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FIRST CLASS MAIL US POSTAGE PAID BOSTON, MA PERMIT NO. 216
November 2021 • Vol. 34 No. 11
The official publication of the Massachusetts State Automobile Dealers Association, Inc
Joe Shaker
DEALER OF THE YEAR
Ma s s a c h u s e t t s
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S ta f f D i r e c t o r y Robert O’Koniewski, Esq. Executive Vice President rokoniewski@msada.org Jean Fabrizio Director of Administration jfabrizio@msada.org Peter Brennan, Esq. Staff Attorney pbrennan@msada.org Auto Dealer MAgazine Robert O’Koniewski, Esq. Executive Editor Tom Nash Editorial Coordinator nashtc@gmail.com Subscriptions provided annually to Massachusetts member dealers. All address changes should be submitted to MSADA by e-mail: jfabrizio@msada.org Postmaster: Send address change to: One McKinley Square, Sixth Floor Boston, MA 02109 Auto Dealer is published by the Massachusetts State Automobile Dealers Association, Inc. to provide information about the Bay State auto retail industry and news of MSADA and its membership.
Ad Directory Ethos, 2 Bellavia Blatt, 17 Nancy Phillips, 19 NEAD, 19 O’Connor & Drew, 28 ADVERTISING RATES Inquire for multiple-insertion discounts or full Media Kit. E-mail jfabrizio@msada.org Quarter Page: $450 Half Page: $700 Full Page: $1,400
Back Cover: $1,800 Inside Front: $1,700 Inside Back: $1,600
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The official publication of the Massachusetts State Automobile Dealers Association, Inc
Table of Contents
4 5 6 8 9 10
From the President: Getting Our Groove Back ASSOCIATE MEMBERS DIRECTORY THE ROUNDUP: Legislature Crawls to Holiday Break LEGISLATIVE SCORECARD TROUBLESHOOTING: FTC Approves Amendments to Safeguards Rule AUTO OUTLOOK
14 Cover Story: Dealer of the Year – Joe Shaker
18 20 21 22 24 25 26
NEWS From Around the Horn INFORMATION SECURITY: ‘The Password is...’ LEGAL: Avoiding Legal Fear With Your Holiday NADA Market Beat AIADA Brief: The Big Picture TRUCK CORNER: ATD Joins Partners for a Zero Emission Vehicle Future nada update: Leading the Charge
Join us on Twitter at @MassAutoDealers www.msada.org
Massachusetts Auto Dealer
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From the President
MSADA
Getting Our Groove Back
Two major industry events are returning, and better than ever
By Chris Connolly, MSADA President As we head into another Winter season, after nearly two years it is finally time to be able to look forward to the largest industry events hosted by our Association and NADA. We can anticipate gathering in January and March in Boston and Las Vegas, respectively, to celebrate what makes our industry simply the best out there. Our NADA Director Scott Dube continues to put in tireless work ensuring the NADA Show is the grandest yet -- see more details about registration in his monthly column. It will be fantastic also to get to celebrate our TIME Dealer of the Year Candidate Joe Shaker in person. Be sure to read this month’s cover story to see why he is an obvious pick from your fellow members for 2022. “Personally, I Not all of the excitement will be in Vegas, of course. Personally, I know I have been waiting know I have been for the return of the New England International waiting for the Auto Show as the fullest sign of a return to the new normal. return of the One thing that will seem “normal” after too New England long is seeing a floor full of metal again. For International too many of us, and our customers, finding what had once been the expected volume and choice Auto Show as the amid this ongoing inventory shortage has been fullest sign of one more challenge on top of the ongoing world a return to the health crisis. We all are going to have our own favorites at new normal.” the Auto Show. Of course, we dedicate our livelihoods to certain manufacturers, and we had better expect them to be the best on the floor. But the bigger message is that with all these new models rolled out for the public, we dealers are here to help get them in the vehicle of their dreams. This is a critical message: The automotive business is a people-driven business. We are here for our customers. We are here for their convenience and, more importantly, their safety. That is why the laws are the way they are, and why we are always striving to protect and improve them. The Auto Show delivers that message softly, but it cannot be missed. With all that being said, the Auto Show is about us enjoying ourselves, too. As we gear up for our Annual Gala, I encourage you to contact us with any ticket orders and questions. Jean Fabrizio can be reached at (617) 451-1051 or jfabrizio@msada.org. We are planning a great night, and I am excited to see you there. t NOVEMBER 2021
Massachusetts Auto Dealer www.msada.org
Msada Board Barnstable County
Brad Tracy, Tracy Volkswagen
Berkshire County
Brian Bedard, Bedard Brothers Auto Sales
Bristol County
Richard Mastria, Mastria Auto Group
Essex County
William DeLuca III, Woodworth Motors Don Sudbay, Sudbay Motors
Franklin County
Jay Dillon, Dillon Chevrolet
Hampden County
Jeb Balise, Balise Auto Group
Hampshire County
Bryan Burke, Burke Chevrolet
Middlesex County
Chris Connolly, Jr., Herb Connolly Motors Frank Hanenberger, MetroWest Subaru
Norfolk County
Jack Madden, Jr., Jack Madden Ford Charles Tufankjian, Toyota Scion of Braintree
Plymouth County
Christine Alicandro, Marty’s Buick GMC Isuzu
Suffolk County
Robert Boch, Expressway Toyota
Worcester County
Steven Sewell, Westboro Chrysler Dodge Ram Jeep Steve Salvadore, Salvadore Auto
Medium/Heavy-Duty Truck Dealer Director-at-Large [Open]
Immediate Past President [Open]
NADA Director
Scott Dube, Bill Dube Hyundai
Officers
President, Chris Connolly, Jr. Vice President, Steve Sewell Treasurer, Jack Madden, Jr. Clerk, Charles Tufankjian
Associate Members MSADA A ssociate M ember D irectory ACV Auctions Will Morris (860) 670-7867 ADESA Jack Neshe (508) 626-7000 Albin, Randall & Bennett Barton D. Haag (207) 772-1981 American Fidelity Assurance Co. Kathleen Weisenbach (402) 523-5945 America’s Auto Auction Boston Jim Lamb (781) 596-8500 Armatus Dealer Uplift Joe Jankowski (410) 391-5701 Auto Auction of New England Steven DeLuca (603) 437-5700 Automotive Search Group Howard Weisberg (508) 620-6300 Bank of America Merrill Lynch Dan Duda and Nancy Price (781) 534-8543 BCI Financial Corp. Timothy Rourke (203) 439-9400 Bellavia Blatt Leonard Bellavia (516) 873-3000 Bernstein Shur PA Ned Sackman (603) 623-8700 Broadway Equipment Company Fred Bauer (860) 798-5869 Burns & Levinson LLP Paul Marshall Harris (617) 345-3854 CDK Global Rob Steele (508) 564-1346 Chase Auto Ken Miller (508) 902-8908 Clifton Larson Allen Rick Parmelee (860) 982-9307 Coastal Outsourced Solutions Andrea Vieira (508) 979-4733 ComplyNet Adam Crowell (614) 634-8843 Construction Management & Builders, Inc. Nicole Mitsakis (781) 246-9400 Cooperative Systems Scott Spatz (860) 250-4965 Cox Automotive Ernest Lattimer (516) 547-2242 CVR John Alviggi (267) 419-3261 Dave Cantin Group Woody Woodward (401) 465-7000 DealerSafeGuardSolutions Doug Fusco (972) 740-8638 DealerShop Ken Grove (248) 444-6283 Brian Fleischman (716) 864-0379
DealerSocket Marco Suarez (877) 340-2677 Downey & Company Paul McGovern (781) 849-3100 DP Sales Distributors Andrew Prussack {631) 842-7549 Eastern Bank David Sawyer (617) 620-3484 Eastern Insurance Group John Berksza (508) 620-3349 EasyCare New England Greg Gomer (617) 967-0303 Enterprise Rent-A-Car Timothy Allard (602) 818-3607 Ethos Group, Inc. Drew Spring (617) 694-9761 F&I Direct Sean Wiita (508) 414-0706 Michelle Salas (508) 599-0081 F & I Resources Jason Bayko (508) 624-4344 Federated Insurance Matt Johnson (606) 923-6350 Fisher Phillips LLP John Donovan (404) 240-4236 Joe Ambash (617) 532-9320 Gulf State Financial Services Mike Sims (817) 689-1735 GW Marketing Services Gordon Wisbach (857) 404-0226 JM&A Jim Beauregard (508) 561-2951 John W. Furrh Associates Inc. Pamela Barr (508) 824-4939 Key Bank Mark Flibotte (617) 385-6232 KPA Abe Cohen (503) 902-6567 LocaliQ Automotive Jay Pelland (508) 626-4334 LotLinx Giovanna Scognemiglio (310) 526-1463 M & T Bank John Federici (508) 699-3576 Management Developers, Inc. Dale Boch (617) 312-2100 McWalter Volunteer Benefits Group Shawn Allen (617) 483-0359 Mid-State Insurance Agency James Pietro (508) 791-5566 Mintz Levin Kurt Steinkrauss (617) 542-6000 Murtha Cullina Thomas Vangel (617) 457-4000
