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KIAW NEWSLETTER OCTOBER 2018

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In June 2006, the future of the Motor Vehicle Owners’ Right to Repair Act looked bleak.

Federal Right to Repair legislation — which would have established criminal sanctions for auto makers that didn’t make available at a reasonable price to consumers and independent auto repairers the same repair and diagnostic information they gave their franchised dealers — was quickly losing ground.

Five co-sponsors of the bill — including the chairwoman of the subcommittee that had just approved it 14-13 — asked for their names to be removed.

Today, Right to Repair is law in Massachusetts and went into effect with the 2018 model year. On the heels of the Massachusetts action, the auto makers that fought Right to Repair entered into a memorandum of understanding with the auto aftermarket nationwide to provide access to their service websites for a fee.

“In general, the law has been a big success, and most shops appear to be happy with it,” said Aaron Lowe, senior vice president, regulatory and government affairs for the Auto Care Association (ACA).

The ACA and the Tire Industry Association (TIA) were among the organizations that advocated hardest for Right to Repair, along with the Coalition for Auto Repair Equality (CARE), which was created specifically to work for passage of legislation guaranteeing auto repairers’ rights to buy OE repair and diagnostic information.

The effort gained momentum with the 2002 agreement between the Automotive Service Association (ASA) and auto manufacturers to provide repair and diagnostic information.

From that point, the ASA said the agreement was more than adequate to protect auto shop owners’ right to repair and diagnostic information, and opposed Right to Repair legislation.

However, groups such as the ACA — then known as the Automotive Aftermarket Industry Association — and TIA

played no role in negotiating the 2002 agreement and said they needed legal sanctions to ensure auto makers would not withhold crucial information.

Paying off

Right to Repair advocates managed to get successive versions of a federal Right to Repair bill through congressional subcommittees or committees but failed to achieve a floor vote. However, their efforts to achieve passage of a state bill finally paid off in Massachusetts in 2012.

A Right to Repair bill passed the Massachusetts legislature on July 31 of that year. The bill was intended to stave off a stronger measure that had been placed on the Massachusetts ballot, but it failed to meet the deadline for removal of the ballot measure, which passed in November by an overwhelming margin.

Late in 2013, the Massachusetts legislature passed a bill reconciling the two measures.

Under the reconciliation bill, vehicle makers doing business in Massachusetts were required to make available for sale to vehicle owners and independent shops the same diagnostic and repair information they made available to their franchised dealers, beginning with the 2002 model year.

RIGHT TO REPAIR LAW DEEMED ‘SUCCESS’ BY AUTO CARE ASSOCIATION

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Beginning with the 2018 model year, the bill required auto makers to provide access to their diagnostic and repair information systems to any owner or repair shop with an off-the-shelf computer.

Overseeing the smooth operation of the Massachusetts Right to Repair law and the details of the nationwide memorandum of understanding is the National Automotive Service Task Force (NASTF), the organization set up by the ASA and the auto makers to monitor the effectiveness of the 2002 agreement.

The NASTF “will facilitate the identification and correction of gaps in the availability and accessibility of automotive service information, training, diagnostic tools and equipment, and communications in auto service professionals,” according to the NASTF mission statement on its website.

Membership in the NASTF is free, and it offers many services to members, including reprogramming information, a scan tool center, how-to videos, a page on locksmith/vehicle security and a page for service information requests.

Its most important service is a listing of OEM service websites, accompanied by a list of subscription prices.

The NASTF list, which covers 32 vehicle makes, provides information on how shop owners can buy OEM subscriptions by the day, week, month or year, according to Mr. Lowe, who is a member of the NASTF board of directors.

“All car companies have to put all their diagnostic information in the cloud, and technicians can download it into their personal computers,” Mr. Lowe said. “At the end of the subscription, all the information goes back into the cloud.”

Subscription prices also vary greatly according to manufacturer, he said. A one-year subscription, as shown on the NASTF website, can range from $350 for Acura Service Express to $7,800 for Ferrari.

One of the NASTF’s major programs is the Secure Data Release Model (SDRM), a data exchange system conceived and designed cooperatively by auto makers, independent auto repairers and the insurance and law enforcement communities, according to the NASTF website.

“SDRM allows access to security-related information while protecting the safety and security of consumers and the integrity of automobile security systems,” the website said.

SDRM 2.0 was a major topic at the NASTF’s recent Spring General Meeting in Tucson, Ariz. So was another of its major initiatives, its “Road to Great Technicians” program, which is an effort to alleviate the continuing shortage of auto technicians by attracting young people to auto service and repair as a career.

