Point three of Barack Obama’s ethics pledge to the American people is that “no political appointees in an Obama-Biden administration will be permitted to work on regulations or contracts directly and substantially related to their prior employer for two years. And no political appointee will be able to lobby the executive branch after leaving government service during the remainder of the administration.” Obviously that’s a high standard, and one that seems increasingly important as the lines between government and industry are blurred by rampant bailouts. And clearly not everyone makes the cut. But as Obama assembles a team to “restructure” the auto industry, the spirit (if not the letter) of his ban on revolving door hiring seems to be falling by the wayside.

According to the Detroit News, the leading candidate for Obama’s “Car Czar” position is a certain Mr Steven Girsky, who the DetN describes as a “longtime auto industry analyst.” Having advised Centerbridge Industrial Partners and JP Morgan on auto issues, Girsky is more than simply an analyst. Automotive News [sub] reported in October of 2008 that Girsky was hired by the United Auto Workers to advise on the proposed Chrysler-GM merger and as AN dryly put it “he may also advise the UAW on a possible federal bailout of the U.S. automakers.” Girsky was also a consultant to GM’s CEO and CFO for just under a year, leaving the firm in 2006. As of October 2008, he also served on the board of Dana Corp, a massive auto supplier firm.

Does Girsky’s experience make him incapable of living up to Obama’s high moral standards? Technically, no. Like Tom Daschle before him, Girsky is clearly a lobbyist, though he’s not registered as one (the de facto bright line rule for Obama). But having been paid by the UAW within months to advise them on bailout strategy, he’s also clearly not going to live up to the “no work on regulations or contracts directly and substantially related to their prior employer for two years” standard. And if he is appointed as Car Czar, it’s safe to say that he will be guiding regulations and money disbursements that are “substantially related” to the work he has been doing for the UAW.

But as with so many political decisions, the choice of a Car Czar will likely be decided on the lesser of two evils. After all, Girsky may be steeped in the cozy relationships between GM management, the UAW and the government, but at least he has industry experience. Steven Rattner of Quadrangle Group has also been named as a possible czar, but as Newsweek reports, his main qualifications appears to be as a Democratic fundraiser (he is married to the National Finance Chairwoman of the DNC) and media-elite insider. Sure he covered energy and economy beats at the NY Times back in the day, but there’s little to indicate that he would make an especially good Car Czar.

Meanwhile, for all of Girsky’s industry connections, some of his ideas are decidedly TTAC-ish. Like when he got AN Executive Editor Edward Lapham‘s collar up by suggesting [sub] that the Detroit Three might need to cut as many as 70 percent of its dealerships. He even seems to cause some consternation among his UAW employers, based on this post at Salon. And that might just indicate the kind of experience and perspective that Obama’s team clearly needs. After all, his Climate and Energy Czar Carol Browner told Automotive News [sub] at the DC Auto Show that there are “lots of clean cars out there and options for the consumer.” You know, because the OEMs say so.

Meanwhile, it seems that nothing will stop or slow the rolling tide of money that is about to slosh into the automotive industry. $2b worth of battery research money is said to be going into the forthcoming stimulus package, and the Senate just approved an amendment to the stimulus bill which would make auto loan interest and state sales taxes deductable from federal taxes. Whether Girsky or Rattner is appointed as Car Czar won’t likely make much of a difference in terms of the amount of money that will be funneled into the industry over the following years. The crucial distinction is whether experience is worth the possibility of a conflict of interest.

Obama’s strict ethical standards are admirable, but if his options for Car Czar are between an industry insider who defines the term “revolving door” and a candidate who is being considered solely due to his political connections, something has clearly gone wrong. I’m not sure this kind of compromise is what people had in mind when they voted for “change we can believe in.” But in this familiarly frustrating choice, at least Girsky has a record of taking stands on crucial issues facing the industry. If he can publicly explain his recent UAW dealings in a way that passes Obama’s muster, Girsky may actually be the least of the available evils.

In fourteen days, GM and Chrysler will submit realistic plans for viability to Congress. See what I did there? With January’s sales slaughter revealed, it’s obvious neither automaker can survive without a huge and ongoing injection of working capital from the nation’s working capitol. Even if Uncle Sam provides this staggering amount of money (more than enough to start a car company from scratch), GM and Chrysler wouldn’t make enough profit to pay the interest and the principal during the loan’s term. The plans the automakers are about to present to your elected representatives are a fictional moon shot—with a make-believe launch vehicle that couldn’t propel a chimpanzee ten feet.  

Chrysler will point to its deal with FIAT as their lifesaver. In truth, it’s nothing more than a “free look” for the Italians to figure out what pieces of Chrysler they want to buy when the liquidation sale begins.

Worse, if Congress bails out Chrysler with more of YOUR dollars, the deal gets even sweeter for FIAT. Entry to the US market on the back of the taxpayers, a significant ownership stake and eventual control (for $25m) of Chrysler and the time to try and make it all work. That’s some plan. For FIAT.

But here’s the kicker. Nardelli says Chrysler needs “only” three billion dollars more of your money to get there. Are Bob Corker and Dick Shelby the only two guys in Washington that can see the sheer and utter stupidity of this? It’s as clear as daylight that this dog won’t hunt.

What’s the point of throwing $7b (or more) into a company that has no reason to exist in the US market?  A company that needs import technology for small cars and engines to meet the new standards from the Green Party? Heck, save our money and let FIAT come in on their own.

In GM’s case, the plan will look like everything else Wagoner and his team have presented in the past. Goals and actions that have no hope of realization. So far, the UAW hasn’t made the accommodations required—and never will—to the terms of wage/benefit/work rule parity with the transplants.

The unsecured bondholders and other financial creditors might take a cramdown BUT . . . one of the most skillful members of this group (PIMCO) has already pulled out of the negotiations. How about restructuring of the brands and dealer network? They’ll reveal their latest “no plan” plan (i.e., “we’re still reviewing all options”).

The facts are self evident. GM alone lost 122k units of sales in January 2009 versus last year. At an average wholesale to GM of say $24k/unit, that’s a loss of nearly $3b in revenues for the month. Or a run rate of $36b/year. Throw in the drop in sales in Europe and elsewhere around the world, and it might be another $1b to $2b dollars a month in lost revenues. Combined, it could be as much as $50b revenue hit (annualized) for the first half of this year. GM simply can’t cut its expenses fast enough.  

As for Chrysler, it’s worth repeating what Jim Press told his dealers. (“Without orders, the company has to liquidate.”) Uh Jim, your dealers have over 350k units on the ground and you sold 62k units in January. Do you really expect them to “stock up” now?

Bottom line: the car market will suck for the next six months, if not longer. It makes no sense for Congress, the President or the Car Czar to try and craft a plan that saves Detroit with taxpayer dollars without a bankruptcy.

GM and Chrysler have no viability plan that can work in the current sales environment (not that they had one during better times). If anything, now IS the time for bankruptcy, not later. Let the bankruptcy court system do what it’s designed to do best: figure out what’s worth saving (GM) and what’s not (Chrysler).

When the market does come back—and it will—a restructured and reorganized GM will be well suited to offer a smart and sensible line of brands, cars, and dealers that will all earn substantial profits. Parts of Chrysler will still exist (Jeep, Mopar, a couple of others). And Ford might be able to survive on its own as it gains share from the pieces shed by its Detroit rivals.

