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At a Glance...
Top Stories
The Auto Bailout Keeps Growing, And Growing
Automakers' Fate Is on the Table
Chrysler: We're Not Selling Brands or Plants
Auto Industry Experts See Weakness Through 2009
EPA May Get Tough with Detroit 3
Coalition Agrees on Emissions Cuts
Congress Intros Voucher Plan for Gas Guzzlers
Bad Economy Forces Drivers to Keep Their Cars Longer
NADA Update
Tough Times, Tougher Dealers: Saving Your Dealership's Assets
NADA Insurance to Offer Long-Term Care Insurance
Convention Hotel Rooms Still Available at NADA Rate
Convention to Host 21 Automaker Franchise Meetings at Critical Time for the Industry
NADA Convention Features Former U.S. Presidents and Industry Leaders
Carville and Matalin to Headline AFSA's Vehicle Finance Conference in New Orleans
NADA Convention to Focus on Future of the Industry
Understanding the TALF
STAR Answers Dealers' Questions About Internet Content Systems
HP's Inventory Closeout Sale
Top Stories
The Auto Bailout Keeps Growing, And Growing

The auto industry bailout saga is working its way up and down the supply chain. Shortly before Christmas, the Federal Reserve Board quietly provided $200 million of support aimed specifically at auto dealers, who have had a difficult time financing their inventories — forcing some of them out of business. The support is being administered through the Fed's Term Asset Backed Securities Loan Facility or TALF, which was created this past autumn to encourage banks to start lending again. To further help the dealers, the Fed eased the eligibility requirements so that inventory financing (and there's plenty of inventory to finance) now qualifies as an "asset" that can be packaged into a security just like a mortgage or a car loan. Remaining on Detroit's wish list: tax breaks for consumers who buy new vehicles and/or fuel-efficient hybrids. The National Automobile Dealers Association has made the incentives a top lobbying priority; new legislation has already been introduced in Congress. One proposal supported by Democratic Sen. Barbara Mikulski of Maryland and Republican Sen. Kit Bond of Missouri would permit new car buyers to deduct auto loan interest and sales tax on their personal income taxes. "We think temporarily making interest deductible on car loans would spur sales," says NADA economist Paul Taylor. The NADA is also supporting "cash for clunkers" initiatives, which encourage consumers to upgrade their older cars to cleaner, more fuel-efficient models.
Source:  Time Magazine

[Editor's Note: NADA has been working closely with key members of Congress on efforts to boost auto sales for all dealers. To ensure that any legislation does not limit consumers to only a few models due to overly restrictive fuel economy restraints, NADA is providing input to Congress on this bill, other "cash for clunker" proposals and auto purchase incentives. Dealers should encourage their Representatives and Senators to include an auto sales component in the upcoming economic stimulus legislation.]

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Automakers' Fate Is on the Table

GM and Its Unions Are Negotiating Pay Cuts to Meet Terms of Federal Loan
On one side of the table, representing General Motors, is Diana Tremblay, 49, the daughter of a GM engineer who grew up in an Ohio company town and then rose through the ranks to the corporate suite. On the other, representing the United Auto Workers, is Cal Rapson, 63, a union member since 1965 when he joined the local at the Chevrolet engine plant in Flint, Mich. Together, meeting regularly at an office building in Detroit, the duo and their negotiating teams are trying to strike a deal that could determine the fate of the vast U.S. auto industry. Under restrictions laid out by the Bush administration to receive a federal loan, they must cut worker pay and benefits to levels that are competitive with the plants that Honda, Toyota and Nissan operate in the United States. However, union leaders at GM -- and at Chrysler, where parallel discussions are underway -- might not be in a hurry to reach an agreement. Some are hopeful that the incoming Obama administration will rewrite the controversial loan agreement and rescind the requirement that worker compensation be reduced. Many union leaders, who supported Obama's candidacy, view Obama's decision on this issue as the first major test of the incoming administration's sympathy with labor groups. By Feb. 17, the [automakers] must submit a viability plan, which includes a reduction of debt, as well as an agreement with the union. GM is also pushing to shrink the number of its dealerships and brands.
Source:  Washington Post

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Chrysler: We're Not Selling Brands or Plants

DETROIT — Chrysler held an impromptu press conference Wednesday morning to debunk rumors that it is discussing the sale of its brands, selling off its plants or going out of business. But being sold off as an entire company remains a possibility. The company was reacting to a report published Tuesday that said Chrysler is in talks to sell key assets to Renault and supplier Magna, as well as plans to sell the PT Cruiser brand to a Chinese company. "I'd love to tell the press directly what's going on, instead of people putting out rumor-based reporting, which at this point is not healthy for the industry," says Tom LaSorda, vice chairman and president of Chrysler. Still, LaSorda says he wouldn't know if the entire company is up for sale. That would be handled by Cerberus, Chrysler's privately-owned and guarded parent company.
Source:  USA TODAY

