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Wednesday, Nov. 19, 2008 RSSSEND TO A FRIENDPRINT
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Top Stories
NADA to Urge Congress to Support 'Main Street' at Hearing Today on Capitol Hill
Automakers on Capitol Hill to Plead for Assistance
Auto Dealers Bring Local Angle to Bailout Fight
GM Dealers Buy Ads, Go to DC to Push for Federal Aid
Auto Aid May Hinge on Additional Conditions, Senate Leader Says
Auto Bailout Roadblock: Foreign-Owned Plants
Opinion: Why GM Deserves Support
Opinion: Extend Bridge Loan to GM or the Country Will Suffer
Auto Dealers Turn Buyers Toward New Credit Plans
NADA Update
NADA to Host Virtual Seminar on Changes to Telemarketing Rules
Convention Updates Headed to Member Mailboxes
STAR Answers Dealers' Questions About Content Filtering Systems
NADA Members Can Save on Lenovo's ThinkPad Notebooks
Top Stories
NADA to Urge Congress to Support 'Main Street' at Hearing Today on Capitol Hill

Live coverage of testimony begins at 10 a.m.
WASHINGTON – Annette Sykora, chairman of the National Automobile Dealers Association (NADA), will testify today on Capitol Hill urging Congress to help restore the financial stability of the auto industry. Sykora will explain to the committee how the current difficulties in the auto industry play out on ‘Main Street.’ NADA’s testimony will emphasize the important role that automotive retailing plays in the nation’s economy. Sykora will also make the point that a financially sound dealer network is essential to the success of every automaker, including automakers facing economic challenges. Also scheduled to testify today: Rick Wagoner, chairman and CEO, General Motors Corp.; Bob Nardelli, CEO, Chrysler, LLC; Alan Mulally, president and CEO, Ford Motor Company; and Ron Gettelfinger, president, United Auto Workers. House Financial Services Committee Chairman Barney Frank called the hearing on legislation to extend $25 billion in loans from the recently passed Troubled Asset Relief Program (TARP) to the help stabilize the American car industry.

Testimony begins at 10 a.m. To view live coverage of Sykora's and the Detroit Three CEOs' testimony online click here.
Source:  NADA Newswire

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Automakers on Capitol Hill to Plead for Assistance

The chief executives of Detroit's Big Three automakers pleaded with lawmakers [Tuesday] for $25 billion in emergency federal loans and argued that allowing any of them to fall into bankruptcy would trigger catastrophic consequences for the entire industry, as well as the broader economy. The pleas were met with skepticism from several members of the Senate Banking Committee, who questioned whether the funds would be used to change a flawed business model or merely perpetuate it. Senators from both parties voiced considerable skepticism about a new bailout for the auto industry. Sen. Christopher J. Dodd (D-Conn.), the committee chairman, said he supports efforts to assist the industry but observed that Detroit in the past had "turned a blind eye" to opportunities to reform itself. He complained that automakers had tried to drive demand for inefficient, gas-guzzling vehicles, had spurned hybrids and dismissed the threat of global warming. Sen. Richard C. Shelby (Ala.), the top Republican on the panel, questioned whether the $25 billion would be used to improve the companies' business models and product lines, or whether "this is just life support" that will be used "to keep the lights on" for a while. He also questioned whether the funding would be sufficient, saying that some reports suggest the firms "may need $50 billion apiece." He asked, "Is this the end, or just the beginning?" [Chrysler Chairman Robert] Nardelli, [General Motors Chairman Richard] Wagoner and Ford President Alan R. Mulally urged lawmakers to approve $25 billion in emergency loans to help the companies survive the sharpest drop in auto sales in more than two decades. The money would be in addition to $25 billion in loans already approved by Congress to retool their factories to make more fuel-efficient vehicles.
Source:  The Washington Post

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Auto Dealers Bring Local Angle to Bailout Fight

