Embed Size (px)
Citation preview
Virginia Automotive Report E Newsletter for October 2016
VAA Works to Promote the State
Safety Inspection Program By Steve Akridge
Each year VAA retains the services of The Keeney
Group, Bruce and Bo Keeney for Legislative Monitoring in
the General Assembly. When automotive related issues
come up we often partner with the VGMC, a group of ser-
vice station owners in Northern Virginia. This past session
VAA and VGMC contracted the Keeney’s to survey mem-
bers of both the House and Senate Transportation Commit-
tees to get an overall feel for the legislators opinion of the
state’s safety inspection program. One reason, was to see if
the time was right for a fee increase, and these are the
committees that any bill to increase the fee will come be-
fore. After completing their interviews, Bruce and Bo report-
ed the opinion of most of the legislators was far less than
favorable, and the votes were not there to support an in-
crease in the fee. As we did many years ago, both groups
met, and felt it was time to work on a PR campaign to pro-
mote the value of the program, and how important it is to
highway safety.
We agreed our effort would be three fold: develop
a brochure that shops can give to customers, produce a
video that we will email and post on our website, and get as
many legislators from both Committees into our VAA mem-
ber shops across the state to show them first hand what all is
checked, why highway safety is impacted, and the im-
portance of the program to the citizens of the Common-
wealth. Our next step was to meet with the State Police to
gather important statistics that relate to the program. These
stats show just how many vehicles had a safety issue, and
can be broken down to the various components– brakes,
tires, suspension, etc. With every station on the computer-
ized program, the stats are available and are accurate,
which is something we did not have before it went electron-
ic. Legislative Chairman John Kline, VAA Board member
Mike Fortune and myself met with Captain Ron Maxey to
discuss the details of our campaign. They are 100% behind
what we are doing, and have provided the valuable statis-
tics we needed. We will continue to work closely with them
as we proceed with our campaign.
Be on the look for more communication from us in
the coming months. VAA is commited to promoting the
value of the program, and why it is important to our citizens. Many thanks to VAA Legislative Committee mem-
bers John Kline, Mike Fortune, Mark Anderton, ST Billingsley,
Scott Brown and Jerry Tatum, and our friends at VGMC.
Captain Ron Maxey
Q&A on Department of Labor’s New
FLSA Overtime Rule SESCO Management Consultants has been conducting
teleseminars and webinars for the past months with various na-
tional and state trade and business associations as well as indi-
vidual clients on the new final rule regarding overtime regula-
tions. The following are questions that attendees have asked in
these seminars and SESCO is sharing the Q and A’s as we feel
these are informative.
Q: In summary, what do I need to understand about these new
overtime requirements?
A: The Department of Labor has issued white-collar exemptions.
These exemption tests have not changed under the new
rules. If any of your organization’s positions meet a white-
collar exemption test, then your organization does not have
to pay that position overtime or require a time record to be
maintained. These white-collar exemptions include the Exec-
utive, Administrative, Professional, Outside Sales (no salary
requirement), Computer, and Highly-Compensated. Each
one of these white-collar exemptions have requirements
(tests) that your position must meet in terms of performing
certain duties. In addition to meeting the duties tests, the
position must also be paid on a guaranteed salary basis. This
guaranteed salary basis is being increased effective Decem-
ber 1, 2016 from $23,660 ($455 a week) to $47,476 per year
($913 per week). The salary threshold for the Highly-
Compensated White-Collar Exemption is increasing to
$134,004 per year. In addition, the guaranteed salary thresh-
old will be automatically updated by the DOL every three (3)
years based on certain economic benchmarks with the first
increase scheduled to occur on January 1, 2020. The bottom
line for employers is that they must in one fell swoop increase
an exempt employee’s salary to the new $47,476 per year for
the position to remain exempt from overtime, or change the
position from exempt to nonexempt and thus implement a
nonexempt pay plan that yields overtime,
Q: Is paying an employee above the salary threshold the only
requirement needed to avoid overtime?