Why go to all this trouble of proving a case that doesn’t meet the sniff test to the most junior financial analyst on Wall Street? Is it pure politics to save union jobs and avoid the shame of bankruptcy? Or has Washington, DC and the Messiah Crew (Obama, Pelosi, Reid, and the Democrats in Congress) simply lost all sense of the common good with your tax dollars?

Forget it. Let’s not spend any more taxpayer dollars on a moon shot from Detroit.

Post Titanic Tuesday, GM is desperate to do something, anything to move its moribund metal. I speak here not of the pricing blowouts, finance deals and BOGO offers at the sharp end. I refer to the manipulation of dealer relations. Forcing dealers to stock vehicles that no one wants to buy. Back in the day, they used to call this practice “channel stuffing.” These days, they call it “pretending we’re a viable business to our Congressional overlords.” Automotive News [sub] reveals GM’s latest contribution to the genre: the more-than-slightly-ironically named “consensus program.”

The program has two parts. First, GM assigns dealers a sales objective through March 2. Second, GM “recommends” a “consensus number” to dealers—the number of vehicles for the dealer to order. Sweet, eh?

The bonus cash payout ranges up to $1,250 per vehicle depending on the percentage of consensus that the dealer orders and the percentage of the sales objective the dealer sells, dealers familiar with the program say.

At the high end, if a dealer takes 100 percent of the consensus and sells 100 percent of the sales objective, the dealer gets $1,250 per vehicle. At the low end, if a dealer takes less than 75 percent of the consensus and sells 60 percent to 99.9 percent, the bonus is $250 per vehicle.

So, if one dealer declines The General’s “request” to show the automaker’s inventory love during the time of war, that dealer suffers. A nearby competitor (i.e., a nearby GM dealer) who takes additional inventory earns more GM bonus cash. They can charge a lower price for the vehicles he or she doesn’t sell.

The trade calls this manufacturer-sponsored internecine conflict “two tier” pricing, or, to use a more technical term, “the same old shit.”

GM justifies their most recent dealer abuse as an effort to keep their inventory under control.

At the end of January, GM had 801,000 vehicles in inventory, down 103,000 units from January 2008. Cars make up 64 percent of current inventory and trucks the rest. . .

During a sales call today, GM sales chief Mark LaNeve said supply is about 105 days and GM would like to have “a little less inventory.”

“We’d like to run more at a 75- to 90-day rate,” said LaNeve. “We keep trying to get there. We are planning production schedules to get to the 75- to 90-day supply. It’s God’s work. We have to keep after it.”

As far as I know, GM marketing maven Mark LaNeve is not a Jesus freak. I’ve never heard him inject God or, God forbid, morality into a discussion of his work. However, if this is a true come to Jesus moment, rather than simple blasphemy, one wonders why God’s son would instruct the head of GM sales and marketing to bother himself with GM’s inventory levels. As Ken Elias has pointed out, LaNeve would be far better off seeking truth and reconciliation than filling GM dealer lots with unwanted product.

Yes, sixty days’ supply is the generally accepted industry ideal. But this is pre-meltdown math. New vehicle sales sank 37 percent across the board in January. They’re heading south from there. Bottom line: Chrysler and GM aren’t building much of anything—they’re just trying to clear out their existing inventories. The “days supply rate” for today’s car market is about as useful a metric as “rolls of toilet paper” at Graceland during Elvis’ terminal constipation days.

As one of the Apostles would have said (if he’d been Welsh), get your own house in order, boyo. If LaNeve still has a purpose in life, or at least within GM, sorting out the mess that is GM’s branding is it.

Obviously, LaNeve’s not calling the shots in terms of product (who needs product?) or brand culling (who needs eight brands?). Product is Car Czar Bob Lutz’ baliwick. Brand-i-cide is CEO Rick Wagoner’s responsibility. Good luck with that. Even so, LaNeve could, even with the current lineup, help GM at least start to find its way through the wilderness.

He could define GM’s brands.

GM’s marketing maven could/should make the case for whatever brands GM decides to keep. How about a series of ads: “This is what a BLANK is” (one USP per brand, please)? The current models don’t have to actually meet the criteria. Again, nobody’s buying cars. But a tightly-focused coherent example or eight of “the vision thing” would give Americans a reason to support GM. For Joe the Taxpayer, $40b+ of long-term debt is a meaningless abstraction. Cars they understand.

These are the times that try men’s souls. By thy deeds thy shall be known. The times are making it increasingly, inescapably clear that GM is a shell of a company led by lost souls. It’s a perfect time for someone with guts, character, passion and humility to step up and show what they’re made of. Unfortunately, men without these traits continue to pilot GM to its death.

Houston Mayor Bill White selected Urban Politics Professor Robert Stein of Rice University to create a report on the engineering safety performance of the city’s first fifty automated ticketing machines. (Professor Stein’s wife, Marty, is employed by the city of Houston as a top aide to the mayor.) In a November 2007 email, White emphasized his personal interest in the subject at the beginning of the project. “Let’s just make sure that we study things that really matter for decision-making,” Mayor White wrote to Professor Stein. “Our funds for public policy research are scarce. . . . I am not suggesting that somebody alter one’s conclusions and I am not trying to influence the conclusions. What I am trying to do is give some helpful advice from a decision-maker concerning how to avoid analytical overkill.” The point was not lost on Stein whose employer received $50k for the red light camera study and who depended (depends?) on the city for funding of several other projects.

By the beginning of 2008, Stein worried that the data he compiled were not favorable to the city. He let officials know that this should be expected.

“Recall our own findings match what is reported in [this Tampa Tribune] article and in the public health study cited in the article,” Stein wrote in a March 14 email to Houston Police Sergeant Michael Muench. “Tim and I have reviewed ten years’ worth of studies on red light camera programs and the tentative evidence that those studies using the weakest designs are most likely to report a reduction in side impact collisions after the installation of red light cameras. More rigorous and appropriate research designs (like the one we use for the Houston program) fail to detect this reduction after the installation of red light cameras.”

In light of this, Houston police began to push Stein to weaken his design to match techniques used in studies conducted by insurance industry researchers and others with an interest in promoting the use of photo enforcement. In an April 29 meeting with police, Stein agreed to reconsider his results.

“Dr. Stein’s analysis of the original 20 intersections from Sept–Dec 2006 found 169 accidents,” Houston Police Lieutenant Jonathan Zera wrote. “However, HPD countered that the findings were flawed because: 1. All accidents within 500′ of the intersection were being counted. 2. All accidents within the intersection were being counted even if neither vehicle’s approach to the intersection was regulated by a red light camera. As such, Dr. Stein will re-analyze the 169 accidents.”

Realizing that an early copy of Stein’s work would be critical in understanding the truth about Houston’s red light camera program, a pair of attorneys made a request for a copy of the report’s first draft. When the city rejected the request, Randall L. Kallinen and Paul Kubosh filed a lawsuit forcing disclosure of the correspondence between Stein and the city. After reviewing the documents, Kallinen gave Professor Stein partial credit for his work.

“While Stein at first seemed to have leaned toward the police he rejected most of their attempts to change his report,” Kallinen told TheNewspaper. “He did however mislead the public through the report and to the press when he said accidents were increasing citywide when he knew for a fact they were decreasing citywide.”

Stein’s published report on the Houston program documented an increase in accidents at intersections that had red light cameras, but the greatest increase happened in the directions where the camera was not looking. Stein offered to explain this anomaly by creating the hypothesis that these “non-monitored” approaches were equivalent to intersection locations that had no red light cameras at all. This hypothesis—despite the negative data–allowed Stein to conclude that the cameras proved useful in reversing a general trend toward increased accidents throughout the city.

