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Thursday, Nov. 6, 2008 RSSSEND TO A FRIENDPRINT
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Top Stories
Obama's Automotive Job 1: An Industry on the Brink
Auto Leaders to Press for More Federal Aid
GM's Clarke Urges Suppliers to Lobby Washington, Help Auto Industry
DOE Sets Auto Loan Rules
GMAC Has Big Loss, Will Curb Car Loans
Credit Crunch, Slow Sales Force Boston Area Auto Dealers Out of Business
Key 'Changes' Expected at GM
Study: 3 Million Auto Industry Jobs at Risk
Cerberus Chief: Country Can't Let Automakers Fail
Toyota Hacks Forecasts as U.S. Carmakers Seek Help
The Incentives to Buy Hybrids Are Dwindling
nada update
NADA Insurance Offers New Plan to Protect Dealerships from Identity Theft Liability
Red Flags Enforcement Delayed Six Months
STAR Answers Dealers' Questions About Content Filtering Systems
NADA Members Can Save on Lenovo's ThinkPad Notebooks
Top Stories
Obama's Automotive Job 1: An Industry on the Brink

WASHINGTON -- Even before President-elect Barack Obama is inaugurated in January, this week’s election could help automakers that seek federal aid survive the recession. Obama has said he wants to meet before his inauguration with the Detroit 3’s CEOs. This year, the Illinois senator voted for $25 billion in low-interest federal loans intended to help automakers build more fuel-efficient vehicles. He also has said he supports an additional $25 billion in federal aid to the industry. General Motors seeks federal help to complete a merger with Chrysler LLC. In a statement [Wednesday], GM said it welcomes Obama’s “pledge to support our nation's domestic auto industry in its ongoing efforts to transform its business and develop new technologies.” “This support comes at an especially critical time as our industry confronts one of the most difficult economic periods in our nation's history, caused by the global financial crisis,” the GM statement said. “And this support will enable a competitive U.S. industry to contribute significantly to our nation's economic revival, in employment, technology, energy security and other important areas.” In the longer term, Obama’s election could test traditional views of industry executives who favor smaller government.
Source:  Automotive News (Subscription required.)

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Auto Leaders to Press for More Federal Aid

Detroit Urgently Seeks $25 Billion More in Loans
Top auto industry executives and the president of the United Auto Workers plan to meet with House Speaker Nancy Pelosi today to ask for additional federal aid for the struggling U.S. carmakers. Chief executives G. Richard Wagoner Jr. of General Motors, Alan Mulally of Ford, Robert L. Nardelli of Chrysler and UAW president Ron Gettelfinger are in Washington to argue that if there is a November stimulus package from Congress, the auto industry should receive an additional $25 billion loan to retool for production of energy-efficient vehicles, according to sources familiar with the matter who were not authorized to speak publicly about the meeting. That measure has been endorsed by President-elect Barack Obama and other Democrats. Yesterday, the Energy Department completed the interim program rules for the existing $25 billion loan package. The rules allow automakers and suppliers to apply for government funding. Still, the loan must comply with the National Environmental Policy Act and the Congressional Review Act, which prevents a regulation from being implemented until 60 days after the next Congress convenes in January.
Source:  The Washington Post

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GM's Clarke Urges Suppliers to Lobby Washington, Help Auto Industry

DETROIT -- General Motors’ North American president is urging the rest of the auto industry to let Washington know the extent of the industry’s financial crisis. In a speech [Wednesday] to suppliers in Detroit, Troy Clarke said, "This may be the most crucial time in the history of our industry..." Calling the next 100 days critical for GM and the industry, Clarke said GM is working around the clock to evaluate all its options. It will continue to "take the tough, but necessary actions" to succeed, Clarke said. GM sees global energy demands exceeding the current supply, so more fuel-saving technology will be needed. He urged suppliers to partner with GM by continuing to develop innovative technology and ideas, but at a reasonable cost. "While consumers are concerned about the environment, we have to keep in mind that their willingness to pay for green technologies has its limits," Clarke said. "We want our suppliers to understand this dynamic and take steps to build the capabilities and technologies to deal with these issues." Clarke emphasized the urgency for GM to get funding now to continue to move critical programs forward. He says the $25 billion federal loan program recently signed into law could lower borrowing costs for manufacturers and suppliers investing in energy-saving technologies. He added: “I wish this time-line was within our 100-day window, but we have no assurances to date.”
Source:  Automotive News (Subscription required.)