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Nancy Phillips Associates, Inc. Nancy Phillips (603) 658-0004 NEAD Insurance Trust Charles Muise (781) 706-6944 Northeast Dealer Services Jim Schaffer (781) 255-6399 O’Connor & Drew, P.C. Kevin Carnes (617) 471-1120 Performance Management Group, Inc. Dale Ducasse (508) 393-1400 Piper Consulting Jim Piper (207) 754-0789 Pro-Vigil Sasha Lam-Plattes (408) 569-2385 Resources Management Group J. Gregory Hoffman (800) 761-4546 Reynolds & Reynolds Austin Ziske (802) 505-0016 Rinn Advisors John Corcoran (617) 480-6693 Robinson Donovan Madden & Barry, P.C. James F. Martin, Esq. (413) 732-2301 Rockland Trust Co. Joseph Herzog (508)-830-3241 Samet & Company John J. Czyzewski (617) 731-1222 Santander Bank Richard Anderson (401) 432-0749 Chris Peck (508) 314-1283 Schlossberg, LLC Michael O’Neil, Esq. (781) 848-5028 Service Credit Union Dave Pasternak (603) 812-8967 Shepherd & Goldstein CPA Ron Masiello (508) 757-3311 Southern Auto Auction Joe Derohanian (860) 292-7500 Sprague Energy Robert Savary (603) 430-7254 The Towne Law Firm P.C. James T. Towne, Jr. (518) 452-1800 TrueCar Pat Watson (803) 360-6094 Truist Michael Walsh (617) 345-6567 US Bank Vincent Gaglia (716) 649-0581 Wells Fargo Dealer Services Josh Tobin (508) 951-8334 Windwalker Herby Duverne (617) 797-9316 Zurich American Insurance Company Steven Megee (774) 210-0092
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The Roundup
Legislature Crawls to Holiday Break By Robert O’Koniewski, Esq. MSADA Executive Vice President rokoniewski@msada.org Follow us on Twitter • @MassAutoDealers
The two-year sessions of our state legislature include a number of dates dictated by the state constitution and the legislature’s own rules that are designed to ensure a flow of legislation with some imprimatur of legitimacy which signals to voters and the Commonwealth’s residents that they are doing their job. Lately, these dates and deadlines seem more aspirational than actual. For example, a new session starts on the first Wednesday of the odd year, with the previous session ending immediately the day before at midnight. This year, as you may recall in this column, our legislators needed to continue the 2019-2020 session by working beyond that midnight deadline to almost 4:00 a.m. of the first day of the new legislative session in order to try to finish matters that lingered through the Fall and past the holidays. Much still did not get done. Our returning legislators then had to squeeze in a catnap to welcome new colleagues and prepare for the 11:00 a.m. swearing in of the new legislature beginning that same day. Meeting the deadline for passing a budget for each new fiscal year also has proven to be problematic. Our state’s fiscal year begins on July 1 each year. Well before that date, the legislature should have already sent a budget to our governor so that he can review it, issue any line-item vetoes, and sign it in time for a smooth start to the fiscal year. Our state’s leadership has gone past this deadline for at least the last seven years, relying on temporary spending bills to keep the lights on and paychecks flowing to state employees. In fact, last year, FY20 was not put to bed until last December due to the fiscal uncertainties caused by the COVID-19 pandemic. In the odd year, the legislature needs to complete NOVEMBER 2021
Massachusetts Auto Dealer www.msada.org
work on controversial matters requiring roll calls by the Wednesday eight days before the Thanksgiving holiday (this year, November 17), thereafter relying on informal sessions with no roll calls through the holidays into the start of the new (even, election) year when a new set of formal sessions will begin. As we have documented previously, this second year of COVID-inspired government largesse is characterized by a multi-billion-dollar surplus to close out FY21 spending priorities and well over $5 billion sitting in state coffers, a direct result of the federal American Rescue Plan Act (ARPA) monies Congress has sent to the states as pandemic relief. The legislature was able to close out FY21 accounts while still managing to squirrel away $1.5 billion of the remaining surplus into escrow for disposition at a later date. The legislature also was challenged in meeting their own self-imposed deadline for appropriating the ARPA monies. Legislative leaders made an ARPA spending bill a major goal for completion before Thanksgiving. Remember that Gov. Charlie Baker originally filed a spending plan on June 30, a plan the legislature ignored and then embarked on a lengthy listening tour for several months. Although the House approved a plan in October to spend almost $4 billion, the Senate did not follow suit until early November. Due to the inability of a conference committee to resolve vast differences on a number of spending questions, nothing was placed before the governor by the November 17 deadline of formal sessions. If something is going to get done by the close of 2021, it would have to be taken up in an informal session, with a hope and a prayer no one stands up to object. To throw gasoline on this smoldering fiscal fire,
MSADA the legislature has operated under a rule since 1995 that any bill making or supplementing an appropriation for a fiscal year cannot be carried over to the next year. Because of their dilatory pace, the legislature may have to start the process anew beginning in January. Having gone past the November 17 deadline at a blistering crawl, all bets are off as to how this will resolve itself.
UI Relief Up in the Air
The two items the House and Senate had agreed upon at the start of the ARPA spending process were the commitment of $500 million for a bonus-pay program for low-income essential workers and a $500 million infusion into the state’s supposedly depleted unemployment insurance trust fund, providing some relief to employers tasked with rebuilding the fund through a new UI assessment on top of the usual quarterly charges. At the start of this process, readers may recall that the governor pushed for a $1 billion commitment of ARPA funds into the UI fund, a position that your association and other pro-business groups supported. The legislature obviously had other thoughts. As it turns out, during debate on an amendment offered by Senate Republican leader Bruce Tarr of Gloucester and Democrat Senator Diana DiZoglio of Methuen to boost the UI commitment from the $500 million earmark to $1 billion, Sen. Patricia Jehlen (D-Somerville), who was running point on the issue for Senate leadership, let slip (inadvertently?) that we probably do not need more than $500 million because there is $3 billion in the fund right now. Unbelievably, not one senator bothered to ask for a repeal of the new state UI assessment, which businesses will be paying for 20 years, if there is money already in the kitty to cover the deficit. The next day the Baker administration scrambled to figure just how much is actually in the fund and legislators were asked to explain the need for an assessment to collect monies from employers unnecessarily. As of this writing, even the state’s UI commission members are in the dark as to the facts of the matter, hoping to have an
answer by December 15. Again, a familiar refrain – stay tuned for the next chapter of this story.
