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Friday, Jan. 30, 2009 RSSSEND TO A FRIENDPRINT
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At a Glance...
Top Stories
Uncle Sam wants you to buy a car
Tax incentive bill from Maryland Senator is a boost for struggling auto industry, economy
Ford: Feds can do more to lift sales
Chrysler says it needs $3B more in loans
Automakers, Calif. regulators meet on emissions
Feds roll out vehicle database
Honda cuts outlook as third-quarter profit drops 90%
Report: Toyota expecting first net loss since 1963
Committed to Community: Time Magazine and Goodyear honor Louisiana auto dealer
NADA Update
NADA study finds double regulating fuel economy by states harmful to struggling auto industry
NADA, SBA and NAMAD launch campaign on dealer eligibility for SBA Guaranteed Loans
Understanding TALF
Top Stories
Uncle Sam wants you to buy a car

A few plans floating through Capitol Hill are trying to get consumers back in the driver's seat.
NEW YORK -- With auto sales at crisis levels, Washington is trying to figure out how to get Americans buying cars again. Several ideas are on the table, but two of them are really making the industry pay attention. One plan is to make new car costs tax deductible. The other is to give rebates to Americans with old cars so they can better afford to buy new ones, a program otherwise known as "cash for clunkers." In the short term, said David Regan, the National Association of Automobile Dealers' vice president for legislative affairs, measures like tax deductions and cash for clunkers could lessen the pain for the nation's entire economy. "We believe, if it's targeted, it will create some ... increases in sales," he said, "and that's exactly what we need right now." With car sales accounting for about 20% of ... all retail sales in America, Regan said, boosting car sales will have a bigger economic impact than ... other products. "We believe the revival will have to come through the showrooms," he said.
Source: CNNMoney.com

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Tax incentive bill from Maryland Senator is a boost for struggling auto industry, economy

WASHINGTON – The National Automobile Dealers Association announced its strong support for legislation proposed by U.S. Sen. Barbara Mikulski, D-Md., to stimulate the struggling economy by boosting retail auto sales. Sen. Mikulski’s proposal, S. 333 — The Auto Ownership Tax Assistance Act — grants a tax deduction for consumers who purchase a new car or truck. New vehicle owners would be able to temporarily deduct sales and excise taxes as well as interest on auto loans from their income taxes. Earlier in the month, Rep. Bill Pascrell, D-N.J., introduced a companion measure in the House, H.R. 159. “With auto sales constituting almost 20 percent of the nation’s retail economy, a boost in new vehicle sales would create a wave of economic activity, which would be felt through every level of the economy, from dealers on Main Street to the factory floor,” said David Regan, NADA vice president of legislative affairs. “House and Senate leadership and President Obama need to seriously consider how Sen. Mikulski’s’ bill enhances the economic stimulus legislation under consideration in Congress.”
Source: NADA Newswire

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Ford: Feds can do more to lift sales

After dropping record $14.6B, carmaker calls on government to offer new incentives.
Ford Motor Co. is calling on Washington to do more to stimulate the economy and get consumers back into its showrooms, after posting a record loss of nearly $14.6 billion for 2008 on Thursday. ... Ford has lobbied lawmakers for financial aid for its cross-town rivals, General Motors Corp. and Chrysler LLC, has suggested similar support for automotive suppliers and is now urging aggressive action to spur consumer spending. "Anything that can incentivize the consumer, especially with regard to automobiles, would be great, because it's such an important part of the economy," CEO Alan Mulally told The Detroit News. "I know that they know how important the automotive sector is." Auto analyst Rebecca Lindland of IHS Global Insight said Ford is playing a risky game by asking the federal government to help bail out the rest of the industry while trumpeting the relative strength of its cash position. Ford said that it expects to significantly reduce its cash burn rate this year, despite a dismal economic outlook. It will save billions by deferring payments to a union-run trust for retiree healthcare and through operating cost reductions announced last fall, Booth said. Ford is currently in the midst of its latest round of white-collar layoffs, which aims to cut Ford's U.S. salaried payroll by another 10 percent. The automaker has eliminated more than 13,000 salaried positions and more than 43,500 hourly jobs in North America since the end of 2005.
Source: The Detroit News

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Chrysler says it needs $3B more in loans

