Jalopnik poses a pertinent question– at least for semantically-minded pistonheads. How can GM "extend" a 72-hour sale into a 14-day event? Andrew Stoy takes us down the spinmeisters' rabbit hole. "But how do 72 sort-of hours in seven days end up being 72 no-we-really- mean-it-this-time hours spanning a whopping 14 days (Tuesday the 24 through Monday the 7th)? By using the eight-hour workday! First, subtract the weekends; that's minus four days for a total of ten. But ten times eight is 80, you cry! A-ha. Don't forget the Fourth of July, friends. Subtract eight more hours, and you end up with a perfect 72-hour-long 72-Hour Sale. Which is exactly how GM intended it from the start, we're sure." As for the financial implications, it's important to remember that the fire sale prices came at the expense of GM's margins. And while the moved metal bolstered GM's sagging sales– from unthinkable to just plain horrible– there will be a reckoning.Quoted by U.S. News & World Report, Credit Suisse analyst Chris Ceraso predicts the 72-hour sale will generate "some pretty severe payback over the coming month or two."

We're getting reports from the front line that GM's 72-hour sale is a success– of sorts. One dealer reports that business was so brisk that both the Dealer World system (used to verify codes. locates, ordering, and more) and GMAC's computer comms crashed. "The F&I guys had to use the fax, then phone and stay on hold for an hour." Popular models are… gone. "Try and find a Cobelt or HHR at the ZERO for 72. Can't be done." Another dealer reported that he'd sold 15 additional units during the sale, a number he called "substantial." Which is, of course, a relative term. IF this plays out across the country, GM's Black Hole Tuesday numbers will be bad, but they won't be as bad as analysts' predictions. The downside: the prices– hence profits– are scary low. Loaded 1/2 ton pickups are walking out the door for $200 per month. And GMAC is ignoring the "when you're in a hole stop digging" maxim; offering low credit score buyers up to 150 percent loans (to get them out of their backwardsness). Worst of all, July and August. Despite the hit to the bottom line, and the long-term damage to GM's pricing, metal is being moved. Short-term thinking GM may extend the sale. The question is, can it afford to?

While we wait for automaker bankruptcy filings, we have a little schadenfreude from a different (but equally deserving) sector to keep you going. Reuters reports that spiraling foodstock costs are tearing a giant hole in profit margins for domestic ethanol suppliers, causing a spate of bankruptcy filings. Corn (the main ingredient for domestically-produced ethanol) was already hitting record prices before the recent deluge in the Midwest. Post-flooding price spikes have wrought havoc on the whole ethanol business plan. Alex Moglia of Moglia Advisors, a biofuel consultancy group, tells Reuters that 12 biodiesel and ethanol plants have declared bankruptcy in recent months, with more to follow. The plants that are still open are typically producing at about half capacity, says Moglia. Ironically, a major problem for domestic ethanol producers is the transportation of their fuel. The majority of ethanol refineries are in the Midwest, which has a massive oversupply of corn juice. High fuel costs are preventing America's alternative fuel from reaching larger markets on either coast at competitive prices. Ultimately, the big boys of ethanol– your ADMs, and VersaSuns– will survive the hard times for ethanol producers, thanks to agribusiness diversification. It's the little guys that are being forced out of business, as reality begins to hit home for America's "magic fuel." Even so, their elected officials are probably lobbying for bailouts as we speak. 

In 2001, GM named Progressive Progressive Molded Products supplier of the year. Boston investment firm Thomas H. Lee Partners bought Progressive in 2004. With '07 revenues cresting $1.4b in 2007, the company's been a major GM supplier (TTAC is still investigating which parts they make for which GM vehicles). Yes, well, like so many other suppliers, Progressive got stuck between rising raw material costs and declining prices. Progressive filed for Chapter 11 on June 20, listing $500m in debt vs. $50m worth of assets. And now, as the court prepares to liquidate the supplier, GM has asked for court approval to seize tools from Progressive. Reuters reports says GM's filing cites "potential supply disruptions" that could "force the carmaker to shut its assembly lines." "The tooling is essential to ensuring the production of the component parts GM's assembly lines depend on," GM said in court papers, describing the company as a "single-source" supplier. You may recall that a federal bankruptcy judge withheld supplier Plastech's tooling from Chrysler, which forced ChryCo to temporarily suspend production. That's all GM needs right now. Or, strangely, maybe it is. 

