Massachusetts Auto Dealer August 2017 by Massachusetts State Automobile Dealers Association, Inc

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

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

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

The Drive Clean Connection

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August 2017 • Vol. 29 No. 8

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S ta f f D i r e c t o r y Robert O’Koniewski, Esq. Executive Vice President rokoniewski@msada.org Jean Fabrizio Director of Administration jfabrizio@msada.org Peter Brennan, Esq. Staff Attorney pbrennan@msada.org Jean Harris Administrative Assistant/ Membership Coordinator jharris@msada.org Auto Dealer MAgazine Robert O’Koniewski, Esq. Executive Editor Tom Nash Editorial Coordinator nashtc@gmail.com Subscriptions provided annually to Massachusetts member dealers. All address changes should be submitted to MSADA by e-mail: jbernal@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 21 Boston Herald 32 Ethos Group 2 Lynnway Auto Auction 23 O’Connor & Drew, P.C. 31 PreOwned Auto Logistics 26 Reynolds & Reynolds 28 Southern Auto Auction 20 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

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: Keeping an Eye on Washington ASSOCIATE MEMBER DIRECTORY THE ROUNDUP: Are You Taking Advantage of the MSADA Dealer Support Programs in 2017? legislative scorecard TROUBLESHOOTNG: First Amendment Blues LEGAL: Terminating Long-Term Employees with No Record of Discipline Can Be Risky AUTO OUTLOOK ACCOUNTING: Mid-Year Reality Check ADVERTISING: Bridging the Creative Gap from TV Commercials

to Pre-Roll Advertising

16 Cover Story: The Drive Clean Connection

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NEWS From Around the Horn nada Market Beat TRUCK CORNER: ATD and Trucking Industry Redefine the Dog Days of Summer nada update: Talking Stair-Steps

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Massachusetts Auto Dealer AUGUST 2017

From the President

MSADA

Keeping an Eye on Washington By Chris Connolly, MSADA President

Msada Board

As we see the leaves begin to hint at the impending Fall season, your Association and NADA are gearing up for the 2017 NADA Washington Conference, which will occur September 12-13 at the Washington Hilton. This is our annual show of strength to make sure our national representatives understand that we continue to struggle under the weight of ever changing regulations, and that the policies they pursue should be focused on making it easier to do business. Each year, it seems the same general principle of Free Enterprise is under attack. We cannot let the Administration change distract from what is happening in the legislative branch. There is so much we could say to each and every member of our Massachusetts delegation about any number of policies, from emissions regulations to safety recalls to taxation. So we keep our punch list short and stick with making sure our legislators understand that tax increases and regulatory changes may seem sensible while dreaming them up in their offices, but back on Main Street the small businesses that make up the fabric of those communities are being pushed to the limit. It may seem like too much of a slog at times, but we can never stop putting effort into making sure our representatives know who we are, what we do, and how vital our contribution is to their districts. Building these relationships means that it becomes more difficult to write-off our concerns. Instead, we are putting faces to names and doing the best we can to establish some level of trust. Our representatives may not see eye-to-eye with us on every issue, some may even have misconceptions about how our industry works, but the time put into establishing these relationships can really pay off when it counts. All of this work is done for the benefit of our member dealers, who are working tirelessly day in and day out to make their businesses succeed. Our members are putting food on the table for their families, and by extension are doing the same for as many as 50 men and women in their communities. They do not have time to make a trip down to Washington, and that is why we feel privileged to speak on your behalf. The majority of us are unable to fly down to Washington for two days out of the work week, but there are plenty of other chances to contribute. Our state and federal Political Action Committees are a great way to make a big impact, and so is writing or calling your representative to check in. There does not have to be some big issue at hand. Simply saying hello, and inviting your representative to come visit, will help immeasurably the next time a potentially difficult piece of legislation crosses their desk. For information about how to attend Washington Conference, please email rokoniewski@msada.org or visit https://www.nada.org/WashConf/. t

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Barnstable County

Brad Tracy, Tracy Volkswagen

Berkshire County

Brian Bedard, Bedard Brothers Auto Sales

Bristol County

Richard Mastria, Mastria Auto Group

Essex County

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

Franklin County

Jay Dillon, Dillon Chevrolet

Hampden County

Jeb Balise, Balise Auto Group

Hampshire County

Bryan Burke, Burke Chevrolet

Middlesex County

Chris Connolly, Jr., Herb Connolly Motors Frank Hanenberger, MetroWest Subaru

Norfolk County

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

Plymouth County

Christine Alicandro, Martyâ&#x20AC;&#x2122;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 Scott Dube, Bill Dube Hyundai

NADA Director

Don Sudbay, Jr., Sudbay Motors

Officers

President, Chris Connolly, Jr. Vice President, Charles Tufankjian Treasurer, Jack Madden, Jr. Clerk, Steve Sewell

Associate Members

MSADA A ssociate M ember D irectory ACV Auctions Will Morris (860) 670-7867 ADESA Jack Neshe (508) 626-7000 Albin, Randall & Bennett Barton D. Haag (207) 772-1981 American Fidelity Assurance Co. Dan Clements (616) 450-1871 American Tire Distributors Pamela LaFleur (774) 307-0707 Armatus Dealer Uplift Joe Jankowski (410) 391-5701 AutoAlert Jessica Gates (816) 506-0515 Auto Auction of New England Steven DeLuca (603) 437-5700 Auto/Mate Dealership Systems Troy Potter (877) 340-2677 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 BMO Harris Bank Chris Peck (508) 314-1283 Boston Globe Mary Kelly and Tom Drislane (617) 929-8373 Broadway Equipment Company Fred Bauer (860) 798-5869 Burns & Levinson LLP Paul Marshall Harris (617) 345-3854 Capital Automotive Real Estate Services Willie Beck (703) 394-1323 Catalogs.com David Solar (954) 908-7122 CDK Global Chris Wong (847) 407-3187 Construction Management & Builders, Inc. Nicole Mitsakis (781) 246-9400 Cox Automotive Ernest Lattimer (516) 547-2242 CVR John Alviggi (267) 419-3261 Dealer Creative Glenn Anderson (919) 247-6658 Dealerdocx Brad Bass (978) 766-9000 Dealermine Inc. Jane Webb (800) 304-3341 Downey & Company Paul McGovern (781) 849-3100 EasyCare New England Greg Gomer (617) 967-0303

Ethos Group, Inc. Drew Spring (617) 694-9761 F & I Resources Jason Bayko (508) 624-4344 Federated Insurance Matt Johnson (606) 923-6350 First Citizens Federal Credit Union Joe Ender (508) 979-4728 Fisher Phillips LLP John Donovan (404) 240-4236 Joe Ambash (617) 532-9320 Gatehouse Auto Jay Pelland (508) 626-4334 Gulf State Financial Services Bob Lowery (713) 302-5547 GW Marketing Services Gordon Wisbach (857) 404-0226 Harbor First Ron Scolamiero (617) 500-4080 Hireology Kevin Baumgart (773) 220-6035 Huntington National Bank John J. Marchand (781) 326-0823 Independent Power Systems Mariana Seabra/Ryan Ferrero (978) 998-4079 JM&A Group Jose Ruiz (617) 259-0527 John W. Furrh Associates Inc. Kristin Perkins (508) 824-4939 Key Bank Mark Flibotte (617) 385-6232 KPA Tim Whelan (303) 802-3019 Leader Auto Resources, Inc. Chuck August (518) 364-8723 Lynnway Auto Auction Jim Lamb (781) 596-8500 M & T Bank John Federici (508) 699-3576 Management Developers, Inc. Dale Boch (617) 312-2100 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

