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Monday, May 5, 2008 RSSSEND TO A FRIENDPRINT
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At a Glance...
Top Stories
Auto Industry Focuses on States
Mpg Plan Fuels States-rights Battle
Opinion: Market Trumps Congress When it Comes to Fuel Economy
Obama Hits Big 3 on SUVs
Driven to Efficiency
If Chrysler Calls About Your Service, it Could be the CEO
Tesla Rolls Out its Long-awaited Electric Sports Car
Career Day Introduces Students to Car Dealership
NADA Update
NADA to Provide Members with Free Red Flags Educational Guide
New Seminar Focuses on Tax Issues Affecting Dealers
Automotive Careers Online Offers Job Postings at a Discount
IRS to Issue Guidance on Special 50-Percent Depreciation Allowance
Dell Deals Available to NADA Members for Limited Time
STAR Answers Dealers' Questions
Top Stories
Auto Industry Focuses on States

Aim Is to Head Off Gas-Emission Laws Like California's
WASHINGTON -- A state-by-state battle by auto makers and dealers to dissuade lawmakers from following California's move to regulate greenhouse-gas emissions is beginning to bear fruit. The focus on state capitals reflects how business groups are looking beyond the Bush presidency to a new administration in Washington that could be more likely to defer to state efforts to fight global warming. A law adopted by California in 2002 would effectively require the auto industry to cut its greenhouse gas emissions by 30 percent, equivalent to an average fuel economy level of roughly 35 miles per gallon by 2016, four years earlier than a recently passed federal energy law would require. Auto makers worry that the California law will force them to restrict sales of certain popular models to achieve compliance. Under federal fuel-economy regulations, auto makers have the flexibility to average their sales in one state or region with sales in other states or regions. Under California's rules, compliance in each state would be determined by the vehicles sold in that state. To make their case, industry lobbyists are turning to dealers to help carry the message. "No state should set national policy -- we've got California leading the train," says Dave McCurdy, president of the Washington-based Alliance of Automobile Manufacturers, whose members include General Motors Corp., Ford Motor Co., and Toyota Motor Corp. In Minnesota, car dealers have gotten help from ethanol advocates in opposing a bill in the state legislature that would replicate California's law. In Arizona, state legislators are moving to block Gov. Janet Napolitano from regulating greenhouse-gas emissions, with encouragement from the state's car dealers. In Montana, Gov. Brian Schweitzer came out against state-level regulation of automobile greenhouse-gas emissions after a visit in March from Mr. McCurdy. Industry executives also are exhorting dealers to speak up against state-level fuel-economy and greenhouse-gas rules. "If we have to focus our efforts on meeting state targets, instead of a single national standard which is already very aggressive, and is going to be tough to meet, then we're not going to accomplish everything we can," GM Chairman and Chief Executive Rick Wagoner said in a February speech to the National Automobile Dealers Association. 
Source: The Wall Street Journal (Subscription required.)

[Editor's Note: Dealers should continue to urge their legislators to support the single, national fuel economy standard of at least 35 mpg by 2020 signed into law last year which achieves real and quantifiable fuel economy and environmental gains. Congress should reject a multi-state approach to fuel economy increases -- and proposed legislation (S. 2555, H.R. 5560 and S. 2806) -- which fails to look at the national economic impact, limits consumer choice and ignores passenger safety concerns. For more information visit www.nada.org/CAFE.] 

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Mpg Plan Fuels States-rights Battle

WASHINGTON — Just when it seemed like the political war over state regulation of greenhouse gases from vehicles could not intensify, it did. The Bush administration's proposed fuel economy rules for the 2011-15 model years include an assertion that the new rules pre-empt state-by-state controls on greenhouse gas emissions. Last month, NHTSA proposed the first phase of higher standards for 2011-15. The agency asserted that allowing states to enforce their own greenhouse gas rules would keep it from following Congress' direction on the law. [S]tate greenhouse gas limits would curtail fuel use without regard for safety considerations, NHTSA said. But industry leaders say that each state that adopts the rules would have unique requirements, depending on its sales mix. Dave Zuchowski, vice president of national sales for Hyundai Motor America, said at an industry conference here last week that state rules are “not manageable.”
Source: Automotive News (Subscription required.)

