Not to be outdone by GM CEO Rick Wagoner's $2.2m salary re-raise, 165,563 shares, 500k stock options and 75k restricted stock units; FoMoCo has just paid CEO Alan Mulally $4m in Blue Oval stock and $3.56m worth of stock options. (That is, of course, on top of Mulally's $2m base salary and the $35m in compensation Ford's paid their CEO for his first 14 months of service). As Automotive News [sub] reports, the former Boeing executive's new compensation package comes hot on the heels of his employer's $2.7b '07 loss. More to the point (if not for shareholders), the gravy train rumbling through Dearborn could anger Ford's union workforce looking at buyouts, buydowns and piss-offs. Or not. Coincidentally enough, Mulally's bonanza comes just two days after Big Al announced a $1k bonus for all Ford's United Auto Workers (UAW) members. And the fact that the announcement is hitting the wires on the weekend? More uninvited serendipity, surely. Bottom line: the bottom line has no relation to Motown executive pay. 

We've heard this somewhere before… but it wasn't Chrysler… Oh, right! Nearly two years ago, Renault-Nissan CEPO Carlos Ghosn was making noise about joining/purchasing/dismantling General Motors (at the behest of the Lion of Las Vegas, investor Kirk Kerkorian). GM CEO Rick Wagoner Wagoner circled his Board of Bystanders' wagons and GM was free to tank on its own. As the Motor Authority reports, it's the same story here kids. Anyway, Renault is hoping to make out like a bandit with its 25 percent ownership of longstanding Russian punchline automaker Lada. As Carlos puts it. "Russian car sales may surpass Germany to become Europe's largest single market this year." Also, they may not. Either way, Renault may start supplying Lada with platforms and drivetrains. Presumably it'll be the same entry level stuff Renault-Nissan is giving Chrysler to sell in South America. Wait, what? Anyone else confused?

Last July, Delphi agreed to pay GM $2.7b when it emerged from bankruptcy to resolve "long-standing issues." In November, GM said it would settle for $750m in cash and $1.2b in stock AND it would loan Delphi $750m towards the $6.1b needed to exit bankruptcy. And now… GM's agreed to loan their former division another $2.8b. The Detroit News says the new agreement still transfers Delphi stock to GM (now worth $200m less). And Delphi's cash payment to GM shrinks to $175m. Yes, well, five of the six non-GM investors bankrolling Delphi say they'll walk, unhappy with GM's part of the deal. The lead investor, Appaloosa Management, claims the loans are "contrary to Delphi's stated goal of reducing its reliance on and exposure to GM and developing relationships with other (automakers)." And here's the kicker: Delphi has asked the bankruptcy court to force Appaloosa and its partners to continue supporting the restructuring plan. (How to win friends…) Meanwhile, Delphi is still wrangling over providing collateral for some $2b in unpaid pension obligations. They've only put up $150m so far; the Pension Benefit Guaranty Corp. has filed $600m in liens against Delphi's foreign assets. Legally, the PBGC could seize Delphi's foreign ops to satisfy those obligations. Practically, all Hell would break loose. 

In inflation-adjusted terms, oil is at its historic peak. The 1980's price of $39.50 a barrel translates to $103.76 in today's money. Many analysts attribute these high oil prices to speculation and increasing demand. And yet the Organization of Petroleum Exporting Countries  (OPEC) have long fine-tuned their production output to micromanage world markets. So says the International Herald Tribune. The Trib reports that OPEC may forego their usual springtime production cut to spare the reeling US economy even higher oil prices. Deutsche Bank's chief energy economist says it's one of those PR-type deals. "They don't want to be blamed for a recession," claims Adam Sieminski. "That would be bad public relations." U.S. Energy Secretary Samuel Bodman is down with that. "It is important that the members of OPEC for their own sake carefully look at supply and demand." OPEC's choice, however, is between cutting production and maintaining the current output. For whatever geo-political/economic reason, increasing production seems to be off the table. Once again, it may be time for someone in Washington to pick-up the bat phone and call our good friends at the Saudi embassy… 

UPDATE: Reuters reports that OPEC has decided to keep oil output steady. That said, Saudi Arabian Oil Minister Ali al-Naimi claims they’ve been pumping 9.2m barrels per day (bpd), already roughly 300k bpd above their OPEC target.

