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Tuesday, Nov. 25, 2008 RSSSEND TO A FRIENDPRINT
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NADA Commends Action by Federal Reserve and Treasury to Increase Availability of Auto Loans
Detroit Marshals for Bailout Bid
Big Three Tamp Down Talk of Bankruptcy
Obama Chides Automakers in Fresh Blow
GM Incentive Requires Dealers to Order More Cars for Cash
Nissan Pulls Out of Detroit and Chicago Shows
Ford Dealers: Mulally Should Keep His Job
The Car of the Future -- But at What Cost?
Opinion: Pundits Unfairly Target American Automakers
NADA Update
NADA to Host Virtual Seminar on Changes to Telemarketing Rules
STAR Answers Dealers' Questions About Content Filtering Systems
Lenovo Extends Employee Pricing to NADA Members
Top Stories
NADA Commends Action by Federal Reserve and Treasury to Increase Availability of Auto Loans

Treasury Department announces new initiative under the Troubled Asset Relief Program
WASHINGTON – Addressing a key request from the National Automobile Dealers Association (NADA), the U.S. Treasury Department announced today a new program to increase the availability of auto loans. “This is great news for consumers and auto dealers alike,” said NADA Chairman Annette Sykora. “These steps will go a long way in helping to restore the consumer confidence that we need to return our country to economic stability. Dealers will be making sure that their customers are fully aware of the new opportunities they have when it comes to auto financing.”

To support the return of automotive lending, the Federal Reserve will establish a $200 billion Term Asset-Backed Securities Loan Facility (TALF) which will, in turn, facilitate the issuance and sale of securitized auto loans. Utilizing the Troubled Asset Relief Program (TARP) Funds, Treasury will provide $20 billion of credit protection to the Federal Reserve in support of the TALF. “By providing liquidity to issuers of consumer asset backed paper,” Treasury Secretary Henry Paulson explained, “the Federal Reserve will enable a broad range of institutions to step up their lending.” He added that this will allow borrowers to have access to lower cost auto loans.

“The economic health and well-being of our nation depend on a robust automotive industry,” Sykora said in a Nov. 7 letter to Paulson and Federal Reserve Board Chairman Ben Bernanke. “Auto sales constitute 20 percent of all retail spending in the United States, and millions of Americans rely on our industry for their livelihood and financial security.”

Significantly, in establishing the TALF, the Federal Reserve reserved the right to clarify its reach, and NADA is still working with the agencies to do just that. “As pleased as we are with today’s actions by the Federal Reserve and the Treasury,” Sykora noted, “there is also a need for greater liquidity in the market for wholesale automotive inventory loans (known in the industry as 'floorplan' financing).” 

“We call upon the regulators to confirm that the TALF eligibility requirements reach floorplan securitizations,” Sykora said. “This would help ensure that dealers have at their dealerships the selection of vehicles that consumers want to buy when they come in to use the auto loans that the government has today freed up.”
Source:  NADA Newswire

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Detroit Marshals for Bailout Bid

Industry's Backers Weigh a Motorized March on Washington
When Detroit's Big Three automakers return to Capitol Hill next week to re-plead their case for a $25 billion emergency loan, they may be flanked by a posse of supporters. A plan is taking shape for auto suppliers, dealers and factory workers to caravan from Detroit to Washington in American-made, fuel-efficient vehicles. The National Automobile Dealers Association is considering flying in dealers from around the country to deliver the "message of Main Street," underscoring the urgency of the industry's crisis. Detroit-area car dealer Carl Galeana said he was infuriated when a CNBC reporter covering the hearing asked viewers, "Who buys these cars anyway?" Last year, about half of the vehicles sold in the United States were made by the Big Three.
Source:  Washington Post

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Big Three Tamp Down Talk of Bankruptcy

