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Monday, March 9, 2009 RSSSEND TO A FRIENDPRINT
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At a Glance...
Top Stories
Auto Dealer Groups Lobby for Aid in Washington
Obama Team's Crash Course Moves to Detroit
Auto Dealers Plead for U.S. Help as Hundreds May Fail in 2009
Rural Dealers Stand Tall Amid Downturn
Auto Parts Supplier Looks Beyond Industry for Survival
Opinion: There's No Time to Waste in Saving the Auto Industry
Williams Hears Viewers' Plea for Good News
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
Auto Dealer Groups Lobby for Aid in Washington

WASHINGTON -- Two auto dealer associations met Friday with the White House auto task force and urged the government to take measures to make it easier for dealers and their prospective customers to obtain credit. Representatives of the National Auto Dealers Association and the National Association of Minority Auto Dealers spoke with members of the task force, which has held meetings over the past two weeks with a wide variety of auto executives, industry experts, labor representatives, creditors and politicians. In a letter sent Monday to President Barack Obama, the dealer associations said falling consumer confidence, credit market turmoil and a steep drop in lending had "created an unsustainable business climate" for thousands of dealers. They urged 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 funds for 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 said.
Source: The Detroit News

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Obama Team's Crash Course Moves to Detroit

President Barack Obama's top auto advisers, who have been criticized for lacking firsthand knowledge of the industry, are taking a crash course in the business of building and selling vehicles. It features a whirlwind trip to Detroit [today]. Representatives of the White House task force, including senior advisers Steven Rattner and Ron Bloom, are scheduled for private meetings with automaker and union leaders in Michigan, an administration official said. Task force members have "a steep learning curve," says John McEleney, an Iowa auto dealer and chairman of the National Automobile Dealers Association. He added: "They are very smart people." McEleney led a dealer delegation at a task force meeting [Friday]. Mike Martin of Virginia represented General Motors dealers. Chuck Eddy of Ohio represented Chrysler dealers. Dealers argue against the prospect of government forcing dealerships to close as part of industry restructuring. Their priority is freeing up credit, particularly for inventory financing, McEleney said. "That's one of the critical problems, if not the most critical, for dealers right now," McEleney told Automotive News.
Source: Automotive News

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Auto Dealers Plead for U.S. Help as Hundreds May Fail in 2009

The National Automobile Dealers Association appealed to President Barack Obama’s car industry task force for help in cutting financing costs for retailers. The 90-minute discussion with U.S. Treasury auto advisers Steven Rattner and Ronald Bloom didn’t elicit any commitment for aid, NADA Chairman John McEleney said [Friday] in an interview. “We certainly did not receive a commitment and nor did we expect to,” McEleney said. “We had a very helpful discussion. We spent about one-third of our time discussing that topic.” Owners of dealerships this week criticized the $1 trillion Term Asset-Backed Securities Loan Facility 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. Car dealers of small-to-medium size need financing to support their inventory, which is typically $5 million in vehicles, the NADA chairman said. “A lot of our dealers, if they aren’t losing money, are right on the edge,” McEleney said. “It’s really bad."
Source: Bloomberg

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Rural Dealers Stand Tall Amid Downturn

Steve Henderson's small dealership amid the grasslands of Nebraska should be struggling. Yet Henderson, who also handles Buick and Pontiac, operates in a pocket of prosperity. Commodity farm prices were so high last year that a local farmer, after being paid a whopping $14.70 a bushel for his soybean crop, didn't even ask the price of a Buick Lucerne he bought, Henderson says. America's hinterlands face outsized economic pressures. Besides the credit crunch and nationwide recession, dealers in rural Midwestern areas confront a declining population. Nonetheless, several rural dealers say they are better off now than they were three years ago, when Automotive News profiled their woes. Loy Todd, president of the 218-member Nebraska New Car & Truck Dealers Association in Lincoln, says rural dealers bring unique strengths to the market. Nebraska dealer Brian Hamilton vouches for the rural advantage. He and his wife operate a pair of suburban Omaha dealerships, selling Chevrolet and Subaru, and two in rural Kearney (pop. 30,000), selling General Motors and Chrysler LLC brands. Hamilton likes what he sees at the rural stores. "Our out-state dealerships are easier to manage," he says. "You get better customer loyalty, the cost of labor is lower and there is much less competition from Japanese brands."
Source: Automotive News

