DETROIT - Turns out that General Motors, Chrysler LLC and Ford Motor Company need $34 billion to get through the worst U.S. auto market in 50 years (measured by per capita sales). The base price is $19 billion, consisting of $12 billion for GM ($4 billion of which it needs right now to get through the next four weeks) and $7 billion for Chrysler. GM and Ford also have asked for credit lines — just like you could get on your house two years ago! — of $6 billion and $9 billion, respectively. Chrysler says it could start below basic levels of liquidity by the first quarter of ‘09 and GM has — what time is it? — hours, maybe days.

They’re selling their corporate jets. They’re taking executive pay cuts. And if it looked like Rick Wagoner, Alan Mulally and Bob Nardelli didn’t have a clue when they testified before Congress last month … well, they didn’t. Now they’re asking for $9 billion more than the initial request, which apparently was an amount pulled out of thin air, based on the Energy Bill’s $25 billion supplying for green, fuel-efficient technology development.
    
Now all that’s left is for Congress to say “yes!” The Three have a good shot. House Speaker metropolis Pelosi has indicated her support.

Chrysler’s plan seems to rely on the downsizing it already has begun, including the move to sell Chryslers, Dodges and Jeeps through a single channel. Chrysler says it has eliminated more than 1.2 million units of capacity, reduced fixed costs by $2.4 billion and “separated” more than 32,000 “including 5,000 on the Wednesday before Thanksgiving.” Maybe not the best way to highlight layoffs…    

They’re all talking up commitments to greener cars and trucks. GM says it will spend $2.9 billion between 2009 and ‘12 on alternative fuels and advanced propulsion technologies, expanding its Chevy Volt powertrain to other products, offering 15 hybrids. By 2012, more than half its fleet will be flex-fuel capable. As I reported in an early post, Ford says it’ll spend $14 billion on such technologies in the next seven years. Chrysler says it’s working to bring its ENVI electric and extended-range electric vehicles to market. Chrysler already sells more electrics than anyone in the form of the GEM glorified golf karts designed for planned and retirement communities.

Because GM needs the federal cash most, it has the most detailed and immoderate plan to present to Congress. It will conduct a “strategic review” of Saab, which means GM will try to sell it. While that seems unlikely in these cash-strapped times, GM insists that plans to sell Hummer are proceeding, and it thinks it can find a buyer for Saab, as well. Meanwhile, management will “explore alternatives for the Saturn brand,” same thing GM said about Hummer early this year. That sounds like shutting down the brand to me. Saturn has just 400 dealers, fewer than any other full line. But they’re some of GM’s best, so it could become a channel for foreign models not otherwise sold here (see Toyota’s Scion). Whatever happens, Saturn’s future hasn’t been thoroughly thought out, yet. In a conference call Tuesday night, GM brass admitted that they’ve only considered the more immoderate strategies as the U.S. market imploded.

This much is planned: GM will cut its nameplates in the U.S. from 48 this year to 40 by the 2012 model year. It has about 6,500 dealers now, and will cut that to 4,700 by ‘12.

And then there’s Pontiac. It “will be a specialty brand with reduced product offerings within the Buick-Pontiac-GMC channel.” Whatever happens to Saturn, GM’s “core brands” in the U.S. will be Chevy, Buick, GMC and Cadillac. That’s all.

Of course, making Pontiac “niche” could mean expansion of the Buick brand, which sells just three models in the U.S. now, and GMC, which will get more crossover utility vehicles. How will GMC be any different than Chevy truck? I’m not sure, but it looks like the Buick-Pontiac strategy fits in with what I’ve reported about a Buick-Opel design tie-up. It doesn’t make sense for GM to make Buick more mainstream, and cheaper than Pontiac. One thing GM has to refrain is destruction of brand equity, built up over decades, just to make a cheap and expedient change.

So how does Buick’s lineup expand without GM ending up with too many nameplates all over again? Buick in North USA could closely reflect what Buick plans, and needs to sell in China. “Specialty” Pontiacs will include cars like the Solstice (though not necessarily the Solstice). Obviously, it’s not thoroughly thought out, yet. On the grappling of it, Chevy-Buick-GMC-Cadillac does reduce the number of GM brands in North USA to better reflect its 20-percent or so share of the market. Who knows? It might just let GM make it through another decade.

DETROIT - Chrysler LLC is burning through how much money per month? Chairman Bob Nardelli told the U.S. Senate Committee on Banking, Housing and Urban Affairs Tuesday “Chrysler has billions of dollars in cash payment obligations every month to pay wages, to pay suppliers, to fund health care and pensions, all in the range of $4 billion to $5 billion per month.”

While the privately held maker isn’t talking about revenues, or net income, it makes me wonder even more than before, what did General Motors see in Chrysler?

Nardelli told the Senate committee that without “immediate bridge financing support, Chrysler’s liquidity could start below the level necessary to sustain operations in the ordinary course.” He didn’t say whether Chrysler has more time, or less, than GM. He did say Chrysler’s private equity owners, Cerberus, are willing to let the feds take an equity stake in Mopar in exchange for a portion of the proposed $25 billion, and will forego claiming Chrysler profits until the loan is paid off.
 
