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Inside this issue
Chrysler Boss Recruits Activists to Prod GM Into a Merger
Automakers Want NHTSA to Launch Recall Ad Campaign
NTSB Urges U.S. to Mandate Advanced Braking
Mexico Auto Boom a Boon for U.S. Suppliers
Register Now for NADA's 'Safeguarding Your Customer Data: New Rules, Best Practices' Webinar
Subaru Sells Out: Will a Fast-Growing Carmaker Decide to Stay Small?
Hyundai, Kia to Cut Costs as Sales, Profit Decline
Ford Agrees to Invest $3.1B to Get Max Michigan Tax Credits
Click here for more auto industry news at NADAFrontPage.com. .
Top Stories
Chrysler Boss Recruits Activists to Prod GM Into a Merger

Sergio Marchionne believes hedge funds can sway rival’s board to accept his entreaties

Fiat Chrysler Automobiles NV Chief Executive Sergio Marchionne is reaching out to hedge funds and other potential allies to prod General Motors Co. into a merger, according to people familiar with the matter. His pursuit of outside investors is only the latest move in Mr. Marchionne’s drive to find a partner for the Italian-American auto maker, which logged $108 billion in sales in its most recent fiscal year. But contacts with activist investors—only months after GM agreed to hedge fund demands to buy back billions of dollars in stock—have yet to land a patron, these people said. A similar strategy could be employed with at least one European auto maker, they added. His high-profile calls for industry consolidation have led some analysts to characterize Mr. Marchionne’s pitch as a desperate one, reflecting Fiat Chrysler’s weak operating margins.
Source: The Wall Street Journal

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Automakers Want NHTSA to Launch Recall Ad Campaign

Automakers want the National Highway Traffic Safety Administration to launch a multi-million dollar advertising campaign to push owners of recalled cars to get them repaired. In a joint letter, the Alliance of Automobile Manufacturers and Association of Global Automakers asked NHTSA Administrator Mark Rosekind to launch a “intensive public awareness campaign about the importance of recall participation by consumers.” The groups, which represent all major automakers, said the campaign should be modeled on the “Click it or Ticket” or “Over the Limit — Under Arrest” campaigns. 
Source: The Detroit News
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NTSB Urges U.S. to Mandate Advanced Braking

The National Transportation Safety Board on Monday urged auto safety regulators and automakers to do more to spur the introduction of forward collision-avoidance systems to keep cars from running into those in front of them. Since 2012, the NTSB has asked the National Highway Traffic Safety Administration to mandate new safety technologies in all vehicles, which could dramatically reduce the number fatalities caused by driver distractions. But the auto safety agency hasn’t agreed to do so.
Source: The Detroit News
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Mexico Auto Boom a Boon for U.S. Suppliers

Hollingsworth Logistics Group, a Michigan-based automotive transportation and assembly supplier, plans for sales in Mexico to be a quarter of its business by 2025. That's an ambitious target, considering none of the company's $400 million in revenue in 2014 came from that nation. But Hollingsworth isn't alone, as the lower-tiered U.S. supply base is again heading south - 20 years after the North American Free Trade Agreement broke business barriers further open between the U.S. and Mexico. In what local experts are calling the new automotive gold rush, automakers such as Nissan Motor Co. and Mazda Motor Corp. are producing a record number of vehicles in Mexico, most of them destined for export.
Source: Crain's Detroit Business
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Register Now for NADA's 'Safeguarding Your Customer Data: New Rules, Best Practices' Webinar

NADA University Online will host the webinar "Safeguarding Your Customer Data: New Rules, Best Practices" on Wednesday, June 10 at 1 p.m. ET. The free webinar, presented by Randy Hendrick from Dealertrack, will discuss how to implement best practices to safeguard dealerships against data security breaches and understand changes that need to be made to a dealership's Safeguards Program to meet FTC requirements. Attendees will learn how to identify problems before they become data breaches and strategies to train employees to protect customer information and secure their business. Click here to register.
Source: NADA University Online
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Subaru Sells Out: Will a Fast-Growing Carmaker Decide to Stay Small?

Subaru can barely make enough cars to meet demand and has the best profit margin in the industry. But expanding might jeopardize what makes it work so well

The tornado tore through Lafayette, Ind., at 3 p.m. on Nov. 17, 2013, a Sunday. Most of the 4,000 workers at the local Subaru factory—the only such facility outside Japan—were between shifts when the twister slammed into the building at almost 140 miles per hour. It tore off a section of roof, flung a three-ton air-conditioning unit like an empty beer can, and toppled a concrete wall onto the assembly line. But shutting down production wasn’t an option. Subaru had enough inventory in the U.S. to last about 11 days, an impossibly slim buffer in an industry famous for revving supply far beyond demand.

Tornadoes have kept their distance from Subaru’s Indiana factory in the months since, but the pressure to churn out more vehicles has only increased. Since 2011, Subaru’s global sales have surged 45 percent to 913,100 vehicles, a pace bested only by a few burgeoning Chinese brands and Fiat Chrysler which has been intent on making Jeep a popular choice in Europe and Asia. And Subaru has done all this while cranking out the best profit margin in the industry. The company, however, couldn't be less suited to handle a sales surge.
Source: Bloomberg
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Hyundai, Kia to Cut Costs as Sales, Profit Decline

Hyundai Motor Co. and its affiliate Kia Motors Corp. are reducing costs after sales and profit fell at the two Korean carmakers. Hyundai and Kia are “making efforts to cut costs” after first-quarter operating profit declined, the carmakers said in a joint email today. They didn’t provide specifics on the cuts, or any estimate. Operating profit at both Hyundai and Kia declined for a fourth consecutive quarter in the three months ended March 31.
Source: Bloomberg
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Ford Agrees to Invest $3.1B to Get Max Michigan Tax Credits

Ford Motor Co. would have to invest $3.1 billion in Michigan facilities over the next 10 years to qualify for its maximum tax credits under a deal announced Monday that limits the state's liability for incentives issued to keep auto jobs in the state. The Michigan Strategic Fund approved the amended tax agreement with Ford, as Gov. Rick Snyder tries to get a handle on $9.5 billion in business tax credits for which the state is liable into 2031. Many of those credits were issued during the recession, primarily for promises by Detroit's major automakers - Ford, General Motors and Chrysler - to keep jobs in the state.
Source: Associated Press
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Quotable
"Mexico is booming, and what we see trending is phenomenal opportunities for us. It's key for our sustainability. If we, and others, don't make those business expansions down there, the marketplace will become much smaller."

    -- Greg Martinez Jr., director of international sales for Hollingsworth Logistics Group, commenting on an increased number of automakers producing vehicles in Mexico, Crain's Detroit Business, June 8

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