Last we heard, Ford tried to shop Volvo to China's SAIC. Now Automotive News [AN. sub] reports that The Blue Oval Boys are trying to dump sell its troubled Swedish division on to Renault. We now learn that initial talks with Renault began last fall. But those broke down over "price differences" (as in Ford thought Volvo was worth something). Apparently, talks have now resumed. Renault/Nissan CEO Carlos Ghosn has said on numerous occasions that he's looking for a partner in the American market. Someone. Anyone. GM? Chrysler? So, why not Volvo? You know, other than the fact the brand's only successful U.S. product– the XC series SUVs– just rolled-over and died. Of course, Ford continues to deny Volvo's on the auction block. "We are focused on improving Volvo's business results," says FoMoCo spinmeister Mark Truby. Meanwhile, AN says that Ford is also talking  with Dongfeng Motor Group. With Ford burning cash, and credit in short supply, expect a Volvo sale as soon as a sufficiently gullible partner is found.

The perfect storm we predicted is rapidly approaching hurricane force. Whether or not you believe Motown's automakers could have predicted the soaring price of gas (hint: they could have at least hedged their bets a little), it's increasingly clear that the truck-heavy domestics are in deep, deep shit. The price of oil has jumped again today; this time on rumors that Israel is about to attack Iran over their nuclear weapons program, "disrupting" Iranian oil supplies. Bloomberg reports that OPEC President Chakib Khelil predicted that the military threat– and the falling value of the U.S. dollar– may drive oil prices from their current price ($143 a barrel) to $170 a barrel. Meanwhile, Goldman Sachs has declared that supply and demand, rather than speculators, are responsible for oil's rally. All of which has raised gas prices, killed the U.S. new car market, murdered light truck sales and torn a hole in Ford, GM and Chrysler's balance sheets. Tomorrow is Black Hole Tuesday for The Big 2.8, when the full horror of the sales stats are revealed. In anticipation of this bad news, The Detroit News reports that GM stock hit a 34-year low ($10.57). Ford's stock tumbled to $4.46 a share. Barron's reports that late last week, "some [funds] designed for individual investors are selling at about 50 cents on the dollar-almost as if GM were headed for bankruptcy." Almost?

You may recall the Plastech debacle. Chrysler's interior supplier got bailouts from ChryCo, then filed for Chapter 11. ChryCo tried to swoop down and take the tooling. A federal judge said no. Since then, the supplier's been sold off. And much to somebody's chagrin, the owner of the mismanaged parts maker has pocketed, wait for it, $12m for running the company into the ground. And if that's not bad enough, and I say it is, Crain's Business Detroit reveals that the federal judge overseeing the break-up allowed Plastech to hide Julie Brown's compensation from public view. And no wonder. "Those documents show that Julie Brown's husband, three brothers, two sisters-in-law, a sister, a cousin and a nephew were on the payroll to the tune of about $6 million a year. Of that, $2.25 million was paid to Jim Brown, Julie Brown's husband. From other documents, it appears that Brown's personal driver, cook and two housekeepers were paid by the company." Strangely, Crain's sense of righteous indignation also files for bankruptcy. "Employing family members is no crime. Trying to keep how many relatives and what they were paid from the public suggests that Plastech's owner thought she had something to hide. If each family member performed his or her duties well, what's the problem? Surely the compensation is not the cause of the company's overall financial problems." No, of course not. Nor is it any indication that the company was poorly run. At all. 

