Here's the lead to a news story: "General Motors said on Monday that its finances had improved to the point that..." It was profitable? No, finances have improved to the point that it lost $1.15 billion in the third quarter.

Wonderful!

Money has disappeared. There is no money. Nobody has money. We are all completely without money. But now thanks to PayPal technology, your "digital wallet" "lives in a cloud."

Good!

As long as most economists have lived, Mexicans have come to America to do the shitty jobs that Americans don't want so they can send money back home. Now, the employment situation in America is so atrocious that impoverished rural Mexicans are selling off their livestock in order to raise money to send to their relatives here in America, so they don't starve to death.

Invisible Hand!

In Moscow, the homeless are mastering economics and nutrition all at once: "Three homeless men ate parts of a 25-year-old man they had butchered and sold other bits of the corpse to a kebab restaurant."

Entrepreneurial!

Looks like everything's fine.

The top 25 executives at each of those companies—as well as GM and Chrysler's financing arms—will have their cash salaries cut by an average of 90% under the guidelines, and total executive compensation will have to decline by an average of 50%. At AIG, according to the New York Times, no top executive will make more than $200,000.

Of course, the companies will still be free to compensate their executives with (worthless) stock, as long as they are restricted from cashing it in immediately.

This is all very exciting. The prospect of AIG executives getting by on just four times the nation's median household income is, well...satisfying. On the other hand, these people always find ways to enrich themselves, and we have a feeling they'll continue to do so. The firms subject to the rules are the recipients of the most dramatic bailout actions—run-of-the-mill TARP recipients are exempt.

We wonder, since Citigroup is under the restrictions, whether they'll find a way to claw back the $126 million that Robert Rubin skimmed off the company during his eight years there.

The really funny thing about the rules is that AIG is bound by them, because it was the recipient of a $173 billion bailout, which was necessary because if AIG collapsed, then all the firms it owed money to would collapse. So we bailed out AIG so that it could then pay out $50 billion to two dozen companies whose stupid bets AIG had insured, and those companies are prepping massive 2009 bonuses—Goldman Sachs got that $13 billion pass-through bailout, for instance—while AIG execs are getting a lousy $200 grand. The world sure is funny, sometimes.

[Photo via Flickr by Joshua Davis.]

Perhaps you thought you could live way the hell up in Nowheresville McFrozenTown, ME, and be safe from the worries of the outside world? Sorry, Charlie. You are just a fresh, promising, "emerging market" for sellers of heroin, one of the world's last marketable goods (others: tampons, snack cakes, matches).

Perhaps you would like to get a driver's license, or conduct some official state busines in California today? Sorry, Charlie. Government offices are closed today, in order to pay workers less. Go out and enjoy life, why don't you? Oh. Because you don't have a driver's license. Too bad.

Perhaps you are a sex offender in Miami? Your parole officer would like you to live under a bridge. Seriously.

Perhaps you would like to be a family living in a house, in America. Good luck!

Perhaps you thought you could just leave a big old pile of road salt sitting in a storage depot in Washtenaw County, Michigan? Two hundred tons or so? Without round-the-clock armed guards. You foolish, foolish person. It is all gone. "Those responsible must have needed at least a dozen dump trucks or loads to haul away the salt."

That's a good omen for GM.

Although the salient details are slim as of now, here's what we know from today's press release announcing the "New GM", aka the "General Motors Company.":

"We're also working on new ways to make car buying more convenient for our customers, including an innovative new partnership with eBay in California to revolutionize how people buy vehicles online," Henderson said. "Customers will be able to bid on actual vehicles just like they do in an eBay auction, including the option of choosing a predetermined 'buy it now' price. We'll be testing this and other ideas with our dealers over the next few weeks, and hope to expand and build upon them in the coming months. In all cases, our goal is to make the shopping and buying process as easy as possible for GM customers - on their time and their terms. Stay tuned."

We're told by GM CEO Fritz Henderson that it's "just an experiment." But they are "really excited about it."

