Auto industry stocks have taken a beating in the past month, but there's some consolation: so have gasoline prices.

The Energy Information Agency said this week the price of gasoline plummeted more than 30 cents, to an average of $3.15. Less than a month ago, the national average price for regular unleaded was $3.85.

 This week's average is nearly a dollar less than mid-summer highs of $4-plus per gallon. In many areas of the country, the price for regular unleaded gasoline dipped to less than $3 per gallon.

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DETROIT - A cornerstone of a heavily hyped Chrysler LLC initiative to develop a host of fuel-efficient technologies is on the skids, as Chrysler acknowledges it now is taking legal action against the partner enlisted to help it manufacture advanced, dual-clutch automated manual transmissions.

Chrysler announced last week it is suing Getrag Transmission Manufacturing LLC and its German parent company for misrepresenting Getrag's ability to secure financing for a $455-million joint venture between Getrag and Chrysler to build the fuel-saving dual-clutch transmissions at a new plant in Tipton, IN.

Asked if the lawsuit means the venture is dead, a Chrysler spokesman told AutoObserver, "'Dead' might be a little harsh. The matter is in litigation. Hopefully it will be resolved there."

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General Motors has been trying to peddle a suddenly outmoded Hummer brand for several months now, so far with no takers. But ask Mark LaNeve, GM's North American sales vice president, if the company would like to put any of its other ailing brands on the auction block, and get a bristling response.

"Why should one of mine go away?" he asked. "There are lots of brands that we out-sell. Why doesn't one of them go away?"

And while LaNeve's remark came before the recent buzz about GM-Chrysler merger talks, it's even more apropos in light of the possibility that two of the old Detroit Big Three could merge their brands as well as their operations. GM's brands would be largely likely to survive any such combination, while most of Chrysler's would likely disappear.

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DETROIT -- It appears cooler heads prevailed at General Motors long before the media frenzy over a possible merger between GM and Chrysler started. Wisely.

The Wall Street Journal is reporting Monday that GM's directors "gave a cool reception" to the idea of acquiring Chrysler's automotive business when it was discussed at last week's board meeting.

The board's reception is the right one, in our view, as there's little  in such a deal for either of them, especially for GM.

The Journal confirmed the story broken by The New York Times over the weekend which led to a media feeding frenzy that GM recently held talks with Chrysler's majority owner -- private-equity firm Cerberus Capital Management LP. Cerberus proposed swapping its 81.1-percent stake in Chrysler for GM's 49-percent stake in home and auto lending firm GMAC. Cerberus owns the other 51% of GMAC. The paper further reports talks between the two automakers have broken off for now, but could be revived.

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You note that the consumer is barraged with bad economic news. What role does the media play in this?
Something that's not been acknowledged is the fact that this is the first widespread economic downturn in the Internet era. Literally, millions of competing outlets -- fighting for attention -- have found that bad news draws audiences. The volume and breadth of 24/7 inflated negativity is assaulting the consumer from all sides is overwhelming and unprecedented.

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After a week of intense battering, General Motors Corp. and Ford Motor Co. stock prices on Friday were at least standing their ground against a still-plummeting U.S. stock market. The problem is, that ground is practically below sea level.

After seeing its stock price plunge some 50 percent since the beginning of October and with the sub-$5 price hovering around 1950s levels, reports swirled Friday that GM is preparing another round of production cutbacks and possible plant closures. GM moved earlier this year to chop some 300,000 units of truck production from its manufacturing schedule and accelerated the shutdown plans of its SUV assembly plant in Moraine, OH.  

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SANTA MONICA, Calif. -- October automotive sales continue to be in freefall from September with zero-percent financing offered by auto manufacturers providing little, if any, incentive for people to buy cars, according to the latest data from Edmunds.com, parent of AutoObserver.com.

"The automotive market slowdown has entered a new phase," said Edmunds.com Chief Executive Officer Jeremy Anwyl. "Barraged by bad economic news, consumers, instead of hoping for the best, now are preparing for the worst, and that includes postponing even the thought of buying a car."

For automakers, the old tricks don't work. Even attractive promotions like the numerous zero-percent financing programs, including the unprecedented Toyota deal of 11 models for zero-percent, are ignored by consumers, who are not in car-buying mode.

