Bulletin | March 2023

ABOUT OUR ASSOCIATION

Representing the franchised new car dealers of Colorado

The Colorado Automobile Dealers Association (CADA) is the voice of the automotive retail industry throughout the state. As the automobile dealer trade association, CADA advocates issues of importance to the auto industry, Colorado auto dealers and Colorado's driving public.

The Denver Automobile Dealers Association started in 1914 to operate the annual Denver Auto Show which dates to 1902. Colorado Automobile Dealers Association soon followed and both associations operated together with shared staff and a headquarters building. In 2010, after almost eight decades together the two associations became one. The history now dates over 108 years of high level automotive and mobility impact.

Today, our dealers range from small family-owned dealerships, to nationally operated, multiple franchise corporations. CADA represents a united front for over 300 new car, truck, motorcycle and RV dealers. From local, state and federal policymakers, to the public and the media, CADA is the voice for Colorado's auto industry.

CONTACTUS

Colorado Automobile Dealers Association

290 East Speer Blvd Denver, CO 80203

303 831 1722

info@colorado.auto

www colorado auto

OURSTAFF

Tim Jackson, CAE, CMP President & CEO

tim jackson@colorado auto

303 282 1448

Marsha Temple Chief Operating Officer

marsha temple@colorado auto 303 457 5123

Matthew Groves

Vice President of Legal, Regulatory & Compliance

matthew groves@colorado auto 303 282 1449

Beth Weir Controller beth weir@colorado auto 303 457 5120

Mark Zeigler

Clear The Air Foundation Director mark zeigler@colorado auto 303.457.5105

Khorrie Luther Business Manager

khorrie.luther@colorado.auto 303 457 5122

Dan Allison Member Services Coordinator dan allison@colorado auto 303 831 1722

We're pleased to introduce Dealertrack Registration & Title as the official sponsor of our double feature event. Dealertrack is the leading provider of integrated dealership technologies that empower dealerships to better run their businesses and provide quality customer care.

Don't miss this spectacular evening of celebration. The evening will include cocktails, dinner, and entertainment against the backdrop of an exclusive first look at the Denver Auto Show floor.

ADVENTUREAWAITS

TheDenverAutoShowisthe perfectopportunitytodiscover newwaystostayactiveandenjoy thebeautyofourgreatstate. Fromcampinginaconversion vantocruisingmountainroadson anelectricbike,thiseventhas somethingforeverylifestyle.Find theperfecttransportationforyour nextgreatescape,allatthe DenverAutoShow!

CADASUCCESSFULLY NEGOTIATESRESOLUTION WITHALLIANCEON WARRANTYREIMBURSEMENT

CADA and our outstanding legislative team have won a major victory at the State Capitol over our #1 2023 legislative priority: Warranty Reimbursement at Retail Rates While the resulting legislation involved some compromise, it still largely accomplishes what we set out to get.

Throughout the interim period and leading into this legislative session, CADA’s major priority was to pass Senate bill 23-078 This was our legislative bill to clean up bill SB18219, 'Warranty Reimbursement at Retail '

Background – Why It Was Necessary

The 2018 bill accomplished two things First, it expressed the intent of the state legislature to bring customer pay rates for non-warranty service and manufacturer pay rates for warranty service into parity – we argued they should be equal to be fair Second, it created a complex process by which dealers would prove to their manufacturers what their effective customer pay rate was This involved submitting 100 consecutive repair orders (ROs) that allowed the disqualification of certain routine procedures and boil the submission down to one number This procedure prevented dealers’ gaming of the system and inflating charges by cherry picking only the best ROs.

However, the 2018 bill had a flaw The Alliance successfully negotiated a provision that gave manufacturers a fall back if

the number was too high, even when the submission proved the customer pay rate A submission that was not ‘reasonably consistent’ with other like-brand dealers in the state would be rejected It was not mathematical, and it was not up for debate, it was a “ my way or the highway” choice to either accept their offer - or sue.

