January 2015 MSADA Auto Dealer

January 2015 • Vol. 27 No. 1

FIRST CLASS MAILUS POSTAGE PAID

BOSTON, MAPERMIT NO. 216

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

autoD E A L E R

M A s s A c h u s E t t s

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

2 0 1 5 N e w e N g l a N d I N t e r N a t I o N a l a u t o S h o w

d e a l e r S u m m I t &

C h a r I t y C a S I N o N I g h t g a l a

RideLet It

ROCKET FUELED Cars.com

NITROUS BOOSTED Southern Auto Auction

Federated Insurance

TURBO CHARGED Zurich

HIGH OCTANEAlbin, Randall & BennettCDK GlobalDealerDOCXGW Marketing ServicesReynolds & ReynoldsTD BankThe Boston Globe

Thank You

FULL BAR SPONSOR O’Connor & Drew

FOOD STATION SPONSORSCVRGW Marketing ServicesHuntington National BankLynnway Auto Auction (3x)Sun Trust

DESSERT STATION SPONSORSThe Boston HeraldMurtha Cullina LLP

PARTING GIFTMid-State Insurance

FRIEND OF THE SCHOLARSHIP PROGRAMPerformance Management Group

VALET SERVICE SPONSOR The Boston Globe

COAT CHECK SPONSOR Ethos Group

WELCOME GIFT SPONSOR Solect Energy Development

THEME SPONSOR Santander Bank

BAND SPONSOR TrueCar

TICKET SPONSOR American Fidelity Assurance

BREAK STATION SPONSORDowney & Company

RideLet It

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

FULL BAR SPONSOR O’Connor & Drew

FOOD STATION SPONSORSCVRGW Marketing ServicesHuntington National BankLynnway Auto Auction (3x)Sun Trust

DESSERT STATION SPONSORSThe Boston HeraldMurtha Cullina LLP

PARTING GIFTMid-State Insurance

FRIEND OF THE SCHOLARSHIP PROGRAMPerformance Management Group

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

4 From the President: new Year, new Models

6 the roUndUP: an exciting start to 2015

10 troUBLeshootnG: Recall Reimbursement

11 LeGAL: new Massachusetts Parental leave law extends Protections To Male employees

12 AUto oUtLooK

14 insUrAnCe: Under What situations Can My employees sue Me for an Injury?

15 deALer serViCes: Play Yourself

Cover Story:

16 2015 msAdA dealer summit

20 2015 msAdA Casino night

22 2015 new england international Auto show

24 neWs From Around the horn

29 nAdA UPdAte: new-Car Dealers are Catalysts for Change

32 nAdA mArKet BeAt

www.msada.org Massachusetts auto Dealer JANUARY 2015

The official publication of the Massachusetts State Automobile Dealers Association, Incs Ta f f D I R e C T o R YRobert O’Koniewski, Esq.

executive Vice [email protected]

Jean Fabrizio Director of administration

[email protected] Brennan, Esq.

Staff [email protected]

Marta Argueta-Guerraadministrative assistant/www

Membership [email protected]

a U T o D e a l e R M a g a z I n eRobert O’Koniewski, Esq.

executive editorCatherine MacDonald

editorial [email protected]

subscriptions provided annually to Massachusetts member dealers. all address changes should be submitted to: MsaDa by

e-mail: [email protected]:

send address change to:one McKinley square, sixth floor

boston, Ma 02109

autoD E A L E R

M A s s A c h u s E t t s

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 DIReCToRYblum shapiro 25

boston Herald 36lynnway auto auction 28

nancy Phillips 25o’Connor & Drew 35

Reynolds & Reynolds 9southern auto auction 27

sunTrust, 24

aDVeRTIsIng RaTesInquire for multiple-insertion discounts or

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from the President4

JANUARY 2015 Massachusetts auto Dealer www.msada.org

by Scott Dube, MSADA President

F

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

rom the moment our gi-ant seatbelt is unbuckled, walking the floor of the New England International Auto Show is one of the highlights of any auto dealer’s year. It’s a moment when customers, dealers, and everyone else in the industry is united un-der the badge of Enthusiast. These new models create excitement no matter what your day-to-day relationship is with them.

