The viability plans presented by Chrysler and GM to the U.S. Treasury and the public yesterday signaled the end game. The plans amount to nothing more than begging for enough cash to stay afloat until the market turns upwards. Not only are the automakers’ arguments based on flawed assumptions about the U.S. car market, but they singularly fail to address the fundamental problems that brought Chrysler and GM to their knees. The fact that anyone would take these pleas seriously indicates the simple triumph of fear and over common sense. You’d have to be willfully ignorant not to see these plans as the worst kind of cheap fiction. Well, maybe not so cheap…

After watching my local news tonight (and stay tuned for Seinfeld, next, on Fox 5), and the 6^th-grade bailout coverage, I’m eager to hear what the mainstream media will say about the bailout plans tomorrow. During GM’s press conference, one intrepid reporter asked “How long will $4 billion last?” and the response was Fritz Henderson having a Coke and a Smile. The bailout itself has taken on such epic persona that it’s tough for the mainstreamers to capture. But it will be difficult, still, for them to understand the intricacies of the hogwash from Chrysler and GM’s reports. I mean, they’re so full of BS that I could do an entire between-the-lines editorial made up of 800 single-word sentences.

To those of you that read this before the morning portion of the 24-Hour Bemuse Cycle: What are they going to botch and how?

To those reading this after it’s covered by the big 3 cable news companies (CoNN; the media wing of the Conservative Party—known as FoxNews; and the alliance of Seattle-Boston-Chicago-New York-Ithaca-Burlington newsies (also known as MSNBC)), what did they say that you found flagrantly offensive and factually incorrect?

I once attended a seminar on alien abduction hypnotherapy. When we got to the Q&A bit, I was flabbergasted by the audience’s enquiries. “What do you do if the alien has been in contact with a departed spirit who knew the victim, and used their influence to prevent hypnosis?” “I’d hypnotize the spirit first,” the therapist responded, without batting an eye. Suddenly, I felt very, very alone. Surely, I wasn’t the only person amongst hundreds who thought the whole thing was a patently ridiculous scam. I got that same queasy feeling today, watching my so-called colleagues questioning GM CEO Rick Wagoner about the company’s viability plan. Surely someone would point out that the whole thing is nothing but a patently ridiculous scam. Sigh. Right, let’s get to it then…

The Detroit Free Press is reporting that the United Auto Workers have reached a “tentative” agreement to modify its 2007 employment contract. But wait! “The UAW is withholding the terms of the tentative understanding pending completion of the VEBA discussions and ratification of the agreements,” says UAW boss Ron Gettelfinger. But give them the money anyway, is the clear subtext. Or, as the Freep puts it “the announcement by the UAW on Tuesday shows that the union and the companies are making significant progress.” When asked by the Freep, GM’s Rick Wagoner couldn’t even give a number just now. Wagoner claims that they went into talks with “ambitious” plans. And now there are now details. But everything’s peachy! GM’s take (from the viability plan): “As of February 17, the Company and the UAW have made significant progress on costs/work rules, which represent major steps in narrowing the 8 competitive gap. However, these revisions do not achieve all of the labor cost savings comprehended in the Company‘s financial projections.”

Full report now available at GM Media (pdf) (summary html).

Automotive News [sub] is reporting that GM’s new viability plan includes a request for an additional $22.5B in government funds. Without this money GM would run out of operating cash by sometime March. GM’s plan also calls for cutting 47,000 jobs globally by the end of 2009 and shuttering five unspecified US factories by 2012. GM CEO Rick Wagoner just thanked government officials “around the world” for “their openness.”

As Farago noted earlier, GM received tranche deux of its already-approved $13.4B loan today. They also request $4.6B per their December 2 request to round it all out to an even $18B. There’s also a request for $4.5B to pay of a revolving credit line that comes due in the fall of 2011. And then there’s the request for a $7.5B line of credit GM could tap “if” sales worsen over the next two years. This would bring GM’s taxpayer butcher’s bill to about $30B dollars. Incredibly, GM expects to begin repaying these loans by 2012.

GM also predicts that its North American operations will break even at an annual market rate of 11.5m to 12m units. Interesting. “The operating and balance sheet improvements outlined in GM’s viability plan are forecasted to result in a significant enterprise value and positive net present value, positive adjusted EBIT in 2010 and positive operating cash flow for its North American operations in the same year.”

Chrysler has just released its 177-page “Viability Plan.” It will no doubt take plenty of time to go through (and this, of course, was unintentional on Chrysler’s part). In the interim, some highlights:

—Chrysler wants $5 billion by the end of March for “working capital and other operating expenses.” This would mean a total bailout purse of $9 billion, an increase over the $7 billion requested in December.

—The theme is “pay us now or it’s going to cost you more money than you can possibly imagine— or print.” This sounds suspiciously like like some word I learned once. Axtortion? No. Extourtan? What was it?

—There’s plenty of bankruptcy and liquidation analysis, projecting what the costs would be if they went bust.

—The “Stand Alone” business plan includes a $600 million profit in 2010, followed by a loss of the same amount in 2011, then another loss of $600 million in 2012, then a break-even year in 2013, followed by a projected $1B in profits in 2014.

