Dealership News - Michigan Automobile Dealers Association

Transcription

Michigan
www.michiganada.org
Dealership
Created to support the business needs of
Michigan Automobile Dealers Association members
News
Achieving higher dealership profits by knowing
and watching costs
By Jim Eagan, CPA, Partner, Plante & Moran Dealership Services
N
Not too long ago, you closed your 2005 books, printed your
year-end financial statement, and, if you are like most dealers,
you were disappointed with the year’s net profits. A frequent
phrase we are hearing from dealers is “I worked harder for less
money last year.”
It is no secret that most automobile dealers within the Great
Lakes Region are facing very turbulent and challenging economic
times. The headlines of newspapers contain little positive economic news and frequently display banners highlighting individual and corporate bankruptcies, layoffs, union concessions, retirees’ benefits in jeopardy, and rising gasoline/heating fuel costs.
When speaking with dealers, a predominant theme is that
the overall economic conditions in the car business are worse
now than in 1974 or the early 1980s. This is shocking as well as
threatening. Dealers are indicating that traffic and vehicle sales
are significantly down, and they frequently attribute the causes
to: financially tapped out customers, too much pull-ahead business, customers waiting on the sidelines for a better deal, lack
of manufacturer deals and marketing programs that work, and
declining confidence levels causing buyers to wait to see whether
they should even think about buying at this time, irrespective of
the deal.
As is typically the result when departmental volume levels decline, so goes the dealership cash flow, profitability, and owners’
return on investment. Increasing manufacturer transfers of costs
and rising interest rates further compound the negative trends.
It is during these times that dealers need to hold on to profits
as best they can and, for many, just survive until the market turns
around. It is very difficult, if not impossible, to individually sell
your way out of a down market. It is normally more prudent to
get your arms around feasible cost structure changes and adjust
such costs to levels which make sense for what you are selling
currently. This can be a painful process, but might be necessary
for survival.
Every department has a gross level and an appropriate costs
structure. The Big 3 expenses (see below) in relation to the
grosses generated in each department can make or break a dealer’s
month or year from a profitability and return-on-investment
standpoint.
The largest components of
dealership costs (the “Big 3”) are:
¶ Employment costs: by far the largest
expense category in any dealership (typically more than 60 percent and heavily
influenced by headcount, pay plans, and
fringe benefits)
· Floor plan interest: influenced by market interest rates, inventory levels, selling
rate, and the propensities of the dealership
for ordering the right inventory units with
minimal mistakes
¸ Advertising expenses: influenced largely
by personal preference, but subject to
heightening when faced with either inventory mistakes or “hot” manufacturer
incentive programs
Given your
volume of business, do you
have too many
employees?
The dealership
headcount can
be
analyzed
on a gross per
employee per
month basis.
A good rule of
thumb is that,
on
average,
each employee
should generate
at least $6,500
per
month.
To determine
your current average, take your December 2005 year-to-date
dealership gross per your financial statement, divide it by 12,
and then divide the result by the number of employees you have
today. For example, if the 2005 total gross was $4,000,000 and
the dealership currently has 70 employees, then average monthly
gross per employee would be $4,761. If your average is less than
$6,500, this may be indicative that the dealership has too many
employees. If you feel the $6,500 guide is too high for your circumstances, check with available manufacturer or 20 group composites and see how your average stacks up to a group average,
possibly more closely aligned to your franchise and market area.
How many excess employees might you have? To determine
how overstaffed the dealership may be, again take your December 2005 year-to-date dealership gross, divide it by 12 and, then
divide the result this time by $6,500. Compare the result to the
number of employees the dealership has now. Using the facts in
the example above, the potential overstaffing would be approximately 19 employees ($4,000,000 divided by 12 = $333,333
divided by $6,500 = 51.2; current employees of 70 minus 51 =
19).
Has the dealership experienced headcount creep? Headcount creep is the tendency for dealerships in periods of growing
gross levels to add employees at a faster rate than the increases in
gross. When a dealership experiences declines in departmental
gross, which is more commonly the case now, a failure to decrease
the headcount commensurate with the rate of gross decline is
frequently associated with decreased profits.
How do you minimize the burn from floorplan interest?
Floorplan interest expense is one of the largest components of
dealership costs and is increasing substantially in most dealerships, especially if you’re not turning your inventory rapidly.
Given the recent rise in prime interest rates, it can be very costly
for a dealer if inventory ordering mistakes are made. Obviously,
ordering the right inventory to match up with the typically unpredictable marketing strategies of the manufacturers is easier
said than done. To minimize the chances of floorplan interest
expense eroding your 2006 net profits unnecessarily, we offer the
following recommendations:
¬ The number of individuals authorized to order inventory
should be limited to responsible managers, and their pay
plans should have features to penalize them for mistakes.
Spring 2006
In this issue:
Achieving higher
dealership profits
page 1
Annual Meeting
2005: thank you
page 3
Explaining the
hybrid tax credit
page 4
Don’t overlook the
CAN-SPAN Act
page 4
Providing food to
customers
page 5
ATD award
page 5
Three hot topics for
three departments
page 6
Give students an
early start with
AYES
page 7
FAQs about
technician
certification
page 7
DADA education
programs
page 7
Applying FET on
highway tractors
page 8
NADA 20 Groups
page 8
Federal election law
guidelines
page 9
MADPAC
contributions page 9
NADA director’s
column
page 10
Time Magazine and
Northwood awards
page 10
If a truck shows up on your lot carrying an unordered unit,
don’t accept it.
® Determine the monthly floorplan interest expense for aged
units (over 60 days), and use this information to determine
any special pricing or in-store incentive and promotion programs to move these units. (Remember the floorplan assistance funds you received on these units are used up by now.)
¯ Collaborate with other like-franchised dealers to lobby your
manufacturer to raise floorplan assistance funding.
continued on page 3
Monday, June 5
Country Club of Lansing
Michigan Automobile Dealers Association
P.O. Box 2525
East Lansing, MI 48826-2525
PRSRT STD
U.S. Postage
PAID
Permit #407
Lansing, MI
��
��
�
��
��
�
��
��
�
Michigan Dealership News
�
� ��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
� � � � � � � ��
��
��
��
��
page 2
Thank you to all the dealers and guests who attended the 2005 Annual Meeting at the Townsend!
A
great line up of
speakers and presentations at the
2005 MADA Annual Meeting made for a wonderful and
informative year-end event.
We are happy to report that
feedback received from dealers that attended the day’s
activities was overwhelmingly
positive.
During lunch, the ballroom was full as Michigan
Governor Jennifer Granholm
and Peter Brown from Automotive News each spoke
about the outlook for the
automotive industry.
The special presentation
from Sean Gardner with the
Joe Verde Group challenged
dealers to review and improve
on their current sales training.
Tim Kool with Heritage
Chevrolet said of the presentation, “I certainly went back
to my store with a renewed focus on how we advertise and a
renewed commitment to training our sales team with even
greater intensity. I think every
dealer there was challenged
and motivated in some way by
Sean’s outstanding talk.”
Dealers and guests also
enjoyed the Annual Meeting
guest speaker, political correspondent Tim Skubick, who
brought a humorous outlook
to the upcoming political
elections.
MADA is grateful to have
so many supportive and committed dealers that attended
the 2005 Annual Meeting.
We hope that each of you in
attendance took something
positive home from the day’s
event and we look forward to
bringing you another valuable event this year. §
2005 Annual Meeting Sponsors
Diamond Sponsors
Gadaleto, Ramsby
Universal Underwriters
& Associates
Group
Platinum Sponsors
Automobile Dealers
Governmental Consultant
Accessory Corp.
Services, Inc.
MADSIF
Freedom One Financial
Protective
Silver Sponsors
abc West Michigan
Manheim’s Metro Detroit
Auto Auction
Dealers Resources, Inc.
National City
Enterprise Rent-A-Car
Willingham
& Coté
Loftus & Associates
2005 President’s Gift
Flint Auto Auction
Thank you for your support of MADA members!
continued from page 1: Achieving higher dealership profits by knowing and watching costs
° If you’re concerned about
rising interest rates for
the foreseeable future,
contact your friendly
banker about the feasibility of an interest rate
swap arrangement.
What can be done when a
relatively fixed cost increases
substantially? Another rapidly increasing cost appears
to be utility costs. Let’s consider this negative trend as
a representative example of
many other potential fixed or
semi-fixed expense variances
that could be eroding your
net profits. A dealer could legitimately ask him or herself,
“Aren’t utility costs a relatively
fixed cost? Can anything really be done?” Many dealers
throw their hands in the air
and give up. Wrong answer.
