With Bob Lutz pounding the media pavement for his credibility-challenged boss, it was only a matter of time before someone really hit the Maximum-quote jackpot. Chalk up a doozy for CNN, who snagged Lutz for its “American Morning” show, and got an interview which proves why Lutz was being kept away from bailout talk in the first place. The honesty flowed like single-malt in a boardroom from the very first question. When asked what GM would do with the $15b to ensure its survival, Lutz hedges, answering “this is simply a bridge loan which will get us into the next administration, where we hope we can do something more fundamental. Because the main problem is the lack of liquidity and the lack of revenue flowing in as we’re facing absolutely the lowest, lowest car market in history, and it’s not just the domestics.” AM anchor John Roberts, smelling blood in the water, presses Lutz. “You don’t see Toyota and Honda coming to the government for a handout. But based on what you said there — that this is just the beginning — you’re going to need more money next year?” To which Lutz replies “I think that’s a reasonable assumption.” Reasonable, eh? Read More >

Good morning! Slept well? Here is what happened in the meantime. TTAC provides round-the-clock coverage of everything that has wheels. Or has its wheels coming off.

Running into a BRIC wall: The emerging BRIC markets (Brazil, Russia, India, China) are running low on gas, The Nikkei (sub) reports. Passenger-car sales in China dropped 10% on the year in November. Sales in Russia declined for the first time since 2002. Sales in Brazil and India are also falling. The Nikkei: “This is bad news for automakers, which had hoped to offset slower sales in Europe and the U.S. with growth in the emerging markets.” TTAC: The BRIC countries will save the numbers of the international automakers for 2008. For 2009, BRIC will be of as much help as an empty BIC.

Japan putting the brakes on BRIC: In related news, Japanese makers are stepping on their BRIC brakes, The Nikkei (sub) says. Nissan postponed the start of operations at a joint venture factory for small commercial vehicles in India. Honda delayed by more than one year the launch of their second plant in India. Toyota is modifying its overall investment plan and may change the starting date for a plant that it is building in China. In Russia, Nissan plans to start a new factory in 2009. Suzuki wants to follow in 2010, Mitsubishi in 2011. The Nikei: “These plans could be derailed by tepid demand.” For the seven Japanese manufacturers of passenger cars, sales in emerging markets totaled approximately $150b in fiscal 2007. Better luck for the Germans …

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The nominations for TTAC’s Ten Worst Vehicles 2008 are in. All of last year’s winners [still in production] garnered repeat nominations. In total, there are 121 automobiles that TTAC’s Best and Brightest consider to be the Worst and Dullest. Our capable writing staff (and the rest of them) now has the difficult task of separating the merely bad from the inexcusably execrable. While we wait on their verdict, here’s a summary of what we have so far, and why.

In spite of the love heaped on hybrids by the “me-too” media, Hollywood hollowheads, auto execs looking for handouts and politicians going for green (of one sort or another), the gas – electric genre took it on the chin. The discussion on the Toyota Prius’ whitebreadiatitude almost came to cyber-blows (don’t ask). Meanwhile, commentators nominated several vehicles’ hybrid version (GMT-900s, Vue, Malibu, Aura, Aspen and Durango). So what’s wrong with these fuel misers?

On the GMT-900s (including the ever-popular Cadillac Escalade Hybrid), psarhjinian says, “A Venn diagram with environmentalists in one circle and full-size BOF truck buyers in another wouldn’t be a Venn diagram. It’d be two separate circles. On two different pages. Probably in two different books. Possibly not even in the same building.”

Jaje feels Chrysler missed the same boat with their Chrysler Aspen and Dodge Durango two-mode gas – electric models: “Chrysler again late to the game answered a question nobody ever cared about.”

Kurt B thinks the Vue Hybrid goes overboard on trying for the green image. “How many HYBRID stickers and badges can you put on one vehicle??? Owners should be supplied with a hair dryer, fishing wire and a can of WD-40.”

And GM’s lackadaisical attempt with the Malibu and Aura Hybrids struck Stevelovescars as just plain wrong. “They are a weak effort and the new 6-speed auto/4-cylinder engine delivers nearly identical mileage for less money. I bet they could sell you little “hybrid” badges to glue on the fenders of the base Malibu for $200 and it would make a bigger difference in attracting green-minded buyers to their showrooms.”

