Sometimes being a Pistonhead isn’t that wonderful. I’ve spent the last 24 hours securing or moving fourteen cherished automobiles to higher ground before Hurricane Ike hits the city of Houston.  Its been crazy: one dead battery with an even deader alternator, a  bleeding heater core and several trips to an elevated parking garage. By Thursday night,  I had a (poorly chosen) escape pod for my evacuation: a 1972 Continental Mark IV. But, after a months-long slumber, I fired up the triple-black beauty and it instantly idled like a new car. Too bad I didn’t plan on the Mark’s quarter tank of gas. Or an eighth, depending on how cranky the gauge acted when you came to a stop. I waited in feed lines with SUVs, compacts, pickups and crossovers only to have pumps run dry, which was more than a little terrifying given the big Lincoln’s OPEC-inspired heyday. Can I make it to the suburbs on congested roads, in a 7.5 liter Lincoln that gets 9 MPG on a good day? Thankfully, there was no traffic this morning, so I gently wafted to safer territory on the Mark IV’s reassuring haunches. It was a throughly relaxing ride. And now I’m ready for this damn storm.

Chrysler’s Jim Press is refining the “not a bailout” argument today, calling federal loan proposals “an acceleration of technology into the hands of consumers who couldn’t afford it, if we didn’t do it.” Furthermore, Press tells the Detroit Free Press that taxpayers will reap concrete benefits from the loans. “I think it will allow everybody to bring electric cars, plug-in hybrids, hybrid cars, even range-extended hybrids. All of those vehicles will be accelerated,” says Press. No, seriously. “These are going to be very doable products, looking at production, not just research, he deadpans. “Our focus of our investment from his point forward is improving the environmental footprint of our cars.” Why, Mr Press? Are high oil prices shifting the market towards greater fuel efficiency, making these investments a smart business choice? Not exactly. “We’re worried about dependence on foreign oil,” says Press, getting all national security advisor on us. “But if you fast forward 15 years, where will batteries come from? Right now, the major sources of batteries are other countries. So are we trading our dependence on foreign oil, which is a natural resource, for a dependence on other countries to produce something in a factory? We need to stimulate that development here — here in Michigan.” In other words, the real reason that Detroit should receive bailout loans is that it’s an organ of the national interest. If you think a Volt in every pot, and a head start on tackling Peak Battery sounds tempting, Press is even willing to put some accountability (and your money) on the hood to push you over the top. Press says $25b in loans would be a “good start,” and that the Feds should “look at the return on that $25 billion, and if in everyone’s perspective, we can do it again, we should. I think for a beginning, $25 billion is an appropriate place to start.” The camel knows it need only get its nose into the tent…

The Pension Benefits Guarantee Corp has had enough of Delphi’s ongoing pension debacle, and has warned the GM spinoff that it would file in court to seize a further $900m of the supplier’s assets. Having missed hundreds of millions of dollars in payments to its pension plan, Delphi’s still-profitable overseas operations are targeted for seizure by the PBGC. On Tuesday, reports the Wall Street Journal, the PBGC sent the second letter in the last month to urge GM to absorb at least $1.5b in Delphi’s pension obligations by the end of the month. Timing is crucial, because new pension laws which go into effect on October 1 will make such deals far more expensive. Oh yeah, and then there’s the whole bailout angle. “I can’t speak for the rest of the government, but I assume if GM is asking for assistance from the government generally, the status of the GM-Delphi pension situation would be highly relevant,” says PBGC Director Charles E.F. Millard. We couldn’t agree more. So GM and Delphi have until the end of the week to file papers that would transfer $1.5b of Delphi’s obligations to the General’s pension account. If that date is missed, Delphi’s only remaining profitable business ventures will be ghost like Swayze. With the firm likely to follow shortly thereafter, Chapter 7 style. So, why would GM endanger it’s bailout chances and kill off its largest supplier, when it’s own pension fund is actually overfunded to the tune of some $18b? Because that’s “already committed to paying off United Auto Workers medical claims, funding employee buyouts and other pending obligations.” Rock, meet hard place. Meanwhile, man the lifeboats.

