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

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








December 2017 • Vol. 29 No. 12

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

Bowing Out, Again

r a Ye


w e i v Re

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 Jean Fabrizio Director of Administration Peter Brennan, Esq. Staff Attorney Jean Harris Administrative Assistant/ Membership Coordinator Auto Dealer MAgazine Robert O’Koniewski, Esq. Executive Editor Tom Nash Editorial Coordinator Subscriptions provided annually to Massachusetts member dealers. All address changes should be submitted to MSADA by e-mail: Postmaster: Send address change to: One McKinley Square, Sixth Floor Boston, MA 02109



4 From the President: Looking Ahead to 2018 5 ASSOCIATE MEMBER DIRECTORY 6 THE ROUNDUP: Staying Excited into 2018 10 legislative scorecard 11 TROUBLESHOOTNG: Trump’s Regulatory Reform Takes Shape 12 AUTO OUTLOOK 16 ACCOUNTING: Business Office Consolidation 17 DRIVE CLEAN: Using Survey Data Helps Dealerships Succeed 18 Cover Story: Bowing Out, Again


Ad Directory Bellavia Blatt & Crossett, P.C. 23 Blum Shapiro 25 Boston Herald 36 Channel Building Company 25 Ethos Group 2 Lynnway Auto Auction 27 O’Connor & Drew, P.C. 35 Southern Auto Auction 22

24 28 29 30 33

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

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.

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SOUND OFF: New England Energy Market Winter Update NEWS From Around the Horn YEAR IN REVIEW LEGAL: These Laws They Are-A-Changin’ TRUCK CORNER: A Holiday Message nada Market Beat nada update: Rounding Out the Year


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Massachusetts Auto Dealer decEMBER 2017


From the President


Looking Ahead to 2018 By Chris Connolly, MSADA President With 2017 now in the record books, after we make some well-earned time for family and friends around a holiday meal, we should also find time to reflect on the challenges and successes of the past year. While 2017 brought changes to the Executive Branch, and a noticeably softer approach on the regulatory front in many areas, by no means has the overall picture become rosy. MSADA is here to protect the interests of our member dealers on a small scale and at an industry-wide level. As you have seen in these pages throughout the past year, Beacon Hill and Washington are always bouncing new regulations back-and-forth that could affect our businesses. When our industry does not chime in — in numbers — we lose out to those who shout louder. MSADA has also taken time in 2017 to celebrate our successes as dealers, as you will see in our Year in Review. We honored Gary Johnson as our TIME Dealer of the Year candidate at the 100th anniversary NADA Convention in New Orleans, and we have concluded the year celebrating the career of dealer legend Ira Rosenberg, retiring at 80 for the second time. On a personal level, looking back on this year as MSADA President, I feel extremely fortunate to have this opportunity to serve our dealer community. We have a dedicated Board of Directors who put in tireless hours working to advocate for the dealer community, and they are always looking to do more. The same can be said for our MSADA office, where Executive Vice President Robert O’Koniewski is constantly looking to improve the Association’s level of service to its members. It has been a privilege working with them in this new role, and I look forward to what is coming down the pike. As always, as we continue to work for you, we continue to rely on your help, as well. Hopefully, when you see the stakes we are fighting against, you will think about how you can contribute to our efforts in the next year. I am always willing to help a dealer figure out what makes sense for him or her should there be any questions. I would be more than happy to speak with you at our MSADA New England International Auto Show Charity Gala and Dealer Summit on January 12. See Bob’s column on page 6 for more details on the events that day, and please contact Jean Fabrizio at (617) 451-1051 or jfabrizio@msada if you have any questions about registering for the event or booking a hotel room from our block. Before that event comes, please enjoy time with your family over these holidays. They are, after all, why we do what we do every day. On behalf of the MSADA family, I’d like to wish you all a Happy New Year. See you on January 12! t


Massachusetts Auto Dealer

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 [Open]

Franklin County

Jay Dillon, Dillon Chevrolet

Hampden County

Jeb Balise, Balise Auto Group

Hampshire County

Bryan Burke, Burke Chevrolet

Middlesex County

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

Norfolk County

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

Plymouth County

Christine Alicandro, Marty’s Buick GMC Isuzu

Suffolk County

Robert Boch, Expressway Toyota

Worcester County

Steven Sewell, Westboro Mitsubishi Steve Salvadore, Salvadore Auto

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

Immediate Past President Scott Dube, Bill Dube Hyundai

NADA Director

Don Sudbay, Jr., Sudbay Motors


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

Associate Members MSADA A ssociate M ember D irectory ACV Auctions Will Morris (860) 670-7867 ADESA Jack Neshe (508) 626-7000 Albin, Randall & Bennett Barton D. Haag (207) 772-1981 American Fidelity Assurance Co. Dan Clements (616) 450-1871 American Tire Distributors Pamela LaFleur (774) 307-0707 Armatus Dealer Uplift Joe Jankowski (410) 391-5701 AutoAlert Jessica Gates (816) 506-0515 Auto Auction of New England Steven DeLuca (603) 437-5700 Auto/Mate Dealership Systems Troy Potter (877) 340-2677 Bank of America Merrill Lynch Dan Duda and Nancy Price (781) 534-8543 Bellavia Blatt & Crossett, PC Leonard A. Bellavia, Esq (516) 873-3000 Blum Shapiro John D. Spatcher (860) 561-4000 BMO Harris Bank Chris Peck (508) 314-1283 Boston Globe Mary Kelly and Tom Drislane (617) 929-8373 Broadway Equipment Company Fred Bauer (860) 798-5869 Burns & Levinson LLP Paul Marshall Harris (617) 345-3854 C-4 Analytics LLC Rob Stoesser (617) 250-8888 Capital Automotive Real Estate Services Willie Beck (703) 394-1323 David Solar (954) 908-7122 CDK Global Chris Wong (847) 407-3187 Construction Management & Builders, Inc. Nicole Mitsakis (781) 246-9400 Cox Automotive Ernest Lattimer (516) 547-2242 CVR John Alviggi (267) 419-3261 Dealer Creative Mike Otis (315) 382-3675 Dealerdocx Brad Bass (978) 766-9000 Dealermine Inc. Jane Webb (800) 304-3341 DealerSocket Shelly Del Rosario (949) 900-0300 Downey & Company Paul McGovern (781) 849-3100

Eastern Bank David Sawyer (617) 897-1125 EasyCare New England Greg Gomer (617) 967-0303 Ethos Group, Inc. Drew Spring (617) 694-9761 F & I Resources Jason Bayko (508) 624-4344 Federated Insurance Matt Johnson (606) 923-6350 First Citizens Federal Credit Union Joe Ender (508) 979-4728 Fisher Phillips LLP John Donovan (404) 240-4236 Joe Ambash (617) 532-9320 Gatehouse Auto Jay Pelland (508) 626-4334 Gulf State Financial Services Tom Foster (832) 628-1916 GW Marketing Services Gordon Wisbach (857) 404-0226 Harbor First Ron Scolamiero, Michael Scolamiero (617) 500-4080 Hireology Kevin Baumgart (773) 220-6035 Huntington National Bank John J. Marchand (781) 326-0823 Independent Power Systems Mariana Seabra/Ryan Ferrero (978) 998-4079 Todd Stratford, (617) 777-0365 JM&A Group Jose Ruiz (617) 259-0527 John W. Furrh Associates Inc. Kristin Perkins (508) 824-4939 Key Bank Mark Flibotte (617) 385-6232 KPA Tim Whelan (303) 802-3019 Leader Auto Resources, Inc. Curt Murray (978) 201-4797 Lynnway Auto Auction Jim Lamb (781) 596-8500 M & T Bank John Federici (508) 699-3576 Management Developers, Inc. Dale Boch (617) 312-2100 Micorp Dealer Services Frank Salkovitz (508) 832-9816 Mid-State Insurance Agency James Pietro (508) 791-5566 Mintz Levin Kurt Steinkrauss (617) 542-6000 Murtha Cullina Thomas Vangel (617) 457-4000

