September 2015 MSADA Auto Dealer

September 2015 • Vol. 27 No. 9

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

Victory Revisited

Ron Bouchard gathers racing memories in one place

Revisited

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

4 FRom the PResident: We bring Communities Together

6 the RoUndUP: auto bills Get Hearing on beacon Hill

10 LeGisLAtiVe sCoReCARd

11 tRoUBLeshootnG: frequently asked Questions

12 AUto oUtLooK

14 LeGAL: new U.s. Department of labor Guidance

15 ACCoUntinG: an accountant’s ‘bucket list’

16 Cover Story: Victory Revisited

20 neWs From Around the horn

25 PARts & seRViCes: Have $22 Million to Gamble with?

26 nAdA mARKet BeAt

29 nAdA UPdAte: Countering Congress

www.msada.org Massachusetts auto Dealer SEPTEMBER 2015

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

M A s s A c h u s E t t s

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.

aD DiReCToRy

blumshapiro, 21The boston Herald, 32

ethos Group, 2G&M new england 23

lynnway auto auction, 22nancy Phillips associates, 21

o’Connor & Drew, P.C., 31naDa Convention, 28

southern auto auction, 20

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full Media Kit. e-mail [email protected]

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from the President

SEPTEMBER 2015 Massachusetts auto Dealer www.msada.org

By Scott Dube MSADA President

A

We Bring Communities Together Don Rodman’s charity ride is a great example of the impact we can have

s businessmen and women who operate one of the most important economic engines in our communities across the Commonwealth, we all have a special oppor-tunity to lend helping hands across any number of areas.

The contribution can be as small as sponsoring a Little League team or as large as funding entire programs. But whether we’re donating millions to charity each year, or even giving our time and effort to good causes, our work has a ripple effect throughout our communities. Many times, that ripple leads to attention coming our way. I think it’s safe to say all of us are in it to help out -- we don’t do it for the press.

For Don Rodman, attention for his annual charity ride is unavoidable. It’s even the subject of a newly published book, just as his most recent ride wraps up after another successful year. From the event’s humble beginnings, it is now the No. 1 single-day fundraising event for at-risk kids in the entire country. More than $82 million has been raised since 1991 -- what an incredible number! Check out this month’s new section for more about how this event grew to become what it is today.

And while we should all take a moment to congratulate Don on his dedication, we should also be thinking about what we can do at our own businesses to help our communities. It doesn’t have to be the massive undertaking of a charity ride. It can be as simple as picking up the phone, calling your favorite organization, and asking if there’s some small need they have that you might be able to fill.

When it comes down to it, dealers are part of the lifeblood of many communities across Massachusetts, whether it’s through our daily operations and employee count or simply the ways we help improve young lives. As we enter Fall and start looking ahead to next year, I encourage you to keep all this in mind as well.

Send in those SurveysI know you hear enough about metrics and analytics at your dealership that this

pitch might sound like everything else you deal with daily -- but we need to measure ourselves as a greater dealer community again. What percentage of the economy are we? How many people across the Commonwealth do we employ?

As you can imagine, those numbers are critical when it comes time to fight fallacy with facts on Beacon Hill. We recently sent you our Economic Impact surveys, and I hope you’ll take just a minute to fill them out and send them back. The more we get back, the stronger the data.

Consider it your small but important contribution to making sure we have the right tools we need for the Association to represent our membership

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MSada BoaRd Barnstable County

brad Tracy, Tracy VolkswagenBerkshire 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 CountyJeb balise, balise auto Group

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 Dube

Vice President, Chris Connolly, Jr.Treasurer, Jack Madden, Jr.

Clerk, Charles Tufankjian

MSADA4

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Albin, Randall & Bennett Barton D. Haag (207) 772-1981American Fidelity Assurance Co. Lennox Cornwall (304) 702-7399American Tire Distributors Pamela LaFleur (774) 307-0707 AutoAlert Don Corinna (505) 304-3040Auto/Mate Dealership Systems Troy Potter (877) 340-2677Bank 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, Tom Drislane (617) 929-8373Burns & Levinson LLP Paul Marshall Harris (617) 345-3854Cars.com Heidi Allen (312) 601-5376 CDK Global Chris Wong (847) 407-3187 Construction Management & Builders, Inc. Sarah Macomber (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. David DeCredico (800) 458-7070Ethos 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) 532-9320

Gulf State Financial Services Cliff Lang (713) 580-3143GW Marketing Services Gordon Wisbach (781) 899-8509 Huntington National Bank John J. Marchand (781) 326-0823John W. Furrh Associates Inc. Kristin Perkins (508) 824-4939 KEEPS Corporation Darcy Silver (718) 309-6133Key Bank James Q. Moretti (781) 558-5132, Mark Flibotte (617) 385-6232KPA Michael Hurd (207) 400-6535Leader Auto Resources, Inc. Chuck August (518) 364-8723Lynnway Auto Auction Jim Lamb (781) 596-8500M & T Bank John Federici (508) 699-3576Management Developers, Inc. Dale Boch (617) 312-2100Micorp 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) 393-1400Preowned Auto Logistics Anthony Parente (877) 542-1955 ProActive Leadership Group Bill Napolitano (774) 254-0383Quik Video Jack Gardner (617) 221-5502 R.L. Tennant Insurance Agency, Inc. Walter F. Tennant (617) 969-1300Reflex Lighting Ping Weiner (617) 269-4510

Resources 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) 292-7500Sprague Timothy Teevens (800) 828-9427SunTrust 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 US Bank Vincent Gaglia (716) 649-0581 Wells Fargo Dealer Services Christopher Peck (508) 314-1283 Wicked Local Media Massachusetts Jay Pelland (508) 626-4334 Zurich American Insurance Company Steven Megee (774) 210-0092

MSADA ASSociAte MeMber Directory

Associate Members

Upon its return from the Summer break, the Massachusetts General Court has commenced a flurry of activity as its committees begin holding public hearings in anticipation of sifting through the more than six thousand bills filed for the cur-rent two-year session.

On September 22 the Legislature’s Joint Com-mittee on Consumer Protection and Professional Licensure conducted a public hearing at the State House to take testimony on a number of auto-re-lated bills of interest to your Association. MSA-DA President Scott Dube and me provided the testimony on behalf of your Association.

Bills on which we testified included the follow-ing, with our stated position:• Senate 177 (Sen Pacheco, Rep Speliotis) would amend the Chapter 93B dealer franchise law – MSADA SUPPORTS. Issues addressed in the bill include:

• Prohibits vehicle surcharges by manufacturer to pay for warranty reimbursement at the statu-torily required retail rate;• Limit how often the manufacturer can request a facility upgrade; • Prohibits a manufacturer from requiring a dealer to purchase goods or services from a vendor selected, identified, or designated by a manufacturer or distributor by agreement, pro-gram, incentive provision, or otherwise without making available to the dealer the option to ob-tain the goods or services of substantially simi-lar quality from a vendor chosen by the dealer; • Protects dealer’s customer data from OEMs and other third parties;• Prohibits an OEM from arbitrarily or unrea-sonably altering the geographic area of respon-

sibility within which it measures the dealer’s performance;• Protects dealers from manufacturers’ using ex-port chargebacks to penalize dealers for cars that get exported without dealer’s knowledge; and• Clarifies the current limit on the manufacturer ownership of dealerships and direct sales of ve-hicles by manufacturers.

• Senate 140 (Sen Eldridge) would cap doc prep fees at $100 – MSADA OPPOSES;• House 222 (Rep Linsky) would override the franchise law’s factory-store prohibition to allow Tesla to own and operate stores in the Common-wealth without a franchised dealer – MSADA OPPOSES;• House 258 (Rep Puppolo) would prohibit OEMs from requiring dealers to exclusively sell OEM-only extended service contracts or extended maintenance plans – MSADA SUPPORTS; • House 3383 (Rep Cronin) would institute a digi-tal “right to repair” – MSADA OPPOSES; and• Senate 1989 (Sen Brownsberger) would require inspection facilities to inform vehicle owners of any open recalls on the vehicle at the time of the annual inspection – MSADA OPPOSES.