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Auto Industry Experts See Weakness Through 2009

Analysts see the credit crisis continuing to drive customers away and dealerships out of business
DETROIT -- Auto analysts issued grim sales projections for the year on Tuesday and said automakers should not expect a quick turnaround in consumer demand. The slumping economy and tight credit markets also will increase the number of dealerships that will close this year. Dealers are in the cross hairs of manufacturers, particularly GM, which is implementing a broad restructuring plan to satisfy conditions imposed after the federal government last year granted the automaker and Chrysler LLC up to $17.4 billion in emergency short-term loans. About 86 percent of the 1,110 dealerships expected to close this year will be from Ford Motor Co., GM and Chrysler, National Automobile Dealers Association Chief Economist Paul Taylor said. "The question is, are these the ones manufacturers thought should go by the wayside?" Taylor said. Last year, 401 GM dealerships closed and the Detroit automaker has targeted for closure 1,750 dealerships, particularly in metro and suburban areas, over the next three years. "Unfortunately, some of that is happening through attrition," GM spokeswoman Susan Garontakos said. "The economy is still in this recession/depression and that certainly plays into the success of some of the dealers." The 900 dealers that closed last year exceeded projections made by NADA Chairwoman Annette Sykora three months ago at an Automotive Press Association luncheon at the Detroit Athletic Club. Dealers were hurt by a consumer shift away from more profitable sport utility vehicles and trucks to smaller cars, though that trend has weakened in recent months after gas prices dropped below $2 a gallon. Low consumer confidence also has contributed to slow sales, though automakers are expecting some improvement in the second half of the year as banks and lending institutions make more credit available.
Source:  The Detroit News

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EPA May Get Tough with Detroit 3

Automakers could quickly face tough new rules limiting global warming pollution from new models in more than a dozen states after President-elect Barack Obama's pick to run the U.S. Environmental Protection Agency said Wednesday she would tackle the debate soon. Detroit automakers and their foreign competitors have waged a lengthy legal fight against California's rules that set new limits on vehicle emissions to fight global warming, rules which 17 other states have adopted or vowed to put in place. Such rules would lead to fuel economy targets that automakers and dealers warn would create a patchwork of state laws, drive up costs and limit sales. Last year, the Bush administration's EPA denied California's request for a waiver from federal law that is needed for it and the other states to move ahead. Obama pledged during the campaign to overturn the decision, and EPA nominee Lisa Jackson promised fast action to a Senate committee Wednesday. "If I am confirmed I will immediately revisit the waiver, looking at the science and the rule of law, and relying on the expert advice of EPA's employees in making a determination," Jackson said.
Source:  Detroit Free Press

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Coalition Agrees on Emissions Cuts

An influential group of large U.S. corporations and environmental organizations have forged a detailed blueprint for limiting greenhouse gases in the hope of shaping and pushing forward climate change legislation this year. The U.S. Climate Action Partnership says its ability to reach consensus is a crucial step forward since its 32 members include corporate giants such as General Electric, Conoco Phillips, Duke Energy, DuPont and General Motors as well as the Environmental Defense Fund and World Resources Institute. Their plan for a cap-and-trade system calls for a 42 percent cut in emissions by 2030 from 2005 levels... The same group issued an action plan two years ago, but at that time members could not agree on key specifics.
Source:  Washington Post

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Congress Intros Voucher Plan for Gas Guzzlers

WASHINGTON -- Congress is mulling a proposal to pay people to get rid of those old gas guzzlers sitting in their driveways. Under legislation introduced Wednesday in both the House and Senate and called the "Cash for Clunkers" program, drivers could get vouchers of up to $4,500 when they turn in their old fuel-inefficient vehicles for scrapping and buy vehicles that get good gas mileage. People could also turn in their old cars for vouchers that could be used to ride public buses and trains. The bill, said Sen. Dianne Feinstein, D-Calif., "would be an important part of helping getting America's struggling automobile industry back on its feet, and help consumers who are concerned about covering the cost of buying a more fuel-efficient vehicle." The bill envisions the program operating for four years and encouraging the retirement of up to one million vehicles a year, saving between 40,000 and 80,000 barrels of motor fuel a day by the end of the fourth year. A person could obtain no more than one voucher in any three-year period. Dealers and scrap recycling companies could also get payments of $50 per vehicle.
Source:  Associated Press

[Editor’s Note: NADA has been working closely with key members of Congress on efforts to boost auto sales for all dealers. To ensure that any legislation does not limit consumers to only a few models due to overly restrictive fuel economy restraints, NADA is providing input to Congress on this bill, other "cash for clunker" proposals and auto purchase incentives. Dealers should encourage their Representatives and Senators to include an auto sales component in the upcoming economic stimulus legislation.]

