BMW is not doing so well lately. I know; it’s tough all over. But there’s tough and then there’s a 90 percent profit plunge (to €330M). Aside from disappearing revenue, BMW shares something else with America’s domestic manufacturers: denial. Just-auto [sub] reports that Bimmer’s CEO reckons the sun will come out tomorrow. Well, the end of this year, anyway. And then everything will be alright, exactly as planned, ja?

BMW is sticking to the long-term targets set out in its so-called Number One strategy despite the current challenging economic times, the automaker said as it announced a fall in 2008’s net profit of almost 90% on Wednesday.

“2009 will be a transitional year for which we cannot yet make any reliable forecasts. Nevertheless, our long-term profitability targets for 2012 remain intact. We want to preserve the independence of the BMW group,” chairman Norbert Reithofer told the annual accounts press conference in Munich.

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GMAC is facing mounting criticism (lawsuits to follow) for suckling on Uncle Sam’s teat for $6B, then turning around and cutting car dealers off at the knees. And so, on the same day TTAC takes GMAC to task for doing the dirty on dealers, on the same day ChryCo CEO Bob “The Prowler” Nardelli is out and about, sniffing around the federal trough for even more bailout bucks for Chrysler’s former captive lender, GMAC has issued a press release defending its “death to dealers” policy. I mean, newfound financial probity. Color me unconvinced. As one of our Best and Brightest pointed out, where there’s smoke, there’s mirrors. (Grammarian mulligan evoked.)

Wholesale Financing

* GMAC is currently doing everything it can to provide broad-based funding support to auto dealerships during these very difficult times. For example, despite the tight credit markets, GMAC continues to provide wholesale financing for about 75 percent of GM auto dealers – a level consistent with the past five years.
* Dealers are not required to finance their wholesale inventory with GMAC; they are free to choose any lender. However, we recognize that many banks and financial institutions have ceased to offer auto wholesale financing given the strained credit markets and uncertainty in the industry. GMAC is working to preserve such funding for its existing wholesale dealer accounts.
* GMAC currently extends over $20 Billion in wholesale financing to U.S. dealers.

Dealership Default

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The fellas at Autoexpress are saying it’s the “new MR2,” although there’s no indication yet that the planned hybrid coupe will rock the nameplate’s trademark mid-engine architecture. Toyota’s CR-Z fighter will be RWD though, making it the second rumored RWD Toyota coupe in the last year. The first, a joint Toyota-Subaru may or may not be on hold. “We have set a tough price point (expected to be around £20,000 ($28K)), as it will be easier to sell if it is affordable,” says Toyota VP Masatami Takimoto. “It has to be fun to drive, too, which means the hybrid set-up must be different to the Prius’s, with greater responsiveness.” If the hybrid coupe is “done right,” reckons Autoexpress, it will do 0-60 mph in seven seconds, while getting over 50 mpg. Looks like Honda isn’t the only firm trying to mate green with fun these days.

Good news, everyone! A finance company whose risky investments in auto and real estate loans required it to beg for $6B in bailout cash is at the ready to teach you the secrets of smart financial planning. According to a release at PR Newswire, GMAC “has bolstered its effort to provide consumers with personal finance education with a $20,000 grant to InCharge® Education Foundation, Inc. (ICEF). The funding will be used to co-sponsor a series of financial literacy courses throughout the country in 2009. The courses, named ‘Smart Edge by GMAC,’ are designed to help people make better financial decisions by providing them with information about budgeting, real estate and automotive finance, insurance, credit reports, credit scoring, and other tools.” Lesson number one? Pay your CEO $11.6M even if you’ve been bleeding red ink all year. Lesson number two? Savagely screw over the people your business relies on.

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We knew, but we still weren’t ready for this.

Even though China is the largest car market in the world at the moment, Chinese car designers have a tough row to hoe. The Wall Street Journal’s China Journal blog explains that while there are plenty of well-educated Chinese industrial designers, the prevalent design philosophy keeps their best work in school. According to an unnamed Chinese auto exec, the competitive advantage for Chinese automakers vis-à-vis their foreign partnership competitors is that they never start engineering or designing from a blank sheet of paper. Rather, the standard practice is to “tell an outside engineering consultant which existing model they want to copy, and ask them to come up with a product counterfeited in a way that it won’t attract intellectual property lawsuits. In some cases that means companies combining styling ideas from two separate cars into one.”

