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At a Glance...
Top Stories
Obama to Sign Stimulus Bill Today in Denver
GM, Chrysler Race to Finish Plan as Deadline Looms
Economy Strains Under Weight of Unsold Items
Lutz: Despite Good Cars, Saturn Probably Dies
County in New Mexico Halts Effort to Implement its Own Fuel Economy Rules
Chinese SUV Maker Denies Reports it May Buy Hummer
For Some Car Buyers, Worry Takes a Back Seat to Deals
NADA Update
2010 Convention Workshop Proposals Now Being Accepted
FTC Civil Penalties Have Increased
NADA, SBA and NAMAD Launch Campaign on Dealer Eligibility for SBA Guaranteed Loans
Top Stories
Obama to Sign Stimulus Bill Today in Denver

WASHINGTON – President Barack Obama is ready to sign into law the most sweeping economic package in decades, a rescue plan meant to reinvigorate job creation, consumer spending and public optimism. Add the bill to an ever-growing deficit. Capping the biggest victory of his month-old administration, Obama will sign the economic legislation [today] in Denver. The setting, the Denver Museum of Nature & Science, is meant to underscore the investments the new law will make in "green" energy-related jobs. There's a $400 tax break for most individual workers and $800 for couples, including those who do not earn enough to pay income taxes. It dishes out tens of billions of dollars to states so they can head off deep cuts and layoffs. It provides financial incentives for people to start buying again, from first homes to new cars.
Source: Associated Press

[Editor's Note: Language included in the stimulus bill will now permit new car buyers to deduct sales/excise taxes from their yearly income tax bill for vehicles purchased before the end of 2009. Click here for the consumer auto incentive fact sheet.]

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GM, Chrysler Race to Finish Plan as Deadline Looms

General Motors Corp. and Chrysler LLC, racing to finish restructuring plans to present to the federal government, are unlikely to complete deals with debtholders and union workers by the government-imposed deadline [today]. Both automakers were making progress in concession talks with debtholders and the United Auto Workers Union, and negotiations between GM and the union ran all night into [this] morning... But final deals may not come until after the deadline passes, according to others who also were briefed on the situation. GM scheduled a news conference [today] for 6 p.m. to discuss its restructuring plans. The status of Chrysler talks was not known early [today]. GM already has received $9.4 billion in government loans and Chrysler $4 billion. GM will pick up the second installment of its loans, another $4 billion, [today], according to Treasury Department official, who spoke on condition of anonymity because he was not authorized to discuss the payments. The plans are supposed to outline how the automakers intend to again become viable and repay the government loans. Two people briefed on the GM plan reported progress Monday toward a deal with the United Auto Workers. But UAW Legislative Director Alan Reuther said Monday he does not expect labor agreements in time for [today's] deadline. One of the people briefed on GM's plan said some parts, such as bondholder and labor agreements, probably won't be complete by the time the plan is submitted to the Treasury Department late [today]. GM executives have said the company only has to show substantial progress by [today], with the whole plan finalized by March 31.
Source: Associated Press

[Editor's Note: Multiple sources are reporting that President Obama has dropped the idea of appointing a single, powerful “car czar” to oversee the revamping of General Motors and Chrysler and will instead keep the politically delicate task in the hands of his most senior economic advisers. Mr. Obama is designating the Treasury secretary, Timothy F. Geithner, and the chairman of the National Economic Council, Lawrence H. Summers, to oversee a presidential panel on the auto industry. The panel, called the Presidential Task Force on Autos, will draw officials from several agencies including the departments of Treasury, labor, transportation, commerce and energy, according to an administration official. Sources: The New York Times, The Washington Post and Associated Press.]

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Economy Strains Under Weight of Unsold Items

The unsold cars and trucks piling up at dealerships and assembly lines as consumers cut back and auto companies scramble for federal aid are just one sign of a major problem hurting the economy and only likely to get worse. The world is suddenly awash in almost everything: flat-panel televisions, bulldozers, Barbie dolls, strip malls, Burberry stores. Downsizing can be tricky, though. No one knows how much worse the economy will get, and while everyone waits for the recession to peter out, businesses are grappling with how to cut costs and survive without sabotaging their ability to grow when the economy picks up. Few industries have been as stung as severely by excess capacity as the U.S. auto industry, which produces millions more vehicles than it can sell. In 2008, there were enough automotive assembly plants in North America to churn out 18.3 million vehicles a year, according to the Center for Automotive Research. Analysts estimate that consumers this year will buy about 11 million. At current sales levels, it would take 116 days to sell all the cars and trucks clogging lots. Automakers are scheduled to submit plans today outlining how they hope to restructure their operations to deal with a smaller marketplace, while still developing the new fuel-efficient cars that may be key to their future. Auto suppliers are also trying to figure out how to survive in the face of massive excess capacity globally.
Source: The Washington Post

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Lutz: Despite Good Cars, Saturn Probably Dies

DETROIT — Bob Lutz says General Motors' struggling Saturn brand probably won't survive. "My personal favorite would be to see Saturn survive and prosper," GM's vice chairman told Automotive News. "But frankly, the reality is that that is probably not going to be the outcome." He added: "We spent a huge bundle of money in giving Saturn an absolutely no-excuses product lineup, top to bottom. They had a better and fresher lineup than any GM division, and the sales just never materialized. So we have to act on that. It's our duty." New Jersey Saturn dealer Stuart Lasser took Lutz's comments as confirmation of his worst fears. "That really seals our fate," said Lasser, owner of Saturn of Denville, Saturn of Mount Olive and Saturn of Livingston. "I think they knew this fact months ago, and they never shared it with us." GM has told Saturn dealers that it has allocated funds to build Saturn vehicles through 2012 and in some cases 2013. But it has not committed money to future products. Saturn's sales fell 21.7 percent to 188,004 in 2008.
Source: Automotive News

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County in New Mexico Halts Effort to Implement its Own Fuel Economy Rules

Auto dealers praise decision
WASHINGTON – The National Automobile Dealers Association (NADA) today commended the Albuquerque-Bernalillo County Air Quality Control Board in New Mexico for repealing a requirement that would have mandated fuel economy standards at the local level.

