A few weeks ago, we cited Canada’s Globe and Mail, which wrote with great insight: “It’s entirely possible the Magna bid is in serious trouble. Indeed, the obstacles-political, economic, financial and industrial-are formidable and the negotiations are just starting . . . . Let’s just say that Magna’s bid for Opel is shaping up to be the most complicated auto deal of the year.”

That was quite an understatement.

As little known Tengzhong itches to buy Hummer for reasons unknown, the two Chinese regulators who have to chop (put a big red stamp under) the deal can’t agree whether it’s a great or a dumb idea, Reuters reports. Chop the deal or chop off the head?

From Reuters comes word that Car Czarlet Steven Rattner will be leaving the Presidential Task Force On Autos. The move “represents the start of a long-planned wind down of the autos panel” according to Reuters’ interpretation of an anonymous White House source. “With GM’s restructuring complete, Steven Rattner, whose leadership and vision were invaluable to the Auto Task Force’s efforts, has decided to transition back to private life and his family in New York City,” explains a statement from Treasury Secretary Timothy Geithner. “We are extremely grateful to Steve for his efforts in helping to strengthen GM and Chrysler, recapitalize GMAC, and support the American auto industry. I hope that he takes another opportunity to bring his unique skills to government service in the future.” Unique skills? Is Rattner getting blown off or is this Mission Accomplished? A little of both?

I’ve taken a lot of heat in these parts for predicting that Ford’s bankruptcy bound. Having watched GM and Chrysler’s long march to Chapter 11, the signs seem pretty obvious to me: lousy branding, excess nameplates, non-competitive models, a pegged BS meter and a proven inability to take in more money than they spend. Yes, there are differences; his name is Alan Mulally. But, as The Detroit Free Press finally reports, The Blue Oval Boyz are burning down the house. Or, to put it more politely, “Even if Ford Motor Co. reaches all of its targets by 2011, the Dearborn automaker’s growing debt load could end up weighing the company down.” As far as euphemisms go, that one just went.

When TTAC received a copy of GM’s letter to dealers “asking” them to lobby against the dealer cull rollback bill, we blogged it as a “ loyalty oath.” More than a few commentators said pish-posh [paraphrasing]; H.R. 2743 was nothing more than an SOP lobbying campaign. The fact that the letter told dealers to cc GM’s National Dealer Council Chairman Duane Paddock left little doubt in our (OK my) mind that New GM’s dealers were being told in no uncertain terms to toe the New company line (i.e. shiv their former colleagues). Automotive News [AN, sub] reports that “General Motors executives have been pressuring individual dealers to sign a statement saying they oppose legislation that would restore terminated dealerships’ rights, according to a U.S. senator, a dealers group and dealer representatives.” Point counterpoint after the jump.

The House Appropriations Committee has passed a provision in the 2010 financial services spending bill that would require GM and Chrysler to work through state courts—instead of the federal bankruptcy court—to terminate dealerships. Rep. Steven LaTourette, R-Ohio, sponsored the amendment. Ignoring the fact that federal bankruptcy law trumps state bankruptcy law, LaTourette explained, “Car companies have used bankruptcy to run roughshod over state bankruptcy laws.” In reporting this, Automotive News made what has to be the understatement of the month, if not of the year: “GM opposes the House bill.” Ya think???

Who will end up owning Opel is turning more and more into a brawl along party lines. Officially, the seller is GM. The final arbiter will be the German government because they foot the bill to the tune of billions. Trouble is, the German government is divided. It is made up from a coalition between the center-right CDU and the center-left SPD. Both run the country. Both are on each other’s throats. Both are in a bitter fight for votes in the September national elections. Several states are also up for grabs. It’s a “super election year.” Both have their favorites. So who will it be?

To many peoples’ surprise, SAAB was amongst the brands that made the cut when federal bankruptcy judge Robert Gerber cleaved GM in two. Saab was owned by GM Canada. It’s now part of New GM—which is busy negotiating with The Koenigsegg Group to offload the Swedish automaker. Very little has come out of the recent negotiations re: the sale and/or the European Investment Bank (EIB) loan that Saab, GM and Koeningsegg view as a prerequisite for the deal to go down. Meanwhile, last week, SAAB CEO Jan Åke Jonsson declared “we need a cash infusion so we can boost production.” Förlåt?

