Massachusetts Auto Dealer Magazine May 2018

MSADA, One McKinley Square, Sixth Floor, Boston, MA 02109

auto M a s s a c h u s e t t s

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May 2018 • Vol. 30 No. 5

The official publication of the Massachusetts State Automobile Dealers Association, Inc

Annual Me eting 2018

FIRST CLASS MAIL US POSTAGE PAID BOSTON, MA PERMIT NO. 216

Ma s s a c h u s e t t s

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S ta f f D i r e c t o r y Robert O’Koniewski, Esq. Executive Vice President rokoniewski@msada.org Jean Fabrizio Director of Administration jfabrizio@msada.org Peter Brennan, Esq. Staff Attorney pbrennan@msada.org Jean Harris Administrative Assistant/ Membership Coordinator jharris@msada.org Auto Dealer MAgazine Robert O’Koniewski, Esq. Executive Editor Tom Nash Editorial Coordinator nashtc@gmail.com Subscriptions provided annually to Massachusetts member dealers. All address changes should be submitted to MSADA by e-mail: jharris@msada.org.

Postmaster: Send address change to: One McKinley Square, Sixth Floor Boston, MA 02109 Auto Dealer is published by the Massachusetts State Automobile Dealers Association, Inc. to provide information about the Bay State auto retail industry and news of MSADA and its membership.

Ad Directory Bellavia Blatt & Crossett, P.C., 22 BlumShapiro, 23 Boston Herald, 32 Ethos Group, 2 Lynnway Auto Auction, 24 O’Connor & Drew, P.C., 31 Southern Auto Auction, 21 ADVERTISING RATES Inquire for multiple-insertion discounts or full Media Kit. E-mail jfabrizio@msada.org

Quarter Page: $450 Half Page: $700 Full Page: $1,400

Back Cover: $1,800 Inside Front: $1,700 Inside Back: $1,600

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The official publication of the Massachusetts State Automobile Dealers Association, Inc

Table of Contents

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From the President: Power in Numbers ASSOCIATE MEMBERS DIRECTORY THE ROUNDUP: Dealers Convene for 78th Annual Meeting and Dealer Day on Beacon Hill TROUBLESHOOTNG: Frequently Asked Questions legislative scorecard ACCOUNTING: Questions for the New Selling Season Sound Off: The Importance of Natural Gas AUTO OUTLOOK

16 Cover Story: 21 25 26 28 29

2018 MSADA Annual Meeting NEWS From Around the Horn LEGAL: Massachusetts Pay Equity Law Goes Into Effect July 1 nada Market Beat TRUCK CORNER: ATD Membership Offers Many Benefits nada update: Taking Action on Auto Loans

Join us on Twitter at @MassAutoDealers www.msada.org

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From the President

MSADA

Power in Numbers

MSADA shows its impressive strength in two key events

By Chris Connolly, MSADA President Thank you to everyone who made treks to Boston for both our MSADA Annual Meeting and our Dealer Day on Beacon Hill this month. It was wonderful to hear from folks like Lt. Gov. Karyn Polito, who seem to appreciate the work we do in our communities each day to make them better places to live. You will find all of our coverage from the Annual Meeting on page 16 of this magazine.

My warm thanks go to Executive Vice President Robert O’Koniewski and the Association team who put together another fantastic event. We heard a lot of great ideas, information, and opinions in a wonderful setting.

I was especially impressed that Lt. Gov. Polito recog“It is nized our efforts to give back to the cities and towns we call important home. Among the statements she made to that effect, she that we noted: “You never say ‘no’ when the community asks you to do something. You are always there; you always give back.” continue It is important that we continue to give back to our commuto give nities and also work to better our own. Operating a business back to our such as ours requires constant vigilance on any number of fronts, and we rely on the dozens of people we employ every communities day to cover everything else. Creating a community out of and also work business owners who are so constantly occupied can be a tall to better our order, but it is essential to ensure that we are able to learn about and understand the common threats we are all facing own.” from regulators, lawmakers, and sometimes our own OEMs. Safeguarding our industry requires a constant watch for threats both new and old, and communication is job No. 1. Our Dealer Day on Beacon Hill is a chance to bring our world into legislative offices to help them understand our issues. These folks are given the opportunity to see how much of the state’s economy we represent and how we are vital players in any local community. These are the moments legislators remember when we knock on their office doors, and they can make all the difference when our opposition has limitless money to throw against us.

As we move into the Summer sales season, I ask that you continue to do your best to keep up on what your Association is doing to protect our community. We need you, our member dealers, to continue to be ready with emails, phone calls, and other grassroots communications, as we continue to push our industry’s future forward.

While our industry as a whole has won some major battles lately, we can never lose sight of the next regulatory or legislative hurdle. If we work together on the problems our industry encounters, our Association will continue to thrive in the face of the challenges that come our way. t MAY 2018

Massachusetts Auto Dealer www.msada.org

Msada Board Barnstable County

Brad Tracy, Tracy Volkswagen

Berkshire County

Brian Bedard, Bedard Brothers Auto Sales

Bristol County

Richard Mastria, Mastria Auto Group

Essex County

William DeLuca III, Woodworth Motors Don Sudbay, Sudbay Motors

Franklin County

Jay Dillon, Dillon Chevrolet

Hampden County

Jeb Balise, Balise Auto Group

Hampshire County

Bryan Burke, Burke Chevrolet

Middlesex County

Chris Connolly, Jr., Herb Connolly Motors Frank Hanenberger, MetroWest Subaru

Norfolk County

Jack Madden, Jr., Jack Madden Ford Charles Tufankjian, Toyota Scion of Braintree

Plymouth County

Christine Alicandro, Marty’s Buick GMC Isuzu

Suffolk County

Robert Boch, Expressway Toyota

Worcester County

Steven Sewell, Westboro Mitsubishi Steve Salvadore, Salvadore Auto

Medium/Heavy-Duty Truck Dealer Director-at-Large [Open]

Immediate Past President [Open]

NADA Director

Scott Dube, Bill Dube Hyundai

Officers

President, Chris Connolly, Jr. Vice President, Charles Tufankjian Treasurer, Jack Madden, Jr. Clerk, Steve Sewell

Associate Members MSADA A ssociate M ember D irectory ACV Auctions Will Morris (860) 670-7867 ADESA Jack Neshe (508) 626-7000 Albin, Randall & Bennett Barton D. Haag (207) 772-1981 American Fidelity Assurance Co. Dan Clements (616) 450-1871 American Tire Distributors Pamela LaFleur (774) 307-0707 Armatus Dealer Uplift Joe Jankowski (410) 391-5701 AutoAlert Jessica Gates (816) 506-0515 Auto Auction of New England Steven DeLuca (603) 437-5700 Auto/Mate Dealership Systems Troy Potter (877) 340-2677 Automotive Search Group Howard Weisberg (508) 620-6300 Bank of America Merrill Lynch Dan Duda and Nancy Price (781) 534-8543 Bellavia Blatt & Crossett, PC Leonard A. Bellavia, Esq (516) 873-3000 Blum Shapiro John D. Spatcher (860) 561-4000 BMO Harris Bank Chris Peck (508) 314-1283 Boston Globe Anthony Merullo (617) 929-2337 Broadway Equipment Company Fred Bauer (860) 798-5869 Burns & Levinson LLP Paul Marshall Harris (617) 345-3854 C-4 Analytics LLC Rob Stoesser (617) 250-8888 Capital Automotive Real Estate Services Willie Beck (703) 394-1323 CDK Global Chris Wong (847) 407-3187 Construction Management & Builders, Inc. Nicole Mitsakis (781) 246-9400 Cox Automotive Ernest Lattimer (516) 547-2242 CVR John Alviggi (267) 419-3261 Dealer Creative Mike Otis (315) 382-3675 Dealerdocx Brad Bass (978) 766-9000 Dealermine Inc. Jane Webb (800) 304-3341 DealerSocket Shelly Del Rosario (949) 900-0300 Downey & Company Paul McGovern (781) 849-3100

