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gm-logoGM dealers received some good news today as GM corporate headquarters issued a press release on their website that solves some immediate problems dealers are facing from the NHTSA's failed CARS reimbursement system. I give GM kudos for giving their dealer network some financial relief.  Let's see who else will step up and assist their dealer networks. Consumers and dealers have said that the manufacturers benefited the most from the Cash for Clunkers program and that local dealers had to bear the costs of operating the program.   GM's decision is most likely driven foreknowledge that the NHTSA will take weeks to get caught up with their backlog of reimbursements. I calculate that the NHTSA would need over 2,000 workers to get the job done in a timely fashion. This week the NHTSA promised to ramp from 300 to 1,000 workers but that is too little too late and that's why GM had to step up to the plate.  That's how I am interpreting this news today.

GM Cash for Clunkers Advance Payment

Here is the text of the official GM press release:
In order to meet high customer demand for new fuel-efficient GM cars, crossovers and trucks under the Federal CARS (Cash for Clunkers) Program, the company will today begin providing cash advances to dealers which are equivalent to the amount of federal rebates which are being processed for that dealership's qualifying new vehicle sales. As a result, dealers will have the liquidity to run their businesses effectively in the midst of this extremely successful program, and to continue immediately delivering new vehicles to GM customers. "Our sales performance in the past two months has exceeded our internal forecast by over 60,000 vehicles, largely driven by the CARS stimulus program," said Mark LaNeve, VP of U.S. Sales. "We want to do all we can to provide customers with timely new vehicle deliveries and dealers the liquidity they need to run their businesses. This will continue the sales momentum of our new fuel-efficient vehicles such as the Chevrolet Cobalt, Equinox and Buick Enclave." GM intends to provide these advances for qualifying new vehicle sales already transacted under the CARS program, and will provide advances going forward as long as the CARS program is in effect.

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