NADA Headlines (July 20, 2010)
NADA Supports U.S. Audit on Closings, Says Further Action is Unlikely
WASHINGTON -- The National Automobile Dealers Association today supported a government audit critical of the abrupt dealership closings initiated by General Motors and Chrysler last year while saying it would be unlikely to pursue other legal options on behalf of rejected dealers. “I don't think we can do anything at this point; it would be like pushing toothpaste back in the tube,” said Ed Tonkin, the association's chairman, in an interview. “We do not see how these cuts make economic sense -- not for the companies, not for the dealers, not for local communities and certainly not for the struggling U.S. economy,” NADA said in a statement in response to Sunday's report from the Office of the Special Inspector General for the Troubled Asset Relief Program, which provided more than $80 billion in loans to keep the automakers and their finance arms afloat. Former GM CEO Fritz Henderson, for example, told Congress last year that the dealer shutdowns would save the automaker more than $2 billion. The fact that GM and Chrysler offered to reinstate some dealers following the passage of mandatory arbitration legislation and GM's statement that restoring dealers wouldn't hurt its recovery suggests “the number and speed of terminations was not necessarily critical to the manufacturers' viability,” the report said. Read more from Automotive News.
WASHINGTON — Senator John D. (Jay) Rockefeller IV, Chairman of the U.S. Senate Committee on Commerce, Science, and Transportation, issued the following statement regarding the findings of a report by the special inspector general for the Troubled Asset Relief Program (TARP) on the Obama Administration’s handling of auto dealer closings in the wake of GM and Chrysler’s bankruptcy last year: "I requested this study to make sure that terminated dealers were being treated fairly in this process and that the American taxpayer was well served. I believe it is incredibly important to present a transparent picture of this issue – especially because taxpayer money was a key component of this effort. This report shows that Congress did the right thing when it gave all dealers the right to appeal terminations before a neutral arbiter. I am grateful that GM reinstated a number of its dealerships in my state of West Virginia. It is my hope that this report will send a clear message that unfairness in the termination process will not be tolerated. I will continue to closely monitor the status of this important issue.” Read more from the U.S. Senate Committee on Commerce, Science and Transportation.
TOKYO — Toyota Motor Corp. said Tuesday it has been subpoenaed by a federal grand jury in New York to submit documents related to problems with steering relay rods, meaning the company faces expanded investigations into its vehicle safety. A federal grand jury in the Southern District in New York didn't specify the models or the production years involved in the subpoenas to Toyota's U.S. subsidiaries on June 29, a company spokeswoman said. The grand jury probe raises the possibility of criminal liabilities. Toyota already faces an investigation by the same grand jury and the U.S. Securities and Exchange Commission into the acceleration and brake issues, although it hasn't been charged. Read more from The Wall Street Journal.
WASHINGTON -- Saving Detroit's auto industry may be a better deal for U.S. taxpayers than anyone expected. A Free Press analysis suggests that taxpayers could get back about $74 billion of the $86 billion the government made available in 2008 and 2009 to save General Motors, Chrysler and Ally Financial, the former GMAC. Although no independent analysis has found that the government could break even, GM, Chrysler and Ally have promised to try to pay back the U.S. Treasury entirely. "The prospects have modestly exceeded expectations," said David Sowerby, chief market analyst at Loomis Sayles & Co. "The outcome, due to the health of the patient, has made the doctor look better." Read more from the Detroit Free Press.
Honda Motor Co plans to launch a plug-in hybrid and battery electric model in 2012 as part of its strategy to push to the front of a race by global automakers to develop more fuel-efficient cars. Global competitors from Volkswagen AG to Hyundai Motor Co are preparing to launch strong hybrid models that are more fuel-efficient than Honda's "mild" hybrids such as the Insight, while also readying battery-run cars. At a news conference, Chief Executive Takanobu Ito, outlining the firm's medium-term strategy, said Honda was planning to sell a plug-in hybrid vehicle and a battery-powered electric model in Japan and the United States in 2012. Read more from Reuters.
Volkswagen AG unveiled plans for a range of hybrid and electric vehicles that Chief Executive Officer Martin Winterkorn said will account for 3 percent of the German carmaker’s global sales by 2018. VW will introduce either the Up! city-car or the Golf compact, its best-selling model, as an all-electric vehicle in the U.S. by 2013, Winterkorn said. The automaker also plans to sell a gas-electric hybrid version of the Touareg sport-utility vehicle later this year, followed by a Jetta hybrid in 2011. “Our goal is clear and ambitious,” Winterkorn said yesterday at VW’s research laboratory in Palo Alto, California. “Volkswagen will be the automaker to mass produce the electric car for everyone.” Read more from Bloomberg.
ARTESIA, Calif. — If a pair of strollers fits easily into the rear of Buick's next small crossover, if both front seats have armrests, and if the ride is sporty yet comfy, you may not have General Motors engineers to thank. Your hero may actually be public school teacher and mom Melissa Zaucha. A Buick crew of four spent more than two hours hanging on her every word — as she perched on her couch in her family room — and capturing the interview on video for future reference. She was one of a dozen consumers getting similar treatment over several days in Southern California, as part of the GM brand's effort to get everything right in its new vehicles. Zaucha, 33, and her husband aren't in the auto market at the moment, but they are the kind of upwardly mobile young family that would make a good target for Buick. Read more from The Detroit News.
Jose Pozos knew little about the National Association of Minority Automobile Dealers when he showed up at the group's annual meeting in Portland, Ore., in the summer of 2000. He wanted to speak with factory recruiters at the minority-dealer gathering about acquiring his own dealership. By December of that year, Pozos became the owner of Wichita Falls Ford-Lincoln-Mercury in Wichita Falls, Texas. He says NAMAD worked for him. Now he's going to work for NAMAD. Pozos, 48, takes over as chairman of the minority dealer group during its annual convention in Chicago this week. He takes the gavel from Desmond Roberts, owner of two Chevrolet dealerships and a Chrysler-Dodge dealership in the Chicago area. Read more from Automotive News.