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Monday, May 11, 2009 RSSSEND TO A FRIENDPRINT
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Top 10 Stories
Dealers Go on Offensive
Feds Push Drastic Cuts: Dealers Wait, Worry
GM's Fritz Henderson Says Dealers Will Learn Fate This Week
Uncertainty Takes a Toll on Dealers
GM Bankruptcy Almost Inevitable, Experts Say
Chrysler Will Pick Dealer Cuts by Thursday
GMAC Could Get $7.5 Billion From U.S., Report Says
How Could a Government-Run GMAC Reshape Car Sales?
Buyers Are on the Auto Lot, but the Financing Is Not
Preparing for the Worst: NADA Webinar on Bankruptcy Offered to Dealers
Top 10 Stories
Dealers Go on Offensive

The National Automobile Dealers Association is aggressively pushing back on Capitol Hill after taking a look at GM and Chrysler’s proposal for axing thousands of dealerships. NADA is launching an ad campaign this week with the group’s president criticizing President Barack Obama’s task force for demanding such drastic cuts. The ads, which will run Tuesday in publications such as The Washington Post and Automotive News, coincide with a fly-in of more than 150 dealers the association has put together. “Our objective is to talk to Members of Congress to hopefully have some influence on the White House and decision-makers at Treasury and the president, himself, to make this more of an orderly process that won’t result in rapid unemployment,"  [said NADA Chairman John McEleney.]
Source: Roll Call

[Editor's Note: Former NADA Chairman and GM dealer Alan Starling argued against drastic dealer cuts this morning on CNBC's "Squawk on the Street." Click here for the CNBC interview. To further enhance this week’s fly-in to Washington, DC, all dealers are strongly encouraged to call their representative and both of their senators. Urge them to tell the Obama administration not to close dealerships. Grassroots action early this week is critical. Both the House and Senate can be reached through the Capitol switchboard at (202) 224-3121. Click here for the fact sheet arguing against drastic dealer cuts.]

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Feds Push Drastic Cuts: Dealers Wait, Worry

General Motors and Chrysler LLC dealers are anxiously awaiting word on whether their businesses will live or die. Behind the sudden rush to whack the dealer body is President Barack Obama's auto task force. Leaders Steven Rattner and Ron Bloom and others on the task force are said to be pressuring both companies to accelerate and deepen their existing programs to consolidate dealerships. On Wednesday ... NADA will orchestrate the arrival of about 100 dealers in Washington to lobby Congress.
Source: Automotive News

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GM's Fritz Henderson Says Dealers Will Learn Fate This Week

DETROIT --General Motors Corp. will start notifying dealers this week of the automaker's plans to close or consolidate its retail outlets as part of a broad restructuring plan, President and Chief Executive Officer Fritz Henderson said today. "It's not a one- or two-month process. It is something that will take place over a reasonable period of time," Henderson told reporters during a conference call. GM plans to shrink its U.S. dealer count from 6,246 in 2008 to 3,605 by the end of 2010, a reduction of 42 percent -- 500 more than announced on Feb. 17. Dealers will be on Capitol Hill on Wednesday lobbying against the closure of dealerships.
Source: The Detroit News

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Uncertainty Takes a Toll on Dealers

Many dealers already have cut employees and other expenses in an effort to keep their family-owned businesses afloat during the deep national recession. But these days, anxiety is running even higher as dealers wait to see which dealerships General Motors Corp. and Chrysler LLC plan to cut as they restructure. Chuck Eddy, a Chrysler-Jeep-Dodge dealer in Austintown, Ohio, said he hopes Chrysler makes its announcement about which dealers will close soon. "The stress," he said, "is unbelievable."
Source: Detroit Free Press

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GM Bankruptcy Almost Inevitable, Experts Say

DETROIT — Although company executives said last week they would still prefer to restructure out of court, experts say all GM is doing now is lining up majorities of stakeholders to make its court-supervised reorganization move more quickly. The biggest obstacle to GM restructuring out of court appears to be its bondholders, who have been reluctant to sign on to the stock swap when the government and United Auto Workers union would get far more stock in exchange for debts owed by GM.
Source: The Associated Press

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Chrysler Will Pick Dealer Cuts by Thursday

Chrysler LLC dealers are expecting to learn their individual fates by Thursday as the automaker chooses which dealerships will be part of a new and leaner company that emerges from bankruptcy. Dealers are to be notified of their status with the new company 13 days prior to the sale date. Initially the key asset sale hearing was to be May 21, which had dealers expecting news Friday.
Source: The Detroit News

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GMAC Could Get $7.5 Billion From U.S., Report Says

GMAC, the troubled automobile lender, may receive a $7.5 billion infusion from the U.S. government as early as this week, The Washington Post reported, citing unnamed sources. The funds for GMAC would come as part of an Obama administration package that aims to revive the nation’s financial system even after it found that major banks need less financial aid than expected, the Post said.
Source: The New York Times

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How Could a Government-Run GMAC Reshape Car Sales?

The government could lean on GMAC to help stimulate sales with the cash to offer zero-percent financing, or lower credit requirements. Paul Taylor, chief economist with the National Automobile Dealers Association, said car buyers benefited when GMAC converted itself into a bank holding company in January and received government aid. "The result of government assistance so far has been to increase credit availability to consumers," Taylor said. "And that has been helpful in a credit-constrained auto retailing environment."
Source: The Associated Press

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Buyers Are on the Auto Lot, but the Financing Is Not

The banks need to loosen up. That's the message from a month's worth of interviews with consumers and automobile dealers nationwide. It's also the conclusion of a new study by Accenture, a global management consulting company. Accenture has done two online surveys of 504 automotive consumers in the United States -- the first conducted in October 2008 and the most recent conducted in April of this year. The surveys found that more than half of the respondents -- 64 percent, to be precise -- ran into credit problems buying a car.
Source: The Washington Post

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Preparing for the Worst: NADA 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 tomorrow, 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
 
"Our objective is to talk to Members of Congress to hopefully have some influence on the White House and decision-makers at Treasury and the president, himself, to make this more of an orderly process that won’t result in rapid unemployment."

   
-- NADA Chairman John McEleney, on NADA's fly-in of more than 150 dealers this week to push back on GM and Chrysler’s proposals to ax thousands of dealerships, Roll Call, May 11


"Dealers ... don't cost the manufacturer anything. We buy everything they build. [Dealers] are their main revenue source. ... over 90 percent of [automaker] revenue is derived from what dealers buy ... "

   
-- Former NADA Chairman and GM dealer Alan Starling, arguing against drastic dealer cuts, CNBC, May 11


"The anxiety has accelerated tenfold."

   
-- Richard Garber, Jr., who operates 14 franchises in three states, on the uncertainty as dealers wait to see which stores General Motors and Chrysler plan to cut, Detroit Free Press, May 10


"We do not have a finalized plan. We don't have identification of who. We don't know when. We don't know how. We have nothing to announce today other than this is all in flux."

   
-- Chrysler LLC co-President Jim Press, in a conference call with dealers Friday, Automotive News, May 8

Video Highlights
 

The Case Against Closing Dealerships (CNBC)


NADA and the Obama Auto Task Force (PBS, NewsHour with Jim Lehrer)


 
NADA on Cash for Clunkers (NADA-TV)



NADA on Floorplan Credit Crisis (NADA-TV)


 
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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