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Top Stories
No Word on GMAC Vote as Deadline Expires
GM, Chrysler to Thin Dealer Ranks as U.S. Aid Eases Cash Crunch
Understanding the TALF
Spot Deliveries: Slippery Slope for Dealers
2009 Auto Sales Forecast Even Gloomier Than 2008
NADA Update
NADA Convention Features Former U.S. Presidents and Inspirational Speakers
NADA Extends Online Registration for Convention to Jan. 5
Carville and Matalin to Headline AFSA's Vehicle Finance Conference in New Orleans
NADA Convention to Focus on Future of the Industry
NADA Offers Virtual Seminar to Help Dealers in 'Tough Times'
STAR Answers Dealers' Questions About Hardware Based Systems
Lenovo Offers Holiday Savings
Top Stories
No Word on GMAC Vote as Deadline Expires

DETROIT — Two days after a crucial deadline passed, GMAC, the financing arm of General Motors, remained silent Sunday over whether bondholders had approved a plan that would help provide GMAC with federal bailout money. GMAC bondholders had a midnight deadline on Dec. 26 to approve a bond-exchange program that would have enabled GMAC, which provides loans to car buyers and dealers, to have sufficient capital — a move that GMAC says is necessary for it to continue functioning. The company is in the process of becoming a bank holding company, which would qualify GMAC to apply for bailout financing from the federal government’s bank rescue fund and also take short-term loans from the Federal Reserve. Over the weekend, the company would not say whether the bond-exchange plan had succeeded. It is one important element for GMAC to maintain capital levels, with the intent of the exchange to reduce $38 billion in GMAC debt and increase the company’s equity. Last Wednesday, the Federal Reserve approved GMAC’s application to become a bank holding company. As that was taking place, the company was also engaged in a bond-swap that GMAC had said would re-shape its balance sheet and is critical to its future. GMAC has been struggling to persuade bondholders to convert 75 percent of their debt into equity in GMAC, a move that would allow GMAC to reach $30 billion in capital. But several bondholders had been balking at the terms of the deal, which had caused GMAC to extend the deadline for the exchange to last Friday and to sweeten the terms for bondholders.
Source:  The New York Times

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GM, Chrysler to Thin Dealer Ranks as U.S. Aid Eases Cash Crunch

General Motors Corp. and Chrysler LLC are due to get $4 billion each in U.S. loans today to keep them from running out of cash. They’re still looking for help with one of their biggest challenges. A U.S. dealership glut is damping the retailers’ profits, crimping spending on marketing, facilities and vehicles, GM and Chrysler say. GM set a goal of closing 1,750 showrooms, or 27 percent, over four years while Chrysler said it wants to thin its 3,300 dealerships, without setting a target. Franchise laws and possible legal action by dealers may make it difficult to achieve the cuts, which were a pillar of the survival plans the automakers gave Congress on Dec. 2. GM had to spend more than $1 billion on its 2000 plan to shut its Oldsmobile unit, in part due to lawsuits over forced closures. “In a number of states there’s these very elaborate procedures that you have to go through to shut dealerships,” University of Chicago law professor Douglas Baird said in an interview. “In some states you just can’t do it at all.” Negotiations are under way on a market-by-market basis, especially in urban areas, in which dealers are being urged to combine with other retailers, according to the automakers. Cash payments are among the typical inducements. “You need dealers to be profitable, so they can invest in their store, so they can afford more sophisticated marketing, so that they are not competing with another Dodge dealership down the street,” said Stuart Schorr, a spokesman for Auburn Hills, Michigan-based Chrysler. The ultimate tool for forcing dealership closures is the one the automakers say they won’t use: filing for bankruptcy, which would let them skirt state protections for franchisees. Without that, Detroit-based GM and Chrysler have to bargain with dealers, said Baird, a bankruptcy-law specialist. “General Motors doesn’t have the option to walk away from a dealer any more than it does to walk away from a collective bargaining agreement,” Baird said.
Source:  Bloomberg

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Understanding the TALF

McLEAN, Va. -- A new Web page on nada.org explains in greater detail what the Federal Reserve Board's Term Asset-Backed Securities Loan Facility (TALF) program means to dealers and how they will benefit from the action taken on Dec. 19 to include securities backed by dealer floorplan loans as a qualifying asset class. The information is helpful in explaining this action to dealers and the media. Click here for "Understanding the TALF."
Source:  NADA Newswire

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Spot Deliveries: Slippery Slope for Dealers

