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Tuesday, Aug. 4, 2009 RSSSEND TO A FRIENDPRINT
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Top Stories
Democrats Trying for GOP Support for Clunker Funds
Clunker Plan Gives Car Sales a Lift
Trade-In Program Tunes Up Economic Engine
Toyota's U.S. Drop Eases on 'Clunkers'; Hyundai Gains
'Clunkers' Staff Doubled to Handle Paperwork Backlog
Opinion: What a Successful Clunker Catastrophe
NADA Director Election Results Are In
Top Stories
Democrats Trying for GOP Support for Clunker Funds

Facing a White House deadline, Senate Democrats are struggling to win over enough reluctant Republicans to pass a $2 billion extension of a popular rebate program that gives consumers up to $4,500 to trade in their old gas guzzlers for more fuel-efficient vehicles. Senate discussions are expected to continue Tuesday after the Obama administration and backers of the "cash for clunkers" program picked up support from three lawmakers who wanted the program limited to the purchase of even more fuel-efficient vehicles. Data released by the administration showed the new vehicles purchased under the program were 61 percent more fuel-efficient than the trade-ins. Republican Sen. Lindsay Graham said Tuesday morning he thinks the Senate will approve it. The South Carolinian said, "I think the Senate will act this week and get some of the clunkers off the road." As the Senate works to extend the program, many dealers said they were concerned they could be on the hook for some of the money if the Senate fails to act. John McEleney, chairman of the National Automobile Dealers Association, said his organization was warning dealers there were no guarantees they would be reimbursed for sales they make under the program this week. McEleney said he has stopped offering cash-for-clunkers deals at his own Iowa dealerships.
Source: The Associated Press

Editor's Note: NADA's Legislative Affairs Office is warning dealers that the "cash-for-clunkers" program is in jeopardy unless the Senate adds additional funding this week. In a Legislative Alert sent to members Monday, NADA explains that passage of H.R. 3435 will ensure payment for all dealers who have completed "clunkers" transactions, but have not yet been reimbursed. "The Senate must resolve the tremendous uncertainty for dealers and consumers by passing H.R. 3435 without amendment in the next few days," the alert states. Dealers and dealership employees are urged to immediately call their Senators to support H.R. 3435 to ensure additional funding. With the House out of session, any changes to the "clunker" program made by the Senate will kill the bill and force the Department of Transportation to suspend the program. Senators should be urged not to make changes to the bill. Senators can be reached through the Capitol switchboard at (202) 224-3121. For more updates on the "clunkers" program, visit www.nada.org.

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Clunker Plan Gives Car Sales a Lift

July's U.S. Rate Highest Since Last August; Makers Raise Production, but Worry Program May End
U.S. auto sales in July climbed to their highest pace in 11 months, as customers rushed to showrooms amid uncertainty about the future of the federal government's "Cash for Clunkers" incentive program. The closely watched annualized selling pace rose to 11.24 million vehicles, a significant jump from June's 9.69 million rate.
Source: The Wall Street Journal

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Trade-In Program Tunes Up Economic Engine

Of the nearly $800 billion of stimulus funds, the $1 billion "Cash for Clunkers" program may offer the most bang for the buck in terms of jump-starting the economy. Car companies may need to raise production as a result, and to do that, they will have to boost their own depleted stockpiles of raw materials and parts. At his eight Boston-area dealerships, Village Automotive Group President Raymond Ciccolo says the sales he has made on the clunkers program are to customers who wouldn't normally buy new cars. "Any time you create traffic, you create the ability to sell a car," he said. "And if we can start selling cars now, they start coming back for oil changes, for body work, for new snow tires."
Source: The Wall Street Journal

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Toyota's U.S. Drop Eases on 'Clunkers'; Hyundai Gains

Toyota Motor Corp.’s sales in the U.S. dropped at the slowest pace this year and the carmaker outsold Ford Motor Co. for the first time in three months as government- backed rebates helped Asian auto brands beat estimates in July. Honda Motor Co.’s sales fell 17 percent, Nissan Motor Co.’s declined 25 percent and Hyundai Motor Co. had a 12 percent increase. The results may signal the start of a recovery for the industry, which has been in the worst slump in demand since at least 1976.
Source: Bloomberg News