“Why have accidents at non-monitored approaches increased so dramatically in the past year?” Stein asked in his December report. “As suggested above, these results could be evidence of an increase in collisions across the city. . . . Using this methodology, the new analysis could reveal if, in fact, the red light cameras mitigated a general increase in accidents citywide. This observation, if found, would both confirm the public safety benefit of the red light cameras in Houston as well as advocate the expansion of the program.”

The problem with this theory was that there was no increase in collisions across the city—and Stein knew it before his report was published. Houston police documents show that accidents steadily dropped each year from 2004 to 2008. There were 81,238 accidents in 2004 and 67,405 in 2007–a 17 percent decrease.

“Wow, this is perfect, thanks so much,” Stein wrote in response to a November 13 email from a Houston officer containing a complete set of declining accident figures.

Several local media at the time painted a positive image for the red light camera program by widely reporting Stein’s citywide accident theory.

When it comes time to chart designer Chris Bangle’s contribution to the BMW brand’s aesthetic, few pundits will praise his pulchritudinous perversion of pistonhead passion, or thank him for the aesthetic affectations for which BMW is now known. In other words, the “Bangle Butt” will be Chris’ lasting legacy. Of course, this is also the man who removed the words “flame surfacing” from art school and placed them on the tip of his detractors’ tongues. That and Axis of White Power. (Oh! How we laughed!) Equally improbably, the Buckeye State native helped the expression “Dame Edna glasses” cross into the automotive lexicon. Yup. It’s been a wild ride. Literally.

Bangle may not have been the most pretentious pontificator to ever describe an “ow-tow-mobile,” but it’s hard to imagine who could challenge him for that distinction. The vehicles he birthed were almost as intellectually challenging as the words he used to describe them. But not quite.

The gallery above is a snapshot of the kinda post-Bangle era; all photos ripped straight from today’s BMW website. Strangely, revealingly, most of BMW’s model photos do NOT show the most popular viewing angle: front three-quarter. Those that do are almost all computer generated. It’s a tacit admission that Bangle’s designs lack the kind of cohesion which was once the marque’s defining visual characteristic.

The brand’s Bangle-related fall from sheetmetal grace coincided with two major developments.

First, iDrive.

It’s easy enough to surmise that Bangle had no say in the matter of whether or not his engineering-obsessed paymasters would equip “his” cars with their fiendishly complicated multi-media controller. But one can guess that he welcomed the device as a break from the past, signaling his own arrival.

In any event, the iDrive appeared in Chris’ first major work: the E65 7-Series [see: main picture above]. The iDrive was a disaster. It drew attention to the brand’s move away from its core, technologically illiterate customers. The iDrive and Bangle’s creased sheetmetal drew attention to each other—and not in a good way. Bangle was off to a lousy start.

The second major event: BMW’s success.

Success has many fathers, and it won’t take a DNA test. There are plenty of pundits who have no trouble putting aside their personal distaste for Chris Bangle’s showy designs to credit him and them for BMW’s dramatic rise in the sale charts. I hate it but I’m a snob. Das volk have spoken.

The counter-argument: false synchronicity. You straighten your tie a car horn beeps. Two events related in time, unrelated in cause and effect. We’ll never know if BMW would have enjoyed more success without Bangle’s rude awakening.

Countering the counter argument, you could argue that BMW’s are still instantly recognizable vehicles, right across the now-vast model lineup. For better or worse, it’s probably for the better. The Japanese have been struggling with this overarching brand aesthetic issue—and failing—for decades. For example, L-Finesse is this decade’s best design language, but Lexus’ badge-engineered sedans and SUVs still don’t speak it well, if at all.

Regular readers can guess my take on this matter: in terms of a car company’s long term health and survival, branding is all. There’s only important question: did Bangle’s tortured designs help or hurt BMW’s Ultimate Driving ethos?

I’m thinking neither. During the Bangle era, BMW maintained its well-deserved rep for driver-oriented mechanical engineering. Not reliability. Fun. Passion. Performance. The latest M5 lost all its visual sang froid. Every. Last. Bit. It’s an ugly, self-referential, over-wrought, arriviste pastiche. (AND it’s cursed with both iDrive AND the world’s worst gearbox.) But the über-5 still goes like hell and corners like the ultimate handling metaphor.

Again, other carmudgeons chiming in on the Bangle bamboozle will have a kindler, gentler take. Members of the autoblogosphere reporting Bangle’s exit, stage right, are sure to couch their criticism carefully, deploying their own obfuscation via words like “challenging,” “daring” and “controversial.”

Truth be told, Bangle took a car company best known for its oxymoronic Oberbürgermeister chic and turned it into an upmarket blingfest. His successor Adrian van Hooydonk has dialed it back a bit, but Bangle lingered long enough to make sure no one cancelled his contract with Fifty Cent. Maybe now they will. Here’s hoping.

Bangle’s departure raises the Lilly Pulitzer question: did he fall or was he pushed? Either way, is his acolyte now, at this very moment, using the ultimate office shredder? Will the Bangle schtick stick? BMW’s Board has been behind Bangle in the most Wagnerian of ways. But their willingness to dump his predecessor’s designs for something entirely new speaks of a new design direction.

Meanwhile, BMW says Chris Bangle is quitting “to pursue his own design-related endeavors beyond the auto industry.” Note: not “outside.” “Beyond.” Egomaniacal to the end, it seems that Mr. Bangle is ready to ascend to a higher plane, beyond mere “automobiles.” We wish him luck in his self-imposed exile from main street.

The Truth About Cars presents news and opinion in an informal, conversational manner. As the site’s freshly anointed copy editor, preserving this style without being too anal retentive is a real challenge. I keep telling myself not to adhere to the rules of formal writing (Strunk & White be damned). This is a new age. The old styles aren’t always appropriate for Web 2.x (and beyond). This internal struggle informs my desire to write the official TTAC style guide. I’m trying to reconcile our contributors’ literary voices with necessary structure and, this is the important bit, community consensus. I want to give TTAC a distinctive, consistent voice in the autoblogosphere, during a time of uncertainty and change. I need your help.

Let’s begin this journey with torque and horsepower; twist and ponies. While I don’t want to reduce TTAC writers’ freedom to describe a car’s thrust, something must be done about the use of engine-related statistics on this site.

Recently, TTAC contributor Jonny Lieberman co-opted Jeremy Clarkson’s use of the word “torques.” Our left coaster did it twice, clearly intending the term to replace “lb/ft” or “pound-feet of torque.” Not to mention, Farago’s recently abandoned, UK-centric “ft.-lbs.”

The newly christened nickname certainly sounds faddish. To some, it’s an overly familiar affectation. “The Porsche Carrera GT has 435 torques.” That said, plenty of pistonheads use “ponies” or “horses” in place of “horsepower.”

Be that as it may, Jonny’s assault on my anal retentive nature underscores the need to agree on a house style for the stat: a standard technical designation for an engine’s torque.  So, what should it be: lb/ft or pound-feet or foot pounds or ft-lbs. or something else?

If only it were that easy…

Next, should we list the rpm at which maximum torque arrives? “The Porsche Carrera’s V10 delivers 435 ft lbs @ 5750 rpm” as opposed to “The Porsche Carrera’s V10 develops 435 torques?” [NB: don’t get me started on “develops,” “stumps up,” “generates,” and so forth.]

Keep in mind that TTAC reviewers butt up against an 800-word limit. Every word—and number—counts.

