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Wednesday, May 6, 2009 RSSSEND TO A FRIENDPRINT
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Top 10 Stories
GM Moves Ahead With Dealer Cuts; NADA Rallies to Block Plan
Chrysler Sifts Its Dealer Network
Dealers Seek Eased Access to Federal TALF Program
Credit Unions Look to Meet Dealers' Floorplan Needs
U.S. Makes More Businesses Eligible for Loans
House Dems Reach 'Cash-for-Clunkers' Deal
New Chrysler Auto Incentives Delayed
Ford Invests $550 Million to Shift SUV Plant to Cars
Nissan Said to Be Possible Partner for Penske in Saturn Venture
Preparing for the Worst: Webinar on Bankruptcy Offered to Dealers
Top 10 Stories
GM Moves Ahead With Dealer Cuts; NADA Rallies to Block Plan

WASHINGTON -- General Motors has started to notify 2,600 dealers of plans to eliminate them, and a dealers group is trying to block the effort by getting elected officials to intervene. National Automobile Dealers Association members will be contacting their congressmen, mayors and governors in an attempt to get them to intercede with the White House, said NADA chairman John McEleney. "It's too abrupt and drastic," McEleney said in an interview. "The concern is in every community across the country. Dealers are one of the principal sources of employment, charitable contributions and tax revenue." Its members also plan to meet with the editorial boards of local newspapers across the country in an attempt to influence public opinion, McEleney said.
Source: Automotive News

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Chrysler Sifts Its Dealer Network

Auto Maker Studies Condition of Its About 3,200 Sales Outlets, Seeking to Get Rid of Hundreds of Them
Chrysler LLC told a select group of dealers that it is weighing the strengths and weaknesses of its roughly 3,200 dealerships, as it tries to prune several hundred of them from its sales network. In a meeting with the company's national dealer council ... Chrysler executives said the auto maker is reviewing each dealership's location, the condition of its facility, finances and sales to determine which are the strongest and most desirable ...
Source: The Wall Street Journal

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Dealers Seek Eased Access to Federal TALF Program

WASHINGTON — Auto lenders pressed the Obama administration Tuesday to modify one of its major loan programs, saying certain requirements have prevented money from flowing to the nation's struggling car dealers. Auto finance companies have had limited access to funds from the Term Asset-Backed Securities Loan Facility, or TALF, because of credit-ratings requirements, according to the [American Financial Services Association]. "Without changes, the auto finance industry's ability to use TALF to generate funding will remain limited," Chris Stinebert, the financial-services association's president and chief executive, said in a letter to Steven Rattner, President Barack Obama's top auto-industry adviser.
Source: Dow Jones Newswires

[Editor's Note: AFSA's work on this issue supplements what NADA is doing on its own and in collaboration with AFSA. In previous meetings with the auto task force, NADA has presented many of the same arguments in support of easing credit-ratings criteria to restore money flowing to struggling auto dealers.]

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Credit Unions Look to Meet Dealers' Floorplan Needs

Some credit unions view the floorplan crisis as an opportunity to expand their automotive finance portfolios so they are seeking ways to meet dealers' commercial lending needs. Federal law caps credit unions' commercial loans at 12.25 percent of their assets ... Credit unions and dealers are lobbying Congress to remove the cap on commercial lending.
Source: Automotive News

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U.S. Makes More Businesses Eligible for Loans

WASHINGTON -- The Obama administration will allow about 70,000 more firms to apply for small business loans guaranteed by the government by temporarily raising size limits for the program, government officials said on Friday. No more than 25 percent of the 19,000 U.S. franchised dealerships were small enough to access the SBA program under the old standard, but the change will allow more than 50 percent to qualify, said Doug Greenhaus, director environment, health and safety with National Auto Dealers Association.
Source: Reuters

[Editor's Note: For information on how to apply for a SBA loan, click here.]

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House Dems Reach 'Cash-for-Clunkers' Deal

WASHINGTON -- House Democrats have reached an agreement on a "cash-for-clunkers" bill that could perk up anemic auto sales. The agreement ends lengthy negotiations between auto-state lawmakers, who sought a bill that would give a maximum boost to sales, and other Democrats who wanted the bill to maximize improvements in the fuel efficiency of autos on the road. Rep. John Dingell said in a written statement that the deal would limit the incentives to buyers trading in cars that got 18 mpg or less, with an escalating cash reward depending on mileage of the new vehicle.
Source: The Detroit News 

[Editor's Note: NADA has been working closely with Congress on this issue and is urging legislators to broaden the number of vehicles that qualify. NADA is also seeking to ensure an efficient payment mechanism for dealer reimbursement under the program. While few details on the compromise are available, the agreement indicates that Congress understands the immediate need to boost auto sales, help the auto industry and improve the nation’s economy.]

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New Chrysler Auto Incentives Delayed

Bankrupt automaker was expected to unveil a new program to get buyers to sign on the dotted line Tuesday but now says announcement of the program is delayed.
NEW YORK -- Chrysler has delayed the introduction of a new incentive program intended to boost sales, citing the need for more time to communicate with dealers. The plan is now expected early Wednesday, a day later than initially expected. Meanwhile, Chrysler's current "Employee Pricing Plus Plus" incentive program will be extended.
Source: CNNMoney.com

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Ford Invests $550 Million to Shift SUV Plant to Cars

Ford Motor Co. said it’s investing $550 million to convert a Michigan sport-utility vehicle factory to build the Focus small car and a battery-powered version that will be the company’s first all-electric auto. “This is about investing in modern, efficient and flexible American manufacturing,” Chief Executive Officer Alan Mulally said in the statement before a ceremony at the facility today in Wayne, Michigan.
Source: Bloomberg

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Nissan Said to Be Possible Partner for Penske in Saturn Venture

The idea is that Nissan, its affiliate Renault SA or another automaker may make Saturn-brand vehicles for a new venture that could be operated by Penske and distributed through Saturn’s retail network ... “We’ve looked at Saturn,” Chief Executive Officer Roger Penske said May 4 in an interview. “We look at a lot of opportunities. It would be premature to say we’re anywhere close to a deal.”
Source: Bloomberg

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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. 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
 
"The concern is in every community across the country. Dealers are one of the principal sources of employment, charitable contributions and tax revenue. I don't see how the cutbacks do anything in the short term for Chrysler or GM."

   
-- NADA Chairman John McEleney, on plans by GM and Chrysler to drastically reduce their dealer networks, Automotive News, May 5


"Every dealer is a part of our Main Street business communities. We want to keep them in the community. Support for them is critical."

   
-- Henry Wirz, CEO of SAFE Credit Union, commenting on how credit unions are seeking ways to restore dealer floorplan needs, Automotive News, May 4


"This is about investing in modern, efficient and flexible American manufacturing."

   
-- Ford CEO Alan Mulally, referring to The Michigan Assembly Plant, which will be converted from a SUV factory to build the Focus and a battery-powered version, Bloomberg, May 6

Video Highlights
 
 
NADA on Cash for Clunkers (NADA-TV)

 
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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