Whereas the recently closed Bill Heard Chevrolet in Houston was the typical sketchy dealership owned by an out-of-towner, the locally-founded Lawrence Marshall had a much better reputation for customer service and philanthropy. First opened as a small lot by Lawrence Marshall in the 1960s, the small dealership grew into a massive complex.

Anyone who lives in southeast Texas is familiar with the commercials featuring former Houston Oilers defensive lineman and company CEO, Ray Childress, offering to "clobber big city prices" during nearly every commercial break. Lately, some people have noticed Childress was less-than-enthusiastic during recent commercials. The spirited "clobber" was gone.

With approximately 240 employees and a large business disappearing overnight, we've got a bad feeling about what this means for the local economy. The commercial to the left is of the sadder Childress, a shadow of the man he once was.

[via Houston Chronicle]

The Swedish government passed a $3.4 billion (28 billion kronor) support package including credit guarantees and rescue loans for Volvo, Saab and the rest of Sweden's not-so-huge automotive industry. This came mere hours after the US approved their own "bankruptcy lite" aid package (would we call this "bailout lite"?), just passed by whatever body it is that passes such things in Sweden, consists of a maximum of 20 billion kronor in credit guarantees to automotive companies and up to 5 billion kronor in rescue loans to bail out companies in crisis.

The government said Thursday it also will earmark 3 billion kronor in R&D monies in the automotive sector — we're assuming that's like their version of the R&D fund passed by Congress what seems like eons ago. Carmakers Volvo and Saab have been appealing to the government for support because of the financial woes of their US owners, Ford and GM. [via Detroit News]

Photo Credit: Worth1000

Take a look at the stakeholders in the $15 billion bridge loan legislation for the Detroit automakers and you'll see why there's no clear message coming from anyone on the not-a-bailout; the automakers no longer have clout in D.C., the House Democrats seem fixated on making the not-so-Big Three into "Big Green," House Republicans are busy offering an alternative non-"ass-backwards" plan in the House that would have the Feds provide insurance which would cover up to 50% of losses of new investment in case of a default or bankruptcy. Senate Republicans, led by Sen. Shelby (R-Foreign Autobama) on the other hand are just eager to find a way to kill the UAW with some cockamamie scheme similar to House Republicans.

We guess given every other stakeholder's got both hands tied behind their backs (mostly of their own doing) or is completely without a clue when it comes to economics (Sens. Shelby and Ensign, we're looking at you), we shouldn't be surprised it was the lame duck White House that would actually craft a realistic message on the proposed bill. In the span of one press conference, White House Deputy Chief of Staff for Policy Joel Kaplan changed the message of the bill being a bridge loan for the not-so-Big Three to make it to the waiting hands of the Obama administration into what it should have been all along — "bankruptcy lite."

What this "bankruptcy lite" bill would provide the short-term financing the Detroit automakers need to give them an opportunity to do what we've said they need to do, take a few months to work with all the parties — UAW, dealers, suppliers, etc. — and get a realistic cost structure put in place before March 31st, 2009. At that time the "car czar" appointed by the President would either accept the plan presented by GM and Chrysler, come up with his own plan, or say "screw you two" to both and call back the collateral put down for the loan.

The plan makes sense to us, and it probably makes sense to the American people.

Photo Credit: CHRIS KLEPONIS / AFP

In the ongoing struggle over the auto industry bailout there has been endless debate on Capitol Hill and around the country. But for the Brewer family it has become a personal affair - pitting father against son. For more than three decades Tom Brewer has worked for General Motors and is currently at one of their plants in Tennessee. His son Jake is the Internet Director for the Green Energy Coalition and on his blog he expressed his reservations about the bailout in an open letter to his father. BBC World News America presents a first person account in which Jake and Tom share their views on this issue which has sparked a family feud.