Just to make matters that much more complicated, what about Newton meters?

TTAC has a global audience, many of whom use the metric system. Should we offer both lb/ft (or whatever) and Newton meters? If we do use Newton meters, should we use the formal “Newton meters” or “N-m” or (and I’m kidding here) just use “newts?”

Horsepower is not as straightforward as it sounds. We can choose between HP and hp and a space between the number and numerical statistic, or not. “The Carrera GT’s engine is good for 605 hp” or “The Carrera GT’s engine is good for 605hp” or “The Carrera GT’s engine is good for 605 HP.”

Again, metric issues arise: kilowatts! Should we go there? If we offer newts, why not kwatts?

And if we do do that voodoo that kilowatts do, should it be “KW” or “kw,” space or no space? And if we offer an rpm arrival point for maximum torque, why not horsepower? For example, “The lightweight Porsche Carrera GT has tremendous torque (589.78 nm / 435 ft lbs @ 5750 rpm) and prodigious power (451.2 kw / 605 bhp @ 8000 rpm).” I’ve got a headache…

The alternatives don’t stop there. We could prevent an international incident with a hover hack: readers could mouse over the U.S. ratings (or not) to discover the equivalent metric amount.  Or we could add a horsepower and torque box with the stars and stats and not worry about numbers in the actual review. And finally…

We could drop the whole thing. RF figures TTAC’s not Car and Driver. “We’re trying to convey the soul of a machine. We’re not under no obligation to provide ANY statistics.” Thanks for that, boss. But if we do offer engine output numbers—and you know we will—TTAC should do so with logic, clarity and complete consistency. Please, help me in this quest by taking this survey.

Once upon a time, I commissioned Guy Broad Jaguar to build an XK120 from the chassis up. From the breakaway steering column to the oversized (though Jag-sourced) six, it was my idea of what an XK should be. She was built with as many upgraded repro parts as possible, by non-union labor. Before I could fettle the machine for something akin to drivability, I spun her on black ice and took out a small English village. (Come back Colleen, all is forgiven.) By the time the car was re-re-built, divorce had claimed my most beautiful asset. But I’ll never forget the consternation the car caused amongst the cognoscenti.

Adherents to the Church of Original Jaguar XK considered Colleen a heresy. Her existence diminished the eight billion man hours they’d spent researching, sourcing and replacing rusted engine parts. And the two thousand hours spent by the roadside—or in a shed—trying to coax their XK to life. Colleen’s adoring fans were restricted to those who didn’t know what she was and those who couldn’t fathom spending a year in provenance. 

This month’s Octane magazine offers another type of litmus test: a Lambourghini Jota repro.

All I remember about Lambos of that era: you couldn’t see anything and they’d roast you alive while you were looking. And deafen you for your trouble. And kill you for cornering. [NB: You, not Stirling Moss.] They were the world’s fastest hair shirts.

Obviously, I never drove the one and only V12 Jota. Whoever did made short work of it. Octane reports, “Its career was exceptionally short-lived; after being sold to Italian company Interauto in February 1972, it was heavily crashed and subsequently written off.” Heavily crashed. Don’t like the sound of that. Nor am I enamored with the idea of an overly-faithful recreation of the Jota’s spam-in-a-can character. 

Before I share writer Mark Dixon’s prose on the nouva Jota, you may or may not know that this sort of work is OK (an exception, if you will) with the keepers of the authenticity flame. Ish. That’s ’cause it’s a repro of a car that you can’t restore—’cause there ain’t any. The “shark-nosed” Ferrari 156 projects are the perfect illustration. And still the faithful argue about the proximity of the repro to the original, right down to the engine bolts. (I swear.) So, Jota.

You sit low and casual in the Jota, legs spread as if slouched in your favourite TV-viewing easy chair. The screen sweeps around in panoramic Stratos fashion and the broad sills, each of which contains a 60-litre fuel tank, create useful elbow room on either side. There’s lots of black-painted sheet alloy, blue Dymo labels with evocative Italian descriptions, and a total absence of anything soft or forgiving.

The foot pedals are reassuringly large and well spaced, their broad metal treads looking as if they’ve been lifted from one of Cavaliere Lamborghini’s tractors, but it’s impossible for the driver to release the handbrake without brushing an elbow against the rear bulkhead. That’s a mistake you make only once: after being cooked for a couple of hours by four litres of tuned V12, that sheet of alloy gets as hot as the baking tray under your Christmas turkey. 

If I remember my Pleistocene Era buff bookery, this is the part where the reviewer says “But on the right road…” Not quite, old chap.

But the clutch is surprisingly light and you can trickle the Jota away on a whiff of throttle – just as well, for the sake of the hearing of anyone standing within 40 feet. The steering is light, too, despite the 9.5-inch section front tyres (the rears measure an incredible 12.5 inches across). Rearward vision is non-existent, of course, but otherwise the Jota isn’t difficult to drive. It does make a fantastic sound. 

Ah, the sound of old supercars. Are you up on your Greek mythology? Sirens. Not the sound of the police come to save you from yourself. The sound of orgasmic women luring you to your death.

Forget all the usual niceties of induction hiss, valve train chatter and the other nuances that journalists like to use to pep up their copy: the Jota is simply raw, animal, noise. It’s loud at idle and it just gets louder as you pile on the revs. At low engine speeds it sounds as though someone is blowing a tuba straight into your ear; then at around 3000rpm the brassy blast becomes a little ragged, as though the two banks of cylinders have got out of synch; but get past that and it sweetens into the most glorious, red-blooded howl you can imagine. 

And… that’s it. No mention of handling, for some reason. Anyway, I’ve got no problem with this car—except that I do. If you know what I mean.

As a man with his finger on the pulse of the autoblogosphere, I can report that there’s a groundswell of critical coverage of The Big 2.8’s credibility. TTAC is no longer a lone voice. Questions are being asked. Issues raised. One of the most critical: why can’t Chrysler, GM and Ford just ditch their unwanted brands? Answer: state-by-state dealer franchise laws that heavily favor the dealers—thanks to their political clout. The Big 2.8 can’t live with ’em, they can’t afford to live without ’em. The Colorado Statesman’s Jerry Kopel does some deep diving into this devilish dilemma and provides some important insights on this life-or-death (well, C11 anyway) issue. 

Car dealers are “local,” known politically to legislators both in Colorado and other states. Whatever Lola wants, Lola gets. The same is true for locals, especially fundraising and fund-giving locals. In 1937, Colorado was among the first states to start interfering in arrangements between dealers and manufacturers. It is still on the books as CRS 112-6-201 to 213, the Antimonopoly Financing law. In 72 years, just one section has been amended.

Inactions have consequences. Here’s the money shot. 

“The sale and distribution of motor vehicles affects the public interest and confidence of the purchaser in the retail dealer from whom the purchase is made and the expectancy that such dealer will remain in business to provide service for the motor vehicle purchased.

“Proper motor vehicle service is important to highway safety and

(1) the manufacturers and distributors of motor vehicles have an obligation to the public

(a) not to terminate or refuse to continue their franchise agreements with retail dealers

(b) unless the manufacturer or distributor has first established

(i) good cause for termination or noncontinuance of any such agreement,
(ii) to the end that there shall be no diminution of locally available service.”

The manufacturers have the burden of showing “good cause,” but even if they do, they also have to show “no diminution of locally available service.”

(Note to the drafting office: “Good cause” is not defined in the statute. “Good faith” is.)

