These are turbulent times. Over the course of the last week, we’ve watched GM PR (a.k.a. “unnamed sources”) pimp a nonsensical merger between The General and Chrysler. Then, at the eleventh hour, the “deal” was retracted without comment (thanks to the U.S. Treasury Department’s refusal to bankroll the pre-bailout orgy). As regular readers will know, Friday afternoon is the witching hour for GM’s bad news, so that the markets can chill-out before dumping yet more GM stock and downgrading GM’s credit [even further] into irrelevance. So now we have an info limbo. Will the deal go ahead anyway? If not, when will Chrysler file the resulting, inevitable Chapter 7 liquidation? Into this void some tipsters step. Deep Throat tells us GM’s putting its research and development facilities on ice– and not just to save a few bob. Nope. It appears that The General is about to kill– as in starve to death HUMMER-style– Saab and GMC. Oh, and commercial trucks. That would leave Chevrolet, Cadillac, Pontiac, Saturn and Buick. (I know: Buick?). Anyway, something’s going down on Monday. The leakage should start tomorrow.

One of our informants within GM tells us that Renault/Nissan (R/N) has entered the negotiations for Chrysler owner Cerberus’ final dispensation of Chrysler. Apparently, “Nobody wants to swallow Chrysler whole.” Although this one comes at us from deep left field, we have heard rumblings that GM wanted to merge Jeep with HUMMER– which we completely discounted at the time. We’re now told that GM and R/N are casting lots for production capacity. Allegedly, only one brand (as a brand) will survive the evisceration. You guessed it: Jeep. So the split would look like this: Jeep/minivans – GM. Trucks/SUV capacity – R/N. Cars? Neither one wants anything to do with them. The unnamed source close to the story familiar with people close to deal says that’s been the hang-up for Cerberus. Interesing…

When I heard Sean Hannity blather on about “the death of journalism” re: the mainstream media’s coverage of the current presidential election, I paid the conservative talkmeister scant attention. Even if the press is in the tank for Obama, it’s not like the situation is analogous to living in Mother Russia during Pravda’s Stalinist heyday, when the KGB had about as much tolerance for dissent as Saddam Hussein’s thugs. Check it: Hannity’s got his airwaves. The “liberal press” have theirs. And everybody and their mother has the internet. But now that I’ve been following the GM – Chrysler merger story, I beginning to wonder if Mr. U.R. A Great American may have a point. I, for one, am not fooled for an instant by the automotive press’ unrelenting reliance on “unnamed sources” for their reporting on the creation of American Leyland. GM PR is spoon-feeding the press, no one’s admitting it and that’s that. But Jesus, did Reuters stop to think for ONE SECOND that GM might NOT have contacted Toyota for help? If we can see that a source isn’t reputable from friggin’ Rhode Island, WTH is wrong with Reuters’ Asian reporters? And what kind of bullshit is it when a supposedly reputable news agency retracts its story by repeating it? Media pros bemoan the ethics and standards of internet-based “citizen journalists.” Puh-lease.

In a break with TTAC tradition, today’s WAR comes from an “authoritative” source: Reuters. OK, it’s Kyodo news via Reuters. (Free marketeer that I am, I’m not so sure I trust a “nonprofit cooperative news agency.”) “The Kyodo news report said Toyota was expected to consider quick fixes for the cash-strapped GM, including buying up its assets and helping it secure sufficient business funds. The executives of the world’s two biggest automakers may also discuss an expanded business partnership, including Toyota making fuel-efficient compact cars for GM and providing hybrid-car technologies to the U.S. carmaker, Kyodo said, citing sources.” Obviously, this is complete and utter nonsense. Except that maybe it isn’t. If you recall, the last time GM was staring down the barrel of C11, back in May 2005, Rick Wagoner DID hop a Gulfstream for Tokyo and met with then-Toyota President Fujio Cho. The nature of those discussions was never revealed. (Until now: Pachinko!) Students of these turbulent times may also remember that Toyota offered to raise its prices to help GM (I shit you not). As TTAC has pointed out many times, GM’s survival is in Toyota’s best interest; the American automaker sets a profitable “floor” for all U.S. new car prices. This is definitely a rumor worth watching.