BBC World News America airs at 7:00 p.m. ET/PT on BBC America

Here's what the AP's reporting this morning on details from over the weekend:

"The plan would draw the emergency aid from an existing loan program meant to help the automakers build fuel-efficient vehicles. The size of the package hasn't been finalized, but it is expected to be about $15 billion, several congressional aides said.

It would create a board composed of Cabinet secretaries from the departments of Treasury, Energy, Labor, Commerce and Transportation plus the Environmental Protection Agency administrator to oversee a broad auto industry restructuring. A congressional aide outlined the emerging measure on condition of anonymity because it is not yet completed."

All we know is Bob "The Builder" Nardelli's been praying since Friday night. We guess we may find out today if his prayers were answered.[via AP]

Photo Credit: Chip Somodevilla / Getty Images News

...stop friggin' nodding! I know you're excited RIck said something smart, but fercrissakes some of us are trying to listen to what he actually had to say and it's really distracting. . Thank you and carry on.

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Ford: Escape Hybrid SUV

Ford CEO Alan Mulally started this trend by first claiming that he'd drive to D.C and, not surprisingly, showed up in a 2009 Ford Escape Hybrid. It shows to Congress and the world how Ford, which is in a better financial position than the other two, is making fuel efficient cars people want to buy and already has good hybrid technology. Ford also showed up with a 2009 Ford Flex to, we assume, move staff around.

Chrysler: Aspen Hybrid SUV

Chrysler's Bob Nardelli also drove to Washington, D.C. in a hybrid SUV: the 2009 Chrysler Aspen Hybrid. How does the Aspen Hybrid stack up against the Escape Hybrid? It gets worse gas mileage, it uses mediocre hybrid technology developed in conjunction with GM and is built into a car that's proven to be wildly unpopular.

But don't worry, they've already cancelled it — just four months after starting production. This not only demonstrates the company is unable to build attractive, efficient vehicles. It's another reminder parent company Cerberus is just waiting for Chrysler to get sold off to someone else.

He showed up to the hearing in a JEEP EV, a futuristic electric vehicle that will be a great halo vehicle for whichever company ends up owning Jeep.

General Motors: Chevrolet Volt Mule/Malibu Hybrid

General Motors' man at the helm Rick Wagoner drove to Washington, D.C. in a 2009 Chevy Malibu Hybrid but drove to the Senate hearing in a 2011 Chevy Volt test mule. There was also a Chevy Suburban and Cadillac CTS in the area, perhaps to shuttle executives around when not in front of the camera.

The fact that GM brought two different hybrid vehicles down shows the company is willing to work hard for the money, so hard for the money. The Volt prototype clearly demonstrates they're on the path to creating a mass production hybrid vehicle. The Malibu just shows they're not dumb enough to drive around Washington, D.C. in something unreliable.

The Entourage

Special thanks to STR8SIX for getting these live shots togther. His report below.

I made a short trip into downtown DC this afternoon. I was only able to spend about a half an hour snooping around the senate buildings. I found the Ford Flex and Escape hybrid from the Ford convoy. I also found an Aspen hybrid. Each of the vehicles had a driver sitting in it with the engine running. Unfortunately, I was unable to locate the Chevy Volt mule. One of the security officers said that GM was giving test drives in the Volt and did not know if it would reappear this afternoon. A dark red Cadillac CTS with the engine running was parked in front of the Ford vehicles. That may have been Wagoner's ride back to the hotel.

[Additional Photos From Win McNamee/Getty Images, Ford, Chrysler GM]

Photo Credit: Chip Somodevilla / Getty Images News

We kind of hope the Chrysler Aspen hybrid carrying Bob "The Builder" Nardelli made it. Ford CEO Alan Mulally may have accidentally gone to the Senate Armed Services Committee, so someone should check up on him.

But, according to Wagoner, there's one overwhelming reason why America needs to save their automakers:

"It's very important for the U.S. to have a home team in the global auto industry..."

