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Top Stories
Pelosi Likes Idea of 'Car Czar' to Audit Bailout
U.S. Could Take Stakes in Big 3
$15B Could Help Automakers Now, But What About Later?
Lobbyists Converge on Washington for Piece of Stimulus, Auto Aid
Auto Dealerships Brace for Shutdowns
Wagoner Defenders Speak Out
In Magazine Ad, GM Atones for Mistakes
Study: Autos Bankruptcy Would be 'Catastrophic' to U.S.
Congressman Opposes Chrysler's Bid for Loans
NADA Update
NADA Offers Virtual Seminar to Help Dealers in 'Tough Times'
Pre-Registration for 2009 Convention Extended to Dec. 19
NADA to Members: Verify Contact Information to Stay Informed
NADA to Host Virtual Seminar Today on Changes to Telemarketing Rules
STAR Answers Dealers' Questions About Hardware Based Systems
Lenovo Offers Holiday Savings
Top Stories
Pelosi Likes Idea of 'Car Czar' to Audit Bailout

Tense talks are continuing on a bill to provide financial aid to the auto industry as the White House pushes tougher consequences than congressional Democrats embrace for failure by the carmakers to bring costs under control. The Bush administration would allow a "car czar" envisioned in the legislation to force the companies into bankruptcy if they weren't doing enough to cut labor costs, restructure their debt and downsize to stay afloat. At the same time, the head of the United Auto Workers, Ron Gettelfinger, signaled that his union might demand an equity stake in General Motors Corp., if asked to give up more. The fast-paced developments come amid an environment of general economic instability, the Congress and the presidency both in transition, a ricocheting Wall Street and the Federal Reserve Board, Treasury and other agencies fighting to steady the reeling financial industry. House Speaker Nancy Pelosi said she supports the concept of a federal overseer of any rescue plan, saying she lacked confidence the heads of the car companies could solve the problem if "left to their own devices." Pelosi appeared on morning television Tuesday after a night of intense Capitol Hill discussions aimed at narrowing the differences over a $15 billion bill that would, among other things, rush short-term loans to the industry. The plan would require that the Big Three reinvent itself to survive — and that it pay back the government if it doesn't. The package could come to a vote as early as Wednesday. Pelosi said she thought taxpayers should consider it "a second chance" rather than a bailout.
Source:  Associated Press

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U.S. Could Take Stakes in Big 3

Bailout Plan Gives Government Warrants in Exchange for Loans; Passage Uncertain
WASHINGTON -- Congress and the White House inched toward a financial rescue of the Big Three auto makers, negotiating legislation that would give the U.S. government a substantial ownership stake in the industry and a central role in its restructuring. Under terms of the draft legislation, which continued to evolve Monday evening, the government would receive warrants for stock equivalent to at least 20% of the loans any company receives. The company also would have to agree to limits on executive compensation and dividend payments, much like those contained in the government's $700 billion rescue of the financial industry. Assuming congressional Democrats and the White House come to agreement on the plan, the car industry would be the latest to submit to strict government scrutiny in return for a bailout, joining most prominently the banking sector. The auto industry would undergo a restructuring process akin to bankruptcy reorganization, only with fewer rigors and with the government, not a judge, in control, and with many associated political complications.
Source:  The Wall Street Journal (Subscription required.)

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$15B Could Help Automakers Now, But What About Later?

Crafting of legislation to funnel $15 billion in emergency loans to General Motors and Chrysler was in its final stages late Monday. Though the beleaguered car companies are in no position to argue, the bill assumes they have made serious mistakes and need a government-run overhaul to avoid financial thin ice again. In fact, just getting the outline of a deal required hurdling strong arguments in Congress and elsewhere that the government should let the weakest auto companies fail, then help pick up the pieces, if necessary. "I have my doubts how this can be fixed, short of a bankruptcy," Sen. Jeff Sessions, R-Ala., said Monday afternoon while arguing against any bailout loans. Still, lawmakers and the White House seemed swayed by the enormity of potential damage. As calculated in the proposed bill, the loans would protect 355,000 U.S. auto jobs and an additional 4.5 million in related industries. It also would safeguard retirement and health care benefits for a million retirees and dependents.
Source:  USA TODAY

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Lobbyists Converge on Washington for Piece of Stimulus, Auto Aid

Last week it was auto industry suppliers. Yesterday it was mayors from the nation's biggest cities. Now, auto dealers from across the country have arrived in Washington. While some of the lobbying has been conducted by the usual hands on K Street, a parade of trade groups, unions and business owners have chosen to voice their pleas in person. Some of the most determined lobbying has come from representatives of the auto industry, who have converged on Washington in an all-out effort to build support for a rescue of the Big Three. Their arrival follows that of the chief executives of General Motors, Chrysler and Ford, who have twice tried to press lawmakers for emergency loans. Annette Sykora, chairman of the National Automobile Dealers Association, said members of her group began booking hotel rooms in Washington and scheduling meetings with lawmakers a few weeks ago, as soon as they learned Congress would return after Thanksgiving to reconsider an auto industry rescue plan. As a result, she said, she has spent more days in Washington over the past month than she has at her home in Slaton, Tex.
Source:  The Washington Post