Nancy Phillips Associates, Inc. Nancy Phillips (603) 658-0004 Northeast Dealer Services Jim Schaffer (781) 255-6399 O’Connor & Drew, P.C. Kevin Carnes (617) 471-1120 Performance Management Group, Inc. Mark Puccio (508) 393-1400 PreOwned Auto Logistics Anthony Parente (877) 542-1955 R.L. Tennant Insurance Agency, Inc. Walter F. Tennant (617) 969-1300 Reflex Lighting Daryl Swanson (617) 269-4510 Resources Management Group J. Gregory Hoffman (800) 761-4546 Reynolds & Reynolds Mike O’Connor (860) 462-7958 Robinson Donovan Madden & Barry, P.C. James F. Martin, Esq. (413) 732-2301 Samet & Company John J. Czyzewski (617) 731-1222 Santander Bank Richard Anderson (401) 432-0749 Schlossberg & Associates, LLC Michael O’Neil, Esq. (781) 848-5028 Sentry Insurance Company Eric Stiles (715) 346-7096 Shepherd & Goldstein CPA Ron Masiello (508) 757-3311 Silverman Advisors, PC Scott Silverman (781) 591-2886 Southern Auto Auction Tom Munson (860) 292-7500 SPIFFIT Sean Ugrin (303) 862-8655 Sprague Energy Claude Peyrot (603) 430-7254 SunPower Christie McCarthy, (408) 457-2357 SunTrust Bank Michael Walsh (617) 345-6567 Target Dealer Services Andrew Boli (508) 564-5050 TD Auto Finance Marc Gerhart (781) 697-1525 TrueCar Pat Watson (803) 360-6094 US Bank Vincent Gaglia (716) 649-0581 Wells Fargo Dealer Services Stephen Janetz (215) 986-8498 Zurich American Insurance Company Steven Megee (774) 210-0092

Massachusetts Auto Dealer




The Roundup

Staying Excited into 2018 By Robert O’Koniewski, Esq. MSADA Executive Vice President Follow us on Twitter • @MassAutoDealers

This year certainly has been an exciting one for our industry and our country. With the results of the November 2016 election, in which we would see a Republican controlled House and Senate to begin this year and the swearing in of businessman Donald Trump on January 20 as President, the Obama and Democrat regulatory and legislative war on business and the private sector would come to an end. Elections certainly do have consequences, and nothing speaks to this more than the Trump administration’s commitment to eliminating regulations designed to retard economic growth and manipulate business operations adversely. Peter Brennan’s Troubleshooting column on page 11 details these efforts. And days away from Christmas, Congress has sent to the President’s desk a present that taxpayers and businesses have been seeking for years, true relief designed to unleash the economy’s growth potential and reduce government’s reach into and control of taxpayers’ wallets and purses. On top of all this, we are excited for our upcoming auto show in which our dealers’ franchisor factories will be rolling out an impressive array of vehicles available in the coming months. Finally, we want to thank our member dealers and our industry partners who support their association with their dues, their political activism, and commitment to improving the industry in Massachusetts and nationally. Without this support your association would not be able to put on the programs that we do and provide value for your membership. DECEMBER 2017

Massachusetts Auto Dealer

2018 Auto Show, Dealer Summit & Charity Gala

As 2017 winds down, your association is hard at work preparing for our main events that kick off the year – our Sixty-First annual New England International Auto Show, running January 11-15, 2018, at the Boston Convention and Exposition Center, and two events held on Friday, January 12, we have built into our show – the Dealer Summit, followed by our charity gala and casino night party. Dealers, their families, and key employees are invited to attend our two events on January 12. The Twenty-First Annual Auto Show Charity Gala will be held at the BCEC from 5:00 p.m. to 10:00 p.m. The Gala benefits our Charitable Foundation’s Automotive Technician Scholarship Program. Over the years we have raised in excess of $1 million for student scholarships. Prior to the Charity Gala we will conduct the Dealer Summit at the BCEC from Noon to 5:00 p.m., at which we will have several speakers discuss on-going events in our industry: • Don Reed, DealerPro CEO – “Making a Case for Change in Fixed Ops” • David Pyle, Senior VP, Cox Automotive – “The (Near) Future of the Auto Industry: Five Key Questions Dealers Are Faced With Today” • Kevin Baumgart, Hireology – “The Best Team Wins” • Mike Otis, Dealer Creative – “Don’t Click Skip” • Mike Hammond, O’Connor & Drew – Cybersecurity regulatory update • And more… Members can use the order forms that have been

MSADA snail mailed and emailed to you over the last two months. Dealers and their key staff who attend the Dealer Summit will receive at registration two free Charity Gala tickets for each meeting attendee. Additional Charity Gala tickets can be purchased in advance for $50 each. (They will be $100 each at the door.) Further, dealer principals who register can reserve a complimentary hotel room for the Renaissance Waterfront Hotel for Friday evening. Do not delay – sign up today!

Tax Reform - Finally As we go to press, the House and Senate came together to pass, strictly on party line voting, a sweeping reform of the U.S. tax code, which last occurred over thirty years ago in 1986 under President Ronald Reagan. Passage of “The Tax Cuts and Jobs Act” gave President Trump his first major legislative victory eleven months into his term. The president is expected to sign the tax reforms into law before Christmas. The legislation included a number of provisions important to franchised dealers, including allowing for 100% deductibility of interest expenses incurred for floorplan related debt and maintaining the $7,500 tax credit for the purchase of an electric vehicle. The following is a general summary of some of the bill’s provisions (provided courtesy of MSADA associate member Albin, Randall & Bennett). Certain provisions, such as the deduction for flowthrough entity income, the limitation on business losses, and business interest expense limitations, are new and will require further guidance and analysis.

INDIVIDUALS: TAX RATES: The current seven brackets (10%, 15%, 25%, 28%, 33%, 35%, and 39.6%) will be changed to 10%, 12%, 22%, 24%, 32%, 35%, and 37%. For married taxpayers filing jointly, the 12% bracket would begin at taxable income of $19,050, 22% at $77,400, 24% at $165,000, 32% at $315,000, 35% at $400,000, and 37% at $600,000. For unmarried individuals

and married filing separately, the bracket thresholds will be half the thresholds for married taxpayers filing jointly, except the 37% bracket for unmarried individuals will begin at $500,000 instead of half of the joint amount, or $300,000. MAXIMUM RATE ON CERTAIN BUSINESS INCOME OF INDIVIDUALS: Certain flow-through entity income will be treated as “business income” potentially eligible for a deduction equal to 20% of the qualified income. The deduction is subject to limitations based on the wages paid by and the original cost basis of qualified property placed in service by the qualified business. In general, flow-through income in excess of certain amounts from certain personal services businesses will not be eligible for the 20% deduction. The personal services businesses include the fields of health, law, consulting, athletics, financial services, brokerage services, investing and investment management trading, performing arts, or any trade or business where the principal asset is the reputation or skill of an individual. The deduction is not allowed in computing adjusted gross income but is allowed in computing taxable income, whether or not the taxpayer itemizes deductions. Further guidance and analysis will be required to determine how this provision will be applied. The bill creates new Code Section 461(l) in order to limit the amount of “excess business losses” an individual may deduct in a particular year. Excess business losses are carried forward to future years. Further guidance and analysis will be required to determine how this provision will be applied. ENHANCED STANDARD DEDUCTION: Under the current law, an individual reduces adjusted gross income by any personal exemption deduction and either the applicable standard deduction or itemized deductions to determine taxable income. Under the bill, the standard deduction will be increased to $24,000 for joint filers and $12,000 for individual filers. Single filers with at least one qualifying child would claim a standard deduction

of $18,000. The personal exemption will be eliminated. DEDUCTIONS: The bill preserves deductions for charitable contributions, medical expenses, and teachers’ classroom expenses, but makes significant changes to some popular individual deductions. • Most notably, the bill limits annual itemized deductions for all nonbusiness state and local tax deductions, including property taxes, to $10,000. In order to stop any attempt to maximize state and local income tax deductions in 2017, the bill disallows a 2017 deduction for any prepayment of state and local income tax imposed for a year after 2017. • The mortgage interest deduction will be retained; however, for home mortgage debt incurred after December 15, 2017, only interest on up to $750,000 of acquisition indebtedness will be deductible, a reduction from the current debt limit of $1.1 million. Mortgage interest on second homes will continue to be deductible, within the applicable debt limit amount; however, no deduction will be allowed for home equity debt. • The bill repeals all miscellaneous itemized deductions subject to the 2% limit under current law. Moving expenses (except for some military service related moves) will no longer be deductible. Casualty losses will only be deductible if attributable to a Presidential declaration of disaster. The so-called Pease Limitation, which reduces itemized deductions for higher income individuals, will be repealed. • Effective for divorce or separation instruments executed after December 31, 2018, the bill repeals the deduction for alimony payments and their inclusion in the recipient’s income. CHILD TAX CREDIT: The child tax credit will be increased to $2,000, and a credit of $500 will be allowed for qualifying dependents other than qualifying children. These credits will generally phase out to zero for higher income taxpayers. HIGHER EDUCATION INCENTIVES: Unlike the House version of the

Massachusetts Auto Dealer DECEMBER 2017



The Roundup bill, the final bill does not overhaul higher education tax credits available under current law, and preserves the student loan interest deduction, the U.S. Savings Bond interest exclusion, the exclusion for employer-provided education assistance programs, and the exclusion for graduate student tuition waivers; however, the “above the line” tuition and fees deduction will be repealed. ALTERNATIVE MINIMUM TAX (AMT): The AMT for individuals is retained with higher AMT exemption amounts (and phase-out of the exemption starting at much higher income levels) than under current law. RETIREMENT PLANS: The bill disallows a recharacterization of a Roth IRA into a Traditional IRA in order to unwind a Roth conversion; however, recharacterization is still permitted with respect to other Roth IRA contributions. HEALTH INSURANCE: The bill repeals the Affordable Care Act’s individual responsibility requirement, making the payment amount zero, for penalties assessed after 2018. ESTATE AND GIFT TAX: The bill will double the lifetime gift and estate tax exemption after 2017, with no provisions for a later repeal of the tax or a reduction in the rate of tax.