Photo Credit: Win McNamee / Getty Images News

The biggest factor into how well a cash loan will work with the automakers will be the number of total auto sales in the United States. If an automaker makes the right projections they should be able to figure out how much money they'll need to get them through this downturn. So how did they each do in their projections? Let's take a look and grade them. Here are the sale projections from the three automakers:

Photo Credit: Christopher Furlong / Getty Images News

As recently as September, Chrysler said they had seven-to-nine new models for 2010. For the life of us, we can't figure out what those vehicles are considering the company's stopped development on every single product line. Are they talking about the Chrysler EV electric car family? Because seriously, that's smoke and mirrors. There's nothing new coming out of this company at any time in the next year.

But hey, Chrysler CEO Bob Nardelli also pledged to take a $1 salary and no kind of health or insurance benefits until the crisis is resolved. Well, he's earned it.

Because once you get past the huge $11 billion number and the fact that they're apparently going to be forced out of business in January without it, when you take a look at the automaker's plan, there isn't much in the way of specifics there. On the whole, the plan is less substantial than what GM or Ford are offering. I mean, although we may not agree with the sale projections they make, at least the other automakers are making a guess as to what sales numbers in the United States will look like for the next year. All Chrysler was willing to say was "Chrysler anticipates sales to be even lower than normal due to the economic downturn." What, did Chrysler can its market analysts already?

It's almost as if they're saying "buy us some time until someone else buys us." Actually, I think they may have said that on page three somewhere. Anyway, full highlights from Chrysler below.

Highlights of Chrysler LLC Plan Submitted Today to the Senate Committee on Banking, Housing and Urban Affairs and the House Committee on Financial Services

* Chairman and CEO Robert Nardelli looks forward to testifying before the committees later this week
* Chrysler will urge the immediate adoption of legislation that will allow domestic automakers to weather the current national economic crisis and continue to invest in industry-leading products, technologies and vehicles of the future
* Full plan attached as pdf file

* The first question is, what changes has Chrysler made to help itself? Since Chrysler became an independent company in 2007:
o We eliminated over 1.2 million units of capacity, or 30 percent;
o We reduced fixed costs by $2.4 billion and, separated over 32,000 employees – including 5,000 on the Wednesday before Thanksgiving. And at the same time …
o We invested in product improvements – over half a billion dollars in our first 60 days;
o We improved our latest JD Power quality scores, and reduced our warranty claims by 29 percent;
Part of our business model transformation includes alliances and partnerships – for example – the agreements to produce vehicles for VW and for Nissan. As a result, through the first six months of the year, Chrysler met or exceeded our operating plan, ending the first half with $9.4 billion unrestricted cash.

* Why does Chrysler need the funding? We need to address the unprecedented drop in vehicle sales caused by the financial crisis. U.S. sales are down from a 17 million unit selling rate in early 2007, to an estimated 11 million unit selling rate for the fourth quarter of 2008 – a 38 percent decline. We lost 20 percent of our sales virtually overnight when the financial market crisis forced us out of the consumer lease business. With customers not buying … with dealers not ordering … with our plants not producing … Chrysler’s cash inflow has suffered.
* So how will the bridge loan be used? Cash will support ongoing operations as we continue to restructure the business, including in the first quarter alone:
o $8.0 billion in payments to parts suppliers
o $1.2 billion for other vendors
o $900 million in wages
o $500 million in healthcare and legacy costs
o $500 million in capital expenditures

Without an immediate working capital bridge, Chrysler’s liquidity could fall below the level appropriate to ensure operations in the ordinary course by the first quarter of 2009.