Tesla company representatives took an active role at the hearing, testifying in favor of the Lin-sky bill, which he filed on their behalf, but also speaking in opposition to our franchise bill. The Alliance of Automobile Manufacturers and Suba-ru New England also offered opposition to our franchise bill. The manufacturers, however, were silent on the pro-Tesla Linsky bill, which is par for the course for the Alliance.

Members of the Consumer Protection Commit-tee are the following:

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the roundup

By Robert O’Koniewski, Esq. MSADA Executive Vice PresidentFollow us on Twitter - @MassAutoDealers

Auto Bills Get Hearing on Beacon Hill

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MSADA

Sen. Barbara L’Italien, Senate Chair (D-Andover)

Sen. Anthony Petruccelli, Senate Vice Chair (D-East Boston)

Sen. Kathleen O’Connor Ives (D-New-buryport)

Sen. Michael Rodrigues (D-Westport)Sen. James Timilty (D-Walpole)Sen. Ryan Fattman (R-Webster)Rep. Jennifer Benson, House Chair (D-

Lunenburg)Rep. Frank Moran, House Vice Chair

(D-Lawrence)Rep. James Arciero (D-Westford)Rep. Evandro Carvalho (D-Dorchester)Rep. Tackey Chan (D-Quincy)Rep. Daniel Hunt (D-Dorchester)Rep. Jose Tosado (D-Springfield)Rep. RoseLee Vincent (D-Revere)Rep. Jonathan Zlotnik (D-Gardner)Rep. Steven Howitt (R-Seekonk)Rep. Joseph McKenna (R-Charlton)

The public hearing is the first procedur-al step all bills must go through. Your As-sociation team has actively lobbied legis-lators on these issues, including through our “Dealer Day on Beacon Hill” when dealers visited their legislators and staff at the State House in May. As we work the legislative process on these matters, we will keep you informed of our progress, including when we may need to ring the bell for a “Dealer Call-to-Action”.

Seven Deadly Sins of Dealer Advertising

The Federal Trade Commission (FTC) official who led the agency’s Operation Ruse Control, which resulted in 252 au-to-related enforcement actions, recently shared the seven deadly sins of advertis-ing that put dealers on her regulatory ra-dar.

Cindy Liebes, director of the Federal Trade Commission’s Southeast Region, offered her list ahead of her September 22 keynote address at DealerSocket’s 2015 Innovate conference, where she outlined the lessons learned from the FTC’s Op-eration Ruse Control.

“No doubt, one of the FTC’s top pri-orities is protecting consumers in the auto marketplace. However, I’ve also heard from many honest dealers saying they can’t compete with the dealer down the street who doesn’t follow the rules,” Liebes said. “Regulatory actions against unscrupulous dealers promote fair competition, which is good for any industry and protects the players trying to do the right thing.”

“While I can’t speak about current non-public investigations, it’s important for dealers to know that the FTC is commit-ted to bringing law enforcement actions in the auto industry,” she added. “We don’t pay attention to the size of a dealer either. Big and small stores need to get their house in order.”

According to Liebes, dealers’ viola-tions include:(1) Twisting the facts about add-ons: For example, a California-based company deceptively claimed in online ads and through a network of authorized dealers that car buyers who purchased its biweek-ly payment program would save money. Consumers weren’t told that the cost of the add-on often outstripped any savings. This case resulted in a $2.475 million set-tlement of refunds and fee waivers.(2) Lowballing your pitch: Several deal-ers recently crossed the line by using headlines to tout bargain prices while fail-ing to adequately disclose the true cost of the deal. For example, one Florida dealer-ship pitched “used cars as low as $99.” But $99 was just the minimum bid for cars offered at a liquidation sale, and that didn’t include substantial mandatory fees. The ads also included photos of loaded cars without clearly explaining that some pictures featured — like spoilers and sun-roofs — weren’t included in the price.(3) Luring customers with misleading “zero” promises: One California dealer’s deceptive use of zero promised “$0 initial payment, $0 down payment, $0 drive-off lease.” Another ad promised “$0 down, 0% APR financing, 0 payments and 0 problems.” But consumers had to pay much more upfront to lease or purchase

the cars. And “0% APR?” The annual per-centage rate for financing those cars for the advertised payment was way more than 0%.(4) Hiding the strings attached to a deal: An Alabama dealership highlighted eye-catching prices without clearly explaining what the vehicle would really cost con-sumers. In some cases, ads featured prices that factored in special discounts or re-bates that weren’t available to everyone. For example, some prices applied only to recent college graduates, a restriction not prominently disclosed.(5) Burying key disclaimers in fine print: Fine-print footnotes, unclear “disclaim-ers” that consumers must scroll down to see, or other buried information won’t live up to the FTC’s “clear and conspicu-ous” standard. Advertisers often ask how big a disclosure must be, but it’s more than a matter of font size. A clear and conspicuous disclosure is one sufficient for consumers to actually notice, read and understand.(6) Ignoring applicable credit laws: One common pothole is using certain “trigger-ing terms” under the Consumer Leasing Act, Truth in Lending Act, Regulation Z, or Regulation M without making re-quired disclosures. For example, adver-tising monthly lease payments kicks in a requirement under the Consumer Leasing Act that you disclose other facts about the transaction. Examples are total amount due at lease signing, whether a secu-rity deposit is required, and the number, amount and timing of scheduled pay-ments.(7) Violating prior orders: The FTC may seek monetary civil penalties for viola-tions of prior FTC administrative orders. For example, the FTC recently brought two actions alleging violations of admin-istrative orders, which prohibited dealers from deceptively advertising the cost of buying or leasing a car. One action result-ed in the dealer group paying a hefty civil penalty, while the other action is pending. These actions show that there can be a fi-nancial cost for violating FTC orders.

MSADA Advertising Seminar – November 10, FraminghamTo assist member dealers in better un-

derstanding the federal and state advertis-ing rules, your Association will conduct a seminar dedicated to this subject matter on Tuesday, November 10, at the Fram-ingham Sheraton Hotel, 9:00-11:00 a.m.

Paul Metrey, NADA’s chief regulatory counsel for financial services, privacy, and tax, will cover federal issues. He will provide a thorough review of the FTC’s recent dealer advertising enforcement ac-tions, such as Operation Ruse Control, and the specific types of advertising that have drawn the attention of the FTC’s lawyers. All attendees will receive a copy of NADA’s “A Dealer Guide to Federal Advertising Requirements”.

Massachusetts attorney Scott Silver-man will cover our own state rules as articulated in the Attorney General’s regulations, which have been the basis of enforcement actions against franchise dealers over the last several years.

Be on the lookout for our registration materials.

Chip-Embedded Credit Cards

Dealers are reminded that many of the major credit card companies have an-nounced that retailers must implement “chip card” (EMV) reading devices by October 1, 2015, or they could face po-tential contractual liability for any fraud that may occur. Dealers should consult their counsel and their credit card provid-

ers to determine the outlines of their con-tractual obligations and the need to install new equipment.

NADA provides additional informa-tion here: http://newsmanager.commpart-ners.com/nadah2/downloads/ChipCard-Memo.pdf.

FTC Action Against Auto Dealer’s Ads

As we have warned previously, the Federal Trade Commission continues to cite dealers for advertising violations. On September 18, the FTC announced a West Virginia auto dealer, Ramey Mo-tors Inc., agreed to pay a $80,000 civil penalty to settle a FTC lawsuit brought in 2014. The FTC charged Ramey Mo-tors with violating the terms of a 2012 consent order with the FTC that barred it from deceptively advertising the cost of buying or leasing cars.

