Although UAW officials and their allies counter the banks have been an effective way to keep a flexible job pool available and allow the companies to implement new technology while reducing overall numbers responsibly. More view that as complete hogwash.

Not much is known as of yet about specifics on the discussions. As of now we've only got a wire service report from the Journal telling us:

"The United Auto Workers union is in talks with some of Detroit's Big Three auto makers to stop a program that pays idled workers - WSJ"

Guess we'll have to wait for more. You'll hear it as soon as we hear it.

[via WSJ]

When asked about the request to the FAA, GM spokesman Greg Martin declined to discuss the reason, only saying "we availed ourselves of the option as others do to have the aircraft removed."

The move comes after the automaker was criticized for flying CEO Rick Wagoner (pictured above demonstrating a landing maneuver) in a leased Gulfstream Aerospace G-IV jet on November 18th and 19th to testify in front of Congress for a $25 billion loan to save the American auto industry.

While the move is something they're "allowed" to do, it's monumentally stupid given their desire for a bridge loan to save the company. Congress, the media and the public (even SNL!) already would like to tar and feather the automaker and it's CEO, this is yet another reason to do it. Just a hint to the PR staff at the General — right now you need more transparency, not less of it. You certainly don't need to be making moves easily perceived by the public as hiding information, and this can very easily be perceived as such.

We're beginning to wonder whatever happened to GM's vaunted PR staff — and whether there's anyone over there who's truly in command of the automaker's message.

[Bloomberg]

GM And Tiger Woods Announce End To Endorsement Deal

DETROIT, MICHIGAN – General Motors and Tiger Woods announced today that they will conclude their endorsement deal effective December 31, 2008.

Both GM and Woods agreed to a mutual and amicable separation that included a desire for more personal time for the 14-time major winner who is expecting his second child in late winter as well as the search for budget efficiencies during a difficult economy for General Motors. For the past nine years, Woods has endorsed GM products around the world and has been heavily associated with the Buick brand in the US, Canada and China markets.

Mark LaNeve, General Motors North American Vice President of Sales, Service and Marketing said, “Tiger has been a great friend to GM and a fantastic asset through the years helping to bring consumer awareness to many new GM products. In light of the news coming out of Washington,” LaNeve added, “This decision is the result of discussions that started earlier in the year and the timing of this agreement with these other activities is purely coincidental.”

In a statement, Woods commented, “I am very proud of the long standing partnership I’ve had with GM and have enjoyed being a part of the company’s dramatic product evolution. We’ve had a lot of fun together and I participated in some unique and rewarding activities. We’ve enjoyed a tremendous partnership over the years and we will maintain strong ties with the many people at GM we call friends.”

[Source: GM]

For example, when we heard Casey Wilson as NY Rep. Carolyn Maloney (D-Clueless) explaining to the auto chiefs Congress mandated 200 MPG cars and in doing so they've "done their part." The joke on cluelessly ineffective CAFE over-reaching was met with absolute silence. Contrast that with a moment later when Hammond, as Nardelli, responds to the question "What is Chrysler doing to make more fuel efficient cars?" with "I don't know." The joke's greeted with massive laughter. Here's a tip for GM, Ford and Chrysler — when you become a bigger punchline than Congress, you know you've done a piss-poor job at message management. Just sayin'... [SNL via Crooks and Liars]

"I want to bring Michigan back. I am not willing to sit back and say 'too bad for Michigan, too bad for the car industry, too bad for the people who lost their jobs, they are gone forever.' I will not rest when I am president of the United States until Michigan is brought back."

January is a long time ago in Romneyville as Mitt said this in the NY Times earlier this week:

IF General Motors, Ford and Chrysler get the bailout that their chief executives asked for yesterday, you can kiss the American automotive industry goodbye. It won’t go overnight, but its demise will be virtually guaranteed.

What's the difference?

After losing both the New Hampshire and Iowa primaries, Michigan became an incredibly important state for Romney's presidential quest. He was a big cheerleader for the auto industry and, according to the NY Times He:

campaigned as a populist champion for the auto industry on his way to winning Michigan’s primary last year, excoriating Senator John McCain for declaring on the stump that some of the industry’s lost jobs were not coming back.

Circumstances are different now and the $700 billion treasury bailout enraged small business conservatives. Michigan isn't as important a state for Romney as it once was and, if he wants to stay relevant, talking about the Detroit bailout has proven to be a big way to gain attention.

There's nothing wrong about believing that bankruptcy is the best path for the automakers. Many would disagree, but it is a completely valid point. What's wrong is that when Romney says Detroit shouldn't "ask Washington to give shareholders and bondholders a free pass — they bet on management and they lost," he fails to mention that in Michigan, during the primary, he also bet on Michigan. He said that he opposed new mileage requirements. He said we should give aid to bailout health care and pension costs of the automakers. From another article in January:

Romney proposed increased government spending for research on advanced fuels and vehicles, aid to automakers to deal with the costs of health care and pensions for retirees, and tax cuts for most taxpayers to help them buy new cars.

