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Wednesday, June 10, 2009 RSSSEND TO A FRIENDPRINT
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Top Stories
'Sad Day' for Chrysler Dealers
Fiat Completes Acquisition of Chrysler Assets
House OKs Cash for Clunkers
Hoyer: No Economic Benefit to Closing Dealerships
Members Take Auto Closings Personally
GM Says 15 to 20 Dealers Get Reprieve from Closure
Former AT&T Chief to Be GM Chairman
Detroitosaurus Wrecks
Top Stories
'Sad Day' for Chrysler Dealers

Carmaker gets OK to shut 789 affiliates
NEW YORK -- A federal bankruptcy court approved Chrysler LLC's request to close a quarter of its dealerships effective immediately, ending an era for dealers in 49 states and sparking heartbreak among longtime dealers across the nation. "We will stay open as long as we have customers today," Joe Ricci said Tuesday, the last day his Joe Ricci Dodge dealership in Dearborn could sell new Dodges, which were going for as much as 35 percent off the sticker price.
Source: The Detroit News

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Fiat Completes Acquisition of Chrysler Assets

With the touch of pen to paper and a simple wire transfer, Chrysler completed its deal with Fiat on Wednesday morning, largely ending its quick trip through bankruptcy. The last obstacle to an exit — a temporary stay imposed by the Supreme Court — was lifted late Tuesday, after the nine justices declined to hear a challenge of the deal by three Indiana state funds and several consumer groups. The wire transfer, from the federal government, gives Chrysler $6.6 billion in exit financing.
Source: The New York Times

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House OKs Cash for Clunkers

WASHINGTON – The U.S. House approved a plan [Tuesday] offering up to $4,500 for owners of gas-guzzling clunkers to trade in their wheels for new models in a bid to boost the lagging market for new vehicles. With auto sales running at their lowest rate in four decades, the Congressional Budget Office estimated the bill could spur sales of about 625,000 vehicles; backers are hoping for 1 million.
Source: Detroit Free Press

Editor’s Note: Dealers’ grassroots support for Rep. Betty Sutton's, D-Ohio, proposal was critical to its success in the House. Attention now moves to the Senate, where the NADA-endorsed proposal by Sens. Debbie Stabenow, D-Mich., and Sam Brownback, R-Kan., will be considered. NADA is urging all dealers to call their senators and ask them to vote in favor of the Stabenow-Brownback cash for clunkers legislation. Senate members can be reached through the Capitol Switchboard at (202) 225-3121. After the cash for clunkers proposals are enacted by Congress and signed into law by the President, the Department of Transportation will have 30 days to draft guidelines for participating dealers and interested consumers.

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Hoyer: No Economic Benefit to Closing Dealerships

WASHINGTON -- U.S. auto dealers' political muscle was on display Tuesday, as House and Senate lawmakers increased pressure on General Motors Corp. and Chrysler LLC to pull back on planned dealership closings. House Majority Leader Steny Hoyer, D-Md., voiced support for legislation to require the auto makers to honor existing franchise contracts with dealerships slated to be shut. "The dealers are being affected in a way that will adversely affect many, many communities around this country without an economic benefit to the manufacturers," Hoyer said in his weekly press conference.
Source: Dow Jones Newswires

Editor’s Note: NADA President Phil Brady will join Majority Leader Hoyer in a press conference today to underscore NADA’s support for the Maffei-Kratovil bill, which restores the economic rights of all Chrysler and GM dealers under state franchise laws. With only 40 cosponsors, all dealers are strongly urged to contact their representatives and ask them to cosponsor H.R. 2743, "The Automobile Dealer Economic Rights Restoration Act." House members can be reached through the Capitol Switchboard at (202) 225-3121.

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Members Take Auto Closings Personally

On Monday, Republican Sen. Lamar Alexander excoriated House Financial Services Committee Chairman Barney Frank for privately urging the CEO of GM to keep a plant open in his Massachusetts district, jokingly calling Frank the “car czar.” But on Tuesday, Alexander admitted he’s not above taking similar actions to protect a GM plant in his home state of Tennessee. “Members have treated a potential dealership closure just like a potential plant closing,” said David Regan, National Automobile Dealers Association vice president for legislative affairs. “There’s been a significant amount of congressional interest.”
Source: Politico

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GM Says 15 to 20 Dealers Get Reprieve from Closure

DETROIT — Mark LaNeve, GM's North American vice president for sales and marketing, said in an interview with The Associated Press that about 500 dealers had appealed the company's decision to eliminate them, with 15 to 20 of those appeals granted. Dealers were judged on whether they met sales goals, customer service scores, the condition of their buildings and other criteria.
Source: The Associated Press

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Former AT&T Chief to Be GM Chairman

Edward Whitacre Jr., who turned AT&T Corp. into the world's largest telecommunications company, will become chairman of General Motors Corp. when the company leaves bankruptcy, putting the government's stamp even more firmly on the car maker. The 67-year-old Mr. Whitacre has never run a manufacturing company but is known as a straight-talking executive with an aptitude for technology and a track record of working closely with the government in the heavily regulated phone industry.
Source: The Wall Street Journal

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Detroitosaurus Wrecks

The lessons for America and the car industry from the biggest industrial collapse ever
The demise of GM had been expected for so long that when it finally died there was barely a whimper. Wall Street was unmoved. Congress did not draw breath. America shrugged. Yet the indifference with which the news was received should not obscure its importance. A company which once sold half the cars in America ... has just gone under; and its collapse holds important lessons about management, about government and about the future of the car industry.
Source: The Economist

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Quotable
 
"We will stay open as long as we have customers today."

   
-- Joe Ricci said Tuesday, the last day his Joe Ricci Dodge dealership in Dearborn, Mich., could sell new Dodges, The Detroit News, June 10


"The dealers are being affected in a way that will adversely affect many, many communities around this country without an economic benefit to the manufacturers."

   
-- House Majority Leader Steny Hoyer, D-Md., who voiced support for legislation to require the auto makers to honor existing franchise contracts with dealerships slated to be shut, Dow Jones Newswires, June 9


"Members [of Congress] have treated a potential dealership closure just like a potential plant closing. There's been a significant amount of congressional interest." 

    -- David Regan, NADA vice president for legislative affairs, Politico, June 10

Video Highlights
 
 
Car Dealers Trying to Buy More Time (NBC)

 
John McEleney's Testimony to Senate Committee (CNBC)



Fighting the Dealers' Fight (CNBC)


 
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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