A: No, just because an employer compensates an employee
via a guaranteed salary that meets the new threshold
($47,476) does not mean that he or she is not entitled to
overtime. The position must meet one of the white-collar
exemptions from overtime and receive the guaranteed
salary. Article Continued on Page 6
2
www.unifirst.com
www.carrolltire.com
www.federatedinsurance.com
www.parrishtire.com
www.morrisdist.com
www.odtdirect.com
www.valvoline.com
www.atd-us.com
PLEASE THANK AND SUPPORT OUR VAA ADVERTISERS
www.forparts.com
www.tirecenters.com
www.hotrodprocessing.com
www.maxfinkelstein.com
3
VAA 2017 Convention &
Trade Expo Returns to Colonial Williamsburg
And the Williamsburg Lodge
April 28-30, 2017
Mark your Calendar and plan to join us
In the historic Revolutionary City
VAA Board of Directors
President: Scott Brown
Cardinal Plaza Shell, Springfield
Northern Virginia Region
President-Elect: John Kline
Old Dominion Tire, Midlothian
Richmond Region
Vice President: Mark Anderton
First Landing Auto Care, Virginia Beach
Coastal Virginia Region
Secretary-Treasurer:Jerry Tatum
Leete Tire & Auto, Petersburg
Richmond Region
Past President: Bobby Cutchins
Bobby’s Tire & Auto Care, Franklin
Coastal Virginia Region
Executive Director: Steve Akridge
VAA, Midlothian
Richmond Region
Directors:
Northern Virginia Region:
Myron Boncarosky, Virginia Tire & Auto, Fairfax
Chris Barnett, Tire Tread Service, Fredericksburg
Richmond Region:
Clint Farrar, American Tire Distributors, Richmond
Mike Fortune, Cloverleaf Tire & Auto, Richmond
Tom McClain, Napa Auto Parts, Richmond
Coastal Virginia Region:
Mike Scaglione, Arrowhead Auto & Align, Virginia Beach
Lynchburg Region:
Eric Hughes, Harris Tire, Lynchburg
Brenda Carpenter, Carpenter Tire, Lynchburg
Southwest Virginia Region:
Travis Leath, Twin County Tire & Auto, Galax
Bill Hoal, Carroll Tire Co., Roanoke
Shenandoah Valley Region:
Steve Crawford, Hepner Tire, Woodstock
Terry Westhafer, Central Tire, Verona
Tom Jones, Fisher Auto Parts, Staunton
Larry Williams, University Tire & Auto, Charlottesville
Winding Brook Tire Pros, Andrea Ellett
Milford VAA Sponsor: Clint Farrar
Help VAA grow– recommend someone you know and
sign them up online at www.vaauto.org click Join VAA
Welcome New VAA Members
VAA Office:
Steve Akridge, Executive Director
Email: [email protected]
Web: www.vaauto.org
6126 Fox Haven Place
Midlothian, VA 23112 Phone: 804-739-1400
The 2017 Convention Committee has met
and planned our entire schedule for April.
For this year’s show we will have 2 Peer to
Peer Roundtables, both with a Moderator-
One for Owners/Key Managers and one for
Sales and Service Managers. As we evaluat-
ed potential speakers, one message came
back loud and clear from a committee
member… “I have heard Mike Scott in
person, and you gotta get this guy for
our members to hear. He alone is
worth the price of admission”.
So we are very pleased to
announce Mike Scott will
be our closing keynote
speaker with his “Totally
Accountable” message.
He will also moderate our
Owner’s Roundtable.
More Info coming soon at
www.vaauto.org
4
President’s Corner
By Scott Brown
In September, I attended a meeting of
the 20 Group I belong to. As homework, we
each performed a SWOT analysis on our
shops. This was an exercise that I believe has
value for each of us. A 20 Group is an invalua-
ble tool for any shop owner today. The way
my 20 Group works, four times a year 20 shop
owners get together to help grow our busi-
nesses. We listen to each other and help
each other by inspiring one another to grow.
If you aren’t in such a group, I highly recom-
mend you join one ASAP.
SWOT analysis is pretty simple. SWOT is
an acronym for strengths, weaknesses, oppor-
tunities, and threats. It involves specifying the
objective of the business & identifying the in-
ternal and external factors that are favorable
and unfavorable to achievement of that ob-
jective. A SWOT analysis can be performed
for any business, individual or even an industry.
