Last week. President Bush sacrificed his free market principles on the altar of expediency. Apparently, under “ordinary circumstances,” the Commander-in-Chief wouldn’t have expropriated $17.4b of taxpayers’ money to bailout General Motors and Chrysler. But someone somewhere screwed-up the U.S. economy; leaving him without the option that cannot be named (a.k.a. doing nothing). I guess Bush was channeling Flip Wilson: “The Devil made me do it!” Actually, that would have been a welcome excuse. The pretext Bush deployed is deeply worrying: “My economic advisors believe that bankruptcy could now lead to its disorderly collapse.” So we’re propping-up two dead dinosaurs walking because we fear “disorder?” When did the United States become Germany?

Seriously. I’ve seen Germans standing at an empty pedestrian crossing at 2am, waiting for the light to change. Don’t get me wrong. The German desire for order is both their weakness and their strength. Alois Ruf doesn’t build the world’s best supercars by allowing his mechanics to plop a schmutz-oozing bratwurst sandwich onto a toolbox. But a tightly confined system of rigidly enforced rules and regulations is not the American way.

As a nation, we’re supposed to have a system of government– and a corporate culture– that allows individuals and companies to engage in the art, science and business of innovation. To paraphrase Joseph Stalin, you can’t make an innovative omelet maker without putting a few omelet makers out of business.

I’m sure I don’t need to lecture anyone about the importance of creative destruction to the health and vitality of our entire economic system. Unless it’s President Bush. Does the Chief Executive honestly believe that the American economy will be stronger if our tax money props-up two, perhaps three failed not-to-say doomed carmakers?

Even if GM could be “saved” by a temporary reprieve from Adam Smith’s “invisible hand,” the overall effect on the automotive market will be stultifying. GM and Chrysler will suck-up sales/money that could have rewarded and strengthened more efficient and market-sensitive automakers, during a time when every sale counts.

Those of you schooled in realpolitik will counter that the Motown bailout buffet is like everything else that emanates from the political sphere: it’s about pragmatism, not principle. The President believed that protecting his political legacy (such as it will be) depends on making GM’s implosion Barack Obama’s problem.

Fair enough. Or, in this case, completely unfair to the car companies who deserve to survive. But the real irony here is that President Bush’s failure to embrace his inner cowboy, his failure to stand back and let the chips fall where they may, will make things far more “disorderly” than if he’d left not well enough alone.

During this pre-C11 interregnum– for that is what it is– The President and his cronies expect GM’s stakeholders to not drive that stake into the automaker’s black heart. For some reason, Bush expects the company’s executives, unions, bondholders, dealers and suppliers to fashion an agreement whereby everyone takes a hit for the team so that the team may survive.

For GM’s longtime observers, the idea triggers a simple, inescapable thought: why the Hell would they do that?

For one thing, they haven’t done it so far, even though GM has been technically bankrupt, heading for its day in bankruptcy court, for years. In fact, you could make an excellent case that the bailout is a reward for NOT having negotiated a viable business plan. And anyone with dogs knows what happens when you reward a behavior. See you on March 31 for more of the same? Count on it.

For another, there is no power within the bailout “agreement” to force anyone to do anything– other than file for Chapter 11 (which they’re going to do anyway). The idea of a bailout “Car Czar”– once the linchpin of the whole deal– has quietly disappeared. And no wonder. He or she would have been a de facto bankruptcy judge. And you can’t have that while you’re busy jockeying for position in the real bankruptcy.

If Bush and the federal teat-suckers he’s supplying think a GM/Chrysler bankruptcy now would be disorderly, just wait. GM’s various “stakeholders” will spend the next 90 days or so fighting over the meat thrown to the wolves by Uncle Sam, and then begin the real business of internecine warfare. Without a bankruptcy judge’s staying hand, all Hell is about to break loose. I fully expect the whole house of cards to collapse before the time comes to re-up. And if not then, later.

But no matter how long it takes, every day that GM (and Chrysler) stay in business will sap precious strength and vitality from the American automobile industry. Energy is never lost; it merely changes form. America’s Founding Fathers knew that some forms are better than others. But when it came to commericial ventures, as long as they stayed within broad boundaries, it was not for them to decide which.

Failed four time presidential candidate and god of all ambulance chasers Ralph Nader has found a new enemy: China. The Center for Auto Safety, founded by Ralph Nader with part of the $425K court settlement paid by GM in 1970 for invasion of his privacy, has been researching recalls of Chinese auto parts. Those recalls are now posted on the safety center’s website. The New York Times took the bait, and ran a long story under the headline “Recalls of Chinese Auto Parts Are a Mounting Concern.” If the NYT would have just taken 20 minutes of research, they would have found that they’ve been snowed.

“There are so many automotive products coming in from China that American safety officials can’t keep track of them,” Clarence Ditlow, executive director of the Center for Auto Safety, told the Times. Opening salvo, five miles off target. The U.S. Customs Service has a record of every part entering the country. American safety officials are not mandated to keep track of them. Every part of every country may freely roam the U.S. of A.

So, on it’s own, the Center for Auto Safety went to the trouble of tracking down failed Chinese products.

After an exhaustive search, Nader’s Center for Auto Safety found 24 recalls of Chinese products, listed in the National Highway Traffic Safety Administration’s (NHTSA) records for the years 2007 and 2008. The 24 incidents involve a total of 1.2m products.

The high numbers were caused by three companies.

Eagle Eyes Traffic Industrial Co., Ltd. imported 404.546 replacement headlight assemblies which  “do not contain required amber side reflectors.” Foreign Tire Sales, Inc. became infamous by importing 255k (some say 450k) Chinese tires which were in danger of tread separation. Harbor Freight Tools imported 295k fuses which took too long to blow.

Ditlow said his review convinces him that “too many Chinese companies are unfamiliar with – or don’t care about – safety standards” in the United States, and thus don’t meet them. According to Ditlow, automotive equipment made in China is less likely to comply with safety standards than the same product made in the United States. “The companies in North America know that process,” Ditlow said.

A quick analysis of the NHTSA database shows that Mr. Ditlow doesn’t know what he is talking about.

The NHTSA database lists 76,525 recalls since 1966. From 2007 to date– the period analyzed by the Center for Auto Safety– NHTSA lists 13,482 recalls. The database identifies the manufacturer or importer of the recalled product. It does not identify the country of origin.

The Center for Auto Safety found 24 products on the list made in China. That amounts to 0.18 percent. The NYT also did not find newsworthy that “China” is the only country listed on Nader’s website under “Import Recalls.” The countries of origin of the remaining 13,458 recalls remain unmentioned.

Also overlooked (and under-reported): during the same period, the database lists 419 recalls by Chrysler LLC, 678 recalls by Ford Motor Co, and a whopping 1,410 recalls by General Motors Corp.

