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Thursday, June 11, 2009 RSSSEND TO A FRIENDPRINT
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Top 10 Stories
Opinion: Dealers Aren't to Blame
Lawmakers Back Legislation on Dealer Rights
Senators Press for Details of Automaker Bankruptcies Fallout
Fiat Completes Alliance; New Chrysler Group Takes Shape
GM to Reverse Closing of 41 Dealerships
Stabenow Expects Senate Vote on 'Cash for Clunkers' Bill Within the Week
U.S. Retail Sales Rose in May
Dealer Shutdowns Mean Extra Towing for Some Owners
Saab Says It May Announce Favored Buyer This Week
Opinion: Local Car Dealers Deserve Answers
Top 10 Stories
Opinion: Dealers Aren't to Blame
By John McEleney

Reorganizing GM, Chrysler needs cost-benefit analysis, oversight.
With a total lack of public transparency or justification, the White House auto task force -- an unelected panel of advisers with no automotive experience -- told General Motors and Chrysler on March 30 that they needed to move more aggressively to cut "an excess of dealers." And for what? Dealers are not the problem. More than $80 billion of federal money will be going to GM and Chrysler, with no one yet able to explain exactly how the money is to be spent. If there ever was a situation that cries out for congressional oversight and action, this is it.
Source: USA TODAY

Editor's Note: This op-ed is part of a point-counterpoint on whether Congress should be involved in the debate over dealership closings. To read the McEleney commentary in its entirety, click here.

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Lawmakers Back Legislation on Dealer Rights


U.S. House Majority Leader Steny Hoyer, D-Md., speaks at a news conference Wednesday in support of legislation that would prevent automaker bankruptcies from trampling dealers' rights under state franchise laws.

WASHINGTON -- NADA joined Members of Congress at the Capitol on Wednesday to share their concern about dealership closings and to announce their support for H.R. 2743, the Automobile Dealer Economic Rights Restoration Act. The proposed legislation seeks to ensure that the bankruptcies of Chrysler and GM do not eviscerate dealers’ rights under state franchise laws. Rep. Frank Kratovil, D-Md., a bill sponsor, said that nothing demonstrates the Main Street/Wall Street split better than dealership closings. “It’s a bailout for the big guys, a force-out for the little guys,” he said. House Majority Leader Steny Hoyer indicated that the House could consider this legislation as soon as July 4. 
Source: NADA Newswire

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Senators Press for Details of Automaker Bankruptcies Fallout

WASHINGTON -- At the Senate Banking Committee [Wednesday], members peppered Obama auto task force leader Ron Bloom with questions about fallout from GM and Chrysler's bankruptcy restructurings, pressing for details of when the government will shed its stakes in Detroit automakers. When Sen. Mike Johanns, R-Neb., called the bankruptcies heartless, Bloom defended them as both necessary and painful.
Source: Detroit Free Press

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Fiat Completes Alliance; New Chrysler Group Takes Shape

MILAN/DETROIT -- In a victory for the U.S. administration driving the restructuring of bankrupt Chrysler, the Supreme Court on Tuesday denied a request from Indiana pension funds to delay the sale. That cleared the way for the alliance to be completed [Wednesday], six months after it was announced. Fiat CEO Sergio Marchionne will become CEO of the renamed Chrysler Group LLC. Chrysler's former president, Jim Press, will become Marchionne's deputy CEO ...
Source: Reuters

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GM to Reverse Closing of 41 Dealerships

Automaker to reverse plans for 41 affiliates; bill introduced in House to hinder shutdowns
WASHINGTON -- General Motors Corp. has agreed to reverse its decision to close 41 of the 2,100 dealerships it plans to shutter in bankruptcy, as pressure mounts on automakers to do more for their dealers. As of Tuesday, GM had reversed itself in 15 cases. It has now heard hundreds of appeals from closing dealers, and changed its position on 41. A group of influential members of Congress ... introduced a bill this week to try to ... restore the economic rights of automobile dealers to protect jobs, workers and small-business owners. [NADA] strongly endorsed the bill, saying the way Chrysler closed its dealers was "unconscionable." "The truth of the matter is that closing dealerships will not make either General Motors or Chrysler more viable," NADA said in statement. "These closings are unnecessary and wrong."
Source: The Detroit News

