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At a Glance...
Top Stories
U.S. Economy Seen Starting Recovery in Second Half of '09: Poll
Dealers Lobby Statehouses for Beefier Franchise Laws
Chrysler Takes Steps in Quality
Saturn to Dealers: Give Us Another 60 Days
Honda Names New President
Larry H. Miller, Jazz Owner and Auto Magnate, Dies at 64
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
U.S. Economy Seen Starting Recovery in Second Half of '09: Poll

WASHINGTON – The U.S. economy is set to contract sharply in the first quarter, with the current cyclical downturn on track to rival the 1973-75 slump as soaring unemployment depresses demand, a survey showed. However, a survey of 47 professional forecasters released by the National Association of Business Economists on Monday predicted the recession-hit economy would begin to recover in the second half of this year, returning to a potential growth trend in 2010. The recovery was seen driven by the Obama administration's $787 billion economic stimulus plan, the group said. The survey, conducted between January 29 and February 12, forecast real gross domestic product would shrink by an annualized rate of 5.0 percent in the first quarter, moderating to a 1.7 percent contraction in the second quarter. The economy was expected to expand by 1.0 percent in the third quarter, with growth quickening to 2.1 percent in the final three months of the year, the poll respondents said. The survey forecast the unemployment rate peaking at 9.0 percent in the fourth quarter, before edging lower from the second quarter of 2010. The U.S. jobless rate is currently at 7.6 percent, a 16-year high.
Source: Reuters

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Dealers Lobby Statehouses for Beefier Franchise Laws

As General Motors dumps brands and other automakers slash their retail networks, auto dealers are waging a nationwide lobbying blitz for more protection under state franchise laws. In eight states, including Virginia and Indiana, dealers have a strong chance to get legislation that would give them more compensation if an automaker kills a brand. The measures would apply to all automakers. But they would especially affect General Motors, which says it plans to eliminate Saturn after 2011, to sell or phase out Saab and Hummer and to shrink Pontiac. NADA backs the state measures but is leaving the lobbying to state dealer associations. Jim Moors, franchise attorney for NADA, says laws in nearly 40 states require financial help for dealers when an automaker kills a brand. Such aid typically includes payments for property rent and factory repurchases of vehicle and parts inventories, he says. "Those protections are based on the economic risk that the dealers take by making these big investments," Moors says. Laws in about half the states allow a dealer to recover other damages if a franchise is canceled, Moors says. Several of those laws require the automaker to pay the fair market value of the dealership, he adds.
Source: Automotive News

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Chrysler Takes Steps in Quality

Executive works on team approach to get everyone on same page; results are encouraging.
The first thing Doug Betts did when he arrived at Chrysler LLC in October 2007 to oversee quality was define the term so everyone would be on the same page to fix problems. Betts noted similarities to problems he encountered as a troubleshooter at Nissan Motor Co. following poor product launches in 2003. Months of brainstorming at Nissan became Chrysler's gain, as Betts said he knew within days of arriving what needed to be done at Chrysler. "The people at Chrysler were very open to trying something different," said Betts, an engineer who spent a decade at Toyota Motor Corp. before Nissan. There are signs Betts' changes are working. Chrysler recalled the fewest vehicles among the six major automakers last year, 361,065, according to the National Highway Traffic Safety Administration. Chrysler's recall performance last year marked an improvement over 2007, when the automaker recalled 576,418 vehicles, more than GM and just shy of Toyota's tally.
Source: The Detroit News

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Saturn to Dealers: Give Us Another 60 Days

