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Thursday, March 5, 2009 RSSSEND TO A FRIENDPRINT
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Top Stories
Auto Dealers Would Face Brunt of Burden Under California Fuel Economy Rules
U.S. Weighs Car-Emissions Policy
State C02 Rules Would Worsen Auto Sales, Consultant Says
Car Buyers Gain Under Fed Program as Dealers Press for More Aid
Auditors Raise Doubts about G.M.'s Viability
German Auto Sales Leap With Payment for Scrapping Old Cars
American Dream Evaporating for Auto Dealer in Pa.
NADA Update
NADA Online Services Temporarily Unavailable This Weekend
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
Auto Dealers Would Face Brunt of Burden Under California Fuel Economy Rules

NADA chairman says a single, national fuel economy standard is a more effective way to cut greenhouse gas emissions
WASHINGTON — The chairman of the National Automobile Dealers Association, John McEleney, told the Environmental Protection Agency today that complying with state-based fuel economy regulations would cause additional hardship on the nation’s declining number of new-car dealers with little environmental benefit. McEleney’s comments came in testimony at a public hearing held by the EPA as it reconsiders the request of the California Air Resources Board (CARB) and more than a dozen states to establish their own fuel economy and greenhouse gas programs. McEleney, a multi-franchise dealer in Iowa, described the California approach as “inherently flawed.” “Implementing a patchwork of state fuel economy regulations would ultimately pass much of the burden of compliance onto the dealers,” McEleney said. He predicted that the California approach would force automakers to ration certain popular large models, which would ultimately lead manufacturers to pressure dealers to accept vehicles that their customers may not want to buy. California bases compliance on what vehicles are delivered to a dealership and not what consumers actually demand or ultimately purchase.
Source: NADA Newswire

[Editor's Note: To read McEleney's full testimony, click here.]

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U.S. Weighs Car-Emissions Policy

Obama juggles desires of California, auto makers in exploring national rule
The Obama administration is working to develop a single national standard to curb greenhouse-gas emissions from automobiles, a sign of the complexity it faces reconciling its environmental policy with its efforts to bail out Detroit auto makers. A White House spokesman said President Barack Obama "believes that one national policy for autos would provide the industry with certainty while achieving our environmental and energy independence goals, and it is a topic the administration is exploring as part of the broader restructuring discussions with the auto makers. "Administration officials are working on interrelated policies that affect the struggling auto industry. The Department of Transportation is working on new, more rigorous vehicle fuel economy standards for the 2011 model year. The Environmental Protection Agency is considering broad restrictions on global warming emissions. At the same time, the administration is considering whether to grant California a waiver from the Clean Air Act so the state can enforce its own tailpipe emissions standards, potentially stricter than federal rules. It's not clear how the administration will establish a standard that reconciles the interests of California regulators and auto makers, which have been battling over the issue for years.
Source: The Wall Street Journal

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State C02 Rules Would Worsen Auto Sales, Consultant Says

WASHINGTON -- State-by-state regulation of greenhouse gases from vehicles would make tough economic times even worse for struggling automakers and suppliers, a major consulting firm warns. The comments appear in testimony to the EPA by Eric Fedewa, vice president of global powertrain forecasts for CSM Worldwide. The EPA has scheduled a public hearing [today] on California's request for a waiver from the federal Clean Air Act so it can enforce its own emissions rules. "Allowing California to regulate carbon dioxide emissions, and thus fuel economy, will further damage companies that are struggling, like GM, Ford, Chrysler and much of their supply base, and potentially destabilize relatively healthy companies like Toyota and Nissan," Fedewa said in his prepared remarks. Dealer groups are prepared to say that their members also would bear heavy economic burdens if state-by-state rules take effect. A big reason: An automaker's compliance would be based on greenhouse gases from vehicles delivered for sale in each state, not on the new vehicles registered in that state. So, an automaker could deliver the mix of vehicles necessary to comply, but dealers would have to pay interest on loans to stock them and try to sell them, perhaps to unwilling consumers, the National Automobile Dealers Association said in a briefing [Wednesday]. Dealers in states with California rules also fear losing sales of bigger vehicles to dealers in adjacent states without California rules, NADA says. But "what is the incremental value of granting the waiver?" said David Regan, NADA's vice president of legislative affairs.
Source: Automotive News

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Car Buyers Gain Under Fed Program as Dealers Press for More Aid

U.S. auto buyers may find it easier to get a car loan after the start of a $1 trillion Federal Reserve program to help thaw frozen debt markets. Dealers are still waiting for help. Owners of dealerships criticized the Term Asset-Backed Securities Loan Facility yesterday for failing to meet their most pressing need: financing to buy cars from automakers. Car sellers are complaining they don’t qualify under the program that covers only AAA-rated debt. Auto dealers use loans from finance companies to buy cars and trucks from manufacturers. Ratings companies have ranked loans to dealers below AAA, meaning the debt can’t be bought by investors with funds from the program. U.S. Representatives including Democrat Gary Peters and Republican Thaddeus McCotter, both of Michigan, and Democrat Barney Frank, the chairman of the Financial Services Committee, asked the U.S. Treasury and the Fed yesterday to consider allowing investors to buy securities rated below AAA. That would include loans made to GM, Ford and Chrysler dealers. “If the American auto industry receives an enhanced bridge loan but cannot sell their cars, our communities will greatly suffer,” McCotter wrote.
Source: Bloomberg