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O’Connor & Drew, P.C. Kevin Carnes (617) 471-1120 Performance Management Group, Inc. Mark Puccio (508) 393-1400 PreOwned Auto Logistics Anthony Parente (877) 542-1955 R.L. Tennant Insurance Agency, Inc. Walter F. Tennant (617) 969-1300 Reflex Lighting Daryl Swanson (617) 269-4510 Resources Management Group J. Gregory Hoffman (800) 761-4546 Reynolds & Reynolds Mike O’Connor (860) 462-7958 Robinson Donovan Madden & Barry, P.C. James F. Martin, Esq. (413) 732-2301 Samet & Company John J. Czyzewski (617) 731-1222 Santander Bank Richard Anderson (401) 432-0749 Schlossberg & Associates, LLC Michael O’Neil, Esq. (781) 848-5028 Sentry Insurance Company Eric Stiles (715) 346-7096 Shepherd & Goldstein CPA Ron Masiello (508) 757-3311 Silverman Advisors, PC Scott Silverman (781) 591-2886 Southern Auto Auction Tom Munson (860) 292-7500 SPIFFIT Sean Ugrin (303) 862-8655 Sprague Energy Claude Peyrot (603) 430-7254 SunPower Christie McCarthy, (408) 457-2357 SunTrust Bank Michael Walsh (617) 345-6567 Target Dealer Services Andrew Boli (508) 564-5050 TD Auto Finance Marc Gerhart (781) 697-1525 TrueCar Pat Watson (803) 360-6094 US Bank Vincent Gaglia (716) 649-0581 Wells Fargo Dealer Services Stephen Janetz (215) 986-8498 Zurich American Insurance Company Steven Megee (774) 210-0092

Massachusetts Auto Dealer AUGUST 2017

The Roundup

Are You Taking Advantage of the MSADA Dealer Support Programs in 2017? By Robert O’Koniewski, Esq. MSADA Executive Vice President rokoniewski@msada.org Follow us on Twitter - @MassAutoDealers

Our Summer sure has flown by. As August ends and students are returning to school, we will have four months to go in 2017. This is a great time to review whether you are taking full advantage of those services being offered by your MSADA. I especially notice that many of you are not using several programs your association administers that are designed to support your compliance and community service efforts. Since 2014 your association has conducted a program in which we subsidize the cost of certain compliance efforts dealers go through at their stores. Through this program, we have supported dealers’ use of Fisher Phillips for employment law services, such as pay plans, employee handbooks, etc.; KPA and Furrh Associates for OSHA and environmental compliance; and O’Connor & Drew for tax compliance and cybersecurity protections. In addition to the compliance assistance, your Board voted to reauthorize the community outreach program for 2017, in which we assist dealers’ efforts for up to $1,000 annually. On top of these we have endorsement agreements with the following companies to provide various services to improve dealers’ bottom-line: • Sprague Energy – electric and gas services; • Leader Auto Resources (LAR) – shop supplies; • Reynolds & Reynolds – our forms program; • CVR – ELT registrations; • DealerDOCX – document preservation/destruction services; • Ethos Group – F&I services and products;

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• American Fidelity – employee insurance products; and • PreOwned Auto Logistics – vehicle transport services. Do not hesitate to contact us regarding these programs so you do not lose out on these services supported by your association.

Mass. TIME Dealer of the Year, Frank Hanenberger MSADA proudly announces that Frank Hanenberger of MetroWest Subaru in Natick has been selected as the Massachusetts 2018 TIME Dealer of the Year Award winner. The TIME DOY award recognizes new vehicle dealers across the country for exceptional performance in their dealerships, combined with distinguished community service. Frank will represent Massachusetts in the National competition, which will take place at the upcoming NADA Convention in Las Vegas, March 22-25, 2018. It is the highest honor bestowed on a dealer each year at the NADA Convention. Congratulations to Frank, and good luck on the national stage next year!

Gov. Signs FY18 Budget with Funding for Auto Tech Training Programs In late July Governor Charlie Baker signed into law the state’s FY2018 budget, totaling $40 billion. The budget includes funds to support two auto tech training initiatives. As you may recall, throughout the FY18 budget process there were two items for which we were

MSADA seeking funding: the statewide auto tech training and recruitment program within the Department of Higher Education tied into high schools, community colleges, and potential employers, which was created in last year’s economic development law; and the auto tech training program administered by the state Department of Correction, which identifies certain qualifying inmates for training and placement as auto techs at repair facilities, including franchised dealerships, upon the trainee’s release from the state’s hospitality. As a result of our lobbying, the House budget included $75,000 in seed money for the Higher Ed program and $125,000 for the DOC program. The Senate budget also included the funding. Upon the resolution of the FY18 appropriations law by the budget conference committee, the funding survived legislative scrutiny and was affirmed by the governor with his approval of the overall budget.

CFPB Issues Final Arbitration Rule – Congress Begins Process to Repeal On July 10, 2017, the Consumer Financial Protection Bureau (CFPB), the Obama administration gift that keeps on giving, issued a final regulation banning banks and other financial services companies from including mandatory arbitration clauses in contracts, including motor vehicle retail installment sales and leases, to prevent consumers pursuing claims of wrongdoing from joining class-action lawsuits. The rule will allow companies to include arbitration clauses in their contracts. Companies subject to the rule, however, may not use arbitration clauses to stop consumers from being part of a group action. You may recall, as a result of efforts led by your MSADA, other state dealer associations, and NADA, franchised dealers are exempt from CFPB jurisdiction under the Dodd-Frank Act. However, in yet an-

other attempt by the CFPB to adversely impact franchised dealership operations, this new arbitration rule will affect dealers due to its impact on other businesses dealers work with, such as finance companies. The rule includes specific language that companies will need to use if they include an arbitration clause in a new contract. On the day after the rule was issued Republican House members introduced a joint resolution of disapproval under the Congressional Review Act to block the new rule, and the House ultimately passed the resolution by a vote of 231-190. The resolution, like most legislative matters the House has passed and moved over to the other side of the Capitol, now sits before the U.S. Senate. If the Senate passes the resolution and the President signs it, such action will have the effect of repealing the rule. This regulation is effective September 18, 2017, and applies to contracts entered into as of March 19, 2018. More information is available online at www.consumerfinance.gov/arbitration-rule.

New I-9 Form for Federal Employment Verification Starts Sept. 18, 2017 The U.S. Citizenship and Immigration Services has issued a revised Form I-9, Employment Eligibility Verification. Until September 18, 2017, dealers may use either the new form (7/17/17N) or the one marked “11/14/16N” when establishing a new hire’s eligibility to work in the United States. After September 18, 2017, dealers must use the new form (7/17/17N). The I-9 Form: • requires new hire employees to distinguish between a representation of U.S. citizenship or non-citizen nationality; • reduces the number of acceptable identification documents; and • prohibits the use of some expired documents to demonstrate citizenship or identity. The new I-9 Form and additional information on acceptable employment

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verification documents is available on the USCIS website at www.uscis.gov. One can also refer to NADA’s Driven Guide to Employment Eligibility Verification for more information.

