Followers of the Motown meltdown may have detected a strong whiff of mafioso about the whole enterprise. Did I say enterprise? That sounds a bit too industrious, even though the automakers have been working hard to turn $7 million worth of your hard-earned taxes into about $35 billion in additional bailout bucks. On the other hand, we have the term “criminal enterprise.” As in you pay me my money or I’m gonna hurt you. If you still don’t pay, I’m gonna NSFWing kill you. (Organized crime may be organized but it’s not terribly clever.) To wit [via Automotive News]:

Chrysler LLC said today it may close its plants in Canada unless it gets sufficient labor concessions as well as government aid and resolution of a tax dispute.

In case you were thinking the recent CAW agreement with GM shows the way out of that particular part of ChyrCo’s Mexican standoff (also a NAFTA member!),  Co-Prez “Tommy Gun” LaSorda’s got news for you, after the jump.

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Talk about ROI… The Washington Post reports that General Motors and Chrysler are using $7M of their $17.4B federal “loan” to lobby for their next snootful of bailout bucks.

In the last three months of 2008, just as slumping auto sales pushed the two Detroit carmakers closer to bankruptcy, GM spent about $3.9 million on lobbying, according to a review of its most recent disclosure forms. Chrysler and its parent company, Cerberus Capital Management, reported spending about $3.4 million.

The Post forgets to account for the lobbying parity between the artist formerly known as the world’s largest automaker and the Crisis Corporation. Lest we forget, Cerberus has another huge mouth to feed at your expense: GMAC. Which received a $6B bailout and a last minute waiver of the Fed’s rules for bank incorporation. And how, pray tell, do the automakers’ owners justify using your money to get more of your money?

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Ford gets props from anti-bailout folks for being the only Detroit automaker to not seek TARP bailout loans. But as several stories today indicate, Detroit’s putative last man standing is still seeking government sugar, if only in less direct ways than its hapless competitors. Automotive News [sub] reports that Ford is requesting the German government to extend its cash-for-clunker rebate, threatening temporary plant shutdowns if the handout sunsets at the pre-arranged 600K unit mark. “The bonus is smart, simple, and it works,” says Ford sales poobah Ingvar Sviggum. “Here is my appeal to the German government: The bonus is good for the auto industry, the country and for the consumer. So please stay with it. If the scrapping premium is not extended, there will be a dramatic decline in demand in the second half of the year as a result.” Just over 200K of the rebates have been claimed, leaving about 400K still to be claimed in the measure’s original run. But, y’ know, extend it anyway. Or else.

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I was wondering how to report this aerial photograph of two members of the bailout bestowing Presidential Task Force on Autos (PTFOA) returning one of Chevy’s plug-in electric/gas hybrid Volt mules to the paddock. I stumbled upon this description of the death of a black hole at WonderQuest.co. Seemed appropriate.

According to Heisenberg’s Uncertainty Principle, our space vacuum teems with invisible particles that flash into and out of existence like virtual fireflies.

Suppose a pair of particle-antiparticles pops into being, conveniently enough, within effective range of the black hole’s gravity.

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This time the bearer of good news is retired General Wesley Clark and his “Growth Energy” K-Street advocacy group. The special K says increasing the ethanol blend limit to E15 could create 136,101 new jobs and inject $24.4b into the US economy annually. How? According to the firm’s appalling report, bumping the federal blending mandate to E15 would double the “demand” for ethanol. As the report notes, in the mother of all Freudian slips “6 bgy of production capacity would be required to produce 20.4 bgy of ethanol (including current reserve capacity). This level of expansion could be met by the construction and operations of 60 100 bgy corn ethanol plants (emphasis added).” Of course they meant 60 100 mgy plants, but numbers have just become so darn confusing since billion became the new million.