GM is so screwed. We are so screwed. On the occasion of Old GM’s judicial death sentence, Steve Rattner offered an instant analysis of what New GM needs to do to survive: eliminate the perception gap. “There’s often a lag between perception and reality,” the head of the Presidential Task Force on Automobiles (PTFOA) told jobbing journos. Automotive News [sub] puts it this way: “General Motors must convince consumers that the quality of its vehicles has improved to stop a decline in U.S. market share and survive after bankruptcy, a senior Obama administration official said. Steve Rattner, the head of the Treasury Department’s auto task force, said the quality of GM vehicles has improved, citing the Chevrolet Malibu as an example. But he added that consumers have to be made aware.”

But will it be accepted? As reported yesterday, China’s BAIC has handed in a better offer for Opel. This gave everybody a reason to pause. Magna called off a board meeting that had been scheduled to give the go-ahead for Opel. GM and the German government are reading intently what BAIC proposes. BAIC proposes export of Opels to China. For a while, at least.

You may not be familiar with H.R. 2743. The Automobile Dealer Economic Rights Restoration Act of 2009 tells New Chrysler and New GM that they “may not deprive an automobile dealer of its economic rights and shall honor those rights as they existed, for Chrysler LLC dealers, prior to the commencement of the bankruptcy case by Chrysler LLC on April 30, 2009, and for General Motors Corp. dealers, prior to the commencement of the bankruptcy case by General Motors Corp. on June 1, 2009, including the dealer’s rights to recourse under State law.” In other words, it would reverse New ChryCo’s and New GM’s dealer cutbacks—or at least force Uncle Sam to spend taxpayer billions to dump them. The bill is doomed. But that’s not stopping GM from asking its post-cull dealers to show their fealty and help twist the knife into their former colleagues. Text of the “loyalty oath” after the jump. [thanks to you-know-who-you-are]

For July 7, Magna had called a board meeting to rubber stamp the takeover plan of Opel. Now, Reuters says the board meeting has been delayed to July 14. Why, is anybody’s guess.

What is for sure is that the delay gives rival bidder Beijing Automotive (BAIC) more time to convince GM and especially the German government that their offer is better than Magna’s.

There are a few familiar faces on Chrysler’s newly complete board, which was announced over the weekend (via Chrysler Media). But not many. Chairman C. Robert Kidder, Sergio Marchionne and Fiat Powertrain CEO Alfredo Altavilla are the previously-announced, or otherwise-obvious picks. No surprises there. The other picks? Let’s take a look, shall we?

Here’s the (warning) 87-page ruling that allows “Old GM” to sell its best assets to “New GM.” The bottom line: Judge Robert E. Gerber of the U.S. Bankruptcy Court for the Southern District of New York brushed aside objections by dissident bondholders and product-liability claimants. Judge Gerber accepted the government/bankrupt automaker’s argument that there was no alternative to the Old-to-New-GM asset sale save liquidation, which would be “a disastrous result for GM’s creditors, its employees, the suppliers who depend on GM for their own existence, and the communities in which GM operates.” What’s more (or less), “In the event of a liquidation, creditors now trying to increase their incremental recoveries would get nothing.”

After a lot of arm twisting, and several deadlines set by the US court and the German government, the Opel deal finally is entering the final round—for now. After a suitor has been found, a French woman may spoil the whole wedding.

Sean Kane of safetyresearch.net gave us the heads-up on a move to put warning labels on products manufactured by pre-C-11 Chrysler.

WARNING! This vehicle was produced prior to the date when the Chrysler bankruptcy was approved. If you buy this vehicle and are injured or killed, even if your injuries were caused by the manufacturer, you or your survivors will not be able to recover your losses by taking action against the manufacturer. If your passengers are injured or killed, even if their injuries were caused by the manufacturer, they and their survivors will not be able to recover their losses by taking action against the manufacturer.

In the market for a parking lot in Flint, Michigan? Or a nine-hole golf course in New Jersey (needs TLC)? How about some scenic acreage way upstate New York that features prominently on New York State Registry of Hazardous Waste Sites and on the federal superfund list of contaminated places? All—and more—available now to the highest bidder. Come on down!