Register Today for the “eStar Qualified” EV Dealer Program by Plug In America Plug In America is targeting the greater Boston region for a series of electric car showcase events during National Drive Electric Week (NDEW) from September 9-17. Volunteers and community stakeholders host the showcase events. This year, with special funding from the U.S. Department of Energy, Plug In America and its Massachusetts state agencies and Clean Cities partners aim to get more people behind the wheel of the latest electric cars available to consumers in the Northeast. The choice of Boston, including the Route 128 Tech Corridor, is designed to support the launch of Plug In America’s “eStar” qualified electric vehicle (EV) dealer program. As part of the program, participating dealerships select members of their sales team to serve as electric car experts or “EV geniuses.” Plug In America then equips these experts with additional training, tools, and resources to make selling electric cars easier and to simplify the consumer shopping and purchase experience. To that end, the eStar program establishes pre-arranged pricing with eStar dealers. It also ties in multiple incentive streams from automakers, dealers, state agencies, and other sources – that taken together can represent significant savings for electric car buyers. Plug In America also will tap a Google Ad Grant, which provides free Adwords advertising to promote the causes of nonprofits, to drive online search traffic to the Plug In America (pluginamerica.org/ dealers) and DriveGreen with Mass Energy (massenergy.org/drivegreen) websites. Once there, online tools and resources inform electric car shoppers about their

Massachusetts Auto Dealer AUGUST 2017

The Roundup choices. They can then choose to connect with specially trained EV geniuses at eStar qualified dealerships. The eStar EV dealer program is unique in that it was designed by dealers for dealers through the active contributions of Plug In America’s Dealer Advisory Committee, itself comprised of some of the nation’s top EV sales experts. The program will begin accepting dealer applications August 2. EV sales training is open to all dealers and will be held on September 6 in Westborough, Massachusetts, to prepare EV geniuses for the series of electric car showcase events that launch with National Drive Electric Week on September 9. Several Boston area communities – including Belmont, Braintree, Cambridge, Wilmington, and Plymouth – will host ride and drive events where visitors can experience the thrill of electric driving. To learn more or to apply to the program, visit www.pluginamerica.org/dealers or email Plug In America at dealers@ pluginamerica.org.

Reminder – EEOC Report Due By Sept. 30 for Dealers with 100 or More Employees The Employer Information Report EEO-1 must be filed with the Equal Employment Opportunity Commission by September 30. The report, also known as the EEO-1 Report, must be filed by: • Businesses that have more than 100 employees; and • Businesses that have 100 or more employees in affiliated entities. The report must be generated from data collected during any pay period between July and September of this year. The data must include all full-time and part-time employees. Dealerships are affiliated entities if there is “centralized ownership, control or management (such as central control of personnel policies and labor relations) so that the group legally constitutes a single enterprise.” In many cases, dealer groups

AUGUST 2017

fall within this “multi-establishment companies” category. EEOC uses the information to measure the hiring of women and minorities, and to eliminate employment discrimination based on race, color, religion, sex, or natural origin in private industry. The information is also used to investigate employment discrimination allegations and the enforcement of federal anti-discrimination laws. More information, including forms, are available at the EEOC website, www. eeoc.gov.

Legislator Updates Earlier this month, Congresswoman Niki Tsongas (D-Lowell) announced she would not be seeking a sixth term as the U.S. representative for the state’s Third Congressional District. Elected in a special election in 2007, she has held the seat for ten years that was once filled by her late husband Paul Tsongas before he moved on to be one of Massachusetts’ two senators. This open seat, a rare occurrence in Massachusetts politics, is expected to set off a mad scramble amongst incumbent politicians, former elected officials, and everyone else with a pulse and dreams of recreating “Mr. Smith Goes to Washington.” On August 23 Governor Baker appointed state Senator Jen Flanagan (D-Leominster) to become one of the five members on the new Cannabis Control Commission, which is charged with regulating the recreational marijuana industry and licensing retail pot stores. She announced she will resign her seat at the end of August in order to be sworn in to her new post. Sen. Flanagan has been a long-time friend of the industry, especially to our member dealers in northern Worcester County, and she will be missed in the state Senate.

Reminder – Labor Day Work Rules Labor Day, September 4, 2017, begins

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the first of three consecutive holidays – the others being Columbus Day (October 9, 2017) and Veterans’ Day (November 11, 2017) – for which dealers must pay all employees, other than “executive”, “administrative” and “professional” employees as described in MSADA’s Guide to Wage and Hour Compliance for Massachusetts Dealers (March 2016), “holiday premium pay” equal to one and one-half times their regular rate if they work on the holiday. Labor Day, for payroll purposes, is considered a partially restricted holiday. A dealership that operates on Labor Day is required to pay most employees at time and one-half their regular rate so long as work is actually performed on the holiday. There is no permit required to open that day. Moreover, an employer may not require an employee to work on the holiday nor may it punish or penalize an employee for choosing not to work. Finally, Massachusetts law does not recognize “paid holidays.” In other words, if an employee does not work on a legal holiday, there is no requirement that he or she be paid for the holiday. If, however, an employee does work on certain legal holidays, Massachusetts law requires that the employee be paid at least time and onehalf his or her regular rate. In addition to complying with the Massachusetts holiday laws, a dealer must also comply with his or her own policies. If your Employee Handbook or past practice says that the day is a “paid holiday,” then you are required to pay employees for that day even if it is not a regularly scheduled workday. Further, if an employee works on the holiday, the employee would be entitled to holiday pay for the day plus the additional premium pay for the hours worked on the holiday, or another day off with pay, if the handbook so provides. As a result, dealers are urged to review their holiday pay policies carefully to ensure that they accurately reflect their actual practices. t

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Massachusetts Auto Dealer AUGUST 2017

MSADA

Troubleshooting

First Amendment Blues By Peter Brennan, Esq.

MSADA Staff Attorney Everyone can agree that the world could use a little more civility these days. Our great country seems to be more polarized every day, and naturally what your employees experience at home and during their commutes is going to travel with them into the workplace. Everyone is entitled to his or her own opinion on current events, but sometimes the expression of one’s views, while constitutionally protected, can cause a headache for employers and repercussions for the employee. On the flip side, employers that attempt to enforce workplace rules to maintain civility may run afoul of National Labor Relations Board rules. Where is an employer that seeks to maintain a controversy-free workplace to turn? It is hard to feel confident about the state of education in the United States when so many of our fellow citizens appear to have missed out on civics class entirely. As a refresher, the First Amendment to the Constitution does codify the legal concept of freedom of speech, but it does not protect people from all repercussions of their speech. The freedom of speech guaranteed by the Constitution protects the speaker (with some exceptions) against government action; it does not protect against any other negative consequence. While the Constitution may protect a person’s right to express a certain viewpoint, and the internet, especially social media, may give that person a platform AUGUST 2017

to share their views, employers are not required to continue the employment of those whose adventures in free speech give the company a black eye. Recently, Google found itself in the news when an internal memo drafted by one of its engineers, James Damore, was picked up by the press. Mr. Damore’s memo was widely criticized in the media for the controversial ideas he expressed, such as his theory that women were less qualified for careers in software development due to biological differences between the sexes. Mr. Damore was quickly terminated by the internet giant when they determined that his continued employment was detrimental to their business and would likely create a hostile workplace environment for his co-workers. Other recent high-profile terminations have resulted when an employer was alerted, usually by internet sleuths, that an employee was caught in a public setting espousing views that the majority of people would find morally repugnant. Again, while the employee’s behavior in these cases is usually constitutionally protected, depending on the fact pattern, the employer is generally able to terminate any at-will employee for any behavior outside of the workplace that jeopardizes the employer’s business in any way. Some states have enacted additional laws to provide further protections on the free speech of employees outside of the workplace. Massachusetts prohibits employers from taking any action against employees based on the employee’s signing of an election-related petition or the employee’s contribution to a political campaign. Massachusetts law would not prevent an employer from disciplining or terminating an employee based on the behavior described in the above examples. Additionally, any offensive statements or behavior by the employee which occur at the workplace and is judged by the employer to be detrimental to the business or working environment can be grounds for discipline or termination, even if it is