The onus for creating a solid understanding of the safety standards sits squarely on the importer. United States federal law puts responsibility for the safety of the product on the American importer. The importer has to specify the factors that bring the product in compliance with U.S. regulations. The importer must verify that the imported part is in full compliance.

It is very easy to import auto parts to the United States and Canada. Some say, much too easy. There is no oversight. No prior verification is required by a governmental agency or authorized testing entity before the vehicle or equipment can be imported, sold or used. If reason develops to believe that a part does not meet standards, then authorities may conduct tests. If a noncompliance is found, a recall can be ordered.

The rest of the world operates on the principles established by the World Forum for Harmonization of Vehicle Regulations, a body of the United Nations. 58 countries, from Azerbaijan to New Zealand, are signatories to a common set of ECE Regulations for type approval of vehicles and components. Other countries, even if not formally participating in the agreement, recognize the ECE Regulations. They either mirror the ECE regulations content in their own national requirements, or permit the use and importation of ECE-approved vehicles or parts.

More than 120 ECE regulations cover most safety-relevant aspects. Each part or vehicle must successfully be tested as part of the type approval. The tests are performed by accredited, independent labs. Manufacturers must be audited. Production must likewise be in strict compliance with the certification. If non-compliant parts are found, the manufacturer– not the importer–  can lose the certification.

In most countries that signed the agreement, using a non-certified part or vehicle is illegal. This is one of the reasons why one hears very little noise about Chinese quality from European countries. Prodded by Detroit (and most likely the Association of Ambulance Chasers) the U.S.A. refused to join the United Nations body.

And that’s the truth.

President Bush’s radio address this morning: “Good morning. For years, America’s automakers have faced serious challenges — burdensome costs, a shrinking share of the market, and declining profits. In recent months, the global financial crisis has made these challenges even more severe. Now some U.S. auto executives say that their companies are nearing collapse — and that the only way they can buy time to restructure is with help from the Federal government.

I’m not going to name names. I’m not going to lay blame. I’m just trying to clear my name.

This is a difficult situation that involves fundamental questions about government’s proper role. On the one hand, government has a responsibility not to undermine the private enterprise system. On the other hand, government has a responsibility to safeguard the broader health and stability of our economy.

I’m sacrificing A for B.

Addressing the challenges in the auto industry requires us to balance these two responsibilities. If we were to allow the free market to take its course now, it would almost certainly lead to disorderly bankruptcy and liquidation for the automakers. Under ordinary economic circumstances, I would say this is the price that failed companies must pay — and I would not favor intervening to prevent automakers from going out of business.

I don’t favor intervening in free markets unless I do.

But these are not ordinary circumstances. In the midst of a financial crisis and a recession, allowing the U.S. auto industry to collapse is not a responsible course of action. The question is how we can best give it a chance to succeed. Some argue the wisest path is to allow the auto companies to reorganize through Chapter 11 provisions of our bankruptcy laws — and provide a Federal loan to keep them operating while they try to restructure. But given the current state of the auto industry, my economic advisors believe that bankruptcy could now lead to its disorderly collapse — sending our economy into a deeper and longer recession.

A government-aided Chapter 11 is the right thing to do. But we’re not going to do it.

A more responsible option is to give auto companies an incentive to restructure outside of bankruptcy — and a brief window in which to do it. My Administration proposed legislation to achieve this, but Congress was unable to get a bill to my desk before adjourning for the year. This means the only way to stave off a collapse of the auto industry is for the executive branch to step in. So yesterday, I announced that the Federal government will grant loans to auto companies, which will provide help to them in two ways.

This is Barack Obama’s problem now.

First, the loans will give automakers three months to put in place plans to restructure into viable companies — which we believe they are capable of doing. Second, if restructuring cannot be accomplished outside of bankruptcy, the loans will provide time for companies to make the legal and financial preparations necessary for an orderly Chapter 11 process that offers a better prospect of long-term success.

We believe GM and Chrysler can do what they say they’re going to do– minus the bits they say they’re going to do. But I can’t say that. Because if I did, I would be saying I don’t believe them. Which would mean this bailout makes no sense whatsoever. Anyway, like I said, this is Barack Obama’s problem now.

The terms of the loans will require the auto companies to demonstrate how they would become viable. They must pay back all their loans to the government, and show that their firms can earn a profit and achieve a positive net worth. This restructuring will require meaningful concessions from all involved in the auto industry — management, labor unions, creditors, bondholders, dealers, and suppliers. If a company fails to come up with a viable plan by March 31st, it will be required to repay its Federal loans. Taken together, these conditions send a clear message to everyone involved in American automakers: The time to make the hard decisions to become viable is now — or the only option will be bankruptcy.

Chrysler and GM must pay back the federal loans because that’s what a loan is: something you pay back. Actually, fuck it. If they can’t repay the money, they can declare bankruptcy. At that point, no one’s going to care about a measly $17.4b.

The actions I’m taking represent a step that we all wish were not necessary. But given the situation, it is the most effective and responsible way to address this challenge facing our Nation. By giving the auto companies a chance to restructure, we will shield the American people from a harsh economic blow at a vulnerable time. And we will give American workers an opportunity to show the world once again that they can meet challenges with ingenuity and determination, and emerge stronger than before.

Who’s your Daddy?

Thank you for listening.”

The votes are cast. The polls are closed. And there’s no question which vehicles our Best and Brightest consider the TTAC’s Ten Worst Vehicles 2008. The good news: there are only two new “winners” this year. The bad news: there are only two new “winners” this year. In fact, eight of last year’s Ten Worst are still in production. Even more depressing: half of this year’s winners  have “won” TTAC’s Ten Worst three years running. How long can these turkeys hang on? Pass the cranberry sauce and read on.

There was no doubt about the final ten. When all the nominees were lined up in order of the number of votes garnered, there was a huge gap between numbers 10 and 11. So how did they rank?  Here they are:

10. Chevy TrailBlazer / GMC Envoy / Isuzu Ascender / Saab 9-7X – What’s not to love about a refined straight six or a rip-snorting V8 in a family hauler? The miserable GMT-360 platform. No matter what iteration you pick, you get a jittery ride, third-world interior and panel gaps large enough to be seen from outer space. After years of insignificant redesigns, this rig’s corroded six brands, killed two and put three in the hospital. Die already, will ya? – sm

9. VW Routan – The Volkswagen Routan is a badge-engineered Dodge Caravan. Pros forge Monets, not Hello Kitty posters.- mm

8. HUMMER H2 – I secretly like the H2. It fits with my theory that all SUVs need to look like Patton could’ve used ’em to invade Sicily. Problem is, the poster child for “Drill Baby, Drill!” is anything but. It’s a Chevy Tahoe in a fat suit. A body on frame anachronism that not even a G.I. Joe doll could love. – jl

7. HUMMER H3/H3T – The Edsel had a peculiar name and a “controversial” design. The wrong car for the wrong time, it was a failure from the word go. Sorry. Did I say Edsel? I meant HUMMER H3. – wcm

