december 2014 msada auto dealer

The Top

Kevin Holmes

F

rom Toys to

December 2014 • Vol. 27 No. 12

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

the

Year in

Review

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

4 From the President: a bright future

6 the roUndUP: Regulators never sleep

9 LeGAL: not Your employee, not Your Problem? not Quite.

10 troUBLeshootnG: legal Compliance Year in Review

11 ACCoUntinG: Planning leads to success in all aspects of life and business

12 AUto oUtLooK

14 deALer serViCes: electronics Recycling 101: The basics

15 ACCoUntinG: 2014 Dealership Trends and analysis for Used Vehicle sales

16 rePAir: Collision Repair shops brace for Challenges of aluminum bodywork

17 seCUritY: IP-based Cameras as an advantage for Dealers

18 Cover Story: from Toys to the Top – Kevin Holmes

22 YeAr in reView

25 news From Around the horn

29 nAdA UPdAte: new study Discredits CfPb’s fair Credit Testing Method

32 nAdA mArKet BeAt

www.msada.org Massachusetts auto Dealer DECEMBER 2014

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/ Membership Coordinator

[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

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send address change to:one McKinley square, sixth floor

boston, Ma 02109

autoD E A L E R

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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.

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lynnway auto auction, 25nancy Phillips associates, Inc., 26

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from the President4

DECEMBER 2014 Massachusetts auto Dealer www.msada.org

by Scott Dube, MSADA President

A

A Bright FutureWe can all take steps to make 2015 great for our industry

long with the hustle and bustle of the holidays come at least a few moments where we see the last year reflected back at us -- whether it’s on Facebook or simply filling out tax forms.

In our industry, that playback reel can bring moments both pain-ful and triumphant. Sure, there’s the hard fought battles lost, but plenty of victories as well. And as individual dealers, we see mile-stones big and small, whether it’s a new store brought from plans to completion or the site of the best damn car around roll off the truck for the first time.

But when I look back at the year that was, I always come back to the people who were here beside me helping to make great things happen. In addition to my family and my hard-working employees -- as MSADA President I am privileged to serve alongside many dedicated individuals striving for a better industry for all of us.

Your Association is comprised of a Board of Directors who work every day to make sure that your interests are being brought to the table. In addition to those who have been serving in that role for years, I should take special note of Frank Hanen-berger of MetroWest Subaru, who stepped up to the plate and joined the Board this year. I hope as you plan for 2015, you’ll make time to let your county Board member know what your goals are and how we can help make them a reality.

As you’ll see from our Year in Review, many of us excelled as individual dealers as well. We of course had Brian Kelly

celebrate his TIME Dealer of the Year nomination, while Carla Cosenzi of Tommy-Car Auto Group was named among the Top 10 Business-women of the Pioneer Valley by Women Business Owners. And just this month, we saw Kevin Holmes named one of ATD’s Truck Dealer of the Year nominees.

So as we think about the fu-ture, let’s remember both the hard lessons and the well-earned successes that came to us as a group in 2014. I’m confident that as we plough ahead, we’re all striving to make ourselves better and stronger every day.

See You at the GalaAs you rush to finish your holiday plans and wrap up the

year, don’t forget that you already have an important date on your 2015 calendar -- our Dealer Summit and 18th New Eng-land International Auto Show Charity Gala on Friday, January 16. It promises to be an informative afternoon -- featuring a keynote presentation from Jim Ziegler -- that will turn into a fun-filled evening with our Auto Show as the backdrop. Please contact Jean Fabrizio at (617) 451-1051 or [email protected] if you have any questions about registering for the event or booking a hotel room from our block.

I look forward to seeing you there, and I wish you a safe and happy holiday season from everyone at MSADA.

t

MSADA

“I am privileged to serve alongside many dedicated individuals

striving for a better industry for all of us.”

5


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 Key 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) 292-7500Sun Trust 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

As we go to press amidst the peaceful holiday season of Chanukah’s start and Christmas being right around the corner, we can always count on government to keep the chaos going. No “God rest ye merry gentlemen” for them. Take this as a lesson – Compliance knows no holiday. If you have not signed up for our employment law or OSHA compliance program, check it out once the good cheer of the holidays wears off.

New Pro-Unionization RulesIn early December the National Labor Rela-

tions Board (NLRB) issued two major decisions that will have an enormous impact on union or-ganizing activity in this country. Although both of these developments were long-expected from the Obama Board, dealers must now prepare them-selves to live in this new pro-union environment.

The Quickie Election Rule. First, the NLRB shifted the playing field by allowing unions to take advantage of modern communication meth-ods while streamlining the handling of disputed matters. The clear objective is to expedite the pe-riod between representation petition and election, thereby reducing the time for educating employ-ees on the benefits of retaining union-free status.

Historically, union elections have been con-ducted approximately six weeks after a union files a representation petition at the NLRB, and some-times even later, depending on issues that might be litigated at the NLRB. During that “campaign” period, employers were able to inform employees about the reasons to vote against the union. Al-though employers were required to give the union the names of eligible voters, they were not required to give email addresses or personal phone num-bers. That will all change when the new rules take effect on April 14, 2015. Here are the highlights:

• Voter Email Addresses and Phone Num-bers. Employers will have to provide available personal email addresses and telephone numbers for all eligible voters, which will presumably fa-cilitate more effective union communications ear-lier in the process.

• Earlier Elections. The only issues to be ad-dressed during a pre-election hearing are those necessary to determining whether an election should take place. Disputes over voter eligibility and inclusion in the voting unit will typically be deferred until after the election, at which point they would only be resolved if they would have an impact on the election. The end result is elec-tions that were traditionally conducted approxi-mately six weeks after the representation petition will now be concluded in less than three. This will make it much more difficult for employers to ef-fectively campaign against the union.

The Practical Impact of the Election Rule: The “streamlined” representation process should prompt dealers to prepare for potential union or-ganizing efforts and elections now. Here are a couple of actions to consider now:

• Properly train and identify your managers to understand and respond to union organizing tech-niques, particularly how to recognize the early warning signs of union activity.

• Consider suspending the collection of per-sonal email addresses absent compelling busi-ness reasons. If you have not obtained workers’ email addresses, you will not have any to give to a union, taking away that easy mode of commu-nication by the union with your employees. On the other hand, there may well be other reasons to gather personal email addresses, so this approach should be carefully weighed.

There is no question that the new procedures

6


the roundup

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

Regulators Never Sleep

7


MSADAwill provide a boost to unions that are eager to stem the tide of membership de-cline, and we can expect an uptick in orga-nizing activity as a result. Massachusetts dealers will not be immune to this activity. Quicker elections mean more employees will be voting on union representation on the heels of the negative emotions that drove the organizing activity to begin with. At the same time, putting email ad-dresses and phone numbers in the hands of union organizers earlier in the process will subject those employees to substantial pressure out of the gate. This procedural pendulum will fuel an increase in union activity, so take steps now to prepare for new organizing efforts within your ranks.

The Email Decision: Second, in a much-anticipated decision, the Purple Com-munications case, the NLRB ruled that employees have the right to use their em-ployer’s email system on nonworking time to engage in statutorily protected “Section 7” communications, which are communica-tions among employees discussing wages, hours, conditions of employment, and even union organizing. The 3-2 decision over-turns the Board’s 2007 Register Guard de-cision, which held that employees have no statutory right to use their employer’s email system for Section 7 purposes.

This decision means that an employer may not totally ban personal use of its email system by employees.

The decision does not require an em-ployer to provide email access to employ-ees who have not previously been given access to an email system. Nor does it pre-vent employers from monitoring employee use of computers and email for legitimate business reasons. However, the NLRB will look carefully at an employer that increas-es monitoring of employee emails during a union organizing campaign or monitoring directed at activist employees.

This important decision may well be a game-changer for union organizing. It grants new protections to non-union em-ployees who wish to engage in “protected” work-related communications, such as complaining about their dealership or su-pervisor, by using dealership email systems.

There will be many developments aris-ing out of this decision, such as how to identify “nonworking time” when consid-ering emails. We will keep you informed of developments as they arise.

Now on Your “To-Do” List: Both the new “quickie election” rule and the Purple Communications email decision mean that Massachusetts dealerships must educate themselves and their managers about how to understand both union and non-union protected activity under the labor laws.

New OSHA Recordkeeping RuleThe federal Occupational Safety and

Health Administration (OSHA) recently repealed a number of industry exemptions from its mandate that employers with 11 or more employees keep a workplace in-jury and illness log, including one for car dealers that dates back to the 1980s.

Effective January 1, 2015, car dealers must use OSHA Form 300 to record work-place injuries and illnesses. By February 1, 2016, dealers also must post an OSHA Form 300A summary of the workplace in-juries and illnesses that occurred in 2015.

Dealers can access an OSHA fact sheet on the rule at www.osha.gov/recordkeep-ing2014, as well as an online tool to train employees on how to fill out the newly re-quired forms, which is available at https://www.osha.gov/recordkeeping/tutorial.html.

As a concession to our industry, the fi-nal rule contains a commitment by OSHA to review the efficacy of these changes in two years, the direct result of the National Automobile Dealer Association’s oppo-sition to the exemption repeal, first pro-posed by OSHA in 2011.

Overall, the new recordkeeping rule sig-nificantly expands reporting requirements for employers while also mandating the publication of the employer-provided in-formation on the OSHA website.

The new reporting requirements expand the list of severe injuries that employers must report. Employers presently must notify OSHA of all work-related fatalities and work-related hospitalizations of three or more employees within eight hours of the incident. Under the new rule, employ-

ers will be required to report all work-re-lated fatalities, in addition to the follow-ing: all work-related inpatient hospitaliza-tions of one or more employees; all work-related amputations; and all work-related losses of an eye.

