The Financial Times (FT) reports that car manufacturers’ finance arms are eligible for huge French and German bank loans approved in the past two weeks. While this isn’t a bailout per se, it does give the manufacturers’ credit operations access to some €40b worth of cash to make loans to shoppers. The FT claims that as much as 15 percent of European car manufacturer profits come from the financing divisions. Car sales in the UK and Spain are taking an old world battering, and while the loans are unlikely to affect lending in the U.S. (i.e. Mercedes will not be using the money to make loans to American buyers); this will be a major component affecting European sales and manufacturer profitability. The most frustrating part? You just know they’re going to make the money available overnight, while we’re still sitting and waiting to see what, if anything, companies like GMAC can actually get from the $700B bailout passed weeks ago. Question: is that a good thing or a bad thing?

The New York Times reports that a casualty of lower oil and gas prices: interest in funding renewable energy projects. Among the Times’ laundry list of programs hurting for money: Tesla (duh), corn ethanol (hooray), other biofuels, and wind and solar power. The financial troubles are the consequence of a pretty simple financial concept – that there’s only so much money to go around. And we hear there’s a credit crunch in progress. So with gas and oil coming down in price, renewable energy isn’t where opportunistic investors want to be risking their somewhat-limited resources. The depressing part of the story is this all-too-obvious observation from Times writer Clifford Kraus:

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DaveAdmin over at Allpar Weblogs is just as unhappy with the coverage of the potential GM – Chrysler debacle merger as your faithful TTAC correspondents. But for different reasons. Apparently, it’s OK for the mainstream press and armchair analysts to suggest that this is a done deal, but they don’t “get it” when it comes to what might come next. In the main, DaveAdmin reckons they’re all guilty of the sin of omission. “No article I have seen suggests that maybe, because the Dodge trucks are clearly superior (especially in Class 3-5), that GM might shift over to Dodge’s designs. Only one mentioned the Dodge trucks in any way other than ‘to be canned’ at all, and that was to point out the bad timing of their launch. Ford’s big, trucklike Flex, Toyota’s Tundra (with one factory already being converted to other uses), and Ford’s upcoming F-series were apparently examples of good timing. No article I’ve seen mentions the Hemi except disparagingly, as in ‘dummies make V8s when people don’t want them any more.’ (Four years ago.) Never mind that trucks still need V8s and the Hemi is best in class, especially in variable cam form. No article I’ve seen mentions the Phoenix engines or the dual-clutch transmission technology. The latter, to be fair, appears to be dead at the moment, as Chrysler chose to cancel their launch by picking a fight with Getrag and abruptly canceling all talks.” Yeah, to be fair. It gets better…

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The Detroit News reports that Senator Carl Levin (D-MI) has stated that he believes the federal government should play shadchan for an ailing Chrysler.”If they need support to make some kind of merger between Chrysler and another auto company, we need to do that,” said Levin at a Detroit Economic Club debate. Levin is “heavily favored to win his sixth term over Hoogendyk, who has little money and low name recognition,” pundificates the DetNews. So was Senator Levin aware that the Chrysler-GM merger would likely mean the end of some 40k American jobs? According to The DetN reporter, “Levin said afterward that he worried that a potential merger could result in job losses, but said it would be preferable to seeing one of the Big 3 domestic automakers going out of business.” Meanwhile Levin’s “staunch conservative” opponent state Rep. Jack Hoogendyk has the temerity to suggest that “What government has done to the auto industry in this state is broken both legs and perhaps one of its arms and now that they’re lying in a ditch, offered them a glass of water.” His prescription? “Government should cut their corporate taxes — which do not apply to money-losing companies such as the domestic carmakers — and set “right-to-work” laws that would weaken unions.” In all likelyhood neither these measures nor Senator Levin’s production of The Bachelor: Detroit will save the 40k jobs that appear threatened by Chrysler’s dire straights. But if Levin gets his way, the Sultans of Sebring are going to need (and get) plenty of time in makeup before Chrysler’s ready for the proverbial hottub. Guess who gets that bill?

With GM’s resale values and stock price hovering at record lows, two Texas dealers have come up with one hell of a sales gimmick. Buy a GM vehicle at Frank Kent Motor Co. in Fort Worth, Texas by the end of the month and the owners will give you 50 shares in General Motors. The scheme is advertised as a celebration of GM’s 100th anniversary, but when asked by Automotive News [sub], Frank Kent Motors owners admit that the promotion was actually inspired by the depths to which GM stock had sunk. And while “50 shares of General Motors” sounds better than “$327” (based on GM’s $6.54/share price at the time of writing), the dealers see the stock as (get this) a hedge against depreciation. “Typically when a customer buys a car and they go to trade it in in two or three years, it has depreciated,” Frank Ken Motors owner Will Churchill said. “Hopefully in two or three years (the stock) will probably be worth more.” Or, as we are fond of saying around here, not. There are very few scenarios for GM’s next several years that involve good news for its stock holders, and quite a few that could see your “incentive” stock wiped out to zero. And then all you have is a massively depreciated Aveo (or whatever). And twice the buyers remorse.

