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Friday, March 6, 2009 RSSSEND TO A FRIENDPRINT
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Top Stories
Auto Dealer Groups Urge President Obama to Revitalize Market for Vehicle Inventory Credit and Retail Auto Financing
California Might Drop its Attempt to Get an Emissions Exception
Vehicle Sales Expected to Rebound, But Experts Aren't Sure How Much
Obama Team Working 'Around the Clock' on Auto Crisis
Saturn Has Interested Buyers, GM Says
Justice Department Rule Will Help Increase Public Transparency of Flooded and Rebuilt Wrecks
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 Dealer Groups Urge President Obama to Revitalize Market for Vehicle Inventory Credit and Retail Auto Financing

NADA leads delegation to meet with President’s auto task force today
WASHINGTON – An unprecedented drop in consumer confidence, credit market chaos and a steep drop in lending have created an unsustainable business climate for thousands of the nation’s new vehicle dealers and their employees, auto dealer groups said in a joint letter to President Barack Obama this week. The National Auto Dealers Association, along with the American International Auto Dealers Association and the National Association of Minority Auto Dealers, cosigned the March 2 letter.

The trade associations, which represent 20,000 U.S. franchised auto dealerships, are urging President Obama to “immediately revitalize the asset-backed securities market for wholesale and retail auto loans and expand the Small Business Administration loan guaranty program to provide floorplanning and working capital for auto dealers.”

“Without floorplan financing, an auto dealership will close within a matter of days, triggering additional unemployment and further erosion of the local tax base,” the dealer groups stated. “… this presents the single greatest threat in the short term to dealership viability.”

The dealer groups are asking the Obama administration to work with the Federal Reserve Board and the Treasury Department to refine the Term Asset-Backed Securities Loan Facility (TALF) and undertake any other options necessary to restore retail and floorplan lending. Over the past year, about 1,000 dealerships have closed, forcing more than 50,000 Americans out of work. And thousands of employee layoffs have occurred at the dealerships that are still operating.

“Absent access to sufficient credit on reasonable terms, [dealerships] will sputter and die,” the dealer groups wrote. “Dealers need retail credit to facilitate auto sales, because 94 percent of all vehicle purchases are financed. Dealers need working capital loans to meet current cash flow requirements such as payroll. Finally, dealers need floorplan financing, which is the specialized credit that enables dealers to buy their wholesale inventory of vehicles from the automakers.”

The average floorplan loan is about $4.9 million, and nationwide dealers are collectively at risk for nearly $100 billion in inventory financing.

“We need to restore the availability of credit for the automotive retailing network both to ensure the recovery of the overall auto industry and to preserve the economic foundation of communities all across the country,” the trade groups stated. “And time is very much of the essence.”

Separately, NADA and NAMAD met today with the President’s auto task force at the U.S. Department of the Treasury on how to stabilize the auto industry. “It’s important for the president’s auto task force to understand that the No. 1 issue facing dealers is the dire need for vehicle inventory financing,” said John McEleney, NADA chairman and a multi-franchise dealer in Iowa.
Source: NADA Newswire

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California Might Drop its Attempt to Get an Emissions Exception

Top air regulator says state close to agreeing to the national carbon standard car firms seek.
WASHINGTON -- California's top air regulator said Thursday her state could agree to the nationwide carbon-emissions standards that the auto industry seeks. "I think we may be very close to being on the same page," said Mary Nichols, the chairwoman of the powerful California Air Resources Board. She and dozens of industry experts, environmental activists and private citizens testified during an Environmental Protection Agency hearing on California's request to set its own rules for tailpipe emissions. Among those speaking Thursday: Sen. Carl Levin, D-Detroit, making a rare appearance by a sitting senator before a regulatory panel. Levin echoed the auto industry's case against a waiver for California, and calling for a nationwide standard built on the model of fuel efficiency increases Congress passed in 2007. Levin and representatives from auto dealers and manufacturers argued against the California request, saying it would establish an unworkably complex web of state-by-state regulations. But Nichols said approval of the waiver is the best way to pressure federal officials to set aggressive national standards.
Source: The Detroit News

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Vehicle Sales Expected to Rebound, But Experts Aren't Sure How Much

The nation's economy and the automotive industry are so volatile that automakers and consulting companies are having a difficult time predicting what sales of cars and trucks will be like in March, let alone next year. There is broad consensus that it will take until the second half of 2009 for a mild sales recovery to begin and that it will take until 2010 before car and truck sales recover to a point that automakers have at least a shot at making a profit. But there isn't certainty about how big a rebound might be coming, complicating the industry's attempts to plan ahead. "We are expecting a recovery" in 2010, said Anthony Pratt, an automotive analyst for Autofacts, the automotive research arm of PricewaterhouseCoopers. "Because there are so many people sitting on the sideline ... demand is building," he said."It all depends on what happens in the next few weeks," Pratt said. "The ball is essentially in the government's court."
Source: Detroit Free Press

