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Monday, Dec. 15, 2008 RSSSEND TO A FRIENDPRINT
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At a Glance...
Top Stories
In Meetings at the White House, NADA President Brady Urges 'Quick Action' on Auto Relief Package
Bush is Last Hope for Detroit
Economy Decimates Dealerships
GM Feels Bankruptcy Taint as Skittish Customers Avoid Dealers
Dealers Pitch in to Help Chrysler
Chrysler to Dealers: Sales Bank is Back
GM, Chrysler Failure Would Push Economy Into Abyss
Toyota: U.S. Auto Woes Spell Trouble for Japanese Makers Too
After Its Big Cuts, Detroit Makes Lots of Small Ones
Opinion: The Case for Believing In the U.S. Auto Industry
NADA Update
NADA Members Can Now Save on FedEx Shipping
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
In Meetings at the White House, NADA President Brady Urges 'Quick Action' on Auto Relief Package

WASHINGTON -- NADA President Phil Brady asked White House officials on Friday to move quickly to provide emergency bridge loans to struggling automakers. He underscored the urgency of the situation and emphasized the need to use funds from the Troubled Assets Relief Program (TARP) to avoid the collapse of America’s auto industry.

NADA is also asking all its 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.

“We are encouraged by President Bush's statements that show he recognizes how serious the situation is,” said NADA Chairman Annette Sykora. “And we agree with the White House that ‘it would be irresponsible to further weaken and destabilize our economy,’” Sykora said.

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

NADA is also strongly urging all dealers to contact their Representatives and Senators to ask them to call President Bush to encourage him to support the relief package. Members of Congress can be reached through the Capitol Switchboard at (202) 224-3121.

The meetings at the White House and the national call-to-action followed a “dealer fly-in” earlier last week in which 150 NADA dealers made face-to-face visits with their members of Congress to urge them to vote in favor of stabilizing the auto industry. Despite majorities in both the House and the Senate, the vote fell shy of the 60 needed in the Senate to prevent a filibuster.
Source:  NADA Newswire

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Bush is Last Hope for Detroit

President pushes for billions to aid GM, Chrysler, but a deal is unlikely for several days
WASHINGTON -- In the waning days of his administration, President George W. Bush is poised to temporarily rescue General Motors Corp. and Chrysler LLC... GM and Chrysler are banking on the president to use his authority to direct the Treasury Department to provide up to $15 billion in emergency aid to help them continue their operations for the rest of this year and into early next year. The White House made clear its intent to help over the weekend, and the Treasury is hammering out details of a deal with the automakers, but it also said a deal would not likely be done today. Late Sunday, Bush told reporters traveling aboard Air Force One to Afghanistan that discussions are ongoing over how to ensure automakers are viable. Treasury Department officials have been reviewing the automakers' books. "We're now in the process of working through with the stakeholders a way forward, and we're not quite ready to announce that yet," Bush said. But he said a decision will be quick. "Obviously, this will not be a long process because of the economic -- the fragility of the autos," Bush said. "Given the status of the financial system, an abrupt bankruptcy for the autos could be devastating for the economy. And therefore, we've tried to work with Congress to accomplish the objective of not cratering the economy as well as making sure good money doesn't go after bad."
Source:  The Detroit News

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Economy Decimates Dealerships

About 2,000 U.S. new-vehicle dealerships — nearly one of every 10 — will close in 2008 and 2009, the National Automobile Dealers Association projects. And that's the best-case scenario, under which no automaker files for bankruptcy or dies next year. A bankruptcy would accelerate dealership shutdowns. The Detroit 3 are trying to consolidate and shrink their dealer networks. But many of the closings so far do not involve the metro-area stores the automakers want to eliminate. [NADA Chief Economist Paul] Taylor says the poor economy, plunging new-vehicle sales and tight credit for dealers and consumers are taking a heavy toll.
Source:  Automotive News (Subscription required.)

