Well, they didn’t kill the Corvette, but GM’s iced its performance tuning division. Automotive News [sub] reports on the car-nage.

GM today disbanded High Performance Vehicle Operations, which is based at the company’s suburban Detroit technical center, and redeployed its engineers, said spokesman Vince Muniga.

“All high-performance projects are on indefinite hold,” Muniga said. “The engineers are moving into different areas of the organization, and they will work on Cadillacs, Buicks, Chevrolets and Pontiacs.”

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I’ve been poking around the Chrysler deal with members of our Best and Brightest. I asked one of them to explain the original Chrysler deal. I’m not completely sure what the hell he’s talking about in several places, but I get the general gist. And this information needs to see the light of day. So, here we go . . .

The agreement known as the “Contribution Agreement” found in the 6-K filed at the SEC by Daimler around 5/14/07 explains in painful legalese what was to occur and defined the capital to be funded upon closing the deal. The purpose of the agreement: protect both sides and to provide a financing commitment so that when Daimler’s Board of Directors signs off on the deal their backside is protected. It should be noted that the contributions to C-Auto and C-Finco changed from what was described in the Contribution Agreement once the loan money was raised and the deal officially closed.

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From the Lorinser press release:

While it was derided at first, the Smart has since evolved into a hip cult-car—even in “big block” USA. Its success story is no surprise: the defiant small car still embodies the principles of good economic and ecological sense while being completely free of a “piggy-bank look” and “everyman design.” Consequently it suits the times perfectly. So why is Sportservice Lorinser forecasting a dark future for the Smart? Because black is suiting the dynamic light metal alloys Speedy perfectly.

Puh-lease. The idea that American motorists yearn for small, stylish, Italian cars is nuts. OK, maybe YOU do. But YOU are not the average American motorist. And this is not 1951. Or 1961. The U.S. market is saturated with strong brands selling first-class automobiles that cater to Joe Public’s every vehicular need, from stylish, miserly city runabouts to gas-guzzling, SUV cum blingmobiles. It’s worth noting that the market for new cars really, really sucks. What are the odds that consumers swimming backwards underwater will want to take a flyer on a completely untested brand selling a brand spanking new product? Did I say untested? See, now that’s funny. Fiat in the US? OK, sure, branding these [smoke a] joint ventures as Chryslers or Dodges will sort that little legacy issue right out. See that? Did it again! C’mon. You’re the Best and Brightest. Surely you know that this Fiat thing is a non-starter, from the non-start to the non-finish. Finnish! Didn’t Porsche build Boxster in Finland? I reckon a Finnish brand would have a better chance in the Land of the Free than Fiat. You?

“The submission of restructuring plans by GM and Chrysler represents the next step in what has been a difficult and disappointing chapter for the American economy, but I hope will become the transformation of our domestic automobile industry into a viable, technologically advanced, and globally competitive manufacturing force.

“In the coming weeks, the Obama Administration will review these plans and assess whether the shared sacrifice required of all stakeholders affected by the auto companies’ current conditions—workers, executives, bondholders, and shareholders—will result in reasonably restructured corporations, with good, high-paying jobs for the future.

“Congress looks forward to working with the Obama Administration on any future actions that may be needed to move our domestic automobile industry on a path of global competitiveness and advanced energy efficiency technologies, while ensuring accountability to the taxpayers.”

I once attended a seminar on alien abduction hypnotherapy. When we got to the Q&A bit, I was flabbergasted by the audience’s enquiries. “What do you do if the alien has been in contact with a departed spirit who knew the victim, and used their influence to prevent hypnosis?” “I’d hypnotize the spirit first,” the therapist responded, without batting an eye. Suddenly, I felt very, very alone. Surely, I wasn’t the only person amongst hundreds who thought the whole thing was a patently ridiculous scam. I got that same queasy feeling today, watching my so-called colleagues questioning GM CEO Rick Wagoner about the company’s viability plan. Surely someone would point out that the whole thing is nothing but a patently ridiculous scam. Sigh. Right, let’s get to it then…

The following institutional investors bought into Cerberus Institutional Partners IV (CIP4). That’s the $1b – $1.5b Cerberus-controlled fund established to provide part of the initial $7.2b payment to Daimler for Chrysler. Obviously, this list is far from complete. We call on our elected representatives to require Cerberus to provide a full and complete accounting of all participants in this fund before U.S. taxpayers extend Chrysler any more federal loans.

LA Police & Fire Pension

Public teachers of PA (PSERB) – $200m  

PA state retirement workers [SERS] – $75m

NY Common Retirement Fund – $50m

Charles Schwab Institutional 

Univ of CA – $40m

Univ of Tex – $25m

Idaho state employees – $40m  

Allstate

Glenmede Trust Co. (PA)

Franklin Templeton Investments

[thanks to Full Deck Analytics for the help]

We’ve pointed it out before: the ethanol industry has a cunning plan to breach the “blend wall” (a.k.a. the fact that American customers don’t want E85). While they’re waiting, hoping and praying for a Titanoboa cerrejonensi-sized gas price spike, they’re planning on using their political leverage to “offer” (i.e., force) motorists E20 and E30 ethanol blends. The big problem: it’s not entirely clear that engines like to run on those blends. (E85-compatible vehicles are, uh, E85-compatible). In fact, it’s pretty clear they don’t. But that’s not going to stop the lobby from trying . . .

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I hopped in my Boxster and headed to the Lexus dealer yesterday. We’d agreed on a price for their ’08 2k mile IS-F. Only a single hurdle remained: Mrs. Farago. Sam thinks I’m nuts to swap a Porsche anything for a Lexus anything. There was only one way to convince my live-in lead-footed badge snob that the IS-F is the right kinda wrong: a test drive. Sam couldn’t get out of the house. Hakuna mutata. I’ll just swing by the dealer, pick-up the car, drive it back home, let her drive it, drive it back, pay my deposit and tidy-up the details. I called the salesman to give him a quick heads-up. [NB: the same salesman who was pressuring me to get the deal done by President’s Day for HIS convenience.] Nope. No can do. He was slammed. Huh? Just throw me the keys. After all, they’d lent me the über-LS. Sorry. Tomorrow or Wednesday. [Insert silence while I waited for his offer to bring the car by the house.] OK. How about . . . never? Over and out. I know this will strike a chord with many of you. I’ve heard plenty of stories where car dealers pissed on pistonheads, operating from the mistaken belief that THEY’RE doing YOU a favor selling you a car. And that’s another reason automakers and their dealers should be “allowed” to go out of business. If there’s no downside for someone selling cars, there’s no upside for the people who buy them. It’s as simple as that.

Open letter from GM’s Union Leaders:

“Renaissance” plan for Europe is not viable. It will finish off the European GM brands and companies and includes unacceptable risks of litigation—the alternative is the spin off of the European operations

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With municipal budgets tight across the state of Colorado, members of the General Assembly are looking to offer relief. The Colorado state Senate Transportation Committee voted 4-3 on Thursday to boost the cost of a speed camera ticket from $40 to $75. The measure, Senate Bill 143, also extends the reach of photo ticketing to include nearly any road that runs through the state.

Last May, the state authorized the use of freeway photo radar which allows the placement of automated ticketing machines on high-speed roads by erecting a sign that says “work zone.” The bill introduced by Colorado state Senator Bob Bacon covers most of the remaining roads within the state by allowing photo ticketing on any road with a speed limit of 50 mph or less. Combined with the higher fees, the revised program is expected to generate millions in additional revenue. The Senate committee voted to direct this money into funding accounts labeled “traffic safety.” The bill must now be considered by the full Senate.

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