When is enough, enough? GM has to be asking that about their former subsidiary Delphi. The AP [via Forbes] reports that The General has agreed to lend the parts maker another $350m "so Delphi can maintain a minimum level of liquidity." That brings GM's financial stake in the company they thought they'd dumped spun-off to $900m in loans. And that's on top of the $3.6b they paid out to cover Delphi's UAW pension liabilities. Delphi has been in Chapter 11 since October 2005. Their bankruptcy original plan included exiting Ch 11 this past spring with an equity deal and massive loans. When Appaloosa Management and other investors backed out of a $2.55b equity deal at the last minute, Delphi had to go back to square one. Last week, bankruptcy Judge Robert Drain ruled that Delphi can file a lawsuit against Appaloosa and the other investors. Until that's settled (and assuming the lawyers don't eat up whatever settlement they get), it looks like GM will continue bailing out their largest supplier. The question is, who will bail out GM?

There's a Letter to the Editor in the current issue of Automotive News that encapsulates everything that's wrong with the North American automotive industry. It's even the letter of the week, boxed and highlighted in GM taupe, given special prominence and headlined “Why won't consumers buy Detroit cars?” The letter is from a third-generation Canadian Chevy dealer, a guy whose family has been selling GM vehicles for nearly 90 years. You'd 'a thunk he'd learned the basics during that almost-a-century. But no. “Our small car, the Chevrolet Aveo, fell 19.7 percent in U. S. sales in June,” Tom Wills of Wills Chevrolet writes. “Why? Surely this must be the right car for the times…. We have the best product we have ever had… Why aren't you buying our products? What have the imports got that we don't?” Here's a guy who not only flunked grammar but thinks a rebadged Korean Daewoo Kalos is “the best product we have ever had.” And because it has good mpg numbers 'Murricans should be required to buy it even though it's a stumpy little crapcar. What have the imports got? Let me count the ways: quality, performance, styling, resale value, reliability…oh, never mind. Wills didn't actually write this, but he might as well have: “We threw you this rotten bone and you won't chew on it, so you should be sent to the pound until you learn which cars we require you to buy.” Madness.

Do The Detroit News' headline writers have a daily cheerleading contest? Or is it more of an intellectual challenge thing: let's see if we can outspin the spinners? Why else would the Motown paper bury the fact that Ford's killed plans for a downsized version of their full-sized F-150 pickup in the text of an article titled "Ford high on fuel sippers?" Drug-related snickers aside, the meat of the matter arrives in paragraph seven, where we learn Ford reckons a more fuel-efficient, EcoBoosted F-150 obviates the need for the F-100. "The Detroit News has learned, the automaker has put aside plans to build the F-100, a smaller, lighter version of the F-150. The new truck was to have been built at the Michigan Truck Plant in Wayne, but Ford has decided to retool that plant to produce small cars. It could still build the F-100 at one of its other truck plants if it later determines there is a need for the product. Ford has also taken steps to ensure that it can quickly change its mind if it decides it needs to bring a new global version of the Ranger to the United States." Cost-cutting, smart move or cost cutting disguised as a smart move? "The small pickup segment doesn't really provide a lot of benefit," analyst Erich Merkle told the DetN. "You buy a pickup truck for bed space and towing. There really isn't much substitute for a full-size pickup. But it all depends on what happens to the price of fuel." Now I'm really confused…

Once again, The Wall Street Journal reports on the latest automotive meta-gossip as fact, citing anonymous sources. "The two companies agreed earlier this year to team up on pickup trucks and subcompact cars. Since then, they have been discussing an agreement under which Nissan would produce midsize sedans that Chrysler would sell in the U.S. under its own name, people familiar with the matter say." This is the K-Martization concept that TTAC floated in the Chrysler Suicide Watch. Although the WSJ is happy to conclude the partnership "could help bring the company back to profitability, even though its vehicle sales are declining," this will never work. As our Deep Throat points out, "It’s way more complicated than it appears. Imagine having different vendors sourcing entire cars… the logistics are impossible. There’s no commonality in interiors, exterior design (no matter how hard Chrysler tries to align the exteriors), the systems (including software), etc. etc. They’re all different among manufacturers. Imagine parts distribution – a nightmare – trying to source all of that and then supplying it. Simple things like part numbers go haywire. Then what about warranty items. Who pays what?" And then there's branding… A full CSW to follow.

