Holy shit! Who elected these people? I mean, OK, ever since the so-called “debate” over the Energy Bill’s $25b low-interest federal loans to Detroit was first mooted, we figured Motown would get its pound of taxpayer flesh. Right from the git-go, we said the American automakers’ [remaining] political muscle and Michigan’s position as a “battleground” state during this presidential election season sealed the deal. And we predicted the only possible barrier to bonanza billions: bailout fatigue. And lo, Uncle Sam’s $85b AIG bailout is upon us. But as long as there are no more shocks, and The Big 2.8 can keep up the big Mo, the money will still flow freely from your pocket. BUT never underestimate Detroit’s ability to snatch defeat from the jaws of victory. For example, Senate Majority Leader Harry Reid seems Hell bent on getting his picture in Bartlett’s Famous Quotations, under “Who needs enemies when you have friends like these?” The Detroit Free Press got the money shot (and buried it at the bottom of the piece). “’It’s extremely important we try to do something,’ [Senator] Reid said, adding that compared with the cost of the Wall Street bailouts, the cost of the $25-billion loan program — estimated at $7.5 billion — is ‘small change.'” The fact that he’s right is more galling than the idea that he isn’t.

Great news for all you auto-industry bailout fans! The Ukrainian Journal (what, you don’t have a subscription?) reports that Ukraine’s Industry Ministry and the Ukravtoprom Car Producers Association (acronym unknown) have proposed allocating UAH 3.884 billion ($826m) from the national budget to finance the development of the car industry by 2015. And guess what? It’s not a bailout! The appropriation will simply secure nearly $12b in financing to help its industry adapt in a changing global market. Where in the Hell do they get those crazy ideas? But one crucial point differentiates the Ukrainian loans and the bailout currently being sought by Detroit: the Ukrainian car market isn’t up effluence creek. Just-auto [sub] reports Ukrainian Q1 sales are up a tidy 61 percent over last year. The moral of the story? The government helps those who help themselves. Or Detroit desperately needs to master the art of the bribe. Oh wait…

Warning! Video unsafe for narcoleptics or readers enraged by elevator music

Automotive News [sub] reports that JJ’s busy lobbying on behalf of The Big 2.8, helping them secure $25b to $50b in low-interest federal loans. “‘Just how many cities will sink, how many small towns will sink, how many homeowners will be facing foreclosures, and how many kids will have to come out of school?” Jackson said during a conference call with reporters Tuesday, Sept. 16. ‘There is a lot riding on this.'” Not the least of which is Jackson’s ongoing activism re: African-American owned automotive suppliers, dealers and ad agencies. To wit: “Jackson also said the loans should follow federal contract compliance and Equal Employment Opportunity Commission guidelines for the inclusion of minority auto dealers and suppliers.” Huh? Why wouldn’t they? Hang on; I thought the loans are for building fuel efficient vehicles, not a bailout to make sure kids stay in school (go figure). Anyway, Jesse and Motown’s automakers have plenty of history, much of it financially rewarding for Jackson’s organizations. In fact, in October 2007, Rainbow PUSH named GM its Corporation of the Year. According to GM’s Diversity Letter, “Jackson said that Wagoner was a great friend to Rainbow PUSH and that he was ‘a man of sensitivity, vision and integrity.'” Birds of a feather flock together. Makes sense to me.

Ford Chairman Bill Ford is trying desperately to put some daylight between his industry’s bailout request and the ongoing mop-up of what’s left of the U.S. financial system. “People see this as a very separable issue,” Ford told Automotive News [sub] after an epic DC beg-a-thon. As gung-ho as Michigan reps are to see their home state rake in the federal scrilla, there’s indication that even there the “separability” of bailouts may be strained. Rep Candice Miller R-MI, who organized the meeting with Ford and others, said afterwords that some lawmakers still have questions about the loan request– aggravated by the upheaval among major financial institutions over the past days and weeks. These concerns center on analyst predictions that the fed’s decision to allow Lehman Brothers to fail was a line drawn in the sand. Though she calls the new $7.5b cost estimate for the first $25b “too high,” Miller can muster only “cautious optimism” about the future of the bailout push. And while Bill Ford and Mark Fields sing for their supper in DC, bean counters in Dearborn are trying to figure out Ford’s exposure to the bankrupt Lehman Brothers mess. Reuters reports that Lehman Commercial Paper had committed $890m to an $11.5b revolving credit facility under a secured credit agreement reached in December 2006, all of which is presently unfunded. Lehman Brothers Bank FSB also provides $238m of facilities totaling $16.3b that support the retail securitization program of Ford Motor Credit Company. These subsidiaries are not listed in their parent company’s bankruptcy filing. But since Ford mortgaged itself to the hilt in 2006, the unraveling credit-market could still hit Ford where it hurts.

