NADA Urges Obama Administration to Increase Auto Credit Flow to Consumers and Dealers Immediately
WASHINGTON (March 30, 2009) - Statement from NADA Chairman John McEleney in response to the Obama Announcement on Auto Industry:
“We are encouraged by President Obama's commitment to putting the domestic auto industry back on the road to recovery but continue to urge the administration to focus immediately on correcting the dysfunctional credit markets.
We are especially heartened by the President's comment that he 'will not let our auto industry vanish.' This clearly shows that he recognizes the importance of the U.S. auto industry to the country's future. We also applaud his decision to support further measures to stimulate demand, including a new fleet modernization program, also known as 'cash for clunkers.' These are important first steps toward stabilization of the auto industry as a whole.
However, we have serious concerns on two fronts. First, if something is not done in the immediate future to restore the auto dealer's access to both wholesale vehicle inventory (or 'floorplan') financing and retail consumer credit, the restructuring plan will not work. Vehicle inventory financing is the building block to automaker viability. It affects the entire auto retail network, domestic and international. As we said in our letter to the President, we urge the Obama Administration to focus immediately on the crisis in floorplan financing and consumer credit. It is essential not only to a healthy automotive industry, but to the overall economic recovery. Second, bankruptcy, under any circumstances, should not be an option. It would further erode consumer confidence and, therefore, our ability to sell at the retail level. Moreover, it would further exacerbate the availability of credit. In the days ahead, we look forward to working with the Obama Administration on immediate steps to free up credit, both at the wholesale and retail level.”