Washington Post columnist Gene Weingarten has calculated that possession of a Chevrolet Volt makes you sexier — but not all that much:

I assure her that I am a working journalist and that my question is purely hypothetical. Judging by appearances alone, I ask, what would be my theoretical chance of having sex with her, expressed as a percentage?

“Three,” she says finally.

He then gestures toward the Volt, and says:

“This is my ride,” I say. “Does this new information change the hypothetical answer at all?”

She takes a deep breath, lets it out slowly.

“Three-point-five.”

Hey, it’s a 16.7-percent improvement. Isn’t that worth $35,000 after tax credits?

And speaking of statistics, here’s the Cadillac section of GM’s January sales report, as snipped from The Truth About Cars:

I knew the XLR had been marked for extinction because of low sales, but I had no idea they were this low. Minus one? That’s even below the point where you can make it up in volume.

There are few people of whom you can say “Even when he’s right, he’s wrong,” and one of them is Ralph Nader, who has decided that General Motors ought to postpone its stock offering, currently scheduled for next week; he and three like-minded meddlers dispatched a letter to the President requesting that the sale be delayed indefinitely.

The Detroit News quotes Nader:

“It’s the same old arrogant GM. There’s no sense of gratitude that they wouldn’t exist without the government, without the taxpayers.”

That much, I’ll give him. Besides, it was just Nader in the interview; there was no mention of the other co-conspirators, one of whom is Joan Claybrook, one of the dimmer bulbs ever to occupy the back seat of a motor-pool sedan, whose major contribution to Western civilization has been the notion that people won’t drive fast if you limit the numbers on auto speedometers.

And this bit from the letter sounds Claybrookian, if not precisely Orwellian:

“As majority shareholder in GM, the United States has the ability to direct or influence the company’s investment decisions. As the U.S. reduces its share, so its capacity to influence such decisions diminishes.”

It must really frost them that Washington doesn’t own a piece of Ford.

Actually, there is a perfectly good reason not to sell off a bunch of GM stock right now, and it did get mentioned in the letter: the Feds stand to lose a fair chunk of change on this first sale. (A Detroit News estimate says up to $5.4 billion.) I have no doubt that GM is tired of having Washington looking over its shoulder, but inasmuch as I stand to lose eighteen bucks on the deal — $5.4 billion split 300 million ways — I’d just as soon they waited a while longer.

“How much do you want for the puppy?”

The child thought for a moment, then briefly channeled Dr. Evil. “One million dollars.”

A frown, and then: “How about two kittens at $500,000 each?”

And so a deal was made in the neighborhood, and everyone was happy.

It’s going to take something like that for the taxpayers to recoup their quite-involuntary investment in the American auto industry. From a new GAO report [pdf], we find this little jewel:

Equity value of company necessary to recoup investment:
Chrysler: $54.8 [billion]
GM: $66.9 [billion]

By comparison, Ford, an automaker not owned by the government, which is for the moment marginally profitable, has a market capitalization around $24 billion. How in the world is Chrysler, maybe half the size of Ford in a good year, ever going to be worth $55 billion? Somebody’s going to need an awful lot of high-priced cats.

Saturn, meanwhile, is dead:

General Motors will close Saturn and wind down its dealership network after a deal to sell the faltering brand to Penske Automotive Group collapsed, the automaker said on Wednesday.

The breakdown of a deal that had been widely expected to close this week will force some 350 Saturn dealerships to close and could cut 13,000 U.S. jobs that would have been preserved under a plan by auto magnate Roger Penske.

Penske had been negotiating with Renault SA to acquire vehicles for the Saturn brand once a production agreement with GM had expired. Those talks collapsed, scuttling the Saturn acquisition by Penske.

If Roger Penske, one of the smartest guys in all of cardom, can’t make something work, it’s not going to work. Period.

Final burial of the brand will be approximately one year from now.

What’s next, LaSalle? Oldsmobile dealers are feeling the squeeze:

In all, GM paid dealers more than $1 billion when it eliminated the 103-year-old brand [in 2000] because of dwindling sales. Some of the 2,800 Oldsmobile dealers took lump-sum payouts, which were based mainly on sales volume. Others agreed to annual cash payments for as long as 10 years.

