Major automakers don’t sell cars to American consumers; they sell to dealers. And the biggest U.S. dealership chain by a wide margin is Fort Lauderdale, Florida-based AutoNation, which sold over 440,000 new and used vehicles last year.

So when AutoNation CEO Mike Jackson talks, auto executives listen — or so you would think.

In an interview with Reuters, Jackson said Detroit automakers had largely ignored his warnings over the past decade that the U.S. industry was headed for a crisis.

“I think I was usually able to reach an intellectual agreement on where the industry was headed. Where we disagreed was how much time we had to get there. On that, even I was wrong. Time was up,” Jackson said.
 
Jackson thinks GM and Chrysler can be fixed. But he also thinks Washington should let either or both fail if their current turnaround effort backed by $60 billion in taxpayer funds falters.
 
Here are excerpts from the interview and Jackson’s view of where GM, Chrysler, Ford and their rivals stand now in the marketplace:

Q: Are GM and Chrysler capable of change?

A:I think they had a near-death experience. When you really get down to the point where we either get this done or we won’t exist anymore, then it happens. …My sense is that absolutely Sergio (Marchionne) is providing leadership at Chrysler and (Fritz) Henderson at GM. It’s under way, and it’s going to happen.
Q: You’re looking to buy Ford and GM dealerships. Why is that?

A: We always bet on the biggest, broadest brands. Now we’ll take a look if the pricing and the opportunities are right. We love Chevy and we love Ford. Those are the brands that will succeed in the future. Those are the brands that are going to get the majority of the product and marketing dollars from those companies. They’re also the broadest brands. You can sell everything from Chevy from a Corvette to an Aveo. It’s unbelievable how well accepted and how approachable those brands are for the American consumer.

Q: Are you withholding judgment on Chrysler?
 
A: I think Chrysler has the biggest challenge of any of the companies that are out there. It’s been through the biggest turmoil for the longest time. It’s product pipeline is the most disrupted so let’s wait and see. But with Ford you can see that they’re clearly gaining momentum. The product development at GM was not nearly as disrupted as what happened at Chrysler, so they’re in good shape. Chrysler has the most difficulty, so we’ll take a wait-and-see there. Plus they don’t have an anchor volume brand like a Chevy or a Ford. They have a great brand in Jeep. There’s always a place for Jeep in the world. They have a good brand in Dodge but it can’t compare to a Chevy or a Ford. Then you have Chrysler, which is probably a head-scratcher of a brand. It’s a more complicated situation over there.
 
Q: Is the government’s role finished in supporting the U.S. auto sector?

A: The catastrophic economic crisis that hit its peak with the bankruptcy of Lehman Brothers, and I say this as a Republican,  was so massive and catastrophic, the only entity that had the size and scale and skill to step in and save the day was the U.S. government. It needed to do everything or we were looking at the next Great Depression and industries like automotive would have been swept away. So, they did it. You can criticize this and you can criticize that but they saved the day. Now they have to gradually unwind it and you need to look at the lessons learned so that we never again face a systemic collapse of the American economy and free enterprise. We were on the brink of that.
 

Q: But the government’s direct role is finished now?
 
A: I think so. Here’s my view: The economy is going to gradually improve and if one of  these companies — GM or Chrysler — falters, they’re going to let it go. At 10 million (unit sales) facing the Great Depression, we couldn’t handle one of these companies going down and the domino effect it would have on the entire industry. But if two years from now one of these companies is faltering and the economy has recovered and sales rates are up to 12 or 13 million, then they should face the consequences of that.
    
Q: Popular opinion would seem to agree with that.
 
A: Well, I agree from a business point of view. I think Chrysler and GM understand that. They know that this is their one shot and I think that’s understood by the boards and it’s understood by management. That’s why I’m so optimistic that change is going to happen.

(Writing and Reporting by Kevin Krolicki, Detroit Bureau Chief. Reuters photos by Rebecca Cook.)

Magna International seems to be taking seriously threats from Volkswagen to pull its business following the Canadian car parts maker's Opel victory.

Magna's co-CEO Donald Walker is saying that after talking to them, most of his other customers are happy that the car parts group -- which along with Russian backer Sberbank is buying a 55 percent shareholding in GM's Opel -- is able to protect their technologies.

Apparently VW is still unconvinced, so Magna will "finalising the internal procedures" and will have more talks with the German carmaker.

Walker is also stressing that Magna is not looking to compete with its clients but is simply aiming to get a good return on its investment in Opel, reiterating that Magna will remain a parts company.

There seems little doubt that Magna can manage potential conflicts, after all it already builds cars for BMW, Chrysler and Mercedes as well as making parts for Toyota, Ford and VW.

But to say Magna won't be competing with other carmakers once it starts building Opel cars is stretching the point. Why else would you buy Opel if it wasn't to take market share from VW and others?

As of Friday, there was no knowing how much longer funding for the program will last. The Obama administration has reassured car shoppers and dealers that any trade-ins over the weekend will be honored at rebates for up to $4,500. Meanwhile, the U.S. House rushed to triple funding  for the program, adding another $2 billion in a bill that heads to the Senate where it could face tougher scrutiny.

U.S. car sales for July, set to be released on Monday, are expected to show a turbocharged boost from the government program, a sleeper success in a string of policy steps aimed at stabilizing the U.S. auto industry that has included government-sponsored bankruptcies at GM and Chrysler.

Before the rush of clunker trade-ins, analysts had been looking for industry-wide July auto sales to top 10 million units, the highest rate of 2009 and an encouraging sign the market has turned the corner. Investors have discounted some of that recovery. Shares in AutoNation, the No. 1 dealership group, have gained 48 percent since the start of the second quarter. Shares in the No. 2 dealership group, Penske Automotive Group, have more than doubled.