Eastern Bank David Sawyer (617) 897-1125 EasyCare New England Greg Gomer (617) 967-0303 Ethos Group, Inc. Drew Spring (617) 694-9761 F & I Resources Jason Bayko (508) 624-4344 Federated Insurance Matt Johnson (606) 923-6350 First Citizens Federal Credit Union Joe Ender (508) 979-4728 Fisher Phillips LLP John Donovan (404) 240-4236 Joe Ambash (617) 532-9320 Gatehouse Auto Jay Pelland (508) 626-4334 Gulf State Financial Services Tom Foster (832) 628-1916 GW Marketing Services Gordon Wisbach (857) 404-0226 Harbor First Ron Scolamiero, Michael Scolamiero (617) 500-4080 Hireology Kevin Baumgart (773) 220-6035 Huntington National Bank John J. Marchand (781) 326-0823 JM&A Group Jose Ruiz (617) 259-0527 John W. Furrh Associates Inc. Kristin Perkins (508) 824-4939 JP Morgan Chase Bank Alex Khademi (404) 375-4504 Key Bank Mark Flibotte (617) 385-6232 KPA Tim Whelan (303) 802-3019 Leader Auto Resources, Inc. Curt Murray (978) 201-4797 Lynnway Auto Auction Jim Lamb (781) 596-8500 M & T Bank John Federici (508) 699-3576 Management Developers, Inc. Dale Boch (617) 312-2100 Micorp Dealer Services Robert Calhoun 617-285-4833 Mid-State Insurance Agency James Pietro (508) 791-5566 Mintz Levin Kurt Steinkrauss (617) 542-6000 Murtha Cullina Thomas Vangel (617) 457-4000

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Nancy Phillips Associates, Inc. Nancy Phillips (603) 658-0004 Northeast Dealer Services Jim Schaffer (781) 255-6399 O’Connor & Drew, P.C. Kevin Carnes (617) 471-1120 Performance Management Group, Inc. Mark Puccio (508) 393-1400 PreOwned Auto Logistics Anthony Parente (877) 542-1955 R.L. Tennant Insurance Agency, Inc. Walter F. Tennant (617) 969-1300 Reflex Lighting Daryl Swanson (617) 269-4510 Resources Management Group J. Gregory Hoffman (800) 761-4546 Reynolds & Reynolds Mike O’Connor (860) 462-7958 Robinson Donovan Madden & Barry, P.C. James F. Martin, Esq. (413) 732-2301 Samet & Company John J. Czyzewski (617) 731-1222 Santander Bank Richard Anderson (401) 432-0749 Schlossberg & Associates, LLC Michael O’Neil, Esq. (781) 848-5028 Sentry Insurance Company Eric Stiles (715) 346-7096 Shepherd & Goldstein CPA Ron Masiello (508) 757-3311 Southern Auto Auction Joe Derohanian (860) 292-7500 Sprague Energy Claude Peyrot (603) 430-7254 SunPower Christie McCarthy (408) 457-2357 Kristin Hodges (707) 694-7759 SunTrust Bank Michael Walsh (617) 345-6567 Target Dealer Services Andrew Boli (508) 564-5050 TD Auto Finance Marc Gerhart (781) 697-1525 TrueCar Pat Watson (803) 360-6094 US Bank Vincent Gaglia (716) 649-0581 Wells Fargo Dealer Services Deb Hogan (508) 951-8334 Zurich American Insurance Company Steven Megee (774) 210-0092

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The Roundup

Dealers Convene for 78th Annual Meeting and Dealer Day on Beacon Hill

By Robert O’Koniewski, Esq. MSADA Executive Vice President rokoniewski@msada.org Follow us on Twitter • @MassAutoDealers

On Friday, May 4, your Association convened its 78th Annual Meeting of the Members at the Mandarin Oriental Hotel in Boston. We had a successful turnout of members, and attendees heard from a diverse group of speakers, including: • Your MSADA President, Chris Connolly; • Massachusetts NADA Director Scott Dube; • Massachusetts Lt. Governor Karyn Polito; • U.S. Senate candidate Beth Lindstrom (R); • Brian Finkelmeyer of vAuto/Cox Automotive, whose presentation was entitled, “All New Metrics for Driving New Car Success”; • Guido Vildozo, IHS Markit, who provided a market outlook for the coming years; • Attorney Jeff Fritz, Fisher Phillips, who provided an employment law update for 2018; • Shawn Allen of Clark Lavey Benefits Solutions, on how dealers can potentially save on employee health insurance costs; and • Peter Brennan and I gave a government affairs report to update members on legislative events so far in 2018.

We owe a huge “thank you” to our sponsors for the day, without whose assistance we could not put on such fine events: • ACV Auctions – Silver Sponsor • Auto/Mate Dealership Systems – Bronze Sponsor • Blum Shapiro – Bronze Sponsor • Burns & Levinson – Luncheon Sponsor • Cox Automotive – Gold Sponsor • Downey & Company – Break Station Sponsor • Easy Care New England – Friend of the Association Sponsor • GW Marketing Services – Friend of the Association Sponsor MAY 2018

Massachusetts Auto Dealer www.msada.org

• Key Bank – Bronze Sponsor • Murtha Cullina – Cocktail Reception Sponsor • Northeast Dealer Services – Bronze Sponsor • O’Connor & Drew – Silver Sponsor • SunPower – Bronze Sponsor • SunTrust – Bronze Sponsor • TrueCar – Platinum Sponsor • Zurich – Bronze Sponsor You can read the details of our meeting in this month’s cover story beginning on page 16.

Dealers Visit Beacon Hill Almost every dealer has some sort of relationship with his or her legislators at the local level, whose roots can be found in the interaction of our businessmen and women and politicians in any number of different settings. Until six years ago, however, dealers had never collectively come together to communicate directly with legislators at their place of business, the State House.

On May 23, your Association held its sixth annual “Dealer Day on Beacon Hill” event designed to bring our member dealers right into the political arena where the legislative decisions are made affecting your businesses. Dealers and their key employees convened in the morning at the Parker House Hotel, just down the street from the State House.

We provided attendees an issues briefing on our legislative priorities as we are now half-way through the second year of the current two-year session. With public hearings over and the committees having reported out bills of keen interest, the House and Senate each have bills before it of serious viability, which MSADA supports: • Reform the Used Vehicle Record Book:

MSADA Senate 2269 (Sen Rush) would reform the manner in which dealers maintain the statutorily required used vehicle record book by allowing for a computer-based dealer management system in lieu of the hand-written log books presently used by auto dealers. The Senate has passed this bill, and it now sits in the House Ways and Means Committee.

