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At a Glance...
Top Stories
NADA-Backed Tax Incentive for New Car Purchases is Included in Stimulus Bill
Obama to Big 3: Craft Plan That Works
February U.S. Auto Sales Look Like January
GM Offers Retirement Incentives to 22,000
GM's Hummer Said to Draw Interest From China, Private Equity
GM Said to Seek Swedish Loan Guarantees to Fix Saab
TV Drive Gives Car Dealers a Boost
NADA Update
FTC Civil Penalties Have Increased
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-Backed Tax Incentive for New Car Purchases is Included in Stimulus Bill

WASHINGTON – Congressional leaders, recognizing the importance of auto sales to an economic recovery, have included the proposal to give tax relief to new car buyers in the final version of the $789 billion stimulus package. The tax incentive initiative, backed by the National Automobile Dealers Association (NADA), allows consumers to deduct the sales and excise tax paid on new vehicle purchases. 
 
"NADA is pleased that tax incentives on new-auto sales is included in the new economic stimulus bill," says David Regan, NADA vice president of legislative affairs. "Allowing consumers to deduct the sales and excise tax paid on new car and truck purchases will help jump-start auto sales."

NADA preferred that the stimulus bill also include a provision to allow tax payers to deduct auto loan interest.

"Including interest deductibility on auto loans would have promoted even greater interest in a new automobile, but we applaud both the House and Senate leadership for recognizing the importance of automotive retailing to the nation’s economy," Regan added. "We especially thank Senators Barbara Mikulski (D-Md.) and Sam Brownback (R-Ks.) and Representatives Bill Pascrell (D-N.J.) and Steve LaTourette (R-Ohio) for their leadership on this issue. New-car dealers generate nearly 20 percent of all retail sales in the country. Therefore, anything that can help restore consumer confidence and increase auto sales also will help stimulate an economic recovery."

The Auto Ownership Tax Assistance bill, as introduced by Sen. Barbara Mikulski (D-Md.) and Rep. Bill Pascrell, Jr. (D-N.J.), would have allowed consumers to deduct auto loan interest as well as sales and excise taxes. The Senate passed the legislation, in its entirety, by a vote of 71-26. However, to reduce costs of the overall package, the auto loan interest deduction was stripped out in House-Senate Conference negotiations. Click here for the complete NADA statement.
Source: NADA Newswire

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Obama to Big 3: Craft Plan That Works

[President] Obama, meeting with The Detroit News and more than a dozen other newspapers in the White House on Wednesday ... offered the struggling automakers unspecified additional aid -- if automakers engineer realistic plans to make their business profitable. "My goal consistently has been to offer serious help to the auto industry, once a plan is in place that ensures long-term viability and that we are not just kicking the can down the road," Obama said. "And so what the nature of that help ends up looking like, I think it's going to depend on the plan." ... "Just based on the conversations I've had, the reports that I've seen, what's going to be clear is that everybody is going to have to put some skin in the game. Management, shareholders, creditors, dealers, workers. In order to make this thing work, everybody is going to have to make some short-term sacrifices in order to see some long-term benefit." Obama said a "disorderly bankruptcy of one of the Big Three could be disastrous, not just for those states that are very reliant on autos, but for the economy as a whole." The president could name his auto czar and auto restructuring team as early as today, officials said. The Treasury Department already has hired an investment bank and two law firms to advise it on the auto restructuring.
Source: The Detroit News

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February U.S. Auto Sales Look Like January

CHICAGO -- U.S. auto industry sales have been running about the same in February as January, the worst month in 27 years, but signs of recent stability in retail sales have continued and remain encouraging, a Ford Motor Co. executive said [Wednesday]. "So far, February is starting out about the same," Ford marketing and sales chief Jim Farley told reporters on the sidelines of the Chicago auto show. U.S. auto sales fell 37 percent overall in January from a year earlier under the U.S. recession. The annualized rate of sales, a key measure for economists, fell to 9.57 million units, the lowest monthly rate since 1982. Toyota's U.S. sales chief Bob Carter said February was "more of the same," and predicted "We're really going to remain the same until consumers see some fundamental change." Ed Peper, the head of Chevrolet's North American unit, agreed. "So far, it's been kind of like January," Peper told Reuters. "It started off fairly similar. But I think this particular month, with a lot of the promotions that a lot of manufacturers are doing around Presidents Day, I think we will see a pickup in business."
Source: Reuters

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GM Offers Retirement Incentives to 22,000

Union Members Targeted as Company Prepares Viability Plan to Meet Tuesday Deadline
General Motors Corp. is offering retirement incentives to 22,000 of its 62,000 United Auto Workers union members as part of a turnaround plan it must present to the U.S. government by Tuesday. The move is the latest cost-cutting effort by GM in connection with the $13.4 billion in bailout loans it won in December. GM and union negotiators are gearing up to talk through the weekend on other ways to lower labor costs, including possible reductions in supplemental pay for workers who have been laid off, and loosening of union work rules, a person close to the discussions said. Those cost cuts would require changes to a labor contract signed in 2007. Meantime Wednesday, Chrysler LLC, which took $4 billion in U.S. loans and also is required to submit a "viability plan" by Feb. 17, said it is in talks with lenders about swapping debt for stock, a key requirement of the loan terms. In its new retirement inducement, GM is offering up to $20,000 in cash to certain workers who choose to leave the company, plus a $25,000 voucher toward a car purchase. That's far less than some of the company's previous buyout offers.
Source: The Wall Street Journal