As a result, car dealerships have gained territorial monopolies (called geographic areas) from their manufacturers, fending off anyone who might want to muscle in by opening a competing franchise. So if Chrysler merged with Ford, who gets to sell the Chrysler cars? Does territorial integrity mean Chrysler franchises lose out, or that Ford franchises must defend themselves from lawsuits across the country?

And if that’s enough to make it impossible (i.e., extremely expensive) for an automaker to terminate a dealer and be done with it, Colorado is strengthening its laws in anticipation of just such an eventuality.

Romer’s SB 91 is assigned to the Business Affairs Committee. Here’s a sampling of the various amendments in the bill:

1. The manufacturer “who disapproves of a sale or transfer of a franchise shall reimburse the prospective purchaser and seller for any actual costs incurred in attempting to sell or transfer the franchise.”

Which means that there is no down side for the seller or purchaser. Payments must be made for lawyer or accountant fees. No wording has been added requiring “good faith” on the part of the potential purchaser or seller.

2. Temporary ownership of the franchise.

Present law allows the manufacturer two years to make the transition to another dealer. The bill cuts that in half to one year, providing less time to determine the credibility of applicants.

3. Termination of franchises.

Manufacturers with “good cause” are presently out of pocket for payments to the bad franchiser by statute. The Romer bill adds to that: The unused portion of the facility lease costs and “goodwill value.”

In addition, in order to prove “good cause,” manufacturers must submit a great deal of information for termination to occur. The Romer bill sets a time limit of 30 days for the manufacturer to submit that information.

Pragmatically, it would be smarter to pay off a bad franchiser than to try to meet the requirements of Colorado’s car franchise statute.

4. Squeezing the best out of ANY promotion.

A manufacturer, to save one franchise from going under in South Carolina, might offer a unique concept, such as offering trade-ins at no cost to either the dealer or the consumer. Under the Romer bill, the manufacturer would have to make exactly the same offer to each of its franchises in Colorado.

There’s no wiggle room here. A manufacturer operating in Colorado seeking to cull a brand or four or trim a dealer or 50 must either fork-out a fortune to terminate a franchise, slowly starve the dealers to death, convince Uncle Sam to write a law over-riding the state’s franchise regulations or file Chapter 11. Which would eliminate ALL this fancy footwork at a single stroke. Guess which one makes most sense?

Ford sits on the “Edge” of disaster. Despite the assurances from its CEO and chief cheerleader to the contrary, Alan Mulally knows that the day of reckoning could soon appear at his doorstep. Without an increase in sales volume, and soon, there will be no way to stop the cash burn. We’re not going to malign anything Mr. Mulally has done so far. In fact, he’s done more right than any other head honcho from Detroit in decades. But it’s time to pull out all the stops and break with tradition of never wishing ill on a competitor. It’s time for Chrysler to die.

Mulally needs to publicly state the obvious: Ford’s survival depends on Chrysler elimination. There’s no other way. Chrysler needs to go away immediately, not sustained in some semblance of suspended animation with token grants of government assistance. Now is not the time to be shy about this startling reality. Alan Mulally has to speak up now. He might also want to mention that Chrysler’s death will give GM a chance at salvation. Perhaps he can get to Rick Wagoner to show some of spine in support of this action, as well.

Let’s review.

Ford has managed to stabilize its market share around 15 percent of the U.S. market. The slide towards ignominy has stopped in its tracks. The only problem: the entire market has shrunk to about 10.5m units. This gives Ford maybe a 1.6m unit per year throughput– if the annual sales rate continues. If sales go lower, well, good things won’t happen. 

Last year, Ford sold 1.9m units, and 2.4m units in 2007. So in just two years (2007 to 2009), Ford will lose about 800k units in sales, roughly three assembly plants’ worth of production.

In the last quarter of 2008, Ford burned cash at the rate of $2.3b per month from automotive operations globally. Europe, Asia-Pacific and Volvo had negative operating income during the quarter, with future losses likely. We’ll assume that there won’t be positive cash generation in the near term there. But the bulk of the burn comes from North America and again, we know which way that’s going.

Ford claims that the cash burn will slow. That’s probably true. But it will still be a burn. To bolster its cash, Ford will soon borrow $10.1b from its credit line. Its cash on hand at the start of February will be on the order of $23b. Assuming it slows the burn to $1.5b per month, Ford has only seven more months before it goes cash critical at its minimum operating cash of $10b. That’s sometime in August this year.

There’s one cure. Kill Chrysler now, don’t wait.

Chrysler sold almost 1.5m units last year, of which one million were trucks (includes SUVs and Jeeps). Its recent sales pace puts it on target for only one million units for 2009, while living on the taxpayer dole. Of this, roughly 175k will be Ram pick up trucks, 160k minivans and roughly 200k Jeeps of all flavors. The rest are the hodgepodge of cars, small trucks and SUVs no one really wants anyways.

With Chrysler out of production, at least 800k of non-unique but easily substituted Chrysler vehicles (everything but minivans and Jeep Wranglers) could be sold by Ford and GM. That’s pick up trucks, fleet cars and SUVs. Plus, each of the remaining Detroit 2 could pick up some or all of the minivan and Jeep business.

Keeping with this line of logic, let’s assume Ford splits the future Chrysler business with GM. That’s an additional 500k unit of sales, of which approximately 60 percent or so are trucks (including minivans). That’s some decent profit business. And with Chrysler gone, the merry-go-round of rampant discounting for fleet and retail business led by this weak sister also grinds to near halt. 

Worst case: the transplants pick-up the lion’s share of the “new” business. There’s no evidence to suggest that Oldsmobile’s death transferred sales to the remaining domestically-owned brands. And there’s another problem…

Kissing Chrysler off today would mean that shuttering Chrysler dealers would offer their entire existing inventory at clearance pricing. That’s something like 400k+ units selling at prices levels never seen before seen (save decades ago). And the ChryCo cast-offs will sell. Imagine new Chrysler 300’s at $10k. Heck, whip out a credit card and drive away.

The fire sale will sop-up “excess” demand, most likely from the D2. So there will be short term pain at Ford and GM stores. But it’s a pill worth swallowing.

Under this scenario, in a few months, Chrysler’s inventory will be gone. Ford will then add sales, especially in trucks and fleet sales. Maybe 500k or so. Pricing will improve. The cash burn will be eliminated, as its existing plants product more without adding capacity. That’s the win.

Alan Mulally needs to abandon his pro-Chrysler bailout stance and tell the world that it’s time to kill the once-proud American brand.

We are like fish, swimming wide-eyed through an ocean of blood, that no longer taste the horror in which we are suspended. On Dec. 19th, eight days after the automotive bailout bill failed in the senate, former President George W. Bush used his executive power to direct $13.4 billion to the automotive industry—$9.4 billion for General Motors and $4 billion for Chrysler. This is a measure only 36 percent of the country supported, according to a December CNN poll. The cost of this bailout will be tossed atop the $10.6 trillion U.S. debt, according to the treasury. This is a debt our generation will be forced to spend its lifetime repaying.

To add insult to injury, one of the first things Chrysler did with its money was take out a full-page, color ad in The Wall Street Journal and USA Today entitled “Thank You America — thank you for investing in Chrysler” signed by Bob Nardelli, Chrysler’s CEO and Chairman.

It’s hard to imagine something more disgusting.

Usually when one says “investing,” one refers to voluntarily exchanging money for a share in future profits. But the “investing” of Bush’s executive order was involuntary. It occurred not through the invisible hand of the free market but through the iron fist of government power. 

