Why would anyone gloat about The Great American SUV's spectacular fall from grace? Why wouldn't they? As for San Francisco Chronicler Mark Morford's gleeful epitaph, the main question here is, "Dude! What took you so long?" Whatever your take on the topic, you gotta admit MM dances on the SUV's grave with pugnacious panache. "Who didn't note the beginning of the end when, five years ago, the world's worst consumer vehicle ever took its place as the poster child for all that went wrong with the condescending American ethos, the oil-sucking war-drunk Bush-mauled mind-set? Ah, the Hummer H2. Has any consumer product embodied our misguided arrogance better? The ridiculous scale, the horrible handling, the contemptible road manners, the false machismo, the Cro-Magnon design, the ability to traverse 60-degree rockslides in a hurricane even though all you ever really needed to do was run over those little concrete bumps in the Wal-Mart parking lot. Dude! Righteous!" And here's the really scary part: Detroit Free Press' Matt Helms' po-faced, mea culpa response. Has Motown's mauling put it into a terminal funk?

GM ALWAYS releases the really bad news on a Friday.The two-day interregnum gives Wall Street's money men a chance to get distracted by booze, babes and baubles. More SOP: auto analysts predictions of GM's losses are usually too high. (You might suggest an intentional disinformation campaign, but I couldn't possibly comment.) This time out, Bloomberg makes a pretty good case for, uh, what are we going to call THIS one? Holy Black Hole Friday? Anyway… "Collapsing values of leased sport-utility vehicles may force General Motors Corp. Chief Executive Officer Rick Wagoner to announce $2.3 billion in losses tomorrow on top of more than $1.4 billion that analysts have forecast." Uh-oh, here comes that damn "headwind" analogy again… "This is clearly one more headwind they have to fight,'' Lehman Brothers analyst Brian Johnson opined. "If they end leasing, it could end up being a 5 to 10 percent headwind to sales.'' To paraphrase Police Chief Martin Brody, "You're going to need a smaller, faster and more seaworthy boat." [Triskadecaphobes note: Bloomie's survey of 13 auto analysts reckons GM will report a loss of $2.41 a share.] 

At one point, GMAC was the tail that wagged the dog. The captive finance company dumped billions in profit into GM's corporate coffers. As the American automaker's decline gathered pace, GM CEO Rick Wagoner sold 51 percent of GMAC to Cerberus (current owners of Chrysler). The finance company immediately hit the rocks. Today, the gash in the hull widened. GMAC reported a net loss of $2.48b. In the second quarter. "A soft economic environment and continued volatility in the mortgage and credit markets have significantly affected results," GMAC Chief Executive Alvaro de Molina told Reuters. "Higher fuel prices and weaker consumer credit prove to be headwinds." That's a bit like calling a tornado a light breeze. We repeat: GMAC's NA leasing is heading for termination. The results included a $716m write-down of vehicle leases. And… "GMAC said it ended June with about $18 billion of SUV and truck leases in those countries on its books, out of a total $32.8 billion of leases." Expect GM to have to write-off at least three billion of lost residual values on those leases [blog coming] when it reports its financial results on, of course, Friday. Oh and ResCap, GMAC's mortgage arm, lost $1.86b in its seventh straight unprofitable quarter. If ResCap fails, it's all over bar the filing. Whether GM would be dragged under is an open question. Dark days.

Oil prices go up. Gas prices go up. American consumers switch en masse to the kind of vehicles promoted by CAFE (Corporate Average Fuel Economy) regs since 1975. They also help reduce American oil imports (and pollution) by driving 3.7 percent less over the first five months of '08. The reduced demand lowers the price of gas (OK, in theory). Everyone happy? Of course not. The same feds who want us to reduce our dependence on foreign oil are hit with a drop in federal gas tax revenue (currently 18 cents a gallon). And so the "acting head" of the Federal Highways Agency declares [via The Detroit News] that "without a doubt, our federal approach to transportation is broken." No, REALLY. "No amount of tweaking, adjusting or adding new layers on top will make things better." And he drops the other shoe. "Ray [that's MR. May sonny] said the Bush administration was in favor of a 'more progressive direct user fee' similar to a system that is currently being tested in Oregon. Under that pilot program, cars were equipped with on-board mileage counting equipment that was read by pumps equipped with mileage reader devices." Can you drop a third shoe? Sure! May also wants to "encourage" private companies to lease federal highways and maintain them through tolls. With ideas like that, what's the bet that the acting head is shuffled off-stage, and soon?

There is no question that China's leaders want the Olympics to showcase/enhance The People's Republic's international prestige and power, in that 1936 Berlin kinda way. There's also no question that Beijing's air quality sucks, Big Style. To rectify that politically intolerable situation, The Powers That Be have relocated the city's major polluter (Oy! Beijing Shougang Group! Take your steel plant and piss off!). They've also banned half the city's 3.3m vehicles. Nope. Not good enough. Mother nature is not cooperating, with high humidity, light winds and high temps. As xinhuanet.com reports, China's ready to do whatever it takes to let Olympic athletes gulp great quantities of healthy O2. "A more radical measure would be to allow only vehicles on which had the last number of the license plate matched the last number of the day of the month, effectively banning 90 percent of privately owned cars." Eurozone ministers must be green with envy! Unfortunately… "I cannot ensure whether the government will take these measures," Professor Zhu Tong, air quality adviser to the Beijing Olympics reports, sadly. "Even if the measures are strengthened, the enforcement will last only three or four days." Oh. That's alright then.