State’s Green Goals in Jeopardy
In the Fall of 2019, Gov. Baker committed to achieving net-zero emissions by 2050, which included meeting the requirements of a 2016 clean energy law with aggressive goals for renewable energy sources, eliminating greenhouse gas emissions, and banning the sale by 2035 of gasoline-fueled vehicles. This month the Baker administration’s plans took a major hit, induced by political fallout on two fronts. First, Maine voters rejected on election day the New England Clean Energy Connect (NECEC) transmission project which would have brought hydro-electric power from Canada into Massachusetts by transmission lines constructed through Maine forests. With 60% of the vote, Maine voters adopted a policy that will ban the construction of high-impact electric transmission lines in the Upper Kennebec region of the state. According to Massachusetts officials, the project would have supplied about 17 percent of the state’s electricity demand and could have reduced electric bills here by 2%-4% each year under contracts already approved by the Massachusetts Department of Public Utilities. As a result of the referendum, the Maine Department of Environmental Protection, on November 23, suspended the license for the NECEC project. The decision presents a major roadblock for the Commonwealth’s ability to achieve its goals. The future of the project, being pushed by Central Maine Power Company, will now need to be resolved in the courts. Secondly, due to a lack of critical mass of support from the New England states and other states in the northeast corridor, Gov. Baker ended his support for the Transportation Climate Initiative (TCI). The program would have created a regional commitment to capping vehicle emissions and allowing fuel suppliers to purchase allowances for carbon dioxide those products would have emitted. The main www.msada.org
argument opponents used against the TCI was that it would substantially increase fuel costs for businesses and consumers, including a 5-17 cents per gallon hike in gasoline prices. Although the governor first started the TCI discussions two years ago with Connecticut, Delaware, Maryland, New Jersey, New York, North Carolina, Pennsylvania, Rhode Island, Vermont, Virginia, and Washington, D.C., ultimately only Massachusetts, Connecticut, Rhode Island, and Washington, D.C., signed on. However, Baker’s announcement to put the TCI to bed followed a statement from Connecticut Gov. Ned Lamont that he could not obtain the necessary legislative support to move forward. The state will not go lacking for financial resources in its climate fight, however. It will receive at least $10 billion from the infrastructure bill President Biden signed this month and there are the aforementioned ARPA funds still to be resolved in the House-Senate negotiations as well as those still sitting in escrow. For now, it is back to the drawing board as to where the Commonwealth will find all this renewable and clean energy to heat our homes in Winter, keep the AC going in Summer, and fuel all those new, shiny EVs our customers will buy.
2022 Auto Show, Dealer Summit & Charity Gala
MSADA’s 64th edition of the New England International Auto Show will run January 13-17, 2022, at the BCEC in South Boston. Dealers, their families, and key employees are invited to attend on Friday, January 14, our Annual Auto Show Charity Gala at the BCEC, from 5:00 p.m. to 10:00 p.m. Prior to the Gala we will conduct the Dealer Summit from 3:00 p.m. to 5:00 p.m., at which we will have several speakers discuss on-going events in our industry. Use the registration materials that have been emailed to you. Should you require any additional information, email Jean Fabrizio at jfabrizio@msada.org. t
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MSADA L EGISLATIVE S CORECARD
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NOVEMBER 2021
BILL#
SPONSOR
SUBJECT
S183 S239 H407
Sen Crighton Sen Pacheco Rep Hunt
Amendments to Ch. 93B, the auto dealer franchise law.
SUPPORT
Joint Committee on Consumer Protection held public hearing on July 19, 2021.
H365 H400
Rep Finn Rep Howitt
RTR Law amendments to fix Model Year start date and consumer notice.
SUPPORT
In the Joint Committee on Consumer Protection; no hearing scheduled yet.
H336 H361 S234
Rep Chan Rep Finn Sen O’Connor
Creates process to appeal improperly issued Class 1 license.
SUPPORT
Joint Committee on Consumer Protection held public hearing on July 19, 2021.
S180 H421
Sen Crighton Rep Lewis
Modernize on-line purchase process.
SUPPORT
Joint Committee on Consumer Protection held public hearing on July 19, 2021.
H345
Rep Cusack
Clarifies licensure to finance small loan contracts with negative equity.
SUPPORT
Joint Committee on Consumer Protection held public hearing on July 12, 2021.
S226
Sen Moore
Amends definition of heavy-duty trucks under RTR law.
SUPPORT
Joint Committee on Consumer Protection held public hearing on July 19, 2021.
S245 H470
Sen Velis Rep Walsh
Open safety recalls notifications.
OPPOSE
Joint Committee on Consumer Protection held public hearing on July 19, 2021.
H423
Rep Linsky
Allows an OEM to open a factoryowned store, without a dealer, if there is no same line-make dealer in the state. (The so-called “Tesla Exemption.”)
OPPOSE
Joint Committee on Consumer Protection held public hearing on July 19, 2021.
H1152 H1178 S711
Rep McMurtry Rep Phillips Sen Moore
Creates process to increase the insurance reimbursed labor rate paid to auto body
SUPPORT
Joint Committee on Financial Services held public hearing on September 15, 2021.
H1183 S657
Rep Puppolo Sen DiZoglio
Protects dealers from OEMs’ restrictions on selling non-OEM service contracts.
SUPPORT
Joint Committee on Financial Services held public hearing on September 15, 2021.
H1070 S719
Rep Driscoll Sen O’Connor
Creates administrative appeal process for vehicle owners to seek diminished value of damaged vehicle returned to vehicle owner.
SUPPORT
Joint Committee on Financial Services held public hearing on September 15, 2021.
S46 H142
Sen Creem Rep Vargas
Mass. Information Privacy Act
OPPOSE
Joint Committee on Advanced Information Technology held public hearing on October 13, 2021.
H3477 H3494 S2372
Rep Golden Rep Howitt Sen Rush
Creates statutory process for allowing temp tags for out-of-state sales.
SUPPORT
In the Joint Committee on Transportation; no hearing scheduled yet.
H3450
Rep Ehrlich
Mandates automatic shutoff for keyless start vehicles
OPPOSE
In the Joint Committee on Transportation; no hearing sheduled yet.
H2004
Rep Jones
Sleepy’s-related affirmative defense.
SUPPORT
Joint Committee on Labor and Workforce Development held public hearing on November 9, 2021.
H3321 H3368
Rep Hill Rep Roy
Promote sale of EVs.
SUPPORT
Joint Committee on Telecommunications, Utilities, and Energy held public hearing on July 28, 2021.
