A few days ago, we told you that the Chinese government will enact “nine measures” to prop up the ailing auto export sector. In the meantime we got our hands on the nine measures. Turns out (some may say, in typical Chinese fashion) that it’s only eight. 8 is a lucky number in China. Some of the measures are fluff, such as government support for car and parts shows, help for ailing shipping companies, advertising support (oddly, targeted at “Russia, Ukraine, South Africa, Vietnam, and Iran,”) and a ban on exporting used Chinese cars. Here are the biggies:

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A few days ago, Porsche’s Wendelin Wiedeking sent a letter to Germany’s parliamentarians, urging them to say “Nein” to Chancellor Angela Merkel. According to Braunschweiger Zeitung [via Automobilwoche sub], Wendy was not what you’d call enamored with a new version of the “Volkswagen Gesetz” (VW law). That’s the legal power bestowed upon The State of Lower Saxony to control VeeDub— despite the State’s [now] relatively measley 20.1 percent holding. Last year, the European Court struck down the law– in the interest of free trade, Mutter and Apfelkuchen. The ruling opened the door for Porsche to ride to the rescue of VW, supposedly shielding VW from gang-rape at the hands of Kirk Kerkorian, Cerberus and a RICO of takeover-artists. And yet Berlin has no plans at all to scuttle the Volkswagen Gesetz. Porsche can own as much of VW as they want. With the law on the books, Porsche can’t fight the power from Hannover or Berlin.

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As reported here, Daimler AG plans to increase its sourcing of automotive components from China nearly eight-fold within four years. The luxury car maker will buy $3.25b worth of car components per year in China. Now, BMW is itching to get in on the act. Not that BMW is new to buying parts in China, they have done that for years, mostly unbeknown to their well-heeled customers. BMW and Daimler are in talks to create a huge buying co-op. They want to create critical mass, and drop the bomb on their Chinese suppliers, the German Handelsblatt reports. By concentrating their buying power, Beemer and Benz intend to save €350m per year, in discounts alone. To assuage their American clientele, they say that they will also extend the stingy hand of their allied purchasing departments to parts suppliers in the U.S.A. However, with the dollar high and U.S. parts manufactures dead, or on the brink of extinction, the BMW/Mercedes buying axis is squarely targeted at China.  The “deeper discounts” news from Deutschland already has Chinese parts makers atwitter and alarmed. Here is why ….

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As commentators from all across the spectrum ditch their pom-poms and start to face facts, The Detroit Free Press is keeping it surreal by dedicating its nearly all of its ink budget to the cause of federal investments in the American auto industry. In fact, there’s so much bailout boosterism, it’s hard to know where to begin. How about the decision to run this CBS scare piece, complete with misleading, self-serving commentary by MI Governor Jennifer Granholm? When asked to justify a bailout of failed businesses, Granholm claims “one in ten Americans is employed in this industry.” Yes Ms Granholm, but “this industry” includes plenty of healthy firms who aren’t asking anyone for a bailout. Oh, but the “national economy,” “manufacturing sector,” and “energy future” (?) depend on a bailout, threatens pleads Granholm. You decide where her political career rates on that list of bailout-dependent priorities. Oh, but there’s so much more… Read More >

After Peter DeLorenzo’s fusillade, Autoblog’s TTAC upbraiding comes as something of a relief. As we’ve been picking on Sam Abuelsamid for some time (in the most morally self-righteous sort of way), I suppose it’s only fair that he takes his shot at our generally, shall we say, “skeptical” attitude towards a Detroit bailout. Of course, he can’t mention us by name… “Those cheering for Detroit’s demise may want to reconsider,” the headline chides, ever-so-gently. Bless. “Many analysts and commentators have seemingly been cheering for the imminent demise of the Detroit-based automakers. Something that needs to be realized amidst all this talk of low-interest loans and bailout money is how interconnected the auto industry is and how it affects our economy as a whole.” Not to offend Sam’s delicate sensibilities, but I don’t recall many commentators– here or otherwise– saying “fuck ’em.” But hey, he did say “seemingly,” and we like that kind of humility. And it could be, yes, wait, it is, time for an Autoblog Cassandra Watch! “Yes, the Detroit 3 have made a lot of stupid product decisions over the years and wasted a lot of money, but allowing the free market to pull them under will create a ripple effect that reaches more than just the shores of the Detroit River.” Nasty free market! Don’t you just HATE IT? Well, some people do. They may want to reconsider. You know; take a look around and ask themselves, well, how did I get here?