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

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

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

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

I would also like to take a moment to thank our Gala sponsors. Each of them understands our commitment to helping the next generation of automotive technicians, and their support helps us further that goal. We couldn’t do the event each year with-out them, and it is a privilege and a pleasure that so many have worked with us for more than a decade. A full list of sponsors is available on page 2. If you’re a vendor in our industry and don’t see your name there, I’d encourage you to reach out to us and get involved by contacting Executive Vice President Robert O’Koniewski ([email protected]).

Annual Meeting Details Coming Soon As we head into 2015, your Association is beginning the plan-

ning process for this year’s Annual Meeting. We’ll let you know details here as we continue to nail things down. In the mean time, please feel free to send me any feedback about last year’s event or ideas you have about who you would like to speak. This As-sociation’s gatherings have always thrived on your input, and our Annual Meeting is a crucial point in our community’s calendar. Please help me make it the best it can be.

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MSADA

“These are beautiful machines, and we’re the

ones lucky enough to keep bringing them to the public.”

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

AssociAte MeMber Directory

MsAdA BoARd Barnstable County

gary beard, Dick beard ChevroletBerkshire County

brian bedard, bedard brothers auto sales Bristol County

Richard Mastria, Mastria auto groupEssex County

William Deluca III, Woodworth Motors John Hartman, Ira Motor group

Franklin CountyJay Dillon, Dillon Chevrolet

Hampden CountyJack sarat, Jr., sarat ford

Hampshire Countybryan burke, burke Chevrolet

Middlesex CountyChris Connolly, Jr., Herb Connolly Motors

scott Dube, bill Dube Hyundaifrank Hanenberger, MetroWest subaru

Norfolk CountyJack Madden, Jr., Jack Madden ford

Charles Tufankjian, Toyota scion of braintreePlymouth County

Christine alicandro, Marty’s buick gMC IsuzuSuffolk County

Robert boch, expressway ToyotaWorcester County

steven sewell, Westboro Mitsubishisteve salvadore, salvadore auto

Medium/Heavy-Duty Truck Dealer Director-at-Large

[open]Immediate Past PresidentJames g. boyle, Tuck’s Trucks

NADA DirectorDon sudbay, Jr., sudbay Motors

OFFICERsPresident, scott DubeVice President, Chris Connolly, Jr.Treasurer, Jack Madden, Jr.Clerk, Charles Tufankjian

MSADA

On January 16 your Association and the Mas-sachusetts State Auto Dealers Charitable Founda-tion held its 18th Auto Show Charity Gala to kick off our 58th edition of the New England Interna-tional Auto Show at the Boston Convention and Exhibition Center.

We feted over 600 guests, including our deal-ers, sponsors, and other industry representatives, to raise funds for our auto tech scholarship pro-gram.

Party-goers were entertained by the rousing sounds of the Love Dogs, a popular area band. Based on last year’s success and enthusiasm, we again ran a casino party room where attendees could roll the dice and play cards to win great prizes, all for a worthy cause – our tech scholar-ships. Congratulations to our big winners: Anna Fontaine, Bill Hoover, Mike Sewell, Edward Fer-reira, Paul Spinos, and Herby Duverne.

Gala attendees had access to the auto show floor, including five “ride and drive” offerings. This month’s magazine has a full recap of these events.

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

Finally, we owe a huge debt of gratitude to our

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

Scott Shulman, Our 2015 Dealer of the Year

Kevin Holmes, Truck Dealer of the Year Nominee

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

The weekend proved special for three of our member dealers.

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

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the roundup

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

An Exciting Start to 2015

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MSADA

monwealth.Finally, Kevin Holmes of Tri State

Truck Center in Shrewsbury was one of six nominees for the 2015 Truck Dealer of the Year award, which was being present-ed by American Truck Dealers (ATD), a partner of NADA, Heavy Duty Trucking magazine, and Procede software. We pro-filed Kevin in our December magazine. Although Kevin did not win the ultimate title, we are proud to have one of our own members from among hundreds of truck dealers across the country to be on the stage with his five other colleagues.