NOVEMBER 2021
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Massachusetts Auto Dealer www.msada.org
Troubleshooting
MSADA
FTC Approves Amendments to Safeguards Rule By Peter Brennan, Esq. MSADA Staff Attorney
Late last month, the Federal Trade Commission (FTC) announced its final amendments to the Standards for Safeguarding Customer Information, commonly known as the Safeguards Rule. As you may recall, these amendments were first proposed over two years ago and have been under consideration ever since a regulatory Sword of Damocles hanging over the heads of dealerships and other “financial institutions” covered by the Rule. The final amendments are more limited in scope than the original proposal, but will likely require additional compliance efforts and increased expenses for every dealership. Dealers should assess their compliance with the final amendments immediately, as some amendments may go into effect shortly after the publication of this column. While protecting customer information is of vital importance to every dealership, the original amendments proposed by the FTC would have added hundreds of thousands of dollars to every dealer’s bottom line. During the two-plus years that these amendments were under consideration, the FTC weighed industry feedback, including comments submitted by NADA in opposition to some of the more onerous proposals. NADA submitted for consideration the results of an independent third-party cost study stating that the cost for small dealerships to comply with the amendments as proposed would be $220,400 initially and $217,800 in annual costs, while midsize operations would pay $367,550 initially and $336,050 in annual costs. The financial hit to dealers will likely be mitigated based on the details of the Final Rule, but the
impact will vary depending on the dealership’s size and current compliance efforts. There is no blanket federal law or regulation regarding data privacy and protection, and different industries are regulated in a patchwork manner federally. Passage of the Gramm-Leach-Bliley Act (GLB) in 1999 first codified federal protections on the customer data of financial institutions. The Federal Trade Commission’s “Privacy Rule” (16 CFR 313) and “Safeguards Rule” (16 CFR 314) implement the provisions of GLB, and franchised new car dealers are subject to these Rules under GLB, as covered “financial institutions”, only in certain instances, such as assisting consumers in obtaining financing or leasing on new or used vehicles. The Safeguards Rule already requires dealerships that collect “nonpublic personal information (NPI)” from customers to take certain procedural and technical steps to protect this data to prevent access from non-authorized third parties. According to the FTC, dealerships will now also have to “explain their information sharing practices, specifically the administrative, technical, and physical safeguards the financial institutions use to access, collect, distribute, process, protect, store, use, transmit, dispose of, or otherwise handle customers’ secure information.” Some of these changes will take effect thirty days after publication in the Federal Register, while most of the Final Rule will go into effect one year after publication. The most time sensitive changes, those that will go into effect thirty days after publication in the Federal Register, “largely mirror” requirements in the existing Rule, according to the FTC. However, dealers will need to do their own assessment based on current practices at their business. The amendments that take effect on the earlier date will require dealerships to base their information security program on a periodic risk assessment and regular testing designed to detect attacks on the dealership’s information systems, and will require dealerships to modify their information security programs in accordance with these periwww.msada.org
odic risk assessments. You should ensure that you have these information security procedures in place immediately. One year after publication of the Final Rule, which is expected soon, dealerships will be required to designate a single qualified individual to oversee their information security program and report periodically to an organization’s board of directors. As first proposed in 2019, the amendments would have required every dealership, regardless of size, to employ a Chief Information Security Officer (CISO), defined in part by educational background, years of experience, and compensation. Hiring a CISO would have been a huge financial burden for many dealerships that may have brought the business little benefit in securing their customers’ data, and it appears that the industry’s lobbying efforts and common sense have prevailed. The additional requirements imposed on dealerships in the Final Rule are too numerous to detail here but include requirements to: draft a written “Risk Assessment”; implement “Access Controls”; perform data and systems inventory; adopt secure development practices; implement multi-factor authentication; and encrypt all customer data. Importantly, the Final Rule requires dealers to “encrypt all customer information, both in transit over external networks and at rest.” This requirement also extends to all vendors and others with access to dealership customer data. Financial institutions that collect information about fewer than 5,000 consumers are exempt from the written risk assessment, incident response plan, and annual reporting requirements. Dealers are encouraged to work with counsel or an information security professional to ensure compliance with the Final Rule before the amendments take effect. t If you have any questions regarding this column, please contact Robert O’Koniewski, MSADA Executive Vice President, at rokoniewski@msada.org or Peter Brennan, MSADA Staff Attorney, at pbrennan@ msada.org or by phone at (617) 451-1051.
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RACE TO THE FINISH COVER STORY
Joe Shaker By Stephanie Power
The Massachusetts automobile industry is full of movers and shakers. One shaker in particular was recently named Massachusetts TIME Dealer of the Year for 2022, an honor bestowed to someone Humble Beginnings not only operating a successful dealership, but, more importantly, Shaker’s grandfather, an immigrant from Lebanon who was demonstrating exceptional commitment to community service. honorably discharged from the U.S. Army for being underage Joe Shaker, 53, is co-owner of Shaker Auto Group and was nomduring WW1, began selling fruits and vegetables at the farmer’s inated by MSADA for the prestigious award. With six dealerships market in Waterbury, Connecticut, in the 1930s. in Connecticut and Massachusetts, Shaker is a third-generation “He had a propensity to fix cars,” Shaker said. “He started dealer with a heart for fostera gas station and then a service center ing growth in his employees’ and it grew from there.” lives, getting involved in the In 1998, Joe and his two brothers community, and having an and cousin bought the original Waeye for creative solutions to terbury dealership from his dad and industry dilemmas. uncle. They entered Massachusetts “I am a car dealer, a reguthat same year and presently operate lar person, who grew up in a Wellesley Mazda in Wellesley and tough area, who took a local North Shore Mazda in Danvers. business and thought MassaShaker Auto Group represents chusetts was a spot to grow,” Chrysler, Dodge, Hyundai, Jeep, MazShaker said. “We employed da, Ford, Lincoln and Ram. Growthe same principles here that ing up in Waterbury, Connecticut, a we learned in Connecticut. diverse city, taught Shaker and his We want to provide a great partners the importance of respecting “We want to provide a great experience for our employpeople from all walks of life and conexperience for our employees and ees and customers, and, if tributing to communities that are unwe see things in the way, we der-resourced. customers, and, if we see things in try to fix them.” “People talk about diversity and inthe way, we try to fix them.” NOVEMBER 2021
Massachusetts Auto Dealer www.msada.org
MSADA clusion. We do not like to talk about it, we do it,” he said. “It is important to us, and it always has been.” Supporting underserved youth and young adults is the main focus of Shaker’s philanthropic efforts. He supports the Shamrock Foundation and the Play Ball Foundation, which provides after school team sports for middle schoolers. Inspired by a close friend whose son is blind, Shaker became a Corporator at the Perkins School for the Blind in Watertown and has been involved with the school since 2007. He noted that Helen Keller studied at Perkins from 1888 to 1892. Shaker served on the board of trustees at the Benjamin Frank-
lin Institute of Technology from 2013 to 2020, a technical college in Boston with a student population that includes 74 percent students-of-color with an average household income of $23,800. According
to Shaker, students see an 83 percent job placement rate with an average salary of $42,000, almost doubling their household income after graduating. Shaker has worked to connect the Massachusetts dealer base with good potential employees coming from BFIT. “There is no school for what we do as dealers,” Shaker said. “On the business side, it is tough because there is no feeding system. The silver lining is an opportunity to attract an incredibly diverse population. If you just want to come in and work hard, we will train you.” Mitchell Harris, Director of Operations at Shaker Auto Group, said he was once that 20-year-old with no sales experience to whom Shaker gave a chance. “I had no experience at all, and he gave me every opportunity,” Harris said. “He has seen me get married, have kids, have a house. More important than making money is the relationship he has with people; it’s taking care of people.” Harris, 34, said Shaker has a rare quality as an executive of being approachable and invested in the work-life balance of his employees. “I think that is what he sees as success, when everyone around him is successful,” Harris said. “Absolutely I share this philosophy. We have a few people in sales who, this month, are moving into their first homes, and I find that very exciting.” Shaker is passionate about seeing his employees thrive. “Our team members make up an incred-
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RACE DEALER TO THE OF FINISH TIME THE YEAR
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husband’s nomination is not surprising because he puts his heart and soul into his businesses and foundations. “The list kind of goes on and on because that is who he is. He does not want to just hand over a check. He gives his time, as he truly loves helping people. It is just in his nature,” she said. Embracing Technology The Shakers have three children, Madison, 19, Adriana, 17, Shaker has developed two technology platforms that serve to and Matthew, 22. connect and solve what Shaker calls the “pain points” of trust “Frankly, I am just flattered,” Shaker said. “I am a lowkey and transparency among customers, dealers, service NOVEMBER - 06 - 2019 AUTO DEALERSHIP MANAGEMENT EDITON and auto AUTOTECHOUTLOOK.COM person when it comes to my civic activities. I am honored that workers. people thought of me. It is not my style, but I will show up.” Top 10 Auto Dealership Management Solution Knowing where he comes from is lifelong guiding advice for Shaker, who grew up caddying at a golf club. He remembered Providers – 2019 a golfer who saw something ambitious in him and told him one n a technology-driven world, automotive dealers are used to view and assess sales reports based on different often overwhelmed with technology. There arises factors such as sales numbers, financial figures, etc. It day he would be successful. a dire need to invest in a technologically advanced can also be used to keep track of employee sale targets “How can you expect to go anywhere when you cannot redealer management system to provide customers and accordingly, create performance reports. Businesses today are being constantly challenged with technologies that save time, offer convenience, and above all, luxury. by a decrease in turnaround time, stringent quality member where you came from?” the man told a young Shaker, By leveraging the potential of virtual reality, it is measures, audit compliances, and increasing possible to acquaint customers with the look and feel of globalization. It is, therefore, imperative that they who never forgot the quote. “Do not forget your roots,” he said. car interiors by offering a 360-degree experience. Auto structure their processes to align with market “Do not forget the bag you carried in 80-degree weather. Do not dealers can also rent and lease vehicles on the website opportunities and adopt the right technology to serve after making financial approvals online. With a DMS, a their customers better and gain a competitive edge. forget the people you meet along the way and how they treated dealership can automate quite a few functions to optimize This edition of Auto Tech Outlook features companies and simplify them. Tasks like workflow management, that are at the forefront of delivering auto dealership you.” task reminders, report generation, invoice generation, management solutions. Auto Tech Outlook’s editorial insurance and tax calculations, are performed by a board has assessed and shortlisted some of the most Shaker is one of 47 dealers nominated across the country who DMS. It removes the need for human intervention and prominent organizations in the industry. We present to reduces the likelihood of errors in the absence of manual you – “Top 10 Auto Dealership Management Solution will be honored at the 105th annual National Automobile Dealibly diverse group,” he said. “Building a successful business is one thing but watching your team members grow is unbelievable. I wish I could express how that feels.”
