Playing poker for money is illegal in Germany. Which doesn’t keep the German government from conducting a high stakes poker game with a group of high rolling players. Around the table: Fiat, Magna, Ripplewood, Chancellor Merkel, Vice Chancellor Steinmeier, Minister Guttenberg. Kibitzing and making comments: The premiers of the Opel states, the unions, the Opel dealers, and just about everybody else. On the table, barely alive: Opel. The Financial Times calls it—with British understatement—“considerable back-room powerplay by politicians.”
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Fiat, RHJ International and Magna have all submitted bids for GM’s European unit, Opel. In an interview published today [reported by The New York Times], German economy minister Karl-Theodor zu Guttenberg reserved the right to reject all three suitors, sending Opel into bachelor’s bankruptcy. “We must first have a high degree of certainty that the significant tax money we will have to provide is not lost,” KTzG pronounced. Roger that. All three offers depend on German financial backing; without which NONE of them will go forward. After those glad tidings hit the net, KTzG went into damage control mode. Speaking to journalists in Berlin, Mr. Guttenberg’s spokesman “clarified” his position: “we want to avoid bankruptcy, but bankruptcy has to be an option. Apparently, an “orderly insolvency” would “not be the end of the company.” Who’s the oxymoron now?

You’d be forgiven for thinking that the sale of “old” Chrysler to “new” Chrysler by June 15 was a done deal. Otherwise, why would Fiat feel free to tell the American taxpayer which three amigos will control “new” Chrysler’s Board of Directors (Fiat Chief Executive and future ChryCo CEO, Sergio Marchionne; Alfredo Altavilla, head of Fiat Powertrain Technologies; and former ExxonMobil executive, Lucio Noto)? Lest we forget, federal bankruptcy judge Arthur Gonzalez swept aside the non-TARP bondholders. But there’s growing, well-organized, politically-connected resistance from the terminated Chrysler dealers. In fact, their Congress critters are calling ChryCo’s (and GM’s) CEO onto the carpet next month, compelling them to testify why they done did it, reports Automotive News [sub]. As part of a rearguard action, Fiat has submitted papers to Arty that say “You don’t let us do this thing we must do and your people will suffer.” Minus the paraphrasing . . .

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GM’s troubles are hitting home. ALL its homes. Reuters reports that GM’s Korean division Daewoo—provider of the execrable vehicle known in the US as the Chevrolet Aveo—is getting the snot kicked out of it in its home market. “GM Daewoo is struggling. It is asking for additional loans from banks, including state-run Korea Development Bank, after using up $2 billion in credit lines.” Oops. Hey, did you know that Daewoo now accounts for a quarter of ALL of GM’s [soon to be formerly] worldwide automotive production? That’s a salient fact because we now learn that the Aveo’s replacement, codenamed T300 and scheduled for April 2010, has been back burnered. To January 2011. In theory. In practice, any such delay is most definitely not a good thing, as its fellow Korean, Hyundai, is planning to cap Daewoo’s ass [paraphrasing]. And anyone else at the bottom of the ladder, anywhere in the world, including China and the US. So can the Chevy Cruze fill The General’s small car gap? Place your bets here. Oh wait, you already have [via Uncle Sam].

End of Days folks, when the president of the United States puts taxpayer billions behind a “merger of equals” between Chrysler and Fiat. The latest weirdness: The Detroit News reports that “Japanese automaker Mitsubishi Motors Corp. is in talks to supply vehicles to Saturn dealers if the brand and dealer network is sold this year.” Would that be the same Mitsubishi who’s ass has been repeatedly kicked by the U.S. market, to the point where most industry analysts figured it would give up and go home? The same company that built a thousand cars in the USA so far this year? The one that sold 55 percent fewer cars last month than the same month last year (3919 vs. 8878)? The same. Or not. “A Mitsubishi spokesman said he was unaware of the company’s interest in providing vehicles to Saturn’s dealer network.” Yes, well, never mind all that. There’s another player sniffing around, and that’s where the real action is . . .

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CTV.ca reports that GM emailed 245 of its 700 Canadian dealerships notifying them that they’re the biggest losers. According to CNNMoney, this time ’round, GM isn’t basing its dealer downsizing on simple volume. “The auto maker said that, due to the ‘unique aspects’ of the Canadian dealer network, its rationalization efforts will focus on key urban markets. ‘The end result in Canada will be a more competitive dealer network with higher volumes, while continuing to maintain the strongest and broadest dealer network in the country better equipped to serve GM customers.'” In theory. In practice, this is only the General’s opening salvo. The friendly fire is sure to get worse when GM files for C11 at the end of the month.

RLS1400 recently bought a used Mazda from Ramsey Chrysler Dodge. The sales manager just sent him this e-mail:

Hello, My name is Regis J. Larkin Jr. and I am a sales manager with Ramsey Chrysler Dodge and Jeep. I would like to take the time to tell you why you should buy your next domestic product from us. Contrary to all the negative propaganda in the media let me be the one to assure you we are going nowhere. The fact alone that the PRESIDENT of these UNITED STATES BECAME DIRECTLY INVOLVED IN OUR RESTRUCTURING SHOULD SAY A LOT. THINK ABOUT THAT. THEY ARE SO SURE ABOUT US AND OUR PRODUCT THEY ARE GUARANTEEING OUR LIFE TIME WARRANTIES. Thats pretty aggressive don’t you think. In the coming weeks a lot of smaller dealers will be closing. However RAMSEY CHRYSLER DODGE AND JEEP will be going nowhere. In fact we are in the process of redoing our showroom for your comfort and convenience. During times like these we must stand together AS AMERICANS.

