In the run-up to a $50b taxpayer-sponsored handout, Detroit is beginning to fret about congressional oversight/investigation (as detailed in our latest General Motors Death Watch). Detroit News Auto Editor Manny Lopez sees the danger. “GM, Ford and Chrysler are not charitable organizations though they’ve acted like it in the past with everything from labor contracts to benefits and executive salaries. They cannot afford to let that continue. They’re lobbying hard for direct government loans to help bring them out of their automotive abyss, but that can’t happen until they plug a few more holes in the proverbial belt and tighten it even further.” Notice the weak language: “a few more holes.” Yes, while Lopez praises Detroit for tightening-up on (i.e. suing) a handful of employees for violating employee discounts regs, and chides an unnamed automaker for serving non-proverbial “hand-battered pecan crusted whitefish” in its executive dining rooms, he only makes the previously mentioned passing mention re: executive compensation. Hello? Rick Wagoner banked $15.5m last year. Lopez’ half-hearted call for reform tells us that Detroit has more to worry about than it expects. A quick email to your senator would help in that regard.

Bailout bucks moved one step closer to Detroit pocketbooks yesterday, as Senator Barack Obama cozied-up to pro-taxpayer-tit-sucking organized labor. Harley Shaiken outlines the cunning plan to The Detroit News: "Senator Obama is using the Detroit Labor Day kickoff to emphasize three messages," the professor of labor studies at the University of California-Berkeley said. "Addressing the needs of working people, the key role unions play in the election, and the role of manufacturing and the auto industry." Three key areas of Obama's seduction of the UAW and other unions: getting that $50b into Motown's coffers, backing a bill in Congress making it easier to organize new members and renegotiating parts of the North American Free Trade Agreement. The Unions' other suitor, Senator John McCain, believes the best way to an organized laborer's heart is getting that $50b into Motown's coffers, cutting taxes and  creating more jobs (through cutting taxes, strangely enough). Is it enough? Michigan, Ohio and Pennsylvania are swings states and the key voting bloc are union members. The presidential candidate who turns up for their date with nothing more than a bunch of flowers, a box of chocolates and $50b is at real disadvantage.

For some reason, Automotive News [AN, sub] felt compelled to write an op ed on Detroit's desire to hoover-up $50b in low-interest federal loans. As you might expect, the automotive news org of record is highly conflicted. So much so, the piece descends into double negativity by the second sentence. "Much of the political buzz about the federal government providing as much as $50 billion in low-cost loans to the auto industry can be chalked up to election-year ebullience. That doesn't mean it won't happen. But before automakers and suppliers cash any checks, there must be a better understanding of the process and any strings that might be attached." Ya think? Anyway, get this: AN supports the loans as long as Honda and Toyota are included– even though "it's hard to imagine that Honda or Toyota would borrow money from the U.S. government." But if the feds don't make an offer the transplants will refuse, "the loans would be nothing more than a Detroit 3 bailout. That would be a questionable use of tax dollars, even in an election year."  

According to Automotive News [AN, sub], Motown's plans to suck $50b from the public purse to retrofit 20-year-old plants to build fuel-efficient cars are "being overtaken by events." Which is, I suppose, cheerleader speak for "Detroit's automakers have screwed themselves so badly through their own incompetence that they're in danger of going belly-up before the presidential election." AN reached this conclusion thanks to the increasingly hysterical rantings of Senator Debbie Stabenow. "We need to do something now," the Michigan democrat insisted, after a "conversation with Ford Motor Co. executives at a convention breakfast." Meanwhile, even AN is willing to admit that that "something" is a bailout by any other name. "With falling vehicle sales and deteriorating credit markets, the program has become a potential financial lifeline for some automakers and suppliers." Need I mention any names? 

I'm not sure what's scarier: a lobbyist who's a Hunter S. Thompson fan, or a lobbyist who's a Hunter S. Thompson fan who thinks that bumping into Sean Penn at the Democratic National Convention and saying "Oh, you're Sean Penn" is a "gonzo" moment. In any case, Greg Martin, Director, Policy and Washington Communications uses the FastLane blog to make one thing perfectly clear: "This [federal loan program] program is not a bailout but an incentive for the auto industry and its suppliers. Its purpose is to get advanced technology vehicles on the road as quickly as possible in order to help the country meet its energy goals–and that’s exactly what we’re going to use it for." As I've stated in the last GM Death Watch, that's a distinction without a difference. Anyway, Greg had a "compelling product story to tell" the Denver pols, swanning around in eco-friendly cars that no one's buying, listening to BS about cars they can't buy. "People were surprised at the variety of advanced technology vehicles we offer, and there’s a lot more of that where that comes from…from 20 hybrid models in 2012 to the Chevy Volt to hydrogen fuel cells, I wonder if our engineers and technical types ever sleep." In the spirit of Hunter, may I suggest Black Beauties? Or point out that Greg's rhetoric sounds a lot like Richard Nixon's defense of his Vietnam war policy? "Under ideal circumstances, we know what our challenge is. Unfortunately, factors that are external to the auto industry compound that challenge (in other words, the current economic climate is really ugly out there). That’s why this existing program can really help us to keep moving full speed ahead." Fear and Loathing Greg? Just so. 

