GM's turnaround hoe-down– complete with disastrous May sales numbers– is less than 24 hours away. Ahead of that blessed event, the General's generals are busy shoring-up the company's defenses. Today's preemptive announcement: Chevy's getting a new small car! The General's spinmeisters chose Automotive News [AN, sub] as the PR vehicle of choice: "General Motors will unveil a Chevrolet compact car at an auto show this fall, with production slated to begin early next year, say sources familiar with GM's product program." Whoa! Yes, this pint-sized Hail Mary will be a Delta [platform] queen built in Lordstown, Ohio. The "we don't know if it'll replace the Cobalt" compact car will use GM's new turbocharged 1.4-liter four cylinder global engine– shared amongst Chevrolet, Pontiac, Saturn, Opel and Daewoo. Ever the unquestioning GM shill optimist, AN predicts that "the Lordstown plant could build cars for export." Meanwhile, GM's considering bringing the Beat minicar stateside. Pysch! No really. "It isn't definitively on there as a go product," says AM's editors source, "but there is a lot of inside chatter and it's on the consideration list." 

The internets are abuzz with the "revelation" that Chrysler-owner Cerberus has sold off more than half of its investment in the ailing American automaker and lender GMAC to about 90 other investors. The only problem with this story: timing. As Reuters puts it (and The Detroit Free Press neglects to mention) "The timing of those transactions was not clear." IIn other words, it's a non-story. But not completely. For one thing, Cerberus' limited exposure to the two companies makes it easier for them to bail; it explains Cerberus' stated decision not to top-up GMAC with the $600m it needs to stave-off bankruptcy. Second, the story's original source, The Financial Times, paints an unintentionally humorous portrait of unbridled greed. "Most of those joining the GMAC deal in 2006 did not have much time to do their due diligence. Instead, Cerberus invited about 50 hedge funds to its Park Avenue office for a presentation by its chief administrative officer, Seth Plattus. 'It was a 'trust me' kind of trade,' says one investor, who bought a small piece of GMAC. 'You had no time to do real due diligence. But it was a hot deal and everybody wanted in as part of the gang.' Many of the people who took part in the deal were friends of Steve Feinberg, founder of Cerberus, and said they invested as a sign of faith in him… 'There was an element of the greater fool theory to it.'"

UPDATE [via Automotive News] "Cerberus has not sold any equity in Chrysler," said the Chrysler official speaking on condition of anonymity. "There are always co-investors at the time of the transactions so when they originally purchased 80.1 percent of Chrysler, there were co-investors at that time. They still own 80.1 percent."

The DAY AFTER a team of Honda-promoting skydivers performed a formation for a live UK TV advertisement, the plane used for the stunt has crashed. The accident killed the pilot and a skydiver. According to The Daily Telegraph, a total of ten skydivers attempted to exit the stricken plane as "one of the aircraft's wings snapped off and it plunged to the ground, where it burst into flames." The paper also reports that "Honda and Channel 4 said they did not believe any of the skydivers involved in the accident had taken part in the filming of the advert." Clearly, our warning that the stunt could prove a human and PR catastrophe had a firm basis in reality. Whether or not the tragedy will prevent future live stunts remains to be seen.

"Some people may buy E85 because it burns cleaner than gasoline, while others may want to reduce the country's dependence on foreign oil," American Automobile Association (AAA) spokesman Eric Escudero told The Denver Post. "But to succeed, the fuel needs to offer drivers an economic incentive, something it has failed to do even after the surge in gasoline prices." Yes there is that.The trip-A is now monitoring and listing E85 prices nationwide. And here's the really sucky part (if you're an ethanol producer): they're adjusting E85 prices to take into account its relative lack of energy efficiency. "After adjusting for its lower energy content, E85 cost an average of $4.32 a gallon in the U.S. on Friday versus $3.96 for a gallon of regular unleaded gasoline." Oh dear. In fact, E85's rep is now so bad that the National Petrochemical & Refiners Association is playing pig pile on ethanol. "E85 is not the silver bullet, it is the red herring," claims Prez Charles Drevna. No really. "U.S. taxpayers subsidize ethanol to the tune of 51 cents a gallon, and the fuel provides significantly lower mileage. If that E85 is not 25 percent to 33 percent less than… regular gasoline, you are getting snookered." Snookered? I think there's a better word for it.

