Issuu

FALL/WINTER 2023

Woodward & Associates, Inc.

1707 Clearwater Avenue ·P.O. Box 1584 ·Bloomington, IL 61702 (309) 662-8797 ·Fax (309) 662-9438 ·Email woodwardassoc@cpaauto.com ·http://www.cpaauto.com Providing service to Iowa dealerships and their related entities. We specialize in automobile dealers in the following areas:

Certified Public Accountants

Memberships in:

 Dealership valuations  Automobile dealer legal support  Buy-Sells for dealerships  LIFO inventory computations  Financial statement analysis  Corporation Income Tax returns  Personal Income Tax returns  CPA prepared financial statements  Dealer estate planning  Employee theft consulting  Internal control studies and audits  Profit consulting  Training office managers/CFO’s  401K Audits

AUTOCPA Group The American Institute of Certified Public Accountants Licensed to practice in Iowa

Serving more than 250 Automobile Dealers throughout the United States

FROM THE PRESIDENT

Always Looking to Improve My Grandpa Keith was an optimist. He was serious about the power of positive thinking and something of a disciple of Norman Vincent Peale. Grandpa subscribed to Peale’s magazine, Guideposts, which I remember reading as a kid. I think some of that outlook may have rubbed off on me, especially the part about trying to find good in everyone and being open to listening to your critics. Grandpa was quite modest and often deflected compliments by quoting Peale, “The trouble with most of us is that we’d rather be ruined by praise than saved by criticism.” As you read this edition of Iowa Auto Dealer it may seem like we drifted away a bit from celebrating Iowa’s automobile dealerships toward providing a platform to hear from regulators, industry experts, and advocates who may be more inclined to criticism than praise. But that is by design and a proper, and maybe essential, function of a bestpractices organization like IADA. My personal philosophy, admittedly influenced and derived from Grandpa’s positive thinking, is that “good enough” is never good enough, and even the best among us have room for improvement.

A case in point is this edition’s “Five Things” department, which is authored at IADA’s request by the consumer protection chief of the Federal Trade Commission specifically for Iowa dealers. While IADA is engaged in advocating against the deeply flawed and misguided Vehicle Shopping Rule promulgated by the FTC, I am convinced that only good can come from dialogue with the agency and highlighting areas of common concern. If we listen to them and understand their criticism, maybe they or other policy makers will listen to us and understand ours. It’s the same with other topics covered in this edition, ranging from copyright compliance to the critical automotive and diesel technician shortage to “diversity, equity, and inclusion.” While some would dismiss any discussion of DEI as “wokeism” run amok, there is no denying that there is a business case for recognizing and capitalizing on the fact that Iowa’s dealership employment pool and customer base are increasingly diverse. Addressing that may even help with the workforce shortage. So please don’t think for a minute that just because there may be something you perceive as critical of automobile dealers in this magazine, that IADA will ever stop singing the praises of Iowa’s automobile dealerships and the impressive job that the men and women who work in them do in meeting Iowa’s transportation needs. I know how truly good you are and how truly good you are at what you do. And I’m also as positive as my Grandpa Keith would have been that like anyone and everyone with the right attitude, we can all be even better.

Bruce Anderson IADA President

FALL/WINTER 2023

IN THIS ISSUE

01 FROM THE PRESIDENT

“Good enough” isn’t good enough.

04 NOTEWORTHY

Auto industry news from Iowa and beyond.

1111 Office Park Road West Des Moines, Iowa 50265 Phone: 515.226.1900

CHAIRMAN Dave Wright VICE CHAIRMAN Josh VanNess PRESIDENT Bruce Anderson SECRETARY Jason Willis TREASURER Jim O’Halloran IMMEDIATE PAST CHAIRMAN Jon McCoy DIRECTOR AT LARGE Tim Godfrey DIRECTOR AT LARGE Danny Wilson HEAVY DUTY TRUCK DIRECTOR Fred Grask INDEPENDENT DIRECTOR Joe Clemons DISTRICT ONE DIRECTOR Doug DeYarman DISTRICT TWO DIRECTOR Lindsay McGrath DISTRICT THREE DIRECTOR Scott Politte DISTRICT FOUR DIRECTOR Carey Kemna NADA DIRECTOR Jeff Weber EDITOR Brittany Bungert Iowa Auto Dealer (ISSN 2472-2634) is a bi-annual magazine produced for members of the Iowa Automobile Dealers Association. © 2023 Iowa Automobile Dealers Association

COVER PHOTO

Dealerships need more technicians. DEI initiatives could help.

PHOTO BY STELLA_E\SHUTTERSTOCK.COM

10 Q&A

How can dealerships find more techs?

12 FIVE THINGS

The FTC’s consumer protection chief shares what he wants Iowa’s dealers to know.

28 ODDS & ENDS

Say goodbye to paper registration and titling.

Features 16 COPYRIGHT COMPLIANCE

Make sure your dealership follows the rules when it comes to music, movies, fonts, and more.

22 THE BUSINESS CASE FOR DEI

Diversity, equity, and inclusion can help your bottom line.

