Automotive News - October 20, 2008 - (Page 12) 12 • OCTOBER 20, 2008 opinion Document fees must not become a dirty little secret Florida dealer Earl Stewart’s squabble with his competitors about the legitimacy of document fees is healthy for the industry. But there is no need to pass laws to ban such fees. Stewart and other critics decry document fees as a way to fatten a dealership’s profit after price negotiations supposedly have been concluded. Document fees, which can add as much as $1,000 to the price of the vehicle, look like an unfair sales tactic. Stewart has gone so far as to advocate a law that would outlaw document fees as a deceptive practice. Dealers who defend the pracIt’s the tice say that no matter how you structure a deal, it must include type of issue a decent profit for the dealership. Some say stores that don’t best tackled use document fees stick the profit somewhere else in the in the court deal. of public opinion, Dealers justify document fees by arguing that making a decent profit is tougher than ever. Mannot in the ufacturers have put pressure on their margins by reducing the legislature. dealer discount and using incentives such as employee pricing for everyone. On top of that, the dealers say, consumers have become savvy negotiators because they have access to more detailed pricing information, thanks to the Internet. Stewart’s competitors dislike airing the document fee dispute in public and resent Stewart using the topic in his advertising. But public discussion is good. At a time when some consumers — and prosecuting attorneys — still are suspicious that the finance and insurance phase of the deal is little more than a shell game, it makes sense to shine as much sunshine as possible on the process. It’s the type of issue best tackled in the court of public opinion, not in the legislature. Pressure for a law will grow if dealers try to make document fees another of the industry’s dirty little secrets, just as the 3 percent holdback and real invoice price once were. The topic is fair game for public discussion because transparency in the retail automobile business ultimately works to everyone’s advantage. Stephen Feinberg, head of Cerberus Capital Management LP, has been losing an amount of money beyond even his worst imagination. Chrysler has cost him and his clients billions of dollars. They were cocky enough to think that they were going to make billions without batting an eye. They didn’t know how ill-equipped they were to run an automobile company. For the past few months, Chrysler has been on the block, and Cerberus has yet to find a taker. Cerberus has shopped the company around the world with no results. Even a swap with General Motors seems to be headed nowhere, now that the GM board of directors appears to have developed some sort of backbone and has finally said no to management. Combining Chrysler and General Motors might be one of the worst ideas that anyone DAILY AUTO NEWS >> You can get the news you need every day. Go to www.autonews.com/signup and sign up for our daily e-mail newsletter. Just put up a ‘For Sale’ sign has come up with in a long time. Too many dealers, too many brands, too many employees, too much debt and too little cash for either — imagine combining them. Chrysler has some value to someone, particularly considering it probably won’t cost a plugged nickel. Just assume a gazillion dollars of debt, and it can be yours. But you better have some deep pockets. Automobile companies, particularly failing ones, need a great deal of cash to get well. Chrysler probably makes sense to a few potential buyers. Certainly the Chinese would appreciate the dealer network and the Jeep brand, not to mention the other vehicles in the portfolio. And few could deny that the talent at Chrysler is quite remarkable. The Chinese have the money to support that endeavor. And there is a tantalizing appeal for Carlos Ghosn, who desperately wants to have the third leg of his global car company in North America to go along with Renault and Nissan. But his present problems with those two might just be sobering enough for him to pass on this opportunity. One thing remains certain. Chrysler is once again in play. Cerberus simply didn’t have the knowledge or the resources to support such a large and difficult acquisition as Chrysler. The folks at Cerberus desperately want out before it drags them down. Chrysler employees and dealers deserve to have an owner that will be around for a while and can nurture them. There is a popular slogan in Washington and on Wall Street: “Too big to fail.” I hope that applies to the domestic automobile business, but I doubt it. The auto industry will survive by producing desirable, quality products that people want to buy without yet another social program to be paid for by all taxpayers. Only a short look at the disastrous financial situation in California will show that the state has been far too generous for far too long with a multitude of tax credits, grants, subsidies and incentives paid for with deficit spending, high taxes or never-ending fees. I drive an 18-year-old vehicle that complies with the