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Inside this issue
Barra: 'We Failed'; GM Fires 15 Over Ignition Switch Crisis
Booming Car Sales Bode Well for Economy
Commentary: Employment at New-Car Dealerships Rising
More Growth in Auto Loans, Report Shows
Record Fuel Economy for U.S. Light Vehicles in May
Honda, Mercedes Rank Best for Quality and Value in New Study
M-B Breaks Ground on New West Coast Sales, Training Center
Click here for more auto industry news at NADAFrontPage.com. .
Top Stories
Barra: 'We Failed'; GM Fires 15 Over Ignition Switch Crisis

General Motors CEO Mary Barra said the Detroit automaker fired 15 people and disciplined five in saying the automaker failed repeatedly in delaying a recall of 2.6 million cars linked to at least 13 deaths and 47 crashes for more than a decade. “We failed these customers,” Barra told more than 1,000 employees at a town hall meeting broadcast around the world. “We didn’t do our job.... We will face up to our mistakes and we will take them head on.” The report, which followed a three-month investigation by former U.S. attorney Anton Valukas, is a “couple hundred pages,” GM said. NHTSA will make the report public later today. Barra said the automaker will compensate victims and create a compensation fund. She said an internal report shows no evidence of a conspiracy to hide the problem or evidence that senior management knew of the problem. She called the report “brutally tough” and “enormously painful.” She said GM would quickly implement the eight major recommendations in the internal report.
Source: The Detroit News

Editor's note: For more information on the GM recall, go to www.gmignitionupdate.com or www.safercar.gov.

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Booming Car Sales Bode Well for Economy

One sector of the economy that is absolutely hitting it out of the park is auto sales. Car makers on Tuesday delivered some jaw-dropping May sales numbers, with nearly every company churning out numbers that beat analysts' forecasts. Overall vehicle sales are on track to hit 16.8 million units this year. The strong sales, combined with a report of solid orders for factory goods made in the U.S., are boosting the outlook for economic growth later this year. Another surprise from the auto sector was the strength of sales at General Motors, despite nearly 14 million vehicle recalls from the company this year. Analysts weren't expecting much, and the company reported a staggering 285,000 vehicles sold -- triple the expectations of some experts.
Source: CBS MoneyWatch
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Commentary: Employment at New-Car Dealerships Rising
By Forrest McConnell, III / NADA Chairman

Selling cars is not the only thing franchised new-car dealers contribute to the nation's economy. Next to stocking their showrooms and lots with vehicle inventory, auto dealers create many jobs in their communities. Between the need for quality sales consultants and expert service technicians, America's new-car dealers employ 1 million people nationwide. Rising auto sales are having a positive impact on the economy, and dealers across the country are hiring. More than 1 million people were employed at U.S. new-car dealerships last year. It marked the first time reaching this milestone since falling during the recession in 2009.

New-car dealers employed 1,008,800 people in 2013, up 3.4 percent from the previous year, says NADA Data 2014, an annual report on dealership sales and financial trends. New-car dealers employed an average of 57 people with an average payroll of $3 million last year, up 3 percent. Total payroll for all new-car dealerships in the U.S. was $53.7 billion last year. Franchised new-car dealerships are an economic engine on Main Street, U.S.A, and these good paying jobs cannot be outsourced or sent overseas.

For a complete financial profile of U.S. new-car dealerships, click here for NADA Data 2014.
Source: NADAFrontPage.com
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More Growth in Auto Loans, Report Shows

Outstanding auto loans and leases combined hit $884 billion as of April 30, a record high and a 10.8 percent increase from the same date a year ago, credit bureau Equifax reported this week. Even though the average amount borrowed is on the rise, affordability doesn't seem to be a problem, says Dennis Carlson, assistant deputy chief economist for Equifax. “While automobiles are more expensive than they have been in the past, when you adjust for inflation, cars are actually quite affordable compared to what we have seen in the past,” he told Automotive News in an e-mail.
Source: Automotive News
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Record Fuel Economy for U.S. Light Vehicles in May

The WardsAuto Fuel Economy Index indicates the average fuel economy of light vehicles sold in the U.S. in May rose to an all-time high of 25.5 mpg, 3.1% over year-ago and 21.6% above the base index score set in fourth-quarter 2007. The index rating for May was 1.4% above April's 25.1 mpg, the largest month-to-month increase since January 2013. A market shift to smaller vehicles and hybrid and electric powertrains was the primary factor in the boost.
Source: WardsAuto
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Honda, Mercedes Rank Best for Quality and Value in New Study

Honda and Mercedes led the way in a tally of brands ranked by new-vehicle buyers for quality and value, a study conducted by ALG found. Honda topped the rankings of mainstream brands. It was followed by Toyota, Volkswagen, Subaru, GMC, Ford, Buick, Nissan, Mazda and Chevrolet, according to the study released Wednesday. Among luxury brands, Mercedes-Benz placed first, ahead of Lexus, BMW, Porsche, Audi, Maserati, Infiniti and Acura.
Source: Automotive News
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M-B Breaks Ground on New West Coast Sales, Training Center

Mercedes-Benz USA began construction on a new home for its West Coast operations that will consolidate a vehicle preparation center, a learning and performance center and a regional sales office. The company expects operations at the Long Beach, Calif., site -- once home to Douglas Aircraft Co. and later a Boeing 717 aircraft manufacturing facility -- to begin in the first quarter of 2015. Mercedes said it will close its vehicle preparation center in Carson, Calif., a learning and performance center in Rancho Cucamonga, Calif., and its western regional office in Irvine, Calif., when the new West Coast operation center opens.
Source: Automotive News
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Quotable

"We didn't do our job.... We will face up to our mistakes and we will take them head on."

   
-- GM CEO Mary Barra, commenting on the results of an internal investigation following the ignition switch recall, The Detroit News, June 5

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