[...]

In Warren, McCain said he would be "ashamed" to tell voters that the lost jobs would return to Michigan, but he vowed to take care of displaced workers through a promised job retraining program that would be offered through community colleges.

There's nothing outrageous about what Romney is saying, but we have yet to see him aknowledge why he suddenly changed his mind.

[Photos by Bryan Mitchell/Getty Images, Scott Olson/Getty Images, GEOFF ROBINS/AFP/Getty Images, Bill Pugliano/Getty Images, J.D. Pooley/Getty Images ]

Jalopnik Snap Judgement: While the initial flavor of this campaign is tacky, it might prove to be a good move after all. GM still has a fairly rabid customer base that hopes to be driving The General's products in the future and this is a way they can secure that dream. Raising customer awareness of current pressing issues while garnering support for near-zero dollars? GM doesn't have that many options left. Anyone who bought a Chevy Equinox when there are, possibly, millions of better cars out there certainly wants to stick by the General.

Here's the email in full:

Dear (name removed),

You made the right choice when you put your confidence in General Motors, and we appreciate your past support. I want to assure you that we are making our best vehicles ever, and we have exciting plans for the future. But we need your help now. Simply put, we need you to join us to let Congress know that a bridge loan to help U.S. automakers also helps strengthen the U.S. economy and preserve millions of American jobs.

Despite what you may be hearing, we are not asking Congress for a bailout but rather a loan that will be repaid.

The U.S. economy is at a crossroads due to the worldwide credit crisis, and all Americans are feeling the effects of the worst economic downturn in 75 years. Despite our successful efforts to restructure, reduce costs and enhance liquidity, U.S. auto sales rely on access to credit, which is all but frozen through traditional channels.

The consequences of the domestic auto industry collapsing would far exceed the $25 billion loan needed to bridge the current crisis. According to a recent study by the Center for Automotive Research:

• One in 10 American jobs depends on U.S. automakers
• Nearly 3 million jobs are at immediate risk
• U.S. personal income could be reduced by $150 billion
• The tax revenue lost over 3 years would be more than $156 billion

Discussions are now underway in Washington, D.C., concerning loans to support U.S. carmakers. I am asking for your support in this vital effort by contacting your state representatives.

Please take a few minutes to go to www.gmfactsandfiction.com, where we have made it easy for you to contact your U.S. senators and representatives. Just click on the "I'm a Concerned American" link under the "Mobilize Now" section, and enter your name and ZIP code to send a personalized e-mail stating your support for the U.S. automotive industry.

Let me assure you that General Motors has made dramatic improvements over the last 10 years. In fact, we are leading the industry with award-winning vehicles like the Chevrolet Malibu, Cadillac CTS, Buick Enclave, Pontiac G8, GMC Acadia, Chevy Tahoe Hybrid, Saturn AURA and more. We offer 18 models with an EPA estimated 30 MPG highway or better — more than Toyota or Honda. GM has 6 hybrids in market and 3 more by mid-2009. GM has closed the quality gap with the imports, and today we are putting our best quality vehicles on the road.

Please share this information with friends and family using the link on the site.

Thank you for helping keep our economy viable.

Sincerely,

Troy Clarke

Thanks for the tip, Jeff!

An editor over at Cars.com, driving between Chicago and Detroit, noticed a bright blue 2010 Chevy Camaro RS just hanging out at a gas station outside of the Motor City. We're assuming the manufacturer-plated car is probably either an early pre-production model or from GM's captive test fleet. Either that or a cash-strapped GM decided to save money by not advertising the car's release and there are a bunch of them sitting at Chevy dealerships where they'll likely never be discovered. Probably not. [Kicking Tires]

From plants to parks. From dealerships to driveways. From gas stations to grocery stores. What happens in the automotive industry affects each and every one of us. In fact, the collapse of the U.S.-based auto industry wouldn't just impact the more than 239,000 Americans directly employed by the Big Three. One out of every 10 people in America is employed in a service that is related to the U.S. auto industry. If a plant closes, so does its suppliers, the local stores, the hot dog vendors, and the local restaurants. The effect would be devastating in ways of which you never have thought:

* Nearly 3 million jobs would be lost in the first year alone – with another 2.5 million to follow over the next two years
* Personal income in the United States would drop by more than $150.7 billion in the first year
* The cost to local, state, and federal governments could reach $156.4 billion over three years in lost taxes, and unemployment and health care assistance
* Domestic automobile production would more than likely fall to zero – even by international producers, due to supplier bankruptcies

The credit crisis that is affecting us all is wounding the U.S. auto industry in many different ways. Carmakers can’t get loans to restructure and to produce new advanced technology vehicles. Suppliers and dealers can’t get loans for routine business, and customers can’t get loans for new cars.