BUSINESSES: FLAT “C CORPORATION” INCOME TAX RATE: The bill will replace the current four tier system with a single 21% tax rate. Personal service corporations will be subject to the same flat 21% tax rate. ALTERNATIVE MINIMUM TAX (AMT): The AMT for corporations will be repealed. INCREASED EXPENSING: The bill will allow 100% expensing of qualified property acquired and placed in service after September 27, 2017, and before January 1, 2023. Unlike the current bonus depreciation provisions, personal property is not required to be “new,” only new to the taxpayer. For the first taxable year ending


after September 27, 2017, the present-law 50% bonus depreciation allowance may be elected instead of the 100% allowance. SECTION 179 EXPENSING: The bill will increase the Section 179 expensing limitation to $1 million for tax years beginning after 2017. The bill expands the definition of eligible property to include (1) tangible personal property used to furnish lodging and (2) qualified real property improvements to existing buildings for roofs, HVAC, and fire alarm and security systems. ACCOUNTING METHODS: The proposal will allow more businesses to use the cash method and completed contract methods of accounting for tax purposes. It will also expand exceptions to the socalled UNICAP rules of Section 263A. NET OPERATING LOSSES (NOLs) & OTHER DEDUCTIONS ELIMINATED OR LIMITED: Effective for losses arising in taxable years after December 31, 2017, the bill eliminates carrybacks of most net operating losses and limits the amount of net operating loss that can be used in a particular year to 80% of taxable income. The bill will allow net operating losses to be carried forward indefinitely. The bill subjects every business, regardless of its form, to a disallowance of a deduction for net interest expense in excess of 30% of the business’s adjusted taxable income. The disallowance will be determined at the entity level. Adjusted taxable income is a business’s taxable income computed without interest expense, interest income, net operating losses, depreciation and amortization. Disallowed amounts will be carried forward indefinitely. Opportunities for members in a flow-through entity to utilize amounts disallowed at the entity level may exist. Businesses with less than $25 million of average gross receipts will be exempt from this interest expense disallowance, as will real property trades or businesses, and interest paid on vehicle floor plan financing. The bill repeals the domestic production activities deduction and generally eliminates deductions for entertainment, amusement, or recreation activities.

Massachusetts Auto Dealer

MSADA LIKE-KIND EXCHANGES: The bill will limit the tax deferral on a like-kind exchange to real estate transactions only. BUSINESS AND ENERGY CREDITS: The bill will modify the credit for rehabilitation of qualified historic buildings. The bill creates a temporary credit in 2018 and 2019 for payments to employees in connection with a qualified written policy allowing for not less than two weeks of annual paid family and medical leave. The bill did not adopt any of the energy credit repeals or modifications proposed in the House version of the bill.

Sen. L’Italien Visits Connolly Acura This month MSADA President Chris Connolly hosted State Sen. Barbara L’Italien (D-Andover) for a visit at his Acura dealership in Framingham. Sen. L’Italien is the Senate chair of the Joint Committee on Consumer Protection and Professional Licensure, which has jurisdiction over a number of motor vehicle related issues, including the Chapter 93B dealer franchise law. She is currently competing in the Democrat primary to be in the final election in November 2018 for the Third Con-

gressional District seat, which Cong. Niki Tsongas (D-Lowell) will be vacating due to retirement. As part of the senator’s visit, Mr. Connolly presented a contribution for her campaign committee from the NADA Political Action Committee (NADAPAC).

Senate President Steps Down Earlier this month scandal shook up the leadership of the state Senate, as Senate President Stan Rosenberg stepped down from his post in the midst of a sex scandal involving his husband. After a ten-hour


caucus on December 4, the Senate accepted Sen. Rosenberg’s resignation and elected as acting president Harriette Chandler (D-Worcester), who is the Senate’s majority leader. She presumably will serve as the acting president of the body until an investigation of the sex scandal is completed by the Senate’s Ethics Committee. It is rumored that the FBI is also looking into the events surrounding the scandal. In the meantime, there are at least four senators lobbying their colleagues for support to be the next president – Sal DiDomenico (D-Everett), Eileen Donoghue (D-Lowell), Linda Dorcena Forry (D-Boston), and Karen Spilka (D-Ashland). Time will tell how much the institutional chaos affects the legislative process in the new year while we all wait to see how the investigation and its after-effects play out.

U.S. Military Lending Act Update A Department of Defense (DOD) interpretation of the Military Lending Act (MLA) issued on December 14 could have severe implications for all dealers who sell or have sold vehicles to members of U.S. armed forces. According to the new interpretation of the MLA, if, as part of a vehicle financing transaction with a military consumer or his or her dependent, a creditor (i) extends financing for a credit-related product or service (such as GAP insurance or credit insurance), or (ii) provides cash out financing, the creditor must comply with the full range of duties and restrictions imposed by the MLA. The interpretation is in effect as of December 14, 2017, and applies to all transactions since October 3, 2016. DOD issued its interpretation without notice or an opportunity to comment. As a result, NADA and other industry trade associations did not have a chance to explain (i) why they believe DOD’s interpretation concerning credit-related products or services is inconsistent with the Military Lending Act, or (ii) how the DOD Interpretation will harm military members and the

dealers and auto lenders who serve them. NADA now recommends that dealers screen all customers through a DOD website or a nationwide Consumer Reporting Agency (CRA) report to determine if the customer has “covered borrower” status under the MLA before offering GAP, Credit Life or Credit Accident and Health products to that customer, and that none of these products should be offered to a customer considered a “covered borrower” under the MLA. It is important to screen every customer through the methods listed below. Not only are active duty service members considered “covered borrowers” under the MLA, but so are their dependents. Many customers may not even know that they have this designation, which is why simply asking the customer about their status is not sufficient to avoid liability under the MLA. A dealer can afford themselves of a legal safe harbor if they (1) run the customer’s name and personal information through the following DOD website to determine the customer’s status before offering the products: home; or (2) use a nationwide Credit Reporting Agency or reseller of the CRA’s reports that provides an indicator or code on the report of all customers with active duty or active duty dependent status. Please note that these safe harbor methods are only effective if the dealer timely creates and maintains a record of the search and the information that was discovered. Any customers that are revealed through the background check to be an active duty service member or dependent should not be offered GAP, Credit Life, or Credit Accident and Health products. Your MSADA has been in regular contact with NADA as they work towards a legislative or regulatory solution to this issue. In the meantime, all dealers and dealership employees should avail themselves of the safe harbor offered by the DOD website or CRA reports. For background and a further discussion of the issue, please see our Bulletin’s #71 and #72.

2018 NADA Dealership Workforce Now Open The 2018 Dealership Workforce Study (DWS) is now open for enrollment. NADA and ATD members that complete a questionnaire and submit their payroll records by April 30, 2018, will receive two complimentary reports and a one-year subscription to the DWS Database and Search Tool. The two complimentary reports are: • Automotive Retail: National & Regional Trends in Compensation, Benefits & Retention, which is the industry’s top resource for helping dealers meet their No. 1 challenge of attracting and retaining productive employees. It contains a clear analysis of employment trends, including national and regional data for 60 light-vehicle and commercial-truck dealership career positions as well as data on pay, benefits and turnover and more; and • Compensation, Benefits and Retention: How Your Dealership Compares, which is an individualized comparative report for each participating dealership. Dealerships that participate in the study will also receive access to the entire online DWS Database and Search Tool, which includes more than 1.6 million payroll records from over 10,000 dealerships. The Search Tool categories include: report type (compensation or tenure), franchise/brand, sales volume, geographic location (national, regional and state), dealership department, and job title. For example, a dealership can compare compensation for all service positions in neighboring states by using the Search Tool. Enroll today at For questions, contact Dorenda Fisher at (703) 556-8583 or email Here’s to Wishing You a Merry Christmas, Happy Chanukah, and a Successful and Healthy New Year!


