Tonight. On World’s Most Extreme Detroit Apologists… Move over Jerry Flint! Forbes’ ancient and once venerable scribe thinks GM CEO Rick Wagoner hasn’t raped stockholders by pocketing more than $100m in executive compensation. But The Detroit Free Press‘ Justin Hyde and Brent Snavely are willing to go even further. While their most recent mega-apologia predicts the end of Wagoner’s misguided management, the writers are happy to give the floor to analysts who suggest that Wagoner’s done- and is still doing— a great job. “Erich Merkle, an analyst from Crowe Horwath LLP, said Wagoner inherited years of bad decisions from previous managers that have limited his options. ‘You almost need to put Roger Smith on the hot seat, and I know he’s dead,’ Merkle said of the CEO who led GM from 1981 to 1990. ‘They were setting the company up for disaster later down the road. The business model that was created and the way that the contracts were structured were such that they were just not economically viable.'” Mea culpa be damned. And you can be damned sure that Merkle isn’t the only one blind to Wagoner’s cataclysmic effect on GM’s business…

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Here’s it comes. Here it comes. Here comes Detroit’s nineteenth nervous breakdown. Will it be their last? Obviously not. But just in case you thought there was a hope in Hell that GM won’t transform itself into American Leyland, sucking taxpayer cash into a black hole for years to come, the Detroit News’ reporter/cheerleader Alisa Priddle presents “Analysts: Big 3 woes imperil U.S. economy.” Otherwise known as rapper 2 Big 2 Fail’s ode Obama’s Your Mama. Priddle assembles the usual chorus of backup singers. “Every direct job at an automaker in the United States creates five more jobs, said Sean McAlinden, chief economist and vice president for research for the Center for Automotive Research in Ann Arbor. Two of the five are related to suppliers or dealers; the other three are spinoff jobs at businesses where auto industry workers spend their paychecks… By contrast, one Wall Street position creates a total of about 2.5 jobs, yet Congress expedited aid to the financial services sector this year.” Yeah, fuck them banker bitches and their $700 bil. “Declining auto sales have contributed to the nation’s economic downturn, but that hasn’t diminished the industry’s importance, said Charles Chesbrough, senior economist for CSM Worldwide in Northville, an automotive market research firm. ‘We won’t see a turnaround in the economy as a whole,’ he said, ‘until we see improvement in the auto industry.'” As Mad Max said, “If it’s all the same to you, I’ll drive that tanker.” Hang on; what’s this? A dissenting voice?

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In October 2006, celebrity stock picker Jim Cramer reacted to GM’s cratering stock price by telling his viewers to buy shares in the ailing (not to say doomed) American automaker. And then again in February of this year. Perhaps Cramer’s over-compensating for missing the boat (as in Titanic). The Detroit News reports that the Mad Money maven used the airwaves to argue against subsidizing the GM – Chrysler merger (a bit late on that one Jimbo). “He slammed the idea of government help to make a General Motors Corp.-Chrysler LLC merger work,” the DetN reports. “Because that would result in a ‘bailout’ to Cerberus Capital Management LP. He called that ‘a crime’ that would bring a ‘big backlash.'” Sounds about right (for a change). So what’s the DetN’s problem? Uh, class warfare? “‘They’re just rich people,’ Cramer said, adding that if Cerberus didn’t lose money on its investment it would send the message that it ‘pays to be reckless.’ He said the government should support automakers to protect employment, but only if current auto shareholders ‘were wiped out.'” Not getting it. “Sounds like someone needs a little anger management counseling,” the hometown paper concludes. Or not.

Gooooooooood morning U-A-W! In case you were wondering where the United Auto Workers stood during this, Detroit’s End of Days, we can now report [via Reuters] that the union is, finally, bellying-up to the billion-dollar (for a start) bailout buffet. “Alan Reuther, legislative director of the United Auto Workers, said in an interview that the group is proposing lawmakers approve up to $25 billion in new loans for General Motors Corp, Ford Motor Corp and Chrysler LLC. Reuther said the aid would cover pledged contributions to a retiree health care trust, the Voluntary Employees Beneficiary Association [VEBA], which was negotiated last year with the companies.” As odd as that sounds, the UAW bailout bypass makes a certain amount of sense– if a bailout it must be. If the automakers’ call on the public purse is designed to protect jobs, jobs, jobs, why not call their bluff? Or not. “If the companies get the assistance that makes it easier for them to do other things,” Reuther said. “I think the financial markets would look at that and say that helps lift a significant liability and that’s a good thing.” “Other things?” Such as… build cars people want to buy at a price that will make GM enough profit to pay off all its debts and liabilities? Good luck with that.