TOP PHOTO COURTESY OF FEDERAL TRADE COMMISSION; SECOND FROM TOP PHOTO BY PROSTOCK-STUDIO/SHUTTERSTOCK.COM; SECOND FROM BOTTOM PHOTO COURTESY OF INDIAN HILLS COMMUNITY COLLEGE; BOTTOM PHOTO BY BIGPIXEL PHOTO/SHUTTERSTOCK.COM

Departments

ARE YOU READY FOR WINTER? UP L OL R CE T E E FL NKE BLA

7" I CE SCR APE R

ITH H W NIE PATC A E T B RETTE I N K THE LEA

BEE BAL M

Browse more and customize for your dealership at STORE.IADA.COM

NOTEWORTHY

Grants Boost Community College Programs Since 2017, the IAD Foundation has awarded money annually to support automotive education across the state of Iowa. BY BRITTANY BUNGERT

Indian Hills Community College purchased an A/C machine with grant money from the Iowa Automobile Dealers Foundation for Education. PHOTO COURTESY OF INDIAN HILLS COMMUNITY COLLEGE

As dealerships continue to look for ways to attract talent to their service bays, another way to make the industry successful has been developing. The IAD Foundation grant program supports the community college programs that educate new technicians by funding purchases the schools would otherwise be unable to make. "Automotive programs are expensive to maintain and unfortunately, when budgets are tight, their programs are one of the first to be reduced," said Mary Cason, the foundation's executive vice president. "Training equipment and tools need to be current to provide students with a reallife dealership experience before they graduate." In many instances, the grants have allowed the programs to purchase equipment used both by college students and the high school students attending their career academies. "The grant program has been very successful," Cason said. "And the requests exceed the amount allocated for funding each year."

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By the Numbers

100% $4,800 $360k

of Iowa community colleges have received at least one grant

awarded on average to a community college

awarded in total since 2017

NOTEWORTHY

EV Acceleration BY BRITTANY BUNGERT Through the first half of 2023, 12,805 electric or plug-in hybrid electric vehicles (PHEV) were registered in Iowa. That's up from the 10,355 EVs and PHEVs registered in first half of 2022.

Counties with Most EV or PHEV Registrations January–June 2023 1.

Polk 3,034

Story 553

Johnson 1,363

Black Hawk 469

Linn 1,338

Dubuque 349

Dallas 1,000

Pottawattamie 368

Scott 836

10. Warren 255

Counties with Most EV or PHEV Registrations Per 1,000 People January–June 2023 1.

Dallas 10.03

Story 5.61

Johnson 8.92

Hancock 5.09

Jefferson 7.41

Cerro Gordo 5.03

Polk 6.16

Warren 4.87

Linn 5.81

10. Winneshiek 4.83

Some counties are slower to embrace electric. A dozen counties registered fewer than 10 electric vehicles in the first half of the year. 1.

Adams 2

Monroe 7

Ida 3

Osceola 8

Ringgold 4

Worth 8

Emmet 5

10. Decatur 9

Taylor 7

10. Clarke 9

Wayne 7

10. Appanoose 9

PHOTO BY RICHARD PETERSON/SHUTTERSTOCK.COM

FALL/WINTER 2023

NOTEWORTHY

Ask JAN Employers can receive guidance about job accommodations for employees with disabilities. BY BRITTANY BUNGERT Have you heard of JAN? The Job Accommodation Network, which is celebrating its 40th anniversary, provides guidance on workplace accommodations for employers and individuals. Resources for employers include: •

A To Z of Disabilities and Accommodations, which offers information and suggestions for employers on conditions ranging from stuttering to Parkinson's Disease.

•

Workplace Accommodation Toolkit, which includes sample policies and processes and information for both hiring managers and supervisors.

•

Information on disability etiquette, starting with the recruitment process all the way to post-hire.

•

A chat feature for employers (with an option to stay anonymous) who have questions about workplace accommodations.

Visit askjan.org to tap into these free resources.

PHOTO BY PROSTOCK-STUDIO/SHUTTERSTOCK.COM

Dealerships' Economic Impact Franchised new car dealerships play a big role in Iowa's economy.

12,156 $9.9 B jobs

total sales

$505 M $76 K

state sales average tax paid employee wages 6

IOWA AUTO DEALER

SOURCE: NATIONAL AUTOMOBILE DEALERS ASSOCIATION

NOTEWORTHY

Cybersecurity Corner Smishing: Phishing by text message instead of via email Example: A text alerts you that your package was delayed and provides a link to update delivery information, but the link goes to a malicious website. Protect yourself by: •

Never responding to texts from unknown numbers.

•

Don't click links in text messages from unknown numbers. Instead go directly to the source.

•

Never provide a password or account access code to someone requesting it via text or over the phone.

? •

CURIOUS

MORE IF YOU COULD BE GETTING

FROM YOUR

WARRANTY

REIMBURSEMENT

Call the "sender" directly to verify any requests or information contained in the text message.