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political in nature. So, in the interest of maintaining optimal civility in the workplace, should an employer develop internal rules that require civil discourse? As usual, it depends, but based on some recent rulings by the National Labor Relations Board (NLRB) it would seem that any such rules would have to be extremely narrowly tailored to avoid NLRB scrutiny. In a recent case, the NLRB struck down internal rules instituted by T-Mobile U.S.A that sought to maintain a positive work environment, prevent harassment, and limit griping about work conditions at the workplace. One of the T-Mobile U.S.A rules stated that: “If you feel you have not been paid all wages or pay owed to you, believe that an improper deduction was made from your salary, or feel you have been required to miss meal or rest periods, you are required to contact a manager, an HR business partner, or the integrity line”. The NLRB ruled that T-Mobile U.S.A’s rules violated Section 7 of the National Labor Relations Act (NLRA), which gives all employees the right to engage in protected concerted activity even if the employees are not union members. The NLRB has generally held that under Section 7, employees must be free to discuss their working conditions amongst other employees, even if they do so using profanity or disparaging terms, or engage in conduct that could be considered verbally abusive. Consequently, if an employee makes disparaging remarks about a protected class to his co-workers he can be terminated. But if he makes disparaging remarks to his co-workers about the business, good luck. t For more information on this article please contact Robert O’Koniewski, MSADA Executive Vice President, rokoniewski@msada.org, or Peter Brennan, MSADA Staff Attorney, pbrennan@msada.org,

Legal

MSADA

By Joseph W. Ambash and Jeffrey A. Fritz

Terminating Long-Term Employees with No Record of Discipline Can Be Risky For some managers, the path of least resistance in dealing with poor performers is simply to tolerate, to some degree or another, their unsatisfactory performance and let things slide. But not dealing directly with poor performers, and not appropriately documenting their unsatisfactory performance and your coaching efforts, can make the termination of such employees — especially longer-term employees, who are likely older and, perhaps, more prone to having medical conditions — much riskier for your dealership. Take, for example, a fairly recent case out of Florida. In April 2015, a former used car wholesaler filed a lawsuit against his former employer-dealership claiming age discrimination in violation of the federal Age Discrimination in Employment Act (“ADEA”). His employment was terminated on May 7, 2014, at which time he was in his early seventies and had been with the dealership for over ten years. According to his complaint, he never received any kind of disciplinary or corrective action during his employment, and consistently met or exceeded all performance goals and expectations. He also complained that (1) ever since he had a kidney surgery, his general manager repeatedly asked him about his operation and medical condition, (2) coworkers at the dealership, and perhaps management, referred to him as “Grandpa” and subjected him to ageist jokes, (3) he was “replaced” by someone in his thirties (who subsequently and repeatedly had to contact him for guidance in doing his job), and (4) he did not fit with the dealership’s stated business plan of attracting and appealing to millennial customers. Finally, he alleged his employment was terminated “for not following company policies and processes,” stemming from events ostensibly occurring about ten years before, during his first year of employment. This type of complaint is not out-ofthe-ordinary; ones like it are filed daily in Massachusetts and throughout the United States. As is usually the case, the dealer-

ship’s version of events was likely vastly different than this former employee portrayed in his complaint. Nonetheless, earlier this year, the jury in this case, after hearing evidence from both sides, found in his favor and awarded him $1,380,000 in damages, plus his attorneys’ fees spanning approximately two years of litigation. While we are not privy to the evidence presented to the jury in this case, it reminds us of the problem employers sometimes face when they deal harshly with a long-term employee (or an older or sick employee), especially when inadequate (or no) documentation exists reflecting less-than-satisfactory performance or even counseling. Acting quickly in such instances — for example, to make room for a promising (perhaps much younger) applicant with lots of potential — can subject your dealership to additional risk of a lawsuit. While time may be of the essence in hiring this applicant, making room for him or her by terminating the employment of a poor performer, where such performance has not been appropriately documented, makes defending any resulting case exceedingly more difficult. Of course, the best (long-term) solution to this problem is to ensure your managers are documenting poor performance and coaching such employees in an effort to help them improve. Then, when an opportunity that requires quick personnel action arises, acting quickly is less risky. If your dealership already finds itself lacking with respect to its documentation of employee performance problems, the most prudent course would be to right the ship as soon as possible, and ensure consistency going forward. When dealing with longer-term employees whose less-than-satisfactory performance has been tolerated for some time, it probably makes sense to acknowledge that fact, express an intention to address it going forward, discuss the performance issues substantively, listen to his or her response, and jointly develop a performance improvement plan with reasonwww.msada.org

able (and, as objective as possible) goals and expectations. (Of course, if the employee has just engaged in “protected activity” such as requesting Family and Medical Leave, or seeking an accommodation under the Americans with Disabilities Act, or complaining about alleged discrimination or harassment, you should wait some additional time to address long-standing performance issues — perhaps several months — to minimize the risk of a retaliation claim.) While not counseling and documenting employee performance problems allows supervisors to avoid uncomfortable conversations with the employees they manage, in reality, the failure to do so benefits no one. Employees who are not appropriately counseled are led to believe everything is copacetic with respect to their performance (or, at the very least, good enough) and employers who fail to do so (and fail to document their having done so) increase the risk of a lawsuit — and make defending those filed more difficult — if and when it becomes necessary to take adverse employment actions against them. Training your managers to do all the work of a manager — including having those difficult conversations and documenting poor performance — is essential for reducing the risk of a lawsuit or, worse still, an adverse judgment like the one noted above. t

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

Massachusetts Auto Dealer AUGUST 2017

AUTO OUTLOOK

AUGUST 2017

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Massachusetts Auto Dealer AUGUST 2017

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ACCOUNTING

Mid-Year Reality Check By Kevin Carnes O’Connor & Drew PC

Believe it or not, the year is more than halfway over. Although the first quarter may have been more difficult than you may have wanted, I hope that profitability bounced back in the second quarter. Before the year is past us and we are looking in the rear view mirror, thinking about what we should have done, I thought it would be beneficial to highlight a few items that you should consider focusing on to end the year with a positive bottom line. Between the demands from the factory

tention to the proximity of where the customer lives to the dealership. If there is no way you are going to gain them as a service customer, I would consider that fact when making an offer and determine just how low you are willing to go just to sell that car. As you have seen grosses drop, you have also probably noticed expenses creeping up over the past few years. Some of these expenses are difficult for you to control; however, a number of them are controllable. It is important that you monitor all expenses. In doing this, I suggest that each month you take three expense accounts and get the detail of these accounts to see exactly what you are spending. Can any of these expenses be eliminated or should they be renegotiated or put out to bid? Just because you may be able to afford some of these expenses does not

“Although it is every dealer’s goal to turn all leads into car sales, do not forget to ask for gross.” and the utilization of the various software companies, the front-end gross on vehicles has been decimated. Although it is every dealer’s goal to turn all leads into car sales, do not forget to ask for gross. Over the years, I have seen a trend develop where people are afraid to quote a price that allows them to make a profit on the sale of a car, almost like the concept is taboo. Gross profit for the front end of the store is an average, and there should be deals that break even, some that lose money and some that make money. So, make sure not to approach all deals as if you are going to lose money just to make the sale. In doing this, pay particular atAUGUST 2017

mean that you need to incur them. In addition, payroll for employees has grown. Although there are a limited number of qualified individuals in the automotive industry and competition is high, there is no reason to keep unproductive employees. Take a look at your staff to see who is really productive and necessary and who is just not making the grade and cut the cord in a timely manner rather than holding onto them for another month or two. When doing this, also review the overtime that is being paid out on a weekly basis. Instead of paying time and a half for an hourly employee it may make sense to either change the schedule around to eliminate overtime or to hire

