Good GM - Bad GM
60 Days to Chapter 11?


The Wall Street Journal has additional information about Monday's Barack Obama press conference on the auto bailout. The President announced that both GM and Chrysler failed to submit a viability plan acceptable to the government. (Soon afterward the Canadian government also gave the plans failing marks.) The government will be replacing most of General Motors' board of directors, and will be giving the company 60 days to put a plan in place that the government thinks is worth putting more dough on the table. If not, President Obama said, that an orderly bankruptcy is an option with government supplied debtor-in-possession financing. To assuage the fears of consumers, B.O. said that, effective immediately, the government would be standing behind the warranties of GM and Chrysler products.

The overall tone of the session suggests that the government isn't really counting on GM cutting any deals with its core creditors or labor. The government has a plan in mind to split GM into two parts, Good GM (including Chevrolet, Cadillac and some foreign assets) and (Bad GM including Hummer, Saturn and virtually all the legacy costs). Creditors and the UAW retirees would get an equity stake in Good GM, and Bad GM would be left to rot waiting for a buyer.

Whether GM goes Chapter 11 or not, it's clear the government is expecting a new collective bargaining agreement with cuts much deeper than the UAW has been willing to grant so far.

For the Marginally Relevant Youtube Clip? How about a tasty morsel of "bad Kirk" from the Classic Trek episode, The Enemy Within. Go buy the episode or dvd so Paramount doesn't get mad at me for embedding this.

"In a Brave New World, with just a handful of men. We'll start all over again."

Government to Mandate Chrysler/Fiat Marriage in 30 Days?




Google News is showing over 2,000 news articles on the Government Auto Bailout. A Bloomberg.com article posted an hour ago says that the Government is mandating that Chrysler complete a deal to combine with Fiat within 30 days, with $6 billion being the carrot on the end of the stick. Beats me how $6 billion is going to pay for operating losses for at least two years and the retooling of almost all of Chrysler's factories.

On the other hand, the Raleigh News & Observer (online) has another take on the status of the government position. The N&O says that the government has rejected GM and Chrysler's requests, and says the government is only committing to 60 days worth of operating capital for GM to get its shifts together (or something to that effect) and reform its way to viability. Apparently sending Rick Wagoner on his way on the blunt end of the Tom Dempsey express was the first part of the government's demand. Chrysler will be given 30 days to cut a deal with Fiat. Fiat will be limited to a 49% stake in Chrysler until all loans are paid and must commit to building small cars and engines in the US. The government report is especially critical of Chrysler noting its poor quality scores in Consumer Reports and its 3% market share of small cars. In essence, Chrysler is on double secret probation. It's a good thing Chrysler has Dean Bob Nardelli at the helm.

Rick Wagoner is a Goner
GM CEO Resigns under Pressure from Obama



The Detroit Free Press is reporting that GM Chairman & CEO, Rick Wagoner has resigned. Not only that but it was President Obama who pushed him out the door as a condition of getting more government money. When the news hit, there was sunshine all over the world. The lion laid down with the lamb. Yada Yada Yada. It truly is a sunshine day.

There's Always Someone More Talented than You



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Coming Soon to a Theater Near You -
SCARY MARY

The Most Annoying Guy in the Office

Can Autotune get more annoying? This clip shows it can, when your coworker has it and isn't afraid to us it.


Auto Tuning from Casey D on Vimeo.

FYI, I have Autotune, and I'm not afraid to use it.

Elon's Coming

Tesla Model S: A Tesla for the Resta Us

Yesterday, Tesla head Elon Musk formally unveiled the Tesla Model S Sedan. Now Tesla, a car maker who has been accused of spending a couple hundred million dollars on vaporware has one model (the Roadster) in series production and a higher volume model in running prototype form.

The Model S is interesting, this 4 door sedan seats not 4, not 6, but 7 -- two in the front, three in the back, and two rear-facing jumpseats extending into what would ordinarily be the trunk area. I say ordinarily because the main storage compartment is under the hood. The Model S, being all electric, doesn't need that space for an engine, since it doesn't have one.

