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M a s s a c h u s e t t s
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FIRST CLASS MAIL US POSTAGE PAID BOSTON, MA PERMIT NO. 216
August 2020 • Vol. 32 No. 8
The official publication of the Massachusetts State Automobile Dealers Association, Inc
New Kids ON the block
Ma s s a c h u s e t t s
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S ta f f D i r e c t o r y Robert O’Koniewski, Esq. Executive Vice President rokoniewski@msada.org Jean Fabrizio Director of Administration jfabrizio@msada.org Peter Brennan, Esq. Staff Attorney pbrennan@msada.org 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
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
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The official publication of the Massachusetts State Automobile Dealers Association, Inc
Table of Contents
4 5 6 8 9 10
From the President: The Next Generation ASSOCIATE MEMBERS DIRECTORY THE ROUNDUP: Where Are We Going? LEGISLATIVE SCORECARD TROUBLESHOOTING: TCPA Trouble Continues in the New Normal AUTO OUTLOOK
14 Cover Story: New Kids on the Block
18 20
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 BlumShapiro, 19 Ethos, 2 Nancy Phillips, 19 O’Connor & Drew, 28
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NEWS From Around the Horn BUSINESS OPS: The Best Thing You Can Do Is Implement Two-Factor Authentication; The Worst Thing You Can Do Is Rely On It
22 24 25
TRUCK CORNER: Revisit All That Your ATD Membership Offers
26
nada update: Always Moving Forward
nada Market Beat LEGAL: What if an Employee Tests Positive for COVID-19, Has Symptoms, or Is Exposed to Someone Who Does?
Back Cover: $1,800 Inside Front: $1,700 Inside Back: $1,600
Join us on Twitter at @MassAutoDealers www.msada.org
Massachusetts Auto Dealer
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From the President
MSADA
The Next Generation
As auto dealers, we know who came before and who will come after
By Chris Connolly, MSADA President As I write this, we are concluding the last days of Summer, and I am already thinking about the Winter ahead. This year is far from over, but we already know it will be one we look back on knowing how much changed. The only thing promised, after all, is change. One of the reasons that the COVID-19 pandemic has hit our industry differently is because we are primarily made up of family businesses, whether that means first generation or fourth. As dealers, our employees are often family, literally or figuratively, and that has made a pandemic and an economic shutdown all the more difficult to contend with. As you will see in this month’s cover story, howev“What makes er, the businesswomen and men coming up behind us auto dealer are more than ready to carry the mantle. These are extraordinary times to be learning the ropes, to be sure. families What makes auto dealer families different, however, different is their unwillingness to let newer generations coast into lead roles. They have worked hard and underis their stand they stand on the shoulders of those who came unwillingness before. In the coming months, we cannot know exactly how to let newer well the economy will perform or how many cases of generations COVID-19 we will encounter. But we do know that we can rely on those close to us, whether family or coast into lead chosen family, to do right by our businesses. In other words, besides the certainty of change, we roles.” are blessed to have the certainty of knowing who we can trust. Few businesses have the privilege of functioning that way, and we should remind ourselves in these tough times that it could be worse. Too many industries are dominated by forces beyond the control of individuals. To a large extent, we are able to forge our destiny in the marketplace based on our own experiences, skills, and ability to gather great teams behind us. This year has done much to challenge what we know about our economy, but those central truths have yet again proven valid. As we look to the end of the year, I cannot say definitively what lies ahead for events we have come to rely on like clockwork, the New England International Auto Show being among them. We will endeavor to keep you informed about the latest updates and make sure you have the most accurate information possible. t AUGUST 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 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 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 Chase Auto Alex Khademi (404) 375-4504 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 (401) 465-7000 Dealershop Chuck August (518) 364-8723 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 Gulf State Financial Services Mike Sims (817) 689-1735 GW Marketing Services Gordon Wisbach (857) 404-0226 Hub International Insurance Brokerage Jim Walsh (603) 494-9016 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 Abe Cohen (503) 902-6567 LocaliQ Automotive Jay Pelland (508) 626-4334 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 Murtha Cullina Thomas Vangel (617) 457-4000 Nancy Phillips Associates, Inc. Nancy Phillips (603) 658-0004
www.msada.org
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
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The Roundup
Where Are We Going? By Robert O’Koniewski, Esq. MSADA Executive Vice President rokoniewski@msada.org Follow us on Twitter • @MassAutoDealers
With the completion of the national party conventions this month, the game will be afoot as Republicans and Democrats battle for control of the White House, the Senate, and the House of Representatives in November. Once the campaign begins in earnest, as tradition dictates, after Labor Day, the two main issues that will dominate the campaign with their ancillary offshoots, as they have the last several months, are the Coronavirus and the George Floyd killing. Regarding the virus, I know where we have been, so there is no need to rehash all that, but certainly, lacking a functioning crystal ball, I cannot tell you where we are heading. The noise coming from the political parties on who did, or did not do, what and when cannot hide the fact that the Commonwealth is operating under the heavy hand of government control as to which parts of the economy can be open and to what extent, with our unemployment rate being the highest in the nation. The governor has not given any indication as to when restrictions will be lifted and we can move into the next phase of re-opening. Conversely, he has warned our citizens that he is prepared to tighten the vise of government control additionally should the numbers turn for the worse. Basing school openings on attainment of different colored zones and virus counts is as arbitrary as it gets. Eight new cases per 100,000 gets a red zone and no in-school classes, but 7 cases per 100,000 keeps you in the yellow zone and hybrid teaching. Does that really make sense? Unfortunately, in those hybrid districts once there are a couple of new cases in a school those students will be back at home permanently in front of their machines. And once we hit the flu season, will we be pouring gasoline on the fire? As for the latter issue, if the number one funcAUGUST 2020
Massachusetts Auto Dealer www.msada.org
tion of government is maintaining public safety and civil order, elected officials in a number of prominent parts of our country have failed miserably as violence and property destruction have taken over in the wake of the Floyd killing and subsequent similar events. When the endgame occurs in these protests is impossible to predict, especially since the protesters – peaceful and violent alike – do not know themselves. Nevertheless, the politicians use the events to press their own advantage as they see fit. Will urban chaos decide the presidential race? In the meantime, government operates in secret and our right of free petition is impinged. The State House continues to be closed to outsiders, with our only contact being through machine-based communications – email, phone, texts, etc. Believe it or not, the House and Senate, for example, still have not come to a resolution on expanded COVID-19 assistance. And House-Senate conferees continue to hash out details to transportation projects, police reform, and health care, just to name a few. Finally, they have yet to even issue a schedule for taking up the FY2021 budget, which should have been completed by July 1. As I say every day, “Another day on the right side of the grass.” We can just do what we do best – stay strong and persevere, while we hope for the best and plan for the worst. Hopefully the November results will not cause additional disruption on top of that which we already struggle through with the aftereffects of the year’s continuing events.
President Trump’s Payroll Tax Deferral – Treasury Guidance Expected Soon On August 8, 2020, President Donald Trump issued an executive order that directs the U.S.
