Can that be right? The last time we checked it was $16b. If Ford's tearing through $20b though to the end of '09, what do you think GM's conflagration looks like? The $1b per month stat may be an underestimate… Anyway, this terrifying tidbit re: Ford's bank balance was buried at the bottom of a Fortune article [via CNNMoney] by Alex Taylor III. The once and future former Detroit cheerleader's speculating about whether there's a Ford Motor Company in investor Kirk Kerkorian's future– after Captain Kirk and FoMoCo CEO Big Al Mulally's sit down in Sin City. And then Taylor drops the bomb. "On their flight back home, Mulally must have wondered whether he simply dodged the first bullet. Kerkorian never remains on the sidelines after buying in and the only question about his greater involvement in Ford seems to be when he will choose to make his move. He has offered to invest more capital in the automaker, a potentially welcome move, since Ford is expected to burn through nearly $20 billion in cash by the end of 2009. But like any investor, Kerkorian would not be expected to hand over his money without some strings attached." Ya think? On the other hand, maybe Kirk's just waiting for a Chrysler/GM C11 dead cat bounce before cashing-in his chips. 

CNN Money's editor at large, Paul LaMonica, thinks GM should be kicked out of the Dow Jones Industrial Average. He argues that GM's poor performance, their plans to ditch HUMMER and the current 0% financing offer are all indicators that GM is in trouble. (If I were a cynic, I'd ask where he was when GM dumped Oldsmobile and had their "anyone with a pulse" financing deals.) What does LaMonica suggest to replace GM in the Dow? It "can still have an automotive component… GM is continuing to lose share to Japanese rivals Toyota (TM) and Honda (HMC). While the editors at the [Wall Street] Journal have maintained that the DJIA is only for American companies, I think that's a view whose time has passed." He concludes GM's just one of several companies "that are just not as relevant as they used to be, such as Sears, Eastman Kodak and U.S. Steel… GM's time has come." Ok — enough is enough. What took you (and everyone else) so long to figure this out?

Automotive News [sub] reports that Pininfarina is building a one-off based on Rolls-Royce's unobtainable Phantom Drophead Coupe. The Pininfarina Hyperion is a stylish convertible boulevardier built for a mysteriously unnamed private collector. The Hyperion will debut at the Pebble Beach Concourse d'Elegance this August. No word on what this monument to excess will cost its lucky owner, but given the bloated price points of other Italian reskins of the latest and hottest, one can only expect a price tag that would make Croesus blush. That saidm, besides a fresh new Italian suit, the Hyperion doesn't offer anything that's not available at the Drophead's if-you-have-to-ask price of $412k. Besides envious looks at even the toniest of locales, of course. Which we can all agree is more important than mere money.

Does anybody need a reminder that the credit crisis is hurting our economies? Case in point: German car-industry supplier Schenk Plastic Solutions. Schenk is a small but basically healthy company that relies on Daimler for 60 percent of sales. They have a patented new product named SkinForm which was developed for premium car interiors. It's been reported that SkinForm is unique and has no real competition, since it offers superior quality at a super-low price. Mercedes wants Schenk to supply SkinForm for one million cars per year. In 2005, Schenk sold a majority interest to a private equity company named Argantis to finance their expansion plans. Surprise! Argantis is connected to IKB, a German bank which is basically bankrupt after investments in subprime U.S. real estate. So IKB pulls the plus on Argantis, which subsequently pulls the plug on Schenk. A great company with good products and healthy customers is forced to declare its insolvency. As these things go these days, the Indians come to the "rescue." Automobilwoche reports that the Ashok Minda Group, based in Uttar Pradesh, will be buying Schenk. Globalism wins, Daimler is happy and the West's industrial base is eroded a little bit more.

From unsinkable to unthinkable. But there it is; stock picking guru Jim Cramer says GM is headed for Chapter 11. Yes, The General "joins the list of unthinkables, the ones that may not be able to make it with its current structure. The ones that basically need to be Chapter 11'd to save the business from dying." In his own inimitable style, Cramer reduces the arguments against GM's survival down to its essentials. "GM does not have enough cars in demand that it can make a profit on, and it has way too many cars and trucks that aren't in demand to do anything but lose billions of dollars, despite the decline in headcount and costs per car. It feels like the Citigroup of the autos. Without the deposit base." But seriously folks, Cramer's rant also fingers Ford for extinction. Of course, this is the same Jim Cramer who said the following in his 10-25-06 TV show: "GM – We recommended it at $18; it goes to $36. We say take a little schnitzel. It's now pulled back to $34. It's going to get to $40, but it's going to meander. I like F. I like GM." And this in February of this year: "I know there's risk to GM. But if you want to tell me that I am being reckless recommending this small-cap stock with the biggest share in the world, then I might as well just recommend that there's no real way to make money in the market." Never mind. When telegenic mainstream media mavens tell the average Joe to sell his stock and run for the hills, you can bet the big investors are already sunning themselves in the Hamptons. 