ENDORSED BY

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FALL/WINTER 2023

NOTEWORTHY

Made to Order The IADA Services team shares the hottest promotional products for dealerships. BY BRIANN GERMAN AND TRICIA RILEY

Slim Neoprene Can Cooler This neoprene can cooler perfectly fits bottles and narrow cans. The 3.5 mm neoprene keeps drinks cool while sporting your dealership's branding and the included full color imprint will catch potential customers' eyes. Pricing as low as $3.15 (quantity 1,000+)

Jolt Water Bottle One of our most popular water bottles, this stainless steel thermal bottle features elevated extras, including a onetouch push-button lid, locking mechanism, and removable carrying strap. Pricing as low as $13.49 (quantity 144+)

Fenway Clear Tote This stadium tote pops with bright trim available in an assortment of colors. The see-through vinyl and ample size (12¼" wide × 12" high × 6" deep) make this the bag of choice for attending events with a clear bag policy. Pricing as low as $2.85 (quantity 1,000+)

Mood Stadium Cup These color changing 12 oz. cups will delight your customers. Add an ice cold beverage and watch the color shift! Pricing as low as $0.93 (quantity 1,000+)

IOWA AUTO DEALER

NOTEWORTHY

Tri-Pocket Notebook and Pen The front cover of this 70-page notebook features three pockets with prominent placement for your logo. Keep the matching pen secure with an elastic loop. Pricing as low as $3.19 (quantity 1,000+) Imprint on pen: $0.40 each

Coloring Books Keep kids entertained while their parents make a deal. The custom coloring book features 16 pages of illustrations and activities. Pricing as low as $0.48 (quantity 1,000+)

Grip ’N’ Spin Stress Reliever This mini steering wheel is both a squishy stress reliever and fidget spinner in one. Give it a squeeze or give it a spin! Pricing as low as $2.65 (quantity 1,000+)

Microfiber Cleaning Cloth Stellar cleaning combines with a dynamic design in this microfiber cloth. The hemmed edge gives the cloth a polished look while the two fabric pieces elevate the overall feel. Pricing as low as $1.80 (quantity 1,000+)

FALL/WINTER 2023

Q&A

Tech Triage Experts weigh in on how dealerships can promote careers in the service industry. QUESTION We need techs. How do we find them? ANSWER

— MIKE COLEY

President ASE Education Foundation

The National Institute for Automotive Service Excellence (ASE) and the ASE Education Foundation are working diligently to address the shortage of automotive service professionals. The ASE Education Foundation works with more than 2,300 automotive technology training programs and more than 125,000 students nationally to provide the automotive industry a viable workforce through standards and credentials for institutions, organizations, and individuals. The foundation also offers career development and workplace exposure by creating relationships and partnerships with employers. Our Adopt-A-School program offers companies a way to show support for their local high school and college training programs and also benefits their businesses by connecting them with the next generation of repair professionals. The companies that have already adopted schools are seeing the advantages of these efforts. The goal of the Adopt-A-School program is to bridge the gap

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between businesses in the automotive industry and the schools in their local communities. Another area where ASE is at the forefront is developing work-based learning programs. We are losing more than 50% of high school students to other fields by the time they graduate and one reason is that students become comfortable in their part-time jobs and many times make more money than what entry-level/trainee technician positions pay. A solution to this issue is workbased learning programs. Previous surveys have found that 62% of students who graduated from an ASE-accredited program and participated in work-based learning were still in the industry two years after graduation. For more information on the AdoptA-School program or to get started, visit aseeducationfoundation.org/adoptaschool to access the complete Adopt-A-School toolkit, free of charge. You can also contact Rob Ferguson (rob. ferguson@aseeducation.org), our field manager for Iowa who can answer any questions about the Adopt-A-School program and work-based learning and get your company connected with schools in your area.

Q&A

ANSWER

Finding a qualified service technician is not an easy task. If you are not currently looking, you may soon be as many technicians are expected to retire in the next few years. Unfortunately, those looking to fill that position are decreasing. Recent studies show a decline in the number of high school graduates seeking post-secondary education. To ensure there are quality techs, we need to increase awareness of the career options at dealerships and expand the number of young adults who choose to enter the industry. Get Involved Dealers and their management teams can increase awareness by attending their local high school and community college career days. In several communities, the conversation about career paths starts as early as middle school. Those early interactions build awareness and goodwill about career opportunities at a dealership. Consider volunteering to serve on a community college advisory board and/or committee. Establish a relationship with the auto instructors in your area and ask if you can talk to their students. Your service team can provide great insight to students and help convey the message that professionalism, punctuality, and performance are expected at a dealership. Many students may not have any job experience or understand the importance of coming to work on time, having a clean driving record, or dressing and communicating appropriately in a work environment. Students hearing the message of what is expected at work from a dealer or GM makes a bigger impact than hearing the message from their high school or college instructors. Support Students Some dealers choose to help educate and support their own techs. Agreeing to pay

part of their tuition, purchase tools, or provide a flexible work environment allows students to attend classes while continuing to have income to pay for school. Sometimes the problem is not just finding a tech, but also keeping them. Recent graduates who need money to pay for their student loans can be quick to switch shops for a small increase in pay. Offering a retention bonus instead of a sign-on bonus encourages techs to stay, as the bonus increases the longer they are employed. Executive Vice President To maintain techs and provide Iowa Automobile Dealers more financial stability, some dealers Foundation for Education have changed from flat rate pay to an hourly rate. Others assign a mentor to shadow a new tech to help develop and support them as they begin their career. Time working the lube rack is well spent to learn the basics but keeping them there without providing other challenges leads to burnout and techs looking for other opportunities.