WASHINGTON — Hayden Elder's beaver pelt cowboy hat delivered his message to lawmakers as starkly as anything else did: The proposed $25 billion federal loan to keep the U.S. auto industry breathing is a local issue. Elder, who sells Chryslers, Dodges and Jeeps in Athens, Texas, is part of a posse of several dozen dealers from across the country blanketing congressional offices this week. They want legislators to view the plan not as a bailout of Detroit's Big Three automakers — not a popular sell with the whole country hurting — but a way to prevent pillars of thousands of local communities from crumbling. "What happens to the local church? Who gives to the food pantry?" said Elder of his dealership's contributions, which go beyond jobs and local taxes to the rodeos he stages to benefit disease research and the local Chamber of Commerce. "We're talking about Main Street, USA." The dealers' lobbying underscores how the auto industry has launched an all-out effort for the rescue package, which seems stalled under opposition from President George W. Bush and congressional Republicans. Opponents say the auto companies have only themselves to blame for incurring excessive costs and lagging behind foreign manufacturers, and express fears about what federal aid to them might mean. "I have serious concerns if you open the door for one industry, how do you close it for another," said Sen. Johnny Isakson, R-Ga., who said he was telephoned by General Motors chief executive Rick Wagoner. Dealers like Elder are the infantry in the industry's effort to sway Congress. Bailey Wood, spokesman for the National Automobile Dealers Association, said about 50 are in town this week, out of his group's 19,700 foreign and domestic franchised auto dealers — about 90 percent of the nation's total.
Source:  Associated Press

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GM Dealers Buy Ads, Go to DC to Push for Federal Aid

DETROIT -- General Motors dealers are pushing a grass-roots campaign to rally support for low-interest federal loans that could save the company. Dozens of dealers called GM last week saying they were willing to pay for ads in local newspapers and on radio and TV to promote U.S. aid, said Susan Garontakos, a GM spokeswoman. Other dealers volunteered to travel to the nation's capital to persuade Republican senators to support a plan to make funding available to auto companies reeling from the lowest demand in a quarter century. Few so far have indicated any support. Until a new administration takes over in January, any measure must have Republican backing to become law. "Going down to Washington was a huge thing to ask of dealers," Garontakos said. "If they offer it, we're taking them up on it. But we have not funded any of those trips; we can't afford to." The dealers also are battling anti-Detroit sentiment. Those attitudes are reflected in blogs posted on a YouTube page that includes a video demonstrating the impact of the auto industry on the nation. GM dealers Ted Linhart and Carter Myers met Monday with Republican senators including Virginia's John Warner... Louis Vera -- who sells Cadillac, Hummer, Saab, Saturn and Buick-Pontiac-GMC in Pembroke Pines, Fla. -- has had numerous meetings with legislators in Washington... Some dealers are meeting locally with their federal lawmakers. Central Ohio dealer Chris Haydocy called, wrote and e-mailed his legislators urging support for the federal loans. "There are 800 dealers in Ohio," Haydocy said. He owns a Buick-Pontiac-GMC store in Columbus and Chevrolet and Cadillac outlets in Bucyrus. "It's not just about a couple of guys in suits talking about the auto industry,'' he said. "The bigger issue is that everything that happens impacts people locally." GM is steering its promotion of a bailout through a Web site, www.factsandfiction.com.
Source:  Automotive News (Subscription required.)

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Auto Aid May Hinge on Additional Conditions, Senate Leader Says

