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Thursday, May 7, 2009 RSSSEND TO A FRIENDPRINT
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Top 10 Stories
NADA Launches Ad Campaign Against Drastic Dealer Cuts
Commentary: Closing Dealerships Won't Save Automakers
Chrysler Dealers Worry About Their Survival
Chrysler Starts Dealer Payments
GM Loss Beats Estimates as Bankruptcy Deadline Nears
GMAC Extends Suspension of Curtailment Payments Through May
Detroit's Troubles Lure World of Bidders
Porsche, Volkswagen Announce Merger Plan
Buy a Car, Get a Gift From the City
Preparing for the Worst: Webinar on Bankruptcy Offered to Dealers
Top 10 Stories
NADA Launches Ad Campaign Against Drastic Dealer Cuts

WASHINGTON – The National Automobile Dealers Association has created an ad campaign in the form of an open letter from NADA Chairman John McEleney to President Obama questioning why his auto task force is demanding drastic cuts in the number of U.S. dealers.

“Cutting dealers at this time would do absolutely nothing to make either GM or Chrysler more viable,” the letter states. “The idea that dealer numbers should be rapidly and drastically reduced apparently comes from Wall Street advisers.

“Mr. President, we urge you to choose Main Street over Wall Street.”

Full-page print ads are scheduled to run in the Washington Post, Politico and Automotive News. NADA is also organizing a dealer fly-in so dealers can meet with members of Congress on May 13. NADA officials are also scheduled to meet with the President’s auto task force on May 14.

The opening sentence of the letter, “Mr. President, you said you would stand with America’s auto dealers,” draws on remarks made by the President during the April 30 announcement of Chrysler’s bankruptcy at the White House.

“It makes no sense for an automaker to radically cut its dealer network,” says McEleney, a GM, Toyota and Hyundai dealer in Iowa. “Manufacturers need revenue, and the only way to get it is to sell more cars to dealers.

“In other words, dealers equal revenue for their manufacturers,” McEleney added. “A radical reduction of dealers would put 150,000 Main Street Americans out of work and cut state and local government auto sales tax revenue by millions of dollars.”

Click here for the print ad.
Source: NADA Newswire

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Commentary: Closing Dealerships Won't Save Automakers
By Tim Doran

I am extremely puzzled by the dealership cutbacks considered a solution to problems facing the auto industry in general and specifically to General Motors. ... what will it do to save GM? Nothing. Closing dealerships won't affect the bottom line for any manufacturer positively but will negatively affect thousands of independent businesses, their employees, their customers who rely on them for sales and service and the communities that rely on those dealerships.
Source: Automotive News

[Editor's Note: Tim Doran is president of the Ohio Automobile Dealers Association and chairman of the Automotive Trade Association Executives.]

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Chrysler Dealers Worry About Their Survival

New incentives may help automaker weather bankruptcy, but some sellers will be terminated
New incentives Chrysler LLC announced Wednesday should help sustain sales during bankruptcy, but dealers are more worried about whether they will be around to offer them. "Incentives are great," said Tammy Darvish, vice president of DARCARS Automotive Group in Silver Spring, Md. "But are we going to get them if we're on the list to be terminated?" she asked, referring to Chrysler's plan to cut dealers ...
Source: The Detroit News

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Chrysler Starts Dealer Payments

Some of the Auto Maker's Outlets Say They Have Yet to Receive the Funds
Chrysler LLC on Wednesday began paying some of the hundreds of millions of dollars it owes its dealers, although some said they hadn't yet received payments. Lynn Blevins, who with his brother owns two Chrysler franchises in New York state, one in Ogdensburg and another in Gouverneur, said on Wednesday that the Gouverneur store hasn't yet received the $40,000 to $50,000 it is owed. "Absolutely it's a big concern out there for dealers," Mr. Blevins said. "I know one thing for sure -- we're not in control of that situation anymore."
Source: The Wall Street Journal

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GM Loss Beats Estimates as Bankruptcy Deadline Nears

General Motors Corp. posted a $5.9 billion adjusted loss that was narrower than analysts’ estimates as it pressed stakeholders to forgive $44 billion in debt before a U.S.-imposed June 1 bankruptcy deadline. “The first-quarter results reinforce the plan we announced at the end of April to bring our cost structure down aggressively,” Chief Financial Officer Ray Young told reporters today at GM’s Detroit headquarters.
Source: Bloomberg

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GMAC Extends Suspension of Curtailment Payments Through May

DETROIT -- GMAC Financial Services is extending through May a policy that allows dealers to avoid making certain payments on aging inventory. "That's one of our means to help alleviate stress on dealers while they also reduce their inventory on aging vehicles," said Sue Mallino, a GMAC spokeswoman. A curtailment is a payment dealers must make on old inventory.
Source: Automotive News

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Detroit's Troubles Lure World of Bidders

French auto maker Renault SA has opened discussions about possibly supplying cars to be sold through GM's Saturn dealers ... Separately, China's Geely Automobile Holdings Ltd. has submitted a bid to acquire GM's Saab unit, Geely said Thursday. "The industry is shuffling the automotive deck as we speak," said Michael Robinet, a vice president at CSM Worldwide ... "The industry that comes out of it is going to be substantially different than the industry we saw five years ago."
Source: The Wall Street Journal

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Porsche, Volkswagen Announce Merger Plan

BERLIN – Luxury car maker Porsche and Europe's biggest auto producer Volkswagen agreed on Wednesday to forge a merged German car giant, stepping up the momentous changes shaking the industry worldwide. Porsche, which had been seeking to take control of Volkswagen, said in a statement that the decision came after weeks of what Porsche called "intensive talks."
Source: Agence France-Presse

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Buy a Car, Get a Gift From the City

Buyers of new cars from dealers in the Central Valley city of Tracy, [Calif.,] will get something extra when they sign the deal – a $500 gift card courtesy of the city. The city has appropriated more than $600,000 for 800 gift cards, useable at stores in Tracy or anywhere else. City officials say the gift card idea is justified by the amount of money that new car sales taxes pour into the city budget – as much as 20 percent in recent years.
Source: Central Valley Business Times (Stockton, Calif.)

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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
 
"Mr. President, we urge you to choose Main Street over Wall Street."

   
-- NADA Chairman John McEleney, in an open letter to President Obama, which is part of an ad campaign against drastic cuts in the number of U.S. dealers, May 7


"Closing dealerships won't affect the bottom line for any manufacturer positively but will negatively affect thousands of independent businesses, their employees, their customers who rely on them for sales and service and the communities that rely on those dealerships."

   
-- Tim Doran, president of the Ohio Automobile Dealers Association and chairman of the Automotive Trade Association Executives, Automotive News, May 6


"That's one of our means to help alleviate stress on dealers while they also reduce their inventory on aging vehicles."

    -- Sue Mallino, a GMAC spokeswoman, referring to the suspension of dealer curtailment payments through May, Automotive News, 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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