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Bad Economy Forces Drivers to Keep Their Cars Longer

Until recently, many drivers treated their cars less like transportation and more like handbags, jewelry and other trendy accessories. Drivers craving the latest in mechanical "bling" found easy credit and inexpensive lease deals attractive enough to get a new ride every three years or so. "The three-year ownership mentality has crumbled," says Trevor Traina, founder of DriverSide, a Web site that helps people keep up with car maintenance and avoid overpaying for repairs. The average trade-in age for cars has crept upward to 6.2 years in October, up from 5.8 years in October 2007, according to auto industry researcher J.D. Power & Associates. Keeping a car longer usually works for owners because cars last longer and are more reliable than ever. But the change is chilling for a U.S. auto industry accustomed to cranking out more than 15 million new vehicles a year. Light-vehicle sales fell 18% last year to 13.2 million units, the lowest since 1983.
Source:  The Wall Street Journal (Subscription required.)

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NADA Update
Tough Times, Tougher Dealers: Saving Your Dealership's Assets

In response to the challenges facing dealers during uncertain times, NADA is offering a workshop on dealership survival, Tough Times, Tougher Dealers: Saving Your Dealership’s Assets, at the 2009 NADA Convention & Exposition in New Orleans. Hundreds of dealers have already participated in virtual seminars presented on the topic in December and January.

The first virtual seminar, held Dec. 18, drew more than 250 participants and lasted more than an hour, followed by a lively and informative Q&A session. Participants were not identified by name or dealership, which resulted in candid discussion. More than 150 people participated in the second session, held Jan. 13.

The convention workshop, presented by Michael Charapp, Esq. of Charapp & Weiss, LLP and Bradley Nicklin, CPA of Beers + Cutler, will discuss the tough issues facing dealers today. It is intended to help dealers and managers understand the steps required to protect their dealerships’ assets during tough economic times.

In Tough Times, 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 the tough environment, both legally and financially.

Tough Times, Tougher Dealers: Saving Your Dealership’s Assets will be held Saturday, Jan. 24 at 11 a.m. and Monday, Jan. 26 at 8:30 a.m. in rooms 208–209 of the Ernest N. Morial Convention Center in New Orleans. Dealers, managers and other dealership personnel attending the NADA convention are encouraged to attend one of the two sessions. The workshop will offer up-to-date economic information and peer interaction, as well as Q&A for all participants.

For more information on this and other workshops at the NADA convention, visit www.nada.org/convention or call NADA Management Education at (800) 252-NADA, ext. 2.
Source: NADA Newswire

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NADA Insurance to Offer Long-Term Care Insurance

To help dealers protect their loved ones and financial assets, NADA will be offering a new, long-term care insurance program with exclusive discounts to members. Through a partnership with CoolLTC, NADA members can work with long-term care specialists to design a protection program for their individual needs. Along with a choice of eight insurance companies, members can create a free living will – a savings of $350. Members can also access Care Options OnLine, which is the most comprehensive Web-based care planning and resource center designed to assist members in finding services they need to cope with disabilities or other challenges of assisted living.

“Now more than ever, wealth preservation is a major issue for our members,” said Lin Peacock, vice president of NADA Insurance. “A Wall Street Journal columnist recently cited the 10 biggest mistakes that investors make with their retirement savings. Number one on the list is failing to prepare for long-term care. Long-term care insurance is a crucial part of any sound financial plan,” Peacock added. “After all the hard work dealers put into building a business and other investments and savings, protecting assets and family welfare is the next critical step.” By partnering with CoolLTC, NADA members now have access to a choice of carriers and valuable planning tools.

“During this time of unprecedented concern over retirement savings and the financial viability of social programs such as Medicare and Social Security, we are honored to be the group that NADA has chosen to assist their members with understanding the role long-term care insurance can play in protecting them and their families against the devastating costs associated with long-term care,” said David Schaeffer, managing director of CoolLTC. The program will launch at the NADA Convention & Exposition in New Orleans Jan. 24–27.

BENEFITS FOR NADA MEMBERS -- Exclusive Discounts on Long-Term Care Insurance

  • Choice of LTC insurance plans from eight top-rated carriers that provides flexibility and a wide array of benefits and options
  • Plans that allow cash payments to family and friends for providing care
  • Discounted premiums for members and their families
  • The most accurate and up-to-date information available with all of the facts necessary to make an informed decision
  • Easy to navigate, intuitive Web site resource to answer all of your questions related to long-term care needs

For more information on the latest innovations in long-term care insurance solutions, contact Scott Lilja, NADA Insurance, (703) 749-4711 or David Schaeffer, CoolLTC, (866) 966-6558.
Source:  NADA Newswire

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Convention Hotel Rooms Still Available at NADA Rate

Advance registration for the NADA convention in New Orleans has closed, but hotel reservations are still available at the NADA rate. If you need hotel reservations for the convention, contact the hotels directly and ask for the NADA rate. The city has assured NADA that most of the hotels will comply. If you would like to register for the convention, you may do so on site beginning at 10 a.m. Friday, Jan. 23. Registration will be located in Hall D of the Morial Convention Center.

