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October 27, 2015 FacebookTwitterFlickrRSSSEND TO A FRIENDPRINT
Inside this issue
New Report: Employee Salaries at New-Car Dealerships Rise
Bob Lutz: Is Tesla Doomed?
Ford Posts Highest-Ever N.A. Profit as Global Earnings Double
GM Sets Raise for Its U.S. Factory Workers
Volkswagen is Expected to Post Quarterly Loss
FTC Approves Final Consent Order Against BMW of North America
Commentary: Grassroots Advocacy Getting Involved Makes a Difference
Top Stories
New Report: Employee Salaries at New-Car Dealerships Rise

Employee compensation and productivity at new-car dealerships increased across all job positions in 2014, according to a new report released today by NADA. In 2014, the median weekly income for all employees at new-car dealerships increased 5.1 percent to $1,026. On average, dealership employees earned nearly 29 percent more than employees in the private-sector workforce, according to a comparison of dealership salaries and 2014 fourth-quarter median weekly earnings of all U.S. employees, as compiled by the Bureau of Labor Statistics. 

“The bottom line is that new-car dealerships offer well-paying jobs with benefits,” said NADA Chief Economist Steven Szakaly. “Jobs at new-car dealerships have continued to outpace average U.S. wages, and are some of the best-paying jobs available. This highlights the importance of the retail-auto industry to U.S. job growth, and how critical new-car dealerships have become in their communities across the country in providing high-paying, stable employment opportunities following the recession.”
 
In addition to national and regional data on dealership compensation, the 2015 Dealership Workforce Study report, Automotive Retail: National & Regional Trends in Compensation, Benefits & Retention, includes data on retention and turnover for 60 dealership job positions, as well as information on employee benefits, hours of operation and work schedules.

The fourth annual Dealership Workforce Study report was prepared for NADA by the research firm ESI Trends, which conducted the study and analyzed 2014 data. The report is designed to help dealers recruit, hire and retain employees. The enrollment period to participate in the 2016 study opens on Dec. 16, 2015. For more information or to participate in the next study, visit www.nadaworkforcestudy.com.
Source: NADA

Editor's note: The 2015 Dealership Workforce Study report is available for purchase by calling NADA Customer Service at 800.557.6232 or by signing in to www.nadauniversity.com and searching 2015trends.

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Bob Lutz: Is Tesla Doomed?

Bob Lutz thinks the writing is on the wall for the EV maker

Tesla's showing all the signs of a company in trouble: bleeding cash, securitized assets, and mounting inventory. It's the trifecta of doom for any automaker, and anyone paying attention probably saw this coming a mile away. Like most big puzzles, the company's woes don't have just one source.

It's true that the world may be running light on buyers who will spring for a big-dollar electric vehicle that can't make the hike from Detroit to Chicago without stopping for a long charge. And cheap gasoline isn't helping Tesla's case. Right now, prices around the country are hovering close to $2 a gallon. If that's bad news for the Prius and the Volt, it's worse for the Model S.

In addition, there's never been any secret sauce to the company's battery technology. The automakers that bought into Tesla's tech early did so to avoid having to pony up development dollars on first-generation battery packs of their own. Now that Audi has announced it's getting into the EV game, Tesla should be even more concerned. If you're a luxury buyer, which car would you rather have?
Source: Road & Track
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Ford Posts Highest-Ever N.A. Profit as Global Earnings Double

Q3 net income surges to $1.9 billion; pretax profits in North America rise to $2.7 billion

Ford Motor Co. had its best-ever quarter in North America and more than doubled its global earnings from a year earlier as redesigns of the F-150 and other high-profit nameplates began to pay off. Ford posted third-quarter net income of $1.9 billion, up from $833 million in the same period of 2014. It earned a pretax profit of $2.7 billion in North America, 89 percent more than a year ago and the most ever for any quarter. North American operating margins jumped to 11.3 percent, from 7.1 percent in the third quarter of 2014.
Source: Automotive News
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GM Sets Raise for Its U.S. Factory Workers

Auto maker accepts UAW contract proposal for fixed hourly wage increases

General Motors Co. , which has been delivering some of the richest operating profits in its 107-year history, has decided to do something it hasn’t done in nearly a decade: give its veteran American factory workers a raise. The No. 1 U.S. auto maker by sales accepted a new four-year wage agreement with the United Auto Workers union late Sunday, just ahead of a strike deadline. Details weren’t immediately disclosed but UAW officials called the proposed GM deal “transformative,” and said it promises “long-term significant wage gains” to factory employees. If approved, it would be the first time since 2007 that a Detroit labor contract has been considered transformative.
Source: The Wall Street Journal

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Volkswagen is Expected to Post Quarterly Loss

Analysts say impact of emissions scandal may push auto maker into red

Amid Volkswagen AG ’s crisis over cheating on emissions testing, analysts have slashed their earnings outlook for the auto maker and expect it to report a loss for the third quarter. Volkswagen is set to present results for the three months ended in September on Wednesday. The company has taken a €6.5 billion ($7.2 billion) charge against third-quarter earnings to pay for a global recall of as many as 11 million vehicles. That will push the company into the red, according to a consensus of analysts polled by The Wall Street Journal. Their average estimate calls for Volkswagen to swing to a third-quarter loss of €1.6 billion from a net profit of €2.9 billion last year.
Source: The Wall Street Journal
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FTC Approves Final Consent Order Against BMW of North America

The Federal Trade Commission has approved a final consent order against BMW of North America LLC, whose MINI Division allegedly violated a provision of the Magnuson-Moss Warranty Act that prohibits companies from requiring consumers – in order to maintain their warranties – to use specific brands of parts or specified service centers, unless the part or service is provided to the consumer without charge.  The consent order, which will remain in effect for 20 years, prohibits BMW from violating the Warranty Act regarding any MINI Division good or service. It also (1) bars BMW, regarding the sale of any MINI Division good or service, from representing that, to ensure a vehicle’s safe operation or maintain its value, owners must have routine maintenance done only by MINI dealers or MINI centers, unless BMW can substantiate the representation with competent and reliable scientific evidence; or misrepresenting any material fact about warranty or maintenance requirements of any good or service; and (2) requires BMW to notify affected MINI owners of their right to use third-party parts and service without voiding warranty coverage, unless BMW provides such parts or service for free. BMW is also required to post the notice on its miniusa.com website.
Source: FTC
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Commentary: Grassroots Advocacy Getting Involved Makes a Difference
By Bill Fox

The National Automobile Dealers Association was formed in 1917 when a small group of auto dealers came to Washington, D.C., and successfully lobbied Congress against a proposed luxury tax on automobiles. And for nearly 100 years, NADA has been advocating fiercely for new-car dealers on Capitol Hill.
 
However, the work of NADA's legislative and lobbying staff cannot be done alone. The nation's 16,500 dealerships - which provided and supported more than 2.2 million private-sector jobs totaling $144 billion in employee compensation last year - need to engage and support NADA's grassroots efforts back home in congressional districts across the country by building long-term relationships with elected officials. Click here for the full commentary.
Source: NADA
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Quotable
"I think Tesla CEO Elon Musk figured that if factory stores work for Apple, they'll work for Tesla. But the fixed costs for an Apple store are next to nothing compared with a car dealership's."

   -- Bob Lutz, on the economic problems of direct distribution of motor vehicles, in a Monday column in Road & Track.

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