MSADA, One McKinley Square, Sixth Floor, Boston, MA 02109
auto M a s s a c h u s e t t s
D
E
A
L
E
R
FIRST CLASS MAIL US POSTAGE PAID BOSTON, MA PERMIT NO. 216
January 2020 • Vol. 32 No. 1
The official publication of the Massachusetts State Automobile Dealers Association, Inc
RE V ING V into the ’20s!
Ma s s a c h u s e t t s
auto D
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 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: jfabrizio@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 Blum Shapiro, 29 EasyCare New England, 2 Leader Auto Resources, 39 O’Connor & Drew, 40 Southern Auto Auction, 28 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
E
A
L
E
R
The official publication of the Massachusetts State Automobile Dealers Association, Inc
Table of Contents
4 5 6 10 11 12
From the President: Kicking Things Off Right ASSOCIATE MEMBERS DIRECTORY THE ROUNDUP: Off to a Running Start in 2020 LEGISLATIVE SCORECARD TROUBLESHOOTING: New Year, New Scam AUTO OUTLOOK
Cover Story: 16 Dealer Summit: Revving Into the ‘20s 20 CHARITY CASINO NIGHT GALA 22 NEW ENGLAND INTERNATIONAL AUTO SHOW 26 AUTO TECH COMPETITION 27 MSADA THANK YOU 28 NEWS From Around the Horn 30 IN MEMORIAM: William H. York 31 TEHNOLOGY: Don’t Get Phished 32 BUSINESS: Planning for Success in 2020 33 LEGAL: Discrimination, Harassment, and Retaliation Refresher 34 nada Market Beat 36 TRUCK CORNER: The Year in Review 37 nada update: Show Season Approaches Join us on Twitter at @MassAutoDealers www.msada.org
Massachusetts Auto Dealer
JANUARY 2020
4
From the President
MSADA
Kicking Things Off Right By Chris Connolly, MSADA President With 2020 now up and running, we at your Association have completed another successful New England International Auto Show. We are proud to present the best our industry has to offer -- you -- to an eager public in one place. I want to thank the MSADA staff for their hard work as they put the Dealer Summit and Charity Gala together. The quality bar is raised every year, and it is our staff’s continued dedication that makes this mega event possible. I would also like to take a moment to thank our Gala sponsors. Each of them understands our commitment to helping the next generation of automotive technicians and their support helps us further that goal. We could not do the event without them, and it is a privilege and a pleasure that so many have worked with us for more than a decade. A full list of sponsors is available on page 27. If you are a vendor in our industry and do not see your name there, I encourage you to reach out to us and get involved by contacting Executive Vice President Robert O’Koniewski (rokoniewski@msada.org). “This is the year More about the tech competition that took place at to make that the show is also available in his column. As an Associcall to your ation, we look forward to rooting on our winning team representative in April in New York City at the national competition. MSADA is here to make sure that while you are makif you have ing your best move, you do not have to keep your eyes never done so.” on every piece of legislation locally, on Beacon Hill or down in Washington. I encourage you to check in when you can, to do your part to keep our grass roots strong. If you have never called your elected officials and invited them to your dealership, 2020 is the year. With the NADA Show 2020 coming up quickly, this is also a good time to thank our own TIME Dealer of the Year Nominee Ray Ciccolo. Ray, among many, many accomplishments in his business, ably served us as NADA Director through a critical time in our country’s history, helping Massachusetts auto dealers maintain a meaningful presence on Capitol Hill. When he gets back from being celebrated in Las Vegas, please let him know if you have any questions about lobbying our representatives. I hope you will join me in offering our thanks for Ray’s continued efforts. You will read more about him in these pages next month. In addition to the upcoming NADA action in Las Vegas (see the NADA Update for more details), please keep April 1 open in your calendar for our MSADA Dealer Day on Beacon Hill. We have some very important legislative issues this year, and we need your help earlier than in years past to help our cause. Look for more details on that event in the coming months. t JANUARY 2020
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 Chrysler Dodge Ram Jeep 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 America’s Auto Auction Boston Jim Lamb (781) 596-8500 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 Bernstein Shur PA Ned Sackman (603) 623-8700 Blum Shapiro John D. Spatcher (860) 561-4000 BMO Harris Bank Steve Gagnon (813) 447-1723 Boston Magazine Noreen Murray (617) 275-2012 Broadway Equipment Company Fred Bauer (860) 798-5869 Burns & Levinson LLP Paul Marshall Harris (617) 345-3854 Capital Automotive Real Estate Services Daniel Garces (703) 394-1313 CDK Global Chris Wong (847) 407-3187 Coastal Outsourced Solutions Andrea Vieira (508) 979-4733 Construction Management & Builders, Inc. Nicole Mitsakis (781) 246-9400 Cox Automotive Ernest Lattimer (516) 547-2242 CVR John Alviggi (267) 419-3261 Dave Cantin Group Woody Woodward (800) 722-8621 Dealer Creative Jeff Hayes (919) 719-1333 Dealerdocx Brad Bass (978) 766-9000 Downey & Company Paul McGovern (781) 849-3100
DP Sales Distributors Andrew Prussack {631) 842-7549 Eastern Bank David Sawyer (617) 620-3484 Eastern Insurance Group John Berksza (508) 620-3349 EasyCare New England Greg Gomer (617) 967-0303 Enterprise Rent-A-Car Timothy Allard (602) 818-3607 Ethos Group, Inc. Drew Spring (617) 694-9761 F&I Direct Sean Wiita (508) 414-0706 Michelle Salas (508) 599-0081 F & I Resources Jason Bayko (508) 624-4344 Federated Insurance Matt Johnson (606) 923-6350 Fisher Phillips LLP John Donovan (404) 240-4236 Joe Ambash (617) 532-9320 Gatehouse Auto Jay Pelland (508) 626-4334 Gulf State Financial Services Mike Sims (817) 689-1735 GW Marketing Services Gordon Wisbach (857) 404-0226 Hireology Kevin Baumgart (773) 220-6035 Hub International Insurance Brokerage Jim Walsh (603) 494-9016 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 Abe Cohen (503) 902-6567 Leader Auto Resources, Inc. Curt Murray (978) 201-4797 Chuck August (518) 364-8723 M & T Bank John Federici (508) 699-3576 Management Developers, Inc. Dale Boch (617) 312-2100 McWalter Volunteer Benefits Group Shawn Allen (617) 483-0359 Mid-State Insurance Agency James Pietro (508) 791-5566 Mintz Levin Kurt Steinkrauss (617) 542-6000
www.msada.org
Murtha Cullina Thomas Vangel (617) 457-4000 Nancy Phillips Associates, Inc. Nancy Phillips (603) 658-0004 NEAD Insurance Trust Charles Muise (781) 706-6944 Northeast Dealer Services Jim Schaffer (781) 255-6399 O’Connor & Drew, P.C. Kevin Carnes (617) 471-1120 Performance Management Group, Inc. Dale Ducasse (508) 393-1400 Piper Consulting Jim Piper (207) 754-0789 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 Rockland Trust Co. Manny Silva (781) 982-6806 Samet & Company John J. Czyzewski (617) 731-1222 Santander Bank Richard Anderson (401) 432-0749 Chris Peck (508) 314-1283 Schlossberg & Associates, LLC Michael O’Neil, Esq. (781) 848-5028 Service Credit Union Dave Pasternak (603) 812-8967 Shepherd & Goldstein CPA Ron Masiello (508) 757-3311 Southern Auto Auction Joe Derohanian (860) 292-7500 Sprague Energy Robert Savary (603) 430-7254 SunPower Christie McCarthy (408) 457-2357 Kristin Hodges (707) 694-7759 SunTrust Bank Michael Walsh (617) 345-6567 TradeRev Dennis Finkel (508) 397-2702 TrueCar Pat Watson (803) 360-6094 US Bank Vincent Gaglia (716) 649-0581 Wells Fargo Dealer Services Josh Tobin (508) 951-8334 Windwalker Group Herby Duverne (617) 797-9316 Zurich American Insurance Company Steven Megee (774) 210-0092
Massachusetts Auto Dealer
JANUARY 2020
5
6
The Roundup
Off to a Running Start in 2020 By Robert O’Koniewski, Esq. MSADA Executive Vice President rokoniewski@msada.org Follow us on Twitter • @MassAutoDealers
Auto Show – Charity Gala – Dealer Summit On Friday, January 17, your Association and the Massachusetts State Auto Dealers Charitable Foundation held its 23rd Auto Show Charity Gala to celebrate our 63rd edition of the New England International Auto Show at the Boston Convention and Exhibition Center. We feted over 500 guests, including our dealers, sponsors, and other industry representatives, to raise funds for our auto tech scholarship program. Party-goers were entertained by the rockin’ sounds of the Love Dogs. Based on our previous years’ successes and enthusiasm, we again ran a casino party room where attendees could roll the dice and play cards to win great prizes, all for a worthy cause – our tech scholarships. Congratulations to our big winners Troy Potter, Johna Cutlip, Michael Perry, Emily Dube, Max Huguenin, and Heather Sewell. Gala attendees had access to the auto show floor, including five “ride and drive” offerings. This month’s magazine has a full recap of these events. Prior to the evening’s party, we held our seventh annual Dealer Summit where dealers and their key managers heard presentations from: • MSADA President Chris Connolly of Herb Connolly Acura with opening remarks; • Glenn Mercer, “Dealership of Tomorrow 2.0: The 2020 Update”; JANUARY 2020
Massachusetts Auto Dealer www.msada.org
• Francis O’Brien of O’Connor & Drew, “Warranty Parts and Labor Analysis: Identifying Opportunities and Capitalizing on Them”; • Amy Allen of Blum Shapiro, “Performing Human Resources ‘Health’ Assessments”; • Terrence O’Loughlin of Reynolds & Reynolds, “How the Government is Helping You, the Dealer, Find Truth, Justice, and the American Way”; • Michael Hammond of O’Connor & Drew, “Cybersecurity Primer: The Next Attack on Your Dealership”; and • Fisher Phillips attorney Jeff Fritz, “Employment Law Outlook for 2020”. Finally, we owe a huge debt of gratitude to our generous sponsors for these events. Many of our associate members purchased sponsorships and event tickets, and we have detailed their levels of participation in this month’s magazine on page 27. As always, we ask our member dealers to keep our associates and sponsors in mind when they seek various services. Our Dealer Summit and Auto Show Charity Gala would not be the successes they were without this outside support. Thank you to all our sponsors.
