My parents had many ways to traumatize me during my childhood holidays. Perhaps the most effective: taking me downtown to donate a hundred bucks to the local Ronald McDonald House. Don’t get me wrong; the charity could well be the best (only?) reason to eat a Filet-O-Fish. But a hundred bucks? That kind of money could have bought two copies of “Star Raiders” for the Atari 800. As it turns out, I’m not the only spoiled brat to resent a bit of charity, as the following Christmas list proves. It’s straight from my top-secret sources at the North Pole: a complete recap of what the more fortunate manufacturers are asking Santa for this year. We’ll start with Toyota.

“Dear Santa, we want a sack of Tundra tailgates that don’t bend when Americans sit on ‘em. We would also like some more of the green fairy dust that keeps the mainstream media from focusing on our ten gas-guzzling truck and SUV nameplates, while continuing to praise us for knocking out a couple hundred thousand hybrids every year.”

Maserati. “Dear Santa, you don’t have to bring us anything. Just take our remaining stock of 2008 Quattroportes and give them to someone deserving. Someone really wealthy, who can afford the service. What’s Mrs. Claus driving these days?”

Mercedes-Benz: “Herr Claus, please would you use one of those Men-In-Black neuralizers (a.k.a. flashy things) when you’re over our North American market. Get everyone to forget this ‘living within your means’ rubbish. Oh, and can you please remove memories of the first-generation ML320? Bitte.”

Mitsubishi: “Santa, we’d like a lump of coal. And a list of every Evo that’s ever run an autocross, so we can cancel all the warranties at once.”

Nissan: “Dear Santa, we’d like all the money back that we spent on that ‘From the Same Mindset’ ad campaign. It turns out that Murano customers don’t care about the GT-R’s fender vents after all. In exchange, we’ll look after something small and feeble that needs a new home. How about Chrysler?”

Porsche: “Dear Santa, we’ve been a bit naughty recently around the hedges (you know what we mean). But if we’re still on your list, we’d like the serenity to accept our massive profits, the strength to continue making grenade-like water-cooled engines, and the wisdom to convince our customers that the 911 is really worth half again as much as a Cayman.”

Subaru: “Dear Santa, we’ve just discovered that one of your elves is the guy who styled every Impreza since the year 2001. Please deliver him to us for a nice warm Christmas dinner. We’ll take care of the rest.”

Honda: “Dear Santa, we need  100k more transmissions for the Acura TL and CL, more mechanics to supplant the single full-time guy most Acura dealers have changing them out fifty hours a week. Also, some more alphabet soup to help us name our new vehicles.”

BMW: “Dear Santa. Can we please have a gift certificate for liposuction, plus another five thousand dollars per unit in 2009 to continue stuffing our lease programs with subvention like a drunk construction worker puts dirty singles in a daytime stripper’s thong? That is all.”

Bentley: “Dear Santa, don’t worry about us. Just stick bags of cash under the trees of rappers, professional atheletes, misguided car collectors and the guys in Brussels who make the rules about CO2 emissions.”

GM: “Dear Santa, Peace on Earth, good will to us. P.S. Who knew you delivered early?”

Chrysler: “Dear Santa, Please can we keep that cloak of invisibility another year?”

Ford: “At this point, we’d just like a chance to continue making the strongest lineup of domestic cars and trucks in modern history entirely on our own, without the constant fear of supplier failure, residual-value collapse, crucifixion in the business press, Stockholm-syndrome Southern senators, suicidal UAW demands, and know-nothing bloggers who swear up and down that they would crawl over broken glass to buy a ‘Euro Focus’ while studiously avoiding doing so much as opening the door of a Saturn Astra. Also, it would really, really be nice if people stopped calling our now-discontinued wood-side luxury pickup truck the ‘Black ‘N Da Hood’. Thanks.”

A short overview of what happened in other parts of the world while you were in bed. TTAC provides round-the-clock coverage of everything that has wheels. Or has its wheels coming off. For the next two weeks, WAS will be filed from Tokyo.

