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Top Stories
Feds Fast-Track Loan Plan for GM
Mulally: Ford Bankruptcy is Not an Option
GMAC Seeks Access to Bank Bailout Funds
Big Car Retailers Write Off Domestic Brands
Ghosn: Financial Crisis Will Curb Automaker Alliances
Japan's Toyota, Hit Hard Now But Equipped to Steer Clear
Honda's Quarterly Profit Drops; Yearly Forecast Trimmed
Kerkorian Dumps More Ford Stock
NADA Update
NADA Insurance Offers New Plan to Protect Dealerships from Identity Theft Liability
Red Flags Enforcement Delayed Six Months
Player Slots for Pre-Convention Charity Golf Tournament Filling Up
Scam Alert: Spark Plug Orders
STAR Answers Dealers' Questions About Internet Access Methods
HP Offers NADA Members Small Business 'Smart Deals'
Top Stories
Feds Fast-Track Loan Plan for GM

Funding would help automaker seal deal with Cerberus; Ford, Chrysler lobby for aid as well
WASHINGTON -- The U.S. Energy Department is intensifying its effort to begin lending money through a $25 billion auto loan program that could be a critical source of funding for General Motors Corp. GM has been lobbying the government for financial aid to help it conclude a deal with Cerberus Capital Management LP for a possible merger or other tie-up with Chrysler LLC, which is majority-owned by Cerberus. The Energy Department is circulating draft regulations for the loan program, a critical first step in getting the money flowing that was not expected to happen before the end of next month. The draft included several questions that still must be resolved, said an official who reviewed the document, but final rules could come as early as next week. "The government recognizes that it needs to be involved, and they have two big pots of money to work with," said David Cole, chairman of the Center for Automotive Research in Ann Arbor, referring to the auto loan program and the $700 billion bank bailout. "The idea is that potentially Chrysler could go down, and it's a lot better if it goes down in somebody's arms," he said.
Source:  The Detroit News

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Mulally: Ford Bankruptcy is Not an Option

DETROIT -- Despite a declining U.S. auto market that is prolonging Ford Motor Co.'s losses, bankruptcy protection isn't an option for the automaker, CEO Alan Mulally says. "It absolutely doesn't work for us. It doesn't make sense to us," Mulally told Automotive News in an interview today. "People aren't going to buy cars from bankrupt companies when they have great choices." Ford has completed most of the restructuring needed to make it competitive, Mulally said. The automaker intends to "absolutely stay on this plan and restructure to get back to profitability as quickly as we can in this changing world and continue to invest in the new products for near- and longer-term growth and value creation," he said. "We're just going to do whatever it takes to do that."
Source:  Automotive News (Subscription required.)

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GMAC Seeks Access to Bank Bailout Funds

GMAC LLC, the big lender co-owned by General Motors Corp. and investor group Cerberus Capital Management LP, is seeking to become a bank holding company, a move that would allow it to gain access to a piece of the government's $700 billion financial rescue plan, according to people familiar with the talks. As part of those discussions, Cerberus, which also controls auto maker Chrysler LLC, has sought to swap most of its Chrysler holdings for a larger share of GMAC, the home and auto lender. Cerberus now controls 51% of GMAC to GM's 49%. It now appears the GM-Chrysler talks are being structured specifically to ensure Cerberus and GM can take advantage of financial bailout programs offered by the Treasury Department and the Federal Reserve, those people said.
Source:  The Wall Street Journal (Subscription required.)

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Big Car Retailers Write Off Domestic Brands

DETROIT -- Two big auto dealership chains delivered more bad news for domestic car makers: Many Detroit auto franchises have become practically worthless. In third-quarter earnings reports Tuesday, Group 1 Automotive Inc. and Sonic Automotive Inc. announced charges of a combined $51 million reflecting declining "franchise value" for stores that sell brands from General Motors Corp., Ford Motor Co., and Chrysler LLC. Group 1, like other big dealer groups, has been selling domestic dealerships over the last few years. It still has a "handful" that it would like to sell, but right now deals are unlikely...
Source:  The Wall Street Journal (Subscription required.)

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Ghosn: Financial Crisis Will Curb Automaker Alliances

TOKYO -- Carlos Ghosn, CEO of Nissan Motor Co. and Renault SA, said the global financial crisis may deter automakers from forming partnerships. The key to surviving the credit crunch is having plenty of cash on hand, Ghosn told a business management forum here today. Companies aren't "going to be risking cash for a strategic move while they have absolutely no clue how long this crisis or meltdown is going to last," he said. Ghosn also predicted that the U.S. market downturn will last at least through 2010. U.S. sales dropped 12.8 percent through September from a year earlier, and some forecasters have predicted that October sales totals may be the lowest in more than 17 years.
Source:  Automotive News (Subscription required.)