MSADA Auto Tech Competition Picks Team for NYC On January 18, on the floor of the BCEC during Saturday’s surging crowds of our auto show, MSADA hosted ten two-person senior teams from nine technical high schools (as well as four
MSADA two-person junior teams, two of which from two other schools) for the hands-on portion of our annual automotive technician competition that decides the Massachusetts representative to the national contest. The November 25, 2019, written test, at which almost 200 students participated, winnowed down the contestants to the top ten two-person senior class teams and the top four two-person junior teams from the group. Based on the hands-on testing, our first place senior winners were Ryan Johnson and Chris Leombruno from Blackstone Valley Technical High School in Upton. Their instructor is Paul Perreault. This school won our competition last year. They will travel to the national competition in April at the New York Auto Show in NYC. Also at the awards ceremony we announced that Jake Dewey, a senior at Essex North Shore Agriculture and Technical High School, achieved the highest score on the written test administered in November. We wish our championship team from Blackstone Valley the best of luck in the City So Nice They Named It Twice. Check out our photo spread on page 26 for more details on our competition results.
2020 Legislative Year Off to a Rousing Start Our lobbying on Beacon Hill knows no rest. Just as 2019 ended, January 1 marked the start of the second year of this current 2019-2020 legislative session. In the even-numbered, election year, the Legislature has formal sessions until July 31 to complete work on all controversial matters that will require a roll call. After that, through the start of the next session on the first Wednesday of January (January 6, 2021), the solons are able to work on and pass legislation only with unanimous consent, as it can take only one legislator to object to kill a bill. The number one priority for the Gov-
ernor and the Legislature each year is the passage of the budget by the start of the fiscal year on July 1. Readers may recall last year this work was not completed until well into July. At that time, Governor Baker and legislators were looking at various ways as to how to spend upwards of $44 billion, including a surplus in excess of $1 billion. On top of that, starting in August, the legislators dickered on how to spend yet another $1 billion in extra funds to close out the year, which did not get accomplished until early December. Lo and behold, all that spending has now led certain analysts to suggest that the FY2021 budget debate will be focused on closing an almost $1 billion deficit! My, how times change in the course of a couple of months. It may be difficult for the Legislature to consider any broad based tax increases, such as in income or sales, in the midst of an election, but do not be surprised if the progressives scream for social justice for those they claim are not making it in these flush times. Nevertheless, once we get past the November election, keep your hands on your wallet as you can be sure the tax-hike crowd will be in the State House in force for 2021. Simultaneous with this budget debate, however, legislative leaders are contemplating passage of legislation to address our transportation infrastructure – roads, bridges, rail, buses, the MBTA, etc. They are throwing around all kinds of new funding streams to bankroll transportation and infrastructure projects around the state, but primarily focusing on the MBTA and how to decrease road congestion. Such revenue streams include increasing the gas tax, which Governor Baker has vowed to veto; increasing existing tolls and establishing new ones on the borders and around in-state; increasing various RMV related fees; higher fees on ridesharing trips provided by Uber and Lyft; and creating a potential carbon tax. Included also in the mix of proposals is the elimination of the trade-in allowance on motor vehicle transactions. We have www.msada.org
been talking with legislators for months now on how much this would be a bad idea. We have yet to see the trade-in allowance repeal be included as part of any official legislative document but it certainly is in the mix of ideas being pushed by the anti-car, anti-internal combustion engine green team that lingers outside the State House and has sympathizers in the Legislature. We will keep our members abreast of any developments on these onerous proposals as they may occur.
Right to Repair Public Hearing As we have written previously, legislators have filed over a dozen bills dealing with the “right to repair” law for the 2019-2020 legislative session. Now, the Legislature officially has before it the initiative petition filed by the RTR proponents to expand the current law so that independent repair shops can grab all sorts of non-diagnostic and non-repair information from car owners’ vehicles. You may recall that the current law was passed after the RTR squad pushed a ballot question in 2012, causing the parties to come to a separate agreement that ultimately was re-passed and signed by Governor Patrick in 2013. It seems the RTR proponents are not content with just having access to vehicle diagnostic and repair information. They now want to extend their reach into all types of data that flows through vehicle computer systems. All this despite the fact that there has not been one legitimate complaint that we know of filed with state or federal authorities alleging blockage to diagnostic and repair information under the 2013 law. On January 13, the Joint Committee on Consumer Protection and Professional Licensure held the required public hearing on all the RTR bills as well as the initiative petition, House 4302, “An Act to Enhance, Update and protect the 2013 Motor Vehicle Right to Repair Law”. We, of course, testified in strong opposition to this broad overreach into
Massachusetts Auto Dealer
JANUARY 2020
7
8
The Roundup car owners’ personal data. First, these bills are completely unnecessary. Current law under MGL Chapter 93K requires automobile manufacturers to provide to any automotive repairer in Massachusetts all information that is needed to diagnose and repair a vehicle brought into a shop, whether it is owned by an independent repairer or a franchised auto dealer. The law provides remedies for repairers who feel that they have not been provided adequate access to such diagnostic and repair information. To the best of our knowledge, in Massachusetts there has not been a single case reported to federal authorities or our Attorney General, or initiated in state court, of a repairer being unable to conduct a repair due to a blockage of such needed information. Finally, the auto manufacturers and aftermarket industry executed a nationwide memorandum of understanding in 2014 based on our state law. If there is such wide-spread abuse by the auto factories in denying the information, why has no other state passed a right to repair law? It is because our law and the national MOU work as they were intended. Second, there is the potential privacy data breach and “stranger danger” aspect to these proposals. The legislation is so broadly written that all data collected and stored in the motor vehicle – whether it is vehicle-related or personal – would be subject to exposure to other entities outside the realm of the customer’s repair shop. In fact, this latest so-called right to repair scheme is a thinly veiled data grab that will lead to the violation of consumer privacy rights and access to proprietary codes that control emission and other vehicle operating systems as well as car owners’ non-vehicle-related personal information. The more strangers can access the vehicle’s information and a car owner’s personal data, the more likely the data can be misused. This scheme also represents a potential intellectual property grab that will allow aftermarket parts manufacturers to improperly access patented information for the purposes of
JANUARY 2020
reverse engineering replacement parts. None of this data is needed to diagnose or repair a vehicle. In fact, where the RTR proponents claim that the auto manufacturers will hide diagnostic and repair data in the vehicle telematics systems, thereby denying repairers the info they need, current law already covers this in prohibiting the factory from doing just that. Third, franchised auto dealers oppose having a new affirmative duty of notice layered onto the vehicle transaction with substantial penalties for noncompliance, including potential loss of business license. Such a notice is more appropriate for inclusion in the vehicle’s owner’s manual provided by the manufacturer. Section 4 of the petition would direct the Office of the Attorney General to draft a notice that includes: “(i) an explanation of motor vehicle telematics and its purposes, (ii) a description summarizing the mechanical data collected, stored and transmitted by a telematics system, (iii) the prospective owner’s ability to access the vehicle’s mechanical data through a mobile device, and (iv) an owner’s right to authorize an independent repair facility to access the vehicle’s mechanical data for vehicle diagnostics, repair and maintenance purposes.” Section 4 of the petition also would add a requirement to state law that any new or used motor vehicle dealer that retails a vehicle containing a “telematics system” must: (1) provide a copy of the notice drafted by the Attorney General to a prospective vehicle purchaser, (2) obtain the prospective owner’s signed certification that he or she has read the notice, and (3) provide a copy of the signed notice to the prospective owner. Under the petition, a motor vehicle dealer’s failure to comply with this provision would be grounds for any action by the relevant licensing authority regarding the dealer’s license, up to and including revocation of the license. We feel such a loss of license penalty for failure to provide a piece of paper to a consumer describing the engineering aspects of the vehicle, better suited as coming
Massachusetts Auto Dealer www.msada.org
from the vehicle manufacturer, is unjustifiably extreme. Finally, an initiative petition with no prior legislative consideration is nothing more than a sword hanging over all our heads and not in the best interests of our customers. The 2013 law was the result of several sessions of legislative consideration with ultimate designs on avoiding a ballot measure. This current ballot threat arises from no legislative inaction but is designed to force auto manufacturers and retailers into a bad law. The vast majority of Commonwealth residents own and drive motor vehicles of various makes, types, and age. It does not suit our members’ purposes to participate in a law that does not work to the benefit of our customers. Our Association worked very hard in 2011-2013 with all interested parties to craft a law that would actually work in providing the necessary diagnostic and repair information to repairers, whether they are our franchised members or independent shops. We see no reason presently to upset the existing statutory framework. The law works here and across the country through the MOU. If the goal of the right to repair crowd really is repair, the law is already on their side. The initiative petition they are pushing is misguided and not in the best interests of Massachusetts’ motorists. The Legislature has an opportunity to take action in an attempt to prevent it from going to the ballot. If the Legislature does not approve a petition in a version that the supporters like by May 6, the petitioners have the right to collect an additional 13,374 signatures to place it on the November 3, 2020, ballot. The additional signatures would need to be filed with the Secretary of State by July 1, 2020. Your Association is opposing this latest data grab by the aftermarket parts industry and big box retailers who are funding this scheme. We will keep our members informed of this process as it moves along so that we can get them engaged with legislators.