Bad November for Toyota: Toyota’s Japanese production dropped 27.2 percent in November from a year earlier to 288,138 vehicles as exports sagged 23.9 percent and domestic sales skidded 27.6 percent Overseas production fell 26.1 percent to 301,367 in the month. Other Japanese companies share in the misery, but not as much as ToMoCo: Honda down 3.9 percent in November. Mazda minus 19.8 percent. Suzuki shed 7.3 percent, writes the Nikkei (sub)

Itai-itai!: Nissan’s and Mitsubishi’s numbers came in by the end of the day in Tokyo, and they are nasty: Nissan’s domestic output shrank by 35.6 percent in November, their exports tanked by 30.2 percent, the Japanese domestic sales down 22.8 percent. Mitsubishi not much better: Output in Japan down 2.6 percent.  November exports minus 13.8 percent. Domestic (Japanese) sales evaporated to the tune of minus 31.1 percent. The Nikkei (sub) carries this moral-enhancing comment: “Some analysts warn that earnings could get worse further down the road, indicating more output drops may come.” Kota Yuzawa, analyst at Goldman Sachs, said: “We still cannot see an earnings bottom.”

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The U.S. new car market is officially dead in the water. Well, not officially officially. As the UK’s Guardian points out, December’s best selling days are its last. But the paper quotes Edmunds projection for the month’s sales, and it’s an unmitigated disaster. Edmunds expects December auto sales to crater to 9.8m units. “That would represent a further decline from 10.2 million units in November, which marked 26-year lows.” Sales analyst Jesse Toprak expects U.S. new vehicle sales to fall by more than 38 percent in December. More specifically, “Chrysler… is expected to lead the industry decline with a more than 45 percent plunge in December sales… while GM sales are seen down 39 percent and Ford sales down 34 percent. Toyota Motor Corp, Honda Motor Co and Nissan Motor Co are all expected to report declines of about 40 percent.” BarClays Capital analyst Brian Johnson predicts bad things for Detroit’s hometown hero. “We continue to see little equity value in the restructured GM. A greater decline in sales raises the possibility for additional funding needs.” Any guesses who pays that bill?

A short overview of what happened in other parts of the world while you were in bed. TTAC provides round-the-clock coverage of everything that has wheels. Or has its wheels coming off. For the next two weeks, WAS will be filed from Tokyo.

Toyota doesn’t just sit there. They do something: Toyota is facing its first full-year loss ever, $1.68b for the whole fiscal 2008. Never mind that this is approximately the cash GM burns through in a bad month. For Toyota, it is a huge embarrassment. Toyota will do immediately what GM ignored: Embark on drastic production changes. “The speed, breadth and depth of the global economic downturn is beyond what we had imagined,” says Toyota President Katsuaki Watanabe. Their measures will be likewise drastic. Toyota aims to revamp its operations so that it can turn a profit even if parent-only sales fall by 17% from 2007 results. All new production upgrades, including the opening of a plant in the U.S. state of Mississippi scheduled for 2010, will be postponed or scaled down. Capital spending planned for fiscal 2009 will be cut 30 percent to less than 1 trillion yen. For starters. By the way, directors will forgo their bonuses this fiscal year.

Nissan likewise: Nissan is reevaluating its plans for new factories and may postpone construction or scale back the size of some of them, Chief Operating Officer Toshiyuki Shiga said to The Nikkei (sub.) Nissan had plans to build a new factory in Russia in 2009 and new plants in India, Morocco and China in 2010. In addition, its subsidiary Nissan Shatai Co. had plans to build a new car body assembly plant next year in Kyushu. All of these plans are under review.

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Last Friday was a good news day for Detroit. No, I’m not talking about President Bush’s loan package. That wasn’t so much good news as a stay of execution, with a case on appeal. And it wasn’t shadenfreude. What joy can anyone in the auto biz take from the reports that previously invincible Honda is losing money and cutting production? Or that Prius sales are down 50 percent, Toyota has suspended work on their proposed Prius plant in Mississippi, and the company will have a loss this fiscal year, the first in 71 years? No, the good news came, from all places, The Michigan legislature.