Several dealers just learned they won’t be receiving the rest of their money because the automaker is leaving those payments in bankruptcy court with the “old GM,” according to a recent bankruptcy court filing. They’ll likely get pennies on the dollar for their claims, which vary, but ranged from $50,000 to $4 million.

The last Oldsmobile was built in April 2004.

(Via The Truth About Cars.)

I suspect that this is not going to be the next Google:

The General Motors Company, the new automaker majority-owned by the United States Treasury, said Friday that it intended to make an initial public offering of stock by July 10, 2010, the one-year anniversary of its exit from bankruptcy. The target date range for an offering was disclosed Friday in a federal regulatory filing that the company said summarized its activities in the four weeks since it left court protection.

I’m trying to decide whether to question the timing. There’s no reason to think the General will be in much better shape this time next summer; on the other hand, if nothing goes wrong(er) and the stars line up correctly, we’re looking at about four months before the hotly-hyped 2011 Chevrolet Volt is supposed to go on sale. If the Volt proves to be the game-changer GM swears it will be, the folks who bought in for a pittance in July will turn a tidy profit in December or January.

Meanwhile, No Longer Second Deputy Under-Assistant Car Czar Ron Bloom says Chrysler won’t be doing likewise for a while:

“I don’t think Chrysler’s I.P.O. is a 2010 event,” Mr. Bloom told reporters at an automotive conference in northern Michigan. “I think it’s a little further off. But again, that will be the board’s judgment.”

Mr. Bloom referred to Mr. Obama’s directive that the government sell its stakes in the carmakers “as soon as is practicable.” He stressed, though, that unloading the 61 percent share of G.M. and 8 percent share of Chrysler would take time so as not to destroy their value.

On the other hand, an IPO would be a pretty good indication of whether those shares have any value in the first place.

(Via The Truth About Cars.)

Second Deputy Under-Assistant Car Czar Ron Bloom let it be known yesterday that the car companies the government controls are once again responsible for their own warranty coverage:

Toward the beginning of the restructuring process, the Auto Task Force implemented a Warranty Program to give confidence to GM’s and Chrysler’s customers during a period of substantial uncertainty regarding the outlook for the companies. With the successful emergence of the new companies, consumers can now feel assured that the companies have the financial wherewithal to meet their warranty commitments on a continuing basis. As such, the Auto Task Force determined that it was appropriate to end the Warranty Program. I am happy to report that $641 million invested in the program has been returned to United States Government along with interest payments on the program. This achievement represented a prudent short-term use of taxpayer funds.

Of course, $641 million compared with the untold billions poured into these particular ratholes corporations — well, let’s see if the bank will take $2.69 toward my mortgage payment next month.

Still, we should hope Mr Bloom’s confidence is not misplaced, if only because it would be nice to get some sort of return on, um, investment.

(Via The Truth About Cars.)

One possible obstacle to the restoration of General Motors, apart from its lack of solid product lines, its myopic upper management, and its beyond-myopic upper-upper management in Washington, is its name: it’s just too twentieth-century, maybe even nineteenth-century, and doesn’t speak to contemporary buyers.

So how about GenMo?

A shortening of the current name, tailored for today’s shorter attention spans. Preserves the equity of decades’ worth of branding, while making it that much easier for disgruntled customers / employees / creditors to spit out as a curse.

Hey, it worked for FedEx.

I note that Japan’s most successful automakers, Toyota and Honda, are named after their founders. (Toyota messed with the spelling a little bit, but no one complained, nor did anyone gripe at Mazda either.) Perhaps GM should be renamed for Billy Durant. And given its current state, it should be Durant’s middle name.

I turned this up on Usenet, and it’s at least as ludicrous as some of the Y2K stories that floated around ten years ago. It was found in alt.home.repair.