MSADA Compliance, Community Outreach Subsidy Reminder Please accept this as our repeated reminder to our member dealers to take advantage of our compliance assistance subsidy program as well as our community outreach assistance program. Under our compliance assistance program, we will support your compliance efforts, from $500 up to $1,000, for your participation in OSHA/environmental workplace compliance services offered by Furrh Associates, KPA, Ethos, or Piper Consulting; employment law services offered by Fisher Phillips; and tax compliance and cybersecurity protection services offered by O’Connor & Drew. Additionally, under our community outreach program, we will support your community giving up to $1,500 in the year as a single point store and up to $2,000 total with $250 per two affiliate stores. Do not miss out on these programs, which your Association’s Board of Directors renewed for 2020. If you need information or the application for these programs, please do not hesitate to contact me.
Save the Dates: Dealer Day on Beacon Hill April 1 Annual Meeting May 1, Boston Dealer Hall of Fame Ceremony Sept. 30 – Oct. 2, Chatham We have a number of important events lined up for our members in 2020. Your Association will conduct this year’s Annual Meeting on Friday, May 1, at the Mandarin Oriental Hotel, in Boston. We are lining up a number of exciting industry and public policy speakers for the day. Be on the lookout for meeting information and registration materials via emails and snail mail. We will again this year provide a hotel room at the Mandarin for any member dealer who desires one for Friday evening. Be sure to register before hotel space runs out. Also, be sure to circle Wednesday, April
1, for our annual Dealer Day on Beacon Hill, when we schedule meetings for our attending dealers with their legislators at the State House, to lobby on the important issues of the day for dealers and our industry. If you just scan the Legislative Scorecard following The Roundup, you will see there are any number of issues before the Legislature this year that directly impact our member dealers and their customers. This is the type of year in which we need our members to walk the halls of the State House and let our message be heard in an effort to stymie some crazy ideas floating around the building. If you have attended in the past, we can use your veteran leadership. If you have not, dealers have said they have found it rewarding and exhilarating to be part of the public policy process. Finally, in order to honor those who have been titans within our industry in Massachusetts, your Association will conduct its Third Annual Dealer Hall of Fame ceremony September 30-October 2 at the Chatham Bars Inn on Cape Cod. We will be sending out nomination materials by email and snail mail. If you know a dealer or dealers who should be recognized in our next Hall of Fame class, submit the nomination form to us when you receive it. Criteria upon which dealers should base their nominations should include, but not be limited to, the following: commitment to the industry and the Association; time in the business; community involvement; and overall positive impact on the industry. We are looking forward to our members’ input to help with the selection process. Should you have any questions, please do not hesitate to contact us.
2020 Dues Invoices At the start of January your Association sent out 2020 dues invoices to all our dealership and associate members. Our members’ dues help fund the Association’s activities on their behalf, including our lobbying on Beacon Hill and in Washington, our member counsel services, and our education and training activities. Over the last several years we have
www.msada.org
witnessed quite a bit of economic disruption in our industry, especially from governmental over-regulation. More than ever, our dealers need a strong MSADA. MSADA will continue to lead on the various issues that threaten the viability of our dealerships. We will strive tirelessly to keep you informed of developments in our industry and how they will play out in Massachusetts. These efforts also include working closely with NADA to better serve our members. Our strength lies in our members. With your continued support and membership renewal, we can build on our current foundation and begin to enhance your Association’s core purposes of communication, advocacy, and education.
Pres. Trump Signs USMCA As we were going to press, President Donald Trump was affixing his signature to the historic United States-Mexico-Canada trade agreement (USMCA) that was strongly supported by NADA, AIADA, your Association, and other business groups. Once the House approved the trade pact on Decemeber 19, the Senate expeditiously took the matter up over the next several weeks and ultimately approved it, 89-10, prepping the USMCA for the President’s approbation. Our Democrat U.S. senators split their votes — Warren was a “yes” and Markey was a “no”. Six of our nine House members – all Democrats voted “yes” on it last month. The Trump Administration negotiated USMCA as a campaign pledge to replace the North American Free Trade Agreement (NAFTA), which was passed during the Clinton Administration. Canada and Mexico purchase more US-made goods than the next 11 trading partner countries combined. USMCA is intended to help preserve more than two million American manufacturing jobs (at least 15,000 of them in Massachusetts) that rely on trade with our North American neighbors. As the President says, “Never tired of winning.” t
Massachusetts Auto Dealer
JANUARY 2020
9
10
MSADA Troubleshooting L EGISLATIVE S CORECARD JANUARY 2020
BILL#
SPONSOR
SUBJECT
S179 H262
Sen Pacheco Rep Hunt
Amendments to Ch. 93B, the auto dealer franchise law.
SUPPORT
The Joint Committee on Consumer Protection held public hearing on July 15, 2019.
H3558 S658
Rep Kafka Sen Welch
Creates process to increase the insurance reimbursed labor rate paid to auto body repairers.
SUPPORT
The Joint Committee on Financial Services held public hearing on September 26, 2019.
H1087 S576 H956 S625
Rep Puppolo Sen DiZoglio Rep Donahue Sen Moore
Protects dealers from OEMs’ restrictions on selling non-OEM service contracts.
SUPPORT
The Joint Committee on Financial Services held puplic hearing on October 22, 2019.
H960 S629
Rep Driscoll Sen O’Connor
Creates administrative process for vehicle owners to seek diminished value of damaged vehicle.
SUPPORT
The Joint Committee on Financial Services held public hearing on September 26, 2019.
S110 S2416
Sen Braunsberger Redraft
Places burden of recall information to car owner or vehicle inspector.
OPPOSE
The Joint Committee on Consumer Protection held public hearing on July 15, 2019; reported redraft favorably, S2416; referred to Senate Ways and Means.
H3031 H3049 S2133
Rep Golden Rep Howitt Sen Rush
Creates statutory process for allowing temp tags for out-of-state sales.
SUPPORT
The Joint Committee on Transportation held public hearing on May 14, 2019; Committee reported H3031 and S2133 favorably to each’s respective Ways and Means Committee.
H234 H206 S172
Rep Finn Rep Chan Sen O’Connor
Creates process to appeal improperly issued Class 1 license.
SUPPORT
The Joint Committee on Consumer Protection held public hearing on July 15, 2019.
H282
Rep Linsky
Allows an OEM to open a factoryowned store, without a dealer, if there is no same line-make dealer in the state. (The so-called “Tesla Exemption.”)
OPPOSE
The Joint Committee on Consumer Protection held public hearing on July 15, 2019.
H220 H4307
Rep Cusack Redraft
Clarifies that licensed motor vehicle sales finance companies do not need an additional license to finance small loan contracts with negative equity.
SUPPORT
The Joint Committee on Consumer Protection held public hearing on May 13, 2019; reported redraft favorably, H4307; referred to House Steering, Policy and Scheduling.
H2873 S1923
Rep Hecht Sen Barrett
Creates ZEV rebates program.
SUPPORT
The Joint Committee on Telecommunications, Utilities and Energy held public hearing on July 23, 2019.
H3997
Speaker DeLeo
Creates $30 million ZEV rebates program.
SUPPORT
House passed the bill on July 24; refeered to Senate Ways and Means Committee.
H356 H4310
Rep Vincent Redraft
Lemon Law mileage, dollar amount changes.
OPPOSE
Joint Committee on Consumer Protection held public hearing on July 15, 2019; reported redraft favorably, H4310; referred to House Steering, Policy and Scheduling.
S132
Sen deMacedo
Prohibits use of non-OEM parts in repairs that could impair vehicle warrenty.
SUPPORT
The Joint Committee on Consumer Protection held public hearing on July 15, 2019.
H4122 H4302
Rep McMurtry Init. Petition
Amends Right to Repair law [17 bills filed].
OPPOSE
The Joint Committee on Consumer Protection held public hearing on January 13, 2020.
S120
Sen Creem
Consumer Data Protection Act, based on CAL law.
OPPOSE
The Joint Committee on Consumer Protection held public hearing on October 7, 2019.
H4113
Rep Ehrlich
Mandates automatic shutoff for keyless start vehicles.
OPPOSE
The Joint Committee on Transportation held public hearing on January 2, 2020.
H4050
Rep Madaro
Regulates peer-to-peer vehicle rentals.
SUPPORT
JANUARY 2020
STATUS
Massachusetts Auto Dealer www.msada.org
The Joint Committee on Consumer Protection held public hearing on January 27, 2020.