MSADA Department of the Treasury to exercise its authority to temporarily suspend the withholding, deposit, and payment of the employees’ share of the payroll tax from September 1, 2020, through the end of the year. The order applies to employees who make less than $104,000 per year. While Treasury Secretary Steve Mnuchin has stated that the suspension of the payroll tax will be optional, Treasury has not yet issued important details about the payroll tax holiday. Your Association will provide additional information after the Treasury guidance is issued. In the interim, the dealer accounting firm Baker Tilly has provided, through NADA, general guidance on how it believes dealers should approach the matter. The Baker Tilly guidance is available at https://www.bakertilly.com/insights/presidents-payroll-tax-holiday-generates-questions.
Federal Lost Wages Assistance Program In mid-month, the U.S. Department of Labor (DOL) announced the release of guidance to help states implement the Lost Wages Assistance (LWA) program. LWA is authorized by Presidential Memorandum. It provides claimants in most Unemployment Insurance (UI) programs up to $400 per week of additional benefits, starting with weeks of unemployment ending on or after August 1, 2020, and ending December 27, 2020, at the latest. LWA will be administered by states and territories through a grant agreement with the U.S. Department of Homeland Security’s Federal Emergency Management Agency (FEMA) and with support from the Labor Department. To qualify for LWA benefits, individuals must provide self-certification that they are unemployed or partially unemployed due to disruptions caused by COVID-19, and the state must confirm that the individual is receiving at least $100 of underlying unemployment benefits. LWA is funded by FEMA through a joint federal-state agreement and provides the states with two benefit options. • For the $400 per week benefit, states must contribute 25 percent ($100), and the federal government will cover 75
percent ($300), of the cost. States are encouraged to satisfy the 25 percent state match requirement and provide the additional $100 in benefits either through allocations of the state’s Coronavirus Relief Funds (CRF), provided under Title V of the CARES Act, or other state funding. • For the $300 per week benefit, FEMA will fund the entire amount and states may choose to simply satisfy the 25 percent state match, without allocating additional state funds, with the state funding used to pay regular state UI unemployment benefits. The LWA program may end earlier than December 27 if FEMA expends $44 billion prior or the balance of the Disaster Relief Fund decreases to $25 billion; or if legislation is enacted that provides, due to the COVID-19 outbreak, supplemental federal unemployment compensation or similar compensation for unemployed or underemployed individuals.
NADA Washington Conference Goes Virtual Every year NADA hosts the Washington Conference in September. This annual gathering highlights the top legislative and regulatory issues affecting dealers, features presentations by key elected and regulatory officials, and includes your MSADA contingent meeting with our House and Senate members at their Capitol Hill offices. In a blow to another live gathering due to the Coronavirus crisis, this year’s conference will be held as a virtual event over three days, covering the issues impacting our automotive industry as we sally forth toward the November election. • Day 1, Tuesday September 15, 1pm3pm: NextGen Program. The NextGen Program encourages younger dealers’ involvement in the legislative and political process. The program is structured to educate NextGen attendees on NADA’s legislative and regulatory priorities and connects NextGen members with their state associations to help develop successful advocates for the retail auto and truck industry. www.msada.org
• Day 2, Monday, September 21, 1pm3pm: Inside Washington Policy Briefing. NADA’s Legislative and Regulatory Affairs staff will brief association leadership and invited dealers on the top legislative and regulatory priorities to inform members on the latest developments and prepare attendees for virtual Capitol Hill meetings. • Day 3, Tuesday, September 22, 1pm3pm: Washington Conference General Session. The General Session is open to all attendees and will include remarks from NADA leadership, special guest speakers who play key roles in developing policy impacting dealers in Washington, and renowned political analysts Charlie Cook and Amy Walter with the Cook Political Report. The three issues NADA is focusing on this Fall are the following: • Recalls and grounding of vehicles. S.1971 would cripple the used-vehicle market by halting a dealer’s sale, lease, wholesale, or loan of used vehicles under any open recall. Congress needs to oppose overbroad recall legislation and focus on initiatives to improve consumer response to vehicle recall notices and increase recall completion rates. • Suspension of the Federal Excise Tax (FET) on heavy-duty trucks. The 12% FET on trucks is a costly barrier to new truck demand that has further depressed sales and results in an aging, more polluting truck fleet. Temporary suspension of the FET would help save jobs, boost the economy, and modernize the truck fleet by accelerating the purchase of new trucks with the latest environmental and safety technology. • Potential new auto tariffs threaten U.S. jobs and will hurt consumers. No vehicle in the U.S. is 100% domestically made. NADA asks that Congress ensure that any new trade initiatives do not unduly increase vehicle prices, stifle demand for new vehicles, or jeopardize American jobs. NADA dealer members are invited to attend the virtual conference and can register online at www.nada.org/WashConf/. t
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MSADA L EGISLATIVE S CORECARD
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AUGUST 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. Redraft reported favorably on Feb. 5, 2020; referred to Senate Ways and Means.
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. Placed into study.
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. Redraft S2804 reported favorably; sent to Senate Ways and Means. Redraft H4810 reported favoably; sent to House Scheduling.
H960 S629
Rep Driscoll Sen O’Connor
Creates administrative process to seek diminished value of damaged vehicle.
SUPPORT
The Joint Committee on Financial Services held public hearing on September 26, 2019. Placed into study.
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. Placed into study.
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. Placed into study.
H220 H4307
Rep Cusack Redraft
Clarifies licensure 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. Placed on House calendar.
S2498
Sen Barrett
Creates ZEV rebates program.
SUPPORT
The Joint Committee on Telecommunications, Utilities and Energy held public hearing on July 23, 2019. S2498 passed by Senate on Jan. 30, 2020, and referred to House Ways and Means.
H3997
Speaker DeLeo
Creates $30 million ZEV rebates program.
SUPPORT
House passed the bill on July 24; refeered to Senate Ways and Means Committee. Senate Bonding Committee held hearing on Feb. 25, 2020.
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.
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. Bills placed into study. IP on November ballot.
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. Placed into study.
H4113
Rep Ehrlich
Mandates automatic shutoff for keyless start vehicles.
OPPOSE
The Joint Committee on Transportation held public hearing on January 2, 2020. Reported favorably and referred to House Ways and Means.
H4754
Rep Jones
Sleepy’s-related affirmative defense.
AUGUST 2020
STATUS
SUPPORT
Massachusetts Auto Dealer www.msada.org
The Joint Committee on Labor and Work Force Development held public hearing on June 12, 2020. Placed in extension until October 27, 2020.
