Seems like our old pal Jerry York is back in play. You may remember Mr. York as the turnaround expert, ex-ChryCo exec, rep for aspiring GM owner Kirk “The Lion of Las Vegas” Kerorian and former activist member of GM’s Board of Directors. It’s the penultimate of these which applies here: Captain Kirk’s main man tried to broker a deal between GM and Renault back in the summer of ’06. The merger fell afoul of then-GM CEO “Red Ink” Rick Wagoner, who’s now shivering in hell (albeit without any financial worries). Our sources tell us that Nissan wants to be GM’s Fiat. In other words, it’s looking for the US government to give it a controlling share in GM for no-money-down, putting Carlos “I told you so” Ghosn at the head of the unencumbered GM. I mean GNR (GM – Nissan  – Renault). This one makes a lot of sense. Uncle Sam doesn’t [really] want to run GM, and the Fiat deal will [they hope] provide a template for the GM – Nissan thingie. And, lest we forget, the maxim “everything either grows or dies” applies to both GM and Nissan. Hyundai-Kia just passed Nissan for sixth place in the US new car market.

With TARP money, of course. Or so says our man on the inside of Chrysler’s bankruptcy proceedings. And apparently the holdouts will get even more than the already TARPed bondholders. Which means that although Obama may not “stand with” the “hedge fund holdouts,” apparently he’s OK with writing them a check for their trouble(d assets). Or maybe someone in the Treasury just made the connection: the only people who aren’t playing ball in this ends-justify-the-means “bankruptcy” call themselves “The Non-TARP Bondholders.” TARP money has made everyone else compliant with Treasury’s union, so obviously the solution is to buy out the holdouts with just a little more TARP. After all, does anyone think Fiat, the UAW or the already-TARPed bondholders would be embarking on this ship of fools if government cash weren’t paying the way?

Or so says Automotive News [sub] Executive Editor, Edward Lapham, in a brief aside. According to Lapham, Chrysler is ramping up a major ad campaign (a fact that remains unconfirmed by Chrysler) that steals from the $5 billion supplier bailout fund. “Through its ad agencies,” writes Lapham, “Chrysler is lining up major media that are willing to accept a price cut of 2 percent in exchange for assured payment under the federally funded critical-supplier payment plan.” Because Chrysler wanted to see if its post-bailout supplier relations could possibly be worse. Although to be fair, those two percent savings do add up . . . to about 30 pieces of silver.

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The following email just came over the TTAC transom. Negotiations between Chrysler and the Canadian Auto Workers have broken down three days ahead of Canada’s bailout deadline and Uncle Sam’s defunct deadline for union concessions. Chrysler has already threatened to pull out of Canada. Given this stalemate, and the Presidential Task Force on Automobile’s determination to keep the zombie automaker in business, they just might.

Chrysler LLC Statement Regarding CAW Talks Attributed to Al Iacobelli, Chief Bargainer:

“We all recognize that we are in unprecedented times as it relates to the global economy and current financial crisis, which has a direct impact on the automotive industry. After several days of bargaining in good faith, Chrysler and the CAW have not reached an agreement that closes the competitive gap with other automobile manufacturers in Canada, to ensure Chrysler’s immediate viability.

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Inside sources reiterate what we’ve heard before: the mission critical battery for GM’s plug-in Hail Mary hybrid gas electric Volt is not achieving its performance requirements. Not even close. In fact, we’ve heard that the battery is failing to meet ANY of its targets: range, recharge time, battery life expectancy, cold weather performance, cost, nada. That said, this is a rumor [see: question mark above]. Therefore, we invite representatives of GM to contact TTAC (robertfarago1@gmail.com) to spin the story until we pass out from dizziness—I mean, assure GM’s many stakeholders that mass production of the single most important vehicle in their portfolio—if not the last—will begin on the date promised. Wait, what was that date again?

