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Tuesday, Nov. 11, 2008 RSSSEND TO A FRIENDPRINT
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Top Stories
NADA Launches Free 'Hotline' to Help Dealers Survive Tough Economic Times
Obama Asks Bush to Back Rescue of Automakers
White House is Open to Big 3 Aid
Wagoner: GM Needs Federal Help Before Obama Takes Office
Ford Will Survive, Mulally Says
Poll Shows Lukewarm Support for Federal Auto Bailout
Auto Dealers Get a 'Dear John'
Automobile Dealers Eye Brisker Market in Spring
Dealers 'Don't Know What to Expect' from South Florida Auto Show
Opinion: America's Two Auto Industries
NADA Update
STAR Answers Dealers' Questions About Content Filtering Systems
NADA Members Can Save on Lenovo's ThinkPad Notebooks
Top Stories
NADA Launches Free 'Hotline' to Help Dealers Survive Tough Economic Times

Top experts available for one-on-one consultation
McLEAN, Va. -- In response to unprecedented economic challenges facing new-car and -truck dealers, the National Automobile Dealers Association (NADA) has launched a new hotline phone service to help members seeking assistance with their financial and operational issues, such as:

  • Frozen capital
  • Cash flow
  • Absorption
  • Warranty administration
  • Accounts receivable
  • Aged inventory
  • Capitalization concerns
  • Expense reduction
  • Internal processes

NADA encourages dealers to utilize this free, confidential service if assistance is required. To schedule an appointment with one of NADA's industry-leading consultants, visit www.nada.org/Lifeline or call (888) 672-5147.

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Obama Asks Bush to Back Rescue of Automakers

President-elect Barack Obama yesterday urged President Bush to support immediate aid for struggling automakers and back a new stimulus package, even as congressional Democrats began drafting legislation to give the Detroit automakers quick access to $25 billion by adding them to the Treasury Department's $700 billion economic rescue program. Bush, speaking privately to Obama during their first Oval Office meeting, repeated his administration's stand that he might support quick action on those bills if Democratic leaders drop their opposition to a Colombia trade agreement that Bush supports, according to people familiar with the discussions. The discussions raised the stakes for a lame-duck session of Congress that could begin next week and came as fears about General Motors' financial condition yesterday pushed the company's stock price to its lowest level in about 60 years. "There's an urgent crisis. It's a national issue. If the administration won't act, we'll have to. But they should act," said Rep. Sander M. Levin (D-Mich.).
Source:  The Washington Post

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White House is Open to Big 3 Aid

Administration says $700B bailout not for carmakers, but would consider other funding
WASHINGTON -- The White House said Monday it would consider additional immediate aid for Detroit's Big Three if Congress acted, but signaled that it does not support opening the $700 billion Wall Street rescue package to the automakers. The Wall Street bailout was designed to help financial institutions and there was no specific discussion about helping auto companies as part of that plan, White House spokeswoman Dana Perino said. "Congress is going to come back into town next week," Perino said. "If they decide to try to do something more on the auto industry, we would listen." Before Congress returns for a few days starting Nov. 17, carmakers are reaching out to policymakers, consumers, employees, retirees and dealers, urging them to contact lawmakers and express support for the domestic auto industry. GM posted a link on a company Web site for its dealers to send letters to Congress, and will be posting similar letters for retirees and consumers. The effort is called "Mobilize Our Auto Nation." "What happens to the U.S. auto industry matters on Main Street," the letter said. "There are some 14,000 U.S.-brand dealers in cities and towns across the country, employing approximately 740,000 people, with a total payroll of some $35 billion. "The collapse of the U.S.-based auto industry would account for a direct, indirect and spin-off employment drop of 2.95 million people, and a personal income drop of $150.7 billion."
Source:  The Detroit News

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Wagoner: GM Needs Federal Help Before Obama Takes Office

DETROIT -- General Motors CEO Rick Wagoner says GM’s financial distress is so dire that it must line up financial assistance from Washington before President-elect Barack Obama takes office in January. “This is an issue that needs to be addressed urgently,” Wagoner said during an exclusive interview today with Automotive News. Now is the time to “overshoot, not undershoot” when it comes to assistance for the auto industry, he added. In return for financial aid, General Motors is willing to offer the government preferred stock, set limits on executive compensation and speed the introduction of fuel-efficient vehicles. But Wagoner said he is not prepared to resign in return for government said. "I don't think it'd be a very smart move,” he said.
Source:  Automotive News (Subscription required.)