 

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Auto Dealerships Brace for Shutdowns

As Denny Fitzpatrick, a Chevrolet-Hummer dealer near Oakland, Calif., has watched the top Detroit auto executives plead for money from Congress, he has been rooting for them — but with no great conviction. With a bailout moving through Capitol Hill, “we have a chance of being hung with a softer rope,” said Mr. Fitzpatrick, chairman of the California New Car Dealers Association. His gallows humor is typical of dealers these days who believe they are on the chopping block, whatever happens to the Detroit automobile companies. All three carmakers have told Congress they need to cut their dealer networks as a fundamental element of their survival plans. Even as Congress works on a bailout for Detroit, many dealers are still likely to be nudged, or forced, out of business. The dealers, of course, do not agree that they are part of Detroit’s problem. They argue that they invested millions of dollars in their dealerships, buying the land, building the facilities and providing services for customers. They also said that they build good will for automobile companies by supporting local Little League teams and other charities. James T. Fleming, president of the Connecticut Automotive Retailers Association, said that fewer dealerships “will happen one way or another,” and that a Congressional rescue package “is preferable to bankruptcy or no action.” The dealers hope that Congress will help them by giving consumers temporary tax breaks on auto loan interest, and they want other help to loosen credit so dealers can finance their inventories.
Source:  The New York Times

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Wagoner Defenders Speak Out

As Dodd calls for GM CEO to exit, board stands by him
Supporters and critics of General Motors Corp. Chairman and CEO Rick Wagoner agreed on one thing Monday: Congress shouldn't get to replace him. Outspoken GM Vice Chairman Bob Lutz, a Wagoner backer, told the Free Press: "Removing Rick would be the ultimate in stupid symbolic action. Roughly akin to sacking the mayor because his city has been hit by an earthquake. Or the Aztecs throwing a virgin into the volcano." The uproar over replacing Wagoner came after Sen. Chris Dodd, D-Conn., said Sunday that GM should have new management if the nation is to grant it federal loans to survive the economic downturn. GM released a statement Sunday saying that its board, employees, dealers and suppliers all support Wagoner and "are confident he is the person to lead GM through these difficult times."
Source:  Detroit Free Press

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In Magazine Ad, GM Atones for Mistakes

General Motors, the world's largest automaker, yesterday candidly confessed to the blunders that has led it to near-collapse in a full-page advertisement in Automotive News. "While we're still the U.S. sales leader, we acknowledge we have disappointed you," the company said in the magazine ad. "At times we violated your trust by letting our quality fall below industry standards and our designs become lackluster. We have proliferated our brands and dealer network to the point where we lost adequate focus on our core U.S. market. We also biased our product mix toward pick-up trucks and SUVs. And, we made commitments to compensation plans that have proven to be unsustainable in today's globally competitive industry." The company laid out the reasons why it needs an $18 billion government bailout and vowed to turn around its business. "What exposes us to failure now is not our product lineup, or our business plan or our long-term strategy," GM's chairman and chief executive G. Richard Wagoner Jr. said in his initial testimony to Congress. "What exposes us to failure now is the global financial crisis which has severely restricted credit availability and reduced industry sales to the lowest per capita level since World War II."
Source:  Washington Post

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Study: Autos Bankruptcy Would be 'Catastrophic' to U.S.

A bankruptcy filing by two of the Detroit Big Three would cost taxpayers more than four times what they would pay if Congress was to give them a $30 billion bridge loan, according to a report released this morning by Anderson Economic Group and BBK, an international business advisory firm. The study found the job loss would reverberate through the national economy, causing damage that would be "unequivocally much higher than the losses from company restructuring with the help of federal bridge loans," the study concluded. The catastrophe of losing two automakers would include, within days, a "complete shutdown of nearly all auto production in the U.S. for some time," according to Kriss Andrews, managing director and automotive practice lead for BBK. There would be an inability to manage the supply base where "nearly every part on every car comes from one, and only one, supplier." The contagion would likely spread to the heavy-truck industry and construction, as well, he said. Other effects include: disruption of the credit market and further devaluation of automotive assets; jobs and expertise being permanently shifted to other countries making the U.S. dependent on foreign governments and technology; and foreign automakers would benefit from a shift in consumer buying patterns.
Source:  The Detroit News

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Congressman Opposes Chrysler's Bid for Loans

Chrysler LLC's bid to get emergency loans from the federal government ran into opposition last week when congressmen asked why the private-equity group that controls the auto maker doesn't put up some money itself. Now at least one congressman is raising objections because of another deal by Cerberus Capital Management LP that led to the loss of American jobs. Wisconsin Rep. Steve Kagen (D) on Monday complained the Cerberus, which acquired 80.1% of Chrysler last year, took over paper company NewPage Corp., which then closed two factories in Northeast Wisconsin, eliminating 750 jobs. "I'm dead set against any proposal that would attempt to ask the hardworking taxpayers of Kimberly and Niagara who've just lost their jobs to pay the hangmen," Mr. Kagen said, referring to the two towns that were home to the factories. In congressional hearings last week, Chrysler Chief Executive Robert Nardelli was pressed on why he doesn't seek help from Cerberus. He said he had, but was turned down.
Source:  The Wall Street Journal (Subscription required.)

