Massachusetts Auto Dealer Magazine April 2021

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

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

April 2021 • Vol. 34 No. 4

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

The Rising Tide of Internet Sales

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 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 CliftonLarsonAllen LLP, 21 DealerShop, 19 Ethos, 2 Nancy Phillips Associates, 21 O’Connor & Drew, 32 ADVERTISING RATES Inquire for multiple-insertion discounts or full Media Kit. E-mail jfabrizio@msada.org Quarter Page: $450 Half Page: $700 Full Page: $1,400

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

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

Table of Contents

4 5 6 9 10 11 12

From the President: Stemming the Tide ASSOCIATE MEMBERS DIRECTORY THE ROUNDUP: Prepared for the Next Challenge (?)

LEGISLATIVE SCORECARD TROUBLESHOOTING: Copyright Law and Your Customer Lounge LEGAL: The Trouble with the Volvo Internet-Only EV Program AUTO OUTLOOK

16 Cover Story: The Rising Tide of Internet Sales

20 22

NEWS From Around the Horn Information Security: Does Your

Dealership Need a Privacy Checkup?

23

LEGAL: Do Not Lose Site of the Basics: Counting Time

24

BUSINESS OPS: How to Manage a Proper Credit Card Payment Compliance Program Within Your Dealership

25 26 28 29 30

ACCOUNTING: Threat Level Midnight nada Market Beat AIADA Brief: The Quiet Before the Storm TRUCK CORNER: Get to Know Your ATAEs nada update: Planning for Vegas, and Battle Join us on Twitter at @MassAutoDealers www.msada.org

Massachusetts Auto Dealer

APRIL 2021

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From the President

MSADA

Stemming the Tide Your Association works tirelessly to protect and advance franchise dealer rights

By Chris Connolly, MSADA President

Msada Board Barnstable County

Over the past decade, we have moved through several industry-shaking issues outside of the forces of the economy or a pandemic. These issues are the reason why your Association is here: Protecting unique dealer interests against those who are looking for their own enrichment without benefit for consumers.

Many of these battles, such as the so-called “Right to Repair” legislation and eventual referendum, were primarily waged as policy issues either on Beacon Hill or at the ballot box. We can expect people to always find ways to disagree when it comes to control and money. But what can be surprising is when people who are supposed to be on the same “If you have “side” end up looking to turn out our pockets.

I am talking, of course, about our own OEMs. never tuned in Some of us are third-generation businessmen and to issues around women who have relationships with these manufacturers going back their entire history. And what franchise laws, our grandparents would tell us, most likely, is that need to keep careful watch over the moves now is the time. we many of them are making to ultimately destroy the It may be the franchise dealer system.

We can look to Europe for a hint of what might most important be coming down the pike. Volvo, for example, has begun offering direct e-sales that allow cross-borissue you face der purchases. And there is the promise, along with in the next the electric vehicle-only mandate, that those vehicles will be available only from the Internet.

We have seen this coming and been working acdecade.” tively against these forces for more than a decade.

Tesla is what has opened the floodgates to this kind of attack on our 93B franchise laws here in Massachusetts and elsewhere. As we have seen the cars continue to proliferate, the dealer-less model has clearly been looked upon with envy from OEMs with whom we have held relationships for as much as a century.

Your Association is working day-in and day-out to ensure franchise laws are not weakened, and that our entire dealer community does not become susceptible to ruin as manufacturers look to erase local businesses and millions of jobs.

It will be a long battle, and we need you at our side. If you have never tuned in to issues around franchise laws, now is the time. It may be the most important issue you face in the next decade. t

APRIL 2021

Massachusetts Auto Dealer www.msada.org

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, Steve Sewell Treasurer, Jack Madden, Jr. Clerk, Charles Tufankjian

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 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 Automotive Search Group Howard Weisberg (508) 620-6300 Bank of America Merrill Lynch Dan Duda and Nancy Price (781) 534-8543 Bellavia Blatt Leonard Bellavia (516) 873-3000 Bernstein Shur PA Ned Sackman (603) 623-8700 Boston Magazine Noreen Murray (617) 275-2012 Broadway Equipment Company Fred Bauer (860) 798-5869 Burns & Levinson LLP Paul Marshall Harris (617) 345-3854 CDK Global Chris Wong (847) 407-3187 Chase Auto Alex Khademi (404) 375-4504 Clifton Larson Allen Rick Parmelee (860) 982-9307 Coastal Outsourced Solutions Andrea Vieira (508) 979-4733 Construction Management & Builders, Inc. Nicole Mitsakis (781) 246-9400 Cooperative Systems Scott Spatz (860) 250-4965 Cox Automotive Ernest Lattimer (516) 547-2242 CVR John Alviggi (267) 419-3261 Dave Cantin Group Woody Woodward (401) 465-7000 DealerShop Ken Grove (248) 444-6283 Brian Fleischman (716) 864-0379 DealersSocket Troy Potter (877) 340-2677 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 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 LotLinx Brad Bass (978) 766-9000 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 NEAD Insurance Trust Charles Muise (781) 706-6944 Northeast Dealer Services Jim Schaffer (781) 255-6399

www.msada.org

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 Pro-Vigil Sasha Lam-Plattes (408) 569-2385 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. Joseph Herzog (508)-830-3241 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 Towne Law Firm P.C. Kate Gagnon (518) 213-0707 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 Herby Duverne (617) 797-9316 Zurich American Insurance Company Steven Megee (774) 210-0092

Massachusetts Auto Dealer

APRIL 2021

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The Roundup

Prepared for the Next Challenge (?)

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

Governor Charlie Baker announced, as we were going to press, new guidelines designed to eliminate various government restrictions imposed during the sixteen-month Coronavirus pandemic crisis and continue the Commonwealth on a path for re-opening businesses to the public, albeit at a more measured pace than some of our sister states around the country. As dealers prepare to experience continued enhanced business opportunities as the economic awakening proceeds, our industry is facing a number of challenges from both within and outside our franchise system.

With the lack of free-flowing public in and out of dealerships for much of last year, buying consumers, especially first responders, health care personnel, and other “essential” workers, still needed to obtain new vehicles. Our members quickly augmented their on-line marketing and retail capabilities to move their operations further into the 21st century into the realm of e-contracting to meet consumer demand via the internet. This included improved vehicle inventory information, F&I product marketing, trade-in assessments, and delivery practices, all conducted with an eye toward proper compliance with social distancing, PPE usage, and disinfecting rules.

The pandemic most likely sped up dealerships’ e-retailing capabilities, according to some observers, by at least five years to the betterment of meeting consumer needs, achieving dealership sales and service goals, and maintaining public health standards. As far as we know at your Association, our member dealerships successfully met the pandemic head on to service their customers while not contributing to Coronavirus numbers as a super-spreader.

APRIL 2021

Massachusetts Auto Dealer www.msada.org

While the dealers pivoted to meet their customers’ needs through improved e-retailing practices, the franchisor factories took notice; unfortunately, maybe not for the best. To supplant their dealers’ individual efforts to succeed in the time of economic disruption, many factories have now embarked on an effort of franchise-wide e-retailing processes to control the flow of consumer interest in vehicles’ availability, pricing, and selection, as well as customer data. As we have covered previously in these pages of Auto Dealer, the factories are poised on the threshold of creating sales and distribution systems that may not treat each of their franchisees equally as state franchise laws here and around the country demand. Did dealers – big and small alike – create processes to survive the pandemic only to see their handiwork supplanted by franchisor arrogance and overreach? This certainly will be an area state dealer associations need to eye warily with dealer franchise lawyers on speed dial.

Taking the program one step further, factories are now utilizing their e-retailing processes to attempt to control the sale and distribution of the latest rage – electric vehicles. As governments, such as our own Commonwealth, move to require 100% EV sales by 2035, many factories see it as an opportunity to get a better handle on inventory production and flow. The extraordinary demand for natural resources and ever-emerging technologies needed for EV development and production may not be best served in a Wild West “build it and they will come buy it” mindset. Perhaps, as the factories contemplate, EV production will demand a more efficient approach, especially if the needed resources grow scarce. You just know there are those in every factory espying the Teslas of the world

MSADA and saying to themselves, “Why can’t we do that? What do we need dealers for?”

Even policy makers and green advocates are getting into the act of conflating the objectives of total EV sales with the argument that such a goal can only be achieved through direct sales from factory to buyer. As we maintain continuously in the public arena, such a process is anathema to consumer benefit as the customer will lose out with the lack of intra-brand price competition and reduced numbers of service and repair sites.

As dealers adapted to the changing landscape of the pandemic crisis and installed retail and contracting innovations to keep up with consumer needs and desires, dealers demonstrated they have the flexibility and individual entrepreneurial spirit to experiment, refine, and implement new tools to remain successful and relevant in the automotive retail marketplace, as well as in their communities as employers and givers. Moving forward, dealers must continue to promote the tools of convenient customer experiences that emerged via the expanded internet reliance for online buying, off-site test drives, contactless vehicle deliveries, and convenient vehicle service and repair processes.