The new rule retains the requirement for reporting all work-related fatalities within eight hours of an incident, but it imposes a 24-hour reporting window for work-relat-ed inpatient hospitalizations, amputations, and losses of an eye. All employers are subject to these reporting requirements, even those employers who are otherwise exempt from routinely keeping OSHA 300 logs.

Finally in a surprise move, OSHA an-nounced that the fatality and injury re-cords will be posted online on the OSHA website. Online posting was never men-tioned by OSHA during the three-year rulemaking process. OSHA indicated that publishing severe injury and illness re-ports on the OSHA website was in part to publicly shame or “nudge” employers to take steps to prevent injuries so they are not seen as unsafe places to work.

For more information on this new rule, one can visit OSHA’s webpage at www.osha.gov/recordkeeping2014.

DOL VisitsWe have heard from several Worcester-

area dealers who have experienced visits from the U.S. Department of Labor seek-ing information on employee classifica-tions, compensation practices, payroll records, “independent contractors”, etc. – the usual pile of records that can be used to either confirm your compliance or hang you. Look for our future materials as we dig deeper into the new round of DOL visits. But, based on preliminary reports, they have mirrored those that have oc-curred over the last two years in the metro Boston area which we have detailed ex-tensively in our bulletins and magazine articles.

New Wage-Hour Guide PublishedThe MSADA 2014 Wage-Hour Guide

is now available. This is a comprehensive

the roundup


8

compliance tool we make available to ev-ery member dealer free of charge.

Since 2004 your Association has pub-lished a guide to assist franchised deal-ers in answering questions regarding overtime requirements, hiring practices, compliance procedures, and other wage-hour issues. MSADA has retained attor-neys John Donovan and Joseph Ambash at Fisher & Phillips LLP, a law firm with specific expertise in dealership employ-ment issues, to prepare a Guide to Wage and Hour Compliance and Other Human Resources Topics for Massachusetts Auto Dealers.

We have now revised the 2013 Guide to address recent law changes and clarify certain laws and regulations, including the new minimum wage law, the domestic violence leave law and the voter-approved mandatory sick leave law. The new 2014 Guide contains the necessary revisions and is now available for your dealership. You should discard any previous versions of the Guide.

We have sent each member dealer prin-cipal a complimentary hard copy. The Guide is available in downloadable PDF file on the MSADA web site, www.msada.org, for free with your member log-in or in hard copy bound version for a member price of $25 (non-member price of $50). Contact Jean Fabrizio at [email protected] to order the Guide.

Don’t Forget: The state minimum wage goes to $9/hr. on January 1, 2015.

2015 Auto Show, Dealer Sum-mit & Charity Gala

Are you registered for our Summit and Gala? Get on board today.

MSADA’s 58th edition of the New Eng-land International Auto Show will run January 15-19, 2015, at the Boston Con-vention and Exposition Center in South Boston.

In order to celebrate our Auto Show, dealers, their family, friends, and key em-ployees are invited to attend on Friday, January 16, our Eighteenth Annual Auto Show Charity Gala at the BCEC, from 5:00 p.m. to 10:00 p.m. The Gala benefits

our Charitable Foundation’s Automotive Technician Scholarship Program.

Prior to the Charity Gala we will con-duct a Dealer Summit at the BCEC from 2:00 p.m. to 5:00 p.m., at which we will have several speakers discuss on-going events in our industry, including our key-note presenter, Jim Ziegler.

Invitations have been sent out, so be sure to register as soon as possible. For member dealers and their key staff who at-tend the Dealer Summit, you will receive at registration two free Charity Gala tick-ets for each meeting attendee. Additional Charity Gala tickets can be purchased in advance for $50 each. (They will be $100 each at the door.)

We urge every dealer principal in this As-sociation to attend these events and bring your key managers with you to see first-hand what your Association is all about.

OEMs Forcing CFPB Policies on Dealers?

We have heard of Mercedes Benz and Porsche dealers in other states receiv-ing communications from their OEMs in which they are requiring their dealers to sign statements guaranteeing that the dealers are following the lending guid-ance rules the Consumer Finance Protec-tion Bureau (CFPB) has set out for lend-ing institutions. We have not heard of this happening here – yet. We have heard of similar statements being pushed by lend-ing institutions upon dealers in other states as well.

If you receive such a communication from your franchisor, or from any lenders, please let us know.

As a reminder, there is language in the federal Dodd-Frank law that specifically exempts dealers from the CFPB’s reach, and the CFPB is exerting pressure through lenders in a back-door attempt to squeeze dealers. I should also point out that under the laws of Massachusetts, dealers are not licensed to be lenders, unless they are en-gaged in “buy here-pay here” activities, so any attempt to treat dealers as lenders goes way beyond the parameters of our state fi-nance statutes.

State Deficit GrowsAs we reported last month, the Pat-

rick Administration announced the day after the November elections that the Commonwealth is facing a $329 million deficit in the current fiscal year, which ends on June 30, 2015. Well, as we go to press, state budget officials are admit-ting that the deficit is closer to $650 mil-lion. Several budget analysts who do not draw a state paycheck have opined that the deficit may actually be closer to $1 billion just as Charlie Baker is preparing to take over the reins of government on January 8.

So, while Baker’s team commences the process of formulating its own bud-get plan for the next fiscal year (FY16) to be announced in February, he simultane-ously will be forced to clean up Patrick’s mess as the outgoing governor exits center stage. Talking about going from the frying pan into the fire.

On a positive note, the state’s personal income tax rate will be ticking slightly downward. Taxpayers may recall that the personal income tax rate is pegged to in-come growth, so as growth goes up, the rate comes down. (It cannot move in the other direction without legislative approval.) As a result of such growth, the Massachusetts Department of Revenue announced that the personal income tax rate will decrease from 5.2% to 5.15% as of January 1, 2015. Don’t spend it all in one place.

The Patrick Unemployment Rate

As we go to press, the Patrick Admin-istration announced that the state’s unem-ployment rate for November dipped to 5.8%, after hovering in the low sixes for the last couple of months. Although the administration was taking great credit for this “extraordinary” achievement, it was quickly pointed out that the rate was 4.7% when the governor took office in January 2007.

Here’s to Wishing You a Merry Christmas, Happy Chanukah, and a Successful and Healthy New Year!

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MSADA

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wwww.msada.org Massachusetts auto Dealer DECEMBER 2014

MSADA Legal

A saleswoman comes to you and com-plains that a male technician repeatedly has made unwelcome, sexually-inap-propriate remarks to her, has brushed up against her while walking past her on a couple of occasions, and repeatedly has pressured her to date him, notwithstand-ing her constant rejections. Of course, as their employer, you know that the law requires you to take reasonable steps to remediate such conduct if and when you become aware of it.

But what if a “sexual harasser” is not your employee? What if the harasser is an independent contractor, or an employee of one of your vendors, or even a customer? What are your obligations then? You (and your managers) need to know that your obligations are essentially the same.

State and federal law prohibits sexual harassment in the workplace. The Mas-sachusetts Commission Against Discrimi-nation defines “sexual harassment” as “sexual advances, requests for sexual fa-vors, and/or verbal or physical conduct of a sexual nature when” either “submission to or rejection of such advances, requests or conduct is made either explicitly or im-plicitly a term or condition of employment or as a basis for employment decisions” or “such advances, requests or conduct have the purpose or effect of unreason-ably interfering with an individual’s work performance by creating an intimidating, hostile, humiliating or sexually offensive work environment.”

Generally speaking, “submission to or rejection of advances, requests or con-duct” implicitly become a “term or con-dition of employment” when an employer becomes aware of such advances, requests or conduct and fails to take reasonable steps to remediate them. You should know that, if the harassing employee is not the victim’s supervisor, such remedial mea-sures may have the added benefit of act-ing as a complete defense to liability for

the employer. Of course, if the harassing employee is the victim’s supervisor, the employer likely still will be on the hook, even if it takes appropriate remedial ac-tion. This, among other reasons, is why training your managers on these issues is so important.

The same obligation pertains if the sexual harasser is an independent contrac-tor, a vendor’s employee, or even a cus-tomer. Indeed, if one of your saleswomen comes to you and complains that a male customer is engaging in conduct similar to that described above and you do not take appropriate steps to remediate such conduct, you could be held liable for it. If you become aware of such conduct and do nothing to address it, you essentially make your employee’s submission to such conduct a “term or condition of employ-ment.”

In other words, by not addressing such conduct, you’re implicitly telling your employee “if you want to work here, you have to tolerate such conduct.” That con-stitutes “sexual harassment” in violation of the law, just as if both harasser and vic-tim both were your employees. The law focuses more on the workplace environ-ment, and whether it is sexually hostile, and less on the status of the person causing it. The law requires you, as an employer, to provide a workplace environment free of such conduct, and to remedy such con-duct when and if you become aware of it.

While addressing the issue with an independent contractor, a vendor’s em-ployee, or, especially, a customer can be a dicey proposition, not addressing the is-sue can be costly. For example, in a fairly recent case, two female cashiers of a truck stop company filed charges with the U.S. Equal Employment Opportunity Commis-sion, claiming that customers were engag-ing in conduct that included unwanted sexual touching and pressing, crude and obscene remarks, and sexual demands and

innuendos, and that their manager was aware of it, did nothing to address it, and even laughed about it and told them they had to “deal with it” working at a truck stop. The employer ultimately agreed to settle the charges for $70,000, and also, among other things, to provide training for managers and supervisors on conduct-ing sexual harassment investigations and to post a warning in the workplace that harassment of its employees will not be tolerated.

