As America’s car dealers gather in N’orlins– an ironic enough venue given that some 80 percent of U.S. car loans are “under water”– the talk of the town is culling. Where once there were too many domestic car dealers, now there are too many car dealers full stop. Now you might think that a process of natural selection would have untied the Oldsmobile-shaped Gordian knot (i.e. 50 states’ worth of franchise laws say they can’t simply pull the plug and be done with it). Nope. In a story that somehow got culled from The Wall Street Journal website, Sharon Terlep provides a reality check. “NADA in December predicted about 900 dealerships — including small numbers of foreign-based auto makers — would go out of business in 2008. But Detroit’s auto makers alone lost more than that, company executives said this weekend. About 300 Ford dealers closed last year, while 401 GM dealers and 287 Chrysler dealers went out of business. Consulting firm Grant Thornton estimates about 2,500 of the nation’s 25,000 new vehicle dealerships will close in 2009. However, 5,000 would need to close to have a healthy level for this year’s anticipated level of auto sales, the firm said this week.”

At the moment, Chrysler reimburses a dealer for the cost of topping-up the gas tank on a car the dealer sells to a customer. No mas. That little tidbit was buried deep in the Detroit News story about Chrysler’s incipient “traveling roadshow”– a corporate effort to “convince” dealers to order more cars despite the fact that no one’s buying them and it costs money for the dealers to have vehicles sitting on their lots. We also learn that Chrysler has frozen the labor rate for warranty work, scheduled to rise in ’09. “‘I think they understand the place we are in and understand the need for all parties to put some skin in the game,’ said [former Toyota Prez and current Chrysler Co-Prez Jim] Press, who received a standing ovation during the meeting with about 400 dealers.” Somehow I don’t think it was that particular statement that earned Mr. Press the standing O. Perhaps it was his pledge to work for $1 until Chrysler paid back its four soon-to-be seven billion dollar loan. Just kidding. Unfortunately. Anyway, Chrysler’s set a target for channel stuffing– I mean, dealer orders…

“We haven’t quite figured out exactly between sports cars and entry-level cars, but it’ll be a very narrowed and focused brand.” So pronounceth GM NA Marketing maven Mark LaNeve at a “roundtable interview” attended by Automotive News [AN sub]. Here’s another surprise: GM can’t figure out to do with HUMMER, Saab or Saturn, either. “There’s nothing that can be said today that can calm the nerves of a Saturn, Hummer or Saab dealer,” LaNeve said. Or is there? “The studies of Saab and Hummer are very externally focused,” LaNeve said. Translation from AN (for the drunks and idiots amongst us): “That means GM hopes to sell them or form some type of partnership.” Mark his words. “We have production facilities that could be carved out; we could build the vehicles for somebody.” Any idea who that could be? Me neither. Oh wait; “The Swedish government is involved in the Saab review.” Is that the same Swedish government that declared it would be a cold day in Hell before they combo-nationalized Saab and Volvo? Chrysler and GM, on the other hand… It gets better, Saturn-wise.

Indeed. Now that General Motors depends on Uncle Sam for its survival, why would the Securities and Exchange Commission (SEC) levy a fine against the ailing American automaker? Answer: it wouldn’t. Under the terms of the deal with GM [full press release after the jump], the SEC ends its investigation into the company’s bookkeeping without a GM admission of guilt or a cash fine. Oh, and GM pinky swear promises it won’t ever do it again. The settlement and dispensation adds to Rick Wagoner’s growing rep as the industry’s Teflon Don. Lest we forget, Wagoner was GM’s Chief Financial Officer from 1992 to 1998, before becoming Chief Operating Officer (2000) and then CEO (2203). His career at GM (the only career he’s ever had) began as an analyst in the treasurer’s office. If Wagoner didn’t know the books were cooked, why didn’t he?