— MARY CASON

A Source to Help College is expensive and many students are deterred by not having the financial means to support furthering their education. Since it was established, the Iowa Automobile Dealers Foundation for Education has provided more than 425 scholarships to students seeking a career in the auto industry. The foundation will award up to 15 applicants with a $3,000 scholarship next spring. Scholarship applications will be available at iada.com/scholarships on December 1, 2023 and due on March 1, 2024. Dealers are encouraged to distribute the application to those who are interested in working in the industry.

FALL/WINTER 2023

FIVE THINGS

Five Things from the FTC The Director of the Federal Trade Commission’s Bureau of Consumer Protection shares what he wants dealers to know. BY SAMUEL LEVINE

IOWA AUTO DEALER

PHOTO COURTESY OF THE FEDERAL TRADE COMMISSION

The FTC wants what you want—happy customers and a level playing field. For many Americans, buying or leasing a car is both essential and expensive. People rely on their vehicles for work, school, childcare, groceries, medical visits, and many other important tasks in their daily lives. And for many, it’s the second largest purchase they’ll make, behind only purchasing a home. As the nation’s consumer protection agency, the FTC is charged with enforcing key laws and regulations that protect consumers in the auto marketplace, from the prohibition on unfair or deceptive acts and practices to the bar on credit discrimination. And there is much work to be done. The FTC consistently receives more than 100,000 complaints each year about new and used motor vehicle sales; financing; service and warranties; and rentals and leasing, making motor vehicle transactions one of the top ten complaint categories tracked by the agency. As a result, the auto marketplace is a priority area for the FTC in its law enforcement actions, rulemaking, consumer education, business guidance, and information-gathering efforts. Our work doesn’t only benefit consumers— law abiding dealers also stand to gain. By zeroing in on unlawful practices by dealers who cut corners, the FTC’s actions level the playing field among dealers and ensure honest dealers can compete.

Samuel Levine serves as Director of the FTC’s Bureau of Consumer Protection, where he oversees enforcement, rulemaking, and policy work across a wide range of areas, including privacy, data security, marketing, financial services, digital advertising, consumer reporting, algorithmic decision-making, and small business financing. Before his appointment as director, he served as an attorney advisor to Commissioner Rohit Chopra and as a staff attorney in the Midwest Regional Office. Prior to joining the FTC, Levine worked for the Illinois Attorney General, where he prosecuted predatory for-profit colleges and participated in rulemaking and other policy initiatives to promote affordability and accountability in higher education.

FIVE THINGS

Be honest with your customers from the first advertisement. To stay on the right side of the law, dealers need to be upfront with their customers throughout the entire transaction. Advertisements—including social media campaigns—must communicate honest pricing information, rather than luring people in the door with unobtainable prices or deal terms. If the typical person can’t walk out the door with the car at the price and on the terms you’re advertising, you are risking law enforcement action. For example, the FTC has sued dealers that have advertised a rebate the typical customer can’t get, a discount that looks widely available but only applies to a few cars, or low financing that only customers with an unexpectedly high credit score can get. Other dealers have run into trouble with the FTC when they advertise a price to get people to visit their lots, but then don’t honor that price, saying fees or charges for additional items are required. Any fees or charges that are required—like document fees—need to be disclosed in the up-front price you advertise. Remember, people should be able to make applesto-apples comparisons when shopping around for cars, rather than choosing a particular dealership based on artificially low advertised terms they can’t actually get.

Getting consent is critical. Getting your customers’ express, informed consent to charges is a key part of any commercial transaction— and it’s about more than getting a customer’s signature on a document. If dealers are simply including charges for a product in the deal documents without telling the consumer, the dealer is violating the law. An Illinois-based dealer group recently paid $10 million to settle allegations that it slipped charges for add-on products into customers’ paperwork—which often ran to 60 pages—even after many consumers specifically declined them or confirmed prices without them. Both the customer and the dealer benefit in the long run when customers understand what they’ve bought. If you offer add-on products like GAP coverage, service plans, or paint protection, make that clear from the beginning—on your website and in your advertising—so customers can bring them up if they truly want them. Don’t wait until the end of a long car-buying process, when the terms of the deal have already been negotiated extensively, to spring these products on your customers. The stakes here are larger than any one dealer. When dishonest dealers play games with car pricing or products, they draw business away from other dealers, sour customers, and hurt the reputation of the entire industry.

AssuredPartners is a proud partner of the Iowa Automobile Dealers Association. Cyber • Employee Benefits • Workers Compensation Please contact Brian Hughes for more information: 515-778-1010 AssuredPartners_Iowa Auto Dealers.indd 1

3/30/2023 12:42:37 PM

FALL/WINTER 2023

☑ Tuition ☑ Tools We can help.

iada.com/scholarships

Applications for $3,000 scholarships open December 1, 2023.

FIVE THINGS

Antidiscrimination is the law. Make sure customers in protected classes aren’t paying more than customers in other classes. Laws like the Equal Credit Opportunity Act prohibit discrimination—and they apply to auto dealers. Many of our recent cases involve dealers we said ran afoul of these requirements, harming Black and Latino customers by charging them more in financing markups and fees. And as those dealers learned, failure to comply can cost millions. One dealer group we took action against not only charged for add-ons without their customers’ consent, but also charged protected classes more for those add-ons and for arranging financing than it charged other classes. Another dealer promised a specific price for “certified” vehicles, but then charged consumers another fee for certification on top of the price that had been advertised for the certified car—and did so more often and in higher amounts to its protected class customers. Simply put, dealers must ensure that they are not discriminating, whether in arranging financing or in any other aspect of the transaction, including fees for add-ons and other products or services.

