“We want auto finance companies to be able to raise the money they need to finance more auto purchases.” Well I bet you do, Ms. American Financial Services Association spokeswoman Lynne Strang. But c’mon, are we really talking about Uncle Sam taking over bad car loans? Yes, we are. “The American Financial Services Association is asking Congress to allow auto finance companies and other institutions to tap the $700 billion bailout fund designed for the troubled mortgage industry,” Automotive News [sub] reports. “The trade association, based here [Washington], also is proposing that automobile loans be classified as ‘troubled assets’ along with home mortgages.” Just another lobby group wanting a suck on the federal teat? Well, yes. But this hungry mouth could well get fed. “U.S. purchases of distressed assets would help people, Mr. [Secretary] Paulson told The Wall Street Journal, by enabling lenders to resume making loans for homes, cars and small businesses, and by keeping the economy from sliding into a deep decline that would cost jobs.” When private enterprise depends on government largesse to survive, when an economy depends on bad debt rather than good productivity to thrive… where’s John Galt when you need him?

Justin called me grumpy. That would be like the son of a Navy Admiral who’s been a high profile Senator for nearly three decades while marrying a billionaire beer distribution heiress calling the mixed-race son of a single mom from Kansas “elite.” But I digress, I was not so much grumpy as surprised that the new Audi S4 has less power than the new S4. Kinda surprising. That said, I always liked the older S4 with the twin-turbo 2.7-liter V6 more than I ever did the newer, heavier V8 powered S4. Sure, a WRX of the time (2002) ran circles around it, but you could slap a Stage IV kit on the old-old S4 and POW! Straight to the moon, officer! However, by all measures (both SAE and my fat butt) the C6 Corvette is the best ‘Vette ever. It just is. Sure you could factor in looks and interior (looks: C3 > C6 — interior: C2 > C6) but Corvette owners don’t factor in looks and/or interior. Meaning we’re not going to either. And if the new Camaro ever shows up, it will be miles better than any of its ancestors. I know this because the 2015 (or is that 2010?) Camaro is based on a shortened version of the Zeta Chassis that underpins my new love, the Pontiac G8 GT. However, however — what about the BMW M5? If you pull the limiter off the new one (E60 M5), it can go over 200 mph and it seats five. 507 hp V10, too. But, compared to the E39 M5, the new M5 is Robocop II. Bigger, louder, more deafening but ultimately not nearly as satisfying or more importantly fun as plain old Robocop. That’s right, I’m calling the E39 M5 Robocop. [Ed – you bet your ass it is]. Newer cars might have better stats, but sometimes they just don’t have the spirit. You?

Dodge has a new full-size Ram pickup on the streets. Well, at the dealership. Anyway, the fact that it’s a gas hog– albeit a slightly more efficient gas hog– won’t come as much of a surprise to anyone familiar with the breed. Of course, a Washington Post staffer is hardly likely to be a member of the genre’s core clientele– or at least admit as much to his chardonnay swilling compatriots. And yet the WaPo’s nominal car critic Warren Brown feels compelled– compelled I tell you– to devote virtually his entire Ram review to the behemoth’s fuel economy, or lack thereof. “Our 2009-model test truck came with the short cargo bed — five feet and seven inches long. Had we gotten one with the long cargo bed, eight feet, we could have distributed our cargo over a longer surface, thereby reducing its height. We would have gotten better mileage that way… It usually takes more energy to drive four wheels than it does to drive two, especially if much of that driving will be uphill, which was the case on the New York end of our trip. The upshot is that we burned regular gasoline at the disappointing rate of 15 miles per gallon on the highway, an egregious consumption accompanied by a total $225 fuel bill for a round trip of nearly 700 miles.” On the positive side, “Chrysler is whacking as much as 40 percent off Rams’ list price.” Uh, that’s LAST YEAR’S Ram, Warren. Well, for now.

