Automotive News [sub] reports that the exit of 5,000 salaried employees in the past week has created “chaos” within Chrysler, and bankruptcy rumors have suppliers considering cash-on-delivery demands. According to Chrysler spokeswoman MaryBeth Halprin, “the claim of chaos is unwarranted. There is certainly in this first week without 5,000 employees a transition taking place,” she said in an e-mail to Automotive News. “This is an opportunity to continue the transformation of our company, rethink work processes and focus on core function.” Right. For more on ChryCo’s “transformation,” check out this story from the NYT.

Chrysler has been battered in the last two days of congressional hearings. If there’s one thing that everyone in congress seems to agree on, it’s that Chrysler isn’t worth the hassle. Not only is it the smallest of the three automakers, but the Cerberus issue has loomed large as well. Today alone Nardelli told representatives at least twice that as far as he was aware, Cerberus didn’t have the funds to revitalize Chrysler. Needless to say this didn’t go over particularly well (private equity is deliciously easy to demonize), and Nardelli was looking increasingly stressed as the hearings dragged on. Probably aware that it’s about to become a sacrificial lamb (or, in a last-ditch sympathy ploy), Chrysler has reportedly hired law firm Jones Day as bankruptcy counsel, according to the Wall Street Journal. Neither side has confirmed or denied the move, but since the WSJ is quoting “people familiar with the matter” it must be true. Corinne Ball, who previously worked on the Dana Corp reorganization, GM’s Daewoo acquisition and “many cases involving the United Auto Workers union,” is said to be handling the case.

In all this talk about GM’s financial health, the most important element of any potential turnaround has been woefully neglected: the company’s corporate culture. GM’s is so utterly dysfunctional that it makes John Wayne Gacey’s home life seem like Peter Brady’s. There is no way– no way whatsoever— that GM can recover with its current management. Be that as it is, I’ve been contacting recently “liberated” GM employees to get a glimpse of life inside the belly of the beast. And pretty it’s not. “I remember walking my dogs and literally dropping to my knees and praying to God I would get out of GM,” one ex-exec told me. “I’ve seen people throwing-up in the bathrooms because of the overwhelming atmosphere of fear, terror and panic… It’s the most warped and bizarre thing I’ve ever seen in my life.” This from an employee with over 20-years of industry experience in several large companies.

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When TTAC’s Bertel Schmitt first blogged the story that China had designs on Chrysler and GM, the resulting traffic melted our server. So we added another one. That one melted too. Our stalwart TTAC technical team tells me they’re now load balancing– and doing something about handling our traffic spikes. The view counter’s disappearance serves as a stark non-reminder of that terrible, wonderful day. And, of course, Bertel wasn’t just whistling Dixie (or whatever Germans living in China whistle). Bertel’s given us more inside dope today, as Bloomberg breaks the story into America’s MSM: “Dongfeng Motor Group Co., China’s third-largest automaker, said it had received proposals from investment banks to buy assets from General Motors Corp. as the U.S. carmaker tries to avoid running out of cash,” Bloomies reports with a hint, hint, nudge, nudge, knowwhatImean?  “’We’ve gotten e-mails and investment materials asking us whether we would be interested in buying some of GM’s assets,’ Hu Xindong, head of investor relations, said by phone today. ‘So far, our management has not yet reviewed the issues and we have not yet responded.'” GM says it isn’t in talks with Dongfeng, but that’s not what the story says, is it?

As GM’s 41 percent November sales drop sinks into the public consciousness, The General’s generals have not-so-coincidentally released their not-secret bailout request. And here it is. Judging from the state of things, Rick Wagoner might need to fly to DC– before it’s too late. “General Motors said Tuesday it needs $4 billion in government loans this month and a total of $12 billion by late March to keep operating,” MSNBC reports. “Altogether, the auto giant is seeking up to $18 billion in government funding — including a $6 billion line of credit in case market conditions worsen.” Jeez, that doesn’t leave much for Ford or Chrysler! I make that $7b between them. A pittance really. Unless… they’re planning on asking for more. Could it be?

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WHAT: Chrysler LLC President and Vice Chairman Jim Press will meet with more than 50 Maryland Port Authority employees and Maryland officials in a Town Hall to discuss Chrysler’s and all domestic automakers’ impact on the U.S. trade industry.

Chrysler is the largest exporter for the Port of Baltimore, and Port employees will have the opportunity to pledge their support for legislation to provide temporary financial assistance to the American auto industry.

Chrysler President and Vice Chairman Jim Press will discuss highlights of Chrysler’s plan for future success, as well as share details about other similar rallies across the Unites States. The Town Hall also is a chance for Port employees to voice their opinions about what Congress and the general public should know about the deep impact the auto industry has on the local Baltimore community.

WHO:

Jim Press, President and Vice Chairman, Chrysler LLC
Steve Rand, President & Chief Executive Officer, AMPORTS, Inc.
More than 50 Maryland Port Authority employees

WHEN: Tuesday, Dec. 2, 2008, from 10 – 11 a.m.

WHERE:

AMPORTS ATC Terminal
2908 Childs Street
Baltimore, MD 21226
(443) 923-2100

There is a whole lotta bailout going on. More and more people are bailing on lending the Detroit dunces a helping hand. Last to bail: CNN founder Ted Turner. He went on NBC’s Meet The Press and said to Brokaw: “I saw it coming years ago that Detroit was headed for a crash, and it’s amazing to me that they didn’t see it either.”  Ted’s recommendation: “Let them go bankrupt and get Toyota to buy them out.” As if they would. The one who stands firm by the side of the bail bondsmen is United Auto Workers (UAW) boss Ron Gettelfinger. The AP (via MSNBC) reports that Big Ron says the UAW would be “willing to consider more concessions on wages and benefits” to secure a federal bailout. But then again, not so much. “Based on the changes we’ve made to our contracts, we are competitive already.” By the same token (or a different one, I’m not exactly sure), Gettelfinger told CNN that $70-an-hour UAW wages were a “myth.” And Chrysler, Ford and GM should tell Congress they’ll limit corporate pay, bonuses and severance packages in return for bailout bucks. In other words, some pigs are more equal than others.

