Surprised? Neither are we. From the moment Chrysler execs mooted a Nissan hook-up—a moment born of Congress-appeasing desperation—we heard rumblings that it wasn’t gonna happen dot autoextremist. Our sources in The Volunteer State volunteered the information that nothing was happening, Nissan-wise. Again, no surprise. If the Nissan will build us a competitive car (’cause we don’t have a fucking clue, mate) and we’ll sell ’em Rams to rebadge as Titans deal was going down, Chrysler wouldn’t have floated il madre of trial balloons known as the great FIAT giveaway. Still, as any good Catholic automaker knows, confirmation is a big moment in a bogus story’s life. Although they were happy to repeat the propaganda without question at the time, Reuters rocks!

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Fitch Ratings is the world’s bankruptcy alert agency. If you want to know whether someone (say a large company or small country) will be able to pay his/its bills, talk to Fitch. Currently, Fitch doesn’t think it a good idea to extend credit to anyone in the automotive industry. Fitch Ratings [sub] describes the global outlook for the automotive industry in 2009 as negative. “Weak GDP growth and the effects of the international financial crisis will continue to have a significant impact on the global auto industry, creating downwards pressure on carmakers’ credit profiles in the short to medium term,” says Emmanuel Bulle, Senior Director in Fitch’s Automotive team. “In addition, the length and severity of the current crisis are still unknown, whilst manufacturers’ responses to the crisis are still evolving.” Translation: Nobody knows how long this will be going on, and nobody knows what they are doing. Time for triage . . .
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TTAC has been working with our Best and Brightest to uncover the hidden investors behind Chrysler. We’ve made some headway. First, the name of Cerberus’ Chrysler funds: Cerberus CG Investor I LLC, Cerberus CG Investor II LLC, Cerberus CG Investor III LLC. The information came from Daimler [click here then search for “CG Investor”; it’s under structure of the transaction]. Searching for hits on the CG funds, we’ve unearthed Franklin Templeton Investments’ Mutual Recovery Fund. Here’s the money shot: the fund’s 2008 Annual Report. Scroll down to page 5 (their numbering), second footnote. And there it is. And now we can drill down to some interesting info…

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Not buyers of Dodge Vipers per se. Some 127 of them found their way to a Dodge dealer in January, a 74 percent gain from last year’s total. Of course, that may have a little something to do with the fact that A) Dodge dealers are dealing as if their life depends on it (which it does) and B) the chances of buying a new Viper are decreasing by the minute. Especially since Chrysler revealed that it wants to sell the model as a brand to . . . someone. Oh how we laughed! Well, not Autoblog obviously, despite having reported that American tuner Saleen was a suitor (after having reported that Saleen’s busy going belly-up). I mention this not because I’ve been dying to put the boot in to Autoblog ever since my reader-inspired vow of fraternity, but because it raises the obvious question. Is Chrysler lying when it told the MSM that it has three companies interested in buying its Viper tooling and trademarks? (Setting aside the question of whether or not Cerberus has already mortgaged these “assets.”) Here’s AB’s take:

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The Detroit Free Press reports that Senator Barbara Mikulski (D-MD) has added some car dealer-friendly provisions to the proposed $43g (gazillion) economic stimulus package.

Mikulski’s proposal would grant a tax credit for vehicles bought between Nov. 12 of last year and Dec. 31 of this year. The tax break would only go to families making less than $250,000 a year, and would only apply to interest on loans up to $49,500.

“Everyone wants to save auto manufacturers, but no matter how much government aid we give to the Big Three auto makers, they can’t survive if consumers don’t start buying cars,” Mikulski said.

True dat. HOWEVER, this is like putting a band aid on an arterial wound. Until the U.S. housing market recovers, car sales will not come back. And maybe not even then, for a while anyway. How Congress/the feds do that remains to be seen. Later.

Think about it. That’s AFTER the U.S. Treasury Department “invested” $6b of your hard-earned tax dollars into the failing auto and mortgage finance company. “Auto sales are in freefall,” Fifth Third Asset’s Mirko Mikelic told Bloomberg. The Michigan money manager (whose company holds a big chunk of GMAC debt) says the bailout “may keep them around at least until they need to restructure.” Confused. May . . . at least . . . until? Bottom line: GMAC’s Q4 new vehicle financing fell from last year’s $13.4b to ’08’s $2.7b. Despite Uncle Sam’s cash infusion and fire sale pricing and lowered FICO score loan eligibility, what’s the bet that the needle doesn’t budge on that number? Meanwhile, Rescap, GMAC’s mortgage unit, famous for its easy credit home loans, is also dying a death. On this subject, Mr. Mikelic leaves the sugar coating on the shelf. “Their mortgage business is basically closed.” With house sales going nowhere slowly, GMAC has a new strategy, related to their free pass bank status.

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The Freep reports on the analysis of JP Morgan’s Eric Selle and Atiba Edwards, who argue that GM bondholders could emerge from negotiations with a 20 percent stake in the world’s second-largest automaker. GM must outline a strategy to eliminate two-thirds of its $35b in unsecured debt by February 17. “We expect a bond exchange will settle around 35% of par with an equity component representing 20% of GM’s equity,” write Selle and Edwards. But the JP Morgan analysts warn that the “threat of bankruptcy will have to return in order for GM to achieve the required restructuring goals.” What, again?