Despite The Big 2.8’s best efforts, the mainstream media never bought into the idea that the $25b – $50b low-interest federal loans for “retooling” (included in last year’s Energy Bill) were anything more than bailout by another name. (Since the loans only apply to Motown, why would they?) As previously mentioned, the automakers’ “it’s a hand up not a handout” approach has created some severe cognitive dissonance– which helps Detroit’s efforts to secure the bucks not a bit. For example, Bill Ford met with DC legislators yesterday and swore up, down and sideways the loans were NOT a bailout. And then this [via Reuters] “Bill Ford said the money, if approved, would help his company accelerate its turnaround plan and meet government mandates for the industry to improve fuel efficiency by 40 percent by 2020.” Accelerate, eh? GM’s CEO has moved even further away from his opening gambit. “Speaking to reporters on Tuesday night after addressing the Washington Economic Club, [Wagoner] said the loan amount that GM might receive… would help with capital spending but also improve the company’s poor finances. ‘It would help us with other funding sources — maybe not in today’s market conditions, but over time.'” In fact, Wagoner’s desperation is increasingly apparent. When asked if GM needs the money before Congress pisses off for the election, Wagoner replied “I’m not sure of the value in waiting.”

Earlier today, Merrill Lynch upgraded GM to “neutral.” The fact that this is the same Merrill Lynch that’s teetering on the brink of bankruptcy, the same Merrill that hoovered-up the remains of GM’s busted deal with FIAT back in 2002 (buying The General’s 5.1 percent share of the Italian automaker at a fire sale price of $1.16b), has absolutely nothing to do with it. Anway, Merrill’s optimism re: GM could be about to disappear; the upgrade was based almost entirely of the possibility that The General will scarf low-interest loans from you-know-who (hint: you). That’s because Uncle Sam has agreed to an $85b loan to insurance giant AIG to stave off bankruptcy (AIG’s, not Uncle Sam’s). This dramatic development could cut one of two ways for GM. The AIG bailout may increase the likelihood that Motown will score its $25b+ federal bonanza (the Daniel Howes “You Saved Wall Street So Why The Hell Not US?” prophecy). Or it will decrease Detroit’s chances of immediate federal assistance significantly (the Holy Shit bailout fatigue non-option). Place your bets now. But as far as your tax dollars or the free market is concerned (the feds now hold an 80 percent share of a formerly private insurance company), any way you look at this, you lose. Who wants to own GM? Not me.

Detroit steadfastly refuses to call their $25b – $50b trip to the federal begging bowl a bailout. No suprise there. Any such admission would lead to a golden parachute unfurlment to rival those old films of WWII paratrooper assaults, if not some serious strictures and sanctions. So, while House Speaker Nancy Pelosi may say it’s about jobs, jobs, jobs, Motown’s mavens need some other way to justify their assault on the public purse– especially in these times of incipient bailout fatigue.  The increasingly worried spinmeisters are returning to Mark Fields’ rallying cry: our national security is at stake! Or, it’s all about the batteries stupid. The Wall Street Journal feeds the beast: “But securing an adequate supply of batteries over the next few years has become a growing concern for auto makers everywhere. The U.S. industry is leery of depending too heavily on foreign battery makers allied with Japanese auto makers, for fear those suppliers would give priority to filling the orders of their Japanese partners.” To be fair, teh WSJ mentions American battery makers, but concludes with a whiny bitch [paraphrasing] from Johnson Controls. “Mary Ann Wright, vice president and general manager for Johnson Controls’ hybrid-battery business has been lobbying Washington for a national effort to establish research labs and manufacturing technology to make the U.S. a battery-manufacturing leader… ‘[Asia’s dominance of the battery biz is] our punishment for inventing this stuff and allowing manufacturing to go somewhere else.'”

So proclaimeth our good friends at Automotive News. They report that “The director of the Congressional Budget Office says the cost to taxpayers of a $25 billion loan program probably would be about $7.5 billion — about twice earlier estimates… Worsening credit conditions mean 30 percent of the loan total may be needed.” Like that’s going to make a difference. But the way GM’s spinmeister handled the news is revealing, in the usual denial is a river in Africa sort of way. “General Motors spokesman Greg Martin said today that the budget office director’s observation is not a formal cost estimate. ‘We know we have our work cut out for us,’ Martin said.” Yeah, getting Uncle Sam to get the tit out can be such a hassle.