The civil penalty settlement resolves charges that Ramey Motors’ ads violated the consent order by concealing impor-tant terms of sale and lease offers, such as a required down payment, and failing to make credit disclosures clearly and con-spicuously, as required by federal law. The civil penalty order also prohibits Ramey Motors from violating the 2012 order.

The Commission vote authorizing the staff to file the stipulated civil penalty or-der was 5-0. The order was entered by the U.S. District Court for the Southern Dis-trict of West Virginia, Bluefield Division, on September 9, 2015.

Mass. TIME Dealer of the Year, Adam Connolly

MSADA proudly announces that Adam Connolly of Herb Connolly Motors has been selected as the Massachusetts 2016 TIME Dealer of the Year Award winner. The TIME DOY award recognizes new vehicle dealers across the country for exceptional performance in their deal-erships, combined with distinguished community service. Adam will represent Massachusetts in the National competi-tion, which will take place at the upcom-ing NADA Convention in Las Vegas, March 31 through April 3, 2016. It is the highest honor bestowed on a dealer each year at the NADA Convention. Congrat-ulations to Adam, and good luck on the national stage next year!

Heavy-Duty Truck Right to Repair MoU

Earlier this month the aftermarket re-pair industry and truck and engine mak-ers announced they have reached an agreement on the sharing of heavy-duty vehicle service information, which will give truck owners more options for di-agnosing and repairing today’s heavily computerized commercial vehicles.

The Commercial Vehicle Solutions Network and the Truck and Engine Man-ufacturers Association, together with the Equipment and Tool Institute, the Auto Care Association, and Heavy Duty Af-termarket Canada, have signed a Memo-randum of Understanding addressing the availability of service information for

the roundup8


“People not involved in our industry are consistently surprised by the fact that

our dealers’ businesses account for almost 20 percent of the total retail economic

activity in Massachusetts.”

model year 2010 and later trucks and buses over 10,000 pounds sold in the United States and Canada.

The landmark agreement will ensure that vehicle owners and independent re-pair facilities have access to the OEM-controlled service information, tools, and parts that they need to safely and proper-ly repair commercial vehicles. The MOU also memorializes the current industry practice of providing diagnostic tool in-formation to third-party aftermarket tool manufacturers, which gives owners ser-vice options when main-taining or repairing their vehicles.

The OEMs and dealers have expressed concerns about proprietary informa-tion being used to reverse engineer inferior replace-ment parts, as well as con-cerns about whether inde-pendent shop technicians are properly trained and have the right equipment to correctly do these repairs.

Under the terms of the MOU, the participating industry associations will work together to monitor the exchange of service information and address any information access issues, with the goal of helping to ensure that vehicles are properly and safely maintained with the correct parts and tools.

As readers may recall, groups pushing for this access have lobbied for federal and state legislation that would require it, with the most notable activity occur-ring here in our Commonwealth. How-ever, under the law we re-passed in 2013, heavy-duty trucks were essentially ex-empt from our RTR provisions.

Further, this truck MOU is based on a similar effort the national associations for the car manufacturers and the after-market industry executed in 2014. Keep in mind, however, that neither MOU had dealer input nor contained the pro-dealer amendments we successfully lobbied for inclusion in our Massachusetts RTR law.

ATD, the heavy-duty truck arm of

NADA, is presently reviewing the MOU to ascertain its potential effect on dealers.

2015 Washington Conference

As we go to press, a contingent of MSADA officers and staff is preparing to attend NADA’s Washington Con-ference, to be held September 29-30. Nearly 400 franchise new-car and truck dealers from across the country attend the conference each year. The confer-ence will include briefings from NADA,

lawmakers, government officials, and political commentators. We have a full schedule of meetings with our Members of Congress to discuss issues affecting our dealership businesses, including the Consumer Financial Protection Bureau’s flawed “guidance” on auto lending. You can read more about our annual pilgrim-age in next month’s magazine.

Economic Impact ReportOnce again we are asking you to assist

us in creating our annual Economic Im-pact Report, which we use with legisla-tors and opinion makers to demonstrate the real dollar and cents economic impact that dealers have on our Commonwealth and in their cities and towns. People not involved in our industry, including law-makers, are consistently surprised by the fact that our dealers’ businesses account for almost 20 percent of the total retail economic activity in Massachusetts.

Getting these figures out is crucial to raising awareness of our industry’s im-

portance, especially as legislators ponder various new methods of raising revenue. Dealers and our customers’ purchases are consistently made targets of revenue initiatives that hurt the economy and our customers’ pocketbooks. But facts don’t lie, and we need to make it difficult for those who look to businesses to bear the burden during tough budgetary times to justify cutting us off at the knees more than they already have.

We recently sent the form to you. Please take a few minutes to complete

the survey form for each of your dealerships and fax it to Auto Outlook at (610) 640-2907 as soon as possible. Your submitted survey is strictly confi-dential. We need returns from at least half our members for our survey to be ac-

curate. We will be collecting the surveys until the end of October. Thank you for your assistance on this project.

2016 Auto Show, Dealer Summit & Charity Gala

Circle the dates now – MSADA’s 59th edition of the New England International Auto Show will run January 14-18, 2016, at the Boston Convention and Exposition Center in South Boston.

In order to celebrate our Auto Show, dealers, their families, and key em-ployees are invited to attend on Friday, January 15, our Nineteenth 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 the 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.

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9MSADA

“In order to celebrate our Auto Show, dealers, their families, and key employees are invited to at-tend on Friday, January 15, our Nineteenth Annual Auto Show

Charity Gala at the BCEC.”

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aUGUST 2015 Massachusetts auto Dealer www.msada.org

MSADABusiness is Good

A customer is 4 times more likely to defect to a competitor if the problem is service-related than price-or product-related. – Bain & Company

The probability of selling to an existing customer is 60 – 70%. The probability of selling to a new prospect is 5-20%. – Marketing Metrics.

A 2% increase in customer retention has the same effect as decreasing costs by 10%. – Leading on the Edge of Chaos, Emmet Murphy & Mark Murphy.

55% of customers would pay extra to guarantee a better service. – Defaqto research.

MSADA

MSADA


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Here at your Association, we field legal inquiries from dealers and their employ-ees on a daily basis. Many of these ques-tions reappear from time to time and this column will periodically review some of the most frequently asked questions that we answer for our members.

Q: A customer is nearing the end of her lease term and wishes to purchase the vehicle. The dealer executes the transaction for the customer. When the transaction was processed, the ve-hicle had 41,000 miles on the odom-eter. After driving the vehicle for two thousand miles over the course of fifty days, the customer returns to the dealership with an engine problem and asserts her rights under the Used Car Lemon Law. What should the dealer do?

The dealership should kindly inform the customer that, while they would be happy to repair the vehicle, the customer would be financially responsible for the repairs. This is because vehicles pur-chased by a lessee from the lessor are excluded under the Massachusetts Used Car Lemon Law, M.G.L. c. 90 §7N ¼. Section 12 of the law states: “The provi-sions of this section shall not apply to the sale of a leased vehicle by a lessor to the lessee of said vehicle, a family member or employee of said lessee or to the sale of a used motor vehicle by an employer to his employee.” If the transaction in the fact pattern above was changed to a

traditional used vehicle sale then the cus-tomer would be able to assert her rights under the law, as the vehicle would be within the warranty period based on the number of miles driven and days since the delivery of the vehicle.

Q: Many dealerships had vehicles that were damaged in a recent hail storm. In most instances, the damage to the vehicles was superficial and would have no impact on the vehicle’s future performance once repaired. Must a dealer disclose this hail damage to a potential customer?

As astute readers know, this is simply the latest example of a common query that we receive from members frequent-ly at your Association. Some states have a threshold damage disclosure amount and any damages that do not meet that threshold do not have to be disclosed to the consumer. For instance, damage to a new vehicle in North Carolina does not have to be disclosed unless the damage and repair on the vehicle exceeds five percent of the MSRP on the vehicle. Other states use a combination of per-centage of MSRP or $500, whichever is greater, with no duty to disclose any damages that fall below the threshold amounts.

