Did Chrysler lie to government?

With it now rejecting plans to build an electric car, one most wonder whether Chrysler really planned to do that in the first place, or just said that as part of angling for government bailout money.

Was GM-Chrysler bankruptcy too quick?

CNN has a very good news analysis on how the short-term benefit of a “quick rinse” bankruptcy could be offset in the long term by a variety of counter-factors.

Cash for clunkers 4 – the un-greenness extends beyond cars

In a special news analysis story, Gwen Ottinger takes an environmentally skeptical look not only at the federal “cash for clunkers” program, but on similar state-level programs that encourage people to swap out old appliances for new ones.

The lowdown? They’re all great economic programs, but environmentally iffy at best.

For example, the “cash for clunkers”? Why is it limited to new cars? If my budget is tight, why can’t I swap my SUV for a 2-year-old Corolla? Answer: This is an automotive bailout program, at bottom line.

Second, with new appliances, let alone cars, the manufacturing costs aren’t cheap. Fiscally or environmentally.

Third, as the “cash for clunkers” program has allowed people to buy slightly more fuel-efficient new SUVs (and none of the stories so far report how the new sales have broken out by vehicle type), so, state appliance swap-outs have led to people buying ever-bigger refrigerators.

I’m just giving you a summary; read the full piece.

Feinstein right – kill ‘cash for clunkers’ renewal

The House turned the original, more environmental idea, into an auto bailout, especially for SUVs, and Feinstein is again calling the House out.

Here are parts 1, 2,
3, and 4 on why “cash for clunkers” is not just a non-environmental auto bailout plan, but an anti-environmental one.

Chrysler and GM are cut off the federal bailout pipeline, now. Bu

Chrysler and GM are cut off the federal bailout pipeline, now. But, what about the $80 bil in dinero and commitments already outstanding?

Congress wants that answer, too. And, contra what auto tsarevich Ron Bloom says that, namely, that the government will fully get out of the auto biz when GM and Chrysler demonstrate viability …

What if they never do?

I mean, let’s be honest here.

What if, especially in the case of GM, there’s still plenty of “bad GM” at or near the core after selling off “peripherals”? And, We the People still have 60 percent of that? The government has less than 10 percent of Chrysler, so no big deal.

“A chicken in every pot and a GM in every ditch?”

Robert Reich, WSJ agree Obama DUMB on cars + CAFE

The Wall Street Journal’s op-ed page and former Clinton Secretary of Labor Robert Reich agree.

Obama’s raising CAFÉ standards, with the idea of loaning American carmakers (who have deliberately chosen not to do so in the past) as much as $50 billion to make these fuel-efficient cars, is TEH STUPID.

Indeed, Reich called it socialist lemon-making.

Let GM and Chrysler die, die, die dammit.

Meanwhile, do what I blogged yesterday and add a buck a gallon to federal gas taxes, to push people into buying higher-mileage cars sooner.

Chrysler Financial refused bailout bucks over exec pay

That’s right, the financing arm of about-to-go-bankrupt Chrysler turned down federal loan money to continue overpaying the same officials that have ground them into impending bankruptcy in the first place.

Yes, technically, it’s separate from the carmaker, but it’s the same idiots, at bottom line.

I’m guessing that Fiat might demand concessions there, as well as wages of line-level employees if Chrysler Financial is part of the acquisition.

Obama hypocrisy & chutzpah - GM vs. G. Sachs

“Good” company vs. “bad” company?

It’s becoming clearer by the day that Team Obama doesn’t think GM can survive without a massive retooling, so it’s no surprise the Treasury Department is telling the General to prepare for a structured bankruptcy. The announcement is also, of course, another warning shot across the bow of GM bondholders.

At the same time, in a mix of irony, hypocrisy and chutzpah, an idea is being floated of dividing GM into “good” and “bad” companies.

So, lemme see.

Team Obama can push to fire Rick Waggoner at GM but NOT Kim Lewis at Bank of America?

Check.

Team Obama can push good/bad company division at GM but NOT in the banking sector?

Check.

Team Obama in the pocket of the financial “industry”?

Obama beats up GM for faux populism

That's the argument the Detroit News strenuously makes about Obama forcing out Rick Wagoner as GM CEO, and putting the company on the clock, so to speak. And, the paper has some good points, above all, wondering if Obama is not creating a deliberate distraction from Wall Street issues.

He can portray himself as being tough on the corporate executives who are ruining America, without having to draw blood from the bankers.

That is at least possible, Obama killing two birds with one stone.