Think GM has it bad? Or that they’re too big to fall? Think again. Lehman Brothers has just announced it’s filing for Chapter 11 bankruptcy protection. The 158 year-old bank decided to exercise the nuclear option after attempts at bailouts and takeovers failed. Lehman Brothers owes $128b in debt, which will probably be paid out at 60 cents on the dollar. (For reference, General Motors has $43b in long term debt). Thousands of Lehman workers were fired immediately after the Chapter 11 filling. The rest were told that they will be paid through Friday, at the most. John McCain – who probably realizes getting New York’s delegates is beyond the limits of reality – told the International Herald Tribune that he was “glad to see that the Federal Reserve and the Treasury Department have said no to using taxpayer money to bail out Lehman Brothers.” Floyd Norris from The New York Times reminds us that Lehman claimed it had ample capital and liquidity as late as last week. Sound familiar? It should. General Motors is in a similar predicament– only worse. Along with Bear Stearns and Merril Lynch, incidents like Lehman are using-up the market’s feelings of shock and surprise at major business failure. If General Motors is hoping for a bailout, they had better get on it soon, or no one will throw money in their direction, even post-C11.

It’s shocking to think that The Big 2.8 is lobbying hard and fast for $50b worth of low-interest federal loans without setting forth a coherent plan for what they’d do with the money. (Never mind honestly explaining why they need the “retooling loans” when the transplants don’t.) As much as nature abohors a vacum, automotive journalists can’t stand a dangling modifier. So, once more into the breach dear Horatio! OK, Automotive News‘ [AN, sub] Richard Truett is no Mark Phelan. But Truett’s plan– “How Detroit 3 could put federal loans to work”– lacks a certain something… Common sense? Practicality? Commerciality? We report, you deride. “If the Detroit 3 aim for a payoff within the next five years or so [Ed: what’s the rush?], it’s possible to identify a likely wish list of projects. Here are some possible candidates, starting with General Motors.” According to Mr. T, GM should spend their share of your tax dollars to put The General’s DOA two-mode hybrid into passenger cars, get down and dirty with diesels, make that HCCI engine thing happen and launch the God damn Volt, already. For Ford, Truett recommends plug-in-izing the Escape and Mariner, getting down and dirty with diesels, speeding-up developnment of the ecoboost engine thing and building a fuel cell Edge (huh?). Chryco? Stick the two-mode hybrid into the 300 and Charger, get down and dirty with diesels, and “develop an electric car or perhaps a plug-in hybrid.”

Not content with one cheerleading article telling the world that GM has what it takes to turn around the sinking ship, today’s Detroit Freep Press has another piece asserting that The General will Survive ‘n Thrive™. Mark Phelan’s handed his pom-poms to biz scribe Katie Merx, who pens a paean to the GM Lifer and CEO who’s wiped tens of billions off the automaker’s balance sheet, steered it straight into a sea of debt and presided over the corporate colossus as it’s shed more than ten points of U.S. market share. “He is a finance guy, but he knows he won’t get a healthy balance sheet without beautiful sheet metal.” Gag! “Wagoner is able to focus on select, long-range issues, said David Cole, chairman of the Center for Automotive Research, largely because he has put together a stable and strong senior management team — and trusted them to do their jobs.” Gack! “‘One of the things I’ve learned from Rick and Fritz is you’ve got to deal with reality,’ Chief Financial Officer Ray Young said referring to Wagoner and GM President Fritz Henderson.” Barf. But I’ll let Wagoner have the last word, as the punchline is clear enough. “Our burning desire is to keep going forward fast.”

As GM has singularly failed to focus on a single plan to save the artist once known as the world’s largest automaker from bankruptcy, The Detroit Free Press’ Mark Phelan once again steps into the breach (dear Horatio). Last seen shilling the Chevy Traverse on GM PR TV, Phelan has agglomerated a couple of recent audiences with the automaker’s top brass to winkle-out The General’s strategy, or lack thereof. CEO Rick Wagoner: “‘There are two things we have to do better than anything else,’ Chairman and CEO Rick Wagoner told me this week: design and advanced-propulsion technology.” Like… the Volt! Hence the timeline of Phelan’s lead: “A handful of cars and trucks General Motors will introduce over the next eight years may determine whether the automaker survives to celebrate its 200th anniversary in 2108.” EIGHT YEARS? What’s the rush? Meanwhile… “We don’t know yet what the rest of the upcoming vehicles will be,” Lutz admitted to the Motown cheerleader. “But we know what they have to do: establish GM as a leader in technology, fuel efficiency, design and performance.” And then Phelan sneakily fills in the blank, offering the following without direct attribution. “GM must also finally clarify its muddled brand strategy. Chevrolet and Cadillac must reestablish themselves as global leaders.” (In fact, Phelan suggests GM may “retrench” to those brands without suggesting how that could possibly occur. Cough. Bankruptcy. Cough.) So, that’s better branding, design, advanced propulsion, technology, fuel efficiency, performance, value-for-money and reliability. Just kidding; they didn’t say anything about value-for-money or reliability.

