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Wednesday, Dec. 10, 2008 RSSSEND TO A FRIENDPRINT
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At a Glance...
Top Stories
Auto Dealers Put Local Face on Need for Automaker Loans
Vote on Detroit Bailout Nears
Dealers Press Congress for Auto Aid
Auto Dealerships Brace for Shutdowns
Don't Swap Out Big Three Chiefs, Iacocca Says
Study: Autos Bankruptcy Would be 'Catastrophic' to U.S.
Ford Benefits from CEO's Turn to Road Less Traveled
Foreign Automakers Say Little in Aid Debate
NADA Update
NADA Offers Virtual Seminar to Help Dealers in 'Tough Times'
NADA to Members: Verify Contact Information to Stay Informed
STAR Answers Dealers' Questions About Hardware Based Systems
Lenovo Offers Holiday Savings
Top Stories
Auto Dealers Put Local Face on Need for Automaker Loans


(From left) Iowa association executive Gary Thomas
and NADA Vice Chairman John McEleney meet with
Sen. Charles Grassley (R-Iowa) on Tuesday.

Dealers travel to Washington, DC to Urge Support for Bridge Loans and Legislation to Jumpstart Auto Sales
WASHINGTON — New car and truck dealers from across the country traveled to Washington Tuesday to meet with members of Congress urging their support for financial assistance for struggling automakers. The auto industry, including dealers, has been facing difficult times because of a significant slump in sales caused by the economic downturn and the credit crunch. Locally, this unprecedented crisis has already hurt small business owners that provide goods and services to dealerships as well as the many cities and towns that depend on auto sales for tax revenue. “Inaction by Congress would devastate not only the manufacturers but dealers and the economies of 'Main Streets' across America. Bankruptcy is not an option,” said Annette Sykora, the National Automobile Dealers Association (NADA) chairman. “We are urging members of Congress to consider how bankruptcy directly threatens their local dealers. Forced dealer closings will put more people out of work, increase foreclosures, shutter storefronts, idle real estate and threaten other local businesses.”

Despite deep discounts and consumers incentives, U.S. auto sales plunged to their lowest levels in 26 years. In 2008, auto sales fell by more than 3 million units from 2007 when auto sales accounted for more than $690 billion in U.S. retail sales, or about 20 percent of all retail sales. To help stimulate the economy, dealers also called on Congress to pass legislation, S. 3684 and H.R. 7273, providing tax incentives to boost auto sales. A spike in sales would immediately help stabilize the industry. “Allowing consumers to deduct the interest on their car loans, as well as state sales taxes, from their personal income taxes would help bring consumers back to the showrooms and get the economy back on track,” Sykora added. In addition, NADA asked Congress to push the Small Business Administration to expand a loan-guarantee program so more dealers can gain access to working capital they need to keep their small businesses open and their workforces employed. Nationally dealers employ 1.1 million people.
Source:  NADA Newswire

[Editor's Note: Congress could vote on the auto bridge loans as early as today. Please call members of Congress and have your employees call today to explain that inaction by Congress would devastate not only the manufacturers but dealers and communities across the country. Please help members of Congress understand this serious and economic downturn and how it has impacted your business. For more information on how to reach your members of Congress, call NADA's Legislative Office at (800) 563-1556.]

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Vote on Detroit Bailout Nears

Measure Would Create Car Czar To Oversee Rescue
The White House and congressional Democrats yesterday reached an "agreement in concept" on a plan that would throw a government lifeline to the faltering Detroit auto industry but require the auto giants, their workers and creditors to quickly negotiate a path to profitability or face the prospect of bankruptcy. The agreement, which is set for a vote in the House today, calls for the government to speed $15 billion in emergency loans to the car companies as soon as next week, and for President Bush to immediately name a car czar to oversee the bailout. The companies would be required by March 31 to cut costs, restructure debt and obtain concessions from labor sufficient to report a "positive net present value," according to a senior administration official... If the firms failed to make progress toward that goal, the agreement would require the car czar to revoke the loans and develop a new plan that could include the option of seeking Chapter 11 bankruptcy protection... If the companies could not agree on steps to guarantee their long-term survival, they would be denied additional federal assistance. The official said the agreement would create "three very serious sticks to ensure that this is truly what it was intended to be: bridge financing for firms that have a plan and a path to become competitive," rather than becoming "the first in a number of interminable loans that these guys can get to avoid making the hard choices." Last night, the agreement was still being drafted into legislation. But the official said "there's an agreement on the concept and the way forward, and we're hoping to accomplish that as quickly as possible." In the House, Democratic leaders were racing to make arrangements to bring the measure to a vote. With ambivalence toward another bailout running high among the public and many rank-and-file Democrats, House leaders arranged an "issues forum" yesterday in which Democratic lawmakers were able to ask questions about the proposal. The agreement faces a less certain fate in the closely-divided Senate, where Republican support is crucial to passage. Yesterday, a growing list of Republicans voiced opposition to the measure, and the White House began working to shore up GOP support.
Source:  The Washington Post

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Dealers Press Congress for Auto Aid