6. Dodge Nitro – Do you think the tropical-paradise-nuking French care that we put panties on a few prisoners’ heads? No, they abhor our conspicuous consumption and tough-guy dress-up routines. To show them we have a sense of humor, we should send them the Dodge Nitro: a slow, cramped, artless knockoff of a HUMMER H2. Either that or use the Nitro as artillery shells. – jl

5. Dodge Caliber – As the ad campaign put it, the Caliber is anything but cute. Specifically, it’s noisy, garish, heavy-footed, hard to see out of, gutless, inefficient and poorly built. By trying to tart-up a compact to look like something Americans loved (big utes), Chrysler destroyed nearly every benefit of the small-hatch form. – en

4. Chrysler Aspen / Dodge Durango – You can dress up an ancient, arthritic, gas-sucking, poorly-packaged Dodge Durango as a Chrysler Aspen, but you can’t take it anywhere. Saying that, you can give it an expensive two-mode gas – electric hybrid system and drive it to Congress to get a bailout. But then people who know cars will laugh. As they should.  rf

3. Chevrolet Aveo – The Aveo continues to offer a snap-crackle-pop interior, mediocre gas mileage, roly-poly handling and gutless onramp terror. With GM touting for bailout bucks, the fact that this sad excuse for an economy car comes from Korea is painfully poignant. And just plain painful. – en

2. Jeep Compass – From droning tires to a jouncy suspension to an engine that moans more than a five-year-old denied Disneyland, this un-Jeep is a cacophony of cheap. Design-wise, The Compass is a sub-moronic riff on the brand’s storied heritage. If you need further proof that Jeep Compass is an abominable snow job, check out the fake rivets on the shift knob. Better yet, don’t. – rf

1. Chrysler Sebring / Dodge Avenger – What do you do after a tremendous, demographic-busting hit like the 300C? If you’re Chrysler, you offer up a malformed, worst-in-segment, natural-born rental car and expect consumers to buy it. When historians write Chrysler’s obituary, the Sebring will get its own chapter. – jl

You have chosen…wisely. These are surely the most putrefied products on the automotive landscape today.  But what about the rest? How did the also-rans rank? Here they are, in order from number 11 through number 23:

11. smart fortwo
12. Jeep Commander
13. Pontiac Torrent
14. Chevy Colorado / GMC Canyon
15. Cadillac Escalade
16. Lincoln Mark LT
17. Scion xB
18. Kia Amanti
19. Chevy Cobalt / Pontiac G5
20. Suzuki Forenza
21. Tesla Roadster
22. Buick Lacrosse
23. Saab 9-5

And so ends yet another TTAC Ten Worst Vehicle award. Will anything change before the 2009 awards? With everything that’s going on in the industry right now, something has to change. But rest assured that unless everything changes for the better, we’ll be back in a year, looking at next year’s latest crop of automotive atrocities and singling out America’s Ten Worst Vehicles. Meanwhile, thanks for your help, support and snark. We couldn’t do this without you. Nor would we.

“La plus belles des ruses du diable est de vous persuader qu’il n’existe pas.” Baudelaire, straight out of The Usual Suspects. And while the world focuses on the usual suspects of the auto-industry collapse, something odd is happening over in a shadowy corner: Honda is running scared. It’s been less than four months since the Civic sold more than fifty-two thousand units in a single month, toppling the almighty F-150 from its two-decade-long run as the best-selling vehicle in the United States, but if anybody at the Big H is celebrating, they’ve apparently decided to hide their exuberant light under a bushel of program cancellations, production cutbacks, and a panicky sale of their backmarking F1 team. Why? Surely, if anybody’s in good shape to survive the coming catastrophe, it’s Honda; they have the small cars people “want,” unimpeachable planet-friendly credentials, and a solid base of non-union production. What’s causing them to huddle behind their hurricane shelters? The answer’s simple: when it comes to Honda, reality is very, very far away from the public perception.

Americans are accustomed to thinking of Honda, Toyota, and Nissan as being the “Big Three” of Japanese auto production. Not quite. Honda sells more Civics in the United States than they do cars in Japan. A quick troll through Honda’s annual report reveals a corporate iceberg: The tip: Japanese-market auto and motorcycle sales. The nine-tenths below the surface: North American cars-– and Chinese scooters (by unit volume are Honda’s best-selling products).

More than any other Asian automaker, Honda’s fortunes are tied to the United States. The collapse of the American auto market would effectively turn back the company’s clock to 1970, making them once again a small-time producer of two-wheeled vehicles for emerging markets.

So what? Honda’s the small car company! Surely, they’ll benefit more than anyone else from the recession-that-isn’t-quite-yet-a-depression? Not so fast…

When Honda began producing Accords in Ohio twenty-six years ago, all of their cars were smaller than a Chevrolet Citation. Today, the upmarket versions of the Accord tip the scales at close to two tons, while the Civic is bigger than BMW’s 135i. The 2009 Fit is certainly small, but in stick-shift form it can’t even match the Chevrolet Cobalt XFE or (gasp) Ford Focus for EPA highway mileage.

Time for that iceberg analogy again: the public image of Honda in the United States is as a purveyor of small, fuel-efficient models, but the bulk of their sales happen below the water with the Accord, the Acura TL, the forty-five-hundred-pound Pilot and the Cyclops-sized Odyssey. Nor could Honda quickly change their Marysville, Ohio and Lincoln, Alabama plants over to small-car production; these facilities are built around Accord-width vehicles and would require a nontrivial investment of time and money to retool.

Faced with a market which preferred the Fit to the Acura MDX, Honda might just do the easy thing and bring Fits in from their Chinese factories, allowing them to scale back US production to the bare bones.

Honda has plenty of money in reserve– over nine billion dollars in cash and investments. As we’ve seen in the past few months, it’s easy to burn through billions of dollars if you can’t move the metal. Some of that money will also be needed to expand motorcycle production for the Chinese market, and you can bet that, given a choice between spending money in a collapsing American economy or making money in an expanding Chinese one, Honda’s board of directors will choose the sure thing.

While relatively adventurous by the standards of other Japanese companies, Honda doesn’t like to take any risks which aren’t absolutely necessary to its survival.

That same relentless pragmatism has informed Honda’s indifferent attitude towards its enthusiast owner base in the past decade. It has now been a full decade since Honda introduced a new sporting vehicle for the American market. The S2000, introduced to compete with the BMW Z3 and first-generation Boxster, now faces the second-generation Z4 and the second variant of the second-generation Porsche. The Acura NSX, fresh from the indignities of a bug-eyed facelift and a mercy killing, is now officially an orphan.

When times are good, Honda doesn’t do much for their biggest fans; when times are tough, it does nothing at all. The company which powered the mighty Ayrton Senna to three World Championships has just abandoned his nephew Bruno in its ignominious quick-march backwards from Formula One, an unfortunate coincidence that emphasizes Honda’s unsentimental attitude towards the men and women who are fans, not merely owners.