Most Republicans oppose industry help
WASHINGTON -- Senate supporters of $25 billion in emergency loans for automakers don't have the votes to pass the measure without more conditions on the aid, Senate Banking Committee Chairman Christopher Dodd said Tuesday night. "Inaction is not an option," said Dodd, D-Conn.,at the end of a four-hour hearing on legislation that would provide the aid to the Detroit 3 and possibly suppliers. After the hearing, Dodd said he will talk with Senate leaders and try to find a way to help the industry. "My sense is that between inaction and writing a (blank) check, there is a ground I think you can build a majority for," Dodd said. "We're not there yet. Trying to jam something through, I think, would be a mistake." At the Senate hearing, most Republicans expressed strong opposition to the loan legislation. Even some Democrats said stronger conditions must be placed on any aid. Dodd said taxpayers don't want to see Detroit 3 executives continue to collect multi-million-dollar salaries while they ask for government help. One proposed alternative to the emergency aid would accelerate delivery of $25 billion in previously approved loans to help U.S. automakers retool to build fuel-saving vehicles. But Dodd noted that House Speaker Nancy Pelosi, D-Calif., opposes that idea. Dodd's committee is considering a bill that would enable General Motors, Ford Motor Co. and Chrysler LLC to tap into $700 billion in bailout funds for financial institutions. A similar measure is before the House. The Bush administration and many Republican lawmakers oppose the legislation.
Source:  Automotive News (Subscription required.)

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Auto Bailout Roadblock: Foreign-Owned Plants

The domestic industry’s uphill fight this week for an additional $25 billion in federal loans has been complicated by an economic shift with political implications — foreign automakers are now an important feature of the economic landscape in many states. Some lawmakers are not inclined to help the struggling Big Three — particularly General Motors Corp., which has received the most congressional criticism for its business decisions — when foreign competitors including Toyota Motor Corp., Honda Motor Co., Nissan Motor Co. and BMW of North America LLC are making cars and trucks in their states or districts. This is particularly true in the South, where leaner, more financially stable foreign automakers with fewer financial commitments to retired workers have built many of their plants in states where union organizing is more difficult. “I have BMW in my state,” notes Sen. Lindsey Graham, R-S.C. The German carmaker produces three models in Spartanburg. “It’s hard for me to go back home and tell BMW, ‘I’m going to give $25 billion to your competitor, who has a legacy cost you don’t, and a business model that’s unsustainable in the global economy.’" Graham opposes the draft legislation from Senate Democrats that would carve out $25 billion in emergency loans for GM, Ford Motor Co. and Chrysler LLC from the $700 billion financial industry bailout enacted last month. For now, Graham’s side is winning, as passage during this week’s lame-duck session is doubtful. When the chief executives of the Big Three testified Tuesday in front of the Senate Banking, Housing and Urban Affairs Committee, senators told them not to expect action on the legislation this week. “We’ll have to regroup and decide how to move forward,” said Chairman Christopher J. Dodd, D-Conn.
Source:  CQ Today

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Opinion: Why GM Deserves Support
by Rick Wagoner

Short-term government backing can preserve a vital industry.
Much has been said about the impact of the credit crisis on U.S. auto makers, and whether or not the government should assist the industry during this extraordinary financial turmoil. In these discussions, many critics simply ignore the substantial changes that U.S. auto companies have already made -- changes much like those the critics are calling for as part of any aid package. At General Motors, we have been responding to fierce competition here and abroad by transforming our business. Over the past decade, we have taken tough actions to cut costs, at the same time investing billions in fuel-efficient vehicles and new generations of advanced propulsion technologies. On the cost-cutting side, we have been streamlining our U.S. operations while simultaneously improving quality and productivity. We have closed the quality and productivity gaps with the imports... The new Chevy Malibu is a clear response to critics who say that GM cannot build cars that customers want. GM has also been working to re-establish its leadership in advanced propulsion technology. We have committed to producing the Chevy Volt -- a revolutionary car that can go 40 miles on electricity alone... We are expanding our family of hybrid vehicles, investing in advanced biofuels, and continuing development of hydrogen fuel-cell vehicles. The auto industry may be historically anchored in Detroit, but it reaches into every state and community in our nation. Because of GM's deep commitment to its employees, dealers and communities, the company has been restructuring itself without the storm and drama some pundits mistake for actual progress. The future of the domestic auto business is critical to the health of the U.S. economy. It is a vital engine of economic growth and a foundation of economic stability. It remains a path of upward mobility for millions of American families. For America to compete in the global marketplace in the 21st century, it needs a strong manufacturing base and a vital domestic auto industry. Short-term government support to bridge the current financial crisis will enable GM to continue as an engine for prosperity and as a creator of vehicles and technologies that America needs. Such assistance will save millions of jobs now, and produce enormous benefits for years to come.
Source:  The Wall Street Journal


[Editor's Note: Wagoner is chairman and CEO of General Motors Corp.]