Bill Heard Enterprises Inc.'s Chevrolet empire was crumbling. Rising fuel prices were gutting the group's high-volume sales of SUVs and pickups. As showroom traffic at Heard dealerships fell, so did the bar for getting customers into loans, says a former manager at one of the group's two Las Vegas-area stores. The dealership began targeting what he calls the "credit-challenged." It delivered vehicles to customers on the spot, sometimes at lower interest rates than those for which the customer was likely to qualify. Handing over the keys before completing the financing is a sales tactic known as spot delivery. It's a tempting tactic to move the metal in tough times. But as Heard Enterprises learned, it is a risky practice for dealers. In the Las Vegas store's last days, the bank rejected the deal about 20 to 30 percent of the time. Some buyers had to return their vehicles, the manager says. Others had to re-sign with additional cash down or a higher interest rate. And some were switched into less expensive vehicles that met the bank's lending criteria. In September, Heard Enterprises filed for Chapter 11 reorganization, closing all 14 of its Chevrolet dealerships. While the case is extreme, it serves as a warning to dealers who routinely practice spot delivery. Spot delivery is inherently risky — and not just for customers. Done wrong, it can leave a dealer exposed to allegations of predatory lending and to the risk that comes with having millions of dollars in unfinanced inventory roaming the streets.
Source:  Automotive News (Subscription required.)

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2009 Auto Sales Forecast Even Gloomier Than 2008

No major automaker will look back at 2008 with fond memories. Profit machine Toyota is likely to post its first loss since 1941, Honda's profit plummeted, and Nissan's sales fell despite slashed prices. Ford posted huge losses, and both General Motors and Chrysler had to beg for emergency cash from the federal government to avoid bouncing checks at the end of the year. Next year doesn't look much better, but companies say that at least they know what they're facing. The most optimistic predictions for 2009 call for people to buy about 13.5 million cars and trucks, down from more than 16 million in 2007. Pessimistic predictions range as low as 11 million. Those numbers mark a sharp decline from predictions made as recently as October, when analysts hoped that month's miserable numbers would get better in November. Paul Taylor, chief economist for the National Automobile Dealers Association, said his prediction of 13.1 million vehicle sales next year depends on the loosening of the credit markets. Sales plummeted toward the end of this year when credit became harder to get. "If lending can be normalized, there is a decent amount of demand built up," Taylor said. He thinks 2009 will be the reverse of this year - tough sales through the first half of the year with some improvement during the second half. Again, if credit markets stay frozen, all bets are off. One of the most noticeable changes of continued economic weakness will be on the dealership front, Taylor said. The auto dealers association expects more than 1,000 stores will close next year. By the end of 2009, it predicts there will be about 19,170 dealerships nationwide, down from 21,200 at the end of last year.
Source:  The Plain Dealer

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NADA Update
NADA Convention Features Former U.S. Presidents and Inspirational Speakers

The National Automobile Dealers Association (NADA) has assembled a lineup of leading political figures and inspirational speakers—including former U.S. presidents George H.W. Bush and Bill Clinton—to deliver remarks at its 92nd annual Convention & Exposition in New Orleans next month. “This year’s lineup is one of the most impressive in NADA’s history,” said Convention Chairman and auto dealer Jeff Carlson. “In line with NADA’s convention theme of ‘Committed to Community,’ former U.S. presidents George H.W. Bush and Bill Clinton join us in highlighting nationwide efforts to give back to the New Orleans community.” Earlier this year, the NADA Charitable Foundation made a $400,000 contribution to the Brees Dream Foundation—founded by New Orleans Saints quarterback Drew Brees and wife, Brittany—to help rebuild the athletic fields at the largest public high school in New Orleans. Ford Motor Co. President and CEO Alan Mulally will deliver the keynote address during the General Assembly on Saturday, Jan. 24, following NADA Chairman Annette Sykora. Archie Manning, former Saints quarterback and National Football League Most Valuable Player, and Christopher Gardner, the inspiration for the movie “The Pursuit of Happyness,” will offer motivational talks. On Sunday, Jan. 25, incoming NADA Chairman John P. McEleney will outline his priorities for the coming year, the chief among which is to expand the availability of credit for vehicle purchases.
Source: NADA Newswire

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NADA Extends Online Registration for Convention to Jan. 5

Convention to host 21 automaker franchise meetings at critical time for the industry
McLean, Va. -- Now that U.S. automakers will receive emergency bridge loans, attention has shifted to the National Automobile Dealers Association Convention in New Orleans next month when dealers will have an opportunity to meet face-to-face with the top leadership of the auto manufacturers. NADA’s Industry Relations Group has announced that 21 separate manufacturer franchise meetings have been confirmed at the convention. To handle what is expected to be a renewed interest in the convention, NADA has extended online registration until 3 p.m. on Monday, Jan. 5.

“NADA is pleased that nearly all of the automakers’ CEOs and presidents plan to attend these important meetings,” said Annette Sykora, NADA chairman. General Motors’ Rick Wagoner, Toyota’s Jim Lentz, Chrysler’s Jim Press and Ford’s Alan Mulally are all planning to attend. Mulally will deliver the keynote industry address at the convention’s opening session on Saturday, Jan. 24. “There could not be a more important time for a dealer to attend an NADA convention and hear directly from their manufacturer,” Sykora added. “Franchise meetings offer dealers the opportunity to hear from NADA, dealer councils and the automaker’s leadership, as well as ask questions of their manufacturers directly."