While the supposedly best of GM is sold to the supposedly new GM, the worst will be auctioned off in bankruptcy court. Call it the Adam and Eve of all foreclosure sales.

Open house in Massena, New York. This fine waterfront property, abutting the St. Regis Mohawk Indian Reservation in the east and the St. Lawrence River to the north, was home to a GM foundry. It made aluminum cylinder heads for the Chevrolet Corvair. It also mass-produced PCB sludge.

Straight from the horse’s mouth:

GM management has noticed the continuing high trading volume in GM’s common stock at prices in excess of $1. GM management continues to remind investors of its strong belief that there will be no value for the common stockholders in the bankruptcy liquidation process, even under the most optimistic of scenarios. Stockholders of a company in chapter 11 generally receive value only if all claims of the company’s secured and unsecured creditors are fully satisfied. In this case, GM management strongly believes all such claims will not be fully satisfied, leading to its conclusion that GM common stock will have no value.

A month ago, we reported that GM offered to buy back Opel some day “when we do better after a restructuring phase.” Offered? GM downright demands the right to buy back Opel after a buyer has successfully resuscitated and restructured Opel.

The rumors of such a demand have been around for a while. GM is pretty much the only one on the planet who thinks this is a swell idea.

The Washington Post reminds us that Uncle Sam’s chance of recouping taxpayers’ $50 billion “investment” in New GM shares are somewhere between slim and none. To recover the money poured down the GM rathole so far, not including “extraneous” bailouts to lender cum banks, suppliers, dealers and car buyers, the automaker’s stock must rise to the point where it’s worth $68 billion. And remain at the level as the feds attempt to off-load their/our 60 percent share. As we like to say in these parts, good luck with that. Or, as the WaPo puts it, “Even at its recent 2000 peak, GM’s stock was worth only $56 billion.”

Automotive News [sub] indulges in the optimism that dare not speak its name, courtesy of the omnipresent Center for Automotive Research. “A happier GM? Billions in costs disappear,” runs AN‘s headline. And then comes the equivocation [emphasis added]:

During its reorganization, General Motors should be able to shed about $12.5 billion in annual costs — paving the way for possible profits, higher product spending and improved supplier health once U.S. vehicle sales recover to more normal levels.

Inspiring stuff! Why, if these “shoulds” and “possibles” come true, CAR research shows that “GM could even eliminate almost $3,000 per vehicle in incentive spending, adding an additional $8 billion in savings when compared with the pre-bankruptcy GM.” It’s already a stretch to believe that GM can hold steady at a 10m SAAR, given its long-term market share losses, but eliminating incentives? Why not a flying, carbon-neutral Camaro?

Facing mounting political pressure, GM’s new masters have agreed to allow new liability cases against products made by old (pre- and intra-bankruptcy) GM to proceed against New (post-pre-bankruptcy). According to the New York Times, the deal went down in federal bankruptcy court on Friday. “G.M. and the administration’s [hands-off] auto task force have been negotiating with more than a dozen state attorneys general who have objected to the company’s plan to sell its desirable assets to a new, government-financed entity. A hearing to approve the plan is scheduled for Tuesday in federal bankruptcy court in Manhattan.” So, that’s that then. The Ad Hoc Committee of Consumer Victims of GM and Chrysler can relax. Comcast can kick back. Rep. Andre Carson can chill. Or can they?

For those who would make the unwise decision to roll the old car’s debt into the new car, yet another reason not to. Policy wonks may recall how during the Bush administration the banking industry got its fondest (pre-bailout) wishes granted. The bankruptcy rules were re-written to make it substantially more difficult for a normal person to discharge debt. (Interestingly, mansion owners in Texas and Florida somehow survived unscathed while the vast majority of bankrupts are still done in by medical bills.) The upshot is that fewer qualify for a full Chapter 7 discharge and more must file a Chapter 13 repayment plan. Here’s what that means for the “typical” car buyer.

I don’t mind tripping the light fantastic with PR people. No journalist should expect to get the straight dope or the inside line from a person paid to protect his employer from the slightest ding to their rep. It’s the dark side. Deal. And here’s the deal with this story, wherein an ad hoc committee of lawyers created an ad taking New Chrysler and Old Soon-to-be-New GM to task for trying to walk away from post-C11 product liability.

