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Top Stories
Lawmakers Chide Automakers Over Dealership Cuts
Back on Hill, Automakers Defend Dealer Closings
Study: Rural Chrysler Dealers Hit Worst
GM's Tightrope: Cut Stores, Rebuild Morale
Many Dealers, Few New Franchises
End of Road for 4-Generation Chrysler Dealer
Saab Says Sale is Near, Most Creditors Agree to Writedown
VW Bucks Global Slump, Posts May Sales Gain
Opinion: Car Dealers Shouldn't Be Kicked to the Curb
Top Stories
Lawmakers Chide Automakers Over Dealership Cuts

GM issues state-by-state closings list
GM and Chrysler dealer closings have afflicted nearly every state (only Alaska has been spared), and it's set off a wave of anger on both sides of the aisle. [On Friday,] Democratic and Republican House members ... took turns pummeling the automakers, the Treasury Department and bankruptcy court over the dealer reductions. "Terminating a dealership does not provide any material cost savings," NADA Chairman John McEleney testified during [a hearing Friday]. "The retail network, the land, the buildings, the employees, training -- the dealers pay for all of this."
Source: The Washington Post

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Back on Hill, Automakers Defend Dealer Closings

Automotive executives from General Motors and Chrysler defended their decision to shut down 2,000 dealerships across the country, telling a panel of skeptical lawmakers on Friday that the cull was necessary to their restructuring and survival. Their position drew considerable fire. “You’re talking about the impact on people’s lives in every Congressional district in this country,” said Representative Bruce L. Braley, Democrat of Iowa. “It’s much broader than the loss of sales and service. It’s part of the fabric of this country.”
Source: The New York Times

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Study: Rural Chrysler Dealers Hit Worst

Rural Chrysler car dealerships have taken a disproportionate hit in the bid to keep the bankrupt company afloat, according to a study released Friday by a group devoted to rural issues. The results of the study, which appeared on the Daily Yonder blog, a website affiliated with the Center for Rural Strategies, found that while 16.5 percent of Americans live in non-metro communities, 32.5 percent of the closings were in these areas.
Source: Politico

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GM's Tightrope: Cut Stores, Rebuild Morale

GM is walking a tightrope as it tries to work out of U.S. Bankruptcy Court. To shed thousands of dealerships, it is using tough tactics that are angering many dealers. But GM needs dedicated and enthusiastic dealers to boost sales and work out of its deep financial hole. GM sales chief Mark LaNeve says the company plans to be flexible in working with dealers on such things as goals for higher per-store sales, dealership upgrades and increased inventory.
Source: Automotive News

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Many Dealers, Few New Franchises

Potential grows for new automakers to enter U.S.
Last week's headlines had a tempting symmetry. As General Motors and Chrysler were working to eliminate thousands of dealerships, three auto companies were poised to enter or expand in the United States: India's Tata Motors, a Chinese company and a new branch of Roger Penske's automotive group looking at stocking Saturn dealerships with Korean autos. So is another grand shift under way in which Asian automakers gain a foothold in the United States by embracing American dealers?
Source: Automotive News

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End of Road for 4-Generation Chrysler Dealer

HOBART, Ind. — At the end of the 81-year marriage, the Isaksons said goodbye by turning off the lights. The partnership was over. "It hurts," [says Rob Isakson.] "How do you put into words 81 years of your family's blood, sweat and tears? And all of it is for nothing now." The National Automobile Dealers Association estimates the GM and Chrysler dealer closings will wipe out more than 100,000 jobs; the average wage is between $45,000 and $55,000 a year. Add to that taxes and the gaping holes left by dealers — many of them family-owned businesses — who have been mainstays in their communities. "They're one of the few vestiges of what used to be Main Street America where businesses are locally owned and operated," says John McEleney, chairman of the dealers association. "They're the fabric of the community."
Source: The Associated Press

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Saab Says Sale is Near, Most Creditors Agree to Writedown

STOCKHOLM -- General Motor's Saab said it was likely to announce its new owner this week and that three quarters of its creditors had agreed to a proposed writedown of the money-losing brand's debt. A source told Reuters last week that Koenigsegg, a maker of $1 million supercars, and Norwegian investors had reached a preliminary agreement to buy Saab, which was put up for sale by its now bankrupt U.S. parent earlier this year after two decades of control.
Source: Reuters

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VW Bucks Global Slump, Posts May Sales Gain

FRANKFURT -- A rejuvenated model range led by its new sixth-generation Golf helped Volkswagen AG outperform its competitors in May and grab more share of the world's car market, Europe's largest automaker said on Friday. Led by massive gains in Germany and China -- its two biggest markets -- group vehicle sales rose over last year's comparable month for the first time in 2009, gaining 1.5 percent to 556,700 units.
Source: Reuters

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Opinion: Car Dealers Shouldn't Be Kicked to the Curb
By James T. Fleming

Bankruptcies needlessly crushing businesses
... Congress needs to pass legislation, introduced ... by Rep. Dan Maffei, D-N.Y., and others. This bill will mandate that the new Chrysler and GM comply with state "franchise laws." This would protect independently owned auto dealerships from arbitrary actions by manufacturers to shut them down; to force them to finance and order cars that can't be sold; or to require them to build fancy showrooms. These common-sense rules preserve dealers' rights. Just a few weeks ago, the Connecticut General Assembly passed and the governor signed into law the Connecticut Franchise Act, which protects dealers and consumers from anti-competitive practices and arbitrary actions by manufacturers. The pending bill in Washington would ensure the enforcement of this state law.
Source: The Hartford Courant

Editor's Note: James T. Fleming is president of the Connecticut Automotive Retailers Association.

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Quotable
 
"Terminating a dealership does not provide any material cost savings. The retail network, the land, the buildings, the employees, training -- the dealers pay for all of this."

   
-- NADA Chairman John McEleney, in testimony Friday before the House subcommittee on oversight and investigations, The Washington Post, June 12


"Since American taxpayers now own 60 percent of General Motors, we have a right to know just how the decisions affecting our constituents are made."

    -- Rep. Greg Walden, R-Ore., questioning the wisdom of closing auto dealerships around the country, ABCNEWS.com, June 12


 "I don't understand how they're costing you money. I think they're a revenue stream for you guys. And if for some reason this has to happen, I want to know why you're not taking care of people who spent 70 years and generations selling your cars."

    -- Rep. Mike Doyle, D-Pa., addressing executives of GM and Chrysler on Friday about the closure of dealerships nationwide, The Washington Post, June 12


"Mr. Henderson and Mr. Press, your corporations were built on the backs of people you see in this room. Each of you owe them and the taxpayers of this country a detailed of reasoning of your business decisions."

    -- Rep. Bruce Braley, D-Iowa, addressing executives of GM and Chrysler during a House subcommittee hearing Friday, CNNMoney.com, June 12


"It hurts. How do you put into words 81 years of your family's blood, sweat and tears? And all of it is for nothing now."

   
-- Rob Isakson, whose dealership closed last week after surviving 81 years of ups and downs, The Associated Press, June 13

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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