I give up. There are so many top ten car lists, and they’re arriving at such a frentic pace, that I couldn’t even assemble a top ten top ten car list. Of course, TTAC’s “Ten Worst” awards– coming to a monitor near you soon– would make the grade. As would Wreckedexotics.com’s “10 Most Expensive Crashes Ever.” I love wreckedexotics (WE) in general, especially now that they’ve eliminated some of the most ridiculous pop-up ads since Lexus’ 3D RX RX. As the former owner of a fully restored XK150 that wiped out a small English village, and a Ferrari F355 that punted a Honda CBR1000 into the middle of a roundabout, I believe that any website that shows that there’s a downside to owning expensive cars should be encouraged and supported. And then, of course, there’s the whole schaudenfrade thing. (You know, class warfare for pistonheads.) Anyway, while I think the title of this hit parade is slightly misleading– it’s more accurately described as the “10 Most Expensive Cars That Have Crashed”– please click over to wreckedexotics for ALL the pics and the proprietor’s comments. Meanwhile, here’s my take.

There’s a reason the headline above attributes this “story” to The Detroit Free Press. Let me put it this way: “people familiar with the situation,” “one of these people added,” “other observers,” “one person told the Free Press,” “a person briefed on the talks,” “several analysts have speculated,” and “a person briefed on the strategy.” Seven references to unnamed sources? That’s gotta be some kind of record– and not for reputable journalism. OK, be that as it may, The Freep is asking us to believe that there’s method to this banker-lead executive hysteria. “If a merger is consummated, Chrysler’s brands would become just like Chevrolet, Pontiac and Buick, people familiar with the situation tell the Free Press.” And that’s a good thing? “Conflicting brands could be dealt with in a few years after this industry turmoil has passed, one of these people added.” Later. Got it. “Another concern raised by analysts and other observers regards the addition of 3,500 Chrysler dealers into GM’s already over-dealered network. One person told the Free Press that those ‘excess dealers’ would cost GM nothing in the short-term and that some — if not many — will fail on their own anyway.” Later. Got it. Of course, Ace scribe Tim Higgins has more conjecture information on GM’s thinking…

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Fresh off his recent membership in TTAC’s Cassandra club, Daniel Howes of the Detroit News has gone back to spinning bad news into industry gameplans. His latest column extolls the virtues of a GM-Chrysler merger, while admitting that such a move would be disasterous for everyone except GM and Chrysler. “Seen from the viewpoint of blue-collar labor, white-collar employees, local governments, dealers, the state of Michigan and the industrial Midwest, just about anyone whose livelihood depends on the dubious survival of Chrysler would pay a dear price,” writes Howes of a possible GM absorption of Chrysler. But, from the narrow perspective of an industry suit, these myriad viewpoints are just so much firewood to be burnt at the altar of survival. And Howes is conveniently on hand to stack it up and pass the matches.

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TTAC’s Ken Elias reckons the next step for GMAC is C11. Meanwhile, Automotive News [AN, sub] reports that GM is set to launch its “Finance that Fits” ad campaign, hoping to shovel new loan-seeking customers to, well, anyone, really. “GMAC is still a very important partner,” declaimed Jim Bunnell, executive director of GM’s channel support group, told AN. “Over time, a large chunk of the business went to GMAC. But if you look at the last 60 days — in August and September — well over 80 percent of all the business went to outside banks and credit unions.” Hang on; it’s not as bad as it sounds. “Bunnell said GMAC’s share of GM dealer finance business was typically about 20 percent or slightly higher at that time of year. He could not provide a comparable figure for August and September of 2007.” So, uh, maybe it is. One thing’s for sure: touting easy money in the middle of an economic meltdown is bad juju. Which is why GM’s hedging its bets: “The multimedia campaign promotes GM’s cash-back deals up to $6,000 on every 2008 vehicle left in stock.” Anyway, the U.S. new car market is dead in the water. J.D. Power reckons annual sales will drop below 12m units, as predicted here, which is two million less units than GM had predicted at the start of the crisis.

Back when we learned that Ford might be selling its share of Mazda, we didn’t mention that Mazda was scrapping plans to build a second factory in the US. Good thing too. Automotive News [sub] cites a Nikkei report which claims Mazda had considered using a shut-down Ford plant or building a new one with Ford, aiming to produce fuel-efficient mid-size cars and other models from the first half of 2010. The report blames the deepening downturn in the world’s largest vehicle market for Mazda’s decision to scrap the project. No doubt hoping to keep the appearance of an even keel, Mazda reps now tell Business Week that they never had plans to build another U.S. factory. “As outlined in our midterm Mazda Advancement Plan, announced in March 2007, Mazda has no plans to establish a new vehicle production facility in North America,” the company says. Mazda did not, however, get the story straightened-out until after their stock dropped nine points after the Nikkei report. Then again, by the standard of the last few weeks, single-digit drops ain’t half bad.

