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Wednesday, Aug. 5, 2009 RSSSEND TO A FRIENDPRINT
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Top Stories
'Clunkers' Rebates Look Likely for Another Month
Transportation Chief: 'Clunkers' is Huge Success
Dealers' Clunker Payments Start Today, Feds Say
Economists Upgrade Second-Half GDP Forecasts
Lean Inventories Imperil Car Sales
Many 'Clunker' Dumpers Buy Foreign
Toyota Restructures, Too, but at Its Own Pace
White House to Award $2.4B for Advanced Batteries, Plug-in Vehicles
Opinion: Let Consumers Decide Auto Dealers' Fate
Top Stories
'Clunkers' Rebates Look Likely for Another Month

WASHINGTON – The Senate has cleared the way for a vote extending the "cash-for-clunkers" program, which offers car buyers rebates of up to $4,500 for trading in their gas-guzzlers for new, higher-mileage models, setting aside Republican opposition to the plan. Senate Majority Leader Harry Reid said Tuesday he had the votes to pass a $2 billion extension already approved by the House. Lawmakers hoped for a vote late Wednesday or Thursday. "We'll pass 'cash for clunkers' before we leave here," Reid, D-Nev., said after Democrats lunched at the White House with Obama, who has vigorously pushed the extension as a much-needed boost for the economy.
Source: The Associated Press

Editor's Note: NADA Chairman John McEleney is scheduled to appear today on CNBC's "The Call," hosted by Larry Kudlow and Trish Regan, at 11:40 a.m. EST to discuss the clunkers program.

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Transportation Chief: 'Clunkers' is Huge Success

LaHood calls the auto rebate program ‘a huge boost’ for the economy
WASHINGTON - Transportation Secretary Ray LaHood proclaimed "cash-for-clunkers" a roaring success Wednesday just as the Senate seems poised to push the popular program back into high gear with another $2 billion in cash. LaHood said that in just a brief time, "the government has proved we can get money out the door and sell almost 160,000 cars." In an interview on CBS's "The Early Show," he called the car-purchase program "a huge boost for the economy."
Source: The Associated Press

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Dealers' Clunker Payments Start Today, Feds Say

DOT chief: 'We fixed our Web site problems'
WASHINGTON -- Dealers will start getting reimbursed today for cash-for-clunkers credits paid to consumers, Secretary of Transportation Ray LaHood said [Tuesday]. "We fixed our Web site problems," LaHood said at a news conference here. "We believe processing will go much smoother." Because of bottlenecks in the Transportation Department's computer reporting system, many dealers have had problems filing applications since the program began July 24. Many dealers had begun making deals weeks in advance, adding to the initial backlog problem.
Source: Automotive News

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Economists Upgrade Second-Half GDP Forecasts

Economists are predicting a brighter second half of the year as the cash-for-clunkers program boosts spending and U.S. manufacturers ramp up their production. Revisions began after last week's gross-domestic-product report, showing the economy contracted at a better-than-expected 1%. This week, the upward revisions have continued on hopes the government's auto stimulus program would propel consumer spending in coming months and force auto makers to make more new cars than previously planned. "When you combine leaner inventories with more sales, that's the fundamental reason for being more optimistic about at least the second half of this year," said Mark Zandi, chief economist for Moody's Economy.com.
Source: The Wall Street Journal

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Lean Inventories Imperil Car Sales

The clunker program ... sparked a surge in sales in late July, leaving many dealers with lean stocks of cars and trucks on their lots. Chrysler's stocks are tighter than those of most other auto makers because the company shut down all its plants while it reorganized in bankruptcy court in May and part of June, and shipments to its franchises ground to a halt. Still, Toyota Motor Corp. only had enough Prius hybrids in stock at the end of July to last 13 days at the current rate of sales, according to Autodata Corp. It had a 34-day supply of Corolla compacts and a 37-day supply of Camrys.
Source: The Wall Street Journal

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Many 'Clunker' Dumpers Buy Foreign

$664 Million Has Been Requested in Vehicle Vouchers; Most Top Sellers Are Japanese
Four of the five top-selling cars in the government's "Cash for Clunkers" program are made by foreign automakers, according to new data released Tuesday by federal transportation officials. Transportation Secretary Ray LaHood said 157,000 trades had occurred as of Tuesday morning, eating up $664 million of the $1 billion appropriated for the effort. More than 80 percent of the vehicles turned in were trucks and sport-utility vehicles, the government said. The top-selling new car is the Ford Focus, followed by the Toyota Corolla, Honda Civic, Toyota Prius and Toyota Camry.
Source: The Washington Post

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Toyota Restructures, Too, but at Its Own Pace

DETROIT — General Motors, Ford and Chrysler are not the only ones working through wrenching restructurings. Toyota is, as well, though with a much lower profile. Still, its new president, Akio Toyoda, has moved quickly since taking charge in June, when he declared his dismay at the company’s financial crisis. Toyota dealers and employees, many of whom know Mr. Toyoda from the years he worked in the United States, are eager for a shot of adrenalin from their new boss, the grandson of Toyota’s founder. “He knows the business,” said P. Compton Cramer Jr., the owner of Cramer Toyota of Venice, Fla., who first met Mr. Toyoda a decade ago.
Source: The New York Times

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White House to Award $2.4B for Advanced Batteries, Plug-in Vehicles

The White House today will award $2.4 billion in grants for research on advanced batteries and vehicle components, and to purchase plug-in electric vehicles. President Barack Obama, Vice President Joe Biden and Energy Secretary Steven Chu will announce the 48 winners in Indiana, Michigan and North Carolina. The White House said the grants, which do not need to be repaid, will help "establish a domestic manufacturing industry able to produce the batteries and drive systems for the next generation of advanced vehicles here in the U.S." Obama wants 1 million plug-in electric vehicles on the road by 2015 -- an ambitious call, since only a few hundred are on the roads today.
Source: The Detroit News

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Opinion: Let Consumers Decide Auto Dealers' Fate
By David Hyatt

Top GM executives have been quoted as saying it doesn't matter whether GM has 6,000 dealers or 3,000 dealers, the cost to GM is basically the same. In fact, almost all of an automaker's revenue comes from its dealers. Reducing dealers ... guarantees a further drop in market share and revenue both for GM and Chrysler, and will do nothing to make either company more economically viable in the long term. This is why so many members of Congress are demanding transparency in the process that led to such massive dealer cuts. It's why almost 300 members of Congress are co-sponsoring the Automobile Dealer Economic Rights Restoration Act. And it's why a powerful voice for small business, the National Federation of Independent Business, supports the dealer rights bill. The consumer should determine when a dealer exits the business.
Source: The Detroit News

Editor's Note: David Hyatt is NADA Vice President for Public Affairs.



 

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Quotable
 
"We'll pass 'cash for clunkers' before we leave here."

    -- Senate Majority Leader Harry Reid, The Associated Press, Aug. 5


"When you combine leaner inventories with more sales, that's the fundamental reason for being more optimistic about at least the second half of this year."

   
-- Mark Zandi, chief economist for Moody's Economy.com, The Wall Street Journal, Aug. 5


"This is a huge boost for the economy."

   
-- Transportation Secretary Ray LaHood, speaking about the "clunkers" program on CBS's "The Early Show," The Associated Press, Aug. 5


"Reducing dealers ... guarantees a further drop in market share and revenue both for GM and Chrysler, and will do nothing to make either company more economically viable in the long term. This is why so many members of Congress are demanding transparency in the process that led to such massive dealer cuts."

   
-- David Hyatt, NADA Vice President for Public Affairs, The Detroit News, July 31

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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