* So, who is contributing to saving Chrysler? First and foremost, Chrysler and its extended enterprise will. That starts with me. I receive a salary of $1 a year. I have no employment contract, no change of control agreement, no “golden parachute,” and receive no health care or life insurance benefits from the company. We are committed to negotiate concessions from all of our constituents.
* The next question - Does Chrysler plan to build cars and trucks that consumers want to buy, and that support the country’s energy security and environmental goals? Our product plan features 24 major launches from 2009 through 2012. For the 2009 model year, 73 percent of our products will offer improved fuel economy compared to 2008 models. We plan on launching additional small, fuel-efficient vehicles. ENVI is our breakthrough family of all-electric … and range - extended electric vehicles – similar to the one parked outside. Chrysler’s product plan includes the introduction of the Ram Hybrid and our first electric-drive vehicle in 2010 with three additional models by 2013.
* Does Chrysler have a viable plan? With our requested bridge loan – absolutely! I also believe that further partnership, restructuring and consolidation would make the U.S. auto industry even more viable and competitive in the long run. Further opportunities for technology sharing would provide fuel-efficient cars and trucks more cost effectively and faster to market. The three-company alliance that developed the dual-mode hybrid is a good example. As a Country, we should not trade our current dependence on foreign oil for a future dependence on foreign technologies.
* The final question is, when will Chrysler pay back this loan? We believe we will be well positioned to begin repayment of the federal loans — in 2012. I recognize that this is a significant amount of public money. However, we believe this is the least costly alternative considering the depth of the economic crisis and the options we face.

[Source: Chrysler]

On the surface, the GM plan seems less ambitious than the Ford plan, though that may just be because GM already has an electric car coming down the pipeline. Their request for $12 billion seems relatively low given their cash situation, but there's a nugget hidden in the release where they mention an additional $6 billion if the market manages to tank even further.

The other big news comes under the "Market and Retail Operations" section of the release which states:

In the U.S., GM will focus its product development and marketing efforts on four core brands – Chevrolet, Cadillac, Buick and GMC. Pontiac will be a specialty brand with reduced product offerings within the Buick-Pontiac-GMC channel. Hummer has recently been put under strategic review, which includes the possible sale of the brand, and GM will immediately undertake a global strategic review of the Saab brand. As part of the plan, the company also will accelerate discussions with the Saturn retailers, consistent with their unique relationship, to explore alternatives for the Saturn brand.

From this we understand Pontiac will either be made the performance brand they were supposed to be all along by nixing duplicate vehilces like the G3, G5 and G6 or made into a less fun crappy brand by axing the G8, G8 ST and Solstice. As for the part about Saturn, we'd be worried if we owned a Saturn dealership right now.

Additionally, GM supports making more green vehilces and a government oversight board that would allow them to restructure (read "deal with union contracts") in a more efficient way. Full release below.

GM Submits Plan for Long-Term Viability to the U.S. Congress

WASHINGTON – General Motors Corp. today submitted a plan to use Federal bridge loans to create a leaner, more competitive company, one that is profitable and self-sustaining for the long term.

The plan, submitted in response to Congressional hearings in November, includes a detailed blueprint for a successful, sustainable General Motors. Building on a product renaissance and comprehensive restructuring that has been under way for several years, the plan calls for:

* Increased production of fuel-efficient vehicles and energy-saving technologies;
* Rationalization of brands, models and retail outlets;
* Reduced wage and benefit costs, including further reductions in executive compensation;
* Significant capital structure restructuring;
* Further consolidation in manufacturing operations.

GM is requesting term loans of up to $12 billion to provide adequate liquidity levels through December 31, 2009. GM anticipates an initial draw of $4 billion in December 2008. In addition to the bridge loans, the company is requesting a $6 billion line of credit to provide liquidity should a severe market downturn persist. GM’s intent is to begin to repay the loans as soon as 2011.

Any draws would be conditioned on achieving specific restructuring requirements in the plan. To help expedite these actions and protect the taxpayers, GM is also seeking the creation of a Federal oversight board to oversee the loans and restructuring plan.