We tout the necessity of proper train-ing of your managers in this column fre-quently, but the importance of such train-ing cannot be overstated. Your managers need to know how to recognize sexual harassment, how to address it, and, per-haps even more importantly, how not to address it (i.e., by ignoring it, by telling an employee just to “deal with it,” etc.). And they need to know that it does not matter whether the harasser is an employee, in-dependent contractor, vendor’s employee, or even a customer. While addressing the sexual harassment of non-employees, es-pecially customers, may be difficult and uncomfortable for a manager, not address-ing such conduct can have far more del-eterious effects on your dealership.

t

Not Your Employee, Not Your Problem? Not Quite.

By Joseph W. Ambash and Jeffrey A. Fritz

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.

MSADAtroubleshooting10


2014 was a good year to be a govern-ment regulator and a tough time to be someone in their sights. Overzealous gov-ernment agencies such as the Consumer Financial Protection Bureau went after automobile dealers indirectly, while other state and federal agencies targeted dealers on issues such as advertising, recall readi-ness, and fair labor practices. The follow-ing year-in-review covers some of the big-gest compliance issues of 2014.

Recall Madness: Recalls dominated the news cycle in 2014, and dealers must remain on alert for how to handle future recalls. Once any notice of an outstand-ing safety recall is received, federal law prohibits the delivery of impacted new vehicles until the recall is remedied. However, federal law neither imposes an obligation on dealerships to know the safety recall status of used vehicles, nor prohibits the resale of used vehicles with outstanding safety recalls. It is recom-mended that used vehicles of the same make a dealer sells new be checked for outstanding, unremedied recalls (safety or emissions), since the dealership is authorized to do service or repair work involved. Important: If and when a deal-ership receives a recall notice indicating that certain used vehicles should not be operated and/or resold, they should not be operated or resold until the recall is remedied.

While Massachusetts law states no af-firmative duty to check for open recalls on vehicles, dealers should always run

a vehicle check report on a used vehicle taken in trade or purchased at auction in order to ascertain as much information about the vehicle as a consumer could.

Data Breaches and Dealer Precau-tions: Large data breaches were also a constant feature on nightly newscasts. While lower in profile than breaches at the big-box stores, the Federal Trade Commission (FTC) pursued several ac-tions against franchised automobile deal-ers for failure to safeguard customer’s personal information. Importantly, the FTC considers the mere ability of a third-party to access a customer’s nonpublic personal information (NPI) to be an of-fense on par with if the third party were to actually access the data, so no breach in data security can be considered “harm-less”. Dealers should work with a data security expert to ensure that their cus-tomer’s data is properly safeguarded in compliance with state and federal law, and review the NADA Dealer Guide to the FTC Privacy Rule and the Model Pri-vacy Notice to ensure that customers are provided with proper notice when deal-erships collect their NPI. Additionally, NADA’s sample Service Provider Dealer Data Access Addendum, available on the NADA website at www.nada.org/dealer-data, provides dealers with excellent tem-plate language for inclusion in any future contract with a service provider that will need to access customer information as part of the service.

Enforcement Actions: In December, the FTC announced that it was taking action against two auto dealer chains for deceptively advertising the cost of buy-ing or leasing a car. Because the dealer chains had agreed in previous consent orders “not to misrepresent any mate-rial fact regarding the cost and terms of financing or leasing any newly purchased vehicle,” the FTC sought civil penalties in addition to other forms of relief such as the imposition of extensive compli-ance monitoring, compliance reporting,

and recordkeeping requirements. One of the dealer chains has agreed

to settle the charges and, as part of the consent order, pay a civil penalty in the amount of $360,000, while the other plans to wage a costly fight in federal court.

Closer to home, the Massachusetts Attorney General in June announced a $175,000 settlement with a dealership group in Western Massachusetts over al-legedly misleading advertisements. The AGO’s regulations governing the adver-tising of motor vehicles can be found at 940 CMR 5.02 in the state’s regulatory code. Dealers must regularly review their advertisements to ensure compliance with state and federal regulations.

Fair Labor Practices: Several Massa-chusetts dealerships have reported recent visits by a Department of Labor Wage and Hour inspector. Dealers must ensure that their pay plans and employment practices are compliant with all state and federal law, as these DOL visits are happening frequently and seemingly at random.

The Legal and OSHA Compliance As-sistance Program unveiled by your As-sociation last June remains ongoing, and all dealer members that have not yet par-taken in the program are encouraged to do so. The employment law compliance portion of this program is offered in con-junction with the national employment law firm Fisher and Phillips, and it is de-signed to encourage members to review their pay plans, employee handbooks, and employment applications,andw to undertake a manager training audit.

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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.

Legal Compliance Year in Review


MSADA Accounting 11

Planning...The most successful people, companies, businesses, athletes, teach-ers, students, CAR DEALERS, etc. are the ones who are the best prepared and have done adequate planning.

In the dealership industry, planning is applicable in many different areas. Being a CPA, and tax and business advisor to many dealership clients, our firm focuses on year-end tax planning opportunities. I meet with all of my clients before year end and go through their trial balance and factory statement to look for opportuni-ties to plan income deferrals or expense accelerations. Nobody likes to pay taxes. With the increased rates and other added taxes that went into effect last year, it is even more important to strategize before year end.

As I review my clients’ trial balances as of October 31 or November 30, I ask questions similar to the following, and I follow up by reviewing the schedules and reconciliations:• Have your cash accounts and finance

reserve accounts been reconciled?• Have you collected on all your ac-

counts, warranty, and other receivables, and if not what is your plan regarding aged balances?

• Are there any aged items on the rebates or incentives schedules?

• How are returned checks being re-solved?

• Do you have any aged pre-owned units and do you believe a year end expense adjustment is necessary to record?

• How is advertising and floorplan assis-tance being accounted for?

• Are there any aged items on the work in process schedule and how controlled is the sublet schedule? Is it reconciled?

• When was the last parts physical? Was there an adjustment required? If a phys-ical has not been completed during the year, are there monthly reconciliations being done to compare the general led-ger to the parts pad?

• Are all your expenses accrued for, in-cluding credit card fees, bank charges, utilities, advertising, floorplan interest, etc.?(These are the common missed ex-penses that I have seen clients record on a cash basis vs. an accrual basis and, thus, might lose the accrued deduc-tion in the current year unless we went through their books and records to find this.)

• Has the payroll been accrued accurate-ly based on the correct number of days at year/month end? Have month-end/year-end bonuses all been accounted for? Have owner’s bonuses been ex-pensed and paid before the final year end payroll?Asking these questions and reviewing

the dealers’ schedules and reconciliations are what the best advisors do for their cli-ents. Having a year-end planning meet-ing to discuss items, such as whether you are going to purchase equipment, accel-erate repairs and maintenance type items, purchase office or other supplies before year end (these are just some examples of items that are discussed…There are many others that are discussed through conversations with the owners, general managers, CFO’s and controllers) are

critical to an effective and efficient tax planning strategy. I do this process at year end for my clients to ensure that I am providing them with the best ser-vice.

Preparing operational ratios and net cash flow analyses are also value-added services that should be looked at. Having this historical operational ratio analysis reviewed during the planning meeting can help to understand reasons for in-creases or decreases in profits during the years. In addition, these ratios can indi-cate key expense areas that may be high-er than industry averages. We can offer advice and recommendations for ways to improve these areas.

Having a net cash flow done at the tax planning stage is another critical com-ponent of planning. I can’t tell you how many times I have heard the words, “I make all this money during the year in profits, but I don’t have any cash.” This net cash flow analysis that we prepare shows the dealer the components of where the cash is.

Reviewing tax law changes and up-dates for both the current year and future years should also be discussed during planning. Other examples of items that should be discussed are sales and use tax compliance, 8300 compliance, the tangible property regulations and what is necessary to comply, and consideration of estate and gift tax planning.

As you can see, planning is an impor-tant aspect to the success of a dealership. As a tax and business advisor, I work with the dealers and provide them with ideas to minimize their tax burden. If you are not having tax planning provided as a service, you are missing out on an im-portant service that is needed. It is pos-sible that you may be overpaying your tax bill!!!

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Planning Leads to Success in All Aspects of Life and BusinessBy Chris StenmonCPA, MST

chris stenmon, cPA, mst is A PrinciPAl At the firm o’connor & drew, P.c. he Pro-vides Accounting, tAx, And business Advisory services to Auto deAlershiPs. he cAn be con-tActed At 617-471-1120 or [email protected].


AUtO OUtLOOK12 AUtO OUtLOOK


MSADA 13

MSADAdealer services14


“One of the biggest conundrums of the digital age is how to properly dispose of e-waste (containing) toxic materials such as lead, mercury, and cadmium.”

Bloomberg Businessweek’s Verne Kopytoff , January 2013

Electronic equipment has become a mainstay of our American way of life, both at work and play. In one way or an-other, it is an integral part of everything we do and own: TVs in our homes, GPS’s in our cars, cell phones and MP3 players in our ears, Blackberries and video games in our hands, and computers in our laps and on our desks. Americans own nearly three billion electronic products.

So it should come as no surprise that unwanted computers, monitors and TVs, and the like – referred to as electronic waste or “e-waste” – is the fastest grow-ing waste stream in the U.S. today. EPA figures suggest, in 2012 alone, America generated more than 350 million units of computer and TV-related e-waste, only 18 percent of which was recycled. In addition, it’s estimated that 235 million more units were stored in our basements, closets, empty offices, and garages – what e-cycling insiders call bone yards. According to Research and Markets, the global volume of e-waste generated is expected to reach 93.5 million tons in 2016 from 41.5 million tons in 2011 at a compound annual growth rate of 17.6%

from 2011 to 2016. Electronic waste is a big problem that

grows exponentially every day. Rapid advancement in technology is result-ing in new electronic products being launched, along with upgraded versions of existing products such as laptops and mobile phones flooding the market on a regular basis. This, coupled with an in-crease in the buying power of individu-als, is resulting in a decrease in the shelf life of electronic products. This trend is causing an accumulation of electronic waste that triggers the need to recycle electronic products. Incomplete or un-ratified legislation and municipality pro-grams give the average consumer reason-able options. For businesses, however, the options are fewer, the concerns and

challenges are greater, and mismanage-ment can be a disaster.