There is no threshold amount for dam-age disclosure in Massachusetts. Under the Massachusetts Attorney General’s regulations, 940 CMR 3.16, a dealer must disclose any material fact that would affect a consumer’s decision to purchase an automobile. Thus, the fail-ure to disclose any damage – regardless of dollar amount – that would influence a buyer not to enter into the transaction is an unfair and deceptive practice. Ac-cordingly, dealers need to disclose any and all facts about a vehicle to a buyer or prospective buyer no matter how trivial the information may appear to be.

In this manner, a dealership can pro-tect itself and avoid the severe penalties

(treble damages, attorneys’ fees) pro-vided under M.G.L. 93A, the Consumer Protection Act.

Q: If I terminate an employee for stealing dealership funds, do I have to give the employee her last paycheck? Can I instead apply these funds to-wards the loss?

While withholding an employee’s fi-nal paycheck after dismissing the em-ployee for theft might seem like a rea-sonable and fair action in light of the cir-cumstances, such practice was prohibit-ed by the Massachusetts Supreme Court in a 2011 decision. Under Camara v. At-torney General, an employer cannot de-duct from an employee’s wages without a “valid set off,” which requires a clear and established debt, determined by an impartial third party, such as a court.

Even if an employer has a specific policy requiring the employee to reim-burse the company for lost money, the policy would be ruled invalid in court, and the deduction would not be permit-ted. If an employer wishes to seek reim-bursement under similar circumstances, he must get a judgment against the em-ployee in court.

Without the valid set off, the employer would be liable for treble damages under the law: three times the amount of any invalid deduction. In addition to obtain-ing a judgment, the dealer should also notify their insurance carrier because employee dishonesty may be covered under the dealership policy.

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If you require any additional infor-mation regarding prize promotions 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.

MSADA StAff Attorney

By Peter Brennan, Esq.

Frequently Asked Questionstroubleshooting


AUtO OUtLOOK12 AUtO OUtLOOK


MSADA 13

14


MSADALegal

Many businesses treat certain workers performing services for them as indepen-dent contractors. Many of those businesses think simply having an agreement with the worker setting forth his or her independent contractor status is sufficient to establish such a relationship. Those businesses are wrong. In fact, whether a worker is an independent contractor, as opposed to an employee, will depend on the facts and circumstances of the job, the actual rela-tionship between the worker and the busi-ness, and the context in which the matter is considered—as different tests apply in different situations.

While it is difficult to provide blanket recommendations, largely because differ-ent agencies consider whether workers are independent contractors under different standards, the U.S. Department of Labor recently issued new guidelines for consid-ering whether a worker is an independent contractor under the laws it is charged with enforcing, such as the Fair Labor Stan-dards Act. These guidelines make it more difficult for employers to treat workers as independent contractors under federal law.

In considering whether a worker is an independent contractor or an employee, the Department of Labor generally will look to the following, non-exclusive factors:- the degree to which the individual’s work

is controlled by the business;- the individual’s investment in equipment

and facilities;- the individual’s opportunity for profit or

loss;- the amount of initiative, judgment, or

foresight the individual uses in open-market competition;

- the permanency of the work relationship; and

- the extent to which the individual’s work is an integral part of the organization’s business or activities.The first group of factors generally are

“behavioral”; they consider the extent of

control the business has over the worker. For example: What types of instructions are given? What are the details of those instructions? Does the business evaluate performance? Does the business provide training?

The second group of factors generally are “financial”; they examine whether the worker him or herself controls the busi-ness aspects of his or her job. For example: Does the worker invest in his or her own equipment? How does that compare to the business’s investment? Are the worker’s services available to the market? Or does he or she work for just the one business? Is the worker paid a flat fee? Or does he or she receive an hourly rate or salary?

The third group of factors generally look at the “type of relationship” between the parties. For example: Is there a written agreement manifesting the parties’ intent of an independent contractor relationship? Does the business provide fringe benefits? Is the relationship permanent? Or can (and does) the worker provide services to other business? Are the services the worker pro-vides a key activity or component of the business?

Notably, the Department of Labor gen-erally will consider all of these factors, and none of them are determinative. The focus generally is on whether the worker is “eco-nomically dependent” on the organization or truly in business for him or herself.

As the foregoing shows, the Depart-ment of Labor takes a very broad view of what it means to be “employed” and con-siders most workers as employees under the Fair Labor Standards Act. Moreover, the Wage and Hour Division currently is focusing largely on misclassification is-sues and plans to engage in new initiatives to address the issue.

Of course, Massachusetts has its own stringent independent contractor law, which already makes it extremely dif-ficult for businesses to have independent

contractors. Under Massachusetts law, a worker is an employee unless (1) he or she is free from control and direction in con-nection with the performance of his or her work, (2) the service provided is “outside the usual course of business of the em-ployer,” and (3) the worker is customar-ily engaged in an independent business of the same nature. Accordingly, the U.S. Department of Labor’s new guidance is, in a sense, redundant for Massachusetts em-ployers.

Review Your Independent Contractor Relationships

If you have independent contractors per-forming work that is a part of your busi-ness, you should consider having those arrangements reviewed by counsel. If the Department of Labor ultimately deter-mines you have misclassified workers, your dealership could owe significant back pay and/or other compensation to those workers, and double that amount as liqui-dated damages. Moreover, the Department of Labor has “memoranda of understand-ing” with the IRS and other agencies and, accordingly, your dealership could owe significant payroll taxes and other penal-ties as well.

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New U.S. Department of Labor Independent Contractor Classification Guidance

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.

By Joseph W. Ambash and Jeffrey A. Fritz

An accountant’s “bucket list” is about as exciting as the current Red Sox season! While there will truly be no harm from an-other possible last place season from the Sox, there can be significant consequences to ignoring the CPA’s bucket list. The list is not simply items that would be “nice to do” but rather issues that can cause real re-gret when not attended to. Let’s take a look at the list and see where you stand.

Buy-Sell AgreementsAny business or partnership with two

or more owners should have a buy-sell agreement. This will clearly spell out what happens in the event that one of the own-ers wishes to sell their interest or in the unfortunate event of death or disability. The agreement generally restricts the sale of the interest to either the other current owners or a buy-back of the interest by the company. It is common to have the fund-ing of the buy-out supported by life insur-ance on each of the owners. It is important to properly structure these policies and pe-riodically compare the coverage amounts to the value of the business. Completing these types of agreements is important to maintaining stability and continuity in the business.

Estate & Business PlanningFor some, the increase in the federal es-

tate tax exemption to $5.43 million and the ability to transfer excess unused exemption to the surviving spouse has impacted the perception as to the importance of estate and business planning. This can be a mis-

take on several levels. First, many states have a much lower exemption amount, which surprises many taxpayers when they review projected “state” estate taxes. Second, business and real estate values have risen significantly over the last sev-eral years. The business assets will likely continue to appreciate and the real estate will increase through increased valuation and via pay-down of the associated debt. A well thought out planning exercise ad-dresses the above tax issues, but also deals with critical issues such as ownership suc-cession, management oversight, passing of assets via trusts or outright, cash flow issues related to ownership transfers, and buy-sell agreements, as discussed above. Don’t wait until a crisis occurs to start

planning. Unfortunately, this is all too common and often reduces one’s options.

IT Data Security ReviewEvery single business that uses technol-

ogy (and who doesn’t?) should be conduct-ing a fairly straight-forward data security and IT vulnerability review. We all simply cannot afford not to. The consequences of a data breach or a customer’s stolen identity or the misuse of your employee’s personal information is simply “ugly.” A general review by a qualified expert can provide great value and peace of mind as to the sta-tus of your IT security. Our IT Audit group can help you assess where your company stands and provide recommendations on how to fix any weaknesses.