When Kirk Kekorian's mouthpiece Jerry York said Ford should get rid of Volvo,few commentators thought the deal would go down this quickly. Even though a Ford spokesman insists "we have been consistently saying since the end of last year that Volvo is not for sale," Automotive News [sub] reports that Ford is negotiating with Shanghai Automotive Industry Corporation (SAIC) to sell their Swedish division. SAIC currently has joint ventures with GM and VW to build and sell cars in China. They also own the rights to Rover; they're branching out with their own vehicles based on Rover cars under the Roewe brand. Buying Volvo would give SAIC a strong inroad to the European and American markets and/or another brand to play with in China. If this deal falls through, an unnamed Russian investor is rumored to be interested in buying Volvo. A word of caution to the brand's suitors: Gott lära av andras fel, eftersom man inte hinner begå alla själv.

Several of TTAC's Best and Brightest sent us links to today's Wall Street Journal article "GM Slates Sweeping Rebates As Toyota Closes In on No. 1." That's bad news, but it's not new news– in these parts anyway. The real reason so many of our readers sent the tip is buried in the body copy of the story. "The cost of insuring against a default in GM's bonds has soared to a high in recent weeks as fears of a bankruptcy-court filing have grown. An investor who wants to buy credit protection on $10 million in GM's bonds for five years currently has to pay $2.8 million upfront and $500,000 annually for that insurance, through what are called credit-default swaps. A year ago, that protection cost only $400,000 annually, with no upfront cost, according to Credit Derivatives Research LLC. Based on market prices, debt investors currently see more than a 70% chance that GM will default on its obligations sometime in the next five years, said Boaz Weinstein, co-head of credit trading at Deutsche Bank AG." The really worrying part? "A spokesman for GM said it has sufficient liquidity for 2008. He declined to comment on 2009." Saepe ne utile quidem est scire quid futurum sit.  

In the latest GM Death Watch, RF points out that GM is dancing on the point of a spear. The LA Times puts it into a different perspective. After the stock market closed yesterday with GM down 6.4 percent from Friday's closing, the company that was once the largest and most profitable in the world is "now is a less-significant business than Starbucks Corp., Gap Inc. or computer game retailer GameStop Corp." GM's total market capitalization is currently $7.3b, down from $14.1b on January 1. Starbucks, on the other hand, "still has two digits before the decimal point: Starbucks' shares are worth $11.9 billion in all." And as if to rub salt into wounds, they point out "you could fit nearly 17 GM's in Coca-Cola's $124-billion market cap." How the GM board can sit idly by and watch this unfold is anyone's guess, and why they keep the current impotent leadership around defies logic. GM's workers, suppliers, dealers, stockholders and customers deserve better than this.

Sources tell TTAC that the glut of SUVs and trucks is so bad that the banks are not calling in the repo men. I repeat: banks are cutting maximum slack to people who are behind in their loan payments– to the point where some are driving around in their vehicles without making any payments. In a bizarre way, this makes perfect sense. Repo services cost money. Re-conditioning costs money. Storing the vehicles costs money. Equally important, the banks/credit agencies don't take the full hit to their bottom line until they sell the vehicle. Needless to say, the market is so stuffed with both brand spanking new and slightly used (i.e. excellent condition) product that we're talking about a MASSIVE hit. What's more, our man in the auction biz tells us that many dealers are holding their light trucks until the end of the month– and then selling them without reserve. You can imagine what that's doing to residuals. If not, check this from Tom Folliard, president and chief executive officer of CarMax: "During the quarter, wholesale industry prices for SUV's and trucks declined nearly 25%, which is approximately four times the normal depreciation expected over this period and well in excess of the depreciation expected over a full year. This is the most rapid depreciation of any vehicle segment that we have experienced in our 15 years."

You say you have a class reunion coming up and just can't show up in your eight-year-old Corolla? Well, cheer up Bunkie– that's what rental cars are for. And since anything worth doing is worth doing right, Gotham Dream Cars has just the car for you. For a mere $4000/day (plus insurance) you can make your grand entrance in a Saleen S7. However, if you want one of the supercars, you'll need to plan ahead– Gotham expects a six week (or longer) wait list. They'll have one in both their New York and Miami locations but to rent one you have to be a "returning GDC customer" or member of their "exclusive DreamShare exotic car club." You can also bet there'll be some bodacious restrictions on far you can take it or what you can do with it. Hmmm… I can get a direct flight from Atlanta to NYC or Miami reasonably cheap, and a membership in their DreamShare club can't be that much, can it? RF, how much money do we have in the road test budget????  (Hat tip to gizmag )