WASHINGTON -- More than 100 auto dealers and state dealer association executives are here this week to lobby for emergency federal loans to automakers -- and to safeguard their own interests, their leaders say. “It’s a good time for our folks to be in town and a good time to make our case that the dealer body is collateral damage, and they are part of the solution,” said David Regan, vice president for legislative affairs of the National Automobile Dealers Association. Dealers oppose moves by some government officials to mandate reductions in the numbers of dealerships. Dealers say the market should determine the right number of stores. They also seek consumer incentives aimed at boosting showroom traffic, vehicle sales and the overall economy. “We need a stimulus to generate consumer interest as soon as possible,” NADA’s Regan said. Dealer lobbying for vehicle-buying incentives will be useful whether the provisions are attached to the aid bill this week or a bigger stimulus bill later, he said. Dealers are prepared to lobby on Capitol Hill at least through Wednesday and perhaps longer, NADA officials said. Many have made congressional visits before, Regan said, but a few are first-timers. Texas dealer Annette Sykora told Automotive News at 4 p.m. she personally had been to seven or eight congressional offices [Tuesday] and had more to go. “We’ve been received well,” said Sykora, nearing the end of a hectic year as NADA's chairman. Dealers are visiting aid proponents to shore up support, opponents to change minds and undecided lawmakers to help them make up their minds, Regan said, adding: “We need to make the case with everybody.”
Source:  Automotive News (Subscription required.)

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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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Don't Swap Out Big Three Chiefs, Iacocca Says

Two days after a powerful lawmaker called for his ouster from General Motors, Rick Wagoner got a tacit endorsement Tuesday from one of the automotive industry’s biggest names: Lee Iacocca. In Tuesday’s statement, Mr. Iacocca didn’t mention Mr. Wagoner by name, but he made it perfectly clear that, in his view, subbing in a new chief executive at G.M. would be a big mistake at this make-or-break moment. “Having been there, I do not agree with the sentiment now coming out of Congress that the management should be changed as a condition of granting loans to the Detroit automakers,” Mr. Iacocca said in the statement, which came as Washington was close to agreeing on a $15 billion loan package for the Detroit Three.
Source:  The New York Times

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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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Ford Benefits from CEO's Turn to Road Less Traveled

DEARBORN, Mich. — On this rainy, cold, miserable Tuesday in December, Alan Mulally sits in his office at Ford Motor's headquarters, beaming. With Ford's sales down 19.5% this year, the economy showing no sign of recovery, and Congress and the White House working on loans to help the domestic auto industry survive, you'd think Mulally would have very little to smile about. But he's perfectly chipper, showing off a 1903 Indian head penny sent to him by a Ford dealer's son. For luck. "Isn't that great?" he says, peeling it out of its protective wrapper. "I'm going to keep that in my pocket." Compared with the other two domestic automakers, Ford looks like it's already been blessed. The automaker has $18.9 billion in cash and $10.7 billion in untapped credit, which Mulally says has his company positioned to survive the market falloff. Jeffrey Sonnenfeld, an associate dean at the Yale School of Management, says Mulally's ability to move quickly and not let ego get in the way have helped the company achieve much more than many expected. "He's had the courage to say he's largely accelerating a given plan, and he's fortified the top lieutenants around him. He's done a great job working with people who know what he doesn't know about the industry."
Source:  USA TODAY

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Foreign Automakers Say Little in Aid Debate

There has been no shortage of opinions throughout the debate over a federal bailout for Detroit’s struggling automakers. But one group has been notably silent: foreign car companies. Toyota, Honda, Nissan and nearly all the other foreign companies that build vehicles in the United States have said little publicly concerning whether their American rivals should get the billions of dollars in emergency aid they have requested in recent weeks. To be sure, the companies themselves have little to gain by commenting on the bailout beyond expressing concern about the general health of the industry. Anything more than that might leave them open to criticism over support they have received in various ways through the years from their governments. As a result of their muted stance in the debate, the foreign companies, which have invested close to $40 billion in 70 American facilities in the last 30 years, have largely escaped any blame for Detroit’s woes.
Source:  The New York Times

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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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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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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
 
"Inaction by Congress would devastate not only the manufacturers but dealers and the economies of 'Main Streets' across America. Bankruptcy is not an option. We are urging members of Congress to consider how bankruptcy directly threatens their local dealers."

   
-- NADA Chairman Annette Sykora, NADA Newswire, Dec. 9


"We're going to have a vote on this sometime. We can either have it sooner or we can have it later. We cannot let a few people stop us from doing the people's business."

   
-- Senate Majority Leader Harry Reid (D-Nev.) acknowledged the brewing battle in remarks on the Senate floor, but vowed to press ahead, even if it means keeping senators in Washington through the weekend, The Washington Post, Dec. 10


"It's a good time for our folks to be in town and a good time to make our case that the dealer body is collateral damage, and they are part of the solution."

    -- David Regan, NADA vice president for legislative affairs, adding that dealers need a stimulus to generate consumer interest as soon as possible and that lobbying efforts for vehicle-buying incentives will be useful whether the provisions are attached to the aid bill this week or a bigger stimulus bill later, Automotive News, Dec. 10


"This gets us to the 20-yard line, but getting over the goal line will take a major effort, particularly in the Senate where we need 60 votes."

    -- Sen. Carl Levin, referring to the $15 billion deal auto bailout deal reached late Tuesday by the White House and Congressional Democrats, The Detroit News, Dec. 10


"He's had the courage to say he's largely accelerating a given plan, and he's fortified the top lieutenants around him. He's done a great job working with people who know what he doesn't know about the industry."

    -- Jeffrey Sonnenfeld, an associate dean at the Yale School of Management, referring to the success of Ford's president and CEO Alan Mulally, USA TODAY, Dec. 10


"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
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.