Taking on telematics

Although the question of access to repair and diagnostic information has more or less been resolved, the issue of telematics — onboard vehicle communications systems — has not, according to CARE President Ray Pohlman.

“Telematics is what’s left to do,” said Mr. Pohlman, who also is vice president of government relations for AutoZone Inc. “The question is how we will ensure access for our customers and our companies.”

The goal is to have telematics information accessible through a common platform, according to Mr. Pohlman. But that will be easier said than done, he said.

“There are 24 vehicle manufacturers, and all 24 have different telematics systems,” he said.

In a similar issue, Mr. Lowe testified at an April 10 hearing before the U.S. Copyright Office in favor of the agency expanding the consumer exemption for auto repair under the Digital Millennium Copyright Act (DMCA).

The DMCA exemption allows access to encrypted software only to car owners for purposes of repair, Mr. Lowe noted in his testimony.

However, he said, the exemption must also be extended to auto repairers, because car owners often do not have the knowledge or technological capabilities to perform their own repairs.

Extending the DCMA also is an issue that concerns the membership of The Repair Association, according to Gay Gordon-Byrne, that organization’s executive director.

“We are focused on the repair of things that include microprocessors, or chips, which now spans a huge variety of industries,” Ms. Gordon-Byrne said. “As you know, tires now contain chips — and so do sneakers.”

Several groups in the computer and cell phone industries were looking to break repair monopolies in those industries at the same time Massachusetts passed automotive Right to Repair, according to Ms. Gordon-Byrne.

“As soon as auto Right to Repair was passed, it was obvious that the bill was exactly what we needed, but for everything other than cars,” she said. “We set out to build a Digital Right to Repair Coalition to mimic the success of the automotive aftermarket groups that drove legislation in states.”

Since then, Digital Right to Repair bills have been introduced in 18 states, according to Ms. Gordon-Byrne. However, not all of those bills are still active, she said.

“Many states are in session only a few weeks, and several are now concluded with varying degrees of success,” she said. “None has fully passed yet, but it will get done.”

- Courtesy of Tire Business

continued from page 1...

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Hopkins Manufacturing Corp. may shift its China supplier network to factories in Taiwan. Multi Parts has stopped hiring new employees. AutoZone Inc. and O’Reilly Automotive Inc. plan to raise prices.

Businesses in the replacement auto-parts industry -- from component makers to local mechanic shops -- are scrambling to cope with President Donald Trump’s tariffs on imported Chinese materials and goods. Steep levies have already boosted costs of some products made with steel and aluminum, and more duties could affect hundreds of other items these companies develop, make and sell -- including tires and rear-view mirrors, windshields and windshield wipers.

Springfield, Missouri-based O’Reilly hasn’t seen “a big impact” yet, but a couple of its suppliers have added a “fractional” part of the tariffs onto costs and a few more will do so early in the fourth quarter, Chief Executive Officer Greg Johnson said during the company’s second-quarter earnings call. So far “we have been able to pass that along” to customers, he added. These include do-it-yourself vehicle owners and service technicians shopping at O’Reilly’s more than 5,000 stores.

Supply-Chain Strain

Investors and analysts are asking how the tariffs will affect sales and profits. Dozens of businesses including Daimler AG, Hyundai Motor Co. and General Motors Co. have said they already see or anticipate higher prices driving up manufacturing costs or reducing earnings.

AutoZone is identifying products that could soon cause problems for the Memphis, Tennessee-based company, which has more than 5,500 stores and reported $10.9 billion in revenue last year. Prices of components made with steel, such as rotors and other brake parts, will certainly have to rise, spokesman Ray Pohlman said.

Limited Sources

“You can’t get the things we sell from very many places,” he said. “You can’t just buy it on any street corner.”

While the tariff threat is broad, it actually may affect less than 15% of retailers’ inventory, according to Wedbush Securities Inc. analyst Seth Basham: Auto-parts stores source about 50% to 60% of their products from China, but only about 20% to 25% of these are included in the latest round of tariffs, he said. These duties cover a wide variety of imports with a total value of more than $200 billion and won’t take effect until after a comment period ends Sept. 6.

“We think they should be able to pass through the extra

TRUMP’S TARIFFS WILL MAKE FIXING YOUR CAR MORE EXPENSIVE

costs without too big of a hit to their earnings,” Basham said.