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GM’s secured bondholders may not be getting the Chrysler treatment, but anyone still holding onto GM stock has another thing coming. US News & World Report has compiled a list of the 30 investors who stand to lose the most from the GM bankruptcy. They’re all big, evil banks and investment firms (California’s public retiree system being the big exception), so don’t expect anyone to shed a tear for them. Unless of course one of them happens to manage your retirement. Meanwhile, GM stock is still going up. Huh?

Chalk up another reason why Chrysler should have been allowed to fail. The New York Times reports that if Chrysler’s restructuring is approved it would allow the automaker to evade liability for injury-causing defects on its vehicles. An Automotive News [sub] write-up of Chrysler’s creditors reveals that the Ad Hoc Committee of Consumer-Victims of Chrysler LLC consists of 150 members seeking an estimated $650 million in damages allegedly caused by Chrysler vehicle defects. Under current reorganization plans, those creditors would be left with no recourse after Fiat assumes “good Chrysler’s” assets.

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A member of our Best and Brightest spotted this letter to the editor on the American Thinker website. While plenty of industry watchers could have seen ChryCo’s meltdown coming—DID see it coming—it’s still a failure with a human face. And here it is.

My name is George C. Joseph. I am the sole owner of Sunshine Dodge-Isuzu, a family owned and operated business in Melbourne, Florida. My family bought and paid for this automobile franchise 35 years ago in 1974. I am the second generation to manage this business.

We currently employ 50+ people and before the economic slowdown we employed over 70 local people. We are active in the community and the local chamber of commerce. We deal with several dozen local vendors on a day to day basis and many more during a month. All depend on our business for part of their livelihood. We are financially strong with great respect in the market place and community.  We have strong local presence and stability.

I work every day the store is open, nine to ten hours a day. I know most of our customers and all our employees. Sunshine Dodge is my life.

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Well, not officially. Officially, I’d be extremely surprised if GM doesn’t follow decades of precedent and save its ultimate bad news for either Friday (the 29th of May) or the weekend (a Sunday electronic filing). That said, the practice was designed to give the markets the weekend not to flip out about the latest red ink tsunami, fire sale, asset sale, etc. By now the market couldn’t give a shit, knowing as it does that General Motors stock is about to be completely worthless. Still, a new GM filing with the SEC [full press release after the jump] reveals that The General will report the failure to secure “debt reduction agreements” with the UAW and bondholders on May 27. Once that’s done, well, it’s all over bar the shouting.

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The Toronto Star reports that Canadian Auto Workers (CAW) president Ken Lewenza is repeating his call for import restrictions to protect his members’ livelihoods. But the chairman of the union’s bargaining committee isn’t making it a “do or die” precondition for Canadian bailout bucks for GM. “The union has repeatedly told Ottawa to fix the trade problem and limit imports, but Buckley would not comment on whether the federal and Ontario governments should refuse GM’s current requests for loans if the company plans to increase imports here.” Meanwhile, Lewenza said there are “multiple proposals for active workers which are much different” than what Chrysler employees recently accepted—so that company could qualify for Canadian aid. That said, “We are close to the end of our ability to give . . . Sooner or later, GM and the federal and provincial governments will realize that.” Reassuringly enough, there is some common ground: both (all?) sides agree that GM’s pension plan is in far worse shape than Chrysler’s after years of minimal contributions, made possible by a special provision in provincial legislation. See how that works?

Speaking with the New York Times, Ford Marketing maven Jim Farley had some soothing words for Ford dealers: we’re not going to cap yo ass [paraphrasing]. Yet [extrapolating]. Farley’s also taking the opportunity to hammer home Ford’s mantra: we didn’t take government money, so we’re cool, right? This time, Farley went further, predicting that FoMoCo could benefit from the death of those Detroit automakers who did/do. “Mr. Farley was particularly critical of the Chrysler plan, noting how it would affect millions of consumers with little warning. ‘It seems very abrupt and unplanned,’ he said. ‘You don’t orphan four million customers overnight without some fallout.’ Some of those customers, primarily those in rural areas, will migrate to Ford dealerships, he said. ‘It really depends on how G.M. and Chrysler handle these orphan owners,’ he said. ‘If they don’t give them a lot of attention, it will result in consumers going to other brands.’” Hint. Hint. Of course, there be dragons. And Farley knows it.

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The fact that Chrysler is [still] offering buyouts to its United Auto Workers (UAW) employees is not news. The fact that this money is coming from the federal government is also no biggie, actuality-wise. I mean, whose money did you THINK they were using? But the Detroit Free Press report that ChryCo has upped its cash-and-a-car offer to its unionized veterans—to convince them not work at the bankrupt automaker’s closed factories—is a bit odd. Yes, “The autoworkers are now being offered up to $115,000 plus a $25,000 vehicle voucher to leave Chrysler voluntarily. The larger lump-sum payment, which was increased from $75,000 in earlier buyouts, is available to workers under 50 years old who have 10 or more years of seniority. Workers 50 or older who qualify for some pension benefits won’t receive that type of onetime payment. But those with 30 years, or whose age and years together exceed 85, will receive $50,000 plus the $25,000 voucher for a new Chrysler vehicle.” And here’s the kicker . . .

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The Federal Reserve Bank is spending your (and your great-grandkids’) money in lots of creative ways these days. But some minuscule portions of it go to boring humdrum stating-the obvious analyses like this report, “From tailfins to hybrids: “How Detroit lost its dominance in the U.S. auto market.” Well, boring, perhaps to the well-informed B&B here at TTAC, if they’ve kept up on their assigned reading. If not, and a very thorough (but not overly long-winded) analysis is your cup of tea, read away. If you want the Cliff-Notes version, make the jump here:

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