West to Honor one of the Berkshires’ finest, tDoy george Haddad
ftc Actions Against Auto Dealers As Biden Administration nears end
recent Decision impacts Dealer reimbursement under Prepaid Maintenance contracts
oPs: Driving Success – the 5-4-3-2-1 framework for Auto Business
oPs: Has ransomware Become routine?
oPs: Securing your Dealership’s future – the Vital role of the Chief Information Security Officer
oPs: What’s the Plan?
UPdAte: Winding Down 2024 as We Prepare for 2025 ADVertiSing rAteS inquire for multiple-insertion discounts or full Media Kit. e-mail jfabrizio@msada.org
Looking Ahead To 2025
By Jeb Balise, MSADA President
With 2024 now approaching the record books, it is time for us to look ahead to where our industry is heading.
Among the many things I have learned during my tenure as MSADA President, I have seen that Bob, Jean, and the Directors are a truly dedicated bunch. MSADA is here to protect the interests of our member dealers on many levels. We have a hard-working Board of Directors working to advocate for the dealer community, and they are always looking for what more can be done. The same goes for our MSADA office, where Executive Vice President Robert O’Koniewski is always looking for new ways to provide service to our members.
At our stores, there are those matters we know we need to get right all the time – wage compliance, HR training, workplace safety rules, and tax planning, just to name a few. While these are all the things we can control in our businesses, it keeps getting more complicated. It is essential we focus more time and effort on them. Your Association is here to help navigate the web of complex regulations.
we
look forward to a White House and Congress that may provide a respite to the over-regulation we have experienced over the last several years.
There is much uncertainty ahead in the federal legislative and regulatory arenas. After the uncertainty during a stressful election season, we look forward to a White House and Congress that may provide a respite to the over-regulation we have experienced over the last several years. As the year progresses and your Association continues to work for you, we will rely on your help. Our elected representatives require our input. When you see the issues we are fighting against, when you see that our stories need to be relayed to our legislators, think about how you can contribute to our efforts in the next year. We are going to continue working together to make sure the voice of small businesses does not get lost here on Beacon Hill or down in Washington.
Finally, within all our communities, among us are shining examples of the best we offer. I look forward to seeing George Haddad carry the Massachusetts banner as our Dealer of the Year candidate at the NADA Show in New Orleans in January. I have known George for over twenty-five years. His dedication to Pittsfield and the Berkshire community is an inspiration we all can follow.
In closing, I hope you all have been able to spend the holiday season with those who are most important to you. They are, after all, why we do what we do every day. On behalf of the MSADA family, I wish you, your team, and your family a healthy and successful 2024.
MsaDa BoaRD
Barnstable County
Brad tracy, tracy Volkswagen
Berkshire County
Brian Bedard, Bedard Brothers Auto Sales
Bristol County richard Mastria, Mastria Auto group
Essex County
William Deluca iii,
Bill Deluca family of Dealerships
Paul Bertoli, Priority chryslerJeep Dodge ram
Franklin County [open]
Hampden County
Jeb Balise, Balise Auto group
Hampshire County
Bryan Burke, Burke chevrolet
Middlesex County 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 [open]
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
chris connolly, Jr., Herb connolly chevrolet
NADA Director
Scott Dube, Mcgovern Hyundai rt.93
OFFICERs
President, Jeb Balise
Vice President, Steve Sewell
Treasurer, Jack Madden, Jr.
Clerk, c harles tufankjian
ACV Auctions
MSADA A SS oci Ate M e M ber S D irectory
Steve Sirko (856) 381-3914
ADESA
Elizabeth Morich (508) 270-5400
Albin, Randall & Bennett
Barton D. Haag (207) 772-1981
Allied Recycling Center
Joseph Castaneda (781) 316-7180
Ally
Maryanne Recupero (617) 997-9574
American Fidelity Assurance Co.
Kathleen Weisenbach (402) 523-5945
America’s Auto Auction Boston
Chris Colocousis (774) 218-8930
ArentFox LLP
Paul Marshall Harris (617) 973-6179
Sarah Decatur Judge (617) 973-6184
Armatus Dealer Uplift
Joe Jankowski (410) 391-5701
Assurant Dealer Services
Sean Skinner (603) 660-3647
Auto Auction of New England
Steven DeLuca (603) 437-5700
Bank of America Merrill Lynch
Dan Duda and Nancy Price (781) 534-8543
BCI Financial Corp.
Timothy Rourke (860) 302-7127
Bellavia Blatt
Leonard Bellavia (516) 873-3000
Broadway Equipment Company
Fred Bauer (860) 798-5869
Brown & Brown Dealer Services
Jason Bayko (508) 624-4344
Cambridge Trust
David Sawyer (617) 620-3484
CBIZ
Nichole Rene (203) 781-9690
CDK Global
Rob Steele (508) 564-1346
Clifton Larson Allen
Nick Chappell (508) 930-2199
Cooperative Systems
Scott Spatz (860) 250-4965
Cox Automotive
Polly Penna (303) 981-1298
Creative Resources Group
Charlie Rasak (508) 726-7544
CVR
John Alviggi (267) 419-3261
Dave Cantin Group
Woody Woodward (401) 465-7000
Dealer Alchemist
Jeremy Wilson (804) 564-5740
Dealer Pay
Shannon Wischmeyer (636) 293-8038
Downey & Company
Paul McGovern (781) 849-3100
DP Sales Distributors
Andrew Prussack {631) 842-7549
Driving Dealer Performance
Kimberly Guerin (978) 760-0322
EasyCare New England
Greg Gomer (617) 967-0303
Electric Supply Center
Jennifer Williams (781) 265-4272
Ethos Group, Inc.
Drew Spring (617) 694-9761
F&I Direct
Sean Wiita (508) 414-0706
Michelle Salas (508) 599-0081
Federated Insurance
Kevin Sundberg (559) 547-9694
Fisher Phillips LLP
Jeff Fritz (617) 532-9325
Josh Nadreau (617) 532-9323
Freedom Solar Power
Ryan Ferrero (970) 214-4433
GW Marketing Services
Gordon Wisbach (857) 404-0226
Hilb Group
James Pietro (508) 791-5566
Huntington National Bank
Mark Flibotte (781) 724-3749
iHeart Media
Jane Cogliano (781) 844-8951
JM&A Group
Chris “KC” Hwang (954) 415-6961
JM Electrical Co.
Christopher Cedrone (781) 581-3328
John W. Furrh Associates Inc.
Pamela Barr (508) 824-4939
Key Bank
Tom Flynn (716) 998-6247
KPA
Abe Cohen (503) 902-6567
M & T Bank
John Federici (401) 642-5622
McWalter Volunteer Benefits Group
Shawn Allen (617) 483-0359
Merchant Advocate, LLC
Dan Giordano (973) 897-2778
Mintz Levin
Kurt Steinkrauss (617) 542-6000
Murtha Cullina
Thomas Vangel (617) 457-4000
Nancy Phillips Associates, Inc.
Nancy Phillips (603) 658-0004
National Business Brokers
Peter DiPersia (603) 881-3895
National Grid
Nicole Caruso-Carlin (347) 426-6331
NEAD Insurance Trust
Charles Muise (781) 706-6944
Northeast Dealer Services
Johna Cutlip (401) 243-7331
OCD Tech
Michael Hammond (844) 623-8324
Performance Brokerage Services
Jacob Stoehr (847) 323-0014
Performance Management Group, Inc.
Dale Ducasse (508) 393-1400
Piper Consulting
Jim Piper (207) 754-0789
Plug In America
Joel Levin (237) 925-1364
Portfolio
J. Gregory Hoffman (800) 761-4546
Priority Payments Local
Andrew Pollina (732) 372-4352
Pullman & Comley LLC
James F. Martin, Esq. (413) 314-6160
Reynolds & Reynolds
Austin Ziske (802) 505-0016
Rockland Trust Co.
Joseph Herzog (508)-830-3241
Santander Bank
Richard Anderson (401) 432-0749
Chris Peck (508) 314-1283
Schlossberg, LLC
Michael O’Neil, Esq. (781) 848-5028
Shepherd & Goldstein CPA
Ron Masiello (508) 757-3311
Southern Auto Auction
Joe Derohanian (860) 292-7500
Sprague Energy
Steve Borelli (508) 768-5252
The Towne Law Firm P.C.
James T. Towne, Jr. (518) 452-1800
TrueCar
Lauren Bailey (703) 909-1625
Truist
Andrew Carmer (401) 409-9467
Twelve Points Wealth Management
Taylor Duffy (978) 318-9500
US Bank
Vincent Gaglia (716) 649-0581
Wells Fargo Dealer Services
Rich DeFreitas (857) 205-2780
Withum
Kevin Carnes (617) 471-1120
Zurich American Insurance Company
Steven Megee (774) 210-0092
Legislature Rolls to an Early Close
By Robert O’Koniewski, Esq. MSADA Executive Vice President rokoniewski@msada.org
Follow us on X (formerly Twitter) • @MassAutoDealers
In what is the never-ending legislative process here in the Commonwealth, as one session came to a close, another one began.
Upon the Legislature’s completion of its 20232024 session, a day early on December 30, returning members and newly elected legislators came together on New Year’s Day to kick off the 194th General Court’s next two-year session.
Although the rules allowed the Legislature to remain in session to undertake pending matters up until midnight of the first Wednesday in January (December 31 being the last day of this year’s session), legislators decided to work through the evening of December 30 to get their work completed, a departure of previous session-ending evenings which usually saw them go well past midnight in defiance of the state constitution and the rules.
After taking considerable heat from the governor, the media, and interest groups for leaving nine substantive matters unfinished at the July 31 deadline for controversial matters, legislative leaders decided to work through the Summer and past election day to send agreements to the governor on those nine matters plus well over a hundred more in the last few weeks alone.
As written about previously, two of those items were of interest to our industry – an economic development package, which included the creation of an advisory board on auto body labor rates within the Division of Insurance, and a clean energy bill, which included funding for various EV-related infrastructure projects.
By the final weekend of the year, legislative leaders announced deals on two health care bills that languished past the Summer – a hospital and health care oversight bill and a prescription drug cost control bill. Having finished the last two of the nine, the
Legislature shut down the session, having sent over 100 bills, mostly local matters, to Governor Maura Healey for her review and signature. The governor will have the ability to pocket veto items by taking no action because of the session’s completion.
Coming together on January 1 to begin the 194th General Court, each chamber’s leader – House Speaker Ron Mariano and Senate President Karen Spilka, both Democrats – was overwhelmingly re-elected to their posts. Republicans Rep. Brad Jones and Sen. Bruce Tarr were elected the minority caucus leaders in each’s respective chamber.
Early on, one of the key items legislators will take up is a rules package that may alter the current legislative schedule, especially how matters could be addressed in the second half of the even-numbered (election) year.
January 1 also brought additional good news for legislators – a pay raise. As demanded in the state constitution, Gov. Healey announced that legislators are due an 11 percent raise, matching what her office said was the rate of growth in Massachusetts median household income over the past two years. Base salaries will increase from $73,655 to $82,046, though most lawmakers earn far more than that as a result of stipends they earn for committee and leadership roles.
Finally, one side note – the governor’s transportation funding task force did not meet its December 31 deadline to file a report. Interested parties will continue to wait for the details of those recommendations as the need for revenues for transportation infrastructure projects goes unabated.
CTA Reporting Rules Halted, For Now
Going into the new year, dealers can rest easily, albeit temporarily, as a federal appeals court has
delayed the Beneficial Ownership Information (BOI) reporting requirements under the Corporate Transparency Act (CTA).
We saw the CTA saga rollercoaster continue throughout 2024.
First, businesses in the Spring were getting ready to comply with the CTA’s BOI requirements by January 1, 2025. Then, in March, in the lawsuit Texas Top Cop Shop, Inc. v. Garland, the reporting requirements were off, declared to be unconstitutional by a federal district court judge.
On Christmas Eve, however, we reported the rules to be back in play, re-instated by a three-judge panel of the Fifth Circuit U.S. Court of Appeals. That ruling prompted the Financial Crimes Enforcement Network to issue new reporting dates, extended into mid-January, by when affected businesses would need to comply.
And then a late present was dropped on businesses’ doorsteps. The day after Christmas, the same panel of the Appeals Court reversed itself and put the rules on hold pending further legal proceedings.