Manufacturers Continued to Win at Dealers’ Expense

Four years in, this provision has been weaponized to hold down manufacturers’ costs The lowest compensated likemake dealer in the state would set the bar for ‘reasonable,’ so that other dealers could not get reimbursed for any charges above that In a time of rampant inflation, this became an egregious situation sending dealers back to the time when consumer pay ended up subsidizing warranty work

This year ’ s bill levelled the playing field in two ways. It struck ‘reasonably consistent’ and replaced it with ‘materially inaccurate ’ Thus, the only way manufacturers could deny a submission would be if the calculation of the customer pay rate was ‘materially inaccurate ’ It was decoupled from the rates being charged by competing dealerships Second, the bill went after something long held sacred to manufacturers: It tied the warranty repairs to independent time guides, not those created by the manufacturers

Carol Spradley 2023 CADA Chair

Finding the Win-Win

In spite of vocal opposition, this year ’ s legislation passed out of the Senate Business Affairs Committee 8-1 While passing it, the senators made it clear that they preferred to see negotiation and a compromise before moving this bill forward At their insistence, CADA went back to the table and managed to get the manufacturers not to object to the redaction of ‘reasonableness,’ provided that we struck the section that mentioned independent time guides

With the approval of our Board of Directors, we moved forward on this premise After amending the bill to reflect the agreement, the bill passed out of the Senate on second and third readings and now moves on to the House.This makes it very likely that we will correct our warranty pay rate language in 2023, on our first attempt.

This will be an outstanding tool for dealers to help retain service technicians and augment the service labor force which has been a long-standing top priority of the Association

Space is limited and time is running out! This momentous occasion will be an evening you won’t want to miss.

Colorado’s automotive event of the year is almost here. This double-feature evening will be an eloquent night of celebration including cocktails, dinner, and entertainment against the backdrop of an exclusive first look at the Denver Auto Show floor.

Presented by CADA, don’t miss this celebration alongside Colorado’s dealership owners, regional executives, general managers, sales managers, finance directors, service managers, and industry suppliers in support of the Clear the Air Foundation.

Tim Jackson CADA President & CEO

ZEROEMISSIONSRULE COMESFORMEDIUMANDHEAVY-DUTY TRUCKS

Many of you will remember the bruising regulatory battle of 2019, when Colorado adopted California’s Clear Car Regulation (ZEV I) Colorado had spent almost a decade straddling the fence between the federal EPA’s national emissions standard and California’s more stringent emissions standard Immense pressure fell on Governor Polis to adopt California’s rule, much of it from the environmental advocacy groups that had been the backbone of his gubernatorial victory. Colorado was continuing to tick items off the environmental groups ’ checklist, having adopted the California-style ‘Low Emissions Vehicle’ (LEV) standard a year earlier

The legal structures of the federal Clean Air Act meant that the only option for Colorado to adopt California’s standard was to do so with no changes This allowed Colorado to claim the waiver in Section 178 of the federal law that permitted states adopting California’s rule without changes without being pre-empted. CADA vociferously protested this rule made at a time when zero-emission vehicle models were not widely available and charging infrastructure was a shadow of its present self (although it still needs substantial upgrading)

As the auto industry has brought vehicle electrification to life, Colorado regulators now seek to expand the ZEV mandate to medium- and heavy- duty vehicles, or those with a Gross Vehicle Weight (GVW) more than 10,000 pounds. As we know, these are the highest-emitting vehicles on the road and are kept on the road far longer than standard passenger vehicles As a result, they continue to pollute longer than the cars, SUVs, and pickups that many CADA members sell

Entering this rulemaking, we find ourselves faced once again with the dilemma that we faced in 2019: how to get the state to understand that mandates do not clean air That’s something that only fleet turnover can accomplish If Colorado wants immediate air improvements, replacing the oldest vehicles with newer vehicles (combustion or electric) is the only path to discernable and reliable results Our friends at the Colorado Motor Carriers Association have suggested such a plan as an alternative to the Zero Emissions rule. In fact, they successfully convinced Governor Polis to delay this rule from 2022 into 2023.