MSADA
Troubleshooting
TCPA Trouble Continues in the New Normal By Peter Brennan, Esq. MSADA
Staff Attorney While dealers have been hard at work moving metal and adapting to the “new normal”, unscrupulous members of the plaintiffs’ bar have been up to their old tricks, seeking out clients and creating grievances in order to advance frivolous class action lawsuits. The alleged reason for the shakedown this go-round is a violation of the Telephone Consumer Protection Act (TCPA), a topic frequently covered in this space due to the complexity of the law and the damages that can attach to violations. We have heard that at least one firm, and probably several, are specifically targeting dealers across the country and sending demand letters that threaten class action lawsuits based on violations of the TCPA. As a refresher, the Telephone Consumer Protection Act (TCPA), initially enacted in 1991, primarily covers phone calls and prohibits marketing communications without prior consent. The Federal Communications Commission (FCC) considers a text message sent to a telephone number associated with a wireless device to be a “phone call”. As we have repeatedly advised, it is a violation of the TCPA to text to anyone without receiving their prior express consent, and if the text is an “autodialed” marketing message, you cannot send it to a person unless you have their prior express written consent. The potential liability for TCPA infractions is enormous, as the statute allows a private right of action and either actual or statutory damages of $500 to $1,500 for
each unsolicited text or call. For dealers facing a TCPA class action, the potential liability is well into the millions. The law can be confusing in that it seeks to differentiate between calls and text messages communicated manually and those that are sent using an autodialer, while the technology involved has evolved more quickly than the law. Recently, the FCC sought to clarify the opaque law by issuing a Declaratory Ruling relating to text messages, autodialers, and the TCPA. Specifically, the Ruling holds that because a specific “peer-topeer” (“P2P”) texting platform was “not capable of originating a call or sending a text without a person actively and affirmatively manually dialing each one, that platform is not an autodialer and calls or texts made using it are not subject to the TCPA’s restrictions on calls and texts to wireless phones.” The FCC’s Ruling further states that, “if a calling platform is not capable of originating a call or sending a text without a person actively and affirmatively manually dialing each one, that platform is not an autodialer and calls or texts made using it are not subject to the TCPA’s restrictions on calls and texts to wireless phones.” This clarifies a previous order issued by the FCC in 2015, which held that any equipment or platform that has the “capacity” to automatically dial and send text messages is an ATDS or “autodialer.” So, what does this mean as a practical matter? It is likely that vendors of P2P technology or similar platforms will claim that their platforms are covered by the Ruling. Dealers should proceed with caution and consult with their legal counsel before signing a contract – there is still some question as to what constitutes a true P2P texting platform. Even if a text is sent using compliant P2P technology or completely manually you will still need to have the customer’s prior consent. Additionally, the Ruling did not change www.msada.org
one important point – if using autodialer technology to text customers, you will still need to have the customer’s prior express written consent. Here is an example of the language the customer would need to have previously agreed to in order to receive an auto-dialed marketing text: “I hereby consent to receive autodialed and/ or pre-recorded telemarketing calls and/ or text messages from or on behalf of [DEALER] at (___)___-____ [telephone number]. I understand that consent is not a condition of purchase.” Make sure that the customer signs the statement and maintain the record in your files. If a dispute concerning consent arises, the dealer bears the burden of proof to demonstrate that a clear and conspicuous disclosure was provided, and that the consumer unambiguously consented to receive telemarketing calls to the number specifically provided. Accordingly, consent forms should be maintained by the dealership for at least four years. If you receive a demand letter based on an alleged TCPA violation, contact your MSADA. Many of these demands are now based on a “dual purpose” theory, where even though the text message in question was advising the customer of upcoming recommended maintenance, the demand claims that every communication has a “dual” purpose of trying to market to the customer, and thus constitutes a TCPA violation. Based on examples from across the country, the plaintiffs’ attorneys will not have done their due diligence, so pushing back and demanding proof of the violation will be the best initial strategy to fight the frivolous claim. 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.
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AUTO OUTLOOK
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RACE TO THE FINISH COVER STORY
New Kids on the Block By Jeff Breeze The automotive industry is one of the fastest moving places in the country, whether it is the adaptation of technology or the acceleration of vehicles driving away in the hands of new owners. It can also be tortoise slow when it comes to personnel turnover with people securely in jobs for generations, and at many events it is the same faces with a little less hair and a little less ornate necktie. New blood always flows
into
the
in-
dustry as well, with demand for service technicians always high, and for people who can bridge the traditions of a dealership with rapidly changing technology and new processes. The people who ascend highest are often those who spent formative years inside stores with family members and who have cars in their blood. While the three people that we are featuring all have the title of General Manager at this point, they each have taken a different path to get to where they are. AUGUST 2020
Alex Ciccolo
General Manager, Porsche Norwell When you grow up with an uncle, and godfather, like Ray Ciccolo, it is bound to make a significant impression, and for Alex Ciccolo it certainly did. While his path to proving his mettle went through a few different dealerships, he has transformed Porsche in Massachusetts in his few years at the helm. “I always really looked up to my uncle. Ever since I was a little
Massachusetts Auto Dealer www.msada.org
MSADA kid, I knew I wanted to be like him and to follow in his footsteps. My family has always been in the business, so ever since I was a kid I was being brought up in a car dealership.” Ciccolo studied economics at American University of Paris, but when he graduated and returned to the U.S., he was not given any sort of free pass and cushy job by his family. “They did not make it easy for me. They did not have any interest in hiring me because they wanted me to do it on my own. They did not want me to just walk into a business that we owned. I started working on my own and was doing pretty well. There was not much interest to leave the career path I was on because I was doing well working for other people.” There was no guarantee for him that this was the career track he was seeking, but he knew that he needed to find out if it was where he was meant to be. He started as a log guy and went into the BDC. From there he moved into sales and then became F&I manager, and a sales manager. He moved from Cadillac of Norwood to South Shore BMW and on to Brigham-Gill Motorcars in Natick in the process of learning and proving himself. “I was not sure. I always knew that I wanted to try it to see if I at least liked it. When this GM position was available, it was a career move but also an opportunity to prove myself to the industry and to my family.” In June of 2016, he came back to the Village Automotive fold and was really a part of the family business. He had big ideas and quickly upended the entire way that Porsche had done business locally. “When I took over, it was a very different store. We had a small staff with not a lot of cars and not a lot of expense. We probably sold 160 total cars a year. We brought it to a big store and a bigger staff, and I am saying we will probably sell over 800 cars this year. We had only three technicians and have eight now (six of those as Porsche’s top level certification), and we still are struggling with capacity issues. We have expanded everywhere, we tripled the staff, and it is a much different store than it ever used to be.” Now the store is a Premiere Porsche dealer, ranking in the top 25 in sales nationally the past three years. Ciccolo also credits a good sales process velocity on used cars, going to an aggressive one price philosophy on used cars, to turn them over faster while growing the new car inventory to give customers the best experience that they can. Looking forward, change is everywhere, and not merely spurred by the technological necessities of the pandemic. “Porsche just came out with their first 100% electric vehicle, the Taycan. It is truly the leader in that segment of electric vehicles. It has been called ‘the Tesla-killer.’ It is truly the best electric vehicle in the world today. It is the future of where a lot of cars are probably going.” Bringing in a new vehicle with entirely new systems means “we need to make sure staff has the proper training, and that is across everyone - sales, service, and parts.” In the wake of the Coronavirus, Ciccolo sees lots of opportunities and possibilities for change. It is being ready to be able
to respond to whatever happens and find ways to make the best of those situations that drives him to continually find new paths to success. “The business is still good, but it is something that could change any day and every day. The virus has really changed our business a lot, in some ways for the better, in some ways for the worse. There are a lot of things that the Coronavirus expedited. I think we were always moving towards an online sales, by appointment type of thing, and this really sped up that timeline. It is changing every day and we are having to adapt and react on a daily basis to what is happening now and what we think is going to be happening in the future.” As he looks forward to future growth and responsibilities, Ciccolo has the same foundations in the community that his godfather instilled in him back as a child. “We want to be able to give employees a good way of life. We want to be able to serve and take care of our customers. But the main thing is we want to expand, and we want to grow our dealer group. We want to employ as many people as we can and contribute as best we can to society, whether it is by charitable endeavors and being involved.”