We now await action on the next step; the Fifth Circuit has scheduled oral arguments for the Texas Top Cop Shop, Inc. appeal on March 25, 2025. Therefore, for the time being, the district court’s order halting enforcement of the CTA and its associated BOI Reporting Rule remains in effect. A decision from the Fifth Circuit is not expected until mid-to-late 2025.
As always, we will provide updates to this carnival ride as they occur.
Dealerships Not Included in FTC’s Final Junk Fees Rule
On December 17, the Federal Trade Commission released a final rule on junk fees that excludes dealerships and requires hotels and live event ticket vendors to include total pricing information upfront if a price is displayed. The junk fees rule takes effect 120 days after publication in the Federal Register.
The previously proposed junk fees rule stated dealers would be required to comply with the junk fees rule, unless the FTC’s Vehicle Shopping Rule (VSR) and its related offering price and misrepresentations
were finalized. The final junk fees rule issued yesterday excludes dealers, even if the VSR takes effect. (The VSR is stayed until the legal challenge is resolved.)
The final junk fees rule removes dealerships from the definition of a covered business, and the rule only applies to hotels and live ticket vendors. The National Automobile Dealers Association had provided comments to the FTC that the proposed junk fees rule could create different pricing standards in the marketplace for dealerships and other businesses selling the same product because dealerships could be subject to the VSR while other businesses would be subject to the junk fees rule.
EPA’S 2025 Fuel Economy Guide Now Available
In early December the Environmental Protection Agency (EPA) and the Department of Energy (DOE) released the 2025 Fuel Economy Guide, which is available to download and print directly from the homepage at https://www.fueleconomy.gov.
All dealers selling new vehicles with a gross vehicle weight rating under 8,500 pounds are required to prominently display paper copies of the guide at each location where new vehicles are offered for sale. These guides must be available for free upon customer request.
The annual fuel cost estimates in the electronic fuel economy guide are updated weekly to match the Energy Information Administration’s current national average prices for gasoline and diesel fuel. The guide also is periodically updated to include newly released vehicle models.
Through the website, dealerships can also add a fueleconomy.gov widget to their website, blog, or social media site. Click the “Find a Car Widget” button under the “Calculators and other Tools” section of the page and copy the “embed” code into your blog or web page.
IRS Issues 2025 Standard Mileage Rate
On December 20, the Internal Revenue Service issued the 2025 standard mileage rates and other amounts that are used to cal-
culate deductible vehicle expenses.
Beginning January 1, 2025, the standard mileage rate for the use of a car, van, or pickup or panel truck will be 70 cents per mile driven for business use. This is an increase of 3 cents from 2024.
MLK Day – No Special Work Rules Apply
This year, the Martin Luther King, Jr., holiday occurs on Monday, January 20, which will also be Inauguration Day for incoming President Donald Trump. Under Massachusetts law, employees may be required to work the day, and, since January 1, 2023, employers do not need to worry about holiday premium pay requirements.
In addition to complying with the Massachusetts holiday laws, a dealership must also comply with its own policies. If your Employee Handbook or past practice says that a certain holiday is a “paid holiday,” then you are required to pay employees for those days even if they are not regularly scheduled workdays. As a result, dealers are urged to review their holiday pay policies carefully to ensure that they accurately reflect their actual practices.
Check out our 2024 Bulletin #164, issued on December 30, for a discussion of all your 2025 holiday obligations.
Form 8300 Transaction Letters Due January 31, 2025
The IRS requires any person who receives more than $10,000 in cash in a single transaction or a series of related transactions in 2024 while conducting his or her trade to file a Form 8300 with the agency. Most businesses must file the Form 8300 electronically (e-file) with the IRS. Further, for every 2024 deal in which you file a Form 8300, you must notify the customer by January 31, 2025, that you filed that form.
The IRS Form 8300 reference guide is available at www.irs.gov/businesses/ small-businesses-self-employed/irs-form8300-reference-guide. The applicable form is available at www.irs.gov/pub/irs-pdf/ f8300.pdf.
EGISLATIVE S CORECARD
DECEMBER 2024
BILL# SPONSOR SUBJECT STATUS
S151
H331
H290
H329
S204
H270
H289
S150
H351
Sen Crighton Rep Hunt
Rep Finn
Rep Howitt
Sen O’Connor
Rep Chan
Rep Finn
Sen Crighton
Rep Lewis
Amendments to Ch. 93B, the auto dealer franchise law.
RTR law amendments to fix Model Year start date and consumer notice.
Creates process to appeal improperly issued Class 1 license.
Modernize on-line vehicle purchase process.
S199 Sen Moore Amends definition of heavy-duty trucks in RTR law.
S220 H400 Sen Velis Rep Walsh Open safety recalls notifications.
H354 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.”)
S688
H1095
H1118
S639
H1121
H995
Sen Moore
Rep McMurtry
Rep Philips
Sen Feeney Rep Puppolo
Rep Donahue
Creates process to increase the insurance reimbursed labor rate paid to auto body repairers.
Protects consumer choice in vehicle service contracts.
S2219 H3255 Sen Cronin Rep Arciero Eliminates initial state inspection for new vehicle.
H3348 Limit doc prep fee amounts.
S2210
Joint Committee on Consumer Protection held public hearing on July 17, 2023; placed into study.
Joint Committee on Consumer Protection held public hearing on July 17, 2023; placed into extension order. No further action.
Joint Committee on Consumer Protection held public hearing on July 17, 2023. H270 reported favorably on Jan. 25, 2024; sent to House Ways and Means.
Joint Committee on Consumer Protection held public hearing on July 17, 2023. H351 reported favorably on Jan. 25, 2024; sent to House Steering & Policy Committee; House ordered to third reading on 2/12/24.
SUPPORT Joint Committee on Consumer Protection held public hearing on July 17, 2023; placed into extension order. No further action.
SUPPORT Joint Committee on Consumer Protection held public hearing on July 17, 2023. Redraft H4277 reported favorably on January 25, 2024; sent to House Ways and Means.
OPPOSE Joint Committee on Consumer Protection held public hearing on July 17, 2023; placed into study.
Joint Committee on Financial Services held public hearing on October 3, 2023; reported redraft H4412 favorably and sent to House Ways and Means.
Joint Committee on Financial Services held public hearing on October 3, 2023; H995 reported favorably and sent to House Steering & Policy Committee.
SUPPORT Joint Committee on Transportation held public hearing on Jan. 24, 2024; placed into study; House ordered to third reading on 3/7/24.
OPPOSE Joint Committee on Transportation held public hearing on Jan. 24, 2024; reported favorably and sent to House Ways and Means Committee. Rep Howitt
Sen Crighton
Sen Creem Rep Carey
Safety shutoff for keyless ignition technology.
Joint Committee on Transportation held public hearing on October 17, 2023; reported favorably and referred to Senate Ways and Means.
S25 H60 Personal data privacy and security. OPPOSE Joint Committee on Advanced Information Technology, the Internet and Cybersecurity held public hearing on October 19, 2023. On 5/13/24, Committee reported redrafts S2770 and H4632 favorably; each sent to respective Ways and Means committee.
S227 Sen Finegold Mass. Info Privacy & Security Act. OPPOSE Joint Committee on Economic Development and Emerging Technologies held public hearing on October 19, 2023. Bill sent to AITIC Committee on November 2, 2023.
S171 H311
Sen Feeney Rep Gonzalez Protect consumers in auto transactions. OPPOSE Joint Committee on Consumer Protection held public hearing on July 17, 2023; reported S171 favorably on 1/25/24 and referred to Senate Ways and Means. SWM reported redraft S2736 favorably on 4/22/24. Senate engrossed on 4/25/24. Sent to House Ways and Means.
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AUTO OUTLOOK
Going West to Honor
One of the Berkshires’ Finest
George Haddad of The Haddad Auto Group Heads to New Orleans as the 2025 Massachusetts TIME Dealer of the Year
After honoring Cape Cod dealer Tom Murphy of Falmouth Toyota as its 2024 Dealer of the Year, the Massachusetts State Automobile Dealers Association went to the western edge of the Commonwealth to select its 2025 honoree – George Haddad of The Haddad Auto Group, based in Pittsfield.
Haddad, a third-generation dealer, will be walking onto the stage on January 25 at NADA Show 2025 in New Orleans –the 108th anniversary of the national convention – as the Massachusetts TIME Dealer of the Year (TDOY). Tom will join 48 of his fellow dealers from around the country to vie for the 56th edition of the national honor.
named a finalist last year and Christine Alicandro also was honored as a finalist, virtually, during the 2021 Covid shutdown.
The TIME Dealer of the Year award is one of the automobile industry’s most prestigious and highly coveted honors. The award recognizes the nation’s most successful auto dealers who also demonstrate a long-standing commitment to community service.
MASSACHUSETTS
Massachusetts has had recent success for the national award, with Gary Rome of Gary Rome Hyundai in Holyoke receiving the national title in Dallas two years ago, while Murphy was
“From watching my father build a dealership to now owning multiple stores, my career has been fueled by a passion for the industry, dedication to my community and employees, and a commitment to growth and customer service,” nominee Haddad said. “I’m proud of what we’ve built, and I look forward to what’s next.”
Haddad, a 1981 graduate of Saint Michael’s College in Colchester, Vermont, has always worked for his family’s dealership group. The business was originally founded by his grandfather, George, in the 1940s with a single Pontiac store and his father, Louis, later shepherded the company and oversaw impressive growth.
“My grandfather emigrated from Lebanon and worked tirelessly running a grocery store before entering the auto industry and building a successful business,” he said. “In 1970, my father had the vision to add a Toyota franchise, which proved to be a great decision.”
Haddad spent weekends helping at the dealership and sold his first car at age 15 before he was even able to drive. After college, he worked in every department to learn the inner workings of the operation. He entered management in 1984 when his father acquired a store in Bennington, Vermont. As the business grew and expanded, Haddad took on greater responsibility.
Today, Haddad leads the Haddad Auto Group, owning and overseeing successful dealerships in Pittsfield and Adams, Massachusetts, as well as a location in Saint Albans, Vermont. The group represents Toyota, Subaru, Hyundai, and GMC.
The business was originally founded by his grandfather, George, in the 1940s with a single Pontiac store
“I’ve been fortunate to get where I am today thanks to luck and the wisdom passed down from my grandfather and father,” he said. “Over the years, I’ve worked hard to hire the right people, provide a positive work environment, and ensure that our employees see a future in the business.”
His Toyota store has been a recipient of numerous awards from Toyota for sales, customer satisfaction, and overall operational excellence, including earning Toyota’s coveted President’s Award 15 consecutive years and counting. Haddad also supports his industry as a member of the Massachusetts State Automobile Dealers Association and a participant in regional and national dealer councils for Toyota and Subaru.
“Serving as a dealer council representative has given me the opportunity to raise crucial issues and drive meaningful change at both the regional and national levels,” he said. “The highlight of my work has been leading efforts to improve Toyota’s auto tech program, which is vital for retention as well as bringing a new generation of skilled technicians into dealerships.”
Community involvement is a core value of Haddad’s company, and he is proud to be a longtime supporter and board member of the Boys & Girls Club of the Berkshires, where he has served on many committees and still runs the annual golf tournament.
“I chaired the insurance committee, successfully reducing costs while maintaining essential coverage,” he said. “I have also sponsored the club’s annual golf tournament, which raises $60,000 annually and is near $1 million in donations to date.”
Haddad is also proud of his partnership with Soldier On, a Pittsfield organization that provides transitional housing and supportive services to veterans experiencing homelessness. For every car sold during the month of November, Haddad Toyota donates $200 to the organization. He honors veterans by hosting an annual community event at the dealership on Veterans Day, featuring local radio broadcasts, employee participation, and educational sessions presented by Soldier On.
“We’ve also helped nearly 500 veterans gain reliable transportation by providing vehicles to Soldier On at a substantial discount,” he said.
16 ONE OF THE BERKSHIRES’ FINEST
Haddad currently serves on the boards of the Lake Onota Preservation Association and St. Charles Borromeo Catholic Church (Chairman of the financial council and Co-chairman of the Capital Campaign). He is also an advisor to Taconic High School’s automotive technology program, which he helped create in collaboration with Toyota, making it the first program of its kind in the country.
