The auto industry probably doesn't want to look back on 2009. Ignore the rearview mirror; put it in drive and move forward. At least the dismal year ended on a high note. Despite a total sales decline of 21.2%, to 10.4 million units, the industry gets to celebrate a 15.1% increase in sales for the month of December, according to Autodata.

For the Detroit crowd, Ford (F) led the pack, with December sales up almost a third. General Motors (GRM) ticked 5.7% higher, with Chrysler up 3.7% for the month.

Despite the media slump that's been running alongside the worldwide recession, CBS (CBS) isn't having any trouble moving ad space for the Super Bowl.

The event is still more than a month from now, but the network reports having only a few commercial slots left for the big game. In fact, 95% of its 62 slots have moved, even with two of the most committed Super Bowl advertisers -- Pepsi (PEP) and General Motors (GRM) -- bowing out of the action. The first half is already sold out completely.

Last fall, I suggested that General Motors Corp. (NYSE: GM) ought to follow a six point restructuring plan. One of those steps was to can GM's CEO Rick Wagoner. Under his tenure, which began in 2000, GM's stock has lost 95% of its value and GM has posted $30 billion in 2008 losses while presiding over a North American market share slide from 33% to 19%. What amazes me is that GM's board did not step in years ago. So Monday, President Obama will officially ask Wagoner to step aside.

Senator Chris Dodd (D-CT) wants General Motors Corp. (NYSE: GM) CEO out and thinks a merger between Chrysler and GM makes sense. I am happy to hear him say that because I suggested those ideas as part of my six point restructuring plan for the auto industry. The difference is that when Dodd says this, he actually has some power to make it happen.

This morning on Face the Nation, Dodd said, "You've got to consider new leadership. [Wagoner] has to move on." Moreover, when asked if a change in leadership should be a condition of a bailout, Dodd said, "I think it is going to have to be part of it." Dodd also said, "Chrysler, is, I think, basically gone, probably ought to be merged."

This sounds like progress to me. If only Congress could push the auto industry to follow the other four parts of the restructuring plan, that would be great. However, my plan left out an important point -- even if the industry cuts unprofitable products and the related dealerships and reduces pay and benefits it will still need to agree on how much of a haircut the bondholders will need to take in a restructuring.

Nevertheless, Dodd's comments on Face the Nation represent good progress.

Peter Cohan is president of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in the securities mentioned.

It looks like all that auto CEO driving has paid off. With a little help from the worst job report since 1974 (533,000 lost jobs in November), Congress and The White House have agreed on a way to fork over $14 billion worth of taxpayer money to General Motors Corp. (NYSE: GM) and Chrysler. The plan is to take that $14 billion from the $25 billion that the Energy Department has already approved to help the auto companies develop fuel efficient cars. Then next year, the new government will use financial bailout money to replace the Energy Department funds.

Will the U.S. taxpayer get anything in return for that $14 billion? Of course not. But GM and Chrysler claim it will keep them going until the end of March. This week, an economist testifying before Congress estimated that it could cost $125 billion in taxpayer money to keep these zombie auto firms afloat. So if we start to give them taxpayer money, we'll keep doing it for years. And the $9.3 billion that would be lost if the Treasury exercised the warrants it took after putting our money into 51 of the 53 banks suggests that government rescue plans just destroy more taxpayer wealth.

I think GM and Chrysler need to do more heavy lifting -- by putting together a real restructuring plan before taking taxpayer money. If there is a profitable business buried inside GM and Chrysler, the two companies should dig it up. As I've posted, a merger between GM and Chrysler could be a good start -- it's one part of a six-step restructuring plan I discussed. But there needs to be more -- particularly an agreement with bondholders about how much of a haircut they would take in a prepackaged bankruptcy.

This post is part of a feature on companies and products that our bloggers think are in need of a makeover. See all 26.

General Motors Corp. (NYSE: GM) will never be the same. The American manufacturing icon is in the worst shape of its life in the past five decades, it's not selling the larger vehicles that have been its bread and butter for years and its stock is absolutely in the tank. It's also shutting down factories as it feverishly tries to reinvent itself. After all, Madonna has done this many times -- so why can't GM?

Okay, that's an unfair comparison. But for long-term survival, companies always need plans to rapidly change with the times, even if the money needed for that flexibility conflicts with the incessant market need for quarterly expectations. After all, like we've seen this week, the market is more emotional than a 14 year-old girl. It always will be. So, what can GM do? It's hard to say, but time is of the essence. Makeover times in this age should take double-digit months, not double-digit years.

Wipe off the dribbling eye shadow, visit Neiman Marcus, and get an extreme makeover -- that's what. Since GM really doesn't have a cash pile like some other blue chip companies, can it pay for a makeover? Doubtful. Can companies reinvent themselves with marketing and image? Sure, this happens all the time.