In a world of wild ass rumors, the four door everyman’s supercar is King. Maybe. No matter how you look at it, you gotta wonder what these Nissan/Infiniti guys are thinking. Pistonheads says “Unconfirmed reports from Japan say Nissan engineers are actively evaluating a four door built on a stretched version of the GT-R platform, with a view to introducing a new flagship to the luxury Infiniti brand in 2011.” New flagship? So Infiniti GT-R sedan replaces the previous, now extinct Q-ship, slots above the M-people, pals around with the G-men and lives happily ever after? And if that’s not enough to make Infiniti a success in Europe, PH reckons the new GT-R car will be horsepower-deficient. “Sources suggest an output of around 420bp is on the cards, significantly down on the output of European super-saloon rivals. However, with the GT-R’s intelligent ATTESA-ETS AWD system and six-speed dual-clutch transaxle carried over, it will be interesting to see how the lack of outright muscle translates into track times – although Nissan insiders have apparently conceded that any Infiniti flagship will be tuned for luxury before ultimate performance.” Right, ’cause GT-R means luxury. Go figure.

New gtr r35 vs tuned nissan skylines gtr's

We have it from a private source close to someone familiar with the story who heard it from a friend who heard from a friend that you’ve been messing around GM has some [more] bad news to release this Friday. Of course, given GM’s m.o., that’s a bit like predicting it’ll be “partly sunny with a chance of showers.” We’ve been calling-up the usual suspects to try and identify these not-so-glad tidings– to no avail. (Hey! What a great name for a Chevy!) But we’re getting closer. Deep Throat heard of our puzzlement and sent us a link to this story from Bloomberg. Seems one General Motors is getting ready to axe some damn thing, or a bunch of some damn things, in advance of its third quarter financial report (BIG owee) and next Friday’s announcement (we hear, also from a person familiar with this kind of shit) of the Chrysler merger. “General Motors Corp. may initiate a new round of cost cuts because a planned $15 billion in asset sales and savings won’t be enough to maintain its liquidity amid deteriorating sales, people familiar with the matter said.” Our equally unidentifiable but totally credible guy says “I think the bad news on Friday is more job cuts at GM and possibly the end for some products like the Solstice/Sky. Since the dealers were told to expect some bad news on this date, it has to be some product cuts. Run through last months sales report and pick out the obvious weaklings. DTS? STS? SRX? Hybrid trucks? Saturn Astra? Buick LaCrosse?” Sad to say DT, it could be just about anything that GM makes.

The Wall Street Journal is calling attention to the massive cash piles sitting around the offices of big oil re: falling stock prices. The solution to this problem? “Mr. Flannery argues that Big Oil will need to put cash into acquisitions to restore the battered share prices.” ExxonMobil alone is sitting on $39b despite buying back its own stock at a rate of $8b per quarter (it’s repurchased $218b of its shares over the past several years). General Motors’ total market capitalization of under $5b, and falling, makes it a target. OK, they have a few liability “issues.” But what’s good for GM is good for ExxonMobil. By deferring two months of its own stock buy backs ExxonMobil could gobble-up the world’s once and future king of cars. Think of the synergy! From exploration through production, marketing and finally right out the tailpipe; a truly global and integrated oil monster. Chevron, never one to be outdone by its sister company (both were once part of Standard Oil), is said to be eyeing Ford. With plunging demand dragging oil prices from $140 per barrel down to around $90, something must be done! Or not.

