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Tuesday, March 10, 2009 RSSSEND TO A FRIENDPRINT
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At a Glance...
Top Stories
President's Task Force Takes a Close Look at G.M. and Chrysler Plants
Union Approves Givebacks To Ford
Orders for Honda's New Hybrid Blow Past Target
Cracks in Auto Supply Chain Spreading
TALF Unlikely to Ease Crunch on Car Lots
NADA Update
NADART 401(k) Named Preferred Provider for National Independent Auto Dealers Association
Stimulus Legislation Mandates Temporary COBRA Premium Relief
Union Legislation Addressed in New Virtual Seminar
Seminar Takes 'Deeper Dive' into FTC Red Flags Rule
Top Stories
President's Task Force Takes a Close Look at G.M. and Chrysler Plants

DETROIT — Members of President Obama’s auto task force visited General Motors and Chrysler on Monday to see firsthand the companies whose fates rest in their hands. Top advisers on the task force, like Steven Rattner and Ron Bloom, toured G.M. and Chrysler plants in Warren, Mich., including a Chrysler factory that builds Dodge Ram pickups. They also drove prototypes of G.M.’s new extended-range electric car, the Chevrolet Volt. The auto executives and workers can only hope they made a favorable impression, as the task force enters a critical phase for deciding how, and whether, to rescue the two automakers. The task force members told G.M. and Chrysler executives and leaders of the United Automobile Workers union that Mr. Obama was aware of the urgency of Detroit’s problems and was committed to supporting the industry, said an administration official... However, the official also said that the president saw the need for a fundamental reorganization of G.M. and Chrysler, without specifying how that would be accomplished. At issue is whether the government extends up to $21.6 billion in additional loans to G.M. and Chrysler, or arranges federally financed bankruptcies for the companies. The government has set a March 31 deadline to decide whether to provide more aid to the automakers. The panel, led by Timothy F. Geithner, the Treasury secretary, and Lawrence H. Summers, director of the National Economic Council, is weighing whether to provide more loans, or require the companies to reorganize in bankruptcy. The leader of the National Auto Dealers Association, John McEleney, met with the task force for 90 minutes last Friday. “We didn’t spend much time on the bankruptcy discussion at all,” said Mr. McEleney, who owns two dealerships in Iowa, that sell multiple brands, including G.M. “And hopefully that won’t be something we’ll have to talk about.”
Source: The New York Times

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Union Approves Givebacks To Ford

UAW Concedes Cost-Of-Living Raises And Bonuses From 2007 Contract; Agreement Lays Groundwork For GM, Chrysler
Unionized workers at Ford Motor Co. have approved contract changes that include freezing wages and cutting benefits in a move to aimed at helping the automaker remain competitive. The United Auto Workers said Monday a majority of hourly workers voted in favor of modifications to the 2007 contract with Ford, eliminating cost-of-living increases and cash bonuses. "By working together with our UAW partners, we identified solutions that will help Ford reach competitive parity with foreign-owned auto manufacturers and that are important to our efforts to operate through the current economic environment without accessing a bridge loan from the U.S. government," said UAW President Ron Gettelfinger in a written statement. The ratified deal also ends the controversial jobs bank program that let workers collect most of their pay from the company. Ford, which has not sought government funding as rivals General Motors Corp. and Chrysler LLC have, is the first U.S. automaker to come to an agreement with the union. The details of the Ford agreement are expected to be a guideline for GM and Chrysler.
Source: CBS News/The Associated Press

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Orders for Honda's New Hybrid Blow Past Target

TOKYO -- Honda Motor Co. said orders for its recently launched Insight hybrid vehicle are more than triple the budget-priced vehicle's monthly sales target. The Japanese auto maker said it had received orders for about 18,000 Insights as of Monday. Honda said orders for the gasoline-electric hybrid car had already matched its monthly sales target of 5,000 vehicles even before the Insight's Feb. 6 rollout. Part of the reason for the strong demand for Honda's new fuel-efficient hybrid is that its sticker price ranges between 1.89 million yen and 2.21 million yen ($19,120 and $22,357) including tax, which is cheaper than rival Toyota Motor Corp.'s Prius hybrid vehicle. The Prius retails for between 2.3 million yen and 3.4 million yen. Honda will launch the Insight by the end of March in Europe and in early April in the U.S., targeting combined sales in the two markets and Japan of 200,000 vehicles.
Source: The Wall Street Journal

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Cracks in Auto Supply Chain Spreading

Automakers' drops in demand, unpaid bills put stress on Visteon, Delphi, others mired in crisis.
The automotive supply chain is at a breaking point with no cash, no credit, no decision on a request for $18.5 billion in federal aid -- and a lot of bills to pay. "With the industry being down, our biggest concern is the health of the suppliers," Ford Motor Co. Chief Executive Alan Mulally said Friday. Suppliers face a money crunch now because March is when they typically get paid for parts they ship in December and January, but automakers all but shut down in those months. With vehicle production ramping up again, they need money to pay for raw materials. Today, "two-thirds of suppliers are in a negative cash flow situation," said De Koker, who is hopeful the government will decide on aid as early as this week. Jim Lentz, president of Toyota's U.S. sales subsidiary and its top U.S. executive, will raise the automaker's concerns about U.S. suppliers Wednesday when he meets with the White House auto team, company sources said.
Source: The Detroit News

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TALF Unlikely to Ease Crunch on Car Lots

The final terms of the Term Asset-Backed Securities Loan Facility, or TALF, encourage lending to creditworthy borrowers. So, a broad swath of cash-strapped borrowers who make up a large chunk of the buyer base for U.S. automakers could be shut out. For the auto sector, the heart of the matter is the credit rating required to garner funding. The Federal Reserve has insisted that it will accept as collateral only asset-backed securities that have the highest triple-A rating from Moody's Investors Service, Standard & Poor's or Fitch Ratings. This ratings shortfall means TALF will ultimately bring scant relief to dealers who use these floor plan loans to stockpile new cars on their lots. Potential buyers will have fewer options. "U.S. consumers have become accustomed to a tremendous choice of vehicles when they make a car purchase," says Paul Taylor, chief economist at the National Automobile Dealers Association. "It is important they are able to examine vehicles and, in many cases, test drive them." This will shut out a large population of potential car buyers. In November, GM said nearly three-fourths of customers had a credit score below 700. The median credit score for U.S. consumers is about 723.
Source: Dow Jones Newswires

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NADA Update
NADART 401(k) Named Preferred Provider for National Independent Auto Dealers Association

McLEAN, Va. -- NADA Retirement Administrators, Inc. (NADART) was selected as the preferred retirement plan provider for the National Independent Auto Dealers Association (NIADA), a trade group representing about 20,000 members. "NADART was chosen for its ability to provide a quality retirement plan to its members at a cost they can afford," said Stephen Johnson, director of marketing for NADART. "Our products as well as our commitment to the auto industry will prove to be a good fit for NIADA and their members."
Source: NADA Newswire

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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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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 were pleased to host the task force so they could experience firsthand the new products and technologies that are integral parts of GM's near- and long-term competitiveness."

    -- GM in a statement referring to Monday's visit of President Barack Obama's auto task force in Detroit, The New York Times, 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 Celebrates  St. Patrick's Day

NADA Members can save up to 41 percent off the Web price on select Lenovo PC's and notebooks by entering the eCoupon USXSTPATSSALE at checkout. Great savings also are available on all ThinkPad and IdeaPad notebooks along with all computing accessories. Shipping is free on all Web orders. This offer ends March 17. To take advantage of these savings, visit NADA's PC Purchase Program online (login required).

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.