Human Resource ComplianceThe number one area for small business

“claims” is under the human resource um-brella. This can be wrongful termination, various forms of discrimination, overtime and minimum wage violations, and other employee disputes. Additionally, the cur-rent health care regulations are simply over-whelming and require an analysis relative to the specifics of your company. Be sure to periodically have a thorough review of your HR practices to limit your exposure.

Insurance ReviewThe complexity of the terms of any

insurance policy can be difficult to un-derstand. Maintaining the proper cover-age and clearly knowing what “is” and

“is not” covered is only important if you have a claim. That is not a good time to find out that the event falls into the cat-egory of “not” included or covered under your policy. It is good practice to care-fully review all coverages and not simply “renew” based on last year and negotiate solely on price. Additionally, coverage for various information technology and em-ployee matters is constantly evolving and an overall review of coverage requires the assistance of an insurance advisor.

Managing risk is an important part of running a business. The best-run dealer-ships perform a periodic review of the is-sues discussed to ensure that they are one step ahead of potentially costly problems.

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An Accountant’s ‘Bucket List’By Mark V. DowMArk V. Dow, cPA, MSt, iS A PrinciPAl At o’connor & Drew, P.c. he cAn be reAcheD At (617) 471-1120.

MSADA 15


Accounting

“Don’t wait until a crisis occurs to start planning.

Unfortunately, this is all too common and often reduces

one’s options.”

16 Cover Story


By Tom NashDuring the final lap of the 1981

Talladega 500, a Winston Cup rookie snuck past a dueling Dar-rell Waltrip and Terry Labonte to take the checkered flag with only two feet to spare. It was Ron Bouchard’s first, and only, win in the sport’s premiere series. But it remains one of the most thrilling NASCAR finishes ever, in a sport where a moment of excitement can reverberate for decades.

Bouchard moved on from the series after the 1987 season -- after finding that selling cars could be just as exciting and much more profitable. But 28 years later, after opening stores across cen-tral Massachusetts, Bouchard is dusting off, tracking down, and recreating the memories surrounding that moment and a career as one of New England’s preeminent stock car driv-ers.

The RB Racing Museum opened in Sep-tember -- just steps from where he’s moving metal at his Dodge-Chrysler store in Fitch-burg. Having started in the dealership busi-ness while still in Winston Cup, this is the first time in nearly 30 years the two worlds

have come together.“For years I had all my stuff every-

where else,” Bouchard says. “I never re-ally put it out. Now there’s 2,500 square feet of cars and pictures and trophies.”

Getting the RideBouchard’s racing career began at

14, subbing for the driver of his father’s modified ride at the Brookline Speed-way in New Hampshire. He won that first race, beginning a modified career that took him to tracks across New England, including Stafford Speedway, Thompson Speedway, Seekonk Speed-way, Westboro Speedway, and the Wa-terford Speedbowl. By the time he got the call for his first Winston Cup ride, he’d amassed several track champion-ships and around 300 wins.

Bouchard had gotten the call twice be-fore, actually. He’d turned down rides from Connecticut-based owner Jack Beebe because he was happy working for his fa-ther’s trucking business and racing most nights every week.

Ron Bouchard on a life spent behind the wheel and in the showroom

Victory R e v i s i t e d

“The third time he called I was in Martinsville, Virginia,” Bouchard re-calls. “He said, ‘Hey, I want you to drive the [No. 47]. Harry Gant got a seat with Hal Needham and the Skoal car, and we need you to drive.”

It was too good an offer to refuse: “The following week, I was in that car.”Bouchard was in victory lane in Talladega by his 11th start -- a feat not

matched by legends such as Richard Petty or Dale Earnhardt. After clinching the Rookie of the Year title in 1981 and finishing 8th in the Cup standings in 1982, however, Bouchard didn’t find victory lane again. As he continued taking different rides in the series, he found himself focusing on another competition altogether.

Moving MetalBeing a New Englander participating in a predominantly Southern sport

came with more than a few logistical challenges. Driving for Beebe meant an extra haul from Connecticut to tracks mostly sprinkled throughout Vir-ginia and North Carolina.

“When I went to the Winston Cup series I never moved to the South,” the Fitchburg native says. “I always stayed a Yankee, or whatever you wanna call it.”

Bouchard started selling used cars when he was back home, during the off season. By 1985, four years into his Cup career, he was a Honda franchise owner. By the time he signed on for an Acura franchise, he realized a choice had to be made. By 1987, he had shifted around teams enough to know he wasn’t as competitive as he could be.

“I said, ‘Look, there’s not enough time for me to do all this.’ I didn’t have a ride I really wanted to drive. That’s when I decided it was time to hang up the gloves,” adding, “I was 39 years old at that point.”

Cover Story 17


MSADA

Racing Career at a Glance• Over 300 modified race wins

• 1973 and 1979 modified championships

• Late Model Seekonk Speedway Track Champion: 1967-1971

• 160 Winston Cup Starts, including 60 top 10s, three poles

• 1981 Winston Cup Rookie of the Year

• 1981 Talladega 500 winner

• Inaugural Class of New England Auto Racers Hall of Fame, 1998

Victory Revisited


18

Not that he didn’t have regrets at first. “For a couple years, it was really tough to watch it and not go to the races. I worked seven days a week at the dealerships to keep myself good and busy. After a few years, it went away.”

Bouchard continued to build the dealership business around the Fitchburg area, which now includes Chrysler-Dodge-Ram, Kia, and Nissan in addition to the Honda and Acura stores. His brother, Ken, also had a stint as a Cup driver before starting a driving school and working in the parts department at the Chrysler dealership.

While the memorabilia stayed in the back office at first, a Nissan rep who worked with famed NASCAR owner Roger Penske was incredulous upon learning of the Bouchards’ past.

“The guy says, ‘You’re crazy, you should put out some of your racing stuff.’”

Bouchard’s wife, Paula, put up a set of photos in a newly built Honda store. It was then he realized he could do more. The Nissan manager said he was losing business. “Customers would come into the Nissan store, hear about the pictures in the Honda store and then go over ... and buy a Honda.”

Tracking Down HistoryFor many, the sight of the No. 47 Buick edging across the

finish line at Talladega remains as elusive as the car itself be-came. Since Winston Cup races weren’t aired in their entirety in 1981, broadcasters would either cut in for the last few laps or run a highlight reel in the evening. As Bouchard snuck around Waltrip, with fellow New England native Ken Squier announcing, TV screens across the country went black.

Bouchard’s father threw his set across the room. One of the closest finishes in NASCAR history had to be caught later. The car continued to be elusive decades later -- Bouchard eventually tracked it down a few years ago to a garage in North Carolina where a collector had skipped out on the bill.

“The museum shows people how things have changed not only in race cars, but the street cars we drive.”

He bought the car, restored it, and it will be a centerpiece in the new 2,500 square foot museum. The former Honda service drive became Paula’s passion project for nearly a year -- with 12 cars from various points in Bouchard’s career and other vintage autos on display.

Many of the most treasured items have been donated or giv-en away over the years. The fire suits are nearly all replicas, and the Talladega trophy, shoes and firesuit Bouchard wore in 1981 now belong to the NASCAR Hall of Fame in Char-lotte. Amassing the items for replication has finally given him a chance to reflect on both his own history and the history of the sport in general.

“The museum shows people how things have changed not

only in race cars, but the street cars we drive,” Bouchard says.The RB Racing Museum, located at 300 Lunenburg Street,

Fitchburg, is on the Chrysler store property, where he hopes museum goers will stop in. In the 30 years he’s been in the dealership business, the competition is as tough as ever.

“Back in the day you had Toyota and Honda and Nissan -- those were the good cars. Now you have dealers on every corner,” Bouchard says. “And you have to be good at every part of this business -- not just selling new cars, you gotta sell used ones. You gotta be really good in the repair shop. Cus-tomers expect more than you can even imagine and you have to give it, or they’ll go some place else.”