Automotive News [sub] reports that United Auto Workers (UAW) chief Ron Gettelfinger is against the nevergonnahappen GM-Chrysler merger. Sort of. “I personally would not want to see anything that would result in a consolidation if that would mean the elimination of additional jobs,” Gettelfinger said. “But until we get into actual discussions, we can’t just speculate on what is going to happen. We have to know the situation, and then we can deal with it.” New CAW President Ken Lawenza is holding off on making any “if”-dependent statements on the matter until getting more details from GM and ChryCo. “We have already tried to contact the companies. We’re waiting for calls back,” Lewenza tells Reuters. Ken could be waiting for a while though, because the two firms probably haven’t even worked out the deal’s details yet. If there is a deal. Which there probably isn’t. Reaction on the other side of the pond is equally supportive…

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Let’s review. GMAC was GM’s “captive lender,” a wholly-owned subsidiary of the artist once known as the world’s largest automaker. You want a loan or a lease at a GM store? GMAC did the deal. It was a cash cow– until it started writing a lot of sub-prime/bad paper in both its automotive division (to keep GM’s cash flowing) and its ResCap mortgage unit (just ’cause it could). When GM CEO Rick Wagoner was looking for a way to keep his job (i.e. dress-up GM’s books with asset sales), he sold 51 percent of GMAC to Cerberus, a private equity group. [NB: Wagoner claimed that he did so to help GMAC’s credit rating. Yeah, that turned-out well.] Cerberus had recently purchased Chrysler, and Chrysler Financial Services. TTAC (and others) reckoned Cerberus would jettison Chrysler’s car-making ops (one way or another), combine GMAC with Chrysler financial and proceed with the business they know and love: finance. When the shit hit the fan for Chrysler– about ten minutes after Cerberus bought the company– Cerberus tried to swap Chrysler for GM’s remaining share of GMAC. Uncharacteristically, GM said no to a stupid idea. When the things got REALLY bad, Cerberus tried to sell ITS share of GMAC BACK to GM. Again, GM passed. And then things got worse…

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With all the talk of GM-Chrysler mergers, many have lost sight of the fact that automakers hold strategic talks with each other on a regular basis. Of course, GM talks grab the spotlight, thanks to the sheer size of the company. But Chrysler is by far the more interesting story. The Detroit News reveals that Chrysler’s owners Cerberus Capital began entertaining offers from a number of firms within a year of acquiring the Pentastar brand. In addition to the now much-speculated-upon GM talks, Cerberus has also met “in recent months” with Renault-Nissan, Fiat and Tata, in hopes of pulling Chrysler’s fat from the fire. Unfortunately, we aren’t getting many details on possible tie-up strategies. Nissan-Renault talks certainly revolve around platform-sharing in the short-term, although Carlos Ghosn is said to be “dispassionate” on the subject of closer ties with Chrysler. “I think that initiatives, in terms of alliances, are frozen for a very simple reason: Everyone is scared of credit crunch and cash problems,” says Ghosn. And that’s really the issue. There are plenty of second- and third-tier global automakers that would enter platform and capacity sharing agreements with Chrysler, but nobody wants to break out the checkbook for an equity position. Especially considering Cerberus expects to retain a stake in Chrysler in the event of a sale. Why buy a failing firm in this market when your cash could be better spent on new product?

If you harbored any doubts that Toyota is attacking the soft underbelly of its chief American rival, General Motors, this should eliminate them. Toyota Financial Services (TFS), one of only two AAA-rated auto credit companies, is launching the Toyota Rewards Visa®. Like GM’s card, ToMoCo’s Visa creates rewards points that can be redeemed when purchasing a vehicle from a Toyota delaership. Unlike GM’s card, ToMoCo’s plastic points are also redeemable towards service, parts and accessories. Card holders get five points for every $1 spent at Toyota dealerships, and a buck a point for everything else. There’s no limit to the amount of points a card holder can amass. Points are redeemed at one percent (e.g. $2500 worth of groceries equals $25 down at your Toyota dealer). There’s no annual fee, and a zero percent APR for the first six months. After that? Seems that depends on you. Well, your credit rating.

We’ve just received a copy an email sent by Ford’s Todd Lamb to dealers in his sales district. The missive from The Blue Oval Boy to FoMoCo’s Texas and Oklahoma dealers contains good news for beleaguered stores in the Lone Star and Sooner states. The automaker is reducing its wholesale floorplan rates by .5%. The move is in stark contrast to GMAC’s moves back in August, when the lender raised floorplan rates for GM stores by the same amount. At the same time, Ford’s decided NOT to raise their lending standards. “Unlike GMAC which announced that it will no longer finance customers with credit scores lower than 700, Ford Credit will maintain its’ [sic] consistent financing standards.” Will this offer Ford a competitive advantage? Probably not. But Lamb is nothing if not an optimist: “There’s plenty of reasons to be positive!” If you’ve got a second, we’d love a list, Todd. Full email after the jump.

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