Leave it to the B&B to really transcend the as-good-as-defeated General’s Battle of the Deficit-Bulge, aimed right at the German taxpayer’s money, a.k.a. Government loan guarantees for Opel. Tireguy typed: “The imminent bankruptcy of GM could endanger seriously Opel, although Opel is still profitable.” Deutschland appears to agree. As we shall soon see, some may have a slightly less philanthropic angle. Let’s get right to the point: Opel, Heim ins Reich, anyone? Indeed, some in Germany seem to be itching for a re-match of the Ardennenoffensive. Opel is GM’s heavy artillery in the bastion Europe. Some 75 percent of GM’s European business comes from Opel. If the not-so-secret plan survives, the offensive against General “Nuts” Wagoner will be fought partially in Brussels, coincidentally not far from Bastogne. The broken record called history repeats, again and again. Executive summary of the order of battle follows. Right this way, please!

A few days ago, GM CEO “Red Ink” Rick Wagoner told his man in Germany to ask the German government for €40b (and sundry other goodies.)  Opel-Chief  Hans H. Demant’s request was shot down in Berlin faster than a 747 over Kamchatka. In fact, Opel/GM’s mental sanity was publicly called into question. Deeply humbled, Demant has penned another letter to Berlin. We paraphrase in the spirit of brevity: “Dear Angela: I’m sorry I rubbed you the wrong way. Can you maybe spare €500m? No? How about €200m? Please! I’ll pay you back. Real soon,  honest. Ever your humble servant (and master of 25700 jobs), I remain respectfully yours, Hans H. Demant.” You think we are kidding? Here’s the real rub-a-dub-dub:

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Scientists all over the world are in a mad scramble to find a vaccine against the vehicular flu, commonly called “motor malaise.” Now, Europe also finds itself in the grips of the pandemic. Today (Farago beat me to it), the European association of auto makers ACEA released their January through October numbers. Analysts from the automotive anorexia formerly known as America may envy the fact that from January to October, Europe (as defined by ACEA) fell only 5.4 percent to 12.852m units. Taking a closer look, we now know why the EU was so eager to enlarge eastwards. In the new easterly member states, there was at least an ittsy bit of growth, 2.5 percent for the first 10 months. Without the eastern comrades–  make that members–   the EU would be looking at an even heftier percentage-letting. Have a Maalox, or a stiff drink, and read on, if you dare ….

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Yesterday, we reported that the European Commission threatened to drag Germany in front of the European High Court again– if Germany dares to pass a revamped Volkswagen Gesetz (VW Law.) Yesterday evening, the German parliament flipped a whole aviary worth of birds in the direction of Brussels, and passed the face-lifted law with an overwhelming majority. Result for the time being: VeeDub’s soon majority-owner Porsche will have to kowtow to the state of Lower Saxony, owner of a paltry 20.1 percent of the shares. Porsche must ask for their OK on major issues. On one issue, Porsche doesn’t even need to ask. Lower Saxony will say “nein, nein, nein” to Porsche booking VW’s profits as theirs. Und now European Trade Commissar Charlie McCreevy will file papers “before Christmas,” and the contemptuous Bundesrepublik Deutschland will face the judges of the European High Court. Again. The court will rule (anybody guess how?) Germany will have to implement the wishes of the court again (anybody guess whether they will?) The never-ending saga continues. In the meantime…

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Germany’s industry rag Automobilwoche [sub] is running an interesting ballot. “Who do you think would profit the most if GM goes bust?” (or German words to that effect). The options are kind of odd. Only Ford, Renault/Nissan, Toyota, and Volkswagen are eligible. But keep in mind, Automobilwoche is a German rag. They could have asked “What if Opel would die?” But they didn’t. Do they know more than we do? 846 souls have voted so far.