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DOE Sets Auto Loan Rules

U.S. department says funding to aid automakers' fuel-efficient vehicles could be issued before Dec. 31
WASHINGTON -- The U.S. Department of Energy unveiled interim rules to oversee its $25 billion auto loan program late Wednesday, which could allow automakers and suppliers to win loans before the end of the year. Senior government officials said during a conference call with reporters that it was "doubtful," but possible, that the funds could be issued before Dec. 31. The loans are intended to help pay for modernizing factories to build more fuel-efficient vehicles and the rules are fairly restrictive: The companies will have to spend the money on future projects, rather than use it to meet immediate cash needs, and they must demonstrate they are financially viable.
Source:  The Detroit News

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GMAC Has Big Loss, Will Curb Car Loans

GMAC Financial Services reported a $2.52 billion third-quarter loss and disclosed further trouble in home and auto lending, signaling deeper woes for minority owner General Motors Corp., which reports its own results Friday. GMAC, 49%-owned by GM, also warned that its ailing home-mortgage unit, Residential Capital LLC, could collapse without financial help. In addition the lending giant said it must continue to scale back auto loans due to a shortage of capital, hardly good news for GM. GMAC's performance "significantly hinders the sale of GM vehicles," said Richard Hofmann, an analyst at research firm CreditSights.
Source:  The Wall Street Journal (Subscription required.)

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Credit Crunch, Slow Sales Force Boston Area Auto Dealers Out of Business

Ford, General Motors, and Dodge dealerships northwest of Boston are among the latest casualties in an industry hit hard by tightened credit markets and plummeting car sales. "Lots and lots of dealerships are going to be going out of business," said Ray Ciccolo, state director for the National Automobile Dealers Association. "It's probably going to be our biggest attrition ever." Ciccolo, also a board member of the Massachusetts Automobile Dealers Association, said numerous dealers are calling the association to ask for guidance on their financial woes. He is the president and CEO of Village Automotive Group in Boston, overseeing seven dealerships from Danvers to North Attleborough. "Credit is the lifeblood of our industry," said Annette Sykora, NADA chairman, in an Oct. 7 speech to the Automotive Press Association. As a result, the leveraged smaller dealerships are more vulnerable to the current economic climate...
Source:  The Boston Globe

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Key 'Changes' Expected at GM

General Motors Corp. is expected to announce "important changes" to its operations Friday when the automaker releases third-quarter financial results, according to an internal e-mail obtained Wednesday by The Detroit News. Chief Executive Rick Wagoner and President and Chief Operating Officer Fritz Henderson will announce changes Friday that address challenges "brought on by the volatile global economic situation," according to the e-mail sent to company executives Monday. "Clearly given the challenges the industry is facing, we're probably going to have to make additional adjustments," GM spokesman Tom Wilkinson said Wednesday. "It's a very challenging time right now." The e-mail doesn't spell out what specific changes might be announced. But in a letter to executives late last month, Wagoner and Henderson wrote that the automaker will have to cut more white-collar jobs, including involuntary layoffs, later this year and early next year, as well as suspend the company match in employee 401(k) retirement accounts and make other benefit cuts.
Source:  The Detroit News

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Study: 3 Million Auto Industry Jobs at Risk

Nearly 3 million Americans would lose their jobs in one year if the Detroit 3 eliminated their U.S. operations, a Center for Automotive Research study says. The report projected the toll on the U.S. economy if General Motors, Ford Motor Co. and Chrysler LLC were to shut down. In another scenario, the study calculated the economic impact if the Detroit 3 reduced employment and production by half. “To permit any of the Detroit 3 manufacturers to collapse would scar the U.S. economy further at a time when it can ill-afford another blow,” said Dave Cole, chairman of the Center for Automotive Research in Ann Arbor, Mich. “As policymakers consider their positions on assistance to the auto industry, they must decide: Is an ounce of prevention indeed worth a pound of cure?”
Source:  Automotive News (Subscription required.)