Hybrid anti-hype aside, commentators nominated vehicles for a variety of reasons. Some felt that bad marketing was reason enough for a vehicle to earn its date with infamy. The VW Routan (“Stick a VW badge on a Voyager and call it “German Engineering”? Oh please!” – Giltibo) and Jeep Compass (“a so-so small CUV that has NO place in a Jeep showroom” – Red Stapler) lead that particular pack.

Others felt that abject blandness justified a place on the list. In this, the Toyota Corolla was the pabulum poster child: “Most boring car I have ever driven. Looked at one for my fiance and she said the same thing (and she generally has no opinion about cars.” – shabatski.

No question: TTAC’s Best and Brightest go their own way in matters automotive. Four of Car and Driver’s 10Best were nominated for TTAC’s Ten Worst. These were the BMW 3-series (“The bigger is better theory has bloated the once nimble 3 series into former 5 series territory” – JTParts), the Honda Accord (“Japanese re-incarnation of the Ford Taurus. Overweight, too large, poor dash materials and bad styling.” – wolffman), the Honda Fit (“in typical Honda fashion, the outgoing model had better fuel economy… Even in the same Honda showroom you can get a Civic with more power and better fuel economy for the same price as a Fit.” – njoneer), and the Porsche Boxster (“Have crank will travel. Feel comfortable on the camskin while you wait for the tow truck to arrive.” – Bubba Gump).

You have to wonder what criteria C/D uses to select their “Best” when an informed group of gearheads thinks 40 percent of them actually belong among the “Worst.” Or, in C/D’s case, not. Anyway, the non-hits keep happening…

Seth L took Acura to task for the aesthetics of their latest offerings: “The new TL and TSX are ugly, bloated, and worse then their predecessors in most ways.” Steve Lang waxed eloquent about the car everyone loves to hate: “The Sebring though is just a hideous creature made out of 1700 Tonka toys. If it were any more plastic, it would be made in Hollywood.”  And y2kdcar’s progeny wondered what was going in BMW’s styling studios: “I pointed [an X6] out to my 12-year-old son, who immediately dissed it for being as ugly as the Pontiac Aztek and asked why a company would design something so hideous. I didn’t have a good answer for him.”

Historically, the previous year’s winners have been the front runners in the nominations process. So will the Chevrolet Aveo, HUMMER H2, Saab 9-7X, Chrysler Aspen and Jeep Compass make it a three-peat? Or has someone managed to come-up with something so abysmal it’ll usurp these perennial favorites? We’ll know soon. Voting to select TTAC’s Ten Worst Vehicles for 2008 commences on Friday.

[Click here for a pdf of all 121 nominees]

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?

Please keep this email anonymous. I currently work for GM Holden in Australia. This is my second stint at Holden. As you may know Holden is an Iconic Australian brand that unfortunately has GM Cancer. Holden has always been successful in delivering pretty good rear wheel drive cars at good prices. Until, however we got caught up in the GM world with the GTO program. My first time at Holden was in 2000. It was a place were everybody was proud of what we did, knew what had to be done. Now it is a shell of its former self, with people totally beaten into submission. The last 18 months doing Camaro has really smashed Holden and its talented workforce. It replaced just about all of the Australian management with Americans with no experience in the Australian market, and could not be told they were wrong.

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Thanks to our new feature– What Wrong With This Picture (3WTP)– I am trained in the fine art of anomaly spotting. So when I saw this Autobloggreen (ABG) photo of Emmy Rossum filling-up her Blue Tec Merc with diesel, the cognitive dissonance nearly deafened me. First, check the posture. Emmy’s feet are way too close together for proper pumping. Second, the shoes. Have you ever tried driving an SUV in high heels? (Trust me, it’s not a good idea.) Third, why is she looking at the pump? I highly doubt she’s worried about the price. And if she was worried about nozzle blowback, she’d already be standing away from the vehicle. And then there’s the photog’s reflection. Only professional photogs assume that kind of contorted position, or use such a huge aperture (the camera). And so I read the text, which seemed to indicate that this is some kind of trend: celebs ditching Priora for Mercedes BlueTec diesel SUVs. Which makes no sense whatsoever. “Recently the likes of Naomi Watts, Kyle MacLachlan and Gary Oldman have been turning up driving Mercedes-Benz BlueTec diesels like the ML320 and E320. While these vehicles are not in the same green class as the Toyota, the do offer the other attributes of a Benz with much better fuel efficiency than gasoline-powered alternatives.” Which sounds an awful lot like PR copy to me…

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The BS has landed, and WAS is back. TTAC provides round-the-clock coverage of everything that has wheels. Or has its wheels coming off. Warning: If bad news give you heart or stomach conditions, refrain from reading.