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Chrysler’s Robert “Fed Cheddar” Nardelli knows his automaker needs $5B, but what about that other once-lucrative side business turned new economy shakedown, Chrysler Financial? Having copped $1.5B back in January, ChryFi’s been slamming record incentives ever since, and now the buzz is wearing off. Which has Nardelli sounding decidedly thuggish. “We have gone back to Treasury and said ‘we need to re-up that amount,’” he tells Bloomberg. “We saw the evidence of how that works.” For real, dawg? What about the fact that sales are down 50 percent since ChryFi took its last tasty hit of government cheese? Fuhgeddaboutit. See, if you look at Chrysler’s retail sales and compare them to declines in the broader market while getting high off your own supply, things don’t look so bad for the Pentastar Posse. Reportedly. The irony is that if Nardelli really was hustling hard drugs on the street corner, well, he’d be selling something.

Although that rev segueway is seriously annoying.

In its perpetual quest to expand into new profitable fields that have little to do with its core business, Daimler is now running a used-car dealership. No, they wouldn’t call it that; it’s the “Mercedes Young Classics Store.” (Sorry, at the moment this news item only applies to European markets). The concept is interesting. Mercedes thinks its products have such a great heritage and are engineered so well that they’re both practical daily drivers and desirable collectables. The not-quite vintage (i.e., birthdate 1970-1990) vehicles can not only be purchased, but also rented via a website that demonstrates what happens when you apply German principles of over-engineering to HTML design. Although the supply yet is quite small, there are some pearls to be found (if you can actually find the “gallery” button which allows you to see the cars on sale).

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The Detroit News is reporting that Presidential Task Force on Automobiles (PTFOA) is ready to float some trial balloons—I mean, announce part of its master plan for “saving” the U.S. auto industry. The News reckons the PTFOA will place the cart before the horse, revealing its bailout strategy for the domestics’ suppliers sometime this week. Then they’ll unveil the new new bailout arrangement to fund GM’s new new new new new new new turnaround plan and, believe it or not, Chrysler’s mythological recovery strategy. Meanwhile, Saturn’s keepers are busy pre-stretching the limits of credibility.

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johnkr3 writes:

I have a question about a car that is hard to start. It’s a 1995 Olds 98 (52,000 miles) that I mainly drive on the weekends. It sometimes takes four or five cranks before it will start. Rarely does it start on the first try. This is annoying and embarrassing.

My suspicions lie with the key. It is the GM key with a security feature on it, a small black square with a metal slot in it.

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Yes, I’m going to open this can of worms. Detroit News columnist Daniel Howes did so this morning—although his thoughts on Bonusgate somehow didn’t make it to the paper’s homepage. Howes’ main argument: how can the Obama administration claim that they had to pay $165M worth of executive bonuses because they were legally obliged to do so—when they’re happy to force Chrysler and GM to renegotiate legal contracts with the unions and bondholders as a precondition for double dipping at the bailout buffet? And you know what? He’s right, even if he somehow forgets the seven million [taxpayer] dollars ChrCyo and The General are spending for lobbying our legislators and, by extension, commander-in-chief.

Perpetuating this double standard — one set of rules for troubled Wall Street firms with a demonstrable record of fat campaign contributions and another for automakers with union labor and little clout in Washington — is arbitrary, indefensible and deserves the backlash buffeting Congress and the Obama administration.

And then, of course, Howes goes too far.

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“Dangerous innuendo” is CAW Prez Ken Lawenza’s sultry summary of Chrysler’s plan to interruptus its Canadian operations if labor won’t agree to further concessions, reports Bloomberg. Chrysler is holding out for wage and benefit concessions that are “considerably larger” than those given to GM. The current GM agreement, when applied to Chrysler, cuts just $7.25 an hour Canadian from the company’s labor costs, according to a document obtained by Bloomberg. The same document reportedly shows that Chrysler requires $11.75 Canadian an hour in additional savings to be competitive. Meanwhile, Automotive News [sub] reports that GM is playing a similar game in its UAW negotiations. CEO Rick Wagoner says Ford’s agreement with the UAW “does not meet our needs” and that GM is working with the UAW to “do something different.” But despite the bloodthirsty negotiations, all three Detroit automakers are standing by their union allies in DC and on the pages of the Freep, calling for an American cash-for-clunker program. Because, hey, even Malaysia is doing it, according to Ward’s [sub].