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Ford Will Survive, Mulally Says

Despite burning through $16 billion in cash during the first nine months of the year and watching its credit rating knocked another notch into junk territory, Ford Motor Co. CEO Alan Mulally on Friday insisted that the company's reserves of $29.6 billion in cash and credit would be enough to survive until 2010. "With the assumptions we have in place, we believe we have sufficient liquidity to make it through this downturn," Mulally told the Free Press, after the automaker disclosed that it had burned through $7.7 billion during the third quarter and would launch yet another cost-cutting effort. Ford now has $18.9 billion in cash and $10.7 billion in credit to survive until 2010 -- a year that Mulally and other automotive executives have been eyeing like a finish line. Mulally said he hopes that the economy will begin rebounding then, just as Ford's stable of new fuel-efficient cars from Europe begins arriving in U.S. showrooms.
Source:  Detroit Free Press

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Poll Shows Lukewarm Support for Federal Auto Bailout

DETROIT — While the auto industry's push for government aid is gaining steam in Washington, a lot of Americans don't think bailing out the industry should be one of President-elect Barack Obama's economic priorities. According to a USA TODAY/Gallup Poll, 47% of adults believe "providing loans and other help" to auto companies is "not very important." By contrast, 60% of the 1,010 adults surveyed Nov. 7 to 9 said stricter regulation of financial companies is a "critical" or "very important" economic priority for the newly elected president. "Most people do not understand the ramifications of a collapse within the U.S. auto industry," says Dennis Virag, president of Automotive Consulting Group. "They see GM, Ford and Chrysler, but they don't understand the relationship and the total size of the problem with regard to not only the three automakers, but their full supply base, their support structure and all of the dealers."
Source:  USA TODAY

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Auto Dealers Get a 'Dear John'

A GMAC letter outlining tighter financing policies made things tougher for an already hard-hit group
Across the already dispirited community of auto dealerships, the written correspondence sparked the same feelings of betrayal as a "Dear John" letter. In many respects, the word that went out to General Motors Corp. dealers from GMAC Financial Services on Oct. 13 was a breakup notice. GMAC, its own wounds deep from the economic crisis, announced it was implementing "a more conservative purchase policy for consumer auto financing," with changes in pricing and underwriting. Just like that, dealers lost an old reliable -- one they have counted on for nearly 90 years to not only finance their customers' purchases, but to keep their sales lots full of big-ticket horsepower. Throughout the struggling industry, feelings are raw. "It will be a long time before dealers trust GMAC again," said Jim Appleton, president of the New Jersey Coalition of Automotive Retailers, which represents 600 dealers. Trying to take it all in stride is Armen DiFillipo, owner of three GM dealerships in Plymouth Meeting and Ardmore, Pa. "It's just a whole different playing field," he said of the auto-sales business. "And to survive, you're going to have to react to it. You really can't look back at the way you did business before." But then, you don't become an auto dealer if you don't know that, said Kevin Mazzucola, executive director of the 200-member Automobile Dealers Association of Greater Philadelphia. "Dealers are resilient and they're adaptive," he said. "You can't be in this business if you're not."
Source:  The Philadelphia Inquirer

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Automobile Dealers Eye Brisker Market in Spring

General Motors dealers in Delaware took the news of the automaker's perilous financial state in stride Friday, saying they're looking forward to a brisker market in the spring. "We're doing what everyone else is doing: holding on to our cash and hunkering down," said Charles L. Burton, president of I.G. Burton, which sells GM, Chrysler, BMW and Mercedes-Benz vehicles at dealerships in Milford and Seaford. Burton, who is also president of the Delaware Automobile Dealer and Truck Association, said he has seen sales fall by about 30 percent in recent months. "The cars are moving, but slowly," Burton said. "They have a good product, and we're doing our best to sell it." Dealers said their marketing strategies now focus on the big incentives available on new cars, the value of used cars and the advantages of keeping existing cars on the road through regular service and maintenance.
Source:  DelawareOnline.com

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Dealers 'Don't Know What to Expect' from South Florida Auto Show

Car dealers count on the hundreds of gleaming new models at the South Florida International Auto Show each fall to woo customers into showrooms and lift sales. But as this year's show opens Friday at the Miami Beach Convention Center, there's no guarantee the 10-day event will give dealers that much-needed boost. "I don't know what to expect," said Bill Kelley Jr., owner of Hallandale Beach's Kelley Chevrolet. That's because the auto industry is reeling, slammed by the economic slowdown and the steep credit crunch. Car sales last month fell to their lowest level in more than 17 years. The slump has automakers juicing up sales incentives such as zero percent financing, and dealers say customers can get a good price and a good loan -- if they have good credit. And just in case people needed any more motivation, the auto show is doling out more guest passes than ever before, said Rick Baker, an executive with the South Florida Auto Dealers Association, which stages the show. After all, Baker said, "The object of the show is to stimulate interest in automobiles." The loss of home equity has been the key problem in consumer's willingness to buy a new vehicle, said Paul Taylor, chief economist with the National Automobile Dealers Association. Consumers, in essence, are not feeling as flush as before. The perception is that the market has locked up entirely, Taylor said, but anyone with a good credit history shouldn't have a problem obtaining a loan. "It's actually a great time to buy a car in terms of pricing, incentives and availability," Taylor said.
Source:  Miami Herald