During the first round of Motown bailout begging, professional wordsmiths made the connection between Detroit’s $17.4b “bridge loan” request and Alaska’s “bridge to nowhere.” Thus “bridge loan to nowhere.” In fact, the Granvina Island Bridge project would have opened-up the Alaskan archipelago to real estate and tourist development. Boondoggle yes, but one with a long historical precedent and a reasonable expectation of some sort of commercial (i.e. taxpayer) return. In contrast, Chrysler’s supposed tie-up with Fiat is a genuine scam. The idea that Chrysler can become a viable automaker by re-engineering Fiat automobiles for the hugely competitive U.S. market is patently ridiculous. But not for Congress, the entity that offers the ailing American automaker its only hope for survival (cash). At least that’s the plan. And the man with the plan is ChryCo 300 designer Ralph Gilles. Speaking at The Automotive News World Congress [sub], Ralph told the world that he loves him some Italian. Well he would, wouldn’t he? But the details have to be seen to be believed. Or not, as the case may be.

To qualify for additional bailout billions on March 17, Congress dictated that GM must clear two main hurdles: reduce its public debt by two-thirds (via debt-for-equity swaps), convince the United Auto Workers (UAW) to accept half of contributions to a retiree healthcare trust in the form of GM stock, and lower union workers’ wages to parity with foreign automakers. OK, three. Three main hurdles. Oh, and eliminate the union jobs bank. So, four. Four hurdles. Within two hours of the Bush’s bailout bonanza, the UAW considered the conditions and said uh, no. And now GM’s third largest bondholders have left the investor committee considering the mandatory d-for-e swap, claiming “We’re just not good committee members.” Not so funny now, eh Mr. Bond holder? More specifically, Bill Gross of Pacific Investment Management Co. (a.k.a. Pimco) has just administered the official kiss of death to GM’s shot at meeting Congressional loan conditions. Either the pols will change the rules (the “we’re sorry we were so mean” scenario), or this is it: the remaining money will be used for GM’s post Chapter 11 debtor-in-possession financing.

Fritz Henderson is not a happy camper. Speaking at the Automotive News World Serious, GM’s Chief Operating Officer came off all emo, revealing a string of bad news without the usual spin. Of course, the event’s host chose to focus on the more, uh, upbeat side of Fritz’ speech. Henderson washed his hands of HUMMER, Saab and Saturn, albeit without announcing a “final solution.” And although “Pontiac is toast” isn’t the brand’s official tag line, it might as well be. “Henderson said the four core brands [Chevy, Cadillac, GMC and Buick] comprised 83 percent of GM’s total sales volume in the United States last year. Going forward, the Pontiac brand will ‘shrink substantially,’ Henderson said. But the fact that GM is investing heavily in the Buick brand in China will benefit that brand in the United States. ‘When you see the new LaCrosse, it will be very familiar to the one you’ve seen GM reveal in China,’ Henderson said.” And now, the real deal, brought to you by the MSM…

Even before the debate over federal loans to the domestic automakers, a number of TTAC editorials pointed out that a bankruptcy by one of the The Big Three would lead to a C11 by the remaining two. Bankruptcy allows the abrogation of labor contracts; an automaker in Ch. 11 proceedings would be able to lower labor costs significantly, putting the other car makers at a competitive disadvantage. [ED: one of Ford’s SEC filing made that very point.] Parts provider Checker (no cabs since 1982) tried to negotiate wage concessions from its employees’ labor union. But even with bankruptcy hanging over their heads, the union wouldn’t make the needed concessions. And so Checker has become the eighth major US auto supplier that’s filed for bankruptcy in the past year.

So, this is how it’s gonna go, eh? Chrysler’s going to dress-up the cratered car company long enough to use federal funds to stay alive long enough to strip and flip the company’s assets. Sweet. For some. More specifically, if Fiat’s grabbing 35 percent of Chrysler, can we, the taxpayers, have our $4b back now please? Nope. “The alliance does not contemplate that Fiat would make a cash investment in Chrysler or commit to funding Chrysler in the future.” Jeez. Couldn’t they at least contemplate it? Anyway, a joint statement (don’t bogart that BS, my friend) explains the thinking “The alliance, to be a key element of Chrysler’s viability plan, would provide Chrysler with access to competitive, fuel-efficient vehicle platforms, powertrain, and components to be produced at Chrysler manufacturing sites. Fiat would also provide distribution capabilities in key growth markets, as well as substantial cost savings opportunities. In addition, Fiat would provide management services supporting Chrysler’s submission of a viability plan to the U.S. Treasury as required.” That last one’s kinda weird. What “management services” are required to write a viability plan? Emptying the waste baskets?