I listened to the shop owners one after
another talk about the threat of the inde-
pendent repair shop down the street and it
felt wrong. Is the shop owner across the street
or across town really a threat? Or are they, as I
contend, a resource?
This US automotive repair and mainte-
nance service stands at $86.2 billion and is
growing at 4% annually. Who then is our real
competition? Is it the OE dealers, whose cur-
rent market share of 14% is expected to rise to
17% by 2025? For comparison, the independ-
ent repair shop market share is currently 57%
and is expected to grow by a meager 1% over
the next nine years. The trend is both a
strength & a weakness.
Is new technology a threat? Telematics
to date hasn’t had a dramatic impact on cus-
tomer behavior. I expect this to change as
the “connected car” technology becomes
more ubiquitous in the customer fleet.
Article continued on Page 8
High Mileage Meets Low Scrappage "Light vehicle mileage on U.S. roads recorded significant gains
over the past two years (2014 and 2015). At the same time, an-
nual vehicle scrappage was exceptionally low during these
two years, despite soaring new car and light trucks sales. These
two key trends continue strong through 2016."
"Low scrappage rates result in cars and light trucks staying on
U.S. roads for a longer time, increasing the number of light vehi-
cles in older age groups, particularly car and light trucks 15
years and up. With mileage increasing at a faster rate than ve-
hicles in operation (VIO), the average annual mileage of vehi-
cles increased last year, as the number of older vehicles
soared. When older vehicles are driven more annual miles, it is
positive for aftermarket growth."
Low Vehicle Scrappag
Over the past six years, the annual car and light truck scrap-
page rate in the U.S. (vehicles removed from operation) has
remained at below-average levels. During 2014 and 2015, an-
nual scrappage fell to its lowest average rate in more than 12
years.
This is very unusual, given the surge of annual new car and light
trucks sales in the U.S., something which historically has trig-
gered an escalation of vehicle scrappage rates.
Millions More Vehicles
As a result of vehicle scrappage nearly one-sixth lower in annu-
al rate during the past five years compared to the previous ten
-year span, more than 7 million cars and light trucks remained
on U.S. roads from 2011 through 2015 that would have been
sent to the junk pile had historical scrappage rates continued.
Vehicles are Surviving Longer
Annual scrappage rates during 2014 and 2015 reflect the ex-
tended life of cars and light trucks produced since the mid-
1990s. Advanced engine designs and improved materials used
in the production of vehicle engines and bodies have added
several years to the expected life of light vehicles in the U.S.
Higher Mileage Growth
For the first time in more than ten years, light vehicle 2015 mile-
age posted a higher annual growth rate than the VIO percent-
age increase for the year.
As a result, annual miles recorded by the typical car and light
truck increased during 2015, something which had not oc-
curred for more than ten years.
2016 Prospects
Annual mileage of light vehicles is expected to climb approxi-
mately 3% during 2016, a growth rate that will exceed the an-
ticipated annual increase of the car and light truck 2016 popu-
lation.
As a result, annual driving by the typical car and light truck will
increase again in 2016, marking the first time in more than 12
years that back-to-back annual mileage gains have been rec-
orded by the average light vehicle.
Article continued on Page 8
5
How Small Businesses Can Benefit From Social Media
By: Nick Williams, Social Media Manager for Optimize Social Media
Small business owners are aware of the rapidly developing demand for social media marketing, but it seems
some do not fully understand its dynamic or how it benefits their company. Others have chosen to ignore advertising
in the digital realm entirely. Unbeknownst to those who view social media as a hobby, engaging with potential cus-
tomers and ensuring advertising is reaching a targeted audience online is now a priority.
In today’s digital world, consumers dread flipping through phone book pages or sifting through advertisements
shoved into their mailbox and for small business owners, social media presents an opportunity to expand and reach
consumers without a barrier only companies with infinite budgets were privy to.
There is no barrier on social media, while exposure on television, radio and print advertisements can be costly. Major
corporations can afford to employ a marketing team. Many independent and small business owners, however, can-
not afford a marketing department. In addition, some employees at small businesses wear many hats and cannot
dedicate time to social media marketing on a consistent basis.