Massachusetts Auto Dealer www.msada.org

another person to assist at the normal hourly rate. Profit in dealerships is not only based upon obtaining gross profit and controlling expenses, it is also important to manage your balance sheet. For the first time in a few years, floorplan interest is becoming an expense worth paying closer attention to. Now, obviously, interest rates have increased and that has an impact, but the day supply of inventory on the ground also seems to have increased as well. It is important to continue to monitor this and establish guidelines that should be adhered to. For example, new vehicles have a strict 90-day supply rule where no vehicles are on the lot longer than 90 days. As far as new vehicles, pay attention to what you are selling versus what you are ordering. In addition to paying attention, also be realistic. If you currently sell 50 new vehicles, how realistic is it to go to 90 when you have changed nothing in your operations? Too often I see dealerships get buried in inventory because of some dream they had to grow sales exponentially without taking into account the reality of their business. The problem is if you have excess inventory, it can sometimes take months to bring that down, causing you to not only take short deals but also not receiving the assistance provided in ordering new vehicles. In conclusion, I hope that what I discussed above has, if not helped you, at least put the thought in your mind to refocus on other aspects of the business. In doing so, 2017 year-end results will more likely meet the expectations you had when the year began. t With over 20 years of public accounting experience, Kevin is a key leader in developing the internal audit division for automobile dealerships within O’Connor & Drew, P.C. He can be reached at (617) 471-1120.

MSADA

ADVERTISING

Bridging the Creative Gap from TV Commercials to Pre-Roll Advertising By Glenn Anderson Dealer Creative

For decades, TV has been the ultimate advertising playground for car dealers. From crazy to conservative, from soft to silly, and every idea in between, dealers have had a blank canvas to do whatever they want. That canvas just got a whole lot bigger with video pre-roll. For advertisers, video pre-roll is the new frontier. What is video pre-roll? They are the 15-30 second ads you see right before the funny video on YouTube or the short ads you see before news, sports, and entertainment clips on other websites. You can run pre-roll ads on over 50,000 websites, but target them on a local level for your dealership. Pre-roll allows you to tap into a whole new land of opportunity to get new leads. Here’s how: 1. Adding pre-roll to your buys will increase the reach of a TV campaign. 2. You can hyper-target demographics in specific geographic locations. 3. Use retargeting to follow a shopper through the online buying cycle. 4. You will receive the metrics and accountability of a digital campaign. 5. It is very affordable, and you get the branding impact of a TV commercial. So when it comes to your video ad, there’s one burning question: I’ve already paid to have a TV commercial produced. Can’t I just use it for my pre-roll buy?

This is a frequently asked question since it would save you time and money, but here are some points to ponder:

Think mobile first When a car shopper sees your pre-roll ad online, it is likely on a mobile device. That is a much more intimate setting than a big screen TV. Consuming content on a mobile device is a one-on-one experience. It is held in the palm of your hand. A well-crafted TV commercial is designed to reach the masses with volume and to cut through the advertising clutter surrounding it. With online video the viewer is more focused, less distracted, and does not need to be screamed at to gain his or her attention. It is a much more individual experience.

It is not on the big screen Many car dealers’ TV commercials are loaded up with logos, text, and all kinds of graphics. That might be OK on your 55” Samsung TV, but on a 4 1/2” iPhone, you run the risk of overwhelming the viewer. The graphics and text you use on TV are not as easily read and retained on the much smaller mobile screen. Mobile ad graphics need to be clean and simple.

OK, I get it. I should not use my TV spot for pre-roll. But since pre-roll is so different, where do I start? At the very least, consider creating a modified version of your TV commercial for pre-roll use. Here are some recommended tactics: • create campaigns and model-specific ads that target very specific demographics; • create videos tailored for whichever stage of the buying cycle they are in; • make sure you have a good call to action to get the clicks. Adding pre-roll to the mix with these tactics shifts your video marketing efforts into high gear.

What do the big boys think? It is interesting to note that when we posed this “should I use my TV spot for pre-roll?” question to Google, they concurred that it is not ideal, but they reluctantly added, “…but it is better than nothing.” Yes, better than nothing is better. But if you want to be the best in your market, then be the best in your marketing. Be the dealer in your market who dominates pre-roll. t

Five seconds from failure We all do it. You found a YouTube video you really want to watch, and when you hit play, a commercial interrupts you. And then your eyes move to the lower right hand corner of the screen … you can skip this ad in 5… 4… 3… 2… 1… SKIP AD! And click! It is gone. That is what could happen if you put your TV ad in a video pre-roll campaign. Since skipping over a video pre-roll ad is so easy, a creative strategy needs to be in place to hook viewers in and compel them to want to watch beyond those first five crucial seconds. www.msada.org

Glenn Anderson is a marketing veteran with over 25 years experience in local advertising and marketing. Glenn is the Director of Sales and Marketing for Dealer Creative, a full-service creative company that has written and produced over 19,000 TV commercials and online videos for hundreds of auto dealers throughout the US and Canada. Glenn can be reached at Glenn@DealerCreative. com or 919-247-6658

Massachusetts Auto Dealer AUGUST 2017

COVER STORY

The

Drive Clean

Sparking interest in electric vehicle sales

lectric vehicle sales in Massachusetts continue to grow, with new models steadily coming into the marketplace. Most consumers are relatively unfamiliar with electric vehicles (EVs), and helping them determine if one is the right choice can be challenging, often requiring sales staff to guide them through the decision process. First-time EV shoppers may be unsure of the new technology and arrive at the showroom with a lot of uncertainties. They often need help to decide if the change to a zero or near-zero emission vehicle will fit their lifestyle. They have questions about vehicle capabilities, charging, pricing, and maintenance; dealership sales staff must be prepared to answer these questions to help customers better understand the advantages of driving electric.

AUGUST 2017

Massachusetts Auto Dealer www.msada.org

MSADA MSADA

Connection MOR-EV to the Rescue Massachusetts Offers Rebates for Electric Vehicles (MOR-EV), funded by the state’s Executive Office and the Department of Energy Resources (DOER) and administered by the Center for Sustainable Energy (CSE), provides rebates directly to purchasers and lessees of new eligible EV models. MOR-EV gives sales staff the opportunity to talk to customers about considerable savings on their purchase or lease – up to $2,500. Combined with the current federal tax credit, they can save up to $10,000. “The rebates are an important part of successful EV sales by providing customers with an extra incentive to drive electric,” said Nicole Appenzeller, CSE’s MOR-EV project manager. “Working with MSADA and Robert O’Koniewski and his staff has helped make sure dealers have the most up-to-date rebate information, and we look forward to building on that relationship and helping dealers take full advantage of the MOR-EV program.” As a supplement to MSADA’s continued guidance on this program, this is the first article in MOR-EV’s “Drive Clean Connection,” an occasional series for Massachusetts Auto Dealer magazine which will focus on providing dealerships with resources to help sell more EVs, including information on incentives, dealer training opportunities, the Massachusetts EV market, and what services EV buyers value at the dealership. Four Rules about MOR-EV Rebate Eligibility

customer must be a Massachusetts • Your resident. vehicle must be new at the time of • The lease or purchase. is leased, the origi• nalIf theleasevehicle term must be at least 36 months. The customer must submit their rebate application within three months of the purchase/lease date. For a list of eligible vehicles and currently available funds, visit MOR-EV.org.