Massachusetts Auto Dealer DECEMBER 2017



December 2017

Massachusetts Auto Dealer




Trump’s Regulatory Reform Takes Shape By Peter Brennan, Esq.


Staff Attorney Throughout the 2016 presidential campaign, then-candidate Donald Trump made regulatory reform a cornerstone of his message, frequently touting his desire to eliminate unduly burdensome regulations from the federal register. Reducing the regulatory burden on businesses by cutting through regulatory red tape was an easy, if not overly specific, sell on the campaign trail, but, after his winning the election, many were skeptical that President Trump would be able to deliver on such promises. After the election, President Trump put the issue of regulatory reform on the agenda for his first 100 days of office. Days after being sworn in, the president gave some shape to his deregulatory ambitions through Executive Order (EO) 13771, “Reducing Regulation and Controlling Regulatory Costs.” The executive order created a two-for-one requirement, in which two existing regulations would have to be eliminated for every one new regulation created by an agency. In addition to the two-for-one requirement, the executive order created a cap on regulatory costs, stating that any costs associated with new regulations must be offset by the elimination of costs associated with existing regulations, and that the total incremental cost for all regulations, including repealed regulations, must be zero in fiscal year 2017. At the time of its issuance, it was unclear whether the goal of the executive order was only to generate headlines or if the administration would follow through on the order with further action. The two-for-one offset

program, while unique in the United States, had been implemented with various levels of success in other countries and was, therefore, not the impossible reach that some critics claimed. The Trump Administration followed up on EO 13771 with a guidance issued by the Office of Information and Regulatory Affairs (OIRA), which clarified details of the original executive order. Importantly, the guidance exempted regulations that are legislative rules for which compliance with the executive order would be impractical or adverse to the public interest, giving the legislature some wiggle room. The guidance further clarified the military exemption contained in EO 13771 by specifying that any regulation issued to improve national security would be exempt from the two-for-one setoff and the cap on net regulatory cost. The guidance also clarified that agencies were allowed to “bank” cost savings from eliminating regulations for use in future fiscal years. Under EO 13771, the decision on which regulations might ultimately be on the chopping block remained with the individual agencies, leaving some critics concerned that bureaucrats would simply ignore the order and continue with business as usual. To jumpstart the regulatory review process, the Trump Administration issued Executive Order 13777, “Enforcing the Regulatory Reform Agenda,” as a complement of and to further the goals of EO 13771. Under EO 13777, the head of every agency was required to designate an agency official as its Regulatory Reform Officer, with the chosen official tasked with overseeing the “implementation of regulatory reform initiatives and policies to ensure that agencies effectively carry out regulatory reforms.” EO 13777 also established Regulatory Reform Task Forces to evaluate existing regulations and make recommendations on which regulations should be repealed or amended. EO 13777 specified that the regulations that task forces needed to identify were those regulations that inhibited job creation or imposed costs that exceeded

benefits, among other characteristics. Recently, your MSADA was able to see the result of these executive orders in action, when the Small Business Association hosted a roundtable discussion in Boston to seek input from the local small business community on regulations that are harmful to small business that should be reformed or eliminated pursuant to the executive orders. MSADA EVP Robert O’Koniewski presented to a panel of agency officials on the regulatory burden that new car and truck dealers must shoulder every day and noted that the cost of regulatory compliance has been estimated at $250,000 per dealership. On December 14, President Trump, while posing next to a towering stack of federal regulations wrapped in red tape, announced that his administration had so far exceed its promise of eliminating unnecessary regulations through the two-forone requirement and net cost cap. According to the President, the executive orders have been so successful that the net result has been sixty-seven deregulatory actions and only three new regulations, with an estimated lifetime savings of $8.1 billion from the regulations that were eliminated. The Trump Administration also announced plans to continue their deregulatory agenda and to push for even greater regulatory gains in fiscal year 2018. While the savings touted by the Trump Administration and net regulatory scorecard may be hard to calculate, it is clear that the administration is serious about reducing regulatory red tape and eliminating unnecessary bureaucracy, especially regulations seen as detrimental to economic growth. These policies should result in a reduced regulatory burden on dealerships in 2018 and beyond. t If you have questions regarding this or any other issue please contact Robert O’Koniewski, MSADA Executive Vice President, at, or Peter Brennan, MSADA Staff Attorney, at, or by phone at (617) 451-1051.

Massachusetts Auto Dealer december 2017





Massachusetts Auto Dealer


Massachusetts Auto Dealer DECEMBER 2017





Massachusetts Auto Dealer


Massachusetts Auto Dealer DECEMBER 2017





Business Office Consolidation Things to Consider

By Raymond E. Lofstrom O’Connor & Drew

feel more part of a professional financial team. • Reduced Need for Office Space. A centralized office should reduce the office space at the dealerships being consolidated, thereby freeing up space for more productive business.

Potential Issues of Business Office Consolidation The decision to consolidate business office functions for a multi-point dealership is certainly not an easy one to make. Many dealers have consolidated functions successfully; some have elected to keep functions entirely separate; while others have attempted consolidation and have chosen to backtrack and “un-consolidate” things. When considering consolidation, there are many factors that need to be evaluated to achieve the highest cost savings and increased operational efficiency. It is important to note that the cost savings benefit of business office consolidation will vary on a case-by-case basis; however, if executed correctly, the potential savings could be significant.

• Increased Need for Office Space. Although office space may be reduced in some locations, it may be necessary to build or obtain additional office space to accommodate the new consolidated business office. • Potential Data Management System Upgrade. Ensure that all offices are operating on the same data management system. Confirm that your DMS supports business office consolidation. • IT Support. Ensure that your current IT system can handle a consolidated office function. • Hiring of Additional Higher-Level Staff. Evaluate whether it is necessary to add high-level talent to oversee the consolidated office.

Potential Benefits of Business Office Consolidation

Potential Operating Efficiencies of Business Office Consolidation

• Reduction in Staffing. With consolidation, you should expect to be able to reduce your overall staffing levels by merging positions. • Greater Ability to Cross-Train Employees. A centralized office will provide the dealership with the increased ability to Cross-Train employees. Cross-training enables staff to cover for other employees when they are out of the office, eliminating the need to hire temps. • Ability to Attract Accounting Talent. Employees and prospective employees DECEMBER 2017

• Better internal control structure. With a larger office, you will be better able to segregate duties and all functions can be overseen from one location. • Consistent policies and procedures. You will be able to have each store reporting and accounting for items in a consistent manner.

Questions to Ask Yourself When Considering Business Office Consolidation • Who will oversee the business office?

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Do you currently have a group controller/ CFO, and if not, will you need one? • Will dealership employees buy into a centralized business office model? • If the processes at each store are not standardized, who will be charged with instituting the standardized processes that will be used in a consolidated office environment? • Have you visited dealerships that have gone through the business office consolidation process?

The First Steps to Business Office Consolidation • Decide Which Functions Should Be Consolidated. Although the business office will be consolidated, it is necessary to determine to what extent. What functions will remain at the dealership level? If all accounting functions are consolidated, you will still need cashiering function at store level. What additional functions will the cashier perform? • Determine Where the Central Office will be Located and Daily Logistics. How will documents be routed to office? Will you use runners to bring paperwork to central office? Will you scan documents? How will you handle on demand checks? • Standardize Chart of Accounts. You should consider standardizing your chart of accounts so every store is using same chart which will help with standardized reporting. As you can see, there are many factors to consider when deciding whether business office consolidation is the right choice for your dealership. Doing your homework and researching the many facets of business office consolidation will help your dealership to make an informed and educated decision. t

Drive Clean MSADA


Using Survey Data Helps Dealerships Succeed By Emily Wier

MOR-EV Project Manager, Center for Sustainable Energy Dealerships are an incredibly important source of information for car shoppers who are looking to experts to guide their purchase or lease of an electric vehicle (EV). Most dealerships do an excellent job of sharing vital information about EVs, including vehicle performance, the total cost of ownership, home charging, and financial incentives. However, surveys of recent EV adopters who have received incentives from the Massachusetts Offers Rebates for Electric Vehicle (MOR-EV) program identify specific information gaps that survey respondents would like to see dealers include in their sales discussions. The MOR-EV program, overseen by the Executive Office of Energy and Environmental Affairs’ Department of Energy Resources (DOER) and administered statewide by the Center for Sustainable Energy (CSE), has awarded more than 5,880 incentives for a total exceeding $11,820,000 since its inception in June 2014. One notable statistic from the survey we found is that, as more people lease EVs, their experience with the dealership is what makes them more or less likely to lease another EV. This article outlines some best practices and lessons learned through analysis of our survey data, including ideas you can implement at your dealership to help deliver more effective sales pitches.