Emily Dube
General Manager, Bill Dube Hyundai Emily Dube has been on a fast track for the automobile industry since she was young, and now with nearly 2 years under her belt as the GM, she is still the youngest in the state at age 27. She is proof that a nose-to-the-grindstone work ethic still pays dividends in a digital era. Her earliest memories involve cars, and it seems they were well embedded in her skin. “When I think back to being a litwww.msada.org
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NEW ON THE BLOCK RACEKIDS TO THE FINISH tle kid and going to my grandparents’ house for dinner, most families talk about baseball and everything, but meanwhile my family is sitting around the table rehashing customers and cars. From really early on it was something that was a huge part of my daily life and something that my entire family had in common together. That was my stepping stone.” Like many children in a car dealership, she found some work to do, but instead of sweeping up and following the service techs around like a lapdog, she was working with her aunt, learning the business and helping to manage the car wash attached to one of the family’s dealerships. “I was lucky because I was exposed to the dealership financial statements before I had even graduated from high school. My mentors in my life gave me a lot more education and a lot more information. So I was able to get a taste of that before going off to college. I knew that was something that I liked and was good at, and that is how I started on that track.” She set off to Washington, D.C. for college and studied business at American University. While she was a good student in the classroom, it was out seeking experience where she learned what she was looking for in a job and in life. “Everyone goes on an internship as much as they possibly can - if you have not done three internships then you have not done anything. I did my share of internships and they were fine, but I always had this feeling that if I were to call in sick, it did not really matter. If I were at an accounting firm, all of the math and all of the work would still be there tomorrow, and no one would skip a beat. After my sophomore year, I decided to come home for the summer and work for the dealership, and that was a completely different experience. I had worked there before, starting when I was 12, but not doing anything overly consequential. That summer I was working for my father and working in the sales department, and it was the first time I felt that if I did not get out of bed that day, and show up for work, you-know-what was going to hit the fan, people would notice, and it mattered. It affected people’s lives and people’s day whether I was there or not, and that was something I found motivating and kind of exciting.” In her junior year of college she realized that she could graduate a semester early if she constructed her schedule a certain way. “That meant I could move home and start working and instead of paying D.C. rent and just messing around for an extra six months.” While she walked with her class that May, she was working at the dealership in January after a week off, and was enrolled in NADA Dealer Academy the following month. “Then, I was at the service week, which was the second week of dealer academy in April of 2015, when my dad called me and said, ‘While you are out of town this week, you should go buy a new alarm clock. The service manager just gave his two weeks, so you are up.’ I was 21 at the time and knowing nothing about the service department. We were actually on a class break when he called, so I went and made a stronger cup AUGUST 2020
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of coffee.” After three and a half years of learning a ton about service and the rest of the business, she took over as the General Manager on November 1, 2018. While challenges rise constantly, Dube has a network of people around her to help the dealership succeed, while bringing a youthful energy that is unmatched. Her fiancé is the finance manager for one of the family’s other dealership and has a similar ethic that drives him. “It works pretty well for us, because both of us end up staying late at work pretty often, and neither of us get mad about it because we both do it.”
Chad Bouchard
General Manager, Ron Bouchard Auto Stores “I was born in ’85 and my dad opened his first store in ’86, so I guess I was really born into this,” Chad Bouchard said. His father had been a race car driver who won NASCAR Winston Cup Rookie Driver of the Year in 1981 thanks to a victory at the Talladega 500. Chad had the competitive spirit in his blood as well, toiling for six years in the ranks of the professional golfing tour, but it was cars that had got their teeth into him from the time he was little. “I spent time at the stores from when I was 10 or 12 years old. I went from cleaning around the shops to doing reconditioning to working on the sales floor to where I am now. I did not know it was always what I wanted to do, but I am glad that I am doing it because I love getting up and going to work every day.” While golf was a great chance for him to do what he loved, it was not any easy existence hoping to make the cut from week to week with pay based on how well you were putting on any given weekend. When the automobile business reached out to provide a sense of stability, he took the chance.
MSADA While re-opening after the pandemic shutdown has been a boon “You can only play golf at that level for so long, and I had my to dealerships across the state with many approaching record numopportunities, but it never really got to the point where there was bers as a result of pent-up demand, Bouchard is more pragmatic any stability in it. Then my dad got sick, he had had cancer, and and realizes that some successes are industry-wide and not really it came back around. He asked me what I wanted to do, because of their own doing. now was the time to get back in the car business because though “You can look at the financial statement and say, ‘Wow, I am he was sick, he could help me learn. I came back, and he passed doing great,’ but you look around and see everyone is doing great away about four months after I returned. That was a really tough so maybe I am just average. You need to realize that is very much part of my life but I am glad that I did it and I am glad that at least driven by the market and not us. So do not get lazy and just keep he knew that I came back.” trying to improve. You do not want to be caught with too much inIn college at the University of Tampa, he double majored in ventory or too much expense going into a slower time of the year, marketing and management with an advertising minor. Initially he especially if the market flips again whether it is due to the pandemhad wanted to stay in Central Massachusetts and work, but his ic or just financial reasons. We are trying to keep ourselves trim father told him to go to college and get an education. When he with expenses and inventory, manage returned to the business, he had a base it properly and be as fluid as possible.” in education, but knew he was in over It is the same thought process that he his head at the start. brings to future innovations like electric “I did not know what to do and no cars - they will do all they can to sell one really knew what to do with me, so the supply that manufacturers provide, I started in the marketing, because I had but the market is controlled by factors some experience here before and knew that dealerships cannot dictate, no matthat I could help a little. Marketing is alter the regulations put on them by the ways changing so you have to get with government. the times right away, because what you “At the end of the day, I do not think learned in college four or five years ago that we have any control with electric is completely different, and what you cars. It is all about supply and demand, learned in other industries is completely The [COVID-19] virus has really and demand is derived from the cusdifferent. I focused on helping with the changed our business a lot, in tomer and supply is determined by the buildings and just really getting my feet some ways for the better, in some wet. Then I got involved in manufactur- ways for the worse. It is changing manufacturer. We have recently had forced supply, but with infrastructure er relations, and just getting to know evevery day and we are having to ery aspect of the business. While I had adapt and react on a daily basis to not being as great, you just cannot create the demand by putting the cars in been a salesman and a reconditioner what is happening now and what and a lot boy, I had never done it from we think is going to be happening the marketplace because it is not as desirable for some people.” a management level, so I learned from in the future.” Bouchard has a good handle on the the ground up.” –Alex Ciccolo situations around him and is constantPart of that learning involved enrollly learning from the employees on his ing at the NADA Dealer Academy in team and from other industry folks. He has come to terms with 2018, and he “learned a lot there, met a lot of people, and made a the fact that his golf handicap will rise due to not getting out on lot of connections. It was really instrumental in my growth. It is the links every day, because instead he has found that automobiles a huge foundation for anyone that wants to be a manager in any more than fill that void. department, especially general manager.” “I do not think I realized it until I was in the business for a while His focus is on Honda, Kia, and the used cars, and he sees lots and realized that I had some pretty good strengths. I have lots of of opportunity for growth within his markets. With great facilities, weaknesses, which is good to know and acknowledge, so you there is lots of room for expansion. know what you need to work on, but I also have help from every “I do not think that we are even close to capacity in terms of new department. and used car sales and service. Through education and just know“Even when I am not at work, I spend time trying to buy cars ing good people in the business who have grown big dealerships and watching cars. I just really love it. If you love it, it is not really into even larger dealerships, I can see that we are only at a small work. It is like a hobby that I just get paid for. I am so proud I am percentage of our potential. I think that is the most fun - just getdoing this rather than playing golf every day, which seems weird, ting bigger, selling more cars, reaching more customers, employbut it is not if you have done both.” ing more people, and just making a bigger impact in the industry, t for the local market, and in the community.” www.msada.org
