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Tuesday, Feb. 3, 2009 RSSSEND TO A FRIENDPRINT
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At a Glance...
Top Stories
Auto Incentive Amendment Could Be Offered Today
Opinion: Auto Dealers Critical to U.S. Economy
California Towns Bail Out Auto Dealerships
GM, Chrysler Offer New Buyouts
Auto Sales Seen Extending Slide
Fiat Races U.S. Deadline to Set Deal with Chrysler
Volkswagen's Audi May See Sales Fall for First Time in 14 Years
Carmakers to Show Off Electric Strategies
Ford to Build Plug-In in 2012
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
Auto Incentive Amendment Could Be Offered Today

NADA urges dealers and dealership employees to contact their senators immediately
WASHINGTON – The auto incentive amendment, sponsored by Sen. Barbara Mikulski, D-Md., could be offered as early as this afternoon, according to NADA's legislative office. "It is urgent that dealers and their employees continue making calls to their senators," says John McEleney, NADA chairman. "Ask your senators to include an incentive to boost auto sales in the economic stimulus package. Ask your senators whether they will vote in favor of the amendment. And ask your senators to speak on the Senate floor in support of the amendment. Remind your senators that the amendment would save their constituents about $1,500 on a $25,000 vehicle,” McEleney added.
 
NADA is urging dealers to tell their senators: (1) Incentives that successfully boost auto sales would provide state and local governments with critically needed revenue immediately; and (2) Increasing customer traffic in dealership showrooms could help jump-start auto sales and therefore save jobs. Along with NADA, the American International Automobile Dealers Association, Association of International Automobile Manufacturers and the Alliance of Automobile Manufacturers support adding this amendment to the stimulus package.

Senators can be contacted through the Capitol Switchboard at (202) 224-3121. Call NADA’s legislative office at (800) 563-1556 for more information and to report on whether your senators plan to vote in favor of this important amendment.
Source: NADA Newswire

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Opinion: Auto Dealers Critical to U.S. Economy
by Grant Cardone

If the new administration does not include a stimulus, not a bail out, for the retail auto dealers in this country any economic stimulus package will fail. Retail auto dealers are critical and vital to the survival of this country's economy, even more important than the auto manufacturers. While the manufacturers have been given most, if not, all the attention, the reality is if your local auto dealers don't survive and prosper the manufacturers will have no need to build product. Auto dealers are some of the largest employers in this country, providing health insurance, retirement plans and above average income jobs and very generous compensation programs. In addition to jobs they generate tremendous and much needed retail tax income to the cities, counties and states with some municipalities receiving as much as 30% of all tax revenue from auto sales. It is vital to every American in this country and to our entire economy that auto dealers are provided with immediate stimulus in order that they are able to stay in business and continue to move their products into the marketplace. Without auto retailers the manufacturers and parts suppliers and others dependent upon the auto industry are doomed to fail because without product being moved into the marketplace (consumer's driveways) the product built by the manufacturers will not be bought...
Source: The Huffington Post

[Editor's Note: Grant Cardone is author of Sell to Survive and Concerned Citizen.]

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California Towns Bail Out Auto Dealerships

Detroit's troubles are forcing some communities to attempt an auto bailout of their own: propping up their local car dealerships. Two California towns, hoping to preserve jobs and tax revenue, are bailing out local car dealers that are struggling to stay afloat amid tight credit markets and plunging demand for new vehicles. Victorville, a desert town on the main highway between Las Vegas and Los Angeles, recently approved a $200,000 loan to Victorville Motors, a 40-year-old family-owned dealer in the town's auto park. Norco, east of Los Angeles in the so-called Inland Empire, has approved loans of $500,000 each to Norco Mazda and Frahm Dodge. A third city, Redlands, is mulling over a financial-assistance proposal for its new- and used-car dealers. Car dealerships in these towns have been the economic engine of local government as well as pillars of the community, sponsoring everything from Little Leagues to rodeos. Victorville Mayor Rudy Cabriales said car dealers are the city's largest source of sales-tax revenue. Victorville, a city of about 106,000, projects sales and use tax revenue of $19.5 million in fiscal 2009, down 24.5% from last year. "The last thing we want is for them to shut down, leaving an empty building, an eyesore in the auto park, and more people unemployed," Mr. Cabriales said. Nationally, dealerships employed 1.1 million people in November, according to the Bureau of Labor Statistics, down 11% from a year earlier. Employment at dealerships in California is the highest in the country, at 133,721 people earning $7.38 billion. Texas is No. 2, with 86,828 people working at dealerships and earning $4.34 billion, according to the National Automobile Dealers Association.
Source: The Wall Street Journal

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GM, Chrysler Offer New Buyouts

'Attrition Program' Incentives Will Include Cash and Vehicle Vouchers
General Motors Corp. and Chrysler LLC, under pressure to comply with viability requirements set by the Treasury Department, plan to unveil attrition programs at U.S. plants as early as this week in order to trim labor costs further, according to people familiar with the matter. GM union officials have been told that the program is intended to "address the number of surplus employees and create the potential for hiring entry-level employees when the business environment improves," according to these officials. All hourly employees will be able to retire either on a normal or a voluntary basis, depending on their tenure, and receive a $25,000 vehicle voucher and $20,000 cash. The vehicle voucher will be valid for 18 months. For Chrysler, retirement-eligible workers who leave will get a $50,000 incentive plus a $25,000 Chrysler vehicle voucher, according to a union official who reviewed a notice from the company. Workers who take a buyout and leave with no retiree health-care benefits get $75,000 and a $25,000 car voucher, the person said. Last year, retirement-eligible workers received $70,000, while those who took buyouts got $100,000.
Source: The Wall Street Journal

