January 2015 MSADA Auto Dealer

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

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

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FIRST CLASS MAIL US POSTAGE PAID BOSTON, MA PERMIT NO. 216

January 2015 • Vol. 27 No. 1

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

Let It

Ride

2 0 1 5 N e w En g l a n d I n t e r n a t i o n a l A u t o S h o w Dealer Summit & C h a r i t y C a sin o N i g h t G a l a

Let It

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Thank You

From the New Car Dealers of Massachusetts and the Auto Tech Scholarship Students you have helped, we thank our event sponsors: ROCKET FUELED Cars.com

NITROUS BOOSTED

Southern Auto Auction Federated Insurance

TURBO CHARGED Zurich

HIGH OCTANE Albin, Randall & Bennett CDK Global DealerDOCX GW Marketing Services Reynolds & Reynolds TD Bank The Boston Globe

VALET SERVICE SPONSOR The Boston Globe

FULL BAR SPONSOR O’Connor & Drew

COAT CHECK SPONSOR Ethos Group

FOOD STATION SPONSORS CVR GW Marketing Services Huntington National Bank Lynnway Auto Auction (3x) Sun Trust

WELCOME GIFT SPONSOR Solect Energy Development THEME SPONSOR Santander Bank BAND SPONSOR TrueCar TICKET SPONSOR American Fidelity Assurance BREAK STATION SPONSOR Downey & Company

DESSERT STATION SPONSORS The Boston Herald Murtha Cullina LLP PARTING GIFT Mid-State Insurance FRIEND OF THE SCHOLARSHIP PROGRAM Performance Management Group

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St a f f D ir e ct o ry Robert O’Koniewski, Esq. Executive Vice President rokoniewski@msada.org Jean Fabrizio Director of Administration jfabrizio@msada.org Peter Brennan, Esq. Staff Attorney pbrennan@msada.org Marta Argueta-Guerra Administrative Assistant/www Membership Coordinator mguerra@msada.org Aut o D e a l e r M A g a z i n e Robert O’Koniewski, Esq. Executive Editor Catherine MacDonald Editorial Coordinator macdonaldcs8@gmail.com Subscriptions provided annually to Massachusetts member dealers. All address changes should be submitted to: MSADA by e-mail: mguerra@msada.org Postmaster: Send address change to: One McKinley Square, Sixth Floor Boston, MA 02109 Auto Dealer is published by the Massachusetts State Automobile Dealers Association, Inc. to provide information about the Bay State auto retail industry and news of MSADA and its membership.

Ad Directory Blum Shapiro 25 Boston Herald 36 Lynnway Auto Auction 28 Nancy Phillips 25 O’Connor & Drew 35 Reynolds & Reynolds 9 Southern Auto Auction 27 SunTrust, 24

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

Ta b l e o f C o n t e n t s

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From the President: New Year, New Models THE ROUNDUP: An Exciting Start to 2015 TROUBLESHOOTNG: Recall Reimbursement LEGAL: New Massachusetts Parental Leave Law Extends Protections To Male Employees AUTO OUTLOOK INSURANCE: Under What Situations Can My Employees Sue Me for an Injury?

DEALER SERVICES: Play Yourself

Cover Story: 16 2015 MSADA Dealer Summit 20 2015 MSADA Casino Night 22 2015 New England 24 29 32

International Auto Show

NEWS From Around the Horn nada update: New-Car Dealers Are Catalysts for Change NADA MARKET BEAT

ADVERTISING RATES Inquire for multiple-insertion discounts or full Media Kit. E-mail jfabrizio@msada.org Quarter Page: $450 Half Page: $700 Full Page: $1,400

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

Join us on Twitter at @MassAutoDealers www.msada.org

Massachusetts Auto Dealer JANUARY 2015

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from the President

by Scott Dube, MSADA President

New Year, New Models The Auto Show Preview Night Gala Paved the Way for 2015

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rom the moment our giant seatbelt is unbuckled, walking the floor of the New England International Auto Show is one of the highlights of any auto dealer’s year. It’s a moment when customers, dealers, and everyone else in the industry is united under the badge of Enthusiast.

These new models create excitement no matter what your dayto-day relationship is with them.

These are beautiful machines, and we’re the ones lucky enough to keep bringing them to the public when the lights in the convention center go dim. And that’s our dealer community’s time to shine. When people walk out, hundreds (if not thousands) end up walking into their local dealership.

Among the many key messages we can take away from the public’s excitement about the new models is that our industry thrives when it moves forward. We face constant challenges, day in and day out, and the only similarity is that every day adds something new. The Auto Show is a great time to remind the general public, lawmakers, and maybe even ourselves that this industry is international, national, and local down to our Main Street businesses. Whether it’s a company with headquarters in Italy or Korea or Michigan, it’s up to us to get these exciting machines in the hands of customers. It’s a proud moment, and a great reminder of how lucky we are to be the gear that keeps this industry moving forward.

The Auto Show is also our time to gather together and celebrate the promise of a new year. I hope you had a great time

JANUARY 2015

during our gala, which we hosted to support our Charitable Foundation. It was wonderful seeing so many of you, along with your family and friends, having a great time while supporting a worthy cause. Look for more information about our Charitable Foundation scholarship program later in the year.

I would also like to take a moment to thank our Gala sponsors.

Each of them understands our commitment to helping the next generation of automotive technicians, and their support helps us further that goal. We couldn’t do the event each year without them, and it is a privilege and a pleasure that so many have worked with us for more than a decade. A full list of sponsors is available on page 2. If you’re a vendor in our industry and don’t see your name there, I’d encourage you to reach out to us and get involved by contacting Executive Vice President Robert O’Koniewski (rokoniewski@msada.org).

“These are beautiful machines, and we’re the ones lucky enough to keep bringing them to the public.”

Massachusetts Auto Dealer www.msada.org

Annual Meeting Details Coming Soon As we head into 2015, your Association is beginning the planning process for this year’s Annual Meeting. We’ll let you know details here as we continue to nail things down. In the mean time, please feel free to send me any feedback about last year’s event or ideas you have about who you would like to speak. This Association’s gatherings have always thrived on your input, and our Annual Meeting is a crucial point in our community’s calendar.

Please help me make it the best it can be. t

MSADA

A ssociate M ember D irectory Name

Msada Board Barnstable County

Gary Beard, Dick Beard Chevrolet

Berkshire County

Brian Bedard, Bedard Brothers Auto Sales

Bristol County

Richard Mastria, Mastria Auto Group

Essex County

William DeLuca III, Woodworth Motors John Hartman, Ira Motor Group

Franklin County

Jay Dillon, Dillon Chevrolet

Hampden County

Jack Sarat, Jr., Sarat Ford

Hampshire County

Bryan Burke, Burke Chevrolet

Middlesex County

Chris Connolly, Jr., Herb Connolly Motors Scott Dube, Bill Dube Hyundai Frank Hanenberger, MetroWest Subaru

Norfolk County

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

Plymouth County

Christine Alicandro, Marty’s Buick GMC Isuzu

Suffolk County

Robert Boch, Expressway Toyota

Worcester County

Steven Sewell, Westboro Mitsubishi Steve Salvadore, Salvadore Auto

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

Immediate Past President James G. Boyle, Tuck’s Trucks

NADA Director

Don Sudbay, Jr., Sudbay Motors

Officers

President, Scott Dube Vice President, Chris Connolly, Jr. Treasurer, Jack Madden, Jr. Clerk, Charles Tufankjian