Europe doubtful about bailout: Europe’s MSM says the fat lady hasn’t sung the aria of the bridge loan yet. Even if the Senate manages to finalize an agreement in principle on the $15b in short-term loans, it is “uncertain if it would become law,” Reuters says. “Skeptical Republicans could kill such a measure with a procedural hurdle that would need 60 votes to clear.” Germany’s Spiegel Magazine writes that bickering about the car czar is delaying a decision. The antichrist is in the details. In the meantime, the London Telegraph pours cold water on hopes of a quick turn-around. “The last recession, between 1989 and 1992, had a five-year impact on the car industry,” the Telegraph quotes Professor Garel Rhys of the Cardiff Business School.

Fiat too small to survive, enters dating game: Fiat CEO Sergio Marchionne said his company needs company. They are too small to survive alone, Reuters reports. Marchionne said that only six big players would be left following the crisis, and just one of those would be in the United States. After GM left Fiat in the dust and paid $2b to get out of their contract, there’s not much love left between Fiat and Detroit. As far as China goes, Fiat has made baby steps in joint ventures, but managed to step on toes big time with a commercial in which Richard Gere drove from Hollywood to Tibet in 30 seconds. Following that, Fiat had to “extend its apologies to the Government of the People’s Republic of China and to the Chinese people.”

European parts makers go under: Wagon, one of Britain’s largest car parts makers, “has gone into administration,” the Financial Times reports. That’s what the Brits call their bankruptcy. Wagon supplies car parts to Peugeot, Citroën, Mercedes Benz, Renault, Fiat and Audi. Meanwhile in Germany, TMD Friction went to bankruptcy court. “First large parts supplier goes bankrupt,” Manager Magazine writes. Obvious implication: First of many. As we shall see shortly …

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In the House Financial Services Committee hearings on loans to the auto industry, Rep. Maxine Waters hectored the CEOs of Chrysler, Ford and GM. The California democrat attacked the execs on behalf of “small” independent auto dealers on “Main Street.” “Is there a commitment by any of you to give support to these small independent dealerships that include a lot of minority dealerships that are going to close down?” Never mind how they replied. Implied but not stated: The Big Three are guilty of, at best, racial insensitivity. At worst, racism. It’s untrue, unfair and outrageous.

Rep. Waters is upset that GMAC, Ford Credit and Chrysler Financial Services are calling in notes– as opposed to perpetually extending credit– to minority car dealers. In the interests of fairness, let’s keep in mind that this is the same Congresswoman who, in 2003, informed us, “We do not have a crisis at Freddie Mac, and in particular at Fannie Mae.” So no surprise that Waters’ tirade about the domestics’ dealer reduction and consolidation plans misses the entire purpose of exercise: reducing surplus dealers to survive.

Once upon a time, Chrysler, Ford and GM owned the U.S. market. There were domestic dealerships and then there was… nothing. Minority dealer programs were first initiated by Henry Ford II because he thought it was good business and the right thing to do, not because of pressure from activists. Be that as it may, special considerations were extended to minorities. Through financial incentives and active recruitment, they were encouraged to own stores and train members of their community.

That was then. This is now. As the domestics’ market share has steadily decreased, the domestics’ dealer count became a gigantic anchor tied around their collective necks.

It costs a lot of money to supply and support all those dealers. Inter-dealer competition drives down average transaction prices, yielding lower average vehicle sales per dealer. And pandering to the plethora of stores has lead to the brand-diluting practice known as “badge engineering” resulting in yet further intra-store competition.

