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Friday, May 15, 2009 RSSSEND TO A FRIENDPRINT
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Top 10 Stories
NADA Statement on GM Dealership Cuts
GM Eliminating About 1,100 Dealer Franchises
GM Outlines Likely Bankruptcy Plan
Chrysler Dealer Cuts Take Toll on the Economy
Anger, Sadness as Ax Falls on Chrysler Dealers
Chrysler Plan Makes Dealers Feel Like 'Piece of Meat'
Chrysler Dealers Appeal for Aid From Obama
Chrysler Dealership Cuts Hit Family-Owned Shops Hard
Chrysler Dealers May Contest Criteria Automaker Used for List
Ford Shareholders Worry About Dealerships, Profits
Top 10 Stories
NADA Statement on GM Dealership Cuts

General Motors’ plans to cut its dealer network are drastic and far-reaching and will impact more than 63,000 dealership employees and thousands of their sales and service customers. We view GM’s action with a profound sense of sadness and disappointment. GM’s decision comes through no fault of the dealers, who are, in many cases, family-run businesses that have been loyal partners with GM – through good times and bad – for multiple generations. NADA fully expects GM to honor all its obligations to the affected dealers, whether or not they decide to wind down their operations. It’s critical for GM to treat each affected dealer fairly and equitably. NADA will work aggressively on all fronts with regard to assisting these dealers during these historically challenging times.
Source: NADA Newswire

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GM Eliminating About 1,100 Dealer Franchises

NEW YORK – A day after Chrysler LLC moved to eliminate nearly 800 dealerships, General Motors Corp. on Friday told about 1,100 U.S. dealers their franchises will be terminated late next year. With fewer dealers, consumers won't see as much competition, said Aaron Bragman, an automotive industry analyst with the consulting firm IHS Global Insight. "No longer will people be able to shop between three or four dealers within 15 minutes of each other for the best cutthroat price," he said. "As the dealers go, so goes the company in terms of financial health."
Source: The Associated Press

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GM Outlines Likely Bankruptcy Plan

In a government filing, the struggling automaker says it will most likely follow a legal path similar to Chrysler's bankruptcy.
DETROIT -- General Motors Corp Thursday said that if it files for bankruptcy it would most likely pursue a quick sale of its best assets to a new operating company similar to the process now reshaping Chrysler LLC. "We are considering ... alternatives in consultation with the U.S. Department of the Treasury, our largest lender," GM said in its SEC filing. "We currently believe that if we pursue one of these (bankruptcy) alternatives, a 363(b) sale would be the most likely."
Source: Reuters

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Chrysler Dealer Cuts Take Toll on the Economy

Chrysler LLC's move Thursday to close 789 of its dealerships by June 9 ... will impact communities across the state and cost as many as 40,000 jobs nationwide. "It's not a haircut for dealers," said David Hyatt, spokesman for the National Automobile Dealers Association. "It's a beheading." The average dealership employs about 50 people. While some who lose their jobs will find work at dealerships that add a brand, many will not.
Source: The Detroit News

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Anger, Sadness as Ax Falls on Chrysler Dealers

CHICAGO -- Dealers across the United States reacted with a mixture of anger and sadness on Thursday to word that bankrupt automaker Chrysler LLC plans to eliminate franchise agreements with them ... Mark Calisi, 47, who owns Eagle Auto-Mall in Riverhead, New York, ... said Chrysler accounts for a third of his business, which also sells Volvo, Mazda and Kia, and that on Thursday he had to sack 30 of his 100 employees. "I can't even give severance because Chrysler's not taking back my parts," he said.
Source: Reuters

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Chrysler Plan Makes Dealers Feel Like 'Piece of Meat'

[Stanley Balzekas Jr.'s] family has been in the business since 1919, when his father, Stanley Sr., a blacksmith from Lithuania, opened his first dealership. It’s been a Chrysler-only shop since 1933. “After 90 years, we are a piece of meat,” said Balzekas, 85, whose two sons and one daughter also work at the dealership.
Source: Bloomberg

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Chrysler Dealers Appeal for Aid From Obama

WASHINGTON -- Dismayed Chrysler LLC auto dealers appealed to the Obama administration Thursday to help dealerships slated for extinction, while members of Congress raised questions about the automaker's plans. [John McEleney, a Clinton, Iowa, auto dealer and NADA chairman] said he'd like to see transition money from the government for dealers. Sen. Carl Levin, D-Detroit, said there may be a role for Congress to aid dealers. "We're going to take whatever steps we can to soften the blow for these dealers and the communities they are in," Levin said.
Source: The Detroit News

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Chrysler Dealership Cuts Hit Family-Owned Shops Hard

DETROIT — Car dealer Jamie Auffenberg knew he would get a letter from Chrysler Thursday. He just didn't know what it would say. When he opened the U.S package Thursday morning, he found a letter saying Chrysler is terminating the franchise for his Chrysler/Jeep store in O'Fallon, Ill. His brother Chris operates four Chrysler-branded stores in Missouri and was told that two would close. "I didn't see this coming," Auffenberg says.
Source: USA TODAY

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Chrysler Dealers May Contest Criteria Automaker Used for List

Dealers no longer have protection from state franchise laws because Chrysler is in Chapter 11 bankruptcy, but they can contest the process by which Chrysler chose the survivors, said Scott Silverman, a Boston attorney representing four terminated Chrysler dealers in Massachusetts. The National Automobile Dealers Association said the terminated dealers and their more than 40,000 employees "have done nothing but proudly represent the Chrysler brand and today find themselves left behind." "NADA fully expects Chrysler to honor all its obligations to the affected dealers who have been nothing but good partners," said that association's Chairman John McEleney.
Source: Detroit Free Press

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Ford Shareholders Worry About Dealerships, Profits

WILMINGTON, DEL. -- Concerns about the size of Ford Motor Co.’s dealership network and the company’s lack of profitability in recent years were among top concerns for the 98 shareholders who attended the company’s annual meeting [Thursday.] “The only issue we have is we have a few extra dealers in the large metropolitan areas,” [Ford President and CEO Alan Mulally] said ... at Ford’s annual meeting in downtown Wilmington. “And so that’s where we are consolidating.”
Source: Detroit Free Press

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Quotable
 
"We view GM's action with a profound sense of sadness and disappointment. NADA fully expects GM to honor all its obligations to the affected dealers, whether or not they decide to wind down their operations. It's critical for GM to treat each affected dealer fairly and equitably."

   
-- NADA, in a statement following the announcement that 1,100 GM dealerships will be terminated late next year, NADA Newswire, May 15


"No longer will people be able to shop between three or four dealers within 15 minutes of each other for the best cutthroat price. As the dealers go, so goes the company in terms of financial health."

   
-- Aaron Bragman, an automotive industry analyst with the consulting firm IHS Global Insight, The Associated Press, May 15


"It's heart-wrenching. I've grown up in this business. My dad's been with Chrysler since '57. I've grown up with a lot of these families. That's all I've ever known — Chrysler."

   
-- Chuck Eddy, a Youngstown, Ohio, Chrysler dealer that was not cut, The Associated Press, May 14

Video Highlights
 
 
Should Government Decide Dealers' Fate? (CNBC)


Auto Dealers Strike Back (CNBC)



Dealers Head to Capitol Hill (CNBC)



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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