In a perfect world, Honda’s reaction to an economic crisis would be the creation of exciting, enthusiastic cars that met the needs of the economist, the enthusiast and the environmentalist in one brilliant design. It’s happened before: the 1989 Civic Si that I am contracted to drive in NASA’s endurance-race series next year is a prime example of a car that was all things to all small-car buyers. Today’s tubby Civic, lumbering beneath the burden of half again as much weight as its predecessors, isn’t the car for the job, and two-ton Accords won’t carry the company very far into a fuel-starved twenty-first century.

Perhaps the new Insight will be the answer to Honda’s problems. I suspect it will be nothing more than a pale Prius copy. The next generation of Honda cars needs to recapture the tradition of those brilliant early Civics and Accords. More importantly, the company needs to recapture its bond with its most fanatical owners. Without that bond, well, another quote from The Usual Suspects: “And like that, poof. He’s gone.”

The President’s non-plan for saving the American auto industry actually works. Believe it or not, it’s a stroke of genius for what it doesn’t do. And that’s not forcing any change on the automakers other than to come up with yet another restructuring plan subject to certain government imposed guidelines. Readers of TTAC know that it’s almost a sure bet that this next round of restructuring will fail. And that’s why it’s such a smart plan. Bravo to Bush!

The set up is simple. Without funding, GM and Chrysler would have gone bankrupt. Under a sudden bankruptcy, billions of dollars in unpaid trade payables would have become pre-petition claims, unpaid, with little hope of recovery. OK; a bankruptcy judge would have put critical suppliers to the head of the queue. But the main point: the fragility of Detroit’s supply chain would have been… tested.

Thousands of dealers would go dark too. The automakers owe them a billion bucks or so for holdback, incentives, warranty, etc., which they would never see again. While still protected by a contract, labor would have a job on paper only. So doing nothing would have created a huge mess, and likely dragged Ford down the drain as well.

The President had to do something to keep these companies from really stinking up the place. Money was the only answer. Time was short. Thankfully, Congress failed to pass its own plan. Any such bailout bill would have become an endless quagmire: a triumph of political maneuvering over common sense, economic reality, and green-party mandated product decisions. Decision time for the chief executive. Well, Treasury Secretary Hank Paulson and company.

The plan’s brilliance: it doesn’t do enough. By design. It’s just enough money to keep the lights on for a few weeks. Sixty days, tops. During that time, both GM and Chrysler must come up with a restructuring program subject to the guidelines in the loan agreements. in a nutshell, these terms force labor wages and work rules parity with transplants, debt exchanges of two-thirds, rationalization of work force, dealers, and suppliers and achievement of a positive net present value (NPV) as a result. Don’t ask what that the NPV is calculated on; I’m not sure anyone knows. Loosely translated, it means “get your shit together.”

Of course, none of this restructuring will actually happen. The tide is heading out. We’re about to see what’s hidden beneath the water’s surface. Cue the scramble among all the parties to protect their own interests-– screw the other guy. Within two hours of the announcement, the United Auto Workers (UAW) asked President elect Barack Obama to remove the “onerous terms” imposed. Just wait until the debtholders-– bolstered by armies of lawyers– get into the act. And dealership rationalization? Look it up at ain’tgonna happen.com.

The bottom line: there can be no real restructuring without bankruptcy.

When all this comes out. Obama, the Congress and the rest of America will see the problem for what it is: a black hole.  There’s not now, nor will there ever be, enough public money to placate the hungry wolves. All taxpayers can do is offer GM and Chrysler another section on the bridge to bankruptcy.

GM gets more money than Chrysler, $9.4 billion more for a total of $13.4 billion. Why? ‘Cause GM has to make it. It will be one of two remaining domestic automakers remaining at the end of this process. Can’t let this behemoth run out of money sooner, only because we know that more money will come later in bankruptcy.

And for Chrysler, it only gets $4 billion, no more. And that won’t get it too far down the road. In fact, there’s no road either– this is just the beginning of the parceling of its valuable parts to others. Bankruptcy means death for the Pentastar. And to prevent Cerberus from running off with the government money by finding its way to Chrysler Finance, Paulson required the finance company to guarantee $2b of the bail out funds given to the Motor Company. Take that Mr. Feinberg!

Again, this bailout provides just enough money to keep the ships afloat for now. The false promises of management-led restructurings will never be realized. It’s a scramble for the table scraps. The President did the minimum necessary purposely. His team figured it was better to watch these companies self-implode– on someone else’s watch– than dictate the terms of the collapse. We’ll be watching.

I am going to go out on a limb…sort of…and state the following: GM will go into bankruptcy within the next 60 days, and Chrysler will be liquidated. Dollars to donuts that will be the President’s plan… although in a highly disguised form. The public may see it as a rescue, but it’s really just the beginning of a long and painful readjustment coming for Detroit. So how did I reach this conclusion? Follow the breadcrumbs. Given the time necessary to craft the President’s bailout plan – likely to be presented by this Friday – this tells me that it’s going to be much more than just a loan with a few strings. Methinks it will have three key points:

•    Immediate cash assistance to GM and Chrysler with adequate taxpayer protections;
•    Requirement to prepare a pre-packaged bankruptcy immediately; and
•    Assurance from the Government that it will provide guarantees to commercial lenders for the future DIP financing. And warranty guarantees for new car buyers.

Moody’s released a document this week outlining three possible scenarios for Detroit. Its most favored scenario, to which it ascribed a 70% probability, was “Pre Packaged Bankruptcy with Government Assistance.” Now how the heck could Moody’s possibly know that this was the most likely scenario? Oh wait, Mark Zandi, their on-board economist, did testify at the second automaker Congressional hearings that it would take $75 to $125 billion to restructure these companies without a bankruptcy.

The scary thing is that he’s right, and Secretary Paulson knows it and believes it. Hmmm, maybe the good Secretary did leak his thoughts to Moody’s so they could float this “pre-pack plan” out into the financial ether?

Second, during a live interview on CNBC on Tuesday afternoon, Hank “the Hammer” Paulson supported this conclusions. In his interview, Secretary Paulson outlined four elements in crafting the loan program:

•    Temporary bridge loan only;
•    Protect the taxpayer money advanced in a loan;
•    Make the automakers show a path to viability immediately by demonstrating shared sacrifice by all stakeholders; and
•    Avoid a disorderly failure of the companies.

This means that any funds advanced will be of short duration only – for the next 30 to 60 days – to enable GM and Chrysler to come up with a negotiated plan. And there’s no way Obama will reverse this. It’s becoming more obvious every day that only a bankruptcy filing can restructure these two companies. Congress and the new President will have little incentive – never mind the ability – to change the inevitable outcome. But wait, there’s more!

