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Thursday, May 21, 2009 RSSSEND TO A FRIENDPRINT
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Top Stories
Auto Dealers Pushing to Save Car Lots
Senators Push to Slow Chrysler Dealer Closures
Chairman Rockefeller Stands Up for Auto Dealers
Dealers Fighting Termination Make Case With Personal Tales
Chrysler Says Dealers Face Elimination if Sale Isn't Approved
Chrysler's Doomed Dealers Scramble to Clear Out Inventory
Wanted: New Chrysler Dealers for Open Points. Huh?
Chrysler Sales Top Industry's Pace as Bargains Trump Bankruptcy
Ex-Duracell Chairman to Lead New Chrysler
A Foreign Buyer Could Put Saturn's Image Into Orbit
Opinion: Killing Car Dealers, Killing Detroit
Top Stories
Auto Dealers Pushing to Save Car Lots

The House Judiciary Committee will hold an emergency hearing today on the potential fallout from shutting some 2,000 Chrysler and General Motors dealerships as part of the federal restructuring of the domestic automobile industry. NADA Chairman John McEleney said Wednesday ... dealers have been turning the heat up on lawmakers about the proposal. “Since dealers received the letters ... a lot of them have probably contacted their Members directly,” he said. “We have relationships with [lawmakers]. They work in the district. They all have a car dealer in their district — if not more than one.”
Source: Roll Call

[Editor's Note: The Judiciary Committee has pushed back the hearing until 1 p.m. EST today. Randy Henderson, a Chrysler-Jeep dealer from Webster, N.Y., included in Chrysler's list of proposed closures, will testify before the committee on the implications of these rapid dealer reductions by both GM and Chrysler. To watch the hearing live via the Web, click here.]

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Senators Push to Slow Chrysler Dealer Closures

A group of U.S. senators [on Wednesday] attempted to slow the demise of 789 Chrysler dealerships, proposing an amendment to a spending bill that would block federal aid for Chrysler or General Motors if they didn't give dealers at least 60 days notice before closing. Sen. Kay Bailey Hutchison, R-Texas, offered the amendment ... saying “the road kill here are the auto dealers.” “What I don’t understand is why General Motors or Chrysler would arbitrarily shut down thousands of operating and profitable dealers across our country,” she said.
Source: Detroit Free Press

[Editor's Note: NADA believes that Chrysler's treatment of dealers who may lose their franchises sets a bad precedent for future actions by manufacturers and that dealers should be afforded fair treatment.  Immediate action is needed to ensure the Hutchison amendment is included in the Supplemental Appropriations Act of 2009, H.R. 2346. All NADA members are urged to contact their Senators today through the capitol switchboard at (202) 224-3121 to tell them to support and cosponsor the Hutchison amendment.]

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Chairman Rockefeller Stands Up for Auto Dealers

WASHINGTON -- Sen. John D. (Jay) Rockefeller IV issued the following statement after sending a letter to the CEOs of Chrysler and General Motors urging them to reconsider their decisions to terminate dealer franchise agreements. “Small businesses need Congress to stand up for them, especially in these trying economic times,” said Rockefeller, chairman of the Senate Commerce, Science and Transportation Committee. “Chrysler and GM dealers are facing significant financial losses due to an overwhelming inventory of vehicles and parts, placing them in an extremely difficult financial situation. I urge Chrysler and GM to reconsider their decisions to terminate these franchise agreements and develop a more reasonable transition period to allow franchises to stay open beyond the June 9 date.”  “These companies cannot be allowed to take taxpayer funds for a bailout and then leave local dealers and their customers to fend for themselves with no real notice and no real help.” Click here for a copy of the letter.
Source: NADA Newswire

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Dealers Fighting Termination Make Case With Personal Tales

Dealers who object to Chrysler LLC's termination of their franchises are using personal stories to buttress their case. Guy Willey, general manager of the family-owned Willey Auto Group, told the tale of his two Iowa dealerships, in Nevada and Ames. The stores were profitable in the first quarter, he said in the court documents. "Combined, our two dealerships are currently running 14 percent over Chrysler sales objectives for 2009," [he said.]
Source: Automotive News

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Chrysler Says Dealers Face Elimination if Sale Isn't Approved

A Chrysler LLC executive said Thursday if the company's sale of most of its operations to Fiat SpA isn't approved by bankruptcy court, all 3,181 of its remaining dealers will face elimination. Steven J. Landry, Chrysler's executive vice president for North American marketing said, "The auto industry cannot support the number of dealers in the marketplace."
Source: The Wall Street Journal

