Well, they would say that, wouldn’t they. I mean, you can’t very well say “no matter what kind of business plan Chrysler and GM present us, we’re not throwing these companies into Chapter 11,” not if you’re trying to appear tough on bailouts and the causes of bailouts. And The Detroit News is talking about politics, which is all about appearances.

“We’re going to need a restructuring of these companies. How that restructuring comes about is going to have to be determined,” said David Axelrod, a senior adviser to President Obama, said on NBC’s “Meet the Press.”

Axelrod’s comments came in response to questions about a Wall Street Journal report on Saturday that GM will offer two options when it files its federal restructuring plan on Tuesday: A continued infusion of federal aid to keep the company in business, or a government-financed bankruptcy . . .

“We need an auto industry in this country,” Axelrod said Sunday. “We have an interest in seeing the auto industry survive. But it’s going to take a real restructuring.”

Back when TTAC spied with our little editorial eye GM’s slide into bankruptcy, we never imagined that it would be such a convoluted process. On one hand, GM’s slow-mo train wreck has provided plenty of grist for our mill. On the other, there’s only so much Firesign Theater a carmudgeon can take before he or she wants to play the Eagles “How Long” at top volume and be done with it. Still, ours is to question why. So why are reporters covering the GM bondholders debt for equity swap—or lack thereof—resorting to double negatives? “General Motors Corp. bondholders are working with the automaker to craft a debt exchange that discourages investors from not participating, according to a person with direct knowledge of the discussions.” I’m gonna take a flyer here: is that the same as forcing them to participate? So what stick has Bloomberg unearthed/used to suggest common sense?

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Shame on us that we’ve overlooked a startling statement made by Crisis LLC’s Prez. In a speech last Thursday at the Economic Club of Chicago, Jim Press basically said that anyone who expects more than 10m SAAR (annual selling rate) anytime soon is on drugs. Instead of getting better, it might get worse,

“It would be a mistake to assume that this ‘10 million market’ is an aberration. Instead, we need to accept and come to grips with it,” Jim Press said. Coming to grips with it means that it will be a 10m market for – gasp – at least for four years. In January, the annual sales rate (SAAR) was just under 10m units. Press is preparing the world for worse: “I’ve told our dealers that one day we may even look back on January of 2009 as the “good old days!”

Then, a second moment of startling truth…
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Ford’s Volvo has been on the block–excuse us, “strategic review”–for a while now, both unofficially and officially. So far, the flirtations with possible suitors resembled dating tours to the Philippines or Russia. A little petting, and then nothing. Now, finally, there are indications that the dalliances may enter the terminal phase: Either Ford gets a signature from a willing buyer or Volvo will be terminated. Extra urgency has no doubt been lent by the Swedish government which told GM (and by implication, Ford) not to expect a single öre, and to get on with it, or get out.

The Swedish paper Dagens Industri yesterday carried a report that there are four serious suitors for Volvo: China’s Changan, China’s Dongfeng, and–surprise–France’s Renault. As the dark horse, there is an ominously unidentified suitor. For those who have a problem understanding Swedish, Bloomberg carries a pretty good summation of Dagens Industri’s report. Ford and Volvo met with their investment bankers in London this past week, and the candidates were deemed “serious” enough to be allowed to see confidential information about future Volvo Cars models, says Dagens Industri.
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If you recall, President Bush gave GM some money ($9.4b) and told them to come back later for more ($4b). The second tranche (as gourmands would say) depending on sorting out the United Auto Workers (UAW), convincing bondholders to swap debt for equity and rationalizing their brand portfolio. Anybody familiar with the UAW, rapacious capitalists (are there any other kind?) and General Motors knew that the chances of ANY of that happening were somewhere between none and the situation going in reverse. And so it hasn’t come to pass. After we learned that GM bondholders aren’t playing ball, Automotive News reports that the UAW has walked away from the ballpark. It seems the union isn’t happy with GM’s insistence that the union accept stock in lieu of cash for the GM-funded Mother of All Health Care Funds (a.k.a. VEBA). Did I say GM-funded? We’re on the hook now. Anyway, why would the UAW step up to the plate? The union would have to accept the idea that GM has a future when they, of all people, know it doesn’t.

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Stefanie Wolter’s wrecking yard is one of the largest in the northern part of Hesse, Germany. On an average day, they used to receive one or two cars to be euthanized. Now, suddenly, it’s ten. Clunkers are lining up, and the yard can’t kill them as fast as they come in. It’s a common sight in Germany. Wrecking yards are getting crushed under the load of cars to be crushed, Automobilwoche [sub] reports.

The attack of the aging automobiles is caused by the Abwrackprämie (cash for clunkers program) paid for by the German government. Since January 14^th, 2009, owners of cars nine years or older can collect €2.5K if they put the pile of rust out of its misery, and buy a new one.

In the beginning, the program was ridiculed. It’s not going to work, said many, owners of clunkers won’t buy new. The Green Party said it’s “a joke.” Quickly, the mood changed.
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A mainstream carmaker has no business building niche products. Literally. For one thing, they’re hardly ever profitable. For another, even when they are, their profits are relatively insignificant. And most importantly, “halo cars” are four-wheeled glass and steel versions of Dumbo’s magic feather. They lead manufacturers to mistake cause with effect: if we build this, we must be good. In fact, any automaker that focuses its creative, financial and corporate resources on a halo car risks forgetting how to do what it did to get those resources in the first place– and an eventual plummet towards the circus floor. The Chevrolet Corvette may be only one of GM’s magic feathers, but it’s the most famous and, therefore, visible. GM should kill it, STAT.

