I apologize. The pictures of this beautiful Manta are crap. I let myself get carried away. Hanging around with that pugnacious little Fiat 850 infected me with a burning desire to catch an Opel: Chrysler-Fiat-Opel, the new Holy Trinity. Part of me knew better; I had enough on my plate already. And I haven’t seen an Opel in Eugene in ages. But my desire was downright Napoleonic. As is the result.
Credit Default Swaps (CDS) are a fairly complicated financial instrument. The bottom line: a significant number of GM debt holders stand to make more money if GM defaults and enters Chapter 11 than if it doesn’t. “According to the Depository Trust & Clearing Corporation, investors hold $34bn in CDS on GM,” the Financial Times reports. “Once off-setting positions are considered, the DTCC estimates CDS holders would make a net profit of $2.4bn if GM were to default.” That’s net profit. Reuters puts the total pay off at $4 billion. But don’t worry about the CDS payees; the Bank of America says “any payments are unlikely to cause widespread losses.” Easy for them to to say. The feds gave the Bank of America a $20 billion bailout in January and $118 billion worth of guarantees against bad assets. Anyway, CDS are not THE reason why GM’s debt holders won’t agree to restructure the ailing American automaker outside of bankruptcy. Some may actually believe that a liquidation offers a better chance of recouping their money. But CDS are not exactly at the bottom of the causation pile, either. Especially as the Treasury’s out-of-court debt-for-equity offer requires a 90 percent conversion rate. Say goodnight, Dick.
In California, weary road warriors who need a place to temporarily rest have few options if they’re traveling outside the reaches of its sprawling cities. The drive between the capital and L.A. is especially dreary: miles and miles of industrial farms, oleander and eucalyptus trees. Worse, rest stops are barely-maintained, glorified pit toilets. You’ll never forget the stench of an I-5 rest stop toilet hut.
Chris writes:
Hi, Sajeev. I’ve got a Piston Slap question for you. I have a 2003 Jetta with a 1.8 L turbo engine. Recently, the water pump failed (at about 68k miles). My imminently competent and trustworthy local independent garage replaced the water pump and told me that they heard a tapping sound coming from the engine. They changed the oil and the sound seems to have gone away, but I was advised by them to trade the car in right away if the sound comes back. Do you have any intelligence on 1.8T VW’s and what their longevity is after overheating?
Folks, we’re well into headless chicken territory here, as GM slides towards an end-of-the-month bankruptcy filing, pretending that it has clue one what to do next. Automotive News [sub] reports the latest End of Days delusion. GM’s circulating a “plan” amongst its legislative sponsors announcing its intention to sell 17,335 Chinese made somethingorothers in the US by 2011, and triple that number (51,546) by 2014. “The gains would come,” the document says, “as GM’s total US sales surge 50 percent in the next five years.” From current levels? Bullshit. Also, batshit. Why would GM seek to antagonize the United Auto Workers with all this import folderol? Surely the GM that I know and love would want to tell the world that the new GM will be an all-American carmaker, building American cars in American factories with American labor for American consumers taking full advantage of American subsidies and American incentives, with a warranty backed by the American government. Even—no, especially—as it’s not true.
Automotive News [sub] reports that Vice Chairman of Global Product Development, Bob Lutz, has cashed in his GM chips, selling all his remaining shares in his bankruptcy-bound employer. The ex-Car Czar dumped 81,360 GM shares, slipping $130,989 into his pocket. The sale follows Lutz’s recent filing in Chrysler’s bankruptcy case: an effort to settle an unspecified, but most likely, pay-related claim. Meanwhile, “According to the [SEC] filings, the five other executives who sold all of their GM stock holdings were: Lutz’s successor, Thomas Stephens; GM North America President, Troy Clarke; Chief Information Officer, Ralph Szygenda; manufacturing chief, Gary Cowger; and head of European operations, Carl-Peter Forster.” Apparently, insider trading laws had prevented this mass display of confidence in GM previously. But a “trading window” opened on Monday that allowed the transaction without any legal repercussions. Morally, well, that’s a different story. Bottom line: GM C11 by June 1.
Last Wednesday, Lee Engineering presented a detailed report to the Red Light Camera Citizen Advisory Committee which had formed in compliance with a 2007 law designed to force officials to think twice before rushing to activate cameras during a budget crunch. The study suggested that engineering improvements might even make cameras unnecessary at those two locations. “Based on crash and violation data,” the study stated, “the report identifies only two approaches that would warrant consideration of photo enforcement in the event that implementation of physical and signal timing changes are unsuccessful at reducing red light running.”
I have a 1983 full-sized A-Team van. OK, it’s a Dodge model, not the black GMC of TV fame. But still. If you’re gonna own a repo, it’s awesome when you’re in the mood. Playing card table. Custom fridge. Plenty of classic interior fur. 1980s glazed silver with the custom striping. Happily (and sadly) I haven’t used it yet. So it stays put. Vans like this are public enemy #1 these days, as they suck gas like twenty-seven 1973 vans. In theory. (Remember: it’s parked.) Oh, and my ’83 Dodge stops me from buying a new, cleaner vehicle from new GM or new Chrysler. And so the government will offer me something like $4500 for my ancient, arthritic van. Apparently that kind of cash for this kind of clunker is a fine idea if you’re a politician using other people’s money (the living and the unborn) to curtail American oil imports and save the planet. As a guy on the sharp end, I’m not feeling it. Not that anyone asked me, but here’s what I would do instead. For a LOT less.