The Detroit News reports that Senator Barack Obama wants to help Michigan et al. help him become president of the United States (surprise!). To that end, Barack will gladly use your tax money to encourage Detroit to, as my 14-year-old puts it, party like a Barack star. Speaking at the Lansing Center, "Obama proposed $4 billion in federal loans and loan guarantees to help the automakers meet his goal [of 1m hybrids by 2015]– a figure he first mentioned last month in a letter to United Auto Workers leaders — and a $7,000 tax credit to drivers who buy plug-in hybrids." That is, it has to be said, small beer. So Detroit's lackeys said it. "U.S. Rep. John Dingell, D-Dearborn, one of the auto industry's staunchest supporters in Washington, said the domestic companies could require $30 billion or more to meet the goal for their initiatives." Of course, if the real goal was more hybrids, why not let Toyota in on the action? Or the feds could just let the free market do its thing. Anyway… Obama also "modified" his position on domestic drilling (hey, sure, why not?), and proposed selling some oil from the U.S. strategic reserve [just before the election]. In case you were wondering… 

Get this: it wasn't last week. It was the week before. GM's Veep of Global Badge Engineering made this comment in an interview with Just-auto [sub] on the 23rd of July at the London Auto Show [sorry we missed it]. Given the $15.5b hole that opened-up in GM's second quarter financial results on the following Friday, I guess you could say Maximum Bob's remarks constitute pre-cataclysmic (post-modern?) irony. Anyway, the winner of TTAC's first annual Bob Lutz Award offered the usual grist for our collective mill. "The US press is full of pontifical analysts on television [Huntley Brinkley?] saying that the real problem with General Motors is that they are just not producing the vehicles that the American public wants. That's a complete fiction. We are producing the vehicles that the American public wants, we just can't produce enough of them because of the sudden swing in demand where all of a sudden everyone wants small passenger cars and a year ago everybody wanted big V8 trucks. We can't turn on a dime like that, but we'll get past that and our future product programmes are all in the pipeline and continue unabated." So, will The Big 2.8 make it? "We have a rough spot to get through in terms of liquidity…" 

TTAC newcomer Ken Elias reckons his most excellent Chrysler Suicide Watch 37 flushed Auburn Hills' proverbial grouse from its metaphorical heather. Whatever the cause, ChryCo to reassure the world that it's not about to swan dive by revealing some of its financials. Automotive News [sub] reports that the ailing American automaker claims "operating income" of $1.1b for the first half of 2008. Jim Press, Chrysler co-president, said the $1.1 billion was Chrysler's earnings before interest, taxes, depreciation and amortization. Chrysler also had $11.7 billion 'in cash and marketable securities.'" CFO Ron Kolka claimed the number included $2.3b in "restricted cash" and excluded $2.3b in Voluntary Employee Benefits Association assets. The overall number is higher than a lot of analysts expected, but it includes the $2b ChyrCo borrowed recently. The main question: is Chrysler playing silly buggers with the books?

Not unexpectedly, Chrysler's results once again tumbled into terrible. The ailing American automaker's sales fell 28.8 percent overall. Sadly, the sales breakdown doesn't look much different than last month's. But that should come as little surprise; absolutely nothing has changed. Thanks to ChryCo's uninspiring and truck-heavy product mix, the sales chart again lists a whole bunch of double digit percentage drops.  Overall, cars were down almost as much as trucks:  28.2 percent for cars vs. 29 percent for trucks. The minivans have switched places – T&C up a few thousand, GC down a few hundred. Dodge's big hair van (the Journey) is selling slightly better than the brand-new Challenger. The smallest cars are again underperforming, with only the Jeep Patriot in positive territory, up a paltry 4 percent. A gaggle of discontinued vehicles– Chrysler Crossfire and Pacifica, and Dodge Magnum– are down in minus 80 percent territory. The Durango, which has not been discontinued (yet), due for Lame Duck Dual Mode hybridization, is also down 84 percent. Just 384 trucks left the lot. Chrysler's Project D fuel-sipping mid-size sedan can't come soon enough. Literally.

Rumor has it Rick's toast. Obviously, there's no way to officially confirm GM CEO Rick Wagoner's termination by GM's Board of Bystanders. But I want to state here, and for the record, that TTAC flagged Rick Wagoner as the wrong man at the wrong time in the wrong job from the moment we began our industry coverage. To those who say Wagoner made the best of a bad job, I call bullshit. The General Motors Death Watch and GM's financial record offer incontrovertible proof of Wagoner's ongoing managerial malfeasance. If nothing else, consider the fact that his administration relentlessly pursued a "we can cut our way to prosperity" philosophy. In this Wagoner has been deeply misguided. And misguiding. The CEO's failure to face the facts, both within GM and without, identify him for all time as a weak, ineffectual leader. Wagoner's lack of accountability– both personally and professionally– stands as an utter condemnation of GM's Board of Directors and America's "old school" corporate culture. Wagoner has pocketed over $100m and secured a bankruptcy-proof pension for himself and his heirs. His real legacy will be the psychological despair and economic misfortune of the one million-plus people whose livelihoods depend– depended– on General Motors' health and vitality. I'm sure Wagoner is a nice man, personally. I've never met a CEO of a major corporation who wasn't (and yes, I've met a few). But it's good riddance to bad rubbish.