Speaking yesterday at an Automotive Press Association event, Chrysler Vice Chairman and President Jim Press revealed that Chrysler has “been approached by outside individuals who want to work with us to buy the asset and sustain Viper going forward.” Who are they outside individuals? Well that’s a secret, of course. But someone, hopefully, maybe, wants to buy the rights and equipment to make the Viper in the future. As a car fan, I think this is a nice development. No matter what happens to Chrysler, the legendary Viper would live on the way that the Seven or Cobra live on today. At this point, Chrysler is selling about 80 Vipers per month– which is probably more than a low volume hand-assembler could handle in production. But presumably the amount of interest would drop when you could no longer get a car with a dealership warranty (even though it would have been at a Dodge dealership, that’s something). From Chrysler’s business standpoint, why? What is the entire Viper program really worth? $100 million perhaps. That’s barely enough money to put up new wallpaper in the bathrooms at Chrysler’s headquarters. Meanwhile, when they eventually do sell the entire Dodge brand off, the Viper is an absolutely crucial asset to its image. But then, that wouldn’t fit the perfect profile of a Cerberus strip and flip. And by selling off little pieces of the company– like the Viper– that’s exactly what we’re seeing.

Troy Clarke, President of GM’s North American operations, decided answer back on some issues plaguing GM while addressing students at Southern Methodist University (home of the George W. Bush Presidential Library). Clark started with the usual PR blurb; GM is one of the largest auto manufacturers in the world, and that they bring us household brands, like Chevrolet, Buick, Saturn, Pontiac, Hummer and Cadillac. Well, until they kill Pontiac and sell off Hummer. And Buick slips in the shower and dies. While we could read into Clarke’s reference to GM as “one of” the world’s largest automakers rather than calling it “the largest,” there were other gems from the presentation. Clarke went on to trumpet GM’s phenomenal fuel economy stable: they have 18 models that get 30 mpg or better. Ray Wert trashed this myth previously: these 18 cars represent 30% of GM’s overall line up, whereas Toyota’s and Honda’s 30+mpg club represents 55 and 60%, respectively. Then came the thorny issue of “the bailout”. Or not. Because it’s not a bailout. Is it? Clarke told the crowd that actually, it’s not a bailout. It’s just a return for the taxpayer. Nice! “Congress has mandated an industry average of 35 mpg or better by 2020,” Clarke said. “This was the figure that they thought was reasonable and would not bankrupt the car companies, but it just depends on how valuable sooner results in this facet are to the American taxpayer.” Fancy that! Even though, I’m not a United States’ taxpayer, I’d hazard a guess that citizens would want their taxes spent on things like roads, defense and fixing social security, rather than a company run into the ground by clueless executives.

Automotive News (sub) reports that the National Automobile Dealers Association will not be joining the Detroit Alliance to lobby congress for bailout loans. In stark contrast to the collective approach to bailout lobbying taken by the three Detroit automakers, NADA is leaving those efforts up to individual dealers. “We represent all dealers,” said David Regan, the association’s vice president of legislative affairs. “NADA members likely will have different opinions on whether government loans would be in their economic interest.” This is, in effect, the same reason for the Ford-Chrysler-GM collective approach to lobbying, rather than going through the Alliance of Automobile Manufacturers. In short, the bailout is only good for Detroit, so there’s no reason for the successful automakers to waste precious lobbying money on it. Needless to say, this all further undercuts Detroits head-in-the-sand assertion that this is not a bailout. GM admits that it has recruited its dealers to shoulder some of the lobbying burden, though Ford and Chrysler remain cagey on the subject. If the once-big three want to convince America that the entire auto industry is suffering, and that the loan program is not corporate welfare for their failed business models, they’re going to have to recruit more help from across the industry. The lack of industry interest is highly instructive.

So Google is planning to take over Yahoo’s internet search-surrounding advertising, scooping-up 80 percent of the market. Needless to say, the move has seriously pissed-off Microsoft, which scarfs the crumbs off that particular table, and tried to buy Yahoo’s ad interests before Google (not to mention Microsoft’s experiences on the business end of a U.S. Justice Department (DoJ) anti-trust case). Advertisers, who know a cornered market when they see one, are also chagrined (i.e. litigious). The UK’s Independent (discovered through an ad-free Google alert) reports “The Google-Yahoo alliance is scheduled to go into effect next month, but last week the Association of National Advertisers petitioned the DoJ to block it. The trade group, whose 400 members include Procter & Gamble and General Motors, said it would drive up ad rates and hand too much power to Google.” But wait! There’s more GM, if only hypothetically. “The two Silicon Valley giants have argued in the past that outsourcing Yahoo’s search advertising was akin to General Motors using Toyota’s hybrid technology, which does not lessen the ferocity of competition in the car industry.” Anyone remember Rick Wagoner’s “secret trip” to Japan to talk to Toyota? If only…

You might remember Henrik Fisker as the man whose SoCal coachbuilding company was trying to rebody BMW 6-Series and Mercedes SLs for ungodly price premiums (they sold about 15 total). Or perhaps you’ll think of Fisker Automotive, a would-be electric car company, which was sued by Tesla back in April. Today, Fisker Automotive has announced that they have raised $65 million in venture capital funds for the development of their Karma electric performance sedan. While some more “standard” Silicon Valley investors had been on board with the Karma project, the final investor that put the fundraising over the top is the Qatar Investment Authority, the investment arm of Qatar’s government, with $60 billion in assets. According to the same press release, initial deliveries of the Karma sedan are expected to begin in the 4th quarter of 2009, with eventual sales of 15,000 a year. Uh, whatever you say fellas.

