Like our friends up in the RenCen citadel, New York State has been taking in less than it spends. In a big way. In fact, The Empire State has racked-up a $15.4b deficit. A fact that somehow didn’t make it into The New York Times story on Governor Paterson’s plans to drain $9b from Albany’s pig trough and tax the beJesus out of anything that moves or breathes within his state’s boundaries. We’re talking 137 new or increased taxes and fees. And guess who takes it on the metaphorical chin? iPod users! Not to mention… “The tax on car rentals would rise to 6 percent from 5 percent… Taxes on gasoline, cable and satellite TV service, cigars and flavored malt beverages would also go up. And the cost of owning and operating a car would rise significantly, with 16 fee increases.” Including (but not mentioned in the article) a five percent tax on any vehicle that sells for over $60k. TTAC’s UK readers will roll their eyes at any idea that NY drivers will crumble under the yoke of such a puny extra burden, but it looks like a slippery slope to me.

The Wall Street Journal (WSJ) reports that General Motor’s former captive finance unit and current chest-strapped TNT device looks set to miss its deadline for a debt-for-equity swap. GMAC needs to get the deal done to transform itself into a bank and score federal funding under the Troubled Asset Relief Plan (TARP). “GMAC needs to show $30 billion of capital in order to become a bank holding company regulated by the Federal Reserve… As of Wednesday, GMAC had received 58% of existing, eligible GMAC debt securities and 38% of outstanding debt securities of ResCap (as the mortgage unit is also known) — little changed from late Tuesday. Around 75% of the selected securities must be tendered for the proposed debt restructuring to succeed in raising capital that would go toward satisfying GMAC’s conditions to become a bank holding company.” Those plans took a major hit today…

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From GM’s FastLane Blog: “We’ve been very proud of and grateful for the support and encouragement we’ve received from so many in the business community recently, especially locally here in Michigan. Jim Hiller, CEO of Hiller’s Markets, recently wrote this post on his corporate blog in which he explained why he feels it important to buy from American-based vehicle manufacturers and why he supports his community here in Michigan. We thought Mr. Hiller’s comments were worth sharing.” – Christopher Barger, Director Global Communications Technology” Excerpt:”My epiphany came as I stood on slick-top pavement in a moon-lit night, waiting for my car after a fundraiser for the Juvenile Diabetes Research Foundation. I stood with General Motors Vice-Chairman Bob Lutz, watching foreign car after foreign car drive away into the rain-slicked night. He turned to me as those foreign luxury vehicles peeled out of the parking lot and said, ‘How many people realize that when they buy an American luxury vehicle, they’re providing work for a dozen people for at least a week?’ Before then, I hadn’t felt in my bones the direct connection between the car I drive and the people in my hometown being in, or out, of a job. Many of my friends had told me so, but I didn’t listen – friends from other countries, shaking their heads in disbelief at the thought of neglecting one’s homeland… I don’t even remember what kind of car I was driving, but the next day I bought a Cadillac STS and loved it. All of my preconceived notions that foreign cars were better-made and were longer-lasting, well, they proved untrue.”

Oh dear. At one time, The Bentley GT Coupe was the UK footballer’s favourite. And it may still be, given that young men with a supernatural ability to play the beautiful game tend to spend orgiastically, ignoring such petty concerns as depreciation. But the fall-off in automotive values during these recessionary times is enough to give their accountant pause. UK auto industry experts HPI report that “the Bentley GT Coupe is depreciating at £500 ($753.37) more per week than it did 12 months ago. This means owners will lose over £67,000 ($100,874.89) in value, which is 56% of its £120,000 ($180,731.64) new price tag, in the first year. “Looking ahead, the huge rate of depreciation means the more affluent consumers will change they way they shop,” HPI’s Martin Keighley predicts. “Luxury models such as Ferrari and Porsche used to have bullet proof residuals, but with consumer confidence at an all time low these once secure purchase items will not seem so attractive. Buyers are going to be looking at how well a vehicle holds its value before splashing out, which doesn’t bode well for high end models.” Make the jump to see the UK’s worst depreciators.