According to the Financial Times' "Who's who" roundup, relations between the two halves of Porsche's ruling family are chilly– despite joint ownership of what will be the largest automaker in Europe. Apparently, Ferdinand Piech, chairman of Volkswagen, and Wolfgang Porsche, chairman of Porsche, had a bit of a spat at a recent Porsche board meeting. The two ordered everyone out of the room while they hashed out their unspecified difference. When they emerged, Wolfgang was "the surprising winner." According to an unnamed source close to both men (presumably not in a sexual way), the two grandsons of the legendary Ferdinand Porsche "are not scratching out each other's eyes but it is no secret that the Porsches and Piëchs were never really a loving couple." (Then again…) "Who's who" implies that Wolfgang Porsche's power is on the wane. And yet… his close relationship with Porsche CEO Wendelin Wiedeking (is it me?) is said to give him an upper hand in the new power politics at Porsche Automobil Holdings, VW's new master. Supposedly. Anyway, it's good to see the "collegial partnership" is off to such a good start…

Deutsche Welle reports that Porsche is officially the Maus that Roared. Porsche Automobil Holdings will shell-out $15b for the final 20 percent of Volkswagen shares. Subject to regulatory approval, Porsche will gain controlling interest in Europe's largest automaker. Porsche CEO Wendelin Wiedeking called the deal "a new and collegial partnership"– immediately evoking unpleasant memories of Daimler’s "merger of equals" with Chrysler. Anyway, there’s a lot of work to be done: VW’s non-existent market positioning, overlapping brands, U.S. product quality, etc. Still, if there's even a remote chance that Porsche’s takeover– sorry, “assistance” will lead to stateside VW's becoming even a little more Porsche-like, the deal has our unqualified blessing. We’re not holding our breath.

No question: The Big 2.8's supply chain is in disarray. Plastech, Delphi, American Axle– these are just three of the U.S. parts suppliers already in bankruptcy, with fully 25 percent of other major domestic parts makers teetering on the edge of Chapter 11. The domestics are operating on the assumption that the faster they outsource their parts production overseas, the better. Speaking to Automotive News [sub] analyst John Casesa warns that Chrysler's new purchasing czar John Campi's rush to confront domestic suppliers (Plastech) and seek low cost foreign replacements may not be such a good idea– especially when seen in historical context. "In the early 1990s, former GM purchasing chief J. Ignacio Lopez proved that point. When he bid out proprietary part designs to garner the lowest prices, Lopez launched a brutal price war that created lasting animosity between GM and its suppliers. The industry is still struggling to heal the wounds." And speaking of war, does it really make sense for the domestics to combine Just in Time production and long, long supply lines in this time of crisis? As Toyota's quickly resolved Tundra problems show, it's best to keep your friends close and your suppliers closer. 

German newsweekly Der Spiegel is known for its exemplary investigative journalism, but doesn't have a rep for incisive economic analysis. With this caveat, we find it notable that its English-language online edition says today's sky-high oil prices are not based on "real" factors like supply and demand. Apparently, speculators are behind the recent price spike; the "bubble" will pop just like the "new economy," Internet and housing bubbles. Fadel Gheit of Oppenheimer & Co. says oil is presently the victim of "excessive speculation." Trading on the New York Mercantile Exchange (NYMEX) would seem to support his contention,. World consumption totals around 86m barrels a day, yet trading volume based on price speculation is 15 times that amount. So when will it end? Gheit doesn't know but he's confident it will. "This is a bubble, and it will burst."

After yesterday's post on Bill Ford's compensation package, I had a little chinwag with FoMoCo PR Supremo Oscar Suris. Suris explained that his boss– the automaker's Executive Chairman and former CEO– has, indeed, "modified" his May 2005 pledge. (Billy swore on a stack of dry cleaning bills that he wouldn't take a plug nickel from his family namesake until the company was profitable for a full financial year.) The new deal is this: from 2008, Ford will "postpone" Billy's annual compensation until Ford is profitable. In other words, if and when Ford gets back in black, cha-CHING! All the money from '08 forward comes due. How much? Suris wouldn't say. "The Committee felt this was a fair and reasonable way for Bill Ford to stay true to his pledge on some level." Yes, well, keep in mind that Ford is no longer making dividend payments; the Ford family's auto-related cash flow has stopped. As to what Bill Ford has done to aid the "company's progress in restructuring its troubled North American operations," he hired Alan Mullaly. What do you want, blood?

Here's the official statement, contradicting part of our story on Chrysler's post-Daimler accounts: "Several media outlets have erroneously reported a loss of approximately $2.7 billion by Chrysler between August 4 and September 30, 2007. In fact, from an operating earnings standpoint, Chrysler was profitable during this time period. Also, Chrysler lost significantly less than what was reported during the course of the full-year. We believe any differences are attributable due to U.S. Generally Accepted Accounting Principles (US GAAP) versus International Financial Reporting Standards (IFRS) accounting rules. These differences include pension accounting for the UAW settlement and restructuring and purchases accounting." So, can we have a look at those books then, Mr. Private Equity Firms Don't Need to File Public Accounts? Thought not. 

