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At a Glance...
Top Stories
Senators Urge Improvement to Auto Dealers' Credit Access
In Credit Drought, U.S. Car Dealers Battle to Survive
Chrysler Loan Drive Seeks Dealers' Help
Dealers Move to Fore in Fighting Card-Check
Sweden Says No to Saving Saab
Customers Look for New Cars, But Buy Used
NADA Update
NADA Member Handbook Now Available Online
New NADA Training Video Helps Dealers Find Additional Profits
Seminar Takes 'Deeper Dive' into FTC Red Flags Rule
Top Stories
Senators Urge Improvement to Auto Dealers' Credit Access

WASHINGTON -- A bipartisan group of U.S. senators is urging Treasury Secretary Timothy Geithner and Federal Reserve Board Chairman Ben Bernanke to ease the requirements in a new program designed to encourage consumer lending. The eight lawmakers -- including Debbie Stabenow, D-Lansing, and Carl Levin, D-Detroit -- sent letters late Thursday to the two, urging them to allow U.S. auto dealers to take part in the program that is now open only to assets with the highest-rated investment grade ratings, or AAA-ratings. That requirement effectively excludes financing of wholesale dealer inventories by U.S. auto finance companies such as GMAC LLC, Chrysler Financial LLC and Ford Motor Credit. "The American automobile industry is facing an unprecedented decline in U.S. auto sales compounded by slumping consumer confidence and the continued lack of available credit for consumers and dealers," said the two-page letter sent by the senators to Geithner and Bernanke. "The current requirements of the [Term Asset-Backed Securities Loan Facility] program effectively exclude domestic auto finance companies who have been the traditional lenders to dealers." Auto dealers have also been making their own push. In the last 14 months, about 1,000 dealerships have closed nationwide, putting about 50,000 people out of work. Earlier this month, three groups representing 19,000 auto dealers jointly wrote a letter to President Obama asking him to improve dealer access to credit through the TALF program. The letter also asked the Obama administration to open a Small Business Authority loan guaranty program to dealers "to provide floorplanning and working capital for auto dealers."
Source: The Detroit News

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In Credit Drought, U.S. Car Dealers Battle to Survive

LANSING, Michigan -- Deep in the last stronghold of the struggling U.S. auto industry, Rosario Criscuolo says he owes the survival of his business to Toyota Motor Corp. "If it weren't for Toyota, I'd be gone," said the owner of Spartan Auto Group, which runs three auto dealerships selling Toyota, Lexus, Infiniti, Volkswagen and Mazda brand cars. "Without them I'd be selling papers on the corner." To fund the $25 million worth of gleaming new cars at his showrooms ... Criscuolo needs floorplan financing, or inventory loans. But many auto dealers say the credit crunch has left them unable to bring in new cars or keep those they already have, choking off production by the U.S. automakers. "If we don't fix this wholesale credit issue, this whole thing collapses," said John McEleney, National Auto Dealers Association chairman, who owns two dealerships that between them sell Toyota, General Motors and Hyundai branded cars. "Every week there are more dealers that are being impacted and going out of business." To help dealers in worse shape than Criscuolo, the NADA and two other dealer associations have called on U.S. President Barack Obama to have the Federal Reserve's Term Asset-backed Loan Facility -- set up to provide $200 billion to finance new debt backed by auto, credit card, student and small business loans -- to boost floorplan financing. Rating agency downgrades for auto finance companies like GMAC LLC have cut off access to TALF funds.
Source: Reuters

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Chrysler Loan Drive Seeks Dealers' Help

Chrysler LLC has asked its dealers to write letters to Treasury Secretary Timothy Geithner and the two key members of the Obama administration's auto task force urging them to approve more aid for the auto maker. Chrysler has been given $4 billion in federal loans so far and has asked for an additional $5 billion by March 31, but the Treasury and the task force haven't signaled whether the request will be granted. In the past week, Chrysler has increased its appeals for aid. Since Monday, Chief Executive Robert Nardelli has given a series of media interviews in which he has said Chrysler can survive as a stand-alone company if it gets further government loans and doesn't necessarily need its planned alliance with Italy's Fiat SpA to stay in business. Chrysler now has asked dealers to join in, requesting that they write to Mr. Geithner; Steven Rattner, the Wall Street financier who heads the task force; and Ron Bloom, an adviser to the United Steelworkers union who also serves on the task force, a person familiar with the matter said. Chrysler distributed a sample letter to its 3,200 dealers across the country and suggested they send it to Messrs. Geithner, Rattner and Bloom, the person familiar with the matter said.
Source: The Wall Street Journal

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Dealers Move to Fore in Fighting Card-Check

WASHINGTON — Dealers have moved to the front lines of opposition against legislation that would make it easier for workers to join unions. The practice is commonly called card-check. Dealers and other businesspeople are claiming some success in slowing momentum of the bill, which is a top priority of organized labor and key Democratic lawmakers. "The politics of this has changed," said David Regan, vice president of legislative affairs for the National Automobile Dealers Association. But the timing of votes and their outcome are increasingly uncertain. That is partly because businesses have argued effectively that labor law doesn't need changing, Regan told Automotive News last week. Businesses are using both paid advertising and grassroots lobbying, Regan said. "Everyone understands the importance of the secret ballot," he said. Under card-check, an employer's workers could organize if a majority of them signed authorization cards in favor of a union. The employer could no longer demand an election overseen by the National Labor Relations Board. Many dealers have contacted lawmakers about the proposal, Regan added.
Source: Automotive News

