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At a Glance...
Top Stories
GM Seeks $16.6 Billion More in U.S. Aid
Granholm, Dingell, Others React to Auto Plans
Dealers: Saturn's Demise 'A Real Travesty,' But No Surprise
Automakers Dismiss Bankruptcy as Obama Aide Won't Rule It Out
Big 3, UAW Reach Pact on Givebacks
Sweden Rules Out Ownership of Saab; Says 'Disappointed' With GM
NADA Update
Union Legislation Addressed in New Virtual Seminar
Seminar Takes 'Deeper Dive' into FTC Red Flags Rule
2010 Convention Workshop Proposals Now Being Accepted
Top Stories
GM Seeks $16.6 Billion More in U.S. Aid

Saturn, Hummer Could Be History by 2011 as GM Plans to Slash 47,000 Jobs; Chrysler Mentions Bankruptcy Option for First Time
General Motors Corp. and Chrysler LLC told the federal government they may need up to $21.6 billion more combined in bailout loans to put them on the road to recovery, and outlined extensive bankruptcy contingency plans even while continuing to lobby against the option. GM said it might need as much as $100 billion in financing from the government if it were to go through the traditional bankruptcy process. Rick Wagoner, GM's chairman and chief executive, said the bankruptcy scenarios are "risky" and "costly" and would only be pursued as a last resort. Chrysler's plan said the company would likely have to file for Chapter 11 protection if it doesn't get additional loans from the government and concessions from unions, creditors and dealers. It said it would need $24 billion in financing if the company were to file for bankruptcy. GM said it now plans to phase out its Hummer brand this year and Saturn in 2011 if no alternatives arise. Earlier, it said it was trying to sell Hummer and was re-evaluating the future of Saturn. The company also is scaling back Pontiac and trying to sell Saab, its Swedish brand. GM also said it will shut five more factories on top of the closures it had already planned. In addition, it plans to eliminate thousands of dealerships and slash 47,000 jobs this year around the world, leaving it with a work force of about 200,000.
Source: The Wall Street Journal

[Editor's Note: The following statements are from John McEleney, NADA chairman, in response to Chrysler's and General Motors' restructuring plans announced Tuesday:

NADA Statement - Chrysler 
"We are encouraged by Chrysler’s restructuring plan. It’s comprehensive and realistic and viable. The plan utilizes very conservative assumptions about auto sales over the next few years. What’s most important, however, is that Chrysler recognizes that availability of credit for automotive consumers and dealers is the single most important element of Chrysler’s viability. We look forward to working with Chrysler and the government to free up credit, both at the wholesale and retail level."

NADA Statement - GM
"General Motors has submitted a strong plan. It’s comprehensive and aggressive and achievable. We are, of course, exceedingly disappointed that a viable solution has not yet been found for Saturn, Saab and Hummer. When considering the future viability of these brands, GM should continue to aggressively pursue all options. We are pleased that GM recognizes the ‘great dealer network’ that supports these brands. Should it become necessary to phase out these brands, it is imperative that GM treat the affected dealers fairly and that they be properly compensated. It is equally important to take care of the Saturn, Saab and Hummer owners. On the positive front, we are encouraged that GM recognizes that the availability of credit for automotive consumers and dealers is central to GM’s survival. We look forward to working with GM and the government to free up credit, both at the wholesale and retail level."]

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Granholm, Dingell, Others React to Auto Plans

Reacting to General Motors Corp.'s and Chrysler’s restructuring plans, Gov. Jennifer Granholm said they indicate “tremendous progress” but that much more work is needed. Rep. John Dingell issued a statement ... saying that while “The cost of action will be high … the cost of inaction will be much higher.” “Both GM and Chrysler’s plans demonstrated a clear path to viability; however the companies need government loans to get to viability just as our financial institutions are receiving taxpayer assistance to get back on their feet.” The chairman of the National Automobile Dealers Association, John McEleney, also responded to the Chrysler restructuring plan. "We are encouraged by Chrysler's restructuring plan. It's comprehensive and realistic and viable. The plan utilizes very conservative assumptions about auto sales over the next few years. What's most important, however, is that Chrysler recognizes that availability of credit for automotive consumers and dealers is the single most important element of Chrysler's viability. We look forward to working with Chrysler and the government to free up credit, both at the wholesale and retail level."
Source: The Detroit Free Press

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Dealers: Saturn's Demise 'A Real Travesty,' But No Surprise

Saturn dealers expressed frustration, anger and sadness -- but not surprise -- after General Motors Corp. said Tuesday that the 23-year-old brand would likely fade away after 2011. "I think most people were hoping that it was not going to be so," said Gregory Jackson, owner of Prestige Automotive Group, which includes three Saturn dealerships in Jacksonville, Fla. "It's a real travesty ... why Saturn has not been able to capture momentum from a sales standpoint, only God knows. But as a dealer, I am quite saddened." GM said Tuesday it remains open to the possibility of Saturn dealers or investors acquiring the brand. But if that doesn't happen, Saturn will be phased out. It also plans to accelerate its efforts to consolidate its dealers by 25% over the next four years from 6,246 to 4,700 and said it needs another $16.6 billion in federal aid.
Source: The Detroit Free Press

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Automakers Dismiss Bankruptcy as Obama Aide Won't Rule It Out

