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Monday, April 20, 2009 RSSSEND TO A FRIENDPRINT
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Top 10 Stories
Credit Crisis Is Closing GM, Chrysler Stores at a Fast Clip
GM Bankruptcy Risk Grows
Bankruptcy Fears Rattle Dealers
GM Exec Says 1,600 Will Lose Jobs in Next Few Days
Auto Task Force to Confer with Big Three Salaried Retirees
Fiat Chief Attending Detroit, Washington Meetings
Used-Car Sales Accelerate
Car-Dealing Family Driven to Succeed
Opinion: Temporary Federal Sales Incentive for New Cars Could Help Struggling Auto Industry
International LoneStar Named 'ATD Commercial Truck of the Year'
Top 10 Stories
Credit Crisis Is Closing GM, Chrysler Stores at a Fast Clip

DETROIT — The credit crisis and other financial problems are accelerating General Motors and Chrysler LLC dealership closings. Before the credit crisis, GM and Chrysler were encouraging dealers to consolidate as the automakers sought fewer but stronger dealerships. The crisis is speeding this process but also is hurting sales when the automakers desperately need revenue. This year GM has lost 165 dealerships, Mark LaNeve, GM North America vice president of vehicle sales, service and marketing, told Automotive News last week. "Normal attrition is about 175 to 200 for a full year, so we're at a much higher acceleration," he said. Steven Landry, Chrysler's executive vice president of sales and marketing, said 35 dealerships closed in March. In early 2008, about 20 dealerships were closing a month, the company said.
Source: Automotive News

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GM Bankruptcy Risk Grows

CEO says Chapter 11 'more probable,' but not preferred
Bankruptcy is a probable but not preferred path to a new General Motors Corp. as it struggles to wrest concessions from key stakeholders and prepares to eliminate more jobs and factories. GM President and CEO Fritz Henderson on Friday said the automaker, which needs $4.6 billion more in federal aid during the second quarter to keep operating, is pushing forward with a sweeping restructuring while also preparing for a possible bankruptcy. "I felt several weeks ago that it would be more probable that we would need to go through a bankruptcy process," Henderson said. "That continues today. But I wouldn't be able to hazard a guess as to what the probabilities would be."
Source: The Detroit News

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Bankruptcy Fears Rattle Dealers

Retailers get ready for GM and Chrysler filings
DETROIT — The growing likelihood that General Motors and Chrysler LLC will land in Bankruptcy Court has sent a wave of fear through U.S. auto dealers. Many GM and Chrysler dealers are protecting themselves by cutting inventory and factory orders. GM and Chrysler desperately need orders, but dealers are holding back because the automakers are in such bad shape. Dealers also are speeding up reimbursement requests to the automakers on warranty work and cash rebates for fear that the money could be tied up in court. And some are spending advertising money from the factories for the same reason.
Source: Automotive News

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GM Exec Says 1,600 Will Lose Jobs in Next Few Days

About 1,600 white-collar workers at General Motors Corp. will lose their jobs in the next few days as the troubled automaker accelerates cost cuts in order to qualify for more government aid. GM North America President Troy Clarke said Monday in an e-mail to employees that the layoffs are needed to ensure the company's long-term viability. "In these unprecedented times, GM is reinventing every aspect of our business, including our organizational size and structure, to create a lean and agile company," Clarke wrote in the e-mail obtained by The Associated Press. Hardest hit will be the Detroit metropolitan area, especially at GM's downtown headquarters and its sprawling technical center in suburban Warren, where the company does much of its engineering and design work.
Source: The Associated Press

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Auto Task Force to Confer with Big Three Salaried Retirees

The Obama administration plans to talk with the leaders of a group representing 200,000 salaried retirees at Detroit's Big Three automakers this week -- as crucial deadlines loom for Chrysler LLC and General Motors Corp. An administration official said Sunday that it wasn't clear if the meeting would occur in person in Washington or by phone but that the Obama auto task force wanted to hear the concerns of salaried retirees. Retirees are deeply worried about the fate of their pensions, supplemental payments and health care benefits in the event that either GM or Chrysler files for bankruptcy.
Source: The Detroit News

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Fiat Chief Attending Detroit, Washington Meetings

Fiat SpA Chief Executive Officer Sergio Marchionne is traveling to the U.S. today for meetings in Detroit and Washington, a Fiat spokesman said. Chrysler LLC has until April 30 to strike a deal with Fiat for a partnership or it won’t get additional U.S. aid and may file for bankruptcy protection. Chrysler may get as much as $6 billion in aid more if the Fiat alliance is concluded.
Source: Bloomberg

