For optimal viewing through your web browser or PDA, click here.

NADA.org
Friday, Dec. 12, 2008 RSSSEND TO A FRIENDPRINT
ABOUT | JOIN | CONVENTION | CONTACT ATD LEADERSHIP
At a Glance...
Top Stories
NADA President to Meet at White House Today on Emergency Loans
White House Says Mulling TARP Funds for Automakers
Bailout Dead, Automakers in Search of a Lifeline
Options Narrow for GM, Chrysler
Auto Bailout Talks Collapse Over Union Wages
GM Hires Bankruptcy Advisers
Ky. Auto Dealers Disappointed by McConnell's Opposition to Bailout
GM Looks to Credit Unions to Help Finance New Vehicles
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
NADA President to Meet at White House Today on Emergency Loans

WASHINGTON – NADA President Phil Brady will have meetings at the White House later today with representatives from the National Economic Council. Brady will urge the White House to move quickly to use funds from the Troubled Assets Relief Program (TARP) to avoid the collapse of America’s auto industry.

“NADA is very disappointed that Congress failed to pass legislation to stabilize the auto industry,” said NADA Chairman Annette Sykora. “We are encouraged, however, by today’s statement from the White House that it will consider use of the TARP program ‘to prevent a collapse of the troubled automakers.’ We agree with the White House that it would be ‘irresponsible to further weaken and destabilize our economy,’” Sykora said.

NADA is urging all its dealer members to call the White House Comment Line at (202) 456-1111 or email at comments@whitehouse.gov, and urge that quick action be taken to provide the necessary funding to prevent a collapse of the auto industry.

“Failure of an automaker would have a domino effect on dealers and suppliers,” Sykora added. “Bankruptcy would further threaten the availability of credit for dealers for consumer purchases and financing the vehicle inventory on their lots.”

According to analysts, the damage from a bankruptcy in the auto industry would be “catastrophic” to the nation’s economy.
Source:  NADA Newswire

[back to top]

White House Says Mulling TARP Funds for Automakers

WASHINGTON -- The Bush administration, signaling a possible shift in policy, will consider using money set aside for rescue of financial institutions to make emergency loans to automakers, the White House said this morning. The word comes in the aftermath of stunning rejection by the Senate last night of legislation to provide $14 billion in emergency loans to prevent the collapse of General Motors and Chrysler LLC. President Bush and his appointees have resisted using any of $700 billion approved in October for financial institutions to provide industry help -- despite claims by Democrats that the failure of one or more automakers would have widespread devastating economic effects. U.S. Sen. Carl Levin, D-Mich., said the effort to provide the emergency bridge loans remains “very much alive.” “I am encouraged that the White House said today that they will consider other options to assist the auto companies, including use of the TARP program,” Levin said in a statement.
Source:  Automotive News (Subscription required.)

[Editor's Note: Dealers are urged to contact the White House IMMEDIATELY by calling (202) 456-1414 or emailing comments@whitehouse.gov. Dealers should strongly encourage President Bush to use TARP funds to aid the auto industry.  The White House needs to understand that bankruptcy is not an option. Bankruptcy would further decimate both manufacturers and dealers. Click here for the key points to make when calling the White House.]

[back to top]

Bailout Dead, Automakers in Search of a Lifeline

Their efforts in Congress squashed, U.S. automakers are depending upon a reluctant White House to quickly provide a multibillion lifeline to help them avoid imminent collapse. General Motors Corp. and Chrysler LLC, which have said they could run out of cash within weeks, have few options left after the dramatic defeat in the Senate of a $14 billion bailout for the domestic auto industry. Its demise late Thursday prompted immediate calls from lawmakers in both parties for the Bush administration to tap into the $700 billion Wall Street bailout to rescue the beleaguered auto industry. The bill failed after talks broke down over the refusal of the United Auto Workers union to meet Republican demands for aggressive wage reductions. The Senate rejected the bailout 52-35 on a procedural vote — well short of the 60 required — after the talks fell apart. The Bush administration has repeatedly said the Wall Street bailout fund should not be used for emergency aid to the automakers because it was designed to restore stability to the financial sector. Following the vote, the White House said it was studying its options. House Speaker Nancy Pelosi said action by President George W. Bush was the "only viable option." The White House said it was disappointed by the vote and the legislation "presented the best chance to avoid a disorderly bankruptcy while ensuring taxpayer funds only go to firms whose stakeholders were prepared to make difficult decisions to become viable." Many congressional Republicans and some economists said the companies would be best to pursue a prearranged bankruptcy that would allow them to restructure quickly. But most Democrats and the carmakers rejected that, arguing it would quickly lead to liquidation because consumers would never buy cars from a bankrupt auto company. As it lobbied unsuccessfully on Thursday, White House officials said the weak economy couldn't afford the collapse of the auto industry. President-elect Barack Obama said an industry shutdown would have a "devastating ripple effect" on the already battered economy.
Source:  Associated Press