There will be a requirement for each company to fully collateralize any loans with assets that would remain outside a bankruptcy filing. For GM, this would be some blanket collateralization of its unencumbered ownership stakes in its foreign entities. (GM’s Mexican operations have already been pledged for its secured bank line of credit.) Chrysler’s lenders have a blanket encumbrance on the entire company. Either Cerberus will have to offer another asset or cash as collateral  or Chrysler goes away into the night.

And we’re going to get a “car czar” empowered by Treasury to manage the loan grants and upcoming bankruptcy proceedings. Look for Mitt Romney to become the “face of the government” upon the stakeholders– and he’s already written in the New York Times that bankruptcy is the only road to salvation.

The upshot of all of this: meltdown in Detroit. Ford has to pray that the liquidation of Chrysler goes smoothly, and that the shrinking of GM takes some time too. This will give their suppliers time to adjust to a new reality.

In the meantime, there will be great deals on GM and Chrysler products. Even with the plant shutdowns for January, there’s still a ton of iron sitting on dealer lots. And when the bankruptcy gets filed, the fire sale begins. Americans love a bargain, and new vehicles, even from a bankrupt automaker, can be sold at a price. But it’s also going to be the end for thousands of dealers.

So on Friday, the government will offer approximately $6b – $8b to GM, and a lesser amount to Chrysler, maybe only $4b – $6b. Collateralized. GM can do it. Chrysler can’t. There’s a gun to the head of the dog – put up something of equal value or don’t – you make the call Mr. Feinberg. In the end, it’s still going to be bankruptcy for both, with GM coming out the other side with Chevrolet and Cadillac, and Chrysler being parted out. Watch this space.

Volvo is Latin for “I turn” (as in “revolving credit” of lore, or as in “revolver” for people who can’t get one.) Nomen est omen: Never has the word been truer than now, as the formerly glorious Swedish brand is being offered-up for a gang-bang.

From day one, TTAC chronicled the trials and tribulations of the D2.8 to sell as many brands a possible to the highest bidder. The news cycle on that is predictable. We report it. They deny it. Pom-pom waving bloggers drop their cheer-leading acoutrements for a second, wave the denials, and call us idiots.  Shortly thereafter, The Truth About Cars offered to India and China comes out, usually by way of the Indians saying that they don’t have the money, or the Chinese saying that they looked and lost interest. All while Detroit denies that anything of that nature may be going on.

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It’s that time of the year when industry pundits [usually] run out of news. Normally, this leads to retrospective reflection and informed speculation. The autoblogosphere has been pretty bad at this, of late. They missed  carmageddon more or less completely, treating Detroit’s BS like the Lord’s own gospel. That said, TTAC has offered its share of botched timelines and devil-may-care details. One nice, unforeseen twist: Ford. CEO Alan Mulally flew in from Seattle and kicked some Blue Oval butt. As a result, I give FoMoCo a chance of making it– albeit a shot rather than a dead cert. Ford must withstand the fallout to come, as GM and Chrysler head for bankruptcy. Now that’s for sure– regardless of the automakers’ progress on Capitol Hill of Pennsylvania Avenue. While I’m at it, I’ll go out on a limb and make some more predictions for 2009.

Near Term – Next Few Months

I repeat: the U.S. federal government will bail out Detroit. Despite the Republican Senators’ moaning and groaning and defeat of the first go-around, the money will head for Motown– even though the bailout billions only delay the reckoning day for a few months. Plenty of TTAC fodder ahead as we watch GM and Chrysler try to negotiate with their creditors and the UAW.

GMAC will avoid going bankrupt– barely. The debt exchange hasn’t been going down well with bondholders; it’s now on its last iteration with plenty of sweeteners. But they’ll make it across the finish line. GMAC will convert to a bank holding company and voila! Another government bailout via TARP. Too bad its base of principal customers– GM dealers and their car buyers– is gonna be much smaller. And soon. Another bad deal for Cerberus. No tears here.

Auto sales will still suck. Yep, the entire first quarter will be a disaster for everyone. More dealers will fail; at least a thousand. All manufacturers will cut production. Again.

Transplants’ fear of the UAW organizing their plants has disappeared. Their workers know for certain that union affiliation has zero benefits (as if it ever did before). The Republican bailout bill mandated that Detroit blue-collar working stiffs get paid the same as Toyota workers today, not in the future. In the next Congressional go-around, the Republicans will stick to their guns on their “wage parity” demand. So why would transplant workers consider organizing and give two hours a month of pay for union dues and get nothing in return? Answer they wouldn’t.

Toyota and Honda will furlough employees.

Ford’s MY2010 Fusion will get [more] rave reviews. Three years since the launch of the Hermosillo trio, Ford’s redesigned and reengineered C/D mid-size vehicle will be hailed as a true competitor to the Camcord duo. FoMoCo’s four cylinder EcoBoost will provide more power with better fuel economy than any engine from the Japanese. And the Fusion hybrid, with its US-sourced technology, will officially beat the pants off Toyota’s hybrid. Only problem: low gas prices mean no one will care.

Mid Term – Next Spring/Summer

Assuming the government steps up this week with a federal grant (a.k.a. loan) now, GM and Chrysler will go belly-up later. Over the winter, the financial situation at both companies will worsen, and the cash burn will increase. There’s not enough emergency money in the government kitty. Worse, the attempts to get reorganized outside of bankruptcy will fail miserably; every single creditor will want a better deal. The UAW will show its real intentions: no sacrifices. “We already gave.”

The car czar will have no enforcement power to make the deal work. And even if he does, the cuts required will be so drastic that they border on ridiculous (at least outside of bankruptcy).

Cerberus will refuse to support Chrysler. It will go straight to Chapter 7.

Congress will step in with Debtor-in-Possession (DIP) financing for GM. Expediting the bankruptcy, cutting out any negotiation in the bankruptcy process among creditors, will be allowed as a “national matter.” Some will cry foul, but Obama will take the lead from his “bully pulpit.” Hard to argue with the President – makes you look bad.

The biggest losers will be the bondholders – the hedge guys get their knees chopped off in the non-negotiated reorganization. Amazingly, GM will still believes it can support its multiplicity of brands. Thankfully, Rick Wagoner will resign (forced out) and take rest of the Board with him to Aruba. The new CEO will call the game: Chevrolet and Cadillac are the “go forward” brands. The Swedish government will take on Saab (and Volvo from Ford). Every other GM brand will die.

Ford will get close to seeking government assistance, but instead tap its credit line. Ford will count on picking up sales as Chrysler folds, especially in the truck business. CEO Alan Mulally will decide not to replace Chrysler’s foregone rental fleet business with his own vehiclesl he will figure that nameplate devaluation will be too severe. GM will jump on with the business along with Hyundia, Kia, Nissan,and Toyota. But Ford will have a new problem: GM’s cost basis will be lower than Ford’s.

Long Term – Fall

Ford will negotiate a partial debt for equity swap with its debt holders. The deal will dillute current shareholders but the possibility of prosperity is on the horizon. Mulally will keep the Ford jet and his paycheck. Time will name him “Person of the Year.”

