There's an old Jackie Mason joke, "I love Puerto Rico. I go there every year– just to visit my hubcaps." I mention this funny/racist joke because gasoline prices have more than doubled in the last four years and the money's going… where exactly? Sure, Exxon Mobil and their oil baron friends are posting quarter after quarter of historic record profits. But how many cigars can you light with a $100 bill? Someone else must be getting fat and happy too, right? Right. Investment adviser, Ron Paul fan and economic blogger Michael "Mish" Shedlock posits that a lot of the oil revenue is headed towards the UAE's capital city. How much oil revenue? Only about six percent of the UAE's take home comes from actual oil. However, the JAFZA free trade zone offers many perks for those with huge surpluses of cash to, uh, invest. Check it: come 2009 Dubai will feature the world's tallest building (The Burj Dubai — 2,684 ft), the world's tallest structure (The Al Burj — 3,937 ft), the world's tallest hotel (The Burj al Alam — 1,644 ft), the world's first underwater hotel (Hydropolis), the world's biggest amusement park (the Disney World trumping Dubailand) and even more indoor skiing. Not to mention the world's largest waterfront and hundreds of luxury man-made islands. Let's put it this way: Dubai is home to about 20 percent of the world's [mechanical] cranes. Have a look.

Belvidere has been down since early Wednesday morning due to a broken gear in a press in stamping area. Trucks came and removed the dies and such to other Chrysler stamping facilities. There were a lot of trucks though. More than I would imagine would be needed for one press and its dies. Is it possible they are pulling out all stamping? Is it possible they may close the doors at the Belvidere facility? Nobody knew anything on Tuesday, yet the union seemed to know we would be off at that time without notifying the workforce. I can't get any info. I know they have bounced checks and aren't paying suppliers. They intend to cut one shift next Friday. Their supply of vehicles is much higher than that posted on your site. Chrysler bullshit. That's what it is most of the time.

Audi is in a quandary. Just Auto [sub] reports that the German automaker has reached their quota of SUV names starting with "Q." Nissan quarreled over Ingolstadt's use of Q7 for their Toureg/Cayenne-based SUV, claiming it impinged on the quintessence of their Infiniti "Q" model names. Then Nissan quickly reached an agreement to let Audi use Q5 and Q7. But Nissan now wants to quell Audi's plans to add Q3 to their model queue, saying it's time for them to remain quiescent. Audi has no qualms about pressing on, saying they've had quiet discussions about achieving their quest for the Q. Only one question remains unasked: when it comes to increasing the world's quantity of SUV's, why doesn't Audi just quench their plans and call it "Quits?"

"So many vehicles are being snatched from owners who stop making payments that some repo operators and auto auctioneers say lots are overflowing." This from USA Today; another sign that the U.S. automotive market is headed for the buffers, Big Style. Thomas Webb, chief economist Atlanta-based Manheim auctions, says that repos will rise 10 percent this year– for the second straight year– to 1.6m vehicles. As TTAC warned at the time (and subsequently), Webb says "overly generous" auto loans in the past couple of years are driving-up defaults, leading to a surge in repossessions. Last month, Wells Fargo wrote off $1b in auto loans, compared with $857m in '06. The new figure represents 3.5 percent of its portfolio; the bank says it expects a higher write-off rate this year. As repos increase, they flood the market with used cars, lowering residuals, trapping more and more customers in "backwards" loans. Burned banks (and credit companies tied to automakers) also raise their rates, making it harder for carmakers to move the metal. One part of a perfect storm? 

It sucks to be a parts supplier to the auto industry. The Houston Chronicle reported yesterday Blue Water Automotive Systems filed for Chapter 11 bankruptcy protection. CEO Michael Lord said this would give the thermoplastic auto-parts manufacturer "the breathing space necessary to continue its operations while reviewing all aspects of (its) businesses for reorganization." They'll be assisted in their efforts by a $1.4m "progress payment" from their largest customer, Ford. There was no indication whether Blue Water's actions would affect Ford's assembly plants. Meanwhile, the AP (via MSNBC) reports spokesmen for Ford and GM told the court handling Plastech's bankruptcy that they support Chrysler's move to get their tools back from the floundering parts company. Neither company has experienced any disruption in their Plastech parts supply, but they're not taking any chances. GM spokesman Frank Sopata told the court "GM does strongly support Chrysler's position regarding the tooling since we have entered into the same agreement as Chrysler and the other major customers of Plastech to reclaim our tooling should it be necessary." What's the bet they'll find it "necessary" very soon?