To call this “investing” is to kidnap and call it a date. To call this “investing” is to enslave and insist that it is employment. To call this “investing” is to rape and plead that it is lovemaking.

One does not have to be an economic expert to appreciate the reality of this situation. The government finances the automakers’ bailout through taxation, through you.

If you do not pay your taxes, then you will receive a court summons. If you do not answer your court summons, then men with guns will come to your door. If you resist them, then you will be shot.

The Detroit Bailout—like all bailouts and all government action—is made possible by the threat of violence. This is the gun in the room Nardelli wants you to ignore. This is the gun that forces Nardelli to lie.

As Alexander Solzhenitsyn wrote, “violence can only be concealed by a lie, and the lie can only be maintained by violence. Any man who has once proclaimed violence as his method is inevitably forced to take the lie as his principle.”

If one wishes to speak with honesty and clarity about our society, one must begin by pointing out the difference between voluntary and coercive action; and by pointing out the gun.

This is the gun that forces people to act against their self-interest. This is the gun that damns politicians to a lifetime of deceit and bribery. This is the gun that both political parties will gladly wield in exchange for the glories of political power.

Despite having to crawl to Congress late last year, Chrysler was stable enough to donate almost $900,000 to political causes in the latest election cycle. United Auto Workers, who begged and pleaded alongside them, gave more than $2 million to the Democrats in 2008, according to opensecrets.org. These voluntary measures, unlike the bailout, could be considered an investment.

When Bush used his executive power to pay back Chrysler, the democratic process failed to represent the will of the people. But we still have the ability to vote with our dollars. The next time you need to buy a car, don’t feel pressured to “Buy American.”

Motorauthority reports that the long-rumored Buick C-segment sedan will probably be built at Opel’s Rüsselsheim plant. The new, entry-level Buick will utilize production capacity freed by plans to produce the Delta II-based Saab 9-3 at Saab’s Trollhättan plant. Since the American Astra experiment has gone so badly, GM needs a higher-margin Delta II vehicle to justify expensive tooling efforts at Rüsselsheim. Hence the plan for a Buick compact for the U.S. market. It’s a deeply misguided project, yet another sign of GM’s chronic, ongoing, multi-national mismanagement of its models, brands and [dwindling] resources. What is it with these people?

With the future of Saturn and Saab up in the air, with the HUMMER brand on death row, GM is trying to chart a course to “viability” based on constantly-changing assumptions. One of those: Buick should be a “core brand.” God knows where GM got that idea. Buick is one of the two rotting limbs on the corpse currently known as the Buick, Pontiac and GMC (BPG) “channel.” Buick hasn’t had a hit product since… wait… I’m thinking. 

The Lambda-based Buick Enclave was supposed to be one of GM’s Next Big Things. The CUV never found its stride. A year ago, TTAC’s Frank Williams wrote Buick sales suck. As you can imagine, they went downhill from there. At the time, Williams wondered if GM was trying to starve Buick to death. Perhaps they were. And changed their mind. Several times. Anyone familiar with GM’s on-again, off-again, we don’t know yet (a.k.a. “strategic review”) product plans knows that indecision and paralysis is GM’s leitmotif. 

GM’s new plan: between now and 2012, Buick will offer Americans a thin diet of me-too rebrand jobs: the new LaCrosse, this Delta II whatever and a Lambda CUV (Enclave). Needless to say, these examples of cost-cutting platform-sharing badge engineering will continue to debase whatever appeal the Buick brand once held for its loyal customer base. Or anyone else.

And yet, Buick somehow remains one of GM’s four “core brands.” 

There’s only one remotely plausible explanation: Buick’s success in China has convinced RenCen that the brand has a future. Of course, Buick doesn’t mean anything in particular in China. So why should it mean anything stateside? That would explain the plan to build a compact Buick for the U.S. market. The funny thing is it just might work. By now, nobody anywhere expects a Buick to be anything more than an up-optioned Chevy.

Even if we accept the fantastic possibility that when better Buicks are built someone will buy them, the real problem is building them in Germany. 

First, there’s an issue of cost. Thanks to higher labor costs, building in the Eurozone is an expensive business. And then there’s the fact that GM doesn’t sell Buicks in Europe. The cost of shipping vehicles to the US (China?) will hurt both profitability and sales. And don’t forget about the currency issue. If the Pontiac G8 and Saturn Astra experiences taught GM anything, there’s no way this idea will work.  

Then there’s the branding opportunity cost. Understandably enough, Opel’s bosses feel that branding GM’s best products as weaker marques hurts GM as a whole. “Only under the Opel brand can Opel products profit from their heritage, as it lends the ‘German Engineering’ appeal,” Opel boss Klaus Franz tells Handelsblatt.

Indeed, GM has sunk considerable amounts of cash into Opel in hopes of bringing the brand upmarket. It appears to be working. So why hide this success behind a brand that (outside of China) represents a tarted-up Chevy?

Why bother? In the U.S. and elsewhere, Opels could be sold as Opels, replacing GM’s confused mid-market branding “strategy.” With Chevy (Korean budget), Opel (German engineered, efficient, tech-y mid-level) and Cadillac (American luxury) GM can cut its portfolio to three complimentary global brands.

Pontiac, Saab, Saturn and Buick have to go. The fact that each of these four brand fiefdoms are fighting for Opel underpinnings for their products says everything. At this point, what does GM have to gain by holding onto the past with these useless antibrands? Opel can (and does) do everything these four brands do, only with a glint of European luster. 

Introducing the Opel brand in the US would have its risks. But at least it’s a fresh start. Selling its superior products under its real name helps GM considerably more than hiding them under the sheetmetal of a dead brand walking.

This strategy is similar to the approach that Ford is taking by bringing the Euro-spec Fiesta, Focus, C-Max and Kuga stateside. Ford’s job just happens to be easier, thanks to being called “Ford” in Europe. Like Ford’s plan, an Opel revamp of GM’s mid-market vehicles would have to involve local production to avoid Astra/G8 redux. And it wouldn’t be easy with the General’s current cash position. But at least it would be a “viable” strategy.

Writing in the Telegraph, Top Gear presenter James May says The Stig is a “harmless fairytale.” So much for the autoblogosphere’s paroxysms of go-faster gossip. The fact that most of Top Gear’s readers and viewers will continue to agitate themselves about the Stig’s “real identity” says a lot about their preference for theater over reality. As is often the case, the truth is far less glamorous than fiction. At least in this example, it’s no less interesting. Let’s start with this: if you take the Stig’s “Power Lap” times as reasonable statistics with which to compare the performance of two different cars, you’ve been seriously misled.

The TG lap times are recorded year-round on a track subject to various extremes of heat, cold, and precipitation. The gap between the Volkswagen R32 at 1:30.4 and the Lancer Evo X “FQ-300” at 1:28.2 is just over two seconds. In fact, it’s not uncommon for lap times at a track of this length to vary by two seconds or more, as the track “rubbers in” and then “washes out” over time.

I remember absolutely obliterating the lap record for my class at Mid-O last year. I shaved almost 1.7 seconds from the record during morning warmup. Later, I had to knock another four tenths off just to qualify in the front row of a regional sprint race. A big IRL test a few days previous had left a fantastic amount of high-quality rubber bonded to the track surface. Simple as that.

Applying a “surface factor” to Top Gear’s lap times, the R32 could be just as fast as the Evo around that track under identical conditions… or it could be as much as four seconds slower. Depending on conditions, the Enzo could have been the fastest car ever tested by the Stig, or it could have been slower than the Corvette Z06.