Thanks to epic leasing losses, bad loans and Chrysler’s declining market share, Chrysler Financial has been taking a beating on the Street, with a capital B. A month ago, ChryCo Financial struggled to re-new its loans on Wall Street, only managing to raise $24b of the $30b it wanted to stay in business. It now appears that the conditions of the re-fi include the end of the leasing (done) and new terms for Chrysler dealers. Automotive News reports that the lender has told dealers it will jack-up their floorplan interest rates by an unspecified amount and force them to pay off older, unsold vehicles. More specifically, “Dealers will be required to pay monthly fees on new-car inventory 180 days old and older. The fees start at $10 per unit, go to $15 at 270 days and $25 at 360 days. 2008 and older units more than 360 days old must be paid off at 10 percent a month. All used cars more than 180 days old must be paid off.” This is bad news for Chryco dealers; they won’t be able to get alternative wholesale financing elsewhere on better terms. It also means they’re going to be very careful on inventory. And that’s bad news for Chrysler’s factories (i.e. Chrysler). Other captive floorplan lenders, like GMAC, may soon follow suit. All of which means its hardly likely sales have “bottomed out,” although it’s for sure that dealers will have to do something to get rid of old inventory. As in price cuts. 

Ralph Nader has plenty of good reasons for opposing the $50b taxpayer bailout, sorry, “low interest federal loans” for Detroit. Namely, “decades of poor decision-making” and Detroit’s total inability to drum-up capital on Wall Street. Unfortunately, Nader’s name, reputation and government intervention fetish discredit his cause. GM wasted no time rising to the bait, brushing off Ralphie-Boy’s criticism with a suitably put-down. “There are many more relevant voices in this discussion that see the existing provision for what it is,” spinmesiter Greg Martin told The Detroit News. “A sound, smart policy to inject capital into the industry to get advanced technology vehicles on the road quickly.” For once, a GM toady gets it right. About Nader. The consumer advocate argues for government intervention on a socialist scale: a “public takeover of the corporations.” Though a thorough managerial reshuffling should be a condition for any government bailout, Nader’s proposal of a government-run U.S. auto industry is ridiculous. Any such move would lead to a British Leyland-type public ownership debacle. Opponents of the bailout plans would do well to keep their distance from his wild schemes.

I never considered the California Air Resource Board (CARB) a motivating force for Chrysler’s Viper model sale– until I read this WardsAuto story. “The new minimum CAFE standard of 35 mpg (6.7 L/100 km) in 2020 and additional pressure from California and 15 other states to limit carbon dioxide is part of what may force Chrysler LLC to jettison its Viper high-performance model,” Wards reported after a chinwag with GM Car Czar Bob Lutz. “‘Setting lower CO2 limits would equal setting CAFE at 43 mpg (5.5 L/100 km),’ Lutz says. ‘This is why the sale of the Dodge Viper by Chrysler makes sense, because anyone selling fewer than 50,000 vehicles annually would be exempt (from fuel-economy requirements).'” The Car Czar’s got a point! OK, OK, so California bill AB1493 sets a fleet exemption of 60k vehicles. And the EPA has denied CA the waiver they need to implement the law. And the real– and really bizarre– threat is that each state would have different fleet-wide requirements, depending on the model mix in that state. Never mind. “So if someone else bought Viper,” Bob bitches. “They could sell to capacity, but Chrysler couldn’t. This is why we are concerned about Corvette.” Bob blames the hypothetical threat on hypocritical Hollywood environmentalists. “The reason California set the exemption for less than 50,000 units is that it would mean the Hollywood folks could keep driving their Lamborghinis and Ferraris. Porsche could sell 11-mpg (21.4 L/100 km) Cayennes, but we couldn’t sell 20-mpg (11.8 L/100 km) Chevy Tahoes.” [Thanks to KixStart for the link.]