Walt Disney’s deathbed request to his brother Roy: don’t change my plans for the Experimental Prototype Community of Tomorrow (EPCOT). Walt spent his final cancer-fighting years planning EPCOT’s every detail, from housing to commuting to garbage collection. When Walt was cold in his grave, Roy did the sensible thing. He tore-up Walt’s work and built a cod-World’s Fair. The idea of EPCOT as a company-run city rather than an amusement park was fundamentally flawed, doomed to controversy and failure (Celebration anyone?). Detroit reminds me of Walt’s unrealized Disney world (small “w”): a place where corporate culture dominates the community’s mindset. Brock Yates chronicled this “Grosse Pointe myopia. As does Autoextremist Peter DeLorenzo, in his own way. Or, more precisely, in a David Koresh kinda way…

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It’s something of a long-running joke among local editorial writers that everyone cribs from either the New York Times or the Wall Street Journal‘s editorial boards. The two papers tend to lead opinion on either side of the spectrum, with the mainstream left taking its cues from the Grey Lady and free-market business types following the WSJ. If this theory still holds true in these ideologically confused times, the worm has certainly turned on the bailout. Both papers are running prominent and well-reasoned editorials against the bailout, from Thomas Friedman on the left and Paul Ingrassia on the right. Taken with the recent bad news from DC, this editorial one-two punch may just mark the high-water point for pro-bailout momentum.  Read More >

•    The U.S. auto industry has been hard hit by the credit crisis.
o    Carmakers can’t get credit to complete their restructurings and put new advanced technology vehicles into production.
o    Customers can’t get credit for new cars and other purchases, and consumer confidence has fallen to an all-time low.
o    Suppliers are losing business and can’t get credit to keep them afloat until the industry recovers.
o    Dealers can’t get credit to finance inventory and other routine business needs.

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Dear GM Dealer:

Earlier today, during a GM Dealer IDL broadcast, I provided you with a GM Business update and significant information about the vital role the U.S. automotive industry plays in the health of the country in terms of employment, annual economic output, exports, R&D investment and retail business. As we’re in the midst of the deepest crisis our industry has ever faced, GM’s priority is on seeking support from various U.S. government agencies and congressional leaders. We need your help now to ask government officials to approve an additional loan package to help us deal with our current liquidity crisis.

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Sensibly enough, Audi originally quashed all talk of a “baby R8.” As Ingolstadt belongs to VW and Porsche’s playing MEIN! MEIN! MEIN! with VW, the brand overlap between Audi’s existing mid-engined range-topper (excluding the uber A8) and Porsche’s venerable ass-engined Nazi slot car (P.J. O’Rouke) was already slightly… uncomfortable. Our own Jay Shoemaker described the Audi R8 as a Porsche 911 created from a clean sheet of paper (and some metal bits, presumably). The idea of a mid-engined R4 going head-to-head with the Boxster/Cayman duo is, obviously, “ill-advised.” In these crazy times, that pretty much makes the R4 inevitable. AutoExpress— who never met anything with four-wheels it didn’t absolutely adore– absolutely adores the new R4, despite the fact that it’s not been built. “Sports car fans are in for a real treat!” Sit sports car fans Sit! Treat! Treat! I hereby declare AE an irony-free zone. “It’s the result of a rumoured joint venture with Porsche – so the project will produce a new platform to underpin Coupé and Roadster versions of the R4, and also provide the basis for the next Boxster and Cayman. It’s these core sellers in the Porsche line-up that the R4 will target.” Riiiiiiight.