Truckers may not be spending much time in Nevada these days, but the big wigs from Ford are. The Wall Street Journal [sub] reports that Chairman Bill Ford, CEO Alan Mulally and CFO Don Leclair have gone to Vegas for a sit down with Kirk Kerkorian, his attorney Terry Christensen and wing-man Jerome York. What happens in Vegas stays in Vegas. So no formal word on what went down between FoMoCo and the boss man at MGM-Mirage, and what kind of suite Ford got comped. If and when FoMoCo needs more cash to keep the lights on, it's unlikely to be able to borrow it legit. Everything up to and including the Blue Oval is already hocked with the well dressed pawn brokers at Citigroup, Goldman Sachs and J.P. Morgan Chase. . When the time comes, FoMoCo is going to need an equity investment, not more debt. Kerkorian seems like the only player who is in, but only on his terms. As we've speculated here before, those terms are likely to include full voting power stock, not the pretend stock normal shareholders get. Goodfellas indeed.

Democratic presidential hopeful Barack Obama's love – hate relationship with Detroit automakers– they're evil, foot-dragging SUV-builders who need federal green initiatives (i.e. taxpayer money) to protect votes jobs– continues apace. Yesterday, Obama visited The Wolverine State to promise he'd meet with American automakers– unlike George Bush, who didn't have a sit-down with The Big 2.8's well-compensated execs until the sixth year of his presidency. Actually, it was his third year. But, as The Detroit News reports, "Late Monday, Obama's campaign acknowledged the misstatement as an 'unintentional oversight.' But they said it didn't take away from Obama's broader point. 'When the auto industry needed help the most, President Bush delayed for months meeting with them and now American workers are feeling the devastating effects of record layoffs and job losses,' said Obama spokeswoman Amy Brundage. Yes, well, one can only imagine how that meeting would go. "You are bad, bad people. Now take these billion dollar handouts and go!" Make no mistake, the former Chrysler 300C driver (yes it's got a Hemi) is ready to ask "what's in YOUR wallet?" when it comes to helping Detroit: "Obama today reiterated in his speech his pledge to spend $150 billion over 10 years to help create 5 million jobs in the 'green' sector, including helping automakers retool older plants to make plug-in electric vehicles."

As Mark Phelan pointed out, GM would dearly love to unload the unloved HUMMER brand on some overseas sucker investor. The rumor mill is gristing the idea that India's Mahindra and Mahindra may scarf the tree hugger's least favorite vehicle of all time, ever. It seems only natural; the company's been building the AXE, a Humvee knockoff, for the Indian Army. Just-Auto cites an anonymous "senior official at M&M" who told them "Mahindra is very keen on acquiring the Hummer, because of many reasons, but I can't go into all of them but for one it is the most seen vehicle on TV in any country, these days at least the military version of it. It is still too early to talk of prices and timeframes but we are in the process of designing a civilian version of the Mahindra AXE and owning the vehicle it was modelled [sic] after would make a lot of sense." Not only that, HUMMER would give them a well-known premium brand to compete against rival Tata's recent Land Rover acquisition. Analysts think the HUMMER brand could put about $750m into GM's coffers. Or not.

Let's start with the end of The Detroit News' HUMMER-related "analysis" and work our way backwards. "So, does Hummer stay or does it go? Right now, your guess is probably as good as GM Chairman Rick Wagoner's." WTF? If the man at the helm of GM, an executive pulling down $14.4m per year (plus) doesn't know whether or not he's killed HUMMER, let's hope his bankruptcy-prof health care bennies include Alzheimer's medication. Meanwhile, columnist Mark Phelan needs to adjust his own meds, or whatever it is that stops him from facing reality (his paycheck?). "With dealers in 37 countries and assembly in South Africa as well as the United States, 'the potential for global growth is a huge opportunity. It's one of Hummer's strengths,' spokeswoman Joanne Krell said. Developing markets in Asia, Central and Eastern Europe look particularly promising." Once again, GM is spinning the idea that its foreign ops will save North America. Once again, Phelan is happy to broadcast the corporate line (hook and sinker included). Phelan also forwards the idiotic idea that HUMMER could be re-jigged to build green vehicles, and the possibility of an overseas buyer. Let it go Mark. Just let it go.

Twenty-four hours after Ford's PR man Mark Fields declared battery research a "national priority," the US Department of Energy (DOE) announced it's giving $30m in research money to General Motors, Ford and General Electric. (Don't despair Mopar fans, as GE is already working with Chrysler on a plug-in hybrid.) Each company will work on a different aspect of battery technology. GM will focus on lithium ion packs and their integration with vehicles and homes. Ford will attempt to tackle the manufacturing process. GE will concern themselves with "dual-battery" technology, whatever that may mean. While the DOE's grant isn't exactly the $500m Fields declared necessary to secure our technological borders, it's still a hefty chunk of change. Expect the initiative to bear PHEV fruit in 2016, some six years after the plug-in electric gas hybrid Chevrolet Volt's supposed debut.