While dealers developed and implemented the necessary changes to succeed, one area in which no change was needed was that of community giving. Dealers continued, and will continue, to be the first call of the youth sports leagues, the local food banks, the homeless shelters, and hospital fundraisers for the check to fill the communities’ needs or an organization’s coffers stretched thin as neighbors lives were threatened as never before seen. These are shoes the multinational factories with their deep pockets cannot, nor will, fill. Our dealers have built up multi-generational influence within their communities, and the Coronavirus pandemic proved they have the skills and desires to pivot economically while meeting the charitable needs of their neighbors. Your Association, as dealer associations do likewise around the country, exists to ensure the factories do not run roughshod over state franchise laws. We do

so as we appreciate the role dealers play in helping their neighbors and communities.

Much like the U.S. of A. being the first to throw a country a lifeline in time of natural disaster, our dealers are the first to step up and give those in their communities a helping hand. The next time I see a Tesla, or Carvana, or Vroom, or Lucid on a Little Leaguer’s t-shirt will be the first time.

Legislative Update FY2022 Budget. This moth the Massachusetts House approved a $47.7 billion spending plan for FY2022 and sent the bill to the Senate. The Senate will create its own version of a spending plan in May, and the two chambers will then resolve their differences in a conference committee, hopefully before the July 1 start of the new fiscal year. The House’s spending plan did not include any broad based tax increases, which is good news for taxpayers, especially since the federal government has sent $8 billion to the state as COVID-19 relief. Although the Commonwealth ultimately did not experience much disruption in tax collections during the pandemic, you and I all know state government will easily find a way to spend the federal largesse on something. Finally, the governor proposed $16.9 million for the Career Technical Initiative program to enhance vocational and technical education opportunities at the voc-tech high schools.

Alas, the House funded the initiative only at $4 million. The next step is for the Senate to address the program numbers.

UI Assessments. As we have reported in numerous bulletins during the first quarter of this year, the Legislature eventually passed a bill at the end of March, which the governor signed, to freeze unemployment insurance assessments at Schedule E. The legislation was necessary to bypass employers being moved automatically into Schedule G, with its higher payment demands, which would be the level based on the extraordinary increase in unemployment numbers during the early months of the COVID pandemic and government-imposed business shutdowns and restrictions. I do not need to point out www.msada.org

that government’s response to the pandemic caused unemployment here to rise from under 3% in February 2020 to almost 20% by that April and thousands of business closures, many of them permanent. The Legislature and governor have yet to address the second part of the UI assessment invoices – the solvency payment – which jumped 1600% over previous assessments, thereby causing considerable outcry from the business community. In our comments to the Legislature during the UI bill debate, we pointed out the open-ended aspect of the bill’s language, but our concerns fell on deaf ears. Now the chickens are coming home to roost.

Mandatory Paid COVID Leave. In the aforementioned UI legislation, the governor and Legislature prepared a program of mandatory paid COVID leave that included small and large employers. The state decided to include those employers of 500 employees and above since the voluntary federal program excluded them. Instead of approving the provisions in the final bill, the governor sent back suggested amendments to address certain administrative and compliance issues, several of which we asked the Legislature to address when the bill was before it. Since the Legislature has yet to take up the governor’s amendments, small employers are limited to the federal voluntary leave program for employees, and large employers are on their own to take of their employees’ needs.

Bills to Committees. At mid-month, the House and Senate clerks referred timely filed legislation to the joint and standing committees of appropriate jurisdiction.

We detailed in the February Auto Dealer the bills that legislators have filed for us.

Please refer to this month’s Legislative Scorecard following this column to see where our bills reside presently. We have no indication yet from the committees when the public hearings will be scheduled. We will be encouraging our members to get involved with the process and contact their legislators in advocacy of our position on the relevant bills we need to support or oppose.

Right to Repair Update. The federal Massachusetts Auto Dealer

APRIL 2021

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THE ROUNDUP litigation initiated by the Alliance of Automotive Innovation seeking to overturn the new RTR statute is still scheduled for trial in June in Boston federal district court. The Massachusetts AGO’s temporary cessation of enforcement is still in place. However, as we have explained previously, MY2022 vehicles have been at dealerships and available to consumers since January, and the MY22 start-up of the new law is still in place until either a legislative fix occurs or the law gets shot down through the litigation. We continue to monitor this situation and will act accordingly post litigation outcome.

NADA Dealership Energy Use Survey Have you made improvements over the years aimed at increasing your energy efficiency and saving on energy costs?

NADA is excited to announce that it is working in partnership with the Environmental Protection Agency through the Energy Star program to help you gain recognition for your efforts. The NADA Energy Star partnership is designed to save franchised dealerships money, promote energy efficiency and generate goodwill in your community.

Energy Star recognizes businesses that have made outstanding cost-saving, energy efficiency efforts by awarding them with Energy Star certifications. Car dealerships are not yet eligible for Energy Star certification, because the data does not exist to allow dealership facility energy use to be compared nationwide. NADA knows of the great work dealers all over the country have made to reduce their energy consumption, and NADA wants to make sure they receive the spotlight they deserve.

For franchised dealerships to qualify for an Energy Star certification award, baseline data on energy use must be collected.

NADA needs your help to gather the data needed to develop an Energy Star score for franchised dealerships. Dealers will be able to compare their energy performance with other dealerships nationwide using a simple, easy-to-understand score. This data will enable dealers to focus on areas APRIL 2021

of future energy-use reductions (and cost savings). Top-performing dealerships may be eligible to earn coveted Energy Star certification.

At your earliest convenience, please have an office manager, facilities manager, or other employee review the instructions (found at www.nada.org/surveyinstruct/) and complete one voluntary, 20-minute survey (found at www.surveymonkey. com/r/NADAENERGYSTAR) for each dealership location.

The deadline for survey completion is Saturday, June 5, 2021. Email any questions to energysurvey@nada.org. Thank you in advance for taking the time and making the effort to support this important endeavor.

“Coffee with Coopsys”: IT Compliance and Best Practices Webinars Beginning on February 9, our new associate member Cooperative Systems, rolled out a series of six, 15-minute webinars regarding IT compliance issues and dealership best practices. “Coffee with Coopsys” will be held on the second Tuesday of each month, 10:00 a.m. – 10:15 a.m. Registration is complementary for all MSADA members. The schedule of remaining topics is as follows: • Tuesday, May 11: How Cloud-Based Telephone Systems Can Provide More Value To Your Dealership Than Traditional Premise-Based Systems.

• Tuesday, June 8: Why You Should Be Using Multi-Factor Authentication (MFA) Across All Of Your Dealership’s Technology System.

• Tuesday, July 13: Controlling Your IT – Should You Outsource IT, Hire Internally, Or Have a Hybrid?

Check our bulletins for future “Coffee” webinars for the remainder of the year

MSADCF Auto Tech Scholarships Available Applications for the Massachusetts State Auto Dealers Charitable Foundation’s 2021-2022 Auto Tech Scholarships are now available on our website at www.

Massachusetts Auto Dealer www.msada.org

MSADA msada.org. The Foundation’s auto tech scholarship program awards scholarships to eligible applicants for use at post-secondary educational institutions that offer auto tech training programs. Since its inception in 2003, the Foundation has awarded over $1 million to more than 200 students. A scholarship award is worth $6,000-$13,000 over two years for each student selected.

Over a decade ago the Foundation’s scholarship program expanded to include not just manufacturer-backed programs but also general automotive technology programs at more colleges in the Massachusetts area. This gives dealers an even greater chance to capitalize on a highly-skilled base of potential employees.

To obtain additional information on the scholarship program, contact Jean Fabrizio at MSADA at (617) 451-1051 or jfabrizio@msada.org. The application deadline is Friday, June 25, 2021.

Compliance, Community Outreach Subsidy Reminder Please accept this as our repeated reminder to our member dealers to take advantage of our compliance assistance subsidy program as well as our community outreach assistance program.

Under our compliance assistance program, we will support your compliance efforts, from $500 up to $1,000, for your participation in OSHA/environmental workplace compliance services offered

by Furrh Associates, KPA, Ethos, or Piper Consulting; employment law services offered by Fisher Phillips; and tax compliance and cybersecurity protection services offered by O’Connor & Drew. Additionally, under our community outreach program, we will support your community giving up to $1,500 in the year as a single point store and up to $2,000 total with $250 per two affiliate stores.

