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At a Glance...
Top Stories
On Capitol Hill, Big 3 Put on Hard Sell
GM, Chrysler Considering Bankruptcy to Get Bailout
GM: Shrink Brands, Pay, Jobs, Dealers
UAW Offers Detroit Concessions
Reid: Votes Lacking to Use Bailout Fund
Fear of Bankruptcy Scares Off GM Customers
Ford Plan: Trim 266 Stores
Saturn and Saab Dealers Face Uncertain Fates
Iconic Saturn Brand Could Stay on the Road Beyond GM
Chrysler Proposes Joint Venture to Improve Energy Technology
NADA Update
NADA to Members: Verify Contact Information to Stay Informed
NADA to Host Virtual Seminar Tuesday on Changes to Telemarketing Rules
STAR Answers Dealers' Questions About Hardware Based Systems
Top Stories
On Capitol Hill, Big 3 Put on Hard Sell

WASHINGTON -- Executives from Detroit's Big Three automakers made a fast and furious pitch for $34 billion in emergency aid Wednesday, blanketing Capitol Hill to sell skeptical lawmakers on the restructuring plans they sent to Congress this week to justify federal help. The lobbying blitz came as the chief executives of General Motors Corp., Ford Motor Co. and Chrysler LLC, and United Auto Workers President Ron Gettelfinger return to Washington for high stakes appearances today and Friday before House and Senate committees considering their requests for quick aid. GM Chief Operating Officer Fritz Henderson said he got a good reception and some skepticism during more than two hours of briefings on the company's plan with congressional aides and some lawmakers. GM is seeking $18 billion in federal loans and needs $4 billion by the end of the month to survive into next year. Chrysler needs $7 billion by the end of the year to stay afloat, while Ford is requesting a $9 billion "stand-by" line of credit it would tap only if the economy worsens significantly. Congress will return to session next week to approve aid if lawmakers can settle on a bill, but they are no closer to reaching an agreement. The key stumbling block remains whether to tap the $700 billion Wall Street rescue fund to help the auto companies or drop fuel efficiency strings from a $25 billion Energy Department loan program for retooling factories to build more fuel-sipping vehicles.
Source:  The Detroit News

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GM, Chrysler Considering Bankruptcy to Get Bailout

General Motors Corp. and Chrysler LLC are considering accepting a pre-arranged bankruptcy as the last-resort price of getting a multi billion dollar government bailout, Bloomberg reported, citing a person familiar with internal discussions. Industry executives and analysts say the immediate carnage from a bankruptcy of General Motors Corp, Ford Motor Co. or Chrysler would spread throughout an industry that is bleeding cash in a global slowdown. All three automakers have urged Congress to authorise $34 billion in loans and credit lines, saying they will restructure, and cut models, jobs and executive pay to remain viable. The White House did not dismiss the industry's $34 billion figure on Wednesday but said it was too early to say what it might support on an emergency basis.
Source:  Reuters

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GM: Shrink Brands, Pay, Jobs, Dealers

General Motors Corp. could run short of the cash it needs to operate this month if Congress doesn't approve $4 billion in loans, the automaker said Tuesday in a 30-page report requesting federal aid. "The first $4 billion is crucial," President and Chief Operating Officer Fritz Henderson said on a conference call. "Absent support, we can't continue to operate." Chairman and Chief Executive Officer Rick Wagoner and the company's board members will take $1 salaries in 2009. GM said it will focus on so-called core brands of Chevrolet, Cadillac, Buick and GMC. Hummer is for sale, Saab will be, and Pontiac would be a niche brand. Saturn may be sold or closed.
Source:  Detroit Free Press

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UAW Offers Detroit Concessions

Urging an Auto Bailout, Union Retreats on Terms Of Health Care, Jobs Bank
Ron Gettelfinger, president of the United Auto Workers, said yesterday that his union was ready to make new concessions despite a landmark cost-cutting labor contract signed just last year, as he urged Congress and the Bush administration to step forward with a multibillion dollar rescue plan for Detroit's beleaguered automakers. Gettelfinger made the new concessions reluctantly, complaining that the federal government was stepping in to rescue financial institutions while letting the car companies dangle near collapse. "I'm having a little problem myself understanding why there's a double standard here," he told reporters after a meeting of union leadership. "But we accept it and we'll play by those rules." The president of Chrysler, Jim Press, stopped at an auto dealership in New Carrollton, Md. where dealers and local officials said the collapse of the automakers would spread pain far beyond Detroit. "If we don't get these loans, and for some reason we have to stop producing cars," Press said, "the dealers would have no business. It's catastrophic." "It's not just the dealer," said Tammy Darvish, vice president of the chain of Darcars dealerships. "I have 233 local vendors that I do business with, and I pay them combined over $83 million a year. You have oil guys, messenger services who would be affected."
Source:  Washington Post

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Reid: Votes Lacking to Use Bailout Fund

WASHINGTON — Imperiled automakers and their union worked today to sell a skeptical Congress on a $34-billion aid plan, promising labor concessions and restructuring, but Senate Majority Leader Harry Reid said there still aren’t enough votes to tap the $700-billion federal bailout fund to prop up the foundering companies. A day before the chiefs of the auto companies return to Capitol Hill to make their urgent cases for loans, Reid said the money was unlikely to come from the Wall Street rescue fund. “I just don’t think we have the votes to do that now,” he said in an interview. In Capitol Hill meetings, industry officials said the collapse of one or more of the Detroit carmakers could greatly worsen the nation’s recession and undermine the companies’ ability to survive. “We’re on the brink with the U.S. auto manufacturing industry. We’re down to months left,” Chrysler’s vice chairman, Jim Press, said in a separate interview. “If we have a catastrophic failure of one of these car companies, in this tender environment for the economy, it’s a huge blow. It could trigger a depression.”
Source:  Associated Press

