Bankruptcy is more than a financial reckoning. It’s a psychological way-point, from “we’re doing our best” to “re-do.” Let’s call that middle point “we blew it.” That’s not too harsh, is it? I mean, if Chrysler and GM didn’t blow it, they wouldn’t be bankrupt. Oh wait; they’re not bankrupt. Which means Chrysler and GM don’t have to face the otherwise inescapable fact that they NSFWed-up. Of course, they should face reality. You know: the first step to recovery is admitting you have a problem. But as long as they’re supported by enablers, they’re happy to stick with “we’re doing our best”– even though their best is nowhere near good enough. Uncle Sam’s support I get. But the media’s participation in this delusional denial is unconscionable. I speak specifically of, you guessed it, The Detroit News.

Although that rev segueway is seriously annoying.

The Detroit News is reporting that Presidential Task Force on Automobiles (PTFOA) is ready to float some trial balloons—I mean, announce part of its master plan for “saving” the U.S. auto industry. The News reckons the PTFOA will place the cart before the horse, revealing its bailout strategy for the domestics’ suppliers sometime this week. Then they’ll unveil the new new bailout arrangement to fund GM’s new new new new new new new turnaround plan and, believe it or not, Chrysler’s mythological recovery strategy. Meanwhile, Saturn’s keepers are busy pre-stretching the limits of credibility.

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Yes, I’m going to open this can of worms. Detroit News columnist Daniel Howes did so this morning—although his thoughts on Bonusgate somehow didn’t make it to the paper’s homepage. Howes’ main argument: how can the Obama administration claim that they had to pay $165M worth of executive bonuses because they were legally obliged to do so—when they’re happy to force Chrysler and GM to renegotiate legal contracts with the unions and bondholders as a precondition for double dipping at the bailout buffet? And you know what? He’s right, even if he somehow forgets the seven million [taxpayer] dollars ChrCyo and The General are spending for lobbying our legislators and, by extension, commander-in-chief.

Perpetuating this double standard — one set of rules for troubled Wall Street firms with a demonstrable record of fat campaign contributions and another for automakers with union labor and little clout in Washington — is arbitrary, indefensible and deserves the backlash buffeting Congress and the Obama administration.

And then, of course, Howes goes too far.

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On Thursday, Audi of America president Johan de Nysschen will meet with journalists to explore the question “how has the international recession impacted Audi and the luxury segment?” The obvious answer: sinking sales. The not-so-obvious conundrum: what next? How does a luxury brand position itself for survival when class war is breaking out all over? Of course, the professional pundocrats aren’t using “C” word just yet. The euphemism du jour for the “where’s MY bailout” anger that may or may not be sweeping the nation– as taxpayer-owned AIG execs collect their bonuses and Bernie Madoff’s wife shelters in a penthouse funded by her husband’s ill-gotten gains– is “vengeful populism.” Whatever you call it, Audi and its luxury competitors are sitting in the cross-hairs of growing anti-conspicuous consumption. The recession/depression is going to kick the NSFW out of them.

Yes, you read it right. Over a nice little breakfast with the good folks at The Christian Science Monitor [reported by The Detroit News], Rick “Bankruptcy Equals Death” Wagoner said a GM pre-packaged Chapter 11 might work. Apparently, GM has “carefully studied” the idea of a 30- or 60-day, pre-packaged bankruptcy and “pointedly didn’t rule it out.” The bottom line: “It could work. It might not work.” Yup, those are the two possibilities all right. Wagoner also “revealed” that “There is no (debtor-in-possession) financing other than the U.S. government because my administration has systematically destroyed or sold off all of General Motors’ assets.” Just kidding, although Wagoner did admit Uncle Sam was the only DIP-shit in town. Oh, and Wagoner also added that a bankruptcy would “likely cost the government far more money than the Detroit automaker has sought.” Likely? How likely? Numbers? And they say a Harvard MBA isn’t worth the paper it’s printed on. Speaking of collegiate carousing, “Wagoner said the company would pare back its dealers by 25 percent in a ‘measured thoughtful aggressive way’ to ensure it didn’t hurt sales. ‘This isn’t a meat cleaver deal.'”

Regular readers of this site know that I’m math challenged. To paraphrase Blanche Dubois (tragic heroine, not TV psychic), I have always depended on the calculations of strangers. Which is one reason I NEVER sign ANYTHING at a dealership without having my good friend Steven Lang give it the once over. Of course, that’s looking at the car sales paperwork from the customer side. Pity the poor Chevrolet dealer. Given the farrago of sales incentives, discounts, cash-back deals, financing offers, etc. how do they set a price? Seriously. Even a dealer who wants to give his customer the best possible deal has the devil’s own time establishing what that actually means. Check out this Top Secret(ish) Powerpointery and tell me that Roger Smith’s no-haggle Saturnalia wasn’t the way forward. Oh well, too late now. And, as we reported last night, there’s more post-bailout deals a brewin’. Good luck with that. [Thanks to you know who you are.]

TTAC reader Chris writes:

Regarding my 2007 Sonata 2.4L, 5-speed: can I use 0W-20 in place of 5W-20 and keep the warranty intact?

