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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 (UAW) union's "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 noncar 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 health care 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, health care 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. 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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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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Despite the worst U.S. auto market in 25 years, Volkswagen says it has no regrets about the decision to build a new plant in Chattanooga, Tennessee. In fact, they are going full speed ahead, currently moving huge piles of dirt as the first phase of the project that was formalized last July. Volkswagen will build a mid-size sedan somewhat larger than its current Passat, but the company has not released official details of the vehicle at this point.

Dogged in its determination for worldwide growth, VW is not ignoring the United States as an avenue for increased sales. Indeed, Volkswagen intends to sell 1 million vehicles a year in the States by 2018. Said Volkswagen AG spokeswoman Jill Bratina in Detroit News, "we have stuck with our goals of growing our sales in the U.S. market. This plant is critical to that." In a global crunch, VW is defying the odds, having enjoyed a 28 percent worldwide profit increase in the third quarter.

Hopefully new American employers like VW, as well as increased shifts and production at other auto plants (such as those producing the Honda Civic) that produce suddenly popular fuel-efficient cars, will be a boon to autoworkers being laid off in droves from Big Three plants. For example, GM's assembly plant in Moraine, Ohio, that builds the mid-sized GMT 360 SUVs will go permanently offline on December 23. VW's Chattanooga is slated to employ roughly 2,000 workers when it begins production.--Colin Mathews
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In a perfectly legal--if rather petulant--move, GM asked the FAA to block public tracking of a private jet that the automaker is currently leasing. Automotive News reported that GM spokesman Greg Martin said yesterday, regarding the action, that the company had "availed ourselves of the same option as others have."

Martin did not explain why GM made the request, nor did he speculate on when the the request might be honored. Whether or not the action is related to Congressman Ackerman's public rebuke of the Big Three CEO's jet-setting to D.C., or GM's decision to get rid of two corporate jets soon thereafter, is unknown. But it sure smells just a little funny...

With Swiss Bank execs recently volunteering to take drastic pay cuts, it makes typical American CEOs--especially ones at the helm of struggling companies--look quite greedy when they continue to collect salaries hundreds of times more than their average worker while also using company funds to travel high on the hog. Impressively, Chrysler CEO Bob Nardelli recently announced that he would accept a salary of $1 per year if it helped his company get much-needed federal assistance. GM's Wagoner dodged the issue, but did say he'd previously cut his salary 50 percent. Ford's Mulally, however, who made $21 million last year at Ford, "said he was concerned that cutting compensation might cause the company to lose executives and be unable to attract top talent," according to Automotive News. Not exactly taking one for the team, is it?--Colin Mathews
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