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I reckon it’s a little early to name the worst stock of ’09—given how many choices are bound to surface as the U.S. economy tanks. But, well, there it is: The Motley Fool names Ford (F) the worst stock you can buy. “The trouble with Ford’s stock is that it may be very tempting to some investors who look at the $1.94 price tag and think that it’s a nice, cheap price for a great American car maker. The trap door with Ford is the company’s debt—all $157 billion of it. Looking at Ford on the basis of its total enterprise value (equity value plus net debt), the company is still valued near or above the better-positioned automakers… The dealio at Ford comes down to the fact that debt holders are really the ones who own the company at this point. At the end of the third quarter, the company had a shareholder deficit of nearly $2 billion, which basically means that there are more non-equity claims against assets than there are assets. That’s bad news for shareholders because debt holders have rights and protections that will let them flick away equity holders like a paper football, if push comes to shove.” As our Ken Elias pointed out this morning, as MarketWatch points out tonight, the shove is here.

I find the whole “TTAC is pro-Toyota” meme a little strange. Have a look at our coverage of their greenwashing or our reviews of their automobiles (including our excoriation of various Scion). Yes, The Big 2.8 get ten times the coverage afforded the transplants. But we’re an American-based website, and the Motown meltdown is the biggest story in the history of American automaking. Yes, our Bertel Schmitt recently wrote a compare and contrast blog, pointing out the differences between Toyota’s response to the auto industry meltdown with GM’s. But it’s the truth dammit, and that’s the business we’re in. Feel free to discuss TTAC’s “perception gap” below. Meanwhile, I want to point out that Autoblog’s recent “discovery” [via their BFF at AutoLine] that Toyota has “only” $18.5b worth of cash, supposedly placing them in the same boat as, say, GM, is wildly disingenuous.

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Chicken and egg this. If Chrysler doesn’t score an additional $3b worth of bailout bucks, Fiat can/will walk away from their agreement to “buy” 35 percent of the ailing American automaker. The Wall Street Journal quotes “people familiar with the pact” to substantiate the proviso. Equally anonymous sources told the Journal (we hope) that if the loans go through, Fiat will take three seats on Chrysler’s Board of Directors. And then, “If Fiat meets goals for improving Chrysler’s operations within 12 months of the agreement, Fiat would have the option of buying an additional 20% of Chrysler for about $25 million, said people familiar with the matter. Details of the goals weren’t clear.” Twenty-five million? They’re joking right? Or is that the amount Cerberus would pay Fiat for 20 percent of Chrysler?

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So, this is how it’s gonna go, eh? Chrysler’s going to dress-up the cratered car company long enough to use federal funds to stay alive long enough to strip and flip the company’s assets. Sweet. For some. More specifically, if Fiat’s grabbing 35 percent of Chrysler, can we, the taxpayers, have our $4b back now please? Nope. “The alliance does not contemplate that Fiat would make a cash investment in Chrysler or commit to funding Chrysler in the future.” Jeez. Couldn’t they at least contemplate it? Anyway, a joint statement (don’t bogart that BS, my friend) explains the thinking “The alliance, to be a key element of Chrysler’s viability plan, would provide Chrysler with access to competitive, fuel-efficient vehicle platforms, powertrain, and components to be produced at Chrysler manufacturing sites. Fiat would also provide distribution capabilities in key growth markets, as well as substantial cost savings opportunities. In addition, Fiat would provide management services supporting Chrysler’s submission of a viability plan to the U.S. Treasury as required.” That last one’s kinda weird. What “management services” are required to write a viability plan? Emptying the waste baskets?

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Chrysler Cinquecento anyone? According to Reuters  [via Automotive News Europe], Fiat is in talks with Chrysler LLC to form a strategic partnership. Automotive News says the deal could give Chrysler access to platforms, engines and transmission. The august publication also suggests the dalliance could lead to Fiat taking an equity stake in Chrysler. FIAT has been on the prowl lately to find a partner. PSA apparently gave the Italians the cold shoulder. Fiat’s CEO Sergio Marchionne had made noises that his company cannot survive alone and is in urgent need of a strong partner. Eh, Sergio! You said “strong” partner! Cosa fai?

Automotive News [sub] reports that President elect Barak Obama is calling on automakers to develop sustainable business models. Aparently, it would be unacceptable “to keep them on their lifeline through taxpayer dollars in perpetuity.” Although Obama admits he’s not an industry “expert”, he claimed making the bailout work means everybody, “from labor to management to creditors to shareholders, giving something up.” Specifically, taxpayers will now be sacrificing $1.5b to Chrysler Financial. And yes, it’s coming from the second half of TARP, so it has the O-man’s blessing. And so… “Zero percent interest financing will be [immediately] available on 11 Chrysler LLC vehicles, and in many cases for up to 60 months. Vehicles included in the program are Chrysler Town & Country, 300 and 300C, Jeep Grand Cherokee, Commander, Wrangler, Dodge Grand Caravan, Charger, Magnum, Challenger, Ram Pickup and Ram Heavy Duty.” Oh wait, that’s our sacrifice too. And isn’t  this how we got in this mess in the first place?