Predictions that the price of gas will soar to four dollars a gallon have been circulating for days. According to the CBS News White House correspondent Peter Maer’s blog , the President isn’t in the loop. “Responding to this reporter's questions at a White House news conference today, Mr. Bush said he had not heard about analysts' predictions of the potential for $4-a-gallon gas later this spring when refiners re-formulate fuel blends for summer driving.” In fact… “CBS News radio affiliate KCBS in San Francisco reports regular is selling for $4.23 at a San Mateo, Calif., service station where premium goes for $4.43.” Considering that Bush is a former oil man who once owned Arbusto Energy, served as CEO of Spectrum 7 Energy, consulted for Harken Energy and receives briefings from, well, whoever he likes, you’d think he’d stay on top of this one. If so, you thought wrong.

In an interview with the International Herald Tribune, Renault-Nissan honcho Carlos Ghosn reveals that he's still interested in an American partner for his Franco-Japanese alliance. Between endless paeans to Nissans miracle turnaround and the underlying strength of diversity in the Renault-Nissan alliance, Ghosn holds off on the PR long enough to let a few nuggets slip through about his mergers and acquisitions strategy. Although talks between Renault-Nissan and GM led nowhere in '06, a recent joint venture with Chrysler to sell rebranded Nissan vehicles in Brazil may point to Ghosn's dancing partner of choice. And with talk of Chrysler's dismemberment never far from the lips of Cerberus-watchers, Renault-Nissan could come into an American nameplate sooner rather than later. Whomever his eventual bedmate may be, if Carlos the Jackal can be trusted at all, the stars will begin aligning before any announcements come through. "This is for the long term," Ghosn tells the IHT about his visions of an American partnership. "But when it comes, then you will know we have been consistent." Is he referring to the Chrysler/Brazil deal, or is there much more to come? Time, and not much of it, will tell…

This one's a bit screwy. According to Reuters, Ford's compensation committee wants to pay Billy Ford– even though the former CEO and current Board Chairman pledged not to draw a penny in salary until FoMoCo had returned to profitability (currently scheduled for 2009). In a note filed with the SEC, Ford (the company) said it's decided to change the terms of of Bill Ford's 2005 compensation arrangement "in light of the company's progress in restructuring its troubled North American operations." The committee insisted that it was "not reasonable" to expect Bill Ford to continue to work for free "particularly after he has received no compensation for three years." Ford spokesman Oscar Suris said Bill Ford had turned his back on compensation worth roughly $25m to $33m. OK, now, The Detroit Free Press reports that Billy has reaffirmed his promise not to bank the bucks until Ford's in the black. TTAC is investigating.

So now we know why former Chrysler CEO Tom LaSorda was willing to punt BOTH of his turnaround plans, step aside for new CEO Bob Nardelli and share a co-presidency with ex-Toyota Prez Jim Press. According to The Wall Street Journal, Daimler's European accounts reveal that the Germans made the above payment (€10.4m) to Mr. LaSorda as a bonus for LaSorda's help liberating them from majority ownership of the American automaker. Yes, folks, that's on top of LaSorda's $3,223,116 (€2.13m) annual (which is to say ongoing) compensation package. Not to mention LaSorda's pension. Or health care. Or perks. And just in case you thought LaSorda's bonus and salary were performance related in the traditional sense of the term, Daimler's papers also show that Chrysler lost €1.94b ($2.9b) in an eight-week period last year. That's $51,785,714.29 a day. Hands-up anyone who thinks LaSorda gives a shit. [thanks to John for the link]

You know things are pretty bad for GM when Bloomberg starts sounding like TTAC. Doron Levin's column "GM Turnaround Collides With Dismal U.S. Car Demand" begins by turning around GM's "poor poor pitiful me" PR spin, which would have us believe they're unlucky rather than stupid. "Don't be fooled. That interpretation of GM's latest woes ignores years and years of dallying and denial. The No. 1 U.S. automaker delayed drastic action, hoping that growing automotive revenue might be enough to outstrip ballooning costs. GM has known at least since the early 1990s that its business model in the U.S. was defunct." Levin dismisses the foreign profits as life preserver argument, tosses aside GM's new products and predicts a cash crunch. And here's the twist: Sovereign Wealth Funds to the rescue! "The lenders include the governments of Kuwait, Singapore and Saudi billionaire Prince Alwaleed bin Talal. Perhaps sovereign funds willing to take a flyer on the second biggest U.S. bank [Citigroup Inc.] might be inclined to invest in its biggest automaker." Where did they get that $8.9b for the union health care VEBA from anyway? Meanwhile, Levin says "Without a financial cushion, GM no longer has the luxury of putting off until tomorrow what it should have done yesterday." We say: it's too late.