•

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Massachusetts Auto Dealer AUGUST 2017

THE DRIVE CLEAN CONNECTION

MOR-EV Program Data Summary Top 10 Rebated Vehicle Models (Q2 2017)

Top 10 MA EV Retailers (Q2 2017)

Vehicle Models

Dealer or Store

Chevrolet Volt Toyota Prius Prime Chevrolet Bolt Tesla Model S Tesla Model X Ford Fusion Energi Ford C-MAX Energi Nissan Leaf BMW i3 & i3 REx Chrysler Pacifica Hybrid

Rebates 189 148 127 103 146 45 34 33 23 21

Percent 23% 18% 15% 12% 5% 5% 4% 4% 3% 3%

Four Quick Steps to Apply Although MOR-EV accepts applications up to three months after purchase or lease, to make the rebate feel like cash on the hood and help close the deal, we encourage sales staff to assist their customers by submitting the application online at the dealership. The application process takes less than five minutes to complete, and most of the required information is on the purchase or lease agreement. Your customer then has 14 days to email the required supporting documents to CSE. Most applications are approved within 10 days of document receipt. Rebate checks arrive within 75 days of application approval. To help your customers submit their rebate, follow these steps: AUGUST 2017

Massachusetts Auto Dealer www.msada.org

Quirk Chevrolet - Braintree Tesla Motors Inc. Mirak Chevrolet Acton Toyota of Littleton Boch Chevrolet Muzi Chevrolet Herb Chambers BMW Herb Connolly Chevrolet Lexington Toyota Marcotte Ford

Rebates 165 148 34 23 20 18 14 13 11 11

• Visit MOR-EV.org; • Select the purchased or leased vehicle; • Submit the MOR-EV application online; • Send supporting documents to mor-ev@energcenter.org. After applying, your customers can expect regular email communication from MOR-EV staff regarding their application status.

Four Documents to Submit • Signed MOR-EV rebate application form; • Purchase or lease agreement; • Proof of Massachusetts vehicle registration; and • Massachusetts driver’s license.

MSADA

MSADA Did You Know?

The MOR-EV rebate is separate from the federal income tax credit for electric vehicles. The federal tax credit varies based on a vehicle’s battery size – up to $7,500. Encourage your customers to consult a tax professional to confirm their individual eligibility. For complete information on the federal EV tax credit, visit fueleconomy.gov.

No Cost EV Sales Training Become eStar Qualified A partnership between the U.S. Department of Energy, Plug In America, Massachusetts agencies, and Clean Cities partners aims to get more people behind the wheel of the latest electric cars available to consumers in the Northeast through National Drive Electric Week, September 9-17. With National Drive Electric Week approaching, there is still time to enroll in Plug In America’s eStar Qualified EV Dealer program. This no cost program includes supplemental training beyond what the factory offers for sales staff and a onestop website for all available EV incentives that can be shared with consumers. The program also includes marketing benefits such as preferred placement and customer leads from promotional events, including National Drive Electric Week and featured listings on Plug In America and partner sites. The choice of Boston, including the Route 128 Tech Corridor, is designed to support the launch of Plug In America’s “eStar” qualified electric vehicle (EV) dealer program. As part of the program, participating dealerships select members of their sales team to serve as electric car experts or “EV geniuses.” Plug In America then equips these experts with additional training, tools, and resources to make selling electric cars easier and to simplify the consumer shopping and purchase experience. To that end, the eStar program establishes pre-arranged pricing with eStar dealers. It also ties in multiple incentive streams from automakers, dealers, state agencies, and other sources – that taken together can represent significant savings for electric car buyers. Plug In America also will tap a Google Ad Grant, which provides free Adwords advertising to promote the causes of nonprofits, to drive online search traffic to the Plug In America (pluginamerica.org/

dealers) and DriveGreen with Mass Energy (massenergy.org/ drivegreen) websites. Once there, online tools and resources inform electric car shoppers about their choices. They can then choose to connect with specially trained EV geniuses at eStar qualified dealerships. The eStar EV dealer program is unique in that it was designed by dealers for dealers through the active contributions of Plug In America’s Dealer Advisory Committee, itself comprised of some of the nation’s top EV sales experts. EV sales training is open to all dealers and will be held on September 6 in Westborough to prepare EV geniuses for the series of electric car showcase events that launch with National Drive Electric Week on September 9. Several Boston area communities – including Belmont, Braintree, Cambridge, Wilmington, and Plymouth – will host ride and drive events where visitors can experience the thrill of electric driving. To learn more or to apply to the program, visit www.pluginamerica.org/dealers or email Plug In America at dealers@ pluginamerica.org. MOR-EV staff are available to answer any questions. For information, call (866) 900-4223 or email mor-ev@energycenter. org. Do you have a question you would like to see answered in an article? Email your question to mor-ev@energycenter.org. t

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Massachusetts Auto Dealer AUGUST 2017

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

NEWS the Horn

WEYMOUTH

In Memoriam: Fred Shaw Fred Shaw, owner of the long-running dealership Shaw Saab, died August 14 at the age of 83. Shaw was born in Fall River, serving during WWII on the USS Antietam. In his earlier years, he worked as an Oldsmobile Service Manager, Saab Service Engineer, and in the family business at Seymour’s Ice Cream in Dorchester. In 1968, he founded Shaw Saab in Hingham. Shaw Saab was a successful and well-respected business on the South Shore, earning numerous national customer satisfaction awards and recognition for having more Saab’s in Hingham per capita than any other city in the nation. Shaw was a Master Mason – affiliated with Old Colony Lodge, Hingham and Dalhousie Lodge, Dedham. He was a two-time Past Monarch of Mahded Grotto, Dedham, and affiliated with Moslem Grotto and Azab Grotto groups, in addition to being past president of both the South Shore Shrine Club and Hingham Kiwanis. After retirement, Shaw enjoyed frequent visits to Little Compton, Rhode Island, and Cape Cod Canal, where he planted hundreds of daffodil bulbs. In addition to spending time with family, Fred enjoyed gardening, photography, and genealogy. Donations in Shaw’s memory may be made to Masonic Education & Charity Trust, 186 Tremont Street, Boston, MA 02111.

AUGUST 2017

Massachusetts Auto Dealer www.msada.org

MSADA PEABODY

Dealerships Donate Two Electric Cars to Peabody Police Peabody Police will have two new cars to work with, thanks to a donation from Lyon-Waugh Auto Group. The dealership and BMW of Peabody donated two BMW i3 cars, according to a post from the Peabody Police Department Facebook page. The Peabody Chamber of Commerce noted that one car will be used to help the senior center, and another will be used to assist Peabody Main Streets. Both cars are electric and will carry the Peabody Police emblem. The newly updated BMW i3 has 170 horsepower from its rear-mounted electric motor and can get a total electric range of around 114 miles.

AUBURN

Ford Helps Police Solve Carbon Monoxide Issue in Cruisers The Auburn Police Department says Ford has resolved the issue of elevated levels of carbon monoxide in its cruisers after an officer exposed to the gas passed out behind the wheel of his vehicle and crashed.The department said on its Facebook page that Ford engineers and Auburn mechanics have “corrected” the problem. The department said that the three remaining vehicles were to be modified in early August. Police said three officers were hospitalized for “high carbon monoxide levels,” including one who passed out in a cruiser and rear-ended another vehicle. He was not badly hurt. Multiple Ford Explorer SUVs were pulled out of service. A Ford spokesperson says engineers found some unsealed holes from modifications made to install police equipment. Ford believes that is what caused exhaust to enter.

