In a severely under-capitalized (in the lexicographical sense of the word) press release, GM has announced that it's booted chief financial officer Fritz Henderson upstairs. At today's meeting of the company's board of Bystanders directors, Fritz officially became GM's president and chief operating officer. Even though GM's busy cutting jobs (and how), Fritz' new post is an exercise in executive job creation. Rick Wagoner explained/justified it thus: "There's a lot going on at GM today… It's an opportune time to further bolster our top leadership structure; specifically, it's the right time to reestablish GM's traditional President and Chief Operating Officer position." The President of the board couldn't agree more. "The GM board is excited about the direction that GM is headed," George Fisher opined. "Tremendous progress has been made… these executive appointments will further support our business strategy and the work that needs to be done to achieve our growth, technology leadership and financial objectives." Uh… is it too late to reconsider that Bob Lutz award?

The Economic Times of India reports that Tata's any-day-now-they-swear $2b acquisition of Land Rover and Jaguar has been delayed by the Unite union's insistence that Jag continue to source powertrains from Ford's UK plants. (The two brands will be kept as a single package because Jag and Landie share UK-sourced powertrain components.) Ford PR flacks aren't concerned that these unresolved issues may prevent the deal from going through by the projected March fifth deadline. "There will be a strong relationship between Ford and Jaguar-Land Rover post the sale, so it's important any agreements are fully understood by all the parties and work to the mutual benefit of all concerned. However, this shouldn't be seen as a delay or issue or roadblocks in the process." This should probably be taken with a grain of salt, considering Ford previously claimed the announcement had been held back "so as not to overshadow the launch of the new Fiesta at the upcoming Geneva Auto Show." Insert mirthless laugh here.

With the UAW less than a week into its strike at American Axle (AA), International Business Times reports parts shortages are set to idle a fifth GM truck plant sometime this evening. The Moraine, Ohio plant which manufactures Chevy Trailblazers and GMC Envoys will not be closing its doors; management told workers to report to their normal shifts for training. Striking union leaders at AA's Three Rivers, Michigan plant reported over the weekend that they are "ready for serious bargaining at any time." GM is unlikely to lean on either AA or the UAW for a quick resolution, considering their huge overstocks on nearly all of the truck-based models made using American Axle parts. J.D. Power notes that Envoys sat on dealer lots for an average of 59 days before sale in the December-February period, while Trailblazers languished an embarrassing 75 days. Without real leverage, the onus is on the United Auto Workers to explain to its 3,600 striking AA employees why it's worth disrupting production at plants which collectively employ over 12k union brothers and sisters.

Americans grumbled but they paid $2.00, and then $3.00 a gallon gas. Economists who study such things say U.S. drivers in a growing economy simply endured those price spikes, spending less elsewhere rather than changing their driving habits. But now, according to The Wall Street Journal [sub], those same economists see a broadly-troubled economy in which everything from food to health care costs more. The shift in both perception and reality is finally forcing Americans to drive less, and even to take (gasp!) public transportation. To wit: domestic gasoline consumption declined by 1.1 percent in the past six weeks. Lehman Brothers analyst Adam Robinson calls the potential for a long term conservation effort by Americans, "a major structural change in the market." Peak Oilers call it, "demand destruction." The working poor call it "more of the same."

No question: The Big 2.8's supply chain is in disarray. Plastech, Delphi, American Axle– these are just three of the U.S. parts suppliers already in bankruptcy, with fully 25 percent of other major domestic parts makers teetering on the edge of Chapter 11. The domestics are operating on the assumption that the faster they outsource their parts production overseas, the better. Speaking to Automotive News [sub] analyst John Casesa warns that Chrysler's new purchasing czar John Campi's rush to confront domestic suppliers (Plastech) and seek low cost foreign replacements may not be such a good idea– especially when seen in historical context. "In the early 1990s, former GM purchasing chief J. Ignacio Lopez proved that point. When he bid out proprietary part designs to garner the lowest prices, Lopez launched a brutal price war that created lasting animosity between GM and its suppliers. The industry is still struggling to heal the wounds." And speaking of war, does it really make sense for the domestics to combine Just in Time production and long, long supply lines in this time of crisis? As Toyota's quickly resolved Tundra problems show, it's best to keep your friends close and your suppliers closer. 

