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Tuesday, May 5, 2009 RSSSEND TO A FRIENDPRINT
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Top 10 Stories
You Can't Help Detroit if You Hurt the Dealers
Chrysler Ads Promote Confidence
Chrysler Receives Court Approval for Payments to Dealers, Suppliers
Chrysler's Filing Means New Worries for Dealers
Chrysler Says 35 to 40 Dealers Close a Month on Sales
Roger Penske Is Possible Buyer For Saturn Unit
Toyota Eases North America Cuts as Auto-Market Slump Stabilizes
Bipartisan Resolution in Congress Urges Preservation of Single National Fuel Economy Standard
Preparing for the Worst: Webinar on Bankruptcy Offered to Dealers
Dealer System Providers Phone Survey Begins This Week
Top 10 Stories
You Can't Help Detroit if You Hurt the Dealers
By Mack McLarty

The auto industry needs a viable plan for long-term, durable success as the [Obama] administration strives to revitalize our nation's economy.  ... [auto] dealers are automakers' only customers. Dealers buy cars and trucks from manufacturers; consumers buy from dealers, who spend billions annually advertising the vehicles they sell, plus more than $300 million to train sales personnel -- all at no cost to the automakers. The franchised automobile dealer is one of America's strongest engines of economic development. U.S. auto dealers have invested more than $200 billion in their businesses. They employ and train more than a million people in communities nationwide and pay billions in annual state and local taxes. We need a careful approach to streamlining the dealer network, not abrupt, forced closures. Strong dealer networks are not a burden to the auto industry; they are its lifeline. Indeed, dealers and their employees are part of the solid foundation that President Obama spoke of recently -- the rock upon which all Americans must work together to rebuild our economic future. An improvident resolution could jeopardize all that.
Source: The Washington Post

[Editor's Note: The writer is chairman of the RLJ-McLarty-Landers Automotive Group and former White House chief of staff during the Clinton administration.]

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Chrysler Ads Promote Confidence

Troubled Auto Maker Seeks to Reassure Customers With Marketing Blitz
Chrysler LLC is preparing to launch a marketing campaign to reassure customers and potential buyers that the auto maker is still alive and expects to bounce back from its bankruptcy filing. Print and TV ads are expected to break as soon as Monday using the tagline, "We're building a better car company....Come see what we're building for you," according to dealers. "We want to establish a level of trust and confidence that customers can still buy cars and trucks from us and it's business as usual," [Chrysler sales and marketing chief Steve Landry] said. "We are working to exit bankruptcy as fast as we can."
Source: The Wall Street Journal

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Chrysler Receives Court Approval for Payments to Dealers, Suppliers

NEW YORK -- Chrysler LLC received bankruptcy court approval for $4.6 billion in debtor-in-possession financing [Monday] to make payments to dealers and suppliers and to buy time to complete an alliance with Fiat S.p.A. ... $753 million will go to Chrysler dealers to pay for sales incentives owed them for vehicle sales before the bankruptcy filing. Chrysler said it will "only pay incentives to those dealers that they believe have value to the acquiring company," to be controlled by Fiat.
Source: Automotive News

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Chrysler's Filing Means New Worries for Dealers

Chrysler’s bankruptcy filing on Thursday wasn’t a surprise, of course. But the bankruptcy brings additional worries. [Dealers] wonder, for example, what will happen to the excess inventory from shuttered dealers ... Another worry: financing. GMAC ... will take over Chrysler’s dealer financing under the bankruptcy plan, but that doesn’t mean it will extend all existing loans. “We’re all going to have to reapply for the floor lines with GMAC,” said Dale Early, owner of Deerbrook Forest Chrysler Jeep. “If they were going to just accept the agreements we had with Chrysler Financial, I don’t think there would be as much angst."
Source: The Houston Chronicle

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Chrysler Says 35 to 40 Dealers Close a Month on Sales

Chrysler LLC, attempting to sell most of its assets to a company controlled by Fiat SpA, said 35 to 40 dealers are closing a month as a result of low sales. Chrysler is seeking to pay its dealers $753 million over nine weeks for incentives owed to them ... A Chrysler failure to make the payments may put dealerships out of business. “A lot of guys just can’t make it,” if they don’t get the payment, said Jim Arrigo, owner of Arrigo Dodge Chrysler Jeep in West Palm Beach, in court testimony.
Source: Bloomberg