Contact Telephone

ADESA Boston Chris Carli (508) 270-5403 ADP Dealer Services Maria Trezza (973) 404-4466 Albin, Randall & Bennett Barton D. Haag (207) 772-1981 American Fidelity Assurance Co. Tom Trudell (413) 885-5477 AutoAlert Don Corinna (949) 398-7008 AutoRaptor (RAL) Howard L. Leavitt (401) 421-6533 Bank of America Merrill Lynch Dan Duda and Nancy Price (781) 534-8543 Bellavia Blatt Andron & Crossett, PC Leonard A. Bellavia, Esq (516) 873-3000 Blum Shapiro John D. Spatcher (860) 561-4000 Boston Globe Mary Kelly (617) 929-8373 The Boston Business Advisory Group Paul Cuomo (781) 681-1501 Vincent Saccone (781) 681-1519 Burns & Levinson LLP Paul Marshall Harris (617) 345-3854 Cars.com Heidi Allen (312) 601-5376 CitNOW Jack Gardner (617) 221-8008 Construction Management & Builders, Inc. Kate Sullivan (781) 246-9400 CVR John Alviggi (267) 419-3261 Dealerdocx Brad Bass (978) 766-9000 Dealermine Inc. Karen Parmenter (800) 304-3341 x5179 DealerTrack Ernest Lattimer (516) 547-2242 Downey & Company Paul McGovern (781) 849-3100 EasyCare New England Inc. Mike Douglas (770) 246-9724 Ethos Group, Inc. Drew Spring (617) 694-9761 F & I Resources Jason Bayko (508) 624-4344 Federated Insurance John Ballard (859) 312-9896 First Citizens Federal Credit Union Joe Ender (508) 979-4728 Fisher & Phillips LLP John Donovan (404) 240-4236 Joe Ambash (617) 532-9320 Gulf State Financial Services Stephanie Franklin (713) 580-3143 GW Marketing Services Gordon G. Wisbach Jr. (781) 899-8509 Huntington National Bank John J. Marchand (781) 326-0823 John W. Furrh Associates Inc. Kristin Perkins (508) 824-4939 KEEPS Corporation Darcy Silver (718) 309-6133 Key Bank James Q. Moretti (781) 558-5132 KPA Rob Stansbury (484) 326-9765 Leader Auto Resources, Inc. Brendan J. Murphy (518) 878-6341 Lynnway Auto Auction Jim Lamb (781) 596-8500 M & T Bank John Federici (508) 699-3576 Management Developers, Inc. Dale Boch (617) 312-2100 MetroMedia Energy Timothy Teevens (800) 828-9427 Micorp Dealer Services Frank Salkovitz (508) 832-9816 Mid-State Insurance Agency James Pietro (508) 791-5566 Mintz Levin Kurt Steinkrauss (617) 542-6000 Murtha Cullina Thomas Vangel (617) 457-4000 Nancy Phillips Associates, Inc. Nancy Phillips (603) 658-0004 Northeast Dealer Services, Jim Schaffer (781) 255-6399 O’Connor & Drew, P.C. Kevin Carnes (617) 471-1120 Performance Management Group, Inc. Mark Puccio (508) 393-1400 R.L. Tennant Insurance Agency, Inc. Walter F. Tennant (617) 969-1300 Reflex Lighting Ping Weiner (617) 269-4510 Resources Management Group J. Gregory Hoffman (800) 761-4546 Reynolds & Reynolds Marc Appel (413) 537-1336 Robinson Donovan Madden & Barry, P.C. James F. Martin, Esq. (413) 732-2301 Samet & Company John J. Czyzewski (617) 731-1222 Santander Richard Anderson (401) 432-0749 Schlossberg, LLC Michael O’Neil, Esq. (781) 848-5028 Sentry Insurance Company Eric Stiles (715) 346-7096 Shepherd & Goldstein Ron Masiello (508) 757-3311 Silverman Advisors, PC Scott Silverman (781) 591-2886 Solect Energy Development Kristen Brandt (781) 733-0223 Southern Auto Auction Tom Munson (860) 292-7500 SunTrust Bank Michael Walsh (617) 345-6567 Taino Consulting Group Herby Duverné (617) 797-9316 Target Dealer Services Andrew Boli (508) 564-5050 TD Auto Finance BethAnn Durepo (603) 490-9615 TD Bank Michael M. Lefebvre (413) 748-8272 TrueCar Pat Watson (803) 360-6094 Wells Fargo Dealer Services Christopher Peck (508) 314-1283 Wicked Local Media Massachusetts Jay Pelland (508) 626-4334 Windstream Rick Caruth (978) 296-0313; (413) 977-6111 Zurich American Insurance Company Steven Megee (774) 210-0092

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The Roundup

An Exciting Start to 2015

by Robert O’Koniewski, Esq. MSADA Executive Vice President

On January 16 your Association and the Massachusetts State Auto Dealers Charitable Foundation held its 18th Auto Show Charity Gala to kick off our 58th edition of the New England International Auto Show at the Boston Convention and Exhibition Center.

We feted over 600 guests, including our dealers, sponsors, and other industry representatives, to raise funds for our auto tech scholarship program.

Party-goers were entertained by the rousing sounds of the Love Dogs, a popular area band.

Based on last year’s success and enthusiasm, we again ran a casino party room where attendees could roll the dice and play cards to win great prizes, all for a worthy cause – our tech scholarships. Congratulations to our big winners: Anna Fontaine, Bill Hoover, Mike Sewell, Edward Ferreira, Paul Spinos, and Herby Duverne.

Gala attendees had access to the auto show floor, including five “ride and drive” offerings.

This month’s magazine has a full recap of these events.

Prior to the evening’s party, we held our second annual Dealer Summit where dealers and their key managers heard presentations from keynoter Jim Ziegler (“The Good, the Bad, and the Ugly”), Fisher & Phillips attorney Joseph Ambash (“Key Labor and Employment Law Developments for 2015”), and attorney Cynthia Larose of Mintz Levin PC (“Customer Data: Your Most Valued Asset”). In a new segment called “5 in 30”, attendees received “quick hits” from Mike DeCarlo of DealerDOCX, Mark Babcock of MetalWave, Robert Champagne of Ethos Group Compliance, Ken Lesser of Taino Consulting Group, and Tom Trudell of American Fidelity Assurance.

Finally, we owe a huge debt of gratitude to our JANUARY 2015

Massachusetts Auto Dealer www.msada.org

generous sponsors for these events. Many of our associate members purchased sponsorships, and we have detailed their levels of participation in this issue. As always, we ask our member dealers to keep our associates and sponsors in mind when they seek various services. Our Dealer Summit and Auto Show Charity Gala would not be the successes they were without this outside support.

Thank you to all our sponsors.

Scott Shulman, Our 2015 Dealer of the Year Kevin Holmes, Truck Dealer of the Year Nominee

Following our Boston auto show, over 60 Massachusetts dealers found their way to NADA’s 2015 national convention in San Francisco on January 23-25, which experienced Chamber of Commerce weather in the mid-60s-70s, a real treat prior to the winter storm Juno blizzard we experienced upon our return to New England.

The weekend proved special for three of our member dealers.

Scott Shulman of Best Chevrolet carried the honor of Massachusetts TIME Magazine Dealer of the Year into the competition against 53 other representatives from across the country. The state honor is based on a compilation of works on behalf of the state association, efforts for social and charitable organizations, and commitment to the community. Although Scott did not receive the national award, he and his colleagues on the stage that day are all winners for the successes on behalf of their fellow dealers and fellow citizens where they live and work. The national TIME DOY title went to New Hampshire nominee Andy Crews of AutoFair, who is based in the Granite State and is an MSADA member with stores in the Com-

MSADA monwealth.

Finally, Kevin Holmes of Tri State Truck Center in Shrewsbury was one of six nominees for the 2015 Truck Dealer of the Year award, which was being presented by American Truck Dealers (ATD), a partner of NADA, Heavy Duty Trucking magazine, and Procede software. We profiled Kevin in our December magazine.

Although Kevin did not win the ultimate title, we are proud to have one of our own members from among hundreds of truck dealers across the country to be on the stage with his five other colleagues.

Following Saturday’s opening session, at which Scott Shulman and his colleagues were honored, we held our state cocktail reception at the Intercontinental Hotel, jointly sponsored by our partner O’Connor & Drew, where MSADA President Scott Dube welcomed Massachusetts dealers and MSADA associate members in town for the festivities. Scott Shulman also gave warm remarks with his family in attendance.

Change on Beacon Hill

On January 8 Republicans Charlie Baker and Karyn Polito officially became Governor and Lieutenant Governor, respectively, of the Commonwealth of Massachusetts after their swearing in in the House chamber.

The day before the Baker-Polito team moved into the Corner Office, the 189th General Court of the Commonwealth took the oath of office. Of the 200 legislators, over 20 are beginning their first term. The House of Representatives will be led, again, by Speaker Robert DeLeo (D-Winthrop). The Senate, however, will have a new president for the first time in eight-years, as Sen. Stanley Rosenberg (D-Amherst) was elected to replace Therese Murray, who retired.

The next step for each chamber is to organize itself with leadership, committees make-up, and chairmen and vice chairs.

Once that happens, the committees will

formulate hearing schedules to begin the vetting process on the thousands of bills filed for the 2015-2016 legislative session.

Patrick: Merry Christmas, Charlie

One item requiring the immediate attention of the Baker-Polito team is the $765 million budget deficit left behind

by Governor Deval Patrick as his term ended. As you may recall in our previous writings, Governor Patrick acknowledged immediately after the November election that a budget deficit existed, in the range of $325 million. His estimate, however, was met with skepticism as budget experts pegged it in excess of $600 million, some saying it was closer to $1 billion.

As certain legislators and constituency groups cry out for tax increases to keep feeding the government beast, Governor Baker maintains that the Commonwealth has a spending problem and not a revenue problem.

As this saga plays out, legislators and taxpayers are anxiously awaiting the details of the Baker-Polito plan to address the Patrick deficit. This crisis has the potential of overwhelming Baker’s own agenda as he also begins to formulate his first budget, for fiscal year 2016, which must be filed by March 4.