With inventories tight, automakers also stand to gain as production — and revenues — increase in the second half. July sales data will help sort the winners from the losers, but the early anecdotal evidence suggests that the some of the biggest gains have gone to the automakers that were already outperforming.

This week's Thomson Reuters Investment Banking Scorecard shows bankruptcy-related M&A at a five year high.

There were five bankruptcy-related M&A deals announced during the week, including the acquisition of venture-backed public company Nanogen by French investment holding company Financiere Elitech for $25.7 million. 

So far this year there have been 173 bankruptcy-related deals, the highest level since the same period of 2004 when there were 202.

During 2009 the most bankruptcy-related M&A deals have occurred in the industrials sector with 23 percent, followed by the media and entertainment sector with 16 percent. 

In terms of geography, U.S. targets represent 83 deals or 48 percent of the total of bankruptcy M&A.

This is hardly surprising given the speed with which some of the biggest bankruptcies have happened in the U.S. -- with a little help from section 363 easing rapid asset sales at GM and Chrysler.

The rest of the world probably has some catching up to do.

The Chrysler bankruptcy hearing has swamped a Manhattan court with an unprecedented number of pleadings, according to docket tracking service NetDockets.com.

In the first 45 days of Chrysler’s bankruptcy, attorneys filed more than four times the number of pleadings than over the same period for collapsed corporate giants WorldCom or Enron.

More than 4,200 pleadings were filed in the Bankruptcy Court for the Southern District of New York, said NetDockets. That’s more than the 967 pleadings related to Enron in the first six weeks, or even Lehman Brothers Holdings’ 1,362 pleadings.

In the first 16 days after General Motors for bankruptcy, almost 1,800 pleadings were filed.

What does this mean for courts, for attorneys? Does it spur court investment in court clerks or electronic technology? Is it a gold mine for lawyers? A headache for the judge?

Already, a judicial body is urging Congress to authorize new bankruptcy judgeships to cope with a surge in bankruptcy filings that has tracked weakness in the U.S. economy.

After enjoying a bit of confusion from savior Fiat about the imperative of a June 15 deadline, and a quick, 24-hour trip to the Supreme Court, Chrysler creditors now know in no uncertain terms just how much political will there is behind getting the automaker’s government-orchestrated deal done.

The top U.S. court can certainly be counted on to ponderously deliberate matters of vital importance to the nation. But when the consequences of delay are dire (thousands of auto workers’ jobs, a U.S. presidency, etc.), a decision to not make a decision can come with lightning speed.

In a brief two-page order, the justices said opponents of the Fiat-Chrysler deal had not met the burden of showing the Supreme Court needed to intervene. The court’s action was not a decision on the merits of the challenge, they said. The Chrysler dispute marked the first time the Supreme Court had been confronted by legal issues involving the federal government’s power to deal with the economic crisis.

More importantly, it showed that the mechanics working on the reconstruction of the auto industry may have one less headache to worry about as they hammer out problems at General Motors, which is using a similar quick-sale strategy in its bankruptcy in New York.

Reuters will be sending live updates from the Chrysler bankruptcy hearing, on the automaker’s plan to reject 789 dealership franchises, expected soon after 0830 ET. Read the updates below or follow us on Twitter.

Abu Dhabi sells 3.5 billion pounds of shares in Barclays, making a handy profit, and sending the stock down well over 10 percent. In another share sale, wind turbine maker Gamesa is suspended after Iberdrola offloads 10 percent of the company in the market. Otherwise, cars still dominate: GM has filed for bankruptcy, Germany is to pay bridge financing to Opel today and a U.S. judge said overnight the sale of Chrysler will be effective on Friday. Here are today’s top deals headlines.

And in the newspapers:

British publishing group Pearson is in talks with Prisa over the possibility of buying a stake in Santillana, the Spanish media firm’s publishing house and market leader in school textbooks in Latin America, the Financial Times reported.
Prisa could be looking to sell up to 30 percent of the unit in a 315 million pound deal. Other bidders include Cengage Learning, Oxford University Press and Infinitas Learning, the paper says.

Citigroup Inc told about five former top executives they will not be paid tens of millions of dollars in promised severance payouts, the Wall Street Journal cited people familiar with the matter as saying.

France’s Carrefour is close to buying a stake in a unit of India’s Pantaloon Retail, the Business Standard reported.

French carmaker Peugeot declared itself open to any form of alliance amid turmoil in the car industry as long as the Peugeot family maintains a core presence, Peugeot Citroen PSA supervisory board chairman Thierry Peugeot, Les Echos reported.

Opponents seeking to slow down Chrysler’s blitz through bankruptcy court received unexpected support for their argument on Wednesday: Chrysler’s lead attorneys. 
    An email that turned up during discovery showed that Jones Day attorneys tried to discourage the U.S. government from setting a June 15 deadline for completing a sale of most of the automaker’s assets to a group led by Fiat.
    A lawyer for a group of Indiana pension funds, which oppose the sale, read the email in court which showed Jones Day attorneys said the tight schedule would undermine the credibility of their case, called the time frame a mistake and said it would “stuff the judge” by forcing such a rapid hearing schedule.
    “The debtor lost that one,” said the Indiana fund’s attorney, Glenn Kurtz of White and Case, referring to Jones Day recommendation regarding the deadline.
    Judge Arthur Gonzalez overruled Jones Day attorneys who objected to entering the email, which the U.S. Treasury released during discovery, because it was not meant to be public and tapped into Chrysler’s legal strategy.

-By Tom Hals and Emily Chasan

Reuters’ Emily Chasan will be sending live updates from the Indiana pensioners’ challenge to Chrysler’s bankruptcy in U.S. District Court scheduled to begin at 11:30 am on Tuesday. Read her updates on DealZone or follow the DealZone Twitter account.