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Top Stories
National Auto Dealers Hope GM Bankruptcy is Short
National Auto Dealers Say Chrysler-Fiat Alliance is an Important Step Towards the Automaker's Recovery
U.S. Providing $30.1 Billion Financing for GM Bankruptcy
Chrysler Gets Judge's Approval for Asset Sale
Congress Joins Chrysler Critics Over Plans to Dump Dealers
Fallout to Reach Consumers
U.S. Auto Sales Likely Tumbled 35% on Chrysler, Jobs
Ford Seeks to Gain Amid Rivals' Pain
Top Stories
National Auto Dealers Hope GM Bankruptcy is Short

The following is a statement from the Chairman of the National Automobile Dealers Association (NADA), John McEleney, in response to the GM bankruptcy:

"Even though this may have been anticipated for some time, the bankruptcy of General Motors, an American icon for a hundred years, still marks a historically sad day for American business.

"Obviously, this was not a preferred option. But the key now is to get out of bankruptcy as quickly as possible. Since NADA represents all dealers – both domestic and international – our concern is to minimize disruption to the entire auto industry.

"The bankruptcy court also should take special care not to trample on recognized rights under state franchise laws. GM dealers are independent business owners, men and women who have invested millions in their facilities and are the cornerstones of the economies in their local communities.

"GM has already announced drastic dealer cuts. NADA does not agree with mass cuts in the dealer network. It is the GM dealer who purchases GM vehicles to sell to the public. By cutting its dealers, GM is cutting its own customer base. In addition, fewer dealerships mean less convenience and less competition and more unemployment. Therefore, drastic closures of dealerships on the scale that GM announced are bad for the economy, bad for GM and bad for the consumer.

"But unlike Chrysler, GM at least has indicated it will allow a wind-down period for the dealers who are not part of the new company.

"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.

"It’s also important to point out that GM dealers will continue to honor all warranties and will work with all parties concerned to make sure that their customers are taken care of."
Source: NADA Newswire

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National Auto Dealers Say Chrysler-Fiat Alliance is an Important Step Towards the Automaker's Recovery

The following is a statement from the Chairman of the National Automobile Dealers Association (NADA), John McEleney, in response to the ruling by the bankruptcy court in favor of an alliance between Chrysler and Fiat:

"The ruling by the bankruptcy court late yesterday should allow Chrysler to move forward. It restores a sense of certainty about Chrysler’s future which, in turn, helps restore some stability to the entire auto industry.

"It is certainly our hope that the alliance between Chrysler and Fiat will lead to a new company that’s highly competitive and profitable. The nearly 2,400 dealers that will be part of the new company are encouraged by the prospects of a much-stronger Chrysler.

"However, we remain concerned about the 789 dealers that have been left behind. NADA does not agree with mass cuts in the dealer network. Drastic and rapid closures of dealerships on this scale are not good for the industry or the U.S. economy. Furthermore, the treatment of the Chrysler dealers who are not part of the new company has been unconscionable and outrageous. By any measure, their treatment does not even meet minimal standards of fairness. NADA urges Chrysler and the Obama Administration to move quickly to provide these dealers with fair and equitable consideration, especially when it comes to buying back vehicle and parts inventory and providing a reasonable amount of time for an orderly wind-down period. The bankruptcy court also should take special care not to trample on recognized rights under state franchise laws. These are independent business owners, men and women who have invested millions in their facilities and are the cornerstones of the economies in their local communities. They deserve much better treatment."
Source: NADA Newswire

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U.S. Providing $30.1 Billion Financing for GM Bankruptcy

White House outlines 'hands-off' ownership philosophy
NEW YORK -- The Obama Administration took General Motors into Chapter 11 bankruptcy today and moved quickly to get the carmaker out with $30.1 billion in bankruptcy financing, the White House said in a statement. But the White House vowed to exercise its ownership stake in GM "in a hands-off, commercial manner." That is, to let it operate as a car company, not a government agency. The $30 billion will give the government a 60 percent stake in a reorganized GM.
Source: Automotive News

