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Inside this issue
Understanding Particulars of G.M.'s Safety Recall
Dealers Unite Behind Barra as Damage Control Shifts to Them
The Consumer Financial Protection Bureau: A Toxic Workplace Begets Toxic Policies For Consumers
Audi Joins Mercedes in Posting Best Monthly Sales Ever
Smart Recycling Cuts F-150 Cost
My Little Pony, 50 Years Later
Click here for more auto industry news at NADAFrontPage.com. .
Top Stories
Understanding Particulars of G.M.'s Safety Recall

If you drive one of the 2.6 million General Motors cars recalled because of a faulty ignition switch, you're probably eager for the part to be replaced. Dealerships say they are gearing up to schedule the work as soon as the necessary parts become available — which is expected to happen starting Monday, according to G.M. But it could take months to repair all the affected cars. “We're very aware of the issue with the cars and we're concerned for our customers,” said Greg Cole, owner of Athens Chevrolet in Athens, Ga. While G.M. has said they are safe as long as extra items are removed from the key ring, some consumer advocates and lawmakers have urged G.M. to warn owners not to drive the cars until they are fixed, saying that they still pose a danger.

Although dealerships are expected to begin receiving replacement parts from G.M.'s supplier on Monday, it will take time to ramp up production to make all the parts needed. A G.M. spokesman, James Cain, said the company would send letters to owners notifying them when the new ignition switches were available, so they could contact local dealers to schedule the repairs; about one million parts are expected to be available by the end of August, and G.M. expects enough parts will be available for all cars by the end of October. Dealerships in areas expected to have large concentrations of cars needing repairs — like the Midwest — will receive priority initially, but availability should improve quickly as production expands, Mr. Cain said. You may hear from a dealer before you receive a letter; some dealerships are contacting owners, rather than waiting for customers to call, said Bill Fox, a partner in a group of dealerships that includes a Chevrolet location near Syracuse, N.Y., as well as vice chairman of the National Automobile Dealers Association.
Source: The New York Times
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Dealers Unite Behind Barra as Damage Control Shifts to Them

Recall work begins Monday; anxious customers get therapy from service departments

General Motors dealers applauded CEO Mary Barra's testimony on Capitol Hill this past week as she took the national stage in the ignition-switch recall storm. Now, the dealers know, attention will turn to them as parts to repair the switches start arriving in service bays this week. Dealers are lining up service technicians and loaner vehicles, even though they're unsure how many vehicles will be brought in. Recall customers will be offered loaner cars, towing and a $500 discount on new vehicles in addition to the free fix. Dealers hope those perks will be enough to offset any customer discontent and stave off a sales decline.

In the first quarter, GM issued 13 recalls covering 7 million vehicles globally. That compares with an average of 1.8 million vehicles recalled by GM annually in 2009-13. While in the nation's capital, Barra met with accident victims' families. That earned her high praise from several dealers. “She's doing what she can, but she's in a horrible situation,” says Jim Paul, co-owner of Valley Automotive Group in the Minneapolis-St. Paul area. He sells Buick, GMC and Chevrolet. Mark Scarpelli, owner of Raymond Auto Group in Antioch, Ill., calls Barra's handling of the situation “a fresh breath of air.” He says her meeting with the victims' families “took a lot of guts and was really, really nice.” Scarpelli owns two Chevrolet dealerships. He says 2,000 cars in his market are affected by the recall. He is unsure how many owners will come to him for service, but plans to have four to eight additional service technicians and service writers on certain shifts to accommodate any additional volume. He will add service hours if needed.
Source: Automotive News
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The Consumer Financial Protection Bureau: A Toxic Workplace Begets Toxic Policies For Consumers

A recent report conducted through internal investigation at the Consumer Financial Protection Bureau (CFPB) found multiple instances of employee discrimination and harassment. Be it a shrinking mortgage market, reduced access to credit card services, or the forced removal of much of the auto lending trade, the CFPB has certainly made its mark in waging war on consumers. Has the CFPB used its extraordinary lack of accountability to promote the interests of American consumers—or its own interests?

