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.

Though Chrysler gets special attention from us for its supplier-gouging, the practice of sticking parts makers with cost increases is basically an industry standard. As further evidenced by a Bloomberg report that bankrupt supplier BHM is filing to be released from an unfair (it claims) contract with ToMoCo subsidiary Toyota Boshoku. BHM sells vehicle seat-frame components to Toyota Boshoku, which has refused to increase payments in line with an 80 percent rise in steel costs this year. “The supply contract is so unprofitable that the debtors’ continued performance on the current terms cannot be justified,” says BHM in its bankruptcy court filing. The firm had requested a new pricing schedule in June, which Toyota Boshoku has rejected. Interestingly, Boshoku may be facing pricing pressure of its own. BHM components go into vehicle seat frames that Toyota Boshoku manufactures for Chevrolet’s HHR hatchback. GM has not commented on the case, but the facts prove two imutable truths about the industry. First, that everything and everyone in the biz is connected, and second that every OEM would just as soon see suppliers go under as raise their own costs. Be they Chrysler, GM or Toyota.

In T. Boone Pickens’ latest TV campaign, the aspiring compressed natural gas kingpin patriotic oil addiction interventionist points out that most Iranian autos run on CNG. According to T., that’s because they save the oil for export to saps like us. It is a shameless, outrageous manipulation of the facts. The former Texas oilman forgets to mention that Iran imports some 40 percent of its gasoline– which still isn’t enough to satisfy demand. The Iranian government has rationed gas since last year, with predictable consequences. The New York Times reported on the result back in June of ’07: “Unrest spread in Tehran on Thursday, the second day of gasoline rationing in oil-rich Iran, with drivers lining up for miles, gas stations being set on fire and state-run banks and business centers coming under attack.” In fact, according to Iranian analyst Saeed Leylaz, “We are importing gasoline from 16 different countries. The country would be on the verge of collapse if they suddenly decide not to sell us gasoline. The government has to find a way to lower the consumption.” Which leads us to the aforementioned CNG and dual-fuel vehicles. Green Car Congress confirms the country’s switch to natural gas, reporting a sales jump from 20k to 429k CNG-powered cars per year. Even if you trust those numbers (courtesy Iranian Minister of Industries and Mines Ali-Akbar), do we really want to imitate a state-controlled automobile industry? And by you I don’t mean Detroit or T. Boone Pickens, obviously.

The Bureau of Labor Statistics recently released its unemployment numbers for August, revealing that joblessness has hit a five-year high at 6.1 percent. And rather than raising some of the many legitimate concerns over the accuracy of BLS statistics, the Detroit Free Press jumped right in to throwing fuel on the presidential campaign fire. Noting that automakers and parts suppliers shed 38,000 jobs in the past 30 days, and that the industry has lost 127,800 jobs over the past year, the Freep frames these losses in the context of Detroit’s proposed $50b bailout. The industry job losses combined with 14,000 jobs cut from car dealers and auto parts vendors “could add pressure” for Congress to back the Detroit bailout, reckons the Freep, and with swing-state Michigan’s unemployment levels topping out at 8.5 percent, the news is certainly putting pressure on the presidential candidates. And as McCain and Obama trade jabs on the economy, momentum simply builds for the government to do something. Since the only proposal on the table amounts to a blank-check bailout for three firms which have conclusively proven their lack of competitiveness, isn’t it time for one of our would-be leaders to show some y’know, leadership, and propose a different option? Otherwise, the bad news will keep coming, and Washington (and its aspirants) will have no choice but to offer more bailout money than the next guy.

Ding ding! Round 2! The title of “Heavyweight Ego of the World” took a new twist today. VW’s powerful works council will summon thousands of employees to protest against Wendelin Wiedeking at a VW supervisory board meeting today. Herr Wiedeking has already has to put up with rumours in the German media that he would be ousted as head of Porsche. The Financial Times (UK) reports that Bernd Osterloh, Volkswagen’s head of works council, had lashed out against Porsche’s management, saying they were “amateurs” and “arrogant upstarts”. But Mr Wiedeking has also fanned the flames by criticising Volkswagen’s management for some of their decisions. Relationships between Martin Winterkorn (head of VW) and Wendelin Wiedeking are cool to the point of frozen. Welcome to the Bobby Brown and Whitney Houston of the auto world!