strict state emission laws and am quite happy to continue doing so without a handout paid for by a state or national taxpayer. JOHN F. QUILTER Brisbane, Calif. The writer is retired. He was a regional warranty manager for an automaker. Arbitration can work for everyone To the Editor: After 30 years as a lawyer in the automobile industry, I can endorse nearly everything AIADA Chairman Jim Hudson said in his Aug. 25 column (“Dealer-customer mandatory arbitration works”). Arbitration almost always resolves disputes faster and less expensively than conventional litigation. Further, the results are usually fairer for all because arbitrators are experts in dispute resolution. Congress absolutely should not ban mandatory binding arbitration for dealer-customer disputes. Hudson went wrong, however, when he tried to square his current argument with his association’s successful 2002 fight against arbitration for dealermanufacturer disputes. First, he softened the 2002 outcome by calling it one that “allowed dealers to use means other than arbitration” with manufacturers. In fact, the dealers demanded and received a total ban on the same mandatory binding arbitration that Hudson wants for customer disputes. see LETTERS, Page 14 THE WEEKLY NEWSPAPER OF THE INDUSTRY Established in 1925, published every Monday by Crain Communications Inc. Keith E. Crain, Publisher and Editor-in-Chief Peter Brown, Associate Publisher and Editorial Director David Sedgwick, Editor Edward Lapham, Executive Editor HOW TO REACH US Web site: www.autonews.com Editorial staff autonews@crain.com Phone: 313-446-0361 Fax: 313-446-0383 Circulation Advertising subs@crain.com rgreer@crain.com Phone: 888-446-1422 Phone: 313-446-6050 Fax: 313-446-6777 Fax: 313-446-8030 Editorial data/research To locate information that has been published in Automotive News, call 313-446-1662. Customer service To start or renew a subscription or to report an address change or a delivery problem, e-mail subs@crain.com or call 888-446-1422 (in the U.S. or Canada) or 313-446-1662 (in all other locations). AUTOMOTIVE NEWS (ISSN 0005-1551) is published weekly at 1155 Gratiot Ave., Detroit, MI 48207-2997. Periodicals postage is paid at Detroit, MI and at additional mailing offices. Postmaster: Send address changes to AUTOMOTIVE NEWS, Circulation Department, 1155 Gratiot Ave., Detroit, MI 48207-2912. Canadian Post International Publications Mail Product (Canadian Distribution) Sales Agreement #40012850, GST#136760444. Canadian return address: 2-7496 Bath Road, Mississauga, ON L4T 1L2 Printed in the U.S.A. Cash for clunkers isn’t the answer To the Editor: Cash-for-clunkers programs are an ineffective approach to addressing the emissions of older cars (“Let’s get clunkers off the road and spur the economy,” Oct. 6). In fact, many states that have considered those programs have rejected them. Why? They don’t work. The cash provided by clunker programs is too little to enable lowincome individuals to purchase new, more fuel-efficient or cleaner vehicles. Meanwhile, the programs generally define “clunkers” as old vehicles, on the false assumption that all older cars are dirty. Many older cars are driven infrequently, can be relatively clean and are therefore not the best target for reducing real emissions. In lieu of clunker programs, states should target actual gross-polluting vehicles of any model year and encourage programs to upgrade them with new technology that reduces emissions while also offering added performance, driveability and fuel mileage. Upgrades are affordable and result in real, measurable emissions reductions. Not only are upgrades more effective; they drive product sales, provide American jobs and secure tax revenues. CHRISTOPHER J. KERSTING President and CEO Specialty Equipment Market Association Diamond Bar, Calif. Cash for clunkers? Scrap the idea To the Editor: I was quite disappointed to read the editorial urging the government toward a costly national vehicle-scrappage program. http://www.autonews.com/signup http://www.autonews.com
Table of Contents Feed for the Digital Edition of Automotive News - October 20, 2008 Automotive News - October 20, 2008 Amazingly, vehicle inventories are low An upside of the big slide: Raw material prices dip â for now With GMAC out, banks trickle in Get your daily Automotive News - in video form, starting Nov. 3 Honda's Fukui favors fed loans, confirms V-8 To move the metal, Mike Kahn moves the store Hyundai airbag flaw tied to drink spills Texas promo: Buy a GM vehicle, get GM stock Chrysler's uphill road in China GM/Chrysler? Anything's possible GM/Chrysler deal? Companies' pension plans may need cash Acura dealers: A V-8 engine is on the way Buyers pursue former Heard stores Honda: We're still lending Gilles, Ligocki will speak at congress Fed list promotes high-mileage cars Party time: Saturn turns to grass-roots marketing Online inventory service aims to cut dealer costs Document fees must not become a dirty little secret Just put up a 'For Sale' sign Cash for clunkers? Scrap the idea Arbitration can work for everyone It's time we control our own destiny GM missed boat on