Thanks to soaring gasoline prices and the ongoing recession, motorists traveled 100b fewer miles in fiscal 2008. Transportation officials seized upon these facts to argue that the gas tax is unsustainable and that the country must quickly shift to tolling to save the highway trust fund. “As driving decreases and vehicle fuel efficiency continues to improve, the long term viability of the Highway Trust Fund grows weaker,” Transportation Secretary Mary Peters said in a December 12 statement. “The fact that the trend persists even as gas prices are dropping confirms that America’s travel habits are fundamentally changing. The way we finance America’s transportation network must also change to address this new reality, because banking on the gas tax is no longer a sustainable option.” Turns out it was an argument built on sand…

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A short overview of what happened in other parts of the world while you were in bed. TTAC provides round-the-clock coverage of everything that has wheels. Or has its wheels coming off. For the next two weeks, WAS will be filed from Tokyo.

Toyota doesn’t just sit there. They do something: Toyota is facing its first full-year loss ever, $1.68b for the whole fiscal 2008. Never mind that this is approximately the cash GM burns through in a bad month. For Toyota, it is a huge embarrassment. Toyota will do immediately what GM ignored: Embark on drastic production changes. “The speed, breadth and depth of the global economic downturn is beyond what we had imagined,” says Toyota President Katsuaki Watanabe. Their measures will be likewise drastic. Toyota aims to revamp its operations so that it can turn a profit even if parent-only sales fall by 17% from 2007 results. All new production upgrades, including the opening of a plant in the U.S. state of Mississippi scheduled for 2010, will be postponed or scaled down. Capital spending planned for fiscal 2009 will be cut 30 percent to less than 1 trillion yen. For starters. By the way, directors will forgo their bonuses this fiscal year.

Nissan likewise: Nissan is reevaluating its plans for new factories and may postpone construction or scale back the size of some of them, Chief Operating Officer Toshiyuki Shiga said to The Nikkei (sub.) Nissan had plans to build a new factory in Russia in 2009 and new plants in India, Morocco and China in 2010. In addition, its subsidiary Nissan Shatai Co. had plans to build a new car body assembly plant next year in Kyushu. All of these plans are under review.

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Well, someone had to do it. Automotive News [sub] reports that the Fed will use its $200b Term Asset-Backed Securities Loan Facility to provide new-car dealers floorplan loans. It’s been understood since its November 25th spawning that TALF would “secure” auto loans, but a Fed FAQ released today reveals that “for TALF purposes, auto loans include retail loans and leases relating to cars, light trucks, or motorcycles and auto dealer floorplan loans.” In news that won’t thrill the small-town dealerships, the minimum TALF loan size is $10m with a three year maturity. Sorry, credit card debt is not eligible. Suzuki Motor Company announced that it would discontinue floorplan financing precisely (if you believe Automotive News [sub]) four minutes after the announcement. Coincidence?

Greetings from Pennsylvania! That’s right, I’ve left the warm (enough) confines of Southern California and journeyed east to meet the fiancee’s parents. It’s going fantastic, thanks for asking. Only thing is, they aren’t exactly what I’d call “car people.” Well, my future father in law’s OK enough. 2002 Jetta with a stick. Not a GLI with the VR6 but salty. Decent. Respectable. Her stepmother, however… Picture it: downtown Philadelphia, six people in the car. Me at the wheel because, “You drive cars (hic) for a living — you drive!” And after half a mile everyone starts noticing how poorly the car is riding. “These old streets are lousy in the winter.” Then it gets worse. “Well,” I say, “The Chevy Venture is one of the reasons why GM is circling the drain.” And when I park — yup — it’s a flat tire. And it’s 26 degrees out. And windy. And it takes 20 minutes to get the jack unstuck. So now there’s a mini-spare donut on the right front corner and the dash reads “AWD Disable.” But, we make it back, no sweat. The next morning (today!) we need to be in Quakertown and it’s 14 degrees and icy and the one tire shop has a “two hour plus” wait. We need to go, so we schlep 40 frosty miles in a hobbled minivan on one pretty alright tire. We live, but not my finest automotive hour. You?

The production version of the new Opel Meriva will keep the concept’s suicide doors, say Carscoop. Nope, no stylish, efficient people movers in the GM stable. Keep moving people. Nothing to see here.

