American Leyland Birth Watch 1: A WONDERFUL, AWFUL Idea

Since the beginning of Detroit’s slide into federal dependency, TTAC’s Best and Brightest have applied their razor-sharp wit to this sad, sad situation. But the bailout boondoggle beggars belief—overwhelming any attempt to subdue it with sardonic humor. To wit: the TTAC meme called American Leyland. On a scale from absurd to certifiable, the marriage of the two ailing American automakers comes pre-wrapped in a straitjacket. Earlier today, I suggested it was too stupid a concept to fade from federal consideration. And the more I think about it, the more it seems inevitable.

Bob Corker spent a part of this day having a chin wag with Reuters. The Senator from Tennessee told the news agency “there’s little hope that Chrysler can remain a stand-alone company.” The outspoken bailout critic advised “those advocating consolidation [which would be, uh, him] should realize that a tie-up might involve foreign ownership.” In other words, the guy on the “no way Jose” end of the bailout “debate” wants his colleagues to realize that a Chrysler-Fiat merger is OK.

I repeat, a republican is calling for the feds to approve Chrysler’s “plan” (I’m running out of quotation marks) to surrender Chrysler—an automaker that’s already into Uncle Sam for $9b—to a foreign owner. Fiat, no less.

The fact that Fiat has sworn on the grave of its sainted mother that it will not give Chrysler a plug nickel seems to have escaped Senator Corker’s attention. Or has it? Are we at the point where the feds are crying “will someone rid me of this troublesome automaker?” Sure. Absolutely. Will it be Fiat? Nope. Never.

Did anyone notice that Fiat reported a 69.8 per cent drop in its 2008 fourth-quarter profits? You can attribute that corporate cratering to the global economic meltdown all day long, but there’s a reason Fiat has pledged zero dollars to this matrimonio del fantasia, and it isn’t because they’re saving money they don’t have for a rainy day that’s already here.

The Fiat deal’s real “value” (found a pair in the back): it paves the way for the end of Chrysler as an independent automaker. Psychologically, it makes the break. In fact, Chrysler’s imminent demise and subsumption is like the old punch line “we’ve already established what you are; we’re just haggling over price.”

The thinking is clear enough. If we don’t want to hand over Chrysler to the Italians, then we gotta PICK SOMEONE. I know! what about . . . GM! You know, the other automaker suckling on the federal teat. We could put all our automotive troubles in our old kit bag, bend over and smile, smile, smile.

Don’t get caught up in the branding insanity or logistical nightmare this nutso plus plus proposal would engender. We’re WAY beyond that kind of fact-based rational analysis. It’s a good idea simply because it’s an idea; the unthinkable (a ChyrCo dissolution) is, of course, unthinkable.

Even more frighteningly, GM is actually good at this. Adding Chrysler’s Jeep, Dodge and house brands to GM’s “core portfolio” present no more challenges than The General faced when it brought Saturn, Saab and HUMMER into la famiglia.

Three brands go, three brands come. No biggie. The vehicles produced by this new “American Leyland” (I’m almost out) would be no better or worse than they are now. Who would buy the fruits of this unholy alliance? No one of course. Well, no one as in no person. The feds’ll have ’em. The money’s already lined-up (thank you America!).

Search “vehicle” on this United States Mayors’ “Ready to Go” bailout wish list. Tucson, AZ: 30 cars ($1.3m); Freeport, NY: 20 electric cars ($1m); Burlington, VT: 8 cars and 4 staff for “CarShare” program ($450k); Oakland, CA: 30 cop cars ($1.74m); West Hartford, CT: “vehicle replacement” ($400k); Hialeah, FL: “Vehicle purchase” ($2m); Pembroke Pines, FL: “vehicles for personnel” ($600k). And on and on and one to the tune of billions of dollars.

What are the odds that the feds will stipulate that bailout bucks allocated for government vehicles must be spent on products from taxpayer-supported automakers? Sorry. Automaker? It’s a dead certainty.

Obviously, government fleet purchases are still not enough to sustain this gigantic, theoretical American Leyland. The new company would continue to shed share and burn bailout bucks. But that’s not the point.

The bottom line is that the bottom line is no longer the bottom line. Chrysler and GM no longer have to make a profit selling cars. They need only please their new paymasters: politicians. And your duly elected representatives will buy anything American Leyland makes. Or nothing, as the case may be.

By combining Chrysler and GM into American Leyland, politicians will refashion the automakers in their own image. American Leyland will be slow, insensitive to the market and deeply, hopelessly unprofitable. In other words, it’ll be business as usual. Only you’ll have to pay for it, whether you like it or not. To quote Tommy DeVito, what do you mean funny, funny how?