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Chrysler's Doomed Dealers Scramble to Clear Out Inventory

Chrysler dealers scheduled to shut down on June 9 say they are using all available options to get rid of new vehicles. ... Dealer Stanley Balzekas Jr. of Chicago says he's considering a half-off discount on the 100 vehicles he has left. "Every day, the car costs you money," he said. "What we're trying to do is mark down the price as low as possible and then give a higher price on the trade-in than we normally would."
Source: Automotive News

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Wanted: New Chrysler Dealers for Open Points. Huh?
DETROIT -- Hard to believe, but the new Chrysler is about to have some open points. Chrysler did more last week than thin the dealer ranks in clogged metro markets. Chrysler also took out some underperforming dealers, leaving some good smaller markets without any Chrysler stores. Chrysler President Jim Press said the company will be back in those markets.
Source: Automotive News

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Chrysler Sales Top Industry's Pace as Bargains Trump Bankruptcy

Chrysler LLC is selling cars at a higher rate than the U.S. industry this month, buoyed by incentives of as much as $6,000 and President Barack Obama’s assurances on the automaker’s survival. The results show buyers aren’t turned off from dealing with a bankrupt automaker, a win for Chrysler in its bid to keep revenue flowing and cut inventory while in court protection.
Source: Bloomberg

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Ex-Duracell Chairman to Lead New Chrysler

DETROIT — Chrysler, the automaker reorganizing under court protection, said on Wednesday that C. Robert Kidder, the former chairman of Duracell International and Borden Chemical, would become chairman of the restructured company after it begins its alliance with Fiat. Mr. Kidder ... will succeed Robert L. Nardelli, the former Home Depot chief who has been running Chrysler since August 2007.
Source: The New York Times

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A Foreign Buyer Could Put Saturn's Image Into Orbit

Dealer Network, Built by Deep Roots In America, Rouses Interest Abroad
A few potential buyers are considering tapping Saturn's strong dealer network to distribute vehicles made by foreign manufacturers into the United States. This week, GM sent the sale's term sheets to about 12 interested parties. "We want to revert back to the best parts of Saturn," said Gint Federas, [chief entrepreneurial officer and founder of California consulting firm Lazarus Team, one potential bidder.] "Dealers will have a lot of say on what cars come down line. They're the ones listening to customers and hearing what they want."
Source: The Washington Post

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Opinion: Killing Car Dealers, Killing Detroit
By Jerry Flint

Why shutting so many auto dealers will hurt GM and Chrysler.
The idea behind the closings ... is that fewer dealers selling more cars each is better than more dealers selling fewer cars each. But this only works if the surviving dealers sell more cars. It doesn't take much imagination to think that if the carmakers are ready to betray dealers who have carried their flag for half a century, they won't have much care or loyalty for a single car buyer. You might say these companies shot their wounded.
Source: Forbes

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Quotable
 
"These companies cannot be allowed to take taxpayer funds for a bailout and then leave local dealers and their customers to fend for themselves with no real notice and no real help."

   
-- Sen. John D. (Jay) Rockefeller IV, chairman of the Senate Commerce, Science and Transportation Committee, in a letter to the CEOs of GM and Chrysler, NADA Newswire, May 21


"What I don’t understand is why General Motors or Chrysler would arbitrarily shut down thousands of operating and profitable dealers across our country."

   
-- Sen. Kay Bailey Hutchison, R-Texas, who criticized Chrysler for attempting to shut 789 dealers across the country by June 9, saying “the road kill here are the auto dealers,” Detroit Free Press, May 20


"Automobile dealers are one of the largest private sector employers in the United States, providing tens of thousands of local jobs and contributing millions of dollars in tax revenues to states. Auto dealers are anchors in communities throughout the country and many times ownership is passed down from generation to generation."

    -- U.S. Rep. Bobby Scott, D-Va., in a letter to Steven Rattner, head of the White House's auto task force, Roll Call, May 21


"It doesn't take much imagination to think that if the carmakers are ready to betray dealers who have carried their flag for half a century, they won't have much care or loyalty for a single car buyer. You might say these companies shot their wounded."

   
-- Columnist Jerry Flint, in a Forbes opinion piece on "Why shutting so many auto dealers will hurt GM and Chrysler," May 18

Video Highlights
 
 
Cutting Dealers a Mistake (Fox Business Network)


Vice Chairman Tonkin on Chrysler Closures (Bloomberg)


 
Should Government Decide Dealers' Fate? (CNBC)



The Case Against Closing Dealerships (CNBC)



In-Depth Look - Pent Up Auto Demand (Bloomberg)



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)


 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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