• Vehicle Inspection Facility License for Franchise Dealers: Senate 2261 (Sen deMacedo)/House 3866 (Rep Markey, Rep Howitt) would require the Registry of Motor Vehicles to grant an inspection facility license to any franchised new car dealer that abides by the appropriate rules and regulations and invests a threshold dollar amount ($2.5M) in a new dealership or the rehabilitation of an existing dealership. The Senate has passed Senate 2261, and it now sits in the House Ways and Means Committee. Additionally, the Transportation Committee reported House 3866 favorably, and it also now sits in the House Ways and Means Committee.

• Temp Tags for Out-of-State Sales: House 4342 (Rep Golden, Arciero, Howitt)/Senate 2456 (Sen Flanagan) would direct the Registrar of Motor Vehicles to implement a program for the issuance of temporary license tags to vehicles purchased by out-of-state customers, thereby allowing them to be driven from a Massachusetts sales lot to the buyer’s home state.

The Transportation Committee reported House 4342 and Senate 2456 favorably, and each now sits in its respective Committee on Ways and Means.

• Protect Consumer Choice in Vehicle Service Contracts: Senate 570 (Sen O’Connor Ives) would create a statutory framework for the sale of vehicle service contracts (VSC) in the Commonwealth, including a provision to protect consumer choice in the purchase of service contracts and ancillary products; automobile manufacturers would be prohibited from forcing their franchise dealers to exclusively carry specific products backed by a captive or vendor preferred by the manufacturer. The Financial Services Committee reported the bill favorably, and it now sits in the Senate Ways and Means Committee.

Finally, while we were at the State House, the House and Senate were engaged in competing efforts to provide more funding for municipal police training programs. The scheme they each have settled on would assess a new $2.00 surcharge on all vehicle rental contracts in order to fund certain police training activities. Uber and Lyft rides, as well as hourly rental contracts of less than 12 hours in duration, would be exempt from the surcharge.

While the Senate was passing an amendment to its FY 2019 budget as it debated next year’s spending plan, the House was passing its own stand-alone legislation creating the surcharge. How and when this gets resolved – either as its own bill or through the budget process – is anyone’s guess at this point. Regardless, legislators seem intent on getting something done.

Although we attempted through the amendment process to exempt from the surcharge loaner and rental contracts tied into a warranty or recall repair where a customer will not have use of his or her vehicle during the repair period, the legislators were not entertaining any amendments from anyone to change anything. There are many procedural ambiguities as to how this surcharge would work, but like everything else that seems to get done, legislators are content to let implementation worries not hold them back from passing anything.

Nevertheless, we reminded our dealers that, as they made their visits throughout the day, it is important to tell your own stories regarding your role in the community, including your economic impact, the employees you manage, and the taxes they, your customers, and you pay. Legislators know dealers and dealerships exist; they just do not know the long and deep reach of your businesses’ tentacles into the state and local economy and throughout the community, especially through your charitable and other service-related activities. All our dealers were well received, and the dealers’ presence throughout the building created quite a buzz.

In order to build on the successes of our “Dealer Day” events, it is vital that we continue to grow our attendance and participation amongst our members for our events. www.msada.org

It is extremely helpful to our lobbying efforts for legislators to see their constituents face to face and receive a perspective they don’t have in the normal course of their activities. No one knows your business better than you. That knowledge needs to be conveyed to your legislators in an environment and manner they understand. As a result of our dealers’ input, this event was a success upon which we can build for the future.

Congress and President Trump Act to Protect Auto Loan Discounts for Consumers On May 21, President Donald Trump signed into law S.J. Res. 57, a measure passed by Congress to reject the Consumer Financial Protection Bureau (CFPB) issued “guidance” to auto lenders in 2013, which could have eliminated the ability of car dealerships to discount loans for their customers.

The Senate initially passed the resolution repealing the CFPB’s guidance on a 51-47 vote on April 18. The House followed suit less than a month later, by a vote of 234-175 on May 9. Not one member of the Massachusetts delegation (9 House, 2 Senate) voted in the affirmative.

“Next Level Leadership” Summit – June 8, Natick On Friday, June 8, dealers can participate in a half-day event called “Next Level Leadership”, presented by our endorsed partner Ethos Group, at the Verve Hotel, in Natick. The forum will run from 8:30 a.m. to 12:30 p.m.

This MSADA-sponsored event is open to all of our dealer members and is intended for dealer principals, general managers, finance managers, service managers, and general sales managers.

Learn how to evaluate, strategize, and execute a solid action plan to rise above your competition, including Service-SalesF&I: a Unified Message; Developing the Leader’s Mindset; Consultative Selling Philosophy; Selling to Millennials; Recruiting and Retaining Winners; and Providing an Exceptional Customer Experience.

Dealers and their key staff can register at www.nextlevelleadership2018.com. t Massachusetts Auto Dealer

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MSADA

Troubleshooting

Frequently Asked Questions

By Peter Brennan, Esq.

MSADA

Staff Attorney This column will periodically review some of the frequently asked questions that MSADA answers for our members through our member counsel service.

Question: Can you clarify when I can and cannot text a customer or potential customer? I know there is a law, but I am not sure what my responsibilities are.

Answer: Generally, you should not send a text to anyone without receiving their prior express consent. If the text is an “autodialed” marketing message, you cannot send it to a person unless you have their prior express written consent.

For instance, suppose you want to run a targeted marketing program to service customers with over 100,000 miles on their vehicles who provided their cell phone numbers at the time of service. Can you use that cell phone number to send the customer an unsolicited offer stating: “Dear Customer, at your last service we recorded the odometer of your 2014 Ford Taurus at 105,000 miles. As a loyal customer we will give you $3,000 off the MSRP on any 2018 Ford Taurus we have in stock. Please call 888-555-5555 for more information on our customer loyalty discount”?

To legally send that solicitation, you would have to have previously obtained the customer’s signature on a consent form which unambiguously stated that they wanted to receive such communicaMAY 2018

tions. Here is an example of the language the customer would need to agree to and sign below: “I hereby consent to receive autodialed and/or pre-recorded telemarketing calls and/or text messages from or on behalf of [DEALER] at [888-5555555]. I understand that consent is not a condition of purchase.” Consent forms should be maintained by the dealership for at least four years.

The law that governs in this area is the Telephone Consumer Protection Act (TCPA), which also includes phone calls.

There has been an exponential increase in TCPA lawsuits in recent years, including many class actions against dealerships and dealer groups. The potential liability for TCPA infractions is enormous, as the statute allows a private right of action and either actual or statutory damages of $500 to $1,500 for each unsolicited text or call. For dealers facing a TCPA class action, the potential liability is well into the millions.

Question: May our dealership charge every service customer a set fee or percentage of their bill for the disposal of environmentally hazardous materials, regardless of whether we took in hazardous materials during the repair?

Answer: A dealership may charge a fee for the disposal of environmentally hazardous material, but only if hazardous materials are actually removed and disposed of by the dealer during the repair. Charging a fee for any services not performed during a service visit is a clear violation of the Attorney General’s regulations at 940 CMR 5.05. Any disposal fee charged should be reasonable in relation to the services performed, and it can be included as a set amount or percentage of the total charge for particular services, presuming the fee is disclosed to the customer at the time that the customer authorizes the repair. The disposal fee should also then be explicitly stated on the customer’s receipt. Posting a conspicuous notice regarding the hourly labor rate, parts

Massachusetts Auto Dealer www.msada.org

costs, shop supplies charge, and other potential fees, such as the disposal fee, in an area where the notices will be visible to the customer is a good way to show actual notice under the regulations and will protect dealers that face a customer complaint based on “hidden costs”.