The correct answers are 1)
yes, utilities are a relatively
fixed cost, and 2) yes, something can be done about it.
First of all, we recommend
that you assign someone, if
you haven’t done so already,
to be the watchdog over unnecessary wastes of electricity
or heat due to carelessness.
You may want to consider
Michigan
providing a financial incentive
have a very good handle on
to this person if consumption
what these expenses amount
levels are minimized to certain
to on an annual basis, and
targets. Second, investigate
know which list they belong
whether your current utility
on.
providers are
For exreally the
Be vigilant in your
ample,
only game
efforts to protect your m a n y
in town. dealership’s net profits. m a n u f a c We’r e
turers
no
aware of deallonger reimburse a dealership
ers who are participating in
to deliver a new vehicle with a
consortiums who buy elecfull tank of gasoline. With the
tricity at lower prices than
rising gasoline costs incurred
they could on their own. Fiby dealerships, even at wholenally, if after all your best efsale prices, many dealers
forts, you conclude that a cost
have concluded to consider
area (utilities in this example)
a full tank of gas with each
is going to be escalated pernew delivery in the category
manently, don’t automatically
of a “Nice to Have” versus a
assume that it has to come
“Must Have.” However, asout of your bottom line. At
suming waste is minimized,
this point, we recommend
the utilities are certainly a
that a dealer refer to his or her
“Must Have.”
“Nice to Have” and “Must
If the utility net profit eroHave” lists.
sion is estimated to be $2,000
What are your “Nice to
per month or $24,000 for
Haves” and “Must Haves”?
2006, then the dealer has
We suggest that net profitto make a choice. You could
minded dealers carefully
take the hit and make less
analyze all dealership costs
money in 2006 (money that
and place the individual categories and their annual costs
on “Nice to Have” or “Must
Have” lists. Net profit-minded dealers know their costs,
you probably had to work
Mr. Eagan has more than
harder than ever to earn), or
25 years of experience at Plante
you could eliminate the bottom-line net profit erosion of
& Moran serving automobile
$24,000 by eliminating other
dealerships and their adver-
costs from the “Nice to Have”
tising associations. He is widely
list. Once you start categoriz-
recognized as a professional with
ing your cost elements, you’ll
be amazed at how many items
are really “Nice to Have” ver-
“deep knowledge” in matters related to dealership accounting,
auditing, fraud prevention and
sus “Must Have.”
Be vigilant in your efforts to
detection, procedural design,
protect your dealership’s net
operational consulting, acquisi-
profits. Use your ingenuity
tion consulting, succession plan-
and business sense to honestly
overcome hurdles in time to
ning and tax consulting. He is a
protect 2006 net profits. And
frequent speaker to audiences of
remember - paying out too
automobile dealers, manufac-
much today and tomorrow
turer personnel, CPAs, as well
will decrease your bottom
line, dollar for dollar.
If you are alarmed by your
first quarter earnings, or lack
as other parties interested in a
CPA’s perspective on relevant
financial, operational and tax
thereof, now may be the per-
automobile dealership industry
fect time to conduct a thor-
topics.
ough “cost structure physical”
on your dealership. Gener-
To contact him, call (800)
ally, such reviews can be done
544-0203, ext. 3257 or e-mail
within a matter of days. §
Jim.Eagan@Plantemoran.com.
You are invited
Dealership
News
Michigan Dealership News is an educational publication
for Michigan Automobile Dealers Association members.
Correspondence, editorial contributions and advertising:
Physical address:
Mailing address:
1500 Kendale Boulevard
P.O. Box 2525
East Lansing, MI 48823
East Lansing, MI 48826-2525
Telephone: (517) 351-7800 • Facsimile: (517) 351-3120
Web site: www.michiganada.org
Editor: Summer Kniss
©2006, Michigan Automobile Dealers Association. All rights reserved.
MADA Annual Meeting
December 6, 2006
Amway Grand Plaza Hotel
Please save the date.
page 3
Sales and marketing
Explaining the hybrid tax credit
I
ncluded in the “Energy Policy Act of
2005” are Federal tax credits for the
purchase of new hybrid vehicles. The
tax credit, which took effect on January
1, 2006, replaces the tax deduction
available for hybrid vehicles in previous
years.
Vehicle Make & Model
Under the new law, a complex formula is used to calculate the exact tax
credit amount for vehicles.
Credit Amount
Ford Motor Company
2006 Ford Escape Hybrid 2WD
$2,600*
2006 Ford Escape Hybrid 4WD
$1,950*
2006 Mercury Mariner Hybrid 4WD
$1,950*
Toyota
Individuals or businesses that purchase new hybrid vehicles will qualify
for Federal tax credits of up to $3,400
but the credit amount varies by model.
(See the chart at right.) The amount
of credit is based on fuel economy (fuel
economy of the vehicle compared to
a 2002 model year standard) and a
conservation credit (estimated lifetime
fuel savings of a qualifying vehicle compared to a comparable 2002 model year
vehicle).
2005-06 Prius
$3,150*
2006 Highlander 2WD Hybrid
$2,600*
2006 Highlander 4WD Hybrid
$2,600*
2006 Lexus RX400h 2WD
$2,200*
2006 Lexus RX400h 4WD
$2,200*
2006 Camry Hybrid
$2,600*
2007 Lexus GS 450h
$1,550*
2005 Civic Hybrid
$1,700†
To qualify for the tax credit, the
vehicle must be placed in service by
the taxpayer after December 31, 2005
2006 Civic Hybrid
$2,100†
an automaker reaches 60,000 hybrid and
lean-burn diesel sales, buyers of these vehicles can only get the full tax credit for
the remainder of that quarter and the
next quarter. The credit then phases
out, reducing to 50 percent in the first
two calendar quarters of the phaseout
period, 25 percent for the third and
fourth calendar quarters of the phaseout period, and zero percent thereafter.
Honda
2006 Insight (auto trans. only)
2005-06 Accord Hybrid
$1,450†
$650†
Sources: * IRS; † Manufacturer’s estimate, certification
awaiting recognition from IRS. Updated 24 Apr. 2006.
Toyota predicts it will sell 140,000
hybrid cars and light trucks in 2006, so
the phaseout period would likely begin
before the end of 2006. Honda predicts
it will sell 50,000 hybrids in 2006, allowing the full credit to last until mid2007. Ford predicts it will sell about
20,000 hybrids in 2006, and the rest of
the Big Three produce even fewer, giving the credit greater longevity.
Vehicles acquired for resale are not
eligible for the credit. For sales of vehicles used by tax-exempt entities, the
person who sells the vehicle is treated
continued on page 5
Don’t Overlook the CAN-SPAM Act
From the National Automobile Dealers Association
M
any
businesses
assume the CANSPAM Act only
applies to massive e-mail
marketing campaigns to
thousands of consumers.
The law actually imposes
much broader restrictions
that reach even the occasional
sender of commercial e-mail.
Here’s a brief recap of some of
the law’s basic features:
• It applies to any commercial e-mail, which is defined
as an e-mail whose primary
purpose is to advertise or promote a commercial product
or service (including content
on a web site operated for a
commercial purpose).
• It applies not just to mass
e-mail marketing campaigns
but also to a single commercial e-mail (there is no
de minimus rule). It also applies to commercial e-mails
to businesses as well as to
consumers.
• Its disclosure requirements do not apply to transactional e-mails, such as
messages confirming a commercial transaction that the
recipient has agreed to enter
into with the sender.
• The FTC has developed
several criteria for determining whether dual-purpose
messages are commercial and
thus subject to the disclosure
requirements outlined below.
• Commercial e-mails to
non-wireless devices must:
1) clearly and conspicuously
state that the message is
an advertisement or solicitation;
2) clearly and conspicuously
state that the recipient
has the right to opt-out
page 4
and must be purchased on or before
December 31, 2010. However, the credit
may end sooner for some vehicles. Once
of receiving further commercial e-mail messages
from the sender; and
3) provide a valid physical
postal address for the
sender’s business.
• The opt-out notice must
include a functioning return
e-mail address (or other
Internet-based mechanism)
that permits the recipient to
submit an opt-out request
for at least 30 days after the
sender transmits the original
message.
restrictive and require recipients to provide express
authorization (opt-in) before
the messages are sent. There
are several required disclosures that must accompany a
request for a recipient’s express
prior authorization.
• Senders have up to 10
business days to process an
opt-out request.
• The way to distinguish
wireless from non-wireless
e-mail addresses is to consult
a registry of wireless domain
names maintained by the
Federal
Communications
Commission. It is available
at www.fcc.gov/cgb/policy
(click on “Download Registered Domain Names”).
• Commercial e-mails to
wireless devices are more
• There is no established
business relationship exemp-
tion to any of these requirements.
• The law also prohibits
commercial e-mails from
containing false or misleading subject headings and
any e-mail from containing
false or misleading header or
“from” line information.
• Several more important
details are provided in a
comprehensive summary of
the CAN-SPAM Act that is
available at www.nada.org/
regulations. §
The foregoing is offered for
informational purposes only.
Dealers should contact their
legal professional for more detailed information.
Please welcome our new dealer members...
The Michigan Automobile Dealers Association exists solely to enhance the businesses of Michigan’s new
vehicle dealers. If there is ever anything that we can assist you with, or if you have comments, questions or
concerns, please contact the office at (800) 292-1923. We are here to serve your needs!