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

Change on Beacon HillOn January 8 Republicans Charlie

Baker and Karyn Polito officially became Governor and Lieutenant Governor, re-spectively, of the Commonwealth of Mas-sachusetts after their swearing in in the House chamber.

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

The next step for each chamber is to or-ganize itself with leadership, committees make-up, and chairmen and vice chairs. Once that happens, the committees will

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

Patrick: Merry Christmas, Charlie

One item requiring the immediate at-tention of the Baker-Polito team is the $765 million budget deficit left behind by Governor Deval Patrick as his term ended. As you may recall in our previous writings, Governor Patrick acknowledged immediately after the November election that a budget deficit existed, in the range of $325 million. His estimate, however, was met with skepticism as budget ex-perts pegged it in excess of $600 million, some saying it was closer to $1 billion.

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

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

Form 8300 Letters – Due 1/31/15

The IRS requires any person who re-ceives more than $10,000 in cash in a single transaction or a series of related transactions while conducting his or her trade to file a Form 8300 with the agency. A business must file the Form 8300 to re-port cash paid to it if the cash payment is:• Over $10,000; • Received as:

• One lump sum of over $10,000, or• Two or more related payments that

total in excess of $10,000, or• Payments received as part of a single

transaction (or two or more related

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

• Received in the course of trade or busi-ness;

• Received from the same buyer (or agent); and

• Received in a single transaction or in two or more related transactions.Under the IRS rules, a business must

notify its customers, in writing, by Janu-ary 31 of the subsequent calendar year that the business has filed a Form 8300 regarding the cash transaction with the customer. (If a letter was sent to the cus-tomer at the time of the transaction and the filing of the Form 8300, a second let-ter is not required.) Neither the code nor the regulations mandate a specific format for the customer letter; the regulations, however, do require the following mini-mum requirements in the letter:• The name and address of the dealership

and a contact person there submitting the Form 8300;

• The aggregate amount of reportable cash, received by the dealership filing the Form 8300 during the calendar year, in all related cash transactions;

• A statement that the information contained in the letter is being reported to the IRS.As an alternative to filing the paper

Form 8300, businesses may file elec-tronically the Form 8300 using FinCEN’s Bank Secrecy Act (BSA) Electronic Fil-ing System. E-filing can be done at no charge, and it is a quick and secure way for individuals to file their Form 8300s. Filers receive an electronic acknowledge-ment of each submission. To receive more information, visit the BSA E-Filing Sys-tem at http://bsaefiling.fincen.treas.gov/main.html.

Additional information regarding the Form 8300 requirements is available at these IRS links: • http://www.irs.gov/Businesses Small-

B u s i n e s s e s - & - S e l f - E m p l o y e d /Report-of-Cash-Payments-Over-

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10000-Received-in-a-Trade-or-Business-Motor-Vehicle-Dealership-QAs

• http://www.irs.gov/pub/irs-pdf/f8300.pdf

Storm Closures – Pay RulesHere in New England at least once a

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

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

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

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

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

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

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

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

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

No Guaranteed Workweek: Some employees believe that if they are ready and willing to work, the employer is obli-gated to allow them to work their regular schedule or to pay them for the hours they missed due to the closure of the business. This is not true under Massachusetts or federal law. An employer is not required to provide a set number of hours of work each week and, with the exception of “reporting pay” discussed above, is not obligated to pay an employee except for hours actually worked by the employee.

2015 Dues InvoicesEarlier this month your Association

sent out 2015 dues invoices to all our dealership and associate members. Our members’ dues help fund the Associa-tion’s activities on their behalf, includ-ing our lobbying on Beacon Hill and in Washington, our member counsel ser-vices, and our education and training ac-

tivities. Over the last several years we have

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

Our strength lies in our members. With your continued support and mem-bership renewal, we can build on our current foundation and begin to enhance your Association’s core purposes of com-munication, advocacy, and education.

Save the Date: Annual Meeting – May 1, Boston

Your Association will conduct this year’s Annual Meeting on Friday, May 1, at the Mandarin Oriental Hotel in Boston. We are lining up a number of exciting industry speakers for the day. Be on the lookout for our invitation and registration materials.