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Convention to Host 21 Automaker Franchise Meetings at Critical Time for the Industry

Now that U.S. automakers are receiving bridge loans, attention has shifted to the NADA Convention & Exposition in New Orleans Jan. 24-27 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.

“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." Information and a complete list of scheduled franchise meetings can be found at www.nada.org/convention.
Source:  NADA Newswire

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NADA Convention Features Former U.S. Presidents and Industry Leaders

NADA has assembled a lineup of leading political figures, industry 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 Jan. 24-27. “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.” Last 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 NFL Most Valuable Player, and Christopher Gardner, the inspiration for the movie “The Pursuit of Happyness,” will offer motivational talks. Incoming NADA Chairman John McEleney will outline his priorities Monday, Jan. 26 for the coming year.
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 chairman; Ed Tonkin, incoming vice chairman; and Mike Martin, 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
Economic turmoil and uncertainty form the backdrop to the National Automobile Dealers Association (NADA) convention in New Orleans. "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.”
Source:  NADA Newswire

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Understanding the TALF

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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STAR Answers Dealers' Questions About Internet Content Systems

Standards for Technology in Automotive Retail (STAR) has developed new guidelines to help dealers evaluate their dealership data security. Visit STAR's Dealer Infrastructure Guidelines (DIG) publication to learn more. To read the answer to the question "What are the things that a dealer should look for when considering any type of Internet Content System?" click here.

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HP's Inventory Closeout Sale

HP is offering up to 65 percent off select business desktops while supplies last. Call 1-800-888-0365 and mention passcode "NAD1" to receive the NADA discount. To see more "Specials and Promotions" and "Smart Deals," visit NADA's PC Purchase program online (member login required) and click www.hp.com/go/promos/nad1.

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Featured Video
 
  
Click here to see why New Orleans is still America's premier convention city.



More Video Highlights

Quotable
 
"We think temporarily making interest deductible on car loans would spur sales." 

    -- NADA economist Paul Taylor, referring to legislation supported by Democratic Sen. Barbara Mikulski of Maryland and Republican Sen. Kit Bond of Missouri that would permit new car buyers to deduct auto loan interest and sales tax on their personal income taxes, Time, Jan. 14


"Chrysler Financial is optimistic it will receive the necessary support from the Treasury." 

    -- Chrysler Financial spokeswoman Amber Gowen, Time, Jan. 14


"If I am confirmed I will immediately revisit the waiver, looking at the science and the rule of law, and relying on the expert advice of EPA's employees in making a determination."

   
-- Environmental Protection Agency nominee Lisa Jackson, referring to the possibility that automakers could quickly face tough new rules limiting global warming pollution from new models, Detroit Free Press, Jan. 15


The bill "would be an important part of helping getting America's struggling automobile industry back on its feet, and help consumers who are concerned about covering the cost of buying a more fuel-efficient vehicle." 

    -- Sen. Dianne Feinstein, D-Calif., referring to legislation introduced Wednesday in both the House and Senate called the "Cash for Clunkers" program, Associated Press, Jan. 14
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) Seven Powerful Principles to Reshape Your Strengths in Service

(2) How to Instantly get High Survey Scores, High Customer Retention, and Outstanding Product

(3) Blueprint for Hiring Top Performers

Powerful Principles speaker Ted Ings of Auto University will identify principles for strengthening service and delivering a superior customer experience. Participants will learn timely, easy-to-implement processes, best management practices and real-world solutions for boosting service profits under all retail conditions.

Survey Scores speaker Jeff Cowan of Jeff Cowan’s Pro Talk, Inc. will teach dealership personnel how to build rapport and establish long-lasting relationships with customers. Attendees will learn what product benefits interest customers most, when and how to present these benefits to them and what type of close works best.

Blueprint speaker Ricky Wolfe of EFG Companies will cover the behavioral traits of top performers in the retail automotive industry and outline a 7-step system to identify, recruit, hire and retain top performers.

Advance registration for the 2009 NADA Convention & Exposition is now closed. Register onsite beginning at 10 a.m. Friday, Jan. 23.

Video Highlights
 
 
'NBC Nightly News with Brian Williams' reports: "Demise of a local car dealership leaves a big dent."



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.