I discovered Michael Furman’s photography whilst covering the Ralph Lauren car exhibit at The Boston Museum of Fine Arts. The two men were made for each other. Furman’s photographs portray automobiles as perfect objects: gleaming, seamless sculptures that exist outside the confines of entropic reality. Lauren’s collection IS perfect, restored to a level of flawlessness that makes an airbrushed cover shot of Britney Spears look like a photo booth snapshot. And then painted to a gloss to shame Adriana Lima’s luscious lips. When I talked to Furman about Lauren’s collection (Furman shot the catalogue), the artist showed an encyclopedic knowledge of GM’s design heyday. And now, here it is. The publisher was kind enough to send me a couple of copies [full description of the book after the jump]. One goes to Eddy for his birthday (today!). One goes to the commentator who can best tell me, in ten words or less, how GM can turn around its business. Thank you, in advance, for your submissions. [NB: to see the horizontal images properly, please click on them a second time]

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Chrysler’s co-Prez Jim Press has forced Automotive News [AN sub] to back away from an earlier story. Ish. This morning’s article claimed that Press’ recent appeal to Chrysler dealers– to order pre-built cars from a pool of 12k vehicles– constituted a return of the dreaded “sales bank.” But a funny thing happened on the way to the retraction: AN discovered further depths to Chrysler’s misery. According to Press, canceled orders account for the “fence units” in dispute (not driveways). The cancellations came from store owners who couldn’t obtain floorplanning loans (to cover inventory costs), dealers who went bust, fleet buyers who got cold feet and “vehicles left unsold from dealership sales promotions.” So what’s the difference between “overstock” and a sales bank? Jim Arrigo and Hayden Elder, co-chairmen of the Chrysler Dodge Jeep national dealer council, set us straight. “When we were doing sales bank, there was a lot of pressure,” said Arrigo, owner of Arrigo Dodge-Chrysler-Jeep in West Palm Beach, Fla. “It’s totally different this time. There isn’t somebody calling up.” Who’d listen? And what’s the bet that those 12k units are the tip of the iceberg?

According to Yahoo! Finance, “General Motors Corp. said in a regulatory filing Monday [full text after the jump] that it and GMAC LLC agreed to temporarily adjust the financing company’s terms for making advance payments to the automaker for the wholesale financing of vehicles sold to GM dealers.” Zooming in… “GMAC typically pays GM the invoice amount for each vehicle shipped by the automaker to a GMAC-financed dealer on the first business day following the vehicle’s shipment.” Closer… “Under the deal, GMAC won’t be required to pay the invoice amount until that amount is due from the dealer, which will allow GMAC to defer payment of up to $1.5 billion in cash due to GM until Dec. 30. GM will have a security interest in the financed vehicles during the shipping period.” Holy brink of bankruptcy Batman! Clearly, GM intends to use federal bailout bucks– should there be any– to prop-up GMAC. Never mind that, this move virtually eliminates GM’s cash flow (such as it is). I mean, GM won’t get paid for these vehicles in months. If ever. And if GMAC is down to its last $1.5b of liquidity, this little paper shuffling exercise ain’t gonna save nothin’. Bye-bye GMAC, arrivederci GM. Drink up lads. Last orders.

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Once upon a time, GM’s captive finance unit GMAC was the engine of its success, pouring billions and billions and billions of dollars into the General’s corporate coffers. At some point, the tail wagged the dog: cheap credit and lax lending practices fueled an unsustainable growth in new car sales. A bubble that recently burst (in case you hadn’t noticed). Meanwhile, GMAC’s mortgage unit ResCap pursued the same no-loans-barred policy, only worse. Then, in his endless (seemingly, at the time) pursuit of propping-up GM’s bottom line with asset sales, CEO Rick Wagoner sold 51 percent of the soon-to-be-troubled finance unit to, of all people, Cerberus (owners of Chrysler and Chrysler financial). Which brings us to today’s GMAC, which is about to go tango uniform, hoisted by its own retard. The only way out: change itself into a bank and scarf some major bailout bucks. Only there are rules for that sort of thing…