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GM Feels Bankruptcy Taint as Skittish Customers Avoid Dealers

General Motors Corp. executives say they’ve resisted the bankruptcy option because customers would be scared off, anticipating the largest U.S. automaker will disappear for good. Some consumers have already been spooked. “I would not buy a car from a company that is going bankrupt,” Chris Hammer, a 58-year-old hotel bellhop in Greensboro, North Carolina, said after test-driving a red 2005 Mercedes Benz convertible. He won’t buy a GM car because sales outlets would close in a bankruptcy. “You may have to drive 30 or 40 miles to find a dealer with a mechanic to work on it.”
Source:  Bloomberg

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Dealers Pitch in to Help Chrysler

Chrysler LLC, which is quickly running low on cash, is cutting back its spending on the North American International Auto Show next month and asking local independent dealers to pick up some of the tab, the Free Press learned Friday. After Nissan Motor Co. said in November that it was pulling out of the Detroit auto show to save money, Chrysler officials went to local Chrysler dealers for help, according to several people briefed on the discussions who did not want to be identified. Dealers are trying to do their part to help Chrysler, which sells Chrysler, Dodge and Jeep brand vehicles, these people said. "We're trying to help everybody. Everybody is coming to the party," another person said. "We've got to do what we got to do." Chrysler spokesman Rick Deneau declined to say how much money the automaker is spending at the show this year or how much the dealers are being asked to contribute.
Source:  Detroit Free Press

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Chrysler to Dealers: Sales Bank is Back

Chrysler LLC co-President Jim Press delivered the news Friday, Dec. 12, in a nationally telecast pep talk to dealers: The sales bank is back — at least until the end of the month. In a conference call Friday, Press told dealers that "your district managers will be calling you to try to sell one of the 12,000" units of unassigned inventory. The news emerged during a call that was intended to boost dealers' spirits as Chrysler seeks a $7 billion government loan it needs to survive into next year. For many Chrysler dealers, "sales bank" is a hated term. They remember the dog days of 2006 when Chrysler failed to recognize slowing demand and kept factories cranking out cars with no dealer orders. Those unassigned units in the sales bank peaked at about 100,000 that summer, and dealers were choking on cars they didn't want. The sales bank helped precipitate the financial crisis that forced Daimler AG to sell a majority stake in its Chrysler unit to Cerberus Capital Management LP in August 2007.
Source:  Automotive News (Subscription required.)

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GM, Chrysler Failure Would Push Economy Into Abyss

The U.S. risks sliding into a deeper economic slump if General Motors Corp. or Chrysler LLC shuts down because President George W. Bush doesn’t provide short-term financial assistance. “We’re already in a deep recession in my state, as we are in most of the 50 states,” Senator Sherrod Brown, a Democrat from Ohio said on CBS’s “Face the Nation” yesterday. “And this would just plunge us deeper into economic problems, into a hole that it would take a long, long time to extricate ourselves from.” A bankruptcy filing by either company would mean production cuts and plant closings ... industry analysts say. That would cause many suppliers to collapse, triggering more job losses, straining the cities and states where the car and parts companies operate, as well as federal safety-net programs. It would also deliver another psychological blow to consumers and a major shock to Main Street following the crises on Wall Street.
Source:  Bloomberg

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Toyota: U.S. Auto Woes Spell Trouble for Japanese Makers Too

TOKYO — Even as General Motors and the entire U.S. auto industry teeters on the edge of collapse, its major rivals are hardly celebrating. Toyota and other Japanese carmakers say the bankruptcy of any of Detroit's Big Three would spell serious trouble for them as well. Should that happen, "the damage to our business is certain to be tremendous," Toyota Motor Corp. spokesman Hideaki Homma told The Associated Press Monday. "The conditions for the U.S. auto market are extremely tough right now, and any additional negative is sure to make things worse." One major problem is that Japanese carmakers in the U.S. share many of the same parts suppliers. If a Detroit automaker were to collapse, suppliers would likely follow, setting off a chain reaction that could would wreak havoc for Japanese production in the U.S., a vital market. More broadly, the U.S. crisis could lead to huge job losses and further weaken consumer spending, especially for big-ticket items like automobiles.
Source:  Associated Press

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After Its Big Cuts, Detroit Makes Lots of Small Ones

