One more time! Maybe even literally. Strangely, GM's told its dealers that revealing the imminent arrival of "employee pricing for all" to the outside world would be a felony. So I guess you can call me Miss Demeanor (you know; if I wasn't a Silverado-loving man's man). Anyway, it's all over the damn web. Reuters reports [here and via Automotive News] that "the offer starts Wednesday, runs until Sept. 2 and applies to all 2008 model year Chevrolet vehicles, according to the dealer, who was not authorized to discuss the GM plan." See? The black ops are only a beat behind. So to speak. And if employee pricing isn't enough to pull in the punters, "the top-selling U.S. automaker will offer cash back on slower-selling light trucks, including the Silverado pickup, said the dealer, who had just been briefed by GM." Top selling? Slower-selling? Careful you don't hurt yourself pulling those punches. Anway, we now have confirmation that ALL GM brands are involved in the fire sale. Oh, and try and guess the Money Factor in a standard GM lease these days. It's 16 percent. Which will apply to the new Malibu on Wednesday.

Our Wild Ass Rumor was three days early, but accurate. Our source inside the former GM division and bankrupt autoparts maker reports that the company has told its workers that 600 white collar Delphinians– in the Electronics and Safety organization– will be shown the door by the end of the year. (The total number employed thereabouts is 3k.) Delphi will identify the 600 puntees by the end of this month [August]. And despite previous promises, the pension freeze is now "independent of bankruptcy emergence." And when might THAT be? Our source says there were "no warm fuzzies on when we could expect to emerge." The Delphi wound continues to fester, only more so.

Reuters quotes a source with "direct knowledge of the matter" (i.e. themselves) that claims Chinese SUV maker Changfeng Motor Co. took at a look at buying GM's Dead Brand Stunting and said "Hahahahaha. No." More journalistically, "Changfeng, partly owned by Mitsubishi Motors Corp decided not to proceed with the talks after a tour of Hummer's U.S. production facility, as it saw only limited potential for it to market the vehicle, the source said. 'The Hummer is way too expensive for the Chinese military and demand from civilian buyers is not big enough to justify a purchase, especially with oil prices running near an all-time high,' the source said." OK, if that doesn't sound like a made-up quote, nothing does. Despite the fact that Reuters should have filed this one under Wild Ass Rumor, it's certainly true that the HUMMER brand is a drug on the market, and it ain't Viagra. CNN reports that India's Mahindra and Mahindra is also taking a pass. After Russian "oligarch" Oleg Deripaska said "nyet."

Anyone who thinks GM isn't in a cash crunch better come up with some serious spin stat. The American automaker has officially confirmed that it's withdrawing from the Oscars. No, I don't mean it's removing itself from contention for "The Most Shameless Product Placement in any Movie Since Cinema Was Invented" Oscar. We're talking about ad sponsorship. As in no more. Which also means the Autoblog gallery-filling pre-Oscar stars and our cars "Style" event is toast. The Wall Street Journal makes the contrast with years past. "Not only has GM — the maker of brands such as Cadillac, Chevrolet and Saturn — aired a slew of commercials during the popular awards show, it also has paid extra to be the exclusive auto advertiser during some of the Oscar broadcasts. GM's marketing around the program has included on-the-ground promotions, such as giving the show dozens of GM vehicles to shuttle celebrities to the event and to Oscar-related parties." What, no Escalade Hybrid limos? Nope. And no Emmy sponsorship. And the next Olympics will not have anything shiny and blue paying the bills. It would be nice to think that all this money saved will be going towards new product development. But it's not. It's what the non-technical analysts call throwing shit overboard to stop the ship from sinking. 

The "run on the bank" supplier scenario we predicted for Chrysler is coming to pass. We've already reported that Chrysler's been playing silly buggers with their payment (stretching terms to keep the cash flowing flowing). And now ChryCo is beginning to face the predicted backlash. At the Traverse City management ho' down, Chrysler's executive vice president for procurement did his best Joe Pesci imitation for insolent suppliers, The Detroit Free Press and TTAC's Best and Brightest. "If a supplier wants to push us because of their fear [that we're going bankrupt], then they're violating the contract that's in place and I will take the necessary actions," John Campi intoned. "I have had suppliers come to me with a gun to my head and I say, 'I am not going to let you shut down production, but if you are serious then you have to live with the legal consequences.' And the legal consequences are not the end of it because if somebody does that, I can tell you they will not be walking around very long a supplier of choice." 

