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2011 CONFERENCE REPORT

Hyatt Regency, Dearborn, Michigan

October 9-11, 2011

FALL was evident in the foliage, but not in the temperature, as we arrived at the Hyatt Regency in warm Dearborn, Michigan, home of Henry Ford, to prepare for IALLA’s 2011 conference.

Front of the Hyatt Regency Colors of Dearborn Fall…

The IALLA “advance crew” sets up for Oct. 9 registration and reception in the beautiful, revolving hotel Rotunda. L-R: Bobbi Lum-Mew; Carol Roberts; Dana Wiehle; Pauline Liese

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MONDAY, OCTOBER 10, 2011 Day One of Conference

“The New Normal” and everything in between…

Conference participants were welcomed to Dearborn by Mayor John B. “Jack” O’Reilly, who told us we were there along with Ford dealers from all over the world (we had noticed that…) and who gave us a history lesson about the city that is home to Ford’s world headquarters. The Dearborn Chamber of Commerce also sent an Ambassador to welcome us and the City of Detroit sent a Certificate of Recognition to wish us a successful conference.

Once the preliminaries were out of the way, President Pauline Liese declared the conference officially underway, and we were honored to once again have Automotive News Executive Editor Ed Lapham give the morning keynote address, “The New Normal…And What it Means.” According to Mr. Lapham, it’s been three years since “the bottom dropped out” and consumer confidence is still fragile, sales are not up as much as hoped, but there is some pent-up demand in the market and an aging fleet of vehicles to be replaced, so vehicle sales should do better than the

economy. “In-your-face” advertising is part of the new normal, along with an increase in the number of Chinese companies. Dealers using Groupon coupons and social media to communicate with customers is also part of the new normal. Volatility and change at an accelerated pace are all part of the new normal. “We know the future is coming, but we don’t know when it is,” quipped Lapham. He noted some signs of culture change at General Motors with the appointment of a Vice President for Customer Retention and Satisfaction. He noted that the new CAFE standards will net a 40

mpg savings, that diesel fuel may realize a resurgence of popularity as various automakers are producing diesel models, and that it did not appear the J. Lo Fiat ads are working. Pointing out that there are 2,800 fewer dealerships now than in 2008, Lapham noted a recent Automotive News analysis which revealed that the Big 3 are not winning back market share; one reason – they have fewer places selling cars. He told us about his experience test driving a Chevrolet Volt

Jan Smith and Bobbi Lum-Mew welcome Dayle Seidel and Gaye Hayles-Newton.

Mayor John B. “Jack” O’Reilly welcomes conference participants to Dearborn

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during the 2010 Car of the Year trials. The Volt, like the Nissan Leaf, does not have a spare tire, just “run-flat” tires. He hit a pothole, which bent the wheel, so the run-flats were of no use. Chevrolet had to bring him a new wheel and electronically sync it with the car. Consumers in that situation would not have that type of service. So, which car got his vote for 2010 Car of the Year? The Hyundai Sonata.

After the “new normal” discussion moved to What’s on the Lemon Law Horizon? A distinguished panel of forward-thinkers (R-L): Paul Corning (Washington); Enoch Hutchcraft (Monaco RV); Keith Rose (The Rose Law Firm, PLLC); Richard Woods (CBBB) led by Moderator Jan Smith (FL) tackled a number of questions raised by new developments in technology, sales practices and consumer behavior and how those may impact state lemon laws in the not-too-distant future. The panel discussed issues such as: the impact of the increased use of computer technology in the manufacture of vehicles on warranty

and lemon law coverage, definitions and presumptions; will the new technologies bring an increase in lemon law claims and will the arbitration programs have to recruit more technically oriented decisionmakers; the impact of bankruptcies and the recessionary economy on the RV industry and what changes are anticipated; the impact of the increasing use of the internet as both a selling and purchasing tool on state lemon law eligibility requirements. The discussion was lively and thought-provoking; hopefully providing the conference attendees with much food for thought.

A question from Jason Nelson (Porsche) Interpreter Hide Kubota and Hiroko Isomura Nancy Loader (CBBB) and Scott Clark (Ford)

Ed Ed Lapham with IALLA Executive Director Carol Roberts

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There followed a delicious lunch, providing nourishment, networking and further discussion opportunities.

After lunch: Resolution or Not? Compliance Issues

L-R: Rachelle Rebmann, Volvo; Rodney Boudreau, Honda;

Pauline Liese, VT; Moderator Tashia Zeigler, GA

Conferees jumped right back into the issues after lunch with the panel discussion: Resolution or Not? Compliance Issues. Georgia’s Lemon Law Director Tashia Zeigler, moderated the experienced panel: Pauline Liese (Vermont Lemon Law Administrator); Rodney Boudreaux (American Honda); and Rachelle Rebman (Volvo Cars of North America). The panel discussed general issues related to arbitration decision and settlement compliance, such as: manufacturer imposition of additional costs upon consumers that are not included in arbitration awards or provided by state lemon laws; what to do when a consumer changes their mind after the arbitration award and refuses to turn in their vehicle, or wants a different remedy than what was awarded; issues related to rebates and trade-in allowances in repurchase awards.