Details of the Obama ‘nyet’ to GM emerge

Besides dinging GM, and Chrysler, for being too reliant on trucks and SUVs, Obama Administration documents to the two automakers fault their vehicle quality, among other things.

It’s also clear that, with publicly-traded GM, the administration is making clear this is a wake-up call to bondholders to give more in negotiations with GM.

Also, more people besides CEO Rick Wagoner will be leaving GM, too.

As for the UAW, though not specifically mentioned, it’s going to have to wake up on both car quality and vehicle size mix, too.

That said, the Detroit News unloads with both op-ed barrels on this issue. And, they have some good points, above all, wondering if Obama is not creating a deliberate distraction from Wall Street issues.

He can portray himself as being tough on the corporate executives who are ruining America, without having to draw blood from the bankers.

That is at least possible, Obama killing two birds with one stone.

Obama cracks whip on GM, boots Waggoner

First, in exchange for more bailout money, GM has just 60 days to get its shit together. Chrysler gets 30 days to finish creating an alliance with Fiat in exchange for $6 mil. And, Bill Ford II probably is wiping his brow right now.

Plus, the Obama Administrastion asked GM CEO Rick Waggoner to step down and he did. Politico suggests that it’s because of Waggoner’s long tenure at GM, and his role in making the company so truck and SUV dependant.

The New York Times goes along, noting that Obama has (rightfully) criticized GM management before.

And, although this original story wasn't clear, GM gets no more money over these next 60 days; it has to "prove up" first.

As for Chrysler, the Fiat deal is the ONLY chance of it making a decent small car any time in the next decade.

OK, now that I’ve given Obama a deserved kudo.

Why the hell won’t he do the same under TARP with banks? Kick some ass and boot some CEOs?

The Detroit News unloads with both op-ed barrels on this issue.

C-H-A-P-T-E-R 11 is spelled GM?

With sales numbers like these from February, the General can’t survive.

Nor can Obama have a good chance of giving it any more money short of it filing for a “guided” Chapter 11. Let’s be realistic here.

It was the worse auto sales month since the middle of the 1980-82 recession, when the population was only three-quarters the size of today. In population adjusted terms, it’s probably the worst since World War II.

Public – NO more auto bailout spending

Per a new Gallup poll, nearly three-quarters of Americans oppose spending more money to bail out the U.S. auto industry.

Opposition is highest among the young, conservatives and Republicans.

Homes, yes; cars and banks, no

In what might be called the “duh” poll of the day, Gallup finds that the public is OK with bailout help for homeowners, but not elsewhere.

GM stupidity alone is death-deserving

GM, I guess, just can’t help being GM, management idiocy and all, as it cannibalizes itself in a last-gasp attempt to get gussied up for either a structured bankruptcy, more sucking at the government teat, or a free-fall funeral in style.

For example –

Phasing out Saturn, GM’s red-headed stepchild? That shows, in a capsule, or under a microscope, the history of GM’s short-sightedness with the once free-standing car line. The GM brand name that probably STILL has the most customer loyalty of any GM nameplate, or at least, of any GM nameplate below Cadillac, and one individual car, the Corvette.

That all said, the Wall Street Journal notes some Saturn dealers are trying to keep their brand alive by selling Indian or Chinese cars under that nameplate.

Carmakers in both those countries are surely salivating at the idea.

And, if you’ll look at the WSJ graphic, it’s perplexing as to why GM would ax Saturn; it’s sales, like all carmakers not named Hyundai, are off, but they’re better than any other GM division except Chevy. And, outside the aforementioned Corvette, and trucks, which tend to have higher brand loyalty, is there any Chevy product which jumps out at you, or the general public?

This looks like the EV-1 all over.

Instead, kill GMC Trucks. Yes, trucks are a big moneymaker, still, but irrationalism of a nameplate aside, it is a tweaked-out Chevy, for doorknob’s sake! Kill Pontiac rather than just cutting it back. Tweak Buick more. Throw Pontiac's edgier vehicles to Saturn.

But, noooo ...

So, maybe we need to kill GM off. The government pension plan insurance hit would probably be less than the bailout hit. As first creditor, take GM physical plant and resell it. Use the bankruptcy for further pension plan reform.

Time to let GM die?

Hell, besides the way it’s killed quality, environmental carmaking the last 30 years, it’s now killing itself trying to get dressed up a like a Las Vegas bride for a wedding with government bailout money.

I mean, selling AC Delco? That’s getting awfully near the core.

