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Top Stories
Senators to Grill GM, Chrysler Execs about Dealerships on Wednesday
GM Will Require Dealers to Sign 'Participation' Pacts or Lose Franchises
GM Vows to Preserve 18-Month Grace Period for Terminated Dealers
GM Says it Has Tentative Deal to Sell Hummer
GM's 'Death Star' Jeopardizes Illinois Town
Car Deals Out There, But Costs Likely to Rise
CNW: Despite Challenges, Fewer Consumers Avoid GM
With Election Ahead, Politics Likely to Enter GM Decisions
Top Stories
Senators to Grill GM, Chrysler Execs about Dealerships on Wednesday

Senators plan to grill the chiefs of General Motors Corp. and Chrysler LLC on Wednesday about the fate of those companies' dealerships, many of which are slated to close under bankruptcy filings designed to revamp the struggling automobile giants. "Drastic closures of dealerships on the scale that GM announced are bad for the economy, bad for GM and bad for the consumer," said John McEleney, chairman of the National Automobile Dealers Association. McEleney will testify on the same panel as Press and Henderson. Also on the witness list are Pete Lopez, president and chief executive of Spencer Auto Group, a West Virginia GM and Chrysler dealer, and Russell Aubrey Whatley, a dealer with Russell Whatley Motor Co. in Texas.
Source: The Wall Street Journal

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GM Will Require Dealers to Sign 'Participation' Pacts or Lose Franchises

DETROIT -- General Motors is requiring all surviving dealers to sign a "participation agreement" asking them to comply with any dealership upgrades that the company imposes in bankruptcy. GM also will require dealers who got franchise termination letters to sign a "wind-down" agreement. GM already has informed 1,124 dealerships that they won't have their franchises renewed when the agreement expires on Oct. 31, 2010. Starting this week, an additional 200 dealers will get similar termination notices.
Source: Automotive News

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GM Vows to Preserve 18-Month Grace Period for Terminated Dealers

GM says it is sticking with the plan to keep [its rejected dealers] through Oct. 31, 2010, when GM's franchise agreement expires. Some dealers and their lawyers had feared that like Chrysler LLC, GM would use a Chapter 11 bankruptcy to summarily fire them.
Source: Automotive News

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GM Says it Has Tentative Deal to Sell Hummer

NEW YORK — General Motors said Tuesday that it has tentatively agreed to sell its Hummer brand, a day after the U.S. automaker filed for bankruptcy protection with hopes that it will transform its most profitable assets into a new company within just 30 days. The company did not name the proposed buyer or the price, but said the sale will likely save more than 3,000 U.S. jobs in manufacturing, engineering and at various Hummer dealerships.
Source: The Associated Press

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GM's 'Death Star' Jeopardizes Illinois Town

The Death Star created by GM's bankruptcy filing on Monday probably can't blow up an entire planet, but it might be able to do some damage to a small town in Illinois. In May, GM notified Rust Chevrolet in Cissna Park, Ill. that the dealership's contract with GM would not be renewed at the end of 2010. "If we keep our school, our grocery store, and our car dealership, we'll be OK," said Mayor Rick Baier, in an interview with the Huffington Post. "And we're losing one of those things."
Source: The Huffington Post

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Car Deals Out There, But Costs Likely to Rise

It's not obvious how the closures will save GM or Chrysler money. Dealerships are independently owned and operated. They buy cars from manufacturers and sell them at whatever price they can get. "They are not cost centers for either of the manufacturers," says David Hyatt, a spokesman for the National Automobile Dealers Association. "The customer ought to decide who stays in business."
Source: San Francisco Chronicle

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CNW: Despite Challenges, Fewer Consumers Avoid GM

DETROIT — Although General Motors has officially filed for Chapter 11 bankruptcy protection, [an] analyst ... suggested that consumers are less likely to be deterred from buying a GM vehicle than they would have been a few months ago. "It's a dramatic turnaround among new-car intenders," explained Art Spinella, president of CNW Research. "With the media concentrating more on the ‘restructured GM' rather than the ‘Bankrupt GM,' consumers appear to be more willing to keep a GM product on their shopping list," he continued.  ... when CNW surveyed new-vehicle intenders in July about whether they would buy from an automaker in bankruptcy, roughly 90 percent claimed they wouldn't ... Then in January — when talk of bankruptcy and government participation actually started heating up — only 51 percent said they wouldn't purchase from a bankrupt OEM.
Source: AutoRemarketing

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With Election Ahead, Politics Likely to Enter GM Decisions

WASHINGTON -- The federal government, in a nearly unprecedented move, now has a stake in running General Motors, and that means politics is likely to creep into a lot of big decisions, despite President Barack Obama's vow that Washington won't get heavily involved. But Congress - with most members facing re-election next year - has veto power over almost any decision, either by pressuring policymakers at hearings or by pushing legislation. Members have shown in recent months they're willing to do both.
Source: The Miami Herald

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Quotable
 
"Drastic closures of dealerships on the scale that GM announced are bad for the economy, bad for GM and bad for the consumer."

    -- NADA Chairman John McEleney, The Wall Street Journal, June 1



"[Dealers] are not cost centers for either of the manufacturers. The customer ought to decide who stays in business."

   
-- David Hyatt, NADA vice president of public affairs, San Francisco Chronicle, June 1



"If we keep our school, our grocery store, and our car dealership, we'll be OK. And we're losing one of those things. It's just gonna be a major hit for Cissna Park."

   
-- Rick Baier, mayor of Cissna Park, Ill., referring to the loss of Rust Chevrolet in his town, Huffington Post, June 1



"With the media concentrating more on the 'restructured GM' rather than the 'Bankrupt GM,' consumers appear to be more willing to keep a GM product on their shopping list."

   
-- Art Spinella, president of CNW Research, citing a survey, which found that the number of consumers saying they would not buy a GM product has fallen since January, AutoRemarketing, June 1

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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