—24 product launches in 48 months. I can only assume they are counting different paint colors as individual product launches.

—Fiat could, in theory, take another 20% stake of Chrysler for a majority share of 55%.

—“No American taxpayer money would go to Fiat.” Semantics.

The following institutional investors bought into Cerberus Institutional Partners IV (CIP4). That’s the $1b – $1.5b Cerberus-controlled fund established to provide part of the initial $7.2b payment to Daimler for Chrysler. Obviously, this list is far from complete. We call on our elected representatives to require Cerberus to provide a full and complete accounting of all participants in this fund before U.S. taxpayers extend Chrysler any more federal loans.

LA Police & Fire Pension

Public teachers of PA (PSERB) – $200m  

PA state retirement workers [SERS] – $75m

NY Common Retirement Fund – $50m

Charles Schwab Institutional 

Univ of CA – $40m

Univ of Tex – $25m

Idaho state employees – $40m  

Allstate

Glenmede Trust Co. (PA)

Franklin Templeton Investments

[thanks to Full Deck Analytics for the help]

Audi has become the top premium brand in the European market, according to Auto Motor und Sport, selling 45,124 vehicles last year. This is no small achievement, as competition among Germany’s premium brands is fierce. Mercedes was the second best-selling premium brand in the market with 39,748 sales and BMW fell to third with 36,832 units sold. Only a year ago, Audi was in 3rd place with 3.9 percent of the market; now it boasts 5.1 percent. In the same period, BMW and Merc market share dropped by less than half of one percent. Audi marketing maven Peter Schwarzenbauer credits Audi’s young vehicle lineup, telling AM und S that new models like the A4 Allroad (above) would keep sales momentum moving.

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It’s been a while since we’ve been graced with a good emotionally-charged argument for a “moral obligation” to bail Detroit out. These canards were a dime a dozen during the initial bailout push, as every Michigan-based opinion writer spilled ink by the barrel describing the myriad ways in which America owed Detroit big time. From winning WWII to spearheading racial tolerance. From fighting for the rights of the proletariat to exercises in moral relativism. It seemed that Detroit backers had leveraged every possible emotionally-charged issue to clear the way to the federal teat. But just when we thought that the flow of intellectually dishonest bailout blackmail had slowed to a trickle, we found one of the best examples yet.

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Via Motorauthority come these first official images of Mercedes’ 2010 E-Class Coupe. Daimler claims a frontal Cd of .24 for its CLK replacement, “a figure that is comparable with cars like the Toyota Prius and upcoming Chevrolet Volt.” And as much as the romantic in me wants to believe that solid aerodynamics lend an innate beauty to a vehicle’s design, the three vehicles mentioned seem to make the opposite argument. What say you?

We’ve pointed it out before: the ethanol industry has a cunning plan to breach the “blend wall” (a.k.a. the fact that American customers don’t want E85). While they’re waiting, hoping and praying for a Titanoboa cerrejonensi-sized gas price spike, they’re planning on using their political leverage to “offer” (i.e., force) motorists E20 and E30 ethanol blends. The big problem: it’s not entirely clear that engines like to run on those blends. (E85-compatible vehicles are, uh, E85-compatible). In fact, it’s pretty clear they don’t. But that’s not going to stop the lobby from trying . . .

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I hopped in my Boxster and headed to the Lexus dealer yesterday. We’d agreed on a price for their ’08 2k mile IS-F. Only a single hurdle remained: Mrs. Farago. Sam thinks I’m nuts to swap a Porsche anything for a Lexus anything. There was only one way to convince my live-in lead-footed badge snob that the IS-F is the right kinda wrong: a test drive. Sam couldn’t get out of the house. Hakuna mutata. I’ll just swing by the dealer, pick-up the car, drive it back home, let her drive it, drive it back, pay my deposit and tidy-up the details. I called the salesman to give him a quick heads-up. [NB: the same salesman who was pressuring me to get the deal done by President’s Day for HIS convenience.] Nope. No can do. He was slammed. Huh? Just throw me the keys. After all, they’d lent me the über-LS. Sorry. Tomorrow or Wednesday. [Insert silence while I waited for his offer to bring the car by the house.] OK. How about . . . never? Over and out. I know this will strike a chord with many of you. I’ve heard plenty of stories where car dealers pissed on pistonheads, operating from the mistaken belief that THEY’RE doing YOU a favor selling you a car. And that’s another reason automakers and their dealers should be “allowed” to go out of business. If there’s no downside for someone selling cars, there’s no upside for the people who buy them. It’s as simple as that.

Our deadbeat automakers will turn in their viability plans today, but, according to a number of reports, these plans (like their predecessors) will be short on workable details. Which helps explain why GM and Chrysler will be turning in their plans after the close of the markets today. The Treasury will receive the “plans” electronically at 4 p.m. today, but a public press conference won’t happen until 5:30 p.m. Which is probably for the better. GM’s stock price has dropped by double digits today, despite reports that their second tranche of bailout cash has already been approved. But having “scored a trillion dollars” as Bowie puts it, there’s still plenty of panic in Detroit.

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