Yummy appetizers, but where's the steak?

Detroit is full of good-news tidbits this week.

But let's be honest. We're all thankful the worst U.S. sales year in 27 years -- 10.4 million units, ugh -- is over. A modest recovery is starting. But even the most optimistic 2010 forecast, General Motors' upper range of 12 million, is still below the 12.4 million of 2008. And what nasty a year that was.

So hurray for small signs of growth, such as Dow Kokam CEO Ravi Shanker announcing plans to build a Michigan battery cell plant that will employ 400 workers. That's good, though those jobs won't come until 2012.

But after such a long, long famine, the auto industry needs more than a tray of tasty appetizers.

It needs solid nourishment, lots of it, and right now.

Well, recovery won't be quick, we are reminded this week at the Detroit auto show and Automotive News World Congress. The personal pain and economic carnage isn't over quite yet.

It's pretty universal, if anyone, anywhere can find solace in that. From suppliers to automakers to dealers, everybody is in the soup.

Most suppliers hunkered down, slashed payroll and fixed costs to the bone. But now the survivors are sticking their heads up and noticing too many of them made it though the storm to live on what work is left. Skittish lenders don't want to know them.

Automakers are so broke, assets that cost billions to build are lepers, even at pennies on the dollar. Saturn? Saab? Hummer? Volvo? Dead. Dying. Still unsold.

And dealers? Same story. Thousands of family businesses gone in a blink. Closed or closing dealerships are a glut on the market. Nobody with money wants one. No blue sky. Offers, if any, are at much lower multiples of current financial results, not normal multiples of old returns, AutoNation CEO Mike Jackson noted yesterday.

And even the dealers' traditional hold card, the real estate under the dealership, today is simply more distressed commercial property. Says veteran dealer Walter Huizenga: “It'll take years, not months, to work this off.”

So let's savor our appetizers, slowly. The kitchen is still working on the steak.

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