For example, at the moment, GM’s eight domestic brands account for 24 percent of the U.S. market. The General has well over 6k dealers. That’s down from the nearly 8k dealers back when GM’s brand portfolio accounted for over 35 percent of the U.S. market. But it’s still well over 4k more dealers than Toyota.

There is an upside to the domestics’ ubiquity: they are far better represented in rural areas and small towns than Toyota, Nissan, Honda, Hyundai and the rest of their transplanted competition.

Reading between the lines of Ford CEO Alan Mulally and GM CEO Rick Wagoner’s testimony in the hearings, both domestics [rightly] view their small town dealers as a strategic advantage. During his testimony, Mulally referred to Ford’s small town dealers: “We are woven into the fabric of every community that relies on our cars and trucks and the jobs our company supports.”

All of which means that Chrysler, Ford and GM are closing/losing proportionally more dealers in big cities than smaller cities and towns. Ford CEO Alan Mulally’s prepared remarks to Congress admitted as much, revealing that Ford has reduced dealers by a greater percentage in “large markets.”

There is no getting around the fact that the vast majority of minority-owned car dealers operate within large, urban markets. While there’s no reason to believe that minority-owned dealers are any less well-managed than other dealers, and many are indeed profitable, there’s also no reason to suggest that the domestics are targeting minority-owned dealers for closure. They’re simply in the wrong place at the wrong time.

To satisfy Rep. Waters’ desire to protect African-American dealers, to exempt them from the inevitable cull, Chrysler, Ford and GM would have to discriminate against both rural dealers and well-managed non-minority-owned urban dealers.

Of course, that’s exactly what Rep. Waters wants. She wants to make any loans to the domestic automakers contingent on their continued support of dealers that are part of their problems in the first place. “Do you believe that if we are to rescue these big automobile manufacturers we should insist or include in our language support for the small independent dealers?”

If there was a time when the automakers could afford to cater to the concept of political correctness, that time is past. In their fight for survival, to meet their obligation to return taxpayers’ money, the domestics’ must ruthlessly “right size” their operations. The bottom line is all.

The Detroit automakers are among the biggest private employers of minorities in the country. A larger number of minorities in the auto industry work within the domestics’ organizations than without. Rep. Waters needs to understand that if the Detroit automakers don’t consolidate their dealer networks, the automakers will not survive and a lot more African-Americans, Hispanics and other minorities will lose their jobs.

If you think it’s a buyer’s market for new cars, oh man are you right. But you ain’t seen nothin’ yet. Literally. “At the Long Beach port near Los Angeles,” Reuters reports. “Toyota Motor Corp vehicles including Prius hybrids, FJ Cruiser sport utility vehicles and Lexus IS 250 luxury sedans are being stored on a vast construction site that will one day be a new container terminal. The site became a gigantic parking lot when Toyota and Daimler AG’s Mercedes-Benz asked the port for space to store thousands of vehicles that dealerships have not been able to take on due to sluggish sales.” Imagine this. “The port has not counted how many additional cars were being stored, but Wong said Toyota has leased an additional 23 acres of space while Mercedes-Benz has leased about 20 more acres.” So, if the ports are choking on new cars, where are Motown’s unsold machines? Everywhere, our spies tell us. Everywhere. Import or domestic, their products don’t have an idefinite shelf life. There’s only so long the manufacturers can afford to keep these new cars off the market, propping-up new car prices. Bottom line: as predicted here, new car prices are headed for one Hell of a crash. And soon.

Between 1848 and 1852 telegraph line miles in the US increased by more than 1000 percent. By 1860, most of the companies that laid those lines were gone. The telegraph did not disappear, but the market for cable unraveled. Now that the CEOs of GM, Chrysler and Ford have sent a collective SOS to Congress, its relevant to step back and look not at the now, but the whole. The cycle’s called boom-bubble-bust. Not, bailout. Put another way, what kind of market does Detroit expect to find on the other end of their bridge loans?

As I’ve argued here before, this decade’s early average of 16.9m new vehicles sold per year was the result of cheap and easy credit. From 2001 to 2003, the Federal Reserve cut the funds rate from 3.5 percent to one percent. The lowest since the 1950s. Low-cost, low-security loans flooded the marketplace, inflating the housing market like a rented bouncy house. The automobile business poached off the same line of credit.

