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Top Stories
Big Three Fine-Tune Aid Pleas
Case for Aid Could Get Boost
Auto Union Chief Pleads for Government Bailout Help
Nissan's Ghosn Calls for Government Aid to Support Carmakers
Auto Dealerships Teeter as Big Three Decline
NBC-TV Report: Stuck in Reverse: Auto Dealerships Fight to Survive
Neighborly Ind. Car Dealers Face Troubles Together
GM Tells Dealers: To Earn More, Order More
Bankruptcy Could Offer GM More Flexibility
November Auto Sales Dreary, but Likely Up from Oct.
Luxury Cars Sit as Both Money, Mood Slip Away
Nissan Dealers to Fill Auto Show Void
NADA Update
NADA to Host Virtual Seminar on Changes to Telemarketing Rules
STAR Answers Dealers' Questions About Hardware Based Systems
Lenovo Extends Employee Pricing to NADA Members
Top Stories
Big Three Fine-Tune Aid Pleas

Loan requests may target pay, brands
The heads of Detroit's automakers will be making the most important pitches of their careers this week when they return to Washington to ask Congress a second time for $25 billion in emergency loans. GM's board met Sunday and will meet again today to review the automaker's plan, which will include debt-restructuring measures, more white-collar job cuts as well as concessions from hourly workers. A person familiar with the situation said the company was considering the elimination of as many as four of its eight brands. GM did not comment Sunday on speculation that the Saab, Pontiac or other brands might be at risk. The companies are each expected to submit two plans to Congress Tuesday -- a 12-page public summary and a roughly 100-page confidential report detailing their contingency plans and how they would spend any federal loans they receive.
Source:  The Detroit News

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Case for Aid Could Get Boost

Auto makers are expected to report another dismal month of new-car sales Wednesday, just as General Motors Corp., Ford Motor Co. and Chrysler LLC return to Capitol Hill to plead for a federal bailout. Yet vehicle sales in November are expected to come in at an annualized pace of just shy of 11 million vehicles, according to Barclays Capital, a slight improvement from October's depressed rate of 10.6 million. That rate would be five million vehicles below the year-ago seasonally adjusted annualized rate of 16.1 million. All auto makers, including even normally recession-resistant luxury brands such as Mercedes-Benz and BMW AG, are expected to post big declines, with the Detroit three suffering drops of 30% or more, according to analyst estimates. The dire news, however, could help the Big Three make their case in Washington for federal aid. Big declines for stronger rivals like BMW, Toyota Motor Corp. and Honda Motor Co. would support Detroit's argument that the financial crisis is a major cause of trouble across the auto industry, and that GM, Ford and Chrysler just need a "bridge loan" to help them hang on until the economy improves.
Source:  The Wall Street Journal (Subscription required.)

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Auto Union Chief Pleads for Government Bailout Help

WASHINGTON — The head of the United Auto Workers made a public plea Sunday for government help for U.S. carmakers as the Detroit Big Three put the final touches on company stabilization plans they must submit to Congress. We cannot afford to see these companies fail," said Ron Gettelfinger, the UAW chief, calling on Congress to approve the aid during a special session the week of Dec. 8. Gettelfinger said a $25 billion rescue plan for the carmakers is "not a bailout; this is a loan — a bridge loan — that will get us through until we can take a longer-term look at exactly what needs to be done in the industry."
Source:  Associated Press

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Nissan's Ghosn Calls for Government Aid to Support Carmakers

Nissan Motor Co., Japan's third-largest automaker, said governments in Japan, Europe and the U.S. should aid carmakers to prevent higher unemployment. "It's important for governments to finance industries that employ a lot of workers," Chief Executive Officer Carlos Ghosn said in a symposium in Tokyo today. "Without aid, the governments have to pay for higher costs, as it will destroy jobs in two to three years." "It's logical for companies not to seek mergers and acquisitions because the prospects for the financial system is unpredictable," Ghosn said. "The recent credit crunch has made it difficult" to raise funds, he said.
Source:  Bloomberg

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Auto Dealerships Teeter as Big Three Decline

