One positive side effect of the auto industry experiencing such a low sales volume is the incredible deals you can find on a new car. Manufacturers have already pulled out the old tried and true incentives of employee pricing and 0% financing, but we've never seen a deal like this before. Galpin Ford, which bills itself as the #1 volume Ford dealer in the world, is offering the 2008 Ford Mustang GT for the bargain bin price of $18,995. The dealership says it has come across 40 models of America's favorite muscle car from a "performance fleet" and is offering them at nearly 1/3 off on a first come, first serve basis. We don't know exactly what "performance fleet" means, so be sure to check the odometer and ask what these Mustangs experienced in a prior life before buying. Their original $28,160 MSRPs have been knocked down by Ford's own employee pricing deal, an additional $2,500 rebate and Galpin's own discount of $3,794. If you're interested, you better act quick as there's sure to be big demand for such low priced Detroit iron while gas is still below $2/gallon.

WASHINGTON -(Dow Jones)- House Speaker Nancy Pelosi, D-Calif., said Monday there would be no endless flow of money to the U.S. auto industry, and the companies could be required to pay back the money early if they don't come up with a comprehensive restructuring plan by the end of the first quarter.

Pelosi said that everyone involved in the U.S. auto industry, including management, labor unions, parts suppliers, investors and dealers, would have to make a sacrifice to ensure the continuing viability of the industry.

"We call this a barber shop: everyone's getting a hair cut," said Pelosi, speaking at a press conference in the U.S. Capitol.

She emphasized the fact that Congressional Democrats are committed to the continued existence of the U.S. auto industry, but made it clear that if the current management of the companies did not fully cooperate, lawmakers wouldn't hesitate to remove them.

Some lawmakers suggested over the weekend that the current management should be forced to resign as a condition of the federal government rescue.

Pelosi was speaking after a draft of the $15 billion rescue package was sent to the White House to be reviewed by Bush administration officials.

When it comes to Saturn, General Motors is a little stuck. The plucky brand that promised something different and then turned into much the same hasn't seen critical acclaim or profitability for more than ten years. GM has halted funding for new Saturn products, and its plan to Congress indicated that a sharp focus on Buick, Cadillac, Chevrolet and GMC. That would appear to leave Saturn something pretty close to dead.

But GM can't simply close the Saturn shop. There are 425 Saturn dealerships, and one dealer-broker figured that GM would have to shell out $3-$4 million to each dealer if Saturn gets put down. That puts GM past the billion dollar mark even before any other cost is taken into account. And Saturn can't simply be sold either, except as a brand name and blueprints – it has no engineering nor manufacturing abilities outside of GM.

A meeting is planned for later this week to "conceive a new business model" to make Saturn profitable, because the uncertainty isn't helping anyone. Dealers don't like the sound of GM putting all of its eggs in a basket that doesn't include Saturn, customers don't like the sound of "No new product," and GM can't stay in a holding pattern and shell out money for a brand going nowhere. We hope they sort something out that restores its initial promise – and some profits – because we still have a soft spot for the otherwordly brand.

The White House and congressional Democrats yesterday reached an "agreement in concept" on a measure that would throw a government lifeline to the faltering Detroit auto industry but require the auto giants, their workers and creditors to quickly negotiate a plan to achieve profitability or face the prospect of bankruptcy.

The agreement calls for the government to speed $15 billion in emergency loans to the car companies as soon as next week, and for President Bush to immediately name a car czar to oversee the bailout. Under the agreement, the car czar would be required to revoke the loans unless the companies proved by March 31 that they were implementing a plan to achieve "a positive net present value," according to a senior administration official who spoke on condition of anonymity because final language was still under discussion.

Under the measure, if the firms fail to make progress, the car czar would be required to submit to Congress a new plan to restore them to financial viability, the official said, including the option of Chapter 11 bankruptcy protection. If no plan for the long-term survival of the companies were to emerge, the firms would be ineligible for any additional federal assistance.

The official said the agreement would create "three very serious sticks to ensure that this is truly what it was intended to be: bridge financing for firms that have a plan and a path to become competitive," rather than becoming "the first in a number of interminable loans that these guys can get to avoid making the hard choices."

The UAW is likely to seek a seat on General Motors Corp.’s board and expects the automaker to offer another round of hourly buyout and retirement incentives next year in the event the union grants concessions to help the automaker win federal loans.
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UAW Local 2404 in Charlotte, N.C., posted a note to members on its Web site saying the company would seek the board seat and special attrition program in exchange for several concessions it expects to make to help GM.

GM is working to win Congressional approval of federal loans to help the automaker survive the economic downturn that has led to the worst U.S. auto sales in more than a quarter century. In all, GM, Ford Motor Co. and Chrysler LLC have asked for as much as $34 billion in loans.

However, GM and Chrysler have said they are dangerously close to running out of operating funds. And Congressional leaders have said they want to see sacrifice from all parties if the automakers are to receive federal loans to aid in their survival.

In exchange for concessions, “the UAW seeks an equity stake in the company most likely in the form of a seat on the board of directors,” Local 2404 posted on its Web site.

In addition, it wrote: “A special attrition package would be offered in 2009 providing that the loans are granted and that the government approves using some of the money for that purpose.”

UAW leadership voted:

• To allow all three Detroit automakers to postpone their contributions to the retiree health-care trust — known as a VEBA, or voluntary employee beneficiary association — until 2012. The contributions were originally due in 2010.

• To eliminate the program known as the jobs bank and “negotiate a new provision to protect workers that other wise would have been placed in the jobs bank program.” In the jobs bank, UAW workers are paid nearly full wages after they are laid off or their jobs are eliminated. While some people in the jobs bank do other work for the company or volunteer in the community during the work day, the program is controversial because some laid-off employees are paid not to work.

The UAW first announced last Wednesday that it would suspend the jobs bank and allow the delay of VEBA payments to help the automakers.