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Top Stories
NADA Issues Call-to-Action to Preserve Auto Sales Stimulus in House
Senate to Vote Today on Stimulus Bill
Detroit Wants to Thin the Herd of Dealers
Tight Credit Squeezes Dealerships' Inventories
GM to Cut 14% of Global Salaried Workforce This Year
GM's Vice Chairman Lutz to Retire
CPO Sales Continue to Roll
NADA Update
FTC Civil Penalties Have Increased
Webinar Feb. 12: Shore Up Your Bottom Line by Saving Energy
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
NADA Issues Call-to-Action to Preserve Auto Sales Stimulus in House

WASHINGTON -- With a tax break intended to boost auto sales likely to pass the Senate today, NADA is calling on its dealer network to put pressure on House members to protect the incentive as the bill moves to a joint House-Senate conference committee. Dealers are urged to ask their representatives to sign onto Rep. Bill Pascrell’s (D-N.J.) letter to House Speaker Nancy Pelosi (D-Calif.), which encourages her to keep the auto sales incentive provision. 

"Immediate dealer action in support of the Mikulski bill is critical in the House if the tax incentive for new car buyers is to be retained," says David Regan, NADA vice president of legislative affairs.

The Senate's version of the stimulus package contains Auto Ownership Tax Assistance, a bill introduced by Maryland Sen. Barbara Mikulski, which permits families to deduct sales/excise tax as well as auto loan interest from their yearly income tax bill. However, the House-passed version did not contain this provision.

"Unless House members put pressure on Speaker Pelosi, the tax incentive for new car buyers could be stripped out," Regan added.

Dealers are strongly urged to 1) call their representatives and ask them to sign onto Rep. Pascrell’s letter to the Speaker on the Auto Ownership Tax Assistance bill; and 2) ask their members to urge the House leadership to support the provision. House members can be contacted through the Capitol Switchboard at (202) 224-3121. Call NADA’s legislative office at (800) 563-1556 for more information.
Source: NADA Newswire

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Senate to Vote Today on Stimulus Bill

3 Republicans Join Move to Cut Off Debate
With little margin for error, the Senate overcame a key parliamentary hurdle yesterday to move a massive economic stimulus bill one step closer to becoming law ... On a 61 to 36 vote, the Senate cleared the path for a final vote today on its $838 billion bill that would provide money for a wide variety of purposes, including a $15,000 tax credit for home buyers and $3.4 billion in repairs to public parks, hoping that the two-year package of spending and tax cuts would provide a cushion in the ongoing economic recession that President Obama yesterday predicted would become a "deepening disaster" without the stimulus. After full approval of the package today, the Senate will send its version of the legislation to a conference with the House, which approved its own $819 billion stimulus bill on Jan. 28 with no Republican votes.
Source: The Washington Post

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Detroit Wants to Thin the Herd of Dealers

... as General Motors and Chrysler operate on $17.4 billion in government loans, dealers ... are fighting more than the economy to stay in business. Both automakers are making dealers an integral part of their recovery plans as they prepare progress reports for the government that are due next Tuesday. GM wants to shed 1,675 of its more than 6,000 dealers by the end of 2012. Chrysler, by contrast, is pressuring its dealers to take more inventory, even though sales were down 55% in January alone and dealers — just like buyers — are having trouble borrowing money to buy cars. The industry will see a net loss of 900 new car dealers this year, the biggest thinning of the ranks in nearly three decades, predicts the National Automobile Dealers Association. That's on top of a net loss of 760 dealers last year. The numbers alone "don't describe the pain," said NADA's immediate past chairman, Annette Sykora, who has Ford and Chrysler dealerships in the small West Texas towns of Slaton and Levelland. Speaking to dealers at the group's convention in New Orleans last month, she added, "Some dealers mortgaged their own homes to try to stay in business and still had to close."
Source: USA TODAY

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Tight Credit Squeezes Dealerships' Inventories

As credit stays tight, lenders are canceling some auto dealers' credit lines to buy new vehicles, raising interest rates on inventory loans and demanding that dealers put more equity into their businesses. Other floorplan lenders are not taking new clients at a time when many dealers are seeking new finance sources, an Automotive News review suggests. Banks and automakers' captive finance companies say tighter credit standards are necessary responses to the auto industry's painful recession. But some dealers say the loss of their floorplans — or costly new restrictions on them — could force them to close. "Dealers are under a lot of pressure," said Michael Charapp, a lawyer in suburban Washington who represents dealers. Lenders are placing new restrictions on the loans they make to dealers for inventory financing. Some banks and captive finance companies are:

• Canceling floorplan credit lines
• Auditing floorplan accounts more frequently
• Raising interest rates on inventory loans
• Accelerating repayment schedules for aged inventory
 
As part of its rescue of the U.S. financial industry, the federal government created a fund designed to lend as much as $200 billion to investors to buy securities backed by assets such as auto loans. The National Automobile Dealers Association successfully lobbied the Federal Reserve to make securities backed by floorplan loans eligible for funding.
Source: Automotive News

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GM to Cut 14% of Global Salaried Workforce This Year

Automaker also will trim executive pay by 10%
General Motors, facing a Feb. 17 deadline to show the government it's a viable company, said today that it will cut 14 percent of its salaried jobs globally by the end of the year and slash the salaries of many who remain. Salaried employment will be reduced to 63,000, from 73,000, the company said in a statement. In the United States, about 3,400 of GM's 29,500 salaried employees will lose their jobs, and most will be eliminated by May 1. The cut in base pay for executives will be 10 percent. "Many other" salaried workers will have their pay reduced by 2 percent to 7 percent, GM said.
Source: Automotive News

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GM's Vice Chairman Lutz to Retire