MSADA-Reynolds Forms Rollout

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

We are now in the process of rolling out the increased menu of forms, and we encourage our members to take full advantage of the improvements we have made. Check out the ad in this month’s magazine and contact your Reynolds rep today to obtain the full complement of forms your dealership may need.

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MSADAtroubleshooting10


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

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

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

In August 2014, NADA released a comprehensive update on recalls from the dealer perspective: Safety Recalls: a Q&A for Franchised Dealers, which is available to NADA members at the fol-lowing link: http://www.nada.org/regu-latory_affairs/subject/safety/safety_re-

call_QA.htm.By now, most dealers are familiar with

the broad points of recall law, and un-derstand which cars can be sold, which cars must be grounded, what steps to take when receiving a recall notice, etc. However, in speaking with our dealer members, it is clear that many are un-aware that there is a provision in the fed-eral law that requires the manufacturer to reimburse the dealer when a vehicle is subject to a safety recall.

Under the National Traffic and Motor Vehicle Safety Act, manufacturers must both reimburse dealers for the cost of remedying recalls and provide addition-al compensation of at least one percent per month of the manufacturer’s (or dis-tributor’s) selling price, prorated from the date of a recall notice until the date a motor vehicle recall is remedied. See 49 U.S. Code § 30116(b):

“If the distributor or dealer installs the part or equipment with reasonable diligence after it is received, the manu-facturer shall reimburse the distributor or dealer for the reasonable value of the installation and a reasonable reimburse-ment of at least one percent a month of the manufacturer’s or distributor’s sell-ing price prorated from the date of no-tice of noncompliance or defect to the date the motor vehicle complies with ap-plicable motor vehicle safety standards prescribed under this chapter or the de-fect is corrected.”

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

Dealers should perform a compre-hensive review of all grounded new ve-hicles in inventory to ensure that they

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

After evaluating grounded inventory, dealers should review all recall-related communications from the manufacturer. Often times, recall notification letters detail the reimbursement process. If no process is in place, the dealer should re-quest the reimbursement in writing and cite the relevant statute provided above.

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

For those that are having trouble keeping up with all of the recalls, visit www.safercar.gov to use NHTSA’s VIN-searchable safety recall data base. NHTSA also issued a list of available manufacturers and details on the capa-bility and functionality of the data base, which is mandated by the Moving Ahead for Progress in the 21st Century Act, the transportation bill enacted in July 2012.

Your Association, as well as NADA, are very interested in monitoring manu-facturer compliance with the law. Please contact us if you feel that your manufac-turer is not in compliance with the re-imbursement provisions detailed above. Additionally, questions concerning fed-eral safety recalls may be directed to NADA Regulatory Affairs at [email protected] or 703-821-7040.

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If you require any additional infor-mation on dealer data security regula-tions, service provider agreements, or any other issue, please contact Robert O’Koniewski, MSADA Executive Vice President, [email protected], or Peter Brennan, MSADA Staff Attorney, [email protected], or by phone at (617) 451-1051.

Staff attorney, MSaDa

By Peter Brennan, Esq.

Recall Reimbursement


MSADA 11

Just before leaving office, Governor Patrick signed a bill into law establishing parental leave in Massachusetts for both female and male employees.

Effective April 7, 2015, the new law will replace the Massachusetts Mater-nity Leave Act (MLA), which provides female employees with eight weeks of job-protected maternity leave for the birth or adoption of a child. Extending paren-tal leave to male employees, the new law will require significant policy changes for Massachusetts dealers with less than 50 employees, as they are not already cov-ered by the Family and Medical Leave Act (FMLA), which applies to both male and female employees. Even dealers who are covered by FMLA should be aware of this new law, since an employee who has ex-hausted FMLA leave for a non-parenting reason is still entitled to take advantage of the new Parental Leave Act.