Carmakers, analysts say filing could spell doom
The chief executives of Detroit's Big Three may not have achieved much in Washington last week -- but they did manage to persuade some key politicians that growing calls for bankruptcy as a solution for the struggling industry might instead spell its doom. Advocates have proposed a special sort of bankruptcy for the automakers -- a "prepackaged" filing that could neatly resolve most of their cost problems by severing the car companies' obligations to dealers and unions. By contrast with traditional bankruptcies, negotiations in a prepackaged plan take place before the filing. But auto executives -- and many debt analysts -- say any kind of bankruptcy would be extremely difficult for one or more of the Big Three because of their complex relationships with dealers, unions, suppliers and other stakeholders. Many political leaders, including President-elect Barack Obama, agree.
Source:  The Detroit News

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Obama Chides Automakers in Fresh Blow

WASHINGTON -- Lawmakers sent Detroit packing last week, saying the Big Three auto makers had to establish their financial viability before any bailout, but it moved quickly over the weekend to give Citigroup Inc. $20 billion and promised as much as $275 billion more. On Monday, President-elect Barack Obama offered his own rebuke of the auto makers' stuck-in-the-mud approach to restructuring. Mr. Obama said Monday that "Americans take great pride" in the U.S. auto industry, which he also described as the "backbone of America's manufacturing base." But he added, "Taxpayers don't want to see more money wasted. So we need to see a plan, and when we see a plan, we're going to, I think, be able to shape the kind of assistance package that makes sense."
Source:  The Wall Street Journal (Subscription required)

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GM Incentive Requires Dealers to Order More Cars for Cash

DETROIT -- General Motors has notified its dealers that if they want dealer cash on certain models, they must order more inventory on other models. GM’s motive is to drive sales, but some dealers say the program could lead to competitive disadvantages. On Friday, Nov. 21, GM sent a notice to dealers advising them of the November Re-Consensus Dealer Cash Program. John McDonald, a GM spokesman, declined to discuss the specifics of the program but said GM has tight finances and can’t offer traditional incentive programs. “It’s tough to sell vehicles right now, so we’re doing what we can to help dealers acquire and sell those vehicles,” said McDonald. He added that “dealers take the vehicles they can sell; every dealer makes their own business decision on what they think they can sell.”
Source:  Automotive News (Subscription required)

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Nissan Pulls Out of Detroit and Chicago Shows

Nissan North America has dropped out of next year's Detroit and Chicago auto shows, citing depressed economic conditions. The decision makes Nissan the biggest automaker to skip out on Detroit's North American International Auto Show. In addition to Nissan and its Infiniti brand, Mitsubishi, Suzuki, Land Rover, Rolls-Royce and Ferrari have withdrawn from the January venue. Chicago's show is scheduled for February. Nissan corporate spokesman Alan Buddendeck said the decision reflects the state of the industry and not the Detroit and Chicago shows themselves. He said the Japanese automaker believes it got its new-product messages for 2009 across at the Los Angeles auto show last week. The company unveiled the 370Z roadster and the upcoming Cube in Los Angeles.
Source: Automotive News (Subscription required.)

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Ford Dealers: Mulally Should Keep His Job

DETROIT -- [Ford CEO Alan] Mulally should keep his job, and U.S. legislators should approve emergency loans to the Detroit 3, members of the Ford and Lincoln-Mercury national dealer councils say in a letter to Automotive News. “It is critical that government assistance be given to help stabilize the industry and help us emerge from the current recession and credit crisis,” 50 dealers wrote in the letter. Brian Jarrett, chairman of the Ford council and a dealer in Winter Haven, Fla., said the dealers spoke up because of cries last week that the Detroit 3 CEOs should be ousted. Mulally, who joined Ford in September 2006, is a different case, Jarrett said. “Since he’s been here, he has been transforming Ford and doing the kind of things that the lawmakers say that the industry needs to do,” Jarrett said. “I just don’t think he’s getting the credit he deserves.”
Source:  Automotive News (Subscription required.)

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The Car of the Future -- But at What Cost?

