In the same week BMW revealed a one-off, 580 hp, 100+ lbs lighter “M5 CSL we never built” (in the words of the M division’s head of development, Albert Biermann), BMW USA’s VP had this to say about his firm’s absence from Cadillac’s CTS-V Challenge:

We have no fear of comparisons by objective bodies, but it’s different if the person doing the comparison has a dog in the hunt

Not that the point lacks validity, but would BMW’s tune be different if the M5 CSL were a production model? We’d like to think so.

The WSJ reports that GM will draw “north of $2.5b” from its government escrow account to fund its own bailout of its major supplier, Delphi. Considering GM has committed $1b in debt assumption, $2b in forgiven claims and $1.75b in investments, we can assume the amount will be well north of $2.5b. But how much is left in that escrow account anyway? Estimates at the time of GM’s exit from bankruptcy were that some $20b was left to draw upon. And we’ll know exactly how much is left when GM discloses its government-money expenditures to the SEC by the end of this week. GM sources claim the money has not been used to cover operating shortfalls, and CEO Fritz Henderson has even gone on the record to say GM will not need further government assistance. Considering GM’s cash burn over the last four years was in the $10b/year range, let’s hope that claim isn’t entirely based on the assumption that a planned IPO next summer will be a rousing success.

The car business literally ceased the day World Trade Center I and II fell back to the Earth. And so the savvy suits at GM created a landmark campaign “Keep America Rolling.” Generous Motors offered 0% interest for 60 months on EVERYTHING they made. Customers had to forfeit their rebates in exchange for 0% interest loans, but my god did it work. The sales rates were staggering.  I personally witnessed customers at a Texas Chevy house literally fighting to be next in line to sign papers. The rumor had gotten out that 0% was going to end suddenly; the customers in this particular store believed they were in a race to sign docs before the last 0% credit was used up. That was 2001. Today eight years later, zero percent is BACK on.

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GM-volt.com‘s Lyle Dennis finds out that being one of the first 500 Americans to lease a MINI E has its downsides. Especially at $850/month lease cost. At around 5,000 miles, the troubles begin (OK, continue).

As the car is technically a mule or prototype, it is not production-ready and has had some issues. A month or two ago it began popping loudly into neutral whenever the accelerator was floored. The power electronics control unit was replaced and after that it almost never happened (it happened one more time). So I’m gentle with the accelerator.

The other day I was driving to work and went over an unexpected construction zone pothole. The car was jostled and suddenly it went into neutral. After that it could no longer be put into drive. Despite turning it on and off and moving the shifter in and out of drive neutral and park several times, that was it, dead. A tow truck was called and off it went to the dealership for a MINI “flying doctor” to come and repair it. After a few days I found out it was the power electronics control unit again which was again replaced.

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The Wall Street Journal rips the veil off of General Motor’s true identity, revealing Government Motors in all its ignominious glory [sic]. The piece lists numerous examples of political interference with the automaker’s business, each worse than the one before. “Democratic Sen. Amy Klobuchar of Minnesota persuaded GM to rescind a closure order for a large dealership in Bloomington, Minn. In Tucson, Arizona Democratic Rep. Gabrielle Giffords did the same for Don Mackey, owner of a longstanding Cadillac dealership with 80 employees. Rep. Giffords argues it made sense, even for GM, to keep the Mackey dealership, which sold 750 cars last year. ‘All I did was to help get GM to focus on his case,’ she says.” So that’s alright then? In America, politicians own you! “Lawmakers say it’s their obligation to guard the government’s investments, ensure that bailed-out firms are working in the country’s interests and protect their constituents.” Swallow blood pressure meds, continue . . .

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Edmunds‘ analysis shows that only 125k of the nearly 690k vehicles sold during Cash For Clunkers were incremental. Divide the three billion the government spent by that number, and you’re left with a $24k per-vehicle subsidy of additional sales. Which Edmunds admits were largely pull-forward anyway. Edmunds’  research also shows that fewer consumers would have traded in gas guzzlers had the stimulus not existed. As a result, “that may give some credence to the environmental claims, but unfortunately the economic claims have been rendered quite weak,” according to Edmunds analysts. All hail the Potemkin Economy!

