Dow Jones [via CNN Money] reports that FoMoCo and Ford Credit are prepared to drop precious cash to coax debt holders into converting their notes into Ford stock. Gory details of the deal are below the fold, but numerous sources are confirming that this debt restructuring is a condition for VEBA to accept company stock per its recent agreement. Plus it’s kind of an awesome PR move, in an “eat the weakest first” way. Ford is out doing all the things GM and Chrysler should have done: going to the mats with the UAW and restructuring long-term debt. The two firms actually receiving bailout money dither it away while playing catchup. Of course this doesn’t mean Ford is out of the woods yet, as $10.4B is less than half of Ford’s $25.8B pile o‘ debt. Plus, nobody has actually accepted the offer yet either.

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Think bankruptcy might be an option worth exploring for General Motors? Worried that the Volt might have been a tad too ambitious? Clearly you must be sick in the head. Reasonable people just don’t think that way. After all, why listen to bankruptcy lawyers and university researchers when you can get the truth straight from GM. You think those eggheads know more about GM than GM? Think about it. And while you’re suspending your disbelief, head down to GM’s Fastlane blog. You’ll get your facts straightened out faster than you can say “Stockholm Syndrome.”

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In Peter DeLorenzo’s last column, the self-styled AutoExtremist prescribed nichedom as an “elixir” for Pontiac. Reader reaction was so positive (apparently) that Sweet Pete has jumped off the deep end. People love the “excitement brand, whether it be for nostalgia reasons or because the attitude and spirit exemplified by Pontiac in its heyday.” In short, for nostalgia reasons. “But,” reckons DeLorenzo, “warm feelings of nostalgia won’t be enough to save Pontiac – or GM, for that matter.” Fast forward through some vintage bashing of “grim-reaping, hand-wringing, self-flagellating purveyors of doom in California and Washington,” and other “green-tinged” coastal elites, and what does DeLorenzo prescribe for the broken brand? Yup, “warm feelings of nostalgia.” Specifically, the return of the Firebird Trans-Am. The screaming chicken. Strap on the mullet, folks, this is going to get interesting.

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Also file under “what else do you say when sales drop 52.9 percent?” Automotive News [sub] sifted out a tasty nugget from GM’s latest sales conference call kabuki. “We’ve looked at Hyundai’s (Assurance) program extensively, and we’ve examined some possibilities of what we might do because certainly the consumer is anxious and worried about the future and whether or not they will retain their job,” was how GM’s Mark LaNeve put it. Interesting. But, continues the GM marketing chief, “we’re not crazy about the Hyundai program.”  Because it’s made of kimchee? No, “because all it does is protect your credit from being wrecked. You’ve still got to turn in your car. And when you lose your job, you still need a car to find another job.” GM’s answer: build the gimmick that fixes everything. Of course.

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Yes, Chrysler LLC total sales were down 44 percent compared to February of 2008, but you wouldn’t know right away from reading Chrysler’s press release. The corporate spinmeisters have gone down the “retail sales” rabbit hole, mentioning only retail numbers in the entire release. The implication, of course, is that Chrysler doesn’t want fleet sales. Or, as Jim Press subtly puts it, “we see our retail number as a shining light of positive news.” More likely though, the fleets are beginning to abandon its ChryCo staples on fears (and experiences) of residual value hell. Ignoring the babble, the overall sales picture is atrocious.

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If you’re looking for uplifting, feel-good news about the auto biz, this is about as good as it gets. Subaru sales edged up about 1 percent compared to February of last year, carried by a staggering 101 percent increase in Forester sales. Subaru sold 5,978 of the recently redesigned, Impreza-based utes last month. All other models were down month-on-month, with Tribeca (−58 percent) and Outback (−37 percent) faring worst. Hyundai sales were down compared to last February, but only by 1.5 percent, a hell of an accomplishment in this market. Genesis is chugging along with 1,263 leaving dealer lots in February, but bread-and-butter Sonata sales are at about half of 2008 levels. Elantra sales are up by over 2k units though. SUV sales are taking an wholly unsurprising beating, while the Entourage sold nearly 2,500 units. Kia (via PRNewswire) is up a whopping .4 percent, with Sedona, Sorento and Amanti all seeing increases over last February. First-ever Kia Soul sales hit only 34 as the newest Kia hits dealerships.

All the bad news is available at GM’s media page. All of GM’s brands were down by at least 50 percent, except for Pontiac which squeaked out a 40 percent drop. Buick sold fewer cars this month than it sold LaCrosses in February of ’08. CTS was the only Cadillac that sold over 1k units this month, and at 3,259, it sold at over double the rate of all other Caddys combined. The Malibu has finally outsold the Impala, as ‘bu sales dropped 3.7 percent to the ’pala’s 67.7 percent. Pontiac sold only 80 G3 Aveo clones, although solid (down 4.8 percent) Vibe sales kept the division’s average at a 39.2 percent drop. Saab sold fewer than 500 vehicles, and the canceled Astra is the only bright spot in the Saturn lineup. Astra sales have increased since it was canceled in December.