GM is requesting the bridge loans and credit line because of a sharp industry-wide decline in vehicle sales. This decline, due in large part to tight credit and record-low consumer confidence, has led to a corresponding drop in dealer orders that is adversely impacting GM’s first-quarter production schedules, revenue forecasts, and liquidity outlook. Federal assistance would enable GM to weather a credit crisis that has driven U.S. industry sales to their lowest per-capita level in half a century, and help the company emerge fully competitive with all manufacturers operating in the U.S.

The complete GM plan is available online . Following are highlights from the plan.

Product Portfolio and Fuel Efficiency – GM has made significant progress in revamping its product lineup, with new GM cars like the Chevy Malibu, Cadillac CTS, Saturn Aura and Opel/Vauxhall Insignia earning car of the year awards.While remaining a full-line manufacturer, GM will substantially change its product mix over the next four years, and launch predominately high mileage, energy-efficient cars and crossovers.

In addition, the Chevy Volt, which can travel up to 40 miles on electricity alone, is scheduled for production in 2010, and GM is planning other vehicles using Volt’s extended-range electric drivetrain. By 2012, more than half of GM vehicles will be flex-fuel capable, and the company will offer 15 hybrid models. GM will continue development of hydrogen fuel cell technology, which, when commercially deployed, will reduce automotive emissions to just water vapor.

During the 2009-12 plan window, GM will invest approximately $2.9 billion in alternative fuels and advanced propulsion technologies, which offer fuel economy improvements ranging from 12 percent to 120 percent, compared with conventional gas engines. As a result, we expect GM to become a significant creator of green jobs in the United States, as well helping suppliers and dealers transform the U.S. economy.

Market and Retail Operations – In the U.S., GM will focus its product development and marketing efforts on four core brands – Chevrolet, Cadillac, Buick and GMC. Pontiac will be a specialty brand with reduced product offerings within the Buick-Pontiac-GMC channel. Hummer has recently been put under strategic review, which includes the possible sale of the brand, and GM will immediately undertake a global strategic review of the Saab brand. As part of the plan, the company also will accelerate discussions with the Saturn retailers, consistent with their unique relationship, to explore alternatives for the Saturn brand.

Manufacturing and Structural Costs – GM will accelerate its current efforts to reduce manufacturing and structural costs, building on significant progress made over the past several years. GM currently has the most productive assembly plants in 11 of the 20 product segments measured by the Harbour Report, and it is a global leader in workplace safety. With the recently negotiated wage rates, turnover expected in our workforce, planned assembly plant consolidations, further productivity improvements in the plan, and additional changes to be negotiated, GM's wages and benefits for both current workers and new hires will be fully competitive with Toyota by 2012.

Balance Sheet Restructuring – Under the plan, GM would significantly reduce the debt currently carried on its balance sheet. GM plans to engage current lenders, bond holders and its unions to negotiate the needed changes. GM’s plan would preserve the status of existing trade creditors and honor all outstanding warranty obligations to both dealers and consumers, in the U.S. and globally.

Compensation and Dividends – The plan calls for shared sacrifice, including further reduction in the number of executives and total compensation paid to senior leadership. For example, the chairman and CEO will reduce his salary to $1 per year. The plan also requires further changes in existing labor agreements, including job security provisions, paid time-off, and post-retirement health-care obligations. The common stock dividend will remain suspended during the life of the loans.

Temporary Federal Bridge Loans – GM is seeking a term bridge loan facility from the Federal government of $12 billion to cover operating requirements under a baseline forecast of 12 million U.S. industry vehicle sales for 2009. In addition, GM is seeking a revolving credit facility of $6 billion that could be drawn should severe industry conditions continue, resulting in sales of 10.5 million total vehicles in 2009. This bridge loan is expected to be fully repaid by 2012 under the baseline industry assumptions. Also, warrants issued as part of the loans would allow taxpayers to benefit from growth in the company’s share price that might result from successful completion of the plan.

Once GM has completed the restructuring actions laid out in the plan, the company will be able to operate profitably at industry volumes between 12.5 and 13 million vehicles. This is substantially below the 17 million industry levels averaged over the last nine years, so it is considered to be a reasonably conservative assumption for gauging liquidity needs.