Mr. Lawrence Burnside
Burnside RV Centers LLC
in Belleville

Mr. George Gorno

Gorno Automotive Group Inc.
in Woodhaven

Mr. Jeffrey Cappo
Victory Nissan of Macomb

Mr. William J. Chichester
Bay Chrysler Jeep Dodge in
Benzonia
Mr. Fred C. Guthrie
Alma Pontiac Buick GMC
in Alma

Mr. S. Michael Cizmar

Consumer Suzuki in Brighton
Mr. Gregory Jackson
Mercedes-Benz of St. Clair
Shores

Mr. Daniel G. DeVos
Stanton Ford in Stanton &
Delta Imports LLC in Grand
Rapids

Mr. David Fernelius
Fernelius Hyundai LLC in
Sault Ste. Marie

Mr. David T. Fischer
Suburban Ford of Sterling
Heights LLC

Mr. John C. Fox
Fox Automotive Group Inc. in
Rochester

Mr. James J. Schebil
Fox Hills Chrysler Jeep Inc. in
Plymouth

Mr. Mick Schorle
Freightliner Grand Rapids

Mr. Thomas E. Kennedy
Sterling Nissan Sales in Sterling Heights
Mr. Richard L. Scott
Dick Scott KIA, Waterford
Inc., Dick Scott KIA, Canton,
Inc. & Dick Scott Nissan in
Canton

Mr. Robert L. Lorenzoni
Stateline Chevrolet Pontiac
Inc. in Crystal Falls
Mr. Joseph Serra
Serra Buick Pontiac GMC
Cadillac in Washington

Ms. Lissa Lund
Majestic Wholesale Outlet
Inc. in Bay City
Mr. Joseph Serra
Mr. Christopher Bard
RiverTown Honda in Grandville

Mr. Bruce Milnes
Milnes Ford Inc. in Lapeer
Mr. Richard A. Thompson
Thompson-Wasik Inc. in Ubly