OK, that's not the real name of Chrysler "We Don't Need No Stinkin' Leases" program. It's "Shop 'til You Drive." You have to admit: it's a lot less catchy than our version. I mean, I'm not quite sure how the ChyrCo message parses. Shop 'til you drive away? Shop 'til our salesmen drive you nuts? No se. Here's ex-Toyota and current ChryCo Prez Jim Press' official explanation [via Automotive News, sub]: "We are leveraging the move from leasing to retail purchases to offer our customers the best deals of the year and make buying as affordable as renting." No way Jose! Anyway, the bottom line: 40 percent off sticker for the Ram, 25 percent off MSRP for the Aspen, 24 percent off the Town & Country minivans and 28 percent off Grand Cherokees. Chrysler Financial is offering up to $2k cash on "select" retail purchases and expanding its 72-month financing. Apparently, Chrysler "Celebrates August Retail Purchase and Finance Enhancements." Please don't tell me a Lionel Ritchie soundtrack is heading our way…. 

Click here for "Shop 'Til You Drive Sales Event" press release  

It's hard to believe that General Motors was once the world's largest company. It's even harder to believe GM was once the world's most profitable company. If there's one factor connecting the GM money factory of old with today's sinking ship, it's a sense of a boundless (senseless?) optimism married to a mien of manifest destiny. One wonders if GM could produce something as… seamless as this PR piece today. Sadly, yes. [Any resemblance between this film and a hypnotic smoking cessation video are entirely obvious.]

In a not-so-stunning piece of preemptive PR– before the July sales data hits the fan– Chrysler CEO Bob Nardelli has told his troops that more fuel-efficient vehicles are on their way. The Detroit News reports Nardelli's four-wheeled fuel-sipping cavalry could arrive as early as next year, "possibly including an unexpected model to debut next year." Less specifically, "You very well could see some new platforms, some new vehicles out next year," Nardelli told reporters at a dealership dedication. The aggressively conservative head of the ailing American automaker also took the opportunity to introduce a new euphemism. "We continue to reprioritize our capital," Boot 'Em Bob reassured. "To make sure we are responding to one of the most significant changes we see in consumer buying preferences to downsize and look for fuel efficiency." Will a previously-conjectured partnership with Italy's Fiat or India's Tata Motors or Japan's Nissan or France's Renault or the UK's Ultima [just kidding] deliver this much-needed Chrysler product or products? To quote a Disney movie I can't recall, Mmmmmmm. Could be. Or better yet, Bob himself: "Partnerships with other automakers could be part of those new product introductions." So now you know. Ish. 

TTAC has its General Motors Death Watch Series and innumerable daily blogs on The General's fall and fall, but CNBC has it's own GM's Up Shit Creek website. In anticipation of next Wednesday's documentary "Saving GM," the peakcock people have added a new url to their e-arsenal: insidegm.cnbc.com. Of course, the title of this magnum opus and the fact that GM advertises heavily on NBC will have alerted TTAC's Best and Brightest that a major PR job is in the offing. (I'm thinking that if you downed a shot of Jack Daniels a everytime your heard the word "embattled," "beleaguered," "challenge" or similar, you'd be wasted by the first commercial break.) The program's strapline tells the tale: "In this original documentary, CNBC's Phil LeBeau goes inside GM [it was raining at the time] and reports on the company's dramatic struggle to transform its tarnished image and sagging fortunes." Even without whiskey, there's some funny shit coming down. In a clip from the show, Phil says, without irony, that Car Czar Maximum Bob Lutz' first job was getting his employer out of denial. And yet… "The quality gap only remains in the public's awareness," Maximum Bob asserts. "It's gone." Well something's gone; like CNBC's credibility. Wait, did they ever have any? 

We've just heard from our sources that GMAC is about to announce that it will no longer offer lease deals on the Yukon, Yukon XL, Suburban, Tahoe, all full-size trucks, Envoys and TrailBlazers as of tomorrow. The General's captive finance arm will also raise the "money factor" (the leasing rate) on Cadillacs by two percent. Needless to say, this will be an enormous blow to GM's sales. We're told that GM has called a meeting of all mid-western dealers at the Rock Financial Showcase for the same day, [presumably] so that marketing maven Mark LaNeve can announce the incentive deals that will replace leasing. We also hear that GM is about suspend employee pricing on most car lines, such as the Chevy Cobalt, in order to make money where they can. We'll have more info as we get it. [hat tip to you-know-who-you-are]

GM ALWAYS releases the really bad news on a Friday.The two-day interregnum gives Wall Street's money men a chance to get distracted by booze, babes and baubles. More SOP: auto analysts predictions of GM's losses are usually too high. (You might suggest an intentional disinformation campaign, but I couldn't possibly comment.) This time out, Bloomberg makes a pretty good case for, uh, what are we going to call THIS one? Holy Black Hole Friday? Anyway… "Collapsing values of leased sport-utility vehicles may force General Motors Corp. Chief Executive Officer Rick Wagoner to announce $2.3 billion in losses tomorrow on top of more than $1.4 billion that analysts have forecast." Uh-oh, here comes that damn "headwind" analogy again… "This is clearly one more headwind they have to fight,'' Lehman Brothers analyst Brian Johnson opined. "If they end leasing, it could end up being a 5 to 10 percent headwind to sales.'' To paraphrase Police Chief Martin Brody, "You're going to need a smaller, faster and more seaworthy boat." [Triskadecaphobes note: Bloomie's survey of 13 auto analysts reckons GM will report a loss of $2.41 a share.]