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Word this morning that the Swedish government was taking an interest in Saab and Volvo has been followed by an official announcement by Ford that, once again, Volvo's future is up for grabs.

In a press release just put out, Ford says the "significant decline in the global auto industry particularly in the past three months and the severe economic instability worldwide" have led it to once again question Volvo's place in the Ford lineup. In the release, Ford says Volvo will move forward as a stand-alone company and will continue to focus on design, safety and environmental issues.

"Volvo is a strong global brand with a proud heritage of safety and environmental responsibility and has launched an aggressive plan to right-size its operations and improve its financial results. As we conduct this review, we are committed to making the best decision for both Ford and Volvo going forward," says Ford President and CEO Alan Mulally.

Ford's giving itself a few months to work on the project--in the meantime, Volvo is set to show off the new 2010 Volvo XC60 to journalists in January and is bowing with a 2010 Volvo S60 concept at the 2009 Detroit auto show.

And before then, the Big Three head to D.C. in search of bailout money--and in search of big, showy gestures to prove to Congress that they're serious about a turnaround. Coincidence?

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As the Big Three trudge back to Washington tomorrow to make their carefully tailored plans for Federal assistance, Automotive News says that Republicans are likely to request practices such as the United Auto Workers Union's (UAW) "Jobs Bank" be eliminated. These and other concessions are expected to be proposed by some or all of the Big Three as they make more allowances in hopes of placating a Congress none too eager to fund billions in assistance for three companies notorious for inefficient money management.

The UAW's Jobs Bank ensures unionized, hourly auto workers nearly full pay when they are laid off. Automotive News calls the practice "a powerful symbol of auto industry excess."

Senator Kit Bond of Missouri, who is described as a moderate Republican, told Automotive News that "management, workers and investors are going to have to make sacrifices if they truly want to turn around their companies enough to earn taxpayer help." They say that GM will likely be the first to propose the Jobs Bank elimination.

Republican Senator Elizabeth Dole, who recently lost her '08 reelection bid to Democrat Kay Hagan, said that "the enormous costs in union-required benefits are unsustainable. Renegotiating these contracts would be essential if there were to be hope of keeping these companies afloat."--Colin Mathews

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After what was probably the least successful round of begging ever televised, the Big Three automakers are going back to Washington this week in a full-court press for a bailout--yes, a bailout, never mind how it's being couched or gladhanded. GM, Ford and Chrysler want easy money and low-interest loan guarantees that you and I can't get, so they can hang on to their current business models until the economy turns a corner. That's a bailout by any measure.

The trouble is, no one thinks Detroit is worth saving--at least, no one outside of the Midwest. Bank of America says there's one too many automakers, and that's the most level-headed commentary to come from the talking heads in Congress and on television. Mortgage-industry shill and alleged Sen. Chris Dodd blames the car companies for everything - when CAFE is the real culprit. (Ask Dodd about his preferential treatment for an industry he's actually interested and has a stake in.) As a nation, we've lost respect for an industry that is part of the foundation of industrial America, and some of us are willing to write off what remains to the Japanese, German and Korean car industry.

There are still ways to fix Detroit, though. Difficult, wrenching fixes but long-lasting changes that could give Detroit a new footing and a new way to compete. It's not quite a nuclear solution non-car guys want: uberblogger Seth Godin would have the dealers wiped out and promises an "orgy of innovation" as a result. It's going to take humbling in the boardroom, in the halls of the UAW, and in your driveways, but it's doable.

So as they caravan to Washington for tomorrow's epic round of fundraising, the leaders of the Big Three bailout mission--GM's Rick Wagoner, Ford's Alan Mulally, and Chrysler's Bob Nardelli--we give you these five ideas that can save the U.S. car industry for future legislators and executives and workers and Americans alike:

Bailout Step One: Pre-Package Restructuring

There's just no other way to get Detroit out from its crushing pension and healthcare burdens short of bankruptcy--something that may have worked for airlines but probably would kill all the progress the domestics have made on quality and reliability. Even Chrysler CEO Bob Nardelli says Chrysler won't survive a bankruptcy filing--and there's reason to think GM will not, either. The way to go? Cut costs in a prearranged deal that finances a massive right-sizing of all the domestic brands. The UAW has helped costs by cutting future labor costs, but new pay rates coming in 2010 are too far off. Detroit needs pension relief, healthcare relief and pay relief. And it needs it today, not in two years. Sorry, Tesla, but vaporware doesn't qualify for this kind of federal funding.