As readers of our General Motors Death Watch know, GM e-rotweiler and junket dispenser Christopher Barger thinks TTAC is WAY too negative. At least we're not double negative. Check out the Director of GM Global Communications Technology's response to a CNBC poll. Phil LeBeau asked readers to choose one of four culprits– management, unions, SUVaphilia or Toyondissan– for GM's sagging stock price and rapidly declining fortunes. Barger sent a "now hold on a god damn minute" email to LeBeau which tells us exactly how GM's spinning their [death] spiral: it's the economy, stupid. "In fact, these economic headwinds are taking their toll on virtually every American business and industry — and consumers from all walks of life too. Singling out one company for criticism when the entire economy is struggling seems a bit unfair, don't you think? It's kind of like blaming one person for being out of work when unemployment is on the rise." (Tell that to Honda.) There's a lot of B.S. to wade through, from GM strengthening its brands, to the fact that the automaker sells eight (count 'em eight) hybrids, to "our products can go toe-to-toe with anything on the market today." Barger's central message: fuck the past. "I think it's more constructive to look forward and to try to continue improving things, don't you?" As the old saying goes, those who don't learn from history have a bright future in corporate PR.

We've been saying 2010 is the domestic industry's Holy Grail since 2007. Official confirmation comes at the bottom of a Detroit Free Press article entitled "Detroit 3 ready to focus on future." In fact, the TTAC narrative is all over this thing. "U.S. automakers didn't really adapt after Hurricane Katrina in 2005 sent gas prices above $3 a gallon and consumers started changing their purchasing habits — and it's costing them now. 'That's enough time to change, said Mark Warnsman, an auto analyst for Calyon Securities.'" And now… "All eyes are on 2010." Yes, "If the automakers can make it to the end of the decade, they should at least have a chance to start making money again." If? At least a chance? Seems Detroit's cheerleaders are running out of pep. "By 2010, economists are forecasting recovery in the U.S. housing market and that the economy, hopefully, will be back into growth mode… But after seeing record losses at Detroit's public automakers — $50 billion at GM over the last three years, $15 billion at Ford over the last two — optimism about 2010 is guarded. 'That's a make-or-break year,' economist at the Center for Automotive Research Sean McAlinden said. '2010 is the big question mark.'"

The Black Dog of has been growling at my door. I'm not sure if it's the constant site crashes. Or TrueDelta extraction (a misplaced cure). Or the page view counter getting stuck. Or the RSS feeder developing anorexic. Or the enormous discrepancy between where we are and where TTAC could be. Needs to be. OCD is a cruel taskmaster. As is my passionate belief in this website's mission. I know I should just kick back and cash my paycheck and not give a shit. But that's not my nature. I didn't start TTAC to make money. And I'm not going to give up on it for money, either. So I'm fighting for our right to party. All I ask is your patronage and patience. Come Hell or high water, I will not let you– or myself– down. Meanwhile, I want to thank Ford for lifting my spirits. I applaud Ford Motor Credit's decision to give its tornado-ravaged Iowa customers a couple of months grace from their car payments. I could say something cynical about this, but I won't. Sometimes, you've gotta count your blessings and let it be.   

I'm not sure if former Car and Driver editor and occasional TTAC contributor Stephan Wilkinson has changed his mind about the whole QOTD deal. Originally, this site's spiritual mentor dismissed our vox populi as the worst kind of page view pandering. (The fact that our counter's broken should put paid to that idea.) I guess Stephan's ameliorated his antagonism somewhat; he recently suggested a QOTD about the Best and Brightest's passengers per vehicle. Given the gas, political and environmentally-conscious temper or our times, it's a highly relevant inquiry. Miles/CO2 per passenger must be a better measure of efficiency/environmental responsibility than what kind of car you drive. Fully loaded 'Sclade vs. one-up Prius? That ought to get you going. That said, I can't imagine a boatload of Cadillac Escalade passengers all going Dutch on a tank of fuel. In fact, I don't think I've ever seen seven people in a 'Sclade– although the TV ad makes special mention of the luxobeast's capacity for human cargo. Personally, I've started driving the Boxster to the grocery store instead of the Odyssey. I can't tell you how much better I feel about myself. So, how about you? How many people travel in your whip? Have you upped the head count since gas crested $3 a gallon? Altered the vehicle of choice? 