The biggest e-waste concern for Amer-ican businesses today, specifically as it relates to retired or end-of-life IT assets, is Data Security. To get a feel for what the financial damages can do to a company when they mismanage information, con-sider two of the bigger data breach cases. CyberFactors, a risk analytics company, estimated the cost of the TJ Maxx breach to be in the $175 million dollar range. They have the Best Buy breach pegged at “between $225 million and $4 bil-lion, depending on what happens with stolen data.” Last month, Home Depot reported its insurance coverage for this type of event is $100 million, which, most experts agree, won’t cover its 2014 data breach-related expenses. In a future article, I plan on discussing additional

e-waste concerns for your dealerships, including Environmental, Compliance, Logistics, Space, Insurance, Health and Safety. For now, let’s move on to how to limit your exposure to all these problems.

Get the ball rolling: The first step is a basic self-assessment as to where you’re at today. Ask yourself this: “What is the current state of our IT disposition (ITAD) program?” Consider what your actual needs and priorities are. Do you have a bone-yard full of stuff needing attention today? Are your e-waste items spread over multiple locations? What are you doing with your linear fluorescent bulbs? If facing these questions is not a pleas-ant task, you need to contact a reliable provider of electronics reclamation and recycling.

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Mark Babcock is the director of busi-ness development at MetalWave, Inc., the MSADA’s endorsed vendor for electron-ics reclamation and recycling. Metal-Wave is a veteran owned, New England-based company located in Amesbury. It is certified at the highest level of the only two standards the U.S. Government recognizes: R2 and e-Stewards. With a 25,000 square foot facility, and the broadest spectrum of in-house asset rec-lamation and recycling options in New England, MetalWave is able to offer the most effective, one-stop e-waste solution available today.

Getting started with MetalWave is quick and easy: Call or email Mark Babcock to schedule either an imme-diate pick-up or a meeting time for as-sessment and direction (603.686.4421 mbabcock@metalwaveinc). Upon pick-up, MetalWave will exercise the highest chain-of-custody standards and send im-mediate acknowledgements of pick-up arrival at our facility, and recovered as-set detail. Within 10 days you will receive a certificate of destruction.

mArk bAbcock is the director of business develoP-ment At metAl-wAve, inc., the msAdA’s endorsed vendor for elec-tronics reclAmA-tion And recycling.

By Mark T. Babcock

Electronics Recycling 101: The Basics


MSADA Accounting 15

Our analysis is based on retail used vehicle sales only and is compiled from our client dealer results for the first nine months of 2014. The results of our analysis are broken down overall and by dealership total sales volume.

Our study of used vehicle sales indicates that a majority of dealers increased their sales volume compared to the same pe-riod a year ago. As was noted with new vehicle sales, the per-

centage of dealers who saw unit sales increase was less than those who experienced sales volume increases. The disparity comes from the fact that the average used vehicle sales price has increased 4.3%. This translates into greater sales dollars even though unit volume has decreased. Part of the increase has been fueled by late model vehicles coming off lease that have greater value than trade-ins. Mid-size ($20-$30 million) dealerships experienced the most significant increases.

For those dealers who did increase used vehicle sales, the re-sults were extremely positive. Strong increases were noted on both a percentage basis and on the number of units. As evi-denced above, dealership size has a tremendous effect on the average number of units sold.

Profit margins on a percentage basis are fairly consistent across the board, with mid-size dealerships holding the strongest grosses both on a percentage and dollar basis. What is interest-

ing is the change in average gross profit dollars. While smaller dealers held steady, mid-size dealers experienced a drop. Larger dealers were able to increase their gross profit dollars but that appears mainly because they lagged behind the other groups in the previous year. While few small and mid-size dealerships had a little increase or even a slight decrease in their gross profit dollars, those that did were able to achieve solid additional dol-lars per unit.

Our analysis indicates that used vehicle sales have not ex-perienced the same increases that were seen with new vehicles. However, dealers should be heartened by the fact that margins, as well as gross profit dollars, have remained strong.

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If you have questions regarding this article, please contact Charlie Paolino at CPaolino@

DowneyCoCPA.com or 800-849-6022.

2014 Dealership Trends and Analysis for Used Vehicle Sales

By Charlie PaolinoCPA, PrincipalDowney & Company

Note: This chart excludes F&I income and dealer documentation fees.

The aluminum body revolution is an industry game changer, and its impact will only increase in the years ahead. By 2025, “seven out of 10 new pickup trucks produced in North America will be aluminum-bodied,” and “every leading automaker will have several aluminum body and closure panel programs,” according to a 2015 North American Light Vehicle Aluminum Content Study by Ducker Worldwide, a consulting and research firm.

To meet the coming demand, body shops will need to adapt to the challenges of working with aluminum with dedicated tools, equipment, and training. At the top of the list: the proper handling of messy and potentially explosive airborne dust caused by grinding or sanding.

While collision repair body shops have always performed sand-ing, grinding, welding, and cutting to produce dust, fumes, spatter, and sparks, this was just a nuisance when the industry revolved around steel vehicles. But the recent introduction of mass-produced aluminum-bodied vehicles has brought this dust into the spotlight.

Aluminum dust poses a combustion hazard in high concentrations, and it is particularly combustible, even explosive, when airborne and finely separated. If a typical vacuum containing dry aluminum dust were to draw in a grinding spark or even experience the spark from static electricity, it could ignite and cause a fire or explosion.

Cross-contamination also occurs when aluminum dust in the air settles on steel panels or iron oxide dust settles on aluminum panels, prior to primer or paint. This contamination will result in poor adhe-sion and quality problems months and years after painting a panel. This can pose a real business risk to a collision repair shop that is forced to deal with warranty issues and customer come-backs.

Ford, for its part, is at the forefront of setting the guidelines and requirements for working with aluminum-bodied vehicles for both Ford dealership and independent body shops.

Through Ford’s National Body Shop Program and its 2015 F-150 Collision Repair program, the company addresses the full range of aluminum issues: from isolating aluminum vehicles from traditional steel repairs with a separate room or curtain system, to dealing with aluminum dust and dedicated aluminum welding, riveting, and dent extraction systems.

Among the 2014 requirements for Ford’s National Body Shop Program is a “dedicated aluminum dust extraction system with wet mix technology.”

A wet mix air filtration system safely captures aluminum dust within the body shop at its source while using water to ensure po-tentially explosive aluminum dust particles do not become airborne within the unit.

One such system, for instance, directs the air stream and alu-minum dust through a series of air filtration baffles that bursts the air bubbles and thoroughly wets the dust before the air exits the vacuum.

“The transfer of safe, high efficiency, aluminum dust-capture technology for auto body collision repair is going to make our in-dustry safer, cleaner, and more efficient,” says Gary Gardella Jr., co-owner and production manager at County Line Auto Body in Howell, N.J., a high-production, Ford certified collision repair shop that repairs about 50-70 vehicles per week.

Gardella says he has several auto body technicians participating in Ford’s F-150 Collision Repair program and is testing several of the vacuum and air-powered units around his shop.

In wet mix technology, one challenge is that a wet aluminum sludge remains at the bottom of the vacuum. This needs to be emp-tied on a daily basis to ensure safe operation. While some units re-quire the user to drain the fluid, then extract the remaining sludge with a squeegee, this method fails to fully remove the sludge caked on the sides of the unit. This allows a potentially dangerous build up of aluminum to accumulate.

One such immersion separator in the marketplace involves a gravity feed drain with a funnel-shaped bottom and water spray-down system inside. This enables a safer, full-system, flush out of aluminum sludge and facilitates daily maintenance. The aluminum sludge, in turn, must be properly filtered to satisfy regulation before the discharge can be emptied into the public sewer system. The im-mersion separator is designed to filter out alu-minum residue as it exits the unit, so it can be safely discharged into public sewers.

As collision repair shops prepare for the lucrative new business that aluminum body-work such as Ford’s F-150 will bring, outfit-ting their shops with the necessary equipment will position them for a profitable ride.

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For more info, contact Clayton Associates, Inc. at 732-363-2100; 800-248-8650 toll free; email [email protected]; visit www.jclayton.com.

MSADArepair16


del williAms is A technicAl writer bAsed in torrAnce, cAliforniA. he writes About business, technology, heAlth And educAtionAl issues.

By Del Williams

Collision Repair Shops Brace for Challenges of Aluminum Bodywork


MSADA security 17

With hundreds of thousands of dollars in assets at risk and susceptible to natural and technological hazards, the need for video surveillance and remote monitoring hard-ware in car dealerships is ever-increasing. Harnessing an effective surveillance system not only acts as an effective management tool, but also provides peace of mind to dealership owners whose majority of assets are located outside and exposed to hazards, including harmful weather and would-be perpetrators and vandals.

IP-based security cameras replace the age-old surveillance technology relying on tape storage, and they store data directly on video servers located either on the internet or through a local area network. Implementing surveillance systems can cover gaps or flaws in security that could have a significantly damaging effect on not only inventories, but also on the safety and security of employees and customers.

When it comes to the automotive indus-try, especially with dealerships with large, expansive lots, IP-based cameras are espe-cially effective because of their scalability and flexibility, remote accessibility, and easy and reliable installation.

An IP network video system can easily grow with a user’s needs, with users also be-ing able to access real-time video from any authorized computer or device. IP cameras also have the ability to provide remote re-

cordings, allowing them to monitor custom-ers’ activity from afar and keep accurate account of employee activity, providing unique advantages for the dealership.