Any fee charged to the customer for the disposal of hazardous materials is subject to the sales tax. This is the case whether the fee is charged as a percentage of the total repair or as a flat fee.

Question: Are manufacturer’s rebates subject to state and local sales tax?

Answer: The answer depends on whether the rebate is applied at the time of the sale or sometime after the sale. Under Massachusetts Department of Revenue rules, if a motor vehicle dealer sells a motor vehicle to a customer who applies a manufacturer’s rebate to reduce the sales price at the time of the sale, such rebate is treated as a cash discount and excluded from the sales price subject to tax.

However, in the case of a rebate that the customer applies for after the sale, such as the rebate currently offered on certain zero emission vehicles through the Commonwealth’s MOR-EV program, the sales tax is based on the full purchase price of the property. In the case of the MOR-EV rebate, the customer must complete the transaction at the dealership and then apply for the rebate through the MOR-EV website. Upon receiving the rebate, the customer is not entitled to a refund of taxes originally paid on the rebate amount. A manufacturer’s or any other rebate that is applied after the transaction is completed would be handled the same way. t If you have questions regarding this or any other issue, please contact Robert O’Koniewski, MSADA Executive Vice President, at rokoniewski@msada.org, or Peter Brennan, MSADA Staff Attorney, at pbrennan@msada.org, or by phone at (617) 451-1051.

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ACCOUNTING

MSADA

Questions for the New Selling Season Mark Dow

O’Connor & Drew Mark Dow, CPA, MST is a principal at O’Connor & Drew and can be reached at mdow@ocd. com or (617) 471-1120.

There is much buzz regarding the new federal tax law. What is the bottom-line impact on my business? What impact will it have on my customers?

Here are the facts: The new law will lessen the tax burden for almost all taxpayers. Larger companies that are organized as “C” corporations will see their federal tax rate drop from 35% to 21%. Meanwhile, “flow-through”

eral tax bracket has been reduced from 39.6% to 37.0%. State income tax deductions have been eliminated, and deductions from property taxes have been capped at $10,000.

The average taxpayer will see a modest decrease in their personal tax burden. The slight tax break will not put him or her in a different financial position, but, combined with a strong economy, it may give the taxpayer the mindset to invest in a new vehicle.

The industry has had one great sales year after another. What steps should be taken to plan for flat or slowing vehicle sales rates?

F&I This has been a growing department for several straight years. More than ever, customers have a desire to purchase the peace of mind that comes from various mainte-

Now is the time to be sure that vehicle inventory management controls are in place. businesses (S corps, Partnerships, LLC’s), whose owners are involved in a trade or business, will generally be allowed a 20% deduction from their taxable income.

There are several hurdles and limitations to realizing the full 20% deduction. Most businesses will enjoy accelerated depreciation on equipment expenditures through enhanced Section 179 and bonus deductions. Special rules for those utilizing floorplan financing, such as auto dealers, will place limitations on the use of bonus depreciation.

On the personal side, the highest fedMAY 2018

nance and protection plans. Be sure you have the right personnel in this crucial area at your dealership.

Advertising The efficient use of digital advertising and maximizing opportunities and leads through the internet is critical. Be sure that you support this department on par with your sales departments.

Expenses Review the trend over the last several years, and measure the value you receive for

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line-items that have increased. Now is the time to be sure that vehicle inventory management controls are in place. Floorplan interest is an expense that ultra-low interest rates have previously muted. Now, those days seem to be in the rearview mirror.

Finally, ask yourself, “What was the 2011-2013 game-plan that worked so well when sales were 15-20% below current levels?”

It seems that the complicated manufacturer incentives, expanded after-sale options, loaner vehicle programs, human resource management, and other issues make it difficult to ensure that we are properly accounting for everything. How do you know that dollars are not slipping through the cracks?

Internal Controls Review the top ten list for proper coverage: 1. Maintain standard operating procedures in operations and accounting; 2. Ensure segregation of duties over cash receipts process; 3. Review of cash disbursements by management; 4. Test for warranty and rebate compliance; 5. Perform periodic physical inventories on vehicles and parts; 6. Document pay plans and check for wage/hour/O.T. compliance; 7. Require approval for all significant adjustments and write-offs; 8. Enforce standardized valuation of used vehicles and loaners; 9. Inquire and inspect account and schedule reconciliations; and 10. Review service and labor rates and un derstand all open repair orders.

Timely month-end closing of the financial statement and a careful review of both the balance sheet and income statement are also important to managing dealership finances.

Asking pointed questions on the financial results will provide invaluable insight into the overall state of your operation. t

Sound Off

MSADA

The Importance of Natural Gas

By Claude Peyrot Sprague Operating Resources

There is no doubt that environmental issues are front and center on the policymaking stage in the energy industry today. Federal regulators are grappling with regulatory changes to incorporate distributed energy resources, such as solar and storage systems, energy efficiency, and demandside management measures, that can be used to reduce electricity demand on the grid particularly at peak times.

Many state regulators are undertaking efforts to expand standards that will increase the amount of electric generation that is required to be sourced from renewable energy, and other efforts are underway to reduce greenhouse gas emissions. Policymaking efforts will continue to move us in a direction of a cleaner environment, and natural gas will play a role in that quest as it is a cleaner burning fuel than coal and petroleum products.

Industrial consumers are the largest customer group in the consumption of natural gas that is used for production, heat, and power. This usage is followed closely by the electric generation sector that uses natural gas to produce electricity.

Other uses of natural gas include residential heating and commercial transportation. Electric generation has seen the greatest transformation in recent years, as natural gas now fuels a dominant share of the electric generation mix throughout the Northeast. This is the case in all three wholesale electricity regions in the northeast US: ISO-New England, New York ISO, and the PJM Interconnection.

The Data Based on data from ISO-New England, natural gas’ share of the electric generation mix has gone from 15 percent in the year 2000 to 48 percent in 2017. In New York, natural gas and dual-fuel facilities (units that can operate on natural gas or other fuel) were 47 percent of the electric generation mix in 2000, and that share has grown to 57 percent of the capacity today. The PJM (Pennsylvania-Jersey-Maryland) region, comprised of 13 states and DC and as far west as Ohio, has witnessed a shift in natural gas fired electric generation, going from roughly 6 percent in 2005 to 26 percent just over a decade later.

Based on information available from the US Energy Information Administration (EIA), natural gas production will increase over the next 30 years under a number of

different assumptions and scenarios about the future. A base case suggests that natural gas production will increase by roughly 60 percent, going from 73.6 billion cubic feet/ day (Bcf/d) in 2017 to 118 Bcf/d in 2050, with most of the projected growth coming from the northeast region of the US. Natural gas consumption is driven largely by two sectors – industrial use and electric power generation.

The industrial sector consumes more natural gas than any other group, and that consumption is expected to grow by approximately 40 percent, going from 26 Bcf/d to 36 Bcf/d. In the EIA’s base case scenario, natural gas remains as the leading fuel source for electricity generation in the US through 2050; 35 percent of electricity generation is projected to be natural gas fired by 2050, and this is an increase of almost 1/3 of that in place today.