Auto industry suppliers have been stuck between a rock (penny-squeezing OEMs) and a hard place (volatile commodity prices) for some time now. And though the Detroit Three argue relentlessly that their own bankruptcy would doom them in the eyes of consumers, bankruptcy protection has practically become the norm for their suppliers. Which is why supplier firms need a bailout of their own in order to give Detroit’s bailout a chance. Chrysler’s endless winter break, GM’s half-sized Q1 production plan and general industry turmoil is about to cause exactly what the bailout was supposed to prevent: cascading supplier bankruptcies. Bloomberg documents the doom in detail, concluding with American Axle’s Dick Dauch’s assessment that “there’s a shakeout occurring.” Unless…

GM Provides Global Business Update at Auto Analyst Event
Mark LaNeve, Vice President, GM North American Vehicle Sales, Service and Marketing
01/15/2009

To All General Motors Dealers:

General Motors provided an update to financial analysts today on the company’s restructuring efforts included in the viability plan that was submitted to the federal government last month. Rick Wagoner and Fritz Henderson told the group that GM is on track and making progress toward meeting its goals. Given the ongoing weakness in the automotive markets, they also explained that GM has adopted a more conservative U.S. industry volume assumption of 10.5 million units for 2009. The original baseline projections for 2009 were for a 12 million unit U.S. market. Rick and Fritz also said that we would continue to refine the plan in response to changing market conditions.

Regarding General Motors’ brands and dealers, the plans have not changed from the original submission. Hummer and Saab are under external review, while Saturn is being reviewed internally by a team that includes dealer representatives via the Franchise Operating Team. Product discussion in the plan focuses primarily on GM’s core brands: Chevrolet, Cadillac, Buick and GMC, with Pontiac as a specialty, focused brand. Also unchanged from the original submission is the projection that GM will have 4,700 dealers in the year 2012. As we have in the past, we will continue to work together with you personally as we move through this difficult, yet necessary dealer network re-sizing. Today’s update also provided the analysts information on the progress being made by GMAC and its ability to return to sub-vented financing.

You remember The Center for Automotive Research (CAR). They’re the Detroit-based automaker and union-funded think tank that progated the “soup lines beckon if you don’t bailout Detroit” study. The mainstream media repeated CAR’s stats– debunked on TTAC by both myself and our Best and Brightest— as gospel. Now that CAR has had its wicked way with $17.4b of your tax money, they’re back from hiatus with fresh apocalyptic visions for policy makers. Only this time, they’re right. “McAlinden, director-economics research for the Center for Automotive Research, predicts auto makers will sell 11.5 million units in 2009, down from 13.2 million last year and 16.2 million in 2007,” Ward’s Dealer Business reports. ‘The U.S. will not see 14 million new-vehicle sales again until 2012 and 16 million in 2013. The downturn will last a long time.'” OK, so… “Whether the two auto makers can meet the loan requirements set by the Bush Admin. remains to be seen. However he does not believe GM can meet the obligations as they are written now, adding, the ‘conditions will be changed so GM can keep them.'” Make no mistake: McAlinden has no faith in GM’s recovery plans.

* Light vehicle sales tumbled 18% in 2008, to 13.2 million units from 16.1 million in 2007, with the selling rate deteriorating significantly in the second half of the year, finishing with a barely-breathing 10.3 million SAAR in Q4.

* Sadly, it looks like 2009 will be even worse than 2008. Our latest forecast for 2009 US light vehicle sales is a shade under 12.0 million units, which is down from our earlier forecast of 13.0 million, and down another 9% versus 13.2 million in 2008.

* North American light vehicle production in this scenario should be in the range of 10.6 million units, down about 13% vs. 12.2 million in 2008, reflecting the sequential decline in sales, as well as an oversupply of vehicles remaining on dealer lots at year end. The year-to-year drop in production should be even more pronounced for the Big 3 (about 19%).