Do not miss out on these programs, which your Association’s Board of Directors renewed for 2021. If you need information or the application for these programs, do not hesitate to contact me. t

MSADA

L EGISLATIVE S CORECARD APRIL 2021

BILL#

SPONSOR

SUBJECT

STATUS

S183 S239 H407

Sen Crighton Sen Pacheco Rep Hunt

Amendments to Ch. 93B, the auto dealer franchise law.

SUPPORT

In the Joint Committee on Consumer Protection; no hearing scheduled yet.

H365 H400

Rep Finn Rep Howitt

RTR Law amendments to fix MY start date and consumer notice.

SUPPORT

In the Joint Committee on Consumer Protection; no hearing scheduled yet.

H336 H361 S234

Rep Chan Rep Finn Sen O’Connor

Creates process to appeal improperly issued Class 1 license.

SUPPORT

In the Joint Committee on Consumer Protection; no hearing scheduled yet.

S180 H421

Sen Crighton Rep Lewis

Modernize on-line purchase process.

SUPPORT

In the Joint Committee on Consumer Protection; no hearing scheduled yet.

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

In the Joint Committee on Consumer Protection; no hearing scheduled yet.

H1152 H1178 S711

Rep McMurtry Rep Phillips Sen Moore

Creates process to increase the insurance reimbursed labor rate paid to auto body

SUPPORT

In the Joint Committee on Financial Services; no hearing scheduled yet.

H1183 S657

Rep Puppolo Sen DiZoglio

Protects dealers from OEMs’ restrictions on selling non-OEM service contracts.

SUPPORT

In the Joint Committee on Financial Services; no hearing scheduled yet.

H1070 S719

Rep Driscoll Sen O’Connor

Creates administrative appeal process for vehicle owners to seek diminished value of damaged vehicle returned to vehicle owner.

SUPPORT

In the Joint Committee on Financial Services; no hearing scheduled yet.

H3477 H3494 S2372

Rep Golden Rep Howitt Sen Rush

Creates statutory process for allowing temp tags for out-of-state sales.

SUPPORT

In the Joint Committee on Transportation; no hearing scheduled yet.

H2004

Rep Jones

Sleepy’s-related affirmative defense.

SUPPORT

In the Joint Committee on Labor and Workforce Development; no hearing scheduled yet.

www.msada.org

Massachusetts Auto Dealer

APRIL 2021

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Troubleshooting

MSADA

Copyright Law and Your Customer Lounge

By Peter Brennan, Esq. MSADA Staff Attorney

Every dealership that I have had the pleasure of visiting has at least one lounge for customers to relax in while they wait for their vehicle to be serviced or prepped for delivery. Frequently, the dealership will have a few separate lounges for customers – a business area, a café or snack bar, and a spot with some couches and televisions where customers can relax and bide their time. In a business where customer satisfaction is paramount, the lounge is a key part of the customer’s experience. Many times, the lounge specifications are dictated by the manufacturer’s image program.

While dealers focus on creating a comfortable experience for their customers, they generally are not monitoring what is being played on the lounge television screens, so long as the programming stays within the bounds of common decency in a public business setting. However, federal copyright law controls what can be broadcast on a dealership’s television screens, and dealers need to be aware that displaying certain entertainment content on their screens without the proper license can leave the business exposed to liability under federal law.

Recently, many Massachusetts dealers have been made aware of this issue through an unsolicited letter sent by representatives of the studios that own the copyright to much of the content available on cable television. Lawyers representing the Motion Picture Licensing Corporation (MPLC) have been aggressively targeting APRIL 2021

dealerships throughout the country to offer an “umbrella license” so that the businesses may continue to play copyrighted television and movie content in their showrooms, lounges, and other spaces.

Along with the offer comes a threat that, if a dealer fails to purchase the license, MPLC will refer the matter to the copyright holders for potential litigation.

MPLC represents a large group of copyright holders for movie and television programs. Generally, any time a business plays entertainment content for its customers, it will have to secure a license from the owner to play the content. If a business plays protected entertainment content for its customers without the necessary license, the business can face significant exposure for copyright infringement, with potential statutory damages of between $750-$150,000 per infringement.

When looking at the potential liability associated with the failure to secure a license from MPLC, it may be tempting to pay the fee and move on, even if the whole operation feels like a shakedown.

However, before you cut the check, you should look at your satellite or cable package and determine if the package that you have contracted for already contains the licenses necessary to broadcast content to your customers. Some “commercial” cable and satellite packages will come with the necessary licenses for limited display of the content to your customers, and no additional license will be required.

If your cable or satellite package does come with a license to display content, you will need to find out exactly what is covered by the license. Performance licenses included with a cable or satellite package can be limited and may not cover all the content that is available through your package. If some content is covered by a license while other content is not covered, the dealership should block the content that is not covered from being displayed in the dealership.

Massachusetts Auto Dealer www.msada.org

There are exemptions to federal copyright law that allow the display of protected content in a space such as a dealership without a separate license to display the content. These exemptions depend on facts specific to each display, and the business should consult with an intellectual property attorney to determine whether an exception in federal copyright law might apply to a specific situation before determining that a license is unnecessary.

Before deciding to purchase a license from MPLC, first get information on the exact type of content that is covered by the MPLC license. There are several organizations that represent the owners of copyrighted entertainment content, such as the American Society of Composers, Authors and Publishers (ASCAP), Broadcast Music, Inc. (BMI), and SESAC (formerly the Society of European Stage Authors and Composers). You do not want to get into a situation where you are paying for multiple licenses for the same content, although some overlap may be inevitable.

Thus far, the letters that Massachusetts dealers have received from MPLC are not “demand letters” that explicitly threaten a lawsuit unless the dealer takes some desired action, but solicitations that encourage the dealer to purchase a license to avoid future legal exposure. If you receive such a letter, the best course of action is to first determine whether you are already covered through the dealership’s cable/satellite package or covered by an exemption in federal copyright law. If you do receive a legal demand letter of any kind, immediately consult with your legal counsel. 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.

LEGAL

MSADA

The Trouble with the Volvo Internet-Only EV Program

By Leonard A. Bellavia, Esq. Founding partner, Bellavia Blatt, PC

While Tesla and its direct selling model may dominate headlines, other manufacturers have announced programs through which they will usurp the legally protected sales role of franchised dealers. As just one example, recent press announcements have outlined Volvo Car USA’s plans to: (a) become an all-electric brand, (b) sell these electric vehicles exclusively online and not through its Volvo franchised new automobile dealer network, and (c) only afford its Volvo franchised dealers the ability to offer test drives and function as administerial delivery agents.

This program not only causes harm to the OEM’s dealer body but also, in my opinion, violates numerous provisions of the Massachusetts motor vehicle franchise statute. Equally important, it portends other similar OEM initiatives and is, therefore, relevant to dealers of all brands.

The Program Violates Chapter 93B As an initial matter, should a Volvo dealer be denied any opportunity to order an electric vehicle, many state motor vehicle franchise statutes also prohibit an OEM from refusing to deliver in reasonable quantity, and within a reasonable time after receipt of a dealer’s order, any vehicle covered by such franchise. [Mass.

G.L. Chapter 93B, Section 4(c)(3).] Many state statutes also prohibit an OEM from utilizing a discriminatory, unreasonable, arbitrary, or unfair system of allocation of new motor vehicle inventory. [MGL Chapter 93B, Section 4(c)(1).]

Perhaps the most obvious prohibition against any online sale by Volvo of its electric vehicles stems from state laws which prohibit or make it unlawful for any

franchisor to own any interest in a motor vehicle dealer. [MGL Chapter 93B, Section 4(c)(10).] In fact, to the extent that Volvo does directly sell electric vehicles online to customers, the actions of Volvo would, in effect, make it a “dealer” and, therefore, subject to registration with a state as a “motor vehicle dealer” or “dealership.” [MGL Chapter 93B, Section 1]; [MGL Chapter 140, Sections 58 and 59.]

The Program Harms Consumers As dealers are well aware, programs such as the Volvo Internet-Only EV Program can also cause substantial economic harm by driving sales away from Volvo’s franchised dealers. Indeed, any reduction in the Volvo dealer body stemming from the Internet-Only EV Program would harm not only Volvo dealers (who have incurred enormous costs related to facility and personnel expenses, and are subject to time consuming and expensive federal, state, and local compliance regulations) but also consumers. As such, should dealers seek to enforce their legal rights against Volvo as a result of the implementation of the Internet-Only EV Program, Volvo dealers can assert the following strong arguments as to the consumer harm that would result from such program: (a) Consumer Protection: Dealers maintain service centers with trained staff to perform all recall and warranty repairs, where the dealers act as advocates for the consumers with OEMs; (b) Availability of Parts and Service: Dealers maintain an inventory of parts and provide timely service to consumers who depend on the daily use of their vehicles; (c) Community Benefits: The franchise dealers are long-established local businesses that generate millions of dollars of revenue and economic development; and (d) Price Competition: There is legitimate local interest in preventing the “vertical integration” of dealers and OEMs. Indeed, state motor vehicle franchise laws that prevent the direct sale of vehicles to consumers by OEMs cause franchised dealers within the same geographic area to www.msada.org

compete for the sale of their cars. Such competition amongst franchised dealers leads to lower vehicle prices for consumers. With an online direct sales model, the same incentive to lower prices is not present for OEMs. Indeed, intra-brand competition amongst franchised dealers causes new vehicle prices to drop.