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Fear of Bankruptcy Scares Off GM Customers

Is the smell of death keeping customers away from General Motors showrooms? You bet, says Mark LaNeve, GM’s vice president of North American sales, service and marketing. “There’s not a doubt in my mind that it has affected business,” LaNeve said yesterday in a conference call with reporters and analysts. That’s consistent with experts who say that filing for bankruptcy protection would doom an automaker. The experts say consumers are wary of brands that might not be around to handle service and repairs over the long haul. LaNeve cited a report by CNW Marketing Research Inc., of Bandon, Ore., that 20 to 30 percent of new-car buyers are avoiding Detroit 3 brands because of negative news about the brands’ financial health.
Source:  Automotive News (Subscription required.)

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Ford Plan: Trim 266 Stores

DETROIT -- In its plan to Congress submitted today, Ford Motor Co. said it expects to cut its U.S. dealership network by 266 stores in 2008. By year end, Ford estimates it will have 3,790 domestic-brand dealerships in the United States. That would be a 6.6 percent drop from 4,056 Ford, Lincoln and Mercury stores at the beginning of the year. As of today’s filing, the company said it has 3,854 dealerships. The number of dealerships in Ford’s 130 largest markets will be about 1,875 by year end, Ford said. That is a reduction of 367 stores, or 16 percent, from the number of large-market dealerships the automaker had at the end of 2005. Ford’s overall domestic-brand dealership count is down by 606 stores, or 14 percent for that same period. “At our current and expected future market share, we clearly have too many dealers and therefore have made it increasingly difficult to sustain a healthy and profitable dealer network,” Ford said in a written plan submitted to Congress this morning. “We will continue to work collaboratively with our dealers to reduce our dealer network to match our sales, market share and dealer sales objectives.”
Source:  Automotive News (Subscription required.)

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Saturn and Saab Dealers Face Uncertain Fates

George Nahas owned only an Oldsmobile dealership when General Motors announced in 2000 that it would kill the brand. So he moved on -- to Saturn. Nahas, who now owns two Saturn stores in Alabama and Florida, again faces the possibility that the struggling automaker will take away his livelihood. “I feel violated,” Nahas said. “Just a couple of weeks ago they were telling us how viable Saturn was to General Motors. They were asking all of us to help them get the $25 billion aid package.” GM is seeking a new direction for Saturn and is selling Swedish brand Saab, according to the recovery strategy the automaker gave yesterday to Congress. GM may sell or close Saturn, GM COO Fritz Henderson said, adding the brand is “just not successful.”
Source:  Automotive News (Subscription required.)

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Iconic Saturn Brand Could Stay on the Road Beyond GM

NASHVILLE — Whether or not General Motors receives emergency federal loans, it may have to sacrifice its iconic Saturn brand, which got its start in the mid-1980s. GM's sales pitch to win billions in federal assistance includes the possible sale or shutdown of the once-promising Saturn brand. Many observers, including a longtime Saturn dealer who owns three Nashville-area outlets, said they think Saturn will survive as a brand, perhaps sold to a rival foreign manufacturer. "GM will explore options to sell the whole division," said C.M. "Bill" Gatton, a Bristol, Tenn., GM dealer who bought the three Saturn stores in 1994. "I believe there would be other automakers interested in taking it over."
Source:  USA TODAY

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Chrysler Proposes Joint Venture to Improve Energy Technology

WASHINGTON -- Chrysler LLC's plan for a government rescue includes a proposal that the auto makers and federal government establish "an independent joint venture" to develop improved energy technology, such as batteries for electric and hybrid vehicles. At the same time, Cerberus, its private-equity owner, is offering concessions to secure a $7 billion bridge loan. In his testimony before Congress later this week, Chrysler Chief Executive Bob Nardelli will suggest that part of the $25 billion energy-security fund be put into this new entity, rather than having each of the Big Three try to develop the same critical component. "Then each company would take the technology and add its own branding and styling" and other features for its own models, a Chrysler executive said. His pitch, for an industry driven by intense competition, is based on the need to develop technology in the U.S. now, rather than allow Asia to develop vehicle batteries. "We don't want to trade oil dependence for technology dependence," this Chrysler executive said.
Source:  The Wall Street Journal (Subscription required.)

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NADA Update
NADA to Members: Verify Contact Information to Stay Informed

NADA's Membership Department is urging all association members to verify their contact information through a new online process available at www.nada.org/membership. Members who maintain a current email and mailing address ensure that they will continue to receive important and timely updates from NADA. The new online verification process also allows members to easily change their contact information. Members may also visit www.nada.org/subscribe to manage their subscriptions to NADA's member newsletters, including the daily e-newsletter NADA Headlines.

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NADA to Host Virtual Seminar Tuesday 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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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
 
"The first $4 billion is crucial. Absent support, we can't continue to operate."

   
-- GM President and Chief Operating Officer Fritz Henderson calling for an immediate $4 billion federal loan, Detroit Free Press, Dec. 3


"If we have a catastrophic failure of one of these car companies, in this tender environment for the economy, it's a huge blow. It could trigger a depression."

    -- Chrysler Vice Chairman Jim Press explaining what would happen if the industry doesn't receive federal funding, Associated Press, Dec. 3


"It's not just the dealer. I have 233 local vendors that I do business with, and I pay them combined over $83 million a year."

    -- Tammy Darvish, vice president of the chain of Darcars dealerships in suburban Washington, explaining the importance of the auto industry to other businesses, Washington Post, Dec. 3
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.