Back when TTAC was a voice in the wilderness on GM’s C11, I asked Bob Lutz if his pension was bankruptcy-proof. Maximum Bob scoffed and joked that he’d check with his accountant. Well, I guess he didn’t; the Car Czar recently revealed that hard times had forced him to sell one of his personal jets. After losing his shirt on GM stock options. The fact that MB’s working for New GM also indicates that he forgot to get while the getting was good. He should have had a word with his boss, Rick Wagoner. The ex-GM CEO, the man who wiped billions from the company’s worth and faceplanted the American automaker, made sure his financial future didn’t depend on anything as trivial as success.

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As our previous story on New GM’s dealer oath indicated, New Chrysler and Government Motors are fighting a desperate battle to head-off H.R. 2743. The bill—which has cleared committee and continues to gather steam amongst the axed dealers’ political allies— would require the former bankrupts to take back thousands of terminated franchisees. “We’re open to a non-legislative solution,” Chrysler spinmeister John Bozzella told Automotive News [sub]. “We’re interested in a non-legislative solution,” GM spokesman Greg Martin echoed in an e-mail. Although the automakers’ media mates are happy to parrot the euphemism, let’s call this for what it is: a pay-off. Price tag? The two automakers sliced 2,789 dealerships. Even if you figure a paltry $1 million each, that’s a $2.789 billion fate-thee-well. Compared to the $70 billion to $100 billion-plus that Uncle Sam’s plowed into the zombie automakers, it’s a pittance. But the actual retail price of the showcase is likely to be . . . much more. Watch this space.

A few weeks ago, we cited Canada’s Globe and Mail, which wrote with great insight: “It’s entirely possible the Magna bid is in serious trouble. Indeed, the obstacles-political, economic, financial and industrial-are formidable and the negotiations are just starting . . . . Let’s just say that Magna’s bid for Opel is shaping up to be the most complicated auto deal of the year.”

That was quite an understatement.

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As little known Tengzhong itches to buy Hummer for reasons unknown, the two Chinese regulators who have to chop (put a big red stamp under) the deal can’t agree whether it’s a great or a dumb idea, Reuters reports. Chop the deal or chop off the head?
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From Reuters comes word that Car Czarlet Steven Rattner will be leaving the Presidential Task Force On Autos. The move “represents the start of a long-planned wind down of the autos panel” according to Reuters’ interpretation of an anonymous White House source. “With GM’s restructuring complete, Steven Rattner, whose leadership and vision were invaluable to the Auto Task Force’s efforts, has decided to transition back to private life and his family in New York City,” explains a statement from Treasury Secretary Timothy Geithner. “We are extremely grateful to Steve for his efforts in helping to strengthen GM and Chrysler, recapitalize GMAC, and support the American auto industry. I hope that he takes another opportunity to bring his unique skills to government service in the future.” Unique skills? Is Rattner getting blown off or is this Mission Accomplished? A little of both?

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I’ve taken a lot of heat in these parts for predicting that Ford’s bankruptcy bound. Having watched GM and Chrysler’s long march to Chapter 11, the signs seem pretty obvious to me: lousy branding, excess nameplates, non-competitive models, a pegged BS meter and a proven inability to take in more money than they spend. Yes, there are differences; his name is Alan Mulally. But, as The Detroit Free Press finally reports, The Blue Oval Boyz are burning down the house. Or, to put it more politely, “Even if Ford Motor Co. reaches all of its targets by 2011, the Dearborn automaker’s growing debt load could end up weighing the company down.” As far as euphemisms go, that one just went.

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When TTAC received a copy of GM’s letter to dealers “asking” them to lobby against the dealer cull rollback bill, we blogged it as a “loyalty oath.” More than a few commentators said pish-posh [paraphrasing]; H.R. 2743 was nothing more than an SOP lobbying campaign. The fact that the letter told dealers to cc GM’s National Dealer Council Chairman Duane Paddock left little doubt in our (OK my) mind that New GM’s dealers were being told in no uncertain terms to toe the New company line (i.e. shiv their former colleagues). Automotive News [AN, sub] reports that “General Motors executives have been pressuring individual dealers to sign a statement saying they oppose legislation that would restore terminated dealerships’ rights, according to a U.S. senator, a dealers group and dealer representatives.” Point counterpoint after the jump.