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Roger Penske Is Possible Buyer For Saturn Unit

Roger Penske, owner of the second-largest U.S. auto retail chain by revenue, has emerged as a potential buyer for General Motors Corp.'s Saturn brand ... GM on Monday said it hired Stephen Girsky, a former Morgan Stanley analyst and one-time adviser to departed Chief Executive Rick Wagoner, to review offers from potential buyers. The auto maker ... is working to sell Saturn, along with its Hummer and Saab brands ...
Source: The Wall Street Journal

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Toyota Eases North America Cuts as Auto-Market Slump Stabilizes

Toyota Motor Corp., having reduced North American output about half this year, will ease cuts in Camry and RAV4 sport-utility-vehicle production in anticipation of a market slump stabilizing. Toyota may boost Camry and RAV4 production until at least July as inventories run low following output cuts, Bob Carter, vice president of Toyota’s U.S. sales, said in a May 1 conference call.
Source: Bloomberg

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Bipartisan Resolution in Congress Urges Preservation of Single National Fuel Economy Standard

NADA: Representatives Bright and Terry Recognize Flaws in State-Based Programs
WASHINGTON – A single, national fuel economy standard for passenger cars and light trucks will do more to reduce fuel consumption and greenhouse gases than the 14 separate programs sought by California and other states, lawmakers outlined [Friday] in a resolution. The resolution, introduced by Reps. Bobby Bright, D-Ala., and Lee Terry, R-Neb., supports maintaining a single, national fuel economy standard ...
Source: NADA Newswire

[Editor's Note: The Obama administration is required by law to make a final determination on the California fuel economy program by June 30. It's important for dealers to call their representatives and urge them to cosponsor H. Con. Res. 106, the Bright-Terry "Single, National Fuel Economy Resolution." Members of the House can be reached at (202) 225-3121. Additional information is available at www.NADA.org/patchwork.]

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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. EST. The presenters will discuss general bankruptcy concepts and procedures and how they apply in a manufacturer bankruptcy or in any filing that a dealer may have to make. They will also discuss how applicable franchise statutes will operate with the federal bankruptcy laws, and they will address such issues as continuing dealer rights to incentive and warranty payments, the open account balance, the impact on vehicle and parts inventories and floorplan provider concerns. 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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Dealer System Providers Phone Survey Begins This Week

This week NADA provides dealers with an opportunity to assess the computer-related products and services used in the dealership. Representatives of Friedman-Swift, a market research company conducting the survey on behalf of NADA, will randomly call dealers to learn their satisfaction with their dealer system providers (DSP) products and services. Members' participation in the short survey will enable NADA to provide its members with invaluable information regarding their satisfaction with the DSP vendors’ performance. "Our members' opinions are important now more than ever," says Jim Waldron, chairman of NADA's Information Technology Committee. "And we appreciate their participation."

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Quotable
 
"The vast majority of auto dealers are cornerstones of their communities... Who will fill the void if these hardworking, dedicated, locally focused entrepreneurs are obliged to shut down?"

   
-- Mack McLarty, chairman of the RLJ-McLarty-Landers Automotive Group and former White House chief of staff during the Clinton administration, The Washington Post, April 30


"We want to establish a level of trust and confidence that customers can still buy cars and trucks from us and it's business as usual. We are working to exit bankruptcy as fast as we can."

   
-- Steve Landry, Chrysler sales and marketing chief, on the new ad campaign, The Wall Street Journal, May 4


"Congressmen Bright and Terry understand that a single, national standard is better for America than a patchwork of more than a dozen different fuel economy regulations. We applaud their leadership and understanding of the auto industry's need for regulatory certainty during difficult economic times."

   
-- NADA Chairman John McEleney, on the resolution introduced by Reps. Bobby Bright, D-Ala., and Lee Terry, R-Neb., supporting a single, national fuel economy standard, NADA Newswire, May 1

Video Highlights
 
 
NADA on Floorplan Credit Crisis (NADA-TV)

  
NADA and the Obama Auto Task Force (PBS)



NADA: Legislative Options for Floorplan and Retail Credit (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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