Who is the most deserving of the first annual Bob Lutz Award? We're looking for the automotive executive who said the most outrageous, politically incorrect or just plain dumb thing. Since this is the first time for the award, we've allowed nominees from the past; next time we'll limit it to the past calendar year. Click on the link below to cast your vote. The nominees are listed in alphabetical order along with an example of why each was nominated. (Yes, I know I said I'd list all the quotes that got them nominated on the ballot, but when I did one nominee had said so many different things the ballot went off the screen.) Only one vote per customer, please. Voting will close at 6PM EST Sunday, so don't procrastinate.

Voting has closed. The results will be posted today. Thank you for your participation. 

Three GM truck plants will shut down around midnight tonight because of the strike at American Axle. Automotive News [AN; sub] reports about 9,500 workers at the Fort Wayne, Flint and Oshawa plants will be idled, in addition to the 2,500 workers who went home from the Pontiac assembly plant earlier this week. GM wouldn't comment on whether or when the pickup plant in Silao, Mexico would shut down. They project the plant at Arlington, Texas will continue production until mid-March. Arlington builds Suburbans, Tahoes, Yukons and Escalades; the other plants build Silverados and Sierras. With inventories well in excess of a 100-day supply for all these models, GM isn't sweating it. Yet.

On a you-can't-make-this-up page of news briefs from Moscow News Weekly (featuring such hilariously Russian headlines as "Newborn Babies Dumped In Chelyabinsk's Trash" and "Lemur Smugglers Caught In Southwest Russia") comes a little warning to companies looking to cash-in on Russia's booming car market. Thirty-six-year-old Vyaches­lav Shirshov was found stabbed to death in his apartment in the town of Tolyatti. Shirsov was the head of procurement for the enormous AvtoVAZ group, known to the west as the makers of the infamous Lada. The responsibility of choosing raw material suppliers is a risky proposition, at least in Russia, as investigators are pointing to Shirsov's job as the likely cause of his untimely death. The news brief concludes by stating that Tolyatti "has a reputation for turf wars between criminal gangs seeking control over the lucrative auto industry." As GM has been in business in this quaint little burg since 2001 (jointly manufacturing the Chevy Niva with AvtoVAZ), it has no reason to worry about it's recently announced joint venture just up the Volga in Nizhny Novgorod. I'm sure it's figured out whom to bribe by now.

Troubled Chrysler supplier Plastech's bankruptcy proceedings just got a little more complicated. Automotive News [AN, sub] reports that Johnson Controls Inc. (JCI)– which accounts for over half of Plastech's $1.4b annual business– filed a motion yesterday to force the plastics manufacturer to either accept or reject their sourcing agreement. In the motion, JCI claims that Plastech is incapable of producing the 6000-odd parts it sells to Johnson at the agreed price; an issue which has forced JCI to "bail-out" Plastech several times in recent years. Although firms in bankruptcy usually take several months to arrange a reorganization plan before accepting or declining contracts, JCI argues that it can't afford to wait. "If the debtor cannot assume the (agreement) and perform according to its terms, the debtor cannot reorganize." The key issue appears to be Plastech's ability to secure capital coming out of bankruptcy. JCI, Chrysler and other Plastech customers have made it clear that they will no longer pay out lump sums above the negotiated cost of sourced parts. Meanwhile, Plastech's $31m line of credit is nearly gone. The firm has 15 days to respond to JCI's motion. This is getting really ugly really fast.

Back in the day, Toyota used local businessmen to find dealers and deal with local politics. ToMoCo eventually bought its distributors, save Southeast Toyota in Florida and Gulf States Toyota in Houstonm (who still control prices, model mix and availability in 10 states). In the '90s, Southeast shelled-out more than $100m to dealers who claimed the distributor was forcing them out of business. CNNMoney reports that Gulf States is now under the gun for "improperly encouraging" executives from a large dealer group to leave their company and buy a lucrative dealership in Dallas. Toyota continues to defend its distributors, claiming they "bring a culture of innovation, responsiveness and agility." What's more, consumer prices "are the same" or "even more competitive" than prices in regions where there are no distributors. If there's anyone who can give your perspective on dealing with a Toyota distributor, please contact us.

