Chrysler is no longer "asking" suppliers for a five percent cost cut across the board– they're just taking it. More ominously, they've changed their payment terms. We just received this information from a reader (independently confirmed) who wishes to keep his name and company confidential for obvious reasons:

On June 3 we received revised purchase orders (PO's) indicating Chrysler will now be taking five percent off all PO's and will take 60 days to pay instead of 45. The trouble is they are doing it to all existing orders, not just future orders. I was told by Chrysler purchasing they were trying to keep their cash flow together and there was nothing they could do about the PO changes. I think that might be all for Chrysler unfortunately. They also told me the new rules were going to include PO's shipped after June 1 even if they hadn't bothered to change the order.

If Chrysler's cash flow is so precarious that they have to shortchange suppliers and take longer to do it, it doesn't bode well for the company's short-term prospects. It looks like the only thing that will pull them out of this death spiral is a healthy infusion of cash from Cerberus' deep pockets; the private equity firm isn't known for throwing good money after bad. Look for Chrysler to file for C11 before the end of August, when the statute of limitations expires for suing Daimler for false conveyance.

The Detroit News is running a guest commentary today by UAW President Ron Gettelfinger that's as humble as it is helpful. Which is to say not at all. It turns out Mr. Gettelfinger (along with his union) has been intrigued by the whole "building more fuel-efficient cars" idea for some time now. He wishes Detroit had been as far-sighted and sage as he. Gettelfinger doesn't exactly gloat at the Black Tuesday slashing, since it ain't exactly great news for the UAW, but he does blame "industry, government and concerned citizens" for failing to plan for current conditions. Gettelfinger's implication is that if Detroit and DC had listened to the UAW's "Marshall Plan for the U.S. auto industry"– which was proposed "back when you could buy gas for $1.50 a gallon,"– the current orgy of shutdowns and layoffs wouldn't be happening. So, besides offering economic aid and free-trade measures to form a European bulwark against postwar communism, what did this "Marshall Plan" entail? Predictably, the major parallel is that Gettelfinger's plan involves the Government giving away huge amounts of money, preferably in areas where the UAW can easily sponge it up. Rather than giving consumers a tax credit to buy any fuel-efficient car they want, Gettelfinger would rather see government incentives pay for the production of UAW-made eco-whips. He also trots out the weary canard that increased CAFE standards "unfairly" cost the D3 more than their Japanese competition, and that this should be mitigated by… more government "incentives." 

Well, Forbes has another one of its famous "lists of stuff." [Ed: I challenged them to send us a top ten list of their top ten lists. No dice.]  This time, the company started by the guy who collected anything that wasn't nailed down offers a list of the ten most reputable global companies. Apparently that means companies people like the most (as opposed to sue the least). Among obvious favorites like Google, two car companies have made the grade. India's Tata conglomerate, which just picked up Land Rover and Jaguar for a song is beloved. (Although it should be remembered that Tata makes all manner of products from steel to tea). And as irritating as it is to those of us "in the know", Forbes's research seems to suggest Toyota has an unending bag full of goodwill. Note to Toyota: don't get cocky. You can bet the 1960 version of that list would have included Ford and GM.

Talk about your diminished expectations… Post-Black Tuesday, GM CEO Rick Wagoner's told the world [via The Financial Times] that his employer has enough cash to make it through '08. And while you're filing that under "methinks he doth protest too much," Wagoner defends GM's (and the rest of the 2.8's) reliance on big trucks and full sized SUVs by… pointing a finger at Toyota. By his way of thinking, you can't blame Detroit (i.e. him) for missing the SUV and pickup truck exodus because Toyota got caught building a new truck factory at the wrong time. Huh? Toyota added a full-sized truck to its product portfolio to compete vigorously in one of the few segments of the market where they were weak. (Lest we forget, they built the Prius in record numbers at the same time.) Sure it turns out that Toyota's Tundra timing was off, but they aren't at risk of closing up shop because of it. Bottom line: ToMoCo books more profit in one year than GM's entire net worth. Comparing GM's management decisions to Toyota's is patently absurd. Will no one rid us of this troublesome man? 

U.S. automakers aren't the only ones struggling to keep their costs in line. BMW needs to shed 8100 "excess" employees to achieve their planned 500 million Euro cost-savings. Automotive News' [sub] sources vary on how many workers have signed ominously named "termination agreements." BMW claims 5k workers have left the building. Other analysts claim that just over a thousand BMW workers chose to put an "ex" in front of their job description. Further complicating Bimmer's best laid plan to trim expenditure: raw material costs just keep on a rising. We told you a few days ago how the price of steel has doubled. That's going to hit companies like BMW hard, as their cars weigh so damn much. Meanwhile, BMW's lucrative American pie ain't sweet like it once was. The dollar is down, gas prices are ridiculous, and U.S. consumers aren't buying as many cars as they once were. It may not be the ultimate headache, but put it all together and it's got to hurt.