Well, not so wild ass, obviously. Other than getting sued by disenfranchised Saab
dealers—which isn’t so much of an issue now that Uncle Sam is paying for everything—why wouldn’t GM shutter Saab? When it comes to buying car brands, no one is. Or will be. For a very, very long time. If ever. And GM needs to show its Congressional overlords that it’s doing something about something™. So we’re passing along a tipster’s assertion that yesterday’s resignation of Percy Barnevik from GM’s Board of Directors signals that the axe is about to fall on the Born From Jets brand. The divine Mr. B. was born just (pronounced youst) outside Trollhättan. If he ever wants to show his face in Sweden again, he has to distance himself from the author of Saab’s neglect, abuse and final destruction. You know, GM and its Board of Directors . . . which he joined six years after GM scarfed the Swedish brand, during which time it produced the America-only 9-7x (a TTAC Ten Worst winner). For that alone, I’d be worried.

This one is driving me nuts. I’ve heard this from three sources now. Good sources. Independent sources. Sources that will never talk to me again if I name them. Even discounting their tips, the story makes perfect sense. It’s common knowledge that ex-Home Depot Chairman Bob Nardelli actively campaigned for Chrysler’s top job. Up until the weekend of August 2, 2007, there wasn’t a single journalist who didn’t think Wolfgang Bernhard was going to get the job, with Chrysler veteran (and author of the Daimler-commissioned turnaround plan) Tom LaSorda as his underling. And then… Bob Nardelli. Who? Nardelli was a complete industry outsider (he owned a Plymouth Prowler for God’s sake). Why the sudden change of plan? Could it be that Nardelli put his own money on the line? Motive: resurrection of his tarnished rep. Means: the exec drifted out of Home Depot on a $210m golden parachute. Opportunity: Cerberus considered industry players inherently suspicious. And what do we make of Nardelli’s testimony to Congress that he doesn’t draw a penny in salary? OK, so I called Chrysler for confirmation. Within ten minutes Nardelli’s personal PR person returned my ping and categorically denied this report. So are you saying that Mr. Nardelli didn’t put ANY money into Chrysler when Cerberus bought it from Daimler? Correct. So now you know. Or don’t.  

Yes, a WAR so absurd it gets its very own question mark. And yet there it is, lingering on the spanish language pages of peru.com. Stingray has kindly offered a computerized translation (with all the humor that implies) of this astonishing, you might even say scarcely credible revelation. “As a result of the global economic crisis, the major U.S. automotive companies: General Motors, Ford and Cryssler also entered into financial trouble. Ford and General Motors are several years owners of the Swedish ías Comp + “Volvo” and “Sabb” respectively. In the package of lifeguards big American companies such as settlement is the sale of the Swedish automotive factories in question. This decision by the two American giants had total chaos in these two automobile companies in Sweden. Such companies are already on sale and what’s curious is that nobody is presented as a possible buyer, no producers, investors in the industrialized world want to invest in cars because they too are in crisis.

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An anonymous source sent us this heads-up. We’ll chase it up tomorrow (Monday). Meanwhile, back in October ’07, Newsweek pegged the number of GM retirees at 340k. So, if true, this works out to a $238m hit to GM’s bottom line. At least. UPDATE: GM spokesman Tony Sapienza tells us that GM paid up to $700 in “year-end inflation adjustments” to 284k hourly retirees on Monday. Some 73k surviving spouses received up to $455 each. The total cost to GM: $200m+.

You gotta love an autoblogger who writes “After all, the recent cancellation of the luxurious 4-seat coupe previewed by the concept CS shows that the current BMW management are acting, how should I say it… like a bunch of pussies.” [I don’t agree but I appreciate the, uh, Ehrbarkeit.] Anyway, our new BFF at auto-future has read the most recent paper version of Autobild (out today). The pub predicts that BMW’s about to go on a buying binge. “The strategy previewed includes BMW forming an holding in order to acquire positions in other companies, including a percentage of Daimler that allows a position in the board, and possible a Opel buy either alone or with Daimler and German government colaboration.” We’ll get ask our man Bertel Schmitt to pick-up a copy at the train station and provide a more complete translation. But given GM’s DC begging bowl debacle (part two today rock the House), it’s increasingly clear that it’s only a matter of time before someone grabs GM’s Euro-brand. Or at least the best bits.

Update: In the meantime, Bertel Schmitt picked up a copy of Auto-BILD at the train station. He called in and said “They are talking menace a trois!” Between BMW, Mercedes and Opel.  He said, it’s just a scenario, written up by the magazine. We’ll hear more when he has found an Internet Cafe in Berlin.