I
processes. The reporting and analytics modules can be
TruVideo
Company:
|8 |
JULY 2014
Management:
Joe Shaker, “I am honored Co-Founder that people Description: Website: thought of Offers a video-first communication truvideo.com platform that harbors transparency and me. It is not trust between auto dealerships, repair shops, and car resellers my style, but I will show up.” TruVideo
The annual listing of 10 companies that are at the forefront of providing dealership management software solutions and transforming businesses
CIOReview
Providers – 2019”.
CarDay, launched in 1999, created an online platform where people could buy and sell used cars through dealers. TruVideo is a mobile and web app that lets technicians and dealers share diagnostic and sales videos directly with customers. “Customers get to talk to the doctor, not the receptionist,” Shaker said of TruVideo. “Results have been incredible. Customers are actually spending more and having a better experience because they can see and understand what is needed. We are not trying to change the way we do business, just the way we communicate.” TruVideo has grown 200 percent in the last three years, and, according to Shaker, just partnered with the largest software company in the world, CDK Global. Despite his achievements and involvement, Shaker is not one to seek the spotlight. His wife of 25 years, Susan Shaker, said her NOVEMBER 2021
ers Association show. The ceremony is scheduled for March 11, 2022, in Las Vegas. MSADA Executive Vice President Robert O’Koniewski said Shaker was an easy choice for the Association’s nominee. “One of my all-time favorite football coaches, Hank Stram, used to exhort his players with, ‘Keep on matriculating the ball down the field,’” O’Koniewski said. “There are people, less fortunate than ourselves, who face all kinds of headwinds in their lives. People oftentimes just need access to the necessary tools, guidance, and encouragement to be successful. “Joe Shaker, with his infectious positive energy I have come to know over the years, has committed himself to improving the lot of those around him every day, so that his community, his employees, and those less fortunate can turn those head winds into tail winds and keep matriculating the ball down the field in a positive direction throughout their lives.” t
Massachusetts Auto Dealer www.msada.org
MSADA
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BELAVIA AD
www.msada.org
Massachusetts Auto Dealer
AUGUST 2021
18
NEWS NEWS the NEWSfrom from Around from Around Around the Horn Horn NEWS
NEWS the Horn RAYNHAM
Advantage Truck Group Celebrates Opening of New Facility Local businesses, elected officials, industry executives and community leaders gathered on October 15 to celebrate the opening of Advantage Truck Group’s new full-service dealership in Raynham, a facility that will expand support for businesses and municipalities throughout Southeastern Massachusetts, Cape Cod, and the Islands, and create 100 new jobs in the region. The company’s eighth location in its Daimler Trucks North America New England dealer network and its third in Massachusetts, ATG-Raynham reflects its commitment to ensure the
tential of our regional economy in Southeastern Massachusetts. I look forward to the new jobs the ATG dealership will bring to the local community and convey my sincere gratitude to ATG President and CEO Kevin Holmes and all those who have contributed to this impressive initiative.” The only facility in Southeastern Massachusetts authorized for Freightliner and Western Star trucks sales, service, and parts, ATG-Raynham also offers maintenance and repair services for all brands of heavy-duty commercial and vocational trucks from its 18 climate-controlled bays that feature air conditioning and in-floor radiant heat. Customer support services include on-call access for breakdown assistance and a multi-million-dollar parts inventory with daily parts deliveries throughout the region, including to Cape Cod. NEEDHAM
Muzi Ford and Chevrolet Dealerships Announce Closure
highest-level of service for its customers and support continued growth throughout the region. “Our aim is to support our customers, to be there when they need us. This facility is a key part of that goal, allowing us to expand the services we offer to meet the needs of hundreds of businesses and municipalities in the region,” said ATG President and CEO Kevin Holmes. “Today we recognize the support from so many people who contributed to this facility and to our growth, especially our employees. It is their hard work, passion, and dedication to our customers that makes a difference for ATG every day.” ATG-Raynham’s grand opening celebration featured tours of the 32,000-square-foot facility, remarks from Margaret Laforest, Regional Director for the Massachusetts Office of Business Development, and the Dean of the Massachusetts Senate, Sen. Marc R. Pacheco (D-Taunton). “I am very pleased that ATG has chosen Raynham Woods Industrial Park as the location for its new full-service dealership,” said Senator Pacheco. “With the ability to provide sales, service, and parts for heavy-duty commercial vehicles, this comprehensive facility is a true testament to the significant progress and poNOVEMBER 2021
Muzi Ford announced on its website that the Ford dealership and neighboring Chevrolet store will be closing after 90 years in business. “It has been an honor to serve this wonderful community,” the statement read. “Thank you to all our customers for your support and patronage over the years.” Needham Town Meeting members recently approved a pair of zoning articles that updated allowable uses for the dealerships’ property earlier this year, the Needham Times reported. The zoning changes encourage commercial office space and small retail locations, and would allow for a 240-unit housing development. The new rules do not allow warehouses to be developed on the property. BOSTON
GPB Reaches Settlement in Rosenberg Litigation GPB Capital Holdings, the former majority owner of Prime Automotive Group, has agreed to pay former Prime CEO David Rosenberg $30 million to settle a proceeding filed by Rosenberg in 2019. The settlement will take place within a few days of the GPB’s planned sale of a number of Prime dealerships to Group 1 Automotive, Inc. In July 2019, Rosenberg and Rosenberg’s family trust filed proceedings in Massachusetts Superior Court. He claimed that GPB failed to pay them after exercising the option to sell the shares of the dealer group in April 2019. The proceedings also alleged that GPB, an alternative asset management company, was retaliating against Rosenberg for calling attention to alleged misconduct at GPB.