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The Detroit News (of course) reports that Chet Czaplicka (real name) is doing a Ressler (i.e. conflating purchasing a Chrysler, Ford and/or GM product with patriotism). “The chief executive of a Livonia blood-processing firm is trying to do his part to give the automakers a little bump in sales. His medical firm, Comprehensive Care Services, is offering workers $1,000 toward the purchase of any new truck or car made by Detroit’s auto companies — a small gesture that Czaplicka hopes will make a big statement about just how important the Big Three’s survival is to businesses in the region.” Other than the MSM, Czaplicka’s offer has fallen on fertile ground with his employees– ish. “The incentive already has caught the attention of one employee in Florida, Sean Murtha, who is looking to replace his wife’s Lexus with a more fuel-efficient vehicle. The offer of an extra $1,000 got him to consider buying American. He and his wife are eyeing a Ford Edge.” Well, he would say that wouldn’t he? And Murtha sounds like a tire kicker to this former salesman… And it might be churlish of me to point it out, but Detroit’s automakers have been offering a grand off their vehicles (at least) for a long, long time– without stimulating much action down at the dealership. Still, makes a good story.

GM first made Saturn’s “strategic review” official in the bailout-begging, condition-floating context, although Lutz swears Ol’ Man Wagoner was on it months ago. Anyway, now that the industry has processed the news, there’s a rash of post-Saturn plans flying around.  Our man in China seems fairly convinced that Chinese firm SAIC could make a bid for Saturn and its conveniently independent dealer net of over 400 stores. Another possibility that might be more palatable for GM comes from Automotive News‘ [sub] Richard Truett, who reckons the General could kill two birds with one stone, by “handing the keys to the Saturn brand to GM’s German affiliate, Opel.”

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“We thank the House and its leadership for their bipartisan vote to support America’s domestic automakers at this most critical time for the nation’s economy. The House vote brings us closer to saving jobs and to creating a more competitive U.S. auto industry in order to maintain America’s economic vitality. We encourage the Senate to act soon so that we can continue at full speed on the restructuring and advanced technologies plans that will form a stronger, more viable GM.”

In the cosmology of the ancient Greeks, the universe would not tolerate a gross breach of justice. When a hero was killed with dishonor or without completing his destiny, supernatural forces would emerge from the cthonic realm to haunt the guilty party. These karmic enforcers were called the Erinyes, or Furies, and they are coming for Chrysler. The Detroit News has gone past mere Cassandra status, no longer satisfied with merely prophesying doom for the Pentastar brand. No, since its DCX gutting, private ownership, pathetic products and tiny scale reflect poorly on the other Detroit automakers and their bailout beggary, the DetN is actively calling the wrath of the Furies upon the house of Mopar. Interestingly, the Furies appear to have changed their name to CSM global forecasting. “It would be best for everyone involved if Chrysler were allowed to gracefully wind down and go away in a controlled, staged process, leaving a Detroit Two,” intones Michael Robinet, CSM vice president of global vehicle forecasts. There’s “not a whole lot of vehicle development going on at Chrysler,” Robinet said. “It has slowed down substantially and (is) just focused on core vehicles,” he said. “How long can it continue as a caretaker company?” asks Robinet, calling for the just vengance of the gorgon-headed Furies. CSM CEO Craig Cather argues that much of Chrysler’s weakness can be blamed on Daimler, which he says “handicapped Chrysler and its ability to expand internationally.” Whatever the sin against the natural order, when the Detroit News begins listing the crimes of a hometown automaker, you know their fate is nearing its end.

