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Friday, May 22, 2009 RSSSEND TO A FRIENDPRINT
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Top Stories
GMAC Gets $7.5 Billion from Feds
Senate to Hold Hearings on Chrysler Dealer Cuts
Criticism Grows Against Obama Auto Rescue Plan
G.M. in Deal With Union as Deadline Approaches
U.S. to Steer GM Toward Bankruptcy
Chrysler Dealers to Face Difficult Battle
Ford Aims to Woo GM, Chrysler Buyers
Stabenow Bill Trades Cash for Gas-Guzzlers
Now Might Be the Perfect Time to Buy a Car
Top Stories
GMAC Gets $7.5 Billion from Feds

WASHINGTON -- The U.S. Treasury announced late Thursday it is investing another $7.5 billion in GMAC LLC and the government has named two members of GMAC's board of directors, but the government won't exercise its right to take a majority stake in the Detroit-based financing company. "Over the past several months, the contraction of credit in the auto finance markets has helped drive our auto industry into a historic crisis. This new arrangement with GMAC will help provide a reliable source of financing to both auto dealers and customers seeking to buy cars," said Treasury Secretary Tim Geithner. A "recapitalized GMAC," he said, "will offer strong credit opportunities, help stabilize our auto financing market, and contribute to the overall economic recovery." Of the infusion, $4 billion is to support GMAC's anticipated growth in Chrysler dealer and retail loans. ...$3.5 billion will go to meeting the stress test capital requirements.
Source: The Detroit News

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Senate to Hold Hearings on Chrysler Dealer Cuts

WASHINGTON -- The head of the Senate Commerce Committee said he would hold hearings early next month on Chrysler LLC's plans to close 25 percent of its dealers by June 9 -- even after the company vowed to work to aid closing dealers. "We must work to keep as many of these businesses open as possible, and at the very least assist these dealerships, the employees and their loyal customers transition as we move forward in the process," said Sen. Jay Rockefeller, D-W.Va., ... in a letter to the CEOs of both GM and Chrysler. Rockefeller said a letter to Sen. Kay Bailey Hutchison, R-Texas., from Chrysler president Jim Press didn't go far enough. "While I am pleased to see that Chrysler is finally being responsive to the hundreds of local dealerships throughout America waiting for answers about their livelihood -- many questions remain unanswered," [Rockefeller] said late Thursday.
Source: The Detroit News

[Editor's Note: NADA participated in a press conference today with U.S. Reps. Steve LaTourette (R-Ohio) and Dennis Kucinich (D-Ohio) urging President Obama to reexamine the reckless and rapid plan to close dealerships.]

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Criticism Grows Against Obama Auto Rescue Plan

Dealer, investor treatment, speed protested
WASHINGTON -- Criticism of President Barack Obama's rescue plans for General Motors Corp. and Chrysler LLC blossomed Thursday, as lawmakers and outsiders questioned the treatment of dealers, investors and the speed at which the administration was moving. Dealers also were the focal point of a hearing by the House Judiciary Committee on Thursday under Chairman John Conyers, D-Mich., where industry critic Ralph Nader said the rescue plans were "a conclusive death star to tens of thousands of jobs."
Source: Detroit Free Press

[Editor's Note: Randolph B. Henderson, Jr., owner of Webster Chrysler-Jeep, Inc., Webster, N.Y., one of the dealerships Chrysler has targeted for closure, was among those who testified before the House Committee on the Judiciary. Henderson, a minority dealer who grew up in the auto business, said many dealers still don't understand why they were targeted for closure, and more should be done to ensure these business owners are treated fairly in bankruptcy proceedings. "There is no accountability, transparency or equity in the process by which the termination decisions are being made," Henderson said. "This bankruptcy should not isolate Chrysler from accountability to this Judiciary Committee, dealers or consumers." Furthermore, Henderson said the closing of thousands of Chrysler and GM dealerships across the country could have a devastating effect on the minority-owned dealership network.]

