The UAW’s VEBA health care trust fund currently owns 17.5 percent of GM and 55 percent of Chrysler, but with IPO plans still nebulous at both, the fund is short on options for improving cash flow. Remember, the union doesn’t want to own these companies… it would have preferred cash, thanks. But since bailout negotiations allowed the automakers to fund their VEBA obligations with stock and warrants, VEBA has little choice but to monetize them. And while GM and Chrysler limp towards an eventual IPO, VEBA’s 362.4m Ford stock warrants are actually doing pretty well relative to their $9.20 exercise price. So it’s no huge surprise to hear [via Automotive News [sub]] that VEBA is planning on dumping its entire allotment of Ford warrants, in a move that could be worth “at least” $1.27b. And it’s no coincidence that this news comes on the same day that Ford is announcing a $3b debt prepayment, and the day after its sold Volvo to Geely for $1.8b.

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Remember when we reported that the cash cow known as in-house dealer finance wouldn’t be covered by the Consumer Financial Protection Act, currently making its way through congressional committees? That version of the bill passed the House Financial Services Committee (with some questionable support), but now Automotive News [sub] reports that the Senate Banking Committee has passed its own version which does make dealer finance subject to regulation by the Consumer Financial Protection Bureau. The Senate version would also make the CFPB an office of the Federal Reserve, rather than a stand-alone agency. So, should an agency set up to prevent another financial crisis extend regulation to dealer finance operations? Dealers aren’t happy about the idea, but traditional consumer advocates aren’t the only ones saying yes…

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Even in the few months I’ve been here, I’ve been encouraged by the progress we’ve made, but when it will all come together is impossible to say… We’ll do it when we’re ready

In their latest report, the Congressional Oversight Panel suggested that GM’s formerly captive finance arm GMAC shouldn’t have been split from the automaker it still supports. If this led you to believe that GM would take the troubled finance firm back under its corporate wing, you have another thought coming. The WSJ [sub] reports that

The idea appealed to GM, in part because auto maker would have more control over lending practices. GMAC’s move in 2008 to dramatically restrict leasing amid the U.S. financial crisis helped trigger the spiral that sent GM into bankruptcy the last year… But taking over GMAC would have many complications. GM sold a majority stake in GMAC in 2006 as a way to buck up the auto maker’s credit standing and its access to capital. As it turned out, GM still remains largely cut off from the markets.

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Chinese battery maker and aspiring automaker BYD earned $215m in the fourth quarter of 2009, bringing its net profit for last year to $555.2m, reports Automotive News [sub]. BYD’s performance outstripped analyst estimates, which projected fourth quarter profits of $130.5m, and full-year profits of $473.2m. Though the Chinese auto market grew 46 percent to 1.6m vehicles, 47 percent of BYD’s 2009 sales came from the firm’s cell phone battery business, which is expected to give back recent gains as the global economic crisis takes its toll. Not so with BYD’s auto business: the firm has raised its 2010 car sales projections 14 percent, with sales of 800k foreseen. And as China’s car market takes off, BYD, which has one of the nation’s best-selling cars in its F3 compact, is expected to keep growing. Says one JP Morgan analyst:

BYD is a company that can’t be underestimated. If the Chinese vehicle market expands 10 percent this year BYD’s sales will grow at least 40 percent — 50 or even 60 percent is also a possibility.

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After three separate bailouts totaling over $17b, Congress is beginning to wonder if keeping auto-finance giant GMAC alive was worth it. Forbes reports that the Congressional Oversight Panel reckons at least $6.3b of that money could be gone forever, as GMAC flounders towards barely breaking even. And like the rest of the bailouts, the fundamental problem is that the influx of federal cash has allowed GMAC to pretend like it’s not struggling for survival. The panel report [full document in PDF format here] notes [via Automotive News [sub]]

Treasury’s previous and current support is not underpinned by a mature business plan. Although GMAC and Treasury are working to produce a business plan, Treasury has already been supporting GMAC for over a year despite the plan’s absence. Given industry skepticism about GMAC’s path to profitability and the newness of the non-captive financing company model, it is critical that Treasury be given an opportunity to review concrete plans from GMAC as soon as possible.

Sound familiar?

In a conversation with The WSJ [sub]’s Paul Ingrassia, former Car Czar Steve “Chooch” Rattner did some “back-of-the-envelope calculation” to show why he believes the US taxpayers will see their $50b “investment” in GM recouped when The General goes public sometime in the next year.

Here’s how Rattner gets to his latest calculation: Bonds of GM’s bankruptcy estate – known as Motors Liquidation – are currently trading around 30 cents on the dollar, according to Thomson Reuters. Those bondholders were owed $27 billion.

As part of GM’s restructuring, those bondholders were promised a 10% stake in GM when it goes public. In very rough calculations, those bonds are currently valued at about $9 billion (because they currently trade at around 30 cents and were originally worth $27 billion).

Assuming that $9 billion represented 10% of GM if it went public now that would imply GM had a value of around $90 billion. The taxpayer’s stake: 60% of that $90 billion, or $54 billion — Rattner’s magic number.