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Japan's Toyota, Hit Hard Now But Equipped to Steer Clear

TOKYO -- In Japan, the global financial crisis seems to have singled out some of the world's best-known and best-managed companies for an especially bloody thrashing. Consider Toyota Motor Corp., whose stock has lost almost two-thirds of its value since February of last year. Like many Japanese exporters, Toyota has been doubly clobbered this fall, first by collapsing consumer demand in the United States and Europe, and then by the exploding value of the yen against the dollar and the euro. Still, the automaker is exceptionally rich and well positioned for the future. It has about $47 billion in liquid assets, the lowest manufacturing costs in its industry and global leadership in fuel-sipping hybrid cars such as the Prius. "This downturn will probably be to the long-term benefit of Toyota," said Merner at Atlantis Investment. "They have high profit margins and lots of cash. There is going to be a big shakeout in the auto industry. Toyota is in better shape now than ever before to survive it."
Source:  Washington Post

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Honda's Quarterly Profit Drops; Yearly Forecast Trimmed

Honda Motor Co. opened a gloomy earnings season for automakers Tuesday, reporting a 41 percent plunge in profit for the July-September quarter and cutting its forecast for the year. Falling revenue, coupled with the negative impact of the Japanese yen's rise, cut its quarterly profit to $1.2 billion, Japan's second-largest automaker said. Honda's results underscore the hardships facing the industry. With a lineup of reliable and fuel-efficient models such as the Civic and Fit, the automaker seemed better equipped than its Japanese and U.S. rivals to cope with a worsening environment. The steep decline in U.S. auto sales to 15-year lows has hurt the Japanese as well as Detroit's Big Three.
Source:  The Detroit News

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Kerkorian Dumps More Ford Stock

With one week to go before Ford Motor Co. reveals how much damage it has suffered during the third quarter, billionaire Kirk Kerkorian continues dumping his shares in the Dearborn automaker at a loss. On Tuesday, Kerkorian's Tracinda Corp. revealed in a filing with the U.S. Securities and Exchange Commission that it had reduced its holdings in Ford to 107.1 million shares, or 4.89%, of the company's outstanding stock. The latest sale brings his Ford losses to more than $167 million, according to calculations by the Free Press.
Source:  Detroit Free Press

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NADA Update
NADA Insurance Offers New Plan to Protect Dealerships from Identity Theft Liability

NADA Insurance is offering a new Identity Theft Insurance Plan to NADA members. The plan will provide dealers and its employees with the financial resources needed in case they are implicated in an identity theft incident. The wide use of data processing, electronic loan origination, e-signature and Web-based transactions has dramatically increased the incidence of identity theft. Since 2005, more than 88 million Americans have been victims of identity theft. “Identity theft is one of the fastest growing crimes in America,” says Lin Peacock, vice president of NADA Insurance. The insurance plan covers the following identity theft expenses:

• Legal Liability
• Regulatory Action Expenses
• Notification Costs
• Identity Theft Recovery Services
• Defense Costs
• Crisis Expenses

“An identity theft case could cost your dealership hundreds of thousands of dollars and negatively impact your dealership’s reputation,” Peacock added. The new plan also protects dealers and employees individually in case a customer files a civil suit against specific employees. The plan’s coverage ranges from $100,000 to $5 million. For more information or to apply for coverage, contact NADA Insurance at (888) 302-4342 or go to www.nadainsurance.com.

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Red Flags Enforcement Delayed Six Months

The FTC has announced a six-month “delay of enforcement” of the Red Flags rule. Dealers and other creditors now have until May 1, 2009 to develop and implement a written identity theft prevention program (“ITPP”). This does not affect the address discrepancy rule, which continues to have an effective date of Nov. 1, 2008.

Dealers who have already drafted and implemented their ITPP are not required to do anything. NADA encourages those dealers who have not yet finalized their ITPP to complete their work as soon as possible in advance of the new deadline. 

All NADA members received a copy of A Dealer Guide to the Red Flags and Address Discrepancy Rules: Protecting Against Identity Theft (http://eseries.nada.org/scriptcontent/ProductDetail.cfm?pc=MEDPRL50E) in August 2008. For more information, see http://ftc.gov/opa/2008/10/redflags.shtm and http://ftc.gov/os/2008/10/081022idtheftredflagsrule.pdf.

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Player Slots for Pre-Convention Charity Golf Tournament Filling Up

Registrations for the "Dealers for Charity" golf tournament in New Orleans are starting to roll in, reports Lin Peacock, vice president of NADA Insurance. The tournament, hosted by NADA’s hole-in-one insurance partner, ACECO, is slated for Friday, Jan. 23, 2009 before the opening of the NADA Convention and Exposition. Proceeds from the event will benefit the Brees Dream Foundation, a charitable organization founded by New Orleans Saints quarterback Drew Brees. The tournament will be held at TPC Louisiana, the only PGA Tour course in the state. The event is open exclusively to NADA members. Registration fees are $300 per player. Participation is limited to the first 144 golfers who sign up. The registration deadline is Nov. 9. Visit www.ACECOinsurance.com and click on the "Dealers for Charity" logo to sign up.

