This is one of those “news” alerts where I check to see if it’s April 1. Not so Ray Wert. Jalopnik’s main man is happy to hook, line and sinker the The New York Times‘ story that “General Motors is in preliminary talks about a possible merger with Chrysler, a deal that could drastically remake the landscape of the auto industry by reducing the Big Three of Detroit automakers to the Big Two.” There are three reasons why this story means WAR for TTAC. First, NYT scribe Bill Vlasic is a longstanding Detroit cheerleader. Second, the story backpedals in the second paragraph: “The talks between G.M. and Cerberus Capital Management… began more than a month ago, and the negotiations are not certain to produce a deal. Two people close to the process said the chances of a merger were ’50-50′ as of Friday and would most likely still take weeks to work out.” And this: why? What possible benefit would this deal be to anyone– save the consultants who’ve been paid millions to try to answer that question without laughing. The Times’ theory? “Given that both G.M. and Chrysler are struggling, the two sides may determine a merger may not be in their best interests.” Oops! Let’s try that again. “While G.M. and Chrysler may be hamstrung by labor contracts from cutting jobs, the two companies could combine dealers, product lines and advanced vehicle technology.” About a week ago, we heard that GM was considering buying Jeep to combine it with HUMMER. We didn’t repeat that absurdity (until now). But then, we’re not the New York Times. Or Jalopnik.

As the U.S. economy craters, the price of gas is about to fall below $3 a gallon. Most experts believe that lower fuel costs will not lead American consumers into gas-guzzling SUVs anytime soon. If at all. Given the sudden arrival and frentic pace of the last gas price spike, even an extended period of low, stable fuel prices wouldn’t convince American consumer to “trust” lower pump prices. In other words, an entire generation of drivers may have suffered “pump trauma.” And until somebody buys the damn things, and lots of ’em, SUV and pickup truck residual values will remain low enough to make an ant’s ankles look like Godzilla’s eyeballs (or something like that). But hey, that’s the 411 from “experts,” not TTAC’s Best and Brightest. So I turn to you for a more thoughtful analysis. Will Americans “forgive” their gas guzzlers and “forget” their pain at the pump, plumping for ye olde guzzlers when the economic crisis passes? If so, how long would it take? What effect would cheap gas have on eco-oriented whips like the Chevy Volt and Toyota Prius?

Interesting photo. Either Bruce is majorly pissed about something the photographer said or did (see: Winston Churchill Karsh), or he’s finally perfected the art of looking like a something other than an endlessly pampered, egomaniacal movie star. Anyway, his timing for this sale sucks. Anyone who clings to the belief that prices for vintage muscle cars will defy the gravity of the stock market is seriously deluded. By the time this deal goes down– Saturday, October 25 at Bonham’s in LA— the muscle car market will have tanked. Are there enough “crotch sniffers” (nice one Stephan) who’d pay a premium to own a muscle car owned by a man famous for saying “Yippie ki-yay, motherfucker”? I doubt it. It’s one thing to own an example of the breed purchased by Steve McQueen (or similar) back in the day. It’s another to own a muscle car bought by a celebrity who uses it to pose like a tough guy, even though the toughest thing about him is his agent.

As they used to say in England, TISWAS (Today Is Saturday, Watch And Smile). Oh wait, it’s Friday. MAN, what a week. The news cycle has been nothing short of ferocious, what with the financial meltdown setting a blowtorch to GM, Ford and (latterly) Chrysler’s assertions that they’re going to get the Titanic to New York if it kills you (i.e. taxpayers). Yes, there is that. We’re going to start our Bailout Watch 2 series next week, as it’s only a matter of time– and not much of it– before the whole “Too Big To Fail” shtick pops its head above the proverbial parapet. Meanwhile, we’ve been grappling with the new site design. As expected, the new format killed a LOT of page views; visitors no longer have to click to individual news stories via the home page. (We played with the idea of splitting the news posts up, “click through for the payoff” Jalop and Autoblog style, but discarded it as more about us than you.) The good news: the galleries created a net gain. When the feature went live, we saw a net gain of 40k page views in the first day. I guess that worked out OK. But that’s from our perspective. What’s your take on the new design? And while you’re thinking about that, Justin and I devote the entire cast to the pall cast over Detroit by, well, lots of stuff.