The august body passed legislation funding projects that could help the city of Detroit recover economically. What got the most attention, both from the general media and from car folks: a $288m dollar plan between the state, the city of Detroit and Wayne, Oakland Macomb counties. The partnership will improve and expand Cobo Hall (by 166k sq. ft.) to provide more space for exhibitors and allow Detroit to keep the North American International Auto Show (NAIAS). The refreshed and enlarged Cobo will join the newly renovated Book Cadillac hotel in the effort to increase Detroit’s convention business.

The legislature also funded a 3.5 mile light rail transit system to link the New Center area and downtown. This will also help convention business, as well as nurturing the nascent development along the Woodward corridor in recent years.

Otherwise, meanwhile, let’s face it, it hasn’t been a good year for the Detroit auto show. Nissan/Infiniti and Mitsubishi dropped their factory displays. Porsche, Land Rover, Ferrari and Rolls Royce pulled out entirely, That’s notwithstanding the success of last year’s “Gallery” program, which gave hundreds of well-heeled guests from around the country a private showing. A marketing event that racked-up a reported $3m worth of luxury car sales.

In a speech to the Detroit Economic Club, NAIAS’ senior co-chairman acknowledged the “dire times” facing the auto industry. Joe Serra sold the silver lining, asserting that the departing manufacturers had opened the door to other companies who wanted in. In fact, Serra said the total number of exhibitors on both floors will increase by two, and there will be more world premieres this year than last.

Still, this year’s NAIAS will be a low-key event. The New York Times reckons you can tell how the domestic auto industry is doing by the size of the shrimp at the Detroit auto show media preview. This year, swag shrimp of any size will be few and far between. Chrysler will forgo their usual showbiz introductions; all the manufacturers will have simpler displays. They’ll be fewer pretty girls, less glitz and more focus on product and business plans.

That said, the incrementally increased number of exhibitors will be displaying cars of particular interest to enthusiasts. The Bugatti Veyron will make its first ever NAIAS appearance. Lotus will have its first factory NAIAS display.

The success of the Elise and derivatives, as well as Lotus’ involvement in the development of Chrysler’s EV sports car, makes a NAIAS booth for Lotus a natural idea. Technology partner and electric car pioneer Tesla will have also have its first Detroit auto show factory booth, hawking their lithium-ion-powered Roadster. Self-appointed Tesla CEO Elon Musk will be speaking to the Society of Automotive Analysts at a NAIAS related event on January 13.

Also on the electric car front, Chinese automaker BYD plans to use the NAIAS to introduce a serial hybrid with a 60-mile batteries-only range. BYD produces about 25 percent of the world’s cell phone batteries, so they may have a leg up on other manufacturers’ electric plans. China’s Brilliance Auto will display for the first time. Along with BYD, Brilliance will be the first Chinese manufacturers to display on the main floor in Detroit.

Meanwhile, there’s other game afoot. To keep Michigan in the running for tomorrow’s battery technology, the state legislature approved a tax credit package intended to make the state a national center for the development of batteries for transportation. The bill will provide up to $335m in tax credits from 2001 to 2016.

Legislators and Gov. Granholm hope that the tax credits will help Michigan businesses access the $1b that Uncle Sam’s investing in battery research. While it would be better if the news was about private sector investment instead of government funding, it’s nice to see the state and federal government offerring local industry and innovation a helping hand.

A short overview of what happened in other parts of the world while you were in bed. TTAC provides round-the-clock coverage of everything that has wheels. Or has its wheels coming off. For the next two weeks, WAS will be filed from Tokyo.