Federal Oversight Board – Given the importance and urgency of this restructuring for GM, other domestic manufacturers and the U.S. economy as a whole, the company supports the formation of a Federal oversight board. The board would help facilitate restructuring negotiations with a range of stakeholders.

GM’s Commitment to Success

General Motors and its management are committed to the success of the plan summarized in the Congressional submission. The company’s responsibility to its customers, shareholders, employees, retirees, dealers and suppliers is well recognized, as is its century-long commitment to our nation.

GM has never failed to meet a Congressional mandate in the important areas of fuel efficiency and vehicle emissions. We are among the leaders today in fuel efficiency, and set the industry standard for green manufacturing methods. We are committed to meeting the new fuel economy requirements of the 2007 Energy Independence and Security Act. The company’s role in creating green technology and high-paying jobs of the future will increase substantially as a result of implementing the plan.

GM is proud of its century of contributions to the growth of our nation, and the company looks forward to making an equally meaningful contribution over the next century.

[Source: GM]

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]

...you spot a Rolls-Royce Phantom Coupe in front of you in the McDonald's drive-through. Also, the driver's ordering from the value meal menu. Oh, and it's not Britney Spears behind the wheel. And no, they didn't "super size" it.

[TopSpeed]

We're not sure, though up until recently we've heard that Angus Mackenzie, Editor-in-Chief of Motor Trend, has proclaimed that the magazine is awash in cash, allowing him to spend money on more writers and more features. Perhaps with the reduction in operating expenses Motor Trend will have some money to spend on their website.

It doesn't look like the Democrats, with their current majority in the 110th Congress, actually have the votes. Our source in Congress tells us that they're still trying to get a good sense for where they are which is why they're starting in the Senate first. The leadership is afraid of risking a house failure and causing a market crash a la the $700 bill bailout.

The final piece of the puzzle came yesterday when Detroit-favorite Rep. John Dingell was defeated for the chairmanship of the Energy and Commerce Committee by Environmentalist-favorite Rep. Henry Waxman of California. This is a clear sign that the next Congress wants to take a more environmental tack.

This leaves Congress in a position where they likely don't have the vote to push through a bailout now and, given the behavior of the CEOs, it won't look good to do it right away. Congress will also need some cover after the $700 billion rush-job. On the other hand, most representatives have auto-related jobs in their states and they don't want to see GM fail. Given the liberal bent the next Congress seems to be taking, there seems to be pressure on conservative "blue dog" Dems to get it done before the next Congress starts up next year.

There will be a couple of chances for the Senate to take this up before the break and the not-so-Big Three have an opportunity to come up with a great plan that emphasis cutting costs, corporate reorganization and a better product mix. Or they can come up with a bad plan and see if Congress will swallow it anyways. Either way, we'll likely know before winter break.

[Time, San Jose Mercury News, Photo Mark Wilson/Getty Images]

1.) Both carry a bunch of signs at all their get-togethers. UAW workers, picket signs. Congressmen, re-election signs.
2.) Both have exorbitant pensions and will receive health care for life upon retirement.
3.) Both have work stoppages for months at a time during summer, winter and around all federal holidays.
4.) Both take credit for creating the middle class.
5.) Both have a historical reputation for shoddy quality of work product.
6.) Both like pork. One likes it in "rind" form, the other in "spending" form.
7.) Both live well beyond their means. UAW workers with boats on Lake Superior. Congress gets junkets and fact-finding trips to the Cayman Islands.
8.) Both are paid the same regardless of how much work they do.
9.) Both have a national approval rating of under 10%.
10.) Both are seemingly out-classed by their foreign counterparts.
11.) Both get to take election day off.

See, there you have it, they're like ebony and ivory — and really, they've got to figure out a way to live together in perfect harmony.