The model S will apparently have almost the same va-va-voom as the roadster, with 0-60 in 5.5 seconds. The base model will run approximately 160 miles per charge. You can add a long-range battery pack to extend the range up to 300 miles. The price for all this 21st century goodness? $57,500, but it is projected to be $49,900 after federal tax credits. There are a lot of slower, less roomy, less interesting cars that cost a lot more than that. Tesla would like to produce 20,000 units per year if they can get a government loan to build a new factory.

Since the government is currently paying Chrysler and GM to build thousands of gas-hog SUV's and may in the future pay Chrysler to tool up to build Fiats, it seems defensible to pay Chrysler or GM to subcontract to build the Model S instead.

I'm sure the car has plenty of bugs to work out, but you have to start somewhere, and the Model S is as good a place to start as any.

(information and picture via Autoblog Green)

Bankruptcy of GM/Chrysler Unlikely on 3/31
Task Force Is Likely to Back More Loans

According to this morning's Wall Street Journal, The Presidential Task Force on Automobiles is likely to endorse more interim loans to General Motors and Chrysler rather than a mandated bankruptcy filing. This makes the March 31 deadline less likely to be a "do or die" date.

Youtube Video of the Day:
Hey Paul Krugman

Meet Zapata George - The Next Stock Market Guru



What's not to trust?

GM Bondholders are Unhappy Campers

Reuters is reporting that the unofficial GM bondholders' committee sent a joint letter to the Presidents Task Force on Automobiles, PTFOA (not to be confused with PITFA), objecting to the plan to convert 2/3 of the bondholders' interest into equity in the NEW General Motors. There's a not so subtle threat that if the bondholders don't get their way, they'll throw the General into involuntary bankruptcy.

If you believe GM's financial statements, the bonds have a book value of about half their face value, and these bondholders think that 33% plus a chunk of ownership with new government money is a worse deal. Personally, I think they're bluffing.

Turdotax 2008

Our topic for discussion: Why does Turbotax hate me? What did I ever do to it? Nuff said.

Deuce Little Coupes
Chevrolet Camaro & Hyundai Genesis Coupe Come Out Fighting



Within a matter of days or weeks, the 2010 Chevrolet Camaro and 2010 Hyundai Genesis Coupe will both hit the showrooms. These are two similar, yet different takes on the traditional rear-wheel-drive muscle car. These cars will be joining a still-fresh Dodge Challenger, a revived 2010 Ford Mustang, and other performance cars such as the Nissan 370z and Pontiac G8, all going for a piece of the lower end of the market for cars with 300+ horsepower.

Both the Camaro and the Genesis Coupe start at $22k and change, but naturally they can go up sharply from there. I did a quick price comparison at Michael Karesh's site, truedelta.com, and comparably equipped V6 versions of the two cars price out within $100 of each other (advantage Camaro). They may be similarly priced and going after the same market, but they attack the performance coupe market segment from two different directions. The Camaro is a good hearty steak, whereas the Genesis is more like a brazed lemon chicken fillet.

The Camaro comes back after being on hiatus since 2002. The 2010 base model leads with a 300 horsepower 3.6. liter V6 that is almost as powerful as the 5.7 liter V8 in the 2002 SS model. Chevrolet surprised its critics by posting a better than expected 29 MPG highway rating for the V6. If a 0-60 time of 6.5 seconds isn't good enough for you, you can upgrade from the V6 base model to the 6.2 liter V8 of the SS model, and its 425 ponies will whisk you from 0-60 in 4.6 seconds. Needless to say, you'll pay more to the bank and at the pump for that adrenalin rush

The Genesis Coupe is a very different beast than the Genesis Sedan that was introduced a few months ago. At under 3,300 lbs. the base Genesis is about 500 lbs. lighter than the base Camaro. The base Genesis is powered by a 210 horsepower turbocharged 2.0 liter 4-cylinder engine. A 3.8 liter V6 is the more powerful engine, yielding 306 horsepower, and sending the car from 0-60 in about five and half seconds. Though pulling a lighter car, neither engine can match the base Camaro's MPG. On the other hand, the Genesis features a sophisticated multilink rear suspension, that the Chevy can't match.