Toyota officially in the reds for 2008: Toyota announced today what we had reported a few days ago: “Toyota will make its first-ever operating loss in the fiscal year through March as recessions at home and abroad corral Japan’s biggest automobile maker into as tight a corner as it has ever known,” the Nikkei writes. The dark stars are in perfect alignment: The yen is too strong, the slump in vehicle sales in key markets like the U.S., Europe and Japan is too big. Toyota expects a consolidated operating loss of Y150 billion, or about $1.68 billion, in the fiscal year through March. Six weeks ago, the company still expected an operating profit of Y600 billion in the current fiscal year. Now, “it’s a kind of emergency that we’ve never experienced before,” said Toyota President Katsuaki Watanabe, speaking at a news conference in Nagoya. “The environment surrounding us is extremely harsh.”  The Toyota stock went up on the news. The market had expected worse.

Daihatsu slimming also: In related news, Toyota’s small-car-making subsidiary Daihatsusaid it will cut domestic automobile production by a another 16,000 units, and will shed about 20% of its temporary work force,  the Nikkei (sub) reports.

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Apart from keeping an eye on the imploding world economy, North Korea’s nuclear ambitions, Iran’s nuclear ambitions, the war in Iraq, the war in Afghanistan, a Russia that is flexing its muscles, and other minor annoyances, “the incoming Obama administration is closely monitoring the innovative electric car project being developed by Israel’s Better Place company,” writes the Jerusalem Post. Idan Ofer, chairman of Better Place, says [hopes?] that Obama “may be adopting it.” Also according to Ofer “a leading US car manufacturer” is “putting together a team” to work on the project. Now who might that be? “Renault-Nissan agreed 18 months ago to build the first cars, and will be mass-producing hundreds of thousands of the electric-powered vehicles by 2010,” Ofer said to the paper. So why the need for a leading US car manufacturer? For all we know, the US car manufacturers are leading straight into C11.

Ofer doesn’t suffer from a lack of self-esteem. When “you hear announcements” from the incoming administration about reviving Detroit with electric cars, job creation in battery factories and modernizing the national electricity grid, the Better Place chairman reckons “you’ll know that it will have come from us.”

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“La plus belles des ruses du diable est de vous persuader qu’il n’existe pas.” Baudelaire, straight out of The Usual Suspects. And while the world focuses on the usual suspects of the auto-industry collapse, something odd is happening over in a shadowy corner: Honda is running scared. It’s been less than four months since the Civic sold more than fifty-two thousand units in a single month, toppling the almighty F-150 from its two-decade-long run as the best-selling vehicle in the United States, but if anybody at the Big H is celebrating, they’ve apparently decided to hide their exuberant light under a bushel of program cancellations, production cutbacks, and a panicky sale of their backmarking F1 team. Why? Surely, if anybody’s in good shape to survive the coming catastrophe, it’s Honda; they have the small cars people “want,” unimpeachable planet-friendly credentials, and a solid base of non-union production. What’s causing them to huddle behind their hurricane shelters? The answer’s simple: when it comes to Honda, reality is very, very far away from the public perception.

Americans are accustomed to thinking of Honda, Toyota, and Nissan as being the “Big Three” of Japanese auto production. Not quite. Honda sells more Civics in the United States than they do cars in Japan. A quick troll through Honda’s annual report reveals a corporate iceberg: The tip: Japanese-market auto and motorcycle sales. The nine-tenths below the surface: North American cars-– and Chinese scooters (by unit volume are Honda’s best-selling products).

More than any other Asian automaker, Honda’s fortunes are tied to the United States. The collapse of the American auto market would effectively turn back the company’s clock to 1970, making them once again a small-time producer of two-wheeled vehicles for emerging markets.

So what? Honda’s the small car company! Surely, they’ll benefit more than anyone else from the recession-that-isn’t-quite-yet-a-depression? Not so fast…

When Honda began producing Accords in Ohio twenty-six years ago, all of their cars were smaller than a Chevrolet Citation. Today, the upmarket versions of the Accord tip the scales at close to two tons, while the Civic is bigger than BMW’s 135i. The 2009 Fit is certainly small, but in stick-shift form it can’t even match the Chevrolet Cobalt XFE or (gasp) Ford Focus for EPA highway mileage.