Other groups and events his dealerships support include Live on the Lake (summer concert series); Strong Little Souls (childhood cancer foundation); Berkshire Humane Society; Toys for Tots; Christian Center Pittsfield (coat and food drives); Rise Together Walk for Elizabeth Freeman Center (helps survivors of domestic and sexual violence); local youth sports teams; Jimmy Fund (supports the fight against cancer at Boston’s Dana-Farber Cancer Institute), and many others.
Dealers are nominated by the executives of state and metro dealer associations around the country. A panel of faculty members from the Tauber Institute for Global Operations at the University of Michigan will select one finalist from each of the four NADA regions and one national Dealer of the Year. Three finalists will receive $5,000 for their favorite charities and the winner will receive $10,000 to give to charity, donated by Ally.
In its 14th year as exclusive sponsor, Ally also will recognize
dealer nominees and their community efforts by contributing $1,000 to each nominee’s 501(c)3 charity of choice. Nominees will be recognized on AllyDealerHeroes.com, which highlights the philanthropic contributions and achievements of TIME Dealer of the Year nominees.
“At TIME, our commitment to recognizing the exceptional contributions of automotive dealers remains as strong as ever,” said Jessica Sibley, CEO of TIME. “The TIME Dealer of the Year award continues to celebrate those who not only excel in their profession but also make a meaningful impact in their communities. We are thrilled to continue this legacy in partnership with Ally.”
Doug Timmerman, Ally president of Dealer Financial Services, said, “Auto dealers are the backbones of their communities, providing civic support and significant business leadership. Ally is proud to recognize the unwavering commitment these TIME Dealer of the Year nominees are living every day through their volunteerism, sponsorships, and support of charitable causes. They are the epitome of community heroes, making important and positive impacts in the lives of the people they serve.”
“I have had the pleasure of knowing George and his successes in the community for over twenty-five years,” said Jeb Balise, of The Balise Auto Group in Springfield, who is the current dealer president of the Massachusetts State Automobile Dealers Association. “We all may be competitors, but we also get the chance to develop a true respect and camaraderie with each other as we face our challenges in the industry. George is a true exemplar of the best we have in the Massachusetts dealer community. We are proud to have him stand for us in New Orleans.”
Haddad was nominated for the TIME Dealer of the Year award by Robert O’Koniewski, executive vice president and general counsel of the Massachusetts State Automobile Dealers Association. Haddad and his wife, Shari, have two children.
Haddad is now the second Berkshire County dealer in the award’s 56-year history to be so honored. MSADA nominated Gary Johnson of Johnson Ford in Pittsfield in 2017, which was also held in New Orleans that year.
“George has been a long-time positive influence in the Pittsfield and Berkshire County communities in so many different parts of his world – education, veterans, community services, youth athletics, spiritual, and business,” said O’Koniewski. “George continues to build upon his commitments and outreach, demonstrating his and his family’s multi-decade dedication to Pittsfield and the greater Berkshire area. We are honored to have him represent all Massachusetts dealers at the ceremony in New Orleans.”
Previous Massachusetts TIME Dealers of the Year
1970 Fred Cain, Finalist
1971 John Dugan
1972 Robert Brest
1973 Peter Fuller
1977 Herb Anderson
1978 Julian Lucini, Finalist
1979 Joseph Gill
1980 Nathan Shulman
1981 George Rowe
1982 Donald Lorenz
1983 Richard Bournival
1984 Argeo Cellucci
1985 Charles Long
1986 John Mirak
1987 Daniel Harrington
1988 Edward Amabile
1989 William Cammarano
1990 John “Jack” Swanson
1991 Jerry Couture 1992 George Luddy 1993 Ed Ciampa
George Albrecht
John Walsh
Jay Tracy
1997 Thomas Barenboim
1998 John Santilli
Thomas Keery II
Donald Rodman, Finalist 2005 Jack Sarat 2006 Marshall Jespersen
2007 Ernest Boch, Jr.
2008 Herbert Chambers
2009 Beth Lorenz
2010 Richard Mastria, Jr.
2011 William Deluca III
2012 Ann Regan
2013 Raymond J. Ciccolo
2014 Brian Kelly
2015 Scott Shulman
2016 Adam Connolly
2017 Gary Johnson
2018 Frank Hanenberger
2019 Don Sudbay, Jr.
2020 Raymond J. Ciccolo
2021 Christine Alicandro, Finalist 2022 Joseph Shaker
2023 Gary Rome, National TDOY Winner
2024 Thomas Murphy, Jr., Finalist
NEWS from Around the h orn
BOSTON
Herb Chambers Gives $100 Million for New Boston Cancer Center
Information from Isabel Hart, Boston Business Journal, and Nick Bunkley, Automotive News
The owner of New England’s largest dealership group has made the biggest donation of his life: $100 million to help Massachusetts General Hospital work toward a possible cure for cancer.
Megadealer Herb Chambers, a Dorchester native, described his gift as “intensely personal.” The Herb Chambers Tower, expected to open in 2027 as part of a $1.9 billion expansion project next to Boston’s Beacon Hill neighborhood, will have 228 inpatient beds and become Mass General’s home base for cancer care and research.
“Financially, I’ve done well,” Chambers, 83, told The Boston Globe. “I owe so much to Massachusetts, to the people that are
my customers here. They’ve given me whatever I have... I want to give back for what I’ve received.”
The East Tower of the Phillip and Susan Ragon Building will be named the Herb Chambers Tower in recognition of the donation, according to Mass General Brigham, the parent organization of MGH.
The Herb Chambers Tower will be nearly 1 million square feet, MGB said. Construction is expected to be completed in 2027. The tower will have a dedicated 24/7 urgent care center for cancer patients, and an 8,000 square foot rooftop garden, according to MGB.
The tower will hold cancer-care specific units, which are being built out as part of its Mass General Brigham Cancer integration. Brigham and Women’s Hospital and MGH are more closely entwining their cancer care as Brigham and Women’s loss of its longtime clinical partner, Dana-Farber Cancer Institute, looms.
The Phillip and Susan Ragon Building is a massive complex being built on MGH’s campus. It will feature more than 1.5 million square feet of space, house the Mass. General Cancer Center,
and Corrigan Minehan Heart Center, and will include 482 single-bed inpatient rooms across two towers.
The donation amounts to roughly $7,000 for every day since Chambers bought his first dealership in 1985. The Herb Chambers Cos. is No. 28 on Automotive News’ 2024 list of the largest U.S. dealership groups, selling 25,863 new vehicles from 47 locations.
Chambers is the third-wealthiest dealer in the U.S. and fourth globally, according to Forbes, which estimates his net worth as $2.9 billion. Herb Chambers Co. is the largest veteran-owned business in Massachusetts.
“My motivation in extending this gift is that the Herb Chambers Tower will shine as a beacon of hope for everyone touched by this awful disease,” he said in a statement. “There can never be enough effort or resources put into finding a cure.”
“Over the years, members of my family, friends, and I, have had the good fortune of being cared for by the legendary MGH team. My heart fills with gratitude when I reflect on the dedicated and compassionate professionals that have treated us. It gives me immense pride to be in a position to give back to a city that has given me so much,” Chambers said.
David Brown, Mass General’s president of academic medical centers, said Chambers’ “bold vision” to help the hospital consolidate cancer care under one roof will make treatment easier and more comfortable for patients.
Massachusetts Gov. Maura Healey, at a December 11 event announcing the donation, said Chambers’ generosity will make the “greatest cancer center in the world even greater.”
HOLYOKE
Marcotte Ford Donates $10K in Gifts to Families in Need
By Kayleigh Thomas, 22News WWLP
One local car dealership is embodying the spirit of giving this holiday season by shopping for gifts based on the wish lists of families in need.
The Marcotte Ford team truly went above and beyond to make
Dr. David Brown, left, and dealer Herb chambers pose at the ether Dome at Massachusetts general Hospital (Kate flock/Mass. general Hospital)
NEWS from Around the h orn
this holiday special for 12 families in the community.
They arrived at the Target at the Holyoke Mall with their carts ready to hit the aisles in search of the perfect presents to fulfill the wishes of each family. Each team member was assigned a family to shop for, in an effort to make their Christmas one to remember.
General Manager Mike Filomeno told 22News, “They give the gifts to the parents, and they can wrap them up and make it an exciting Christmas for the underprivileged. And, you know, so it’s just kind of a rewarding way to give back.”
“Yeah, we’re so lucky we can give back,” President Mike Marcotte adds. “And we’ve been planning this for three months. To surprise our managers with this and to be able to give it back as Mike said in a couple of weeks to the families in need right before the holidays is really special.”
The Marcotte Ford team says they are excited to be making this positive impact for the second year in a row.
$10,000 worth of toys were collected. These gifts were donated to Margaret’s Pantry, a program of Providence Ministries, for distribution to the Holyoke and surrounding areas in need.
HOLYOKE
Rome Hyundai Hosts Toy Drive, Pictures with santa & Mrs. Claus
Gary Rome Hyundai partnered with local comedian Jess Miller of Funnyraising Comedy Shows and OMG! Comedy Shows to host the Western Mass Toy Drive for foster kids and children in need. The “Stuff the Trunk” toy drive was held at Gary Rome Hyundai from November 25 to December 15. Members of the community could drop off toys at the showroom during regular business hours.
In addition to the toy drive, the dealership held a meet Santa & Mrs. Claus event on December 15 at which families attended to take pictures and help foster children.
“This is our second year partnering with Gary Rome but the eleventh year for our Annual Toy Drive for Foster Kids in Western Mass,” said comedian Jess Miller. “We started in 2013 at the Hukélau and have been doing comedy shows every year since. This year, due to all of the economic hardships people are facing, especially foster families and children in need, we wanted to reach more than just an adult audience and provide a way to get kids involved. We greatly appreciate Gary Rome Hyundai’s involvement this year as well as other local area businesses and hope we are able, through a combined effort, to get toys to over 3,000 local kids.”
Moreover, Sunday, December 15 was a magical day where kids were able to meet Mr. and Mrs. Claus and their cheerful elves. This enchanting gathering aimed to collect more toys for the toy drive, benefiting foster kids and children in need through Western Mass Toy Drive for Foster Kids & Children in Need. It was the perfect opportunity for children to experience the joy of the holiday season while making a difference in the lives of others.
BOSTON
Harris Beach Murtha Formally Launches as New, Combined Firm
Harris Beach Murtha is pleased to announce the successful combination of Harris Beach PLLC and Murtha Cullina LLP to form a new legal powerhouse. (Murtha Cullina is an MSADA associate member.)
Harris Beach Murtha offers clients greater strength and reach through added geographies and expanded services with more than 250 lawyers, including 150 partners, working across 16 offices in Connecticut, Massachusetts, New Jersey, New York, and the District of Columbia.
The law firm has a Northeast presence with global reach and attorneys who embrace the unique challenges of regional, national, and international law with the personalized dedication and attention of a local firm. Harris Beach Murtha serves clients in more than 20 major areas of law across a multitude of diverse industries.
Harris Beach Murtha’s deep understanding of complex regulatory, governmental, political, and cultural environments, supported by extensive experience, deep local roots, and a high standard of excellence sets the firm apart. This unique combination equips clients to successfully navigate ever changing legal landscapes.
Chris Jagel will serve as the Chief Executive Officer of Harris Beach Murtha, and Andy Corea, who served as Murtha Cullina’s
Managing Partner for four years, will serve on the firm’s Management Committee.
The firm’s lawyers and consultants practice from offices throughout Connecticut in Bantam, Hartford, New Haven, and Stamford; New York state in Albany, Buffalo, Ithaca, New York City, Rochester, Saratoga Springs, Syracuse, Long Island, and White Plains, as well as in Boston, Massachusetts, Newark, New Jersey, and Washington, D.C. For more information, visit www. harrisbeachmurtha.com.
NEWTON
50 With Honda Automotive News
Ray Ciccolo, center, president of Village Automotive Group, and Carl Pasquarosa, general manager of Honda Village in Newton, fourth from left, receive a 50-year award from American Honda Motors Co. representatives, from left, Mike Collura, Mike Flaherty, and Mike DeLuca.