Massachusetts Auto Dealer www.msada.org
MSADA
NEWS from Around the Horn
According to a third quarter report of the GPB Automotive Portfolio Limited Partnership filed with the US Securities and Exchange Commission, GPB and Rosenberg “agreed to a complete and final settlement of the proceedings and arbitration.” The GPB Automotive Portfolio is a holding company that owns all but one of the Prime dealerships. “Once the settlement was fully implemented, the parties submitted joint provisions, dismissed the proceedings in Massachusetts at a disadvantage, and withdrew from arbitration,” said the SEC Filing. Other terms of the contract have not been disclosed. BOSTON
BBJ Publishes MSADA Op-Ed The Boston Business Journal recently published an editorial by MSADA Executive Vice President Robert O’Koniewski that places local focus on the international microchip shortage and vehicle supply disruptions and what they mean for the Commonwealth’s bottom line. “The average Massachusetts new-car dealer has a 10-day supply of cars on hand, whereas in a typical year, a dealership would carry six times that,” O’Koniewski writes. “The impact of this shortage on the state economy, and ultimately state tax collections, is real: one out of every five retail dollars spent across Massachusetts — 20% of the retail economy — comes from a new car sale.” The full column is available at www.bostonbusinessjournal. com. WEST SPRINGFIELD
Alpacas Explore Audi Dealership A herd of alpacas found their way onto Audi West Springfield just before Thanksgiving, wandering around until a group of
good Samaritans helped them find their way onto their owner’s truck for a trip back home. t www.msada.org
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Information Security
‘The Password is…’
A Brief History of, and Best Practices for, Today’s Passwords
By Jeff Harms OCD Tech Those of us of a certain age may remember a television game show called “Password.” The goal of the game was to guess the “Password” using a one-word clue given by a contestant. A collection of passwords would then lead the contestant to guess the puzzle affiliated with the passwords to win the game. In a way this game is still played today, although the clues are limitless and the attempts are never-ending. The hacker’s goal is to infiltrate your network and discover what “puzzles” are available. When did the use of passwords begin? By many accounts, the use of a password began right here in Massachusetts, at the MIT-led Compatible Time-Sharing System (CTSS) project. Fernando Corbato, the person who shepherded the project in the early 1960s, needed a way to allow multiple users to save private files on multiple terminals. Thus, a password for each individual user was created for streamlining access. Ironically, the first hacking of passwords also may have occurred on the CTSS project in 1962, when an authorized user located and printed out his co-workers passwords, which he then used for more network computing time (the time was originally assigned to his co-workers). Over the years, passwords were not just used on computer mainframes and networks. In the 1970s, many telephone networks were hacked using social engineering and an unrelenting curiosity to NOVEMBER 2021
determine how the network functioned and what data was stored. Many long-distance calls were made at no cost to the hacker (long-distance calls used to be the primary revenue source for phone companies), so the loss was real. In fact, wellknown IT Consultant and former hacker Kevin Mitnick literally wrote the book on how he hacked numerous networking and phone systems in the 1970s and 1980s. The methods Kevin used then unfortunately still work today. The effective use of a proper password today is even more important than in the 1960s, ‘70s or ‘80s. Data is the world’s greatest resource, and hackers will use any method necessary to gain access to it. The most common and effective route remains phishing campaigns. These are emails sent to your employees that look extremely similar to everyday emails they already receive, but they are embedded with attractive links to click or attachments to open. Doing so, however, may provide a direct path for the hacker into your network. Another source of passwords is not as evident or even current. There are sources on the internet that find and post thousands of your old passwords. The hackers then use those old passwords within other applications in your name. While using the same password across multiple applications (both work and private) is easy and convenient, it makes the hacker’s job easy and convenient as well. So what is the big deal if you are hacked? You quickly change your password, ensure you did not lose any data, and you are all set, right? Wrong. In fact, a violation of the Commonwealth of Massachusetts law may have occurred. As Michael Hammond, Principal, OCD Tech recently stated at the Connecticut Automobile Retailers Association seminar, “Unencrypted personal information of
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Massachusetts’ residents (either customers or employees) leaving your network is a violation of Massachusetts law per 201 CMR 17.” Not only is publication of your data breach a public relations nightmare, you may now also have to answer criminal complaints. The best protection against these threats is a good offense and plan. First, whenever possible, utilize Two-Factor Authentication (another layer of security with additional login credentials required). With more and more employees having the ability to work from home, this process provides another layer of protection for your network. Second, have unique passwords required for each business application, and ensure the employees do not use the same passwords used for their home or social media accounts. Longer passwords are encouraged, but even better are passwords that are a full sentence. Third, provide phishing campaign training to your staff. Ensure they know what to look for and what to avoid. When in doubt, do not click on any links or attachments, and ask your IT staff to review the email first. The threats to your business and network are constant, but training and preventative instruction and maintenance can go a long way to reducing those threats. MSADA supports dealers’ IT compliance as part of its compliance assitance program. Contact Michael Hammond at mhammond@ocd.com for more information. t Jeff Harms is a Senior IT Security Analyst at OCD Tech, the IT Audit & Security Division of O’Connor & Drew, P.C., one of the most well-respected regional accounting, tax, business and IT consulting firms in New England.
MSADA
LEGAL
Avoiding Legal Fear With Your Holiday By Joseph W. Ambash, Jeffrey A. Fritz, and Joshua Nadreau of Fisher Phillips, LLC The 2021 holiday season is fast approaching, and, thanks to increased vaccination rates, so is the office holiday party. For dealerships, this return to normalcy brings with it more potential pitfalls than presents in Santa’s sleigh. This month we highlight a few legal issues dealerships can plan around (or avoid entirely) when hosting their holiday parties.
In-person, virtual, or hybrid? The first question on any party-planner’s to-do list is probably whether to hold an in-person event or host one virtually (nearly everyone seems to agree hybrid parties do not work well). For dealerships with high vaccination rates, in-person events present minimal risk, but COVID-19 precautions are a must. If possible, host the event outside, avoid buffet-style dining options, and have hand-sanitizer at the ready. You are free to require vaccination (or a negative test) to attend as well as encourage mask wearing when not eating or drinking, too.
Avoid Overserving those Holiday ‘Spirits’ Prior to the pandemic, whether and how to sponsor a corporate event with alcohol was the biggest issue for dealerships hosting a holiday party. With the return of in-person parties this year, this issue returns to the fore. Serving alcohol presents a number of issues for employers. If employees (or their guests) become intoxicated, only bad things can follow—dealerships can be responsible for DUI-related incidents, harassment (more on that below), and other misconduct. If alcohol is served, management should designate at least one sober employee to monitor alcohol consumption. Dealerships are encouraged to use a drink ticket system to limit the number of drinks served to each employee or have a cash bar. In either case, the bar should close at least an hour prior
to the end of the event. Other useful suggestions include complimentary Lyft or Uber rides to and from the venue, as well as serving coffee and water throughout the event.
Harassment and Discrimination Claims for sexual harassment and discrimination continue to increase year-overyear. One source of these claims is holiday parties, where employees sometimes feel like the typical workplace rules do not apply. Ideally, hosting a refresher harassment training before the holiday party would be a good way to minimize inappropriate behavior. Other suggestions include inviting employees to bring their spouse or partner with them, which should increase accountability. Likewise, avoid traditions such as hanging mistletoe or other activities that encourage inappropriate conduct. While most parties end without incident, should you receive a complaint, make sure it is investigated promptly and impose discipline where warranted. Another source of problems is in the context of religious discrimination. While employers have likely learned a lot about their duties to accommodate religious practices in the context of vaccine mandates, holiday parties are another source of potential liability. Dealerships should keep the festivities neutral, using “holiday party” instead of Christmas party and making it clear that all are welcome, regardless of religious practices.
especially for non-exempt employees. This avoids the need to pay employees for their time at the party. Further, an entirely voluntary holiday party absolves employers from workers’ compensation liability, too. In the event that your party is mandatory, make sure that all non-exempt employees are paid for their time and that overtime is paid for any hours in that workweek over 40. Holiday gifts and bonuses may also impact overtime compensation. As a general rule, any compensation received from an employer needs to be included in that employee’s “regular rate” for purposes of overtime. However, there is a carve out for discretionary bonuses. In this context, “discretionary” means the employer retains the authority to decide both the amount of the bonus and whether it is paid at all. Keeping the amounts of any holiday gifts or bonuses low and maintaining ultimate discretion over whether to provide them or not should permit employers to avoid including these payments in the employee’s regular rate.