[via Facts and Fiction]

Let's be clear. The alternative to government cash for GM is not a dreamy Chapter 11 filing, a reorganization that puts dealers and the UAW in their place, ensuring future success.

No, even if GM could get debtor-in-possession financing to keep the lights on (which it can't), Chapter 11 means a collapse of sales and a spiral into a Chapter 7 liquidation.

GM's 100,000 American jobs will die. Health care for a million Americans will be lost or at risk. Hundreds of GM's 1,300 suppliers will die. Their collapse could take down Ford Motor Co. and Chrysler LLC, perhaps even North American transplants. Dealers in every county of America will close.

But that's not all. Here comes the call to action:

The taxpayer needs protection and an upside. GM's top management may need to go. Government-as-shareholder deserves a big voice. Those details can be worked out.

The Detroit 3 CEOs and UAW President Ron Gettelfinger had better tell two critical congressional hearings next week what sacrifices they are prepared to make.

But the stark fact remains: Absent a bailout, GM dies, and with it much of manufacturing in America. Congress needs to do the right thing — now.

What? Buying a t-shirt won't help? [Automotive News, CNBC]

2009 Pickup Truck Comparison: Auto Cross

2009 Pickup Truck Comparison: Braking Challenge Results

2009 Pickup Truck Comparison: Drag Strip Acceleration Results

2009 Pickup Truck Comparison: Towing Results

The competitors represent some of the best engineering from the minds of both Detroit and Japan, entrants this year include the 2009 Chevy Silverado 1500, the 2009 Dodge Ram 1500, the 2009 Ford F-150, GMC Sierra 1500, 2009 Nissan Titan, and the 2008 Toyota Tundra. Competition has driven the capabilities of trucks forward in such a way that this modern crop will do more than their forebears could even conceive. However, this relentless march of capability has left us at a point where numbers no longer relate to real world usability and as such the competitors have begun to differentiate. The Ram with its new focus on ride and handling, the Titan is a bit more athletic, the F-150 is the heavy hauler, which leaves the GM twins as the remaining set of do-alls in a crowd of specialists.

Crowning A Champion>

We're going to come right out and say reviewing trucks is, in a way, a bit silly. Trucks, and specifically the half-ton truck segment, are frequented by some of the most loyal product buyers in the world. Magazines and websites opining passionately on the newest offerings don't really matter for these buyers. Reviews speak primarily in this segment to first-time truck buyers, and these days those are few and far between.

But, that being said, we must crown a winner. If we go by the numbers, it's the 2009 Ford F-150 that emerges as the winner when balancing capabilities against performance, finishing at or near the top in every category. But the absolutes of the statistics leaves out the subjective feel of these trucks and ignores that people buy them for different reasons.

But, saying the Ford is the best of the bunch is simply unfair. Is it the most well-rounded? Yes. But what about the most fun to drive? Certainly not. Is it the best styled? That's up to you. Does it have the best interior? Nope. So why is it the best? It just does everything well. The F-150 is, for lack of a better term, the working man's truck. The new F-series offers the greatest capabilities and the best long-term value resting on top of a long history of accolades. It really is a great pickup, but that's not to say it's everybody's cup of tea.

Then there's the Nissan Titan, which objectively scores in last place among the competition. If we were to build a truck for the person who occasionally needed the capabilities of a truck, wanted something incredibly entertaining on the street, offered reasonable fuel economy and a no-nonsense interior. We'd be hard pressed to build something more fitting than the Titan. Think Nissan Altima in truck form.

That's not to say that nobody wants a monstrously big pickup able to out-tow almost everything, rides like an old Cadillac and has an interior you can live with if you don't look too closely at the details. That would be a slot perfect for the Tundra. A truck so good at doing its job you actually overlook it as trying too hard and delivering where it almost doesn't count anymore.

And what of the Silverado and GMC Sierra? They run down the same assembly line, but have vastly different characters. The Silverado finishes a close second to the the F-150 by the numbers and, depending on what you're looking for, could be a better truck. The GMC feels better but somehow doesn't reflect so in the scoring. In fact, when pressed to make an overall choice, we'd be in a pickle to choose the Titan or the Sierra, the two "losers" in the field. Goes to show how much personal preference plays into the decision.

Anyway, if there's one thing we learned over our two day pickupgasm, it's this — there's a truck out there for everyone who wants one. Unfortunately, there's just not that many people who want them right now.

Chrysler and GM’s decisions to respectively kill and delay the ultimate poser’s cars, convertible muscle cars were made for the same reason: money. The unibody Challenger is, unbelievably, not originally engineered to lose its top. So engineering a model capable of retaining its rigidity is, due to the financiapocalypse, now considered wayyy to expensive. Speaking to Motor Trend, a company insider described the Challenger convertible as, “dead as a doornail.”