So no idea yet as to whether it'd be for all vehicles, whether it would be for just a select few vehicles. The biggest hurdle such an idea faces is the dealer network. More than likely the line in the press release of "testing this and other ideas with our dealers over the next few weeks" indicates it'll more than likely be the dealers who'll be providing these services as opposed to direct-from-manufacturer sales. Either way, as long as the consumer experience is eBay-like, it won't matter to them as they'll perceive it to be direct-from-manufacturer — which is often how they perceive the experience now.

Because the "competitive advantage" gained by driving a "hard bargain" with the UAW would've definitely helped with those 300,000 unsold cars that "depressed" Mickey so much, a few days before, and slashing benefits and wages would not have just prolonged the "drawn-out, flailing, tortuous demise" of "the Detroit dinosaurs."

Fucking over workers is always the magical key to economic success, people.

We thought GM was still massively profitable when it closed down those Flint plants and you made a movie about trying to make Roger Smith feel bad, Michael! We didn't realize you were predicting the end of the light truck boom!

But his rescue proposal involves bullet trains so we are actually behind him 100%. BULLET TRAINS!

The Gubmint

Maybe an energy policy that for years consisted entirely of "keep gas prices as low as possible" directly encouraged overproduction of the huge cars that no one wants anymore because oil will no longer be so ridiculously cheap ever again.

And maybe the young liberal technocrats in charge of things now don't care about the industrial midwest and don't understand the importance of preserving American manufacturing jobs, which is why they'll give the banks a blank check and let them fight even the most basic of new regulatory legislation while demanding crippling concessions from the automakers in exchange for a fraction of the cash.

Also now they will seize all the automakers because they are Kenyan Communists.

The Foreigners

"George Washington would roll over in his grave and call it treason for letting foreigners come in here and take away what we had built," a longtime autoworker says in The New Yorker's April story on the death of Detroit. And it's true! The Japanese waltzed in here offering better, more fuel-efficient cars during the oil crisis in the '70s, manufactured in non-union plants down in the lawless South, and next thing you know no one wants a Firebird anymore.

And these foreigners also won the affection of all these southern Republican lawmakers, who refused to help Detroit because Nissan owned their districts. It's un-American.

The Hippies

Wah wah we want an electric car the hippies all said. And so California made Detroit build an electric car. But it was expensive, and real Americans, who only buy cars based on how loud, big, and cheap they are (gas is still so cheap whee!), didn't want anything to do with the EV1.

Now G.M. is sinking billions into the Chevy Volt, an all-electric car that will cost twice as much as a Prius, and still be a Chevy, so no one will want it.

The Elitists

The only people left in America with any money are various liberal New York Times-reading coastal elitists. And guess what? They don't buy American! If they don't take trains, they buy Toyotas and Hondas. Because American cars aren't hip enough for them.

The Jews?

In addiction to controlling the New World Order, the Jews caused the first oil crisis with that whole Yom Kippur War thing.

The Arabs?

They still have allllll the oil (besides all the oil we haven't yet drilled for, in Alaska, because of hippies), and they won't just give it to us for free! What jerks!

The Unions

Ok, so, G.M. spends more than $1,000 per car manufactured on the entirely useless and stupid act of "providing health care to current and retired workers." And the stubborn unions that crippled the industry refuse to negotiate in good faith, demanding crazy things like "equitable sacrifices from bondholders" in exchange for the various concessions they've made, like accepting half their pension funds in Ford stock and introducing a two-tiered wage plan for new hires!

And yes, workers won the right to get paid even when they weren't working, so that the robots wouldn't steal their jobs, and they could retire after thirty years and hold on to very nice health plans and pensions. All in all it was a lot like France or something.

It could be argued that these out-of-control labor costs pale in seriousness to the various ridiculous missteps and idiotic business decisions management made over the last 30 years but only if you are a communist.

Once again those foreign-owned plants did it right. Their non-unionized workers contribute to the cost of their own health care, encouraging many of them to not get sick so much, and instead of fancy guaranteed pensions they all have 401(k)s, which encourages them to work even harder, because now those 401(k)s are worth zero dollars.

Gremlins

This seems like the most likely explanation.

What's the problem with GM declaring bankruptcy, besides the solidifying of our hollow fears that America's empire is crumbling? It's that we don't even have enough bankruptcy lawyers to make it happen. Not enough bankruptcy lawyers! We'll be forced to outsource our own demise! At last, this is the final indignity of the recession, is it not?