Bailout Step Two: Axe CAFE and Enact an Energy Tax

Why was Detroit singled out with colossally bad CAFE legislation in the 1970s? Because they built shitty cars then. When Congress signed off on CAFE, though, they willingly gave away Detroit market share because they didn't have the stones to enact an overall energy tax that hit every oil-using sector of the economy, from airlines to makers of plastics. Detroit took one for the team--now it's time for every other energy user to take their turn in the barrel.

Bailout Step Three:  Don't Give Away More Market Share

Any bailout plan that involves restructuring is going to cause massive pain--first in Detroit, then in the tsunami everywhere else. Suppliers will go out of business, and all domestic car plants could face shutdowns that could cripple production. While the industry works through the implications of the restructuring, Washington has to enact some auto sales cap that keeps import manufacturers from grabbing sales while Detroit's guard is down. It's anti-capitalist, for sure--but we don't need to make another CAFE-sized mistake and guarantee Detroit's demise.

Bailout Step Four: Split Up Chrysler Between GM and Ford

There's almost no business case that predicts an independent Chrysler--so it's time to save the best pieces of the company, its people and its best products. GM gets Jeep; Ford gets the minivans and Viper. Caliber? Done. Avenger/Sebring? Finished. Charger, Challenger and 300? Probably no place for them in a 35-mpg world anyway. Dodge Ram? Pretty wonderful, but shutting it down would give the F-Series and Silverado some breathing room. Some Chrysler jobs are spared here, something that can't be guaranteed otherwise.

Bailout Step Five: Streamline GM into Chevrolet, Buick, Saturn/Opel, GMC/Jeep and Cadillac

GM is Chevrolet and Cadillac; Saturn/Opel bridges the gap between them and Buick is GM's future in Asia. GMC is profitable--and would get more products if it absorbed Jeep. Everything else is a business case waiting to be studied. Take the dramatic situation at hand and use it to prune brands that take too much money and brainpower, and use the moment to shut down the thousands of dealers and car lines GM needs to shut down to focus its business.

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Gas prices have recently fallen as rapidly as GM, Ford, and Chrysler’s dwindling cash reserves: well below $2 per gallon in many areas of the country. From highs more than double that number just months ago, these petrol price vacillations are enough to make a person dizzy. Or at least bipolar.

How is it possible that one resource is subject to such massive price differences? Over at Jalopnik, they say it's a quite the melee of forces, "including OPEC’s daily level of greed, the number and location of which countries we’re currently invading and the current reason for low prices: demand or the lack of it."

So now that gas is dirt-cheap again, are Americans going to buy up SUVs in droves once more? The prediction from this corner: no. A focus on fuel efficiency is here to stay. Finally, Detroit has been forced into a corner regarding fuel consumption. From SUV plant shutdowns to wholesale abandonment of plans for future behemoths, Detroit automakers are taking the automotive equivalent of summer school where fuel efficiency is concerned--11th-hour stuff. It seems the die is cast, and Detroit is making enormous changes from which it can't return.

Detroit is focusing on--and investing in--smaller, efficient vehicles. It is developing hybrid powertrains, electric propulsion systems, and a host of new technologies focused on eking out more mpg. I'd be shocked if the Big Three suddenly abandoned this seismic shift in their approach to automaking just because gas is suddenly cheap again. I'd be even more shocked if the buying public suddenly started lining up to buy 9 mpg Hummer H2s (that's an anecdotal number, by the way; the EPA never actually rated the H2, and with Hummer on the chopping block, it looks like they probably never will). I doubt consumers really trust this sudden drop in fuel prices; rather, they're probably enjoying it while it lasts, but are fully prepared to pay $4 and more per gallon before long.

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If the Big Three had made the thirsty SUV a corner of their product portfolio, then they likely wouldn't be in quite the fix they're in now. Alas, it appears they made it the cornerstone for their financial stability, and most consumers simply don't want them anymore.