With an increase in IP-based surveillance systems, especially those fully equipped with video analytics technology, owners and their designated security and management teams are able to accurately monitor the ex-act amount of customers who have entered the facility, pinpoint which customers look at which cars, and monitor and record mon-etary transactions. In regards to analytics as a management tool, the ability to provide intelligent video analytics gives the users the ability to monitor customers’ habit and movement trends.

One of the greatest advantages of IP cam-eras is that security staff can choose to only record when motion is happening on the screen. Also, the instant anything out of the ordinary occurs, security staff can be noti-fied via SMS text or email.

With features like video alerts and mobile viewing, increased surveillance allows secu-rity personnel more flexibility and mobility. Rather than having to be posted at a monitor throughout the day, they can actively patrol the facility while being able to monitor other areas from any authorized device.

The IP-based systems are a reliable de-tection method able to distinguish the dif-ference between any movement of vehicles, people and objects, compared to irrelevant movements such as shadows, swaying trees, changes in light, animals, and rain. By pro-viding such an in-depth analysis of activity, they are able to decrease the amount of false alarms detected significantly while notify-ing security personnel of a potential incident during off hours. Not only does the use of IP security camera systems provide protection to staff and customers, but it also prevents theft and loss of inventory for the dealership.

Because of its cost-efficiency and conve-nience, the use of IP cameras and their wire-less capabilities can provide a way to ensure that all areas of the facility can be carefully monitored, whether or not security person-nel is physically present. All of the foot-

age obtained can be recorded remotely and uploaded to the internet instantly, allowing any individual with authorization to access footage through any digital device. Surveil-lance systems act as an investigative tool and deterrent that detects any activity in a moni-tored area, providing a detailed analysis.

Overall, the use of enhanced video sur-veillance systems provides a safer environ-ment for both employees and clients while providing unique management advantages. From providing high resolution image qual-ity, dealerships able to monitor all real-time and historical activity. If an incident occurs, the dealership is able to retrace the footage obtained, and identify the specific details of the incident.

Ideally, by utilizing high-tech surveillance systems, risk of crime is reduced by its subtle yet sophisticated appearance to customers and possible thieves. By preventing damag-ing scenarios such as theft, inventory dam-age, and false claims, dealerships are able to maximize their profits. In an industry where the risks of unforeseen and unpredictable events are significantly higher than in other businesses, it is essential that surveillance systems are utilized to ensure complete pro-tection on a dealership’s assets, employees, and customers.

In terms of overall security and risk man-agement, implementing unique monitoring solutions is one of the first steps that should be taken to reduce security risk. Dealership management should make a risk-based de-cision on security technology implementa-tion. Although surveillance systems can be complex, implementation provides undeni-able advantages to car dealerships; making a management decision on security is some-thing that should absolutely be considered in today’s world.

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IP-Based Cameras as an Advantage for Dealers

Herby Duverné Principal & CEO of Taino Consulting Group

Matthew Riley Operations Manager at Taino Consulting Group

Taino Consulting Group is a Security-Risk Management firm headquartered in Mas-sachusetts. We focus on cyber and physical security, and emergency management in the commercial, transportation and government markets. We can be reached at (617) 797-9316 or [email protected]

18 COVER STORY

From Toys to the Top

Kevin Holmes, President and CEO of Tri State Truck Center in Shrewsbury, has been a businessman since the age of 13. Building plas-tic model trucks as a hobby ignited his love for trucks, and he soon turned a hobby into his career. At the age of 13, Holmes started his first business in the automotive and trucking industry, polishing cars and trucks in his parent’s driveway in Roslindale, Massachusetts. Always self-motivated and determined, Holmes taught himself diesel repair.

“I wanted to know everything I could about trucks, so the next logical step for me was to learn how to fix them,” Holmes says. “I had a busy schedule in high school, between playing hockey for Catholic Memo-rial and keeping up with my studies, but I always made sure I found the time to work on trucks; I just loved everything about them.”

Holmes was offered an opportunity to play hockey at North-eastern University after graduating from Catholic

Memorial, but he turned it down to pursue his passion in the trucking industry. After gradu-

ating from Catholic Memorial in 1980,

Kevin Holmes’ success recognized with American Truck Dealers’ 2015 Dealer of the Year Award nonination


COVER STORY 19

From Toys to the TopHolmes began working for McCarthy Industries, a local leas-ing company, where he ran their maintenance facility. In 1984, Holmes invested his lifesavings to open a gas station in Ash-land and became the youngest service station lessee in Getty Petroleum history. “It is a humbling experiencing putting all you have into something that may or may not work out. But it was an experience that laid the foundation for where I am to-day, and for that I am so grateful I took the risk,” Holmes says.

Risk did not turn quickly into reward for Holmes, but he be-lieved in his dream. He worked tirelessly to achieve what he knew was possible - owning his own dealership. Holmes will be the first to tell you that he attributes much of his success to those who stood by him and believed in his dream as much as he did himself.

“I am lucky that I was surrounded by likeminded people, who believed in my vision, and wanted it as badly as I did,” Holmes says.

After two years of preforming car and truck servicing at the gas station, the truck servicing demand increased, necessitat-ing a new facility, Tri State Truck Repair. Tri State Truck Re-

pair employed 7 people from 1986 to 1989 before becoming a Freightliner Parts and Service Dealership, located in Southbor-ough.

In 1990, Holmes’ risk paid off, and Tri State Truck Repair grew to Tri State Truck Center, a full service dealership offer-ing sales, service, and parts. Today, Tri State Truck Center is a 60,000 sq. ft. dealership that sits on a 25-acre site. Seven em-ployees turned into 116, many of whom have been standing by Holmes’ side for the last 30 years.

“I have the best employees in the business, I have no doubt about that,” Holmes says. “They are loyal to me, and more im-portantly they are loyal to our company and customers. They provide the best service to our customers, and they are the

MSADA


ones that keep our business running. I am a proud em-ployer.”

Holmes’ story emulates the American Dream, which many today, unfortunate-ly, do not see as possible anymore. Holmes firmly believes that it is his re-sponsibility to give back to members of his community who have struggled, and he is an avid supporter of many programs that work to give those less fortunate an op-portunity and hope.

Three years ago, Holmes introduced “Haulin’ 4 Hun-ger”, a campaign focused on allocating the money that used to be spent on customers’ annual Christmas gifts to feeding families in need in the Worcester area. Employees at Tri State Truck Center put together packages that include a fresh turkey and trimmings to feed a family of five that are delivered per-sonally by Holmes and his employees to food pantries in the Worcester area.

“Kevin and his employees at Tri State Truck Center are the an-gels that have answered the prayers of all the people at the Mus-tard Seed,” says Donna Bomiziano of the Mustard Seed Soup Kitchen in Worcester. “The fresh meals they are providing allow us to feed families that day without worry and give our clients a chance to celebrate the day with their families.”

Holmes has also been a contributor to Dana-Farber Cancer Institute through his relationship with Dennis Moran, a Fram-ingham native who ran the marathon for 17 years in support of Dana-Farber, until he himself was diagnosed with a brain tumor

that left him in-capable of run-ning. Kevin’s relationship with Dennis began when he heard that Dennis was trying to get back in the race, but instead of run-ning he would be cycling.

“I knew Den-nis needed a

hand cycle to begin his training. I also knew that a brain tu-mor was not going to keep Dennis from competing. His tenac-

ity is inspiring, and I knew I needed to be a part of his incredibly journey,” says Holmes. Tri State Truck Center purchased a hand cycle for Dennis, and since 2012 he has been cruising down Boylston Street for Team Dana-Farber.

On a national level, Holmes aided the relief ef-forts after two major natural disasters crippled parts of the nation. After Hurricane Katrina and the tornado in Tuscaloosa, Alabama, Holmes donated two trucks, trailers, drivers, and fuel to carry supplies that were needed most during the

relief efforts after both natural disasters. “The country rallied together to help aid those suffering after the completely devas-tating natural disasters, and I did my part by donating those trail-ers” says Holmes. “I participate in philanthropic projects not be-cause I want any recognition, but because I am fortunate enough to have the resources to help make a difference.”

Holmes’ hard work and his overall contributions to better-ing his community have rightfully earned him a nomination for American Truck Dealers’ 2015 Dealer of the Year Award. Holmes is in the company of five other stellar nominees, and the winner and runner-up will be announced at the 52nd annual ATD Convention and Expo in San Francisco on January 23, 2015.

“This is an incredible milestone in my career. I am humbled to be in such great company, and just being nominated is a major honor and accomplishment in my opinion,” says Holmes.

“MSADA is proud to have Kevin carrying our banner into the ATD competition next year,” said Robert O’Koniewski, MSA-DA Executive Vice President. “Like many of his fellow dealers here and around the country, Kevin completely exemplifies all the attributes of the successful small businessman giving back to the community in a substantial manner, and he is worthy of this recognition among his ATD peers.”

“If I have learned anything in my journey to where I am now, it is this: if you want something, go after it, and do not stop until you achieve it.” Holmes’ passion for trucks, his admirable work ethic, and his unwavering commitment to making his dream into a reality have earned Holmes industry leader status, and a much-deserved nomination for ATD’s 2015 Dealer of Year Award. The model trucks that sparked Holmes’ interest in trucks still line the walls of his office today as a subtle reminder of the 13-year-old businessman with a dream of owning a dealership.

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17

www.msada.org Massachusetts auto Dealer NoVEMBER 2014


JanuaryThe 2014 New England International Auto Show Charity Gala and Casino Night added festivity to the Auto Show in January.

FebruaryTIME Dealer of the Year Brian Kelly of the Kelly Automotive Group shared valuable business philosophies. “You take good care of the employees, they take good care of customers. It’s as simple as that.”

March Frank Hanenberger of MetroWest Subaru in Natick and Brattleboro Ford Subaru in Vermont joined the MSADA Board of Directors. Also, Hanenberger’s stores won the Subaru Stellar Care Award for customer care and satisfaction -- the highest honor a Subaru dealer can achieve. Hanenberger says love for the industry, coupled with his nature as a self-identified political junkie, made him decide to join the MSADA Board in 2014.