As Farago wrote, the Caravan of Love broke down before it even left Motown. Supposedly, it went virtual, and took the information superhighway instead of routes 76 and 70 as even the most half-witted GPS would recommend. Jeez, they can’t even do what a 3 year old can do in 10 minutes: Build a website. TheEngineOfDemocracy.com displays the dreaded “Our site is currently under construction.” It promises:  “We will be back online Monday, December 1st as promised.” What do they mean with “back?” Where they ever on-line before?

And then, that logo: I bet, trademark lawyers in Wolfsburg are right this minute arguing with Volkswagen top management: “We recommend sending a cease and desist. They are diluting our Autostadt mark.” “It might not be politically expedient. They’ll say we hate them.”  “If you don’t send the letter, we may lose our mark.”  Anyway, the thing on the site looks terribly like Volkswagen’s Autostadt logo. The Autostadt logo looks back at a long line of German Heritage: It was purloined from Volkswagen’s New Beetle, which was inspired by the old VW Bug, which was ordered by old Adolf himself. But at least: It was all in the family. The Engine Of Democracy: In the ass, and cooled by hot air?

“The caravan bound from Detroit to Washington, D.C., to support federal bridge loans [a.k.a. bailout] for Detroit’s Big Three automakers will take the information superhighway instead of the interstate… Grand plans of an automotive cavalcade to the nation’s Capitol grew to the point of impossible once the idea was floated last week by a number of influential people in Detroit.” And so The Detroit News pronounces the T.O.D. for the Caravan of Love. “The outpouring of support was huge,” said Jason Vines, Compuware Corp.’s vice president, TTAC podcaster and former chief spokesman for Chrysler LLC. “We’ve changed this into a virtual march, in part because we didn’t want to become targets for environmental groups or others.” Whoa! Hold on there. First, GM CEO Rick Wagoner can’t drive to DC with his $25b bailout bowl because of “security concerns.” Now the Caravan of Love is bummed-out by possible bad vibes from whacko tree huggers? Talk about a bad trip! So… now what? The bridge builders are launching a site called TheEngineofDemocracy.com. “There, people can share their stories about how the auto industry impacts their lives.” Customers too?

According to Bloomberg, who has it from people supposedly familiar with the matter, GM “is studying whether to shed its Saturn, Saab and Pontiac brands in addition to Hummer.”

So assuming that they do:  Will they just dump the brands? As in throw them away? Or will they sell them? If the latter, who do you think will be the successful bidder?

Like any good scandal, Jet-gate threatens to unfold like a wedding napkin. As TTAC pointed-out when Alan Mulally was hired, Ford’s $25m p.a. CEO’s perks include free, non-business-related jet travel for his wife and family. And now Bloomberg reports that GM has asked aviation regulators to block the public’s ability to track The General’s squadron of Gulfstream jets. “We availed ourselves of the option as others do to have the aircraft removed” from a Federal Aviation Administration tracking service, Greg Martin, told Bloomberg. The spinmeister “declined to discuss why GM made the request.” Which raises one important question: what are they hiding? To be charitable, we could take GM’s previous statements about CEO Rick Wagoner’s personal security needs seriously. Other than that, we can invoke Bertel Schmitt’s (TTAC’s man in China) reports that The People’s Republic are ready to talk turkey with GM about a Chinese buyout/rescue plan. Perhaps Wagoner plans on hopping the Pacific to do the dirty on his detractors. One also wonders if this tracking thing works backwards; have GM execs been partying like it’s 1999? Has Rick been stashing wads of cash off-shore? Anyone know how UAW Gettelfinger got to Washington?

“In the coming weeks we will begin to implement a relatively new cost savings initiative at the Warren Tech Center. This initiative deals with the personal waste baskets that are present in most all of the office work stations and conference rooms. Our plan is to eliminate these waste baskets and transition to a modified method of personal office waste disposal.

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GM is doing whatever it can to tame its cash conflagration this week, as it seeks to survive another few weeks and prove to congress that it’s serious about shaping up. The Wall Street Journal reports that these efforts have crossed over from the sublime to the ridiculous (always closer than they seem), as everything from clock maintenance to escalator operation budgets are being slashed to save cash. So just how tight is GM cinching its belt? GM is eliminating clock maintenance, stopping RenCen escalator operation at 7pm, eliminating voice mail at plants, buying cheaper pencils, and next year it will reduce its press fleet and cancel its “Mark of Excellence” dealer award. Worst of all? “At GM’s metal-fabricating plant in Grand Blanc, Mich., Steve Bean, a union committeeman, said he recently had to tell workers they would have to wait until at least next year to get $270 stipends they were promised in order to buy T-shirts, hats or coats emblazoned with their union local.” On a more… significant front, Bloomberg reports that GM will seek to reduce its $43b in debt and renegotiate elements of its 2007 UAW contract as part of its restructuring plan which is due to Congress on December 2. Should GM exchange debt at levels less than the original value, Standard and Poors would consider those issues in default while not necessarily cutting the automaker’s overall debt rating, according to S&P analyst Robert Schulz. “A financial restructuring, along with government loans, is an alternative to bankruptcy,” says Schulz. “It doesn’t fix the economic environment, though, and it’s the economic conditions that are causing their cash burn.”