Mr. Randy Wise
Randy Wise Chevrolet Buick
Pontiac Inc. in Milan
Mr. Thomas C. North
North Brothers
Lincoln Mercury
Inc. in Troy
Thankfor your
You
membership
cont’d from page 4: tax credit
as the taxpayer and able to
claim the credit if the amount
allowable as a credit is clearly
disclosed to the user in a
document.
Dealers should be aware
that some state and local
governments also provide
incentives for hybrid and alternative fuel vehicles. §
The foregoing is offered for
informational purposes only.
Dealers should contact their tax
professional for more detailed
information.
Providing food to customers...you may need a license
B
efore you make plans
to entice customers
this summer with a
hot dog or hamburger grilled
to perfection at your dealership, consider the following:
your local health department
may require that you obtain a
temporary food service license
if you will be preparing food
at your business.
If you think you may need
a temporary license, contact
your local community health
department to discuss your
event. If a temporary license
will be necessary, apply for
the license far in advance of
your event. This allows the
department to plan staffing
for the upcoming event and
provide the best service and
assistance to you.
The health department
will likely provide you with a
checklist of items you are required to have on site before
you will be allowed to operate. Look the list over carefully. If you have everything
Truck Dealer of the Year Award
Sponsored by Heavy Duty Trucking and the American Truck Dealers
M
ADA nominated
Gary Rutherford,
owner of Central
Truck Center in Lansing, for
the 2006 ATD/Heavy Duty
Trucking Truck Dealer of the
Year award.
Due in part to his hard
work and dedication, Mr.
Rutherford is an individual
that others in the business
look up to and respect for
his exemplary business and
personal ethics. For nearly 20
years, he has proven himself as
the owner of successful heavy
duty truck dealerships.
Mr. Rutherford began his
dealership career as a salesman
and worked hard to establish
himself and demonstrate
that he had the skills and the
knowledge to take on more
responsibilities. He quickly
advanced to management
positions and, in
1988, he bought
his first dealership.
makes sure that his employees
understand that success is
measured by more than the
bottom line.
Mr.
Rutherford
also knows that it is
important to be inThroughout
volved with the comthe years, he has
munity. He and his
learned what makes
dealership have taken
a profitable busipart in many charity
ness and underprograms and Mr.
Gary Rutherford
stands that happy
Rutherford enjoys
and well-balanced Central Truck Center providing support as
employees are an
a board member for
important part of that sucvarious automotive educacess. Mr. Rutherford protional programs. He has also
vides the training and support
successfully organized volunto ensure that his employees
teer motorcycle police units
have opportunities to excel
to assist local municipalities
within his dealership. But
and better serve the public’s
he also leads by example and
interests. §
on site when they arrive, it
will save you time and extra
trips. The most commonly
forgotten items are thermometers, water and hand soap,
chlorine bleach and backup
utensils.
When providing food, keep
in mind that all foods must
be from approved sources
(commercially prepared or
from a licensed kitchen). If
any of the food is prepared
in advance, it must be done
in a licensed kitchen. Food
prepared at home cannot be
served from a licensed stand.
For more information, visit
the Michigan Department
of Agriculture’s web site at
w w w.michiga n.gov/mda.
From the menu at left, choose
Food & Agribusiness, then
choose How to Start a Business. The option entitled
How to apply for a food service
license (under Food Businesses) offers the information
you need to get started.
You may also contact your
local community health department with questions. §
Franchised Dealer Calendar
June 5 MADA board meeting & MADPAC golf outing
County Club of Lansing
Visit www.michiganada.org for more information
about the golf outing.
October 6 MADA board meeting
Northwood University, Midland
October 6 - 8 Northwood University International Auto Show
www.northwood.edu/autoshow
December 6 MADA board meeting & annual meeting
Amway Grand Plaza Hotel, Grand Rapids
Holidays observed by the
Michigan Secretary of State
July 4 - Independence Day
September 4 - Labor Day
November 7 - Election Day
November 10 - Veteran’s Day
For more information on these and other events, please visit the “events”
page of MADA’s web site at www.michiganada.org.
page 5
Service department
Three “hot” topics for three departments
From Universal Underwriters Group’s Loss Prevention Library
W
hat exactly do
we mean by
three “hot” topics? From the standpoint
of Universal Underwriters
Group, these “topics” refer
to areas of concern for your
business - things that have
resulted in substantial losses
for some of our customers;
ones that OSHA has targeted
in their inspection and compliance efforts; or those with
the potential to cause catastrophic claims.
Some of these topics are
pulled directly from the top
ten list of OSHA violations
(Oct. 2003 to Oct. 2004)
for automotive repair facili-
ties. Others are pulled from
our claim files and extensive
experience in the industry.
Departments are listed below
with the “Top Three” identified and then suggested loss
prevention strategies to address them.
If you have any questions
or comments, contact your
Universal
Underwriters
Account Executive or the
Loss Prevention Department
at (800) 821-7803. §
This information is provided
for informational purposes only.
Please consult with qualified
legal counsel to address your
particular circumstances and
needs.
Service Department
Parts Department
¬ Wheel off. A completed operations exposure with the
potential to cause catastrophic losses. A wheel(s) from a customer vehicle falls off after being serviced at your facility.
¬ Driver hiring, training & monitoring. Parts drivers create a daily accident exposure - this includes property damage and liability from injuring third-parties. Did you know
that vehicle accidents are the leading cause of occupational
fatalities?
• Inspect the studs, wheel and the tire for bead, sidewall or
tread damage.
• Implement a formal policy to torque wheels/lug nuts to
manufacturers’ specifications.
• Use a calibrated torque wrench to tighten lug nuts.
• “Double check” or quality control each job.
• If you need help, the Tire Industry Association (TIA)
has excellent training programs - visit their web site at
www.tireindustry.org.
Hazard Communication Standard. This is number two
on the OSHA list of most frequently cited standards, also
known as the “Right to Know” standard.
• Establish a written Hazard Communication Program
including procedures for labeling containers.
• Provide employee training on the program.
• Ensure material Safety Data Sheets (MSDS) are on hand
and available.
• Make sure your employees have been made aware of the
hazards.
® Slips and falls. An exposure that can affect both your employees and customers. Slippery floors can result from fluid
spills, poor (floor surface) design and many other elements.
• Implement an aggressive housekeeping program.
• Keep mops, buckets and “Caution - Wet Floor” signs
readily available.
• Use floor care products that are advertised as slip-resistant.
• Position rugs or mats at entrances to building during
inclement weather.
• Implement a formal driver safety program.
• Hold brief but frequent driver safety meetings.
• Require ALL moving violations to be reported (personal
or company vehicles).
Lifting, strain, sprain and overexertion injuries. One of
the most frequent types of injuries in the Parts Department.
These injuries often result in high-dollar claims and extended time away from work.
• Employ strict hiring procedures including pre-employment drugs screens.
• Provide all necessary mechanical lifting aids - forklifts,
pallet jacks, conveyors, etc.
• CAUTION: OSHA requires employees to be properly
trained prior to operating a forklift.
• Train employees on safe lifting techniques.
• Implement a Transition to Work program (also known
as “Return to Work”).
® Fall protection. Ranked as number three on OSHA’s list
of most frequently cited standards. Fall protection regulations can apply to parts storage areas and order-picking