METRO VOLKSWAGEN
2035 W. AIRPORT FRWY.
IRVING, TEXAS 75062
800-897-8646
www.metrovwtx.com
PICK YOUR OFFER OR DO BOTH!!
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1. Bring in your best offer from any dealer in the State of Texas and we’ll beat it by $600.00.*
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Plus give them a great deal!
Come to Metro VW we’ve got the friendliest staff and the greatest deals!!
* Best offer must be a written offer to purchase and signed by other dealer.
** Referral fee paid only if referral information is given prior to the car deal beginning.
Offer expires May 30, 2009
Our own Ken Elias (who predicts a May 29 filing for The General) is torn between two motors, feeling like a fool. Loving a BMW is breaking all his rules. The man puts about 12k on the odo per year, and claims he only drives fast on rare occasions [when it is safe to do so or Jack Baruth is in the car]. Obviously, Ken should have read one of our TWO BMW vs. Infiniti comparos, but didn’t. So here we go again. Which car do you think our TTAC vet should lease? Feel free to grill him for more info.
OK, GMAC won’t play ball on extending the lease on my Saab or offer me a price closer to wholesale. In fact, they’ll only extend one month or up to 90 days IF I have a new GM car on order. So I’m looking at a BMW 328i Coupe w/ manual or an Infiniti G37 Journey w/ Sport Pkg. The Infiniti is likely to a bit cheaper to lease by ~$100/month, but it’s an automatic and drinks more gas. I think Bimmer owners are [adjective redacted], but it’s a pretty good ride. Both cars are fun to drive, but I want to give up anything for the pleasure. Advice?
The mainstream media is beginning to wake up to GMAC’s seemingly endless call on the public purse. Thanks to chronic mismanagement—and an 11th hour, last-minute back room deal with The Fed and the US Treasury that turned the virtually bankrupt lender into a bank that couldn’t pass a stress test if it was doped-up to the eyeballs with Thorazine—GM’s former cash cow has become a cow-sized vampire bat, feasting on US taxpayers’ blood, sweat and tears. It’s sucked-up $6 billion in federal funding so far, heading for another . . . wait for it . . . $15.5 billion. The Wall Street Journal is shedding a little heat (not light) on this “hidden” auto bailout, which is heading for another one of those dumb-ass “your money for government equity in a born loser” jobs. Without the slightest hint of accountability.
“Today’s equity offering is another example of the fast, decisive action we are taking as we build momentum on our plan, including further progress on improving our balance sheet.” Well, he would say that, wouldn’t he? And now’s as good a time as any for Ford CEO Alan Mulally to cash-in some of his employer’s chips by selling 300 million shares of common stock. Ford’s stock price has tripled—from not very much to three times not a whole lot—since Chrysler filed for Chapter 11 and GM heads for same. And Ford needs a mountain of cash to honor their contract with the United Auto Workers. While the MSM is busy repeating Ford’s “we’re the only one not suckling on the federal teat” mantra, keep in mind that the sale should raise $1.8 billion or so, and we’re talking a $15 billion total obligation the union’s VEBA health care fund. The market knows: Ford’s stock sank nine percent today on the news of the offer. Still, as we’ve said all along, there’s something to be said for being the last man standing. The question is, what? Let’s hope it’s not “our turn.”
Time did the math, and reports that the total cost of the recent wave of automotive industry “assistance” has reached $83 billion. With Chrysler’s bankruptcy not going well (286,687 2009 models and 36,370 2008 models languishing on lots, according to Fortune) and GM about to join it in court, that number will top $100 million by the end of the summer. GM bondholders are also requesting something more than ten percent of New GM’s equity to give up their debt. And guess who’ll pay for that? Meanwhile, a lousy $4 million in federal emergency grants are going to assist Michigan’s autoworkers who have been laid off by the industry.
Here’s a story that proves that incompetence and general apathy isn’t limited to the DMV where Patty & Selma Bouvier earn their living. Starting now, Quebec motorists can offer up $51.97 above the current cost of a driver’s license to obtain what the provincial government is calling “Smart” driver’s licenses. These licenses will come equipped with an RFID chip that can be scanned remotely by US border guards to identify approaching drivers. Introduced by Quebec’s version of a DMV, the SAAQ, these chipped IDs are meant to allow Quebecers to comply with new Department of Homeland Security regulations that require government-issued identification when entering the US by land. Here’s the problem: The (highly personal) information emitted by the RFID can also be read by anyone else who, with $250 and a working knowledge of eBay, can obtain the necessary equipment. To make matters worse, no encryption or security measures were implemented on these “Smart” licenses. Needless to say, it’s an identity thief’s wet dream.
Such as they are. Japanese sales are set to fall below 5 million in 2009 for the first time in nearly thirty years. But even with Japan’s sales slump particularly affecting standard-sized cars, Honda moved 10,481 units of its new hybrid on the Japanese market last month. That makes it the best selling car in Japan just as Toyota brings its third-generation Prius to market. A hybrid as the best selling car? Government subsidies sure help! And with consumers in Japan clearly value-shopping their hybrids (Honda’s Insight is several thousand dollars cheaper than Prius), is it any suprise that we’ve heard rumblings of a Yaris-based hybrid? Meanwhile, German cars top Japan’s import brand sales. VW, BMW and Mercedes took the top three spots but sold fewer cars combined than the Insight.
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