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Friday, Jan. 16, 2009 RSSSEND TO A FRIENDPRINT
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At a Glance...
Top Stories
Obama Outlines Conditions for Automaker Aid
Senate Votes to Release Bailout Funds to Obama
GM: UAW Pay Cuts Not Needed
Green Vehicle Stimulus Unveiled
Opinion: America Needs a Single National Fuel Economy Standard
GM Cuts 2009 U.S. Sales Forecast for Industry
Toyota Reduces Production
New FMLA Rule Takes Effect Today
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
Obama Outlines Conditions for Automaker Aid

President-elect Barack Obama said yesterday that the nation's struggling automakers must develop sustainable business models that set realistic production goals focusing on fuel efficiency in order to qualify for continued federal assistance from his administration. Achieving that will require "everybody -- from labor to management to creditors to shareholders -- giving something up," Obama said during an interview with The Washington Post. Obama said Lawrence H. Summers, his top economic aide, has assembled a working group to evaluate the state of the U.S. auto industry in anticipation of automakers returning to the federal government for help. "I don't think an acceptable outcome is for us just to keep them on their lifeline through taxpayer dollars in perpetuity," Obama said. The deal imposed by the Bush administration would require top executives to give up bonuses, bondholders to swap most of their bonds for equity stakes in the car companies, and workers to accept wage concessions that would lower their compensation to the levels of nonunion employees at plants in the United States run by foreign automakers. Obama has the power to restructure the deal once he takes office next week. He said that for too long U.S. automakers survived without paying enough attention to their business plans. "The only reason that was not apparent is that gas was cheap enough and credit was loose enough that sport-utility vehicle sales could sort of paper over a whole bunch of problems," he said. Noting that SUV sales surpassed car sales last month, Obama expressed concern that the sharp drop in gasoline prices over the past several months could lure Americans back into gas-guzzling vehicles. But he cautioned automakers not to be influenced by that. "If that's their thinking, that we'll be able to dig our way out of this problem because gas is going to stay at two bucks a gallon, then that would be a premise that I would fundamentally question," Obama said.
Source:  The Washington Post

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Senate Votes to Release Bailout Funds to Obama

Democrats in House Unveil $825 Billion Stimulus Package
The Senate voted yesterday to release the second half of the Treasury's hugely unpopular initiative to stabilize the fragile U.S. financial system, granting President-elect Barack Obama virtually unfettered authority to spend $350 billion to revive sluggish credit markets and help millions of homeowners avoid foreclosure. Top Obama officials say both initiatives are critical to turning the economy around: The spending package seeks to stimulate spending by showering cash on consumers, local governments and businesses. The bailout program, meanwhile, attempts to forestall trouble in the financial system, where risky lending practices helped spark the recession in the first place. "Restoring the economy requires that we maintain the flow of credit to families and businesses," Obama said in a statement. "So I'm gratified that a majority of the U.S. Senate, both Democrats and Republicans, voted today to give me the authority to implement the rest of the financial rescue plan in a new and responsible way."
Source:  The Washington Post

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GM: UAW Pay Cuts Not Needed

Other issues to be loan plan's focus
UAW wage cuts are not needed by General Motors Corp. as it races to come up with a viability plan to please the federal government, a top company executive said Thursday. "We need to be more aggressive to drive our business to an even lower breakeven level given the risks and challenges we see in the environment," Fritz Henderson, GM president and chief operating officer, said. The statements came during a conference for automotive securities analysts, hosted by Deutsche Bank, at the MGM Grand in Detroit. He noted that there is "not a significant difference" between what GM pays its U.S. hourly workers and what Toyota Motor Corp., Nissan Motor Co. and American Honda Motor Co. pay their U.S. hourly workers when so-called variable payments are included. "I think you've got to deal with other issues," [Henderson] said of the UAW talks.
Source:  Detroit Free Press

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Green Vehicle Stimulus Unveiled

House Dems' recovery bill includes $3.5B to boost battery research, fuel-efficient autos
House Democrats unveiled an $825 billion stimulus bill that includes $3.5 billion to dramatically increase U.S. battery research and speed the adoption of more fuel-efficient vehicles. The money for advanced battery support includes $2 billion -- half in loans and half in grants -- and $200 million to encourage electric vehicle technologies. The bill also calls for $300 million to retrofit older diesel engines and replace some diesel vehicles, such as school buses, and use $400 million to help state and local governments buy more efficient alternative-fuel vehicles. Additionally, the measure includes $600 million for the federal government to replace older vehicles with alternative-fuel automobiles. The House bill will face changes when the U.S. Senate introduces its own bill, which is expected to shift more of the $2 billion in battery research money to grants not loans. Automakers should benefit from other provisions, including a $30 billion boost in highway construction spending and at least $31 billion to modernize federal and other public infrastructure projects, which should increase the sale of pickup trucks for work use. Automakers had also hoped that Congress would have added money to retire older vehicles, known as "Cash for Clunkers." Proponents wanted to give people up to $4,500 to scrap older, less-efficient vehicles in exchange for buying a new one. The move would take dirtier cars off the roads and boost slumping auto sales.
Source:  The Detroit News

[Editor's Note: With the new Congress and incoming Obama administration, there is more effort to create initiatives that address the nation’s faltering economy. "NADA is working hard to see that consumer incentives designed to jumpstart auto sales are included in the economic stimulus package," says David Regan, NADA vice president of legislative affairs. Now is the time for dealers to contact their members of Congress and ask them to support incentives that will help sell cars and revive the economy. Dealers should urge their Senators and Representatives to aggressively seek an auto sales component – such as auto interest deductibility – in the upcoming stimulus legislation. Members of Congress, their chiefs of staff and legislative directors can be reached through the Capitol Switchboard at (202) 224-3121. For more information, call NADA’s Legislative Office at (800) 563-1556.]