Key Inventory Tax Planning Considerations for Auto Dealers
By Christopher Nicholson Albin Randall & Bennett
Accurate inventory valuation is critical for auto dealerships, influencing financial statements, tax liabilities, and business strategy. This article explores the pros and cons of using the Lower of Cost or Market (LCM) approach for valuing used and parts inventory and highlights the importance of parts reconciliations.
What Is Lower of Cost or Market (LCM)?
The Lower of Cost or Market (LCM) method helps auto dealerships value used cars and parts at the lower of their original cost or current market value, reflecting their rapid depreciation and obsolescence. This approach ensures inventory is valued realistically, avoiding overstatements that could mislead financial decision-making. For example, if a dealership values a used car at its cost of $15,000, and the market value drops to $12,000, the dealer will write off $3,000 to Cost of Goods Sold (COGS) to ensure inventory is properly valued.
How Does LCM Work?
LCM works by adjusting inventory to the lower level of cost or market value. Cost refers to the historical cost of the asset, while market value can be determined by using software like V-Auto or Galves for used autos. Specific rules govern how replacement cost is compared to net realizable value and net realizable value minus a normal profit margin.
Auto dealers have flexibility when determining a normal profit margin for used autos. Historical profits for similar used vehicles, industry averages, market conditions, and the dealerships cost structure are all factors in determining a normal profit margin. When replacement cost exceeds the net realizable value, the net realizable value must be used. If the replacement cost falls below net realizable value minus a normal profit margin, the value
must be adjusted to this lower amount. If the replacement cost is between these two benchmarks, the replacement cost is used.
Once a market value is established, it is compared to historical cost. If the historical cost of inventory is lower than the replacement cost, a write-down is unnecessary. Conversely, if the cost of inventory exceeds the replacement cost, inventory must be written down to the replacement cost. The difference between cost and market value is credited to an inventory reserve account nested in the inventory pool, with the offsetting debit reflected in the cost of goods sold. Inventory can only be written down under LCM. A Form 3115 is required to report the change in accounting method when switching to LCM.
Importance of Parts Reconciliations
Parts reconciliations are essential for maintaining accurate inventory records and financial statements. Regular reconciliations help identify discrepancies between physical inventory, recorded amounts, and OEM price tapes, ensuring that the inventory valuation is accurate. This process involves comparing the actual count of parts on hand with the inventory records, reviewing costs against OEM price tapes, investigating any differences, and making necessary adjustments.
Effective parts reconciliations can prevent issues such as overstocking, stockouts, financial misstatements, shrinkage due to theft, and obsolescence detection. Leveraging technology, such as inventory management software, can simplify reconciliations, especially for large dealerships managing extensive parts inventories. By integrating parts reconciliations into the LCM approach, dealerships can achieve a more precise and reliable inventory valuation.
Benefits of Using LCM
The LCM approach offers several advantages. It ensures accurate financial report-
ing by providing a realistic view of an auto dealership’s financial health and prevents inflated asset values that can mislead stakeholders. By valuing inventory at the lower of cost or market, dealerships can reflect true market conditions, which is especially important in an industry subject to rapid changes. Additionally, LCM helps manage the risk of inventory obsolescence and price drops, ensuring inventory is not overvalued. Tax advantages may also arise, as writing down inventory to its market value may reduce taxable income and provide financial relief during downturns.
Challenges of Using LCM
Despite its benefits, the LCM method presents challenges. Determining the market value of used cars and parts can be complex and time-consuming, requiring constant monitoring due to fluctuation. For instance, market conditions might shift dramatically within months, necessitating frequent updates. Additionally, assessing inventory’s market value involves subjectivity, as appraisers might value the same inventory differently, leading to inconsistencies. While caution in accounting is generally advisable, overly cautious valuations might undervalue inventory, impacting business decisions and financial ratios.
The Road Ahead
The decision to use LCM for valuing used and parts inventory in auto dealerships depends on factors such as dealership size, market conditions, and financial strategy. Dealerships should weigh these factors and consult with accounting professionals to determine the best approach for their specific needs. Incorporating regular parts reconciliations can further enhance the accuracy and reliability of inventory valuations. By balancing the benefits and challenges of LCM, dealerships can position themselves for financial stability and long-term success.
FTC Actions Against Auto Dealers As Biden Administration Nears End
As the Biden administration draws to a close on January 20, its Federal Trade Commission continues with enforcement actions against allegedly violative businesses. Regardless of who is running the FTC (the Trump administration will take over and name a new chair and majority member after Inauguration Day), businesses that violate federal law and the commission’s rules and regulations could find themselves at the wrong end of a complaint or settlement agreement.
Compliance knows no rest. As a reminder of what dealers need to be aware of moving into 2025, here are two articles authored by MSADA endorsed compliance partner ComplyAuto discussing FTC actions within the last two weeks involving auto dealer groups. These two matters are yet more examples of dealers’ growing regulatory scrutiny by state and federal agencies and underscores the importance of proactive compliance measures.
FTC and Illinois Attorney General Announce Largest Penalty Ever Levied Against an Auto Dealer Group
By Mark SanBorn
CoMplyauto,
Senior produCt and regulatory SpeCialiSt
What Happened? On December 19, 2024, the Federal Trade Commission and the Illinois Attorney General announced a historic $20 million settlement in connection with a lawsuit against a 10-dealership auto group based in Illinois along with the group’s Vice President of Operations in his individual capacity. The FTC and Illinois AG alleged that the dealership group engaged in a litany of unfair and deceptive practices under state and federal law.
What Do the FTC and Illinois AG Allege? The lawsuit alleges numerous federal and state unfair and deceptive acts and practices (“UDAP” violations) as well as violations of the federal Used Car Rule.
The lawsuit goes into extensive detail about the defendants’ alleged conduct. Some key allegations include:
1. Deceptive Price Advertising: Advertising false low prices to lure customers, then requiring expensive, pre-installed addons not included in the advertised price. The defendants also allegedly manipulated pricing tools such as the “Deal Gauge” used by Cars.com to give the impression that the defendants’ pricing was more competitive than it actually was.
2. Unauthorized Charges for “add-ons”: Charging consumers for add-ons such as protective coatings, theft protection, and GAP coverage without consent, and sometimes failing to provide the promised products–including products that were represented to have been pre-installed.
3. So Called “Junk” Fees: Adding “certification” and “reconditioning” fees, often without providing the associated benefits like extended warranties.
4. Canadian Cars Misrepresentation: Selling vehicles to American consumers that were manufactured for the Canadian market without disclosing that fact and associated warranty limitations.
5. Fake Reviews: Employees and customers were pressured or incentivized to post fake positive reviews.
6. Destruction of Evidence: Employees were directed to destroy pricing documents (deal worksheets and “pencil” documents) to conceal inflated charges and deceptive practices.
7. Misleading Prize Promotions: The dealers used illegal prize mailers to lure customers, falsely suggesting that recipients had won valuable prizes to entice them into visiting the dealerships.
8. General Advertising Violations: Some advertisements misrepresented vehicle availability, and other advertisements failed to make required disclosures under state and federal law (including Regulation Z-related disclosures).
9. Used Car Rule Violations: Failure to provide copies of Buyers Guides to purchasers of used vehicles.
The allegations in this case are broadly consistent with other recent enforcement actions against dealers and are reflective of the FTC’s intense focus on dealer advertising and F&I practices.
What Should You Know About The Settlement? Remember this is a settlement, and none of these allegations have been proven or admitted. However, as part of the stipulated order settling the case, the defendants agreed to pay $19.8 million to the FTC and $200,000 to the Illinois Attorney General’s fund. The order also includes a permanent injunction prohibiting the corporate defendants from misrepresenting costs, fees, or optional services, violating Illinois state statutes, or violating the FTC Act. Furthermore, the order imposes specific requirements on the corporate defendants that align with the FTC’s Vehicle Shopping Rule. These include obtaining express, informed consent for all charges and stating the “Offering Price” in any advertisement or communication that references a specific vehicle, monetary amount, or financing terms. The “Offering Price,” defined similarly to its meaning in the VSR, must represent the actual sale price of the vehicle, excluding only required government charges. Additional obligations under the order include compliance reporting, recordkeeping, and monitoring requirements. Notably, the individual defendant is not included as a party to the stipulated order.
What Should Dealers Do? In light of this case, dealers should carefully evaluate and strengthen their compliance programs to ensure adherence to both federal and state laws governing advertising, pricing, and consumer transactions. The allegations and settlement underscore the FTC and state attorneys general’s commitment to aggressively pursuing deceptive practices, even in the absence of the VSR.
Dealers should prioritize clarity in pricing and advertising, obtain consent for all addons and fees, and accurately represent all product features and services offered. Additionally, dealerships must be prepared for heightened scrutiny, as evidenced by the bipartisan (the FTC voted 5-0 in favor) support for this enforcement action.
FTC and Maryland AG Target Auto Dealership Group Over Deceptive Practices
By Brad Miller CoMplyauto, Chief CoMplianCe/ regulatory offiCer & head of legal
What Happened? On December 27, 2024, the Federal Trade Commission (FTC) and Maryland Attorney General have filed yet another complaint against another dealership group. This time, the allegation is against a Washington-area automotive dealership group for allegedly engaging in systematic consumer “deception” – both in advertising and in person consumer interaction – that cost car buyers millions of dollars in unauthorized charges and unwanted add-on products.
According to the complaint filed in the U.S. District Court for the Eastern District of Virginia, three dealerships and their management company, along with the dealer principal and several other executives, allegedly advertised prices they refused to honor and falsely claimed that customers were required to obtain financing through their dealerships.
Unlike some recent FTC announcements which reported settlements in connection with FTC actions, here the FTC and Maryland AG issued a release about the filing of this Complaint prior to any settlement. The Complaint is pending (and of course the allegations are unproven), and seeks a permanent injunction, disgorgement and restitution (See FTC Complaint at p. 26 “of all moneys that Defendants received in connection with their unfair or deceptive trade practices and payment of all other economic damages incurred by these consumers in connection with Defendants’ unfair or deceptive trade practices….”), and $10,000 per violation of Maryland law. It also seeks to hold all parties, including those named
dealers should carefully evaluate and strengthen their compliance programs to ensure adherence to both federal and state laws governing advertising, pricing, and consumer transactions.
individually jointly and severally liable for all damages.
What is Alleged? The FTC alleges that the dealerships engaged in several deceptive practices, including:
• Advertising unrealistic prices that nearly no customer could qualify for due to complex rebate requirements;
• Forcing customers to finance through the dealership to receive advertised prices;
• Adding mandatory fees and charges not disclosed in advertisements; and
• Including unauthorized add-on products and services in final sales contracts.
Notably, the FTC cites to a comparison of advertised prices to actual transaction prices, noting that “88% of consumers who purchased vehicles from the dealership group between 2020 and 2023 paid an average of $2,000 more than advertised prices.” The complaint also alleges that 68% of customers were charged for at least one add-on product they allegedly neither agreed to purchase nor were informed was optional.
This is the latest in a series of actions that the FTC has taken against dealerships during the pendency of the case challenging the Vehicle Shipping Rule in the 5th Circuit. In each of these cases, the FTC is holding dealers largely to the standards of the VSR for advertising and F&I practices.
Again, the Commission voted 5-0 to file the Complaint.
What Should Dealers Do? This is yet another clear example of the risks to dealers in the current regulatory environment – regardless of the outcome of the VSR challenge. In light of this and other similar cases, dealers should carefully evaluate and strengthen their compliance programs to ensure adherence to both federal and state laws governing advertising, pricing, and consumer transactions. Dealers should prioritize clarity in pricing and advertising, obtain clear, written consent for all add-ons and fees, and accurately represent all product features and services offered.
ComplyAuto’s Guardian provides unparalleled tools to assist dealerships by automating compliance checks, scanning advertisements, and conducting deal jacket audits. Leveraging AI-based technology, Guardian is tailored to help dealerships comply with both current regulations and future requirements under the VSR. This tool offers an efficient solution for navigating federal and state regulations, helping to ensure consistent, accurate compliance practices in a dealership’s operations. Reach out to ComplyAuto at www.complyauto. com to learn more about the most powerful AI compliance tools available.