In fairness, Lieberman might say he’s not grumpy about the Audi S4 having only 333 horsepower, since the last generation S4 with the V8 cranked out 340 ponies. That’s a decrease dude, and in the car biz it’s nearly unheard of (unless you’re Acura, in which case it’s typical to botch successive generations of a model). So what gives? The new supercharged V6 has a little more torque than the outgoing V8, better fuel economy, and is a little lighter. But what’s really going on here, in this writer’s rarely humble opinion, is that Audi is repositioning the S4. Where it used to be a dead on competitor for the BMW M3, they’re pitching it now at the BMW 335i. The real Audi competition for the M3 is the RS4, which matches the M3’s insanely high-revving V8 and approximates the horsepower at 420. In the meantime, the S4 does what the 260 horsepower A4 3.2 can’t – go toe to toe with higher horsepower cars from the competition. The big question then is whether Audi will be able to price the S4 low enough to make it a viable BMW 335i/Infiniti G37 alternative. My gut says no, not gonna happen. The S4 will price itself out of the competition.

Chrysler unveiled some primo bailout bait today: three electric vehicles (EVs). Choosing CNBC as point man, ChryCo’s CEO showed-off a fully electric Dodge sports car and a Jeep and minivan hybrid. While the press has been suitably impressed, pistonheads who’ve been following (and following and following) the hoopla surrounding GM’s plug-in electric – gas hybrid Chevrolet Volt are settling-in for the long haul. Meanwhile, we must endure Auburn Hill’s spin on the whole “future vehicles” thing. Or do we? Here’s Chrysler press release…

Even as Chrysler unveils its brand new bailout bait (a.k.a. prototype electric vehicles), the ailing American automaker has finally unleashed its long-promised Holy War on “under-performing” dealers. Lawyer Richard N. Sox, Jr., Esq.’s column in Dealer Magazine reports that the Keystone State is Ground Zero in ChryCo’s campaign to shed stores. “Chrysler has finally pulled the trigger on sending out notices of termination. As of this writing, Chrysler has apparently sent 10 Pennsylvania dealers a notice that their franchises are being terminated. It is unclear why Pennsylvania appears to be the test market for these termination actions. We know from experience that Pennsylvania’s franchise protections are relatively strong compared with many other states. It may be that these dealers are particularly poor performers and thus the easiest termination cases to win.” Mr. Sox gets his Gox box socks on and sets about cleaning ChryCo’s clock (while we play the “Pennsylvania” drinking game). Suffice it to say, “Under federal and state price discrimination laws, the VPA program is illegal in a situation where the dealer MSR is inappropriately inflated such that the dealer can’t qualify for VPA incentive monies.” Or, more prosaically, “There is a strong claim for damages, which should certainly get Chrysler’s attention and give the dealer added leverage in fighting a termination action.”

Dave Niles over at the Ethanol Producer Magazine‘s Talking Stock, I mean Taking Stalks, I mean Taking Stock blog reports an E85 industry milestone: their 200th “commercial scale” production facility. OK, it’s not actually here yet. In fact, the corn-based ethanol industry is in the middle of a huge E85 glut, they’ve lost the PR war on the “food for fuel” debate (where even GM’s FlexFuel ads are talking-up [theoretical] cellulosic supplies), new facilities are on hold and planning permission for future plants faces stiff not to say stifling local opposition. To be fair, Niles does mention one of those dark clouds: “Eight small-scale plants remain offline primarily due to market conditions.”And while we’re blogging stalks, I mean stalking blogs, I mean talking blogs, J.D. Power and Associates Web Intelligence Division’s surveyed some 40m blog posts over the last six months (using the algorithm method). “The topics of ethanol and biofuels generate lower amounts of positive sentiment than other forms of alternative energy.” But that’s OK because “consumers indicate that they are skeptical of marketing efforts by oil companies that promote their efforts to pursue green and renewable energy sources.”

Talk about a sign of the times… Just as GM announces it’s done running Super Bowl ads, Hyundai tells BrandWeek it will be running two 30-second Super Ads for its Genesis Coupe. The announcement comes as Hyundai transitions ad agencies from Goody (which will handle the new Genesis spots) to South Korea’s World Marketing Group. Hyundai has spent $155m this year on measured media advertising, while GM franticly slashes at its $2b ad spend. Last year marked Hyundai’s first Super Bowl ad, an opportunity well spent promoting its landmark Genesis sedan. Yes, well, the Genesis sold only 1,826 units through August. Of course, the product is a major shift for Hyundai’s brand image, and it was launched into the weakest new car market since the last time bankers were jumping off buildings. Regardless, Hyundai marketing boss Joel Ewanick says the Genesis is on track to hit its goal: 8k sales by year’s end. And Hyundai is gaining market share despite down sales. So get used to seeing foreign firms like Hyundai fueling the advertising spectacle that is Super Bowl advertising. Who knows, we may even get to watch Tsingtao and Tsingtao Light throw down in an annual “Tsingtao Bowl” at halftime.