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“There’s an orderly way to do bankruptcy that produces a soft landing,” White House spokeswoman Dana Perino said today. “That’s one of the options.” As we’ve said before, the longer this goes on, the shorter the walk to bankruptcy court. Speaking of which, Bloomberg reports that “The federal bankruptcy court in Detroit, preparing for large reorganizations including possible filings by General Motors Corp., Chrysler LLC or Ford Motor Co., has changed some of its rules. Efforts to make the jurisdiction more business-friendly may prompt automakers to seek protection in their Michigan home, rather than in the traditional, big-business venues of New York and Delaware.”  The court has passed a new administrative order that empowers the chief judge to choose a bankruptcy judge for any given case (as opposed to random selection). At the same time, they’re reviewing staffing, security and technology functions, waiting for the “big one.” Or two. Or three. “There is no district in the country that has a greater stake in the outcome of a filing by one of the Big 3 than the Eastern District of Michigan,” said Chief Judge Steven Rhodes. Ironically enough, it looks like there’s one part of Motown’s business where the state will fight outsourcing.

“Due to the continued lack of consumer credit for the American car buyer and the resulting dramatic impact it has had on overall industry sales in the United States, Chrysler LLC announced that it will make significant adjustments to the production schedules of its manufacturing operations. In doing so, the Company will keep production and dealer inventory aligned with U.S. market demand. In response, the Company confirmed that all Chrysler manufacturing operations will be idled at the end of the shift Friday, Dec. 19, and impacted employees will not return to work any sooner than Monday, Jan. 19, 2009. [emphasis added]

Chrysler dealers confirmed to the Company at a recent meeting at its headquarters, that they have many willing buyers for Chrysler, Jeep® and Dodge vehicles but are unable to close the deals, due to lack of financing. The dealers have stated that they have lost an estimated 20 to 25 percent of their volume because of this credit situation.

The Company will continue to monitor the production schedules of its manufacturing operations moving forward.”

TTAC has long predicted a supplier-led “run on the bank” scenario, whereby suppliers demand COD and destroy Chrysler, GM and (yes) Ford’s life-sustaining cash float. While the automakers have managed to stave-off that eventuality– as suppliers jostle for their position in line at the bailout buffet– it seems that Chrysler dealers are showing the same level of respect to the corporate mothership as the channel stuffing colossus has shown its dealers. The Wall Street Journal reports that “Chrysler LLC’s financing arm has warned dealers it may have to temporarily stop loans that dealers use to pay for stocking vehicles on their lots as a result of a recent wave of withdrawals from a fund used to pay off those loans. In a letter dated Dec. 12, Chrysler Financial Chief Executive Tom Gilman said dealers have been withdrawing up to $60 million a day from the fund…. Gilman said more than $1.5 billion has been withdrawn from the CMA [cash management account] fund since July.”

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As Detroit holds its collective breath on President Bush’s plan to pull the automakers’ collective fat from the metaphorical fire, the autobologosphere’s been quiet. No doubt something’s up, including GM’s stock. [NB: a large percent of bupkis is still bupkis.] And the longer this jury stays out, the more likely bankruptcy’s the final verdict. Yesterday, Moody’s published this report pegging the odds of a pre-pack with (federal debtor-in-possession financing) C11 at 70%. To which nobody said nothing (excluding own Bertel Schmitt). Today, The Wall Street Journal published a piece saying consumer resistance to buying a car from a bankrupt automaker is declining. And then there’s this, from Bloomberg…

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I know it’s a bit early in the day for a quote of the day, but I have to go test drive a XXXXXX for the TTAC Ten Worst Awards. Hopefully, Eddy will wake up from his birthday celebrations soon, equipped with enough functional brain cells to continue to feed the beast (that’s you) with fresh autoinfotainment. So before I leave my garret to drive a POS on your behalf, I’d like to leave you with this thought: “the Tesla is really just another example of why gasoline is still king.” These words of wisdom come to us via Ralph Kinney Bennett, who pens paen to petrol for The American. “A gallon of gas weighs about 6.3 pounds and produces roughly 35 kilowatt hours of energy. That’s enough to burn a 100-watt light bulb continuously for more than two weeks. A lead-acid battery could do the same thing without needing a recharge—if it were the size of a desk and weighed a ton. Energy density is the point. We just haven’t come up with a fuel or a device that will safely and economically offer the same calorific value in such a small space as an automobile’s gasoline tank.” OK, lithium ion batteries. OK, range. Specifically, a 911 vs. a Tesla Roadster…