No, we’re not talking about genuine job creation or a tax holiday for convicted felons. Well actually, we are. GMAC was given one humdinger of a present last year with $12.8 billion nestled near an open fire. That fire has now consumed nearly all that money. So the question now is what you should do if you were an involuntary investor in this black hole venture. Sue? Protest? Burn an abandoned house or two? Naaahh… just let the politicians shovel the greenery of course. The latest number under the bow is between $2.8 billion and $5.6 billion. Just in time to shop for more lobbying influence. Anyone need a sweetheart deal on their home mortgage? car? 401k plan? Contact your representative stat!

Bob Lutz savors his morning cup of Maximum, as he contemplates a wet, foggy day of racing at Monticello. Competitors will get five laps of the 3.5 mile track… assuming all those ponies at the rear wheels don’t leave Cadillacs scattered across the infield. Early practice video shows a CTS-V shouting at the devil on the main straight, but in these conditions the corners are the issue. Updates will be posted as they come in from our man behind the wheel, Mad Jack Baruth.

Despite the billions in federal and state taxpayer dollars poured into mass transit programs, only 6,908,323 working Americans take advantage of the subsidized service, according to US Census Bureau data released yesterday. The agency’s American Community Survey, a questionnaire mailed to three million households, found that 121,248,284 workers over the age of 16 regularly commuted to work by personal automobile or carpool last year. Despite the comparatively small number served by buses, subways and rail, the Obama Administration has made expanding mass transit a top priority. “President Obama’s vision of robust, high-speed rail service offers Americans the kind of travel options that throughout our history have contributed to economic growth and enhanced quality of life,” Transportation Secretary Ray LaHood said in April. “We simply can’t build the economy of the future on the transportation networks of the past.”

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I hate my *^%%! Mercedes. A year-and-a-half ago , I bought a 2002 S500 for $12,600 at a public auction. $300 of a/c work and a detail later, it looked like a million dollars. But it drove like a big fat Camry with a big fat engine. My mechanic swooned at all the gizmoids. I groaned and drove everything but that car. Everyone likes it. No one can afford it. I’m getting tired of looking at it. So . . .

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China will lead the U.S. as the world’s biggest auto market for a “long time,” (if not forever.) This assessment doesn’t come from the Chinese propaganda machine. Nick Reilly, GM’s head of international operations, thinks China is too far ahead of the U.S. and demand will grow next year, Bloomberg reports.

Reilly sees  vehicle demand in China increase to more than 13 million units next year from about 12.5 million in 2009. “I don’t see the U.S. being anywhere near that,” Reilly said.

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President Obama started a trade war by slapping a 35 percent punitive tariff on imported tires as a big “Thank you” to his friends at the United Steelworkers.  Most industry observers think this was mentally challenged exercise:  Production of cheap tires will be shifted to  other countries. Not a single US job will be created. Jobs will be lost and consumers will have to pay more.

The war is not going away. As a matter of fact, it is heating up.  Not only did China lodge a formal complaint to the WTO. China has told the United States it is launching a trade investigation that could lead to new import duties on autos and sports utility vehicles made by Chrysler, Ford and General Motors, a U.S. industry official confirmed to Reuters.

The action will leave no happy faces with U.S. Commerce Secretary Gary Locke, Trade Representative Ron Kirk and Agriculture Secretary Tom Vilsack, who are in China right now for high-level talks aimed at resolving trade disputes between the two countries.
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We’re not public yet but we will be and if we do our job that stock is going to have real value. We thought it was fair. We thought it was thoughtful

GM CEO Fritz Henderson comments on Pay Czar Kenneth Feinberg’s decision to dock his salary to a flinty $950,000. The AP reports Henderson’s total compensation could be worth $5.5m, apparently based on some unfathomable projection of GM’s IPO value. But Fritz is going to work for it. When asked if he’d read Steve Rattner’s magnum opus calling GM management “stunningly poor” and “perhaps the weakest finance operation any of us had ever seen in a major company,” Fritz’s responds in the affirmative…

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