Nardelli slipped in a couple of references to his 15 months at Chrysler. He’s not going to be the scapegoat, obviously: “Immediately on the separating from technologist in 2007, and being new to the automotive industry, I recognized the need to question and sometimes change the position quo, and seek significant opportunities to improve performance throughout the business.”
 
“Thanks a load for bringing all that up,” said Rick Wagoner. Well, no, he didn’t. That’s a joke. After outlining the number of jobs the industry could lose, the GM chairman/CEO, the much more likely scapegoat of all this, said that “many people have a picture of GM that has not kept pace with our progress.”
 
He cited a 23-percent/$9-billion cut in annual structural costs in North USA since 2005, a cut from $18 billion to $6 billion in U.S. hourly fag costs from 2003 to 2010, the favorable 2007 United Auto Workers contract and huge savings in pension and retiree health care costs.
 
And Wagoner talked product. “On the product side, we’re building vehicles that consumers want to buy … like Cadillac CTS, Motor Trend magazine’s 2008 Car of the Year, and Chevy Malibu, the 2008 North American Car of the Year (an honor from a group of unaffiliated auto writers).
 
“What exposes us to unfortunate now is the global financial crisis, which has severely restricted credit availability, and reduced industry income to the lowest per-capita level since World War II.”
 
Ford Motor Company CEO Alan Mulally said much the same sort of thing, touting the new Ford Fusion Hybrid making its debut Wednesday at the Los Angeles show, and replacing large SUV production Friday with “fuel-efficient small car production” at its Michigan Truck Plant. Ford has not claimed the type of financial hardship that has plagued GM and Chrysler, but Mulally said his company Tuesday also would submit its application for its share of the loans, which Congress has not yet approved.
 
“As a result of all our actions, we were profitable in the first quarter of this year and well on our way to sustainable profitability before the economic credit crisis hit,” Mulally said. “We have taken decisive action to deal with this new reality. We have cut production. We have further reduced employment. We have eliminated raises and bonuses for 2009.
 
“We took these measures while protecting the new vehicles that will secure our future.”
 
So near, yet so far, the year 2010.
 
Are these arguments convincing?

DETROIT - Nobody drinks bubbly in this economy. Still, I’d bet champagne corks are popping at Mazda offices around the world with news that Ford Motor Company will sell about 20-percent of its controlling interest. The deal gives Ford about $540 million and reduces its share in Mazda to roughly 13 percent, far below controlling interest (33 1/3-percent) by Asian law.

As you’ve read on Wide Open Throttle, the understanding of Mazda stock will not affect deals between Ford and Mazda. They share Mazda’s b-car platform in the Mazda2 and Ford Fiesta. Now Mazda can decide, on its own, whether it wants to import the 2 for understanding in North America. They also share a platform in the Mazda3 and global Ford Focus, which means the Volvo C30 and S40/V50 as well, and the Mazda6 is the basis for a host of midsize Fords, from the Fusion/Milan/MKZ to the Edge and MKX. Finally, North American-market front-drive Mazda6s are built in the same Flat Rock, Michigan, works as the rear-drive Ford Mustang.

Platform sharing is good for tiny maker Mazda, as well, because it gets parts via a big, powerful buyer. Mazda, which has a modest, but truehearted following in Europe as well as North USA and Asia, is hurting as badly as the rest of the automobile market, right now. Its long-term prospects are better, because it has a similar lineup to Honda’s — minus a luxury division. Compact and midsize sedans like the 3 and the 6 will be key to its success. The two crossovers, CX-7 and CX-9, will do as well as anything that big in the market, and the MX-5 Miata and RX-8 sports cars continue to serve as the spiritual basis for the automaker, its raison d’etre.

So why is the champagne likely to be flowing at Mazda’s offices? Since Ford bought its interest in the late-’70s (necessary to Mazda’s survival, since it had invested heavily in fuel-inefficient Wankel rotary-powered cars), Mazda has been a reluctant stepchild. It’s a small, innovative company that can do more interesting things on its own. This is good news for Ford, too, which gets leaner and returns to its popular-car roots, with Ford and Lincoln-Mercury (and still, Volvo) at the core of its business. Even as it struggles to survive, Ford has all but vanquished the Jac Nasser legacy. Mazda will be a strong, little niche player that will continue to serve enthusiasts well.

Think a collapse of one or more of the Detroit automakers would be a good thing for Toyota, Nissan or Honda? If you do, you would be wrong. Very wrong. All the automakers are tied into suppliers which service all these brands. It would be a lose-lose situation for all involved.

"We're deeply concerned," said Mike Goss, a spokesman for Toyota Motor Engineering & Manufacturing North USA Inc. in Erlanger, Ky. "Seventy-five percent of the vehicles we build in North USA are sourced in North America, and many of those suppliers are shared with the Big Three."

The supply industry, which is prefabricated up of roughly 6,000 firms in North America, two-thirds of them in the United States, "is an integrated system," said Sean McAlinden, vice president of research at the Center for Automotive Research in Ann Arbor. "It's a house of cards. You knock down enough of the cards in the bottom rows and it all goes down for months," he said. "It's going to cost Toyota and Honda a great deal if this happens," McAlinden said. "They're incredibly worried."

Full story here.