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Inside this issue
Barron's: Tesla Is A 'Lemon' Without A Cheaper Battery
GM Slashes Price of Chevrolet Volt to Boost Stalling Sales
States Debate Taxing Green Cars to Recover Lost Gas Taxes
Detroit's Big Three Rebound, But Big Risks Remain
Ford to Hire 800 More Salaried Workers
OSHA Targeting Dealerships
Battery Maker Exide Files Bankruptcy After California Officials Shut Plant
Colorado Dealers Pull Polluters Off the Road
Click here for more auto industry news at NADAFrontPage.com. .
Top Stories
Barron's: Tesla Is A 'Lemon' Without A Cheaper Battery

Tesla's stock was down 2.5% to below $99.33 in the first minutes of trading [Monday]. This is well off its closing high of $110.33. This comes after Bill Alpert at Barron's wrote that Tesla's Model S "owes its better-than-200-mile range to batteries costing tens of thousands of dollars." Tesla needs to drastically cut battery costs by 2016 when it plans to launch a car that is more affordable. "If Tesla's next-generation car can't go the distance at half the price, its stock will head much lower," Alpert wrote. The sub-head of the summed up Alpert's stance. "Tesla's electric car offers a quiet, powerful ride. But unless it comes up with a cheaper, stronger battery, the stock could turn out to be a lemon.
Source: Business Insider

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GM Slashes Price of Chevrolet Volt to Boost Stalling Sales

General Motors has cut the price of the 2013 Chevrolet Volt by $4,000 to boost stalling sales. Nearly three years after the Volt debuted, sales of the extended-range electric car appear to be hitting a wall, and the steeper incentives will make the car even costlier for GM. The price cuts come in the form of incentives of as much as $4,000 for those buying 2013 Volts and up to $5,000 for 2012 Volts. Those incentives are in addition to a $7,500 federal tax credit and a $1,500 state tax credit for those who live in California. With a starting price of $39,995, the final cost of a 2013 Volt could now be as low as $28,495 for non-California residents.
Source: Detroit Free Press
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States Debate Taxing Green Cars to Recover Lost Gas Taxes

Hybrid and electric cars are sparing the environment. Critics say they're hurting the roads. The popularity of these fuel-efficient vehicles is being blamed for a drop in gasoline taxes that pay for local highway and bridge maintenance, with three states enacting rules to make up the losses with added fees on the cars and at least five others weighing similar legislation. "The intent is that people who use the roads pay for them," said Arizona state Senator Steve Farley, a Democrat from Tucson who wrote a bill to tax electric cars. "Just because we have somebody who is getting out of doing it because they have an alternative form of fuel, that doesn't mean they shouldn't pay for the roads." State and local gas-tax revenue has declined every year since 2004, falling 7 percent to $37.9 billion in 2010, according to inflation-adjusted data from the Institute on Taxation and Economic Policy, a Washington-based nonpartisan research group.
Source: Bloomberg
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Detroit's Big Three Rebound, But Big Risks Remain

General Motors achieved a significant milestone this past week, the maker regaining the spot it long held on the much-watched S&P 500 stock index. The significant step came barely a month before the fourth anniversary of GM's emergence from Chapter 11, a bankruptcy that likely would have destroyed the automaker if not for a $50 billion federal bailout. There are other signs GM has turned the corner including strong May sales, an eagerly sought increase in its U.S. market share – and the concurrent surge in its stock price which finally has surpassed the $33 level set during a November 2010 IPO. And GM isn't alone among Detroit's Big Three automakers. Ford has posted an equally significant jump in sales, share and stock price, while Chrysler has maintained a steady month-after-month increase in volume that has continued unabated since it emerged from its own bankruptcy four years ago. That has helped drive up the stock price for Fiat S.p.A., the Italian automaker that took control of Chrysler as part of its own bailout process. That's not to say Detroit's Big Three can ease up on the throttle and blithely assume that success is their birthright, an errant attitude that led to their near collapse during the days leading up to the recent recession – which saw the worst downturn in the U.S. automotive market since the Great Depression. “Even though things are looking good, they can't guarantee success,” cautions Stephanie Brinley, automotive analyst with IHS Automotive. If anything, competition is more intense than ever, with manufacturers from Europe, Japan and Korea ramping up their own game.
Source: NBC News
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Ford to Hire 800 More Salaried Workers