The Massachusetts Maternity Leave Act. The MLA currently provides that a female employee is eligible for up to eight weeks of job-protected leave (either paid or unpaid, at the employer’s discretion) if she (1) has completed her initial pro-bationary period with her employer or, if none, has been employed for at least three consecutive months and (2) has given at least two weeks’ notice to her employer of her anticipated departure and return dates. Under the MLA, a female employee can take such leave for the purpose of (1) giv-ing birth, (2) adopting a child under the age of eighteen, or (3) for adopting a child under the age of twenty-three, if the child is mentally or physically disabled. At the expiration of such leave, the employer must restore the employee to her previous job or one of the same or similar status, pay, length of service credit, and senior-ity, unless she would have been (and oth-ers of the same status were) laid off in the interim.

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

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

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

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

job-protected.Furthermore, the new parental leave

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

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

t

Joe aMbaSh iS the Managing Partner anD Jeff fritz iS counSel at fiSher & PhilliPS, llP, a national labor anD eMPloyMent firM rePre-Senting hunDreDS of DealerShiPS in MaSSachu-SettS anD nationally. they May be reacheD at 617 722 0044.

Legal

New Massachusetts Parental Leave Law Extends Protections To Male Employees

By Joseph W. Ambash and Jeffrey A. Fritz


AUtO OUtLOOK12 AUtO OUtLOOK


MSADA 13

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

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

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

Scenario #1:While an employee is working under

a vehicle, some metal particles fall in his eye. Although the manager had per-formed a Personal Protective Equipment (PPE) assessment and provided safety glasses, the employee wasn’t wearing them. Despite precautions by manage-

ment, the employee was still injured. This is the perfect example of where the Workers’ Compensation system is effec-tive; the manager had made a solid ef-fort to comply with the regulations and to protect the employee. A PPE Assess-ment and training were conducted, and appropriate safety equipment to prevent injury had been provided. In this case the employer was not reckless and did not in-tentionally cause injury to the employee. The employer should not be held liable for the employee’s injury – other than to rely upon their Workers’ Compensation Insurance to fairly compensate the em-ployee for his injury.

Scenario #2:While an employee is working in the

service area, he is regularly exposed to a 55 gallon drum of solvent. After some use of this chemical, the employee ap-proaches his manager and complains about shortness of breath and states that he would prefer to use a different solvent. The manager explains that this is the most economical solvent and that using it is “part of the job and that everyone else uses it.”

Over time the employee develops sen-sitization to the chemical and complains of numbness and pain. The employee ends up taking Workers’ Compensation leave, and, after three weeks, returns to work. The employer still does not reme-diate the hazard. Even worse, the drum of solvent is re-located to the employ-ees work area where his exposure is in-creased. The employee begins to experi-ence additional symptoms just working around the solvent. He approaches the manager again but is once again ignored.

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

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

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

t

ABOUT KPA KPA is a business services provider for more than 5,100 automotive, truck and equipment dealerships, and service com-panies. KPA provides Environmental Health and Safety (EHS) and Human Resource (HR) Management software and consulting services. KPA’s solutions have been embraced by leading auto dealers, including eight of the 10 largest dealer groups in the United States, and endorsed by 26 dealer associations from around the country. KPA joined the Inc. 500/5000 list of fastest growing compa-nies in 2012. To learn more, visit www.kpaonline.com or call 866.356.1735.

MSADAinsurance14


eric iS Vice PreSiDent of ProDuct anD buSi-neSS DeVeloPMent at KPa. eric worKS with KPa’S larger clientS anD PartnerS to De-VeloP new SolutionS that helP to reDuce riSK anD MiniMize loSSeS. by Staying on toP of eMerging oSha, ePa, anD Dot regula-tionS eric helPS autoMotiVe SerVice facili-tieS aVoiD fineS anD MiniMize the iMPact of lawSuitS.

By Eric Schmitz

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


MSADA dealer services 15

In a time of Ellington and Coltrane there was a little known jazz musician named Charles Mingus. Mingus had a very dif-ferent approach to jazz compared to his other, better known colleagues. Mingus never felt that his music was too tough to learn. So, once players knew their instru-ment well enough and found themselves in Mingus’s music, Mingus used to shout out to his musicians, “PLAY YOURSELF!”