Anyway, that’s all FoMoCo’s got to say about Donny’s exit, stage right. Of course. it’s no coincidence that Mr. Leclair is leaving the family firm at a time when the automaker’s share price is so far down the waste pipe that it’s only a matter of time before Ford gets de-listed from the stock exchange and files for bankruptcy. Then when Ford applies for a REAL bailout– none of that $25b “retooling” loan nonsense– there will surely be some kind of executive accountability proviso that would tear some big ass gashes in Leclair’s severance pay, pension, health care, free cars, jet travel, etc. Lewis Booth – who played a leading role in the successful transformation of Ford of Europe and Mazda during the past decade – will become the company’s Executive Vice President and Chief Financial Officer.

Perhaps Toyota Sales Chief Jim Lentz would like to type the words “credit crisis cars” into his Google bar. Because Jimbo doesn’t think that credit’s the main problem with a U.S. new car market that’s pretty much stopped dead in its tracks. “The vast majority of our customers are able to get approved for loans,” Jim Lentz told The Detroit News after cutting the ribbon on the ToMoCo’s new research-and-development center in Michigan. “In our case, credit is not the biggest challenge. Our biggest challenge is consumer confidence.” Ah, in our case. You know, for the automaker who could STILL buy BOTH Ford AND GM with their projected 2008 profits. That said, Lentz isn’t the only one who says you want a loan? We got loans! “‘There’s no issue at all with above-average credit,’ said Alan Helfman, owner of River Oaks Chrysler Jeep in Houston, adding that he is also still doing deals for customers with bad credit, albeit fewer than he was a year ago. ‘Hurricane Ike was a bigger problem for us than the credit crisis.'” You ain’t seen nothin’ yet Al. Or, if you have, you better get used to it. Just sayin’

“Clearly we face unprecedented challenges related to uncertainty in the financial markets globally and weakening economic fundamentals in many key markets,” GM said in a statement on Friday. “But bankruptcy protection is not an option GM is considering. Bankruptcy would not be in the interests of our employees, stockholders, suppliers or customers.” Yes, well, Barclays analyst Brian Johnson wrote a note to investors yesterday. According to CNBC, Johnson  estimated that GM would need to raise $10.3 billion to maintain liquidity of $14 billion through 2009. That figure was up from his earlier estimate that put GM’s cash-raising need at $7.3 billion over the same period.” But hey, what’s $3b between friends? Meamwhile, pressure continues to build on GM CEO Rick Wagoner and the otyher executives holed-up in GM’s RenCen bunker. After Standard & Poor’s put GM’s on Credit Watch, an the automaker’s share price dove to $4, S&P analyst Robert Schulz told Bloomberg Television this morning that the automaker may be forced to seek protection from creditors. “Macro factors could overwhelm them at some point.”

After our last exciting episode of “How Many MPGs Can Autoblog’s Sam Abuelsamid Achieve Whilst Driving an Audi Q7 TDI Across the Country Very Very Slowly,” TTAC commentator EEGeek wondered WTF I was on about. He confessed to being “genuinely mystified as to why this topic warrants so many posts.” As my pinball machine’s genie says, “This amuses me.” I mean, c’mon, what could possibly be more boring than Sam’s auto blog? Yes, I know: it’s virtually impossible to write an exciting post about a boring subject. And I have the 320 page views to prove it. But this whole Audi Mileage Marathon thing is surreal. A deadly dull PR event to promote a technology that you can’t really buy in the States, whose future is, at best, uncertain. All while the U.S. economy goes to Hell in a hand basket. Anyway, where was I? Ah yes, this particular AB post is easily the best in the series (currently confined to Autobloggreen). Two reasons. First, it’s mind-blowingly trivial. And two, it highlights an automotive journalist named Denise McCluggage. Who are you bringing with you in the A3 TDI? McCluggage. No, I said “who” not “what.” Priceless stuff. Well, for me.