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Used-Car Sales Accelerate

Vehicles are still moving off the lot, but not in a way Paul Kastner has seen in more than 35 years with Weber Chevrolet [in St. Louis, Mo.]. For every two new cars sold at the Creve Coeur [Mo.] dealership, three used ones are moved, too. It's a stark difference from just a year ago, when about four new vehicles sold for every used one. U.S. used vehicle sales among franchised auto dealers are on pace to reach about 14 million vehicles this year, according to CNW Research in Bandon, Ore. That's slightly lower than before the recession, but more than 2008's level. And this year, unlike recent years, current projections suggest that franchise dealerships should expect higher sales of used vehicles than of new ones.
Source: St. Louis Post-Dispatch

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Car-Dealing Family Driven to Succeed

Car sales plunged during the 1973 oil embargo when people lined up to buy gas. They fell again in 1981 when interest rates rose to 20 percent. But nothing compares to this downturn, said H. Carter Myers III, president and chief executive officer of Carter Myers Automotive, a family-owned business. "I've been active in the business for 44 years and never seen anything as challenging as this." The company is parent to five dealerships and 12 franchises in the Richmond and Charlottesville area. Myers took over when the company had two dealerships - Ford and Honda. Founded in Petersburg in 1924, when Model Ts were selling for about $300, the dealership made it through the Great Depression and World War II under the guidance of Myers' grandfather and his father. It is poised to survive again - and to grow. "I listened to my father talk about the Great Depression," Myers said. "He always said you better make sure you have enough cash. Don't get too heavily in debt."
Source: Richmond Times-Dispatch (Va.)

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Opinion: Temporary Federal Sales Incentive for New Cars Could Help Struggling Auto Industry

Detroit automakers and the entire auto industry are suffering a severe decline in sales. A well-crafted federal incentive could help the Detroit automakers survive. What the auto industry needs is an increase in sales volume. Congress earlier considered a tax credit for auto sales, but left it out of federal stimulus legislation, contenting itself with a sales tax credit. Now, several bills are floating around Congress that would provide new car buyers with cash incentives. Some of these come under the heading of "cash for clunkers," in which owners of older, low mileage, pollution-prone vehicles would get cash for buying new, high-mileage cars. A temporary sales incentive follows the same logic. It won't solve all the problems of the Detroit automakers, but it could help when help is most needed.
Source: The Detroit News

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International LoneStar Named 'ATD Commercial Truck of the Year'

Memphis Truck Dealer Richard Sweebe Named '2009 Truck Dealer of the Year'
WASHINGTON – American Truck Dealers (ATD) named the International LoneStar the first “ATD Commercial Truck of the Year.” The announcement was made Sunday during the ATD Convention & Exposition in Washington, D.C. LoneStar was one of five nominees for the new award. The other nominees were: Freightliner Cascadia, Kenworth T660, Mack Titan and Peterbilt Model 386. Richard Sweebe, president and CEO of Diamond Companies in Memphis, Tenn., won the “Truck Dealer of the Year Award,” sponsored jointly by Heavy Duty Trucking magazine and ATD. For more information, visit www.atd.org.
Source: ATD Newswire

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Quotable
 
"We're working diligently to reduce inventory, new and used. We're doing what's in the best interest for the dealership now and not necessarily for the manufacturer."

   
-- Chris Haydocy, a GM dealer in central Ohio, referring to the growing possibility of bankruptcy, Automotive News, April 20


"Dealership terminations have increased 35 percent in the last six months due to stress in the financial markets."

    -- Steven Landry, Chrysler's executive vice president of sales and marketing, Automotive News, April 20


"Many years ago, there were 50,000 U.S. dealers and now we are down to about 20,000 and it will probably go down to 15,000 within three years."

   
-- H. Carter Myers III, president and chief executive officer of Carter Myers Automotive, Richmond Times-Dispatch, April 20
 


"I'm more than worried about it. None of this is any fun, and it's tough to see hardworking dealers go out of business."

    -- Mark LaNeve, GM North America vice president of vehicle sales, service and marketing, says GM can't prosper if dealers are suffering, Automotive News, April 20


"My dad bought this dealership in the early '80s, and I washed cars for him. He's had it for 30 years. This is my retirement, and it's gone." 

    -- A GM dealer who declined to be identified, Automotive News, April 20

Video Highlights
 
 
GM Bankruptcy Not Inevitable (msnbc.com)

 
Senate Testimony on Floorplan Loans (NADA-TV)



NADA and the Obama Auto Task Force  (NADA-TV)


 
Banks Turning on American Car Dealers? (WTNH-TV)


 
EPA Hearing on Fuel Economy (NADA-TV) 


 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 video reports.

 
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