Mingus believed every musician had their own voice, and he wanted each of them to find it within the musician’s own music. Today, the customer buying process has changed. To compete, your dealership needs to find its voice. This is cultivated within your niche and through your own unique competence, and it has

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

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

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

Selling people has become obsolete. Dealing with their issues is what is neces-sary today. And the way to deal with their issues is to properly engage with that pros-pect. That is, getting on board with them, not trying to get them on board with you. Fundamentally, it’s an understanding of why the prospect is in the market and what are they trying to accomplish.

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

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

Unless you’re engaging with the pros-pect correctly, you’re missing a lot of pros-pects that were ex-posed to you. In most cases you gave them information when they weren’t ready to buy at that time but will buy when they are ready. It’s a question of be-ing there for them or being lucky enough to encounter them when they are ready. And you know you can’t always

count on luck. Engagement is the key. Understanding where the prospects are

in the buying process and assisting them in that process is where you can make great strides in this business today. This is engagement! This is finding your voice! Making those strides is what’s going to differentiate you in the market place. Your unique voice means more market share.

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

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Play YourselfWhat a Less-Than-Well-Known Jazz Musician from the

1960’s Can Help Us Better Understand about Selling Cars in Today’s Competitive Market

Dale Boch Management Developers Inc (MDI) Dealer-ship Strategic Planning – 25 years in help-ing dealerships build great teams, be more productive, increase market share and im-prove profitability.

Todd Friedman Altura Digital Solutions - Digital Strat-egies for Today’s Competitive Market – bringing dealerships to the forefront of digital marketing, social media and repu-tation enhancement.

Today, the customer buying

process has changed. To

compete, your dealership needs to find its voice.

16 2015 MSADA Dealer Summit


Joe Ambash, managing

partner at Fisher and

Phillips LLP, reviewed

a lengthy list of new

regulations for 2015 that

will affect dealers.

“Typically at the

beginning of the year we

don’t have a list so long,”

he said, noting the list

might give the dealers

in the room a “wake up

call.”

New laws about sick

leave, parental leave,

domestic violence leave

and more were covered

in depth, with suggestions

for how dealers can

work with HR and

management to comply

with regulations.

Joe AmbashFisher and Phillips LLP

Robert O’Koniewski

Let It

2015 MSADA Dealer Summit 17MSADA


MSADA President Scott Dube, who will serve another term at the

organization’s helm, encouraged the dealers in the room to be vocal

about how politics affects the industry.

“We spend a tremendous amount of time at the association to defend

our industry as a vehicle of the economy,” he said. “We need to spend

the time to educate politicians and our own employee groups about how

regulations affect our industry.”

Dube recognized that the event is about supporting the Massachusetts

State Auto Dealers Charitable Foundation’s tech scholarships that bring

talent into showrooms.

Robert Champagne Ethos Group Compliance Solutions

Scott Dube

RideLet It

18 2015 MSADA Dealer Summit


Jim Ziegler

Tom TrudellAmerican Fidelity

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

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

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

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

Besides digital marketing and data security, Ziegler offered valuable marketing tips for various media, including radio and TV.

“More business happens after the 15th of the month,” he said. “I fish when the fish are biting.”

Ken LeeserTaino Consulting Group

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

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

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

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

Mark Babcock Metal Wave

Cynthia Larose Mintz Levin

2015 MSADA Dealer Summit 19


Tom TrudellAmerican Fidelity

Ken LeeserTaino Consulting Group

Mike DeCarloDealerDOCX

MSADA

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2015 MSADA Casino NightM S A DA

21


MSADA2015 MSADA Casino NightM S A DA


22 2015 New England International Auto Show

232015 New England International Auto Show


MSADA

from Around the HornNEWS

FRANKLIN

Ford dealership Installs solar Roof

Massachusetts-based Solect Energy Develop-ment has installed a 142.5 kW rooftop solar energy system at Franklin Ford.

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

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

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

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PEABODY

Lyon-Waugh Auto Group Reaches $1.5 Million in All-Time donations

The Lyon-Waugh family of luxury auto dealerships reached the milestone of $1.5 million in all-time dona-tions in December. With commitments to a variety of nonprofits, including local shelters, Toys for Tots and Boston Children’s Hospital, Lyon-Waugh has contrib-uted more than $115,000 to charity in 2014 alone.

