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At a Glance...
Top Stories
GM Dealers Balk at Ordering New Autos
G.M. Says It Won't Need Finance Infusion in March
Ford's Booth Guards Cash to Steer Clear of U.S. Aid
As Many as 500 Big Auto Suppliers May Fail, Firm Says
American Axle Gets 'Going Concern' Notice
SBA's March Web Chat Will Highlight the Recovery Act
NADA Update
COBRA Subsidy Compliance Addressed in New Virtual Seminar
NADART 401(k) Named Preferred Provider for National Independent Auto Dealers Association
Seminar Takes 'Deeper Dive' into FTC Red Flags Rule
Top Stories
GM Dealers Balk at Ordering New Autos

General Motors Corp. dealers say vehicles are stacking up on their lots and they are reluctant to order more, especially with the future of the Hummer, Saturn and Saab brands, and additional government aid, in question. The stance could harm GM's ability to generate revenue during the worst sales market since the early 1980s. GM, which avoided collapse in December after receiving a $13.4 billion federal loan package, books revenue when vehicles leave the factory, not when they are sold to consumers, so they need dealers to keep ordering. But some Saturn dealers, especially, say they won't order anytime soon. John Java, who owns two Saturn dealerships in Texas and Louisiana, said he has twice as many vehicles as he needs and since GM put the brand under review, showroom traffic has evaporated. "If they tell us what they're going to do with the brand, we'll tell them when we're thinking about ordering new vehicles," Java said. "We're starving to death." The shrinking sales market is one reason GM has asked the Obama administration for up to $16.6 billion in additional aid. GM said Thursday that it doesn't need $2 billion in loans this month that it had previously requested from the government.
Source: The Detroit News

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G.M. Says It Won't Need Finance Infusion in March

DETROIT — General Motors, which has borrowed $13.4 billion from the federal government since December to keep itself out of bankruptcy, said on Thursday that it had withdrawn a request for an additional $2 billion that it thought was needed to stay alive through the end of this month. G.M., the nation’s largest automaker, issued a statement saying that it had told President Obama’s auto industry task force, which is reviewing the restructuring plan that the company submitted last month, that its March financing request “would not be needed at this time” because it was making more progress than expected in reducing costs. G.M.’s 117-page restructuring plan, filed Feb. 17 with the Treasury Department, asked for $2 billion in March, $2.6 billion in April and at least $4.5 billion in 2010. The company also wanted access to another $7.5 billion, if needed, for a total of $30 billion. Chrysler, which has borrowed $4 billion so far, wants another $5 billion.
Source: The New York Times

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Ford's Booth Guards Cash to Steer Clear of U.S. Aid

One of the first decisions Lewis Booth made after stepping into the job as Ford Motor Co. chief financial officer in November was tapping a $10.1 billion revolving credit line to preserve the company’s access to cash. Some Ford executives didn’t want to take on more debt and interest as sales plummeted. Others argued that the company should take the cash before it vanished as the credit markets deteriorated. Booth settled the debate, opting to tap the money. Executive Chairman Bill Ford cites that move as helping ensure the automaker would not have to accept federal aid to continue operating, as competitors General Motors Corp. and Chrysler LLC have done. “Our plan was, is and is going to be to thread the needle” of not taking federal aid, Ford said in an interview. “Lewis has pushed our company to get out ahead of our issues and not to react.” Prior to becoming CFO, Booth, 60, spent the last 12 years running Ford carmaking operations around the world, starting in South Africa, moving to Asia and finally in Europe. He engineered a turnaround at Mazda in Japan and overhauled Ford’s European car lineup. He also led the sale of European luxury lines Jaguar, Land Rover and Aston Martin. “He literally knows how the entire Ford world works more than any executive we have in the company,” said Bill Ford, 51.
Source: Bloomberg

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As Many as 500 Big Auto Suppliers May Fail, Firm Says