[back to top]

Options Narrow for GM, Chrysler

With the failed Senate vote, bankruptcy now possible outcome for automakers.
What happens next for General Motors Corp. and Chrysler LLC is not clear after the Senate voted against a $14 billion bailout for the domestic auto industry. The specter of bankruptcy has been realized, but the Treasury Department could also still step in and provide money through the Troubled Asset Relief Program, or TARP, the $700 billion fund the government set up for the Wall Street bailout. Both companies have said they will run out of money within weeks and have retained bankruptcy advisers to assess their options. GM and Chrysler were seeking emergency aid to help them stay in business for the remainder of this year and into early next year. "We are deeply disappointed that agreement could not be reached [Thursday night] in the Senate despite the best bipartisan efforts," GM spokesman Greg Martin said. "We will assess all of our options to continue our restructuring and to obtain the means to weather the current economic crisis." Chrysler had a similar reaction. "Chrysler LLC is obviously disappointed in what transpired in the Senate and will continue to pursue a workable solution to help ensure the future viability of the company," spokeswoman Lori McTavish said. Ford Motor Co. was not seeking aid but had supported its crosstown rivals in their bid because the failure of any one company could affect all three, Ford CEO Alan Mulally said during congressional testimony. "I think we'll be looking to see what comes next," Ford spokesman Mike Moran said late Thursday night. GM said earlier Thursday that it was preparing for all options and did not deny a report that it had hired bankruptcy advisers. Chrysler and many suppliers have done the same. "The Board is meeting frequently and is monitoring the situation closely and is considering all options, as is management," GM spokesman Steve Harris told The Detroit News. "And they have engaged appropriate advisers for all contingencies."
Source:  The Detroit News

[back to top]

Auto Bailout Talks Collapse Over Union Wages

A $14 billion emergency bailout for U.S. automakers collapsed in the Senate Thursday night after the United Auto Workers refused to accede to Republican demands for swift wage cuts. Senate Majority Leader Harry Reid said he was "terribly disappointed" about the demise of an emerging bipartisan deal to rescue Detroit's Big Three. He spoke shortly after Republicans left a closed-door meeting where they balked at giving the automakers federal aid unless their powerful union agreed to slash wages next year to bring them into line with those of Japanese carmakers. Republican Sen. George V. Voinovich of Ohio, a strong bailout supporter, said the UAW was willing to make the cuts — but not until 2011. Reid called the bill's collapse "a loss for the country," adding "I dread looking at Wall Street tomorrow. It's not going to be a pleasant sight." The implosion followed an unprecedented marathon set of talks at the Capitol among labor, the auto industry and lawmakers who bargained into the night in efforts to salvage the auto bailout at a time of soaring job losses and widespread economic turmoil. "In the midst of already deep and troubling economic times, we are about to add to that by walking away," said Sen. Chris Dodd, D-Conn., the Banking Committee chairman who led negotiations on the package. Sen. Bob Corker of Tennessee, the GOP point man in the talks, said the two sides had been tantalizingly close to a deal, but the UAW's refusal to agree to wage concessions by a specific date in 2009 kept them apart. "We were about three words away from a deal," said Corker. "We solved everything substantively and about three words keep us from reaching a conclusion."
Source:  Associated Press

[back to top]

GM Hires Bankruptcy Advisers

General Motors Corp. has hired bankruptcy counsel and restructuring advisers to prepare for a filing if Congress does not authorize $14 billion in emergency federal loans. "The Board is meeting frequently and is monitoring the situation closely and is considering all options, as is management," GM spokesman Steve Harris told The Detroit News [Thursday night]. "And they have engaged appropriate advisors for all contingencies." The revelation, first reported in the Wall Street Journal, sends a signal to Congress and Bush administration officials the severity of GM's financial situation, though the automaker has said repeatedly it is working to avoid a Chapter 11 bankruptcy filing. The Journal reported that GM has recently hired Harvey Miller of New York law firm, Weil Gotshal & Manges LP to handle any bankruptcy filing. GM also has retained restructuring experts Jay Alix, Evercore Partners' William Repko, and Arthur Newman of the Blackstone Group, according to the Journal. GM Chief Operating Officer Fritz Henderson has said the automaker cannot continue to fund its operations unless it receives $4 billion this month in federal aid. The request for federal aid comes amid the lowest level of U.S. auto sales in 26 years and as GM has lost almost $73 billion in the last four years despite several restructurings.
Source:  The Detroit News

