The Detroit Free Press rightly points out that ChryCo execs are headed straight for the AIG bonus backlash.

Rep. John Dingell warned Chrysler Wednesday against paying more than $20 million in retention bonuses, and called for a 95% tax on all bonuses paid by companies receiving any money through the Troubled Asset Relief Program…

“While I recognize these are different from the AIG bonuses, it is still dumb for them to pay out these bonuses at this time,” said Dingell, a Dearborn Democrat. “Chrysler should think long and hard about the optics of executive bonuses, especially at a time when UAW workers and retirees are making remarkable concessions.”

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Looks like fifty cars per day is all that is needed from the Trollhätten plant to satisfy world demand. Yes, you heard that right: fifty cars per day, two days per week. With Saab apparently refocusing their production target to 12,000-13,000 cars for 2009, they’re cutting back their already slow schedule of three production days per week to two in some sort of effort to say “hey, we’re not dead yet.” Meanwhile the separate (desperate) search for a buyer for the company continues with Deutsche Bank handling the deal. They’d better act fast: Teknikens Värld says Saab’s piggy bank will be totally empty this summer. So if you’re one of those fifty people that want this Swedish meatball, act fast before they are all försvunnen.

After Germany’s cash-for-clunkers sales surge, it was only a matter of time, and not much of it, before the US followed suit. The idea failed to make into the federal stimulus package (which is like calling an all-you-can-eat buffet a Weight Watchers’ Special). And so, a bill is born. CNNMoney says aloha, clunker-mania.

The bill, introduced Tuesday by Rep. Betty Sutton, D-Ohio, would provide on- the-spot vouchers between $3,000 to $7,500 to consumers who trade in older vehicles for new, more fuel-efficient cars and trucks. The size of the vouchers would vary, depending on the fuel economy of the car being purchased.

The older vehicles, required to have been built at least eight years ago, would be scrapped and their parts recycled, while the new vehicles would have to meet a certain fuel economy standard – 27 mpg on highways for cars, 24 mpg for light trucks, Sutton said. Consumers could also opt to receive a $3,000 voucher toward mass-transit fares.

Sounds great! How could that possibly go wrong? You know . . . other than all the unintended consequences?

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GMAC is facing mounting criticism (lawsuits to follow) for suckling on Uncle Sam’s teat for $6B, then turning around and cutting car dealers off at the knees. And so, on the same day TTAC takes GMAC to task for doing the dirty on dealers, on the same day ChryCo CEO Bob “The Prowler” Nardelli is out and about, sniffing around the federal trough for even more bailout bucks for Chrysler’s former captive lender, GMAC has issued a press release defending its “death to dealers” policy. I mean, newfound financial probity. Color me unconvinced. As one of our Best and Brightest pointed out, where there’s smoke, there’s mirrors. (Grammarian mulligan evoked.)

Wholesale Financing

* GMAC is currently doing everything it can to provide broad-based funding support to auto dealerships during these very difficult times. For example, despite the tight credit markets, GMAC continues to provide wholesale financing for about 75 percent of GM auto dealers – a level consistent with the past five years.
* Dealers are not required to finance their wholesale inventory with GMAC; they are free to choose any lender. However, we recognize that many banks and financial institutions have ceased to offer auto wholesale financing given the strained credit markets and uncertainty in the industry. GMAC is working to preserve such funding for its existing wholesale dealer accounts.
* GMAC currently extends over $20 Billion in wholesale financing to U.S. dealers.

Dealership Default

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Good news, everyone! A finance company whose risky investments in auto and real estate loans required it to beg for $6B in bailout cash is at the ready to teach you the secrets of smart financial planning. According to a release at PR Newswire, GMAC “has bolstered its effort to provide consumers with personal finance education with a $20,000 grant to InCharge® Education Foundation, Inc. (ICEF). The funding will be used to co-sponsor a series of financial literacy courses throughout the country in 2009. The courses, named ‘Smart Edge by GMAC,’ are designed to help people make better financial decisions by providing them with information about budgeting, real estate and automotive finance, insurance, credit reports, credit scoring, and other tools.” Lesson number one? Pay your CEO $11.6M even if you’ve been bleeding red ink all year. Lesson number two? Savagely screw over the people your business relies on.

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Credit reporting agency TransUnion has released its analysis of the US’ auto loan situation and finds that, unsurprisingly, things have deteriorated. “The national 60-day auto delinquency rate (the ratio of auto loan borrowers 60 or more days past due) edged upward between the third and fourth quarter of 2008 from 0.80 percent to 0.86 percent. Year-over-year the delinquency rate increased 8.86 percent in the fourth quarter.” That works out to about one out of 116 auto loans being delinquent. “Delinquencies were highest in Mississippi, at 1.62 percent, followed by California, at 1.46 percent, and Louisiana, at 1.37 percent. The states with the lowest auto loan delinquency rates were Alaska, at 0.19 percent, North Dakota, at 0.34 percent and Wyoming, at 0.41 percent.” Oddly enough, these delinquency rates by state only roughly track unemployment rates.

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Regular readers of this site know that I’m math challenged. To paraphrase Blanche Dubois (tragic heroine, not TV psychic), I have always depended on the calculations of strangers. Which is one reason I NEVER sign ANYTHING at a dealership without having my good friend Steven Lang give it the once over. Of course, that’s looking at the car sales paperwork from the customer side. Pity the poor Chevrolet dealer. Given the farrago of sales incentives, discounts, cash-back deals, financing offers, etc. how do they set a price? Seriously. Even a dealer who wants to give his customer the best possible deal has the devil’s own time establishing what that actually means. Check out this Top Secret(ish) Powerpointery and tell me that Roger Smith’s no-haggle Saturnalia wasn’t the way forward. Oh well, too late now. And, as we reported last night, there’s more post-bailout deals a brewin’. Good luck with that. [Thanks to you know who you are.]

