The mainstream media’s (MSM) reporting on GM’s “troubles” has evolved. Initially, the press told its audience that The General’s terminal glide path was all part of the wider economic meltdown. As the company augers in for its June 1 federally mandated Chapter 11, the reality of the situation is filtering down the info-food chain. The story has moved from financial reports to the general news to the sharp end: car reviews. For example: today’s Washington Post carries a review of the Pontiac G8 GXP that lauds the Australian V8 four door as “part old-fashioned American muscle car, part sophisticated European performance ride.” And then . . . “That’s good news. But here’s hoping it doesn’t come too late in the news cycle for GM.” Right: stupid news cycle. I blame the news cycle for GM’s upcoming bankruptcy.

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It’s always interesting to see how multiple media outlets interpret stories carried communally. In this case, here’s the beef: Standard & Poor’s ratings agency cut Chrysler’s senior secured first-lien term loan (due 2013) to CC from CCC; and lowered its issue-level ratings on GM’s $4.5B senior secured revolving credit facility to CCC-. (That’s nine grades below investment quality.) Automotive News [sub] waits all the way to the second paragraph before offering Motown apologists a heart to hang on to. “The rating downgrades put extra pressure on the two iconic U.S. carmakers, whose already declining fortunes have worsened during the ongoing global economic downturn.” The Wall Street Journal [almost] gets to the meat of the matter straight off . . .

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It’s not easy to pinpoint the moment when a story makes the transition from speculation to prediction to assumption. But I think I’ve done it. Autoblog is reporting the usual yada yada yada about Cadillac’s product plans [via the Detroit Bureau]. Sub-CTS this, Euro-wagon that, new flagship the other thing. In the midst of the normal regurgitated spin, smoke and mirrors, Chris Shunk let’s this one drop: “The real question for Cadillac is whether or not GM will be able to afford the new models. If the General goes into bankruptcy, nobody really knows what stands to get cut. Shannon optimistically says that GM’s brand bloodletting could work in Cadillac’s favor, though. With fewer brands to feed, GM’s luxury division could finally get the attention it so richly deserves.” Gentlemen, GM’s “We Won’t File C11” has officially jumped the shark.

I had a long conversation with Marcy Wheeler, the woman behind the JPMorgan Chase boycott. As I reported yesterday, the action’s designed to force the bailout-fed bank to take a ChryCo debt cramdown to “keep 300,000 workers employed” and “protect America’s industrial base.” Unlike the organization supporting her cause, Ms. Wheeler really knows her onions, from Cerberus’ perfidy to the importance of the FIAT deal to gas prices and the argument for a “soft landing.” Wheeler made as good a case for federal intervention in the US auto industry as I’ve ever heard (even though she insisted that shit-canning GM’s CEO didn’t constitute federal intervention in the US auto industry). CNN reveals that the majority of Americans aren’t buying ANY of it (assuming of course someone’s selling it). “Three out of four Americans would rather see General Motors and Chrysler face bankruptcy than watch the government pour yet another round of bailout cash into the big U.S. automakers.” Uh-oh.

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The Presidential Task Force on Automobiles (PTFOA) wants GM to get its NSFW together by June 1. To that end, the PTFOA is pressuring GM’s bondholders to take The Mother of All Buzz Cuts. As The Wall Street Journal reports, that means no cash or federal guarantees. “The Treasury Department is pushing GM to offer its bondholders, who are owed $29 billion, a small portion of shares in the company. That’s a sharp cut from a bond-exchange offer GM made two weeks ago, which included about $8.5 billion in cash and new debt in the company as well as 90% of GM’s stock, said people familiar with the terms. The Treasury, which has pumped $13.4 billion into GM to keep it afloat [plus $4.4 billion to come in June], believed the earlier plan was too generous to bondholders, said people familiar with the matter.” Well then, the PTFOA can put GM in C11 and be done with it, right? I mean, what pressure can they possibly bring to bear on GM’s bondholders now that water-boarding is illegal? Actually, this is a post-C11 wrangle.

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As predicted here, the Obama administration is about to buy 17,600 “fuel efficient vehicles” from The Big 2.8. Uncle Sam will spend $285 million of the $787 billion stimulus bill to prop up ailing American automakers. Coincidentally enough, the deal will now go down by GM’s June 1 restructuring deadline. “By swapping out less [Ed. less?!] efficient federal vehicles for new hybrid and fuel efficient ones, this strategy will reduce gasoline consumption by 1.3 million gallons per year and prevent 26 million pounds of carbon dioxide from entering the atmosphere,” the White House said in a statement. So, you ask, what constitutes fuel efficient? Hybrids? Don’t be silly. The D2.8 don’t have enough production capacity for that action. And the answer is . . . ANYTHING! Just as long as the new vehicles are A) built by Chrysler, Ford or GM and B) at least 10 percent more efficient on average than those being replaced. Whoa! Ten percent! If I worked for any of the transplants, I would be angry as NSFW right now. They did everything right and the government rewards the guys who screwed the pooch. Yes, I know: the governments have been buying domestics for years. But still.

From Progress Michigan’s website:

“Today, JP Morgan Chase has sent a signal to the American workforce that they are more interested in churning greedy profits than saving hardworking families from poverty and joblessness,” said Jane Hamsher, founder of FireDogLake.com. “By closing out our Chase accounts and slicing up our credit cards, we’ll be signaling back to the bank that we are interested in rescuing the middle class and preventing Chase from lining its pockets. Boycott JP Morgan Chase today, and save a working American family.”