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Delphi and Visteon were spun off from GM and Ford respectively at the turn of the millennium, in hopes of cutting costs and improving efficiency. But rather than creating healthy, solid companies they could rely on as major suppliers, the Detroit OEMs used the spin-offs to dump unwanted assets, UAW workers and fixed-cost obligations on their new partners. And now GM and Ford are reaping the bitter harvest of their ill-advised spin-offs. Visteon, which has never turned a profit, just had its stock delisted last week after losing $663M in 2008. Delphi has been in Bankruptcy since October 2005, and, having lost $1.48B last year, it is barely surviving on cash infusions from the General, which really could have used the dough. And both suppliers are threatening to take down America’s two largest automakers.

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The Presidential Task Force on Automobiles (PTFOA) rolls (flies?) into Motown today for a pow-wow with the ow-ow brigade. But wait! There’s more! Photo op alert! The AP tersely reports that “members of the government’s auto task force will test drive a General Motors Corp. electric car and tour a Chrysler LLC pickup truck factory on their Detroit-area visit Monday.” Whoa! GM has an electric car? Ohhh. They mean the electric – gas hybrid Hail Mary known as the Chevrolet Volt. The Detroit News—which previously linked their Volt-driving headline to a story on GOP opposition to more bailout bucks that forgot to mention either cart or pony (oops!)—is [now] a bit more forthcoming.

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Students (student?) of Sunday TV magazine shows will know that the Republican Party is beginning to realize the political advantages of throwing Detroit to the lions—I mean, upholding their responsibilities as guardians of the public trust (and purse). “The best thing that could probably happen to General Motors, in my view, is they go into Chapter 11,” Senator John McCain said on Fox News Sunday. Which would help GM reboot (not that John would ever say anything so hip), reorganize (not that John knows what that would entail) and renegotiate its labor contracts (ah-ha!) and emerge “stronger, better, leaner.”

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According to the silver-lining seeking scribes at The Detroit News, the Presidential Task Force on Automobile is taking the long-term view on the Motown meltdown. Hang on. Didn’t DetN scribes Gordon Trowbridge and Christine Tierney read Daniel Howes latest column? You know, the one where Mr. Howes called bankruptcy deniers “deluded.” And yet, less than twenty-four hours later, the word “bankruptcy” appears in the DetN’s Task Force article exactly none times. Instead, there’s a hopeful assumption that the Obama admin wants YOU to support Chrysler (maybe), GM (definitely) and Ford (maybe) for as long as it takes to . . . well, we’ll get to that in a minute.

The federal auto task force that arrives in Detroit on Monday has spent the past two weeks meeting with a range of industry players, pushing its work beyond the automakers’ immediate cash crisis and strongly hinting at a longer term goal… the group’s focus appears to extend far beyond the balance sheet, looking more deeply into the question of what a successful U.S. auto industry would look like in the long run.

Yeah, that’s what I want: a gaggle of professional politicians deciding what the American auto industry should look like under a new five-year plan. So, how much is this boondoggle going to cost me? As the DetN points out, it’s not all about money (even though it is). DC’s going to make sure there’s plenty of green in that mean, mean, mean; mean green.

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Everyone’s favorite feel-good broadsheet, SubPrime Auto Finance News, reports that 13 members of congress have written a letter to Fed Chairman, Ben Bernanke, and Treasury Secretary, Tim Geithner, requesting another raid on TALF, the Term Asset-Backed Securities Loan Facility. The congressional bagmen “applaud the joint efforts of the Federal Reserve Board and the Department of Treasury to promote liquidity in consumer loan markets through the Term Asset-Backed Securities Loan Facility.” Because making $200B available was an interesting start. “However,” continue the servants of the public trust, “we are concerned that the program may not sufficiently address the problems facing the domestic automobile industry.” Oh dear.