About EV car shoppers Approximately 83% of MOR-EV survey respondents report that they are firsttime EV consumers, and less than 5% are replacing a hybrid or electric vehicle. To gather information about EVs, about 60%

reviewed manufacturer websites and about 40% visited technology blogs. About 18% of survey respondents attended a ride-anddrive event or vehicle expo, such as those administered by Mass. Drive Clean and Plug-In America. Nearly half of survey respondents said they only visited one dealership as part of their shopping experience; however, for those who visited more than one dealership, one objective was to find more knowledgeable salespeople.

What this means There are three substantial gaps between what survey recipients want to learn from dealers and their actual dealership experience. The largest gap is knowledge about nonfinancial incentives or perks that are available to EV owners, such as free parking, free charging stations, or HOV lane access. For example, MBTA parking lots and garages have free charging stations, although customers still need to pay to park. The second gap is whether a customer’s utility offers specific rates for EV charging at home. Both Eversource and National Grid offer discounted time-ofuse rates during off-peak hours, although these rates are not discounted for EV owners in Massachusetts. Plug In America’s e-Star portal provides utility-specific rate information to dealers. The third knowledge gap is charging away from home, such as at work or public stations. Currently, MassDOT is building out six new charging stations along the MassPike that will supplement investments Electrify America will be making in the region in years to come. If you are unsure of answers about charging, you can point customers to either the U.S. Department of Energy’s Data Center or the Plugshare website. The MOR-EV website also has additional resources to share with your customers.

What dealers can do More than 70% of survey respondents reported that they would like to see an “EV Genius,” or expert specialist, at the dealership who can answer in-depth questions about EV charging requirements and other subjects. Approximately half of the respondents would have liked to have had the option to rent an EV before buying their vehicle, but this is only offered at about 10% of dealerships. A valued service for about 70% of respondents would be to receive dealership assistance with the purchase or installation of home charging stations. More Massachusetts dealerships are investing in EV training to build their skill base in EV sales and further improve the customer experience. For a limited time, dealers in the greater Boston metro area can take advantage of no cost EV incentives and sales best practice training offered as part of the “e-Star” program through a partnership with Plug In America and Massachusetts Clean Cities. Quirk Chevrolet in Braintree, for example, is now a nationally recognized auto dealer for their work with the e-Star program and high volume of EV sales. Visit http:// to learn more. Alongside EV training, another great option for dealerships to increase their visibility in the EV marketplace is to participate in ride-and-drive outreach events. About a third of Mass. Drive Clean rideand-drive participants visited a dealership within six months of a test drive, and 13% purchased an EV. t More of our survey data will be published in future reports that will summarize results from the third year of the MOR-EV program. Look for more information online at

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Bowing Out Again

Legendary New England dealer Ira Rosenberg reflects on six decades in the business as he steps away from Prime Motor Group. By Tom Nash

steering wheel, David says his father has passed along wisdom that will still apply. The foundational idea Ira has maintained over nearly Calling up Ira Rosenberg to talk about retirement, which comes six decades has been the “three-legged stool” of happy customafter the legendary Massachusetts dealer made a second run in the ers, happy embusiness in Maine BOSTON HERALD PHOTO ployees, and the following an atprofit that will tempt to retire a follow. decade ago, means “You need to there is already make sure that the talk of a new venpeople who are doture. Rosenberg, ing the work every who founded day are happy to the Prime Motor be here, and they Group now run feel appreciated, by his son, says respected, and well he is not cut out compensated,” Dafor more than nine vid says. “Because holes of golf a week. if you don’t have Rosenberg, happy, engaged currently back in employees, that Florida after bowcauses issues with ing out of Prime the second foundarecently this year, tion that you have says the company to have: customers is well-positioned who feel valued. to move on withAnd if you have out him. His son engaged employhas partnered with ees and customers GPB Capital in who feel valued, New York to po– Ira Rosenberg you will make a sition Prime for a profit.” driverless car fuMassachusetts Auto Dealer spoke with Rosenberg from his ture. “I’m too old to think about that,” says Ira, who sold his first home in Florida, whose entrepreneurial spirit continues even in car in 1960. “If that world comes, it comes.” his second retirement. No matter what metal is moving in 10 years, or whether it has a

“I’ll never forget that first car — it was like a fishing hook. I was definitely gone. I had to sell cars.”


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MSADA MSADA [Auto Dealer] What first brought you to the car business? [Ira Rosengerg] I was a poor kid from Malden. I quit high school, ran away and joined the Navy during my senior year, during the Korean war. It was a stimulating experience, and truthfully it was the best thing I could have done for myself. I would not recommend it for a lot of people, but for my kind of guy, it was. I hated school, I was poor. It was a good chance for me to get away and remanufacture my life. And it worked. So you jumped in after coming back? I had a chance to go to college, turned that down. I went to work for Porter Chevrolet changing tires in the used car department, in Cambridge. After a few months of changing tires, my hands grew really dirty, and I decided I did not want that anymore. I went to Herb Abramson, the GM at the time. [He put me] in the service department for about three months, until I was ready to commit hara-kari. So I went back to Herb, and he said, “Don’t worry, we’re going to train you to sell cars.” There was an old salesman there by the name of Silvio Santilli, an old Italian guy who could not write in English. On my way into work I had to buy the Telegraph for him, with coffee. Then he would decide what he was going to bet on, and I would go call the bookies. He was a great guy. Harsh, old-fashioned, but he was a great guy. I really loved him. He taught me how to sell. My first car I sold was a 1960 Chevy Impala Coupe, turquoise at the bottom, white at the top. I’ll never forget that first car -- it was like a fishing hook. I was definitely gone. I had to sell cars. I met my wife, and she did not like the opportunities in the car business, so I quit. I went on the road selling all kinds of stuff, advertising, blow torch stuff, everything. I was not good at it, and I didn’t like it. I quit. My wife is pregnant, we have no job, living in Lynn with no money. One day, she’s in the hospital, she says she saw an ad in the

paper that Sea Crest Pontiac is looking for a salesman. I needed the job right away, I had no insurance. I spoke to Tom O’Brien, the GM at the time, who it turns out became one of my best friends. He says, “Well you’re kind of young, we are not sure you can do it.” I went down to the street to Dunkin’ Donuts, had a cup of coffee, came back and said, “You know what, I’m going to get this job.” I sat on the couch in the showroom right outside his office for three full days. Ken Carpi came by. He said, “What do you want?” I said, “I’m looking for a job sir.” He said, “Are you the guy who’s been on this couch for three days?” I sit down at his desk, and he says, “What are you looking for in life?” And I say, “I want your chair.” He says, “Either you’re the wisest prick in the world, or you’re very good.”

Massachusetts Auto Dealer december 2017



BOWING OUT, AGAIN last $140, I started North Shore Auto Brokers in Danvers. And it kept growing. That takes it to about 11-12 years ago. That was the first time you wanted to retire? My wife got sick. I sold out to Group One Auto. I was going to spend my last years down with my wife in Florida. But she was not getting any worse, and was getting a little better. After four years, I said, “Judy, you gotta let me go back to work or give me a lobotomy.” She opted for the lobotomy. I called up Toyota, and they sent me way the hell up there in New Hampshire. Then they said they had a store in Saco. Eventually, I was outselling a lot of Boston dealers. We did pretty good, then I turned the big 8-0. I got sick. I said, “I’m not going to continue.” I sold out to David recently. And then afterwards, he merged with another group out of New York. He is now the President/CEO of 60-some odd

He gave me 30 days, no demo. Then one day, he came in and said, “You’re fired. Didn’t you notice anything? The other salesmen were stealing your customers.” I went down to Dunkin’ Donuts, came back, and said, “Give me one more shot.” I came back the next morning, and in the meeting I said, “That was a nice joke you had, but I have a little baby. Every one you steal from me, I will do three for one.” From then on, no one bothered me, and I became one of the leading salesmen in New England. I was there six or seven years. With my dealerships. I am very proud of him, he has done a great job. I’ve come down to Florida and I’m not doing anything, I’m retired now. Retirement isn’t all it’s supposed to be. It’s OK, I guess, for some people. But I’m not used to it. I’m looking for something small. I read you might be looking to bag groceries? That is what my wife suggested. I started as a kid bagging groceries in Malden. She said, “Maybe you should go back to your roots.” I am looking for a nice small business, a nice small dealership that gives me a place to go and fool around with my marketing. I think I’d enjoy that. I play nine holes once a week. I paint a little bit now, and I play cards once a week. But I need people around me I can kibitz with. That is what I love. t