A few days ago, we told you that the Chinese government will enact “nine measures” to prop up the ailing auto export sector. In the meantime we got our hands on the nine measures. Turns out (some may say, in typical Chinese fashion) that it’s only eight. 8 is a lucky number in China. Some of the measures are fluff, such as government support for car and parts shows, help for ailing shipping companies, advertising support (oddly, targeted at “Russia, Ukraine, South Africa, Vietnam, and Iran,”) and a ban on exporting used Chinese cars. Here are the biggies:

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A few days ago, Porsche’s Wendelin Wiedeking sent a letter to Germany’s parliamentarians, urging them to say “Nein” to Chancellor Angela Merkel. According to Braunschweiger Zeitung [via Automobilwoche sub], Wendy was not what you’d call enamored with a new version of the “Volkswagen Gesetz” (VW law). That’s the legal power bestowed upon The State of Lower Saxony to control VeeDub— despite the State’s [now] relatively measley 20.1 percent holding. Last year, the European Court struck down the law– in the interest of free trade, Mutter and Apfelkuchen. The ruling opened the door for Porsche to ride to the rescue of VW, supposedly shielding VW from gang-rape at the hands of Kirk Kerkorian, Cerberus and a RICO of takeover-artists. And yet Berlin has no plans at all to scuttle the Volkswagen Gesetz. Porsche can own as much of VW as they want. With the law on the books, Porsche can’t fight the power from Hannover or Berlin.

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As reported here, Daimler AG plans to increase its sourcing of automotive components from China nearly eight-fold within four years. The luxury car maker will buy $3.25b worth of car components per year in China. Now, BMW is itching to get in on the act. Not that BMW is new to buying parts in China, they have done that for years, mostly unbeknown to their well-heeled customers. BMW and Daimler are in talks to create a huge buying co-op. They want to create critical mass, and drop the bomb on their Chinese suppliers, the German Handelsblatt reports. By concentrating their buying power, Beemer and Benz intend to save €350m per year, in discounts alone. To assuage their American clientele, they say that they will also extend the stingy hand of their allied purchasing departments to parts suppliers in the U.S.A. However, with the dollar high and U.S. parts manufactures dead, or on the brink of extinction, the BMW/Mercedes buying axis is squarely targeted at China.  The “deeper discounts” news from Deutschland already has Chinese parts makers atwitter and alarmed. Here is why ….

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With the end of the (Western) year in sight, Chinese auto makers look in their books, roll their eyes, and sigh. One by one they come to the same conclusion: this year’s targets are toast. Bu hao, no good.  According to a tally by Gasgoo, five Chinese auto makers have officially written off their old targets and revised them way down: Changan Mazda (-50 percent); Dongfeng Yueda Kia (-20 percent); Dongfeng Peugeot (-31 percent); Dongfeng Citroen (-27percent); FAW-VW’s Magotan (-22 percent). This doesn’t mean that their year-on-year sales will be down by that much. They probably started the year with optimistic growth rates. Which are now coming home to rust. Other companies don’t want to throw in the towel yet, or they say it’s too early to call. But ending October, most of China’s big auto makers were way off course.

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Red – or make that white alert! Volkswagen is planning another attack on the profitability of its dealers. They need to build yet another round of brand new showrooms. In 1995, VeeDub introduced the new architecture for their worldwide dealer network. First, a prototype was built on the grounds of the Volkswagen plant in Wolfsburg. (Embarrassingly, without some necessary permits, an oversight that was quickly fixed.) Then, “one of the largest construction projects in Volkswagen’s history was started” (says so in a book that documented that gigantic project). More than 10k VeeDub dealerships worldwide had to follow the architectural edict from Wolfsburg: “build or die.” Many dealers did both; they couldn’t stomach the high costs associated with the glass and marble palaces, and vanished. Not to be outdone, Audi started their own, totally different concept, throwing dealers further in the poorhouse, and delighting the construction trade worldwide. Now, after more than 10 years of hard work, threats and scores of dealers who made the ultimate sacrifice by bleeding to death on the altar of Corporate Identity, most VeeDub dealers, from Wolfsburg to Winnipeg, from Bratislava to Boise, Idaho, look alike. All, except one…