Nevertheless, environmental advocates are unfazed by demonstrable evidence Instead, they are lobbying vigorously to promulgate the rule

CADA’s participation in this rulemaking will look very different than 2019. We are planning to support CMCA’s alternative proposal to accelerate fleet turnover and get 25+ year old trucks off the road. We will provide our own data to support the argument. But ultimately, we will remain neutral on the rule.

We know that California’s ZEV II rule (affecting model years 2026-2030) for light duty vehicles is just around the corner The Governor will publish an EV plan this year stating that he intends to adopt ZEV II, but stop short of adopting California’s ZEV III (affecting model years 2030-2035) ZEV III is the rule at the center of media reporting It will ultimately ban the sale of internal combustion vehicles after 2035 Governor Polis calls this solution the Colorado Way It is the most direct path towards heading off another 2019-style fight and lawsuit against an all-out ICE ban

This balanced approach is already beginning to reap some rewards Earlier this year, the Colorado Energy Office –the state’s environmental think tank – contacted CADA about the creation of a tax-based incentive plan to get Colorado from the 10% EV market penetration plateau to 20% market penetration The state is prepared to invest approximately $100 million dollars in transportation to move more electric vehicles from your lots and open some of those incentives directly to dealers.

It’s taken time, energy and careful negotiation, but our message that dealers are the fastest and most consumerfriendly path to electrification seems to be gaining steam.

Mark Zeigler Director, Clear the Air Foundation

The highly anticipated Denver Auto Show is returning to the Denver Convention Center this year and I’m happy to announce that AmFund will have a presence AmFund is a nonprofit that I’ve worked with over the past few years to provide you with the opportunity to bid on exotic trips around the

world. This year they will provide silent auction trips during the Preview Gala on April 11th and the Denver Auto Show from April 12th – 16th In addition, we will hold a live auction for two fantastic trips at the beginning of the Hall of Fame program on April 11th Last year we raised $37,000, and I plan on setting a record this year

Are you interested in helping the foundation but don’t have any vehicles to donate? I have a solution

A few weeks ago, I met with Todd Maul with John Elway Chevrolet. Todd has donated 310 vehicles from this store alone over the years plus another 50 from the former store in Greeley. That places him in rare company with over 400 donations since the foundation was formed The new reality is that he just doesn’t see the $1 cars very often Instead, Todd has generously offered to contribute $500 a month towards the Clear the Air Foundation moving forward That $6,000 a year will make up for the lack of vehicles If you are interested in participating in this program, please reach out to me today I will have our Controller, Beth Weir, send you a monthly invoice And thank you for your generous support Todd, it is life changing!

In addition to helping clear the air by removing older vehicles, our program provides valuable assistance to those pursuing a career in automotive We were recently contacted by a student at Riverdale High School who qualified to represent her school in the international DECA competition to be held in Orlando this April Ava is actively involved in their DECA (Distributive Education Clubs of America) program, and she is studying automotive services marketing. DECA prepares emerging leaders and entrepreneurs in marketing, finance, hospitality and management in high schools and colleges around the globe. The Clear the Air Foundation along with Brighton Ford will each contribute $250 towards sponsoring Ava in her quest to compete against some of the best and brightest students from around the world We wish you luck Ava!