Since GM has begun their bankruptcy, their cars and trucks are failing quickly. It’s estimated that by the end of the month, no GM vehicles will be running or repairable. The cause is in the engine’s computer controlled ignition system. It’s a little known fact that ever since computer circuits became part of modern vehicles, the manufacturers have been sending out a signal via satellite which monitors and controls these vehicles and adjusts their operation based on instructions generated by their systems which is based on the data received from petroleum refiners, which instructs the engines to function according to changes in fuel refining. This is just part of the picture, because these auto manufacturers also adjust these engine control systems based on location, altitude, and other external conditions, solely based on GPS signals being sent by the vehicle.

With GM in bankruptcy, these signals have ceased to operate. Vehicles are now unable to adjust their systems according to variable fuel and environmental conditions, and are now locked according to the last signal sent by GM prior to the start of the bankruptcy proceedings.

It’s already been determined that in the last few days, GM vehicle gas milage has dropped by ten to thirty percent. Emisions have risen dramatically, and engine output power has dropped significantly.

The result has been, but not limited to engine flooding, poor engine timing, loss of vacuum control, scored cylinder walls, and eventually complete engine failure. It’s just a matter of time before all GM vehicles will fail and become unrepairable. This affects all GM vehicles except those manufactured prior to the use of computerized controls. All GM vehicles still in use who were manufactured prior to the early 1980′s are not affected. All vehicles since then are computerized and will fail within the next few weeks.

Now is the time to consider the effects of being without a vehicle. If you rely on your vehicle to earn a living, or require a vehicle for survival, now is the time to purchase another vehicle manufactured by another company, and send your GM vehicle to the salvage yard before it leaves you stranded, undermines your income, and possibly endangers your life.

James V. Masters
Automotive Engineer
Masters Automotive Engineering Inc.

If you’re concerned about this, a helpful hint: the tinfoil goes between the sunroof and the headliner.

It’s official: Roger Penske’s Automotive Group will acquire the Saturn brand from Government General Motors for a price believed to be somewhere north of three dollars and a sackful of kittens.

Saturn’s five-vehicle line is being pared to three — the Sky roadster and the compact Astra sedan will be put to sleep — and GM will continue to build the remaining vehicles (the Vue SUV, the Outlook crossover, and the mid-sized Aura sedan) for two years. All of these, I note, are bigger than the models being deep-sixed.

The deal is expected to be completed in October.

The German automaker, owned since 1929 by General Motors, is apparently not going to be thrown to the hounds of bankruptcy: a last-minute deal this weekend will reduce GM’s holdings to 35 percent, with 35 percent to be owned by Sberbank in Russia, 20 percent by Canadian parts supplier Magna, and 10 percent by Opel employees. Magna and Sberbank will kick in 500 to 700 million euros to finance the deal, and will seek loan guarantees from the German government. GM will not receive any cash: their compensation will come from continued access to Opel technology. All four German plants will be kept open, though job cuts are likely.

Still unclear: the future of Vauxhall, the GM outpost in Britain, and its two assembly plants, and of the Opel plant in Antwerp, Belgium.

The world’s first plug-in hybrid, the F3DM from BYD, has gone on sale in the Chinese domestic market. How’s it doing? A few breaths short of “Meh”:

Warren Buffett’s hefty investment into the cell phone battery maker quieted the skeptics and gave green-hued futurists a license to thrill. A 60-mile plug-in range, a multiple-mode hybrid system and a price tag under $25K had American hypermilers factoring in local tax credits and greengasming at the fantasy of it all. But in the world’s new largest market for automobiles, even $20K is a huge amount of money. And it turns out that one society’s eco-fantasy is another society’s overpriced, overly-complex answer to a question nobody has asked.

Xinhua reports (yes, nearly a week ago) that BYD’s F3DM has utterly failed to attract Chinese consumers; the firm has sold only 80 models since it went on sale in December. Apparently 20 of those were bought by the city of Shenzhen (think China’s Detroit) with the rest going to the local branch of China Construction Branch. In fact, BYD never even attempted to target private consumers with the model, despite the fact that an F3DM costs 30-40 percent less than a Toyota Prius (which only sold about 3,500 units in China between 2006 and 2008). Even the government isn’t rushing to put its citizens in the alleged volks-hybrid, offering a $7K hybrid subsidy to fleet buyers only.

