Detroit has had some time to get used to watching the hometown team lose. After the D3 Execs’ dismal performance in DC, most of the country feels confident that federal moolah won’t flood Motown, but for the Detroit dead-enders, hope springs eternal. And their congressional enablers are standing by to keep expectations wildly unrealistic. The Detroit Free Press, home of Detroit doom denial, is running a cruelly hope-inspiring story this morning in which Democrat congressional leaders raise the possibility of another attempt at bailout before the year is up. Senate Majority Leader Harry Reid (D-NV) today “raised the prospect” of calling the Senate back into session in December, while Speaker of the House Steny Hoyer said it was “possible” that the House could come back in December as well. With a TARP raid off the table, Senators Carl Levin (D-MI) and Christopher Bond (R-MO) are working on a compromise bill which would accelerate the already-approved $25b retooling loans. There’s even a chance that such a compromise could be attached to an extension of unemployment bill which may call congress back after its Thanksgiving recess anyway. After Motown’s shameless display before the House Financial Services Committee over the last two days, we’d be pretty surprised to see this happen. But, y’know, whatever it takes to avoid facing reality.

The Automotive Lease Guide has released its projections for the vehicles most likely to retain their value three years from now, and they’ve awarded the top honors to three compact(ish) cars, the Scion xB, the Honda Fit and BMW’s MINI. The MINI took the overall prize, with ALG predicting that a new Cooper will retain 64.5 percent of its retail value after the average 36-month lease. The xB won the mid-compact category with a projected retention of 63 percent of its new value, while the Fit topped the compact class with a residual value estimated at 59.8 percent. ALG president John Blair tells Automotive News [sub] that price, design, new-vehicle incentives and fleet sales all went into the projections, with special consideration paid this year to Detroit’s woes. “The public needs to have confidence that the companies are solid and they’re going to be around to service the vehicles and provide a pathway for warranty work,” Blair said, by way of explaining why US firms ranked so low in the rankings. (Read More…)

The Chair of the National Automotive Dealers Association, Annette Sykora, sought to distance her fellow dealers from the less likable elements of the industry (OEM CEOs, Gettelfinger) who preceded her in testimony before the House Financial Services Committee today. Calling dealers “the face of the industry,” Sykora advocated for what she termed “the unique role of dealers, most of whom are independent businesspeople who have invested their own money in their stores,” according to Automotive News [sub]. More pressingly, she has a tiny little problem with the proposed $25b bailout legislation, namely the provision calling on automakers to “rationalize” their operations, including “manufacturing work force, suppliers and dealerships.” “Dealership reduction is not necessarily the equivalent of dealership rationalization or dealership optimization,” said Sykora, echoing the subtly (or not) self-interested tone of UAW boss Ron Gettelfinger. The dealer’s wheeler-dealer went on to suggest that sales-boosting clunker-culling programs and SBA loans to dealers would be nice. And not for the first time. We get it. Nobody wants to do what it takes to make the D3 competitive, let alone save the taxpayer a buck. That much is clear. But how do any of these public displays of short-sighted self-interest make taxpayers any more likely to fork over $25b?

In testimony before the House Financial Services Committee, Chrysler CEO Bob Nardelli agreed to match Lee Iacocca’s $1 per year salary if Congress would only give his firm their $7b chunk of the proposed automaker bailout. Ford’s Alan Mulally told the Committee he is “fine where he is,” and noted that he needs to make sure his executive team is “well motivated,” given the fact that the company is so not of the woods its deep within them. As usual, the worst performance was put on by GM CEO Rick Wagoner, who claimed to have cut his own salary by 50 percent. Not that he was lying, he just conveniently forgot to mention that he had reinstated it. To make matters worse, he played the Curly card (“I’m a victim of coicumstance!”). Red Ink Rick complained that he’d purchased GM stock “with my own money” which was now “worthless.” I’m paraphrasing here– I can’t take notes while having my mind blown. The idea that a CEO would buy his own company’s stock, oversee its demise and then complain about the losses to Congress in an attempt to get bailout bucks for the company that he flew into the ground is… awesome. This is the guy who has overseen eight years of lost profit, lost market share and cratering market cap. A Gulfstream jet setter who’s refused to step aside as a theoretical condition of a theoretical bailout. Then again, who’s surprised?