equipment in addition to alignment or quick-lube pits in the
service dept.
• Install handrails, mid-rails, and toe boards in mezzanine
areas.
• Order-pickers that elevate employees in order to reach
high storage areas must be equipped with fall protection
that includes a fall arrest or “positioning system.”
• Full body harnesses are required for fall arrest systems;
belts cannot be used for any vertical free fall protection.
Body Shop
¬ Respiratory protection. Spray painting inside a booth
without adequate respiratory protection can lead to longterm health problems for employees. It is also number five on
OSHA’s list of frequently cited and fined standards.
• Develop a formal, written Respiratory Protection Program
- samples can be obtained from your insurance carrier (see
our Loss Prevention Guidebook) or from the vendor who
supplies your paint and other equipment.
• The formal program must include these elements: selection process; medical evaluations; fit testing; procedures
for use; procedures and schedules for cleaning, disinfecting, storing, inspecting, repairing and discarding; and
procedures to ensure air quality, quantity and flow.
• Train employees on respiratory hazards; limitations; maintenance; and on established procedures for evaluating the
effectiveness of the program.
• Consider installing an air-supplied system inside your
spray booth; these systems are considered to be state-of-the
art and provide the highest level of protection for employees.
Eye protection. Eye injuries are generally minor in nature;
however, frequency can be a big problem. Productivity can be
cut substantially by employees who have to go to a first aid
clinic to have debris removed from their eyes.
• OSHA requires the employer to assess the workplace to
page 6
determine if hazards are present, or are likely to be present,
which necessitate the use of personal protective equipment
(PPE).
• Provide safety glasses and enforce their use, i.e. air chisels,
grinders, buffing, etc.
• Employees should wear full face shields when using parts
washers.
® Fire prevention & protection. Fires have the potential to kill
and injure employees, not to mention put you out of business.
Where do your customers go while you rebuild? Market share
and customers lost to the competition are tough to recoup or
win back.
• Ensure your booth is protected by an automatic fire extinguishing system.
• Remove paint and thinner-soaked rags and refuse from the
building every night.
• Establish strict “No Smoking” rules inside the paint and
body repair shops.
• Disconnect batteries on all vehicles stored inside the building to reduce the possibility of an electrical “short” starting
a fire.
• Obtain and use gas caddies/buggies for gasoline handling.
Give students an early start
O
n January 12,
2006, 11 students
from Delta College
graduated from the GM Automotive Service Educational
Program (ASEP). Among
those was Bret A. Crandell,
a student who has spent the
past four years interning at
Vic Canever Chevrolet in
Fenton.
His first two years of training at the dealership were
during high school while participating in the Automotive
Youth Educational Systems
(AYES) program.
Upon
graduating from high school,
he attended Delta College
and continued his instruction
at Vic Canever Chevrolet
while pursuing an associates
Automotive Youth Educational Systems
degree in the GM ASEP.
While at the dealership,
Bret received instruction and
guidance from Service Manager Stu Grove.
GM ASEP offers training for technically inclined
students who wish to pursue
a career in servicing and
maintaining GM vehicles.
The program is a joint effort
between GM,
GM dealers
and selected
colleges
from
across the United
States and Canada.
The three Michigan schools
that offer the program are
Ferris State University, Macomb Community College
and Delta College.
Of the 11 graduates, Bret
Crandell received the highest honors, he was the only
student to pass and/or retain
all eight ASE certifications,
and he was awarded with the
General Motors Service Parts
Operations Award. He was
also the only student who
received an early start with
his service technician training through
the AYES high
school
program.
The MADA
congratulates
Bret Crandell on his outstanding accomplishments
and wishes him luck for the
future. §
FAQs about technician certification
Reprinted with permission from the State of Michigan, Bureau of Regulatory Service’s Fall
2005 issue of Auto Repair News
Q
uestion: If I am certified by Automotive Service Excellence (ASE), do I need to be certified
by the state of Michigan, too?
Answer:
Yes. You must be certified by the state of Michigan to perform major repairs on
motor vehicles in Michigan. If you have passed tests administered by ASE, you will qualify
for Michigan certification in the comparable category without taking the state test. To obtain
Michigan certification, you must submit an application for certification along with proof of
ASE certification. Additional categories will be added to your state certificate by submitting
proof you have passed ASE tests. There is no cost to add additional categories to a current
certificate.
Q
uestion:
I have passed all seven of the ASE School Bus tests. Does the state of Michigan
have comparable certification categories?
Answer:
No. There are a total of 19 certification specialty categories in Michigan. If you
wish to qualify for Michigan certification by proving competency through ASE, be sure the
ASE test you take is comparable to the Michigan specialty category you are seeking.
Q
uestion: Are there any tests available for people who may not read or speak English or with
Dealer Candidate Academy Graduates:
The following individuals have recently graduated from NADA’s
intensive 12-month apprenticeship programs. The programs are
designed to prepare students for dealership management positions.
Mr. Eric Bailey, Wieland Sales Inc.
Mr. Gary Minneman Jr., Sunshine Toyota Inc.
Ms. Linda Trimarco, Trimarco Pontiac Buick GMC Inc.
Mr. Steven Witcher, Merollis Chevrolet Sales & Service Inc.
Congratulations
on your accomplishments
New associate members:
Welcome to MADA
The following associate member has recently joined MADA. If your
dealership would like to learn more about programs and services available through this member or other MADA associate members, please
contact programs director, Larry Parker, at (800) 292-1923.
5 International Bancard Corporation 5
Mr. David Iafrate, (800) 827-4880
909 N. Main Street, Royal Oak, MI 48067
Providing electronic payment solutions. IBC puts you in contact
with a real person, 24 hours a day, 365 days a year. Company
representatives help select the best payment solution to fit individual
needs and guarantee to beat any competitor’s rate.
DADA 2006 Education Programs
Detroit Auto Dealers Association educational programs
are offered to all Michigan new-vehicle dealers. If you are
interested in attending, please call (248) 283-5155 or
e-mail mevangelista@dada.org.
June 8 • 9 a.m. - 12 p.m. • $79 per person
Internet Sales: What’s Your Best Medicine?
Paul MacDonald, TriMac Automotive Advisory Group.
special needs?
Word Level 2, CompUSA.
Answer:
NADA Legal Update, Paul Metrey, NADA.
Yes. Certification tests are available on cassette tape for those who experience
difficulty reading English. Interpreters are permitted to assist people who have difficulty
speaking English. Contact the Licensing Unit at (517) 636-6400 for information on how to
apply for a special needs test.
Q
uestion: Where can I take mechanic tests to become state certified?
Answer: You may take them at selected Secretary of State branch offices. Branch offices that
administer tests may be found on the Department of State’s Web site at www.Michigan.gov/sos
under “Branch Office Locator and Office Hours.”
Q
uestion:
I failed to meet recertification requirements. Can I continue working in the
category if a certified mechanic oversees my repairs?
Answer:
No. However, you may apply for a mechanic trainee permit and work under
the supervision of a certified mechanic if you have not had a trainee permit in the specialty
category in the previous three years. You are encouraged, however, to do more studying and
get more training before taking the test again.
Q
uestion:
I am aware Michigan requires me to be certified to perform air conditioning
repairs on a motor vehicle. Are there any federal certification requirements?
Answer:
Yes. Amendments to Section 609 of the Federal Clean Air Act require auto
