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At a Glance...
Top Stories
Auto Industry Feels the Pain of Tight Credit
Senate Set to Debate Emissions Cuts
Conservative Group Hits Senators on Climate Bill
Dealers Worry That Mercury is a Goner
Ford's Big Cuts Aim for a Honda-sized Lineup
3 Strikes a $3-billion Blow to GM
GM Scraps Big RWD Sedans for Chevrolet and Buick
Chrysler Hopes Ram Gains as Field Falters
Chrysler Reaches Out
For Hybrid Drivers, Every Trip Is a Race for Fuel Efficiency
NADA Update
Ballots for New NADA Director from Georgia due June 13
NADA Insurance Announces Partnership for Hole-in-One Program
NADA Provides Guidance on Reaching Subprime Customers
NADA's Consulting Tosses Dealers a Lifeline
STAR Answers Dealers' Questions on Safeguarding Customer Information
Save on HP Desktops and Printers
Top Stories
Auto Industry Feels the Pain of Tight Credit

The auto industry is getting sideswiped by the housing crisis. Auto lenders and banks, closing their wallets, have prevented hundreds of thousands of consumers from obtaining the financing for a car. Home equity loans, which had been used in at least one of every nine deals, when lenders were more generous, are no longer a source of easy money for many prospective buyers. And used-car prices have fallen nearly 6 percent as repossessed cars and gas-guzzling trucks and S.U.V.’s flood auction lots. Those forces, on top of the softening economy, are putting enormous pressure on the American auto industry as it faces what may be its worst year in more than a decade. The impact on the broader American economy could be profound. Not only is the car a consumer’s biggest purchase after the home, but the auto industry remains one of the nation’s most important economic engines. Within the auto sector, problems stemming from the continuing tightening of credit have already started to spread. Auto lenders like Chase, Capital One and GMAC are finding it harder and more expensive to obtain money for loans. But the auto industry may not suffer the same severe downturn as the housing sector. One reason is that auto lenders have long issued loans expecting that vehicles, as collateral for the loans, start to lose value as soon as they are driven off the lot. In contrast, mortgage lenders during the housing boom believed that home prices would keep rising.
Source:  The New York Times

Senate Set to Debate Emissions Cuts

WASHINGTON -- The international fight to control climate change heads to a new arena in June when the Senate is to debate a bill that could cut total U.S. global warming emissions by 66 percent by 2050. Environmentalists are supportive but want more in the legislation, the business community questions the economic impact, and the politicians who have shepherded it seem gratified that it has managed to get this far -- even though it is unlikely to become law this year. "I look upon this piece of legislation as a great big train in the station and we're trying to get it out," Sen. John Warner, a Virginia Republican who co-sponsored the bill... Sen. Joe Lieberman, a Connecticut independent, is the bill's other chief sponsor. The Bush administration ... has consistently opposed an across-the-board cap-and-trade program for carbon dioxide, a greenhouse gas emitted by fossil-fueled vehicles and coal-fired industries, as well as by natural sources including human breath. But the three major U.S. presidential candidates -- Democrats Hillary Clinton and Barack Obama and Republican John McCain... -- favor curbing carbon emissions, giving proponents of cap-and-trade hope for legislative action in 2009. Under the measure set for Senate debate, known as the Lieberman-Warner Climate Security Act, U.S. greenhouse gas emissions would drop by about 2 percent per year between 2012 and 2050, based on 2005 emission levels. The bill would cap carbon emissions from 86 percent of U.S. facilities, and emissions from those would be 19 percent below current levels by 2020 and 71 percent below current levels by 2050, according to a summary of the bill's details released by the Senate Environment and Public Works Committee. Total U.S. emissions could be reduced by up to 66 percent, the summary said.
Source:  Reuters