Form 8300 Letters – Due 1/31/15

The IRS requires any person who receives more than $10,000 in cash in a single transaction or a series of related transactions while conducting his or her trade to file a Form 8300 with the agency.

A business must file the Form 8300 to report cash paid to it if the cash payment is: • Over $10,000; • Received as: • One lump sum of over $10,000, or • Two or more related payments that total in excess of $10,000, or • Payments received as part of a single transaction (or two or more related www.msada.org

transactions) that cause the total cash received within a 12-month period to total more than $10,000.

• Received in the course of trade or business; • Received from the same buyer (or agent); and • Received in a single transaction or in two or more related transactions.

Under the IRS rules, a business must notify its customers, in writing, by January 31 of the subsequent calendar year that the business has filed a Form 8300 regarding the cash transaction with the customer. (If a letter was sent to the customer at the time of the transaction and the filing of the Form 8300, a second letter is not required.) Neither the code nor the regulations mandate a specific format for the customer letter; the regulations, however, do require the following minimum requirements in the letter: • The name and address of the dealership and a contact person there submitting the Form 8300; • The aggregate amount of reportable cash, received by the dealership filing the Form 8300 during the calendar year, in all related cash transactions; • A statement that the information contained in the letter is being reported to the IRS. As an alternative to filing the paper Form 8300, businesses may file electronically the Form 8300 using FinCEN’s Bank Secrecy Act (BSA) Electronic Filing System. E-filing can be done at no charge, and it is a quick and secure way for individuals to file their Form 8300s.

Filers receive an electronic acknowledgement of each submission. To receive more information, visit the BSA E-Filing System at http://bsaefiling.fincen.treas.gov/ main.html.

Additional information regarding the Form 8300 requirements is available at these IRS links: • http://www.irs.gov/Businesses SmallBusinesses-&-Self-Employed/ R e p o r t - o f - C a s h - P a y m e n t s - O v e r-

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The Roundup 10000-Received-in-a-Trade-or-BusinessMotor-Vehicle-Dealership-QAs • http://www.irs.gov/pub/irs-pdf/f8300.pdf

Storm Closures – Pay Rules

Here in New England at least once a year we can expect weather conditions to affect your business operations, just as we saw with the recent winter storm Juno. Regardless of the cause for your store shutdown, dealers need to be aware of certain pay rules that apply regarding how you handle the situation.

Reporting Pay Rule. You need to be aware of how to handle employee compensation in situations ranging from you open for the day and then must close as your power goes down, for example, or due to occurrences prior to opening you never do open for the day.

Under the state’s Reporting Pay Rule (found in the state regulations at 455 CMR 2.03), if an employee is scheduled or requested to report to work on a regularly scheduled workday, reports to work but is sent home because of a lack of work, the employer must pay the employee for at least three hours at the Massachusetts minimum wage of $9.00 per hour. This regulation has been interpreted previously as requiring the payment only when the employee has reported to work on a scheduled workday expecting to work more than three hours and is sent home. Conversely, for an employee who is called in to work on his or her off day and is then sent home before working three hours need only be paid for the time actually worked, unless the employee was told that he or she would be working more than three hours.

More recently, the Massachusetts Division of Occupational Safety has clarified how the Reporting Pay requirement applies to employees scheduled to work less than three hours. If an employee is, in good faith, scheduled for less than three hours, the employer may pay the employee for only the hours worked. For example, if an employee is scheduled for a two-hour meeting and the employee JANUARY 2015

MSADA

works two hours, the “three hour rule” is inapplicable, and the employer must pay the employee for only the hours worked.

Further, dealers also must be aware of how they handle closures due to weather conditions in the dealership’s employee handbook. If you provide employees paid days off in such instances, then your payroll for the week must be consistent with those policies.

For managers, the situation is different. You cannot limit the compensation for them on such a shortened or no-work day. Managers must be paid for the day, whether you assign them work or not.

Phone Tree. In a situation where you know you will not be able to open for the day, you can avoid having employees show up by establishing a phone tree to inform them of the emergency closure of the dealership. This can be used to effectively control compensation costs during such an emergency.

Bottom Line: If you anticipate being closed on a regular work day, inform your employees ahead of time. Otherwise, you will need to comply with the state’s reporting pay rules.

No Guaranteed Workweek: Some employees believe that if they are ready and willing to work, the employer is obligated to allow them to work their regular schedule or to pay them for the hours they missed due to the closure of the business.

This is not true under Massachusetts or federal law. An employer is not required to provide a set number of hours of work each week and, with the exception of “reporting pay” discussed above, is not obligated to pay an employee except for hours actually worked by the employee.

2015 Dues Invoices

Earlier this month your Association sent out 2015 dues invoices to all our dealership and associate members. Our members’ dues help fund the Association’s activities on their behalf, including our lobbying on Beacon Hill and in Washington, our member counsel services, and our education and training ac-

Massachusetts Auto Dealer www.msada.org

tivities.

Over the last several years we have witnessed quite a bit of economic disruption in our industry. More than ever, our dealers need a strong MSADA. MSADA will continue to lead on the various issues that threaten the viability of our dealerships. We will strive tirelessly to keep you informed of developments in our industry and how they will play out in Massachusetts. These efforts also include working closely with NADA to better serve our members.

Our strength lies in our members.

With your continued support and membership renewal, we can build on our current foundation and begin to enhance your Association’s core purposes of communication, advocacy, and education.

Save the Date: Annual Meeting – May 1, Boston

Your Association will conduct this year’s Annual Meeting on Friday, May 1, at the Mandarin Oriental Hotel in Boston.

We are lining up a number of exciting industry speakers for the day. Be on the lookout for our invitation and registration materials.

MSADA-Reynolds Forms Rollout

For five years we have operated our forms sales program in partnership with Reynolds & Reynolds. For the past year we internally have been working with Reynolds on an improved menu of forms, including updating the forms needed by our dealers to properly conduct business in Massachusetts and full vetting by MSADA and Reynolds attorneys.

We are now in the process of rolling out the increased menu of forms, and we encourage our members to take full advantage of the improvements we have made. Check out the ad in this month’s magazine and contact your Reynolds rep today to obtain the full complement of forms your dealership may need. t

MSADA

www.msada.org

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Troubleshooting

MSADA

Recall Reimbursement

By Peter Brennan, Esq.

Staff Attorney, MSADA Over the past year, recalls have been a popular topic in industry publications as well as the national media, and it is with good reason that 2014 will likely go down as the year of the recall. How 2015 will fare remains to be seen, but with factories still working to remedy existing issues and discovering new problems, it is likely that 2015 will be just as busy for dealers.

Despite all of the press attention dedicated to the subject, many dealers are still unaware of the finer points of recall law.

As detailed in the August 2014 issue of Auto Dealer magazine, as well as several other Association writings, Massachusetts dealers are handling the consequences of safety recalls at a higher rate than ever before. Nearly 44 million vehicles were recalled in the U.S. in 2014, according to the National Highway Traffic Safety Administration. While millions of vehicles become subject to NHSTA safety recalls each year, a relatively small percentage of these recalls involve “stop operation” or “stop sale” notices on new vehicles. However, as the overall number of recalls increases, dealers are coping with an increased amount of grounded new vehicle inventory.

In August 2014, NADA released a comprehensive update on recalls from the dealer perspective: Safety Recalls: a Q&A for Franchised Dealers, which is available to NADA members at the following link: http://www.nada.org/regulatory_affairs/subject/safety/safety_reJANUARY 2015

call_QA.htm.

By now, most dealers are familiar with the broad points of recall law, and understand which cars can be sold, which cars must be grounded, what steps to take when receiving a recall notice, etc.

However, in speaking with our dealer members, it is clear that many are unaware that there is a provision in the federal law that requires the manufacturer to reimburse the dealer when a vehicle is subject to a safety recall.

Under the National Traffic and Motor Vehicle Safety Act, manufacturers must both reimburse dealers for the cost of remedying recalls and provide additional compensation of at least one percent per month of the manufacturer’s (or distributor’s) selling price, prorated from the date of a recall notice until the date a motor vehicle recall is remedied. See 49 U.S. Code § 30116(b): “If the distributor or dealer installs the part or equipment with reasonable diligence after it is received, the manufacturer shall reimburse the distributor or dealer for the reasonable value of the installation and a reasonable reimbursement of at least one percent a month of the manufacturer’s or distributor’s selling price prorated from the date of notice of noncompliance or defect to the date the motor vehicle complies with applicable motor vehicle safety standards prescribed under this chapter or the defect is corrected.”

Too frequently, manufacturers are willfully ignorant of the requirement to reimburse dealers for new inventory that cannot be sold while it awaits a recallmandated fix. The dealer is then stuck with the accrued floorplan interest on a vehicle it cannot sell. Some manufacturers provide the payments, but do so under the guise of financial assistance, when they are in fact required by law.