CLEARTHEAIRFOUNDATION

2023YEARTODATEDONATIONS DEALERDONATIONS

Pueblo Dodge Chrysler Jeep Ram

The Faricy Boys

O'Meara Ford

AutoNation Chrysler Jeep Broadway

Phil Long Ford of Denver

Phil Long Ford of Raton

Schomp Nissan

Spradley Chevrolet

Alpine Buick GMC South

Dellenbach Motors

Hellman Motor Company

Mike Maroone Chevrolet South

Mountain States Toyota

Motors

Sill-Terhar Motors

Stevinson Toyota East

Audi Denver

Castle Rock Ford

John Elway Chevrolet

Johnson Auto Plaza

Mike Shaw Subaru

Morehart Murphy RAC

O'Meara GMC

Peak Kia North

Phil Long Glenwood Springs Subaru

Phil Long Honda of Glenwood Springs

Stevinson Toyota West

OTHERDONATIONS

Dealer Total Other Total 2023 YTD

CONGRATULATIONS

There are many similarities between sports and the automotive industry. They are built on competition, teamwork and constant improvement, and they honor excellence in their annual Hall of Fame celebrations That’s why the Colorado Automotive Hall of Fame was established

As basketball Hall of Famer Pat Riley explained, “Excellence is the gradual result of always striving to do better ” That striving for excellence distinguishes 2023’s Colorado Automotive Hall of Fame inductees Eight individuals will be celebrated at the Denver Auto Show Preview Gala and Colorado Automotive Hall of Fame Induction dinner on Tuesday April 11th at the Colorado Convention Center

This year’s inductees include current and former dealers, a dealer ally and CADA’s president:

Nancy Ariano

Nick Davidson

Mike Faricy

Paul Gebhardt

Tim Jackson

Brian O’Meara

Larry Pomarico

Kevin Shaugnessy

Looking Back

The inaugural Colorado Automotive Hall of Fame induction recognized 50 present and past dealers, all of whom had been Colorado nominees for the TIME Dealer of the Year, plus longtime automotive journalist Bud Wells The first induction dinner had to be postponed because of the Covid-19 pandemic and finally was held in conjunction with the Denver Auto Show in September 2021 at Elitch Gardens

“It was a very special moment,” says Todd Maul, who was an inductee and is the 2022 and 2023 Hall of Fame chair. “Of course, we didn’t do an auto show last year, but we did do the first post-year inaugural event [at the 2022 Annual CADA Convention at the Broadmoor]

The first class of inductees was very large but also easy to choose Identifying subsequent inductees required settling on nominating and judging criteria and then selecting inductees Committee Chair Todd Maul suggested that the process would be helped by having the committee serve two consecutive years Jeff Carlson, Mary Pacifico-Valley, Anthony Brownlee, Bob Ghent, Brent Wood, Doug Moreland, John Schenden, worked with Maul both years, with the addition of this year ’ s CADA chair, Carol Spradley

“Our goal was to make sure that the Colorado Automotive Hall of Fame was kept as a special recognition It wasn’t as heavy a lift this year, ” since the standards had already been

determined by the committee last year. The committee agreed the Colorado TIME Dealer of the Year nominee should be an automatic honoree, and also include a member of an allied business

How This Class Was Chosen

Maul said the committee focused on maintaining and continuing the Colorado Automotive Hall of Fame Induction as a special recognition and putting it back together with the Denver Auto Show

“We’re really excited because we ’ re having our auto show at the Colorado Convention Center and are going to have the Preview Gala as well, which is where this event belongs What’s very special about the Preview Gala is that it raises money for the Clear the Air Foundation, which has been so successful for so many years as new car dealers’ commitment to a clean, green future,” he said

“We received some qualified nominations, and just as we did the prior year the process worked perfectly and we agreed on some excellent inductees,” Maul said Nominees have to be or have been: 1) a franchise new car dealer, executive or industry affiliate with current or past involvement focusing on supporting dealers; 2) a current or past CADA and NADA member; 3) willing to participate in the induction ceremony

After gathering nominations, the nominating committee considered if the nominee:

Promoted customer satisfaction in the industry

Exhibited on-the-job competence, attitude and record of service

Had strong ethics

Showed leadership

Was well respected in the industry

Participated in CADA

Performed service to the community and humanity

Was involved in civic, political and educational activities

Made other notable contributions that benefited others

This year ’ s Colorado Automotive Hall of Fame inductees embody those qualities. Their stories offer a window into what has made our industry so important to the state and its economy

The 2023 Inductees

Nancy Ariano – Tru West Automotive in Cortez and New Country Automotive in Durango.