Conservative Group Hits Senators on Climate Bill

WASHINGTON -- A conservative, free-market advocacy group will begin airing ads this week pressing Senate Republicans and Democrats to vote against a bill that aims to reduce greenhouse gas emissions. The Club for Growth wants to scuttle a bill by Sens. Joe Lieberman, an independent from Connecticut, and John Warner (R-Va.) that the Senate is scheduled to begin debating next month. Despite the ad campaign, the bill seems to lack the votes needed to overcome a filibuster. With $250,000 in radio and television spots, the Club for Growth is targeting Republican Sens. Elizabeth Dole of North Carolina and Lamar Alexander of Tennessee, and Democratic Sens. Robert Byrd and Jay Rockefeller of West Virginia and Max Baucus and Jon Tester of Montana. Dole, a co-sponsor of the bill, as well as Alexander, Baucus and Rockefeller face re-election this year. "Congress is at it again," a television ad airing in Tennessee says. "This time they're pushing massive new taxes and regulation in the name of global warming. But let's ask ourselves, are the unproven benefits of legislation worth the major job losses, new taxes and increased energy costs that could result?"  The proposed legislation calls for capping carbon dioxide emissions from power plants, transportation and industrial sources with a goal of reducing greenhouse gases by 71 percent by mid-century.
Source:  The New York Times

Dealers Worry That Mercury is a Goner

With no product in the pipeline, Ford dodges questions about the declining brand's fate
After enduring years of speculation about the future of the Mercury brand, dealers are asking Ford Motor Co. for a straight answer to a simple question: Does Mercury have a future? In February, members of the Lincoln Mercury National Dealer Council asked Ford executives to outline their strategy for Mercury. If it has a future, they want to see the products. If it does not, they want to know now so they can manage their business accordingly. According to dealers, Ford agreed. The Dearborn automaker told them it would discuss the fate of Mercury at a dealer meeting that was then planned for April in Las Vegas. Company sources say no such commitment was made. Either way, Ford canceled that meeting. The company is now planning a September meeting in Detroit -- a meeting dealers hope will provide a definitive answer to their question. "The company is in (the) process of developing a strategy and has committed to communicating this plan to the Lincoln Mercury dealer network in the fourth quarter," the council said in a letter to its members dated April 28. In private conversations with The Detroit News, several Mercury dealers said they have grown weary of carefully nuanced statements from Ford executives like: "We have no plans to kill Mercury at this time." But they acknowledge that Ford is in a difficult position.
Source:  The Detroit News

Ford's Big Cuts Aim for a Honda-sized Lineup

DETROIT — Ford Motor Co. is undergoing wrenching production changes — fewer trucks, a lot more cars — to become a little bit more like Honda. Last week, Ford announced plans to slash truck production while boosting output of the Ford Focus and Fusion, and also the Mercury Milan. Asked whether Ford's model mix should be more like that of Toyota and Honda, Ford CEO Alan Mulally said: "Absolutely. We just don't have enough of those small or medium-sized vehicles yet, and that's what we need to concentrate on."
Source:  Automotive News (Subscription required.)

3 Strikes a $3-billion Blow to GM

Three UAW strikes against General Motors Corp. and one of its largest suppliers cost the Detroit automaker more than $3 billion before taxes, the automaker said Friday. In the second quarter alone, the three-month strike at Detroit supplier American Axle & Manufacturing Inc., which ended Thursday night, is expected to drag down GM's earnings by $1.8 billion before taxes, GM said in a federal filing. That's on top of $800 million GM said it lost because of the strike in the first quarter. Despite trying to stay out of the protracted strike at American Axle, GM ultimately plans to pay $215 million into the settlement between the UAW and the auto supplier. Union members ratified the deal, which included wage cuts in exchange for buy-downs and buyouts and a pension freeze, with a 78 percent vote.
Source: Detroit Free Press

GM Scraps Big RWD Sedans for Chevrolet and Buick

DETROIT — General Motors has killed plans to develop large rear-drive sedans for Chevrolet and Buick. The result: The next-generation Chevrolet Impala will remain front drive. "Serious fuel economy issues" killed the rwd vehicles, which were expected to debut around 2011, says a GM source. No other large-car programs are expected to be scrapped, says another GM source familiar with the programs.
Source:  Automotive News (Subscription required.)