For most of the 00s, credit flowed like champagne at a Ritz reception. The car buying climate was the best it had ever been in history. Combined with relatively inexpensive gasoline, the market for cars and trucks grew to full bloom.

Between 2000 and 2006, the number of licensed drivers grew by 1.1 percent.  Car sales went up six percent over the same period, outpacing anyone’s expectations. In 1998, there were about 12m more vehicles than drivers. In 2006, we bought 34m extras. During this same period, median household income, adjusted for inflation, inched up only three percent.

So, the population didn’t boom and there wasn’t a huge influx of disposable income. During  the first half of this decade, people were not picking-up new rides based on need. That’s called a bubble, as in dot-com bubble or real estate bubble or any of a number of other past pop hits. Yes, there’s always a pop.

“We had above-trend years, some of which was caused by an incredible growth in household net wealth that later we found wasn’t real,” George Pipas, director of sales analysis and reporting for Ford Motor told BusinessWeek.

Bob Schnorbus, chief economist with J.D. Power & Associates added, “It’s going to take us many years to get back to a trend level of sales, let alone the levels you might hope to see.”

The boom-bubble-bust cycle is actually pretty common. It afflicted the telegraph industry, railroads, baseball cards. It’s surprising more auto industry executives didn’t see it coming-– or at least acknowledge its arrival. Even ultra-conservative Toyota ramped-up truck capacity as the bottom was falling out of the market.  Still, as long-time TTAC readers know, this downturn isn’t some kind of alien invasion. Lots of people shouted duck and cover.

Michael Mandel, at BusinessWeek, reported on the bubble in 2004. He reminds us on his blog, “Moreover, I also noted that the popping of the auto bubble could have harsher economic consequences than the end of the widely discussed housing bubble.”

Demand for all vehicles has contracted greatly, worldwide, in the last quarter. Current numbers are almost certainly an extreme. To where, exactly, the market may bounce back is not clear. A rough consensus of forcasters puts us at 16 million vehicles by 2012. Maybe.

That leaves the U.S. with excess auto production capacity. It’s that excess capacity they’re asking Congress to prop-up.

It can’t be sustained.  A third of the auto industry workers across the country are stuck in a Warner Bros. cartoon. The floor’s been blown out– they just haven’t fallen just yet.

In the end, bailing-out Detroit isn’t so much the issue. What is the market going to look like for the next handful of years? Are GM, Ford and Chrysler prepared for it? Are they, in fact, able to turn, flex and shift with the economy? A market becomes more competitive as it shrinks.

We didn’t bailout the hat-blocking industry back in 1960. There wasn’t much of a point. The market changed. The car market isn’t evaporating, but changes are in the works. If people’s tastes turn resolutely to more efficient vehicles, if people hang on to their iron a lot longer to avoid a financial inquisition (and resulting interest), if people flat-out can’t get a loan and decide to take the bike or bus (transit ridership is up 5.1 percent for the year), then money from Congress is feeding a ghost.

Western Union is still around. They don’t send telegrams. Bubbles can’t be re-blown.

Just a quick reminder that we’re still accepting nominations for TTAC’s Ten Worst Awards. As a pro and anti-Toyota Prius debate hijacked the original thread– unquashed due the passion and quality of the kerfuffle– I’ve decided to open a new post to allow more nominations in a cleaner, fresher, kindler and gentler commentarium. So if you haven’t chimed-in with your favorite worst vehicle sold in American (as new during calendar year 2008), please do so below. Again, please make your comments as pithy as poss, as we will be quoting the best in our list of final nominees. To refresh your memory, I suggest a cup of Clover-brewed Ethiopian Sulawesi. Woo-hoo! Sorry, what I meant to say: here’s the complete timetable via our dearly-departed though-not-dead-by-any-means Frank Williams. Note: we reserve the right to screw it up.