Spread the Cheer
Keep the Wage and Hour Grinch Away
Despite their risks, holiday parties are a great way to recognize employees for their hard work over the past year and to boost morale going into the next year. When done right, both employers and employees will have a great time and build camaraderie. With a little planning, your holiday party can be a stress-free way to wrap up the year. From your friends at Fisher & Phillips, we wish you a festive holiday season and a happy new year! t
As dealerships throughout the Commonwealth continue to deal with the fallout from the Sleepy’s decision, wage and hour issues are on the minds of dealership management everywhere. Holiday parties present two potential wage and hour issues worth considering. First, attendance at the holiday party should be entirely voluntary,
Joe Ambash, Jeff Fritz, and Josh Nadreau are Partners in the Boston office of 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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Massachusetts Auto Dealer
NOVEMBER 2021
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OCTOBER 2021
Patrick Manzi
NADA Senior Economist
Boyi Xu
Economist
New light-vehicle sales in October 2021 saw their first monthto-month gain since April. The October SAAR totaled 13 million units, down 20.8% from October 2020 but up 6.3% from September 2021. October sales began with the lowest inventory levels on record, at 972,000 units, and the low inventory continues to keep sales rates below current market demand. We do not expect
NOVEMBER 2021
that October’s month-end inventory levels will show significant change from September. In this tight market, OEMs continue to prioritize retail deliveries over fleet deliveries. According to J.D. Power, fleet sales are expected to account for just 13% of new-vehicle sales in October. t
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MSADA
MARKET BEAT
www.msada.org
Massachusetts Auto Dealer
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AIADA Brief
MSADA MSADA
The Big Picture
In discussion about international nameplates, keep these numbers in mind
By Cody Lusk AIADA President & CEO
When you do anything day after day, it is easy to become immersed in the minutiae of your work. That is true of association heads like myself and, I imagine, for dealers as well. Occasionally it can be helpful to step back from the spreadsheets and legislative squabbles to remind ourselves of what we are fighting for as an industry – and why international nameplate dealers are so crucial to our communities and our economy. By examining the big picture – the nation-wide impact international nameplate stores have on our country – we are prompted to work harder to defend ourselves against overreaching policies and provisions, such as the $4,500 UAW-only tax credit currently being debated on Capitol Hill. That is why AIADA, along with Autos Drive America, releases an annual economic impact report cataloging all of the many ways our industry breathes life into the American economy. Some of the numbers we shared in this year’s report were truly astounding. The success of international automakers and dealers in the U.S. was evident in the 55 percent share of the market they held in 2020. In total, they logged sales of 7.8 million vehicles to U.S. consumers in a challenging year of lockdowns and economic upheaval. Despite a turbulent year, 9,400 NOVEMBER 2021
“International automakers have invested more than $82 billion in their U.S. operations in the years since NAFTA took effect.” dealership franchises supplied stable, well-paying jobs to 542,000 Americans. Those jobs represent a $35.3 billion payroll nation-wide. Our brands are similarly deeply invested in this country. Companies like Honda, BMW, Toyota, and more operate 31 manufacturing facilities across 12 states. These plants produced 4 million vehicles in 2020, accounting for 46 percent of all U.S. vehicle production. Over the last 25 years, these brands have increased their U.S. production volume by nearly 82 percent. And, more than just serving as an assembly point for the vehicles they sell in the U.S. and export abroad, international automakers are supporting American suppliers with $118 billion worth of purchases in 2020. Behind all of these numbers is global trade. Trade continues to be a crucial factor in the long-term ability of international auto brands to maintain a significant economic footprint in the U.S. Trade agreements like NAFTA and now USMCA have provided a favorable environment for automakers to build plants to
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supply vehicles for U.S. buyers, as well as markets abroad. In fact, international automakers have invested more than $82 billion in their U.S. operations in the years since NAFTA took effect, resulting in 2.6 more vehicles built in 2020 than those built in 1993. International brands logged $22 billion in exports in 2020, totaling 650,000 vehicles that were sent to 135 countries and territories. Forty-three percent of these exports were to U.S. free trade agreement partners proving, once again, that free trade is the backbone of our industry and worthy of our continued energetic protection in Washington, D.C. Without it, conditions would be far less favorable for international brands to create and export millions of vehicles to our trading partners or to utilize American talent to build the same vehicles Americans love to drive. I encourage you to see our industry from this same big picture perspective by reading the full report yourself at www. AIADA.org/report. t
MSADA
TRUCK CORNER
ATD Joins Partners for a Zero Emission Vehicle Future We all want a cleaner and more sustainable tomorrow
By Steve Bassett Chairman, American Truck Dealers Steve
is
the
dealer
General Truck Sales in Muncie, Indiana. He also has locations in Indianapolis, I ndiana , and T oledo , O hio . H e sells V olvo , Isuzu, H ino, and M ack trucks. principal
of
For quite some time, America’s truck dealers have been working hard toward a cleaner and more sustainable commercial transportation future. But we all know that this reality depends on sensible policies and our industry working towards a common goal when possible. In the spirit of progress, I am proud of the decision ATD has made to officially join the Partners for a Zero Emission Vehicle Future, which includes OEMs and the allied industry. We cannot change the future on our own. So we joined this coalition with industry, environmental, and outside business organizations that are committed to reducing transportation emissions and who support the market transition to heavy-duty zero-emission vehicles (ZEVs). We have proudly partnered with industry groups like the Truck and Engine Manufacturers Association, the Truck Renting and Leasing Association, the Association for the Work Truck Industry, and several others. ATD has signed a letter that highlights our industry’s past efforts to work collaboratively with regulatory agencies to reduce emissions over the past decade. Moreover, we have flagged that the Environmental Protection Agency’s pending Clean Trucks Rule could significantly disrupt the U.S. trucking marketplace and delay the country’s transition to ZEVs if the agency moves too far and too fast with its mandates. This is one of the current issues that has brought the industry together on the same side. In fact, on October 25, ATD came together with others to meet with EPA Administrator Michael Regan in Nashville. ATD was represented by Kenworth line rep and former ATD Chairwoman Jodie Teuton, who currently serves on NADA’s Regulatory Committee. Also in attendance were the American Trucking Associations, Cummins Inc., Daimler Trucks North America, Navistar, PACCAR, and Volvo Group North America. Jodie took the opportunity to raise concerns about the EPA’s recent proposal, and how it could result in a pre-buy scenario that would create market instability and adversely impact local dealer jobs. www.msada.org
We all want a cleaner and more sustainable future, but mandates must be practical. New programs must ensure confidence among fleets so our customers will continue to buy and lease the newest, safest, and most fuel-efficient trucks on the market. Our work together shows how OEMs, engine manufacturers, allied associations, and dealers everywhere can work well together on the same issue. Stay tuned as ATD continues to engage on this front!