Though GM’s new Cruze is likely to qualify for taxpayer funded “efficiency retooling” money, its predecessor the Cobalt is finally coming into its own. Automotive News reports that transaction prices and profitability are headed up for the Cobalt. Average transaction prices for the Cobalt rose $775 since mid-April, thanks to surging interest in one of GM’s most fuel-efficient cars. And the upswing in Cobalt-generated revenue is turning Detroit’s argument that it can’t make money on small cars on its head. GM’s marketing manager for small cars and crossovers, Brian Brown, says profits on the Cobalt are up six percent since 2007. “I don’t think anyone thought this shift of moving into smaller, more fuel-efficient vehicles would be as dramatic and happen as quickly as it did,” Brown tells AN. “I have to laugh: In the last 90 days, one of the top five trade-in vehicles for a Cobalt is an F-series pickup.” Please note that Brown is laughing about getting trade-ins from a competitor’s truck rather than his company’s total inability to see this one coming. GM added an extra Cobalt shift in August, to keep up with the 9.6 percent (supply limited) increase in Cobalt sales on the year, which still lag behind booming sales of Ford’s Focus. Sales are doubtless being helped by the addition of the fuel-efficient (25/36 mpg) Cobalt XFE model, while sales of fully-loaded models are helping profitability. Taken together, the trend is clear: well-equipped, fuel-efficient small cars can sell in volume and turn a decent profit. If only Detroit had realized this a decade ago. Everybody else did.

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.

FIAT and Tata have been cosying up to each other for some time. Ratan Tata was elected to the board of Directors at FIAT at Sergio Marchionne’s request, FIAT are looking to supply engines for Land Rover and Jaguar (A Jaguar XK with a Ferrari sourced engine? Fancy that!) and their joint ventures in India. But it seems, FIAT want a slice of Tata pie now (no, dirty jokes, please). The Economic Times of India reports that FIAT want to launch their version of the “world cheapest car” by 2010. However, Sergio Marchionne (FIAT’s CEO) didn’t disclose the price of the car. I’m no Sherlock Holmes, but I’m guessing it’s got to be less that Tata’s $2500 for the Nano, if it’s to qualify as “the world’s cheapest car”. Marchionne also didn’t say how it would be built, where it would be built, how much would be shared with the Nano, or how many Bothans died to bring us this information. Meanwhile, doesn’t Tata need to sort out its own production issues first?

Just when you thought it was safe to go back into the factory… As per normal, a contract is running out on an auto manufacturer and the UAW are planning on striking. But what makes this story unusual is that Detroit aren’t the auto maker in question. Mitsubishi are. Workers at Mitsubishi Motors’ only North American plant in Normal, Illinois, were instructed to pick up their picket times at the union headquarters, whilst negotiations were continuing. If an agreement is not reached by 23:59 on Friday, then, the strike will commence. Curiously, the union are playing their cards cautiously. Union bargaining chairman, Fred Morisette “couldn’t comment on negotations” and last month, the union held a strike authorisation vote, but hasn’t made the outcome of that vote public knowledge. 4 models are in jeopardy, the Eclipse, Endeavor, Galant and Spyder. But there’s little cause for concern. In August 2008, Mitsubishi Motors posted a 29.3% drop in sales (9200 units compared to 13020 units in August 2007). So they need to ramp down production little, don’t they?

Since being ousted from Tesla, Martin Eberhard has been thorn-siding the EV-makers in his Tesla Founders blog. Eberhard’s latest opus: a breakdown of running costs for the Roadster based on Northern California’s PG&E electricity rate structure. Eberhard has assembled a spreadsheet to evaluate and compare Elise-based EV running costs. The costs vary wildly, depending on whether the Roadster’s recharged during a standard-rate plan or a “Time Of Use” (TOU) plan, and whether or not the Roadster lover uses electricity to heat and cool their McMansion. Without solar panels, Eberhard calculates a Tesla Roadster costs PG&E users between two and six cents per mile (minus $102k msrp and insurance). His real world figure: about 3.6 cents per mile. In the comments section, Eberhard admits these numbers are higher than first indicated. “My first (naive) comments while at Tesla were between 1.5 cents and 2 cents per mile, if I recall correctly. These were just based on the lowest tier, off-peak rate for the E9 schedule. I didn’t take into account the impact of domestic consumption, usage that pushes you into higher tiers, or all the taxes and meter charges – these make a big difference.” A commenter points out that the official Tesla website still lists a running cost of “roughly one cent per mile” (though Tesla qualifies this claim with the usual “off-peak” and “your electricity rates may vary” boilerplate). If you’re a qualified spreadsheet monkey, follow the link to help Mr. Eberhard modify his template to include other local utility rates.

