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Tuesday, May 19, 2009 RSSSEND TO A FRIENDPRINT
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Top 10 Stories
White House Auto Adviser, Dealers to Meet
U.S. Orders Stricter Fuel Goals for Autos
NADA Commends President's Support for National Fuel Economy Program
Dealers Fight Chrysler's Rejection List
Dealers Say They're Talking With Chrysler on Franchise Cuts
St. Louis Lawmakers Push to Keep GM, Chrysler Dealerships Open
Opinion: Let's Have Fair Treatment for Closed Auto Dealerships
Ford's Farley Says That the GM and Chrysler Plans Will Orphan Four Million Customers
Opinion: Lawyers to GM Dealers: Don't Panic
Saab Confirms Three Bidders Remain
Top 10 Stories
White House Auto Adviser, Dealers to Meet

Ed Montgomery, who is also an official in the U.S. Labor Department, will meet Tuesday with officials from the National Automobile Dealers Association and the head of the Pennsylvania Auto Dealers Association. Pennsylvania is hardest hit among U.S. states [affected by Chrysler's announced plans to close 789 dealers] with 53 Chrysler dealers losing their franchises.
Source: The Detroit News

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U.S. Orders Stricter Fuel Goals for Autos

WASHINGTON -- The Obama administration plans to order auto makers to increase the fuel economy of automobiles sold in the U.S. to 35.5 miles per gallon by 2016, four years faster than current federal law requires ... Auto makers ... appear ready to support the more aggressive timetable in exchange for the certainty of a single national fuel-economy standard, instead of a jumble of federal and state standards.
Source: The Wall Street Journal

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NADA Commends President's Support for National Fuel Economy Program

Auto dealer group stresses need to consider economy, jobs, safety
WASHINGTON – The following statement from the chairman of the National Automobile Dealers Association, John McEleney, is in response to today’s White House announcement of a new national fuel economy and greenhouse gas program:

“NADA commends President Obama for making the right decision to embrace a federal fuel-economy standard over an unworkable patchwork of state-based laws. NADA is also pleased that the Environmental Protection Agency and National Highway Traffic Safety Administration will use a system based on a vehicles’ ‘attributes,’ such as size and engine type. This will help dealers to have a mix of cars and trucks available on their lots that meet the needs of their customers.

“Dealers are also heartened by the President’s intent to have the EPA and NHTSA coordinate their regulatory efforts. Implementation of this next step, however, could turn out to be challenging because these agencies have two very different goals under federal law. NADA is looking forward to hearing more details of how EPA and NHTSA will reconcile their differences and how their program will actually work.

“Dealers have long supported fuel economy improvements that are feasible and affordable. NADA will work with both EPA and NHTSA to ensure they fully consider how changes in the nation’s fuel-economy standard will impact jobs, vehicle safety, consumer demand and vehicle affordability. At issue is not whether manufacturers are capable of building cars and trucks that comply, but more importantly, whether the motoring public will want to buy them.”
Source: NADA Newswire

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Dealers Fight Chrysler's Rejection List

Lawyers representing 789 Chrysler, Jeep and Dodge dealers will meet today with President Barack Obama's auto task force to voice their objections to the automaker's decision to slash a quarter of Chrysler's retail outlets. Chrysler said it evaluated dealers on such criteria as quality of customer service ... as well as the demographics of the surrounding market. But the rejected dealers contend the selection process was unfair.
Source: Detroit Free Press

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Dealers Say They're Talking With Chrysler on Franchise Cuts

NEW YORK — A group representing Chrysler dealers said Monday that it is in talks with the automaker in hopes of getting it to scale back plans to terminate the franchise agreements of about a quarter of its dealers. "Certainly the dealers have an interest in a successful restructuring of Chrysler ... But we're hopeful we can reach an agreement on terms that will allow it to have as little adverse impact as possible on the dealers," [said Michael Bernstein, an attorney for the Chrysler National Dealer Council.]
Source: The Associated Press

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St. Louis Lawmakers Push to Keep GM, Chrysler Dealerships Open