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Conservative talk show host Bill “I swear the nuns didn’t beat me” O’Reilly likes to rail on (and on and on) about America’s cultural degradation. In fact, it’s one of our country’s greatest strengths. Rappers who started by singing (well, shouting) the praises of capping cops end-up in Bentley-and-bling filled videos that make unbridled consumerism seem like the ultimate revenge against The Man. Hell, there ain’t nothin‘ we can’t assimilate! For profit, obviously. And the people who profit most are always the distributors. I’m not sure what Karl Marx had to say on the subject– I’ve got “How To Make a Killing off of Karl Marx” on my night table– but he who controls the distribution owns the gold. So along comes Zipcar. Nice idea: rent a car by the hour. Here’s your card. Pick up a car, swipe ‘n go. After eight long years, they get a bit of traction: 5,500 cars in 13 cities. Rad dude! I guess we’re showing those big rental companies how it should be done! Problem: Hertz.

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Hi Robert, I saw this letter to the editor in December 15th Automotive news and thought it might be of interest.  – Glenn

To the Editor:

Hey, Chrysler, remember me?  I’m the dealer who sold your K cars, your Omni Misers (that got in excess of 35 mpg – where are they now?). I stocked and sold your minivans with air and transmission problems. I sold your 2.7-liter sludged engines and then had to tell my customers it was their lack of maintenance that caused the $6,000 problem. I sat on your dealer councils and advertising boards for years.

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Autocar [UK] reports that Honda CEO Takeo Fukui slipped this little nugget into his end of year speech: the new NSX is toast. While the fact that Honda has also deep-sixed their plans to introduce the Acura brand to Japan in 2010 (reported by Bertel this morning), the death of the NSX will likely catch the eye of the enthusiast press. It’s something of a climb-down for the HoMoCo CEO, who told Autocar last year that “The new supercar is necessary for Honda.” Of course, that’s so last year, what with Marketwatch reporting that Honda cash flow isn’t. More specifically, Bloomberg tells us “Sales are forecast to drop 13% to 10.4 trillion yen, down from the previous estimate of a 3% drop to 11.6 trillion yen. Operating profit will likely drop 81% to 180 billion yen, worse than the 42% decline to 550 billion yen that had been expected.” In other words, this is Honda’s second revised fiscal outlook in two months. In case you missed that, “The situation is worsening by the day and shows no sign of recovery,” Fukui pronounced at a press conference in Tokyo Wednesday. And this is a business in which we want Uncle Sam to invest?

From egmcartech.com: “For the record: Thanks to The Stig’s impressive turn behind the wheel, the Tesla Roadster gets a higher ranking in Top Gear’s performance board than a Porsche 911 GT3. Jeremy Clarkson, a die-hard ‘petrol head’ with a clear bias against green cars generally, said that it must be ‘snowing in hell’ because he had such a great time driving the Roadster and now considers himself a “volt head” thanks to the Roadster’s amazing performance. This is amazingly high praise from Clarkson, whose entire schtick is to savage even his most beloved petrol-guzzling sports cars.

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“If we’re going to use taxpayer financing to assist the automakers, all stakeholders are going to have to come to the table and be willing to show that they are capable and willing to make really tough decisions about the way forward,” White House Spokesperson Dana Perino said today. “We’re not going to be rushed into it just because there’s pressure from the media… on us to do something rash.” Yeah, hurry up and do something rash, will ya? “We need them to become viable, competitive firms in the future. And in order to do that, concessions are going to have to be made by stakeholders.” Not to mention everything else.