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Stabenow Expects Senate Vote on 'Cash for Clunkers' Bill Within the Week

WASHINGTON -- The Senate could consider "cash for clunkers" legislation to boost car sales within a week, Sen. Debbie Stabenow said [Wednesday]. Her comments came a day after the House passed legislation that would offer vouchers worth up to $4,500 to consumers who turn in old, low-mileage vehicles for new models. Stabenow ... said agreement has already been reached with members of the Senate Appropriations Committee on at least $1 billion of initial funding for the program ...
Source: The Detroit News

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U.S. Retail Sales Rose in May

WASHINGTON — Retail sales have risen by the largest amount in four months in May, as a rebound in demand at auto dealerships and gas stations helped to offset continued weakness at department stores. Auto sales rose 0.5 percent last month, the best showing since a 2.7 percent surge in January. Even with the gain, sales are 21.5 percent below where they were a year ago as automakers continue to struggle with the worst sales environment in decades.
Source: The Associated Press

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Dealer Shutdowns Mean Extra Towing for Some Owners

As the automakers terminate contracts with dealers across the nation as part of their bankruptcy reorganization, many owners of Chrysler and GM vehicles will have to find new sources for oil changes, tuneups and major repairs. The situation is more acute when it comes to Chrysler dealerships cut loose by the company Tuesday. Chrysler dealers no longer affiliated with the company cannot honor incentives or make repairs needed to Chrysler, Dodge or Jeep vehicles under the manufacturer's warranty.
Source: The Associated Press

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Saab Says It May Announce Favored Buyer This Week

Saab Automobile, the Swedish carmaker being divested by General Motors Corp., may announce its favored bidder as early as this week, Saab spokeswoman Gunilla Gustavs said today in an interview. “The discussions are continuing, there is no official date that has to be reached, and this will have to take the time it takes,” Gustavs, based in Gothenburg, Sweden, said by phone. “But an announcement could come as early as this week.”
Source: Bloomberg

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Opinion: Local Car Dealers Deserve Answers

Chrysler and GM should explain why they yanked the plug on successful dealerships. They need to regain communities' trust.
Auto executives have done a poor job explaining why it's necessary to yank the livelihoods from car dealers, and confusion and suspicion are rampant. At the very least, impacted communities and dealers deserve a cogent explanation from automakers about why dealership closings are necessary, and how they decided which ones needed to close.
Source: The Denver Post

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Quotable
 
"More than $80 billion of federal money will be going to GM and Chrysler, with no one yet able to explain exactly how the money is to be spent. Taxpayers will soon own 60% of GM. If there ever was a situation that cries out for congressional oversight and action, this is it."

   
-- NADA Chairman John McEleney, in an op-ed on whether Congress should be involved in the debate over dealership closings, USA TODAY, June 11


"It's a bailout for the big guys, a force-out for the little guys."

    -- Rep. Frank Kratovil, D-Md., co-author of H.R. 2743, the Automobile Dealer Economic Rights Restoration Act, which seeks to ensure that the bankruptcies of Chrysler and GM do not eviscerate dealers’ rights under state franchise law, NADA Newswire, June 11


"What money does it save the manufacturers if you shut down a dealership? The answer: Zero. Zero. Zero."

   
-- House Majority Leader Steny Hoyer, D-Md., in support of H.R. 2743, NADA Newswire, June 11
 


"In a better world, the choice to intervene in the companies would not have had to be made. But amid the worst economic crisis in three quarters of a century, the administration’s decisions avoided a devastating liquidation and put a stop to the long practice in the auto industry of kicking hard problems down the road."

   
-- Ron Bloom, a senior adviser to the auto task force, in testimony before the Senate banking committee Wednesday on the government’s involvement in the bankruptcies of GM and Chrysler, The New York Times, June 11

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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