Holy global overcapacity, Batman! Trading Markets reports that the world’s largest automaker is cutting Japanese production in half and overseas production by 43 percent, as it struggles to touch bottom. Toyota and its Hino and Daihatsu subsidiaries will produce 433,979 units gobally in April, down 46 percent from April 2008. Exports from Japan have been hit especially hard, dropping 70 percent (year-on-year) in April. According to the WSJ, all of the Japanese majors are dramatically decreasing domestic production on falling sales. Even without bankruptcy filings, it seems everyone in the gobal car game is facing some form of reorganization. Like Renault/Nissan’s new attempt to find another $2 billion in “synergy” savings. Try looking under the couch cushions, guys.

Jim Fouts, the mayor of Warren, Michigan, has made GM an offer he hopes it can’t refuse. According to the DetN, Fouts hand-delivered a proposal to GM’s Renaissance Center that offered the automaker a 30-year tax abatement on personal property taxes if it moved headquarters to its Warren Technical Center. The offer, which Fouts calls “unprecedented,” would give GM 100 percent off taxes on all machinery and equipment and 50 percent off the taxes associated with any new construction for a period of 12 years.

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It was a long meeting that lasted into the wee hours of the Thursday morning. It ended with the German government throwing insults at the US government. Everybody went home or to their presidential suites with a headache and no deal. If there is no further movement, Opel will go down the drain with GM by Friday.

Before the meeting, there were rumblings that wrinkles had to be ironed out in a trustee plan that was supposed to be the basis for bridge financing provided by the German government. The money was supposed to keep the lights on in Rüsselsheim, while the proper groom for Opel is being groomed.

Mice and men impacted with US government greed. Or lack of their usual largess.

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At a National Press Club speech intended to promote the Department of Transportation’s (DOT) stimulus spending initiatives, Transportation Secretary Ray LaHood explained how his policies are designed to discourage the ownership and use of automobiles. Although many imagine road building when “shovel-ready” projects are mentioned, the only efforts highlighted by LaHood as worthy of receiving federal taxpayer subsidy included buses, light rail and other forms of multi-modal transit. “We have $8 billion,” LaHood said. “You’re going to see new buses; you’re going to see ability of transit districts to really have the equipment . . . And we’ll begin at DOT to set a standard for our ability to get out of the recession, get people back to work in good-paying jobs.” LaHood says some of those federally funded jobs involve driving buses.

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Ford is basking in its “last man standing” status this week as it holds its annual shareholder meeting. Automotive News [sub] reports that Ford expects to break even or turn a profit by 2011 without the help of government bridge loans. So confident are stockholders in the success of Ford’s current strategy that they have voted down reforms that would wrest voting control from Ford family preferred stockholders for the fifth time in as many years. This despite a $14.7 billion loss last year, and a $1.43 billion loss in Q1 of 2009. The good news? Ford has restructured its debt, reached a deal with the UAW’s VEBA fund, raised $1.6 billion in its recent stock offering, and its retail market share has “stabilized.” But there’s still plenty of work to be done.

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GM wants to dump Opel on Fiat, but Fiat has its eye on GM’s successful Latin American division. GM sees a chance to hop on Fiat’s runaway train and is considering giving the operations to Fiat for a stake in the Marchionne empire. Two anonymous sources tell The New York Times that Fiat’s CEO “has indicated a willingness to give up less than 10 percent of Fiat to General Motors.” GM is said to be asking for 30 percent. How awkward.

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No, really. The Detroit News reports that prior to its Chapter 11 filing, Chrysler sought to sell off parts of the company to everyone. “Chrysler sent letters to parties, primarily in China, whom we thought would be potentially interested in purchasing our assets,” writes ChryCo’s Tom LaSorda in a bankruptcy filing affidavit. “Over the next two months, several companies, including Beijing Automotive Industry Holding Co., Tempo International Group, Hawtai Automobiles, and Chery Automotive Co., expressed interest in purchasing specific vehicles, powertrains, intellectual property rights, distribution channels and automotive brands.” But guess what? Not even these ambitious firms were tempted to spend a dime on Chrysler’s alleged assets. And the major OEMs in the global auto game? Chrysler’s efforts to form alliances with Nissan, GM, Volkswagen, Tata Motors, Magna, GAZ, Hyundai, Honda and Toyota “have been determined and undertaken in good faith but have met uniformly without success,” admits LaSorda.