Phasing out Saturn, GM’s red-headed stepchild? That shows, in a capsule, or under a microscope, the history of GM’s short-sightedness with it.

That all said, the Wall Street Journal notes some Saturn dealers are trying to keep their brand alive by selling Indian or Chinese cars under that nameplate.

Carmakers in both those countries are surely salivating at the idea.

And, if you’ll look at the WSJ graphic, it’s perplexing as to why GM would ax Saturn; it’s sales, like all carmakers not named Hyundai, are off, but they’re better than any other GM division.

This looks like the EV-1 all over.

So, maybe we need to kill it off. The government pension plan insurance hit would probably be less than the bailout hit. As first creditor, take GM physical plant and resell it. Use the bankruptcy for further pension plan reform.

Another car wreck for auto industry?

Instead of a single “car czar,” President Obama has the brilliant idea of Treasury Secretary Tim Geithner and White House economic Swengali Larry Summers serving as co-czars in everything but name.

Ten seconds’ guess as to where in the WH this idea originated.

Toyota gives Big Three Christmas gift of sorts

How else can you describe the news that Toyota lost money for the first time in 70 years? Now, no matter how much Richard Shelby and his anti-union Southern senator buddies try to spin it, this is clearly not just a Big Three problem caused by, in fair part, an intransigent UAW.

“It is just a matter of time before all major automakers are losing money,” an auto analyst in Tokyo for Credit Suisse Securities, Koji Endo, said. “And things will just get worse next year, when companies start losing money for the second consecutive year.”

This will certainly change bailout talk in the new Congress. Read the full story for details on the depth of its losses, especially here in the U.S.

Bush gives Big Three stay of execution

And still does Richard Shelby’s bidding

I’m not quite as agog as some another bloggers about President Bush’s announcement he will extend a $17.4 billion lifeline to GM and Chrysler, and the reported lucidity of thought behind the announcement, but I am pleasantly surprised, overall. I’m also surprised there’s no bankruptcy attached, but not totally; read on.

That said, as the AP notes, the bailout has some reorganization plan requirements like the House bailout bill of last week did. And, although there’s no bankruptcy attached, Bush did see this as the opportunity to back-door Richard Shelby’s anti-union ideas. The bailout calls for the Big Three to have wage (and bennies, I assume) and work rules competitive with foreign makers by the end of this year.

The Politico has more details.

Binding Terms and Conditions: The binding terms and conditions established by the Treasury will mirror those that were voted favorably by a majority of both Houses of Congress, including:
• Firms must provide warrants for non-voting stock.
• Firms must accept limits on executive compensation and eliminate perks such as corporate jets.
• Debt owed to the government would be senior to other debts, to the extent permitted by law.
• Firms must allow the government to examine their books and records.
• Firms must report and the government has the power to block any large transactions (> $100 M).
• Firms must comply with applicable Federal fuel efficiency and emissions requirements.
• Firms must not issue new dividends while they owe government debt.

Targets: The terms and conditions established by Treasury will include additional targets that were the subject of Congressional negotiations but did not come to a vote, including:
• Reduce debts by 2/3 via a debt for equity exchange.
• Make one-half of VEBA payments in the form of stock.
• Eliminate the jobs bank.
• Work rules that are competitive with transplant auto manufacturers by 12/31/09.
• Wages that are competitive with those of transplant auto manufacturers by 12/31/09.

Well, the wage rules aren't mandatory, at least.

GM likely to file bankruptcy – union fallout?

Moody’s gives it a 70 percent likelihood. The agency also gives 25 percent odds of a bailout, no “soft-landing” bankruptcy involved, and a 5 percent chance of a hard bankruptcy not part of a bailout. (Of course, we know how accurate Moody’s analysis has been the last five years. Then again, GM Is not a tranched CDO.)

Besides, given that Bush broached the bankruptcy option yesterday, even a Moody’s on the take could make this prediction.

Anyway, this is definitely a good news, bad news situation.

The good news is that it reduces the likelihood of pounding government sand down a rathole.

The bad news, as I blogged yesterday, is that a bankruptcy filing, especially one supported by Shrub, could be a back-door way to get Southern senators’ anti-labor strategy on the table through the usual “wage concessions.”

As I said earlier, ask airline pilots and flight attendants from most non-Southwest airline companies about that.

Bad news part 2 is also part of this. The General had already announced it is delaying building the engine-making factory for the hybrid-drive Chevy Volt. No word on how long of a delay is planned.

You can bet whatever delay GM planned earlier is going to get even longer. So much for the $25 bil in clean car loans from Congress, eh?