No, of course not. There will be many more. That good old American refusal to accept defeat is now coming back to bite us right on our defeated asses. For example: Luxury hotels like the Four Seasons (okay it's Canadian, JUST AN EXAMPLE) refuse to cut back on amenities or lower room rates, because "doing so may hurt the brand's image." And there's this: "To add insult to injury, in the current climate no business traveler wants to put the name of a high-end resort on an expense report." Now, one might say: Lower the rates and then business travelers won't have to worry about staying there so much, problem solved!

Just goes to show you don't understand the science of branding, you cheap whore. The Four Seasons isn't afraid to go bankrupt to protect its bankrupt brand image—there are no lawyers to do the bankruptcy, anyhow, remember? And screw customers—they're all just trying to use something once and return it, anyhow. When the nuclear winter of this recession has passed, brands will be the last remnants of our once-mighty culture. Brands. And Pringles, which are made from the toughest substances known to man.
[Pic via]

For starters, Letterman gave a mea culpa and introduction to Lutz, calling him one of the "true greats in automotive design, marketing, sales and management...he's the man responsible for the Viper...a wonderful car. He's here with the Chevy Volt...and with any luck I'll get one of these babies for free."

Next, after the break, Letterman talked a little about the EV1 and how it's not from the planet Saturn. Then he wondered if building electric cars would have kept some dealers open. If it had, then damn, that's just one more reason to keep the internal combustion engine in our minds.

Then, after a Stephen Colbert interview, Dave made a bad pun about an electric car from Saturn running rings around...yeah...it was a bad joke. But, then "Maximum" Bob Lutz came out — looking quite dapper in his standard "old man business casual" threads.

Lutz started by walking Letterman through his C.V., then moved on to talking about marine aviation and owning two jets — probably not the best way to be seen as a company making cars for average A.I.G.-hatin' Americans.

Now we get into the meat n' potatoes of the interview. Letterman starts by asking whether there's light at the end of the tunnel for the American automakers. Lutz responds by saying that yes, they'll be restructuring and come out the end of the tunnel "leaner and lighter."

Letterman doesn't powder-puff it per se, but he's not exactly hard-hitting. First asking what people losing auto jobs should be expecting, allowing Lutz to throw down with "jobs returning in time." Still, he's able to pivot into asking Lutz about whether this was Detroit mis-management that got us here. Lutz responds by claiming there's more at play and lots of blame to go around — gas prices being a big part of it, but also that U.S. automakers built some bad cars from the 60s, 70s and into the 80s. He finishes his answer by saying the best way to combat that perception is by building better automobiles. We couldn't agree more.

Lutz addresses the issue of CAFE first by talking about building the type of vehicles Americans want to buy and how that's a shifting target thanks to fuel prices and American desire for buying the biggest vehicle they can for the cheapest price. Next, he responds with a hell of a good analogy that we've clipped and have over on the left. Something about how fat people won't get skinny just because you mandate clothing makers only making skinny clothes. Cue the commercial break.

And we're back with Letterman asking whether the EV1 would have kept the company in business. Lutz responds by saying "Sadly, no." He details the cost per vehicle was probably well over $100,000 per vehicle — and that it was a money-losing proposition.

Now let's get to the crux of the debate — Musk's Tesla versus the Chevy Volt. Lutz talks about batteries, price and practicality are the reasons for why it's a better fit for the American public. He even gives pricing details saying it'll cost $40,000, minus a $7,300 tax credit. Let's watch that now — plus the Chevy commercial at the break to see why Letterman's throwing softballs in his old age.

Back from the break and Lutz showing off the Volt and stating it meets regulations for all countries of any kind. And then my DVR crapped out on me. Let's rate the performance on a five star scale with five being the best.

Bob Lutz staying on message: ****
He's got to lose one star for the whole "I own two jets" thing in the beginning, but overall, a helluva job for a 77 1/2 years-old white Swiss-born man who works for GM. No "global warming is a crock" quotes for us to have fun with.

Dave Letterman's balls: *
Where did they go? Did he lose them in surgery a while back? Seriously — even if he was woefully ill-informed in his questions, we'd expect him to at least ask them, right?

