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Inside this issue
NADA President Peter Welch in WSJ: Dealers Are Efficient, Competitive
Video: NADA's Jonathan Collegio on CFPB and Auto Lending
GM Victim Fund Makes 15 Compensation Offers
Ford Tops Hiring Pledge Adding 14,000 Workers Since 2011
Aleris to Invest $350 Million in U.S. to Meet Growing Auto Aluminum Demand
Cadillac's Next Trick: Rename its Vehicles
GM, Suppliers Donate to Habitat for Humanity Detroit
Click here for more auto industry news at NADAFrontPage.com. .
Top Stories
NADA President Peter Welch in WSJ: Dealers Are Efficient, Competitive

State automobile franchise laws level the playing field between dealers and manufacturers

John Kerr's op-ed critical of state automobile franchise laws misses a core reason of why franchise laws exist. They level the playing field between dealers and manufacturers because dealers are prohibited by antitrust laws from negotiating freely with auto makers ("Tesla Breaks the Auto Dealer Cartel," Sept. 17).

In a truly free market, local new car and truck dealers, who have invested more than $200 billion in their land and facilities, would be able to collectively negotiate their contracts with manufacturers on pricing and distribution. However, dealers are prohibited from federal and state antitrust laws from doing this. In fact, dealer groups are under constant scrutiny of their compliance with state and federal antitrust laws—including major investigations by the U.S. Department of Justice in recent decades.

The automotive market is highly regulated at all levels—requiring licensing, insurance, financing, care of hazardous materials, all regulated by different bureaucracies. State legislatures passed franchise laws to remedy the antitrust harm against dealers and to help protect consumers. These laws also have the benefit of adding intra-brand price competition into the marketplace, adding extra consumer accountability on warranty and recall issues, and keeping local ownership of businesses on Main Street. And the franchise model is extraordinarily efficient at bringing cars to market with gross margins of less than 6%. It is an extremely competitive system that benefits consumers, manufacturers and local communities alike.
Source: The Wall Street Journal
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Video: NADA's Jonathan Collegio on CFPB and Auto Lending

  

NADA VP of Public Affairs, Jonathan Collegio, discusses what the impact of auto lending guidance by the CFPB could be. He also explains what is happening in Washington between dealership associations and the CFPB, and gives insight into how it impacts dealerships.
Source: CBT News

Editor's note: When Congress left for recess, the cosponsor count for H.R. 5403 was 91 (58R 33D). House members can still be added to the cosponsor list even though Congress is in recess. They will be formally added on Nov. 12 when Congress returns for the lame duck session. 

Since members are back in their districts, please try to meet with them or call them at their local district office. For the issue brief on H.R. 5403, cosponsors, bill text and section by section, click here. For more information see www.nada.org/cfpb.
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GM Victim Fund Makes 15 Compensation Offers

General Motors Co.'s victim compensation fund has made its first cash compensation offers, with formal proposals going to 15 people who have filed claims, the fund's director said. In a Detroit News interview Wednesday, lawyer Ken Feinberg said the offers had been made during the previous 24 hours by the independent fund established to compensate victims and families of those injured or killed as a result of defective ignition switches in GM. If offers are accepted, those people will get formal letters and must sign releases absolving GM of future claims. They would then get a check in two or three weeks. There is no timetable for accepting or rejecting the offers, Feinberg said. The 15 claims are a mix of death and injury claims, Feinberg said.
Source: The Detroit News
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Ford Tops Hiring Pledge Adding 14,000 Workers Since 2011

Ford Motor Co., the second-biggest automaker in the U.S., hired more than 14,000 domestic workers since 2011, exceeding a pledge it made three years ago that it would recruit 12,000 by 2015. In its latest hiring round, Ford is adding 1,200 more jobs at its Kansas City Assembly Plant where increased demand for the Transit cargo van and the Ford F-150 truck brought 2,800 new hires in 2012 and 2013. Ford, boosted by record profits in North America, said in May it was likely to hire more than the 12,000 workers it promised in its 2011 contract with the United Auto Workers union. Along with domestic peers General Motors Co. and Chrysler Group LLC, the automaker has been buoyed by resurgent demand from consumers attracted by new models and low financing costs amid a rebounding U.S. economy.
Source: Bloomberg

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Aleris to Invest $350 Million in U.S. to Meet Growing Auto Aluminum Demand

Aleris announced plans to invest $350 million to expand its rolling aluminum mill in Kentucky and start its first U.S. automotive body sheet production to meet burgeoning demand for lightweight materials in North America. Once complete, the plant in Lewisport will have capacity to produce just over 200,000 tons per year of automotive body sheet. Construction will start in the fall, with the aim of shipping the first sheet by early 2017, Aleris said in a statement.
Source: Reuters
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Cadillac's Next Trick: Rename its Vehicles

Flagship sedan to be named CT6

General Motors Co. continued dribbling out details of its revival plan for the struggling Cadillac luxury brand Wednesday, saying it will begin renaming the lineup's vehicles after the launch of a new large sedan called the CT6 next year. Cadillac has been in the spotlight in recent weeks as the brand's new chief, Johan de Nysschen, has quickly reshuffled the way the 112-year-old division is run. He has already said he plans to slow production of luxury sedans, evaluate the size of the dealer base and move the brand's headquarters to New York from Detroit to better understand buyers of premium automobiles.
Source: The Wall Street Journal
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GM, Suppliers Donate to Habitat for Humanity Detroit

General Motors and its suppliers are working together on more than cars and trucks. The automaker and those from whom it buys everything from brakes to tail lights raised nearly $1 million for Habitat for Humanity Detroit through a new program called Supplying Communities Together. GM global purchasing chief Grace Lieblein said the initiative will help improve GM's relationship with its suppliers — a historically contentious connection in which the automaker usually compels suppliers to do more for less.
Source: Detroit Free Press
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Quotable

"It [the franchise model] is an extremely competitive system that benefits consumers, manufacturers and local communities alike."

   
-- NADA President Peter Welch, commenting on the benefits of the dealer franchise system, The Wall Street Journal, Sept. 25

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