If you're one of those people who believes GM has a coherent turnaround plan, or in fact believe in this unspecified, entirely elastic strategy for a return to profitability, you might want to take note of the fact that General Motors is locked in the PR version of Groundhog Day. As we've pointed-out many times, GM PR always saves its bad news for a Friday and/or makes major announcement on the same day it gets hit with disastrous numbers. This coming Tuesday (June 3) will be no exception. Automotive News [AN, sub] reports that GM CEO Rick Wagoner will reveal his new new turnaround plan (cut!) on the same day the company's May sales figures hit the wires. Amidst a predicted 10 percent overal U.S. new car sales drop, "analysts expect sales to drop 22 to 25 percent at GM and as much as 22 percent at Ford. Sales at Chrysler are also expected to be down by more than a fifth, according to analyst forecasts." As bad as those numbers will be, they won't be so bad for the transplants. Honda will post a gain, and "Toyota Motor Corp. is expected to reach a record market share… expected to reach 18.1 percent, up from 17.3 percent in the same month last year and 17.5 percent from last month." In other words, GM– and the rest of The Big 2.8– are losing sales and share. Gas prices, market shift, down economy, great sales in Russia; yada yada yada. As some point, the spin will stop. 

Filling-up the Odyssey the other day, I was surprised when the wallet-drainage started slowing down at $48. Of course, I knew what wasn't coming: anything more than $50 worth of gas. As an a tax paying member of the world's most pampered people, I found it incredibly annoying that I had to restart the entire sales process for an additional $8. As a free marketeer, I found it bizarre that a large corporation (Shell) would make it hard for me to spend MORE money. Turns out it's the credit card companies– Visa and Mastercard– who are limiting millions of gas purchases to $50 in some states, $75 in others. As USA Today points out, even $75 won't do it for many fuel hungry behemoths. "At $4 a gallon, $75 buys 183/4 gallons. A 2008 Toyota Sequoia SUV's tank holds more than 26 gallons, a Chevy Avalanche sport pickup totes up to 311/2 gallons, and a 33-foot or longer Winnebago Adventurer RV hauls 75 gallons." While environmentalists may have little sympathy for the Devil, the credit card companies claim the limits protect their customers from fraud. Sure, in the same way they write-off fraud rather than upgrade members' card security with photo-embedded plastic or thumb print biometrics. Profits before people? No way.

[Can anyone tell me if their TTAC RSS feeder is working?] 

"Agriculture Secretary Edward T. Schafer is preparing to walk into a buzzsaw of criticism over American biofuels policy when he meets with world leaders to discuss the global food crisis next week." Ouch! Clearly, The New York Times is through pulling is punches on America's corn-fed bio-fuel bonanza. The majority of their article "Food Report Criticizes Biofuel Policies" is dedicated to a report criticizing biofuel policies (strangely enough), But before the knife is twisted ("The Agriculture Department’s own longtime chief economist, Keith Collins, who retired in January, said that ethanol was the 'foot on the accelerator' of corn demand), Secretary Schafer wants his constituents (corn growers) to know he's got their back. By his department's reckoning, biofuel production accounts for "only" two to three percent of the increase in global food prices, while reducing crude oil consumption by a million (a million!) barrels a day."We think that policy-wise in the United States of America — and certainly in the rest of the world — as we see the price of oil and petroleum escalate dramatically beyond anyone’s imagination, that one of the ways to deal with that is to produce biofuels which are renewables, better for the environment and help lower that cost." So E85 reduces gas use (although it increases gas use) and helps the environment (although it hurts the environment). Let the price supports begin! Oh wait…