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Recent Decision Impacts Dealer Reimbursement Under Prepaid Maintenance Contracts
By Attorneys Tom Vangel, Jamie Radke, and Lindsey McComber of Murtha Cullina LLP
Last month, a panel of the U.S. First Circuit Court of Appeals released a disappointing decision for Volvo dealers who perform service work under Volvo-branded Prepaid Maintenance Program Contracts (“PPMs”). In this case, the court was asked to determine whether two Massachusetts Volvo dealers were entitled to the statutory rates of reimbursement under the Massachusetts Auto Dealer Franchise Law (MGL Chapter 93B) for servicing customer vehicles under Volvo PPMs. The court ultimately concluded that they were not, as the sale and service of the Volvo PPMs are not “franchise obligations” regulated under Chapter 93B.
In 2021, two Massachusetts Volvo dealers brought claims against Volvo Car USA, LLC (“Volvo USA”), Volvo Car Financial Services U.S., LLC (“Volvo Financial”), and Fidelity Warranty Services, Inc. (“Fidelity”) for violations of various provisions of Chapter 93B alleging that the reimbursement they received for performing work under Volvo PPMs was less than their usual service charges.
The Volvo PPM allows consumers to pre-pay for certain car maintenance services and lock in discounted rates for routine maintenance tasks. The dealer who sells the PPM has control over the contract sales price, and Fidelity is required to reimburse the dealers for a portion of the costs they incurred based on a pre-set reimbursement tier. However, the amount that Fidelity reimburses a dealer who services the PPM depends on the reimbursement tier chosen by the dealer who sold the given PPM, which sometimes results in the servicing dealer being reimbursed at lower rates than provided for in their own contracts.
Volvo USA advertised that the Volvo PPM would be honored at any Volvo dealership. The defendants argued on summary judgment that they do not need
to reimburse dealerships at the retail labor rate for their service work because the PPMs at issue are not subject to Chapter 93B. On cross motions for summary judgment, the District Court agreed with the defendants and found that entities like Fidelity are not regulated by Chapter 93B as Chapter 93B governs a franchise relationship between motor vehicle manufacturers, distributors, and dealers.
The Appeals Court affirmed on different grounds, instead noting that the dealer’s sale and servicing of Volvo PPMS are not “franchise obligations” within the meaning of Chapter 93B. Chapter 93B provides that a “manufacturer or distributor shall…adequately and fairly compensate any motor vehicle dealer who, under its franchise obligations, furnishes labor, parts and materials under the warranty or maintenance plan…” M.G.L. c. 93B § 9(b)(1). The Court then examined whether the dealers sell and service the Volvo PPM under their franchise obligations and ultimately concluded that they do not.
In coming to this decision, the Appeals Court looked to the terms of the Retailer Agreement between the dealers and Volvo USA to determine whether the dealers have any franchise obligations with respect to the Volvo PPM. The Retailer Agreement required that the dealers sell “Volvo accessories,” among other things. Although the dealers argued that the PPM is considered a “Volvo accessory,” the Court found that an accessory would not include an intangible, financial contract.
The Appeals Court also noted that there are at least nineteen Volvo dealers across the United States that do not sell Volvo PPMs, which supported a finding that the Retailer Agreement does not require dealers to sell the PPMs. Despite this, the dealers generally argued that Volvo USA and Volvo Financial pressure dealers to sell the Volvo PPM, effectively requiring
the sale of PPMs. The court disagreed and found that Volvo USA and Volvo Financial have a “vested interest in its dealers selling as many Volvo PPM contracts as possible,” but that pressure alone does not make it a contractual obligation.
The dealers also argued that it is a franchise obligation to accept and service the Volvo PPMs due to a provision in the Retailer Agreement permitting Volvo USA to terminate the Retailer Agreement if a dealer breaches a separate agreement with a Volvo affiliate. The court found that the dealers failed to show how refusing to service a PPM sold by a different dealer results in a breach of their own agreements with Fidelity, as the dealers are not in privity with other dealers and the agreement with Fidelity does not contain a provision requiring dealers to honor PPM contracts sold by other dealers.
The court recognized that it is likely that customers would be unhappy with dealers denying service under PPMs purchased from other dealers but found that the “possibility of spurned PPM-holders leaving bad reviews and in turn causing a breach of the Retailer Agreement is too attenuated a scenario to support the conclusion that servicing the Volvo PPM is a franchise obligation.”
In light of this decision, Massachusetts dealers should carefully review their franchise agreements and be cognizant that, although they receive pressure from manufacturers to participate in certain programs, such participation may not necessarily constitute a franchise requirement.
Tom Vangel and Jamie Radke are partners and Lindsey McComber is an associate with the law firm of Murtha Cullina LLP in Boston who specialize in automotive law. They can be reached at 617-4574072.
Driving Success: The 5-4-3-2-1 Framework for Auto Business
By Dave Clayman CEO, Twelve Points Wealth Management
The auto industry has experienced unprecedented change over the last several years.
As an owner, your business is not just your livelihood – it is your legacy. The 5-4-3-2-1 framework offers a clear path to maximize your business’s value and prepare for a successful transition, whether you plan to sell, pass it down, or divest a specific dealership.
5 Stages of Value Maturity
1. Identify: For many owners, 80-90% of their personal net worth is tied to the business. To unlock its full value, start with a professional valuation. This process highlights hidden opportunities, such as operational improvement opportunities in a single store or a market analysis of your full portfolio.
2. Protect: Every dealership faces risks, from fluctuating interest rates and inventory to expensive image upgrades. Protect your business by actively managing your expenses and using technology to maximize efficiency. Safeguarding your operations against risks like the “5Ds” – Death, Disability, Divorce, Distress, and Disagreement—is critical to preserving value.
3. Build: Once risks are managed, focus on building value. This means increasing profitability (EBITDA) and improving your market position. For example, improving your digital shopping experience or enhancing your service capabilities can improve your margins and customer satisfaction.
4. Harvest: When the time comes to transition, ensure you are prepared to harvest the fruits of your labor. Whether sell-
ing to a third party, transferring ownership within your family, or divesting a specific store, explore all options to maximize your financial gain.
5. Manage: Value does not manage itself; it requires ongoing attention. In the auto industry, staying ahead means continuously training employees, adopting new technologies, and optimizing customer satisfaction metrics.
4 Intangible Capitals That Drive Value in the Auto Industry
1. Human Capital: Your team is your greatest asset. Skilled technicians, sales staff, and managers keep your business running smoothly. Invest in training programs and provide clear career paths and incentives to retain top talent, reducing costly turnover.
2. Social Capital: Your brand and company culture define how customers and employees see you. A dealership with a reputation for investing in the local community builds trust and loyalty. Creating a strong company culture can also attract top-tier talent who align with your values.
3. Customer Capital: Without customers, there is no business. Build deep, lasting relationships by focusing on “entanglement.” For instance, offering unique services like dropping off a newly purchased car can make your business indispensable to customers. Evaluate your business through their eyes: what keeps them coming back?
4. Structural Capital: Strong processes, tools, and systems are the backbone of your business. For example, a CRM system that tracks customer history can improve the sales and service experience. Document processes to ensure they’re transferable to the next owner, making your business more attractive to buyers.
3 Gaps and 3 Legs of the Stool
As you prepare your exit, address the three gaps that affect your business’s value: • Profit Gap: Is your business achieving the profitability it could? Compare your
financial statement to best-in-class ratios of similar dealerships and identify areas for improvement.
• Value Gap: What is the gap between your current valuation and the potential value if your business is operated optimally?
• Wealth Gap: How much do you need to live the life you envision post-exit?
Balance the three legs of the stool: business, financial, and personal needs. For instance, a dealership owner might focus on ensuring the company and employees can thrive post-exit while achieving personal financial security and a clear sense of purpose for the next chapter.
2 Concurrent Paths: Business and Personal Planning
Exit planning is not just about your business; it is about your life. These two paths must run parallel:
1. Business Path: For auto dealers, this means ensuring your operations can thrive without you. Train successors, document workflows, and implement systems that allow the business to run independently.
2. Personal Path: Many auto dealers struggle to imagine life after their exit. Define your next act, whether it is consulting, mentoring others in the industry, or simply enjoying a well-earned retirement. Without this clarity, even a successful business exit can feel unfulfilling.
1 Goal: A Significant Business
The ultimate goal is to create a business that is valuable, attractive, and transferrable at any moment. Your aim is not just to exit but to build a business that thrives long after you leave.
Conclusion
The road to a successful exit is not a quick trip. It is a journey that requires planning, strategy, and a clear vision. By following the 5-4-3-2-1 framework, you can align your business and personal goals, ensuring you optimize your life’s work for you, your family, and the people and causes you care about.
Has Ransomware Become Routine?
By Nick Reed
OCD Tech, IT Security Analyst
With the number of ransomware attacks surging to new highs in 2024, it seems these incidents and their gravity are being overshadowed. As ransomware becomes more commonplace in the lives of consumers, another significant security event barely made waves.
A large-scale ransomware attack on one of Canada’s largest auto dealership groups seemingly went under the radar, serving as the latest example in a sting of underwhelming response and coverage to recent ransomware related breaches.
AutoCanada has 83 franchised dealerships across North America, mostly in Canada with a number of locations in the U.S. The auto group was targeted on August 11, 2024, the same day it reported disappointing Q2 earnings. The timing of the attack, coinciding with the release of earnings, was likely no accident. Such a strategic move is designed to obfuscate the impact and add complexity to the response process. After all, attackers rarely strike when a business is in a watchful and strong posture.
The ransomware group Hunters International has claimed responsibility for an attack that resulted in the theft of approximately 1.4 terabytes of data.
Initial Disclosure
By August 13, AutoCanada disclosed the breach and announced it had engaged cyber-
security experts to contain the incident; the threat seemed contained with minimal business interruption. That is, until Hunters International announced in mid-September new details, claiming to have exfiltrated sensitive employee data including dates of birth, Social Security numbers, and bank account details.
With AutoCanada having several thousand employees across North America, this update was far from inconsequential.
Promptly, the attackers began posting the auto group’s stolen data, including HR records, financial documents, and database information, to its dark web site. Yet Au-
this attack received from news sources. While the breach was occurring, news coverage largely focused on AutoCanada’s monetary performance and financial recovery plans. By the time stolen data began to surface online, the incident seemed to have faded from the public’s view. For many consumers, a dealership breach involving their personal data would be a dealbreaker for repeat business. While it is still uncertain whether customer information was affected, the lack of significant coverage suggests that the impact may not be resonating with consumers.
Hunters International is known to encrypt data and simultaneously exfiltrate it, securing their leverage over victims.
toCanada’s public statements were largely ambiguous, with no confirmation about whether customer data had been affected, leading one to speculate the attack scope was not truly known at this time.
A Curious Lack of Attention
What is striking is how little attention
Hunters International
The attack was claimed by Hunters International, a ransomware-as-a-service (RaaS) group that emerged in 2023. Hunters International is known to encrypt data and simultaneously exfiltrate it, securing their leverage over victims. This allows
them to later leak data via their site, naming victims and publishing stolen data if ransom demands are not met. This tactic not only damages the victim’s reputation but also is intended to get the victim into trouble with regulators and consumer litigation.
Their targets span a wide range of sectors, including healthcare, education, manufacturing, and even U.S. government entities, revealing a motive of opportunism. To mitigate the risk, organizations must fortify their defenses, making themselves less attractive targets. Attackers often seek the path of least resistance, so if your systems are well-secured, they are more likely to move on to easier prey.
The Auto Group’s Response
To their credit, AutoCanada was able to maintain operations with minimal disruption during the attack and has since taken transparent steps to enhance its cybersecurity posture. Among the measures implemented, the company reported iso-
lating compromised systems, disrupting the encryption process, disabling affected accounts, and resetting administrative passwords.
Nonetheless, there are ongoing concerns regarding whether their level of transparency will meet regulatory expectations and if their security practices comply with the enhanced FTC Safeguards Rule, which mandates reasonable security measures to protect consumer data.
The Bigger Picture
The muted public response to this incident raises troubling questions. Are ransomware attacks becoming so routine that we are collectively tuning them out? High-profile breaches like this one should serve as stark wake-up calls, yet the lack of urgency to secure systems or scrutiny over data protection practices is concerning.
For businesses, quick disclosure and transparency are essential following a breach, but these alone cannot replace the need for proactive and robust cyber-
security measures. If the normalization of ransomware attacks continues, both consumers and regulators must demand higher accountability and scrutiny of security practices. Companies that fail to prioritize data protection risk being left behind as market forces increasingly reward those with strong security postures.