That will allow Fiat deal to close
Chrysler LLC confirmed Thursday it needs an additional $3 billion in loans from the federal government to close its deal with Fiat SpA. Chrysler must present a viability plan by Feb. 17 that the Obama administration will use to determine whether the automaker will receive more loan money. Chrysler CEO Bob Nardelli said the $3-billion loan and Fiat deal could be closed "basically back to back" after the company meets its loan conditions. "They're not asking for anything more than what the U.S. Treasury has asked for," Nardelli said in a taped video message on the company's Web site Thursday. Last week, Chrysler announced a plan to give Fiat a 35% stake in the Auburn Hills automaker in exchange for access to most of Fiat's platforms so Chrysler can build a small-car lineup. The deal also would allow Fiat to raise its stake in Chrysler to a controlling 55%. ... Chrysler, in its statement, said no tax dollars would go to Fiat. The alliance, Chrysler said Thursday, is "in line with U.S. Treasury's request for significant restructuring actions."
Source: Detroit Free Press

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Automakers, Calif. regulators meet on emissions

Four automakers have met with environmentalists and the California Air Resources Board to see whether the parties can agree on nationwide standards for carbon dioxide emissions. The nonprofit Aspen Institute said today that it had convened a group of stakeholders that included Ford Motor Co., General Motors, Honda Motor Co., Toyota Motor Corp., the Sierra Club, the Union of Concerned Scientists and the Natural Resources Defense Council. According to a post on the institute's Web site, the parties "explored ways to achieve national and state goals for reduction of greenhouse gas emissions and fuel economy improvements."
Source: Automotive News (Subscription required)

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Feds roll out vehicle database

So far, 27 states are enrolled
WASHINGTON -- The U.S. Justice Department today announced the launch of an electronic database that will help auto dealers and consumers check vehicle histories. The database, which has been in the works for more than 16 years, [went] live at 9 a.m. EST on Friday, but it remains incomplete. Last year, the National Automobile Dealers Association, automakers and consumer groups joined to ask the government to complete rules to carry out the database. The consumer groups also sued in federal court. A judge directed the government to undertake the database by Jan. 30. The goal of the database is to reduce title-washing -- the practice of taking a rebuilt or repaired wreck or flood car from one state and giving it a clean title in a different state, so that an unsuspecting buyer pays more than the vehicle is worth. Ivette Rivera, director of legislative affairs for NADA, said the Justice Department did a "great job," within the limits of the 1992 law, to get the database up and running. She said improvements are needed. One is the ability to check batches of Vehicle Identification Numbers. Initially, dealers and others only will be able to check them one at a time. Also, the law requires only monthly data collections. So timeliness is a problem, Rivera said. NADA [is seeking] a law that would require insurers to disclose immediately every vehicle they declare a total loss, for any reason.
Source: Automotive News (Subscription required)

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Honda cuts outlook as third-quarter profit drops 90%

TOKYO -- Honda Motor Co. on Friday reported a 90% drop in third-quarter net profit, dragged down by the credit crisis, cautious consumer sentiment and the yen's strength, and further slashed its forecast for the full fiscal year. Japan's second largest car maker by volume after Toyota posted a net profit of ... $225.2 million in the three months to Dec. 31, down from a net profit ... a year earlier. The downbeat results come a day after Ford Motor Co. reported a much-wider-than-expected net loss for the fourth quarter, reflecting the tough business environment afflicting the entire auto industry. Honda, like its competitors, recently stepped up efforts to cut back production for the current fiscal year to bring down inventory levels as demand collapses in the U.S., Europe and Japan. As a result, the company lowered its earnings forecast for the fourth time in the current fiscal year, and the third time in the past three months.
Source: The Wall Street Journal (Subscription required)

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Report: Toyota expecting first net loss since 1963

TOKYO — News reports say Toyota is expecting a net loss for the fiscal year through March — its first in more than four decades. Japan's Kyodo News agency and The Nikkei business newspaper reported Friday that Toyota is to revise down its projections for the third time, with the operating loss now expected at around 400 billion yen ($4.5 billion) from the earlier projection of $1.7 billion (150 billion yen). Nikkei says Japan's top automaker now expects a net loss for the fiscal year ending March — the first net loss since 1963.
Source: The Associated Press

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Committed to Community: Time Magazine and Goodyear honor Louisiana auto dealer

