As the American Axle (AA) strike stretches into its second week, Automotive News [sub] reports that GM might be considering bailing out yet another troubled supplier. Thus far, GM has claimed the Axle-caused work stoppages gave them an chance to trim bloated truck and SUV inventories. But as the strike begins to stop all of GM's high profit North American truck production, and hobbles hundreds of other suppliers, this shit is getting serious. Negotiations between the United Auto Workers (UAW) and American Axle management are deadlocked. American Axle wants to cut UAW wages in half across the board, from $28/hr to $14/hr. The only viable scenario at this point: the now-standard package of buyouts, buydowns and flowbacks. Once GM has completed buying out enough of its own workers, it could move the holdout American Axle workers to its own payroll, freeing AA management to hire new employees at the now-competitive rate of $14/hr. But isn't the point of GM's buyout program to trim its payroll fat? And hasn't GM already blown its bailout budget on Delphi? Chapter 11 if they do, Chapter 11 quicker if they don't.

[Source : The Truth About Vehicles]

We've heard this somewhere before… but it wasn't Chrysler… Oh, right! Almost two years ago, Renault-Nissan CEPO Carlos Ghosn was making noise about joining/purchasing/dismantling General Motors (at the behest of the Lion of Las Vegas, investor Kirk Kerkorian). GM CEO Rick Wagoner Wagoner circled his Board of Bystanders' wagons and GM was free to tank on its own. As the Motor Authority reports, it's the same story here kids. Anyway, Renault is hoping to make out like a bandit with its 25 percent ownership of longstanding Russian punchline automaker Lada. As Carlos puts it. "Russian car sales might surpass Germany to become Europe's largest single market this year." Also, they might not. Either way, Renault may begin supplying Lada with platforms and drivetrains. Presumably it'll be the same entry level stuff Renault-Nissan is giving Chrysler to sell in South America. Wait, what? Anyone else confused?

[Source : The Truth About Cars]

Last July, Delphi agreed to pay GM $2.7b when it emerged from bankruptcy to resolve "long-standing issues." In November, GM said it would settle for $750m in cash and $1.2b in stock AND it would loan Delphi $750m towards the $6.1b needed to exit bankruptcy. And now… GM's concurred to loan their former division another $2.8b. The Detroit News states the new agreement still transfers Delphi stock to GM (now worth $200m less). And Delphi's cash payment to GM shrinks to $175m. Yes, well, five of the six non-GM investors bankrolling Delphi state they'll walk, unhappy with GM's part of the deal. The lead investor, Appaloosa Management, claims the loans are "contrary to Delphi's stated goal of reducing its reliance on and exposure to GM and developing relationships with other (automakers)." And here's the kicker: Delphi has asked the bankruptcy court to force Appaloosa and its partners to continue supporting the restructuring plan. (How to win friends…) Meanwhile, Delphi is still wrangling over providing collateral for some $2b in unpaid pension obligations. They've only put up $150m so far; the Pension Benefit Guaranty Corp. has filed $600m in liens against Delphi's foreign assets. Legally, the PBGC could seize Delphi's foreign ops to satisfy those obligations. Practically, all Hell would break loose. 

[Source : The Truth About Cars]

Plastech may not have done so well in the plastics molding business lately, but it sure knows how to play the doormat with aplomb. In a touchingly "stand-by-your-man" moment, Plastech General Counsel Kelvin Scott confirmed yesterday that the bankrupt firm would continue supplying Chrysler with parts "indefinitely." This announcement comes despite the fact that the Pentastarred lawyers are currently working on their second attempt to legally extricate the very tooling Plastech uses to produce Chrysler parts. So why is Plastech eliminating the threat of work stoppages at Chrysler plants and thereby losing all of its negotiation leverage? Is it playing nice for Judge Shefferly, who has already staved-off round one of Chrysler's legal predation? Our theory? Plastech knows it's products are of such poor quality that the best way to hurt Chrysler is to keep 'em rolling into their plants. Just kidding. I think.

[Source : The Truth About Cars]

On the same day that GM announced its disastrous February sales figures, GM's Board of Bystanders OK'ed an executive reshuffle. Those of us expecting the Board to clock the prospect of a fourth year of declining sales, profits and U.S. market share, and then defenestrate GM CEO Rick Wagoner (to float away on his golden parachute) were surprised to discover the current CEO remained in situ. Meanwhile, Chief Financial Officer Fritz Henderson assumed the re-created post of Chief Operating Officer. While pundits aplenty saw this as a Henderson succession play, has Fritz already relieved Rick of command? The Wall Street Journal says "Speaking to reporters yesterday at the Geneva auto show, Mr. Wagoner outlined what his role will be in the auto maker's hierarchy, saying that he will focus on global growth, advanced technologies and environmental lobbying… Mr. Wagoner stated he also hopes to at least double his amount of annual visits to China, a fast-growing new market where GM has become well-established. Visiting roughly twice a year in the past 'didn't feel right,' he stated." If you ascribe to Ted Turner's Lead, Follow or Get Out of the Way philosophy, it's clear that Rick's now checking out any time he likes. But will he ever leave?

[Source : The Truth About Automobiles]