The list of nonprofit and community organizations that have benefited from Lyon-Waugh’s 21 years of support and generosity is long and diverse, ranging from local schools to the Alzheimer’s Association to the girl-em-powerment group, Girls Inc. Lyon-Waugh co-founders Bud Lyon, Bill Currie, and Warren Waugh donated more than $100,000 to the construction of the Torigian Family YMCA in Peabody, while the auto group’s first dealer-ship, BMW of Peabody, has raised more than $300,000 for the Susan G. Komen breast-cancer organization dur-ing 11 years of the annual Ultimate Drive Campaign. In recent years, Lyon-Waugh has also directed another $100,000 toward computers and other technology for the City of Peabody school district.

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

SOUTHBOROUGH

Coast 2 Coast Auto Group Buys Farrell Volvo

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

continued on next page

MSADA

from Around the Horn26 NEWS


from previous pageacquisition in the United States.

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

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

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

BURLINGTON

Mall shoppers surprised with Car switch

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

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

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

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

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

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

stephen L. Gervais, sr.Stephen L. Gervais, 77, of Lowell, a well-known Greater

Lowell businessman and president of Gervais Ford in Ayer, died January 15 at his home with his family by his side.

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

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

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

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

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

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

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

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

IN MEMORIAM


MSADA 27

BRAINTREE

Braintree Town Council Gives Roads to Quirk Enterprises

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

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

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

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

state of the art facility.” The new dealership is expected to be a $5-10 million develop-

ment, which would bring in revenue and construction and retail jobs to the town.

SOMERVILLE

Ernie Boch shutters Football Team

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

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

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

MSADA28



MGM Springfield has purchased the former Orr Cadillac deal-ership location from the Orr family for $2.3 million, according to The Springfield Republican.

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

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

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

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

The 26,789-square-foot Orr dealership building sits on 3.2 acres. The Orr family listed the property for sale at $2.5 million in 2010.

SPRINGFIELD

Casino Company Purchases Former Cadillac dealership site

nAdA Updateby Don Sudbay

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

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

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

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

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

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

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

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

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

for their business. “Dealers have adopted the Internet because we know we

often make our first impressions digitally. We’ve adopted technology that includes our customers in the sales process more and more. We are innovative, and we offer the con-sumer what they want and need—value.”

Gov. Jeb Bush Slams CFPB’s ‘Unelected Bureaucrats’ Over Dealer-Assisted Financing

RegulationsThe fate of the country rests on moving government out

of the way of business so “the promise of fair and free op-portunity returns to America,” former Florida Gov. Jeb Bush told a capacity crowd at the National Automobile Dealers Association Convention & Expo on January 23.

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

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

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

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

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

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

ATD Chairman: Trucking Keeps the Nation Moving

Eric Jorgensen, chairman of the American Truck Deal-ers (ATD), urged dealers to become engaged in all levels of their industry’s wide-spread operations to move their busi-nesses forward.

New-Car Dealers Are Catalysts for Change

Don SuDbay, PreSiDent of SuDbay automotive GrouP, rePreSentS mSaDa memberS on the naDa boarD of DirectorS. he welcomeS your queStionS anD concernS ([email protected]).

29


15MSADA Accounting30 MSADAnAdA Update

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

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

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

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

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

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

He encouraged ATD members to fulfill another of the plan’s goals: to inform people about the truck industry. America’s medium- and heavy-duty truck dealers pro-vide equipment that moves more than 70 percent of all the freight tonnage annually in the United States, he said. The industry employs more than 8.7 million people nationwide.

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

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

Scott McCandless of Colorado Named Truck Dealer of the Year

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

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

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

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

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

ADESA Auction Raises $40,000 for Veterans’ Canine Companions

NADA Charitable Foundation donates an additional $20,000.

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

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

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

Kenworth Receives Truck of the Year AwardThe American Truck Dealers named the Kenworth T880

Vocational Truck with PACCAR MX-13 Engine as the 2015 Truck of the Year. The award was announced at the ATD Convention & Expo in San Francisco.