Cheyenne, Volt Sept. truck sales fall 7.4% Microheat seeks Chapter 11 At Bosch, r&d spending remains strong GM's new diesel opens up, loses weight Urea must flow or new diesels won't go Hankook plans to bring fuel-saving tire to North America Odell: I can help Volvo tap more potential So far, BMW cruises above the credit crisis Jatco builds China plant to meet expanding CVT demand 10 appointed at American Axle Personnel Milestones Obituaries Supplier Personnel Biking buddies Ford targets fleets with parental control key European sales fall; VW group bucks the trend 11 innovators win honorable mention 25 finalists selected for 2009 PACE awards Suppliers to the 2009 BMW X6 GMAC's loan cutbacks cost GM thousands of auto sales Credit tops agenda for NADA chief 'Flash' draws modest cash at theaters Booth's new berth sparks CEO speculation at Ford Economy's skid sends ritzy toys to eBay Report: Mazda scraps plan for U.S. plant GM's quandary: Finding loans for the imperfect Taylor to Hummer - and then ... ? Tough times at Tesla Automotive News - October 20, 2008 Automotive News - October 20, 2008 - (Page Intro) Automotive News - October 20, 2008 - With GMAC out, banks trickle in (Page 1) Automotive News - October 20, 2008 - With GMAC out, banks trickle in (Page 2) Automotive News - October 20, 2008 - Texas promo: Buy a GM vehicle, get GM stock (Page 3) Automotive News - October 20, 2008 - Companies' pension plans may need cash (Page 4) Automotive News - October 20, 2008 - Companies' pension plans may need cash (Page 5) Automotive News - October 20, 2008 - Gilles, Ligocki will speak at congress (Page 6) Automotive News - October 20, 2008 - Gilles, Ligocki will speak at congress (Page 7) Automotive News - October 20, 2008 - Online inventory service aims to cut dealer costs (Page 8) Automotive News - October 20, 2008 - Online inventory service aims to cut dealer costs (Page 9) Automotive News - October 20, 2008 - Online inventory service aims to cut dealer costs (Page 10) Automotive News - October 20, 2008 - Online inventory service aims to cut dealer costs (Page 11) Automotive News - October 20, 2008 - Arbitration can work for everyone (Page 12) Automotive News - October 20, 2008 - Arbitration can work for everyone (Page 13) Automotive News - October 20, 2008 - GM missed boat on Cheyenne, Volt (Page 14) Automotive News - October 20, 2008 - GM missed boat on Cheyenne, Volt (Page 15) Automotive News - October 20, 2008 - Microheat seeks Chapter 11 (Page 16) Automotive News - October 20, 2008 - Microheat seeks Chapter 11 (Page 16A) Automotive News - October 20, 2008 - Microheat seeks Chapter 11 (Page 16B) Automotive News - October 20, 2008 - Microheat seeks Chapter 11 (Page 16C) Automotive News - October 20, 2008 - Microheat seeks Chapter 11 (Page 16D) Automotive News - October 20, 2008 - Microheat seeks Chapter 11 (Page 17) Automotive News - October 20, 2008 - Hankook plans to bring fuel-saving tire to North America (Page 18) Automotive News - October 20, 2008 - Hankook plans to bring fuel-saving tire to North America (Page 19) Automotive News - October 20, 2008 - Hankook plans to bring fuel-saving tire to North America (Page 20) Automotive News - October 20, 2008 - Hankook plans to bring fuel-saving tire to North America (Page 21) Automotive News - October 20, 2008 - Odell: I can help Volvo tap more potential (Page 22) Automotive News - October 20, 2008 - Odell: I can help Volvo tap more potential (Page 23) Automotive News - October 20, 2008 - So far, BMW cruises above the credit crisis (Page 24) Automotive News - October 20, 2008 - So far, BMW cruises above the credit crisis (Page 24A) Automotive News - October 20, 2008 - So far, BMW cruises above the credit crisis (Page 24B) Automotive News - October 20, 2008 - So far, BMW cruises above the credit crisis (Page 24C) Automotive News - October 20, 2008 - So far, BMW cruises above the credit crisis (Page 24D) Automotive News - October 20, 2008 - So far, BMW cruises above the credit crisis (Page 25) Automotive News - October 20, 2008 - Obituaries (Page 26) Automotive News - October 20, 2008 - Biking buddies (Page 27) Automotive News - October 20, 2008 - Biking buddies (Page 28) Automotive News - October 20, 2008 - Biking buddies (Page 29) Automotive News - October 20, 2008 - Biking buddies (Page 30) Automotive News - October 20, 2008 - Biking buddies (Page 31) Automotive News - October 20, 2008 - European sales fall; VW group bucks the trend (Page 32) Automotive News - October 20, 2008 - European sales fall; VW group bucks the trend (Page 33) Automotive News - October 20, 2008 - Suppliers to the 2009 BMW X6 (Page 34) Automotive News - October 20, 2008 - GMAC's loan cutbacks cost GM thousands of auto sales (Page 35) Automotive News - October 20, 2008 - Credit tops agenda for NADA chief (Page 36) Automotive News - October 20, 2008 - Credit tops agenda for NADA chief (Page 37) Automotive News - October 20, 2008 - Tough times at Tesla (Page 38) Automotive News - October 20, 2008 - Tough times at Tesla (Page 39) Automotive News - October 20, 2008 - Tough times at Tesla (Page 40)
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