Some parts suppliers are less sanguine. Brian Cohn, president of Jupiter, Florida-based Multi Parts, said the company’s typical flow of orders has already slowed, and higher prices on materials have led him to stop hiring new

workers. Multi Parts’ facilities in Shanghai, Hong Kong and Belarus manufacture brake and

wheel cylinders, wheel hubs, valve-timing solenoids and other components. Customers include parts distributors and other manufacturers of auto-repair products.

Higher Prices

Brad Kraft, chief executive officer at Hopkins Manufacturing, said his company imports many goods from China, and new tariffs already in place have driven up prices on about 350 items made with steel and aluminum. If the proposed tariffs on the additional $200 billion are enacted, prices will rise on at least 3,000 more of its products, which include tires, oil and fuel filters and components for towing systems.

Hopkins, based in Emporia, Kansas, has two manufacturing facilities -- in Juarez, Mexico, and Los Angeles -- and an office in Ningbo, China, that coordinates logistics with about 45 supplier factories in the country. Kraft says he’s considering using suppliers in Taiwan instead. Sourcing products from Taiwan is typically more expensive, but it now looks like a cheaper alternative, he said.

Re-sourcing products is time-consuming and expensive, however. Companies will need to feel certain that tariffs will stick before they make such changes, according to Aaron Lowe, a spokesman for the Auto Care Association, an industry trade group.

Delayed Maintenance

One risk of prolonged price hikes is that car owners may put off maintenance, reducing sales of replacement parts. This also could increase the number of unsafe vehicles on the road, Cohn noted.

“The typical auto after-market consumer already has a bit of a pinch on their pocketbook,” he said. “So people will likely just choose to go without repairs for a while.”

Despite the potential for lost business, Chris Lynch, owner of Wetmore Tire and Auto in Ferndale, Michigan, says he plans to pass along to customers any price increases on the low-end tires and brakes he imports from China.

“They are going to have to pay that extra cost in the end,” he said, “because we’re not going to eat it, that’s for sure.”

- Courtesy of Bloomberg.com

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The EEOC and state and local agencies have been filing more administrative charges in recent years and that trend is likely to continue.

Because administrative charges can be precursors to discrimination lawsuits, it is critical for you to handle them properly. These 10 tips will help you prepare to respond:

1. Tell the whole story

Often, an EEOC charge contains just one or two paragraphs, containing little more than conclusory allegations of discrimination. Resist the temptation to put minimal effort into your response.

It is usually advisable to provide a comprehensive response, detailing the circumstances surrounding the employment relationship and the reasons for adverse employment actions. Try to nip the claim in the bud by giving the agency all the facts. Demonstrate that there were legitimate business reasons for your actions.

2. Use documentation

If you have documents supporting your version of events, consider including them in your response. Documentation dating from the time of the adverse employment action can be the best way of discrediting the allegations. Attendance records, sales reports and e-mail messages can all help prove that events happened as you say they did, and that the company’s concerns were bona fide.

3. Verify the response’s accuracy

Attorneys love catching an employer in a lie. Since the information you submit could be used in later legal proceedings, make sure everyone involved reviews the response and verifies the accuracy of every statement.

4. Highlight consistent past decisions

One of the best ways to demonstrate that a decision was not motivated by unlawful discrimination is to point to the same actions being taken against similarly situated employees who are not members of the charging party’s protected class.

For example, if the charging party alleges that her termination was motivated by discrimination against women, tell the agency of instances when you terminated men for the same misconduct.

5. Remember, the agency does not know your business

In telling your version of the events, share details about your business that will help the agency understand your actions. Think about why the charging party’s performance

10 Steps To SuccessHOW TO RESPOND TO AN EEOC COMPLAINT

concerned you. Would that be readily apparent to an outsider?

For example, if you are legally required to have a certain number of staff on hand at all times, explaining this will emphasize why poor attendance would be a significant problem in your workplace.

6. Maintain confidentiality

Information about the charge should be on a need to- know basis, If you know investigators will contact employees, couch your message in terms like this: “While we do not feel

there is any merit to the allegations, we respect Employee X’s right to bring this charge. If you are contacted by

the agency, you should cooperate and be completely honest with the investigator.”

7. Be prompt and cooperative

Do not put off preparing your response. Antidiscrimination agencies are less inclined

to provide extensions than they once were. Failure to respond to a charge in a timely way

can result in an adverse determination.

8. Work with legal counsel

Because a discrimination charge can be the first step in a chain of legal actions, you must protect your company’s

interests. Many employers ask their attorneys to investigate and prepare the response. At the very least, have an attorney review a draft before you submit it.