Massachusetts Auto Dealer


Sound Off

New England Energy Market Winter Update By Claude Peyrot Sprague Energy

The seasonal weather has finally arrived in New England, and with that comes increased travel and tourism into the region, particularly for winter sports and recreation. With days shorter at this time of the year and temperatures dropping, the demand for electricity is strong as we use more electricity for lighting, heating, and even snowmaking. However, the ability to meet the regional electricity demands for these purposes is dependent upon a number of factors, including energy ample infrastructure and fuel to run our power plants. While New England is typically a summer peaking system, winter peak loads can exceed 21,000 megawatts (1 megawatt is said to be enough capacity to power 1,000 homes). Peak electricity demand this winter is forecasted to be 21,197

“The energy market continues to change, and those changes do affect your energy costs.” megawatts based on a temperature of 7°F with an extreme peak forecast of just under 22,000 megawatts if a cold snap occurs. Last winter season, peak electricity demand was 19,647 megawatts, which occurred on December 15, 2016, even before the official start to winter. This was still well below the all-time New England winter system peak of roughly 23,000 megawatts. The good news is that ISO-New England -- the entity that oversees the regional electricity grid -- expects to have the resources necessary to meet the electric generation needs this winter season. However, power system operations could become challenging if demand is higher than projected typically due to a significant cold snap; the region loses a large electric generator; or natural-gas-pipeline constraints limit the availability of fuel to natural-gas-fired electric

power plants. The pipeline infrastructure in place to deliver natural gas in the region has been slow to expand while the demand for natural gas continues to grow for both fuel for heating purposes and for natural-gas-fired electric generation. During extreme weather conditions, the availability of natural gas for electric generation can become limited as the demand for natural gas for heating increases (and heating typically has a priority over electric generation). What can be done to prevent or mitigate the impact of these possible scenarios? ISO-New England has initiated a number of efforts to assist in this regard: • A winter reliability program is in place which provides financial incentives for electric generators to store oil and/ or liquefied natural gas during the winter season enabling them to switch fuels and fire electric generation under certain conditions. • There are demand-side efforts in place that are aimed at reducing demand: passive efforts such as energy efficiency measures reduce demand by making electricity consumption more efficient, and active measures whereby certain qualified businesses are called upon directly to reduce their electric load if needed. • Operational procedures to maintain electric system reliability, which can include a request for voluntary efforts to conserve electricity by businesses and individuals, a more-directed demand response effort (by qualified entities), and importing electricity from outside the New England region. In the near term, the energy situation in New England is in relatively good shape. The energy market, however, continues to change, and those changes do affect your energy costs. Sprague can help you understand and manage your business in a changing energy marketplace. For more information on energy, call (855) 466-2842 or visit t Founded in 1870, Sprague is one of the largest independent suppliers of energy products and services in the Northeast with a network of strategically located petroleum and materials handling terminals throughout the Northeast. Claude Peyrot can be reached at cpeyrot@spragueenergy.

Have an opinion you want to share? Email

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

NEWS the Horn


Frank Hanenberger Nominated for Dealer of the Year Award The nomination of Frank Hanenberger, dealer principal at MetroWest Subaru in Natick, for the 2018 TIME Dealer of the Year award was officially announced this month by TIME. Hanenberger is one of a select group of 47 dealer nominees from across the country who will be honored at the National Automobile Dealers Association’s 2018 NADA Show in Las Vegas, Nevada, on March 23, 2018. The announcement of this year’s nominees was made by Meredith Long, senior vice president and general manager, News, Luxury & Style, TIME, and Tim Russi, president of auto finance for Ally Financial. “We salute this exceptional group of nominees for the 2018 TIME Dealer of the Year award,” Russi said. “These dealers are local pillars of strength, leadership and giving, and Ally is proud to celebrate their stories and recognize them for their commitment to ‘do it right’ in their communities.” In its seventh year as exclusive sponsor, Ally will recognize


dealer nominees and their community efforts by contributing $1,000 to each nominee’s 501(c)3 charity of choice. Nominees will also be recognized on, which highlights the philanthropic contributions and achievements of TIME Dealer of the Year nominees. The TIME Dealer of the Year award is one of the automobile industry’s most prestigious and highly coveted honors. Recipients are among the nation’s most successful auto dealers who also demonstrate a long-standing commitment to community service. Hanenberger, 47, was chosen to represent MSADA in the national competition – one of only 47 auto dealers from more than 16,500 nationwide – nominated for the 49th annual award. The award is sponsored by TIME in association with Ally Financial, and in cooperation with NADA. A panel of faculty members from the Tauber Institute for Global Operations at the University of Michigan will select one finalist from each of the four NADA regions and one national Dealer of the Year.

Massachusetts Auto Dealer


BFIT Jobs Fair a Success The Ben Franklin Institute of Technology held its annual Fall jobs fair on October 18 at which over 200 students had the opportunity to visit with over 50 employers. This was record participation for both students and employers. The Fall Fair is for all students across all BFIT’s programs. It is designed to provide employers with an opportunity to promote internships and hire current students for part-time employment, while the Spring Fair’s focus is on full-time and summer hires. This year BFIT had sixteen automotive employers attend the fair, including a number of franchised dealer groups: the Bill DeLuca Family of Dealerships; Colonial Auto Group; Cityside Subaru; Honda Cars of Boston; Lexington Toyota; McGovern Automotive Group; Prime Toyota Boston; Quirk Auto Group; Toyota of Watertown, Lexus of Watertown, and Minuteman Volkswagen. BFIT’s Spring career fair will be held on Wednesday, March 21, 2018. If you want to participate as an employer, contact Lauren Butler at t

Massachusetts Auto Dealer DECEMBER 2017




2017 MARCH

JANUARY MSADA held its 60th annual New England International Auto Show at the Boston Convention and Exhibition Center. Member dealers, associates, and sponsors gathered for the MSADA Dealer Summit at the Convention Center, featuring speakers from across the industry. The Annual Charity Gala followed the event, benefitting the MSADA Auto Tech Scholarship Program.

FEBRUARY Gary Johnson, owner of Johnson Ford Lincoln in Pittsfield, was celebrated as the Massachusetts Dealer of the Year and TIME Dealer of the Year nominee. The distinction came alongside the dealership’s centennial anniversary.



Massachusetts Auto Dealer

New MSADA President Chris Connolly reflected on his family’s business turning 100 and his vision for the future of the Massachusetts auto industry.

APRIL MSADA sponsored Bailey Martin and Tyler Dencer from Blackstone Valley Tech in the National Automotive Technology Competition in New York City, having received technical assistance from Century Mazda in Shrewsbury.

MSADA MAY MSADA held its 2017 Annual Meeting at the Mandarin Hotel in Boston. MSADA President Chris Connolly, NADA Director Don Sudbay, and MSADA Executive Vice President Robert O’Koniewski called for more dealer involvement in the policy making process. Gov. Charlie Baker and RMV Registrar Erin Devaney also appeared, detailing the Commonwealth’s work to make government more business friendly.

JUNE 2017 marked the year that autonomous vehicles began testing with passengers on the streets of Boston. Industry-leading company nuTonomy, born from the Massachusetts Institute of Technology and based in Boston’s Seaport District, was acquired later in the year for $500 million by Delphi.

Massachusetts Auto Dealer DECEMBER 2017




MSADA SEPTEMBER MSADA President Chris Connolly, MSADA Board Member Jay Dillon, Immediate Past President Scott Dube, Next Gen rep Emily Dube, and ATD Board Member Kevin Holmes made the trip to Capitol Hill alongside MSADA Executive Vice President Robert O’Koniewski, Lobbyist Jim Hurrell and Staff Attorney Peter Brennan for the Annual NADA Washington Conference.

JULY As the centennial celebration of NADA and many Massachusetts dealerships continued, Auto Dealer offered the story of Alvan Tufts Fuller, whose inspiration to begin selling the horseless carriage made him one of the very first dealers in the United States.

AUGUST Massachusetts dealers geared up for National Drive Electric Week, which helped dealers learn more about how to sell consumers on innovative, green tech nologies available in a growing number of vehicles.