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NEWS NEWS the from Around NEWSfrom from Around Around the Horn Horn NEWS
NEWS the Horn
BOSTON
Motional Gets Self-Driving Cars Ready For Roads Hyundai and Aptiv announced that their new autonomous driving joint venture will be called Motional and aims to introduce driverless vehicles for ride-hailing fleets by 2022. Launched virtually on August 11 to its employees around the world, the self-driving pioneer is hoping to make driverless vehicles a safe, reliable, and accessible reality. Motional is developing and commercializing SAE Level 4 vehicles – autonomous vehicles that perform all driving tasks. Motional have begun testing fully driverless systems in 2020, and its driverless systems and supporting technology will be available for robotaxi providers and fleet operators in 2022. The name Motional is intended to connect two words: motion and emotional. Motion is meant to imply both movement and its experience moving the industry forward, while Emotional tries to evoke the company’s people-first approach - the focus on safety and reliability that ultimately delivers peace of mind. “Motional, in all of its previous forms, has been leading driverless technology for decades. Our DNA – a combination of Aptiv’s expertise in advanced technology and Hyundai’s leadership
in both vehicle manufacturing and R&D – is uniquely powerful, and positions us to fundamentally change how people move through their lives,” said Karl Iagnemma, President and CEO of Motional. “What we’re building is more relevant than ever. The pandemic has challenged the global community to re-think transportation, and governments and individuals want more and better options. We’re excited to bring driverless technology safely and comfortably into everyday life.” Interest in robotaxis had been pushed aside lately by the autonomous vehicle industry in favor of automated trucks and delivery vehicles, partly because the need for contactless delivery seems more immediate during the pandemic. While other companies are pivoting to self-driving trucks or delivery vans, Motional is sticking to its original ride-hailing mission. “Our strategy is to focus on the biggest opportunity out there, which is moving people,” Motional CEO Karl Iagnemma. One day, the company might expand its focus to automated trucking and goods delivery, he said, but not now. AUGUST 2020
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The company says its research shows self-driving cars are even more relevant today. Hyundai and Aptiv surveyed 1,000 consumers during the pandemic to see how their attitudes toward self-driving technology had changed. Nearly one in five (19%) Americans are more interested in self-driving vehicles now than they were before the pandemic; 70% of Americans say that the risk of infection is a real concern impacting their transportation decisions. “Safety is not just about avoiding crashing,” says Iagnemma. The $4 billion, 50-50 joint venture was formed in March to commercialize self-driving vehicles. Hyundai invested $1.6 billion in cash and contributed $400 million in R&D resources, while Aptiv transferred its autonomous driving technology, intellectual property and about 700 engineers to the new company. GREENFIELD
Dillon Chevrolet Puts PPE Out Front
Tom and Jay Dillon have drawn attention to their Greenfield dealership, with over-sized masks for their vehicles.
MSADA
NEWS from Around the Horn
MANCHESTER, NH
Live Free or Fly: New Hampshire Makes Flying Cars Road-Legal Even for folks following the technology, the idea of flying cars cluttering the skies still seems ridiculous, but New Hampshire has just made strides towards making the Jetsons a reality. The state legislature passed, and the governor has signed, House Bill 1182, which makes it legal to have a “roadable aircraft,” better known as a flying car, in the state. These flying cars would have to take off and land from an actual airstrip, but the new law means they can drive there and back on public roads. Taylor Caswell, New Hampshire’s Department of Business and Economic Affairs Commissioner, said the state’s commitment to innovation has been bolstered. “A major economic policy goal for New Hampshire is to be one step ahead, and I believe applying tech solutions in the
transportation sector are full of opportunity,” Caswell said. “Providing foundations for business development in this area is something you will see more of in the future.” When you get your flying car registered, there’s going to be a municipal permit fee of $2,000. Under the provisions of the bill, the vehicles would be legal to be driven just like an ordinary vehicle on public roads. According to the bill, “All roadable aircraft shall be required to take off and land from a suitable airstrip and shall be prohibited from taking off and landing from any public roadway, unless under conditions of an emergency.” Right now there are two companies looking to manufacture flying cars: Massachusetts-based Terrafugia, which has been keeping a low profile since their purchase by China-based Geely, and Oregon’s Samson Sky, whose roadable aircraft, the Switchblade, has been delayed. t www.msada.org
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BUSINESS OPS
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The Best Thing You Can Do Is Implement Two-factor Authentication The worst thing you can do is rely on it Jill Kamperides
IT Security Analyst, OCD Tech Jill Kamperides
is an
IT Security Analyst
fo-
cused on privately held companies and interna-
tional 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.
Passwords are everywhere. In general, you cannot have an account somewhere without also having a password to that account. Your password should be something that you, and only you, know. That way, if a “bad guy” tries to access your account, they will be stopped by not knowing your password. Of course, things do not always work this way. Passwords can be stolen, forgotten, and even cracked or essentially deciphered by the bad guys. We at OCD Tech have a team of penetration testers that try to prevent this. To do so, we put ourselves in the bad guys’ shoes and do what they would do. If we are successful, it means that the bad guys could be as well, so when we find vulnerabilities, we report on and remediate them. We are like hackers, but for the good guys. The OCD Tech team has recently made some observations concerning passwords, phishing, and two-factor authentication. This article discusses how they are intertwined, and how it affects you. Password-based authentication is inherently weak on its own, even if you have the strongest password ever. Maybe your password is 25 characters and there is no way it could be cracked. If your account is compromised in a data breach, your password is suddenly meaningless. If you have shared that password between multiple accounts, you are in even more trouble. As penetration testers, it is one of the first things we check for, and the bad guys do, too. Two-factor authentication (2FA) was developed as a way to strengthen password-based logins by adding an extra layer of security, and it works really well, most of the time. However, during a recent penetration test, the OCD Tech team proved that even two-factor authentication is not the be-all and end-all of user security. It can be bypassed. It started with reconnaissance of our target, as most real-world attacks will. With the power of open-source intelligence gatherAUGUST 2020
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ing tools, and with search engines at our disposal, we compiled a list of email addresses that would be the foundation of a phishing campaign against our client. Review of the in-scope IP addresses revealed a few different websites that were hosting login pages – we noted Citrix, Outlook, and some others that made potential targets for this campaign. Citrix is a popular software company that provides, among other things, networking services, which includes remote-access applications. Outlook provides access to users’ email inboxes. We decided to start by phishing for credentials to the client’s Outlook Web Application login portal, because if we had success there, we would have gained access to business emails. If a bad guy were to accomplish this, it could be detrimental to a company. Our client’s instance of Outlook Web App was not protected by 2FA, which also made for an easier starting point. We crafted a phishing email along the lines of, “We’ve had an update. Please login to your account at this link to validate your credentials.” It was prettier than that, of course, and there was some back-end work involved, such as setting up a fake login page, but before long we were ready to start. We fired off our phishing email to the list of addresses we had assembled during the recon stage, and then we waited. Ultimately, we received three sets of credentials, which meant that three individual users clicked the link in our phishing email and entered their username and password into our fake login page, thinking it was the company’s real login page. Their credentials came straight to us. As luck (and Active Directory) would have it, these credentials were also valid on the client’s Citrix web portal, with one caveat – Citrix was protected by two-factor authentication. More specifically, Citrix was protected by a Google One-Time Password (OTP). We decided to phish for it. We set up a new fake login page, a clone of Citrix, and then we emailed only the three users who responded to our first round of phishing, knowing they would be most susceptible to responding again. This method of picking and choosing targets, as opposed to addressing an entire mailing list, is known as spear phishing. Our email this time looked something like, “Some users have reported issues accessing Citrix following our update. Please validate your Citrix credentials here to ensure your access is not affected. Remember, this must include your Google OTP.” And we waited. There are a few problems when it comes to phishing for two-factor authentication: If the target’s 2FA service only generates a code when a real login attempt is made, this strategy will fail since the target is logging in to our fake page and will therefore not generate