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Opinion: Market Trumps Congress When it Comes to Fuel Economy
by Daniel Howes

News flash: Skyrocketing gas prices are driving historic shifts in the habits of car buyers, pushing them away from thirsty pickups and full-size SUVs and into four-cylinder compacts. What a surprise. Might all the smart people behind tougher federal Corporate Average Fuel Economy rules be watching? If they are, do they understand what we are witnessing? Namely, this: It's not arbitrary mileage goals, mostly unhinged from engineering reality and focused on a handful of companies, that are dramatically changing the behavior of the driving public. It's the price of fuel, stupid. Cars outsold trucks in April for the first time in a generation, according to industry figures compiled by Autodata Corp., and four-cylinder powered cars outsold those with six cylinders under the hood. "It's easily the most dramatic segment shift I have witnessed in the market in my 31 years here," George Pipas, Ford Motor Co.'s chief sales analyst, told the New York Times. Which ought to say something to the lemmings -- including presidential contenders John McCain, Barack Obama and Hillary Clinton -- who think the answer to America's shifting fuel-economy goals is a complex web of national and state rules that tells automakers what to build, whatever the market dynamics now and in the future. If the presumed national goal is to reduce consumption by getting more Americans behind the wheel of smaller, more fuel-efficient vehicles, don't the past few months pretty much show that higher gas prices are the fastest way to get there? Um, yeah. The market did it, and the market will keep working its rational magic. Ford Focuses, Honda Fits and Chevy Aveos will roll out of showrooms at record rates so long as gas prices hover at historic highs and achieve what years of posturing and bruising battles in Washington have mostly failed to deliver.
Source: The Detroit News

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Obama Hits Big 3 on SUVs

Illinois senator cites Detroit 'mistake,' while Clinton defends plan to suspend gas tax.
INDIANAPOLIS -- Sen. Barack Obama defended his opposition to a temporary break from the federal gas tax Sunday and put part of the blame for the nation's dependence on imported oil on the domestic auto industry. Repeating criticisms of the Detroit carmakers he has made throughout the campaign, Obama faulted them for failing to build more fuel-efficient cars during an appearance on NBC's "Meet the Press." "Detroit ended up making investments in SUVs and large trucks because that's where they perceived a competitive advantage and that's where they felt they could make the most profit," the Illinois senator told host Tim Russert. "I think it was a mistake for them not to plan earlier, and now we're seeing a huge growth in fuel-efficient cars that is benefiting the Japanese automakers and Detroit is getting pounded some more." During a dueling appearance on ABC's "This Week with George Stephanopoulos," Clinton disputed Obama's suggestions that she and Republican candidate John McCain were the same because they both support a gas tax holiday. "Sen. McCain has said, 'Take off the gas tax, don't pay for it, throw us further into deficit and debt.' That is not what I've proposed," Clinton told ABC, adding that she wants the oil companies to pay the gas tax instead of consumers this summer.
Source: The Detroit News

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Driven to Efficiency

Gas prices forcing some to consider smaller, greener cars
At the Fitzgerald Auto Mall [last week], Marlaina Kauffman had her eye on a white Chevrolet Equinox. The small crossover utility vehicle's high gas mileage sweetened the deal. Local car dealers say an increasing number of customers are looking for smaller, fuel-efficient vehicles as gas prices continue to climb. Nine percent of Maryland drivers surveyed are driving more fuel-efficient cars, according to a study released last month by AAA Mid-Atlantic. More than half -- 54 percent -- are driving less often, with 6 percent taking mass transit or carpooling more. The steep increases [of gasoline prices] have led to a spike in the sale of smaller cars, said Shockley Honda general manager Ken Steinbauer. "Particularly in the used car marketplace, fuel-efficient, under-$10,000 cars are being hoarded right now," he said. "And the SUVs and trucks are being traded in in droves." Paul Taylor, chief economist for the National Automobile Dealers Association, said prices for midsize, four-cylinder used cars are up $600 in the past four months. SUV prices have been falling for seven months. Sales of new traditional large trucks and SUVs, however, continue to be flat, [Todd] Otis, [general manager of Ideal Buick GMC Hyundai] said. Sales have not recovered since gas prices began to rise a couple of years ago. He said the dealer still accepts SUVs and large trucks as trade-ins, but has stopped seeking them at auction. Taylor said the trade-in process benefits both dealers and customers, but dealers will only be able to pay what they can recover in the wholesale market. "When a lot of owners try and trade (SUVs) in at the same time, that's going to result in lower prices than the customers desire," he said.
Source: The Frederick News-Post