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Cerberus Chief: Country Can't Let Automakers Fail

DETROIT -- A top official of the company that owns most of Chrysler LLC says the country needs an economic stimulus package and must make sure the U.S. auto industry doesn't fail. Cerberus Capital Management LP Chairman John Snow said Wednesday that president-elect Barack Obama and his treasury secretary need a bipartisan plan to counter the worst economic downturn in about 50 years. "What we need is to make sure that a vital industry like autos ... which is such a big part of the overall economy, doesn't lead us into a deeper and harsher downturn," Snow said in an interview on the CNBC cable channel. "The collapse of the auto industry at this time would be devastating for a new president."
Source:  Associated Press

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Toyota Hacks Forecasts as U.S. Carmakers Seek Help

TOKYO -- Toyota Motor Corp, the world's No.1 automaker, warned operating profits will sink to a 13-year low this year, as other carmakers sought more state help to ride out a financial crisis that is crippling demand and squeezing credit around the globe. After a week of profit warnings from six of the seven other Japanese car makers, industry watchers had braced for similar pain at Toyota -- until recently the envy of the sector with eight straight years of profit growth. But a 63 percent cut in forecast operating profit, to 600 billion yen ($6.1 billion), was far beyond the most pessimistic prediction -- and would be Toyota's lowest profit since 1995/96...
Source:  Reuters

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The Incentives to Buy Hybrids Are Dwindling

Car buyers have until the end of the year to get a tax credit for buying a Honda Civic hybrid, one of the more popular fuel-saving vehicles on the market. The dying tax credit is the latest in a series of changes chipping away at the financial incentives to buy a hybrid. Tax breaks tied to Toyota Motor Corp.'s strong-selling Prius, which gets about 46 miles a gallon, and its other hybrid models ended about a year ago. Now, the federal government is phasing out the same incentives on Honda Motor Co.'s Civic hybrid, which gets 42 miles a gallon. Combine that with the fact that fuel prices have fallen from their historic highs above $4 a gallon this summer, and it's getting a lot more expensive to be an environmentally conscious driver.
Source:  The Wall Street Journal (Subscription required.)

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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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STAR Answers Dealers' Questions About Content Filtering Systems

Standards for Technology in Automotive Retail (STAR) has developed new guidelines to help dealers evaluate their Dealership Security. Visit STAR's Dealer Infrastructure Guidelines (DIG) publication for more information. To learn if you should choose a hardware or software content filtering system click here.

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NADA Members Can Save on Lenovo's ThinkPad Notebooks

Lenovo's ThinkPad SL notebook built for small businesses with legendary ThinkPad reliability, plus advanced wireless and multimedia features, starts at only $450 with eCoupon USXTHANKSGIVING for a limited time. To take advantage of these savings, visit NADA's PC Purchase Program online (member log-in required), click www.lenovo.com/shop/deals/nada, then click Special Offers, or call (800) 426-7235, Option 1, Ext. 4838. Enter eCoupon USXTHANKSGIVING at checkout. Free ground shipping is available on all Web orders.

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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
 
"We will provide you with the resources you need to retool. We'll help you with some of your legacy costs in terms of health care and pension costs for your workers. But in exchange, that money has to be reinvested in creating the high-energy -- the high-efficiency cars of the future."

   
-- President-elect Barack Obama said last week on NBC's "Nightly News with Brian Williams," The Washington Post, Nov. 6


"This may be the most crucial time in the history of our industry."

    -- GM's North American President Troy Clarke urging dealers, parts makers and automakers to do all they can to tout that a vibrant auto industry contributes to the economic health of America, Automotive News, Nov. 6


"Lots and lots of dealerships are going to be going out of business. It's probably going to be our biggest attrition ever."

   
-- Ray Ciccolo, NADA state director from Massachusetts, referring to the effect of slow sales and the credit crunch on Boston-area dealerships, The Boston Globe, Nov. 6
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) Grass Roots Marketing: Building a Valuable Connection between your Dealership and your Community

(2) Increase Traffic and Sales for Every Department with a Video Marketing Strategy

(3) The Lost Art of the Business Manager…A Credit Score is Not F&I

Grass Roots speakers Scott Toland of The Marketing Academy and Denise Scattergood of Sale-in-a-Box will teach participants how to build valuable connections between their dealerships and communities through grass roots marketing. Attendees will learn how to engage customers where they live and work to increase traffic, word-of-mouth sales networking and earning free positive publicity.

Video Marketing will feature Sean Bradley of Dealer Synergy, who will explain how dealers can implement targeted, cost-effective video marketing strategies online. Participants will learn how to create videos and use popular search engines to raise the visibility of their dealerships and drive more traffic to their Web sites and showrooms.

Credit Score, presented by Tony Dupaquier of American Financial & Automotive, will examine all of the elements that a lender considers when deciding on a deal. Attendees will learn how they can approve more car shoppers for financing by taking a closer look at the credit application and asking the right questions.

Join us in New Orleans at the 2009 NADA Convention & 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.