MSADA an alert. Google’s OTP, however, is a rolling code that automatically refreshes every 60 seconds. This code lives on the user’s device and is valid whether they are actively trying to login or not. All we needed was for one of the targeted users to enter their current code into our fake login page. With any other configuration, our attempt at bypassing 2FA would have been significantly more difficult, and likely less successful. The second problem is if the code is time-sensitive! If it is not entered within a very limited window of time, authentication will fail. So, we again waited for a user to enter their credentials on our fake login page. We watched our web server logs, which would provide a live feed of any phished credentials, and we did not dare step away from our screens until an hour or so later, after we had gotten three hits. Our hunch was right; the three users who were phished once were all phished again. The usernames, passwords, and OTPs they provided were all accepted by Citrix. We logged into Citrix using these newly-phished credentials, which allowed us to connect to a server on our client’s internal network. This server was poorly configured, and we discovered that each user was highly privileged. Because of this, we were able to utilize common penetration testing techniques to elevate our privileges to domain admin. If a bad guy were to get this far, they could do anything, ranging from stealing sensitive documents, to encrypting every machine on the network and holding them for ransom. Despite two-factor authentication, we demonstrated complete network compromise for the client, all while being entirely remote. How can you protect yourself from attacks like this? The first step is realizing the root of the problem. Although two-factor authentication can leave a lot to be desired in the way of security, this is not the biggest issue. The problem lies with phishing, and your users’ susceptibility to fall for a phishing attack. All it takes is one unaware user to result in network compromise. Phishing can be
partially mitigated with a mail filter and robust spam settings, but if one email should slip through, your organization is still vulnerable if your users are not trained in security awareness. The best way to do this is to phish them yourself – familiarize your users with what phishing looks like, train them when they are fooled, and, in the future, they will know what to look for and will know not to click again. Two-factor authentication, although flawed, is still extremely important. Passwords can be cracked, guessed, or stolen; it happens all the time. Two-factor authentication helps to protect against this. It is one of the best defenses against an attacker trying to break into your account, but its flaws cannot be ignored. Like
most things, it is imperfect, and it can be bypassed. This is why you should not rely solely on two-factor authentication to protect you. When you stack your defenses not only with 2FA but also with a staff that will never fall for a phishing email, you stand a far greater chance of withstanding attacks. t Contact OCD Tech if you would like to learn about the security awareness training we offer to help keep your users safe from phishing attacks, and check out our free external web breach assessment to understand what the biggest outside risks are to your organization. www.msada.org
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22 JULY 2020
Patrick Manzi
NADA Senior Economist
Boyi Xu
Economist
New light-vehicle sales improved for the third consecutive month in July. The July SAAR totaled 14.5 million units, a decline of 14.4% compared with July 2019 but up from the SAAR of 13.1 million units for June 2020. In terms of raw volume, July sales were up by just over 120,000 units from June. And through the first seven months of the year, new light-vehicle sales were off by 22.1% compared with the same period in2019. American consumers continue to choose light-trucks over cars, with light trucks representing 76% of all vehicles sold in July and 75.4% of all new vehicles sold so far this year. Similar to May and June, fleet sales fell more than retail sales did in July. According to Wards Intelligence, retail sales were off by 10% year over year, while fleet sales declined by a substantial 60% year over year. Vehicles have been selling quickly once they reach dealer lots. According to J.D. Power, 41% of all vehicles sold in July spent fewer than 20 days on the lot, up from 35% a year ago. Inventory constraints in
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popular segments may have limited some sales in July, and according to Wards Intelligence, final inventory numbers are expected to register an eight-year low for the month. Because of such robust demand, incentive spending was dialed back in July. Preliminary estimates from J.D. Power peg incentive spending per unit at $4,236, down from June 2020 but up by $166 compared with July 2019. Our outlook has not changed much since last month. We expect new-vehicle retail sales will continue to recover for the rest of the year, while fleet sales will continue to struggle. Inventory constraints in popular segments will be a headwind for new-vehicle sales for the rest of the summer. But barring any unexpected parts delays or vehicle plant shutdowns stemming from new COVID-19 outbreaks, we expect that vehicle inventory levels will be at close to normal levels by the end of the summer. For 2020, we expect new light-vehicle sales will fall to between 13 million and 13.5 million units.
MSADA
NADA MARKET BEAT
JANUARY 2016
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TRUCK CORNER
MSADA MSADA
Revisit All That Your ATD Membership Offers
By Steve Bassett Chairman, American Truck Dealers Steve
is
the
dealer
General Truck Sales in Muncie, Indiana. He also has locations in Indianapolis, I ndiana , and T oledo , O hio . H e sells V olvo , Isuzu, H ino, and M ack trucks. principal
of
AUGUST 2020
When we, as a business community, face many unknowns and uncharted territory in front of us, there is power in going back to the basics. With just a few months left in this challenging year, I want to remind every commercial truck dealer that the heart of our business revolves around this basic principle: We are a people business above all else. So let’s take advantage of everything ATD offers to help strengthen and empower our managers, sales forces and service technicians through the rest of the year. The commercial truck industry is rebounding from the COVID-19 pandemic. Last month, truck orders showed the strongest levels on record since October 2019. Class 8 net orders for the past 12 months now total 168,000 units, and experts say we are hitting the height of the summer demand. While the market has endured the worst of the decline since the onset of the pandemic, we need to work hard to keep the industry moving upward despite high levels of unemployment. The greatest hidden secret in ATD is that you might not be taking advantage of the resources at your fingertips. In a world of fragile markets, it is time to use your basic membership offerings, which include ATD Academy and 20-Group, workshop recordings, online webinars, and much more. These basics are the building blocks of longevity. They teach us how to sharpen our business skills; to manage our expenses; to navigate the regulatory maze post COVID-19; to retain our workforce; and to recruit much-needed diesel technicians for the future. I am proud to say that the ATD Academy has reopened its doors in Tysons, Virginia. The Academy never stopped educating truck and car dealers throughout the pandemic. I urge you to review the valuable online webinars on countless issues, like dealer data, Paycheck Protection Program rules, ATD Best Practices or Passing the COVID-19 stress test. Recordings of all webinars in the Dealership Lifeline Series are available to ATD and NADA members 24/7, free of charge. There are also many NADA Driven guides to download for free and share with your staff, including “Safely Operating your Dealership During a Pandemic” and “Re-opening Your Dealership During a Pandemic.” The ATD website and the weekly ATD Insider catches you up on the latest industry news. ATD Truck Beat captures the current market and latest sales analyses. Remember all these resources are items you’re already paying for. Take advantage of the education, training, and multimedia resources at your disposal. When I first addressed fellow truck dealers just
Massachusetts Auto Dealer www.msada.org
six months ago on the Las Vegas stage, I mentioned that dealers—and our small-town businesses—have many odds stacked against us. Yet we persevere and win every day because we are not just competitors; we are one powerful team. Despite an extremely challenging year, we leaned on one another, we learned from our mistakes, and we have returned to the basic principles that have always made us successful. America is still moving, and I am confident truck dealers everywhere will keep up the pace through the remainder of 2020.