Our government has been doing its share of bailouts in the last year. It put $29 billion of taxpayer money at risk to finance the takeover of Bear Stearns. It stands ready to use $800 billion to bailout Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE). And now General Motors (NYSE: GM) wants $50 billion in government guarantees to finance fuel efficient cars. I have been looking into the bailout issue and whether it is beneficial or a misuse of funds - and there is a lot of debate about this issue. These bailouts may make political sense but are they in the long-term economic interests of the country?

A colleague of mine who was a Budget and Cost Analyst for a top government agency has been thinking about the political aspect of bailouts and shared his thoughts with me. As he wrote, "It is a sure thing that either party could get votes from a bailout, but they might loose some as well. Where a party could really improve its position would be to support a bailout, but lose."

He suggests that this outcome would pay off in the short-run but could damage long-term economic outcomes. As he suggested, If the party supported a bailout but lost, "it could claim that it was trying to support the victims, but had been frustrated by the other party. And this could be used to promote the party for many years in efforts to get votes. While maneuvers of this sort may get short run votes, over the long term they might be hurtful of sound economic growth and performance."

The New York Times reports that General Motors (NYSE: GM) wants a $50 billion bailout due to the credit crunch. It says it can't get the money it needs to build fuel efficient cars. But during the decade, when it was minting money from SUVs and trucks sales, GM could have invested those profits in fuel efficient products. Now that those profits have evaporated, it wants taxpayers to step in.

What kind of bailout does GM want? The Times reports it seeks $50 billion in government-backed loans to retool its plants to build fuel efficient cars. GM is not alone -- Detroit's automakers and the United Auto Workers (UAW) already requested Congress to "appropriate $3.75 billion to back the $25 billion in loans authorized last year." Now they want to double that amount and are "urging Congress to act by the end of September so that the money can be available next year." No doubt the industry is in trouble. The Times reports that "total sales for [August are forecast to be] 14.4 percent lower than a year ago and that G.M.'s sales [will drop] 27.5 percent."

But the economic logic for this taxpayer-funded bailout is tenuous. GM wants the government to leave it alone when it comes to fuel efficiency and it made huge profits on gas guzzlers before the price of oil shot up from $24 a barrel to $117. Thanks to GM's lack of investment in fuel efficient vehicles, its losses are soaring. Most recently it lost $4.4 billion and its revenues plunged 33% from $29.7 billion to $19.8 billion. It wants our money to make up for its bad management. Since its current CEO, Rick Wagoner, has taken over, GM's stock price has fallen 83%. But he still has the support of GM's board.

Bear Stearns Companies (NYSE: BSC) -- implied volatility decreases after EPS as BSC rallies. BSC is recently up $4.23 to $118.96. BSC October option implied volatility of 40 is below its 26-week average of 43 according to Track Data, suggesting decreasing price movement.

Ford Motor (NYSE: F) -- implied volatility-risk collapses on tentative UAW agreement. Ford is recently up 33 cents to $8.67. General Motors Corp. (NYSE: GM) and the United Auto Workers announced a tentative agreement on a new national contract. Dow Jones reported, "The cost of protecting $10 million of fellow U.S. automaker Ford bonds fell to $590,000, after being in the $630,000 area on news of the strike at GM, according to a market participant. F's 7.45% notes due 2031 were up 1 point to 78.75 cents, according to MarketAxess." F October option implied of 35 is below a level of 52 from last week and below its 26-week average of 49 according to Track Data, suggesting decreasing risk.

Daily options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.

No. 2 U.S. automaker Ford Motor Company (NYSE:F) said Monday it expects to borrow $18 billion and back its loans with collateral for the first time.

The venerable U.S. automaker said it needs the money to continue to implement its major restructuring. CEO Alan Mulally said Ford needs the capital to help pay for a buyout /workforce reduction for 40,000 Ford employees, as well as to pay for additional plant/operational modifications.

Like General Motors Corp. (NYSE:GM), Ford is in the midst of a major transformation, the success of which will have much to say regarding the sustainability of each company. High gasoline prices, and a dearth of innovative cars have propelled consumers to buy foreign vehicles, particularly cars manufactured by Toyota and Honda. Moreover, as with GM, the changes at Ford do not simply amount to developing two or three "must-have cars," although that is daunting enough. Ford and GM also must substantially reduce assembly and employee benefits costs to bring them in-line with foreign competitors, including buying-out selected employees. And buy-outs require capital, hence Ford's Monday bond announcement.

The market's reaction to Ford's announcement? Moody's lowered Ford's unsecured debt rating to Caa1, seven steps below investment grade. Meanwhile, Ford's shares dropped 26 cents to $8.26 in afternoon trading Monday. GM declined 71 cents to $30.52.

Investment Analysis: Is Ford suitable for the typical investor? No. Ford remains a high-risk investment: Ford still must demonstrate that it can leap over several operational hurdles before Wall Street can declare its restructuring a success. Therefore, unless you can tolerate losing a substantial portion of the money you invest in Ford -- a 60%-70% stock price decline, for example -- avoid Ford for now. The investment analysis for GM is slightly more positive, but GM also is a moderate-risk investment, not suitable for conservative investors.