mechanics, since Jan. 1, 1993, to be trained and certified on how to properly recover and
recycle refrigerant. Call the Freon Hotline at (800) 296-1996 for more information.
Q
uestion: I am a body shop estimator and do not repair vehicles. Do I need to be certified?
Answer:
If you diagnose needed repairs that affect the structural integrity of a unitized
body vehicle and/or the replacement of mechanical components damaged in a collision,
you need to be certified. If you greet customers, initiate paper work, and do not perform a
diagnosis, certification is not required.
July 11 • 9 a.m. - 4 p.m. • $79 per person
Word Level 3, CompUSA.
Wage and Hour Law for Dealerships,
Jim Hendricks, Fisher & Phillips LLP.
Successful Service Sales Management, Lee Harkins, ATcon.
August 8 • 9 a.m. - 4 p.m. • $99 per person
Discovering Your Body Shop’s Potential,
Larry Edwards, Edwards & Associates Consulting, Inc.
MS Outlook, Outlook Express and the Internet, CompUSA.
The Top Ten Employment-Related Mistakes that
Dealerships Make (and May Not Recognize),
Jim Hendricks, Fisher & Phillips LLP.
September 12 • 9 a.m. - 12 p.m. or 1 p.m. - 4 p.m. • $69 per person
Teaching Your Salespeople to Handle Incoming Calls,
Jon Quade, AutoMotivators, Inc.
October 17 • 9 a.m. - 12 p.m. or 1 p.m. - 4 p.m. • $69 per person
Telephone Skills for the Automotive Receptionist,
Linda Hall, LLH Enterprises.
October 18 • 9 a.m. - 12 p.m. • $79 per person
Four Fearless Ways to Reduce Your Technology Expenses,
Sandi Jerome, Sandi Jerome Computer Consulting.
page 7
Dealership operations
Applying FET on highway tractors
From the ATAE Newsletter, November 2005
N
ADA Management
Education,
in
cooperation with
the association’s legal staff,
has produced a publication
for both ATD members of
NADA and car dealer members who sell trucks.
Federal Excise Tax May Apply to You! points out that the
IRS assessed the 12 percent
federal excise tax on the first
retail sale of highway tractors
on vehicles as small as Class 5
and even Class 4 based on its
determination that the vehicles’ towing capability made
them “primarily designed”
to tow.
The absence of a minimum
weight threshold for applying
the “primary design” test exposed relatively light vehicles
with towing capability to
the tractor tax, thus creating
audit exposure for dealers.
NADA responded by seeking and securing an amendment to the Internal Revenue
Code that creates a minimum
the tax. The following explains the new amendment.
As previously announced,
a broad industry coalition led
by the American Truck Dealers (ATD) division of the
National Automobile Dealers Association has secured
enactment of an amendment
to the Internal Revenue Code
that excludes vehicles under
a certain weight threshold
from the 12 percent federal
excise tax (FET) on the first
retail sale of highway tractors.
This new legislative “safe harbor” is part of the Highway
Transportation Bill that the
President signed into law on
August 10, 2005. The following Q&As briefly explain its
key features.
Q
What problem is
the safe harbor intended to fix?
The Internal Revenue
Code imposes a 12 percent
FET on the first retail sale of:
1) truck chassis and bodies
with a Gross Vehicle Weight
(GVW) in excess of 33,000
lbs., 2) truck trailer and semitrailer chassis and bodies with
a GVW in excess of 26,000
lbs., and 3) tractors of the
kind chiefly used for highway
transportation in combination with a trailer or semitrailer. Unlike the first and
second categories, the third
category (highway tractors)
did not contain a minimum
the tax. In recent years, this
became a problem when IRS
auditors classified numerous relatively small vehicles
with towing devices as taxable tractors. This prompted
ATD to issue a Dealer Alert
in June 2004 entitled Federal
Excise Tax May Apply to You
(TLR.27) that asked the
question: “Are you unknowingly selling vehicles subject
to the FET on Highway Tractors?” The Alert explained
dealers’ audit exposure and
called for legislative action to
exempt certain vehicles from
the tractor tax.
Q
What vehicles does
the safe harbor exclude from the FET on
highway tractors?
Congress responded by
amending the Code to exclude from the retail FET
highway tractors that: 1) are
Class 5 (19,500 lbs. GVW)
and below, and 2) have a
gross combined weight with a
trailer or semitrailer (known
as gross combination weight
(GCW)) that does not exceed
33,000 lbs. Vehicles falling
below both of these weight
thresholds are excluded from
the retail FET regardless of
their design or purpose.
Q
When does the
amendment
take
effect?
highest of these ratings to be
the vehicle’s GVWR for FET
purposes.
The safe harbor is effective for the first retail sale of
vehicles occurring after September 30, 2005.
Gross Combination Weight:
Treasury Regulations do not
yet address how the GCW of
a vehicle is to be determined.
However, its approach to
GVW determinations suggests that dealers can rely
on the manufacturer’s gross
combination weight rating
(GCWR), provided it is reasonable and the dealer has not
performed operations that
change the vehicle’s GCWR.
ATD will monitor and disseminate any subsequent
GCW interpretation issued
by Treasury.
As with the GVWR, dealers need to retain a record
of the GCWR of vehicles
exempt from the highway
tractor tax. Presently, some
manufacturers specify their
vehicles’ GCWR on a label
affixed to the vehicle, while
others provide it in sales
catalogs, brochures or other
related literature. To ensure
dealers have a record of the
manufacturer’s weight ratings
after the first retail sale has
occurred, ATD has requested
that each truck manufacturer furnish its dealers with
“documentation that clearly
identifies the GVWR and
GCWR of vehicles it provides
its dealers….”
Q
How do we determine the GVW and
GCW of the vehicles we
sell?
For purposes of the retail
FET, the Code authorizes the
Department of the Treasury
to determine the GVW of
highway trucks and trailers.
With the enactment of the
safe harbor, the Code now
also gives Treasury authority
to determine the GVW and
GCW of highway tractors.
Gross Vehicle Weight:
Treasury Regulations state
that the GVW of an item is
determined by the “gross vehicle weight rating [GVWR]
of the article as specified by
the manufacturer or established by the seller of the
completed article, unless the
[IRS] Commissioner finds
that such rating is unreasonable in light of the facts and
circumstances of a particular
case.” Dealers generally may
rely on the GVWR specified
by the manufacturer. However, if the dealer performs
additional manufacture or
other operations that change
the vehicle’s GVWR, the
dealer must establish a new
GVWR. Whether dealers
perform such operations
or not, they need to retain
a record of the GVWR of
FET-exempt vehicles. To the
extent that different GVWRs
have been specified for the
same vehicle (as indicated on
a label or other identifier affixed to the vehicle, the sales
invoice, the warranty agreement or any advertisement),
the IRS will consider the
Q
How do we know
if vehicles above
the safe harbor weight
thresholds are subject to
the tractor tax?
The safe harbor does not
alter or address current FET
law that applies to (i) Class 7
vehicles, (ii) Class 6 vehicles,
and (iii) Class 5 and below
vehicles whose GCW exceeds
33,000 lbs. For these vehicles,
nothing has changed; the
continued on page 9
NADA 20 Groups...for dealers who mean business!
C
ould you use some
assistance improving
your bottom line?
If so, then participation in a
NADA 20 Group could be
just what you need. A 20
Group is a carefully selected
group of non-competing
dealers who, with the assistance of a professional
consultant, help each other
to improve business practices,
planning and performance.
20 Group meetings offer
you the opportunity to meet
with dealerships of your size
and franchise to analyze each
other’s operations and share
best practice ideas. A NADA
page 8
Consultant is also included in
the meetings to help facilitate
conversations between yourself and other dealers.
The NADA 20 Group program currently has more than
170 different groups, representing dealers of all sizes
and most franchises. NADA
will work with you to identify
the group that fits your needs
and wants, based on your
franchise, volume, location,
and travel preferences (some
groups have a more conservative travel policy than other
groups).
All 20 Group members receive a monthly comparison
