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Top 10 Stories
Dealer Closure Battle Rages
House Bill to Save Terminated Dealerships Passes Committee
GM Will Exit Bankruptcy With $48 Billion in Debt, Judge Says
Automakers' Swift Cases in Bankruptcy Shock Experts
Auto Dealer Joins U.S. Senate Race
Dealers Urged to Await Final CARS Rule, Attend Second CARS Webinar
GM's Fate Will Ride on the Success of Chevy
Hyundai's Rising American Star
U.S. Lawmakers Offer Bill to Spur Natural Gas Vehicles
Dealers Urged to Take Survey on Floorplan Loan Availability
Top 10 Stories
Dealer Closure Battle Rages

GM, Chrysler, White House officials try to block House bill reversing planned shutdowns
WASHINGTON -- White House officials and executives from General Motors Corp. and Chrysler Group LLC met with a top congressional leader Wednesday to try to reach a deal to head off legislation that would restore the rights of dealers the automakers want to close. GM's North American chief Troy Clarke; Mark LaNeve, GM vice president for sales, service and marketing; Chrysler Deputy CEO Jim Press; and John Bozzella, Chrysler vice president for external affairs, met with House Majority Leader Steny Hoyer for nearly 90 minutes on Capitol Hill about the contentious issue. Katie Grant, a spokeswoman for Hoyer, said the lawmaker wants a "fair and transparent process" that protects strong-performing dealers to save jobs and "give our nation's auto companies their best chance to succeed." House Judiciary Committee Chairman John Conyers, a Detroit Democrat, has tentatively set a hearing on the dealer closings for July 22, with top executives from both automakers expected to testify. Dealers plan to lobby Congress in favor of the bill Tuesday.
Source: The Detroit News

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House Bill to Save Terminated Dealerships Passes Committee

WASHINGTON -- Terminated dealerships would be restored to their status before General Motors and Chrysler LLC filed for bankruptcy this spring, under legislation that passed a House committee [Tuesday] night. But the measure could face procedural hurdles. A provision of the fiscal 2010 financial services spending bill would require GM and Chrysler to work through state courts rather than U.S. Bankruptcy Court if the automakers wanted to continue with the terminations, said Rep. Steven LaTourette, R-Ohio. LaTourette sponsored the dealer amendment that passed the House Appropriations Committee by voice vote [Tuesday] night. He said federal funding to GM and Chrysler would be cut off if they didn’t abide by the provisions of the bill. “Car companies have used bankruptcy to run roughshod over state bankruptcy laws,” LaTourette said in an interview. The spending bill, with the dealer amendment, is supposed to go to the House floor next Wednesday, LaTourette said. But at that time, the amendment could be subject to lawmaker attempts to excise it. Policy changes such as the dealer provision are not supposed to be included in spending bills, LaTourette said. Some lawmakers will ask the House Rules Committee early next week to issue a rule to protect the bill from so-called “point of order” challenges that would spike the dealer provision, he said.
Source: Automotive News

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GM Will Exit Bankruptcy With $48 Billion in Debt, Judge Says

General Motors Corp., which is preparing to sell its best assets to a streamlined new entity, will carry with it liabilities of $48.4 billion, a bankruptcy judge said. The new GM agreed to take on those obligations to benefit creditors, U.S. Bankruptcy Judge Robert Gerber in New York said July 7. Gerber previously approved the sale of most of GM’s business to a U.S. Treasury-funded buyer and said the company could complete the deal any time after today at noon.
Source: Bloomberg

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Automakers' Swift Cases in Bankruptcy Shock Experts

DETROIT -- In fewer than 45 days each, General Motors and Chrysler swept through government-sponsored sales in bankruptcy court — quick tours that most people in the legal community thought impossible not long ago. For businesses that follow similar legal strategies, the G.M. and Chrysler cases could pave the way for a faster trip through court. For creditors, it could mean less time to reach a deal, especially in situations where companies face strict deadlines from lenders, as the two carmakers did with the government.
Source: The New York Times

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Auto Dealer Joins U.S. Senate Race

Cleveland, [Ohio], auto dealer Tom Ganley announced his Republican candidacy for the U.S. Senate [last week], setting up a potentially expensive 2010 primary election against former U.S. Rep. Rob Portman of Cincinnati. Although he has never served in elected office, Ganley, 65, said ... that he thinks he can win the seat to be vacated at the end of next year by retiring Republican Sen. George V. Voinovich. "I have a great passion to see this through to a conclusion, to a victory," [he] said... Ganley runs Ohio's largest group of automobile dealerships, along with other companies dealing with finance and insurance. He started with a Rambler dealership in Euclid, [Ohio] in 1968, building it into today's Ganley Auto Group with 32 dealerships in northeastern Ohio.
Source: The Columbus Dispatch

Editor's Note: Tom Ganley represents metropolitan Cleveland dealers on NADA's board of directors.