When Fred Bredermeyer was 18, Chicago's Nikko Hotel gave him a job as a parking attendant. Little did the Indiana native know that he was about to embark on a career that would earn him the ultimate accolade from The International Parking Institute. Not only did Fred get the nod, but his department– the Miami Parking Authority (MPA) won "2008 Parking Organization of the Year." Obviously, I had to call Fred to congratulate him on his victory and find out what it takes to stand at the pinnacle of parking profession. There's lot of blockbuster info in the podcast, but here's a couple of off-the-air tidbits. Fred doesn't know if the Sunshine State's license test includes parallel parking and "Miami doesn't have a parking problem. It has a walking problem." Oh, and I forgot to tell Fred that "put my money in your meter baby, so it won't run down" is one of my favorite lyrics of all time. So now he knows.

Our fearless leader was not the only one who finds fault with the fact that GM CEO Rick Wagoner raked-in over $14.4m during a year when his employer lost some $38.7b. Automotive News [sub] reports that shareholders at yesterday's annual meeting attempted to inject a measure of sanity into GM's executive compensation. And failed. A proposal to give shareholders an annual "advisory vote" on executive pay and bennies received only 32 percent approval. Another proposal would have tied 75 percent of future stock options and restricted executive stock awards to GM's share price, market share and credit rating. Nope. That one received only 16 percent approval. A measure giving shareholder cumulative voting passed. Again. The same proposal passed in 2006… This time 'round, CEO Rick Wagoner passed the proposal to the board's corporate governance committee for review. But then, when the board has your back, why should you care about the stockholders? “And since we’re asking rhetorical questions, are there any remaining reasons to hold GM stock?” 

Chrysler has reported its May sales stats, and it's an ugly picture: overall sales fell 25 percent from last year, to 148,747 units. The Sebring is down 30 percent, the "company saving" 300 fell 59 percent, and the crotchety PT Cruiser slid 48 percent. Overall Chrysler brand sales nosedived 38 percent. Aside from the Patriot (up 82 percent), Jeep's peaked. Every other Jeep product saw double digit declines: Compass (-17), Grand Cherokee (-23) and yes, the Wrangler (-25). Dodge also died a death. While the Caliber was up seven percent, everything else cratered. The Charger faltered (-25), the Avenger retreated (-26) and the Caravan blew town (-25). Obviously all the trucks are getting trashed, from -37 percent for the Ram to -69 percent for the Durango and -56 percent for the Nitro. The only silver lining: The Dodge Boys sold 7520 units of the new Journey (with or without puddles). If they keep up the big mo, they're looking at 87k p.a. (yes, I have a calculator). Co-Prez Jim Press put a brave face on the results, claiming "it's alright Jack keep your hands off my stack." Just kidding. (Or not.) ChryCo's "determined to provide consumers what they need and want." So keep the 300 (available with SRT looks but without the crazy engine) and Charger, Patriot, Wrangler, and Grand Cherokee and Sebring convertible. Everything else has got to go. 

One knee-jerk reaction begets another. As reported yesterday, the Canadian Auto Workers (CAW) wasn't over the moon over the announced closure of GM's Oshawa truck plant. Note: Oshawa IS General Motors. Chevrolet's had a plant in the city since the early 1900s, before Oshawa itself was incorporated as a city. The local hockey team is named for GM. GM-Oshawa employed 2600 direct workers, and no doubt accounted for thousands of other peripheral jobs. So when GM CEO Rick Wagoner sounded the plant's death knell, the CAW's members immediately declared war. Today, CTVNews reports that defiant CAW members, fueled by a desperation that only comes when one has nothing to lose, are blockading the offices until further notice. There's no news of reactions from workers at the other Oshawa plant where they build Chevy Impalas and Buick Lacrosses/Allures. Meanwhile, Toyota and Honda, just as recently as last month, announced billion-dollar investments in Ontario. Hyundai/Kia is also considering moving in. Of course, we all know this story, don't we? Soon, Ontario will be another theatre of war that The General will cede to the Asians, during its long, tragic descent into oblivion.

Tata Consultantcy Services may regret their contract to take over Chrysler's information technology (IT) services. Automotive News [sub] reports that Chrysler "asked its non-production suppliers for a 5 percent across the board cost reduction" effective June 1 and effective for one year. "Non-production suppliers" are those providing IT, administrative, custodial and other support services not directly involved with producing automobiles. A statement from Chrysler explained their "recent decision to enact a 5 percent cost reduction on non-production materials and services is part of Chrysler's ongoing efforts to reduce its cost footprint in a highly competitive marketplace." From what we've seen, these "ongoing efforts" also include stiffing delaying payments to some suppliers and asking others to take a 25 percent cost cut. Some of these beleaguered suppliers can't take beatings like this much longer before they follow Plastech into Chapter 11. But maybe that's what Cerberus wants, because it would give them an excuse to take Chrysler in the same direction. 

