Helping Shape Floridas Future 2008 Retail for Parts Law Presented by John W. Forehand November 18, 2008.

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Helping Shape Floridas Future 2008 Retail for Parts Law Presented by John W. Forehand November 18, 2008 Slide 2 Helping Shape Floridas Future Section 320.64 Changes 1.Restricts manufacturer mandates that dealers relocate, expand, improve or alter facilities New requirements when manufacturers provide loans or incentives for such relocations, expansions or improvements all such deals must be offered to all dealers Prohibits adverse actions against dealers who elect not to enter into such agreements Slide 3 Helping Shape Floridas Future Section 320.64 Changes 2.Provides that all dealers are eligible for bonus programs contingent on meeting facility requirements, regardless of whether facility requirements actually met 3.Requires that manufacturers offer same programs in Florida as offered in region, zone, or nation Slide 4 Helping Shape Floridas Future Section 320.64 Changes 4.Prohibits termination for misrepresentation and fraud unless manufacturer can prove the dealer had actual knowledge of such misrepresentation or fraud and took no action 5.Prohibits charge backs or termination in cases of vehicle exporting unless manufacturer can prove the dealer knew the vehicle would be exported (a conclusive presumption of no such knowledge exists if the vehicle is registered in any state) Slide 5 Helping Shape Floridas Future Section 320.696 Changes 1.Restricts adverse actions by manufacturers when dealers seek to be compensated including: Actions in bad faith Imposing obstacles to a dealers performance Retaliatory audits no more than one audit per year permitted Slide 6 Helping Shape Floridas Future Section 320.696 Changes 2.Compensation options for parts: a. An agreed upon percentage markup over dealer cost b. If no agreement is reached it is the greater of: i.mean percent markup for all parts in 50 consecutive ROs within 3 months prior to the request or all such repair orders over the previous 3 months if fewer than 50 exist (manufacturer selects first RO) ii.Highest MSRP retail price list iii.Gross profit percentage from the dealers financial statement Slide 7 Helping Shape Floridas Future Section 320.696 Changes Caveats include: No manufacturer can decrease MSRP unless it decreases cost to dealer Cannot exclude ROs with both warranty and customer pay work included (only warranty work counts) Excludes parts from group, fleet, insurance, or other 3 rd party payors; government discounts; special events; advertised specials; parts sold at wholesale; internal repairs; engine assemblies and transmissions; routine maintenance; nuts, bolts, fasteners, etc.; and tires Slide 8 Helping Shape Floridas Future Section 320.696 Changes Must compensate dealer at retail profit where parts are supplied at no cost Cannot avoid reimbursement to dealers by changing parts or component numbers to lower compensation to dealer Slide 9 Helping Shape Floridas Future Section 320.696 Changes 3.Types of compensation - for labor - include: a.Agreed hourly labor rate for retail customer repairs b.Or if no agreement is reached, the greater of: i.The hourly labor rate for customer repairs = Total labor sales for retail customer repairs Total labor hours which generated those sales ii. The markup over dealer cost as evidenced by the dealers financial statement Slide 10 Helping Shape Floridas Future Section 320.696 Changes Caveats include: No manufacturer can pay less than what was being paid January 1, 2008 Cannot eliminate flat rate times or establish any unreasonable flat rate time Must establish reasonable flat rate times for new models Repairs need not be identical, must resemble a retail repair Slide 11 Helping Shape Floridas Future Section 320.696 Changes Excludes labor charges for vehicle reconditioning; group, fleet, insurance, or other 3 rd party payors; government discounts; special events, advertised specials, or express service; promotional discounts; and internal repairs Dealers must attach supporting documentation Slide 12 Helping Shape Floridas Future Section 320.696 Changes 4.Getting Paid: a.All warranty submittals assumed to be at new parts or labor rate starting 15 days after manufacturer receives request for new rate b.Manufacturer has 30 days to pay following request c.Dealers can sue for treble damages Slide 13 Helping Shape Floridas Future Overtime Regulations Fair Labor Standards Act General Rule overtime must be paid to non-exempt employees who work more than 40 hours a week in a given pay period Exemption overtime requirement does not apply to salesmen, partsmen, and mechanics primarily engaged in selling or servicing automobiles, trailers, trucks, farm implements, or aircraft if employed by a nonmanufacturing establishment primarily selling such vehicles to ultimate purchasers Does not apply to employees of motorcycle dealers

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