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The House Appropriations Committee has passed a provision in the 2010 financial services spending bill that would require GM and Chrysler to work through state courts—instead of the federal bankruptcy court—to terminate dealerships. Rep. Steven LaTourette, R-Ohio, sponsored the amendment. Ignoring the fact that federal bankruptcy law trumps state bankruptcy law, LaTourette explained, “Car companies have used bankruptcy to run roughshod over state bankruptcy laws.” In reporting this, Automotive News made what has to be the understatement of the month, if not of the year: “GM opposes the House bill.”  Ya think???

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Who will end up owning Opel is turning more and more into a brawl along party lines. Officially, the seller is GM. The final arbiter will be the German government because they foot the bill to the tune of billions. Trouble is, the German government is divided. It is made up from a coalition between the center-right CDU and the center-left SPD. Both run the country. Both are on each other’s throats. Both are in a bitter fight for votes in the September national elections. Several states are also up for grabs. It’s a “super election year.” Both have their favorites. So who will it be?
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GM has filed a request in bankruptcy court to cancel the franchise agreements of 38 dealers who rejected wind-down agreements. In doing so, GM has identified, for the first time, dealers which it plans to cut. Read the full pleading here in PDF form for a complete breakdown (starting on page 32) of the dealers on the chopping block.

To many peoples’ surprise, SAAB was amongst the brands that made the cut when federal bankruptcy judge Robert Gerber cleaved GM in two. Saab was owned by GM Canada. It’s now part of New GM—which is busy negotiating with The Koenigsegg Group to offload the Swedish automaker. Very little has come out of the recent negotiations re: the sale and/or the European Investment Bank (EIB) loan that Saab, GM and Koeningsegg view as a prerequisite for the deal to go down. Meanwhile, last week, SAAB CEO Jan Åke Jonsson declared “we need a cash infusion so we can boost production.” Förlåt?

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GM is so screwed. We are so screwed. On the occasion of Old GM’s judicial death sentence, Steve Rattner offered an instant analysis of what New GM needs to do to survive: eliminate the perception gap. “There’s often a lag between perception and reality,” the head of the Presidential Task Force on Automobiles (PTFOA) told jobbing journos. Automotive News [sub] puts it this way: “General Motors must convince consumers that the quality of its vehicles has improved to stop a decline in U.S. market share and survive after bankruptcy, a senior Obama administration official said. Steve Rattner, the head of the Treasury Department’s auto task force, said the quality of GM vehicles has improved, citing the Chevrolet Malibu as an example. But he added that consumers have to be made aware.”

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Since Pontiac won’t be part of “new” GM, the brand becomes another distressed asset that will be sold off by the bankruptcy court just like the closed plants. Perhaps New GM can convince the bankruptcy court that selling off the Pontiac brand is not in the restructured company’s best interest since it would end up competing with them, but the same can be said of their other assets like factories and machinery that competitors may buy. Someone will buy the Pontiac brand and associated IP for nearly bupkis. Hell, the licensing rights for diecast GTOs and Firebirds have value. Maybe Maisto or Mattel will buy the Pontiac brand.

But will it be accepted? As reported yesterday, China’s BAIC has handed in a better offer for Opel. This gave everybody a reason to pause. Magna called off a board meeting that had been scheduled to give the go-ahead for Opel. GM and the German government are reading intently what BAIC proposes. BAIC proposes export of Opels to China. For a while, at least.
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You may not be familiar with H.R. 2743. The Automobile Dealer Economic Rights Restoration Act of 2009 tells New Chrysler and New GM that they “may not deprive an automobile dealer of its economic rights and shall honor those rights as they existed, for Chrysler LLC dealers, prior to the commencement of the bankruptcy case by Chrysler LLC on April 30, 2009, and for General Motors Corp. dealers, prior to the commencement of the bankruptcy case by General Motors Corp. on June 1, 2009, including the dealer’s rights to recourse under State law.” In other words, it would reverse New ChryCo’s and New GM’s dealer cutbacks—or at least force Uncle Sam to spend taxpayer billions to dump them. The bill is doomed. But that’s not stopping GM from asking its post-cull dealers to show their fealty and help twist the knife into their former colleagues. Text of the “loyalty oath” after the jump. [thanks to you-know-who-you-are]

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