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Opinion: America Needs a Single National Fuel Economy Standard
by Norman Mineta

The National Highway Traffic Safety Administration recently announced that as a result of the automobile industry’s current financial difficulties it will leave to the Obama administration the task of reviewing and finalizing national fuel economy standards under the Energy Independence and Security Act. The last thing the American car industry needs right now is more uncertainty. Automakers are uncertain not only about the federal fuel economy standards they will soon be asked to comply with but also about which agency or government entity ultimately will be responsible for implementing the new standards. The United States has not one but three voices on fuel economy and carbon emissions: NHTSA, the EPA and the state of California. All three suggest different standards and require different strategies and products for compliance. For the good of our economy and the auto industry, we need a single national standard set by the federal government. Anything else sets automakers up for failure. I hope our new leaders can find a way to bridge the differing federal and state programs in innovative ways. As we look at solutions to securing a strong, viable auto industry and achieving our environmental goals, we should eliminate costly, complex burdens and choose a single fuel economy standard.
Source:  Automotive News (Subscription required.)

[Editor's Note:  Mineta, a Democrat, is a former secretary of commerce for a Democratic president, a former secretary of transportation for a Republican president, and a former member of Congress from California.]

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GM Cuts 2009 U.S. Sales Forecast for Industry

NEW YORK — General Motors cut its 2009 industrywide U.S. sales forecast to 10.5 million vehicles. The Detroit automaker previously said it expected industrywide sales of about 12 million for the year, with 10.5 million seen as a worst-case scenario for the industry. It revised its prediction in an analyst conference Thursday where Chief Executive Rick Wagoner is speaking. U.S sales fell to 13.2 million in 2008, down 18% from 16.1 million in 2007. Many analysts have been predicting sales of 10.5 million to 11.5 million in 2009.
Source:  Associated Press

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Toyota Reduces Production

DETROIT -- Toyota Motor Corp. is making further production cuts in North America as the Japanese auto maker seeks to reduce inventory levels by about half in the second quarter of the year. The company is expanding the number of nonproduction days at each facility in the first quarter by adding to cuts previously announced in January. The nonproduction days vary from plant to plant depending on the products and their inventory levels. Toyota, which just added a new factory in Canada, says inventory levels of its vehicles range from 80 to 90 days. By April or May, the company would like those levels to be halved, spokesman Mike Goss said. Mr. Goss said no layoffs would be caused by the production cuts.
Source:  The Wall Street Journal (Subscription required.)

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New FMLA Rule Takes Effect Today

The Family Medical Leave Act (FMLA) requires covered dealers to provide eligible employees up to 12 weeks of unpaid leave within a 12-month period for a variety of reasons. A final rule, adopted by the Department of Labor in November, extends FMLA leave in certain circumstances to care for family who serve or served in the armed forces. The final rule takes effect today, Jan. 16. Other changes include:

  • Employees claiming “chronic” illness must visit a health care provider twice yearly and those claiming incapacity must visit a health care provider twice within 30 days of the incapacity.
  • Employees seeking intermittent leave must try to schedule leave so as not to disrupt the employer’s operations. Generally, employees must give at least 30 days’ notice for foreseeable leave.
  • Although health care providers may not disclose employee health information without the employee’s consent, dealers may use an employee’s refusal to provide permission as a basis for questioning certification. When a serious health condition exists for more than a year, dealers may require annual medical certification.

The final rule also contains new requirements governing holidays, bonuses, and employer notification requirements. Dealers covered by the FMLA must post the revised mandatory FMLA poster in the workplace where it can be read by employees.

Click here for more info, including how to determine employer coverage and employee eligibility. NADA’s A Dealer Guide to the Family and Medical Leave Act (L.33) will be updated later this year to reflect these new changes. If you have questions, call Regulatory Affairs at (703) 821-7040 or email regulatoryaffairs@nada.org.
Source: NADA Newswire

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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
 
"I don't think an acceptable outcome is for us just to keep them on their lifeline through taxpayer dollars in perpetuity."

   
-- President-elect Barack Obama says the nation's struggling automakers must develop sustainable business models that set realistic production goals focusing on fuel efficiency in order to qualify for continued federal assistance from his administration, The Washington Post, Jan. 16


"Restoring the economy requires that we maintain the flow of credit to families and businesses."

    -- President-elect Barack Obama referring to the Senate vote Thursday granting him virtually unfettered authority to spend $350 billion to revive sluggish credit markets, The Washington Post, Jan. 16


"NADA is working hard to see that consumer incentives designed to jumpstart auto sales are included in the economic stimulus package." 

    -- David Regan, NADA vice president of legislative affairs, NADA Newswire, Jan. 16


"As we look at solutions to securing a strong, viable auto industry and achieving our environmental goals, we should eliminate costly, complex burdens and choose a single fuel economy standard." 

    -- Norman Mineta, calling for a single, national fuel economy standard, Automotive News, 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.