Time for that iceberg analogy again: the public image of Honda in the United States is as a purveyor of small, fuel-efficient models, but the bulk of their sales happen below the water with the Accord, the Acura TL, the forty-five-hundred-pound Pilot and the Cyclops-sized Odyssey. Nor could Honda quickly change their Marysville, Ohio and Lincoln, Alabama plants over to small-car production; these facilities are built around Accord-width vehicles and would require a nontrivial investment of time and money to retool.

Faced with a market which preferred the Fit to the Acura MDX, Honda might just do the easy thing and bring Fits in from their Chinese factories, allowing them to scale back US production to the bare bones.

Honda has plenty of money in reserve– over nine billion dollars in cash and investments. As we’ve seen in the past few months, it’s easy to burn through billions of dollars if you can’t move the metal. Some of that money will also be needed to expand motorcycle production for the Chinese market, and you can bet that, given a choice between spending money in a collapsing American economy or making money in an expanding Chinese one, Honda’s board of directors will choose the sure thing.

While relatively adventurous by the standards of other Japanese companies, Honda doesn’t like to take any risks which aren’t absolutely necessary to its survival.

That same relentless pragmatism has informed Honda’s indifferent attitude towards its enthusiast owner base in the past decade. It has now been a full decade since Honda introduced a new sporting vehicle for the American market. The S2000, introduced to compete with the BMW Z3 and first-generation Boxster, now faces the second-generation Z4 and the second variant of the second-generation Porsche. The Acura NSX, fresh from the indignities of a bug-eyed facelift and a mercy killing, is now officially an orphan.

When times are good, Honda doesn’t do much for their biggest fans; when times are tough, it does nothing at all. The company which powered the mighty Ayrton Senna to three World Championships has just abandoned his nephew Bruno in its ignominious quick-march backwards from Formula One, an unfortunate coincidence that emphasizes Honda’s unsentimental attitude towards the men and women who are fans, not merely owners.

In a perfect world, Honda’s reaction to an economic crisis would be the creation of exciting, enthusiastic cars that met the needs of the economist, the enthusiast and the environmentalist in one brilliant design. It’s happened before: the 1989 Civic Si that I am contracted to drive in NASA’s endurance-race series next year is a prime example of a car that was all things to all small-car buyers. Today’s tubby Civic, lumbering beneath the burden of half again as much weight as its predecessors, isn’t the car for the job, and two-ton Accords won’t carry the company very far into a fuel-starved twenty-first century.

Perhaps the new Insight will be the answer to Honda’s problems. I suspect it will be nothing more than a pale Prius copy. The next generation of Honda cars needs to recapture the tradition of those brilliant early Civics and Accords. More importantly, the company needs to recapture its bond with its most fanatical owners. Without that bond, well, another quote from The Usual Suspects: “And like that, poof. He’s gone.”

A short overview of what happened in other parts of the world while you were in bed. TTAC provides round-the-clock coverage of everything that has wheels. Or has its wheels coming off. Note: For the next two weeks, WAS will be filed from Tokyo.

Cerberus wants to unload Chrysler, keep GMAC: That’s what Automotive News says. I’m sure TTAC’s day shift will have more on this.

Honda uses the F-word: Honda President Takeo Fukui had already dropped hints about locating the Honda HQ outside the land of the rising yen. Now, even more sinister threats. Fukui said to the Nikkei (sub) that Honda “may have to abandon one of its key principles of protecting the jobs of its full-time workers next year, if the Japanese currency remains at current levels of around 90 yen to the dollar.” That means F as in fire, unless the effing Yen is getting cheaper against the greenback. Honda is bracing for a group operating loss of 190 billion yen in the second half of the current fiscal year. “I think the dollar will move back to above 100 yen because the level of below 90 yen is abnormal,” Fukui said. Hint, hint, hint.

Toyota and Fuji Heavy put joint sports car on back burner: Toyota decided to delay the compact sports car it has been developing with Fuji Heavy, the Nikkei (sub) writes. The two automakers had planned to begin manufacturing the car in late 2011 for the domestic market, but the start of production will now likely be postponed until 2012 or later.