I say Caruthers, what’s all this hoo-ha about the Arnage? That Whitcombe chap at Classic Driver said something about them not making it any more. That is correct sir.  Well why the Devil not? Regulations sir. Damn those Belgian swine! Consider them damned sir. What’s that? Yes. Exactly. So, should we trade in the old girl? What’s this one got that mine hasn’t? All the power of the Arnage T with the luxury of the R, sir. Two cars for the price of one. Clever. Tell me more. Well, speaking from memory, the Final Series offers hand-made waistrails with inset chrome strip, bearing recessed Bentley badges, of course. Yes, yes. Of course. Go on. A new rear cocktail cabinet and document storage trimmed in hide, and picnic tables available in a choice of three unbleached wood veneers. Waistrails eh? I had a cousin who was a waistrel. Very amusing sir. Anything else I should know? Let’s see… I believe it has twenty-inch five-spoke, two-piece alloy wheels and ‘Le Mans’ lower front wing air vents, body-coloured front and rear lamp bezels, ‘jewel’ fuel filler cap and ‘Final Series’ wing badges and polished stainless steel front door treadplates. Do I have to ask the price? If you do sir, you can’t afford it. Can I? No sir. The stock market is a little… unsettled lately. Stuff and nonsense. My money’s safe as houses! Just so sir. Just so.

I was walking the dog the other day when I heard a V8 bellow. I turned around to see a perfect example of a latter day muscle car: a Chevy Silverado pickup truck. I was surprised by my surprise. Although the Northeast represents Middle America’s automotive tastes about as well as Harvard professors reflect conservative political values, I wondered if society has reached the point where the sound of unabashed engine power has become, well, boorish. Has the average American automobile, once a symbol of status, virility and pride, been castrated? And is that a bad thing?

The S&P ratings agency has put both GM and its GMAC financing arm on its lowest possible rating: “creditwatch,” with negative implications. CNBC reports that “The ratings agency said the move reflected the rapid weakening of most of the world’s auto markets. It added that capital conditions in the sector would remain challenging for the ‘foreseeable future.'” The move follows hard on the heels of tumbling GM’s share price, pushed downwards by a weak overall market and the removal of a federal ban on “short selling” the automakers stock. The fact that Citigroup cut GM (and Ford) to “sell” ratings yesterday didn’t exactly help investor confidence, either. The next step– as predicted by TTAC’s Ken Elias— GM will be removed from the Dow Jones Industrial Average. From there it’s a relatively short trip to bankruptcy court. You know things are bad when CNNMoney/Fortune’s Alex Taylor III uses TTAC terminology. “The stock selloff effectively puts GM and Ford on death watch, and it’s easy to see why.” As it has been for many, many years.

TTAC has secured a letter from GM’s purchasing department whereby the ailing American automaker informs its suppliers that it’s changed its payment terms. GM used to pay its indirect (i.e. non-production) suppliers “second day, second month;” roughly 35 days from receipt of goods. The new agreement stipulates payment will be made at 60 days from receipt of invoice. In effect, GM’s cash position has deteriorated to the point where it’s borrowing from its suppliers to survive. The letter was sent to GM suppliers on September 26. The new policy went into effect on October first, giving suppliers no chance to plan or prepare for the change. Their cash flow is now under threat; many won’t be able to arrange the financing needed to carry the cost. If this policy is widened to direct, production suppliers, the impact could be catastrophic. [Thanks to you know who you are]

TTAC has long warned of a “run on the bank” scenario, whereby GM suppliers demand cash up front for their wares, effectively eliminating the automaker’s cash pile, terminating its ability to build cars and driving the compay into C11. Over the last few weeks, it’s become increasingly clear to anyone paying attention that GM’s cash situation– hence its ability to pay its suppliers– is terminal. Its credit rating is CCC (the U.S. and international banking system is constipated anyway) and its tapped-out available credit lines. GM CEO Rick Wagoner has publicly declared that his employer has enough cash to last until the end 2009– telling the world that they don’t have enough money beyond that point. Jettisoning HUMMER– without a buyer– has sent all the wrong messages. Selling GM RenCen HQ, again without being ABLE to, is another enormous PR debacle. And if confidence in the company isn’t low enough, and it surely it is, Wall Street has finally lost faith. GM’s stock price has fallen below $10, below $8, below $5. So, we now hear that a major, overseas GM supplier has put its foot down. I can’t tell you who, what, when or where. But there’s a deadline for payment approaching, and GM can’t take the hit. Never mind the hits that follow. More info as and when. Meanwhile, check out the Chrysler/Getrag story. Now think about GM. How many billions does it buy from overseas suppliers? German banks want government guarantees; the Germans refuse unless there’s 100 percent cash collateral. This is how things fall apart.