“Spirit Airlines wants to bailout Detroit air passengers.” Geddit? The airline is offering a “Detroit Bailout” sale; travelers can fly from Detroit to domestic and international destinations at prices starting from $59 each way. This isn’t the first unusual promotion offered by Spirit. The airline once held a “Hunt for Hoffa” promotion in which visitors to its website could play an online game involving longtime missing and presumed dead labor leader Jimmy Hoffa. Customer complaints forced the cancellation of the Hoffa promotion.

“Tax payers can’t be expected to pony up more money for an auto industry that is resistant to change.” Doesn’t want to be kicking the can further down the road either.

Automotive News [sub] is reporting that GM managers are worried enough about their chances for a bailout to write up a “Plan B” in case the funds don’t come through. Of course this plan has nothing to do with restructuring, returning to profitability, or facing reality, it’s simply a plan to “keep the company running until President-elect Barack Obama takes office in January.” At which point… um… nope, it doesn’t say anything. Nationalization? Chapter 11? The Rapture? Who freaking knows. Anyway, the “Plan B” is pretty much a bunch more of the same, as it calls for GM to delay payments to suppliers, slash white-collar jobs and salaries and gut its marketing campaigns. So, y’know, the usual, only a little worse. AN even suggests that “the cuts could even seep into r&d — the vital core activity crucial to GM’s long-term success.” Which is how necrosis works. One minute you’re cutting off toes and telling yourself things will be fine. Before you know it, you’re out of limbs to sever and the stuff is up to your neck. If (more) R&D goes on hold, GM will have no future to fight for. And if suppliers start demanding payment on delivery? Game over. Sources are saying GM will make “a massive communication to the world” of its plans after Thanksgiving.

The planned cavalcade of chrome fuel-efficient American vehicles from Detroit to DC is “a great idea,” according to GM spokesfolks, but neither the General nor Ford will officially participate in the stunt. Suppliers, dealers and the UAW will make up the bulk of the spectacle, although there’s still a chance that Chrysler’s Bob Nardelli could join in the fun. “The whole grassroots caravan to Washington, D.C., effort we think is a great idea,” said GM spokesman Tom Wilkinson. “It’s just not something we are in a position to sponsor or manage.” You know, like everything else. “As for our mode of transport, it can be safely assumed it will not be by company plane,” Wilkinson said. “For security reasons, we don’t normally comment on transportation of our senior executives. As the date for the hearings gets close, we may provide more details.” And we’ll be waiting with bated breath. The march on Washington is being organized by Dura CEO and Chairman Tim Leuliette, although the Freep gives a hat tip to Automotive News [sub] scribe Jason Vines for kinda, sorta coming up with the idea in a column published last Friday. PR man Vines’ advice? Organize the event on the internet and “arm everyone with a short list of facts so they can speak intelligently on camera, as too-often-lazy TV journalists like to find the fattest, dumbest protesters and get them to say something stupid or offensive on camera.” Is this why Red Ink Rick is being kept away?

Stung by the public outcry over Jet-Gate, Detroit’s automakers are orchestrating a “cavalcade of fuel-efficient American-brand vehicles to Washington, D.C., in December, when Congress reconsiders the industry’s plea for quick action on low-interest loans,” according to the Detroit Free Press. “The aim,” intones the Freep, “is to put a populist face on the need for the American auto industry’s survival and to build grassroots support for federal aid, in the wake of criticism that the Detroit Three chief executive officers and UAW President Ron Gettelfinger did not make a convincing case during two days of congressional hearings last week.” The Caravan of Love will include auto suppliers, dealers and the UAW, escorting Detroit’s finest in a grand processional of pathos to the Mother Of All Beggin Bowls, though they’ll probably skip on the whole “Respica te, hominem te memento” bit. The events will begin with a December 7th rally in Hart Plaza, then the “cavalcade” would head to Washington, with stops along the way for rallies and news conferences. Things will wrap up with yet more testimony from Detroit’s newly-clothed-with-glory CEOs, and the ceremonial presentation of a giant check for $25b. Hallelujah, I’ve got the spirit!