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If Chrysler Calls About Your Service, it Could be the CEO

It's Chrysler calling. The Auburn Hills automaker's top 300 executives and directors are now going to be calling, on average, one customer a day to inquire about their satisfaction under a new Customer First program unveiled this week to senior managers, according to an internal e-mail obtained by the Free Press. Chrysler Chief Executive Officer Bob Nardelli and Chrysler presidents and vice chairmen Tom LaSorda and Jim Press are to participate ... The Chrysler e-mail quoted Nardelli: "It's important that all of our employees understand that sales and customer service are not merely activities of a particular department -- they're everyone's responsibility."
Source: Detroit Free Press

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Tesla Rolls Out its Long-awaited Electric Sports Car

LOS ANGELES -- ... After several years of development, the [Tesla] Roadster - with sleek lines like a Ferrari or Porsche and a sticker price of $109,000 - officially moves from the drawing boards to the market next week when Tesla's first store opens. It's near the University of California, Los Angeles ... The next store is to open in a couple months near Tesla's headquarters in the Silicon Valley city of San Carlos, where the car was developed with venture capital of more than $40 million from such investors as Google Inc. founders Larry Page and Sergey Brin. More stores are planned for Chicago, New York and other cities by early next year. Although a fully loaded model can set a buyer back as much as $124,000, that's still cheap compared with a high-end Ferrari. And its 6,831-cell lithium-ion battery pack gives off no emissions. The car goes from 0 to 60 mph in just under four seconds and tops out at 125 mph. It goes 225 miles on one charge and can be fully recharged in 3.5 hours, which Tesla officials say should allow most people to drive it to work and back and recharge it at night like a cell phone. Some critics have expressed concerns about the durability and safety of the lithium-ion battery, which weighs about 1,000 pounds, more than a third of the entire weight of the 2,700-pound Roadster, whose body is made up of carbon fiber materials. Tesla officials respond that the car has passed all required safety tests. They say the battery should last for about 100,000 miles of driving.
Source: Associated Press

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Career Day Introduces Students to Car Dealership

There can be more to a car dealership than sales, a lesson that [Winchester, Va.] area high school students learned for themselves last week. As part of Automotive Career Month, sponsored by the National Automobile Dealers Association, a few dozen students took behind-the-scenes tours of Shenandoah Ford on Friday. The four-hour day opened with a video for the entire group, but within the first hour the teenagers split into groups for tours and technical workshops. The service area of the tour led the students through the dealership's shop, with mechanics at work in their various jobs. The students also learned about stocking and inventory from Parts Manager Jimmy Saffell, who said the job became much more streamlined once the department began to use computers. The career day is designed to attract students to apply for jobs in dealerships, which Jeremy Smith, service director for Shenandoah Ford, said can offer well-paying and interesting positions. In their senior year of high school, students can apply for internships. Currently, Shenandoah Ford has one senior intern working with a fully-certified technician, Smith said, whose role is almost like that of a mentor. "It's almost like the NFL draft, and we're getting the best of the best," Smith said. "The biggest thing for those kids is getting a foot in the door and getting into the dealership. Then they can be anything."
Source:  The Warren Sentinel

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NADA Update
NADA to Provide Members with Free Red Flags Educational Guide

Dealers and other creditors and financial institutions must comply with the FTC Red Flags Rule by Nov. 1, 2008.  To assist dealers with this new requirement, NADA will mail to its members a free educational guide by August 1, 2008 that will explain dealers' responsibilities under the new rule and provide a template to assist dealers in preparing the required written Identity Theft Prevention Program. Additional information will be available from fee-based webinars that NADA will conduct from 1-3 p.m. EST on August 26, 2008 and Sept. 23, 2008. (Registration information will be announced soon.)

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New Seminar Focuses on Tax Issues Affecting Dealers

Online discussion offers rare opportunity to hear directly from the IRS

NADA is offering dealers an opportunity to get up-to-the-minute, practical information on IRS issues affecting the retail business through a Web-based seminar addressing breaking news on dealer tax issues.

“This is a rare opportunity to learn directly from the IRS about dealer-specific tax developments that have occurred even since our last IRS seminar held in February at the NADA Convention,” said Paul Metrey, NADA director of regulatory affairs, who will moderate the online discussion.