Volvo previously attempted to introduce a program by which it usurped the sales role of Volvo franchised dealers. In the Care by Volvo Program (CBV Program), Volvo introduced a subscription model whereby it offered a two-year lease directly to consumers. Consumers could sign up for this program and make a deposit directly to Volvo through the Volvo website.

Like the CBV Program, Volvo franchised dealers will have minimal involvement in the Internet-Only EV Program transactions. Like the CBV Program transactions, Volvo franchised dealers will be largely relegated to the performance of ministerial tasks after the customer transacts with Volvo directly in connection with the Internet-Only EV Program. The California New Car Dealers Association successfully challenged the CBV by alleging that, for many of the same reasons raised here, the CBV Program was illegal. Indeed, the California New Motor Vehicle Board found that the CBV Program was, in effect, an illegal subscription program.

Based upon the above precedent, it is clear that, should Volvo proceed with the implementation of the Internet-Only EV Program, Massachusetts’ Volvo dealers would be within their rights to “bring an action in the Superior Court, or if applicable in the Federal District Court for the District of Massachusetts, for damages and equitable relief, including injunctive relief.” [MGL Chapter 93B, Section 15(a).]

Dealers should consult their franchise attorneys to further discuss their rights. t Founding partner of the law firm of Bellavia Blatt, PC, Leonard A. Bellavia, Esq., is a nationally recognized authority in the field of

automotive franchise law.He can be reached at lbellavia@dealerlaw.com

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RACE TO THE FINISH COVER STORY

The Rising Tide of Internet Sales As OEMs move ahead with new online purchasing initiatives, dealers are asking if the franchise model is at risk.

APRIL 2021

By Tom Nash For a little over a decade, customers coming into the showroom have come armed with increasing amounts of data about the minutiae of whatever model they might have their eye on and the price they believe to be what they should be paying.

Toward the latter half of the decade, more dealers were making inventory available online, so that customers could see exactly what was on the lot.

This came along with the rise of Tesla, which began testing the boundaries of automotive franchise laws around the country.

As we enter the next decade, the combined

Massachusetts Auto Dealer www.msada.org

forces of a COVID-19 pandemic that kept customers at home and the increasing interest taken in Tesla’s dealer-less model by traditional OEMs have created a situation that MSADA President Chris Connolly says puts dealers across the country in an untenable position.

MSADA

“Dealers should be talking to their Advisory boards about this trend and staying in touch with the Association now more than ever.”

–Chris Connolly, MSADA President

Risk and Reward, or Just Risk?

Electric Issues

More manufacturers are testing the waters of internet sales programs where the role of the dealership is curtailed to almost nothing.

“The franchise model is under attack,” Connolly says. “The manufacturers are using the sale of electric vehicles directly to consumers through online purchasing with vendors they control and force dealers to pay for as a way to destroy the franchise system as we know it.”

Connolly says that Tesla proved to be only the beginning point for weakening the franchise system fabric. “A lot of people said they would only sell a few thousand, and when it came time to sell a few hundred thousand, then Tesla would need to set up a franchise system. Wrong.”

As OEMs dip their toe in the water with programs such as Volvo’s Polestar, Connolly says that the trend will continue to erode the bedrock of franchise laws.

“I think the factories will want to move towards a more European model, where new vehicles are ordered online directly from the manufacturer more and more instead of being purchased from a dealership’s inventory. I think consumers will be wary of this change at first, but in a generation or so that could be the model for vehicle purchasing here, too.”

While Europe appears to be moving in a dealer-less direction already, the landscape of internet-only sales in the U.S. is more complex than OEMs simply looking to copy Tesla’s moves. There are new players in the electric vehicle space who are using the same playbook as well.

The Illinois Auto Dealers Association recently filed suit against the state for allowing electric truck manufacturer Rivian and electric sedan manufacturer Lucid Motors to operate without franchisees.

“We have no choice but to file this lawsuit, both to protect consumers as well as the hundreds of franchised dealers across the state who contribute to the local economy,” IADA president Pete Sander said in a statement. “We warned the Secretary of State’s office that consumers will be the losers if it does not enforce the laws it is required to enforce.”

As Connolly warns, OEMs based in Europe appear to be inching toward similar models. Beginning with 2022 model-year Volwww.msada.org

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RACERising TO THE FINISH The Tide of Internet Sales In the meantime, Connolvo EVs, like the 2022 Volvo ly says dealers need to begin C40 Recharge, electric Volvo having those conversations models will come with an exwith their OEMs and staypanded Care by Volvo package ing carefully attuned to what that includes service, roadside may be coming down the assistance, home charging, and pike, adding, “Dealers should insurance where possible. be talking to their Advisory The brand will also transiboards about this trend and tion to a purchase process that staying in touch with the eliminates markups, negotiaAssociation now more than tion, and haggling and locks ever.” in “transparent and set pricNADA Director Scott ing models”—and technically Dube says that he continues makes its EVs available online to monitor the situation both only.

“NADA will support states as locally and nationally, and Automotive industry attorthat NADA is ready to take ney Len Bellavia says that they vigorously defend their whatever action it can. under Massachusetts franchise franchise laws that have been “NADA will support states law Chapter 93B, the Volvo as they vigorously defend program is not legal as it has very successful for dealers and their franchise laws that have been proposed. consumers over the years.” been very successful for deal“Volvo franchised dealers – Scott Dube, NADA Director ers and consumers over the will be largely relegated to decades,” he adds. the performance of ministeriFormer NADA Director and Village Automotive Group owner al tasks after the customer transacts with Volvo directly,” Bellavia Ray Ciccolo says he has kept in touch with Volvo, with whom he says, noting that California has told the manufacturer that the prohas had a more than 50-year relationship. gram violates its franchise laws. (For more of Bellavia’s analysis, “We have had some strong conversations with Volvo, and I apsee his column on page 11.) plaud them for trying new approaches. But these ideas are not goSome manufacturers are beginning to experiment with online ing to work,” he said. “They are fraught with so many problems and car buying without cutting out dealers from the process. Nissan they constantly remind us that customers say they do not want to launched its Nissan@Home program in December. go into dealerships. But really, we cannot keep our customers out of the showroom.

“The model does not work unless you have an extremely hot car.

When demand is significantly over supplied, you will buy the car online if you cannot get it anywhere. But let the OEMs try selling a car that is not hot on the internet, they will learn real quickly.”

He remains confident, however, that the model will fail. “Let them try it. They will see.”

Meanwhile, MSADA is working closely with dealers and policy makers to ensure that the stakes are made clear as they relate to Chapter 93B. Association Executive Vice President Robert O’Koniewski reports, “The Association works with legislators continuously to make sure our franchise law is not weakened by unnecessary amendments. However, the factories seem content to “Nissan@Home gives customers what they’re asking for – the prod and poke statutory strictures to see what they can get away ability to purchase a vehicle on their terms,” Dan Mohnke, vice with, especially as they move to an EV sales process that seeks to president, ecommerce, said in a statement. “Through this new progive their franchised dealers less and less involvement in the retail gram, Nissan dealers can provide a better customer experience process. Ultimately, if the factories sucessfully bypass franchise which can, in turn, help improve their own business performance.” laws, the consumers will be the biggest losers as price and product The provisions of the program and what it may mean for the recompetition gets eliminated.” lationship between dealers and manufacturers long-term remain to t be seen.

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

NEWS the Horn

DANVERS

Moore GMC Truck Sold to Village Automotive Group Bob and Elaine Moore, loyal General Motors dealers for over 50 years, completed the sale of Moore GMC Truck to the Village Automotive Group in March.

The couple have supported many charitable organizations in the community, including the Food Pantry, The Kiwanis Club, their church, and local hospital. While Bob managed the day-today operations of the dealership, Elaine worked as a nurse and

ner at the three-generations deep Lannan Chevrolet.

Lannan replaces Lindsay Higgins, the former council president who stepped down in March. He will hold the office until the November municipal election.

The council went to 50 ballots deadlocked between Lannan and Christopher Irving, splitting 4-4 on most votes. Five votes, a majority, were needed to make an appointment. After the 50th ballot, the council had a five-minute recess; subsequently Irving withdrew his name. The council then appointed Lannan unanimously.

Irving said he still intends to run for the seat in the municipal election. Charles Viola also received votes on some ballots.