Expected FET Suspension Decision Waits By David Bell, NADA Director of Legislative Affairs
Since April, ATD has been focused on temporarily suspending the 12% federal excise tax (FET) on new heavy-duty trucks and trailers through 2021 in the next Coronavirus economic recovery legislation. FET suspension is under consideration for inclusion in the economic stimulus legislation in Congress. The ATD-led Modernize the Truck Fleet Coalition, along with 198 industry groups and the UAW, have advocated to temporarily suspend the 12% FET to help save jobs, boost the economy, and modernize truck fleets by accelerating the purchase of new trucks with the latest environmental and safety technology. Due to government-ordered shutdowns and the pandemic, Class 8 truck sales are predicted to decrease 50% this year; however, a recent American Trucking Associations survey showed that 60% of fleets are likely or very likely to purchase new trucks if the FET were suspended. Fifty-five House Democrats sent a letter to Speaker Pelosi and Ways and Means Chair Richard Neal (DMA) urging them “to suspend the FET until the end of 2021 in upcoming Coronavirus legislation as the best and fastest way to help save or restore trucking-related jobs and jumpstart the economic recovery of this vital sector.” On July 27, Senate Republicans released the “Health, Economic Assistance, Liability Protection, and Schools (HEALS) Act,” a $1 trillion economic stimulus bill that includes provisions to extend unemployment benefits, liability reform, and small business relief. It did not include FET suspension, however. ATD welcomes the opportunity to put you in touch with your Members of Congress. Please contact Patrick Calpin or David Bell of ATD Legislative Affairs at pcalpin@nada.org or dbell@nada.org for more information. t
MSADA
LEGAL By Joseph W. Ambash and Jeffrey A. Fritz
What if an Employee Tests Positive for COVID-19, Has Symptoms, or Is Exposed to Someone Who Does? Now that big chunks of the local economy are up and moving again (for how long and to what extent, of course, remain to be seen), we have been fielding lots of questions about what employers must, can, or should do if and when an employee tests positive for COVID-19, is exhibiting symptoms, or has been exposed to someone who has tested positive or exhibiting symptoms. This article provides some general guidance. What are the Symptoms? As the CDC has explained, people with COVID-19 may have a wide range of symptoms, and their severity may vary greatly. These symptoms include fever or chills, cough, shortness of breath or difficulty breathing, fatigue, muscle or body aches, headache, new loss of taste or smell, sore throat, congestion or running nose, nausea or vomiting, and diarrhea. COVID-19 symptoms may appear between 2 and 14 days after exposure to the virus. What is an Exposure? In determining what counts as exposure to COVID-19, you should keep in mind three numbers: 6-15-48. If an individual was within 6 feet of someone who has tested positive or exhibited symptoms for 15 minutes or more, within the 48 hours prior to the individual testing positive or exhibiting symptoms, s/he generally is considered to have been “exposed” to COVID-19. What if an Employee Tests Positive? When an employee tests positive for COVD-19, there are four general steps you need to make sure you follow. First, you should isolate/quarantine the employee who tested positive. And s/he should remain at home until released by a doctor. Second, you should address and isolate employees working near the infected employee. In other words, you should conduct a 6-15-48 review, identify those employees who worked within 6 feet of the infected employee for 15 minutes or more within the 48 hours prior to the test or exhibition of symptoms, and then determine whether they need to be quarantined as well (see
below). Third, you should clean and disinfect your workplace, consistent with CDC guidelines, including all areas and facilities the infected person used, focusing especially on frequently-touched surfaces. Finally, you should notify all employees working in the location or area that an employee tested positive (without revealing the infected person’s name or any confidential medical information) and describe all actions you have taken as a result. Keep in mind that employees who are required to quarantine may be eligible for emergency paid sick leave under the Families First Coronavirus Response Act. You should inform them of this potential entitlement. What if an Employee is Exposed? If an employee is determined to have been exposed to COVID-19 (such as in connection with a 6-15-48 review), whether s/he needs to be quarantined depends, in part, on whether s/he is a critical infrastructure worker (such as a technician). For example, no quarantine requirement exists for a critical infrastructure worker who was exposed to COVID-19 but who (1) exhibits no symptoms, and (2) either tested negative or never tested. Instead, all that is required, per CDC guidelines, is that the employee (1) wear a mask at work 100% of the time, (2) have his/her temperature tested before every shift, (2) stay at least 6 feet away from coworkers as much as possible, and (4) self-monitor for symptoms. The employer also must regularly clean and disinfect the workplace. (Of course, no prohibition exists on an employer requiring such an employee to quarantine nonetheless.) For employees who, like most of your staff, are not critical infrastructure employees, if they are exposed to COVID-19, they should quarantine for 14 days, and return only if exhibiting no symptoms. This quarantine period should not be cut short even if the employee tests negative in the interim. What if an Employee is Exhibiting Symptoms? If an employee is exposed www.msada.org
and exhibiting symptoms, the employee should be quarantined for a minimum of 14 days (regardless of whether the employee is a critical infrastructure employee) and only return when at least 24 hours have passed since s/he had a fever and all other symptoms have improved. You can require the employee to be tested and/or cleared by a doctor before returning. If the employee’s symptoms are severe, the length of isolation should be determined by their his/her care provider. Does this mean that any runny nose, for example, requires a 14-day quarantine? Well, no. If an employee, for example, was not exposed to COVID-19, the analysis should be decided on a case-bycase basis, and the specific facts presented, with reason being your guide. You should consult competent counsel to help you navigate this determination. While not 100% determinative, you can require an employee with no exposure who is exhibiting mild to moderate symptoms to return to work only with a negative test and/or on release by his or her doctor. In the end, and in the interest of risk mitigation, you should err on the side of caution, and only allow employees to work consistent with CDC guidelines. Too cavalier an approach can result in unnecessary spread amongst your workforce. t
Joe Ambash is the Managing Partner and Jeff Fritz is a partner at Fisher Phillips, LLP, a national labor and employment firm representing hundreds of dealerships in Massachusetts and nationally. They can be reached at (617) 722-0044.
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NADA Update
By Scott Dube
Always Moving Forward 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. With dealerships busy as the boon of post-re-opening sales still flourishing, NADA has stayed busy keeping an eye on the future and the things that still need to be improved. The heat of the summer sun is no excuse to rest, whether that involves celebrating OSHA’s Safe + Sound Week or getting ready for the 2021 NADA Show. While everyone has been struck by the horrors of a pandemic, the rest of the world does not slow down around us. When we hear stories of a dam breaking and flooding a town and a university that has long been a feeder for dealerships across the country, we realize the way that we need to work locally and globally to help our communities that we represent in addition to the dealer body as a whole. Sometimes we all need to celebrate what humanity can do when we work together to make things better for everyone.