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There are a lot of places you’d expect to find a defense of trickle down economics (the idea that wealthy people create jobs for people further down the food chain). National Public Radio is not one of them. And yet there it is: the publicly-funded [via rich people] bastion of liberalism ran a piece thanking Mr. and Mrs. Moneybags for . . . buying the Tesla Roadster. Otherwise, Tesla wouldn’t have the capital to build cheaper Teslas for the rest of us (providing you exclude their applications for federal funding, paid for by rich people). “Using money from rich customers to fuel mass-market production is a fairly common business model,” NPR’s reporter reports. “Think of the Tesla Roadster as the $2000 cell phone of 1985,” Tesla spinmeister, Diarmuid O’Connell, suggests helpfully. Is it a coincidence that the DeLorean-lauding movie Back to the Future came out that year? Probably. Anyway, “O’Connell says we take for granted our easy access to cheap products, and forget the role of the rich in making it happen. He says we wouldn’t enjoy such low airfares today if it weren’t for the initial wealthy travelers.” Me, I worship first class passengers. Anyway, big news! New car!

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The Financial Times carries the crazy news that General Motors is planning to celebrate its next bailout check by throwing more money–-your money—on the hood of its moribund metal. I repeat, GM wants to increase sales and reduce profits by using your taxes to reduce its prices to sell its cars that it wouldn’t be making–-couldn’t be making—if GM didn’t get some $30 billion of your tax money. This would [almost] explain GM’s otherwise inexplicable decision to increase production during the second quarter by 45 percent: they really do believe they’re going to sell a shit load of cars. Which they might if they slash, say, 50 percent off sticker. Hell, why not? It’s not their money. As TTAC, commenter lw points out, “the new owners are not interested in profits.” Wait! Don’t tell me! GM announces it’s “Thank You America” sale.

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Inside sources reiterate what we’ve heard before: the mission critical battery for GM’s plug-in Hail Mary hybrid gas electric Volt is not achieving its performance requirements. Not even close. In fact, we’ve heard that the battery is failing to meet ANY of its targets: range, recharge time, battery life expectancy, cold weather performance, cost, nada. That said, this is a rumor [see: question mark above]. Therefore, we invite representatives of GM to contact TTAC (robertfarago1@gmail.com) to spin the story until we pass out from dizziness—I mean, assure GM’s many stakeholders that mass production of the single most important vehicle in their portfolio—if not the last—will begin on the date promised. Wait, what was that date again?

OK, guys, feel free to get it out of your system. No flaming TTAC policy switched off for this post. Yes, I know what you’re thinking: TTAC always finds the dark cloud outside the silver lining. Here we have unexpected good news: in V6 form [not shown, ’cause it’s rental car fodder], the new Camaro gets 29 miles per gallon highway. As The Detroit News giddily points out, “The brand initially estimated its highway mileage at 27 mpg but had provided a conservative estimate, said Troy Clarke, GM’s president of North America. ‘We did error on the side of caution,’ Clarke said. ‘This is at least three miles per gallon (more) than the (Ford) Mustang.'” When did error become a verb? See how that works? If TTAC isn’t criticizing GM’s turnaround plan—such as it isn’t—it’s trying to kill the ailing American automaker via death by a thousand cutting remarks. Well, two things: 1) GM should have never wasted money building this car and 2) Is anyone going to buy a Camaro over a Mustang or Challenger because the Chevy’s V6 gets better mileage? Oh, and 3) there’s something really creepy about this quote: “‘We need to seduce new customers,’ Peper said. ‘We feel (the Camaro) will have a very broad reach.'” Is that a reach around? Hey, it had to be said. OK, flameproof suit on. Gopher it.

Credit Suisse First Boston (CSFB) has had a look at Chrysler, Ford and GM inventories vs. the Seasonally Adjusted Annual Rate of Sales (a.k.a. SAAR), and it’s even uglier than we thought. Given that The Big 2.8 have already cut WAY back on production AND increased incentives, it seems that the US new car market is suffering from the worst case of constipation since WWII. CSFB’s analysis gives us further reason to doubt GM’s motives in declaring a 45 percent production increase for the second quarter of ’09. Whatever the reasoning behind GM’s announcement, it has nothing to do with market reality. These numbers also cast the chortling IHS Global Insight analyst—who bashed Honda for its inventory problems—in a slightly different light. But I’ll save those bon mots for after the data dump . . .

* Big 3 inventories fell by about 3% from Jan to Feb, compared to the normal seasonal increase of about 2.5%. Despite the favorable move in absolute stocks, the overstocked level worsened, owing to a dismal sales level that lowered our estimate of the number of vehicles dealers should be holding.

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DW reports that German Economics Minister Karl-Theodor zu Guttenberg is in the US talking about how best to disentangle/jettison the Opel brand from its “struggling parent company.”

One of the main issues Guttenberg will address is the ownership of patents and other intellectual property Opel requires to continue producing cars. He will also explore GM and the US government’s willingness to let go of Opel.

Chancellor Angela Merkel told public broadcaster Deutschlandfunk that Guttenberg needed to “clarify how General Motors would be able to back away in order to give Opel more room to move.”

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