Who knew that Jochen Felsenheimer, the Munich-based head of credit strategy at UniCredit SpA, was an AC/DC fan? One things for sure: he's no fan of GM. After Moody's downgraded GM's creditworthiness, Felsenheimer pronounced "Recovery on GM might be significantly below 40 percent.'' Bloomberg provides the quote and explains the math. "Bondholders may lose as much as 73 percent in the event of a default by the world's biggest automaker, based on the price of contracts used to fix a recovery value for the securities. The recovery swap rate on GM dropped to 26.5 percent, from 39.5 percent at the end of June, meaning investors expect to get only 26.5 cents on the dollar in an insolvency, CMA Datavision pricing models show. Investors are pricing in a lower recovery rate than the average of 40 percent in bankruptcies as capital is eroded by $69.8 billion of losses since 2004." In other words, the market's confidence in GM's ability to stave-off C11 is at an all-time low. And headed lower. 

[General Motors Death Watch 192 here]

Once again, former GM division and bankrupt parts supplier Delphi is proving to be the thorn in GM's side that could well prove to be a lance through its heart. Or something like that. Anyway, Automotive News [sub] reports that the feds are taking steps to sort out Delphi's pension liabilities, and The General could end up with one big ass bill. "In a letter to GM and Delphi, the federal Pension Benefit Guaranty Corp. warned it would lay claim to $8 billion if the automaker does not keep its pension plans intact, the [New York Times] paper said. This would dilute the claims of Delphi's other unsecured creditors, who are owed about $3.5 billion." To forestall that possibly mortal blow, "The U.S. government has asked bankrupt auto parts maker Delphi Corp. to transfer more than $1.5 billion of unfunded pension obligations to former parent General Motors by September 30." Whew! And here I thought we were talking about real money. 

So Ford's President of the America's, Mark Fields, did his stint at the Traverse City auto industry management mahalo. Ford was kind enough to publish the formerly private jet-setting Fields' speech, which we present below. His opening theme is clear (expressed above): "I also have been watching some of the recent commentary – including from speakers this week – about who's to blame for the auto industry not anticipating the dramatic increase in fuel prices and the accelerated segmentation shifts this year. But I really wonder if that is where we should be spending our energy as industry leaders." No, of course not. (Ignoring the fact that Fields was in power way back then.) Even stranger: "While none of us would have planned for the sharp downturn in the industry or the dramatically accelerated segment shifts, we are seizing the opportunity in a dramatic way." Would have? Yes, the guy's got a 'tude. "Some of our rivals snickered when we first starting talking about EcoBoost nearly two years ago – but it's interesting to see others trying to catch up with us…" To be fair, Fields is making all the right noises, plan-wise. But you have to wonder why such a shoulder-chipped old school Detroit apologist (and aspiring CEO) wasn't swept away by Alan Mulally's new broom.

Mark Fields' Speech at the Traverse City Management Seminar 

The Wall Street Journal reports that "Chrysler LLC will aggressively pursue partnerships with other auto makers to expand its global reach–" Hang on; "expand its global reach?" Don't you mean get something into Chrysler's American showrooms that customers will actually buy so we (Cerberus) can finally sell someone this turkey? No? OK. Carry on. "and its president dismissed the idea that joint ventures may damage the value of Chrysler's own brand." Well exactly! How could rebadging/reengineering someone else's product possibly hurt Chrysler's brand? (What brand, you say?) Especially when ChryCo Co-Prez Tom LaSorda promises "every joint venture will either produce an entirely new vehicle not already in Chrysler's lineup or it will be limited to a slightly modified car or truck made or designed by the partner but that doesn't compete with an existing Chrysler model in the same market." What's more, LaSorda says everyone should be doing it! "Partner early and partner often, because more strategic alliances and joint ventures are on the way. And the best time to partner with a company entering your market is before they enter." So let's see… Chrysler's cutting or trying to cut deals with VW, Nissan, Fiat, Great Wall, Chery, Mahindra and one Russian carmaker to be named (or not) later. Is there anyone "The New Chrysler" won't sleep with talk to?

The Detroit News reports that presidential candidate John McCain "declined to support any of several proposals to provide loan guarantees to the domestic carmakers." (Whatever happened to Just Say No?) During a campaign swing through Michigan, McCain dismissed calls to help Detroit make the cars they should have been making in the first place, or should be able to make now on their own damn dime given all the profits they banked during the SUV and pickup boom, or something like that. Anyway, McCain's rationale: supporting bail-outs would unleash karma that would jinx Detroit's automakers. No, really. "Asked if he backed such proposals, McCain suggested that such support might create a sense of doom around the companies. 'I have heard many of these proposals, but I have also had meetings with the Big 3 automakers, and they are confident that with the new hybrids and flex-fuels and other technology advances … they can succeed. So in all due respect, I worry a little bit about us predicting failure on the part of the automakers when they're struggling mightily.'" "Barack Obama supports loans and tax credits to retool the nation's auto plants and build the next generation of American cars," Brent Colburn, Obama's economic adviser, advised soon thereafter.