Dealers should perform a comprehensive review of all grounded new vehicles in inventory to ensure that they

Massachusetts Auto Dealer www.msada.org

have been reimbursed by the manufacturer for one percent of the vehicle cost during the period that the vehicle could not be sold.

After evaluating grounded inventory, dealers should review all recall-related communications from the manufacturer.

Often times, recall notification letters detail the reimbursement process. If no process is in place, the dealer should request the reimbursement in writing and cite the relevant statute provided above.

After exhausting these remedies, if you feel that your manufacturer is shortchanging you on its obligations under the law, the statute grants dealers a right to sue in federal court “to recover damages, court costs, and reasonable attorney’s fees”.

For those that are having trouble keeping up with all of the recalls, visit www.safercar.gov to use NHTSA’s VIN-searchable safety recall data base.

NHTSA also issued a list of available manufacturers and details on the capability and functionality of the data base, which is mandated by the Moving Ahead for Progress in the 21st Century Act, the transportation bill enacted in July 2012.

Your Association, as well as NADA, are very interested in monitoring manufacturer compliance with the law. Please contact us if you feel that your manufacturer is not in compliance with the reimbursement provisions detailed above.

Additionally, questions concerning federal safety recalls may be directed to NADA Regulatory Affairs at regulatoryaffairs@nada.org or 703-821-7040. t If you require any additional information on dealer data security regulations, service provider agreements, or any other issue, please contact Robert O’Koniewski, MSADA Executive Vice President, rokoniewski@msada.org, or Peter Brennan, MSADA Staff Attorney, pbrennan@msada.org, or by phone at (617) 451-1051.

MSADA

Legal

By Joseph W. Ambash and Jeffrey A. Fritz

New Massachusetts Parental Leave Law Extends Protections To Male Employees Just before leaving office, Governor Patrick signed a bill into law establishing parental leave in Massachusetts for both female and male employees.

Effective April 7, 2015, the new law will replace the Massachusetts Maternity Leave Act (MLA), which provides female employees with eight weeks of job-protected maternity leave for the birth or adoption of a child. Extending parental leave to male employees, the new law will require significant policy changes for Massachusetts dealers with less than 50 employees, as they are not already covered by the Family and Medical Leave Act (FMLA), which applies to both male and female employees. Even dealers who are covered by FMLA should be aware of this new law, since an employee who has exhausted FMLA leave for a non-parenting reason is still entitled to take advantage of the new Parental Leave Act. The Massachusetts Maternity Leave Act. The MLA currently provides that a female employee is eligible for up to eight weeks of job-protected leave (either paid or unpaid, at the employer’s discretion) if she (1) has completed her initial probationary period with her employer or, if none, has been employed for at least three consecutive months and (2) has given at least two weeks’ notice to her employer of her anticipated departure and return dates.

Under the MLA, a female employee can take such leave for the purpose of (1) giving birth, (2) adopting a child under the age of eighteen, or (3) for adopting a child under the age of twenty-three, if the child is mentally or physically disabled. At the expiration of such leave, the employer must restore the employee to her previous job or one of the same or similar status, pay, length of service credit, and seniority, unless she would have been (and others of the same status were) laid off in the interim.

An employee retains the benefits (i.e., vacation time, sick leave, insurance, etc.) to which she was entitled on the date she went on MLA leave. However, unless the employer treats other employees on leave differently, she does not continue to accrue such benefits while on leave, and may be required to pay the full cost of such benefits during the leave.

While the MLA, by its terms, applies only to female employees, the Massachusetts Commission Against Discrimination (MCAD) and the U.S. Equal Employment Opportunities Commission (EEOC) have long-advised employers to provide such leave to all members of their workforce to avoid the risk of a disparate treatment sex discrimination claim.

New Massachusetts Law Broadens The MLA’s Scope And Loosens Its Requirements.

The new Parental Leave Law brings Massachusetts’ “maternity leave” law in line with the MCAD’s and EEOC’s guidance. It provides that all eligible employees, regardless of sex, are entitled to up to eight weeks of parental leave, and must be reinstated to the same or similar position s/he held before such leave.

The new law also expands and broadens the MLA in several respects. First, under the new law, if an employer agrees to provide an employee with more than eight weeks of parental leave, the employer cannot deny the employee rights under the law unless the employer (1) clearly informs the employee in writing that taking longer than eight weeks of parental leave will result in a denial of reinstatement or loss of other rights and benefits, and (2) does so both prior to the beginning of the parental leave and again prior to extension of that leave. If an employer fails to take these steps but agrees to extend an employee’s parental leave beyond eight weeks, the entire period of leave will be www.msada.org

job-protected.

Furthermore, the new parental leave law provides: (1) in addition to the three purposes described above, an employee may take parental leave for the purpose of dealing with a child placed with him/ her pursuant to a court order; (2) any two employees of the same employer shall only be entitled to a total of eight weeks of parental leave; (3) all employees are eligible for parental leave after three consecutive months of employment, regardless of whether an employer’s “probationary period” is longer; and (4) employees need only provide notice of the need for parental leave “as soon as practicable if the delay is for reasons beyond the individual’s control,” rather than at least two weeks before the leave.

What Should Massachusetts Dealers Do? To prepare for the April 7 effective date, you should review and revise your leave policies to be consistent with the new parental leave law. If you would like a model policy, feel free to contact us. Most importantly, you should ensure that your managers are aware of the new parental leave law, and provide parental leave in accordance with it. t

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

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AUTO OUTLOOK

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Insurance

MSADA

Under What Situations Can My Employees Sue Me for an Injury?

By Eric Schmitz Eric is Vice President of Product and Business Development at KPA. Eric works with KPA’s larger clients and partners to develop new solutions that help to reduce risk and minimize losses. of emerging tions

Eric

OSHA, EPA,

By

staying on top

and

DOT

regula-

helps automotive service facili-

ties avoid fines and minimize the impact of lawsuits.

Workers’ Compensation Insurance was designed to ensure adequate employee reimbursement if an employee is injured on the job and to minimize lawsuits between employers and employees in the workplace. This mandatory insurance provides for employees who suffer jobrelated injuries and illnesses.

In general, any employee with a job-related injury or illness can receive Workers’ Compensation benefits, regardless of who was at fault. When working properly, this system prevents an employee from further suing an employer for work related injury.

There are some circumstances, however, when the employer can still be sued for damages of injuries, and that is when the employer caused the injury or illness through a reckless or intentional act. To avoid injury or illness to yourself or an employee, it is important to follow OSHA regulations as well as to understand what a reckless or intentional act is. Let’s look at two scenarios to find out:

Scenario #1:

While an employee is working under a vehicle, some metal particles fall in his eye. Although the manager had performed a Personal Protective Equipment (PPE) assessment and provided safety glasses, the employee wasn’t wearing them. Despite precautions by manageJANUARY 2015

ment, the employee was still injured.

This is the perfect example of where the Workers’ Compensation system is effective; the manager had made a solid effort to comply with the regulations and to protect the employee. A PPE Assessment and training were conducted, and appropriate safety equipment to prevent injury had been provided. In this case the employer was not reckless and did not intentionally cause injury to the employee.

The employer should not be held liable for the employee’s injury – other than to rely upon their Workers’ Compensation Insurance to fairly compensate the employee for his injury.

Scenario #2:

While an employee is working in the service area, he is regularly exposed to a 55 gallon drum of solvent. After some use of this chemical, the employee approaches his manager and complains about shortness of breath and states that he would prefer to use a different solvent.

The manager explains that this is the most economical solvent and that using it is “part of the job and that everyone else uses it.”

Over time the employee develops sensitization to the chemical and complains of numbness and pain. The employee ends up taking Workers’ Compensation leave, and, after three weeks, returns to work. The employer still does not remediate the hazard. Even worse, the drum of solvent is re-located to the employees work area where his exposure is increased. The employee begins to experience additional symptoms just working around the solvent. He approaches the manager again but is once again ignored.

The employee eventually ends up taking Workers’ Compensation leave. This time, the doctor says he has permanent nerve damage and the employee calls a lawyer.

Massachusetts Auto Dealer www.msada.org

The lawyer initially notes that this case is a Workers’ Compensation claim, but when the employee states that he reported the solvent repeatedly, asking for an alternative chemical to use or some other form of accommodation, his manager denied him. In this particular scenario, because the manager had been informed of the illness occurring but chose to ignore it, the dealership may be exposed to additional liability. The manager’s decision to ignore the employee’s complaints and continue to place the employee in harm’s way may allow a lawyer to get around the Workers’ Compensation system, which means that the dealership could wind up in court, negating the benefits of the Workers’ Compensation system.