CNNMoney reports that the price of crude oil may finally have spiked– you know, if you look at it that way. "Crude oil prices retreated into the $126-a-barrel range Wednesday after dropping almost $5 a barrel from intraday highs to settle at $128.85 on Tuesday." While CNN is almost happy to make the link between dropping crude prices and "relief at the pump," it's worth noting, uh, what they note. "Gas prices have been pushed to record levels in the past year on the back of record oil prices. As the price of crude oil has more than doubled, gas prices have increased by almost a quarter." Anyone see an ominous disconnect there? Anyway and meanwhile, gas prices hit record highs for the 21st day in a row. "The nationwide average for a gallon of regular unleaded rose to $3.944, up 0.7 cent from $3.937 Tuesday." Detroit shouldn't pop the cork on those SUV-shaped champagne bottles just yet. Most analysts reckon that increased demand worldwide will prevent the price of crude from returning to last year's levels. Ever.

When fans of bio-diesel first claimed they were running their [former] oil burners on "free" fuel– restaurants' abandoned cooking oil and grease– we predicted the fat bubble would burst. And so it has. The New York Times reports that "yellow grease" has risen from 7.6 cents per pound (2000) to 33 cents a pound, or almost $2.50 a gallon. And so we delve into the murky– or is that cloudy?– world of grease theft. The Old Gray Lady weaves a strange tale of late night Burger King raids, private dicks working for grease collection and rendering companies, shady environmentalists, and (as always) befuddled cops. Oh, and a lawyer who specializes in defending the "grease rustlers." "Once you put something in the trash, it’s abandoned property,” said Jon A. Jaworski, a lawyer in Houston who represents accused grease thieves. “A lot of times, it’s not theft.” And a lot of times it is. The unsolved 2,500-gallon Burger King heist chronicled at the outset was worth more than $6,000 on the black (yellow) market. There's only two elements missing from this tale of low life and high fat: the drivers who buy the stuff that "fell off the back of a dumpster" and government intervention. How long before the liquid gold is regulated and taxed? Take our word for it: not long at all. 

TTAC has confirmation from three trusted, independent sources that Chrysler is delaying payments to its suppliers– to the point where certain suppliers have refused to ship parts until the embattled American automaker settles its bill. Even so, we are filing this report as Wild Ass Rumor because none of these sources will go on record. (Hardly surprising consider the economic self-interest involved.) It is equally true that there's no way for TTAC to accurately gauge the full extent of Chrysler's delayed payment situation. IF, as we suspect, Chrysler's owner Cerberus is readying to file for C11 during its company-wide summer holiday, or, as some suggest, preparing for the long-delayed "strip and flip," delayed payments would indicate, at best, ChryCo cash flow problems. We invite both Chrysler and its suppliers (guaranteed anonymity) to use the comments section below or contact us via email to clarify this issue.

The Alabama Press-Register's headline: "State invests in ethanol, but results mixed." Invests? Mixed? You guessed it. "State agencies have doubled purchases this year of E85, an ethanol-gasoline mixture, citing its production from domestic sources and ever higher costs of conventional gasoline." In practice, "the state Department of Transportation paid more per gallon for E85 than it did for gasoline in five of the 10 months between May 2007 and March of 2008." So how much is this boondoggle costing Yellowhammer State taxpayers? "In March, E85 cost the department $2.64 a gallon, while gasoline cost $2.46. Despite the higher price, state records show DOT bought an additional 4,224 gallons of the mixture that month, an increase of nearly 40 percent." Even without the 40 percent increase, that's a $10k E85 surcharge for five months' corn juice. The executive director of the Alabama Clean Fuels Coalition blames… gas prices. "In order to get any product anywhere in this country, it takes a truck or engines," said Mark Bentley. "And currently, those engines are fueled by petrodiesel, which is currently tied to price of gasoline." Mr. Bentley called for Alabama-based E85 plants. So far, only one company has so proposed.