When implementing corporate policies, practices—not paper—are what matters. In thinking about compliance, think about more than just adopting policies on paper. Compliance policies are a good first step to set the right tone at the top, but they must inform the day-to-day practices of the business to be effective. Dealers must train employees on how to put the policies into practice and monitor the results. That includes paying attention to any warning signs, whether they come from one of your partners, like a financing company or add-on provider, or from your customers. And act swiftly. External concerns about compliance should trigger renewed attention to a company’s policies and practices. Remember: Compliance has to be central to your business. It’s the best way to protect your reputation and avoid problems down the road.

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FALL/WINTER 2023

PHOTO BY GROUND PICTURE/SHUTTERSTOCK.COM

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T H G I R Y P CO E C N A I COMPL

From music to television, fonts to photos, know what your dealership can (and can’t) use. BY ANGIE DISALVO

FALL/WINTER 2023

PHOTO BY PROSTOCK-STUDIO/SHUTTERSTOCK.COM

The TV in your service waiting area with the movie that only the kids are watching. The overhead music in the showroom. The meme your in-house social media team created and posted and everyone laughed about at lunch. These types of content are in our lives so many times every day that we often don’t give them another thought. But all of these materials can be out of compliance with copyright law and cost dealerships a lot of time and money if you don’t first obtain the proper licensing. “Copyright laws are written in favor of copyright owners,” said Wendy Marsh, an intellectual property attorney with Nyemaster Goode in Des Moines. “And if you infringe on it, you can be penalized heavily.” But in this digital age where everything and anything can be found with a simple internet search and shared so easily, copyright law and proper usage can be complicated for dealerships and their employees.

business-wide compliance. One of the many reasons that copyright law exists is to help encourage the creation of creative works, which can include a photo, a font created on a computer program, a movie or TV show, a musical composition, and even the design of the cars you are selling. And anyone who creates these works is considered an author in the context of copyright law.

“The idea of copyright law is that we protect the author,” said Craig Dallon, associate dean and professor at Creighton University School of Law. “And how we encourage creation of creative works is by allowing protection to authors of those creative works so that they can invest their time and energy and then have assurance so that if someone uses it, they can get paid for it. So that’s the basis for why you have to license it.”

“Playing a TV in a private setting is one thing or a radio in your car is understood. But when you play it in public, you are extending its use and you have to start Copyright Law in the Digital Age Dealers first need to understand worrying about getting licenses.” why licensing is required so that they can educate their staff and ensure

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—CRAIG DALLON

Where things can really get tricky— including for dealerships—is that there can be different license requirements depending on how you are going to use the creative work. Copyright law is not new, but the digital age has complicated it. Perhaps one of the earliest internet examples may be the uproar caused by Napster in the late 1990s. The computer program allowed users to share their music—and other content—with others who never paid for it. But this year’s Netflix crackdown on passwordsharing among friends and family is no different. In both examples, the original owners or subscribers did pay for the usage of the content. However, they paid for their own private usage. Copyright laws often require different licenses for widespread sharing and residential or private use versus commercial or public space use. “Nobody wants to pay more money,” Marsh said. “You think you already have access so why not give other people access. But you are cheating the copyright owner out of legitimate license fees. That’s what Netflix is reigning in.” Private vs. Public Performances In our homes, we watch TV and movies, listen to music, and use fonts and graphics on our own computers through a different set of rules than those that govern businesses, including dealerships. For example, your service manager cannot just bring a movie from his house and play it in the waiting room. “When a DVD is sold to me, it’s anticipated that I’m going to use it for my own personal purposes in my home,” Dallon explained. “But if I’m able to take that personal copy and stick it in a business, it’s not just being played for an intimate family group. It’s a public performance under copyright law, and I’m using it for a different purpose than it was intended.” TV shows and music pose similar

issues unless commercial licensing is obtained. When it comes to music, dealerships can purchase licenses from either a music service that obtains licensing on behalf of your business or from three organizations that represent music rights holders: • Broadcast Music Inc. (BMI) • American Society of Composers, Authors, and Publishers (ASCAP) • Society of European Stage Au t h o r s a n d C o m p o s e r s (SESAC) Video streaming services have strict rules against public performances unless you procure a commercial license. And even those that do provide a license may not cover all of the content available. Instead, dealerships can get an umbrella license from the Motion Picture Licensing Corporation that provides copyright coverage for more than 1,000 rights holders and allows dealerships to play any content

owned by those right holders, which includes everything from the Walt Disney Company to HGTV. Live broadcasts for both TV and radio have very specific rules dealerships must comply with. “People think, too, that if they play a television or radio station then it’s on the public airwaves and why would they have to pay for it, but they do,” Dallon said. “Playing a TV in a private setting is one thing or a radio in your car is understood. But when you play it in public, you are extending its use and you have to start worrying about getting licenses.” If dealers do want to deliver a live broadcast, there are a few ways they can do so and still comply with the law: • Use a single device for the live broadcast that would be used in a residential home, meaning a TV or radio that is not commercial grade and doesn’t have extra speakers or enhanced sound system. • A business over 2,000 square

Forbidden Phrases

Looking to use some pop-culture references in your advertising? Make sure to leave out these trademarked terms and phrases: • BAM! • Band-Aid • Final Four • Frisbee • I pity the fool • Jet Ski • Let’s roll • March Madness • Olympics • Popsicle • Post-It • Super Bowl • Superhero and Super Hero • This sick beat • You’re fired And if you want to support any of the local schools, state universities, or regional sports teams, be sure you have proper licenses or agreements in place. Otherwise, leave those nicknames, logos, jerseys, etc. out of your marketing materials.