Thursday Dec 4:  Nominations start
Sunday Dec 7  Nominations close at 12 PM
Monday Dec 8:  List to writers to select semifinalists
Wed Dec 10:  Writers have their selections back by midnight
Thurs Dec 11 : Voting on finalists starts as soon as I can get the poll built
Sunday Dec 14: Voting closes at midnight;
Monday Dec 15;  Winners sent to writers for comments
Thursday Dec 19: Writers have comments back
Friday Dec 20:  Winners announced

As yesterday’s Senate hearings wound down, it was hard not to be impressed with how pragmatic the conversation had become. By DC standards, at any rate. But any hope that the second day of testimony would build on the previous day’s momentum was misguided. Far from picking up on the previous day’s progress, the House Financial Services Committee testimony and questioning returned the conversation to step one, in a flurry of irrelevant posturing and evasive non-answers. Backsliding and tangential wanderings notwithstanding, we did learn a little more from today’s hearings.

When Rep Barney Frank gaveled the House Financial Services Committee to order, he began by noting that consensus that had been reached on the need for reorganization, changes in product mix and union concessions. This positive start was followed by immediate disappointment. Frank spent the rest of his opening statement explaining that bankruptcy wasn’t an option, and that the financial bailout made it somehow morally impossible to turn Detroit down.

Following Frank’s opening salvo, Pennsylvania Democrat Paul Kanjorski highlighted Moody’s Money Man Mark Zandy’s estimate of a $75b-$125b total bailout price tag. “We need a solution, not a first payment,” Kanjorski said. He matched Frank rhetoric for rhetoric: a Detroit bailout would bring lines of businesses to DC’s demanding the same congressional favors. The divide between the speakers– from members of the same party, no less– showed just the distance traveled from yesterday’s apparent consensus.

Not that the witnesses were worried about the re-do. Rather than preparing new statements reflecting the previous day’s debates, all three executives and their UAW compadre recycled the exact same statements they’d made before the Senate the day previous. The folksy one-liners, such as Mullaly’s invitation to “come over and kick the tires” and Gettelfinger’s “bridge to a brighter future” bon mot, were repeated with the same insincerity.

But why would the supplicants remind the lower house of congress that their more distinguished colleagues had all but damned Detroit to a four-month crash reorganization? By returning to their opening bid, they allowed the committee members to break the discursive trajectory, and head in their most favored directions. This being the house of representatives, the oportunity was not ignored.

A particularly egregious example: the opening statement by Rep Donald Manzullo (R-IL). His suggestion that automaker plans should include a request for an auto demand stimulus would do nothing to address the core issues: short-term cash infusion and long-term reorganization. Luckily, his remarks were easy to ignore, thanks to his insistence that workers in his district built “the world’s finest compact autos, the Caliber, Patriot and Compass.”

Rep Ron Klein (D-FLA) raised the specter of American Leyland, arguing that research and development for The Big 2.8 should be brought “physically under one roof,” so the American taxpayer would “understand that they were getting something tangible.” Of course, rather than referencing the failed British state conglomerate, Klein introduced his proposal as Ye Olde Manhattan Project. Knowing it would never happen, the plan was enthusiastically endorsed by all three CEOs. GM’s Wagoner insisted that this kind of collaboration and government support is “why the leaders in battery technology are in Japan and Korea.”

On a more substantive front, several representatives were less-than-enthusiastic about GMAC and Chrysler Financial’s plans to attain bank holding company status to “liberate” Troubled Asset Relief (TARP) funds. As we’ve pointed out previously, Detroit has largely survived thus far by creating a “subprime auto loan” market which is no longer sustainable. Yes, well, Toyota and Volkswagen have lenders with bank status, so these concerns  disappeared in another blinding flash of relativism.

But for every Spencer Bachus and Barney Frank arguing for expediting bank status, there was a Manzullo saying “you’re there to make cars, not run a banking operation.”

Rep Thaddeus McCotter  made a run at the Bob Corker award, by proclaiming a “solomonic” [sic] compromise. Unlike Corker’s far-reaching, pragmatic proposal, McCotter simply suggested splitting the expense between TARP and the section 136 (D.O.E. retooling) money.

The man the DetN likened to Winston Churchill (although they don’t share an antipathy to passive construction and misplaced prepositions) pronounced that “opposition in Congress is not to the idea of helping the automakers but rather to where the money would come from.”

The fact that only $7b of the 136 money is currently available didn’t give McCotter pause. Nor will it stop Congress. In an earlier exchange, Frank swept aside concerns that rash action on debotr seniority could undermine the entire basis of America’s credit system. “We wrote the bankruptcy laws,” Frank snapped. “We can change them.”