In a market that thrives on standing out, the museum will finally unite both Bouchard’s racing glory days and his suc-cess as a dealer.

“It’s been good for me and my brother and a lot of the fam-ily members to put that stuff out there. It certainly hasn’t hurt our business. It lets people know Ron Bouchard was a regular guy who became a race car driver then a car dealer. Nothing’s changed.”

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MSADA

BOSTON

Patriots Wide Receiver Moonlights at Prime Motor Group

From Super Bowl-winning touchdown to junior sales associ-ate -- that’s the gist of Prime Motor Group’s ad featuring Patriots wide receiver Julian Edelman as a struggling salesman.

“Julian’s having a slow off-season,” CEO David Rosenberg says in the two-minute spot. “I guess he’s not so good at manag-ing his money.”

The ad, which ran in August, shows Edelman tossing out lines at would-be customers ranging from “You can return it after I leave, so it’s like a free car” to “This car is like catching the winning touchdown at the Super Bowl? Do you know what that feels like?”

Edelman’s primary gig seems to be off to a better start this season.

MSADA


from Around the HornNEWS from Around the HornNEWS20

MSADA


21from Around the HornNEWSBOSTON

automotive Grads Find Success across Industry

Benjamin Franklin Institute of Technology’s automotive technology program is the oldest of its kind in the coun-try, first opening its doors in 1908 to train technicians to repair the earliest automobiles. Today, students are trained in a “live” automotive shop environment where they are responsible for checking in customer vehicles, running diagnostic tests, ordering parts, and making repairs. This hands-on training prepares students for a variety of posi-tions in the industry.

Three recent BFIT graduates found work at Shaker Auto Group, but each with a different role at the company. Juan Franco ’14 is now working as a Product Specialist in sales at Wellesley Mazda. “My experience at BFIT was great. The hands-on learning was phenomenal,” Franco said. “Having the technical background gives me an advantage when I speak with customers.”

Andrison Carrera ’15 worked part-time at Shaker Auto Group while still taking classes. Speaking about his experi-ence at the college, Carrera said, “BFIT has a very good reputation because it is a comprehensive program. In to-day’s world, even in the automotive industry, it’s common for people to have a degree.” With his industry experience, Carerra was recently hired at another Boston area deal-ership after graduation and continues to use the skills he learned in the classroom and on the job site.

Another former classmate, Raoul Junior Joseph ’14, fo-cuses on vehicle acquisition. Joseph applies his knowledge of cars to the retail side of the industry, purchasing hun-dreds of thousands of dollars in pre-owned vehicles online per week. “When I graduated, I was applying to a lot of places. I was surprised how quickly dealerships noticed my resume. BFIT opens the doors of opportunity for you.”

Joe Shaker, owner of Shaker Auto Group and member of the BFIT Board of Trustees, realizes the enormous potential of the college’s graduates, “BFIT students are so well-rounded,” Shaker said. “They learn automotive technology, and also in-terpersonal, communication, and management skills. It’s clear they’ve had a comprehensive and in-depth education.”

left to Right: Jaun franco ‘14, Joe shaker, andrison Car-rera ‘15, and Raoul Junior Joseph ‘14 (Courtesy benjamin franklin institute of Technology).


from Around the HornNEWS22

NATICK

Local dealers organize Electric Test drive at Farmers’ Market

Patrons of the Natick Farmers Market had the opportunity to celebrate National Drive Electric Week in September. During the event, participants had the chance to view and test drive electric and hybrid cars from local dealers, including BMW, Volkswa-gen, Toyota, Nissan, and Ford. Local electric car enthusiasts also showcased their own cars.

The event, organized by a local chapter of the Sierra Club, was designed to help area residents discuss the costs, benefits, charg-

ing, and emissions associated with plug-in electric vehicles.

“Electric vehicles include some of the latest automo-tive technology out there, and the state and federal re-bates currently available can make these cars a very viable

option,” said Philippa Biggers, Sierra Club volunteer and the event’s co-organizer.

The event also featured the Town of Natick’s new electric car, a 2015 Ford Focus Electric, and information regarding the Town’s

plans to install an electric vehicle charging station in Natick Center. Both the car and charging station are funded by grants from the state Department of Environmental Protection’s Electric Vehicle Incentive Program (MassEVIP) and the Department of Energy Resources’ Green Communities Program. The car will be used by the Assessors Department, which makes local trips around Natick each day, and is expected to save the Town $1,300 a year in fuel costs. The charging station, which is scheduled to be installed in fall 2015, will provide free charging to the public.

BRIDGEWATER

dealer Takes advantage of Nebraska’s Cheap Titles

A low car titling fee in Nebraska likely prompted a Massachu-setts dealership to turn to the Lancaster County Department of Motor Vehicles for such certificates.

LaBelle Chevrolet of Bridgewater has requested and received nearly 3,000 car titles from the Lancaster County DMV since February, said Don Arp, motor vehicle manager for the Lancaster County Treasurer’s office.

The Nebraska DMV charges just $10 per title, while Massa-chusetts charges $75. Nebraska allows out-of-state companies to get newly purchased vehicles inspected outside of Nebraska and then have those inspection documents sent to DMV offices in

MSADA 23


Nebraska for titling.LaBelle has established a subsidiary with a Lincoln office

that provides the dealership a local presence required for it to request and receive car titles from Nebraska, Arp said.

Law enforcement in Massachusetts inspects the cars that LaBelle imports from Canada, and LaBelle sends the inspection documents to its Lincoln office. Staff in that office then takes them to the Nebraska State Patrol for review, before handing them off to the Lancaster County DMV for titling.

Once the vehicles are titled, LaBelle sells them in Mas-sachusetts by auction or at the dealership.

“The vehicles actually never come here, but they’re titled here,” Arp said. “It’s legal. He’s just using what’s available to him.”

The practice creates a burden on the Lancaster County DMV office, where one worker spends about four hours a day processing LaBelle titles. County Treasurer Andy Stebbing said he wants the state’s titling fee to be raised to $25 to discourage such practices.

“Titling cars from outside of Nebraska for the purpose of the company trying to save money is becoming bur-densome on my office,” he said. “We’re hoping to seek a change in statute where we would be more competitive with other states.”

QUINCY

Automotive News Profiles Quirk Ford Technology Program

Members of the Quirk ford Technology Team: back row, from left, shane Paccioretti, David Phelan, Thomas Pugsley and Mike Calnan; seated, from left, James Hussey, steve bowe and Ryan Cox. The teens typically spend about an hour with customers.

Automotive News profiled the Quirk Auto Dealers’ Technology Team, made up of high school students as young as 14 who are eager to learn the ropes of the business world while employing their own set of high-ly-developed skills.

The teens have been contributing to Quirk Ford, where they work with customers at delivery or during service visits -- giving tutorials, answering questions, and pairing phones with Bluetooth.

The students earn $11 an hour working evenings and weekends during the school year and full-time during the summer. For many, it’s their first actual job and a welcome alternative to McDonald’s, Walmart, and oth-er places their friends end up working.

“I love coming to work every day,” Thomas Pugsley told the magazine. “We’re dealing with customers who are buying expensive cars and want to know what they’re getting for their money. We show them their vehicle ba-sically top to bottom, from the hood to the spare tire.”

The full article is available at www.automotivenews.com.

24


from Around the HornNEWS MSADAFOXBOROUGH

Rodman Ride for Kids Becomes Subject of New Book

Don Rodman, founder of the Rodman Ride for Kids and Rod-man Ford, is featured in a new book, “Rodman’s Ride and Other Stories of Giving”, by Sandy Giardi and Bill Mosher.

The Rodman Ride for Kids is an umbrella matching gift char-ity raising funds for youth-focused social-service organizations that support at-risk children in Massachusetts.

The Rodman Ride for Kids, a 25-, 50- and 100-mile noncom-petitive cycling tour held each fall, is among the top in the nation for single-day athletic fundraisers focusing solely on supporting at-risk children.