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f e e t c a n n o t h av e m o r e than four televisions and they cannot be larger than 55 inches. • For a radio broadcast, use no more than six loudspeakers with no more than four in any one room or adjoining space. Marsh said it all comes down to fairness and compliance. “The copyright owner has the right to obtain a license fee based on the number of people or the size of the space. It just should cost more for 100 people to use something than it would be for one,” she said. “If you get caught, it would be a copyright infringement, because the license you bought would not be for what you were using it for.” The Internet Isn’t Free Sharing content seems to get even more complicated on the internet, where a purchase doesn’t even need to be made in order to access photos, graphics, fonts, videos, and more. But just because something is on a Google results page doesn’t mean it is free for the taking. “People think that if they find it on the internet, then it is in the public domain,” Dallon said. “In the legal term, it is not in the public domain. Often, a lot of those things are protected. That is a common misunderstanding.” Photographs and other graphics or images often are the most tempting content to take off an internet search. With a simple right click and “Save” by an employee, they can wind up on dealership websites, brochures, social media posts, and ads. However, Marsh suggested that unless you get explicit approval from the owner of any image you come across, “the default should be that it’s not OK to use.” Instead, consider getting a subscription for a reputable stock

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image site that offers commercial licenses or make sure you have permission from the owner by being the owner. “The best thing is to take your own photo,” Marsh said. “Just have your marketing people take their own photos.” When it comes to fonts, you may like that sans serif style that caught your eye but don’t have your team download that seemingly no-cost font they found on the free font website without looking into the commercial use licensing. And don’t assume that the suite of fonts that come with your subscription to a word processor or design software are allowed for commercial use either. Dealerships also get specific permissions already from their national brands that allow them to use certain content within copyright laws. So licensing for images, fonts, graphics, and more may already be purchased for you. Dealers, of course, just need to look at the specific use agreements and ensure that they are following them. Ultimately, the responsibility is on you, and when in doubt, don’t use anything you aren’t sure of or don’t have permission to use. “People can find photos on the internet and someone owns that,” Dallon said. “You can’t just repost it. You are going to owe that person. You have to get their permission or pay them for their permission.” Getting and Staying Compliant To ensure that you have all of the necessary permissions and are compliant with copyright law throughout your dealership, best practice is to conduct an inventory of all of your content. “If you can’t find documentation that you paid for the requisite license or that you have permission to use it, then I would take it down,”

Marsh said. If an issue is flagged during that audit, stop use of the offending content right away and also document all of the details (dates of use, type of content, etc.) in case a complaint comes in later on. “They need to get into compliance as soon as possible,” Dallon said. “A lot of times the content providers aren’t all out policing and hounding. They like people seeing their stuff. They realize these are their people and their fans. If you know you’ve had a problem in the past, just fix it now. And that might be all.” Stopping use right away also shows that you are acting in good faith in case you do get a cease and desist letter down the road. But there is no need to notify your attorney of a violation until someone complains. “Take it down unless you can document that you have permission,” Marsh said. “The default should be to take it down. You don’t need an attorney to explain the nuances of that.” If you do receive an email or letter accusing you of copyright infringement and aren’t sure of the validity of its claim, then be sure to contact your lawyer and ask. And at the end of the day, you put into place processes and education and be careful, because the damages for violating a copyright can be substantial—ranging from $100 p e r i n f r i n g e m e n t t o $ 3 0,0 0 0 per infringement. “Just do your audit and your due diligence,” Marsh said, “and make sure you have your licenses for everything you are using.”

“If you know you’ve had a problem in the past, just fix it now.” —CRAIG DALLON

PHOTO BY PROXIMA-STUDIO/SHUTTERSTOCK.COM

FALL/WINTER 2023

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The Business Case for DEI Creating an inclusive environment for customers and employees is good for business. BY BRITTANY BUNGERT

Increase the number of customers—and their satisfaction. Retain valued employees. Improve the bottom line. What dealership wouldn't want that? While there’s no magic wand that can instantly improve your business, there’s one thing—often overlooked—that has been proven to consistently provide positive business outcomes: Focus on diversity, equity, and inclusion. Diversity, equity, and inclusion, often referred to as DEI, has become a sometimes polarizing buzzword in recent years. But since when is treating both customers and employees with respect and dignity controversial? That’s just Iowa nice. So it shouldn't come as a surprise to any employer that creating an environment in which employees and customers feel comfortable and a sense of belonging frequently yields positive business results. “Companies that are diverse, equitable, and inclusive are better able to respond to challenges, win top talent, and meet the needs of different customer bases,” according to McKinsey & Company, a global consulting firm that studies the impact of diversity and inclusion on businesses. And as the demographics of the people

