General Motors continued its struggles, going back to its same old bag of tricks for another round of zero percent financing in a bid to spur cash- (and credit-) strapped consumers to take on yet more debt. The carmaker also will cut production of SUVs and pickup trucks for the second time in the last few weeks and increase the number of fuel-efficient cars it churns out.

The Wall Street Journal and Financial Times put the news on page one, while The New York Times drops it on C1. The Journal says it’s a move to fight the deep sales doldrums of the auto industry at a time when GM is about to fall to No. 2 in U.S. car sales to Toyota, an event that will be yet another reminder of its epic fall from domination. Just eight years ago, GM had 30 percent of that market, more than three times Toyota’s 9.3 percent, the WSJ reports. GM will offer up to six years of interest-free financing, though it’s raising 2009 prices by 3.5 percent.

Sky-high gas prices have consumers shunning gas-guzzling vehicles, especially pickups and SUVs. The NYT says Ford’s F-150 is selling so poorly (having been the top vehicle for twenty-six years in a row, it’s now No. 5) that the company is delaying the 2009 model by two months so dealers have something of a chance to clear some of their 2008 inventory. Pickup sales are down 32 percent and SUV sales are down 42 percent from 2007, the FT says.

But consumers are losing wealth in the housing bust, worried about losing their jobs, and they just aren’t buying cars much, period. The Times quotes an analyst saying so far June has been the industry’s worst month in fifteen years and Bloomberg, in noting that even Toyota may have to cut its sales goals, says auto sales are down 8.5 percent this year, and The Detroit News says GM is down 17 percent. The Journal quotes GM’s marketing chief summing up why:

“Zero percent seems to work,” Mr. LaNeve said. He added that recent declines in the value of used trucks have left some customers driving vehicles worth less than is owed on them, making it hard for owners to trade them in on new models. “A lot of customers are out of equity, and zero percent helps [with] that issue,” he said.

The Journal says GM’s stock is near a thirty-three-year low, while a Los Angeles Times blog notes that the entire market value of the company (about $7.3 billion) is less than that of the video-game retailer GameStop.

Just how much trouble is GM in? The Journal looks at the credit-default swap market, which sells insurance to protect against default. It’s pricing in a 70 percent likelikhood of GM defaulting in the next five years.

100 percent financing lives on

The Journal takes a page-one look at how it’s still possible to get no-down-payment mortgages and what that might mean for the government-insured loans.

The Federal Housing Administration is trying to crack down on down-payment assistance plans offered by nonprofits, which funnel money from sellers to buyers to help them close deals. The FHA requires a puny 3 percent down payment, which is a hurdle someone ought to be able to clear in order to purchase a house, especially in a market where prices are declining in many areas. That can leave the buyer with no equity cushion, making them more likely to default and put taxpayers on the hook.

A Journal chart shows the difference it makes: Borrowers who get down-payment help from nonprofits are about three times more likely to be delinquent in the first two years of their loan. And it’s a big problem: Down-payment assistance helped close more than one-third of all FHA loans this year, up from fewer than 2 percent eight years ago.

We thought this ended more than a year ago:

D.R. Horton Inc., the nation’s largest home builder by volume, is touting “100% financing” for its two- and three-bedroom condominiums near the beach in Maui, Hawaii, which start at $498,000. In the Seattle area, local builder Quadrant Corp. is advertising townhouses that can be purchased with as little as $500 down. “Use your coffee budget to move into a new home,” says an online promotion. In the St. Louis area, Vantage Homes recently promoted its suburban developments with ads suggesting a new home should be on the list of things to buy for those “looking for something to spend your economic stimulus check on.”

We note that the Journal did some good early reporting on the subject two years ago.

Men of steel

Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at Follow him on Twitter at @ryanchittum.