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Wednesday, March 4, 2009 RSSSEND TO A FRIENDPRINT
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At a Glance...
Top Stories
As Markets Slump, U.S. Tries to Halt Cycle of Fear
Fed Launches Loan Program for Autos, More
No Bottom Seen for Auto Sales
Tough Test Emerges as Administration Aims to Bolster Automakers, Cut Pollution
Honda Joins Toyota for Government Loan Assistance
Auto Assistance is Near, Granholm Says
Wisconsin Car Dealership Hiring Despite Times
NADA Update
Stimulus Legislation Mandates Temporary COBRA Premium Relief
NADA Used Car Guide Launches All-New Appraisal Product
Union Legislation Addressed in New Virtual Seminar
Seminar Takes 'Deeper Dive' into FTC Red Flags Rule
Top Stories
As Markets Slump, U.S. Tries to Halt Cycle of Fear

Top Officials Push to Inspire Confidence in Crisis Response By Emphasizing the Long-Run
The Obama administration yesterday made a concerted push to boost confidence in downward-spiraling financial markets, assuring Americans that officials are taking the steps necessary to contain the worsening economic damage and to restore the nation's long-term fiscal health. A day after the markets hit crisis lows, the administration sought to restore calm. The Treasury Department and the Federal Reserve launched a long-awaited program to pump money into consumer lending. "What I'm looking at is not the day-to-day gyrations of the stock market," said President Obama, speaking to reporters at the White House, "but the long-term ability for the United States and the entire world economy to regain its footing." Obama urged Americans not to obsess over the stock market, which he likened to a political tracking poll. "You know, it bobs up and down day to day," the president said. "And if you spend all your time worrying about that, then you're probably going to get the long-term strategy wrong." A key aide, meanwhile, argued that government spending could have an unusually strong impact on the economy given the current weakness. At a time when Americans are strapped, they may be more likely to spend extra dollars received as government stimulus than they would in normal times, said Christina Romer, chairman of the Council of Economic Advisers.
Source: The Washington Post

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Fed Launches Loan Program for Autos, More

WASHINGTON – The government launched a much-awaited program [Tuesday] to spur lending for autos, education, credit cards and other consumer loans by providing up to $200 billion in financing to investors to buy up the debt. If the program succeeds, it should help bust through the credit clogs in place since last year and make it easier for Americans to finance large and small purchases at lower rates, Federal Reserve Chairman Ben Bernanke told Congress. That, in turn, would help revive the economy, he said. Created by the Fed and the Treasury Department, the program has the potential to generate up to $1 trillion of lending for businesses and households, the government said. It will be expanded to include commercial real estate, though that won't be part of the initial rollout. The program will start off by providing $200 billion in loans to investors with the goal of jump-starting lending to consumers and small businesses. The program, dubbed the Term Asset-Backed Securities Loan Facility, was first announced late last year and originally was scheduled to start in February. Participants — companies and investors that pledge eligible collateral to back the loan — must request the new government loans by March 17. The Fed will provide the three-year loans on March 25. Under the program, the Fed will buy securities backed by different types of debt, including credit card, auto, student and small business loans. The credit crunch — the worst since the 1930s — has made it much harder for people to obtain such financing, and those that do can be socked with high rates.
Source: The Associated Press

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No Bottom Seen for Auto Sales

All major carmakers hit as U.S. market falls 41%
A deepening recession and growing consumer anxiety sent U.S. automobile sales plummeting in February to levels one executive called "unsustainable." Overall industry sales plunged more than 41 percent, from nearly 1.8 million vehicles in February 2008 to 688,909 last month, putting more pressure on General Motors Corp. and Chrysler LLC as they scramble to convince the federal government they are worth saving. But the dramatic drop also exposed how much the U.S. economy has weakened, making the failure of one or both of the automakers all the riskier. GM's sales were down a staggering 53.1 percent year over year, leaving it with 18.3 percent of the U.S. market, compared to 22.9 percent a year ago, according to Autodata Corp. "It's unsettling to our business and, clearly, we hope we're seeing the trough and that we will see growth as the (Obama) stimulus package kicks in," said Mike DiGiovanni, GM's executive director of global market analysis. "If we don't see that, these are obviously unsustainable levels that are causing almost every major auto manufacturer to look for government aid." Ford Motor Co.'s sales dropped more than 48 percent, cutting its market share to 14.4 percent -- a loss of 1.9 points. Chrysler did slightly better than its crosstown rivals, with sales down 44 percent. But it put unprecedented incentives on many of its models, raising questions about how it could make money from those sales. Even Japan's automotive giants, which have fared better than their American competitors, were sent reeling in February. Toyota Motor Corp.'s sales were down nearly 40 percent, though its share of the U.S. market increased from 15.5 percent a year ago to 15.9 percent last month. Honda Motor Co. saw its sales fall 38 percent, but its market share increased from 9.8 percent to 10.4 percent. Nissan Motor Co.'s sales were off just over 37 percent, but its share of the market edged up to 7.9 percent from 7.3 percent.
Source: The Detroit News