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NADA Update
NADA Offers Virtual Seminar to Help Dealers in 'Tough Times'

In response to the challenges facing dealers during these uncertain times, NADA is offering a presentation featuring two speakers who can explain the options and detail the steps dealers need to take to protect their businesses. Tough Times, Tougher Dealers: Saving Your Dealership’s Assets will be offered as a virtual seminar in December and January and as a workshop at the 2009 NADA Convention & Exposition in New Orleans.

Tough Times, Tougher Dealers, presented by Michael Charapp, Esq., of Charapp & Weiss, LLP and Bradley Nicklin, CPA, of Beers + Cutler, discusses the tough issues facing almost every dealer today. It is intended to help dealers and managers understand the steps required to protect their dealerships’ assets during these tough economic times.

In this presentation, participants will learn valuable information on cash management, expense control, and franchise rights issues. They will also learn how to deal with bankruptcy—both at the manufacturer and dealership level—as well as franchise terminations, brand terminations, and the legal ramifications of reducing a workforce. Additionally, the speakers will present other practical considerations for surviving this tough environment, both legally and financially.

The virtual seminar will be offered twice—on Dec. 18 from 1–3 p.m. EST and Jan. 13 from 1–3 p.m. EST. The registration fee is only $50 per computer connection. For more information or to register, visit www.nada.org/seminars.

The convention workshop will also be offered twice—on Saturday, Jan. 24 at 11 a.m. CST and Monday, Jan. 26 at 8:30 a.m. CST.

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Pre-Registration for 2009 Convention Extended to Dec. 19

Online registration for NADA's 2009 Convention & Exposition in New Orleans has been extended to Dec. 19. After Dec. 19, convention attendees must register onsite but may obtain housing through Experient until Dec. 23. Members and guests who haven’t already registered to attend the convention can do so online or by faxing a registration form to (703) 883-9480. Several New Orleans hotels already are sold out, so members are urged to register early to avoid being shut out of discounted housing. For more on NADA's 92nd annual convention, click here.

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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 Today 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 today 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 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 Offers Holiday Savings

Lenovo is offering NADA members savings of up to 35 percent 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 -- is available at a discount with eCoupon USXHOLIDAY. This offer ends Dec. 31. To take advantage of these savings, visit NADA's Online PC Purchase program (log-in required), click www.lenovo.com/shop/deals/nada, then "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
 
"We made progress and hope to continue making progress. We want to move quickly, but it's important that we get the policy right."

   
-- Deputy White House press secretary Tony Fratto in talks about a bill that would provide financial aid to the auto industry, Associated Press, Dec. 9


"Well, whether we need it or not, I think it's reasonable that when the federal government steps in with taxpayer money ... they're not going to lend us the money and just say, 'Do the best you can with it and tell us when you need more.' Obviously, there's going to be some kind of oversight and I think that's a reasonable thing to expect."

    -- Robert Lutz, GM's vice president of global product development, said on CBS's "The Early Show" he could accept a federally appointed czar to supervise implementation of a restructuring plan, Associated Press, Dec. 9


"While we take no satisfaction in loaning taxpayer money to these companies, we know it must be done. This is no blank check or blind hope."

   
-- Senate Majority Leader Harry Reid, D-Nev., Associated Press, Dec. 9
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) Tough Times, Tougher Dealers: Saving Your Dealership’s Assets

(2) Technology-Enabled Sales and Marketing: Putting People Skills Back into the E-process

(3) The Five Essentials to Create and Maintain Accountability in Your Dealership

Tough Times speakers Michael Charapp, Esq., of Charapp & Weiss, LLP and Bradley Nicklin, CPA, of Beers + Cutler, will discuss the tough issues facing almost every dealer today and teach dealers and managers how to protect their dealerships’ assets during these tough economic times. Participants will learn how to deal with bankruptcy—both at the manufacturer and dealership level—as well as franchise terminations, brand terminations, and the legal ramifications of reducing a workforce.

Technology speaker Jim Ziegler of Ziegler SuperSystems, Inc. will show attendees how to use new online social networks and online technology to generate sales. Participants will learn how to incorporate video blogging and video walk-arounds into their online marketplaces, and will learn how to build stronger personal relationships with customers over the phone and Internet.

Accountability speaker Michael Rees of DealerPro Sales Solutions will teach dealers and managers how to hold their teams accountable for attracting and retaining customers. Participants will learn how to keep their employees on task and learn how to approach those who don’t.

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.