Despite already having some of the highest incentives in the game right now, Chrysler is joining GM in putting more cash on the hood to clear out year-end inventory. Automotive News [sub] reports that Chrysler will be adding $1,000 to $1,500 in incentives per vehicle, on top of October’s $3,219 per vehicle average (as calculated by Edmunds). According to the same Edmunds analysis, the average industry incentive is $2,468 per vehicle. This continued reliance on incentives contradicts a number of Sergio Marchionne’s statements at the presentation of Chrysler’s five year product and business plan, in which he argued that Chrysler could not rely on incentives to push volume. Marchionne claims to believe the incentive-based volume chasing is “insane,” but his commitment to a sustainable business plan is about to be tested. For Chrysler’s five year plan to succeed, its sales need to turn around fast, making 2009 the trough year indicated on this graph. But with no new product (and by new product, we mean refreshed product) due out until the fourth quarter of next year, such a turnaround seems impossible without huge incentives. And yet Chrysler also showed graphs projecting a direct relationship between volume and profit, meaning there is little to no wiggle room for profit-sapping incentives. Rock, hard place, I’d like you to meet Chrysler Group.

UBS has cut Fiat’s rating from “buy” to “neutral”. UBS cites its cautious views on car demand in Europe and Brazil as well as heavy trucks and machinery, the areas in which Fiat are strongest. UBS notes that Sergio Marchionne’s grand scenario of spinning off Fiat’s auto division is still the company’s goal, and PSA Peugeot-Citroen as a “likely candidate”. In the near term, UBS thinks that Fiat’s market share price of €10 per share is fair, as a consolidated manufacturer. Another reason why UBS cut Fiat: Chrysler. The article finishes with a stark warning that the “value of Chrysler to Fiat has been cut to 1 euro from 2 euros.” In the interest of fairness, we shouldn’t listen too much to the stock market as these are the same people who proclaimed that the banking sector was in rude health, right up until they asked for a bailout, catching the market “by surprise”. Especially considering Sergio Marchionne is the non-executive vice chairman of UBS’s board of directors. These caveats aside though, it’s important to note that Chrysler has realistically gotten Fiat no closer to the magical 5m annual sales number it needs to spin off its auto business, nor has it added real value. And Marchionne is apparently eying up PSA as the next target in his mad march to world domination. What a gas.

This according to the National Taxpayer’s Union report “The Auto Bailout: A Taxpayer Quagmire,” authored by Rochester Institute of Technology Professor of Economics, Thomas D. Hopkins. That number includes the $52.9b taxpayer “investment” in General Motors, as well as GM’s portion of the GMAC bailout, which brings GM’s taxpayer tab to over $60b. Chrysler’s GMAC-inclusive bailout bill totals $17.4b, or $7,600 per vehicle, based on estimated 2009/2010 sales. Don’t believe that GM or Chrysler will match their projections over the next twelve months? The NTU estimates that total government support for the auto industry comes out to $800 per taxpaying American family. These numbers do not include the Cash for Clunkers program, likely future bailouts of GMAC (projected at a further $2b), or Department of Energy retooling loans (ATVML). These numbers also do not reflect the very real possibility that GM, Chrysler and GMAC could continue to drain taxpayer money post-2010. “For each year of survival beyond 2010,” the report warns, “the burden per vehicle would decline [Ed: but not disappear] – so long as no additional government funding is provided.”

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“U.S. encouraged by Fiat plan for Chrysler,” runs Reuters‘ headline, attributed to car czarlet Ron Bloom. After commenting extensively about GM, in which Bloom controls a 60 percent taxpayer stake, he had only this to say about the eight percent government owned Chrysler and its recent plans:

We see management with a huge sense of urgency. We see a huge dedication and commitment, working extremely hard. It’s an ambitious plan.

But did Bloom see the 7 hours of Powerpoint presentations? “Encouraged” wasn’t exactly the description being flung around at the line for porta-potties. Hell, even Detroit’s cheerleader-in-chief and Automotive News [sub] publisher Keith Crain beats Bloom’s take hollow with his headline “This Year The Math Adds Up To 110%.”

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The Detroit News reports that Senator John McCain (remember him?) has declared Chrysler unlikely to survive. Mr McCain, who was serving as grand marshal of the NASCAR Sprint Cup series race at the Phoenix International Raceway, even went as far as to argue

No, I don’t think we ever should have bailed out Chrysler and General Motors. We should have let them go into bankruptcy, emerge and become viable corporations again. It was all about the unions. The unions didn’t want to have their very generous contracts renegotiated so we put $80 billion into both General Motors and Chrysler, and anybody believes that Chrysler is going to survive, I’d like to meet them.

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First, let’s get something out in the open.The Detroit Free Press’ story on the jobs impact of Uncle Sam’s Motown mega-order forgets to mention one salient fact. As TTAC reported back in June, one-third of the 17,600 vehicles ordered from Chrysler, Ford and GM were/are/will be assembled outside the United States. Any article about the order’s effects on American jobs should begin with that fact, which this one has. Surprise! The federal fleet sailing to The Big Three’s rescue did no such thing for American autoworkers. “The overriding purpose of the stimulus was to jump-start the economy and create jobs, though Obama never claimed the vehicle purchases would create jobs. While the latest reports from stimulus recipients show all three carmakers getting orders totaling $270 million so far, job creation from the purchases was nil.” Don’t you just love it when the media pre-apologizes for the President? How about when a major manufacturer lies about its federal blessing to please its federal taskmasters?