FRAMINGHAM

Catalytic Converter Thefts on the Rise

handled the dealership finances while raising their 10 children.

Bob and Elaine are best known for taking care of their employees as though they were an extension of their own large family.

Village Automotive Group is known throughout the region for its commitment to corporate social responsibility and its support for a wide array of local causes and charities. The Moores are proud to know their charitable activities will be continued and are honored to transfer their dealership to Village Automotive Group in order to insure their legacy in the Danvers area.

Nancy Phillips Associates facilitated this transaction along with associates Bob MacDonald, Esq. of Bernstein Shur and Tim Lerchenfelt, Consultant. The new name of the dealership will be Village GMC Danvers.

WOBURN

Lannan Approved as Ward 7 Alderman Woburn City Council picked Michael Lannan to serve as the Ward 7 alderman until the next election. Lannan is a former partAPRIL 2021

Massachusetts Auto Dealer www.msada.org

Thieves stole nine catalytic converters from Keefe Technical school vans this month -- in line with a nationwide rise in thefts.

Framingham Police spokesperson Sgt. Rachel Mickens told Framingham Source that the thefts from the Keefe Tech vans “probably happened over the last couple of weeks.”

Thieves are stealing the catalytic converter to sell to metal dealers for hundreds of dollars.

Catalytic converters contain titanium, platinum, palladium, or rhodium, which makes them valuable.

MSADA President Chris Connolly told the publication that a catalytic converter replacement can range from $600 to $2,000.

With more vehicles sitting in driveways, and not on the roads, due to the pandemic, sometimes the theft is not noticed right away.

“We have had several stolen this year in various areas,” Mickens said.

Dedham, Cambridge, and other communities in the Commonwealth have also seen a spike in catalytic converters stolen in 2021.

According to the National Insurance Crime Bureau, the pandemic has seen a rapid rise in catalytic converter theft. In 2019, an average of 282 catalytic converters were stolen every month.

In 2020, the average had risen to 1,203.

BOSTON

Optimus Ride Co-Developing AV Shuttles Autonomous shuttle startup Optimus Ride and powersports vehicle manufacturer Polaris are teaming up to co-develop a new lineup of vehicles that will be low-speed, electric, and selfdriving.

MSADA

NEWS from Around the Horn

These low-speed vehicles (LSV) will be equipped with Bostonbased Optimus Ride’s full stack of sensors and software to enable “fully autonomous” driving without a safety driver behind the wheel — though the vehicles will also be monitored remotely by a team of engineers who can offer suggestions to the vehicle when things go wrong.

The vehicles, which can seat six, will be deployed as a last-mile transportation service in residential communities, corporate and academic campuses, and other “localized environments,” as both a fixed-route shuttle and a more dynamic, point-to-point ride-hailing service.

The LSVs will be manufactured under the brand name GEM, which stands for Global Electric Motorcars. Minnesota-based Polaris owns GEM, having acquired it in 2011, and it is also an

investor in Optimus Ride. The startup, which originally spun out of the Massachusetts Institute of Technology, currently uses GEM shuttles as part of its commercial ride-hailing operations in New York City, Boston, California, Washington, D.C., and Northern Virginia.

The vehicles will be rolled out in the second half of 2023. They will be built without traditional controls like steering wheels and pedals, said Optimus Ride CEO Sean Harrington, although there still will be a way to move the vehicles manually. “The intention is we would have all six seats available for passengers,” Harrington told The Verge, “which means where you currently have a driver’s seat, would be another passenger seat.”

Harrington said the decision to co-develop vehicles with Polaris was about making a better autonomous vehicle and also scaling up production to the point where the startup can start to deploy potentially thousands of vehicles.

“There is just a lot more flexibility you have by custom-designing that vehicle with safety and performance built in from the ground up, as opposed to doing it sort of piecemeal,” he said. t www.msada.org

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INFORMATION SECURITY

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DoesJANUARY Your2016Dealership Need a Privacy Checkup?

By Brooke Penrose, Esq. CIPP-US/E & Sara Decatur Judge, Esq. Over the past year, several motor vehicle manufacturers have rolled out new data sharing and privacy agreements to their dealer networks. For example, in the fall of 2020, Fiat Chrysler Automobiles (FCA), now known as Stellantis, asked its dealers to sign an agreement called the “FCA Master Data Sharing Agreement.” This agreement gives Stellantis access to nearly all data that an FCA dealer collects from a customer, including data that is protected by privacy laws.

Similarly, in early 2021, Honda presented dealers with its new “Honda Digital Customer Experience Program” (or HDCX). The HDCX program requires the dealer to sign a licensing agreement with one of Honda’s preferred digital vendors for the purposes of sharing certain data. Both the FCA and Honda programs promise dealers access to lead generation in exchange for participating in the programs.

These types of data sharing agreements between OEMs and dealers are becoming more commonplace. Many of these types of programs require a dealership to represent or promise that it will store and use data in a manner that is in compliance with applicable data security and privacy laws. Dealers often sign these types of privacy and data sharing agreements without giving it much thought; after all, it is a standard industry practice to share certain new vehicle customer sales data with your manufacturer. But dealers should only sign these agreements if they have a privacy program in place that ensures compliance with the OEM’s specific requirements as well as state and federal law.

Complying with U.S. privacy laws can be complicated because privacy is regulated by a patchwork of state and federal laws rather than a single, easy-to-reference law. But most dealers, regardless of size, will need to adopt at least the following in order to adopt a privacy compliant program: • Website Privacy Policy: If your dealership operates a website, it needs to post a clear notice about what information the dealership is collecting about visitors to the website, who the dealership may share information with and why, how it will use the information, how it will keep personal information secure, and what rights visitors have under applicable law. Importantly, this notice needs to be an accurate reflection of your dealership’s actual practices. Repurposing a privacy policy from another organization or internet vendor is typically an ineffective strategy and can even open your dealership up to state and federal investigations for unfair and deceptive trade practices if your dealership is treating personal information inconsistent with how it describes its treatment in the privacy policy.

• Gramm-Leach-Bliley Act (GLBA) Notice: If your dealership arranges any type of financing or leasing services, it probably needs APRIL 2021

Massachusetts Auto Dealer www.msada.org

to provide a standard notice to its financial customers regarding its information collecting, sharing, and safeguarding practices. This notice generally needs to be provided when the person first becomes a customer and then annually for the duration of any direct lending relationship.

• Written Information Security Program (WISP): Various state laws, as well as the GLBA, require an organization to adopt and follow a detailed internal written policy about how the organization will safeguard and protect the personal information it handles. While these policies are somewhat flexible and ultimately need to reflect how your dealership actually will treat personal information, there are several minimum requirements all dealers need to adopt into their WISPs. • Market Lawfully: If your dealership sends marketing text messages, phone calls, or emails, there are various laws that restrict how these activities can be done and what choices you need to offer recipients. For example, marketing emails typically require the sender to include a clear way for the receiver to opt out of future marketing messages. Dealers should also make sure that they carry proper insurance coverage for marketing-related claims.

• Be Careful About Recording Phone Calls: State and federal law restricts recording phone calls. At minimum, most laws require the parties on the call provide some sort of consent to the recording of the call. Massachusetts, for example, requires both parties on the call to consent to recording. Dealers should make sure that they are giving proper consent to all customers prior to recording any telephone call.

• Most Importantly, Live Up to Your Promises!: None of these documents mean much if your dealership does not actually follow its own policies. It is critical that your team is trained on, understands, and follows these policies.

The landscape for data and privacy laws is ever-changing, and most OEM agreements we have seen push data privacy responsibilities back onto the dealership. Taking stock of your dealership’s current privacy practices (and implementing the proper privacy programs) can prevent expensive headaches down the road. We urge all dealers to take steps to ensure that their privacy notices are in compliance with both your OEM’s program and applicable law. t Attorney Sara Judge is cochair of the Automotive Group at Burns & Levinson LLP. Attorney Brooke Penrose works in the firm’s Intellectual Property Group, counseling dealers and other clients on

and privacy concerns.

Contact Sara Judge at sjudge@ burnslev.com, (617) 345-3211, and Brooke Penrose at bpenrose@ burnslev.com, (617) 345-3287. data

MSADA

LEGAL

By Joseph W. Ambash and Jeffrey A. Fritz

Do Not Lose Site of the Basics: Counting Time Massachusetts’ minimum wage regulations require employers to “keep a true and accurate record” of, among other things, “hours worked each day” and “dates worked each week” by each and every employee. Sounds simple. Sometimes it is. Many times it is not.

“Working time” in Massachusetts includes all time during which an employee is required to be on the employer’s premises or to be on duty, or to be at the prescribed work site or at any other location, and any time worked before or after the end of a normal shift to complete work. This includes rest periods of short duration, usually twenty minutes or less.