I would have simply noted the return of the "Tata Motors Hearts Daimler" Autoblog blog in an update in the original blog, but there are two things that need saying. First, thanks Autoblog for removing the slam and keeping the link to TTAC. That was big of you. Second, we don't expect perfection from anyone. Which brings me to a mea culpa. I've pulled the last Tesla Death Watch because, well, it was bullshit. Wired's original blog on the subject suggested that Roadster Number 6's crash may have had something to do with the fact that the car runs silent, runs fast. Obviously, we weren't buying that. But my post on the pile-up cast doubt on the performance of the Roadster's airbags (airbag?). After considering several of our Best and Brightest's comments, I decided that I had no factual basis to make any such accusation. Or even imply it. I apologize for my over-zealous reaction. We will, of course, monitor the situation and report the truth of the matter. 

ChryCo NA Sales Veep Steven Landry tells the media not to worry about the company's exit from the lease business. Cause every little thing's gonna be all right. Here are his four little birdies, verbatim [TTAC comments in brackets].

1) Chrysler's dealers are still able to offer customers lease financing arrangements with other financial institutions, separate from Chrysler Financial. [ED: This on the very same day Chase Auto Finance announced it's withdrawing financing for Chrysler vehicles.]

2) Current vehicle owners, Chrysler employees and retirees with leased vehicles through Chrysler Financial will not be affected by this shift, and the terms of their contract will remain in force. Chrysler Financial will continue to support and service current Chrysler, Jeep and Dodge lease and balloon-contract holders. [So no repo man… yet]

3) Should current lessees purchase their existing lease vehicle, or a new Chrysler, Jeep or Dodge vehicle at the end of their existing lease, Chrysler Financial will waive the disposition fee. Chrysler is also offering a loyalty bonus of up to $750 incremental to most other incentives with the purchase of a new vehicle. Chrysler wants to keep these customers in our family! [when a press release throws a spear (!) you know they're desperate]

4) Chrysler employee lease/company car programs for current and retired salary Chrysler employees, in which vehicles are obtained through the company, are not affected. [translation: our execs will continue to get cheap cars]

To all U.S. Dealers:

The announcement last week that Chrysler was discontinuing all leasing in the United States was big news and widely covered. You may also be aware that Chrysler had previously announced the discontinuation of incentivized leasing in Canada.  Yesterday, GMAC in Canada announced it will exit incentivized leasing on August 1. Further, it is worth noting Ford Motor Company and Honda Motor Company recently announced they were taking an impairment against their lease portfolios. Suffice it to say, numerous factors are driving up the risks and costs of leasing and therefore, it is coming under increased scrutiny across the industry.

All of this has prompted numerous inquiries from our dealers regarding GM vehicle lease business in the United States.

Obviously, current financial pressures will continue to affect our perspective on leasing. That said, while we obviously can't make guarantees, we are in the market today with competitive programs to make GMAC leasing more affordable and plan on continuing to offer this financing alternative as part of our August incentive play on '08 and '09 models (with some adjustments and exceptions).

Over the last few years and months, lease vehicles have become a smaller percentage of our sales, and we do see this trend continuing due to the relative high cost and risk compared to traditional cash or APR business. This is why we offer a balanced menu of cash incentives, APR and leasing programs to make GMAC financing an affordable alternative on almost every product in our lineup.

Rest assured we will make every effort to stay aggressive in this hypercompetitive market.
Thanks for your support.

Mark LaNeve
Vice President
Vehicle Sales, Service and Marketing

In the rush to get a blog post ready, I often skim the end of an article, after digesting the headline. At the very tail of The Detroit News' piece on the Chevy Volt non-reveal reveal of its maybe-not-so-sexy after all design, I caught this little gem: "In a related matter, GM won tax breaks in Ohio this week to build the Cruze, which will get 45 miles per gallon, at its Lordstown assembly plant." (Nice bit of cheerleading, that hat tip on the Cruze's mpgs.) So, here's the bottom line: "The automaker won a 15-year, 75 percent state tax credit worth $77.7 million. It also won a $4.4 million tax credit to create at least 200 jobs at the plant." "Won." I like that. Anyway, while state tax breaks are de rigeur for all domestic car manufacturers these days, from Ohio-built sedans to Bubba-built Bama Benzs, how is this write-off "a related matter" to the piug-in electric – gas hybrid Volt? Will they look similarly anodyne? Should we expect state AND federal tax breaks for GM's plug-in Hail Mary? You bet we should. But that's the subject of an other story. Well, at least for us. 