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

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

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

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

NADA Issues New Compliance Guide on Federal Advertising Rules

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

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


31MSADA AccountingnAdA Updateby clicking the hyperlinked topics in the table of contents page in the PDF document.

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

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

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

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

The guide is part of NADA’s Management Series, Driven. It is available at www.nada.org and will be included in the suite of compliance products at NADA University Online at www.nadauniversity.com.

New-Car Dealers Donate $50,000 to Food Bank in San Francisco

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

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

The city of San Francisco has hosted the NADA conven-tion 16 times since 1949.

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

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

NADA Academy Names Camron Wilson as Senior Consultant of OEM and Allied

Educational SolutionsNADA Academy has named Camron Wilson as Senior

Consultant of OEM and Allied Educational Solutions -- a new position tasked with expanding collaboration with OEMs, allied industries and dealership staffs through online and instructor-led training.

Among Wilson’s key duties is to ensure existing OEM and allied customers receive the training that meets their individual needs, as well as to reach out to new prospects. She will also continuously evaluate opportunities for Acad-emy to adapt and enhance its programs based on customer feedback and changing market conditions.

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

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

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

The expanded OEM and Allied Industry Training Pro-gram will include instructor-led training focused on such areas as:

• Understanding Financial Statements• Parts Management• Service Management• New-Vehicle Sales Management• Used Vehicle Sales ManagementSupplemental online training is included in the following

areas:• Dealer/Executive• Human Resources• Internet and Marketing• Sales• Service• Parts• Business Office and F&I• Body Shop• Legal and RegulatoryTo learn more about Academy programs, visit nada.org/

academy or email [email protected]

MSADA


nAdA Market BeatProduced by NADA’s Industry Analysis Group • Angela Lisulo, Economist

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

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

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

32


overall There were 1.5 million light-vehicle sales across the U.S. in De-

cember 2014, up 15.7 percent from November 2014 and up 10.7 percent from December 2013. In 2014, May and August were the months in the largest sales volume bracket with 1.6 million units each, while January held the lowest sales figure with 1.0 million.

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

In 2014, car sales held a market share of 46.8 percent with sales up 1.4 percent from 2013. The light-truck share was 53.2 percent with sales up 10.1 percent from last year. For every month in 2014, the monthly share of sales held by light trucks was greater than that for cars; moreover, the gap between these two groups visibly increased from the middle of the year through December as the car share de-clined while the light-truck share increased towards the end of the year.

For Q4 2014, there were 4.1 million light-vehicle sales, up 7.2 percent from Q4 2013. Car sales for the quarter were up 2.9 percent from Q4 2013, while light-truck sales were up 10.9 percent from Q4 2013. In 2014, Q2 2014 held the largest quarterly sales volume with 4.4 million sales, while Q1 2014 held the lowest quarterly sales volume with 3.7 million sales. See Figure 1.

comPanieS/branDSCompanies with a base in North America (Detroit 3 and

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

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

Review of New Light Vehicle Sales

nAdA Market BeatProduced by NADA’s Industry Analysis Group • Angela Lisulo, Economist

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


33 MSADA

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

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

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

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

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

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

SeGmentSIn 2014, the cross utility vehicle

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

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

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

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

In 2014, all the segments, except the large car segment,

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

nAdA Market Beat34

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

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

Power SourceIn 2014, gasoline-powered light vehicles held the largest share of

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

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

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

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

For the alternative power cat-egory, in Q4 2014, the following light vehicles were sold: 19,992 electrics; one vehicle powered by fuel cell technology; 97,592 hy-

brids; 153 units powered by natural gas; and 11,263 plug-in hybrids. This amounted to 129,001 light-vehicle sales. The Q4 2014 sales for the alternative power category were down 5.9 percent from Q4 2013. See Figure 7.

moDelSIn 2014, the leading light truck by sales volume was the Ford F-

Series with 700,796 units, and the leading car by sales volume was the Toyota Camry with 428,606 units sold.

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

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

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

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Documents

January 2015 MSADA Auto Dealer