Do we really want to have this debate again? You know, the one where Detroit’s defenders claim that federal “loans” are loans not bailout bucks? I guess so. After all, the MSM has been all about Ford being the only domestic not to receive a federal bailout. And now we hear that The Blue Oval Boys have landed a $5.9 billion dollar retooling loan from the Department of Energy. As expected. “Our business plan assumed about the amount we got,” FoMoCo CEO Alan Mulally told Reuters. “It’s very consistent with our plan.” Automotive News [sub] reports that Ford. Wants. More.

Update: According to the speaker of the influential CDU Economics Council, there will be no decision about the future of Opel before the 27 September national elections. “Nothing will be decided before the elections, because nobody in the government wants to lose face because of this,” a council member said to Automobilwoche [sub]. The Opel Trustee figures that the latest date for a final, signed contract is mid September. If nothing is signed by then, the government money has run out and Opel is bankrupt.

The GM/Opel/Magna/Sberbank/GAZ group grope is in trouble. The writings are on all walls.

Opel is hemorrhaging more than €5 million per day, the Westdeutsche Allgemeine has learned. Opel spokesfolk said, it’s “only” €2.8 million. By mid September, the €1.5 billion bridge loan, underwritten by the German government, will be used up. There won’t be more money—that has been made as clear as can be. Time and money are running out. Why is Opel burning so much cash despite brisk sales? The Opel Tech Center has 7000 highly paid engineers. They work(ed) for all of GM. Bankrupt GM stopped all payments.

In the meantime, talks between GM and Magna hit one snag after another.

I started TTAC’s General Motors Death Watch in the summer of ’05, after the automaker pulled tens of millions of dollars in advertising from the LA Times. GM was pissed at a Dan Neil Pontiac review that called for an executive cull. While I’d been predicting bankruptcy for The General long before that point, the automaker’s bully-boy tactics against this country’s finest carmudgeon was the final straw. GM was free to pull its ads. And I was free to start the Death Watch. The rest, as they say, is history. Only maybe not so fast.

This interview raises some important questions. Is it me or does Alex Taylor sound like Sgt. Friday? What editor thought he could get away with using B-roll of a union worker with a sign referring to a “Golden Shower?” What kind of company has a CEO who can go his entire life without anyone daring to correct his pronunciation of “hubris?” Why would the CEO of GM point out out that “every one” of the company’s surviving 34 nameplates has to be a winner? I mean, what are the odds? And what’s with this: “We’ve lost a part of the population but [sotto voce] it’s not that large.” No complacency here. No, sir.

We’ve said it before: both Chrysler and GM have been using GMAC as their “bag man”: withdrawing credit from dealers to kill them without messy political blowback. This despite the Small Business Administration’s new federal loan guarantee program for beleaguered car dealers. The Wall Street Journal reports that where the feds giveth, GMAC is still taking away. “GMAC LLC is suspending wholesale financing for certain Chrysler Group LLC dealers it considers to be too risky to lend to, GMAC and Chrysler confirmed Wednesday. The move could ultimately push more Chrysler dealers out of business and hurt the company’s ability to sell vehicles.” That last bit’s pretty funny—providing you’re not a Chrysler dealer. Anyway, the WSJ runs the numbers or at least tries . . .

One of our Best and Brightest forwarded GM’s letter to the white collar workers targeted for elimination (by October), along with a pdf of the Retirement Package [ download here]:

Dear U.S. Classified Salaried Employees:

On June 1, Fritz Henderson shared the company’s plans to reduce an additional 4,000 salaried employees from our U.S. workforce. This news was particularly difficult to hear, considering we had just undergone a significant staffing reduction in May. We can assure you that these organizational restructuring and reduction decisions were made after serious deliberation and necessitated by the unprecedented business realities facing GM.

The court battle over the formation of Treasury-funded Vehicle Acquisition Holdings, LLC (a.k.a. New GM) will soon be joined. On June 30, Federal Bankruptcy Judge Robert Gerber will begin to assess the range of challenges to the government’s plans. Bloomberg reveals the quadruple threat facing the General Motors “reinvention.”