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Opinion: Extend Bridge Loan to GM or the Country Will Suffer
by W. Carroll Smith

Collapse of auto industry would devastate economy
Tick...tick...tick....So it's come down to this for General Motors. A company that last year celebrated 100 years of living, breathing, social history is on the brink of total collapse. Absent a governmental financial rescue in the next 60 days, the once proud corporate icon will disappear. Should we taxpayers extend a loan to GM so that it can operate until the U.S. economy recovers? I say yes! If you think a bridge loan to GM so that the lights can stay on through this economic tsunami is expensive, then think about the cost of a GM failure. Let's be clear, the alternative for GM and the domestic industry is not a cake walk through the bankruptcy courts, resulting in a reorganization that some think would put dealers and the UAW in their place and ensure future success. No, even if GM could get debtor-in-possession financing to keep the lights on (which is extremely unlikely in today's credit crisis environment), Chapter 11 means a collapse of sales and a downward spiral into a Chapter 7 liquidation. We are facing a perfect storm of events that could spell disaster if we as a nation don't act and act fast. The "let the free market run its course" dialogue is over. It's far too late for that. I agree that the taxpayer must have protection and an upside. GM's top management may have to go. There simply cannot be any excessive salaries or bonuses. Government as a shareholder must have a big voice. But the stark reality remains: Absent a loan, GM dies, and with it much of manufacturing in America. Let's hope that what needs to get done will in fact get done, before it's too late. That tick, tick, tick you hear? It's time running out on the manufacturing base of America and the future of many Americans.
Source:  Houston Chronicle

[Editor's Note: Smith is the owner of Monument Chevrolet in Pasadena, a past chairman of the Houston Automobile Dealers Association and a director of the National Automobile Dealers Association.]

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Auto Dealers Turn Buyers Toward New Credit Plans

Auto dealers are turning to different sources and ways of financing during the national economic crisis and falling sales. Little Rock-area dealers feel that word of available credit simply isn’t getting out. Gwatney Chevrolet in Jacksonville, for example, is increasingly using local credit unions and banks rather than GMAC, which has tightened lending standards. Arkansas Federal Credit Union has become its largest lender, said James Miller, Gwatney’s general sales manager. Arkansas Federal has already lent 13 percent more money in auto loans this year compared with all of 2007, according to Terry Vick, the credit union’s chief lending officer. “What’s helped us out this year is what’s been happening in the stock market,” Vick said. “Deposits have come in because [consumers ] are a little worried about leaving their funds there. So we’ve had plenty of money to lend out.” Paul Buch of North Point Automotive Group said, “We want to make sure to tell the customers that we’re not in the housing market. It’s not the same kind of qualifications. “ You can still get money” for automobiles, he added. North Point says it has at least 16 lenders it can call on. North Point is making more use of DealerTrack, an online database to give customers several options of lenders who will work with them, Buch said. Said Miller: “There’s a lot of places we can turn to, even for somebody that has had some credit history that may not be perfect. We’re able to do now a loan to anybody like we were three months ago, but the buying public just doesn’t realize that. They’re afraid to come in and even try, some people are.”
Source:  Arkansas Democrat-Gazette

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NADA Update
NADA to Host Virtual Seminar on Changes to Telemarketing Rules

Many new and amended federal telemarketing regulations have been issued since the National Do-Not-Call Rules were established in 2003, and dealers who haven’t kept up risk the possibility of very costly litigation. While not all of these mandates have received widespread press coverage, they deserve dealers’ utmost attention as they affect dealers’ ability to advertise their products and services by phone, fax and email.