A Major Shift With pending electric generation unit retirements today and in the not-too-distant future, the northeast region is faced with replacing those electric generation sources. ISO-New England has stated that natural gas-fired generation will be critical for years to come. It is the primary fuel for 45 percent of generating capacity, and it is well over half the capacity when including dual-fuel generation units. In addition, 31 percent of the proposed new generating capacity in New England is natural gas fired, and these units provide fast and flexible generation necessary to balance the increasing amounts of intermittent renewable energy resources.

While New York continues to move towards more renewable sources in its electric generation mix, current proposed electric generation capacity additions in the region are 35 percent natural gas; if this includes dual–fuel capable units, that share is 53 percent.

A major shift continues in the PJM Interconnection region, as over 60 percent of the electric generation capacity additions expected through 2024 are natural-gas fueled units.

Many factors can affect energy markets, including weather-related events and operational factors affecting energy generation and delivery. These events can arise quickly and result in significant market changes that can impact your energy costs. t Contact Claude Peyrot at (855) 466-2842 or visit www. spragueenergy.com for more information.

Have an opinion you want to share? Email rokoniewski@msada.org. www.msada.org

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AUTO OUTLOOK

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AUTO OUTLOOK

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COVER STORY

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Karyn Polito Lieutenant Governor of Massachusetts

In her first appearance at an MSADA Annual Meeting, Lt. Gov. Karyn Polito stressed the need for government to get out of the way.

“You are all business owners -- you have to work really hard to be successful at what you do,” she said. “Being in a state with a leadership team that knows what it means to create certainty around the business environment is important. Part of what makes us successful as an administration is we focus on the work.”

The work for the Baker administration began by looking at rules and regulations to “see if there is “Thank you for an opportunity to sunset them. On investing, thank a whole host of other issues, we you for growing, work to make sure government works for you and your employthank you for ees.” providing for our Polito also highlighted their quality of life.” continued efforts at increasing –Karyn Polito training for automotive techs, citLt. Governor of Massachusetts ing increased funding for MassBay and the Benjamin Franklin Institute of Technology. These initiatives, she said, will help grow Massachusetts’s economy.

“What you do is integral to that mission,” Polito added. “We have over 400 dealerships in this state, more than the number of cities and towns.

You represent an industry that brings thousands of jobs to the state from the Berkshires to the islands. That is one of the reasons I am here today, to say ‘thank you.’ Thank you for investing, thank you for growing, thank you for providing for our quality of life.”

As the Baker administration continues to be among the most popular in the country, she said they continue to seek new opportunities to improve.

“We need to have dialogue. When you can articulate a problem and, more importantly, a solution, we need to hear that.”

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Massachusetts Auto Dealer www.msada.org

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Annual More than 200 members converged at the Mandarin Oriental Hotel in Boston this month for the MSADA’s 78th Annual Meeting, hearing from politicians, industry experts, and fellow members about the path ahead.

Opening the event, MSADA President Chris

Chris Connolly MSADA President

MSADA President Chris Connolly noted that, while the new presidential administration has brought a more business friendly environment to Capitol Hill, Massachusetts continues to be among the bluest states in the country. Much remains to be done to secure a stable ecosystem for businesses.

“Here at home, your Association has been hard at work to make sure things are better for all of us, every day,” Connolly said.

Circling back to Rep. Walsh, who was from Connolly’s district in Framingham, Connolly stressed the need for members to reach out to their legislators to make sure they hear their positions on the issues of the day. The Association’s annual Dealer Day on Beacon Hill is a key opportunity.

“Friendship and trust is built over time, so I urge all of you to come,” he said. “If you do not know your representatives, meet them. If you know them, show up and explain what’s important to you and your business.”

MSADA MSADA

A8D A 1

Meeting Connolly offered a moment of silence for State Rep. Chris Walsh, “a friend to us dealers and a friend of mine.” The need to build strong relationships between legislators and dealers came up throughout the day as a way to strengthen both the business community and the Commonwealth.

Brian Finkelmeyer Cox Automotive

Responsible for managing Cox Automotive’s new vehicle inventory and pricing solutions, Brian Finkelmeyer offered a sobering analysis of the state of new car sales.

“Average net profit for cars this year is negative $866 a car,” Finkelmeyer noted. “In many respects, the new car business has become a loss leader.”

Finkelmeyer added that, with the increase in Internet business, knowing what is coming to the lot is more important than ever.

“We should try to let our inventory speak to us about where we need to do our discounting,” he concluded. “Dealers with data driven inventories are going to drive in more customers. If you do not have the right car, if you do not have the right price, you are not going to see the customer.”

Beth Lindstrom U.S. Senate candidate

In challenging a senator with a national profile in the next election, longtime Massachusetts Republican campaign leader Beth Lindstrom says it is time to put the People’s Seat back in the Commonwealth’s control.

“The reason I am running is, we need someone looking out for Massachusetts and not looking for the next rung on the political ladder,” Lindstrom said. “Elizabeth Warren is running for president, and I do believe she will leave Massachusetts behind.”

The former Bill Weld, Mitt Romney, and Scott Brown operative says she is well prepared to meet the needs of Massachusetts residents.

“I have a different perspective,” Lindstrom said. “I believe people create jobs, and I believe in less government. I am not a rock thrower, I am a bridge builder.” www.msada.org

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2018 RACEMSADA TO THEANNUAL FINISH MEETING Scott Dube NADA Director

In his first appearance as NADA Director, former MSADA President Scott Dube noted how high his predecessor, Don Sudbay, set the bar.

Keeping up with the machinations of DC politics is more than a full-time job.

NADA recently saw a case all the way to the U.S. Supreme Court relating to overtime pay for service writers. “Through NADA’s efforts, the Supreme Court has said they are exempt; this was a case that could have been devastating.”

LIFO also remains in danger within Congress, and autonomous vehicles are also being considered. “Congress is considering different bills on AVs, and, of course, we are going to be on top of it. There is a lot of money being pumped in from a bunch of different places.”

Dube also encouraged members to join him in September for the NADA Washington Conference. Getting time with our Capitol Hill representatives is crucial. “They do not always understand our communities or our businesses, but our legislators always know where we stand.”

Guido Vildozo IHS Markit

Addressing trends within the larger economy, IHS Markit’s Guido Vildozo offered his predictions for the coming years in the industry.

“With regards to the economic outlook, we are essentially boosting an economy that does not need to be boosted,” Vildozo began. “Growth will be accelerated. Will it be accelerated to 4 percent as promised? Probably not.”

“You guys have been facing inflation for quite some time,” he added.

“Your guys have become more expensive.

The employment rate is at a saturation point. If you inject money into the economy, you’re going to have inflation picking up.”

But he cautioned that no one should panic.

“Can we say we’re heading to a recession?

Not likely, but we are going to move into a sluggish stage coming in 2020, around the tail end of this administration.”

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Massachusetts Auto Dealer www.msada.org

Jeff Fritz

Fisher Phillips attorney

Employment law attorney Jeff Fritz of Fisher Phillips offered an outline of recent employment law changes and challenges for the auto retail industry in the Commonwealth.