Foreign automakers certainly have played to the American penchant for the guzzling SUV: Audi Q7 V-8 (12 mpg city), BMW X6 V-8 (13 mpg city), Infiniti QX56 (12 mpg city), Lexus LX 570 (12 mpg city), Mercedes G 55 AMG (11 mpg city), Porsche Cayenne GTS manual (11 mpg city), and Volkswagen Touareg V-8 (12 mpg city) to rattle off a few. Clearly, Detroit manufacturers are not alone in playing to American market tastes. But as sales of the foreign guzzlers taper off, it won't kill them as their overall product range is extremely diverse. Sure, they're doing some readjusting of their own, but the black hole of SUV sales is not the death knell that it is for Detroit. And five of the seven manufacturers above were quick to market with efficient diesels to push their heavy rigs around, pulling mpg up into a far more palatable range.

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I think, this time, Detroit has learned. And even if this latest round of cheap gas makes it another 6, 12, or even 16 months as horrific market realities keep demand for gas in the United States low, I think cash-strapped Americans will gain newfound appreciation for efficient vehicles. Perhaps the silver lining here is that many Americans are learning, perhaps for the first time, that efficiency does not have to equal boredom, banality, sluggishness, or a depressing driving experience. Thank God the dark days of the '80s are past us and high-powered electronic engine management, fuel injection, gasoline direct injection, piezoelectric diesel injection, variable-vane turbocharging, lockup torque converters, synthetic lubricants, dual-clutch automated manuals, lithium-ion batteries, low coefficients of drag, and silica-infused tires are keeping us rolling at levels of efficiency we never dreamed possible back when the feds bailed Chrysler out in 1979. It's possible to get 35 mpg, or 40, even 45 without suffering through the emasculating, depressing insult of a Dodge Omni, a Chevrolet Chevette, a VW Rabbit Diesel, or a Ford Tempo. When American drivers get their first taste of the new generation of frisky, enjoyable fuel misers, many will likely never look back.

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P.S. - If you want insanely cheap fuel, don't mind the leisurely acceleration of an '80s diesel, have about $500 to invest, and are pretty good mechanically, you can get your fuel for free--like I did last week, some 90 gallons in all. Restaurants that fry food (they're about as prolific as American SUVs) have to throw away their old fryer oil--WVO (waste vegetable oil), they call it. Many have to pay a waste management service to come and haul it away. So if you could guarantee, say, your local Hunan Gourmet that their WVO bin will be empty every Saturday morning, it's quite possible they'd gladly let you have at it and take all you want. Then again, some fanatic like myself might have already brokered such a deal. Or a waste management company, wise to the nascent market for used waste vegetable oil, might be paying said restaurant a couple cents per gallon for the stuff. But even if one had to pay 10, 20, or even 50 cents per gallon, using waste vegetable oil in an old diesel is an incredibly cheap way to drive. I'm setting out to prove just how cheap, driving from Atlanta to Los Angeles without paying a cent for fuel in an old Mercedes diesel wagon that I recently converted to run on 100 percent waste vegetable oil. Stay tuned: departure is set for next Friday, December 5.--Colin Mathews
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Citing tougher emissions regulations, better fuel efficiency, and greater torque production from a smaller package, "well placed Munich insiders have said" that naturally aspirated BMW M engines will gradually give way to turbocharged units, said the U.K.'s Autocar. The new M engines will be based on the current twin-turbo inline six and twin-turbo V-8 engines in the BMW lineup, but will make more power than their regular-duty brethren and significantly more torque than the M engines they are set to replace.

Currently, M engines are a 4.0-liter V-8 in the M3 and a 5.0-liter V-10 in the M5 and M6. Both engines favor very high RPM horsepower over big torque numbers, consuming plenty of gas along the way to their peak outputs. According to Autocar, the newest M model, the xDrive M, based on the BMW X6, will have a twin-turbo V-8 that should match the M5's V-10 at 500 hp, while making considerably more torque than the V-10 (rumored at up to 516 pound-feet). This should give the newest M model, even with its considerable heft, a 0-60 mph run of under five seconds.

A BMW official said that the new turbocharged engines should match or exceed current M performance, while delivering "much better consumption." The M division is also testing stop/start functionality, regenerative braking, and a gas/electric hybrid drivetrain for installment on future models.--Colin Mathews
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