As you can see from the above scenarios, Workers’ Compensation is in place to protect employers, while still compensating injured or ill employees. However, it is not a fool-proof system, and it can be circumvented in the event of employer neglect. Do you have further questions about Workers’ Compensation? Contact your KPA Risk Management Consultant or email rstansbury@kpaonline.com.

t About KPA KPA is a business services provider for more than 5,100 automotive, truck and equipment dealerships, and service companies. KPA provides Environmental Health and Safety (EHS) and Human Resource (HR) Management software and consulting services. KPA’s solutions have been embraced by leading auto dealers, including eight of the 10 largest dealer groups in the United States, and endorsed by 26 dealer associations from around the country. KPA joined the Inc. 500/5000 list of fastest growing companies in 2012. To learn more, visit www. kpaonline.com or call 866.356.1735.

Dealer Ser vices

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Play Yourself

What a Less-Than-Well-Known Jazz Musician from the 1960’s Can Help Us Better Understand about Selling Cars in Today’s Competitive Market

Dale Boch

Management Developers Inc (MDI) Dealership Strategic Planning – 25 years in helping dealerships build great teams, be more productive, increase market share and improve profitability.

Todd Friedman

Altura Digital Solutions - Digital Strategies for Today’s Competitive Market – bringing dealerships to the forefront of digital marketing, social media and reputation enhancement.

In a time of Ellington and Coltrane there was a little known jazz musician named Charles Mingus. Mingus had a very different approach to jazz compared to his other, better known colleagues. Mingus never felt that his music was too tough to learn. So, once players knew their instrument well enough and found themselves in Mingus’s music, Mingus used to shout out to his musicians, “PLAY YOURSELF!” Mingus believed every musician had their own voice, and he wanted each of them to find it within the musician’s own music. Today, the customer buying process has changed. To compete, your dealership needs to find its voice. This is cultivated within your niche and through your own unique competence, and it has

the potential to create a marketing differentiation for you in the market place. This means a very powerful force in creating new leads. The challenge is you’re likely out of sync and still using the old school ways today. You need to understand the prospect on their terms, not have them understand you on your terms. This is how a dealership not only engages more effectively with the prospect, but also has a good marketing strategy to tap into.

“Everyone is shopping and everyone is looking for a price, but it is so hard to pin them down to buy.” That is the manager’s mantra in today’s market place. What is this big disconnect today? We are missing how to effectively sell these shoppers and price grinders. In this regard, things have not changed; there have always been the shoppers and the price grinders.

What has changed is what NEEDS to be done to turn more of them into buyers. The dynamics of the shopper today is a long research process with a quick decision involving one or two dealerships.

Selling people has become obsolete.

Dealing with their issues is what is necessary today. And the way to deal with their issues is to properly engage with that prospect. That is, getting on board with them, not trying to get them on board with you.

Fundamentally, it’s an understanding of why the prospect is in the market and what are they trying to accomplish.

What we need to be saying is, “Let me jump on the buying process with you and

help you figure out all of these issues you are dealing with. I have good experience in this area and I can assist you rather than try to force you to do it my way.”

Unless you’re engaging with the prospect correctly, you’re missing a lot of prospects that were exposed to you. In most cases you gave them information when they weren’t ready to buy at that time but will buy when they are ready.

It’s a question of being there for them or being lucky enough to encounter them when they are ready. And you know you can’t always count on luck. Engagement is the key.

Understanding where the prospects are in the buying process and assisting them in that process is where you can make great strides in this business today. This is engagement! This is finding your voice!

Making those strides is what’s going to differentiate you in the market place. Your unique voice means more market share.

Let’s do it their way! This will make the prospects far more comfortable and feel good about the decision they need to make. You will be more realistic with the customer and be working with them on their issues and terms. This has proven to drive many more prospects to a dealership. In this way, you are letting go of the old school methods of selling. Now you are being true to your prospects and true to yourself. Thus, as Mr. Mingus put it, you are “Playing Yourself.”

Today, the customer buying process has changed. To compete, your dealership needs to find its voice.

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2015 MSADA Dealer Summit Joe Ambash, managing partner at Fisher and Phillips LLP, reviewed a lengthy list of new regulations for 2015 that will affect dealers.

“Typically at the beginning of the year we don’t have a list so long,” he said, noting the list might give the dealers in the room a “wake up call.”

New laws about sick leave, parental leave, domestic violence leave and more were covered in depth, with suggestions for how dealers can work with HR and management to comply with regulations.

Joe Ambash Fisher and Phillips LLP

Robert O’Koniewski

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Massachusetts Auto Dealer www.msada.org

Let It

MSADA

Ride Scott Dube MSADA President Scott Dube, who will serve another term at the organization’s helm, encouraged the dealers in the room to be vocal about how politics affects the industry.

“We spend a tremendous amount of time at the association to defend our industry as a vehicle of the economy,” he said. “We need to spend the time to educate politicians and our own employee groups about how regulations affect our industry.”

Dube recognized that the event is about supporting the Massachusetts State Auto Dealers Charitable Foundation’s tech scholarships that bring talent into showrooms.

Robert Champagne Ethos Group Compliance Solutions

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2015 MSADA Dealer Summit

Jim Ziegler

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Keynote speaker Jim Ziegler, an industry leader, columnist and celebrity speaker in the U.S. auto industry, shared important observations and advice for industry success, with a heavy dose of warning to dealers.

“The battle of Armageddon is on right now.Your very existence as a dealer is in peril,” Ziegler said. “There are forces out there trying to dismantle the idea of retail dealerships. There are entities out there who want to turn you into warehouses.”

Ziegler said dealerships are vulnerable to data access and have a lot to learn about online marketing. Discussing third-party vendors, Ziegler expressed disappointment with dealer stereotyping by industry partners.

“Dealers are good – they’re important in the community. But they’re portrayed as sneaky. They’re using stereotypes from 40 years ago,” Ziegler said.

Besides digital marketing and data security, Ziegler offered valuable marketing tips for various media, including radio and TV. “More business happens after the 15th of the month,” he said. “I fish when the fish are biting.”

Massachusetts Auto Dealer www.msada.org

Tom Trudell

American Fidelity

Ken Leeser

Taino Consulting Grou

up

MSADA

Mike DeCarlo DealerDOCX

Mark Babcock Metal Wave

Cynthia Larose Mintz Levin

Cynthia Larose is Chair of Mintz Levin’s Privacy & Security Practice and a Certified Information Privacy Professional (CIPP). She represents companies in information, communications, and technology, including e-commerce and other electronic transactions.

Larose shared tips on the intricacies of internet security. She said if dealer employees are accessing work-related data from outside the workplace, managers should know. “You all have online presences now,” she said.

Managers should talk to employees about privacy and security, and not just to benefit in their workplace.

“Learning about privacy in the workplace can help them in their personal life too.” www.msada.org

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2015 MSADA Casino Night

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MSADA

A DA

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2015 New England International Auto Show

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MSADA

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NEWS

from Around the Horn

FRANKLIN

Ford Dealership Installs Solar Roof Massachusetts-based Solect Energy Development has installed a 142.5 kW rooftop solar energy system at Franklin Ford.

Franklin Ford recently renovated its showroom and service bay, which included replacement of about half of its roof area. The dealership made a decision to incorporate solar energy, LED lighting, and other energy-efficiency measures into the facilities refit.

The rooftop system is expected to cover nearly 100 percent of the dealership’s electricity needs, generating more than $30,000 in annual electricity savings.

“Given its location and rooftop, Franklin Ford had a textbook site for solar,” says Steve Bianchi, business development partner at Solect Energy Development, which is an MSADA associate member.

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Massachusetts Auto Dealer www.msada.org

NEWS from Around the Horn

MSADA

PEABODY

Lyon-Waugh Auto Group Reaches $1.5 Million in AllTime Donations The Lyon-Waugh family of luxury auto dealerships reached the milestone of $1.5 million in all-time donations in December. With commitments to a variety of nonprofits, including local shelters, Toys for Tots and Boston Children’s Hospital, Lyon-Waugh has contributed more than $115,000 to charity in 2014 alone.

The list of nonprofit and community organizations that have benefited from Lyon-Waugh’s 21 years of support and generosity is long and diverse, ranging from local schools to the Alzheimer’s Association to the girl-empowerment group, Girls Inc. Lyon-Waugh co-founders Bud Lyon, Bill Currie, and Warren Waugh donated more than $100,000 to the construction of the Torigian Family YMCA in Peabody, while the auto group’s first dealership, BMW of Peabody, has raised more than $300,000 for the Susan G. Komen breast-cancer organization during 11 years of the annual Ultimate Drive Campaign.

In recent years, Lyon-Waugh has also directed another $100,000 toward computers and other technology for the City of Peabody school district.