General Motors Corp. product chief Robert Lutz will give up his post for an advisory role April 1 and retire at year's end, concluding a chapter in his colorful, 46-year career in the car industry and signaling a shift in emphasis at GM. Mr. Lutz, a former Marine pilot known for his blunt manner and a love of "muscle cars" brimming with horsepower, was brought to GM in 2001 to liven up its vehicles. He is credited with improving the look and feel of its passenger cars and pushing the development of the Chevrolet Volt, a battery-powered car GM aims to launch in 2010. "It just seemed to be the right time," Mr. Lutz, 76 years old, said by email Monday. "As they say, 'My work here is [largely] done.' The fun and excitement have become fairly rare commodities, and others are temperamentally better-suited to dealing with this increasingly regulation-dominated product future." Mr. Lutz will be succeeded as head of global product development in April by Tom Stephens, who runs the company's powertrain unit, which develops engines and transmissions.
Source: The Wall Street Journal

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CPO Sales Continue to Roll

MONTVALE, N.J. — The certified pre-owned market carried its momentum from December into the New Year, proving to be a positive sign for the auto industry in an otherwise difficult environment. The month was the best January on record for CPO sales, according to Autodata Corp, as the great majority of automakers showed gain. ... there were 140,803 CPO units sold during the month, and even though sales were off 4.3 percent from December, this marked a 10-percent upswing from a year ago, Autodata noted. Domestics also showed some strength in January. Ford's combined CPO sales were 13,676 units, a 23.1-percent uptick from a year ago. General Motors improved, as well, selling a combined 39,293 certified units, up 4.3 percent from January 2008. Chrysler was the only one of the Big 3 to show a drop in certified sales, but it was a narrow one. Its CPO numbers fell 3.3 percent to 9,444 units.
Source: Auto Remarketing

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NADA Update
FTC Civil Penalties Have Increased

The FTC has announced an increase in civil monetary penalty amounts effective Feb. 9, 2009.  The adjustments are based on the increase in the Consumer Price Index (CPI), and include an increase in the maximum penalties per knowing violation of the Fair Credit Reporting Act (examples of which would include the Red Flags, Address Discrepancy, and Affiliate Sharing Rules) from $2,500 to $3,500. In addition, the maximum statutory penalty per violation for certain FTC rules that are enforced under the FTC Act have increased from $11,000 to $16,000. Under the FTC Act, when a rule (such as the GLB Safeguards Rule, Privacy Rule, or the Red Flags and Address Discrepancy Rules) continues to be violated despite an order to comply with a rule, the FTC can file a lawsuit in federal court seeking $16,000 for each violation of that rule as well as equitable relief. For more information, click here.

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Webinar Feb. 12: Shore Up Your Bottom Line by Saving Energy

In uncertain economic times, every dollar counts. And the money dealers spend on energy is a controllable expense. To learn how to begin reducing your dealership’s energy bills, a free Webinar, “Energy Savings 101” hosted by EPA’s ENERGY STAR, will be offered Thursday, Feb. 12 at 11:30 a.m. EST. The Webinar covers ENERGY STAR guidelines for energy management, including general and dealership-specific upgrade opportunities. Participants will also learn about the importance of benchmarking. The Webinar will demonstrate what energy savings can mean for your dealership, your customers and your bottom line. NADA and ENERGY STAR are entering their third year of an Energy Stewardship Initiative that challenges dealers to cut their energy expenses by at least 10 percent. If all dealers reduced energy consumption by about 10 percent, they would save more than $190 million a year and “green” their stores. Click here to register for the free “Energy Savings 101” Webinar. It lasts one hour and includes time for Q&A. For more information about NADA’s partnership with ENERGY STAR, go to www.nada.org/energystar.

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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 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 have 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. 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
 
 

 NADA Tackles Industry Crisis


More Video Highlights

Quotable
 
"Immediate dealer action in support of the Mikulski bill is critical in the House if the tax incentive for new car buyers is to be retained. Unless House members put pressure on Speaker Pelosi, the tax incentive for new car buyers could be stripped out."

   
-- David Regan, NADA vice president of legislative affairs, urging dealers to call their representatives and ask them to sign onto Rep. Pascrell’s letter to House Speaker Pelosi that preserves the Auto Ownership Tax Assistance bill, NADA Newswire, Feb. 10


"We are talking about people who are part of the fabric of our society. We are not talking about an abstraction, and we're not talking about a single ZIP code, like Wall Street. We are talking about the automobile industry, which is in every state and every community."

    -- Sen. Mikulski, who proposed the tax break for new-car buyers, describing the virtues of the workers who build cars and sell cars, The Columbus Dispatch, Feb. 10


"If the auto industry is doing well, the national economy does better."

   
-- Sen. Sherrod Brown, supporting the federal stimulus package that includes a tax break for new-car buyers, The Columbus Dispatch, Feb. 10


"Some dealers mortgaged their own homes to try to stay in business and still had to close. The numbers alone don't describe the pain."

    -- Annette Sykora, NADA's immediate past chairman and owner of Ford and Chrysler dealerships in the West Texas towns of Slaton and Levelland, referring to a possible net loss of 900 new car dealers this year, the biggest thinning of the ranks in nearly three decades, USA Today, Feb. 10


"The fun and excitement have become fairly rare commodities, and others are temperamentally better-suited to dealing with this increasingly regulation-dominated product future."

    -- Bob Lutz, GM product chief, announcing his retirement after a 46-year career in the car industry, The Wall Street Journal, Feb. 10
Video Highlights
 
  

"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 at the general session of the NADA convention in New Orleans.


NBC: "Demise of local car dealerships leaves big dent."
2009 Convention in New Orleans
NADA on the Front Lines


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.