GM is considering a sale of the operation to dealers or investors, who would have to line up products from other manufacturers — or perhaps from GM in the role of a supplier — after GM's commitment to build Saturn products ends after the 2012 model year. General Motors has asked dealers not to dual or close for 60 days while a task force determines whether a spinoff is possible. Dealers are looking at options, and some are considering legal action. Others, like Burke O'Malley, want to hang on. "It's a hard challenge right now," says O'Malley, owner of three Saturn stores in northern Virginia. "I'm gonna pray. I'm gonna keep praying. I'm gonna do the best that I can, but there's so much out of my control at this point." Saturn has 403 stores nationwide. Over the next 60 days, a task force of Saturn dealers, GM executives and outside consultants will seek to spin off Saturn Distribution Corp., the entity that holds the franchise agreement with dealers, says Saturn spokesman Steve Janisse. Saturn dealerships are stand-alone stores. Dealers say GM has told them that dualing could make a spinoff or sale less desirable to potential suitors. "They want to keep Saturn as pure as possible while they study a spinoff," says John Pitre, general manager of Saturn of Bakersfield in California. He holds out hope that Saturn has more options than a slow demise.
Source: Automotive News

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Honda Names New President

TOKYO — Honda named Takanobu Ito, an expert in auto development with experience in the U.S., as its new president Monday, in an apparent effort to aim for a turnaround under fresh, younger leadership. Ito, 55, senior managing director overseeing auto operations, replaces Takeo Fukui, who is stepping down as president, Japan's No. 2 automaker said in a statement. The change at Honda, part of a minor reshuffling of its board, still needs shareholders' approval at a meeting in June. Through Ito's appointment, Honda appears to be sending a message of its determination to turn a new leaf and press ahead with technological innovations — its longtime strength — in battling the global slump and aim for a turnaround. Ito had already been scheduled to head the research and development unit of Honda in April. With the latest decision, if approved, he will also head overall Honda. Fukui will become an adviser and remain on the board.
Source: The Associated Press

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Larry H. Miller, Jazz Owner and Auto Magnate, Dies at 64

He built an empire as a skilled businessman, generous philanthropist
He parlayed a handful of successful automobile dealerships into a business and sporting empire, and he built the Utah Jazz into one of the NBA's most successful franchises. Friends and colleagues Friday remembered Larry H. Miller as a skilled entrepreneur and a community visionary whose business acumen and philanthropy changed Utah. "Every citizen in our state feels a little empty today. Larry was Utah and Utah was Larry," Gov. Jon Huntsman Jr. said. "He inspired many and served countless. We all have been made better by his extraordinary life." Miller died Friday at age 64 of complications related to diabetes. Throughout the late 1960s, Miller earned a reputation as one of Utah's top pitchers. In 1970, he took his growing family to Denver, where he became the parts manager at Stevinson Toyota and played in higher-caliber fastpitch leagues against some of the country's best players. In 1979, Miller bought Universal Toyota in Murray. He spent his personal savings, borrowed $200,000 and agreed to monthly payments of $17,000 for 10 years to complete the purchase. "If I'd stopped to think about it, it would have scared me and I probably would not have done it," Miller told The Tribune. Not to worry. Within five years, Miller owned six dealerships. By 1990, he owned 16 in Utah, Colorado, New Mexico and Arizona, with gross sales of $310 million.
Source: The Salt Lake Tribune

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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


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Quotable
 
"Larry was not only one of the finest auto dealers in the country, he was also one of the finest humanitarians anywhere. In fact, it would be hard to find a finer human being. When it comes to helping others, Larry set the standard. He contributed millions of dollars to charitable causes but never sought publicity. He was an inspiration to us all."

   -- NADA Chairman John McEleney, on Utah Jazz owner and auto dealer Larry H. Miller, who died Friday at age 64 of complications related to diabetes, The Associated Press, Feb. 21

"At a time when car sales are reeling, it's a difficult thing to swallow. We're really concerned about what this will do to dealers."

   -- Peter Welch, president of the California New Car Dealers Association, which opposes a  sales tax increase included in California's new budget signed by Gov. Arnold Schwarzenegger on Friday, Los Angeles Times, Feb. 21

"I'm gonna pray. I'm gonna keep praying. I'm gonna do the best that I can, but there's so much out of my control at this point."

   -- Burke O'Malley, owner of three Saturn stories in northern Virginia, responding to questions about a possible Saturn spin off, Automotive News, Feb. 23

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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