Tales from the Trail

No sequel to ‘cash for clunkers’ but…

While the $3 billion “Cash for Clunkers” blockbuster is over, Congress is not finished with Detroit. AUTOS/

No one is talking about a “Return of Clunker” or “Son of Clunker” sequel, but it still looks as if car companies will renew their part in the congressional agenda even as another humongous production — healthcare — threatens to swallow the Capitol whole.

A priority for Democrats everywhere is to push the benefits of economic stimulus and pound the podium on job creation. Thursday, the focus is on the future of manufacturing in the economically hard-hit Midwest — a battleground in any election scenario.

House Majority Leader Steny Hoyer will travel to Michigan to discuss legislation working its way through the chamber that would provide hundreds of millions of dollars to help spur development of advanced technology vehicles – like better hybrids and all-electric cars.

A fellow Democrat who is the driving force behind the bill, Representative Gary Peters, will join Hoyer and auto and supplier execs at a late-afternoon news conference in Troy. Peters’ district includes facilities operated by Chrysler and General Motors — both of which have cut tens of thousands of jobs and are trying to find their way after bankruptcy.

The First Draft: Blank screens

BASEBALL/Millions of Americans could be staring at blank TV screens tomorrow, when broadcasters switch to digital signals.

The U.S. government has spent years preparing for the switch, which aims to free up airwaves for broadband and enhanced emergency communications.

The change-over will only affect those who get their TV over the air, rather than through cable or satellite connections.

The First Draft: A bumpy Mideast landing

OBAMA/SAUDI ARABIAWithin minutes of President Barack Obama’s arrival in Saudi Arabia today, a recording by al Qaeda leader Osama bin Laden was played on Al Jazeera television. U.S. television networks showed Air Force One landing in Riyadh and the first images of Obama greeting Saudi King Abdullah, the audio recording from bin Laden took aim. The militant leader accused the Obama administration of “planting seeds for hatred and revenge.”

It was a rough beginning to what could be a challenging visit to the Middle East and Europe by Obama. He spends tonight at the Saudi monarch’s farm, then flies to Cairo tomorrow for a much-previewed address to the Muslim world. He then travels to Germany and finally to France to commemorate D-Day, returning to Washington on Saturday.

There’s a full cast of characters testifying today on Capitol Hill. Federal Reserve Board Chairman Ben Bernanke appears before the House Budget Committee on challenges facing the economy. Energy Secretary Stephen Chu talks to a panel of the House Appropriations Committee. And executives from GM and Chrysler testify before the Senate Commerce Committee on protecting auto dealers and consumers after the closure of hundreds of car dealerships at both companies.

The First Draft: End of an era for GM

AUTOS/Even though it was expected, it was still a jolt: GM declared bankruptcy this morning, the third-largest bankruptcy filing in U.S. history and the biggest ever in U.S. manufacturing.

Unthinkable a decade ago, now General Motors is yet another casualty of the cratered U.S. economy, with taxpayers putting up $30 billion for a 60 percent stake in the company. The GM filing followed just hours after a bankruptcy judge approved the sale of virtually all of automaker Chrysler’s assets to a group led by Italy’s Fiat SpA.

Within minutes of the filing, the headlines were rocketing around the Web:
The Washington Post: “Filing Marks the End of Financial Independence for Industrial Icon”
The New York Times: “A Risky Bet to Save an Icon of American Capitalism”
The Drudge Report led its page with a photo of the GM logo under a U.S. flag, headlined: “Government Motors.”

Who decided which Chrysler dealers to close?

Washington is always full of conspiracy theories –  one of the latest surrounds the decision to close hundreds of Chrysler dealerships following the automaker’s slide into bankruptcy.

Conservatives want to know whether dealerships with Republican ties were targeted by the Obama administration.

CHRYSLER/BANKRUPTCYSome are seizing on a Reuters article. In it, a lawyer who represents some of the terminated dealers said after a deposition with Chrysler President Jim Press that the automaker did not make the decision.

Obama wants YOU … to buy a car

AUTOS-OBAMA/President Barack Obama is now America’s car salesman.

Obama made his sales pitch on Monday as he laid out White House plans for restructuring the struggling auto giants General Motors and Chrysler. Buy a car, he said, and you might qualify for a tax deduction.

“The IRS is launching a campaign to alert consumers of a new tax benefit for auto purchases made between February 16th and the end of this year — if you buy a car anytime this year, you may be able to deduct the cost of any sales and excise taxes. And this provision could save families hundreds of dollars and lead to as many as 100,000 new car sales,” Obama said.

White House press secretary Robert Gibbs followed up on this theme a bit at his daily briefing saying Obama “absolutely” would prefer for Americans to buy U.S.-made cars.

First Draft: sputtering autos

President Barack Obama gives his verdict on auto industry restructuring plans at 11 a.m.

Apparently GM and Chrysler, both seeking government money, did not pass with flying colors. White House forced GM chief Rick Wagoner out and wants Chrysler to work out a partnership with Italy’s Fiat — could that spawn a PT Cruiser Panda? OBAMA/

Lots of chatter on the ousting of Wagoner. Two main questions being raised — why was the White House tougher on automakers than bankers on this front and is it the proper role of government to depose the head of a private company?

First Draft: bad, add, mad

Mortgages gone bad, auto industry seeking an add, and a chimpanzee gone mad starting off the day.

President Barack Obama out in Arizona to outline a housing bailout plan to offer help on distressed mortgages at 12:15 p.m. Washington time. The plan commits up to $275 billion to support housing, including through government subsidies to mortgage lenders to encourage lower payments for borrowers.

FINANCIAL/TIMES-FORECLOSURES

More negative economic data. New U.S. housing starts and permits dropped to record lows in January. Housing starts fell 16.8 percent to an annual rate of 466,000 units and new building permits fell 4.8 percent to 521,000 units.

The First Draft: Ghost Town

On the day that the government gives itself $787 billion to hand out, turns out there’s nobody in Washington to print it up and hand it out.

After a long Presidents’ Day weekend, President Barack Obama will load the 1,000-page stimulus bill onto Air Force One today and fly it to Denver to sign it into law.USA-STIMULUS/

Congress has adjourned for the week after passing the bill on Friday, so lawmakers are likely back home taking credit for — or distancing themselves from — the record-setting spending package.

from Global Investing:

Sen. Corker to Chrysler: best hope is merger

Tennessee Sen. Bob Corker (right, in the driver's seat next to Mark Fields, Ford's president of the Americas), who pushed for tough conditions on the $17.4 billion U.S. government bailout for General Motors and Chrysler, said at the Detroit auto show that he hoped Chrysler would find a merger partner to survive.

"Chrysler probably needs to merge with somebody, not necessarily disappear from the standpoint of existence," said Corker, who added the automaker owned by Cerberus Capital Management was not making the needed investment to remain competitive. He spoke to reporters as he toured the show before meeting with executives for GM, Chrysler and Ford.

Corker, whose home state includes the U.S. headquarters for Japan's Nissan, also said he felt GM's debt load was too heavy and it may not meet the restructuring targets set out under the $13.4 billion loan granted to the company by the Bush administration.