DW reports that German Economics Minister Karl-Theodor zu Guttenberg is in the US talking about how best to disentangle/jettison the Opel brand from its “struggling parent company.”

One of the main issues Guttenberg will address is the ownership of patents and other intellectual property Opel requires to continue producing cars. He will also explore GM and the US government’s willingness to let go of Opel.

Chancellor Angela Merkel told public broadcaster Deutschlandfunk that Guttenberg needed to “clarify how General Motors would be able to back away in order to give Opel more room to move.”

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TTAC commentator Jeevesw reminds us that The Blue Oval Boys also got the Blogging Stocks reality check, and it looks like another case of chew and screw. GM is number 7 on their list of Portfolio Killers. Ford comes in at number eight.

Despite its recent successes at negotiating new contracts and its refusal, so far, to accept government funds, when General Motors (NYSE: GM) goes into Chapter 11, Ford (NYSE:F) will have to do the same to remain competitive.

Given the ferocity of this downturn, if it didn’t accept government handouts, it would probably end up in some form of forced re-organization anyway.

Real shareholder value: zero

Blogging Stocks pulls no punches. The site leaves GM with a black eye, calling the company a “portfolio killer.”

This is a ridiculous company with an even more ridiculous management group. General Motors'(NYSE: GM) cars are mediocre, its union contracts are incredibly extravagant in a brutally competitive industry, and management seems to think we are still in the 1950s.

Recently, the company’s auditors raised even more concerns about the automaker’s ability to survive without more loans from the government.

GM’s own forecast assumes survival based on a car market that is larger in 2013 than it was in 2006. Yeah, right.

True shareholder value: zero

Ford Motor Co.’s compensation committee has granted CEO Alan Mulally the option to buy five million shares. Of Ford. “It’s part of our long-term incentive plan to tie compensation to the performance of the company and the performance of the shares for investors,” Ford spokesman Mark Truby told Reuters. Or wrote in a press release. Or something. Big Al’s “strike price”: $1.96. The Blue Oval’s current share price at close of play Friday (as seen on TTAC stock tracker): $2.19. “Mulally may exercise one-third of the options a year from now, two-thirds after two years and all of them by March 2012. The options expire in March 2019.” And become worthless the moment Ford files for bankruptcy. So don’t expect Alan to see C11 as a viable option—even if GM and Chrysler go through that door first. Meanwhile, Big Al scored 136,005 shares of restricted stock and took a 30 percent haircut for 2008 and 2009. Reuters forgot to mention the bottom line on that: $1.4M p.a.. But don’t worry. In ’07, Mulally’s total take home—and we’re just talking about salary for one year—was a cool $21,670,674.

GM intends on increasing vehicle production in the second financial quarter, from 380k to 550k. I know: it’s a major WTF moment. There is no evidence whatsoever that the U.S. new car market is headed for recovery. If anything, the opposite is true, what with home foreclosures and unemployment rising like steam from a New York City manhole. Not to mention the headline of The Detroit News story wherein this information resides: “GM Dealers Balk at Ordering New Vehicles.” The article reports that GM’s orphaned HUMMER, Saturn and Saab dealers aren’t ordering any more vehicles (duh), and current inventory levels at the other stores are, to use the old Bentley power output description, “adequate.” No wonder GM spokesman Chris Lee said “that [production] number could be adjusted.” Still, you’d kind of hope GM PR could do better than that, what with more than a decade of spinning bad news into gold (for the executives anyway). And so they do . . .

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TTAC reader John writes:

I was perusing MSNBC a short while ago, and noticed something that I thought TTAC might like to post. Ford now has a market cap four times that of GM’s. (Ford’s is 4.9 billion, GM’s is down to just over 1 billion). Ford’s stock is also now worth more than GM’s, which isn’t surprising, but hasn’t really happened before.

As Ken Elias pointed out a while back, the beginning of the end will come when GM is de-listed from the Dow and then the stock exchange. As far as life-sustaining bailouts are concerned, March 31st is the drop-dead date. A pre-pack would take longer, so . . . I bet Ken a steak dinner GM will get their/your/our money. I don’t think I’ll be picking up the tab. For the dinner.

Senator Corker must be so proud of himself. He held Ford’s feet to the fire . . . oh, no, wait, Ford didn’t bother with that meeting. Anyway, today Ford is crowing [via AP] that its revised UAW contract gets close enough to wage parity with the transplants to call it a done deal. Which is kind of strange, because Ford’s accounting puts the all-in costs under the newest deal at $55/hour compared to the $48-$49 number people toss around for the transplants. Hmmm, maybe I’ll try that kind of “close enough” math when I pay my bills. Ford’s spin-meisters could have pointed out that nobody outside the transplants really knows what they are paying, but they didn’t. Absent a published union contract, all we can do is guess.

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Automotive News [AN, sub] is reporting that Der Spiegel is reporting that German automakers BMW and Daimler are planning on exchanging seven percent of each other’s shares. Daimler’s motivations seem clear enough; it’s been looking for a way to end its status as takeover bait for over a decade. (If you remember, the possibility of a hostile takeover had a little something to do with the ill-fated formation of DaimlerChrysler.) BMW’s motivation: cost-savings though component sharing with their [former?] Stuttgart rival. Yes, well… so much for BMW’s publicly-touted status as the last major independent automaker. Der Spiegel says the automaker’s majority owners– the publicity shy Quandt family– are not happy with the Daimler stock swap. I guess 46 percent ownership doesn’t buy what it used to.