Bankruptcy-imminent GM simply can’t afford to roll out its 2010 Chevy Camaro convertible, even though plans for it were built in from the beginning. It’ll need to wait until the company either secures a massive loan, gets bought by the Chinese or sees significant profits from other products that have already been postponed before it can afford to put the Camaro convertible into production.

All this leaves the 2010 Ford Mustang sitting pretty. In addition to the convertible, they’ll show glass roof and coupe versions in LA, all of which go on sale next year. [via MotorTrend]

Hot on the heels of yesterday's e-mail plea to employees from GM's Troy Clarke comes the following e-mail from GM's Mark LaNeve. The General's marketing maven e-mailed dealers asking for them to make calls to their members of Congress asking them to "Save GM" from the grips of the Financiapocalypse. Hey, we just noticed, how come neither GM exec is asking for GM fanboys to buy a t-shirt? How can they "Save GM" without a t-shirt? Hmm...at least buy a button.

Well, OK, someone over at the RenCen's urging co-workers to do more than buy a silly "Save GM" t-shirt.

Hat tip to Wired on a copy of the e-mail!

Saab Celebrates 25 years of Convertibles with Special Edition

DETROIT – The first ever Saab Convertible made its world debut at the Frankfurt auto show in the fall of 1983. Now, 25 years later, a Special Edition makes its American debut at the Los Angeles International auto show which opens to the public on November 22. This new version of the Saab 9-3 Convertible will be showcased in a unique bright champagne metallic color.

Saab surprised the automotive world when it pioneered the concept of a ‘four season, four-seat’ soft top Convertible. Designed to be practical and stylish, the Scandinavian-styled convertible changed the perception of open top vehicles to be used all the year round.

“Saab has sold more than a quarter of a million convertibles worldwide and this latest edition highlights the timeless design and responsible performance that Saab convertibles have always represented,” said Steve Shannon, executive director, marketing and product, Saab Automobile USA.

The special edition Saab Convertible will be available in three metallic colors to include Jet Black, Carbon Grey and the new Bright Champagne. It will feature Saab’s signature 2.0-liter, 210 hp four cylinder engine and can be matched to six-speed manual or five-speed automatic transmissions.

Special content includes influences from the Turbo X performance model, such as the design of the front bumper and steering wheel plus carbon fiber interior finishes and black floor mats with grey binding. Like the Aero version, the rear shows dual exhaust pipes and an anthracite grey bumper insert. Five-spoke, 17-inch alloy wheels will be standard.

Expected to arrive in dealer showrooms in January 2009, the Saab 9-3 2.0T Special Edition Convertible will be priced starting at $ 46,725 including destination charges.

Saab is a division of General Motors Corp. Saab Automobile USA is the importer and/or distributor of the Saab 9-3, 9-5 and 9-7X for Saab Automobile AB, Sweden. For the 2009 model year, Saab offers 7 different models that deliver 27 mpg or better according to EPA Highway fuel economy standards. In addition to 4 years/50,000 miles bumper-to-bumper warranty, including roadside assistance and courtesy transportation, every new Saab comes with 3 years/36,000 miles no-charge scheduled maintenance plus standard Onstar and XM Satellite radio. Visit www.saabusa.com for more information.

[Source: Saab]

According to the NY Times, the President would consider signing a stimulus package and help out the auto industry if Obama dropped his opposition to a free-trade agreement with Colombia. Maybe.

Mr. Bush indicated at the meeting that he might support some aid and a broader economic stimulus package if Mr. Obama and Congressional Democrats dropped their opposition to a free-trade agreement with Colombia, a measure for which Mr. Bush has long fought, people familiar with the discussion said.

The Bush administration, which has presided over a major intervention in the financial industry, has balked at allowing the automakers to tap into the $700 billion bailout fund, despite warnings last week that General Motors might not survive the year.

Conflicting reports have emerged, something that happens when you have two press corps — one following the President-current and one following the President-elect — but MSNBC is reporting that Bush has been friendlier to an automaker bailout. More information as we get it.

[Source: MSNBC]

It's about time the Secret Service stepped up their game seeing as the current limo had a little bit of a break-down in Rome. Though Obama may want a million plug-in hybrids on the road by 2015, the likelihood is this über-heavy Caddy probably downs more fuel than a dozen Prius hybrids combined. What? Did you expect him to drive around in a K-Car? Drive slow, homey.

