NADA Headlines - 06/14/2013 (Plain Text Version)

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Akerson: GM's Bailout Era is Over

CEO cites feds' stock offering and return to S&P 500

General Motors executives eager to shed the stigma of government ownership got two doses of welcome news ahead of last week's annual shareholders' meeting. First, Standard & Poor's said that GM would rejoin its S&P 500 stock market index for the first time since before GM's 2009 government-funded bankruptcy. The move gave GM's shares a lift last week as money managers and mutual funds added GM shares to their portfolios. That prompted the U.S. Treasury Department to sell 30 million shares in a public offering, and the UAW's GM retiree health care trust to unload 20 million shares. The divestitures left the government with less than 15 percent ownership of GM. During an otherwise unremarkable shareholders' meeting, CEO Dan Akerson used those recent developments to build the case that GM has put the bailout behind it. "With the success of the company, the viability and quite frankly the vitality of the company, much of that moniker has been shaken," Akerson told shareholders.
Source: Automotive News

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Opinion: Gas Engine Stands the Test of Time

By Mark J. Perry

The automobile stands as an enduring symbol of mobility and opportunity in America — and of innovation that's at the core of our nation's economic strength and prosperity. Yet the conventional gasoline-powered engine is sometimes disparaged and treated as if it's yesterday's technology. Listening to politicians, environmentalists and media pundits, you might think that the gas engine is inefficient and old-fashioned, a relic of the past that ought to be replaced by alternative automotive technologies like electric cars and plug-in hybrids. But a good look at the latest advances in the gasoline-powered engine — and those on the horizon — jars this opinion, and the surge in U.S. oil production from shale drilling further refutes the idea that conventional engines are old technology. Already powering more than 230 million cars in the United States, internal combustion engines have the potential to become substantially more efficient, while providing economic and environmental benefits that extend well beyond the money consumers save at the pump.
Source: The Detroit News [return to top]

US Retail Sales Jump 0.6 Percent in May on Autos

Americans stepped up purchases at retail businesses in May, spending more on cars, home improvements and sporting goods. The gain shows consumers remain resilient despite higher taxes and could drive faster growth later this year. The Commerce Department said Thursday that retail sales increased 0.6 percent in May from April. That's up from a 0.1 percent gain the previous month and the fastest pace since February. The April gain was led by a 1.8 percent jump in auto sales, the biggest increase in six months. Excluding volatile autos, gas and building supplies, core retail sales rose 0.3 percent. That's slightly higher than the 0.2 percent April increase. At Judy Schumacher Tilton's two New Jersey Chevrolet dealerships, customers seem more confident than they've been in the past few years. The combination of low interest rates and more fuel-efficient vehicles has lifted May sales well above year-ago levels. "I feel that auto sales are truly on the upswing," she said. "It's like everything's coming together."
Source: Associated Press

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Marchionne Said Close on Fiat-Chrysler Refinancing Deal

Sergio Marchionne, chief executive officer of Fiat SpA and Chrysler Group LLC, is closing in on refinancing deals for both automakers ahead of a plan to merge the two companies, people familiar with the matter said. Marchionne is set to sign an agreement with nine banks this month to refinance 1.95 billion euros ($2.6 billion) in Fiat credit, said two people familiar with the matter, who asked not to be identified because the talks are private. The CEO is also seeking to reduce the rate on a $2.95 billion term loan at Chrysler, another person said this week. Fiat, Italy's biggest manufacturer has accumulated a 58.5 percent holding in Chrysler since 2009 and plans to buy the rest as it seeks a global presence to compete with General Motors Co. and Volkswagen AG. In total, the Italian manufacturer is in talks with banks for as much as $10 billion in funding for the deal and for refinancing the two companies' debt, people familiar with the matter said last month. “We deem the news positive as the acquisition of Chrysler minorities may materialize soon,” said Gabriele Gambarova, an analyst at Banca Akros in Milan. “The reshaping of Chrysler debt is important because current conditions prevent Fiat from having access to Chrysler cash.” The two refinancing agreements may be signed as soon as June 21, the people said.
Source: Bloomberg [return to top]

Ford Studies New Models to Drive Lincoln Revival

Ford Motor Co. may develop new models for Lincoln in fast-growing vehicle segments as part of the automaker's latest attempt to revive the struggling luxury brand and boost its profits. The company did not specify which vehicle segments it was targeting. But in a presentation to investors on Thursday, Ford showed in a chart that it expects the premium small-car and crossover segments to grow sharply by 2015. Lincoln does not currently offer a small car, but a person familiar with the brand's strategy previously told Reuters that the Lincoln brand is considering a near-luxury compact sedan for 2016 or later. At the Detroit auto show this year, Ford showed a concept version of the Lincoln MKC compact crossover that is expected to go on sale next year. There are vehicle markets "that we're not playing in today that we can enter that are high-volume segments and growing fast," Matt VanDyke, who is in charge of Lincoln's development and day-to-day operations, said at an investor conference.
Source: Reuters

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NADA Study: Weekend Work Significant Cause of Sales Staff Turnover

The more a dealership asks a sales consultant to work on the weekends, the more likely that these individuals are to pursue other opportunities and leave stores with significant staff turnover. That's one of the conclusions from the 2012 NADA Dealership Workforce Study, launched last year by NADA University, the education and training arm of the National Automobile Dealers Association in partnership with DeltaTrends. The study showed that the dealership sales consultant turnover rate came in at 72 percent when the individual had to work four weekends per months. This salesperson earned an average compensation of $58,922. The turnover rate dropped and the average compensation earned rose when dealerships asked salespeople to work three weekends per month. The rate dipped to 62 percent while compensation earned ticked up to $59,100. Furthermore, if dealerships asked sales consultants to work only two weekends monthly, the turnover rate decreased to 50 percent while average compensation moved up to $60,400. Association officials highlighted these results in hopes of drumming up more dealership interest for this year's NADA Dealership Workforce Study. The deadline for NADA and ATD dealer members to participate in the next annual survey is June 30 at
Source: Auto Remarketing [return to top]

Houston Automobile Dealers Association Donates $100,000 to 100 Club

The Houston Automobile Dealers Association is partnering with the Harris County Sheriff's Office to give $100,000 to the 100 Club in memory of the four firefighters killed in the southwest Houston motel fire last month. Executive Director Rick Hartley says they are going a step further to help the family of HFD Captain William Dowling who remains hospitalized at Memorial Hermann, recovering from serious injuries sustained in that same fire. “The 100 Club's Board of Directors unanimously voted to make sure that Forest, Faith and Foster Dowling all have the opportunity to go to college and we'll pick up the tab.” In addition, the 100 Club will be providing additional financial assistance to the Dowling family as needed.
Source: (Houston, Texas) [return to top]