So far, the evidence as presented in our new Mercatus Center study supports the latter hypothesis. The agency has produced a number of policies which, while benefiting itself by expanding its regulatory footprint, provide little benefit to consumers—and in some cases are even likely harmful to those it purports to be helping. Consider, for example, CFPB’s assault on automobile financing by car dealers. Although CFPB’s jurisdiction is vast, Dodd-Frank explicitly prohibits CFPB from regulating lending by auto dealers. Yet even this small limit on its reach proved unpalatable to CFPB’s voracious appetite for power: using the cudgel of fair lending laws, the CFPB has informed banks (which supply the financing offered to consumers by the dealers) that they will be held responsible for any perceived disparate impact in lending patterns by the dealers, essentially deputizing banks as private arms of the federal law-enforcement machinery, enabling the CFPB to essentially evade Congress’s explicit limit on its reach. The CFPB’s probe has triggered bipartisan calls from Capitol Hill, including many Democrats from minority-heavy districts, demanding clarification on the CFPB’s methodology and basis for its claims. This fall Senator Warren called for an end to the auto dealers exception to the CFPB’s jurisdiction—but notably raised no objection to the CFPB’s clear evasion of existing congressional limits on its power.
Source: Forbes
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Audi Joins Mercedes in Posting Best Monthly Sales Ever

Audi AG, the world's second-largest maker of luxury cars, said March sales surged 15 percent, joining Mercedes-Benz in posting the best single month ever for deliveries because of rising demand in China. Audi's registrations rose to 170,450 vehicles, the Ingolstadt, Germany-based division of Volkswagen AG said in a statement. Mercedes-Benz, the third-largest maker of premium cars, said April 4 that demand in March climbed 13 percent as new compact models and the top-of-the-line S-Class sedan attracted buyers. The increases marked Audi's 51st straight monthly sales gain and Mercedes's ninth consecutive month of growth exceeding 10 percent.
Source: Bloomberg

Editor's note: The 2014 Automotive Forum, presented by NADA and J.D. Power on Tuesday, April 15, at the Grand Hyatt in New York City, includes a panel session on the luxury segment with Steve Cannon, president and CEO of Mercedes-Benz USA; Scott Keogh, president of Audi of America; David Zuchowski, president and CEO of Hyundai Motor of America; Michael Bartsch, vice president of Infiniti Americas; and Uwe Ellinghaus, Cadillac’s global marketing chief. Click here for the full agenda and to register.
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Smart Recycling Cuts F-150 Cost

Analyst says aluminum plan will save Ford $124 per truck

Innovative recycling that sorts aluminum by type and returns it to suppliers will save Ford Motor Co. $124 per pickup, compared with using conventional recycling methods, when production of the 2015 aluminum-bodied F-150 starts this fall, says a stock analyst. A report from CLSA Americas spells out the recycling system Ford is installing in its F-150 plants in Dearborn, Mich., and Kansas City, Mo. It says the more sophisticated recycling plan will cut the material cost of switching from the F-150's steel body to lighter, but more expensive, aluminum to $750 per vehicle.
Source: Automotive News

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My Little Pony, 50 Years Later

When the Ford Mustang was introduced 50 years ago this month, it was first to break from the gate in a market class that would come to be known as pony cars. With a long hood and a short rear deck — proportions carried forward by the Chevrolet Camaro, Plymouth Barracuda and many others — the Mustang looked ready to bolt. And bolt it did, as 22,000 wowed Americans placed orders for the car on April 17, according to Ford, the official first day of sales. Naming the car for a horse proved to be a stroke of marketing genius. Not just any horse, mind you (a car named Clydesdale might never have been so popular) but one that conjured images of rugged wild horses roaming the American West: The drama that imagery invoked was supported by the car's fresh style and a galloping steed front and center in the grille. Underneath, the Mustang was essentially Ford's Falcon, a solid compact that was available with V8 power and a 4-speed manual transmission. Those underpinnings were enough to get the pony car sales competition off to a fast start. Among the fans who will be celebrating the Mustang's 50th birthday will be some owners who bought the car when it first went on sale. Click here for the stories of some early buyers who could never let go.
Source: The New York Times
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Quotable

"She [Mary Barra] is acting in a way that GM would not have acted in the past and the committee is asking real hard questions. She’s done everything I would expect her to do. There’s just no way to snap your fingers and make this thing good." 

      ---  Jim Paul, co-owner of Valley Automotive Group in the Minneapolis-St. Paul area that sells Buick, GMC and Chevrolet, commenting on how GM CEO Mary Barra is handling the recall situation, Automotive News, April 5  

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