MSADA
Troubleshooting
New Year, New Scam Credit Privacy Numbers
By Peter Brennan, Esq. MSADA
Staff Attorney The more things change, the more they stay the same. Fraudsters are off to a strong start in 2020 with a new variation on an old scam (identity theft), and dealers need to be alert. Credit Privacy Numbers, or CPNs, have been around for several years, but have recently made headlines as the role of CPNs in various scams has become more prevalent. The concept of CPNs is not complicated. A CPN is a so-called “synthetic social security number”, a nine-digit number that can pass as an SSN that a consumer will fraudulently claim as their own when applying for credit. In the past several years, businesses offering “credit repair” have sprouted up to take advantage of those with a poor credit history or no social security number. For a fee, the credit repair company will provide a customer with a CPN and encourage the customer to create a new credit profile by acquiring a new phone number and new mailing address. Customers are encouraged to update their licenses to reflect the new mailing address and to obtain a new email address. The CPNs are generally real social security numbers with the last four digits altered. Sometimes the CPNs provided to customers are real social security numbers, often belonging to minors with no credit history. Under the federal U.S. Privacy Act of
1974, consumers may withhold their social security number when not required by federal law, and federal law does not require a social security number to apply for credit. Those that deal in CPNs claim that the main purpose of a CPN is to bolster consumer privacy. Realistically, however, CPN companies are instructing consumers on how to create an alternative identity that will be realistic enough to fool the credit bureaus and then fool a business into extending credit to a consumer that would otherwise not qualify. This month, Automotive News reported that over $5.5 million in fraudulent automotive loan applications, mostly in Southern California, had been identified as containing CPNs by an industry fraud expert. In this scam, the CPN sellers substituted the last four digits of a valid SSN with the birth date associated with the fake identity, creating a pattern for investigators to uncover. In total, 340 credit applications submitted to dealerships were discovered to include CPNs that fit the pattern. The Federal Trade Commission is aware of the spread of CPNs and has posted a warning to consumers about engaging with businesses that offer to create a “new credit identity”. On the FTC website, the agency warns that those consumers that acquire a CPN for the purpose of applying for credit would be committing a federal crime if they were to lie on a credit application or misrepresent their SSN. Recently, the FTC has been cracking down on so-called “credit repair companies” for other violations. In June, the agency brought a complaint against several companies for violations of the FTC Act, the Credit Repair Organizations Act, the Truth in Lending Act, and other charges, which was settled this month with large monetary judgments. The FTC alleged that the companies in question www.msada.org
promised to remove all negative items and hard inquiries from a customer’s credit report and took up-front fees from customers for doing so. Under the terms of the settlement, the companies were permanently banned from operating or promoting any credit repair service and were hit with monetary judgments as high as $9.5 million. As always, dealers should be on the lookout for any signs of fraud on a finance application, because ultimately it will be the dealer that pays the price. Most lenders will hold a dealer responsible if it submits an application that is approved by the lender and later shown to contain fraud or misrepresentation. This is especially true in the case of a default, which is likely if the customer is using a CPN to hide their true credit worthiness. Frequently, a dealership’s agreement with the bank will put the onus on the dealer to buy back a deal that shows signs of fraud. The dealer may also be responsible for tracking down the customer and vehicle in a deal involving identity theft. With so much fraud in the world, what can a dealership do? Be smart, and train employees that it is more important to root out fraud than it is to make a few extra sales (that might come back to bite you). One specific red flag to look for in cases involving CPNs is that the customer will have a very limited credit history: If a person has a limited credit history and they are older than 22, further investigation into the person’s background is required. t If you have any questions regarding this column, 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.
Massachusetts Auto Dealer
JANUARY 2020
11
12
AUTO OUTLOOK
JANUARY 2020
Massachusetts Auto Dealer www.msada.org
MSADA
www.msada.org
Massachusetts Auto Dealer
JANUARY 2020
13
14
AUTO OUTLOOK
JANUARY 2020
Massachusetts Auto Dealer www.msada.org
MSADA
www.msada.org
Massachusetts Auto Dealer
JANUARY 2020
15
16 16
RACEMSADA TO THEDEALER FINISH SUMMIT 2020
Francis X. O’Brien O’Connor & Drew
No car is a perfect machine, and that is why they come with warranties. Francis O’Brien kicked off the summit with a discussion called “Warranty Parts & Labor Analysis.” O’Brien has run the internal audit and fraud division at O’Connor & Drew for the past 17 years. Trying to navigate the warranty territory, he found that a Massachusetts legislative statute is more helpful to dealerships looking to reimburse their costs than what most OEMs will ever provide on their own. “The Massachusetts Chapter 93B law will often get you a higher rate. At the end of the day you will almost always do better filing under the state statute than the manufacturer’s protocol.” Amended eight years ago to strengthen the process for dealers, 93B requires manufacturers to reimburse at retail rates for both parts and labor. “You are not going to get a better return on investment than on any money you will spend. For a small investment, I have seen dealers get up to $20,000 a month in gross additional profit.” Often when a dealer buys a new store, odds are good that a manufacturer is going to reset that rate to cost + 40% or MSRP. List price is not the same as retail, and if a dealer is able to get 80% over cost, as is often the case when 93B is implemented, it makes a massive difference. “The reps will often tell dealers that you cannot submit for a warranty increase for the first year. A dealer called me wanting to file, but then his fixed-ops director called and said the manufacturer would not let them do it. I said that your rep is either misinformed or he is lying because you can submit for a warranty parts or labor increase at any time as long as you have not submitted under the 93B law in the past year.”
Jeff Fritz Fisher Phillips LLP
“Employment Law Outlook for 2020” was presented by attorney Jeff Fritz. A partner at Fisher Philips, Fritz is a 2003 graduate of the UConn School of Law who specializes in employment litigation. While people are still looking at all of the issues around overtime payment, it was a judicial decision that has dominated JANUARY 2020
Massachusetts Auto Dealer www.msada.org
RE V V into th
By Jeff Breeze After the warmest January weekend in Boston history, temperatures returned to their winter norms as folks gathered at the Boston Convention and Exhibition Center for the New England International Auto Show on Friday, January 17. With a showroom floor the size of three football fields, most people in attendance had no idea that the level above was hosting the MSADA Dealer Summit & Charity Casino Night Gala in conjunction with the main event. The theme for this year’s MSADA Dealer Summit was “Revving Into the ‘20s,” and a variety of speakers presented different aspects of the future of the retail automotive business. Emceed by MSADA Executive Vice President Robert O’Koniewski, the day began with an opening welcome address given by MSADA President Chris Connolly of Herb Connolly Motors. “While 90% of our time has dealt
the discussions over the past year. The Sleepy’s ruling cast a massive shadow over the employment law scene from the moment the SJC handed down the decision; much of 2020 seeks to sort out just what it all means. There are 113 lawsuits on the books so far, many of them class action, and no clear answer as to what will happen as most judges seem afraid to touch it and no legislative fix appears on the horizon. “If you have not paid attention to Sleepy’s, if you have not made an adjustment to ensure that your pay plan complies with Sleepy’s, you are really doing yourself a disservice. You should really go home tonight and figure out how to fix it and then fix it immediately, because there is really no excuse from this point forward.” Even with minimum wage raised to $12.75, Fritz suggests that
VheING ’20s! with issues regarding the Sleepy’s decision, we plan to continue to fight for our members and push for new legislation to provide protection for those who followed the Department of Labor’s guidance letter.” Connolly said MSADA will always fight for our member dealerships. “Manufacturers continue to squeeze margins. It’s not getting any easier so you need to have the best processes and training available.” O’Koniewski put the priority on trying to clear up the Sleepy’s mess quickly as all controversial legislation needs to be dealt with by the end of July. Right to Repair has returned to the docket as aftermarket advocates are now seeking to grab any and all information that flows through telematics in the vehicle. MSADA also helped to get the state to re-fund the EV rebate program adding $27 million each of the next two years. “We have a number of community outreach programs to support our dealers, who are very giving people. If you let us know what you’re giving, we’re going to help you out with a match up to $2,000. We also have a compliance assistance program in place with several partners, so take advantage of that subsidy or you are leaving money on the table.”
if you still have people working overtime, then continue to pay the 1.5x rate, to stay on the safe side. Employers with non-exempt employees should think about what you are paying overtime on, and try to schedule accordingly. However, a schedule is not enough when it comes to litigation, and all employers should have their staff punching in and out on a time clock to make accurate records, and not to take automatic deductions for lunch or other planned breaks. Depending upon the size of your company and your particular situation, it is worth also looking into whether arbitration agreements make sense, to help calm potential legal unrest, especially with the knowledge that all state rewards are subject to automatic triple damages.
MSADA
Amy Allen Blum Shapiro
The next discussion was led by Amy Allen, leader of Blum Shapiro’s Human Resource Consulting Practice. With over 25 years of experience in HR in large businesses across the region from The Boston Globe to Suffolk Construction, Allen’s presentation was on “Performing Human Resources ‘Health’ Assessments.” Allen has developed a way to assess a business’ HR needs and how well they are operating. Dealers would ask, “How am I able to assess whether I have highly functional people and culture processes?” She wanted to find ways to put your company in the best possible position to attract top talent and be an employer of choice. “We have been in a war for talent for about 30 years and do not see any end of it. As the unemployment rate goes down, it is great for the economy, but it is tough for us as recruiters to find good people and retain them.” She ran the gamut of HR topics, willing to revise all of the systems to make operations flow with excellence and efficiency. Allen mentioned that the application process is changing and yet internal referrals are actually the best way to find the best candidates. “Time to fill” is a way to measure the process by measuring the amount of time a seat is empty before a new hire, and that nowadays any employer must use the interview process to sell yourself to candidates as much as to just evaluate them. When you do have a candidate, Allen finds paramount importance in an offer letter. While the letter can explicitly layout pay scale and job expectations and requirements, she recommends to think of it as not merely a legal document, but also as a branding opportunity and to show them the family that this job is an entrance to. Looking to the future for the answer at the moment is clear: Video. “The next generation looks for video when they are applying for a job. They go to websites, and they look for videos. Video job descriptions are hot right now, and it does not cost a lot of money; you can do one of these on your phone. Take your best mechanic or best salesman and ask them, ‘Why do you work here? Why do you stay here?’ Ask them what to think about when someone is considering applying here, and then post that video to your careers page.”