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G.M. in Deal With Union as Deadline Approaches

DETROIT — General Motors reached a deal with its union on concessions on Thursday and is now racing the clock to persuade its bondholders to eliminate $27 billion in debt and avoid a bankruptcy filing. Analysts said that the United Automobile Workers’ deal with G.M. ... will increase pressure on bondholders to accept the company’s offer. “I think there’s a shot it will succeed, but a very small one,” said David Cole, chairman of the Center for Automotive Research in Ann Arbor, Mich.
Source: The New York Times

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U.S. to Steer GM Toward Bankruptcy

Filing Expected as Chrysler Set to Emerge
The Obama administration is preparing to send General Motors into bankruptcy as early as the end of next week under a plan that would give the automaker tens of billions of dollars more in public financing ... The legal tactic is viewed by some as the best means of reviving the [company]. But the speed of the government-led transformation has triggered complaints that the rights of investors and dealers are being trampled.
Source: The Washington Post

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Chrysler Dealers to Face Difficult Battle

As Objections Mount Over Closures Plan, Legal Costs Dissuade Many From Joining Court Fight
DETROIT -- The move by Chrysler LLC to eliminate about a quarter of its dealerships through a bankruptcy-court filing is running into opposition from lawmakers and franchise owners ... So far, two groups representing about 350 dealers have filed objections to Chrysler's move. Legal experts said Chrysler dealers face an uphill battle because bankruptcy laws generally give courts wide latitude to tear up contracts such as dealer licenses.
Source: The Wall Street Journal

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Ford Aims to Woo GM, Chrysler Buyers

Financial problems of rivals gives Ford opportunity to lure new customers
As Chrysler LLC and General Motors Corp. move to dismantle brands and close dealerships, other automakers are moving in to pick up the pieces. "We're going to be aggressive," said Ken Czubay, head of U.S. sales and marketing for Ford. "But we're not going to be predatory." Ford dealers across the country are seeing more and more Chrysler and GM trade-ins, he said.
Source: The Detroit News

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Stabenow Bill Trades Cash for Gas-Guzzlers

WASHINGTON – Sen. Debbie Stabenow of Michigan introduced cash-for-clunkers legislation [Thursday] that would provide vouchers of up to $4,500 toward the purchase of a more fuel-efficient car or truck. Just as in the House version, Stabenow’s legislation ... doesn’t differentiate between domestic and imported vehicles when handing out vouchers. “Bottom line, this legislation will help stimulate new car and truck sales, saving good-paying jobs in the process," [Stabenow said].
Source: Detroit Free Press

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Now Might Be the Perfect Time to Buy a Car

With industry auto hurting, savvy consumers may be able to take advantage
According to Paul Taylor, chief economist for the National Auto Dealers Association, “there is a favorable trend for trade-ins that may not be there six months from now. In conjunction with, in some cases, historically low prices for new vehicles, this may be the optimal time for price shopping.” Indeed, deals abound ... Plus, if you buy any new car this year, the IRS is letting most taxpayers deduct the sales tax for up to $49,500 of sticker price.
Source: MSNBC.com

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Quotable
 
"This new arrangement with GMAC will help provide a reliable source of financing to both auto dealers and customers seeking to buy cars."

   
-- Treasury Secretary Tim Geithner, on the Treasury's announcement late Thursday that it will invest another $7.5 billion in GMAC, The Detroit News, May 21


"We must work to keep as many of these businesses open as possible, and at the very least assist these dealerships, the employees and their loyal customers transition as we move forward in this process."

   
-- 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, The Detroit News, May 21


"There is a favorable trend for trade-ins that may not be there six months from now. In conjunction with, in some cases, historically low prices for new vehicles, this may be the optimal time for price shopping."

   
-- Paul Taylor, NADA chief economist, MSNBC.com, May 21


"Bottom line, this legislation will help stimulate new car and truck sales, saving good-paying jobs in the process."

   
-- Sen. Debbie Stabenow, D-Mich., who introduced cash-for-clunkers legislation Thursday that would provide vouchers of up to $4,500 toward the purchase of a more fuel-efficient car or truck, Detroit Free Press, May 21

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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