and analysis of your financial
statement, a yearly collection
of the best ideas from each 20
Group meeting, and an operating and expense profiles
book that provides expense
guidelines by franchise.
Groups meet a minimum of 3
times per year and the meeting are 12 hours in length.
excluding travel (i.e. hotel,
If it sounds interesting, but
you’re not quite sure if it’s for
you, test it out. NADA offers
a ‘free demo’ to your first 20
Group meeting by paying
all meeting related expenses,
the NADA 20 Group Web site
airfare and meals). At your
first meeting, you will have
the opportunity to experience a 20 Group meeting,
with no obligation to join!
Your dealership will even be
included in NADA’s financial
composite.
For more information, visit
at www.nada20group.org, call
(800) 248-6232, ext. 5889,
or (703) 448-5889, or e-mail
nada20group@nada.org.
continued from page 8: Applying FET of highway tractors
IRS will continue to apply
the Treasury Department’s
primary design test to distinguish taxable tractors from
trucks (which are only taxable if their GVW exceeds
33,000 lbs.). For example,
if the IRS determines that
a Class 6 highway vehicle
is “primarily designed to
transport its load on the same
chassis as the engine” and
therefore is a truck, it would
not classify the first retail sale
of the vehicle as taxable since
Class 7 and below trucks are
excluded from the tax. Contrarily, if the IRS determines
that a Class 6 highway vehicle
is “primarily designed to tow
a vehicle” and therefore is a
tractor, it would classify the
first retail sale of the vehicle
as taxable since the Treasury
Regulations state that highway tractors (above the safe
harbor weight thresholds) are
subject to the tax.
Q
Where can we get
additional information on the tractor tax?
General information is
available from ATD at (800)
352-6232. For specific legal
or accounting advice, contact
your tax practitioner. §
The foregoing summary is offered for informational purposes
only and not intended as legal
advice. Dealers should consult
an attorney familiar with FET
law to obtain legal advice on
FET requirements that apply
to the vehicles they sell.
Fully annotated versions of
this article are available as
PDF files online. A version for
light-vehicle dealers (L47) is
available at www.nada.org/
regulations. The ATD version, TLR28, is available at
www.atd.org.
Federal election law guidelines
Q
uestions have recently risen regarding federal election
law and how PAC solicitations
are governed under that law.
In cooperation with DEAC,
the Dealers Election Action
Committee, the following
information is provided for
your review.
Pursuant to federal election law, a trade association
must make a written request
to any member corporation
for permission to solicit that
member’s restricted class
(i.e. dealers and dealership
management
personnel).
This request for approval
must inform the member
corporation that:
3 Corporate approval is
necessary before the trade
association or its PAC may
conduct a solicitation; and
3 The corporation may not
approve solicitations by another trade association for
the same calendar year.
3 The corporate member
must designate the calendar
year for which the solicitations are authorized.
3 There is no limit on the
number of companies from
which a trade association
can obtain solicitation approvals; however
3 In a particular calendar
year, a corporation may
authorize only one trade
association to solicit its restricted class.
NADA is requesting that
each member dealer sign a
current year Federal Compliance Form for its political
action committee, DEAC.
Signing the form does not
obligate you or anyone else
at your dealership to make a
future donation, but simply
enables DEAC to add your
dealership to their mailing
list.
To obtain a copy of the
form, or if you have any questions, please call DEAC tollfree at (877) 501-3322.
Thank you for your
commitment!
MADA would like to thank the many dealers who serve
on our executive committee and board of directors.
Your volunteer efforts, dedication and willingness to serve
benefit all of Michigan’s new-vehicle dealers.
Dealers who have accepted new positions on the
executive committee:
n Joe Falzon, Signature Ford Lincoln Mercury Jeep
(President)
n Bill Demmer, Jack Demmer Ford, Inc.
(First vice president)
n Ralph Shaheen, Shaheen Chevrolet, Inc.
(Second vice president/treasurer)
Dealers who have joined the executive committee:
n Tim Kool, Heritage Chevrolet in Battle Creek
(Third vice president)
n Edward Siemans, Siemans Ford in Bridgman
(Group II chair)
Dealers who have joined the board of directors:
n Colleen Arbor-Chapleski, Dean Arbour Ford
Mercury of Tawas in Tawas City (District 21:
Arenac, Gladwin, Ogemaw and Iosco counties)
n Clifford Cicotte, Spirit Ford, Inc. in Dundee
(District 34: Monroe county)
n Kurt W. Heidebreicht, Heidebreicht
Chevrolet Oldsmobile, Inc. in Romeo
(Chevrolet line group)
n Mark Snethkamp, Snethkamp Automotive
Family in Highland Park (Dodge line group)
Without the volunteer efforts of these dealers, MADA
could not accomplish its goals. If you are a dealership
owner/principal who would like to become more involved
in the association, please call MADA’s Marla Martin at
(800) 292-1923, ext. 3022. §
A MADPAC contribution is an investment in your dealership
By Kurt Berryman, Legislative Director of the Auto Dealers of Michigan, LLC
E
very day, elected officials in Lansing make
important decisions
regarding your business.
More than 1,000 pieces of
legislation are introduced
during each session – legislation that changes the way you
are required to do business on
a daily basis. You may be surprised to know exactly how
much of the legislation that
is introduced directly impacts
dealerships like yours.
By contributing to MADPAC, you are personally ensuring that the dealers’ voice
is heard in our legislative
process. You are helping
to protect the future of the
automotive retail industry
in Michigan. A strong PAC
that is supported by all of
Michigan’s new-vehicle dealers translates into a powerful
voice for dealers at the State
Capitol - a critical voice for
dealers during these changing
times.
Educating legislators can be
a challenge due to term limits, which create a perpetual
game of musical chairs. Contributions to MADPAC allow
us to educate these legislators
and key officials not only on
issues directly impacting the
dealer body, but also on the
important role dealers play in
the state and local economy,
and the contributions you
make every day to your community.
MADPAC works with the
Auto Dealers of Michigan,
LLC to contribute your hard
earned PAC dollars to candidates and legislators who support your business. Recent
successes by the ADM at the
Capitol include:
• Taxation: We are fighting
off attacks on Single Business Tax (SBT) deductions
and exemptions important
to dealers. Last year, and
continuing in 2006, the
Governor and some legislators have sought to eliminate the Floor Plan Interest Deduction on the SBT.
They have also sought to
eliminate the use of Employee Lease Companies
for SBT tax advantages.
The ADM has been able
to thwart attacks on SBT
tax provisions important
to dealers.
• Needless
Regulations:
ADM has successfully
stalled or killed needless
legislation regulating your
dealership. Two examples
include:
› A proposal that would
have required dealers
to obtain a customer’s
VIN number, photo
ID, and signed request
before replacing a key.
› A $50,000 punishment
if a customer is not notified that a vehicle is
returned to the manufacturer for repairs.
• Protecting Your Investment:
ADM successfully shepherded through
legislation that requires
basic standards to be
met before a person can
become a licensed new or
used automobile dealer
in Michigan. Minimum
standards ensure that the
industry is protected and
“a few bad apples” do not
give Michigan’s dealers a
bad name. ADM continues to fight off attacks
on this law, which was
successfully passed in
late 2004 and took
effect in 2005.
• Ne gat ive
Equity:
Neg at ive
e qu it y
financing deals
have long been the practice among dealers and
financing
institutions.
However, protection for
dealers during financial
transactions had never
formally been addressed
in Michigan law. ADM
successfully worked with
the Michigan Office of
Financial and Insurance
Services, the banking
industry and the legislature to get the practice
of financing negative equity placed into law. This
important change will