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'Clunkers' Staff Doubled to Handle Paperwork Backlog

The U.S. Transportation Department is doubling the number of contract workers to process “cash for clunkers” transactions in an attempt to clear a backlog of dealer applications that grew to hundreds of thousands. The Transportation Department has arranged with Citigroup Inc., which is processing applications, to provide twice as many contract workers immediately and three times as many by sometime next week ... “We hope to expedite the process and speed up the process for dealers to get these deals in the pipeline,” Transportation Secretary Ray LaHood said [Monday] in an interview with Bloomberg Television.
Source: Bloomberg News

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Opinion: What a Successful Clunker Catastrophe
By Peter Brown

Frustrating, maddening, hastily passed but slow, underfunded, cluelessly administered. Also fabulously successful. The now-infamous cash-for-clunkers program injected an overdose of steroids into the near-corpse of the automotive market. Congress cheaped out when it settled on a billion-dollar program designed to last a quarter. It was a test. It turned out to be barely a quiz with just one obvious answer. But if hundreds of billions for banks helped slow the fall of the economy, a few billion more could help rebuild it through car sales and car and parts manufacturing rippling through the economy.
Source: Automotive News

Editor's Note: Peter Brown is associate publisher and editorial director of Automotive News.

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NADA Director Election Results Are In

Two NADA at-large directors and two directors representing their states have been elected. They are:

  • Maryland: David Williams, Jr. (Anchor Pontiac Buick GMC) succeeds Joseph "Tad" Hinder.
  • Nevada: James “Jim” R. Marsh (Jim Marsh Mitsubishi Suzuki Kia) succeeds Tom Dolan.
  • At-Large Minority East: Henry A. Ware, Jr., (Southaven Buick Pontiac GMC, Southaven, Miss.) succeeds Larry Brown.
  • At-Large Minority West: Donald “Don” P. Hicks (Shortline Auto Group, Aurora, Colo.) succeeds Dale Early.

Eighteen directors were re-elected: Rick Morrison, Alaska; Bill Willis, Del.; George Nahas: Fla.; Ramsey "Bub" Way, Ga.; David Cox, Ind.; Marshall Hebert, La.; Jim Waldron, Mich.; George Gorno, Metro Detroit; Bill Schicker, Mo.; Bill Underriner, Mont.; Brian Hamilton, Neb.; Jack Tulley, N.H.; Don Chalmers, N.M.; Gene Smith, Okla.; Peter Barry, R.I.; Ted Russell, Tenn.; Michelle Primm, at-large woman east; Kathy Sims, at-large woman west. They will begin serving their three-year terms in February 2010 at the annual convention to be held in Orlando, Fla.
Source: NADA Newswire

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Quotable
 
"The Senate must resolve the tremendous uncertainty for dealers and consumers by passing H.R. 3435 without amendment in the next few days." 

    -- NADA Legislative Alert on the "cash-for-clunkers" program, Aug. 3



"We are at this time saying that if [dealers] proceed, they do so at their own risk." 

   
-- NADA Chairman John McEleney referring to the status of the "clunkers" program, The Wall Street Journal, Aug. 4


 
"I think the Senate will act this week and get some of the clunkers off the road."

   
-- Republican Sen. Lindsay Graham predicting the Senate will approve a $2 billion extension of the "clunkers" program, The Associated Press, Aug. 4


"The good news is that, after seeing the figures so far, I believe the best solution is to continue and extend the program as it is."

   
-- Sen. Dianne Feinstein, D-Calif., who said Monday she'd back additional funding for the "clunkers" program after initially voicing skepticism about its environmental benefits, McClatchy Newspapers, Aug. 3

Video Highlights
 

GM Still Government Motors? (Fox Business)


Helping Dealers Left Out of New GM (Fox Business)



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)



Fighting the Dealers' Fight (CNBC)



Cutting Dealers a Mistake (Fox Business)



Vice Chairman Tonkin on Chrysler Closures (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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