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Ah ha ha ha — I’m still having a ball. I love these X vs. Y QOTDs. Maybe it’s time for a new feature? Hmmm… Anyhow, there are a lot of people (er, were a lot of people) that purchase two-door sports coupes. So many in fact that Nissan’s on their 6th iteration of the Z and Ford’s Mustang is older than most people. Last week through, uh, fate, I was able to drive the 2010 versions of each car (Mustang review here ,370Z here). And as different as they are, man, are they the same. The Z makes do with “just” six cylinders yet weighs about 200 pounds less than the more powerful V8 ‘Stang. Therefore performance is nearly identical. In fact, so close that it just doesn’t matter. But surely the IRS Nissan has the edge over the live axle Mustang in the handling department, right? The 370Z might be able to provide flashier numbers on a skid pad, but on the street? The two cars feel equally capable. Looks? Take your pick — both cars are muscular, handsome, loaded with retro cues yet modern. Hamburger vs. Sushi? Depends on my mood — one has no inherent advantage over the other. 5-speed vs. 6-speed? I prefer 4-speeds. Interiors? Both are good, not great. So, how then? Here’s the thing — Nissan swore up and down that when they were developing the 370Z they didn’t bother to benchmark the Mustang. Porsche Cayman? Yes. BMW Z4? Yes. Audi TT? Yes. But while they were playing footsies with the Germans, Ford went ahead and developed the Bullitt, one of the greatest cars of the last 10 years. And the 2010 Mustang GT is a better Bullitt. So yeah, Mustang for me. You?

A short overview of what happened in other parts of the world while you were in bed. TTAC provides round-the-clock coverage of everything that has wheels. Or has its wheels coming off.

Nikkei: GM & Chrysler talking again: The biggest news in Japan today is that “General Motors Corp. and Chrysler LLC have reopened merger talks, as Chrysler owner Cerberus Capital Management LP has signaled its willingness to give away part of its ownership in the auto maker,” the Nikkei (sub) writes. The Tokyo paper assumes that “the renewal of the talks could be a way for Cerberus to show Washington — which is weighing a $14 billion rescue package for the auto industry — that it wants to cooperate in restructuring the industry.” Japan is very worried about any of the D2.8 going out of business, as it would decimate the supplier base of their transplants.

Japan on slim-fast: The Japanese are skinny already, pocha-pocha (chubby,) or even debu-debu (fat,) are a rare sight in the land of sushi. Prepare for even leaner figures, the Nikkei (sub) writes. “The situation is worsening day by day,” Honda President Takeo Fukui said yesterday, “no signs of a recovery are in sight.” In addition to the austerity measures already announced by Honda, there are more: One year delayed  are a new factory in Yorii, and a new R&D center in Sakura, originally scheduled to come on-stream in 2010. Honda group firm Yachiyo Industry likewise delayed their new factory in Yokkaichi by slightly more than a year. Nissan said yesterday that it will reduce domestic car output by and additional 78,000 units than previously planned. The Nikkei: “Freshly revised production figures from Honda and Nissan have increased the total planned worldwide output cut by Japanese automakers for fiscal 2008 to slightly more than 2.2 million.”

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The car bloggers went sub-ballistic (what would that be, scientists?) today because Honda announced that it was killing the NSX project. Well, I say good riddance to a stupid idea. I’m in that camp of people that thinks the original NSX is the very rare car that came out perfectly. And while many people have admonished me for clinging to outdated conceptions of what a particular car or company “should” be (like the 1-Series not being a suitable sucessor to the 2002, or the Subaru Forester betraying its goofwagon roots), I can’t understand the business case for a front-engined V10 Acura NSX. Trickle down tech? Maybe – though certainly not the V10 engine, unless it was going to be tacking two extra cylinders onto Honda’s already dubious planned V8. Front engine supercar? Plenty of those out there. Expensive? Again, plenty of those out there. Lexus reportedly cancelled its LF-A program because it was clear that they weren’t going to take down Godzilla (the Nissan GT-R). So why would Acura plan differently? I think people would welcome a modern version of the original NSX concept, though – a mid-engined car with the best handling in the world, a great gearbox, and a relatively simple V6 or V8 engine. Or, as Lieberman says in the podcast – Honda’s version of a Ferrari F430. Sold.