Car analyst Erich Merkle was a cheery guy. A few days ago, as reported by mlive, he still believed Ford will thrive and GM will survive with government help. He had his doubts about Crisis LLC, but who hasn’t.

Now suddenly, Merkle joins the ranks of those who gather their maps to plot a path for the hills. The main problem of the car industry is that there aren’t enough buyers. There are less by the day. People are losing jobs. With more on the dole, there will fewer in the showrooms. “I’m concerned about the job losses. The acceleration is pretty alarming, and that has to stabilize,” Merkle said to Reuters.

“If we don’t beat the second half of 2008 this year, then it could be all over,” said Merkle. “We’re all going to be peeling bark off trees and go back to being an agrarian society.”

An 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. WAS is being filed from Beijing until further notice.

Sweden to GM: “Take a hike”: GM is asking Sweden to guarantee $600 million in European Investment Bank loans to keep the Saab Automobile unit operating until it can be restructured. All they got from Sweden was a firm nej, inte alls. (Forgetaboutit.) Sweden’s Premier, Fredrik Reinfeldt, said that “GM has to bear the responsibility,” Automobilwoche [sub] reports. Some insiders see the mounting unwillingness of foreign governments to help US automakers as a backlash against the “buy American” campaign. Non-,conspiracy-bound observers point out that the Swedish government is hoping that both GM and Ford will be successful in unloading their respective Swedish brands. Sweden wants to add extra incentive to move fast by removing any additional life support.

Chery / Volvo still in play: Usually, on the second day after a dalliance between a Chinese manufacturer and a Detroit brand is floated, a denial follows like clockwork. Instead, Chery-owned Gasgoo today runs a new story reiterating a possible bid by China’s Chery for Volvo, a brand which Ford is desperately seeking to unload. The story itself provides no new insight, but the added traffic is relevant from a SIGINT perspective.

It’s a crimson-red bloodbath: More than 460, or nearly 30 percent of publicly traded Japanese companies, are expected to report group net losses in the year ending March 31, the Nikkei [sub] reports. The bloodletting is especially severe in the automobile sector, where profits through the third quarter have been wiped out by bigger and bigger losses in the last quarter of fiscal 2008.
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Oh, for Christ’s sake. Seriously. I’m a good Jewish boy, but so was Jesus (his mother thought he was God, he went into his father’s business, etc.) and he left some sage advice for auto industry suppliers looking to suckle on Uncle Sam’s bounteous breasts. And no, I’m not talking about neither a borrower or a lender be (bombus terrestris). ‘Cause Shakespeare said that. I speak (spake?) here of “Take heed, and beware of covetousness: for a man’s life consisteth not in the abundance of the things which he possesseth.” In other words, just because General Messup and the Crisis Corporation scored $13.4 billion in federal no to low-interest loans (excluding DOE boondogglage) is no reason to ask for $18.5 billion for your troubles. Although Automotive News [sub] says, “The loans will help suppliers survive until production rebounds,” it behooves these suppliers to admit that it will be many a moon before any bounding becomes re. As JC said, “do not worry about tomorrow, for tomorrow will worry about itself. Each day has enough trouble of its own.”

Every now and then the mainstream automotive press gets its inner TTAC on. Normally, those moments are reserved for vehicles that A) don’t advertise very heavily and B) don’t advertise very heavily. To be fair, the Nissan GT-R doesn’t advertise very heavily. So it’s fair game for USA Today carmudgeon James Healey. You may recall Healey’s previous work, in which the scribe often sounds like he’s holding a conversation with a PR flack– with Healey playing both critic and spinmeister. (Except when he actually quotes the manufacturer’s rep.) In this case, we get less prevarication, more kvetching. 

But, c’mon, for a starting price of about $77,000, shouldn’t the power-window switches and the inside door handles be easy to reach? Shouldn’t the high-falutin’ dual-clutch transmission engage more gently than a whack in the back by a Caterpillar D9? Or the shift lever move toward the words “manual” and “automatic” to choose your mode instead of going one way only? Shouldn’t the outside door handles be easier to grab and yank?

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Panamera S: $92,660 / CA$115,100
Panamera 4S: $96,846 / CA$120,300
Panamera Turbo: $124,781 / CA$155,000

Now how much would you pay?

Renault’s low cost, made-in-Romania Dacia brand can’t believe its luck. In Germany, orders are upsixfold says the Financial Times Deutschland. Due to demand stoked by the Euro 2,500.00 clunker car program, sales have taken off for low-cost cars. The newish, normal-looking Dacia Sandero usually sells around 80 units per week. Suddenly, they’re moving 1k. Unfortunately, Dacia lowered production at its Romanian plant weeks ago, in expectation of collapsing Russian and Eastern-European markets. The cars are so sold out—to the point where Dacia is buying cars off the Russian market to satisfy German demand. Dealers are rubbing hands and hiring helpers: a German dealer has students serving coffee to customers waiting in line to order cars.

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