“Reaching our 25th anniversary is a milestone,” Rodman told The Sun Chronicle. “It means that the future of hundreds of thou-sands of kids at risk have been improved by the generosity of so many people.”

“Rodman’s Ride and Other Stories of Giving” is an in-depth account of Don Rodman’s life. It tells how he went from a child of the Depression, grateful for the generosity of those around him, to a successful philanthropist. As both a memoir and a “how-to,” the tales of charity from Rodman and several friends and associates divulge how Rodman sparked real change and de-veloped a charity organization that reaches out to so many.

“I feel that the most important take-away is the importance of charitable giving at a young age. It becomes a culture when you start young and experience the benefits of being charitable, which are indescribable,” Rodman said.

NORWOOD

Ernie Boch, Jr. Hosts donald Trump Event

Boch Automotive owner Ernie Boch, Jr. gave top billing to GOP presidential candidate Donald Trump in August when he

hosted “The Don-ald” and over a thousand support-ers at his Norwood home.

Guests paid $100 each for the event, which fea-tured music and a Q&A session with

the candidate. Trump thanked Boch for hosting, saying, “Not a lot of people have properties this big. This is a big sucker.”

Known for his pointed jabs at other presidential competitors, Trump also took special aim at former Massachusetts Senator and current Secretary of State John Kerry.

NORTHAMPTON

Tommy Car auto announces the Winners of its Summer Long Car Giveaway

Northampton Volkswagen, Country Nissan, and Country Hyundai announced the winners of their Summer Long Car Give-away. Trisha Slowinski of Colrain Massachusetts won the brand new Volkswagen Passat. Sarah Chase of Greenfield Massachu-setts won the brand new Nissan Versa Note. Theda Marinelli of Windsor Connect-icut drove away in the brand new Hyundai Accent.

The giveaway, which ran from June 3 through Sep-tember 7, allowed customers to reg-ister at any of the three dealerships for their chance to win.

“I was shocked that I was the winner. You never think anything like this would happen to you and then it did. I am so thrilled that Country Hyun-dai had this giveaway and I love my new vehicle,” stated Mari-nelli.

Carla Cosenzi, Owner of Tommy Car Auto Group, stated, “We wish all of the winner’s congratulations and safe driving from everyone here TommyCar Auto Group. The car giveaway was a great success for us, and we’re extremely happy with the over-whelming positive response it received.”

SOMERVILLE

Herb Chambers Hits $1.5 Billion, Hints at Retirement

Herb Chambers, the Dorchester native who built one of the largest car dealership businesses in the country, is now worth an estimated $1.5 billion.

That’s according to Bloomberg, which said the value of his 55-dealership empire — based in Somerville — got a boost in March after Warren Buffett purchased the nation’s largest closely held car retailer, Van Tuyl Inc., “at a big premium.”

During the past three decades, Chambers has built an empire of dealerships that report total annual sales of about $2.5 billion and employ 2,200. The company says it’s the fourth-largest of the country’s 17,000 automobile dealerships.

Chambers also told Bloomberg that he’s open to potentially selling his empire.

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Carla Cosenzi President of Tommy Car auto with Trisha slowinski winner of the Volkswa-gen Passat

MSADA 25Parts & service


Is your dealership still using those old yellow-corded plugs to repair tires? Are your technicians fixing tire punctures with-out inspecting the inside of the tire for inner liner damage? Then $22 million is poten-tially what you are willing to gamble by not following established tire repair standards; $22.8 million was the recent judgement against a dealer and other defendants in California.

This California dealership committed two critical errors: They repaired a tire that should have not been repaired, and they in-correctly repaired the tire. One year after the tire repair, the family was travelling down the highway on this repaired tire, and that tire failed, fatally injuring the two parents in the van. This whole scenario could have been avoided very easily. If the dealer had followed the Rubber Manufacturers As-sociation standards for tire repair, the tire would have been taken out of service, thus saving two lives. The standards for tire re-pair have changed drastically from the time when your Dad would take the family car down to the local gas station when the tire had a nail in it. Back then the “mechanic” would pull out the nail, without unmounting the tire and inspecting the inner liner, stick a corded “plug” in the nail hole and air the tire back up.

But since the Firestone/Ford tire recall the standards have changed. The federal gov-ernment came out with a “rule book” called the Tread Act. The Tread Act changed how retailers handle tires, and flat repairs is one of standards that changed. The corded type of tire repairs “plugs” are deemed “tempo-

rary” in which you carry the liability for as long as the tire is in service. In some states there is talk of legislating tire repair and out-lawing the use of “plugs”.

The main issue with the use of those type of repairs is that the tire does not get un-mounted from the wheel so the inner liner can be inspected for damage. The inner liner is the part of the tire that holds air. That in-ner liner gets damaged by driving on a se-verely under-inflated tire. Once the inner liner is damaged, the ability to hold air is compromised, and under heated conditions (driving on the highway) dramatically in-creases the risk for failure.

Get ahead of the legislation and keep your liability to a minimum. Follow the RMA standards for tire repair, which are as follows: •Repairs are limited to the tread area only,

within the outer ribs of the tire.•Puncture injury cannot be greater than 1/4

inch (6mm) in diameter.•Repairs must be performed by removing

the tire from the rim/wheel assembly to perform a complete inspection to assess all damage that may be present.

•Repairs cannot overlap.•A rubber stem, must be applied to fill the

puncture injury and a patch must be ap-plied to seal the inner liner. A common repair unit is a one-piece unit with a stem and patch portion. A plug or patch by it-

self is an unacceptable repair.Words of caution when setting up your

flat tire repair station: Do not mix chemi-cals (bonding agents) from other manufac-turers. Purchase all of your materials from one vendor. Manufacturers will use dif-ferent compounds, and not all compounds and patch/plugs work together. The wrong choice could be a costly one.

You don’t have to be afraid to perform flat repairs in your dealership. In fact, flat repair is a service you need to perform to keep your customers. Once your customer goes down the street to the “tire store”, you are giving your competition the opportunity to keep your customer, and, in the end, that could cost you a lot of money.

Like any other service you provide on safety items (brakes, suspension, etc.), your technicians just need to do it right! Correct tire repair procedures can be found on the Rubber Manufacturers Association website, http://www.rma.org/tire-safety/tire-repair. Make sure you have a professional help you make the right decisions on what products you should have in your flat repair station, along with training your technicians on proper flat tire repair.

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Contact Kevin Casida, ATD’s National Field Training Manager, at kcasida@

atd-us.com or (734) 308-3786.

Have $22 Million to Gamble with?By Kevin CasidaAmerican Tire Distributors


26 nAdA Market BeatProduced by Steven Szakaly, NADA Chief Economist

In August, the SAAR topped 17.7 million, beating our expecta-tions. Light-truck sales trounced cars (57.3 percent to 42.7 per-cent). Year to date, trucks are close to our predicted 56 percent share, with 55.3 percent of the market choosing light trucks over cars. This move helped push vehicle transaction prices up almost 3.0 percent compared to last year. But the weakness in cars has

led to increased incentives, which rose over 3.0 percent YTD, ac-cording to Autodata. Asian automakers, with weaker light-truck product lines, saw incentives rise more than North American auto-makers. Though we are concerned about the global slowdown and roiling equities markets, our forecast for 2015 remains unchanged at 17.2 million.

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nAdA Market BeatProduced by Steven Szakaly, NADA Chief Economist

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27nAdA Update By Don Sudbay

Part of this month’s column deals with the Volkswagen diesel issue. This is a very unfortunate set of circumstances that Volkswagen dealers are now facing through no fault of their own.

Volkswagen dealers should be assured that NADA is working tirelessly on their behalf during this crisis. It is vi-tally important that these dealers are compensated fairly in a way that will enable them to sustain their businesses.