To help dealers and managers comply with these regulations, NADA is hosting a virtual seminar next month presented by Erica McMahon, chief of the FCC’s consumer policy division, and moderated by Paul Metrey, NADA’s director of regulatory affairs.

The speakers will highlight many of the well-known and lesser-known telemarketing requirements that have been imposed since the 2003 Do-Not-Call Rules took effect. The seminar will cover regulations governing telephone solicitations, commercial emails and fax advertisements, and will allow time for questions. All dealership personnel and service providers who are involved in marketing to consumers or businesses are encouraged to attend.

Changes in Telemarketing Regulations Since the National Do-Not-Call Rules Took Effect will be held Dec. 9 from 1–3 p.m. EST. The fee for this seminar is $199 per computer connection. Additional attendees can participate on the same connection for no additional cost. For more information on this virtual seminar and other upcoming seminars, visit www.nada.org/seminars or call (800) 252-6232, ext. 2.

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Convention Updates Headed to Member Mailboxes

NADA members will begin receiving the much-anticipated update for the 2009 NADA Convention & Exposition in the mail this week. The update includes details about workshops, franchise meetings and much more planned for the annual event, which takes place Jan. 24-27 in New Orleans. Many new workshops have been added to the program, including sessions on improving cash flow, combating the credit crunch, and tactics for driving customers back to the store. The popular "Lifeline to Profit$" workshop will be offered twice--Friday, Jan. 23 and Tuesday, Jan. 27--to help dealers through tough times. “You’ll be amazed how much we have packed into this convention,” says Stephen Pitt, NADA vice president of conventions & expositions. To register for the NADA convention, visit www.nada.org/convention before Dec. 5.

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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
 
 
NADA Chairman Annette Sykora at a press conference with U.S. Sen. Barbara Mikulski. Click here for the NADA-TV report.


More Video Highlights

Quotable
 
"What exposes us to failure now is not our product lineup, or our business plan or our long term strategy. What exposes us to failure now is the global financial crisis, which has severely restricted credit availability and reduces industry sales to the lowest per capita level since World War II."

    -- General Motors Chairman G. Richard Wagoner Jr. in testimony before the Senate Banking Committee, The Washington Post, Nov. 18


"Without immediate bridge financing support, Chrysler's liquidity could fall below the level necessary to sustain operations in the ordinary course." The company also would "welcome the government as a stakeholder, including as an equity holder."

    -- Chrysler Chairman Robert Nardelli in testimony before the committee added that the privately held company would be "willing to provide full financial transparency" in exchange for the money, The Washington Post, Nov. 18


"If any one of the domestic companies should fail, we believe there is a strong chance that the entire industry would face severe disruption. Should one of the other domestic companies declare bankruptcy, the effect on Ford's production operations would be felt within days, if not hours, and Ford plants would soon find themselves unable to produce vehicles."

    -- Ford President Alan Mulally in testimony before the committee, The Washington Post, Nov. 18

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) Seven Innovative Steps to Hedge Your Bet and Dominate Your Used-Car Market

(2) The Essential Eight Processes for Maximizing Service Profits

(3) The Four Pillars of Online Process: How to Drive Peak Performance and Internet Sales Results

In Seven Steps, speaker Tommy Gibbs of Tommy Gibbs and Associates will demonstrate strategies for creating a focused, profit-driven used-vehicle department. Participants will learn how to stock used vehicles that don’t compete directly with new vehicles, use technology to track inventory, and develop an Internet pricing strategy that will improve gross, volume and turn.

Service Profits speaker Don Reed of DealerPro Training Solutions will cover the vital steps to handling phone calls, meet-and-greets, maintenance training and delivery. Participants will examine eight essential processes for setting goals, measuring performance, increasing service sales and retaining customers.

Internet Sales speaker Ralph Ebersole of Cars.com will teach dealers and managers how to implement successful Internet sales processes and develop online advertising that catches customers’ attention. Participants will learn how to staff a strong Internet sales department, handle leads online and track the performance of sales processes.

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

Video Highlights
 

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.


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.