Apparently no good deed goes unpunished in Auburn Hills, as Reuters reports that Lee Iacocca will lose his retirement benefits under Chrysler’s bankruptcy reorganization. The man credited with saving Chrysler from bankruptcy in 1979 will lose all of his supplemental executive retirement plan (SERP) benefits and his lifetime use of a company car, according to CEO Bob Nardelli’s testimony before Chrysler’s bankruptcy court. Although Chrysler’s employee FAQ states that “SERP contributions are placed in a trust fund and are not subject to creditors in the event of bankruptcy,” it seems that applies only to tax-qualified contributions. “We are required by law to stop the payments of non-tax qualified SERP benefits,” the FAQ reveals. Clearly Iacocca’s benefits fall into this category. Time to make another ad with Snoop Dogg?
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The marathon meeting at the Adlon may not have been for naught after all. “After hours of talks with Canadian auto parts supplier Magna International, GM has reached an agreement, in principle, ” Reuters reports. Now they have to agree on a memorandum of understanding that will serve as the basis for bridge financing of €1.5 billion ($2.1 billion) and the trustee plan that comes with it. The German government will not give the bridge financing without the trustee scheme. Otherwise, their money and Opel will be drawn into the black hole of the Chapter 11 filing that is expected for Monday.
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Jim Fouts, the mayor of Warren, Michigan, has made GM an offer he hopes it can’t refuse. According to the DetN, Fouts hand-delivered a proposal to GM’s Renaissance Center that offered the automaker a 30-year tax abatement on personal property taxes if it moved headquarters to its Warren Technical Center. The offer, which Fouts calls “unprecedented,” would give GM 100 percent off taxes on all machinery and equipment and 50 percent off the taxes associated with any new construction for a period of 12 years.
Sent to us from a member of our Best and Brightest, who’s been following former GM parts maker, and bankruptcy-stuck, Delphi’s implosion at an unsafe distance:
One bit of news last night, and two old known facts, that may be the tip of something bigger. 1. As expected, yesterday, Judge Drain extended the hearing on Delphi’s emergence plan until Tuesday, the day after the GM C11 2. The PTFOA [Presidential Task Force on Automobiles] has never said, and still won’t say, what price they are paying for the five US Delphi plants. 3 Platinum Equity has been sticking their nose in here [Delphi] trying to get to FMV for Delphi’s stuff. The first two on this list don’t make sense. The Platinum thing does. Here’s what could be going on . . .
The Texas state Senate voted Monday to give federal, state and local authorities the ability to track and identify every passing vehicle on state highways. The provision calling for “automatic license plate identification cameras” was slipped into the Senate version of the must-pass Texas Department of Transportation (TxDOT) reauthorization bill. The provision was not part of the bill introduced in the state House of Representatives, whose less sympathetic members will have to accept or reject the entire 1274-page compromise hammered out by a conference committee. The House voted yesterday to instruct its conferees to insist that the House-passed ban on red light cameras remain in the final text.
Suspense in Berlin runs high. At 2 p.m., a meeting was held, German politicians only, no bidders, no GM, no treasury staffers. Fifteen minutes later, Chancellor Angela Merkel left the building—Opel watchers saw that as a sign of a final breakdown. Then at 3 p.m., GM and Magna show up at the Chancellory. Fifteen minutes later, Angela returns. At least they are still talking. 3:55 p.m.: The summit has been re-scheduled. Will start at 6 p.m.. It will be a long Friday night again in Berlin. If talks break down, it will be lights out in Rüsselsheim . . .
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Frank Williams, former TTAC Managing Editor and resident snark-whiz, writes:
Oh Great Guru of the Gearbox, perhaps you can honor me with your wise words of wisdom concerning my ’99 Chevy Tahoe. It has the 5.7L engine and about 123K on the clock. At speeds above 50 mph, it surges when accelerating. This happens whether my foot is on the pedal or the cruise control is engaged. It’s almost like someone’s goosing the throttle and you can see the tach jump back and forth over a 2-400 RPM range when it happens. I use a Tier 1 gas in it and I’ve tried the easy stuff like fuel treatment, fuel injector cleaner and cleaning the MAS. So what should I look for now?