Chrysler has been – some say desperately – seeking to “sell key assets” for a while. The Nikkei (sub) now says that Chryler might be getting close. The usual “unnamed people with knowledge of the discussions” whispered that Chrysler is talking to Nissan-Renault and the Canadian auto supplier Magna. The topics of the discussion are the Jeep brand and Chrysler’s Belvidere plant. The Jeep brand would go to Renault-Nissan, Magna would take the plant.

The parties aren’t strangers.

Chrysler had announced an alliance with Nissan last April.

As for Magna, the interest probably stems from Magna’s subsidiary Magna Steyr, which is creating more and more auto contract manufacture business. Magna Steyr has produced the Chrysler Voyager from 2002 to 2007, and currently produces the Chrysler 300C, the Jeep Commander and Jeep Grand Cherokee. Magna was one of the bidders for Chrysler when it was sold by Daimler in 2007.

The news is flying thick and fast out of Detroit this week, as the annual conclave at the don’t call it The Detroit Auto show puts hundreds of journalists in close proximity to corporate newsmakers and spinmeisters. Automotive News [AN, sub] is doing the do. First up: Toyota’s admission that its “Saved by Zero” didn’t save the automaker from a humiliating December; trucks sank by 50 percent and they lost critical U.S. market share. So ToMoCo’s reaching deeper into its deep pockets.”The shift that you’ll see in January from December is more consumer cash and less APR and lease support through our dealers,” Toyota USA Prez Jim Lentz told AN. Jimbo didn’t offer any specifics, but AN rightly points out that Priora are stacked up like cordwood. “One of the largest sellers of Priuses in the country, Earl Stewart Toyota in North Palm Beach now has about 70 on the lot that it can’t get rid of. ‘Any kind of Prius anybody wants — any color, any anything — I’ve got it,’ Stewart says. ‘And if I don’t have it I can get it because there are several hundred in the port. Dealers don’t want them.'” Note: “According to Edmunds.com, Toyota had the biggest percentage boost in incentive spending in December at an average $1,995 per sale. That was up 87 percent from what the brand spent in December 2007.” The implications of all this are pretty clear…

Plenty of industry watchers predicted that Chrysler wouldn’t restart production after the company extended its Christmas shutdown by two weeks, to January 19. As that date approaches, ChryCo’s CEO has let it be known that the ailing American automaker may not make autos again until… later. Bob Nardelli told reporters at the North American International Auto Show today that the company has a responsibility “to make sure we’re not jamming dealers” to buy cars. That’s not how Bill Rosado, owner of a Chrysler-Dodge-Jeep dealership in Milford, Pa., sees it. Bill told The Wall Street Journal that he’s actively resisting the company’s requests to add more stock to his already-crowded lot. “We’re not ordering any cars in spite of the pressure they give us. We are going to sit tight with what we have,” Mr. Rosado said. “We don’t see any peak coming up where all of a sudden Chryslers are going to be desired.” True dat.

The Detroit News and The Wall Street Journal are reporting that Motown automakers’ pensions funds are no longer fully-funded. “The outgoing director of the U.S. Pension Benefit Guaranty Corp. warned Friday that Detroit’s Big Three automakers face a $41 billion pension shortfall. “We’re not trying to tell people that the pension house is on fire,” quoth E.F. Millard in the DetN. “The point is that in many ways this has a similar look to other situations, such as a Bethlehem Steel.” Not surprisingly, the WSJ has an even more alarming sound bite. “An awful lot of people seem to think these plans are well funded or overfunded. Each of these plans is significantly underfunded [and] in three years I don’t want people coming back and saying, ‘How come the PBGC never told us that?'” Let’s drill down, then.

• December sales might have been even weaker if not for a hefty slug of fleet deliveries at GM. GM’s overall sales were down 31%, which topped our forecast decline of 34% to 36%. But within that total, GM’s retail sales were down a sharp 41%, while fleet deliveries were about flat year-to-year. If GM’s fleet sales were down roughly in line with the industry average (mid-30% range) the SAAR [Seasonally Adjusted Annual Rate] would have been closer to 10.0 million, or perhaps 9.9 million, we estimate.