QUINCY, Fla. — Bruce Thomas washed cars at his father’s General Motors dealership here at age 12, changed oil in high school, and sold his first Pontiac during college. He took over his family’s two dealerships, building a small fortune. In turn, he showered generosity on local churches, school athletic teams, charity golf tournaments and a group that helps women find jobs out of prison. But suddenly, all of Mr. Thomas’s success appears to be melting away. Days go by without a sale. His debts are mounting. “I’m trying to survive as a car dealer,” said Mr. Thomas, now 59, “and I don’t know if I can.” Even if Ford, Chrysler and G.M. survive, many believe a comeuppance is inevitable among dealerships; indeed, for years the nation has had more dealers for domestic brands than warranted by the sales volume of the Detroit automakers. The economic toll of a mass failure of dealerships around the country has already begun to harm the broader economy. In October alone, 20,000 employees of auto dealerships lost their jobs nationwide, more than half of those who were newly unemployed in the retail trade, according to the Labor Department. “We have never seen anything like this,” said Denny Fitzpatrick, owner of a Chevrolet-Hummer dealership outside Oakland and chairman of the California New Car Dealers Association. Having already dismissed 56 of his 114 employees, Mr. Fitzpatrick added, “You lay awake at night trying to figure out how to keep these doors open.” Car dealers are not entirely blameless for their fate. Auto analysts say they did not push Detroit hard enough to build better-quality, more efficient cars. They note that the dealers lobbied hard in state capitals for laws to protect their franchises from the Detroit manufacturers who wanted to limit their numbers and determine their locations.
Source:  The New York Times

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NBC-TV Report: Stuck in Reverse: Auto Dealerships Fight to Survive

The turmoil in the economy and the severe problems in the auto industry have created a ripple effect that is swamping dealerships across the county, reports Lester Holt, weekend anchor of "NBC Nightly News." In the Minneapolis area this weekend, the auto industry's troubles hit home. Six of Denny Hecker's popular chain of car dealerships closed their doors. "After more than 30 years of service ... the dealership said in a written statement 'it had found itself in the midst of a perfect storm of economic bad news...,'" NBC's Kevin Tibbles reports. About 400 employees will lose their jobs. "Auto dealerships around the country employ more than one million people. They account for about 20 percent of retail sales in the U.S., so they are huge part of the U.S economy. In fact, in terms of retail, they are the largest sector of the retail economy," said David Hyatt, NADA vice president of public affairs.
Source:  NBC Nightly News

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Neighborly Ind. Car Dealers Face Troubles Together

No customer voices competed with the harmony of "Silly Love Songs" flowing from the showroom speakers at Danville Chrysler Dodge Jeep. A competitor's blue-cross emblem beckoned through the windows from the dealership across the street. But Dugan Chevrolet Pontiac didn't see many customers on that lazy afternoon either. Downtime like this has become more common for the two suburban Indianapolis dealerships, which have waged a friendly competition for more than 40 years. Their sales have slid, their inventories are down, and now they both face dire warnings that their carmakers may not survive past this year without a government bailout. "Nobody did well in this marketplace where consumer sentiment had shifted so dramatically in just a few months," said Paul Taylor, chief economist for the National Automobile Dealers Association, which represents about 92 percent of U.S. car dealers. All told, the auto dealers association expects as many as 900 franchised new car dealerships to close this year, while about 200 open. The net result of about 700 fewer dealers would rank close to the sum from 1991, the middle of the last recession. Next year, the association forecasts as many as 900 net closings. ... [Sheldon] Sandler [managing director of Bel Air Partners, a New Jersey investment firm that advises car dealers] said a bankruptcy could be rough. It might hurt sales even more, reduce used car values and complicate warranties. It also may allow the carmakers to cancel franchise agreements normally protected by state laws.
Source:  Associated Press

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GM Tells Dealers: To Earn More, Order More

Some call remedy for inventories fair; others see risk
DETROIT — General Motors is asking dealers to order more vehicles to earn incentive cash but with a provision the automaker says is designed to balance dealer inventories. Under the program, dealers with high inventory don't have to order as many vehicles as those with lower supplies. GM insiders say it's intended to be fair to dealers while also driving sales. But some dealers say not participating in the program could put them at a competitive disadvantage. On Nov. 21, GM notified dealers of the November Re-Consensus Dealer Cash Program. The program, which runs through Jan. 5, requires each dealer to order a specified number of new vehicles, depending on current inventory level, to get up to $3,000 in dealer cash on certain vehicles. "It's a dangerous and slippery slope to entice dealers to buy more inventory than their good sense says they should buy," says Carter Myers, owner of Carter Myers Automotive in Charlottesville, Va.
Source:  Automotive News (Subscription required.)

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Bankruptcy Could Offer GM More Flexibility

General Motors insists that bankruptcy would be a catastrophic way to solve its cash problems, but that hasn't stopped analysts and bankers from speculating about how a restructuring might shake out. "What it's intended to do is give someone time to get his house in order," said David E. Cole, chairman of the Center for Automotive Research. But it could also drive customers to competitors and "put the [parts] suppliers right off the cliff," he said. In a prearranged bankruptcy, GM could impose an agreement on all creditors if it obtained the support of half of its creditors holding two-thirds of its debt, restructuring experts say. The holders of GM debt are probably banks and investment firms, many of which might also hold credit default swaps that might be liquidated in a negotiated deal. GM might also be forced to eliminate some of its lagging brands and use a bankruptcy package to circumvent state franchise laws that limit changes GM can make in its extensive dealer network. "Among the challenges GM has is too many brands," said Maryann Keller, an automotive analyst and author of a book on GM. "It can't shut them down because of existing obligations to dealers where state franchise law prevails."
Source:  Washington Post

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November Auto Sales Dreary, but Likely Up from Oct.