www.msada.org
Massachusetts Auto Dealer
JANUARY 2020
17
18
RACEMSADA TO THEDEALER FINISH SUMMIT 2020
Terrence O’Laughlin Reynolds & Reynolds
Terry O’Laughlin, the Director of Compliance at Reynolds & Reynolds, titled his presentation “How the Government is Helping You, the Dealer, Find Truth, Justice, and the American Way.” With a history based in the Florida Attorney General’s Economic Crimes Section, that title was facetious and, in truth, was about the problems dealerships face with government, and “how, sad to say, government reviles business sometimes.” O’Laughlin addressed whether the past was a prologue for the future, and he joked that from an AG’s standpoint you can never make a mistake suing a car dealer. Three of the top ten complaints at the Massachusetts Attorney General’s Office were automobile related. Legalese has reached a point where 39 feet of documents are required to sell a vehicle. Whereas the principle of caveat emptor had previously ruled the day, now the Unfair and Deceptive Trade Practices Act (UDAP) restricts practices that have the “tendency or capacity to mislead a consumer.” With dealers across the country being sued for 153 different scams, being in compliance is the best thing any dealer can do. “While AG Margaret Coakley spent the first half of the decade focused on franchise dealers, over the past 5 years, AG Maura
Michael Hammond O’Connor & Drew
Michael Hammond is an Air Force veteran who has spent his career in IT, as the Principal, IT & Audit Services at O’Connor & Drew since 2012. His talk, “Cutting Through the FUD (Fear, Uncertainty, and Doubt),” raised the flag on the importance of protecting your computer systems with the proliferation of ransomware and other attacks. With his division of OCD Tech they will start any evaluation by figuring a way to hack into your network, without malicious intent. Instead they help to reveal where the weaknesses in the system are and create solutions to help protect from real hackers. Sometimes it takes only 5 minutes for them to reach the core systems, when holes are left open. With fear of Iranian repercussions after recent political turmoil, JANUARY 2020
Healey has focused on independent and buy-here-pay-here dealers.” The trend has been toward prosecuting UDAP violations focusing on acts that are, generally, unfair and deceptive acts and practices. “I could go to any dealership in the country and find something wrong. It is not because you are not honest, it is not because you are not trying. It is because there is so much regulation.” Paying attention to what rules the AG’s docket is a good practice because, if you know what they are looking for, you can do something about it. His top recommendation is: “If something is worth doing, it is worth doing poorly. It is just important to start. You don’t have to be perfect at what you do. If the Attorney General comes in, you can point and show that you tried to accommodate this law or regulation. That is a long way toward a defense. “ The best answer is to not be doing anything wrong to ever cause the AG to prick up her ears: Don’t get noticed and always respond to complaints. “The best thing you can do is for the Attorney General not to know that you exist.” If you do get noticed, agree to cooperate, study the problem, and request all documentation so you know the exact nature of any issue.
the thought of cybersecurity is at the forefront of many worried minds. “Are we going to get attacked by other countries and does that really matter?” Hammond asked. “I can tell you that most of the time, you are not going to be attacked by huge nation-state actors, but by kids in their basement who are scanning the internet looking for an open door. It’s much like in a parking lot where a thief may jiggle on every door handle. When they find one that is open, they go into that car, take the change and leave. No one is going to go around breaking windows and drawing attention to themselves just to get some change out of the cupholder.” Hackers send well disguised emails and once any employee clicks on any of those links, it can grant access to the whole system and shut things down entirely for days at a time. Where such spear-phishing once ruled the day, password spraying is the newest mode of attack where they send a single password to a multitude of accounts. Requiring two-factor authentication for people logging in to your system helps defeat this tactic. The best approach is to engage in employee awareness training to keep them from falling prey to any of these volleys: Make them be suspicious first (if a link ever asks you to “enable macros” that is a red alert). As a system manager, make sure that backups are working and do not rely just on the cloud, have an offline backup to give yourself as full protection from all cyberattacks.
Massachusetts Auto Dealer www.msada.org
MSADA
Glenn Mercer Independent Automobile Consultant
For the keynote address of the day, Glenn Mercer updated the predictions for the auto industry with “Dealership of the Future 2.0,” providing a new perspective of 2020. The original Dealership of Tomorrow report commissioned out in 2015 and predicted the changing environment to 2025. When NADA commissioned an update to that report, the perspective extended through the end of the decade. Mercer showed that research is convincing that there is still a positive outlook for the future of the automobile dealership. With EVs still occupying a sliver of the market, the threats to the system at the moment are actually more “inside” than “outside” trends. “We do not see revolutionary change or disruption, as unfashionable it is for us to say that. We would say that as we are moving from an era remarkable recovery from the Great Recession, where we are forecasting now a plateauing. It would mean
a shift from keeping up with rebounding sales, to an emphasis on cost control and cost reductions and operations inside the store. What has changed as it were is that we have inverted the challenges so far, the fear of an electronic future had our hair on fire and operations of the store were a little bit overlooked. The threat of electric vehicles has not receded, but it has become more manageable, and knowable, so we’re putting those in second place now.” Other trends showed that fewer 16 year olds were getting their licenses, but it’s more of a deferral as percentages are the same once people reach their early 20s. At the other end of the driver distribution are seniors, with millions more on the road, and they are a group more likely to buy new vehicles than teenagers. While the more affluent are the more likely buyers of new cars, the geography of our world demands that cars are everywhere. “America is a nation of suburbs, and the suburb is the happy hunting ground for cars. So the next time you hear that we are all moving back to the city, ask, ‘Is it suburban growth or is it true urban core growth?’” Mercer’s presentation spent more than an hour describing a future that can be more convenient to the customer, more productive from the salesforce. It was just a fragment of his full report that he will present at the NADA Convention in February. “There are a lot of forecasts in here, but that is not the point,” Mercer said. “If the point was forecasts we would release it, and then come back in ten years to see how well we did. The point was to set out forecasts - and we would love if you disagreed with all of them because that would mean you had read it and come out with your own views.”
www.msada.org
Massachusetts Auto Dealer
JANUARY 2020
19
20
RACE TO THE FINISH REVVING INTO THE ’20s
JANUARY 2020
Massachusetts Auto Dealer www.msada.org
MSADA
W
www.msada.org
I
N
N
Massachusetts Auto Dealer
E
R
JANUARY 2020
21
S
22 16
RACENEW TO THE FINISHINTERNATIONAL AU 2020 ENGLAND
JANUARY 2020
Massachusetts Auto Dealer www.msada.org
MSADA
UTO SHOW
www.msada.org
Massachusetts Auto Dealer
JANUARY 2020
23
24 16
RACENEW TO THE FINISHINTERNATIONAL AU 2020 ENGLAND
RE V IN V into the ’20s
JANUARY 2020
Massachusetts Auto Dealer www.msada.org
MSADA
UTO SHOW
NG 0s!
www.msada.org
Massachusetts Auto Dealer
JANUARY 2020
25
26 16
REVVING INTO THE ’20s RACE TO THE FINISH
Auto Tech Competition Starting with almost 200 students from 15 high schools on November 25, 2019, with the written test, the MSADA Auto Tech Competition winnowed down student competitors to the top ten twoperson senior class teams and the top four two-person junior teams from the group. These teams competed on January 18, 2020, at the hands-on test at the Boston Convention and Exposition Center in Boston during the Saturday session of our New England International Auto Show. The schools competed to be the Massachusetts representative at the national auto tech competition at the NY auto show in April.
Senior Teams First Place Blackstone Valley Technical High School Ryan Johnson and Chris Leombruno Instructor: Paul Perrault Second Place Pathfinder Regional Technical High School Ryon Foster and Jacob Russo Instructor: Paul Bouthiller Third Place Essex North Shore Ag and Technical High School (Team #1) Hayden Littlefield and Jeremiah Waugh Instructor: Tom Forsyth
Junior Teams First Place Southeastern Regional Vocational Technical High School William Messana and Stephen Thomsen Instructor: Joshua Gower Second Place Bristol Plymouth Technical High School Fernando Acevedo and Josh Medeiros Instructor: Stephen Ribbe
Highest Written Test Score Senior – Jake Dewey, Essex North Shore Ag and Technical High School
Junior – William Messana, Southeastern Regional Vocational Technical High School JANUARY 2020
Massachusetts Auto Dealer www.msada.org
MSADA
RE V ING V into the ’20s! THANK YOU!
From the New Car Dealers of Massachusetts and the Auto Tech Scholarship Students you have helped, we thank our event sponsors. ROCKET FUELED TrueCar
VALET SPONSOR ACV Auctions
TURBO CHARGED Cox Automotive
FULL BAR SPONSORS American Fidelity O’Connor & Drew
HIGH OCTANE Albin, Randall & Bennett Armatus Dealer Uplift Blum Shapiro Fisher Phillips KPA Services Southern Auto Auction Zurich
SHOT-OUT-OF-CANNON FAST Adesa CVR Downey & Company JP Morgan Chase Northeast Dealer Services Reynolds & Reynolds CASINO ROOM SPONSOR Ethos Group BREAK STATION SPONSOR Burns & Levinson
FOOD STATION SPONSOR American Tire Distributors DESSERT STATION SPONSORS Enterprise Rent-A-Car Murtha Cullina PARTING GIFT Santander FRIENDS OF THE SCHOLARSHIP PROGRAM Bank of America/Merrill Lynch Broadway Equipment GW Marketing Huntington Bank Key Bank McWalter Benefits Group RogersGray
www.msada.org
Massachusetts Auto Dealer
JANUARY 2020
27
28
NEWS NEWS the NEWSfrom from Around from Around Around the Horn Horn NEWS
NEWS the Horn
EASTHAMPTON
Cernak Buick Set to Close The late Samuel Cernak opened a dealership in 1940 and started selling Buicks in 1948. The family pointed with pride to the business as one of the oldest Buick dealers in the United States. However, with Buick dropping sedans from its fleet, the third-generation family business will close, Jennifer Cernak said January 27. The Cernak family is not yet ready to announce details and a timeline, she said. They are talking with many people, including General Motors, about how best to move forward and about how things will unfold. “As you can imagine it is a very sensitive topic for me and for my family and customers,” she said. Cernak survived the 2009 General Motors Great Recession purge of smaller dealerships. At the time, General Motors used its federal bankruptcy process to terminate agreements with dealers. Cernak also survived for more than a decade with a business model increasingly rare in the auto motive world: a one-brand, one-location, family-owned business. The 1.26-acre property is on the busy Route 10 corridor between fast-growing Easthamp-
JANUARY 2020
ton and Northampton. It is across the street from the Tasty Top site where Easthampton Advanced Research Park has proposed a marijuana laboratory research and retail sales complex. Kenneth Cernak, the dealership’s president and Jennifer’s father, was a vocal critic of a previous plan by Stop & Shop to build a supermarket on the large parcel across from the dealership,
Massachusetts Auto Dealer www.msada.org
MSADA
NEWS from Around the Horn
which is also home to the Easthampton Golf driving range. He dropped a lawsuit over the proposal after losing an initial ruling, clearing the way for the project, but Stop & Shop later dropped its plans. At the time, Kenneth Cernak said he feared traffic to the supermarket would impede access to the dealership. Burke Chevrolet in Northampton will become the next-closest General Motors dealership to Easthampton. Beyond that is Central Chevrolet in West Springfield, Bob Pion Buick-GMC in Chicopee, and Balise Chevrolet Buick GMC in Springfield. Just north of the Cernak Buick property on Route 10, the former Fedor Pontiac Oldsmobile property will be the site of the new River Valley Co-Op supermarket. Robert O’Koniewski, executive vice president of the MSADA, said only selling Buicks as new cars put Cernak at a disadvantage. “It’s very hard to make it as a single-point, single-nameplate dealership when that brand isn’t the biggest seller in the family of nameplates,” O’Koniewski said. “The GM plan of starting someone off as a Chevrolet customer, then when you made more money moving to sporty Pontiacs then Oldsmobiles and Buicks and if you really made it, Cadillac, that marketing plan really isn’t true anymore.” He added General Motors focuses Buick now away from sedans - a switch for a brand built on the Road-master and the LeSabre - and on to newer SUVs and crossover vehicles. “Buick is really retreating from what made it Buick,” he said.