• The outlook for sales in 1Q09 is no brighter than the 2008 exit rate. Both Ford and GM suggested that sales could run in the 10 to 11 million range in the first part of 2009, with somewhat of a (stimulus-driven) recovery in the back half of the year (has a familiar ring, doesn’t it?).

• GM slashed its production plans throughout the rest of the world, with Europe now set to fall 44%, Latin America 34%,and Asia pacific 27%, versus 1Q08.

To: [Delphi] Kokomo Site Employees
From: Mike Moran, Facility Manager, Kokomo Operations
Subject: Modification of Housekeeping Services to Improve Kokomo Site
Competitiveness

Modification of Housekeeping Services to Improve Kokomo Site Competitiveness
January 8, 2009

After detailed efforts to analyze and confront the housekeeping costs at the
Kokomo site, local management and the UAW have jointly established a plan to
significantly improve the site’s competitive position in the area of
custodial service costs. The resulting plan establishes a smaller group of
housekeeping personnel focused on core activities. Cost savings will be
immediate and will be achieved through productivity improvements and
reduction in the housekeeping work load.

The following elements are key components of the operating plan that will
affect all employees as soon as Monday, January 12:

* Consistent with the closure of Plant 9, Plant 10 and ITC, and in line with
the site population, several restrooms will be closed. Notices will be
placed on the doors of the restrooms that will be closed and the locations
for alternate options will be posted

GM CEO Rick Wagoner is out and about today, peddling his company’s ability to be all things to all people save, perhaps, enough customers to avoid bankruptcy, bailouts and brickbats. The AP reports that Red Ink Rick reckons retirees are golden. “General Motors Corp. Chief Executive Rick Wagoner said Thursday the Detroit automaker can survive long-term without cutting benefits to retired workers. Wagoner made the remarks on NBC’s Today Show, where he was joined by United Auto Workers President Ron Gettelfinger. The two made the appearance from Detroit ahead of their renewed labor negotiations scheduled to begin next week.” Nothing like a good long suckle on the taxpayer tit to bring out a little media-pleasing solidarity. I wonder how Ron’s base feels about that one. Prety good if they’re retired, and think Uncle Sugar will cotinue to fuel the gravy train for the next twenty years or so. Perish the thought. Now, about those congressionally mandated concessions…

There’s an eerie thread of optimism weaving through a number of post-bailout, post-December bloodbath stories lately. Sure, hope dies last and all that, but as Studs Terkel put it, “hope has never trickled down, it has always sprung up.” And most of this fresh-faced optimism seems to have trickled down directly from GM PR. Take the headline “‘Happy Days’ Return For Domestic Car Dealers” over at Dealersedge.com, for example. If the use of scare quotes in the headline isn’t enough to set your PR-friendly hackery alarm ringing, well, that’s why we’re here. The entire piece is based on quotes from employees and owners of three dealerships, two in New Hampshire, one in Michigan. These ecstatic, old-timey song-referencing folks spout anecdotal evidence of a new influx of floor traffic, offering no dissent from the opinion that “happy days” are indeed here again. And why wouldn’t they say that zero percent terms on Trailblazers and Saabs have Americans flooding the showrooms?

The post-apocalyptic analysis of December’s sales results continues, as pundits and producers attempt to make sense of the crater that’s replaced the U.S. new car market. Obviously, the situation will have the greatest impact on the Chrysler and GM. The domestic automakers have just finished their first suckle on Uncle Sugar’s taxpayer teat, with GM auguring-in for its second go mid-month. And both companies face a congressional grilling when they return for more money in March. So, what to do? What to do? For answers to that question, for the manufacturers’ spin, we turn to their unofficial mouthpiece, The Detroit News. “Auto sales skid: Recovery rests on stimulus” starts with good news! “After barely making it through the worst year for auto sales since 1992, Detroit’s Big Three expect consumer demand to remain very weak in the first half of 2009 but begin to recover in the second half.” I’d like to point out that a general “sales” recovery does not necessarily mean Chrysler or GM’s recovery. But that would kind of ruin the flow, if you know what I mean. To wit…