AprilMSADA sponsored two Cape Cod Tech students to showcase their skills at the National Automotive Technology Competition at the New York Auto Show.

MayThe 74th MSADA Annual Meeting played host to almost 200 dealer and associate member attendees at the Mandarin Oriental Hotel in Boston on May 2.

JuneCarla Cosenzi, President of TommyCar Auto Group, which consists of Country Nissan in Hadley, Country Hyundai and Northampton Volkswagen in Northampton, and Patriot Buick GMC in Charlton, was awarded Top 10 Businesswomen of the Pioneer Valley by Women Business Owners.

Across the Commonwealth, dealers showcased efforts to be environmentally friendly, from massive solar panel installations to smaller tweaks like hands-free faucets.

Th e Ye a r i n re v i e w2 0 1 4


22

JulyContinuing with the MSADA’s roster of Education Compliance Seminars, the association hosted a live seminar at the Crowne Plaza Hotel in Natick, in which NADA senior regulatory attorney Paul Metrey and local auto dealer attorney Scott Silverman provided an overview of NADA’s optional Fair Credit Compliance Program, and recent enforcement actions by the Federal Trade Commission and the Massachusetts Attorney General’s Office on vehicle advertising.

AugustIn light of the overwhelming number of recalls receiving coverage in the media, the National Highway Traffic Safety Administration rolled out a VIN-searchable

safety recall data base on www.safercar.gov. Highlighting the VIN search tool, the NADA provided a list of questions and answers designed to respond to questions dealers are asking about how best to handle recalls impacting new and used inventory and service vehicles.

SeptemberThe MSADA dealer delegation traveled to Washington D.C. to represent the industry at NADA’s annual Washington Conference.

In Boston, Internet Sales 20 Group workshop attendees enjoyed three days full of information, resources, and networking.

OctoberThe community mourned the loss of Michael Iovanna, president of the Pride Motor Group. Friends remembered how Iovanna always put people first, and the Kelly Honda dealership nearby on the Lynnway displayed a message on its electronic sign that read “R.I.P. Mike I.”

NovemberMSADA prepares for the 18th Annual Auto Show Charity Gala on Friday, January 16, at the Boston Convention and Exposition Center, in South Boston. The Gala benefits the association’s Charitable Foundation’s Automotive Technician Scholarship Program.

Th e Ye a r i n re v i e w2 0 1 4

23


December Kevin Holmes of Tri State Truck Center named one of ATD’s Truck Dealer of the Year nominees.

Bulletin #1 – Storms and Store ClosuresBulletin #2 – Reminder – HR Seminar – PlymouthBulletin #3 – Reminder – HR Seminar – Plymouth Bulletin #4 – FTC to Announce Sweep Against Dealer AdsBulletin #5 – FTC Action Against Dealer AdsBulletin #6 – Form 8300 ReportingBulletin #7 – HR Compliance Seminar in BostonBulletin #8 – HR Compliance Seminar in Boston – ReminderBulletin #9 – Doc Fee Sales TaxableBulletin #10 – Fair Lending Compliance ProgramBulletin #11 – Health Costs on W2 FormsBulletin #12 – HR Compliance Seminar – DedhamBulletin #13 – Reminder – HR Seminar – DedhamBulletin #14 – Reminder – HR Seminar – DedhamBulletin #15 – NADA UpdatesBulletin #16 – Ad Regulations ReminderBulletin #17 – NADA Webinar on FTC Ad RulesBulletin #18 – DOR Tax Alert re Doc FeesBulletin #19 – Union Avoidance WebinarBulletin #20 – Minimum Wage, Unemployment Insurance UpdateBulletin #21 – NADA Workforce StudyBulletin #22 – Unemployment Insurance Rate FreezeBulletin #23 – MSADA v. Tesla – SJC HearingBulletin #24 – MSADA v. Tesla – SJC Hearing – Video LinkBulletin #25 – NADA Workforce StudyBulletin #26 – Minimum Wage, Unemployment Insurance ReformsBulletin #27 – IRS Tax Guidance on OEM Imaging PaymentsBulletin #28 – Memorial Day HolidayBulletin #29 – NADA UpdatesBulletin #30 – Federal Red Tape EliminatedBulletin #31 – Minimum Wage, Unemployment Insurance CompromiseBulletin #32 – EV Rebate ProgramBulletin #33 – REMINDER – NADA Workforce StudyBulletin #34 – TIME DOY Nominations OpenBulletin #35 – Workplace EV Charging Station Grants AvailableBulletin #36 – Gov Signs Minimum Wage, UI ReformBulletin #37 – Supreme Court Overturns NLRB Recess AppointmentsBulletin #38 – Independence Day HolidayBulletin #39 – Fair Credit and Ads SeminarBulletin #40 – REMINDER – Fair Credit and Ads Seminar

Bulletin #41 – EV Rebates WebinarBulletin #42 – TIME DOY Nomination Reminder

Bulletin #43 – FTC & Ads Seminar ReminderBulletin #44 – Employment Law Seminar in Worcester

24


Th e Ye a r i n re v i e w

Bulletin #45 – Sales Tax HolidayBulletin #46 – MOR-EV TrainingBulletin #47 – Employment Law Seminar ReminderBulletin #48 – Labor Day HolidayBulletin #49 – Election Day VotingBulletin #50 – Tesla SJC DecisionBulletin #51 – Lemon Law Window Stickers SurveyBulletin #52 – Domestic Violence LeaveBulletin #53 – Wage-Hour SeminarBulletin #54 – New OSHA Recording RuleBulletin #55 – FTC Increases Do-Not-Call FeesBulletin #56 – REMINDER – Wage-Hour SeminarBulletin #57 – Columbus Day HolidayBulletin #58 – Employment Law SeminarBulletin #59 – Reminder – Employment Law SeminarBulletin #60 – Reminder – Employment Law SeminarBulletin #61 – NADA Webinar on OSHA Recording Rule ChangeBulletin #62 – Election Day Voting Time OffBulletin #63 – Veterans Day HolidayBulletin #64 – Preliminary 2015 Fuel Economy GuideBulletin #65 – FTC & AG Target Online AdsBulletin #66 – Employment Law SeminarBulletin #67 – Employment Law Seminar ReminderBulletin #68 – Employment Law Seminar ReminderBulletin #69 – Employment Law Seminar ReminderBulletin #70 – NLRB New Unionization RulesBulletin #71 – New Wage-Hour GuideBulletin #72 – Year-End ReportingBulletin #73 – DOL Investigates DealershipsBulletin #74 – Holidays 2015

2 014 Legal Bulletins

from Around the HornNEWS


25

Automotive dealership confidence remains at a high level, and customers are continuing to buy and lease new cars, according to a recent survey of the auto dealer industry in which BlumShapiro, an MSADA associate member, participated. The survey was driven by Baker Tilly International, one of the world’s leading networks of independent accounting and business advisory firms, of which BlumShapiro is an independent member.

The results of the survey found that 76 percent of respondents expect sales to increase across finance and insurance, new, used, and service businesses. Rick Parmelee, a BlumShapiro partner who specializes in automotive dealerships, said this survey shows a continuing trend of improvements in the industry over the past few years.

“The availability of relatively inexpensive sources of

financing and attractive leasing options are providing a boost to automotive sales. Most dealers believe the service business is a way to lure customers back into their stores. There are so many prospective touches to a new car customer today. Social media

and data mining provide dealers with a wealth of information on their customers, and many are using it to their advantage,” Parmelee said. “This is a continuation of the good news we have seen for the industry over the past several years, and it is directionally consistent with what we hear from our clients as well.”

The high-level analysis and commentary in the findings report will allow auto dealerships to compare their expectations on sales, growth, investments, and expenditures over the next

12 months against others across the U.S. The survey covered 245 dealership points mostly concentrated in the midwest, northeast, and southeast of the United States.

BOSTON

Industry Survey Shows Auto Dealers Confidence Remains High

76 percent of respondents expect

sales to increase across finance and, insurance, new, used, and service

businesses.

from Around the Horn26 NEWS


RAYNHAM

Mastria Mazda to Assist Five Charities with Mazda Drive for Good Event

It is often said that it is better to give than to receive during the holiday season, but the Mazda Drive for Good event at Mastria Mazda is allowing car buyers to do both at the same time. From now through Janunary 2, purchasers and lessees of a new vehicle at Mastria Mazda can allocate a $150 donation from Mazda to their choice of five worthy charities. Furthermore, each test-drive will result in one hour of charitable service from a Mazda employee or business partner.

In addition to a list of national charities that includes the American Heart Association, American Red Cross, Mazda Foundation, and St. Jude Children’s Research Hospital, buyers at Mastria Mazda can choose to support the Doug Flutie, Jr. Foundation for Autism, based locally in Framingham. Founded by former Boston College football star Doug Flutie Sr. and his wife Laurie after their son was diagnosed with autism at the age of three, the Flutie Foundation provides less fortunate families with educational and recreational opportunities, special equipment, and tools for their autistic children.

“Regardless of the charity they decide to support, car buyers can feel confident that they’re making a real difference for people in need as they find their perfect Mazda vehicle this holiday season,” said Barry Chew, general sales manager of Mastria Mazda. “Even if our customers aren’t quite ready to make a purchase, a simple test-drive will ensure that someone will be dedicating an hour to charitable service in an age where we all seem to have so little time.”

WATERTOWN

2015 Lexus RC Coupe Arrives to Heat Up the Holiday Season

With the holiday shopping season picking up momentum in the Bay State, luxury-car buyers can now add Lexus’ first all-new coupe in 15 years to their wish lists. Currently on sale at Greater Boston Lexus dealers, the 2015 Lexus RC luxury coupe boasts aggressive exterior styling that is backed by powerful engines and a rigid body design.