SPRINGFIELD
TommyCar Raises $1 Million for Dana-Farber The 11th Annual Tom Cosenzi Driving for the Cure Charity Golf Tournament was all about the Million as the event celebrated an important milestone of providing $1 Million Dollars to Dana-Farber Cancer Institute. TommyCar Auto operates five dealerships: Country Nissan in Hadley, Country Hyundai in Northampton, Northampton Volkswagen, Volvo Cars Pioneer Valley in South Deerfield, and the new Genesis of Northampton. The Tom Cosenzi Driving For The Cure Charity Golf Tournament hosted their 11th Annual Tournament on Monday, August 19, 2019, at Twin Hills Country Club and Elmcrest Country Club, both in Massachusetts. Players enjoyed 18 holes of golf at one of the area’s top premiere private golf courses, a delicious lunch, exciting on-course activities, an evening cocktail
reception with live entertainment from Noah Lis and Hayden Taylor, a gourmet dinner, amazing raffle prizes, and silent and live auctions. Attendees also heard from Dr. Wen from the Neuro-Oncology Department at Dana-Farber Cancer Institute about the impact that their support has on brain cancer research. “The Tom Cosenzi Driving for the Cure Charity Golf Tournament is grateful for our Presenting Sponsor JM&A Group and our Platinum Sponsor Southern Auto Auction, as well as the over 150 generous sponsors, supporters, and volunteers, so deeply committed to positively impacting the lives of patients at Dana-Farber Cancer Institute,” stated Carla Cosenzi, Co-founder of the Tom Cosenzi Tournament. “Thanks to them, we have raised $1,086,487.50 in the last 11 years to Dana-Farber Cancer Institute.” Carla J. and Thomas M. Cosenzi assumed ownership of the dealerships in the Pioneer Valley region following the untimely death of their father Thomas E. Cosenzi, whose tireless work over several decades helped grow the business into the successful one it is today. To contribute to the 12th Annual Tom Cosenzi Driving For The Cure Charity Golf Tournament or to learn how to be involved in this year’s event, visit TomCosenziDrivingForTheCure.com www.msada.org
Massachusetts Auto Dealer
JANUARY 2020
29
30
NEWS from Around the Horn
MSADA
IN MEMORIAM
William H. York J une 12, 1935 – D ecember 15, 2019
York Oldsmobile, York Isuzu, York Ford, Saturn of Medford, and Kia of Medford
William York, an automobile dealer from Revere who worked from 1977 to 2002, died December 15 in Boca Raton, Florida, at age 84. York opened York Oldsmobile in Revere in 1977 and later owned York Isuzu, York Ford, Saturn of Medford, and Kia of Medford. He was on many committees of the MSADA. His sons Brad and Adam York currently run York Ford in Saugus. Bill grew up Brookline, graduated Boston Latin School, and later Rensselaer Polytechnical Institute with both a BS and MS in Aeronautical Engineering. While working as an engineer for Aritech, Bill and his team developed the first ultrasonic motion detector sensor currently used for burglar protection. Following a successful career as
an engineer, he pursued his newfound passion for the car industry and opened York Oldsmobile in Bell Circle
JANUARY 2020
of Revere in 1977. This dealership was followed by York Isuzu, York Ford, Saturn of Medford, and Kia of Medford. From an early age Bill had a love of boats and airplanes. He summered in Point of Pines Revere and built his own small skiff and model airplanes. His love of ocean and air led to a lifetime of boating and flying, almost always with his family in tow. In the summer of 1951, a then 16-year-old Bill met the love of his life, Marilyn. He would pilot his boat from Revere to Winthrop to visit Marilyn at her family house in Winthrop. The two fell in love and married in 1957. They raised their family in Marblehead and were members of the Dolphin and Boston Yacht Clubs. Bill’s family was the center of his universe, often travelling en masse to ski, boat, and cruise around the world. Bill, also known as “Pops,” held a special place as patriarch of the York family and was adored by his family. His sound advice was sought by all and was a mentor to countless people. A funeral service was held on December 19, 2019, and he was interred at Temple Emanu-El Memorial Park in Danvers. The York family requested that expressions of sympathy may be made in William’s memory to Dana-Farber Cancer Institute.
Massachusetts Auto Dealer www.msada.org
MSADA
TECHNOLOGY
Don’t Get Phished
Why Social Engineering is Important By Jill Kamperides IT Security Analyst, OCD Tech
Have you ever been personally contacted by the prince of Nigeria? If so, you’ve either been the target of a phishing attack, or you have a significantly powerful connection, but probably the former. As silly as it is to receive an email from the prince of Nigeria, the core phishing tactic used here is quite clever, common, and oftentimes successful. Attackers would not be sending these emails if they did not work. The idea is to impersonate someone with power, wealth, or overall influence, and send a captivating email as that person in an attempt to elicit a response from the target. The response can be any number of actions, such as clicking a link, opening an attachment, or replying to the sender (never do any of these if you are not sure who your email is from). Most people will be on high alert if they receive an email from nigerianprince123@gmail.com, which is why most phishing emails will not be that obvious, especially when a business is being targeted. For example, let’s say you work at a company called John Doe Auto. Your company’s website is johndoeauto. com, and all of your company emails are formatted as user@johndoeauto.com. Attackers can spoof your company domain name, meaning they will send emails that look like they are coming from within your own company. If the attacker has not done prior research, they might pick a vague, but important, username to send emails as, generally rotating through titles like ceo, humanresources, or IT@johndoeauto.
com. And if they have done prior research, which is usually as simple as gathering information from your company website and LinkedIn page, you might see emails that look very much as if they are from someone you know, maybe your HR manager, your receptionist, or your head of sales. Phishing attacks are getting harder and harder to defend against. From a technical viewpoint, spam filters do a lot of work, but the phishing emails that get caught in spam are not the ones you need to worry about. There are spam evasion tools and specific methods of making sure that an email will land in a user’s inbox. If you are being targeted, an email will make it to your inbox eventually, and that is why you need to be prepared on a behavioral level. People – as much as they are the greatest asset to a business – can also be the greatest weakness to a business if they are not properly trained. This is why phishing is so successful, and why social engineering is so important. The people are the targets, so the people’s behavior must change. Social engineering is a type of psychological practice. It is outwardly designed to trick and deceive targets, which is exactly what an attacker wants. However, from a cybersecurity perspective, social engineering vastly supersedes all other methods of inspiring awareness. If you take away anything from this article let it be this: The best way to defend against phishing is to familiarize people with phishing. This is done by actually phishing your team! You do not go after them with malicious content, of course. The most effective strategy is to organize a phishing campaign. Emails will be sent to each staff member - really from you on the backend, but to the user they will appear as a somewhat suspicious phishing email, maybe from ceo@johndoeauto.com. You want the email to look like something an actual attacker might send. This way, when your www.msada.org
user is the target of a real phishing attack, they will know what to look for, they will recognize it, and they will not be compromised. Ultimately, you are testing your users with a simulation and recording the results. No harm will be done – aside from maybe a little embarrassment on behalf of those that do get fooled – and you will have complete transparency into how secure your organization really is. With this information, you can put training in place, reveal the results, send out reminders to be wary of phishing emails, etc. And over time, user behavior will change. This is speaking from experience. Our team at OCD Tech has gone through so many phishing campaigns that management cannot send a link out to the staff without also separately telling us, “This is not a phish.” Otherwise no one would click it! In the end, this is the behavior you want. If we were truly targeted, we would be safe. And you can be, too. The social engineering team at OCD Tech utilizes a combination of custom and commercial tools to manage phishing campaigns, training campaigns, and reporting of results. We can do the same for you. If you have concerns about whether or not your team would recognize and withstand a phishing attack, reach out to us for more information. Don’t get phished. t Joining the team in 2019, Jill is an IT Security Analyst focused on privately held companies and international banking clients. As part of the penetration testing team, she utilizes her deep knowledge of programming and automation through scripting and uses that knowledge to quickly discover misconfigurations in target systems. Jill is also responsible for the OCD Tech phishing platform and oversees the maintenance of weekly client employee security awareness campaigns.