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Tough Test Emerges as Administration Aims to Bolster Automakers, Cut Pollution

In the viability plans General Motors and Chrysler submitted to support their federal aid requests, the companies pledged to try to meet new fuel economy standards. GM said that within six years its cars would average 38.6 miles per gallon. Chrysler proposed 35.4 mpg. Yet whether those levels will be enough to meet new federal fuel efficiency standards is unknown because even as the Obama administration is trying to revive the American car industry, it is simultaneously drafting tougher fuel economy standards of the kind that many in the industry had said were bad for business. On Jan. 26, just days after the presidential inauguration, Obama ... ordered federal regulators to consider giving California and 13 other states the ability to regulate tailpipe emissions. The California regulations in essence could allow the states to regulate fuel economy, and environmentalists are pushing to make the tighter California proposal the law nationwide. Allowing the California waiver "imposes massive additional costs on an industry that's exceedingly weak," said Andrew Koblenz, vice president of legal regulatory affairs for the National Automobile Dealers Association. Whatever the effects of the California regulations might be, environmentalists and some in Congress have argued that forcing the companies to build more fuel-efficient cars will ultimately help the industry by preparing it for when oil prices rise once again.
Source: The Washington Post

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Honda Joins Toyota for Government Loan Assistance

TOKYO -- Honda Motor Co. said it is seeking a government loan to help shore up funds at its U.S. operations, becoming the latest Japanese auto maker to ask for Tokyo's help in doing business abroad. The development comes one day after the financial arm of Toyota Motor Corp., the world's largest auto maker by sales, said that it is in talks with Japan Bank for International Cooperation to line up financing. They are hoping that more lending in the U.S. will help the sagging sales there recover at a time when consumers in the world's biggest auto market are finding it hard to borrow for auto purchases due to tight credit conditions. The Japanese government will be offering $5 billion in loans via the semi-governmental JBIC to companies that need foreign funds, and it is taking other steps to help firms through the global credit crunch. JBIC declined to say whether it would extend loans to auto makers or which company it would likely lend to first.
Source: The Wall Street Journal

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Auto Assistance is Near, Granholm Says

Governor expects Obama to act quickly to aid industry
WASHINGTON -- Gov. Jennifer Granholm said Tuesday she expects President Barack Obama's task force on the auto industry to act "fairly soon" to rescue Detroit automakers and parts suppliers from imminent collapse. Granholm's meeting was one of several the task force has set for this week, along with representatives of auto dealers, bondholders of General Motors Corp. and Fiat SpA CEO Sergio Marchionne, who was invited by the panel to discuss Fiat's proposed alliance with Chrysler LLC. Granholm said she took the task force a list of 231 Michigan firms that have given layoff notices since November, almost all of them in manufacturing. "The industry itself has become liked a locked engine," Granholm said. "They can't get access to capital, nobody's buying cars, no one's placing orders for parts and the whole chain is freezing up."
Source: The Detroit Free Press

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Wisconsin Car Dealership Hiring Despite Times

A Milwaukee area car dealer says, believe it or not, people are buying his GM cars. He held the second of a two-day job fair Wednesday to try to find dozens of new salesmen and auto techs to staff his dealership.
Source: National Public Radio

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NADA Update
Stimulus Legislation Mandates Temporary COBRA Premium Relief