No small amount of the excitement surrounding the Chevrolet plug-in electric gas hybrid Volt centers on the vehicle's design. GM has hyped this "car of tomorrow" look by withholding the final design and promoting the prototype as if that's it, there ya go. This despite the fact wind tunnel testing obviated the hyped sheetmetal early in the Volt's development. Anyway, The Detroit News reports that GM is about to show the world the "real" Volt's design. Well, not the world. "GM, which will mark its centennial on Sept. 16, will let employees take a peek at the extended range electric vehicle but not allow them to use any cameras because of concerns about the competition… No final decision has been made on when and where the Volt will be revealed to employees — and eventually the public, but spokeswoman Karla Coleman said, 'It's going to be soon.'" The DetN reckons that means November's LA Auto Show. Or January's Detroit auto show. Or next Independence Day [just kidding, I think]. And get this: "The automaker recently showed a near-production version of the Volt to a focus group in southern California. 'It was very positive,' Coleman said. 'It's not like we can change the design at this point, but we want to hear feedback about how we're doing.'" Yeah, that makes sense. [NB: TTAC will pay $1000 for exclusive rights to the first photo of the finished Chevy Volt.]

Just a little "Inside Baseball" stuff here folks. Those of you who aren't interested in a throw-down between the Simon Cowell of the autoblogosphere (us) and the Paul Abdul (Autoblog) are free to wander about the cabin. Autoblog's Noah Joseph was kind enough to link to TTAC for a post about Tata Motor's rumored resurrection of the once-storied Daimler marque. I mean, the Maserati-loving, Italian junketeering scribe (just sayin') could have followed his colleagues' lead and simply linked to our source for the story; following our news agenda without alerting their readers (most of which never darken our server) that they'd done so. All's fair in love and linkage. But no. Joseph felt compelled to take a shot at TTAC. "NOTE: I didn't know what our policy was about sourcing TTAC with all their flame-throwing, so feel free to remove the via from below." Howzzat? The site that allows more flame-throwing in its comment section than ever produced by the Silent Scope's heavy accuses US of incendiary behavior? Anyway, cool! Bring it on! But, uh, how does an Autoblog reader remove an attribution? Is it one of those "don't think of a pink elephant deals?" UPDATE: AB's pulled the post. 

Breaking news from TTAC contributor Samir Syed, who just finished lunch with Canadian Auto Workers President Basil "Buzz" Hargrove. In a stunning admission, the union boss said he told GM CEO Rick Wagoner that a bankruptcy filing was inevitable. But wait! There's more. Buzz reckons ALL of Detroit's automakers are going down. "I don't see how they can survive in their current form." Samir's full report on his chin wag with the outgoing union boss will appear on Wednesday's TTAC editorial page.

Fitch Ratings has access to information about Chrysler's finances that neither you nor I nor a whole bunch of really powerful people can access. Now that Chrysler's eliminated leasing, Fitch doesn't like what they see. They've downgraded Chrysler from B- to CCC, with a negative outlook. Not to get too technical, it's yet another indication that Chrysler has one foot in the grave. Or, if you prefer, MarketWatch reports that "The downgrade reflects Chrysler's restricted access to economic retail financing for its vehicles, which is expected to result in a further step-down in retail volumes. Lack of competitive financing is also expected to result in more costly subvention payments and other forms of sales incentives. Fitch is also concerned with the state of the securitization market and the ability of the automakers to access this market on an economic basis over the near term, given the steep drop in residual values (particularly in SUVs and pickup trucks), higher default rates, higher loss severity being experienced and jittery capital markets." Cash burn? Oh yeah, cash burn. "Fitch expects that Chrysler could reach minimum required levels to finance ongoing operations in the second half of 2009. This could be accelerated in the event that suppliers or retail customers become concerned with Chrysler's financial condition and restrict trade credit or reduce retail purchases." 

Let's start with the basics. It's not really a good idea to park a dummy cop– I mean a REAL dummy cop– in a genuine police car to scare motorists into slowing down. It may be effective, but once motorists realize the cop isn't real two things will happen. First, they'll be pissed off at being "fooled"– which does nothing for respect for the law. Second, they'll begin thinking real cops may be dummies (REAL dummies), and speed past. Looking closer at this story [via the San Mateo Daily News], it gets worse and worserer. In this case, the cops are allowing a civilian named Anna Kuhre to position the inflatable cop. Training schmaining. What about road safety? And get this: they allow Kuhre to pick-up the squad car from the station and drive it to its new location. Background check my ass. Why in the world would you risk unauthorized use of a police car? And again, what's the impact on safety of the general public thinking that cop cars are being driven by neighborhood busy-bodies? What if a criminal caps her ass? Oh wait, did I mention that Kurhe is the first member of a planned Neighborhood Traffic Corps, complete with radar guns (will the resulting "warnings" go to insurance companies?). Hey! Here's an idea: let the police do the policing. And if you really want to make a stink about all this, it's clearly a case of racial discrimination! [thanks to David Holzman for the tip]