Massachusetts Auto Dealer
JANUARY 2020
31
32
MSADA
BUSINESS
Planning for Success in 2020 By Barton Haag CPA, Albin, Randall & Bennett
Forecasting 2020 Although 2019 was not a record sales year for the automotive industry, it was still a solid year and many dealers were profitable. According to most economists, the 2020 forecast shows we are not likely to experience a significant decline in volume, but most show a slight decline for the next several years. Across the industry, the 2020 models hitting showroom floors are certainly good for sales, including model debuts and existing models with high-tech and performance upgrades. Additionally, the proposed United-States-Mexico-Canada Agreement (USMCA), an agreement fully supported by the NADA, would continue tariff-free vehicle and auto part exchanges for dealerships in North America. While the U.S. House is debating and voting on the agreement in January, the USMCA appears to be a definite deal and good for business. Preparing for 2020 Whether you are headed warily into a new year or expecting booming success, it is always good business to look at your forecast. Using your forecast, you can assess opportunities for making successful years more successful, as well as prepare for the lows in those years where expected sales may be down. Forecasting forces you to think about your business strategically. So, how do you make the most out of your forecast and avoid hits where you can? It starts with current, accurate financial data. Generally, the key for budgeting expenses that will be in line with your future realization is to base your calculations on the volume you are currently generating, not the volume you hope to achieve. An JANUARY 2020
initial step may be a review of your accounts, ensuring they are all meaningful and descriptive, and, for multi-dealer groups, standardize the accounts across franchises, especially if you are not operating from a centralized location. As a financial and business practice, make sure you are distributing operational reports appropriately. Information should only be included in your monthly reports if it is current and relevant, and documents should reach anyone on your team who needs the data to improve your business operations. In turn, you are streamlining the compilation process for your historical data needed for budgeting and forecasting. Build your 2020 forecast around the anticipated volume for new vehicle sales and make a comprehensive, effective plan before the weather rolls in. As your dealership prepares a 2020 forecast, consider how many used cars you expect to sell, and how much is anticipated for F&I income. And what about parts and service? In leaner years, it may be worth looking into beefing up your service and parts capacity. Get customers into your service department now, and build the rapport that keeps them coming back. You want your name remembered when your clients are ready to buy. Variable Considerations Fixed costs are not likely to change by a significant amount, but variable costs depend on production output. While planning and creating your forecast, strategic thinking in a number of key areas can help your dealership stay on track for a profitable year. Staffing Levels: Are there levels of staff that are not essential to your dealerships profitability and function? Restructuring may be a needed course. Take a look at the sales contributions per department. How are your new and used teams performing, and is service hand-off executed effectively? You also want to ensure you are attracting and retaining top talent. Ensuring your employees are properly
Massachusetts Auto Dealer www.msada.org
motivated and incentivized only increases your operations and profitability. Facility Needs: Once you establish which areas you expect to thrive in the coming years, take a look at your facility needs. Are there areas where expansion may be needed to reach your front-end or back-end demands while increasing your profitability? Inventory Stocking & Ordering: Look at how you are managing frozen capital. Set new and used inventory days’ supply goals and ensure your inventory managers are set up to effectively buy and sell at auctions. In assessing your needs for the coming year, you may find you need a different or updated plan for placing orders with the manufacturer. Do not forget to review your website, too. Is inventory presented in the best way to ensure it sells? Lead Generation & Advertising: It is essential for your team to receive effective training for lead generation. A business development center (BDC) may be in order for the coming year, separating your on-site sales personnel from the online lead process. At a minimum, you should review your customer relationship management system (CRM). Are you maximizing its potential? Your dealership can find sales opportunities in properly mining your customer database. Should you plan on additional training in the new year to ensure you are maximizing the investment you’ve already made? And take a look at your advertising strategies. Perhaps advertising should focus more on parts and service in the coming year. t Barton Haag joined Albin, Randall & Bennett in 1996 and has been a principal with the firm since 2005. His career focus is primarily in providing financial accounting, income tax planning, and business advisory services for clients in the automotive and motorcycle dealership industries and for closely held businesses, many of which are family owned.
LEGAL
MSADA
By Joseph W. Ambash and Jeffrey A. Fritz
Discrimination, Harassment, and Retaliation Refresher Anyone else tired of Sleepy’s articles? We are, too; so, this article has nothing to do with Sleepy’s ... go forward, anyway. This article is back to basics: a refresher on the anti-discrimination, anti-harassment, and anti-retaliation laws that apply to your dealership. It is imperative that you and your managers are familiar with the laws and know how to govern yourselves in accordance with them. Discrimination. The federal laws generally governing discrimination and harassment are Title VII of the Civil Rights Act, the Age Discrimination in Employment Act, and the Americans With Disabilities Act. The Massachusetts counterpart is known as Chapter 151B. Both prohibit employers from taking adverse employment actions—such as termination, demotion, suspension, and reductions in pay—against employees based on certain protected classes, such as race, gender, sex, sexual orientation, national origin, age, physical and/or mental disability, and the like. In many instances, the trickier cases are those in which an employee’s protected status results in him or her being unable to do his or her job, such as in the case of disability or pregnancy. In many instances, the law requires employers to tolerate some absences from work and/or inability to perform non-essential functions as reasonable accommodations for such employees. Employers are generally liable for the discriminatory actions of their managers. Accordingly, choose your managers wisely and consult competent counsel before taking any such adverse employment actions. Harassment. These laws also prohibit certain types of harassment. They are not limited to sexual harassment but also include harassment based on any protected class. There are generally two types of harassment: (1) quid pro quo, and (2) hostile work environment. Anyone paying attention to current politics should know what “quid pro quo” means: this for that. Quid pro quo harassment is generally limited to the sexual harassment context, such as
when a manager conditions work-related benefits (such as a pay raise, promotion, good review, etc.) or the foregoing of work-related detriments (such as a pay decrease, termination, bad review, etc.) on an employee’s provision of sexual favors (or tolerance of a manager’s sexual advances). Hostile work environment harassment is more common (or, at least, more commonly claimed). To prove such a claim, an employee must show: (1) he or she is a member of a protected class; (2) he or she was subjected to unwelcome harassment based on his or her membership in such class; (3) the harassment was sufficiently severe or pervasive so as to alter the conditions of employment and create an abusive work environment; (4) the objectionable conduct was both objectively and subjectively offensive, such that a reasonable person would find it hostile or abusive and she, in fact, perceived it as such; and (5) some basis for employer liability. Application of this test requires an assessment of the totality of the circumstances, including how frequent and severe the discriminatory conduct was; whether it was physically threatening or humiliating, or merely offensive; and whether it unreasonably interfered with an employee’s work performance. Not every rude comment constitutes actionable harassment. As a general rule, the more severe the conduct, such as a sexual assault, the less pervasive it must be to be actionable. The more pervasive it is, the less severe it must be to be actionable. It is very important that you have policies governing discrimination and harassment, and that those policies encourage employees to come forward with any complaints and provide avenues for them to do so. It is equally important that if and when such reports are made, you promptly and thoroughly investigate them, and issue prompt and appropriate discipline, if warranted, commensurate to the conduct you ultimately conclude, based on a reasonable assessment of the evidence adduced, occurred. Such action can significantly reduce the
www.msada.org
risk of liability when the harasser is a coworker of the complaining employee. As noted above, however, under Massachusetts law, employers are generally liable for any illegal harassment committed by their managers. Retaliation. When an employee makes a complaint, in good faith, about his or her belief that illegal discrimination and/or harassment, among other things, occurred, he or she has engaged in protected activity. In other words, the anti-discrimination and anti-harassment laws prohibit employers from taking any adverse action against, or harassing, employees, because they engaged in such activity. Retaliation claims can be the trickiest to defend, because they frequently come down to timing. Retaliation claims are probably the most abused claims by employees seeking to make themselves less attractive candidates for termination. Accordingly, if you intend to terminate an employee who recently complained about discrimination or harassment, you should consult competent counsel on strategies for reducing risk of a claim. Training Is Key. In a very real sense, your managers are you. You are generally responsible for their conduct and, accordingly, making sure they understand their obligations under these laws is absolutely essential to reducing risk for your dealership. 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.
Massachusetts Auto Dealer
JANUARY 2020
33
34 DECEMBER 2019
Patrick Manzi
NADA Senior Economist
Boyi Xu
Economist
The year came to a close with new light-vehicle sales of 17.1 million, according to the Automotive News Data Center. This marks the fifth straight year of more than 17 million units sold. 2019 was another solid year for the industry, even though sales were down by 0.7% compared to 2018. Manufacturers helped bolster the sales numbers by significantly increasing incentive spending toward the end of the year. By November, the average incentive per unit topped $4,500, besting the previous record in December 2017. Final incentive data for this December are not yet available, but a forecast from J.D. Power and LMC Automotive predicts incentive spending will again set a new record and top $4,600 per unit, an increase of $300 per unit compared to December 2018.
JANUARY 2020
Massachusetts Auto Dealer www.msada.org
The shift to crossovers and pickups continued in 2019. Light trucks represented 72.1% of all new light-vehicle sales, an increase of 2.9 percentage points compared to 2018. We expect light-truck sales will rise further and account for nearly 75% of new light-vehicle sales by the end of 2020. We also expect other economic trends to continue, including low and stable interest rates, a robust jobs market and strong consumer spending. Despite these solid fundamentals, there are two factors that will help siphon off more buyers into the used-vehicle market: affordability issues with new vehicles and the high level of used-vehicle inventory. Our forecast is for new-vehicle sales to again fall by 1%-2% to 16.8 million units in 2020.