The auto industry and other sectors have an opportunity to lead by example, emphasizing the importance of safeguarding sensitive information. By treating data protection as a core business function that is valued, industries can set higher standards, encouraging proactive investments in cybersecurity that ultimately benefit both businesses and consumers.
Moreover, critical details surrounding the breach remain unclear. While it appears no ransom was paid leading to AutoCanada’s data being released, the full scope of the attack and the extent of the compromised data have yet to be determined.
Securing Your Dealership’s Future: The Vital Role of the Chief Information Security Officer
By Scott Spatz President, Cooperative Systems
As technology advances, so does the complexity of threats that auto dealerships face daily. With customer information, financial data, and business operations increasingly digitized, protecting these assets is no longer just an IT issue; it is imperative to your business strategy. This is where a Chief Information Security Officer (CISO) comes into play. Here is a closer look at why appointing a CISO is crucial for your auto dealership’s success and security.
The Rise of Cybersecurity Threats in Auto Dealerships
Auto dealerships are becoming prime targets for cybercriminals due to the wealth of personal and financial information they store. From customer data gathered during sales or services to transaction records and financing applications, each data point presents a potential risk if not properly secured. The consequences of data breaches can be severe, ranging from financial losses to significant damage to your dealership’s reputation and customer trust.
Understanding the Role of a CISO
A CISO is a senior-level executive responsible for developing and implementing the organization’s strategy for protecting its information and technology. This role goes beyond overseeing daily IT security operations; it includes creating policies, managing technological risks, and
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What’s the Plan?
By Tim Marbut
Ethos Group
As we head into 2025, the importance of having a clear and actionable plan for success cannot be overstated. The retail automotive business is moving faster than ever, with technological advances, economic shifts, and societal changes reshaping how we live and work. Amid this rapid evolution, having a well-thought-out plan serves as both a compass and a safety net, helping individuals and organizations navigate uncertainty while staying focused on their goals.
Planning is not just about setting targets; it is about creating a roadmap that bridges the gap between where you are and where you want to be. A plan offers clarity, fosters accountability, and builds resilience, ensuring that you are prepared for the challenges and opportunities that the new year—and beyond—will bring.
Why a Plan is Crucial
Planning forces you to think about the “why” behind your goals. Understanding your purpose not only drives action but also sustains momentum during tough times.
1. Clarity and Direction. Without a plan, it is easy to drift aimlessly, reacting to circumstances instead of proactively shaping your future. A well-crafted plan defines your priorities, establishes your goals, and provides a clear sense of purpose. Entering 2025 without a clear plan can lead to wasted time, resources, and energy.
2. Adaptability in Uncertain Times. The past few years have taught us that change is inevitable, and adaptability is a key ingredient for success. While a plan provides structure, it should also be flexible enough
to accommodate unexpected developments, as we have seen recently. By anticipating potential obstacles and incorporating contingency strategies, you can respond to challenges with confidence rather than panic. Planning doesn’t eliminate uncertainty, but it equips you with the tools to navigate it.
3. Motivation and Momentum. A plan breaks down long-term goals into manageable steps, making progress measurable and achievable. Recognizing small wins along the way promotes motivation. Without a plan, even the most ambitious goals can feel overwhelming, leading to procrastination or burnout.
Elements of an Effective Plan
1. SMART Goals. Your goals should be Specific, Measurable, Achievable, Relevant, and Time-bound. Vague aspirations
Planning is not just about setting targets; it is about creating a roadmap that bridges the gap between where you are and where you want to be.
like “I want to be successful” lack direction. Instead, define concrete objectives such as “We will increase sales by 20% by December 2025” or “We will increase our organizations PRU by 300 dollars by June of this year.”
2. Break It Down. Large goals can feel intimidating. Break them into smaller, actionable steps with clear deadlines. For instance, if you aim to increase sales, start by breaking actions down daily, for example: contacts, presentations, closes.
3. Prioritize. Not all tasks are equally important. Identify the actions that will have the greatest impact on your success and focus on them first. Using frameworks like the Eisenhower Matrix can help you distinguish between urgent and non-urgent tasks.
4. Track Your Progress. Regularly review your progress to stay on track and adjust your plan as needed. Tools like technology, one-on-ones, and deal review meetings can help you monitor your achievements and identify areas for improvement.
The Risks of Not Planning
Failing to plan can lead to a lack of focus, missed opportunities, and unnecessary stress. Without clear objectives, it is easy to fall into the trap of short-term thinking, prioritizing immediate gratification over longterm growth. Additionally, the absence of a plan can make it difficult to measure progress, leading to feelings of stagnation and dissatisfaction.
In this business, where competition is fierce and resources are finite, planning is not a luxury—it is a necessity. Those who enter 2025 without a strategy risk being left behind by those who have taken the time to prepare.
Looking Ahead: 2025 and Beyond
The stakes are higher than ever. Technological advancements like artificial intelligence, shifts in the global economy, and evolving societal norms will continue to reshape the landscape of success. To thrive in this dynamic environment, having a plan is more critical than ever. However, planning for success is not a one-time exercise; it’s an ongoing process that evolves with your circumstances and aspirations.
As you prepare for 2025, take the time to reflect on your goals, create a realistic roadmap, and commit to consistent action. A well-thought-out plan not only increases your organization’s chances of success but also enhances your resilience and adaptability.
The future belongs to those who plan for it. As the saying goes, “A goal without a plan is just a wish.” Do not let 2025 catch you unprepared. Start planning today and make the year your best one yet.
Patrick Manzi NADA Chief Economist
November Sales Beat Expectations, Highest SAAR since May 2021
New light-vehicle sales in November 2024 beat expectations with a monthly SAAR of 16.5 million units, the highest since May 2021. November’s SAAR also increased 6.7% from November 2023, with its raw volume total of 1.360 million units up 10.1% year over year. According to Wards Intelligence, retail volume represented 1.19 million units of November’s total, an increase of 7.4% based on daily selling rates. Daily selling rate comparisons are helpful here because November 2024 had one more selling weekend than November 2023, which may explain some of the volume growth.
With alternative-fueled vehicles having made up 19.7% of all new vehicles sold this year, hybrids, plug-in hybrids, and battery electric vehicles have all gained market share; hybrids led the pack. At the end of November, 9.9% of all new vehicles sold were hybrids, an increase of 2.4 percentage points in market share year over year. In terms of raw sales volume, hybrid sales rose 35.2% during the same period.
OEM discounting has increased throughout 2024. According to J.D. Power, average incentive spending per unit should total $3,291 in November, up 42.3% year over year and up by $174 from October. We expect that OEMs, as usual, will further increase incentive spending in December.
Leasing activity plummeted in 2022 and 2023, so we believe there will be far fewer lease returns in 2025 and 2026 than in 2024. The number of leases expected to expire in November is down 14% from October, says J.D. Power, and off 35.9% from November 2023. Sourcing late-model used inventory in 2025 and 2026 will be more difficult.
For 2024 as a whole, we expect that new light-vehicle sales will hit our forecast of 15.7 million units and will likely exceed it if November’s sales momentum carries into December. New light-vehicle inventory should hover around 3 million units for most of 2025.
By Scott Pearson Chairman, American Truck Dealers
Preparing for 2025
Heading into 2025, as I close out my first year as ATD Chairman, we still face uncertainty over future applicability and compliance with the California Air Resource Board’s stringent EV mandates and emissions rules impacting the trucking industry’s franchised dealers’ economic viability. We will have a full plate of legislative and regulatory matters to address with the incoming Trump administration and a GOP-controlled Congress. All eyes are on not only the Trump EPA as it contemplates action on CARB’s waiver for car and truck emissions and EV mandate rules but also Congress, which could take action to remove the CARB carve-out allowed for in the U.S. Clean Air Act.
We also look forward to our first full year of leadership under our new ATD President Jacqueline Gelb, who started her position on December 9. Jacqueline comes to ATD from American Trucking Associations as their Vice President, Energy and Environmental Affairs.
Finally, ATD Show will soon be upon us in late January in New Orleans. If you have not yet done so, go to www.atdshow.org to register today.
I look forward to working together with our truck dealers, as we grapple with those matters that will impact our industry over the coming twelve months.
ATD Releases Statement on Issuance of CARB Omnibus NOx Waiver
On December 20, American Truck Dealers released the following statement in response to EPA’s granting of California Air Resources Board’s (CARB) request for a waiver allowing the agency to retroactively enact and enforce separate NOx tailpipe emissions standards for new heavy-duty engines developed for model years 2024 and 2027:
“ATD is disappointed that U.S. EPA granted CARB’s request for a waiver for its overburdensome Heavy-Duty Vehicle and Engine Omnibus Low NOx Regulations. ATD has long-supported policies that deliver real-world emissions reductions and benefits for America’s trucking industry. California’s aggressive emissions standards for heavy-duty diesel engines have contributed to product shortages and rationing, resulting in market disruption and uncertainty. EPA had an oppor-
tunity to realign California under one federal NOx standard, eliminating the crippling patchwork of regulations the industry is experiencing today. Unfortunately, the Biden Administration chose to side with California regulators.”
Join Us in New Orleans for the ATD Show
Register today for the ATD Show in New Orleans at the Hilton Riverside Hotel, January 23-25. You cannot miss this opportunity to learn, network, and experience New Orleans. Plus, you get two shows for the price of one – when you register for the ATD Show, you also get access to everything at the NADA Show. Here’s a compelling list of reasons to register today:
• Four General Sessions. Learn how robust data management practices and artificial intelligence (AI) systems can steer your truck dealership toward a more profitable and resilient future in The Power of Your Data and AI. Gain practical strategies to build trust, foster collaboration, and lead with courage in Building a Winning Team. You cannot miss OEM leaders discuss market trends, truck regulations, emerging technologies, electric trucks, and Navigating the Path Forward. And, in Fueling the Future, explore the latest clean truck technologies and fuels that will power trucks going forward.
• Workshops and Exchange Sessions. Whether you prefer traditional lectures or more interactive learning, ATD Show 2025 has you covered. Gain insights into the latest strategies and emerging trends from world-class speakers.
• NEW! Super Session: Decoding CARB. CARB’s new truck regulations are shaking up the California market. Hear from the experts on how these changes impact sales, inventory, and the truck market. Gain valuable insights and strategies to help you thrive in this evolving environment.
• ATD NextGen Leadership Networking Breakfast and Seminar (optional ticketed event). This optional event offers a unique chance to network with like-minded truck dealers and managers, and enjoy an insightful discourse on Next-Level NextGen, featuring keynote Drew Thompson.
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Hear lessons learned from an experienced fleet director with an exceptional track record of creating and leading high-performance teams in demanding and high-risk global environments. Then, break into groups to discuss proven leadership practices to achieve success in the transportation, logistics, and supply chain industries. All levels of experience are welcome to add this optional ticketed event to your itinerary.
• Make Meetings. Meet directly with OEMs to learn the latest updates and changes happening within your franchise.
• Connection Hub. Enjoy this casual yet engaging space where you can connect with colleagues, explore new business opportunities, and deepen relationships with industry leaders. Plus, do not miss the ATD Welcome Reception on Thursday night, happening right here in the Hub! ALSO NEW: Gear up for Truck Talk! Enjoy insightful mini-presentations on what’s driving the truck industry.
• Non-Stop Networking. ATD Show 2025 offers a series of receptions, including the ATD Welcome Reception, Networking Reception, and ATD NextGen Reception. These gatherings create a relaxed atmosphere for you to socialize and share ideas.
• Truck Dealer of the Year. This national award recognizes commercial-truck dealers for business performance, industry leadership, and service to their community. Join us for the announcement of the winner.
• Access to NADA Show 2025. Your ATD Show registration gives you access to the NADA Show 2025, where you can catch captivating Main Stage speakers Ryan Leak, Frank Caliendo, and Coach K. Plus, explore the Expo, attend Super Sessions, and enjoy the immersive entertainment at NADA Fest, the welcome reception at the Sugar Mill.
Announcing ATD Truck Dealer of the Year Nominees for 2025
By Catherine york, nada, Manager, CoMMuniCationS
The American Truck Dealers, along with Trucks, Parts, and Service, and Procede Software, are pleased to announce the nominees for the 2025 Truck Dealer of the Year, a national award that recognizes commercial-truck dealers for business performance, industry leadership, and their efforts to serve their local communities.
