Auto sales, auto bailouts, auto financing – nothing is at is seems

Researching the murky world of auto bailouts requires a few ground rules at the outset. Recipients of bailouts like to think of a bailout as a grant or giveaway program. In other words, any type of loan is not a bailout since the recipient was obligated to pay it back. On the other hand, absent a rescue loan, those same recipients claim that liquidation would be the result. A credit line, or loan, that would stave off liquidation would certainly seem to qualify as bailing someone out, wouldn’t it? With that in mind, we can look at the credit arms of the Big 3 (now the Big 2 since Fiat owns Chrysler).

As I’ll illustrate further along, Ford Motor Credit exercised multiple loan programs during the financial crisis. Ford Motor Co. likes to claim the company took no public bailout money and has leveraged that claim quite successfully in a public relations ad blitz into increased sales and a very visible division between them and their competitors. Ally Financial, formerly GMAC, is a private company and obtaining records is difficult. They have left a trail, however, and you can draw some viable conclusions accordingly.

In both cases, the public perception is strikingly different from reality. The amount of credit utilized, the sources, and the reasons behind it are not at all what you see on the nightly news. Nor what you hear from the rank and file if you live in the heart of the auto industry as I do. Let’s see if we can clear up some misconceptions.

Ford makes the claim that they didn’t receive any public bailout money at all. They did request a $9 billion dollar credit line from the Treasury.

Ford’s Request:
A “stand-by” line of credit in the amount of up to $9 billion
at Government borrowing rates, for a 10 year term, with TARP conditions,
to support our restructuring, including the acceleration of products
that consumers want and value.

Foreign owned Fiat continues to benefit from Chrysler taxpayer bailout

With the introduction of the 2013 Fiat, I mean, Dodge Dart, at the 2012 Detroit Auto Show, Fiat has now upped its ownership stake in Chrysler to 58.5%. This is the first model designed and built under Fiat control. Fiat has plans to continue to increase ownership to at least 70% in the next few years by purchasing shares of a union controlled health-care trust.

No doubt the White House will be quick to point this out as a success of the auto bailouts. Is it? That depends upon your point of view. We used taxpayer dollars to bail out what has become a foreign-owned automaker. Hey, whatever happened to the buy American campaign? Not a peep from the unions who received special treatment when Obama sidestepped existing bankruptcy law and crafted their own designed to repay the unions for his election support in 2008.

So maybe you say, what’s the big deal, didn’t we save American autoworker jobs? Actually no. Bankruptcy is merely an action to protect company investors while reorganizing under the protection of bankruptcy laws. Not an end to the company and all of the jobs as was threatened. Normally it is the bondholders who receive the most protection while stockholders lose out first, but not in our lawless world under the Obama regime.

Normally we would see the unions shouting from the rooftops about preserving American jobs, but not in this case. We effectively did the same thing as a bailout of Honda or Toyota. Yes, it’s American workers building the cars here at home, but the profits are going overseas. That’s always been the argument for GM. So what if a large percentage of the parts are foreign, they’re made here and the profits stay here. Sorry, not with Fiat.

What is interesting is the perspective of Americans on this issue. Corporate profits are the epitome of evil these days, yet using our tax dollars to ensure that a foreign corporation has the ability to make them doesn’t seem to matter. In fact, why is it that we have no problem bailing out a failed corporation, even disregarding the fact that it’s now foreign-owned, yet we despise a successful corporation utilizing a legal tax loophole? I mean, I really don’t get it. Handing out money for failure is OK, but if a company that doesn’t require saving doesn’t pay enough taxes, we somehow square that in our minds as acceptable.

Now, I really do get it. The unions stay silent because they got their reward. The White House is happy because they’re redistributing wealth while solidifying their voter base. And the average American citizen keeps whistling dixie while blissfully ignorant as to what just happened because we got to keep our precious jobs which we would have kept anyway, just under another brand name.

This is yet another example of how our liberty is not being stolen away, rather we are eagerly giving it away. We’ll gladly trade away opportunity for security. Thank the lucky stars that Obama came riding in on his white horse and saved us by saving the automakers. It’s not just the investors that got screwed in the automaker bankruptcies, it’s all of us when we accept the idea that we need government to be involved in the free market process.

Would you feel guilty buying a Volt?

So what do you think? Are you a buyer at $41,000 ($33,500 after rebate)? This is supposed to be the savior, at least for GM. It will be the 2011 Motor Trend car of the year. It will get an unprecedented advertising blitz. It will be subsidized by your fellow taxpayers to the tune of $7,500 per copy. I have to wonder, does that bother you at all if you’re a buyer? We all know how tough times are and the huge problem our debt and spending is causing. You could buy many different cars in the mid $30 grand range, either GM or not, so it’s not a buy American issue . For example, a Cadillac CTS starts at just over $35,000. They won’t put the taxpayers on the hook for your subsidy. I’m talking about someone who is already making a car purchase anyway. Does the feeling of being “green” offset the fact that you are increasing our debt to own this car?

Amazing garages filled with toys!

Jealous?Work harder!

SR-71 Mustang

Check out this smokin’ hot ride. It’s the first time ever that Shelby and Roush have collaborated on a project rather than competing. Via www.musclevehicles.com

Two automotive icons, legendary racer and manufacturer Carroll Shelby, and world-renowned racer, engineer and designer Jack Roush, have come together in their first vehicle collaboration project to join Ford in creating a one-off 2011 Mustang, the aviation-themed SR-71 “Blackbird.” The one-of-a-kind vehicle will be sold at the Gathering of Eagles July 29 during the Experimental Aircraft Association (EAA) 2010 AirVenture Oshkosh, the world’s greatest aviation celebration. Ford is the exclusive automotive partner of EAA AirVenture Oshkosh and all of the proceeds from the sale will benefit the EAA Young Eagles organization. EAA AirVenture Oshkosh will be held from July 26 to Aug. 1 at Wittman Regional Airport in Oshkosh, Wis.