There are five social media platforms every small business owner should become familiar with. Facebook, Twit-
ter, Google Plus, Yelp, and YouTube. Facebook has more than one billion users, Google is the leading search engine,
globally, followed by YouTube, a product owned by Google. These platforms highlight how your business operates
and if confronted with an upset customer or malfunction of your business operations, can be used as instant damage
control to maintain your brand’s reputation.
Whether approved or not, a business can be listed on various social media platforms with misinformation and
unmonitored engagement from potential customers. Advancements in technology have given consumers the option
to not have to make phone calls or send emails to contact a business. If a consumer contacts multiple businesses on
social media, that person is expecting an immediate response. The business that responds first may have earned a
new customer. While a vast majority of consumers still refuse to make purchases online, either because they feel their
information will be compromised or cannot fully perceive the product through the sense of touch as they could in
person, statistics show the rates of people making purchases online is increasing. Soon, social media platforms will
lead the cyber marketing industry.
It is important small businesses grasp the impact their business can make on social media rather than focus on
the possible return on investment with using social media. The more successful social media users see a holistic ap-
proach. Social media is about networking, influence and engagement. Small business owners want their customers to
associate a sense of comfort and security with their business and social media presents the opportunity to have a
longer conversation with customers, share values to a digital audience and leverage any conversation with a cus-
tomer into something better, perhaps a moment to explain why a specific product or service is superior to a competi-
tor’s.
Small businesses who rely simply on reputation or ‘word of mouth’ are doing themselves a disservice. Consum-
ers are continuously searching for the best offer and in today’s market, the majority of consumers are searching social
media. Small businesses will never be able to compete with major companies in manufacturing and volume, but
where small businesses can compete is with attention to detail, service and the overall customer experience. Social
Media allows the small business owner to disassociate his or her company from that battle. Social media is a platform
people use to amuse themselves, a place for personable content that relates to a positive experience, and one-on-
one attention. All of these are qualities many consumers seek before making a decision to spend their money.
Within five years, social media will become more difficult for the average person to incorporate all of the facets at
one time. Social media will become a necessity and not a luxury. Essential social media platforms will require an up-
dated smart phone. Business listing sites will continue to grow. Secured and verified login information, equipment and
software to operate social media will become more complicated, expensive and challenging for new users. Small
business owners must act now to learn the tools to operate a successful social media marketing campaign or find
themselves behind.
Want to know more about how Optimize Social Media can help your small business? Visit our website at opti-
mizesocialmedia.net, call 855-676-1212,
For Public Relations Information:
Allen Knappenberger, Communications
Writer
651-318-6520
For more Information:
Aric Toboleski, Director of Sales & Program Management
651-318-6802
6
(Continued from Page 1)
Q: Do these new rules affect the Fluctuating Workweek Method of Payment?
A: No. The Fluctuating Workweek Method of Payment was not affected by the new rules nor does the Fluctuating Workweek Meth-
od of Payment require a guaranteed salary of $47,476. The Fluctuating Workweek Method of Payment is a viable nonexempt
pay plan option versus hourly with time and one-half (150%) over 40 hours per week. The Fluctuating Workweek Method of Pay-
ment provides for a guaranteed salary (only has to yield minimum wage for all hours worked) and the only requirement for the
employer is to pay half time (50%) for hours worked in excess of 40 hours per week. This pay plan can be considered very positive
for employer and employee alike.
Q: I am a non-profit employer, must I comply with these regulations?
A: Yes. There are no special exemptions for non-profit employers, religious organizations or carve outs for small businesses. If your
organization, regardless of IRS status, is considered an enterprise you are covered by these regulations.
Q: If I change an exempt employee’s pay plan from salary to hourly with overtime, can I restrict their hours of work?
A: Yes. This will be one of the more common solutions in that employers will restrict employees from working overtime to avoid a
significant increase in labor costs. As labor costs are all employers’ largest single, controllable costs, employers will closely man-
age rates of pay and working hours.
Q: Do these new regulations affect any of the nonexempt, partial exemptions (overtime only)?
