NADA Headlines - 02/11/2014 (Plain Text Version)
Employers with fewer than 100 workers, including many new-car dealers, won't have to provide health insurance until 2016 under the U.S. Affordable Care Act, as the administration said it would again delay a key requirement of the health law. Larger firms have to cover at least 70 percent of the workforce starting next year, the Internal Revenue Service said in a rule issued Monday. The Patient Protection and Affordable Care Act envisioned as a cornerstone of its expansion of U.S. insurance coverage that employers with 50 or more workers would be required to provide health benefits to their employees. The average U.S. car dealership had 55 employees in 2012, the National Automobile Dealers Association says.
While NADA officials said Monday they had not reviewed the proposed changes in detail, the group said auto dealerships, like other small businesses, "will benefit from the additional time to address health care coverage issues" under the act. "We are concerned about any potential negative effects that may be caused by the uncertainty of shifting deadlines for individual dealership employees," NADA said in a statement. "NADA will continue to urge dealers not to wait, but to seek professional advice now so that they can understand and be better prepared to do what is best for their businesses and their employees, both today and in the future.”
Lieblein: 'It was a misstep' not to consult suppliers first
General Motors is rolling back controversial changes it made last year to its purchasing contract, including new terms that some suppliers believed exposed them to greater warranty liability. GM last July rolled out the biggest overhaul to its supplier contract framework in 20 years. Some suppliers and their attorneys interpreted the new terms and conditions as giving GM far broader authority to recover warranty and safety-recall costs, to take over suppliers' intellectual property rights and to access their financial information. GM global purchasing chief Grace Lieblein told Automotive News on Monday that the contract changes "left a lot of room for interpretation," leading some suppliers to think the worst of GM's intentions. "The language was getting interpreted differently from our business intent," Lieblein said. Lieblein said she decided to strike the most controversial elements from the contract after months of hearing concerns from supplier CEOs and their attorneys. GM was scheduled to outline the changes during a conference call with representatives from hundreds of suppliers.
The crusade by anti-union forces in Tennessee, including the state's governor and senior senator, is as much a fight with Volkswagen management as with the UAW. Not only are Republican legislators accusing Volkswagen of backing the UAW, some of their leaders on Monday threatened to withhold tax incentives for future expansion of the three-year-old assembly plant in Chattanooga if workers vote this week to join the UAW. About 1,500 workers will vote from Wednesday through Friday in an election that the National Labor Relations Board will conduct.
Mercedes-Benz's vehicle sales grew faster in January than at Bayerische Motoren Werke AG (BMW) and Audi AG, helping the German manufacturer to further close the gap in deliveries with its two bigger rivals. Daimler AG's Mercedes, the third-biggest maker of luxury autos, posted a 15 percent sales gain last month to 109,500 cars and sport-utility vehicles on a 32 percent surge for compact models. Demand at Volkswagen AG's Audi rose 12 percent from a year earlier to 124,850 cars and SUVs, while BMW's deliveries increased 9.2 percent to 117,200.
Overseas results cast shadow on strong Japan performance
Nissan Motor Co. said a weak yen combined with booming sales and profit in Japan led to a 57% jump in net income in the latest quarter. Even so, the company said it would be a stretch to hit its full-year targets for global profit and vehicle sales, citing weak profitability in major markets abroad. The contrasting results at home and overseas show how Nissan, Japan's second-largest auto maker by sales volume, is continuing to struggle to raise profit abroad, as it pushes to meet ambitious global targets set by its charismatic chief executive, Carlos Ghosn. "We know it's not easy to meet the goals [for the full year] but it's not impossible," Nissan Corporate Vice President Joji Tagawa said at an earnings news conference on Monday, adding that a series of new cars will help the company catch up with its targets by driving stronger profit growth in the current, final quarter of this fiscal year.
Volvo's medium-term goal of selling 100,000 units annually in the U.S. is aimed in part at ensuring the profitability of its retailers, says the automaker's CEO. “The dealer network really requires a volume of 100,000, and we've been there before,” Hakan Samuelsson tells WardsAuto. “That must be our absolute target to come back.” The Swedish brand has a long way to go. Last year, U.S. deliveries totaled 61,233, according to WardsAuto data. The last time the automaker eclipsed the 100,000-unit mark was 2007, when it sold 106,213 units. “I think the dealers expect that, and I think the dealer network requires that volume to be profitable,” the executive says, adding he hopes to achieve the sales by 2016. “It will require new products and will take some years, but that is where we have to be.”
In a highly anticipated executive shuffle at Ford's Flat Rock Assembly Plant, young Eli Williams became plant manager on Monday — for a day. Eli is a 9-year-old from Athens, Ala., who loves cars and the Mustang in particular. With the gift of a 50th anniversary Mustang hat signed by Bill Ford and a handshake from plant manager Tim Young, the third-grader battling brain cancer became honorary boss of the factory where Ford makes the Mustang. The UAW paid for Eli and his family's trip and Ford arranged for the plant tour and came up with the idea of making him plant manager for the day. Decked out in a Mustang jacket, Eli arrived to cheers from hundreds of assembly line workers who were glad to show him how they build the cars he loves.