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Auto Sales Seen Extending Slide

DETROIT -- U.S. auto sales for January are expected to drop to a 27-year low, extending a 15-month downturn and adding weight to the view that the hard-hit sector will remain a drag on the economy in the current quarter. Major automakers are scheduled to announce January sales results [today]. The releases by General Motors Corp, Toyota Motor Corp, Ford Motor Co and others will represent the first indicators of the shell-shocked state of U.S. consumer confidence for 2009. U.S. auto sales, which typically account for about 20 percent of all retail sales, dropped by 18 percent in 2008 to a 16-year low of 13.2 million units. The median forecast of 36 economists surveyed for Reuters is for an annualized sales rate of 10.2 million cars and light trucks for the month.
Source: Reuters

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Fiat Races U.S. Deadline to Set Deal with Chrysler

Fiat SpA is racing to meet a Feb. 17 deadline to comb through the operations of Chrysler LLC before going forward with a joint venture by the car makers, Fiat's chief executive said in an interview Monday. Under terms of the emergency loans Chrysler received from the U.S. government, it must present a plan by that date showing how it intends to be viable. The Fiat pact is a key part of the effort. Sergio Marchionne said Fiat is still studying the vehicle-production operations of Chrysler and then will turn to its due-diligence analysis of its finances. Under the deal, Fiat will end up with at least a 35% stake in Chrysler in exchange for helping revitalize the U.S. car maker.  Mr. Marchionne is credited with helping turn around Fiat after taking the CEO job in 2004. For Fiat, the alliance is a "lottery ticket" that could be worth nothing if Chrysler doesn't recover, he added.
Source: The Wall Street Journal

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Volkswagen's Audi May See Sales Fall for First Time in 14 Years

Volkswagen AG’s Audi luxury division is bracing for sales to stagnate or even decline for the first time in 14 years as the credit freeze and the global recession erode purchases. “I’m rather skeptical” whether Audi’s sales will rise to another record this year, Chief Executive Officer Rupert Stadler said in a Bloomberg Television interview from Davos, Switzerland. “This year will be super difficult.” Audi raised global sales 4.1 percent last year to a record 1,003,400 vehicles, the 13th straight annual increase. Orders fell “sharply” in the past three months, Stadler said in a speech on Jan. 28. The company may set a target for 2009 sales at its March 10 annual press conference, according to spokesman Juergen De Graeve.
Source: Bloomberg News

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Carmakers to Show Off Electric Strategies

But some question goal for 1 million plug-ins by 2015
WASHINGTON -- Automakers will showcase at the Washington Auto Show this week their commitment to quickly bringing electric hybrid and all-electric vehicles to market as early as next year, and they're working with communities and energy companies to help foster that adoption. Ford Motor Co. will announce today it has named Johnson Controls-Saft as its battery supplier for its 2012 plug-in electric hybrid vehicle. It will also announce an expanded partnership with utilities to include seven additional companies including DTE Energy Inc., Michigan's largest utility. General Motors Corp. is announcing efforts to work with cities to speed acceptance of its extended range electric Chevrolet Volt. The Volt, which will have an all-electric range of 40 miles on a single battery charge, is scheduled to hit the market late next year. The theme of the show: "The Automotive Seat of Power" is apt, as Washington is considering a number of policies that could remake the auto industry. President Barack Obama last week directed the Environmental Protection Agency to revisit the request of California and 12 other states to impose a 30 percent reduction in tailpipe emissions by 2016. Obama has also directed the Transportation Department to set higher fuel efficiency standards for the 2011 model year by March 30. Both EPA Administrator Lisa Jackson and Transportation Secretary Ray LaHood will tour the show.
Source: The Detroit News

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Ford to Build Plug-In in 2012

It is to make 5,000 a year; utilities are to test version of Escape
WASHINGTON -- Ford Motor Co. said Monday it would start building a plug-in hybrid-electric vehicle in 2012, using a strategy with electric cars and trucks that spreads several small bets rather than going for broke behind one model. Ford says it plans to build at least 5,000 plug-in hybrids a year beginning in 2012, using batteries from a joint venture of Johnson Controls Inc. and French battery firm Saft. The company has also recruited nine electric utilities to test plug-in versions of its Escape hybrid to see what demands such vehicles will place on customers and the electric grid. Nancy Gioia, Ford's director of hybrid vehicle programs, said the tests and slow rollout were necessary to judge not just consumer demand, but what technical hurdles utilities and owners face. "We think is 5,000 is not insignificant, and it's a good number to get out there," Gioia said. The tests will aim to answer "what's the market sensitivity, the price sensitivity ... what kind of policy might be around these vehicles, that could greatly accelerate or greatly slow their introduction."
Source: The Detroit Free Press

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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
 

"The next two months are critical to the future of our industry as we know it," says NADA Chairman John McEleney, addressing a crowd of about 5,000 during the general session at the NADA convention in New Orleans.


More Video Highlights

Quotable
 
"It is urgent that dealers and their employees continue making calls to their senators." 

   
-- John McEleney, NADA chairman, in support of an amendment that would provide consumers with a tax incentive to purchase new cars and trucks, NADA Newswire, Feb. 3


"It is vital to every American in this country and to our entire economy that auto dealers are provided with immediate stimulus in order that they are able to stay in business and continue to move their products into the marketplace."

   
-- Grant Cardone, (opinion) The Huffington Post, Feb. 2
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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