The nominees were selected by state, metro, and national dealer association leaders, and fellow ATD members. This year, six commercial-truck dealers were nominated.
The 2025 nominees are:
• Mark Bergey, CEO of Bergey Family Corporation (Souderton, Pennsylvania): Mark has worked over three decades at the business founded by his great-grandfather a century ago. Mark has held roles ranging from human resources to truck leasing. Under his leadership as CEO, Bergey’s employs over 1,800 team members in over 50 locations. Mark is passionate about protecting Bergey’s company culture, rooted in their mission statement: “We are driven to serve by treating others the way
we want to be treated, so that we may positively impact our team members, customers, and communities.”
• Will Bruser, Owner and CEO of Truckworx Kenworth (Birmingham, Alabama): Will began his work at Truckworx in 2004. He was named president in 2013 and bought the business in 2021. Under Will’s leadership, the company has grown to 21 locations and over 600 employees across Alabama, Mississippi, and the Florida panhandle. Will believes the company’s redefined culture has been pivotal to its success, hinging on its mission statement: “Do what’s right for the right reasons all day every day.” Truckworx was recently named North America’s 2024 Dealer of the Year and received the Gold Award for Overall Dealer Excellence by Kenworth Truck Company.
• Michael Burroughs, Vice President of Burroughs Diesel, Inc. (Laurel, Mississippi): Michael began his career as a teenager working as a porter and custodian at his uncle’s Western Star Truck dealership. After college, he returned as an intern, then worked his way up through sales and into the general manager’s position. Under his leadership, Burroughs Diesel, Inc. has expanded its services and product offerings, including the addition of a commercial tire division, a Blue Bird school bus dealership, a commercial towing company, and, more recently, a Dennis Eagle franchise. Beyond his work, Michael serves on the St. John’s Day School Board and has been an active member of the Jones County Economic Development Authority. Professionally, Michael has played an influential role in industry organizations, including serving on the Goodyear Dealer Advisory Board and as Chairman of the Western Star Trucks Dealer Council.
• Mike Clark, CEO of Dobbs Peterbilt (Memphis, Tennessee): Mike has nearly 35 years of experience in the trucking industry, including roles at Fenco Truck Accessories, PACCAR, and CSM Companies before taking the help at Dobbs Peterbilt. Under Mike’s leadership, sales, market share, capacity, and returns have grown. Dobbs Peterbilt has been recognized as a Peterbilt Best in Class dealer group three times. Mike currently serves on Peterbilt’s Dealer Council and PACCAR’s Information Technology Council.
• Shawn Trimble Craig, CEO and named Dealer Successor of Southwest International Trucks (Dallas, Texas): Prior to joining Southwest in 2022, Shawn spent her career working as an executive leader in the telecommunications industry. She excelled at building “A TEAMS” and launching new markets. It is these skills and many others that have prepared Shawn for her future at Southwest. In addition to being a change leader, Shawn surrounds herself with her “A TEAM” at Southwest. Five of her senior leaders have gone through the ATD Academy, and her philosophy is to hire, retain, and train the best people in the business. Shawn has already won several awards, including Women in Trucking’s best places for women to work 2023 and 2024 and Dallas Business Journal’s top Woman CEO award in 2024.
• Jeff Speno, President and Dealer Principal of Mission Valley Ford (San Jose, California): Jeff started working in his father’s dealership in college, working his way up through sales and management until he became the majority owner in 2015. Jeff graduated from the ATD Academy in 1992. He is passionate about his community, serving over 20 years in the San Jose Rotary and as the past president of the Gilroy Garlic Festival.
A panel of judges from Indiana University’s Kelley School of Business will evaluate the nominees and select a winner.
The winner will also have the opportunity to serve as a guest lecturer at the University to share his or her professional story with students interested in entrepreneurship. Additionally, he or she will serve on the ATD Board of Line Representatives for a one-year term in a non-voting role.
The 2025 winner will succeed 2024 Truck Dealer of the Year nominee Katie Hopkins, president and CEO of Truck Centers, Inc. based in Troy, Illinois.
The winner will be announced during this year’s ATD Show general session on Friday, January 24. The annual ATD Show runs from Thursday, January 23, through Saturday, January 25, at the Hilton New Orleans Riverside. The three-day event runs concurrently with NADA Show 2025.
Please help us in congratulating the 2025 Truck Dealer of the Year nominees.
Trucking Grapples With Economy, Lawsuits, EV Rules in 2024
High Costs and Nuclear Verdicts Add to Freight Recession Woes
By eriC Miller, TransporT Topics
In 2024, truckers traveling the nation’s highways couldn’t help but notice the construction zones popping up like springtime Texas wildflowers, offering evidence of the road and bridge improvement investments during the third anniversary of the $1.2 trillion bipartisan infrastructure law passed in 2021.
There was more to come. In October, transportation officials announced a $62 billion chunk of funding to continue road, bridge, and tunnel improvements across all 50 states.
Of course, even that good news could not solve a lingering nationwide truck parking shortage, stop an assault on the independent owner-operator model, slow regulatory pressure to replace diesel trucks with electric vehicles or stem the increasing number of nuclear jury verdicts in the nation’s courtrooms. Another sign of the times in 2024 was the continued concern over the economy. For the second year in a row, it was the No. 1 industry concern expressed in a survey by the American Transportation Research Institute. The cause for concern: the combined impacts of rising operational costs with the lingering freight recession and declining freight rates, according to the ATRI report.
But by year-end, experts were optimistic that the economic doldrums might improve in 2025.
The year started out with a bad omen for independent contractors and motor carriers who depend on them. On January 9, the U.S. Department of Labor announced it was adopting a multistep “economic factors” test for companies to follow to determine whether a worker should be classified as an independent contractor or employee, adding a layer of regulatory oversight that transportation stakeholders warned could upend the business model for independent truck drivers.
The federal law was modeled after one in California known as AB 5. The California Trucking Association has for years waged a legal battle against it, as the law forces fleets there to reclassify owner-operators as employees. In August, however, the latest in a series of legal setbacks in its fight compelled CTA to throw in the towel and cease its challenges.
Otherwise, it was a quiet year for trucking on the regulatory side, said Dan Horvath, American Trucking Associations senior vice president of regulatory affairs and safety policy.
“I think 2024 was a different year in the sense that there weren’t any major rulemakings that were emerging on a regular basis,” he said.
That’s not to say there hadn’t been plans for federal trucking regulators to do so. But in July, for example, regulators announced they were delaying until 2025 a supplemental heavy-duty truck speed limiter proposed rule, an automatic emergency braking final rule, and a proposed new truck driver seizure standard.
“What we did see was the Federal Motor Carrier Safety Administration perhaps move the needle forward on some general regulatory items such as expanding the Compliance Safety Accountability crash preventability program,” Horvath said. “It isn’t a major rulemaking, but by the same token it’s really an important piece of the broader regulatory puzzle for our trucking companies. Expanding the program allows the carrier to challenge that crash and have it marked as not preventable on their profile.”
He added, “From a purely safety perspective, I’d say the biggest regulatory item that is still pending and will be for some time was the Drug Enforcement Agency’s proposal to downgrade marijuana from Schedule I to a Schedule III drug. That was back on May 27. That was a big one. We’re still waiting for a response from the Department of Transportation as to how motor carriers are going to be impacted if there was a rescheduling. The concern is that regulators could decide to no longer test for marijuana.”
But there was no indication that the frequency and number of nuclear lawsuits declined in 2024, according to Doug Marcello, an attorney with the Harrisburg, Pennsylvania, law firm of Saxton & Stump.
“In fact, they seem to be escalating to the point that we’re
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starting to reach crisis proportions in terms of the impact they’re having on the industry as a whole, and with insurance,” Marcello said. “There’s no indication of it letting up. The number and the amounts of the verdicts out there have been very disturbing.”
But there has been progress, as some states have sought to curtail the trend at a more local level.
“In Georgia, for example, Gov. Brian Kemp is making it a priority,” Marcello said. “Over the last several years, Florida and other states have enacted some abuse reforms law. Hopefully, we’ll see that trend continuing. But it’s a multitier approach that is necessary, because even if the legislators enact lawsuit abuse reforms, the next thing is for the elected judges to enforce the laws in a manner to reduce lawsuit abuse.” Marcello added that judicial interpretations also play a key role in case outcomes.
Decarbonization
For many, the quest by California and Environmental Protection Agency regulators to mandate a rapid transition from diesel to electric trucks was the most concerning development for fleets in 2024.
“Out of all the regulatory items that were discussed in 2024, certainly emissions standards, greenhouse gas emissions standards, would top that list,” Horvath said. “That would include the EPA’s greenhouse gas Phase 3 standards for heavy-duty vehicles.”
The EPA rulemaking, announced in March, set stringent standards and timelines to reduce greenhouse gas emissions from heavy-duty vehicles from model years 2027 to 2032. The rule relies heavily on battery-electric and hydrogen-electric power systems.
There were a number of other noteworthy efforts underway in 2024. Some of them included:
• At year-end, a controversy over a $17.9 billion contract to improve moving services for military members and their families still was not workable, according to a number of members of large moving companies who said the military had not yet explained how the contract would work. At press time, the contract was being examined by the Government Accountability Office.
• An Advisory Committee on Underride Protection was tasked with providing information, advice, and recommendations to the secretary of transportation on safety regulations to reduce underride crashes and fatalities. In the end, the committee’s final report called on the National Highway Traffic Safety Administration to pursue a rule requiring side underride guards on heavy trucks. NHTSA declined.
• FMCSA created a Predatory Leasing Task Force to evaluate lease agreements in the industry and their potential safety and financial impacts on owner-operators. At press time, the task force was continuing its work but had identified myriad lease agreements that left owner-operators in financial straits.
• While driver detention has decreased slightly in recent years,
the overall costs of being detained at customer facilities for more than two hours remain substantial, an ATRI analysis made public in September concluded. Drivers reported being detained during 39.3% of deliveries, resulting in major consequences for industry productivity and safety, according to ATRI’s 2024 survey of 587 drivers.
• In May, a string of an estimated 100 staged accidents with tractor-trailers in the New Orleans area turned grisly when two of the scammers were charged with the 2020 murder of a co-conspirator who was cooperating with the FBI. One woman has since pleaded guilty. A 10-count indictment in December charged two law firms, two individual attorneys and multiple participants in a sweeping witness tampering and murder conspiracy.
Industry Groups Respond to CARB Waiver Decision
By Beth Colvin Trucks, parTs and service
More industry groups are responding to the EPA’s decision to issue a waiver to the state of California, allowing it to enforce NOx tailpipe emissions that exceed federal regulations.
The American Truck Dealers says it’s disappointed in the decision.
“ATD has long-supported policies that deliver real-world emissions reductions and benefits for America’s trucking industry,” it said in a statement released on December 20. “California’s aggressive emissions standards for heavy-duty diesel engines have contributed to product shortages and rationing, resulting in market disruption and uncertainty. EPA had an opportunity to realign California under one federal NOx standard, eliminating the crippling patchwork of regulations the industry is experiencing today. Unfortunately, the Biden administration chose to side with California regulators.”
On December 18, the Clean Freight Coalition, an alliance of transportation stakeholders committed to a clean energy future for the commercial vehicle industry, sent a letter to the country’s heavy-duty OEMs suggesting they abandon their Clean Truck Partnership agreement with the California Air Resources Board (CARB).
“The Clean Truck Partnership (CTP) agreement entered between your companies and CARB has served as tacit approval of the regulatory timelines and requirements mandated by CARB,” says CFC Executive Director Jim Mullen.
The group says the EPA waiver decision will cause “major upheaval disruption” in the trucking industry, potentially leading to a shortage of internal combustion engines and trucks.
“As the industry embarks on a new year and new administration, industry collaboration is needed to reset and revise government standards that have been put in place,” Mullen says. “To set achievable national emissions standards, truck manufacturers should abandon the CTP and are encouraged to work with industry partners to block harmful regulations that do not
set us on a path to success. History has proven that our industry can overcome obstacles of any nature when stakeholders are aligned; this obstacle is no different.”
