Regular readers will know that we’ve taken Washington Post carmudgeon Warren Brown to task for his shameless Motown cheerleading up to and through the federal bailout. You may have also noticed a huge disconnect between Warren’s blind bailout boosterism and his paper’s entirely skeptical stance on federal intervention in the U.S. automotive industry. In an ironic twist of fate, Warren’s decided to take the WaPo’s latest buyout offer—and do so with all of the grace displayed by his bailout boosting pals in The Motor City. He leaves the paper spilling vitriol all over his colleague’s rejection of Uncle Sam’s “investment” in Government Motors.
The question/headline comes to us straight from Automotive News [AN, sub]. Is there ANYONE who DOESN’T see this as a possibility? Probability? Certainty? Done deal? Meanwhile, I love this riff from AN‘s unnamed writer: “Two decades ago, Texas tycoon Ross Perot dubbed his fellow GM directors ‘pet rocks’ who sat silently beside then-CEO Roger Smith. More recently, the board was considered too close to former CEO and Chairman Rick Wagoner, who was ousted by President Barack Obama’s administration in March after the company lost tens of billions under his watch. New blood for GM’s board may be a welcome thing.”
USA Today is in the thrall of . . . the Ford Escape Hybrid. As is the President of these here United States, who traded his gas-hungry Chrysler 300C for the gas – electric trucklette. No surprise, then, that we’ve heard rumors of shortages. Well, not rumors, exactly. More like an open admission by FoMoCo’s El Presidente del Americas. “We are constrained by the amount of components, including batteries, that the supply base can provide us,” Mark Fields said in December ’08. Same spin again in January ’09, via a Blue Oval Boy on Edmunds. The scuttlebutt: Ford loses money on every Escape Hybrid they sell; so it sells as few as possible. Of course, that doesn’t stop The Glass House Gang from using the vehicle to earn brownie points with the MSM . . .
Should Californians snitch on drivers who avoid the state’s motoring taxes by driving around on out-of-state plates? Yes! says the California Highway Patrol, who’ve established the Californians Help Eliminate All The Evasive Registration Scofflaws or CHEATERS program. The OC Register reports (in its own passively constructed sort of way) that it’s not about the money. Just kidding. It is. “Last year there were fees collected on 3,383 out-of-state license plate violations, which resulted in the collection of more than $1 million in fees, or an average of $297.58 per case, according to the CHP. Since the start of the program in 2004, $4 million has been collected in fees . . .
No, I don’t mean that Lemonheads singer Evan Dando is suing GM for forcing him to write the song. I mean that Dando is taking the zombie automaker to federal court for violating his copyright on The Lemonheads song “It’s a Shame About Ray.” Dando’s lawsuit alleges that the dirge was re-recorded and included in a 2008 series of TV campaign for Chevrolet and Buick—without paying him bupkis. It’s a strange time to sue GM for anything, as chances are that any damages would be buried with the “old” GM, leaving New GM to walk away humming something a lot more cheerful. [original questionable recording replaced with ad in question]
Provided, that is, the Supreme Court of the United States (SCOTUS) turns down Indiana’s request to overrule the sale of assets from Old, Crap Chrysler to New, Italian-controlled Chrysler. This after the U.S. Appeals Court told the gearbox-factory-jilted state’s lawyers to piss off. Or, more specifically, “You can’t wait for a better deal to come in from Studebaker.” Wait schmait; the three judges returned their decision about 10 minutes after Indiana’s lawyers finished their arguments. “There’s one more stop on the train,” Tom Lauria, a lawyer for the Indiana pension funds said, after the court’s ruling. Yes, well, New Chrysler left the station a while ago. One of our Best and Brightest has an interesting take on this (after the jump), but again, I reckon this is a done deal.
Not much info here, but the story’s major thread is clear enough. After discovering that Massachusetts Congressional Representative Barney Frank won a reprieve for a local GM operation, Michigan Reps are looking for some of the same non-action for their constituents. The Detroit Free Press is uncharacteristically tight-lipped (uninformed?) about the who, when and where—although we know the what and why (staying elected). “Michigan members of Congress summoned the chief executive of General Motors Corp. to a meeting next week after the company bowed to pressure from U.S. Rep. Barney Frank and delayed the closing of a parts warehouse in his district.” The Detroit News is more forthcoming, indicating that it’s the entire Michigan congressional delegation asking for various stays. This after Dingell’s open letter to Fritz on the first . . .