Chrysler Hopes Ram Gains as Field Falters

DETROIT -- Chrysler LLC is betting its new Dodge Ram pickup truck, coming this fall, can pull customers from rivals such as Ford Motor Co. and General Motors Corp. But it is unclear whether increased share in the truck segment will help the struggling automaker much at all. Sales of pickup trucks have plummeted in recent weeks, prompting an announcement from Ford last week that it is slashing truck production and no longer believes it will meet its goal of returning to profitability in 2009. Even if the redesigned Ram gains market share, the deep drop in overall truck sales may leave Chrysler selling fewer Rams than it had expected. "I don't think there's any question that we can gain market share," said Ken Zangara, a Dodge dealer in Albuquerque, N.M. "The question is how big will the overall market be?" In a recent interview, Chrysler Vice Chairman Jim Press said he is confident Ram sales will rise in 2009 after the redesigned model hits the market. But he acknowledged the truck could face challenges in the long term because of the consumer shift to cars. It is unclear, he said, whether sales of the new model over its five- to six-year life cycle will exceed that of the old version. "The jury's still out," Mr. Press said.
Source:  The Wall Street Journal (Subscription required.)

Chrysler Reaches Out

Firm wants to form more alliances to expand
NORFOLK, Va. -- Chrysler LLC is open to buying models from other automakers similar to its agreement with Nissan, and has sped up its plans for more fuel-efficient models in light of fuel prices, CEO Bob Nardelli said Friday. Nardelli also said the automaker was closely monitoring the economy, but didn't see the need to make drastic changes because of record oil prices or surging commodity costs as Ford Motor Co. did Thursday. "We thought we were being extremely aggressive in our conservative view" of 2008, Nardelli said. "As it turns out we may have been spot-on." Chrysler and Nissan Motor Co. announced a deal last month in which the two automakers will share some specific vehicles, allowing Chrysler to get a Nissan-made small car to sell under one of its brands in North America and elsewhere. In return, Chrysler will build a pickup for Nissan to sell in the United States. Nardelli said that any further decisions would be based on market demand, and if Chrysler couldn't build a model itself, it would have few worries of selling another automaker's vehicle under its brand. He did not name any automakers. "We will not suffer from the not-invented-here syndrome," Nardelli said. "If we can have similar arrangements ... and it makes financial sense and supports our dealer network relative to what customers are telling them they want, we're going to go do it."
Source:  Detroit Free Press

For Hybrid Drivers, Every Trip Is a Race for Fuel Efficiency

The Prius, and other hybrids with similar displays, has triggered on-the-spot learning that has the potential to change energy-consumption habits. "Once you start making fuel consumption more visible, you have something that comes to the forefront of people's minds instead of lurking in the background," said Sarah Darby, a researcher who studies energy feedback technologies at the University of Oxford's Environmental Change Institute. In the Prius and other hybrids with energy displays, drivers can see what specific actions mean for their mileage. In some ways, it is like children learning to color in between the lines, with the teacher standing over their shoulders. Aggressive acceleration after a stoplight -- that's bad. The monitor will show mpg going down. Suddenly slamming the brakes -- also bad. Coasting to a stop -- good. That tactic lets the engine shut down, saving gas. Hills -- oh, they are real bad. Tom Igoe, a physical-computing researcher at New York University, said the Prius mpg display is one of the best examples of technology "where green meets information systems." "For a long time," he said, "we have known that people will change their habits if they are exposed to feedback in real time."
Source:  The Washington Post

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NADA Update
Ballots for New NADA Director from Georgia due June 13

Ballots for nominating dealers to serve as the NADA director from Georgia have been mailed to members in that state. Nomination ballots must be returned postmarked by Friday, June 13. If two or more nominees receive at least 10 percent of the votes and agree to seek election, ballots will be mailed Friday, July 11 to be returned postmarked by Friday, August 1. The candidate elected will take office immediately to serve the remaining term which expires February 2010.