AutoWeek's Dutch Mandel thinks GM has got it sussed. The mag's Editor & Associate Publisher is full of praise for The General's decision to shut down truck plants, kill Hummer and ramp-up car production. Mandel calls the plan "a brilliant tactical move." That's because it "telegraphs a message that this company understands life as we have known it has changed." (What was their first clue?) Dutch then pooh-poohs the notion that consumers should change/are changing their driving habits. It's better for a "big-time corporate CEO to be proactive and go with the flow of consumer sentiment." He's obviously confused about the difference between being proactive (which implies anticipating a problem and taking steps to avoid it) and a knee-jerk reaction in response to a sudden "oh shit!" realization that you'd better do something fast because you're going down the toilet. Nevertheless, Mandel "applaud[s] all who put collective heads together to make this tough decision– Rick Wagoner, Fritz Henderson, Bob Lutz, all the way down the line." How come GM doesn't list its advertising budget as a PR expense? 

As you can imagine, GM's decision to close their Oshawa truck assembly plant in Ontario, Canada doesn't set well with the Canadian Auto Workers (CAW). "It's nothing short of betrayal," CAW Oshawa branch president Chris Buckley told Reuters. "General Motors is going to produce our truck in Mexico and the United States. That's absolutely disgusting." If he's looking for the real betrayal, he should think back to the contract negotiations in May, when CAW president Buzz Hargrove took a hard line stance against contract concessions, making Canada the most expensive place in North America to assemble cars. Or recall Buzz' statement that "It's my last set of negotiations and my legacy is not going to be that the sons and daughters of current workers that were hired over 20 years ago are going to come in at the same rate in 2008 as their parents did in '86 or '87." It now looks like Buzz' legacy will be unemployed sons and daughters of current workers thanks to his inflexibility driving production out of Canada and back to the lower-paid hands of the UAW and Mexican auto workers. Just sayin'.

Two hours.  Thats how long I spent detailing the engine in my Hummer H3 from Budget Rent-a-Car. I spent another 2 hours detailing the rest of the car and discovered how dirty rental cars really are (how old ARE those M&M's?). In the summer, when I'm not racing my Porsche Boxster S, I'm at a car show, showing it off with my other racer friends and their BMW/Audi's. Replete with racing numbers, sponsor decals and helmets, we put on quite a different show from the normal pristine examples of automobilia from decades past. However, due to my Porsche being in the body shop, I was left without a car for last Sunday's Car Show in Oklahoma City. Over coffee, I came up with the brilliant idea to RENT a car at the airport, detail it, and see how it would do against all the other vehicles there, just for fun. At the Will Rogers International Airport, I was presented with three options, a Mustang V6 Coupe, a Mitsubishi Eclipse Spyder, or a Hummer H3. The H3 was the cleanest, so $75, rental insurance and a distorted sense of reality and I was in with a chance! $25 in cleaning supplies later, I had the most pristine rental car in the MidWest. Several hours later, I was holding a plaque declaring my Hummer H3 had received first place in the truck category at the show. So if you want an award winning show car, call up Budget in Oklahoma City, they have one for rent…

This year's trend towards– let's face it folks– inflation continues. Just as our bodies are 75 percent water, the average modern car contains 2400 lbs. of steel; the average SUV is comprised of 3000 lbs. of the stuff. In late 2007, steel was selling for $535 a ton. Today? How's $1,035 per ton grab you? It's grabbing steel execs you know where. No, there. According to Automotive News, tensions are rising as steel makers tear up contracts. They're demanding more money from automakers, who are of course resisting. Regardless, ArcelorMittal, the world's largest steel maker, is about to impose a $250 per ton surcharge. That's about 20 to 40 percent over what current contracts stipulate. Long story short, look for the price of your next car to be about $500 higher. Also, this might be a great time to invest in carbon fiber futures.

It's officially official and completely complete. Ford has finalized the sale of Land Rover and Jaguar to Tata Motors. And boy are they not excited! In fact, the last sentence of the terse, four paragraph press release reads exactly like a rejection letter: "Ford Motor Company wishes the Jaguar Land Rover management team, its employees and the new owners every success for the future." Automotive News [sub] reveals that David Smith is the new boss of the two former Ford-owned rejects millstones automakers. "Smith is Jaguar and Land Rover's chief financial officer. He has been the company's acting CEO since the April 20 death of CEO Geoff Polites." So, steady as she goes? Yeah right. Anyone want to make any guesses on how long it'll be before we start seeing Tata's influence on the model lineup and the "Jaguar Land Rover management team?" Or they move production from Merrye Olde England to India? Meanwhile, Detroit's profit-drunk SUV party is now, officially over.