Hiroko Isomura, Nippon Association of Consumer Specialists, provided an informative look at consumer protection developments in Japan with her presentation: Japan and the U.S.: Different Consumer Environments. The basic framework for Japan’s consumer policies is established in the “Consumer Basic Act.” Included is the “Road Vehicles Act,” which provides for the registration of automobiles, sets safety standards, maintenance and inspection, and incorporates the vehicle recall system. There is a Consumer Affairs Agency,

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established under the Minister of State for Consumer Affairs, which collects, analyzes and publicizes information, and a Consumer Commission which is an independent, third-party agency that monitors general consumer affairs. The core consumer advocacy group is the National Consumer Affairs Center (NCAC), which is also an independent group that advocates for consumers. Japan offers its consumers an online information and defect reporting network (PIO-NET, Practical Living Information Online Network) and a vehicle safety hotline. Consumers can report defects online or by phone. The Ministry of Land, Infrastructure, Transport and Tourism maintains a searchable database of trouble reports consumers can use. According to Ms. Isomura’s presentation, the number of cases filed increased after media coverage of the 2004 Mitsubishi recall cover-up and the recent Toyota recalls. Typically, the seventh largest number of complaints relate to four-wheeled vehicles, with 50 percent of those being for used vehicles. After the Toyota recalls, Japanese consumer groups petitioned the Consumer Commission to make tougher recall rules and provide more remedies to consumers. The Commission established a committee to study the issue.

The presentation was very enlightening and several questions were posed by conferees at its conclusion. We are so grateful to Ms. Isomura for traveling such a great distance to close the gap between our two nations with information about consumer developments across the Pacific. President Liese with Hiroko Isomura.

The very busy and informative first day was completed by Gaye Hayles-Newton (GA) calling state administrators up to the microphone to answer questions posed after last year’s conference, in Why DO “They” do that? You Asked, We Try to Answer. Administrators of the attending states and Jim Savary of the Canadian Motor Vehicle Arbitration Plan attempted to answer questions regarding days out of service and the Japan tsunami, arbitrator qualifications, how manufacturers evaluate cases in the Canadian arbitration program, and why there are or are not state laws on various subjects. It was a good opportunity for state representatives to explain the powers and duties of their offices (e.g. most are executive branch agencies that do not make laws), the limitations on their authority, particularities of their lemon laws, and how things are done in Canada without a Lemon Law.

David Strawser, Ohio Attorney General’s Jo DeMars, DeMars & Associates, poses a question. Office, explains Ohio’s provisions.

Gaye Hayles-Newton

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TUESDAY, OCTOBER 11 Day Two of Conference

The Challenges of “Going Green” and the Chevy Volt Factory Tour

Long-time automotive journalist and self-proclaimed car nut Paul Eisenstein kicked off the second day of conference with the keynote address: Our Green Planet: the problems and potential of strict new emissions and mileage rules. Eisenstein discussed the difficulties he anticipates the industry will have meeting the 2016 (35 mpg) and 2025 (54 mpg) CAFE standards. These will affect everything from the smallest compact to the largest pick-ups. With these new standards, the average car will get better gas mileage than the Prius gets for highway driving, according to Eisenstein. He pointed out that rising fuel prices are driven primarily by the third-world markets, with China being the largest new car market in the world at present. At the Frankfurt auto show, most of the companies had battery vehicles on display, either launched or in concept, including Rolls-Royce and BMW. While acceleration is better in battery-powered vehicles than in gas-powered, it will wear down the battery life faster than it would a gas engine. Range and charging time are the major issues with battery-powered cars. Eisenstein remarked that it takes a different frame of mind to drive an electric vehicle—there is less freedom than with gas-powered cars and charging time could take up to 8-16 hours.

Will battery-powered vehicles take over? Not necessarily, says Eisenstein. In Europe, more than half of the cars are diesel powered. Diesel today is much better than yesteryear, said Eisenstein. He pointed to the BMW x5 diesel and reported that it doesn’t shake, rattle or blow smoke and is very powerful, but gets better mileage than a mid-range gas-powered car. With the Chevrolet Cruze diesel launch this spring, drivers can expect to get over 50 mpg on the highway (better than the Prius). Diesel is catching on and is outselling electrics and hybrids. What about the recent proliferation of new car companies? Generally,

because start-up is expensive, most don’t survive; however, this may no longer be true, according to Eisenstein. Several of the newer companies, like Tesla and Fisker, might survive with the help of government incentives. According to Eisenstein, there have been 850 car companies since the inception of the auto industry. Eisenstein thinks we may see a very different industry in a few years and that it will be difficult for the industry to meet the 2016 standards, much less the 2025 standards, because they will have to provide us with complying cars that we will want to buy. Will they be able to do it? If not, the result could be a lot of lost jobs, predicts Eisenstein. Which car did he vote for as 2010 Car of the Year? The Chevy Volt.