Our buddies at Autoblog have strapped on their brave pants, speculating that Toyota's LF-A supercar is DO-A. And there's plenty of evidence to back up their suspicion. There's no production date (not even 2010!), and a $225k price point that won't even pay off development costs. After an uncharacteristically unreliable 24 Hours of Nurburgring race, ToMoCo has opted for a soon-to-be-canceled SC430 silhouette on to its Super GT racer. Plus, Nurburgring testing crews and rival test drivers tell Autoblog that the LF-A is doomed to eternal test-bed status. All of which confirms that Toyota is no longer capable of producing quality performance cars. And reflects Lexus's shift in focus from performance to hybrid luxury. Meanwhile, Car Magazine reports that Honda's hybrid Open Study Model (OSM) will replace the elderly S2000 as Honda's mainline roadster. And they're not talking just styling cues either: the next S2000 will be a hybrid. Unfortunately, details are being held for Car's forthcoming print issue, so we still don't yet know exactly what flavor the hybrid will come in. If Honda's too-good-for-this-life Accord Hybrid is anything to go on, it could be something special.

Automotive News [sub] has a report on future models coming from Cadillac and it provides a lot of dots just begging to be connected. Among other things, Caddy is planning: a four-cylinder small sedan; an expanded CTS lineup that will include a coupe and sport wagon; and a redesigned SRX that only seats five and is between the Equinox/Vue and the current SRX in size. They've also decided to extend production of the DTS and STS without any further development but will eventually replace both with a single RWD sedan that "will be more competitive with the Mercedes E class and BMW 5 series." It's two other two things AN  mentioned that really caught my attention: GM is "studying the possibility of Cadillac's sharing GM's Chevrolet Volt technology" and there's a possibility they'll replace the Escalade with "a model or two developed on GM's fwd Lambda platform" by MY 2013. So let's connect those dots: GM's planning a small Cadillac that will take the brand further down the price scale while Chevy introduces a more expensive small car in their lineup. They're repositioning the SRX as a smaller 5-place CUV, just above the Equinox in size. They're keeping the Lucerne's platform-mate DTS around for a while to hang on to older barge-buyers. They're considering Caddy as the only other American division to share the Volt platform with Chevy. They're looking at a fifth version of the Lambda platform which will essentially overlap the Enclave while the upper trim levels of the Traverse do the same with the Saturn and GMC derivatives. To me all those dots form only one picture: they're aligning Cadillac and Chevy so they could cover the entire market with just those two brands if need be. Once that realignment is complete, it's just a matter of time before they can methodically axe Pontiac, Buick, GMC and Saturn. The question is, can they do it fast enough to salvage what's left of the company? Just sayin'

(The Automotive News article is printed in its entirety here.)

We have it from an insider that the bankrupt parts supplier Delphi is about to "downsize" its domestic ops. Not that it'll do them much good. Now that Appaloosa Investments and Friends bailed-out of Delphi's bail-out plan, the former GM division is on its last life. Although Delphi's suing its jilters, what are the odds that a judge can/will force Appaloosa to fork over the billions the money men didn't leave on the table? At best, more money will be lost on lawyers, all 'round. All of which means a Delphi Chapter 7 is just over the event horizon. GM will have to buy up (back) the Delphi bits it needs to keep building vehicles. And as GM's August 8th SEC filing points out, "In addition the Benefit Guarantees may be triggered which would result in additional liabilities to us. We may also be subject to additional litigation regarding Delphi." The flames of GM's cash conflagration continue… [thanks to you-know-who-you-are for the tip]

Technically, GM would have to build their rear wheel-drive Zeta-platform-based Cadillac and Buick flagships and THEN kill them for the cars to be D.O.A. Not to be pedantic (much), and keeping in mind the fact that I was the one who wrote that headline, if this rumor from GM Inside News is accurate, then GM's flagships are stillborn. In any case, it's another cut-and-paste moment for the ill-fated Zeta: on-again, off-again, on-again, off-again, on-again, off-again. And yes, I left one out. Or two. While we await confirmation, can there be any doubt that Car Czar Bob Lutz and his minions are an abject failure at product planning, lurching from crisis to crisis without any coherent long-term plans? I'm reading between the lines here, but it seems that even GM Inside News is fed-up with this "fluid" state of affairs. "If true, this is just yet another twist in the ever-changing product programs at GM. Recently there has been a lot of shuffling with the product programs to reflect the changing market and GM's current financial position. Stay tuned, I'm sure we'll have more soon!" Roger that. So to speak.