Update: Wagoner’s direct quote was “I have a significant amount of General Motors stock, including a lot which I’ve bought myself, which basically is valueless. ” Hear that stockholders? That’s leadership. Hat tip to ABC Political Radar

That was quick. GM is saying nein, danke to SolarWorld’s offer to buy elements of its Opel subsidiary for one billion Euros. “This is pure speculation. Opel is not for sale,” GM Europe spokesman Nelson Silveira tells Automotive News [sub]. Meanwhile Opel is slashing production, and angling for its own federal bailout, courtesy of Berlin. Of course a German bailout of Opel will only happen if GM files for bankruptcy, but then, the same could be said for SolarWorld’s offer. AN notes that SolarWorld “benefited enormously from new energy laws set up by the Social Democrat-Greens government after it took power in 1998,” and it’s clearly aiming to not only acquire Opel up for a song, but to turn around and snag the government money as well. This is what the new economy calls “timing the market and the government,” a technique the firm is clearly riding to success with solar panels. Anyway, auto industry boffins say the offer is a joke, a charge SolarWorld founder and CEO Frank Asbeck firmly denies. Meanwhile, GM is clearly less adept at “timing the government,” or at the very least “charming the government.” With a US bailout looking increasingly less likely, GM may soon lose the luxury of saying no to offers like this one.

AFP is reporting (via Yahoo News) that German Solar Power firm SolarWorld has offered to buy Opel for 1b Euros, in hopes of creating Europe’s “first green automotive group.” The offer consists of 250 million euros in cash and 750 million euros in bank credit facilities for Opel’s four auto factories and a key research centre in Ruesselsheim, western Germany. I know, I know, you’re probably asking yourself if this is some kind of twisted joke. “I could not be more serious,”  says SolarWorld boss Frank Asbeck. “We would not make this offer otherwise.” Of course there are still strings attached. For example, SolarWorld wants a liquidity guarantee for Opel from the German government. The deal also would require a complete split of Opel from GM, and compensation payments of 40,000 euros per Opel worker, which would approximately equal the one billion euro purchase price. But, as Global Insight analyst Christopher Stuermer points out, “Adam Opel Germany has total assets of around eight billion euros — SolarWorld’s offer is ridiculous.” The consensus appears to be that this will only happen if GM goes under, in which case the German state of Hesse has already pledged 500m Euros. After watching several hours of House Financial Services Committee hearings, this blogger is as convinced as ever that this is an outcome worth betting on.

Chris Kelly at the Huffington Post brings up a good point this morning. Chrysler is just one of more than fifty companies in the corporate Hades that is Cerberus Capital Management, L.P. They don’t have to bark publicly about their holdings, but have admitted to $25 billion under management in funds and accounts, with investments generating more than $60 billion in annual revenues worldwide. So why can’t one head of the beast help out another? Why can’t the dog ditch their Japanese bank, Aozora; their German bank, Handel und Kredit Bankhaus; a reinsurance company, Scottish Re, some of their seven TV stations or slice of their 65,000 apartments in Berlin? If their 250 Burger Kings were going under would Congress be rushing to save them? Why is Cerberus begging the Feds for scraps like some underweight cocker spaniel, when they’ve got so many bones buried out back?

On second thought, that’s a silly question. Why are we allowing it? Now that’s a question.

We’ve been ringing this bell for a while now, so it’s nice to see some of the big guns in the media world back us up. The New York Times has a scathing piece on the oft-cited Center for Automotive Research study on auto industry employment today, stripping the statistics of much of their bailout-justifying clout. The Times points to two significant shortcomings in the study, the first of which is that the statistics presented by CAR account for the entire industry, including those firms which build cars here but aren’t going under. As we have argued before, these statistics prove only how vital the entire auto industry is. For Detroit to claim that these numbers are somehow indicative of the amount of jobs which will be lost if the American automakers go under is beyond misleading. In fact, if the Detroit Three fessed up to the fact that the “foreign” transplants employ more Americans than they do, you would have a good sense of how “viable and relevant” they really are.

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Chairman of the House Financial Services Committee Barney Frank (D-MA) spoke with NPR earlier today, and within a single question the bailout’s biggest backer was already undercutting his $25b pet project. “We don’t think it would be enough,” admits Frank, “If, on March 31, the president does not believe that this is going to get them the viability with energy efficiency cars, they have to repay the loan; they get no more money. If they can show by March 31 a plausible way to go forward, then we would consider giving more money, again, under equally stringent conditions.” NPR’s Steve Inskeep spends the rest of the interview trying to get Frank to make some sense… in vain. The best Frank ever offers is the cold comfort that his bailout plan is not as bad as the AIG bailout or the Iraq War. So, the bar’s clearly set pretty high.