Toyota Financial Services has requested a $2B loan from the Japan Bank for International Cooperation, a government-backed lending institution. TFS says it needs the money to cover the higher cost of borrowing in the US. According to Automotive News [sub], “Toyota may be the first of a string of Japanese companies with high credit ratings to turn to state-backed loans prior to the closing of books for the business year at the end of March.” Toyota’s “implied” credit rating based on credit-default swaps is considerably lower than its current Moody’s rating, as fears grow about liquidity problems across the automotive industry. The money will come from a $5B fund established by the Japanese government to provide liquidity for firms which operate abroad. These funds are said to come from Japan’s $1T+ in foreign cash reserves, the world’s second-largest foreign currency reserves after China. Nissan and Mitsubishi have also said they will apply for loans from this fund.

Honda took the industry-standard beating last month, emerging with “only” a 35.4 percent sales drop. Unsurprisingly, Honda’s hot Fit kept its head above water: sales increased 2.3 percent in February. Accord and Civic were both down over 30 points. In the SUV category, only the CR-V escaped 40 percent or higher year-on-year monthly sales loss numbers. Acura’s new TSX is up four percent. The rest of Honda’s luxury brand is way down. The attached Honda press release hopes against hope for a spring uptick in sales. The new Insight Hybrid could also revive sales. Meanwhile, Civic Hybrid sales tumbled 21 percent. But with bread and butter Accord and Civic sales down so sharply, Honda will be hurting until the mass market decides it wants new cars again.

There’s nothing for anyone to like in Ford’s just-released February sales numbers (PDF), which show sales of all brands down nearly 50 percent. SUVs led declines by category, dropping a staggering 71 percent compared to February ’08. Drops were relatively even by brand, with all of Ford’s brands declining by between 40 and 55 percent. Fusion and Mustang sales dropped by 49.2 and 61.4 percent respectively, while Edge and Taurus X dragged CUV sales down with 55.2 and 46.1 percent decreases. Both of these categories fared much better than Ford’s SUVs which were down over 70 percent. Lincoln sales dropped 41.2 percent with MKZ, Navigator and Mark LT all falling over 65 percent. Mercury’s Sable showed a 35 percent sales increase, holding that brand’s losses to under 50 percent. Volvo lost over 55 percent of its sales versus last February, with S60 (down 79.2 percent) and V70 (down 66.8 percent) leading the way. Volvo’s new XC60 sold only 235 units. Volvo’s best-selling car is the S80, which sold a grand total of 671 units last month.

Covering Detroit’s massive health care liabilities is perhaps the single greatest challenge facing those working on the auto industry bailout, reports the Washington Post. Detroit retirees in particular represent a huge commitment, as current health care benefits include dental, vision and prescription drug benefits for the low price of $11 per month. And as the automakers burn through their cash, they must come up with some way of maintaining or cutting benefits in the face of rising health care costs. GM currently carries $20B in health care obligations, over ten times its market capitalization. Chrysler owes $10B and Ford owes $3.2B of its total $13.2B VEBA commitment this year alone. With bailout plans calling for automakers to inject equity rather than tight cash into the VEBA system, a number of unintended consequences are being forecast.

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While California breaks away from the national emissions standards, Canada is headed in the opposite direction towards unified efficiency regulations. “At this point in the United States, it would appear that they are headed towards a 35-mile-per-gallon standard by 2020 and that would start to come into effect in the 2011 model year,” says Canadian Environment Minister Jim Prentice. “We’ve essentially been prepared to go in that same direction . . . what we’re striving for is a North American standard because we know there’s only one North American automobile industry.” Prentice is in Washington DC discussing energy and environmental policy with the Obama administration. “The first thing that has to happen, however, is that the United States has to land with their own domestic policy,” Prentice tells Automotive News [sub]. “It’s by no means clear how this will emerge from Congress over the course of the next year.” Or whether California will play along. From an industry perspective, consistent regulations from the US to Canada would be welcome, although average fleet economy is not a favored regulatory metric.

Except that it isn’t, of course. “Pontiac still has a mission in the BPG channel and it’s one that a very dedicated team of engineers, marketers, and dealers is determined to complete successfully, one step at a time,” writes Buick-Pontiac-GMC VP, Susan Docherty, at Fastlane. Actually, that’s the last sentence of the post, tacked on in case its complete lack of substance failed to convince you of the endlessly repeated talking point. So what’s changing? “Very little,” in the near term, says Docherty. “Pontiac will continue to offer the G5, G6, G8, Solstice and Vibe, and we’re adding the economical G3.” Because, as Docherty puts it, “Pontiac’s top reason for purchase is “fuel economy” and we won’t disappoint with four of our six entries getting over 32 miles per gallon on the highway.” So Pontiac is efficiency. Glad we cleared that up. Also, “the Pontiac Torrent will be discontinued to enable the brand to “focus” on cars,” says Docherty. “But the good news is that a new, five-passenger crossover SUV entry will soon be found at GMC . . . stay tuned.” Uh, no, that’s bad news too. The point of the exercise to cut the number of nameplates, remember?

Planned obsolescence, or the constant replacement of existing models has been a mainstay of the US auto biz since GM started eating Henry Ford’s austere, one-size-fits-all lunch nearly 100 years ago. As automotive technology rapidly matured, new model year refreshes offered new gizmos, tweaked styling, along with more performance, space and status. Before long, the eternal quest for newer, hotter newness led to a near constant turnover in model names, styling and branding. Every three to five years now, we expect new headlights and maybe a fender vent at the minimum, signifying that the driver is far more in touch with the times than someone stuck in the instantly-dated predecessor version.

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