NADA Insurance Announces Partnership for Hole-in-One Program

NADA Insurance has announced that it has formed a partnership with the Pennsylvania Automotive Association (PAA) to be the exclusive provider of hole-in-one insurance for that group. About 1,200 PAA dealer members will obtain their insurance through ACECO, NADA Insurance’s hole-in-one program.

"At PAA, we are always looking for ways to enhance our benefits," said PAA Vice President Chief Operating Officer John Devlin. "ACECO offers our members affordable and convenient hole-in-one insurance, so the decision to go with them was easy."

NADA Insurance Vice President Lin Peacock said, "This partnership is a win-win for both parties. We look forward to servicing PAA with the same high level of service that we provide to NADA members."

Dealer groups and state auto associations interested in partnering with NADA for their hole-in-one insurance are encouraged to contact Peacock at lpeacock@nada.org.

NADA Provides Guidance on Reaching Subprime Customers

Damaged credit can happen to anyone. As many as three out of five auto consumers suffer from damaged credit. Dealers could be leaving a great deal of money on the table—perhaps hundreds of thousands of dollars a year in additional gross profit—if they ignore the subprime market.
 
That’s where a special finance operation comes in. Call it subprime, non-prime, secondary or special finance—this large and growing segment of the market needs dealers who are prepared to sell credit-challenged customers the vehicles they need at prices they can afford.

NADA Management Education’s new DVD, Creating a Special Finance Operation: Doing it Right, shows dealers how to be prepared. The four-segment training video, plus an information-packed study guide, is available for $169. Go to www.nada.org/specialfinance to see a preview, log in and order.

NADA's Consulting Tosses Dealers a Lifeline

NADA’s Lifeline Dealership Consulting provides dealers with an objective evaluation and advice on operations and performance. NADA 20 Group and NADA Dealer Academy consultants work with dealership management personnel to achieve specific goals determined by a telephone interview or a site visit.

On site, a NADA consultant would meet with department managers to develop remedial action plans. The consultant also provides managers with various tools to assist performance measurement and tracking, and develops a written report with recommendations for improvement.

"We consider NADA’s Lifeline Dealership Consulting an investment in our dealership," said Frankie Korschun, general manager of Frema Motors Inc. in Goldsboro, N.C. "I would highly recommend the program to anyone who needs an outside point of view." For more information, call NADA's Lifeline Dealership Consulting at 1-800-248-6232, ext. 4745.

STAR Answers Dealers' Questions on Safeguarding Customer Information

 

Standards for Technology in Automotive Retail (STAR) has developed new guidelines to help dealers with Safeguarding Customer Information. Visit STAR's Dealer Infrastructure Guidelines (DIG) publication for more information. To learn what is recommended for Safeguarding Customer Information, click here.

Save on HP Desktops and Printers

HP is offering NADA members a free 17-inch diagonal wide screen flat panel monitor with select PC desktops. Members can save $200 instantly on HP Color LaserJet CP4005n and Color LaserJet CP4005dn. This special ends May 31, 2008. To take advantage of these savings, go to www.nada.org/ProductsServices/Technology, click on "PC Purchase Program," then click www.hp.com/go/promos/nad1 (member login required).

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Quotable
 
"It is a bleak picture, and it all hinges on the availability of financing. The whole universe related to the auto industry is touched in some way — parts suppliers, manufacturers, salespeople, trucking people, the paint and metals industries. Even semiconductors."

   
-- William Ryan, a financial analyst at Portales Partners, referring to the tightening of auto credit and its effect on the broader economy, The New York Times, May 27


"Absolutely. We just don't have enough of those small or medium-sized vehicles yet, and that's what we need to concentrate on."

    -- Ford CEO Alan Mulally asked whether Ford's model mix should be more like that of Toyota and Honda, Automotive News, May 26
Video Reports
 
NADA's Annual Industry Relations' Symposium Brings Dealers and Automakers Together
NADA's 2008 Industry Relations Symposium.
Field of Dreams: Auto dealers show their commitment to New Orleans.  NADA Chief Economist Paul Taylor delivers '08 sales forecast. 

NADA returns to New Orleans for its 92nd annual convention.  

Click here for more NADA TV video reports.
 
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