Rumor has it Rick's toast. Obviously, there's no way to officially confirm GM CEO Rick Wagoner's termination by GM's Board of Bystanders. But I want to state here, and for the record, that TTAC flagged Rick Wagoner as the wrong man at the wrong time in the wrong job from the moment we began our industry coverage. To those who say Wagoner made the best of a bad job, I call bullshit. The General Motors Death Watch and GM's financial record offer incontrovertible proof of Wagoner's ongoing managerial malfeasance. If nothing else, consider the fact that his administration relentlessly pursued a "we can cut our way to prosperity" philosophy. In this Wagoner has been deeply misguided. And misguiding. The CEO's failure to face the facts, both within GM and without, identify him for all time as a weak, ineffectual leader. Wagoner's lack of accountability– both personally and professionally– stands as an utter condemnation of GM's Board of Directors and America's "old school" corporate culture. Wagoner has pocketed over $100m and secured a bankruptcy-proof pension for himself and his heirs. His real legacy will be the psychological despair and economic misfortune of the one million-plus people whose livelihoods depend– depended– on General Motors' health and vitality. I'm sure Wagoner is a nice man, personally. I've never met a CEO of a major corporation who wasn't (and yes, I've met a few). But it's good riddance to bad rubbish.

We hear from various sources that GM is about to follow Chrysler's lead and stop leasing its vehicles in the North American market. The move is not entirely unexpected; the company that owns the now non-leasing Chrysler Financial– Cerberus– also owns 51 percent of GM's vehicle financing arm, GMAC. Canada's Windsor Star reports GM's no-deal as a done deal. "The financial arms of Chrysler LLC and General Motors Corp. are getting out of the business of leasing vehicles as credit tightens and resale prices for gas-quaffing trucks fall, according to company executives and independent sources." Quaffing? Don't all ICE vehicles quaff? Anyway, the lease cessation is bad news for ChryCo and GM dealers north of the border. "In Canada, an estimated 43% of drivers lease their vehicles, double the U.S. rate of 20%." Ouch. You know residuals are in free fall when a financing company walks away from that kind of action. Meanwhile… "Geoff Helby, an analyst with J.D. Power & Associates in Toronto, said Toyota Motor Corp. and other automakers that offer attractive lease rates and decent residual values could win more business from the Detroit automakers as a result of the move. 'It would definitely put Chrysler and GM at a serious disadvantage.'" Make that "will."

According to Autospies' spies, Volvo NA is shipping C30s "back to Sweden." Yes, well, the C1-based hatch is assembled in Ghent, Belgium. In any case, the C30 seems to be selling poorly; Volvo's dropped C30 prices in Australia and Old Blighty. This might have something to do with a $22k base price for what is, in essence, a tarted-up Focus. Though the C30 offers more cargo space than, say, a MINI Cooper, the C30's practicality is hurt by its awkward hatch shape. And then there's the Swede's EPA 20/28 mpg via a turbo I-5. The poisoned cherry on top: the Volvo brand is in the weeds, facing a date with Ford's corporate strimmer. Add it all up and the C30 boomerang story seems plausible. Throw a little anecdotal evidence into the mix (how many C30s have you seen on the road lately?) and well… if Volvo can't sell its smallest, most efficient car, what does that say about its odds of survival?

A few weeks back, we told you that some of Chrysler's component manufacturers have been running their plants full bore, even canceling holidays to meet Chrysler's production demands. They've even had to ship parts in cardboard because they didn't have enough of the usual plastic packaging. Now we've learned Chrysler has called a hard stop, throwing suppliers into a tailspin as they halt production lines that were running beyond capacity last week to keep up with orders. Plant managers are scrambling to determine new production levels so they can get lay-offs started as quickly as possible. Is this the beginning of the Chrysler meltdown? We'll keep you up on what's going on as we find out more.