Define “soon.” Unfortunately, no one in federal bankruptcy court nailed that one down as Alfredo Altavilla, Fiat’s head of business development and future Chrysler board member, somehow managed to avoid the kiss of death. This despite Altavilla’s admission that the zombie automaker might not start making automobiles for an indeterminate amount of time. You know, given that the Chrysler dealers who didn’t take a bullet to the head have some 300,000 units sitting on their lots. Of course, it might help to know which units, their age and configuration. But the ChryCo bailout isn’t about selling cars, apparently. According to the Detroit News, all eyes were on soon-to-be-ex-CEO Robert “Run ‘Em Into the Ground” Nardelli. The failed former Home Depot despot “surprised a packed courtroom” when he testified that the whole “new Chrysler” thing’s a done deal, by close of play today [Friday]. The only real surprise: that someone would be surprised that Nardelli is happy to admit that the fix is in. ‘Cause the fix is in. Hang on . . . define “fix.”
Today, Berlin will re-attempt to save Opel after the disastrous Wednesday night / Thursday morning confab. From most accounts, that meeting was a remake of The Three Stooges, with the actors sent by central casting in Washington and Detroit. Berlin is still fuming about the “impertinence” (finance Minister Peer Steinbrück) of the junior Treasury staffer who demanded an extra $415 million more in short-term cash, above the bridge financing of $2.1 billion Berlin had been ready to sign that night. They also are still grumpy about being lied to, or handed “information with a short half-life” as the finance minister put it ever so politely.
I’ll have Mr. SV-1 on the blower tomorrow at 9:30 a.m. EST. I’ll try to get him to join us on CoveritLive. But, if not, your questions?
After taking plenty o’ heat for “helping” Chrysler and GM shit-can nearly 2000 car dealers, the Obama administration has arranged a little sugar for the remaining stores—and then some. They’ve created a federal loan guarantee program for dealer inventory financing that’s worth, you guessed it, billions. Automotive News [AN, sub] reveals that the Small Business Administration’s “pilot” program for car dealers (women and domestics first?) will run from July 1 to September 30, 2010. And what, pray tell, do the lucky, politically-connected car dealers get for our money?
Automotive News [AN, sub] bears the glad tidings that the Presidential Task Force on Automobiles (PTFOA) has decided how much of your hard-earned money they want to plow into “new” GM: $30 billion. For now. Here’s the deal [as laid down in today’s 8-K SEC filing]: “the $30 billion federal loan would be converted to equity, with $8 billion of the total U.S. funds to be repaid by GM, the officials said. Most of the rest would be converted to equity, with the government initially holding a 72.5 percent stake in the new company. That portion could be reduced to 55 percent if a UAW trust fund and bondholders exercise warrants.” So how much is this boondoggle going to cost me, really?
Based on an Autoweek account it seems that not everyone at GM fears the reaper. Bob Lutz clearly doesn’t, meaning a thousand maximum sycophants are going to have to learn a joke that doesn’t involve the government being here to help. At a recent Automotive Press Association luncheon Lutz characterized the PTFOA’s influence as “benevolent oversight and two-way communication between Washington and the auto industry.” And who doesn’t like a good listener with deep pockets? As Lutz delicately puts it, “jeez, it only took 30 years for somebody to finally figure it out.” So when did Mr “Global Warming’s A Crock Of Shit” become such a fan of soft socialism?
Every race must have a winner—even if it’s a Seniors Olympics, where competitors battle with oxygen tanks in tow. In this case, it’s Yank tanks: our American large luxury car shootout. Those of you with a knack for the process of elimination will already know that the Cadillac DTS is our winner. On the face of it, the Caddy doesn’t have the power or charisma of the Chrysler 300c, nor the traditional rear wheel-drive layout of Lincoln’s boxframed Town Car. But the DTS brings a much-needed karmic balance to our comparo. It’s he only car that approaches luxury. In other words, it offers at least a week’s worth of livability for an actual owner.
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