Chrysler dropped the other shoe, pre-bailout PR-wise. It’s officially official: ChryCo’s ironically named ENVI group is creating three new electric vehicles: a Dodge sports car (based on the Lotus Europa), a Chrysler minivan and a Jeep. Chrysler claims the plug-in models will go into production as a “fleet” of 100 vehicles next year. They’ll go on sale to the general public in that most magic of model years 2010. The quick and dirty: the Dodge sports car is electric-only, with Chrysler claiming a range of up to 150 miles. The Jeep and Chrysler minivan have theoretical ranges of a Volt-like 40 miles, with “small” gasoline engines on board to “power the electric-drive system.” This sounds more like a generator to recharge the batteries, rather than an engine to simply power the car once the go-juice runs out. Recharge time for the sports car is claimed to be 4/8 hours, depending on your household voltage. As for the Jeep and minivan, they would also plug-in to recharge the batteries; the ICE is for long drives only. As for the type of batteries, site of production, or most importantly – price – we have no idea. Chrysler, LLC may not have any idea about those either.

Update: Between the Lines Editorial Posted Here

From wings to wingdings, the automotive industry has long been obsessed with adding technology to its products, often simply for the sake of adding new technology to its products. Two such “innovations” are coming down the pipeline from Honda and Audi, the first a camera system to offer a birds-eye view of your vehicle and the second a system which communicates with traffic lights. Automotive News (sub) brings news of the Honda system, which is set to debut o the J-market redesign of the Honda Odyssey minivan. The system would offer a bird’s-eye view of the car to help with parking and visibility in blind corners and intersections. Four wide-angle cameras placed around the vehicle offer the Gran Tourismo-like option of viewing your vehicle in the third person, theoretically making it easier to drive in congested urban environments. Similar technology has already been developed by Nissan. From Audi comes word of a new system known by the annoying “Travolution” moniker, which combines the terms “travel” and “convolution.” According to Automobile magazine, the system communicates with traffic signals and tells drivers how fast they should drive to minimize their time at red lights. After spending two years and 1.2m Euros to develop the system, Audi Audi has produced an A5 and an A6 Avant capable of communicating with three traffic lights in its hometown of Ingolstadt, Germany. That’s 400k Euros per light, in case you’re wondering. Undeterred by such expense, Audi plans on expanding the pilot project to include 20 cars and 50 lights. Automobile sums up its chances of a US debut with snark-laden terseness. “There is no word yet as to when such a system could migrate to the United States, although ‘never’ might be an appropriate guess.” And technology marches on.

We recently reported that the National Automobile Dealers Association (NADA) was sitting-out the bailout begathon in our nation’s capital. Their decision seemed sensible enough; NADA members include all American brands, even those who are doing just fine without a federal loan, thankyouverymuch. Well, we spoke too soon. Automotive News [sub] reports that NADA is back on board for the Potomac shuffle after “automakers had encouraged NADA to support the loans because they would provide broad economic benefits.” The news comes as industry lobbyists make the final push to appropriate funds for the $25b loan program by the end of the month. Meawhile, House Democratic leaders drafted a continuing resolution which commits Dems (in writing) to appropriate the cash by the October 1 deadline. In that missive, we also learn that the total cost of the bailout will be $7.51b, with $10m of that going towards the inevitable “administrative costs.” With NADA now on board, and the Dems making all the right noises, Detroit can nearly be assured of the bailout’s passage. Up next, surviving until the checks arrive, and gearing up for round two.

Dear GM Dealers:

Last week, I sent you a note asking you for your support for the Advanced Technology Vehicles Manufacturing Incentive Program legislation. I wanted to thank you for the response you have shown to date and ask you to continue that effort. I also wanted to let you know about additional developments regarding GM’s liquidity position.

