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Thursday, April 10, 2008 RSSSEND TO A FRIENDPRINT
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At a Glance...
Top Stories
Dire Economy Tests Detroit 3
Ford Vows to Reduce Auto Emissions
Toyota and GM Recall 662,000 Cars in U.S.
Bill Requiring Minimum Auto Sound Levels Expected
Feds Foresee Gas at $4 in Summer
Suzuki Tells U.S. Dealers: Don't Fret
Strong Demand Drives Rising Car Sales in China
NADA Update
New Poster Required to Recognize Changes to Family and Medical Leave Act
IRS Issues Guidance on Dealership Cost Segregation Studies
2009 Convention Workshop Proposals Now Being Accepted
Lenovo Offers NADA Members Discount on Thinkpad Notebooks
STAR Answers Dealers' Questions About DMS Vendors
Top Stories
Dire Economy Tests Detroit 3

Analysts say automakers will burn more cash in 2008, but are better prepared to handle downturn
Detroit's automakers face an uphill struggle this year after losing two of the underpinnings that supported the early stages of their turnaround plans: a strong economy and plentiful credit, analysts at Standard & Poor's Ratings Services said. But General Motors Corp., Ford Motor Co. and Chrysler LLC are in a stronger position now to weather a downturn because of the recent cost cuts and new product launches entailed in their restructuring plans, they said. S&P credit analyst Robert Schulz said GM and Ford were wise to have taken advantage of the formerly robust capital markets to bolster their liquidity. He estimated that all three U.S. automakers would go through more cash this year than they will generate. But he said they have enough cash and credit to finance their automotive operations -- excluding financing by their lending units -- without tapping the now-skittish capital markets in 2008.
Source:  The Detroit News

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Ford Vows to Reduce Auto Emissions

WASHINGTON -- Ford Motor Co. pledged Wednesday to reduce the global-warming gas emissions of its U.S. and European vehicles by 30 percent between now and 2020, a move that, while driven by regulations, won praise from shareholder activists. A coalition of groups, including the Connecticut state treasurer, has been pressuring U.S. corporations to lay out detailed plans for cutting emissions linked to global warming. The groups said Wednesday that Ford's response was a first among U.S. corporations, and would be used as an example for other firms, including General Motors Corp. The Interfaith Center on Corporate Responsibility, which led the charge, said it would press a resolution at GM's shareholder meeting to make a similar pledge, and that 54 similar resolutions had been filed with public companies this year. The goal closely mirrors the reductions required under new U.S. fuel economy rules, which target a 40 percent increase in standards to 35 m.p.g. by 2020. Ford and other automakers' car fleets have long surpassed the standards for passenger cars.
Source:  The Detroit Free Press

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Toyota and GM Recall 662,000 Cars in U.S.

DETROIT -- Toyota Motor Corp and General Motors Corp are recalling more than 662,000 vehicles sold in the United States due to defects in power windows, the two companies said on Wednesday. Toyota will recall 539,500 Corolla and Matrix vehicles for the 2003 and 2004 model years, it said in a statement. GM said it would recall 122,598 Pontiac Vibe hatchbacks, which share the same platform with Toyota's Matrix and are built by GM in a joint venture with the Japanese automaker. Toyota will notify vehicle owners by mail, beginning in late April. It advised owners to contact their local Toyota dealer for inspection and repairs.
Source:  Reuters

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Bill Requiring Minimum Auto Sound Levels Expected

Measure's aim: To protect blind pedestrians from quiet hybrids
Legislation setting a minimum sound level for vehicles sold in the United States by as early as 2010 is expected to be introduced today in the U.S. House of Representatives. The bill would require the U.S. Secretary of Transportation to lead a study to determine if a minimum sound level is needed to protect pedestrians, specifically the blind. And if such a level is necessary, the bill would set it. U.S. Reps. Edolphus Towns (D-N.Y.) and Cliff Stearns (R-Fla.) are sponsors of the Pedestrian Safety Enhancement Act of 2008. The proposed legislation stemmed from concern that blind pedestrians may be put in danger because of quiet-running hybrid and electric vehicles.
Source:  Automotive News (Subscription required.)

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Feds Foresee Gas at $4 in Summer

Slight pump price slip to be wiped by upswing that'll see $3.60 a gallon by June, study says
NEW YORK -- Retail gasoline prices pulled back slightly from record levels Tuesday and gave some consumers a small break, but a new government forecast said gas could reach as high as $4 a gallon during the summer driving season. In its monthly report on petroleum supplies and demand, the Energy Department's Energy Information Administration forecast that monthly average pump prices will peak near $3.60 a gallon in June, but could rise as high as $4 a gallon at times. That's a dime higher than the EIA's previous monthly average projection, and brings government forecasts closer to those of many analysts who expect gas prices to peak close to $4 a gallon. The government also predicted high prices will cut demand for gasoline at the height of the summer. The agency previously said petroleum consumption would rise by 40,000 barrels a day.
Source:  The Detroit News