Hybrid Vehicles Are Popular, but Making Them Profitable Is a Challenge
Many members of Congress believe they know what the car company of the future should look like. "A business model based on gas -- a gas-guzzling past -- is unacceptable," Sen. Charles E. Schumer (D-N.Y.) said last week. "We need a business model based on cars of the future, and we already know what that future is: the plug-in hybrid electric car." But the car company Schumer and other lawmakers envision for the future could turn out to be a money-losing operation, not part of a "sustainable U.S. auto industry" that President-elect Barack Obama and most members of Congress say they want to create.
Source:  Washington Post

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Opinion: Pundits Unfairly Target American Automakers
by Warren Brown

The Mob of Pundits (MOP) is out to lynch the domestic automobile industry. According to the MOP crowd, American car companies have messed up -- making too many trucks and sport-utility vehicles, ignoring consumer and governmental demands for more fuel-efficient vehicles... It's baloney.  Car companies follow market demand much more than they generate it. In a cheap-gas economy, trucks and big engines made big money for everybody. Were GM, Ford and Chrysler supposed to sacrifice that market in favor of fuel-sippers, which, before high fuel prices in the summers of 2007 and 2008, barely constituted 4 percent of new U.S. vehicle sales? The MOP brigade says American car companies should have seen high fuel prices coming. If that's true, what about Toyota, which chose to introduce a revamped, super-sized, fuel-consumptive version of its Tundra pickup this year just as gasoline prices were spiking? New Tundra sales tanked as a result, forcing Toyota to curtail production of that model. None of this is to excuse the American car companies for mistakes they have made. They've made many. But they've also done many things right, contributing to the defense of this country; helping to create a viable middle class, especially in America's minority communities; and contributing to technological advancements in the global automobile industry, as any historical evaluation of automobile technology would demonstrate. The potential failure confronting GM, Ford and Chrysler is not Detroit's alone. It belongs to all of us. We've failed to step up with a workable industrial policy, a meaningful energy policy and an educational system that prepares Americans for global competition. It's way past time that we do so.
Source:  Washington Post

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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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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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Lenovo Extends Employee Pricing to NADA Members

Great savings are available on all ThinkPad notebooks and accessories. Lenovo's ThinkPad SL notebook built for small businesses with legendary ThinkPad reliability, plus advanced wireless and multimedia features, starts at only $449! (Offer ends December 1.)  To take advantage of these savings, visit NADA's PC Purchase Program online  (member login required), click www.lenovo.com/shop/deals/nada, then click "Special Offers," or call (800) 426-7235, Option 1, Ext. 4838. 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
 
"This is great news for consumers and auto dealers alike. These steps will go a long way in helping to restore the consumer confidence that we need to return our country to economic stability. Dealers will be making sure that their customers are fully aware of the new opportunities they have when it comes to auto financing."

   
-- NADA Chairman Annette Sykora commending today's action by the Federal Reserve and Treasury to increase the availability of auto loans, NADA Newswire, Nov. 25


"Since he's been here, he has been transforming Ford and doing the kind of things that the lawmakers say that the industry needs to do. I just don't think he's getting the credit he deserves." 

    -- Brian Jarrett, chairman of the Ford council and a dealer in Winter Haven, Fla., responding to a letter sent by the Ford and Lincoln Mercury dealer council to Automotive News in support of Ford Motor Co. President and CEO Alan Mulally, Automotive News, Nov. 25


"[American automakers] have also done many things right, contributing to the defense of this country; helping to create a viable middle class, especially in America's minority communities; and contributing to technological advancements in the global automobile industry, as any historical evaluation of automobile technology would demonstrate. The potential failure confronting GM, Ford and Chrysler is not Detroit's alone."

    -- Washington Post columnist Warren Brown, Nov. 24
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
 

'NBC Nightly News with Brian Williams' reports: "Demise of a local car dealership leaves a big dent."




 
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


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.