Ford Motor Co. plans to add 800 white-collar U.S. workers during the next six months, bringing its total number of salaried hires this year to 3,000, the automaker confirmed Monday. The new jobs — primarily in engineering, information technology, product development and manufacturing — will be in addition to the 2,200 new salaried jobs Ford announced earlier in the year. With demand for new cars and trucks poised to top 15 million light vehicles in the United States this year, domestic auto and parts factories are running at nearly maximum capacity for the number of workers on hand. Industry analysts predict that carmakers will expand both their workforces and facilities. Already, Detroit's Big Three have all announced additions of thousands of hourly workers set for this year. Ford's newest move — its largest single-year salaried hiring effort in more than a decade — adds another batch of white-collar workers to the hiring spree. General Motors Co. also is in the process of adding approximately 4,000 white-collar jobs at four IT Innovation Centers in Atlanta, Phoenix, Austin, Texas, and Warren in Macomb County.
Source: The Detroit News
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OSHA Targeting Dealerships

OSHA is targeting automotive repair and maintenance businesses, including new-car dealerships, through a Region 8 Local Emphasis Program. This focused inspection activity, scheduled for between April 16 and at least Sept. 30, 2013, stems from five complaints OSHA Region 8 received in FY 2010, all of which resulted in citations. NADA urges dealerships nationwide to review the inspection directive and their health and safety compliance. Dealerships with specific questions regarding their compliance should contact NADA Regulatory Affairs at regulatoryaffairs@nada.org or their state or local dealer association.
Source: NADA Regulatory Affairs
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Battery Maker Exide Files Bankruptcy After California Officials Shut Plant

Exide Technologies, the 125-year-old battery maker, filed for bankruptcy after California environmental regulators shut down one of the company's lead-recycling plants. After the April shutdown in Vernon, Calif., Exide sped up its restructuring plans by hiring law firm Skadden, Arps, Slate, Meagher & Flom LLP and financial adviser Alvarez & Marsal North America LLC, according to court records. The company, based in Milton, Ga., listed debts of $1.14 billion and assets of $1.89 billion in its Chapter 11 filing. The filing won't affect obligations outside the U.S., Exide said in a statement. Exide has about 3,600 employees and operations in more than 80 countries, making lead-acid batteries used in cars, trucks, tractors and boats. Exide was once a major auto industry battery supplier, and was headed for about three years by longtime auto industry executive Bob Lutz.
Source: Bloomberg
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Colorado Dealers Pull Polluters Off the Road

It's one of the nation's great environmental success stories. While Americans have driven increasingly more total miles, the air has become cleaner. The Environmental Protection Agency reports that between 1970 and 2011, American car travel increased 167%, yet emissions of six common pollutants declined 68%. Perhaps nowhere is this more evident than in Denver, where an infamous “brown cloud” cloaked the city and even the foothills of the Rocky Mountains in the 1970s and 1980s. While Denver's air and mountain views are clearer today, reducing air pollution presents a complex challenge, with multiple contributing factors and no simple fixes. Enter Colorado's new-car dealers, who identified a specific way they could be part of the solution. They based their approach on the research of University of Denver Professor Donald Stedman, a national auto-emissions expert who notes that a small percentage of old and poorly maintained vehicles pollute more than all other vehicles combined.

This realization planted a seed of an idea that grew into the Clear the Air Foundation. Founded by the Colorado Automobile Dealers Assn. as a 501(c)3 charitable and educational nonprofit, the foundation accepts donations of old cars, just like other car-donor programs. Contributors are eligible for the same tax benefits. In its two years, the foundation has removed 645 high emitters from the road. The vast majority were trade-ins donated by Colorado new-car dealers.
Source: WardsAuto
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Quotable
"Tesla's electric car offers a quiet, powerful ride. But unless it comes up with a cheaper, stronger battery, the stock could turn out to be a lemon." 

      --- Bill Alpert, from Barron's in an article on the high-cost of Tesla's batteries, Business Insider, June 10

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