What do you do if you’re an overlarge organization fighting a losing battle for market share in a down market, with high fixed costs and a stultified bureaucracy, facing more nimble competitors? If you’re Time magazine, you interview Chrysler-controlling Fiat CEO Sergio Marchionne. And if you’re Sergio facing a similar situation for Chrysler, you tell the troops that an Apple a day keeps the Sebrings away. “Since he took over as chief executive of Italy’s Fiat in 2004, the chain-smoking Canadian-Italian has used Apple as a model, focusing on the way Steve Jobs transformed it from an also-ran computer company into a global icon of cool. He encourages Fiat managers to take a close look at Apple’s branding prowess and even asks them to benchmark their activities against the company. His biggest success at Fiat is the 500 — a tiny, very cool 21st century version of a 52-year-old Italian icon once driven by movie stars such as Marcello Mastroianni and Sophia Loren — which Marchionne calls ‘our iPod.'”

When the Presidential Task Force on Automobiles (PTFOA) fired GM CEO Rick Wagoner, it should have ended any debate whether or not the Obama Administration was in complete control of the soon-to-be-nationalized American automaker. And yet the president and his minions continue to assert that the PTFOA’s ongoing interventions within GM’s administration jibe with their preposterous proclamations about a “hands-off” non-managment, management approach. Although the PTFOA left themselves a supertanker-sized loophole—we’ll only mess with “macro” decisions about GM’s corporate governance—evidence mounts that the 25-member government quango is, as the Brits would say, well in there mate. The latest proof of life arrives via our good friends at Autoline AfterHours. On John McElroy’s vidcast, GM’s VP of sales, service and marketing for North America offered fresh insight into the joys of federal ownership.

TTAC reader and marketing consultant John Charles of Stockholm, Sweden, was gracious enough to send us some more info on investor Mark Bishop, the man who would be king of Saab.

Hi, I read your very interesting piece on Mark Bishop and SAAB. However you (unintentionally, I imagine) missed out a few details. I have found out that Bishop was involved as President of the rather shady Quick Loan Funding. It is understandable that Bishop chooses not to mention his time at QLF in his CV.

Hmmm. One wonders about the veracity of LaNeve’s excuse for allowing “nearly” 60 dealers to avoid termination. Who created the “incorrect or inaccurately reported dealership financial data” upon which their second lease on life was—allegedly—based? Given that dealers fighting for their survival wouldn’t under-report their financial data, common sense suggestd GM’s auditors are responsible for the, dare I say it, mistake. So, how did GM screw it up for “nearly” 60 dealers? And surely that boner throws doubt on the rest of the dealer appraisals ( view criteria here). Fuel for the fire for H.R. 2743. In short, GM is still run by the Gang That Couldn’t Shoot Straight. Make the jump for official dealer com from Dr. Death. [Thanks to you-know-who-you-are for the email.]

Earlier this afternoon, I filed a Freedom of Information Act (FOIA) request with Uncle Sam re: the Stimulus Package spending on 27,205 Chrysler, Ford and GM vehicles. What we want to know: the models purchased. Why we want to know it: is Uncle Sam spending U.S. bailout bucks to purchase vehicles made outside of the United States? And how fuel efficient are these vehicles? As saving jobs and the environment were the two rationales behind the authorization, we feel the government should reveal this information. So far the GSA, Speaker Nancy Pelosi and Senator Jack Reed (one of RF’s RI homies) have either ignored or flat out denied our request. So I’ve filed the FOIA request using my own name/address as follows:

When GM CEO Fritz Henderson logged-in for a live media-only chat on GM’s FastLane blog, the headline takeaway was “I am not a fan of rebadging.” Ha! Since returning to the scene of the crime, I’ve discovered that there’s plenty of other grist for a zombie watcher’s mill—such as the fact that Henderson appeared eleven minutes late. The first words off his keyboard: “I am here.” I would have gone for “Je pense, donc je suis,” only I don’t think GM’s main man knows the difference between badonk and donc. Henderson starts with a defense of the Hail Mary-ette Chevrolet Cruze that sounds a lot like a PR spiel from 1976 (Chevy Vega). It goes downhill from there.

As you’ve no doubt guessed, the above quote comes courtesy of an Obama administration official. Showing infinite reserves of credulity and restraint, the Detroit News straight-up reports that “Larry Summers, the White House’s chief economic adviser, said in an interview that Congress shouldn’t interfere in the running GM and Chrysler . . . ‘We’ve been very clear that companies needed to be run commercially, rather than politically.'” Although I was recently, correctly admonished by several of our Best and Brightest for profanity, I’m going to use my last expletive here: that’s fucking awesome.

