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Wednesday, April 29, 2009 RSSSEND TO A FRIENDPRINT
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Top Stories
GM Dealers Urge 'Proper' Treatment in Consolidation
GM Plans to Eliminate as Many as 1,200 Auto Outlets
NADA Meets with the Chairman of Obama's Economic Recovery Advisory Board
Chrysler on Brink of Securing a Fiat Deal
Dealers Fear 130,000 Job Cuts
NADA Asks GM Dealers to Fund Legal Counsel on Bankruptcy Issues
GM Plans to Sell Saturn This Year, 2 Years Early
Preparing for the Worst: Webinar on Bankruptcy Offered to Dealers
Top Stories
GM Dealers Urge 'Proper' Treatment in Consolidation

DETROIT -- U.S. dealer representatives urged General Motors Corp on Tuesday to offer "proper compensation" in its plan to eliminate more than 40 percent of its U.S. dealers in less than two years. "It is imperative that GM treat all of the dealers fairly and equitably and that they be properly compensated," NADA Chairman John McEleney said in a statement. "After all, it's not out of any fault of their own that these dealers are being forced to close their businesses," he said. The dealer group said closing 2,641 dealerships would cost GM an estimated $35 billion in lost revenue.
Source: Reuters

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GM Plans to Eliminate as Many as 1,200 Auto Outlets

General Motors Corp. ... will begin notifying outlets the automaker plans to eliminate by May 11, the company told dealers [Tuesday] in a video conference call. The Detroit-based automaker told dealers it is targeting 1,000 to 1,200 underperforming outlets and will cut more than 450 stores with the ending of the Pontiac, Saturn, Hummer and Saab brands ... “We feel a strong sense of disappointment that GM has, for whatever reason, decided to accelerate dealer consolidation in such a drastic way,” [NADA Chairman John] McEleney said in a statement.
Source: Bloomberg

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NADA Meets with the Chairman of Obama's Economic Recovery Advisory Board

NEW YORK – Representatives from the National Automobile Dealers Association met Monday with the chairman of President Obama’s newly created Economic Recovery Advisory Board to emphasize that drastically reducing the dealer network is not the most effective path to automaker viability.

During the meeting with Paul Volcker, chairman of the President’s Economic Recovery Advisory Board, the NADA team also stressed that increasing auto sales and restoring floorplan credit are essential for a national economic recovery to occur.

Finally, NADA officials told Volcker, the former chairman of Federal Reserve Board, that bankruptcy would not work. A General Motors or Chrysler bankruptcy could create more problems in the credit markets, both at the wholesale and retail levels, NADA said.

Volcker was appointed to the economic advisory board in Nov. 2008. The board is charged with offering independent advice to the President as he formulates and implements plans for an economic recovery. Volcker served as head of the central bank from 1979 to 1987.
Source: NADA Newswire

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Chrysler on Brink of Securing a Fiat Deal

But bankruptcy still possible
With just two days to go, Chrysler LLC is within striking distance of a lifesaving partnership with Fiat SpA -- after Chrysler and the Obama administration reached a debt-reduction deal Tuesday with major creditors and UAW members began voting on new cost cuts. But even with that progress, a Chrysler bankruptcy remains a strong possibility just after a Thursday deadline. If just one of the 46 debt-holders balks at the deal ... the government will push Chrysler through a quick surgical bankruptcy.
Source: Detroit Free Press

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Dealers Fear 130,000 Job Cuts

More than 130,000 employees at General Motors' US dealerships are set to lose their jobs over the next 18 months as the beleaguered carmaker implements plans to shrink its distribution network. The plan, which involves culling 2,600 outlets, could cause heavy job losses at a swath of local dealership suppliers, from advertising agencies to cleaning services, according to the National [Automobile Dealers Association], which expressed "a strong sense of disappointment" at GM's decision. The GM closures mark "quite an abrupt change," says John McEleney, chairman of the dealers association. Mr. McEleney, who owns two GM dealerships in Iowa, added that "we are concerned that it will be disorderly to happen that quickly."
Source: Financial Times

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NADA Asks GM Dealers to Fund Legal Counsel on Bankruptcy Issues

Chrysler retailers get similar request
NADA, with the GM National Dealer Council, sent retailers a memo April 24 asking them to sign an agreement to hire lawyers and contribute $2,000 for each of their GM stores. NADA said "it is critically important" that dealers have legal advisers with expertise in bankruptcy and corporate restructuring." "If GM were to file, its bankruptcy would almost certainly be one of the largest and most complex corporate reorganizations in the nation's history," the memo to its dealers said.
Source: Automotive News

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GM Plans to Sell Saturn This Year, 2 Years Early

DETROIT — General Motors Corp.'s Saturn brand will either be sold or phased out by the end of this year, nearly two years faster than previously announced, the brand's top executive said Tuesday. Saturn General Manager Jill Lajdziak said the brand ... most likely will be sold, given the interest of several buyers who have surfaced. She says GM will take other bids for the brand until June 1. "We remain confident given the expressions of interest we've already had," she said.
Source: The Associated Press

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Preparing for the Worst: Webinar on Bankruptcy Offered to Dealers

“Bankruptcy in the Automobile Industry: It Never Hurts to be Prepared” will be presented by attorneys Michael G. Charapp and Jason Gold on Tuesday, May 12 from 1-3 p.m. Eastern Time. The Webinar will arm dealers with information they’ll need to protect themselves and their dealerships if the troubled manufacturers are unable to restructure without bankruptcy. The Webinar is offered at a discounted fee of $50 per computer connection. Register online or call (800) 252-6232, ext. 2.
Source: NADA Newswire

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Quotable
 
"It is imperative that GM treat all of the dealers fairly and equitably and that they be properly compensated. After all, it's not out of any fault of their own that these dealers are being forced to close their businesses."

   
-- John McEleney, NADA chairman, in response to GM's plans to cut its network of dealers almost in half, Reuters, April 29


"It is critically important that dealers have legal advisers with expertise in bankruptcy and corporate restructuring. If GM were to file, its bankruptcy would almost certainly be one of the largest and most complex corporate reorganizations in the nation's history."

   
-- NADA, in a memo asking GM and Chrysler dealers to contribute to a legal fund to protect their interests if either automaker files for bankruptcy, Automotive News, April 28

Video Highlights
 
 
NADA: Legislative Options for Floorplan and Retail Credit (NADA-TV)

  
NADA and the Obama Auto Task Force (PBS)



NADA on Floorplan Credit Crisis (NADA-TV)



GM Bankruptcy Not Inevitable (msnbc.com)


 
Senate Testimony on Floorplan Loans (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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