MSADA
NADA MARKET BEAT
JANUARY 2016
www.msada.org
Massachusetts Auto Dealer
JANUARY 2020
35
36
TRUCK CORNER
MSADA MSADA
The Year in Review By Jodie Teuton Chairwoman, American Truck Dealers
JANUARY 2020
ATD had a tremendous 2019—a year full of challenges and achievements—and we could not have done it without our passionate and hard-working dealers across the nation. Truck dealers had the second-best sales year of all time, with medium-duty sales reaching 250,744 and heavy-duty sales reaching 276,348. In fact, class 8 trucks had their best sales year since 2006, and manufacturers struggled to keep up with customer demand. In 2019, our total market was up 8 percent compared to 2018, but we have to brace for the headwinds in this coming year. After we saw solid sales gains for the past two years, 2020 is likely to bring a slow-down in the commercial vehicle market. ATD projections show that both medium- and heavy-duty sales may decline this year, and we will then see an uptick in 2020 and beyond. Two things are for sure: Our dealer model remains strong, and at the heart of our longevity are passionate and hard-working men and women who are ready to serve customers. I am especially proud of the amazing strides we have made toward the advancement of ATD and the benefit of the commercial truck industry as a whole. We hit the ground running last January with a newly built coalition that aims to repeal the onerous federal excise tax, which adds up to $20,000 to the average price of a new truck and delays fleet turnover. This has been an ongoing battle, but last year we saw the industry fight together. ATD is proud to be part of the Modernize the Truck Fleet (MTF) Coalition, which consists of dealers, manufacturers, and industry partners. As we move forward and continue our efforts, we will continue seeking bipartisan legislation that ends the FET and know that we have strong allies by our side. We also came together to tackle the workforce shortage, and we have been working especially hard to promote technician careers in our dealerships. There is no time to waste when it comes to filling the thousands of diesel technician positions that are open and waiting. We have reached a crisis point, and ATD and NADA have led the charge with the Foundation’s workforce initiative, announced at last year’s Show. ATD has been working with our OEMs, and we have been targeting training centers to find and recruit future employees.
Massachusetts Auto Dealer www.msada.org
Our workforce website is unique and features videos of real people with excellent careers in our business. I am proud to say that our fundraising has been successful, and we are grateful to receive several sponsors including from truck OEMs like PACCAR, Isuzu, and Ford. Finally, I encourage all dealer members to keep putting in a day’s hard work, because it makes all the difference in our industry. Make your voices heard by participating in the dealership attitude survey that we revamped last fall so that it is more user-friendly and intuitive for participants. The results of the survey are how we advocate on your behalf with the OEMs and suppliers. Take advantage of our educational resources like the ATD Academy, which proudly produces new graduates every year—men and women who are better equipped to tackle the challenges of the future. And, as always, continue building relationships with members of Congress and host them at your dealerships if you can. That is exactly what Bob Nuss, president of Nuss Truck & Equipment in Burnsville, Minnesota, did when he hosted President Donald Trump and senior White House advisors for a roundtable discussion last April. I was also proud to meet with White House staff last summer to discuss economic issues that are affecting our businesses. Truck dealers will undoubtedly see a wave of technological change and new mandates so we must have a seat at the table before these decisions are handed down from the nation’s capital. On behalf of ATD, thank you for a memorable time as your Chairwoman, and thank you for a wonderful and successful 2019. I look forward to seeing you at the 2020 Show in Las Vegas. Let’s make the most out of this year! t Jodie Teuton is vice president of Kenworth of Louisiana, a full-service dealership with locations in Baton Rouge, Houma, Lafayette, Lake Charles, Monroe, New Orleans, and Shreveport; full-service Hino dealerships in Baton Rouge and Monroe; and Southland Truck Leasing at all dealership locations. ATD, a division of the National Automobile Dealers Association, represents more than 1,800 heavy- and medium-duty truck dealerships.
NADA Update
By Scott Dube
Show Season Approaches Scott Dube, President of Bill Dube Hyundai and MSADA Immediate Past President, represents NADA’s Massachusetts members on the NADA Board of Directors. He can be reached at scott@dubecars.com. As we head to press, we are in final preparations for the NADA Show in Las Vegas, which promises to be our biggest and best yet. It will be fantastic to see our own Ray Ciccolo honored as our TIME Dealer of the Year nominee. Ray has a long history advocating with NADA as well as a myriad of philanthropic endeavors here at home in Boston and internationally. It will be wonderful to see him in the spotlight there again. As we charge into 2020, you may have heard this is an election year! Be sure to exercise your rights as a citizen and speak out on behalf of your business to your elected representatives soon. Do not wait until we are in the throes of election season! As always, reach out if you have questions about who to speak to, or what to say.
to all senators urging their support of the bill. Gilchrist underscored the importance of a favorable trading relationship with Mexico and Canada to the American automotive industry and to the U.S. economy as a whole.
NADA Issues 2019 Sales Analysis With the end of 2019, NADA issued an analysis of U.S. auto sales and the economy. “All in all, the year ended strong with 17.1 million units,” said NADA chief economist Patrick Manzi. “In December 2019, we saw a continuation of many of the trends we have seen throughout the year.” December 2019 trends include efforts by OEMs to bolster sales with elevated incentive spending, a continued shift to crossovers and pickups, and an increase in consumers choosing used vehicles or leased vehicles in light of affordability concerns. In 2019, light trucks continued to siphon off market share from the car segment. As of December 2019, light trucks represented 72.1 percent of all new light-vehicle sales – an increase of 2.9 percentage points compared to 2018. By the end of 2020, NADA expects the light truck segment to gain market share – topping 75 percent, compared to an anticipated car segment market share of 25 percent. “As affordability remains a challenge, more consumers chose used vehicles in 2019,” added Manzi. “New cars are getting too expensive for many consumers. Even consumers with great credit or the ability to buy new are instead choosing a used vehicle.” With the combination of affordability concerns and high used-vehicle inventories, the used vehicle market continues to pull new vehicle customers away from the new-vehicle market. In 2020, NADA anticipates the used-vehicle sales of 39.5 million units – a flat market compared to 2019. Going into 2020, NADA anticipates new-vehicle sales of 16.8 million units – a 1 to 2 percent decrease from 2019. “Consumers are feeling confident in the economy. Interest rates are low. Unemployment is low,” said Manzi. “In the U.S. economy, things look really good and I am confident we will have another solid year in 2020.”
“Be sure to exercise your rights as a citizen and speak out on behalf of your business to your elected representatives soon.”
NADA Applauds USMCA Passage NADA Chairman Charlie Gilchrist released the following statement in response to the U.S. Senate’s passage of H.R. 5430, a bill to implement the U.S.-Mexico-Canada Agreement (USMCA): “The Senate vote to approve the USCMA is a big win for America’s new-car and truck dealers and our customers. USCMA will reduce the threat of additional, broad-based tariffs on vehicles and parts produced in North America. Approval of USMCA will preserve the global competitiveness of the U.S. automotive industry and enable dealers to continue providing affordable vehicle options for American consumers while strengthening our economic ties to Mexico and Canada.” In anticipation of the Senate’s vote, Gilchrist sent a letter
www.msada.org
Massachusetts Auto Dealer
JANUARY 2020
37
38
NADA Update NADA Will Help You Make Session Picks Dealers and their management teams will learn the latest strategies and emerging trends in the auto industry at this year’s NADA Show education sessions. NADA Academy instructors, as well as top industry specialists, will teach real solutions for your dealership to build the success your business needs, both now and in the years to come. But with more than 100 education sessions taking place, how can you know which sessions are right for you and your team? At NADA, we understand that each person has their own
MSADA Thayer, dealer and owner of Quality Mazda in Albuquerque, New Mexico. Note this is a separate, ticketed event and is not included with your NADA Show 2020 registration. The cost of attending is $75 for dealers and dealership employees/$125 for expo vendors. Add the Women Driving Auto Retail Brunch to your NADA Show 2020 registration. Cannot make it to the brunch and panel? You can still share your own story by entering our Women Driving Auto Retail video contest for a chance to win prizes. Learn more
“Finding ways to assist others is a hallmark of the automotive industry. That is why the Canine Companion cause of partnering trained service animals with persons who need assistance has always been dear to NADA.” learning style. That is why our education sessions are offered in different formats. Whether you prefer a traditional classroom/lecture setting for workshops, or you learn best in a collaborative, round-table discussion environment, there is something for every type of attendee at NADA Show. Check out nada.org to learn more about each type of learning session offered at this year’s show and how to navigate the topics to get the most out of your weekend of learning and networking.
Join Us for a Women’s Brunch Join NADA for a networking and education event to spark the entry of women executives and professionals in the automotive industry. As part of NADA Show 2020 and sponsored by Ally, you will get to share ideas and learn from the leaders that are creating opportunities, driving business and changing the future of automotive. Empowering women in the auto industry means working together, so please note that men are welcome to attend as well, to share, collaborate in, and support this important initiative. This panel discussion, held at noon on February 16 at The Encore, will feature insights from leaders paving the way for more women to join the automotive retail industry. Sherry Schultz, chief human resource officer for Walser Automotive Group Chief in Minneapolis, Minnesota, and Evelyn Chatel, general manager at Bean Auto Group in Miami, Florida, will share how they have each made strides in hiring and retaining women in their respective dealerships. They will also share best practices and tools to help dealerships across the country do the same. The session will be moderated by NADA board member Annette DiLorenzo JANUARY 2020
and enter today at nada.org. NADA Show 2020 takes place February 14-17. We cannot wait to connect with you in Las Vegas!
Canine Companions to Feature at NADA Charity Auction Do not miss this special charity auction to benefit the NADA Foundation’s Frank E. McCarthy Memorial Program, which supports Canine Companions for Independence (CCI). Founded in 1975, CCI is a non-profit organization that enhances the lives of people with disabilities by providing highly trained assistance dogs and ongoing support to ensure quality partnerships for adults, children, veterans, and professionals. As Annette Sykora, chairman of the NADA Foundation, pointed out at last year’s auction, “Finding ways to assist others is a hallmark of the automotive industry. That is why the Canine Companion cause of partnering trained service animals with persons who need assistance has always been dear to NADA.” A dog may be man’s best friend, but for wounded veterans and children suffering from disabilities, a highly trained service dog can mean having support, security, and a measure of independence. Head to the NADA Expo floor on Sunday, February 16, at 11 am, at KAR Global booth #3427C in the Central Expo Hall. CCI graduate Jay C. Huston and service dog Hurley along with other volunteers and dogs in training will be in attendance at this special event.
Massachusetts Auto Dealer www.msada.org
t
MSADA
31