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“Gotta ask for the bail – I mean sale, ha-ha,” Red-Ink Rick Wagoner told his man in Germany. That would be Hans H. Demant, VP Developent of GM Europe and Managing Director of Opel Germany. Wagoner instructed Demant to ask the German government for €40b, or make that a cool $50b. “What should happen, Hans? The worst thing Angela can say is no.” Demant didn’t want to go eye-to-eye with Chancellor Angela Merkel. Instead, he wrote a letter, to be co-signed by Klaus Franz, the head of Opel’s Workers Council. Usually, Demant avoids signing any paper that has Franz’s signature on it, but the situation was dire, and the message to be sent was “jobs, jobs, jobs.” In the letter, GM Germany’s unlikely duo applied for loan via the European Investment Bank, as soft as marshmallows. While they were at it, they also suggested cheap credit to buy new Opels cars, and cash into the hand of each upstanding German citizen who feeds his Opel car older than 10 years into the shredder, along with a tax credit to reward the purchase of a new car. “That should do it” said Demant. Both signed, and the urgent enquiry for Euros was expressed to Berlin.

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The financing arms of Germany’s automakers are way ahead of GMAC. Germany’s industry rag Autohaus heard of a little sit-down of BMW, Daimler and VW. All present cheerfully agreed to ask Frau Merkel for a little help. Not to prop up their equity, no need. They’ve got enough.  BMW actually went on record and said: “Our bank is right as rain.” (Or German words to that effect.) So why are they holding out their hands for a hand-out to the tune of a few billion Euros? Germany’s captives would like the government to co-sign their notes, which would give them access to cheaper money, which would make their profits even higher, which would give their parents more leeway in giving low interest loans for even higher sales, which would be good for the economy, jobs, the social structure of Deutschland. Dietmar Kupisch, spokesman of VeeDub Germany’s Financial Services said it simpler to the Braunschweiger Zeitung: “It would mean cheaper liquidity for us.”  Mercedes doesn’t need any help. Surprising reaction from Opel: “Thanks, but no thanks. We are taken care of by GMAC.” Haven’t they gotten the memo? Nobody even bothered to ask Porsche. Anyway…

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The auto industry and auto exports have top billing in China’s current 5 Year Plan. (Yes, for sentimental reasons, they still have one of those.) Yet when it comes to the car export part, China is still light-years away from fulfilling their master plan. The Vice Director General of the Department of Mechanic, Electronic and Hi-Tech Industry, Ministry of Commerce, made the startling admission. “China’s auto exports are still in the early stage, leaving a large gap in global exports,” Zhou Shijie told Xinhua. Translation: China’s auto exports are in the doghouse of the export powerhouse. “It is difficult for export companies to master the vehicle entry policy in foreign countries.” Translation: Our cars failed miserably in crash tests, we have trouble with pesky U.S. FMVSS and European ECE regulations, which we can barely comprehend (let alone satisfy). We’re fed up and we’re not gonna take it. No, we’re not gonna take it. Uh-oh.

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China’s closely-watched auto sales stats are in. During the first month after the start of the worldwide auto industry meltdown, the first month after China awoke from the self-inflicted paralysis (a.k.a. the Olympics), sales are growing, but slowing. Compared to last year, China’s vehicle output and sales both grew 11 percent from January through October. October sales accounted for 715,700 units, up 3.37 percent year-on-year. Other countries would party after having received these numbers. In China, they come as a shock. According to China Associations of Automobile Manufacturers (CAAM) [via Gasgoo], China produced 8.02 million motor vehicles– and sold 7.94 million from January to October. Oops.

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First, Volkswagen, bucking a worldwide trend of global bad, refused to change their bullish guidance for the rest of the year. Now, VeeDub’s  luxury segment sibling Audi likewise sticks to its guns. According to Bloomberg, VW’s folks from Ingolstadt are dead-set at selling a million A-lettered cars this year. Grounds for their optimism? Audi sold 82,400 units worldwide in October, up a whopping 7.2 percent. Ten-month sales rose 3.3 percent to 844,700 vehicles so far for 2008. Results which makes Audi an endangered species, worthy of being protected better than the spotted owl. Recession? I ze nozzink! Official reasons cited for Audi’s meteoric ascend are as follows: the usual growth in China, of course. But also, trememediosissme sales in-– would you believe it-– bella Italia.