It does not, however, include meal times so long as the employee is relieved of all work-related duties during that time.

Employers need to ensure employees punch in at the beginning of their shifts and punch out at the end of their shifts. Again, sounds simple, but employees invariably neglect to do so from time to time (some more frequently than others). Accordingly, it is best practice for each manager to review all of his or her subordinates’ timecards on a weekly basis to ensure accurate and complete punches. If gaps exist, the manager should address the issue with the subordinate as soon as possible, adjust the timecard accordingly, and have the employee initial or sign off on the adjustment.

What about meal breaks?

You should require your employees to punch out to take meal breaks and punch back in when they return to work. You should not use any sort of automatic deduction method for meal breaks. These are by definition inaccurate and frequently the subject of litigation (which the employer is likely to lose). And you should ensure employees’ meal breaks are uninterrupted.

If they are interrupted, that could mean some or all such time is compensable. For this reason, you should require employees

to take their meal breaks at a location other than where they work (and if they are interrupted, account for such time appropriately).

What about travel time?

Travel time can be tricky. Obviously, an employee’s typical commute is not compensable. But if an employee travels at the beginning or end of the day outside of his or her typical commute for the employer’s benefit (such as to drop off mail at the post office, deposits at the bank, or something for a customer), such time (over and above the typical commute) is generally compensable. The same goes for travel during the workday. If an employee travels in the course of his or her employment, such time is compensable. And if an employee is using his or her own vehicle, an employer must reimburse his or her expenses.

What about on-call time?

An employee’s time spent “on-call” may or may not be compensable, depending on the facts and circumstances. If the employee is required to be at a worksite or other location and is not effectively free to use his or her time for his or her own purpose, then the time generally is compensable. If, however, the employee generally is free to be wherever s/he wants and do whatever s/he wants, such time is not compensable. There are obviously lots of in-betweens there, which may or may not be compensable. When in doubt, employers may want to err on the side of treating such time as compensable (to avoid the draconian penalties associated with getting it wrong).

What about time spent getting a COVID-19 vaccine?

The answer here will depend on whether or not you mandate getting the vaccine.

If you do then, yes, such time is compensable. That said, if you want to encourage www.msada.org

employees to get the vaccine (which may be easier during the workday), it probably is not a bad idea to treat such time as compensable. While the incentive rules surrounding the COVID-19 vaccine are somewhat unclear at this point, there is likely little risk in doing so.

What about reporting pay?

Keep in mind that Massachusetts has a reporting pay requirement. In short, if an employee is scheduled to work three or more hours, reports for duty as scheduled, and is relieved of duty during the shift, the employee must be paid for at least three hours that day (even if s/he only worked ten minutes), at no less than the Massachusetts minimum wage per hour.

An employer without accurate time records is a sitting duck when it comes to wage-and-hour claims. Even innocuous violations are actionable, frequently by way of class or collective action, and with automatic treble damages and attorneys’ fees. Accordingly, employers are well-advised to police employee timekeeping. It is not enough to have a policy. You have to ensure your employees adhere to it. Failure to do so results in otherwise unnecessary, and potentially very costly, risk for your dealership. t

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

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BUSINESS OPS

MSADA

How to Manage a Proper Credit Card Payment Compliance Program Within Your Dealership

By Scott Spatz Cooperative Systems

What is Payment Card Industry Data Security Standard (PCI DSS), and why is compliance important to your auto dealership?

The PCI Standard is a set of security standards required by credit card companies to ensure ALL businesses that accept, process, store, or transmit credit card information maintain a secure environment, protecting them against identity theft.

But before we get too technical, here are some statistics to keep in mind as you navigate the process of protecting your payment data: • Payment-related cybercrime will reach $6 trillion annually by the end of 2021.

• The leading tactic used in phishing and cyberattacks to steal payment data is social engineering. (Cyberattacks are the #1 issue for luxury auto dealerships and lenders.)

• Every 11 seconds, a ransomware attack steals payment data from a US dealership.

Basically, if you accept or process any sort of payment, then you need to comply with PCI DSS. PCI covers all technical and operational practices needed to prevent data theft.

How PCI compliance works PCI has 4 compliance levels based on your dealership’s annual transaction volume. Level 1 is the strictest (highest volume) and level 4 is the simplest (lowest volume).

How do you determine which level apAPRIL 2021

plies to your dealership? Most dealerships can use a Self-Assessment Questionnaires to figure it out. However, you should also consult your merchant services provider for more details regarding requirements specific to your transaction volume.

Once you identify your level, you will need to outline the problems and potential PCI issues that your dealership faces, so you can apply the right payment management methodology.

Here are some PCI payment problems that you might be facing: • You lack an encryption process.

• You struggle with segmenting and securing credit card processing data.

• You do not have a separate network or VLAN in place for devices transmitting credit card data to their processor.

• Your employees lack training, making them easy targets for scammers and data theft ploys.

• You lack a consistent, streamlined process for securely storing or destroying customer credit card info collected over the phone.

• You lack a clear, access-controlled process for storing credit card or financial info on your network and devices.

Bottom line: The success of your PCI compliance is predicated on how thoroughly you address and resolve the above issues.

Reduce risk and avoid issues with the rising popularity of cryptocurrency Cryptocurrency is becoming more and more popular. In fact, it has grown steadily as a legitimate medium of exchange despite most consumers’ and businesses’ limited understanding of it.

In the highly competitive world of automotive retail, you need to stay on top of emerging payment trends to meet customer expectations and demands, especially since companies have already announced their plans to accept bitcoin

Massachusetts Auto Dealer www.msada.org

payments making it a viable option you cannot avoid. The key to reducing your risk and eliminating PCI issues, especially with cryptocurrency, is to maintain a secure network, protect cardholder data, and implement strategic permission measures.

What are the risks of not being PCI compliant?

A dealership that fails to take the steps necessary to protect customers’ credit card data is an easy target for any cybercriminal looking to steal and exploit that info.

If your payment data is breached due to non-compliance, not only will you face fines ranging from $5,000 to $500,000, but you could also be placed in a “level 1” requirement regardless of how many transactions you process annually. This means you will be forced to follow a stricter and more difficult payments process while also having to pay higher costs.

Bottom line: The more you comply with the PCI Standard, the safer, more secure and simpler your payments process will be, making it easier for your customers to buy cars from you.

Here is how your dealership will benefit from being PCI compliant: • It is much cheaper than the alternative (e.g., data breaches, unhappy customers, lengthy and difficult payments processing that leads to lost sales, etc.); • Avoidance of large fines and additional laborious reporting requirements that are difficult to follow and could interfere with efficient payments processing and threaten your car business; • Stay up to date on the latest payment trends, such as cryptocurrency, helping you retain your competitive edge.

The most important question to ask yourself is this: Does my dealership have a proven process to ensure and maintain PCI compliance? t Scott Spatz is president of Cooperative Systems. Reach Scott at sspatz@coopsys.

MSADA

ACCOUNTING

Threat Level Midnight

JANUARY 2016

By Frank O’Brien O’Connor & Drew, P.C. Email: fobrien@ocd.com

The second half of 2020 was a perfect storm for dealership profitability. Factory shutdowns resulted in low inventory levels and, in turn, higher per unit gross profits. Additionally, the pent-up demand from the early stages of the COVID-19 pandemic and extra disposable income for consumers caused sales to rebound in the second half of the year.

When the dust settled, the industry experienced some of the most profitable months we have ever seen with many dealerships setting store profitability records. That momentum seems to have carried into the early part of 2021 with inventory levels remaining low due to supply chain issues, such as the microchip crisis and shipping limitations.

Despite this tremendous success, dealers should be on alert as higher profits tend to increase the risk of employee embezzlement. To put it simply, the more money you make, the more money there is to steal. It is much easier to conceal a $100,000 fraud when the dealership is netting millions of dollars of profit than when the dealership is fighting to break even. Additionally, some dealerships have experienced a reduction in staffing due to COVID-19, placing a greater burden on the current employees to complete the essential tasks. Not all industries were as fortunate as the automobile industry, as lost sales from service businesses, such as restaurants, airlines, and hotels, cannot be recouped.

In fact, many people continue to struggle as the pandemic lingers and unemployment levels remain well above pre-pandemic rates. Some are spouses or direct relatives of your employees. Com-

bine these factors together and all three elements of the fraud triangle are running at high levels.

The Association of Certified Fraud Examiners reports that fraud increases in recessionary periods, and that the average fraud lasts for 18 months before it is uncovered. That statistic means it is likely that the fraud starts during or towards the end of the prosperous period and is identified during the recession. Either way, the current economic climate is unique in that some businesses are thriving while others are struggling.

How confident are you that your internal controls will prevent or detect fraud if it were to occur? Who is verifying that the internal controls are operating effectively?