Terri Harris, IRS motor vehicle technical adviser, will present information on breaking tax developments applicable to dealers—including the latest on UNICAP, the new Vehicle Pool Method for LIFO accounting, recent IRS tool and equipment plan enforcement, and just-released technical guidance on cost segregation studies.

Dealers, CFOs, controllers, CPAs and others involved in tax planning for auto dealerships are encouraged to participate in the seminar from 1-3 p.m. (ET) on Thursday, May 8. About half the time will be set aside for dealer-related tax questions from participants.

Cost of the seminar is only $199 per computer connection. An unlimited number of attendees may participate in the seminar using a single computer connection. Registrants will have access to the seminar recording for up to six months.

Register online at www.nada.org/seminars or call 800-248-6232, ext. 7273.

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Automotive Careers Online Offers Job Postings at a Discount

Automotive Careers Online is NADA’s dedicated job board—and the automobile retailing industry’s exclusive resource for online employment connections.

Just launched, Automotive Careers Online is a brand new benefit of NADA membership. Only NADA members may post jobs—for a fraction of the cost of commercial boards and newspapers that don’t necessarily reach the dealership audience.

Job posting packages start as low as $200 for a 30-day listing. Email alerts advise you when candidates matching your skills criteria post their resumes.

The job board is open to all job seekers, who can post their resumes and search available jobs absolutely free. Since this is a dedicated service, candidates are looking specifically for dealership jobs and are likely to be highly qualified.

To learn more, post jobs, and search listings, visit www.automotivecareersonline.com.

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IRS to Issue Guidance on Special 50-Percent Depreciation Allowance

The Economic Stimulus Act of 2008 includes more than direct payments to individuals.  It also provides several incentives to businesses, including a special 50-percent depreciation allowance for 2008 purchases, an increase in the depreciation limits on business vehicles, and an increase in the "Section 179" small business expensing limitation.

The 50-percent "bonus depreciation" allowance for qualifying purchases is available to all businesses and applies to most types of tangible personal property and computer software acquired and placed in service in 2008.  It allows taxpayers to deduct 50 percent of the cost of qualifying property in addition to the regular depreciation allowance that is normally available.  

The IRS recently announced that it will issue guidance on how the special 50-percent depreciation allowance can be used to make capital investments this year (as well as guidance on the new increased businesses expensing limitation.)  Recognizing that there will be questions in the meantime, the IRS stated that businesses may rely on the regulations previously issued regarding bonus depreciation (found at Treas. Reg. Sec. 1.168(k)-1) until the guidance is issued.

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Dell Deals Available to NADA Members for Limited Time
Dell is offering NADA members discounts from 17 percent to 40 percent on select desktops, laptops and printers, and most include free shipping. These discounts will be available for a limited time only. Call 1-888-506-3355 or go to www.nada.org/ProductsServices/PC+Purchase+Program (member login required) and click on the Dell link to take advantage of this offer. NOTE: To receive the NADA discount you MUST call 1-888-506-3355.
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STAR Answers Dealers' Questions

Standards for Technology in Automotive Retail (STAR) has developed new guidelines to help dealers evaluate Internet Content Filtering. To learn what is recommended for general maintenance of a hardware based system, click here. To download STAR's Dealer Infrastructure Guidelines (DIG), click here.

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Quotable
 
"No state should set national policy -- we've got California leading the train."

"The dealers deserve a lot of credit" for helping lobby state policy makers. They're on the ground and interface with the consumers everyday."


    -- Dave McCurdy, president of the Washington-based Alliance of Automobile Manufacturers, whose members include General Motors Corp., Ford Motor Co., and Toyota Motor Corp., The Wall Street Journal, May 5


"When a lot of owners try and trade (SUVs) in at the same time, that's going to result in lower prices than the customers desire."


    -- Paul Taylor, NADA chief economist, The Frederick News-Post, May 1


"It's almost like the NFL draft, and we're getting the best of the best. The biggest thing for those kids is getting a foot in the door and getting into the dealership. Then they can be anything."


    -- Jeremy Smith, service director for Shenandoah Ford, referring to Automotive Career Month events, The Warren Sentinel, May 1
Video Reports
 
Students Learn About Automotive Careers at the DC Auto Show. 

 Students learn about automotive careers. 

 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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