Buffett’s Berkshire Hathaway group, through a subsidiary, owns 10 percent of BYD.

The F3DM has a 1-liter inline-three producing 75 hp, plus two electric motors. The battery design is BYD’s own. Projected range is 60 miles.

All this is cause for concern at Specific (formerly “General”) Motors: if the car-crazy Chinese won’t buy a $20k hybrid in a booming market, how are they going to sell a $40k hybrid (Chevrolet’s Volt) in a market gone to pieces? Answer: more subsidies, of course. I have to wonder if this fact will appear in the advertising: “You’ve already paid for this car, now drive it.”

Yet another bid to save Saturn, this one with Oklahoma City roots:

An Oklahoma City private equity firm has teamed with a group of Saturn dealers in an effort to buy the money-losing brand from General Motors Corp.

The proposal from a group led by Black Oak Partners LLC is among several that GM has received for the brand, said GM spokesman Mike Morrissey.

“We are working with all those groups,” Morrissey said. “It’s too early to speculate as to what the ultimate outcome is going to be.”

Jennifer Threet, a spokeswoman for the Black Oak group, said it delivered a proposal to GM last week and is awaiting a formal meeting.

Unlike this earlier proposal, the Black Oak group would not hook up with one existing manufacturer as sole source: Saturn 2.0 would maintain a design team, which would then work with outside automakers to tailor appropriate models accordingly.

Lost in the uproar over the Rickrolling of General Motors was this announcement regarding the supposedly-doomed Saturn marque:

“In the next three weeks, we will announce a long-term partnership that will provide Saturn with world-class cars,” said Todd Ingersoll, who owns Saturn of Danbury [CT] and Saturn of Watertown [also CT].

“This will ensure the brand not only survives but flourishes.”

Ingersoll has been leading a task force organized by Saturn’s Franchise Operations Team. It has been looking at ways to spin off the brand from General Motors.

The task force was established in December after GM officials said they would focus on the four core brands of Chevrolet, Cadillac, GMC and Buick.

Still unannounced, of course, is the name of this proposed partner. I’m guessing, mostly by the process of elimination — who else is there? — that Saturn is trying to hook up with PSA Peugeot Citroën, the second-largest automaker in Europe, which has had no presence Stateside for many years, unless you count Lt. Columbo’s Peugeot 403.

In the meantime:

Ingersoll said Saturn will transition during the next two years from vehicles in the company’s current lineup produced by GM to vehicles that will be produced by the new long-term partner, which he declined to name.

He also declined to comment on whether the long-term partner would purchase the Saturn brand, provide vehicles for an independent Saturn, or whether the future organization would be some hybrid of both options.

Either way, it’s too late to save Saturn of Northwest Arkansas, which closed two weeks ago.

Prediction by me, January 2006:

General Motors CEO Rick Wagoner will resign rather than file Chapter 11.

It didn’t happen in 2006, and it took the prodding of the President of the United States to make it happen in 2009, but The Rick is history, and bankruptcy is very much on the table:

The White House’s insistence that Wagoner step down represented an extraordinary intervention of the federal government into the management of a private company. A senior administration official said Wagoner’s resignation was required because the company needs a “clean sheet.”

Fritz Henderson, The Rick’s Mini-Me, isn’t likely to improve the level of brightness around there; they’re going to have to replace much of the board of directors before too awfully long, if only because the New Automotive Order will so utterly baffle such an insular bunch. (Okiedoke’s Mike is calling for exactly that, and then some.)

President Obama’s automotive plan includes Treasury backing for GM (and Chrysler) warranties, even in the event of bankruptcy, a move which perhaps will reassure at least some skittish potential customers.

