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Friday, April 24, 2009 RSSSEND TO A FRIENDPRINT
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Top Stories
Autos Task Force to Consider SBA Loans for Dealers
Treasury Prepares Chrysler Bankruptcy as GM Nears Deadline Too
Fiat Chief Marchionne Sees 'No Reason' Chrysler Deal Will Fail
GM, Chrysler Pensions Raise Bankruptcy Stakes
Ford Loses $1.4 Billion in Quarter, but Beats Forecast
Car Trade-In Proponents Near a Deal
Top Stories
Autos Task Force to Consider SBA Loans for Dealers

A national auto dealers group said Thursday that President Obama's auto task force is considering extending loans usually reserved for small businesses to dealers, making it easier for them to borrow money to acquire showroom vehicles. According to NADA, which met with the task force Thursday morning, the government is considering ways to help dealers access money to buy cars to stock their lots. Frozen credit markets have yet to thaw since banks received TARP aid, said NADA chairman John McEleney, causing dealers continued difficulty in acquiring loans and staying afloat. "One of suggestions we made to the task force was to go to an employee-based size standard," said Andrew Koblenz, vice president of legal and regulatory affairs for NADA. "The mechanism they choose doesn't account for the fact that cars have gotten more expensive over time, but the returns don't get larger."
Source: The Associated Press

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Treasury Prepares Chrysler Bankruptcy as GM Nears Deadline Too

The U.S. Treasury Department is preparing a bankruptcy filing for Chrysler LLC only as a matter of “due diligence,” Michigan Senator Debbie Stabenow said in an interview. “They are preparing all options,” Stabenow, a Democrat, said yesterday in Washington. The senator said she was told April 22 the filing was being readied. Time is dwindling for Auburn Hills, Michigan-based Chrysler to reorganize outside of bankruptcy. It has until April 30 to seal an alliance with Italian automaker Fiat SpA, get its banks to agree to cut its debt and reach agreements with the United Auto Workers and Canadian Auto Workers unions on labor cost reductions. “This is very serious, we’re coming down to the deadline,” Stabenow said.
Source: Bloomberg

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Fiat Chief Marchionne Sees 'No Reason' Chrysler Deal Will Fail

Fiat SpA Chief Executive Officer Sergio Marchionne said Chrysler LLC still can accomplish restructuring actions before an April 30 deadline and form an alliance with his company. “I see no reason why this should not happen and confirm our unwavering commitment to getting this done,” Marchionne said in a call with analysts today. Chrysler must reach labor agreements with the Canadian Auto Workers and United Auto Workers unions in the next week and meet a government requirement for “extinguishing the vast majority” of its bank debt to avoid bankruptcy and qualify for $6 billion more in loans. Chrysler is trying to reduce its debt as the Treasury trades offers on the automaker’s behalf with a group of banks holding $6.9 billion in obligations.
Source: Bloomberg

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GM, Chrysler Pensions Raise Bankruptcy Stakes

WASHINGTON -- Bankruptcy at one of the major U.S. automakers would trigger immediate concern about pensions for almost 800,000 workers and retirees and raise the political and financial stakes of the Obama administration's bid to remake the industry. Demands for aggressive restructuring of General Motors Corp and Chrysler LLC by the administration's autos task force could push one or both companies into court within weeks. A Chapter 11 filing would raise the possibility of pension defaults, reduced benefits and long-term liabilities for the deficit-ridden government agency that insures them. "This is high politics," said Gary Chaison, a labor relations expert at Clark University. "There are too many workers involved. The social implications are too big. I think any type of bankruptcy would have to protect the collective bargaining agreement and the pensions."
Source: Reuters

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Ford Loses $1.4 Billion in Quarter, but Beats Forecast

DETROIT — The Ford Motor Company said on Friday that it lost $1.4 billion in the first quarter and that it did not plan to seek federal aid even as its two domestic rivals faced the possibility of bankruptcy. Ford, the only Detroit automaker not being kept afloat by the government, said it had $21.3 billion in cash as of March 31, after going through $3.7 billion of its automotive cash reserves in the quarter. That is better than the $5.5 billion it used in the fourth quarter, even though sales were lower from January to March. “Our results in the first quarter reflected the extremely difficult business environment and weak demand for autos around the world,” Ford’s chief executive, Alan R. Mulally, said in a statement.
Source: The New York Times

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Car Trade-In Proponents Near a Deal

Bills to provide government-funded discounts for trading in old cars for more-efficient models got a boost Thursday when a leading proponent signaled she may drop a provision limiting the subsidies to North American-made vehicles.  Rep. Betty Sutton (D.,Ohio), who has pushed to limit the discounts to vehicles manufactured in North America, indicated she is willing to budge on that requirement and others. The provision has been a main sticking point in congressional efforts to merge competing proposals for the program. "It's not so important to me that it has to be done" exactly according to her bill, but rather that a program is passed, Ms. Sutton said.  Congressional aides are redoubling efforts on compromise legislation for a "cash-for-clunkers" program that could clear both houses of Congress within months. Proponents say the program, which would provide new-car discounts of $1,500 to $5,500 and would allow vouchers to be used on mass transit, depending on the proposal, is desperately needed to lift slumping car sales.  Even if a compromise is reached, lawmakers still must find funding for the program. Some have suggested that the money would come from the economic stimulus package passed earlier this year.
Source: The Wall Street Journal

[Editor's Note: Important details including total budget, program duration, age of older vehicles, criteria for new vehicles and specific incentive amounts have yet to be resolved. NADA recognizes the significant economic benefit for dealers and their communities that could result from passage of a Cash for Clunkers program. NADA lobbyists are meeting with Congressional leaders to ensure that dealers are paid promptly from the federal government and that any incentive program is available for all automobile manufacturers. Once passed by the House, the bill will have to pass the Senate as well before going to President Obama to be signed into law.]

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Quotable
 
"There are a lot of departments of government involved, but the task force agrees with dealers that credit is a significant problem."

   
-- John McEleney, NADA chairman, says the government is considering ways to help dealers access money to buy cars to stock their lots, The Associated Press, April 23
Video Highlights
 

NADA Takes Action to Ensure the Availability of Floor Plan Credit
(NADA-TV)


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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