“These meetings come at a critical time,” Sykora said. “Automotive retailing is going through historic changes, and there is no better place for dealers to meet and discuss the future of their industry than at the NADA convention." Pre-registration and housing for the 2009 NADA Convention & Exposition Jan. 24-27 can be completed—online only—until 3 p.m. EST, Monday, Jan. 5.  (All registrations and housing reservations must be processed online. Fax registrations will not be accepted. After Jan. 5, dealers will have to register on site in New Orleans. If changes need to be made to hotel reservations, Experient can be contacted until Jan. 5 at (800) 974-3084. After Jan. 12, dealers will have to contact hotels directly to make changes.) Information, registration and a complete list of scheduled franchise meetings can be found by visiting www.nada.org/convention.
Source:  NADA Newswire

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Carville and Matalin to Headline AFSA's Vehicle Finance Conference in New Orleans

Political commentators James Carville and Mary Matalin will give the keynote presentation at the American Financial Services Association’s (AFSA) 13th Vehicle Finance Conference and Exposition scheduled Jan. 21-23 at The Sheraton New Orleans. The husband and wife duo, who have sharply different political views, will discuss the new presidential administration during a presentation on Friday, Jan. 23. The vehicle finance conference, held just prior to the National Automobile Dealers Association (NADA) annual convention, also will feature a panel of top industry leaders who will share their views about the current market environment as well as the traditional “Straight Talk with Dealers” session featuring the NADA leadership: John McEleney, incoming NADA chairman; Ed Tonkin, incoming NADA vice chairman; and Mike Martin, NADA director from Virginia. Michael Brown from the Atlantic Auto Group will also speak. Additional sessions and round tables will focus on Risk Management, Legal and Legislative Issues, Maximizing Human Capital, the New Generation of Auto Finance Companies, Profitability Management Analytics and Operational Effectiveness and Dealing with Fraud. To register for AFSA’s meeting, visit www.vehiclefinanceconference.com.
Source:  AFSA

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NADA Convention to Focus on Future of the Industry

Now is the time to attend the industry event of the year and ensure your dealership’s success
McLean, Va. -- Economic turmoil and uncertainty form the backdrop to the National Automobile Dealers Association (NADA) convention in New Orleans next month. "This is a must-attend convention if there ever was one," says Steve Pitt, NADA vice president of conventions and expositions. “The fate of the industry is hanging in the balance. All of the top manufacturer executives will be there, and dealer franchise meetings are more important than ever. We're also providing new ideas and information and a series of workshops designed to help dealers get through these tough times."
 
The 2009 NADA Convention & Exposition, which runs Jan. 24-27, is offering more than 40 workshops, many of which are designed to tackle today’s tough economic issues head-on, such as maintaining dealer profitability, improving cash flow, surviving the credit crunch and driving customers back to dealerships. “Convention participants will learn what they need to do back home at their dealerships for the good of their businesses,” Pitt added. “The convention will help dealers prepare for an upcoming year of uncertainty.”

For the first time ever at a NADA convention, two former U.S. presidents will take center stage. Former presidents George H.W. Bush and Bill Clinton will deliver remarks during the general session. Ford Motor Co. President and CEO Alan Mulally will deliver the industry keynote address. Inspirational speakers Archie Manning, former quarterback of the New Orleans Saints and the NFL’s Most Valuable Player in 1978, and Christopher Gardner, the inspiration for the movie “The Pursuit of Happyness” will offer motivational talks.

“This is our 92nd convention and, in many ways, it’s the most important one ever,” says Pitt. “If you’re a dealer, you have to be there.”

Pre-registration and housing for the convention has been extended to 3 p.m. EST, Monday, Jan. 5. Take a moment to register online now. Many hotel rooms are still available. Airline flights to and from New Orleans have been added, and airfares have been reduced.
Source:  NADA Newswire

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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 new seminar on dealership survival, Tough Times, Tougher Dealers: Saving Your Dealership’s Assets. The seminar will be offered as a workshop at the 2009 NADA Convention & Exposition in New Orleans, and will also be presented online as a virtual seminar in January.

This seminar, 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 workshop, 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 Jan. 13 from 1–3 p.m. The registration fee is only $50 per computer connection. For more information or to register, visit www.nada.org/seminars.

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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

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) How Smart Dealers are Changing the Way they Advertise

(2) Creating Superstar Salespeople

(3) Maximize Service Advisor Performance: Four Easy Steps to Enhance Performance

Smart Dealers speaker Dorthy Miller Shore of the Miller Agency will present a 360-degree approach to advertising that integrates all forms of media to drive business. Participants will learn a new media model that applies in today’s Internet world.

Superstar Salespeople speaker Mark Tewart of Tewart Enterprises, Inc. will give specific examples of sales skills, people skills, life skills, and marketing skills that can transform average sales performance to great performance.

Service Advisor speaker Jim Phillips of NADA will present dealers with a clear-cut plan for improving the performance of service advisors. Participants will learn the best approaches to the appointment process, the pre-work process (including homework), the walk-around and write-up and interactive delivery.

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.