Canadian Prime Minister Stephen Harper drafted former Molsons boss Jim Arnett less than three weeks ago to advise on auto industry policy. Now that Canada has commited $4b Canadian ($3.25b American) to Chrysler and GM, Arnett has resigned his position. The Star reports that “the Conservative government never really saw eye-to-eye with Arnett on what needed to be done,” but that Arnett will continue to advise the Ontario provincial government. Arnett, who advised the government on the 2004-2006 steel industry restructuring, was not available to comment on why he quit. Sources say Arnett “couldn’t reach the appropriate terms of reference” with the federal government. If we had to guess why Arnett might have left, we’d say it probably has something to do with Harper’s seemingly boundless enthusiasm for handing taxpayer money to Detroit. “I will not fool you. There is obviously money at risk here and there may be, well, more money as we go forward,” Harper told reporters when the Canadian bailout plan was announced.

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?

Credit is at the heart of the current auto crisis, a fact agreed to by all sides of the debate. But while the pro-bailout crowd wails about needing a 700 FICO score to get a car loan, the fact of the matter is that cheap credit allowed Detroit to create this problem in the first place. Mother Jones correctly points out that Detroit has been redlining the American auto market for years, by finding the easiest profits possible. And no, they’re not talking about SUVs. The thesis is that with car pricing easily available online, dealerships relied on financing offers to lure consumers into the store. Loans were loaded with extras, interest rates would be bumped for kickbacks, and upside-down trade-ins were rolled into the new loan which often stretched to six or seven year terms. These tactics, which MJ calls “endemic,” have left a US market where 85 percent of Americans with a car loan have negative equity. On average upside-down Americans owe $4,400 more than their car is worth. And all the while congress has played right along, from including a provision in the 2005 bankruptcy “reform” which forces filers to repay the entirety of a car loan, even if they owed substantially more than their car was worth, to engaging in fraud themselves. Now, as Rosemary Shahan of Consumers for Auto Reliability and Safety puts it “no matter how much money Congress throws at the automakers, it’s car buyers who will rescue them or not.” With 85 percent of American car owners looking at an average of $4,400 negative equity on their vehicles, Mother Jones is absolutely correct in assuming that the $17.4b bailout band-aid won’t bring back the business Detroit needs. Which proves that even when their main product was financing, the Detroit Three still just couldn’t get it right.

Last Friday was a good news day for Detroit. No, I’m not talking about President Bush’s loan package. That wasn’t so much good news as a stay of execution, with a case on appeal. And it wasn’t shadenfreude. What joy can anyone in the auto biz take from the reports that previously invincible Honda is losing money and cutting production? Or that Prius sales are down 50 percent, Toyota has suspended work on their proposed Prius plant in Mississippi, and the company will have a loss this fiscal year, the first in 71 years? No, the good news came, from all places, The Michigan legislature.

Autoblog Green has picked up a press release from Alcoa, which reveals that the aluminum giant has secured the wheel contract for the Chevy Volt project. And though we could justifiably complain that this is literally putting the wheels before the horse (we still have no official confirmation of the battery contract status) there’s even more to dislike about this move. Obviously the Volt has to justify its sky-high MSRP on its green credentials (given that GM’s green credentials are riding on this single program), but choosing Alcoa as a wheel supplier further degrades the program’s green cred. Alcoa was recently named number 15 on Political Economy Research Institute’s (PERI) Toxic 100 of 2008 for releasing 13.11 million pounds of toxic air this year. The firm has run afoul of the Environmental Protection Agency several times for violations of the Clean Air Act and creating at least one groundwater superfund site. But hey, Alcoa’s wheels are about 20 percent lighter and twice as strong as other cast aluminum wheels. So whatevs, right? Then again, we are talking about a firm that trumpets paint burning as an environmentally friendly move.