“We have seen an uptick in 100 percent commission employees in Massachusetts pursuing legal action,” he noted. “The plaintiffs bar is trying to take advantage and suggest that 100 percent commission employees are entitled to additional payroll.”

Fritz also cautioned that the wage gap will become increasingly dangerous legal ground.

“Statistics show women still earn only 85 percent of what their male counterparts earn,” he said. “What we have now is comparable pay, different from equal pay, which is a much broader standard.

It gives plaintiffs’ attorneys a much broader target to go after. And intent does not matter. If they look under the hood and there is a disparity, you are going to be on the hook.”

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Government Affairs Update Robert O’Koniewski, MSADA Executive Vice President Peter Brennan, MSADA Staff Attorney

Shawn Allen

Clark Lavey Benefits Solutions

As one of the benefits of MSADA membership, dealers are able to access services such as Clark Lavey Benefits Solutions that enable better options for healthcare coverage for employees.

“The insurance companies are making a lot of money off you folks,” Clark Lavey’s Shawn Allen explained. “What happens is, the health insurance carriers are going to make money regardless of the year you have.”

But there is power in numbers, Allen noted.

“Instead of having 20 dealerships with 100 employees each, we can say we’re 200 dealers with thousands of employees. We are aggregating your purchasing power.”

MSADA Executive Vice President Robert O’Koniewski offered a frank assessment of the Commonwealth’s legislative priorities. Mostly, he said, it gets in its own way.

“We have guys continuously coming up with new ideas, and new things to do,” O’Koniewski said. “Three hundred or so bills that were filed for this year’s session really have an impact on dealerships.”

O’Koniewski highlighted several issues MSADA is currently pursuing, including vehicle inspection licensing for new dealerships, temporary tags, and reform of the used vehicle book requirement, all of which often ends up bogged down by procedural inertia.

To defeat that inertia, dealers have to be invested in the process.

“Grassroots is very important,” O’Koniewski added. “Whether it is a regulation or a new law that they pass, they really do not understand the consequences of what they are doing. If there are issues that come up, it is important that you have that relationship to talk to your legislators and get a problem resolved.”

Additionally, MSADA Staff Attorney Peter Brennan gave an assessment of the current electric vehicle rebate incentive program.

He noted that more than $12 million has been distributed so far.

“Has that moved the needle? Not really,” Brennan noted. “Electric vehicles are still less than 1 percent of the market.”

The effects of the current battle between the Trump Administration, its EPA, and California have not yet become clear: “A lot remains to be seen, especially whether states like California and Massachusetts have their own standards on vehicle emissions and fuel economy or there will be one national standard.”

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2018 RACEMSADA TO THEANNUAL FINISH MEETING

Thank You To Our Annual Meeting Sponsors ACV Auctions Silver Sponsor Auto/Mate Dealership Systems Bronze Sponsor Blum Shapiro Bronze Sponsor Burns & Levinson Luncheon Sponsor Cox Automotive Gold Sponsor Downey & Company Break Station Sponsor EasyCare of New England Friend of the Association Sponsor GW Marketing Services Friend of the Association Sponsor Key Bank Bronze Sponsor Murtha Cullina Cocktail Reception Sponsor Northeast Dealer Services Bronze Sponsor O’Connor & Drew Silver Sponsor SunPower Bronze Sponsor SunTrust Bronze Sponsor TrueCar Platinum Sponsor Zurich Bronze Sponsor

MAY 2018

Massachusetts Auto Dealer www.msada.org

NEWS from the NEWS from Around Around the Horn Horn from Around

NEWS the Horn

MSADA

CHICOPEE

Mercedes-Benz of Springfield Hosts Kentucky Derby Fundraiser Square One Day Care benefited from a Kentucky Derby Party held at Mercedes-Benz of Springfield this month, which coincided with the running of the 144th Kentucky Derby.

The fundraiser consisted of a party featuring women wearing their biggest hats and a best derby attire contest.

Included in the event were plenty of hearty hors d’oeuvres, a complimentary mint julep cocktail, and a big-screen television to watch the race.

Square One, originally the Springfield Day Nursery, opened in 1883 to assist women who were in the workforce.

Today the organization continues to carry on its tradition of providing children with a safe and nurturing environment.

[L to R Mercedes-Benz of Springfield staff Christine Dingler, Square One President and CEO Joan Kagan, Peter and Michelle Wirth of MercedesBenz of Springfield, and Kris Allard from Square One at the 3rd Annual Square One Derby Party taking place at Mercedes-Benz of Springfield.

(Ed Cohen Photo)]

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NEWS from Around the Horn FRAMINGHAM

Officials Question Herb Connolly Auto Group over Lemon Law Stickers City officials summoned — then quickly dismissed — a representative of the Herb Connolly Auto Group from a meeting in May to discuss the company’s compliance with a state consumer protection law.

A state audit found that two Herb Connolly dealerships in Framingham were missing Lemon Law stickers on some of the vehicles on their lots.

The small, yellow stickers outline a buyer’s rights if they discover defects with a vehicle that can’t be repaired. Dealerships are required to display the stickers on both new and used cars, providing a succinct explanation of the remedies available to consumers under the law.

Officials from the Massachusetts Office of Consumer Affairs and Business Regulation recently notified the Framingham Board of License Commissioners that two dealerships — Herb Connolly Hyundai, located at 520 Worcester Road, and Herb Connolly Chevrolet, at 350 Worcester Road — were missing stickers from a portion of their inventory.

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The five-member board scheduled a public discussion Monday about the state’s findings, but quickly dismissed the issue, finding the company’s process for preparing vehicles for sale is sound.

“I can guarantee you right now if it’s available for sale, it has a sticker on it,” said Chris Connolly, one of the owners of Herb Connolly Auto Group.

During a discussion that lasted less than 10 minutes, Connolly also criticized the state’s process for auditing dealerships, saying it relies on thin documentation to support its findings.

During their most recent statewide audit last fall, inspectors from the Office of Consumer Affairs and Business Regulation visited 118 dealerships in 32 cities and towns. Only about one third were found to be 100 percent compliant with the law, meaning all of the vehicles on their lots had a Lemon Law sticker. About one third failed with zero percent compliance; the remainder had stickers on some, but not all, cars.

For dealerships that failed or were missing stickers on some of their inventory, the state contacted the licensing authorities in their locations to request “increased vigilance” in checking for Lemon Law stickers, according to information released by the state last year.

Connolly, who also serves as president of the Massachusetts State Automobile Dealers Association, said the compliance let-

MSADA ters are routinely sent to dealerships around the state.

“I will say that I have never heard of a dealer being brought before their municipality ever before regarding this audit because the audit is flawed,” he said. “The audit is simply they send auditors out, who are usually interns, after hours when we’re not open, looking for the stickers.”

Describing other potential concerns, Connolly suggested that auditors might not be able to discern between sale inventory and other vehicles on the lot, such as employee cars, vehicles being serviced, and new cars that were recently dropped off, but not yet ready for sale.

After following up with a state program coordinator, Connolly said he was told the state doesn’t keep photographs or other documents indicating which vehicles were missing stickers, nor does it record the date and time of the audit.

Connolly said all new vehicles for sale at Herb Connolly lots are tagged with a Lemon Law sticker as part of the “pre-delivery inspection process.” Used cars also receive stickers after undergoing a safety check, reconditioning, and detailing, he said.