In a previous Wild Ass Rumor of the Day, we asked "GM wouldn't be stupid enough to try to pay all [Delphi's bankruptcy] debt, would they?" It was meant to be a rhetorical question. Dow Jones reports [via CNNMoney ] that The General is "exploring alternatives" that include "providing an additional significant portion of Delphi's exit financing" in their annual report filed yesterday. The filing also said they're willing to reduce their share of the cash distribution they could receive in the bankruptcy settlement and "and accept an equivalent amount of debt in the form of a first-lien note." The amount of this particular portion of GM's cash conflagration is not known. But it doesn't matter whether The General shells out more cash or goes deeper in debt– neither alternative bodes well for the GMs financial health or stability.

While not making draconian cuts like The Big 2.8, BMW is reducing their work force to lower their overheads. The Detroit Free Press reports that the Bavarian automaker is cutting an additional 5.6k jobs this year. That's in addition to the 2.5k positions they've already eliminated. By the time they're through showing workers the door, Bimmer will have trimmed 7.5 percent of their worldwide workforce. The move comes in response to Chief Executive Norbert Reithofer's commitment to increase the company's "rate of return" (which made the exec queasy and left the money men a lot less than impressed). Ernst Baumann, BMW's head of personnel, said the job reductions will end-up costing in the "three-digit million" euro range for severance pay, benefits and other expenses. He also warned that if the dollar continues to fall, more employees would get the old heave-ho.

The United Auto Workers (UAW) strike at American Axle is starting to take its toll. According to the Detroit Free Press, the axle shortage has caused GM to halt production at the end of the first shift at Pontiac Truck and Bus plant. The Pontiac plant makes Chevy Silverados and GMC Sierras; thanks to a healthy inventory (153-day supply of Silverados and 152-day supply of Sierras) and continued production through the month, there's plenty of product on dealer lots to see them through the next few weeks. However, as the strike shuts down other plants, other suppliers will start to shut down or cut back production to match the diminished demand. Although GM accounts for 80 percent of American Axle's business, they also supply axles for Dodge Ram pickups (122-day supply). No word on how the strike will affect Dodge's assembly plants. But the question of the day (for now) is this: with 25 percent of Detroit's large suppliers in or teetering on the brink of bankruptcy, will one (or more) of them kill the golden geese?

Hollywood has the Oscar. Nashville has the Grammy. Broadway has the Tony. And TTAC has the "Lutzie." The Lutzie is our award for the industry executive who made the most outlandish statement or statements, demonstrated a total disconnect with reality and/or inserted their pedal extremity firmly into their oral cavity with alarming regularity. We're looking to you for nominations, starting today. Tell us who you think is most deserving of the award and give us a quote that illustrates their worth in a comment below. We'll take nominations until 6 PM EST Wednesday and open the final voting on Friday. Voting will end 6 PM EST Sunday and we'll announce the winner Monday. And yes, GM Car Czar Maximum Bob Lutz is eligible. 

Nominations are closed.  Voting will  start Friday morning and run through 6PM EST Sunday.  Results will be announced Monday Morning.

Thomson Financial News [via CNN Money] reports that GM will announce a joint venture with the GAZ Group of Russian oligarch Oleg Deripaska's Basic Element company. The team plan to build the Chevrolet Lacetti (Suzuki Forenza/Reno) at a factory based in Deripaska's home oblast of Nizhny Novgorod. The plant will initially produce 50k of the Daewoo-designed vehicles per year, increasing to a planned to 300k units p/a. Basic Element, will invest a billion dollars in the project. This is not Deripaska's first flirtation with the American car industry. Last May, he bought a $1.5b stake in Magna International, a move which allowed the Canadian company to tender an ultimately unsuccessful bid for Chrysler. Despite his new joint venture with GM and a crucial stake in Chrysler's supply line, Russia's youngest and richest billionaire in Russia isn't allowed to visit the United States due to "suspected links to the criminal community" Given this inconvenience, Mr. Deripaska will likely look once more to Magna to act on his behalf when American automakers start holding holding pre-bankruptcy fire sales.