Claiming that America's economy is lurching ever more quickly from economic bubble to economic bubble, the founder of iTulip predicts a surge in alternative energy and infrastructure spending – sort of a green bubble. Writing for Harper's [sub], Eric Janszen defined the main economic drivers of "the cleantech bubble:" the need to recover from recession, weakness in the dollar, loss of petrodollar liquidity, loss of energy security and peak cheap oil. As a result, consumers will be faced with a bewildering array of fuels and vehicles: biofuels, electric vehicles, plug-in hybrids, hydrogen fuel cells, photovoltaics, wind turbines, ocean wave energy, geothermal energy, clean coal and even nukes. Janszen sees these technologies becoming the hot, overvalued commodities of the new bubble. At the same time, he predicts corporations will plan and (God forbid) implement the new energy infrastructure to power expensive new vehicles and public transit. Responding in the Association for the Study of Peak Oil & Gas – USA , commentator Dave Cohen notes that venture capitalists (VC) are already looking to invest in what they call “the largest economic opportunity of the 21st century.” Fortunately for cutting edge companies like Tesla Motors, there's a VC born every minute.

For want of a nail, the battle was lost, and for want of a gear the plant was idled. The Chicago Tribune reports this week's cessation of activities at Chrysler's Belvidere assembly plant was due to a broken gear in a stamping press used to make body parts. Belvidere's boffins are taking the dies from the press to another location to try to get the lines moving while they effect repairs. Apparently, no replacement parts for the broken gears are available, and no one at The Crisis Corporation will give an estimate on how long the repairs will take. This is the third time the plant has been idled. Chrysler shut down the plant in January "to adjust inventory." Last week, the Plastech parts embargo idled lines. As several TTAC commentators have pointed out, Chrysler is not exactly hard pressed to get the presses pressing. At the beginning of this month, they had a 45-day supply of Calibers, a 75-day supply of Compass' and an 83-day supply of Patriots. 

Ever since Cerberus bought Chrysler, they've said they're in it for "the long run" in spite of the private equity firm's reputation as a "strip and flip" operation. On the other hand, we've maintained they'll unload the moribund automaker ASAP, in spite of what the three-headed-dog keeps barking. Apparently Bloomberg agrees with us. In an article about Nardelli's draconian measures to make the company profitable, the news org declares "Cerberus, a private-equity firm, would like to make a profit by selling Chrysler within two or three years. That means turning the ailing automaker into a tightly managed operation that generates cash instead of burning it." What's not clear: if the "two or three years" begins now, or if it started at the time Cerberus took control last May. Either way, look for Chrysler's sale to open the door to the U.S. market for a Chinese or Indian automaker.

The Detroit News reports that Senator Clinton spent part of her pre-primary warm-up touring a plant in Maryland that builds transmissions for GM's full-size hybrid and heavy-duty trucks. The presidential candidate immediately began touting her plan to create five million "green-collar" jobs. To that end, the Senator from New York pledged to give $5b of your hard-earned money to automakers for battery research, and provide $20b in "green vehicle bonds" for automakers wishing to retool elderly factories (i.e. Ford, GM and Chrysler). Ms Clinton also promised $10k in tax credits for plug-in hybrid buyers. All of this in addition to the $8m the Washington Post says Ms. Clinton's secured for GM for "alternate fuel research;" $3m of which was buried in the fiscal 2008 Pentagon spending bill. Coincidentally enough, the Post also reports that GM lobbyist Steve Ricchetti is one of Hillary's fund raisers. Senator Clinton's campaign spokesperson said Ms. Clinton doesn't consider fundraising efforts when she's making official decisions. Apparently, "one thing has nothing to do with the other."

GM is expected to announce greater-than-predicted fourth-quarter losses for their North American unit later today. While the exact figures aren't available yet, experts predict GM will report a loss of 64 cents a share, compared with earning 32 cents a share in the same quarter of 2006. Bloomberg cites "two people familiar with the [fourth quarter] results" who say the losses were due in large part to an upsurge in incentives in the fourth quarter as they tried to keep up with Toyota. Credit Suisse analyst Chris Ceraso concurs. "Higher incentive spending outweighed better than expected volume and mix" in GM's North American operation. They seemed to forget that Toyota had plenty cash on hand to fund the average $6.4k rebates on Tundras while they could ill-afford the average $6k they slapped on the hoods of their pickups to keep them moving. The exact damage to GM's bottom line will be announced later today. Watch this space.

UPDATE: Well, folks, it was far worse than anyone expected. MSNBC reports GM had the largest annual loss ever reported by an auto company: $38.7 billion; GM's previous record was $23.2b in 1992. In the fourth quarter alone, they lost $772m. Part of the loss was from their share of GMAC, which cost them $1.1b. GM also announced today they're following Ford's lead and offering buyouts to all 74k of their hourly UAW workers so they can replace them with lower-paid workers under the new contract.  

