Saturday’s San Jose Mercury News carried a short piece on the swift conclusion of the Tesla v. Fisker arbitration hearings. “Tesla had alleged that Fisker stole trade secrets to create his Fisker Karma while working under contract to design a car for Tesla.”Somehow the notion that a bunch of automotive neophytes were generating significant trade secrets and that said secrets were whisked out the back door by industry veteran Fisker never did smell right. Sure enough, “retired Judge William McDonald found in November that Tesla’s case was ‘baseless.'” Tesla says it will pay up, someday. Not that Fisker needs the cash. In September, Fisker closed a $65 million investment round led by the Qatar Investment Authority on top of two previous Kleiner-Perkins led venture investment rounds.

TTAC’s Deep Throat sent us the heads-up: as predicted here, GM and Chrysler suppliers are now asking for cash in advance. “Both GM and Chrysler are responding with form letters denying such requests,” DT reports. “BUT – GM’s letter is full of obfuscation; Chrysler’s is more direct and forthcoming. I was read both letters sent in response to a supplier’s request. Unfortunately, I cannot supply these letters to you due to my source… The problem is that GM & Chrysler’s cash flow vanishes when dealers stop ordering new rigs – like now. Hence, bankruptcy is imminent for both companies and that’s why suppliers are starting to posture for cash on delivery. A bailout changes things. But only for a while…” True dat. Uncle Sugar’s “support” will put an end for cash-on-the-nail demands. But it’s important to keep in mind that both GM and Chrysler need a “float”– estimated at $10b for GM– to keep the parts flowing and the lights on. The instant taxpayer money looks to dry up (i.e. March), they’ll throw both companies into Chapter 11. In Chrysler’s case, maybe sooner.

Via The International Herald Tribune: “ZAGREB, Croatia: Croatian police say a driver has deliberately crashed his car into the entrance of the Parliament building. No one was injured. Zagreb police spokeswoman, Aleksandra Ljuba, says the 34-year-old was arrested on the spot Monday. Police did not identify him. Ljuba says the motive is not known, and the man is being kept for questioning. Both the car — an old Yugo, a cheap vehicle once produced in Serbia — and the building’s doors were damaged. The driver apparently surprised the guards at the St. Marc’s Square, which is also a site of the government building and the Constitutional Court.”

Wow, that was quick. Even before we could get a hold of the new bailout bill, the name of the new “viability advisor” has emerged from the political fug hanging over Washington. And the man who will control the fate of America’s automakers is… Kenneth Feinberg. The MSM (e.g. AP) is touting the man who would be Czar as the “the lawyer oversaw the federal Sept. 11 victims’ compensation fund” (AP). Which is a strange, deeply foreboding background for this gig if you ask me. But you didn’t. So I asked Wikipedia to give me the inside dope on El Czarino. “Originally from Brockton, Massachusetts, he worked for five years as an administrative assistant and chief of staff for U.S. Senator Ted Kennedy, and as a prosecutor for the U.S. Attorney General. Before founding his own firm, The Feinberg Group, in 1993, he was a founding partner at the Washington office of Kaye Scholer LLP.” Feinberg wasl also a key figure in other major compensation disputes, including the use of Agent Orange in Vietnam and the Dalkon Shield birth-control device.

Here’s a copy of the draft Detroit bailout bill. While we digest it, here’s what we know so far… Automotive News [sub] says that yes indeed, there will be a car czar. Appointed by President Bush. The Freep is more specific. “Under the bill, automakers would have to submit a restructuring plan by March 31 to what’s being called a ‘financial viability advisor,’ who would have the power to set negotiations among the company, unions and creditors. If the advisor deems the company isn’t making progress, the loans could be called back.” In other words, he or she could throw The Big 2.8 into bankruptcy, without passing go, without collecting $34b (just some of it). Well, fair enough. But from there, things get seriously gnarly…

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A UAW local president has revealed that, as we suspected, the much-touted UAW concessions are no concessions at all. Mark McQuillen, president of UAW local 2404 (Charlotte, NC) has filed a report on last week’s emergency UAW meeting, and let slip a tiny detail that had not been previously publicized. In return for allowing Detroit to delay VEBA payments and “eliminating the Job Bank and negotiating a new provision to protect workers that otherwise would have been placed in the Jobs Bank program,” the UAW is said to be seeking “an equity stake in the company most likely in the form of a seat on the board of directors.” This is in addition to a taxpayer funded “special attrition program” which will buy out UAW workers in 2009 “providing that the loans are granted and that the government approves using some of the money for that purpose.” Concessions indeed.