Yes, we all hate the alphanumeric nomenclature, snaking over the auto industry like poison ivy. And with only so many letters and numbers, we always expect some repeats (Lexus LS/Lincoln LS, Chrysler 300C/Mercedes C300, BMW X5/Mazda MX-5). Has Hyundai gone a character too far? The car we North Americans know as the Veracruz is being introduced to Europe as the ix55. Not only is this a bizarre thing to say down at the pub (Oh, I drove my ix55), but it’s awfully close to, well, a lot of other cars. Hyundai’s new scheme for European car names is to begin with the letter “i,” because if it worked for Apple, it’ll work for them. Or Mitsubishi’s “i car.” The X we can assume refers to this vehicle being an AWD crossover, and of course the 55 is because it has a 5.5 liter V8. Erm, no. Instead, it sounds to me like a mish-mash of BMW (xDrive 50) and the 55 immediately conjurs memory of a trillion Mercedes AMG cars with 55 at the end, from C55 to E55 to S55 to CL55 to CLK55 to ML55 to G55). Besides, what was wrong with Veracruz?

So writes former Chrysler outside counsel Steven Roby in a rebuttal Op-Ed in the Los Angeles Times today (the original LAT Op-Ed contended that the US government should not bail out American manufacturers). His thesis of “It’s not the Big 3’s fault” is supported with inventive arguments such as “It’s not the Big 3’s fault” and also “It’s not the Big 3’s fault.” More specifically, he writes that GM, Ford, and Chrysler are just ridiculously, unreasonably burderend by high health care costs, that foreign governments directly subsidize manufacturers, and that other countries manipulate currency. We’ve been through this, time and time again. (He also accuses foreign governments of indirectly subsidizing “their” automakers through grants to research universities. Apparently this lawyer has never heard of the Bayh-Dole Act, which allowed for private patents of government funded research at Universities. And I take it he also has never visited Stanford, Berkeley, Duke, UNC-Chapel Hill, Michigan State University, and so on.) But the big problem is that Roby’s article never recognizes any Detroit mistakes: that the Big 3 spent years raking in piles of cash because of SUVs, or benefitted from the chicken tax on pickups, or benefitted from the special EPA status of “light trucks,” or that Chrysler already was bailed out in the past 30 years, or that GM, Chrysler, and Ford haven’t built a truly competitive small car. Roby writes that “The Times should not judge GM, Ford and Chrysler unless it can walk in the shoes of the executives and production workers.” The production workers have gotten the shaft, and nobody is blaming them. But I’d love to walk in the shoes of an executive like Rick Wagoner, whose company can lose billions upon billions of dollars and still go home with a $14 million paycheck. No, the global market for cars is not completely fair. Time to stop complaining and deal with it. Still.

Say what you want about Detroit, it still has some class. The media may already be counting the bailout billions, but the once-big three will be waiting until after Labor Day to visit Washington, hat in hand. Per Emily Post's corporate welfare etiquette, natch. The Wall Street Journal also reports that the Detroit three will speak with a single voice during upcoming meetings with federal loan officers. As in no screwing over Chrysler for a better deal. Of course that means the projected $50b will have to be split three ways. And then there's that damn CAFE ramp-up to worry about. In fact, Detroit insiders are already saying that 2011 compliance alone could take up the whole $50b. Why, it's almost as if Detroit might need even more money! But with political season in full swing and the economy emerging as a major issue, Detroit knows it has only to ask. Posturing representatives will hand out loans for the electoral feel-good, and before you know it there'll be a Volt in every pot. And billions of dollars in taxpayer liability for three spectacularly failing enterprises.

Rumors have been flying for quite a while that Cerberus would sell off parts of Chrysler. Most of the conjecture centered around Jeep being the first to go. However, Automotive News [sub] reports the Dodge Viper could lead the exodus through the gates guarded by the three-headed dog. This morning Chrysler said they're "exploring strategic options for the Dodge Viper business… as the Company focuses on enhancing its core business and leveraging its assets." CEO Bob Nardelli doesn't deny they're considering the sale. "We have been approached by third parties who are interested in exploring future possibilities for Viper." Then, proving he's unable to speak in any tongue but ManagementSpeak, he added, "As the Company evaluates strategic options to maximize core operations and leverage its assets, we have agreed to listen to these parties." But fans of the hotrod Dodge needn't feel betrayed. "Viper is an integral part of this Company's heritage. While this is a strategic review, our intent would be to offer strong operational and financial support during any potential transaction, in order to ensure a future for the Viper business and perpetuate the legacy of this great vehicle." In other words, "we're going to sell the IP rights to it lock, stock and sidepipes then market the remaining dealer stock as 'last of a legend' to get every cent we can out of them."