Power Lap times are like calls to Dionne Warwick’s Psychic Friends Network: use them for entertainment purposes only.

And then there’s the “Stig factor”: the difference in driving skills between one Stig, or two Stigs, or half a dozen different Stigs. Only there isn’t one. It doesn’t matter if the Stig is Ben Oliver, Damon Hill or Lewis Hamilton. The lap times will be roughly the same.

Surely Lewis Hamilton would be much faster around the test track than an older F1 driver, or a Touring Car winner, or even (gasp) a regular old American club racer like yours truly? Nope. The main gap between the best drivers and the regular Joes is minimal.

This is particularly true in relatively undemanding vehicles like street-tire, street-alignment street cars. The talent and experience required for a fast lap in something like a Corvette or GT-R can be found in literally thousands of drivers across the Western World. The difference between the very best street-car time-trial driver in the world and a mildly competitive Spec Miata racer might be half a second, if that.

As we’ve already seen, that half-second gap is much less than the potential variation in track conditions. It’s also less than the improvement possible with careful tire pressure selection and an extra session of familiarization in the car. Which reminds me: the “very best street-car time-trial driver in the world” mentioned in the previous paragraph isn’t Lewis Hamilton, Perry McCarthy, or anybody famous. It’s probably some introverted, Tilley-hat-wearing, weekend-warrior “nobody” in NASA’s Time Trial program or one of the overseas “time attack” deals.

Real racing drivers aren’t obsessed with extracting the very last tenth of a second possible in a single lap. It’s assumed that any race driver can put in about the same max-effort lap. Strategy, car conservation, traffic skills, on-track positioning… that’s where the superstars shine.

There are a few guys out there who could probably turn a faster single lap in a Ferrari F430 than Michael Schumacher. But Schumi will be within a fuel-adjusted two-tenths of a second for every lap in a forty-lap session, he’ll monitor and report effectively the car’s condition, and he’ll be aware of the position of every other driver on the track, even if he can’t see them. That’s the job of a racing driver.

If Top Gear wanted to provide serious, repeatable performance numbers, they would find and hire that aforementioned time-trialer cubicle rat, run all the cars under the same conditions on the same day, and rigorously enforce everything from tire pressure to oil temperature. In other words, they’d do what National-caliber autocrossers do when they conduct tire testing.

But if you’ve ever attended a National Solo event, you know there’s nothing sexy, interesting or impressive about that kind of process. It looks like a Star Trek convention without the fake ears or the fun shiny outfits.

Nobody would watch it. So instead we get an imaginary android, lurid powerslides and a “Power Lap” board to sit next to the “Cool Wall.” It’s a fake. But let’s be honest: isn’t that what you want?

President Barack Obama has announced that the EPA should go ahead and review California’s request to set national fuel economy standards. As reported here, California’s waiver would allow the state to legislate CO2 emissions, which would create a de facto fuel economy standard under the guise of keeping the planet cool. While environmentalists and the Pelosi wing of the Democratic Party view the Golden State hat tip as a seminal victory for Mother Earth, it’s actually a set up. It’s all part of the Obama administration’s plan to clean up the U.S. automobile industry by throwing GM and Chrysler into Chapter 11.

Once the EPA grants California’s request, the former republic and the thirteen states that follow its vehicular emissions requirements will dictate the kinds of cars all Americans will drive in the future. Never mind the Old School California-only models; there’s not a chance in Hell that any automobile manufacturer will make separate vehicles for The California 14 and then again for 36 other states. Lest we forget, California alone represents roughly one in every eight cars sold in the US.

Although automakers overwhelmingly oppose the EPA waiver– including Japanese and European manufacturers– their reticence flies in the face of logic.

Since the 70s, when California first confronted its smog problem, the federal government has issued waivers from federal emissions legislation to the California legislature. Of course, other states jumped on the California’s strictler, less gentle clean air bandwagon. And sure enough, all the manufacturers made their vehicles compliant with California regulations. For at least thirty years, California emissions standards have been the de facto standards for any vehicle sold in the U.S.

The MSM and even the Detroit papers have missed this call. All questioned whether the timing of Obama’s announcement couldn’t be worse– given Detroit’s dependence on trucks, which bring down fleet averages. And we know that Detroit doesn’t have a spare dime to develop the technology needed. Washington gives on one hand, and takes away on the other.

Yes and no. On one hand, it’s certainly true that neither GM nor Chrysler have the cash needed to retool to fully comply with California’s higher-than-the-feds fuel efficiency standards (never mind successfully compete with other automakers forced to do the same thing). Even split just three ways, the Department of Energy’s $25b retooling loans are, in automotive terms, a pittance.   

The President of the United States knows that GM and Chrysler have to go bankrupt to survive. This is no secret. But his administration doesn’t want to be the author of that scenario– at least not without a “soft landing.” The California waiver is a sign that Obama has found a “hook” that will allow him to do what politicians have wanted to do since they signed the first check for GM and Chrysler: control the companies’ products.  

So Washington will provide more money to help GM and Chrysler survive. But the rationale for doing so is undergoing a sea change. The bailouts are no longer about protecting American jobs. They’re about protecting American manufacturing by creating green jobs. 

The green bankruptcy angle is also the perfect cover to avoid messy trade disputes with foreign countries. While Detroit has argued for years that Japan underhandedly supports their domestic car companies, little came of it as Japan Inc ate away at Detroit’s share of the pie. Americans bought their cars, subsidized or not, by the Japanese government. And we know that Detroit failed to respond on the product front.

Now the tables are turned on Japan. In bankruptcy, the Federal government can dictate the terms of financing which they will provide to Detroit. That means more fuel efficient cars that meet California’s requirements. It’s open and direct subsidy – but one that has to be given under the guise of rescuing a key industrial economy. So Detroit actually gets a “two fer”: money for reorganization and for new vehicles. Japan can moan and groan, but Detroit will come out ahead, subsidized by taxpayer dollars.

And here’s how it will go down…

For a start, the government’s car czar will dictate the merger (via shotgun) of GM and Chrysler. From there, it’s straight to bankruptcy for American Leyland. That makes for a clean slate in an expedited reorganization. Fewer car models, fewer dealers, little debt, and a competitive union contract. Decades of poor management decisions get wiped clean.

And then new government money – provided as Debtor in Possession – starts the rehabilitation process of the New GM. The money will go for cars which will meet California’s de facto national standard.

So in one swoop, President Obama will fully pacify the far left wing of his party and find the justification for government funds to get Detroit where it needs to be, politically speaking. One major question remains – what happens to Ford?

The current recession has done a fair job of turning the world upside down. Instead seeing tragedy repeated as farce, we get a mega-dose of farce with the tragedy hanging over it all. Exhibit A:a letter intercepted by Automotive News reveals that FIAT CEO Sergio Marchionne and a team of Fiat senior executives visited Chrysler HQ on Saturday morning. “This was a very positive meeting,” Chrysler CEO Bob Nardelli wrote. “This potential alliance is very promising, but getting there is totally contingent on meeting the viability plan required of us by the U.S. Treasury.” So the FIAT deal depends on meeting the viability plan, which depends on the Fiat deal? Chrysler has stopped making sense.

Chrysler is struggling– thrashing about some might say– to find a way to justify its continued existence. Not to its customers (real or imagined). To the legislators who are now entirely responsible for its day-to-day survival. To that end, Chrysler has told tales of a hook-up with Nissan( to build a small car and/or rebadging the Ram to replace the Nissan Titan). There’s also been talk of a deal with China’s Chery to import Hornets (or something). Just before the bailout hearings, Chrysler trotted-out a fleet of prototype electric vehicles. Did I forget possible tie-up with BMW? Or PSA? Someone should.