Question: How do you age a car ten years in seven? Answer: release the world beating GT-R. Sure, cars have advanced considerably since the 350Z debuted in 2002, but after riding around in one a coupe months back the truth became self-evident: this dog no longer hunts. In fact, it felt like a 4th Gen Camaro — all engine and odd squeaks. No one saw the writing on the wall as clearly as Nissan. Hence the brand spanking nouveau 370Z. But is it any good?

A short overview of what happened in other parts of the world while you were in bed. TTAC provides round-the-clock coverage of everything that has wheels. Or has its wheels coming off.

D2.8 may get unexpected break – strength from weakness: The money-losing automakers made at least some money in some foreign markets. However, the recent strength of the greenback wasn’t in their favor. In July, a profit of one Euro translated into a $1.6. But what counts is when the books are closed, and that usually happens at year end. The recent strength of the dollar made foreign profits look less juicy. In October, that one Euro profit was worth only $1.23 – ever since, the Euro bounced around in the $1.25 to $1.29 range, which worried CFOs with foreign profits to no end. In the last few days, a miracle happed: The dollar got weaker. In the last few days, the Euro shot up into the $1.40 range, and it may even climb some more. With a little luck, and some end of year central bank machinations, a profit of one Euro could translate into a $1.50 by year’s end. Which will look quite good in the books. The bad news: If you have foreign losses, it will have just the opposite effect.

Nissan cuts output: Nissan wanted to make 1.38m units worldwide in their 2008 fiscal year, which ends in March 2009. That plan is no more: Nissan will end the year with 230,000 units less, a reduction of approximately 17 percent, the Nikkei (sub) reports today. Nissan will also eliminate “all nonpermanent positions” by March, becoming the first major Japanese automaker to ever do so. Starting in January, assembly work will be suspended for several days a month at two factories in Japan. Production speeds will be slowed. By March, all temporary workers will be gone. Any further layoffs, and the (in Japan) sacrosanct permanent workforce will be affected.

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It’s that time of the year when industry pundits [usually] run out of news. Normally, this leads to retrospective reflection and informed speculation. The autoblogosphere has been pretty bad at this, of late. They missed  carmageddon more or less completely, treating Detroit’s BS like the Lord’s own gospel. That said, TTAC has offered its share of botched timelines and devil-may-care details. One nice, unforeseen twist: Ford. CEO Alan Mulally flew in from Seattle and kicked some Blue Oval butt. As a result, I give FoMoCo a chance of making it– albeit a shot rather than a dead cert. Ford must withstand the fallout to come, as GM and Chrysler head for bankruptcy. Now that’s for sure– regardless of the automakers’ progress on Capitol Hill of Pennsylvania Avenue. While I’m at it, I’ll go out on a limb and make some more predictions for 2009.

Near Term – Next Few Months

I repeat: the U.S. federal government will bail out Detroit. Despite the Republican Senators’ moaning and groaning and defeat of the first go-around, the money will head for Motown– even though the bailout billions only delay the reckoning day for a few months. Plenty of TTAC fodder ahead as we watch GM and Chrysler try to negotiate with their creditors and the UAW.

GMAC will avoid going bankrupt– barely. The debt exchange hasn’t been going down well with bondholders; it’s now on its last iteration with plenty of sweeteners. But they’ll make it across the finish line. GMAC will convert to a bank holding company and voila! Another government bailout via TARP. Too bad its base of principal customers– GM dealers and their car buyers– is gonna be much smaller. And soon. Another bad deal for Cerberus. No tears here.