After a brief discussion, Board Chairman Adam Barnosky said he was satisfied with the procedures in place at the two dealerships, adding that the board scheduled the discussion to fulfill its duty to ensure licensees comply with state law and regulations.

LEXINGTON

Michelle Ciccolo Kicks-Off State Rep. Campaign Michelle Ciccolo, Lexington Board of Selectmen member and daughter of Village Automotive Group owner Ray Ciccolo, launched her campaign for State Representative (15th Middlesex District) in May at an event at the Lexington Depot that drew elected officials, town luminaries, and other supporters.

“Nothing gives me greater satisfaction than helping people solve problems,” Ciccolo said in a statement. “At a time when our nation is politically fractured, I believe government, when done right, can be a shining example and can truly make a difference in people’s lives.”

Ciccolo will be campaigning up to the Democratic primary, held September 4.

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NEWS from Around the Horn HOLLISTON

Herb Chambers Opens Collision Center An 80,000 square foot collision center opened on October Hill Road in May. “It is a proud day for our company, and we are thrilled to open this new center in Holliston,” Herb Chambers said in a press release. “The technologies and environmental controls provide a safe working environment for our valued workers and allow us to provide the best service to our clients. The Holliston location is perfectly situated to maximize our ability to serve our customers throughout the region, and the town support has been wonderful.

This is a tremendous moment for all the right reasons.”

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MSADA

The new state-of-the-art center sits on 7.5 acres and will create about 20 new jobs. Once at full capacity, it will employ 75 to 80 people.

WESTWOOD

Prime Mercedes-Benz Dealership Recognized Prime Motor Group announced that four of its dealerships earned the certification as a “Women-Drivers Certified Trusted Dealer,” including Mercedes-Benz of Westwood.

The certification is awarded to dealerships that provide a consistently high standard of trusted, comfortable, and fair customer service to women and their families, as reflected in dealer reviews and ratings by female customers.

The Women-Drivers car dealer rating platform encourages women to rate and review dealerships in several categories relating to their experiences shopping, purchasing, and using the service drive. Certified Trusted Dealers must reach a qualifying number of reviews at an optimum score. t

MSADA

Legal MSADA

By Joseph W. Ambash and Jeffrey A. Fritz

Massachusetts Pay Equity Law Goes Into Effect July 1 The Massachusetts Pay Equity law, entitled An Act to Establish Pay Equity, goes into effect on July 1. In early March, the Attorney General issued formal guidance, which unfortunately raises about as many questions as it answers. Nonetheless, all Massachusetts employers need to be familiar with this new law, and it would behoove any Massachusetts employer, including your dealership, to review its pay practices to minimize the risk of a claim.

Pay equity is almost certainly the next new frontier in employment law, and we expect this new law to proliferate significant and very costly litigation for employers across the Commonwealth.

Employers Cannot Ask for Salary History Information As of July 1, it will be illegal in Massachusetts for an employer to ask prospective employees about their salary histories. The rationale behind this salary history ban is fairly obvious. Because women generally earn 80 cents on the dollar as compared to men, an employer privy to a woman’s disparate wage history is more likely to perpetuate this wage disparity by factoring that history into the decision as to how much to offer in the new job.

Accordingly, all Massachusetts employers, including your dealership, need to review their applications and remove any questions about salary history. And all hiring managers must be instructed to refrain from asking for such information during the interview and application process.

Employers Cannot Discipline Employees for Discussing Wages The Act also prohibits “pay secrecy” policies or practices. In other words, a Massachusetts employer may not prohibit its employees from asking about, discussing, or disclosing information about his or her own wages, or even about another employee’s wages. An employer who disciplines an employee for engaging in such communications may be found liable for retaliation.

Equal Pay for Comparable Work Whereas prior pay equity laws talk in terms of equal pay for equal work, the Massachusetts law broadens this concept to require equal pay for comparable work. What does that mean? To be honest, no one really knows at this point. The law defines “comparable” work as such work that is “substantially similar in that it requires substantially similar skill, effort and responsibility and is performed under similar working conditions.” What that means in effect remains to be seen and, unfortunately, is likely to be fleshed out through (costly) litigation.

The Attorney General’s guidance provides some illustrations, but those illustrations do not bode well for predictability (and if they do, it is likely not good news for employers). For example, the guidance suggests that, because janitorial and food service jobs generally do not require previous experience in the field or specialized training, the positions may be of “comparable” skills, even though the jobs themselves are completely different. What does that say about how, in these analyses, your salespeople might be compared to your service advisors, or how your service advisors might be compared to your finance managers, and so on?

Narrower Allowance for Pay Variations To be sure, the new law permits differences in pay based on certain defined factors: (1) a seniority system (provided female employees still accrue seniority when on maternity leave); (2) a merit system; (3) a system that measures earnings by quantity or quality of production, sales, or revenue; (4) geographic location; (5) education, training, or experience (to the extent such factors are reasonably related to the job the employee is performing); and (6) travel (if part of the job). Unlike other pay equity laws, however, the Massachusetts law does not have a catch-all provision allowing for variation based on any factor other than sex. So, for example, www.msada.org

you can no longer justify a pay disparity based on changes in the labor market, or because you really wanted to hire a certain individual for reasons not set above and would needed to pay more to get him to join your organization.

Encourages Self-Evaluations On a good note, the new law provides that an employer who engages in a good faith self-evaluation of its pay practices, and can demonstrate reasonable progress has been made towards eliminating any gender-based pay differentials for comparable work, may use that evaluation as a defense to liability. That said, the defense would be viable only for three years after the evaluation’s completion, which means that, to reap its benefit perpetually, an employer must complete such an evaluation every three years. You should strongly consider engaging counsel to assist in such evaluations to increase the chance the attorney-client privilege protects them from disclosure in other contexts.

This is by no means an exhaustive review of this new, comprehensive law.

It is likely to be a game changer here in the Commonwealth. If you have not discussed the steps you intend to take to minimize risk on this issue with a competent HR professional or employment lawyer, you should really think about doing so. t

Joe Ambash is the Managing Partner and Jeff Fritz is a partner at Fisher Phillips, LLP, a national labor and employment firm representing hundreds of dealerships in Massachusetts and nationally. They can be reached at (617) 722-0044.

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Patrick Manzi

NADA Senior Economist

Boyi Xu

Economist

MAY 2018

Massachusetts Auto Dealer www.msada.org

MSADA

NADA MARKET BEAT

JANUARY 2016

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TRUCK CORNER

MSADA MSADA

ATD Membership Offers Many Benefits

By Jodie Teuton Chairwoman, American Truck Dealers ATD Chairwoman Jodie Teuton is vice president of Kenworth of Louisiana and Southland Truck Leasing in Gray, Louisiana.

Being part of a national association like the American Truck Dealers means that you have support when you need it—365 days a year—and you have that support for all facets of your business. As an ATD member, I urge you to take advantage of your membership every day.

As we have emphasized time and time again, ATD protects your interests on the front lines on Capitol Hill. And that is perhaps the greatest advantage of being in the ATD family. Your issues are represented on a national scale, and ATD makes sure that you have a seat at the table with members of Congress during critical moments in the legislative process. Whether we are fighting to repeal the federal excise tax or staying on top of tax reform changes, ATD is ever-present for you.

So we encourage all members to stay informed on the latest events in Washington, D.C. Continue reading and subscribing to ATD Insider and Truck Beat so you have a good view of our commercial truck dealership landscape.