While I await direct contact with the plastic snipper (robertfarago1@gmail.com), I called Progress Michigan for a little insight into the organization and their cause. After all, if The Detroit News thinks it’s a big story, it must be a big story, right? Define “big.” To that end, I had a little chat with Emma Richardson, PM’s freelance writer. “We’re focusing on saving American jobs and the middle class,” Ms. Richardson opined. As for how bailout-sucking Chase threatens those jobs, and the reasons behind the bank’s decision not to get a buzz cut, let’s just say Ms. Richardson is slightly uninformed.

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Holy NSFW. When Toyota’s No. 1 American executive steps up to the microphone and declares that his employer’s ready for the fallout from a GM Chapter 11, you might as well stamp “done deal” on the, uh, deal. The AP reports that “Toyota Motor Sales USA President Jim Lentz says his company shares about two-thirds of its 500 parts suppliers with GM. . . only a small number of Toyota suppliers are critically short on cash.” Of course, we knew that already. Both the GM and the supplier thing. But still. You gotta wonder: is Jim Lentz sticking the knife in GM to goose ToMoCo’s April and May sales. According to Automotive News [sub], Lentz says US auto sales may rise in the second quarter. Well they will for someone.

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CNNMoney reports that GM is looking to stoke-up on its federal funding to keep the lights on (and the Segeways humming) until its June first bankruptcy filing. I mean, restructuring deadline. And the winner is. . . not the U.S. taxpayer. The General may take the U.S. Treasury Department for another $4.4b hit before Hune1, bringing its total to date to $17.8b, not including the $1b tip thrown GM’s way to help GMAC makes its eleventh-hour transition from deadbeat sub-prime lender to federally flush bank, and back. ALL of which will be written off when GM files for C11. And THEN, presumably, the feds will pony-up the debtor-in-possession financing to establish the new, “good” GM. As my father would say, how much is that boondoggle going to cost me?

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Ah, the good old days, back when the only automotive bailout on the table consisted of a paltry $25 billion federal loan program to retool old factories (a.k.a. Chrysler, Ford and GM plants) to build fuel efficient cars. At the end of last year, when the NSFW hit the fan, President Bush tried to divert those Department of Energy (DOE) funds to Chrysler and GM, as an end run around an recalcitrant Congress. The DOE said, hey, don’t rush me babe. In the end, Bush shoved aside Congressional and bureacratic dithering—I mean, due diligence, ignored the original intent of the Troubled Asset Relief Program, sent $17.4 billion worth of TARP booty to the two zombie automakers and pissed off to Texas. Since that fateful day, GM alone has blown through the 20 bil barrier. So, what of that $25 billion DOE fund? Well, Chrysler and GM can’t have it; they failed the loan requirement’s viability test. And how. Which leaves.  . . Ford. The Detroit Free Press [almost] reports that The Blue Oval Boyz have applied for $11 billion from the federal fund. Will this Uncle Sam suckle punt Ford from the Motown moral high ground, and ding Dearborn’s dead cat bounce? Of course not! It’s a loan.

SCHIEFFER: Well, let me take, for example, two of the people your hear a lot about, and one is Citibank and the other is — is Bank of America.

Should the CEOs of those institutions be worried that they may face the same fate as Rick Wagoner did if their performance does not improve?

GEITHNER: Bob, what I’ll say is this. When, in the future — or I’ll just say, if, in the future, banks need exceptional assistance in order to get through this, then we’ll make sure that assistance comes with conditions, not just to protect the tax payer but to make sure this is the kind of restructuring necessary for them to emerge stronger.

And where that requires a change of management of the board, we’ll do that.

GREGORY: Do you expect and would you like to see President Obama encourage the country to buy American cars?

HENDERSON: No, actually. I — I think the consumer should buy exactly what kind of car they think meets their needs and that excites them. And as I look at it, it’s our job to make sure we provide that, not necessarily have it mandated or otherwise encouraged. I think we have fantastic cars and trucks. We’re going to win in the marketplace and not necessarily because — just because we’re a U.S. company.

This GM bailout mishegos is driving the mainstream media meshugganah. To wit: conservative pretty boy Sean Hannity has been GM’s bitch for years, happily driving tweaked freebies and working plugs for GM product into his rants and “unscripted” comments. Now that his sponsor is toast, Mr. “We Love GM” has to defend the American automaker (to maintain his flag-wrapped appeal) and criticize Barack Obama for his corporate interventionism—knowing full well that the multi-million dollar Hannity–GM gravy train would have derailed months ago if not for your tax money. New York Times columnist Frank Rich may not be boxed in by GM payola, but the man’s clearly conflicted. “Even Rick Wagoner’s Firing Got Lousy Mileage” starts by kvetching that “pitchfork-bearing populists” (as opposed to Mac-wielding elitists) weren’t satisfied when President Obama brought them the head of Richard M. Wagoner. Although he, Rich, is. Mister! Are you following this?

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We’ve got the link to GM’s Report Card to the Presidential Task Force on Automobiles. Bankruptcy is no longer that which must not be mentioned. In fact, the official recognition of this inevitability hardly gets a half turn of spin. End of days for Detroit. 

Bankruptcy Considerations-In order to be prepared for events possibly precipitating a bankruptcy filing (for example, unsuccessful bond exchange or VEBA negotiations), the Company continues to evaluate its in-court restructuring options as part of contingency planning activities. The Company believes that the impact of a bankruptcy filing on its business would be substantial, on both wholesale (GM to dealers) and retail (GM dealer to customer) levels, as discussed in the February 17 submission.

General Motors continues to strongly believe that out-of-court restructuring provides the highest value outcome for its customers and this country long term. However, if the changes needed for long-term restructuring cannot be obtained out of court, the Company is prepared and would consider in-court options. Such options would be enhanced by the Administration’s commitment to back GM customer warranties, and to provide support for a rapid emergence from any in-court process.