GM will undergo a painful restructuring. The dealer body count will fall drastically. Half of GM’s labor force will get shown the door, with little compensation. The UAW’s health care VEBA superfund will get stock in the new GM but little cash. It will be enough to give UAW retirees full health care coverage short term, but it will only be a promise for the future. Ouch.

Parts of Chrysler will find their way to other car companies. Mostly to GM, which will get the minivan business. Ford will scarf the Jeep brand but only pick up the Wrangler. Nissan will pass on the Saltillo truck plant, rightly  figuring it can never compete with Ford, GM and Toyota in the pick up market.

As the credit crisis passes, car sales will rebound late in the second half of 2009. But to everyone’s chagrin, car prices actually increase, forcing folks to “trade down.” This plays right into Ford’s 2010 playbook with its line up of well-equipped small cars.

What say you?

When I was growing up in Rhode Island, the state was run by the mafia. Politicians, police, priests, judges, juries, firemen, trash collectors, teachers, unions– anyone who had power owed that power to Raymond L.S. Patriarca. Period. In the last forty years, the mob’s stranglehold on the Ocean State has dissipated– even if the stench of corruption remains. But it’s too late. The mob-controlled unions and their corrupt enablers destroyed Little Rhody’s industrial base. The state will never be a locus of, well, anything. And yet people call talk radio and wax lyrical about “the good old days.” Justice was for sale. Racism endemic. Violence systemic. Priests buggered little boys with impunity. “But at least you could walk the streets without fear.” This, Detroit, is your future. And you can thank your godfather, GM.

You can almost feel the anger coming from Detroit these days. The sense of betrayal radiates from hometown journalists like heat off a desert parking lot. How could Washington turn its back on us? How could they treat us like goombas? Don’t they know who we are? Yes, they do. And they don’t care. Why kow-tow to yesterday’s boss? But that’s not really the point. Detroit’s anger is fully justified. Something bad has happened. Something that could have been avoided. Should have been avoided. But this animus, this furious indignation, is entirely misplaced.

It is GM that betrayed Detroit, not Washington. Instead of sorting out their business, GM’s capos spent the last four decades dining at fancy restaurants, smoking fine cigars, flying around in Gulfstream jets and doing… nothing. And then, when they finally grasped the fact that their goose was cooked, they ran to Uncle Sam and said, “Let’s do a deal.” GM CEO Rick Wagoner faced the Senate and told Dodd et al that he’d agree to anything to secure the bailout bucks. Oversight? Car Czar? Deadlines? “I think we would could live with that.”

As a friend of ours likes to say, there is no honor in this. GM’s CEO should not have come crawling back to D.C. in a Malibu hybrid to beg for a taxpayer handout. At the very least, Wagoner should have resigned after his first, disastrous Congressional appearance. Either that or he should have poured bankruptcy expert Jay Alix a stiff whiskey and told him to file for Chapter 11. Wagoner would have spared his employer the final indignity of watching Congress and the executive branch remove GM’s ability to determine its own fate.

“But no one will buy a car from a bankrupt automaker.” Excuse the profanity, but who the fuck cares? GM is bankrupt. Its liabilities currently outweigh its assets by a factor of ten. A government loan will simply add another creditor to a long list. Head of the line, back of the line, big whoop. The fed’s $13b will keep GM on life support for what? A month? Three? And then what?

As there’s nothing GM can do to generate the profits it needs to cover its overheads, as any real turnaround would take over $100b and at least five years, sooner or later, GM is headed for more public humiliation. How much more of that can GM take?

It’s one thing to get steamed at a politician for pissing away $700b of your hard-earned money for his or her best buds on Wall Street. All you can do is not take out a loan from TARP-blessed banks (that won’t give you a loan anyway) and/or vote the offending politicians out. You know; later. But if a carmaker is blowing your taxes, retaliation is easy. You don’t buy their products. You want my business? Sorry, but I gave at the office.

Mark my words: if GM uses taxpayer money to stave off bankruptcy, and then comes back for more, executive haircuts and public equity stakes won’t do squat to mollify an enraged public. There will be a consumer backlash that will make bankruptcy seem like a J.D. Power Award.

Meanwhile, GM and its camp followers are dazed and confused. Just like the little old ladies who used to promenade up and down Atwell’s Avenue without a care in the world, they don’t understand why things have changed. They will never understand that they sat atop of a pyramid of abusive exploitation. In the same sense, GM’s customers subsidized Detroit’s sense of wealth, safety and entitlement by buying shoddy vehicles. But only because they had to.

As soon as they didn’t have to, they didn’t. And then it was only a matter of time before the old corrupt system collapsed. Reform? The man who could have created life-sustaining change for GM through C11 (albeit three years ago) is in federal custody. Powerless. Someone somewhere else is large and in charge. Depending on your perspective, you might even call it progress.

Many have been guessing what annual U.S. car sales would amount to this year. Some confused souls predicted sales as low as 10m. J.D.Power now has the pretty firm conviction that the year will end with 13.2m light vehicles sold for the year in the United States, down 18.5 percent from 16.2m in 2007, says the Automotive News (sub) who received an e-mail from J.D.Power. However, the big slump happened in the last 4 months. For the last 4 months, monthly sales were under 1 million. Total light-vehicle unit sales will hit 870,000 this month, down 37 percent from December 2007. Now THAT’S bad. That puts the seasonally adjusted annual rate to 10 million light vehicles in December, down from 10.3 million in November. Now THAT’S even worse. The rate had not fallen to 10 million since October 1982. Meaning: The worst is yet ahead. If the non-buying trend continues, the confused souls will be right next year and we could see only 10m units sold in 2009. China wanted to sell 10m units in 2008, a target they will not reach. With a little luck, and an economic stimulus program that works, China could make the target next year and, horror of horrors, turn into the world’s largest auto market.

PS: According to the China Association of Automobile Manufacturers (CAAM), Chinese auto makers produced about 8.7m automobiles and sold more than 8.6m from January to November. They will close out the year in the mid 9m.

Earlier this month, in their search for bailout bucks for Detroit, Congress caved to the President’s insistence that legislators leave the $700b Troubled Asset Relief Program (TARP) alone. Last week, Congress failed to activate Plan B: hijacking the $25b funds they’d already allocated to the Department of Energy for “retooling” loans. At the eleventh hour, President Bush said, “Oh, alright then. Let’s talk TARP.” And so Plan C: the President of The United State will outline his plan to put up to $15b in play from the TARP monies. It’s a stunning about-face, whose details will be revealed on Monday. Those are the broad strokes. Before suggesting the presidential approach to Detroit’s debacle, let’s zoom in…

Congress’ bailout bill blew-up in the Senate, not the House, which gladly offered-up your money for a faulty plan. The Senate Republicans were not happy creating a powerless “car czar” to oversee the public purse. Senator Dick Shelby was right– the toothless bill would have become an endless payout to Detroit. Senator Corker offered the United Auto Workers (UAW) a deal to make it work. UAW Boss Ron Gettelfinger passed on “parity” with the transplants, as Corker demanded in his alternative legislation. Big Ron said they’d talk about it at their next contract round, in 2011.