We have it from an insider that the bankrupt parts supplier Delphi is about to "downsize" its domestic ops. Not that it'll do them much good. Now that Appaloosa Investments and Friends bailed-out of Delphi's bail-out plan, the former GM division is on its last life. Although Delphi's suing its jilters, what are the odds that a judge can/will force Appaloosa to fork over the billions the money men didn't leave on the table? At best, more money will be lost on lawyers, all 'round. All of which means a Delphi Chapter 7 is just over the event horizon. GM will have to buy up (back) the Delphi bits it needs to keep building vehicles. And as GM's August 8th SEC filing points out, "In addition the Benefit Guarantees may be triggered which would result in additional liabilities to us. We may also be subject to additional litigation regarding Delphi." The flames of GM's cash conflagration continue… [thanks to you-know-who-you-are for the tip]

Toyota's Senior VP for NA engineering and manufacturing is rooting for the D3. "Competition is good for us," Steve St. Angelo told The Detroit News. 'The customers are the big winners, because it makes all of us better." But there's more to Toyota's largesse than simple concern for consumer choice. "We share many of the same suppliers, so if one of our suppliers has difficulty with either Chrysler, GM or Ford, there's a good chance they are going to have difficulty for us." And because of this interconnectedness, Toyota is helping its American rivals however it can without breaking U.S. antitrust laws. "When any of our competitors want to come to our plants, we let them," says St. Angelo. "We really don't want anybody to go bankrupt." The ToMoCo honcho professes faith in the D3's current leadership. "If you really look at the leaders of the Detroit Three, they're some of the finest leaders that this business has ever had. I hope and I think that they'll come out of this. It would help our company. It would help America. It would help our suppliers. It would help everyone." Not to mention the fact that rooting for Detroit helps Toyota in its quest to morph from evil, America-destroying transplant to leader of the United States of Toyota (as examined by Automotive News [sub] columnist Edward Lapham).

Thanks to The Economist, we now have a name for ChryCo's pain. (OK, a number, but literary needs must.) In an article entitled "Detroit's race against time," the UK pub recaps the domestic automakers' litany of woes: truck-heavy line-ups, falling sales, killer depreciation and quasi-criminal stupidity [paraphrasing]. The Economist feels the cash burn. But they also understand the importance of Detroit's general cluelessness. "But if the speed with which the Detroit firms are burning cash is the biggest immediate cause for concern, the deeper question is whether they are using what remains to make their businesses viable in the long term." Ford's plans get a tentative thumbs-up, Chrysler gets a question mark and GM gets a shot to the solar plexus. "GM’s global design chief, Ed Welburn, acknowledges that its next generation of small cars will be designed in places like South Korea and Europe where they 'really know how to do small cars'. But unlike Mr Mulally, Mr Wagoner has not said what will be arriving and when. Indeed, at times he seems weighed down by the sheer complexity of managing such a bloated product portfolio." Poor bastard. [thanks to Point Given for the link]

GM Car Czar Bob Lutz' infamous pre-Katrina remark, "Rich people don't care about gas," has once again come back to haunt him. This time it arrives in the form of a $71,685 two-mode hybrid; a rebadged Chevy Suburban SUV called the Cadillac Escalade Hybrid. Here's the problem: Bob's remark implied that rich people are environmentally unconscious (and, by extension GM). If that's true– and I'm not saying it isn't– why would anyone pay an extra $14,795 (over the base 'Slade) or $3600 (for the two-mode propulsion system's premium) to buy a gas – electric version of the Escalade? Is it because they care about looking like they care about the price of gas? And if that's right– and I'm not saying it is– wasn't Maximum Bob wrong in the first place? And if these rich people really cared about looking like they cared about the price of gas, why would they buy a hybrid SUV (20 mpg city) instead of something more fuel efficient (if a lot less big and infinitely less bling)? How many rich, luxury-loving, boat-towing, gas price or carbon-footprint-aware SUV drivers are there, anyway? Last question (I swear): how much did this doomed PR-mobile cost GM? OK, one more. How long before those hybrid stickers and badges show up on eBay? [First photo of one of these in the wild– customer owned– gets an honorable mention.]

Having escaped The Bored of Directors' Night of the Soft Pillows, GM CEO Rick Wagoner once again watches as his employer takes a hit to its [somewhat nebulous] bottom line. Reuters reports The General is shelling-out $277m to settle a shareholders' lawsuit "contending the automaker made false and misleading statements." (Presumably, in its accounts, rather than generally.) You may recall there was a while there when GM restated its earnings more often than a squealing bookie– which is a bit bizarre (or not) as Wagoner ascended the throne from the Chief Financial Officer slot. Anyway, "In the regulatory filing [which exposed the payoff], GM also disclosed the tentative settlement of a separate lawsuit brought by shareholders, agreeing to make unspecified changes to its corporate governance rules. GM also agreed not to oppose plaintiffs' attorney fees of up to $7.5 million in that case." Unspecified changes? Hang on; is this a publicly-held company or not? And if you think this is bad, wait 'til you see the legal bills when the artist once known as the world's largest automaker files for C11.