“If you don’t outreach and engage with the community where your business is based, then you will never truly understand your customers and you’ll miss out on the opportunity to strengthen the well-being of your neighbors,” said Warren Waugh. “The Lyon-Waugh Auto Group has been very fortunate during our more than two decades of existence, and because of that, we consider giving back to those in need an essential responsibility.”

SOUTHBOROUGH

Coast 2 Coast Auto Group Buys Farrell Volvo Nancy Phillips Associates recently announced the sale of Farrell Volvo in Southborough. The buyer, Coast 2 Coast Auto Group, was founded by Steve Chernysh and Alexi Nusinov of Moscow, Russia. Nusinov owned one of the top ten Russian dealership groups, and Chernysh has served as CEO and partner of several automotive holding companies there. The two have enjoyed a long history of success with Volvo in Russia and had specifically targeted the Volvo franchise as their entry into this market. This transaction represents the companies’ first continued on next page www.msada.org

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NEWS from Around the Horn IN MEMORIAM

Quinlan Sullivan Quinlan J. Sullivan III, 51, passed away on January 7.

Originally from Arlington, Sullivan graduated Arlington Catholic High School in 1981 and received his B.A. from Suffolk University. He then went on to become dealer principal of Sullivan Brothers Auto Mall in Kingston, where he built a very successful business which originated in 1986.

Quinlan is survived by his wife, Susan (Shamma) Sullivan of Kingston, and his children Caitlin, Quinlan, Holly, and Logan, his mother Mary (Devereaux) and his siblings Julie McIsaac and her husband Andrew of Falmouth, John Sullivan of Duxbury, and the late Brian Sullivan and his wife Lisa Sullivan of Kingston.

Stephen L. Gervais, Sr. Stephen L. Gervais, 77, of Lowell, a well-known Greater Lowell businessman and president of Gervais Ford in Ayer, died January 15 at his home with his family by his side.

He was the husband of Maureen R. (Reardon) Gervais, who survives him, and with whom he recently celebrated their 48th wedding anniversary on August 13, 2014.

Born in Lowell in 1937, the son of the late John J. Gervais, Sr. and the late Margaret Gervais, he attended the Immaculate Conception School and was a graduate of Lowell High School in the Class of 1955. He then went on to attend Lowell Commercial College, and proudly served his country in the 187th Army Reserve Unit Infantry.

Steve started an automobile business with his brothers in 1961 following his military service, and sold many differ-

from previous page acquisition in the United States.

The new dealership, Volvo of Southborough, will be managed by operating partners CFO Matt Kenkel and General Manager David House. House brings to the dealership excellent credentials from the nation’s top dealer groups, and Kenkel is an expert finance professional with background in business resructuring and mergers and acquisitions.

The buyers became involved in the interim management of the dealership while undergoing the franchise approval process, which was plagued by new federal regulations in the banking industry regarding international investment as well as the severe decline of the ruble.

Both the sale of the dealership and real estate closed just before year end, and the new owners are looking forward to a successful launch of their foray stateside.

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Massachusetts Auto Dealer www.msada.org

ent brands in Ayer, Billerica and Lowell. For most of his career he served as President of Gervais Ford in Ayer and had worked in the automobile industry for over 53 years.

A lifelong communicant of the Immaculate Conception Church in Lowell, he was active with his parish, having served on the Immaculate Conception Finance Committee and was a Past Chairman and current member of the ICS Golf Tournament Committee.

Among his many activities and accomplishments, he was past President of the Ayer, Harvard and Shirley Rotary Club, the Nashoba Valley Chamber of Commerce, and was a board member of Nashoba Deaconess Hospital. He was also a former board member of the North Middlesex Savings Bank, the New England Ford Dealers Council, the Devens Enterprise Commission and AUSA (Association of the U.S. Army). He was a former member of the Board of Trustees of Saints Medical Center.

A humble and private supporter of his church and his community, Steve never sought recognition for his efforts, but was nonetheless honored with the first ever Immaculate Conception Distinguished Alumni Award, the Lowell Catholic High School Bishop McNamara Award, the Archdiocese of Boston Cheverus Award and several other accolades from the Nashoba Valley Chamber of Commerce.

In addition to his wife Maureen, Mr. Gervais is survived by three sons Stephen L. Gervais, Jr. and his wife Alison (Fisher) of Lowell, Michael D. Gervais and his wife Samantha (Andersen) of Ayer, and John F. Gervais and his wife Jennifer (Brennan) of Groton; six grandchildren, two step-grandchildren, and many other relatives.

BURLINGTON

Mall Shoppers Surprised with Car Switch A few Burlington Mall shoppers were surprised late last month when they went to get their cars from the valet and up drove a 2015 Mercedes. Mercedes-Benz of Burlington and Lisa from Kiss 108 secretly swapped out the customers’ old cars for the new Mercedes.

The shoppers were chosen at random and given the brand new cars -- only temporarily. Their old cars were taken by the dealership to be cleaned and detailed for free.

Mercedes-Benz of Burlington, which is opening a dealership in early February, plans to roll out this surprise to more unsuspecting drivers in various Burlington-area locations until the new store opens.

MSADA BRAINTREE

state of the art facility.”

The new dealership is expected to be a $5-10 million development, which would bring in revenue and construction and retail jobs to the town.

Braintree Town Council Gives Roads to Quirk Enterprises Two roads near the Braintree shipyard will be removed from town control and given to Quirk Enterprises for redevelopment.

The Braintree Town Council voted in January to discontinue Cliff and Lancaster Roads, handing the responsibility of the roads to Quirk.

The change gives control of the area to the car dealership, who is the only abutter on the two roads. Both roadways do not provide public access and only go to properties owned by Quirk Enterprises.

“This part of Braintree has needed a lot of work,” Councilor Charles Ryan said at the meeting. “It was a blight in the neighborhood and just the fact we’ve been able to clean it up, I want to say thanks to Mr. Quirk. You have to think hard when you’re going to discontinue a road, but I think in this case it’s the right thing so we can improve the town of Braintree and see a new

SOMERVILLE

Ernie Boch Shutters Football Team The Boston Militia, the Somerville-based women’s football team, has been shut down. Owner Ernie Boch Jr. announced the news early in January on the team’s website.

“It is with heavy heart that I announce the discontinuation of the Boston Militia,” he wrote. “The limited numbers of teams in the Northeast has resulted in a reduced schedule over the last few years, causing the professional level of competition to decline.”

In their seven seasons, the Militia went an impressive 67-6 and won three national championships, including the Women’s Football Alliance title last year.

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SPRINGFIELD

Casino Company Purchases Former Cadillac Dealership Site MGM Springfield has purchased the former Orr Cadillac dealership location from the Orr family for $2.3 million, according to The Springfield Republican.

The Orr site will house the Springfield Rescue Mission, which must move from its current location at 19 Bliss Street to make way for MGM Springfield’s $800 million casino project. MGM is giving the Rescue Mission the Mill Street property in exchange for the Bliss Street site.

“The priority is to stay in the South End because the need is there,” said Ron Willoughby, executive director of the Rescue Mission. “We also have relationships in the neighborhood, and we want to keep those relationships.”

He doesn’t have a timeline for the move yet. The project does need a change in zoning from business to a zoning classification allowing the Rescue Mission to lodge people on the property.

MGM spokeswoman Colleen McGlynn said the casino will also pay to renovate the dealership to fit the mission’s needs. She didn’t know how much that will cost.

The 26,789-square-foot Orr dealership building sits on 3.2

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Massachusetts Auto Dealer www.msada.org

acres. The Orr family listed the property for sale at $2.5 million in 2010.

NADA Update

by Don Sudbay

New-Car Dealers Are Catalysts for Change Don Sudbay, President of Sudbay Automotive Group, represents MSADA members on the NADA Board of Directors. He welcomes your

questions

and

concerns

(donsudbayjr@sudbay.com).

It was great to see many of you at the convention in San Francisco. The convention was a huge success for NADA with record attendance and a sold out exhibition floor. Take a minute to read our incoming Chairman Bill Fox’s address at the general session. Bill underlined the importance that all dealers have in keeping our nation’s economy growing. The franchised system has served our manufacturers and customers well, and sometimes we need to remind them of that.

Bill Fox: The roots of the retail-auto industry are innovation and value.

In his first keynote address as chairman of the National Automobile Dealers Association, Bill Fox delivered a message last month to critics of the franchised dealer network.

“The automotive franchise system is the best and most efficient method of bringing new vehicles to the driving public. The franchise system breeds competition that benefits consumers, manufacturers, and local communities alike.

“We sold more than 16.4 million new cars and light trucks in 2014. We saw total sales of more than $700 billion—more than 15 percent of all retail sales. We employ more than 1.2 million people in well-paying jobs averaging $53,000 per year that cannot be exported. That adds up to a $55 billion payroll. And we generate $13 billion in taxes.

