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At a Glance...
Top Stories
Plunging Auto Sales Could Hit Low Point in February or March
GM's Wagoner, Auto Task Force Meet in 'Beginning' Session
Obama Seeks $1 Trillion Tax Increase in Budget Plan
Autos Help, Carbon Limits Tied
In Auto Talks, No Cure-All for Health Care Costs
Ford Cuts Production Estimates
Nissan to Skip Major Auto Shows to Save Cash
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
Plunging Auto Sales Could Hit Low Point in February or March

Auto sales continue to collapse this month, but less sharply than forecasters said only a week ago, suggesting to some that the end of the market decline is in sight. "We believe we are nearing the bottom," says Jeff Schuster, chief of global forecasting at J.D. Power and Associates. "Our expectation is for February or March to be the low point." Nevertheless, Power cut its forecast for the full year's sales to 10.4 million from 11.4 million and pointed out that it previously thought December had been the market's bottom. Automakers report February sales Tuesday. Whether the analysts and forecasters are optimists or pessimists, they expect February's sales pace to equate to an annual rate of 9.1 million to 9.3 million. That's up from Power's sub-9 million February forecast a week ago, but less than January's actual pace of 9.6 million, as reported by sales tracker Autodata. Last year, automakers sold 13.2 million new cars and trucks in the U.S. — considered disastrously low. Most forecasts now are for about 10.5 million sales for 2009.
Source: USA Today

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GM's Wagoner, Auto Task Force Meet in 'Beginning' Session

WASHINGTON -- Top General Motors executives met for nearly six hours [Thursday] with the Obama administration's auto industry task force. GM CEO Rick Wagoner was joined at the meeting at the Treasury Department by COO Fritz Henderson and CFO Ray Young, GM said. A GM statement called the meeting "just the beginning of the hard work ahead for GM and the president's team." "We found a genuine willingness among the task force to understand our business, industry challenges and GM's restructuring plan," the statement said. "We look forward to working closely with the task force as we continue our efforts to transform GM." Chrysler LLC CEO Bob Nardelli and other company officials met with the administration task force on Wednesday. Ford's purchasing chief also met with the government on supplier issues this week.
Source: Reuters

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Obama Seeks $1 Trillion Tax Increase in Budget Plan

President Barack Obama proposed almost $1 trillion in higher taxes over the next decade on the highest-earning Americans, Wall Street financiers, U.S.-based multinational corporations and oil companies to pay for permanent tax breaks for lower earners. Obama’s 2010 budget proposal, released [Thursday], would reinstate the top two Clinton-era tax rates of 36 percent and 39.6 percent, up from the 33 percent and 35 percent the richest Americans now pay. The budget also would raise taxes on capital gains and dividends to 20 percent for top earners, up from the 15 percent set by former President George W. Bush in 2003. Obama also proposes to stop the scheduled repeal of the estate tax next year and to impose a 45 percent tax rate on a married couple’s estate valued at more than $7 million. Obama’s budget would end a tax-accounting technique called “last-in, first out,” or LIFO, that primarily benefited oil and gas companies when oil topped $100 a barrel but is widely used across industries. In addition to oil companies, the repeal of LIFO would hit retailers, automakers and makers of non-automotive heavy equipment, textile makers, consumer products, drug companies, alcohol and tobacco manufacturers and wholesalers when times are good, according to tax experts. The accounting method has been commonly used since the 1930s and is viewed as the most accurate measure of income for financial statement purposes, according to the congressional Joint Committee on Taxation, a nonpartisan panel.
Source: Bloomberg

[Editor's Note: Although the President's budget has raised the visibility of LIFO as a possible "revenue raiser," the budgetary process is just beginning and still needs to go through the legislative process. It is important to note that Congress will not actually vote on the President's recently introduced version of the budget. The House and Senate budget committees begin work on their own budget resolutions and will then pass budget-resolution legislation that serves as a framework for subsequent spending and tax legislation. NADA is working to preserve LIFO and encourages dealers to contact their representatives and senators to oppose LIFO as a potential "revenue raiser" in any tax bill.]