…A good segue to our Tuesday panel: “It’s Not Easy Being Green,” moderated by Dana Wiehle (FL), with panelists Steve Cernak (GM); Kevin Newbury (GM); Paul Corning (WA) and Jo DeMars (DeMars & Associates). Keith Newbury, Group Manager-Brand Quality for General Motors, started off with a presentation on the Chevrolet Volt and advanced propulsion. Some interesting factoids from his presentation: In the U.S., 85% of personal travel is by automobile, with the typical daily commute being 40 miles or less; by 2020, we will have more than 1 billion vehicles on the roads, worldwide –

enough to circle the globe 125 times; the “new DNA” for the automotive industry is more drive-by-wire technology, with more “connected” than stand-alone vehicles. The

Eisenstein with David Strawser

GM’s Keith Newbury

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Chevrolet Volt is an extended range gas-electric hybrid, designed to operate on battery power for the first 35 miles and move to gas power as the battery power diminishes. Newbury described the range for the electric power as being from 25-50 miles, depending upon temperature, driving technique and other factors that affect battery life (for example, battery energy is used to heat and cool the cabin). Newbury described the Volt as a four-passenger sedan with a driving experience like a conventional sedan, but without the engine noise, and designed to eliminate range anxiety. The lithium-ion battery is T-shaped and placed for low mass. It carries an eight-year, 100,000 mile warranty. General Motors has a dealer demo program to educate dealers about the Volt and provide a means for customers to test drive it. The Volt window sticker gives the EPA estimated equivalent of “miles per gallon” on all-electric power. GM is working to change sale practices to include customer orientation and “charging tips” and is working with an “integrated supplier” to handle home charger installation. The Chevrolet warranty will include Volt information about long term loss of battery life so the customer will understand. The presentation gave the following additional resources for further information: http://chevroletvoltage.com; http://myvolt.com; homecharging.spx.com; www.gmstc.com. Unfortunately, this very informative presentation took up much of the limited time for the panel; however, upon conclusion of the panel, the panelists stayed in the room to answer individual questions from the conferees. Definitely a subject for further discussion and update at our next conference!

Keith Newbury, Moderator Dana Wiehle & David Strawser The Green Panel, L-R: Steve Cernak (GM); Jo DeMars (DeMars prepare to start the presentation. & Associates); Paul Corning (WA); Dana Wiehle (FL).

The next stop: The Chevrolet Volt Factory tour

Sponsored by: General Motors, LLC

Jim Moloney, GM General Director of Customer & Relationship Services, led the group to the waiting bus for the ride to the Chevrolet Volt factory in Hamtramck, where conferees were greeted by “Bucky” the deer and a very capable (human) GM tour guide, who gave us a safety lecture before loading us on the “tour tram.” The factory was huge (it spanned two cities), modern, ergonomic, extremely clean and contained a nature preserve. It was in operation, so conferees were able to see the Volts moving through the assembly line. The pictures below tell the story!

Bucky the Deer

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Our Tour Guide The tram

Many Thanks to GM for providing this informative presentation and tour!

The Volt Batteries…

…are inserted in the floor of the Volt, from below...

Conferees view a finish product

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The conference adjourned after the Volt tour and bus ride back to the hotel. It was a very informative two days, we hope leaving everyone with much food for thought, a greater recognition of the issues that new technologies already are bringing us, and an appreciation of how all of us in our various roles must address these issues. It is IALLA’s goal to use these conferences to educate all of the interests involved and to keep the lines of communication open so that, ultimately, consumers and the marketplace will benefit. We again thank our sponsors: Recreation Vehicle Industry Association (RVIA); Porsche Cars North America, Inc.; BMW of North America, LLC; Impartial Services Group, LLC; Chrysler Group, LLC; Hinshaw & Culbertson, LLP; and Experian, for their contributions to the success of this conference.

IALLA Member Attendees

L-R Back row: Tashia Zeigler (GA); Paul Corning (WA); Dana Wiehle (FL); David Strawser (OH); Gaye Hayles-Newton (GA); Deborah Fraim (FL); Jan Smith (FL); L-R Front row: Dayle Green-Seidel (FL); Bobbi Lum-Mew (HI); Pauline Liese (VT); Jim Savary (Canada); Carol Roberts (Executive Director)

We hope everyone will join us for Conference 2012 in Atlanta, Georgia!