Obama is doing what he can to avoid getting overly involved in the unfolding government-industry debacle, but as we noted earlier, that’s a luxury he can only avoid for so long (not that we blame him for trying). Nothing illustrates the tough choices that The One will face in a few short months like Chevy’s moon-shot-mobile: the Volt. Accordingly, Holman W. Jenkins Jr has a column in today’s Wall Street Journal about “the car of the Age of Obama — or at least the Honeymoon of Obama, before the reality principle kicks in.” Jenkins devotes a good deal of the column to rehashing the many, many problems with the whole Volt project, a topic we have covered extensively in our Volt Birth Watch series. His logical conclusion? “It’s a car that will be unsalable without multiple handouts from government.” And he doesn’t go easy on Obama either…

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Detroit is out in the rain again, as Treasury Secretary Hank Paulson has ruled out using his $700b TARP fund to bail automakers out, according to the Freep. “I know that automakers are important to the U.S. economy. We care about our automakers,” Paulson said at today’s “TARP progress report”. But, says Paulson, “the intent of the TARP was to deal with the financial industry.” But Treasury recalcitrance isn’t just a question of principle. Paulson seems to have got the crazy idea into his head that the Detroit Three need more than the Treasury can offer right now. Aid to the industry “has to lead to long-term viability,” according to Paulson, implying that somehow a TARP-based band-aid might not do the trick. His solution? Expediting the retooling loans that congress has already approved. “We have a viewpoint that that legislation could be modified,” said Paulson. Of course, in practice this would mean stripping away everything resembling the original intent of the $25b retooling loan program. Like the requirements that it be used for retooling, that qualifying firms prove economic viability, and that it be used solely to build fuel-efficient vehicles. In other words, turning retooling loans into the short-term “bridge loan” that Paulson won’t fork over. Can it be done? Theoretically, yes. Can it be done in time? Not so likely.

Automotive News [sub] reports that Georgetown University law professor Daniel Tarullo may be president-elect Barack Obama’s choice for U.S. Car Czar– should such a thing be deemed nceessary. You may remember Tarullo as a world-renowned expert in the design, manufacturer and marketing of automobiles worker bee for the Antitrust Division of the Justice Department. No? Special Assistant to the Undersecretary of Commerce. No? Chief Counsel for Employment Policy for Senator Edward M. Kennedy. No? Assistant Secretary of State for Economic and Business Affairs. No? Deputy Assistant to the President for Economic Policy. No? Assistant to the President for International Economic Policy. No? Jeez, you really should get clued-in here! Tell you what, read Tarullo’s testimony to The Subcommitee on Security and International Trade Finance, Committee on Banking, Housing and Urban Affair’s hearing on Reforming Key International Financial Institutions for the 21st Century. And then tell me Tarullo isn’t a car guy, if you’re still conscious. Meanwhile, I want to have a little rant about the dangers of creating a Car Czar…

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When we reported on the Bush-Obama meeting yesterday, we told you that the meeting was “friendly,” but ultimately unproductive. Well, we were right about half of that, and no prizes for guessing which half. The New York Times cited unidentified sources in its coverage as saying that Bush was ready to support accelerated support for the Detroit Three on the condition that Obama convince Senate Democrats to support passage of the Columbian Free Trade Agreement which they are currently blocking. Needless to say this was a non-starter. Obama has openly opposed the Columbian FTA throughout his campaign, not only to curry favor with the unions protect US jobs, but also because in his words “the violence against unions in Colombia would make a mockery of the very labor protections that we have insisted be included in these kinds of agreements.” Having made this human rights argument in no less public a venue than the presidential debates, was there ever any chance that he would accept Bush’s compromise? Of course not. But now Bush is steamed that this detail slipped out, blaming Obama aides for leaking the smoke-filled-room compromise to the press. Obama’s transition team now says that “there was no quid pro quo in the conversation,” but as the US News And World Report Political Bulletin reports (in exhaustive detail) this is turning into the first major rift between the outgoing and incoming presidents. As well as proving that even a bad compromise leaves everyone unhappy.