DETROIT — The threat of bankruptcy is evident every night at General Motors headquarters, when the lights are turned out early and the escalators and nearly all the elevators are shut down to save money. Even though G.M. is rapidly running out of cash, the company’s top sales executive recently asked that elevators to his 39th-floor offices keep running so his staff could keep working. “This cost-cutting has touched every aspect of the company,” said Mark LaNeve, head of G.M.’s North American sales and marketing. Both companies, as well as the Ford Motor Company, have already eliminated tens of thousands of jobs and reduced overhead costs by billions of dollars in the last few years. But as sales continue to plummet because of the weakening economy and the credit crisis, they are scrutinizing every budget line for potential savings. Chrysler has closed cafeterias in some of its plants, as well as the executive dining room at headquarters. G.M. is stocking office supply cabinets with cheaper pencils, turning down the heat in plants, and trimming back its inventory of replacement parts for factory equipment.
Source:  The New York Times

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Opinion: The Case for Believing In the U.S. Auto Industry
James B. Stewart

Washington seems on the brink of extending a lifeline to the Detroit auto industry. In my view, it could actually be a good investment. This may seem surprising coming from someone who's railed against the U.S. auto industry for years, and believes most of its troubles are of its own making. Fortunately, I don't have so much at stake that I've been losing any sleep over the fate of the U.S. auto companies. But I do think they deserve a lifeline while they pursue the radical restructuring and new-product development that they've promised and that, at least in Ford's case, I believe is well under way. I am now going "green," and have been looking only at cars that exceed 30 miles to the gallon, a surprisingly small field. To me, this spells opportunity for Detroit. Although foreign auto makers seem to be in the lead yet again, there aren't so many attractive fuel-efficient vehicles available that Detroit can't catch up. Ford, in particular, is well on its way, which is why I still own the stock. The fact that I, once a diehard performance and style fanatic, would seriously consider a Ford suggests that there are plenty of other baby boomers willing to radically rethink their priorities. As I've said before, the only long-term solution for Detroit is to produce high-quality vehicles that consumers actually want. This should be the priority of any government monitor, and if it is, then the warrants should pay off for taxpayers.
Source:  The Wall Street Journal (Subscription required.)
[Editor's Note:  Stewart is a columnist for SmartMoney magazine and SmartMoney.com]

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NADA Update
NADA Members Can Now Save on FedEx Shipping

Click here for savingsNADA members are now eligible to receive valuable discounts of up to 29 percent on select FedEx shipping services. There are no costs and no minimum shipping requirements to take advantage of this member benefit. NADA members can save:

• Up to 29 percent on select FedEx Express services
• Up to 25 percent on select FedEx Express international services
• Up to 20 percent on select FedEx Ground services
• Up to 10 percent on select FedEx Home Delivery services

For more information or enroll in the FedEx Advantage Program, click here and enter passcode G3J94T or call 1-800-MEMBERS (1-800-636-2377, 8 a.m.–6 p.m. EST, M-F).

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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
 
"We're now in the process of working through with the stakeholders a way forward, and we're not quite ready to announce that yet. Obviously, this will not be a long process because of the economic -- the fragility of the autos. Given the status of the financial system, an abrupt bankruptcy for the autos could be devastating for the economy."

   
-- President George Bush, referring to efforts of the White House and Treasury to provide timely financial assistance to troubled automakers, The Detroit News, Dec. 15
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) What You Should Know About Dealership Federal Income Tax Issues

(2) Lean Management - Unleash Your True Potential

(3) Improve Profitability and Customer Retention in Your Service and Parts Operations

Tax Issues speaker Terri Harris of the Internal Revenue Service will discuss Federal Income Tax issues relevant to automobile dealerships, including the latest on dealership UNICAP and LIFO pooling issues. Additionally, this workshop will cover the latest in dealership-specific court cases and other issues of current concern to the IRS.

Lean Management speaker David Summers of Lexus will teach dealers and managers how they can unleash the latent potential in their most valuable resource—their people—through effective lean management. Participants will learn how to create a culture of engaged associates in dealerships of all sizes.

Profitability speaker Robert Atwood of NADA Dealer Academy will teach participants the critical variables of the service department and how the parts department supports them. Attendees will learn how to manage their time to achieve consistent results.

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.