A: No. Partial exemptions from overtime (only) still remain in effect for retail dealerships (automotive, equipment, aircraft, and
boat), retail operations and their commissioned employees, motor carriers and healthcare, re: 8/80 overtime rule.
Q: Are there any organizations or positions that are not covered by these new regulations?
A: Yes.
• Higher Education Sector – Rules do not apply to:
Bona fide teachers
Coaches
Graduate and undergraduate students
Academic administrative personnel
• State and local governments
• Politicians and their staff
• Non-enforcement for providers of Medicaid-funded services for individuals with intellectual or developmental disabilities in resi-
dential homes and facilities with 15 or fewer beds. Threshold does not become effective until March 17, 2019.
• Teachers in secondary education, doctors, lawyers
Q: How should I prepare for these new regulations for those exempt salaried positions who fall under the new salary requirement of
$47,476?
A: SESCO recommends the following process be implemented:
• Require those who are currently exempt but will not meet the new salary threshold of $47,476 to start recording hours worked.
• Over the next several weeks and months, determine how many hours the position is actually working. If it is 40 or less, then no
action necessarily needs to be taken as anyone can be paid on a salaried basis.
• If the position is working a significant number of hours over 40, determine if those hours can be reduced to 40, thus limiting your
overtime liability.
If the position is required to work overtime and you cannot increase the exempt salaried basis to the new $47,476, then you
must determine whether or not you are going to implement an hourly rate with overtime or the Fluctuating Workweek Meth-
od of Payment with half-time over 40.
(article Continued on Page 7)
7
(Continued from Page 6)
Q: In some of our pay classifications, we have positions that are currently being paid over the $47,476 and some that are being
paid less. Can we have two (2) separate pay scales (exemption statuses) for the same job classification?
A: Yes. For those over the $47,476, you can continue to pay them on a salaried exempt basis. For those under the $47,476, you
can elect not to increase their guaranteed salary and convert them to a nonexempt pay plan, re: hourly with overtime or Fluc-
tuating Workweek Method of Payment with half time (50%).
Q: What challenges might present themselves should I increase salaried exempt staff from their current salary to the new salary
threshold of $47,476?
A: When increasing existing salaries for one class of employees and not others, this can create significant pay compression within
your compensation program, thus creating internal inequity -- which is far more important than external equity. It can also cre-
ate internal morale issues as a class of employees will receive pay increases and others will not. Finally, when hiring in new ex-
empt employees to the new $47,476 threshold, they will be hired in at salaries normally paid to more experienced, tenured em-
ployees. Therefore, labor costs and internal equity/morale issues will be a reality. Organizations must be able to answer these
difficult questions that will be raised by staff. Compensation systems will also need to be developed and/or revised to address
these pay compression issues.
Q: I saw in the media that U.S. Senator Lamar Alexander and others have vowed to vote out the new overtime rule before Decem-
ber 1st and that we will not have to worry about the regulations. Is this possible?
A: While anything is possible, it is highly doubtful and more than likely, these senators are merely posturing. Moreover, even follow-
ing the presidential election, if the Republicans win the White House, we view it as highly unlikely that the new rule will be un-
wound or repealed. As with most all employment regulations, there is a slim chance that they will be repealed and/or revised
and employers must become familiar with the new rules and be prepared to comply.
Q: Can SESCO assist us with our exemption classifications and help us prepare for the new salary threshold?
A: Yes, SESCO can be of assistance on or offsite in assessing the exemption status of your positions as well as in preparing for
changes from exempt to nonexempt pay plans as required as well as in revising and updating compensation systems to con-
trol labor costs.
Client Alert issued October 5, 2016
Last week, the United States House of Representatives (House) passed a Bill that would delay the effective date of the DOL’ s new
overtime rule by 6 months, from December 1, 2016 to June 1, 2017. It is important to understand the significant uphill battle the Bill
passed in the House faces before it could become law. First, the Bill must pass the Senate. It is very possible that the Bill itself may
not even reach the Senate floor for a vote. But, if it does, passage of the Bill is not highly likely given the current make-up of the
Senate. Even if the Bill is voted on and passes the Senate, a Presidential veto is almost certain to follow. President Obama released
a statement strongly opposing any delay in the rule’ s effective date, and threatening to veto any such law. Congress likely would
not have enough votes to override any such veto. As such, we encourage employers to continue preparing to comply with the
new rules by December 1. We will continue to follow the status of the Bill for you and provide updates as new developments arise.