Bertel from the Internet café: “Not much to report and translate, boys & girls: Wild assed rumor it is not. It’s pure, unsourced speculation by Auto-BILD (after all, they are the car offshoot of BILD-Zeitung, famous for its “Man Bites Dog” style.) They think, it would be a swell idea if BMW and Daimler would join forces (if someone finds a way to sedate their engineers, they will.) Then, with some government money, they could take Opel off the hands of GM. And ACHTUNG: A pure, true and true Germanic car company. Nice idea. Next idea, please! However, the “report” reflects what we’ve said for a while: Nobody in Germany doubts that Opel will leave GM. Everybody just speculates about the how and when.”

TTAC’s Deep Throat has resurfaced from points unknown. To make up for his extended absence, he’s got a major scoop– you know, if it goes down. He tells us that GM’s Franchise Operating Team (eight dealers and eight factory guys) will decide the Saturn brand’s fate next Thursday. “It’s not looking good for the different kind of car company,” DT intones (should such a thing be possible via email). He reckons Saturn will be terminated. “Some key vehicles will be parceled out to other brands. Possibly.” The payoff for Saturn dealers to crawl off into a corner and die is unknown, perhaps unknowable. Anyone want to guess who’d end-up paying for it?

Channel stuffing means forcing dealers to take more cars than they can sell, or making the vehicles and parking them somewhere or other. It’s an art that was perfected by DaimlerChrysler just prior to the automaker’s assumption by Cerberus Capital (a company more than a little familiar with the dark arts of dark arts.) The upside: the company books a vehicle as “sold” once it does an Elvis (i.e. leaves the building). The downside: there’s always a reckoning. One of our spies tells us that GM can’t cut production fast enough; new units are beginning to pile up here, there and everywhere. (Confirmation to robert.farago@thetruthaboutcars.com.) Meanwhile, one of our friendly GM store owners tells us that The General’s about to launch a new dealer incentive program. The new deal will encourage dealers to, as he puts it, “order unneeded and unwanted inventory.” “We’re talking about two to three thousand dollars in extra stackable rebates,” the mole reveals. “Depending on how much gas [new units] you take.” This does not please our guy on the front lines a bit. No sir. “It’s just great,” he kvetched with a dollop of sarcasm. “Unfair and unequal pricing to force franchisees into paying dangerously high floorplans.” Translation? “If you manage your units in a reasonable and sensible way, you are unable to compete on price.” Just another indication that this ain’t no party. [thanks to you know who you are X3]

I don’t like rumors that no one wants to substantiate, but I think this one is not of the Sasquatch-got-me-pregnant variety. The scuttlebutt: banks still willing to make new car loans are more so when the make is foreign. The meme has been traveling around for a while by net, got an unsupported mention on NPR this week and spurred me into making a few phone calls. Off the record, wink-wink, nudge, nudge, it’s easy to get you bought on a car from a company not headquartered in Detroit. In other words, the gangrene of bankruptcy has already set in. Now it’s a matter of how far the powers that be let it spread.

These are indeed turbulent times in the automotive industry. With every new day comes a flood of bad news, and a fresh sense of ominous momentum. As we continue to serve up hefty sides of bailout beef, we thought we’d offer up a quick, palate-cleansing taste of the non-bailout, non-industry-implosion gossip going ’round the net. And you’ll never believe what insiders have to say about the Toyobaru coupe pregnancy scare! Read More >

Autocar slips this little nugget in an alarming alarmist story that Ford will run out of cash by May: “Ford has already pulled all of its UK advertising across all mediums until the end of the year.” I’m Googling like mad, but can’t find any corroboration. If true, this is some SERIOUS SHIT. Meanwhile, TTAC’s Ken Elias debunks Autocar’s assertion that FoMoCo will be out of dough by the spring. “AutoCar’s analysis on Ford’s cash flow is incorrect. For the year to date, Ford has used $15.7 billion in cash, although only $2.9 billion relates to pre-tax losses. The bulk of the cash used to date reflects mostly restructuring efforts due to constriction in working capital ($6.7 billion) and funding the required VEBA to the amount of $4.6 billion. Since these are mostly one-time items, the cash burn situation at Ford does not appear as dire as that of GM. Any stabilization of Ford’s North American business will stem its cash outflows.” Thanks for the heads-up Ken.