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GM's Hummer Said to Draw Interest From China, Private Equity

General Motors Corp., planning asset sales to keep $13.4 billion in U.S. loans, has attracted interest in its Hummer brand of light trucks from a Chinese company and a private-equity firm, people familiar with the talks said. “The Hummer review is progressing and an update is due by the end of the first quarter,” said GM spokeswoman Joanne Krell, who wouldn’t comment on any bidders. Unloading the sport-utility vehicle unit would move GM closer to the goal of showing its future viability to the U.S. Treasury by Feb. 17. Chief Executive Officer Rick Wagoner said GM was considering options for Hummer, including a sale, at the June 3 annual meeting as record fuel prices prompted the automaker to shift its focus to more fuel-efficient cars away from light trucks.
Source: Bloomberg

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GM Said to Seek Swedish Loan Guarantees to Fix Saab

General Motors Corp. is asking Sweden to guarantee $600 million in European Investment Bank loans to keep the Saab Automobile unit operating until it can be restructured for sale, a person familiar with the talks said. The loans, along with about $400 million from GM, would allow Saab to introduce new models that would keep Saab competitive ... If Saab doesn’t get the aid, it may be forced into restructuring under Swedish law... It is “possible” that GM has told the government that if Sweden doesn’t help Saab, it may be put into administration or shuttered, said Saab spokesman Eric Geers. He declined to comment on the potential size and structure of a government aid package. GM is trying to have a solution for Saab by Feb. 17, when it must present a progress report to the U.S. Treasury on how it will become viable so it can repay $13.4 billion in government loans by 2011. GM Vice Chairman Bob Lutz said in January that Saab, in which GM first bought a stake in 1990, has been on “life support” for two decades. “Saab got watered down and lost its way and nobody at GM has been able to figure out what to do with it,” said analyst Jim Hall, principal of 2953 Analytics in Birmingham, Michigan. GM, Saab and the Swedish government are in a “continuous dialogue” about aid for Saab, Geers said in a telephone interview [Wednesday]. GM said Dec. 2 it would seek a buyer or other options for Saab.
Source: Bloomberg

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TV Drive Gives Car Dealers a Boost

Area car dealers want you to know "it's the best time in years to buy a car." Trouble is, with their industry in crisis, they don't have the advertising budget to spread the word. However, KUSA-TV and KTVD-TV are driving to the rescue: A campaign of public-service announcements is slated to launch on television this week. Additionally, radio spots on eight Clear Channel stations are already running. "They understand this is an important segment of the economy," said Tim Jackson, president of the Colorado Automobile Dealers Association. "Certainly in this credit meltdown," auto and housing industries are crucial to recovery. The stations are being "good corporate citizens" by donating air time, Jackson said. There is no agreement for paid advertising in the future, "no quid pro quo," he said, simply a matter of "business helping business." The campaign is modeled on one launched by the National Automobile Dealers Association that is running in Chicago; Phoenix; St. Louis; Memphis, Tenn., and other markets.
Source: The Denver Post

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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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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
 
"NADA is pleased that tax incentives on new-auto sales is included in the new economic stimulus bill."

    -- David Regan, NADA vice president of legislative affairs, NADA Newswire, Feb. 12


"Just based on the conversations I've had, the reports that I've seen, what's going to be clear is that everybody is going to have to put some skin in the game. Management, shareholders, creditors, dealers, workers. In order to make this thing work, everybody is going to have to make some short-term sacrifices in order to see some long-term benefit."

      -- President Barack Obama, speaking to reporters in the White House on Wednesday about the Detroit Three's plans for future viability, due to the U.S. Treasury Tuesday, The Detroit News, Feb. 12.


"They understand this is an important segment of the economy. Certainly in this credit meltdown, auto and housing industries are crucial to recovery. The stations are being 'good corporate citizens' by donating air time."

   
-- Tim Jackson, president of the Colorado Automobile Dealers Association, referring to the campaign, "It's the Best Time in Years to Buy a Car," running on two network affiliates and eight Clear Channel stations in the state, The Denver Post, Feb. 11.

Member Products & Services
 

Save Big with Lenovo
Lenovo is offering NADA members up to $815 off select ThinkPad notebooks. Great savings are available on all ThinkPad and IdeaPad notebooks along with all computing accessories. Free ground shipping is available on all Web orders. This is a limited-time offer. To take advantage of these savings, visit NADA's PC Purchase Program online (login required), click the "Lenovo" link, then "Special Offers," or call (800) 426-7235, Option 1, Ext. 4838.
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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