I'm no "expert" on economics, but isn't all those billions we gave to GM a little bit like trying to fill up a bucket with a big hole in the bottom? Today the company said its cash reserves are "dwindling." As in "we are just burning that shit, in huge piles." GM's cash stockpiles are disappearing at the rate of $113 million per day. Well I'm sure it's worth it, whatever they're doing with it!

Better that GM have it, than, say, the increasing number of residents of our nation's capital who line up at a church every day to get free food, so they do not starve to death. They would just eat it right up!

Idea for our government: instead of giving billions to money-losing corporations, why not invest that money in something that will appreciate in value, like antiques? There are literally dozens of antiques lying around the White House at this very moment. The rich are still bidding up the prices of fancy old furniture, on the theory that hey, at least you can sit on it if all else fails.

And who can blame them? It's either antiques, or medieval torture devices. And GM is determined to get those tongue-removal pincers at any cost.

EXAMPLE: You thought the great American Chrysler brand would be going bankrupt? Fucking forget about it! They have a deal in place that may avert bankruptcy.

So there!

EXAMPLE: GM has a turnaround plan. Once upon a time they had hundreds of thousands of workers, now they're going to cut their workforce down to 10% of its all time high. Slim and trim baby! Fighting shape! Let's sell some automobiles, shall we?

EXAMPLE: Don't believe the USA muscle car is soon to controlling the fucking road once again? How do you explain this headline, hot shot? "Honda Swings to Quarterly Loss."

Loss. Loss of power. Loss of prestige. Loss of the lead which has been retaken, by America.

Win: What American cars are doing. Case fucking closed. Let's ride.

"Pensions" were this crazy system in which employers contributed money to an employee's retirement account, and when the employee retired, he would have this money, to live on, based on how many years he had worked and how much he made.

Well at some point (the '80s) someone decided it would be much smarter to a) make employees pay for their own retirement and b) to make them put all their money in the stock market. That was a great idea, for like 20 years! Now, hah, no one in America gets to retire anymore.

But on the plus side, there will never be a cure for cancer. (Hey, this will be a fun multi-part New York Times series, right? Richard Nixon declared war on drugs, and cancer, and now there is just as much of both of those things. What a prick.)

The company's market capitalization is flirting with $1 billion. And yet the stock is perplexingly, up 1.7 percent today to $1.73 — a nonsensical result that's best explained by the random noise of Wall Street. Traders flitting in and out of the stock, trading on the volatility of its shares, are the only ones still holding GM — save for some true-believer retirees who still can't grasp the idea that their erstwhile employer might go under.

The last hope for those former assembly-line workers and any other dead-ender GM owners is a debt-for-equity swap. That's a scenario in which GM CEO Fritz Henderson, a finance man recently installed at Barack Obama's behest, cajoles bondholders to swap their bonds for new shares. The new shares will dilute existing shareholders — but a fraction of something is worth more than all of nothing. (A bankruptcy could theoretically leave crumbs for the shareholders after creditors are paid off, but that seems mathematically impossible, given GM's debt.)

The fact that someone, somewhere, thinks GM is worth even $1 billion shows how uncomfortable we remain with the capitalist ideal of creative destruction. No one wants unemployment ranks to swell, or dealerships shuttered, or factories silenced. But there must be some accounting for all the years that GM flooded the markets with sports-utility vehicles on zero-percent financing, and refused to pare back its unwieldy cost structure. The unions, too, must pay a price, for their insistence on retirement benefits which were never properly funded — a compromise which doomed both their members and their employers.

Sure, the government is backing General Motors — if that backing means anything, given the administration's apparent comfort with a bankruptcy filing. If General Motors doesn't have $1 billion to pay its debts, it's surely not worth $1 billion. The sooner everyone can face the reality — that GM is absolutely worthless — the sooner we can drive on to our next destination.

(Chart via Yahoo Finance)

Musk, responding to a question posed by Lyle Dennis at GM-Volt on his feelings about the range-extender concept behind the Chevy Volt and why he's not considered it it any Tesla products, says:

We looked closely at a range extender architecture for Model S. It ends up costing about the same in vehicle unit cost, a lot more in R&D and a lot more in servicing. Also, although performance is ok when both battery and engine are active at the same time, it turns really bad when the battery runs out and an undersized engine is carrying all the dead weight of the pack. Essentially, a REV is neither fish nor fowl and ends up being worse (in our opinion) than either a gasoline or pure electric vehicle.