And there you have it: proof positive that the UAW isn’t about to make a wholesale change in how they do business. If left in the care of an enfeebled car czar, they’d go along to get along, and nothing more. And now the UAW is banking on money from the TARP as a “holdover”– so they can maintain the status quo until a Democratic President and Congress can… maintain the status quo.

And this is just the union side of the equation. For some reason, GM CEO and Chairman of the Board Rick Wagoner is still in charge of the failed American automaker. Congress has bought Wagoner’s umpteenth “turnaround plan” without question. This despite the fact that its worst case scenario is too optimistic by half and there is nothing within it– nothing– that promises a necessary product and brand-related renaissance. As long as Wagoner’s administration remains, the possibility of GM making profits is– indeed remains– minimal.

So now the ball’s in President Bush’s court. Short of letting the free market exact its final determination (an inevitable reckoning), it’s time for a tough deal. In fact, President Bush has the opportunity now to craft the deal that needs to get done, recognizing the fact that GM and Chrysler are already bankrupt.

First, the President must demand that each company puts up collateral equal or greater to the loan amount advanced. Since no commercial lender will provide funds, and the government is using our money, we want protection. Especially as $15b represents a lifeline to future funding requests, not a solution to GM and Chrysler’s fundamental problems.

This caveat would force Chrysler’s collapse. This company has no collateral of value; existing lenders already have tied that up. Either Cerberus puts something else up of value, or it doesn’t. And that means lights out for the Pentastar. That’s a good thing for taxpayers; there’s no future for Chrysler on its own. Period. And ChryCo’s cratering will help GM and Ford survive.

Second, the President must demand that the UAW immediately end the JOBS Bank (not just suspend it). The JOBS Bank language effectively forces GM (and the rest of Detroit) to pay off workers with huge termination packages to leave their jobs when plants are closed. It’s the so-called “Attrition Program” agreed to by the UAW. I’m not against providing some money when jobs are lost, but GM needs to restructure now (again). It can’t afford big payouts to let labor go.

Third, the President must insist that GM begin negotiations to restructure its balance sheet. The Commander-in-Chief can force GM to provide a go-forward balance sheet and viable operating plan– by not advancing the total funds GM needs to survive until March. He can set January 15th, a week before President Obama takes office, as a deadline.

Basically, we’re asking GM’s highly paid bankruptcy advisory team to write the Plan of Reorganization (“POR”) today (without negotiation with creditors). This POR would illustrate – in a public document – exactly how GM can become a viable company. It would let outsiders comment on its validity and believability. It will tell all the parties where they will come out in the end. And it sets the stage for President Obama and Congress to make the final decision whether it’s better for GM to go through bankruptcy or not.

Lastly, the President should place all the usual terms and conditions about executive compensation, prohibitions on golden parachutes, no mergers/acquisitions and tough GAO oversight with weekly reporting.

I hope that President Bush doesn’t punt on his responsibilities with our money. Kicking the problem down the line to the next administration is an easy solution, but not the right one. The President needs to step up and start the end of the madness. He should set the stage for a real and meaningful program for a long overdue restructuring of GM. Chrysler is already dead, so why continue the charade? Ford, well that is for later…

The bailout bill’s demise in the Senate is inspiring all kinds of unhinged commentary this morning. Even by the recently declining standards of discourse, some of the comments we’re seeing around the autoblogosphere are sublimely ridiculous. By the tone many commentators are taking you’d think the US has never overcome adversity before, and lacks the entrepreneurial vigor to survive a highly necessary reorganization and rebirth of our domestic automakers. Rather than calling on Detroit to slow down its little red love machine and find a business plan that’s gonna last, we’re hearing some of the most prominent names in the business calling for a new lender of last resort. Namely that lamest of lame ducks, President George W Bush.

Having opened the opportunity for an epic flip-flop on the use of TARP funds, W has brought Automotive News [sub] publisher and editor-in-chief Keith Crain to the mountain top, with co-author Peter Brown in tow. In a piece that puts the “bs” in subtle, Crain offers W an opportunity to rescue his DOA “L” word (legacy, you perv) by showing “leadership and statesmanship.” By reassuring Americans that we have survived worse than this and reaffirming our national commitment to the principles which made our economy great?

Of course not. Crain blames a “Senate minority” for the bill’s failure, and then admits that Corker’s plan “could be a basis for a viable industry,” but only if W makes with TARP funds first. But his argument is predicated on the assumption that, like ethanol, a Detroit bailout might be reborn in Obama.

And indeed, Obama is continuing to make noises about finding “a way to give the industry the temporary assistance it needs while demanding the long-term restructuring that is absolutely required.” Based on his “disappointment” at the failure of the bailout plan, it sounds as if he would support a Bush TARP raid for the industry. But he’s also not leading any charges on the issue, thanks to his own ambitious spending plans.

Between massive infrastructure investments, health care reform, and a homeowners assistance plan, Obama has plenty of plans for your tax dollars. Plans that he knows carry little of the baggage that an auto bailout drags around. Now wonder the Wall Street Journal reports that cooperation between Bush and Obama over TARP policy is breaking down. Furthermore, SecTreas Paulson has “indicated he wants to consult with the Obama team on any big moves, especially a draw down of the next $350 billion. Mr. Paulson doesn’t want to commit funds to a program if the new administration might later undo the effort.”

If Bush and Paulson get a go-ahead from Obama to spend TARP funds on a bailout, it would be a return to the unpopular position of giving money without real conditions.

Specifically, the blocking Senators blame the UAW for not making immediate sacrifices. The UAW is holding to its position that wages should come to parity with transplants, but not until 2011 when its current contract ends. As with two-tier wages in the 2007 contract, this gives the UAW the luxury of appearing to make concessions while protecting its longtime members and their considerable perks. It also allows the UAW to call the negotiation breakdown “a blatant attempt to make workers shoulder the lion’s share of the costs of any restructuring plan” in a prepared statement.

The fact that UAW President Ron Gettelfinger refused to even meet with Corker and the Senate Republicans severely limits any mileage the union might get out of its populist rhetoric. And proves how hard the reforms Obama calls “necessary” will be to realize.

Ultimately, this decision will come down to George W Bush– making it nearly impossible to predict an outcome. Bush had previously opposed a bailout, then opposed use of TARP funds, and is now departing from both of these positions. As a lame duck he could either stand firm on principle, or he could cave in to rescue a severely tarnished reputation.

Needless to say, I advocate that he take a moment to think about throwing away market principles in the face of a wave of self-interested doomsaying. Look at the auto industry employment numbers, and then gauge the mileage in subscribing to the “coastal conspiracy” and “civil war redux” theories. And for goodness sake, think twice about the real impact of a D3 bankruptcy on the jobs situation.