The “SR-71″ designation holds a dual meaning for the one-of-a-kind, fully-customized Mustang. First, “SR-71″ refers to the car’s design and performance-inspired connection with the SR-71 Blackbird, the aircraft that holds all official airspeed and altitude records and is widely regarded as one of the most spectacular planes ever produced. Second, “SR” represents the first collaborative project between Shelby and Roush. Mustang Chief Designer Darrell Behmer led design for the project and Mustang Chief Nameplate Engineer Dave Pericak led the engineering effort. Ford Racing Performance Parts were also added to further enhance the exclusivity of the car. The sale of the SR-71 “Blackbird” will highlight an evening of festivities at the EAA Gathering of Eagles July 29 during AirVenture.

The group that will directly benefit from the auction proceeds is EAA’s Young Eagles, which has provided free introductory flights to more than 1.5 million young people since 1992, while also teaching the value of hard work, personal responsibility and enhanced math and science skills. “Ford Motor Company’s historic tie to aviation is no better represented than by the company’s commitment as a continued partner of EAA and AirVenture, a celebration of flight here in Oshkosh that is unmatched anywhere else in the world,” said Tom Poberezny, EAA chairman and president.

“Ford’s generosity in donating the Mustang SR-71 ‘Blackbird’ to the Gathering of Eagles further demonstrates a dedication to supporting aviation and inspiring aviation enthusiasts of all ages.”

In 2008, Ford’s inaugural vehicle specially-built in support of the Young Eagles, the one-of-a-kind Mustang AV8R, raised a record $500,000 for the charity. “The excitement around the 2008 AV8R, our first one-off Mustang ever produced, inspired us to push for another, first, the collaboration of Carroll Shelby and Jack Roush,” said Edsel B Ford II, a member of Ford’s Board of Directors. “This year’s SR-71 Blackbird is a special tribute to Ford’s lineage of performance vehicles, as well as to the promising innovators of EAA’s Young Eagles.” Ford vehicles sold at auction during past EAA AirVenture events have collectively raised more than $1 million to support the Young Eagles.

The Mustang SR-71 “Blackbird” is Build #1 of 1 and presents a truly unique opportunity for collectors. The vehicle is based on a 2011 Mustang GT 5.0 with the glass roof option. Ford Racing performance modifications (Supercharger, Handling Pack, tuned exhaust, and exhaust tips) generate 100 additional horsepower from the all-aluminum 5.0L 32-valve V8 engine. The special racing Handling Pack optimizes the performance experience and lowers the ride height by 1-inch.

From there, the car takes on a design personality similar to that of the original SR-71 Blackbird aircraft. The Mustang’s stunning design theme includes black and gray matte exterior paint with harmonious SR-71 themed graphic treatment, performance wheels, front and rear fascias and an integrated spoiler/wing to reflect the car’s connection with its namesake aircraft, which made its inaugural flight in 1964, the year the first Ford Mustang came off the line. The “Blackbird” nickname is reflected in the car’s exterior paint treatment, complete with markings from the liquids which leaked and streaked until the plane came up to speed. A unique screen print glass roof design and exterior artwork reflect the unbridled spirit of the Ford Design team.

The interior cockpit will seat only two and includes a roll-cage, racing seats and fire extinguisher, The signatures of Jack Roush and Carroll Shelby are embroidered into the seats, and special gauges and instrument cluster graphics have been added.

Enhancing the value and allure of the vehicle, the Mustang SR-71 “Blackbird” will feature an appliqué autograph area capturing Roush and Shelby’s signatures and badging to further reinforce the uniqueness of the car. The vehicle will be on display at the Ford Hangar at EAA AirVenture Oshkosh beginning July 26.

Bugatti Veyron SS-267mph!

2010 Trans-Am?Only if you ask for it!

’69 BOSS 429 Mustang

 This is a 1969 Ford Boss 429 Mustang.One of only 859 built that year.500 more would be built in 1970 for a total of 1359.If you would like to buy one today,don’t bring your checkbook.Bring your mortgage,your inheritance and your investments as they will bring in excess of $300,000 at auction.Why so much?Because of the legendary hemispherical combustion chamber big block shoe-horned into the drastically re-worked engine bay of the Mustang,that’s why.Modified by Kar-Kraft at its Brighton,MI facility,the Boss 429 was a misunderstood muslecar.It was designed strictly for a NASCAR racetrack.Designed to live all day at 200 mph,it was never meant to be a drag car.You will lose many a race to lesser competition should you attempt to drag race in stock configuration.In fact,one was converted for just that reason.Called the TASCA Mustang drag car,it achieved high 11 second quarter-mile times when the factory restrictions were removed.

      

Ford had to build the minimum number of street legal versions to qualify the motor for use on the NASCAR tracks so they could take on Chrysler and their famous hemi.They did just that with the Boss 429 and in 1969,they completely dominated the circuit with it.Unfortunately,they dropped it after just one year or who knows what they could have achieved with some serious development time.

 Ford lost money on every single one they ever built.They knew this going in as it was just to satisfy NASCAR’s rules.With an undersized carb,a very mild cam and even a smog pump,all of the de-tuning required to pass emissions testing resulted in a 375hp motor capable of an easy 500hp.This is a spectacular package for a tuner to experiment with,however they are now so valuable,that will likely never happen anymore.I would part with a couple of my kids to get my hands on one of these babys.Not saying which ones as I don’t want any hard feelings!

 Here is a YouTube link for a piece on the My Classic Car tv show-