[back to top]

Ky. Auto Dealers Disappointed by McConnell's Opposition to Bailout

Kentucky automobile dealers were surprised, confused and saddened Thursday by Sen. Mitch McConnell's opposition to a financial bailout of the Big Three automakers. "I have never been as disappointed as I am today," said Versailles Ford dealer Jack Kain, who was chairman of the National Association of Automobile Dealers Association in 2005. Kain said he and other industry representatives met with Kentucky's congressional delegation on Tuesday in Washington and came away feeling that McConnell wouldn't oppose the bailout. He told them, however, that there were several versions of the bailout bill being circulated in Congress and that he would have to read the final one before he could be certain, Kain said. Clearly he saw some things he didn't like. Ron Jackson, president of the Kentucky Automobile Dealers Association, said it's "hard to know" why McConnell is opposing the bailout, but "the manufacturers have to have this money." The collapse of even one of the Big Three would be "devastating to this state" and its auto dealers, who are independent business people. They would be left without a product to sell. Thousands of jobs could be lost at dealerships and at auto assembly and parts plants around the state, Jackson said. The surviving auto makers would be hurt. Based on his meeting with McConnell, Kain said the senator's decision might be based on any of several factors, including the high wage scales of American auto makers compared with Japanese companies, a misunderstanding of how the auto industry works or the failure of the $700 billion Wall Street bailout to stimulate the economy. "This money is not trickling down to Main Street as it should be," Kain said. "It's not working," so McConnell might be reluctant to vote for another bailout. Dealerships are going to be lost without a bailout, which Kain prefers to call "a bridge loan." 
Source:  Lexington Herald-Leader

[back to top]

GM Looks to Credit Unions to Help Finance New Vehicles

Midwest pilot program will make $10 billion available
DETROIT -- General Motors hopes a test finance program in the Midwest could become national -- a move that would give it access to new customers and as much as $150 billion in available auto loan financing. Michigan Credit Union League, group of 1,200 credit unions from Michigan, Ohio, Indiana and Illinois, are part of the program with GM. The group has $23 billion in capital. It is making $10 billion available for low-cost auto financing to its more than 12 million members in that region. The money could be used to buy a car from any automaker. But as part of a broader program, the credit union group has teamed with GM to offer supplier prices and a $250 price discount to members on a GM vehicle purchase. “Our industry has been hard hit,” said Mark LaNeve, GM’s vice president of vehicle sales, service and marketing in a call [Wednesday] with reporters. It “runs on credit from the consumer to the dealer. Having access to credit and attractive rates is obviously a huge benefit for us and their members.” The plan is called Invest in America, and it’s intended to spur the economy as well as benefit the credit unions’ members, League President David Adams said during a conference call with reporters. The nation’s 8,000 credit unions have about $150 billion in financing available that could help fund new auto loans, Adams said. “Credit unions have been less affected by the credit crisis,” Adams said. “They’re stronger than they’ve ever been, so credit unions are in a financial position to do this.” The league is talking to Ford Motor Co. and Chrysler LLC about similar programs.
Source:  Automotive News (Subscription required.)

[back to top]

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.

[back to top]

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.

[back to top]

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.

[back to top]

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.

[back to top]

 
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
 
"NADA is very disappointed that Congress failed to pass legislation to stabilize the auto industry. We are encouraged, however, by today's statement from the White House that it will consider use of the TARP program 'to prevent a collapse of the troubled automakers.'"

   
-- NADA Chairman Annette Sykora, NADA Newswire, Dec. 12


"Use of TARP funds is the fastest, most feasible, most immediate and most certain approach to provide the emergency bridge loans needed by the auto companies. I am hopeful that the President will act promptly to prevent this collapse and the resulting calamity for our economy."

    -- Sen. Carl Levin, D-Mich., says efforts to provide the emergency bridge loans remains “very much alive,” Automotive News, Dec. 12


"We are encouraged by the White House's willingness to consider other options, including the TARP program, for immediate aid to the domestic auto industry. We are prepared to work closely with the Administration on possible solutions that could prevent further damage to our nation's economy and also allow us to embark on an aggressive restructuring plan for long term viability."

   
-- GM in a statement, Automotive News, Dec. 12
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.

 
Search Back Issues | Unsubscribe | Subscribe | Manage your subscription | email us
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.