If all the necessary concessions from labor, bondholders, management and dealers were readily available, a compromise could well have been reached over the last few weeks. The desperation of the situation has been clear for all to see. Dumping money on the problem certainly won’t increase any of the stakeholders’ incentive to make painful reforms.

Meanwhile, $14b could do plenty of good mitigating the pain of a weak economy for all Americans, rather than for only the most shrill. If Detroit goes down, we can survive.

You’ve seen the list of TTAC’s Ten Worst nominees and discussed their merits or lack thereof. Our crack team of freelance writers have surveyed your list of losers and narrowed it down, from 119 crapmobiles to 23. (There was a four-way tie for position 20.) Make the jump to savor the list of finalists. And then, the moment of truth. Click at the link at the bottom of this post to select your ten choices for TTAC’s Ten Worst Vehicles for 2008. [Multiple voting or clever geeky cheating will result in a permanent site ban.] Other than not buying these machines, this is your best chance to send their creators a simple message, as espoused by Roomful of Blues: “that will never do.”

Buick LaCrosse
Cadillac Escalade
Chevrolet TrailBlazer / GMC Envoy / Isuzu Ascender / Saab 9-7X (GMT-360)* **
Chevy Aveo* **
Chevy Cobalt/Pontiac G5
Chevy Colorado / GMC Canyon
Chrysler Aspen / Dodge Durango* **
Chrysler Sebring / Dodge Avenger*
Dodge Caliber
Dodge Nitro*
Hummer H2* **
Hummer H3 / H3T*
Jeep Commander
Jeep Compass* **
Kia Amanti
Lincoln Mark LT**
Pontiac Torrent
Saab 9-5
Scion xB
smart fortwo
Suzuki Forenza
Tesla Roadster
VW Routan

*2007 Ten Worst Winner
** 2006 Ten Worst Winner

This year’s choices range from the minuscule (smart fortwo) to the monstrous (Escalade, H2, Aspen/Durango). There’s high tech (Tesla), low tech (LaCrosse), no tech (Colorado/Canyon). Just to show that those who don’t learn from their mistakes are condemned to repeat them, every previous winner that’s still in production made it back for another round (save the Subaru Tribeca née B9). The Detroit Three seem to be getting their act together– or the competition is getting worse. This year marks the highest number of foreign nameplates in our third annual TTAC’s Ten Worst finals.

A couple of things about the list may catch your eye. First, the dismally Daewooian Chevy Aveo is listed, but the Pontiac G3 is nowhere to be found. That’s because the G3 won’t go on sale in the U.S. until spring of next year (if Pontiac lasts that long); it’s ineligible for this year’s award. Also, the Aspen/Durango Hybrids are combined with the rest of the Asparango lineup because they received about the same number of votes. Why choose between one or the other, when they’re both what the bull left in the barnyard?

The rest of the list is pretty straightforward. So which of these excrable vehicles deserve to be called TTAC’s Ten Worst of 2008? Click on the link below, jump to the poll and vote for your favorite (least favorite?) nominee. Voting closes at midnight EST Sunday, December 14th. The winners will be announced toward the end of the week. Thank you for your participation.

Vote here

Well, you know how it is. Every now and then we turn our anti-flaming rules off so that we can debate our editorial stance– or, more precisely, stances. In other words, if you wish to slam the site, this is the time and place to do it. That said, I will delete comments that stray over the line between you suck and here’s why and you suck you NSFW NSFW NSFW. To get things started, I’ve republished an email from a “fan” after the jump, with my answers to his main points. In any case, thanks for all your comments, which help make TTAC an island of semi-sensible discussion in a sea of inchoate insults.

“I’m still not able to post to TTAC….short of maybe getting a new e-mail address. BUT, that may be OK. At one point, the TTAC commentary on the Big3 amused me. But as time goes on, it appears to be more and more biased, specifically against GM, the company that I am a part of, and I have recently been reconsidering the impacts of TTAC commentary.

You often call others out on non-objective journalism, but I would like to ask you to look in the mirror. I applaud your mission to provide “Candid and unbiased auto reviews by industry experts”, as this allows consumers to make more informed choices when they make one of the more significant purchases in their life.

If, however, a customer is reading about a great new car that GM, Ford, Chrysler, or even Tesla are making, but the first editorial that pops up is slamming the company, culture and management…..don’t you believe that person will reconsider the strength of the review and their purchase decision.

Yes, I’m suggesting that the management editorials may be having more impact on customer choice than TTAC’s unbiased product reviews.

As I mentioned before, I am a part of GM, more specifically an Engineer in Product Development. I take a significant amount of pride in my job and the talent of my co-workers. There are many things that can be improved with the way we do business, and we all work to make those improvements every day.

The environment at work is NOTHING like quoted in one of your pieces. There is a major level of concern regarding all of our futures, but there is also a sense of hope and optimism that we will get to see the results of our hard work as successful products in the marketplace. I have yet to see people praying to get out or excessively stressed about their careers. What I have seen are people putting in longer hours, bonding together, and trying to make the best of a very difficult situation.

Your commitment and devotion to TTAC is very clear. I ask you to please consider:

1. What do you REALLY want TTAC to accomplish and stand for? How is it doing?

2. What kind of culture do you want to encourage? Criticism, support, or objectivity?

3. Is TTAC’s current stance truly un-biased, or is there a huge “I told you so” in the making?

4. How much are TTAC editorials affecting consumer choice? Are consumers really coming away from the site with unbiased information?

5. What kind of companies should the American People support? Companies that have for many years contributed technology, safety, financial support, and higher standards of living, to the betterment of our society? Or, should we support those that contribute in a more self-serving manner. The text below highlights this concern.

6. Are your words putting your neighbor (figuratively, not literally) out of work? Thank You for taking the time to consider another viewpoint.

My reply:

1. As a source for the truth about cars. You tell me. Oh wait…

2. Yes.

3. I’m not sure what “truly unbiased” means. Is it different from unbiased or not-so-unbiased? All I can say is that we– me, you, other writers and commentators– call it like we see it. We try to tell the truth as best we can– given the inherent limitations involved in that pursuit.

4. We must have some impact on consumer tastes– otherwise manufacturers wouldn’t be running ads on the site. Or, on occasion, giving us access to press cars. I’ve had around 50 emails from people who said they bought or didn’t buy a car based on our recommendations. Not a single complaint in that regards. Yet.

5. Americans should support companies by buying the goods and services that they want to purchase (as opposed to, I dunno, a taxpayer-funded bailout). As long as these companies adhere to all applicable laws and regulations, they’re OK with me.

6. My primary responsibility is to tell the truth about cars (and carmaking) to my readers. My second job: to provide a safe place for vigorous debate, so that TTAC’s Best and Brightest may share this freedom of speech in an atmosphere of mutual respect (with a bit of a kick to it, admittedly). My third… nope, that’s it.

RF