[Photo: EMMANUEL DUNAND/AFP/Getty Images, Source: Boston Globe]

That's good news for Detroit given today's bad...err... awful... news. Although after Wagoner's remarks earlier, we're hoping there will be an industry to save after he's inaugurated. Full remarks from Detroit's personal Jesus below:

The news coming out of the auto industry this week reminds us of the hardship it faces – hardship that goes far beyond individual auto companies to the countless suppliers, small businesses and communities throughout our nation who depend on a vibrant American auto industry. The auto industry is the backbone of American manufacturing and a critical part of our attempt to reduce our dependence on foreign oil. I would like to see the Administration do everything they can to accelerate the retooling assistance that Congress has already enacted. In addition, I have made it a high priority for my transition team to work on additional policy options to help the auto industry adjust, weather the financial crisis, and succeed in producing fuel-efficient cars here in the United States. I have asked my team to explore what we can do under current law and whether additional legislation will be needed for this purpose.

Preach it.

There's nothing like power of denial. Though asked the question a couple different ways, Wagoner wouldn't take the bait, only saying "We've said this before: we have no plans whatsoever than to continue to run the business... you can't sell cars under that circumstance." Yes, as opposed to all of those cars you're selling now. Either way, the bottom line from GM continues to be that either a magical fairy fixes the economy quickly, or someone bails them out.

[Source: CNBC]

First of all, Ford has around $30 billion in both liquid assets and a credit line the company secured just in case the global economy turned south (that seems prescient). That means the "should they go bankrupt" conversation is much further away. Additionally, Mulally claims the third-quarter cash loss was higher than usual because Ford cut production of the F-150 in advance of the 2009 Ford F-150. As hard as it is to believe, Mulally said that "this goes back to our fundamental plan." Ford's plan to realign earlier seems to have put them in a better position. Of course, they still want/need the money to help cover pension liabilities and the development of more fuel efficient cars.

[Source: CNBC]

GM Announces $5 billion in Additional Liquidity Enhancement Initiatives

DETROIT – General Motors Corp. (NYSE: GM) today announced it is taking further actions to improve liquidity and reduce structural cost in response to deteriorating global economic conditions, tight credit market conditions and a rapid retraction of sales in the auto industry.

“Volatility in the world’s financial markets, tightening of consumer and business credit and historically-low consumer confidence has created a very challenging environment ,” said Rick Wagoner, GM chairman and chief executive officer. “Given the current lack of credit availability we must take further difficult ‘self-help’ actions .”

Over the past several years, GM has been taking major actions to restructure its business and position it for long-term growth, making dramatic reductions in structural cost, revitalizing its product portfolio with award-winning vehicles, growing aggressively in emerging markets around the world and making demonstrable strides in advanced technology leadership (link to release).

As part of its ongoing restructuring, on July 15, 2008 GM outlined a number of initiatives aimed at improving liquidity by an estimated $15 billion through 2009. Those initiatives included internal operating actions within the company’s control that are estimated at $10 billion, asset sales estimated at $2-4 billion and capital market activities targeted at $2-3 billion (link to release).

To date, the $10 billion in internal operating actions have either been completed or are on track for full execution by the end of 2009.

GM’s assets currently being assessed for potential sale include the Hummer vehicle business and brand and its ACDelco all-makes aftermarket parts business, which has distribution channels in more than 100 countries. GM is also evaluating strategic options for its technical and manufacturing center in Strasbourg, France. GM is also analyzing other potential asset sales.

Despite the seizing up of the credit markets, GM completed some capital market transactions (link to release) in September to improve the company’s liquidity by $500 million by year-end 2009. While GM has unencumbered assets of more than $20 billion that it could potentially use as collateral for a secured debt offering, the U.S. credit markets remain inaccessible, and the contagion effect on other financial markets around the world provides limited alternatives. Accordingly, t he timing of the $2-3 billion of capital market financing GM initially targeted remains uncertain.

In light of the further deterioration in the U.S. auto market and continued turmoil in the global financial markets, GM is making downward revisions to its liquidity planning assumptions. For planning purposes, GM is assuming U.S. light industry sales volumes of 11.7 million units in 2009, and 12.7 million units in 2010. GM is also revising its average oil price estimates to range between $60-80 per barrel in 2009, and $100-$120 per barrel in 2010.

In addition to its previously announced liquidity and capacity actions, GM is taking further actions to improve liquidity by an incremental $5 billion by the end of 2009.

GM is reducing its capital spending for the calendar year 2009 from approximately $7.2 billion to $4.8 billion. The reductions will be achieved by retiming select vehicle programs in North America and Europe by three to 12 months, and deferring capacity expansion projects. Every automaker is having to adjust portfolios and spending plans to some degree, due to the rapidly changing business conditions and increasing challenging regulatory requirements. Lengthening product lifecycles is a common response to these pressures.