So I’m down to considering three cars for my next purchase. As my soon-to-be commute is something like 7 minutes, I’m not overly concerned with putting an ape-load of miles on whatever I buy. My heart is focusing in on three cars: 1) pre-2006 Mazda Miata, 2) 2005 or so MINI (although I’m slightly considering a lease of a new one, just because I don’t intend on driving the wheels off of one), and 3) a 2006 Civic Si. I’ve driven three Miatas and while I desperately want to love this car, each test drive (two Mazdaspeeds and one LS) has left me disappointed. They are so very jittery and nervous. I have driven two MINI Cooper S and am head over heals as to how they felt driving them, but I’m truly concerned regarding reported reliability. The Civic Si would seem the best compromise in terms of performance and reliability. Head says Civic Si, heart is leading towards MINI (I have yet to drive the “base” Cooper. I don’t really need 168 HP for a five minute commute). What say the B&B?
Thanks to Michael Karesh at TrueDelta.com, we tend to take everything J.D. Powers’ mob puts out with a HUMMER-sized pinch of salt. Even so, anyone who thinks that New, Fiat-controlled Chrysler is going to reverse the zombie automaker’s rep for producing adulterated crap should consider taking a hit of today’s J.D. The company’s 2009 UK Vehicle Owners Satisfaction Study rates Fiat dead last. Below Chrysler. Talk about the blind leading the lame . . . .
And there I was, calling “profit” GM’s new “Voldemort.” Yesterday, Government Motors’ federally-funded advisers used the ‘p” word in documents filed with federal bankruptcy court. Evercore Partners predict that the zombie automaker will return to life (though not as we know it) by 2014. What’s more, stock in New GM will be worth $48 billion straight out of the gate. Hang on. I’m lousy at math (as you know). But if the United States government owns 60 percent of a $48 billion New GM, our share on day one would be worth $28.8 billion. So, if the feds dumped those shares, we’d “only” lose $19.2 billion. SELL! Of course, it doesn’t work that way. But then, I’m betting dollars to donuts (heads-up: it’s national donut day) that it won’t work the way Evercore Partners says it will, either. With a little help from the Detroit Free Press, let’s look at their numbers . . .
You, TTAC’s Best and Brightest, knew it was going to happen: that unfortunate intersection of business and politics, where the taxpayer-supported GM would be forced by its new masters to place the latter ahead of the former. In other words, brain dead zombies are easily led. The Hill reports that Massachusetts Congressional Representative Barney Frank has “convinced” GM to keep a parts operation in his district open for business. “Frank’s staff said the lawmaker spokes with GM CEO Fritz Henderson on Wednesday and convinced him to keep the Norton, Mass., plant open for at least 14 months.”
Those 789 Chrysler, Dodge and Jeep dealers that were cut loose by Chrysler as a part of its bankruptcy and restructuring plan have until June 9th (next Tuesday) to part with their remaining inventory.
Because of the dealership contract that they signed, dealers aren’t allowed to sell off the cars once the contract expires. And because Chrysler is in bankruptcy protection, it doesn’t have to buy the cars back either.
Chrysler has said that it will help the 789 dealers move their inventory to the remaining Chrysler dealerships, but it won’t give any guarantees on the amount of money those dealerships will have to pay for the remaining vehicles. And considering the circumstances, the terminated dealers don’t exactly have much faith in their parent company right now.
As a result, dealerships are slashing prices. CNN visited Pohanka Chrysler-Dodge in Leesburg, Virginia, where the dealership has slashed prices on some models by as much as 40 percent. A brand new Dodge Nitro, which lists for $29,170 now has a sticker price of just $17,510.
“It’s our obligation to be open and transparent in all we do to reinvent GM, particularly with the American taxpayer as our largest investor.” That was the second sentence out of GM CEO Fritz Henderson’s mouth in sworn testimony before the U.S. Senate re: GM’s dealer cull. When pressed by Senator Rockefeller, Henderson reluctantly promised to release the list of all the dealers sent their walking papers by the corporate mothership. And then . . . nothing. In fact, behind the scenes, GM is desperately trying to quarantine/suppress the information.
As predicted, the feds have bailed out bankrupt parts maker and former GM division Delphi, through GM, to the tune of $2.5 billion. That doesn’t include the $250 million direct subsidy from American taxpayers. On other hand, GM no longer needs to buy those five Delphi factories GM as previously reported. The cash for the Delphi buyout arrives via one of those “follow the money” deals, as the Wall Street Journalreports. “GM will provide more than $2.5 billion of the $3.6 billion necessary for Beverly Hills-based buyout firm Platinum Equity to gain control of Delphi, according to a person familiar with the matter . . . Under the terms of the transaction, Platinum is expected to invest no more than $750 million, according to the person familiar with the deal. GM would provide the balance in financing. Those financing commitments may or may not be drawn upon in the future, depending on how Delphi performs. The terms of the GM loans couldn’t be learned.” So much for GM CEO’s promise of transparency at yesterday’s Senate hearing.
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