The AP reports [via the Dallas Morning News] that Hugo Chavez has threatened to launch an “economic war” and cut off oil sales to the United States. “Take note, Mr. Bush, Mr. Danger,” the Venezuelan President intoned. Chavez is responding to Exxon Mobil’s attempts to seize billions of dollars in Venezuelan assets, to compensate for the South American country’s nationalization of the multi-billion dollar Orinoco oil project. "The outlaws of Exxon Mobil will never again rob us," Chavez promised. Meanwhile a British court has issued an injunction "freezing" as much as $12b of the assets of Petroleos de Venezuela SA, Venezuela’s state-run oil company. The U.S. imports some 12 percent (1.23m barrels per day) of its oil from the Bolivarian Republic of Venezuela. Oil prices are expected to spike on the news.

Jerry York doubts Chrysler will make it on its own. According to Reuters, the former Chrysler CFO and GM Board member reckons "Chrysler as a stand-alone company is not viable." York doesn't believe Chrysler will last another five to ten years as an independent automaker. Flashing back to comments he made last November, York also said he thought Cerberus would "go as far as they could in terms of fixing [Chrysler] up, but then ultimately recognize that the company would have to be merged with a foreign producer." Although Chrysler has yet to announce the ten plus models it will slice from its lineup, York thinks Jeep will emerge from the bloodletting with just the Wrangler and Grand Cherokee. Coincidentally (or not), India's Economic Times reports Mahindra & Mahindra (M&M) is "reportedly in talks with Chrysler [to buy] its iconic Jeep brand." M&M would neither confirm nor deny the rumor, but the company began life as a Jeep licensee. And vice-chairman Anand Mahindra stated, "This is a great time to use Indian chutzpah, the strong PE ratio and rupee to buy American manufacturing assets." It's only a matter of time– and not much of it– before Cerberus begins its long-awaited strip 'n flip. 

Automotive News [AN, sub] reports that Chrysler is stepping-up– as in scrapping and starting again– its plans to trim products and dealers. Much to Hyundai's delight, the new new plan is called Project Genesis. And in the beginning, there were three brands, 28 models and 3600 dealers. And lo, Chrysler decided to place all three brands (Dodge, Chrysler and Jeep) unto one dealership and, uh, "eliminate duplicate models on the same platform." Oh, and also "develop new ones in segments where it doesn't have current entries." To get the dealers on board (toss them overboard?) Chrysler is sending out its emissaries. "Business teams will descend [from on high] on those cities to help dealers arrange to buy or sell franchises to make the consolidation happen." And they means business. "Chrysler will then hold individual meetings with dealers and review whether they want to be a willing buyer or willing seller." On the other hand… "Project Genesis will not be a 'push program,' and there will be no deadlines or timetables. Nor will the company open the Cerberus bank account to dealers, Press said." So, how will Chrysler coerce dealers to buddy-up or die? Hell if I know.

Just four days after Plastech's parts embargo shut down Chrysler factories, just eight days before the two companies' interim agreement is set to expire, Chrysler's CEO is deploying the same sort of charm offensive that made him so popular at Home Depot. "This was not hard-ball tactics, it was a solid business practice," Nardelli told reporters at the Chicago Auto Show. "We never meant to create an adversarial relationship with Plastech or any other suppliers." In other words, hey, it's just business. "We have to stay competitive. Our customers expect that. Obviously if [Plastech's] not financially sound, we certainly aren't in the business of subsidizing. No hard feelings, no animosity, just solid business practices." No subsidizing eh? The Detroit Free Press reports that Chrysler resolved the Plastech missile crisis by agreeing to pay some its bills "early;" an undisclosed portion of a $23.4m early payment cash infusion. It's a dangerous precedent that could consume Chrysler's cash pile. Meanwhile, Nardelli says Chrysler will continue to remove its parts contracts from Plastech. Somebody send that man a copy of "How to Win Friends and Influence People," STAT. 

Ford will build the Verve (or whatever they end up calling their subcompact) in Mexico. And we know this because…? The Detroit Free Press reports "two people with knowledge of Ford's production plans" told them so. Although Ford refuses to identify the location of their new subcompact's fabricator, it appears the concessions given by the UAW still don't make a U.S.-built economy car a profitable proposition. Global Insight's NA light-vehicle production manager doesn't see "Made in America" making a comeback anytime soon. "In general we see capacity in the U.S. dropping," Haig Stoddard advised. "And continuing to gradually rise in Mexico." That's at least until the automakers replace most of their older UAW work force with cheaper new hires. But even at the lower $14.20 per hour rate, American workers still make a lot more than their Mexican counterparts. Between that and the Mexican government's willingness to contribute incentives, well, it's a slam dunk. No matter where it's made, Ford needs the Verve ahora. ¡Ándale!