Although the timing of several vehicle programs will be revised, key product and technology programs remain on track. GM has a robust pipeline of competitive new vehicles over the next two years. In GM’s largest markets, U.S., China and Europe, 22 new vehicles will be launched in 2009, and 19 in 2010. In the U.S. alone, GM will launch 15 new vehicles through year-end 2010, 14 of which will be fuel-efficient cars or crossovers, including the Cadillac CTS wagon and SRX crossover, Chevrolet Camaro Coupe and Equinox crossover in 2009, and Saab 9-4x crossover, Chevrolet Cruze small car in 2010. Spending levels for the extended range electric Chevrolet Volt and other fuel-economy improvement initiatives to meet increasingly aggressive global fuel economy standards have been increased.

GM is also taking steps to reduce structural cost by an additional $1.5 billion. Actions being employed to achieve the savings include further reductions in sales promotion spending, further reductions in support of dealer network activities and channel consolidations, and further revisions to production scheduling reflective of depressed industry conditions. In response to declining demand, GM will re-rate operations at a number of operations in North America to scale back production, beginning in the first quarter of 2009.

GM also expects to make further reductions in engineering expense due to the aforementioned delays in capital spending. In addition, various types of discretionary spending, such as travel, use of consulting resources, and non-scheduled overtime for hourly and salaried employees, will also be restricted.

A number of working capital improvements, totaling approximately $500 million, are also being taken, including additional inventory reductions, with an emphasis on further cuts in components, buffer stocks and finished goods.

Measures are also being taken to further reduce salaried employment costs in the U.S. and Canada. The cost reduction target has been increased to approximately 30 percent, up from approximately 20 percent as announced on July 15. The reductions will be achieved with further contract and salaried headcount reductions by the recent over-achievement of the salaried window retirement goal, mutual separation programs, and if necessary, involuntary separations. Employment cash cost savings will also be achieved in Western Europe in 2009 as part of its necessary, broad-based labor cost reduction initiatives.

Salaried employees will not receive enhanced variable pay (incentive compensation) in 2009 for the 2008 performance period. GM had previously announced there would be no discretionary cash bonuses for 2008 for the company’s executive employees.

In addition, GM suspended the company match for the stock savings (401k) plan in the U.S., effective November 1, 2008, and matching contributions for tuition assistance and other reimbursement programs are being suspended effective January 1, 2009.

Even if GM implements the planned operating actions that are substantially within its control, GM's estimated liquidity during the remainder of 2008 will approach the minimum amount necessary to operate its business. Looking into the first two quarters of 2009, even with its planned actions, the company's estimated liquidity will fall significantly short of that amount unless economic and automotive industry conditions significantly improve, it receives substantial proceeds from asset sales, takes more aggressive working capital initiatives, gains access to capital markets and other private sources of funding, receives government funding under one or more current or future programs, or some combination of the foregoing. The success of GM's plans necessarily depends on other factors, including global economic conditions and the level of automotive sales, particularly in the United States and Western Europe.

Further detail on the additional liquidity actions and GM’s current liquidity position and outlook will be disclosed in a Form 8-K filing with the Securities and Exchange (SEC) later today.

GM has taken a host of aggressive “self help” actions to improve its business, but additional support from the U.S. government to aid the auto industry during this industry downturn is essential. The company has engaged in discussions with various U.S. federal government agencies and Congressional leaders about the important role that the domestic automotive industry plays in the U.S. economy, and the need for immediate government funding support given the economic and credit crisis and its impact on the industry, including consumers, dealers, suppliers and manufacturers. Many in the government have acknowledged the important role of the industry in the national economy and the discussions are ongoing; and at this point, their outcome cannot be predicated with certainty.

“These tough actions, though very difficult to make, demonstrate our commitment and determination to weather this economic downturn and emerge a stronger and more competitive company,” said Wagoner. “We remain focused on retaining our focus on product excellence and our commitment to advanced propulsion technology leadership and returning the business to profitability despite the current market conditions.”

Finally, GM has recently explored the possibility of a strategic acquisition that it believed would generate significant cost reduction synergies and substantially strengthen GM’s financial position in the medium and long term, while being neutral or modestly positive to cash flow even in the near term. While the acquisition could potentially have provided significant benefits, the company has concluded that it is more important at the present time to focus on its immediate liquidity challenges and, accordingly, considerations of such a transaction as a near-term priority have been set aside.

[Source: GM]

Why is the cash burn rate so important? GM isn't exactly cash rich and needs to have at least $10 billion to operate and currently has around $15.8 billion on hand. This means that if the current trend continues the company will be unable to operate in approximately three months, meaning that they'll have to declare bankruptcy as we previously outlined. GM itself basically admits this themselves saying:

"Even if GM implements the planned operating actions that are substantially within its control, GM's estimated liquidity during the remainder of 2008 will approach the minimum amount necessary to operate its business. Looking into the first two quarters of 2009, even with its planned actions, the company's estimated liquidity will fall significantly short of that amount unless economic and automotive industry conditions significantly improve, it receives substantial proceeds from asset sales, takes more aggressive working capital initiatives, gains access to capital markets and other private sources of funding, receives government funding under one or more current or future programs, or some combination of the foregoing."