The FIAT hook-up is a charade: the last act of a desperate company. As Justin pointed out yesterday, this is the sort of development that would be laughed out of a producer’s office. Bringing in small cars from FIAT is somehow going to rescue Chrysler? How? Making money off of small cars is not impossible in North America. But it’s close. More importantly, how are 150k cute little Italian job MINI’s going to prop up a company with a 1.5m vehicle market footprint?

How bad an idea is this? Not too many years back GM paid FIAT $2b NOT to take them over (added to the $2b already “invested”). Now granted, this doesn’t exactly make the list of 100 greatest business decisions ever. Not even the top 1000. But while GM’s guys may not know marketing from muesli, they know finance (they’ve been known to squeeze a nickel till it screams). If they decided paying off was better than taking on Fiat’s baggage, there must have been some issues. The success of the new Cinquecento made this look doubly foolish, but don’t pop the bubbly just yet.

FIAT got the 500 and derivatives essentially “for free”. The next big thing will have to be paid out of pocket, and the guys from Torino have some serious debts to work off. Right now FIAT has 5.4b Euros of debt and a bond rating one step above “junk.” They may not be as bad off as Chrysler, but they share a very similar boat. And they’re playing a similar game: telling their backers THIS IS HOW WE DO IT.

FIAT doesn’t have much presence outside Europe (certainly not in the “major” markets). Bad as the American market looks, things across the pond look just as grim, and recovery seems further off. Getting some North American volume sounds like a winner, but expanding into a down market is like cutting production in an expanding one. Again, for both playas, appearance is all.

The biggest obstacle to this alliance is time. Federalizing and/or designing small cars for the U.S. will take [taxpayer] money, and money is time. How long will the American taxpayer be willing to wait for these Italian-derived vehicles? So far, the meter says $4b. Soon, it’ll be another $3b. That’s $7b over four months– without spending a dime on building Fiats. And it doesn’t include the money spent on GMAC or Chrysler Financial or Department of Energy retooling loans.

At some point, the American taxpayer will look at the meter and says “You know what, I think I’ll walk.”

Chrysler is hoping against hope that United States representatives, senators and the newly-elected president are stupido. Meanwhile, absent anything like a genuinely credible “viability” plan, Chrysler CEO Bob Nardelli is doing what the scourge of Home Depot does best: cut…. in the name of FIAT!

Nardelli’s letter told employees that Chrysler’s got to do what a Chrysler’s got to do “to make the alliance work.” He’s seeking price reductions from suppliers [on the brink of bankruptcy]. He wants them to freeze material cost increases for 2009. At the same time, Nardelli’s minions told dealers at the National Automobile Dealers Association convention that the automaker’s reducing dealer margins and reviewing dealer payment terms. No more free gas in the tank of new cars, either.

All this while the FIAT chief swans around Auburn Hills like it was 1996. it isn’t. And it never will be again. The only “alliance” that Chrysler will realize will be a shotgun wedding with General Motors. Chry-Fi? Think American Leyland. Where’s Pagliacci when you need him?

According to Automotive News, Chrysler plans to sell up to seven Fiat/Alfa Romeo-designed models in America. Under this scheme, Chrysler dealers would flog the Fiat 500, Alfa MiTo, and Alfa 147 replacement. There’ll also be up to four Fiat-based cars in the A, B, C, and D segments. Some American car fans are thrilled at the idea of inexpensive, fuel efficient, fun-to-drive Italian cars — even if the machines in question end up as Dodges built in Mexico to Italian blueprints. But that’s exactly what it is: an idea. And a bad one at that.

The Chrysler – Fiat deal is a lot less than meets the eye. Most importantly, Fiat isn’t putting a dime on the table. All the costs of converting any given Fiat/Alfa to a Chyrsler and/or Dodge product would be borne — again, in theory– by Chrysler. Given Chrysler’s cash position (i.e. none), given the complexity and expense of creating even ONE car for the U.S. market, given the cultural and corporate communications hurdles involved, Chrysler’s promise to deliver the fruits of this alliance in two years is as optimistic as their electric car “program.”

But let’s say Chrysler and Fiat could wave a magic wand and place these American-Italian cars into Chrysler/Dodge showrooms tomorrow. Would they sell?

The U.S. economy is in a deep recession. By many accounts, it’s going to be worse still. Any sort of recovery is at least 12 months away. With the rest of the world in a similar position, gas prices are likely to stay low. And that means sales of small cars and fuel misers will continue to sink– relative to a sinking market. If you look at the sales of Honda’s well-established Fit for example, it’s not a pretty picture.

Even if California’s new fuel economy standards suddenly arrived in the same fantastic manner to force consumers into smaller cars, the poster child for this new alliance– the Fiat 500– would be a modest flag-bearer at best.

Sure, the 500 could become a relatively inexpensive version of the iconic MINI. But to help Chrysler out of its deep hole, the 500 would have to sell over 100k units per year, at a significant profit.

Lest we forget the U.S. market is choked with new cars. Prices are down and going lower. Ford’s upcoming, less-expensive Fiesta faces an uphill battle for sales, and Ford doesn’t face the same problems of collaboration. And that’s without considering the long, slow process of resurrecting Chrysler’s brand. With a Fiat no less.

Even if Chrysler gets around to finishing design work on these new cars, what happens after the enthusiasm/sales from Italiaphiles and car fans dries up? I repeat: Italian cars have a terrible reputation for quality and reliability in the U.S., regardless of the present-day reality. Fiats may last for 250k miles in Brazil, but it won’t matter to American consumers that can only hear “Fix It Again Tony.”

It also is worth noting that even in Europe, Fiat and Alfa Romeo residual values are among the worst on the market. While the 500 and Panda have been solid, the bulk of Fiat’s cars’ resale values are absolutely atrocious. Poor residual cars in Chrysler dealers? Not exactly a new news story. But neither is it a road to redemption.

The worst part of all this: Chrysler expects the American taxpayer to pay for this so-called strategy. Since the moment Chrysler felt the need to hit-up the U.S. taxpayer for $7b, the company’s owners have refused to invest any additional money into the failed enterprise. So we can assume they’ll give this brilliant plan, this awesome alliance, a similar amount of financial backing. If it’s not good enough for them, it’s good enough for you? Fool me once…

The news coming out of New Orleans today: Chrysler promised dealers it’ll still be around in April. The only way that’s “good” news is if the presumption among Chrysler dealers is that the company actually has less than three months to live. Is Chrysler-on-federal-IV-fluids going to be around to produce Fiat-designed cars that, well, haven’t yet been designed? I’m thinking no.

The Chrysler – Fiat deal only makes sense on a superficial, 24-hour-news level of analysis. Chrysler is in bad shape, Fiat has been touted (prematurely) as a European success story. Chrysler has no small cars, Fiat does. Fuel economy regulations are set to increase, and President Obama has just scared the heck out of car manufacturers by, ironically, applying a States’ Rights approach to future fuel and emissions policies.

From a product standpoint, media pundits can be forgiven for thinking that the pieces fit together. Unfortunately, they don’t. Since so many of these collaborative automotive projects end before or when the first product hits the showroom floor, it’s unlikely to matter.

[TTAC’s reviews of the Fiat Panda 4×4, Alfa 147 and Fiat Grande Punto]