Hat Tip: Jalopnik

Let’s just agree now that if Ford, GM and Chrysler get their $25b in December, the $21m they invested in lobbying efforts this year was a brilliant investment. Of course, as the Detroit News reports, that’s actually $21.6m and that only covers the first three quarters of this year; fourth-quarter lobbying disclosures don’t come out until January, and with their companies on the line you can bet the D3 will be throwing what’s left in their wallets at DC until the last bailout option is depleted. The problem for Detroit though is that their political contributions are actually shrinking in relative terms. The auto industry is only 34th on the list of contributers to congressional election campaigns, down from the 16th spot eight years ago, and even generous campaign contributions don’t guarantee your safety. For example, Chrysler owners Cerberus Capital Management donated $37,500 to Senator Richard Shelby’s (R-AL) 2008 campaign, only to have Shelby badmouth the industry from his position as a ranking member of the Senate Banking Committee. And though it spends more on lobbying than the other Detroit firms, General Motors says its reducing its efforts. “In fact, it’s decreased considerably,” spokesman Greg Martin said. “We’re looking at every operational expense and cutting where we can. That includes our efforts here in D.C. Lobbying is a legal, very transparent means to have your voice heard in Washington, especially as it relates to political issues that have a substantial effect on your business.” And if it pays off, it will make Porsche’s play on the hedge funds look like a mediocre investement. Where else can you invest $25m and have it turn into $25b in less than a year? Only in American government.

Barack Obama’s turd blossom David Axelrod appeared on ABC’s “This Week” today (via Reuters), quietly backing the president-elect away from is electorally-necessary support for an automaker giveaway. “We all have a stake in the survival and the prosperity of the auto industry,” said the future senior White House adviser. “But in order to do that, they’re going to have to retool and rationalize their industry for the future,” he said. “If they don’t do that, then there’s very little that taxpayers can do to help them.” This puts Obama back on the same page as the congressional Democrats, who have been markedly less supportive of a bailout since the Detroit CEO’s miserable performance before the House Financial Services Committee this week. “There must be a business model that they work off of,”  Speaker of the House Nancy Pelosi tells CBS’ “Face the Nation. “No one would invest in a company without seeing that, nor should taxpayer dollars be invested without seeing that business model and that business plan.” The real question then seems to be, what do Obama, Pelosi, et al expect to see in the way of a new plan come December 2? Because other than being sure that they want to see a plan, we haven’t got much from them in the way of specifics.

When Autoblog caught wind of the Latin American Herald Tribune story quoting GM Brazil’s CEO as saying GM would invest $1b worth of US bailout money in Brazilian operations, they knew there was something weird about the story. Ya think? The original LAHT story paraphrases (rather than directly quoting) GM Brazil’s Jaime Ardila as saying GM’s $1b investment would come from bailout bucks, lending some credence to the official GM position that “something got lost in translation.” But even if the LAHT’s translation was completely accurate, GM would have denied this story up and down. Investing American tax dollars in the developing world? Perish the thought. For one thing, there is no bailout. Yet. If Ardila did say that bailout bucks were going to Brazil, he was way off the reservation, and endangering the still-slim odds of a bailout happening. In any case, we will know what the bailout bucks will be spent on when GM submits their plans for the money to congress on December 2. And don’t bet on seeing a billion dollar line-item for Brazilian investment, for the obvious political reasons. But as an international company that has been supported for years by its overseas units, GM will have to finesse its bailout plan to appeal to congress’s national interests. With nothing but cuts in sight for GM’s North American operations, the General will have to rely ever more heavily on profits from its growth markets abroad to achieve the “viability” congress wants to see. Unfortunately, that viability trades off directly with the bailout’s other goal, which is saving American jobs. Such are the dangers of national bailouts of multinational corporations.

Now that GM has launched its PR response to Jet-Gate, Ford is also taking steps to be ensure that it is perceived as an austere, efficient company. And no, they’re not making Mulally give up his Lexus (he was already supposed to have, although ABC News appears to have caught hime in flagrante delicto with his LS430 as recently as this summer). The AP reports that post-begathon criticism has Ford staff “looking at all of our operations to reduce costs and operate more efficiently,” which just might include giving up some undisclosed number of the five jets it currently operates. “Ford’s top priority is to continue making progress on our transformation plan, and we do not want anything to distract us,” spokesman Mark Truby said in a statement. “We are exploring all cost-effective solutions for our air travel.” Ford operated nine jets in 2005, when its stock price opened the year at $13.17. Ford’s stock is currently valued at $1.43 per share.