The Detroit News reports that democratic presidential hopeful Barack Obama has launched a TV campaign in Michigan "accusing" his republican competitor of not supporting federal bailout bucks for Motown's hometown heroes. Damn straight. Oh wait.. "The McCain campaign said the ad was misleading, pointing to the fact that McCain now supports a loan-guarantee proposal. McCain questioned the need for the guarantees during a Michigan campaign stop this month, but later announced he supports them." And if that's not craven enough (and it is for me), here's how The Detroit News described the "re-tooling" program: "The loan guarantees would make it easier for the cash-strapped domestic auto industry to borrow money as they go through the expensive process of transforming their factories to produce more fuel efficient cars." If it looks like a done deal, and sounds like a done deal… mark my words: it's a done deal.

According to the AP [via MLive.com], GM has said "no thanks" to a $56m tax credit and grant package designed to save its Moraine, Ohio SUV plant. Ohio Department of Development spokeswoman Kelly Schlissberg said the state is "disappointed and will continue to look for alternate uses for the plant, which employs about 2,400 workers." The General plans to close the plant by 2010, or sooner, because of "a customer shift to smaller vehicles." In other words, it wazzunt me.

As Farago reported, the amount of federal money Motown would need to turn its business around– if money was, indeed, the determining factor– far exceeds the $25b first mooted. Or the $50b since suggested. And now, having floated not one but TWO trial balloons, Ford, GM and Chrysler are playing coy about the ballooning balloons. To its credit, The St. Louis Dispatch has tried to nail down the exact numbers and conditions, to see if their local minivan plant could be saved. "'We know the legislature authorized up to $25 billion, but the amount that could really make a difference likely is much higher,' GM spokesman Greg Martin told the Post-Dispatch. He declined to say how much additional money would be needed or confirm the $50 billion figure. Ford spokesman Mike Moran also did not confirm the increased loan amount. Chrysler spokeswoman Katie Hepler said the automaker is working to access the government loans. She declined to talk about specific dollar amounts or elaborate on where Chrysler would use any money it borrowed." And here's a surprise. "It also appears that some of the older plants owned by foreign automakers could apply for this loan, according to the original language of the legislation. Toyota Motor Corp.'s Georgetown, Ky., plant and Honda Motor Co.'s Torrance, Calif., location are two that fit the criteria." Only… The Department of Energy has until December to write the final rules that detail how to apply for the money.

The AP reports Bob Lutz' prediction that GM will be profitable by 2010. Well, almost. "Lutz stopped short of predicting when GM would return to profitability, but said if it can further reduce structural costs, get higher prices for small cars, and if the U.S. auto market recovers, its top executives say they hope to return to black ink in 2010." The Detroit News reports that Maximum Bob mentioned Uncle Sam's potential contribution. "[Lutz] also said GM and the other Detroit automakers would benefit from low-cost government loans to help them pay to update plants and speed up development of more fuel-efficient models consumers are demanding amid high gas prices." 

Speaking at a now-standard new model private press preview (our invite got lost in the mail), GM Car Czar Bob Lutz tried to put the kibosh on speculation that his employer was going Tango Uniform (as above)– even as he's pimping for federal loan guarantees. Automotive News [sub] reveals that Maximum Bob reckons "I do think the American automobile business is deserving of government loan guarantees because the financial institutions in the U.S. are so stressed out right now." Lutz said that Wall Street's "stress" led to a lack of financial support, obviating "a competitiveness that we may well need." At the same time, Lutz thinks federal loan guarantees are no biggie. "We are not accepting government money," Lutz insisted. In fact, "the last time the government backed a loan for an automaker — for Chrysler Corp. in 1979 — it made millions because Chrysler paid the loan off early." Millions? Bob Lutz makes millions. (Frequently.) Meanwhile, The Detroit News reports that Republican Rep Joe Knollenberg called President Bush's top economic advisor, Keith Hennessey, urging the president to support up to $50 billion in direct loans for automakers. Bipartisan support, eh?

After Captain Mike today posted that he was having a difficult time merely test driving a Challenger SRT8 before putting down his hard-earned cash to buy one, not everyone was sympathetic. In fact, Jen Dunnaway – the editor of the blog section over at CarDomain.com – thinks we're a bunch of whiners/cry babies.