The Detroit Free Press breaks its self-imposed embargo on genuine reporting on Motown’s End of Days with a startling piece of investigative journalism. The Freep reports that the Bush administration (remember them?) has appointed U.S. Commerce Secretary Carlos Gutierrez gatekeeper to the federal teat. For some reason, scribes Hyde and Higgins (how Dickensian is that?) begin their piece with not one but two sneering references to Gutierrez’ background as the former head of Battle Creek-based Kellogg Co. And no wonder. Other than a couple of “we like this guy” quotes from an “industry leader” and an analyst, they got nothin’. So… let’s quote Bloomberg then. “GM told its U.S. dealers Friday the company was only halfway to its October goal for sales to consumers with just one day left in the month, Bloomberg reported. The so-called retail sales totaled 89,961 vehicles through Thursday, compared with a target of 175,989, the company told dealers.” Hey guys, how about a little context there? No. OK. So… we’ll quote Bloomberg then. “The automaker hasn’t increased annual U.S. sales since 1999.”

Today, on World’s Most Extreme Detroit Apologists… Forbes’ Senior Correspondent Jerry Flint goes all the way on a federal bailout for Detroit– he even says GM’s management doesn’t have its noses in the trough. That’s right. Our man Flint thinks that the tens of millions of dollars shovelled into GM’s CEO Rick Wagoner’s pocket each year, not to mention the pockets of his non-performing pals at the top, are nothing more than fair compensation. Despite the fact that GM’s stock price has tumbled from $40 a share to less than $5, despite the huge loss of American market share, despite a cash conflagration that threatens to burn GM to a crisp, Flint says the big bucks belong to the bailout queens. “The leaders of GM have made their mistakes–plenty of them–but they didn’t enrich themselves beyond decency as those other executives did. Today’s economic problems, brought on by subprime mortgages, credit default swaps, a credit freeze and a stock market collapse, were caused by those other folks.” What’s more Flint says America owes GM a bailout because the General saved the country during World War II– completely ignoring GM’s contribution to the Nazi war machine. Flint concludes his dietribe [sic] by repeating the old saw, “What’s good for America is good for General Motors–and vice versa.” We say what’s good for Jerry Flint is a mega-caffeinated dose of liquid reality. Before it’s too late.

“A bankruptcy of any of the Big Three could be even worse, a harsh reality considered unthinkable a year ago.” So says Detroit Columnist Daniel Howes in his latest column— despite having discussed (and dismissed) GM’s C11 with me two years ago. As proof that a year is an eon in politics, presidential candidate Barack Obama is promising personal intervention in Detroit’s downfall, telling a TV interviewer that he would meet with all the parties concerned, without preconditions. “Sen. Barack Obama, D-Ill., said in a TV interview that if he were elected president, he would meet immediately with the heads of Detroit’s automakers and the UAW to discuss a strategy to make the industry globally competitive. ‘The notion that we can’t compete in an industry that we created I think is, you know, unacceptable. And not only that, but you’ve got an entire Midwest, Ohio, Michigan, big chunks of Indiana, parts of my home state of Illinois, that — the entire fabric of those, those states’ economies are built around the auto industry,’ Obama said, according to a transcript from NBC News.” I wonder what they’ll talk about *cough* bailout *cough*. Meanwhile, the DetN acknowledges our last story: the White House says a GM – Chrysler merger subsidy isn’t on the cards. But the hometown paper claims GM hasn’t given up.

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Yes, car dealers. Well, why not? If you think about it, the car dealers have a LOT of political pull. (Remember GM CEO RIck Wagoner’s letter to the dealers asking for their support for HIS $25b Department of Energy federal teat suckle?) So, now, “Auto dealers are calling on President Bush and Congress to take emergency measures to help revive vehicle retailing and contribute to the nation’s economic recovery,” Automotive News [sub] dutifully (not to say respectfully, although you could say that too) reports. The request came this week in a hand-delivered letter [from the National Automobile Dealers Association] to an economic adviser to the president at the White House.” And what goodies, you ask, were requested in this mammary-seeking missive? “Refundable tax credits for car and truck buyers and restoring the tax deductibility of vehicle loans.” Is that it? You must be joking mate. “Federal funds for state programs to take air-polluting clunkers off the roads and giving businesses additional tax breaks for vehicle purchases.” Air-polluting clunkers? Someone remind me again what decade we’re in. All done? Ha! NADA also wants the feds to “provide emergency loan guarantees to dealers through the Small Business Administration so that they have working capital.” OK, NOW are we done? Who knows? Automotive News forgot to include the text of the actual letter. Doh!

Reuters reports that Republican presidential candidate John McCain is taking a cautious tack on a Michigan economist’s suggestion that Detroit should get an additional $15b in government support. “Let’s get the $25 billion to them to start with and see how that goes,” McCain told NBC’s Meet The Press. McCain had initially opposed that bailout before bowing to political pressure and blessing the deal. Top McCain economic adviser Douglas Holtz-Eakin echoed the Senator from Arizona’s position on CBS’s Face The Nation, saying “The top priority should be get (the $25b) out quickly, not take 18 months, which seems to be the current plan.” The Department of Energy is currently writing regulations governing the disbursment of that money, a process expected to take longer than GM and Chrysler can probably stay in business. Meanwhile, Barack Obama’s advisors refuse to rule out further auto industry suport. “The auto industry clearly is extremely important to the economy and now has enormous difficulties,” Obama advisor and former Treasury Secretary Robert Rubin said on Face the Nation. “We do need to face those difficulties and see if there are ways that public policy can be helpful that make sense … without having a whole raft of unintended consequences.”