Probably the only common thread from yesterday’s hearing was a deep contempt for Chrysler. At this point it seems fair to stick a fork in a certain well-cooked three-headed dog. Nardelli faced yet more contempt on the “if it’s such a great plan why don’t you get your Mr. Moneybags owners to put up the damn money?” front. His answer, “they haven’t shared that with me,” convinced no one.

Rep Kanjorski got all three failed automakers to agree that they could survive 90 days on $14b worth of “bridge bridge” loans, with Chrysler getting $4b, GM getting $10b and Ford getting nothing. This will allow a government brokered agreement. The Congress recognized that extracting the major concessions needed from all the automakers’ stakeholders (where did I put my Buffy?) to create a mega-bailout ain’tgonnahappen.com.

Expect these funds to be appropriated fairly quickly, with a government oversight board assigned to guiding major reforms. Based on the evidence of today’s hearing, there are no guarantees that a coherent vision for the industry will emerge in only three months. And so it goes.

With waning interest in full-size pickups, all the major players have hit the market with a resounding thud. While the dee-luxe apartment in the sky is safe and clear for GM and Ford’s power players, the squeeze play can take the pie away from lesser-known trucks: those that do less, but cost more than expected. That said, now’s not a good time to be the mid-size Dodge Dakota.

Dubai gas prices might reach parity with Oklahoma City prices in the near future, as the Emirates of Dubai and Abu Dhabi contemplate raising their standard prices from 6.2dhs per Imperial Gallon (or $1.38 per US Gallon). The rising gas prices only hint at the start of problems from plummeting oil prices in the UAE as ADNOC (Abu Dhabi National Oil Company) and ENOC (Emirates National Oil Company) have started to prohibit cars bearing plates from other Emirates from using their filling stations, as they are the cheapest areas in the UAE. Residents of Sharjah have created the greatest outcry thus far as they complain they are all citizens of the UAE, not one particular emirate, and should have equal filling opportunities no matter where they are. Other victims of the oil crash: the massive building sprees Dubai and Abu Dhabi went on trying to create a tourist destination paradise from a gravel parking lot covered in sand dunes.

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Too much happening around the globe to let a business trip stop me from reporting it. TTAC provides round-the-clock coverage of everything that has wheels. Or has its wheels coming off. Who can sleep with news like that anyway?

Lutz loose cannon, shoots foot, “too good to die:” The folks at RecCen were so busy charging up the batteries for their trip to DC that they forgot to put a muzzle on Czarevitch Bob Lutz. GM selling brands? Fohgeddaboutit, said Bobbie in an interview to the Swiss business magazine Bilanz. It’s all over today’s press in Europe. GM off-loading brands like Saturn, Saab, and Opel? LOL-Lutz had never heard of it. “It’s as trying to remove single eggs from an omelet and put them on sale,” Lutz told the Swiss who choked on their Roesti. Shutting down some brands would be thinkable, but “it would cost one or two billion per brand.” Opel?  Opel is too tightly integrated into GM, and besides, Opel “doesn’t have the critical mass to survive. The idea to separate Opel from GM is a pipe dream.” Comes from someone who said that global warming is a crock of excrement, and that the moon is made of green cheese. OK, made the last one up. The charitable assumption is that the magazine was in print while other announcements were made. On the other hand … Lutzie’s last words: “We are too good to die.”

Uh-oh. Japan to repatriate foreign investments, tax free: The Liberal Democratic Party’s tax panel decided Friday that dividends received by Japanese companies from overseas subsidiaries should be exempt from corporate taxes, “in a bid to encourage Japanese firms to repatriate more capital,” says the Nikkei (sub) this morning. It’s one of those things we usually won’t notice, but we do now.

Chrysler clueless in China. Chrysler has put most, if not all of its Chinese joint venture plans on hold, says Gasgoo. A deal with Chery has been put on ice. Which surprises nobody.

Chinese makers short on cash: Chinese auto makers Haima, Brilliance, and Changfeng said that they need cash urgently. “The listed automakers now have dropped the unrealistic hope of raising capital through the stock market; instead, they are turning to their parent companies or issuing corporate bonds to collect money,” says Gasgoo.

There is more …

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