Automotive News [sub]: “The magazine normally recommends cars in its April issue. But it singled out eight Detroit 3 vehicles early because consumers may be concerned about reliability while General Motors and Chrysler LLC seek federal assistance, said David Champion, the magazine’s chief car tester. ‘We’re only about halfway through our testing, so it’s not a complete list,’ he said. ‘But because of the public interest, we thought it would be useful.”” Huh? Since when is it Consumer Reports’ job to allay consumer fears about the reliability of the products produced by a small group of automakers, especially in response to an industry-wide event? In other words, why the special treatment? Even if it’s all about catering to a public need– remembering that Consumer Reports is a non-profit organization and there is no statistical data to support this position– CR’s special issue increases the psychological polarization between domestic and import-branded vehicles. And that’s not a good thing– for the domestics. If nothing else, the D2.8’s abject inability to identify the difference between quality relative to each other and quality compared to the wider car market has contributed to their failure. Anyway, the “winners” in the gallery below and/or after the jump.

I get it! Instead of putting the hate on owners of import-branded cars (as opposed to say imported Fords), supporters of the Big 2.8 could offer special membership benefits to those consumers who chose to support Chrysler, Ford and GM by buying their products (as opposed to say paying their taxes). We’ll have to see how this plays out in Farmington Hills, Michigan, where the owner of The Tribute restaurant is holding the antithesis of hot import nights. You can read the full offer to American-branded car owners (the cars, not the owners) after the jump. Meanwhile, rest assured this is no redneck truck stop. “Each night, executive Chef Rich Travis oversees the creation of eye-opening flavor combinations, pushing the boundaries of innovative cuisine to enthrall diners. His exquisitely detailed food, distinguished by diversity, inventiveness and spectacular presentation, are perfectly complimented by Tribute’s award-winning wine list.” Personally, I recommend the Grilled Honey Chamomile Glazed Duck Breast Duck Confit and Morel Wonton, Parsnip, Carrot, Wild Rice, Chamomile-Citron Gastrique. But then I’ve never eaten there. And I drive a Honda minivan, which, although it’s ranked number seven on cars.com’s American-made index, doesn’t qualify me for a 50 percent discount. Although… “In addition, during the week of Jan. 25-31, Tribute will recognize all American car-markers and offer a 50 percent discount on food purchases to anyone who drives an American made vehicle, including American automotive suppliers and dealers.”

Warren Brown is nothing if not ambitious in his defense of the indefensible (i.e. GM CEO Rick Wagoner). Rather than just raise a[nother] cheer for the man who’s spent the last decade-plus jamming the yoke forward on General Motors’ inexorable descent into bankruptcy, the Washington Post carmudgeon decided to rewrite the entire history of the Japanese “invasion” of the American automotive market. But before he does that, Warren upbraids those who’ve called for Toyota Prez Katsuaki Watanabe to resign, suggesting that Watanabe and Wagoner are birds of a feather, getting flocked together. “GM, as we all know, has lost substantially more than $1.7 billion. In fact, it has lost $72.3 billion since 2004 under Wagoner’s reign. By that measurement, applying Fire the Coach rules, Wagoner is 40 times more deserving of dismissal than Watanabe. But here’s arguing that all of that is sloppy logic and in many ways inherently unfair. Here’s also suggesting that Fire the Coach management will solve nothing — or remedy very little — in an arena where game policy is athwart common sense, as it is and has been in a United States absent effective industrial and energy policies.” Same old you-know-what, different wrapper. Brown is once again, blaming everyone BUT Wagoner for GM’s chronic, shameful self-destruction.

The New York Times entered the irony-free zone this morning, with an op ed entitled “GM’s Secret Success.” WTF? Is one of the Gray Lady’s ambassadors about to call GM’s descent into bankruptcy and subsequent raid on the public purse a “success”? Nah. The author of the forthcoming tome “Why G.M. Matters: Inside the Race to Transform an American Icon” wants you to know that GM CEO Rick Wagoner is a genius interruptus. “In reality, Mr. Wagoner has presided over the most sweeping transformation of G.M. since the 1920s,” William J. Holstein opines. “He has reversed management’s long practice of meekly going along with the demands of the United Auto Workers, notably with a deal to transfer health care costs to a union-controlled trust over the next two years.” Ah, a tour of an alternate reality. Cool. But why stop there? Why indeed.