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Dealers Urged to Await Final CARS Rule, Attend Second CARS Webinar

Interest in the “Cash for Clunkers” program is high, as shown by the 500-plus attendees at the first of a two-part NADA/NHTSA webinar on the CARS Act. The first webinar—an opportunity for NHTSA to provide an overview of the program and to hear what questions were on the minds of NADA members—also demonstrated the clear need to await the finalized implementation details from NHTSA before undertaking any “clunkers” transactions. Dealers engaging in transactions before July 24 risk violating the rules and could lose $3,500-$4,500 or face fines of up to $15,000 per violation. NADA members are strongly encouraged to participate in the webinar part-two, to be held once NHTSA finalizes the CARS rules, on or around July 24, the government’s deadline for CARS rules completion. The special rate of $199 includes both webinars. All participants in the first webinar will be emailed login information for the second webinar automatically. Registrants for the second webinar will receive a link to the archive of the first webinar, which they’ll be able to view and hear in its entirety, as well as login instructions for the second. For more information, visit www.nada.org/seminars or call (800) 252-6232, ext. 2.
Source: NADA Newswire

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GM's Fate Will Ride on the Success of Chevy

To lift the fortunes of a parent company that is closing or casting off three car brands -- Pontiac, Saturn and Saab -- Chevrolet will probably need to recapture the glory days of its sedans. But two-thirds of its sales and most of its profit now come from trucks, and its most celebrated cars are sports models, the Corvette and the newly launched Camaro.
Source: The Wall Street Journal

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Hyundai's Rising American Star

Though rising, Hyundai sits below its peers in the Automotive Lease Guide's rankings of how well the cars retain their value. Honda, which avoids big discounts and bulk sales, heads those charts. Still, the momentum is in Hyundai's favor. Five new cars to be released by 2011, including its first full hybrid for North America, will create more marketing buzz and showroom traffic.
Source: The Wall Street Journal

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U.S. Lawmakers Offer Bill to Spur Natural Gas Vehicles

WASHINGTON -- U.S. lawmakers on Wednesday unveiled legislation aimed at helping the nation wean itself off foreign oil by providing financial incentives for the use of vehicles fueled by natural gas. Sponsored by Democratic Senator Robert Menendez, the bill would extend for 10 years tax credits for purchasing vehicles that run on natural gas and installing natural gas refueling stations. "We saw last summer how the wild fluctuations in oil prices helped to wreck our economy, and we've seen how pollutants from dirty fuels are wrecking our planet," Menendez said at a press conference. In addition to extending the tax breaks, the bill would also raise the tax credit caps for consumers who buy natural gas-fueled vehicles and provide tax breaks for manufacturers of those vehicles. The bill would also provide grants for the development of light- and heavy-duty natural gas engines.
Source: Reuters

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Dealers Urged to Take Survey on Floorplan Loan Availability

While access to credit is still limited for both domestic and import dealers, NADA is working with Congress, the Department of the Treasury and the Federal Reserve Board to expand the availability of financing for dealers to purchase vehicle inventory. Expanding loan guarantee programs such as the Small Business Administration’s (SBA) Dealer Floorplan Financing Program is just one step in NADA’s federal efforts to get lenders to provide financing again. NADA is pursuing initiatives that will ensure dealers have access to financing at competitive rates, but it is important for NADA to have a full picture of the difficulties dealers are facing. While there is a great deal of anecdotal evidence, little numerical data is available related to the constriction of floorplan lines of credit and its impact on dealers. NADA urges dealers to take a few moments to participate in a 16-question online survey. Click here to take the survey.
Source: NADA Newswire

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Quotable
 
"I think the closing of these dealerships was punitive and secretive, and it's the most un-American thing for the government to help force you out of business and deprive you of the American dream."

    -- Rep. Steve LaTourette, R-Ohio, referring to his amendment that would require automakers who have taken government funding to reinstate agreements with dealerships dropped as part of bankruptcy proceedings, Detroit Free Press, July 9


"I believe Chevy is going to be the best franchise to own, better than Toyota."

    -- Texas dealer Tom Durant, who has doubled his portfolio of Chevy stores to four in recent months, The Wall Street Journal, July 9

Video Highlights
 

Media Coverage: The Tragedy of Dealer Closings (NADA-TV)


NADA's New Buy Now Campaign



No Dent in Demand for Some U.S. Cars (NBC)



Car Dealers Trying to Buy More Time (NBC)



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 Floorplan Credit Crisis (NADA-TV)


John McEleney's Testimony to Senate Committee (CNBC)
 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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