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GM Emerges from Bankruptcy
NADA Statement on General Motors' Emergence from Bankruptcy
Majority of House Supports Bill to Reverse Dealer Closings
Whirlwind Auto Deals Raise Conflict Questions
Dealers Urged to Await Final Cash for Clunkers Rule, Attend Second 'Clunkers' Webinar
Dealers Urged to Take Survey on Floorplan Loan Availability
Top Stories
GM Emerges from Bankruptcy

The new General Motors arose on Friday as lawyers finished an all-night paperwork session transferring the bulk of the automaker's assets to a company controlled by the U.S. government. Once the world's largest and most powerful automaker, new GM is now cleansed of massive debt and burdensome contracts that would have sunk it without federal loans. The massive transfer of factories, money and intellectual property was completed about 6:30 a.m., according to a person briefed on the situation, clearing the way for a smaller and faster company better equipped to compete in the brutally tough global automotive market. One bankruptcy expert called GM's 40-day case the fastest ever for a company of its size. In addition to the U.S. government's controlling interest, the United Auto Workers union gets a 17.5 percent stake of the company through its retiree health care trust, and the Canadian government will control 11.7 percent. The remaining shares went to bondholders of the old company. The parts of GM not moving to the new company will become part of "old GM," a collection of assets and liabilities that will be sold to pay creditors.
Source: The Associated Press

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NADA Statement on General Motors' Emergence from Bankruptcy

McLEAN, Va. – The following is a statement from John McEleney, chairman of the National Automobile Dealers Association, on General Motors' emergence from bankruptcy:

“This has been a difficult and wrenching process for everyone involved. Obviously, for GM to get out of bankruptcy so quickly is a good thing. This will now allow GM dealers to focus their full attention on selling and servicing GM products. This also helps restore some certainty to GM’s future which will help stabilize the entire auto industry. The auto industry has been in an economic slump, with the GM bankruptcy serving as a major distraction for the American public. We hope the emergence of GM from bankruptcy will mark a turning point toward restoring greater consumer confidence. The National Automobile Dealers Association will continue to pursue legislative relief (H.R. 2743/S. 1304) to protect state franchise laws and other relief for those GM dealers adversely affected by this process.”
Source: NADA Newswire

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Majority of House Supports Bill to Reverse Dealer Closings

WASHINGTON -- A majority of House members have signed onto a bill to reverse the closing of 789 Chrysler dealerships and block General Motors Corp. from closing more than 1,300, while the full House could vote on the bill as early as next week. Late Tuesday, the House Appropriations Committee approved by a voice vote an amendment that also seeks to reverse the dealer closings. GM's vice president for sales, service and marketing, Mark LaNeve, said he and his boss, GM North American President Troy Clarke, met with more than 20 members of Congress over the last two days. LaNeve said GM, in the second quarter of 2010, will take another look at its closing dealers to reconsider some if the market or GM's sales improve. More than 100 auto dealers from across the country will join with senior members of Congress on Tuesday July 14 on Capitol Hill to make their case for immediate passage of the bill. Two top White House auto advisors, Steve Rattner and Brian Deese, met with House Majority Leader Steny Hoyer and GM and Chrysler executives for nearly 90 minutes Wednesday in an effort to reach a deal to head off legislation.
Source: The Detroit News

Editor's Note: NADA supports the Automobile Dealer Economic Rights Restoration Act of 2009, sponsored by Rep. Daniel Maffei, D-N.Y., which now has 230 cosponsors (135 Democrats and 95 Republicans). The Senate companion, S. 1304, introduced by Sen. Charles Grassley, R-Iowa, has 17 co-sponsors (10 Democrats and 7 Republicans). Please check to see if your Representatives and especially if your two Senators have co-sponsored the legislation. Click here for a list of co-sponsors by state. If your Members of Congress are not on the list, please call them today to ask them to co-sponsor the legislation. Members of Congress can be located at www.house.gov or www.senate.gov.

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Whirlwind Auto Deals Raise Conflict Questions

NEW YORK -- The Obama administration's dash through the bankruptcies for General Motors Corp and Chrysler is nearly done, but the debate about the government's conflicted role in reshaping the American auto industry has only just begun. While the administration has been praised for its rapid reorganizations of GM and Chrysler, it has also been blamed for placing itself and its officials in situations with conflicts of interest. The U.S. government stepped in to save GM by becoming its largest creditor and majority investor, positions that inevitably clashed with its role as regulator and referee of its pending deals with outside investors. "Whenever you have a group that is regulator, owner and funder, there is a massive conflict of interest," said David Logan, associate dean at the University of Southern California's Marshall School of Business. ... "I'm sure in the fullness of time we'll all look back and think of things that might have been done differently, or perhaps should have been done differently," Steve Rattner, head of the autos task force, said this week. "These were tough, tough choices and we still have some in front of us and we're making them as best we can," he said.
Source: Reuters

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Dealers Urged to Await Final Cash for Clunkers Rule, Attend Second 'Clunkers' 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 our members’ minds—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 to $4,500 or face fines of up to $15,000 per violation. NADA members are strongly encouraged to participate in the second Webinar, 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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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
 
" ... for GM to get out of bankruptcy so quickly is a good thing. This will now allow GM dealers to focus their full attention on selling and servicing GM products. We hope the emergence of GM from bankruptcy will mark a turning point toward restoring greater consumer confidence."

   
-- NADA Chairman John McEleney, in a statement on General Motors' emergence from bankruptcy, NADA Newswire, July 10
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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