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Auditors Raise Doubts about G.M.'s Viability

DETROIT — The automaker General Motors, which has borrowed $13.4 billion from the federal government and is seeking billions more, acknowledged in its annual report on Thursday that its survival was in “substantial doubt.” The acknowledgment was made as a result of a “going concern” notice from the company’s auditors; G.M. said last week that it expected to receive such a warning. Despite the notice, G.M. said that it still believed it could be viable and that it did not intend to file for bankruptcy protection. G.M. has until the end of March to reach deals with the U.A.W. and its bondholders and to show President Obama’s auto industry task force that it is making progress on the restructuring plan that it filed with the Treasury Department in February. G.M. said in Thursday’s filing that it had no way to repay the loans right now and could soon become insolvent without more aid. “If we fail to obtain sufficient funding for any reason, we would not be able to continue as a going concern and could potentially be forced to seek relief under the U.S. Bankruptcy Code,” it said.
Source: The New York Times

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German Auto Sales Leap With Payment for Scrapping Old Cars

BERLIN — Auto sales in Germany last month boomed to their highest level in 10 years, spurred by the German goverment's bonus to people who scrap older cars and buy new ones, an industry group said Tuesday. Germany's goverment discounts for new-car buyers is Europe's most generous — 2,500 euros, or $3,134 at Tuesday's exchange rate. A buyer has to trade in a car at least 9 years old and agree to let it be scrapped. Other European countries offer similar discounts, but those range as low as 1,500 euros. The program not only whips up auto sales, it boosts tax revenue. And because it scraps an older car for every new one, it tends to boost fuel economy and cut tailpipe emissions. The U.S. has balked at direct-to-buyer programs. It limits new-car purchase incentives to a tax deduction for the amount of sales tax on the new-car purchase — a benefit worth only a few hundred dollars, at best.
Source: The Associated Press

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American Dream Evaporating for Auto Dealer in Pa.

Bill Rosado is struggling to prevent the collapse of everything he's built since arriving in this country almost 35 years ago. "It's a tragedy, believe me," said the owner of the Scranton, Pa.-based Rosado Auto Group. "It's a tragic time." That's true, and not only for the 900 U.S. dealerships that closed last year and the 1,200 more expected to close this year. The National Automobile Dealers Association says U.S. motor vehicle sales generate over 18 percent of total retail sales and more than $20 billion annually in sales tax revenue, a hefty portion of state and local budgets. Rosado, who proudly calls himself "Mexican by birth, American by choice," arrived in the United States at age 15 and grew up in Milford, Pa. He began selling cars in 1981 and opened his first dealership eight years later. "I was living the American dream, and it's become a nightmare," he said. "I've lost most of my net worth keeping things going." Even worse, dealers themselves are having a tough time financing their inventory, leaving them squeezed between two sides of the credit crunch, said NADA spokesman David Hyatt. "The biggest challenge facing most dealers today is getting floor-plan financing," Hyatt said. "It's the lifeblood of the industry, and it's dried up in many instances." Rosado believes with government intervention, the crisis will ease. "I have faith; this is a great country, and by mid-March, we should see a big difference," he said. "The auto industry is a good vehicle for economic recovery — no pun intended."
Source: Times Herald-Record (Middletown, N.Y.)

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NADA Update
NADA Online Services Temporarily Unavailable This Weekend

NADA will be performing maintenance on several computer systems from Saturday March 7 at 7:00 p.m. until Sunday March 8 at 6:00 a.m. The following services and Web pages will be unavailable during this time: the NADA Online Store, the www.nada.org Web site login, product catalog, registrations, orders, and the Online Member Update. While the maintenance is under way, you may receive a "temporarily unavailable" message. Please try back after 6 a.m. on Sunday March 8.

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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
 
"If the goal is to significantly reduce greenhouse gas emissions and our country's dependence on foreign oil, then CARB’s fuel economy plan would not be as effective as a single, national fuel economy standard."

   
-- NADA Chairman John McEleney, in testimony today before the EPA as it reconsiders California's request to establish its own fuel economy regulations, NADA Newswire, March 5


"[President Barack Obama] believes that one national policy for autos would provide the industry with certainty while achieving our environmental and energy independence goals, and it is a topic the administration is exploring as part of the broader restructuring discussions with the auto makers."

    -- A White House spokesman, The Wall Street Journal, March 4


"If auto dealers can't get financing, they can't sell cars and our auto industry cannot recover."

   
-- U.S. Rep. Thaddeus McCotter (D-Mich.), The Detroit Free Press, March 4


"I have faith; this is a great country, and by mid-March, we should see a big difference. The auto industry is a good vehicle for economic recovery — no pun intended."

   
-- Bill Rosado, owner of the Scranton, Pa.-based Rosado Auto Group, referring to his struggles to prevent the collapse of everything he's built since arriving in the U.S. nearly 35 years ago, Times Herald-Record (Middletown, N.Y.), March 4


"The biggest challenge facing most dealers today is getting floor-plan financing. It's the lifeblood of the industry, and it's dried up in many instances."

   
-- David Hyatt, NADA vice president of public affairs, Times Herald-Record (Middletown, N.Y.), 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.