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Chrysler Gets Judge's Approval for Asset Sale

NEW YORK -- The judge's decision came 31 days after Chrysler filed for bankruptcy, among the largest in U.S. history. More than 300 objections were filed, including lenders and dealers who tried to stop the sale by arguing that the process trampled their rights. Objections filed by many of the 789 dealers that will be eliminated are to be heard further in a hearing Thursday. But Gonzalez's ruling portends an uphill battle for the dealers.
Source: The Washington Post

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Congress Joins Chrysler Critics Over Plans to Dump Dealers

Members of Congress have joined Chrysler dealers in questioning why the automaker needs to close 789 dealerships by June 9 — less than four weeks after the dealers were notified of this decision. [On Wednesday] the Senate Commerce Committee has scheduled a hearing on the Chrysler and GM dealership closings. “We must ensure that the auto dealers are treated equitably, and have the opportunity to unwind their operations in a manner that will minimize hardships to employees who lose their jobs and communities that are adversely impacted,” said Sen. Kay Bailey Hutchison, R-Texas.
Source: Pittsburgh Business Times

[Editor's Note: NADA Chairman John McEleney and two dealers who are having their dealerships terminated will testify beginning at 2:30 p.m. EST, Wednesday, June 3 along with company executives. Senate Commerce Committee Chairman John Rockefeller IV, D-W.Va, called the hearing, which is entitled "GM and Chrysler Dealership Closures: Protecting Dealers and Consumers," to provide much needed transparency and examine who the decisionmakers were behind dealership closings. In his testimony, McEleney will emphasize the need to provide additional financing to Chrysler to buy back rejected dealer inventory, parts and specialized tools, and to give shuttered dealers more time to close their franchises. Click here for more information on the hearing and to view the Web broadcast June 3.]

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Fallout to Reach Consumers

Price cuts, rebates and other incentives could make the next few months one of the best times in history to buy a vehicle. But the perceived risk in buying a vehicle from a company under bankruptcy protection is expected to scare away many potential buyers. "Uncertainty may wind up driving some remarkable deals for consumers willing to take those risks," said Paul Taylor, chief economist with the National Automobile Dealers Association.
Source: The Wall Street Journal

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U.S. Auto Sales Likely Tumbled 35% on Chrysler, Jobs

Chrysler LLC, idling plants and shutting dealerships in bankruptcy, probably helped shrink the U.S. auto market by 35 percent in May as the industry endured its worst start to a year since at least 1976. The seasonally adjusted sales rate tumbled to 9.2 million last month from 14.2 million a year earlier, based on 7 analysts surveyed by Bloomberg. Chrysler may have fallen 51 percent and General Motors Corp., which filed for bankruptcy today, may have fallen 37 percent, according to 5 analysts.
Source: Bloomberg

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Ford Seeks to Gain Amid Rivals' Pain

Ford, the only one of Detroit's Big Three that didn't need a bailout from the federal government, plans to increase production of cars and trucks in the third quarter by about 10% from the level of a year ago, a company official said. "This is a once-in-a-lifetime opportunity to separate us from our other domestic competitors," said a person familiar with the matter at Ford. " ... you have to take this historic opportunity to grab market share."
Source: The Wall Street Journal

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Quotable
 
"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 Chairman John McEleney, in a statement following GM's bankruptcy filing, NADA Newswire, June 1


"There's not an auto executive that I know of that doesn't acknowledge that when a dealership closes, they lose market share. [Dealers provide] a robust distribution network at virtually no cost."

   
-- David Hyatt, NADA vice president of public affairs, Pittsburgh Business Times, May 29

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-TV)
 McEleney Speaks at NADA Convention (NADA-TV)
 Demise of Dealerships Leaves Big Dent (NBC)
NADA on the Front Lines  (NADA-TV)


Click here for more video reports.

 

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