Having built two successful businesses – one in her Durango hometown and another in Cortez, Nancy is a great example of how women have successfully integrated into the industry. She believes in listening to the experts, following their advice and empowering her employees to succeed for her and themselves She led CADA as the first female chair and has been a community leader and powerhouse in Durango

Nick Davidson – Davidson Gebhardt Chevrolet and Subaru of Loveland.

Son and nephew of dealers and father-in-law and grandfather to dealers, Nick bought a Chevrolet-BuickPontiac store in Loveland when the town was very small He saw its potential and continued to grow His philosophy was that volume beat big unit profit and translated to more market share, parts and service business and referrals While he supported the local United Way and Loveland’s arts scene, he favored personal and quiet philanthropy

Mike Faricy – The Faricy Boys Automotive in Colorado Springs.

Mike continued the business started by his father and uncle He started by working in various departments every summer after sixth grade, a practice that he continued with his sons, who have continued to expand the business His philanthropy has centered around his deep faith, founding and supporting a maternity home for unwed mothers, Catholic Charities, homeless rescue missions, and serving on the Centura Health board

Paul Gebhardt – Gebhardt BMW of Boulder.

Paul followed his father into the automotive industry After working for Chevrolet, he bought a store in Iowa A deal on a Colorado Springs dealership fell through and led him to work as a district manager for BMW He bought a BMWSaab-Fiat dealership in Boulder, which he expanded He eventually included several family members in the business and over the years represented 11 different brands He credited his success to his desire to care for both customers and employees He supported the YMCA, Boulder Community Hospital and many CU-related efforts

Tim Jackson – President of CADA.

Tim got his start owning an independent automotive business in his hometown of Hamilton, Missouri Involvement in the local Jaycees led to his interest in association management and several positions He came to Colorado as state director of the National Federation of Independent Businesses and came to CADA in 2004 His tenure has been marked with many legislative and regulatory successes, initiating Legislative Grassroots Meetings, the CADA-supported Clear the Air Foundation, building a strong network within CADA and stabilizing our finances He’s known for long hours and abundant energy

Brian O’Meara – O’Meara Ford-Volkswagen-GMC.

It’s fair to call Brian’s family a Colorado automotive dynasty It began with his grandfather Al O’Meara, Sr, who started the Ford dealership in downtown Denver in 1913 Brian’s success as a local rock star gave him the money to buy a stake in the family business, becoming GM at age 26 and growing the business substantially His sons are now the fourth generation of O’Meara dealers Brian’s philanthropy has touched thousands of lives It includes the Colorado Eye Institute, Morgan Adams Foundation and Wings Over the Rockies

Larry Pomarico – SouthWest Dealer Services (SWDS).

A Denver native, Larry bounced around after college until he found his niche in automotive at Pat Ryan & Associates He became division vice president before leaving to co-

found SWDS, which he built into a powerhouse business offering automotive finance and insurance services, training, consulting and more Besides his business, Larry loved all kinds of sports, especially football He also was passionate about animals, particularly mistreated and rescue dogs, lavishing both money and attention on them

Kevin Shaughnessy – Phil Long Dealerships.

Kevin is Colorado’s 2023 TIME Dealer of the Year nomin

His part-time gig in Albuquerque auto sales led him to Colorado for a job in 2006 as general sales manager a Phil Long Ford He graduated to GM, bought an intere and became managing partner in 2013 Five years late Jay Cimino tapped him to become VP of operations a partner He now oversees 16 dealerships in Colorado a New Mexico He shares Phil Long’s customer-centered business philosophy and community and philanthrop ideals, overseeing the annual United Way campaign a sitting on the board of the nonprofit Mount Carmel Veterans Service Centers