I am not exactly enthralled with this package, especially since no one in Washington seems to be leaning very hard on UAW boss Ron Gettelfinger — like this is a shock with a Democratic administration — but at least we’ll see if what Mr Obama thinks an American auto industry should look like in any way resembles what we think he thinks it should look like, and whether his vision differs in any substantive degree from the desires of the pettifoggery specialists at the Capitol.

Addendum: E. M. Zanotti observes:

I almost wish Obama were angling to clean out the entire corporate headquarters of everyone who received a check full of cheese: clearly our standards for Captains of Private Industry are far too low.

Yea, verily.

The General is moving some battery-powered hardware these days: for 2008, GM sold 14,439 hybrid-powered vehicles, including a heady 2555 in December. This was only 1.15 percent of their December volume, but I’d hazard a guess that barely 1.15 percent of actual auto buyers — I’m told there are some left — are aware that GM even has hybrids.

That said, the more industrial-strength hybrids, the Two-Mode trucks, are the bigger sellers: of those 2555, 1729 were the Tahoe/Yukon/Escalade monsters that still weigh two and a half tons yet somehow get 20 mpg. And that’s good: getting 20 mpg instead of 12 cuts your fuel bill by 40 percent, not an inconsiderable amount even in these fleeting times of cheapish gas, and a major virtue when prices turn back upward. GM’s hybrid cars, which use lower-end technology and realize smaller gains, are selling a bit less energetically. (26 mpg over 22 isn’t such a big deal.) And I suspect that they’re holding back a bit, lest they cannibalize sales from the Chevy Volt once it gets here.

Whither General Motors? Robert Farago offers a scenario, and it’s not pretty:

As there’s nothing GM can do to generate the profits it needs to cover its overheads, as any real turnaround would take over $100b and at least five years, sooner or later, GM is headed for more public humiliation. How much more of that can GM take?

It’s one thing to get steamed at a politician for pissing away $700b of your hard-earned money for his or her best buds on Wall Street. All you can do is not take out a loan from TARP-blessed banks (that won’t give you a loan anyway) and/or vote the offending politicians out. You know: later. But if a carmaker is blowing your taxes, retaliation is easy. You don’t buy their products. You want my business? Sorry, but I gave at the office.

Mark my words: if GM uses taxpayer money to stave off bankruptcy, and then comes back for more, executive haircuts and public equity stakes won’t do squat to mollify an enraged public. There will be a consumer backlash that will make bankruptcy seem like a J.D. Power Award.

The public’s already a bit peevish over Washington’s acute case of checkbook abuse; one could argue, I suppose, that the amount proposed for diversion to Detroit is insignificant in the grand scheme of things, but if there’s one thing the government doesn’t execute well, it’s grand schemes.

I’m starting to think we should just turn the whole lot of them over to the Slovakians. They may not have much experience actually owning car companies, but with Kia, Volkswagen and PSA Peugeot Citroën now operating plants there, I’m pretty sure they know how to build the darn cars.

J. G. “Jay Tea” Thayer offers a long-shot, but maybe not that long, plan to save General Motors:

Step One: file for Chapter 11 bankruptcy.

This will freeze in place many of the factors currently pressing GM towards collapse. It will also give a judge the authority to make sweeping changes within the company that it cannot do by itself.

Step Two: Fire current management and appoint [Mitt] Romney CEO.

This will satisfy many of the public’s thirst for blood. It will also send the message that nothing is sacred, nothing is off the table. Whatever needs to be done to save the company — in some form — will be done.

The terms of Romney’s two-year contract will be simple: he will be paid the base rate of a union line worker, plus expenses and a bonus plan based on GM’s return to profitability — preferably stock options, where his own compensation will be directly linked to his success.

In return, Romney will be granted near-absolute power over the company, putting together a new management team and restructuring it — from the ground up, if necessary — to make it a viable, ongoing business.

Mitt has a couple of advantages here: he grew up in the auto industry — his father was American Motors chairman George Romney — and he has an enviable track record with failing companies. It may be true, of course, that GM can’t be saved no matter what, but this proposal deals concretely with the company’s two biggest problems: its existing contracts, which Chapter 11 could set aside, and its upper management, which has run the place into the ground. Besides, it’s not like Romney has anything better to do these days.