9. Contact your insurer

Insurance policies require insured parties to provide prompt notice of claims. Many employment practices liability policies define claims to include discrimination charges. Failing to apprise the insurer of a charge could result in denial of coverage, for not only the charge but also all subsequent legal claims.

10. Preserve all documents

Courts are increasingly imposing harsh sanctions on companies that fail to adequately preserve relevant evidence. When you receive an administrative charge, collect and preserve all documents that could be relevant. You may also want to suspend any routine practices that might result in the destruction of relevant records, particularly electronic information like e-mails, voice mails and Internet usage records.

Final note: Taking the charge process seriously and defending against the allegations at this stage can increase the likelihood of a favorable determination and help prevent further legal actions.

- Courtesy of Northeast Equipment Dealers Association

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In a world where we’ve gotten quite used to knowing about and responding to an event almost immediately as it occurs, it only makes sense to use the same approach when tracking and responding to information related to your business.

For example, in the same way that you might quickly react to news that could affect the price of a stock you own, take action after being alerted to suspicious purchases on a credit card, or reply to an influx of social media posts about your company is how savvy business owners are now managing their dealerships. The key to this approach is to use a business system that processes your data in real-time, which, according to Wikipedia is “information that is delivered immediately after collection.” The ability to track and analyze real-time data offers dealer principals, managers, and owners speed, flexibility, and competitive advantage. Continuously refreshed data viewable on their system dashboard provides business owners with an instant read on their business, reflecting business changes as they occur.

The ability to track and analyze real-time data offers dealer principals, managers, and owners speed, flexibility, and competitive advantage.

Real-time dealership management systems respond to the way that equipment dealers want to manage their business. Users of traditional business systems must wait for data to accumulate, and then be sorted and extracted, resulting in a picture that is out-of-date. What most managers want—and need—is a view of what’s happening within their business operations, as it happens.

One of the most important applications for real-time data is a CRM (customer relations management) system, ideally a component of the dealership management system. Up-to-the-minute information about customers, such as their customer purchase and service history, can be used to make better and quicker business decisions, often within the span of the customer interaction.

Access to real-time analytics also provides better sales insight by letting sales managers see exactly how the sales team is performing. It also has a huge impact on the accounting process. “Real-time accounting in a business system means that transactions are processed as they occur,” says Melissa

Amen, Customer Success Manager, Charter Software Inc. “In a batch system, transactions may not post until the end of the day, leaving you with the unsavory options of either having to dig through piles of paper or wait until the next day to find what you need,” says Amen. “Plus, in a real-time system like ASPEN, the data is right at your fingertips, and the ability to drill-down to transaction detail provides so much flexibility,” she adds.

To truly take advantage of real-time analytics, management

Are you Tracking Your Business in Real-Time?

and staff need to be ready to act on the data as quickly as it is received—and there is a lot of data pouring into the dealership, all day long. Craig Houseknecht, VP of Operations, MTE Turf Equipment Solutions, says, “With three locations, it can be difficult to keep track of what is going on in multiple parts departments, multiple service departments, managing inventory, etc. Access to the real time data in ASPEN helps us to do our jobs every day by allowing us to see a lot of things we wouldn’t otherwise be able to see.”

For additional information, phone 303.932.6875, fax 303-932-6427 or visit www.chartersoftware.com

by Betsy Chase, Charter Software

Charter Software Inc., maker of the ASPEN Business Management System, has partnered with MSI Data to deliver its Service Pro field service management solution to servicing and precision ag dealers who perform equipment or product installations, repair, planned or preventive maintenance, inspection, and other field services.

Through the MSI Data partnership, ASPEN’s current field services will expand to include:

equipment is at any time using telematics.

maintenance intervals and additional telematics information are available.

in the field.

real-time, increasing field resource utilization that improves service cash flow. and

Customers will receive real-time mobile service status updates indicating things like when a technician is en route and/or service work is complete.

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TRIPLE PROTECTION PLAN –

AN EMPLOYEE RETENTION STRATEGY

Over the years you’ve built a profitable business. You’ve invested your money, your time, and your passion. Now ask yourself, “What is my most valuable business asset?” While physical assets—the buildings and equipment—support financial goals, the success of many businesses can be traced to the good judgment, skills, and expertise of your key employees.

What if a competitor makes your key employee an offer he/she can’t refuse?

What is the impact on the business if you or your key employee dies?

What happens to your key employee’s family when the paycheck stops?

Your key employees aren’t listed on your balance sheet or your income statement, but what they do shows up there. Unfortunately, many business owners train and mentor employees with the intention they will stay forever only to have them leave. Most people don’t realize how costly this can be because they have not thought about losing an employee nor the consequences associated with that loss.