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Not long after Fortune’s long time auto writer Alex Taylor III finished his apology to Ford he went on to write a love letter to Sergio Marchionne. Taylor starts with parallels to Ghosn’s myth making success at Nissan, then ups the ante: “The other day in Auburn Hills, Mich., Fiat CEO Sergio Marchionne took a page out of the Ghosn playbook — and then improved upon it.” The impetus for Taylor’s piece was the legendary Power Point Rumble in the Detroit Jungle TTAC’s Edward Niedermeyer reported on with, um, slightly less enthusiasm last week .

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Times are tough. Margins are tight. Carmakers are looking for savings anywhere they can. As mechanical work performed by a dealer under a manufacturer’s warranty comes straight off the automaker’s bottom line, it’s not all that surprisingly that we’re getting reports that certain manufacturers (cough Chrysler cough) are dragging their heels on paying for warranty work. In specific, we’re hearing that owners of Cummins diesel-powered Rams are having to stump-up for the cost of engine repairs, as the mothership blames “issues” on driver negligence, poor operating conditions and the knock-out punch “contaminated fuel.” Are you having any trouble getting warranty work on your vehicle(s)?

“I don’t see anyone bleeding to death,” Sergio Marchionne told reporters and analysts a week ago, when asked what he thought of Chrysler’s current dealer body. He might be about to change his tune. The US Treasury will stop guaranteeing GMAC’s floorplan loans to Chrysler Group dealers on the 21st of this month, and the bailed-out lender has marked over 100 dealers to be cut off. According to the Detroit Free Press, these dealers had all survived Chrysler’s dealer consolidation efforts in bankruptcy, indicating that their sales business is relatively steady. But because of huge investments made with Chrysler Financial loans at the height of the real estate market, these dealers owe more than their dealerships are worth. Chrysler Financial is winding down its business, and it refuses to give up the first right to the property as collateral. Because GMAC is now a bank holding company and requires more collateral on loans than it previously did, it wants land and buildings put up as collateral that are already securing old Chrysler Financial loans. Of course those old loans were for renovations made as part of Chrysler’s “Project Genesis,” which dealers had little choice but to participate in. If those Chrysler-mandated investments meant certain dealers were not going to qualify for floorplanning, they should have been culled during bankruptcy. Which is why NADA is appealing to Chrysler CEO Sergio Marchionne on behalf of the threatened dealers. And maybe if Marchionne takes a look into this meatgrinder, he’ll see a few dealers stuck between giant, bailed-out businesses, bleeding to death.

There’s a backlash a brewing over Chrysler’s decision to axe its EV and hybrid program. The move makes sense from an business point-of-view; the company doesn’t have enough money to chase sky pie. Politically, it’s all kind of nuts. Lest we forget—and even the normally automotively absent-minded USA Today doesn’t—ChryCo trotted-out alt power vehicles to secure some $12.5 billion (plus) in federal bailout bucks. And while the zombie car company will import the fuel-efficient Fiat 500 to trigger a hidden-at-the-time clause which surrenders more ChryCo control to Fiat upon selling a new, high mileage vehicle in the U.S., that precious little jewel is NOT what the democratic party’s four-wheeled-oriented tree huggers had in mind. Surely pretending to continue develop the battery-powered vaporware would have been the better bet. That way, when Chrysler returns to the federal trough, they could have played the green card. Now? Fuhgeddaboutit. Which only leaves the jobs card, vs. popular sentiment against more bailout bucks. Methinks the move to kill the ENVI program means that Chrysler is doomederer than before. You?

While reading through some of our analysis of Chrysler’s five-year plan, you may have found yourself wondering “what did the Pentastar boyz do to convince you of their company’s viability plan besides flash PowerPoint slides at you for seven hours?” To fully comply with TTAC’s stringent disclosure standards, we present Chrysler’s material compensation for the seven hours that auto journalists most wish they had back.

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Ford’s announcement today that the new global Ranger won’t be coming to the US sure seems like a head-scratcher. Though Automotive News [sub] quotes Ford’s Alan Mulally as saying the Ford Ka won’t be sold stateside because “our view is that Fiesta is about the smallest vehicle that we think will be a real success in the United States,” there’s no similar reason given for the absence of a modern compact pickup from Ford’s lineup. Or anyone else’s lineup, for that matter. The Canyon/Colorado are going out of production since the Shreveport, LA, plant is part of Old GM liquidation Corp. The Dodge, er, make that Ram Dakota will die next year according to the new plans at Chrysler. The Tacoma is no longer properly compact, and Volkswagen’s Brazilian “Robust” won’t be coming here either. Hell, even the latter-day El Camino was stillborn. But if my flu-addled memory serves me correctly, didn’t compact pickups help pull the US market out of one of its last great downturns? Why is it that nobody is giving this segment the time of day?

If you’re like me, you spent most of the weekend huddled under a blanket, half-watching television and praying for the flu agony to be over. And nobody who watched a considerable amount television this weekend could have avoided the latest flight of heavy-handed ads from Jeep and Chrysler’s new Ram brand. “My Name Is Ram” and the  E.E. Cummings-inspired “i am. Jeep” campaigns are blitzing airwaves across the country as the New, New Chrysler gears up to make its wildly optimistic sales goals. After five months of total silence coming out of bankruptcy, the ads are coming out in earnest, and they’ll be running non-stop in hopes of catching up with the $100 per retail sale ad spend goal for 2009.  Next year, Chrysler’s ad spending will go up to $170 per projected sale, peaking in 2011 at $210 per planned retail sale. And this increase in ad spending appears to explain why Chrysler’s sales projection charts swing wildly upwards after a dismal 2009. After all, if throwing upward of a billion bucks per year won’t change consumer perceptions, what will? Well, besides new product, anyway. There’s many a slip twixt the PowerPoint and the profit.

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