[General Motors Corp. and Chrysler LLC] in their most detailed exploration of bankruptcy, said it could cost taxpayers as much as $110 billion to finance the companies’ Chapter 11 restructurings. Bankruptcy “would create unbearable stress not only for our suppliers, but also the suppliers of other automakers,” Chrysler Chief Executive Bob Nardelli said in a conference call with reporters. “It would have a cataclysmic effect on the entire auto industry.” President Barack Obama’s chief spokesman refused to rule out the possibility of the automakers restructuring through bankruptcy. “I wouldn’t preclude policy choices, particularly since we haven’t seen details,” Robert Gibbs told reporters before the plans had been submitted. The auto companies “represent a huge part of our manufacturing base, and to have a strong and viable auto industry is tremendously important for the future.” GM estimated the government would have to contribute $36 billion to $86 billion to finance its bankruptcy, compared with the $22.5 billion to $30 billion in federal aid it’s seeking to restructure outside of Chapter 11. Chrysler said it would need $25 billion in bankruptcy financing, more than twice what it’s seeking from the government in low-cost loans.
Source: Bloomberg

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Big 3, UAW Reach Pact on Givebacks

The United Auto Workers has reached tentative agreements with Detroit's Big Three automakers on cost-cutting concessions to their 2007 national labor pacts, but talks continue over changes to retiree health care funding. Neither the automakers nor the union would discuss details of the agreements on Tuesday, but people familiar with the discussions at General Motors Corp. and Ford Motor Co. say the deals do not include wage cuts. The sources also said there are no significant differences in the tentative pacts with the three automakers. "The changes will help these companies face the extraordinarily difficult economic climate in which they operate," UAW President Ron Gettelfinger said in a statement. "Discussions are continuing regarding the (VEBAs) at all three companies." He said terms of the tentative pacts would be withheld until the VEBA talks were finished and the agreements ratified by workers.
Source: The Detroit News

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Sweden Rules Out Ownership of Saab; Says 'Disappointed' With GM

Swedish Industry Minister Maud Olofsson reiterated the government would not take ownership in General Motors Corp.’s Swedish Saab Automobile unit and called GM’s behavior “irresponsible.” “I am disappointed with GM for taking their hands off Saab and then handing it over to the Swedish taxpayers, which I think is irresponsible,” Olofsson told Swedish Radio today. “They have had a number of years to turn this around and take responsibility for their bad finances -- they haven’t done that and I think that is irresponsible of such a large company.” GM today renewed calls for Swedish state aid for Saab, saying the unit may have to be restructured under Swedish bankruptcy laws as early as this month if the state doesn’t step in. GM is asking Sweden to guarantee $600 million in European Investment Bank loans to keep Saab operating until it can be restructured for sale, a person close to the talks said Feb. 11.
Source: Bloomberg

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NADA Update
Union Legislation Addressed in New Virtual Seminar

The so-called Employee Free Choice Act (EFCA) could become law in 2009 and usher in the most dramatic pro-union shift in federal labor law in U.S. history. The EFCA would eliminate the secret ballot in union representation elections, escalating labor union membership, returning traditional labor issues to the forefront—and forcing dealerships to bargain with unions.

To help dealerships understand the issues and meet the challenges they present, NADA has asked D. Gerald Coker, a partner in the law firm Ford & Harrison LLP, to conduct a virtual seminar on March 12 from 1 to 2:30 p.m. EST. In “Responding to Organized Labor: Defending Workplace Democracy,” Coker will discuss the current and proposed federal labor legislation, analyze how the EFCA would affect union organizing strategies at dealerships and present a 10-Point Strategic Action Plan for dealerships to reduce potential vulnerability and improve employee relations. Participants’ questions will be addressed during the final 15 minutes of the seminar.

The fee for this important virtual seminar is $199 per computer connection. To register, visit www.nada.org/seminars or call (800) 252-6232, ext. 2.

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Seminar Takes 'Deeper Dive' into FTC Red Flags Rule

Attorneys from the FTC’s Division of Privacy and Identity Protection—which drafted and enforces the Red Flags Rule—will present a virtual seminar “A Deeper Dive into the FTC Red Flags Rule” on March 26 from 1 to 3 p.m. EST.

With the revised May 1 enforcement date approaching, dealers should ensure that their required Identity Theft Prevention Programs incorporate all of their covered accounts, include all relevant Red Flags, contain effective response and detection procedures, address all the Rule’s other requirements, and are tailored to their particular operations. It's a daunting task in view of the Rule’s general provisions that encompass all types of financial institutions and creditors.

To assist dealers in understanding how the Rule applies to dealership operations, FTC attorneys will join NADA Regulatory Affairs Director Paul Metrey to recap the required elements of the Red Flags and Address Discrepancy Rules and examine implementation considerations for dealers—and then, we’ll open the phone lines so dealers can present their questions directly to the FTC attorneys. Dealers should consider attending the “Deeper Dive” seminar even if they attended one of the previous Red Flags Rule virtual seminars. If you still have any questions, now is the time to ask. We’ll have a great team to answer your questions. And be sure to bring your copy of NADA's A Dealer Guide to the FTC Red Flags and Address Discrepancy Rules.

The fee for this important virtual seminar is $199 per computer connection. To register, visit www.nada.org/seminars or call (800) 252-6232, ext. 2.

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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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Featured Video
 
 

 NADA Tackles Industry Crisis


More Video Highlights

Quotable
 
"What's most important ... is that GM and Chrysler recognize that availability of credit for automotive consumers and dealers is central to their viability. We look forward to working with GM and Chrysler and the government to free up credit, both at the wholesale and retail level."

   
-- NADA Chairman John McEleney, responding to GM's and Chrysler's restructuring plans, NADA Newswire, Feb. 18


"It's a non-starter. The car company is not like the airline industry."

   
-- Senator Carl Levin, a Michigan Democrat, referring to a bankruptcy by either automaker, Bloomberg, Feb. 18


"It's a real travesty ... but as a dealer, I am quite saddened."

   
-- Gregory Jackson, owner of Prestige Automotive Group, which includes three Saturn dealerships in Jacksonville, Fla., responding to GM's announcement Tuesday that the 23-year-old brand would likely fade away after 2011, The Detroit Free Press, Feb. 18
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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