The American Recovery and Reinvestment Act of 2009 (ARRA) provides temporary, taxpayer-funded, premium relief for people otherwise eligible to elect to continue an employer's health plan coverage under the Consolidated Budget Reconciliation Act of 1985—known as COBRA. As of Feb. 17, 2009, the ARRA creates a temporary program of premium relief for Assistance Eligible Individuals (AEIs). AEIs are those who become COBRA eligible between Sept. 1, 2008 and Dec. 31, 2009. AEIs who elect continuation coverage may receive a 65 percent plan continuation premium discount. In other words, where employers normally require such individuals to pay 100 percent of COBRA plan premiums, AEIs may only be required to pay 35 percent under this temporary program. The Department of Labor (DOL) will issue a new model notice form by March 19, 2009. NADA suggests that dealers use that form to issue the new required notice to AEIs. For more information and details on what to do, click here.

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NADA Used Car Guide Launches All-New Appraisal Product

NADA AppraisalPRO, a groundbreaking used-vehicle appraisal product from NADA Used Car Guide, is now available for use by NADA members. It provides dealers with the most complete view of their used-car market ever available in a single, affordable online tool. NADA AppraisalPRO incorporates the latest information and data from six industry leaders: NADA Used Car Guide (Guide values); AutoTrader.com (retail asking prices); J.D. Power and Associates/Power Information Network (retail sales transactions); Manheim Market Report (auction sales transactions); vAuto (used-vehicle market days supply); and Experian – AutoCheck (vehicle history reports).

NADA has tapped the expertise of auto auction veteran James F. Dodd to present this new product to dealers at auctions, NADA 20 Group meetings, conferences and other industry events across the country. Dodd has helped develop electronic delivery systems of real-time auction data to dealers during his 10 years at Southern Auto Auction and is well-positioned to recognize and explain the value of NADA AppraisalPRO to auto retailers.

NADA AppraisalPRO is available exclusively to dealer members of NADA and the National Independent Automobile Dealers Association at an affordable annual subscription rate of $150 per month for unlimited lookups per site. It can be billed annually or monthly. The product doesn’t require software, system integration or long-term commitments. For more information, visit www.nada.com/appraisal and place orders by calling (866) 974-6232.

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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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Featured Video
 
 

 NADA Tackles Industry Crisis


More Video Highlights

Quotable
 
"What I'm looking at is not the day-to-day gyrations of the stock market, but the long-term ability for the United States and the entire world economy to regain its footing."

    -- President Obama, speaking to reporters at the White House, The Washington Post, March 4


"The economy isn't doing these companies any favors. Even as healthy a company as Toyota is looking for help. I don't know that we can judge GM and Chrysler too harshly." 

   
-- Analyst Rebecca Lindland of IHS Global Insight, who says the fact that all of the major automakers posted poor results in February could actually help GM and Chrysler, which must show they can be viable by March 31 under the terms of their federal loans, The Detroit News, March 4


"Our analysis suggests that allowing California and other states to regulate CO2 emissions, and thus fuel economy, will further damage companies that are struggling, like GM, Ford and Chrysler and much of their supply base, and potentially destabilize relatively healthy companies like Toyota and Nissan."

   
-- Eric Fedewa, vice president at CSM Worldwide, which provides forecasting services to automakers and suppliers, The Washington Post, March 4


"[Allowing the California waiver] imposes massive additional costs on an industry that's exceedingly weak."

    -- Andrew Koblenz, vice president of legal and regulatory affairs for NADA, The Washington Post, March 4
Member Products & Services
 
 
Lenovo Madness Sale
Lenovo is offering NADA members up to 35 percent off select notebooks. Great savings are available on all ThinkPad and IdeaPad notebooks, along with all computing accessories. Free shipping is available on all Web orders. This offer is good March 2-9. To take advantage of these savings, visit NADA's PC Purchase Program online (login required), click "Lenovo," then "Special Offers" and enter eCoupon USXTHINKMADNESS at checkout 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 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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NADA For more information on NADA, visit www.nada.org or contact NADA, 8400 Westpark Drive, McLean, VA 22102. This email may contain an advertisement of NADA products and services. Any opinions or statements contained herein do not necessarily reflect the views of NADA. Factual errors are the responsibility of the listed publication. If you are a franchised new-car or -truck dealer and would like to become a member of NADA, please visit the Join NADA section of www.nada.org. Questions or comments concerning NADA Headlines content may be directed to media@nada.org.