George P. Fritze recognized for community service and industry accomplishments
NEW ORLEANS – George P. Fritze, owner of Red River Motor Co. in Bossier City, La., was named the 2009 TIME Magazine Dealer of the Year. Fritze received the honor at the National Automobile Dealers Association (NADA) Convention & Exposition in New Orleans. Fritze, 52, was chosen to represent the Louisiana Automobile Dealers Association (LADA) in the national competition. He was one of only 49 auto dealers nominated for the 40th annual award, sponsored by TIME Magazine in association with Goodyear, and in cooperation with NADA. For decades, Fritze has been deeply involved in countless civic and community organizations, such as: American Heart Association, Red Cross, Bossier Arts Council, Boy Scouts, Louisiana State Fair, Louisiana State University’s (LSU) Tiger Athletic Foundation, Junior Achievement and United Way. But he considers his work to raise $7 million to build the Sutton Children’s Medical Center in Shreveport his most meaningful accomplishment, saying, “I was very proud to help bring this world-class level of care to our city.”
Source: NADA Newswire

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NADA Update
NADA study finds double regulating fuel economy by states harmful to struggling auto industry

Industry needs single national standard, not patchwork of state regulations
WASHINGTON — A comprehensive analysis released today by the National Automobile Dealers Association (NADA) on a California Air Resources Board’s (CARB) rule that would allow individual states to regulate  fuel economy standards finds numerous unintended consequences that will cause economic harm and provide little or no environmental benefit over the proposed federal standards. “With new national fuel economy standards expected to be finalized by the Obama administration by April 1, complying with the additional state standards would create a regulatory patchwork that would undermine the national fuel economy program at a time when the auto industry needs regulatory certainty and stability,” says David Regan, NADA vice president of legislative affairs. “Separate and apart from the stringency of standards set by the federal government or California, the establishment of 13 state-based fuel economy regimes would cause irreparable harm to an already struggling automobile industry.” Regan added that a major slump in auto sales forced 900 dealerships to close their doors in 2008 and put the domestic automakers in the difficult position of needing billions in bridge loans from the federal government to prevent bankruptcy.  GM and Chrysler have already received $17.4 billion in loans. Ford has yet to ask for assistance.  “It makes no sense for the federal government to aid the auto industry with one hand, and then burden it with a duplicative rule that regulates fuel economy completely differently than the federal government,” Regan continued. Click here for the report, "Patchwork Proven: Why A Single National Fuel Economy Standard Is Better for America Than A Patchwork of State Regulations."
Source:  NADA Newswire

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NADA, SBA and NAMAD launch campaign on dealer eligibility for SBA Guaranteed Loans

NADA, the National Association of Minority Automobile Dealers (NAMAD), and the Small Business Administration (SBA) have developed a joint Motor Vehicle Dealer Loan Guaranty Campaign to inform small new-car and -truck dealers about their eligibility for SBA 7(a) guaranteed loans. Small dealers who’ve been affected by recent economic conditions may benefit from the program. The SBA guarantees loans made by local lenders for small business applicants who cannot obtain credit on a conventional basis. SBA staff will be available at NADA’s Federal Regulatory Outreach Pavilion at the NADA Convention to answer dealers’ questions about the program. Questions may also be directed to the NADA Hotline at (888) 672-5147 between 8:30 a.m. and 4:30 p.m. EST, Monday through Friday. When calling, mention that you are seeking assistance in applying for or obtaining a SBA-guaranteed loan. Click here for the campaign fact sheet.
Source:  NADA Newswire

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Understanding 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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Featured Video
 

"Dealers are assets, not liabilities," says NADA Chairman John McEleney at the opening of the NADA convention in New Orleans


More Video Highlights

Quotable
 
"... the [economic] revival will have to come through the showrooms."

   
-- David Regan, NADA vice president of legislative affairs, who says measures like tax deductions and cash for clunkers could lessen the pain for the nation's entire economy, CNNMoney.com, Jan. 29


"Anything that can incentivize the consumer, especially with regard to automobiles, would be great, because it's such an important part of the economy. I know that they know how important the automotive sector is."

    -- Ford Motor Co. CEO Alan Mulally, who is calling on Washington to do more to stimulate the economy and get consumers back into its showrooms, The Detroit News, Jan. 30


"I was very proud to help bring this world-class level of care to our city."

   
-- George P. Fritze, owner of Red River Motor Co. in Bossier City, La., and the 2009 TIME Magazine Dealer of the Year, who considers his work to raise $7 million to build the Sutton Children’s Medical Center in Shreveport his most meaningful accomplishment, NADA Newswire, Jan. 30
Video Highlights
 
 
'NBC Nightly News with Brian Williams' reports: "Demise of a local car dealership leaves a big dent."



2009 Convention in New Orleans
NADA Tackles Industry Crisis


Click here for more NADA-TV reports.

 
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