Auto sales will still suck. Yep, the entire first quarter will be a disaster for everyone. More dealers will fail; at least a thousand. All manufacturers will cut production. Again.

Transplants’ fear of the UAW organizing their plants has disappeared. Their workers know for certain that union affiliation has zero benefits (as if it ever did before). The Republican bailout bill mandated that Detroit blue-collar working stiffs get paid the same as Toyota workers today, not in the future. In the next Congressional go-around, the Republicans will stick to their guns on their “wage parity” demand. So why would transplant workers consider organizing and give two hours a month of pay for union dues and get nothing in return? Answer they wouldn’t.

Toyota and Honda will furlough employees.

Ford’s MY2010 Fusion will get [more] rave reviews. Three years since the launch of the Hermosillo trio, Ford’s redesigned and reengineered C/D mid-size vehicle will be hailed as a true competitor to the Camcord duo. FoMoCo’s four cylinder EcoBoost will provide more power with better fuel economy than any engine from the Japanese. And the Fusion hybrid, with its US-sourced technology, will officially beat the pants off Toyota’s hybrid. Only problem: low gas prices mean no one will care.

Mid Term – Next Spring/Summer

Assuming the government steps up this week with a federal grant (a.k.a. loan) now, GM and Chrysler will go belly-up later. Over the winter, the financial situation at both companies will worsen, and the cash burn will increase. There’s not enough emergency money in the government kitty. Worse, the attempts to get reorganized outside of bankruptcy will fail miserably; every single creditor will want a better deal. The UAW will show its real intentions: no sacrifices. “We already gave.”

The car czar will have no enforcement power to make the deal work. And even if he does, the cuts required will be so drastic that they border on ridiculous (at least outside of bankruptcy).

Cerberus will refuse to support Chrysler. It will go straight to Chapter 7.

Congress will step in with Debtor-in-Possession (DIP) financing for GM. Expediting the bankruptcy, cutting out any negotiation in the bankruptcy process among creditors, will be allowed as a “national matter.” Some will cry foul, but Obama will take the lead from his “bully pulpit.” Hard to argue with the President – makes you look bad.

The biggest losers will be the bondholders – the hedge guys get their knees chopped off in the non-negotiated reorganization. Amazingly, GM will still believes it can support its multiplicity of brands. Thankfully, Rick Wagoner will resign (forced out) and take rest of the Board with him to Aruba. The new CEO will call the game: Chevrolet and Cadillac are the “go forward” brands. The Swedish government will take on Saab (and Volvo from Ford). Every other GM brand will die.

Ford will get close to seeking government assistance, but instead tap its credit line. Ford will count on picking up sales as Chrysler folds, especially in the truck business. CEO Alan Mulally will decide not to replace Chrysler’s foregone rental fleet business with his own vehiclesl he will figure that nameplate devaluation will be too severe. GM will jump on with the business along with Hyundia, Kia, Nissan,and Toyota. But Ford will have a new problem: GM’s cost basis will be lower than Ford’s.

Long Term – Fall

Ford will negotiate a partial debt for equity swap with its debt holders. The deal will dillute current shareholders but the possibility of prosperity is on the horizon. Mulally will keep the Ford jet and his paycheck. Time will name him “Person of the Year.”

GM will undergo a painful restructuring. The dealer body count will fall drastically. Half of GM’s labor force will get shown the door, with little compensation. The UAW’s health care VEBA superfund will get stock in the new GM but little cash. It will be enough to give UAW retirees full health care coverage short term, but it will only be a promise for the future. Ouch.

Parts of Chrysler will find their way to other car companies. Mostly to GM, which will get the minivan business. Ford will scarf the Jeep brand but only pick up the Wrangler. Nissan will pass on the Saltillo truck plant, rightly  figuring it can never compete with Ford, GM and Toyota in the pick up market.

As the credit crisis passes, car sales will rebound late in the second half of 2009. But to everyone’s chagrin, car prices actually increase, forcing folks to “trade down.” This plays right into Ford’s 2010 playbook with its line up of well-equipped small cars.

What say you?