“The Albuquerque case illustrates how easily the ‘patchwork’ approach to fuel economy can get out of hand,” said John McEleney, NADA chairman and a multi-franchise dealer in Iowa. “If it weren’t for litigation filed by New Mexico dealers and NADA, the city of Albuquerque would still be pressing forward.”

Bernalillo County had attempted to impose a fuel economy rule that would have made the city of Albuquerque and surrounding Bernalillo County the only U.S. city/county to have  fuel economy  regulated at three levels—national, state and county. NADA filed suit last year to block the effort.

“What the county has done is meaningful; it shows that the Albuquerque-Bernalillo County Air Quality Control Board recognizes that the patchwork approach to fuel economy is the wrong way to go,” McEleney said. “The proposed rule would have forced automakers to meet fuel economy standards at the county level which would have created chaos in the marketplace. It would have added hardships for the entire auto industry, including dealers and consumers,” McEleney added. 

The auto industry supports a single, national fuel economy standard as the best approach to achieve the goals of reducing greenhouse gas emissions and promoting energy security without further crippling the auto industry.

“New Mexico legislators should delay implementation of CARB’s rule, and allow a national fuel economy standard—set by the Obama administration—to be given a chance to work and succeed,” McEleney said.

A comprehensive analysis released last month by NADA on the CARB rule that would allow individual states to regulate fuel economy standards found 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," said Andy Koblenz, NADA vice president of legal and regulatory affairs.

"Separate and apart from the stringency of standards set by the federal government or California, the establishment of 13 state-based fuel economy standards would cause irreparable harm to an already-struggling automobile industry," Koblenz added.
Source: NADA Newswire

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Chinese SUV Maker Denies Reports it May Buy Hummer

SHANGHAI -- Sichuan Automobile Industry Group, a small SUV maker in central China, denied a report Tuesday that it is in talks to buy GM's Hummer line, in the latest wave of speculation over potential global brand acquisitions by Chinese automakers. "Who made up that joke? Sorry, I've never heard of such a purchase plan," said an assistant to the general manager of Sichuan Auto Industry, who like many media-shy Chinese would only give his surname, Chen. "We have no energy to consider making bids for foreign companies, we're too busy running our own business," Chen said. He said the company planned to issue a statement later. A spokesman for General Motors Corp., Henry Wong, would not comment on the reports or name any potential bidders for the Hummer brand. "We do not comment on speculations in the press. What I can say is -- as part of the Hummer strategic review, meetings and discussions with potential investors are ongoing," he said. "We expect to make an announcement about the brand soon."
Source:  The Associated Press

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For Some Car Buyers, Worry Takes a Back Seat to Deals

Auto dealers around Greater Boston yesterday reported solid results for Presidents' Day holiday sales, a traditional make-or-break weekend for sellers, because of customers who decided the deals being offered outweighed worries about the future. "With the state of the economy, we thought it was a good time to buy," said Helen Mancuso of Canton, a teacher's aide. She and her husband, Jim, were filling out the paperwork on a new Caravan at Westminster Dodge in Dorchester yesterday. The deep discounts needed to get sales going will limit profits, a problem that will be exacerbated as consumers become accustomed to lower prices. That's bad news for manufacturers and dealers. Already, hundreds of dealers across the country have closed their doors, according to the National Automobile Dealers Association, while the costs of offering such low prices have hit hard the bottom lines of automakers. Ray Ciccolo, owner of the seven-dealership Village Automotive Group, estimated his Presidents' Day weekend sales were 10 percent higher this year, as compared with last year. But this year's sales included a higher proportion of used cars than a year ago, he said.
Source: The Boston Globe

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NADA Update
2010 Convention Workshop Proposals Now Being Accepted

Proposals are now being accepted for speakers who are interested in presenting a workshop at the 2010 NADA Convention & Exposition in Orlando, Fla., Feb. 13-16. Topics that are applicable to the current state of the U.S. automobile industry are strongly preferred. To download the proposal, go to www.nada.org/workshops. Completed proposals should be postmarked by midnight, April 30, 2009. For more information, contact NADA Management Education at (703) 821-7227 or workshops@nada.org.

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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, 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
 
"We have to ensure that the cars of tomorrow are built here by Americans, for Americans."

   
-- White House Press Secretary Robert Gibbs, The Washington Post, Feb. 17


"My personal favorite would be to see Saturn survive and prosper. But frankly, the reality is that that is probably not going to be the outcome."

   
-- Bob Lutz, GM's vice chairman told Automotive News, Feb. 16


"The Albuquerque case illustrates how easily the 'patchwork' approach to fuel economy can get out of hand. If it weren't for litigation filed by New Mexico dealers and NADA, the city of Albuquerque would still be pressing forward."

   
-- John McEleney, NADA chairman and a multi-franchise dealer in Iowa, referring to a county in New Mexico halting an effort to implement its own fuel economy rules, NADA Newswire, Feb. 17


"Who made up that joke? Sorry, I've never heard of such a purchase plan."

    -- An assistant to the general manager of Sichuan Automobile Industry Group, denying a report that the company is in talks to buy GM's Hummer line, Associated Press, Feb. 17
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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