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Massachusetts Auto Dealer AUGUST 2017

Around the Horn NEWS fromSERVICES DEALER WEST SPRINGFIELD

Balise Highlighted Among Few Dealerships Holding Lexus LFAs Gear heads have been scouring the country for dealerships offering the Lexus LFA, a supercar offered on a limited basis in 2012, after online discussions in August indicated that a few had remained unsold from dealerships. With national website Jalopnik coordinating a search, a list of 12 vehicles at only nine U.S. dealerships featured one Massa-

MSADA

from dealers (indirect lenders) are also required to be licensed. These requirements apply anytime the purchase of a vehicle is financed in two or more installments, regardless of whether interest is charged on the loan. The investigation resulted in 135 cease directives, $170,000 in fines and penalties, and more than $200,000 in consumer reimbursements. “Very often used vehicles are being sold to consumers with poor or no credit at prices far above book value and at very high interest rates,” Consumer Affairs Undersecretary John Chapman said in a statement. “We understand that this is a financing option of last resort for those consumers, but we want to be sure that what’s happening at dealerships is not predatory and that unfair and deceptive practices are not being employed.” “The division works to protect Massachusetts consumers from excessive fees and finance charges, and wrongful repossessions,” Commissioner of Banks Terence McGinnis added in a statement. “By ensuring these companies are properly licensed and regulated, they will be subject to regular on-site examinations to determine compliance with various consumer protection laws.” DETROIT

chusetts dealership: Balise Lexus. Nearly all of those 12 vehicles were purchased by the owners of the dealerships in 2012. Their mileage ranged from 20 to almost 1,500 on the clock. “They aren’t driven much, except perhaps for special occasions and by technicians to make sure they still run,” Jalopnik wrote. “Otherwise, most serve as display centerpieces for the dealerships.” BOSTON

Division of Banks Issues Fines for Unlicensed and Illegal Lending Practices Several auto lenders are being fined after the Massachusetts Division of Banks discovered unlicensed or illegal lending activities, as part of a statewide survey of 200 car dealerships in conjunction with the state’s Division of Professional Licensure and the Registry of Motor Vehicles. The effort examined “Buy Here Pay Here” auto dealerships that sell vehicles using retail installment contracts to ensure that used car dealerships were not pricing vehicles far above book value or charging interest rates beyond the state’s maximum interest rate limit of 21 percent. Buy Here Pay Here dealerships or the auto financing companies they use are required to be licensed by the DOB. Companies who purchase or take assignment of retail installment contracts AUGUST 2017

Massachusetts Auto Dealer www.msada.org

U.S. Regulators Approve 2017 Fiat Chrysler Diesel Vehicles for Sale Fiat Chrysler Automobiles won approval from U.S. and California regulators in late July to sell 2017 diesel vehicles after it came under scrutiny for alleged excess emissions in older diesel vehicles. Fiat Chrysler hopes to use updated emissions software in the 2017 vehicles as the basis of a fix to address agencies’ concerns over 2014-2016 Fiat Chrysler diesel vehicles after the Justice Department sued the automaker in May, alleging excess emissions. Regulators contended the older vehicles had undisclosed emissions controls that allowed vehicles to emit excess pollution in normal driving. In May, the Justice Department sued Fiat Chrysler, accusing it of illegally using software to bypass emission controls in 104,000 diesel Jeep Grand Cherokees and Dodge Ram 1500 trucks sold since 2014. Fiat Chrysler chief executive Sergio Marchionne said in a statement announcing the approvals that the company was eager to update the emissions control software in its earlier model-year vehicles. The company had been seeking permission for months to begin selling 2017 diesel vehicles. Reuters reported that it could take months for regulators to sign off on testing and then approving Fiat Chrysler’s plan to use the software in 2017 diesels to update older vehicles.

MSADA BOSTON

Herb Chambers Offers Rare McLaren F1 for Sale Herb Chambers put one of the rarest car models from his personal collection up for auction this month. Known by many as the ultimate road car, the 1995 McLaren F1, number 044, is the very first McLaren F1 imported into the US and the very first of only a handful of F1s to become fully federalized as a US road-legal car. Designed by South African Gordon Murray, the F1 was created with exotic materials and advanced construction, incorporating such novel features as a centrally positioned seat for the driver and twin Kevlar fans to create downforce. Featuring the worldâ&#x20AC;&#x2122;s first carbon fiber reinforced plastic monocoque, the F1 spared no expense to achieve its goals for road supremacy. Furthering the cost-is-no-object philosophy, gold insulating foil was installed around the engine bay to ensure optimal heat containmentâ&#x20AC;&#x201D;all of which helped the streetcar achieve a world record top speed of 243 mph. t

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Massachusetts Auto Dealer AUGUST 2017

24 JULY 2017

AUGUST 2017

Massachusetts Auto Dealer www.msada.org

MSADA

NADA MARKET BEAT

JANUARY 2016

www.msada.org

Massachusetts Auto Dealer AUGUST 2017

MSADA AUTO OUTLOOK

TRUCK CORNER

ATD and Trucking Industry Redefine the Dog Days of Summer

By Steve Parker

Baltimore Potomac Truck Centers ATD Chairman

er is partaking in an employee-appreciation day or In July and August, many states are extending honoring some of the best and brightest in your ortheir “tax-free weekend” to consumers in preparaganization. Finally, no matter how busy we get with tion for the back-to-school flurry. As we squeeze the the demands of our business, there is always time to last remnants out of the dog days of summer, ATD have an employee retreat so they can recharge their salutes the trucking industry, which has not missed minds and bodies. a beat all season. While we hit some rough patches on the retail side As I drove into work, I passed by many commerearlier this year, I am pleased to report that nearly cial trucks sent out to different destinations with 80 percent of people surveyed throughout the truck goods that will stock grocery shelves and school industry believe business conditions will improve supplies to much more. During my weekend drives, over the next six months, according to the June 2017 I have seen carriers full of vehicles destined to arrive CCJ MarketPulse survey. In fact, about 88 percent at dealer lots. And I am most accustomed to seeing of respondents from large fleets expect conditions the vocational trucks at job sites -- like the ones at to improve compared to 60 percent of respondents my lot -- filled with brick-and-mortar that is critical from smaller fleets. to construction. The conditions for How do these conour future are bright, sumer goods reach “The conditions for our and I salute all the millions of people? passionate dealers Through trucks, and future are bright, and I who are working the great dealers salute all the passionate extremely hard this who sell them. American comdealers who are working year, many of whom have yet to take a merce kept moving this summer, in extremely hard this year — summer day off. Since ATD was part, because of U.S. many of whom have yet to created in the early truck dealers. They take a summer day off.” 1970s to advocate number thousands for and protect franof passionate men chised truck dealers and women, most of across the nation, this association pledges to work whom ATD proudly represents. I have had the privjust as hard as our members, no matter the season. ilege of meeting many of you throughout my tenure And as I sit in my office and look out the window, with ATD, and I can say for certain that the road I see another large commercial truck rumbling past from factory to consumers starts with you. Dealers my own dealership, an embodiment of the non-stop are responsible for selling the trucks that ship goods commerce and trade of our industry. I am certain and items for purchase. the truck dealers of America have redefined the dog Additionally, there are more than 30 million regdays of summer. istered commercial trucks in the U.S. It is no wont der that we all pass a truck at some point in the week during our daily commute or travel. Our amazing Steve Parker is chairman of ATD, a division of industry produces an estimated revenue of $700 bilNADA, in Tysons Corner, Virginia, which represents lion, making the tax-free weekend just a small piece 1,800 heavy- and medium-duty truck dealerships. of the pie. He is president of Baltimore Potomac Truck I would like to remind our members to take adCenters in Linthicum, Maryland, which operates vantage of company events and leisure activities five full-service commercial truck dealership before the fall season. At ATD/NADA, for example, locations with Mack, Volvo, and Hino Trucks the staff and leadership will soon enjoy a company franchises in Maryland and Virginia. picnic. Aside from that, the biggest morale boostwww.msada.org

Massachusetts Auto Dealer AUGUST 2017

JULY 2017

Massachusetts Auto Dealer www.msada.org

NADA Update

By Don Sudbay

Talking Stair-Steps 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). As we say goodbye to Summer, both your Association and NADA are revving up their activities as we head into a busy Fall season. From September 12-13, NADA will host its annual Washington Conference, headquartered at the Washington Hilton. We invite dealers from across the country to come meet with their representatives on Capitol Hill, and I hope you will consider coming down and representing your business. Below, you will see NADA Chairman taking on an issue both MSADA and NADA have been tracking for some time: Stair-Step Incentive Programs. As with Washington, we dealers must work together to ensure fairness remains at the center of any OEM incentive program. I encourage you to remain aware of how these programs are unfolding, and to keep up to date with both MSADA and NADA information relating to them.