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Obama Team Working 'Around the Clock' on Auto Crisis

Task force planning to visit Detroit, Bloomberg reports
WASHINGTON -- President Barack Obama's administration is working "around the clock" to form an approach to the challenges facing General Motors and the auto industry, a White House spokeswoman said today. "The administration is very mindful of the challenges in the auto sector," the spokeswoman said. "Our team is working around the clock to develop the most thoughtful approach possible to the situation."The Obama administration has formed a task force, which is overseeing the restructuring of General Motors and Chrysler LLC. It must decide by March 31 if the companies can be commercially viable. The group, led by White House and Treasury Department officials, [met with bondholders Thursday] as part of crucial debt reduction efforts at the companies. Obama's auto advisers, Ronald Bloom and Steven Rattner, may travel to Detroit next week to meet with GM and Chrysler executives, Bloomberg News reported today, quoting people familiar with the matter
Source: Reuters

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Saturn Has Interested Buyers, GM Says

Automaker hires well-known N.Y. consultant to work on deals
DETROIT -- Saturn is attracting interest from a "few" parties that might want to acquire the brand, a General Motors spokesman said today. GM has hired Steve Girsky, formerly senior auto analyst for Morgan Stanley, to help advise on any possible Saturn deals. Saturn spokesman Steve Janisse said, "There is interest from investors in doing a spinoff, and there are other entities interested in just buying it." Janisse said the Saturn task force wants to have a clear proposal for Saturn dealers by mid-April.
Source: Automotive News

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Justice Department Rule Will Help Increase Public Transparency of Flooded and Rebuilt Wrecks

NADA seeking legislation to fill gaps
WASHINGTON – The Department of Justice recently issued final rules to help deter auto fraud by connecting motor vehicle agencies in states throughout the country and requiring more insurance companies to disclose totaled vehicles. NADA strongly supports the National Motor Vehicle Title Information System (NMVTIS) rule, which will improve the ability of auto dealers and consumers to track potentially dangerous salvage vehicles.

NADA is seeking enhancements to the rule, so that the used car resale market can access this information. NADA is also seeking to modernize the rule, which was based on a 17-year-old law. The NMVTIS rule is significant because it closes several loopholes. For example, insurers would not only have to report totaled vehicles found to be a total-loss under the laws of the applicable state but also totaled vehicles as designated by its own policies. While insurance companies collect data on severely damaged vehicles for their shared private databases, they have not been required to disclose the vehicle identification numbers (VINs) of all totaled vehicles, permanently “red flagging” these vehicles for the public.

“Insurance companies have resisted reporting the VINs of all their totaled vehicles to the public for years,” said Ivette Rivera, NADA executive director of legislative affairs. “NADA is pleased that the justice department rejected insurer efforts to weaken the NMVTIS rule.”

NADA is still concerned that 14 states are not yet participating in NMVTIS, and that California will not allow NMVTIS to release its data to consumers. This creates a large gap in information that can be exploited by criminals.

Recently, Reps. Cliff Stearns, R-Fla. and Gene Green, D-Texas, and Sens. John Ensign, R-Nev., and Bill Nelson, D-Fla., introduced legislation to allow the public more timely and complete access to insurance data on totaled vehicles.  The bills, H.R. 1257 and S. 202, would require insurance companies to disclose the VINs of totaled cars to vehicle history providers before the vehicle gets back into the marketplace.

Because the NMVTIS rule is based on a 1992 statute, the rule only requires monthly reporting from insurance, junk and salvage yards. H.R. 1257 and S. 202 would make the reporting requirement electronic and timelier to eliminate the window for fraud. In addition, H.R. 1257 and S. 202 allow the tracking of totaled vehicles in a commercial format so that consumers and dealers can track the VINs of total-loss vehicles through multiple VIN lookups and searches.
Source: NADA Newswire

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NADA Update
NADA Online Services Temporarily Unavailable This Weekend

NADA will be performing maintenance on several computer systems from 7 p.m., Saturday, March 7 until 6 a.m., Sunday, March 8. The following services and Web pages will be unavailable during this time: NADA Online Store, 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
 
"Without floorplan financing, an auto dealership will close within a matter of days, triggering additional unemployment and further erosion of the local tax base. We need to restore the availability of credit for the automotive retailing network both to ensure the recovery of the overall auto industry and to preserve the economic foundation of communities all across the country."

   
-- NADA, along with AIADA and NAMAD, stated in a joint letter to President Barack Obama, NADA Newswire, March 6


"I think we may be very close to being on the same page."

   
-- Mary Nichols, chairwoman of the California Air Resources Board, said Thursday her state could agree to the nationwide carbon-emissions standards that the auto industry seeks, The Detroit News, March 6


"We are expecting a recovery [in 2010]. Because there are so many people sitting on the sideline ... demand is building."

   
--  Anthony Pratt, an automotive analyst for Autofacts, the automotive research arm of PricewaterhouseCoopers, Detroit Free Press, March 6
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.