NADA Show 2021 Attendee Registration and Housing Now Open By Na’Tasha Jones, NADA, Marketing Manager
NADA Show is back this January in New Orleans, where the automotive community will reunite and re-energize for the year’s premier auto dealer event. Now more than ever, NADA is the source for dealer information, best practices, and new tools to adapt to a changing business landscape. Registration is now open for the 2021 Show, which will feature the latest strategies and tools from NADA Academy instructors, legislative and regulatory experts, and other top industry professionals, on the latest topics that are vital in today’s business climate. Reconnect with peers and see how stores are building and growing amid new challenges. Franchise meetings with auto manufacturers will provide opportunities to receive key updates in this new business environment for dealers and their businesses. On the Expo floor, you’ll find the products and services your dealership needs to thrive. With 77% of last year’s companies already lined up early to exhibit in New Orleans, it’s a great indicator of the demand these companies have to get back to business and kick off 2021 on a positive note. The innovations and solutions you expect to see at the auto indusAUGUST 2020
try’s top marketplace will not disappoint. This year’s co-headquarters hotels are the Hilton New Orleans Riverside and the Windsor Court Hotel, just steps away from the Ernest Morial Convention Center, the French Quarter, and the Riverwalk Marketplace shopping. The best hotel selections always fill up quickly, so start planning your New Orleans trip today. Read more about what’s to come at this year’s show, including our plan to keep members safe and secure through a detailed action plan to address social distancing concerns, in a downloadable brochure. There’s never been a more important time to be part of the NADA Show. Register today and we will see you in New Orleans.
500-Year Flood Devastates Auto-Focused Northwood University By Debbie Ann Sunga, NADA Chief Speechwriter
Since 1959, Northwood University has stood as a pillar of excellence for countless business leaders and intrepid entrepreneurs. With a flagship campus in Midland, Michigan, Northwood is the only four-year university that boasts its own international auto show, as well as unique undergraduate tracks like Automotive Marketing & Management and Entrepreneurship. For 57 years, the Northwood University International Auto Show has hosted the largest, outdoor exhibition for aftermarket companies and automotive brands. The event is held at the beginning of each academic year and has been entirely led by the student body. But students and faculty face many unknowns to the start of this academic year. In May, a historic and devastating flood submerged homes, buildings, and the livelihoods of Midland residents and Northwood students. This natural disaster, dubbed by locals as the Flood of 2020, decimated the area when two dams along the Tittabawassee River collapsed, causing more than 20 billion gallons of water from Wixom Lake to descend upon Midland County and Northwood University. Within hours of the dam breaking, important structures were completely or partially submerged underwater. An estimated 10,000 residents were evacuated immediately, along with Northwood students, as water levels exceeded eight feet on the campus. The damage throughout the area is estimated at $175 million, with $10 million at Northwood alone. The campus is struggling to recoup a loss of $4.2 million to its athletic facilities after its arenas were gutted and the football field was almost entirely submerged. The process of rebuilding and re-opening seems to be a linear theme throughout this unprecedented year and the Midland area is no exception. University president Dr. Kent
Massachusetts Auto Dealer www.msada.org
MSADA MacDonald said that regardless of the devastation, the university is working hard to welcome students back this fall by rebuilding athletic facilities, renovating classrooms, and engineering the campus so that it’s better protected against flooding in the future, but it will not be easy. Northwood needs the support of the business community more than ever. The same steely resolve and independent culture that led to the university’s founding 61 years ago, is the same spirit that drove the community to be open for business come August 24. “We are ready to do what it takes to make Northwood even greater,” said Dr. MacDonald in a university-wide message. “No university in the thousand-year history of global education has ever had to operate after surviving a 500-year-flood and a 100-year pandemic.” In June, Northwood University launched an emergency fundraising campaign called the Rapid Relief Fund. The initial money raised has been used to jumpstart a campus recovery. And an ongoing campaign aims to secure millions of dollars to help rebuild the campus’s infrastructure and preserve the educational system that has made a difference in the lives of students, faculty, and university workers for the past six decades. Millions of dollars are needed to help modernize the Midland campus and enhance its ability to attract a new generation. People who wish to donate can access the Northwood University Donation Page to make a donation toward the school’s various student programs. The “Northwood Idea” has been a long-held tenet of the campus community. It emphasizes the significance of individual responsibility, private property, free market and free enterprise—values that are also ingrained in American auto and truck dealers. The timing of this campaign and the generosity of the public at large is critical for keeping Northwood vibrant so it can continue to educate a new generation of students, many of whom strive to work in the auto industry.
OSHA Safe + Sound Week is Important Time to Audit Coronavirus Safety Standards at Dealerships By Kaye Lynch-Sparks Associate Director, Regulatory and Legal Affairs
The Coronavirus has disrupted business operations around the globe – from automakers temporarily halting manufacturing to retail stores limiting the number of customers allowed to shop at once. Businesses, including dealers, have triaged their procedures to ensure the safety and health of their customers and employees while keeping their doors open. As operating in the Coronavirus environment is the new normal, the Occupational Safety and Health Administration’s (OSHA) Safe + Sound Week, the week of August 10 to 16, was a good time to evaluate a dealership’s new operating procedures and optimize them for the long haul.
Safe + Sound is a year-round campaign dedicated to encouraging workplace safety and health, while Safe + Sound Week recognizes the successful workplace safety and health efforts implemented by organizations across the country that keep American workers safe. As in year’s past, OSHA provides best practices on workplace safety and health programs. In celebration of the week, NADA also provided a daily round-up of the key resources to keep dealership employees and customers safe during this uncertain time. Topics included: • Where can dealerships find general information about, and requirements for, protecting employees during the COVID-19 pandemic? • Should dealership employees wear masks while at work? • What are safety concerns dealerships should pay attention to? • What should a dealership do if an employee tests positive for COVID-19? • How do I get answers to questions on how OSHA’s rules apply to specific situations at my dealership?
ABA Promotes Adoption of NADA Fair Credit Program By Mike Alford, Chairman of NADA Regulatory Affairs Committee
On August 3, the American Bar Association approved a resolution that, in part, urges governments at all levels to: “Adopt laws and policies that promote the adoption of an enhanced nondiscrimination compliance system for dealer compensation for arranging and/or originating a vehicle finance contract by offering a safe harbor against pricing discrimination claims for dealers that faithfully implement the NADA/NAMAD/AIADA Fair Credit Compliance Policy and Program.” The resolution, which was co-sponsored by the ABA Section of Civil Rights and Social Justice, Section of State and Local Government Law, and the Commission on Homelessness, recommended “safe harbor” protection to dealers who faithfully adopt the NADA fair credit program in lieu of a recommendation that governments consider requiring dealer finance compensation to be in the form of a non-discountable fixed fee. This was one of several significant improvements to the original resolution, which sought to impose a series of new duties and restrictions on the dealer finance office. The action represents the latest recognition by a diverse and growing number of public and private groups of the value of the optional NADA fair credit program as an effective mechanism to address fair credit concerns while preserving competition in the marketplace. The program, along with supporting materials, is available at www.nada.org/faircredit. NADA continues to encourage dealers to consider, in consultation with their counsel, whether to adopt this voluntary approach to fair credit compliance. t
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