“Dealers are fierce competitors that drive consumer costs down and ensure superior customer service. And we advocate for our customers on warranty and recall claims with manufacturers. For dealers, the return is a mere 2.2 percent on sales. Does that sound like we aren’t competitive? Not to me.

“It was dealers who survived wars, recessions, a depression, oil embargoes, and manufacturer bankruptcies. We survived all that because we are leaders—not followers—of change. This is the industry that changed everything. The reality is that dealers are catalysts for change.

“Franchise laws, which vary from state to state, have a common objective: They seek to level the playing field between dealers and the manufacturers—for the benefit of the citizens of those states.

“Franchise laws create price competition that saves consumers money. It’s a fact that if a consumer wants a Chevy, he or she benefits when two or more Chevy dealers compete

for their business.

“Dealers have adopted the Internet because we know we often make our first impressions digitally. We’ve adopted technology that includes our customers in the sales process more and more. We are innovative, and we offer the consumer what they want and need—value.”

Gov. Jeb Bush Slams CFPB’s ‘Unelected Bureaucrats’ Over Dealer-Assisted Financing Regulations The fate of the country rests on moving government out of the way of business so “the promise of fair and free opportunity returns to America,” former Florida Gov. Jeb Bush told a capacity crowd at the National Automobile Dealers Association Convention & Expo on January 23.

And while the audience of nearly 4,000 attendees responded favorably to Bush’s remarks, his discussion about recent legislation concerning the Consumer Finance Protection Bureau (CFPB) brought the most exuberant applause.

“Another great example sadly of this are the CFPB rules on dealer financing,” he said. “They went forward with the rule without notice, without a public hearing, not knowing whether it would work. The worst part is that unelected bureaucrats have more power than Congress in this particular case, [and Congress is] trying to repeal the rules—and I hope you continue to stay involved.”

Bush also cited NADA research that shows regulations add $3.2 billion in costs, which the auto industry must pass on to buyers. “The total equates to about $2,400 per dealership, per employee, per year,” he said. “Those costs to comply, those costs of regulation, could have gone for higher pay to allow people more disposable income or they could have gone to create more jobs.”

Bush spoke about reforming health care, revamping immigration, improving education, and the pace and uneven results of the nation’s economic recovery.

“The great stories that were told here today of successful dealerships, it’s harder to do that today, to do exactly what you all have done to achieve earned success. I know you know what I mean, because your industry has to deal with this,” he said.

The 2015 NADA convention ran from January 22-25 at the Moscone Center in San Francisco.

ATD Chairman: Trucking Keeps the Nation Moving Eric Jorgensen, chairman of the American Truck Dealers (ATD), urged dealers to become engaged in all levels of their industry’s wide-spread operations to move their businesses forward.

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NADA Update MSADA

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“We’re part of an industry that not only puts people behind a big wheel, but also propels the nation forward,” he said in remarks at the ATD Convention & Expo in San Francisco. “And our industry keeps the nation moving.”

Jorgensen, president and CEO of JX Enterprises in Hartland, Wisconsin, outlined four areas of a newly developed strategic plan to help guide the industry through 2015 and beyond – and he cited progress in each of the areas.

“Last year, I told you that the success of our business – and of our customers – depends on what happens in Washington, DC,” he said of the plan’s goal to engage legislators and regulators.

ATD worked to engage dealers in grass-roots efforts that brought them to Congress to be sure their representatives knew how regulations made in Washington, DC, affect their dealerships.

ATD has also successfully advocated for legislation that would retroactively increase the eligibility of expensing dealership business equipment to $500,000 and extending the 50 percent bonus depreciation deduction for new business equipment in 2014, he said.

“And we’ve included our partners in our efforts. ATD hosted policy roundtables with our OEMs and other industry representatives to share our concerns,” Jorgensen said.

He encouraged ATD members to fulfill another of the plan’s goals: to inform people about the truck industry.

America’s medium- and heavy-duty truck dealers provide equipment that moves more than 70 percent of all the freight tonnage annually in the United States, he said. The industry employs more than 8.7 million people nationwide.

Jorgensen encouraged local dealers to engage their communities in ways that would help citizens understand the trucking business.

“We’re all in this business together,” he said. “We all have a responsibility to move trucking forward.”

Scott McCandless of Colorado Named Truck Dealer of the Year Tears showed in the eyes of Scott McCandless and his wife, Melissa, of Aurora, Colorado, when he received a standing ovation for being named the 2015 Truck Dealer of the Year at the 52nd annual American Truck Dealers Convention & Expo.

McCandless, who is president of McCandless Truck Center, was chosen from among six dealers nominated from across the country. The national award is sponsored by ATD, Heavy Duty Trucking magazine and Procede Software.

The four other nominees were Kevin G. Holmes, president and CEO of Tri State Truck Center Inc., Shrewsbury, Massachusetts; Robert A. Neitzke, president of GATR Truck Center, with multiple locations in Iowa and Minnesota; Kari J. Rihm, president and CEO of Rihm Kenworth,

JANUARY 2015

with multiple locations in Minnesota and Wisconsin; and James Sayre Jr., president of G.L. Sayre Inc., Conshohocken, Pennsylvania.

State, metro, and national association leaders selected the nominees for the annual award. They were evaluated on dealership performance, industry leadership, and civic contributions. A panel of professors from Indiana University’s Kelley School of Business chose the winner and finalist.

ADESA Auction Raises $40,000 for Veterans’ Canine Companions NADA Charitable Foundation donates an additional $20,000.

It was a winning team that raised $40,000 to train service dogs for the Wounded Veterans Initiative of the Canine Companions for Independence (CCI).

The event — where ADESA auctioned a 2012 HarleyDavidson Heritage motorcycle — was held on January 24 at the 98th annual National Automobile Dealers Association Convention & Expo in San Francisco.

The auction’s proceeds were added to two $10,000 grants from the National Automobile Dealers Charitable Foundation to CCI during the convention.

Kenworth Receives Truck of the Year Award The American Truck Dealers named the Kenworth T880 Vocational Truck with PACCAR MX-13 Engine as the 2015 Truck of the Year. The award was announced at the ATD Convention & Expo in San Francisco.

Judges selected the truck for its exceptional handling, power, torque, and outstanding visibility from all quarters of the driver’s seat.

Other finalists included the International WorkStar 7600 and the Peterbilt Model 567.

A panel of journalists selected the winners from several categories, including innovation, design, safety, and driver satisfaction.

The 52nd annual ATD event ran concurrently with the National Automobile Dealers Association Convention & Expo.

NADA Issues New Compliance Guide on Federal Advertising Rules The National Automobile Dealers Association recently issued a new publication that will assist new-car dealers in complying with federal advertising requirements on the sale, financing, and leasing of automotive products and services.

A Dealer Guide to Federal Advertising Requirements provides examples of “bad” ads and “good” ads and chapters on 41 different federal advertising topics, such as the use of discount claims, e-mail advertising, green marketing claims, Internet advertising, satisfaction guarantees, and trigger terms. Readers can access the content quickly

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MSADA NADA Update by clicking the hyperlinked topics in the table of contents page in the PDF document.

“The guide is user friendly and is a valuable resource for the entire auto industry,” said former NADA Chairman Forrest McConnell. “We are encouraging dealers to provide the publication to their advertising agencies, manufacturers, finance companies and others involved in advertising operations.”

The release of the guide coincides with recent intense scrutiny by the Federal Trade Commission of dealer compliance with federal advertising standards and follows an NADA University Online webinar on the topic that was presented last March by attorneys with the FTC’s Division of Financial Practices. (To access the webinar, NADA members can log in to NADA University Online at www. nadauniversity.com and enter the search term, “Comply with Federal Advertising Requirements.”)

Since 2012, the FTC has initiated five separate rounds of advertising enforcement actions against 18 dealers in 12 states for multiple types of advertising violations, including actions against three dealers that the FTC announced last December.

“The guide does not address additional advertising requirements that may be imposed at the state or local level, which vary considerably and need to be fully addressed when dealer ads are reviewed for legal compliance,” said Paul Metrey, NADA chief regulatory counsel. “It’s essential that dealers consult with their legal counsel to determine – and to ensure that their advertisements are consistent with – the full scope of their advertising responsibilities.”

The guide is part of NADA’s Management Series, Driven.

It is available at www.nada.org and will be included in the suite of compliance products at NADA University Online at www.nadauniversity.com.

New-Car Dealers Donate $50,000 to Food Bank in San Francisco To kick off the NADA Convention & Expo, executives from NADA and its charitable foundation toured the San Francisco-Marin Food Bank, presented a $50,000 gift and rolled up their sleeves for volunteer work.

“The generous donation from NADA shows its commitment not only to addressing hunger, but also to partnering with local organizations to make an impact,” said Paul Ash, executive director of the SF-Marin Food Bank. “We’re delighted to be the recipient of NADA’s philanthropy and will be able to generate more than 150,000 meals to feed the hungry of San Francisco and Marin.”

