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Top Stories
Obama Fuel Economy Standard Set Higher Than California Rule
Automakers to Get Aid Package
GM Unlikely To Hit Goal Of March 31 Restructuring
Poll: Outlook Improving About Economy
CNW: More Customers with FICOs Below 670 Gaining Approval
NADA Update
Seats Available for Dealer Academy Classes in May and June
COBRA Subsidy Compliance Virtual Seminar to be Repeated March 31
NADA Member Handbook Now Available Online
New NADA Training Video Helps Dealers Find Additional Profits
Top Stories
Obama Fuel Economy Standard Set Higher Than California Rule

NADA supports a single, national fuel economy standard
WASHINGTON -- The Obama administration today issued fuel economy rules for 2011 model year passenger cars and light trucks, which are set higher than the California standard. The new rule was released in accordance with the Energy Independence and Security Act of 2007, which mandates fuel economy increases to at least 35 mpg for the fleet by 2020.

For the 2011 model year, the Corporate Average Fuel Economy (CAFE) standard for passenger cars was increased to 30.2 mpg and 24.1 mpg for light trucks. Overall, the standard for the fleet will be 27.3 mpg, a 2 mpg increase over the 2010 model year average.

The California standard for model year 2011 is 26.7 mpg for the light duty fleet, which includes passenger cars and light trucks. The state of California in Jan. 2009 petitioned the Obama administration to implement its own separate yet duplicative fuel economy system.

“By setting a fuel economy standard higher than what California regulators have proposed, the Obama administration today removed the last argument for state-by-state regulation of fuel economy," says John McEleney, chairman of the National Automobile Dealers Association. "The structure of California’s program – with its exemptions for major automakers, its 'patchwork' design and its loopholes – is unworkable as a national policy."

The cost for automakers to implement the rule will be $1.5 billion for the 2011 model year.

"Only a single, national fuel economy standard gives the auto industry the regulatory certainty necessary to produce and market the fuel efficient cars of tomorrow," McEleney said. "In contrast, California’s patchwork fuel economy program would exacerbate the auto sector’s severe economic turmoil.
 
"Now that the new CAFE law, passed by Congress in Dec. 2007, is at last being implemented, America’s auto dealers call on all stakeholders, including the Obama administration and California regulators, to embrace a single, national fuel economy standard," McEleney added.
Source: NADA Newswire

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Automakers to Get Aid Package

Administration to Mandate 'Painful' Changes at GM, Chrysler
President Obama said yesterday that his administration will offer the auto industry an aid package that will require General Motors and Chrysler to make "painful" and "pretty drastic" changes. The aid package for the companies will be unveiled in the next several days, he said, and will be contingent upon the companies adopting business plans that reflect the fact that they have a smaller share of the auto market. "I know that it is not popular to provide help to autoworkers -- or to auto companies -- but my job is to measure the costs of allowing these auto companies just to collapse," he said. In all, the companies have asked for $21.6 billion, which would come in addition to the bridge loan deals in December. So far, even the cuts that the Bush administration called for when it offered the $17.4 billion loan package have proven difficult to implement. Under the loan terms, GM was supposed to strike a deal with its bondholders by March 31 so that they would agree to swap two-thirds of their $27 billion in bonds for an equity stake in the company. Likewise, GM and Chrysler were supposed to strike a deal with their retiree health plans, under which the health plans would agree to forgo billions in payments from the auto companies in exchange for an equity stake. There is no framework in place for either of those required agreements, however.
Source: The Washington Post

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GM Unlikely To Hit Goal Of March 31 Restructuring

General Motors Corp. has been chipping away at the massive restructuring plan it submitted to the U.S. government last month, but it is unlikely to meet a March 31 deadline for gaining concessions from its main union and bondholders. ... GM still has ample work to do, including convincing the UAW to return to the bargaining table to restructure $20 billion in health-care benefits for retirees. The UAW has said it prefers to negotiate a health-care agreement similar to one it reached recently with Ford Motor Co., but GM has said the Ford deal won't meet GM's cost-cutting needs. The UAW also has said it won't negotiate with GM on the health plan until the company's bondholders, who carry $27 billion in unsecured debt, offer deeper concessions. Under terms of its government loans, GM is expected to cut its unsecured debt by two-thirds by offering a debt-for-equity exchange. The stalemate means GM could trip a March 31 deadline for the bondholder and union health-care deals imposed by the Treasury Department. However, officials on President Barack Obama's auto-industry task force appear willing to extend the deadline by 30 days, said several people briefed on the matter.
Source: The Wall Street Journal

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Poll: Outlook Improving About Economy

WASHINGTON — Some Americans are beginning to see light at the end of a long tunnel. For the past two weeks, the percentage of respondents in The Gallup Poll who say the economy is getting better has been steadily ticking up. Monday through Wednesday, 29% took the optimistic view — the highest number since July 2007. That doesn't mean everyone's outlook is rosy — 66% continue to say the economy is getting worse — but it does signal a significant improvement in public attitudes after nearly two years of downbeat forecasts. The percentage seeing better times ahead has nearly doubled since March 9, when 15% said the economy was improving and 78% said it was getting worse.
Source: USA TODAY

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CNW: More Customers with FICOs Below 670 Gaining Approval

BANDON, Ore. — After plummeting to an average of 6.52 percent in October of last year, the number of customers approved for vehicles with a FICO under 670 is slowly climbing upward, according to the latest data from CNW Research. Furthermore, CNW reported that after reaching an average high of 759.49 in October, the median FICO score for February has also declined to 723.69 as of February. In another analysis, CNW found that closing ratios have dipped for dealers. CNW's Floor Traffic Index showed some life after being down throughout much of 2008.
Source: Subprime News

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NADA Update
Seats Available for Dealer Academy Classes in May and June

Seats are still available in the NADA Dealer Academy classes scheduled to begin in May and June. In May, two new classes will begin – one for dealer successors and one for general managers. In June, an additional general manager class will begin. The Academy’s objective is to train dealer successors and managers to profitably operate an automotive dealership in today’s and tomorrow’s challenging economies. The 11-month training program combines six weeks of classroom instruction with about 45 weeks of work experience in the sponsoring dealership. All classes take place at NADA in McLean, Va. The six individual class weeks focus on financial management, parts department, service department, new car sales, used car sales and overall dealership management. For more information, visit www.dealeracademy.org or call Diane Weppner, academy registrar, at (703) 821-7216.

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COBRA Subsidy Compliance Virtual Seminar to be Repeated March 31

NADA's virtual seminar on the new COBRA subsidy will be offered again—still at the low price of $50 per computer connection—so that information can be disseminated to the widest possible audience. There were about 250 registrations for the first seminar.

As you may know, 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 Tuesday, March 31, 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. Douglas Greenhaus, NADA director of environment, health and safety, will facilitate 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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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. Visit www.nada.org/membership for more information or 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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Quotable
 
"We need to preserve a U.S. auto industry. ... it's important not just symbolically, it's important because the auto industry is a huge employer, not just the people who work for GM or Ford or Chrysler, but all the suppliers, all the ripple effects that are created as a consequence of our auto industry."

   
-- President Barack Obama, The Wall Street Journal, March 26


"By setting a fuel economy standard higher than what California regulators have proposed, the Obama administration today removed the last argument for state-by-state regulation of fuel economy." 

   
-- John McEleney, NADA chairman, NADA Newswire, March 27
Video Highlights
 

NADA-TV: New Mexico Dealer Testifies Before Senate Committee About Critical Need for Floorplan Loans

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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