Massachusetts Auto Dealer

OCTOBER In light of the recent string of natural disasters and the coming holiday season, Auto Dealer spoke with some of the Massachusetts dealer community’s charity giants, including Village Automotive Owner Ray Ciccolo, TommyCar Auto Group owner Carla Cosenzi, and MSADA President Chris Connolly, about how they work to make a difference in their hometowns and beyond.

MSADA NOVEMBER The Paragon Group offered a preliminary lineup of the vehicles that will be on display at the 2018 New England International Auto Show, which will feature dozens of manufacturers and vendors from around the world.

DECEMBER As Ira Rosenberg enters retirement for the second time, he offered reflections on the auto industry’s past and future, pulled from nearly 60 years as one of the region’s most successful dealers.

Massachusetts Auto Dealer DECEMBER 2017




By Joseph W. Ambash and Jeffrey A. Fritz

These Laws They Are-A-Changin’

2017 was a year of significant change for employers, and more is on the way for 2018. This month we review scheduled and potential changes coming from Beacon Hill that will impact your relationship with your employees. Pregnant Workers Fairness Act. This Act goes into effect on April 1, 2018. It amends the state Fair Employment Practices Act to prohibit discrimination on the basis of pregnancy or a condition related to pregnancy, including the expression of breast milk. It requires that employers provide pregnant employees with reasonable accommodations, such as additional breaks, seating, and lifting restrictions, and forbids taking any adverse action against employees or applicants on the basis of pregnancy. The Act also requires that all current employees be notified of its protection by April 1, 2018. New employees also must be notified at the time of hire, and employees who notify their employer they are pregnant must receive the notice again within ten days. Pay Equity Act. This law becomes effective on July 1, 2018 and makes several changes to permissible pay practices in the Commonwealth. Among other things, it requires equal pay for “comparable work” and includes certain justifications for variations in wages. These include seniority (provided that time spent on leave due to pregnancy or protected parental, family and medical leave cannot reduce seniority); a merit system; a pay system which measures earnings by quantity or quality of production, sales, or revenue; geography; education, training, or experience reasonably related to the job; and where travel is a necessary condition of the job. Employers also are prohibited from asking a prospective employee’s salary history, and the Act also bans any pay secrecy policy an employer may have preventing employees from discussing their salaries. Employees who successfully bring a pay equity lawsuit automatically are DECEMBER 2017

entitled to their unpaid wages, double damages, and attorneys’ fees and costs. However, the law permits an employer to defend against these costly claims: An employer who completes a “self-evaluation of its pay practices in good faith” and “can demonstrate reasonable progress has been made towards eliminating wage differentials based on gender for comparable work” can avoid liability against a claim for a period of three years following the completion of the self-evaluation. Marijuana. The use of marijuana for both medical and recreational purposes is legal in Massachusetts, and the first recreational marijuana dispensaries will open for business during 2018. Not surprisingly, there is rapid development of the law in this area, as well. Last summer, the Massachusetts Supreme Judicial Court became the first court in the country to rule in favor of an employee who was fired as a result testing positive due to her use of medicinal marijuana. As the Court noted, the employer’s zero tolerance policy was in conflict with the need to engage in the interactive process under state disability discrimination law. Moving forward, employers should revise their zero-tolerance drug policies to reflect that a reasonable accommodation may be available. This is not to say, however, an employer necessarily must accommodate medicinal marijuana use. The Court was clear that for certain safety sensitive positions or in industries regulated by the federal government, there may simply be no reasonable accommodation available. Employers should expect to see a growing number of marijuana-related issues in the coming year and update their policies accordingly. Minimum Wage. The last increase of the state minimum wage occurred on January 1, 2017, boosting it to $11.00 per hour. A proposal to increase it all the way to $15.00 per hour is already gaining steam and likely will be presented to voters via a ballot initiative this November. If passed, the proposal would require an

Massachusetts Auto Dealer

annual increase of $1.00 per hour each year from 2019 until the minimum wage reaches $15.00 per hour in 2022. Paid Medical/Family Leave. Bills were introduced in both houses of the state legislature and there is also a ballot initiative to create a system of paid medical and family leave for Massachusetts employees. These proposals would grant 16 weeks of partially paid and job-protected family leave to any employee—men as well as women—with more than 1,250 hours of service. Pay for leave would total 50 percent of the employee’s weekly wages up to $1,000 a week at the outset, but would rise to 90 percent of weekly wages by 2021. The legislative proposal also would create a “Department of Family and Medical Leave,” which would oversee a program costing more than $1.6 billion annually. Both employers and employees would share the cost of the leave. Employees, regardless of whether they utilize the leave, would fund up to 50 percent of the cost, and estimates suggest the employer cost per employee would exceed $10 per week. Under the ballot initiative’s formulation, employers would pay 0.63% of each employee’s annual wages, up to half of which could be deducted from employee wages. For an employee earning $50,000 a year, that would total $315 per year. 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.



A Holiday Message

By Steve Parker

Baltimore Potomac Truck Centers ATD Chairman Steve Parker is chairman of ATD, a division of NADA, which represents 1,800 heavy• and medium-duty truck dealerships. He is president of Baltimore Potomac Truck Centers in Linthicum, Maryland, which operates five full-service commercial truck dealership locations with Mack, Volvo, and Hino Trucks franchises in Maryland and Virginia.

People say that “a lot can happen in a year.” And, indeed, it has at the American Truck Dealers (ATD). The holidays are here, and I cannot help but reflect on what the year has brought us. The past year has gone down in the history books as a very good one, not just for our industry but for the entire country. When I took the helm as ATD chairman in 2016, there was a different administration in the White House. When I delivered my first chairman’s speech in Las Vegas, my grandson, Henry, had just arrived on this earth. And when I began my first year leading ATD, I had yet to encounter the hundreds of fellow dealers, industry allies and friends who I would have the privilege of knowing and working with these past two years. So, as I reflect on these milestones, what did they teach me? First, time just goes by way too fast. It is true in a personal sense (my grandson is nearly two-yearsold now) and it holds true professionally, as well. When you are passionate about the business you work in and the people you serve, the clock does not stop. Another important lesson is the work is never finished. Every truck dealer understands this quite well. And at ATD, we have accomplished a lot together. We advanced ATD’s strategic plan with a stronger focus on member participation. Industry relations – and building bridges with our OEMs – is always a priority. We have participated in monthly motor carrier meetings at ATA, and we have engaged with dealer council chairs on ATD board calls. I am pleased to report we have received a 60 percent response rate on the 2017 OEM Dealer Attitude Survey and 83 percent-member penetration. ATD conducted research on the Commercial Truck Dealer Future Landscape Study, to make sure we are prepared for the future of the industry. The results will be presented at ATD Show 2018 in Las Vegas, March 22-24. And we would not be where we are today without ATD’s deep commitment to education. Since 2016, there have been 128 truck-dealership professionals who have graduated from the ATD Academy, as well as more than 150 members in the ATD 20 Groups. Most of all, we have stood strong for truck dealers on Capitol Hill with our legislative and regulatory advocacy. Just last week, we successfully preserved floor plan interest deductibility in the House-Senate tax reform bill. We are still working hard to

cate for a bill that would repeal the harmful Federal Excise Tax. Our successes are due to you – all our politically active dealers. Thank you for contributing to our successful Washington fly-in year after year. In 2017 we had the highest number of Capitol Hill visits to date. During this holiday season, I cannot forget to mention the importance of giving back to our communities and the immense pride we have for NADA’s philanthropic work. Between hurricanes, floods, and wildfires, there are many cities and dealerships working hard to rebuild. I would also like to thank all our dealers and others who have donated to the NADA Foundation’s Emergency Relief Fund to provide financial assistance to dealership employees and their families. Now, as I reflect on my role as ATD chairman, I remember how people asked me about my motivation. After all, in a world of endlessly complex federal regulations and changing technology the task was not easy. But my motivation has always been the same: the people. I am proud to have stood sideby-side with the hardest working men and women in this industry – America’s truck dealers. I am constantly amazed at how resilient our employees and families are despite changing consumer demands and a turbulent economy. Nevertheless, we held our ground the past year with hard work and communication. It is the very reason why ATD and I revived this Chairman’s Column so that I could communicate with all of you each month. And I would be remiss if I did not give credit to the amazing men and women on the ATD board and the ATD staff who work hard on your behalf every day. Earlier this year, we celebrated NADA’s 100th year milestone. When ATD was founded in 1970, the truck industry was gaining national momentum. ATD became the first and only national organization dedicated to the complex needs of commercial-truck dealers. Today, the truck industry dominates freight and transportation, and truck dealers are integral to this booming business. We have come so far since ATD’s inception, and it is thanks to all of you – our valued ATD members and allies. Your continued support and participation is the best gift we could ask for. From our ATD family to yours, have a very Merry Christmas and a wonderful holiday season! t Massachusetts Auto Dealer DECEMBER 2017