Ford CEO Alan Mulally may be a Detroit “outsider,” but the former Boeing executive sure knows how to tow the Motown party line– especially when it comes to securing $25 – $50b of low-interest federal loans. “Speaking on the CNBC cable television network Friday,” Forbes reports. “Mulally said Ford built and sold the trucks because marketplace demanded them. ‘In the United States, Ford’s strategy was to focus on what the customers really wanted, and those were the larger SUVs and trucks,’ he said. ‘Fuel prices were low, the interest rates were low. It’s what the customers chose.'” Oh for Christ’s sake. What about all those consumers who didn’t choose pickups and SUVs? What about the executives’ responsibility NOT put all FoMoCo’s eggs (i.e. billions in profits) into stupid-ass basket case misadventures like Aston, Jaguar, Volvo and Land Rover? I’m no Catholic, but Mually’s reframing of Ford’s former sins, his abject unwillingness to accept responsibility for Ford’s culpability in its current cash crisis, is not what I’d call proper penance. “Ford, he said, has a different strategy now that energy prices have risen, developing a portfolio that includes small cars already on sale in other parts of the world.” Great! So leave my tax money alone and get on with it.

In case you hadn’t noticed, I hate weasel words. If GM needs federal money to stay afloat, GM CEO Rick Wagoner should say it. Of course, that would open GM’s top suit, and all his fellow suitlings, to the long-delayed reckoning (a.k.a. a root and branch reform and anvil-shaped clock cleaning). So what we get is a hideously overpaid chief executive that’s willing to play rhetorical footsie in a [Bill] Cinton-esque style to secure an initial $25b your hard-earned tax money– without strings attached. “General Motors CEO Rick Wagoner said today that limits on use of low-interest government loans should be loosened,” Automotive News [AN, sub] reports from Rick’s testimony at a “so-called” [AN’s term] energy summit. “He called his recommendation ‘an amplification of terms’ rather than loosening. But he contended that a project that leads to production of vehicles with 10, 15 or 20 percent better fuel economy should qualify for federal loans.” Wagoner, who largely avoided talking about the loans, and didn’t mention either “b” word,  didn’t get a completely free ride. “Sen. Bill Nelson, D-Fla., chastised Wagoner for the auto industry always fighting fuel economy standards and predicted companies will be back next year for a financial rescue.” Ya think? Meanwhile, “A Toyota lobbyist walking nearby was asked what he says if a lawmaker asks about loan funding, and he said, ‘We’re staying out of it.'”

Hey, GM’s stock price just bounced 11 percent! Are the leaked photos of the production Volt responsible for the vote of confidence? Maybe anticipation of the forthcoming Cruze launch in Paris? Uh, no. The Detroit Free Press reports that the stock bounce came only “after a Wall Street analyst said a $25-billion government loan package for the auto industry would ‘notably reduce bankruptcy risk’ for the automaker.” And isn’t that heartwarming? It turns out that all of the pro-bailout editorials, lobbying and chatter has actually done GM some real good. For the moment. And to keep that ball of feel-good rolling, the Freep has posted a “Q & A” about the bailout, accompanied by a hilariously unironic photo of the Volt concept. Inside, subtly-pro bailout “answers” abound. For example, we learn that the Volt is indeed an important factor in the bailout, as it meets the government goal of topping its direct competitors’ fuel economy by at least 25 percent. “General Motors Corp. could qualify for a loan to help convert the Hamtramck plant to build the Chevrolet Volt — a car that drives its first 40 miles per day without a drop of gas but relies on unproven battery technology. But Ford Motor Co. wouldn’t be able to get a loan that would cover retooling Michigan Truck in Wayne to build relatively conventional, gas-burning small cars.” Asking itself “what would automakers have to give up?” the Freep gets all angsty. “That’s a $25-billion question,” they write. “So far, there’s no sign the industry would have to make additional sacrifices to win approval; automakers contend the 35-m.p.g. standard was their concession. But other aid plans, including the Chrysler bailout, have required cuts and belt-tightening in return.” Not to mention executive bloodletting. Literally.