Oftentimes, dealerships implement internal controls that work at first, but, as time passes, those controls either are circumvented or fall by the wayside in favor of efficiencies. As the saying goes, it is critical that you inspect what you expect.

Below are some basic internal control procedures that every dealership can implement to help prevent or detect fraud: • The dealer principal or general manager should sign all checks and review all cancelled checks each month.

• An individual that does not have access to accounting and the bank account should reconcile the bank statement each month. Multi-franchise dealerships can have controllers/office managers of other stores prepare the bank reconciliation on a rotating basis.

• The controller or office manager should provide the dealer principal or general manager with the key schedules each month with explanations for any aged balances.

• The dealer principal or general manager should review the company credit card statement every month.

• The dealer principal or general manager should review the payroll register on at least a quarterly basis to identify unauthorized pay increases, unreasonable bonus/commission amounts, or ghost www.msada.org

employees.

• The sales department should perform a physical inventory of new and used vehicles. Accounting should reconcile it to the general ledger.

• Management should hire an outside third party to perform an annual parts physical inventory. The controller should reconcile the physical to the general ledger.

• The controller should prepare a monthly parts inventory reconciliation.

• The service manager should provide an open repair order list to the dealer principal or GM monthly with explanations for all open ROs. • The service director should review the exceptions report daily and follow up on any trends.

• The parts department should prepare cycle bin counts weekly and submit the results to the GM. • Access to administrative rights to the DMS should be restricted to the IT manager only.

While these processes will not necessarily catch every fraud, they will help management identify control deficiencies and give employees the impression that they are being monitored. It is also critical to perform transactional analysis of key documents (e.g., repair orders, deal jackets, parts sales invoices, daily deposits, vendor invoices, bonus/commission calculations, etc.). This should be done by the departmental managers and by someone independent of the process.

Finally, as we continue to progress into a more digital age, dealerships should incorporate data analytics into their financial analysis. Data analytics allow users to review and analyze large sets of data covering different time periods. This helps to identify both performance trends as well as irregularities in the data that could indicate fraud, waste, or abuse. Once such irregularities are identified, it allows management to streamline their efforts to investigate and quantify potential issues. t Massachusetts Auto Dealer

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26 MARCH 2021

Patrick Manzi

NADA Senior Economist

Boyi Xu

Economist

New light-vehicle sales in March 2021 were stellar. March’s SAAR of 17.75 million units is the second highest of all time for the month and just shy of March 2000. March 2021 sales were likely spurred on by delayed sales caused by severe winter weather in February and a boost from stimulus checks that began to hit consumers’ bank accounts following the passage of the Biden

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administration’s COVID-19 relief bill. Sales in first quarter 2021 equated to a SAAR of 16.8 million units, up significantly from the SAAR of 14.8 million units in Q1 2020—the first quarter affected

by COVID-19. Sales in Q1 2021 came in just below the more typical SAAR of 16.9 million units in Q1 2019. t

MSADA

NADA MARKET BEAT

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AIADA Brief

MSADA MSADA

The Quiet Before the Storm

Keeping dealers involved in the political process is tricky, and critical The sweeping infrastructure proposal has a long way to go before becoming a law, and it will require buy-in from a number of disparate groups. Throughout that process, AIADA will guarantee AIADA President that the voices of international nameplate & CEO dealers are not drowned out by competing interests. We will do the same when it comes to trade – an issue area around which the Biden administration has been tight-lipped. Today, the threat of tariffs on autos and auto parts remains, as well In D.C., something is always happenas questions regarding future trade agreeing. ments.

In fact, when things seem relatively There are dealers out there, and I have calm, as they do now, that is when the talked to quite a few of them, who do not behind-the-scenes action is most intense. understand why they need to be active After all, it is not in the highly publicized in politics. They regard the political prohearings or committee meetings where cess as so deeply off-putting impactful policy changes octhat they do not see any point cur. It is in the back rooms and in wading into policy debates. corridors of the Capitol, on the And, honestly, I do not blame quiet days, when the sausage them. Particularly in recent gets made. And right now, still years, political division and not 100 days into President Joe rhetoric have reached new Biden’s presidential adminislows. Why would you engage tration, the sausage is really if you do not have to? The getting made. thing is, no matter how much As a dealer association you do not like politics, poliand an advocacy organizatics is still happening. It is far tion, AIADA can never take better to sit around the table as our eyes off the ball. At the part of the process than be on “It is far better to sit around moment, we are following a number of issues on behalf of the table as part of the process the table, getting carved up.

Rest assured, as the storm our international nameplate than be on the table, getting rages around us, AIADA will retailers. They include the have a presence at the table in deepening crisis of shrinking carved up.”

Washington, D.C. It is what we inventory caused by material do – it is ALL we do. We are on top of broaden the acceptance of EVs works not shortages – like microchips, foam, and just for consumers, but also for dealers the federal issues that impact your botnow rubber – that is disrupting productom line so that you can keep your focus who need to know how demand will be tion and idling auto plants. With supply where it belongs, on your business. I look met as well as the structure of the reimchain issues impacting the ability of reforward to the fight ahead, and the bright bursement process.

Solutions must work tailers to meet customer demand, AIADA future AIADA will work to secure for its for both the American consumer and auto is working in Washington to ensure that members. retailers of ALL brands. Anything else is our government response is both robust t a legislative failure. and creative. We need our lawmakers to

By Cody Lusk

APRIL 2021

explore every possibility and solution to this pressing problem, just as dealers do the same to meet customer demand.

AIADA has also been closely following, and weighing in on, the president’s proposed $2 trillion infrastructure bill, which would be paid for, in part, by a corporate tax hike. The American Jobs plan covers not just infrastructure, but also the environment and employment.

Currently the proposal earmarks $100 billion (yes, billion, with a “b”) to incentivize consumers to buy electric vehicles.

To put that in perspective, the 2009 Cash for Clunker program was funded with $3 billion.

AIADA is actively working to ensure that the Biden administration’s push to

Massachusetts Auto Dealer www.msada.org

MSADA

TRUCK CORNER

Get to Know Your ATAEs

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

Throughout the pandemic, ATD’s advocacy work has continued uninterrupted in the nation’s capital, and many other issues are being tackled at the local and state levels. Luckily, ATD isn’t alone in its mission. We have the privilege of working with state and metropolitan dealer associations through the Automotive Trade Association Executives (ATAE).

I have come to know the dedicated members of ATAE as the “boots on the ground,” battling some of the most complex issues that dealers face each year.

As our industry continues to gain momentum and navigate a new political environment, the relationship that truck dealers have with their state and metro dealer associations is more important than ever.

ATAE is a force to be reckoned with, representing the executives of more than 100 state and metropolitan dealer associations in the United States. Along with your NADA and ATD leaders, they tackle the legislative, regulatory, educational, and business needs of our members. One of the most valuable aspects of working with an ATAE is the collaboration and exchange of information that happens on a single issue. Our current work to repeal the harmful and outdated federal excise tax is a collective mission among truck dealers, ATAEs, and other leaders throughout various industry associations.

Together we make great strides and accomplish things that would be virtually impossible to do alone, such as having dealerships deemed essential businesses at the start of the COVID-19 pandemic last year. Moreover, ATAEs constantly work in unison with ATD, making our efforts quick and efficient. I have seen them halt regulators in their tracks, quickly respond in moments of crisis, and fearlessly lobby on dealers’ behalf.

It is a privilege to work with Bill Sepic, president of the Wisconsin Auto and Truck Dealers Association, who is our current ATAE liaison on the ATD board. I can tell you that ATAE members like Bill take great pride in their work and the role they play in helping to secure the future of the commercial truck industry. ATD will be working hard in the next few months, collaborating with our ATAEs to strengthen dealer engagement and find solutions to our most pressing challenges.

I urge all truck dealers to be active in and engaged with your respective state and metro associations.

A good place to start is getting to personally know

your state and metro area ATAEs. If you don’t already know them, pick up the phone and introduce yourself. And ask how you can help.

ATD’s Q1 Nationwide Sales Analysis Commercial truck sales started the year off well, with total sales of 98,404—an increase of 15.8% from first quarter 2020. Heavy-duty truck sales totaled 47,515 and medium-duty sales totaled 50,889 in Q1 2021, up 14.1% and 17.4% respectively from Q1 2020. Sales increased due to increasing demand from freight companies, but also because Q1 2020 was the first quarter where sales were slammed by COVID-19.

The pandemic’s impact is clearer when looking at total commercial truck sales this March, which were up by 36.7% from March 2020. Expect similar jumps in sales in Q2 2021, as the industry will certainly post significant gains compared with the lows seen in the initial months of COVID-19.

Orders for Class 8 trucks continue to skyrocket.

According to ACT Research, Class 8 truck orders in March were 40,000 units, down slightly from February’s 44,191 but up by 424% from March 2020.