For its part, CARB says the EPA waiver is consistent with more than 50 years of precedent that allows California to implement solutions to address its air quality challenges.
“California’s ongoing success in tackling pollution challenges and improving public health is possible thanks to landmark regulations that support technological innovation and move us toward a zero-emissions future for transportation,” CARB Chairwoman Liane Randolph says. “Consumers and fleets are increasingly making the choice to drive clean vehicles and today’s waiver approvals will further that progress.”
CARB says the Omnibus NOx regulations would cut heavy-duty NOx emissions by 90%, overhaul engine testing procedures, and further extend engine warranties. The expected public health benefits, CARB says, from reduced illnesses and other improvements are $23 billion.
So far, CARB has approved engines from Volvo, Paccar, and Cummins for compliance with Omnibus regulations.
Defend Your Dealership: Battling Phishing Attacks in the Heavy-Duty Truck Industry
provided By doCuphaSe
Phishing attacks are the con artists of the digital world –crafty, convincing, and relentless. In the heavy-duty truck dealership industry, strong security measures are essential, as dealerships have become prime targets for cybercriminals. Phishing is not just an annoying email; it is a strategic effort to infiltrate systems and compromise sensitive data.
Why Dealerships Are Vulnerable
Heavy-duty truck dealerships store valuable financial and personal data, making them lucrative targets for cyberattacks. A staggering 91% of cyberattacks start with phishing emails, demonstrating the sheer scale of the threat. The dealership industry’s reliance on digital communication – coordinating sales, orders, and financing – further increases vulnerability, especially during busy times.
Picture the end-of-month rush: the sales team hustles to meet quotas, the service department works overtime, and the finance department is buried in paperwork. Amid this chaos, a convincing email from a “supplier” can trick a distracted employee, leading to a catastrophic breach.
The cost of a data breach is staggering, averaging $4.88 million globally in 2024. With rising costs, regulatory demands, and operational complexity, dealerships must prioritize cybersecurity to avoid severe financial and reputational damage.
The Risks of Phishing Attacks
Phishing attacks are not limited to stolen data. They can lead to ransomware attacks, where cybercriminals lock systems
and demand ransom, causing significant downtime. Customer trust can also take a hit, damaging the dealership’s reputation. Alarmingly, nearly 40% of companies affected by ransomware in 2023 paid over $1 million in ransom.
Compounding the risks are FTC regulations, which mandate practices like phishing simulations, multi-factor authentication (MFA), and network monitoring. Non-compliance can lead to hefty fines and legal repercussions.
Phishing Tactics to Watch
Phishing attacks have evolved beyond simple emails:
• General Phishing Emails: Broad attempts to extract sensitive information.
• Spear Phishing: Tailored attacks using detailed personal or company information.
• SMS Phishing (Smishing): Fake text messages designed to trick recipients into clicking malicious links.
These attacks manipulate emotions like fear and urgency to bypass critical thinking, making awareness key to prevention.
Defending Your Dealership
A strong defense requires proactive strategies:
• Employee Training: Ongoing, engaging simulations to build cybersecurity awareness.
•Multi-Factor Authentication (MFA): Adds a critical layer of protection.
• Continuous Monitoring: Real-time detection of suspicious activities.
• Vulnerability Scans: Regular checks to identify and fix system weaknesses.
• Dark Web Monitoring: Alerts you if compromised credentials appear online.
Security is not static; testing and improving defenses must be continuous.
How DocuPhase Enhances Security
We combine automation with robust security measures to safeguard your dealership:
• Error Reduction: Automating routine tasks minimizes human error, a leading cause of phishing success.
• Secure Document Management: Automated workflows ensure sensitive data is accessible only through verified channels.
• Regulatory Compliance: Features like audit trails and MFA help meet FTC requirements.
• Training Resources: Raise team awareness and foster a culture of vigilance.
Real-time monitoring and endpoint security can protect against unauthorized access. By streamlining operations and strengthening security, our solutions create a safer digital environment for your dealership.
Winding Down 2024 as We Prepare for 2025
SCott duBe, partner at MCgovern hyundai rt. 93, repreSentS nada’S MaSSaChuSettS MeMBerS on the nada Board of direCtorS he Can Be reaChed at SduBe@ MCgovernauto.CoM.
All dealers are working hard to close out 2024 with a strong finish. Throughout the year, there have been many challenges faced and, hopefully, overcome. An aggressive federal regulatory environment and inconsistent economic conditions in our industry provided hurdles dealers strove to overcome from the drop of the ball in Times Square twelve months ago.
Going into 2025, the results of the November federal elections, with the GOP in control of the White House and both chambers of Congress, hopefully will deliver a change in direction legislatively and regulatorily toward a more business friendly environment. We at NADA will continue to remain on top of not only developments at the federal agencies, which can be unpredictable even under a Republican administration, but also the various, never-ending challenges presented to us from the OEMs interested in altering the dealer franchise system.
Moreover, every year, especially during the holiday season, dealers step up time and time again to help meet the charitable needs of the communities in which they operate and live. Dealers are always the first to answer the call to help out with Toys for Tots, meals for the needy, or a visit by Santa at the children’s hospital. Through good times and bad, dealers are there to fill that need. We owe our dealers applause for meeting the needs of our communities during the year.
Finally, we are counting down the days until the auto industry converges in New Orleans, January 23-26, for the highly anticipated NADA Show 2025. This is not just an event; it is an extravaganza that promises something for everyone. We have not been to the Crescent City since 2017, having missed the scheduled event in 2021 due to Covid shutdowns. We all are looking forward to our return.
There is still time to register at nada.org. Don’t delay – register today!
Local Dealerships Lead the Way in Providing Holiday Cheer to Those in Need
The season of giving has arrived. In communities all over the country, local businesses and charities are working to pro-
vide toys and gifts to families in need. Leading the charge are local auto dealerships, who have long partnered with established charity groups like Toys for Tots or organizing events of their own to make sure no family misses out on holiday cheer.
If you turn on your local news during the holiday season, it is hard to miss the toy donation segments featuring nearby dealerships that often help collect hundreds of toys for families in need. Many dealerships enter into partnerships each year with Toys for Tots, a charity run by the United States Marine Corps that gives out toys for Christmas. While Toys for Tots helps organize the distribution of donated toys, they rely on their partners to help collect and host drop off sites to make it as easy as possible for those who so generously give.
This touching support can be found from coast to coast.
• In Highland, Michigan, the LaFontaine Automotive Group is hosting Toys for Tots collection boxes at two of its member dealerships.
• Charlotte, North Carolina-based Scott Clark dealerships, Apple Chevrolet in Tinley Park, Illinois, and Kia and Hyundai of Mankato in Mankato, Minnesota, are also participating in the Toys for Tots program this year to give back to their communities.
• Others are contributing to those in need via monetary donations. The Greater Lehigh Valley Auto Dealers in Allentown, Pennsylvania, for example, has contributed over $150,000 to various charities in their region ahead of the holiday season.
The holidays are a time of giving, and that does not just mean giving gifts on Christmas Day. It is a time when communities come together to give the gift of joy to everyone, and local dealerships remain committed leaders to helping those in need as we approach the end of the year.
Weathering the Storm: Kings Ford Celebrates 110 Years in Business
By Sheryll poe, nada
If your dealership has hit the century mark, let NADA know.
The year 1915 was a big one for the still-fledgling automotive industry.
There were 2.4 million registered cars and trucks on the road, a number that would jump to 3.6 million in 1916.
In Detroit, the Ford Motor Company built its’ one millionth car at the River Rouge plant. Chevrolet Motor Company, which had been founded in 1911 and only began manufacturing cars two years later, built 13,600 cars in 1915, a production increase of more than 160 percent over the previous year.
C.R. Patterson & Sons in Greenfield, Ohio became the first and only African American-owned car company in history.
Meanwhile, just 52 miles east, Victor Shumard opened his second Ford agency in Loveland, Ohio.
Quite a bit has happened since the Loveland Ford Agency officially opened, including changes to the name, ownership, and location of the business.
But first, Victor Shumard had to deal with a flood.
Historic Flood Leads to New Beginnings
Victor Shumard was born in 1870, the second son of a well-known local horse and wagon harness businessman in Milford, Ohio. Victor’s father, Thomas, had founded the “T. M. Shumard & Sons” harness factory in 1879.
In 1903, Thomas Shumard split the company, relocating his equipment business to nearby Lockland, Ohio, and leaving the operations of his harness business in Milford to his sons, Victor and Lee.
In 1912, Victor Shumard founded a Ford agency to compliment the family’s transportation business, operating from the 5 Water Street building in downtown Milford near the Little Miami River.
But catastrophe soon struck. On March 24, 1913, storms and flooding overran the Little Miami River, decimating the towns of Milford, Loveland, Miamiville, and South Lebanon. The Great Flood of 1913 is still considered one of Ohio’s greatest natural disasters. Shumard’s building at 5 Water Street was barely saved from being washed away.
In the wake of the disaster, a new steel bridge was constructed in Loveland and real estate was offered at a discount. Ever the businessman, Shumard opened his Loveland Ford Agency at its new location at 211 Riverside Drive in 1915.
Many Ownership Changes Over the Years
Shumard, who was a prolific entrepreneur with expanding business investments in downtown Milford, sold the Loveland Ford Agency and its facility to another local automobile dealer, Charles Wilson by 1923. The dealership would change hands four more times before Robert (Bob) Ring and Jerry Storm took ownership in 1979. Aside from his Loveland Ford dealership, the many transportation businesses and automotive dealerships that Shumard founded during his lifetime would all eventually divest; the last closure occurred as recently as 2009 when the Pontiac agency he founded in the 1930s lost its manufacturer brand, leaving the franchise today known as Kings Ford the sole survivor to carry on his entrepreneurial legacy.
“Although the franchise has changed ownership several times through the years, the past 45 years have been the longest stretch of any singular ownership group or family,” says Joe Ring, Kings Ford Inc.’s COO and minority member. “Ironically, the briefest ownership of the franchise is attributed to its founder [Victor Shumard].”
“In 1979, my father – Bob Ring – leveraged all his assets and took an enormous risk with his business partner Jerry
Storm when they purchased the store from its previous owner, Russ Warner,” Ring explains. “Warner sold because he was predicting difficult times ahead, and he was right – my father barely made it during the first four years of ownership when the economy went into recession and interest rates rose above 20%. The fact they survived at all during those trying times, and the store would eventually thrive over the following decades, is a testament to their perseverance and vision.”
In 1995, Kings Ford, Inc. relocated to what has now grown into one of the nation’s largest auto malls – Kings Automall in Cincinnati, which houses approximately 7,000 new and used vehicles from 18 new vehicle manufacturer brands at one location.
A New Period of Stability, Growth
Joe Ring, also known as the local franchise historian, says, “The move from Loveland to Kings Automall saw explosive growth across revenues and especially expenses that was at times overwhelming for Bob; I don’t know that my father could have survived had his daughter, Carol Fuller, and her husband, Doug Fuller, not joined the leadership team in 1995 as a part of the transition. Together, the number of fierce storms they successfully weathered – before I joined the store in my current role as COO in 2014 – was many.”
Today, the Kings Ford dealership is owned and operated by Bob Ring’s daughter, Carol, who serves as president. Kings Ford is proud to be one of the few WBENC-Certified, woman-owned new vehicle dealerships in the state of Ohio.
“During our 110-year franchise history, six different male majority owners have operated our franchise,” Ring says. “Two years ago, we turned a chapter in the franchise history with our first female majority owner and operator.”
The other constant has been a dedication to community, sponsoring charities and community events throughout the years. “We are passionate about high school trade skills development to support our industry’s automotive technician needs and we support several local high school automotive institutes,” Carol Fuller says.
As the second oldest continuously operating Ford franchise in the state of Ohio (the title of oldest belongs to Chapman Ford of Marysville, Ohio), Kings Ford will be celebrating its 110th anniversary of the dealership by decorating the store interior with historic images of the franchise and issuing a franchise history pamphlet. By 2025, they also plan to finalize publishing a full online chronicle of the franchise history – already mostly complete – on their company website at www.kingsfordinc.com/history.
“Our family assumed ownership of the franchise in its 64th year, but we’ve collected many years of memories of its history during our 45 years of ownership, and we are excited to share them with our customers and community,” Fuller says.