China Business News [via Gasgoo] reports that Automotive Industry Holding (BAIC) is miffed. They’re walking from any Opel, Saab and Volvo deals. BAIC will not engage in more talks— for the time being. China Business Daily claims to have a source on the inside.

Snickers in Detroit, horrors in Rüsselsheim: Suddenly departed Government Motors purchasing chief Bo Andersson is taking a job in Russia. He will be Putin charge as chairman of Russian automaker Gorkovsky Avtomobilny Zavod, better known as hapless GAZ.

Why would GM’s VP of sales and marketing for North America expect his company’s [remaining] dealers to contact their elected representatives to support Government Motors’ dealer cull? Times two when you consider that GM is planning on making another round of dealer cuts in the future. “Hey. It’s Mark LaNeve. Thanks for lobbying for our downsizing. Oh, by the way, you’re next.” No, I’m not making this up. Here’s the e-mail, complete with fill-in-the-blanks phone script. [Thanks to you-know-who-you-are.]

OK, I missed this one: an Automotive News [sub] Op-Ed by Mike Jackson, GM’s former marketing and advertising Veep [thanks for the heads-up, Frank]. In his piece, Jackson rips Government Motors a new one. Well, not exactly. ‘Cause excoriating GM for past mistakes would require Jackson to admit his own role in the debacle. Jackson can’t do that. That would be too much like taking the same sort of personal accountability for which the ex-exec now calls. Less enigmatically, Jackson’s rant tells GM what it should do, you know, now that he’s got the hell out of town. First up: culture. “Streamline the organization structure. Get rid of the cancerous GM lifers. The new GM must be nimble and evoke emotion and passion. Have the leaders of the divisional brand teams report directly to the office of the CEO, rather than through four layers as they have done.” More? Of course there’s more.

If we’ve learned anything from animated cats over the last several decades, it’s that opposites can attract (and that music video directors get all the good drugs). But if there are serious doubts among analysts about the Fiat-Chrysler hookup, imagine what they’re saying about the Saab-Koenigsegg deal. After all, the buying firm sells one-of-a-kind cars for a cool million dollars a pop while the purchased firm can’t sell reworked GM offerings at zero-percent interest. Is there something rotten in the state of Sweden?

Creative Global Investments analyst Sabine Blümel takes on the Fiat-Chrysler marriage at just-auto.com [sub] and she seems unable to find anything positive to say about the deal. “A three-way alliance, also including GM Europe, and even better, also GM Latin America, would have given [Fiat Group] a full-range product portfolio and an extended and strengthened geographic footprint,” says Blümel. Take GM’s Opel or Latin American ops out of the picture, and you’ve got a nasty case of the not-so-muches on your hands. “We see little potential strategic benefit for the Fiat and our concerns regarding the benefits for Fiat from the alliance have, if anything, increased since the alliance plan was first announced,” is the verdict.

GM LETTERHEAD

June __, 2009

VIA Federal Express

[DEALER ENTITY CORPORATE NAME]

[DEALER ADDRESS]

To All GM Dealers in the US Who Received a Participation Agreement:

First and foremost, thank you for your continued support and efforts on GM’s behalf in these difficult times. As we indicated when we sent you the June 1, 2009 letter agreement (the “Participation Agreement”), GM wants your dealership to be part of GM’s future and our whole focus is to try to improve, together, the GM dealer network. We are gratified that, through Monday, June 8, we have received ______ signed Participation Agreements, indicating broad dealer support of our objectives for the dealer network.

We have, however, received thoughtful and insightful questions and comments from individual dealers, the NADA and the National Dealer Council (the “NDC”) regarding the Participation Agreement. In response, we have had discussions with the NADA and the NDC. As a result of those discussions, we are writing to provide clarity on several points addressed in the Participation Agreement, as well as to amend certain terms and conditions of the Participation Agreement. Again, our whole focus here is to work with GM dealers to insure that both GM and the dealer body are best positioned to compete in this challenging environment and more importantly in the future.

The German government is sending strong signals to GM to move on the Opel deal with Magna — or else. Their message: “Get on with it, or Opel will be Chinese.”