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Auto Parts Supplier Looks Beyond Industry for Survival

From a bare-bones office at her plant, [Laurie Schmald Moncrieff, a third-generation family owner of auto supplier Schmald Tool & Die near Flint, Mich.,] works 16-hour days trying to win new business, lobby the state and federal governments to change laws affecting small manufacturers and keep her business funded. It's exhausting, she says, but she doesn't know what else to do. "You can sit there and talk about all the bad things that are happening, or you can do something. I'm trying to do something." The changes rattling the auto industry first hit small suppliers such as Schmald Tool & Die 10 years ago, as companies shifted more work overseas. A decade of severe pricing pressure from customers — automakers and larger suppliers — forced many suppliers into bankruptcy court, even before the current sales crash. Now, suppliers, who employ 590,000 U.S. workers, have followed automakers in asking for federal aid. They also want a "quick pay" program for payment faster than the 60 to 90 days many see now. A similar plan after the Sept. 11 attacks helped suppliers deal with a drop in demand.
Source: USA TODAY

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Opinion: There's No Time to Waste in Saving the Auto Industry
By Tom Walsh

Sorry to be abrupt with you, exalted members of President Barack Obama's auto task force, but there's no time for small talk. You people need to act quickly -- like yesterday, if not sooner -- to put forward a clear-cut plan for saving what's left of a domestic automobile industry that's on the edge of complete collapse. Just get on with it, so all the suppliers, dealers, engineers, welders, bondholders and accountants whose fates are at stake can plan accordingly. We may be angry, but we are not all stupid. We know that America's banks and many car buyers already view GM and Chrysler as bankrupt car companies. You can see it in the sales numbers. A poll released Sunday by Rasmussen Reports showed that only 32% of American adults have a favorable opinion of GM, down from 42% a month ago. For Chrysler, 33% of respondents had a favorable view, down from 36%. Please, task force members, crunch your numbers and do your political calculus quickly.
Source: Detroit Free Press

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Williams Hears Viewers' Plea for Good News

NBC anchor says request for positive stories has hit ‘incredible nerve’
NEW YORK - Between the drumbeat of bad economic stories, two wars and a winter that won't quit, NBC's Brian Williams knows he's been anchoring a depressing "Nightly News" for a depressed audience. Still, even he was shocked at the thousands of responses he has received in less than two days after asking viewers to suggest some good news to report. "I'm looking at a stack of printed e-mails," Williams said Friday. "We have more stories than we could humanly cover if we combined all three network newscasts. It's hit an unbelievable nerve." He's heard about a man who keeps a full can of gas in his trunk and gives it to people who have run out of gas, asking only that they do the same for someone else. One woman goes up to strangers on the street and gives them money. A man nominated his landlord, saying he reduced the rent and even helps pay his bills. "It really told me something," he said. "I have learned a lot. I thought I knew all there was about the good nature of Americans, and this was a flood."
Source: MSNBC.com

[Editor's Note: On a positive note, NADA Headlines has introduced a new feature called "Committed to Community." Please email us any news stories that feature dealers doing good things in their communities. NADA Headlines will publish these positive stories as they become available. Contact NADA public affairs at (703) 760-7578 or publicaffairs@nada.org.]

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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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Quotable
 
"We had an opportunity to explain our dealer business model and to talk about credit issues."

   
-- NADA Chairman John McEleney discussing the meeting last Friday with President Obama's auto task force, NADA-TV, March 9
Video Highlights
 
 

NADA-TV: McEleney Says Meeting With Obama Auto Task Force Was Productive.

 NADA Tackles Industry Crisis.


NADA Chairman Speaks at the Convention in New Orleans.
NBC: "Demise of Local Dealerships Leaves Big Dent."
2009 Convention in New Orleans
NADA on the Front Lines


Click here for more NADA-TV reports.

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.

 
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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.