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Massachusetts Auto Dealer




Massachusetts Auto Dealer DECEMBER 2017


NADA Update

By Don Sudbay

Rounding out the Year Don Sudbay, President of Sudbay Automotive Group, represents MSADA members on the NADA Board of Directors. He welcomes your




( As we go to press, Congress is on the verge of passing landmark tax legislation that will affect all of our businesses. NADA Chairman Mark Scarpelli laid out the stakes in his column below – they are important to understand regardless of the outcome of this particular vote. At NADA and MSADA, however, we know that the action on Capitol Hill and at our State House goes way beyond the big headlines. It took a lot of behind the scenes work to get to this moment. As we conclude 2017, I encourage you to think about becoming more involved in our legislative process in the coming year. We all have a role to play in making sure government functions, at all levels, in a way that benefits all its citizens. In the meantime, I hope you and yours enjoy a wonderful holiday season.

Tax Reform Bill Is Opportunity and Success for Dealers By Mark Scarpelli, NADA Chairman The nation’s auto dealers should have a happy holiday season thanks to NADA’s and my fellow dealers’ efforts to ensure that our priorities were accounted for in comprehensive tax reform legislation. On December 2, the Senate passed the “Tax Cuts and Jobs Act” (H.R. 1), which included a NADA-supported amendment to preserve 100 percent deductibility of floor plan loan interest. Thanks to a concerted effort by dealers all over the country, this critical provision was included in the legislation. Preserving floor plan deductibility was one NADA’s top priorities for tax reform. In the original Senate bill, the interest deductibility was slashed to 30 percent of adjusted taxable income, which would have been crippling to many dealers and created the risk of paying higher taxes even if a dealership does not show a profit. Not since the Great Recession has there been such a do-or-die moment for our business. Thanks to a lot of hard work, the final Senate bill (as well as the final House tax reform bill) recognized that small-business dealers use floor plan loans to finance our

high-cost inventory and are different than big corporations. Limits on floor plan deductibility would disproportionately harm many of our small businesses that are critical to Main Street America. While challenging, this moment also presented an enormous opportunity to educate members of Congress on how our business operates. I would like to thank my fellow dealers who have worked tirelessly to reach out to key legislators and explain the unreasonable burdens presented in the original Senate bill. The floor plan loan is the economic cornerstone of the franchised dealership. This critical amendment was more than just another tax issue to us. The way we’ve done business for decades was at stake. Without it, many of us would not be able to afford the vehicles that sit in our showrooms and lots-the vehicles customers come to buy. Preserving full deductibility of floor plan interest will help preserve auto sales, dealership jobs and tax revenue for our state and local governments. NADA’s strong grassroots efforts played a huge role in this victory. Dealers across the country contacted their respective elected officials to voice their concerns. We especially thank Senator Rand Paul (R-Ky.), who sponsored an amendment to preserve full interest deductibility for floor plan loans, for his leadership on this issue. Other Senators who also fought to ensure the Paul amendment was added to the bill include John Kennedy (R-Louisiana), Bill Cassidy (R-Louisiana), Todd Young, (R-Indiana), Jim Risch (R-Idaho), John Thune (R-South Dakota), and John Hoeven (R-North Dakota). We thank them for all their efforts on our behalf! As the new year approaches, NADA will continue to work hard to produce positive outcomes for our community of dealers and the millions of customers we serve. 2017 has held many new opportunities and successes for our industry. As NADA chairman I’ve been privileged to serve and advocate for our more than 16,500 members from coast to coast. Let’s continue to tackle our challenges together. And let’s look forward to next year, as we always have, with resilience and strength.

NADA Forecasts 16.7 Million New-Vehicle Sales in 2018 NADA released its 2018 U.S. sales forecast, predicting the sale of 16.7 million new cars and light trucks. NADA Chairman Mark Scarpelli announced the forecast live on CNBC’s “Squawk Box,” and later reiterated the forecast is indicative of a stable, healthy market for new vehicles. “We expect 2018 to be a robust year,” Scarpelli told CNBC.

Massachusetts Auto Dealer DECEMBER 2017




NADA Update “Every dealer in America, myself included, would be thrilled with a seasonally adjusted annualized rate of above 16 million. Because it means that, one, the market is stable, and two, that demand is still healthy,” Scarpelli said later. “And both factors are true in this case. We are looking at a stable market where demand - particularly for light trucks, SUVs and crossovers - continues to be very healthy.” “Automakers are continuing to meet that demand with a fantastic mix of vehicles that really do suit the needs, desires, and budgets of our customers, so the inventories that we are carrying in our showrooms are aligning very well

“Automakers are continuing to meet that demand with a fantastic mix of vehicles that really do suit the needs, desires, and budgets of our customers.” with what our customers are looking for,” Scarpelli added. “That is half the battle right there. So this is a very positive forecast.” Scarpelli also confirmed that 2017 sales are on pace for 17.1 million new cars and light trucks, in line with NADA’s original forecast of 17.1 million, which would mark only a slight decline from the back-to-back record setting years of 2015 and 2016. According to NADA senior economist Patrick Manzi, the vehicle segment mix will continue to favor light-truck sales and end 2017 with light-trucks accounting for nearly 64 percent of new light-vehicle sales. The light-truck market share is likely to top 65 percent in 2018, he said. Manzi added that the overall economic outlook for 2018 remains strong with projected gross domestic product (GDP) growth at 2.6 percent, average employment growth around 180,000 jobs per month, and the price for regular-grade gasoline at around $2.50 per gallon. Outlining some areas of concern, Manzi said rising interest rates, ever-increasing loan terms, and higher vehicle transaction prices will likely lead to a slower but still strong sales pace in 2018. In addition, NADA forecasts that new-car dealerships will retail 15.3 million used vehicles in 2018, compared to an expected 15.1 million used sales in 2017. The total used-vehicle market will exceed 40 million retail sales in 2018. “The influx of off-lease vehicles returning to dealerships is likely to put pressure on new-vehicle sales,” Manzi said. DECEMBER 2017

“However, the mix of these late-model vehicles will favor light-trucks more than past years and should be more in line with present consumer demand.”

Former NADA Chairman Forrest McConnell Testifies at House Committee Hearing on CAFE/GHG Standards The Subcommittee on Digital Commerce and Consumer Protection, chaired by Rep. Bob Latta (R-Ohio), and the Subcommittee on Environment, chaired by Rep. John Shimkus (R-Illinois), teamed up for a joint hearing on the Corporate Average Fuel Economy Program (CAFE) and greenhouse gas (GHG) standards set for motor vehicles and their impact on innovation, jobs, and consumer choices. Former NADA Chairman Forrest McConnell and president of McConnell Honda and Acura in Montgomery, Alabama, brought up the importance of consumer choice. “Congress got it right the first time by not having a patchwork,” he said. “You want to consider affordability to customers and their consumer choice. They get the car that fits their needs. This is the customer’s money. A regulator can demand a certain car gets built, but a customer has the right to spend his money on what fits him.”

Auto Dealer Offers Advice to Maximize Educational Workshop Experience at NADA Show When it comes to continuing education for managers at new-car dealerships, Shirley Quinn has experienced numerous training programs over her 43-year career working in the retail-automobile industry. After attending the NADA Show (formerly the NADA Convention & Expo) for the past nine years, she gives high marks to the educational workshops offered at the NADA Show. “Whether you are a seasoned manager or a new manager, my advice is to attend the NADA Show,” said Quinn, who has worked as the fixed operations director at Laurel Toyota in Johnstown, Pennsylvania, for the past 10 years. “The workshop topics are new year to year. The topics are current and based on the ever-changing automotive world we live in.” NADA Show 2018 returns to Las Vegas from Thursday, March 22, to Sunday, March 25, offering 60 new educational workshops, which include the six traditional tracks, distinguished speaker series, super session, and specialty workshop. In all, there are 102 workshop sessions. “My co-managers and I attend as many workshops as the time slots allow,” added Quinn. “Where else could you cover that many sessions within a few days?” Register at t

Massachusetts Auto Dealer



Massachusetts Auto Dealer December 2017  
Massachusetts Auto Dealer December 2017  

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