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It's the toughest of times all around the auto sector, and plunging sales for entire companies, much less individual models and nameplates, currently are the rule, not the exception.

But when a staggering giant of a nameplate comes to our attention thanks to the number crunchers at Edmunds.com, cratering sales become an item that can't be ignored.

Exhibit No. 1: Ford Motor Co.'s Explorer midsize SUV. The model that epitomized the mass-market SUV at the zenith of the genre's popularity now has dissipated to barely a blip on the sales charts.

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"We are seeing sales rates we haven't seen since the late 1980s and early 1990s," said George Magliano, director of Global Insight's North American auto group.

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PARIS - Everyone loves coming to the Paris auto show.  Mostly this is because it is not the Frankfurt auto show, with which it alternates on the yearly schedule of auto shows.

When you go to the Frankfurt auto show, it is all about the Germans.  It is all about BMW and Mercedes, really.  They're telling you, "We understand machines and technology, and that's why we own the history of the automobile. You can buy a ticket if you wish and come visit us in our big tents in Frankfurt and worship the spectacle of our technical competence."

Paris is the City of Lights, and the French car manufacturers like to demonstrate that they have the same competence as the Germans, only with romance and flair.  The French tell you, "Yes, our cars might look funny, but we understand Joie de vivre, the joy of life.  Of course our cars might look freaky and whacked out, but you are stupid if you don't understand."

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PARIS - This city is supposed to be about celebration, but automakers stuffing their wares into the Paris motor show's vast exhibition halls were hardly in a gay mood last week. As the press crowded in to take the auto industry's temperature, the patients responded like they were suffering from a year-long head cold.

The rows of gleaming product - white seemed to be a favorite color - couldn't brighten the mood of automaker executives now burdened not only with the certainly of aggressive European carbon dioxide-curbing legislation but with an increasingly constricting sales environment and the ominous undertow of the U.S. financial-sector meltdown.

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The Big Three U.S. automakers have been trying to get rid of their weakest dealers for years, but the weeding-out process has gone far, far more slowly than car company executives have wanted.

Now, this year's double-whammy of economic shocks - explosive gasoline prices that scared consumers away from large vehicles, followed by the current financial crisis that is constricting credit at every level - has already begun culling out U.S. car dealerships at a rate far faster than General Motors, Ford and Chrysler brain trusts could even dream was possible by their methods.

The Chapter 11 bankruptcy filing last week by Bill Heard Enterprises, the nation's largest chain of Chevrolet outlets, was only an inkling of the trouble that has begun overwhelming America's car-distribution network.

Edmunds.com research shows that as many as 30 percent of U.S. dealers faced dramatically worse profitability from new-vehicle sales last summer compared with 2007, and 70 percent of U.S. dealers faced at least some deterioration.

And so now, new projections are emerging almost daily of a market-rationalizing Armageddon for auto dealers during the fourth quarter.

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PARIS - Yes, there are some who doubt the science of global warming. Not to mention the probable connection of man-made carbon-dioxide (CO2) and rising global temperatures.

But there's no doubt automakers in Europe - and European auto buyers - are deadly serious about CO2 emissions. Particularly following last week's ruling in the European Union that set presumptive "limits" of 120 grams per kilometer of CO2 emissions as a fleet average all automakers selling in Europe must meet beginning in 2012.

At last week's Paris auto show, we lost count of the vehicles that were in some fashion emblazoned not with horsepower figures or even attractive prices, but CO2 emissions. Often those on-vehicle billboards were presented at a size and prominence that could be considered slightly more than eye-catching.

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By Nick Kurczewski

PARIS - This year's Paris auto show has seen many almost every major car manufacturer go green, as electric and hybrid vehicles seem to cover every square inch of the exhibition halls.  But Renault has taken a strangely literal twist to the eco-friendly theme.  The French company has installed green-tinted windows in the electric powered Z.E. Concept that made its debut here in Paris.

Exactly why the Z.E. sports this toxic-green-colored glasswork, we're not sure.  An interactive information center off to the side of the chunky-looking concept was pretty sparse with specifics. What we did learn is that the Z.E. is powered by lithium-ion batteries that have a six year lifespan. 

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