Back in the 70's former TTAC columnist Brock Yates coined the term Grosse Point Myopia: the tendency of Detroit's execs to use each other for their frame of reference. [Our own Andrew Dederer revisited GPM in October 2006.] And now Ford's Presidente de las Americas, Mark Fields, evokes the concept with his insistence that doing better than before is as good as doing well. Or being prepared. But you'd expect these sort of revisionist weasel words in an article by The Detroit News on the D2.8's troubles the day before the June sales numbers drop (as in off a cliff). Did you know that after last May's numbers, Ford and GM "executives were alarmed?" Yes, "eventually [eventually?] they made almost desperate decisions that will cost thousands of jobs, change the vehicles people drive and determine whether their businesses survive." And check this: Mike DiGiovanni, GM's executive director of global market and industry analysis, told scribe Tom Krishner "oil prices in February began to rise, still not to an alarming level because they were consistent with previous seasonal spikes. Gasoline was still at a nationwide average of $3.03 per gallon. In March, though, pickups' share of the market dove to just 11.6 percent and gas rose to $3.24. 'That's when I said 'Red Alert,' Digiovanni remembered. 'We're worried.'" To which Krishner adds "Even critics say it would have been nearly impossible for the automakers to predict the 74-cent-per-gallon spike in regular gas prices between February and May." This is going to be one Hell of a wake-up call. Or, even more worryingly, not. 

We've been sounding the alarm on Detroit's liquidity "challenges" even before the automaker's began their most recent "turnaround" efforts. Before I relate Automotive News' [sub] tardy take on the situation, keep in mind that Ford has abandoned its promised "return to profitability" target (and not set a new one), GM never had a publicly pronounced plan to get back in the black (how great is that?). And Chrysler's gone into radio silence since its private equity owners bought themselves a multi-billion dollar passel of trouble. And don't forget Fitch's Ratings has better access to corporate info than Automotive News; they've downgraded all three automakers and put them on negative credit watch. Alright then… GM "will burn through about $1 billion a month this year and $6.3 billion next year, says Patrick Archambault, an analyst for the investment bank Goldman Sachs Group Inc. That would leave an anemic $8.7 billion in cash by the end of 2009 unless GM dumps assets or adds new debt, he said." Ford "is in better shape — about $29 billion in cash and $11 billion available through credit lines. Moody's Investor Service says Ford could exceed a two-year total cash burn of $14 billion by the end of 2009." Chrysler "started 2008 with slightly less than $10 billion in cash. On June 18, Bloomberg News reported that Chrysler will burn through $2.5 billion this year and would end the year with $7.7 billion in cash." We're thinking they're all low-balling. You? 

“We have a model that is buy, fix and hold,” Timothy Price, managing director of Cerberus, told the Financial Times last Thursday. “It is not a problem for us to have a 10-year holding period.” Riiiiiight. The FT reckons "Chrysler was forecast to lose $1.6bn last year following a $1.4bn loss in 2006." This year's sales are a 9mm slug to Chrysler's chest. With no immediate or even medium-term prospect of undigging that hole, and ChryCo banking a $2b loan, TTAC sources have reiterated their belief that the company-wide summer vacation signals the end. The Canadian Press reports that Chrysler "told workers in a memo on Wednesday that the Toledo North Assembly Plant, which makes the Jeep Liberty and Dodge Nitro midsize SUVs, will be shut down for seven weeks from July 7 through the week of Aug. 18 due to sagging sales. The Newark, Del., Assembly Plant, which makes the Dodge Durango and Chrysler Aspen SUVs, was shut down starting Monday for five weeks, with workers scheduled to return Aug. 4, and the Warren truck plant, which makes the Dodge Ram pickup, will close for five weeks in late June and July." Normally, these are one to two week breaks. This time, the rumor mill insists, they will be permanent. [NB: the August third "hard stop" represents the last day Cerberus can sue Daimler for false conveyance.]

Automotive News [AN] reports that the Wall Street Journal has got a hold of a J.D. Power report on June's sales stats. As you can see above, it ain't pretty. In fact, it's ugly as Hell. If J.D.'s mob are even remotely accurate, the U.S. market is undergoing a contraction violent enough to make a mother of five think twice. "J.D. Power and Associates is predicting the June seasonally adjusted annual sales rate will plunge to 12.5 million vehicles, down from 16.3 million last June. That is far below what other analysts have projected for the month's sales." Especially GM, which predicted (at last count) 14m new vehicle sales for the year. J.D. Power expects Toyota's sales to tank by 6.6 percent. "That would give it a market share of 18.7 percent, near GM's predicted 19.2 percent share." Yes, well, there is no way GM can sustain itself at a 19.2 percent market share of 12.5m vehicles. Chrysler? Again, I reckon their company-wide summer break will be terminal. Meanwhile, the real numbers will be released on Tuesday, and TTAC will be there. 