So the question becomes, “How can I protect my business against these possibilities?” The answer is to wisely allocate your financial resources and provide protection for multiple concerns with a specially designed program.

Triple Protection Plan

With a Triple Protection Plan (aka Three Part Plan) you can address your employee retention concerns and help protect against the financial impact of an employee death. It can also provide a benefit for an employee’s spouse and/or children.

A Private Bonus Plan can help retain employees. It is a 1. written agreement that pays selected employees set bonuses at specific times. The plan is informally funded with a cash value life insurance policy and it protects against the employee’s voluntary departure by providing a strong incentive to stay. The business applies for, owns, and pays the premiums on a life insurance policy on the key employee to informally fund the private bonus plan. The business withdraws policy cash values as needed to pay the scheduled bonuses.

Key Person Coverage protects against financial losses 2. associated with an employee’s death. The proceeds from the same life insurance policy provide liquidity, which can be used to recruit, hire, and train a replacement. It can also be used for business continuation or overhead expenses.

Family Protection allows the business the opportunity to 3. share the life insurance protection with the employee’s family. Using an Endorsement Split Dollar plan, the company can provide life insurance to a key employee. And, the company remains in control of the policy while offering financial security for the key employee’s family with a portion of the death benefit.

Employee retention and the potential departure of a key person are concerns for all business owners. By using a Triple Protection Plan, your talented employees will be more likely to stay and you gain peace of mind thanks to an added degree of stability and security. One solution for three problems!

11

With identity theft in the news constantly, many employees are turning to their employers to ask for an identity protection benefit.

Let us focus on productivity and wellness. Identity theft can wreak havoc on an employee’s personal and work life. According to SANS Institute, it takes an average of six months and up to 200 hours of personal time to resolve issues related to the theft. This includes hours calling banks, credit card companies, filing police reports, notifying the Social Security Administration, and alerting credit bureaus. Most of these calls and follow up activity must be made during business hours. According to ITRC’s latest study, 22% of respondents took time off of work when dealing with issues of identity theft.

Identity theft also impacts wellness and mental health. According to the ITRC study, 75% of respondents reported that they were severely distressed by the misuse of their information, and many sought professional help to manage their identity theft experience — either by going to a doctor for their physical symptoms or seeking mental health counseling.

These findings make it clear that identity theft directly impacts productivity and wellness.

That is why comprehensive and compassionate restoration services should be a key element of any ID Protection plan offered by the employer.

Restoration services are the fixers in a comprehensive identity protection plan. For victims of identity theft, the restoration specialist will do the required work to restore the victim’s identity. Specialists make the calls during business hours, complete the necessary paperwork, and manage the process. They free up the employee to focus on their job, and alleviate the stress of dealing with the challenges of identity restoration.

VIEWS:

IDENTIFY THEFT PROTECTION BENEFITS AND THE BUSINESS CASE FOR EMPLOYERS

There are a range of features to look for when evaluating restoration services across plans.

Some plans only offer advice and information kits to guide members on what steps they need to take. Those services typically do not do the work for the member.

For plans that provide a full restoration process, consider if the plan provides victims with a dedicated restoration specialist as a single point of contact. Since the restoration process can take months or years, it’s best if a victim has a consistent person to speak with who knows the case and can provide periodic updates. Restoration services should be available 24/7 so victims can initiate the process immediately to lessen the damage. Plans should also provide multilingual specialists to best serve all members and handle all types of identity theft.

Although monitoring may alert individuals that are a victim of identity theft, the even greater value is in fixing the situation. Be sure to fully evaluate the restoration features of an identity protection plan as part of the selection process.

For more information on offering identity theft protection coverage for your employees contact our IDShield/LegalShield Representative: Leslie Udy, Workplace Consulting, LLC, IDShield/LegalShield, 801-830-3629 or email: leslieudy@legalshieldassociate.com

Advisory CouncilKevin Roppel

Roppel Industries • Louisville, KYPhone: 502-581-1004

Staff Kim Rominger Bill Garling Dennis Alford

Executive Director Chief Operating Officer Chief Marketing Officer

David Kahler Jenny Archibald Marti Smith Associate Director Administrative Asst. Marketing Asst.

PO Box 68 • 6124 Avery RoadDublin, Ohio 43017

Phone: 614-889-1309 Fax: 614-889-0463

MISSION STATEMENT: The mission of KIAW is to advance the interests of the automotive aftermarket industry by providing benefits and services that improve business prosperity and efficiency..

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