(Spotted by martinra at Daily Pundit.)

Worth at least a pound of performance anyday. Ken Elias finds this telling quote in GM’s quarterly SEC filing:

“In connection with their year-end audit of our annual financial statements, our independent auditors assess whether a statement should be included in their audit report related to the existence of substantial doubt related to our ability to continue as a going concern. If the report on our audited financial statements included such a statement, we would not be in compliance with the covenants in certain significant credit agreements, including our $4.5 billion secured revolving credit facility and $1.5 billion U.S. term loan, both of which would be callable by the lenders. Additionally, we have other significant obligations that include cross-default provisions that could be triggered by a failure to comply with those credit agreements. We would need to seek a waiver from the lenders for any covenant breaches or cross defaults, or arrange for substitute financing. There is no assurance that we could cure a default, secure a waiver or arrange substitute financing in such circumstances or that we would not incur significant costs in doing so.”

Factor out some of the legalese, and you’re looking at a statement of abject fear: if the auditors say Boo, GM is utterly screwed. Still, this is consistent with other GM statements over the past year, in which the blame for their sad state is placed on the UAW, on the ongoing “financial crisis,” on the price of gasoline, on anything and anyone other than the nitwits in the RenCen who drove the company into the ground and who are now desperately trying to save their phoney-baloney jobs. There’s a case to be made for bailing out Detroit, maybe, but things are never going to improve with these guys around.

D-E-A-L-I-N-G?

South Korea’s Hyundai Motor Co has had talks with Chrysler LLC owner Cerberus Capital Management about a potential acquisition of the struggling U.S. automaker’s Jeep brand and possibly other assets, people with knowledge of the talks said on Friday.

The emergence of South Korea’s largest automaker as a potential bidder for at least part of Chrysler comes on the same day General Motors Corp said it was abandoning its own pursuit of an acquisition of its cross-town rival.

Cerberus also plans to restart talks [with] other potential partners, including Renault-Nissan, the sources added.

First, the obvious point: people with no “knowledge of the talks” wouldn’t say things like that.

Actually, Hyundai and Jeep fit together fairly well. Jeep, unlike the other Mopar brands, has a fair amount of brand equity these days, and there’s very little overlap in the product lines: the nascent Kia Borrego is probably the only model that would be rendered superfluous. (Yeah, there’s the Jeep Compass/Patriot, but they were superfluous before there was any merger talk.)

Getting hold of Chrysler’s extensive dealer network might theoretically be useful to Hyundai, which still has a reputation for fast-talking guys in plaid jackets catering to subprime customers. But the advantage goes away if they have to sell actual Chryslers as part of the deal, so I suspect that if there’s any deal here, it will be just for Jeep.

How to dispose of the rest of the company? We know that Nissan is dumping its big Titan truck after 2010, replacing it with a version of the Dodge Ram, and that Nissan will be building two small cars for Chrysler, one a Versa variant for South America and another to be sold in Chrysler’s “global markets,” such as they are. And Carlos Ghosn has long made noises about adding a US-based affiliate to the existing Nissan/Renault partnership. Nissan doesn’t need Jeep, really, since they have enough SUVs for a dwindling market; assuming Jeep goes to Hyundai, Nissan could reposition Dodge as strictly a truck brand — the Viper will be spun off to a third party, the Challenger will run its course, the rest don’t matter — and use the Chrysler channel for minivans (wouldn’t you rather have a Town & Country than a Caravan, even a Grand one?), the aforementioned Nissan-built small car, the successor to the 300 (let us pray), and the occasional revamp of a Renault Euromobile, though this latter might be tricky, since the one Renault that might sell well here, the mid-sized Laguna, could steal sales from Nissan’s Altima, built on the same platform.

A third, dimmer prospect: Volkswagen, for whom Chrysler is already building a minivan. We know VW wants to increase its market share in the States — in fact, they’re building a plant in Chattanooga to take advantage of the relatively-weak dollar. But I suspect they want to do it under their own name, not somebody else’s.