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Opinion: America's Two Auto Industries
by Joe White

America has two auto industries. The one represented by GM, Ford and Chrysler... The other American auto industry [includes] Japanese, European and Korean owners [who] launched operations in this country relatively recently. Their factories are newer, their brand images and marketing strategies are more coherent ... and they have cars designed for the competitive global market that exists today. So this debate is strictly about the Old American auto industry, represented by the "Big Three" of Detroit. The Detroit Three employ more than 200,000 people directly, and sustain nearly 3 million more indirectly, according to the CAR study. Diminished as they are, the Detroit Three still account for about 4% of U.S. gross domestic product. They also represent a way of doing business that has run its course. The government could justify subsidies as a way to prevent more job losses at the Detroit auto makers. But that would risk delaying the restructuring the unionized auto makers need to be viable. Perhaps the government will decide that its role should be to give the Detroit Three the chance to play the same game as its international rivals when it comes to the costs of health care. There's another thing the government could do with $50 billion. It could give a $4,000 to $5,000 tax rebate to everyone who buys a new car or truck made in the United States during the next year. The tax break could be scaled up for people who trade in a low mileage vehicle for a vehicle that burns 15%-20% less gas... Leaving it up to consumers what auto companies should benefit from government subsidies might not save GM. But it would save the government from having to choose sides between America's two auto industries.
Source:  The Wall Street Journal (Subscription required.)

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NADA Update
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
 
"The collapse of the U.S.-based auto industry would account for a direct, indirect and spin-off employment drop of 2.95 million people, and a personal income drop of $150.7 billion."

    -- In a letter intended for General Motors' dealers to send to their members of Congress, which is part of the company's "Mobilize Our Auto Nation" initiative, The Detroit News, Nov. 11


"This is an issue that needs to be addressed urgently. Now is the time to overshoot, not undershoot when it comes to assistance for the auto industry."

    -- GM CEO Rick Wagoner requesting federal assistance for the auto industry before President-elect Barack Obama takes office in January, Automotive News, Nov. 11


"It's actually a great time to buy a car in terms of pricing, incentives and availability." 

    -- Paul Taylor, NADA economist, Miami Herald, Nov. 7


"It's just a whole different playing field. And to survive, you're going to have to react to it. You really can't look back at the way you did business before."

   
-- Armen DiFillipo, owner of three GM dealerships in the Philadelphia area, referring to GMAC's tighter lending policies, The Philadelphia Inquirer, Nov. 8. DiFillipo said there are plenty of banks and other lending institutions willing to do business with auto dealers and their customers. 


"Dealers are resilient and they're adaptive. You can't be in this business if you're not." 

    -- Kevin Mazzucola, executive director of the Automobile Dealers Association of Greater Philadelphia, referring to the way dealers must respond to today's challenging market, The Philadelphia Inquirer, Nov. 8 

NADA Convention 2009 
 
  
Convention Workshops Keyed to Today’s Economy

Now more than ever, dealers need to learn how to survive in tough times. In that spirit, workshops planned for the NADA Convention & Exposition in New Orleans Jan. 24-27 will focus on recession-proof business operations. NADA Headlines will spotlight three convention workshops each week.

(1) The ABCs of Privacy and Data Security Rules Affecting Dealers

(2) Managing for Profitability: Tracking and Measuring Media Value in the Online Age

(3) "On Board": Hire the Right Employees and Create an Orientation Process to Keep Them

ABC's of Privacy speaker Kathryn Ratté of the Federal Trade Commission (FTC) will discuss the requirements of the Privacy Rule and Safeguards Rule, and how the FTC enforces them. She will also provide an overview of dealers' responsibilities outlined under the FACT Act, including Red Flags Rule compliance.

Media Value will feature David Kain of Kain Automotive and Dennis Galbraith of Cars.com, discussing how to measure and manage the effectiveness of media dollars in the online age. Participants will learn what they need to track to determine their true media ROI—allowing them to manage their marketing mix for optimal results.

On Board speakers Robert Bekken of the Bekken Law Group and Mike Poskey of ZeroRisk HR, Inc. will analyze each stage of the hiring and orientation process, revealing best practices for hiring professionals, reducing turnover and increasing the productivity of new employees.

Join us in New Orleans at the NADA convention 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.