who work for and shop at Iowa’s dealerships continue to evolve, more opportunities to embrace DEI, and the benefits and challenges it brings, will present themselves. Defining Diversity Before we can have a serious discussion about DEI, we need to define diversity. What do you think of when you think of diversity? Is it race? Gender? Sexual orientation? Those are all important types of diversity, but they’re not the only types of diversity. All too frequently there is a perception that because 89% of Iowans identify as white, Iowa is not diverse. It’s true that Iowa has more significant religious diversity, for example, than racial diversity, but that is projected to change. One study projected that racial and ethnic minorities will make up almost 21% of Iowa’s population by 2040. Iowa’s fastest growing groups according to the 2020 census are people who identity as Native Hawaiian or Pacific Islander and Asians. But even within what appears to be a relatively homogeneous group of people, there is diversity.

PHOTO BY UFABIZPHOTO/SHUTTERSTOCK.COM

FALL/WINTER 2023

“It’s not all about race and it’s not always about your dominant religion or your maleness,” said Macey Shofroth, a community journalist with CultureALL, a West Des Moinesbased nonprofit that provides DEI consulting and helps Iowans expand their capacity to accept and adapt to differences. “It’s also about how you communicate with people. And how you solve conflict. How you ensure everyone’s needs are met. Those needs go far beyond just the big race, gender, religion.” Diversity in your dealership could mean having a mix of employees across four generations, who practice different religions (or no religion at all), who vote across the political spectrum. Some who are parents, some who aren't. People who are single,

Diversity in Your Dealership Your dealership is more diverse than you think.

What most people think of: • • • • • •

Age Ethnicity Gender Physical abilities Race Sexual orientation or identity

What also counts: • • • • • • • • • • • •

Communication style Education First language Geographic location Job Marital status Military service Native or non-native Parental status Political ideology Religion Socioeconomic status

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married, divorced, and widowed. Just as people aren't defined by one single characteristic, diversity is more than one attribute. So What Is DEI? The basis of DEI is the golden rule: Treat others as you want to be treated. Let's pause a moment there. Treating others as you want to be treated doesn't mean treating everyone exactly the same. If you're buying lunch and you buy yourself a hamburger, following the golden rule doesn't mean buying your vegetarian co-worker a hamburger, too. Sure, you'd both be treated equally in the everyone-gets-a-hamburger scenario. But that wouldn't be equitable. Equity and equality are two similar words with subtly different meanings. Equality means everyone is treated equally, but equity means everyone is treated fairly. When businesses start focusing on DEI, they're looking at: • D i ve r s i t y. B o t h w i t h i n employees and customers. • Equity. Is everyone being treated fairly? • Inclusion. Do all employees and customers feel included or a sense of belonging? "A lot of people consider DEI how your white population can communicate better with your African American population, when it's so much more complex than that," said Shofroth. For customers, DEI initiatives can mean that a business has employees

who look like them, speak their language, or accommodate their differences. It can mean bringing in an American Sign Language interpreter for a deaf customer or having nondairy treats during a customer appreciation event. A 2011 study published in the Journal of Marketing Research identified a phenomenon in which people spend more money when they feel relaxed and comfortable. "When we feel safe, we are better able to fully focus on the potential rewards at stake," wrote Jonah Lehrer in a 2011 Wired article about the study. What causes customers to feel safe? Inclusion. Belonging. Acceptance. Respect. Not: Snide comments. Eye rolling. Political signs hanging in the service bay. For employees, DEI initiatives can include education and training or creating employee resource or affinity groups. "Diversity training, it's not 'Here are the concepts. Here's the political correctness. Here's the privilege that you need to be aware of.' It's more about interactions," said Sherry Gupta, founder and CEO of CultureALL. There are four key components to facilitate those interactions: 1. Exposure. When employees have the opportunity to sit across the table from someone w h o i s f ro m a d i f f e re n t background. 2. Shared experience. Doing something together—whether

"Diversity training, it's not 'Here are the concepts. Here's the political correctness. Here's the privilege that you need to be aware of.' It's more about interactions." —SHERRY GUPTA

PHOTO BY SVITLANA HULKO/SHUTTERSTOCK.COM

it's taking a coffee break or going for a test drive—can help people build respect from common ground. 3. Education. Something that sparks curiosity, so people want to go seek out more information. 4. Emotional engagement. "A lot of that comes from just hearing somebody's story, understanding where they've come from, what their life experience has been," said Gupta. How each dealership approaches DEI should be as unique as the dealerships themselves and tailored to address any challenges or opportunities the business faces. The result: A stronger workforce and a more loyal customer base. "When you do this work, the workplace truly becomes a place where you are valued, where you are listened to, where your ideas matter. Where you can contribute," said Gupta.