Sen. Mitt Romney Visits Utah Truck Dealership U.S. Senator and former Massachusetts Governor Mitt Romney (R-Utah) visited Kenworth Sales Company in Salt Lake City for a two-hour visit in November, including a roundtable discussion about workforce issues and technician recruitment and training followed by a facility tour led by dealer principal and former ATD Chairman Kyle Treadway. Treadway highlighted that, at present, there is a nationwide shortage of about 80,000 diesel technicians and that apprentices typically make up about 25% of his company’s workforce. During Sen. Romney’s dealership tour, he spoke with two apprentice technicians and met local students participating in a technician shadow program offering them the opportunity to see what a dealership service career would look like. Treadway also highlighted the challenges associated with technician training for Sen. Romney, as well as underscored the growing interest in electric trucks, electric vehicle charging infrastructure, and the current supply chain constraints that dealers are facing on new trucks and parts. If you are interested in hosting your local Congressman or Senator at your dealership, please contact Patrick Calpin, NADA/ATD director of grassroots advocacy, at pcalpin@nada.org or (202) 547-5500. t
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NADA Update
By Scott Dube
Leading the Charge Scott Dube, President of Bill Dube Hyundai and MSADA Immediate Past President, represents NADA’s Massachusetts members on the NADA Board of Directors. He can be reached at scott@dubecars.com. NADA Show 2022 will be back in Las Vegas, March 10– 13, and it confirms what we have known all along: We are better together! NADA recently polled our membership across the country, asking their top reason for attending #NADASHOW every year, and respondents chose networking! Other motivators are the stellar education, franchise meetings, and the expo. Register to join us, in person, at the auto industry event of the year at www.nadashow.com. You will not want to miss these four days of innovation, education and (re-)connecting with the industry’s top performers, decision-makers, and influencers. Prior attendees shared their feedback, including: • “My experience at the NADA Show was excellent. The workshops I attended were very informative and very well presented. The [expo] was the highlight for me; there was a never-ending smorgasbord of different products, ideas, and displays that I found highly informative.” • “The workshops I attended were excellent. The expo is always interesting with new ideas and options.” • “The speakers were excellent, and they had good info to get out to the dealers.” • “I really enjoyed it and learned a lot. Look forward to next year…” In fact, 96% of 2020 attendees reported they had a positive experience, and you can, too! Please do not hesitate to reach out to me with any questions about logistics or what the event has in store.
NADA Foundation Gives $1 Million+ to Dealership Employees After Hurricane Ida In late August, deadly Category 4 Hurricane Ida left devastation in Louisiana before moving to the Northeast coast of the United States, including New Jersey. Thousands of residents were displaced, many losing power for days or weeks, and businesses in the storm’s wake, including dealerNOVEMBER 2021
ships, were damaged or destroyed. The NADA Foundation’s Emergency Relief Fund (ERF) immediately mobilized to help their own, the employees working in dealerships whose lives were disrupted by the storm. In November, the ERF hit a major milestone in delivering relief to dealership employees impacted by Hurricane Ida. More than $1 million has been dispersed to over 1,100 dealership families working to rebuild after the catastrophic storm. “This milestone not only marks an important day for the NADA Foundation, but also highlights the donors who make Emergency Relief Fund grants possible,” said Foundation chairwoman Annette Sykora. “I am honored to be part of an organization that has supported so many of our own employees with financial assistance needed during lifechanging tragedies.” “This is the kind of thing that makes me so proud to be a car dealer,” said NADA chairman Paul Walser. “Auto dealers I know across this country are very engaged in their communities and what happens. When events like Hurricane Ida happen, car dealers all over the country rally to help and support our brothers and sisters working in dealerships.” For more than a decade, the Fund has helped dealership employees and their families weather all kinds of natural disasters and tragedies, from Hurricanes Katrina and Harvey to wildfires, tornadoes, and floods. The ERF offers affected dealership employees grants of up to $1,500 to help with damages and defray costs before their insurance payouts are available. This aid often allows families who have lost everything to buy food, shelter, diapers, and other basic needs during an uncertain, and likely most tragic time, in their lives. Since its inception in 1992, the Emergency Relief Fund has helped 13,000 dealership employees with grants totaling nearly $10 million.
Consumers Say They Want Dealers to Be a Big Part of Their EV Journey. We Should Listen. Mike Stanton, NADA President and CEO
In the coming years, we will see a phenomenal uptick in the number and type of battery electric cars and trucks that are purpose-built for a multitude of American car buyers and widely available for sale across the country. With all of the buzz about EVs, including pledges from just about every automaker to transition their fleets to electric as quickly as possible, you would be forgiven for thinking that day has already arrived. But of course it has not – not yet.
Massachusetts Auto Dealer www.msada.org
MSADA Make no mistake; we are well on our way to a much more electrified transportation future, and that is a great thing. But while EV sales have grown considerably just within the last year, they still make up a very small percentage of overall new vehicle sales. Consumers continue to opt for ICE vehicles with little hesitation, and there are good reasons for that. Still, far too little of our analysis of low EV sales focuses on the product side of the equation – or the historic lack thereof, in this case. Consider this: At the end of 2020, automakers collectively offered 206 different makes and models of gas-powered cars and trucks for sale in the U.S. The number of models of battery-electric vehicles available for sale at the end of 2020? Eleven. It gets worse the more you break it down. Full-size pickups made up 10% of new-car sales in 2020. The number of ICE models available in that segment was six, compared to zero powered by batteries. Midsize/large cars accounted for 12% of 2020 new-vehicle sales. There were 20 different ICE-powered midsize/large car models available, versus – again – zero powered by electricity. Compact and midsize SUVs made up by far the largest share of vehicle sales in 2020 – a combined 35%. Consumers had the choice of 18 models of compact SUVs and 21 models of midsize SUVs with internal-combustion engines – and a grand total of two models of BEVs between these two segments. Simply put, one of the big reasons consumers are not yet scooping up EVs in bigger numbers is because, up to now, we have not given them very much product from which to choose. That is changing, and changing very rapidly. But as we gear up for the influx of new EVs, we run the risk of making another faulty assumption – this time, about what it will take to get mass-market car buyers to feel comfortable and confident about buying their first EV. There is a sentiment out there that because the most successful EV automaker ever – Tesla – has chosen to utilize direct sales instead of a franchised dealer model, that we must employ the direct sales model if want to convert more and more Americans to electric drivetrains. After all, the vast majority of EVs on the road today are Teslas, so it stands to reason that future EV buyers will need to be offered the Tesla experience in order to lure them away from ICE.
The problem is, nobody bothered to ask those future EV buyers what type of sales and service experience they wanted to have. That is, until Escalent asked. Escalent is a renowned human behavior and analytics advisory firm with deep ties to the U.S. auto industry. Recently, Escalent completed a landmark research project called “EVForward,” which is the largest and most comprehensive study ever conducted of future EV buyers. More than 20,000 legitimate EV intenders and early EV adopters were asked to provide detailed feedback on how they wanted to learn about and experience EVs, how they wanted to purchase EVs, how they wanted to have those EVs serviced, and what kind of vehicles and features they need to see in order to make the switch to electric. As it turns out, the assumption that future EV buyers want the Tesla direct-sales model is just flat wrong. Escalent presented these future EV buyers with a de-branded version of the Tesla sales model and had them respond to it. Only 20% preferred the Tesla approach; 23% were neutral, and a full 57% chose the current dealership model. To take this one step further, when Escalent identified the current Tesla owners and asked them what they preferred, only 54% of Tesla owners chose the Tesla approach to selling vehicles. Escalent also found quite strong preferences for doing many functions of an EV purchase, including test driving, becoming educated on the vehicle and charging options, completing the transaction, and getting the vehicle serviced – in person. In a very real way, Escalent revealed that one of the reasons Tesla’s experiment with selling direct worked was only because the company just never gave their customers any other choice. And, of course, Tesla enjoys a brand attraction and customer base that is on a different plane than most other automakers. But now that someone has taken the time to ask consumers what they actually want, it is quite clear that the direct sales model is not the right approach. And when 20,000 future EV buyers are saying that they very much want – in fact, demand – for dealerships be a big part of their EV purchase experience, OEMs should embrace their franchised dealer network as the competitive advantage it is. Dealers are all-in on electrification of the fleet and absolutely essential to widespread EV adoption. Just ask our customers. t
As it turns out, the assumption that future EV buyers want the Tesla direct-sales model is just flat wrong.
www.msada.org
Massachusetts Auto Dealer
NOVEMBER 2021
27
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