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Suzuki Tells U.S. Dealers: Don't Fret

LOS ANGELES -- American Suzuki sought to calm dealers last week after Chairman Rick Suzuki's surprise announcement that he would step down because of faltering sales. Executives held a telephone conference with dealer council members on Wednesday, April 2. The meeting was meant to address concerns about a memo Rick Suzuki sent to employees March 28. The memo, which was not sent to dealers, referred to Suzuki's sliding sales and growing operating losses in the United States. It also said the company will reduce its U.S. work force of 674 by 55 employees through a voluntary retirement plan. Rick Suzuki, 60, also said he would resign soon "to bear responsibility" for the results.
Source:  Automotive News (Subscription required.)

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Strong Demand Drives Rising Car Sales in China

BEIJING -- Chinese demand for autos in the first quarter of 2008 showed resilience, with sales up sharply for big auto makers despite the country's slumping stock market and rising inflation. About 2.58 million vehicles were sold in China from January through March, up 21 percent from a year earlier, according to data from the China Association of Automobile Manufacturers. Strong Chinese demand pushed sales to record levels for auto companies, offsetting some of the problems they are facing in the U.S. as an economic slowdown eats into their business.
Source:  The Wall Street Journal (Subscription required.)

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NADA Update
New Poster Required to Recognize Changes to Family and Medical Leave Act

In late January, President Bush signed into law the National Defense Authorization Act for FY 2008 which amended the Family and Medical Leave Act of 1993 (FMLA).

Effective immediately, the amendment permits an eligible employee:

  1. Who is the “spouse, son, daughter, parent, or next of kin of a covered service member” to take up to 26 work weeks of leave to care for a “member of the Armed Forces, including a member of the National Guard or Reserves, who is undergoing medical treatment, recuperation, or therapy, is otherwise in outpatient status, or is otherwise on the temporary disability retired list, for a serious injury or illness.”
  2. To take FMLA leave because of “any qualifying exigency (as the Secretary shall, by regulation, determine) arising out of the fact that the spouse, or a son, daughter, or parent of the employee is on active duty (or has been notified of an impending call or order to active duty) in the Armed Forces in support of a contingency operation.”

Important:  Dealerships should put on display next to the FMLA poster a new Department of Labor poster informing employees of these changes. The FMLA Poster Insert for Military Family Leave Amendments is available free at http://www.dol.gov/esa/regs/compliance/posters/fmla.htm.

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IRS Issues Guidance on Dealership Cost Segregation Studies

The IRS has issued new technical guidance to its field examiners on dealership cost segregation studies, which many dealerships use to determine the appropriate depreciation period for different components of its facility. The new guidance and a Motor Vehicle Technical Advisor Automotive Alert explaining it are available at www.nada.org/regulations under “Recent Federal Agency Publications.”

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2009 Convention Workshop Proposals Now Being Accepted

Proposals are now being accepted for speakers who are interested in presenting a workshop at the 2009 NADA Convention & Exposition in New Orleans January 24-27. To download the proposal, go to www.nada.org/workshops. Please read through the entire application before submitting. Completed proposals should be postmarked by midnight, April 25, 2008.  For more information, contact NADA Management Education at (703) 821-7227 or workshops@nada.org.

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Lenovo Offers NADA Members Discount on Thinkpad Notebooks

NADA members can save three ways during the month of April:

  • Instant savings with discounted Web pricing
  • Save even more with your NADA discount
  • Extra savings with eCoupon USXSAVE4SPRING at checkout

To take advantage of these savings, visit www.nada.org/ProductsServices/Technology, click on "PC Purchase Program" (member log-in required), then click on Lenovo, or call 800-426-7235. Enter eCoupon USXSAVE4SPRING at checkout for your cumulative discount. Free ground shipping is offered on all Web orders! Visit the Web site often for special limited-time eCoupons.

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STAR Answers Dealers' Questions About DMS Vendors
Standards for Technology in Automotive Retail (STAR) has developed new guidelines when dealers are evaluating Dealer Management Systems Dealer Management System vendors. Visit STAR's Dealer Infrastructure Guidelines (DIG) publication.  To learn what issues to consider when choosing a network provider, click here.
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Quotable
 
GM and Ford were wise to have taken advantage of the formerly robust capital markets to bolster their liquidity. ...they have enough cash and credit to finance their automotive operations -- excluding financing by their lending units -- without tapping the now-skittish capital markets in 2008.

    --  S&P credit analyst Robert Schulz, The Detroit News, April 10
Video Reports
 
April is Automotive Career Month. Learn About Careers in the Auto Industry.

 Learn about careers in the auto industry. 

 NADA/USA Today Innovation Award Goes to "Green" Dealership in Vermont.
 NADA Convention Heads to New Orleans in 2009.
 NADA Foundation Contributes to Canine Companions for Independence.
 2008 Convention Highlights

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