For more information on these new FLSA overtime regulations and how they will affect your business, and more importantly how
you can comply in a cost effective manner, contact SESCO Management Consultants at 423-764-4127 or [email protected].
Sesco is a Prefered Vendor Partner of VAA, and through our relationship, VAA members get no charge phone consultation and
discounts on other services.
8
President’s Corner Continued from Page 4
Our problem is that independent repair shops
do not have access to this information. CaaS:
Car as a Service has a chance to be more of
an immediate business disrupter. CaaS includes
ride sharing technologies such as ZipCar, ride
hailing apps like Uber & Lyft and autonomous
cars. The results are clear to see, with millenni-
als using CaaS instead of driving themselves.
How about Vehicle Service Contracts as a po-
tential threat? These are currently sold on 43%
of all new and used car sales at OE dealerships.
By 2025 extended warranties or VSCs will be
sold on 86% of sales.
The final threat I’ll mention is industry consolida-
tion. Whether it’s new players backed by pri-
vate equity dollars buying & rebranding shops
or new competition from previously trusted part-
ners, like AAA, we each must react to an ever
changing marketplace.
As a group, independent repair shop owners
have some impressive strengths. The OE dealer-
ships (and AAA) are limited by bay capacity
and locations. Customers perceive independ-
ents more favorably than OE dealerships. The
aging composition of the overall vehicle fleet
also favors us.
Our ultimate strength is our relationships with our
customers. In every survey, customers remain
very loyal to their local shops. We own the cus-
tomer relationship! But be aware that the cus-
tomer expectations are growing.
The VAA is another strength we have that is not
duplicated by our true competitors. Recently
Dan Ammann, President of GM, stated that our
industry will change more in the next 5 years
than it has in the last 50! I believe he is correct.
We can each try to navigate the increasingly
changing marketplace alone or we can help
each other. The VAA offers us a framework to
meet, hang out with and learn from like-minded
shop owners. By working together, we can in-
spire each other to great things.
Until next time,
Scott
Please respond if you liked this Presidents Cor-
ner. If there is interest, I plan to work with our
Board of Directors to perform a more complete
SWOT analysis using our membership as the sub-
ject which would be distributed to VAA mem-
bers only.
Lang Report Continued from Page 4
More Miles on Older Vehicles
Low scrappage is increasing the number of cars 15
years and older on U.S. roads at a time when average
annual miles per-vehicle is increasing.
This means older vehicles, which use a much higher rate
of aftermarket products per-mile travelled than younger
cars and light trucks, are increasing in number at the
same time average annual miles driven per-vehicle is
growing.
The combined impact of older vehicles and more miles
driven by older vehicles is positive for aftermarket
growth, particularly for replacement parts (components
necessary for vehicle operation).
Six Major Takeaways
• Low average annual vehicle scrappage over
the past five years, despite record-setting new car and
light truck annual sales, added more than 7 million cars
and light trucks to vehicles in operation (VIO) during
2011 through 2015.
• Low scrappage has resulted in older vehicles
staying on the road longer, particularly those 15 years
and up.
• During 2015, annual mileage recorded by the
average car and light truck in the U.S. posted an in-
crease for the first time in more than ten years.
• Annual mileage in 2016 is expected to increase
faster than total VIO, resulting in an increase in average
driving by the typical car and light truck. This will be the
first time back-to-back annual mileage gains by the av-
erage vehicle have occured in more than 12 years.
• Over the past two years (2014 and 2015), low
annual vehicle scrappage occurred at a time when car
and light truck mileage recorded renewed growth (total
annual miles driven did not increase between 2003 and
2013).
• Older vehicles, which average much higher
rates of aftermarket product use per mile travelled than
younger cars and light trucks, are climbing in number at
the same time that average annual miles per-vehicle is
increasing. More annual miles on older vehicles is posi-
tive for aftermarket product growth.
Jim Lang, Publisher
Office: 260-399-1699 Cell: 260-417-3670