Walking the Walk DEI is an area of focus for the McGrath Family of Dealerships. "It's still something we're learning and trying to grow and be better at," said Jaymie McGrath, director of organizational development. "A couple of years ago we actually started connecting with a DEI coach and speaker. We've had them come and speak to our management team about really, what is diversity, equity, and inclusion." The DEI coach has helped managers discover the answers to: • How does it benefit me to understand DEI? • How d o e s D E I h e l p m e understand my people? • How does DEI help our company? One way the McGrath organization has demonstrated their commitment to DEI has been through their logo. For the past couple of years, the iconic McGrath logo has changed for the month of June. The normally green shamrock sports a rainbow of colors

"... Companies in the top quartile for gender diversity on executive teams were 25 percent more likely to have above-average profitability than companies in the fourth quartile." —MCKINSEY & COMPANY

FALL/WINTER 2023

The ROI for DEI Dealers are data driven. The return on investment for DEI efforts can seem subjective, but companies that

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have studied DEI initiatives in the workplace found compelling results. "The most diverse companies are now more likely than ever to outperform non-diverse companies on profitability," according to McKinsey & Company, which found "clear correlations between diversity and business performance" in their studies. McKinsey found that companies in the top quartile for executive teams’ gender diversity were 25% more likely to have above-average profitability than companies in the bottom quartile. It's not just McKinsey finding evidence in support of DEI. According to a Morgan Stanley report, companies that take a holistic approach toward equal representation outperform less diverse businesses by 3.1% per year. A 2009 study from sociologist Cedric Herring, then at the University of Illinois, found that companies with higher levels of racial and gender diversity saw increased sales revenue and grew their number of customers. And a 2013 Harvard Business Review study found that more diverse companies were 45% more likely to report that their market share grew over the previous year. DEI can make a significant difference in a business's performance in several areas, including recruitment and retention, decision-making, innovation, customer insight, and overall image. Employees who feel valued can be a company's best ambassadors. "You want to understand your employees in the same way you want to understand your customers," said Shofroth. "You can retain those people and have them go to someone else and say, 'Hey, you should work here,' or "Hey, you should buy their product because these people treat me well.'" Having visible indicators of your dealership's commitment to employee inclusion can help with recruitment as well. According to Glassdoor, 67%

of job seekers evaluate a company's diversity practices before accepting a job offer. And diverse perspectives can make for better decision making and increase innovation. A study by the Center for Talent Innovation found that 56% of leaders don't value ideas they personally don't see a need for. When dealership leaders all come from similar backgrounds, innovation can be stifled. Wider experience and diverse perspectives of those in decision-making positions can instead broaden opportunities with customers and improve processes. Take the Step It's not just enough to have a diverse group of employees. For diversity to work its business magic, employees also need to be treated well, and be included. Different perspectives need to be valued. "Diversity does not guarantee inclusion," cautioned a report from McKinsey & Company. "Companies need to make a concerted effort to ensure equality, fairness, and openness to reap the full benefits of diversity." Dealerships beginning DEI initiatives need to keep a few things in mind. "Here's one of the really key components: It's not one and done," said CultureALL's Gupta. "We start with a three to five year picture, put it into a one-year plan, and chunk it out into 90 day goals." And acknowledge that you don't have all the answers. Stacey Kimberlin, director of DEI planning at CultureALL, encouraged dealers to have humility when tackling DEI. "[Tell them] we're on this journey. We're committed. We know there's so much we don't know, but we're going to keep finding out and keep learning about each other."

PHOTO BY BIGPIXEL PHOTO/SHUTTERSTOCK.COM

in a subtle but unmistakable show of support for Pride Month. "We know that we have people that come from all different backgrounds and people that have all different lifestyles," said McGrath. When the McGrath Group decided to create the rainbow shamrock, they wanted to back it up with something more. "We wanted to make sure though that just because we put the logo out there that it wasn't just the logo," McGrath said. "And so we wanted to make sure it kind of tied together, and we said not only are we going to do that, but we also put our money where our mouth is." The changing logo was well received by employees and customers. "I know the people that are at our company that are in that community have felt supported," McGrath said. "And then also, our community knowing that they're supported as well has been a positive piece of that, too." In addition to public-facing inclusion efforts, the McGrath organization offers groups to support employees. The McGrath Women's Network helps support female employees in what has traditionally been a male-dominated environment. And a group of McGrath employees is in the process of creating a DEI resource group. One of the catalysts for starting the DEI group was a sales manager who wanted employees across the dealership group to see opportunities and representation. "He's like, 'I want people that start in sales to see that a black man can be a manager,'" McGrath said. "A lot of times until you actually see it with your eyes, you don't know that that's a possible thing."

FALL/WINTER 2023

ODDS & ENDS

So Long, Paper Iowa dealerships are embracing electronic registration and titling. BY BRITTANY BUNGERT

New Vehicle ERT Transactions Compared to Overall Registrations

7% 7%

10,000

12,000

14,000

55% 45%

69%

64%

June

July

August

September

31%

40% 60%

May

42% 58%

April

62% 38%

March

48% 52%

February

59% 41%

January

65% 35%

6,000

36%

8,000

4,000

2,000

New Vehicles Purchased Out-of-State (Unable to Use ERT) New Vehicles Processed Via Paper New Vehicles Processed Via ERT The popular statewide electronic registration and titling system is only available for Iowa dealerships—but ERT is quickly becoming the preferred method for franchised dealerships to title and register vehicles. Since the system opened to all dealerships in mid-April, electronic registrations of eligible vehicles have

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surpassed the 55% mark in all but one month. “If a dealership isn’t using it, they are crazy,” said one ERT user. “It’s a huge time saver. I can easily keep track of all the deals as they come in and I don’t have to send checks. No more mail mishaps!”

Learn more about electronic registration and titling at iada.link/ERT.

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