Not our man Warren Brown, obviously; although the Washington Post’s automotive critic (and I mean that in the nicest possible way) recently tore Ford a new you-know-what for replacing the Escape’s rear discs with drums. No, I speak here of Steven Pearlstein, who’s ready to put the meat on the bones of DetN Auto Editor Manny Lopez’ contention that’s there’s a bi-coastal conspiracy of nattering nabobs of negativism ready to let Detroit die (by its own hand, but who’s counting?). “You can just imagine [ED: hear] the pitch from the populists of the Michigan congressional delegation: If the government is willing to invest $250 billion to bail out pinstriped bankers, then the least it could do is throw an extra $10 billion to rescue the domestic auto industry and the millions of workers and retirees who depend on it. There’s only one difference: The government will make money on its bank investment, while the GM-Chrysler deal is a lemon.” Regular TTAC readers will know Pearlstein’s rationale without having to read it. But if Hayden Christensen can make jumping look cool, well, why not?

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Detroit News auto jeffe Manny Lopez seems to think there’s orchestrated opposition to a Motown bailout. In this he could not be more wrong. Not a single elected representative has come out against federal mammary provision to Motowns’ mavens. Lest we forget, Senator John McCain reversed his anti-Detroit-bailout rhetoric in time for the election. Besides, the $25b Department of Energy is a done deal, and TARP provisions for Detroit’s captive lenders are on their way. Still, paranoia rules! “I’m not buying the ‘Let Detroit die’ line that’s being promoted by people across the country. It’s tired. It’s simplistic. And it’s misguided… Most notably the jobs that would be lost, though the ‘thought leaders’ on the coasts and politicos in Washington, D.C., don’t seem to be giving that much consideration. Carly Fiorina is among them. The former chief executive of Hewlett-Packard Corp. said in Detroit this week that the government can’t rescue the auto industry. ‘The auto industry cannot be saved from its own bad bets,’ she told the Detroit Economic Club.” Now THAT took some balls. Not that Manny’s ready to cede the point (as if). But it does inspire some classic “this is not my beautiful welfare” rhetoric.

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The pushing and shoving at the bailout trough continues, so say the usual unnamed sources. Reuters reports that moves are afoot to change GMAC’s legal status to a “bank holding company.” (This is the same sleight-of-hand Goldman Sachs used a few weeks ago to curry taxpayer favor.) Bank holding companies participate in the FDIC, which makes them eligible for capital injections under King Henry the Paulson’s solid-as-a-jellyfish $700b rescue/bailout plan. Rumor has it that Chrysler Financial would also be dumped into GMAC and the resulting company would be “a financial services company that would offer services including auto loans, interest bearing accounts and credit cards.” Yeah, just what we need: FDIC insured checking and savings accounts at GMAC. This is one of those nightmares from which I just can’t seem to wake up.

Yup, chalk-up another successful suckle on the federal teat, as Uncle Sam GM adds GMAC to the Commercial Paper Funding Facility. Reuters bears the glad tidings. “GMAC LLC, the auto and mortgage finance company, on Tuesday said it had been approved to use the commercial paper funding facility created earlier this month by the U.S. Federal Reserve with the aim of easing pressure on the corporate credit market.” Way-hey! Surprisingly (not), veteran GM spinmeister Gina Proia was a cagey as a canary on the deal’s specifics. For example, timing. “[GMAC] granted approval of its application ‘recently,’ Proia said.” And logistics. “Proia said GMAC would participate in the Fed’s borrowing window through its New Center Asset Trust (see: Bloomberg), a $10 billion asset-backed commercial paper facility. But she said GMAC would not discuss in a more detailed way how it planned to use the borrowing facility. ‘We are not discussing in any detail our participation in the Fed program,’ she said.” I agree! Why should the company benefitting from MY TAX MONEY tell me when, how, how much of it its hoovering? Hmmm. Something’s screwy here…

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Down the rabbit hole our tax money goes, as a “merger” has become a “rescue.” Reuters reports General Motors and Cerberus Capital Management have asked the U.S. government for roughly $10b in an “unprecedented rescue package” to support a merger between GM and Chrysler, according to “two sources with direct knowledge of the talks.” But don’t worry, because only $3b of that would buy Uncle Sam preferred stock in the merged automaker, “according to one of the sources, who was not authorized to discuss the matter publicly.” You may have qualms about government ownership of a large slice of the American auto industry, but Reuters writers are down with that. “It would… give U.S. taxpayers a large stake in the turnaround of a struggling auto industry that employs over 350,000 American workers and is credited with supporting employment for another 4.5 million in related fields.” So what of the remaining $7b?

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