"Sour grapes of the day: The Truth About Cars has been begging Mopar for a Challenger test car, only to be outraged by the fact that "Chrysler LLC refuses to acknowledge TTAC's existence." Gee, why would a domestic automaker do that? Maybe because all TTAC does is spew hate and vitriol for the Detroit automakers, loudly delight in their every misfortune, and smack their lips in gleeful anticipation of the collapse of our nation's auto industry? Obviously Ma Mopar hasn't heard the one about keeping your enemies closer—and TTAC, after being further thwarted from even taking a regular-joe dealership test drive, decided that the Challenger isn't really that big a deal after all.

[For the purposes of this thread, TTAC's normal restrictions on discussing the site's mission and/or biases are lifted.]

Say what you want about Detroit, it still has some class. The media may already be counting the bailout billions, but the once-big three will be waiting until after Labor Day to visit Washington, hat in hand. Per Emily Post's corporate welfare etiquette, natch. The Wall Street Journal also reports that the Detroit three will speak with a single voice during upcoming meetings with federal loan officers. As in no screwing over Chrysler for a better deal. Of course that means the projected $50b will have to be split three ways. And then there's that damn CAFE ramp-up to worry about. In fact, Detroit insiders are already saying that 2011 compliance alone could take up the whole $50b. Why, it's almost as if Detroit might need even more money! But with political season in full swing and the economy emerging as a major issue, Detroit knows it has only to ask. Posturing representatives will hand out loans for the electoral feel-good, and before you know it there'll be a Volt in every pot. And billions of dollars in taxpayer liability for three spectacularly failing enterprises.

Automotive News [AN, sub] reports that Ford execs are prowling the halls at The Democratic National Convention, drumming-up support for "A Bailout Plan By Any Other Name Would Still Look So Green" low-interest federal loans. Leading the charge (in every sense of the word): Ford Purchasing Chief "Motown" Tony Brown and his company's duly elected representative, Debby Stabenow. So, guys, how much taxpayer money do The Blue Oval Boyz need to buy some more time to hide their incompetence, draw their million-dollar paychecks and help put Barack Obama in the White House; and why the Hell should hard-working Americans give it to them when there's a perfectly good private banking system in this country? (Just kidding about the second part, unfortunately.) "We're still dimensioning," Brown told AN. Stabenow was equally forthcoming. "Stabenow said she doesn't know what the total amount should be. She indicated it may be necessary to press for some this year and more next year. 'We need to do something now.'" What do you mean we, white woman?

In Farago's editorial about the domestic automakers' attempts to get $25b in federal loans, he stated, "it's a prelude to a kiss: the REAL bailout (in for $25b, in for another $25b)." Well, it didn't take long for both sides to pucker up. The International Herald Tribune reports this morning the total has grown to $50b– it turns out the $25b was just for the first year. That would be followed by additional $15b in the second year and $10b more in the third year. Why? The UAW's legislative director, Alan Reuther explains "the amount of concern and urgency from the Detroit companies has increased in the last month and significantly ratcheted up what they're communicating what their funding needs are." But he makes it clear you don't dare call it a bailout: "We don't see it as a bailout. We see it as government assistance to help retooling tied to the production of these advanced technology vehicles." Whatever. It still amounts to billions of the taxpayer's dollars going to fund companies which have been driven to the brink of bankruptcy by inept management who collected obscene salaries for doing so. If they do get these handouts, it should include an oversight committee from outside the industry and from outside congress to make sure the money goes for vehicle design and retooling. Not a cent should be allowed to go to executive salaries or perks, bonuses, lobbyists or any of the other thousands of ways the automakers seem to find to fritter away money. And once that's gone, that's it. No third chances! And furthermore… Huh? … Oh… OK. Here comes the attendant with my Thorazine. I'll go sit quietly in the corner now.

And so it begins. The Wall Street Journal' s lead editorial makes it perfectly clear that Motown's plans to tap your taxes is well advanced. And guess what? It's a god damn conspiracy! "Earlier this month… the top dogs at Ford, GM and Chrysler had a meeting of the minds and decided that the way out of their current losing streak would be to ask the feds for a lifeline. They figure they'll need $40 billion or so to ride out their current troubles until they reach the promised land of hybrids, the Chevy Volt, and, who knows, maybe even profits. We've since heard that lobbyists for the car makers are taking their pitch for direct federal loans around Washington, with a goal of unveiling the plan after Labor Day — conveniently in the frenzy of the fall election campaign. They've briefed Congressman John Dingell, the dean of Michigan Democrats, as well as officials in the Bush White House… The plan is for the government to lend some $25 billion to auto makers in the first year at an interest rate of 4.5%, or about one-third what they're currently paying to borrow. What's more, the government would have the option of deferring any payment at all for up to five years." TTAC will have an editorial on this shortly.