As many as 500 of the largest U.S. automotive suppliers may be at risk of failing because of plummeting U.S. car and truck sales, the consulting firm Grant Thornton LLP said. More than 10 such companies already have gone into bankruptcy or had to liquidate this year, Laura Marcero, a partner in the firm’s corporate advisory and restructuring team, said at an Automotive Press Association event [Thursday] in Detroit. Those at risk represent up to 40 percent of so-called Tier 1 suppliers, according to Grant Thornton. “Companies are locking their doors on a week’s notice,” Marcero said. A rash of such closures “would impact every automaker,” with costly production shutdowns likely at companies such as General Motors Corp., Chrysler LLC and Toyota Motor Corp., she said. The Grant Thornton report may bolster efforts by supplier trade groups to get as much as $18.5 billion in U.S. government aid for the industry. Production cuts by automakers including GM and Chrysler in December and January are expected to squeeze suppliers’ revenue this month, because payments for parts often arrive 45 to 60 days after the components are shipped.
Source: Bloomberg

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American Axle Gets 'Going Concern' Notice

NEW YORK -- American Axle & Manufacturing Holdings Inc.'s auditors are warning the auto supplier may go out of business because of pressure on its main customers, General Motors and Chrysler LLC. GM, American's Axle's former parent, last week also said its auditors had raised "substantial doubt" about its ability to survive outside bankruptcy if it fails to stem losses and stop burning cash. U.S. auto suppliers submitted a request in February to the U.S. Treasury to secure $18.5 billion in emergency funding to avoid a wave of bankruptcies and a deeper crisis in the auto industry. The request, which was submitted by two industry groups, outlined three proposals for financial relief for parts suppliers to the U.S. government. The proposals ask the government to guarantee U.S. automakers' payments to parts suppliers, accelerate payment terms or guarantee commercial loans to companies that make auto parts.
Source: Reuters

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SBA's March Web Chat Will Highlight the Recovery Act

WASHINGTON - The American Recovery and Reinvestment Act will be the focus of discussion for the U.S. Small Business Administration's March Web chat. SBA Associate Administrator for Capital Access Eric Zarnikow will help small business owners get answers to their questions about what the Recovery Act means for the nation's small businesses. The Recovery Act is a national effort to grow the U.S. economy by stimulating job creation, freeing credit markets, and investing in small business. The Act contains a package of loan fee reductions, higher guarantees, new SBA programs, secondary market incentives, and enhancements to current SBA programs that will help unlock credit markets and begin economic recovery for the nation's small business sector. Participants can join the live Web chat on March 19, 2009, 1 - 2 p.m. ET by going online to www.sba.gov, and clicking the "Online Business Chat" icon. Web chat participants may post questions for Zarnikow before the March 19 chat by clicking here, and posting their questions online.
Source: U.S. Small Business Administration

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NADA Update
COBRA Subsidy Compliance Addressed in New Virtual Seminar

Dealers with former employees and certain beneficiaries eligible for continuing health insurance coverage may need to issue a new COBRA notice indicating that they may be eligible for a 65 percent reduction in premiums. 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 program applies to people who become eligible for COBRA between Sept. 1, 2008 and Dec. 31, 2009. Those who choose to continue coverage may receive a 65 percent plan continuation premium discount. In other words, employees who normally would pay 100 percent of their COBRA plan premiums may need to pay only 35 percent, with employers or the health plan picking up the difference.

To help dealerships comply with the Act, NADA has asked Penny Wofford, an employment law specialist and partner in the law firm Ford & Harrison, LLP, to conduct a virtual seminar on Thursday, March 19, from 1-2:30 p.m. EST. In “Employer Requirements for New COBRA Subsidy,” Wofford will discuss Assistance-Eligible Individuals (AEIs), employer notices and their timing and the payroll tax credit. She will outline the steps dealerships need to take to comply and to coordinate the subsidy administration with COBRA administrators, insurers and other service providers. Participants’ questions will be addressed during the final 15 minutes of the seminar.

The fee for this timely virtual seminar is $50 per computer connection. To register, visit www.nada.org/seminars or call (800) 252-6232, ext. 2.

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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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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
 
"If they tell us what they're going to do with the brand, we'll tell them when we're thinking about ordering new vehicles."

     -- John Java, owner of two Saturn dealerships in Texas and Louisiana, The Detroit News, March 13

Video Highlights
 
 

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

 

NADA-TV: McEleney Testifies at EPA Hearing on Fuel Economy Rules

 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 PCs 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 is 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.