Print is so dead. How anyone could expect a magazine with a two-month lead time to compete with the internet on the news front? It’s like pitting a semaphore line against G3 cell service. In case they don’t know it, the buff book’s business model is as dead as the carmakers’ they support. And while we await the car mag medium’s reinvention and rebirth (U.S. Evo please), we get to admire their attempts to remain au courant. I mean, poor todd lassa. Not only is the Motor Trend scribe’s name chronically under capitalized, but he also had to decide whether or not Red Ink Rick Wagoner would still be at the helm of GM in January 2009. What are the odds, eh? Unfortunately, todd erred on the side of common sense.

You just know they’re going to get it wrong. And so they do. Number One: Full-Size Pickup Trucks. Huh? If any market segment is likely NOT to restore The Big 2.8 to glowing good health, it’s the PU segment. But no. I mean yes! “The Dodge Ram is new for 2009, as is the top-selling Ford F-150, while the Chevy Silverado and GMC Sierra twins combine to sell more than any of them. With the Toyota Tundra in retreat and Nissan ready to surrender the segment (they’ll be getting their next generation of Titans from Dodge), cheap gas should keep buyers putting their money into these profit centers.” And if the housing market stays in the toilet, the market remains saturated with trucks or the price of gas goes up? * crickets chirping * No wait! Number Two: American Muscle. Huh? Talk about carving-up smaller pieces a decreasing pie. Nope. Fox is saying halo to the new Camaro, Challenger and Mustang. “Forget for a moment all of the goody two-shoes environmentally conscious cars Washington wants the Detroit 3 to build: These are the ones that look best in the commercials and get shoppers into showrooms. They may not sell in huge numbers, but you can’t pay for the kind of pride they bring to a brand’s image.” Apparently, you– I mean “we” can. Number Three…

Clearly, The Big 2.8’s head honchos did themselves no favors by swanning into DC for a federal teat suckle on big ass private jets. And Ford CEO Alan Mulally’s family outings on the company Gulfstream G500 were a bit OTT for a company on the ropes. But used judiciously, there’s nothing wrong with private jets per se; they can greatly increase an executive’s ability to get information from front line troops. By not sticking-up for private aviation, by slinking back into town via hybrid, the Big 2.8’s CEOs threw a valuable industry into disrepute. No, I mean the private aviation industry. AIN Online reports that “H.R. 7321, the auto bailout bill, which would have prohibited the financially strapped automobile manufacturers from owning outright, leasing or owning any interest in private passenger aircraft, as long as the government debt was outstanding; and required the manufacturers to sell or divest any aircraft or interest that was owned before the bailout. Even though the bailout bill failed, the damage was done. “Jeff Beck, a Gulfstream contract pilot, had one word to describe the state of the economy and the fallout following the GM and Ford announcements: bad. ‘As soon as [people] started talking about the auto executives and their private jets, it just killed the contract pilot business and the aviation business,’ Beck said. A number of other flight departments followed suit, Beck said, and now there simply aren’t enough jobs to go around.” Needless to say, there’s yet more perfidy here in GM and Ford’s craven capitulation to the congressional class worriers.

GMAC. Bank or bust? We still don’t know. As we’ve reported at least twice previously, if the troubled lender failed to make the leap to hyper-suckle by Friday at 11:59 pm (i.e. get investors to swap out enough debt for equity to morph into a bank and scarf $6.3b or so from the Trouble Asset Relief Program, and a bunch more as federally secured debt), then the whole house of cards known as the domestic auto industry will come crashing down. Automotive News [sub] reports that GM spinmeister Gina Proia said the company expects to put out the results of the debt-for-equity swap in “the near term.” Let’s call that option C. Option A? GMAC did the deed but remained tight-lipped for the last two days because majority owners Cerberus never met a cloak of invisibility they didn’t wrap around their operation like Christo covering the Arc de Triomphe. After all, this is the same privately-held company that owns Chrysler, which expects Uncle Sugar to “lend” it $4b, despite the fact that we don’t know how Cerberus paid for it in the first place and/or who owns the paper on what now, after the sale and (presumably) deep borrowing against assets. And now, option B…

