to the public,” the document maintains, placing Chrysler products on the same level as, say, foodstuffs. “Lower inventory reduces the chances that a customer will find the car they are looking for and therefore hurts sales.” A federal ruling to protect consumer choice in an industry with 40 percent plus overcapacity and enough excess inventory to choke an entire industrialized country? That’s just silly. Arty is scheduled to hear objections to Chrysler’s request on June 4, five days before the axe falls for good (or, in this case, “bad”). Never mind. Here’s where the REAL battle lines are forming . . .

Bloomberg reports that General Motors marketing maven Mark LaNeve is set to announce that the bankruptcy-bound automaker will drop the axe on 1100 US dealers at noon EDT (16:00 UTC). The move is designed to reduce GM’s dealer count from 6200 to 3200. Don’t tell the MSM, but the news is nowhere as dramatic as it seems. First, the cull won’t—in fact, can’t—take place until after The General files for Chapter 11, where bankruptcy law trumps franchise law. As Bloomberg’s insider says, “GM is hoping for an orderly wind-down of the affected dealers over the next year or so.” In that sense, the pre-C11 dealercide decision is just for show.

You may recall that General Motors recently circulated a document amongst their paymasters on Capitol Hill “revealing” that they planned to import 17,335 Chinese-made cars by 2011. At the time, we speculated that the leaked “bailout bucks for Chinese trucks” memo was nothing more than a negotiating gambit by GM, designed to bring the United Auto Workers to heel. Play ball and we build here. After all, what else does GM have to offer, other than threats to up stakes and leave? That said, floating a GM in China trial balloon makes the company no friends, uh, anywhere. Especially with their most important stakeholders: customers. Anyway, Bloomberg indicates that the cudgel may have done it duty. GM CEO Fritz Henderson told them (yesterday) that “using U.S. production instead of imports would pivot on whether the UAW can build the vehicles at a cost GM can afford . . . This is a discussion we’re having with the UAW.” And so, today’s Wall Street Journal tells us that “GM Nears Crucial Deal With UAW.” Which could all fall apart.

Chrysler has come within 11 dealers of confirming media reports that it would terminate 800 US dealers ( dowload pdf list of 789 terminated ChyrCo dealers here). This as the bankrupt automaker steps-up its efforts to satisfy its federal overlords and prepare for Fiat’s command and control. Oh, and emerge from C11 as a viable automaker. Automotive News [AN, sub] has intercepted a memo from the corporate mothership highlighting the company’s care and concern towards the dead stores not selling. “Dealers are learning of their fate via UPS letters to be delivered this morning, the memo says. Dealers will get 23 business days for a ‘court review’ of their cases, according to the memo, from a sales manager to district dealers. ”All of this information is subject to change,” the memo says. Music to the dealers’ lawyers’ ears, presumably. Meanwhile, NADA . . .

You may remember that TTAC almost just about virtually proved that Chrysler CEO Bob “I Heart Pasta” Nardelli jumped on a corporate jet to fly from Motown to the City of Brotherly Love (then was driven in an EV mule to D.C.), to attend the second round of bailout hearings. This after The Big 2.8 execs (as they were at the time) flew straight into “jet-gate,” where reporters hammered them for Gulfstreaming to the bailout buffet. Far be it for me to repeat such lazy journalistic innuendo (oops), but the thick plotzes, as the Detroit Free Press reports that ChryCo is asking permission to terminate its leases on not one but two mighty fine Gulfstreams: a $38 million Gulfstream 450 and a $55 million Gulfstream 550. Leases, eh? “Chrysler took possession of them Jan. 1, 2008. It put up a $3.6 million security deposit on the 450 and a $5.3 million deposit on the 550. The automaker is seeking to apply the deposits to its seven-year lease obligations.” Awesome.

The Chinese “home grown” automaker Geely had been widely rumored to be highly interested in snapping up Volvo or Saab. Or both. They either have lost interest. Or they employ the stratagem usual in a Chinese market: Shout “Tai gui le!” (too expensive), make an indignant face, and walk away. If they run after you, the next round of haggling ensues.

Geely “has not submitted, and has no plans to submit, any bids concerning the takeovers of ‘Volvo’ or ‘Saab’ as stated in recent press articles,” said Geely in a notice to the Hong Kong stock exchange, and their stock price promptly jumped 13.6 percent, Gasgoo writes. It doesn’t mean they were not or are not interested. They just didn’t hand in a—formal—bid. They sure had been talking.

There’s really only question remaining: can GM make it to the end of the month? As the artist formerly known as “the world’s largest automaker” augurs-in for its official face plant, the market is readying for a total wipe out, sending The General’s share price to a buck a pop. Which is, as we all know, about a dollar too much. “Experts have said that GM’s stock is overpriced,” USA Today reports, “considering that the automaker’s debt-restructuring plan will leave current shareholders with just a 1% stake in the reconstituted company.”

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 operations. Is that offer only good outside of bankruptcy? If Chrysler is the canary in the coal mine, the answer seems to be yes.