A Good Relationship is a Two-Way Street By Mark Scarpelli, NADA Chairman I am proud to be an auto dealer. I am proud to work with the manufacturers that make the great products we sell every day. And I am proud of the gains we have made for over 100 years based on a symbiotic relationship between retailers and OEMs. If we intend to keep serving our customers efficiently, safely, and cost-effectively, we need to preserve that symbiosis, with dealers and OEMs working together, not against one another. I am holding strong to the stance that if factory efforts such as stair-step incentive programs run afoul of everything we and our customers care about, including fairness and transparency, then we are obliged to tell our factory partners that the stairs are merely steps leading directly to the basement. The ongoing proliferation of market strategies such as indiscriminate price coupons are complicated and deflating for both dealers and consumers. The same can be said of factory efforts within a dealer’s fixed operations, namely our service centers, where we are hampered by oil/ tire programs, service programs, and much more. I am seeing that more often the ends do not justify the means.

I have spoken to hundreds of my fellow dealers who agree that the No. 1 disadvantage is that many of these factory programs are not available to everyone. Dealerships of different sizes or those in more rural and less populated locations are on vastly different footing compared to those that are able to utilize these programs. Dealers are, at their most basic, entrepreneurs and change-makers. We are tough and resilient even in the harshest conditions. We are not asking for a handout; we simply expect equal footing. I have said this before, but it bears repeating. To remain the booming economic engine our industry has been for this country, we need to remain profitable. To remain profitable, we need to be on the same page. Dealers and manufacturers should have the same goal: to sell our inventory in large volume and at competitive prices while maintaining the integrity of the brand and creating a great customer experience. There is a problem when dealers are carrying the

“Dealers are, at their most basic, entrepreneurs and change-makers. We are tough and resilient even in the harshest conditions.”

latest and greatest models in their inventory but still lack the opportunity to be profitable and satisfy their customers. There is a problem when the OEM mandates are many, but the realistic objectives are few. I would like to remind all stakeholders of our great industry that the next few decades will bring rapid change. In his study, The Dealership of Tomorrow: 2025, Glenn Mercer announced critical findings from his research, including the fact that the current dealership model -- the franchise system -- will remain dominant. His research also postulates that dealerships will become more alike, with dealers adopting prescribed features of factory stores. Our numbers may also fluctuate over the next few years, with the number of dealerships shrinking slightly to an estimated 16,500 stores by 2025. While slow consolidation of store ownership will continue, private ownership will still dominate.

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Massachusetts Auto Dealer AUGUST 2017

MSADA

NADA Update What does this tell us? All in all, chances are the “Joe Smith” family-owned and operated, local dealership in Everywhere Township will stand the test of time. Dealers are doing all they can to adapt, w, and remain flexible through the challenges ahead.

Dealers are doing all the can to adapt, pivot, and remain flexible throug hte challenges ahead. We ask that our manufacturers are with us too. Every good relationship is a two-way street. OEMs and dealers have but one option: repave ours, smooth out the bumps and restore that street to its full glory.

Former NADA President and Foundation Chairman Robert P. Mallon Dies at 83 Robert P. Mallon, former president of the National Automobile Dealers Association and chairman emeritus of the National Automobile Dealers Charitable Foundation, died on August 3. He was 83. “As a dealer, a NADA director, and now chairman of NADA, I’m honored to have worked with Bob Mallon over the years,” said 2017 NADA Chairman Mark Scarpelli. Mallon served on NADA’s board of directors representing franchised new-car and -truck dealers in the state of Washington from 1972-2002, and was elected NADA president in 1978. He is the former president of Mallon Ford, Inc. in Tacoma, Washington. “Bob’s legacy lives on in our dealer community,” Scarpelli added. “His passion and dedication to the automobile business was unwavering through his decades-long service to advancing dealers and the goodwill that they do every day in their businesses.” In 1975, Mallon established the foundation and served as its first chairman. He was the driving force behind creating the NADA programs that have donated millions of dollars in charitable grants to individuals and organizations across the country. Mallon, a second-generation dealer, was born in Tacoma, Washington, in 1933. It was the same year his father, Tommy Mallon, took over the Ford franchise in Tacoma, after climbing the dealership ranks for 17 years working in numerous positions in the service and sales departments. “From the time Bob Mallon became an automobile AUGUST 2017

dealer in 1958 in his beloved hometown of Tacoma, to serving on NADA’s board and leading the association as president, he left a permanent mark on the retail-auto industry and with his fellow dealers,” said NADA President and CEO Peter Welch. “We cannot overstate the important place he held for nearly half of NADA’s 100 years in existence. As a pioneer, he established the NADA Foundation and was instrumental in the success of the NADA PAC Presidents Club. He was a true gentleman and will be greatly missed.” Along with guidance from the NADA Foundation’s board of trustees, Mallon established numerous charitable programs. Mallon also established the NADA Foundation’s International Freedom of Mobility Award in 1977. The award was presented each year to recognize an individual who preserved, protected and promoted personal freedom of mobility. The program was discontinued in 2001. “I feel as if I could write a book about all my memories of encounters with the legendary Robert P. Mallon,” said Annette Sykora, current chairman of the NADA Foundation. “Utilizing his persuasive talents, he inspired the formation of the NADA Foundation. “With determination, he presided over and fostered the growth of our NADA Foundation for 40 years,” added Sykora, who served as NADA chairman in 2008. “His kind heart, passion for our industry and genuine friendship will be greatly missed.” Mallon also served as president of the Washington State Automobile Dealers Association from 1966-1967. He received its prestigious Dealer of the Year award in 1967, an award that now bears his name. It is presented in recognition of a dealer’s contribution to the auto industry, quality dealership operations and community service. “It was a supreme gift and privilege to know Bob,” said Vicki Fabre, WSADA executive vice president. “He has left an indelible mark on our lives and the industry he loved.” In 2014, WSADA’s office building in Renton, Washington, was named in Mallon’s honor in recognition of his many contributions to the auto industry. “In Washington state, not only was Bob a tireless advocate for dealers and the franchise system, but a widely recognized and respected visionary, a titan of a humanitarian for his lifelong work with the NADA Foundation,” added Fabre. “His passing has left a deep hole in our hearts.” Memorial contributions in honor of Robert P. Mallon can be made online to the NADA Foundation’s Ambassadors Program. To donate by phone, call (703) 821-7176. Check donations can be mailed to: NADA Foundation, In honor of Robert P. Mallon, 8400 Westpark Drive, Tysons Corner, Virginia 22102. For more information, email foundation@ nada.org. t

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