The new Lexus RC makes a bold first impression up front, donning large air vents on its bumper, a lower and wider interpretation of the brand’s spindle grille


MSADA 27

and LED headlights underscored by L-shaped daytime running lights. In the engine bay, the standard RC 350 houses a 3.5-liter V6 that produces 306 horsepower and 277 pound-feet of torque, which are transferred to the rear wheels by an eight-speed Sports Program Direct Shift automatic transmission with paddle shifters. For added grip on the road, the RC 350 is also available with all-wheel drive and a six-speed automatic gearbox, while an F SPORT model raises the emphasis on style and performance with unique design touches, an Adaptive Variable Suspension system and the available Lexus Dynamic Handling system.

“Lexus has put a lot of effort into boosting the emotional appeal of its existing models in recent years, but the development of an all-new sports coupe like the RC shows just how dedicated the brand is to winning the hearts of driving enthusiasts,” said Vincent Liuzzi, general manager of Lexus of Watertown. “Buyers of the RC will get all the reliability and quality that is expected from Lexus, but their commutes will be anything but ordinary when they get behind the wheel.”

Designed for drivers who desire the utmost in power and acceleration, the high-performance 2015 Lexus RC F is set in motion by a 5.0-liter V8 engine that churns out 467 horsepower and 389 pound-feet of torque, enabling a sprint from 0 to 60 mph

in just 4.4 seconds. Not to be confused with the aforementioned RC 350 F SPORT, the upmarket RC F has received a number of functional exterior modifications compared to the regular coupe models, including a carbon-fiber hood, roof and active rear wing as well as air scoops and cooling ducts throughout the front of the car. Inside, the driver-focused cockpit features instrument meters inspired by the Lexus LFA supercar, all-new high-back seats and the brand’s first elliptical cross-section thick-grip steering wheel.

MSADA28


NATICK

Ram 1500 EcoDiesel Lauded as 2015 Green Truck of the Year

The Ford F-150 has stolen recent headlines after switch-ing to a lightweight all-aluminum body for the 2015 mod-el year, but that controversial move wasn’t enough to earn the vehicle the title of 2015 Green Truck of the Year from Green Car Journal. Instead, the honor went to the new Ram 1500 EcoDiesel, which currently returns the highest highway fuel economy of any pickup truck in America while boasting an impressive 9,200-pound maximum towing capacity.

The popularity of the EcoDiesel model recently prompted the Chrysler Group to double production of the truck, boosting it to 20 percent of the manufactur-ing mix for the Ram 1500. Last month, overall sales of Ram pickup trucks rose by 33 percent compared to Oc-tober 2013, totaling 39,834 units. Nearly 360,000 of the brand’s pickups have found new homes through the first 10 months of 2014, a 23 percent increase over the same period last year.

from Around the HornNEWS

nAdA Updateby Don Sudbay

Usually in this column I will write about national NADA issues like CFPB, dealer-manufacturer relations, or the health of our dealer franchise system. As you look through this magazine and recall all that MSADA has done in the past year, I want to give a well-deserved “pat on the back to our staff, our executive officers and your Board of Directors. We are very fortunate to have the services of Bob O’Koniewski. He works extremely hard on behalf of all of us and is well re-spected by other state ATAE’s across the country. Our Presi-dent, Scott Dube, represents us all well and runs a great board meeting, keeping us all focused on the important matters. Our longtime Treasurer, Jack Madden, has helped to insure that we are the financially strong organization that we are today. The success of MSADA didn’t just happen; it was a result of the dedicated work of these people and those that came before them. The next time you run into a director, officer or staff member please remember to let them know how much you appreciate the work that they do for all of us.

Best wishes for a happy and prosperous New Year.

A Special Note from NADA Chairman Forrest McConnell:

“A new comprehensive study of more than 8.2 million auto loan contracts by the consulting firm Charles River Associates concluded that the proxy method used by the Consumer Financial Protection Bureau to measure for unin-tended discrimination in an auto lender’s portfolio is ‘con-ceptually flawed’ and ‘inherently unreliable.’

“The peer-review study, Fair Lending: Implications for the Indirect Auto Finance Market, commissioned by the American Financial Services Association and released on November 19, found significant bias and high error rates.

“The CFPB, which issued its guidance in March 2013, has used a proxy method to support claims of unintended discrimination against—and extract settlements from—auto lenders and to pressure auto lenders to change the way they

compensate dealers for originating finance contracts.“The study found that the CFPB’s methodology frequently

misidentified the background of consumers and dramatically overestimated differences in dealer reserve paid by different groups of consumers. For example, the CFPB’s method over-estimates African-American borrowers by 41 percent.

“The study also concluded that the CFPB’s examina-tion of differences in dealer reserve at the portfolio level is meaningless because it fails to account for legitimate rea-sons for pricing differences at the retail level.

“Dealers have also offered up an optional program that addresses fair credit risks. Based on a fair credit risk miti-gation model developed by the U.S. Department of Justice in 2007 to resolve fair credit investigations of two dealers, NADA released its comprehensive Fair Credit Compliance Policy & Program in January 2014.

“When implemented, NADA’s program documents in-stances when dealers discount interest rates and ensures the discounts are for legitimate business reasons, like meeting a competing finance offer. Rather than require costly and inaccurate statistical testing, the program controls for risk on the front end of the transaction.

“Many dealers, including several large dealer groups, have implemented the program.

“Meanwhile, the CFPB has repeatedly failed to fully respond to questions from Congressional Democrats and Republicans urging disclosure of its testing methodology, which is lacking in the bureau’s guidance.

“Based on this and other flaws in the guidance, 146 mem-bers of Congress—which includes 90 Republicans and 56 Democrats—have cosponsored legislation in the U.S. House of Representatives to rescind the CFPB’s 2013 guidance.

“The bill, H.R. 5403, co-sponsored by Reps. Marlin Stutzman (R-Indiana) and Ed Perlmutter (D-Colorado), also requires transparency and public input prior to the issuance of future CFPB guidance on auto lending. For more infor-mation, visit www.nada.org/cfpb.

“Moving forward, the federal government should consid-er promoting broad industry adoption of NADA’s fair credit program, which addresses fair credit risks at the retail level while preserving competition in the marketplace.”

NADA Releases New Video on the Economic Benefits of Local Dealers

America’s new-car and -truck dealers are the economic backbone of Main Street, according to a new animated vid-

New Study Discredits CFPB’s Fair Credit Testing Method

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


211522

MSADA Accounting30 MSADAnAdA Update

eo released this month by NADA as part of its “Get The Facts” initiative.

“Dealers provide more than 1 million jobs nationwide in sales, servicing, and management that average $53,000 per year plus benefits and with room for advancement,” NADA says. “Dealers drive job creation in other businesses as well, from local broadcasting to construction to finance. Adding these jobs and related fields, local dealers are responsible for another million jobs nationwide.”

“Dealers also generate more than 15 percent of state and local taxes nationwide, and pay billions in property, sales, and income taxes that fund local schools, police and fire de-partments,” adds NADA. “These local dealers compete on pricing and financing, and provide extra accountability on warranty and recall issues, too—benefiting consumers and local communities everywhere.”

NADA’s “Get The Facts” initiative is designed to inform policymakers, opinion leaders, and the media about the numerous benefits of the dealer franchise network through a variety of multimedia resources and videos available at www.nada.org/GetTheFacts.

Truck Dealers Nominated for National Award

The American Truck Dealers (ATD), Heavy Duty Truck-ing magazine and Procede Software announced today the nominees for the 2015 Truck Dealer of the Year award. The six nominees are:• Brian M. Bruckner, president of Bruckner Truck Sales,

Inc., with multiple locations in Colorado, Kansas, New Mexico, Oklahoma and Texas;

• Kevin G. Holmes, president and CEO of Tri State Truck Center, Inc., in Shrewsbury, Massachusetts;

• Scott McCandless, president of McCandless Truck Center, LLC, with multiple locations in Colorado;

• Robert A. Neitzke, president of GATR Truck Center, with multiple locations in Iowa and Minnesota;

• Kari J. Rihm, president and CEO of Rihm Kenworth, with multiple locations in Minnesota and Wisconsin; and

• Jim Sayre Jr., president of GL Sayre Inc., in Conshohock-en, Pennsylvania. Nominees for the national award will be evaluated by a

panel of professors from Indiana University’s Kelley School of Business on dealership performance, industry leadership, and civic contributions.

The nominees were selected by state, metro, and national association leaders.

The winner and runner-up will be announced on Friday, January 23, 2015, during the 52nd annual ATD Convention & Expo in San Francisco, which runs January 22-25.

ATD Chairman Eric Jorgensen, president and CEO of JX

Enterprises Inc., and Thomas Frey, executive director and senior futurist at the DaVinci Institute, will provide keynote remarks at the ATD convention. New for 2015 is a network-ing general session.

Truck dealers will also meet with their manufacturer ex-ecutives at 11 franchise meetings and with exhibitors on the expo floor.

The four-day event will be held in conjunction with the NADA Convention & Expo at the Moscone Center. Dealers and their managers can also attend numerous workshops to learn ways to improve their business operations.

To register for the 2015 ATD convention, visit www.atd-convention.org.

ATD Director Appointed to Serve on American Transportation Research Institute

CommitteeBarbara Robinson, director of the American Truck Deal-

ers (ATD), was appointed to serve on the 2015-2016 Re-search Advisory Committee of the American Transportation Research Institute (ATRI).

“It is an honor and a privilege to have been appointed to serve on the committee,” said Robinson. “As director of ATD, I look forward to bringing a truck dealer’s perspective to the committee.”