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Every good turn deserves another, and in response to America’s bailout of its most vulnerable automakers, the EU is investing in its least viable automakers. Having invested $547m in Saab, the European Investment Bank is announcing a $458m loan to Jaguar Land Rover, the troubled luxury divisions of Tata Motors. Automotive News [sub] reports that JLR will use the cash to develop micro- and full-hybrid drivetrains and generally improve fuel efficiency. Does this include a rumored Jaguar gas turbine hybrid? Officials won’t give details, but Tata’s Ravi Kant does go on the record to say

This will support the progress of turnaround in Jaguar Land Rover’s business in challenging market conditions, alongside cost cutting measures, increase of volumes and the improved margins strategy currently being implemented by Jaguar Land Rover

Which leads us to believe that this won’t do anything to prevent the planned shutdown of at least one of JLR’s UK plants.

In the confusion of the recent Saab-Spyker deal, an interesting tidbit has flown beneath the radar until recently. Most industry news outlets [ourselves included] had reported that Spyker’s backing from Russia’s Conversbank had given GM intellectual property nightmares, and that the deal had gone through with backing from other corners. Not so, it turns out. Bloomberg [via BusinessWeek] reports that Alexander Antonov confirms his bank supplied the first $25m in payments to GM. A strange turn of events, considering Russian backing for Magna’s failed Opel bid (and GM’s attendant IP paranoia) was said to have scuttled the deal (and that didn’t even have Convers’s bizarre Chechen blood feud connection).

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This one’s a bit of a golden oldie, but in light of the recent round of promotions at the Haus of Daimler (not to mention this video’s unintentionally prophetic tagline), it’s worth mentioning. Charges in the 6 year old SEC-DOJ investigations of what was then DaimlerChrysler may be settled by Daimler for “about $200 million” according to anonymous Bloomberg [via BusinessWeek] sources. The probe had looked into allegations that the German firm regularly bribed government officials in a number of jurisdictions (including Sadaam Hussein, in the Oil For Food scandal), the broad strokes of which the firm essentially admitted in 2005. Though Daimler announced that it would cooperate with investigators and that “several” employees were fired, details were never released. At least one whistleblower has alleged that knowledge of slush funds and bribery were known at the highest ranks in Daimler, and the ever-helpful NY Times notes that

As recently as 1997, the German government counted the bribes paid to foreigners by German companies as tax- deductible.

No wonder these guys promote from inside.

Having recently posted a nearly $5b loss, bailed-out auto finance giant GMAC says it needs more help from automakers to remain competitive. Automotive News [sub] reports that GMAC CEO Mike Carpenter told reporters that “the success of GMAC Financial Services hinges on more loan and lease subsidies from General Motors Co. and Chrysler Group,” and that “GMAC requires additional marketing funds from the automakers to provide competitive loans and leases to the GM and Chrysler dealer networks.” GMAC’s Chrysler business has nearly doubled in the last quarter of 2009, now providing about 26 percent of Chrysler’s retail financing and about 30 percent of GM’s.

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I’ve been warned before by the B&B not to read too much into the forward-looking statements in SEC filings, especially the ones where companies ruminate over all the things that could still go wrong with their struggling firms. These legal disclosures of worst-case-scenarios often reflect unlikely scenarios and can be downright misleading, so we held off from diving too deep into Tesla’s IPO S-1 filing [complete document here]. Others around the web have jumped in without compunction, and this week has yielded a steady drip of troubling revelations. It’s a wild and woolly collection of issues, but given that people are going to be asked to invest in this nightmare of a company, it’s only fair that we give the grievances an airing.

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Agressive cost-cutting and improved sales yielded $1.68b in net profit for Toyota in the three months ending December 31, reports a press release in the WSJ. Sales revenue climbed 10 percent to $58.2b in the October-December quarter, boosting operating profit to about $2b. This quarter alone though, Toyota reckons the recall could cost the company $2b in repair costs and lost sales. For the fiscal year, ending on March 31, Toyota says the final impact should be limited to about $900m in losses on an operating basis, and has revised its fiscal year net profit projection to about $900m (compared to a $2.2b loss projected in November).

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We overlooked a key point in our write-up on Tesla’s IPO plans: the profits Elon Musk has been touting are a mirage. As this balance sheet from Tesla’s IPO prospectus [read the whole thing at the SEC here, it’s a giggle] proves, Tesla might have fudged a one-month profit, but the company is hardly on a sustainable footing. Unless you consider seven million bucks in “gross profit” (including Zero Emissions Vehicle credits) enough to offset a nearly $29m operating loss, in which case, I’d like to talk to you about underwriting TTAC’s budget. This also puts into Tesla’s disclosure that it faces declining revenue into some scary perspective. Notch another one up for Farragoian skepticism…

Toyota Sienna boy band, Boyota from Jennifer Vuong on Vimeo.

Standard & Poors Equity Research [via BNET] says you shouldn’t dump that Toyota stock just yet.

Will the aggressive action of cutting production and recalling so many vehicles scare away potential Toyota buyers, or will consumers think the abundantly cautious response shows a commitment to customer care and quality? We think it is too early to tell, but we believe resilience and global growth of vehicle demand will help TM (Toyota Motors)

You know, until mechanics actually start finding malignant hellspawn demons within Toyota electronic throttle control units. In which case you should invest heavily in law firms. Meanwhile, Toyota is apparently hiring shamans to cleanse their new product of metaphysical infestation by way of bizarre voodoo ceremonies like the one shown above [Hat Tip: Vanity Fair Gay Cars blog].