This is a great year to become familiar with the ATD Academy and its Plus program if you have not yet. Our Academy is world-class and designed for current and future operators of truck dealerships. We offer year-long courses that include six intensive, week-long instructor-led classes that improve dealership management. The curriculum includes classes on financial management, parts, services, pre-owned vehicles, and business leadership. The Academy is the gold standard of management training for truck dealerships. There is simply no other program in its class, and it is available only to ATD and NADA members.

“Our mission and

goals are built around

your interests, so I

encourage you to reach out to us through

the year and share your dealership’s

challenges.”

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Massachusetts Auto Dealer www.msada.org

Every ATD member dealership has access to complimentary online education and training at ATD/NADA Online. All of ATD’s online webinars are presented by industry-leading subject matter experts and focus on solutions for today’s technologically advanced and rapidly evolving world. In fact, the recent ATD Show in Las Vegas provided a valuable new benefit for all ATD members: access to all of the workshop recordings anytime, from anywhere. Log on to the training catalog to review specific sessions from the show, download handouts, and review the latest and greatest trends in the business.

Finally, do not forget that ATD depends on your feedback and communication. Our mission and goals are built around your interests, so I encourage you to reach out to us through the year and share your dealership’s challenges. In that regard, I invite you to participate in our 2018 Dealer Attitude Survey of Manufacturers. Your input is critical, and the greater response rate we receive, the more weight the survey carries. ATD line representatives and staff use your survey responses in meetings with OEMs so that they can review and discuss your issues and concerns.

This is an important way we establish good lines of communication with our manufacturers. Dealerships have until June 4, 2018, to complete the online survey. If you have any questions regarding the survey, email atd@nada.org.

Additionally, on June 20-21, we will host our fourth annual Dealer Fly-In, when we will convene to meet with our federal legislators in D.C. These events grow in size each year, and you will not want to miss out on this great opportunity to represent your interests at the highest levels. I encourage you to join me.

ATD is strong thanks to its members. Our association can never replace your engagement, your feedback, your phone calls, and your face-to-face meetings with us and industry stakeholders. Let us keep it up together! t

NADA Update

By Scott Dube

Taking Action on Auto Loans S co tt D u be , P re s id en t o f B ill D ube H yundai and I mmediate Past President of MSADA, represents MSADA members on the NADA Board of Directors.

I want to thank those of you who took the time this month to attend both the MSADA Annual Meeting and our Dealer Day on Beacon Hill. These are two crucial events in our community that bring us and our elected officials up to speed. Our Executive Vice President, Robert O’Koniewski, and his staff always put on a fantastic meeting and put in many hours coordinating our Dealer Day. They’ve earned a pat on the back for their continued efforts.

As I mentioned earlier this month at our annual meeting, I encourage you to consider making the trip to our nation’s capital in September for the NADA Washington Conference. I will be offering more details in the coming months.

In the meantime, please reach out if you have any questions about what the event will entail.

Congress, President Act to Protect Auto Loan Discounts for Consumers President Donald Trump recently signed into Law S.J. Res. 57 – a law passed by the U.S. House and Senate to reject a Washington bureaucracy’s rule which could have eliminated the ability of car dealerships to discount loans for their customers.

“This is a great day for consumers, as Congress and the President have helped to preserve their ability to receive auto loan discounts from local dealerships” said NADA President and CEO Peter Welch. “NADA congratulates the U.S. House and Senate for their focus and perseverance on this issue, and the President for signing the new law to protect consumers.”

NADA supported this bipartisan effort that began years ago, after the Consumer Financial Protection Bureau (CFPB) issued “guidance” to auto lenders in 2013. Based on a flawed approach and without any opportunity for public comment, the CFPB threatened to make it impossible for local dealerships to discount loans for their customers.

House Financial Services Committee chairman Jeb Hensarling (R-Texas) issued a number of reports detailing the agency’s actions.

Nearly 50,000 new cars and trucks are sold every day,

and more than 85% are financed – with the large majority financed at the dealership. Dealerships often discount a rate for a customer – for example, to meet or beat a competing loan offer or meet a customer’s monthly budget constraint.

The CFPB’s guidance could have ended these discounts by pressuring auto lenders to eliminate discountable loans, and that approach would have increased the cost of auto credit for consumers everywhere.

Fortunately, the new law, sponsored by U.S. Sen. Jerry Moran (R-Kansas), U.S. Rep. Lee Zeldin (R-New York), and prompted by U.S. Sen. Pat Toomey (R-Pennsylvania), disapproved the CFPB’s guidance, helping to preserve loan discounts for consumers who need affordable cars and trucks.

NADA Launches New Training Program NADA has launched a new training program exclusively for dealership managers.

The new NADA Professional Series provides training to new or high-potential department managers working in sales, office, parts, and service. It’s designed to fit the busy automotive retail lifestyle of dealership managers with convenient classes offered at three locations across the country.

“NADA is the only organization in the country that offers a full training program to give dealership managers the tools they need to run profitable departments,” said Peter Fong, NADA senior vice president of dealership operations.

“And very few, if any, in the industry, offer training for office managers.”

Each NADA Professional Series is comprised of four instructional modules: ● Core Competencies (Learn the Job): two-day classroom, instructor-led and interactive/online courses; ● Leadership Foundations (Learn to Lead): two-day classroom, instructor-led and interactive/online courses; ● Human Resources Foundations (Learn to Build a Team): self-paced online courses; and ● DMS Applications (Find Data to Succeed): self-paced online courses.

The courses require an employee to be away from the dealership twice for a total of four days, and participants can complete the program in as few as three months.

Classes, which begin in June 2018, are now available on a “first-to-register” basis across three different locations: Tysons Corner, Virginia; Cerritos, California; and Dallas, Texas.

For more information, contact Camron Wilson with NADA Dealership Operations at cawilson@nada.org or (703) 821-7210. www.msada.org

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NADA Update Winners Announced in ‘Manage Your Roster’ Contest Four lucky NADA members were chosen as contest winners in the recent “Manage Your Roster” Contest, kicked off at the NADA 2018 Show. Participants were automatically entered into the contest just by logging into the NADA website between March 21 and April 30 and updating their dealership profile information.

The grand prize winner and recipient of a Google Home was Bob Carinci of Curry Automotive Group, Scarsdale, New York. Three Amazon Echo Dots were also awarded to Shannon Flynn of Columbiana Buick Cadillac Chevrolet, Columbiana, Ohio; Frank H. Smith of Doug Smith Autoplex, American Fork, Utah; and Diana Horton of Don Ringler Chevrolet Toyota, Temple, Texas.

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Massachusetts Auto Dealer www.msada.org

MSADA By including all your employees and their contact information, your entire dealership will have access to the valuable benefits of NADA Membership, including: ● Workshops from the NADA Show and ATD Show available online; ● Interactive Online Content, such as courses from 20 Group consultants and Academy instructors; ● Webinar series recordings; ● HR Dealership Fundamentals; and ● Continued advocacy on Capitol Hill and with OEMs. You can update your profile online by visiting nada.org/ myprofile. Just enter your email address and password and click the Manage Roster button. For questions or additional information, visit the NADA Membership website, contact us at nada.org/contactmembership, or call 800-557-6232.

MSADA

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