Whatever else you can say about White House hopeful John McCain– and you're going to say lots– the guy's got a set. Followers of our E85 coverage will recall that McCain was the only candidate to come out against ethanol-related subsidies for corn farmers before the Iowa primary. While in Iowa. Yesterday, the Arizona senator toured Lordstown (home of "high mileage Chevrolet Cobalt and Pontiac G5 economy cars"), and then came out against a federal 911 for any of Detroit's ailing automakers. Speaking at a town hall meeting, McCain was all about putting government dollars into "research" into alt propulsion (a $300m prize for anyone who can guess how much money he'd send Motown's way). But a bailout? Automotive News [sub] provides the money shot: "A bailout, I don't think works." In fact, The Detroit News quotes McCain's antipathy to bailouts in general. "Frankly I just don't see a scenario where the federal government would come in and bail out any industry in America today." Over to you, Barack.

Chrysler spokeswoman Shawn Morgan wants the world to know that her employer isn't going to file for bankruptcy. "This rumor is false and without merit whatsoever." Rumor? More like thoughtful  analysis, after ChryCo drew down a $2b line of credit ($1.5b from 20 percent owner Daimler and $500m from 80 percent private equity owners Cerberus). This a couple of weeks before their company-wide "summer vacation." And Fitch Ratings dropped the ailing American automaker to B- with a negative outlook (more bad juju to come). Meanwhile, it was deja vu all over again for former Chrysler rescuer Lee Iaccoca. Lee addressed the troops today, bringing them a message of hope from an earlier, equally fraught time. "Automobiles in America are still a vital business," he said, seated on a stage next to current chairman Bob Nardelli. "We'll live through it. Don't panic. Things are going to be OK." According to The International Herald Tribune , Nardelli gave Iaccoca ironic props. ""Thanks to Lee, we're here today," Nardelli said. As for tomorrow…

First, this was an easy call. Commodity costs have jumped significantly in the last year, eating into Toyota's– and everyone else's– profits. Second, as the new world leader, ToMoCo is best positioned to pass on those costs. Quoted by Automotive News [sub] CEO Carlos Ghosn admitted as much. "It's very, very difficult to move in a market without somehow the leader of the market (making a) move." Third, you gotta read between the lines here. "Our basic principle is to continue to work on cost reductions within the company first," said Toyota spokesman Paul Nolasco. "But we won't be able to avoid thinking about price hikes in the future considering a recent jump in raw materials costs." How… inscrutable. As I reported in General Motors Death Watch 182, here's real deal: Toyota wants to see what happens to the other guys– specifically GM– before upping its profits. "We'll make a final decision after evaluating April-June sales and production costs," a "top Toyota official" told The Nikkei business daily. 

GMInsideNews says that the 2010 Saturn Aura, a clone of Opel's new Insignia midsize sedan, is on hold. GM has already shipped much of the tooling to the Kansas facility where it was planning on churning-out the Aura in late 2009 as a 2010 model. While GM hasn't made an announcement, GMI confirmed that the program has been paused, and speculates that the move will, at the very minimum, delay the next gen Aura's arrival in America. This after recent rumors that one or more of GM's brands is headed to the great automotive dealership in the sky. Is Saturn about to be strategically reviewed to death? We're not exactly talking about a critical brand for GM here, with about 7k – 8k non-SUV sales per month. Lest we forget, GM did the same product pause prior to Oldsmobile's euthanasia a few years ago. Talk about irony: Oldsmobile was starved for product and funding in the 1980s to develop the Saturn brand. On the other hand, some commenters at GMInsideNews see it differently: the pause is for fresh fuel efficient engine development. Or alternatively, Saturn will delay the Aura until 2012 or 2013, adding "Oh, and by 2013 GM will be picking up momentum at which time the 4-Door Sedan version of the Aura can return." With apologies to all you extremists, I respectfully think that's notgonnahappenatall.com.