We’ve seen unprecedented upheaval in the global capital markets and GM is responding to ensure its ongoing access to capital to fund operations and the North America turnaround.

First, GM agreed last Friday with an existing institutional holder of its corporate debt to exchange $322 million worth of Series D bonds due to be repaid in June 2009 for 28.3 million newly issued shares of GM common stock. This exchange will save us money on debt repayment and interest expense and reduces the amount of debt currently on our balance sheet, a change likely to be greeted favorably by credit ratings agencies.

Secondly, GM has tapped the remainder of its $3.5 billion in its secured revolving credit facility. This facility has been in place since 2006 and allows GM to borrow funds at an attractive rate.  Given the events in the banking industry in recent weeks, we felt it was most prudent to draw the funds now and have the cash on hand as the need for it arises. A portion of the funds will go toward approximately $750 million of retiring debt and, pending court approval, payments to Delphi in excess of $1.2 billion to aid in its reorganization efforts.

I also wanted to reassure you that the internal liquidity plans announced on July 15 are on track, and these latest actions are consistent with our intention to safeguard GM’s access to cash. We will continue to look to the capital markets and other sources of liquidity as opportunities become available.  The economic outlook remains uncertain, but we are pursuing every avenue to guarantee GM’s ability to fund ongoing operations and to emerge from the recent downturn a stronger and more competitive company.

We appreciate your partnership in this effort and will continue to communicate with you about our activities as circumstances warrant.

Regards,

Mark LaNeve

Vice President

Vehicle Sales, Service and Marketing

Though Automotive News [sub] is better known for their comprehensive industry news coverage than their take-no-prisoners opinion pieces, Editor David Sedgwick doesn’t pull any punches while slamming the Volt in a recent editorial. Sedgwick admits to “a queasy feeling that GM has painted itself into a corner by generating so much hype for a car that is too limited for most consumers,” noting that weaknesses in both price point and capabilities will limit the Volt’s effectiveness in the market. The price point issue is well documented, but the Volt’s performance is what worries Sedgwick the most. In particular, GM’s apparent decision to use the E-Flex’s range-extending motor to simply generate electricity and not to recharge batteries looks to be an extremely limiting factor. “If you can’t plug in your vehicle at night,” argues Sedgwick, “that high-tech battery pack will be as useful as an anchor for your bass boat.” Sedgwick reckons that the forthcoming Cruze should be getting at least as much attention as the Volt. “We’ve been down this road before. GM doesn’t need a halo car. It needs a car — a small car — that can make money. If GM can’t learn to make money on small cars, it won’t survive.” Given a choice, Sedgwick would pick the Cruze, and if GM wants to stay in business it would do well to listen. After all, if a man who lives and breathes cars and is well-compensated enough to consider “your bass boat” a folksy analogy thinks the Volt isn’t worth the money, well… you get the picture.

The Financial Times has some scary ass shit to share re: the American mortgage meltdown. Scribe Nouriel Roubini reckons there will be another wave of bad news, as the so-called “shadow banking system” unravels. (And that’s no Bolero.) We’re talking broker-dealers, hedge funds, private equity groups, structured investment vehicles and conduits, money market funds and non-bank mortgage lenders. These guys face the final stage of collapse: “a run on thousands of highly leveraged hedge funds. After a brief lock-up period, investors in such funds can redeem their investments on a quarterly basis; thus a bank-like run on hedge funds is highly possible. Hundreds of smaller, younger funds that have taken excessive risks with high leverage and are poorly managed may collapse. A massive shake-out of the bloated hedge fund industry is likely in the next two years.” And then… “The private equity bubble led to more than $1,000bn of LBOs [Leveraged Buy Outs] that should never have occurred. The run on these LBOs is slowed by the existence of ‘convenant-lite’ clauses, which do not include traditional default triggers, and ‘payment-in-kind toggles’, which allow borrowers to defer cash interest payments and accrue more debt, but these only delay the eventual refinancing crisis and will make uglier the bankruptcy that will follow. Even the largest LBOs, such as GMAC and Chrysler, are now at risk.” Bottom line for the U.S.: recession. Bottom line for GMAC (and thus GM) and Chrysler? C11.