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Autos Help, Carbon Limits Tied

Obama budget pays for more efficient U.S. car fleet using emissions 'cap and trade' program.
WASHINGTON -- The 2010 budget that President Obama outlined Thursday promises a 10-year, $150 billion effort that could help domestic carmakers produce fuel-efficient cars. But the money is tied to a plan to limit carbon emissions that opponents say could cripple the industry. The money will help "build more efficient cars and trucks right here in America," Obama said Thursday. While many details are yet to be determined, the plan raises the possibility that the industry's supporters may have to accept more short-term pain if they want the promise of long-term assistance. Cap and trade would "devastate jobs in manufacturing states like Michigan," said Rep. Mike Rogers, R-Brighton, [Mich.] House GOP leader John Boehner of Ohio said it would "increase taxes on all Americans who drive a car, who have a job, who turn on a light switch, pure and simple." Sens. [Carl Levin, D-Detroit,] and Debbie Stabenow, D-Lansing, opposed a cap and trade proposal last year by Sens. Joe Lieberman and John Warner, and they're among a group of 10 or so Senate Democrats who will likely require significant concessions to the auto industry and other interests before they would vote for such a bill.
Source: The Detroit News

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In Auto Talks, No Cure-All for Health Care Costs

Promised Benefits Weighed Against Survival of Industry
As General Motors, Chrysler, the autoworkers union and the Obama administration enter negotiations and plot the future of the U.S. auto industry, one of the most delicate issues they face is what to do about the health benefits of an estimated 800,000 retirees. GM's announcement yesterday that it lost $30.9 billion in 2008 made the issue more urgent. Although the union and Detroit's three automakers recently settled on a new wage agreement, they still must resolve the question of how to cut or rearrange their $30 billion in obligations to retiree health. To retain $17.4 billion in emergency federal loans, the companies are seeking to win union concessions on benefits and complete viability plans before a March 31 deadline. Based on life expectancies and expected medical costs of its current and future retirees, GM and the union figure the company still owes about $20 billion into its retiree health fund; Chrysler owes about $10 billion. Put another way, the Center for Automotive Research once estimated that GM's liabilities to retiree health care amounted to more than 40 percent of its sales in 2007.
Source: The Washington Post

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Ford Cuts Production Estimates

Ford Motor Co. cut its first-quarter production estimates and lowered its annual sales forecast on Thursday in another sign that the auto maker could be approaching the need for government loans. In a Securities and Exchange Commission filing, Ford lowered the bottom end of its annual industry forecast for 2009 to 10.5 million cars and trucks sold in the U.S., down by 1 million from what many in the industry had considered an optimistic outlook. In a business plan submitted to Congress last fall, its "worse rates" scenario was based on a 10.5 million figure, which at the time Ford said could help trigger the need for up to $13 billion in additional funding for the company. Ford maintains they have no current plans to request government loans, saying that cost-cutting measures, asset sales and other savings will improve their bottom line. Ford says its current funding will sustain the company even if annual sales this year dip as low as 9.2 million cars and trucks.
Source: The Wall Street Journal

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Nissan to Skip Major Auto Shows to Save Cash

TOKYO -- Nissan said today it would skip some major international auto shows in its new business year starting on April 1 to save cash as global car sales plummet. Nissan's decision means it will be absent from the Detroit auto show next January, as well as the IAA in Frankfurt in September. Last month, Nissan, Suzuki and Mitsubishi skipped the Detroit auto show. Nissan said it had selected the New York, Shanghai, Tokyo and Geneva shows during the 12-month period to March 31, 2010 as the four major events to showcase its cars.
Source: Reuters

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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
 
"We believe we are nearing the bottom. Our expectation is for February or March to be the low point."

   
-- Jeff Schuster, chief of global forecasting at J.D. Power and Associates, suggesting to some that the end of the market decline for auto sales is in sight, USA TODAY, Feb. 27


"We found a genuine willingness among the task force to understand our business, industry challenges and GM's restructuring plan."

    -- General Motors said in a statement Thursday that was released after top executives, including CEO Rick Wagoner, met with the Obama administration's autos task force for several hours, Reuters, Feb. 26


"It reminds me of the time at the dawn of the auto age when you had hundreds of companies making hundreds of kinds of cars and then they all coalesced. We are back in that era of invention again."

    -- Lachlan W. Seward, director of the $25 Billion Advanced Technology Vehicles Manufacturing Loan program, a rare source of financing to develop electric-vehicle technology that has remained untouched since it was established in 2007, The New York Times, Feb. 26
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.



NADA Used Car Guide Unveils Used-Vehicle Appraisal Product for Dealers
NADA Used Car Guide is introducing a unique and affordable new appraisal product called NADA AppraisalPRO, which provides a complete picture of the used-vehicle market in one location. The online tool provides dealers with the flexibility to define the market area and customize each appraisal by making adjustments to determine the best number for each and every trade-in. NADA AppraisalPRO will be available beginning March 2 at a low introductory monthly subscription rate of $150 for unlimited lookups per location. For more information, visit www.nada.com/appraisal. To place an order, call (866) 974-6232.

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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