I’m a fan of Saturn. The dealers, not the products (or the planet). Oh, the product are OK, I guess. But the dealers rock. I mean, despite the fact that the “different kind of car company” was assimilated by the GM Borg years ago, as a group, Saturn dealers are friendly, informed and straight-shooting. Yes, the word “relatively” probably belongs in there somewhere. In fact, considering the justifiably low esteem with which the average car dealer is held, praising Saturn dealers for their business ethics is a bit like saying the average ten-year-old lemonade stand proprietor is a financial genius compared to GM CEO Rick Wagoner. But you have to remember that, in terms of respectful and courteous customer care, Saturn was Lexus for working folks. Cook-outs and all. And as with Lexus, the quality of the cars really isn’t important. You know important, but not that important. Is that worth “saving?” Sure. But GM ain’t savin’ nothin’. That ship has sailed. Still, you can’t blame the Saturnalians at saturnfans.com for wanting to keep the brand alive. And an online petition makes perfect sense. But where’s the justification? And why connect that defense with support for the D2.8 bailout when the feeling is a long, long, long, long way from mutual? Love truly is blind.

In an SEC filing today, GMAC Financial Services  warns that it may back away from its bank holding company status application, due to its inability to refinance some $38b in debt. That bank holding company status would make GMAC eligible for TARP funds, but without a federal rescue many see GMAC heading for bankruptcy court says Automotive News [sub]. Including GMAC. The Cerberus-owned finance firm warned that if it doesn’t receive holding company status by December 31, “it would have a near-term material adverse effect on GMAC’s business, results of operations and financial position.” Meaning it will be forced to sell of more assets (with no buyers lining up) and miss 2009 debt payments. To meet the Fed’s requirement, GMAC said it needs about 75 percent participation in its debt-swap offer. So far, participation is just over 20 percent. The good news? If you’ve got $20b or so rattling around and you want in, GMAC has extended its debt-swap deadline until December 12. Deep Throat breaks down the bad news thusly: “GM would have to write down its investment in GMAC likely to zero.  The big problem is the floorplan issue for dealers.  There are few replacement lenders right now, and those that will step up will offer harsher terms, curtailments, etc.  That means less ability for GM to stockpile cars at dealer lots.  OTOH, it’s possible that other captives, like Toyota’s finance arm, could seize an opportunity to play… especially if a GM dealer is also a Toyota dealer.  But again, terms will be critical, and depends how much exposure these guys want and how much capacity they have. What’s interesting is that the bonds trade high with only 10-15% discounts from par.  This is due to the recovery from finance assets being much better than from manufacturing assets.”

someone said…poor Rick, he just inherited too many difficulties…

I replied…

do you have all night? he could have stayed away from Zarrella, he could have left John Rock alone at Olds. he could have shut Saturn down long ago. he could have stayed the hell out of Fiat. could have kept Delphi inhouse, could have held marketing staff resposible. could have ousted Deloitte and rotated auditors to generate accurate and truthful financials, and of course…could have let LaNeve go forward with implementing Return to Greatness.

he could have kept an eye on Eric Feldstein at GMAC and not let mortgages be written that would jeopardize the future of GMAC. he could have listened to Jerry York and changed the Board meetings to an actual working environment. he could have detailed plans and earnings guidances instead of offering nothing more than that smug smirk, stutter, and eye twitch.

he could have held annual meetings in Detroit where the people are, he could have gathered individuals from the industry for the Board instead of British Petroleum, Goldman Sachs, and Astra Zeneca. he could have kept the great car names of our past, he could have put people to work in some capacity instead of idling them in the Jobs Bank. he could have let natural attrition replace long term employees over time instead of throwing money at them with reckless abandon. he could have left the retirees alone to enjoy their well earned security (after all they are our greatest ambassadors). he could have should have but didn’t

Date: 12/08/2008 Ref. number: Marketing /  Programs and Promotions /  G_0000017071
Subject: GM Dealership Employee Discount for Family
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Beginning Monday December 8, 2008, GM is offering a temporary program allowing GM Dealership Employees the opportunity to offer GMS (Employee Discount) pricing to the same eligible family members that GM Employees do.