Looking Forward

The automotive industry has changed immensely. There are many more corporate dealerships in Colorado than there were just a decade ago. That’s why the Colorado Automotive Hall of Fame recognition is important, according to CADA Chair Carol Spradley. “It’s important to recognize the leaders in our field It sets a precedent for doing business and gives dealers people to look up to and strive for the same distinction ”

Kevin Shaughnessy

Nancy Ariano

Brian O'Meara

Larry Pomarico

Mike Faricy

Nick Davidson

Paul Gebhardt

Tim Jackson

While engaging Colorado’s automotive elite, your sponsorship also supports the Clear the Air Foundation, a 501(c)(3) foundation. The goal of the Clear the Air Foundation is to help improve the quality of air we breathe while providing scholarships to students who want to further their education in automotive or technology fields. Through your sponsorship of the Colorado Automotive Hall of Fame and the Denver Auto Show Preview Gala, your company or organization will be seen as a key benefactor to this highly regarded charitable organization. Thus, enhancing your corporate leadership position and corporate social responsibility outreach.

PREMIER SPONSOR | $20,000

Below the name brand logo position on entrance signage, Logo on one (1) red carpet “step-n-repeat”, Two premium Hall of Fame tables for (10) guests for a total of twenty (20) tickets, Recognition in CADA Bulletin e-newsletter mailed to 2,500 automotive professionals 12x annually, Sponsor may provide ongoing relevant editorial content, and Sponsor recognition in CADA Open Road e-newsletter distributed to 2,000.

Logo on entrance signage, Logo on one (1) red carpet “step-n-repeat”, One premium Hall of Fame table for (10) guests, and Logo placement in CADA Bulletin e-newsletter sent to 2,500 automotive professionals 12x annually.

Logo recognition in CADA Bulletin enewsletter sent to 2,500 automotive professionals 12x annually and One table of ten (10) to Hall of Fame.

Six (6) tickets to Hall of Fame dinner & Denver Auto Show Preview Gala.

Matthew Groves

Vice President of Legal, Regulatory and Compliance

FAIRWORKWEEKBILL DIESINTHEHOUSE

Those of you who read Open Road each Tuesday will remember I recently wrote about HB 23-1118, the Fair Workweek Employment Standards bill Introduced by Emily Sirota (D-Denver), this bill sought to introduce a host of employee pay rules that were hostile to business owners

Central to this bill, employers would have been required to release work schedules two weeks in advance, offer additional work hours or shifts to existing workers prior to hiring new ones, create ‘predictability’ pay to compensate those employees who were involuntarily cut early from a shift, and require predicted work plans for every employee that must be adhered to throughout the employee’s tenure at the company.

This bill was immensely unpopular within the business community Led by the Colorado Chamber of Commerce, more than 65 groups joined forces in opposition to this bill Retail, restaurants, and a variety of Economic Development Corporations from across the state packed the hearing room of the House Business Affairs & Labor Committee, testifying until 10 pm in against to the proposal

Initially, the bill was laid over for action only, giving sponsors and opponents the opportunity to resolve their differences and develop a workable compromise Ultimately, the two sides were intractable on some of these issues, and the bill was postponed indefinitely on an 8-2 vote. Postponing indefinitely is what legislators refer to as ‘killing’ a bill.

While CADA took no official position on the bill on account of our pending Warranty Reimbursement at Retail legislation, we did participate through coalitions, providing arguments to various Chambers to be used in testimony at committee That said, we are incredibly grateful to the Colorado Restaurant Association and the Colorado Chamber and Denver Metro Chamber for taking lead and being the public face of the movement to kill this disastrous legislation Further, we congratulate our own Director Jessica Zumbrun, with the McDonald Automotive Group, for her participation

Without a doubt, there is more bad general business legislation coming this year The business community will not be able to kill it all. So, we are fortunate that our ability to unite and mobilize can take down the most egregious policy options. We will likely be updating you throughout the term on workers compensation, harassment, and more wish list items from the trial lawyers and labor unions as we approach the closing date for the 2023 legislative term.