Blumenthal Proposal Would Deflate Value of Customer Trade-Ins

By Bill Fox, NADA ChAirmAN

Imagine what would happen if dealers could only offer a fraction for their customer’s trade-ins, or could not even send the trade-in vehicle to auction. This could be a dark re-ality if the Sen. Richard Blumenthal (D-Connecticut) used car amendment, which would ground all recalled vehicles at dealerships until remedied, is passed.

When a food recall is issued, the product under recall is immediately removed from commerce and tossed from re-tail shelves. This is not the way it works for a recall involv-ing automobiles. When a particular vehicle is under open recall, that doesn’t necessarily mean it requires the drastic step of grounding the vehicle. While there are at least 46 million vehicles currently under open recall, the truth is many recalls don’t require the vehicle being taken out of service. Furthermore, recall notices are often issued even though there is nothing an owner or dealer can do to resolve the problem because of a lack of auto parts.

And some recalls are due to minor causes, such as a print-ing error in the owner’s manual.

The Blumenthal amendment to the highway bill (H.R. 22) currently being considered by the Senate proposes to ground all used vehicles sold at a dealership under open re-call. (Private sales would remain unregulated.) The amend-ment would effectively slash the trade-in value of some recalled vehicles while removing cars from the road need-lessly—and the reason could be for something as minor as a warning sticker that may peel off the sun visor. This amend-

ment would cripple the used car market, leaving consumers with diminished trade-in values or fewer options because cars would be grounded indefinitely until parts became available. This would be devastating for consumers, dealers and automakers.

Franchised auto dealers play a critical role in ensuring that recalled vehicles are repaired.

Proposals that ground all vehicles under open recall at a dealership miss the mark: They don’t differentiate between recalls involving a serious defect and those with a negligi-ble impact on safety. Time and time again, they prove to be overly broad measures that do not require the drastic step of grounding cars. A recent survey of 2,100 vehicle recalls re-vealed that 80 percent of them do not come with any recom-mendation from the manufacturer or the National Highway Traffic Safety Administration to stop operating the vehicle.

NADA is advocating for a better solution. A more viable approach would be to improve the recall process by differ-entiating between truly dangerous defects in which vehicles should be immediately taken off the road versus trivial is-sues where there is no harm to driver safety or the public good.

Policies should be tailored to boost consumer recall re-sponse and completion rates. The average vehicle recall completion rate is 75 percent. America’s dealers support a 100 percent completion rate and we urge NHTSA to im-prove the recall process by designing a database that han-dles multiple VIN requests as a single inquiry.

This amendment would diminish in an instant the trade-in value of millions of vehicles, while not guaranteeing one recalled vehicle gets fixed.

Volkswagen offers U.S. Dealers Financial Assistance

Volkswagen of America has rolled out a series of financial assistance programs to compensate its U.S. dealers amid the company’s diesel emissions scandal. According to a Sep-tember 21 memo to dealers from Volkswagen’s U.S. chief Michael Horn obtained by Automotive News, the company will guarantee bonus payments in September of $300 for each new car sold and $600 for each Passat. The company also will offer floorplan financing reimbursement for diesel vehicles on dealer lots that are grounded under the com-pany’s stop-sale order that was issued following revelations that the automaker had sold some 482,000 VW and Audi diesel vehicles with emissions control software designed to produce false emissions testing data. The reimbursement plan will cover both new and certified-used TDI models af-fected by the stop-sale until repair instructions are released,

Countering CongressDoN SuDBAy, PreSiDeNt oF SuDBAy Automotive GrouP, rePreSeNtS mSADA memBerS oN the NADA BoArD oF DireCtorS. he welComeS your queStioNS AND CoNCerNS ([email protected]).

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nAdA Updateaccording to the memo. Dealers also will receive guaranteed payouts under the VW brand’s customer experience bonus program equaling 1 percent of sticker for each vehicle sold in the third quarter and fourth quarter.

NADA Statement: “As to the diesel vehicles at issue, Volkswagen dealers care deeply about potential impacts on their customers and the environment. As soon as remedies are made available, the well-trained and equipped staffs of those dealerships will expeditiously work with Volkswagen to get those vehicles running right and keep customers satis-fied.”

NADA Hopeful Key Bill Will Pass A Congressional bill is making NADA feel less threat-

ened by a regulatory agency that has sought to change the way dealers are compensated for arranging customer auto loans. NADA had lobbied for the legislation that would put reins on the Consumer Financial Protection Bureau, a prod-uct of the Dodd-Frank financial reform act and an agency that has challenged a long-standing practice of dealers add-ing to an indirect auto loan’s percentage rate as compensa-tion for acting as a middleman.

The pending legislation that would affect the CFPB has bipartisan support and is expected to go to the House floor in early October, says Andrew Koblenz, NADA’s executive vice president of legal and regulatory affairs. He’s hopeful of its passage “but now is not the time to take the foot off the gas,” he said at this year’s F&I Industry Summit. “We still have a little ways to go.” The legislation would repeal a two-year-old CFPB bulletin NADA says was intended to pressure lending institutions to shift from the so-called deal-er reserve practice to something such as flat fees for dealers.

New Video: Dealer Financing Benefits Consumers

The stories of real consumers who saved money by fi-nancing new vehicle purchases through local dealerships are at the center of a new NADA initiative to showcase the true economic value of optional dealer-assisted financing,

and better inform opinion leaders, elected officials, and the media about the debate over the elimination of dealer re-serve.

Dealers have been fighting to preserve the fiercely com-

petitive, pro-consumer financing model ever since it came under threat from the Consumer Financial Protection Bu-reau (CFPB) in 2013.

“Consumers save money every day when they finance through dealerships,” said NADA President Peter Welch in announcing the new videos and webpage – www.nada.org/autofinance. “But that truth is getting lost in Washington, and that needs to change.”

CFPB overestimates Potential Discrimination, Documents Show

The Consumer Financial Protection Bureau’s method for detecting discrimination by indirect auto lenders can overestimate potential bias, resulting in higher payments for lenders cited by the agency, according to internal CFPB documents. In a series of private documents that were re-viewed by American Banker, CFPB officials repeatedly ac-knowledge its methodology could over count the potential discrimination by firms, but say they prefer that to the alter-native where bias is underestimated.

Industry representatives see the delay in refunds as proof that the CFPB overestimated the number of people Ally al-legedly discriminated against. Doing so would mean that there are fewer consumers that were actually harmed by Ally’s policies — and that the company paid more than it had to in order to fix the problem.

“In order to have an accurate measurement of potential consumer harm, you have to isolate out legitimate pricing factors that can cause a deviation in the results. There are business factors that the Justice Department has recognized as legitimate that the CFPB appears to be blatantly ignoring during investigations,” said Paul Metrey, chief regulatory counsel at the National Automobile Dealers Association.

New CAR Study: Contribution of New-Car Dealerships to the Economies of All 50 States

and the United States For every worker employed at new-car dealerships,

there are another 1.2 spin-off jobs in the U.S. economy, according to a newly-released study, from the Center for Automotive Research (CAR), an Ann Arbor-based research organization. The CAR study, “Contribution of New-Car Dealerships to the Economies of All 50 States and the Unit-ed States”, highlights the economic impact of U.S. new-car dealerships—from employment data, taxes collected or generated by dealerships to taxes paid by employees—at the state and national level. Among the key findings, new-car dealerships directly provided and supported more than 2.2 million private-sector jobs in the United States totaling $144 billion in employee compensation in 2014.

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“While we’ve had a slower than normal recovery from this recession, we are seeing the sixth consecutive year of new

light vehicle sales growth.”

–NADA Chief Economist Steven Szakal


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“Dealers have been fighting to preserve the fiercely competitive, pro-consumer financing model ever since it came under threat

from the CFPB in 2013.”

trUCK COrnerMSADA

By Eric K. Jorgensen

American Truck Dealers Move the Industry Forward

www.msada.org Massachusetts auto Dealer JUNE 2015

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