Calling dealerships community “anchors,” U.S. Rep. Blaine Luetkemeyer, R-Mo., and John Shimkus, R-Ill., joined a bi-partisan group of lawmakers Monday in urging the Obama administration to reverse course and not force General Motors and Chrysler to close hundreds of dealerships nationwide ... “To justify these job losses, the task force is apparently relying on a misperception that new car dealers create a cost burden to auto manufacturers. This is not true ... " [Luetkemeyer, Shimkus and other lawmakers wrote to Steven Rattner, President Barack Obama’s car czar.]
Source: St. Louis Business Journal

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Opinion: Let's Have Fair Treatment for Closed Auto Dealerships

Closed dealerships shouldn't be stuck with vehicles they were pressured to purchase
The automakers should treat the dealers fairly. This is not their fault. A good many of the dealerships that are being closed are still profitable, even in this wretched economy, and are breaking their backs to move vehicles. The automakers should make sure they are fairly compensated for that inventory and not forced to dump it at a loss.
Source: The Detroit News

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Ford's Farley Says That the GM and Chrysler Plans Will Orphan Four Million Customers

Ford's refusal to follow suit belies claims that closures were not at the direction of the White House
In a New York Times article this morning, Ford’s director of North American sales, Jim Farley speaking of Chrysler’s letter of last week, “It seems very abrupt and unplanned. You don’t orphan four million customers overnight without some fallout.” Ford is laying down plans to adopt the customers left in the lurch. Ford’s creation of a very different plan to address the issue of over-dealering raises questions about the origination of the actions taken by Chrysler and GM last week. Was this something that the White House’s Automotive Task Force set down as a necessary part of the government-mandated viability plans? Or, as GM’s Mark LaNeve suggested in an Automotive News article yesterday, was this something that GM and Chrysler came up with on their own? When both LaNeve and the Automotive Task Force were quoted about the origin of the plans, they seemed to be engaged in the traditional Washington “non-denial – denial.” No one seems ready to say that the reductions were being forced on the automakers from Washington, but neither are they willing to say definitively that they were not. 
Source: DealersEdge

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Opinion: Lawyers to GM Dealers: Don't Panic
By Edward Lapham

Lawyers who represent dealers told me that their phones, BlackBerrys and even their old-fashioned fax machines have been ringing nonstop since General Motors dealers started receiving the letter. But that doesn't mean there will be a slew of lawsuits, at least not yet.
Source: Automotive News

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Saab Confirms Three Bidders Remain

STOCKHOLM -- "We have narrowed it down to a short list now," Saab spokeswoman Annicka Troedsson told The Associated Press. Trollhattan, Sweden-based Saab went into creditor protection on Feb. 20 in an effort by GM to spin off or sell the unit. Lawyers were expected to seek an extension of the court-managed reconstruction process, which is scheduled to end Wednesday.
Source: The Associated Press

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Quotable
 
"The automakers should treat the dealers fairly. A good many of the dealerships that are being closed are still profitable ... and are breaking their backs to move vehicles. The automakers should make sure they are fairly compensated for that inventory and not forced to dump it at a loss." 

    -- The Detroit News, in an editorial, May 19


"NADA commends President Obama for making the right decision to embrace a federal fuel-economy standard over an unworkable patchwork of state-based laws."

   
-- NADA Chairman John McEleney in response to today’s White House announcement of a new national fuel economy and greenhouse gas program, NADA Newswire, May 19


"It's our turn to say 'Time out.'"

   
-- Joe Ricci, owner of Joe Ricci Dodge in Dearborn, Mich., and one of the rejected Chrysler dealers who contends the selection process was unfair, Detroit Free Press, May 19


"Far from saving money, a rapid reduction in dealerships would further reduce GM's and Chrysler's revenue and market share."

    -- U.S. Reps. Blaine Luetkemeyer, R-Mo., and John Shimkus, R-Ill., and other lawmakers, in a letter to Steven Rattner, President Barack Obama’s car czar, urging the administration to reverse course and not force General Motors and Chrysler to close hundreds of dealerships nationwide, St. Louis Business Journal, May 18


"It seems very abrupt and unplanned. You don't orphan four million customers overnight without some fallout."

   
-- James Farley, Ford's director of North American sales, says that Ford had been pushing steadily to consolidate its dealers, rather than trying to end contracts or let them expire, The New York Times, May 19

Video Highlights
 
 
Cutting Dealers a Mistake (Fox Business)

 
Auto Dealers Strike Back (CNBC)


 
Should Government Decide Dealers' Fate? (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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