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November 28, 2016 FacebookTwitterFlickrRSSSEND TO A FRIENDPRINT
Inside this issue
NADA's Welch in Automotive News World Congress Lineup
Wall Street Journal Editorial: Consumer Financial Protection Rewrite
Few Takers for Cadillac Buyouts
VW Charts Its Long Journey Back
Feds Want Phone Makers to Block Most Apps from Drivers
Top Stories
NADA's Welch in Automotive News World Congress Lineup

Peter Welch, president of the National Automobile Dealers Association, will speak at the Automotive News World Congress on Tuesday, Jan. 10. Since Welch became NADA’s president on Feb. 1, 2013, he has refocused the association on select areas such as legislative, lobbying and member-service operations. He has scaled back or exited several operations, selling NADA Used Car Guides to J.D. Power, for example. NADA will celebrate its 100th anniversary in 2017 during its annual convention to be held in New Orleans in late January.
Source: Automotive News

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Wall Street Journal Editorial: Consumer Financial Protection Rewrite

The rogue bureau needs to be reined in if it can’t be killed.

Republicans who are about to run the federal government face some crucial strategic questions, and one is how much of President Obama’s agenda to roll back through regulation and how much through legislation. A case in point is the Consumer Financial Protection Bureau, which has abused the law and whose structure was recently found unconstitutional.

By all rights the bureau should be killed, and we’re told the Trump transition team is considering this and other options. The political problem is that killing the bureau would probably require 60 Senate votes, and Democrats would be able to portray themselves as defending “consumer protection,” which sounds better than it has turned out. Reform options short of a death sentence could at least restrain some of the bureau’s abuses.

A panel of the D.C. Circuit Court of Appeals recently said the bureau violates the Constitution because it is run by one man—Director Richard Cordray—who cannot be fired by the President except for cause. This violates the separation of powers requiring that the chief executive be responsible for everyone in the executive branch. Independent agencies are typically run by bipartisan commissions as a check on unelected authority.

The bureau has appealed that decision to the full D.C. Circuit, and the issue may be headed for the Supreme Court. This is another reason for Donald Trump to send up a Justice nominee as soon as possible.

Mr. Trump should dismiss Mr. Cordray on his first day as President despite the appeal, but the bureau has other problems. One is that it is funded from the Federal Reserve based on a formula in the Dodd-Frank law that has resulted (surprise) in regular budget increases. So the bureau, which expects to burn through more than $600 million this year, has no need to justify itself to the President or Congress for annual appropriations.

This lack of accountability has led to outrageous abuses, such as its attempts to regulate car dealers though Dodd-Frank expressly said that wasn’t a job for the bureau. Last year Rep. David Scott (D., Ga.) ripped the bureau’s “deceitful” attack on auto lenders for alleged racial bias based on “shamefully flawed” information. The bureau sued banks for discrimination after guessing the race of borrowers based on their last names and addresses. Internal documents reveal that the bureau gang knew their guesses were wildly inaccurate. So they discussed how to keep defendants they were smearing as racists from learning the truth.
Source: The Wall Street Journal (Subscription required.)

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Few Takers for Cadillac Buyouts

Pinnacle program delayed again, but will move ahead

Cadillac's offer to buy out more than 40 percent of its U.S. dealerships did almost nothing to get the brand's retailer network down to a more reasonable size relative to its current sales volume. Fewer than 20 of the 400 dealerships that were offered cash to give up their franchises agreed to the deal by last week's deadline. That leaves the brand with a fraction of the throughput enjoyed by every other luxury rival except Lincoln.
Source: Automotive News

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VW Charts Its Long Journey Back

U.S. strategy sees a 10-year road to relevance

Herbert Diess' first comprehensive global strategy for the Volkswagen brand pegs the U.S. as a critical market and production base to drive the automaker's profitability in the next decade but recognizes that a full recovery there will be a long-term project at best. Diess, the global CEO for the VW brand who arrived at Volkswagen from BMW last year, outlined his vision last week for reviving its U.S. operations through a combination of more America-friendly products, better utilization of its plant in Chattanooga and a commitment to electric vehicles as a successor to the diesels that had been critical to its previous growth ambitions.
Source: Automotive News

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Feds Want Phone Makers to Block Most Apps from Drivers

Government safety regulators are asking smartphone manufacturers to find solutions that block use of mobile device apps while driving. The National Highway Traffic Safety Administration released voluntary guidelines to minimize driver distraction both with factory-installed touch screens and mobile devices, especially as smartphones are carried into vehicles and used by drivers.
Source: Detroit Free Press

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Past Articles
       
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      "We want to write a comeback story. The U.S. is not just a very large market but a highly profitable one as well."

          -- Herbert Diess, global CEO for Volkswagen, Automotive News, Nov. 28
       
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