ATRI’s research committee is responsible for identifying top research priorities for the trucking industry. Members represent a diverse cross-section of trucking industry stake-holders, which include motor carriers, industry suppliers, commercial drivers, shippers, law enforcement, academia and government.

Robinson joined ATD, a division of NADA, in February 2008. She is responsible for working with the ATD Board of Line Representatives to develop overall strategy and over-seeing the day-to-day operations of the division.

Before joining ATD, Robinson held a series of sales and marketing positions with Ford Motor Company and was a comptroller at automobile dealerships.

She holds a bachelor’s degree in economics and political science from the University of Colorado in Boulder.

NADA Unveils Third Annual Industry Report on Dealership Workforce

The National Automobile Dealers Association has un-veiled its third annual industry report on the car and truck dealership workforce, including employee compensation, benefits, retention and turnover, and hours of operation and work schedules.

The 2014 Dealership Workforce Study Industry Report, produced in partnership with ESI Trends, provides dealers with information and analysis to help them recruit, hire and


31MSADA AccountingnAdA Update

retain top talent. Its findings are based on hard data culled from more than 240,000 payroll records.

The report shows that America’s new-car and -truck deal-erships are a driving force in a recovering U.S. economy by adding employees, paying well-above-average wages and providing weekly earnings growth. In 2013, total dealer-ship employment grew 3.4 percent and topped one million people.

“As the appeal of careers with new-car and -truck dealer-ships grows, so do the opportunities for these businesses to attract top talent,” said John Lyboldt, NADA’s vice presi-dent of dealership operations. “This comprehensive and timely study on the dealership workforce is an invaluable resource for any dealer to gain an edge on the competition in that effort.”

The key findings detailed in the 2014 Dealership Work-force Study Industry Report, based on 2013 data, include:• Weekly Earnings Higher Than Most Private Sector Busi-

nesses: With weekly median earnings of $976 in 2013, dealership employees earned 25 percent more than the median weekly earnings of $782 for the U.S. private sec-tor workforce.

• Weekly Earnings Grow at Slower Pace: Median weekly earnings grew at 1.3 percent – a slower pace than the 3.7 percent rate in 2012.

• Turnover Up Slightly, Still Less Than Private Sector Av-erage: Total dealership employee turnover increased one point, from 35 to 36 percent, compared to 42 percent na-tionally for private sector employees.

• Sales Consultant Turnover Highest: Sales consultant re-mained the highest turnover position at dealerships, with 66 percent turnover – an increase of four points.

• Gen Y Employees on Rise: Of new hires, 47 percent were Gen Y, who now make up 27 percent of the dealership workforce – up four points from the previous year’s 23 percent.

• Gender Gap Unchanged: Of active payroll employees, 17.7 percent were women, consistent with the previous year’s data.

• Work-Life Balance Improving: The percentage of dealer-ships that schedule employees to work more than 45 hours per week has dropped significantly over the three years of the Study, with only 13 percent of dealerships surveyed scheduling sales consultants to work more than 50 hours and 16 percent scheduling service advisors for those hours.ESI Trends, led by president and founder Ted Kraybill,

designed the Dealership Workforce Study, completed the data collection and produced the Industry Report.

“The report shows a growth industry with strong earning opportunity in a changing work environment,” said Kray-bill. “And although the industry is often characterized as a

‘high-turnover’ work environment, actual turnover at new-car dealerships is significantly less than the private sector average. Only at the sales consultant position does turnover exceed the national average, but many dealerships are tak-ing important steps to address that challenge, such as re-organizing their staffing models to reduce total hours and focusing on team-based incentives.”

In addition to the Industry Report, a separate individual-ized report (Basic Report) is offered at no charge to partici-pating dealerships to compare their numbers against aggre-gate data on a regional and national basis. Participants may also purchase an individualized report (Enhanced Report) that further compares their dealership’s data against data for their franchise and state. These reports, like the Industry Re-port, are prepared by ESI Trends.

To purchase the 2014 Dealership Workforce Industry Report, sign in to www.nadauniversity.com and go to the NADAU Store, or call (800) 557-6232.

The opportunity to participate in the 2015 study will open to NADA and American Truck Dealers members at the 2015 NADA Convention & Expo in San Francisco, from January 22-25.

Hollis University Receives NADA Foundation Grant

The NADA Foundation presented Hollins University with a $7,000 grant on October 30, 2014.

“Hollins is deeply honored to receive this generous gift. It will be a tremendous resource for our university as we help those who face emergencies that could impede their educational pursuits,” said Nancy Oliver Gray, president of Hollins University in Roanoke, Virginia. “We applaud the National Automobile Dealers Charitable Foundation for recognizing this vital need and establishing a fund that has a profound and lasting impact in the lives of college students throughout the nation.”

The fund was established to honor Joseph Sanchez, for-mer vice president and general manager of General Motors’ Oldsmobile division and the first president of Saturn Cor-poration.

Since its inception in 1985, grants worth $528,000 have been presented by the NADA Foundation to private and in-dependent colleges across the country.

“Joseph Sanchez strongly believed in the importance of higher education,” said Bob Mallon, chairman of the NADA Foundation. “It is our pleasure to honor his memory and support Hollins University’s contributions to its students.”

The donation was presented by Mallon; Bruce Farrell, president, Berglund Chevrolet in Roanoke, Va.; and the Vir-ginia Automobile Dealers Association on October 30.

t

MSADA


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

based in North America with a share of 45.3 percent, and then the companies based in Europe at 8.9 percent.

All company categories by geographic bases – North America, Asia/Pacific and Europe – experienced growth in light-vehicle sales in November 2014 YTD terms from last November with the Asia/Pacific region in the lead with 6.3 percent growth.

32


overall In November 2014, there were 1.3 million light-vehicle sales.

This sales figure was up 1.6 percent from October 2014 and up 4.5 percent from November 2013.

November 2014 YTD light-vehicle sales amounted to 14.9 mil-lion, up 5.3 percent from a year ago. The November 2014 Season-

ally Adjusted Annual Rate (SAAR) for light-vehicle sales was 17.1 million. This month marked the sec-ond time for the SAAR to exceed 17.0 million this year.

In November 2014 YTD terms, car sales held a market share of 47.1 percent with sales up 90 basis points from a year ago. Corresponding figures for light trucks put the light-truck share at 52.9 percent with sales up 9.7 percent from a year ago.

See Figure 1.

comPanieS/branDSCompanies with a geographic base in the Asia/

Pacific region held the largest market share of light-vehicle sales for November 2014 at 44.8 percent, followed by the companies based in North America (Detroit 3 and Tesla Motors) with a share of 44.7 percent, and then companies based in Europe at 10.5 percent.

The companies based in the Asia/Pacific region also held the lead in November 2014 YTD sales with a share of 45.8 percent, followed by the companies

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

From the Detroit 3 companies, Fiat Chrysler was in the lead in terms of growth of YTD sales compared to last year at 15.7 percent, followed by General Motors with growth of 4.1 percent, while Ford experienced a contraction in sales over the same period.

From the group of companies based in the Asia/Pacific region, Isuzu experienced the most growth in November 2014 YTD sales from last November at 38.0 percent, followed by Mitsubishi at 27.4 percent.

From the group of companies based in Europe, Audi led in terms of YTD sales growth since last year at 15.4 percent, followed by Porsche at 11.9 percent.

See Figures 2, 3 and 4.

SeGmenTSThe cross utility vehicle (CUV) segment held the

largest share of November 2014 YTD sales at 26.9 percent, up from a share of 25.3 percent last year.

The CUV segment was one of three segments that experienced an increase in market share since last year, in YTD terms; the other two segments in this group were the sport utility vehicle (SUV) and van segments. The share held by the pickup segment was unchanged from last year while those of the other segments de-clined over the same period.

The CUV segment was followed by the middle car segment and the small car segment, respectively, in descending order of market share of November 2014 YTD light-vehicle sales. Within the CUV segment, the middle CUV sub-segment was the largest sub-segment, hold-ing 64.6 percent of November 2014 YTD CUV sales.

All the segments, except for the large car segment, experienced growth in November 2014 YTD sales compared to last year with the CUV segment experi-encing the most growth at 11.8 percent.

See Figures 5 and 6.

Power SourceGasoline-powered light vehicles held a market

share of 93.5 percent of November 2014 YTD light-vehicle sales, up from a share of 93.3 percent last year.

Diesel-powered light vehicles held a share of 3.0 percent of November 2014 YTD light-vehicle sales, which was up from a share of 2.8 percent a year ago.

For the alternative power category, the market

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

nAdA Market Beat34

shares held by electrics and plug-in hybrids each grew compared to last year, in YTD terms, while those for hybrids and light vehi-cles powered by natural gas and fuel cell technology each declined over the same period.

In November 2014, hybrids led the sales of light vehicles in the alternative power category, holding a 76.8 percent share of sales for this category. The following light vehicles were sold in this category in November 2014: 32,407 hybrids; 6,176 electrics; 3,586 plug-in hybrids; 52 units powered by natural gas; and no units powered by fuel cell technology, amounting to 42,221 light-vehicle sales.

See Figure 7.

moDelSThere were three pickup trucks on the list of the 15 best-selling

light vehicles for November 2014 YTD: Ford F-Series, Chevrolet Silverado, and Ram pickup. These pickup trucks led the sales of light trucks and held ranks in first, second, and fourth place on the

list, respectively. The cars on the list were evenly divided between the small car

segment and middle car segment with four models for each seg-ment. The leading two cars on the list were models in the mid-dle car segment: Toyota Camry and Honda Accord, holding ranks in third and fifth place on the list, respectively.

From the list of the 15 best-selling light vehicles for No-vember 2014 YTD, eight out of 15 models were from the De-troit 3 companies while the rest were from companies based in the Asia/Pacific region.

See Figure 8.t


december 2014 msada auto dealer

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