The city of San Francisco has hosted the NADA convention 16 times since 1949.

“San Francisco is, without a doubt, one of the most unique cities in the world. The landmarks are historic. The people are wonderful. And the food is incredible. But not everyone is fortunate to get enough to eat,” said former NADA Chair-

man Forrest McConnell. “You can’t really love a city unless you give back to it. NADA is privileged to support the food bank’s work toward hunger-free communities.”

NADA Academy Names Camron Wilson as Senior Consultant of OEM and Allied Educational Solutions NADA Academy has named Camron Wilson as Senior Consultant of OEM and Allied Educational Solutions -- a new position tasked with expanding collaboration with OEMs, allied industries and dealership staffs through online and instructor-led training.

Among Wilson’s key duties is to ensure existing OEM and allied customers receive the training that meets their individual needs, as well as to reach out to new prospects.

She will also continuously evaluate opportunities for Academy to adapt and enhance its programs based on customer feedback and changing market conditions.

Wilson brings nearly 15 years of relevant auto industry experience to her new NADA position, including 10 with Ford Motor Company, where she worked in the Sales, Service, Marketing, and Franchising departments. Her regional office covered more than 200 dealerships.

Most recently, Wilson worked for an automotive marketing company, which helped to hone her presentation skills and gave her an opportunity to interact with all auto manufacturers.

“As we expand our OEM and allied industry training programs, Camron is uniquely qualified to lead that effort, and we’re thrilled to have her onboard,” said Allen Phibbs, director of the Academy.

The expanded OEM and Allied Industry Training Program will include instructor-led training focused on such areas as: • Understanding Financial Statements • Parts Management • Service Management • New-Vehicle Sales Management • Used Vehicle Sales Management Supplemental online training is included in the following areas: • Dealer/Executive • Human Resources • Internet and Marketing • Sales • Service • Parts • Business Office and F&I • Body Shop • Legal and Regulatory To learn more about Academy programs, visit nada.org/ academy or email academy@nada.org.

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Produced by NADA’s Industry Analysis Group • Angela Lisulo, Economist

Review of New Light Vehicle Sales Overall

There were 1.5 million light-vehicle sales across the U.S. in December 2014, up 15.7 percent from November 2014 and up 10.7 percent from December 2013. In 2014, May and August were the months in the largest sales volume bracket with 1.6 million units each, while January held the lowest sales figure with 1.0 million.

Light-vehicle sales for 2014 amounted to 16.4 million units, up 5.8 percent from 2013, thus making 2014 the year with the highest sales since 2006 (2006 sales figure was 16.5 million). The Seasonally Adjusted Annual Rate (SAAR) for light-vehicle sales in December 2014 was 16.8 million.

In 2014, car sales held a market share of 46.8 percent with sales up 1.4 percent from 2013. The light-truck share was 53.2 percent with sales up 10.1 percent from last year.

For every month in 2014, the monthly share of sales held by light trucks was greater than that for cars; moreover, the gap between these two groups visibly increased from the middle of the year through December as the car share declined while the light-truck share increased towards the end of the year.

For Q4 2014, there were 4.1 million light-vehicle sales, up 7.2 percent from Q4 2013. Car sales for the quarter were up 2.9 percent from Q4 2013, while light-truck sales were up 10.9 percent from Q4 2013. In 2014, Q2 2014 held the largest quarterly sales volume with 4.4 million sales, while Q1 2014 held the lowest quarterly sales volume with 3.7 million sales.

See Figure 1.

monthly share between these two groups. Asia/Pacific-based companies held a share of 48.2 percent, while the companies based in North America held a share of 43.6 percent of light-vehicle sales.

In 2014, companies with a base in the Asia/Pacific region held the largest annual share of light-vehicle sales in the U.S. at 45.7 percent, which was up from a share of 45.4 percent in 2013. The corresponding share held by companies based in North America was 45.3, which is unchanged from 2013. The shareheld by Eu-

Companies/Brands

Companies with a base in North America (Detroit 3 and Tesla Motors) held the largest share of light-vehicle sales in December 2014 with 45.5 percent of the market. This was followed by companies based in the Asia/Pacific region with a share of 44.1 percent and then companies based in Europe with a share of 10.4 percent.

In 2014, the North America and Asia/Pacific categories alternated lead positions in terms of monthly share of light vehicle sales in the U.S. August was the month with the largest difference in JANUARY 2015

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rope-based companies was 9.0 percent, down from a share of 9.4 percent in 2013.

MSADA All company categories by geographic bases – North America, Asia/Pacific and Europe – experienced growth in light-vehicle sales in 2014 over 2013. The Asia/Pacific region was in the lead with 6.6 percent growth.

From the Detroit 3 companies, Fiat Chrysler experienced the most growth in light-vehicle sales in 2014 over 2013 at 16.0 percent, followed by General Motors at 5.3 percent. Ford had a contraction in sales over the same period.

From the group of Asia/Pacific-based companies, Isuzu experienced the most growth in 2014 over 2013 at 29.0 percent, followed by Mitsubishi at 24.8 percent.

From the group of Europe-based companies, Audi experienced the most growth in 2014 over 2013 at 15.2 percent, followed by Porsche at 11.1 percent.

For Q4 2014, companies based in North America held the largest share of light-vehicle sales at 45.3 percent, followed by companies based in the Asia/Pacific region with 44.5 percent, and then Europe-based companies with 10.2 percent.

All company categories experienced growth in light-vehicle sales in Q4 2014 over Q4 2013, with the companies based in North America holding the highest growth rate of 8.5 percent. See Figures 2, 3 and 4.

Segments

In 2014, the cross utility vehicle (CUV) segment held the largest share of light-vehicle sales at 26.9 percent, up from a share of 25.5 percent in 2013.

In the first few months of 2014, the monthly share of sales held by the CUV segment was on the decline until the middle of the year, after which there was a general trend upwards till the end of the year.

In terms of market share in 2014, the CUV segment was followed by the middle car segment and the small car segment, respectively, with the middle car segment holding 18.6 percent, down from a share of 19.5 percent in 2013, and the small car segment holding 18.5 percent, down from a share of 19.0 percent. The large car segment held the least share of light-vehicle sales for the year at 2.2 percent.

Within the CUV segment, the middle CUV sub-segment was the largest sub-segment, holding 64.3 percent of CUV light-vehicle sales in 2014. Within this sub-segment, the Honda CR-V was the lead vehicle by sales volume with 335,019 sales, and it was followed by the Ford Escape with 306,212 units sold for the year.

In 2014, all the segments, except the large car segment, www.msada.org

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experienced growth in sales from 2013. The sport utility vehicle (SUV) segment experienced the most growth since 2013 with a figure of 12.0 percent.

For Q4 2014, the CUV segment held the largest share of lightvehicle sales at 27.6 percent, followed by the middle car segment at 17.3 percent and the small car segment at 17.0 percent. The large car segment held the smallest share for the quarter with 2.0 percent of light-vehicle sales. See Figures 5 and 6.

Power source

In 2014, gasoline-powered light vehicles held the largest share of sales at 93.5 percent, which was up from a share of 93.3 percent in 2013. The market share held by diesel-powered light vehicles was 3.0 percent, up from a share of 2.9 percent in 2013.

The market shares held by electrics and plug-in hybrids each grew in 2014 over last year, while those for hybrids and vehicles powered by natural gas and fuel cell technology each declined over the same period.

In 2014, the monthly share of gasoline-powered light vehicles rose in the latter part of the year after it had trended downwards

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from the beginning of the year through August. The share of diesel-powered light vehicles was on a visible rise from the middle of the year through December. For the alternative power category, the monthly share trended upwards in the first few months of 2014 but then generally declined from the middle of the year through December.

For the alternative power category, in Q4 2014, the following light vehicles were sold: 19,992 electrics; one vehicle powered by fuel cell technology; 97,592 hybrids; 153 units powered by natural gas; and 11,263 plug-in hybrids.

This amounted to 129,001 light-vehicle sales. The Q4 2014 sales for the alternative power category were down 5.9 percent from Q4 2013. See Figure 7.

Models

In 2014, the leading light truck by sales volume was the Ford FSeries with 700,796 units, and the leading car by sales volume was the Toyota Camry with 428,606 units sold.

The year ended with three pickup trucks and two cars in the highest five ranks of the 15 best-selling light vehicles.

These pickup trucks were Detroit 3 models: Ford F-series, Chevrolet Silverado, and the Ram pickup. The two cars were models from companies based in the Asia/Pacific region: Toyota Camry and the Honda Accord.

From the list of the 15 best-selling light vehicles for 2014, eight out of 15 models were from the companies based in the Asia/Pacific region while the rest were Detroit 3 models. See Figure 8.

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