A carbon fiber Formula 1 machine can sprint from 0 – 120mph in less than five seconds and survive crashes at 100. Sadly, the price of the hi-tech material is prohibitively expensive, restricted use to racing cars, luxury bicycles, boats and aviation. Now that those planes are getting long in the teeth, a German joint venture named CFK-Valley Stade reckons it can recycle carbon fiber (CF) from old Airbus frames for automotive applications. The project involves 77 (count ’em 77) research institutes and a major waste disposal company. Dow Chemical will be joining CFK-Valley Stade to build a plant to recycle more than 1k tons a year, starting (you guessed it) 2010. The exact chemical process is complex/boring, but the CF is shredded and subjected to pyrolysis. The fibers are then isolated and combed. The finished product is sub-aviation quality, but a lot cheaper. For cars, recycled CF may be used for interior parts, gas pumps, body parts or exterior mirrors. A VW spokesperson says at the expected lower price, CF will drift from its present applications in the company’s Bugatti and Lamborghini brands down market, to VW (SEAT?). Is this the antidote to the sad tendency of car companies to think thin, but build fat?

Fresh from the quality gains made in recent surveys (some of which they bought and paid for), Ford isn't resting on its laurels. The Detroit News reports that The Blue Oval Boyz have committed to training seventy hourly workers from each of its United States' factories to become masters in six sigma, the "gold standard" in quality proficiency. "They are doing it during pretty hard times," says Harley Shaiken, a labor expert at the University of California-Berkeley "This would be an easy thing to cut." Don Lowery, a plant worker on the six sigma course, is a believer. "Before, I was just putting on car parts. Now, I get to deal with the finished product." Just for perspective, Chrysler CEO Bob Nardelli was a GE-trained, Six Sigma uber alles kinda guy, and we all know how that turned out…

As TTAC mentioned previously, the imperfect storm known as Hurricane Gustav is about to add to the perfect storm known as Detroit's annus horribilis. (O.K., Motown's blues have been at least three decades and 194 General Motors Death Watches in the making. But literary needs must.) The Detroit Free Press reports that the Cat 2 hurricane busy ravaging the Louisiana coastline will temporarily stifle a big ass chunk of America's oil supply. "Altogether, about 2.4 million barrels of refining capacity have been halted, roughly 15 percent of the nation’s total, according to figures from Platts, the energy information arm of McGraw-Hill Cos. The U.S. Gulf Coast is home to nearly half the nation’s refining capacity." Even if the oil industry can restart production more quickly than it did post-Katrina, pump prices are bound to be singing along with the Yaz. "As of midday Sunday, about 96 percent of the Gulf’s oil production and 82 percent of its natural gas output had been shut down, according to the U.S. Minerals Management Service, which oversees offshore activity." The Freep predicts a twenty cent– or higher– gas price spike.

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.

Think Australian cars and you're likely come up with three words: large, RWD, sedan. Well, Ford CEO Allan Mullaly has turned the land down under upside down by suggesting that the next Falcon might be a front-drive model. The Motor Report gasps at the announcement, but with the new Falcon FG selling slowly, it seems large rear-drive sedans are going the way of the SUV in this country. Mullaly's pronouncement that the decision would "be driven by what the customer wants and values" has Aussie hoons hoping they still have a chance to stop the cruel march of progress. In the real world, rumors that the new Falcon could be a global platform suggest that it will almost certainly be FWD. Mullaly also gently broke the news that in the long term, V8s would be less prominent in the lineup thanks to Eco-boost. Of course the quantifiable benefits of an FWD platform are numerous. Besides the greater global flexibility, an FWD model would offer more interior space and efficiency for less money. GM's Holden brand has probably saturated what few niche markets exist abroad for the Aussie formula of cheap-and-cheerful, drift-happy muscle sedans. In decisions which reflect their general strategies, GM has gone for the marginally-profitable gusto by bringing its Aussie RWD V8 sedan stateside as the G8, while Ford plays it safe by (probably) globalizing its Aussie throwbacks. From a business perspective, it's hard not to prefer Ford's approach. As an RWD nut, well… change can suck.