UCN
Used Car News
usedcarnews
4/27/2020
Auto Industry Plans for Economic Reboot By Jeffrey Bellant
karglobal.com
IN THIS ISSUE:
• Collections • Simulcast Dominates
Rush - Dated Material
• Retail Markets
A federal agency deemed auto sales essential as the U.S. government and several states began developing plans to reopen the economy at press time. These bits of good news were welcome as the stubborn coronavirus remained a challenge to global health and the economy. The Cybersecurity and Infrastructure Security Agency (CISA), which works on behalf of the Department of Homeland Security to secure critical infrastructure, released an advisory updating its earlier designation of “essential critical infrastructure.” The new guidance includes “Workers critical to the manufacturing, distribution, sales, rental, leasing, repair, and maintenance of vehicles and other transportation equipment (including electric vehicle charging stations) and the supply chains that enable these operations to facilitate continuity of travel-related operations for essential workers.” The National Independent Automobile Dealers Association (NIADA), which lobbied hard for the “essential” designation for its members, praised the announcement in an April 17 press release. “Transportation is absolutely essential, and our industry can serve the needs of those on the front lines of our efforts to vanquish the virus,” NIADA CEO Steve Jordan said. “We are thrilled that CISA and the Administration have expanded the list of essential services to include vehicle sales, especially as communities are beginning to come together to re-open the economy. “Independent auto dealers are ready to assist health care workers, emergency responders, infrastructure workers, delivery drivers and
others who are performing vital tasks to support public health when they have a need to replace or repair their vehicle.” The announcement was welcome news to state IADAs. Jeff Martin, executive director of the Texas IADA, said Texas Gov. Greg Abbott’s order to close down non-essential businesses on March 31 did not clearly state that auto sales were essential. But that may all change with the CISA guidance. “That is the story,” Martin said in a text on April 20. “The Texas governor’s orders as well as many other states point to CISA guidelines.” Reg Evans, executive director of the Mid-Atlantic Regional Independent Automobile Dealers Association, said his members – representing Delaware, Maryland, New Jersey, New York and Pennsylvania – faced the same frustration that Texas dealers did. “Pennsylvania’s governor (Tom Wolf ) has refused to allow us to open,” Evans said on April 20. “Every state around us is allowed to open. His order is not specifically tied to the federal guidelines.” Evans added that Pennsylvania’s dealers – as of April 20 – were still specifically prohibited from opening, although repairs, rentals and financing are allowed. Evans welcomed the CISA guidance and hoped at press time it would help open up auto sales in Pennsylvania. NIADA echoed Martin and Evans’ hopes for the industry. “Now is the time for state governors, county executives and mayors who have issued local orders to resolve any conflicts with the updated federal guidelines as it relates to motor vehicle sales,” NIADA senior vice president of legal and government affairs Shaun Petersen said.
“The updated federal guidance is an express recognition that motor vehicle sales can safely continue, and NIADA will continue to urge all independent dealers to place the safety of their customers and employees first.” Apart from the essential businesses issue, governors have been working together to plan how best to reopen their respective states and regions. On April 16, the governors of Michigan, Illinois, Indiana, Kentucky, Minnesota, Ohio and Wisconsin announced a partnership to reopen their regional economies. “We look forward to working with experts and taking a fact-based, data-driven approach to reopening our economy in a way that protects families from the spread of COVID-19,” the governors announced in an April 16 joint release. “Phasing in sectors of our economy will be most effective when we work together as a region.” While all this was happening, U.S. Treasury Secretary Steve Mnuchin and Congress were on the cusp of agreeing on additional funding for the Small Business Administration (SBA). The CARES Act included the Paycheck Protection Program to help businesses cover payroll during this crisis. The program ran out of nearly $350 billion funding in mid-April. Evans and Martin both reported that several dealers in their states have been approved for SBA loans and received money through the original funding program. John Brown, executive director of the Carolinas IADA, said several of his members have also received the loans. He said while South Carolina reopened its economy in April, North Carolina’s shutdown order will likely continue well into May.