Reuters (and everyone else) reports that GM is suing bankrupt parts maker Cadence Innovation to recover the bits it needs to build/launch the new Chevrolet Camaro. Both more and less specifically, Cadence makes consoles, door panels and “other parts.” GM wants all of it, bad. So they’re suing, asking a Delaware Court for permission to access Cadence’s factory to recover the necessary tooling and parts to craft their Canadian retro-muscle car. “Even one day’s disruption in supply of certain Component Parts could cause a shutdown of GM assembly operations,” The General’s lawsuit proclaims, using German capitalization to emphasize the seriousness of their demands. A refusal to do so would end up “disrupting not only GM’s business, but the operations of countless suppliers, dealers, customers, and other stakeholders.” Countless? That’s a lot, right? And once they’re being both vague and alarmist, GM said the damages from Cadence’s refusal to surrender machines and parts “would be substantial, but difficult, if not impossible to calculate.” GM reckons it needs the parts-making machines by January 12th. Or a plague of locusts will descend upon the earth and boils will fester on muscle car collectors’ butts. But there’s more to this story than first meets the, uh, eye…

Successful GM, Chrysler Dealership
Location: Mississippi > Confidential
Industry: Auto Related > Auto Dealers
Financials
Asking Price: $1,500,000
Cash Flow: $776,677
Cash Flow Comments: EBITDA
Real Estate: $2,000,000 (Not Included in Asking Price)
Seller Financing: Maybe
Business Summary
This is a very well established dealership that continues to have strong profits and sales. The area is growing and strong economically with job growth. Strong service department and parts sales departments are very profitable and enjoy a great reputation. One owner is willing to continue to operate as a minority partner. Only serious inquiries please.
About the Business
Year Established: 1955
Facilities: Great
Market Outlook and Competition: Strong
About the Sale
Management Training and Support: Yes
Reason For Selling: Retirement of majority owner

Cerberus is the highly secretive private equity company that owns Chrysler, the ailing American automaker that just scored $4b from the Troubled Asset Relief Program (TARP). Cerberus also owns 51 percent of lender GMAC (soon to be less) and all of Chrysler Financial Services. And a lot of Burger Kings. Anyway, The New York Daily News reports today that “Cerberus says it will invest the first $2 billion of Chrysler Financial profits back into the financing arm’s parent automaker.” WHAT PROFITS? This horseshit comes hard on the heels of Cerberus pledge not to take any profit on Uncle Sam’s forthcoming $4b “investment” in Chrysler. WHAT PROFIT? CEO “Boot ’em Bob” Bob Nardelli and his golden parachuted pals want us to believe that Chrysler is determined to become a profitable automaker. Is there anyone who actually believes that? FYI, make the jump for Cerberus’ reason why Uncle Sam must boldy go where the equity firm fears to tread.

President Bush has pledged $4b of your taxes to Chrysler. Ultimately, the money will be under the control of the ailing American automaker’s owners, Cerberus Financial. Despite the enormous call on the public purse to fund a company whose prospects are dimmer than a 70’s porno theater, the secretive private equity group that pulls ChryCo’s strings has not opened the company’s books to full public scrutiny. Fortunately, we have a little something called the free press (and I don’t mean you Freep) ready to poke its nose into the dealings of the company about to poke its nose into the federal trough. The Wall Street Journal [sub] reports that “Public documents filed in Oakland County, Mich. show a Cerberus subsidiary called Auburn Hills Owner, LLC, bought the 458-acre complex on Aug. 3, 2007, for $325 million. That same day, Cerberus completed the deal to take over 80.1% of Chrysler from Daimler.” While the Journal seems obsessed with the fact that ChryCo employees didn’t know that Chrysler proper doesn’t own the Auburn Hills campus, the accounting behind the transaction is more interesting…

Can you believe it? And to think they were trying to become the first firm to offer a production diesel-hybrid. In 2010. Sound familiar?