This March marked the sixth straight month that orders topped 40,000 units. Class 8 orders were well above replacement demand, which is around 19,000 units per month. Class 8 demand should be strong for at least the next few months as freight companies place orders in response to customer demand and elevated freight rates.

The semiconductor microchip shortage that has hurt light-duty vehicle sales is also slowing commercial-truck production, with some OEMs reporting production shortfalls in Q1 2021. Shortages of rubber and resin, both key to vehicle production, have also caused headaches for OEMs. These supply chain issues sting a little more, given strong demand for freight amid the economic recovery from the pandemic and just as the Biden administration has landed $1.9 trillion in new stimulus spending.

These supply issues on the new-truck side should cause a tailwind for used-truck sales. Despite these challenges, look for continued sales improvement throughout the rest of the year. For 2021, we expect medium-duty truck sales of around 240,000 units and heavy-duty truck sales of some 250,000. t

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NADA Update

By Scott Dube

Planning for Vegas, and Battle 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.

First, I encourage you to read this month’s cover story for an important update on the increasing presence of OEMs’ online sales platforms. As I said there, NADA continues to monitor this issue, and we are dedicated to ensuring that dealer franchise rights remain sacrosanct.

Rather than appear to be on the defensive, we need to find a way to help policy makers understand the role we play in the vehicle buying process. Buying a car will never be like buying a pizza. There is too much at stake to leave consumers holding the bag when issues of safety and maintenance arise, and the relationship we have built over a century means hundreds of thousands of jobs hang in the balance.

We say it day-in and day-out: It is time to get involved.

Call your local legislators and invite them to your dealership.

Have them meet your employees. Ask them if they really believe the consumers and our employees will be better off with fewer stores run by multinational conglomerates far away from Massachusetts. It is high time we on Main Street challenge the unholy alliance of big business and big government. They need to understand our reality more deeply than what the headlines allow for, especially now. If you ever need help in getting started, we are here to assist you.

Q1 Numbers Released NADA issued its analysis of U.S. auto sales and the economy following the end of the first quarter of 2021.

“The coronavirus pandemic definitely had an impact on vehicle sales in 2020; while demand was strong, inventory was challenging given manufacturing facility closures and the chip shortage that began to heat up at the end of the year,” said NADA Chief Economist Patrick Manzi. “New light-vehicle sales in 2020 came to a close with 14.46 million units.”

While 2020 sales were down 14.7% compared to 2019, sales in the first quarter of 2021 were extremely strong.

The seasonally adjusted annual rate (SAAR) for March was 17.75 million units, the second-highest March of all time, coming in slightly behind the SAAR in March 2000, with the 2021 first quarter SAAR at 16.8 million units, up significantly from the first quarter of 2020 SAAR of 14.8 million units.

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NADA now estimates new light-vehicle sales at 16.3 million units for the year, up from the original 2021 sales forecast of 15.5 million units and a 12.7% increase compared to 2020 sales.

Average incentive spending per unit totaled $3,452, a decrease of $963 and $336 relative to March of 2020 and March of 2019, respectively.

As demand remains high for new vehicles, vehicle production continues to be negatively impacted by the shortage of microchips. Inventory at the end of the first quarter of 2021 was 12.8% lower than at the beginning of the year with fewer choices on dealer lots. At the end of the first quarter of 2021, industrywide supply fell to 39 days from 48 days at the beginning of the quarter. If sales remain strong in April without a significant boost of inventory, a decline in sales by late in the second quarter is expected due to low inventory levels.

In the first quarter of 2021, production was also impacted by a reduced supply of resins used in many automotive parts, as well as by severe winter storms that caused manufacturing closures. The chip shortage is extending into the second quarter and will cause further vehicle production losses; North American vehicle production is expected to total 15.8 million units in 2021.

“We expect that production shortages will continue to impact new-vehicle sales for at least the second quarter and likely spill over into the third quarter,” added Manzi. “The longer these production disruptions linger, the longer it will take for automakers to rebuild inventories to levels necessary to meet demand, and the less likely it is that automakers will be able to make up sales lost to both retail and fleet customers.”

Inventory shortages for new vehicles continue to support robust used-car sales and values alike. After moderating for the final months of 2020, used-vehicle prices began to climb in the first quarter of 2021. NADA anticipates used-vehicle market activity will remain elevated into the summer as the industry continues cope with new-vehicle production and inventory difficulties.

At the macro level, NADA anticipates that real GDP for the 2021 to reach 6% to 6.5%. In the labor market, initial jobless claims have fallen below one million per week, but remain at historically high levels. According to the Bureau of Labor and Statistics March jobs report, 916,000 jobs were added and revisions upward were made to January and February reports. As vaccinations continue, jobs gains are expected in the second quarter of the year with more Americans returning to daily life. At franchised new-car dealerships, employment totaled 1,077,900 at the end of 2020, a strong improvement after bottoming out in April 2020 at 888,000. NADA

MSADA anticipates pent-up demand for travel and services spending as the economy reopens; the savings Americans have built during the pandemic will also play a role, but will not be a major driving factor of economic expansion.

“The economy continues to show strong signs of recovery from the coronavirus pandemic,” said Manzi. “The widespread dissemination of the COVID-19 vaccine and the stellar new light-vehicle sales in March are reasons to be optimistic for the remainder of 2021.”

NADA Show Speaker Applications Now Available Each year at NADA Show, dealers, managers, and allied industry partners learn the latest strategies and emerging trends in the automotive industry through industry-leading workshops and education sessions. These sessions are led by NADA Academy instructors and industry experts hand-selected to present on the topics most important to dealership business today.

This year, dealers have their sights on post-pandemic recovery and the future of their businesses. This means taking an assessment of every department in their dealership and making the right improvements that will place them on the right path moving forward.

NADA Show 2022 will support the dealerships of tomorrow by teaching dealers how to hire the best personnel, grow the talent they already have, stay on top of what customers need and want, and stay ahead of the industry trends that matter most.

Think you have what it takes to teach dealers about the future of the industry and prepare for success? NADA Show 2022 attendees are ready to hear your message!

Topics are suggested for proposal under the following workshop tracks for NADA Show: • *New* Business Essentials & Innovations – Identify the latest information that is of vital importance to your operations and innovations that are crucial to the continuing success of your organization.

• Fixed Operations – Improve performance and profitability in your parts and service departments, including the body shop.

• Human Capital – Get proven strategies on talent recruitment and management, improving dealership culture, and building diversity and inclusion to help you find, hire and retain the stellar talent that will drive your business’ success.

• Leadership – Develop confident and competent leaders in your organization by supporting growth from the inside out. Get the tools to train and nurture team leaders who will take your business to the next level.

• Marketing – Learn the most up-to-date marketing strategies to find and connect with new customers, build your

dealership’s brand, encourage repeat business, and stay ahead of the competition.

• Variable Operations – Optimize vehicle inventory management in order to improve new and pre-owned sales and gross, including F&I, and increase overall dealership profitability.

• Digital Super Track – This track is laser-focused on the complex world of digital retailing to help dealers maximize their digital presence and online transactions. Learn to navigate the constantly changing world of digital marketing for dealerships.

Submissions for workshop proposals will continue through June 4 for NADA Show 2022 in Las Vegas, taking place March 10-13. For more information, go to www.nada.org.

NADA Partners with EPA in ENERGY STAR Program to Support Environmental Efficiency Franchised dealerships are committed to environmental protection and energy efficiency. In the spirit of this commitment, dealers are making continuous improvements to increase the energy efficiency of their facilities. These investments include targeted reductions of electricity used for lighting, heating/cooling, and machinery.

NADA is excited to highlight its partnership with the Environmental Protection Agency’s (EPA) ENERGY STAR program to promote these energy efficiency practices. Currently more than 5,000 dealers are benchmarking their energy use through the EPA’s Portfolio Manager tool. ENERGY STAR certification recognizes businesses for outstanding cost-saving, energy efficient initiatives.

Before franchised car and truck dealerships can obtain ENERGY STAR certification, NADA must collect baseline comparative nationwide data on dealership energy use.

NADA is calling on dealers to help by having an office or facilities manager complete the voluntary, 20-minute survey on their dealership’s energy use.

Once NADA receives the valid energy survey responses needed, NADA and EPA will create an ENERGY STAR certification baseline for franchised dealerships, allowing dealers to compare their energy performance with that of other dealerships nationwide in a simple, easy-to-understand report. All dealers will be able to use the report to target areas where future energy-use reductions – and cost savings – can be made. And, top-performing dealerships may be eligible for the coveted ENERGY STAR certification.

Help with this important project by taking the survey at www.nada.org. The deadline to complete the survey is Saturday, June 5. If you have more than one dealership location, please fill out a separate survey for as many locations as possible. Please email any questions to energysurvey@ nada.org. t www.msada.org

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