Do the extra cylinders make me look fat?

Speaking of wedge issues. In a bizzare inversion of those tabloid baby-bump rumors, there’s a hot tip flying around the autoblogosphere that GM is aborting the Volt program and firing engineers. Things started with an anonymous tip to Jalopnik, saying “My uncle works on the Volt as an engineer. He’s getting laid off Friday because apparantly the project (aka VOLT) is on hold indefinitely.” Early responses from PR flacks was inconclusive, but Autoblog has apparently received word from GM spokesman Terry Rhadigan that “there’s no truth in that statement whatsoever.” Rhadigan went on to hedge a bit, saying “I’m not going to respond to specific speculation. The Volt remains a top priority for our Company and there are no changes to the timing of the program.” With a bailout compromise announcement expected at any time, this little rumor could mean one of two things. Either it’s true, and GM is cutting everything it can to make its “survive to March 31” bill as palatable as possible, or it’s untrue and GM is spreading a lie/allowing it to fester to scare more money out of the pols. Either way, file this under “unpleasant.”

We’ve been keeping tabs on all the divisive, emotionally-charged wedges being driven through the the bailout debate, and frankly we’re beginning to wonder where it will end. Luckily we may be seeing the light at the end of the tunnel, and as usual with these things, it’s some good old reductio ad absurdum. Randi Payton of On Wheels Inc, which publishes magazines and produces Web sites about the auto industry for ethnic minorities, wonders aloud in Automotive News [sub] whether we are “turning our backs on diversity.” After all, as Payton puts it, “we cannot overlook the more important fact that the Detroit automakers are also some of the most socially responsible corporations in the world.” And the key to his argument is the claim that the Detroit 3 “led the embracing of diversity, employing more minorities than any other entity, next to the federal government.” Now I certainly wouldn’t dispute Payton’s point that “Ford Motor Co. was the first corporation in America to pay fair wages to blacks, essentially creating an African-American middle class,” but to do justice to the term “diversity” we will have to take a closer look at Ford’s history than that. While Henry Ford opened groundbreaking opportunities for African-Americans, his anti-Semitism pretty much knew no bounds. Time for a definition check on the term “diversity?” Better yet, let’s not justify the bailout of failing businesses on ancient history. Or the most divisive issues we can possibly think up.

It’s should be fairly obvious by now that Saturn is a dead brand walking. Little remains of Roger Smith’s import-fighting concept anyway, as the “different kind of car company” now consists solely of rebadged and Americanized Opels, fine young CUV-annibals, and the Sky. None of which sell very well. So, dead by Thursday, and that’s all she wrote? Not according to those crazy, mixed-up kids at Automotive News [AN, sub]. “Saturn has a product program, both current and future, that is currently in our plans,” GM Marketing Honcho Mark LaNeve tells AN. “But a lot of what is in our plans is in a state of flux right now given the state of the economy and everything.” Understatement of the week day hour? GM hopes to conceive a new business model to make the brand profitable, according to LaNeve, because a sale won’t happen. Hello, China? Then again…

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Fiat boss Sergio Marchionne has been schmoozing with Automotive News Europe [sub]. “By the time we finish with this in the next 24 months, as far as mass-producers are concerned, we’re going to end up with one American house, one German of size; one French-Japanese, maybe with an extension in the U.S.; one in Japan; one in China and one other potential European player,” Sergio predicts. And now, the WQOTD: “Companies can only survive if they produce at least 5.5 million cars a year.” So, someone special, who will it be? Someone special like… “Toyota, General Motors, Volkswagen, Ford Motor and Renault-Nissan.” Note: we could have gone another way on this one. In the same article, the thoughts of Jürgen Pieper, analyst at Metzler Bank in Germany, gets major play. Herr Pieper opines “Size in the current situation is what matters.” Small and nimble gets subsumed by big and… stupid? Stimt. “Daimler has been scarred by its experience with Chrysler, BMW bought Rover but sold it again after high investments failed to pay off. Analysts say both episodes showed that synergies between premium and volume carmakers are elusive.” “Elusive” as in non-existent?