To summarize: give us some money or we're going to go bankrupt and the economy will have to grapple with the horror of hundreds of thousands of unemployed workers. Announcement from General Motors below.

GM Reports Third Quarter Financial Results

DETROIT –General Motors (NYSE: GM) today announced its financial results for the third quarter of 2008, reflecting rapidly deteriorating market conditions in the U.S., slowdowns in other mature markets around the world, and continued losses at GMAC Financial Services (GMAC).

During the third quarter the turmoil in the global credit markets resulted in the worst financial crisis in more than 70 years. The upheaval has had a dramatic impact on the auto business in particular, especially in the U.S. and Western Europe.

Tight credit, rising unemployment, declining income, falling stock markets, and continuing deterioration in the housing market in the U.S., resulted in an abrupt halt in consumer spending, with most consumers exiting the vehicle market. Many of those still intending to purchase vehicles were denied financing, or found the cost of financing prohibitive.

“The third quarter was especially challenging for the auto industry. Consumer spending, which represents close to 70 percent of the U.S. economy, fell dramatically, and the abrupt closure of credit markets created a downward spiral in vehicle sales,” said Rick Wagoner, Chairman and Chief Executive Officer. “The U.S. government’s actions to help stabilize the credit markets and eventually ease the credit crunch are an essential first step to the economy’s and the auto industry’s recovery, but further strong action is required.”

GM reported a net loss of $2.5 billion or $4.45 per share for the third quarter, including special items. That compares with a net loss from continuing operations of $42.5 billion or $75.12 per share in the third quarter of 2007, which included a non-cash charge of $38.3 billion to establish a valuation allowance against some of the company’s net deferred tax assets.

On an adjusted basis, GM posted a net loss of $4.2 billion or $7.35 per share, compared with a net loss from continuing operations of $1.6 billion or $2.86 per share in the same period last year.

Revenue for the third quarter was $37.9 billion, down from $43.7 billion in the year-ago quarter, reflecting dramatic sales declines across the industry driven by unstable market conditions, instability in the credit markets and dramatic retraction in consumer demand, especially in North America and Europe.

GM recorded net favorable charges of $1.7 billion for special items in the third quarter. Included in the charges was a curtailment gain of $4.9 billion resulting from the UAW Settlement Agreement becoming effective. The curtailment represents the accelerated recognition of net prior service credits, largely relating to the 2005 GM UAW healthcare agreement, scheduled for amortization after January 1, 2010.

The curtailment was recorded because GM's UAW retiree health plan will not exist after January 1, 2010, and therefore no further basis for deferring unamortized prior service credits exists beyond that date. The $4.9 billion curtailment gain was partially offset by a non-cash $1.7 billion settlement charge related to the elimination of post-65 salaried retiree healthcare coverage, including the cost of increased pension benefits that were announced in July as part of GM’s operating actions to improve liquidity as well as the recognition of accumulated deferred losses related to the healthcare plan.

In addition, GM reported charges of $652 million relating to its commitments as part of Delphi’s bankruptcy proceedings, $251 million for impairment of investments in GMAC, and $641 million in restructuring-related and other charges. Details on these and all other special items are in the financial highlights section of this release.

GM Automotive Operations

GM reports its automotive operations and regional results on an earnings-before-tax basis, with taxes reported on a total corporate basis.

GM recorded an adjusted automotive loss of $2.8 billion ($947 million reported loss) in the third quarter 2008. The loss compares with adjusted automotive earnings from continuing operations of $98 million in the third quarter of 2007 (reported net loss of $1.6 billion).

The results reflect losses in GM North America (GMNA) driven largely by the U.S. industry volume decline of nearly 20 percent, and shifts in product mix. In addition, Europe saw rapid auto market contraction, leading to sharply lower GM Europe (GME) sales volume in the third quarter. GM Asia Pacific (GMAP) results were down due to commodity hedging charges and moderating demand in key markets including China, Australia and India. These losses were partially offset by very strong results in the GM Latin America, Africa and Middle East (GMLAAM) region.

GM’s automotive results in the third quarter include $1.5 billion of expenses related to mark-to-market changes in the value of GM’s commodity and foreign exchange hedging contracts, due almost entirely to falling commodity prices.

GM sold 2.1 million vehicles worldwide in the third quarter, down 11 percent year over year. Sales in GMNA were down 19 percent compared to third quarter 2007. GM global market share was 13 percent, down 0.7 percentage points compared with the third quarter of 2007, due largely to weakness in North America and Western Europe.