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Sweden Says No to Saving Saab

TROLLHATTAN, Sweden — Saab Automobile may be just another crisis-ridden car company in an industry full of them. But just as the fortunes of Flint, Mich., are permanently entangled with General Motors, so it is impossible to find anyone in this city in southwest Sweden who is not somehow connected to Saab. Which makes it all the more wrenching that the Swedish government has responded to Saab’s desperate financial situation by saying, essentially, tough luck. Or, as the enterprise minister, Maud Olofsson, put it recently, “The Swedish state is not prepared to own car factories.” Governments all over the world are confronting the disintegration of the global automobile market in different ways, with loans, bailouts and takeovers. But Sweden’s approach has been particularly hard-nosed, and particularly unequivocal. Struggling for its own survival, G.M. has said it will completely pull out of Saab by the end of 2009, a course that Ms. Olofsson, the enterprise minister, described as tantamount to declaring “that they wash their hands of Saab and drop it into the laps of the Swedish taxpayers.” She said: “We are very disappointed in G.M., but we are not prepared to risk taxpayers’ money. This is not a game of Monopoly.”
Source: The New York Times

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Customers Look for New Cars, But Buy Used

Dealers adapt as customers switch gears at showroom
Economic uncertainty, tighter credit standards and stronger warranties on nearly new vehicles are luring price-conscious, credit-squeezed consumers away from new cars and trucks to used ones. Last year, more than 13% of new car shoppers left dealerships with a certified used vehicle instead, up from 8.3% in 2003, according to CNW Marketing Research in Bandon, Ore. While new car sales are expected to decline to as low as 10.1 million this year, from dismal sales of 13.2 million in 2008, CNW is forecasting that used vehicle sales will grow through 2012. This year, the firm forecasts used car sales of 40 million, up 9.5% from 2008's weak volume of 36.5 million. Already, 42% of dealers are reporting too little used vehicle inventory as a result of the trend, according to a March survey by Wachovia Securities analyst Rich Kwas. He added that was the highest level recorded in the past three years. Strength in the used car market is a good sign for the battered new vehicle market, which has forced Detroit's automakers to close plants, lay off workers and seek federal assistance. Historically, strong used vehicle sales eventually translate into improved new car sales.
Source: Detroit Free Press

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NADA Update
NADA Member Handbook Now Available Online

For the first time, NADA's member handbook is available online at www.nada.org/membership. The handbook includes department information and contacts. NADA has also mailed 2009 member packets to all members. The packets include: An updated leadership brochure, which has contact information for NADA's leadership and board of directors; a database update form for member companies to update their contact information; a NADA/ATD quick-reference benefits card; and a 2009 member window decal. For more information on NADA membership, visit www.nada.org/membership or email membership@nada.org.

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New NADA Training Video Helps Dealers Find Additional Profits

You can tell a lot about a person by the vehicle he or she drives. For many, a car or truck is more than just a way to get from point “A” to point “B.” It is an extension of the self. It is a way for everyone to express his or her individuality. Accessorizing is as much about passion as it is about product. NADA Management Education’s new training DVD, Accessorizing Your Way to Additional Profits, is designed to help dealers tap into this passion and add dollars to every sale. Dealers and managers can learn how to launch an accessories operation from dealers who have actually done it, examining staffing, displays, marketing, warranties, and more. The Specialty Equipment Market Association (SEMA) estimates that accessories sales top $38 billion, and that dealerships capture just 10–15 percent of this market. If this percentage were to increase significantly, U.S. dealerships as a whole could see billions in additional profits and build customer loyalty. Consumers who accessorize their vehicles spend, on average, up to $3,500 annually on accessories. This training package includes a four-part DVD and a 22-page study guide, complete with an accessories quiz and lists of established parts vendors. To order, visit www.nada.org/accessorizing or call (800) 252-6232, ext. 2. Order online to watch a free video preview!

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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
 
"Everyone understands the importance of the secret ballot."

    -- David Regan, NADA vice president of legislative affairs, on proposed "card check" legislation, under which an employer's workers could organize if a majority of them signed authorization cards in favor of a union, Automotive News, March 23

Video Highlights
 

WTNH-TV: Are Banks Turning on American Car Dealers? (ABC affiliate, New Haven, Conn.)

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
 
 

Need Some Low-Cost Consulting? NADA's Dealer Hotline is Free

While new-car and truck dealers face unprecedented challenges today, NADA is offering free professional advice to help dealers meet them. NADA is helping members prioritize their dealership's top financial and operational challenges and identify areas of opportunity. Then, NADA will provide recommendations and suggestions for improvement. Free phone consultations are scheduled by appointment only. To schedule an appointment, visit www.nada.org/lifeline.

 
Lenovo Madness Sale

Lenovo is offering all NADA members up to 35 percent off select notebooks. Enter eCoupon USXTHINKMADNESS at checkout. 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 ends March 31. 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 details, visit www.nada.com/appraisal. To 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.