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Wednesday, Feb. 11, 2009 RSSSEND TO A FRIENDPRINT
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Top Stories
NADA Urges Dealers to Flood House Members with Calls in Support of Auto Sales Incentive
Democrats Face Calls for Cuts in Talks on Final Stimulus Bill
Treasury Announces $1 Trillion to Boost Lending
Minority Dealers Struggle to Get Loans
G.M. to Cut 10,000 Salaried Workers
China's Monthly Auto Sales Overtake U.S. For First Time
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
Top Stories
NADA Urges Dealers to Flood House Members with Calls in Support of Auto Sales Incentive

WASHINGTON -- A tax break intended to boost auto sales was passed by the Senate yesterday, but 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 the leadership to keep the auto sales incentive provision in the final stimulus bill. 

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 their leadership, the tax incentive for new car buyers could be stripped out.

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. To located your representative, visit www.house.gov. Call NADA’s legislative office at (800) 563-1556 for more information.
Source: NADA Newswire

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Democrats Face Calls for Cuts in Talks on Final Stimulus Bill

Democrats trying to send President Barack Obama a compromise stimulus plan within the next few days face demands for more spending cuts from lawmakers critical to pushing the bill through Congress. At least three senators who supported the measure want cuts producing a package that would cost less than the $838 billion bill the Senate passed yesterday or the $819 billion legislation approved by the House last month. One of the casualties in the compromise talks may be an $11 billion amendment approved by the Senate last week that would temporarily allow new car buyers to write off from their income taxes the interest on their loans and the local sales taxes on their purchase. Senator Barbara Mikulski, a Maryland Democrat who sponsored the amendment, said yesterday she is concerned the proposal may be deleted from the final bill. “The problem now is not the idea, but it is the politics,” Mikulski said on the Senate floor. “Let’s get the White House on our side. Let’s get the House of Representatives on this side. Flood ... them with phone calls.”
Source: Bloomberg News

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Treasury Announces $1 Trillion to Boost Lending

Plan has provisions to open up credit for consumers, dealers
WASHINGTON -- The federal government will commit up to $1 trillion to a program aimed at boosting consumer credit, Treasury Secretary Timothy Geithner said today. The program includes loans for car buyers and inventory financing for auto dealers. The effort will build on a program announced last November by the Federal Reserve and the Treasury Department under the Bush administration but not yet launched. The program -- called the Term Asset-Backed Securities Loan Facility, or TALF -- is designed to revive the issuance and sale of securities backed by consumer loans. When TALF was announced in November with an expected value of $200 billion, the National Automobile Dealers Association hailed it as a key step toward getting customers back in showrooms. NADA also applauded a December ruling that TALF would apply to dealer floorplan financing. NADA today applauded additional steps to "dethaw the frozen securitization market"...
Source: Automotive News

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Minority Dealers Struggle to Get Loans

Even when minority-owned auto dealerships get government guarantees for loans that they need to operate, banks still turn many of them down, says the head of the largest minority dealer group. Damon Lester, president of the National Association of Minority Automobile Dealers, says he knows of half a dozen dealerships that did not get loans even though they qualified for a loan-guarantee program run by the federal Small Business Administration. Lester calls those rejections "disheartening." NAMAD represents minority entrepreneurs who own about 2,100 U.S. new-vehicle dealerships, nearly 10 percent of the total. Last year, Lester says, NAMAD members lost about 200 dealerships. Many more minority-owned dealerships, he says, are "on the bubble." NAMAD is working with the National Automobile Dealers Association to seek broader eligibility criteria for the federal loan guarantee program.
Source: Automotive News

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G.M. to Cut 10,000 Salaried Workers

G.M. is not waiting to take the more drastic steps it deems necessary to reorganize and shrink. The automaker said on Tuesday that it would cut 10,000 salaried jobs, or 14 percent of its white-collar work force, by the end of this year. These are the first large cuts in staff in its vast international operations. “The purpose is to go into the Feb. 17 submission showing we are making progress on our viability plan,” said a G.M. spokesman, Tom Wilkinson. G.M. has received $9.4 billion in loans and could obtain $4 billion more if its progress report passes muster with the Obama administration. Chrysler, which has received $4 billion, also must outline its viability plans by next week. When the loans were approved by President George W. Bush, the Feb. 17 deadline appeared to be a critical date. G.M. and Chrysler executives were expecting a car czar would be in place to review their submissions. But the selection process has moved slower than expected. G.M. executives also met on Tuesday in Detroit with representatives of the company’s bondholders and the United Automobile Workers union — both of which are going to be asked to make concessions to improve G.M.’s financial health.
Source: The New York Times

 

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China's Monthly Auto Sales Overtake U.S. For First Time

SHANGHAI — China's monthly vehicle sales surpassed those in the United States for the first time in January, moving this country closer to becoming the world's biggest auto market, data released Tuesday showed. But China's ascent in the global auto market has been hastened by the plunge in U.S. auto sales, which tumbled 37% in January to a 26-year low of 656,976 units. Chinese vehicle sales also have cooled, but hardly as dramatically. In January, 735,000 vehicles were sold, down 14.4% from a monthly record 860,000 last January, the China Association of Automobile Manufacturers said. China's vehicle market has grown dramatically in recent years, overtaking Japan in 2006 to become the world's second-largest by annual sales. Still, if American car demand revives in coming months, the United States will remain the world's largest market by annual sales — at least for another year.
Source: The Associated Press

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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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Featured Video
 
 

 NADA Tackles Industry Crisis


More Video Highlights

Quotable
 
“The problem now is not the idea, but it is the politics. Let’s get the White House on our side. Let’s get the House of Representatives on this side. Flood ... them with phone calls.”

    -- Sen. Barbara Mikulski (D-Md.), who said yesterday she is concerned an amendment she sponsored to temporarily allow new car buyers to write off the interest on their loans may be deleted from the final stimulus bill, Bloomberg News, Feb. 11.
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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