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Inside this issue
CFPB Hearing Reinforces Need for Transparency Legislation
Tesla's Attempt to Upend Dealer Model Irks Other Automakers
Deadline to Participate in Dealership Workforce Study is June 30
GM Hit with $10 Billion Lawsuit Saying Recalls Damaged Brand
Porsche is Top Brand in New Car Quality Survey
NHTSA Investigating 1.2M Chrysler Vehicles for Ignition Failures
Acura Sponsoring Tiger Woods Foundation
Click here for more auto industry news at NADAFrontPage.com. .
Top Stories
CFPB Hearing Reinforces Need for Transparency Legislation

NADA urges dealers to contact their member of Congress

Consumer Financial Protection Bureau (CFPB) Director Richard Cordray told a congressional panel yesterday that the bureau may offer some insight into its effort to end dealers' flexibility to discount the interest rate offered to car and truck buyers. NADA would welcome any details on the CFPB's methods regarding its guidance issued last year. However, yesterday Cordray only offered to provide information on one aspect of its analysis, the proxy methodology. Since this would leave many unanswered questions regarding other critical aspects of the analysis, including how the bureau ensures that it is only comparing similarly situated customers, it reinforces the need for the Bureau Guidance Transparency Act, H.R. 4811, to increase CFPB transparency.

During the hearing Democrats and Republicans continued to ask Cordray questions regarding its 2013 guidance since the CFPB has not fully responded to congressional inquiries about the methodologies it employed to justify its action.

NADA urges dealers to call their member of Congress at 202-224-3121 and ask them to cosponsor the Bureau Guidance Transparency Act (H.R. 4811). This bill rescinds the bureau's 2013 auto guidance and requires a more transparent process prior to the bureau issuing future guidance. The bill also requires a public comment period and public access to documents supporting the guidance.

For more information, visit: www.NADA.org/CFPB.
Source: NADA Legislative Affairs
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Tesla's Attempt to Upend Dealer Model Irks Other Automakers

In statehouses from North Carolina to Washington, Tesla has battled auto dealers for the right to sell its cars directly to consumers. Fights over the direct sales model have erupted in at least twenty states, pitting Tesla — which is now worth about one-third of General Motors — against auto dealers with deep community roots and powerful state lobbying operations.

At the same time, the National Automobile Dealers Association, which has mostly left state dealer federations to their own devices, is stepping up its efforts nationally, launching a new campaign to extol the benefits of the dealer model. Their Get The Facts campaign, unveiled Monday, includes fact sheets, reports and videos arguing dealers drive prices down by competing for business, are more likely to side with consumers during the recall process, boost local jobs and local tax bases and make car-buying simpler by dealing with government regulations and paperwork.

The association also wants to dispel “absolutely false” myths about dealers it claims have arisen in the media in recent years. “As long as cars are being retailed, you are going to have the costs of retailing whether they're borne by dealers or manufacturers,” said Jonathan Collegio, a NADA spokesman. “The dealer model is better for consumers because competition between local dealers minimizes those costs.”
Source: Politico

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Deadline to Participate in Dealership Workforce Study is June 30

NADA members are encouraged to take advantage of a key member benefit before it’s too late. The deadline to participate in the 2014 Dealership Workforce Study is June 30. It’s the only analysis of dealership employee compensation, turnover, retention and benefits. Results from the study will help dealers make data-based decisions on pay plans and how they compare against the competition.

Each participating dealership will receive a customized, free Basic Report, which compares its own data to aggregated regional and national data, as well as the comprehensive Dealership Workforce Study Industry Report. There’s a separate sign up process for single dealerships and groups, and 2013 participants receive a pre-populated survey. To participate, visit www.nadaworkforcestudy.com to sign up, complete a survey and upload payroll data.

For questions or access to prior year customized reports, call (800) 557-6232 or email WorkforceStudy@nada.org. Members already enrolled should note that completing the survey and payroll upload are prerequisites to receive the customized reports.
Source: NADA Dealership Operations

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GM Hit with $10 Billion Lawsuit Saying Recalls Damaged Brand

A new lawsuit says General Motors should compensate millions of car and truck owners for lost resale value, potentially exceeding $10 billion, because a slew of recalls and a deadly delay in recalling cars with defective ignition switches has damaged its brand. According to a complaint filed on Wednesday with the federal court in Riverside, California, GM hurt customers by concealing known defects and valuing cost-cutting over safety, leading to roughly 40 recalls covering more than 20 million vehicles this year alone. It said this has caused a variety of late-model vehicles to lose roughly $500 to $2,600 in resale value.
Source: CNBC

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

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Porsche is Top Brand in New Car Quality Survey

The race to fill vehicles with the latest technology is hurting quality. Buyers reported more problems in their new cars and trucks this year than last year, according to rankings released Wednesday by the consulting firm J.D. Power. It was the second straight increase since 2012, when the average number of problems in new cars and trucks hit an all-time low. Car makers are feeling pressure to add new technology and update vehicles quickly so they don't get stale. But car buyers are frustrated with Bluetooth systems that won't connect to their phones, voice recognition systems that don't understand them and navigation systems that aren't getting them where they need to go. Porsche, Jaguar, Lexus, Hyundai and Toyota were the best-performing brands in this year's survey. The worst performers were Fiat, Jeep, Mitsubishi, Scion and Mazda.
Source: Associated Press

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NHTSA Investigating 1.2M Chrysler Vehicles for Ignition Failures

The National Highway Traffic Safety Administrations said Wednesday it is opening two investigations into 1.2 million Chrysler vehicles because of reports that a driver's knee can move the ignition switch out of the “run” position, causing the vehicles to stall and disabling the air bags. The problem is similar to the issue that rocked General Motors Co. after it failed to recall 2.6 million vehicles linked to 13 deaths when air bags failed to deploy after vehicles stalled. GM has recalled nearly 4 million other vehicles since Friday for other ignition switch problems. Chrysler has received hundreds of complaints for stalling linked to the defect, but there are no reports of fatalities or injuries linked to nondeployment of air bags.
Source: The Detroit News
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Acura Sponsoring Tiger Woods Foundation

American Honda's Acura division has signed a three-year agreement to support the Tiger Woods Foundation and three related golf tournaments associated with the star golfer's educational efforts. Acura also will be named the official vehicle of the foundation in exchange for vehicle and philanthropic support. The dollar amount of support was not disclosed in a statement [Wednesday]. The first presence of Acura and 180 vehicles for tournament use will be at the 2014 Quicken Loans National Tournament, taking place next weekend at Congressional Country Club in Bethesda, Md.
Source: Automotive News
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Quotable

"As long as cars are being retailed, you are going to have the costs of retailing whether they’re borne by dealers or manufacturers. The dealer model is better for consumers because competition between local dealers minimizes those costs."

    -- 
Jonathan Collegio, NADA vice president of public affairs, commenting on the consumer benefit of the franchised dealer network, Politico, June 18

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