Sweet Pete DeLorenzo has made no bones about where he stands on the bailout, and having lashed out at the nattering nabobs of negativity (us), he’s turning attention to the old MSM and its coverage of the great bailout begathon of ’08. As a rash of common sense thinking about Detroit metastasizes into the mainstream, DeLorenzo is doubling down on his affection for Motown, and conducting interviews with whomever will listen to his rah-rah routine. In today’s Autoextremist Rant, he takes on the perception gap, that mythical construct which prevents the benighted masses from appreciating the truly great products Detroit offers. “The Perception Gap that exists out there for the Detroit automakers isn’t narrowing,” argues DeLorenzo, “it’s actually growing wider. Because when Americans get what minimal news they’re willing to digest – and only because it’s pre-packaged in carefully doled-out sound bites – then the Old Detroit will perennially overshadow the New Detroit, hands down.” (Read More…)

Bob Lutz rode to Motown greatness on a wave of bombast, charisma and general maximum-ness. And his ability to act like Patton in full advance, even in the face of dismal business results, has been crucial to GM’s several year long “product revolution” denial offensive. But when the war is over, and the other general’s are already discussing the terms of surrender, men like Bob Lutz are suddenly seen less as inspirational figures and more as, well, liabilities. Buried in an otherwise unremarkable piece on the LA Auto Show in MSNBC, we get a little taste of just how minimum things are at GM right now. Global Insight analyst Rebecca Lindland reveals that GM won’t be sending the man of maximum to LA to launch the new CTS Coupe. “The perception of Cadillac is of excess; it’s a high-profile, low volume vehicle and not the type of vehicle you want to be seen flaunting right now,” she said. “And you can’t take a chance that the media will catch Bob Lutz swilling Champagne or puffing on a cigar — it’s a PR nightmare waiting to happen.” Just wait till you see the post-bailout spa bills.

UAW President Ron Gettelfinger is joining Detroit’s two-day testimonial of shame in Washington DC today, and in case there was any suspense about what he would say, he leaked his notes to the Detroit News. The shameless audacity of his position shouldn’t come as a surprise, given his (and his organization’s) track record. Still, it might just take your breath away a little. Step one on the Gettelfinger formula for success, prove that the D3 are going under. Not hard. Step two, refuse to do anything about it. “We do not believe there is any justification for conditioning assistance to the Detroit-based auto companies on further deep cuts in wages and benefits for active and retired workers. We would also note that in the cases where the Treasury Department has acted to rescue financial institutions, it has only imposed restrictions on executive compensation. It has never mandated cuts in wages or benefits for rank-and-file workers and retirees. Thus, there is no basis for singling out the auto industry for different treatment,” says Gettelfinger in his prepared remarks. Step three? Blackmail, baby. (Read More…)

Detroit’s slow-mo meltdown has been rife with tipping points for years now. As bad decisions piled upon bad luck, we’ve seen the signs become increasingly ominous. The light at the end of the tunnel has become so faint now that each new misstep comes hard on the heels of the previous one, each taking on ever more existential significance. Perhaps though, we have reached a new low in the news coming out of GM today, as Automotive News [sub] reports that GM will delay incentive payments of $302.4m to its dealers for two weeks. If this decision was made based on GM’s liquidity crisis, it means that GM can’t come up with $300m until December 11: A stuffed stocking of not good. On the other hand, if it’s another twisted ploy to generate political support for a bailout, it’s some inspired stuff. Based on the letter (after the jump) sent by GM VP of Marketing Mark LaNeve, it’s looking like a little of both. After all, blackmail has always been a crime of desperation. (Read More…)

We’ve had a few confused comments on the Dodge EV vs. Challenger “drag race” video, so we thought we’d fill in some details. And post something between Bailout Watches. First of all, the stunt was choreographed by Chrysler. ENVI President Lou Rhodes is behind the wheel of the Dodge EV while a weak-ankled Chrysler employee handles a Challenger 6.1 with octegenarian restraint. Clearly this was intended as a PR two-fer. Chrysler gets to show off its Tesla wannabe and its muscle car, while giving the LA Times the opportunity to write about how Chrysler’s EVs and EREVs are the future. And clearly the point was to give the Challenger the fuzzy end of the lollypop in order to show just how advanced the Chrysler EV program is. Maybe next time they could be a little more convincing. The video doesn’t so much make the Dodge EV look like a muscle-car-beating dynamo, as it makes the Challenger look like a secretary special. The LA Times’ Dan Neil admits that the Challenger was launched in second gear in both runs, and that it “seems to let up” on the second run. Nobody will say for sure if it was a lift-off or an audio effect caused by the rev limiter. Regardless of the actual details, the real point of these video stunts is to look cool, and it’s in this crucial consideration that the video really lets down. Had the Challenger sat on the starting line, dramaticaly gasifying its tires while the EV scooted to victory, the PR “message” would have remained the same and it would have looked a lot better. As it went down, the stunt looked staged and neither car came out looking heroic. Better luck next time.