protect dealers from legal
challenges to the practice.
• Car Buyers Bill of Rights:
This piece of legislation,
which would put many
burdens on vehicle dealers, has recently surfaced.
You can be certain that we
will be closely following
this issue and fighting for
your dealership.
The ADM,
working with
the MADA,
DADA and
their political
action committees,
MADPAC and DADPAC,
respectively, has been able to
track, oppose, support and
pursue legislation impacting
Michigan’s new vehicle dealers – and we have had many
notable successes. With new
issues arriving at the Capitol
every day, your investment in
your business though MADPAC will continue to guarantee dealers have a strong voice
and presence. §
To learn more about the
Auto Dealers of Michigan,
and find out how you can help
support the legislative goals of
Michigan’s new-vehicle dealers,
call the Michigan Automobile
Dealers Association (MADPAC) at (800) 292-1923 or the
Detroit Auto Dealers Association (DADPAC) at (248)
643-0250.
page 9
News and notes
An update from your NADA Director, Hank Graff
Dealers make a difference
D
ealerships are a vital part of the U.S.
economy. We provide some 1 million jobs and
sell $700 billion in vehicles
and services each year - more
than 20 percent of U.S. retail
sales. Because dealers are such
a huge business force, we
have big responsibilities - to
our customers, to our communities, and to our fellow
dealers.
Dealers are working with
NADA right now to protect
consumers and other dealers
from buying flood-damaged vehicles. David Regan,
NADA vice president of
legislative affairs, recently
testified on this issue before
a U.S. House of Representatives subcommittee. He
called on insurance companies and state titling agencies
to provide consumers access
to VIN-based data before
they buy used cars.
Regan said that Congress
already has granted the
Department of Justice the
authority to make insurance
companies disclose total-loss
data and salvage auction data,
and Congress should press
the agency to act because “an
accurate and publicly accessible total-loss database would
curb fraudulent activity dramatically.” In his remarks,
Regan called for:
Greater transparency: “Insurance companies should
provide VIN-based disclosure
of all totaled vehicles,” he
said. Also, “all states should
carry forward prior brands
when issuing new titles.
States should brand registrations as well as titles.”
More timeliness: The insurance companies should
disclose total-loss data at the
time the total-loss payout
occurs,” he said. “Also, state
DMVs should work with the
private sector to push title
data into the public domain
faster.”
Better use of technology:
“DMVs should make title
data commercially available
on a daily basis to the information industry, [which] has
the technology to dramatically enhance public disclo-
sure of insurance company
information about total-loss
vehicles and salvage auction
sales data.”
Regan said the combination of electronic access to
total-loss data and faster access to DMV data will help
consumers and dealers fight
motor vehicle fraud.
How else can dealers make
a difference? There are more
than 104,800 career opportunities available at dealerships
across the country right now.
It’s imperative that we promote these job openings in
our communities. One way
to do this is to host an open
house for local students and
their parents and teachers
during Automotive Career
Month this October.
NADA is working to help
dealers by pushing for permanent repeal of the federal
estate tax. A planned congressional vote on the issue was
postponed after Hurricane
Katrina, but NADA’s legislative office is working hard
to get it back on the agenda.
NADA Director
Max H. “Hank” Graff, Jr.
Hank Graff Chevrolet, Davison
Senate Majority Leader Bill
Frist (R-Tenn.) said he will
call for a vote before Memorial Day on permanent repeal.
For the benefit of all
dealers, stay involved with
NADA. Complete the NADA
Dealer Attitude Survey every
summer and winter. It’s one
of the best ways to ensure
automakers hear our voices.
NADA also meets regularly
with every automaker to discuss dealer concerns. As the
domestic makers restructure
and some international manufacturers struggle, it’s essential that automakers realize
how important all dealers are
to the industry’s success.
Michigan dealers achieve
The board and staff of the Michigan Automobile Dealers
Association would like to recognize those dealers that go above
and beyond the standard to benefit their community, improve
dealership operations and increase the value of our association
to other members. Thank you for all of your contributions to
our industry.
TIME Magazine Quality Dealer Award
Northwood Dealer Education Award
2006 MADA nominee
2006 DADA nominee
2005 MADA recipient
2005 DADA recipient
Edward A. Siemans
President, Siemans Ford
William G. Cook
Owner, Bill Cook
Imported Cars
Leo C. Jerome
Chairman, Story
Automotive Group
Robert L. Thibodeau Jr.
President, Bob Thibodeau Ford
Mr. Siemans began his career at a dealership in Harvey,
Illinois as an auto mechanic.
He gradually worked his way
up the ladder and, in 1975
when Ford offered him a
small dealership in Michigan,
he became the sole owner of
his first dealership. All three
of his children are actively involved in the family business.
Mr. Cook is an active member of the DADA, having
served on the executive committee from 2000-2003, and
on the DADA board of directors from 1998-present. He
is also a chairman emeritus
of the NAIAS 2005, serves
on the DADA Charitable
Foundation Fund Advisory
Committee, the Auto Dealers of Michigan, LLC board
of directors, and the MADA
board of directors.
Mr. Jerome knew early in
life the value of education
as a tool to achieve success.
Upon being elected to the
Hall of Fame of his former
high school, he established
a scholarship to honor and
recognize his long-time coach
and mentor. Throughout his
career, he has sought to help
others, particularly those
coming from underprivileged
backgrounds and others in
whom he saw the potential to
succeed.
Mr. Cook is a past president
of the Metro Detroit Buick
Dealers and has served on
the National Dealer Advisory
Council for Mazda North
America Operations, the Nissan Dealer Advisory Council
and the Porsche Board of
Regents.
In 2003, Mr. Jerome was
vested with the doctor of
laws, honoris causa from
Northwood University. He
is also is a trustee, serving as
vice chairman of the Board of
Trustees of Northwood. He
currently serves as a director
for the MADA and is a past
director of the DADA.
Mr. Thibodeau, senior cochairman of NAIAS 2007 is
also an active DADA member, serving on the executive
committee from 2003-2005.
Committed to Detroit area
educational programs, Mr.
Thibodeau initiated an automotive education day, the
catalyst for the inaugural NAIAS 2005 Automotive Education Day. Attracting more
than 3,000 students from
Michigan and surrounding
states the event offered seminars on automotive education
and careers.
Mr. Siemans has been a
member of MADA for more
than 20 years and has been
on the Board of Directors
since 2000. He serves on
the Ford and Chrysler dealer
councils, as well as the FDAF
and Dodge DDA councils.
He has received the Ford Blue
Oval award, the Chrysler Five
Star award and been recognized as the top CSI in the
Detroit region for Mazda.
page 10
Mr. Thibodeau has served
on the Board of the Sacred
Heart Major Seminary, and
as president of the Country
Club of Detroit, the Detroit
Racquet Club and the North
American Racquet Club Association.
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
� ��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
� ��
page 11
M
otor vehicle accidents are the
leading cause of death on the
job. And driving distractions
are the leading cause of motor vehicle
accidents.* Families, businesses, and
communities can be changed forever
by a brief moment of inattentiveness
behind the wheel.
Employers
mployers should develop,
E
communicate, and enforce clearly
defined policies that address driving
distractions while operating a
company vehicle. Your local Federated
representative can help! Call today.
It’s Our Business
to Protect Yours.®
* National Highway Traffic Safety Administration
Report, “What Do Traffic Crashes Cost? Total Cost
to Employers by State and Industry,” 1998-2000
page 12
The FEDERATED Insurance Companies
Home Office: 121 East Park Square, Owatonna, Minnesota 55060
(507) 455-5200 www.federatedinsurance.com