When Chrysler stuck its nose in the bailout trough, the ailng American automaker’s executives  had to wonder what the Hell anyone within the company could possibly tell lawmakers/money givers about Chrysler’s viability. Except, you know, the fact that they don’t have any. But never underestimate the power of positive PR or, as we call it around here, bullshit. To wit: former ToMoCo Prez and current ChryCo co-Prez Jim Press’ comments to Automotive News [sub, AN]  last week. “He suggested that Chrysler could show the way to a sustainable model for a smaller U.S. auto industry. ‘If there’s one company in America that can build high-craftsmanship, innovative vehicles, it’s Chrysler,’ Press said.” Hey, is Jimbo saying American can’t build high-craftsmanship, innovative vehicles? Anyway, down ye olde rabbit hole we go…

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Don’t worry. The economy won’t hurt you. It just wants you to have some fun. To prove it, the price of gas continues to fall, now averaging $1.66/gallon according to USA Today. Officially, the last time prices were this low was in 2004, and prices are still dropping after hitting an all-time high this June at $4.11/gallon. The government’s weekly gas and fuel price update shows prices are at their lowest in the Gulf Coast and Rocky Mountain regions. Diesel prices are falling as well, hitting a national average of $2.42/gallon. Help keep downward pressure on fuel prices by finding the lowest local prices (with help from your federal government) here. And if you’ve got a dime you can listen to your V8 tonight. Freaky!

CNW Research’s of Brandon, Ore, is in the business of tracking “consumer confidence, new-used floor traffic, manufacturer and dealer incentives, and used vehicle sales by channel.” In their daily work, they stumbled across a disturbing trend. As every grizzled veteran of this industry remembers, when the economy is down, used cars do well, because folks can’t afford new ones. People hold on to their ride much longer, which lowers the supply of used cars. Fewer new car sales mean fewer trade-ins, which lowers the supply of used cars. Or so the wisdom of the grizzled veteran goes. This time, it’s different. Sales of used cars fell 20.7 percent in November, compared with the period a year earlier. That’s still benign compared to the 37 percent hit the new cars took. But it disturbs the veterans nonetheless.

CNW expects 2008 to come in 36.6m units sold, down 11.5 percent from 2007. That would mark the lowest levels since the 1982 recession. Whoa: November new car sales also were the lowest since 1982. Are people tired of cars, whether old or new? Have we just been catapulted back to the bad early Reagan years?

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The Australian federal government has hopped on the auto bailout bandwagon, “investing” $149m in production of a Holden-badged GM compact car. The South Australia state government will kick in $30m as well, as the Delta-platformed Cruze-alike will be produced near Adelaide. Styling and engineering will be carried out in Melbourne. And what do the Australian people get for their representatives’ fiscal abandon? According to Adelaide Now, the project will “support” 600 GM jobs and 600 supplier jobs, but it seems that these will likely not be new hires. Money for the project comes from Australia’s “Green Car Innovation Fund,” and its use is being justified by the possibility of ethanol, LPG and CNG powertrains at some indeterminate point in the future. “We recognise the needs and desires of motorists are evolving with growing concern around environmental factors and shifting consumer sentiment,” says Holden Chairman Mark Reuss. “Such evolution calls for an innovative approach… (and) the new vehicle will cater for growing demand for smaller cars focussed on economy.” when all is said and done though, the environmental issues are simply a greenwash for Australia to prop up weakening production and subsidize a “domestic” Corolla competitor. Sound familiar? The irony is that the GM doesn’t especially need a bespoke version of its global Cruze for Australia, although it will be required to match the government’s $149m outlay.

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Egan-Jones Ratings is a relatively obscure little outfit out of Haverford, PA. It’s one of those companies whose website doesn’t have a flashy design or, for that matter, a phone number (just a contact form). Forbes rates them number 1 on their list of eight financial mavens (not ten!) “who saw the crisis coming.” “A vocal critic of rivals Moody’s, Fitch, and Standard & Poor’s, Egan has a track record of warning investors about poor credit quality long before the Big Three ratings agencies. Most recently he said to shun subprime-mortgage-backed bonds even while the other agencies said these were investment-grade credits.” And now Sean has a few words on Ford, via a ginormous Fordetorial in Bloomberg. ““It’s unrealistic of Alan [Mulally] to expect Ford to survive, let alone profit, when they’re experiencing a 30-plus percent decline in sales. Without a bankruptcy filing and a complete reorganization, Ford is not going to be profitable, period.” Egan ain’t kidding. His company rates Ford’s debt a D, its lowest level. And if that’s not enough blowback for Mulally-loving Fordophiles, here’s some more…

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