The Camaro and the Genesis join a crowded field of new muscle cars. The Dodge Challenger was new for 2009, and the Ford Mustang receives a major facelift for an early 2010 introduction. I prepared a quick comparison through the Edmunds.com car comparison feature here. The bottom line is that you are a performance junky and you must have rear wheel drive, the choice now is as good as it ever has been, and is better than it will likely be. Now go out there and stimulate the economy.

(Pictures courtesy truedelta.com.)

Youtube Clip of the Day:
Spacebat: A Tribute

March 31st - D-day or Not

A condition to the most recent bailout money distribution to Chrysler and GM was that each company was supposed to have supplier and labor agreements in place with a written plan of viability by March 31, 2009. Now we are less than two weeks away and according to the Detroit News, sources within the Obama administration's Auto Task Force say that the March 31 deadline is "unlikely to be enforced."

It seems like just yesterday (because it was) that Chrysler CEO Bob ("Dean Bob") Nardelli said on CNBC that Chrysler will need another $5 billion by March 31, otherwise they need to begin an orderly shut down of operations.

Meanwhile task force member Steve Rattner has suggested that bankruptcy is all but off the table. I think you can trust Rattner. He treated Stacy with respect. He wasn't a lying creep like Damone.

Where's My Flying Car?




Warning: in this video, the pilot reaches between his legs and pulls out his joystick.

Ford UAW Workers Ratify Concessions

By a 58% majority, Ford UAW workers ratified a concessions package as a modification to their 2007 collective bargaining agreement. Base pay, healthcare benefits and pension were not reduced, but there are significant cutbacks in other areas. The jobs bank was eliminated. Laid-off workers will receive only partial pay (in addition to unemployment in most cases) on a declining basis for up to two years. Workers agreed to work 4 10 hour shifts per week without overtime. There are changes to the skilled pay classifications.

The most important provision is a change to the retiree healthcare VEBA. As I understand it, all of Ford's contributions to the VEBA going forward can be made in the form of nonvoting Ford stock. If fully funded, the VEBA would end up owning 25% of the company.

Critics have said these cutbacks are minor. I doubt that Ford workers, Ford management or the Ford family members would agree.

Chrysler and GM now face the challenge of negotiating similar or deeper cuts. It will be very hard to get the union to voluntarily take GM or Chrysler stock right now, especially without binding debt for equity deals with the other creditors.

GM issues "Going Concern" Warning

Today GM releases its annual report. News services are reporting that the annual report contains a "going concern" statement by the auditors. This was not unexpected, so the warning may or may not have a big effect on the company's share price, which has been hovering around $2.00 per share lately. javascript:void(0)

I KILLED PAUL HARVEY



It's been a little over a week since I've actually posted anything. It's not for lack of news. There's that Ginormous Stimulus thing. I don't know what to say about it. It will either work or not. There's the Huge GM loss. Not much I can add to that.

So, I want to talk about Paul Harvey. This guy lived to be 90, and worked almost until the day of his death. Nothing could kill him. Hardly anything could slow him down -- until I came along. It seems like jJust yesterday that I talked about Paul Harvey in this blog. (Actually, it was February 6th.) Paul Harvey died this weekend. Coincidence? I think not.

I am become death, the destroyer of worlds.


I'm afraid now that there's some curse, that if I mention some public figure, something bad is going to happen to them. That's ridiculous, right? So, who should I ask for a second opinion on this, Karl Rove, Dick Cheney, Rush Limbaugh, or Bill O'Reilly?