Cash and Liquidity

Cash, marketable securities, and readily-available assets of the Voluntary Employees’ Beneficiary Association (VEBA) trust totaled $16.2 billion on September 30, 2008, down from $21.0 billion on June 30, 2008.

The change in liquidity reflects negative adjusted operating cash flow of $6.9 billion in the third quarter 2008, driven by the industry-wide slowdown in vehicle demand and compounding credit crisis, especially in North America and Europe. During the quarter, GM drew the remaining $3.5 billion of its secured revolving credit facility and made $1.2 billion in payments to Delphi as required by agreements between the companies as part of Delphi’s bankruptcy proceedings.

GM expects adjusted operating cash flow in the fourth quarter to be much improved versus the third quarter, and more consistent with the first half of the year. Improvements in fourth quarter cash flow are largely driven by anticipated improvements in working capital in North America relating to sales allowances, and lower fourth quarter finished vehicle inventory in Europe.

Improving its liquidity position remains a top priority for the company. In response to deteriorating market conditions, GM announced today that in addition to the $15 billion in liquidity initiatives it outlined in July 2008, it has identified $5 billion of incremental liquidity actions. Cumulatively, GM has announced actions aimed at improving liquidity by $20 billion through 2009. To date, $10 billion in internal operating actions have either already been completed or are on track for full execution by the end of 2009.

Even if GM implements the planned operating actions that are substantially within its control, GM's estimated liquidity during the remainder of 2008 will approach the minimum amount necessary to operate its business. Looking into the first two quarters of 2009, even with its planned actions, the company's estimated liquidity will fall significantly short of that amount unless economic and automotive industry conditions significantly improve, it receives substantial proceeds from asset sales, takes more aggressive working capital initiatives, gains access to capital markets and other private sources of funding, receives government funding under one or more current or future programs, or some combination of the foregoing. The success of GM's plans necessarily depends on other factors, including global economic conditions and the level of automotive sales, particularly in the United States and Western Europe.

[Source: GM]

Possible Important Changes

• In order to save money, GM will now stop offering Heinz Fancy Ketchup packets in employee lunchrooms; workers will now be forced to share jars of Hunts
• GM plans on putting its company jet up for sale on eBay
• Tiger Woods as new CEO
• Joining the Pontiac G8 ST will be the Pontiac G5 ST, G3 Wave ST and Buick LaCrosse ST
• They're going to stop making cars
• GM will be merging with Ford Chrysler Tesla Motors!

[Source: Detroit News]

GM PERFORMANCE PARTS SET TO UNLEASH THE SUPERCHARGED LS9 CRATE ENGINE

LAS VEGAS - The LS9 6.2L supercharged V-8 is the power behind the most powerful and fastest production car in GM's history - the 2009 Corvette ZR1. In the third quarter of 2009, it will be available as a complete crate engine package from GM Performance Parts. It delivers a stunning 638 horsepower (476 kW) and 604 lb.-ft. of torque (819 Nm).

The LS9 crate engine will be the ideal all-in package for enthusiasts and racers who want the ultimate LS power plant for their project cars, from resto-modified vintage Corvettes, muscle cars and street rods to late model F-bodies and "shoebox" Chevys. The supercharger and charge cooler are integrated in the engine's valley for a lower profile, allowing creative builders to fit the engine in a variety of applications with plenty of hood clearance.

The engine's 6.2L displacement is shared with the LS3, but the LS9 is built for high-revving power with a supercharger. It uses stronger cylinder head castings and steel cylinder liners that are honed with a deck plate installed to maximize performance and cylinder sealing.

High-rpm-validated lightweight reciprocating parts, including titanium intake valves, are used, along with high-flow cylinder heads that draw the charge forced on them by a sixth-generation supercharger. A new, four-lobe rotor design delivers greater power at the low end and sustains it longer through the rpm band for broad, on-demand power, whether off-idle or at speed. A dual-brick charge cooler is integrated on a unique manifold system that mounts the "blower" in the engine's valley, with charge cooler on top.

GMPP's LS9 crate engine assembly comes fully dressed, including the ignition system, supercharger assembly, exhaust manifolds and more. It also includes the production dry-sump oil pan and provisions for the charge cooler's liquid cooling system. Builders will need an external oil tank, external coolant tank (for the charge cooler) and an ECU/wire harness.

[GM Performance Parts]

Some say he has a tattoo of a Saleen S7 on his rear end. Others tell us he was born with a penchant for oil rather than his mum's milk. All we know is he's called the Auto Insider and he's always ready to provide the scoop from the other side of Eight Mile.

A reader over at Politco sent Ben Smith this photo of a Chevy Cavalier done up in full Obama livery. In what may be the ultimate sign of how much the electoral map has shifted, this shot was taken in Parkersburg, West Virginia. On the other hand, it may just be a sign of how disposable old Cavaliers are. [Politico]