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Scam Alert: Spark Plug Orders

An NADA member has recently reported receiving several fraudulent orders for parts. In this case, multiple orders for 800 spark plugs were placed over the phone and paid with stolen or bogus credit cards. The orders were originally scheduled to be delivered via UPS or FedEx to a U.S. location, but the shipments were later redirected to an address in Nigeria. NADA advises all dealerships’ fulfillment staff to scrutinize all parts orders from unknown clients.

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STAR Answers Dealers' Questions About Internet Access Methods

 

Standards for Technology in Automotive Retail (STAR) has developed new guidelines to to help dealers evaluate their Internet Access Methods. Visit STAR's Dealer Infrastructure Guidelines (DIG) publication for more information. To answer the question "How do I make sure I get a business-grade connection?" click here.

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HP Offers NADA Members Small Business 'Smart Deals'

NADA members can save up to 30 percent on HP's dc5750 desktop PCs or $791 on HP's Compaq 2710p. This offer is valid on call-in orders only. To take advantage of this offer, call (800) 888-0365 and mention passcode "NAD1." To see more "Smart Deals," visit NADA's PC Purchase Program online at www.nada.org/Technology/PCpurchaseprogram (member login required), then click on www.hp.com/go/promos/nad1 then "Smart Deals" on left navigation bar.

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Featured Video
 

Registration for the NADA convention in New Orleans Jan. 24-27 is open. Click here to see just how much progress New Orleans has made since Katrina.


More Video Highlights

Quotable
 
"The government recognizes that it needs to be involved, and they have two big pots of money to work with."

   
-- David Cole, chairman of the Center for Automotive Research in Ann Arbor, referring to the auto loan program and the $700 billion bank bailout, The Detroit News, Oct. 29


[We intend] to "absolutely stay on this plan and restructure to get back to profitability as quickly as we can in this changing world and continue to invest in the new products for near- and longer-term growth and value creation."

    -- Ford CEO Alan Mulally indicating bankruptcy is not an option for the automaker, Automotive News, Oct. 29
NADA Convention 2009 
 
  
Convention Workshops Keyed to Today’s Economy

Now more than ever, dealers need to meet, talk and learn how to survive in tough times. In that spirit, workshops planned for NADA’s upcoming convention in New Orleans will focus on recession-proof business operations. NADA Headlines will spotlight three convention workshops each week.

(1) The Credit Crisis: Implications and Opportunities for Your Business
(2) Leveraging the Social Web: Build Your Brand, Grow Your Business
(3) Lifeline to Profit$

Credit Crisis speaker Erin Kerrigan of AutoStar will update dealers on the credit crisis and help them understand it. She will discuss how to manage through the crisis, explaining the implications of limited credit and the corresponding business model changes required for survival. She will also address opportunities for auto retailing.

Social Web will feature Jared Hamilton of DrivingSales.com, who will explain which social networking mediums can affect dealers’ businesses and provide actual case studies. Attendees will learn how to use social networking to build their brands, amplify their messages and increase sales.

Lifeline will reveal how to increase profitability in all departments, taking a candid look at each. Presenting the workshop will be Randy Brenckman of NADA Dealer Academy and Brad Lawson and Mark Rogers of NADA 20 Group. Participants will develop action plans so they can better prepare to guide their management teams. Lifeline will cover cash flow, absorption, inventory management, and operational drivers of fixed and variable departments.

Join us in New Orleans at the 2009 NADA Convention and Exposition Jan. 24–27. Click here to register.

Video Highlights
 


NADA-TV Reports on the Launch of the 'Green Checkup' Campaign. Pictured above is NADA Chairman Annette Sykora with Colorado Gov. Bill Ritter at a news conference in Denver.


NADA's New Orleans Project: Lusher Charter School
NADA's Return to New Orleans
NADA and 'SeeMore's Playhouse' Promote Child Passenger Safety


Click here for more NADA-TV reports.

 
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NADA For more information on NADA, visit www.nada.org or contact NADA, 8400 Westpark Drive, McLean, VA 22102. This email may contain an advertisement of NADA products and services. Any opinions or statements contained herein do not necessarily reflect the views of NADA. Factual errors are the responsibility of the listed publication. If you are a franchised new-car or -truck dealer and would like to become a member of NADA, please visit the Join NADA section of www.nada.org. Questions or comments concerning NADA Headlines content may be directed to media@nada.org.