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I’m not using the poker definition of the word “hit” here—despite the obvious metaphor of GM drawing on 20 in a game of 21. (Three decades ago.) I’m speaking here in the Britney Spears sense of the phrase. Well, actually, it’s not me. It’s none other than House Majority Leader Nancy Pelosi. According to The Detroit News, Nance told reporters today that she supports a strong manufacturing sector. “But this isn’t endless,” she said. “And there has to be a sign of viability and it has to come soon.” Spears fans will recognize Ms. Pelosi’s cry for a pistonhead portent as an echo of Ms. Spears lachrymose lament. So, what sign of viability does the D.C. politician want; you know, as GM has already submitted its official viability Powerpoint presentation? If she’s looking for some kind of sales turnaround, well, uh, anyway . . . “The White House’s top auto advisers will travel to Detroit next week to meet with all three domestic carmakers, Obama administration and auto industry sources said Thursday.” Huh?

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CAUTION! PROFANITY AHEAD! Automotive News [sub] reports that the National Automobile Dealers Association (NADA) is telling the world what it’s going to tell The Presidential Task Force on Automobiles on Friday: don’t blame US for this shit. It’s essentially the same message NADA gave Congress back when GM and Chrysler first proffered their $19.4B begging bowl: don’t fuck with us. Let the market decide how many goddamned dealers Detroit can afford (even though US tax money is propping-up their dead man walking metal makers). At the same time, NADA plans to ask the Task Force a simple question: where’s OUR goddamned bailout? “NADA leaders also plan to urge government policies that would ease credit for vehicle inventory financing at dealerships. A lack of floorplan financing and unreasonable terms by lenders are forcing dealerships to curtail orders from automakers and in some cases shut down, NADA contends.” You know, this has the makings of a pretty good operatic score, in both senses of the word . . .

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Covering Detroit’s massive health care liabilities is perhaps the single greatest challenge facing those working on the auto industry bailout, reports the Washington Post. Detroit retirees in particular represent a huge commitment, as current health care benefits include dental, vision and prescription drug benefits for the low price of $11 per month. And as the automakers burn through their cash, they must come up with some way of maintaining or cutting benefits in the face of rising health care costs. GM currently carries $20B in health care obligations, over ten times its market capitalization. Chrysler owes $10B and Ford owes $3.2B of its total $13.2B VEBA commitment this year alone. With bailout plans calling for automakers to inject equity rather than tight cash into the VEBA system, a number of unintended consequences are being forecast.

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OK, first Chrysler Co-Prez Jim Press flies to Geneva (first class?) to schmooze with . . . not Fiat. Oh no. Press told the press that their alleged small car partner had already been to Auburn Hills and called it good. So no need to hang out with what the company’s touted as Chrysler’s savior. “No formal meetings planned,” to use the proper PR parlance [via Automotive News]. So . . . how’s that “satisfying the government’s conditions to score another $5 billion from the federal bailout buffet” thing doing? Great! “Jim Press said today that the automaker was ‘hopeful’ the automaker had all the criteria necessary to receive additional U.S. government loans.” Automaker, automaker, let me come in! Tell me exactly who owns shares in ChryCo. No? Well, then, let’s have a closer look at Press’ hopes, dreams and fears re: Chrysler’s progress on Uncle Sam’s loan criteria, shall we?

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In a Letter to the Editor in today’s New York Times, Cerberus CEO Mark Neporent fights back against the widely-held opinion regarding his employer’s relationship with Chrysler: you bought it, you pay for it. And yet, the CEO refuses to divulge the “retirement plans, charitable and educational endowments and individuals” who’ve invested in Chrysler, who he claims to be protecting (with our money). Until Cerberus names names, the equity firm’s insistence that taxpayers should be on the hook for their mismanagement of a dying car brand lacks any hint of credibility. And man, does it piss me off.

Why Can’t Cerberus Foot the Bill?” (editorial, Feb. 23) imposes an unfair double standard by suggesting that Chrysler’s shareholders should be treated differently from the shareholders of General Motors or Ford.

Cerberus’s investors are pension and retirement plans, charitable and educational endowments and individual family savings. Our investment guidelines limit the amount of capital committed to any single investment.

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