This means that GM Dealership employees can offer GMS pricing to their spouse, children, stepchildren, grandchildren, stepgrandchildren, grandparents (including in-law and step), parents, stepparents, siblings (including full, half and step), mother/father in-law, sons/daughter in-laws, brothers/sisters in-law, and same sex domestic partner (SSDP) where applicable (NOTE: Eligible SSDPs are treated the same as spouses, and therefore, their dependent children and stepchildren are also included).

Eligible family members must take delivery by January 5, 2009 and may only purchase GM vehicles that the employing dealership location is franchised to sell or from GM dealerships owned by the sponsoring Dealer Operator at the time of delivery.  The program excludes Saab vehicles.

To get an authorization number for your family member, log in to gmded.com and select “Dealership Employee Discount for Family” along the left.  Enter your eligible family member’s date of birth and zip code and get you authorization number

Authorization numbers for this program must be submitted for payment to BARS by January 5, 2009.

——————————————————————————–
Contact name: Program Headquarters E-Mail:
Department: Marketing and Advertising – CRM NVPP Marketing Phone: XXX
Intended roles: Internet Sales Person,  UItest,  Parts Manager,  General Sales Manager,  Medium Duty Sales Manager,  Internet Sales Manager,  Wholesale Sales Person,  Warranty Administrator,  Used Vehicle Sales Manager,  Used Vehicle Sales Consultant,  Title Clerk,  Systems Manager,  Service Manager,  Service Advisor,  Parts Inventory Manager,  Parts Counter Person,  Parts & Service Director,  Office Manager,  New Vehicle Sales Manager,  New Sales Consultant,  Medium Sales Coordinator,  Inventory Manager,  HR Manager,  General Office Support (Cashier),  General Manager,  Fleet/Commercial Manager,  Fleet Sales Consultant,  F&I Manager,  F&I Director,  Dealer,  Business/Accounting Manager,  Body Shop Technician,  Body Shop Manager,  Sales Functions,  Sales Management
Archives: 01/08/2009

Yesterday, we reported that Ford is in a big hurry to unload Volvo to interested parties (preferably) in China. The article quoted a story in London’s Times. The Times had received information that Ford is talking with SAIC to take Volvo off Ford’s hands.  There are more interested buyers:  Top executives of Ford’s Chinese joint venture partner Changan are in talks with Ford to buy Volvo. This according to China’s National Business Daily which has it from an insider at Changan.

At the Guangzhou auto show last month, Volvo’s top executives had long talks with Changan Auto president Xu Liuping. When Ford Motor announced its plan to sell Volvo, the presidents of Ford Asia Pacific, Ford China, and Volvo China met Changan’s president at Changan’s HQ in Chongqing for closed-door talks. NBD’s source added that it is logical for financially troubled Ford Motor to consider Changan as a possible Chinese partner of its Volvo brand, because they have the Changan Ford Mazda joint venture which is also producing the Volvo S40 and S80 models. There are more reasons to buy …

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Fiat boss Sergio Marchionne has been schmoozing with Automotive News Europe [sub]. “By the time we finish with this in the next 24 months, as far as mass-producers are concerned, we’re going to end up with one American house, one German of size; one French-Japanese, maybe with an extension in the U.S.; one in Japan; one in China and one other potential European player,” Sergio predicts. And now, the WQOTD: “Companies can only survive if they produce at least 5.5 million cars a year.” So, someone special, who will it be? Someone special like… “Toyota, General Motors, Volkswagen, Ford Motor and Renault-Nissan.” Note: we could have gone another way on this one. In the same article, the thoughts of Jürgen Pieper, analyst at Metzler Bank in Germany, gets major play. Herr Pieper opines “Size in the current situation is what matters.” Small and nimble gets subsumed by big and… stupid? Stimt. “Daimler has been scarred by its experience with Chrysler, BMW bought Rover but sold it again after high investments failed to pay off. Analysts say both episodes showed that synergies between premium and volume carmakers are elusive.” “Elusive” as in non-existent?