That'd be perfect, make it clear you looked at the idea for the Tesla Model S Sedan and dismissed it after a simple cost-vs-return analysis, then pivot into a positive statement about your product. Musk, who's not yet figured out the best way to go after the competition is by talking flowers, sunshine and honey publicly, saving the knife-and-dagger treatment for his PR team during after-party drinks with the press later on, should have just left it there. He didn't.

An important consideration that people without a technical background don't understand is that you can either have a high power or a high energy cell chemistry, but not both. Since the battery pack in a plug in hybrid like the Volt has to generate the same *power* as a much larger battery pack in a pure electric vehicle, it has to use a low energy cell chemistry.

So, is he saying GM's Volt engineering team lack a technical background or is he saying potential customers lack a technical background? Unknown. Either way, he probably should have left it with just the "REV doesn't make sense" comment. Lesson learned? [GM-Volt]

Also no longer on the sponsorship payroll are great American hopes like golfer Tiger Woods and all those noble heroes who work in movies—GM will no longer funnel money, like Jane Fonda to the Vietcong, to the Academy Awards. Those two entities, though, can probably bounce back with their remaining kajillions intact. Burns, on the other hand, relied pretty heavily on GM's 35% stake in each of his films (like The Civl War and Jazz), and benefited in goodwill and prestige from the educational outreach the automotive manufacturer coordinated for each premiere.

A GM spokesperson keeps their reasoning short and simple:

We've been proud to be associated with Ken's work over the years, as he is certainly the 'gold standard' of documentary filmmaking. But the company's financial crisis has forced GM to rein in such spending.

Were this a Burns film (which generally air on PBS), this would be the point where the camera pans across the spokesperson's letter or email or whatever, while Joan Allen reads it aloud. The folksy music would swell or dip, and we'd get a great, choked-up feeling in our chests.

Much the same feeling Rick Wagoner gets when he looks at his bonus checks. As read to him, at great expense, by Joan Allen.

[via Gallery of Graphic Design]

1. "As of now, the three executives — Rick Wagoner of General Motors, Alan R. Mulally of Ford Motor and Robert L. Nardelli of Chrysler — are not planning to join the carpool."

2. "Initially, organizers intended to assemble a convoy of numerous fuel-efficient, American-made vehicles to demonstrate the innovation coming from Detroit, but it might end up being more about the people involved than the products. 'From an efficiency standpoint, getting a bus or two would probably be the best way to go.'"

3. "The group is planning a quick trip, perhaps leaving Dec. 7 and heading back late the next day, with no stops for rallies or demonstrations."

Two buses, full of auto dealers, on an 18-hour round trip from Detroit to Washington, with no public rallies. But they did get the New York Times to cover it, so hey. [NYT]

• They're buying cheaper "wipe-up towels" to "lower GM's 'cost per wipe.'"
• They've stopped replacing batteries in their wall clocks, and updating them for daylight savings time
• They didn't even hold press conferences at the latest auto show.
• Cheaper pencils!
• No more voice mail: "Recordings that used to say, 'please leave a message,' now say 'please call back.'"

This company full of not-on-time workers who are too busy dealing with ripped, low-quality paper towels and broken pencils to call back reporters who missed the press conference only to find that they can't leave a message for anyone is on the road to recovery! [WSJ, Ad Age; pic via]

They did have five company planes. Now they're cutting down to just three. Tightening the belt!

General Motors, the embattled US carmaker, buffeted by criticism for sending its chief executive on a private jet to plead for government aid, vowed today to stop leasing two of its five company planes.

GM is "very sensitive" to "the symbolic issue of people showing up in Washington in corporate jets", spokesman Tom Wilkinson said, promising more cuts to come at the company.

Now you know that spokesman was probably desperately searching Craigslist job ads at the time of this quote and didn't give it much thought, so cut him some slack. Because let's face it, GM is going broke broke. [Guardian via Clusterstock]