Infowars has a story from the Latin American Herald Tribune that suggests GM could send bailout money to Brazil. The story quotes GM Brazil-Mercosur President Jaime Ardila as saying GM plans to invest $1 billion worth of American tax dollars in Brazil to avoid the kind of problems the U.S. automaker is facing in its home market. “It wouldn’t be logical to withdraw the investment from where we’re growing, and our goal is to protect investments in emerging markets,” says Ardila. The money would be spent on a “complete the renovation of the line of products up to 2012.” This news comes on the heels of an announced $3.5b automaker stimulus by Brazil’s federal and Sao Paolo state governments. Of course, the whole plan banks on Congress approving an ammendment to the already-approved $25b retooling loan program. The Detroit CEOs have until December 2 to present congress with their plans for the $25b, and if those plans are approved Congress could remove all existing “strings” on the loan program. These strings currently require the funds to be spent on retooling American plants that are over 25 years old to build more fuel-efficient vehicles. So the question now is, will GM lie to congress and tell them that they won’t send taxpayer money to Brazil, or have they already lied to their Brazilian division? Or will congress simply look the other way? So many possibilities…

Bloomberg reports that Obama’s transition team is exploring the possibility of prepackaged bankruptcies as a solution to the dire situation the Detroit Three find themselves in. According to an anonymous source, Obama’s team has already contacted at least one bankruptcy- law firm to say that Daniel Tarullo, a professor at Georgetown University’s law school who heads Obama’s economic policy working group, would call to discuss the workings of a so-called prepack. And as the worm turns on the idea of a bridge loan, a prepackaged bankruptcy seems to be about where the middle ground shakes out to. So is Obama leading to the middle? Not openly, at least not yet. “That’s not true,” a spokesman for Obama’s transition team tells Automotive News [sub] of the Bloomberg report. So then is the story that Obama’s not exploring all the options? Or he is, but doesn’t want it publicized? From the sound of things at recent congressional beggary testimony, none of the D3 are willing to consider the possibility of bankruptcy of any kind. But if the their turnaround plans, due to Congress by December 2, aren’t convincing enough there will be bankruptcies. And not neat, pretty prepacks. Time to face the strange?

Re “Let Detroit Go Bankrupt” (Op-Ed, Nov. 19):

I noticed the Boston dateline on Mitt Romney’s article advocating bankruptcy for Detroit’s auto industry. From his New England home, Mr. Romney may not realize how much the industry has changed since 1969, when his father, George W. Romney, left Michigan to become housing and urban development secretary.

Nearly every recommendation Mitt Romney makes for United States automakers has already been undertaken by current management in Detroit. Automakers have been investing in the future on the order of $12 billion a year in research and development — second only to the semiconductor industry.

In addition, General Motors has cut $9 billion in structural costs since 2005 and last year reached a landmark agreement to transfer the delivery of health care to the United Auto Workers union.

Finally, it is inappropriate of Mr. Romney to invoke Walter Reuther’s name while advocating using bankruptcy to break union contracts. That reference may be overlooked in Boston but surely not in Detroit.

Steve Harris
Vice President
Global Communications
General Motors
Detroit, Nov. 20, 2008

Just hours after Washington legislators told Rick Wagoner to come-up with a more compelling case for bailout billions, GM’s CEO assured The Detroit News that he’s ready to submit his new new new new new turnaround plan. “We’ve got the plans and are ready to go,” Wagoner told the hometown paper. “We’re not starting from ground zero here.” A rather unfortunate metaphor, and a less than compelling assertion. After all, if Red Ink Rick was ready to rock and roll, why wasn’t he a bit more, uh, forthcoming at the Senate hearing? [Needless to say, the DetN was not impolite enough to pop that particular question, simply stating that “He did not offer any details on what GM’s plan might entail.”] Meanwhile, displaying characteristic sympathy for the working man, Wagoner said that the delay caused by the Congressional recall “will be a bit nerve-wracking for us… But it’s the reality we face.” Note to Rick: it’s the reality you don’t face that kills you. More interestingly, it appears that the CEO’s anti-C11 rhetoric has softened slightly. Not. “Why would you take that risk at a time the economy is teetering on the brink. We need to do everything we can to get the business structured to get through a tough time and onto the future.” I think Mr. Wagoner just answered his own question.