Industry watchers and car dealers say they expect this month's vehicle sales to come out slightly better than October's historic lows, but increased incentives haven't been enough to overcome tight credit, the crumbling economy and weak consumer confidence that are keeping consumers away from showrooms. Analysts say a number of factors may have stabilized sales, the most obvious being the collapse in gasoline prices, which have shed 75 cents a gallon in the past month. The average price of regular gas nationwide was $1.84 on Friday, down 55 percent from the all-time high of $4.11 in July, according to auto club AAA, the Oil Price Information Service and Wright Express. Automakers have ramped up sales incentives to near-record levels, as well. Individual dealers have piled on even more deals as they seek to clear out built-up inventory. The companies' sales results will come the same day they must submit a detailed plan to Congress that spells out how they will remain viable if they get $25 billion in government loans to stave off bankruptcy.
Source:  Associated Press

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Luxury Cars Sit as Both Money, Mood Slip Away

In past economic slumps, luxury-car makers have withstood the downturn better than their mass-market counterparts. Not so this year. Sales for the U.S. luxury-car market, which includes everything from a Lexus to a Lamborghini, fell 30% last month from a year earlier -- on par with the 31.9% decline for the overall market, according to Autodata Corp., a market research firm. Incentive spending -- such as zero-percent financing and cash rebates -- is on the rise, more than doubling for vehicles priced over $60,000... The average incentive spending on a premium car last month was about $8,100, compared with $3,430 a year earlier. But unlike past downturns, consumers aren't responding to traditional marketing devices like increased incentives, lease deals or beefed-up advertising, said BMW spokesman Tom Kowelski. "This is the most difficult period we've experienced in North America," Mr. Kowelski said.
Source:  The Wall Street Journal (Subscription required.)

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Nissan Dealers to Fill Auto Show Void

Retailers seek to generate buzz, sales
Two days after Nissan yanked its corporate participation in the upcoming North American International Auto Show, metro-area Nissan and Infiniti dealers have decided to mount their own display when the show opens in Detroit in January. "The ultimate, core purpose of auto shows is to create excitement among consumers and generate sales. That's what we're doing," said Doug Fox, cochairman of the NAIAS and an Ann Arbor Nissan dealer.
Source:  Detroit Free Press

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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 Hardware Based 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. To learn "What is recommended for general maintenance of hardware based systems?" 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
 
"It's important for governments to finance industries that employ a lot of workers. Without aid, the governments have to pay for higher costs, as it will destroy jobs in two to three years."

   
-- Nissan Motor Co. CEO Carlos Ghosn, Bloomberg, Dec. 1


[A] $25 billion rescue plan for the carmakers is "not a bailout; this is a loan — a bridge loan — that will get us through until we can take a longer-term look at exactly what needs to be done in the industry."

    -- UAW President Ron Gettelfinger in a public plea on Sunday for government help for U.S. carmakers, Associated Press, Nov. 30


"This is the most difficult period we've experienced in North America."

    --  BMW spokesman Tom Kowelski, referring to the slip in sales for the U.S. luxury-car market, which fell 30% last month from a year earlier, The Wall Street Journal, Nov. 30


"Auto dealerships around the country employ more than one million people. They account for about 20 percent of retail sales in the U.S., so they are huge part of the U.S economy. In fact ... they are the largest sector of the retail economy."

    -- David Hyatt, NADA vice president of public affairs, NBC Nightly News, Nov. 23

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) Developing Strategies for Innovation and Growth

(2) “Happy Days,” “Family Feud,” or “Survivor”: Which Best Describes Your Estate and Succession?

(3) How to Convert Lost Opportunities and Increase Closing Ratios of Online Leads

Strategies speaker Jay Rao of Babson College will discuss innovation as a key to organic growth within the dealership. Participants will learn how dealers and managers can benefit from sharpening their focus on organizational innovation and the entrepreneurial mindset.

Happy Days speakers Hugh Roberts and Ricci Victorio of The Rawls Group will provide participants with practical solutions for resolving estate and succession-planning issues. Participants will examine actual case histories and learn how to avoid unnecessary tax issues and family disputes.

Online Leads speakers Peter Martin and Irish Carroll of Cactus Sky Communications, Inc. will provide insight on communicating with customers online, responding to leads and inquiries, and increasing and maximizing closing ratios. Participants will learn best practices for establishing online relationships with customers.

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.