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There were plenty of entertaining moments on last night’s Autoline After Hours. Fortress Detroit’s ugly bunker mentality proved at every turn what people (specifically, former GM consultants) mean when they accuse the American auto industry of problems of culture (with footnotes!). But TTAC is here to help. And our first suggestion to those feeling threatened by the collapse of their comfortable, familiar world is to read more. Seriously. “You don’t think Toyota makes any money on their hybrids do you?” asked one torpid apologist. Unless the Nikkei (via Green Car Congress) is part of the dreaded “we hate Detroit” conspiracy, it turns out that Toyota does make money on their hybrids.

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Pop quiz time: how many viability schemes has GM touted since it began asking for bailout bucks? Including today’s announcements (actual plan not yet released) General Motors has submitted no fewer than three new business models since it began receiving Treasury funds in mid-December. And that doesn’t even include the first two “requests” which were rejected by Congress before GM cut out the middlemen and started dealing directly with the guys who print the money. The progression of this parade of plans illustrates a single major theme: the slow, reluctant acceptance of some approximation of reality. Which includes confronting the fact that GM’s bloated payroll trades off with its viability. The Detroit News reports that GM now understands that it pays 21,000 more employees than it can support, and that these positions will be terminated. That’s 7,000 more job cuts than the last (February) plan called for. The December plan (now lost to the GM memory hole, but hosted at TTAC here (PDF)) didn’t call for job cuts at all because the bailout was all about saving jobs back in those days. The cuts amount to a 34 percent decrease in hourly employment, with plans to stabilize employment levels at 38,000 by 2011. GM’s hourly labor costs will drop from $7.6 billion in 2008 to $5 billion in 2010, as GM seeks to “lower its break-even point” according to CEO Fritz Henderson.

“Shanghai car-maker SAIC makes approach for Vauxhall,” headlined London’s Telegraph over the weekend. Of course SAIC doesn’t want just the Vauxhall badge, they are interested in the whole Opel/Vauxhall enterprise. What looks like “Opel” through German eyes looks like “Vauxhall” to the British. It’s one and the same.

According to the Telegraph, “Shanghai-based SAIC has requested a sale document from General Motors (GM), the stricken US car-maker, which has warned that it may file for bankruptcy in an effort to ensure its survival. Commerzbank, the German banking group, is orchestrating the sale process on behalf of GM, which is to establish a new subsidiary comprising Vauxhall and Opel, the German car manufacturer. A new investor would be invited to acquire a controlling stake in the company, with GM potentially retaining a minority interest.”  Saab and Chevrolet Europe would not be part of the deal. More Chinese interests are lining up:
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GM is still trying to bean count their way out of this mess. But, thankfully, they’re using better quality beans. The powers that be (or were in this case) have designed a new program that affords customers the opportunity to once again become conspicuous consumers of GM products. Two of these items are old hat. The 5-year/100,000-mile warranty is now, get this, a 5-year/100,000-mile warranty. Did we mention GM has a rather large PR department? You also can get one year of OnStar which, again, isn’t newsworthy. But there are a couple of interesting additions designed to minimize the “fear factor” of making a dumb car buying decision.

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Automakers are cutting second quarter production plans by double digit percentages, as the US auto market continues to contract. Automotive News [sub] cites CSM Global’s estimate that North American auto production will not top 2.07 million units, the lowest level since “at least” 1981. And though GM, Ford, Toyota, Nissan and Honda are expected to cut production in the 30-40 percent range, the worst news comes from Chrysler. The Cerburian dog is “selling the majority of their vehicles out of inventory,” says CSM’s Michael Robinet. “They are trying to get much more realistic about production levels.” How realistic? Expect a 60 percent cut in production for the second quarter, and under one million units of total North American production on the year, reckons CSM. That’s well below Chrysler’s 1.6m annual production plan from its original viability plan.

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More and more suppliers of the collapsing auto industry are at the brink of collapse.

Visteon Corp. said on Monday it expects its auditors to question its ability to continue as a going concern due to the US auto industry downturn and the auto parts maker’s cash position, Reuters reports. The parts maker said that this warning could trigger a default under Visteon’s principal US senior secured credit facilities.

Visteon, spun off by Ford Motor Co in 2000, warned in February that it was uncertain of staying in compliance with its debt covenants. The auto parts maker still relies on Ford for one-third of its annual revenue.
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We shouldn’t read too much into meetings such as those of the G20. Even G8 confabs usually produce nothing other than nice announcements. Finance ministers of Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, South Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the U.S., the U.K. and the European Union met this weekend in Horsham, England.

According to Bloomberg, the meeting produced the not too unexpected pledges of a sustained effort to end the global recession. The U.S. called for more spending. The Europeans called for restraint. The usual solution was a joint decision to monitor further developments closely. But there were undertones that could signal the end of wholesale bailouts.

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