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 the eyeballs with Thorazine—GM’s former cash cow has become a cow-sized vampire bat, feasting on US taxpayers’ blood, sweat and tears. It’s sucked-up $6 billion in federal funding so far, heading for another . . . wait for it . . . $15.5 billion. The Wall Street Journal is shedding a little heat (not light) on this “hidden” auto bailout, which is heading for another one of those dumb-ass “your money for government equity in a born loser” jobs. Without the slightest hint of accountability.

General Motors is is “open to considering moving its headquarters from Detroit, selling off U.S. plants and even renegotiating parts of its restructuring plan with its major union,” CEO Fritz Henderson told Reuters today in a conference call. The possible relocation and renegotiations are part of a last-ditch effort to restructure GM outside of bankruptcy, a move that Henderson admits is likely to fail. “It’s more probable that we would need to accomplish our goals in a bankruptcy,” says Henderson. “There’s still a chance for it to be done outside a court proceeding.”

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 of its imports will remain at 33 percent. By 2014. When its sales recover to 3.1 million vehicles per year. Providing it maintains its current market share. All things being equal. With the wind in the right direction.

At the same time, The General aims to shrink production in Canada, Australia and European countries by about 130k. For a sneak peak at the less tortuous justification for this outsourcing on Uncle Sam’s dime, we turn to veteran Detroit apologist and Washington Post car critic, Warren Brown . . .

When life gives you lemons, you make lemonade (or glazed strawberry lemon streusel muffins). When Chrysler gives you lemons, you’re SOL. Since April 30, Judge Arthur Gonzales has to approve payment on claims against Chrysler incurred before C11. That includes “lemon law” settlement checks to customers who bought defective Dodge, Chrysler or Jeep products. Not happening. “San Diego attorney Ellen Turnage represents a client who reached a settlement with Chrysler over a 2006 Dodge Magnum with a bad suspension. The car has been returned to Chrysler, but the automaker’s check bounced. ‘Now he’s got no car and no money, so he can’t go buy a new one,’ Turnage said of her client. ‘He’s stuck. We’re hanging on to a glimmer of hope that at some point this will all be resolved.'” As the LA Times reports, Turnage’s pessimism is well-justified. Instead of saying, sorry, we’ll expedite this, the new Chrysler is telling aggrieved customers to FO&D.

A TTAC source has pinged us: “‘I’ve just heard 2nd hand that the Delphi OnStar team has had all their GM contracts canceled. It seems that GM may be getting rid of OnStar completely, but it isn’t clear when that would happen. This sounds like a pretty good business decision to me since cell phones have become so widely adopted, and navigation systems are getting cheaper.” This tip flies in the face of a recent Reuters report, in which the head of said OnStar claimed the service was wildly profitable. OK, “highly.” Which is the same as “wildly,” given GM’s current slide into C11. Anyway, “GM does not break out its revenue or profits from OnStar, but had said the division had turned profitable in 2003 and has been steadily and more profitable since. The division receives part of its revenues from consumer subscription fees.” One possible explanation (just in): GM is simply “de-sourcing” Delphi as OnStar supplier, as it prepares to deep-six the bankrupt parts-maker’s contracts. Or something. But wait! More tipster action from an ex-OnStar employee after the jump.

Tom Blumer, in the WSJ, says, “Non-TARP Lenders Aren’t Making Up the Stories of White House Pressure,” citing conversations with anonymous Non-TARPies. According to these former holdouts, still masked and anonymous due to fear of reprisal, government officials went to the mats to pressure bondholders into compliance. Seeing as the group has dwindled from twenty to five since Obama called the group “hedge fund holdouts,” these tactics seem to have been highly effective. GM bondholders, pay attention ( if you aren’t already).

We’ve received this heads-up letter to GM dealers from one our sources on the front line. [Thanks to you-know-who-you-are.]

IMPORTANT BULLETIN: Parts Order Management Update

Paul Copses, Executive Director — GM SPO Sales and Marketing, and Charlie Hyndman, Executive Director– GM SPO Global Warehousing and Operations

05/06/2009

To: All ACDelco Customers, GM Dealers and Saturn Retailers (US, Canada, Mexico, Middle East, Other)

Please be advised that GM Service and Parts Operations have been working on supply plans for all of our suppliers over the past few months to ensure adequate inventories of service parts for our customers. However, in order to carefully manage inventories for our key supplier, Delphi, it is necessary to take some near-term actions.

GM is auguring-in for its date with a bankruptcy judge, burning [your] cash, shedding share and losing money as it goes. The latest ding: the company reports that it’s lost $6 billion in the first financial quarter. That’s almost double last year’s Q1 results ($3.3 billion). Revenues sank 47 percent ($22.4 billion from $42.4 billion). As always, there’s a lot of waffle in the official press release: “GM’s automotive results in the first quarter of 2009 were driven by a revenue decline in all regions, due in part [in part?] to a depressed global industry. In addition, GM’s results were impacted by unfavorable foreign currency exchange and mark-to-market commodity hedging versus the year-ago quarter. However, these losses were partially offset by a significant structural cost improvement of $3.1 billion when compared to the first quarter of 2008.” But the bottom line is clear: the federally-funded automaker’s house is on fire and so far from profitable it’s not even in the same solar system. GM CEO Fritz “Wagoner Clone” Henderson reckons he knows how to plot a course for the Milky Way.